DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - shares | 9 Months Ended | |
Jun. 29, 2019 | Jul. 29, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 0-121 | |
Entity Registrant Name | KULICKE & SOFFA INDUSTRIES INC | |
Entity Central Index Key | 0000056978 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | PA | |
Entity Tax Identification Number | 23-1498399 | |
Entity Address, Address Line One | 23A Serangoon North Avenue 5 | |
Entity Address, Address Line Two | #01-01 | |
Entity Address, Address Line Three | K&S Corporate Headquarters | |
Entity Address, City or Town | Singapore | |
Entity Address, Country | SG | |
Entity Address, Postal Zip Code | 554369 | |
City Area Code | 215 | |
Local Phone Number | 784-6000 | |
Title of 12(b) Security | Common Stock, Without Par Value | |
Trading Symbol | KLIC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --09-28 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Document Period End Date | Jun. 29, 2019 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 63,407,840 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 29, 2019 | Sep. 29, 2018 | |||
Current assets: | |||||
Cash and cash equivalents | $ 395,538 | $ 320,630 | |||
Restricted cash | 474 | [1] | 518 | [2] | |
Short-term investments | [3] | 248,000 | 293,000 | ||
Accounts and other receivable, net of allowance for doubtful accounts of $0 and $385, respectively | 151,246 | 243,373 | |||
Inventories, net | 98,049 | 115,191 | |||
Prepaid expenses and other current assets | 25,133 | 14,561 | |||
Total current assets | 918,440 | 987,273 | |||
Property, plant and equipment, net | 74,851 | 76,067 | |||
Goodwill | 56,248 | 56,550 | |||
Intangible assets, net | 46,198 | 52,871 | |||
Deferred income taxes | 8,159 | 9,017 | |||
Equity investments | 6,301 | 1,373 | |||
Other assets | 2,372 | 2,589 | |||
TOTAL ASSETS | 1,112,569 | 1,185,740 | |||
Current liabilities: | |||||
Short term debt | 71,194 | 0 | |||
Accounts payable | 42,337 | 48,527 | |||
Accrued expenses and other current liabilities | 63,465 | 105,978 | |||
Income taxes payable | 12,258 | 19,571 | |||
Total current liabilities | 189,254 | 174,076 | |||
Financing obligation | 14,701 | 15,187 | |||
Deferred income taxes | 27,154 | 25,591 | |||
Income taxes payable | 84,617 | 81,491 | |||
Other liabilities | 9,408 | 9,188 | |||
TOTAL LIABILITIES | 325,134 | 305,533 | |||
Commitments and contingent liabilities (Note 14) | |||||
SHAREHOLDERS' EQUITY: | |||||
Preferred stock, without par value: Authorized 5,000 shares; issued - none | 0 | 0 | |||
Authorized 200,000 shares; issued 85,349 and 84,659, respectively; outstanding 63,837 and 67,143 shares, respectively | 530,016 | 519,244 | |||
Treasury stock, at cost, 21,512 and 17,516 shares, respectively | (334,248) | (248,664) | |||
Retained earnings | 595,803 | 613,529 | |||
Accumulated other comprehensive loss | (4,136) | (3,902) | |||
TOTAL SHAREHOLDERS' EQUITY | 787,435 | 880,207 | |||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 1,112,569 | $ 1,185,740 | |||
[1] | Fair value approximates cost basis. | ||||
[2] | Fair value approximates cost basis. | ||||
[3] | All short-term investments were classified as available-for-sale and were measured at fair value based on level one measurement, or quoted market prices, as defined by ASC 820. The Company did not recognize any realized gains or losses on the sale of investments during the three and nine months ended June 29, 2019 and June 30, 2018 . |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 29, 2019 | Sep. 29, 2018 |
Consolidated Balance Sheets Parenthetical [Abstract] | ||
Allowance for doubtful accounts and notes receivable | $ 0 | $ 385 |
Preferred stock, without par value (usd per share) | $ 0 | $ 0 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, no par value (usd per share) | $ 0 | $ 0 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 85,349,000 | 84,659,000 |
Common stock, shares outstanding | 63,837,000 | 67,143,000 |
Treasury stock, shares | 21,512,000 | 17,516,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Revenues | $ 127,109 | $ 268,834 | $ 400,225 | $ 704,297 |
Cost of sales | 68,329 | 141,865 | 211,073 | 380,679 |
Gross profit | 58,780 | 126,969 | 189,152 | 323,618 |
Selling, general and administrative | 28,724 | 32,532 | 87,626 | 92,679 |
Research and development | 28,229 | 29,974 | 87,609 | 88,881 |
Operating expenses | 56,953 | 62,506 | 175,235 | 181,560 |
(Loss)/income from operations | 1,827 | 64,463 | 13,917 | 142,058 |
Interest income | 3,956 | 3,459 | 11,647 | 8,420 |
Interest expense | (632) | (263) | (1,137) | (799) |
Income before income taxes | 5,151 | 67,659 | 24,427 | 149,679 |
Income tax expense | 3,864 | 7,282 | 19,106 | 122,494 |
Share of results of equity-method investee, net of tax | 0 | 121 | 72 | 144 |
Net (loss)/income | $ 1,287 | $ 60,256 | $ 5,249 | $ 27,041 |
Net (loss)/income per share: | ||||
Basic (in dollars per share) | $ 0.02 | $ 0.87 | $ 0.08 | $ 0.39 |
Diluted (in dollars per share) | $ 0.02 | $ 0.86 | $ 0.08 | $ 0.38 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 64,683 | 69,125 | 65,914 | 70,019 |
Diluted (in shares) | 65,431 | 70,302 | 66,597 | 71,113 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income/(loss) | $ 1,287 | $ 60,256 | $ 5,249 | $ 27,041 |
Other comprehensive (loss)/income: | ||||
Foreign currency translation adjustment | (42) | (8,409) | (1,430) | (817) |
Unrecognized actuarial gain/(loss) on pension plan, net of tax | (31) | 61 | (9) | 36 |
Foreign currency translation and pension plan, net of tax | (73) | (8,348) | (1,439) | (781) |
Derivatives designated as hedging instruments: | ||||
Unrealized gain on derivative instruments, net of tax | (49) | (1,542) | 39 | (513) |
Reclassification adjustment for loss/(gain) on derivative instruments recognized, net of tax | 33 | (344) | 1,165 | (1,884) |
Net decrease/(increase) from derivatives designated as hedging instruments, net of tax | (16) | (1,886) | 1,204 | (2,397) |
Total other comprehensive income/(loss) | (89) | (10,234) | (235) | (3,178) |
Comprehensive (loss)/income | $ 1,198 | $ 50,022 | $ 5,014 | $ 23,863 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Treasury Stock | Retained earnings | Accumulated Other Comprehensive loss |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative effect of accounting changes | $ 5,420 | $ 1,414 | $ 4,006 | ||
Beginning balance at Sep. 30, 2017 | 920,030 | $ 506,515 | $ (157,604) | 569,080 | $ 2,039 |
Beginning balance (shares) at Sep. 30, 2017 | 70,197 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of stock for services rendered (shares) | 9 | ||||
Issuance of stock for services rendered | 195 | $ 195 | |||
Repurchase of common stock (shares) | (148) | ||||
Repurchase of common stock | (3,280) | (3,280) | |||
Exercise of stock options (shares) | 6 | ||||
Exercise of stock options | 55 | $ 55 | |||
Issuance of shares for market-based restricted stock and time-based restricted stock (shares) | 540 | ||||
Issuance of shares for market-based restricted stock and time-based restricted stock | 0 | ||||
Equity-based compensation | 2,557 | $ 2,557 | |||
Net income/(loss) | (69,528) | (69,528) | |||
Other comprehensive loss | 1,825 | 1,825 | |||
Total comprehensive income/(loss) | (67,703) | (69,528) | 1,825 | ||
Ending balance (shares) at Dec. 30, 2017 | 70,604 | ||||
Ending balance at Dec. 30, 2017 | 857,274 | $ 510,736 | (160,884) | 503,558 | 3,864 |
Beginning balance at Sep. 30, 2017 | 920,030 | $ 506,515 | (157,604) | 569,080 | 2,039 |
Beginning balance (shares) at Sep. 30, 2017 | 70,197 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income/(loss) | 27,041 | ||||
Other comprehensive loss | (3,178) | ||||
Total comprehensive income/(loss) | 23,863 | ||||
Ending balance (shares) at Jun. 30, 2018 | 68,006 | ||||
Ending balance at Jun. 30, 2018 | 882,082 | $ 516,208 | (224,938) | 591,951 | (1,139) |
Beginning balance at Dec. 30, 2017 | 857,274 | $ 510,736 | (160,884) | 503,558 | 3,864 |
Beginning balance (shares) at Dec. 30, 2017 | 70,604 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of stock for services rendered (shares) | 8 | ||||
Issuance of stock for services rendered | 195 | $ 195 | |||
Repurchase of common stock (shares) | (898) | ||||
Repurchase of common stock | (21,470) | (21,470) | |||
Issuance of shares for market-based restricted stock and time-based restricted stock (shares) | 73 | ||||
Issuance of shares for market-based restricted stock and time-based restricted stock | 0 | ||||
Equity-based compensation | 2,384 | $ 2,384 | |||
Net income/(loss) | 36,313 | 36,313 | |||
Other comprehensive loss | 5,231 | 5,231 | |||
Total comprehensive income/(loss) | 41,544 | 36,313 | 5,231 | ||
Ending balance (shares) at Mar. 31, 2018 | 69,787 | ||||
Ending balance at Mar. 31, 2018 | 879,927 | $ 513,315 | (182,354) | 539,871 | 9,095 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of stock for services rendered (shares) | 8 | ||||
Issuance of stock for services rendered | 195 | $ 195 | |||
Repurchase of common stock (shares) | (1,793) | ||||
Repurchase of common stock | (42,584) | (42,584) | |||
Issuance of shares for market-based restricted stock and time-based restricted stock (shares) | 4 | ||||
Issuance of shares for market-based restricted stock and time-based restricted stock | 0 | ||||
Equity-based compensation | 2,698 | $ 2,698 | |||
Net income/(loss) | 60,256 | 60,256 | |||
Other comprehensive loss | (10,234) | (10,234) | |||
Total comprehensive income/(loss) | 50,022 | 60,256 | (10,234) | ||
Ending balance (shares) at Jun. 30, 2018 | 68,006 | ||||
Ending balance at Jun. 30, 2018 | 882,082 | $ 516,208 | (224,938) | 591,951 | (1,139) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative effect of accounting changes | 534 | ||||
Beginning balance at Sep. 29, 2018 | 880,207 | $ 519,244 | (248,664) | 613,529 | (3,902) |
Beginning balance (shares) at Sep. 29, 2018 | 67,143 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of stock for services rendered (shares) | 8 | ||||
Issuance of stock for services rendered | 195 | $ 195 | |||
Repurchase of common stock (shares) | (1,233) | ||||
Repurchase of common stock | (25,485) | (25,485) | |||
Issuance of shares for market-based restricted stock and time-based restricted stock (shares) | 642 | ||||
Issuance of shares for market-based restricted stock and time-based restricted stock | 0 | ||||
Equity-based compensation | 3,678 | $ 3,678 | |||
Cash dividend declared | (8,055) | (8,055) | |||
Net income/(loss) | 7,517 | 7,517 | |||
Other comprehensive loss | (182) | (182) | |||
Total comprehensive income/(loss) | 7,335 | 7,517 | (182) | ||
Ending balance (shares) at Dec. 29, 2018 | 66,560 | ||||
Ending balance at Dec. 29, 2018 | 858,409 | $ 523,117 | (274,149) | 613,525 | (4,084) |
Beginning balance at Sep. 29, 2018 | $ 880,207 | $ 519,244 | (248,664) | 613,529 | (3,902) |
Beginning balance (shares) at Sep. 29, 2018 | 67,143 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Repurchase of common stock (shares) | (4,000) | ||||
Repurchase of common stock | $ (85,600) | ||||
Net income/(loss) | 5,249 | ||||
Other comprehensive loss | (235) | ||||
Total comprehensive income/(loss) | 5,014 | ||||
Ending balance (shares) at Jun. 29, 2019 | 63,837 | ||||
Ending balance at Jun. 29, 2019 | 787,435 | $ 530,016 | (334,248) | 595,803 | (4,136) |
Beginning balance at Dec. 29, 2018 | 858,409 | $ 523,117 | (274,149) | 613,525 | (4,084) |
Beginning balance (shares) at Dec. 29, 2018 | 66,560 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of stock for services rendered (shares) | 10 | ||||
Issuance of stock for services rendered | 195 | $ 195 | |||
Repurchase of common stock (shares) | (1,225) | ||||
Repurchase of common stock | (26,922) | (26,922) | |||
Issuance of shares for market-based restricted stock and time-based restricted stock (shares) | 4 | ||||
Issuance of shares for market-based restricted stock and time-based restricted stock | 0 | ||||
Equity-based compensation | 3,107 | $ 3,107 | |||
Cash dividend declared | (8,057) | (8,057) | |||
Net income/(loss) | (3,555) | (3,555) | |||
Other comprehensive loss | 37 | 37 | |||
Total comprehensive income/(loss) | (3,518) | (3,555) | 37 | ||
Ending balance (shares) at Mar. 30, 2019 | 65,349 | ||||
Ending balance at Mar. 30, 2019 | 823,214 | $ 526,419 | (301,071) | 601,913 | (4,047) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of stock for services rendered (shares) | 10 | ||||
Issuance of stock for services rendered | $ 222 | $ 222 | |||
Repurchase of common stock (shares) | (1,500) | (1,538) | |||
Repurchase of common stock | $ (33,177) | (33,177) | |||
Issuance of shares for market-based restricted stock and time-based restricted stock (shares) | 16 | ||||
Issuance of shares for market-based restricted stock and time-based restricted stock | 0 | ||||
Equity-based compensation | 3,375 | $ 3,375 | |||
Cash dividend declared | (7,397) | (7,397) | |||
Net income/(loss) | 1,287 | 1,287 | |||
Other comprehensive loss | (89) | (89) | |||
Total comprehensive income/(loss) | 1,198 | 1,287 | (89) | ||
Ending balance (shares) at Jun. 29, 2019 | 63,837 | ||||
Ending balance at Jun. 29, 2019 | $ 787,435 | $ 530,016 | $ (334,248) | $ 595,803 | $ (4,136) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 29, 2019 | Jun. 30, 2018 | |
Net income/(loss) | $ 5,249 | $ 27,041 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 15,001 | 14,163 |
Equity-based compensation and employee benefits | 10,772 | 8,224 |
Excess tax benefits from stock-based compensation | 0 | (50) |
Adjustment for doubtful accounts | (385) | 675 |
Adjustment for inventory valuation | 2,059 | 3,419 |
Deferred income taxes | 2,450 | 21,480 |
Loss/(gain) on disposal of property, plant and equipment | (19) | (421) |
Unrealized foreign currency translation | 117 | 606 |
Share of results of equity-method investee | 72 | 144 |
Changes in operating assets and liabilities: | ||
Accounts and other receivable | 92,696 | (58,949) |
Inventory | 15,960 | (5,141) |
Prepaid expenses and other current assets | (10,623) | 2,702 |
Accounts payable, accrued expenses and other current liabilities | (48,148) | (1,893) |
Income taxes payable | (3,655) | 84,105 |
Other, net | 1,635 | (2,262) |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net cash provided by operating activities | 83,181 | 93,843 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | (9,665) | (16,152) |
Proceeds from sales of property, plant and equipment | 39 | 625 |
Purchase of equity investments | (5,000) | 0 |
Purchase of short-term investments | (489,000) | (487,000) |
Maturity of short-term investments | 534,000 | 445,000 |
Net cash provided by /(used in) investing activities | 30,374 | (57,527) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payment on debts | (574) | (526) |
Proceeds from exercise of common stock options | 0 | 55 |
Repurchase of common stock | (85,469) | (65,334) |
Dividend payment | (23,902) | 0 |
Proceeds from Short-term Debt | 71,194 | 0 |
Net cash used in financing activities | (38,751) | (65,805) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 60 | (251) |
Changes in cash, cash equivalents and restricted cash | 74,864 | (29,740) |
Cash, cash equivalents and restricted cash at beginning of period | 321,148 | 392,940 |
Cash, cash equivalents and restricted cash at end of period | 396,012 | 363,200 |
CASH PAID FOR: | ||
Interest | 747 | 799 |
Income taxes, net of refunds | $ 21,373 | $ 9,500 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Jun. 29, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION These consolidated condensed financial statements include the accounts of Kulicke and Soffa Industries, Inc. and its subsidiaries (the “Company”), with appropriate elimination of intercompany balances and transactions. The interim consolidated condensed financial statements are unaudited and, in management's opinion, include all adjustments (consisting only of normal and recurring adjustments) necessary for a fair statement of results for these interim periods. The interim consolidated condensed financial statements do not include all of the information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended September 29, 2018, filed with the Securities and Exchange Commission, which includes Consolidated Balance Sheets as of September 29, 2018 and September 30, 2017, and the related Consolidated Statements of Operations, Statements of Other Comprehensive Income, Changes in Shareholders' Equity and Cash Flows for each of the years in the three-year period ended September 29, 2018. The results of operations for any interim period are not necessarily indicative of the results of operations for any other interim period or for a full year. Fiscal Year Each of the Company's first three fiscal quarters end on the Saturday that is 13 weeks after the end of the immediately preceding fiscal quarter. The fourth quarter of each fiscal year ends on the Saturday closest to September 30. Fiscal 2019 quarters end on December 29, 2018, March 30, 2019, June 29, 2019 and September 28, 2019. In fiscal years consisting of 53 weeks, the fourth quarter will consist of 14 weeks. Fiscal 2018 quarters ended on December 30, 2017, March 31, 2018, June 30, 2018 and September 29, 2018. Nature of Business The Company designs, manufactures and sells capital equipment and tools as well as services, maintains, repairs and upgrades equipment, all used to assemble semiconductor devices. The Company's operating results depend upon the capital and operating expenditures of semiconductor device manufacturers, integrated device manufacturers, outsourced semiconductor assembly and test providers (“OSATs”), and other electronics manufacturers including automotive electronics suppliers, worldwide which, in turn, depend on the current and anticipated market demand for semiconductors and products utilizing semiconductors. The semiconductor industry is highly volatile and experiences downturns and slowdowns which can have a severe negative effect on the semiconductor industry's demand for semiconductor capital equipment, including assembly equipment manufactured and sold by the Company and, to a lesser extent, tools, including those sold by the Company. These downturns and slowdowns have in the past adversely affected the Company's operating results. The Company believes such volatility will continue to characterize the industry and the Company's operations in the future. Use of Estimates The preparation of consolidated condensed financial statements requires management to make assumptions, estimates and judgments that affect the reported amounts of assets and liabilities, net revenue and expenses during the reporting periods, and disclosures of contingent assets and liabilities as of the date of the consolidated condensed financial statements. On an ongoing basis, management evaluates estimates, including but not limited to, those related to accounts receivable, reserves for excess and obsolete inventory, carrying value and lives of fixed assets, goodwill and intangible assets, the valuation estimates and assessment of impairment and observable price adjustments, valuation allowances for deferred tax assets and deferred tax liabilities, repatriation of un-remitted foreign subsidiary earnings, equity-based compensation expense, and warranties. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable. As a result, management makes judgments regarding the carrying values of the Company's assets and liabilities that are not readily apparent from other sources. Authoritative pronouncements, historical experience and assumptions also are used as the basis for making estimates, and on an ongoing basis, management evaluates these estimates. Actual results may differ from these estimates. Vulnerability to Certain Concentrations Financial instruments which may subject the Company to concentrations of credit risk as of June 29, 2019 and September 29, 2018 consisted primarily of trade receivables. The Company manages credit risk associated with investments by investing its excess cash in highly rated debt instruments of the U.S. Government and its agencies, financial institutions, and corporations. The Company has established investment guidelines relative to diversification and maturities designed to maintain safety and liquidity. These guidelines are periodically reviewed and modified as appropriate. The Company does not have any exposure to sub-prime financial instruments or auction rate securities. The Company's trade receivables result primarily from the sale of semiconductor equipment, related accessories and replacement parts, and tools to a relatively small number of large manufacturers in a highly concentrated industry. Write-offs of uncollectible accounts have historically not been significant. The Company actively monitors its customers' financial strength to reduce the risk of loss. The Company's products are complex and require raw materials, components and subassemblies having a high degree of reliability, accuracy and performance. The Company relies on subcontractors to manufacture many of these components and subassemblies and it relies on sole source suppliers for some important components and raw material inventory. Foreign Currency Translation and Remeasurement The majority of the Company's business is transacted in U.S. dollars; however, the functional currencies of some of the Company's subsidiaries are their local currencies. In accordance with ASC No. 830, Foreign Currency Matters (“ASC 830”), for a subsidiary of the Company that has a functional currency other than the U.S. dollar, gains and losses resulting from the translation of the functional currency into U.S. dollars for financial statement presentation are not included in determining net income, but are accumulated in the cumulative translation adjustment account as a separate component of shareholders' equity (accumulated other comprehensive income / (loss)). Under ASC 830, cumulative translation adjustments are not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries. Gains and losses resulting from foreign currency transactions are included in the determination of net income. The Company's operations are exposed to changes in foreign currency exchange rates due to transactions denominated in currencies other than the location's functional currency. The Company is also exposed to foreign currency fluctuations that impact the remeasurement of net monetary assets of those operations whose functional currency, the U.S. dollar, differs from their respective local currencies, most notably in Israel, Singapore and Switzerland. In addition to net monetary remeasurement, the Company has exposures related to the translation of subsidiary financial statements from their functional currency, the local currency, into its reporting currency, the U.S. dollar, most notably in the Netherlands, China, Taiwan, Japan and Germany. The Company's U.S. operations also have foreign currency exposure due to net monetary assets denominated in currencies other than the U.S. dollar. Derivative Financial Instruments The Company’s primary objective for holding derivative financial instruments is to manage the fluctuation in foreign exchange rates and accordingly is not speculative in nature. The Company’s international operations are exposed to changes in foreign exchange rates as described above. The Company has established a program to monitor the forecasted transaction currency risk to protect against foreign exchange rate volatility. Generally, the Company uses foreign exchange forward contracts in these hedging programs. These instruments, which have maturities of up to twelve months, are recorded at fair value and are included in prepaid expenses and other current assets, or accrued expenses and other current liabilities. Our accounting policy for derivative financial instruments is based on whether they meet the criteria for designation as a cash flow hedge. A designated hedge with exposure to variability in the functional currency equivalent of the future foreign currency cash flows of a forecasted transaction is referred to as a cash flow hedge. The criteria for designating a derivative as a cash flow hedge include the assessment of the instrument’s effectiveness in risk reduction, matching of the derivative instrument to its underlying transaction, and the assessment of the probability that the underlying transaction will occur. For derivatives with cash flow hedge accounting designation, we report the after-tax gain / (loss) from the effective portion of the hedge as a component of accumulated other comprehensive income / (loss) and reclassify it into earnings in the same period in which the hedged transaction affects earnings and in the same line item on the Consolidated Condensed Statement of Operations as the impact of the hedged transaction. Derivatives that we designate as cash flow hedges are classified in the Consolidated Condensed Statement of Cash Flows in the same section as the underlying item, primarily within cash flows from operating activities. The hedge effectiveness of these derivative instruments is evaluated by comparing the cumulative change in the fair value of the hedge contract with the cumulative change in the fair value of the forecasted cash flows of the hedged item. If a cash flow hedge is discontinued because it is no longer probable that the original hedged transaction will occur as previously anticipated, the cumulative unrealized gain or loss on the related derivative is reclassified from accumulated other comprehensive income / (loss) into earnings. Subsequent gain / (loss) on the related derivative instrument is recognized into earnings in each period until the instrument matures, is terminated, is re-designated as a qualified cash flow hedge, or is sold. Ineffective portions of cash flow hedges, as well as amounts excluded from the assessment of effectiveness, are recognized in earnings. Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. Cash equivalents are measured at fair value based on level one measurement, or quoted market prices, as defined by ASC No. 820, Fair Value Measurements and Disclosures . Equity Investments The Company invests in equity securities in companies to promote business and strategic objectives. Equity investments are measured and recorded as follows: • Equity method investments are equity securities in investees that provide the Company with the ability to exercise significant influence in which it lacks a controlling financial interest. Our proportionate share of the income or loss is recognized on a one-quarter lag and is recorded as share of results of equity-method investee, net of tax. • Non-marketable equity securities are equity securities without readily determinable fair value that are measured and recorded using a measurement alternative that measures the securities at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes. Allowance for Doubtful Accounts The Company maintains allowances for doubtful accounts for estimated losses resulting from its customers' failure to make required payments. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. If global or regional economic conditions deteriorate or political conditions were to change in some of the countries where the Company does business, it could have a significant impact on the results of operations, and the Company's ability to realize the full value of its accounts receivable. Inventories Inventories are stated at the lower of cost (on a first-in first-out basis) or net realizable value. The Company generally provides reserves for obsolete inventory and for inventory considered to be in excess of demand. Demand is generally defined as 18 months forecasted future consumption for equipment, 24 months forecasted future consumption for spare parts, and 12 months forecasted future consumption for tools. Forecasted consumption is based upon internal projections, historical sales volumes, customer order activity and a review of consumable inventory levels at customers' facilities. The Company communicates forecasts of its future consumption to its suppliers and adjusts commitments to those suppliers accordingly. If required, the Company reserves the difference between the carrying value of its inventory and the lower of cost or net realizable value, based upon projections about future consumption, and market conditions. If actual market conditions are less favorable than projections, additional inventory reserves may be required. Inventory reserve provision for certain subsidiaries is determined based on management's estimate of future consumption for equipment and spare parts. This estimate is based on historical sales volumes, internal projections and market developments and trends. Property, Plant and Equipment Property, plant and equipment are carried at cost. The cost of additions and those improvements which increase the capacity or lengthen the useful lives of assets are capitalized, while repair and maintenance costs are expensed as incurred. Depreciation and amortization are provided on a straight-line basis over the estimated useful lives as follows: buildings 25 years ; machinery, equipment, furniture and fittings 3 to 10 years ; toolings 1 year; and leasehold improvements are based on the shorter of the life of lease or life of asset . Purchased computer software costs related to business and financial systems are amortized over a five-year period on a straight-line basis. Land is not depreciated. Valuation of Long-Lived Assets In accordance with ASC No. 360, Property, Plant & Equipment ("ASC 360"), the Company's property, plant and equipment is tested for impairment based on undiscounted cash flows when triggering events occur, and if impaired, written-down to fair value based on either discounted cash flows or appraised values. ASC 360 also provides a single accounting model for long-lived assets to be disposed of by sale and establishes additional criteria that would have to be met to classify an asset as held for sale. The carrying amount of an asset or asset group is not recoverable to the extent it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group. Estimates of future cash flows used to test the recoverability of a long-lived asset or asset group must incorporate the entity's own assumptions about its use of the asset or asset group and must factor in all available evidence. ASC 360 requires that long-lived assets be tested for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Such events include significant under-performance relative to historical internal forecasts or projected future operating results; significant changes in the manner of use of the assets; significant negative industry or economic trends; or significant changes in market capitalization. During the three and nine months ended June 29, 2019 , no "triggering" events occurred. Accounting for Impairment of Goodwill ASC No. 350, Intangibles-Goodwill and Other ("ASC 350") requires goodwill and other intangible assets with indefinite lives to be reviewed for impairment annually, or more frequently if circumstances indicate a possible impairment. We assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If, after assessing the qualitative factors, a company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying value, then performing the two-step impairment test is unnecessary. However, if a company concludes otherwise, then it is required to perform the first step of the two-step goodwill impairment test. If the carrying value of a reporting unit exceeds its fair value in the first step of the test, then a company is required to perform the second step of the goodwill impairment test to measure the amount of the reporting unit's goodwill impairment loss, if any. In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which eliminates the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment. Under this guidance, the goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount, and recognizing an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value, although it cannot exceed the total amount of goodwill allocated to that reporting unit. This ASU will be effective for us beginning in our first quarter of 2021 and early adoption is permitted. During the third quarter of 2017, we elected to prospectively adopt ASU2017-04. This eliminates the requirement to perform step 2 of the goodwill impairment test. As part of the annual evaluation, the Company performs an impairment test of its goodwill in the fourth quarter of each fiscal year to coincide with the completion of its annual forecasting and refreshing of its business outlook processes. On an ongoing basis, the Company monitors if a “triggering” event has occurred that may have the effect of reducing the fair value of a reporting unit below its respective carrying value. Adverse changes in expected operating results and/or unfavorable changes in other economic factors used to estimate fair values could result in a non-cash impairment charge in the future. Impairment assessments inherently involve judgment as to the assumptions made about the expected future cash flows and the impact of market conditions on those assumptions. Future events and changing market conditions may impact the assumptions as to prices, costs, growth rates or other factors that may result in changes in the estimates of future cash flows. Although the Company believes the assumptions that it has used in testing for impairment are reasonable, significant changes in any one of the assumptions could produce a significantly different result. Indicators of potential impairment may lead the Company to perform interim goodwill impairment assessments, including significant and unforeseen customer losses, a significant adverse change in legal factors or in the business climate, a significant adverse action or assessment by a regulator, a significant stock price decline or unanticipated competition. For further information on goodwill and other intangible assets, see Note 3 below. Revenue Recognition In accordance with ASC No. 606, Revenue from Contracts with Customers , the Company recognizes revenue when we satisfy performance obligations as evidenced by the transfer of control of our products or services to customers. In general, the Company generates revenue from product sales, either directly to customers or to distributors. In determining whether a contract exists, we evaluate the terms of the agreement, the relationship with the customer or distributor and their ability to pay. The Company recognizes revenue from sales of our products, including sales to our distributors, at a point in time, generally upon shipment or delivery to the customer or distributor, depending upon the terms of the sales order. Control is considered transferred when title and risk of loss pass, when the customer becomes obligated to pay and, where applicable, when the customer has accepted the products or upon expiration of the acceptance period. For sales to distributors, payment is due on our standard commercial terms and is not contingent upon resale of the products. Our business is subject to contingencies related to customer orders, including: • Right of Return: A large portion of our revenue comes from the sale of equipments used in the semiconductor assembly process. Other product sales relate to consumable products, which are sold in high-volume quantities, and are generally maintained at low stock levels at our customer's facility. Customer returns have historically represented a very small percentage of customer sales on an annual basis. • Warranties: Our equipment is generally shipped with a one-year warranty against manufacturing defects. We establish reserves for estimated warranty expense when revenue for the related equipment is recognized. The reserve for estimated warranty expense is based upon historical experience and management's estimate of future expenses, including product parts replacement, freight charges and labor costs expected to be incurred to correct product failures during the warranty period. • Conditions of Acceptance: Sales of our consumable products generally do not have customer acceptance terms. In certain cases, sales of our equipment have customer acceptance clauses which may require the equipment to perform in accordance with customer specifications or when installed at the customer's facility. In such cases, if the terms of acceptance are satisfied at our facility prior to shipment, the revenue for the equipment will be recognized upon shipment. If the terms of acceptance are satisfied at our customers' facilities, the revenue for the equipment will not be recognized until acceptance, which is typically obtained after installation and testing, is received from the customer. Service revenue is generally recognized over time as the services are performed. For the three and nine months ended June 29, 2019 , and June 30, 2018 , the service revenue is not material. The Company measures revenue based on the amount of consideration we expect to be entitled to in exchange for products or services. Any variable consideration such as sales incentives are recognized as a reduction of net revenue at the time of revenue recognition. The length of time between invoicing and payment is not significant under any of our payment terms. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. Shipping and handling costs billed to customers are recognized in net revenue. Shipping and handling costs paid by the Company are included in cost of sales. Research and Development The Company charges research and development costs associated with the development of new products to expense when incurred. In certain circumstances, pre-production machines that the Company intends to sell are carried as inventory until sold. Income Taxes In accordance with ASC No. 740, Income Taxes , deferred income taxes are determined using the balance sheet method . The Company records a valuation allowance to reduce its deferred tax assets to the amount it expects is more likely than not to be realized. While the Company has considered future taxable income and its ongoing tax planning strategies in assessing the need for the valuation allowance, if it were to determine that it would be able to realize its deferred tax assets in the future in excess of its net recorded amount, an adjustment to the deferred tax asset would increase income in the period when such determination is made. Likewise, should the Company determine it would not be able to realize all or part of its net deferred tax assets in the future, an adjustment to the deferred tax asset would decrease income in the period when such determination is made. In accordance with ASC No. 740 Topic 10, Income Taxes, General (“ASC 740.10”), the Company accounts for uncertain tax positions taken or expected to be taken in its income tax return. Under ASC 740.10, the Company utilizes a two-step approach for evaluating uncertain tax positions. Step one, or recognition, requires a company to determine if the weight of available evidence indicates a tax position is more likely than not to be sustained upon examination solely based on its technical merit. Step two, or measurement, is based on the largest amount of benefit, which is more likely than not to be realized on settlement with the taxing authority, including resolution of related appeals or litigation processes, if any. Equity-Based Compensation The Company accounts for equity-based compensation under the provisions of ASC No. 718, Compensation - Stock Compensation (“ASC 718”). ASC 718 requires the recognition of the fair value of the equity-based compensation in net income. Compensation expense associated with Relative TSR Performance Share Units is determined using a Monte-Carlo valuation model, and compensation expense associated with time-based and Special/Growth Performance Share Units is determined based on the number of shares granted and the fair value on the date of grant. See Note 9 for a summary of the terms of these performance-based awards. The fair value of the Company's stock option awards is estimated using a Black-Scholes option valuation model. The fair value of equity-based awards is amortized over the vesting period of the award and the Company elected to use the straight-line method for awards granted after the adoption of ASC 718. Earnings per Share Earnings per share (“EPS”) are calculated in accordance with ASC No. 260, Earnings per Share . Basic EPS include only the weighted average number of common shares outstanding during the period. Diluted EPS include the weighted average number of common shares and the dilutive effect of stock options, restricted stock awards, performance share units and restricted share units outstanding during the period, when such instruments are dilutive. Accounting for Business Acquisitions The Company accounts for business acquisitions in accordance with ASC No. 805, Business Combinations . The fair value of the net assets acquired and the results of operations of the acquired businesses are included in the Unaudited Consolidated Condensed Financial Statements from the acquisition date forward. The Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and results of operations during the reporting period. Estimates are used in accounting for, among other things, the fair value of acquired net operating assets, property, plant and equipment, deferred revenue, intangible assets and related deferred tax liabilities, useful lives of property, plant and equipment, and amortizable lives of acquired intangible assets. Any excess of the purchase consideration over the identified fair value of the assets and liabilities acquired is recognized as goodwill. The valuation of these tangible and identifiable intangible assets and liabilities is subject to further management review and may change materially between the preliminary allocation and end of the purchase price allocation period. Restructuring charges Restructuring charges may consist of voluntary or involuntary severance-related charges, asset-related charges and other costs due to exit activities. We recognize voluntary termination benefits when an employee accepts the offered benefit arrangement. We recognize involuntary severance-related charges depending on whether the termination benefits are provided under an ongoing benefit arrangement or under a one-time benefit arrangement. If the former, we recognize the charges once they are probable and the amounts are estimable. If the latter, we recognize the charges once the benefits have been communicated to employees. Recent Accounting Pronouncements Income Taxes In October 2016, the FASB issued ASU 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory. The new guidance is effective for the Company beginning fiscal 2019 and requires the tax effects of intercompany transactions (other than transfers of inventory) to be recognized currently. The Company has adopted the modified retrospective approach for the transition based on the new guidance and, as of the beginning of the period of adoption, has recorded the cumulative effect of adjustments related to intra-entity transfers of intangible and fixed assets of $0.5 million in prior years as an increase to retained earnings. Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under current GAAP. Subsequently in July 2018, the FASB issued ASU 2018-11 -Leases (Topic 842): Targeted Improvements, provides additional information concerning the new leases standard in ASU 2016-02, Leases (Topic 842). The targeted improvements provide entities with additional and optional transition methods. In November 2018, the FASB issued ASU 2018-20 – Leases (Topic 842): Narrow-Scope Improvements for Lessors. This ASU provides guidance in several areas, including the accounting policy election for sales taxes and other similar taxes collected from lessees, accounting for certain lessor costs and accounting for variable payments for contracts with lease and nonlease components. The Company will adopt these ASUs utilizing the modified retrospective transition method through a cumulative-effect adjustment at the beginning of its first quarter of 2020. In addition, we will elect the package of practical expedients permitted under the transition guidance that allowed us to apply prior conclusions related to lease definition, classification and initial direct costs. The adoption of these ASUs will result in an increase in our consolidated balance sheets for these right of use assets and corresponding liabilities. However, the ultimate impact of adopting these ASUs will depend on the Company's lease portfolio as of the adoption date. We are currently evaluating the effects of the adoption of these ASUs on our financial statements. Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU replaces the impairment methodology in current GAAP, which delays recognition of credit losses until it is probable a loss has been incurred, with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This ASU will be effective for us beginning in our first quarter of fiscal 2021. We are currently evaluating the impact of the adoption of this ASU on our financial statements. Derivatives and Hedging In August 2017, the FASB issued ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities (Topic 815). The new guidance expands and refines hedge accounting for both financial and non-financial risks. The new guidance also modifies disclosure requirements for hedging activities. The new guidance will be effective for us beginning in our first quarter of fiscal 2020, and early adoption is permitted in any interim period. We do not expect the adoption of this ASU to have a material impact on our financial statements. Revenue Recognition In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which amends the accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. Subsequently, the FASB has issued the following standards related to ASU 2014-09: ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (“ASU 2016-08”); ASU 2016-10, Revenue from |
BALANCE SHEET COMPONENTS
BALANCE SHEET COMPONENTS | 9 Months Ended |
Jun. 29, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BALANCE SHEET COMPONENTS | BALANCE SHEET COMPONENTS The following tables reflect the components of significant balance sheet accounts as of June 29, 2019 and September 29, 2018 : As of (in thousands) June 29, 2019 September 29, 2018 Short term investments, available-for-sale (1) $ 248,000 $ 293,000 Inventories, net: Raw materials and supplies $ 58,336 $ 63,894 Work in process 31,590 37,829 Finished goods 35,890 40,357 125,816 142,080 Inventory reserves (27,767 ) (26,889 ) $ 98,049 $ 115,191 Property, plant and equipment, net: Land $ 2,182 $ 2,182 Buildings and building improvements (2) 42,125 41,616 Leasehold improvements (2) 24,125 23,561 Data processing equipment and software 36,027 35,469 Machinery, equipment, furniture and fixtures 74,189 68,666 Construction in progress 6,576 6,940 185,224 178,434 Accumulated depreciation (110,373 ) (102,367 ) $ 74,851 $ 76,067 Accrued expenses and other current liabilities: Accrued customer obligations (3) $ 27,491 $ 34,918 Wages and benefits 16,623 44,505 Dividend payable 7,664 8,057 Commissions and professional fees 2,024 5,549 Deferred rent 1,763 1,847 Severance 355 1,415 Other 7,545 9,687 $ 63,465 $ 105,978 (1) All short-term investments were classified as available-for-sale and were measured at fair value based on level one measurement, or quoted market prices, as defined by ASC 820. The Company did not recognize any realized gains or losses on the sale of investments during the three and nine months ended June 29, 2019 and June 30, 2018 . (2) Certain balances as at September 29, 2018 relating to Property, plant and equipment have been reclassified. These reclassifications have no impact to the Consolidated Balance Sheet as at September 29, 2018. (3) Represents customer advance payments, customer credit program, accrued warranty expense and accrued retrofit obligations. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Jun. 29, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill Intangible assets classified as goodwill are not amortized. The goodwill established in connection with our acquisitions represents the estimated future economic benefits arising from the assets we acquired that did not qualify to be identified and recognized individually. The goodwill also includes the value of expected future cash flows of the acquisitions, expected synergies with our other affiliates and other unidentifiable intangible assets. The Company performs an annual impairment test of its goodwill during the fourth quarter of each fiscal year, which coincides with the completion of its annual forecasting and refreshing of business outlook process. The Company performed its annual impairment test in the fourth quarter of fiscal 2018 and concluded that no impairment charge was required. Any future adverse changes in expected operating results and/or unfavorable changes in other economic factors used to estimate fair values could result in a noncash impairment in the future. During the three and nine months ended June 29, 2019 , the Company reviewed qualitative factors to ascertain if a "triggering" event may have taken place that may have the effect of reducing the fair value of the reporting unit below its carrying value and concluded that no triggering event had occurred. The following table summarizes the Company's recorded goodwill as of June 29, 2019 and September 29, 2018 : As of (in thousands) June 29, 2019 September 29, 2018 Capital Equipment $ 29,920 $ 30,159 APS 26,328 26,391 Total goodwill $ 56,248 $ 56,550 Intangible Assets Intangible assets with determinable lives are amortized over their estimated useful lives. The Company's intangible assets consist primarily of developed technology, customer relationships and trade and brand names. The following table reflects net intangible assets as of June 29, 2019 and September 29, 2018 : As of Average estimated (dollar amounts in thousands) June 29, 2019 September 29, 2018 useful lives (in years) Developed technology $ 89,334 $ 90,500 7.0 to 15.0 Accumulated amortization (48,243 ) (45,229 ) Net developed technology $ 41,091 $ 45,271 Customer relationships $ 35,805 $ 36,131 5.0 to 6.0 Accumulated amortization (31,670 ) (29,820 ) Net customer relationships $ 4,135 $ 6,311 Trade and brand names $ 7,321 $ 7,377 7.0 to 8.0 Accumulated amortization (6,349 ) (6,088 ) Net trade and brand names $ 972 $ 1,289 Other intangible assets $ 2,500 $ 2,500 1.9 Accumulated amortization (2,500 ) (2,500 ) Net other intangible assets $ — $ — Net intangible assets $ 46,198 $ 52,871 The following table reflects estimated annual amortization expense related to intangible assets as of June 29, 2019 : As of (in thousands) June 29, 2019 Remaining fiscal 2019 $ 1,870 Fiscal 2020 7,479 Fiscal 2021 5,417 Fiscal 2022 4,439 Fiscal 2023 and onwards 26,993 Total amortization expense $ 46,198 |
CASH, CASH EQUIVALENTS, RESTRIC
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND SHORT-TERM INVESTMENTS | 9 Months Ended |
Jun. 29, 2019 | |
Cash and Cash Equivalents [Abstract] | |
CASH AND CASH EQUIVALENTS | CASH, CASH EQUIVALENTS, RESTRICTED CASH AND SHORT-TERM INVESTMENTS Cash equivalents consist of instruments with remaining maturities of three months or less at the date of purchase. In general, these investments are free of trading restrictions. Cash, cash equivalents, restricted cash and short-term investments consisted of the following as of June 29, 2019 : (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Current assets: Cash $ 261,806 $ — $ — $ 261,806 Cash equivalents: Money market funds (1) 123,726 — — 123,726 Time deposits (2) 10,006 — — 10,006 Total cash and cash equivalents $ 395,538 $ — $ — $ 395,538 Restricted Cash (2) 474 — — 474 Total cash, cash equivalents, and restricted cash $ 396,012 $ — $ — $ 396,012 Short-term investments (2) : Time deposits 149,000 — — 149,000 Deposits (3) 99,000 — — 99,000 Total short-term investments $ 248,000 $ — $ — $ 248,000 Total cash, cash equivalents, restricted cash and short-term investments $ 644,012 $ — $ — $ 644,012 (1) The fair value was determined using unadjusted prices in active, accessible markets for identical assets, and as such they were classified as Level 1 assets in the fair value hierarchy. (2) Fair value approximates cost basis. (3) Represents deposits that require a notice period of three months for withdrawal. Cash, cash equivalents, restricted cash and short-term investments consisted of the following as of September 29, 2018 : (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Current assets: Cash $ 42,446 $ — $ — $ 42,446 Cash equivalents: Money market funds (1) 209,172 — (5 ) 209,167 Time deposits (2) 69,017 — — 69,017 Total cash and cash equivalents $ 320,635 $ — $ (5 ) $ 320,630 Restricted Cash (2) 518 — — 518 Total cash, cash equivalents, and restricted cash $ 321,153 $ — $ (5 ) $ 321,148 Short-term investments (2) : Time deposits 197,000 — — 197,000 Deposits (3) 96,000 — — 96,000 Total short-term investments $ 293,000 $ — $ — $ 293,000 Total cash, cash equivalents, restricted cash and short-term investments $ 614,153 $ — $ (5 ) $ 614,148 (1) The fair value was determined using unadjusted prices in active, accessible markets for identical assets, and as such they were classified as Level 1 assets in the fair value hierarchy. (2) Fair value approximates cost basis. (3) |
EQUITY INVESTMENTS
EQUITY INVESTMENTS | 9 Months Ended |
Jun. 29, 2019 | |
Equity Method Investments [Abstract] | |
EQUITY INVESTMENTS | EQUITY INVESTMENTS Equity investments consisted of the following as of June 29, 2019 and September 29, 2018 : As of (in thousands) June 29, 2019 September 29, 2018 Non-marketable equity securities (1) $ 5,000 $ — Equity method investments 1,301 1,373 Total $ 6,301 $ 1,373 (1) On January 30, 2019, the Company made a $5.0 million investment in one of our collaborative partners, over which the Company does not have significant influence. During the three and nine months ended June 29, 2019 , there was no impairment or adjustment to the observable price. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Jun. 29, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASURMENTS | FAIR VALUE MEASUREMENTS Accounting standards establish three levels of inputs that may be used to measure fair value: quoted prices in active markets for identical assets or liabilities (referred to as Level 1), inputs other than Level 1 that are observable for the asset or liability either directly or indirectly (referred to as Level 2) and unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities (referred to as Level 3). Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis We measure certain financial assets and liabilities at fair value on a recurring basis. There were no transfers between fair value measurement levels during the three and nine months ended June 29, 2019 . Fair Value Measurements on a Nonrecurring Basis Our non-financial assets such as intangible assets and property, plant and equipment are carried at cost unless impairment is deemed to have occurred. Our equity method investments are recorded at fair value only if an impairment is recognized. Fair Value of Financial Instruments Amounts reported as accounts receivables, prepaid expenses and other current assets, accounts payable and accrued expenses approximate fair value. |
DERIVATIVES FINANCIAL INSTRUMEN
DERIVATIVES FINANCIAL INSTRUMENTS (Notes) | 9 Months Ended |
Jun. 29, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS The Company’s international operations are exposed to changes in foreign exchange rates due to transactions denominated in currencies other than U.S. dollars. Most of the Company’s revenue and cost of materials are transacted in U.S. dollars. However, a significant amount of the Company’s operating expenses are denominated in local currencies, primarily in Singapore. The foreign currency exposure of our operating expenses is generally hedged with foreign exchange forward contracts. The Company’s foreign exchange risk management programs include using foreign exchange forward contracts with cash flow hedge accounting designation to hedge exposures to the variability in the U.S. dollar equivalent of forecasted non-U.S. dollar-denominated operating expenses. These instruments generally mature within twelve months . For these derivatives, we report the after-tax gain or loss from the effective portion of the hedge as a component of accumulated other comprehensive income (loss), and we reclassify it into earnings in the same period or periods in which the hedged transaction affects earnings and in the same line item on the Consolidated Condensed Statements of Operations as the impact of the hedged transaction. The fair value of derivative instruments on our Consolidated Condensed Balance Sheet as of June 29, 2019 and September 29, 2018 was as follows: As of (in thousands) June 29, 2019 September 29, 2018 Notional Amount Fair Value Asset Derivatives (1) Notional Amount Fair Value (Liability) Derivatives (2) Derivatives designated as hedging instruments: Foreign exchange forward contracts (3) $ 34,806 $ 134 $ 43,095 $ (1,071 ) Total derivatives $ 34,806 $ 134 $ 43,095 $ (1,071 ) (1) The fair value of derivative assets is measured using level 2 fair value inputs and is included in prepaid expenses and other current assets on our Consolidated Condensed Balance Sheet. (2) The fair value of derivative liabilities is measured using level 2 fair value inputs and is included in accrued expenses and other current liabilities on our Consolidated Condensed Balance Sheet. (3) Hedged amounts expected to be recognized to income within the next twelve months . The effects of derivative instruments designated as cash flow hedges in our Consolidated Condensed Statements of Comprehensive Income for the three and nine months ended June 29, 2019 and June 30, 2018 are as follows: (in thousands) Three months ended Nine months ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Foreign exchange forward contract in cash flow hedging relationships: Net (loss)/gain recognized in OCI, net of tax (1) $ (49 ) $ (1,542 ) $ 39 $ (513 ) Net (loss)/gain reclassified from accumulated OCI into income, net of tax (2) $ (33 ) $ 344 $ (1,165 ) $ 1,884 (1) Net change in the fair value of the effective portion classified in other comprehensive income (“OCI”). (2) |
DEBT AND OTHER OBLIGATIONS DEBT
DEBT AND OTHER OBLIGATIONS DEBT AND OTHER OBLIGATIONS (Notes) | 9 Months Ended |
Jun. 29, 2019 | |
Debt Disclosure [Abstract] | |
Debt and Other Obligations | DEBT AND OTHER OBLIGATIONS Financing Obligation On December 1, 2013, Kulicke & Soffa Pte Ltd. (“Pte”), the Company's wholly owned subsidiary, signed a lease with DBS Trustee Limited as trustee of Mapletree Industrial Trust (the “Landlord”) to lease from the Landlord approximately 198,000 square feet, representing approximately 70% of a building in Singapore as our corporate headquarters, as well as a manufacturing, technology, sales and service center (the “Building”). The lease has a 10 -year non-cancellable term (the "Initial Term") and contains options to renew for 2 further 10 -year terms. The annual rent and service charge for the Initial Term range from $4 million to $5 million Singapore dollars. Pursuant to ASC No. 840, Leases ("ASC 840"), we have classified the Building on our balance sheet as property, plant and equipment, which we are depreciating over its estimated useful life of 25 years . We concluded that the term of the financing obligation is 10 years . This is equal to the non-cancellable term of our lease agreement with the Landlord. At the inception of the lease, the asset and financing obligation recorded on the balance sheet was $20.0 million , which was based on an interest rate of 6.3% over the Initial Term. As of June 29, 2019 , the financing obligation related to the Building is $15.5 million , which approximates fair value (Level 2). The financing obligation will be settled through a combination of periodic cash rental payments and the return of the leased property at the expiration of the lease. We do not report rent expense for the property, which is deemed owned for accounting purposes. Rather, rental payments required under the lease are considered debt service and applied to the deemed landlord financing obligation and interest expense. The Building and financing obligation are being amortized in a manner that will not generate a gain or loss upon lease termination. Credit Facilities and Bank Guarantees On November 22, 2013, the Company obtained a $5.0 million credit facility with Citibank in connection with the issuance of bank guarantees for operational purposes. As of June 29, 2019 , the outstanding amount is $3.2 million . On February 15, 2019, the Company entered into a Facility Letter and Overdraft Agreement (collectively, the “Facility Agreements”) with MUFG Bank, Ltd., Singapore Branch (the “Bank”). The Facility Agreements provide the Company with an overdraft facility of up to $100.0 million (the “Overdraft Facility”) for general corporate purposes. Amounts outstanding under the Overdraft Facility, including interest, are payable upon thirty days written demand by the Bank. Interest on the Overdraft Facility is calculated on a daily basis, and the applicable interest rate is calculated at the overnight U.S. Dollar LIBOR rate plus a margin of 1.5% per annum. The Overdraft Facility is an unsecured facility per the terms of the Facility Agreements. The Facility Agreements contain customary non-financial covenants, including, without limitation, covenants that restrict the Company’s ability to sell or dispose of its assets, cease owning at least 51% of one of its subsidiaries (the "Subsidiary"), or encumber its assets with material security interests (including any pledge of monies in the Subsidiary’s cash deposit account with the Bank). The Facility Agreements also contain typical events of default, including, without limitation, non-payment of financial obligations when due, cross defaults to other material indebtedness of the Company or any breach of a representation or warranty under the Facility Agreements. As of June 29, 2019 , the outstanding amount under the Facility Agreements is $71.2 million . In addition, the Company has other bank guarantees for operational purposes which are secured with corresponding deposits placed with the issuer banks. These amounts are shown as restricted cash in the Consolidated Condensed Balance Sheets. |
