x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
PENNSYLVANIA | 23-1498399 |
(State or other jurisdiction of incorporation) | (IRS Employer |
Identification No.) |
Large accelerated filer x | Accelerated filer [ ] | Non-accelerated filer [ ] | Smaller reporting company [ ] |
(Do not check if a smaller reporting company) |
Page Number | ||
PART I - FINANCIAL INFORMATION | ||
Item 1. | FINANCIAL STATEMENTS (Unaudited) | |
Consolidated Balance Sheets as of January 2, 2016 and October 3, 2015 | ||
Consolidated Statements of Operations for the three months ended January 2, 2016 and December 27, 2014 | ||
Consolidated Statements of Comprehensive Income / (Losses) for the three months ended January 2, 2016 and December 27, 2014 | ||
Consolidated Statements of Cash Flows for the three months ended January 2, 2016 and December 27, 2014 | ||
Notes to Consolidated Financial Statements | ||
Item 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | |
Item 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | |
Item 4. | CONTROLS AND PROCEDURES | |
PART II - OTHER INFORMATION | ||
Item 1A. | RISK FACTORS | |
Item 2. | UNREGISTERED SALES OF EQUITY SECURITY AND USE OF PROCEEDS | |
Item 6. | EXHIBITS | |
SIGNATURES |
As of | ||||||||
January 2, 2016 | October 3, 2015 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 492,935 | $ | 498,614 | ||||
Accounts and notes receivable, net of allowance for doubtful accounts of $621 and $621 respectively | 108,628 | 108,596 | ||||||
Inventories, net | 69,648 | 79,096 | ||||||
Prepaid expenses and other current assets | 17,340 | 16,937 | ||||||
Deferred income taxes | — | 4,126 | ||||||
Total current assets | 688,551 | 707,369 | ||||||
Property, plant and equipment, net | 52,076 | 53,234 | ||||||
Goodwill | 81,272 | 81,272 | ||||||
Intangible assets | 55,805 | 57,471 | ||||||
Other assets | 6,388 | 5,120 | ||||||
TOTAL ASSETS | $ | 884,092 | $ | 904,466 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 33,741 | $ | 25,521 | ||||
Accrued expenses and other current liabilities | 36,810 | 45,971 | ||||||
Income taxes payable | 1,353 | 2,442 | ||||||
Total current liabilities | 71,904 | 73,934 | ||||||
Financing obligation | 16,508 | 16,483 | ||||||
Deferred income taxes | 29,455 | 33,958 | ||||||
Other liabilities | 11,219 | 10,842 | ||||||
TOTAL LIABILITIES | $ | 129,086 | $ | 135,217 | ||||
Commitments and contingent liabilities (Note 15) | ||||||||
SHAREHOLDERS' EQUITY: | ||||||||
Preferred stock, without par value: | ||||||||
Authorized 5,000 shares; issued - none | $ | — | $ | — | ||||
Common stock, no par value: | ||||||||
Authorized 200,000 shares; issued 83,146 and 82,643, respectively; outstanding 70,503 and 71,240 shares, respectively | 492,226 | 492,339 | ||||||
Treasury stock, at cost, 12,643 and 11,403 shares, respectively | (137,696 | ) | (124,856 | ) | ||||
Retained earnings | 402,772 | 402,863 | ||||||
Accumulated other comprehensive income | (2,296 | ) | (1,097 | ) | ||||
TOTAL SHAREHOLDERS' EQUITY | $ | 755,006 | $ | 769,249 | ||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 884,092 | $ | 904,466 |
Three months ended | ||||||||
January 2, 2016 | December 27, 2014 | |||||||
Net revenue | $ | 108,534 | $ | 107,438 | ||||
Cost of sales | 58,113 | 52,704 | ||||||
Gross profit | 50,421 | 54,734 | ||||||
Selling, general and administrative | 27,932 | 25,427 | ||||||
Research and development | 24,194 | 19,581 | ||||||
Operating expenses | 52,126 | 45,008 | ||||||
(Loss) / Income from operations | (1,705 | ) | 9,726 | |||||
Interest income | 622 | 262 | ||||||
Interest expense | (273 | ) | (303 | ) | ||||
(Loss) / Income from operations before income taxes | (1,356 | ) | 9,685 | |||||
Income tax (benefit) / expense | (1,265 | ) | 1,843 | |||||
Net (loss) / income | $ | (91 | ) | $ | 7,842 | |||
Net (loss) / income per share: | ||||||||
Basic | $ | — | $ | 0.10 | ||||
Diluted | $ | — | $ | 0.10 | ||||
Weighted average shares outstanding: | ||||||||
Basic | 70,738 | 76,888 | ||||||
Diluted | 70,738 | 77,432 |
Three months ended | ||||||||
January 2, 2016 | December 27, 2014 | |||||||
Net (loss) / income | $ | (91 | ) | $ | 7,842 | |||
Other comprehensive income: | ||||||||
Foreign currency translation adjustment | (1,130 | ) | (679 | ) | ||||
Unrecognized actuarial loss, Switzerland pension plan, net of tax | 28 | — | ||||||
(1,102 | ) | (679 | ) | |||||
Derivatives designated as hedging instruments: | ||||||||
Unrealized loss on derivative instruments, net of tax | (187 | ) | (640 | ) | ||||
Reclassification adjustment for loss on derivative instruments recognized, net of tax | 89 | 248 | ||||||
Net decrease from derivatives designated as hedging instruments, net of tax | (98 | ) | (392 | ) | ||||
Total other comprehensive loss | (1,200 | ) | (1,071 | ) | ||||
Comprehensive (loss) / income | $ | (1,291 | ) | $ | 6,771 |
Three months ended | ||||||||
January 2, 2016 | December 27, 2014 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net (loss) / income | $ | (91 | ) | $ | 7,842 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 4,051 | 3,556 | ||||||
Equity-based compensation and employee benefits | 62 | 3,435 | ||||||
Excess tax benefits from stock-based compensation arrangements | (363 | ) | — | |||||
Adjustment for doubtful accounts | — | 143 | ||||||
Adjustment for inventory valuation | 1,357 | 169 | ||||||
Deferred taxes | (1,989 | ) | 351 | |||||
Gain on disposal of property, plant and equipment | (37 | ) | — | |||||
Unrealized foreign currency transactions | (1,510 | ) | (1,569 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts and notes receivable | 7 | 49,302 | ||||||
Inventory | 8,077 | (2,903 | ) | |||||
Prepaid expenses and other current assets | (417 | ) | 4,009 | |||||
Accounts payable, accrued expenses and other current liabilities | (623 | ) | (18,172 | ) | ||||
Income taxes payable | (1,080 | ) | 169 | |||||
Other, net | 250 | 110 | ||||||
Net cash provided by operating activities | 7,694 | 46,442 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchases of property, plant and equipment | (1,727 | ) | (2,546 | ) | ||||
Proceeds from sales of property, plant and equipment | 115 | — | ||||||
Purchase of short-term investments | — | (1,630 | ) | |||||
Net cash used in investing activities | (1,612 | ) | (4,176 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Payment on debts | (125 | ) | (81 | ) | ||||
Proceeds from exercise of common stock options | 177 | 98 | ||||||
Repurchase of common stock | (12,840 | ) | (7,638 | ) | ||||
Excess tax benefits from stock-based compensation arrangements | 363 | — | ||||||
Net cash used in financing activities | (12,425 | ) | (7,621 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | 664 | (36 | ) | |||||
Changes in cash and cash equivalents | (5,679 | ) | 34,609 | |||||
Cash and cash equivalents at beginning of period | 498,614 | 587,981 | ||||||
Cash and cash equivalents at end of period | $ | 492,935 | $ | 622,590 | ||||
CASH PAID FOR: | ||||||||
Interest | $ | 273 | $ | 303 | ||||
Income taxes | $ | 1,873 | $ | 956 |
As at October 3, 2015 | ||||||||||||
As previously reported | Adjustment | As Revised | ||||||||||
Deferred income taxes | 31,316 | 2,642 | 33,958 | |||||||||
TOTAL LIABILITIES | $ | 132,575 | $ | 2,642 | $ | 135,217 | ||||||
Retained earnings | 405,505 | (2,642 | ) | 402,863 | ||||||||
TOTAL SHAREHOLDERS' EQUITY | $ | 771,891 | $ | (2,642 | ) | $ | 769,249 |
Three months ended | |||
(in thousands) | January 2, 2016 | ||
Accrual for estimated severance and benefits, beginning of period (1) | 1,538 | ||
Provision for severance and benefits (2) | 615 | ||
Payment of severance and benefits | (1,488 | ) | |
Accrual for estimated severance and benefits, end of period (1) | 665 |
(1) | Included within accrued expenses and other current liabilities on the Consolidated Balance Sheets. |
(2) | Provision for severance and benefits is the total amount expected to be incurred and is included within selling, general and administrative expenses on the Consolidated Statements of Operations. |
As of | ||||||||
(in thousands) | January 2, 2016 | October 3, 2015 | ||||||
Inventories, net: | ||||||||
Raw materials and supplies | $ | 18,888 | $ | 23,541 | ||||
Work in process | 19,297 | 24,110 | ||||||
Finished goods | 51,046 | 50,518 | ||||||
89,231 | 98,169 | |||||||
Inventory reserves | (19,583 | ) | (19,073 | ) | ||||
$ | 69,648 | $ | 79,096 | |||||
Property, plant and equipment, net: | ||||||||
Buildings and building improvements | $ | 33,699 | $ | 33,760 | ||||
Leasehold improvements | 19,428 | 19,512 | ||||||
Data processing equipment and software | 28,694 | 28,861 | ||||||
Machinery, equipment, furniture and fixtures | 52,569 | 52,106 | ||||||
134,390 | 134,239 | |||||||
Accumulated depreciation | (82,314 | ) | (81,005 | ) | ||||
$ | 52,076 | $ | 53,234 | |||||
Accrued expenses and other current liabilities: | ||||||||
Wages and benefits | $ | 13,310 | $ | 19,166 | ||||
Accrued customer obligations (1) | 7,430 | 9,215 | ||||||
Commissions and professional fees | 3,015 | 3,880 | ||||||
Deferred rent | 2,448 | 2,450 | ||||||
Severance (2) | 1,975 | 1,645 | ||||||
Other | 8,632 | 9,615 | ||||||
$ | 36,810 | $ | 45,971 |
(1) | Represents customer advance payments, customer credit program, accrued warranty expense and accrued retrofit obligations. |
(2) | Includes the restructuring plan discussed in Note 3, $1.2 million of severance payable in connection with the October 2015 retirement of the Company's CEO, and other severance payments which are not part of the Company's plan to streamline its global operations and functions. |
(in thousands) | January 9, 2015 | ||
Accounts receivable | $ | 9,941 | |
Inventories | 19,861 | ||
Prepaid expenses and other current assets | 2,322 | ||
Deferred tax asset | 157 | ||
Property, plant and equipment | 531 | ||
Intangibles | 61,463 | ||
Goodwill | 39,726 | ||
Deferred income taxes | 638 | ||
Accounts payable | (14,386 | ) | |
Borrowings financial institutions | (9,491 | ) | |
Accrued expenses and other current liabilities | (10,561 | ) | |
Income taxes payable | (1,933 | ) | |
Deferred tax liabilities | (5,115 | ) | |
Total purchase price, net of cash acquired | $ | 93,153 |
As of | |||||||
(in thousands) | January 2, 2016 | October 3, 2015 | |||||
Goodwill | $ | 81,272 | 81,272 |
As of | Average estimated | |||||||||
(in thousands) | January 2, 2016 | October 3, 2015 | useful lives (in years) | |||||||
Developed technology | $ | 74,080 | $ | 74,080 | 7.0 to 15.0 | |||||
Accumulated amortization | (35,925 | ) | (35,244 | ) | ||||||
Net developed technology | $ | 38,155 | $ | 38,836 | ||||||
Customer relationships | $ | 36,968 | $ | 36,968 | 5.0 to 6.0 | |||||
Accumulated amortization | (22,245 | ) | (21,509 | ) | ||||||
Net customer relationships | $ | 14,723 | $ | 15,459 | ||||||
Trade and brand names | $ | 7,515 | $ | 7,515 | 7.0 to 8.0 | |||||
Accumulated amortization | (4,588 | ) | (4,339 | ) | ||||||
Net trade and brand name | $ | 2,927 | $ | 3,176 | ||||||
Other intangible assets | $ | 2,500 | $ | 2,500 | 1.9 | |||||
Accumulated amortization | (2,500 | ) | (2,500 | ) | ||||||
Net other intangible assets | $ | — | $ | — | ||||||
Net intangible assets | $ | 55,805 | $ | 57,471 |
As of | |||
(in thousands) | January 2, 2016 | ||
Remaining fiscal 2016 | $ | 4,994 | |
Fiscal 2017 | 6,086 | ||
Fiscal 2018 | 6,086 | ||
Fiscal 2019 | 6,086 | ||
Fiscal 2020 and onwards | 32,553 | ||
Total amortization expense | $ | 55,805 |
(in thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | |||||||||||
Current assets: | |||||||||||||||
Cash | $ | 140,720 | $ | — | $ | — | $ | 140,720 | |||||||
Cash equivalents: | |||||||||||||||
Money market funds | 58,481 | — | — | 58,481 | |||||||||||
Time deposits | 293,734 | — | — | 293,734 | |||||||||||
Total cash and cash equivalents | $ | 492,935 | $ | — | $ | — | $ | 492,935 |
(in thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | |||||||||||
Current assets: | |||||||||||||||
Cash | $ | 105,617 | $ | — | $ | — | $ | 105,617 | |||||||
Cash equivalents: | |||||||||||||||
Money market funds | 155,715 | — | — | 155,715 | |||||||||||
Time deposits | 237,282 | — | — | 237,282 | |||||||||||
Total cash and cash equivalents | $ | 498,614 | $ | — | $ | — | $ | 498,614 |
(in thousands) | Fair Value Measurements at Reporting Date Using | ||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Assets: | |||||||||||||||
Cash | $ | 140,720 | $ | 140,720 | $ | — | $ | — | |||||||
Cash equivalents: | |||||||||||||||
Money market funds | 58,481 | 58,481 | — | — | |||||||||||
Time deposits | 293,734 | 293,734 | — | — | |||||||||||
Total assets | $ | 492,935 | $ | 492,935 | $ | — | $ | — |
(in thousands) | Fair Value Measurements at Reporting Date Using | ||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Assets: | |||||||||||||||
Cash | $ | 105,617 | $ | 105,617 | $ | — | $ | — | |||||||
Cash equivalents | |||||||||||||||
Money market funds | 155,715 | 155,715 | — | — | |||||||||||
Time deposits | 237,282 | 237,282 | — | — | |||||||||||
Total assets | $ | 498,614 | $ | 498,614 | $ | — | $ | — |
As of | |||||||
(in thousands) | January 2, 2016 | ||||||
Notional Amount | Fair Value Liability Derivatives(1) | ||||||
Derivatives designated as hedging instruments: | |||||||
Foreign exchange forward contracts (2) | $ | 7,937 | $ | 98 | |||
Total derivatives | $ | 7,937 | $ | 98 |
(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 Balance Sheet. |
(2) | Hedged amounts expected to be recognized to income within the next twelve months. |
(in thousands) | Three months ended | |||||||
January 2, 2016 | December 27, 2014 | |||||||
Foreign exchange forward contract in cash flow hedging relationships: | ||||||||
Net loss recognized in OCI, net of tax(1) | $ | (187 | ) | $ | (640 | ) | ||
Net loss reclassified from accumulated OCI into income, net of tax(2) | $ | (89 | ) | $ | (249 | ) | ||
Net gain recognized in income(3) | $ | — | $ | — |
Three months ended | ||||||||
(in thousands) | January 2, 2016 | December 27, 2014 | ||||||
Cash | $ | 393 | $ | 295 |
As of | ||||||||
(in thousands) | January 2, 2016 | October 3, 2015 | ||||||
Loss from foreign currency translation adjustments | $ | (1,291 | ) | $ | (161 | ) | ||
