What changed in this filing

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Item 1. Financial Statements

2024-08-07 compared with 2024-05-07 · 130 added, 79 removed, 495 unchanged (30% of the section changed)

47 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended

2024 April 1,

Three Months Ended Six Months Ended

2023 June 29,

Revenues $ 197,474 $ 155,916 $ 366,199 $ 323,364

6 unchanged sentences

Gain on sale of business 310 — 20,581 —

Operating income 21,303 91

Operating income (loss) 17,772 ( 1,312 ) 39,075 ( 1,221 )

Interest income, net 3,415 1,482 6,571 2,758

1 unchanged sentence

Income before income taxes 21,547 620 46,526 2,010

Provision for income taxes 3,198 48

Provision (benefit) for income taxes 2,155 ( 208 ) 5,353 ( 160 )

Net income $ 19,392 $ 828 $ 41,173 $ 2,170

9 unchanged sentences

(In thousands)

Three Months Ended

2024 April 1,

Three Months Ended Six Months Ended

2023 June 29,

Net income $ 19,392 $ 828 $ 41,173 $ 2,170

14 unchanged sentences

(Deficit) Total

Three Months Ended March 30, 2024

Three Months Ended June 29, 2024

Balances, March 30, 2024

77,241,118 $ 77 $ 857,326 $ ( 6,765 ) $ 73,112 $ 923,750

Issuance of common stock pursuant to vesting of restricted stock units, net of stock withheld for tax 112,129 — ( 1,729 ) — — ( 1,729 )

Purchase and retirement of common stock through repurchase program ( 72,195 ) — ( 2,904 ) — — ( 2,904 )

Stock-based compensation — — 10,590 — — 10,590

Other comprehensive loss — — — ( 1,183 ) — ( 1,183 )

Net income — — — — 19,392 19,392

Balances, June 29, 2024

77,281,052 $ 77 $ 863,283 $ ( 7,948 ) $ 92,504 $ 947,916

Six Months Ended June 29, 2024

Balances, December 30, 2023

77,376,903 $ 77 $ 861,448 $ ( 4,052 ) $ 51,331 $ 908,804

Issuance of common stock under the Employee Stock Purchase Plan 197,014 — 4,948 — — 4,948

4 unchanged sentences

Net income — — — — 41,173 41,173

Balances, March 30, 2024 77,241,118 $ 77 $ 857,326 $ ( 6,765 ) $ 73,112 $ 923,750

Three Months Ended April 1, 2023

Balances, June 29, 2024

77,281,052 $ 77 $ 863,283 $ ( 7,948 ) $ 92,504 $ 947,916

Three Months Ended July 1, 2023

Balances, April 1, 2023 77,142,023 $ 77 $ 858,195 $ ( 4,186 ) $ ( 29,714 ) $ 824,372

Issuance of common stock pursuant to vesting of restricted stock units, net of stock withheld for tax 41,989 — ( 69 ) — — ( 69 )

Stock-based compensation — — 9,391 — — 9,391

Other comprehensive loss — — — ( 259 ) — ( 259 )

Net income — — — — 828 828

Balances, July 1, 2023

77,184,012 $ 77 $ 867,517 $ ( 4,445 ) $ ( 28,886 ) $ 834,263

Six Months Ended July 1, 2023

Balances, December 31, 2022 76,914,590 $ 77 $ 844,842 $ ( 5,578 ) $ ( 31,056 ) $ 808,285

4 unchanged sentences

Net income — — — — 2,170 2,170

Balances, April 1, 2023 77,142,023 $ 77 $ 858,195 $ ( 4,186 ) $ ( 29,714 ) $ 824,372

Balances, July 1, 2023

77,184,012 $ 77 $ 867,517 $ ( 4,445 ) $ ( 28,886 ) $ 834,263

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

2 unchanged sentences

(In thousands)

Three Months Ended

2024 April 1,

Six Months Ended

Cash flows from operating activities:

34 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 2,826 ) ( 1,958 )

Net increase in cash, cash equivalents and restricted cash 13,108 2,872

Cash, cash equivalents and restricted cash, beginning of period 181,273 112,982

Cash, cash equivalents and restricted cash, end of period $ 194,381 $ 115,854

Net increase (decrease) in cash, cash equivalents and restricted cash 22,678 ( 11,592 )

Cash, cash equivalents and restricted cash, beginning of year 181,273 112,982

Cash, cash equivalents and restricted cash, end of year $ 203,951 $ 101,390

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

2 unchanged sentences

(In thousands)

Three Months Ended

2024 April 1,

Six Months Ended

Non-cash investing and financing activities:

8 unchanged sentences

Restricted cash, current 5,939 1,144

Restricted cash, non-current 2,220 2,287

Restricted cash 2,098 2,265

Total cash, cash equivalents and restricted cash $ 203,951 $ 101,390

10 unchanged sentences

We operate on a 52/53 week fiscal year, whereby the fiscal year ends on the last Saturday of December.

Fiscal 2024 and 2023 each contain 52 weeks and the three months ended March 30, 2024 and April 1, 2023 each contained 13 weeks.

Fiscal 2024 and 2023 each contain 52 weeks and the six months ended June 29, 2024 and July 1, 2023 each contained 26 weeks.

Fiscal 2024 will end on December 28 , 2024.

Significant Accounting Policies

Our significant accounting policies have not changed during the three months ended March 30, 2024 from those disclosed in our Annual Report on Form 10-K for the year ended December 30, 2023.