SHAREHOLDERS' EQUITY AND EMPLOY
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS | 9 Months Ended |
Jun. 29, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHAREHOLDERS’ EQUITY AND EMPLOYEE BENEFIT PLANS | SHAREHOLDERS’ EQUITY AND EMPLOYEE BENEFIT PLANS Common Stock and 401(k) Retirement Plan The Company has a 401(k) retirement plan (the “Plan”) for eligible U.S. employees. The Plan allows for employee contributions and matching Company contributions from 4% to 6% based upon terms and conditions of the 401(k) Plan. The following table reflects the Company’s contributions to the Plan during the three and nine months ended June 29, 2019 and June 30, 2018 : Three months ended Nine months ended (in thousands) June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Cash $ 428 $ 408 $ 1,291 $ 1,261 Stock Repurchase Program On August 15, 2017, the Company’s Board of Directors authorized a program (the "Program") to repurchase up to $100 million of the Company’s common stock on or before August 1, 2020. On July 10, 2018, the Board of Directors increased the share repurchase authorization under the Program to $200 million . On January 31, 2019, the Board of Directors further increased the share repurchase under the Program to $300 million . The Company has entered into a written trading plan under Rule 10b5-1 of the Exchange Act to facilitate repurchases under the Program. The Program may be suspended or discontinued at any time and is funded using the Company's available cash, cash equivalents and short-term investments. Under the Program, shares may be repurchased through open market and/or privately negotiated transactions at prices deemed appropriate by management. The timing and amount of repurchase transactions under the Program depend on market conditions as well as corporate and regulatory considerations. During the three and nine months ended June 29, 2019 , the Company repurchased a total of 1.5 million and 4.0 million shares of common stock under the Program at a cost of $33.2 million and $85.6 million , respectively. The stock repurchases were recorded in the periods they were delivered and accounted for as treasury stock in the Company's Consolidated Condensed Balance Sheet. The Company records treasury stock purchases under the cost method using the first-in, first-out (FIFO) method. Upon reissuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid-in capital. If the Company reissues treasury stock at an amount below its acquisition cost and additional paid-in capital associated with prior treasury stock transactions is insufficient to cover the difference between acquisition cost and the reissue price, this difference is recorded against retained earnings. As of June 29, 2019 , our remaining stock repurchase authorization under the Program was approximately $112.1 million . Dividends On May 20, 2019, February 28, 2019 and December 12, 2018, the Board of Directors declared a quarterly dividend of $0.12 per share of common stock. Dividends paid during the three and nine months ended June 29, 2019 totaled $7.8 million and $23.9 million , respectively. The declaration of any future cash dividend is at the discretion of the Board of Directors and will depend on the Company's financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination that such dividends are in the best interests of the Company's stockholders. Accumulated Other Comprehensive Income The following table reflects accumulated other comprehensive loss reflected on the Consolidated Condensed Balance Sheets as of June 29, 2019 and September 29, 2018 : As of (in thousands) June 29, 2019 September 29, 2018 Loss from foreign currency translation adjustments $ (2,641 ) $ (1,211 ) Unrecognized actuarial loss on pension plan, net of tax (1,629 ) (1,620 ) Unrealized gain/(loss) on hedging 134 (1,071 ) Accumulated other comprehensive loss $ (4,136 ) $ (3,902 ) Equity-Based Compensation The Company has stockholder-approved equity-based employee compensation plans (the “Employee Plans”) and director compensation plans (the “Director Plans”) (collectively, the “Equity Plans”). As of June 29, 2019 , 4.0 million shares of common stock are available for grant to its employees and directors under the 2017 Equity Plan, including previously registered shares that have been carried forward for issuance from the 2009 Equity Plan. • In general, stock options and Time-based Restricted Share Units ("Time-based RSUs") awarded to employees vest annually over a three-year period provided the employee remains employed by the Company. The Company follows the non-substantive vesting method for stock options and recognizes compensation expense immediately for awards granted to retirement eligible employees, or over the period from the grant date to the date retirement eligibility is achieved. • Relative TSR Performance Share Units ("Relative TSR PSUs") entitles the employee to receive common shares of the Company on the award vesting date, if market performance objectives that measure relative total shareholder return (“TSR”) are attained. Relative TSR is calculated based upon the 90 -calendar day average price of the Company's stock as compared to specific peer companies that comprise the GICS (45301020) Semiconductor Index. TSR is measured for the Company and each peer company over a performance period, which is generally three years . Vesting percentages range from 0% to 200% of awards granted. The provisions of the Relative TSR PSUs are reflected in the grant date fair value of the award; therefore, compensation expense is recognized regardless of whether the market condition is ultimately satisfied. Compensation expense is reversed if the award is forfeited prior to the vesting date. • Special/Growth Performance Share Units (“Special/Growth PSUs”) entitles the employee to receive common shares of the Company on the three-year anniversary of the grant date (if employed by the Company) if revenue growth targets set by the Management Development and Compensation Committee (“MDCC”) of the Board of Directors on the date of grant are met. If revenue growth targets are not met, the Special/Growth PSUs do not vest. Certain Special/Growth PSUs vest based on achievement of strategic goals over a certain time period or periods set by the MDCC. If the strategic goals are not achieved, the Special/Growth PSUs do not vest. Equity-based compensation expense recognized in the Consolidated Condensed Statements of Operations for the three and nine months ended June 29, 2019 and June 30, 2018 was based upon awards ultimately expected to vest, forfeitures have been accounted for when they occur. The following table reflects Time-based RSUs, Relative TSR PSUs, Special/Growth PSUs and common stock granted during the three and nine months ended June 29, 2019 and June 30, 2018 : Three months ended Nine months ended (shares in thousands) June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Time-based RSUs 2 3 521 452 Relative TSR PSUs 1 1 166 154 Special/Growth PSUs 1 — 56 59 Common stock 10 8 28 25 Equity-based compensation in shares 14 12 771 690 The following table reflects total equity-based compensation expense, which includes Time-based RSUs, Relative TSR PSUs, Special/Growth PSUs and common stock, included in the Consolidated Condensed Statements of Operations during the three and nine months ended June 29, 2019 and June 30, 2018 : Three months ended Nine months ended (in thousands) June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Cost of sales $ 161 $ 126 $ 471 $ 384 Selling, general and administrative 2,616 2,111 7,871 5,877 Research and development 820 656 2,430 1,963 Total equity-based compensation expense $ 3,597 $ 2,893 $ 10,772 $ 8,224 The following table reflects equity-based compensation expense, by type of award, for the three and nine months ended June 29, 2019 and June 30, 2018 : Three months ended Nine months ended (in thousands) June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Time-based RSUs $ 2,182 $ 1,662 $ 6,455 $ 5,475 Relative TSR PSUs 1,020 935 3,213 1,910 Special/Growth PSUs 173 101 492 254 Common stock 222 195 612 585 Total equity-based compensation expense $ 3,597 $ 2,893 $ 10,772 $ 8,224 |
REVENUE AND CONTRACT LIABILITIE
REVENUE AND CONTRACT LIABILITIES | 9 Months Ended |
Jun. 29, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE AND CONTRACT LIABILITIES | REVENUE AND CONTRACT LIABILITIES The Company recognizes revenue when we satisfy performance obligations as evidenced by the transfer of control of our products or services to customers. In general, the Company generates revenue from product sales, either directly to customers or to distributors. In determining whether a contract exists, we evaluate the terms of the agreement, the relationship with the customer or distributor and their ability to pay. Service revenue is generally recognized over time as the services are performed. For the three and nine months ended June 29, 2019 , and June 30, 2018 , the service revenue is not material. Please refer to Note 1: Basis of Presentation- Revenue Recognition , for disclosure on the Company's revenue recognition. The Company disaggregates revenue based on our reportable segments. The Company believes that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Please refer to Note 13: Segment information, for disclosure of disaggregated revenue. Contract Liabilities Our contract liabilities are primarily related to advance payments received from customers to secure product in future periods where we have received amounts in advance of satisfying performance obligations and are reported in the accompanying consolidated condensed balance sheets within accrued expenses and other current liabilities. Contract liabilities increase as a result of receiving new advance payments from customers and decrease as revenue is recognized from customers purchasing product under advance payment arrangements upon meeting the performance obligations. The following table shows the changes in contract liability balances during the three and nine months ended June 29, 2019 : Three months ended Nine months ended (in thousands) June 29, 2019 June 29, 2019 Contract liabilities, beginning of period $ 581 $ 997 Revenue recognized (1,392 ) (6,909 ) Additions 1,806 6,907 Contract liabilities, end of period $ 995 $ 995 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Jun. 29, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic income per share is calculated using the weighted average number of shares of common stock outstanding during the period. Stock options and restricted stock are included in the calculation of diluted earnings per share, except when their effect would be anti-dilutive. The following tables reflect a reconciliation of the shares used in the basic and diluted net income per share computation for the three and nine months ended June 29, 2019 and June 30, 2018 : Three months ended (in thousands, except per share data) June 29, 2019 June 30, 2018 Basic Diluted Basic Diluted NUMERATOR: Net income $ 1,287 $ 1,287 $ 60,256 $ 60,256 DENOMINATOR: Weighted average shares outstanding - Basic 64,683 64,683 69,125 69,125 Dilutive effect of Equity Plans 748 1,177 Weighted average shares outstanding - Diluted 65,431 70,302 EPS: Net income per share - Basic $ 0.02 $ 0.02 $ 0.87 $ 0.87 Effect of dilutive shares — (0.01 ) Net income per share - Diluted $ 0.02 $ 0.86 Nine months ended (in thousands, except per share data) June 29, 2019 June 30, 2018 Basic Diluted Basic Diluted NUMERATOR: Net income $ 5,249 $ 5,249 $ 27,041 $ 27,041 DENOMINATOR: Weighted average shares outstanding - Basic 65,914 65,914 70,019 70,019 Dilutive effect of Equity Plans 683 1,094 Weighted average shares outstanding - Diluted 66,597 71,113 EPS: Net income per share - Basic $ 0.08 $ 0.08 $ 0.39 $ 0.39 Effect of dilutive shares — (0.01 ) Net income per share - Diluted $ 0.08 $ 0.38 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Jun. 29, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The following table reflects the provision for income taxes and the effective tax rate for the three and nine months ended June 29, 2019 and June 30, 2018 : Three months ended Nine months ended (dollar amounts in thousands) June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Income tax expense $ 3,864 $ 7,282 $ 19,106 $ 122,494 Effective tax rate 75.0 % 10.8 % 78.2 % 81.9 % For the nine months ended June 29, 2019 , the effective income tax rate differed from the federal statutory tax rate primarily due to tax expense related to adjustments to the one-time transition tax, valuation allowances recorded against certain tax credits and loss carryforwards, foreign withholding taxes, and tax liabilities from foreign operations, partially offset by tax benefits from profits generated in foreign operations subject to a lower statutory tax rate than the federal rate, tax credits, and the impact of tax holidays. For the nine months ended June 30, 2018 , the effective income tax rate differed from the federal statutory tax rate primarily due to tax expense related to the enactment of the Tax Cuts and Jobs Act of 2017 (the "Act"), valuation allowances recorded against certain tax loss carryforwards, foreign withholding taxes, and tax liabilities from foreign operations, partially offset by tax benefits from profits generated in foreign operations subject to a lower statutory tax rate than the federal rate, tax credits, and the impact of tax holidays. The decrease in tax expense for the three months ended June 29, 2019 of $3.9 million from the tax expense for the three months ended June 30, 2018 of $7.3 million was primarily related to a decrease in profits in fiscal 2019. The decrease in tax expense for the nine months ended June 29, 2019 of $19.1 million from the tax expense for the nine months ended June 30, 2018 of $ 122.5 million was primarily related to the enactment of the Act in fiscal 2018 and a decrease in profits in fiscal 2019, partially offset by $10.2 million of tax expense related to adjustments to the one-time transition tax. The Company's future effective tax rate would be affected by the decrease in earnings in countries where it has lower statutory rates or increase in earnings in countries where it has higher statutory rates, by changes in the valuation of its deferred tax assets and liabilities, or by changes in tax laws, regulations, accounting principles, or interpretations thereof. As of June 29, 2019 , the Company’s undistributed foreign earnings are no longer deemed to be indefinitely reinvested outside the U.S. The Company recorded $0.7 million of tax expense in the second quarter of fiscal 2019 as part of the initial change in assertion. It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain unrecognized tax positions will increase or decrease during the next 12 months due to the expected lapse of statutes of limitation and / or settlements of tax examinations. The Company is under income tax examination by tax authorities in certain foreign jurisdictions. In accordance with Staff Accounting Bulletin No. 118 ("SAB 118"), the accounting for the tax effects for the Act was completed in the first quarter of fiscal 2019. In addition, the Company has made an accounting policy election to record tax effects of its global intangible low-taxed income as a period cost in the period the tax is incurred. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Jun. 29, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Reportable segments are defined as components of an enterprise that engage in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and to assess performance. The Company's Chief Executive Officer is the Company's chief operating decision maker. The chief operating decision maker does not review discrete asset information. The Company operates two reportable segments consisting of: (i) Capital Equipment; and (ii) Aftermarket Products and Services ("APS"). The following table reflects operating information by segment for the three and nine months ended June 29, 2019 and June 30, 2018 : Three months ended Nine months ended (in thousands) June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Net revenue: Capital Equipment $ 89,860 $ 229,462 $ 286,364 $ 578,197 APS 37,249 39,372 113,861 126,100 Net revenue 127,109 268,834 400,225 704,297 (Loss)/income from operations: Capital Equipment (6,449 ) 57,771 (10,563 ) 116,615 APS 8,276 6,692 24,480 25,443 Income from operations $ 1,827 $ 64,463 $ 13,917 $ 142,058 The following tables reflect capital expenditures, depreciation expense and amortization expense for the three and nine months ended June 29, 2019 and June 30, 2018 . Three months ended Nine months ended (in thousands) June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Capital expenditures: Capital Equipment $ 646 $ 999 $ 4,118 $ 4,878 APS 1,490 3,072 5,194 11,603 $ 2,136 $ 4,071 $ 9,312 $ 16,481 Three months ended Nine months ended (in thousands) June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Depreciation expense: Capital Equipment $ 1,800 $ 1,926 $ 5,540 $ 5,601 APS 1,352 1,063 3,872 2,635 $ 3,152 $ 2,989 $ 9,412 $ 8,236 Amortization expense: Capital Equipment $ 989 $ 1,053 $ 2,999 $ 3,188 APS 854 909 2,590 2,739 $ 1,843 $ 1,962 $ 5,589 $ 5,927 |
COMMITMENTS, CONTINGENCIES AND
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Notes) | 9 Months Ended |
Jun. 29, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS | COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS Warranty Expense The Company's equipment is generally shipped with a one -year warranty against manufacturing defects. The Company establishes reserves for estimated warranty expense when revenue for the related equipment is recognized. The reserve for estimated warranty expense is based upon historical experience and management's estimate of future warranty costs, including product part replacement, freight charges and labor costs incurred in correcting product failures during the warranty period. The following table reflects the reserve for warranty activity for the three and nine months ended June 29, 2019 and June 30, 2018 : Three months ended Nine months ended (in thousands) June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Reserve for warranty, beginning of period $ 13,885 $ 14,197 $ 14,475 $ 13,796 Provision for warranty 3,143 3,204 8,874 9,384 Utilization of reserve (3,073 ) (3,027 ) (9,394 ) (8,806 ) Reserve for warranty, end of period $ 13,955 $ 14,374 $ 13,955 $ 14,374 Other Commitments and Contingencies The following table reflects obligations not reflected on the Consolidated Condensed Balance Sheet as of June 29, 2019 : Payments due by fiscal year (in thousands) Total 2019 2020 2021 2022 thereafter Inventory purchase obligation (1) $ 85,829 $ 85,829 $ — $ — $ — $ — Operating lease obligations (2) 17,534 1,051 4,215 2,672 2,156 7,440 Total $ 103,363 $ 86,880 $ 4,215 $ 2,672 $ 2,156 $ 7,440 (1) The Company orders inventory components in the normal course of its business. A portion of these orders are non-cancellable, however, some orders impose varying penalties and charges in the event of cancellation. (2) The Company has minimum rental commitments under various leases (excluding taxes, insurance, maintenance and repairs, which are also paid by the Company) primarily for various facility and equipment leases, which expire periodically through 2027 (not including lease extension options, if applicable). Pursuant to ASC No. 840, Leases, for lessee's involvement in asset construction, the Company was considered the owner of the Building during the construction phase. The Building was completed on December 1, 2013 and Pte signed an agreement with the Landlord to lease from the Landlord approximately 198,000 square feet, representing approximately 70% of the Building. Following the completion of construction, we performed a sale-leaseback analysis pursuant to ASC 840-40 and determined that because of our continuing involvement, ASC 840-40 precluded us from derecognizing the asset and associated financing obligation. As such, we reclassified the asset from construction in progress to property, plant and equipment and began to depreciate the building over its estimated useful life of 25 years. We concluded that the term of the financing obligation is 10 years . This is equal to the non-cancellable term of our lease agreement with the Landlord. As of June 29, 2019 , we recorded a financing obligation related to the Building of $15.5 million (see Note 8 above). The financing obligation is not reflected in the table above. Concentrations The following table reflects significant customer concentrations as a percentage of net revenue for the nine months ended June 29, 2019 and June 30, 2018 . Nine months ended June 29, 2019 June 30, 2018 Micron Technology, Inc 10.9 % * Haoseng Industrial Company Limited (1) * 12.8 % * Represented less than 10% of total net revenue The following table reflects significant customer concentrations as a percentage of total accounts receivable as of June 29, 2019 and June 30, 2018 : As of June 29, 2019 June 30, 2018 Super Power International (1) 15.8 % 13.0 % Forehope Electronic (Ningbo) Co Ltd 14.4 % * Micron Technology, Inc 10.2 % * Haoseng Industrial Company Limited (1) * 27.6 % (1) Distributor of the Company's products. * Represented less than 10% of total accounts receivable |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Jun. 29, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS On July 29, 2019, the Company entered into foreign exchange forward contracts with notional amount of $13.6 million . The Company entered into these foreign exchange forward contracts to hedge a portion of our forecasted foreign currency-denominated expenses in the normal course of business and, accordingly, they are not speculative in nature. These foreign exchange forward contracts have maturities of up to twelve months . |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Jun. 29, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation | These consolidated condensed financial statements include the accounts of Kulicke and Soffa Industries, Inc. and its subsidiaries (the “Company”), with appropriate elimination of intercompany balances and transactions. The interim consolidated condensed financial statements are unaudited and, in management's opinion, include all adjustments (consisting only of normal and recurring adjustments) necessary for a fair statement of results for these interim periods. The interim consolidated condensed financial statements do not include all of the information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended September 29, 2018, filed with the Securities and Exchange Commission, which includes Consolidated Balance Sheets as of September 29, 2018 and September 30, 2017, and the related Consolidated Statements of Operations, Statements of Other Comprehensive Income, Changes in Shareholders' Equity and Cash Flows for each of the years in the three-year period ended September 29, 2018. The results of operations for any interim period are not necessarily indicative of the results of operations for any other interim period or for a full year. |
