DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - shares | 9 Months Ended | |
Jun. 27, 2020 | Jul. 24, 2020 | |
Cover [Abstract] | ||
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 | --10-03 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Document Period End Date | Jun. 27, 2020 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 61,840,109 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 27, 2020 | Sep. 28, 2019 | |
Current assets: | |||
Cash and cash equivalents | $ 321,775 | $ 364,184 | |
Short-term investments | [1] | 194,000 | 229,000 |
Accounts and other receivable, net of allowance for doubtful accounts of $1,306 and $597, respectively | 195,489 | 195,830 | |
Inventories, net | 114,194 | 89,308 | |
Prepaid expenses and other current assets | 13,735 | 15,429 | |
Total current assets | 839,193 | 893,751 | |
Property, plant and equipment, net | 55,826 | 72,370 | |
Operating right-of-use assets | 22,192 | 0 | |
Goodwill | 56,053 | 55,691 | |
Intangible assets, net | 38,207 | 42,651 | |
Deferred tax assets | 8,515 | 6,409 | |
Equity investments | 7,367 | 6,250 | |
Other assets | 2,112 | 2,494 | |
TOTAL ASSETS | 1,029,465 | 1,079,616 | |
Current liabilities: | |||
Short-term debt | 0 | 60,904 | |
Accounts payable | 49,659 | 36,711 | |
Less: Current portion | 5,471 | 0 | |
Income tax payable | 13,050 | 12,494 | |
Accrued expenses and other current liabilities | 74,624 | 64,533 | |
Total current liabilities | 142,804 | 174,642 | |
Financing obligation | 0 | 14,207 | |
Deferred tax liabilities | 34,508 | 32,054 | |
Income tax payable | 74,307 | 80,290 | |
Long-term portion of lease obligations | 18,124 | 0 | |
Other liabilities | 10,078 | 9,360 | |
TOTAL LIABILITIES | 279,821 | 310,553 | |
Commitments and contingent liabilities (Note 15) | |||
SHAREHOLDERS' EQUITY: | |||
Preferred stock, without par value: Authorized 5,000 shares; issued - none | 0 | 0 | |
Common stock, without par value: Authorized 200,000 shares; issued 85,364 and 85,364, respectively; outstanding 61,925 and 63,172 shares, respectively | 536,487 | 533,590 | |
Treasury stock, at cost, 23,439 and 22,192 shares, respectively | (387,302) | (349,212) | |
Retained earnings | 607,733 | 594,625 | |
Accumulated other comprehensive loss | (7,274) | (9,940) | |
TOTAL SHAREHOLDERS' EQUITY | 749,644 | 769,063 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 1,029,465 | $ 1,079,616 | |
[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 27, 2020 and June 29, 2019 . |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 27, 2020 | Sep. 28, 2019 |
Consolidated Balance Sheets Parenthetical [Abstract] | ||
Allowance for doubtful accounts and notes receivable | $ 1,306 | $ 597 |
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 | 85,364,000 | 85,364,000 |
Common stock, shares outstanding | 61,925,000 | 63,172,000 |
Treasury stock, shares | 23,439,000 | 22,192,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 27, 2020 | Jun. 29, 2019 | Jun. 27, 2020 | Jun. 29, 2019 | |
Revenues | $ 150,450 | $ 127,109 | $ 445,488 | $ 400,225 |
Cost of sales | 81,027 | 68,329 | 236,398 | 211,073 |
Gross profit | 69,423 | 58,780 | 209,090 | 189,152 |
Selling, general and administrative | 27,905 | 28,724 | 85,723 | 87,626 |
Research and development | 30,547 | 28,229 | 87,906 | 87,609 |
Operating expenses | 58,452 | 56,953 | 173,629 | 175,235 |
Income from operations | 10,971 | 1,827 | 35,461 | 13,917 |
Interest income | 1,374 | 3,956 | 6,888 | 11,647 |
Interest expense | (446) | (632) | (1,690) | (1,137) |
Income before income taxes | 11,899 | 5,151 | 40,659 | 24,427 |
Provision for income taxes | 690 | 3,864 | 3,985 | 19,106 |
Share of results of equity-method investee, net of tax | 58 | 0 | 158 | 72 |
Net income | $ 11,151 | $ 1,287 | $ 36,516 | $ 5,249 |
Net income per share: | ||||
Basic (in dollars per share) | $ 0.18 | $ 0.02 | $ 0.58 | $ 0.08 |
Diluted (in dollars per share) | $ 0.18 | $ 0.02 | $ 0.57 | $ 0.08 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 62,313 | 64,683 | 63,200 | 65,914 |
Diluted (in shares) | 62,833 | 65,431 | 63,755 | 66,597 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 27, 2020 | Jun. 29, 2019 | Jun. 27, 2020 | Jun. 29, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 11,151 | $ 1,287 | $ 36,516 | $ 5,249 |
Other comprehensive income/(loss): | ||||
Foreign currency translation adjustment | 745 | (42) | 2,424 | (1,430) |
Unrecognized actuarial loss on pension plan, net of tax | (5) | (31) | (71) | (9) |
Foreign currency translation and pension plan, net of tax | 740 | (73) | 2,353 | (1,439) |
Derivatives designated as hedging instruments: | ||||
Unrealized gain/(loss) on derivative instruments, net of tax | 1,034 | (49) | (340) | 39 |
Reclassification adjustment for gain on derivative instruments recognized, net of tax | 384 | 33 | 653 | 1,165 |
Net increase/(decrease) from derivatives designated as hedging instruments, net of tax | 1,418 | (16) | 313 | 1,204 |
Total other comprehensive gain/(loss) | 2,158 | (89) | 2,666 | (235) |
Comprehensive income | $ 13,309 | $ 1,198 | $ 39,182 | $ 5,014 |
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 | $ 534 | $ 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 equity-based compensation | 0 | ||||
Equity-based compensation | 3,678 | $ 3,678 | |||
Cash dividend declared | (8,055) | (8,055) | |||
Net income | 7,517 | 7,517 | |||
Other comprehensive income | (182) | (182) | |||
Total comprehensive income | 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] | |||||
Net income | 5,249 | ||||
Other comprehensive income | (235) | ||||
Total comprehensive income | 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 equity-based compensation | 0 | ||||
Equity-based compensation | 3,107 | $ 3,107 | |||
Cash dividend declared | (8,057) | (8,057) | |||
Net income | (3,555) | (3,555) | |||
Other comprehensive income | 37 | 37 | |||
Total comprehensive income | (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) | (1,538) | ||||
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 equity-based compensation | 0 | ||||
Equity-based compensation | 3,375 | $ 3,375 | |||
Cash dividend declared | (7,397) | ||||
Net income | 1,287 | 1,287 | |||
Other comprehensive income | (89) | (89) | |||
Total comprehensive income | 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) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative effect of accounting changes | (769) | (769) | |||
Beginning balance at Sep. 28, 2019 | 769,063 | $ 533,590 | (349,212) | 594,625 | (9,940) |
Beginning balance (shares) at Sep. 28, 2019 | 63,173 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of stock for services rendered (shares) | 9 | ||||
Issuance of stock for services rendered | 222 | $ 131 | 91 | ||
Repurchase of common stock (shares) | (224) | ||||
Repurchase of common stock | (5,369) | (5,369) | |||
Issuance of shares for market-based restricted stock and time-based restricted stock (shares) | 800 | ||||
Stock Issued During Period, Value, Treasury Stock Reissued | $ (7,653) | 7,653 | |||
Issuance of shares for equity-based compensation | 0 | ||||
Equity-based compensation | 3,387 | $ 3,387 | |||
Cash dividend declared | (7,651) | (7,651) | |||
Net income | 13,477 | 13,477 | |||
Other comprehensive income | 3,293 | 3,293 | |||
Total comprehensive income | 16,770 | 13,477 | 3,293 | ||
Ending balance (shares) at Dec. 28, 2019 | 63,758 | ||||
Ending balance at Dec. 28, 2019 | 775,653 | $ 529,455 | (346,837) | 599,682 | (6,647) |
Beginning balance at Sep. 28, 2019 | $ 769,063 | $ 533,590 | (349,212) | 594,625 | (9,940) |
Beginning balance (shares) at Sep. 28, 2019 | 63,173 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Repurchase of common stock (shares) | (2,100) | ||||
Repurchase of common stock | $ (46,200) | ||||
Net income | 36,516 | ||||
Other comprehensive income | 2,666 | ||||
Total comprehensive income | 39,182 | ||||
Ending balance (shares) at Jun. 27, 2020 | 61,925 | ||||
Ending balance at Jun. 27, 2020 | 749,644 | $ 536,487 | (387,302) | 607,733 | (7,274) |
Beginning balance at Dec. 28, 2019 | 775,653 | $ 529,455 | (346,837) | 599,682 | (6,647) |
Beginning balance (shares) at Dec. 28, 2019 | 63,758 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of stock for services rendered (shares) | 8 | ||||
Issuance of stock for services rendered | 221 | $ 142 | 79 | ||
Repurchase of common stock (shares) | (872) | ||||
Repurchase of common stock | (18,522) | (18,522) | |||
Issuance of shares for market-based restricted stock and time-based restricted stock (shares) | 19 | ||||
Stock Issued During Period, Value, Treasury Stock Reissued | $ (185) | 185 | |||
Issuance of shares for equity-based compensation | 0 | ||||
Equity-based compensation | 3,500 | $ 3,500 | |||
Cash dividend declared | (7,557) | (7,557) | |||
Net income | 11,888 | 11,888 | |||
Other comprehensive income | (2,785) | (2,785) | |||
Total comprehensive income | 9,103 | 11,888 | (2,785) | ||
Ending balance (shares) at Mar. 28, 2020 | 62,913 | ||||
Ending balance at Mar. 28, 2020 | 762,398 | $ 532,912 | (365,095) | 604,013 | (9,432) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of stock for services rendered (shares) | 9 | ||||
Issuance of stock for services rendered | $ 186 | $ 102 | 84 | ||
Repurchase of common stock (shares) | (1,000) | (1,004) | |||
Repurchase of common stock | $ (22,358) | (22,358) | |||
Issuance of shares for market-based restricted stock and time-based restricted stock (shares) | 7 | ||||
Stock Issued During Period, Value, Treasury Stock Reissued | $ (67) | 67 | |||
Issuance of shares for equity-based compensation | 0 | ||||
Equity-based compensation | 3,540 | $ 3,540 | |||
Cash dividend declared | (7,431) | (7,431) | |||
Net income | 11,151 | 11,151 | |||
Other comprehensive income | 2,158 | 2,158 | |||
Total comprehensive income | 13,309 | 11,151 | 2,158 | ||
Ending balance (shares) at Jun. 27, 2020 | 61,925 | ||||
Ending balance at Jun. 27, 2020 | $ 749,644 | $ 536,487 | $ (387,302) | $ 607,733 | $ (7,274) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 27, 2020 | Jun. 29, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 36,516 | $ 5,249 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 14,597 | 15,001 |
Equity-based compensation and employee benefits | 11,056 | 10,772 |
Adjustment for doubtful accounts | 709 | (385) |
Adjustment for inventory valuation | 3,197 | 2,059 |
Deferred income taxes | 360 | 2,450 |
Loss/(gain) on disposal of property, plant and equipment | 860 | (19) |
Unrealized foreign currency translation | 909 | 117 |
Share of results of equity-method investee | 158 | 72 |
Changes in operating assets and liabilities: | ||
Accounts and other receivable | (122) | 92,696 |
Inventories | (28,013) | 15,960 |
Prepaid expenses and other current assets | 1,697 | (10,623) |
Accounts payable, accrued expenses and other current liabilities | 25,903 | (48,148) |
Income tax payable | (5,428) | (3,655) |
Other, net | 282 | 1,635 |
Net cash provided by operating activities | 62,681 | 83,181 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | (7,849) | (9,665) |
Proceeds from sales of property, plant and equipment | 0 | 39 |
Purchase of equity investments | (1,288) | (5,000) |
Purchase of short-term investments | (234,000) | (489,000) |
