Kulicke and Soffa Industries, Inc. Net Income dropped on 55.1% while EBITDA Margin increased on 4.9 pp from 16.0% to 20.9%
11/19/2018 • About Kulicke and Soffa Industries, Inc. (
$KLIC) • By InTwits
Kulicke and Soffa Industries, Inc. reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- Kulicke and Soffa Industries, Inc. is a growth stock: FY2018 revenue growth was 9.9%, 5 year revenue CAGR was 10.7% at FY2018 ROIC 18.0%
- EBITDA Margin is expanding: 20.9% in FY2018 vs. 16.0% in FY2017 vs. 15.9% in FY2014
- Kulicke and Soffa Industries, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.0%. At the same time it's in pair with industry average of 7.4%
- CAPEX is quite volatile: $20m in FY2018, $26m in FY2017, $6m in FY2016, $10m in FY2015, $10m in FY2014
- The company has highly profitable business model: ROIC is 18.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Kulicke and Soffa Industries, Inc.'s Revenue increased on 9.9%. Revenue growth showed slowdown in FY18Q4 - it was -14.4% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.71 pp from 2.2% to 2.9% in 2018. During FY2014-FY2018 EBITDA Margin bottomed in FY2015 at 10.5% and was growing since that time.
Gross Margin decreased slightly on 1.2 pp from 47.2% to 46.1% in FY2018. SG&A as a % of Revenue decreased on 2.7 pp from 16.5% to 13.9% in FY2018. During the last 5 years SG&A as a % of Revenue topped in FY2015 at 24.6% and was declining since that time.
Net Income margin decreased on 9.2 pp from 15.6% to 6.4% in FY2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 2.3% in FY2018. Kulicke and Soffa Industries, Inc.'s CAPEX/Revenue showed almost no change from FY2015 to FY2018. Average CAPEX/Revenue for the last three years was 2.2%.
Return on investment
The company operates at good ROIC (18.0%) while ROE is low (6.3%). ROIC increased on 5.2 pp from 12.8% to 18.0% in FY2018. ROE decreased on 8.3 pp from 14.6% to 6.3% in FY2018. During the last 5 years ROIC bottomed in FY2015 at 4.6% and was growing since that time.
Leverage (Debt)
The company has no debt. Cash dropped on 18.3%.
Valuation and dividends
Kulicke and Soffa Industries, Inc.'s trades at EV/EBITDA 5.8x and P/E 24.6x.
Management team
Fusen E Chen is a the company's CEO. Fusen E Chen is a founder and has spent 2 years with the company.
Financial and operational results
FY ended 09/29/2018
Kulicke and Soffa Industries, Inc. ($KLIC) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 568.6 | 536.5 | 627.2 | 809.0 | 889.1 | 9.9% |
| Gross Profit | 273.6 | 259.1 | 286.7 | 382.1 | 409.4 | 7.2% |
| SG&A | 113.5 | 131.8 | 141.8 | 133.6 | 123.2 | -7.8% |
| EBITDA | 90.5 | 56.2 | 68.8 | 129.3 | 185.6 | 43.5% |
| Net Income | 63.0 | 50.6 | 47.1 | 126.1 | 56.7 | -55.1% |
Balance Sheet
|
|---|
| Cash | 588.0 | 498.6 | 547.9 | 392.4 | 320.6 | -18.3% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 10.1 | 10.3 | 6.2 | 25.6 | 20.5 | -19.9% |
Ratios
|
|---|
| Revenue growth | 6.3% | -5.6% | 16.9% | 29.0% | 9.9% | |
| EBITDA growth | 7.4% | -37.9% | 22.3% | 88.1% | 43.5% | |
|
|---|
| Gross Margin | 48.1% | 48.3% | 45.7% | 47.2% | 46.1% | -1.2% |
| EBITDA Margin | 15.9% | 10.5% | 11.0% | 16.0% | 20.9% | 4.9% |
| SG&A, % of revenue | 20.0% | 24.6% | 22.6% | 16.5% | 13.9% | -2.7% |
| Net Income Margin | 11.1% | 9.4% | 7.5% | 15.6% | 6.4% | -9.2% |
| CAPEX, % of revenue | 1.8% | 1.9% | 1.0% | 3.2% | 2.3% | -0.9% |
|
|---|
| ROIC | 9.7% | 4.6% | 6.5% | 12.8% | 18.0% | 5.2% |
| ROE | 8.4% | 6.5% | 6.0% | 14.6% | 6.3% | -8.3% |
| Net Debt/EBITDA | -6.5x | -8.9x | -8.0x | -3.0x | -1.7x | 1.3x |
Kulicke and Soffa Industries, Inc. ($KLIC) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 214 | 222 | 269 | 185 | | 42.8% | 11.1% | 10.2% | -14.4% |
| EBITDA | 44 | 43 | 69 | 29 | | 105.5% | 7.1% | 253.5% | -36.5% |
| Net Income | -70 | 36 | 60 | 30 | | -546.2% | 11.2% | 73.1% | -28.1% |
Balance Sheet
|
|---|