Fiscal Year | Fiscal Year |
Nature of Business | Nature of Business The Company designs, manufactures and sells capital equipment and tools as well as services, maintains, repairs and upgrades equipment, all used to assemble semiconductor devices. The Company's operating results depend upon the capital and operating expenditures of semiconductor device manufacturers, integrated device manufacturers, outsourced semiconductor assembly and test providers (“OSATs”), and other electronics manufacturers including automotive electronics suppliers, worldwide which, in turn, depend on the current and anticipated market demand for semiconductors and products utilizing semiconductors. The semiconductor industry is highly volatile and experiences downturns and slowdowns which can have a severe negative effect on the semiconductor industry's demand for semiconductor capital equipment, including assembly equipment manufactured and sold by the Company and, to a lesser extent, tools, including those sold by the Company. These downturns and slowdowns have in the past adversely affected the Company's operating results. The Company believes such volatility will continue to characterize the industry and the Company's operations in the future. |
Use of Estimates | Use of Estimates The preparation of consolidated condensed financial statements requires management to make assumptions, estimates and judgments that affect the reported amounts of assets and liabilities, net revenue and expenses during the reporting periods, and disclosures of contingent assets and liabilities as of the date of the consolidated condensed financial statements. On an ongoing basis, management evaluates estimates, including but not limited to, those related to accounts receivable, reserves for excess and obsolete inventory, carrying value and lives of fixed assets, goodwill and intangible assets, the valuation estimates and assessment of impairment and observable price adjustments, valuation allowances for deferred tax assets and deferred tax liabilities, repatriation of un-remitted foreign subsidiary earnings, equity-based compensation expense, and warranties. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable. As a result, management makes judgments regarding the carrying values of the Company's assets and liabilities that are not readily apparent from other sources. Authoritative pronouncements, historical experience and assumptions also are used as the basis for making estimates, and on an ongoing basis, management evaluates these estimates. Actual results may differ from these estimates. |
Vulnerability to Certain Concentrations | Vulnerability to Certain Concentrations Financial instruments which may subject the Company to concentrations of credit risk as of June 29, 2019 and September 29, 2018 consisted primarily of trade receivables. The Company manages credit risk associated with investments by investing its excess cash in highly rated debt instruments of the U.S. Government and its agencies, financial institutions, and corporations. The Company has established investment guidelines relative to diversification and maturities designed to maintain safety and liquidity. These guidelines are periodically reviewed and modified as appropriate. The Company does not have any exposure to sub-prime financial instruments or auction rate securities. The Company's trade receivables result primarily from the sale of semiconductor equipment, related accessories and replacement parts, and tools to a relatively small number of large manufacturers in a highly concentrated industry. Write-offs of uncollectible accounts have historically not been significant. The Company actively monitors its customers' financial strength to reduce the risk of loss. The Company's products are complex and require raw materials, components and subassemblies having a high degree of reliability, accuracy and performance. The Company relies on subcontractors to manufacture many of these components and subassemblies and it relies on sole source suppliers for some important components and raw material inventory. |
Foreign Currency Translation | Foreign Currency Translation and Remeasurement The majority of the Company's business is transacted in U.S. dollars; however, the functional currencies of some of the Company's subsidiaries are their local currencies. In accordance with ASC No. 830, Foreign Currency Matters (“ASC 830”), for a subsidiary of the Company that has a functional currency other than the U.S. dollar, gains and losses resulting from the translation of the functional currency into U.S. dollars for financial statement presentation are not included in determining net income, but are accumulated in the cumulative translation adjustment account as a separate component of shareholders' equity (accumulated other comprehensive income / (loss)). Under ASC 830, cumulative translation adjustments are not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries. Gains and losses resulting from foreign currency transactions are included in the determination of net income. The Company's operations are exposed to changes in foreign currency exchange rates due to transactions denominated in currencies other than the location's functional currency. The Company is also exposed to foreign currency fluctuations that impact the remeasurement of net monetary assets of those operations whose functional currency, the U.S. dollar, differs from their respective local currencies, most notably in Israel, Singapore and Switzerland. In addition to net monetary remeasurement, the Company has exposures related to the translation of subsidiary financial statements from their functional currency, the local currency, into its reporting currency, the U.S. dollar, most notably in the Netherlands, China, Taiwan, Japan and Germany. The Company's U.S. operations also have foreign currency exposure due to net monetary assets denominated in currencies other than the U.S. dollar. |
Derivative Financial Instruments | Derivative Financial Instruments The Company’s primary objective for holding derivative financial instruments is to manage the fluctuation in foreign exchange rates and accordingly is not speculative in nature. The Company’s international operations are exposed to changes in foreign exchange rates as described above. The Company has established a program to monitor the forecasted transaction currency risk to protect against foreign exchange rate volatility. Generally, the Company uses foreign exchange forward contracts in these hedging programs. These instruments, which have maturities of up to twelve months, are recorded at fair value and are included in prepaid expenses and other current assets, or accrued expenses and other current liabilities. Our accounting policy for derivative financial instruments is based on whether they meet the criteria for designation as a cash flow hedge. A designated hedge with exposure to variability in the functional currency equivalent of the future foreign currency cash flows of a forecasted transaction is referred to as a cash flow hedge. The criteria for designating a derivative as a cash flow hedge include the assessment of the instrument’s effectiveness in risk reduction, matching of the derivative instrument to its underlying transaction, and the assessment of the probability that the underlying transaction will occur. For derivatives with cash flow hedge accounting designation, we report the after-tax gain / (loss) from the effective portion of the hedge as a component of accumulated other comprehensive income / (loss) and reclassify it into earnings in the same period in which the hedged transaction affects earnings and in the same line item on the Consolidated Condensed Statement of Operations as the impact of the hedged transaction. Derivatives that we designate as cash flow hedges are classified in the Consolidated Condensed Statement of Cash Flows in the same section as the underlying item, primarily within cash flows from operating activities. The hedge effectiveness of these derivative instruments is evaluated by comparing the cumulative change in the fair value of the hedge contract with the cumulative change in the fair value of the forecasted cash flows of the hedged item. If a cash flow hedge is discontinued because it is no longer probable that the original hedged transaction will occur as previously anticipated, the cumulative unrealized gain or loss on the related derivative is reclassified from accumulated other comprehensive income / (loss) into earnings. Subsequent gain / (loss) on the related derivative instrument is recognized into earnings in each period until the instrument matures, is terminated, is re-designated as a qualified cash flow hedge, or is sold. Ineffective portions of cash flow hedges, as well as amounts excluded from the assessment of effectiveness, are recognized in earnings. |
Cash Equivalents | Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. Cash equivalents are measured at fair value based on level one measurement, or quoted market prices, as defined by ASC No. 820, Fair Value Measurements and Disclosures . |
Investments | Equity Investments The Company invests in equity securities in companies to promote business and strategic objectives. Equity investments are measured and recorded as follows: • Equity method investments are equity securities in investees that provide the Company with the ability to exercise significant influence in which it lacks a controlling financial interest. Our proportionate share of the income or loss is recognized on a one-quarter lag and is recorded as share of results of equity-method investee, net of tax. • |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company maintains allowances for doubtful accounts for estimated losses resulting from its customers' failure to make required payments. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. If global or regional economic conditions deteriorate or political conditions were to change in some of the countries where the Company does business, it could have a significant impact on the results of operations, and the Company's ability to realize the full value of its accounts receivable. |
Inventories | Inventories Inventories are stated at the lower of cost (on a first-in first-out basis) or net realizable value. The Company generally provides reserves for obsolete inventory and for inventory considered to be in excess of demand. Demand is generally defined as 18 months forecasted future consumption for equipment, 24 months forecasted future consumption for spare parts, and 12 months forecasted future consumption for tools. Forecasted consumption is based upon internal projections, historical sales volumes, customer order activity and a review of consumable inventory levels at customers' facilities. The Company communicates forecasts of its future consumption to its suppliers and adjusts commitments to those suppliers accordingly. If required, the Company reserves the difference between the carrying value of its inventory and the lower of cost or net realizable value, based upon projections about future consumption, and market conditions. If actual market conditions are less favorable than projections, additional inventory reserves may be required. Inventory reserve provision for certain subsidiaries is determined based on management's estimate of future consumption for equipment and spare parts. This estimate is based on historical sales volumes, internal projections and market developments and trends. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are carried at cost. The cost of additions and those improvements which increase the capacity or lengthen the useful lives of assets are capitalized, while repair and maintenance costs are expensed as incurred. Depreciation and amortization are provided on a straight-line basis over the estimated useful lives as follows: buildings 25 years ; machinery, equipment, furniture and fittings 3 to 10 years ; toolings 1 year; and leasehold improvements are based on the shorter of the life of lease or life of asset . Purchased computer software costs related to business and financial systems are amortized over a five-year period on a straight-line basis. Land is not depreciated. |
Valuation of Long-Lived Assets | Valuation of Long-Lived Assets In accordance with ASC No. 360, Property, Plant & Equipment ("ASC 360"), the Company's property, plant and equipment is tested for impairment based on undiscounted cash flows when triggering events occur, and if impaired, written-down to fair value based on either discounted cash flows or appraised values. ASC 360 also provides a single accounting model for long-lived assets to be disposed of by sale and establishes additional criteria that would have to be met to classify an asset as held for sale. The carrying amount of an asset or asset group is not recoverable to the extent it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group. Estimates of future cash flows used to test the recoverability of a long-lived asset or asset group must incorporate the entity's own assumptions about its use of the asset or asset group and must factor in all available evidence. ASC 360 requires that long-lived assets be tested for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Such events include significant under-performance relative to historical internal forecasts or projected future operating results; significant changes in the manner of use of the assets; significant negative industry or economic trends; or significant changes in market capitalization. During the three and nine months ended June 29, 2019 |
Accounting for Impairment of Goodwill | Accounting for Impairment of Goodwill ASC No. 350, Intangibles-Goodwill and Other ("ASC 350") requires goodwill and other intangible assets with indefinite lives to be reviewed for impairment annually, or more frequently if circumstances indicate a possible impairment. We assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If, after assessing the qualitative factors, a company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying value, then performing the two-step impairment test is unnecessary. However, if a company concludes otherwise, then it is required to perform the first step of the two-step goodwill impairment test. If the carrying value of a reporting unit exceeds its fair value in the first step of the test, then a company is required to perform the second step of the goodwill impairment test to measure the amount of the reporting unit's goodwill impairment loss, if any. In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which eliminates the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment. Under this guidance, the goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount, and recognizing an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value, although it cannot exceed the total amount of goodwill allocated to that reporting unit. This ASU will be effective for us beginning in our first quarter of 2021 and early adoption is permitted. During the third quarter of 2017, we elected to prospectively adopt ASU2017-04. This eliminates the requirement to perform step 2 of the goodwill impairment test. As part of the annual evaluation, the Company performs an impairment test of its goodwill in the fourth quarter of each fiscal year to coincide with the completion of its annual forecasting and refreshing of its business outlook processes. On an ongoing basis, the Company monitors if a “triggering” event has occurred that may have the effect of reducing the fair value of a reporting unit below its respective carrying value. Adverse changes in expected operating results and/or unfavorable changes in other economic factors used to estimate fair values could result in a non-cash impairment charge in the future. Impairment assessments inherently involve judgment as to the assumptions made about the expected future cash flows and the impact of market conditions on those assumptions. Future events and changing market conditions may impact the assumptions as to prices, costs, growth rates or other factors that may result in changes in the estimates of future cash flows. Although the Company believes the assumptions that it has used in testing for impairment are reasonable, significant changes in any one of the assumptions could produce a significantly different result. Indicators of potential impairment may lead the Company to perform interim goodwill impairment assessments, including significant and unforeseen customer losses, a significant adverse change in legal factors or in the business climate, a significant adverse action or assessment by a regulator, a significant stock price decline or unanticipated competition. For further information on goodwill and other intangible assets, see Note 3 below. |