Maturity of short-term investments | 269,000 | 534,000 |
Net cash provided by investing activities | 25,863 | 30,374 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payment on debts | (147,143) | (574) |
Payment for finance lease | (67) | 0 |
Repurchase of common stock | (46,851) | (85,469) |
Common stock cash dividends paid | (22,796) | (23,902) |
Proceeds from short-term debt | 86,239 | 71,194 |
Net cash used in financing activities | (130,618) | (38,751) |
Effect of exchange rate changes on cash and cash equivalents | (335) | 60 |
Changes in cash, cash equivalents and restricted cash | (42,409) | 74,864 |
Cash, cash equivalents and restricted cash at beginning of period | 364,184 | 321,148 |
Cash, cash equivalents and restricted cash at end of period | 321,775 | 396,012 |
CASH PAID FOR: | ||
Interest Paid, Excluding Capitalized Interest, Operating Activities | 1,690 | 747 |
Income taxes, net of refunds | $ 10,088 | $ 21,373 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Jun. 27, 2020 | |
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 28, 2019, filed with the Securities and Exchange Commission, which includes Consolidated Balance Sheets as of September 28, 2019 and September 29, 2018, 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 28, 2019. 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 2020 quarters end on December 28, 2019, March 28, 2020, June 27, 2020 and October 3, 2020. In fiscal years consisting of 53 weeks, the fourth quarter will consist of 14 weeks. Fiscal 2019 quarters ended on December 29, 2018, March 30, 2019, June 29, 2019 and September 28, 2019. 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, income taxes, 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. Due to the Coronavirus (“COVID-19”) pandemic, there has been uncertainty and disruption in the global economy and financial markets. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of June 27, 2020 . While there was not a material impact to our consolidated financial statements as of and for the quarter ended June 27, 2020 , these estimates may change, as new events occur and additional information is obtained, as well as other factors related to COVID-19 that could result in material impacts to our consolidated financial statements in future reporting periods. Vulnerability to Certain Concentrations Financial instruments which may subject the Company to concentrations of credit risk as of June 27, 2020 and September 28, 2019 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, including as a result of COVID-19. 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). The tax effect of currency translation adjustments related to unremitted foreign earnings no longer deemed to be indefinitely reinvested outside the U.S. is reflected in the determination of the Company’s net income or other comprehensive income (“OCI”). 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, including as a result of COVID-19, 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, including as a result of COVID-19, 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 27, 2020 , 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 impairment test is unnecessary. However, if a company concludes otherwise, then it is required to perform the goodwill impairment test. Following the Company's early adoption of ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment in the third quarter of fiscal 2017, the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment (i.e. step 2 of the goodwill impairment test) was eliminated. Accordingly, the Company's impairment test is performed by comparing the fair value of a reporting unit with its carrying value, and determining if the carrying amount exceeds its fair value. 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 equipment 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 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 27, 2020 , and June 29, 2019 , 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 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 expected, on a more likely than not basis, to be realized. While the Company has considered future taxable income and 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 deferred tax assets 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 deferred tax assets in the future, an adjustment to deferred tax assets would decrease income in the period when such determination is made. The Company determines the amount of unrecognized tax benefit with respect to uncertain tax positions taken or expected to be taken on its income tax returns in accordance with ASC No. 740 Topic 10, Income Taxes, General (“ASC 740.10”). 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 10 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 income taxes, 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 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 , which 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. We adopted these ASUs utilizing the modified retrospective transition method through a cumulative-effect adjustment at the beginning of the first quarter of fiscal 2020. In addition, we elected 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. Additionally, the lease previously identified as build-to-suit leasing arrangement under legacy lease accounting (ASC 840), was derecognized pursuant to the transition guidance provided for build-to-suit leases in ASC 842 (see Note 9 below). Accordingly, the lease has been reassessed as an operating lease as of the adoption date under ASC 842, and is included on the Consolidated Condensed Balance Sheets. The adoption of these ASUs has resulted in an increase of approximately $23.8 million in operating lease liabilities and $22.2 million in right-of-use assets, decrease of approximately $14.5 million in financing obligation, decrease of approximately $15.3 million in property, plant and equipment, and an adjustment of $0.8 million to retained earnings after income tax effects on our Consolidated Condensed Balance Sheets. 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 consolidated condensed 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. We adopted this ASU as of the beginning of the first quarter of 2020. The adoption of this ASU did not have a material impact on our consolidated condensed 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 recogni |
BALANCE SHEET COMPONENTS
BALANCE SHEET COMPONENTS | 9 Months Ended |
Jun. 27, 2020 | |
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 27, 2020 and September 28, 2019 : As of (in thousands) June 27, 2020 September 28, 2019 Short-term investments, available-for-sale (1) $ 194,000 $ 229,000 Inventories, net: Raw materials and supplies $ 63,878 $ 52,853 Work in process 41,757 32,026 Finished goods 39,663 33,742 145,298 118,621 Inventory reserves (31,104 ) (29,313 ) $ 114,194 $ 89,308 Property, plant and equipment, net: Land $ 2,182 $ 2,182 Buildings and building improvements 22,542 41,961 Leasehold improvements 22,812 24,441 Data processing equipment and software 37,760 36,302 Machinery, equipment, furniture and fixtures 76,589 71,465 Construction in progress 6,578 6,512 168,463 182,863 Accumulated depreciation (112,637 ) (110,493 ) $ 55,826 $ 72,370 Accrued expenses and other current liabilities: Accrued customer obligations (2) $ 25,322 $ 26,292 Wages and benefits 31,074 18,188 Dividend payable 7,431 7,582 Commissions and professional fees 2,486 2,024 Deferred rent — 1,721 Severance 494 1,500 Other 7,817 7,226 $ 74,624 $ 64,533 (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 27, 2020 and June 29, 2019 . (2) 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. 27, 2020 | |
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 from 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 2019 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 27, 2020 , 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. While we have concluded that a triggering event did not occur during the quarter ended June 27, 2020 , a prolonged COVID-19 pandemic could impact the results of operations due to changes to assumptions utilized in the determination of the estimated fair values of the reporting units that could be significant enough to trigger an impairment. Net sales and earnings growth rates could be negatively impacted by reductions or changes in demand for our products. The discount rate utilized in our valuation model could also be impacted by changes in the underlying interest rates and risk premiums included in the determination of the cost of capital. The following table summarizes the Company's recorded goodwill by reporting segments as of June 27, 2020 and September 28, 2019 : As of (in thousands) June 27, 2020 September 28, 2019 Capital Equipment $ 29,765 $ 29,480 Aftermarket Products and Services ("APS") 26,288 26,211 Total goodwill $ 56,053 $ 55,691 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 27, 2020 and September 28, 2019 : As of Average estimated (dollar amounts in thousands) June 27, 2020 September 28, 2019 useful lives (in years) Developed technology $ 88,591 $ 87,209 7.0 to 15.0 Accumulated amortization (52,327 ) (48,718 ) Net developed technology $ 36,264 $ 38,491 Customer relationships $ 35,586 $ 35,180 5.0 to 6.0 Accumulated amortization (34,218 ) (31,862 ) Net customer relationships $ 1,368 $ 3,318 Trade and brand names $ 7,285 $ 7,219 7.0 to 8.0 Accumulated amortization (6,710 ) (6,377 ) Net trade and brand names $ 575 $ 842 Other intangible assets $ 2,500 $ 2,500 1.9 Accumulated amortization (2,500 ) (2,500 ) Net other intangible assets $ — $ — Net intangible assets $ 38,207 $ 42,651 The following table reflects estimated annual amortization expense related to intangible assets as of June 27, 2020 : As of (in thousands) June 27, 2020 Remaining fiscal 2020 $ 1,845 Fiscal 2021 5,346 Fiscal 2022 4,380 Fiscal 2023 4,284 Fiscal 2024 4,284 Thereafter 18,068 Total amortization expense $ 38,207 |
CASH, CASH EQUIVALENTS, RESTRIC
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND SHORT-TERM INVESTMENTS | 9 Months Ended |
Jun. 27, 2020 | |
Cash and Cash Equivalents [Abstract] | |
CASH AND CASH EQUIVALENTS | CASH, CASH EQUIVALENTS, 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, and short-term investments consisted of the following as of June 27, 2020 : (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Current assets: Cash $ 165,213 $ — $ — $ 165,213 Cash equivalents: Money market funds (1) 126,555 — — 126,555 Time deposits (2) 30,007 — — 30,007 Total cash and cash equivalents $ 321,775 $ — $ — $ 321,775 Short-term investments (2) : Time deposits 95,000 — — 95,000 Deposits (3) 99,000 — — 99,000 Total short-term investments $ 194,000 $ — $ — $ 194,000 Total cash, cash equivalents and short-term investments $ 515,775 $ — $ — $ 515,775 (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 and short-term investments consisted of the following as of September 28, 2019 : (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Current assets: Cash $ 201,005 $ — $ — $ 201,005 Cash equivalents: Money market funds (1) 163,172 — — 163,172 Time deposits (2) 7 — — 7 Total cash and cash equivalents $ 364,184 $ — $ — $ 364,184 Short-term investments (2) : Time deposits 130,000 — — 130,000 Deposits (3) 99,000 — — 99,000 Total short-term investments $ 229,000 $ — $ — $ 229,000 Total cash, cash equivalents and short-term investments $ 593,184 $ — $ — $ 593,184 (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. 27, 2020 | |
