10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended December 30, 2017

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 Number: 0-12853

ELECTRO SCIENTIFIC INDUSTRIES, INC.

Oregon	93-0370304
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
13900 N.W. Science Park Drive, Portland, Oregon	97229
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 503-641-4141

Registrant’s web address: www.esi.com

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  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting 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	ý	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  ý

The number of shares outstanding of the Registrant’s Common Stock as of February 2, 2018 was 33,552,089 shares.

ELECTRO SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES

2018 FORM 10-Q QUARTERLY REPORT

TABLE OF CONTENTS

Part I	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets - at December 30, 2017 and April 1, 2017	3
	Condensed Consolidated Statements of Operations - for the fiscal quarter and three fiscal quarters ended December 30, 2017 and December 31, 2016	4
	Condensed Consolidated Statements of Comprehensive Income (Loss) - for the fiscal quarter and three fiscal quarters ended December 30, 2017 and December 31, 2016	5
	Condensed Consolidated Statements of Cash Flows - for the three fiscal quarters ended December 30, 2017 and December 31, 2016	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	29
Item 4.	Controls and Procedures	29
Part II	OTHER INFORMATION
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	40
Item 6.	Exhibits and Financial Statement Schedules	40
SIGNATURES		41

ELECTRO SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)	Dec 30, 2017			Apr 1, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	62,251		$	56,642
Short-term investments	36,824			5,743
Trade receivables, net of allowances of $658 and $603	75,674			40,494
Inventories, net	74,502			58,942
Shipped systems pending acceptance	5,780			5,713
Other current assets	5,116			6,180
Total current assets	260,147			173,714
Non-current assets:
Property, plant and equipment (PP&E), net of accumulated depreciation of $81,728 and $112,075	19,732			21,619
Goodwill	2,626			3,027
Acquired intangible assets, net of accumulated amortization of $23,035 and $21,994	5,525			6,564
Income taxes receivable	935			—
Other assets	17,339			19,821
Total assets	$	306,304		$	224,745
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	38,577		$	21,213
Accrued liabilities	40,391			22,186
Deferred revenue	11,982			14,712
Total current liabilities	90,950			58,111
Non-current liabilities:
Long-term debt	12,875			13,489
Income taxes payable	1,587			1,036
Other liabilities	10,085			7,578
Total liabilities	115,497			80,214
Commitments and contingencies (See Note 12: Commitments & Contingencies)
Shareholders’ equity:
Preferred stock, without par value; 1,000 shares authorized; no shares issued	—			—
Common stock, without par value; 100,000 shares authorized; 34,309 and 33,260 issued and outstanding	211,330			207,152
Accumulated deficit	(20,273		)	(61,407		)
Accumulated other comprehensive loss	(250		)	(1,214		)
Total shareholders’ equity	190,807			144,531
Total liabilities and shareholders’ equity	$	306,304		$	224,745

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

3

ELECTRO SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Fiscal quarter ended					Three fiscal quarters ended
(In thousands, except per share amounts)	Dec 30, 2017		Dec 31, 2016			Dec 30, 2017		Dec 31, 2016
Net sales:
Systems	$	99,418	$	25,427		$	221,827	$	85,069
Services	11,422		8,352			32,664		26,036
Total net sales	110,840		33,779			254,491		111,105
Cost of sales:
Systems	52,502		17,283			132,107		53,851
Services	5,182		5,048			16,276		14,018
Total cost of sales	57,684		22,331			148,383		67,869
Gross profit	53,156		11,448			106,108		43,236
Operating expenses:
Selling, general and administrative	11,040		13,280			35,496		38,917
Research, development and engineering	8,165		7,868			25,373		23,258
Restructuring costs	706		321			4,079		321
Acquisition and integration costs	—		31			—		366
Total operating expenses	19,911		21,500			64,948		62,862
Operating income (loss)	33,245		(10,052		)	41,160		(19,626		)
Non-operating income:
Interest and other income, net	789		34			376		162
Total non-operating income	789		34			376		162
Income (loss) before income taxes	34,034		(10,018		)	41,536		(19,464		)
Provision for (benefit from) income taxes	61		(325		)	401		22
Net income (loss)	$	33,973	$	(9,693	)	$	41,135	$	(19,486	)
Net income (loss) per share - basic	$	0.99	$	(0.29	)	$	1.22	$	(0.60	)
Net income (loss) per share - diluted	$	0.94	$	(0.29	)	$	1.16	$	(0.60	)
Weighted average number of shares - basic	34,224		32,919			33,839		32,379
Weighted average number of shares - diluted	36,010		32,919			35,562		32,379

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

4

ELECTRO SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	Fiscal quarter ended						Three fiscal quarters ended
(In thousands)	Dec 30, 2017			Dec 31, 2016			Dec 30, 2017			Dec 31, 2016
Net income (loss)	$	33,973		$	(9,693	)	$	41,135		$	(19,486	)
Other comprehensive income (loss):
Foreign currency translation adjustment, net of taxes of $8, $0, $8 and $0	581			(745		)	969			(884		)
Other comprehensive income related to benefit plan obligation, net of taxes of $(2), $(5), $(7) and $(7)	4			5			13			14
Net unrealized loss on available-for-sale securities, net of taxes of $0, $0, $0 and $0	(17		)	(2		)	(18		)	(6		)
Other comprehensive income (loss):	568			(742		)	964			(876		)
Comprehensive income (loss)	$	34,541		$	(10,435	)	$	42,099		$	(20,362	)

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

5

ELECTRO SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three fiscal quarters ended
(In thousands)	Dec 30, 2017			Dec 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	41,135		$	(19,486	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Non-cash restructuring charges	13,858			—
Depreciation and amortization	5,508			5,424
Share-based compensation expense	3,510			5,118
Amortization of acquired intangible assets	1,015			832
Provision for (benefit from) doubtful accounts	603			(341		)
Gain on sale of laser ablation assets	(917		)	—
Loss on disposal of property and equipment, net	101			52
Impairment of inventory	—			946
Decrease in deferred income taxes	2			37
Changes in operating accounts, net of acquisitions:
Increase (decrease) in accounts payable and accrued liabilities	36,963			(5,189		)
(Increase) decrease in trade receivables, net	(35,271		)	15,258
Increase in inventories	(24,402		)	(3,259		)
Increase in shipped systems pending acceptance	(67		)	(2,802		)
(Decrease) increase in deferred revenue	(2,730		)	4,449
Decrease (increase) in other current assets	1,489			(738		)
Net cash provided by operating activities	40,797			301
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments	(48,668		)	(331,343		)
Proceeds from sales and maturities of investments	17,034			339,691
Purchase of property, plant and equipment	(3,116		)	(3,408		)
Proceeds from sale of property, plant and equipment	37			7
Proceeds from sale of laser ablation assets	2,999			—
Cash paid for business acquisitions, net of cash acquired	—			(2,010		)
Increase in other assets	(4,646		)	(120		)
Net cash (used in) provided by investing activities	(36,360		)	2,817
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of debt	(321		)	—
Payment of withholding taxes on stock-based compensation	(1,696		)	(801		)
Proceeds from issuance of common stock	2,624			1,043
Net cash provided by financing activities	607			242
Effect of exchange rate changes on cash	562			(882		)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	5,606			2,478
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD	57,732			42,413
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	$	63,338		$	44,891
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest	$	(496	)	$	(30	)
Cash paid for income taxes	(979		)	(504		)
Income tax refunds received	67			45
Net (decrease) increase in PP&E and other assets related to transfers from inventory	(824		)	5,414
Non-cash additions to PP&E	483			205

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

6

ELECTRO SCIENTIFIC INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1	Basis of Presentation	7
Note 2	Recent Accounting Pronouncements	8
Note 3	Fair Value Measurements	10
Note 4	Trade Accounts Receivable	12
Note 5	Inventories	12
Note 6	Other Assets	12
Note 7	Accrued Liabilities	13
Note 8	Product Warranty	13
Note 9	Deferred Revenue	13
Note 10	Long-term Debt	14
Note 11	Revolving Credit Facility	14
Note 12	Commitments & Contingencies	14
Note 13	Shareholders’ Equity	15
Note 14	Accumulated Other Comprehensive Income (Loss)	15
Note 15	Share-Based Compensation	15
Note 16	Product and Geographic Information	16
Note 17	Restructuring and Cost Management Plans	16
Note 18	Income Taxes	18
Note 19	Earnings (Loss) Per Share	19
Note 20	Business Acquisitions	19

1. Basis of Presentation

These unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with United States generally accepted accounting principles (U.S. GAAP) have been condensed or omitted in these interim statements. Accordingly, these condensed consolidated financial statements should be read in conjunction with the financial statements and notes included in the Annual Report of Electro Scientific Industries, Inc. (the Company) on Form 10-K for its fiscal year ended April 1, 2017. These interim statements include all adjustments (consisting of only normal recurring adjustments and accruals) necessary for a fair presentation of results for the interim periods presented. The results for interim periods are not necessarily indicative of the results of operations for the entire year.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of commitments and contingencies at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results may differ from those estimates.

Management believes that the estimates used are reasonable. Significant estimates made by management include: revenue recognition; valuation of inventory; accrued restructuring costs; share-based compensation; income taxes, including the valuation of deferred tax assets; valuation of long-lived assets, including intangibles; valuation of goodwill and acquisition accounting.

There have been no significant changes to the Company's significant accounting policies from those presented in Note 2: Summary of Significant Accounting Policies to the consolidated financial statements included in the Company's Annual Report on Form 10-K for its fiscal year ended April 1, 2017. All references to years or quarters relate to fiscal years or fiscal quarters unless otherwise noted. The fiscal quarters ended December 30, 2017 and December 31, 2016 each consisted of 13-week periods. Similarly, the three quarters endedDecember 30, 2017 and the three quarters endedDecember 31, 2016 each consisted of 39-week periods.

7

Restricted Cash

Cash and cash equivalents that are restricted as to withdrawal or use under the terms of certain long-term contractual agreements are recorded in Other non-current assets on our balance sheet. The following table provides a summary of the Company's cash, cash equivalents, and restricted cash position.

(In thousands)	Dec 30, 2017		Apr 1, 2017		Dec 31, 2016
Cash and cash equivalents	$	62,251	$	56,642	$	44,891
Restricted cash included in other long-term assets	1,087		1,090		—
Total cash, cash equivalents and restricted cash	$	63,338	$	57,732	$	44,891

2. Recent Accounting Pronouncements

Adopted accounting pronouncements:

In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-09, “Compensation – Stock Compensation – Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 simplifies the accounting for several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows, and the accounting for forfeitures. ASU 2016-09 was effective for the Company as of April 2, 2017, the beginning of fiscal 2018. Adopting ASU 2016-09 increased diluted weighted average shares outstanding by approximately 40 thousand shares in the first quarter of 2018 due to the change in recognition of excess tax benefits in the calculation. The ASU is expected to increase the volatility of the Company's diluted shares outstanding on a go-forward basis.

In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory.” ASU 2015-11 simplifies the measurement of inventory by requiring companies to measure inventory at the lower of cost and net realizable value rather than measuring at the lower of cost of market where the market value was determined based off of three different measures. ASU 2015-11 was effective for the Company as of April 2, 2017, the beginning of fiscal 2018. Adopting ASU 2015-11 has not had a material effect on the Company's inventory valuation.

Recently issued accounting pronouncements not yet adopted

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, in order to (i) improve disclosures related to an entity's risk management activities through better transparency and understandability and (ii) simplify and reduce the complexity of hedge accounting by preparers. ASU 2017-12 is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods, which would be the Company's fiscal year ending March 28, 2020. Early adoption is permitted, including adoption in any interim period, for public business entities for reporting periods for which financial statements have not yet been issued. While the Company does not expect the adoption of ASU 2017-12 to have a material effect on its business, the Company is still evaluating any potential impact that adoption of ASU 2017-12 may have on its financial position, results of operations or cash flows.

In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, which amends the scope of modification accounting surrounding share-based payment arrangements as issued in ASU 2016-09 by providing guidance on the various types of changes which would trigger modification accounting for share-based payment awards, specifically an entity would not apply modification accounting under ASC 718 if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. ASU 2017-09 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods, which would be the Company's fiscal year ending March 30, 2019. Early adoption is permitted, including adoption in any interim period, for public business entities for reporting periods for which financial statements have not yet been issued. The adoption of ASU 2017-09 will not have a material effect on the Company's financial position, results of operations or cash flows.

In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires companies to disaggregate the current-service-cost component from other components of net benefit cost and provides specific guidance for presentation in the income statement. ASU 2017-07 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods, which would be the Company's fiscal year ending March 30, 2019. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The adoption of ASU 2017-07 will not have a material effect on the Company's financial position, results of operations or cash flows.

8

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09), to supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, which deferred the effective date for implementation of ASU 2014-09 by one year, making the new guidance effective for annual reporting periods beginning after December 15, 2017, with early adoption permitted no earlier than the original effective date. The FASB has continued to issue ASU topics to further clarify ASU 2014-09. These have included ASU 2016-08, ASU 2016-10, ASU 2016-12, and ASU 2016-20. The effective date and transition requirements of these ASU topics are the same as the effective date and transition requirements of ASU 2015-14. The new standards are effective for the Company's fiscal year ending March 30, 2019, beginning with the first quarter of that fiscal year.

The new standard permits adoption by using either (i) a full retrospective approach for all periods presented in the period of adoption or (ii) a modified retrospective approach with the cumulative effect of initially applying the new standard recognized at the date of initial application and providing certain additional disclosures. The Company plans to elect the modified retrospective approach as its transition method. The Company developed an implementation plan and assigned cross-functional internal resources to perform a comprehensive assessment of the new standard and its impact on the financial statements of the Company. This assessment is ongoing and includes identification, consideration, and quantification of the impact of the new standard on the Company's financial statements, accounting policies, processes, control environment and systems. The outcome of this evaluation will be the implementation of supporting processes and systems that enable timely and accurate reporting under the new standard.

While the Company continues to assess all potential impacts under the new standard, we believe that based on a preliminary assessment the new standard is unlikely to result in a significant change to the amount or timing of revenue recognition related to system sales or service contracts, the Company's major revenue streams. There may be some impact related to the allocation of value and timing of recognition in situations where service contracts, which the Company expects to be recognized over time, are sold together with systems that are primarily recognized at a point in time. The Company believes that certain aspects of the new guidance will require significant judgment, including identification of relevant performance obligations and quantification and allocation of the consideration to which the entity expects to be entitled in exchange for those goods or services. Further, in connection with the adoption of the standard, there is a requirement to capitalize certain costs, which for the Company primarily comprises commission expenses for sales representatives. Any such costs required to be capitalized would amortize over the period of performance for the underlying contracts. The Company is still evaluating the impact of capitalizing costs to execute a contract. However, the primary potential impact is expected to relate to commissions on service contracts with a duration approximating or exceeding one year. The impact related to contracts with a duration over one year is not expected to be significant and the Company expects to elect the practical expedient under the new standard for costs with a duration less than one year and expense those items as incurred. This preliminary assessment is based on the Company's analysis of actual historical revenue transactions and current customer contracts under the new guidance and presumes certain conclusions as it relates to accounting policies under the new standard and the Company's current contracts. Due to the complexity of certain of the Company's contracts and at least the possibility that contractual arrangements could change, the actual revenue recognition treatment required under the new standard for these arrangements may be dependent on contract-specific terms and may vary from this overall expectation. The Company currently expects that necessary operational changes will be implemented prior to the adoption date. The new standard will increase the Company's revenue related disclosures; primarily by expanding disclosure of the Company's policies, significant estimates, and performance obligations.

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory, to improve and simplify the accounting for the income tax consequences of intra-entity transfers of assets other than inventory, requiring companies to recognize income tax consequences upon the transfer of the asset to a third party. ASU 2016-16 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods, which would be the Company's fiscal year ending March 30, 2019. While the Company does not expect the adoption of ASU 2016-16 to have a material effect on its business, the Company is still evaluating any potential impact that adoption of ASU 2016-16 may have on its financial position, results of operations or cash flows.

In February 2016, the FASB issued ASU 2016-02, Leases. ASU 2016-02 increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and requires disclosing key information about leasing arrangements. ASU 2016-02 is effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods, which would be the Company's fiscal year ending March 28, 2020. The Company is still evaluating any potential impact that adoption of ASU 2016-02 may have on its financial position, results of operations or cash flows.

9

3. Fair Value Measurements

Financial Assets and Liabilities Measured at Fair Value

ASC Topic 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include the following:

• Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities;

• Level 2, defined as inputs that are observable either directly or indirectly such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and other inputs that can be corroborated by observable market data; and

• Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of December 30, 2017 and April 1, 2017 was as follows (in thousands):

December 30, 2017	Level 1		Level 2			Level 3		Total
Cash equivalents:
Money market securities	$	24,537	$	—		$	—	$	24,537
Commercial paper	—		4,149			—		4,149
Total cash equivalents	$	24,537	$	4,149		$	—	$	28,686
Short term investments - available for sale:
U.S. treasury fund	$	10,447	$	—		$	—	$	10,447
Commercial paper	—		24,173			—		24,173
Corporate bonds	—		2,204			—		2,204
Total short-term investments - available for sale	$	10,447	$	26,377		$	—	$	36,824
Forward purchase or (sale) contracts:
Japanese Yen	$	—	$	(1	)	$	—	$	(1	)
New Taiwan Dollar	—		11			—		11
Korean Won	—		(4		)	—		(4		)
Euro	—		(14		)	—		(14		)
British Pound	—		(13		)	—		(13		)
Chinese Renminbi	—		(51		)	—		(51		)
Total forward contracts	$	—	$	(72	)	$	—	$	(72	)
Deferred compensation plan assets:*
Mutual funds and exchange traded funds	$	2,634	$	—		$	—	$	2,634
Money market securities	959		—			—		959
Total deferred compensation plan assets	$	3,593	$	—		$	—	$	3,593

10

April 1, 2017	Level 1		Level 2			Level 3		Total
Cash equivalents:
Money market securities	$	22,395	$	—		$	—	$	22,395
Commercial paper	—		4,945			—		4,945
Total cash equivalents	$	22,395	$	4,945		$	—	$	27,340
Short term investments - available for sale:
Commercial paper	$	—	$	5,743		$	—	$	5,743
Total short-term investments - available for sale	$	—	$	5,743		$	—	$	5,743
Forward purchase or (sale) contracts:
Japanese Yen	$	—	$	9		$	—	$	9
New Taiwan Dollar	—		20			—		20
Korean Won	—		39			—		39
Euro	—		(96		)	—		(96		)
British Pound	—		16			—		16
Chinese Renminbi	—		(5		)	—		(5		)
Singapore Dollar	—		(1		)	—		(1		)
Total forward contracts	$	—	$	(18	)	$	—	$	(18	)
Deferred compensation plan assets:*
Mutual funds and exchange traded funds	$	845	$	—		$	—	$	845
Money market securities	2,213		—			—		2,213
Total deferred compensation plan assets	$	3,058	$	—		$	—	$	3,058

*These investments represent assets held in trust for the deferred compensation plan

For Level 1 assets, the Company utilized quoted prices in active markets for identical assets.

For Level 2 assets, exclusive of forward contracts, the Company utilized quoted prices in active markets for similar assets. For forward contracts, spot prices at December 30, 2017 and April 1, 2017 were utilized to calculate fair values.

During the first three quarters of 2018 and 2017, there were no transfers between Level 1, 2 or 3 assets.

Investments

The Company’s investments, other than money market securities for which there is no unrealized gain or loss, at December 30, 2017 and April 1, 2017 were as follows (in thousands):

			Unrealized
December 30, 2017	Cost		Gain		Loss			Fair Value
Available-for-sale securities (current):
U.S. treasury fund	$	10,465	$	—	$	(18	)	$	10,447
Commercial paper	28,322		—		—			28,322
Corporate Bonds	2,205		—		(1		)	2,204
Total investments (current)	$	40,992	$	—	$	(19	)	$	40,973
Available-for-sale securities (non-current):
Mutual funds, exchange traded funds and money market securities*	$	3,322	$	271	$	—		$	3,593
Total investments (non-current)	$	3,322	$	271	$	—		$	3,593
			Unrealized
April 1, 2017	Cost		Gain		Loss			Fair Value
Available-for-sale securities (current):
Commercial paper	$	10,688	$	—	$	—		$	10,688
Total investments (current)	$	10,688	$	—	$	—		$	10,688
Available-for-sale securities (non-current):
Mutual funds, exchange traded funds and money market securities*	$	2,974	$	84	$	—		$	3,058
Total investments (non-current)	$	2,974	$	84	$	—		$	3,058

*These investments represent assets held in trust for the deferred compensation plan

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For purposes of determining gross realized gains and losses and reclassification out of accumulated other comprehensive income (loss), the cost of securities sold is based on specific identification. Net unrealized holding gains and losses on current available-for-sale securities included in accumulated other comprehensive income (loss) were insignificant as of December 30, 2017 and April 1, 2017.

4. Trade Accounts Receivable

Trade accounts receivable consisted of the following:

(In thousands)	Dec 30, 2017		Apr 1, 2017
Current trade accounts receivable, net	$	75,674	$	40,494
Non-current trade accounts receivable	65		489
	$	75,739	$	40,983

Non-current trade accounts receivable are included in Other assets in the Condensed Consolidated Balance Sheets.

5. Inventories

Inventories are principally valued at standard cost, which approximates the lower of cost or net realizable value on a first-in, first-out basis. Components of inventories were as follows:

(In thousands)	Dec 30, 2017		Apr 1, 2017
Raw materials and purchased parts	$	50,720	$	41,383
Work-in-process	18,737		13,829
Finished goods	5,045		3,730
	$	74,502	$	58,942

6. Other Assets

Other assets consisted of the following:

(In thousands)	Dec 30, 2017		Apr 1, 2017
Demo and leased equipment, net	$	8,636	$	11,011
Long term deposits and non-trade receivables	2,620		2,872
Non-current restricted cash	1,087		1,090
Non-current deferred income taxes, net	827		890
Other non-current assets	4,169		3,958
	$	17,339	$	19,821

Depreciation expense for demo and leased equipment totaled $0.6 million in the third quarter of 2018 and $0.1 million in the third quarter of 2017. For the three fiscal quarters endedDecember 30, 2017 depreciation expense for demo and leased equipment totaled $0.8 million compared to $0.3 million for the three fiscal quarters endedDecember 31, 2016. Of the total $8.6 million and $11.0 million of demo and leased equipment at December 30, 2017 and April 1, 2017, $4.1 million and $1.1 million were leased assets at customer sites generating revenue.

Included in Other non-current assets are long-term investments held in a trust for the deferred compensation plan, non-current trade accounts receivable and other items.

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7. Accrued Liabilities

Accrued liabilities consisted of the following:

(In thousands)	Dec 30, 2017		Apr 1, 2017
Payroll-related liabilities	$	12,841	$	6,335
Customer deposits	11,431		1,242
Product warranty accrual	4,506		3,394
Purchase order commitments and receipts	3,014		2,522
Restructuring costs payable	2,608		4,996
Professional fees payable	832		734
Current portion, long-term debt	415		434
Other current liabilities	4,744		2,529
	$	40,391	$	22,186

Included in other current liabilities above are accrued amounts for value-added taxes, income taxes, freight, and other similar items.

8. Product Warranty

The following is a reconciliation of the changes in the aggregate product warranty accrual:

	Fiscal quarter ended						Three fiscal quarters ended
(In thousands)	Dec 30, 2017			Dec 31, 2016			Dec 30, 2017			Dec 31, 2016
Product warranty accrual, beginning	$	7,156		$	5,521		$	5,474		$	5,734
Warranty charges incurred, net	(3,273		)	(1,674		)	(8,384		)	(4,988		)
Provision for warranty charges	5,067			1,064			11,860			4,165
Product warranty accrual, ending	$	8,950		$	4,911		$	8,950		$	4,911

Net warranty charges incurred include labor charges and costs of replacement parts for system repairs under warranty. These costs are recorded net of any estimated cost recoveries resulting from either successful repair of damaged parts or from warranties offered by the Company’s suppliers for defective components. The provision for warranty charges reflects the estimate of future anticipated net warranty costs to be incurred for all products under warranty at quarter end and is recorded to cost of sales. Of the total of $9.0 million and $4.9 million of product warranty accruals as of December 30, 2017 and December 31, 2016, $4.5 million and $0.8 million were non-current and were included in Other liabilities on the Condensed Consolidated Balance Sheets.

9. Deferred Revenue

Generally, revenue is recognized upon fulfillment of acceptance criteria at the Company's factory and transfer of risk of loss and title. Revenue is deferred whenever title transfer is pending, risk of loss has not transferred, and/or acceptance criteria have not yet been fulfilled. Deferred revenue arises from, among other factors, sales to Japanese customers, shipments of substantially new products and shipments with custom specifications and other acceptance criteria where the Company cannot demonstrate a track record of acceptance. For sales involving multiple element arrangements, the relative selling price of any undelivered elements, including installation services and similar items, is deferred until the elements are delivered and acceptance criteria are met. Revenue related to maintenance and service contracts is deferred and recognized ratably over the duration of the contracts.

The following is a reconciliation of the changes in deferred revenue:

	Fiscal quarter ended						Three fiscal quarters ended
(In thousands)	Dec 30, 2017			Dec 31, 2016			Dec 30, 2017			Dec 31, 2016
Deferred revenue, beginning	$	15,616		$	11,583		$	15,397		$	7,685
Revenue deferred	51,191			9,075			66,661			28,547
Revenue recognized	(54,420		)	(9,440		)	(69,671		)	(25,014		)
Deferred revenue, ending	$	12,387		$	11,218		$	12,387		$	11,218

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Of the total of $12.4 million and $11.2 million of deferred revenue at December 30, 2017 and December 31, 2016, $0.4 million and $0.4 million were non-current and were included in Other liabilities on the Condensed Consolidated Balance Sheets.