Revenue Recognition | Revenue Recognition In accordance with ASC No. 606, Revenue from Contracts with Customers , the Company recognizes revenue when we satisfy performance obligations as evidenced by the transfer of control of our products or services to customers. In general, the Company generates revenue from product sales, either directly to customers or to distributors. In determining whether a contract exists, we evaluate the terms of the agreement, the relationship with the customer or distributor and their ability to pay. The Company recognizes revenue from sales of our products, including sales to our distributors, at a point in time, generally upon shipment or delivery to the customer or distributor, depending upon the terms of the sales order. Control is considered transferred when title and risk of loss pass, when the customer becomes obligated to pay and, where applicable, when the customer has accepted the products or upon expiration of the acceptance period. For sales to distributors, payment is due on our standard commercial terms and is not contingent upon resale of the products. Our business is subject to contingencies related to customer orders, including: • Right of Return: A large portion of our revenue comes from the sale of equipments used in the semiconductor assembly process. Other product sales relate to consumable products, which are sold in high-volume quantities, and are generally maintained at low stock levels at our customer's facility. Customer returns have historically represented a very small percentage of customer sales on an annual basis. • Warranties: Our equipment is generally shipped with a one-year warranty against manufacturing defects. We establish reserves for estimated warranty expense when revenue for the related equipment is recognized. The reserve for estimated warranty expense is based upon historical experience and management's estimate of future expenses, including product parts replacement, freight charges and labor costs expected to be incurred to correct product failures during the warranty period. • Conditions of Acceptance: Sales of our consumable products generally do not have customer acceptance terms. In certain cases, sales of our equipment have customer acceptance clauses which may require the equipment to perform in accordance with customer specifications or when installed at the customer's facility. In such cases, if the terms of acceptance are satisfied at our facility prior to shipment, the revenue for the equipment will be recognized upon shipment. If the terms of acceptance are satisfied at our customers' facilities, the revenue for the equipment will not be recognized until acceptance, which is typically obtained after installation and testing, is received from the customer. Service revenue is generally recognized over time as the services are performed. For the three and nine months ended June 29, 2019 , and June 30, 2018 , the service revenue is not material. The Company measures revenue based on the amount of consideration we expect to be entitled to in exchange for products or services. Any variable consideration such as sales incentives are recognized as a reduction of net revenue at the time of revenue recognition. The length of time between invoicing and payment is not significant under any of our payment terms. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. Shipping and handling costs billed to customers are recognized in net revenue. Shipping and handling costs paid by the Company are included in cost of sales. |
Research and Development | Research and Development The Company charges research and development costs associated with the development of new products to expense when incurred. In certain circumstances, pre-production machines that the Company intends to sell are carried as inventory until sold. |
Income Taxes | Income Taxes In accordance with ASC No. 740, Income Taxes , deferred income taxes are determined using the balance sheet method . The Company records a valuation allowance to reduce its deferred tax assets to the amount it expects is more likely than not to be realized. While the Company has considered future taxable income and its ongoing tax planning strategies in assessing the need for the valuation allowance, if it were to determine that it would be able to realize its deferred tax assets in the future in excess of its net recorded amount, an adjustment to the deferred tax asset would increase income in the period when such determination is made. Likewise, should the Company determine it would not be able to realize all or part of its net deferred tax assets in the future, an adjustment to the deferred tax asset would decrease income in the period when such determination is made. In accordance with ASC No. 740 Topic 10, Income Taxes, General (“ASC 740.10”), the Company accounts for uncertain tax positions taken or expected to be taken in its income tax return. Under ASC 740.10, the Company utilizes a two-step approach for evaluating uncertain tax positions. Step one, or recognition, requires a company to determine if the weight of available evidence indicates a tax position is more likely than not to be sustained upon examination solely based on its technical merit. Step two, or measurement, is based on the largest amount of benefit, which is more likely than not to be realized on settlement with the taxing authority, including resolution of related appeals or litigation processes, if any. |
Equity-Based Compensation | Equity-Based Compensation The Company accounts for equity-based compensation under the provisions of ASC No. 718, Compensation - Stock Compensation (“ASC 718”). ASC 718 requires the recognition of the fair value of the equity-based compensation in net income. Compensation expense associated with Relative TSR Performance Share Units is determined using a Monte-Carlo valuation model, and compensation expense associated with time-based and Special/Growth Performance Share Units is determined based on the number of shares granted and the fair value on the date of grant. See Note 9 for a summary of the terms of these performance-based awards. The fair value of the Company's stock option awards is estimated using a Black-Scholes option valuation model. The fair value of equity-based awards is amortized over the vesting period of the award and the Company elected to use the straight-line method for awards granted after the adoption of ASC 718. |
Earnings per Share | Earnings per Share Earnings per share (“EPS”) are calculated in accordance with ASC No. 260, Earnings per Share . Basic EPS include only the weighted average number of common shares outstanding during the period. Diluted EPS include the weighted average number of common shares and the dilutive effect of stock options, restricted stock awards, performance share units and restricted share units outstanding during the period, when such instruments are dilutive. |
Business Combinations | Accounting for Business Acquisitions The Company accounts for business acquisitions in accordance with ASC No. 805, Business Combinations |
Costs Associated with Exit or Disposal Activities or Restructurings | Restructuring charges Restructuring charges may consist of voluntary or involuntary severance-related charges, asset-related charges and other costs due to exit activities. We recognize voluntary termination benefits when an employee accepts the offered benefit arrangement. We recognize involuntary severance-related charges depending on whether the termination benefits are provided under an ongoing benefit arrangement or under a one-time benefit arrangement. If the former, we recognize the charges once they are probable and the amounts are estimable. If the latter, we recognize the charges once the benefits have been communicated to employees. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Income Taxes In October 2016, the FASB issued ASU 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory. The new guidance is effective for the Company beginning fiscal 2019 and requires the tax effects of intercompany transactions (other than transfers of inventory) to be recognized currently. The Company has adopted the modified retrospective approach for the transition based on the new guidance and, as of the beginning of the period of adoption, has recorded the cumulative effect of adjustments related to intra-entity transfers of intangible and fixed assets of $0.5 million in prior years as an increase to retained earnings. Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under current GAAP. Subsequently in July 2018, the FASB issued ASU 2018-11 -Leases (Topic 842): Targeted Improvements, provides additional information concerning the new leases standard in ASU 2016-02, Leases (Topic 842). The targeted improvements provide entities with additional and optional transition methods. In November 2018, the FASB issued ASU 2018-20 – Leases (Topic 842): Narrow-Scope Improvements for Lessors. This ASU provides guidance in several areas, including the accounting policy election for sales taxes and other similar taxes collected from lessees, accounting for certain lessor costs and accounting for variable payments for contracts with lease and nonlease components. The Company will adopt these ASUs utilizing the modified retrospective transition method through a cumulative-effect adjustment at the beginning of its first quarter of 2020. In addition, we will elect the package of practical expedients permitted under the transition guidance that allowed us to apply prior conclusions related to lease definition, classification and initial direct costs. The adoption of these ASUs will result in an increase in our consolidated balance sheets for these right of use assets and corresponding liabilities. However, the ultimate impact of adopting these ASUs will depend on the Company's lease portfolio as of the adoption date. We are currently evaluating the effects of the adoption of these ASUs on our financial statements. Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU replaces the impairment methodology in current GAAP, which delays recognition of credit losses until it is probable a loss has been incurred, with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This ASU will be effective for us beginning in our first quarter of fiscal 2021. We are currently evaluating the impact of the adoption of this ASU on our financial statements. Derivatives and Hedging In August 2017, the FASB issued ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities (Topic 815). The new guidance expands and refines hedge accounting for both financial and non-financial risks. The new guidance also modifies disclosure requirements for hedging activities. The new guidance will be effective for us beginning in our first quarter of fiscal 2020, and early adoption is permitted in any interim period. We do not expect the adoption of this ASU to have a material impact on our financial statements. Revenue Recognition In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which amends the accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. Subsequently, the FASB has issued the following standards related to ASU 2014-09: ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (“ASU 2016-08”); ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing (“ASU 2016-10”); ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”); and ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers (“ASU 2016-20” and collectively, the “new revenue standards”). The Company has performed an evaluation of this ASU and its impact on the financial statements. This included tasks such as identifying contracts, performance obligations and reviewing the applicable revenue streams. We have completed our assessment and implemented policies, processes, and controls to support the standard's measurement and disclosure requirements. The new standard was adopted in the first quarter of fiscal 2019 using a modified retrospective approach. Based on our review of all our customer agreements for the affected periods, our revenue from sales of our products, such as equipment and spare parts, will continue to be recognized at a point in time, generally upon shipment or delivery to customers or distributors, depending upon the terms of the sales order, consistent with our current revenue recognition model. Revenue related to the sale of services will generally continue to be recognized over time as the services are performed. In certain instances, where collection of consideration is not probable, recognition of revenue may occur later under the new model after we have completed all of our obligations under the contract. However, when adopting the new standard, we did not identify any balances where collection of consideration is not probable. This ASU did not have a material impact on the amount and timing of revenue recognized in the Company’s consolidated financial statements. Collaborative Arrangements In November 2018, the FASB issued ASU 2018-18 – Collaborative Arrangements (Topic 808). This ASU clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue when the collaborative arrangement participant is a customer in the context of a unit of account and precludes recognizing as revenue consideration received from a collaborative arrangement participant if the participant is not a customer. This ASU will be effective for us in the first quarter of 2021 with early adoption permitted. This ASU requires retrospective adoption to the date we adopted ASC 606 by recognizing a cumulative-effect adjustment to the opening balance of retained earnings of the earliest annual period presented. We are currently evaluating the timing and the effects of the adoption of this ASU on our financial statements. |
BALANCE SHEET COMPONENTS (Table
BALANCE SHEET COMPONENTS (Tables) | 9 Months Ended |
Jun. 29, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Components of significant balance sheet accounts | The following tables reflect the components of significant balance sheet accounts as of June 29, 2019 and September 29, 2018 : As of (in thousands) June 29, 2019 September 29, 2018 Short term investments, available-for-sale (1) $ 248,000 $ 293,000 Inventories, net: Raw materials and supplies $ 58,336 $ 63,894 Work in process 31,590 37,829 Finished goods 35,890 40,357 125,816 142,080 Inventory reserves (27,767 ) (26,889 ) $ 98,049 $ 115,191 Property, plant and equipment, net: Land $ 2,182 $ 2,182 Buildings and building improvements (2) 42,125 41,616 Leasehold improvements (2) 24,125 23,561 Data processing equipment and software 36,027 35,469 Machinery, equipment, furniture and fixtures 74,189 68,666 Construction in progress 6,576 6,940 185,224 178,434 Accumulated depreciation (110,373 ) (102,367 ) $ 74,851 $ 76,067 Accrued expenses and other current liabilities: Accrued customer obligations (3) $ 27,491 $ 34,918 Wages and benefits 16,623 44,505 Dividend payable 7,664 8,057 Commissions and professional fees 2,024 5,549 Deferred rent 1,763 1,847 Severance 355 1,415 Other 7,545 9,687 $ 63,465 $ 105,978 (1) All short-term investments were classified as available-for-sale and were measured at fair value based on level one measurement, or quoted market prices, as defined by ASC 820. The Company did not recognize any realized gains or losses on the sale of investments during the three and nine months ended June 29, 2019 and June 30, 2018 . (2) Certain balances as at September 29, 2018 relating to Property, plant and equipment have been reclassified. These reclassifications have no impact to the Consolidated Balance Sheet as at September 29, 2018. (3) Represents customer advance payments, customer credit program, accrued warranty expense and accrued retrofit obligations. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Jun. 29, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table summarizes the Company's recorded goodwill as of June 29, 2019 and September 29, 2018 : As of (in thousands) June 29, 2019 September 29, 2018 Capital Equipment $ 29,920 $ 30,159 APS 26,328 26,391 Total goodwill $ 56,248 $ 56,550 |
Net intangible assets | The following table reflects net intangible assets as of June 29, 2019 and September 29, 2018 : As of Average estimated (dollar amounts in thousands) June 29, 2019 September 29, 2018 useful lives (in years) Developed technology $ 89,334 $ 90,500 7.0 to 15.0 Accumulated amortization (48,243 ) (45,229 ) Net developed technology $ 41,091 $ 45,271 Customer relationships $ 35,805 $ 36,131 5.0 to 6.0 Accumulated amortization (31,670 ) (29,820 ) Net customer relationships $ 4,135 $ 6,311 Trade and brand names $ 7,321 $ 7,377 7.0 to 8.0 Accumulated amortization (6,349 ) (6,088 ) Net trade and brand names $ 972 $ 1,289 Other intangible assets $ 2,500 $ 2,500 1.9 Accumulated amortization (2,500 ) (2,500 ) Net other intangible assets $ — $ — Net intangible assets $ 46,198 $ 52,871 |
Estimated annual amortization expense related to intangible assets | The following table reflects estimated annual amortization expense related to intangible assets as of June 29, 2019 : As of (in thousands) June 29, 2019 Remaining fiscal 2019 $ 1,870 Fiscal 2020 7,479 Fiscal 2021 5,417 Fiscal 2022 4,439 Fiscal 2023 and onwards 26,993 Total amortization expense $ 46,198 |
CASH, CASH EQUIVALENTS, RESTR_2
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND SHORT-TERM INVESTMENTS (Tables) | 9 Months Ended |
Jun. 29, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Cash, cash equivalents, restricted cash and short-term investments | Cash, cash equivalents, restricted cash and short-term investments consisted of the following as of June 29, 2019 : (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Current assets: Cash $ 261,806 $ — $ — $ 261,806 Cash equivalents: Money market funds (1) 123,726 — — 123,726 Time deposits (2) 10,006 — — 10,006 Total cash and cash equivalents $ 395,538 $ — $ — $ 395,538 Restricted Cash (2) 474 — — 474 Total cash, cash equivalents, and restricted cash $ 396,012 $ — $ — $ 396,012 Short-term investments (2) : Time deposits 149,000 — — 149,000 Deposits (3) 99,000 — — 99,000 Total short-term investments $ 248,000 $ — $ — $ 248,000 Total cash, cash equivalents, restricted cash and short-term investments $ 644,012 $ — $ — $ 644,012 (1) The fair value was determined using unadjusted prices in active, accessible markets for identical assets, and as such they were classified as Level 1 assets in the fair value hierarchy. (2) Fair value approximates cost basis. (3) Represents deposits that require a notice period of three months for withdrawal. Cash, cash equivalents, restricted cash and short-term investments consisted of the following as of September 29, 2018 : (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Current assets: Cash $ 42,446 $ — $ — $ 42,446 Cash equivalents: Money market funds (1) 209,172 — (5 ) 209,167 Time deposits (2) 69,017 — — 69,017 Total cash and cash equivalents $ 320,635 $ — $ (5 ) $ 320,630 Restricted Cash (2) 518 — — 518 Total cash, cash equivalents, and restricted cash $ 321,153 $ — $ (5 ) $ 321,148 Short-term investments (2) : Time deposits 197,000 — — 197,000 Deposits (3) 96,000 — — 96,000 Total short-term investments $ 293,000 $ — $ — $ 293,000 Total cash, cash equivalents, restricted cash and short-term investments $ 614,153 $ — $ (5 ) $ 614,148 (1) The fair value was determined using unadjusted prices in active, accessible markets for identical assets, and as such they were classified as Level 1 assets in the fair value hierarchy. (2) Fair value approximates cost basis. (3) |
EQUITY INVESTMENTS (Tables)
EQUITY INVESTMENTS (Tables) | 9 Months Ended |
Jun. 29, 2019 | |
Equity Method Investments [Abstract] | |
Equity investments | Equity investments consisted of the following as of June 29, 2019 and September 29, 2018 : As of (in thousands) June 29, 2019 September 29, 2018 Non-marketable equity securities (1) $ 5,000 $ — Equity method investments 1,301 1,373 Total $ 6,301 $ 1,373 (1) On January 30, 2019, the Company made a $5.0 million investment in one of our collaborative partners, over which the Company does not have significant influence. During the three and nine months ended June 29, 2019 , there was no impairment or adjustment to the observable price. |
DERIVATIVES FINANCIAL INSTRUM_2
DERIVATIVES FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Jun. 29, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The fair value of derivative instruments on our Consolidated Condensed Balance Sheet as of June 29, 2019 and September 29, 2018 was as follows: As of (in thousands) June 29, 2019 September 29, 2018 Notional Amount Fair Value Asset Derivatives (1) Notional Amount Fair Value (Liability) Derivatives (2) Derivatives designated as hedging instruments: Foreign exchange forward contracts (3) $ 34,806 $ 134 $ 43,095 $ (1,071 ) Total derivatives $ 34,806 $ 134 $ 43,095 $ (1,071 ) (1) The fair value of derivative assets is measured using level 2 fair value inputs and is included in prepaid expenses and other current assets on our Consolidated Condensed Balance Sheet. (2) The fair value of derivative liabilities is measured using level 2 fair value inputs and is included in accrued expenses and other current liabilities on our Consolidated Condensed Balance Sheet. (3) Hedged amounts expected to be recognized to income within the next twelve months . |
Derivative Instruments, Gain (Loss) | The effects of derivative instruments designated as cash flow hedges in our Consolidated Condensed Statements of Comprehensive Income for the three and nine months ended June 29, 2019 and June 30, 2018 are as follows: (in thousands) Three months ended Nine months ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Foreign exchange forward contract in cash flow hedging relationships: Net (loss)/gain recognized in OCI, net of tax (1) $ (49 ) $ (1,542 ) $ 39 $ (513 ) Net (loss)/gain reclassified from accumulated OCI into income, net of tax (2) $ (33 ) $ 344 $ (1,165 ) $ 1,884 (1) Net change in the fair value of the effective portion classified in other comprehensive income (“OCI”). (2) Effective portion classified as selling, general and administrative expense. |