Equity Method Investments [Abstract] | |
EQUITY INVESTMENTS | EQUITY INVESTMENTS Equity investments consisted of the following as of June 27, 2020 and September 28, 2019 : As of (in thousands) June 27, 2020 September 28, 2019 Non-marketable equity securities (1) $ 6,275 $ 5,000 Equity method investments 1,092 1,250 Total equity investments $ 7,367 $ 6,250 (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 27, 2020 , there was no impairment or adjustment to the observable price. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Jun. 27, 2020 | |
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 27, 2020 . 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. 27, 2020 | |
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 is 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 27, 2020 and September 28, 2019 was as follows: As of June 27, 2020 September 28, 2019 (in thousands) Notional Amount Fair Value (Liability) Derivatives (1) Notional Amount Fair Value (Liability) Derivatives (1) Derivatives designated as hedging instruments: Foreign exchange forward contracts (2) $ 37,383 $ (284 ) $ 33,834 $ (597 ) Total derivatives $ 37,383 $ (284 ) $ 33,834 $ (597 ) (1) 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. (2) 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 27, 2020 and June 29, 2019 are as follows: Three months ended Nine months ended (in thousands) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Foreign exchange forward contract in cash flow hedging relationships: Net gain/(loss) recognized in OCI, net of tax (1) $ 1,034 $ (49 ) $ (340 ) $ 39 Net loss reclassified from accumulated OCI into income, net of tax (2) $ (384 ) $ (33 ) $ (653 ) $ (1,165 ) (1) Net change in the fair value of the effective portion classified in OCI. (2) |
LEASES
LEASES | 9 Months Ended |
Jun. 27, 2020 | |
Leases [Abstract] | |
Leases | LEASES We have entered into various non-cancellable operating and finance lease agreements for certain of our offices, manufacturing, technology, sales support and service centers, equipment, and vehicles. We determine if an arrangement is a lease, or contains a lease, at inception and record the leases in our financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor. Our lease terms may include one or more options to extend the lease terms, for periods from one year to 20 years , when it is reasonably certain that we will exercise that option. As of June 27, 2020 , one option to extend the lease was recognized as a right-of-use ("ROU") asset, and a lease liability. We have lease agreements with lease and non-lease components, and non-lease components are accounted for separately and not included in our leased assets and corresponding liabilities. We have elected not to present short-term leases on the Consolidated Condensed Balance Sheet as these leases have a lease term of 12 months or less at lease inception. Operating leases are included in operating ROU assets, current operating lease liabilities and non current operating lease liabilities, and finance leases are in included in property, plant and equipment, accrued expenses and other current liabilities, and other liabilities on the Consolidated Condensed Balance Sheet. As of June 27, 2020 , our finance leases are not material. The following table shows the components of lease expense: Three months ended Nine months ended (in thousands) June 27, 2020 June 27, 2020 Operating lease expense (1) $ (1,646 ) $ (5,030 ) (1) Operating lease expense includes short-term lease expense, which is immaterial for the three and nine months ended June 27, 2020 . The following table shows the cash flows arising from lease transactions. Cash payments related to short-term leases are not included in the measurement of operating and finance lease liabilities, and, as such, are excluded from the amounts below: Nine months ended (in thousands) June 27, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 4,677 The following table shows the weighted-average lease terms and discount rates for operating leases: As of June 27, 2020 Operating leases: Weighted-average remaining lease term (in years) : 4.7 Weighted-average discount rate: 4.6 % Future lease payments, excluding short-term leases, as of June 27, 2020 , are detailed as follows: (in thousands) Operating leases Remainder of 2020 $ 1,658 2021 6,288 2022 5,635 2023 5,420 2024 2,985 Thereafter 4,385 Total minimum lease payments 26,371 Less: Interest 2,776 Present value of lease obligations 23,595 Less: Current portion 5,471 Long-term portion of lease obligations $ 18,124 Future lease payments under operating leases prior to adoption ASC 842 were as follows: Payments due by fiscal year (in thousands) Total 2020 2021 2022 2023 2024 Thereafter Operating lease obligations (1) $ 16,273 $ 4,089 $ 2,576 $ 2,182 $ 1,967 $ 1,822 $ 3,637 (1) Pursuant to ASC No. 840, Leases ("ASC 840") , for lessee's involvement in asset construction, the Company was considered to be the owner of the Building (as defined in Note 9 below) during the construction phase due to its involvement in the asset construction. As a result of the Company's continued involvement during the lease term, the Company did not fulfill the criteria to apply sale-leaseback accounting under ASC 840. Therefore, at completion of construction, the Building remained on the Consolidated Condensed Balance Sheet, and the corresponding financing obligation was reclassified to long-term liability. As of September 28, 2019, we recorded a financing obligation related to the Building of $15.0 million (see Note 9 below). The financing obligation is not reflected in the table above. |
DEBT AND OTHER OBLIGATIONS DEBT
DEBT AND OTHER OBLIGATIONS DEBT AND OTHER OBLIGATIONS (Notes) | 9 Months Ended |
Jun. 27, 2020 | |
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 two 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 legacy ASC No. 840, Leases ("ASC 840"), we have classified the Building (build-to-suit leasing arrangement) on our Consolidated Condensed 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 Consolidated Condensed Balance Sheet was $20.0 million , which was based on an interest rate of 6.3% over the Initial Term. As of September 28, 2019 , the financing obligation related to the Building was $15.0 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. The build-to-suit leasing arrangement was derecognized pursuant to the transition guidance provided in ASC 842, which was effective beginning with the first quarter of 2020. Accordingly, the lease has been reassessed as an operating lease as of the adoption date under ASC 842, and is included on the Consolidated Condensed Balance Sheet. The adoption has resulted in a decrease of approximately $14.5 million in financing obligation, decrease of approximately $15.3 million in property, plant and equipment, and an adjustment of $0.8 million to retained earnings after income tax effects on our Consolidated Condensed Balance Sheet. 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 27, 2020 , the outstanding amount under this facility was $3.2 million . Credit Facilities 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 $150.0 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 27, 2020 , there were no outstanding amounts under the Overdraft Facility. |
SHAREHOLDERS' EQUITY AND EMPLOY
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS | 9 Months Ended |
Jun. 27, 2020 | |
Share-based Payment Arrangement [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 27, 2020 and June 29, 2019 : Three months ended Nine months ended (in thousands) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Cash $ 410 $ 428 $ 1,119 $ 1,291 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. In 2018 and 2019, the Board of Directors increased the share repurchase authorization under the Program to $200 million and $300 million , respectively. 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 27, 2020 , the Company repurchased a total of 1.0 million and 2.1 million shares of common stock under the Program at a cost of $22.4 million and $46.2 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 27, 2020 , our remaining stock repurchase authorization under the Program was approximately $50.9 million . On July 3, 2020, the Board of Directors increased the share repurchase authorization under the Company’s existing share repurchase program by an additional $100 million to $400 million , and extended its duration through August 1, 2022. Dividends On May 29, 2020, February 20, 2020 and December 12, 2019, 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 27, 2020 totaled $7.6 million and $22.8 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 shareholders. Accumulated Other Comprehensive Income The following table reflects accumulated other comprehensive loss reflected on the Consolidated Condensed Balance Sheets as of June 27, 2020 and September 28, 2019 : As of (in thousands) June 27, 2020 September 28, 2019 Loss from foreign currency translation adjustments $ (5,321 ) $ (7,745 ) Unrecognized actuarial loss on pension plan, net of tax (1,669 ) (1,598 ) Unrealized loss on hedging (284 ) (597 ) Accumulated other comprehensive loss $ (7,274 ) $ (9,940 ) 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 27, 2020 , 3.4 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. • Relative TSR Performance Share Units ("Relative TSR PSUs") entitle 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. • 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. • Special/Growth Performance Share Units (“Special/Growth PSUs”) entitle 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 27, 2020 and June 29, 2019 was based upon awards ultimately expected to vest, with forfeitures 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 27, 2020 and June 29, 2019 : Three months ended Nine months ended (shares in thousands) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Time-based RSUs 13 2 490 521 Relative TSR PSUs 5 1 163 166 Special/Growth PSUs 2 1 75 56 Common stock 9 10 26 28 Equity-based compensation in shares 29 14 754 771 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 27, 2020 and June 29, 2019 : Three months ended Nine months ended (in thousands) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Cost of sales $ 182 $ 161 $ 597 $ 471 Selling, general and administrative 2,676 2,616 8,106 7,871 Research and development 867 820 2,353 2,430 Total equity-based compensation expense $ 3,725 $ 3,597 $ 11,056 $ 10,772 The following table reflects equity-based compensation expense, by type of award, for the three and nine months ended June 27, 2020 and June 29, 2019 : Three months ended Nine months ended (in thousands) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Time-based RSUs $ 2,366 $ 2,182 $ 7,130 $ 6,455 Relative TSR PSUs 908 1,020 2,210 3,213 Special/Growth PSUs 266 173 1,087 492 Common stock 185 222 629 612 Total equity-based compensation expense $ 3,725 $ 3,597 $ 11,056 $ 10,772 |
REVENUE AND CONTRACT LIABILITIE
REVENUE AND CONTRACT LIABILITIES | 9 Months Ended |
Jun. 27, 2020 | |