Unrecognized actuarial loss Switzerland pension plan, net of tax | (561 | ) | (590 | ) | ||||
Switzerland pension plan curtailment | (346 | ) | (346 | ) | ||||
Unrealized loss on hedging | (98 | ) | — | |||||
Accumulated other comprehensive loss | $ | (2,296 | ) | $ | (1,097 | ) |
• | Market-based restricted stock entitles the employee to receive common shares of the Company on the award vesting date, if market performance objectives that measure relative total shareholder return (“TSR”) are attained. Relative TSR is calculated based upon the 90 -calendar day average price of the Company's stock as compared to specific peer companies that comprise the GICS (45301020) Semiconductor Index. TSR is measured for the Company and each peer company over a performance period, which is generally three years. Vesting percentages range from 0% to 200% of awards granted. The provisions of the market-based restricted stock 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 stock 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. |
• | In general, performance-based restricted stock (“PSU”) entitles the employee to receive common shares of the Company on the three-year anniversary of the grant date (if employed by the Company) if return on invested capital and 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 return on invested capital and revenue growth targets are not met, performance-based restricted stock does not vest. Certain 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 PSUs do not vest. |
Three months ended | ||||||
(shares in thousands) | January 2, 2016 | December 27, 2014 | ||||
Market-based restricted stock | 166 | 232 | ||||
Time-based restricted stock | 571 | 472 | ||||
Common stock | — | 13 | ||||
Equity-based compensation in shares | 737 | 717 |
Three months ended | ||||||||
(in thousands) | January 2, 2016 | December 27, 2014 | ||||||
Cost of sales | $ | 128 | $ | 128 | ||||
Selling, general and administrative (1) | (770 | ) | 2,499 | |||||
Research and development | 704 | 808 | ||||||
Total equity-based compensation expense | $ | 62 | $ | 3,435 |
Three months ended | ||||||||
(in thousands) | January 2, 2016 | December 27, 2014 | ||||||
Market-based restricted stock | $ | (1,381 | ) | $ | 1,350 | |||
Time-based restricted stock | 1,486 | 1,869 | ||||||
Performance-based restricted stock | (43 | ) | 33 | |||||
Stock options | — | 3 | ||||||
Common stock | — | 180 | ||||||
Total equity-based compensation expense (1) | $ | 62 | $ | 3,435 |
Three months ended | ||||||||||||||||
(in thousands, except per share) | January 2, 2016 | December 27, 2014 | ||||||||||||||
Basic | Diluted | Basic | Diluted | |||||||||||||
NUMERATOR: | ||||||||||||||||
Net (loss) / income | $ | (91 | ) | $ | (91 | ) | $ | 7,842 | $ | 7,842 | ||||||
DENOMINATOR: | ||||||||||||||||
Weighted average shares outstanding - Basic | 70,738 | 70,738 | 76,888 | 76,888 | ||||||||||||
Stock options | — | 94 | ||||||||||||||
Time-based restricted stock | — | 213 | ||||||||||||||
Market-based restricted stock | — | 237 | ||||||||||||||
Weighted average shares outstanding - Diluted | 70,738 | 77,432 | ||||||||||||||
EPS: | ||||||||||||||||
Net income per share - Basic | $ | — | $ | — | $ | 0.10 | $ | 0.10 | ||||||||
Effect of dilutive shares | — | — | ||||||||||||||
Net income per share - Diluted | $ | — | $ | 0.10 |
Three months ended | |||||||
(dollar amounts in thousands) | January 2, 2016 | December 27, 2014 | |||||
(Loss) / Income from operations before income taxes | $ | (1,356 | ) | $ | 9,685 | ||
Income tax (benefit) / expense | (1,265 | ) | 1,843 | ||||
Net (loss) / income | $ | (91 | ) | $ | 7,842 | ||
Effective tax rate (benefit) | (93.3 | )% | 19.0 | % |
Three months ended | ||||||||
(in thousands) | January 2, 2016 | December 27, 2014 | ||||||
Net revenue: | ||||||||
Equipment | $ | 92,974 | $ | 90,956 | ||||
Expendable Tools | 15,560 | 16,482 | ||||||
Net revenue | 108,534 | 107,438 | ||||||
Income from operations: | ||||||||
Equipment | (6,426 | ) | 5,446 | |||||
Expendable Tools | 4,721 | 4,280 | ||||||
Income from operations | $ | (1,705 | ) | $ | 9,726 |
As of | ||||||||
(in thousands) | January 2, 2016 | October 3, 2015 | ||||||
Segment assets: | ||||||||
Equipment | $ | 799,245 | $ | 828,471 | ||||
Expendable Tools | 84,847 | 75,995 | ||||||
Total assets | $ | 884,092 | $ | 904,466 |
Three months ended | ||||||||
(in thousands) | January 2, 2016 | December 27, 2014 | ||||||
Capital expenditures: | ||||||||
Equipment | $ | 1,071 | $ | 1,736 | ||||
Expendable Tools | 323 | 517 | ||||||
Capital expenditures | $ | 1,394 | $ | 2,253 |
Three months ended | ||||||||
(in thousands) | January 2, 2016 | December 27, 2014 | ||||||
Depreciation expense: | ||||||||
Equipment | $ | 1,806 | $ | 1,585 | ||||
Expendable Tools | 579 | 642 | ||||||
Depreciation expense | $ | 2,385 | $ | 2,227 |
Three months ended | ||||||||
(in thousands) | January 2, 2016 | December 27, 2014 | ||||||
Reserve for product warranty, beginning of period | $ | 1,856 | $ | 1,542 | ||||
Provision for product warranty | 386 | 199 | ||||||
Product warranty costs paid | (625 | ) | (526 | ) | ||||
Reserve for product warranty, end of period | $ | 1,617 | $ | 1,215 |
Payments due by fiscal year | ||||||||||||||||||||||||
(in thousands) | Total | 2016 | 2017 | 2018 | 2019 | thereafter | ||||||||||||||||||
Inventory purchase obligation (1) | $ | 104,808 | $ | 104,808 | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Operating lease obligations (2) | 30,508 | 3,680 | 4,392 | 3,704 | 3,435 | 15,297 | ||||||||||||||||||
Total | $ | 135,316 | $ | 108,488 | $ | 4,392 | $ | 3,704 | $ | 3,435 | $ | 15,297 |
(1) | The Company orders inventory components in the normal course of its business. A portion of these orders are non-cancelable and a portion may have varying penalties and charges in the event of cancellation. |
(2) | The Company has minimum rental commitments under various leases (excluding taxes, insurance, maintenance and repairs, which are also paid by the Company) primarily for various facility and equipment leases, which expire periodically through 2018 (not including lease extension options, if applicable). |
Three months ended | |||||
January 2, 2016 | December 27, 2014 | ||||
Haoseng Industrial Co., Ltd | 16.5 | % | * |
As of | ||||||
January 2, 2016 | December 27, 2014 | |||||
Haoseng Industrial Co., Ltd | 21.7 | % | 19.0 | % |
• | projected growth rates in the overall semiconductor industry, the semiconductor assembly equipment market, and the market for semiconductor packaging materials; and |
• | projected demand for ball, wedge bonder, advanced packaging and surface mount technology equipment and for expendable tools. |
Three months ended | ||||||||||||||
January 2, 2016 | December 27, 2014 | |||||||||||||
(dollar amounts in thousands) | Net revenues | % of total net revenue | Net revenues | % of total net revenue | ||||||||||
Equipment | $ | 92,974 | 85.7 | % | $ | 90,956 | 84.7 | % | ||||||
Expendable Tools | 15,560 | 14.3 | % | 16,482 | 15.3 | % | ||||||||
$ | 108,534 | 100.0 | % | $ | 107,438 | 100.0 | % |
Business Line | Product Name (1) | Typical Served Market | ||
Ball bonders | IConnPS PLUS series (2) (3) (4) | Advanced and ultra fine pitch applications | ||
IConnPS ProCu series (2) (3) | High-end copper wire applications demanding advanced process capability and high productivity | |||
IConnPS ProCu PLUS series (2) (3) (4) | High-end copper wire applications demanding advanced process capability and high productivity | |||
IConnPS MEM PLUS series (2) (3) (4) | Memory applications | |||
ConnXPS PLUS series (2) (3) (4) | High productivity bonder for low-to-medium pin count applications | |||
ConnXPS LED ConnXPS LED PLUS | LED applications | |||
AT Premier PLUS | Advanced wafer level bonding application | |||
Wedge bonders | 3600PLUS | Power hybrid and automotive modules using either heavy aluminum wire or PowerRibbon® | ||
3700PLUS | Hybrid and automotive modules using thin aluminum wire | |||
7200PLUS | Power semiconductors using either aluminum wire or PowerRibbon® | |||
7200HD | Smaller power packages using either aluminum wire or PowerRibbon® | |||
PowerFusionPS TL | Power semiconductors using either aluminum wire or PowerRibbon® | |||
PowerFusionPS HL | Smaller power packages using either aluminum wire or PowerRibbon® | |||
AsterionTM | Power hybrid and automotive modules with extended area using heavy and thin aluminum |
Business Line | Product Name (1) | Typical Served Market | ||
Advanced Packaging and Surface Mount Technology | APAMA C2S (APLR) | Thermo-compression for chip-to-substrate, chip-to-chip and high accuracy flip chip ("HA FC") bonding applications | ||
APAMA C2W (APLR) | Thermo-compression for chip-to-wafer, HA FC and high density fan-out wafer level packaging ("HD FOWLP") bonding applications | |||
Hybrid Series (APMR) | Advanced packages assembly applications requiring high throughput such as flip chip, WLP, FOWLP, embedded die, SiP, package-on-package ("POP"), and modules | |||
iX Series (SMT) | Advanced SMT applications requiring extremely high output of passive and active components | |||
iFlex Series (SMT) | Advanced SMT applications requiring multi-lane or line balancing solutions for standard or oddform passive and active components |
• | The IConnPS PLUS series: high-performance ball bonders which can be configured for either gold or copper wire. |
• | The IConnPS ProCu series and IConnPS ProCu PLUS series: high-performance copper wire ball bonders for advanced wafer nodes at 28 nanometer and below. |
• | The IConnPS MEM PLUS series: ball bonders designed for the assembly of stacked memory devices. |
• | The ConnXPS PLUS series: cost-performance ball bonders which can be configured for either gold or copper wire. |
• | The ConnXPS LED and ConnXPS LED PLUS: ball bonders targeted specifically at the fast growing LED market. |
• | The AT Premier PLUS: ball bonders which utilize a modified wire bonding process to mechanically place bumps on devices, while still in a wafer format for variants of the flip chip assembly process. Typical applications include CMOS image sensors, SAW filters, MEMS and high brightness LEDs. These applications are commonly used in most, if not all, smartphones available today in the market. |
• | The 3600PLUS: high speed, high accuracy wire bonders designed for power modules, automotive packages and other heavy wire multi-chip module applications. |
• | The 3700PLUS: wire bonders designed for hybrid and automotive modules using thin aluminum wire. |
• | The 7200PLUS: dual head wedge bonders designed specifically for power semiconductor applications. |
• | The 7200HD: heavy wire wedge bonders designed for smaller power packages using either aluminum wire or ribbon. |
• | The PowerFusionPS Semiconductor Wedge Bonders - Configurable in single, dual and multi-head configurations using aluminum wire and PowerRibbonTM: |
◦ | The PowerFusionPS TL: designed for single row leadframe and high volume power semiconductor applications. |
◦ | The PowerFusionPS HL and PowerFusionPS HLx: designed for advanced power semiconductor applications. |
• | The AsterionTM: latest generation hybrid wedge bonder. Larger area, higher speed and accuracy wedge bonders for power modules, automotive packages, battery applications and other aluminium wedge interconnect applications. |
• | Capillaries: expendable tools used in ball bonders. Made of ceramic and other elements, a capillary guides the wire during the ball bonding process. Its features help control the bonding process. We design and build capillaries suitable for a broad range of applications, including for use on our competitors' equipment. In addition to capillaries used for gold wire bonding, we have developed capillaries for use with copper wire to achieve optimal performance in copper wire bonding. In January 2015, we introduced QuantisTM QFN Capillary, the latest copper wire bonding capillary designed for QFN (Quad Flat No-lead) application. |
• | Dicing blades: expendable tools used by semiconductor manufacturers to cut silicon wafers into individual semiconductor die or to cut packaged semiconductor units into individual units. |
• | Bonding wedges: expendable tools used in wedge bonders. Wedge tools are used for both wire and ribbon applications. |
Three months ended | |||||||||||||||
(dollar amounts in thousands) | January 2, 2016 | December 27, 2014 | $ Change | % Change | |||||||||||
Net revenue | $ | 108,534 | $ | 107,438 | $ | 1,096 | 1.0 | % | |||||||
Cost of sales | 58,113 | 52,704 | 5,409 | 10.3 | % | ||||||||||
Gross profit | 50,421 | 54,734 | (4,313 | ) | (7.9 | )% | |||||||||
Selling, general and administrative | 27,932 | 25,427 | 2,505 | 9.9 | % | ||||||||||
Research and development | 24,194 | 19,581 | 4,613 | 23.6 | % | ||||||||||
Operating expenses | 52,126 | 45,008 | 7,118 | 15.8 | % | ||||||||||
Income from operations | $ | (1,705 | ) | $ | 9,726 | $ | (11,431 | ) | (117.5 | )% |
Three months ended | |||||||||||||||
(dollar amounts in thousands) | January 2, 2016 | December 27, 2014 | $ Change | % Change | |||||||||||
Equipment | $ | 92,974 | $ | 90,956 | $ | 2,018 | 2.2 | % | |||||||
Expendable Tools | 15,560 | 16,482 | (922 | ) | (5.6 | )% | |||||||||
Total net revenue | $ | 108,534 | $ | 107,438 | $ | 1,096 | 1.0 | % |
Three months ended | ||||||||||||
(in thousands) | Price | Volume | $ Change | |||||||||
Equipment | $ | (4,939 | ) | $ | 6,957 | $ | 2,018 |
January 2, 2016 vs. December 27, 2014 | |||||||||||
Three months ended | |||||||||||
(in thousands) | Price | Volume | $ Change | ||||||||
Expendable Tools | $ | (428 | ) | $ | (494 | ) | $ | (922 | ) |
Three months ended | |||||||||||||||
(dollar amounts in thousands) | January 2, 2016 | December 27, 2014 | $ Change | % Change | |||||||||||
Equipment | $ | 41,393 | $ | 44,857 | $ | (3,464 | ) | (7.7 | )% | ||||||
Expendable Tools | 9,028 | 9,877 | (849 | ) | (8.6 | )% | |||||||||
Total gross profit | $ | 50,421 | $ | 54,734 | $ | (4,313 | ) | (7.9 | )% |
Three months ended | Basis Point | ||||||||
January 2, 2016 | December 27, 2014 | Change | |||||||
Equipment | 44.5 | % | 49.3 | % | (480 | ) | |||
