10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 2, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                  to                    .

Commission File No.: 0-121

KULICKE AND SOFFA INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

Pennsylvania	23-1498399
(State or other jurisdiction of incorporation)	(IRS Employer
	Identification No.)

23A Serangoon North Avenue 5, #01-01, Singapore 554369

1005 Virginia Dr., Fort Washington, PA 19034

(Address of principal executive offices and Zip Code)

(215) 784-6000

(Registrant's telephone number, including area code) 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, Without Par Value	KLIC	The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ 

As of July 29, 2022, there were 58,067,945 shares of the Registrant's Common Stock, no par value, outstanding.

KULICKE AND SOFFA INDUSTRIES, INC.

FORM 10 – Q

July 2, 2022

 Index

		Page Number
PART I - FINANCIAL INFORMATION
Item 1.	FINANCIAL STATEMENTS (Unaudited)
	Consolidated Condensed Balance Sheets as of July 2, 2022 and October 2, 2021	1
	Consolidated Condensed Statements of Operations for the three and nine months ended July 2, 2022 and July 3, 2021	2
	Consolidated Condensed Statements of Comprehensive Income for the three and nine months ended July 2, 2022 and July 3, 2021	3
	Consolidated Condensed Statements of Changes in Shareholders' Equity for the three and nine months ended July 2, 2022 and July 3, 2021	4
	Consolidated Condensed Statements of Cash Flows for the nine months ended July 2, 2022 and July 3, 2021	6
	Notes to Consolidated Condensed Financial Statements	7
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	25
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	36
Item 4.	CONTROLS AND PROCEDURES	37
PART II - OTHER INFORMATION
Item 1.	LEGAL PROCEEDINGS	38
Item 1A.	RISK FACTORS	38
Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	38
Item 3.	DEFAULTS UPON SENIOR SECURITIES	39
Item 4.	MINE SAFETY DISCLOSURES	39
Item 5.	OTHER INFORMATION	39
Item 6.	EXHIBITS	40
	SIGNATURES	41

PART I. - FINANCIAL INFORMATION

Item 1. – FINANCIAL STATEMENTS

KULICKE AND SOFFA INDUSTRIES, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)

(in thousands)

	As of
	July 2, 2022		October 2, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	445,781	$	362,788
Short-term investments	300,000		377,000
Accounts and other receivable, net of allowance for doubtful accounts of $0 and $687, respectively	350,045		421,193
Inventories, net	215,281		167,323
Prepaid expenses and other current assets	75,011		23,586
Total current assets	1,386,118		1,351,890
Property, plant and equipment, net	66,510		67,982
Operating right-of-use assets	41,160		41,592
Goodwill	69,787		72,949
Intangible assets, net	35,291		42,752
Deferred tax assets	21,103		15,715
Equity investments	5,397		6,388
Other assets	2,911		2,363
TOTAL ASSETS	$	1,628,277	$	1,601,631
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	98,572		154,636
Operating lease liabilities	5,973		4,903
Income taxes payable	31,060		30,766
Accrued expenses and other current liabilities	138,434		161,570
Total current liabilities	274,039		351,875
Deferred tax liabilities	34,541		32,828
Income taxes payable	62,468		69,422
Operating lease liabilities	35,836		38,084
Other liabilities	14,660		14,185
TOTAL LIABILITIES	$	421,544	$	506,394
Commitments and contingent liabilities (Note 15)
Shareholders' equity:
Preferred stock, without par value: Authorized 5,000 shares; issued - none	$	—	$	—
Common stock, without par value: Authorized 200,000 shares; issued 85,364 and 85,364, respectively; outstanding 58,480 and 61,931 shares, respectively	557,236		550,117
Treasury stock, at cost, 26,884 and 23,433 shares, respectively	(615,689)		(400,412)
Retained earnings	1,286,505		948,554
Accumulated other comprehensive loss	(21,319)		(3,022)
TOTAL SHAREHOLDERS' EQUITY	$	1,206,733	$	1,095,237
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,628,277	$	1,601,631

The accompanying notes are an integral part of these consolidated condensed financial statements.

1

KULICKE AND SOFFA INDUSTRIES, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited)

(in thousands, except per share data)

	Three months ended				Nine months ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Net revenue	$	372,137	$	424,318	$	1,217,307	$	1,032,338
Cost of sales	181,452		228,623		601,674		566,667
Gross profit	190,685		195,695		615,633		465,671
Selling, general and administrative	34,562		39,103		108,609		105,511
Research and development	34,046		36,137		104,496		102,549
Operating expenses	68,608		75,240		213,105		208,060
Income from operations	122,077		120,455		402,528		257,611
Interest income	2,158		564		3,099		1,801
Interest expense	(36)		(41)		(173)		(146)
Income before income taxes	124,199		120,978		405,454		259,266
Provision for income taxes	5,165		7,212		36,813		25,722
Share of results of equity-method investee, net of tax	—		—		—		94
Net income	$	119,034	$	113,766	$	368,641	$	233,450
Net income per share:
Basic	$	2.02	$	1.83	$	6.05	$	3.76
Diluted	$	1.99	$	1.79	$	5.95	$	3.68
Weighted average shares outstanding:
Basic	58,985		62,023		60,951		62,023
Diluted	59,955		63,485		61,940		63,364

 The accompanying notes are an integral part of these consolidated condensed financial statements.

2

KULICKE AND SOFFA INDUSTRIES, INC.

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(in thousands)

	Three months ended				Nine months ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Net income	$	119,034	$	113,766	$	368,641	$	233,450
Other comprehensive income:
Foreign currency translation adjustment	(12,009)		1,868		(18,025)		3,854
Unrecognized actuarial gain/(loss) on pension plan, net of tax	122		(79)		103		1
	(11,887)		1,789		(17,922)		3,855
Derivatives designated as hedging instruments:
Unrealized (loss)/gain on derivative instruments, net of tax	(1,233)		(133)		(1,168)		301
Reclassification adjustment for loss/(gain) on derivative instruments recognized, net of tax	170		(317)		793		(1,295)
Net decrease from derivatives designated as hedging instruments, net of tax	(1,063)		(450)		(375)		(994)
Total other comprehensive (loss)/gain	(12,950)		1,339		(18,297)		2,861
Comprehensive income	$	106,084	$	115,105	$	350,344	$	236,311

The accompanying notes are an integral part of these consolidated condensed financial statements.

3

KULICKE AND SOFFA INDUSTRIES, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)

(in thousands)

	Common Stock			Treasury Stock		Retained Earnings		Accumulated Other Comprehensive (Loss)/Income		Shareholders' Equity
	Shares	Amount
Balances as of October 2, 2021	61,931	$	550,117	$	(400,412)	$	948,554	$	(3,022)	$	1,095,237
Issuance of stock for services rendered	4	197		41		—		—		238
Repurchase of common stock	(276)	—		(15,380)		—		—		(15,380)
Issuance of shares for equity-based compensation	725	(6,963)		6,963		—		—		—
Equity-based compensation	—	5,074		—		—		—		5,074
Cash dividend declared	—	—		—		(10,610)		—		(10,610)
Components of comprehensive income:
Net income	—	—		—		133,606		—		133,606
Other comprehensive loss	—	—		—		—		(989)		(989)
Total comprehensive income/(loss)	—	—		—		133,606		(989)		132,617
Balances as of January 1, 2022	62,384	$	548,425	$	(408,788)	$	1,071,550	$	(4,011)	$	1,207,176
Issuance of stock for services rendered	4	202		35		—		—		237
Repurchase of common stock	(2,944)	(30,000)		(146,153)		—		—		(176,153)
Issuance of shares for equity-based compensation	24	(222)		222		—		—		—
Equity-based compensation	—	4,459		—		—		—		4,459
Cash dividend declared	—	—		—		(10,110)		—		(10,110)
Components of comprehensive income:
Net income	—	—		—		116,001		—		116,001
Other comprehensive loss	—	—		—		—		(4,358)		(4,358)
Total comprehensive income/(loss)	—	—		—		116,001		(4,358)		111,643
Balances as of April 2, 2022	59,468	$	522,864	$	(554,684)	$	1,177,441	$	(8,369)	$	1,137,252
Issuance of stock for services rendered	4	196		41		—		—		237
Repurchase of common stock	(997)	30,000		(61,098)		—		—		(31,098)
Issuance of shares for equity-based compensation	5	(52)		52		—		—		—
Equity-based compensation	—	4,228		—		—		—		4,228
Cash dividend declared	—	—		—		(9,970)		—		(9,970)
Components of comprehensive income:
Net income	—	—		—		119,034		—		119,034
Other comprehensive loss	—	—		—		—		(12,950)		(12,950)
Total comprehensive income/(loss)	—	—		—		119,034		(12,950)		106,084
Balances as of July 2, 2022	58,480	$	557,236	$	(615,689)	$	1,286,505	$	(21,319)	$	1,206,733

4

	Common Stock			Treasury Stock		Retained Earnings		Accumulated Other Comprehensive (Loss)/Income		Shareholders' Equity
	Shares	Amount
Balances as of October 3, 2020	61,558	$	539,213	$	(394,817)	$	616,119	$	(2,521)	$	757,994
Issuance of stock for services rendered	8	96		77		—		—		173
Repurchase of common stock	(48)	—		(1,206)		—		—		(1,206)
Issuance of shares for equity-based compensation	535	(4,076)		4,076		—		—		—
Equity-based compensation	—	3,216		—		—		—		3,216
Cash dividend declared	—	—		—		(8,687)		—		(8,687)
Components of comprehensive income:
Net income	—	—		—		48,363		—		48,363
Other comprehensive income	—	—		—		—		7,763		7,763
Total comprehensive income	—	—		—		48,363		7,763		56,126
Balances as of January 2, 2021	62,053	$	538,449	$	(391,870)	$	655,795	$	5,242	$	807,616
Issuance of stock for services rendered	7	130		55		—		—		185
Repurchase of common stock	(23)	—		(1,110)		—		—		(1,110)
Issuance of shares for equity-based compensation	24	(245)		245		—		—		—
Equity-based compensation	—	3,778		—		—		—		3,778
Cash dividend declared	—	—		—		(8,688)		—		(8,688)
Components of comprehensive income/(loss)
Net income	—	—		—		71,320		—		71,320
Other comprehensive loss	—	—		—		—		(6,241)		(6,241)
Total comprehensive income/(loss)	—	—		—		71,320		(6,241)		65,079
Balances as of April 3, 2021	62,061	$	542,112	$	(392,680)	$	718,427	$	(999)	$	866,860
Issuance of stock for services rendered	4	185		39		—		—		224
Repurchase of common stock	(82)	—		(4,087)		—		—		(4,087)
Issuance of shares for equity-based compensation	3	(40)		40		—		—		—
Equity-based compensation	—	3,918		—		—		—		3,918
Cash dividend declared	—	—		—		(8,678)		—		(8,678)
Components of comprehensive income:
Net income	—	—		—		113,766		—		113,766
Other comprehensive income	—	—		—		—		1,339		1,339
Total comprehensive income	—	—		—		113,766		1,339		115,105
Balances as of July 3, 2021	61,986	$	546,175	$	(396,688)	$	823,515	$	340	$	973,342

 The accompanying notes are an integral part of these consolidated condensed financial statements.

5

KULICKE AND SOFFA INDUSTRIES, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)

(in thousands)

	Nine months ended
	July 2, 2022		July 3, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	368,641	$	233,450
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	15,773		14,552
Impairment of equity investment	1,346		—
Equity-based compensation and employee benefits	14,473		11,504
Gain on disposal of equity method investments	—		(1,046)
Adjustment for doubtful accounts	(245)		(95)
Adjustment for inventory valuation	1,110		(834)
Deferred taxes	(3,675)		(10,587)
Gain on disposal of property, plant and equipment	(129)		25
Unrealized foreign currency translation	(3,806)		719
Share of results of equity-method investee	—		94
Changes in operating assets and liabilities, net of assets and liabilities assumed in businesses combinations:
Accounts and other receivable	71,825		(170,403)
Inventories	(49,230)		(40,771)
Prepaid expenses and other current assets	(50,725)		(2,856)
Accounts payable, accrued expenses and other current liabilities	(84,017)		144,717
Income taxes payable	(6,663)		(2,670)
Other, net	(1,053)		857
Net cash provided by operating activities	273,625		176,656
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of business, net of cash acquired	—		(26,338)
Purchases of property, plant and equipment	(10,380)		(16,747)
Proceeds from sales of property, plant and equipment	119		191
Investment in private equity fund	(397)		—
Disposal of equity-method investments	—		2,115
Purchase of short-term investments	(389,000)		(229,000)
Maturity of short-term investments	466,000		324,000
Net cash provided by investing activities	66,342		54,221
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment on short-term debt	(54,500)		(22,750)
Proceeds from short-term debt	54,500		22,750
Payment for finance lease	(373)		(253)
Repurchase of common stock/treasury stock	(221,139)		(6,953)
Common stock cash dividends paid	(29,393)		(24,776)
Net cash used in financing activities	(250,905)		(31,982)
Effect of exchange rate changes on cash and cash equivalents	(6,069)		977
Changes in cash and cash equivalents	82,993		199,872
Cash and cash equivalents at beginning of period	362,788		188,127
Cash and cash equivalents at end of period	$	445,781	$	387,999
CASH PAID FOR:
Interest	$	173	$	146
Income taxes, net of refunds	$	50,059	$	39,405

The accompanying notes are an integral part of these consolidated condensed financial statements. 

6

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Unaudited

NOTE 1. BASIS OF PRESENTATION

These consolidated condensed financial statements include the accounts of Kulicke and Soffa Industries, Inc. and its subsidiaries (“we,” “us,” “our,” or the “Company”) with appropriate elimination of intercompany balances and transactions.

The interim consolidated condensed financial statements are unaudited and, in management's opinion, include all adjustments (consisting only of normal and recurring adjustments) necessary for a fair statement of results for these interim periods. The interim consolidated condensed financial statements do not include all of the information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended October 2, 2021, filed with the Securities and Exchange Commission, which includes Consolidated Balance Sheets as of October 2, 2021 and October 3, 2020, and the related Consolidated Statements of Operations, Statements of Comprehensive Income, Changes in Shareholders' Equity and Cash Flows for each of the years in the three-year period ended October 2, 2021. The results of operations for any interim period are not necessarily indicative of the results of operations for any other interim period or for a full year.

Fiscal Year    

Each of the Company's first three fiscal quarters end on the Saturday that is 13 weeks after the end of the immediately preceding fiscal quarter. The fourth quarter of each fiscal year ends on the Saturday closest to September 30. Fiscal 2022 quarters end on January 1, 2022, April 2, 2022, July 2, 2022 and October 1, 2022. In fiscal years consisting of 53 weeks, the fourth quarter will consist of 14 weeks. Fiscal 2021 quarters ended on January 2, 2021, April 3, 2021, July 3, 2021 and October 2, 2021.

Nature of Business

The Company designs, manufactures and sells capital equipment and tools as well as services, maintains, repairs and upgrades equipment, all used to assemble semiconductor devices. The Company's operating results depend upon the capital and operating expenditures of semiconductor device manufacturers, integrated device manufacturers (“IDMs”), outsourced semiconductor assembly and test providers (“OSATs”), and other electronics manufacturers including automotive electronics suppliers worldwide which, in turn, depend on the current and anticipated market demand for semiconductors and products utilizing semiconductors. The semiconductor industry is highly volatile and experiences downturns and slowdowns which can have a severe negative effect on the semiconductor industry's demand for semiconductor capital equipment, including assembly equipment manufactured and sold by the Company and, to a lesser extent, tools, including those sold by the Company. These downturns and slowdowns have in the past adversely affected the Company's operating results. The Company believes such volatility will continue to characterize the industry and the Company's operations in the future.

Use of Estimates

The preparation of consolidated condensed financial statements requires management to make assumptions, estimates and judgments that affect the reported amounts of assets and liabilities, net revenue and expenses during the reporting periods, and disclosures of contingent assets and liabilities as of the date of the consolidated condensed financial statements. On an ongoing basis, management evaluates estimates, including but not limited to, those related to accounts receivable, reserves for excess and obsolete inventory, carrying value and lives of fixed assets, goodwill and intangible assets, the valuation estimates and assessment of impairment and observable price adjustments, income taxes, equity-based compensation expense, and warranties. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable. As a result, management makes judgments regarding the carrying values of the Company's assets and liabilities that are not readily apparent from other sources. Authoritative pronouncements, historical experience and assumptions are used as the basis for making estimates, and on an ongoing basis, management evaluates these estimates. Actual results may differ from these estimates.

Due to the coronavirus (“COVID-19”) pandemic and macroeconomic headwinds, there has been uncertainty and disruption in the global economy and financial markets. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of July 2, 2022. While there was no material impact to our consolidated condensed financial statements as of and for the quarter ended July 2, 2022, these estimates may change, as new events occur and additional information is obtained, as well as other factors related to COVID-19 and macroeconomic headwinds that could materially impact our consolidated condensed financial statements in future reporting periods.

7

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Unaudited (continued)

Significant Accounting Policies

Except for the accounting policies for contract assets and accelerated share repurchases described below, there have been no material changes to our significant accounting policies summarized in Note 1 "Basis of Presentation" to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended October 2, 2021.

Contract Assets

A contract asset is the Company’s right to consideration in exchange for goods or services that the Company has transferred to a customer. ASC 606, Revenue from Contracts with Customers, distinguishes between a contract asset and a receivable based on whether receipt of the consideration is conditional on something other than the passage of time. When the Company transfers control of goods or services to a customer before the customer pays consideration, the Company records either a contract asset or a receivable depending on the nature of the Company’s right to consideration for its performance. The point at which a contract asset becomes an account receivable may be earlier than the point at which an invoice is issued. The Company assesses a contract asset for impairment in accordance with ASC 310, Receivables.

Accelerated Share Repurchase

From time to time, the Company may enter into accelerated share repurchase (“ASR”) agreements with third-party financial institutions to repurchase shares of the Company’s common stock. Under an ASR agreement, in exchange for an up-front payment, the counterparty makes an initial delivery of shares of the Company's common stock during the purchase period of the relevant ASR. This initial delivery of shares represents the minimum number of shares that the Company may receive under an ASR agreement. Upon settlement of an ASR agreement, the counterparty may deliver additional shares, with the final number of shares delivered determined based on the volume-weighted average price of the Company’s common stock over the term of such ASR agreement, less an agreed-upon discount. The transactions are accounted for as equity transactions and are included in Treasury Stock when the shares are received, at which time there is an immediate reduction in the weighted-average common shares calculation for basic and diluted earnings per share.

Recent Accounting Pronouncements

Income Taxes

In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, Income Taxes (Topic 740). The amendments in this ASU, among other changes, simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, clarify and amend the existing guidance. We adopted this ASU in the first quarter of fiscal 2022. The adoption of this ASU did not have a material impact on our consolidated condensed financial statements.

Contracts in Entity's Own Equity

In August 2020, the FASB issued ASU 2020-06, Derivatives and Hedging - Contracts in Entity's Own Equity (Topic 815). The amendments in this ASU, among other changes, remove current guidance that allows an entity to rebut the presumption that potential share settlement be included in the diluted earnings per share calculation when an instrument may be settled in cash or shares if the entity has a history or policy of cash settlement. These amendments affect any instrument that may be settled in cash or shares and, therefore, affects the diluted earnings per share calculation for both convertible instruments and contracts in an entity's own equity. We elected to early adopt this ASU in the second quarter of fiscal 2022. The adoption of this ASU did not have a material impact on our consolidated condensed financial statements.

Codification Improvements

In October 2020, the FASB issued ASU 2020-10, Codification Improvements. The amendments in this ASU affect a wide variety of topics in the Codification and improve the consistency of the Codification by including all disclosure guidance in the appropriate disclosure sections (Section 50). We adopted this ASU in the first quarter of fiscal 2022. The adoption of this ASU did not have a material impact on our consolidated condensed financial statements.

8

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Unaudited (continued)

NOTE 2. BALANCE SHEET COMPONENTS

The following tables reflect the components of significant balance sheet accounts as of July 2, 2022 and October 2, 2021:

	As of
(in thousands)	July 2, 2022		October 2, 2021
Short-term investments, available-for-sale (1)	$	300,000	$	377,000
Inventories, net:
Raw materials and supplies	$	126,593	$	94,493
Work in process	69,426		55,866
Finished goods	40,363		40,006
	236,382		190,365
Inventory reserves	(21,101)		(23,042)
	$	215,281	$	167,323
Property, plant and equipment, net:
Land	$	2,182	$	2,182
Buildings and building improvements	23,116		23,314
Leasehold improvements	32,120		30,054
Data processing equipment and software	40,836		40,945
Machinery, equipment, furniture and fixtures	90,465		87,994
Construction in progress	10,728		9,562
	199,447		194,051
Accumulated depreciation	(132,937)		(126,069)
	$	66,510	$	67,982
Accrued expenses and other current liabilities:
Accrued customer obligations (2)	$	67,063	$	72,478
Wages and benefits	47,833		66,531
Dividends payable	9,970		8,673
Commissions and professional fees	5,459		6,190
Severance	—		31
Other	8,109		7,667
	$	138,434	$	161,570

(1)All short-term investments were classified as available-for-sale and the fair value approximates cost basis. The Company did not recognize any realized gains or losses on the sale of investments during the three and nine months ended July 2, 2022 and July 3, 2021.

(2)Represents customer advance payments, customer credit program, accrued warranty expense and accrued retrofit obligations.

9

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Unaudited (continued)

NOTE 3. GOODWILL AND INTANGIBLE ASSETS

Goodwill

Intangible assets classified as goodwill are not amortized. The goodwill established in connection with our acquisitions represents the estimated future economic benefits arising from the assets we acquired that did not qualify to be identified and recognized individually. The goodwill also includes the value of expected future cash flows from the acquisitions, expected synergies with our other affiliates and other unidentifiable intangible assets.

The Company performs an annual impairment test of its goodwill during the fourth quarter of each fiscal year, which coincides with the completion of its annual forecasting and refreshing of business outlook process.

The Company performed its annual impairment test in the fourth quarter of fiscal 2021 and concluded that no impairment charge was required. Any future adverse changes in expected operating results and/or unfavorable changes in other economic factors used to estimate fair values could result in a non-cash impairment in the future.

During the three and nine months ended July 2, 2022, the Company reviewed qualitative factors to ascertain if a "triggering" event may have taken place that may have the effect of reducing the fair value of the reporting unit below its carrying value and concluded that no triggering event had occurred. While we have concluded that a triggering event did not occur during the quarter ended July 2, 2022, a prolonged COVID-19 pandemic and macroeconomic headwinds could impact the results of operations due to changes to assumptions utilized in the determination of the estimated fair values of the reporting units that could be significant enough to trigger an impairment. Net sales and earnings growth rates could be negatively impacted by reductions or changes in demand for our products. The discount rate utilized in our valuation model could also be impacted by changes in the underlying interest rates and risk premiums included in the determination of the cost of capital.

The following table summarizes the Company's recorded goodwill by reportable segments (refer to Note 14) as of July 2, 2022 and October 2, 2021:

(in thousands)	Capital Equipment		APS		Total
Balance at October 2, 2021	$	46,561	$	26,388	$	72,949
Other	(2,849)		(313)		$	(3,162)
Balance at July 2, 2022	$	43,712	$	26,075	$	69,787

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, in-process research and development, and trade and brand names.

10

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Unaudited (continued)

The following table reflects net intangible assets as of July 2, 2022 and October 2, 2021: 

	As of				Average estimated
(dollar amounts in thousands)	July 2, 2022		October 2, 2021		useful lives (in years)
Developed technology(1)	$	92,573	$	90,427	6.0 to 15.0
Accumulated amortization	(58,932)		(58,494)
Net developed technology	$	33,641	$	31,933
Customer relationships	$	34,421	$	36,114	5.0 to 6.0
Accumulated amortization	(34,421)		(36,114)
Net customer relationships	$	—	$	—
In-process research and development(1)	$	—	$	8,795	N.A
Accumulated amortization	—		—
Net in-process research and development	$	—	$	8,795
Trade and brand name	$	7,095	$	7,374	7.0 to 8.0
Accumulated amortization	(7,095)		(7,275)
Net trade and brand name	—		99
Other intangible assets	$	4,700	$	4,700	1.9 to 6.0
Accumulated amortization	(3,050)		(2,775)
Net other intangible assets	$	1,650	$	1,925
	$	35,291	$	42,752

(1) As of July 2, 2022, $7.9 million of in-process research and development assets were transferred to developed technology (definite-lived intangible assets) as the research and development process was completed, and are being amortized over their weighted-average useful lives of 6 years.