10. Long-term Debt

On January 9, 2017, ESI Leasing, LLC (ESI Leasing), a wholly owned subsidiary of the Company, entered into a loan agreement (Loan Agreement) with First Technology Federal Credit Union (Lender). The Loan Agreement provides for a term loan from the Lender to ESI Leasing in the principal amount of $14 million (Loan). The interest rate of the Loan is fixed at 4.75% per annum, except that it may be increased if certain covenants under the Loan Agreement are not satisfied and after and during the continuation of an “Event of Default” as defined in the Loan Agreement. The Loan amortizes over a period of approximately 20 years, with the outstanding principal maturing and becoming due on January 1, 2027. ESI Leasing pays monthly principal and interest payments on the Loan totaling $1.1 million annually through the maturity of the Loan. The Company unconditionally guarantees the Loan. The Company is required to maintain certain deposits with the Lender through March 31, 2019, at which point the restriction will be removed as long as we are in compliance with certain minimum covenants.

The principal maturities for each of the upcoming calendar twelve-month periods ending on December 30 are as follows:

(In thousands)	2018		2019		2020		2021		2022
Principal maturities	$	449	$	471	$	492	$	518	$	543

Total debt outstanding on the Loan Agreement were as follows:

(In thousands)	Dec 30, 2017			Apr 1, 2017
Total debt outstanding	$	13,290		$	13,923
Less: Current portion, long-term debt	(415		)	(434		)
Long-term debt	$	12,875		$	13,489

Deferred debt issuance costs related to the above long-term debt as of December 30, 2017 and April 1, 2017 were $311 thousand and $337 thousand, respectively.

11. Revolving Credit Facility

The Company is party to a loan and security agreement (Credit Facility) with Silicon Valley Bank (SVB), which was initially entered into on March 20, 2015 and amended on July 12, 2016. The Credit Facility provides for a senior secured asset-based revolving facility with availability up to $30.0 million, including a $15.0 million sublimit for letters of credit. In the fourth quarter of fiscal 2017, the Company amended and extended the Credit Facility by one year. With this extension, the Credit Facility expires March 20, 2019. At December 30, 2017, the Company had no amounts outstanding under the Credit Facility, was in compliance with all covenants, and was not in default under the Credit Facility. The commitment fee on the amount of unused credit was 0.3 percent. As amended, the Credit Facility allows for a greater level of EBITDA losses, but reduces the level of permitted acquisitions and purchases of capital equipment. If the Company fails to meet the covenants in its Credit Facility or its lenders fail to fund, access to the facility may be limited or the facility may become unavailable altogether.

12. Commitments & Contingencies

The Company mitigates credit risk by transacting with highly rated counterparties for foreign exchange contracts, letters of credit and other transactions where counterparty risk is a factor. The Company has evaluated the non-performance risks associated with the Company's lenders and other parties and believes them to be insignificant.

From time to time the Company may be party to litigation arising in the normal course of business. Currently, the Company is not party to any litigation it believes would have a material adverse effect on the Company's financial position, results of operations or cash flows.

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13. Shareholders’ Equity

Share Repurchase Program

In December 2011, the Board of Directors authorized a share repurchase program totaling $20.0 million to acquire shares of the Company's outstanding common stock. The repurchases are to be made at management’s discretion in the open market or in privately negotiated transactions in compliance with applicable securities laws and other legal requirements and are subject to market conditions, acceptable share price and other factors. The Company did not repurchase any shares during fiscal 2017 or the first three quarters of 2018. There is no expiration date for the repurchase program.

14. Accumulated Other Comprehensive Income (Loss)

The following is a reconciliation of the changes in accumulated other comprehensive income (AOCI):

	Foreign currency translation adjustment			Accumulated other comprehensive income related to benefit plan obligation			Net unrealized loss on available-for-sale securities			Total
Balance at April 1, 2017	$	(1,242	)	$	45		$	(17	)	$	(1,214	)
Other comprehensive income (loss) before reclassifications and taxes	961			20			(18		)	963
Amounts reclassified from AOCI	—			—			—			—
Tax effect	8			(7		)	—			1
Other Comprehensive income (loss)	969			13			(18		)	964
Balance at December 30, 2017	$	(273	)	$	58		$	(35	)	$	(250	)

15. Share-Based Compensation

The Company's share-based compensation consists of stock-settled stock appreciation rights (SARs), restricted stock unit awards with a service condition (time-based RSUs), restricted stock unit awards with a performance condition (performance-based RSUs), restricted stock unit awards with a market performance condition (market-based RSUs) and an employee stock purchase plan.

The Company recognizes expense related to the fair value of SARs and the 1990 Employee Stock Purchase Plan (ESPP) using the Black-Scholes model to estimate the fair value of awards on the date of grant. The fair value of time-based and performance-based restricted stock units (RSUs) are measured on the grant date based on the market value of the Company's common stock. The market-based RSUs must achieve the total shareholder return (TSR) measures in order for the awards to vest, and the grant date fair value of the awards is calculated using a Monte Carlo simulation model.

Except for performance-based RSUs, the Company recognizes compensation expense for all share-based compensation awards, net of estimated forfeitures, on a straight-line basis over the requisite service period of the award. Expense for performance-based RSUs is recognized based on the probability of achievement of the performance criteria. The compensation cost for market-based RSUs is recognized over the related service period, even if the market condition is never satisfied. The impact of adjustments related to awards where the requisite service period was not completed is reflected as an offset to current period shared-based compensation expense.

The Company granted a total of 442,400 time-based RSUs and 222,400 market-based RSUs during the first three quarters of 2018, but did not grant any SARs or performance-based RSUs. Grants for the third quarter of 2018 consisted of 46,000 time-based RSUs and 25,000 market-based RSUs.

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Share-based compensation expense under the stock incentive plans is included in the Company’s Condensed Consolidated Statements of Operations as follows:

	Fiscal quarter ended				Three fiscal quarters ended
(In thousands)	Dec 30, 2017		Dec 31, 2016		Dec 30, 2017		Dec 31, 2016
Cost of sales	$	64	$	142	$	208	$	398
Selling, general and administrative	498		1,391		2,629		3,573
Research, development and engineering	151		285		484		656
Total share-based compensation expense	$	713	$	1,818	$	3,321	$	4,627

The Company does not have any capitalizable share-based compensation costs for the three fiscal quarters endedDecember 30, 2017 and December 31, 2016, respectively. As of December 30, 2017, the Company had $8.0 million of total unrecognized share-based compensation costs, net of estimated forfeitures, which are expected to be recognized over a weighted average period of 2.3 years.

16. Product and Geographic Information

Operating segments are defined as components of an enterprise about which separate financial information is available and evaluated regularly by the chief operating decision maker (CODM) in deciding how to allocate resources and in assessing performance. The Company's CODM is its Chief Executive Officer (CEO).

The Company and its consolidated subsidiaries operate in a single segment, defined as a manufacturer of high-technology microfabrication and related equipment. This segment sells products into a variety of end markets that are grouped into four major categories for the purpose of providing an understanding of the principal end markets for the products manufactured by the Company, specifically: 1) Printed Circuit Board (PCB), 2) Component Test, 3) Semiconductor, and 4) Industrial Machining.

The following table presents net sales information by the four major market categories addressed by the Company's single segment:

	Fiscal quarter ended				Three fiscal quarters ended
(In thousands)	Dec 30, 2017		Dec 31, 2016		Dec 30, 2017		Dec 31, 2016
Printed Circuit Board	$	83,799	$	15,987	$	179,658	$	60,432
Component Test	7,473		5,407		23,331		14,999
Semiconductor	12,351		6,690		31,116		21,521
Industrial Machining	7,217		5,695		20,386		14,153
Net Sales	$	110,840	$	33,779	$	254,491	$	111,105

Net sales by geographic area, based on the location of the end user, were as follows:

	Fiscal quarter ended				Three fiscal quarters ended
(In thousands)	Dec 30, 2017		Dec 31, 2016		Dec 30, 2017		Dec 31, 2016
Asia	$	103,069	$	26,015	$	233,685	$	92,184
Americas	2,431		6,210		9,537		11,464
Europe	5,340		1,554		11,269		7,457
Net Sales	$	110,840	$	33,779	$	254,491	$	111,105

17. Restructuring and Cost Management Plans

2017 Corporate Restructuring:

In the fourth quarter of 2017, the Company initiated a restructuring plan to improve business effectiveness and streamline operations to achieve a stated target profit level for the Company as a whole. As a part of the restructuring plan, the management team was reorganized from a business unit to a functional structure; the Company closed facilities in Montreal, Canada; Napa, California; and Sunnyvale, California; the Company discontinued certain products; and the Company made select reductions in headcount across the Company. Actions under this plan were completed as of the end of the third fiscal quarter of 2018.

Total expenses related to the plan were $17.2 million in the first three quarters of 2018 and $7.6 million in the fourth quarter of 2017. Included in the 2018 expenses are approximately $13.3 million of charges, all incurred in the first and second

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quarters of 2018, impacting gross margins primarily related to impairment of other assets and inventory stemming from the product portfolio program reviews. Operating expense charges included $2.5 million of facilities and fixed assets charges related to streamlining facilities and discontinued products and $1.3 million of employee severance and related costs. Restructuring costs of $0.7 million incurred in the third quarter of 2018 were primarily related to the employee severance and related costs to a departed executive. Product portfolio reviews are complete as of the end of third quarter of 2018. The impacts of the decisions made in the portfolio reviews involve the use of certain estimates. Actual results could differ from those estimates and result in additional charges.

The following table presents the total expected restructuring costs as of December 30, 2017 (in thousands):

	Total Expected Costs for the Plan		Costs Recognized from inception of the plan through the Quarter ended Dec 30, 2017		Remaining Costs to be Recognized Subsequent to Dec 30, 2017
Employee severance and related personnel costs	$	4,872	$	4,872	$	—
Site closure costs	1,714		1,714		—
Current asset impairments and other gross profit charges(1)	14,947		14,947		—
Non-current asset impairments	3,032		3,032		—
Other costs	239		239		—
Total	$	24,804	$	24,804	$	—

(1) Current asset impairments include inventory charges recorded in cost of sales.

The following table presents the amounts payable related to the 2017 Corporate Restructuring (in thousands):

	Employee severance and related personnel costs			Site closure costs			Current asset impairments and other gross profit charges(1)			Non-current asset impairments			Other Costs			Total
Balance as of April 2, 2016	$	—		$	—		$	—		$	—		$	—		$	—
Costs incurred	3,588			888			1,669			1,376			66			7,587
Cash payments	(341		)	—			—			—			(66		)	(407		)
Non-cash items	—			—			(1,669		)	(1,376		)	—			(3,045		)
Balance as of April 1, 2017	$	3,247		$	888		$	—		$	—		$	—		$	4,135
Costs incurred	1,284			824			13,278			1,657			175			17,218
Cash (payments) receipts	(3,788		)	(1,389		)	(1,750		)	32			(175		)	(7,070		)
Non-cash items	—			—			(10,876		)	(1,689		)	—			(12,565		)
Balance as of December 30, 2017	$	743		$	323		$	652		$	—		$	—		$	1,718

(1) Asset and facilities costs include inventory charges recorded in cost of sales.

Other restructuring plans:

The Company's previously disclosed restructuring plans are largely complete. Net restructuring costs related to these plans were $0.4 million in 2018 and $0.4 million in 2017. Please see Note 26: Restructuring and Cost Management Plans to the Company’s financial statements included in its Annual Report on Form 10-K for the fiscal year ending April 1, 2017. The amounts payable of $0.9 million at December 30, 2017 are expected to be future cash outflows, primarily relating to facility costs to be paid through the end of calendar 2018. The Company does not expect to incur additional expenses related to these plans.

The following table presents the amounts related to restructuring costs payable (in thousands):

Restructuring & cost management amounts payable as of April 2, 2016	$	757
Cash payments and other adjustments	(297		)
Costs incurred	401
Restructuring & cost management amounts payable as of April 1, 2017	861
Cash payments and other adjustments	(380		)
Costs incurred	409
Restructuring & cost management amounts payable as of December 30, 2017	$	890

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Overall restructuring reserve:

As of December 30, 2017, and April 1, 2017, the amount of unpaid restructuring costs included in accrued liabilities on the Consolidated Balance Sheets were $2.6 million and $5.0 million, respectively. Included in the payable balance are amounts for severance and employee benefits, asset retirement obligation and net lease commitments.

18. Income Taxes

The Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law in the U.S. on December 22, 2017. The Tax Act includes various changes to the tax law, including a permanent reduction in the corporate income tax rate. The Company recognized the estimated effects of the changes in the tax rate and laws resulting from the Tax Act during the quarter ended December 31, 2017.

The Tax Act reduces the federal corporate income tax rate from 35% to 21% effective January 1, 2018. The Company’s federal statutory rate for the fiscal year ending March 31, 2018 is a blended rate based on the weighting of pre- and post-Tax Act rates and will be 21% for future fiscal years.

Deferred tax assets and liabilities are remeasured at the new rates; however, given a full valuation allowance against net deferred tax assets, the expense arising from the re-measurement of deferred tax assets and liabilities is fully offset by an equivalent adjustment to our existing valuation allowance, resulting in no net impact to tax expense.

The Tax Act imposes a one-time transition tax on the deemed repatriation of post-1986 undistributed foreign subsidiaries’ earnings. Based on the information available as of December 31, 2017, the Company estimated undistributed foreign earnings of approximately $43 million. The taxable income arising from this deemed repatriation is expected to be fully offset by the utilization of net operating loss carryforwards and other tax credits, offset by changes in the valuation allowance, resulting in no net impact to tax expense.

The Tax Act also includes a base erosion and anti-abuse tax (BEAT), applicable to corporations with annual gross receipts of at least $500M for the prior 3-years, which requires U.S. multinationals making “excessive” deductible payments to their foreign affiliates to pay a 10 percent tax on their income without those deductions, after a one-year, 5 percent transition rate. Further the Tax Act imposes a tax on global intangible low-taxed income (GILTI) on controlled foreign corporations’ aggregate net income over a 10% benchmark return on qualified business asset investment less interest expense. We have not evaluated the impacts of these provisions at this time nor have we elected whether to treat the impacts of GILTI as a period expense or as a deferred tax item.

We continue to evaluate the impact the new legislation will have on our financial position, results of operations, and cash flows. We expect additional technical guidance from the Department of Treasury, possibly up through the date of the Company’s tax return filings. Additionally, the FASB has proposed new accounting guidance regarding the treatment of the impact of the Tax Act on items recorded within accumulated other comprehensive income (loss), but this guidance has not been finalized. The Securities and Exchange Commission Staff Accounting Bulletin No. 118 allows the use of provisional amounts if accounting for the income tax effects of the Act has not been completed when the Company’s financial statements are issued. This measurement period may extend no longer than one year.

While we believe the net impact on the 2018 effective tax rate and tax expense is not material due to our existing net operating loss carryforwards and other tax credits, rule-making and the Company’s assessment remains ongoing. Therefore, the final impact of the Tax Reform may differ due to changes in interpretations, assumptions and that we are not able to fully quantify the impact on our financial position, results of operations, and cash flows at this time. Provisional amounts will be adjusted during the measurement period as accounting for the income tax effects of the Act is completed and the rules and technical guidance are finalized.

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19. Earnings (Loss) Per Share

The following is a reconciliation of weighted average shares outstanding used in the calculation of basic and diluted earnings (loss) per share:

	Fiscal quarter ended					Three fiscal quarters ended
(In thousands, except per share data)	Dec 30, 2017		Dec 31, 2016			Dec 30, 2017		Dec 31, 2016
Net income (loss)	$	33,973	$	(9,693	)	$	41,135	$	(19,486	)
Weighted average shares used for basic earnings per share	34,224		32,919			33,839		32,379
Incremental diluted shares	1,786		—			1,723		—
Weighted average shares used for diluted earnings per share	36,010		32,919			35,562		32,379
Net income (loss) per share:
Basic	$	0.99	$	(0.29	)	$	1.22	$	(0.60	)
Diluted	$	0.94	$	(0.29	)	$	1.16	$	(0.60	)

Awards of options, SARs and RSUs representing an additional 0.1 million and 2.8 million shares of stock for the third quarter of 2018 and 2017, respectively, and 0.4 million and 2.5 million shares of stock for the first three quarters of 2018 and 2017, respectively, were not included in the calculation of diluted net earnings per share because their effect would have been antidilutive.

20. Business Acquisitions

Fiscal 2017

On August 1, 2016, the Company acquired all of the outstanding shares of Visicon Technologies, Inc. (Visicon), a leading supplier of high-accuracy and high-throughput measurement and defect detection systems based in Napa, California. The consideration under the merger agreement is subject to adjustment for indebtedness, seller's transaction expenses, working capital and other items.

Based on closing working capital levels and other adjustments, the Company paid $2.0 million in cash and issued 603,939 shares of ESI common stock, valued at approximately $4.2 million. The value of the common stock was based on the closing price of stock on August 1, 2016. A portion of the shares issued in connection with the agreement were reserved in escrow to serve as a source of payment for any purchase price adjustments or indemnity claims by the Company. The sellers have contractually agreed to limitations on the sale of the shares of common stock they received in connection with the sale of Visicon; specifically, no shares could be sold for six months following closing, after which twenty-five percent of the shares become salable each quarter thereafter. The shares issued as a part of this merger represented a non-cash investing activity of $4.2 million.

The Company finalized the valuation of assets acquired, liabilities assumed, and consideration in the first quarter of 2018. The amounts shown below represent the fair value of the associated assets acquired, liabilities assumed and consideration transferred as of the acquisition date. The total estimated purchase price of $6.2 million, net of cash acquired, was allocated to the underlying assets acquired and liabilities assumed based on estimated fair value, as shown in the following table:

(In thousands)
Accounts receivable	$	391
Inventory	982
Prepaid expense and other current assets	116
Property, plant and equipment	737
Acquired intangibles	3,300
Goodwill	2,626
Other assets	26
Accounts payable and other accrued liabilities	(1,952		)
Total purchase price, net of cash acquired	$	6,226

The acquisition provided the Company with a portfolio of standalone defect detection systems for the medical device and consumer electronics markets. In addition to a standalone product portfolio and associated value streams, the acquisition provided complementary technology for integrated verification of laser machining, to allow the Company to expand its presence into the medical device market, present an opportunity for enhanced vertical integration and result in synergies with the Company's current consumer electronics customer base.

None of the goodwill is deductible for tax purposes. The acquired intangible assets consisted primarily of approximately $2.1 million of developed technology. Identified intangible assets are expected to be amortized over their useful lives of one to six years.

The operating results of the acquired entity are included in the Company’s results of operations since the date of acquisition. Pro forma financial information has not been provided for the acquisition of Visicon as it is not material to the Company’s operations and financial position.

Fiscal 2015

The Company acquired all of the outstanding shares of Wuhan Topwin Optoelectronics Technology Co., Ltd. (Topwin), a Chinese manufacturer of laser-based systems. In connection with this acquisition, the Company issued 145,442 shares and treated that as compensation to an employee of the Company who was previously an owner of Topwin. The compensation expense was recognized over the service period and from acquisition through the third quarter of fiscal 2018, the Company has recognized $1.7 million in share-based compensation expense related to this acquisition. Share-based compensation expense recognized in 2018 was $0.2 million, all incurred in the first quarter.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The statements contained in this report that are not statements of historical fact, including without limitation statements containing the words “believes”, “expects”, “projects”, “anticipates,” “plan,” “continue,” “could,” “estimates,” “intends,” “should,” “will,” “may” and similar words, constitute forward-looking statements that are subject to a number of risks and uncertainties. Forward looking statements include any statements regarding anticipated sales, gross margins, our profitability in future periods, sources of our future revenue, the effect of new guidance on revenue recognition, the effect of our adoption of accounting pronouncements or standards, our ability to complete our corporate restructuring in a timely manner and implement our new functional structure, our expectation of restructuring costs, the expected benefits of our acquisition of Visicon, future impairment of goodwill, future anticipated net warranty costs, our products’ ability to satisfy the needs of manufacturers, our relationships with suppliers and customers, trends that drive increases in applications for laser processing, the size and growth of our markets, our growth of foreign operations, our intent to reinvest foreign earnings, the effect on our business of new United States tax legislation and any deemed repatriation of our foreign earnings, our customer concentrations, overseas production capabilities, our ability to maintain and expand our core technologies and product applications, the adequacy of our liquidity and financing, our ability to resolve legal proceedings, our expectation that we will invest in new product development and enhancements, and working capital requirements and resources. From time to time, we may make other forward-looking statements. Investors are cautioned that such forward-looking statements involve estimates, assumptions, risks, and uncertainties and are subject to an inherent risk that actual results may differ materially. Factors that may cause or contribute to differences include those discussed below in Item 1A Risk Factors.

Overview of Business

Electro Scientific Industries, Inc. and its subsidiaries (ESI, we, our, or the Company) is a leading supplier of innovative laser-based microfabrication solutions for industries reliant on microtechnologies. ESI enables its customers to commercialize technology using precision laser processes. ESI's solutions produce the industry's highest quality and throughput, and targets the lowest total cost of ownership. Founded in 1944, ESI is headquartered in Portland, Oregon, with global operations and subsidiaries in Asia, Europe and North America.

Laser microfabrication is comprised of a set of precise micron-level processes, including drilling, scribing, dicing, singulation, cutting, ablating, trimming, and precision marking on multiple types of materials. These processes require application-specific laser systems that are able to meet our customers’ exacting performance and productivity requirements. Our laser-based systems are utilized in the production of flexible and rigid printed circuit board (PCB), semiconductor devices, advanced semiconductor packaging, consumer electronics, electronic sensors, touch-panel glass, flat panel liquid crystal displays (LCDs), organic light emitting diode (OLEDs) displays applications within the automotive, aerospace, medical and display end markets as well as other high-value components and devices to enable functionality, increase performance and improve production yields.

Additionally, we produce high-capacity test and inspection equipment that is critical to the quality control process during the production of multilayer ceramic capacitors (MLCCs). Our equipment ensures that each component meets the electrical and physical tolerances required to perform properly.

The third quarter of 2018 ended December 30, 2017, the second quarter of 2018 ended September 30, 2017, and the third quarter of 2017 ended December 31, 2016 were all 13-week periods. Similarly, the three quarters endedDecember 30, 2017 and the three quarters endedDecember 31, 2016 each consisted of 39-week periods.

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Results of Operations

Third Quarter2018 Highlights:

• Orders at the highest level in over ten years in the third quarter of 2018 at $134.0 million, growing 204% over the third quarter of 2017. These levels are driven by orders for our laser drilling products, which more than quadrupled versus a year ago on demand from consumer electronics manufacturers. We believe these order levels reflect:

◦ An overall strong market environment

◦ Flexible PCB manufacturers ramping capacity due to unit growth of consumer electronics devices and more flexible circuit content per device

◦ Adoption of new materials and technologies driving incremental capacity

◦ Increased capacity spend by MLCC manufacturers driven by the strong global economy and the growth in consumer electronics, automotive and radio frequency (RF) end markets.

◦ A healthy semiconductor capital spending environment

• Total net sales increased by 228% year-over-year to $110.8 million in the third quarter of 2018, due to order levels. Backlog increased by $27.6 million during the quarter to $146.2 million.

• Operating expenses of $19.9 million decreased by $1.6 million year-over-year on lower costs due to the corporate restructuring announced in February 2017, partially offset by higher variable expenses related to higher revenues and improved profitability.

• Net income was $0.94 per diluted share, compared to a loss of $0.29 per share a year ago, on higher sales and gross profit combined with lower operating expenses.

• Operating cash flow was $15.1 million, compared to a cash use of $3.7 million in the third quarter of 2017, on higher net income offset by higher working capital that resulted from our revenue growth.

• Laser ablation assets were sold for $3.0 million in cash.

Third Quarter2018 Ended December 30, 2017 Compared to Third Quarter2017 Ended December 31, 2016

The following table presents results of operations data as a percentage of net sales:

	Fiscal quarter ended
	Dec 30, 2017		Dec 31, 2016
Net sales	100.0	%	100.0	%
Cost of sales	52.0		66.1
Gross profit	48.0		33.9
Selling, general and administrative	10.0		39.3
Research, development and engineering	7.4		23.3
Acquisition and integration costs	—		0.1
Restructuring costs	0.6		1.0
Operating income (loss)	30.0		(29.8	)
Interest and other income, net	0.7		0.1
Total non-operating income	0.7		0.1
Income (loss) before income taxes	30.7		(29.7	)
Provision for (benefit from) income taxes	—		(1.0	)
Net income (loss)	30.7	%	(28.7	)%

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Net Sales

The following table presents net sales information by product group:

	Fiscal quarter ended
	Dec 30, 2017				Dec 31, 2016
(In thousands, except percentages)	Net Sales		% of Net Sales		Net Sales		% of Net Sales
Printed Circuit Board	$	83,799	75.6	%	$	15,987	47.3	%
Component Test	7,473		6.8		5,407		16.0
Semiconductor	12,351		11.1		6,690		19.8
Industrial Machining	7,217		6.5		5,695		16.9
Net Sales	$	110,840	100.0	%	$	33,779	100.0	%

Net sales for the third quarter of 2018 of $110.8 millionincreased$77.1 million or 228% when compared to net sales for the third quarter of 2017.

Sales of products into the PCB market for the third quarter of 2018increased$67.8 million or 424% compared to the third quarter of 2017. This was primarily driven by increased sales of our flex circuit drilling systems. The higher demand for flex drilling systems reflected a healthy market environment in 2018 compared to the very weak environment in the third quarter of 2017. The strong environment was driven by unit growth in consumer electronics and associated capacity additions plus new materials, technologies and applications that require increased levels of complex flexible circuits.

Sales of products into the Component Test market for the third quarter of 2018increased$2.1 million or 38% compared to third quarter of 2017, primarily driven by increased use of MLCC components, particularly in consumer electronics and automotive applications, which require our tools for processing.

Sales of products into semiconductor applications for the third quarter of 2018increased$5.7 million or 85% compared to the third quarter of 2017. This increase was primarily driven by sales of memory repair systems into the semiconductor industry, which had not occurred in the third quarter of 2017, customer acceptance which enabled revenue recognition on a unit of our new Ultrus^TM wafer scribing tool, as well as an increase in sales of our wafer mark and wafer trim products.

Sales of products into Industrial Machining applications for the third quarter of 2018increased$1.5 million or 27% compared to the third quarter of 2017. This was primarily due to higher sales of our Garnet^TM micromachining system into a PCB cutting application and increased service revenue.