Expendable Tools | 58.0 | % | 59.9 | % | (190 | ) | |||
Total gross margin | 46.5 | % | 50.9 | % | (440 | ) |
January 2, 2016 vs. December 27, 2014 | ||||||||||||||||
Three months ended | ||||||||||||||||
(in thousands) | Price | Cost | Volume | $ Change | ||||||||||||
Equipment | $ | (4,939 | ) | $ | (615 | ) | $ | 2,090 | $ | (3,464 | ) |
January 2, 2016 vs. December 27, 2014 | |||||||||||||||
Three months ended | |||||||||||||||
(in thousands) | Price | Cost | Volume | $ Change | |||||||||||
Expendable Tools | $ | (428 | ) | $ | (109 | ) | $ | (312 | ) | $ | (849 | ) |
Three months ended | Basis point | |||||||
January 2, 2016 | December 27, 2014 | change | ||||||
Selling, general & administrative | 25.7 | % | 23.7 | % | 200 | |||
Research & development | 22.3 | % | 18.2 | % | 410 | |||
Total | 48.0 | % | 41.9 | % | 610 |
Three months ended | |||||||||||||||
(dollar amounts in thousands) | January 2, 2016 | December 27, 2014 | $ Change | % Change | |||||||||||
Interest income | $ | 622 | $ | 262 | $ | 360 | 137.4 | % | |||||||
Interest expense | $ | (273 | ) | $ | (303 | ) | $ | 30 | (9.9 | )% |
Three months ended | ||||||||
(in thousands) | January 2, 2016 | December 27, 2014 | ||||||
(Loss) / Income from operations before income taxes | $ | (1,356 | ) | $ | 9,685 | |||
Income tax (benefit) / expense | (1,265 | ) | 1,843 | |||||
Net (loss) / income | $ | (91 | ) | $ | 7,842 | |||
Effective tax rate (benefit) | (93.3 | )% | 19.0 | % |
As of | ||||||||||||
(dollar amounts in thousands) | January 2, 2016 | October 3, 2015 | Change | |||||||||
Cash and cash equivalents | $ | 492,935 | $ | 498,614 | $ | (5,679 | ) | |||||
Percentage of total assets | 55.8 | % | 55.1 | % |
Three months ended | ||||||||
(in thousands) | January 2, 2016 | December 27, 2014 | ||||||
Net cash provided by operating activities | $ | 7,694 | $ | 46,442 | ||||
Net cash used in investing activities | (1,612 | ) | (4,176 | ) | ||||
Net cash used in financing activities | (12,425 | ) | (7,621 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | 664 | (36 | ) | |||||
Changes in cash and cash equivalents | $ | (5,679 | ) | $ | 34,609 | |||
Cash and cash equivalents, beginning of period | 498,614 | 587,981 | ||||||
Cash and cash equivalents, end of period | $ | 492,935 | $ | 622,590 |
Payments due by fiscal period | ||||||||||||||||||||
(in thousands) | Total | Less than 1 year | 1 - 3 years | 3 - 5 years | More than 5 years | |||||||||||||||
Current and long-term liabilities: | ||||||||||||||||||||
Pension plan obligations | $ | 1,901 | $ | — | $ | — | $ | — | $ | 1,901 | ||||||||||
Severance (1) | 2,590 | 764 | 1,826 | |||||||||||||||||
Operating lease retirement obligations | 1,569 | 127 | 286 | 1,156 | ||||||||||||||||
Long-term income taxes payable | 4,986 | — | — | — | 4,986 | |||||||||||||||
Total Obligations and Contingent Payments reflected on the Consolidated Financial Statements | $ | 11,046 | $ | 127 | $ | 1,050 | $ | — | $ | 9,869 | ||||||||||
Contractual Obligations: | ||||||||||||||||||||
Inventory purchase obligations (2) | $ | 104,808 | $ | 104,808 | $ | — | $ | — | $ | — | ||||||||||
Operating lease obligations (3) | 30,508 | 4,806 | 7,834 | 6,767 | 11,101 | |||||||||||||||
Total Obligations and Contingent Payments not reflected on the Consolidated Financial Statements | $ | 135,316 | $ | 109,614 | $ | 7,834 | $ | 6,767 | $ | 11,101 |
(1) | In accordance with regulations in some of our foreign subsidiaries, we are required to provide for severance obligations that are payable when an employee leaves the Company. |
(2) | We order inventory components in the normal course of our business. A portion of these orders are non-cancellable and a portion may have varying penalties and charges in the event of cancellation. |
(3) | We have minimum rental commitments under various leases (excluding taxes, insurance, maintenance and repairs, which are also paid by us) primarily for various facility and equipment leases, which expire periodically through 2026 (not including lease extension options, if applicable). |
• | risks of war and civil disturbances or other events that may limit or disrupt manufacturing and markets; |
• | seizure of our foreign assets, including cash; |
• | longer payment cycles in foreign markets; |
• | foreign exchange restrictions and capital controls; |
• | restrictions on the repatriation of our assets, including cash; |
• | significant foreign and U.S. taxes on repatriated cash; |
• | difficulties of staffing and managing dispersed international operations; |
• | possible disagreements with tax authorities; |
• | episodic events outside our control such as, for example, outbreaks of influenza or other illnesses; |
• | natural disasters such as earthquakes, fires or floods; |
• | tariff and currency fluctuations; |
• | changing political conditions; |
• | labor work stoppages and strikes in our factories or the factories of our suppliers; |
• | foreign governments' monetary policies and regulatory requirements; |
• | less protective foreign intellectual property laws; |
• | new laws and regulations, such as Trans-Pacific Partnership Agreement (TPP); and |
• | legal systems which are less developed and may be less predictable than those in the U.S. |
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares That May Yet Be Purchase Under the Plans or Programs (1) | ||||||||
October 4, 2015 to October 3l, 2015 | 832 | 10.05 | 832 | $ | 13.2 | |||||||
November 1, 2015 to December 5, 2015 | 399 | 10.99 | 399 | $ | 8.8 | |||||||
December 6, 2015 to January 2, 2016 | 9 | 10.59 | 9 | $ | 8.7 | |||||||
Total for three months ended January 2, 2016 | 1,240 | 1,240 | ||||||||||
Exhibit No. | Description | |
3.1 | The Company's Amended and Restated By-Laws, dated October 22, 2015, are incorporated herein by reference to Exhibit 3(ii) to the Company's Current Report on Form 8-K dated October 22, 2015. | |
10.1 | Kulicke & Soffa Industries, Inc. 2009 Equity Plan Restricted Share Unit Award Agreement, is incorporated herein by reference to Exhibit 10.35 to the Company's Annual Report on Form 10-K for the year ended October 3, 2015.* | |
10.2 | Letter Agreement between the Company and Bruno Guilmart, dated December 3, 2015. | |
31.1 | Certification of Jonathan Chou, interim Chief Executive Officer of Kulicke and Soffa Industries, Inc., pursuant to Rule 13a-14(a) or Rule15d-14(a). | |
31.2 | Certification of Jonathan Chou, Chief Financial Officer of Kulicke and Soffa Industries, Inc., pursuant to Rule 13a-14(a) or Rule 15d-14(a). | |
32.1 | Certification of Jonathan Chou, interim Chief Executive Officer of Kulicke and Soffa Industries, Inc., pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2 | Certification of Jonathan Chou, Chief Financial Officer of Kulicke and Soffa Industries, Inc., pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS | XBRL Instance Document. | |
101.SCH | XBRL Taxonomy Extension Schema Document. | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. |
KULICKE AND SOFFA INDUSTRIES, INC. | ||
Date: February 4, 2016 | By: | /s/ JONATHAN CHOU |
Jonathan Chou | ||
Interim Chief Executive Officer, Chief Financial Officer |
Exhibit No. | Description |
3.1 | The Company's Amended and Restated By-Laws, dated October 22, 2015, are incorporated herein by reference to Exhibit 3(ii) to the Company's Current Report on Form 8-K dated October 22, 2015. |
10.1 | Kulicke & Soffa Industries, Inc. 2009 Equity Plan Restricted Share Unit Award Agreement, is incorporated herein by reference to Exhibit 10.35 to the Company's Annual Report on Form 10-K for the year ended October 3, 2015.* |
10.2 | Letter Agreement between the Company and Bruno Guilmart, dated December 3, 2015. |
31.1 | Certification of Jonathan Chou, interim Chief Executive Officer of Kulicke and Soffa Industries, Inc., pursuant to Rule 13a-14(a) or Rule15d-14(a). |
31.2 | Certification of Jonathan Chou, Chief Financial Officer of Kulicke and Soffa Industries, Inc., pursuant to Rule 13a-14(a) or Rule 15d-14(a). |
32.1 | Certification of Jonathan Chou, interim Chief Executive Officer of Kulicke and Soffa Industries, Inc., pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2 | Certification of Jonathan Chou, Chief Financial Officer of Kulicke and Soffa Industries, Inc., pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS | XBRL Instance Document. |
101.SCH | XBRL Taxonomy Extension Schema Document. |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. |
Very truly yours, | |
/s/ JONATHAN CHOU | |
Jonathan Chou | |
Interim CEO & CFO |
/s/ BRUNO GUILMART | |
Bruno Guilmart | |
December 3, 2015 | |
Date |
/s/ BRUNO GUILMART | |
Bruno Guilmart |
1. | I have reviewed this quarterly report on Form 10-Q of Kulicke and Soffa Industries, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: February 4, 2016 | By: | /s/ JONATHAN CHOU |
Jonathan Chou | ||
Interim Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Kulicke and Soffa Industries, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversly affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: February 4, 2016 | By: | /s/ JONATHAN CHOU |
Jonathan Chou | ||
Senior Vice President and Chief Financial Officer |
1. | the Quarterly Report on Form 10-Q of Kulicke and Soffa Industries, Inc. for the three months ended January 2, 2016 (the “January 2, 2016 Form 10-Q”), as filed with the Securities and Exchange Commission, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
2. | the information contained in the January 2, 2016 Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Kulicke and Soffa Industries, Inc. |
Date: February 4, 2016 | By: | /s/ JONATHAN CHOU |
Jonathan Chou | ||
Interim Chief Executive Officer |
Date: February 4, 2016 | By: | /s/ JONATHAN CHOU |
Jonathan Chou | ||
Senior Vice President and Chief Financial Officer |
DOCUMENT AND ENTITY INFORMATION - shares |
3 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Feb. 01, 2016 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | KULICKE & SOFFA INDUSTRIES INC | |
Entity Central Index Key | 0000056978 | |
Current Fiscal Year End Date | --10-01 | |
Entity Filer Category | Large Accelerated Filer | |
Trading Symbol | klic | |
Entity Common Stock, Shares Outstanding | 70,363,966 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jan. 02, 2016 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2016 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Jan. 02, 2016 |
Oct. 03, 2015 |
---|---|---|
Consolidated Balance Sheets Parenthetical [Abstract] | ||
Allowance for doubtful accounts and notes receivable | $ 621 | $ 621 |
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 | 83,146,000 | 82,643,000 |
Common stock, shares outstanding | 70,503,000 | 71,240,000 |
Treasury stock, shares | 12,643,000 | 11,403,000 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Dec. 27, 2014 |
|
Income Statement [Abstract] | ||
Net revenue | $ 108,534 | $ 107,438 |
Cost of sales | 58,113 | 52,704 |
Gross profit | 50,421 | 54,734 |
Selling, general and administrative | 27,932 | 25,427 |
Research and development | 24,194 | 19,581 |
Operating expenses | 52,126 | 45,008 |
(Loss) / Income from operations | (1,705) | 9,726 |
Interest income | 622 | 262 |
Interest expense | (273) | (303) |
(Loss) / Income from operations before income taxes | (1,356) | 9,685 |
Income tax (benefit) / expense | (1,265) | 1,843 |
Net (loss) / income | $ (91) | $ 7,842 |
Net income per share: | ||
Basic (in dollars per share) | $ 0.00 | $ 0.10 |
Diluted (in dollars per share) | $ 0.00 | $ 0.10 |
Weighted average shares outstanding: | ||
Basic (in shares) | 70,738 | 76,888 |
Diluted (in shares) | 70,738 | 77,432 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Dec. 27, 2014 |
|
Statement of Comprehensive Income [Abstract] | ||
Net (loss) / income | $ (91) | $ 7,842 |
Other comprehensive income: | ||
Foreign currency translation adjustment | (1,130) | (679) |
Unrecognized actuarial loss, Switzerland pension plan, net of tax | 28 | 0 |
Foreign currency translation and pension plan, net of tax | (1,102) | (679) |
Derivatives designated as hedging instruments: | ||
Unrealized loss on derivative instruments, net of tax | (187) | (640) |
Reclassification adjustment for loss on derivative instruments recognized, net of tax | 89 | 248 |
Net decrease from derivatives designated as hedging instruments, net of tax | (98) | (392) |
Total other comprehensive loss | (1,200) | (1,071) |
Comprehensive (loss) / income | $ (1,291) | $ 6,771 |
BASIS OF PRESENTATION |
3 Months Ended |
---|---|