The following table reflects estimated annual amortization expense related to intangible assets as of July 2, 2022:

	As of
(in thousands)	July 2, 2022
Remaining fiscal 2022	$	1,416
Fiscal 2023	5,665
Fiscal 2024	5,665
Fiscal 2025	5,665
Fiscal 2026	5,665
Thereafter	11,215
Total amortization expense	$	35,291

11

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Unaudited (continued)

NOTE 4. CASH, CASH EQUIVALENTS, AND SHORT-TERM INVESTMENTS

Cash equivalents consist of instruments with remaining maturities of three months or less at the date of purchase. In general, these investments are free of trading restrictions.

Cash, cash equivalents, and short-term investments consisted of the following as of July 2, 2022:

(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
Current assets:
Cash	$	164,458	$	—	$	—	$	164,458
Cash equivalents:
Money market funds (1)	161,338		—		(24)		161,314
Time deposits (2)	120,009		—		—		120,009
Total cash and cash equivalents	$	445,805	$	—	$	(24)	$	445,781
Short-term investments:
Time deposits (2)	300,000		—		—		300,000
Total short-term investments	$	300,000	$	—	$	—	$	300,000
Total cash, cash equivalents and short-term investments	$	745,805	$	—	$	(24)	$	745,781

(1)The fair value was determined using unadjusted prices in active, accessible markets for identical assets, and as such they were classified as Level 1 assets in the fair value hierarchy.

(2)Fair value approximates cost basis.

Cash, cash equivalents and short-term investments consisted of the following as of October 2, 2021:

(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
Current assets:
Cash	$	269,201	$	—	$	—	$	269,201
Cash equivalents:
Money market funds (1)	93,598		—		(18)		93,580
Time deposits (2)	7		—		—		7
Total cash and cash equivalents	$	362,806	$	—	$	(18)	$	362,788
Short-term investments:
Time deposits (2)	377,000		—		—		377,000
Total short-term investments	$	377,000	$	—	$	—	$	377,000
Total cash, cash equivalents and short-term investments	$	739,806	$	—	$	(18)	$	739,788

(1)The fair value was determined using unadjusted prices in active, accessible markets for identical assets, and as such they were classified as Level 1 assets in the fair value hierarchy.

(2)Fair value approximates cost basis.

12

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Unaudited (continued)

NOTE 5. EQUITY INVESTMENTS

Equity investments consisted of the following as of July 2, 2022 and October 2, 2021:

	As of
(in thousands)	July 2, 2022		October 2, 2021
Non-marketable equity securities	$	5,397	$	6,388
Total equity investments	$	5,397	$	6,388

During the three and nine months ended July 2, 2022, the Company recorded an impairment of $1.3 million on a non-marketable equity security without a readily determinable fair value. The entire amount of the investment in the non-marketable equity security was impaired due to a significant deterioration in the earnings performance of the equity investee. The impairment amount is recorded within “Selling, general and administrative expense” in the Consolidated Condensed Statement of Operations.

NOTE 6. FAIR VALUE MEASUREMENTS

Accounting standards establish three levels of inputs that may be used to measure fair value: quoted prices in active markets for identical assets or liabilities (referred to as Level 1), inputs other than Level 1 that are observable for the asset or liability either directly or indirectly (referred to as Level 2) and unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities (referred to as Level 3).

Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis 

We measure certain financial assets and liabilities at fair value on a recurring basis. There were no transfers between fair value measurement levels during the three and nine months ended July 2, 2022.

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 accounts receivables, prepaid expenses and other current assets, accounts payable and accrued expenses approximate fair value.

NOTE 7. DERIVATIVE FINANCIAL INSTRUMENTS

The Company’s international operations are exposed to changes in foreign exchange rates due to transactions denominated in currencies other than U.S. dollars. Most of the Company’s revenue and cost of materials are transacted in U.S. dollars. However, a significant amount of the Company’s operating expenses is denominated in local currencies, primarily in Singapore.

The foreign currency exposure of our operating expenses is generally hedged with foreign exchange forward contracts. The Company’s foreign exchange risk management programs include using foreign exchange forward contracts with cash flow hedge accounting designation to hedge exposures to the variability in the U.S. dollar equivalent of forecasted non-U.S. dollar-denominated operating expenses. These instruments generally mature within twelve months. For these derivatives, we report the after-tax gain or loss from the effective portion of the hedge as a component of accumulated other comprehensive income (loss), and we reclassify it into earnings in the same period or periods in which the hedged transaction affects earnings and in the same line item on the Consolidated Condensed Statements of Operations as the impact of the hedged transaction.

The fair value of derivative instruments on our Consolidated Condensed Balance Sheets as of July 2, 2022 and October 2, 2021 were as follows:

13

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Unaudited (continued)

	As of
	July 2, 2022				October 2, 2021
(in thousands)	Notional Amount		Fair Value Liability Derivatives(1)		Notional Amount		Fair Value Liability Derivatives(1)
Derivatives designated as hedging instruments:
Foreign exchange forward contracts (2)	$	57,756	$	(991)	$	57,682	$	(616)
Total derivatives	$	57,756	$	(991)	$	57,682	$	(616)

(1)The fair value of derivative liabilities is measured using level 2 fair value inputs and is included in accrued expenses and other current liabilities on our Consolidated Condensed Balance Sheets.

(2)Hedged amounts expected to be recognized to income within the next twelve months.

The effects of derivative instruments designated as cash flow hedges in our Consolidated Condensed Statements of Comprehensive Income for the three and nine months ended July 2, 2022 and July 3, 2021 were as follows:

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Foreign exchange forward contract in cash flow hedging relationships:
Net (loss)/gain recognized in OCI, net of tax (1)	$	(1,233)	$	(133)	$	(1,168)	$	301
Net (loss)/gain reclassified from accumulated OCI into income, net of tax (2)	$	(170)	$	317	$	(793)	$	1,295

(1)Net change in the fair value of the effective portion classified in OCI.

(2)Effective portion classified as selling, general and administrative expense.

NOTE 8. LEASES

We have entered into various non-cancellable operating and finance lease agreements for certain of our offices, manufacturing, technology, sales support and service centers, equipment, and vehicles. We determine if an arrangement is a lease, or contains a lease, at inception and record the leases in our financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor. Our lease terms may include one or more options to extend the lease terms, for periods from one year to 20 years, when it is reasonably certain that we will exercise that option. As of July 2, 2022, there was no option to extend the lease which was recognized as a right-of-use ("ROU") asset, or a lease liability. We have lease agreements with lease and non-lease components, and non-lease components are accounted for separately and not included in our leased assets and corresponding liabilities. We have elected not to present short-term leases on the Consolidated Condensed Balance Sheets as these leases have a lease term of 12 months or less at lease inception.

Operating leases are included in operating ROU assets, current operating lease liabilities and non-current operating lease liabilities, and finance leases are included in property, plant and equipment, accrued expenses and other current liabilities, and other liabilities on the Consolidated Condensed Balance Sheets. As of July 2, 2022 and October 2, 2021, our finance leases are not material.

The following table shows the components of lease expense:

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Operating lease expense (1)	$	2,173	$	1,894	$	6,217	$	5,693

(1)Operating lease expense includes short-term lease expense, which is immaterial for the three and nine months ended July 2, 2022 and July 3, 2021.

The following table shows the cash flows arising from lease transactions. Cash payments related to short-term leases are not included in the measurement of operating lease liabilities, and, as such, are excluded from the amounts below:

14

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Unaudited (continued)

	Nine months ended
(in thousands)	July 2, 2022		July 3, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	5,715	$	5,364

The following table shows the weighted-average lease terms and discount rates for operating leases:

	As of
	July 2, 2022		October 2, 2021
Operating leases:
Weighted-average remaining lease term (in years):	8.5		9.6
Weighted-average discount rate:	5.7	%	5.8	%

Future lease payments, excluding short-term leases are detailed as follows:

	As of
(in thousands)	July 2, 2022
Remaining fiscal 2022	$	2,095
Fiscal 2023	8,133
Fiscal 2024	7,680
Fiscal 2025	6,935
Fiscal 2026	5,006
Thereafter	24,028
Total minimum lease payments	$	53,877
Less: Interest	$	12,068
Present value of lease obligations	$	41,809
Less: Current portion	$	5,973
Long-term portion of lease obligations	$	35,836

15

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Unaudited (continued)

NOTE 9. DEBT AND OTHER OBLIGATIONS

Bank Guarantees

On November 22, 2013, the Company obtained a $5.0 million credit facility with Citibank in connection with the issuance of bank guarantees for operational purposes. As of July 2, 2022, the outstanding amount under this facility was $2.9 million.

Credit Facilities

On February 15, 2019, the Company entered into a Facility Letter and Overdraft Agreement (collectively, the “Facility Agreements”) with MUFG Bank, Ltd., Singapore Branch (the “Bank”). The Facility Agreements provide the Company and one of its subsidiaries with an overdraft facility of up to $150.0 million (the “Overdraft Facility”) for general corporate purposes. Amounts outstanding under the Overdraft Facility, including interest, are payable upon thirty days written demand by the Bank. Interest on the Overdraft Facility is calculated on a daily basis, and the applicable interest rate is calculated at the overnight U.S. Dollar LIBOR rate plus a margin of 1.5% per annum. The Overdraft Facility is an unsecured facility per the terms of the Facility Agreements. The Facility Agreements contain customary non-financial covenants, including, without limitation, covenants that restrict the Company’s ability to sell or dispose of its assets, cease owning at least 51% of two of its subsidiaries (the "Subsidiaries"), or encumber its assets with material security interests (including any pledge of monies in the Subsidiaries' cash deposit account with the Bank). The Facility Agreements also contain typical events of default, including, without limitation, non-payment of financial obligations when due, cross defaults to other material indebtedness of the Company and any breach of a representation or warranty under the Facility Agreements. As of July 2, 2022, there were no outstanding amounts under the Overdraft Facility.

NOTE 10. SHAREHOLDERS’ EQUITY AND EMPLOYEE BENEFIT PLANS

401(k) Retirement Income Plans

The Company has a 401(k) retirement plan (the “401(k) Plan”) for eligible U.S. employees. The 401(k) Plan allows for employee contributions and matching Company contributions from 4% to 6% based upon terms and conditions of the 401(k) Plan.

The following table reflects the Company’s contributions to the 401(k) Plan during the three and nine months ended July 2, 2022 and July 3, 2021:

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Cash	$	419	$	458	$	1,423	$	1,324

Share Repurchase Program

On August 15, 2017, the Company’s Board of Directors authorized a program (the "Program") to repurchase up to $100 million of the Company’s common stock on or before August 1, 2020. In 2018, 2019 and 2020, the Board of Directors increased the share repurchase authorization under the Program to $200 million, $300 million, and $400 million, respectively. On March 3, 2022, the Board of Directors further increased the share repurchase authorization under the Program by an additional $400 million to $800 million, and extended its duration through August 1, 2025. The Company has entered into a written trading plan under Rule 10b5-1 of the Exchange Act to facilitate repurchases under the Program. The Program may be suspended or discontinued at any time and is funded using the Company's available cash, cash equivalents and short-term investments. Under the Program, shares may be repurchased through open market and/or privately negotiated transactions at prices deemed appropriate by management. The timing and amount of repurchase transactions under the Program depend on market conditions as well as corporate and regulatory considerations. During the three and nine months ended July 2, 2022, the Company repurchased a total of approximately 653.0 thousand and 1,423.0 thousand shares of common stock under the Program at a cost of approximately $31.1 million and $72.6 million, respectively. The stock repurchases were recorded in the periods they were delivered and accounted for as treasury stock in the Company's Consolidated Condensed Balance Sheets. The Company records treasury stock purchases under the cost method using the first-in, first-out (FIFO) method. Upon re-issuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid-in capital.

16

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Unaudited (continued)

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.

Accelerated Share Repurchase (“ASR”)

In addition to the 653.0 thousand shares of common stock repurchased under the Program during the three months ended July 2, 2022, on March 9, 2022, the Company entered into an ASR agreement (the “March 2022 ASR Agreement”) with an investment bank counterparty (“Dealer”) to repurchase $150 million of the Company's common stock. The March 2022 ASR Agreement was entered into pursuant to the Company's current $800 million share repurchase authorization.

Under the March 2022 ASR Agreement, the Company made an up-front payment of $150 million to the Dealer and received an initial delivery of 2,449.9 thousand shares of common stock at a cost of approximately $120 million on March 10, 2022. The final number of shares to be repurchased will be based on the volume-weighted average price of the Company's common stock during the term of the transaction, less a discount and subject to adjustments pursuant to the terms and conditions of the March 2022 ASR Agreement. For accounting purposes, the March 2022 ASR Agreement is evaluated as an unsettled forward contract indexed to the Company's own stock, with $30 million being classified within common stock. At settlement, the Dealer may be required to deliver additional shares of common stock to the Company, or, under certain circumstances, the Company may be required to deliver shares of its common stock or may elect to make a cash payment to the Dealer.

The March 2022 ASR Agreement was settled between the Company and the Dealer on April 22, 2022 and the Company received an additional 344.5 thousand shares of common stock from the Dealer. In total, an aggregate of 2,794.4 thousand shares of common stock were delivered by the Dealer under the March 2022 ASR Agreement at an average price of $53.68 per share, which was then reclassified as treasury stock from common stock in shareholder’s equity. As of July 2, 2022, our remaining stock repurchase authorization under the Program was approximately $309.3 million.

Dividends

On October 18, 2021, the Board of Directors declared a quarterly dividend of $0.17 per share of common stock. Dividends paid during the three and nine months ended July 2, 2022 totaled $10.1 million and $29.4 million, respectively. The declaration of any future cash dividend is at the discretion of the Board of Directors and will depend on the Company's financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination that such dividends are in the best interests of the Company's shareholders.

Accumulated Other Comprehensive Loss

The following table reflects accumulated other comprehensive loss reflected on the Consolidated Condensed Balance Sheets as of July 2, 2022 and October 2, 2021: 

	As of
(in thousands)	July 2, 2022		October 2, 2021
(Loss)/gain from foreign currency translation adjustments	$	(17,343)	$	682
Unrecognized actuarial loss on pension plan, net of tax	(2,985)		(3,088)
Unrealized loss on hedging	(991)		(616)
Accumulated other comprehensive loss	$	(21,319)	$	(3,022)

Equity-Based Compensation

The Company has a stockholder-approved equity-based compensation plan, the 2021 Omnibus Incentive Plan (the “Plan”) from which employees and directors receive grants. As of July 2, 2022, 3.3 million shares of common stock are available for grant to the Company's employees and directors under the Plan.

•Relative TSR Performance Share Units (“Relative TSR PSUs”) entitle the employee to receive common stock of the Company on the award vesting date, typically the third anniversary of the grant date (or as soon as administratively practicable if later), if market performance objectives which measure the relative total shareholder return (“TSR”) are attained. Relative TSR is calculated based upon the 90-calendar day average price at the end of the performance period of the Company's stock as compared to specific peer companies that comprise the GICS (45301020) Semiconductor Index. TSR is measured for the Company and each peer company over a performance period, which is generally three years. Vesting percentages range from 0% to 200% of awards granted. The provisions of the Relative TSR PSUs are

17

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Unaudited (continued)

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.

•Revenue Growth Performance Share Units (“Growth PSUs”) entitle the employee to receive common stock of the Company on the award vesting date, typically the third anniversary of the grant date (or as soon as administratively practicable if later), based on organic revenue growth objectives and relative growth performance against named competitors as set by the Management Development and Compensation Committee (“MDCC”) of the Company's Board of Directors. Organic revenue growth is calculated by averaging revenue growth (net of revenues from acquisitions) over a performance period, which is generally three years. Revenues from acquisitions will be included in the calculation after four fiscal quarters after acquisition. Any portion of the grant that does not meet the revenue growth objectives and relative growth performance is forfeited. Vesting percentages range from 0% to 200% of awards granted.

•In general, stock options and Time-based Restricted Share Units ("Time-based RSUs") awarded to employees vest ratably over a three-year period on the anniversary of the grant date 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.

Equity-based compensation expense recognized in the Consolidated Condensed Statements of Operations for the three and nine months ended July 2, 2022 and July 3, 2021 was based upon awards ultimately expected to vest, with forfeiture accounted for when they occur.

The following table reflects Time-based RSUs, Relative TSR PSUs, Growth PSUs and common stock granted during the three and nine months ended July 2, 2022 and July 3, 2021:

	Three months ended		Nine months ended
(shares in thousands)	July 2, 2022	July 3, 2021	July 2, 2022	July 3, 2021
Time-based RSUs	1	—	303	484
Relative TSR PSUs	—	—	154	154
Growth PSUs	—	—	77	51
Common stock	4	4	12	19
Equity-based compensation in shares	5	4	546	708

The following table reflects total equity-based compensation expense, which includes Time-based RSUs, Relative TSR PSUs, Growth PSUs and common stock, included in the Consolidated Condensed Statements of Operations during the three and nine months ended July 2, 2022 and July 3, 2021: 

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Cost of sales	$	193	$	211	$	727	$	626
Selling, general and administrative	3,233		3,008		10,485		8,111
Research and development	1,039		921		3,261		2,767
Total equity-based compensation expense	$	4,465	$	4,140	$	14,473	$	11,504

18

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Unaudited (continued)

The following table reflects equity-based compensation expense, by type of award, for the three and nine months ended July 2, 2022 and July 3, 2021:  

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Time-based RSUs	$	2,845	$	2,571	$	8,763	$	7,772
Relative TSR PSUs	1,073		988		3,060		3,019
Growth PSUs	310		359		1,938		121
Common stock	237		222		712		592
Total equity-based compensation expense	$	4,465	$	4,140	$	14,473	$	11,504

NOTE 11. REVENUE AND CONTRACT BALANCES

The Company recognizes revenue when we satisfy performance obligations as evidenced by the transfer of control of our products or services to customers. In general, the Company generates revenue from product sales, either directly to customers or to distributors. In determining whether a contract exists, we evaluate the terms of the agreement, the relationship with the customer or distributor and their ability to pay. Service revenue is generally recognized over time as the services are performed. For the three and nine months ended July 2, 2022, and July 3, 2021, the service revenue was not material.

The Company reports revenue based on our reportable segments. The Company believes that reporting revenue on this basis provides information about how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Please refer to Note 14: Segment Information, for disclosure of revenue by segment.

Contract Balances

Our contract assets relate to our rights to consideration for revenue with collection dependent on events other than the passage of time, such as the achievement of specified payment milestones. The contract assets will be transferred to net account receivables as our right to consideration for these contract assets become unconditional. Contracts assets are reported in the accompanying Consolidated Condensed Balance Sheets within prepaid expenses and other current assets.

19

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Unaudited (continued)

Our contract liabilities are primarily related to payments received in advance of satisfying performance obligations, and are reported in the accompanying Consolidated Condensed Balance Sheets within accrued expenses and other current liabilities.

Contract liabilities increase as a result of receiving new advance payments from customers and decrease as revenue is recognized from product sales under advance payment arrangements upon satisfying the performance obligations.

The following table shows the changes in contract asset balances during the three and nine months ended July 2, 2022 and July 3, 2021:

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Contract assets, beginning of period	$	26,721	$	—	$	—	$	—
Additions	18,563		—		45,284		—
Contract assets, end of period	$	45,284	$	—	$	45,284	$	—

The following table shows the changes in contract liability balances during the three and nine months ended July 2, 2022 and July 3, 2021:

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Contract liabilities, beginning of period	$	17,300	$	5,788	$	15,596	$	2,958
Revenue recognized	(29,612)		(23,725)		(104,796)		(43,993)
Additions	17,996		26,486		94,884		49,584
Contract liabilities, end of period	$	5,684	$	8,549	$	5,684	$	8,549

NOTE 12. EARNINGS PER SHARE

Basic income per share is calculated using the weighted average number of shares of common stock outstanding during the period. Stock options and restricted stock are included in the calculation of diluted earnings per share, except when their effect would be anti-dilutive.

The following table reflects a reconciliation of the shares used in the basic and diluted net income per share computation for the three and nine months ended July 2, 2022 and July 3, 2021: 

	Three months ended
(in thousands, except per share data)	July 2, 2022				July 3, 2021
	Basic		Diluted		Basic		Diluted
NUMERATOR:
Net income	$	119,034	$	119,034	$	113,766	$	113,766
DENOMINATOR:
Weighted average shares outstanding - Basic	58,985		58,985		62,023		62,023
Dilutive effect of Equity Plans			970				1,462
Weighted average shares outstanding - Diluted			59,955				63,485
EPS:
Net income per share - Basic	$	2.02	$	2.02	$	1.83	$	1.83
Effect of dilutive shares			(0.03)				(0.04)
Net income per share - Diluted			$	1.99			$	1.79
Anti-dilutive shares(1)			19				0

20

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Unaudited (continued)

	Nine months ended
(in thousands, except per share data)	July 2, 2022				July 3, 2021
	Basic		Diluted		Basic		Diluted
NUMERATOR:
Net income	$	368,641	$	368,641	$	233,450	$	233,450
DENOMINATOR:
Weighted average shares outstanding - Basic	60,951		60,951		62,023		62,023
Dilutive effect of Equity Plans			989				1,341
Weighted average shares outstanding - Diluted			61,940				63,364
EPS:
Net income per share - Basic	$	6.05	$	6.05	$	3.76	$	3.76
Effect of dilutive shares			(0.10)				(0.08)
Net income per share - Diluted			$	5.95			$	3.68
Anti-dilutive shares(1)			1				3

(1) Represents the Relative TSR PSUs and Growth PSUs that are excluded from the calculation of diluted earnings per share for the three and nine months ended July 2, 2022 and July 3, 2021 as the effect would have been anti-dilutive.

NOTE 13. INCOME TAXES

The following table reflects the provision for income taxes and the effective tax rate for the three and nine months ended July 2, 2022 and July 3, 2021: 

	Three months ended						Nine months ended
(dollar amounts in thousands)	July 2, 2022			July 3, 2021			July 2, 2022			July 3, 2021
Provision for income taxes	$	5,165		$	7,212		$	36,813		$	25,722
Effective tax rate	4.2		%	6.0		%	9.1		%	9.9		%

The decrease in provision for income taxes for the three months ended July 2, 2022 as compared to the three months ended July 3, 2021 is primarily related to a decrease in foreign minimum tax, offset by an increase in tax expense due to jurisdictional mix of profitability and a decrease in tax benefit from the release of valuation allowance recorded against the net deferred tax assets. During the three months ended July 2, 2022 and July 3, 2021, the Company recorded a $4.9 million and $7.2 million tax benefit, respectively, from the release of valuation allowance recorded against the net deferred tax assets of a certain foreign jurisdiction due to a forecasted increase in future profitability in the corresponding jurisdiction. The increase in provision for income taxes for the nine months ended July 2, 2022 as compared to the nine months ended July 3, 2021 is primarily related to an overall increase in year-to-date profitability, principally earned in lower tax jurisdictions, and foreign minimum tax.

For the three and nine months ended July 2, 2022, the effective tax rate is lower than the U.S. federal statutory tax rate primarily due to foreign income earned in lower tax jurisdictions, tax incentives, tax credits, a release of valuation allowances on certain deferred tax assets and taxes on unrepatriated foreign earnings, partially offset by foreign minimum tax.

21

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Unaudited (continued)

NOTE 14. SEGMENT INFORMATION

Reportable segments are defined as components of an enterprise that engage in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker (the “CODM”) in deciding how to allocate resources and assess performance. The Company's Chief Executive Officer is the CODM. The CODM does not review discrete asset information. The Company operates two reportable segments consisting of: (1) Capital Equipment; and (2) Aftermarket Products and Services ("APS").