The following table presents net sales information by geographic region:

	Fiscal quarter ended
	Dec 30, 2017				Dec 31, 2016
(In thousands, except percentages)	Net Sales		% of Net Sales		Net Sales		% of Net Sales
Asia	$	103,069	93.0	%	$	26,015	77.0	%
Americas	2,431		2.2		6,210		18.4
Europe	5,340		4.8		1,554		4.6
Net Sales	$	110,840	100.0	%	$	33,779	100.0	%

Net sales to Asia increased by $77.1 million or 296% primarily due to higher sales of flex via drilling products. Net sales to Americas decreased due principally to lower sales of inspection products and laser ablation products. Europe sales increased due to higher wafer trim, circuit trim, and laser ablation product sales. We do not expect laser ablation sales to recur in the next quarters due to the sale of associated assets in the third quarter of 2018. Laser ablation comprised $1.0 million of current quarter sales and $1.9 million of prior year sales.

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Gross Profit

	Fiscal quarter ended
	Dec 30, 2017				Dec 31, 2016
(In thousands, except percentages)	Gross Profit		% of Net Sales		Gross Profit		% of Net Sales
Gross Profit	$	53,156	48.0	%	$	11,448	33.9	%

Gross profit was $53.2 million for the third quarter of 2018, an increase of $41.7 million compared to $11.4 million in the third quarter of 2017. The gross profit increase was primarily driven by higher net system sales, while the gross margin increase was primarily driven by favorable absorption of fixed costs on higher production volumes.

Operating Expenses

	Fiscal quarter ended
	Dec 30, 2017				Dec 31, 2016
(In thousands, except percentages)	Expense		% of Net Sales		Expense		% of Net Sales
Selling, general and administrative	$	11,040	10.0	%	$	13,280	39.3	%
Research, development and engineering	8,165		7.4		7,868		23.3
Restructuring costs	706		0.6		321		1.0
Acquisition and integration costs	—		—		31		0.1
Operating Expenses	$	19,911	18.0	%	$	21,500	63.7	%

Selling, general and administrative

Selling, general and administrative (SG&A) expenses primarily consist of labor and other employee-related expenses, including share-based compensation expense, travel expenses, professional fees, sales commissions and facilities costs. SG&A expenses for the third quarter of 2018decreased$2.2 million compared to the third quarter of 2017. The decrease was primarily due to lower labor and facilities costs resulting from our corporate restructuring, partially offset by increased variable expenses due to higher revenues and improved profitability.

Research, Development and Engineering

Research, development and engineering (RD&E) expenses primarily comprise labor and other employee-related expenses, including share-based compensation expense, professional fees, project materials costs, equipment costs and facilities costs. RD&E expenses for the third quarter of 2018increased$0.3 million compared to the third quarter of 2017, primarily due to increased compensation costs related to improved financial performance and to a lesser extent to increased labor costs related to investment in new products.

Restructuring and cost management plans

In the fourth quarter of 2017, we initiated a restructuring plan to improve business effectiveness, streamline operations and achieve a stated target profit level for the Company as a whole. The restructuring plan was largely complete by the end of the second quarter of 2018. However, we incurred restructuring costs of $0.7 million in the third quarter of 2018, which were severance payments made to a departed executive. See Note 17: Restructuring and Cost Management Plans for further discussion.

Non-operating Income and Expense

	Fiscal quarter ended
	Dec 30, 2017				Dec 31, 2016
(In thousands, except percentages)	Non-Operating (Expense) Income		% of Net Sales		Non-Operating (Expense) Income		% of Net Sales
Interest and other income, net	$	789	0.7	%	$	34	0.1	%
Total non-operating income	$	789	0.7	%	$	34	0.1	%

Non-operating income, net, consists of interest income and expense, market gains and losses on non-operating assets, realized and unrealized foreign exchange gains and losses, bank charges, investment management fees, and other miscellaneous non-operating items, such as investment impairment. Net non-operating income was $789 thousand in the third quarter of 2018 compared to income of $34 thousand in the third quarter of 2017. The increased income in the third quarter of 2018 was due

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primarily to a $0.9 million gain on the sale of our laser ablation assets partially offset by a $0.2 million charge taken as a result of a Value Added Tax (VAT) audit in Korea.

Income Taxes

On December 22, 2017, the United States enacted tax reform legislation through the Tax Cuts and Jobs Act. The primary impact of the new tax legislation on our financial statements was the recognition of a $935 thousand discrete benefit related to the Alternative Minimum Tax (AMT) credits becoming refundable and the associated release of the valuation allowance against those credits. We do not expect other material net impacts on the Company's tax provision or annual effective tax rate, as long as the Company has a full valuation allowance in place as the expense arising from the re-measurement of deferred tax assets and liabilities is fully offset by an equivalent adjustment to the existing valuation allowance. Further, as it relates to the one-time transition tax, taxes on income arising from the deemed repatriation of foreign income are fully offset by historical net operating losses and credits.

	Fiscal quarter ended
	Dec 30, 2017				Dec 31, 2016
(In thousands, except percentages)	Income Tax Provision		Effective Tax Rate		Income Tax Benefit			Effective Tax Rate
Provision for (benefit from) income taxes	$	61	0.2	%	$	(325	)	3.2	%

The income tax provision for the third quarter of 2018 was $61 thousand on pretax income of $34.0 million for an effective tax rate of 0.2% and reflects increased foreign taxes related to higher profits largely offset by the discrete benefit described above. For the third quarter of 2017, the income tax benefit was $325 thousand on pretax loss of $10.0 million, for an effective tax rate of 3.2%. The 2017 benefit reflects a $0.4 million release of a previously unrecognized tax benefit resulting from the expiration of statute of limitation. The provision for taxes has not increased in proportion to the increase in pretax income due to the utilization of historical net operating losses currently subject to a valuation allowance and the mix of income subject to beneficial tax rates in certain jurisdictions.

Due to a history of losses, as of December 30, 2017, we maintain a full valuation allowance on our deferred tax assets. We intend to continue maintaining a full valuation allowance on our deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. Earnings in the third quarter of 2018 resulted in the utilization of a portion of our accumulated net operating loss carry-forwards. Given our current earnings levels and anticipated future earnings, we believe that there is a reasonable possibility that we will continue to utilize these tax assets, and within the next 12 months, sufficient positive evidence may become available to allow us to reach a conclusion that a significant portion of the valuation allowance will no longer be needed. A release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded.

Three Quarters Ended December 30, 2017 Compared to Three Quarters Ended December 31, 2016

Results of Operations

The following table presents results of operations data as a percentage of net sales:

	Three fiscal quarters ended
	Dec 30, 2017		Dec 31, 2016
Net sales	100.0	%	100.0	%
Cost of sales	58.3		61.1
Gross profit	41.7		38.9
Selling, general and administrative	13.9		35.0
Research, development and engineering	10.0		20.9
Acquisition and integration costs	—		0.3
Restructuring costs	1.6		0.3
Operating income (loss)	16.2		(17.7	)
Interest and other income, net	0.1		0.1
Total non-operating income	0.1		0.1
Income (loss) before income taxes	16.3		(17.5	)
Provision for (benefit from) income taxes	0.2		—
Net income (loss)	16.2	%	(17.5	)%

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Net Sales

The following table presents net sales information by product group:

	Three fiscal quarters ended
	Dec 30, 2017				Dec 31, 2016
(In thousands, except percentages)	Net Sales		% of Net Sales		Net Sales		% of Net Sales
Printed Circuit Board	$	179,658	70.6	%	$	60,432	54.4	%
Component Test	23,331		9.2		14,999		13.5
Semiconductor	31,116		12.2		21,521		19.4
Industrial Machining	20,386		8.0	%	14,153		12.7	%
Net Sales	$	254,491	100.0	%	$	111,105	100.0	%

Net sales for the first three quarters of 2018increased$143.4 million or 129% from net sales for the first three quarters of 2017.

Sales of products into the PCB market for the first three quarters of 2018 increased $119.2 million or 197% compared to the first three quarters of 2017. This increase was primarily driven by increased demand for our flex drilling systems. The higher demand for flex drilling systems reflected a healthy manufacturing environment, as well as strong technology and market drivers, primarily in consumer electronics, compared to the unusually weak environment in the first three quarters of 2017.

Sales of products into the Component Test market for the first three quarters of 2018 increased $8.3 million or 56% compared to the first three quarters of 2017, primarily driven by stronger capacity buying by MLCC manufacturers, particularly for consumer electronics and automotive applications.

Sales of products into semiconductor applications for the first three quarters of 2018 increased $9.6 million or 45% compared to the first three quarters of 2017. The increase was primarily driven by higher sales of memory repair systems in 2018 compared to 2017, reflecting strength in the memory semiconductor market, and increased sales of semiconductor trim products. 2018 sales also included a unit of our new Ultrus^TM wafer scribing tool, which received customer acceptance in the third quarter.

Sales of products into Industrial Machining applications for the first three quarters of 2018 increased $6.2 million or 44% compared to the first three quarters of 2017. This was primarily due to higher Garnet^TM system sales into industrial and PCB applications, and increased service revenue.

The following table presents net sales information by geographic region:

	Three fiscal quarters ended
	Dec 30, 2017				Dec 31, 2016
(In thousands, except percentages)	Net Sales		% of Net Sales		Net Sales		% of Net Sales
Asia	$	233,685	91.8	%	$	92,184	83.0	%
Americas	9,537		3.7		11,464		10.3
Europe	11,269		4.4		7,457		6.7
Net Sales	$	254,491	100.0	%	$	111,105	100.0	%

Net sales in Asia increased to $233.7 million in the first three quarters of 2018, an increase of $141.5 million compared to $92.2 million in the first three quarters of 2017 primarily due to higher flex via drilling sales, but also due to higher sales of our MLCC test systems. Americas sales were $9.5 million in the first three quarters of 2018, a decrease of $1.9 million compared to $11.5 million in the first three quarters of 2017. This was primarily due to 2017 sales of our CornerStone^TM system which did not repeat in 2018, as we have discontinued selling the CornerStone^TM system in the first quarter of 2018.

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Gross Profit

	Three fiscal quarters ended
	Dec 30, 2017				Dec 31, 2016
(In thousands, except percentages)	Gross Profit		% of Net Sales		Gross Profit		% of Net Sales
Gross Profit	$	106,108	41.7	%	$	43,236	38.9	%

Gross profit was $106.1 million for the first three quarters of 2018, an increase of $62.9 million compared to the first three quarters of 2017. Gross profit increased primarily due to higher net sales and production volumes. Gross margin was 41.7% and 38.9% for the first three quarters of 2018 and 2017, respectively. Gross margins in 2018 benefited from favorable absorption of fixed costs due to higher production volumes, partially offset by $13.3 million of charges for the impairment of inventory and other assets related to discontinued products, as a result of our portfolio review and streamlining process.

Operating Expenses

	Three fiscal quarters ended
	Dec 30, 2017				Dec 31, 2016
(In thousands, except percentages)	Expense		% of Net Sales		Expense		% of Net Sales
Selling, general and administrative	$	35,496	13.9	%	$	38,917	35.0	%
Research, development and engineering	25,373		10.0		23,258		20.9
Restructuring costs	4,079		1.6		321		0.3
Acquisition and integration costs	—		—		366		0.3
Operating Expenses	$	64,948	25.5	%	$	62,862	56.6	%

Selling, general and administrative

SG&A expenses primarily consist of labor and other employee-related expenses including share-based compensation expense, travel expenses, professional fees, sales commissions and facilities costs. SG&A expenses for the first three quarters of 2018decreased$3.4 million compared to the first three quarters of 2017. This decrease primarily relates to lower labor-related expenses resulting from our corporate restructuring. The $4.5 million decrease in labor expense was partially offset by an increase in variable compensation expenses.

Research, Development and Engineering

RD&E expenses primarily comprise labor and other employee-related expenses including share-based compensation expense, professional fees, project materials costs, equipment costs and facilities costs. RD&E expenses for the first three quarters of 2018increased$2.1 million compared to the first three quarters of 2017. This increase was primarily driven by an increase in variable compensation expense.

Acquisition and Integration Costs

Acquisition and integration costs in 2017 consisted mainly of consulting, legal and travel expenses associated with the acquisition and integration of Visicon, which was acquired on August 1, 2016 (see Note 20: Business Acquisitions). The Visicon acquisition charges were partially offset by $0.2 million of escrow cash settlement related to our Topwin acquisition in 2015, received in the second quarter of 2017.

Restructuring Costs

In the fourth quarter of 2017, we initiated a restructuring plan to improve business effectiveness, streamline operations and achieve a stated target cost level for the Company as a whole. Restructuring costs of $4.1 million incurred in the first three quarters of 2018 primarily consisted of $1.7 million of fixed asset write-offs, $0.8 million of facilities lease obligations, and $1.4 million of severance and related benefits charges. See Note 17: Restructuring and Cost Management Plans for further discussion.

Non-operating Income and Expense

Non-operating income and expense, net, consists of interest income and expense, market gains and losses on assets held in employees’ deferred compensation accounts, realized and unrealized foreign exchange gains and losses, bank charges, investment management fees, and other miscellaneous non-operating items, such as investment impairment.

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Non-operating income and expense were as follows:

	Three fiscal quarters ended
	Dec 30, 2017				Dec 31, 2016
(In thousands, except percentages)	Non-Operating (Expense) Income		% of Net Sales		Non-Operating (Expense) Income		% of Net Sales
Interest and other income, net	$	376	0.1	%	$	162	0.1	%
Total non-operating income	$	376	0.1	%	$	162	0.1	%

Interest and other income (expense), net

Net interest and other (expense) income, net, was income of $376 thousand in the first three quarters of 2018 compared to income of $162 thousand in the first three quarters of 2017. The change in non-operating income was primarily due to the $0.9 million gain recorded in the third quarter of 2018 for the sale of the laser ablation assets, partially offset by a $0.4 million charge related to a VAT audit in Korea and higher interest expense due to our facilities loan in 2018 as compared to 2017.

Income Taxes

On December 22, 2017, the United States enacted tax reform legislation through the Tax Cuts and Jobs Act. The primary impact of the new tax legislation on our financial statements was the recognition of a $935 thousand discrete benefit related to the Alternative Minimum Tax (AMT) credits becoming refundable and the associated release of the valuation allowance against those credits. We do not expect other material net impacts on the Company's tax provision or annual effective tax rate, as long as the Company has a full valuation allowance in place as the expense arising from the re-measurement of deferred tax assets and liabilities is fully offset by an equivalent adjustment to the existing valuation allowance. Further, as it relates to the one-time transition tax, taxes on income arising from the deemed repatriation of foreign income are fully offset by historical net operating losses and credits.

	Three fiscal quarters ended
	Dec 30, 2017				Dec 31, 2016
(In thousands, except percentages)	Income Tax Provision		Effective Tax Rate		Income Tax Provision		Effective Tax Rate
Provision for (benefit from) income taxes	$	401	1.0	%	$	22	(0.1	)%

The income tax provision for the first three quarters of 2018 was $401 thousand on pretax income of $41.5 million, an effective tax rate of 1.0%, reflecting increased foreign taxes related to higher profits largely offset by the discrete benefit described above. For the first three quarters of 2017, the income tax provision was $22 thousand on pretax loss of $19.5 million, an effective rate of (0.1)%. The 2017 provision reflects a $0.4 million release of a previously unrecognized tax benefit resulting from the expiration of statute of limitation. The provision for taxes has not increased in proportion to the increase in pretax income due to the utilization of historical net operating losses currently subject to a valuation allowance and the mix of income subject to beneficial tax rates in certain jurisdictions.

Due to a history of losses, as of December 30, 2017, we maintain a full valuation allowance on our deferred tax assets. We intend to continue maintaining a full valuation allowance on our deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. Year to date earnings in the first three quarters of 2018 resulted in the utilization of a portion of our accumulated net operating loss carry-forwards. Given our current earnings levels and anticipated future earnings, we believe that there is a reasonable possibility that we will continue to utilize these tax assets and, within the next 12 months, sufficient positive evidence may become available to allow us to reach a conclusion that a significant portion of the valuation allowance will no longer be needed. A release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded.

Financial Condition and Liquidity

At December 30, 2017, our principal sources of liquidity were cash and cash equivalents of $62.3 million, short-term investments of $36.8 million, current accounts receivable of $75.7 million and up to $30.0 million from our credit facility (see Note 11. Revolving Credit Facility) for a total of $204.8 million, as compared to $132.9 million at April 2, 2017 and $108.8 million at December 31, 2016. At December 30, 2017, we had a current ratio of 2.86 with long-term debt outstanding of $12.9 million (see Note 10. Long-term Debt). Working capital of $169.2 million increased $53.6 million compared to the April 1, 2017 balance of $115.6 million, driven primarily by higher current asset due to improved business levels.

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Sources and Uses of Cash

Net cash provided by operating activities of $40.8 million for the three quarters endedDecember 30, 2017 was primarily a result of $41.1 million in net income, non-cash adjustments of $23.7 million, and an increase in accounts payable and accrued liabilities of $37.0 million. The increase in accrued liabilities consisted primarily of $10.2 million in customer deposits and $6.5 million in payroll-related liabilities. These were partially offset by an increase in trade receivables by $35.3 million and inventories by $24.4 million.

For the three quarters endedDecember 30, 2017, net cash used in investing activities was $36.4 million, primarily due to $31.6 million of net purchases of investments. For the three quarters endedDecember 30, 2017, net cash provided by financing activities of $0.6 million related primarily to issuances from employee stock plans, net of payments of associated withholding taxes.

The Company has a loan agreement with First Technology Federal Credit Union that provides for a ten-year term loan with a principal amount of $14 million and with an interest rate fixed at 4.75% per annum, which will come due January 1, 2027. The Company is required to maintain certain deposits with the Lender through March 31, 2019, at which point the restriction will be removed as long as we are in compliance with certain minimum covenants. At December 30, 2017, restricted cash associated with this requirement was $1.1 million.

The Company is also party to a loan and security agreement (Credit Facility) with Silicon Valley Bank (SVB) that provides for a senior secured asset-based revolving facility with availability up to $30 million, including a $15 million sublimit for letters of credit. The Credit Facility expires March 20, 2019. If we fail to meet the covenants in our credit facility or our lenders fail to fund, access to the facility may be limited or the facility may become unavailable altogether. Refer to Notes 10 and 11 of the Company's condensed consolidated financial statements for further information.

As a result of our restructuring activities, we expect to pay certain cash payments through the end of calendar 2018 (see 17. Restructuring and Cost Management Plans).

We believe that our existing cash, cash equivalents and short-term investments are adequate to fund our operations and contractual obligations for at least the next twelve months.

Critical Accounting Policies and Estimates

We reaffirm the “Critical Accounting Policies and Estimates” in Part II Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations reported in our Form 10-K for the year ended April 1, 2017.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes in the market risk disclosure contained in our Form 10-K for the year ended April 1, 2017.

Item 4. Controls and Procedures

Attached to this quarterly report as Exhibits 31.1 and 31.2 are the certifications of our President and Chief Executive Officer (CEO) and our Chief Financial Officer (CFO) required by Section 302 of the Sarbanes-Oxley Act of 2002 (the Section 302 Certifications). This portion of our quarterly report on Form 10-Q is our disclosure of the conclusions of our management regarding the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report based on management’s evaluation of those disclosure controls and procedures. This disclosure should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

Disclosure Controls and Procedures

Our management has evaluated, under the supervision and with the participation of our CEO and CFO, the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act) as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Exchange Act. Based on that evaluation, our CEO and CFO have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting during the third quarter of 2018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

In the ordinary course of business, we are involved in various routine legal matters, either asserted or unasserted, and investigations incidental to the business. In the opinion of management, ultimate resolution of these matters will not have a material effect on our consolidated financial position, results of operations or cash flows.

Item 1A. Risk Factors

The following risks and uncertainties should be read carefully with the other information included in this quarterly report. If any of the risks described below occur, our business, financial condition, operating results and cash flows could be materially and adversely affected. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations and financial results. All references to years are to fiscal years.

Risks Related to Our Competition and Customers

Volatility in our customers’ industries and capital spending can have a direct and material impact on our business.

Our business depends upon the capital equipment expenditures of manufacturers of microelectronics, PCB’s, semiconductors, computers, wireless communications and other electronic products. The capital equipment market for the production of those products has historically been characterized by cyclical variations in capital equipment supply and demand. These sometimes sudden and severe cycles may result from a number of factors, including overall consumer and industrial spending and demand for electronic products that drive manufacturer production, as well as their capacity utilization, timing of new product introductions and demand for customers’ products, inventory levels relative to demand and access to affordable capital. The timing, severity and duration of these market cycles are difficult to predict. As a result, our business can vary significantly from quarter to quarter or year to year, as evidenced, for example, by the recent third quarter of 2018 compared to the third quarter of 2017.

Downturns particularly affect our profitability given the relative fixed cost structure of our business and the need to continually invest in product technology and support and service our products. For example, in the first and second quarters of fiscal 2017, we experienced a significant decline in orders due to reduced demand from PCB manufacturers that significantly impacted our results in the second and third fiscal quarters.

Our future success depends on our ability to expand into new markets.

Our future success depends in large part on our successful entry into new markets adjacent to our existing markets, such as high density interconnect, IC packaging, advanced wafer scribing, and other industrial and consumer electronics markets, including automotive, aerospace, medical and display. These markets are new to us and our success depends on our displacing entrenched competitors who are familiar with these markets and are known to customers. In many cases, we are attempting to enter or expand our presence in these new markets with newly introduced products that are not yet proven in the industry. In addition, in some cases we need to develop or expand our sales channels and customer relationships in order to execute on this strategy. We cannot provide assurance that we will succeed in gaining significant, or any, market share in these new markets. If we fail to successfully expand into these markets, we will have difficulty growing our business and may lose business to our competitors.

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Substantial competition in markets in which we operate may result in price reductions, reduced profit margins and loss of market share.

We face substantial competition from established competitors throughout the world, some of which have greater financial, engineering, manufacturing and marketing resources than we do. Competitors with greater resources may better withstand periodic downturns, compete more effectively on the basis of price and technology, utilize better established sales channels and customer relationships, or more quickly enhance or develop new generations of products that compete with our products, in addition to other advantages. New companies may enter the markets in which we compete, or industry consolidation may occur, further increasing competition in those markets. We have also experienced new entrants to our markets offering aggressive price and payment terms in an attempt to gain market share. Some competitors, particularly in China, also develop low-cost products employing processes or technology developed by us. In addition, because we frequently price our products in U.S. dollars, a strong U.S. dollar can make our products less price-competitive outside of the United States to products priced in other currencies. We believe that to be competitive, we must continue to expend significant financial resources in order to invest in new product development and enhancements, among other things. We may not be able to compete successfully in the future and increased competition may result in price reductions, reduced profit margins and loss of market share.

Because our revenues largely depend on few customers, we have a greater degree of risk if we lose one of those customers or fail to win on new product designs.

We depend on a few significant customers for a large portion of our revenues. Our top ten customers accounted for approximately 47% of total net sales in 2017 and in the third quarter of 2018 they accounted for approximately 78% of total net sales. In the third quarter of 2018, one customer accounted for approximately 51% of our total quarterly net sales. We anticipate that sales of our products to a relatively small number of customers will continue to account for a significant portion of our revenues. Consolidation between customers, changes in technologies or solutions used by customers, changes in products manufactured by customers or in end-user demand for those products, selection of suppliers other than us, customer bankruptcies or customer departures from their respective industries all may result in even fewer customers accounting for a high percentage of our revenue and reduced demand from any single major customer. Also, our level of sales to several of our top customers depends on our winning new designs and features each product cycle, and there is no guarantee of future business based on past design wins. Furthermore, none of our customers have any long-term obligation to continue to buy our products or services and may therefore delay, reduce or cease ordering our products or services at any time. The cancellation, reduction or deferral of purchases of our products by even a single customer could significantly reduce our revenues in any particular quarter. If we lose any of our significant customers, including as a result of any shipment delays due to heightened production levels, or suffer a material reduction in their purchase orders, revenue could decline and our business, financial condition and results of operations could be materially and adversely affected.

Because our revenues are largely based on the sale of a small quantity of product units, our operating results could fluctuate significantly from quarter to quarter.

We derive a substantial portion of our revenue from the sale of a relatively small quantity of products. Accordingly, our revenues, margins and other operating results could fluctuate significantly from quarter to quarter depending upon a variety of factors in addition to those described above, including:

• the timing of orders and terms or acceptance of product shipments by our customers;

• the mix of products and services that we sell in a given quarter;

• timing and market acceptance of our new product introductions; and

• delays or problems in the planned introduction of new products, or in the performance of any such products following delivery to customers.

As a result of these risks, we believe that quarter-to-quarter comparisons of our revenue and operating results may not be meaningful, and that these comparisons may not be an accurate indicator of our future performance.

Increased pressure on price may result in pricing concessions, extended payment terms and decreased margins.

We have experienced and continue to experience pricing pressure from both competitors and customers in the sale of our products. Pricing pressures typically have become more intense during cyclical downturns when competitors seek to maintain or increase market share, reduce inventory or introduce more technologically advanced or lower-cost products. In addition, we may agree to pricing concessions or extended payment terms with our customers in connection with expanding into new markets or gaining volume orders, or to improve our customer cost of ownership in highly competitive applications. Our business, financial condition, margins or results of operations may be materially and adversely affected by competitive pressure and price-based competition.

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Risks Related to Our Supply Chain and Production

Limitations on our ability to rapidly change our production capacity in a cost effective manner could result in lower gross margins during sudden downturns and an inability to meet demand in sudden upturns.

To meet rapid changes in demand, such as we have experienced recently, we must effectively manage our resources and production capacity. During periods of decreasing demand for our products, we must be able to appropriately align our cost structure with prevailing market conditions and effectively manage our supply chain. Our ability to timely and effectively reduce our costs in response to rapid downturns is limited by the fixed nature of many of our expenses in the near term, by our need to continue investing in product technology and support and service our products, and by our need to have sufficient production capacity and supply available to respond to sudden increases in demand. Conversely, when upturns occur, we may have difficulty rapidly and effectively increasing our manufacturing capacity or procuring sufficient materials to meet sudden increases in customer demand, which could result in shipping delays or the loss of business to our competitors and harm to our relationships with our customers. If we are not able to timely and cost effectively adapt to changes in our business environment, our business, financial condition or results of operations may be materially and adversely affected.

Our reliance on critical suppliers for key components could lead to production and service interruptions and shortages.