Jan. 02, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION These consolidated 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 financial statements are unaudited and, in management's opinion, include all adjustments (consisting only of normal and recurring adjustments) necessary for a fair presentation of results for these interim periods. The interim consolidated 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 October 3, 2015, filed with the Securities and Exchange Commission, which includes Consolidated Balance Sheets as of October 3, 2015 and September 27, 2014, 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 October 3, 2015. 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 30th. Fiscal 2016 quarters end on January 2, 2016, April 2, 2016, July 2, 2016 and October 1, 2016. In fiscal years consisting of 53 weeks, the fourth quarter will consist of 14 weeks. Fiscal 2015 quarters ended on December 27, 2014, March 28, 2015, June 27, 2015 and October 3, 2015. Nature of Business The Company designs, manufactures and sells capital equipment and expendable 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, 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, expendable 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 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 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, valuation allowances for deferred tax assets and deferred tax liabilities, repatriation of un-remitted foreign subsidiary earnings, equity-based compensation expense, and warranties. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable. As a result, management makes judgments regarding the carrying values of its assets and liabilities that are not readily apparent from other sources. Authoritative pronouncements, historical experience and assumptions are used as the basis for making estimates, and on an ongoing basis, management evaluates these estimates. Actual results may differ from these estimates. Vulnerability to Certain Concentrations Financial instruments which may subject the Company to concentrations of credit risk as of January 2, 2016 and October 3, 2015 consisted primarily of short-term investments and 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 expendable tools to a relatively small number of large manufacturers in a highly concentrated industry. Write-offs of uncollectible accounts have historically not been significant; however, the Company monitors its customers' financial strength to reduce the risk of loss. The Company's products are complex and require raw materials, components and subassemblies having a high degree of reliability, accuracy and performance. The Company relies on subcontractors to manufacture many of these components and subassemblies and it relies on sole source suppliers for some important components and raw material inventory. Foreign Currency Translation and Remeasurement The majority of the Company's business is transacted in U.S. dollars; however, the functional currencies of some of the Company's subsidiaries are their local currencies. In accordance with ASC No. 830, Foreign Currency Matters (“ASC 830”), for a subsidiary of the Company that has a functional currency other than the U.S. dollar, gains and losses resulting from the translation of the functional currency into U.S. dollars for financial statement presentation are not included in determining net income, but are accumulated in the cumulative translation adjustment account as a separate component of shareholders' equity (accumulated other comprehensive income (loss)). Under ASC 830, cumulative translation adjustments are not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries. Gains and losses resulting from foreign currency transactions are included in the determination of net income. The Company's operations are exposed to changes in foreign currency exchange rates due to transactions denominated in currencies other than the location's functional currency. The Company is also exposed to foreign currency fluctuations that impact the remeasurement of net monetary assets of those operations whose functional currency, the U.S. dollar, differs from their respective local currencies, most notably in Israel, Malaysia, 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 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 six months, are recorded at fair value and are included in prepaid expenses and other current assets, or other 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 statement of income as the impact of the hedged transaction. Derivatives that we designate as cash flow hedges are classified in the consolidated 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. As of January 2, 2016 and October 3, 2015, fair value approximated the cost basis for cash equivalents. Investments Investments, other than cash equivalents, are classified as “trading,” “available-for-sale” or “held-to-maturity,” in accordance with ASC No. 320, Investments-Debt & Equity Securities, and depending upon the nature of the investment, its ultimate maturity date in the case of debt securities, and management's intentions with respect to holding the securities. Investments classified as “trading” are reported at fair market value, with unrealized gains or losses included in earnings. Investments classified as “available-for-sale” are reported at fair market value, with net unrealized gains or losses reflected as a separate component of shareholders' equity (accumulated other comprehensive income (loss)). The fair market value of trading and available-for-sale securities is determined using quoted market prices at the balance sheet date. Investments classified as held-to-maturity are reported at amortized cost. Realized gains and losses are determined on the basis of specific identification of the securities sold. Allowance for Doubtful Accounts The Company maintains allowances for doubtful accounts for estimated losses resulting from its customers' failure to make required payments. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The Company is also subject to concentrations of customers and sales to a few geographic locations, which could also impact the collectability of certain receivables. If global or regional economic conditions deteriorate or political conditions were to change in some of the countries where the Company does business, it could have a significant impact on the results of operations, and the Company's ability to realize the full value of its accounts receivable. Inventories Inventories are stated at the lower of cost (on a first-in first-out basis) or net realizable value. In the fourth quarter of 2015, we adopted Accounting Standard Update 2015-11, Simplifying the Measurement of Inventory, which requires that inventory be measured at the lower of cost or net realizable value rather than the lower of cost or market. The adoption of this standard did not have a material impact on our financial statements. 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 expendable 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 assumptions 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 and equipment 3 to 10 years; 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. 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; and significant changes in market capitalization. During the three months ended January 2, 2016, no triggering events occurred. Accounting for Impairment of Goodwill The Company operates two reportable segments: Equipment and Expendable Tools. Goodwill was recorded for the acquisitions of Orthodyne Electronics Corporation ("Orthodyne") and Assembléon in 2009 and 2015, respectively. We assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If, after assessing the qualitative factors, a company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying value, then performing the two-step impairment test is unnecessary. However, if a company concludes otherwise, then it is required to perform the first step of the two-step goodwill impairment test. If the carrying value of a reporting unit exceeds its fair value in the first step of the test, then a company is required to perform the second step of the goodwill impairment test to measure the amount of the reporting unit's goodwill impairment loss, if any. 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. During the three months ended January 2, 2016, no triggering events occurred. 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 6 below. Revenue Recognition In accordance with ASC No. 605, Revenue Recognition, the Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, the collectability is reasonably assured, and customer acceptance, when applicable, has been received or we otherwise have been released from customer acceptance obligations. If terms of the sale provide for a customer acceptance period, revenue is recognized upon the expiration of the acceptance period or customer acceptance, whichever occurs first. The Company’s standard terms are ex works (the Company’s factory), with title transferring to its customer at the Company’s loading dock or upon embarkation. The Company has a small percentage of sales with other terms, and revenue is recognized in accordance with the terms of the related customer purchase order. 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 which 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 liability method. The Company records a valuation allowance to reduce its deferred tax assets to the amount it expects is more likely than not to be realized. While the Company has considered future taxable income and its ongoing tax planning strategies in assessing the need for the valuation allowance, if it were to determine that it would be able to realize its deferred tax assets in the future in excess of its net recorded amount, an adjustment to the deferred tax asset would increase income in the period when such determination was made. Likewise, should the Company determine it would not be able to realize all or part of its net deferred tax assets in the future, an adjustment to the deferred tax asset would decrease income in the period when such determination was made. In accordance with ASC No. 740 Topic 10, Income Taxes, General (“ASC 740.10”), the Company accounts for uncertain tax positions taken or expected to be taken in its income tax return. Under ASC 740.10, the Company utilizes a two-step approach for evaluating uncertain tax positions. Step one, or recognition, requires a company to determine if the weight of available evidence indicates a tax position is more likely than not to be sustained upon audit, including resolution of related appeals or litigation processes, if any. 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. 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 market-based restricted stock is determined using a Monte-Carlo valuation model, and compensation expense associated with time-based and performance-based restricted stock is determined based on the number of shares granted and the fair value on the date of grant. The fair value of the Company's stock option awards are estimated using a Black-Scholes option valuation model. In addition, the calculation of equity-based compensation costs requires that the Company estimate the number of awards that will be forfeited during the vesting period. 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 includes the weighted average number of common shares and the dilutive effect of stock options, restricted stock and share unit awards and convertible subordinated notes outstanding during the period, when such instruments are dilutive. In accordance with ASC No. 260.10.55, Earnings per Share - Implementation & Guidance, the Company treats all outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends as participating in undistributed earnings with common shareholders. Awards of this nature are considered participating securities and the two-class method of computing basic and diluted EPS must be applied. 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 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 and equipment, deferred revenue, intangible assets and related deferred tax liabilities, useful lives of 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 In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC”) 605, Revenue Recognition. The new standard provides for a single five-step model to be applied to all revenue contracts with customers. The new standard also requires additional financial statement disclosures that will enable users to understand the nature, amount, timing and uncertainty of revenue and cash flows relating to customer contracts. Companies have an option to use either a retrospective approach or cumulative effect adjustment approach to implement the standard. There is no option for early adoption. In July 2015, the FASB decided to delay the effective date of the new revenue standard by one year. Under the proposal, the new guidance will be effective as of the beginning of our 2018 fiscal year. We are currently evaluating the impact of the new guidance on our financial statements and have not yet selected a transition approach to implement the standard. In February 2015, the FASB issued ASU 2015-02 – Amendments to the Consolidation Analysis, which amends the consolidation requirements in ASC 810 Consolidation. ASU 2015-02 makes targeted amendments to the current consolidation guidance for VIEs, which could change consolidation conclusions. This ASU will be effective for us beginning in our first quarter of 2017 and early adoption is permitted. We are evaluating the effects of the adoption of this ASU on our financial statements. In April 2015, the FASB issued ASU 2015-05, which provides additional guidance to customers about whether a cloud computing arrangement includes a software license. Under ASU 2015-05, if a software cloud computing arrangement contains a software license, customers should account for the license element of the arrangement in a manner consistent with the acquisition of other software licenses. If the arrangement does not contain a software license, customers should account for the arrangement as a service contract. ASU 2015-05 also removes the requirement to analogize to ASC 840-10 – Leases to determine the asset acquired in a software licensing arrangement. This ASU will be effective for us beginning in our first quarter of 2017 and early adoption is permitted. We are evaluating the effects of the adoption of this ASU on our financial statements. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740), to simplify the presentation of deferred income taxes. Under the new standard, both deferred tax liabilities and assets are required to be classified as noncurrent in a classified balance sheet. ASU 2015-17 will become effective for fiscal years, and the interim periods within those years, beginning after December 15, 2016 (our fiscal 2018), with early adoption allowed. As of October 3, 2015, we had deferred taxes that were classified as current and noncurrent. During the first quarter of fiscal 2016, we elected to prospectively adopt ASU 2015-17, thus reclassifying current deferred taxes to noncurrent on the accompanying consolidated balance sheet. The prior reporting period was not retrospectively adjusted. The adoption of this guidance had no impact on our consolidated results of income and comprehensive income. As of January 2, 2016, $1.3 million and $2.8 million of the net current deferred tax assets have been classified as long-term deferred tax assets and as an offset against long-term deferred tax liabilities, respectively. |
REVISION OF PREVIOUSLY REPORTED INCOME TAXES AND DEFERRED TAX LIABILITIES |