The following table reflects operating information by segment for the three and nine months ended July 2, 2022 and July 3, 2021: 

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Net revenue:
Capital Equipment	$	321,946	$	370,187	$	1,064,383	$	881,722
APS	50,191		54,131		152,924		150,616
Net revenue	372,137		424,318		1,217,307		1,032,338
Income from operations:
Capital Equipment	102,467		107,016		345,686		218,010
APS	19,610		13,439		56,842		39,601
Income from operations	$	122,077	$	120,455	$	402,528	$	257,611

We have considered (1) information that is regularly reviewed by our CODM as defined by the authoritative guidance on segment reporting, in evaluating financial performance; and (2) other financial data, including information that we include in our earnings releases but which is not included in our financial statements, to disaggregate revenues by end markets served. The principal category we use to disaggregate revenues is by the end markets served in the Capital Equipment segment.

The following table reflects net revenue by Capital Equipment end markets served for the three and nine months ended July 2, 2022 and July 3, 2021: 

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
General Semiconductor	$	223,034	$	280,563	$	670,251	$	633,234
Automotive & Industrial	51,018		38,488		160,366		103,416
LED	20,203		31,951		128,394		115,071
Memory	27,691		19,185		105,372		30,001
Total Capital Equipment revenue	$	321,946	$	370,187	$	1,064,383	$	881,722

22

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Unaudited (continued)

The following table reflects capital expenditures, depreciation expense and amortization expense for the three and nine months ended July 2, 2022 and July 3, 2021:

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Capital expenditures:
Capital Equipment	$	3,670	$	5,526	$	8,103	$	11,120
APS	1,283		2,430		3,110		5,643
	$	4,953	$	7,956	$	11,213	$	16,763
Depreciation expense:
Capital Equipment	$	2,274	$	1,668	$	6,813	$	4,850
APS	1,827		1,797		5,417		5,049
	$	4,101	$	3,465	$	12,230	$	9,899
Amortization expense:
Capital Equipment	$	887	$	845	$	2,820	$	2,751
APS	222		495		723		1,902
	$	1,109	$	1,340	$	3,543	$	4,653

NOTE 15. COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS

Warranty Expense

The Company's equipment is generally shipped with a one-year warranty against manufacturing defects. The Company establishes reserves for estimated warranty expense when revenue for the related equipment is recognized. The reserve for estimated warranty expense is based upon historical experience and management's estimate of future warranty costs, including product part replacement, freight charges and related labor costs expected to be incurred in correcting manufacturing defects during the warranty period.

The following table reflects the reserve for warranty activity for the three and nine months ended July 2, 2022 and July 3, 2021: 

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Reserve for warranty, beginning of period	$	15,518	$	15,574	$	16,961	$	9,576
Provision for warranty	2,842		4,325		9,001		15,654
Utilization of reserve	(4,118)		(3,004)		(11,720)		(8,335)
Reserve for warranty, end of period	$	14,242	$	16,895	$	14,242	$	16,895

Other Commitments and Contingencies

The following table reflects obligations not reflected on the Consolidated Condensed Balance Sheet as of July 2, 2022:

			Payments due by fiscal year
(in thousands)	Total		2022		2023		2024		2025		2026		thereafter
Inventory purchase obligation (1)	$	347,900	$	113,400	$	234,500	$	—	$	—	$	—	$	—

(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.

23

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Unaudited (continued)

From time to time, the Company is party to or the target of lawsuits, claims, investigations and proceedings, including for personal injury, intellectual property, commercial, contract, and employment matters, which are handled and defended in the ordinary course of business. The Company accrues a contingent loss liability for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated. When a single amount cannot be reasonably estimated but the cost can be estimated within a range, the Company accrues the minimum amount. The Company expenses legal costs, including those expected to be incurred in connection with a loss contingency, as incurred.

Unfunded Capital Commitments

As of July 2, 2022, the Company also has an obligation to fund uncalled capital commitments of approximately $9.6 million, as and when required, in relation to its investment in a private equity fund.

Concentrations

The following table reflects significant customer concentrations as a percentage of net revenue for the nine months ended July 2, 2022 and July 3, 2021:

	Nine months ended
	July 2, 2022	July 3, 2021
ASE Technology Holding Co	*	19.4	%

* Represents less than 10% of total net revenue

The following table reflects significant customer concentrations as a percentage of total accounts receivable as of July 2, 2022 and July 3, 2021:

	As of
	July 2, 2022		July 3, 2021
Tianshui Huatian Technology Co., Ltd.	20.6	%	12.9	%
Haoseng Industrial Co., Ltd. (1)	*		16.1	%

(1)Distributor of the Company's products.

* Represents less than 10% of total accounts receivable

24

Item 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

In addition to historical information, this filing contains statements relating to future events or our future results. These statements are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are subject to the safe harbor provisions created by statute. Such forward-looking statements include, but are not limited to, statements with respect to our future revenue increasing, continuing or strengthening, or decreasing or weakening; our capital allocation strategies, including any share repurchases; demand for our products, including replacement demand; our research and development effort; our ability to identify and realize new growth opportunities; our ability to control costs; and our operational flexibility as a result of (among other factors):

•our expectations regarding the potential impacts on our business of the novel coronavirus ("COVID-19") pandemic, including supply chain disruptions, the economic and public health effects, and governmental and other responses to these impacts;

•our expectations regarding the potential impacts on our business of actual or potential inflationary pressures, interest rate and risk premium adjustments, falling consumer sentiment, or economic recession caused, directly or indirectly, by the prolonged Ukraine/Russia conflict, the COVID-19 pandemic, geopolitical tensions and other macroeconomic factors;

•risks inherent in doing business on an international level, including currency risks, regulatory requirements, political risks, export restrictions and other trade barriers;

•projected growth rates in the overall semiconductor industry, the semiconductor assembly equipment market, and the market for semiconductor packaging materials; and

•projected demand for our products and services.

Generally, words such as “may,” “will,” “should,” “could,” “anticipate,” “expect,” “intend,” “estimate,” “plan,” “continue,” “goal” and “believe,” or the negative of or other variations on these and other similar expressions identify forward-looking statements. These forward-looking statements are made only as of the date of this filing. We do not undertake to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

Forward-looking statements are based on current expectations and involve risks and uncertainties. Our future results could differ significantly from those expressed or implied by our forward-looking statements. These risks and uncertainties include, without limitation, those described below and under the heading “Risk Factors” in this report and in our Annual Report on Form 10-K for the fiscal year ended October 2, 2021 (our “Annual Report”) and our other reports filed from time to time with the Securities and Exchange Commission. This discussion should be read in conjunction with the Consolidated Condensed Financial Statements and Notes included in this report, as well as our audited financial statements included in our Annual Report.

We operate in a rapidly changing and competitive environment. New risks emerge from time to time and it is not possible for us to predict all risks that may affect us. Given those risks and uncertainties, investors should not place undue reliance on forward-looking statements as predictions of actual results.

OVERVIEW

Kulicke and Soffa Industries, Inc. (“we,” “us,” “our,” or the “Company”) is a leading provider of semiconductor, light-emitting diode (“LED”) and electronic assembly solutions serving the global automotive, consumer, communications, computing and industrial markets. Founded in 1951, we pride ourselves on establishing foundations for technological advancement-creating, pioneering interconnect solutions that enable performance improvements, power efficiency, form-factor reductions and assembly excellence of current and next-generation semiconductor devices. Leveraging decades of development proficiency and extensive process technology expertise, our expanding portfolio provides equipment solutions, aftermarket products and services supporting a comprehensive set of interconnect technologies including wire bonding, advanced packaging, lithography, mini and micro LED transfer and electronics assembly. Dedicated to empowering technological discovery, always, we collaborate with customers and technology partners to push the boundaries of possibility, enabling a smarter future.

25

We design, manufacture and sell capital equipment and tools used to assemble semiconductor devices, including integrated circuits, high and low powered discrete devices, LEDs, and power modules. In addition, we have a portfolio of equipment that is used to assemble components onto electronic circuit boards. We also service, maintain, repair and upgrade our equipment and sell consumable aftermarket tools for our and our peer companies' equipment. Our customers primarily consist of semiconductor device manufacturers, integrated device manufacturers (“IDMs”), outsourced semiconductor assembly and test providers (“OSATs”), other electronics manufacturers and automotive electronics suppliers.

Our goal is to be the technology leader and the most competitive supplier in terms of cost and performance in each of our major product lines. Accordingly, we invest in research and engineering projects intended to enhance our position as a leader in semiconductor assembly technology. We also remain focused on our cost structure through continuous improvement and optimization of operations. Cost reduction efforts are an important part of our normal ongoing operations and are intended to generate savings without compromising overall product quality and service.

We operate two reportable segments, consisting of Capital Equipment and Aftermarket Products and Services (“APS”). We have aggregated twelve operating segments as of July 2, 2022, with six operating segments within the Capital Equipment reportable segment and six operating segments within the APS reportable segment.

Our Capital Equipment segment engages in the manufacture and sale of ball bonders, wafer level bonders, wedge bonders, advanced packaging tools, mini and micro LED transfer solutions, hybrid and electronic assembly solutions to semiconductor device manufacturers, IDMs, foundries, OSATs, display manufacturers, other electronics manufacturers and automotive electronics suppliers. Our APS segment engages in the manufacture and sale of a variety of tools for a broad range of semiconductor packaging applications, spare parts, equipment repair, maintenance and servicing, training services, refurbishment and upgrades for our equipment.

Business Environment

The semiconductor business environment is highly volatile and is driven by internal dynamics, both cyclical and seasonal, in addition to macroeconomic forces. Over the long term, semiconductor consumption has historically grown, and is forecast to continue to grow. This growth is driven, in part, by regular advances in device performance and by price declines that result from improvements in manufacturing technology. In order to exploit these trends, semiconductor manufacturers, both IDMs and OSATs, periodically invest aggressively in latest generation capital equipment. This buying pattern often leads to periods of excess supply and reduced capital spending—the so-called semiconductor cycle. Within this broad semiconductor cycle there are also, generally weaker, seasonal effects that are specifically tied to annual, end-consumer purchasing patterns. Typically, semiconductor manufacturers prepare for heightened demand by adding or replacing equipment capacity by the end of the September quarter. Occasionally, this results in subsequent reductions in the December quarter. This annual seasonality can be overshadowed by effects of the broader semiconductor cycle. Macroeconomic factors also affect the industry, primarily through their effect on business and consumer demand for electronic devices, as well as other products that have significant electronic content such as automobiles, white goods, and telecommunication equipment. There can be no assurances regarding levels of demand for our products and we believe historic industry-wide volatility will persist.

In the Asia/Pacific region, our customer base has also become more geographically concentrated as a result of economic and industry conditions. Approximately 90.9% and 95.8% of our net revenue for the three months ended July 2, 2022 and July 3, 2021, respectively, was for shipments to customer locations outside of the U.S., primarily in the Asia/Pacific region. Approximately 51.5% and 57.2% of our net revenue for the three months ended July 2, 2022 and July 3, 2021, respectively, was for shipments to customers located in China, which is subject to risks and uncertainties related to the respective policies of the governments of China and the U.S. Furthermore, there is a potential risk of conflict and instability in the relationship between Taiwan and China which could disrupt the operations of our customers and/or suppliers in both Taiwan and China and our manufacturing operations in China.

Similarly, approximately 94.4% and 96.6% of our net revenue for the nine months ended July 2, 2022 and July 3, 2021, respectively, was for shipments to customer locations outside of the U.S., primarily in the Asia/Pacific region. Approximately 58.3% and 53.9% of our net revenue for the nine months ended July 2, 2022 and July 3, 2021, respectively, was for shipments to customers located in China.

The U.S. and several other countries have levied tariffs on certain goods and have introduced other trade restrictions, which, together with the impact of the COVID-19 pandemic discussed below, has resulted in substantial uncertainties in the semiconductor, LED, memory and automotive markets.

26

Our Capital Equipment segment is primarily affected by the industry's internal cyclical and seasonal dynamics in addition to broader macroeconomic factors that can positively or negatively affect our financial performance. The sales mix of IDM and OSAT customers in any period also impacts financial performance, as changes in this mix can affect our products' average selling prices and gross margins due to differences in volume purchases and machine configurations required by each customer type.

Our APS segment has historically been less volatile than our Capital Equipment segment. The APS sales are more directly tied to semiconductor unit consumption rather than capacity requirements and production capability improvements. 

We continue to position our business to leverage our research and development leadership and innovation and to focus our efforts on mitigating volatility, improving profitability and ensuring longer-term growth. We remain focused on operational excellence, expanding our product offerings and managing our business efficiently throughout the business cycles. Our visibility into future demand is generally limited, forecasting is difficult, and we generally experience typical industry seasonality.

To limit potential adverse cyclical, seasonal and macroeconomic effects on our financial position, we have continued our efforts to maintain a strong balance sheet. As of July 2, 2022, our total cash, cash equivalents and short-term investments were $745.8 million, a $6.0 million increase from the prior fiscal year end. We believe our strong cash position will allow us to continue to invest in product development and pursue non-organic opportunities.

Key Events in Fiscal 2022 to Date

COVID-19 Pandemic and Macroeconomic Headwinds

The COVID-19 pandemic has significantly impacted the global economy, disrupted global supply chains, created volatility in equity market valuations, created significant volatility and disruption in financial markets, and significantly increased unemployment levels. In addition, the COVID-19 pandemic has resulted in temporary closures and failures of many businesses and the institution of social distancing and sheltering-in-place requirements in many jurisdictions. While some of these measures have been relaxed in certain jurisdictions, there has been a resurgence of illnesses or emergence of new variants of the virus in other jurisdictions, which has led to more severe restrictions.

In response to the COVID-19 pandemic, we temporarily closed certain offices in the United States, Europe and Asia as well as executed our Business Continuity Plan (“BCP”), which measures have disrupted how we operate our business. While we are currently operating at full capacity in all of our manufacturing locations, work-from-home practices were instituted across many offices worldwide, which have impacted our non-manufacturing productivity, including our research & development. At this point, our BCP has not included significant headcount reductions or changes in our overall liquidity position. As certain countries have relaxed the measures over the past few months, we have restarted certain activities in accordance with local guidelines.

We are impacted by the global shortage in electronic components and our supply chain is strained in some cases as the availability of materials, logistics and freight options continues to be challenging in many jurisdictions, especially in light of the emergence of new variants of the virus. As a result, we continue to expect some delays in fulfilling customer deliveries during the course of fiscal 2022. However, to date we have successfully managed our customers' expectations in most cases.

We believe semiconductor industry macroeconomics have not changed and we anticipate the industry’s long-term growth projections will normalize, but the sector is seeing short-term volatility and disruption due not only to the COVID-19 pandemic, but also due to actual or potential inflation, falling consumer sentiment, and economic recession caused, directly or indirectly, by various macroeconomic factors, including the prolonged Ukraine/Russia conflict.

Based on our current evaluation, neither the COVID-19 pandemic nor the prolonged Ukraine/Russia conflict has had a material direct impact on our financial condition and operating results in fiscal 2022 to date. We believe that our existing cash, cash equivalents, short-term investments, existing Facility Agreements, and anticipated cash flows from operations will be sufficient to meet our liquidity and capital requirements, notwithstanding the COVID-19 pandemic, prolonged Ukraine/Russia conflict or other macroeconomic factors, for at least the next twelve months from the date of filing. However, this is a highly dynamic situation. As the global COVID-19 pandemic response is dynamic, geopolitical posture by nations and governments is constantly developing and the macroeconomic situation remains highly volatile, creating uncertainty surrounding our business, our expectations regarding future demand or supply conditions and our near- and long-term liquidity, our financial condition and, consequentially, our operating results could deteriorate.

For a description of the risks to our business arising from or relating to the COVID-19 pandemic and general macroeconomic conditions, please see Part I, Item 1A, “Risk Factors” of our 2021 Annual Report on Form 10-K.

27

RESULTS OF OPERATIONS

The following tables reflect our income from operations for the three and nine months ended July 2, 2022 and July 3, 2021:

	Three months ended
(dollar amounts in thousands)	July 2, 2022		July 3, 2021		$ Change		% Change
Net revenue	$	372,137	$	424,318	$	(52,181)	(12.3)	%
Cost of sales	181,452		228,623		(47,171)		(20.6)	%
Gross profit	190,685		195,695		(5,010)		(2.6)	%
Selling, general and administrative	34,562		39,103		(4,541)		(11.6)	%
Research and development	34,046		36,137		(2,091)		(5.8)	%
Operating expenses	68,608		75,240		(6,632)		(8.8)	%
Income from operations	$	122,077	$	120,455	$	1,622	1.3	%

	Nine months ended
(dollar amounts in thousands)	July 2, 2022		July 3, 2021		$ Change		% Change
Net revenue	$	1,217,307	$	1,032,338	$	184,969	17.9	%
Cost of sales	601,674		566,667		35,007		6.2	%
Gross profit	615,633		465,671		149,962		32.2	%
Selling, general and administrative	108,609		105,511		3,098		2.9	%
Research and development	104,496		102,549		1,947		1.9	%
Operating expenses	213,105		208,060		5,045		2.4	%
Income from operations	$	402,528	$	257,611	$	144,917	56.3	%

Net Revenue

Our net revenue for the three months ended July 2, 2022 decreased as compared to our net revenue for the three months ended July 3, 2021. The decrease in net revenue is primarily due to lower volume in Capital Equipment and APS. Our net revenue for the nine months ended July 2, 2022 increased as compared to our net revenue for the nine months ended July 3, 2021. The increase in net revenue is primarily due to favorable product mix in Capital Equipment.

The following tables reflect net revenue by reportable segments for the three and nine months ended July 2, 2022 and July 3, 2021: 

	Three months ended
(dollar amounts in thousands)	July 2, 2022				July 3, 2021				$ Change		% Change
	Net Revenue		% of total net revenue		Net Revenue		% of total net revenue
Capital Equipment	$	321,946	86.5	%	$	370,187	87.2	%	$	(48,241)	(13.0)	%
APS	50,191		13.5	%	54,131		12.8	%	(3,940)		(7.3)	%
Total net revenue	$	372,137	100.0	%	$	424,318	100.0	%	$	(52,181)	(12.3)	%

28

	Nine months ended
(dollar amounts in thousands)	July 2, 2022				July 3, 2021				$ Change		% Change
	Net Revenue		% of total net revenue		Net Revenue		% of total net revenue
Capital Equipment	$	1,064,383	87.4	%	$	881,722	85.4	%	$	182,661	20.7	%
APS	152,924		12.6	%	150,616		14.6	%	2,308		1.5	%
Total net revenue	$	1,217,307	100.0	%	$	1,032,338	100.0	%	$	184,969	17.9	%

Capital Equipment

For the three months ended July 2, 2022, the lower Capital Equipment net revenue as compared to the prior year period was primarily due to lower volume. The lower volume was due to a decrease in customer investments as a result of uncertainties in the overall macroeconomic environment, partially offset by favorable price variance due to product mix.

For the nine months ended July 2, 2022, the higher Capital Equipment net revenue as compared to the prior year period was primarily driven by favorable price variance due to product mix, partially offset by lower volume due to a decrease in customer investments as a result of uncertainties in the overall macroeconomic environment.

APS

For the three months ended July 2, 2022, the lower APS net revenue as compared to the prior year period was primarily due to lower volume in spares and services.

For the nine months ended July 2, 2022, the higher APS net revenue as compared to the prior year period was primarily due to higher volume in spares, services and bonding tools.

Gross Profit Margin

The following tables reflect gross profit margin as a percentage of net revenue by reportable segments for the three and nine months ended July 2, 2022 and July 3, 2021: 

	Three months ended				Basis Point
	July 2, 2022		July 3, 2021		Change
Capital Equipment	49.7	%	44.6	%	510
APS	60.8	%	56.3	%	450
Total gross profit margin	51.2	%	46.1	%	510

	Nine months ended				Basis Point
	July 2, 2022		July 3, 2021		Change
Capital Equipment	49.1	%	42.9	%	620
APS	60.8	%	57.9	%	290
Total gross profit margin	50.6	%	45.1	%	550

Capital Equipment

For the three and nine months ended July 2, 2022, the higher Capital Equipment gross profit margin as compared to the prior year period was primarily driven by favorable price variance due to product mix.

APS

For the three and nine months ended July 2, 2022, the higher APS gross profit margin as compared to the prior year period was primarily driven by favorable product mix in spares and services.

29

Operating Expenses

The following tables reflect operating expenses for the three and nine months ended July 2, 2022 and July 3, 2021:

	Three months ended
(dollar amounts in thousands)	July 2, 2022		July 3, 2021		$ Change		% Change
Selling, general & administrative	$	34,562	$	39,103	$	(4,541)	(11.6)	%
Research & development	34,046		36,137		(2,091)		(5.8)	%
Total	$	68,608	$	75,240	$	(6,632)	(8.8)	%

	Nine months ended
(dollar amounts in thousands)	July 2, 2022		July 3, 2021		$ Change		% Change
Selling, general & administrative	$	108,609	$	105,511	$	3,098	2.9	%
Research & development	104,496		102,549		1,947		1.9	%
Total	$	213,105	$	208,060	$	5,045	2.4	%

Selling, General and Administrative (“SG&A”)

For the three months ended July 2, 2022, the lower SG&A expenses as compared to the prior year period were primarily due to $4.8 million net favorable variance in foreign exchange and $1.8 million lower staff cost related to incentive compensation. These were partially offset by $1.3 million impairment of equity investment and $0.7 million higher sales representative commissions.

For the nine months ended July 2, 2022, the higher SG&A expenses as compared to the prior year period were primarily due to $4.8 million higher sales representative commissions, $1.3 million impairment of equity investment, and $1.3 million higher staff costs related to an increase in headcount. These were partially offset by $4.4 million net favorable variance in foreign exchange.

Research and Development (“R&D”)

For the three months ended July 2, 2022, the lower R&D expenses as compared to the prior year period were primarily due to lower staff costs related to incentive compensation and lower engineering services.

For the nine months ended July 2, 2022, the higher R&D expenses as compared to the prior year period were primarily due to higher staff costs related to increase in headcount.

Income from Operations

The following tables reflect income from operations by reportable segments for the three and nine months ended July 2, 2022 and July 3, 2021:

	Three months ended
(dollar amounts in thousands)	July 2, 2022		July 3, 2021		$ Change		% Change
Capital Equipment	$	102,467	$	107,016	$	(4,549)	(4.3)	%
APS	19,610		13,439		6,171		45.9	%
Total income from operations	$	122,077	$	120,455	$	1,622	1.3	%

	Nine months ended
(dollar amounts in thousands)	July 2, 2022		July 3, 2021		$ Change		% Change
Capital Equipment	$	345,686	$	218,010	$	127,676	58.6	%
APS	56,842		39,601		17,241		43.5	%
Total income from operations	$	402,528	$	257,611	$	144,917	56.3	%

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Capital Equipment and APS

For the three months ended July 2, 2022, the lower Capital Equipment income from operations as compared to the prior year period was primarily due to lower revenue as explained under 'Net Revenue' above. For the three months ended July 2, 2022, the higher APS income from operations as compared to prior year period was primarily due to higher decrease in operating expenses compared to the decrease in revenue as explained under 'Operating Expenses' above.

For the nine months ended July 2, 2022, the higher Capital Equipment and APS income from operations as compared to the prior year period was primarily due to higher revenue as explained under 'Net Revenue' above.

Interest Income and Expense

The following tables reflect interest income and interest expense for the three and nine months ended July 2, 2022 and July 3, 2021: 

	Three months ended
(dollar amounts in thousands)	July 2, 2022		July 3, 2021		$ Change		% Change
Interest income	$	2,158	$	564	$	1,594	282.6	%
Interest expense	$	(36)	$	(41)	$	5	(12.2)	%

	Nine months ended
(dollar amounts in thousands)	July 2, 2022		July 3, 2021		$ Change		% Change
Interest income	$	3,099	$	1,801	$	1,298	72.1	%
Interest expense	$	(173)	$	(146)	$	(27)	18.5	%

Interest income

For the three and nine months ended July 2, 2022, the higher interest income as compared to the prior year period was primarily due to higher weighted average interest rate on cash, cash equivalents and short-term investments.