We use a wide range of components from numerous suppliers in the manufacturing of our products, including custom electronic, laser, optical and mechanical components. We generally do not have guaranteed supply arrangements with our suppliers. We seek to reduce the risk of production and service interruptions and shortages of key parts by selecting and qualifying alternative suppliers for key parts, monitoring the financial stability of key suppliers and maintaining appropriate inventories of key parts. However, some key parts are available only from a single supplier or a limited group of suppliers in the short term. In addition, some of the lasers we use in our products are difficult to manufacture, and as a result we may not receive an adequate supply of lasers in a timely fashion to fill orders. Operations at our suppliers’ facilities are subject to disruption or discontinuation for a variety of reasons, including changes in business relationships, competition, financial difficulties, work stoppages, fire, natural disasters, customer prioritization, component end of life decisions or other causes. Any such disruption or discontinuation to our suppliers’ operations could interrupt or reduce our manufacturing activities and delay delivery of our products, any or all of which could materially and adversely affect our results of operations. This risk is particularly acute when we rely on a single or a limited group of suppliers. In addition, during periods of increased demand for our products, there is a heightened risk that one or more of our suppliers may not meet our increased demand requirements, adversely affecting our ability to fulfill orders and win business with our customers.

We may be unable to timely deliver certain products made by contract manufacturers.

We have arrangements with contract manufacturers to complete the manufacturing of certain of our product subcomponents. Any significant interruption in our contract manufacturers’ ability to provide quality manufacturing services to us as a result of contractual disputes with us or another party, labor disruptions, financial difficulties, natural disasters, delay or interruption in the receipt of inventory, or other causes could result in reduced manufacturing quality or delayed deliveries for certain of our products, any or all of which could materially and adversely affect our business. Additionally, should a contract manufacturer no longer be able to perform for any reason or we need to add a contract manufacturer, it may require substantial time and resources, including the potential of incurring substantial cost, to replace or add the associated manufacturing capabilities, which could materially and adversely affect our business.

We may incur charges for excess or obsolete inventory as a result of having to forecast product demand without firm orders.

To effectively compete, we must deliver products on schedules required by our customers. Management forecasts demand, both in type and amount of products, for us to timely meet customer delivery schedules. We use these forecasts to purchase inventory in advance of our receiving firm customer orders. We also order materials based on our technology roadmap, which represents management’s assessment of technology we will utilize in new product developments. Certain types of inventory, such as lasers and optical equipment, are particularly expensive and may only be used in the production of a single type of product. If actual demand is lower than forecast, we may have excessive working capital and slow-turning inventory. In addition, we may incur material charges for excess and obsolete inventory if we cannot sell the inventory. Also, if we alter our technology or product development strategy, we may have unusable inventory, which may also result in material accounting charges. For example, during the first quarter of 2018, we recorded approximately $6.0 million of charges in cost of sales for inventory written off associated with discontinued products.

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Increasing regulations or environmental requirements on our product components could negatively affect our ability to sell our products or source materials.

Many countries, including the United States, China and those in the European Union, have implemented directives that restrict the sale of new electrical and electronic equipment containing certain hazardous substances and require disclosures if certain metals used in products are not from a conflict-free source. The directives could restrict our ability to sell our products in certain countries and affect sourcing at competitive prices and availability in sufficient quantities of certain minerals used in the manufacture of our products. In addition, our reputation could suffer if we are required to disclose that metals in our products are not from conflict-free sources.

Risks Related to Our Organization

Our significant international trade subjects us to greater risks.

International shipments accounted for 90% of net shipments in 2017, with 84% of our net shipments to customers in Asia. We expect that international shipments will continue to represent a significant percentage of net sales in the future. In addition, we obtain supplies through an international supply chain. Our non-U.S. sales and purchases are subject to risks inherent in international trade, many of which are outside our control and include the following:

• periodic local or geographic economic downturns;

• price and currency exchange controls;

• fluctuation in the relative values of currencies;

• difficulty in repatriating money, whether as a result of tax laws or otherwise;

• difficulties protecting intellectual property;

• shipping delays and disruptions, including as a result of border controls;

• changes in trading policies, regulatory requirements, export control regulations, tariffs and other barriers, or the termination or renegotiation of existing trade agreements; and

• difficulties in managing a global enterprise, including staffing, collecting accounts receivable, and managing suppliers, distributors and representatives.

Our success could be negatively impacted if we fail to effectively control, oversee and direct foreign subsidiaries and their operations.

We have significant foreign operations and subsidiaries, including manufacturing facilities in Singapore and China, research and application development facilities in France, China and Korea, and sales and service offices in various countries. Under our globalization strategy, we intend to increase our foreign operations in the future. Operating in multiple countries requires us to understand and comply with many different laws, infrastructures, ways of doing business, cultural customs and language. We are also more exposed to local labor disputes, potential corruption, and noncompliance with labor laws and other laws governing employees. Additionally, the human resources and the systems our foreign entities use can be vastly different. Having substantial international operations also increases the complexity of managing our financial reporting and internal controls and procedures, and effective communications across time zones. If we are unable to manage these risks effectively, it could negatively affect our operating performance and our reputation.

The complications associated with the implementation and modification of our globalization strategy may result in a substantial amount of management effort, cost and uncertainty.

We continue to implement and expand our globalization strategy, in which we are moving certain operational resources and capabilities to countries in Asia. As part of this strategy, we opened a manufacturing facility in Singapore in 2010, which is now our primary system manufacturing facility. We also acquired Topwin, a Chinese manufacturer of laser-based systems, in January 2015. In 2016, we opened an applications development center in Korea in order to increase responsiveness and access to local customers.

Our globalization strategy subjects us to a variety of complexities and risks, many of which may divert a substantial amount of management’s time. These risks include:

• designing facilities we can scale for future expansion, replicating current processes and bringing new facilities up to full operation;

• unpredictable costs, redundancy costs and cost overruns for developing facilities and acquiring equipment;

• building local management teams, technical personnel and other staff for functions that we have not previously conducted outside of the United States;

• technical obstacles such as poor production or process yield and loss of quality control during the ramp of a new facility;

• re-qualifications and other procedures that our customers may require;

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• our ability to bring up local suppliers to meet our quality and cycle-time needs;

• our ability to ship timely or incur costs associated with export control restrictions of certain of our technologies;

• our ability to reduce costs in the United States;

• rapidly changing business conditions that may require us to change or abandon plans before we fully implement them; and

• challenges posed by distance and differences in language and culture.

These and other factors could delay the continuing development, expansion and implementation of our strategy, as well as decrease our gross margins, delay shipments and deliveries, cause us to lose sales, require us to write off investments already made, damage our reputation and harm our business, financial condition and results of operations. If we decide to change our globalization strategy, we may incur charges for certain costs incurred. For example, we announced restructuring plans in 2015 and 2017 that led to the impairment of associated leasehold improvements and other assets for several of our facilities. The estimated future liability associated with these lease commitments was accrued net of estimated sublease rental income. However, to the extent the property is vacated or payments are not made by the sublessee, we will incur the full amounts of the ongoing lease obligation.

Our global operations expose us to a greater variety of natural disasters and political and social strife, each of which could directly impact our properties, operations and personnel.

Our business and operating results could be impacted, directly or indirectly, by natural disasters, outbreaks of infectious disease, military action, international conflicts, terrorist activities, civil unrest and associated political instability and policy changes. Many of our facilities, including our Portland, Oregon headquarters, are in areas with known earthquake risk. Some of these events or circumstances may also result in heightened security concerns with respect to domestic and international travel and commerce, which may further affect our business and operating results. In particular, we are subject to the following additional risks:

• recent and potential future tightening of immigration and travel controls may adversely affect the residence status of non-U.S. engineers and other key technical employees in our U.S. facilities, our ability to attract, hire and retain new non-U.S. employees in such facilities or our ability to bring our non-U.S. employees into the United States for business related activities;

• more frequent instances of shipping delays; and

• our customers or suppliers may experience financial difficulties or cease operations.

Our acquisition activities could result in operational disruptions, integration difficulties and other complications.

We may acquire or make significant investments in other businesses with complementary products, services or technologies, such as our January 2015 acquisition of Topwin and our August 2016 acquisition of Visicon. Acquisitions involve numerous risks, many of which are unpredictable and beyond our control, including:

• increased costs in connection with integration of personnel, operations, technologies and products of the acquired businesses;

• difficulties in implementation of our enterprise resource planning (ERP) system into the acquired company’s operations;

• diversion of management’s attention from other operational matters;

• the potential loss of key employees of the acquired company;

• lack of synergy or inability to realize expected synergies resulting from the acquisition;

• the inability to successfully enter new markets expected to result from the acquisition;

• acquired assets becoming impaired as a result of technological advancements or worse-than-expected performance by the acquired company;

• establishing satisfactory internal controls and accounting practices at the acquired company;

• difficulties implementing internal manufacturing processes at the acquired company;

• achieving our anticipated financial and operational performance for the acquired company or the performance of the combined company following the transaction; and

• acquiring unanticipated liabilities for which we will not be indemnified.

Furthermore, the accounting for an acquisition could result in significant charges resulting from amortization or write-off of intangible assets and goodwill we acquire. Our inability to effectively manage these risks or lower levels of revenue, profitability or cash flows for acquired businesses and assets could result in our inability to realize the anticipated benefits of an acquisition on a timely basis, or at all, and materially and adversely affect our business, financial condition and results of operations. In addition, all acquisition transaction costs must be expensed as incurred rather than capitalized, which may have a material adverse effect on our results of operations. For example, in the fourth quarter of 2017 we recognized an impairment charge of $9 million related to goodwill and acquired intangibles.

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The means by which we finance an acquisition may also significantly affect our business or the value of our common stock. If we issue common stock to pay for an acquisition, the ownership percentage of our existing shareholders will be diluted and the value of the shares held by our existing shareholders could decrease. If we use cash on hand to pay for an acquisition, the payment could significantly reduce the cash that would be available to fund our operations or to use for other purposes. If we borrow funds in connection with an acquisition, we would be required to use cash to service the debt and to comply with financial and other covenants, which may reduce our flexibility.

Our business and reputation could be negatively impacted by cyber-attacks and other security breaches.

We electronically store sensitive data, including intellectual property, and our customers’, suppliers’ and business partners’ proprietary business information, and our employees’ personally identifiable information. The secure maintenance and transmission of this information is critical to our operations and business strategy. Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other actions. Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, disrupt our operations and damage our reputation, which could adversely affect our business, revenues and competitive position.

Our success depends, in part, on hiring and retaining key personnel.

Our continued success depends in part upon the services of our key managerial, financial and technical personnel. The loss of key personnel, or our inability to attract, assimilate and retain qualified personnel, could result in the loss of customers, inhibit our ability to operate and grow our business and otherwise have a material adverse effect on our business and results of operations. We have previously had to, and may in the future have to, impose salary reductions on employees during economic downturns in an effort to maintain our financial position. On several occasions in recent years, executives and other employees have received limited or no annual bonuses due to our financial performance relative to the performance parameters in our annual bonus plans. These events may have an adverse effect on employee loyalty and may make it more difficult for us to attract and retain key personnel. Competition for qualified personnel in the industries and locations in which we compete for talent is intense, and we may not be successful in attracting and retaining qualified personnel. We may incur significant costs in our efforts to recruit and retain key personnel, which could affect our financial position and results of operations.

In February 2016, we announced a reorganization and restructuring, which resulted in site closures in Montreal, Canada, Napa and Sunnyvale, California, and reductions in headcount in all functions and geographies. Additionally, we have replaced key executives. These events may adversely disrupt operating activities, may negatively affect employee morale and loyalty, and may make it more difficult to retain or rehire key personnel.

Risks Related to Technology

We may be unable to keep up with rapid technological changes in our markets, which could result in customers purchasing less of our products.

The markets for our products are characterized by rapid technological change and innovation, frequent new product introductions, changes in customer requirements and evolving industry standards. Our future performance will depend on the successful development, introduction and market acceptance of new and enhanced products that address technological changes and the requirements of current and potential customers. The development of new, technologically advanced products is a complex and uncertain process, requiring high levels of innovation and highly skilled engineering and development personnel, as well as the accurate anticipation of technological and market trends. We may not be able to identify, develop, manufacture, market or support new or enhanced products on a timely basis, if at all. If our competitors introduce new or enhanced products, or alternative technologies, our customers may defer, change or cancel orders for our existing products or cease purchasing our products altogether. Further, our new products may not gain timely market acceptance, and we may not be able to respond effectively to product announcements by competitors, technology changes or emerging industry standards. If we are unable to develop new or enhanced products to address customer requirements, technology changes or new industry standards on a timely basis, if our new or enhanced products are not accepted by the market, or if our customers adopt alternative technologies, our business, financial condition and results of operations may be adversely affected due to loss of market share or due to concentrations in impacted areas.

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Our industry requires continued investment in research and development, and we may fail to optimally allocate our resources in this area.

The intense competition in our industry requires us to continue to invest in research and development. If we fail to invest sufficiently in research and development, our products could become obsolete or less attractive to our current and potential customers. Because of our need to maintain our research and development spending levels, our operating margins could be materially decreased if our net sales decline. In addition, our emphasis on research and development and technological innovation could cause our operating costs to increase in the future, and research and development expenses to increase as a percentage of total operating expenses and as a percentage of net sales.

We may be unable to realize growth opportunities if we cannot strengthen our marketing and channel capabilities.

The laser microfabrication industry is comprised of broad sets of markets and applications and presents significant opportunities for growth. In order to access these growth opportunities, we are strengthening our approach from customer-centric to market-based. We have reorganized into a functional structure and hired a Vice President of Marketing to drive improved process and disciplines across the organization. We believe our ability to successfully access and compete in these broader markets partially depends on our successful development of new marketing capabilities, sales and distribution channel access and customer relationships. Our inability to do so would limit our growth opportunities and profitability. In addition, any new strategy may cause disruption and ultimately prove unsuccessful.

Because our products are highly complex, we may experience quality control issues that could result in decreased sales and harm our reputation.

Our products are highly complex, and our extensive product development, manufacturing and testing processes may not be adequate to detect all defects, errors, failures and quality issues that could impact customer satisfaction or result in claims against us. Our strategy to leverage proprietary laser technology to create competitive advantage may increase the probability and impact of this risks. As a result, we may have to replace certain components or provide remediation in response to the discovery of defects in products after they are shipped. The occurrence of any defects, errors, failures or quality issues could result in cancellation of orders, product returns, diversion of our resources, legal actions by our customers and other losses to us or to our customers. These occurrences could also result in the loss of, or delay in, market acceptance of our products, loss of sales and increased expenses and warranty costs.

Risks Related to Legal Matters

Our business depends on proprietary rights that may be difficult to protect, and the loss of any proprietary rights could affect our ability to compete effectively.

Our success depends significantly upon the protection of our proprietary rights. We attempt to protect our proprietary rights through patents, copyrights, trademarks, maintenance of trade secrets and other measures, including entering into confidentiality agreements. Although we incur substantial costs to obtain and maintain patents and to defend our intellectual property rights, we may be unsuccessful in protecting these rights. Additionally, our proprietary rights may not provide the competitive advantages we expect, or other parties may challenge, invalidate or circumvent these rights.

We rely upon the laws of the United States and foreign countries where we develop, manufacture or sell our products to protect our proprietary rights. However, our efforts to protect our intellectual property may be less effective in some foreign countries where intellectual property rights are not as well protected as in the United States. For example, the patent prosecution and enforcement system within China is less mature than the systems in other jurisdictions and therefore we may be limited in our ability to enforce our rights. This disadvantage would likely be compounded by the challenge of any enforcement attempts by us as a foreign entity seeking protection against a Chinese company infringing on our proprietary rights in China. If we fail to adequately protect our intellectual property abroad, it could be easier for our competitors to sell competing products in foreign countries, which could result in reduced sales and gross margins.

Our products may subject us to intellectual property infringement claims that could increase our costs and restrict our ability to do business.

Several of our competitors hold patents covering a variety of technologies, applications and methods of use similar to some of those used in our products. Competitors or others have asserted in the past, and may assert in the future, infringement claims against our customers or us with respect to current or future products or uses. These assertions may result in costly litigation, and if claims of infringement are asserted against our customers, those customers may seek indemnification from us for damages or expenses they incur.

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If we become subject to infringement claims, we will evaluate our position and consider the available alternatives, which may include seeking licenses to use the technology in question. These licenses, however, may not be available on satisfactory terms or at all. If we are not able to negotiate the necessary licenses on commercially reasonable terms, or successfully defend our position, our financial condition and results of operations could be materially and adversely affected.

As a global company, we are subject to adverse fluctuations in our effective taxes due to tax audits, changes in tax law, certain preferential tax concessions, and other regulatory requirements.

Our tax liabilities may fluctuate from one period to the next because we operate in numerous tax jurisdictions with a broad range of income tax rates and regulations. Further, we are also periodically under audit by United States and foreign tax authorities and may have exposure to additional tax liabilities as a result. Although we believe our tax estimates are reasonable, the final outcome of tax audits and the impact of changes in tax laws or the interpretation of tax laws could result in material differences from what is reflected in historical income tax accruals. If additional taxes are assessed as a result of an examination, a material effect on our financial results, tax positions or cash flows could occur in the period or periods in which the determination is made. For example, in 2018 we recorded an expense of $1.7 million for a value added tax and duty audit by the South Korean government. This audit is ongoing as of the third quarter of 2018.

We benefit from a tax incentive program in Singapore pursuant to which we paid no Singapore income tax with respect to our manufacturing income. The incentive period ends June 30, 2021 and is conditioned on achieving certain business and investment levels. If we do not achieve these criteria, we may lose the incentive benefits. We are subject to laws in various jurisdictions related to export/import compliance. Failure to comply or inconsistency in application could have an adverse impact on our ability to timely serve customers and/or results from operations.

We have tax losses and tax credits with remaining lives between 5 and 20 years. Due to a history of losses, as of December 30, 2017, we maintain a full valuation allowance on our deferred tax assets. We intend to continue maintaining a full valuation allowance on our deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. Given our current earnings levels and anticipated future earnings, we believe that there is a reasonable possibility that within the next 12 months, sufficient positive evidence may become available to allow us to reach a conclusion that a significant portion of the valuation allowance will no longer be needed. A release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded. The exact timing and amount of the valuation allowance release are subject to the levels of profitability that we are able to actually achieve and the weight of positive and negative evidence regarding the potential realizability of the deferred balances.

The Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law in the U.S. on December 22, 2017. We continue to evaluate the impact the new legislation will have on the Condensed Consolidated Financial Statements. While not limited to the following, we believe the following risks exist:

– Rule-making and additional technical guidance from the Department of Treasury, the FASB, and other relevant rule-making bodies continues to evolve and is likely to impact the treatment of the impact of the Tax Act.

– The Company’s assessment remains ongoing; therefore, the final impact of the Tax Reform may differ due to changes in interpretations, assumptions and we are not able to fully quantify the impact on the Condensed Consolidated Financial Statements at this time.

– Reaction to the new regulations by states and international trading partners is not yet clear, and could have a material impact on our business and results from operations.

The change in statutory tax rates in the U.S. also impacts the gross values of the deferred tax assets before consideration of the valuation allowance, and assuming a release of the valuation allowance in the future, or utilization of these tax assets, the associated assets would be realized at the new, lower rate.

Risks Related to Financial Matters

If we cannot meet our liquidity needs, we may not have sufficient working capital to continue our business operations.

We may require greater working capital to operate than similar size businesses in many other industries. At December 30, 2017, we had working capital of $169.2 million, including $99.1 million in cash, cash equivalents and short-term investments. Our operating cash flows were negative for most quarters since September 2013. If we have continued decreases in cash, increases in production levels, an increase in slow-moving or obsolete inventory, or a combination of these circumstances, among others, we may need additional working capital for receivables and inventory. In addition, most of our contracts to acquire inventory represent purchase commitments. As a result, if we experience lower than anticipated demand for our products, in many cases we could not avoid the cost of purchasing the associated inventory.

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While we have a credit facility in place, if we fail to meet the covenants in our credit facility or our lenders fail to fund, access to the facility may be limited or the facility may become unavailable altogether. Losses, such as those experienced in the second and third quarters of 2017, negatively impact our ability to maintain compliance with these covenants.

We have initiated restructuring activities, and as a result we have incurred and will continue to incur costs, some of which require cash outlays. To the extent actual costs exceed estimated costs, liquidity and results of operations could be materially and adversely affected.

If we have a material decrease in working capital, or require additional working capital to operate or require additional liquidity, and we do not have available credit or other funds and are unable to obtain financing on acceptable terms, or at all, our business and our ability to fully fund operations could be materially and adversely affected.

Our existing indebtedness may limit our business opportunities.

In the fourth quarter of 2017, we incurred $14.0 million of long-term indebtedness. This indebtedness is secured by our headquarters in Portland, Oregon. We also have a credit facility under which we may borrow up to a maximum of $30 million, subject to meeting certain availability requirements. This credit facility is secured by our non-real estate assets and nothing was outstanding under this agreement at December 30, 2017. We are required to comply with certain financial covenants under the debt agreements, including maintaining a certain level of earnings, a stated debt service coverage ratio and a specified level of certain types of liquid assets, as well as limiting our discretion to make capital expenditures or acquisitions. If we are unable to comply with the covenants in our debt agreements or make payments when due and the lender declares an event of default, the outstanding indebtedness would likely be immediately due and owing and the lenders could foreclose upon the collateral securing the debt.

Unfavorable currency exchange rate fluctuations could reduce our net sales abroad or cause us to incur losses on our forward exchange contracts.

Unfavorable currency fluctuations could require us to increase prices to foreign customers, which could result in lower net sales by us to those customers. Alternatively, if we do not adjust the prices for our products in response to unfavorable currency fluctuations, we could be forced to sell our products at a lower margin or at a net loss. A weak dollar may lead to impairment of inventories if costs begin to exceed selling prices as translated to the functional currency. In addition, some of our foreign sales are denominated in the currency of the country in which these products are sold and that currency could be less valuable at the time of receipt as a result of exchange rate fluctuations. From time to time, we enter into forward exchange contracts to hedge the value of accounts receivable primarily denominated in euros and other currencies. However, our efforts may not be adequate to protect us against significant currency fluctuations and such efforts may expose us to additional exchange rate risks, which could adversely affect our results of operations.

Impairment of Goodwill, Intangible and Long-Lived Assets

We held a total of $5.5 million in acquired intangible assets, net of accumulated amortization, and $2.6 million in goodwill at December 30, 2017. Consistent with the impairment recognized in the fourth quarter of 2017, events may occur or circumstances change such that the carrying value is not recoverable or it becomes more likely than not that the fair value of long-lived assets is reduced below the carrying value of the reporting unit, which could result in a further write-down of the fair-value of our assets. For example, the performance of our Topwin reporting unit did not meet expectations and, as a result, an impairment of goodwill and intangibles associated with that reporting unit was triggered in 2017, impacting consolidated earnings.

In addition, certain of our long-lived assets such as leasehold improvements, machinery, equipment, and loan and demo assets may experience impairment as a result of events such as the closure of sites, introduction of new products, decisions to exit certain products or markets, and changes in technology or changes in customer demand patterns. We depreciate long-lived assets and amortize intangible assets at levels we believe are adequate; however, an impairment of these assets could have a material adverse impact on our business, financial condition and results of operations. For example, due to the 2017 restructuring action, $3.0 million of leasehold improvements and related assets were impaired, impacting consolidated earnings.

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An impairment of our investments could reduce our available liquidity.

Our investment portfolio is primarily comprised of commercial paper, debt securities issued by U.S. governmental agencies and money market securities. These investments are intended to be highly liquid and low risk. If the markets for these securities deteriorated for any reason, including as a result of a downgrade in the credit rating of U.S. government securities, the liquidity and value of these investments could be negatively affected, which could result in impairment charges and a material impact to our financial condition and results of operations. In addition, if our investments become illiquid or materially decrease in value, we may not have access to sufficient cash to meet or working capital and liquidity needs.

If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud and our stock price may be adversely affected.

Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. If we cannot provide reliable financial reports or prevent fraud, our operating results could be harmed.

Although we are committed to continue to improve our internal control processes and we will continue to diligently and vigorously review our internal control over financial reporting in order to ensure compliance with the Section 404 requirements, any control system, regardless of how well designed, operated and evaluated, can provide only reasonable, not absolute, assurance that its objectives will be met. Therefore, we cannot be certain that in the future additional material weaknesses or significant deficiencies will not exist or otherwise be discovered. If such weaknesses or deficiencies occur, they could result in misstatements of our results of operations, additional restatements of our consolidated financial statements, a decline in our stock price and investor confidence, or other material effects on our business, reputation, financial condition or liquidity.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not Applicable.

Item 4. Mine Safety Disclosures

Not Applicable.

39

Item 5. Other Information

Not Applicable.

Item 6. Exhibits

This list is intended to constitute the exhibit index.

3.1	Third Restated Articles of Incorporation, as amended. Incorporated by reference to Exhibit 3.1 of the Company's Annual Report on Form 10-K, filed on June 15, 2010.
3.2	2009 Amended and Restated Bylaws, as amended. Incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on March 26, 2015
10.1	Separation and Release Agreement, dated December 23, 2017, between the Company and Paul Oldham.
10.2	Form of Change in Control Agreement with the Company’s executive officers other than the Chief Executive Officer.
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer 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 Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document *
101.SCH	XBRL Taxonomy Extension Schema Document *
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document *
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document *
101.LAB	XBRL Taxonomy Extension Label Linkbase Document *
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document *

* Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections.

40

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

Date:	February 6, 2018	ELECTRO SCIENTIFIC INDUSTRIES, INC.
		By:	/s/    Michael D. Burger
			Michael D. Burger
			President and Chief Executive Officer
			(Principal Executive Officer)
		By:	/s/    Allen Muhich
			Allen Muhich
			Vice President, Chief Financial Officer and Corporate Secretary
			(Principal Financial Officer)

41

EX-10.1

SEPARATION AND RELEASE AGREEMENT

This Agreement is entered into by and between Electro Scientific Industries, Inc. (“ESI”), and Paul R. Oldham (“Employee”) with respect to the following facts:

A.    Employee's employment with ESI terminates on December 4, 2017.

B.ESI and Employee desire to enter into this Agreement regarding Employee's termination. Employee agrees to reaffirm this Agreement on the last day of employment.

The parties agree as follows:

1. Wages. On Employee’s last day of employment, Employee received all earned wages and, a pro-rated portion of your special bonus in the amount of Seventy-Five Thousand dollars ($75,000) less applicable witholdings.