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 27, 2020 , and June 29, 2019 , the service revenue is not material. Please refer to Note 1: Basis of Presentation - Revenue Recognition , for disclosure on the Company's revenue recognition and Note 14: Segment Information for disclosure of revenue by reportable segment and 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 27, 2020 and March 30, 2019: Three months ended Nine months ended (in thousands) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Contract liabilities, beginning of period $ 10,358 $ 581 $ 1,896 $ 997 Revenue recognized (13,401 ) (1,392 ) (19,218 ) (6,909 ) Additions 5,245 1,806 19,524 6,907 Contract liabilities, end of period $ 2,202 $ 995 $ 2,202 $ 995 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Jun. 27, 2020 | |
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 27, 2020 and June 29, 2019 : Three months ended (in thousands, except per share data) June 27, 2020 June 29, 2019 Basic Diluted Basic Diluted NUMERATOR: Net income $ 11,151 $ 11,151 $ 1,287 $ 1,287 DENOMINATOR: Weighted average shares outstanding - Basic 62,313 62,313 64,683 64,683 Dilutive effect of Equity Plans 520 748 Weighted average shares outstanding - Diluted 62,833 65,431 EPS: Net income per share - Basic $ 0.18 $ 0.18 $ 0.02 $ 0.02 Effect of dilutive shares — — Net income per share - Diluted $ 0.18 $ 0.02 Nine months ended (in thousands, except per share data) June 27, 2020 June 29, 2019 Basic Diluted Basic Diluted NUMERATOR: Net income $ 36,516 $ 36,516 $ 5,249 $ 5,249 DENOMINATOR: Weighted average shares outstanding - Basic 63,200 63,200 65,914 65,914 Dilutive effect of Equity Plans 555 683 Weighted average shares outstanding - Diluted 63,755 66,597 EPS: Net income per share - Basic $ 0.58 $ 0.58 $ 0.08 $ 0.08 Effect of dilutive shares (0.01 ) — Net income per share - Diluted $ 0.57 $ 0.08 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Jun. 27, 2020 | |
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 27, 2020 and June 29, 2019 : Three months ended Nine months ended (dollar amounts in thousands) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Provision for income taxes $ 690 $ 3,864 $ 3,985 $ 19,106 Effective tax rate 5.8 % 75.0 % 9.8 % 78.2 % The decrease in provision for income taxes and in the effective tax rate for the three months ended June 27, 2020 as compared to the three months ended June 29, 2019 is primarily related to reversal of valuation allowances recorded against certain tax credits and loss carryforwards due to an increase in profitability in the corresponding jurisdictions in fiscal 2020. The decrease in provision for income taxes and the effective tax rate for the nine months ended June 27, 2020 as compared to the nine months ended June 29, 2019 is primarily related to reversal of valuation allowances recorded against certain tax credits and loss carryforwards due to an increase in profitability in the corresponding jurisdictions in fiscal 2020 and $10.2 million of provision for income taxes recorded in the first and second quarter of fiscal 2019 as an adjustment to the U.S. one-time transition tax resulting from the enactment of the TCJA. For the nine months ended June 27, 2020 , the effective tax rate is lower than the U.S. federal statutory tax rate primarily due to tax benefits from foreign income earned in lower tax jurisdictions, tax incentives, and tax credits, partially offset by the foreign minimum tax, deemed dividends, valuation allowances recorded against certain loss carryforwards, foreign withholding taxes, and tax liabilities from foreign operations. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Jun. 27, 2020 | |
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 (the “CODM”) in deciding how to allocate resources and to assess performance. The Company's Chief Executive Officer is the Company's CODM. The CODM 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 27, 2020 and June 29, 2019 : Three months ended Nine months ended (in thousands) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Net revenue: Capital Equipment $ 111,436 $ 89,860 $ 326,982 $ 286,364 APS 39,014 37,249 118,506 113,861 Net revenue 150,450 127,109 445,488 400,225 Income/(loss) from operations: Capital Equipment 1,045 (6,449 ) 7,815 (10,563 ) APS 9,926 8,276 27,646 24,480 Income from operations $ 10,971 $ 1,827 $ 35,461 $ 13,917 We have considered (1) information that is regularly reviewed by our CODM as defined by the authoritative guidance on segment reporting, in evaluating financial performance and (2) other financial data, including information that we include in our earnings releases but which is not included in our financial statements, to disaggregate revenues by end markets served. The principal category we use to disaggregate revenues is by the end markets served in the Capital Equipment segment. The following table reflects net revenue by Capital Equipment end markets served for the three and nine months ended June 27, 2020 and June 29, 2019 : Three months ended Nine months ended (in thousands) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 General Semiconductor $ 51,103 $ 50,040 $ 168,937 $ 120,694 Automotive & Industrial 8,135 16,259 46,906 61,735 LED 36,135 15,194 58,193 39,730 Memory 5,618 2,501 25,471 41,813 Advanced Packaging 10,445 5,866 27,475 22,392 Total Capital Equipment revenue $ 111,436 $ 89,860 $ 326,982 $ 286,364 The following table reflects capital expenditures, depreciation expense and amortization expense for the three and nine months ended June 27, 2020 and June 29, 2019 . Three months ended Nine months ended (in thousands) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Capital expenditures: Capital Equipment $ 1,329 $ 646 $ 3,215 $ 4,118 APS 2,122 1,490 5,335 5,194 $ 3,451 $ 2,136 $ 8,550 $ 9,312 Depreciation expense: Capital Equipment $ 1,713 $ 1,800 $ 4,747 $ 5,540 APS 1,542 1,352 4,399 3,872 $ 3,255 $ 3,152 $ 9,146 $ 9,412 Amortization expense: Capital Equipment $ 973 $ 989 $ 2,925 $ 2,999 APS 841 854 2,526 2,590 $ 1,814 $ 1,843 $ 5,451 $ 5,589 |
COMMITMENTS, CONTINGENCIES AND
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Notes) | 9 Months Ended |
Jun. 27, 2020 | |
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 27, 2020 and June 29, 2019 : Three months ended Nine months ended (in thousands) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Reserve for warranty, beginning of period $ 14,368 $ 13,885 $ 14,185 $ 14,475 Provision for warranty 3,331 3,143 9,749 8,874 Utilization of reserve (3,189 ) (3,073 ) (9,424 ) (9,394 ) Reserve for warranty, end of period $ 14,510 $ 13,955 $ 14,510 $ 13,955 Other Commitments and Contingencies The following table reflects obligations not reflected on the Consolidated Condensed Balance Sheet as of June 27, 2020 : Payments due by fiscal year (in thousands) Total 2020 2021 2022 2023 2024 thereafter Inventory purchase obligation (1) $ 125,803 $ 125,803 $ — $ — $ — $ — $ — (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. Concentrations The following table reflects significant customer concentrations as a percentage of net revenue for the nine months ended June 27, 2020 and June 29, 2019 : Nine months ended June 27, 2020 June 29, 2019 Micron Technology, Inc. * 10.9 % * 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 27, 2020 and June 29, 2019 : As of June 27, 2020 June 29, 2019 Xinye (HK) Electronics. Co (1) 14.9 % * Haoseng Industrial Company Limited (1) 13.1 % * Super Power International (1) * 15.8 % Forehope Electronic (Ningbo) Co Ltd * 14.4 % Micron Technology, Inc. * 10.2 % (1) Distributor of the Company's products. * Represented less than 10% of total accounts receivable |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Jun. 27, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS On July 3, 2020, the Board of Directors increased the share repurchase authorization under the Company’s existing share repurchase program by an additional $100 million to $400 million , and extended its duration through August 1, 2022. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Jun. 27, 2020 | |
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 28, 2019, filed with the Securities and Exchange Commission, which includes Consolidated Balance Sheets as of September 28, 2019 and September 29, 2018, 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 28, 2019. 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, income taxes, 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. Due to the Coronavirus (“COVID-19”) pandemic, there has been uncertainty and disruption in the global economy and financial markets. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of June 27, 2020 . While there was not a material impact to our consolidated financial statements as of and for the quarter ended June 27, 2020 , these estimates may change, as new events occur and additional information is obtained, as well as other factors related to COVID-19 that could result in material impacts to our consolidated financial statements in future reporting periods. |
Vulnerability to Certain Concentrations | Vulnerability to Certain Concentrations Financial instruments which may subject the Company to concentrations of credit risk as of June 27, 2020 and September 28, 2019 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, including as a result of COVID-19. 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). The tax effect of currency translation adjustments related to unremitted foreign earnings no longer deemed to be indefinitely reinvested outside the U.S. is reflected in the determination of the Company’s net income or other comprehensive income (“OCI”). 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, including as a result of COVID-19, 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, including as a result of COVID-19, 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 27, 2020 |
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 impairment test is unnecessary. However, if a company concludes otherwise, then it is required to perform the goodwill impairment test. Following the Company's early adoption of ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment in the third quarter of fiscal 2017, the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment (i.e. step 2 of the goodwill impairment test) was eliminated. Accordingly, the Company's impairment test is performed by comparing the fair value of a reporting unit with its carrying value, and determining if the carrying amount exceeds its fair value. 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 equipment 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 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 27, 2020 , and June 29, 2019 , 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 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 expected, on a more likely than not basis, to be realized. While the Company has considered future taxable income and 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 deferred tax assets 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 deferred tax assets in the future, an adjustment to deferred tax assets would decrease income in the period when such determination is made. The Company determines the amount of unrecognized tax benefit with respect to uncertain tax positions taken or expected to be taken on its income tax returns in accordance with ASC No. 740 Topic 10, Income Taxes, General (“ASC 740.10”). 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 10 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 |