Interest expense

For the nine months ended July 2, 2022, the higher interest expense as compared to the prior year period was primarily due to higher average short-term debt. Please refer to Note 9 of Item 1 for discussion on the Overdraft Facility.

Provision for Income Taxes

The following table reflects the provision for income taxes and the effective tax rate for the three and nine months ended July 2, 2022 and July 3, 2021: 

	Three months ended									Nine months ended
(dollar amounts in thousands)	July 2, 2022			July 3, 2021			Change			July 2, 2022			July 3, 2021			Change
Provision for income taxes	$	5,165		$	7,212		$	(2,047)		$	36,813		$	25,722		$	11,091
Effective tax rate	4.2		%	6.0		%	(1.8)		%	9.1		%	9.9		%	(0.8)		%

Please refer to Note 13 of Item 1 for discussion on the provision for income taxes for the three and nine months ended July 2, 2022 as compared to the prior year period.

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LIQUIDITY AND CAPITAL RESOURCES

The following table reflects total cash, cash equivalents, and short-term investments as of July 2, 2022 and October 2, 2021:

	As of
(dollar amounts in thousands)	July 2, 2022		October 2, 2021		$ Change
Cash and cash equivalents	$	445,781	$	362,788	$	82,993
Short-term investments	300,000		377,000		(77,000)
Total cash, cash equivalents, and short-term investments	$	745,781	$	739,788	$	5,993
Percentage of total assets	45.8%		46.2%

The following table reflects a summary of the Consolidated Condensed Statements of Cash Flow information for the nine months ended July 2, 2022 and July 3, 2021:

	Nine months ended
(in thousands)	July 2, 2022		July 3, 2021
Net cash provided by operating activities	$	273,625	$	176,656
Net cash provided by investing activities	66,342		54,221
Net cash used in financing activities	(250,905)		(31,982)
Effect of exchange rate changes on cash and cash equivalents	(6,069)		977
Changes in cash and cash equivalents	$	82,993	$	199,872
Cash and cash equivalents, beginning of period	362,788		188,127
Cash and cash equivalents, end of period	$	445,781	$	387,999

Nine months ended July 2, 2022

Net cash provided by operating activities was primarily due to net income of $368.6 million, non-cash adjustments to net income of $24.8 million and a net unfavorable change in operating assets and liabilities of $119.9 million. The net change in operating assets and liabilities was primarily driven by an increase in inventories of $49.2 million, prepaid expenses and other current assets of $50.7 million and a decrease in accounts payable and accrued expenses and other current liabilities of $84.0 million and income tax payable of $6.7 million. This was partially offset by a decrease in accounts and other receivable of $71.8 million.

The increase in inventories was due to higher manufacturing activities to meet higher demand in the first two quarters of fiscal 2022. The increase in prepaid expenses and other current assets was mainly due to the addition of contract assets in the period. The decrease in accounts payable and accrued expenses and other current liabilities was primarily due to higher payments to suppliers and lower accrued employee compensation that was paid out in the period. The decrease in accounts and other receivable in the nine months ended July 2, 2022 was mainly due to lower sales in the period and a change in customer mix of different credit terms.

Net cash provided by investing activities was due to net redemption of short-term investments of $77.0 million. This was partially offset by capital expenditures of $10.4 million.

Net cash used in financing activities was primarily due to common stock repurchases of $221.1 million and dividend payments of $29.4 million.

Nine months ended July 3, 2021

Net cash provided by operating activities was primarily due to net income of $233.5 million, non-cash adjustments to net income of $14.3 million and a net unfavorable change in operating assets and liabilities of $71.1 million. The net change in operating assets and liabilities was primarily driven by an increase in accounts and other receivable of $170.4 million, an increase in inventory of $40.8 million, and an increase in prepaid expenses and other current assets of $2.9 million. This was partially offset by an increase in accounts payable, accrued expenses and other current liabilities of $144.7 million.

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The increase in accounts and other receivable was due to increase in sales in the first three quarters of fiscal 2021. The increase in inventory was due to higher manufacturing activities during the third quarter of fiscal 2021 as compared to the fourth quarter of fiscal 2020 in anticipation of higher demand in subsequent periods. The higher accounts payable, accrued expenses and other current liabilities was primarily due to higher purchases, accruals on incentive compensation and other bonuses, and customer credits in the third quarter of fiscal 2021.

Net cash provided by investing activities was due to net redemption of short-term investments of $95.0 million and proceeds from sale of an equity-method investment of $2.1 million. This was partially offset by the cash outflow for the acquisition of Uniqarta, Inc. of $26.3 million and capital expenditures of $16.7 million.

Net cash used in financing activities was primarily due to common stock repurchases of $7.0 million and dividend payments of $24.8 million.

Fiscal 2022 Liquidity and Capital Resource Outlook

We expect our aggregate fiscal 2022 capital expenditures to be between approximately $30.0 million and $34.0 million, of which approximately $11.2 million has been incurred through the third quarter. Expenditures are anticipated to be primarily for research and development projects, enhancements to our manufacturing operations, improvements to our information technology security, implementation of an enterprise resource planning system and leasehold improvements for our facilities. Our ability to make these expenditures will depend, in part, on our future cash flows, which are determined by our future operating performance and, therefore, subject to prevailing macroeconomic conditions, including the impact from the COVID-19 pandemic, actual or potential inflationary pressures, geopolitical tensions including the prolonged Ukraine/Russia conflict and other factors, some of which are beyond our control.

As of July 2, 2022 and October 2, 2021, approximately $401.9 million and $724.5 million of cash, cash equivalents, and short-term investments were held by the Company's foreign subsidiaries, respectively, with a large portion of the cash amounts expected to be available for use in the U.S. without incurring additional U.S. income tax. The decrease is primarily due to the repatriation of cash held by the Company's foreign subsidiaries to the U.S.

The Company’s international operations and capital requirements are anticipated to be funded primarily by cash generated by foreign operating activities and cash held by foreign subsidiaries. The Company’s U.S. operations and capital requirements are anticipated to be funded primarily by cash generated from U.S. operating activities and cash held by U.S entities. In the future, the Company may repatriate additional cash held by foreign subsidiaries that has already been subject to U.S. income taxes or drawdown cash from our existing Facility Agreements. We believe these sources of cash and liquidity are sufficient to meet our additional liquidity needs for the foreseeable future including repayment of outstanding balances under the Facility Agreements, payment of dividends and share repurchases.

We believe that our existing cash, cash equivalents, short-term investments, existing Facility Agreements, and anticipated cash flows from operations will be sufficient to meet our liquidity and capital requirements, notwithstanding the COVID-19 pandemic, for at least the next twelve months from the date of filing. Our liquidity is affected by many factors, some based on normal operations of our business and others related to macroeconomic conditions including actual or potential inflationary pressures, industry-related uncertainties, effects arising from the prolonged Ukraine/Russia conflict, which we cannot predict. We also cannot predict economic conditions or industry downturns or the timing, strength or duration of recoveries. We intend to continue to use our cash for working capital needs and for general corporate purposes.

In this unprecedented environment, as a result of the COVID-19 pandemic, the prolonged Ukraine/Russia conflict or for other reasons, we may seek, as we believe appropriate, additional debt or equity financing that would provide capital for general corporate purposes, working capital funding, additional liquidity needs or to fund future growth opportunities, including possible acquisitions. The timing and amount of potential capital requirements cannot be determined at this time and will depend on a number of factors, including the actual and projected demand for our products, semiconductor and semiconductor capital equipment industry conditions, competitive factors, the condition of financial markets and the global economic situation.

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Share Repurchase Program

On August 15, 2017, the Company’s Board of Directors authorized a program (the "Program") to repurchase up to $100 million of the Company’s common stock on or before August 1, 2020. In 2018, 2019 and 2020, the Board of Directors increased the share repurchase authorization under the Program to $200 million, $300 million, and $400 million, respectively. On March 3, 2022, the Board of Directors further increased the share repurchase authorization under the Program by an additional $400 million to $800 million, and extended its duration through August 1, 2025. The Company has entered into a written trading plan under Rule 10b5-1 of the Exchange Act to facilitate repurchases under the Program. The Program may be suspended or discontinued at any time and is funded using the Company's available cash, cash equivalents and short-term investments. Under the Program, shares may be repurchased through open market and/or privately negotiated transactions at prices deemed appropriate by management. The timing and amount of repurchase transactions under the Program depend on market conditions as well as corporate and regulatory considerations. During the three and nine months ended July 2, 2022, the Company repurchased a total of approximately 653.0 thousand and 1,423.0 thousand shares of common stock under the Program at a cost of approximately $31.1 million and $72.6 million. The stock repurchases were recorded in the periods in which the shares were delivered and accounted for as treasury stock in the Company's Consolidated Condensed Balance Sheets. The Company records treasury stock purchases under the cost method using the first-in, first-out (FIFO) method. Upon re-issuance 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.

Accelerated Share Repurchase

In addition to the 653.0 thousand shares of common stock repurchased under the Program during the three months ended July 2, 2022, on March 9, 2022, the Company entered into an ASR agreement (the “March 2022 ASR Agreement”) with an investment bank counterparty (“Dealer”) to repurchase $150 million of the Company's common stock. The March 2022 ASR Agreement was entered into pursuant to the Company's current $800 million share repurchase authorization.

Under the March 2022 ASR Agreement, the Company made an up-front payment of $150 million to the Dealer and received an initial delivery of 2,449.9 thousand shares of common stock at a cost of approximately $120 million on March 10, 2022. The final number of shares to be repurchased will be based on the volume-weighted average price of the Company's common stock during the term of the transaction, less a discount and subject to adjustments pursuant to the terms and conditions of the March 2022 ASR Agreement. This is evaluated as an unsettled forward contract indexed to the Company's own stock, with $30 million being classified within common stock. At settlement, the Dealer may be required to deliver additional shares of common stock to the Company, or, under certain circumstances, the Company may be required to deliver shares of its common stock or may elect to make a cash payment to the Dealer. The terms of the accelerated share repurchases under the March 2022 ASR Agreement are subject to adjustment if the Company enters into or announces certain types of transactions or corporate actions.

The March 2022 ASR Agreement was settled between the Company and the Dealer on April 22, 2022 and the Company received an additional 344.5 thousand shares of common stock from the Dealer. In total, an aggregate of 2,794.4 thousand shares of common stock were delivered by the Dealer under the March 2022 ASR Agreement at an average price of $53.68 per share, which was then reclassified as treasury stock from common stock in shareholder’s equity. As of July 2, 2022, our remaining stock repurchase authorization under the Program was approximately $309.3 million.

Dividends

On October 18, 2021, the Board of Directors declared a quarterly dividend of $0.17 per share of common stock. Dividends paid during the three and nine months ended July 2, 2022 totaled $10.1 million and $29.4 million, respectively. The declaration of any future cash dividend is at the discretion of the Board of Directors and will depend on the Company's financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination that such dividends are in the best interests of the Company's shareholders.

Other Obligations and Contingent Payments

In accordance with GAAP, certain obligations and commitments are not required to be included in the Consolidated Condensed Balance Sheets and Statements of Operations. These obligations and commitments, while entered into in the normal course of business, may have a material impact on our liquidity and are disclosed in the table below.

As of July 2, 2022, the Company had deferred tax liabilities of $34.5 million and unrecognized tax benefits within the income taxes payable for uncertain tax positions of $14.8 million, inclusive of accrued interest on uncertain tax positions of $2.1 million, substantially all of which would affect our effective tax rate in the future, if recognized.

34

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. Given the number of years and numerous matters that remain subject to examination in various tax jurisdictions, we cannot practicably estimate the timing or financial outcomes of these examinations and, therefore, these amounts are excluded from the amounts below. When estimating its tax positions, the Company considers and evaluates numerous complex areas of taxation, which may require periodic adjustments and which may not reflect the final tax liabilities.

The following table presents certain payments due by the Company under contractual and statutory obligations with minimum firm commitments as of July 2, 2022:

			Payments due in
(in thousands)	Total		Less than 1 year		1 - 3 years		3 - 5 years		More than 5 years
Inventory purchase obligations (1)	$	347,900	$	113,400	$	234,500	$	—	$	—
U.S. one-time transition tax payable (2) (reflected on our Consolidated Condensed Balance Sheets)	$	54,408	6,723		29,414		18,271		—
Total	$	402,308	$	120,123	$	263,914	$	18,271	$	—

(1)The Company orders inventory components in the normal course of its business. A portion of these orders are non-cancellable and some orders impose varying penalties and charges in the event of cancellation.

(2)Associated with the U.S. one-time transition tax on certain earnings and profits of our foreign subsidiaries in relation to the U.S Tax Cuts and Job Act of 2017.

Off-Balance Sheet Arrangements

Credit facilities

On February 15, 2019, the Company entered into a Facility Letter and Overdraft Agreement (collectively, the “Facility Agreements”) with MUFG Bank, Ltd., Singapore Branch (the “Bank”). The Facility Agreements provide the Company and one of its subsidiaries with an overdraft facility of up to $150.0 million (the “Overdraft Facility”) for general corporate purposes. Amounts outstanding under the Overdraft Facility, including interest, are payable upon thirty days written demand by the Bank. Interest on the Overdraft Facility is calculated on a daily basis, and the applicable interest rate is calculated at the overnight U.S. Dollar LIBOR rate plus a margin of 1.5% per annum. The Overdraft Facility is an unsecured facility per the terms of the Facility Agreements. The Facility Agreements contain customary non-financial covenants, including, without limitation, covenants that restrict the Company’s ability to sell or dispose of its assets, cease owning at least 51% of two of its subsidiaries (the "Subsidiaries") or encumber its assets with material security interests (including any pledge of monies in the Subsidiaries’ cash deposit account with the Bank). The Facility Agreements also contain typical events of default, including, without limitation, non-payment of financial obligations when due, cross defaults to other material indebtedness of the Company, and breach of a representation or warranty under the Facility Agreements. As of July 2, 2022, there were no outstanding amounts under the Overdraft Facility.

As of July 2, 2022, other than the bank guarantee disclosed in Note 9 of Item 1, we did not have any other off-balance sheet arrangements, such as contingent interests or obligations associated with variable interest entities.

35

Item 3. - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Our available-for-sale securities, if applicable, may consist of short-term investments in highly rated debt instruments of the U.S. Government and its agencies, financial institutions, and corporations. We continually monitor our exposure to changes in interest rates and credit ratings of issuers with respect to any available-for-sale securities and target an average life to maturity of less than 18 months. Accordingly, we believe that the effects on us of changes in interest rates and credit ratings of issuers are limited and would not have a material impact on our financial condition or results of operations.

Foreign Currency Risk

Our international operations are exposed to changes in foreign currency exchange rates due to transactions denominated in currencies other than the location's functional currency. Our international operations are also exposed to foreign currency fluctuations that impact the remeasurement of net monetary assets of those operations whose functional currency, the U.S. dollar, differs from their respective local currencies, most notably in Israel, Singapore and Switzerland. Our U.S. operations also have foreign currency exposure due to net monetary assets denominated in currencies other than the U.S. dollar. In addition to net monetary remeasurement, we have exposures related to the translation of subsidiary financial statements from their functional currency, the local currency, into its reporting currency, the U.S. dollar, most notably in the Netherlands, China, Taiwan, Japan and Germany.

Based on our foreign currency exposure as of July 2, 2022, a 10.0% fluctuation could impact our financial position, results of operations or cash flows by $4.0 to $5.0 million. Our attempts to hedge against these risks may not be successful and may result in a material adverse impact on our financial results and cash flow.

We enter into foreign exchange forward contracts to hedge a portion of our forecasted foreign currency-denominated expenses in the normal course of business and, accordingly, they are not speculative in nature. These instruments generally mature within twelve months. We have foreign exchange forward contracts with a notional amount of $57.8 million outstanding as of July 2, 2022.

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Item 4. - CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of July 2, 2022. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of July 2, 2022 our disclosure controls and procedures were effective in providing reasonable assurance that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934, as amended, is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms; and (ii) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding disclosure.

Changes in Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

In connection with the evaluation by our management, including with the participation of our Chief Executive Officer and Chief Financial Officer, of our internal control over financial reporting, no changes during the three months ended July 2, 2022 were identified to have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

37

PART II. - OTHER INFORMATION 

Item 1. - LEGAL PROCEEDINGS

From time to time, we may be a plaintiff or defendant in cases arising out of our business. We are party to ordinary, routine litigation incidental to our business. We cannot be assured of the results of any pending or future litigation, but we do not believe resolution of any currently pending matters will have a material adverse effect on our business, financial condition or operating results.

Item 1A. - RISK FACTORS

Certain Risks Related to Our Business

There have been no material changes from the risk factors discussed in Part I, Item 1A, "Risk Factors," of our 2021 Annual Report on Form 10-K.

Item 2. - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table summarizes the repurchases of common stock during the three months ended July 2, 2022 (in millions, except number of shares, which are reflected in thousands, and per share amounts):

Period	Total Number of Shares Repurchased	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 Purchased Under the Plans or Programs(1)
April 3, 2022 to April 30, 2022(2)	345	(2)		345	$	340.4
May 1, 2022 to June 4, 2022	308	$	50.27	308	$	325.0
June 5, 2022 to July 2, 2022	345	$	45.33	345	$	309.3
For the three months ended July 2, 2022	998			998

(1)On August 15, 2017, the Company's Board of Directors authorized the Program to repurchase up to $100 million in total of the Company's common stock on or before August 1, 2020. In 2018, 2019 and 2020, the Board of Directors increased the share repurchase authorization under the Program to $200 million, $300 million and $400 million, respectively. On May 3, 2022, the Board of Directors further increased the share repurchase authorization under the Company’s existing share repurchase program by an additional $400 million to $800 million, and extended its duration through August 1, 2025. The Company may repurchase shares of its common stock through open market and privately negotiated transactions at prices deemed appropriate by management. 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 will be funded using the Company's available cash, cash equivalents and short-term investments. The timing and amount of repurchase transactions under the Program depend on market conditions as well as corporate and regulatory considerations.

(2)On March 10, 2022, under the March 2022 ASR Agreement, the Company made an up-front payment of $150 million to the Dealer and received an initial delivery of 2,449.9 thousand shares of common stock worth approximately $120 million. On April 22, 2022, the remaining $30 million under the March 2022 ASR Agreement was settled and the Company received an additional 344.5 thousand shares of common stock from the Dealer. In total, an aggregate of 2,794.4 thousand shares of common stock were delivered by the Dealer under the ASR agreement at an average price of $53.68 per share, which was then reclassified as treasury stock from common stock in shareholder’s equity. Please refer to Note 10 of Item 1 for information on the ASR.

38

Item 3. – Defaults Upon Senior Securities.

None.

Item 4. – Mine Safety Disclosures

None.

Item 5. – Other Information

None.

39

Item 6. -    

Exhibit No.	Description
3.1	The Company's Amended and Restated Articles of Incorporation, dated December 5, 2007, are incorporated herein by reference to Exhibit 3(i) to the Company's Annual Report on Form 10-K for the fiscal year ended September 29, 2007, SEC file number 000-00121.
3.2	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, SEC file number 000-00121.
31.1	Certification of Fusen Chen, Chief Executive Officer of Kulicke and Soffa Industries, Inc., pursuant to Rule 13a-14(a) or Rule15d-14(a) of the Exchange Act as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Lester Wong, Chief Financial Officer of Kulicke and Soffa Industries, Inc., pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Fusen Chen, 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 Lester Wong, 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	Inline XBRL Instance Document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101.INS).
*	This exhibit shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act or the Exchange Act.

40

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	KULICKE AND SOFFA INDUSTRIES, INC.
Date: August 4, 2022	By:	/s/ LESTER WONG
		Lester Wong
		Executive Vice President and Chief Financial Officer (principal financial officer and principal accounting officer)

41

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Fusen Chen, certify that:

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 Rules13a-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: August 4, 2022	By:	/s/ FUSEN CHEN
		Fusen Chen
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Lester Wong, certify that:

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 Rules13a-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: August 4, 2022	By:	/s/ LESTER WONG
		Lester Wong
		Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Fusen Chen, President and Chief Executive Officer of Kulicke and Soffa Industries, Inc., do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.the Quarterly Report on Form 10-Q of Kulicke and Soffa Industries, Inc. for the period ended July 2, 2022 (the “ July 2, 2022 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 July 2, 2022 Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Kulicke and Soffa Industries, Inc.

Date: August 4, 2022	By:	/s/ FUSEN CHEN
		Fusen Chen
		President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Lester Wong, Executive Vice President and Chief Financial Officer of Kulicke and Soffa Industries, Inc., do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. the Quarterly Report on Form 10-Q of Kulicke and Soffa Industries, Inc. for the period ended July 2, 2022 (the “July 2, 2022 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 July 2, 2022 Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Kulicke and Soffa Industries, Inc.