| Cash | 391 | 340 | 363 | 321 | | -32.3% | -21.8% | -20.4% | -18.3% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 45.5% | 44.8% | 47.2% | 46.4% | | -0.2% | -1.4% | 0.5% | -3.3% |
| EBITDA Margin | 20.4% | 19.5% | 25.8% | 15.9% | | 6.2% | -0.7% | 17.8% | -5.6% |
| Net Income Margin | -32.5% | 16.4% | 22.4% | 16.0% | | -43.0% | 0.0% | 8.1% | -3.1% |
Peers in Semiconductor Equipment
Below you can find Kulicke and Soffa Industries, Inc. benchmarking vs. other companies in Semiconductor Equipment industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Atomera Incorporated ($ATOM) | | | | | 123.6% |
| ACM Research, Inc. ($ACMR) | | | -12.3% | 33.4% | 104.5% |
| SCI Engineered Materials Inc ($SCIA) | | -13.0% | -32.1% | 24.4% | 67.0% |
| Aehr Test Systems ($AEHR) | | -49.1% | 44.7% | 30.3% | 56.4% |
| SolarEdge Technologies, Inc. ($SEDG) | | 144.0% | 50.7% | 23.9% | 54.4% |
| |
|---|
| Median (37 companies) | | -0.5% | 6.5% | 24.2% | 15.5% |
|---|
| Kulicke and Soffa Industries, Inc. ($KLIC) | | -5.6% | 16.9% | 29.0% | 9.9% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Xperi Corporation ($XPER) | 99.5% | 99.8% | 99.8% | 98.3% | 96.7% |
| KLA-Tencor Corporation ($KLAC) | 57.9% | 56.8% | 61.0% | 63.0% | 64.1% |
| Teradyne, Inc. ($TER) | 53.3% | 55.8% | 54.7% | 57.2% | 58.1% |
| Nova Measuring Instruments Ltd. ($NVMI) | 52.7% | 51.9% | 45.9% | 59.1% | 57.8% |
| Nanometrics Incorporated ($NANO) | 47.2% | 47.9% | 51.6% | 52.9% | 56.7% |
| |
|---|
| Median (38 companies) | 34.4% | 38.3% | 37.3% | 43.2% | 40.2% |
|---|
| Kulicke and Soffa Industries, Inc. ($KLIC) | 48.1% | 48.3% | 45.7% | 47.2% | 46.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| KLA-Tencor Corporation ($KLAC) | 29.2% | 26.4% | 34.4% | 38.3% | 39.6% |
| DAQO New Energy Corp. ($DQ) | 32.9% | 31.6% | 43.3% | 49.1% | 36.1% |
| Xperi Corporation ($XPER) | 66.7% | 67.5% | 47.6% | 23.4% | 34.3% |
| Lam Research Corporation ($LRCX) | 21.1% | 20.3% | 23.2% | 27.6% | 32.0% |
| Cabot Microelectronics Corporation ($CCMP) | 21.6% | 22.6% | 23.4% | 27.2% | 31.5% |
| |
|---|
| Median (37 companies) | 6.8% | 9.8% | 12.1% | 16.2% | 16.2% |
|---|
| Kulicke and Soffa Industries, Inc. ($KLIC) | 15.9% | 10.5% | 11.0% | 16.0% | 20.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Rubicon Technology, Inc. ($RBCN) | 15.0% | 4.0% | 3.6% | 0.0% | 58.8% |
| DAQO New Energy Corp. ($DQ) | 42.2% | 44.7% | 29.5% | 19.8% | 47.4% |
| AXT Inc ($AXTI) | 2.4% | 5.4% | 3.4% | 21.6% | 39.6% |
| STR Holdings Inc ($STRI) | 7.9% | 8.1% | 1.6% | 9.0% | 36.6% |
| Photronics, Inc. ($PLAB) | 20.0% | 19.8% | 10.4% | 20.4% | 17.3% |
| |
|---|
| Median (37 companies) | 2.3% | 2.9% | 2.6% | 2.8% | 3.0% |
|---|
| Kulicke and Soffa Industries, Inc. ($KLIC) | 1.8% | 1.9% | 1.0% | 3.2% | 2.3% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| KLA-Tencor Corporation ($KLAC) | 17.9% | 16.5% | 27.2% | 34.0% | 39.9% |
| Lam Research Corporation ($LRCX) | 10.7% | 10.9% | 11.8% | 18.7% | 33.9% |
| Versum Materials, Inc. ($VSM) | | 26.2% | 32.4% | 30.0% | 32.1% |
| Advanced Energy Industries, Inc. ($AEIS) | 8.8% | 30.2% | 41.2% | 45.7% | 31.3% |
| SolarEdge Technologies, Inc. ($SEDG) | -815.6% | 33.6% | 31.2% | 26.5% | 28.6% |
| |
|---|
| Median (39 companies) | 3.4% | 6.0% | 7.6% | 12.5% | 11.2% |
|---|
| Kulicke and Soffa Industries, Inc. ($KLIC) | 9.7% | 4.6% | 6.5% | 12.8% | 18.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Xperi Corporation ($XPER) | -0.3x | -0.1x | 4.2x | 5.0x | 2.6x |
| Ultra Clean Holdings, Inc. ($UCTT) | -1.2x | 1.5x | 0.4x | -0.2x | 2.4x |
| Ichor Holdings ($ICHR) | 3.1x | 1.7x | -0.4x | 2.0x | 1.8x |
| Versum Materials, Inc. ($VSM) | -0.2x | -0.1x | 2.7x | 2.1x | 1.4x |
| DAQO New Energy Corp. ($DQ) | 4.6x | 4.3x | 2.3x | 0.9x | 1.2x |
| |
|---|
| Median (31 companies) | -1.2x | -1.0x | -1.2x | -0.7x | -1.0x |
|---|
| Kulicke and Soffa Industries, Inc. ($KLIC) | -6.5x | -8.9x | -8.0x | -3.0x | -1.7x |