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 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 , which 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. We adopted these ASUs utilizing the modified retrospective transition method through a cumulative-effect adjustment at the beginning of the first quarter of fiscal 2020. In addition, we elected 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. Additionally, the lease previously identified as build-to-suit leasing arrangement under legacy lease accounting (ASC 840), was derecognized pursuant to the transition guidance provided for build-to-suit leases in ASC 842 (see Note 9 below). Accordingly, the lease has been reassessed as an operating lease as of the adoption date under ASC 842, and is included on the Consolidated Condensed Balance Sheets. The adoption of these ASUs has resulted in an increase of approximately $23.8 million in operating lease liabilities and $22.2 million in right-of-use assets, decrease of approximately $14.5 million in financing obligation, decrease of approximately $15.3 million in property, plant and equipment, and an adjustment of $0.8 million to retained earnings after income tax effects on our Consolidated Condensed Balance Sheets. 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 consolidated condensed 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. We adopted this ASU as of the beginning of the first quarter of 2020. The adoption of this ASU did not have a material impact on our consolidated condensed 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 consolidated condensed financial statements. Income Taxes In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income , which allows for a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act (the “TCJA”) and requires entities to provide certain disclosures regarding these stranded tax effects, if any. We adopted this ASU in the first quarter of 2020. The adoption did not have a material impact on our consolidated condensed financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740). The amendments in this ASU simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and clarify and amend existing guidance. This ASU will be effective for us in the first quarter of 2022 with early adoption permitted. We are currently evaluating the timing and the effects of the adoption of this ASU on our consolidated condensed financial statements. |
BALANCE SHEET COMPONENTS (Table
BALANCE SHEET COMPONENTS (Tables) | 9 Months Ended |
Jun. 27, 2020 | |
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 27, 2020 and September 28, 2019 : As of (in thousands) June 27, 2020 September 28, 2019 Short-term investments, available-for-sale (1) $ 194,000 $ 229,000 Inventories, net: Raw materials and supplies $ 63,878 $ 52,853 Work in process 41,757 32,026 Finished goods 39,663 33,742 145,298 118,621 Inventory reserves (31,104 ) (29,313 ) $ 114,194 $ 89,308 Property, plant and equipment, net: Land $ 2,182 $ 2,182 Buildings and building improvements 22,542 41,961 Leasehold improvements 22,812 24,441 Data processing equipment and software 37,760 36,302 Machinery, equipment, furniture and fixtures 76,589 71,465 Construction in progress 6,578 6,512 168,463 182,863 Accumulated depreciation (112,637 ) (110,493 ) $ 55,826 $ 72,370 Accrued expenses and other current liabilities: Accrued customer obligations (2) $ 25,322 $ 26,292 Wages and benefits 31,074 18,188 Dividend payable 7,431 7,582 Commissions and professional fees 2,486 2,024 Deferred rent — 1,721 Severance 494 1,500 Other 7,817 7,226 $ 74,624 $ 64,533 (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 27, 2020 and June 29, 2019 . (2) 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. 27, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table summarizes the Company's recorded goodwill by reporting segments as of June 27, 2020 and September 28, 2019 : As of (in thousands) June 27, 2020 September 28, 2019 Capital Equipment $ 29,765 $ 29,480 Aftermarket Products and Services ("APS") 26,288 26,211 Total goodwill $ 56,053 $ 55,691 |
Net intangible assets | The following table reflects net intangible assets as of June 27, 2020 and September 28, 2019 : As of Average estimated (dollar amounts in thousands) June 27, 2020 September 28, 2019 useful lives (in years) Developed technology $ 88,591 $ 87,209 7.0 to 15.0 Accumulated amortization (52,327 ) (48,718 ) Net developed technology $ 36,264 $ 38,491 Customer relationships $ 35,586 $ 35,180 5.0 to 6.0 Accumulated amortization (34,218 ) (31,862 ) Net customer relationships $ 1,368 $ 3,318 Trade and brand names $ 7,285 $ 7,219 7.0 to 8.0 Accumulated amortization (6,710 ) (6,377 ) Net trade and brand names $ 575 $ 842 Other intangible assets $ 2,500 $ 2,500 1.9 Accumulated amortization (2,500 ) (2,500 ) Net other intangible assets $ — $ — Net intangible assets $ 38,207 $ 42,651 |
Estimated annual amortization expense related to intangible assets | The following table reflects estimated annual amortization expense related to intangible assets as of June 27, 2020 : As of (in thousands) June 27, 2020 Remaining fiscal 2020 $ 1,845 Fiscal 2021 5,346 Fiscal 2022 4,380 Fiscal 2023 4,284 Fiscal 2024 4,284 Thereafter 18,068 Total amortization expense $ 38,207 |
CASH, CASH EQUIVALENTS, RESTR_2
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND SHORT-TERM INVESTMENTS (Tables) | 9 Months Ended |
Jun. 27, 2020 | |
Cash and Cash Equivalents [Abstract] | |
Cash, cash equivalents, restricted cash and short-term investments | Cash, cash equivalents, and short-term investments consisted of the following as of June 27, 2020 : (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Current assets: Cash $ 165,213 $ — $ — $ 165,213 Cash equivalents: Money market funds (1) 126,555 — — 126,555 Time deposits (2) 30,007 — — 30,007 Total cash and cash equivalents $ 321,775 $ — $ — $ 321,775 Short-term investments (2) : Time deposits 95,000 — — 95,000 Deposits (3) 99,000 — — 99,000 Total short-term investments $ 194,000 $ — $ — $ 194,000 Total cash, cash equivalents and short-term investments $ 515,775 $ — $ — $ 515,775 (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 and short-term investments consisted of the following as of September 28, 2019 : (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Current assets: Cash $ 201,005 $ — $ — $ 201,005 Cash equivalents: Money market funds (1) 163,172 — — 163,172 Time deposits (2) 7 — — 7 Total cash and cash equivalents $ 364,184 $ — $ — $ 364,184 Short-term investments (2) : Time deposits 130,000 — — 130,000 Deposits (3) 99,000 — — 99,000 Total short-term investments $ 229,000 $ — $ — $ 229,000 Total cash, cash equivalents and short-term investments $ 593,184 $ — $ — $ 593,184 (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. 27, 2020 | |
Equity Method Investments [Abstract] | |
Equity investments | Equity investments consisted of the following as of June 27, 2020 and September 28, 2019 : As of (in thousands) June 27, 2020 September 28, 2019 Non-marketable equity securities (1) $ 6,275 $ 5,000 Equity method investments 1,092 1,250 Total equity investments $ 7,367 $ 6,250 (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 27, 2020 , there was no impairment or adjustment to the observable price. |
DERIVATIVES FINANCIAL INSTRUM_2
DERIVATIVES FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Jun. 27, 2020 | |
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 27, 2020 and September 28, 2019 was as follows: As of June 27, 2020 September 28, 2019 (in thousands) Notional Amount Fair Value (Liability) Derivatives (1) Notional Amount Fair Value (Liability) Derivatives (1) Derivatives designated as hedging instruments: Foreign exchange forward contracts (2) $ 37,383 $ (284 ) $ 33,834 $ (597 ) Total derivatives $ 37,383 $ (284 ) $ 33,834 $ (597 ) (1) 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. (2) 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 27, 2020 and June 29, 2019 are as follows: Three months ended Nine months ended (in thousands) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Foreign exchange forward contract in cash flow hedging relationships: Net gain/(loss) recognized in OCI, net of tax (1) $ 1,034 $ (49 ) $ (340 ) $ 39 Net loss reclassified from accumulated OCI into income, net of tax (2) $ (384 ) $ (33 ) $ (653 ) $ (1,165 ) (1) Net change in the fair value of the effective portion classified in OCI. (2) Effective portion classified as selling, general and administrative expense. |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Jun. 27, 2020 | |
Leases [Abstract] | |
Lease expense and components of lease expense | The following table shows the components of lease expense: Three months ended Nine months ended (in thousands) June 27, 2020 June 27, 2020 Operating lease expense (1) $ (1,646 ) $ (5,030 ) (1) Operating lease expense includes short-term lease expense, which is immaterial for the three and nine months ended June 27, 2020 . The following table shows the cash flows arising from lease transactions. Cash payments related to short-term leases are not included in the measurement of operating and finance lease liabilities, and, as such, are excluded from the amounts below: Nine months ended (in thousands) June 27, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 4,677 |
Weighted-average lease terms and discount rates | The following table shows the weighted-average lease terms and discount rates for operating leases: As of June 27, 2020 Operating leases: Weighted-average remaining lease term (in years) : 4.7 Weighted-average discount rate: 4.6 % |
Future lease payments after ASC 842 adoption | Future lease payments, excluding short-term leases, as of June 27, 2020 , are detailed as follows: (in thousands) Operating leases Remainder of 2020 $ 1,658 2021 6,288 2022 5,635 2023 5,420 2024 2,985 Thereafter 4,385 Total minimum lease payments 26,371 Less: Interest 2,776 Present value of lease obligations 23,595 Less: Current portion 5,471 Long-term portion of lease obligations $ 18,124 |
Future lease payments before ASC 842 adoption | Future lease payments under operating leases prior to adoption ASC 842 were as follows: Payments due by fiscal year (in thousands) Total 2020 2021 2022 2023 2024 Thereafter Operating lease obligations (1) $ 16,273 $ 4,089 $ 2,576 $ 2,182 $ 1,967 $ 1,822 $ 3,637 (1) Pursuant to ASC No. 840, Leases ("ASC 840") , for lessee's involvement in asset construction, the Company was considered to be the owner of the Building (as defined in Note 9 below) during the construction phase due to its involvement in the asset construction. As a result of the Company's continued involvement during the lease term, the Company did not fulfill the criteria to apply sale-leaseback accounting under ASC 840. Therefore, at completion of construction, the Building remained on the Consolidated Condensed Balance Sheet, and the corresponding financing obligation was reclassified to long-term liability. As of September 28, 2019, we recorded a financing obligation related to the Building of $15.0 million (see Note 9 below). The financing obligation is not reflected in the table above. |