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REVISION OF PREVIOUSLY REPORTED INCOME TAXES AND DEFERRED TAX LIABILITIES | REVISION OF PREVIOUSLY REPORTED INCOME TAXES AND DEFERRED TAX LIABILITIES In the first quarter of 2016, the Company identified an error related to the income tax expense and related deferred income tax liabilities accounts that impacted the Company’s previously issued interim and annual consolidated financial statements. The adjustment relates to the local taxes in a foreign jurisdiction that resulted in an increased provision for income taxes expense and deferred income tax liabilities that should have been recorded prior to fiscal 2014. The Company determined that this error was not material to any of the Company’s prior annual and interim period consolidated financial statements and therefore, amendments of previously filed reports were not required. However, the Company determined that the impact of the correction may be considered material to the estimated income for the fiscal 2016. As such, a revision for the correction is reflected in the financial information of the applicable prior periods in this Form 10-Q filing and disclosure of the revised amount on other prior periods will be reflected in future filings covering the applicable period. The error resulted in a cumulative correction to beginning retained earnings and deferred tax liabilities of $2.6 million on the Consolidated Balance Sheet as of October 3, 2015. Since the error relates to financial periods prior to fiscal 2014, there was no impact to the Consolidated Statements of Operations, the Consolidated Statements of Comprehensive Income and the Consolidated Statements of Cash Flows for the three months ended January 2, 2016 and December 27, 2014. The impact of this revision for period presented within this quarterly report on Form 10-Q are shown in the table below: CONSOLIDATED BALANCE SHEET
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RESTRUCTURING |
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RESTRUCTURING | RESTRUCTURING On September 29, 2015, the Company implemented a plan to streamline its global operations and functions. As part of this plan, our workforce was reduced by 45 employees. The following table reflects severance activity during the three months ended January 2, 2016:
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BALANCE SHEET COMPONENTS |
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BALANCE SHEET COMPONENTS | BALANCE SHEET COMPONENTS The following tables reflect the components of significant balance sheet accounts as of January 2, 2016 and October 3, 2015:
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BUSINESS COMBINATION | BUSINESS COMBINATIONS On January 9, 2015, Kulicke & Soffa Holdings B.V. (“KSH”), the Company's wholly owned subsidiary, acquired all of the outstanding equity interests of Assembléon. The cash purchase price of approximately $97.4 million (EUR 80 million) consisted of $72.5 million for 100% of the equity of Assembléon and $24.9 million which was used by Assembléon to settle intercompany loans with its parent company. The acquisition of Assembléon was accounted for in accordance with ASC No. 805, Business Combinations, using the acquisition method. On January 9, 2016, the Company finalized the valuation of the tangible and identifiable intangible assets and liabilities in connection with the acquisition of Assembléon and no further adjustment was recorded. As of January 2, 2016, $13.5 million (EUR 12 million) was held in escrow for a period of eighteen months from the acquisition date as security pending the completion of Assembleon Holding B.V.'s obligations as seller under the Agreement. The following table summarizes the allocation of the assets acquired and liabilities assumed based on the fair values as of the acquisition date and related useful lives of the finite-lived intangible assets acquired:
Tangible net assets (liabilities) were valued at their respective carrying amounts, which the Company believes approximate their current fair values at the acquisition date. The valuation of identifiable intangible assets acquired reflects management’s estimates based on, among other factors, use of established valuation methods. The technology/software and product brand name was determined using the relief from royalty method. Customer relationships were valued by using multi-period excess earnings method. Identifiable intangible assets with definite lives are amortized over the period of estimated benefit using the straight-line method and the estimated useful lives of six to fifteen years. The straight-line method of amortization represents the Company’s best estimate of the distribution of the economic value of the identifiable intangible assets. Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired. None of the goodwill recorded as part of the acquisition will be deductible for income tax purposes. In connection with the acquisition of Assembléon, the Company recorded deferred tax liabilities relating to the acquired intangible assets, which is partially offset by the net amount of acquired net operating losses. The net amount of acquired net operating losses is comprised of net operating losses less the tax reserves and valuation allowance. The Company has recorded long-term income tax payable due to uncertain tax positions with respect to certain Assembléon entities. |
GOODWILL AND INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill Intangible assets classified as goodwill are not amortized. 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 its business outlook processes. The Company performed its annual impairment test in the fourth quarter of fiscal 2015 and concluded that no impairment charge was required. During the three months ended January 2, 2016, the Company reviewed the 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. In 2009, the Company recorded goodwill when it acquired Orthodyne and added wedge bonder products to its business. On January 9, 2015, KSH, the Company's wholly owned subsidiary, acquired all of the outstanding equity interests of Assembléon in an all cash transaction for approximately $97.4 million (EUR 80 million). Assembléon, together with its subsidiaries, offers assembly equipment, processes and services for the automotive, industrial, and advanced packaging markets. The acquisition expanded the Company's presence in automotive, industrial and advanced packaging markets. The following table summarizes the Company's recorded goodwill as of January 2, 2016 and October 3, 2015:
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 January 2, 2016 and October 3, 2015:
The following table reflects estimated annual amortization expense related to intangible assets as of January 2, 2016:
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CASH AND CASH EQUIVALENTS |
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Cash and Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS 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. We carry these investments at fair value, based on quoted market prices or other readily available market information. Cash and cash equivalents consisted of the following as of January 2, 2016:
Cash and cash equivalents consisted of the following as of October 3, 2015:
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FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASURMENTS | FAIR VALUE MEASURMENTS 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 months ended January 2, 2016. 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. Fair Value of Financial Instruments Amounts reported as cash and equivalents, short-term investments, accounts receivables, prepaid expenses and other current assets, accounts payable and accrued expenses approximate fair value. The fair values of our financial assets and liabilities at January 2, 2016 were determined using the following inputs:
The fair values of our financial assets and liabilities at October 3, 2015 were determined using the following inputs:
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DERIVATIVES FINANCIAL INSTRUMENTS (Notes) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVES FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS The Company’s international operations are exposed to changes in foreign exchange rates due to transactions denominated in currencies other than U.S. dollars. Most of the Company’s revenue and cost of materials are transacted in U.S. dollars. However, a significant amount of the Company’s operating expenses are denominated in local currencies, primarily in Singapore. The foreign currency exposure of our operating expenses is generally hedged with foreign exchange forward contracts. The Company’s foreign exchange risk management programs include using foreign exchange forward contracts with cash flow hedge accounting designation to hedge exposures to the variability in the U.S.-dollar equivalent of forecasted non-U.S.-dollar-denominated operating expenses. These instruments generally mature within 6 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 statements of income as the impact of the hedged transaction. There were no outstanding derivative instruments as of October 3, 2015. The fair value of derivative instruments on our Consolidated Balance Sheet as of January 2, 2016 was as follows:
The effects of derivative instruments designated as cash flow hedges in our Consolidated Statements of Income for the three months ended January 2, 2016 and December 27, 2014 are as follows:
(1)Net change in the fair value of the effective portion classified in other comprehensive income (“OCI”). (2)Effective portion classified as selling, general and administrative expense. (3)Ineffective portion and amount excluded from effectiveness testing classified in selling, general and administrative expense. |
DEBT AND OTHER OBLIGATIONS DEBT AND OTHER OBLIGATIONS (Notes) |
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Jan. 02, 2016 | |
Debt Disclosure [Abstract] | |
Debt and Other Obligations | DEBT AND OTHER OBLIGATIONS Financing Obligation On December 1, 2013, Kulicke & Soffa Pte Ltd. (“Pte”), the Company's wholly owned subsidiary, signed a lease with DBS Trustee Limited as trustee of Mapletree Industrial Trust (the “Landlord”) to lease from the Landlord approximately 198,000 square feet, representing approximately 70% of a building in Singapore as our corporate headquarters, as well as a manufacturing, technology, sales and service center (the “Building”). The lease has a 10-year non-cancellable term (the "Initial Term") and contains options to renew for 2 further 10-year terms. The annual rent and service charge for the Initial Term range from $4 million to $5 million Singapore dollars. Pursuant to ASC No. 840, Leases ("ASC 840"), we have classified the Building on our balance sheet as Property, Plant and Equipment, which we are depreciating over its estimated useful life of 25 years. We concluded that the term of the financing obligation is 10 years. This is equal to the non-cancellable term of our lease agreement with the Landlord. At the inception of the lease, the asset and financing obligation recorded on the balance sheet was $20.0 million, which was based on an interest rate of 6.3% over the Initial Term. The financing obligation will be settled through a combination of periodic cash rental payments and the return of the leased property at the expiration of the lease. We do not report rent expense for the property, which is deemed owned for accounting purposes. Rather, rental payments required under the lease are considered debt service and applied to the deemed landlord financing obligation and interest expense. The Building and financing obligation are being amortized in a manner that will not generate a gain or loss upon lease termination. Credit Facility and Bank Guarantee On November 22, 2013, the Company obtained a $5.0 million credit facility with Citibank in connection with the issuance of a bank guarantee to the Landlord in connection with the lease. As of January 2, 2016, the outstanding bank guarantee is $3.5 million Singapore dollars. |
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHAREHOLDERS’ EQUITY AND EMPLOYEE BENEFIT PLANS | SHAREHOLDERS’ EQUITY AND EMPLOYEE BENEFIT PLANS Common Stock and 401(k) Retirement Income Plan The Company has a 401(k) retirement income plan (the “Plan”) for its employees. The Plan allows for employee contributions and matching Company contributions up to 4% or 6% of the employee's contributed amount based upon years of service. The following table reflects the Company’s matching contributions to the Plan during the three months ended January 2, 2016 and December 27, 2014:
Stock Repurchase Program On August 14, 2014, 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 14, 2017. 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. 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 months ended January 2, 2016, the Company repurchased a total of 1.2 million shares of common stock at a cost of $12.8 million. The stock repurchases were recorded in the periods they were delivered, and the payment of $12.8 million was accounted for as treasury stock in the Company’s Consolidated 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. Accumulated Other Comprehensive Loss The following table reflects accumulated other comprehensive income reflected on the Consolidated Balance Sheets as of January 2, 2016 and October 3, 2015:
Equity-Based Compensation As of January 2, 2016, the Company had seven equity-based employee compensation plans (the “Employee Plans”) and three director compensation plans (the “Director Plans”) (collectively, the “Plans”). Under these Plans, market-based share awards (collectively, “market-based restricted stock”), time-based share awards (collectively, “time-based restricted stock”), performance-based share awards (collectively, “performance-based restricted stock”), stock options, or common stock have been granted at 100% of the market price of the Company's common stock on the date of grant. As of January 2, 2016, the Company’s one active plan, the 2009 Equity Plan, had 2.9 million shares of common stock available for grant to its employees and directors.