Date: August 4, 2022	By:	/s/ LESTER WONG
		Lester Wong
		Executive Vice President and Chief Financial Officer

XML

DOCUMENT AND ENTITY INFORMATION - shares	9 Months Ended
	Jul. 02, 2022	Jul. 29, 2022
Entity Addresses [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	0-121
Entity Central Index Key	0000056978
Entity Incorporation, State or Country Code	PA
Entity Tax Identification Number	23-1498399
Entity Address, Address Line One	23A Serangoon North Avenue 5
Entity Address, Address Line Two	#01-01,
Entity Address, Country	SG
Entity Address, Postal Zip Code	554369
City Area Code	215
Local Phone Number	784-6000
Title of 12(b) Security	Common Stock, Without Par Value
Trading Symbol	KLIC
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		58,067,945
Amendment Flag	false
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2022
Current Fiscal Year End Date	--10-01
Document Period End Date	Jul. 02, 2022
Entity Registrant Name	KULICKE AND SOFFA INDUSTRIES, INC.
Entity Address, City or Town	Singapore
Principal Executive Offices
Entity Addresses [Line Items]
Entity Address, Address Line One	1005 Virginia Dr.
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19034
Entity Address, City or Town	Fort Washington

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jul. 02, 2022	Oct. 02, 2021
Current assets:
Cash and cash equivalents	$ 445,781	$ 362,788
Short-term investments	300,000	377,000
Accounts and other receivable, net of allowance for doubtful accounts of $0 and $687, respectively	350,045	421,193
Inventories, net	215,281	167,323
Prepaid expenses and other current assets	75,011	23,586
Total current assets	1,386,118	1,351,890
Property, plant and equipment, net	66,510	67,982
Operating right-of-use assets	41,160	41,592
Goodwill	69,787	72,949
Intangible assets, net	35,291	42,752
Deferred tax assets	21,103	15,715
Equity investments	5,397	6,388
Other assets	2,911	2,363
TOTAL ASSETS	1,628,277	1,601,631
Current liabilities:
Accounts payable	98,572	154,636
Operating lease liabilities	5,973	4,903
Income taxes payable	31,060	30,766
Accrued expenses and other current liabilities	138,434	161,570
Total current liabilities	274,039	351,875
Deferred tax liabilities	34,541	32,828
Income taxes payable	62,468	69,422
Operating lease liabilities	35,836	38,084
Other liabilities	14,660	14,185
TOTAL LIABILITIES	421,544	506,394
Commitments and contingent liabilities (Note 15)
Shareholders' equity:
Preferred stock, without par value: Authorized 5,000 shares; issued - none	0	0
Common stock, without par value: Authorized 200,000 shares; issued 85,364 and 85,364, respectively; outstanding 58,480 and 61,931 shares, respectively	557,236	550,117
Treasury stock, at cost, 26,884 and 23,433 shares, respectively	(615,689)	(400,412)
Retained earnings	1,286,505	948,554
Accumulated other comprehensive loss	(21,319)	(3,022)
TOTAL SHAREHOLDERS' EQUITY	1,206,733	1,095,237
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 1,628,277	$ 1,601,631

XML

CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jul. 02, 2022	Oct. 02, 2021
Consolidated Balance Sheets Parenthetical [Abstract]
Allowance for doubtful accounts and notes receivable	$ 0	$ 687
Preferred Stock, Shares Authorized	5,000,000	5,000,000
Common Stock, Shares Authorized	200,000,000	200,000,000
Common Stock, Shares, Issued	85,364,000	85,364,000
Common Stock, Shares, Outstanding	58,480,000	61,931,000
Treasury Stock, Shares	26,884,000	23,433,000
Preferred Stock, Shares Issued	0	0

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CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Income Statement [Abstract]
Revenues	$ 372,137	$ 424,318	$ 1,217,307	$ 1,032,338
Cost of sales	181,452	228,623	601,674	566,667
Gross profit	190,685	195,695	615,633	465,671
Selling, general and administrative	34,562	39,103	108,609	105,511
Research and development	34,046	36,137	104,496	102,549
Operating expenses	68,608	75,240	213,105	208,060
Income from operations	122,077	120,455	402,528	257,611
Interest income	2,158	564	3,099	1,801
Interest expense	(36)	(41)	(173)	(146)
Income before income taxes	124,199	120,978	405,454	259,266
Income tax expense (benefit)	5,165	7,212	36,813	25,722
Share of results of equity-method investee, net of tax	0	0	0	(94)
Net income	$ 119,034	$ 113,766	$ 368,641	$ 233,450
Net income per share:
Basic (in dollars per share)	$ 2.02	$ 1.83	$ 6.05	$ 3.76
Diluted (in dollars per share)	$ 1.99	$ 1.79	$ 5.95	$ 3.68
Weighted average shares outstanding:
Basic (in shares)	58,985	62,023	60,951	62,023
Diluted (in shares)	59,955	63,485	61,940	63,364

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Net income	$ 119,034	$ 113,766	$ 368,641	$ 233,450
Other comprehensive income:
Foreign currency translation adjustment	(12,009)	1,868	(18,025)	3,854
Unrecognized actuarial gain/(loss) on pension plan, net of tax	122	(79)	103	1
Foreign currency translation and pension plan, net of tax	(11,887)	1,789	(17,922)	3,855
Derivatives designated as hedging instruments:
Other comprehensive loss	(12,950)	1,339	(18,297)	2,861
Comprehensive income	106,084	115,105	350,344	236,311
Unrealized loss on hedging
Derivatives designated as hedging instruments:
Unrealized (loss)/gain on derivative instruments, net of tax	(1,233)	(133)	(1,168)	301
Reclassification adjustment for loss/(gain) on derivative instruments recognized, net of tax	(170)	317	(793)	1,295
Net decrease from derivatives designated as hedging instruments, net of tax	$ (1,063)	$ (450)	$ (375)	$ (994)

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CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Treasury Stock	Retained Earnings	Accumulated Other Comprehensive (Loss)/Income
Beginning balance (shares) at Oct. 03, 2020		61,558
Beginning balance at Oct. 03, 2020	$ 757,994	$ 539,213	$ (394,817)	$ 616,119	$ (2,521)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of stock for services rendered (shares)		8
Issuance of stock for services rendered	173	$ 96	77
Repurchase of common stock (shares)		(48)
Repurchase of common stock	(1,206)		(1,206)
Issuance of shares for equity based compensation (shares)		535
Issuance of shares for equity-based compensation	0	$ (4,076)	4,076
Equity-based compensation	3,216	$ 3,216
Cash dividend declared	(8,687)			(8,687)
Net income	48,363			48,363
Other comprehensive loss	7,763				7,763
Total comprehensive income/(loss)	56,126			48,363	7,763
Ending balance (shares) at Jan. 02, 2021		62,053
Ending balance at Jan. 02, 2021	807,616	$ 538,449	(391,870)	655,795	5,242
Beginning balance (shares) at Oct. 03, 2020		61,558
Beginning balance at Oct. 03, 2020	757,994	$ 539,213	(394,817)	616,119	(2,521)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	233,450
Other comprehensive loss	2,861
Total comprehensive income/(loss)	236,311
Ending balance (shares) at Jul. 03, 2021		61,986
Ending balance at Jul. 03, 2021	973,342	$ 546,175	(396,688)	823,515	340
Beginning balance (shares) at Jan. 02, 2021		62,053
Beginning balance at Jan. 02, 2021	807,616	$ 538,449	(391,870)	655,795	5,242
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of stock for services rendered (shares)		7
Issuance of stock for services rendered	185	$ 130	55
Repurchase of common stock (shares)		(23)
Repurchase of common stock	(1,110)		(1,110)
Issuance of shares for equity based compensation (shares)		24
Issuance of shares for equity-based compensation	0	$ (245)	245
Equity-based compensation	3,778	$ 3,778
Cash dividend declared	(8,688)			(8,688)
Net income	71,320			71,320
Other comprehensive loss	(6,241)				(6,241)
Total comprehensive income/(loss)	65,079			71,320	(6,241)
Ending balance (shares) at Apr. 03, 2021		62,061
Ending balance at Apr. 03, 2021	866,860	$ 542,112	(392,680)	718,427	(999)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of stock for services rendered (shares)		4
Issuance of stock for services rendered	224	$ 185	39
Repurchase of common stock (shares)		(82)
Repurchase of common stock	(4,087)		(4,087)
Issuance of shares for equity based compensation (shares)		3
Issuance of shares for equity-based compensation	0	$ (40)	40
Equity-based compensation	3,918	$ 3,918
Cash dividend declared	(8,678)			(8,678)
Net income	113,766			113,766
Other comprehensive loss	1,339				1,339
Total comprehensive income/(loss)	115,105			113,766	1,339
Ending balance (shares) at Jul. 03, 2021		61,986
Ending balance at Jul. 03, 2021	973,342	$ 546,175	(396,688)	823,515	340
Beginning balance (shares) at Oct. 02, 2021		61,931
Beginning balance at Oct. 02, 2021	1,095,237	$ 550,117	(400,412)	948,554	(3,022)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of stock for services rendered (shares)		4
Issuance of stock for services rendered	238	$ 197	41
Repurchase of common stock (shares)		(276)
Repurchase of common stock	(15,380)		(15,380)
Issuance of shares for equity based compensation (shares)		725
Issuance of shares for equity-based compensation	0	$ (6,963)	6,963
Equity-based compensation	5,074	$ 5,074
Cash dividend declared	(10,610)			(10,610)
Net income	133,606			133,606
Other comprehensive loss	(989)				(989)
Total comprehensive income/(loss)	132,617			133,606	(989)
Ending balance (shares) at Jan. 01, 2022		62,384
Ending balance at Jan. 01, 2022	1,207,176	$ 548,425	(408,788)	1,071,550	(4,011)
Beginning balance (shares) at Oct. 02, 2021		61,931
Beginning balance at Oct. 02, 2021	1,095,237	$ 550,117	(400,412)	948,554	(3,022)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	368,641
Other comprehensive loss	(18,297)
Total comprehensive income/(loss)	350,344
Ending balance (shares) at Jul. 02, 2022		58,480
Ending balance at Jul. 02, 2022	1,206,733	$ 557,236	(615,689)	1,286,505	(21,319)
Beginning balance (shares) at Jan. 01, 2022		62,384
Beginning balance at Jan. 01, 2022	1,207,176	$ 548,425	(408,788)	1,071,550	(4,011)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of stock for services rendered (shares)		4
Issuance of stock for services rendered	237	$ 202	35
Repurchase of common stock (shares)		(2,944)
Repurchase of common stock	(176,153)	$ (30,000)	(146,153)
Issuance of shares for equity based compensation (shares)		24
Issuance of shares for equity-based compensation	0	$ (222)	222
Equity-based compensation	4,459	$ 4,459
Cash dividend declared	(10,110)			(10,110)
Net income	116,001			116,001
Other comprehensive loss	(4,358)				(4,358)
Total comprehensive income/(loss)	111,643			116,001	(4,358)
Ending balance (shares) at Apr. 02, 2022		59,468
Ending balance at Apr. 02, 2022	1,137,252	$ 522,864	(554,684)	1,177,441	(8,369)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of stock for services rendered (shares)		4
Issuance of stock for services rendered	237	$ 196	41
Repurchase of common stock (shares)		(997)
Repurchase of common stock	(31,098)	$ 30,000	(61,098)
Issuance of shares for equity based compensation (shares)		5
Issuance of shares for equity-based compensation	0	$ (52)	52
Equity-based compensation	4,228	$ 4,228
Cash dividend declared	(9,970)			(9,970)
Net income	119,034			119,034
Other comprehensive loss	(12,950)				(12,950)
Total comprehensive income/(loss)	106,084			119,034	(12,950)
Ending balance (shares) at Jul. 02, 2022		58,480
Ending balance at Jul. 02, 2022	$ 1,206,733	$ 557,236	$ (615,689)	$ 1,286,505	$ (21,319)

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Jul. 02, 2022	Jul. 03, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 368,641	$ 233,450
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	15,773	14,552
Impairment of equity investment	1,346	0
Equity-based compensation and employee benefits	14,473	11,504
Gain on disposal of equity method investments	0	(1,046)
Adjustment for doubtful accounts	(245)	(95)
Adjustment for inventory valuation	1,110	(834)
Deferred taxes	(3,675)	(10,587)
Gain on disposal of property, plant and equipment	(129)	25
Unrealized foreign currency translation	(3,806)	719
Share of results of equity-method investee, net of tax	0	(94)
Changes in operating assets and liabilities, net of assets and liabilities assumed in businesses combinations:
Accounts and other receivable	71,825	(170,403)
Inventories	(49,230)	(40,771)
Prepaid expenses and other current assets	(50,725)	(2,856)
Accounts payable, accrued expenses and other current liabilities	(84,017)	144,717
Income taxes payable	(6,663)	(2,670)
Other, net	(1,053)	857
Net cash provided by operating activities	273,625	176,656
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of business, net of cash acquired	0	(26,338)
Purchases of property, plant and equipment	(10,380)	(16,747)
Proceeds from sales of property, plant and equipment	119	191
Investment in private equity fund	(397)	0
Disposal of equity-method investments	0	2,115
Purchase of short-term investments	(389,000)	(229,000)
Maturity of short-term investments	466,000	324,000
Net cash provided by investing activities	66,342	54,221
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment on short-term debt	(54,500)	(22,750)
Payment for finance lease	(373)	(253)
Repurchase of common stock/treasury stock	(221,139)	(6,953)
Common stock cash dividends paid	(29,393)	(24,776)
Proceeds from short-term debt	54,500	22,750
Net cash used in financing activities	(250,905)	(31,982)
Effect of exchange rate changes on cash and cash equivalents	(6,069)	977
Changes in cash and cash equivalents	82,993	199,872
Cash and cash equivalents at beginning of period	362,788	188,127
Cash and cash equivalents at end of period	445,781	387,999
CASH PAID FOR:
Interest	173	146
Income taxes, net of refunds	$ 50,059	$ 39,405

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BASIS OF PRESENTATION

9 Months Ended

Jul. 02, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

1. BASIS OF PRESENTATION

These consolidated condensed financial statements include the accounts of Kulicke and Soffa Industries, Inc. and its subsidiaries (“we,” “us,” “our,” or the “Company”) with appropriate elimination of intercompany balances and transactions.

The interim consolidated condensed financial statements are unaudited and, in management's opinion, include all adjustments (consisting only of normal and recurring adjustments) necessary for a fair statement of results for these interim periods. The interim consolidated condensed financial statements do not include all of the information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended October 2, 2021, filed with the Securities and Exchange Commission, which includes Consolidated Balance Sheets as of October 2, 2021 and October 3, 2020, and the related Consolidated Statements of Operations, Statements of Comprehensive Income, Changes in Shareholders' Equity and Cash Flows for each of the years in the three-year period ended October 2, 2021. The results of operations for any interim period are not necessarily indicative of the results of operations for any other interim period or for a full year.

Fiscal Year    

Each of the Company's first three fiscal quarters end on the Saturday that is 13 weeks after the end of the immediately preceding fiscal quarter. The fourth quarter of each fiscal year ends on the Saturday closest to September 30. Fiscal 2022 quarters end on January 1, 2022, April 2, 2022, July 2, 2022 and October 1, 2022. In fiscal years consisting of 53 weeks, the fourth quarter will consist of 14 weeks. Fiscal 2021 quarters ended on January 2, 2021, April 3, 2021, July 3, 2021 and October 2, 2021.

Nature of Business

The Company designs, manufactures and sells capital equipment and tools as well as services, maintains, repairs and upgrades equipment, all used to assemble semiconductor devices. The Company's operating results depend upon the capital and operating expenditures of semiconductor device manufacturers, integrated device manufacturers (“IDMs”), outsourced semiconductor assembly and test providers (“OSATs”), and other electronics manufacturers including automotive electronics suppliers worldwide which, in turn, depend on the current and anticipated market demand for semiconductors and products utilizing semiconductors. The semiconductor industry is highly volatile and experiences downturns and slowdowns which can have a severe negative effect on the semiconductor industry's demand for semiconductor capital equipment, including assembly equipment manufactured and sold by the Company and, to a lesser extent, tools, including those sold by the Company. These downturns and slowdowns have in the past adversely affected the Company's operating results. The Company believes such volatility will continue to characterize the industry and the Company's operations in the future.

Use of Estimates

The preparation of consolidated condensed financial statements requires management to make assumptions, estimates and judgments that affect the reported amounts of assets and liabilities, net revenue and expenses during the reporting periods, and disclosures of contingent assets and liabilities as of the date of the consolidated condensed financial statements. On an ongoing basis, management evaluates estimates, including but not limited to, those related to accounts receivable, reserves for excess and obsolete inventory, carrying value and lives of fixed assets, goodwill and intangible assets, the valuation estimates and assessment of impairment and observable price adjustments, income taxes, equity-based compensation expense, and warranties. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable. As a result, management makes judgments regarding the carrying values of the Company's assets and liabilities that are not readily apparent from other sources. Authoritative pronouncements, historical experience and assumptions are used as the basis for making estimates, and on an ongoing basis, management evaluates these estimates. Actual results may differ from these estimates.

Due to the coronavirus (“COVID-19”) pandemic and macroeconomic headwinds, there has been uncertainty and disruption in the global economy and financial markets. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of July 2, 2022. While there was no material impact to our consolidated condensed financial statements as of and for the quarter ended July 2, 2022, these estimates may change, as new events occur and additional information is obtained, as well as other factors related to COVID-19 and macroeconomic headwinds that could materially impact our consolidated condensed financial statements in future reporting periods.

Significant Accounting Policies

Except for the accounting policies for contract assets and accelerated share repurchases described below, there have been no material changes to our significant accounting policies summarized in Note 1 "Basis of Presentation" to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended October 2, 2021.

Contract Assets

A contract asset is the Company’s right to consideration in exchange for goods or services that the Company has transferred to a customer. ASC 606, Revenue from Contracts with Customers, distinguishes between a contract asset and a receivable based on whether receipt of the consideration is conditional on something other than the passage of time. When the Company transfers control of goods or services to a customer before the customer pays consideration, the Company records either a contract asset or a receivable depending on the nature of the Company’s right to consideration for its performance. The point at which a contract asset becomes an account receivable may be earlier than the point at which an invoice is issued. The Company assesses a contract asset for impairment in accordance with ASC 310, Receivables.

Accelerated Share Repurchase

From time to time, the Company may enter into accelerated share repurchase (“ASR”) agreements with third-party financial institutions to repurchase shares of the Company’s common stock. Under an ASR agreement, in exchange for an up-front payment, the counterparty makes an initial delivery of shares of the Company's common stock during the purchase period of the relevant ASR. This initial delivery of shares represents the minimum number of shares that the Company may receive under an ASR agreement. Upon settlement of an ASR agreement, the counterparty may deliver additional shares, with the final number of shares delivered determined based on the volume-weighted average price of the Company’s common stock over the term of such ASR agreement, less an agreed-upon discount. The transactions are accounted for as equity transactions and are included in Treasury Stock when the shares are received, at which time there is an immediate reduction in the weighted-average common shares calculation for basic and diluted earnings per share.

Recent Accounting Pronouncements

Income Taxes

In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, Income Taxes (Topic 740). The amendments in this ASU, among other changes, simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, clarify and amend the existing guidance. We adopted this ASU in the first quarter of fiscal 2022. The adoption of this ASU did not have a material impact on our consolidated condensed financial statements.

Contracts in Entity's Own Equity

In August 2020, the FASB issued ASU 2020-06, Derivatives and Hedging - Contracts in Entity's Own Equity (Topic 815). The amendments in this ASU, among other changes, remove current guidance that allows an entity to rebut the presumption that potential share settlement be included in the diluted earnings per share calculation when an instrument may be settled in cash or shares if the entity has a history or policy of cash settlement. These amendments affect any instrument that may be settled in cash or shares and, therefore, affects the diluted earnings per share calculation for both convertible instruments and contracts in an entity's own equity. We elected to early adopt this ASU in the second quarter of fiscal 2022. The adoption of this ASU did not have a material impact on our consolidated condensed financial statements.

Codification Improvements

In October 2020, the FASB issued ASU 2020-10, Codification Improvements. The amendments in this ASU affect a wide variety of topics in the Codification and improve the consistency of the Codification by including all disclosure guidance in the appropriate disclosure sections (Section 50). We adopted this ASU in the first quarter of fiscal 2022. The adoption of this ASU did not have a material impact on our consolidated condensed financial statements.

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BALANCE SHEET COMPONENTS

9 Months Ended

Jul. 02, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BALANCE SHEET COMPONENTS

2. BALANCE SHEET COMPONENTS

The following tables reflect the components of significant balance sheet accounts as of July 2, 2022 and October 2, 2021:

	As of
(in thousands)	July 2, 2022		October 2, 2021
Short-term investments, available-for-sale (1)	$	300,000	$	377,000
Inventories, net:
Raw materials and supplies	$	126,593	$	94,493
Work in process	69,426		55,866
Finished goods	40,363		40,006
	236,382		190,365
Inventory reserves	(21,101)		(23,042)
	$	215,281	$	167,323
Property, plant and equipment, net:
Land	$	2,182	$	2,182
Buildings and building improvements	23,116		23,314
Leasehold improvements	32,120		30,054
Data processing equipment and software	40,836		40,945
Machinery, equipment, furniture and fixtures	90,465		87,994
Construction in progress	10,728		9,562
	199,447		194,051
Accumulated depreciation	(132,937)		(126,069)
	$	66,510	$	67,982
Accrued expenses and other current liabilities:
Accrued customer obligations (2)	$	67,063	$	72,478
Wages and benefits	47,833		66,531
Dividends payable	9,970		8,673
Commissions and professional fees	5,459		6,190
Severance	—		31
Other	8,109		7,667
	$	138,434	$	161,570

(1)All short-term investments were classified as available-for-sale and the fair value approximates cost basis. The Company did not recognize any realized gains or losses on the sale of investments during the three and nine months ended July 2, 2022 and July 3, 2021.

(2)Represents customer advance payments, customer credit program, accrued warranty expense and accrued retrofit obligations.

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GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Jul. 02, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

3. GOODWILL AND INTANGIBLE ASSETS

Goodwill

Intangible assets classified as goodwill are not amortized. The goodwill established in connection with our acquisitions represents the estimated future economic benefits arising from the assets we acquired that did not qualify to be identified and recognized individually. The goodwill also includes the value of expected future cash flows from the acquisitions, expected synergies with our other affiliates and other unidentifiable intangible assets.

The Company performs an annual impairment test of its goodwill during the fourth quarter of each fiscal year, which coincides with the completion of its annual forecasting and refreshing of business outlook process.

The Company performed its annual impairment test in the fourth quarter of fiscal 2021 and concluded that no impairment charge was required. Any future adverse changes in expected operating results and/or unfavorable changes in other economic factors used to estimate fair values could result in a non-cash impairment in the future.

During the three and nine months ended July 2, 2022, the Company reviewed qualitative factors to ascertain if a "triggering" event may have taken place that may have the effect of reducing the fair value of the reporting unit below its carrying value and concluded that no triggering event had occurred. While we have concluded that a triggering event did not occur during the quarter ended July 2, 2022, a prolonged COVID-19 pandemic and macroeconomic headwinds could impact the results of operations due to changes to assumptions utilized in the determination of the estimated fair values of the reporting units that could be significant enough to trigger an impairment. Net sales and earnings growth rates could be negatively impacted by reductions or changes in demand for our products. The discount rate utilized in our valuation model could also be impacted by changes in the underlying interest rates and risk premiums included in the determination of the cost of capital.

The following table summarizes the Company's recorded goodwill by reportable segments (refer to Note 14) as of July 2, 2022 and October 2, 2021:

(in thousands)	Capital Equipment		APS		Total
Balance at October 2, 2021	$	46,561	$	26,388	$	72,949
Other	(2,849)		(313)		$	(3,162)
Balance at July 2, 2022	$	43,712	$	26,075	$	69,787

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, in-process research and development, and trade and brand names.

The following table reflects net intangible assets as of July 2, 2022 and October 2, 2021: 

	As of				Average estimated
(dollar amounts in thousands)	July 2, 2022		October 2, 2021		useful lives (in years)
Developed technology(1)	$	92,573	$	90,427	6.0 to 15.0
Accumulated amortization	(58,932)		(58,494)
Net developed technology	$	33,641	$	31,933
Customer relationships	$	34,421	$	36,114	5.0 to 6.0
Accumulated amortization	(34,421)		(36,114)
Net customer relationships	$	—	$	—
In-process research and development(1)	$	—	$	8,795	N.A
Accumulated amortization	—		—
Net in-process research and development	$	—	$	8,795
Trade and brand name	$	7,095	$	7,374	7.0 to 8.0
Accumulated amortization	(7,095)		(7,275)
Net trade and brand name	—		99
Other intangible assets	$	4,700	$	4,700	1.9 to 6.0
Accumulated amortization	(3,050)		(2,775)
Net other intangible assets	$	1,650	$	1,925
	$	35,291	$	42,752

(1) As of July 2, 2022, $7.9 million of in-process research and development assets were transferred to developed technology (definite-lived intangible assets) as the research and development process was completed, and are being amortized over their weighted-average useful lives of 6 years.

The following table reflects estimated annual amortization expense related to intangible assets as of July 2, 2022:

	As of
(in thousands)	July 2, 2022
Remaining fiscal 2022	$	1,416
Fiscal 2023	5,665
Fiscal 2024	5,665
Fiscal 2025	5,665
Fiscal 2026	5,665
Thereafter	11,215
Total amortization expense	$	35,291

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CASH, CASH EQUIVALENTS, RESTRICTED CASH AND SHORT-TERM INVESTMENTS

9 Months Ended

Jul. 02, 2022

Cash and Cash Equivalents [Abstract]

CASH, CASH EQUIVALENTS, RESTRICTED CASH AND SHORT-TERM INVESTMENTS

4. CASH, CASH EQUIVALENTS, AND SHORT-TERM INVESTMENTS

Cash equivalents consist of instruments with remaining maturities of three months or less at the date of purchase. In general, these investments are free of trading restrictions.

Cash, cash equivalents, and short-term investments consisted of the following as of July 2, 2022:

(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
Current assets:
Cash	$	164,458	$	—	$	—	$	164,458
Cash equivalents:
Money market funds (1)	161,338		—		(24)		161,314
Time deposits (2)	120,009		—		—		120,009
Total cash and cash equivalents	$	445,805	$	—	$	(24)	$	445,781
Short-term investments:
Time deposits (2)	300,000		—		—		300,000
Total short-term investments	$	300,000	$	—	$	—	$	300,000
Total cash, cash equivalents and short-term investments	$	745,805	$	—	$	(24)	$	745,781

(1)The fair value was determined using unadjusted prices in active, accessible markets for identical assets, and as such they were classified as Level 1 assets in the fair value hierarchy.

(2)Fair value approximates cost basis.

Cash, cash equivalents and short-term investments consisted of the following as of October 2, 2021:

(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
Current assets:
Cash	$	269,201	$	—	$	—	$	269,201
Cash equivalents:
Money market funds (1)	93,598		—		(18)		93,580
Time deposits (2)	7		—		—		7
Total cash and cash equivalents	$	362,806	$	—	$	(18)	$	362,788
Short-term investments:
Time deposits (2)	377,000		—		—		377,000
Total short-term investments	$	377,000	$	—	$	—	$	377,000
Total cash, cash equivalents and short-term investments	$	739,806	$	—	$	(18)	$	739,788

(1)The fair value was determined using unadjusted prices in active, accessible markets for identical assets, and as such they were classified as Level 1 assets in the fair value hierarchy.