SHAREHOLDERS' EQUITY AND EMPL_2
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Tables) | 9 Months Ended |
Jun. 27, 2020 | |
Share-based Payment Arrangement [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 27, 2020 and June 29, 2019 : Three months ended Nine months ended (in thousands) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Cash $ 410 $ 428 $ 1,119 $ 1,291 |
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 27, 2020 and September 28, 2019 : As of (in thousands) June 27, 2020 September 28, 2019 Loss from foreign currency translation adjustments $ (5,321 ) $ (7,745 ) Unrecognized actuarial loss on pension plan, net of tax (1,669 ) (1,598 ) Unrealized loss on hedging (284 ) (597 ) Accumulated other comprehensive loss $ (7,274 ) $ (9,940 ) |
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 27, 2020 and June 29, 2019 : Three months ended Nine months ended (shares in thousands) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Time-based RSUs 13 2 490 521 Relative TSR PSUs 5 1 163 166 Special/Growth PSUs 2 1 75 56 Common stock 9 10 26 28 Equity-based compensation in shares 29 14 754 771 |
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 27, 2020 and June 29, 2019 : Three months ended Nine months ended (in thousands) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Cost of sales $ 182 $ 161 $ 597 $ 471 Selling, general and administrative 2,676 2,616 8,106 7,871 Research and development 867 820 2,353 2,430 Total equity-based compensation expense $ 3,725 $ 3,597 $ 11,056 $ 10,772 The following table reflects equity-based compensation expense, by type of award, for the three and nine months ended June 27, 2020 and June 29, 2019 : Three months ended Nine months ended (in thousands) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Time-based RSUs $ 2,366 $ 2,182 $ 7,130 $ 6,455 Relative TSR PSUs 908 1,020 2,210 3,213 Special/Growth PSUs 266 173 1,087 492 Common stock 185 222 629 612 Total equity-based compensation expense $ 3,725 $ 3,597 $ 11,056 $ 10,772 |
REVENUE AND CONTRACT LIABILIT_2
REVENUE AND CONTRACT LIABILITIES (Tables) | 9 Months Ended |
Jun. 27, 2020 | |
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 27, 2020 and March 30, 2019: Three months ended Nine months ended (in thousands) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Contract liabilities, beginning of period $ 10,358 $ 581 $ 1,896 $ 997 Revenue recognized (13,401 ) (1,392 ) (19,218 ) (6,909 ) Additions 5,245 1,806 19,524 6,907 Contract liabilities, end of period $ 2,202 $ 995 $ 2,202 $ 995 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Jun. 27, 2020 | |
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 27, 2020 and June 29, 2019 : Three months ended (in thousands, except per share data) June 27, 2020 June 29, 2019 Basic Diluted Basic Diluted NUMERATOR: Net income $ 11,151 $ 11,151 $ 1,287 $ 1,287 DENOMINATOR: Weighted average shares outstanding - Basic 62,313 62,313 64,683 64,683 Dilutive effect of Equity Plans 520 748 Weighted average shares outstanding - Diluted 62,833 65,431 EPS: Net income per share - Basic $ 0.18 $ 0.18 $ 0.02 $ 0.02 Effect of dilutive shares — — Net income per share - Diluted $ 0.18 $ 0.02 Nine months ended (in thousands, except per share data) June 27, 2020 June 29, 2019 Basic Diluted Basic Diluted NUMERATOR: Net income $ 36,516 $ 36,516 $ 5,249 $ 5,249 DENOMINATOR: Weighted average shares outstanding - Basic 63,200 63,200 65,914 65,914 Dilutive effect of Equity Plans 555 683 Weighted average shares outstanding - Diluted 63,755 66,597 EPS: Net income per share - Basic $ 0.58 $ 0.58 $ 0.08 $ 0.08 Effect of dilutive shares (0.01 ) — Net income per share - Diluted $ 0.57 $ 0.08 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Jun. 27, 2020 | |
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 27, 2020 and June 29, 2019 : Three months ended Nine months ended (dollar amounts in thousands) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Provision for income taxes $ 690 $ 3,864 $ 3,985 $ 19,106 Effective tax rate 5.8 % 75.0 % 9.8 % 78.2 % |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Jun. 27, 2020 | |
Segment Reporting [Abstract] | |
Operating information by segment | The following table reflects operating information by segment for the three and nine months ended June 27, 2020 and June 29, 2019 : Three months ended Nine months ended (in thousands) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Net revenue: Capital Equipment $ 111,436 $ 89,860 $ 326,982 $ 286,364 APS 39,014 37,249 118,506 113,861 Net revenue 150,450 127,109 445,488 400,225 Income/(loss) from operations: Capital Equipment 1,045 (6,449 ) 7,815 (10,563 ) APS 9,926 8,276 27,646 24,480 Income from operations $ 10,971 $ 1,827 $ 35,461 $ 13,917 |
Schedule of net revenue by Capital Equipment end markets | The following table reflects net revenue by Capital Equipment end markets served for the three and nine months ended June 27, 2020 and June 29, 2019 : Three months ended Nine months ended (in thousands) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 General Semiconductor $ 51,103 $ 50,040 $ 168,937 $ 120,694 Automotive & Industrial 8,135 16,259 46,906 61,735 LED 36,135 15,194 58,193 39,730 Memory 5,618 2,501 25,471 41,813 Advanced Packaging 10,445 5,866 27,475 22,392 Total Capital Equipment revenue $ 111,436 $ 89,860 $ 326,982 $ 286,364 |
Capital expenditures, depreciation and amortization expense | The following table reflects capital expenditures, depreciation expense and amortization expense for the three and nine months ended June 27, 2020 and June 29, 2019 . Three months ended Nine months ended (in thousands) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Capital expenditures: Capital Equipment $ 1,329 $ 646 $ 3,215 $ 4,118 APS 2,122 1,490 5,335 5,194 $ 3,451 $ 2,136 $ 8,550 $ 9,312 Depreciation expense: Capital Equipment $ 1,713 $ 1,800 $ 4,747 $ 5,540 APS 1,542 1,352 4,399 3,872 $ 3,255 $ 3,152 $ 9,146 $ 9,412 Amortization expense: Capital Equipment $ 973 $ 989 $ 2,925 $ 2,999 APS 841 854 2,526 2,590 $ 1,814 $ 1,843 $ 5,451 $ 5,589 |
COMMITMENTS, CONTINGENCIES AN_2
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Tables) | 9 Months Ended |
Jun. 27, 2020 | |
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 27, 2020 and June 29, 2019 : Three months ended Nine months ended (in thousands) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Reserve for warranty, beginning of period $ 14,368 $ 13,885 $ 14,185 $ 14,475 Provision for warranty 3,331 3,143 9,749 8,874 Utilization of reserve (3,189 ) (3,073 ) (9,424 ) (9,394 ) Reserve for warranty, end of period $ 14,510 $ 13,955 $ 14,510 $ 13,955 |
Obligations not reflected on the Consolidated Balance Sheet | The following table reflects obligations not reflected on the Consolidated Condensed Balance Sheet as of June 27, 2020 : Payments due by fiscal year (in thousands) Total 2020 2021 2022 2023 2024 thereafter Inventory purchase obligation (1) $ 125,803 $ 125,803 $ — $ — $ — $ — $ — (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. |
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 27, 2020 and June 29, 2019 : Nine months ended June 27, 2020 June 29, 2019 Micron Technology, Inc. * 10.9 % * 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 27, 2020 and June 29, 2019 : As of June 27, 2020 June 29, 2019 Xinye (HK) Electronics. Co (1) 14.9 % * Haoseng Industrial Company Limited (1) 13.1 % * Super Power International (1) * 15.8 % Forehope Electronic (Ningbo) Co Ltd * 14.4 % Micron Technology, Inc. * 10.2 % (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. 27, 2020 | |
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. 27, 2020 | |
Building | |
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 | Machinery and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Maximum | 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 | Jun. 27, 2020 | Sep. 29, 2019 | Sep. 28, 2019 | Sep. 29, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease liabilities | $ 23,595 | |||
Operating lease, right-of-use asset | 22,192 | $ 0 | ||
Property, plant and equipment, net | $ 55,826 | 72,370 | ||
Cumulative effect of accounting changes | (769) | $ 534 | ||
Accounting Standards Update 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease liabilities | $ 23,800 | |||
Operating lease, right-of-use asset | 22,200 | |||
Financing obligation | (14,500) | |||
Property, plant and equipment, net | (15,300) | |||
Cumulative effect of accounting changes | $ (800) | |||
Retained Earnings | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect of accounting changes | $ (769) | $ 534 |
BALANCE SHEET COMPONENTS (Compo
BALANCE SHEET COMPONENTS (Components of significant balance sheet accounts) (Details) - USD ($) $ in Thousands | Jun. 27, 2020 | Sep. 28, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Short-term investments | [1] | $ 194,000 | $ 229,000 |
Inventories, net: | |||
Raw materials and supplies | 63,878 | 52,853 | |
Work in process | 41,757 | 32,026 | |
Finished goods | 39,663 | 33,742 | |
Inventory, gross | 145,298 | 118,621 | |
Inventory reserves | (31,104) | (29,313) | |
Inventories, net | 114,194 | 89,308 | |
Property, plant and equipment, net: | |||
Land | 2,182 | 2,182 | |
Buildings and building improvements | 22,542 | 41,961 | |
Leasehold improvements | 22,812 | 24,441 | |
Data processing equipment and software | 37,760 | 36,302 | |
Machinery, equipment, furniture and fixtures | 76,589 | 71,465 | |
Construction in progress | 6,578 | 6,512 | |
Property, plant and equipment, gross | 168,463 | 182,863 | |
Accumulated depreciation | (112,637) | (110,493) | |
Property, plant and equipment, net | 55,826 | 72,370 | |
Accrued expenses and other current liabilities: | |||
Accrued customer obligations (2) | [2] | 25,322 | 26,292 |
Wages and benefits | 31,074 | 18,188 | |
Dividend payable | 7,431 | 7,582 | |
Commissions and professional fees | 2,486 | 2,024 | |
Deferred rent | 0 | 1,721 | |
Severance | 494 | 1,500 | |
Other | 7,817 | 7,226 | |
Accrued expenses and other current liabilities | $ 74,624 | $ 64,533 | |
[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 27, 2020 and June 29, 2019 . | ||
[2] | 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. 27, 2020 | Sep. 28, 2019 |
Goodwill [Line Items] | ||
Goodwill | $ 56,053 | $ 55,691 |
Capital Equipment [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 29,765 | 29,480 |
Aftermarket Products and Services [Member] | ||
Goodwill [Line Items] | ||
Goodwill | $ 26,288 | $ 26,211 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS (Net intangible assets) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 27, 2020 | Sep. 28, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Net intangible assets | $ 38,207 | $ 42,651 |
Developed technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | 88,591 | 87,209 |
Accumulated amortization | (52,327) | (48,718) |
Net intangible assets | 36,264 | 38,491 |
Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | 35,586 | 35,180 |
Accumulated amortization | (34,218) | (31,862) |
Net intangible assets | 1,368 | 3,318 |