2.    Separation Pay. In consideration of Employee signing and abiding by the covenants and releases given herein, ESI will pay Employee total of Six Hundred and One-Thousand, Eight-Hundred and Twenty-Two dollars ($601,822), less applicable withholdings (“Separation Pay”). This sum includes an amount equal to six (6) months’ family Medical and Dental COBRA payments.

3.    Resignation. ESI agrees to allow Employee to resign from his employment with ESI. Employee acknowledges that his employment with Company has ended.

4.    Effective Date. The Effective Date of this Agreement shall be the 8th day after Employee properly signs it, as described in Paragraph 9 below.

6.    Confidential Information; Return of Property; Non-disparagement and Cooperation. Employee agrees not to use or disclose confidential, proprietary or trade secret information learned while an employee of ESI or its predecessors, including the terms of this Agreement, and covenants not to breach that duty. Confidential, proprietary, and trade secret information may include manufacturing processes, business plans, customer lists, drawings, documents, reports, facilities, formulas, computer data, computer programs (including algorithms, flowcharts, source code, object code, and firmware). This Agreement not to disclose confidential information is consistent with the ESI Employee Confidentiality and Assignment Agreement (“Confidentiality Agreement”), which, if signed by Employee, continues to apply after employment has ended. Employee agrees to return any and all ESI property and/or information in Employee’s possession. Both the Company and, the Employee agree not to disparage or make false, adverse or derogatory remarks about ESI or the Employee. Employee also agrees to fully cooperate and be reasonably available to ESI in any pending or future dispute or proceeding in which Employee may have knowledge of potentially relevant information.

7.    General Release. Employee acknowledges that Employee would not be entitled to receive the Separation Pay provided for herein absent Employee’s execution of and

compliance with this Agreement. In consideration of the Separation Pay and other benefits, Employee, individually and on behalf of Employee’s spouse, domestic partner, heirs and assigns (as applicable), to the fullest extent permitted under applicable law, unconditionally releases and discharges ESI, its subsidiaries, any related corporations and/or entities and each entity’s respective directors, officers, shareholders, employees, agents, successors and assigns, in their individual and representative capacities (collectively “Releasees”), from any and all known or unknown liability, damages claims, causes of action or suits of any type related directly or indirectly to Employee's employment with ESI, and the termination of Employee's employment with ESI, including claims under any common law theories, including but not limited to, breach of contract or tort or tort-like theories and under any local, state or federal, constitutional, civil rights, labor, and employment laws, including but not limited to, Employee Retirement Income Security Act (ERISA), Title VII of the Civil Rights Act of 1964, the Post Civil War Civil Rights Acts (42 USC §§ 1981‑1988), the Civil Rights Act of 1991, the Equal Pay Act, Older Workers’ Benefit Protection Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Worker Adjustment and Retraining Notification Act, the Rehabilitation Act of 1973, the Uniformed Services Employment and Reemployment Rights Act, the Fair Labor Standards Act, Executive Order 11246, the Sarbanes-Oxley Act, and the Family and Medical Leave Act, all as amended, including any regulations or guidelines thereunder.

This Release shall not affect any rights that Employee may have under health insurance plans, under the 401(k) plan or the non-qualified deferred compensation plan maintained by the Company, for unemployment or workers’ compensation benefits.

8.    Knowing and Voluntary Release of Rights Under the Older Workers’ Benefit Protection Act (the “Act”). Employee acknowledges that: (a) Employee has been encouraged in writing to consult with an attorney prior to executing this Agreement; (b) Employee has read the release and understands the effect of Employee’s release and that Employee is releasing legal rights; (c) Employee is aware of certain rights to which Employee may be entitled under certain statutes and laws identified in the release; (d) Employee has had adequate time to consider this Agreement; (e) Employee understands the Agreement and agrees to be bound by its terms; and (f) as consideration for executing this Agreement, Employee has received additional benefits and compensation of value to which Employee would not otherwise be entitled.

9.    Time for Consideration of Offer. Employee acknowledges that the Company provided Employee with this Agreement on or before December 4, 2017, and that the offer provided Employee with a period of twenty-one (21) days from the date of receipt to consider the offer and this Agreement (the "consideration period"). After Employee executes this Agreement, Employee has a period of seven (7) days in which Employee may revoke this Agreement in writing delivered to Tracey Jerijervi, Vice President of Human Resources or her designee and void Employee’s release of claims. In the event Employee has not signed and reaffirmed this Agreement by December 25, 2017, or if Employee timely revokes it, this offer will expire and Employee will not be entitled to the Separation Pay offered under this Agreement. If Employee reaffirms this Agreement on December 25, 2017, it will become effective and irrevocable on the day Employee reaffirms it (the “Effective Date”) and only then will Employee be entitled to the Separation Pay and severance benefits offered herein.

2

10.    General Provisions.

a.    Employee acknowledges that Employee has been given the opportunity to consult with legal counsel with respect to the matters referenced in this Agreement, and that Employee has obtained and considered the advice of legal counsel as Employee deems necessary or appropriate.

b.    This Agreement and the Confidentiality Agreement contain the entire agreement between Employee and ESI and there have been no promises, inducements or agreements not expressed in this Agreement.

c.    The provisions of this Agreement shall be considered severable, such that if any provision or part thereof shall at any time be held invalid under any law or ruling, any and all such other provision(s) or part(s) shall remain in full force and effect and continue to be enforceable.

d.    This Agreement shall be interpreted, construed, governed and enforced in accordance with the laws of the State of Oregon.

e.    This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns.

f.    Nothing in this Agreement shall be construed as an admission of any liability or any wrongdoing by either party to this Agreement.

The undersigned have executed this Agreement on the dates shown below.

Dated: ____________, 2017        

Paul R. Oldham

Dated: December 4, 2017        ELECTRO SCIENTIFIC INDUSTRIES, INC.

By:

Tracey Jerijervi

Vice President, Human Resources

3

EX-10.2

ELECTRO SCIENTIFIC INDUSTRIES, INC.

CHANGE IN CONTROL AGREEMENT

This Change in Control Agreement (the “Agreement”) is made and entered into by and between ____________ (“Executive”) and Electro Scientific Industries, Inc., an Oregon corporation (the “Company”), effective as of _____________ (the “Effective Date”) and states in its entirety the Change in Control Agreement between Executive and the Company dated ____________.

RECITALS

1.The Compensation Committee (the “Committee”) of the Company’s Board of Directors (the “Board”) believes that it is in the best interests of the Company and its stockholders (i) to assure that the Company will have the continued dedication and objectivity of Executive, notwithstanding the possibility, threat, or occurrence of a Change in Control and (ii) to provide Executive with an incentive to continue Executive’s employment prior to a Change in Control and to motivate Executive to maximize the value of the Company upon a Change in Control for the benefit of its stockholders.

2.Certain capitalized terms used in the Agreement are defined in Section 6 below.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as follows:

1.Term of Agreement. This Agreement will have an initial term of two years commencing on the Effective Date (the “Initial Term”). On the second anniversary of the Effective Date and each anniversary thereafter, this Agreement will renew automatically for an additional one year term (an “Additional Term”), unless either party provides the other party with written notice of non-renewal at least 90 days prior to the date of automatic renewal. If a Change in Control occurs when there are fewer than 24 months remaining during the Initial Term or an Additional Term, the term of this Agreement will extend automatically through the date that is 24 months following the effective date of the Change in Control. If Executive becomes entitled to benefits under Section 3 during the term of this Agreement, the Agreement will not terminate until all of the obligations of the parties hereto with respect to this Agreement have been satisfied.

2.At-Will Employment. The Company and Executive acknowledge that Executive’s employment is and will continue to be at-will, as defined under applicable law. As an at-will employee, either the Company or the Executive may terminate the employment relationship at any time, with or without Cause.

3.Severance Benefits.

(a)Termination without Cause or Resignation for Good Reason in Connection with a Change in Control. If the Company terminates Executive’s employment with the Company without Cause (excluding death or Disability) or if Executive resigns from such employment for Good Reason, and, in each case, such termination occurs during the Change in Control Period, then subject to Section 4, Executive will receive the following:

(i)Accrued Compensation. The Company will pay Executive all expense reimbursements, wages, and other benefits due to Executive under any Company-provided plans, policies, and arrangements.

(ii)Severance Payment. Executive will receive an amount in cash (less applicable withholding taxes) equal to 12 months of Executive’s annual base salary as in effect immediately prior to Executive’s termination date, with one-half of such amount payable in six monthly installments as a salary continuation at the existing rate during the six month period following the date of termination (with the first installment paid on the last day of the month in which the date of termination occurs and each later installment paid on the last day of each successive month) and the balance paid in a lump sum on the date that is six months after the date of termination.

(iii)Bonus Payment. Executive will receive a lump-sum payment equal to 100% of Executive’s target bonus as in effect for the fiscal year in which the termination of employment occurs. Payment will be made on the first Company payroll following the Release Deadline, subject to Section 4(c).

(iv)Continuation Coverage. If Executive elects continuation coverage pursuant to COBRA within the time period prescribed pursuant to COBRA for Executive and Executive’s eligible dependents, then the Company will reimburse Executive for the COBRA premiums for such coverage (at the coverage levels in effect immediately prior to Executive’s termination) until the earlier of (A) a period of 12 months from the date of termination or (B) the date upon which Executive and/or Executive’s eligible dependents become covered under similar plans. The reimbursements will be made by the Company to Executive consistent with the Company’s normal expense reimbursement policy.

(b)Exclusive Remedy. In the event of a termination of Executive’s employment as set forth in Section 3(a) of this Agreement, the provisions of Section 3 and the change in control provisions in any equity award agreements between Executive and the Company are intended to

be and are exclusive and in lieu of any other rights or remedies to which Executive or the Company otherwise may be entitled, whether at law, tort or contract, in equity, or under this Agreement (other than the payment of accrued but unpaid wages, as required by law, and any unreimbursed reimbursable expenses). Executive will be entitled to no benefits, compensation or other payments or rights upon a termination of employment other than those benefits expressly set forth in Section 3 of this Agreement and in the change in control provisions in any equity award agreements between Executive and the Company.

4.Conditions to Receipt of Severance.

(a)Release of Claims Agreement. The receipt of any severance payments or benefits (other than the accrued benefits set forth in either Sections 3(a)(i)) pursuant to this Agreement is subject to Executive signing and not revoking the Company’s customary separation and release of claims agreement (the “Release”), which must become effective and irrevocable no later than the 60th day following Executive’s termination of employment (the “Release Deadline”). If the Release does not become effective and irrevocable by the Release Deadline, Executive will forfeit any right to severance payments or benefits under this Agreement. In no event will severance payments or benefits be paid or provided until the Release actually becomes effective and irrevocable.

(b)Confidential Information and Invention Assignment Agreement and Restrictive Covenants. Executive’s receipt of any payments or benefits under Section 3 (other than the accrued benefits set forth in either Section 3(a)(i) will be subject to Executive continuing to comply with the terms of the Confidential Information and Invention Assignment Agreement between the Company and Executive as such agreement may be amended and/or superseded from time to time (the “Confidential Information Agreement”), and the Release.

(c)Section 409A.

(i)Notwithstanding anything to the contrary in this Agreement, no severance pay or benefits to be paid or provided to Executive, if any, pursuant to this Agreement that, when considered together with any other severance payments or separation benefits, are considered deferred compensation under Section 409A of the Code, and the final regulations and any guidance promulgated thereunder (“Section 409A”) (together, the “Deferred Payments”) will be paid or otherwise provided until Executive has a “separation from service” within the meaning of Section 409A. Similarly, no severance payable to Executive, if any, pursuant to this Agreement that otherwise would be exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(9) will be payable until Executive has a “separation from service” within the meaning of Section 409A.

(ii)It is intended that none of the severance payments under this Agreement will constitute Deferred Payments but rather will be exempt from Section 409A as a payment that would fall within the “short-term deferral period” as described in Section 4(c)(iv) below or resulting from an involuntary separation from service as described in Section 4(c)(v) below.

(iii)Notwithstanding anything to the contrary in this Agreement, if Executive is a “specified employee” within the meaning of Section 409A at the time of Executive’s termination (other than due to death), then the Deferred Payments, if any, that are payable within the first six months following Executive’s separation from service, will become payable on the first payroll date that occurs on or after the date six months and one day following the date of Executive’s separation from service. All subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if Executive dies following Executive’s separation from service, but before the six month anniversary of the separation from service, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of Executive’s death and all other Deferred Payments will be payable in accordance with the payment schedule applicable to each payment or benefit. Each payment and benefit payable under this Agreement is intended to constitute a separate payment under Section 1.409A-2(b)(2) of the Treasury Regulations.

(iv)Any amount paid under this Agreement that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute Deferred Payments for purposes of clause (i) above.

(v)Any amount paid under this Agreement that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit (as defined below) will not constitute Deferred Payments for purposes of clause (i) above.

(vi)The foregoing provisions are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. The Company and Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition before actual payment to Executive under Section 409A.

5.Limitation on Payments. In the event that the severance and other benefits provided for in this Agreement or otherwise payable to Executive (i) constitute “parachute payments” within the

meaning of Section 280G of the Code, and (ii) but for this Section 5, would be subject to the excise tax imposed by Section 4999 of the Code, then Executive’s benefits under Section 3 will be either:

(a) delivered in full, or

(b)delivered as to such lesser extent which would result in no portion of such benefits being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999 of the Code, results in the receipt by Executive on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code. If a reduction in severance and other benefits constituting “parachute payments” is necessary so that benefits are delivered to a lesser extent, reduction will occur in the following order: (i) reduction of cash payments; (ii) cancellation of awards granted “contingent on a change in ownership or control” (within the meaning of Code Section 280G), (iii) cancellation of accelerated vesting of equity awards; (iv) reduction of employee benefits. In the event that acceleration of vesting of equity award compensation is to be reduced, such acceleration of vesting will be cancelled in the reverse order of the date of grant of Executive’s equity awards.

Unless the Company and Executive otherwise agree in writing, any determination required under this Section 5 will be made in writing by the Company’s independent public accountants immediately prior to a Change in Control or such other person or entity to which the parties mutually agree (the “Firm”), whose determination will be conclusive and binding upon Executive and the Company. For purposes of making the calculations required by this Section 5, the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Executive will furnish to the Firm such information and documents as the Firm may reasonably request in order to make a determination under this Section. The Company will bear all costs the Firm may incur in connection with any calculations contemplated by this Section 5.

6.Definition of Terms. The following terms referred to in this Agreement will have the following meanings:

(a)“Cause” means:

(i)the willful and continued failure to perform substantially Executive’s reasonably assigned duties with the Company (or its successor) (other than any such failure resulting from incapacity due to physical or mental illness) after a demand for substantial performance is delivered to Executive by the Company (or its successor) which specifically identifies the manner in which the Company (or its successor) believes that Executive has not substantially performed Executive’s duties;

(ii)the willful engagement in illegal conduct which is materially and demonstrably injurious to the Company (or its successor); or

(iii)the commission of an act by Executive, or the failure of Executive to act, which constitutes gross negligence or gross misconduct.

No act, or failure to act, shall be considered “willful” if the Executive reasonably believed that the action or omission was in, or not opposed to, the best interests of the Company (or its successor).

(b)“Change in Control” means the occurrence of any of the following events:

(i)At any time during a period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of the Company (“Incumbent Directors”) shall cease for any reason to constitute at least a majority thereof; provided, however, that the term “Incumbent Director” shall also include each new director elected during such two-year period whose nomination or election was approved by two-thirds of the Incumbent Directors then in office;

(ii)Any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) shall, as a result of a tender or exchange offer, open market purchases or privately negotiated purchases from anyone other than the Company, have become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, of more than fifty percent (50%) of the then outstanding Common Stock of the Company;

(iii)A consolidation, merger or plan of exchange involving the Company (“Merger”) as a result of which the holders of outstanding securities of the Company ordinarily having the right to vote for the election of directors (“Voting Securities”) immediately prior to the Merger do not continue to hold at least 50% of the combined voting power of the outstanding Voting Securities of the surviving corporation or a parent corporation of the surviving corporation immediately after the Merger, disregarding any Voting Securities issued to or retained by such holders in respect of securities of any other party to the Merger; or

(iv)A sale, lease, exchange, or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company.

(c)“Change in Control Period” means the period beginning on and ending 24 months following, a Change in Control.

(d)“Code” means the Internal Revenue Code of 1986, as amended.

(e)“Disability” means that Executive has been unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.

(f)“Good Reason” means Executive’s voluntary termination, within 30 days following the expiration of any Company cure period (discussed below) following the occurrence of one or more of the following, without Executive’s consent:

(i)the assignment of a different title, job or responsibilities that results in a substantial reduction in the duties of the Executive after the Change in Control when compared to the Executive’s duties with respect to the Company’s operations prior to the Change in Control; provided that any change made solely as the result of the Company becoming a subsidiary or business unit of a larger company in a Change in Control shall not constitute Good Reason unless Executive’s new duties are substantially reduced from his or her prior duties;

(ii)a reduction in Executive’s target bonus or base salary;

(iii)the Company’s requiring Executive to be based more than 50 miles from the principal office at in which Executive is based immediately prior to the Change in Control, except for reasonably required travel on the Company’s business; or

(iv)the failure by any successor to the Company to expressly assume this Agreement or any obligation under this Agreement.

Executive may not resign for Good Reason without first providing the Company with written notice within 90 days of the initial existence of the condition that Executive believes constitutes Good Reason specifically identifying the acts or omissions constituting the grounds for Good Reason and a reasonable cure period of not less than 30 days following the date of such notice.

For purposes of the “Good Reason” definition, the term “Company” will be interpreted to include any subsidiary, parent, affiliate or successor thereto, if applicable.

(g)“Section 409A Limit” means two times the lesser of: (i) Executive’s annualized compensation based upon the annual rate of pay paid to Executive during the Executive’s taxable year preceding the Executive’s taxable year of Executive’s termination of employment as determined under, and with such adjustments as are set forth in, Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Executive’s employment is terminated.

7.Successors.

(a)The Company’s Successors. The Company shall require any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets to assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term “Company” will include any successor to the Company’s business and/or assets which executes and delivers the assumption agreement required in this Section 7(a) or which becomes bound by the terms of this Agreement by operation of law.

(b)Executive’s Successors. The terms of this Agreement and all rights of Executive hereunder will inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

8.Notice.

(a)General. Notices and all other communications contemplated by this Agreement will be in writing and will be deemed to have been duly given when sent electronically or personally delivered when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid or when delivered by a private courier service such as UPS, DHL or Federal Express that has tracking capability. In the case of Executive, notices will be sent to the e-mail address or addressed to Executive at the home address, in either case which Executive most recently communicated to the Company in writing. In the case of the Company, electronic notices will be sent to the e-mail addresses of the Chief Executive Officer and mailed notices will be addressed to its corporate headquarters, and all notices will be directed to the attention of its Chief Executive Officer.

(b)Notice of Termination. Any termination by the Company for Cause or by Executive for Good Reason will be communicated by a notice of termination to the other party hereto given in accordance with Section 8(a) of this Agreement. Such notice will indicate the specific termination provision in this Agreement relied upon, will set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and will specify the termination date (which will be not more than 90 days after the giving of such notice).

9.Resignation. Upon the termination of Executive’s employment for any reason, Executive will be deemed to have resigned from all officer and/or director positions held at the Company and its affiliates voluntarily, without any further required action by Executive, as of the end of Executive’s

employment and Executive, at the Board’s request, will execute any documents reasonably necessary to reflect Executive’s resignation.

10.Miscellaneous Provisions.

(a)No Duty to Mitigate. Executive will not be required to mitigate the amount of any payment contemplated by this Agreement, nor will any such payment be reduced by any earnings that Executive may receive from any other source (except to the extent provided in Section 3(a)((iv) regarding COBRA).

(b)Waiver. No provision of this Agreement will be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company (other than Executive). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party will be considered a waiver of any other condition or provision or of the same condition or provision at another time.

(c)Headings. All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.

(d)Entire Agreement. This Agreement, together with the Confidential Information Agreement and any equity award agreements between Executives and the Company containing change in control provisions, constitutes the entire agreement of the parties hereto and supersedes in their entirety all prior representations, understandings, undertakings or agreements (whether oral or written and whether expressed or implied) of the parties with respect to the subject matter hereof, including, but not limited to, any rights to any severance and/or change in control benefits set forth in Executive’s original offer letter or any prior change in control agreement. No waiver, alteration, or modification of any of the provisions of this Agreement will be binding unless it is in a writing that specifically mentions this Agreement and that is signed by Executive and by an authorized officer of the Company (other than Executive).

(e)Choice of Law; Venue. The validity, interpretation, construction and performance of this Agreement will be governed by the laws of the State of Oregon (with the exception of its conflict of laws provisions). Any claims or legal actions by one party against the other arising out of the relationship between the parties contemplated herein (whether or not arising under this Agreement) will be commenced or maintained in any state or federal court located in Multnomah County.

(f)Severability. The invalidity or unenforceability of any provision or provisions of this Agreement will not affect the validity or enforceability of any other provision hereof, which will remain in full force and effect.

(g)Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable income, employment and other taxes.

(h)Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

[Signature Page to Follow]

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year set forth below.

COMPANY	ELECTRO SCIENTIFIC INDUSTRIES, INC.
	By:
	Title:
	Date:
EXECUTIVE	By:
	Date:

[signature page of the Amended and Restated Change in Control Agreement]

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, Michael D. Burger, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Electro Scientific Industries, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 6, 2018

/s/ Michael D. Burger

Michael D. Burger

President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, Allen Muhich, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Electro Scientific Industries, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 6, 2018

/s/ Allen Muhich

Allen Muhich

Vice President, Chief Financial Officer and

Corporate Secretary

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

In connection with this quarterly report on Form 10-Q of Electro Scientific Industries, Inc. (the Company) for the quarterly period ended December 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Michael D. Burger, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Michael D. Burger

Michael D. Burger

President and Chief Executive Officer

February 6, 2018

This certification is made solely for the purpose of 18 U.S.C. Section 1350, and not for any other purpose. A signed original of this written statement required by Section 906 has been provided to Electro Scientific Industries, Inc. and will be retained by Electro Scientific Industries, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

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

In connection with this quarterly report on Form 10-Q of Electro Scientific Industries, Inc. (the Company) for the quarterly period ended December 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Allen Muhich, Vice President of Administration, Chief Financial Officer, and Corporate Secretary of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Allen Muhich

Allen Muhich

Vice President, Chief Financial Officer and

Corporate Secretary

February 6, 2018

This certification is made solely for the purpose of 18 U.S.C. Section 1350, and not for any other purpose. A signed original of this written statement required by Section 906 has been provided to Electro Scientific Industries, Inc. and will be retained by Electro Scientific Industries, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

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Document and Entity Information - shares	9 Months Ended
	Dec. 30, 2017	Feb. 02, 2018
Document And Entity Information [Abstract]
Entity Common Stock, Shares Outstanding		33,552,089
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 30, 2017
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Entity Registrant Name	ELECTRO SCIENTIFIC INDUSTRIES INC
Entity Central Index Key	0000726514
Current Fiscal Year End Date	--03-31
Entity Well-know Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 30, 2017	Apr. 01, 2017
Current assets:
Cash and Cash Equivalents, at Carrying Value	$ 62,251	$ 56,642
Short-term investments	36,824	5,743
Accounts Receivable, Net, Current	75,674	40,494
Inventories	74,502	58,942
Shipped systems pending acceptance	5,780	5,713
Other current assets	5,116	6,180
Total current assets	260,147	173,714
Non-current assets:
Property, plant and equipment, net	19,732	21,619
Goodwill	2,626	3,027
Acquired intangible assets, net	5,525	6,564
Income Taxes Receivable, Noncurrent	935	0
Other assets	17,339	19,821
Total assets	306,304	224,745
Current liabilities:
Accounts payable	38,577	21,213
Accrued liabilities	40,391	22,186
Deferred revenue	11,982	14,712
Total current liabilities	90,950	58,111
Long-term Debt	12,875	13,489
Non-current liabilities:
Non-current income taxes payable	1,587	1,036
Liabilities, Other than Long-term Debt, Noncurrent	10,085	7,578
Liabilities	115,497	80,214
Commitments and Contingencies
Shareholders' equity:
Preferred stock, without par value	0	0
Common stock, without par value	211,330	207,152
Retained earnings	(20,273)	(61,407)
Accumulated other comprehensive income	(250)	(1,214)
Total shareholders' equity	190,807	144,531
Total liabilities and shareholders' equity	$ 306,304	$ 224,745

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 30, 2017	Apr. 01, 2017
Statement of Financial Position [Abstract]
Trade receivables, allowances	$ 658	$ 603
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	81,728	112,075
Finite-Lived Intangible Assets, Accumulated Amortization	$ 23,035	$ 21,994
Preferred stock, without par value	$ 0	$ 0
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Common stock, without par value	$ 0	$ 0
Common stock, shares authorized	100,000,000	100,000,000
Common stock, issued	34,309,000	33,260,000
Common stock, outstanding	34,309,000	33,260,000

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CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 30, 2017	Dec. 31, 2016	Dec. 30, 2017	Dec. 31, 2016
Sales Revenue, Goods, Net	$ 99,418	$ 25,427	$ 221,827	$ 85,069
Sales Revenue, Services, Net	11,422	8,352	32,664	26,036
Net sales	110,840	33,779	254,491	111,105
Cost of Goods Sold	52,502	17,283	132,107	53,851
Cost of Services	5,182	5,048	16,276	14,018
Cost of sales	57,684	22,331	148,383	67,869
Gross profit	53,156	11,448	106,108	43,236
Operating expenses:
Selling, service and administration	11,040	13,280	35,496	38,917
Research, development and engineering	8,165	7,868	25,373	23,258
Business Combination, Integration Related Costs	0	31	0	366
Restructuring Costs	706	321	4,079	321
Net operating expenses	19,911	21,500	64,948	62,862
Operating (loss) income	33,245	(10,052)	41,160	(19,626)
Non-operating (expense) income:
Interest and other (expense) income, net	789	34	376	162
Other Nonoperating Income (Expense)	789	34	376	162
Income (loss) before income taxes	34,034	(10,018)	41,536	(19,464)
Provision for (benefit from) income taxes	61	(325)	401	22
Net (loss) income	$ 33,973	$ (9,693)	$ 41,135	$ (19,486)
Net (loss) income per share - basic	$ 0.99	$ (0.29)	$ 1.22	$ (0.60)
Net (loss) income per share - diluted	$ 0.94	$ (0.29)	$ 1.16	$ (0.60)
Weighted average number of shares - basic	34,224	32,919	33,839	32,379
Weighted average number of shares - diluted	36,010	32,919	35,562	32,379