SHAREHOLDERS' EQUITY AND EMPL_2
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Tables) | 9 Months Ended |
Jun. 29, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Company’s matching contributions to the Plan | The following table reflects the Company’s contributions to the Plan during the three and nine months ended June 29, 2019 and June 30, 2018 : Three months ended Nine months ended (in thousands) June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Cash $ 428 $ 408 $ 1,291 $ 1,261 |
Accumulated other comprehensive income reflected on the Consolidated Balance Sheets | The following table reflects accumulated other comprehensive loss reflected on the Consolidated Condensed Balance Sheets as of June 29, 2019 and September 29, 2018 : As of (in thousands) June 29, 2019 September 29, 2018 Loss from foreign currency translation adjustments $ (2,641 ) $ (1,211 ) Unrecognized actuarial loss on pension plan, net of tax (1,629 ) (1,620 ) Unrealized gain/(loss) on hedging 134 (1,071 ) Accumulated other comprehensive loss $ (4,136 ) $ (3,902 ) |
Restricted stock and common stock granted | The following table reflects Time-based RSUs, Relative TSR PSUs, Special/Growth PSUs and common stock granted during the three and nine months ended June 29, 2019 and June 30, 2018 : Three months ended Nine months ended (shares in thousands) June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Time-based RSUs 2 3 521 452 Relative TSR PSUs 1 1 166 154 Special/Growth PSUs 1 — 56 59 Common stock 10 8 28 25 Equity-based compensation in shares 14 12 771 690 |
Equity-based compensation expense | The following table reflects total equity-based compensation expense, which includes Time-based RSUs, Relative TSR PSUs, Special/Growth PSUs and common stock, included in the Consolidated Condensed Statements of Operations during the three and nine months ended June 29, 2019 and June 30, 2018 : Three months ended Nine months ended (in thousands) June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Cost of sales $ 161 $ 126 $ 471 $ 384 Selling, general and administrative 2,616 2,111 7,871 5,877 Research and development 820 656 2,430 1,963 Total equity-based compensation expense $ 3,597 $ 2,893 $ 10,772 $ 8,224 The following table reflects equity-based compensation expense, by type of award, for the three and nine months ended June 29, 2019 and June 30, 2018 : Three months ended Nine months ended (in thousands) June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Time-based RSUs $ 2,182 $ 1,662 $ 6,455 $ 5,475 Relative TSR PSUs 1,020 935 3,213 1,910 Special/Growth PSUs 173 101 492 254 Common stock 222 195 612 585 Total equity-based compensation expense $ 3,597 $ 2,893 $ 10,772 $ 8,224 |
REVENUE AND CONTRACT LIABILIT_2
REVENUE AND CONTRACT LIABILITIES (Tables) | 9 Months Ended |
Jun. 29, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Contract Liabilities | The following table shows the changes in contract liability balances during the three and nine months ended June 29, 2019 : Three months ended Nine months ended (in thousands) June 29, 2019 June 29, 2019 Contract liabilities, beginning of period $ 581 $ 997 Revenue recognized (1,392 ) (6,909 ) Additions 1,806 6,907 Contract liabilities, end of period $ 995 $ 995 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Jun. 29, 2019 | |
Earnings Per Share [Abstract] | |
Reconciliation of shares used in the basic and diluted net income per share computation | The following tables reflect a reconciliation of the shares used in the basic and diluted net income per share computation for the three and nine months ended June 29, 2019 and June 30, 2018 : Three months ended (in thousands, except per share data) June 29, 2019 June 30, 2018 Basic Diluted Basic Diluted NUMERATOR: Net income $ 1,287 $ 1,287 $ 60,256 $ 60,256 DENOMINATOR: Weighted average shares outstanding - Basic 64,683 64,683 69,125 69,125 Dilutive effect of Equity Plans 748 1,177 Weighted average shares outstanding - Diluted 65,431 70,302 EPS: Net income per share - Basic $ 0.02 $ 0.02 $ 0.87 $ 0.87 Effect of dilutive shares — (0.01 ) Net income per share - Diluted $ 0.02 $ 0.86 Nine months ended (in thousands, except per share data) June 29, 2019 June 30, 2018 Basic Diluted Basic Diluted NUMERATOR: Net income $ 5,249 $ 5,249 $ 27,041 $ 27,041 DENOMINATOR: Weighted average shares outstanding - Basic 65,914 65,914 70,019 70,019 Dilutive effect of Equity Plans 683 1,094 Weighted average shares outstanding - Diluted 66,597 71,113 EPS: Net income per share - Basic $ 0.08 $ 0.08 $ 0.39 $ 0.39 Effect of dilutive shares — (0.01 ) Net income per share - Diluted $ 0.08 $ 0.38 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Jun. 29, 2019 | |
Income Tax Disclosure [Abstract] | |
Provision for income taxes and the effective tax rate | The following table reflects the provision for income taxes and the effective tax rate for the three and nine months ended June 29, 2019 and June 30, 2018 : Three months ended Nine months ended (dollar amounts in thousands) June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Income tax expense $ 3,864 $ 7,282 $ 19,106 $ 122,494 Effective tax rate 75.0 % 10.8 % 78.2 % 81.9 % |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Jun. 29, 2019 | |
Segment Reporting [Abstract] | |
Operating information by segment | The following table reflects operating information by segment for the three and nine months ended June 29, 2019 and June 30, 2018 : Three months ended Nine months ended (in thousands) June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Net revenue: Capital Equipment $ 89,860 $ 229,462 $ 286,364 $ 578,197 APS 37,249 39,372 113,861 126,100 Net revenue 127,109 268,834 400,225 704,297 (Loss)/income from operations: Capital Equipment (6,449 ) 57,771 (10,563 ) 116,615 APS 8,276 6,692 24,480 25,443 Income from operations $ 1,827 $ 64,463 $ 13,917 $ 142,058 |
Capital expenditures, depreciation and amortization expense | The following tables reflect capital expenditures, depreciation expense and amortization expense for the three and nine months ended June 29, 2019 and June 30, 2018 . Three months ended Nine months ended (in thousands) June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Capital expenditures: Capital Equipment $ 646 $ 999 $ 4,118 $ 4,878 APS 1,490 3,072 5,194 11,603 $ 2,136 $ 4,071 $ 9,312 $ 16,481 Three months ended Nine months ended (in thousands) June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Depreciation expense: Capital Equipment $ 1,800 $ 1,926 $ 5,540 $ 5,601 APS 1,352 1,063 3,872 2,635 $ 3,152 $ 2,989 $ 9,412 $ 8,236 Amortization expense: Capital Equipment $ 989 $ 1,053 $ 2,999 $ 3,188 APS 854 909 2,590 2,739 $ 1,843 $ 1,962 $ 5,589 $ 5,927 |
COMMITMENTS, CONTINGENCIES AN_2
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Tables) | 9 Months Ended |
Jun. 29, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Reserve for product warranty activity | The following table reflects the reserve for warranty activity for the three and nine months ended June 29, 2019 and June 30, 2018 : Three months ended Nine months ended (in thousands) June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Reserve for warranty, beginning of period $ 13,885 $ 14,197 $ 14,475 $ 13,796 Provision for warranty 3,143 3,204 8,874 9,384 Utilization of reserve (3,073 ) (3,027 ) (9,394 ) (8,806 ) Reserve for warranty, end of period $ 13,955 $ 14,374 $ 13,955 $ 14,374 |
Obligations not reflected on the Consolidated Balance Sheet | The following table reflects obligations not reflected on the Consolidated Condensed Balance Sheet as of June 29, 2019 : Payments due by fiscal year (in thousands) Total 2019 2020 2021 2022 thereafter Inventory purchase obligation (1) $ 85,829 $ 85,829 $ — $ — $ — $ — Operating lease obligations (2) 17,534 1,051 4,215 2,672 2,156 7,440 Total $ 103,363 $ 86,880 $ 4,215 $ 2,672 $ 2,156 $ 7,440 (1) The Company orders inventory components in the normal course of its business. A portion of these orders are non-cancellable, however, some orders impose varying penalties and charges in the event of cancellation. (2) The Company has minimum rental commitments under various leases (excluding taxes, insurance, maintenance and repairs, which are also paid by the Company) primarily for various facility and equipment leases, which expire periodically through 2027 (not including lease extension options, if applicable). Pursuant to ASC No. 840, Leases, for lessee's involvement in asset construction, the Company was considered the owner of the Building during the construction phase. The Building was completed on December 1, 2013 and Pte signed an agreement with the Landlord to lease from the Landlord approximately 198,000 square feet, representing approximately 70% of the Building. Following the completion of construction, we performed a sale-leaseback analysis pursuant to ASC 840-40 and determined that because of our continuing involvement, ASC 840-40 precluded us from derecognizing the asset and associated financing obligation. As such, we reclassified the asset from construction in progress to property, plant and equipment and began to depreciate the building over its estimated useful life of 25 years. We concluded that the term of the financing obligation is 10 years . This is equal to the non-cancellable term of our lease agreement with the Landlord. As of June 29, 2019 , we recorded a financing obligation related to the Building of $15.5 million (see Note 8 above). The financing obligation is not reflected in the table above. |
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block] | The following table reflects significant customer concentrations as a percentage of net revenue for the nine months ended June 29, 2019 and June 30, 2018 . Nine months ended June 29, 2019 June 30, 2018 Micron Technology, Inc 10.9 % * Haoseng Industrial Company Limited (1) * 12.8 % * Represented less than 10% of total net revenue |
Significant customer concentrations as a percentage of total accounts receivable | The following table reflects significant customer concentrations as a percentage of total accounts receivable as of June 29, 2019 and June 30, 2018 : As of June 29, 2019 June 30, 2018 Super Power International (1) 15.8 % 13.0 % Forehope Electronic (Ningbo) Co Ltd 14.4 % * Micron Technology, Inc 10.2 % * Haoseng Industrial Company Limited (1) * 27.6 % (1) Distributor of the Company's products. * Represented less than 10% of total accounts receivable |
BASIS OF PRESENTATION (Inventor
BASIS OF PRESENTATION (Inventories) (Narrative) (Details) | 9 Months Ended |
Jun. 29, 2019 | |
Equipment [Member] | |
Inventory [Line Items] | |
Reserves For Inventory In Excess Of Demand Inventory Future Consumption Period | 18 months |
Spare Parts [Member] | |
Inventory [Line Items] | |
Reserves For Inventory In Excess Of Demand Inventory Future Consumption Period | 24 months |
Expendable Tools [Member] | |
Inventory [Line Items] | |
Reserves For Inventory In Excess Of Demand Inventory Future Consumption Period | 12 months |
BASIS OF PRESENTATION (Property
BASIS OF PRESENTATION (Property, Plant and Equipment) (Narrative) (Details) | 9 Months Ended |
Jun. 29, 2019 | |
Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 25 years |
Leaseholds and Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Estimated Useful Lives | based on the shorter of the life of lease or life of asset |
Software and Software Development Costs [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Tools, Dies and Molds [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 1 year |
Minimum [Member] | Machinery and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Maximum [Member] | Machinery and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
BASIS OF PRESENTATION (Recent A
BASIS OF PRESENTATION (Recent Accounting Pronouncements) (Narrative) (Details) - USD ($) $ in Thousands | Sep. 29, 2018 | Sep. 30, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect of new accounting principle in period of adoption | $ (534) | $ (5,420) |
Retained earnings | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect of new accounting principle in period of adoption | $ (4,006) | |
Retained earnings | Accounting Standards Update 2016-16 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect of new accounting principle in period of adoption | $ (534) |
BALANCE SHEET COMPONENTS (Compo
BALANCE SHEET COMPONENTS (Components of significant balance sheet accounts) (Details) - USD ($) $ in Thousands | Jun. 29, 2019 | Sep. 29, 2018 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Short-term investments | [1] | $ 248,000 | $ 293,000 | |
Inventories, net: | ||||
Raw materials and supplies | 58,336 | 63,894 | ||
Work in process | 31,590 | 37,829 | ||
Finished goods | 35,890 | 40,357 | ||
Inventory, gross | 125,816 | 142,080 | ||
Inventory reserves | (27,767) | (26,889) | ||
Inventories, net | 98,049 | 115,191 | ||
Property, plant and equipment, net: | ||||
Land | 2,182 | 2,182 | ||
Buildings and building improvements (2) | 42,125 | 41,616 | [2] | |
Leasehold improvements (2) | 24,125 | 23,561 | [2] | |
Data processing equipment and software | 36,027 | 35,469 | ||
Machinery, equipment, furniture and fixtures | 74,189 | 68,666 | ||
Construction in progress | 6,576 | 6,940 | ||
Property, plant and equipment, gross | 185,224 | 178,434 | ||
Accumulated depreciation | (110,373) | (102,367) | ||
Property, plant and equipment, net | 74,851 | 76,067 | ||
Accrued expenses and other current liabilities: | ||||
Accrued customer obligations (3) | [3] | 27,491 | 34,918 | |
Wages and benefits | 16,623 | 44,505 | ||
Dividend payable | 7,664 | 8,057 | ||
Commissions and professional fees | 2,024 | 5,549 | ||
Deferred rent | 1,763 | 1,847 | ||
Severance | 355 | 1,415 | ||
Other | 7,545 | 9,687 | ||
Accrued expenses and other current liabilities | $ 63,465 | $ 105,978 | ||
[1] | All short-term investments were classified as available-for-sale and were measured at fair value based on level one measurement, or quoted market prices, as defined by ASC 820. The Company did not recognize any realized gains or losses on the sale of investments during the three and nine months ended June 29, 2019 and June 30, 2018 . | |||
[2] | Certain balances as at September 29, 2018 relating to Property, plant and equipment have been reclassified. These reclassifications have no impact to the Consolidated Balance Sheet as at September 29, 2018. | |||
[3] | Represents customer advance payments, customer credit program, accrued warranty expense and accrued retrofit obligations. |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Summary of Goodwill) (Details) - USD ($) $ in Thousands | Jun. 29, 2019 | Sep. 29, 2018 |
Goodwill [Line Items] | ||
Goodwill | $ 56,248 | $ 56,550 |
Capital Equipment [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 29,920 | 30,159 |
Aftermarket Products and Services [Member] | ||
Goodwill [Line Items] | ||
Goodwill | $ 26,328 | $ 26,391 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS (Net intangible assets) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 29, 2019 | Sep. 29, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Net intangible assets | $ 46,198 | $ 52,871 |
Developed technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | 89,334 | 90,500 |
Accumulated amortization | (48,243) | (45,229) |
Net intangible assets | 41,091 | 45,271 |
Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | 35,805 | 36,131 |
Accumulated amortization | (31,670) | (29,820) |
Net intangible assets | 4,135 | 6,311 |
Trade name [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | 7,321 | 7,377 |
Accumulated amortization | (6,349) | (6,088) |
Net intangible assets | 972 | 1,289 |
Other intangible assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | 2,500 | 2,500 |
Accumulated amortization | (2,500) | (2,500) |
Net intangible assets | $ 0 | $ 0 |
Average estimated useful lives (in years) | 1 year 10 months 24 days | |
Minimum [Member] | Developed technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Average estimated useful lives (in years) | 7 years | |
Minimum [Member] | Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Average estimated useful lives (in years) | 5 years | |
Minimum [Member] | Trade name [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Average estimated useful lives (in years) | 7 years | |
Maximum [Member] | Developed technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Average estimated useful lives (in years) | 15 years | |
Maximum [Member] | Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Average estimated useful lives (in years) | 6 years | |
Maximum [Member] | Trade name [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Average estimated useful lives (in years) | 8 years |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS (Estimated annual amortization expense) (Details) $ in Thousands | Jun. 29, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remaining fiscal 2019 | $ 1,870 |
Fiscal 2020 | 7,479 |
Fiscal 2021 | 5,417 |
Fiscal 2022 | 4,439 |
Fiscal 2023 and onwards | 26,993 |
Total amortization expense | $ 46,198 |
CASH, CASH EQUIVALENTS, RESTR_3
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND SHORT-TERM INVESTMENTS (Details) - USD ($) $ in Thousands | Jun. 29, 2019 | Sep. 29, 2018 | Jun. 30, 2018 | Sep. 30, 2017 | |||
Cash, Cash Equivalents, Restricted Cash and Short-Term Investments [Line Items] | |||||||
Cash | $ 261,806 | $ 42,446 | |||||
Cash and Cash Equivalents, Amortized Cost | 395,538 | 320,635 | |||||
Cash and Cash Equivalents, Unrealized Gain | 0 | 0 | |||||
Cash and Cash Equivalents, Unrealized Loss | 0 | (5) | |||||
Cash and Cash Equivalents, Estimated Fair Value | 395,538 | 320,630 | |||||
Restricted Cash | 474 | [1] | 518 | [2] | |||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Amortized Cost | 396,012 | 321,153 | |||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 396,012 | 321,148 | $ 363,200 | $ 392,940 | |||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Unrealized Gain | 0 | 0 | |||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Unrealized Loss | 0 | (5) | |||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Estimated Fair Value | 396,012 | 321,148 | |||||
Short-term Investments, Unrealized Gain | 0 | 0 | |||||
Short-term Investments, Unrealized Loss | 0 | 0 | |||||
Short-term Investments, Estimated Fair Value | 248,000 | 293,000 | |||||
Short-term investments | [3] | 248,000 | 293,000 | ||||
Cash, Cash Equivalents, Restricted Cash, Restricted Cash Equivalents, and Short-Term Investments, Amortized Cost | 644,012 | 614,153 | |||||
Cash, Cash Equivalents, Restricted Cash, Restricted Cash Equivalents, and Short-Term Investments, Unrealized Gain | 0 | 0 | |||||
Cash, Cash Equivalents, Restricted Cash, Restricted Cash Equivalents, and Short-Term Investments, Unrealized Loss | 0 | (5) | |||||
Cash, Cash Equivalents, Restricted Cash, Restricted Cash Equivalents, and Short-Term Investments, Estimated Fair Value | 644,012 | 614,148 | |||||
Money market funds | |||||||
Cash, Cash Equivalents, Restricted Cash and Short-Term Investments [Line Items] | |||||||
Cash Equivalents, Amortized Cost | 123,726 | 209,172 | |||||
Cash Equivalents, Unrealized Gain | 0 | 0 | |||||
Cash Equivalents, Unrealized Loss | 0 | (5) | |||||
Cash Equivalents, Estimated Fair Value | 123,726 | [4] | 209,167 | [5] | |||
Time deposits | |||||||
Cash, Cash Equivalents, Restricted Cash and Short-Term Investments [Line Items] | |||||||
Cash Equivalents, Amortized Cost | 10,006 | 69,017 | |||||
Cash Equivalents, Unrealized Gain | 0 | 0 | |||||
Cash Equivalents, Unrealized Loss | 0 | 0 | |||||
Cash Equivalents, Estimated Fair Value | 10,006 | [1] | 69,017 | [2] | |||
Short-term Investments, Unrealized Gain | 0 | 0 | |||||
Short-term Investments, Unrealized Loss | 0 | 0 | |||||
Short-term Investments, Estimated Fair Value | 149,000 | [1] | 197,000 | [5] | |||
Short-term investments | 149,000 | 197,000 | |||||
Deposits | |||||||
Cash, Cash Equivalents, Restricted Cash and Short-Term Investments [Line Items] | |||||||
Short-term Investments, Unrealized Gain | 0 | 0 | |||||
Short-term Investments, Unrealized Loss | 0 | 0 | |||||
Short-term Investments, Estimated Fair Value | 99,000 | [1],[6] | 96,000 | [2],[7] | |||
Short-term investments | $ 99,000 | [6] | $ 96,000 | [7] | |||
[1] | Fair value approximates cost basis. | ||||||
[2] | Fair value approximates cost basis. | ||||||