Equity-based compensation expense recognized in the Consolidated Statements of Operations for the three months ended January 2, 2016 and December 27, 2014 was based upon awards ultimately expected to vest. In accordance with ASC No. 718, Stock Based Compensation, forfeitures have been estimated at the time of grant and were based upon historical experience. The Company reviews the forfeiture rates periodically and makes adjustments as necessary. The following table reflects restricted stock and common stock granted during the three months ended January 2, 2016 and December 27, 2014:
The following table reflects total equity-based compensation expense, which includes restricted stock, stock options and common stock, included in the Consolidated Statements of Operations during the three months ended January 2, 2016 and December 27, 2014:
(1) The selling, general and administrative expense for the three months ended January 2, 2016, includes the reversal of a $2.0 million expense due to the forfeiture of stock awards in connection with the October 2015 retirement of the Company's CEO. The following table reflects equity-based compensation expense, by type of award, for the three months ended January 2, 2016 and December 27, 2014:
(1) The equity-based compensation expense for the three months ended January 2, 2016, includes the reversal of a $2.0 million expense due to the forfeiture of stock awards in connection with the October 2015 retirement of the Company's CEO. |
EARNINGS PER SHARE |
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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. For the three months ended January 2, 2016, 0.1 million shares of restricted stock were excluded due to the Company's net loss. The following table reflects a reconciliation of the shares used in the basic and diluted net income per share computation for the three months ended January 2, 2016 and December 27, 2014:
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INCOME TAXES |
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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 months ended January 2, 2016 and December 27, 2014:
For the three months ended January 2, 2016, the effective income tax rate differed from the federal statutory tax rate primarily due to profits from foreign operations subject to a lower statutory tax rate than the U.S. statutory tax rate, tax benefits from domestic research expenditures, and the impact of tax holidays, offset by an increase for deferred taxes on unremitted earnings, an increase in valuation allowance against certain foreign deferred tax assets and foreign withholding taxes. For the three months ended December 27, 2014, the effective income tax rate differed from the federal statutory tax rate primarily due to profits from foreign operations subject to a lower statutory tax rate than the U.S. statutory tax rate, and the impact of tax holidays, offset by an increase for deferred taxes on unremitted earnings, other U.S. deferred taxes and foreign withholding taxes. The effective tax rate (benefit) for the period ended January 2, 2016 of (93.3)% reflects a year-to-date tax benefit of $(1.3) million on a year-to-date loss of $(1.4) million. The effective tax rate for the period ended December 27, 2014 of 19.0% reflects a year-to-date tax expense of $1.8 million on a year-to-date income of $9.7 million. The tax benefit for the period ended January 2, 2016 of $(1.3) million differed from the tax expense for the period ended December 27, 2014 of $1.8 million was primarily due to higher profits in foreign jurisdiction with lower tax rate and an increase in tax benefit from research and development expenditures. On December 18, 2015, the U.S. federal research tax credits have been permanently extended which resulted in the Company recording a discrete tax benefit for the period ended January 2, 2016. The Company's future effective tax rate would be affected if earnings were lower than anticipated in countries where it has lower statutory rates and higher than anticipated in countries where it has higher statutory rates, by changes in the valuation of its deferred tax assets and liabilities, or by changes in tax laws, regulations, accounting principles, or interpretations thereof. In addition, changes in assertion for foreign earnings permanently or non-permanently reinvested as a result of changes in facts and circumstances could significantly impact the effective tax rate. The Company regularly assesses the effects resulting from these factors to determine the adequacy of its provision for income taxes. It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain unrecognized tax positions will increase or decrease during the next 12 months due to the expected lapse of statutes of limitation and / or settlements of tax examinations. The Company is currently under income tax examination by tax authorities in certain foreign jurisdictions. |
SEGMENT INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | SEGMENT INFORMATION The Company operates two reportable segments: Equipment and Expendable Tools. The Equipment segment manufactures and sells a line of ball bonders, wedge bonders, advanced packaging and surface mount technology solutions. The Company also services, maintains, repairs and upgrades its equipment. The Expendable Tools segment manufactures and sells a variety of expendable tools for a broad range of semiconductor packaging applications. The following table reflects operating information by segment for the three months ended January 2, 2016 and December 27, 2014:
The following table reflects assets by segment as of January 2, 2016 and October 3, 2015:
The following tables reflect capital expenditures and depreciation expense for the three months ended January 2, 2016 and December 27, 2014:
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COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS |
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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. The following table reflects the reserve for product warranty activity for the three months ended January 2, 2016 and December 27, 2014:
Other Commitments and Contingencies The following table reflects obligations not reflected on the Consolidated Balance Sheet as of January 2, 2016:
Pursuant to ASC No. 840, Leases, for lessee's involvement in asset construction, the Company was considered the owner of the Building during the construction phase of the ADL. The building was completed on December 1, 2013 and Pte signed an agreement with the Landlord to lease from the Landlord approximately 198,000 square feet, representing approximately 70% of the Building. Following the completion of construction, we performed a sale-leaseback analysis pursuant to ASC 840-40 and determined that because of our continuing involvement, ASC 840-40 precluded us from derecognizing the asset and associated financing obligation. As such, we reclassified the asset from construction in progress to Property, Plant and Equipment and began to depreciate the building over its estimated useful life of 25 years. We concluded that the term of the financing obligation is 10 years. This is equal to the non-cancellable term of our lease agreement with the Landlord. As of January 2, 2016, we recorded a financing obligation related to the Building of $16.5 million (see Note 10 above). The financing obligation is not reflected in the table above. Concentrations The following table reflects significant customer concentrations as a percentage of net revenue for the three months ended January 2, 2016 and December 27, 2014:
* Represents less than 10% of net revenue The following table reflects significant customer concentrations as a percentage of total accounts receivable as of January 2, 2016 and December 27, 2014:
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SUBSEQUENT EVENTS |
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Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On January 9, 2016, the Company finalized the valuation of the tangible and identifiable intangible assets and liabilities in connection with the acquisition of Assembléon and no further adjustment was recorded. |
BASIS OF PRESENTATION (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation | These consolidated 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 financial statements are unaudited and, in management's opinion, include all adjustments (consisting only of normal and recurring adjustments) necessary for a fair presentation of results for these interim periods. The interim consolidated 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 October 3, 2015, filed with the Securities and Exchange Commission, which includes Consolidated Balance Sheets as of October 3, 2015 and September 27, 2014, 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 October 3, 2015. 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 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 30th. Fiscal 2016 quarters end on January 2, 2016, April 2, 2016, July 2, 2016 and October 1, 2016. In fiscal years consisting of 53 weeks, the fourth quarter will consist of 14 weeks. Fiscal 2015 quarters ended on December 27, 2014, March 28, 2015, June 27, 2015 and October 3, 2015. |
Nature of Business | Nature of Business The Company designs, manufactures and sells capital equipment and expendable 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, 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, expendable 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 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 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, valuation allowances for deferred tax assets and deferred tax liabilities, repatriation of un-remitted foreign subsidiary earnings, equity-based compensation expense, and warranties. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable. As a result, management makes judgments regarding the carrying values of its assets and liabilities that are not readily apparent from other sources. Authoritative pronouncements, historical experience and assumptions are used as the basis for making estimates, and on an ongoing basis, management evaluates these estimates. Actual results may differ from these estimates. |
Vulnerability to Certain Concentrations | Vulnerability to Certain Concentrations Financial instruments which may subject the Company to concentrations of credit risk as of January 2, 2016 and October 3, 2015 consisted primarily of short-term investments and 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 expendable tools to a relatively small number of large manufacturers in a highly concentrated industry. Write-offs of uncollectible accounts have historically not been significant; however, the Company monitors its customers' financial strength to reduce the risk of loss. The Company's products are complex and require raw materials, components and subassemblies having a high degree of reliability, accuracy and performance. The Company relies on subcontractors to manufacture many of these components and subassemblies and it relies on sole source suppliers for some important components and raw material inventory. |
Foreign Currency Translation | Foreign Currency Translation and Remeasurement The majority of the Company's business is transacted in U.S. dollars; however, the functional currencies of some of the Company's subsidiaries are their local currencies. In accordance with ASC No. 830, Foreign Currency Matters (“ASC 830”), for a subsidiary of the Company that has a functional currency other than the U.S. dollar, gains and losses resulting from the translation of the functional currency into U.S. dollars for financial statement presentation are not included in determining net income, but are accumulated in the cumulative translation adjustment account as a separate component of shareholders' equity (accumulated other comprehensive income (loss)). Under ASC 830, cumulative translation adjustments are not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries. Gains and losses resulting from foreign currency transactions are included in the determination of net income. The Company's operations are exposed to changes in foreign currency exchange rates due to transactions denominated in currencies other than the location's functional currency. The Company is also exposed to foreign currency fluctuations that impact the remeasurement of net monetary assets of those operations whose functional currency, the U.S. dollar, differs from their respective local currencies, most notably in Israel, Malaysia, 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 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 six months, are recorded at fair value and are included in prepaid expenses and other current assets, or other 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 statement of income as the impact of the hedged transaction. Derivatives that we designate as cash flow hedges are classified in the consolidated 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. As of January 2, 2016 and October 3, 2015, fair value approximated the cost basis for cash equivalents. |
Investments | Investments Investments, other than cash equivalents, are classified as “trading,” “available-for-sale” or “held-to-maturity,” in accordance with ASC No. 320, Investments-Debt & Equity Securities, and depending upon the nature of the investment, its ultimate maturity date in the case of debt securities, and management's intentions with respect to holding the securities. Investments classified as “trading” are reported at fair market value, with unrealized gains or losses included in earnings. Investments classified as “available-for-sale” are reported at fair market value, with net unrealized gains or losses reflected as a separate component of shareholders' equity (accumulated other comprehensive income (loss)). The fair market value of trading and available-for-sale securities is determined using quoted market prices at the balance sheet date. Investments classified as held-to-maturity are reported at amortized cost. Realized gains and losses are determined on the basis of specific identification of the securities sold. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company maintains allowances for doubtful accounts for estimated losses resulting from its customers' failure to make required payments. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The Company is also subject to concentrations of customers and sales to a few geographic locations, which could also impact the collectability of certain receivables. If global or regional economic conditions deteriorate or political conditions were to change in some of the countries where the Company does business, it could have a significant impact on the results of operations, and the Company's ability to realize the full value of its accounts receivable. |
Inventories | Inventories Inventories are stated at the lower of cost (on a first-in first-out basis) or net realizable value. In the fourth quarter of 2015, we adopted Accounting Standard Update 2015-11, Simplifying the Measurement of Inventory, which requires that inventory be measured at the lower of cost or net realizable value rather than the lower of cost or market. The adoption of this standard did not have a material impact on our financial statements. 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 expendable 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 assumptions 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 and equipment 3 to 10 years; 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. |
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; and significant changes in market capitalization. During the three months ended January 2, 2016, no triggering events occurred. |
Accounting for Impairment of Goodwill | Accounting for Impairment of Goodwill The Company operates two reportable segments: Equipment and Expendable Tools. Goodwill was recorded for the acquisitions of Orthodyne Electronics Corporation ("Orthodyne") and Assembléon in 2009 and 2015, respectively. We assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If, after assessing the qualitative factors, a company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying value, then performing the two-step impairment test is unnecessary. However, if a company concludes otherwise, then it is required to perform the first step of the two-step goodwill impairment test. If the carrying value of a reporting unit exceeds its fair value in the first step of the test, then a company is required to perform the second step of the goodwill impairment test to measure the amount of the reporting unit's goodwill impairment loss, if any. 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. During the three months ended January 2, 2016, no triggering events occurred. 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 6 below. |