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS Statement - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 30, 2017	Dec. 31, 2016	Dec. 30, 2017	Dec. 31, 2016
Net (loss) income	$ 33,973	$ (9,693)	$ 41,135	$ (19,486)
Foreign currency translation adjustment, net of taxes	581	(745)	969	(884)
Accumulated other comprehensive loss related to benefit plan obligations, net of taxes	4	5	13	14
Net unrealized (loss) gain on available-for-sale securities, net of taxes	(17)	(2)	(18)	(6)
Other Comprehensive Income (Loss), Net of Tax	568	(742)	964	(876)
Comprehensive (loss) income	$ 34,541	$ (10,435)	$ 42,099	$ (20,362)

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 30, 2017	Dec. 31, 2016	Dec. 31, 2016
Foreign currency translation adjustment, taxes	$ 8	$ 0	$ 0
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Tax	(2)	(5)	(7)
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Tax	$ 0	$ 0	$ 0

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Dec. 30, 2017	Dec. 31, 2016
Repayments of Long-term Debt	$ (321)	$ 0
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income	41,135	(19,486)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization	5,508	5,424
Amortization of acquired intangible assets	1,015	832
Share-based compensation expense	3,510	5,118
Provision for Doubtful Accounts	603	(341)
Gain (Loss) on Sale of Properties	(917)	0
Gain (Loss) on Disposition of Assets	101	52
Inventory Write-down	0	946
Restructuring Charges	13,858	0
Decrease (increase) in deferred income taxes	2	37
Changes in operating accounts, net of acquisitions:
Decrease (increase) in trade receivables, net	(35,271)	15,258
Decrease (increase) in inventories	(24,402)	(3,259)
Decrease (increase) in shipped systems pending acceptance	(67)	(2,802)
Decrease (increase) in other current assets	1,489	(738)
Increase (decrease) in accounts payable and accrued liabilities	36,963	(5,189)
Increase (decrease) in deferred revenue	(2,730)	4,449
Net cash (used in) provided by operating activities	40,797	301
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments	(48,668)	(331,343)
Proceeds from sales and maturities of investments	17,034	339,691
Purchase of property, plant and equipment	(3,116)	(3,408)
Decrease (increase) in other assets	(4,646)	(120)
Net cash (used in) provided by investing activities	(36,360)	2,817
Proceeds from Sale of Property, Plant, and Equipment	37	7
Proceeds from Divestiture of Businesses	2,999	0
Payments to Acquire Businesses, Net of Cash Acquired	0	2,010
CASH FLOWS FROM FINANCING ACTIVITIES
Payments Related to Tax Withholding for Share-based Compensation	(1,696)	(801)
Proceeds from Issuance of Common Stock	2,624	1,043
Net cash (used in) provided by financing activities	607	242
Effect of exchange rate changes on cash	562	(882)
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect	5,606	2,478
Cash and Cash Equivalents, at Carrying Value	62,251	44,891
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	63,338	44,891
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest	496	30
Cash paid for income taxes	(979)	(504)
Income tax refunds received	67	45
Property, Plant and Equipment, Gross, Period Increase (Decrease)	(824)	5,414
Property, Plant and Equipment, Additions	$ 483	$ 205

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The Company

9 Months Ended

Dec. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The Company

1. Basis of Presentation

These unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with United States generally accepted accounting principles (U.S. GAAP) have been condensed or omitted in these interim statements. Accordingly, these condensed consolidated financial statements should be read in conjunction with the financial statements and notes included in the Annual Report of Electro Scientific Industries, Inc. (the Company) on Form 10-K for its fiscal year ended April 1, 2017. These interim statements include all adjustments (consisting of only normal recurring adjustments and accruals) necessary for a fair presentation of results for the interim periods presented. The results for interim periods are not necessarily indicative of the results of operations for the entire year.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of commitments and contingencies at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results may differ from those estimates.

Management believes that the estimates used are reasonable. Significant estimates made by management include: revenue recognition; valuation of inventory; accrued restructuring costs; share-based compensation; income taxes, including the valuation of deferred tax assets; valuation of long-lived assets, including intangibles; valuation of goodwill and acquisition accounting.

There have been no significant changes to the Company's significant accounting policies from those presented in Note 2: Summary of Significant Accounting Policies to the consolidated financial statements included in the Company's Annual Report on Form 10-K for its fiscal year ended April 1, 2017. All references to years or quarters relate to fiscal years or fiscal quarters unless otherwise noted. The fiscal quarters ended December 30, 2017 and December 31, 2016 each consisted of 13-week periods. Similarly, the three quarters endedDecember 30, 2017 and the three quarters endedDecember 31, 2016 each consisted of 39-week periods.

Restricted Cash

Cash and cash equivalents that are restricted as to withdrawal or use under the terms of certain long-term contractual agreements are recorded in Other non-current assets on our balance sheet. The following table provides a summary of the Company's cash, cash equivalents, and restricted cash position.

(In thousands)	Dec 30, 2017		Apr 1, 2017		Dec 31, 2016
Cash and cash equivalents	$	62,251	$	56,642	$	44,891
Restricted cash included in other long-term assets	1,087		1,090		—
Total cash, cash equivalents and restricted cash	$	63,338	$	57,732	$	44,891

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Recent Accounting Pronouncements

9 Months Ended

Dec. 30, 2017

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent Accounting Pronouncements

2. Recent Accounting Pronouncements

Adopted accounting pronouncements:

In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-09, “Compensation – Stock Compensation – Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 simplifies the accounting for several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows, and the accounting for forfeitures. ASU 2016-09 was effective for the Company as of April 2, 2017, the beginning of fiscal 2018. Adopting ASU 2016-09 increased diluted weighted average shares outstanding by approximately 40 thousand shares in the first quarter of 2018 due to the change in recognition of excess tax benefits in the calculation. The ASU is expected to increase the volatility of the Company's diluted shares outstanding on a go-forward basis.

In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory.” ASU 2015-11 simplifies the measurement of inventory by requiring companies to measure inventory at the lower of cost and net realizable value rather than measuring at the lower of cost of market where the market value was determined based off of three different measures. ASU 2015-11 was effective for the Company as of April 2, 2017, the beginning of fiscal 2018. Adopting ASU 2015-11 has not had a material effect on the Company's inventory valuation.

Recently issued accounting pronouncements not yet adopted

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, in order to (i) improve disclosures related to an entity's risk management activities through better transparency and understandability and (ii) simplify and reduce the complexity of hedge accounting by preparers. ASU 2017-12 is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods, which would be the Company's fiscal year ending March 28, 2020. Early adoption is permitted, including adoption in any interim period, for public business entities for reporting periods for which financial statements have not yet been issued. While the Company does not expect the adoption of ASU 2017-12 to have a material effect on its business, the Company is still evaluating any potential impact that adoption of ASU 2017-12 may have on its financial position, results of operations or cash flows.

In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, which amends the scope of modification accounting surrounding share-based payment arrangements as issued in ASU 2016-09 by providing guidance on the various types of changes which would trigger modification accounting for share-based payment awards, specifically an entity would not apply modification accounting under ASC 718 if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. ASU 2017-09 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods, which would be the Company's fiscal year ending March 30, 2019. Early adoption is permitted, including adoption in any interim period, for public business entities for reporting periods for which financial statements have not yet been issued. The adoption of ASU 2017-09 will not have a material effect on the Company's financial position, results of operations or cash flows.

In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires companies to disaggregate the current-service-cost component from other components of net benefit cost and provides specific guidance for presentation in the income statement. ASU 2017-07 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods, which would be the Company's fiscal year ending March 30, 2019. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The adoption of ASU 2017-07 will not have a material effect on the Company's financial position, results of operations or cash flows.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09), to supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, which deferred the effective date for implementation of ASU 2014-09 by one year, making the new guidance effective for annual reporting periods beginning after December 15, 2017, with early adoption permitted no earlier than the original effective date. The FASB has continued to issue ASU topics to further clarify ASU 2014-09. These have included ASU 2016-08, ASU 2016-10, ASU 2016-12, and ASU 2016-20. The effective date and transition requirements of these ASU topics are the same as the effective date and transition requirements of ASU 2015-14. The new standards are effective for the Company's fiscal year ending March 30, 2019, beginning with the first quarter of that fiscal year.

The new standard permits adoption by using either (i) a full retrospective approach for all periods presented in the period of adoption or (ii) a modified retrospective approach with the cumulative effect of initially applying the new standard recognized at the date of initial application and providing certain additional disclosures. The Company plans to elect the modified retrospective approach as its transition method. The Company developed an implementation plan and assigned cross-functional internal resources to perform a comprehensive assessment of the new standard and its impact on the financial statements of the Company. This assessment is ongoing and includes identification, consideration, and quantification of the impact of the new standard on the Company's financial statements, accounting policies, processes, control environment and systems. The outcome of this evaluation will be the implementation of supporting processes and systems that enable timely and accurate reporting under the new standard.

While the Company continues to assess all potential impacts under the new standard, we believe that based on a preliminary assessment the new standard is unlikely to result in a significant change to the amount or timing of revenue recognition related to system sales or service contracts, the Company's major revenue streams. There may be some impact related to the allocation of value and timing of recognition in situations where service contracts, which the Company expects to be recognized over time, are sold together with systems that are primarily recognized at a point in time. The Company believes that certain aspects of the new guidance will require significant judgment, including identification of relevant performance obligations and quantification and allocation of the consideration to which the entity expects to be entitled in exchange for those goods or services. Further, in connection with the adoption of the standard, there is a requirement to capitalize certain costs, which for the Company primarily comprises commission expenses for sales representatives. Any such costs required to be capitalized would amortize over the period of performance for the underlying contracts. The Company is still evaluating the impact of capitalizing costs to execute a contract. However, the primary potential impact is expected to relate to commissions on service contracts with a duration approximating or exceeding one year. The impact related to contracts with a duration over one year is not expected to be significant and the Company expects to elect the practical expedient under the new standard for costs with a duration less than one year and expense those items as incurred. This preliminary assessment is based on the Company's analysis of actual historical revenue transactions and current customer contracts under the new guidance and presumes certain conclusions as it relates to accounting policies under the new standard and the Company's current contracts. Due to the complexity of certain of the Company's contracts and at least the possibility that contractual arrangements could change, the actual revenue recognition treatment required under the new standard for these arrangements may be dependent on contract-specific terms and may vary from this overall expectation. The Company currently expects that necessary operational changes will be implemented prior to the adoption date. The new standard will increase the Company's revenue related disclosures; primarily by expanding disclosure of the Company's policies, significant estimates, and performance obligations.

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory, to improve and simplify the accounting for the income tax consequences of intra-entity transfers of assets other than inventory, requiring companies to recognize income tax consequences upon the transfer of the asset to a third party. ASU 2016-16 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods, which would be the Company's fiscal year ending March 30, 2019. While the Company does not expect the adoption of ASU 2016-16 to have a material effect on its business, the Company is still evaluating any potential impact that adoption of ASU 2016-16 may have on its financial position, results of operations or cash flows.

In February 2016, the FASB issued ASU 2016-02, Leases. ASU 2016-02 increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and requires disclosing key information about leasing arrangements. ASU 2016-02 is effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods, which would be the Company's fiscal year ending March 28, 2020. The Company is still evaluating any potential impact that adoption of ASU 2016-02 may have on its financial position, results of operations or cash flows.

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Fair Value Measurements

9 Months Ended

Dec. 30, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurements

3. Fair Value Measurements

Financial Assets and Liabilities Measured at Fair Value

ASC Topic 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include the following:

• Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities;

• Level 2, defined as inputs that are observable either directly or indirectly such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and other inputs that can be corroborated by observable market data; and

• Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of December 30, 2017 and April 1, 2017 was as follows (in thousands):

December 30, 2017	Level 1		Level 2			Level 3		Total
Cash equivalents:
Money market securities	$	24,537	$	—		$	—	$	24,537
Commercial paper	—		4,149			—		4,149
Total cash equivalents	$	24,537	$	4,149		$	—	$	28,686
Short term investments - available for sale:
U.S. treasury fund	$	10,447	$	—		$	—	$	10,447
Commercial paper	—		24,173			—		24,173
Corporate bonds	—		2,204			—		2,204
Total short-term investments - available for sale	$	10,447	$	26,377		$	—	$	36,824
Forward purchase or (sale) contracts:
Japanese Yen	$	—	$	(1	)	$	—	$	(1	)
New Taiwan Dollar	—		11			—		11
Korean Won	—		(4		)	—		(4		)
Euro	—		(14		)	—		(14		)
British Pound	—		(13		)	—		(13		)
Chinese Renminbi	—		(51		)	—		(51		)
Total forward contracts	$	—	$	(72	)	$	—	$	(72	)
Deferred compensation plan assets:*
Mutual funds and exchange traded funds	$	2,634	$	—		$	—	$	2,634
Money market securities	959		—			—		959
Total deferred compensation plan assets	$	3,593	$	—		$	—	$	3,593

April 1, 2017	Level 1		Level 2			Level 3		Total
Cash equivalents:
Money market securities	$	22,395	$	—		$	—	$	22,395
Commercial paper	—		4,945			—		4,945
Total cash equivalents	$	22,395	$	4,945		$	—	$	27,340
Short term investments - available for sale:
Commercial paper	$	—	$	5,743		$	—	$	5,743
Total short-term investments - available for sale	$	—	$	5,743		$	—	$	5,743
Forward purchase or (sale) contracts:
Japanese Yen	$	—	$	9		$	—	$	9
New Taiwan Dollar	—		20			—		20
Korean Won	—		39			—		39
Euro	—		(96		)	—		(96		)
British Pound	—		16			—		16
Chinese Renminbi	—		(5		)	—		(5		)
Singapore Dollar	—		(1		)	—		(1		)
Total forward contracts	$	—	$	(18	)	$	—	$	(18	)
Deferred compensation plan assets:*
Mutual funds and exchange traded funds	$	845	$	—		$	—	$	845
Money market securities	2,213		—			—		2,213
Total deferred compensation plan assets	$	3,058	$	—		$	—	$	3,058

*These investments represent assets held in trust for the deferred compensation plan

For Level 1 assets, the Company utilized quoted prices in active markets for identical assets.

For Level 2 assets, exclusive of forward contracts, the Company utilized quoted prices in active markets for similar assets. For forward contracts, spot prices at December 30, 2017 and April 1, 2017 were utilized to calculate fair values.

During the first three quarters of 2018 and 2017, there were no transfers between Level 1, 2 or 3 assets.

Investments

The Company’s investments, other than money market securities for which there is no unrealized gain or loss, at December 30, 2017 and April 1, 2017 were as follows (in thousands):

			Unrealized
December 30, 2017	Cost		Gain		Loss			Fair Value
Available-for-sale securities (current):
U.S. treasury fund	$	10,465	$	—	$	(18	)	$	10,447
Commercial paper	28,322		—		—			28,322
Corporate Bonds	2,205		—		(1		)	2,204
Total investments (current)	$	40,992	$	—	$	(19	)	$	40,973
Available-for-sale securities (non-current):
Mutual funds, exchange traded funds and money market securities*	$	3,322	$	271	$	—		$	3,593
Total investments (non-current)	$	3,322	$	271	$	—		$	3,593
			Unrealized
April 1, 2017	Cost		Gain		Loss			Fair Value
Available-for-sale securities (current):
Commercial paper	$	10,688	$	—	$	—		$	10,688
Total investments (current)	$	10,688	$	—	$	—		$	10,688
Available-for-sale securities (non-current):
Mutual funds, exchange traded funds and money market securities*	$	2,974	$	84	$	—		$	3,058
Total investments (non-current)	$	2,974	$	84	$	—		$	3,058

*These investments represent assets held in trust for the deferred compensation plan

For purposes of determining gross realized gains and losses and reclassification out of accumulated other comprehensive income (loss), the cost of securities sold is based on specific identification. Net unrealized holding gains and losses on current available-for-sale securities included in accumulated other comprehensive income (loss) were insignificant as of December 30, 2017 and April 1, 2017.

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Inventories

9 Months Ended

Dec. 30, 2017

Inventory Disclosure [Abstract]

Inventories

5. Inventories

Inventories are principally valued at standard cost, which approximates the lower of cost or net realizable value on a first-in, first-out basis. Components of inventories were as follows:

(In thousands)	Dec 30, 2017		Apr 1, 2017
Raw materials and purchased parts	$	50,720	$	41,383
Work-in-process	18,737		13,829
Finished goods	5,045		3,730
	$	74,502	$	58,942

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Other Assets

9 Months Ended

Dec. 30, 2017

Other Assets, Noncurrent Disclosure [Abstract]

Other Assets

6. Other Assets

Other assets consisted of the following:

(In thousands)	Dec 30, 2017		Apr 1, 2017
Demo and leased equipment, net	$	8,636	$	11,011
Long term deposits and non-trade receivables	2,620		2,872
Non-current restricted cash	1,087		1,090
Non-current deferred income taxes, net	827		890
Other non-current assets	4,169		3,958
	$	17,339	$	19,821

Depreciation expense for demo and leased equipment totaled $0.6 million in the third quarter of 2018 and $0.1 million in the third quarter of 2017. For the three fiscal quarters endedDecember 30, 2017 depreciation expense for demo and leased equipment totaled $0.8 million compared to $0.3 million for the three fiscal quarters endedDecember 31, 2016. Of the total $8.6 million and $11.0 million of demo and leased equipment at December 30, 2017 and April 1, 2017, $4.1 million and $1.1 million were leased assets at customer sites generating revenue.

Included in Other non-current assets are long-term investments held in a trust for the deferred compensation plan, non-current trade accounts receivable and other items.

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Accrued Liabilities (Current) Other liabilities (Notes)

9 Months Ended

Dec. 30, 2017

Other Liabilities Disclosure [Abstract]

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

7. Accrued Liabilities

Accrued liabilities consisted of the following:

(In thousands)	Dec 30, 2017		Apr 1, 2017
Payroll-related liabilities	$	12,841	$	6,335
Customer deposits	11,431		1,242
Product warranty accrual	4,506		3,394
Purchase order commitments and receipts	3,014		2,522
Restructuring costs payable	2,608		4,996
Professional fees payable	832		734
Current portion, long-term debt	415		434
Other current liabilities	4,744		2,529
	$	40,391	$	22,186

Included in other current liabilities above are accrued amounts for value-added taxes, income taxes, freight, and other similar items.

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Product Warranty

9 Months Ended

Dec. 30, 2017

Product Warranties Disclosures [Abstract]

Product Warranty

8. Product Warranty

The following is a reconciliation of the changes in the aggregate product warranty accrual:

	Fiscal quarter ended						Three fiscal quarters ended
(In thousands)	Dec 30, 2017			Dec 31, 2016			Dec 30, 2017			Dec 31, 2016
Product warranty accrual, beginning	$	7,156		$	5,521		$	5,474		$	5,734
Warranty charges incurred, net	(3,273		)	(1,674		)	(8,384		)	(4,988		)
Provision for warranty charges	5,067			1,064			11,860			4,165
Product warranty accrual, ending	$	8,950		$	4,911		$	8,950		$	4,911

Net warranty charges incurred include labor charges and costs of replacement parts for system repairs under warranty. These costs are recorded net of any estimated cost recoveries resulting from either successful repair of damaged parts or from warranties offered by the Company’s suppliers for defective components. The provision for warranty charges reflects the estimate of future anticipated net warranty costs to be incurred for all products under warranty at quarter end and is recorded to cost of sales. Of the total of $9.0 million and $4.9 million of product warranty accruals as of December 30, 2017 and December 31, 2016, $4.5 million and $0.8 million were non-current and were included in Other liabilities on the Condensed Consolidated Balance Sheets.

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Deferred Revenue

9 Months Ended

Dec. 30, 2017

Deferred Revenue Disclosure [Abstract]

Deferred Revenue

9. Deferred Revenue

Generally, revenue is recognized upon fulfillment of acceptance criteria at the Company's factory and transfer of risk of loss and title. Revenue is deferred whenever title transfer is pending, risk of loss has not transferred, and/or acceptance criteria have not yet been fulfilled. Deferred revenue arises from, among other factors, sales to Japanese customers, shipments of substantially new products and shipments with custom specifications and other acceptance criteria where the Company cannot demonstrate a track record of acceptance. For sales involving multiple element arrangements, the relative selling price of any undelivered elements, including installation services and similar items, is deferred until the elements are delivered and acceptance criteria are met. Revenue related to maintenance and service contracts is deferred and recognized ratably over the duration of the contracts.

The following is a reconciliation of the changes in deferred revenue:

	Fiscal quarter ended						Three fiscal quarters ended
(In thousands)	Dec 30, 2017			Dec 31, 2016			Dec 30, 2017			Dec 31, 2016
Deferred revenue, beginning	$	15,616		$	11,583		$	15,397		$	7,685
Revenue deferred	51,191			9,075			66,661			28,547
Revenue recognized	(54,420		)	(9,440		)	(69,671		)	(25,014		)
Deferred revenue, ending	$	12,387		$	11,218		$	12,387		$	11,218

Of the total of $12.4 million and $11.2 million of deferred revenue at December 30, 2017 and December 31, 2016, $0.4 million and $0.4 million were non-current and were included in Other liabilities on the Condensed Consolidated Balance Sheets.

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Long-term Debt (Notes)

9 Months Ended

Dec. 30, 2017

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

10. Long-term Debt

On January 9, 2017, ESI Leasing, LLC (ESI Leasing), a wholly owned subsidiary of the Company, entered into a loan agreement (Loan Agreement) with First Technology Federal Credit Union (Lender). The Loan Agreement provides for a term loan from the Lender to ESI Leasing in the principal amount of $14 million (Loan). The interest rate of the Loan is fixed at 4.75% per annum, except that it may be increased if certain covenants under the Loan Agreement are not satisfied and after and during the continuation of an “Event of Default” as defined in the Loan Agreement. The Loan amortizes over a period of approximately 20 years, with the outstanding principal maturing and becoming due on January 1, 2027. ESI Leasing pays monthly principal and interest payments on the Loan totaling $1.1 million annually through the maturity of the Loan. The Company unconditionally guarantees the Loan. The Company is required to maintain certain deposits with the Lender through March 31, 2019, at which point the restriction will be removed as long as we are in compliance with certain minimum covenants.

The principal maturities for each of the upcoming calendar twelve-month periods ending on December 30 are as follows:

(In thousands)	2018		2019		2020		2021		2022
Principal maturities	$	449	$	471	$	492	$	518	$	543

Total debt outstanding on the Loan Agreement were as follows:

(In thousands)	Dec 30, 2017			Apr 1, 2017
Total debt outstanding	$	13,290		$	13,923
Less: Current portion, long-term debt	(415		)	(434		)
Long-term debt	$	12,875		$	13,489

Deferred debt issuance costs related to the above long-term debt as of December 30, 2017 and April 1, 2017 were $311 thousand and $337 thousand, respectively.

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Revolving Credit Facility (Notes)

9 Months Ended

Dec. 30, 2017

Debt Disclosure [Abstract]

Revolving Credit Facility [Text Block]

11. Revolving Credit Facility

The Company is party to a loan and security agreement (Credit Facility) with Silicon Valley Bank (SVB), which was initially entered into on March 20, 2015 and amended on July 12, 2016. The Credit Facility provides for a senior secured asset-based revolving facility with availability up to $30.0 million, including a $15.0 million sublimit for letters of credit. In the fourth quarter of fiscal 2017, the Company amended and extended the Credit Facility by one year. With this extension, the Credit Facility expires March 20, 2019. At December 30, 2017, the Company had no amounts outstanding under the Credit Facility, was in compliance with all covenants, and was not in default under the Credit Facility. The commitment fee on the amount of unused credit was 0.3 percent. As amended, the Credit Facility allows for a greater level of EBITDA losses, but reduces the level of permitted acquisitions and purchases of capital equipment. If the Company fails to meet the covenants in its Credit Facility or its lenders fail to fund, access to the facility may be limited or the facility may become unavailable altogether.

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Commitments & Contingencies (Notes)

9 Months Ended

Dec. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

12. Commitments & Contingencies

The Company mitigates credit risk by transacting with highly rated counterparties for foreign exchange contracts, letters of credit and other transactions where counterparty risk is a factor. The Company has evaluated the non-performance risks associated with the Company's lenders and other parties and believes them to be insignificant.

From time to time the Company may be party to litigation arising in the normal course of business. Currently, the Company is not party to any litigation it believes would have a material adverse effect on the Company's financial position, results of operations or cash flows.

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Shareholders' Equity

9 Months Ended

Dec. 30, 2017

Stockholders' Equity Note [Abstract]

Shareholders' Equity

13. Shareholders’ Equity

Share Repurchase Program

In December 2011, the Board of Directors authorized a share repurchase program totaling $20.0 million to acquire shares of the Company's outstanding common stock. The repurchases are to be made at management’s discretion in the open market or in privately negotiated transactions in compliance with applicable securities laws and other legal requirements and are subject to market conditions, acceptable share price and other factors. The Company did not repurchase any shares during fiscal 2017 or the first three quarters of 2018. There is no expiration date for the repurchase program.

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Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss) (Notes)

9 Months Ended

Dec. 30, 2017

Accumulated Other Comprehensive Income [Abstract]

Comprehensive Income (Loss) Note [Text Block]

14. Accumulated Other Comprehensive Income (Loss)

The following is a reconciliation of the changes in accumulated other comprehensive income (AOCI):

	Foreign currency translation adjustment			Accumulated other comprehensive income related to benefit plan obligation			Net unrealized loss on available-for-sale securities			Total
Balance at April 1, 2017	$	(1,242	)	$	45		$	(17	)	$	(1,214	)
Other comprehensive income (loss) before reclassifications and taxes	961			20			(18		)	963
Amounts reclassified from AOCI	—			—			—			—
Tax effect	8			(7		)	—			1
Other Comprehensive income (loss)	969			13			(18		)	964
Balance at December 30, 2017	$	(273	)	$	58		$	(35	)	$	(250	)

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Share-Based Compensation

9 Months Ended

Dec. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

15. Share-Based Compensation

The Company's share-based compensation consists of stock-settled stock appreciation rights (SARs), restricted stock unit awards with a service condition (time-based RSUs), restricted stock unit awards with a performance condition (performance-based RSUs), restricted stock unit awards with a market performance condition (market-based RSUs) and an employee stock purchase plan.

