DEBT

9 Months Ended

Jul. 28, 2024

DEBT [Abstract]

DEBT

NOTE 7 - DEBT

As of July 28, 2024, the Current portion of long-term debt and the long-term debt balances were comprised of finance leases as described below:

As of July 28, 2024	Finance Leases
Principal due:
Next 12 months	$	20,090
Months 13 – 24	$	12
Months 25 – 36		12
Months 37 – 48		4
Months 49 – 60		-
Long-term debt		28
Total debt	$	20,118
Interest rate at balance sheet date		N/A
Basis spread on interest rates		N/A
Interest rate reset		N/A
Maturity date		N/A
Periodic payment amount		Varies as Lease matures
Periodic payment frequency	Monthly
Loan collateral (carrying amount)	$	33,038	(1)

⁽¹⁾ Represents the carrying amount at the balance sheet date of the related ROU assets, in which the lessors have secured interests.

The table below provides information on our long-term debt as of October 31, 2023.

As of October 31, 2023	Finance Leases
Principal due:
Next 12 months	$	6,621
Months 13 – 24	$	17,972
Months 25 – 36		12
Months 37 – 48		13
Months 49 – 60		1
Long-term debt		17,998
Total debt	$	24,619
Interest rate at balance sheet date		N/A
Basis spread on interest rates		N/A
Interest rate reset		N/A
Maturity date		N/A
Periodic payment amount		Varies as Lease matures
Periodic payment frequency		Monthly
Loan collateral (carrying amount)	$	35,165	(1)

⁽¹⁾ Represents the carrying amount at the balance sheet date of the related ROU assets, in which the lessors have secured interests.

Finance Leases

In February 2021, we entered into a five-year $7.2 million finance lease for a high-end inspection tool. Monthly payments on the lease, which commenced in February 2021, are $0.1 million per month. Upon the payment of the fiftieth monthly payment and prior to payment of the fifty-first monthly payment, we may exercise an early buyout option to purchase the tool for $2.4 million. At our option, after the original term or any renewal periods, we may return the tool, elect to extend the lease, or purchase the tool at its fair market value. Since we are reasonably certain that we will exercise the early buyout option, our lease liability reflects such exercise, and we have classified the lease as a finance lease. The interest rate implicit in the lease is 1.08%. Management has determined that the Company will exercise its early buyout option during the first half of 2025 in order to take advantage of the favorable early buyout price.

In December 2020, we entered into a five-year $35.5 million finance lease for a high-end lithography tool. Monthly payments on the lease, which commenced in January 2021, increased from $0.04 million during the first three months to $0.6 million for the following nine months, followed by forty-eight monthly payments of $0.5 million. The lease agreement contains covenants around minimum interest coverage ratio, total leverage ratio, and minimum unrestricted cash balance, and limits the amount of cash dividends, distributions, and redemptions we can pay on our common stock to an aggregate annual amount of $50 million and includes a cross-default provision for any agreement or instrument with an outstanding, committed balance greater than $5.0 million in which we are the indebted party. As of the due date of the forty-eighth monthly payment, we may exercise an early buyout option to purchase the tool for $14.1 million. At our option, after the original term, we may return the tool, elect to extend the lease term for a period and a lease payment to be agreed with lessor at the time, or purchase the tool for its then-fair market value, as determined by the lessor. Since we are reasonably certain that we will exercise the early buyout option, our lease liability reflects such exercise, and we have classified the lease as a finance lease. The interest rate implicit in the lease is 1.58%. The Company notified the lender in June 2024 that it will exercise the early buyout option in the first half of 2025 in order to take advantage of the favorable early buyout price. 

Xiamen Working Capital Loans

In November 2018, PDMCX obtained approval for revolving, unsecured credit in an aggregate principal amount equivalent to $25.0 million, pursuant to which PDMCX may enter into separate loan agreements with varying terms to maturity. In December 2022, we repaid our entire outstanding balance of RMB 25.6 million ($3.6 million). The interest rates are variable, based on the RMB Loan Prime Rate of the National Interbank Funding Center. Interest incurred on the loans related to the amount borrowed was eligible for reimbursement through incentives provided by the Xiamen Torch Hi-Tech Industrial Development Zone, which provided for such reimbursements up to a prescribed limit and duration. This facility is subject to annual reviews and extensions. As of July 28, 2024, PDMCX had no outstanding borrowings against the approval.

In August 2024, the Company was issued an extension to the revolving, unsecured credit agreement for RMB 200,000,000 (approximately $27.6 million) with an expiration date of July 31, 2025. As of the date of this report, there were no draw downs on this extension.