[3] | All short-term investments were classified as available-for-sale and were measured at fair value based on level one measurement, or quoted market prices, as defined by ASC 820. The Company did not recognize any realized gains or losses on the sale of investments during the three and nine months ended June 29, 2019 and June 30, 2018 . | ||||||
[4] | The fair value was determined using unadjusted prices in active, accessible markets for identical assets, and as such they were classified as Level 1 assets in the fair value hierarchy. | ||||||
[5] | The fair value was determined using unadjusted prices in active, accessible markets for identical assets, and as such they were classified as Level 1 assets in the fair value hierarchy. | ||||||
[6] | Represents deposits that require a notice period of three months for withdrawal. | ||||||
[7] | Represents deposits that require a notice period of three months for withdrawal. |
EQUITY INVESTMENTS (Details)
EQUITY INVESTMENTS (Details) - USD ($) $ in Thousands | Jun. 29, 2019 | Jan. 30, 2019 | Sep. 29, 2018 | |
Equity Method Investments [Abstract] | ||||
Non-marketable equity securities | $ 5,000 | [1] | $ 5,000 | $ 0 |
Equity method investments | 1,301 | 1,373 | ||
Equity investments | $ 6,301 | $ 1,373 | ||
[1] | On January 30, 2019, the Company made a $5.0 million investment in one of our collaborative partners, over which the Company does not have significant influence. During the three and nine months ended June 29, 2019 , there was no impairment or adjustment to the observable price. |
DERIVATIVES FINANCIAL INSTRUM_3
DERIVATIVES FINANCIAL INSTRUMENTS (Fair value of derivative instruments) (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Jun. 29, 2019 | Sep. 29, 2018 | ||
Derivatives, Fair Value [Line Items] | |||
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimate of Time to Transfer | 12 months | ||
Total derivative, Notional Amount | $ 34,806 | $ 43,095 | |
Designated as Hedging Instrument [Member] | Foreign Exchange Forward [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Foreign exchange forward contract, term of contract | 12 months | ||
Total derivative, Notional Amount | $ 34,806 | 43,095 | |
Prepaid Expenses And Other Current Assets [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Asset, Fair Value, Gross Asset | [1],[2] | 134 | |
Prepaid Expenses And Other Current Assets [Member] | Designated as Hedging Instrument [Member] | Foreign Exchange Forward [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Asset, Fair Value, Gross Asset | [1],[2] | $ 134 | |
Accrued Liabilities [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Liability, Fair Value, Gross Liability | [1],[3] | (1,071) | |
Accrued Liabilities [Member] | Designated as Hedging Instrument [Member] | Foreign Exchange Forward [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Liability, Fair Value, Gross Liability | [1],[3] | $ (1,071) | |
[1] | Hedged amounts expected to be recognized to income within the next twelve months . | ||
[2] | The fair value of derivative assets is measured using level 2 fair value inputs and is included in prepaid expenses and other current assets on our Consolidated Condensed Balance Sheet. | ||
[3] | The fair value of derivative liabilities is measured using level 2 fair value inputs and is included in accrued expenses and other current liabilities on our Consolidated Condensed Balance Sheet. |
DERIVATIVES FINANCIAL INSTRUM_4
DERIVATIVES FINANCIAL INSTRUMENTS (Gain (loss) of derivative instruments) (Details) - Foreign Exchange Forward [Member] - Designated as Hedging Instrument [Member] - Cash Flow Hedging [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | ||
Other Comprehensive Income (Loss) [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Net gain (loss) recognized in OCI, net of tax | [1] | $ (49) | $ (1,542) | $ 39 | $ (513) |
Selling, General and Administrative Expenses [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Net gain (loss) reclassified from accumulated OCI into income, net of tax | [2] | $ (33) | $ 344 | $ (1,165) | $ 1,884 |
[1] | Net change in the fair value of the effective portion classified in other comprehensive income (“OCI”). | ||||
[2] | Effective portion classified as selling, general and administrative expense. |
DEBT AND OTHER OBLIGATIONS DE_2
DEBT AND OTHER OBLIGATIONS DEBT AND OTHER OBLIGATIONS (Details) $ in Thousands, $ in Millions | Dec. 01, 2013SGD ($)renewal_option | Jun. 29, 2019USD ($) | Feb. 15, 2019USD ($) | Sep. 29, 2018USD ($) | Dec. 01, 2013USD ($)ft² | Nov. 22, 2013USD ($) |
Capital Leased Assets [Line Items] | ||||||
Area of Land | ft² | 198,000 | |||||
Financing obligation | $ 14,701 | $ 15,187 | $ 20,000 | |||
Short term debt | $ 71,194 | $ 0 | ||||
K&S Corporate Headquarters [Member] | ||||||
Capital Leased Assets [Line Items] | ||||||
Lease Agreement Term | 10 years | 10 years | ||||
Lessee Leasing Arrangements, Capital Leases, Number of Renewal Options | renewal_option | 2 | |||||
Lessee Leasing Arrangements, Capital Leases, Renewal Term | 10 years | |||||
Annual Rent and Service Charge Minimum Range | $ 4 | |||||
Annual Rent and Service Charge Maximum Range | $ 5 | |||||
Area of Land | ft² | 198,000 | |||||
Percentage Of Building Area To Be Leased From Landlord | 70.00% | |||||
Capital Lease Obligations, Interest Rate, Effective Percentage | 6.30% | |||||
Citibank [Member] | ||||||
Capital Leased Assets [Line Items] | ||||||
Capacity under credit facility | $ 5,000 | |||||
Outstanding amounts under credit facility | $ 3,200 | |||||
Current and Noncurrent Portion [Member] | ||||||
Capital Leased Assets [Line Items] | ||||||
Financing obligation | $ 15,500 | |||||
Facility Agreements [Member] | MUFG Bank, Ltd., Singapore Branch [Member] | ||||||
Capital Leased Assets [Line Items] | ||||||
Capacity under credit facility | $ 100,000 | |||||
London Interbank Offered Rate (LIBOR) [Member] | Facility Agreements [Member] | MUFG Bank, Ltd., Singapore Branch [Member] | ||||||
Capital Leased Assets [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 1.50% | |||||
Building [Member] | ||||||
Capital Leased Assets [Line Items] | ||||||
Property, Plant and Equipment, Useful Life | 25 years |
SHAREHOLDERS' EQUITY AND EMPL_3
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | May 20, 2019 | Feb. 28, 2019 | Dec. 12, 2018 | Jun. 29, 2019 | Mar. 30, 2019 | Dec. 29, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 30, 2017 | Jun. 29, 2019 | Jun. 30, 2018 | Jan. 31, 2019 | Jul. 10, 2018 | Aug. 15, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Description Of Maximum Percentage Of Employee Contributions and Matching Contributions Based Upon Years Of Service | employee contributions and matching Company contributions from 4% to 6% | |||||||||||||
Stock repurchase program, authorized amount | $ 300,000 | $ 200,000 | $ 100,000 | |||||||||||
Shares repurchased in period (shares) | (1.5) | (4) | ||||||||||||
Value of shares acquired | $ 33,177 | $ 26,922 | $ 25,485 | $ 42,584 | $ 21,470 | $ 3,280 | $ 85,600 | |||||||
Remaining repurchase authorized amount | 112,100 | 112,100 | ||||||||||||
Cash dividends declared per share (in dollars per share) | $ 0.12 | $ 0.12 | $ 0.12 | |||||||||||
Dividend payment | $ (7,800) | $ (23,902) | $ 0 | |||||||||||
Relative Total Shareholder Return Average Stock Price Calculation Period | 90 days | |||||||||||||
Total Shareholder Return Award Performance Measurement Period | 3 years | |||||||||||||
Minimum [Member] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 4.00% | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award Vesting Percentage | 0.00% | 0.00% | ||||||||||||
Maximum [Member] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 6.00% | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award Vesting Percentage | 200.00% | 200.00% | ||||||||||||
Equity Incentive Plan 2017 [Member] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 4 | 4 |
SHAREHOLDERS' EQUITY AND EMPL_4
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Matching contributions to the Plan) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
401(k) Cash Contributions | ||||
Cash | $ 428 | $ 408 | $ 1,291 | $ 1,261 |
SHAREHOLDERS' EQUITY AND EMPL_5
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Accumulated other comprehensive income) (Details) - USD ($) $ in Thousands | Jun. 29, 2019 | Sep. 29, 2018 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Loss from foreign currency translation adjustments | $ (2,641) | $ (1,211) |
Unrecognized actuarial loss on pension plan, net of tax | (1,629) | (1,620) |
Unrealized gain/(loss) on hedging | 134 | (1,071) |
Accumulated other comprehensive loss | $ (4,136) | $ (3,902) |
SHAREHOLDERS' EQUITY AND EMPL_6
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Restricted stock and common stock granted) (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation in shares | 14 | 12 | 771 | 690 |
Relative TSR PSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation in shares | 1 | 1 | 166 | 154 |
Time-based RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation in shares | 2 | 3 | 521 | 452 |
Special/Growth PSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation in shares | 1 | 0 | 56 | 59 |
Common Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation in shares | 10 | 8 | 28 | 25 |
SHAREHOLDERS' EQUITY AND EMPL_7
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Total equity-based compensation expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total equity-based compensation expense | $ 3,597 | $ 2,893 | $ 10,772 | $ 8,224 |
Relative TSR PSU [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total equity-based compensation expense | 1,020 | 935 | 3,213 | 1,910 |
Time-based RSUs | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total equity-based compensation expense | 2,182 | 1,662 | 6,455 | 5,475 |
Special/Growth PSUs | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total equity-based compensation expense | 173 | 101 | 492 | 254 |
Common Stock | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total equity-based compensation expense | 222 | 195 | 612 | 585 |
Cost of sales [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total equity-based compensation expense | 161 | 126 | 471 | 384 |
Selling, general and administrative (1) [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total equity-based compensation expense | 2,616 | 2,111 | 7,871 | 5,877 |
Research and development [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total equity-based compensation expense | $ 820 | $ 656 | $ 2,430 | $ 1,963 |
REVENUE AND CONTRACT LIABILIT_3
REVENUE AND CONTRACT LIABILITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Jun. 29, 2019 | Jun. 29, 2019 | |
Change in Contract with Customer, Liability [Roll Forward] | ||
Contract liabilities, beginning of period | $ 581 | $ 997 |
Revenue recognized | 1,392 | 6,909 |
Additions | 1,806 | 6,907 |
Contract liabilities, end of period | $ 995 | $ 995 |
EARNINGS PER SHARE (Reconciliat
EARNINGS PER SHARE (Reconciliation of the shares used in the basic and diluted net income per share computation) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Jun. 29, 2019 | Mar. 30, 2019 | Dec. 29, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 30, 2017 | Jun. 29, 2019 | Jun. 30, 2018 | |
NUMERATOR: | ||||||||
Net income/(loss) | $ 1,287 | $ (3,555) | $ 7,517 | $ 60,256 | $ 36,313 | $ (69,528) | $ 5,249 | $ 27,041 |
DENOMINATOR: | ||||||||
Weighted average shares outstanding - Basic (in shares) | 64,683 | 69,125 | 65,914 | 70,019 | ||||
Dilutive Securities, Effect on Basic Earnings Per Share, Options and Restrictive Stock Units | $ 748 | $ 1,177 | $ 683 | $ 1,094 | ||||
Weighted average shares outstanding - Diluted | 65,431 | 70,302 | 66,597 | 71,113 | ||||
EPS: | ||||||||
Net income per share - Basic (in dollars per share) | $ 0.02 | $ 0.87 | $ 0.08 | $ 0.39 | ||||
Effect of dilutive shares (in dollars per share) | 0 | 0.01 | 0 | 0.01 | ||||
Net income per share - Diluted (in dollars per share) | $ 0.02 | $ 0.86 | $ 0.08 | $ 0.38 |
INCOME TAXES (Provision for inc
INCOME TAXES (Provision for income taxes and the effective tax rate) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 3,864 | $ 7,282 | $ 19,106 | $ 122,494 |
Effective tax rate | 75.00% | 10.80% | 78.20% | 81.90% |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 3,864 | $ 7,282 | $ 19,106 | $ 122,494 |
Tax cuts and jobs act of 2017 income tax expense (benefit) | $ 10,200 | |||
Income tax expense due to reassessment | $ 700 |
SEGMENT INFORMATION (Operating
SEGMENT INFORMATION (Operating information by segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Net revenue: | ||||
Revenues | $ 127,109 | $ 268,834 | $ 400,225 | $ 704,297 |
Income from operations: | ||||
Income from operations | 1,827 | 64,463 | 13,917 | 142,058 |
Capital Equipment [Member] | ||||
Net revenue: | ||||
Revenues | 89,860 | 229,462 | 286,364 | 578,197 |
Income from operations: | ||||
Income from operations | (6,449) | 57,771 | (10,563) | 116,615 |
Aftermarket Products and Services (APS) [Member] | ||||
Net revenue: | ||||
Revenues | 37,249 | 39,372 | 113,861 | 126,100 |
Income from operations: | ||||
Income from operations | $ 8,276 | $ 6,692 | $ 24,480 | $ 25,443 |
SEGMENT INFORMATION (Capital ex
SEGMENT INFORMATION (Capital expenditures, depreciation and amortization expense by segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Capital expenditures: | ||||
Capital expenditures | $ 2,136 | $ 4,071 | $ 9,312 | $ 16,481 |
Depreciation and amortization expense: | ||||
Depreciation expense | 3,152 | 2,989 | 9,412 | 8,236 |
Amortization expense | 1,843 | 1,962 | 5,589 | 5,927 |
Capital Equipment [Member] | ||||
Capital expenditures: | ||||
Capital expenditures | 646 | 999 | 4,118 | 4,878 |
Depreciation and amortization expense: | ||||
Depreciation expense | 1,800 | 1,926 | 5,540 | 5,601 |
Amortization expense | 989 | 1,053 | 2,999 | 3,188 |
Aftermarket Products and Services (APS) [Member] | ||||
Capital expenditures: | ||||
Capital expenditures | 1,490 | 3,072 | 5,194 | 11,603 |
Depreciation and amortization expense: | ||||
Depreciation expense | 1,352 | 1,063 | 3,872 | 2,635 |
Amortization expense | $ 854 | $ 909 | $ 2,590 | $ 2,739 |
SEGMENT INFORMATION (Narrative)
SEGMENT INFORMATION (Narrative) (Details) | 9 Months Ended |
Jun. 29, 2019segment | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 2 |
COMMITMENTS, CONTINGENCIES AN_3
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Reserve for product warranty activity) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||||
Reserve for warranty, beginning of period | $ 13,885 | $ 14,197 | $ 14,475 | $ 13,796 |
Provision for warranty | 3,143 | 3,204 | 8,874 | 9,384 |
Utilization of reserve | (3,073) | (3,027) | (9,394) | (8,806) |
Reserve for warranty, end of period | $ 13,955 | $ 14,374 | $ 13,955 | $ 14,374 |
COMMITMENTS, CONTINGENCIES AN_4
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Obligations not reflected on the Consolidated Balance Sheet) (Details) $ in Thousands | Jun. 29, 2019USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
Inventory purchase obligation | $ 85,829 | [1] |
Inventory purchase obligation, Payments due by fiscal year 2019 | 85,829 | [1] |
Inventory purchase obligation, Payments due by fiscal year 2020 | 0 | [1] |
Inventory purchase obligation, Payments due by fiscal year 2021 | 0 | [1] |
Inventory purchase obligation, Payments due by fiscal year 2022 | 0 | [1] |
Inventory purchase obligation, Payments due by fiscal year thereafter | 0 | |
Operating lease obligations | 17,534 | [2] |
Operating lease obligations, Payments due by fiscal year 2019 | 1,051 | [2] |
Operating lease obligations, Payments due by fiscal year 2020 | 4,215 | [2] |
Operating lease obligations, Payments due by fiscal year 2021 | 2,672 | [2] |
Operating lease obligations, Payments due by fiscal year 2022 | 2,156 | [2] |
Operating lease obligations, Payments due by fiscal year thereafter | 7,440 | [2] |
Total | 103,363 | |
Total, Payments due by fiscal year 2019 | 86,880 | |
Total, Payments due by fiscal year 2020 | 4,215 | |
Total, Payments due by fiscal year 2021 | 2,672 | |
Total, Payments due by fiscal year 2022 | 2,156 | |
Total, Payments due by fiscal year thereafter | $ 7,440 | |
[1] | The Company orders inventory components in the normal course of its business. A portion of these orders are non-cancellable, however, some orders impose varying penalties and charges in the event of cancellation. | |
[2] | The Company has minimum rental commitments under various leases (excluding taxes, insurance, maintenance and repairs, which are also paid by the Company) primarily for various facility and equipment leases, which expire periodically through 2027 (not including lease extension options, if applicable). Pursuant to ASC No. 840, Leases, for lessee's involvement in asset construction, the Company was considered the owner of the Building during the construction phase. The Building was completed on December 1, 2013 and Pte signed an agreement with the Landlord to lease from the Landlord approximately 198,000 square feet, representing approximately 70% of the Building. Following the completion of construction, we performed a sale-leaseback analysis pursuant to ASC 840-40 and determined that because of our continuing involvement, ASC 840-40 precluded us from derecognizing the asset and associated financing obligation. As such, we reclassified the asset from construction in progress to property, plant and equipment and began to depreciate the building over its estimated useful life of 25 years. We concluded that the term of the financing obligation is 10 years . This is equal to the non-cancellable term of our lease agreement with the Landlord. As of June 29, 2019 , we recorded a financing obligation related to the Building of $15.5 million (see Note 8 above). The financing obligation is not reflected in the table above. |
COMMITMENTS, CONTINGENCIES AN_5
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Significant customer concentrations as a percentage of net revenue) (Details) - Accounts Receivable [Member] - Customer Concentration Risk [Member] | 9 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | ||
Micron Technology, Inc | |||
Concentration Risk [Line Items] | |||
Customer concentrations risk percentage | 10.90% | ||
Haoseng Industrial Company Limited | |||
Concentration Risk [Line Items] | |||
Customer concentrations risk percentage | [1] | 12.80% | |
[1] | Distributor of the Company's products. |
COMMITMENTS, CONTINGENCIES AN_6
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Significant customer concentrations as a percentage of total accounts receivable) (Details) - Accounts Receivable [Member] - Customer Concentration Risk [Member] | 9 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | ||
Super Power International | |||
Concentration Risk [Line Items] | |||
Customer concentrations risk percentage | [1] | 15.80% | 13.00% |
Haoseng Industrial Company Limited | |||
Concentration Risk [Line Items] | |||
Customer concentrations risk percentage | [1] | 27.60% | |
Forehope Electronic (Ningbo) Co Ltd [Member] | |||
Concentration Risk [Line Items] | |||
Customer concentrations risk percentage | 14.40% | ||
Micron Technology, Inc [Member] [Member] | |||
Concentration Risk [Line Items] | |||
Customer concentrations risk percentage | 10.20% | ||
[1] | Distributor of the Company's products. |
COMMITMENTS, CONTINGENCIES AN_7
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Narrative) (Details) $ in Thousands | 9 Months Ended | ||
Jun. 29, 2019USD ($) | Sep. 29, 2018USD ($) | Dec. 01, 2013USD ($)ft² | |
Other Commitments [Line Items] | |||
Area of Land | ft² | 198,000 | ||
Percentage Of Building Area Agreed To Lease From Landlord | 70.00% | ||
Lessee, Operating Lease, Term of Contract | 10 years | ||
Period Of Warranty For Manufacturing Defects | 1 year | ||
Lease Expiration Year | 2027 | ||
Financing obligation | $ 14,701 | $ 15,187 | $ 20,000 |
Current and Noncurrent Portion [Member] | |||
Other Commitments [Line Items] | |||
Financing obligation | $ 15,500 | ||
Building [Member] | |||
Other Commitments [Line Items] | |||
Property, Plant and Equipment, Useful Life | 25 years |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Thousands | Jul. 29, 2019 | Jun. 29, 2019 | Sep. 29, 2018 |
Subsequent Event [Line Items] | |||
Total derivative, Notional Amount | $ 34,806 | $ 43,095 | |
Foreign Exchange Forward [Member] | Designated as Hedging Instrument [Member] | |||
Subsequent Event [Line Items] | |||
Total derivative, Notional Amount | $ 34,806 | $ 43,095 | |
Foreign exchange forward contract, term of contract | 12 months | ||
Foreign Exchange Forward [Member] | Designated as Hedging Instrument [Member] | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Total derivative, Notional Amount | $ 13,600 | ||
Foreign exchange forward contract, term of contract | 12 months |