The Company recognizes expense related to the fair value of SARs and the 1990 Employee Stock Purchase Plan (ESPP) using the Black-Scholes model to estimate the fair value of awards on the date of grant. The fair value of time-based and performance-based restricted stock units (RSUs) are measured on the grant date based on the market value of the Company's common stock. The market-based RSUs must achieve the total shareholder return (TSR) measures in order for the awards to vest, and the grant date fair value of the awards is calculated using a Monte Carlo simulation model.

Except for performance-based RSUs, the Company recognizes compensation expense for all share-based compensation awards, net of estimated forfeitures, on a straight-line basis over the requisite service period of the award. Expense for performance-based RSUs is recognized based on the probability of achievement of the performance criteria. The compensation cost for market-based RSUs is recognized over the related service period, even if the market condition is never satisfied. The impact of adjustments related to awards where the requisite service period was not completed is reflected as an offset to current period shared-based compensation expense.

The Company granted a total of 442,400 time-based RSUs and 222,400 market-based RSUs during the first three quarters of 2018, but did not grant any SARs or performance-based RSUs. Grants for the third quarter of 2018 consisted of 46,000 time-based RSUs and 25,000 market-based RSUs.

Share-based compensation expense under the stock incentive plans is included in the Company’s Condensed Consolidated Statements of Operations as follows:

	Fiscal quarter ended				Three fiscal quarters ended
(In thousands)	Dec 30, 2017		Dec 31, 2016		Dec 30, 2017		Dec 31, 2016
Cost of sales	$	64	$	142	$	208	$	398
Selling, general and administrative	498		1,391		2,629		3,573
Research, development and engineering	151		285		484		656
Total share-based compensation expense	$	713	$	1,818	$	3,321	$	4,627

The Company does not have any capitalizable share-based compensation costs for the three fiscal quarters endedDecember 30, 2017 and December 31, 2016, respectively. As of December 30, 2017, the Company had $8.0 million of total unrecognized share-based compensation costs, net of estimated forfeitures, which are expected to be recognized over a weighted average period of 2.3 years.

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Product and Geographic Information (Notes)

9 Months Ended

Dec. 30, 2017

Product ang Geographic Information Reporting [Abstract]

Product and Geographic Information [Text Block]

16. Product and Geographic Information

Operating segments are defined as components of an enterprise about which separate financial information is available and evaluated regularly by the chief operating decision maker (CODM) in deciding how to allocate resources and in assessing performance. The Company's CODM is its Chief Executive Officer (CEO).

The Company and its consolidated subsidiaries operate in a single segment, defined as a manufacturer of high-technology microfabrication and related equipment. This segment sells products into a variety of end markets that are grouped into four major categories for the purpose of providing an understanding of the principal end markets for the products manufactured by the Company, specifically: 1) Printed Circuit Board (PCB), 2) Component Test, 3) Semiconductor, and 4) Industrial Machining.

The following table presents net sales information by the four major market categories addressed by the Company's single segment:

	Fiscal quarter ended				Three fiscal quarters ended
(In thousands)	Dec 30, 2017		Dec 31, 2016		Dec 30, 2017		Dec 31, 2016
Printed Circuit Board	$	83,799	$	15,987	$	179,658	$	60,432
Component Test	7,473		5,407		23,331		14,999
Semiconductor	12,351		6,690		31,116		21,521
Industrial Machining	7,217		5,695		20,386		14,153
Net Sales	$	110,840	$	33,779	$	254,491	$	111,105

Net sales by geographic area, based on the location of the end user, were as follows:

	Fiscal quarter ended				Three fiscal quarters ended
(In thousands)	Dec 30, 2017		Dec 31, 2016		Dec 30, 2017		Dec 31, 2016
Asia	$	103,069	$	26,015	$	233,685	$	92,184
Americas	2,431		6,210		9,537		11,464
Europe	5,340		1,554		11,269		7,457
Net Sales	$	110,840	$	33,779	$	254,491	$	111,105

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Restructuring and Cost Management Plans

9 Months Ended

Dec. 30, 2017

Restructuring and Related Activities [Abstract]

Restructuring and Cost Management Plans

17. Restructuring and Cost Management Plans

2017 Corporate Restructuring:

In the fourth quarter of 2017, the Company initiated a restructuring plan to improve business effectiveness and streamline operations to achieve a stated target profit level for the Company as a whole. As a part of the restructuring plan, the management team was reorganized from a business unit to a functional structure; the Company closed facilities in Montreal, Canada; Napa, California; and Sunnyvale, California; the Company discontinued certain products; and the Company made select reductions in headcount across the Company. Actions under this plan were completed as of the end of the third fiscal quarter of 2018.

Total expenses related to the plan were $17.2 million in the first three quarters of 2018 and $7.6 million in the fourth quarter of 2017. Included in the 2018 expenses are approximately $13.3 million of charges, all incurred in the first and second quarters of 2018, impacting gross margins primarily related to impairment of other assets and inventory stemming from the product portfolio program reviews. Operating expense charges included $2.5 million of facilities and fixed assets charges related to streamlining facilities and discontinued products and $1.3 million of employee severance and related costs. Restructuring costs of $0.7 million incurred in the third quarter of 2018 were primarily related to the employee severance and related costs to a departed executive. Product portfolio reviews are complete as of the end of third quarter of 2018. The impacts of the decisions made in the portfolio reviews involve the use of certain estimates. Actual results could differ from those estimates and result in additional charges.

The following table presents the total expected restructuring costs as of December 30, 2017 (in thousands):

	Total Expected Costs for the Plan		Costs Recognized from inception of the plan through the Quarter ended Dec 30, 2017		Remaining Costs to be Recognized Subsequent to Dec 30, 2017
Employee severance and related personnel costs	$	4,872	$	4,872	$	—
Site closure costs	1,714		1,714		—
Current asset impairments and other gross profit charges(1)	14,947		14,947		—
Non-current asset impairments	3,032		3,032		—
Other costs	239		239		—
Total	$	24,804	$	24,804	$	—

(1) Current asset impairments include inventory charges recorded in cost of sales.

The following table presents the amounts payable related to the 2017 Corporate Restructuring (in thousands):

	Employee severance and related personnel costs			Site closure costs			Current asset impairments and other gross profit charges(1)			Non-current asset impairments			Other Costs			Total
Balance as of April 2, 2016	$	—		$	—		$	—		$	—		$	—		$	—
Costs incurred	3,588			888			1,669			1,376			66			7,587
Cash payments	(341		)	—			—			—			(66		)	(407		)
Non-cash items	—			—			(1,669		)	(1,376		)	—			(3,045		)
Balance as of April 1, 2017	$	3,247		$	888		$	—		$	—		$	—		$	4,135
Costs incurred	1,284			824			13,278			1,657			175			17,218
Cash (payments) receipts	(3,788		)	(1,389		)	(1,750		)	32			(175		)	(7,070		)
Non-cash items	—			—			(10,876		)	(1,689		)	—			(12,565		)
Balance as of December 30, 2017	$	743		$	323		$	652		$	—		$	—		$	1,718

(1) Asset and facilities costs include inventory charges recorded in cost of sales.

Other restructuring plans:

The Company's previously disclosed restructuring plans are largely complete. Net restructuring costs related to these plans were $0.4 million in 2018 and $0.4 million in 2017. Please see Note 26: Restructuring and Cost Management Plans to the Company’s financial statements included in its Annual Report on Form 10-K for the fiscal year ending April 1, 2017. The amounts payable of $0.9 million at December 30, 2017 are expected to be future cash outflows, primarily relating to facility costs to be paid through the end of calendar 2018. The Company does not expect to incur additional expenses related to these plans.

The following table presents the amounts related to restructuring costs payable (in thousands):

Restructuring & cost management amounts payable as of April 2, 2016	$	757
Cash payments and other adjustments	(297		)
Costs incurred	401
Restructuring & cost management amounts payable as of April 1, 2017	861
Cash payments and other adjustments	(380		)
Costs incurred	409
Restructuring & cost management amounts payable as of December 30, 2017	$	890

Overall restructuring reserve:

As of December 30, 2017, and April 1, 2017, the amount of unpaid restructuring costs included in accrued liabilities on the Consolidated Balance Sheets were $2.6 million and $5.0 million, respectively. Included in the payable balance are amounts for severance and employee benefits, asset retirement obligation and net lease commitments.

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(Loss) Earnings Per Share

9 Months Ended

Dec. 30, 2017

Earnings Per Share [Abstract]

(Loss) Earnings Per Share

19. Earnings (Loss) Per Share

The following is a reconciliation of weighted average shares outstanding used in the calculation of basic and diluted earnings (loss) per share:

	Fiscal quarter ended					Three fiscal quarters ended
(In thousands, except per share data)	Dec 30, 2017		Dec 31, 2016			Dec 30, 2017		Dec 31, 2016
Net income (loss)	$	33,973	$	(9,693	)	$	41,135	$	(19,486	)
Weighted average shares used for basic earnings per share	34,224		32,919			33,839		32,379
Incremental diluted shares	1,786		—			1,723		—
Weighted average shares used for diluted earnings per share	36,010		32,919			35,562		32,379
Net income (loss) per share:
Basic	$	0.99	$	(0.29	)	$	1.22	$	(0.60	)
Diluted	$	0.94	$	(0.29	)	$	1.16	$	(0.60	)

Awards of options, SARs and RSUs representing an additional 0.1 million and 2.8 million shares of stock for the third quarter of 2018 and 2017, respectively, and 0.4 million and 2.5 million shares of stock for the first three quarters of 2018 and 2017, respectively, were not included in the calculation of diluted net earnings per share because their effect would have been antidilutive.

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Business Acquisitions

9 Months Ended

Dec. 30, 2017

Business Combinations [Abstract]

Business Acquisitions

20. Business Acquisitions

Fiscal 2017

On August 1, 2016, the Company acquired all of the outstanding shares of Visicon Technologies, Inc. (Visicon), a leading supplier of high-accuracy and high-throughput measurement and defect detection systems based in Napa, California. The consideration under the merger agreement is subject to adjustment for indebtedness, seller's transaction expenses, working capital and other items.

Based on closing working capital levels and other adjustments, the Company paid $2.0 million in cash and issued 603,939 shares of ESI common stock, valued at approximately $4.2 million. The value of the common stock was based on the closing price of stock on August 1, 2016. A portion of the shares issued in connection with the agreement were reserved in escrow to serve as a source of payment for any purchase price adjustments or indemnity claims by the Company. The sellers have contractually agreed to limitations on the sale of the shares of common stock they received in connection with the sale of Visicon; specifically, no shares could be sold for six months following closing, after which twenty-five percent of the shares become salable each quarter thereafter. The shares issued as a part of this merger represented a non-cash investing activity of $4.2 million.

The Company finalized the valuation of assets acquired, liabilities assumed, and consideration in the first quarter of 2018. The amounts shown below represent the fair value of the associated assets acquired, liabilities assumed and consideration transferred as of the acquisition date. The total estimated purchase price of $6.2 million, net of cash acquired, was allocated to the underlying assets acquired and liabilities assumed based on estimated fair value, as shown in the following table:

(In thousands)
Accounts receivable	$	391
Inventory	982
Prepaid expense and other current assets	116
Property, plant and equipment	737
Acquired intangibles	3,300
Goodwill	2,626
Other assets	26
Accounts payable and other accrued liabilities	(1,952		)
Total purchase price, net of cash acquired	$	6,226

The acquisition provided the Company with a portfolio of standalone defect detection systems for the medical device and consumer electronics markets. In addition to a standalone product portfolio and associated value streams, the acquisition provided complementary technology for integrated verification of laser machining, to allow the Company to expand its presence into the medical device market, present an opportunity for enhanced vertical integration and result in synergies with the Company's current consumer electronics customer base.

None of the goodwill is deductible for tax purposes. The acquired intangible assets consisted primarily of approximately $2.1 million of developed technology. Identified intangible assets are expected to be amortized over their useful lives of one to six years.

The operating results of the acquired entity are included in the Company’s results of operations since the date of acquisition. Pro forma financial information has not been provided for the acquisition of Visicon as it is not material to the Company’s operations and financial position.

Fiscal 2015

The Company acquired all of the outstanding shares of Wuhan Topwin Optoelectronics Technology Co., Ltd. (Topwin), a Chinese manufacturer of laser-based systems. In connection with this acquisition, the Company issued 145,442 shares and treated that as compensation to an employee of the Company who was previously an owner of Topwin. The compensation expense was recognized over the service period and from acquisition through the third quarter of fiscal 2018, the Company has recognized $1.7 million in share-based compensation expense related to this acquisition. Share-based compensation expense recognized in 2018 was $0.2 million, all incurred in the first quarter.

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Income Taxes (Notes)

9 Months Ended

Dec. 30, 2017

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

18. Income Taxes

The Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law in the U.S. on December 22, 2017. The Tax Act includes various changes to the tax law, including a permanent reduction in the corporate income tax rate. The Company recognized the estimated effects of the changes in the tax rate and laws resulting from the Tax Act during the quarter ended December 31, 2017.

The Tax Act reduces the federal corporate income tax rate from 35% to 21% effective January 1, 2018. The Company’s federal statutory rate for the fiscal year ending March 31, 2018 is a blended rate based on the weighting of pre- and post-Tax Act rates and will be 21% for future fiscal years.

Deferred tax assets and liabilities are remeasured at the new rates; however, given a full valuation allowance against net deferred tax assets, the expense arising from the re-measurement of deferred tax assets and liabilities is fully offset by an equivalent adjustment to our existing valuation allowance, resulting in no net impact to tax expense.

The Tax Act imposes a one-time transition tax on the deemed repatriation of post-1986 undistributed foreign subsidiaries’ earnings. Based on the information available as of December 31, 2017, the Company estimated undistributed foreign earnings of approximately $43 million. The taxable income arising from this deemed repatriation is expected to be fully offset by the utilization of net operating loss carryforwards and other tax credits, offset by changes in the valuation allowance, resulting in no net impact to tax expense.

The Tax Act also includes a base erosion and anti-abuse tax (BEAT), applicable to corporations with annual gross receipts of at least $500M for the prior 3-years, which requires U.S. multinationals making “excessive” deductible payments to their foreign affiliates to pay a 10 percent tax on their income without those deductions, after a one-year, 5 percent transition rate. Further the Tax Act imposes a tax on global intangible low-taxed income (GILTI) on controlled foreign corporations’ aggregate net income over a 10% benchmark return on qualified business asset investment less interest expense. We have not evaluated the impacts of these provisions at this time nor have we elected whether to treat the impacts of GILTI as a period expense or as a deferred tax item.

We continue to evaluate the impact the new legislation will have on our financial position, results of operations, and cash flows. We expect additional technical guidance from the Department of Treasury, possibly up through the date of the Company’s tax return filings. Additionally, the FASB has proposed new accounting guidance regarding the treatment of the impact of the Tax Act on items recorded within accumulated other comprehensive income (loss), but this guidance has not been finalized. The Securities and Exchange Commission Staff Accounting Bulletin No. 118 allows the use of provisional amounts if accounting for the income tax effects of the Act has not been completed when the Company’s financial statements are issued. This measurement period may extend no longer than one year.

While we believe the net impact on the 2018 effective tax rate and tax expense is not material due to our existing net operating loss carryforwards and other tax credits, rule-making and the Company’s assessment remains ongoing. Therefore, the final impact of the Tax Reform may differ due to changes in interpretations, assumptions and that we are not able to fully quantify the impact on our financial position, results of operations, and cash flows at this time. Provisional amounts will be adjusted during the measurement period as accounting for the income tax effects of the Act is completed and the rules and technical guidance are finalized.

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Fair Value Measurements (Tables)

9 Months Ended

Dec. 30, 2017

Fair Value Disclosures [Abstract]

Fair Value Hierarchy for Financial Assets Measured at Fair Value on Recurring Basis

The Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of December 30, 2017 and April 1, 2017 was as follows (in thousands):

December 30, 2017	Level 1		Level 2			Level 3		Total
Cash equivalents:
Money market securities	$	24,537	$	—		$	—	$	24,537
Commercial paper	—		4,149			—		4,149
Total cash equivalents	$	24,537	$	4,149		$	—	$	28,686
Short term investments - available for sale:
U.S. treasury fund	$	10,447	$	—		$	—	$	10,447
Commercial paper	—		24,173			—		24,173
Corporate bonds	—		2,204			—		2,204
Total short-term investments - available for sale	$	10,447	$	26,377		$	—	$	36,824
Forward purchase or (sale) contracts:
Japanese Yen	$	—	$	(1	)	$	—	$	(1	)
New Taiwan Dollar	—		11			—		11
Korean Won	—		(4		)	—		(4		)
Euro	—		(14		)	—		(14		)
British Pound	—		(13		)	—		(13		)
Chinese Renminbi	—		(51		)	—		(51		)
Total forward contracts	$	—	$	(72	)	$	—	$	(72	)
Deferred compensation plan assets:*
Mutual funds and exchange traded funds	$	2,634	$	—		$	—	$	2,634
Money market securities	959		—			—		959
Total deferred compensation plan assets	$	3,593	$	—		$	—	$	3,593

April 1, 2017	Level 1		Level 2			Level 3		Total
Cash equivalents:
Money market securities	$	22,395	$	—		$	—	$	22,395
Commercial paper	—		4,945			—		4,945
Total cash equivalents	$	22,395	$	4,945		$	—	$	27,340
Short term investments - available for sale:
Commercial paper	$	—	$	5,743		$	—	$	5,743
Total short-term investments - available for sale	$	—	$	5,743		$	—	$	5,743
Forward purchase or (sale) contracts:
Japanese Yen	$	—	$	9		$	—	$	9
New Taiwan Dollar	—		20			—		20
Korean Won	—		39			—		39
Euro	—		(96		)	—		(96		)
British Pound	—		16			—		16
Chinese Renminbi	—		(5		)	—		(5		)
Singapore Dollar	—		(1		)	—		(1		)
Total forward contracts	$	—	$	(18	)	$	—	$	(18	)
Deferred compensation plan assets:*
Mutual funds and exchange traded funds	$	845	$	—		$	—	$	845
Money market securities	2,213		—			—		2,213
Total deferred compensation plan assets	$	3,058	$	—		$	—	$	3,058

Investments

The Company’s investments, other than money market securities for which there is no unrealized gain or loss, at December 30, 2017 and April 1, 2017 were as follows (in thousands):

			Unrealized
December 30, 2017	Cost		Gain		Loss			Fair Value
Available-for-sale securities (current):
U.S. treasury fund	$	10,465	$	—	$	(18	)	$	10,447
Commercial paper	28,322		—		—			28,322
Corporate Bonds	2,205		—		(1		)	2,204
Total investments (current)	$	40,992	$	—	$	(19	)	$	40,973
Available-for-sale securities (non-current):
Mutual funds, exchange traded funds and money market securities*	$	3,322	$	271	$	—		$	3,593
Total investments (non-current)	$	3,322	$	271	$	—		$	3,593
			Unrealized
April 1, 2017	Cost		Gain		Loss			Fair Value
Available-for-sale securities (current):
Commercial paper	$	10,688	$	—	$	—		$	10,688
Total investments (current)	$	10,688	$	—	$	—		$	10,688
Available-for-sale securities (non-current):
Mutual funds, exchange traded funds and money market securities*	$	2,974	$	84	$	—		$	3,058
Total investments (non-current)	$	2,974	$	84	$	—		$	3,058

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Inventories (Tables)

9 Months Ended

Dec. 30, 2017

Inventory Disclosure [Abstract]

Components of Inventories

Components of inventories were as follows:

(In thousands)	Dec 30, 2017		Apr 1, 2017
Raw materials and purchased parts	$	50,720	$	41,383
Work-in-process	18,737		13,829
Finished goods	5,045		3,730
	$	74,502	$	58,942

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Other Assets (Tables)

9 Months Ended

Dec. 30, 2017

Other Assets, Noncurrent Disclosure [Abstract]

Other Assets

Other assets consisted of the following:

(In thousands)	Dec 30, 2017		Apr 1, 2017
Demo and leased equipment, net	$	8,636	$	11,011
Long term deposits and non-trade receivables	2,620		2,872
Non-current restricted cash	1,087		1,090
Non-current deferred income taxes, net	827		890
Other non-current assets	4,169		3,958
	$	17,339	$	19,821

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Accrued Liabilities (Current) Other Liabilities Disclosure (Tables)

9 Months Ended

Dec. 30, 2017

Other Liabilities Disclosure [Abstract]

Schedule of Accrued Liabilities [Table Text Block]

Accrued liabilities consisted of the following:

(In thousands)	Dec 30, 2017		Apr 1, 2017
Payroll-related liabilities	$	12,841	$	6,335
Customer deposits	11,431		1,242
Product warranty accrual	4,506		3,394
Purchase order commitments and receipts	3,014		2,522
Restructuring costs payable	2,608		4,996
Professional fees payable	832		734
Current portion, long-term debt	415		434
Other current liabilities	4,744		2,529
	$	40,391	$	22,186

Other Noncurrent Liabilities [Table Text Block]

ncluded in other current liabilities above are accrued amounts for value-added taxes, income taxes, freight, and other similar items.

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Product Warranty (Tables)

9 Months Ended

Dec. 30, 2017

Product Warranties Disclosures [Abstract]

Reconciliation of the Change in Aggregate Accrual for Product Warranty

The following is a reconciliation of the changes in the aggregate product warranty accrual:

	Fiscal quarter ended						Three fiscal quarters ended
(In thousands)	Dec 30, 2017			Dec 31, 2016			Dec 30, 2017			Dec 31, 2016
Product warranty accrual, beginning	$	7,156		$	5,521		$	5,474		$	5,734
Warranty charges incurred, net	(3,273		)	(1,674		)	(8,384		)	(4,988		)
Provision for warranty charges	5,067			1,064			11,860			4,165
Product warranty accrual, ending	$	8,950		$	4,911		$	8,950		$	4,911

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Deferred Revenue (Tables)

9 Months Ended

Dec. 30, 2017

Deferred Revenue Disclosure [Abstract]

Reconciliation of the Changes in Deferred Revenue

The following is a reconciliation of the changes in deferred revenue:

	Fiscal quarter ended						Three fiscal quarters ended
(In thousands)	Dec 30, 2017			Dec 31, 2016			Dec 30, 2017			Dec 31, 2016
Deferred revenue, beginning	$	15,616		$	11,583		$	15,397		$	7,685
Revenue deferred	51,191			9,075			66,661			28,547
Revenue recognized	(54,420		)	(9,440		)	(69,671		)	(25,014		)
Deferred revenue, ending	$	12,387		$	11,218		$	12,387		$	11,218

Of the total of $12.4 million and $11.2 million of deferred revenue at December 30, 2017 and December 31, 2016, $0.4 million and $0.4 million were non-current and were included in Other liabilities on the Condensed Consolidated Balance Sheets.

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Long-term Debt Debt Outstanding (Tables)

9 Months Ended

Dec. 30, 2017

Debt Instrument [Line Items]

Schedule of Debt [Table Text Block]

Total debt outstanding on the Loan Agreement were as follows:

(In thousands)	Dec 30, 2017			Apr 1, 2017
Total debt outstanding	$	13,290		$	13,923
Less: Current portion, long-term debt	(415		)	(434		)
Long-term debt	$	12,875		$	13,489

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Share-Based Compensation Expense (Tables)

9 Months Ended

Dec. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

hare-based compensation expense under the stock incentive plans is included in the Company’s Condensed Consolidated Statements of Operations as follows:

	Fiscal quarter ended				Three fiscal quarters ended
(In thousands)	Dec 30, 2017		Dec 31, 2016		Dec 30, 2017		Dec 31, 2016
Cost of sales	$	64	$	142	$	208	$	398
Selling, general and administrative	498		1,391		2,629		3,573
Research, development and engineering	151		285		484		656
Total share-based compensation expense	$	713	$	1,818	$	3,321	$	4,627

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Product and Geographic Information (Tables)

9 Months Ended

Dec. 30, 2017

Product ang Geographic Information Reporting [Abstract]

Revenue from External Customers by Products and Services [Table Text Block]

	Fiscal quarter ended				Three fiscal quarters ended
(In thousands)	Dec 30, 2017		Dec 31, 2016		Dec 30, 2017		Dec 31, 2016
Printed Circuit Board	$	83,799	$	15,987	$	179,658	$	60,432
Component Test	7,473		5,407		23,331		14,999
Semiconductor	12,351		6,690		31,116		21,521
Industrial Machining	7,217		5,695		20,386		14,153
Net Sales	$	110,840	$	33,779	$	254,491	$	111,105

Revenue from External Customers by Geographic Areas [Table Text Block]

Net sales by geographic area, based on the location of the end user, were as follows:

	Fiscal quarter ended				Three fiscal quarters ended
(In thousands)	Dec 30, 2017		Dec 31, 2016		Dec 30, 2017		Dec 31, 2016
Asia	$	103,069	$	26,015	$	233,685	$	92,184
Americas	2,431		6,210		9,537		11,464
Europe	5,340		1,554		11,269		7,457
Net Sales	$	110,840	$	33,779	$	254,491	$	111,105

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Restructuring and Cost Management Plans (Tables)

9 Months Ended

Dec. 30, 2017

Restructuring and Related Activities [Abstract]

Amounts Related to Restructuring Costs Payable

The following table presents the amounts payable related to the 2017 Corporate Restructuring (in thousands):

	Employee severance and related personnel costs			Site closure costs			Current asset impairments and other gross profit charges(1)			Non-current asset impairments			Other Costs			Total
Balance as of April 2, 2016	$	—		$	—		$	—		$	—		$	—		$	—
Costs incurred	3,588			888			1,669			1,376			66			7,587
Cash payments	(341		)	—			—			—			(66		)	(407		)
Non-cash items	—			—			(1,669		)	(1,376		)	—			(3,045		)
Balance as of April 1, 2017	$	3,247		$	888		$	—		$	—		$	—		$	4,135
Costs incurred	1,284			824			13,278			1,657			175			17,218
Cash (payments) receipts	(3,788		)	(1,389		)	(1,750		)	32			(175		)	(7,070		)
Non-cash items	—			—			(10,876		)	(1,689		)	—			(12,565		)
Balance as of December 30, 2017	$	743		$	323		$	652		$	—		$	—		$	1,718

(1) Asset and facilities costs include inventory charges recorded in cost of sales.