Revenue Recognition | Revenue Recognition In accordance with ASC No. 605, Revenue Recognition, the Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, the collectability is reasonably assured, and customer acceptance, when applicable, has been received or we otherwise have been released from customer acceptance obligations. If terms of the sale provide for a customer acceptance period, revenue is recognized upon the expiration of the acceptance period or customer acceptance, whichever occurs first. The Company’s standard terms are ex works (the Company’s factory), with title transferring to its customer at the Company’s loading dock or upon embarkation. The Company has a small percentage of sales with other terms, and revenue is recognized in accordance with the terms of the related customer purchase order. 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 which 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 liability method. The Company records a valuation allowance to reduce its deferred tax assets to the amount it expects is more likely than not to be realized. While the Company has considered future taxable income and its ongoing tax planning strategies in assessing the need for the valuation allowance, if it were to determine that it would be able to realize its deferred tax assets in the future in excess of its net recorded amount, an adjustment to the deferred tax asset would increase income in the period when such determination was made. Likewise, should the Company determine it would not be able to realize all or part of its net deferred tax assets in the future, an adjustment to the deferred tax asset would decrease income in the period when such determination was made. In accordance with ASC No. 740 Topic 10, Income Taxes, General (“ASC 740.10”), the Company accounts for uncertain tax positions taken or expected to be taken in its income tax return. Under ASC 740.10, the Company utilizes a two-step approach for evaluating uncertain tax positions. Step one, or recognition, requires a company to determine if the weight of available evidence indicates a tax position is more likely than not to be sustained upon audit, including resolution of related appeals or litigation processes, if any. 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. |
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 market-based restricted stock is determined using a Monte-Carlo valuation model, and compensation expense associated with time-based and performance-based restricted stock is determined based on the number of shares granted and the fair value on the date of grant. The fair value of the Company's stock option awards are estimated using a Black-Scholes option valuation model. In addition, the calculation of equity-based compensation costs requires that the Company estimate the number of awards that will be forfeited during the vesting period. The fair value of equity-based awards is amortized over the vesting period of the award and the Company elected to use the straight-line method for awards granted after the adoption of ASC 718. |
Earnings per Share | Earnings per Share Earnings per share (“EPS”) are calculated in accordance with ASC No. 260, Earnings per Share. Basic EPS include only the weighted average number of common shares outstanding during the period. Diluted EPS includes the weighted average number of common shares and the dilutive effect of stock options, restricted stock and share unit awards and convertible subordinated notes outstanding during the period, when such instruments are dilutive. In accordance with ASC No. 260.10.55, Earnings per Share - Implementation & Guidance, the Company treats all outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends as participating in undistributed earnings with common shareholders. Awards of this nature are considered participating securities and the two-class method of computing basic and diluted EPS must be applied. |
Accounting for Business Acquisitions | 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 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 and equipment, deferred revenue, intangible assets and related deferred tax liabilities, useful lives of 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 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 In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC”) 605, Revenue Recognition. The new standard provides for a single five-step model to be applied to all revenue contracts with customers. The new standard also requires additional financial statement disclosures that will enable users to understand the nature, amount, timing and uncertainty of revenue and cash flows relating to customer contracts. Companies have an option to use either a retrospective approach or cumulative effect adjustment approach to implement the standard. There is no option for early adoption. In July 2015, the FASB decided to delay the effective date of the new revenue standard by one year. Under the proposal, the new guidance will be effective as of the beginning of our 2018 fiscal year. We are currently evaluating the impact of the new guidance on our financial statements and have not yet selected a transition approach to implement the standard. In February 2015, the FASB issued ASU 2015-02 – Amendments to the Consolidation Analysis, which amends the consolidation requirements in ASC 810 Consolidation. ASU 2015-02 makes targeted amendments to the current consolidation guidance for VIEs, which could change consolidation conclusions. This ASU will be effective for us beginning in our first quarter of 2017 and early adoption is permitted. We are evaluating the effects of the adoption of this ASU on our financial statements. In April 2015, the FASB issued ASU 2015-05, which provides additional guidance to customers about whether a cloud computing arrangement includes a software license. Under ASU 2015-05, if a software cloud computing arrangement contains a software license, customers should account for the license element of the arrangement in a manner consistent with the acquisition of other software licenses. If the arrangement does not contain a software license, customers should account for the arrangement as a service contract. ASU 2015-05 also removes the requirement to analogize to ASC 840-10 – Leases to determine the asset acquired in a software licensing arrangement. This ASU will be effective for us beginning in our first quarter of 2017 and early adoption is permitted. We are evaluating the effects of the adoption of this ASU on our financial statements. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740), to simplify the presentation of deferred income taxes. Under the new standard, both deferred tax liabilities and assets are required to be classified as noncurrent in a classified balance sheet. ASU 2015-17 will become effective for fiscal years, and the interim periods within those years, beginning after December 15, 2016 (our fiscal 2018), with early adoption allowed. As of October 3, 2015, we had deferred taxes that were classified as current and noncurrent. During the first quarter of fiscal 2016, we elected to prospectively adopt ASU 2015-17, thus reclassifying current deferred taxes to noncurrent on the accompanying consolidated balance sheet. The prior reporting period was not retrospectively adjusted. The adoption of this guidance had no impact on our consolidated results of income and comprehensive income. As of January 2, 2016, $1.3 million and $2.8 million of the net current deferred tax assets have been classified as long-term deferred tax assets and as an offset against long-term deferred tax liabilities, respectively. |
REVISION OF PREVIOUSLY REPORTED INCOME TAXES AND DEFERRED TAX LIABILITIES (Tables) |
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Accounting Changes and Error Corrections [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Error Corrections and Prior Period Adjustments | The impact of this revision for period presented within this quarterly report on Form 10-Q are shown in the table below: CONSOLIDATED BALANCE SHEET
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RESTRUCTURING (Tables) |
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Restructuring and Related Costs | The following table reflects severance activity during the three months ended January 2, 2016:
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BALANCE SHEET COMPONENTS (Tables) |
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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 January 2, 2016 and October 3, 2015:
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BUSINESS COMBINATION (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the allocation of the assets acquired and liabilities assumed based on the fair values as of the acquisition date and related useful lives of the finite-lived intangible assets acquired:
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GOODWILL AND INTANGIBLE ASSETS (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The following table summarizes the Company's recorded goodwill as of January 2, 2016 and October 3, 2015:
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Net intangible assets | The following table reflects net intangible assets as of January 2, 2016 and October 3, 2015:
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Estimated annual amortization expense related to intangible assets | The following table reflects estimated annual amortization expense related to intangible assets as of January 2, 2016:
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CASH AND CASH EQUIVALENTS (Tables) |
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Cash and Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash, cash equivalents and short-term investments [Table Text Block] | Cash and cash equivalents consisted of the following as of January 2, 2016:
Cash and cash equivalents consisted of the following as of October 3, 2015:
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FAIR VALUE MEASUREMENTS (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of financial assets and liabilities | The fair values of our financial assets and liabilities at January 2, 2016 were determined using the following inputs:
The fair values of our financial assets and liabilities at October 3, 2015 were determined using the following inputs:
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DERIVATIVES FINANCIAL INSTRUMENTS (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | There were no outstanding derivative instruments as of October 3, 2015. The fair value of derivative instruments on our Consolidated Balance Sheet as of January 2, 2016 was as follows:
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Derivative Instruments, Gain (Loss) | The effects of derivative instruments designated as cash flow hedges in our Consolidated Statements of Income for the three months ended January 2, 2016 and December 27, 2014 are as follows:
(1)Net change in the fair value of the effective portion classified in other comprehensive income (“OCI”). (2)Effective portion classified as selling, general and administrative expense. (3)Ineffective portion and amount excluded from effectiveness testing classified in selling, general and administrative expense. |
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company’s matching contributions to the Plan | The following table reflects the Company’s matching contributions to the Plan during the three months ended January 2, 2016 and December 27, 2014:
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Accumulated other comprehensive income reflected on the Consolidated Balance Sheets | The following table reflects accumulated other comprehensive income reflected on the Consolidated Balance Sheets as of January 2, 2016 and October 3, 2015:
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Restricted stock and common stock granted | The following table reflects restricted stock and common stock granted during the three months ended January 2, 2016 and December 27, 2014:
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Equity-based compensation expense | The following table reflects total equity-based compensation expense, which includes restricted stock, stock options and common stock, included in the Consolidated Statements of Operations during the three months ended January 2, 2016 and December 27, 2014:
(1) The selling, general and administrative expense for the three months ended January 2, 2016, includes the reversal of a $2.0 million expense due to the forfeiture of stock awards in connection with the October 2015 retirement of the Company's CEO. The following table reflects equity-based compensation expense, by type of award, for the three months ended January 2, 2016 and December 27, 2014:
(1) The equity-based compensation expense for the three months ended January 2, 2016, includes the reversal of a $2.0 million expense due to the forfeiture of stock awards in connection with the October 2015 retirement of the Company's CEO. |
EARNINGS PER SHARE (Tables) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of shares used in the basic and diluted net income per share computation | The following table reflects a reconciliation of the shares used in the basic and diluted net income per share computation for the three months ended January 2, 2016 and December 27, 2014:
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INCOME TAXES (Tables) |
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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 months ended January 2, 2016 and December 27, 2014:
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SEGMENT INFORMATION (Tables) |
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Jan. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating information by segment | The following table reflects operating information by segment for the three months ended January 2, 2016 and December 27, 2014:
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Assets by segment | The following table reflects assets by segment as of January 2, 2016 and October 3, 2015:
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Capital expenditures and depreciation expense | The following tables reflect capital expenditures and depreciation expense for the three months ended January 2, 2016 and December 27, 2014:
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COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserve for product warranty activity | The following table reflects the reserve for product warranty activity for the three months ended January 2, 2016 and December 27, 2014:
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Obligations not reflected on the Consolidated Balance Sheet | The following table reflects obligations not reflected on the Consolidated Balance Sheet as of January 2, 2016:
Pursuant to ASC No. 840, Leases, for lessee's involvement in asset construction, the Company was considered the owner of the Building during the construction phase of the ADL. The building was completed on December 1, 2013 and Pte signed an agreement with the Landlord to lease from the Landlord approximately 198,000 square feet, representing approximately 70% of the Building. Following the completion of construction, we performed a sale-leaseback analysis pursuant to ASC 840-40 and determined that because of our continuing involvement, ASC 840-40 precluded us from derecognizing the asset and associated financing obligation. As such, we reclassified the asset from construction in progress to Property, Plant and Equipment and began to depreciate the building over its estimated useful life of 25 years. We concluded that the term of the financing obligation is 10 years. This is equal to the non-cancellable term of our lease agreement with the Landlord. As of January 2, 2016, we recorded a financing obligation related to the Building of $16.5 million (see Note 10 above). The financing obligation is not reflected in the table above. |
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Schedules of Concentration of Risk, by Risk Factor | The following table reflects significant customer concentrations as a percentage of net revenue for the three months ended January 2, 2016 and December 27, 2014:
* Represents less than 10% of net revenue The following table reflects significant customer concentrations as a percentage of total accounts receivable as of January 2, 2016 and December 27, 2014:
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BASIS OF PRESENTATION (Inventories) (Narrative) (Details) |
3 Months Ended |
---|---|
Jan. 02, 2016 | |
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, Plant and Equipment) (Narrative) (Details) |
3 Months Ended |
---|---|
Jan. 02, 2016 | |
Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 25 years |
Leaseholds and Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Estimated Useful Lives | based on the shorter of the life of lease or life of asset |
Software and Software Development Costs [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Minimum [Member] | Machinery and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Maximum [Member] | Machinery and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
BASIS OF PRESENTATION (Recent Accounting Pronouncements) (Details) - USD ($) $ in Thousands |
Jan. 02, 2016 |
Oct. 03, 2015 |
---|---|---|
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Deferred tax assets, current | $ 0 | $ 4,126 |
Deferred tax liability, noncurrent | 29,455 | $ 33,958 |
New Accounting Pronouncement, Early Adoption, Effect [Member] | ||
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Deferred tax assets, noncurrent | 1,300 | |
Deferred tax liability, noncurrent | 2,800 | |
New Accounting Pronouncement, Early Adoption, Effect [Member] | Other Assets [Member] | ||
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Deferred tax assets, current | 1,300 | |
New Accounting Pronouncement, Early Adoption, Effect [Member] | Deferred Income Taxes [Member] | ||
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Deferred tax assets, current | $ 2,800 |
REVISION OF PREVIOUSLY REPORTED INCOME TAXES AND DEFERRED TAX LIABILITIES (Details) - USD ($) $ in Thousands |
Jan. 02, 2016 |
Oct. 03, 2015 |
---|---|---|
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Deferred income taxes | $ 29,455 | $ 33,958 |
TOTAL LIABILITIES | 129,086 | 135,217 |
Retained earnings | 402,772 | 402,863 |
TOTAL SHAREHOLDERS' EQUITY | $ 755,006 | 769,249 |
Error Correction, Income Tax Expense and Deferred Income Tax Liability [Member] | Scenario, Previously Reported [Member] | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Deferred income taxes | 31,316 | |
TOTAL LIABILITIES | 132,575 | |
Retained earnings | 405,505 | |
TOTAL SHAREHOLDERS' EQUITY | 771,891 | |