Trade name [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | 7,285 | 7,219 |
Accumulated amortization | (6,710) | (6,377) |
Net intangible assets | 575 | 842 |
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 | Developed technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Average estimated useful lives (in years) | 7 years | |
Minimum | Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Average estimated useful lives (in years) | 5 years | |
Minimum | Trade name [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Average estimated useful lives (in years) | 7 years | |
Maximum | Developed technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Average estimated useful lives (in years) | 15 years | |
Maximum | Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Average estimated useful lives (in years) | 6 years | |
Maximum | 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. 27, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remaining fiscal 2020 | $ 1,845 |
Fiscal 2021 | 5,346 |
Fiscal 2022 | 4,380 |
Fiscal 2023 | 4,284 |
Fiscal 2024 | 4,284 |
Thereafter | 18,068 |
Total amortization expense | $ 38,207 |
CASH, CASH EQUIVALENTS, RESTR_3
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND SHORT-TERM INVESTMENTS (Details) - USD ($) $ in Thousands | Jun. 27, 2020 | Sep. 28, 2019 | |||
Cash, Cash Equivalents, Restricted Cash and Short-Term Investments [Line Items] | |||||
Cash | $ 165,213 | $ 201,005 | |||
Cash and Cash Equivalents, Amortized Cost | 321,775 | 364,184 | |||
Cash and Cash Equivalents, Unrealized Gain | 0 | 0 | |||
Cash and Cash Equivalents, Unrealized Loss | 0 | 0 | |||
Cash and Cash Equivalents, Estimated Fair Value | 321,775 | 364,184 | |||
Short-term investments | [1] | 194,000 | 229,000 | ||
Short-term Investments, Unrealized Gain | 0 | 0 | |||
Short-term Investments, Unrealized Loss | 0 | 0 | |||
Short-term Investments, Estimated Fair Value | 194,000 | 229,000 | |||
Cash, Cash Equivalents, Restricted Cash, Restricted Cash Equivalents, and Short-Term Investments, Amortized Cost | 515,775 | 593,184 | |||
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 | 0 | |||
Cash, Cash Equivalents, Restricted Cash, Restricted Cash Equivalents, and Short-Term Investments, Estimated Fair Value | 515,775 | 593,184 | |||
Money market funds | |||||
Cash, Cash Equivalents, Restricted Cash and Short-Term Investments [Line Items] | |||||
Cash Equivalents, Amortized Cost | 126,555 | 163,172 | |||
Cash Equivalents, Unrealized Gain | 0 | 0 | |||
Cash Equivalents, Unrealized Loss | 0 | 0 | |||
Cash Equivalents, Estimated Fair Value | 126,555 | [2] | 163,172 | [3] | |
Time deposits | |||||
Cash, Cash Equivalents, Restricted Cash and Short-Term Investments [Line Items] | |||||
Cash Equivalents, Amortized Cost | 30,007 | 7 | |||
Cash Equivalents, Unrealized Gain | 0 | 0 | |||
Cash Equivalents, Unrealized Loss | 0 | 0 | |||
Cash Equivalents, Estimated Fair Value | 30,007 | [4] | 7 | [5] | |
Short-term investments | 95,000 | 130,000 | |||
Short-term Investments, Unrealized Gain | 0 | 0 | |||
Short-term Investments, Unrealized Loss | 0 | 0 | |||
Short-term Investments, Estimated Fair Value | 95,000 | [4] | 130,000 | [3] | |
Deposits | |||||
Cash, Cash Equivalents, Restricted Cash and Short-Term Investments [Line Items] | |||||
Short-term investments | 99,000 | [6] | 99,000 | [7] | |
Short-term Investments, Unrealized Gain | 0 | 0 | |||
Short-term Investments, Unrealized Loss | 0 | 0 | |||
Short-term Investments, Estimated Fair Value | $ 99,000 | [4],[6] | $ 99,000 | [5],[7] | |
[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 27, 2020 and June 29, 2019 . | ||||
[2] | 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. | ||||
[3] | 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. | ||||
[4] | Fair value approximates cost basis. | ||||
[5] | Fair value approximates cost basis. | ||||
[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. 27, 2020 | Sep. 28, 2019 | Jan. 30, 2019 | ||
Equity Method Investments [Abstract] | |||||
Non-marketable equity securities(1) | $ 6,275 | [1] | $ 5,000 | [1] | $ 5,000 |
Equity method investments | 1,092 | 1,250 | |||
Equity investments | $ 7,367 | $ 6,250 | |||
[1] | On January 30, 2019, the Company made a $5.0 million investment in one of our collaborative partners, over which the Company does not have significant influence. During the three and nine months ended June 27, 2020 , there was no impairment or adjustment to the observable price. |
DERIVATIVES FINANCIAL INSTRUM_3
DERIVATIVES FINANCIAL INSTRUMENTS (Fair value of derivative instruments) (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Jun. 27, 2020 | Sep. 28, 2019 | ||
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 | $ 37,383 | $ 33,834 | |
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 | $ 37,383 | 33,834 | |
Accrued Liabilities [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Liability, Fair Value, Gross Liability | [1],[2] | (284) | (597) |
Accrued Liabilities [Member] | Designated as Hedging Instrument [Member] | Foreign Exchange Forward [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Liability, Fair Value, Gross Liability | [1],[2] | $ (284) | $ (597) |
[1] | Hedged amounts expected to be recognized to income within the next twelve months . | ||
[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. |
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. 27, 2020 | Jun. 29, 2019 | Jun. 27, 2020 | Jun. 29, 2019 | ||
Other Comprehensive Income (Loss) [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Net gain (loss) recognized in OCI, net of tax | [1] | $ 1,034 | $ (49) | $ (340) | $ 39 |
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] | $ (384) | $ (33) | $ (653) | $ (1,165) |
[1] | Net change in the fair value of the effective portion classified in OCI. | ||||
[2] | Effective portion classified as selling, general and administrative expense. |
LEASES - Narrative (Details)
LEASES - Narrative (Details) $ in Thousands | 9 Months Ended | ||
Jun. 27, 2020USD ($)extend_options | Sep. 28, 2019USD ($) | Dec. 01, 2013USD ($) | |
Lessee, Lease, Description [Line Items] | |||
Options to extend | extend_options | 1 | ||
Financing obligation | $ 0 | $ 14,207 | $ 20,000 |
Current and Noncurrent Portion | |||
Lessee, Lease, Description [Line Items] | |||
Financing obligation | $ 15,000 | ||
Building | |||
Lessee, Lease, Description [Line Items] | |||
Property, plant and equipment, useful life | 25 years | ||
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease, term of contract | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease, term of contract | 20 years |
LEASES - Lease Expense (Details
LEASES - Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Jun. 27, 2020 | Jun. 27, 2020 | |
Lease, Cost [Abstract] | ||
Operating lease expense | $ (1,646) | $ (5,030) |
Cash Flow, Operating Activities, Lessee [Abstract] | ||
Operating cash outflows from operating leases | $ 4,677 |
LEASES - Lease Terms and Discou
LEASES - Lease Terms and Discount Rates (Details) | Jun. 27, 2020 |
Leases [Abstract] | |
Weighted-average remaining lease term | 4 years 8 months 12 days |
Weighted-average discount rate | 4.60% |
LEASES - Future Lease Payments
LEASES - Future Lease Payments After Adoption ASC 842 (Details) - USD ($) $ in Thousands | Jun. 27, 2020 | Sep. 28, 2019 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
Remainder of 2020 | $ 1,658 | |
2021 | 6,288 | |
2022 | 5,635 | |
2023 | 5,420 | |
2024 | 2,985 | |
Thereafter | 4,385 | |
Total minimum lease payments | 26,371 | |
Less: Interest | 2,776 | |
Present value of lease obligations | 23,595 | |
Less: Current portion | 5,471 | $ 0 |
Long-term portion of lease obligations | $ 18,124 | $ 0 |
LEASES - Future Lease Payment_2
LEASES - Future Lease Payments Prior Adoption ASC 842 (Details) $ in Thousands | Sep. 28, 2019USD ($) | [1] |
Leases [Abstract] | ||
Total | $ 16,273 | |
2020 | 4,089 | |
2021 | 2,576 | |
2022 | 2,182 | |
2023 | 1,967 | |
2024 | 1,822 | |
Thereafter | $ 3,637 | |
[1] | Pursuant to ASC No. 840, Leases ("ASC 840") , for lessee's involvement in asset construction, the Company was considered to be the owner of the Building (as defined in Note 9 below) during the construction phase due to its involvement in the asset construction. As a result of the Company's continued involvement during the lease term, the Company did not fulfill the criteria to apply sale-leaseback accounting under ASC 840. Therefore, at completion of construction, the Building remained on the Consolidated Condensed Balance Sheet, and the corresponding financing obligation was reclassified to long-term liability. As of September 28, 2019, we recorded a financing obligation related to the Building of $15.0 million (see Note 9 below). The financing obligation is not reflected in the table above. |
DEBT AND OTHER OBLIGATIONS DE_2
DEBT AND OTHER OBLIGATIONS DEBT AND OTHER OBLIGATIONS (Details) $ in Thousands, $ in Millions | Dec. 01, 2013SGD ($)renewal_option | Jun. 27, 2020USD ($) | Sep. 28, 2019USD ($) | Sep. 29, 2019USD ($) | Feb. 15, 2019USD ($) | Sep. 29, 2018USD ($) | Dec. 01, 2013USD ($)ft² | Nov. 22, 2013USD ($) |
Capital Leased Assets [Line Items] | ||||||||
Financing obligation | $ 0 | $ 14,207 | $ 20,000 | |||||
Property, plant and equipment, net | 55,826 | 72,370 | ||||||
Cumulative effect of accounting changes | (769) | $ 534 | ||||||
Short-term debt | $ 0 | 60,904 | ||||||
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 | ||||||||
Capital Leased Assets [Line Items] | ||||||||
Financing obligation | $ 15,000 | |||||||
Facility Agreements [Member] | MUFG Bank, Ltd., Singapore Branch [Member] | ||||||||
Capital Leased Assets [Line Items] | ||||||||
Capacity under credit facility | $ 150,000 | |||||||
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 | ||||||||
Capital Leased Assets [Line Items] | ||||||||
Property, plant and equipment, useful life | 25 years | |||||||
Accounting Standards Update 2016-02 | ||||||||
Capital Leased Assets [Line Items] | ||||||||
Financing obligation | $ (14,500) | |||||||
Property, plant and equipment, net | (15,300) | |||||||
Cumulative effect of accounting changes | $ (800) |
SHAREHOLDERS' EQUITY AND EMPL_3
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | May 29, 2020 | Feb. 20, 2020 | Dec. 12, 2019 | Jun. 27, 2020 | Mar. 28, 2020 | Dec. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Dec. 29, 2018 | Jun. 27, 2020 | Jun. 29, 2019 | Jul. 03, 2020 | 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) | (2.1) | |||||||||||||
Value of shares acquired | $ 22,358 | $ 18,522 | $ 5,369 | $ 33,177 | $ 26,922 | $ 25,485 | $ 46,200 | ||||||||
Remaining repurchase authorized amount | 50,900 | 50,900 | |||||||||||||
Cash dividends declared per share (in dollars per share) | $ 0.12 | $ 0.12 | $ 0.12 | ||||||||||||
Common stock cash dividends paid | $ (7,600) | $ (22,796) | $ (23,902) | ||||||||||||
Relative Total Shareholder Return Average Stock Price Calculation Period | 90 days | ||||||||||||||
Total Shareholder Return Award Performance Measurement Period | 3 years | ||||||||||||||
Minimum | |||||||||||||||
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 | |||||||||||||||
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 | 3.4 | 3.4 | |||||||||||||