The following table presents the amounts related to restructuring costs payable (in thousands):

Restructuring & cost management amounts payable as of April 2, 2016	$	757
Cash payments and other adjustments	(297		)
Costs incurred	401
Restructuring & cost management amounts payable as of April 1, 2017	861
Cash payments and other adjustments	(380		)
Costs incurred	409
Restructuring & cost management amounts payable as of December 30, 2017	$	890

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Earnings (Loss) Per Share (Tables)

9 Months Ended

Dec. 30, 2017

Earnings Per Share [Abstract]

Reconciliation of Weighted Average Shares Outstanding Used in Calculation of Basic and Diluted Earnings Per Share

The following is a reconciliation of weighted average shares outstanding used in the calculation of basic and diluted earnings (loss) per share:

	Fiscal quarter ended					Three fiscal quarters ended
(In thousands, except per share data)	Dec 30, 2017		Dec 31, 2016			Dec 30, 2017		Dec 31, 2016
Net income (loss)	$	33,973	$	(9,693	)	$	41,135	$	(19,486	)
Weighted average shares used for basic earnings per share	34,224		32,919			33,839		32,379
Incremental diluted shares	1,786		—			1,723		—
Weighted average shares used for diluted earnings per share	36,010		32,919			35,562		32,379
Net income (loss) per share:
Basic	$	0.99	$	(0.29	)	$	1.22	$	(0.60	)
Diluted	$	0.94	$	(0.29	)	$	1.16	$	(0.60	)

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Basis of Presentation Cash and Cash Equivalents and Restricted Cash reconciliation (Details) - USD ($) $ in Thousands	Dec. 30, 2017	Apr. 01, 2017	Dec. 31, 2016	Apr. 02, 2016
Cash and Cash Equivalents [Line Items]
Cash and Cash Equivalents, at Carrying Value	$ 62,251	$ 56,642	$ 44,891
Restricted Cash	1,087	1,090	0
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	$ 63,338	$ 57,732	$ 44,891	$ 42,413

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Fair Value Measurements - Investments (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 30, 2017	Apr. 01, 2017
Available For Sale Securities Current [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities	$ 40,973	$ 10,688
Available-for-sale Securities, Amortized Cost Basis	40,992	10,688
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	0	0
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	(19)	0
Available For Sale Securities Current [Member] | US Treasury Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities	10,447
Available-for-sale Securities, Amortized Cost Basis	10,465
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	0
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	(18)
Available For Sale Securities Current [Member] | Commercial Paper [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities	28,322	10,688
Available-for-sale Securities, Amortized Cost Basis	28,322	10,688
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	0	0
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	0	0
Available For Sale Securities Current [Member] | Corporate Bond Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Gross Unrealized Loss	(1)
Available-for-sale Securities	2,204
Available-for-sale Securities, Amortized Cost Basis	2,205
Available-for-sale Securities, Gross Unrealized Gain	0
Available For Sale Securities Current [Member] | Repurchase Agreements [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Gross Unrealized Loss	0
Available-for-sale Securities	0
Available-for-sale Securities, Amortized Cost Basis	0
Available-for-sale Securities, Gross Unrealized Gain	0
Available For Sale Securities Non Current [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities	3,593	3,058	[1]
Available-for-sale Securities, Amortized Cost Basis	3,322	2,974	[1]
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	271	84	[1]
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	0	0	[1]
Available For Sale Securities Non Current [Member] | Exchange traded funds and money market securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities	3,593	3,058	[1]
Available-for-sale Securities, Amortized Cost Basis	3,322	2,974	[1]
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	271	84	[1]
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	$ 0	$ 0	[1]

[1] *These investments represent assets held in trust for the deferred compensation plan

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Fair Value Measurements Fair Value Hierarchy (Details) - USD ($) $ in Thousands		Dec. 30, 2017	Apr. 01, 2017
Cash Equivalents [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		$ 28,686	$ 27,340
Cash Equivalents [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		24,537	22,395
Cash Equivalents [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		4,149	4,945
Cash Equivalents [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		0	0
Cash Equivalents [Member] | Money Market Instruments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		24,537	22,395
Cash Equivalents [Member] | Money Market Instruments [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		24,537	22,395
Cash Equivalents [Member] | Commercial Paper [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		4,149	4,945
Cash Equivalents [Member] | Commercial Paper [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure			0
Cash Equivalents [Member] | Commercial Paper [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		4,149	4,945
Short-term Investments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		36,824	5,743
Short-term Investments [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		10,447	0
Short-term Investments [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		26,377	5,743
Short-term Investments [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		0	0
Short-term Investments [Member] | Commercial Paper [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		24,173	5,743
Short-term Investments [Member] | Commercial Paper [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		0	0
Short-term Investments [Member] | Commercial Paper [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		24,173	5,743
Short-term Investments [Member] | Commercial Paper [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		0	0
Short-term Investments [Member] | Corporate Bond Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		2,204
Short-term Investments [Member] | Corporate Bond Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		0
Short-term Investments [Member] | Corporate Bond Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		2,204
Short-term Investments [Member] | Corporate Bond Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		0
Short-term Investments [Member] | US Treasury Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		10,447
Short-term Investments [Member] | US Treasury Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		10,447
Short-term Investments [Member] | US Treasury Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		0
Short-term Investments [Member] | US Treasury Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		0
Foreign Exchange Forward [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Obligations, Fair Value Disclosure			(18)
Foreign Exchange Forward [Member] | Forward Contracts [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Obligations, Fair Value Disclosure			0
Foreign Exchange Forward [Member] | Forward Contracts [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Obligations, Fair Value Disclosure			(18)
Foreign Exchange Forward [Member] | Forward Contracts [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Obligations, Fair Value Disclosure			0
Foreign Exchange Forward [Member] | Forward Contracts [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Obligations, Fair Value Disclosure		(72)
Foreign Exchange Forward [Member] | Forward Contracts [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Obligations, Fair Value Disclosure		0
Foreign Exchange Forward [Member] | Forward Contracts [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Obligations, Fair Value Disclosure		(72)
Foreign Exchange Forward [Member] | Forward Contracts [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Obligations, Fair Value Disclosure		0
Deferred Compensation Plan Asset [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred Compensation Plan Assets	[1]	3,593	3,058
Deferred Compensation Plan Asset [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred Compensation Plan Assets	[1]	3,593	3,058
Deferred Compensation Plan Asset [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred Compensation Plan Assets	[1]	0	0
Deferred Compensation Plan Asset [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred Compensation Plan Assets	[1]	0	0
Deferred Compensation Plan Asset [Member] | Exchange Traded Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred Compensation Plan Assets		2,634	845
Deferred Compensation Plan Asset [Member] | Exchange Traded Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred Compensation Plan Assets	[1]	2,634	845
Deferred Compensation Plan Asset [Member] | Exchange Traded Funds [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred Compensation Plan Assets	[1]	0	0
Deferred Compensation Plan Asset [Member] | Exchange Traded Funds [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred Compensation Plan Assets	[1]	0	0
Deferred Compensation Plan Asset [Member] | Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred Compensation Plan Assets	[1]	959	2,213
Deferred Compensation Plan Asset [Member] | Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred Compensation Plan Assets	[1]	959	2,213
Deferred Compensation Plan Asset [Member] | Money Market Funds [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred Compensation Plan Assets	[1]	0	0
Deferred Compensation Plan Asset [Member] | Money Market Funds [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred Compensation Plan Assets	[1]	0	0
Japan, Yen | Foreign Exchange Forward [Member] | Forward Contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure			9
Obligations, Fair Value Disclosure		(1)
Japan, Yen | Foreign Exchange Forward [Member] | Forward Contracts [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure			9
Obligations, Fair Value Disclosure		(1)
Taiwan, New Dollars | Foreign Exchange Forward [Member] | Forward Contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		11	20
Taiwan, New Dollars | Foreign Exchange Forward [Member] | Forward Contracts [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure		11	20
Korea (South), Won | Foreign Exchange Forward [Member] | Forward Contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure			39
Obligations, Fair Value Disclosure		(4)
Korea (South), Won | Foreign Exchange Forward [Member] | Forward Contracts [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure			39
Obligations, Fair Value Disclosure		(4)
Euro Member Countries, Euro | Foreign Exchange Forward [Member] | Forward Contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Obligations, Fair Value Disclosure		(14)	(96)
Euro Member Countries, Euro | Foreign Exchange Forward [Member] | Forward Contracts [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Obligations, Fair Value Disclosure		(14)	(96)
United Kingdom, Pounds | Forward Contracts [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure			16
United Kingdom, Pounds | Foreign Exchange Forward [Member] | Forward Contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Obligations, Fair Value Disclosure		(13)	(16)
United Kingdom, Pounds | Foreign Exchange Forward [Member] | Forward Contracts [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Obligations, Fair Value Disclosure		(13)
China, Yuan Renminbi | Foreign Exchange Forward [Member] | Forward Contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Obligations, Fair Value Disclosure		(51)	(5)
China, Yuan Renminbi | Foreign Exchange Forward [Member] | Forward Contracts [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Obligations, Fair Value Disclosure		$ (51)	(5)
Singapore, Dollars | Foreign Exchange Forward [Member] | Forward Contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Obligations, Fair Value Disclosure			(1)
Singapore, Dollars | Foreign Exchange Forward [Member] | Forward Contracts [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Obligations, Fair Value Disclosure			$ (1)

[1] *These investments represent assets held in trust for the deferred compensation plan

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Trade Accounts Receivable (Details) - USD ($) $ in Thousands	Dec. 30, 2017	Apr. 01, 2017
Trade Accounts Receivable [Abstract]
Accounts Receivable, Net, Noncurrent	$ 65	$ 489
Accounts Receivable, Net, Current	75,674	40,494
Accounts Receivable, Net	$ 75,739	$ 40,983

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Inventories - Components of Inventories (Details) - USD ($) $ in Thousands	Dec. 30, 2017	Apr. 01, 2017
Inventory Disclosure [Abstract]
Raw materials and purchased parts	$ 50,720	$ 41,383
Work-in-process	18,737	13,829
Finished goods	5,045	3,730
Inventories	$ 74,502	$ 58,942

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Other Assets (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 30, 2017	Dec. 31, 2016	Dec. 30, 2017	Dec. 31, 2016	Apr. 01, 2017
Other Assets, Noncurrent Disclosure [Abstract]
Demo equipment depreciation expense	$ 600	$ 100	$ 800	$ 300
Consignment and demo equipment, net	8,636		8,636		$ 11,011
Long term deposits	2,620		2,620		2,872
Restricted Cash, Noncurrent	1,087		1,087		1,090
Deferred Income Taxes and Other Assets, Noncurrent	827		827		890
Accounts Receivable, Net	75,739		75,739		40,983
Other	4,169		4,169		3,958
Other assets	$ 17,339		$ 17,339		$ 19,821

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Other Assets - Additional Information (Details) - USD ($) $ in Thousands	Dec. 30, 2017	Apr. 01, 2017
Schedule of Cost-method Investments [Line Items]
Consignment and demo equipment, net	$ 8,636	$ 11,011

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Other Assets Other assets other details (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 30, 2017	Dec. 31, 2016	Dec. 30, 2017	Dec. 31, 2016
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Demo equipment depreciation expense	$ 0.6	$ 0.1	$ 0.8	$ 0.3

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Accrued Liabilities (Details) - USD ($) $ in Thousands	Dec. 30, 2017	Apr. 01, 2017
Disclosure Accrued Liabilities [Abstract]
Payroll-related liabilities	$ 12,841	$ 6,335
Product Warranty Accrual, Current	4,506	3,394
Customer Deposits, Current	11,431	1,242
Purchase order commitments and receipts	3,014	2,522
Accrued Professional Fees, Current	832	734
Long-term Debt, Current Maturities	415	434
Restructuring Reserve	2,608	4,996
Other	4,744	2,529
Accrued liabilities	$ 40,391	$ 22,186

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Product Warranty (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 30, 2017	Dec. 31, 2016	Dec. 30, 2017	Dec. 31, 2016
Product Warranty
Standard and Extended Product Warranty Accrual	$ 7,156	$ 5,521	$ 5,474	$ 5,734
Warranty charges incurred, net	(3,273)	(1,674)	(8,384)	(4,988)
Provision for warranty charges	5,067	1,064	11,860	4,165
Standard and Extended Product Warranty Accrual	8,950	4,911	8,950	4,911
Product Warranty Accrual, Noncurrent	$ 4,544	$ 800	$ 4,544	$ 800
Document Period End Date			Dec. 30, 2017

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Deferred Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 30, 2017	Dec. 31, 2016	Dec. 30, 2017	Dec. 31, 2016
Deferred Revenue Disclosure [Abstract]
Deferred Revenue, Period Start	$ 15,616	$ 11,583	$ 15,397	$ 7,685
Deferred Revenue, Noncurrent	405	400	405	400
Revenue deferred	51,191	9,075	66,661	28,547
Revenue recognized	(54,420)	(9,440)	(69,671)	(25,014)
Deferred Revenue, Period Start	$ 12,387	$ 11,218	$ 12,387	$ 11,218

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Long-term Debt (Details) - USD ($) $ in Thousands	Dec. 30, 2017	Apr. 01, 2017
Debt Disclosure [Abstract]
Debt Issuance Costs, Net	$ 311	$ 337

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Long-term Debt Long-term debt table (Details) - USD ($) $ in Thousands	Dec. 30, 2017	Apr. 01, 2017
Debt Instrument [Line Items]
Long-term Debt, Gross	$ 13,290	$ 13,923
Long-term Debt, Current Maturities	(415)	(434)
Long-term Debt	$ 12,875	$ 13,489

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Long-term Debt Maturities of LT Debt (Details) $ in Thousands	Dec. 30, 2017 USD ($)
Debt Disclosure [Abstract]
Held-to-maturity Securities, Debt Maturities, Next Twelve Months, Fair Value	$ 449
Long-term Debt, Maturities, Repayments of Principal in Year Four	518
Long-term Debt, Maturities, Repayments of Principal in Year Three	492
Long-term Debt, Maturities, Repayments of Principal in Year Two	471
Long-term Debt, Maturities, Repayments of Principal in Year Five	$ 543

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Shareholders' Equity - Share repurchase (Details) $ in Millions	Dec. 09, 2011 USD ($)
Statement of Stockholders' Equity [Abstract]
Stock Repurchase Program, Authorized Amount	$ 20.0

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Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 30, 2017	Dec. 31, 2016	Dec. 30, 2017	Dec. 31, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other Comprehensive Income (Loss), before Reclassifications, before Tax			$ 963
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax			0
Stockholders' Equity Attributable to Parent			144,531
Stockholders' Equity Attributable to Parent	$ 190,807		190,807
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax			1
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax	581	$ (745)	969	$ (884)
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss) Arising During Period, after Tax	4	5	13	14
Other Comprehensive Income (Loss), Net of Tax	568	(742)	964	(876)
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax	(17)	$ (2)	(18)	$ (6)
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other Comprehensive Income (Loss), before Reclassifications, before Tax			961
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax			0
Stockholders' Equity Attributable to Parent			(1,242)
Stockholders' Equity Attributable to Parent	(273)		(273)
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax			8
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other Comprehensive Income (Loss), before Reclassifications, before Tax			20
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax			0
Stockholders' Equity Attributable to Parent			45
Stockholders' Equity Attributable to Parent	58		58
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax			(7)
AOCI Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stockholders' Equity Attributable to Parent			(1,214)
Stockholders' Equity Attributable to Parent	(250)		(250)
Equity Securities [Member] | Accumulated Net Investment Gain (Loss) Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other Comprehensive Income (Loss), before Reclassifications, before Tax			(18)
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax			0
Stockholders' Equity Attributable to Parent			(17)
Stockholders' Equity Attributable to Parent	$ (35)		(35)
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax			$ 0

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Share-Based Compensation - Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 30, 2017	Dec. 31, 2016	Dec. 30, 2017	Dec. 31, 2016
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Total share-based compensation expense	$ 713	$ 1,818	$ 3,321	$ 4,627
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition			2 years 4 months 3 days
Cost of Sales
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Total share-based compensation expense	64	142	$ 208	398
Selling, General and Administrative Expenses
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Total share-based compensation expense	498	1,391	2,629	3,573
Research and Development Expense
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Total share-based compensation expense	151	$ 285	$ 484	$ 656
Restricted Stock Units (RSUs) [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period			442,400
Market-based [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period			222,400
Stock Options
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	$ 8,000		$ 8,000

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Product and Geographic Information Revenue from Product Market (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 30, 2017	Dec. 31, 2016	Dec. 30, 2017	Dec. 31, 2016
Revenue from External Customer [Line Items]
Revenue, Net	$ 110,840	$ 33,779	$ 254,491	$ 111,105
Printed Circuit Board [Member]
Revenue from External Customer [Line Items]
Revenue, Net	83,799	15,987	179,658	60,432
Component Test [Member] [Member]
Revenue from External Customer [Line Items]
Revenue, Net	7,473	5,407	23,331	14,999
Semiconductor [Member]
Revenue from External Customer [Line Items]
Revenue, Net	12,351	6,690	31,116	21,521
Industrial Machining [Member]
Revenue from External Customer [Line Items]
Revenue, Net	$ 7,217	$ 5,695
Industrial Machining [Member]
Revenue from External Customer [Line Items]
Revenue, Net			$ 20,386	$ 14,153

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Product and Geographic Information Revenue from Geographic Location table (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 30, 2017	Dec. 31, 2016	Dec. 30, 2017	Dec. 31, 2016
Revenue from External Customer [Line Items]
Revenue, Net	$ 110,840	$ 33,779	$ 254,491	$ 111,105
Asia [Member]
Revenue from External Customer [Line Items]
Revenue, Net	103,069	26,015	233,685	92,184
Americas [Member]
Revenue from External Customer [Line Items]
Revenue, Net	2,431	6,210	9,537	11,464
Europe [Member]
Revenue from External Customer [Line Items]
Revenue, Net	$ 5,340	$ 1,554	$ 11,269	$ 7,457

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Restructuring and Cost Management Plans - Amounts Related to Restructuring Costs Payable (Details) - USD ($) $ in Thousands		6 Months Ended		9 Months Ended		12 Months Ended
		Jul. 01, 2017		Dec. 30, 2017		Apr. 01, 2017
Restructuring Reserve [Roll Forward]
Restructuring Reserve Start				$ 4,996
Restructuring Reserve End				2,608		$ 4,996
Q4 FY17 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Incurred Cost		$ 24,804		17,218		7,587
Restructuring Reserve [Roll Forward]
Restructuring Reserve Start				4,135		0
Restructuring Reserve End				1,718		4,135
Q4 FY17 Restructuring Plan [Member] | Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Incurred Cost		4,872		1,284		3,588
Restructuring Reserve [Roll Forward]
Restructuring Reserve Start				3,247		0
Restructuring Reserve End				743		3,247
Q4 FY17 Restructuring Plan [Member] | Current Asset Impairments and Other Gross Profit [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Incurred Cost		$ 14,947	[1]	13,278	[2]	1,669	[2]
Restructuring Reserve [Roll Forward]
Restructuring Reserve Start	[2]			0		0
Restructuring Reserve End	[2]			652		0
Q4 FY17 Restructuring Plan [Member] | Site Closures and Non-current Asset Impairments [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Incurred Cost				2,481
Chelmsford Plan [Domain]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Incurred Cost				409		401
Restructuring Reserve [Roll Forward]
Restructuring Reserve Start				861		757
Restructuring Reserve End				$ 890		$ 861

[1] (1) Current asset impairments include inventory charges recorded in cost of sales.

[2] (1) Asset and facilities costs include inventory charges recorded in cost of sales.

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Restructuring and Cost Management Plans Q4 FY17 Restructuring Plan Expected Costs (Details) - Q4 FY17 Restructuring Plan [Member] - USD ($) $ in Thousands		6 Months Ended		9 Months Ended		12 Months Ended
		Jul. 01, 2017		Dec. 30, 2017		Apr. 01, 2017
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost				$ 24,804
Restructuring and Related Cost, Incurred Cost		$ 24,804		17,218		$ 7,587
Restructuring and Related Cost, Expected Cost Remaining				0
Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost				4,872
Restructuring and Related Cost, Incurred Cost		4,872		1,284		3,588
Restructuring and Related Cost, Expected Cost Remaining				0
Site Closures [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost				1,714
Restructuring and Related Cost, Incurred Cost		1,714		824		888
Restructuring and Related Cost, Expected Cost Remaining				0
Current Asset Impairments and Other Gross Profit [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	[1]			14,947
Restructuring and Related Cost, Incurred Cost		14,947	[1]	13,278	[2]	1,669	[2]
Restructuring and Related Cost, Expected Cost Remaining	[1]			0
Non-Current Asset Impairments [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost				3,032
Restructuring and Related Cost, Incurred Cost		3,032		1,657		1,376
Restructuring and Related Cost, Expected Cost Remaining				0
Other Restructuring [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost				239
Restructuring and Related Cost, Incurred Cost		$ 239		175		$ 66
Restructuring and Related Cost, Expected Cost Remaining				$ 0

[1] (1) Current asset impairments include inventory charges recorded in cost of sales.

[2] (1) Asset and facilities costs include inventory charges recorded in cost of sales.

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Restructuring and Cost Management Plans Q4 FY17 Restructuring Plan Accrual Reconciliation (Details) - USD ($) $ in Thousands		6 Months Ended		9 Months Ended		12 Months Ended
		Jul. 01, 2017		Dec. 30, 2017		Apr. 01, 2017		Apr. 02, 2016
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve				$ 2,608		$ 4,996
Q4 FY17 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve				1,718		4,135		$ 0
Restructuring and Related Cost, Incurred Cost		$ 24,804		17,218		7,587
Payments for Restructuring				(7,070)		(407)
Restructuring Reserve, Settled without Cash				(12,565)		(3,045)
Site Closures [Member] | Q4 FY17 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve				323		888		0
Restructuring and Related Cost, Incurred Cost		1,714		824		888
Payments for Restructuring				(1,389)		0
Restructuring Reserve, Settled without Cash				0		0
Current Asset Impairments and Other Gross Profit [Member] | Q4 FY17 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	[1]			652		0		0
Restructuring and Related Cost, Incurred Cost		14,947	[2]	13,278	[1]	1,669	[1]
Payments for Restructuring	[1]			(1,750)		0
Restructuring Reserve, Settled without Cash	[1]			(10,876)		(1,669)
Non-Current Asset Impairments [Member] | Q4 FY17 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve				0		0		0
Restructuring and Related Cost, Incurred Cost		3,032		1,657		1,376
Payments for Restructuring						0
Cash receipt for disposal of restructured assets				32
Restructuring Reserve, Settled without Cash				(1,689)		(1,376)
Other Restructuring [Member] | Q4 FY17 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve				0		0		0
Restructuring and Related Cost, Incurred Cost		239		175		66
Payments for Restructuring				(175)		(66)
Restructuring Reserve, Settled without Cash				0		0
Employee Severance [Member] | Q4 FY17 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve				743		3,247		$ 0
Restructuring and Related Cost, Incurred Cost		$ 4,872		1,284		3,588
Payments for Restructuring				(3,788)		(341)
Restructuring Reserve, Settled without Cash				$ 0		$ 0

[1] (1) Asset and facilities costs include inventory charges recorded in cost of sales.

[2] (1) Current asset impairments include inventory charges recorded in cost of sales.

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Restructuring and Cost Management Plans Chelmsford Restructuring Plan Accrual (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Dec. 30, 2017	Apr. 01, 2017	Apr. 02, 2016
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	$ 2,608	$ 4,996
Chelmsford Plan [Domain]
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	890	861	$ 757
Payments for Restructuring	(380)	(297)
Restructuring and Related Cost, Incurred Cost	$ 409	$ 401

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Earnings (Loss) Per Share - Reconciliation of Weighted Average Shares Outstanding Used in Calculation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 30, 2017	Dec. 31, 2016	Dec. 30, 2017	Dec. 31, 2016
Earnings Per Share [Abstract]
Net income (loss)	$ 33,973	$ (9,693)	$ 41,135	$ (19,486)
Weighted average number of shares - basic	34,224	32,919	33,839	32,379
Weighted Average Number Diluted Shares Outstanding Adjustment	1,786	0	1,723	0
Net (loss) income per share - basic	$ 0.99	$ (0.29)	$ 1.22	$ (0.60)
Net (loss) income per share - diluted	$ 0.94	$ (0.29)	$ 1.16	$ (0.60)

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Earnings (Loss) Per Share - Additional Information (Details) - shares shares in Millions	3 Months Ended		9 Months Ended
	Dec. 30, 2017	Dec. 31, 2016	Dec. 30, 2017	Dec. 31, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share
Number of shares that are not included in the calculation of diluted net earnings per share	0.1	2.8	0.4	2.5

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Business Acquisitions - Allocation of Purchase Price of Assets Acquired and Liabilities Assumed Based on the Fair Value (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Aug. 01, 2016	Dec. 30, 2017	Dec. 31, 2016	Dec. 30, 2017	Dec. 31, 2016	Apr. 01, 2017	Jan. 15, 2015
Business Acquisition [Line Items]
Allocated acquisition related compensation expenses - share based		$ 1,700		$ 1,700
Goodwill		2,626		2,626		$ 3,027
Business Combination, Integration Related Costs		$ 0	$ 31	$ 0	$ 366
Business Combination Recognized Identifiable Assets Acquired And Liabilities Assumed Current Assets Receivables Allowance							$ 268
Visicon [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables	$ 391
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory	982
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net	6,200
Payments to Acquire Businesses, Gross	116
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment	$ 737
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares	603,939
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned	$ 4,200
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	3,300
Goodwill	2,626
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities	(1,952)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Assets	$ 26

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Business Acquisitions Business Acquisition details (Details) - Visicon [Member] $ in Thousands	Aug. 01, 2016 USD ($) shares
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	$ 3,300
Payments to Acquire Businesses, Gross	$ 2,000
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares	603,939
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned	$ 4,200
Developed Technology Rights [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	$ 2,000