(2)Fair value approximates cost basis.

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EQUITY INVESTMENTS

9 Months Ended

Jul. 02, 2022

Equity Method Investments [Abstract]

EQUITY INVESTMENTS

5. EQUITY INVESTMENTS

Equity investments consisted of the following as of July 2, 2022 and October 2, 2021:

	As of
(in thousands)	July 2, 2022		October 2, 2021
Non-marketable equity securities	$	5,397	$	6,388
Total equity investments	$	5,397	$	6,388

During the three and nine months ended July 2, 2022, the Company recorded an impairment of $1.3 million on a non-marketable equity security without a readily determinable fair value. The entire amount of the investment in the non-marketable equity security was impaired due to a significant deterioration in the earnings performance of the equity investee. The impairment amount is recorded within “Selling, general and administrative expense” in the Consolidated Condensed Statement of Operations.

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FAIR VALUE MEASUREMENTS

9 Months Ended

Jul. 02, 2022

Fair Value Disclosures [Abstract]

FAIR VALUE MEASURMENTS

6. FAIR VALUE MEASUREMENTS

Accounting standards establish three levels of inputs that may be used to measure fair value: quoted prices in active markets for identical assets or liabilities (referred to as Level 1), inputs other than Level 1 that are observable for the asset or liability either directly or indirectly (referred to as Level 2) and unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities (referred to as Level 3).

Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis 

We measure certain financial assets and liabilities at fair value on a recurring basis. There were no transfers between fair value measurement levels during the three and nine months ended July 2, 2022.

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 accounts receivables, prepaid expenses and other current assets, accounts payable and accrued expenses approximate fair value.

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DERIVATIVES FINANCIAL INSTRUMENTS (Notes)

9 Months Ended

Jul. 02, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES FINANCIAL INSTRUMENTS

7. DERIVATIVE FINANCIAL INSTRUMENTS

The Company’s international operations are exposed to changes in foreign exchange rates due to transactions denominated in currencies other than U.S. dollars. Most of the Company’s revenue and cost of materials are transacted in U.S. dollars. However, a significant amount of the Company’s operating expenses is denominated in local currencies, primarily in Singapore.

The foreign currency exposure of our operating expenses is generally hedged with foreign exchange forward contracts. The Company’s foreign exchange risk management programs include using foreign exchange forward contracts with cash flow hedge accounting designation to hedge exposures to the variability in the U.S. dollar equivalent of forecasted non-U.S. dollar-denominated operating expenses. These instruments generally mature within twelve months. For these derivatives, we report the after-tax gain or loss from the effective portion of the hedge as a component of accumulated other comprehensive income (loss), and we reclassify it into earnings in the same period or periods in which the hedged transaction affects earnings and in the same line item on the Consolidated Condensed Statements of Operations as the impact of the hedged transaction.

The fair value of derivative instruments on our Consolidated Condensed Balance Sheets as of July 2, 2022 and October 2, 2021 were as follows:

	As of
	July 2, 2022				October 2, 2021
(in thousands)	Notional Amount		Fair Value Liability Derivatives(1)		Notional Amount		Fair Value Liability Derivatives(1)
Derivatives designated as hedging instruments:
Foreign exchange forward contracts (2)	$	57,756	$	(991)	$	57,682	$	(616)
Total derivatives	$	57,756	$	(991)	$	57,682	$	(616)

(1)The fair value of derivative liabilities is measured using level 2 fair value inputs and is included in accrued expenses and other current liabilities on our Consolidated Condensed Balance Sheets.

(2)Hedged amounts expected to be recognized to income within the next twelve months.

The effects of derivative instruments designated as cash flow hedges in our Consolidated Condensed Statements of Comprehensive Income for the three and nine months ended July 2, 2022 and July 3, 2021 were as follows:

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Foreign exchange forward contract in cash flow hedging relationships:
Net (loss)/gain recognized in OCI, net of tax (1)	$	(1,233)	$	(133)	$	(1,168)	$	301
Net (loss)/gain reclassified from accumulated OCI into income, net of tax (2)	$	(170)	$	317	$	(793)	$	1,295

(1)Net change in the fair value of the effective portion classified in OCI.

(2)Effective portion classified as selling, general and administrative expense.

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LEASES

9 Months Ended

Jul. 02, 2022

Leases [Abstract]

Leases

8. LEASES

We have entered into various non-cancellable operating and finance lease agreements for certain of our offices, manufacturing, technology, sales support and service centers, equipment, and vehicles. We determine if an arrangement is a lease, or contains a lease, at inception and record the leases in our financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor. Our lease terms may include one or more options to extend the lease terms, for periods from one year to 20 years, when it is reasonably certain that we will exercise that option. As of July 2, 2022, there was no option to extend the lease which was recognized as a right-of-use ("ROU") asset, or a lease liability. We have lease agreements with lease and non-lease components, and non-lease components are accounted for separately and not included in our leased assets and corresponding liabilities. We have elected not to present short-term leases on the Consolidated Condensed Balance Sheets as these leases have a lease term of 12 months or less at lease inception.

Operating leases are included in operating ROU assets, current operating lease liabilities and non-current operating lease liabilities, and finance leases are included in property, plant and equipment, accrued expenses and other current liabilities, and other liabilities on the Consolidated Condensed Balance Sheets. As of July 2, 2022 and October 2, 2021, our finance leases are not material.

The following table shows the components of lease expense:

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Operating lease expense (1)	$	2,173	$	1,894	$	6,217	$	5,693

(1)Operating lease expense includes short-term lease expense, which is immaterial for the three and nine months ended July 2, 2022 and July 3, 2021.

The following table shows the cash flows arising from lease transactions. Cash payments related to short-term leases are not included in the measurement of operating lease liabilities, and, as such, are excluded from the amounts below:

	Nine months ended
(in thousands)	July 2, 2022		July 3, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	5,715	$	5,364

The following table shows the weighted-average lease terms and discount rates for operating leases:

	As of
	July 2, 2022		October 2, 2021
Operating leases:
Weighted-average remaining lease term (in years):	8.5		9.6
Weighted-average discount rate:	5.7	%	5.8	%

Future lease payments, excluding short-term leases are detailed as follows:

	As of
(in thousands)	July 2, 2022
Remaining fiscal 2022	$	2,095
Fiscal 2023	8,133
Fiscal 2024	7,680
Fiscal 2025	6,935
Fiscal 2026	5,006
Thereafter	24,028
Total minimum lease payments	$	53,877
Less: Interest	$	12,068
Present value of lease obligations	$	41,809
Less: Current portion	$	5,973
Long-term portion of lease obligations	$	35,836

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DEBT AND OTHER OBLIGATIONS DEBT AND OTHER OBLIGATIONS (Notes)

9 Months Ended

Jul. 02, 2022

Debt Disclosure [Abstract]

Debt and Other Obligations

9. DEBT AND OTHER OBLIGATIONS

Bank Guarantees

On November 22, 2013, the Company obtained a $5.0 million credit facility with Citibank in connection with the issuance of bank guarantees for operational purposes. As of July 2, 2022, the outstanding amount under this facility was $2.9 million.

Credit Facilities

On February 15, 2019, the Company entered into a Facility Letter and Overdraft Agreement (collectively, the “Facility Agreements”) with MUFG Bank, Ltd., Singapore Branch (the “Bank”). The Facility Agreements provide the Company and one of its subsidiaries with an overdraft facility of up to $150.0 million (the “Overdraft Facility”) for general corporate purposes. Amounts outstanding under the Overdraft Facility, including interest, are payable upon thirty days written demand by the Bank. Interest on the Overdraft Facility is calculated on a daily basis, and the applicable interest rate is calculated at the overnight U.S. Dollar LIBOR rate plus a margin of 1.5% per annum. The Overdraft Facility is an unsecured facility per the terms of the Facility Agreements. The Facility Agreements contain customary non-financial covenants, including, without limitation, covenants that restrict the Company’s ability to sell or dispose of its assets, cease owning at least 51% of two of its subsidiaries (the "Subsidiaries"), or encumber its assets with material security interests (including any pledge of monies in the Subsidiaries' cash deposit account with the Bank). The Facility Agreements also contain typical events of default, including, without limitation, non-payment of financial obligations when due, cross defaults to other material indebtedness of the Company and any breach of a representation or warranty under the Facility Agreements. As of July 2, 2022, there were no outstanding amounts under the Overdraft Facility.

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SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS

9 Months Ended

Jul. 02, 2022

Share-based Payment Arrangement [Abstract]

SHAREHOLDERS’ EQUITY AND EMPLOYEE BENEFIT PLANS

10. SHAREHOLDERS’ EQUITY AND EMPLOYEE BENEFIT PLANS

401(k) Retirement Income Plans

The Company has a 401(k) retirement plan (the “401(k) Plan”) for eligible U.S. employees. The 401(k) Plan allows for employee contributions and matching Company contributions from 4% to 6% based upon terms and conditions of the 401(k) Plan.

The following table reflects the Company’s contributions to the 401(k) Plan during the three and nine months ended July 2, 2022 and July 3, 2021:

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Cash	$	419	$	458	$	1,423	$	1,324

Share Repurchase Program

On August 15, 2017, the Company’s Board of Directors authorized a program (the "Program") to repurchase up to $100 million of the Company’s common stock on or before August 1, 2020. In 2018, 2019 and 2020, the Board of Directors increased the share repurchase authorization under the Program to $200 million, $300 million, and $400 million, respectively. On March 3, 2022, the Board of Directors further increased the share repurchase authorization under the Program by an additional $400 million to $800 million, and extended its duration through August 1, 2025. The Company has entered into a written trading plan under Rule 10b5-1 of the Exchange Act to facilitate repurchases under the Program. The Program may be suspended or discontinued at any time and is funded using the Company's available cash, cash equivalents and short-term investments. Under the Program, shares may be repurchased through open market and/or privately negotiated transactions at prices deemed appropriate by management. The timing and amount of repurchase transactions under the Program depend on market conditions as well as corporate and regulatory considerations. During the three and nine months ended July 2, 2022, the Company repurchased a total of approximately 653.0 thousand and 1,423.0 thousand shares of common stock under the Program at a cost of approximately $31.1 million and $72.6 million, respectively. The stock repurchases were recorded in the periods they were delivered and accounted for as treasury stock in the Company's Consolidated Condensed Balance Sheets. The Company records treasury stock purchases under the cost method using the first-in, first-out (FIFO) method. Upon re-issuance 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.

Accelerated Share Repurchase (“ASR”)

In addition to the 653.0 thousand shares of common stock repurchased under the Program during the three months ended July 2, 2022, on March 9, 2022, the Company entered into an ASR agreement (the “March 2022 ASR Agreement”) with an investment bank counterparty (“Dealer”) to repurchase $150 million of the Company's common stock. The March 2022 ASR Agreement was entered into pursuant to the Company's current $800 million share repurchase authorization.

Under the March 2022 ASR Agreement, the Company made an up-front payment of $150 million to the Dealer and received an initial delivery of 2,449.9 thousand shares of common stock at a cost of approximately $120 million on March 10, 2022. The final number of shares to be repurchased will be based on the volume-weighted average price of the Company's common stock during the term of the transaction, less a discount and subject to adjustments pursuant to the terms and conditions of the March 2022 ASR Agreement. For accounting purposes, the March 2022 ASR Agreement is evaluated as an unsettled forward contract indexed to the Company's own stock, with $30 million being classified within common stock. At settlement, the Dealer may be required to deliver additional shares of common stock to the Company, or, under certain circumstances, the Company may be required to deliver shares of its common stock or may elect to make a cash payment to the Dealer.

The March 2022 ASR Agreement was settled between the Company and the Dealer on April 22, 2022 and the Company received an additional 344.5 thousand shares of common stock from the Dealer. In total, an aggregate of 2,794.4 thousand shares of common stock were delivered by the Dealer under the March 2022 ASR Agreement at an average price of $53.68 per share, which was then reclassified as treasury stock from common stock in shareholder’s equity. As of July 2, 2022, our remaining stock repurchase authorization under the Program was approximately $309.3 million.

Dividends

On October 18, 2021, the Board of Directors declared a quarterly dividend of $0.17 per share of common stock. Dividends paid during the three and nine months ended July 2, 2022 totaled $10.1 million and $29.4 million, respectively. The declaration of any future cash dividend is at the discretion of the Board of Directors and will depend on the Company's financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination that such dividends are in the best interests of the Company's shareholders.

Accumulated Other Comprehensive Loss

The following table reflects accumulated other comprehensive loss reflected on the Consolidated Condensed Balance Sheets as of July 2, 2022 and October 2, 2021: 

	As of
(in thousands)	July 2, 2022		October 2, 2021
(Loss)/gain from foreign currency translation adjustments	$	(17,343)	$	682
Unrecognized actuarial loss on pension plan, net of tax	(2,985)		(3,088)
Unrealized loss on hedging	(991)		(616)
Accumulated other comprehensive loss	$	(21,319)	$	(3,022)

Equity-Based Compensation

The Company has a stockholder-approved equity-based compensation plan, the 2021 Omnibus Incentive Plan (the “Plan”) from which employees and directors receive grants. As of July 2, 2022, 3.3 million shares of common stock are available for grant to the Company's employees and directors under the Plan.

•Relative TSR Performance Share Units (“Relative TSR PSUs”) entitle the employee to receive common stock of the Company on the award vesting date, typically the third anniversary of the grant date (or as soon as administratively practicable if later), if market performance objectives which measure the relative total shareholder return (“TSR”) are attained. Relative TSR is calculated based upon the 90-calendar day average price at the end of the performance period of the Company's stock as compared to specific peer companies that comprise the GICS (45301020) Semiconductor Index. TSR is measured for the Company and each peer company over a performance period, which is generally three years. Vesting percentages range from 0% to 200% of awards granted. The provisions of the Relative TSR PSUs are

reflected in the grant date fair value of the award; therefore, compensation expense is recognized regardless of whether the market condition is ultimately satisfied. Compensation expense is reversed if the award is forfeited prior to the vesting date.

•Revenue Growth Performance Share Units (“Growth PSUs”) entitle the employee to receive common stock of the Company on the award vesting date, typically the third anniversary of the grant date (or as soon as administratively practicable if later), based on organic revenue growth objectives and relative growth performance against named competitors as set by the Management Development and Compensation Committee (“MDCC”) of the Company's Board of Directors. Organic revenue growth is calculated by averaging revenue growth (net of revenues from acquisitions) over a performance period, which is generally three years. Revenues from acquisitions will be included in the calculation after four fiscal quarters after acquisition. Any portion of the grant that does not meet the revenue growth objectives and relative growth performance is forfeited. Vesting percentages range from 0% to 200% of awards granted.

•In general, stock options and Time-based Restricted Share Units ("Time-based RSUs") awarded to employees vest ratably over a three-year period on the anniversary of the grant date 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.

Equity-based compensation expense recognized in the Consolidated Condensed Statements of Operations for the three and nine months ended July 2, 2022 and July 3, 2021 was based upon awards ultimately expected to vest, with forfeiture accounted for when they occur.

The following table reflects Time-based RSUs, Relative TSR PSUs, Growth PSUs and common stock granted during the three and nine months ended July 2, 2022 and July 3, 2021:

	Three months ended		Nine months ended
(shares in thousands)	July 2, 2022	July 3, 2021	July 2, 2022	July 3, 2021
Time-based RSUs	1	—	303	484
Relative TSR PSUs	—	—	154	154
Growth PSUs	—	—	77	51
Common stock	4	4	12	19
Equity-based compensation in shares	5	4	546	708

The following table reflects total equity-based compensation expense, which includes Time-based RSUs, Relative TSR PSUs, Growth PSUs and common stock, included in the Consolidated Condensed Statements of Operations during the three and nine months ended July 2, 2022 and July 3, 2021: 

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Cost of sales	$	193	$	211	$	727	$	626
Selling, general and administrative	3,233		3,008		10,485		8,111
Research and development	1,039		921		3,261		2,767
Total equity-based compensation expense	$	4,465	$	4,140	$	14,473	$	11,504

The following table reflects equity-based compensation expense, by type of award, for the three and nine months ended July 2, 2022 and July 3, 2021:  

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Time-based RSUs	$	2,845	$	2,571	$	8,763	$	7,772
Relative TSR PSUs	1,073		988		3,060		3,019
Growth PSUs	310		359		1,938		121
Common stock	237		222		712		592
Total equity-based compensation expense	$	4,465	$	4,140	$	14,473	$	11,504

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REVENUE AND CONTRACT LIABILITIES

9 Months Ended

Jul. 02, 2022

Revenue from Contract with Customer [Abstract]

REVENUE AND CONTRACT LIABILITIES

11. REVENUE AND CONTRACT BALANCES

The Company recognizes revenue when we satisfy performance obligations as evidenced by the transfer of control of our products or services to customers. In general, the Company generates revenue from product sales, either directly to customers or to distributors. In determining whether a contract exists, we evaluate the terms of the agreement, the relationship with the customer or distributor and their ability to pay. Service revenue is generally recognized over time as the services are performed. For the three and nine months ended July 2, 2022, and July 3, 2021, the service revenue was not material.

The Company reports revenue based on our reportable segments. The Company believes that reporting revenue on this basis provides information about how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Please refer to Note 14: Segment Information, for disclosure of revenue by segment.

Contract Balances

Our contract assets relate to our rights to consideration for revenue with collection dependent on events other than the passage of time, such as the achievement of specified payment milestones. The contract assets will be transferred to net account receivables as our right to consideration for these contract assets become unconditional. Contracts assets are reported in the accompanying Consolidated Condensed Balance Sheets within prepaid expenses and other current assets.

Our contract liabilities are primarily related to payments received in advance of satisfying performance obligations, and are reported in the accompanying Consolidated Condensed Balance Sheets within accrued expenses and other current liabilities.

Contract liabilities increase as a result of receiving new advance payments from customers and decrease as revenue is recognized from product sales under advance payment arrangements upon satisfying the performance obligations.

The following table shows the changes in contract asset balances during the three and nine months ended July 2, 2022 and July 3, 2021:

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Contract assets, beginning of period	$	26,721	$	—	$	—	$	—
Additions	18,563		—		45,284		—
Contract assets, end of period	$	45,284	$	—	$	45,284	$	—

The following table shows the changes in contract liability balances during the three and nine months ended July 2, 2022 and July 3, 2021:

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Contract liabilities, beginning of period	$	17,300	$	5,788	$	15,596	$	2,958
Revenue recognized	(29,612)		(23,725)		(104,796)		(43,993)
Additions	17,996		26,486		94,884		49,584
Contract liabilities, end of period	$	5,684	$	8,549	$	5,684	$	8,549

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EARNINGS PER SHARE

9 Months Ended

Jul. 02, 2022

Earnings Per Share [Abstract]

EARNINGS PER SHARE

12. EARNINGS PER SHARE

Basic income per share is calculated using the weighted average number of shares of common stock outstanding during the period. Stock options and restricted stock are included in the calculation of diluted earnings per share, except when their effect would be anti-dilutive.

The following table reflects a reconciliation of the shares used in the basic and diluted net income per share computation for the three and nine months ended July 2, 2022 and July 3, 2021: 

	Three months ended
(in thousands, except per share data)	July 2, 2022				July 3, 2021
	Basic		Diluted		Basic		Diluted
NUMERATOR:
Net income	$	119,034	$	119,034	$	113,766	$	113,766
DENOMINATOR:
Weighted average shares outstanding - Basic	58,985		58,985		62,023		62,023
Dilutive effect of Equity Plans			970				1,462
Weighted average shares outstanding - Diluted			59,955				63,485
EPS:
Net income per share - Basic	$	2.02	$	2.02	$	1.83	$	1.83
Effect of dilutive shares			(0.03)				(0.04)
Net income per share - Diluted			$	1.99			$	1.79
Anti-dilutive shares(1)			19				0

	Nine months ended
(in thousands, except per share data)	July 2, 2022				July 3, 2021
	Basic		Diluted		Basic		Diluted
NUMERATOR:
Net income	$	368,641	$	368,641	$	233,450	$	233,450
DENOMINATOR:
Weighted average shares outstanding - Basic	60,951		60,951		62,023		62,023
Dilutive effect of Equity Plans			989				1,341
Weighted average shares outstanding - Diluted			61,940				63,364
EPS:
Net income per share - Basic	$	6.05	$	6.05	$	3.76	$	3.76
Effect of dilutive shares			(0.10)				(0.08)
Net income per share - Diluted			$	5.95			$	3.68
Anti-dilutive shares(1)			1				3

(1) Represents the Relative TSR PSUs and Growth PSUs that are excluded from the calculation of diluted earnings per share for the three and nine months ended July 2, 2022 and July 3, 2021 as the effect would have been anti-dilutive.

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INCOME TAXES

9 Months Ended

Jul. 02, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

13. INCOME TAXES

The following table reflects the provision for income taxes and the effective tax rate for the three and nine months ended July 2, 2022 and July 3, 2021: 

	Three months ended						Nine months ended
(dollar amounts in thousands)	July 2, 2022			July 3, 2021			July 2, 2022			July 3, 2021
Provision for income taxes	$	5,165		$	7,212		$	36,813		$	25,722
Effective tax rate	4.2		%	6.0		%	9.1		%	9.9		%

The decrease in provision for income taxes for the three months ended July 2, 2022 as compared to the three months ended July 3, 2021 is primarily related to a decrease in foreign minimum tax, offset by an increase in tax expense due to jurisdictional mix of profitability and a decrease in tax benefit from the release of valuation allowance recorded against the net deferred tax assets. During the three months ended July 2, 2022 and July 3, 2021, the Company recorded a $4.9 million and $7.2 million tax benefit, respectively, from the release of valuation allowance recorded against the net deferred tax assets of a certain foreign jurisdiction due to a forecasted increase in future profitability in the corresponding jurisdiction. The increase in provision for income taxes for the nine months ended July 2, 2022 as compared to the nine months ended July 3, 2021 is primarily related to an overall increase in year-to-date profitability, principally earned in lower tax jurisdictions, and foreign minimum tax.

For the three and nine months ended July 2, 2022, the effective tax rate is lower than the U.S. federal statutory tax rate primarily due to foreign income earned in lower tax jurisdictions, tax incentives, tax credits, a release of valuation allowances on certain deferred tax assets and taxes on unrepatriated foreign earnings, partially offset by foreign minimum tax.

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SEGMENT INFORMATION

9 Months Ended

Jul. 02, 2022

Segment Reporting [Abstract]

SEGMENT INFORMATION

14. SEGMENT INFORMATION

Reportable segments are defined as components of an enterprise that engage in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker (the “CODM”) in deciding how to allocate resources and assess performance. The Company's Chief Executive Officer is the CODM. The CODM does not review discrete asset information. The Company operates two reportable segments consisting of: (1) Capital Equipment; and (2) Aftermarket Products and Services ("APS").

The following table reflects operating information by segment for the three and nine months ended July 2, 2022 and July 3, 2021: 

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Net revenue:
Capital Equipment	$	321,946	$	370,187	$	1,064,383	$	881,722
APS	50,191		54,131		152,924		150,616
Net revenue	372,137		424,318		1,217,307		1,032,338
Income from operations:
Capital Equipment	102,467		107,016		345,686		218,010
APS	19,610		13,439		56,842		39,601
Income from operations	$	122,077	$	120,455	$	402,528	$	257,611

We have considered (1) information that is regularly reviewed by our CODM as defined by the authoritative guidance on segment reporting, in evaluating financial performance; and (2) other financial data, including information that we include in our earnings releases but which is not included in our financial statements, to disaggregate revenues by end markets served. The principal category we use to disaggregate revenues is by the end markets served in the Capital Equipment segment.

