• Revenue: $181.3 million for the fourth quarter.
• Non-GAAP EPS: $0.34 for the fourth quarter.
• Gross Margin: 48.3% due to an improving mix of higher performance ball and wedge systems.
• Net Income Tax Benefit: $2 million, primarily from a $6.5 million tax benefit.
• December Quarter Revenue Guidance: Approximately $165 million, plus or minus $10 million.
• December Quarter Gross Margin Guidance: 47%.
• December Quarter Non-GAAP Operating Expenses Guidance: $70.5 million, plus or minus 2%.
• December Quarter GAAP EPS Guidance: $1.45 per share.
• December Quarter Non-GAAP EPS Guidance: $0.28 per share.
• Dividend Increase: Approval of the fifth consecutive dividend raise.
• Share Repurchase Program: Authorization of a new repurchase program following the completion of the existing one.

• Warning! GuruFocus has detected 5 Warning Signs with BOM:535602.

Release Date: November 14, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Kulicke & Soffa Industries Inc (NASDAQ:KLIC) reported a significant foundry win with their Copper First Hybrid Bonding Process, expected to reach a 3-micron pitch.
• The company has a strong leadership position in fluxless thermo-compression bonding (FTC), with over 100 systems installed globally and approaching $200 million in cumulative sales.
• Revenue for the fourth quarter was $181.3 million, with a non-GAAP EPS of $0.34, indicating a solid financial performance.
• Kulicke & Soffa Industries Inc (NASDAQ:KLIC) announced an increase in their dividend and a new share repurchase program, reflecting a commitment to returning value to shareholders.
• The company anticipates a recovery in key markets, including general semiconductor and automotive, through fiscal 2025, driven by technology transitions and increased demand.

Negative Points

• LED demand remains very soft, impacting the company's performance in this segment.
• The company experienced a sequential reduction in general semiconductor revenue due to shipment schedules and revenue recognition timelines.
• Kulicke & Soffa Industries Inc (NASDAQ:KLIC) faced challenges in the automotive and industrial markets during fiscal 2024, which offset improvements in other areas.
• Non-GAAP operating expenses were higher than expected due to foreign exchange and end-of-year accrual adjustments.
• The company is still recovering from the Project W-related charges, with a $105 million impairment in Q2, although a significant portion is expected to be reimbursed.

Q & A Highlights

Q: Can you provide an update on the utilization rates at your OSAT customers and the threshold for adding capacity? A: Utilization rates differ by region and end market. In China, it's over 80%, while globally, it's in the mid-70s. We believe 80% is the threshold for adding capacity. (Lester Wong, CFO)

Q: Regarding the recent foundry win for the TCB RAPID Pro, is it at a major foundry, and what is the long-term opportunity? A: The recent win involves multiple systems for near-term production, with potential upside next year. We haven't received a long-term forecast yet but expect significant future opportunities. (Fusen Chen, CEO)

Q: How did the general semiconductor market recover during fiscal '24, and what are the projections for fiscal '25? A: The market is expected to grow by 7-8% in units and 14% in revenue, driven by AI, automotive, and IoT. We anticipate a strong second half in fiscal '25, with ball bonder demand increasing significantly. (Fusen Chen, CEO)

Q: Can you explain the reimbursement related to Project W and how it compares to the total charge-off? A: We reached an agreement for reimbursement of a significant portion of the $105 million impairment charge. The reimbursement will be recognized in Q1 and is included in our current guidance. (Lester Wong, CFO)

Q: What are the expectations for gross margin in the wire and wedge bonder business moving into next year? A: We aim for a corporate margin of 50%, with higher-margin products in ball and wedge bonder businesses becoming a larger percentage of sales. We expect margin expansion as we progress into fiscal '25. (Lester Wong, CFO)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.