Subsequent Event [Member] | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Stock repurchase program, authorized amount | $ 400,000 | ||||||||||||||
Authorized amount, additional amount | $ 100,000 |
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. 27, 2020 | Jun. 29, 2019 | Jun. 27, 2020 | Jun. 29, 2019 | |
401(k) Cash Contributions | ||||
Cash | $ 410 | $ 428 | $ 1,119 | $ 1,291 |
SHAREHOLDERS' EQUITY AND EMPL_5
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Accumulated other comprehensive income) (Details) - USD ($) $ in Thousands | Jun. 27, 2020 | Sep. 28, 2019 |
Share-based Payment Arrangement [Abstract] | ||
Loss from foreign currency translation adjustments | $ (5,321) | $ (7,745) |
Unrecognized actuarial loss on pension plan, net of tax | (1,669) | (1,598) |
Unrealized loss on hedging | (284) | (597) |
Accumulated other comprehensive loss | $ (7,274) | $ (9,940) |
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. 27, 2020 | Jun. 29, 2019 | Jun. 27, 2020 | Jun. 29, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation in shares | 29 | 14 | 754 | 771 |
Relative TSR PSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation in shares | 5 | 1 | 163 | 166 |
Time-based RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation in shares | 13 | 2 | 490 | 521 |
Special/Growth PSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation in shares | 2 | 1 | 75 | 56 |
Common Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation in shares | 9 | 10 | 26 | 28 |
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. 27, 2020 | Jun. 29, 2019 | Jun. 27, 2020 | Jun. 29, 2019 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total equity-based compensation expense | $ 3,725 | $ 3,597 | $ 11,056 | $ 10,772 |
Relative TSR PSU [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total equity-based compensation expense | 908 | 1,020 | 2,210 | 3,213 |
Time-based RSUs | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total equity-based compensation expense | 2,366 | 2,182 | 7,130 | 6,455 |
Special/Growth PSUs | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total equity-based compensation expense | 266 | 173 | 1,087 | 492 |
Common Stock | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total equity-based compensation expense | 185 | 222 | 629 | 612 |
Cost of sales [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total equity-based compensation expense | 182 | 161 | 597 | 471 |
Selling, general and administrative (1) [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total equity-based compensation expense | 2,676 | 2,616 | 8,106 | 7,871 |
Research and development [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total equity-based compensation expense | $ 867 | $ 820 | $ 2,353 | $ 2,430 |
REVENUE AND CONTRACT LIABILIT_3
REVENUE AND CONTRACT LIABILITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 27, 2020 | Jun. 29, 2019 | Jun. 27, 2020 | Jun. 29, 2019 | |
Change in Contract with Customer, Liability [Roll Forward] | ||||
Contract liabilities, beginning of period | $ 10,358 | $ 581 | $ 1,896 | $ 997 |
Revenue recognized | 13,401 | 1,392 | 19,218 | 6,909 |
Additions | 5,245 | 1,806 | 19,524 | 6,907 |
Contract liabilities, end of period | $ 2,202 | $ 995 | $ 2,202 | $ 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. 27, 2020 | Mar. 28, 2020 | Dec. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Dec. 29, 2018 | Jun. 27, 2020 | Jun. 29, 2019 | |
NUMERATOR: | ||||||||
Net income | $ 11,151 | $ 11,888 | $ 13,477 | $ 1,287 | $ (3,555) | $ 7,517 | $ 36,516 | $ 5,249 |
DENOMINATOR: | ||||||||
Weighted average shares outstanding - Basic (in shares) | 62,313 | 64,683 | 63,200 | 65,914 | ||||
Dilutive Securities, Effect on Basic Earnings Per Share, Options and Restrictive Stock Units | $ 520 | $ 748 | $ 555 | $ 683 | ||||
Weighted average shares outstanding - Diluted | 62,833 | 65,431 | 63,755 | 66,597 | ||||
EPS: | ||||||||
Net income per share - Basic (in dollars per share) | $ 0.18 | $ 0.02 | $ 0.58 | $ 0.08 | ||||
Effect of dilutive shares (in dollars per share) | 0 | 0 | 0.01 | 0 | ||||
Net income per share - Diluted (in dollars per share) | $ 0.18 | $ 0.02 | $ 0.57 | $ 0.08 |
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. 27, 2020 | Jun. 29, 2019 | Jun. 27, 2020 | Jun. 29, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes | $ 690 | $ 3,864 | $ 3,985 | $ 19,106 |
Effective tax rate | 5.80% | 75.00% | 9.80% | 78.20% |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Jun. 27, 2020 | Jun. 29, 2019 | Mar. 30, 2019 | Jun. 27, 2020 | Jun. 29, 2019 | |
Income Tax Disclosure [Abstract] | |||||
Provision for income taxes | $ 690 | $ 3,864 | $ 3,985 | $ 19,106 | |
Tax cuts and jobs act of 2017 income tax expense (benefit) | $ 10,200 |
SEGMENT INFORMATION (Operating
SEGMENT INFORMATION (Operating information by segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 27, 2020 | Jun. 29, 2019 | Jun. 27, 2020 | Jun. 29, 2019 | |
Net revenue: | ||||
Revenues | $ 150,450 | $ 127,109 | $ 445,488 | $ 400,225 |
Income from operations: | ||||
Income from operations | 10,971 | 1,827 | 35,461 | 13,917 |
Capital Equipment [Member] | ||||
Net revenue: | ||||
Revenues | 111,436 | 89,860 | 326,982 | 286,364 |
Income from operations: | ||||
Income from operations | 1,045 | (6,449) | 7,815 | (10,563) |
Aftermarket Products and Services (APS) [Member] | ||||
Net revenue: | ||||
Revenues | 39,014 | 37,249 | 118,506 | 113,861 |
Income from operations: | ||||
Income from operations | $ 9,926 | $ 8,276 | $ 27,646 | $ 24,480 |
SEGMENT INFORMATION (Schedule o
SEGMENT INFORMATION (Schedule of net revenue by Capital Equipment end markets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 27, 2020 | Jun. 29, 2019 | Jun. 27, 2020 | Jun. 29, 2019 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | $ 150,450 | $ 127,109 | $ 445,488 | $ 400,225 |
Capital Equipment [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 111,436 | 89,860 | 326,982 | 286,364 |
Capital Equipment [Member] | General Semiconductor [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 51,103 | 50,040 | 168,937 | 120,694 |
Capital Equipment [Member] | Automotive and Industrial [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 8,135 | 16,259 | 46,906 | 61,735 |
Capital Equipment [Member] | LED [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 36,135 | 15,194 | 58,193 | 39,730 |
Capital Equipment [Member] | Memory [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 5,618 | 2,501 | 25,471 | 41,813 |
Capital Equipment [Member] | Advanced Packaging [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | $ 10,445 | $ 5,866 | $ 27,475 | $ 22,392 |
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. 27, 2020 | Jun. 29, 2019 | Jun. 27, 2020 | Jun. 29, 2019 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Property, Plant and Equipment, Additions | $ 3,451 | $ 2,136 | $ 8,550 | $ 9,312 |
Depreciation and amortization expense: | ||||
Depreciation expense | 3,255 | 3,152 | 9,146 | 9,412 |
Amortization expense | 1,814 | 1,843 | 5,451 | 5,589 |
Capital Equipment [Member] | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Property, Plant and Equipment, Additions | 1,329 | 646 | 3,215 | 4,118 |
Depreciation and amortization expense: | ||||
Depreciation expense | 1,713 | 1,800 | 4,747 | 5,540 |
Amortization expense | 973 | 989 | 2,925 | 2,999 |
Aftermarket Products and Services (APS) [Member] | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Property, Plant and Equipment, Additions | 2,122 | 1,490 | 5,335 | 5,194 |
Depreciation and amortization expense: | ||||
Depreciation expense | 1,542 | 1,352 | 4,399 | 3,872 |
Amortization expense | $ 841 | $ 854 | $ 2,526 | $ 2,590 |
SEGMENT INFORMATION (Narrative)
SEGMENT INFORMATION (Narrative) (Details) | 9 Months Ended |
Jun. 27, 2020segment | |
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. 27, 2020 | Jun. 29, 2019 | Jun. 27, 2020 | Jun. 29, 2019 | |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||||
Reserve for warranty, beginning of period | $ 14,368 | $ 13,885 | $ 14,185 | $ 14,475 |
Provision for warranty | 3,331 | 3,143 | 9,749 | 8,874 |
Utilization of reserve | (3,189) | (3,073) | (9,424) | (9,394) |
Reserve for warranty, end of period | $ 14,510 | $ 13,955 | $ 14,510 | $ 13,955 |
COMMITMENTS, CONTINGENCIES AN_4
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Obligations not reflected on the Consolidated Balance Sheet) (Details) $ in Thousands | Jun. 27, 2020USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
Inventory purchase obligation | $ 125,803 | [1] |
Inventory purchase obligation, Payments due by fiscal year 2020 | 125,803 | [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 2023 | 0 | [1] |
Inventory purchase obligation, Payments due by fiscal year 2024 | 0 | [1] |
Inventory purchase obligation, Payments due by fiscal year thereafter | $ 0 | |
[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. |
COMMITMENTS, CONTINGENCIES AN_5
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Significant customer concentrations as a percentage of net revenue) (Details) | 9 Months Ended |
Jun. 29, 2019 | |
Micron Technology, Inc | Accounts Receivable [Member] | Customer Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Customer concentrations risk percentage | 10.90% |
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. 27, 2020 | Jun. 29, 2019 | ||
Xinye(HK) Electronics.Co [Member] | |||
Concentration Risk [Line Items] | |||
Customer concentrations risk percentage | [1] | 14.90% | |
Super Power International [Member] | |||
Concentration Risk [Line Items] | |||
Customer concentrations risk percentage | [1] | 15.80% | |
Forehope Electronic (Ningbo) Co Ltd [Member] | |||
Concentration Risk [Line Items] | |||
Customer concentrations risk percentage | 14.40% | ||
Haoseng Industrial Company Limited [Member] | |||
Concentration Risk [Line Items] | |||
Customer concentrations risk percentage | [1] | 13.10% | |
Micron Technology, Inc | |||
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) - USD ($) $ in Thousands | 9 Months Ended | ||
Jun. 27, 2020 | Sep. 28, 2019 | Dec. 01, 2013 | |
Other Commitments [Line Items] | |||
Period Of Warranty For Manufacturing Defects | 1 year | ||
Lease Expiration Year | 2027 | ||
Financing obligation | $ 0 | $ 14,207 | $ 20,000 |
Current and Noncurrent Portion | |||
Other Commitments [Line Items] | |||
Financing obligation | $ 15,000 | ||
Building | |||
Other Commitments [Line Items] | |||
Property, plant and equipment, useful life | 25 years |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Thousands | 9 Months Ended | |||||
Jun. 27, 2020 | Jul. 03, 2020 | Sep. 28, 2019 | Jan. 31, 2019 | Jul. 10, 2018 | Aug. 15, 2017 | |
Subsequent Event [Line Items] | ||||||
Stock repurchase program, authorized amount | $ 300,000 | $ 200,000 | $ 100,000 | |||
Total derivative, Notional Amount | $ 37,383 | $ 33,834 | ||||
Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Authorized amount, additional amount | $ 100,000 | |||||
Stock repurchase program, authorized amount | $ 400,000 | |||||
Foreign Exchange Forward [Member] | Designated as Hedging Instrument [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Total derivative, Notional Amount | $ 37,383 | $ 33,834 | ||||
Foreign exchange forward contract, term of contract | 12 months |