The following table reflects net revenue by Capital Equipment end markets served for the three and nine months ended July 2, 2022 and July 3, 2021: 

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
General Semiconductor	$	223,034	$	280,563	$	670,251	$	633,234
Automotive & Industrial	51,018		38,488		160,366		103,416
LED	20,203		31,951		128,394		115,071
Memory	27,691		19,185		105,372		30,001
Total Capital Equipment revenue	$	321,946	$	370,187	$	1,064,383	$	881,722

The following table reflects capital expenditures, depreciation expense and amortization expense for the three and nine months ended July 2, 2022 and July 3, 2021:

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Capital expenditures:
Capital Equipment	$	3,670	$	5,526	$	8,103	$	11,120
APS	1,283		2,430		3,110		5,643
	$	4,953	$	7,956	$	11,213	$	16,763
Depreciation expense:
Capital Equipment	$	2,274	$	1,668	$	6,813	$	4,850
APS	1,827		1,797		5,417		5,049
	$	4,101	$	3,465	$	12,230	$	9,899
Amortization expense:
Capital Equipment	$	887	$	845	$	2,820	$	2,751
APS	222		495		723		1,902
	$	1,109	$	1,340	$	3,543	$	4,653

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COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Notes)

9 Months Ended

Jul. 02, 2022

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS

15. COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS

Warranty Expense

The Company's equipment is generally shipped with a one-year warranty against manufacturing defects. The Company establishes reserves for estimated warranty expense when revenue for the related equipment is recognized. The reserve for estimated warranty expense is based upon historical experience and management's estimate of future warranty costs, including product part replacement, freight charges and related labor costs expected to be incurred in correcting manufacturing defects during the warranty period.

The following table reflects the reserve for warranty activity for the three and nine months ended July 2, 2022 and July 3, 2021: 

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Reserve for warranty, beginning of period	$	15,518	$	15,574	$	16,961	$	9,576
Provision for warranty	2,842		4,325		9,001		15,654
Utilization of reserve	(4,118)		(3,004)		(11,720)		(8,335)
Reserve for warranty, end of period	$	14,242	$	16,895	$	14,242	$	16,895

Other Commitments and Contingencies

The following table reflects obligations not reflected on the Consolidated Condensed Balance Sheet as of July 2, 2022:

			Payments due by fiscal year
(in thousands)	Total		2022		2023		2024		2025		2026		thereafter
Inventory purchase obligation (1)	$	347,900	$	113,400	$	234,500	$	—	$	—	$	—	$	—

(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.

From time to time, the Company is party to or the target of lawsuits, claims, investigations and proceedings, including for personal injury, intellectual property, commercial, contract, and employment matters, which are handled and defended in the ordinary course of business. The Company accrues a contingent loss liability for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated. When a single amount cannot be reasonably estimated but the cost can be estimated within a range, the Company accrues the minimum amount. The Company expenses legal costs, including those expected to be incurred in connection with a loss contingency, as incurred.

Unfunded Capital Commitments

As of July 2, 2022, the Company also has an obligation to fund uncalled capital commitments of approximately $9.6 million, as and when required, in relation to its investment in a private equity fund.

Concentrations

The following table reflects significant customer concentrations as a percentage of net revenue for the nine months ended July 2, 2022 and July 3, 2021:

	Nine months ended
	July 2, 2022	July 3, 2021
ASE Technology Holding Co	*	19.4	%

* Represents less than 10% of total net revenue

The following table reflects significant customer concentrations as a percentage of total accounts receivable as of July 2, 2022 and July 3, 2021:

	As of
	July 2, 2022		July 3, 2021
Tianshui Huatian Technology Co., Ltd.	20.6	%	12.9	%
Haoseng Industrial Co., Ltd. (1)	*		16.1	%

(1)Distributor of the Company's products.

* Represents less than 10% of total accounts receivable

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BASIS OF PRESENTATION (Policies)

9 Months Ended

Jul. 02, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Consolidation

These consolidated condensed financial statements include the accounts of Kulicke and Soffa Industries, Inc. and its subsidiaries (“we,” “us,” “our,” or the “Company”) with appropriate elimination of intercompany balances and transactions.

The interim consolidated condensed financial statements are unaudited and, in management's opinion, include all adjustments (consisting only of normal and recurring adjustments) necessary for a fair statement of results for these interim periods. The interim consolidated condensed financial statements do not include all of the information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended October 2, 2021, filed with the Securities and Exchange Commission, which includes Consolidated Balance Sheets as of October 2, 2021 and October 3, 2020, and the related Consolidated Statements of Operations, Statements of Comprehensive Income, Changes in Shareholders' Equity and Cash Flows for each of the years in the three-year period ended October 2, 2021. 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 30. Fiscal 2022 quarters end on January 1, 2022, April 2, 2022, July 2, 2022 and October 1, 2022. In fiscal years consisting of 53 weeks, the fourth quarter will consist of 14 weeks. Fiscal 2021 quarters ended on January 2, 2021, April 3, 2021, July 3, 2021 and October 2, 2021.

Nature of business

Nature of Business

The Company designs, manufactures and sells capital equipment and tools as well as services, maintains, repairs and upgrades equipment, all used to assemble semiconductor devices. The Company's operating results depend upon the capital and operating expenditures of semiconductor device manufacturers, integrated device manufacturers (“IDMs”), outsourced semiconductor assembly and test providers (“OSATs”), and other electronics manufacturers including automotive electronics suppliers worldwide which, in turn, depend on the current and anticipated market demand for semiconductors and products utilizing semiconductors. The semiconductor industry is highly volatile and experiences downturns and slowdowns which can have a severe negative effect on the semiconductor industry's demand for semiconductor capital equipment, including assembly equipment manufactured and sold by the Company and, to a lesser extent, tools, including those sold by the Company. These downturns and slowdowns have in the past adversely affected the Company's operating results. The Company believes such volatility will continue to characterize the industry and the Company's operations in the future.

Use of Estimates

Use of Estimates

The preparation of consolidated condensed financial statements requires management to make assumptions, estimates and judgments that affect the reported amounts of assets and liabilities, net revenue and expenses during the reporting periods, and disclosures of contingent assets and liabilities as of the date of the consolidated condensed financial statements. On an ongoing basis, management evaluates estimates, including but not limited to, those related to accounts receivable, reserves for excess and obsolete inventory, carrying value and lives of fixed assets, goodwill and intangible assets, the valuation estimates and assessment of impairment and observable price adjustments, income taxes, equity-based compensation expense, and warranties. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable. As a result, management makes judgments regarding the carrying values of the Company's assets and liabilities that are not readily apparent from other sources. Authoritative pronouncements, historical experience and assumptions are used as the basis for making estimates, and on an ongoing basis, management evaluates these estimates. Actual results may differ from these estimates.

Due to the coronavirus (“COVID-19”) pandemic and macroeconomic headwinds, there has been uncertainty and disruption in the global economy and financial markets. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of July 2, 2022. While there was no material impact to our consolidated condensed financial statements as of and for the quarter ended July 2, 2022, these estimates may change, as new events occur and additional information is obtained, as well as other factors related to COVID-19 and macroeconomic headwinds that could materially impact our consolidated condensed financial statements in future reporting periods.

Contract assets

Contract Assets

A contract asset is the Company’s right to consideration in exchange for goods or services that the Company has transferred to a customer. ASC 606, Revenue from Contracts with Customers, distinguishes between a contract asset and a receivable based on whether receipt of the consideration is conditional on something other than the passage of time. When the Company transfers control of goods or services to a customer before the customer pays consideration, the Company records either a contract asset or a receivable depending on the nature of the Company’s right to consideration for its performance. The point at which a contract asset becomes an account receivable may be earlier than the point at which an invoice is issued. The Company assesses a contract asset for impairment in accordance with ASC 310, Receivables.

Accelerated share repurchase

Accelerated Share Repurchase From time to time, the Company may enter into accelerated share repurchase (“ASR”) agreements with third-party financial institutions to repurchase shares of the Company’s common stock. Under an ASR agreement, in exchange for an up-front payment, the counterparty makes an initial delivery of shares of the Company's common stock during the purchase period of the relevant ASR. This initial delivery of shares represents the minimum number of shares that the Company may receive under an ASR agreement. Upon settlement of an ASR agreement, the counterparty may deliver additional shares, with the final number of shares delivered determined based on the volume-weighted average price of the Company’s common stock over the term of such ASR agreement, less an agreed-upon discount. The transactions are accounted for as equity transactions and are included in Treasury Stock when the shares are received, at which time there is an immediate reduction in the weighted-average common shares calculation for basic and diluted earnings per share.

Recent accounting pronouncements

Recent Accounting Pronouncements

Income Taxes

In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, Income Taxes (Topic 740). The amendments in this ASU, among other changes, simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, clarify and amend the existing guidance. We adopted this ASU in the first quarter of fiscal 2022. The adoption of this ASU did not have a material impact on our consolidated condensed financial statements.

Contracts in Entity's Own Equity

In August 2020, the FASB issued ASU 2020-06, Derivatives and Hedging - Contracts in Entity's Own Equity (Topic 815). The amendments in this ASU, among other changes, remove current guidance that allows an entity to rebut the presumption that potential share settlement be included in the diluted earnings per share calculation when an instrument may be settled in cash or shares if the entity has a history or policy of cash settlement. These amendments affect any instrument that may be settled in cash or shares and, therefore, affects the diluted earnings per share calculation for both convertible instruments and contracts in an entity's own equity. We elected to early adopt this ASU in the second quarter of fiscal 2022. The adoption of this ASU did not have a material impact on our consolidated condensed financial statements.

Codification Improvements

In October 2020, the FASB issued ASU 2020-10, Codification Improvements. The amendments in this ASU affect a wide variety of topics in the Codification and improve the consistency of the Codification by including all disclosure guidance in the appropriate disclosure sections (Section 50). We adopted this ASU in the first quarter of fiscal 2022. The adoption of this ASU did not have a material impact on our consolidated condensed financial statements.

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BALANCE SHEET COMPONENTS (Tables)

9 Months Ended

Jul. 02, 2022

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 July 2, 2022 and October 2, 2021:

	As of
(in thousands)	July 2, 2022		October 2, 2021
Short-term investments, available-for-sale (1)	$	300,000	$	377,000
Inventories, net:
Raw materials and supplies	$	126,593	$	94,493
Work in process	69,426		55,866
Finished goods	40,363		40,006
	236,382		190,365
Inventory reserves	(21,101)		(23,042)
	$	215,281	$	167,323
Property, plant and equipment, net:
Land	$	2,182	$	2,182
Buildings and building improvements	23,116		23,314
Leasehold improvements	32,120		30,054
Data processing equipment and software	40,836		40,945
Machinery, equipment, furniture and fixtures	90,465		87,994
Construction in progress	10,728		9,562
	199,447		194,051
Accumulated depreciation	(132,937)		(126,069)
	$	66,510	$	67,982
Accrued expenses and other current liabilities:
Accrued customer obligations (2)	$	67,063	$	72,478
Wages and benefits	47,833		66,531
Dividends payable	9,970		8,673
Commissions and professional fees	5,459		6,190
Severance	—		31
Other	8,109		7,667
	$	138,434	$	161,570

(1)All short-term investments were classified as available-for-sale and the fair value approximates cost basis. The Company did not recognize any realized gains or losses on the sale of investments during the three and nine months ended July 2, 2022 and July 3, 2021.

(2)Represents customer advance payments, customer credit program, accrued warranty expense and accrued retrofit obligations.

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GOODWILL AND INTANGIBLE ASSETS (Tables)

9 Months Ended

Jul. 02, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The following table summarizes the Company's recorded goodwill by reportable segments (refer to Note 14) as of July 2, 2022 and October 2, 2021:

(in thousands)	Capital Equipment		APS		Total
Balance at October 2, 2021	$	46,561	$	26,388	$	72,949
Other	(2,849)		(313)		$	(3,162)
Balance at July 2, 2022	$	43,712	$	26,075	$	69,787

Net intangible assets

The following table reflects net intangible assets as of July 2, 2022 and October 2, 2021: 

	As of				Average estimated
(dollar amounts in thousands)	July 2, 2022		October 2, 2021		useful lives (in years)
Developed technology(1)	$	92,573	$	90,427	6.0 to 15.0
Accumulated amortization	(58,932)		(58,494)
Net developed technology	$	33,641	$	31,933
Customer relationships	$	34,421	$	36,114	5.0 to 6.0
Accumulated amortization	(34,421)		(36,114)
Net customer relationships	$	—	$	—
In-process research and development(1)	$	—	$	8,795	N.A
Accumulated amortization	—		—
Net in-process research and development	$	—	$	8,795
Trade and brand name	$	7,095	$	7,374	7.0 to 8.0
Accumulated amortization	(7,095)		(7,275)
Net trade and brand name	—		99
Other intangible assets	$	4,700	$	4,700	1.9 to 6.0
Accumulated amortization	(3,050)		(2,775)
Net other intangible assets	$	1,650	$	1,925
	$	35,291	$	42,752

(1) As of July 2, 2022, $7.9 million of in-process research and development assets were transferred to developed technology (definite-lived intangible assets) as the research and development process was completed, and are being amortized over their weighted-average useful lives of 6 years.

Estimated annual amortization expense related to intangible assets

The following table reflects estimated annual amortization expense related to intangible assets as of July 2, 2022:

	As of
(in thousands)	July 2, 2022
Remaining fiscal 2022	$	1,416
Fiscal 2023	5,665
Fiscal 2024	5,665
Fiscal 2025	5,665
Fiscal 2026	5,665
Thereafter	11,215
Total amortization expense	$	35,291

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CASH, CASH EQUIVALENTS, RESTRICTED CASH AND SHORT-TERM INVESTMENTS (Tables)

9 Months Ended

Jul. 02, 2022

Cash and Cash Equivalents [Abstract]

Cash, cash equivalents, restricted cash and short-term investments

Cash, cash equivalents, and short-term investments consisted of the following as of July 2, 2022:

(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
Current assets:
Cash	$	164,458	$	—	$	—	$	164,458
Cash equivalents:
Money market funds (1)	161,338		—		(24)		161,314
Time deposits (2)	120,009		—		—		120,009
Total cash and cash equivalents	$	445,805	$	—	$	(24)	$	445,781
Short-term investments:
Time deposits (2)	300,000		—		—		300,000
Total short-term investments	$	300,000	$	—	$	—	$	300,000
Total cash, cash equivalents and short-term investments	$	745,805	$	—	$	(24)	$	745,781

(1)The fair value was determined using unadjusted prices in active, accessible markets for identical assets, and as such they were classified as Level 1 assets in the fair value hierarchy.

(2)Fair value approximates cost basis.

Cash, cash equivalents and short-term investments consisted of the following as of October 2, 2021:

(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
Current assets:
Cash	$	269,201	$	—	$	—	$	269,201
Cash equivalents:
Money market funds (1)	93,598		—		(18)		93,580
Time deposits (2)	7		—		—		7
Total cash and cash equivalents	$	362,806	$	—	$	(18)	$	362,788
Short-term investments:
Time deposits (2)	377,000		—		—		377,000
Total short-term investments	$	377,000	$	—	$	—	$	377,000
Total cash, cash equivalents and short-term investments	$	739,806	$	—	$	(18)	$	739,788

(1)The fair value was determined using unadjusted prices in active, accessible markets for identical assets, and as such they were classified as Level 1 assets in the fair value hierarchy.

(2)Fair value approximates cost basis.

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EQUITY INVESTMENTS (Tables)

9 Months Ended

Jul. 02, 2022

Equity Method Investments [Abstract]

Equity investments

Equity investments consisted of the following as of July 2, 2022 and October 2, 2021:

	As of
(in thousands)	July 2, 2022		October 2, 2021
Non-marketable equity securities	$	5,397	$	6,388
Total equity investments	$	5,397	$	6,388

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DERIVATIVES FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Jul. 02, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The fair value of derivative instruments on our Consolidated Condensed Balance Sheets as of July 2, 2022 and October 2, 2021 were as follows:

	As of
	July 2, 2022				October 2, 2021
(in thousands)	Notional Amount		Fair Value Liability Derivatives(1)		Notional Amount		Fair Value Liability Derivatives(1)
Derivatives designated as hedging instruments:
Foreign exchange forward contracts (2)	$	57,756	$	(991)	$	57,682	$	(616)
Total derivatives	$	57,756	$	(991)	$	57,682	$	(616)

(1)The fair value of derivative liabilities is measured using level 2 fair value inputs and is included in accrued expenses and other current liabilities on our Consolidated Condensed Balance Sheets.

(2)Hedged amounts expected to be recognized to income within the next twelve months.

Derivative Instruments, Gain (Loss)

The effects of derivative instruments designated as cash flow hedges in our Consolidated Condensed Statements of Comprehensive Income for the three and nine months ended July 2, 2022 and July 3, 2021 were as follows:

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Foreign exchange forward contract in cash flow hedging relationships:
Net (loss)/gain recognized in OCI, net of tax (1)	$	(1,233)	$	(133)	$	(1,168)	$	301
Net (loss)/gain reclassified from accumulated OCI into income, net of tax (2)	$	(170)	$	317	$	(793)	$	1,295

(1)Net change in the fair value of the effective portion classified in OCI.

(2)Effective portion classified as selling, general and administrative expense.

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LEASES (Tables)

9 Months Ended

Jul. 02, 2022

Leases [Abstract]

Lease expense and components of lease expense

The following table shows the components of lease expense:

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Operating lease expense (1)	$	2,173	$	1,894	$	6,217	$	5,693

(1)Operating lease expense includes short-term lease expense, which is immaterial for the three and nine months ended July 2, 2022 and July 3, 2021.

The following table shows the cash flows arising from lease transactions. Cash payments related to short-term leases are not included in the measurement of operating lease liabilities, and, as such, are excluded from the amounts below:

	Nine months ended
(in thousands)	July 2, 2022		July 3, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	5,715	$	5,364

Weighted-average lease terms and discount rates

The following table shows the weighted-average lease terms and discount rates for operating leases:

	As of
	July 2, 2022		October 2, 2021
Operating leases:
Weighted-average remaining lease term (in years):	8.5		9.6
Weighted-average discount rate:	5.7	%	5.8	%

Future lease payments after ASC 842 adoption

Future lease payments, excluding short-term leases are detailed as follows:

	As of
(in thousands)	July 2, 2022
Remaining fiscal 2022	$	2,095
Fiscal 2023	8,133
Fiscal 2024	7,680
Fiscal 2025	6,935
Fiscal 2026	5,006
Thereafter	24,028
Total minimum lease payments	$	53,877
Less: Interest	$	12,068
Present value of lease obligations	$	41,809
Less: Current portion	$	5,973
Long-term portion of lease obligations	$	35,836

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SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Tables)

9 Months Ended

Jul. 02, 2022

Share-based Payment Arrangement [Abstract]

Company’s matching contributions to the Plan

The following table reflects the Company’s contributions to the 401(k) Plan during the three and nine months ended July 2, 2022 and July 3, 2021:

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Cash	$	419	$	458	$	1,423	$	1,324

Accumulated other comprehensive income reflected on the Consolidated Balance Sheets

The following table reflects accumulated other comprehensive loss reflected on the Consolidated Condensed Balance Sheets as of July 2, 2022 and October 2, 2021: 

	As of
(in thousands)	July 2, 2022		October 2, 2021
(Loss)/gain from foreign currency translation adjustments	$	(17,343)	$	682
Unrecognized actuarial loss on pension plan, net of tax	(2,985)		(3,088)
Unrealized loss on hedging	(991)		(616)
Accumulated other comprehensive loss	$	(21,319)	$	(3,022)

Restricted stock and common stock granted

The following table reflects Time-based RSUs, Relative TSR PSUs, Growth PSUs and common stock granted during the three and nine months ended July 2, 2022 and July 3, 2021:

	Three months ended		Nine months ended
(shares in thousands)	July 2, 2022	July 3, 2021	July 2, 2022	July 3, 2021
Time-based RSUs	1	—	303	484
Relative TSR PSUs	—	—	154	154
Growth PSUs	—	—	77	51
Common stock	4	4	12	19
Equity-based compensation in shares	5	4	546	708

Equity-based compensation expense

The following table reflects total equity-based compensation expense, which includes Time-based RSUs, Relative TSR PSUs, Growth PSUs and common stock, included in the Consolidated Condensed Statements of Operations during the three and nine months ended July 2, 2022 and July 3, 2021: 

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Cost of sales	$	193	$	211	$	727	$	626
Selling, general and administrative	3,233		3,008		10,485		8,111
Research and development	1,039		921		3,261		2,767
Total equity-based compensation expense	$	4,465	$	4,140	$	14,473	$	11,504

The following table reflects equity-based compensation expense, by type of award, for the three and nine months ended July 2, 2022 and July 3, 2021:  

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Time-based RSUs	$	2,845	$	2,571	$	8,763	$	7,772
Relative TSR PSUs	1,073		988		3,060		3,019
Growth PSUs	310		359		1,938		121
Common stock	237		222		712		592
Total equity-based compensation expense	$	4,465	$	4,140	$	14,473	$	11,504

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REVENUE AND CONTRACT LIABILITIES (Tables)

9 Months Ended

Jul. 02, 2022

Revenue from Contract with Customer [Abstract]

Contract Assets and Liabilities

The following table shows the changes in contract asset balances during the three and nine months ended July 2, 2022 and July 3, 2021:

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Contract assets, beginning of period	$	26,721	$	—	$	—	$	—
Additions	18,563		—		45,284		—
Contract assets, end of period	$	45,284	$	—	$	45,284	$	—

The following table shows the changes in contract liability balances during the three and nine months ended July 2, 2022 and July 3, 2021:

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Contract liabilities, beginning of period	$	17,300	$	5,788	$	15,596	$	2,958
Revenue recognized	(29,612)		(23,725)		(104,796)		(43,993)
Additions	17,996		26,486		94,884		49,584
Contract liabilities, end of period	$	5,684	$	8,549	$	5,684	$	8,549

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EARNINGS PER SHARE (Tables)

9 Months Ended

Jul. 02, 2022

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 and nine months ended July 2, 2022 and July 3, 2021: 

	Three months ended
(in thousands, except per share data)	July 2, 2022				July 3, 2021
	Basic		Diluted		Basic		Diluted
NUMERATOR:
Net income	$	119,034	$	119,034	$	113,766	$	113,766
DENOMINATOR:
Weighted average shares outstanding - Basic	58,985		58,985		62,023		62,023
Dilutive effect of Equity Plans			970				1,462
Weighted average shares outstanding - Diluted			59,955				63,485
EPS:
Net income per share - Basic	$	2.02	$	2.02	$	1.83	$	1.83
Effect of dilutive shares			(0.03)				(0.04)
Net income per share - Diluted			$	1.99			$	1.79
Anti-dilutive shares(1)			19				0

	Nine months ended
(in thousands, except per share data)	July 2, 2022				July 3, 2021
	Basic		Diluted		Basic		Diluted
NUMERATOR:
Net income	$	368,641	$	368,641	$	233,450	$	233,450
DENOMINATOR:
Weighted average shares outstanding - Basic	60,951		60,951		62,023		62,023
Dilutive effect of Equity Plans			989				1,341
Weighted average shares outstanding - Diluted			61,940				63,364
EPS:
Net income per share - Basic	$	6.05	$	6.05	$	3.76	$	3.76
Effect of dilutive shares			(0.10)				(0.08)
Net income per share - Diluted			$	5.95			$	3.68
Anti-dilutive shares(1)			1				3

(1) Represents the Relative TSR PSUs and Growth PSUs that are excluded from the calculation of diluted earnings per share for the three and nine months ended July 2, 2022 and July 3, 2021 as the effect would have been anti-dilutive.