Error Correction, Income Tax Expense and Deferred Income Tax Liability [Member] | Restatement Adjustment [Member] | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Deferred income taxes | 2,642 | |
TOTAL LIABILITIES | 2,642 | |
Retained earnings | (2,642) | |
TOTAL SHAREHOLDERS' EQUITY | $ (2,642) |
RESTRUCTURING (Details) $ in Thousands |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Jan. 02, 2016
USD ($)
employee
| ||||||
Restructuring and Related Activities [Abstract] | ||||||
Restructuring and Related Cost, Number of Positions Eliminated | employee | 45 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Accrual for estimated severance and benefits, beginning of period | $ 1,538 | [1] | ||||
Provision for severance and benefits | 615 | [2] | ||||
Payment of severance and benefits | (1,488) | |||||
Accrual for estimated severance and benefits, end of period | $ 665 | |||||
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BALANCE SHEET COMPONENTS (Components of significant balance sheet accounts) (Details) - USD ($) $ in Thousands |
Jan. 02, 2016 |
Oct. 03, 2015 |
|||||
---|---|---|---|---|---|---|---|
Inventories, net: | |||||||
Raw materials and supplies | $ 18,888 | $ 23,541 | |||||
Work in process | 19,297 | 24,110 | |||||
Finished goods | 51,046 | 50,518 | |||||
Inventory, gross | 89,231 | 98,169 | |||||
Inventory reserves | (19,583) | (19,073) | |||||
Inventories, net | 69,648 | 79,096 | |||||
Property, plant and equipment, net: | |||||||
Buildings and building improvements | 33,699 | 33,760 | |||||
Leasehold improvements | 19,428 | 19,512 | |||||
Data processing equipment and software | 28,694 | 28,861 | |||||
Machinery, equipment, furniture and fixtures | 52,569 | 52,106 | |||||
Property, plant and equipment, gross | 134,390 | 134,239 | |||||
Accumulated depreciation | (82,314) | (81,005) | |||||
Property, plant and equipment, net | 52,076 | 53,234 | |||||
Accrued expenses and other current liabilities: | |||||||
Wages and benefits | 13,310 | 19,166 | |||||
Accrued customer obligations (1) | [1] | 7,430 | 9,215 | ||||
Commissions and professional fees | 3,015 | 3,880 | |||||
Deferred rent | 2,448 | 2,450 | |||||
Severance (2) | [2] | 1,975 | 1,645 | ||||
Other | 8,632 | 9,615 | |||||
Accrued expenses and other current liabilities | $ 36,810 | $ 45,971 | |||||
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BUSINESS COMBINATION Narrative (Details) € in Millions, $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Jan. 09, 2015
USD ($)
|
Jan. 09, 2015
EUR (€)
|
Jan. 02, 2016
USD ($)
|
Jan. 02, 2016
EUR (€)
|
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Business Acquisition [Line Items] | ||||
Document Period End Date | Jan. 02, 2016 | |||
Assembléon B.V. [Member] | ||||
Business Acquisition [Line Items] | ||||
Purchase price | $ 97.4 | € 80 | ||
Cash consideration | 72.5 | |||
Consideration to settle intercompany loans | $ 24.9 | |||
Escrow deposit | $ 13.5 | € 12 |
BUSINESS COMBINATION Purchase Price Allocation (Details) - USD ($) $ in Thousands |
Jan. 02, 2016 |
Oct. 03, 2015 |
Jan. 09, 2015 |
---|---|---|---|
Noncurrent Assets [Abstract] | |||
Goodwill | $ 81,272 | $ 81,272 | |
Assembléon B.V. [Member] | |||
Current Assets [Abstract] | |||
Accounts receivable | $ 9,941 | ||
Inventories | 19,861 | ||
Prepaid expenses and other current assets | 2,322 | ||
Deferred tax asset | 157 | ||
Noncurrent Assets [Abstract] | |||
Property, plant and equipment | 531 | ||
Intangibles | 61,463 | ||
Goodwill | 39,726 | ||
Deferred income taxes | 638 | ||
Liabilities [Abstract] | |||
Accounts payable | (14,386) | ||
Borrowings financial institutions | (9,491) | ||
Accrued expenses and other current liabilities | (10,561) | ||
Income taxes payable | (1,933) | ||
Deferred tax liabilities | (5,115) | ||
Total purchase price, net of cash acquired | $ 93,153 |
GOODWILL AND INTANGIBLE ASSETS Narrative (Details) - Jan. 09, 2015 € in Millions, $ in Millions |
USD ($) |
EUR (€) |
---|---|---|
Assembléon B.V. [Member] | ||
Business Acquisition [Line Items] | ||
Purchase price | $ 97.4 | € 80 |
GOODWILL AND INTANGIBLE ASSETS Goodwill (Details) - USD ($) $ in Thousands |
Jan. 02, 2016 |
Oct. 03, 2015 |
---|---|---|
Goodwill [Roll Forward] | ||
Balance at January 2, 2016 | $ 81,272 | $ 81,272 |
GOODWILL AND INTANGIBLE ASSETS (Estimated annual amortization expense) (Details) $ in Thousands |
Jan. 02, 2016
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remaining fiscal 2016 | $ 4,994 |
Fiscal 2017 | 6,086 |
Fiscal 2018 | 6,086 |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 6,086 |
Fiscal 2020 and onwards | 32,553 |
Total amortization expense | $ 55,805 |
CASH AND CASH EQUIVALENTS (Details) - USD ($) $ in Thousands |
Jan. 02, 2016 |
Oct. 03, 2015 |
Dec. 27, 2014 |
Sep. 28, 2013 |
---|---|---|---|---|
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents, Amortized Cost | $ 492,935 | $ 498,614 | $ 622,590 | $ 587,981 |
Cash and cash equivalents, Estimated Fair Value | 492,935 | 498,614 | ||
Cash [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents, Amortized Cost | 140,720 | 105,617 | ||
Cash and cash equivalents, Estimated Fair Value | 140,720 | 105,617 | ||
Cash equivalents, Money market funds [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents, Amortized Cost | 58,481 | 155,715 | ||
Cash and cash equivalents, Estimated Fair Value | 58,481 | 155,715 | ||
Cash equivalents, Time deposits [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents, Amortized Cost | 293,734 | 237,282 | ||
Cash and cash equivalents, Estimated Fair Value | $ 293,734 | $ 237,282 |
DERIVATIVES FINANCIAL INSTRUMENTS (Gain (loss) of derivative instruments) (Details) - USD ($) $ in Thousands |
3 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Jan. 02, 2016 |
Dec. 27, 2014 |
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Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Document Period End Date | Jan. 02, 2016 | ||||||||
Foreign Exchange Forward [Member] | Other Comprehensive Income (Loss) [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Net gain (loss) recognized in OCI, net of tax | [1] | $ (187) | $ (640) | ||||||
Foreign Exchange Forward [Member] | Selling, General and Administrative Expenses [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Net gain (loss) reclassified from accumulated OCI into income, net of tax | [2] | (89) | (249) | ||||||
Net gain (loss) recognized in income | [3] | $ 0 | $ 0 | ||||||
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DEBT AND OTHER OBLIGATIONS DEBT AND OTHER OBLIGATIONS (Details) $ in Thousands, SGD in Millions |
12 Months Ended | |||
---|---|---|---|---|
Jan. 02, 2016
USD ($)
|
Sep. 27, 2014
SGD
renewal_option
|
Oct. 03, 2015
USD ($)
|
Dec. 01, 2013
USD ($)
ft²
|
|
Capital Leased Assets [Line Items] | ||||
Area of Land | ft² | 198,000 | |||
Financing obligation | $ 16,508 | $ 16,483 | $ 20,000 | |
Line of Credit Facility, Increase (Decrease), Net | $ 3,500 | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 5,000 | |||
K&S Corporate Headquarters [Member] | ||||
Capital Leased Assets [Line Items] | ||||
Lease Agreement Term | 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 | SGD | SGD 4 | |||
Annual Rent and Service Charge Maximum Range | SGD | SGD 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% |
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Matching contributions to the Plan) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Dec. 27, 2014 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Document Period End Date | Jan. 02, 2016 | |
Cash | $ 393 | $ 295 |
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Accumulated other comprehensive income) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Oct. 03, 2015 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Document Period End Date | Jan. 02, 2016 | |
Loss from foreign currency translation adjustments | $ (1,291) | $ (161) |
Unrecognized actuarial loss Switzerland pension plan, net of tax | (561) | (590) |
Switzerland pension plan curtailment | (346) | (346) |
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax | (98) | 0 |
Accumulated other comprehensive loss | $ (2,296) | $ (1,097) |
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Restricted stock and common stock granted) (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Dec. 27, 2014 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Document Period End Date | Jan. 02, 2016 | |
Equity-based compensation in shares | 737 | 717 |
Market-based restricted stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity-based compensation in shares | 166 | 232 |
Time-based restricted stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity-based compensation in shares | 571 | 472 |
Common stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity-based compensation in shares | 0 | 13 |
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Total equity-based compensation expense) (Details) - USD ($) $ in Thousands |
3 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Jan. 02, 2016 |
Dec. 27, 2014 |
||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||||
Document Period End Date | Jan. 02, 2016 | ||||||
Total equity-based compensation expense | $ (62) | $ (3,435) | |||||
Market-based restricted stock [Member] | |||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||||
Total equity-based compensation expense | [1] | (1,381) | (1,350) | ||||
Time-based restricted stock [Member] | |||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||||
Total equity-based compensation expense | [1] | (1,486) | (1,869) | ||||
Performance-based restricted stock | |||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||||
Total equity-based compensation expense | [1] | (43) | (33) | ||||
Stock options [Member] | |||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||||
Total equity-based compensation expense | 0 | (3) | |||||
Common stock [Member] | |||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||||
Total equity-based compensation expense | 0 | (180) | |||||
Cost of sales [Member] | |||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||||
Total equity-based compensation expense | (128) | (128) | |||||
Selling, general and administrative (1) [Member] | |||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||||
Total equity-based compensation expense | [2] | (770) | (2,499) | ||||
Research and development [Member] | |||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||||
Total equity-based compensation expense | $ (704) | $ (808) | |||||
|
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Narrative) (Details) - USD ($) $ in Thousands, shares in Millions |
3 Months Ended | ||
---|---|---|---|
Jan. 02, 2016 |
Dec. 27, 2014 |
Aug. 14, 2014 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Document Period End Date | Jan. 02, 2016 | ||
Stock Repurchase Program, Authorized Amount | $ 100,000 | ||
Description Of Maximum Percentage Of Employee Contributions and Matching Contributions Based Upon Years Of Service | employee contributions and matching Company contributions up to 4% or 6% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Discount from Market Price, Offering Date | 100.00% | ||
Relative Total Shareholder Return Average Stock Price Calculation Period | 90 days | ||
Total Shareholder Return Award Performance Measurement Period | 3 years | ||
Payments for Repurchase of Common Stock | $ 12,840 | $ 7,638 | |
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Defined Contribution Plan, Employer Matching Contribution, Percent | 4.00% | ||
Share Based Compensation Arrangement By Share Based Payment Award Vesting Percentage | 0.00% | ||
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Defined Contribution Plan, Employer Matching Contribution, Percent | 6.00% | ||
Share Based Compensation Arrangement By Share Based Payment Award Vesting Percentage | 200.00% | ||
Equity Incentive Plan 2009 [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 | 2.9 | ||
August 2014 Share Repurchase Program [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Treasury Stock, Shares, Acquired | 1.2 | ||
Treasury Stock, Value, Acquired, Par Value Method | $ 12,800 |
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 | |
---|---|---|
Jan. 02, 2016 |
Dec. 27, 2014 |
|
NUMERATOR: | ||
Net (loss) / income | $ (91) | $ 7,842 |
DENOMINATOR: | ||
Weighted average shares outstanding - Basic (in shares) | 70,738 | 76,888 |
Stock options (in shares) | 0 | 94 |
Time-based restricted stock (in shares) | 0 | 213 |
Market-based restricted stock (in shares) | 0 | 237 |
Weighted average shares outstanding - Diluted | 70,738 | 77,432 |
EPS: | ||
Net income per share - Basic (in dollars per share) | $ 0.00 | $ 0.10 |
Effect of dilutive shares (in dollars per share) | (0.00) | (0.00) |
Net income per share - Diluted (in dollars per share) | $ 0.00 | $ 0.10 |
INCOME TAXES (Provision for income taxes and the effective tax rate) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Dec. 27, 2014 |
|
Income Tax Disclosure [Abstract] | ||
(Loss) / Income from operations before income taxes | $ (1,356) | $ 9,685 |
Income tax (benefit) / expense | (1,265) | 1,843 |
Net (loss) / income | $ (91) | $ 7,842 |
Effective tax rate (benefit) | 93.30% | 19.00% |
SEGMENT INFORMATION (Operating information by segment) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Dec. 27, 2014 |
|
Net revenue: | ||
Net revenue | $ 108,534 | $ 107,438 |
Cost of sales : | ||
Cost of sales | 58,113 | 52,704 |
Gross profit : | ||
Gross profit | 50,421 | 54,734 |
Operating expenses: | ||
Operating expenses | 52,126 | 45,008 |
Income from operations: | ||
Income from operations | (1,705) | 9,726 |
Equipment [Member] | ||
Net revenue: | ||
Net revenue | 92,974 | 90,956 |
Income from operations: | ||
Income from operations | (6,426) | 5,446 |
Expendable Tools [Member] | ||
Net revenue: | ||
Net revenue | 15,560 | 16,482 |
Income from operations: | ||
Income from operations | $ 4,721 | $ 4,280 |
SEGMENT INFORMATION (Assets by segment) (Details) - USD ($) $ in Thousands |
Jan. 02, 2016 |
Oct. 03, 2015 |
---|---|---|
Segment assets: | ||
Total assets | $ 884,092 | $ 904,466 |
Equipment [Member] | ||
Segment assets: | ||
Total assets | 799,245 | 828,471 |
Expendable Tools [Member] | ||
Segment assets: | ||
Total assets | $ 84,847 | $ 75,995 |
SEGMENT INFORMATION (Capital expenditures and depreciation expense by segment) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Dec. 27, 2014 |
|
Capital expenditures: | ||
Property, Plant and Equipment, Additions | $ 1,394 | $ 2,253 |
Depreciation expense: | ||
Depreciation expense | 2,385 | 2,227 |
Equipment [Member] | ||
Capital expenditures: | ||
Property, Plant and Equipment, Additions | 1,071 | 1,736 |
Depreciation expense: | ||
Depreciation expense | 1,806 | 1,585 |
Expendable Tools [Member] | ||
Capital expenditures: | ||
Property, Plant and Equipment, Additions | 323 | 517 |
Depreciation expense: | ||
Depreciation expense | $ 579 | $ 642 |
SEGMENT INFORMATION (Narrative) (Details) |
3 Months Ended |
---|---|
Jan. 02, 2016
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Reserve for product warranty activity) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Dec. 27, 2014 |
|
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||
Reserve for product warranty, beginning of period | $ 1,856 | $ 1,542 |
Provision for product warranty | 386 | 199 |
Product warranty costs paid | (625) | (526) |
Reserve for product warranty, end of period | $ 1,617 | $ 1,215 |
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Obligations not reflected on the Consolidated Balance Sheet) (Details) $ in Thousands |
Jan. 02, 2016
USD ($)
|
|||||
---|---|---|---|---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||||||
Inventory purchase obligation | $ 104,808 | [1] | ||||
Inventory purchase obligation, Payments due by fiscal year 2016 | 104,808 | [1] | ||||
Inventory purchase obligation, Payments due by fiscal year 2017 | 0 | [1] | ||||
Inventory purchase obligation, Payments due by fiscal year 2018 | 0 | [1] | ||||
Inventory purchase obligation, Payments due by fiscal year 2019 | 0 | [1] | ||||
Inventory purchase obligation, Payments due by fiscal year thereafter | 0 | [1] | ||||
Operating lease obligations | 30,508 | [2] | ||||
Operating lease obligations, Payments due by fiscal year 2016 | 3,680 | [2] | ||||
Operating lease obligations, Payments due by fiscal year 2017 | 4,392 | [2] | ||||
Operating lease obligations, Payments due by fiscal year 2018 | 3,704 | [2] | ||||
Operating lease obligations, Payments due by fiscal year 2019 | 3,435 | [2] | ||||
Operating lease obligations, Payments due by fiscal year thereafter | 15,297 | [2] | ||||
Total | 135,316 | |||||
Total, Payments due by fiscal year 2016 | 108,488 | |||||
Total, Payments due by fiscal year 2017 | 4,392 | |||||
Total, Payments due by fiscal year 2018 | 3,704 | |||||
Total, Payments due by fiscal year 2019 | 3,435 | |||||
Total, Payments due by fiscal year thereafter | $ 15,297 | |||||
|
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Significant customer concentrations) (Details) - Customer Concentration Risk [Member] - Haoseng Industrial Co., Ltd [Member] |
3 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Dec. 27, 2014 |
|
Sales Revenue, Net [Member] | ||
Concentration Risk [Line Items] | ||
Customer concentrations risk percentage | 16.50% | |
Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Customer concentrations risk percentage | 21.70% | 19.00% |
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Narrative) (Details) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Jan. 02, 2016
USD ($)
|
Oct. 03, 2015
USD ($)
|
Dec. 01, 2013
USD ($)
ft²
|
|
Commitments and Contingencies Disclosure [Abstract] | |||
Area of Land | ft² | 198,000 | ||
Percentage Of Building Area Agreed To Lease From Landlord | 70.00% | ||
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 10 years | ||
Period Of Warranty For Manufacturing Defects | 1 year | ||
Lease Expiration Year | 2018 | ||
Financing obligation | $ | $ 16,508 | $ 16,483 | $ 20,000 |