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INCOME TAXES (Tables)

9 Months Ended

Jul. 02, 2022

Income Tax Disclosure [Abstract]

Provision for income taxes and the effective tax rate

The following table reflects the provision for income taxes and the effective tax rate for the three and nine months ended July 2, 2022 and July 3, 2021: 

	Three months ended						Nine months ended
(dollar amounts in thousands)	July 2, 2022			July 3, 2021			July 2, 2022			July 3, 2021
Provision for income taxes	$	5,165		$	7,212		$	36,813		$	25,722
Effective tax rate	4.2		%	6.0		%	9.1		%	9.9		%

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SEGMENT INFORMATION (Tables)

9 Months Ended

Jul. 02, 2022

Segment Reporting [Abstract]

Operating information by segment

The following table reflects operating information by segment for the three and nine months ended July 2, 2022 and July 3, 2021: 

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Net revenue:
Capital Equipment	$	321,946	$	370,187	$	1,064,383	$	881,722
APS	50,191		54,131		152,924		150,616
Net revenue	372,137		424,318		1,217,307		1,032,338
Income from operations:
Capital Equipment	102,467		107,016		345,686		218,010
APS	19,610		13,439		56,842		39,601
Income from operations	$	122,077	$	120,455	$	402,528	$	257,611

Schedule of net revenue by Capital Equipment end markets

The following table reflects net revenue by Capital Equipment end markets served for the three and nine months ended July 2, 2022 and July 3, 2021: 

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
General Semiconductor	$	223,034	$	280,563	$	670,251	$	633,234
Automotive & Industrial	51,018		38,488		160,366		103,416
LED	20,203		31,951		128,394		115,071
Memory	27,691		19,185		105,372		30,001
Total Capital Equipment revenue	$	321,946	$	370,187	$	1,064,383	$	881,722

Capital expenditures, depreciation and amortization expense

The following table reflects capital expenditures, depreciation expense and amortization expense for the three and nine months ended July 2, 2022 and July 3, 2021:

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Capital expenditures:
Capital Equipment	$	3,670	$	5,526	$	8,103	$	11,120
APS	1,283		2,430		3,110		5,643
	$	4,953	$	7,956	$	11,213	$	16,763
Depreciation expense:
Capital Equipment	$	2,274	$	1,668	$	6,813	$	4,850
APS	1,827		1,797		5,417		5,049
	$	4,101	$	3,465	$	12,230	$	9,899
Amortization expense:
Capital Equipment	$	887	$	845	$	2,820	$	2,751
APS	222		495		723		1,902
	$	1,109	$	1,340	$	3,543	$	4,653

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COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Tables)

9 Months Ended

Jul. 02, 2022

Commitments and Contingencies Disclosure [Abstract]

Reserve for product warranty activity

The following table reflects the reserve for warranty activity for the three and nine months ended July 2, 2022 and July 3, 2021: 

	Three months ended				Nine months ended
(in thousands)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Reserve for warranty, beginning of period	$	15,518	$	15,574	$	16,961	$	9,576
Provision for warranty	2,842		4,325		9,001		15,654
Utilization of reserve	(4,118)		(3,004)		(11,720)		(8,335)
Reserve for warranty, end of period	$	14,242	$	16,895	$	14,242	$	16,895

Obligations not reflected on the Consolidated Balance Sheet

The following table reflects obligations not reflected on the Consolidated Condensed Balance Sheet as of July 2, 2022:

			Payments due by fiscal year
(in thousands)	Total		2022		2023		2024		2025		2026		thereafter
Inventory purchase obligation (1)	$	347,900	$	113,400	$	234,500	$	—	$	—	$	—	$	—

(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.

Schedule of Revenue by Major Customers by Reporting Segments

The following table reflects significant customer concentrations as a percentage of net revenue for the nine months ended July 2, 2022 and July 3, 2021:

	Nine months ended
	July 2, 2022	July 3, 2021
ASE Technology Holding Co	*	19.4	%

* Represents less than 10% of total net revenue

Significant customer concentrations as a percentage of total accounts receivable

The following table reflects significant customer concentrations as a percentage of total accounts receivable as of July 2, 2022 and July 3, 2021:

	As of
	July 2, 2022		July 3, 2021
Tianshui Huatian Technology Co., Ltd.	20.6	%	12.9	%
Haoseng Industrial Co., Ltd. (1)	*		16.1	%

(1)Distributor of the Company's products.

* Represents less than 10% of total accounts receivable

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BALANCE SHEET COMPONENTS (Components of significant balance sheet accounts) (Details) - USD ($) $ in Thousands	Jul. 02, 2022	Oct. 02, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Short-term investments	$ 300,000	$ 377,000
Inventories, net:
Raw materials and supplies	126,593	94,493
Work in process	69,426	55,866
Finished goods	40,363	40,006
Inventory, gross	236,382	190,365
Inventory reserves	(21,101)	(23,042)
Inventories, net	215,281	167,323
Property, plant and equipment, net:
Land	2,182	2,182
Buildings and building improvements	23,116	23,314
Leasehold improvements	32,120	30,054
Data processing equipment and software	40,836	40,945
Machinery, equipment, furniture and fixtures	90,465	87,994
Construction in progress	10,728	9,562
Property, plant and equipment, gross	199,447	194,051
Accumulated depreciation	(132,937)	(126,069)
Property, plant and equipment, net	66,510	67,982
Accrued expenses and other current liabilities:
Accrued customer obligations	67,063	72,478
Wages and benefits	47,833	66,531
Dividends payable	9,970	8,673
Commissions and professional fees	5,459	6,190
Severance	0	31
Other	8,109	7,667
Accrued expenses and other current liabilities	$ 138,434	$ 161,570

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GOODWILL AND INTANGIBLE ASSETS (Goodwill by Reportable Segment) (Details) $ in Thousands	9 Months Ended
	Jul. 02, 2022 USD ($)
Goodwill [Roll Forward]
Balance at October 2, 2021	$ 72,949
Other	(3,162)
Balance at July 2, 2022	69,787
Capital Equipment
Goodwill [Roll Forward]
Balance at October 2, 2021	46,561
Other	(2,849)
Balance at July 2, 2022	43,712
APS
Goodwill [Roll Forward]
Balance at October 2, 2021	26,388
Other	(313)
Balance at July 2, 2022	$ 26,075

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GOODWILL AND INTANGIBLE ASSETS (Net intangible assets) (Details) - USD ($) $ in Thousands	9 Months Ended
	Jul. 02, 2022	Oct. 02, 2021
Schedule Of Intangible Assets [Line Items]
Net intangible assets	$ 35,291	$ 42,752
In-process research and development
Schedule Of Intangible Assets [Line Items]
Gross intangible assets	0	8,795
Accumulated amortization	0	0
Net intangible assets	0	8,795
Intangible assets increase (decrease)	(7,900)
Developed technology
Schedule Of Intangible Assets [Line Items]
Gross intangible assets	92,573	90,427
Accumulated amortization	(58,932)	(58,494)
Net intangible assets	33,641	31,933
Intangible assets increase (decrease)	$ 7,900
Developed technology | Minimum
Schedule Of Intangible Assets [Line Items]
Estimated useful life	6 years
Developed technology | Maximum
Schedule Of Intangible Assets [Line Items]
Estimated useful life	15 years
Customer relationships
Schedule Of Intangible Assets [Line Items]
Gross intangible assets	$ 34,421	36,114
Accumulated amortization	(34,421)	(36,114)
Net intangible assets	$ 0	0
Customer relationships | Minimum
Schedule Of Intangible Assets [Line Items]
Estimated useful life	5 years
Customer relationships | Maximum
Schedule Of Intangible Assets [Line Items]
Estimated useful life	6 years
Trade and brand name
Schedule Of Intangible Assets [Line Items]
Gross intangible assets	$ 7,095	7,374
Accumulated amortization	(7,095)	(7,275)
Net intangible assets	$ 0	99
Trade and brand name | Minimum
Schedule Of Intangible Assets [Line Items]
Estimated useful life	7 years
Trade and brand name | Maximum
Schedule Of Intangible Assets [Line Items]
Estimated useful life	8 years
Other intangible assets
Schedule Of Intangible Assets [Line Items]
Gross intangible assets	$ 4,700	4,700
Accumulated amortization	(3,050)	(2,775)
Net intangible assets	$ 1,650	$ 1,925
Other intangible assets | Minimum
Schedule Of Intangible Assets [Line Items]
Estimated useful life	1 year 10 months 24 days
Other intangible assets | Maximum
Schedule Of Intangible Assets [Line Items]
Estimated useful life	6 years

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GOODWILL AND INTANGIBLE ASSETS (Estimated annual amortization expense) (Details) $ in Thousands	Jul. 02, 2022 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Remaining fiscal 2022	$ 1,416
Fiscal 2023	5,665
Fiscal 2024	5,665
Fiscal 2025	5,665
Fiscal 2026	5,665
Thereafter	11,215
Total amortization expense	$ 35,291

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CASH, CASH EQUIVALENTS, RESTRICTED CASH AND SHORT-TERM INVESTMENTS (Details) - USD ($) $ in Thousands	Jul. 02, 2022	Oct. 02, 2021
Cash, Cash Equivalents, Restricted Cash and Short-Term Investments [Line Items]
Cash, Amortized Cost	$ 164,458	$ 269,201
Cash, Unrealized Gains	0	0
Cash, Unrealized Losses	0	0
Cash, Estimated Fair Value	164,458	269,201
Cash and Cash Equivalents, Amortized Cost	445,805	362,806
Cash and Cash Equivalents, Unrealized Gain	0	0
Cash and Cash Equivalents, Unrealized Loss	(24)	(18)
Cash and Cash Equivalents, Estimated Fair Value	445,781	362,788
Short-term investments, Amortized Cost	300,000	377,000
Short-term Investments, Unrealized Gain	0	0
Short-term Investments, Unrealized Loss	0	0
Short-term Investments, Estimated Fair Value	300,000	377,000
Cash, Cash Equivalents, Restricted Cash, and Short-Term Investments, Amortized Cost	745,805	739,806
Cash, Cash Equivalents, Restricted Cash, and Short-Term Investments, Unrealized Gain	0	0
Cash, Cash Equivalents, Restricted Cash, and Short-Term Investments, Unrealized Loss	(24)	(18)
Cash, Cash Equivalents, Restricted Cash, and Short-Term Investments, Estimated Fair Value	745,781	739,788
Money market funds
Cash, Cash Equivalents, Restricted Cash and Short-Term Investments [Line Items]
Cash Equivalents, Amortized Cost	161,338	93,598
Cash Equivalents, Unrealized Gain	0	0
Cash Equivalents, Unrealized Loss	(24)	(18)
Cash Equivalents, Estimated Fair Value	161,314	93,580
Time deposits
Cash, Cash Equivalents, Restricted Cash and Short-Term Investments [Line Items]
Cash Equivalents, Amortized Cost	120,009	7
Cash Equivalents, Unrealized Gain	0	0
Cash Equivalents, Unrealized Loss	0	0
Cash Equivalents, Estimated Fair Value	120,009	7
Short-term investments, Amortized Cost	300,000	377,000
Short-term Investments, Unrealized Gain	0	0
Short-term Investments, Unrealized Loss	0	0
Short-term Investments, Estimated Fair Value	$ 300,000	$ 377,000

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EQUITY INVESTMENTS (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Jul. 02, 2022	Jul. 02, 2022	Jul. 03, 2021	Oct. 02, 2021
Equity Method Investments [Abstract]
Non-marketable equity securities	$ 5,397	$ 5,397		$ 6,388
Total equity investments	5,397	5,397		$ 6,388
Impairment of equity investment	$ 1,300	$ 1,346	$ 0

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DERIVATIVES FINANCIAL INSTRUMENTS (Fair value of derivative instruments) (Details) - USD ($) $ in Thousands	9 Months Ended
	Jul. 02, 2022	Oct. 02, 2021
Derivatives, Fair Value [Line Items]
Gain (loss) reclassification, estimate of time to transfer	12 months
Total derivatives, notional amount	$ 57,756	$ 57,682
Fair value liability, derivates	$ (991)	(616)
Designated as Hedging Instrument | Foreign exchange forward contracts
Derivatives, Fair Value [Line Items]
Foreign exchange forward contract, term of contract	12 months
Total derivatives, notional amount	$ 57,756	57,682
Accrued Expenses and Other Current Liabilities | Designated as Hedging Instrument | Foreign exchange forward contracts
Derivatives, Fair Value [Line Items]
Fair value liability, derivates	$ (991)	$ (616)

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DERIVATIVES FINANCIAL INSTRUMENTS (Gain (loss) of derivative instruments) (Details) - Unrealized loss on hedging - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized (loss)/gain on derivative instruments, net of tax	$ (1,233)	$ (133)	$ (1,168)	$ 301
Reclassification adjustment for loss/(gain) on derivative instruments recognized, net of tax	$ (170)	$ 317	$ (793)	$ 1,295

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LEASES - Narrative (Details)	9 Months Ended
	Jul. 02, 2022 extend_options
Lessee, Lease, Description [Line Items]
Options to extend	0
Minimum
Lessee, Lease, Description [Line Items]
Operating lease, term of contract	1 year
Maximum
Lessee, Lease, Description [Line Items]
Operating lease, term of contract	20 years

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LEASES - Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Lease, Cost [Abstract]
Operating lease expense	$ 2,173	$ 1,894	$ 6,217	$ 5,693
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases			$ 5,715	$ 5,364

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LEASES - Lease Terms and Discount Rates (Details)	Jul. 02, 2022	Oct. 02, 2021
Leases [Abstract]
Weighted-average remaining lease term (in years):	8 years 6 months	9 years 7 months 6 days
Weighted-average discount rate:	5.70%	5.80%

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LEASES - Future Lease Payments After Adoption ASC 842 (Details) - USD ($) $ in Thousands	Jul. 02, 2022	Oct. 02, 2021
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
Remaining fiscal 2022	$ 2,095
Fiscal 2023	8,133
Fiscal 2024	7,680
Fiscal 2025	6,935
Fiscal 2026	5,006
Thereafter	24,028
Total minimum lease payments	53,877
Less: Interest	12,068
Present value of lease obligations	41,809
Less: Current portion	5,973	$ 4,903
Long-term portion of lease obligations	$ 35,836	$ 38,084

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DEBT AND OTHER OBLIGATIONS DEBT AND OTHER OBLIGATIONS (Details) - USD ($)	3 Months Ended
	Jul. 02, 2022	Feb. 15, 2019	Nov. 22, 2013
Citibank
Capital Leased Assets [Line Items]
Capacity under credit facility			$ 5,000,000
Outstanding amounts under credit facility	$ 2,900,000
Facility agreements | MUFG Bank, Ltd., Singapore Branch
Capital Leased Assets [Line Items]
Capacity under credit facility		$ 150,000,000
Outstanding amounts under credit facility	$ 0
London Interbank Offered Rate (LIBOR) | Facility agreements | MUFG Bank, Ltd., Singapore Branch
Capital Leased Assets [Line Items]
Debt instrument, basis spread on variable rate	1.50%

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SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands					1 Months Ended	3 Months Ended						9 Months Ended
	Apr. 22, 2022	Mar. 10, 2022	Mar. 09, 2022	Oct. 18, 2021	Apr. 22, 2022	Jul. 02, 2022	Apr. 02, 2022	Jan. 01, 2022	Jul. 03, 2021	Apr. 03, 2021	Jan. 02, 2021	Jul. 02, 2022	Jul. 03, 2021	Mar. 03, 2022	Jul. 03, 2020	Jan. 31, 2019	Jul. 10, 2018	Aug. 15, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock repurchase program, authorized amount														$ 800,000		$ 300,000	$ 200,000	$ 100,000
Authorized amount, additional amount														$ 400,000	$ 400,000
Value of shares acquired						$ 31,098	$ 176,153	$ 15,380	$ 4,087	$ 1,110	$ 1,206
Cash dividends declared (in dollars per share)				$ 0.17
Common stock cash dividends paid						$ (10,100)						$ (29,393)	$ (24,776)
Relative TSR calculation period												90 days
Relative TSR Performance Share Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total shareholder return award performance measurement period												3 years
Revenue Growth Performance Share Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total shareholder return award performance measurement period												3 years
Time-based Restricted Share Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total shareholder return award performance measurement period												3 years
Omnibus Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for grant (in shares)						3,300,000						3,300,000
the Program
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares repurchased in period (shares)						653,000						1,423,000
Value of shares acquired						$ 31,100						$ 72,600
ASR
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock repurchase program, authorized amount						30,000						30,000
Shares repurchased in period (shares)	344,500	2,449,900			2,794,400
Value of shares acquired		$ 120,000	$ 150,000
Price paid per share					$ 53.68
Remaining repurchase authorized amount						$ 309,300						$ 309,300
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Company contributions												4.00%
Minimum | Relative TSR Performance Share Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage						0.00%						0.00%
Minimum | Revenue Growth Performance Share Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage						0.00%						0.00%
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Company contributions												6.00%
Maximum | Relative TSR Performance Share Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage						200.00%						200.00%
Maximum | Revenue Growth Performance Share Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage						200.00%						200.00%

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SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Matching contributions to the Plan) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
401(k) Cash Contributions
Cash	$ 419	$ 458	$ 1,423	$ 1,324

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SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Accumulated other comprehensive income) (Details) - USD ($) $ in Thousands	Jul. 02, 2022	Oct. 02, 2021
(Loss)/gain from foreign currency translation adjustments
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity	$ (17,343)	$ 682
Unrecognized actuarial loss on pension plan, net of tax
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity	(2,985)	(3,088)
Unrealized loss on hedging
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity	(991)	(616)
Accumulated Other Comprehensive (Loss)/Income
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity	$ (21,319)	$ (3,022)

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SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Restricted stock and common stock granted) (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation in shares	5	4	546	708
Time-based RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation in shares	1	0	303	484
Relative TSR PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation in shares	0	0	154	154
Growth PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation in shares	0	0	77	51
Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation in shares	4	4	12	19

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SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Total equity-based compensation expense) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total equity-based compensation expense	$ 4,465	$ 4,140	$ 14,473	$ 11,504
Time-based RSUs
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total equity-based compensation expense	2,845	2,571	8,763	7,772
Relative TSR PSUs
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total equity-based compensation expense	1,073	988	3,060	3,019
Growth PSUs
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total equity-based compensation expense	310	359	1,938	121
Common Stock
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total equity-based compensation expense	237	222	712	592
Cost of sales
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total equity-based compensation expense	193	211	727	626
Selling, general and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total equity-based compensation expense	3,233	3,008	10,485	8,111
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total equity-based compensation expense	$ 1,039	$ 921	$ 3,261	$ 2,767

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REVENUE AND CONTRACT LIABILITIES - Contract Assets (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Contract with Customer, Asset, Allowance for Credit Loss [Roll Forward]
Contract assets, beginning of period	$ 26,721	$ 0	$ 0	$ 0
Additions	18,563	0	45,284	0
Contract assets, end of period	$ 45,284	$ 0	$ 45,284	$ 0

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REVENUE AND CONTRACT LIABILITIES - Contract Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Change in Contract with Customer, Liability [Roll Forward]
Contract assets, beginning of period	$ 17,300	$ 5,788	$ 15,596	$ 2,958
Revenue recognized	(29,612)	(23,725)	(104,796)	(43,993)
Additions	17,996	26,486	94,884	49,584
Contract assets, end of period	$ 5,684	$ 8,549	$ 5,684	$ 8,549

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EARNINGS PER SHARE (Reconciliation of the shares used in the basic and diluted net income per share computation) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Jul. 02, 2022	Apr. 02, 2022	Jan. 01, 2022	Jul. 03, 2021	Apr. 03, 2021	Jan. 02, 2021	Jul. 02, 2022	Jul. 03, 2021
NUMERATOR:
Net income	$ 119,034	$ 116,001	$ 133,606	$ 113,766	$ 71,320	$ 48,363	$ 368,641	$ 233,450
DENOMINATOR:
Weighted average shares outstanding - Basic (in shares)	58,985,000			62,023,000			60,951,000	62,023,000
Dilutive effect of Equity Plans (in shares)	970,000			1,462,000			989,000	1,341,000
Weighted average shares outstanding - Diluted (in shares)	59,955,000			63,485,000			61,940,000	63,364,000
EPS:
Net income per share - Basic (in dollars per share)	$ 2.02			$ 1.83			$ 6.05	$ 3.76
Effect of dilutive shares (in dollars per share)	0.03			0.04			0.10	0.08
Net income per share - Diluted (in dollars per share)	$ 1.99			$ 1.79			$ 5.95	$ 3.68
Anti-dilutive shares (in shares)	19,000			0			1,000	3,000

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INCOME TAXES (Provision for income taxes and the effective tax rate) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 5,165	$ 7,212	$ 36,813	$ 25,722
Effective tax rate	4.20%	6.00%	9.10%	9.90%

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INCOME TAXES (Narrative) (Details) - USD ($) $ in Millions	9 Months Ended
	Jul. 02, 2022	Jul. 03, 2021
Income Tax Disclosure [Abstract]
Income tax benefit from release of valuation allowance	$ 4.9	$ 7.2

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SEGMENT INFORMATION (Narrative) (Details)	9 Months Ended
	Jul. 02, 2022 segment
Segment Reporting [Abstract]
Number of reportable segments	2

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SEGMENT INFORMATION (Operating information by segment) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Net revenue:
Net revenue	$ 372,137	$ 424,318	$ 1,217,307	$ 1,032,338
Income from operations:
Income from operations	122,077	120,455	402,528	257,611
Capital Equipment
Net revenue:
Net revenue	321,946	370,187	1,064,383	881,722
Income from operations:
Income from operations	102,467	107,016	345,686	218,010
APS
Net revenue:
Net revenue	50,191	54,131	152,924	150,616
Income from operations:
Income from operations	$ 19,610	$ 13,439	$ 56,842	$ 39,601

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SEGMENT INFORMATION (Schedule of net revenue by Capital Equipment end markets (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	$ 372,137	$ 424,318	$ 1,217,307	$ 1,032,338
Capital Equipment
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	321,946	370,187	1,064,383	881,722
Capital Equipment | General Semiconductor
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	223,034	280,563	670,251	633,234
Capital Equipment | Automotive & Industrial
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	51,018	38,488	160,366	103,416
Capital Equipment | LED
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	20,203	31,951	128,394	115,071
Capital Equipment | Memory
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	$ 27,691	$ 19,185	$ 105,372	$ 30,001

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SEGMENT INFORMATION (Capital expenditures, depreciation and amortization expense by segment) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Segment Reporting, Other Significant Reconciling Item [Line Items]
Capital expenditures:	$ 4,953	$ 7,956	$ 11,213	$ 16,763
Depreciation and amortization expense:
Depreciation expense:	4,101	3,465	12,230	9,899
Amortization expense:	1,109	1,340	3,543	4,653
Capital Equipment
Segment Reporting, Other Significant Reconciling Item [Line Items]
Capital expenditures:	3,670	5,526	8,103	11,120
Depreciation and amortization expense:
Depreciation expense:	2,274	1,668	6,813	4,850
Amortization expense:	887	845	2,820	2,751
APS
Segment Reporting, Other Significant Reconciling Item [Line Items]
Capital expenditures:	1,283	2,430	3,110	5,643
Depreciation and amortization expense:
Depreciation expense:	1,827	1,797	5,417	5,049
Amortization expense:	$ 222	$ 495	$ 723	$ 1,902

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COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Reserve for product warranty activity) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward]
Reserve for warranty, beginning of period	$ 15,518	$ 15,574	$ 16,961	$ 9,576
Provision for warranty	2,842	4,325	9,001	15,654
Utilization of reserve	(4,118)	(3,004)	(11,720)	(8,335)
Reserve for warranty, end of period	$ 14,242	$ 16,895	$ 14,242	$ 16,895

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COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Obligations not reflected on the Consolidated Balance Sheet) (Details) $ in Thousands	Jul. 02, 2022 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Total	$ 347,900
2022	113,400
2023	234,500
2024	0
2025	0
2026	0
thereafter	$ 0

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COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Significant customer concentrations as a percentage of net revenue) (Details)	9 Months Ended
	Jul. 03, 2021
ASE Technology Holding Co | Revenue Benchmark | Customer Concentration Risk
Concentration Risk [Line Items]
Customer concentrations risk percentage	19.40%

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COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Significant customer concentrations as a percentage of total accounts receivable) (Details) - Accounts Receivable - Customer Concentration Risk	9 Months Ended
	Jul. 02, 2022	Jul. 03, 2021
Tianshui Huatian Technology Co., Ltd.
Concentration Risk [Line Items]
Customer concentrations risk percentage	20.60%	12.90%
Haoseng Industrial Co., Ltd. (1)
Concentration Risk [Line Items]
Customer concentrations risk percentage		16.10%

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COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS - Narrative (Details) $ in Thousands	9 Months Ended
	Jul. 02, 2022 USD ($)
Other Commitments [Line Items]
Period of warranty for manufacturing defects	1 year
Unfunded Capital Commitment
Other Commitments [Line Items]
Other Commitment	$ 9,600