Reclassifications

Certain immaterial reclassifications were made to the prior year financial statements to conform to the current year presentation.

Our significant accounting policies have not changed during the six months ended June 29, 2024 from those disclosed in our Annual Report on Form 10-K for the year ended December 30, 2023.

New Accounting Pronouncements

12 unchanged sentences

Each of the following customers accounted for 10 % or more of our revenues for the periods indicated:

Three Months Ended

2024 April 1,

Intel Corporation 15.7 % 20.0 %

Three Months Ended Six Months Ended

2023 June 29,

SK hynix Inc.

Samsung Electronics., LTD.

19.5 % * 17.6 % *

At March 30, 2024 and December 30, 2023, two customers accounted for 19.0 % and 13.5 % and two customers accounted for 17.8 % and 11.0 % of gross accounts receivable, respectively.

Intel Corporation 16.7 % 14.2 % 16.3 % 17.2 %

36.2 % 14.2 % 33.9 % 17.2 %

* Less than 10% of revenues.

At June 29, 2024 and December 30, 2023, two customers accounted for 21.2 % and 11.2 % and two customers accounted for 17.8 % and 11.0 % of gross accounts receivable, respectively.

Note 3 — Inventories, net

13 unchanged sentences

Ltd., Cascade Microtech Singapore Pte, Ltd, and FormFactor International (Shanghai) Trading Co., Ltd.

These entities supported the Probe Cards and Systems segments.

These entities supported both the Probe Cards and Systems segments.

On February 26, 2024, we closed on the sale of the operations in China to Grand Junction and received total consideration of $ 21.4 million, net of cash transferred and transaction expenses, and after customary adjustments for indebtedness and changes in net working capital.

The disposition of the China operations did not meet the criteria to be classified as a discontinued operation in the Company’s financial statements because the disposition did not represent a strategic shift that had, or will have, a major effect on the Company’s operations and financial results.

The following table summarizes the fair value of the sale proceeds received in connection with the divestiture, which are subject to further post-closing adjustment (in thousands):

The following table summarizes the fair value of the sale proceeds received in connection with the divestiture (in thousands):

February 26, 2024

Gross purchase price $ 25,000

Estimated working capital adjustment

Working capital adjustment

Cash transferred to the buyer at closing ( 2,743 )

24 unchanged sentences

On November 1, 2023, we closed on the sale of the FRT business to Camtek and received net cash proceeds of $ 100.1 million, net of cash transferred and transaction expenses, and after customary adjustments for indebtedness and changes in net working capital.

The disposition of the FRT business did not meet the criteria to be classified as a discontinued operation in the Company’s financial statements because the disposition did not represent a strategic shift that had, or will have, a major effect on the Company’s operations and financial results.

The following table summarizes the fair value of the sale proceeds received in connection with the divestiture (in thousands):

1 unchanged sentence

Gross purchase price $ 99,100

Working capital adjustment

Estimated working capital adjustment 4,266

Cash transferred to the buyer at closing ( 2,049 )

Direct costs to sell ( 1,225 )

Fair value of sale consideration, net

Fair value of sale consideration $ 100,092

The carrying amount of net assets associated with the FRT business was approximately $ 26.8 million.

21 unchanged sentences

Goodwill, as of December 30, 2023

178,424 22,666 201,090

Reduction - China divestiture ( 1,055 ) ( 62 ) ( 1,117 )

Foreign currency translation — ( 425 ) ( 425 )

Goodwill, as of March 30, 2024 $ 177,369 $ 22,284 $ 199,653

We have no t recorded goodwill impairments for the three months ended March 30, 2024.

Goodwill, as of June 29, 2024

$ 177,369 $ 22,179 $ 199,548

We have no t recorded goodwill impairments for the six months ended June 29, 2024.

Intangible assets were as follows (in thousands):

March 30, 2024 December 30, 2023

June 29, 2024 December 30, 2023

Intangible Assets Gross Accumulated

2 unchanged sentences

Existing developed technologies $ 159,258 $ 149,008 $ 10,250 $ 159,593 $ 148,445 $ 11,148

Customer relationships 47,945 46,816 1,129 48,022 46,712 1,310

Trade name 7,770 7,712 58 7,808 7,728 80

Customer relationships 47,920 46,971 949 48,022 46,712 1,310

In-process research and development 400 — 400 400 — 400

1 unchanged sentence

Amortization expense was included in our Condensed Consolidated Statements of Income as follows (in thousands):

Three Months Ended

2024 April 1,

Three Months Ended Six Months Ended

2023 June 29,

Cost of revenues $ 449 $ 838 $ 898 $ 1,669

10 unchanged sentences

Accrued income and other taxes 5,877 8,205

Accrued employee stock purchase plan contributions withheld 4,727 4,263

Accrued warranty 3,359 3,177

Employee stock purchase plan contributions withheld 1,829 4,263

Other accrued expenses 3,695 5,319

6 unchanged sentences

• Level 3 valuations utilize unobservable inputs to the valuation methodology and include our own data about assumptions market participants would use in pricing the asset or liability based on the best information available under the circumstances.

We did not have any transfers of assets or liabilities measured at fair value on a recurring basis to or from Level 1, Level 2 or Level 3 during the three months ended March 30, 2024 or the year ended December 30, 2023.

We did not have any transfers of assets or liabilities measured at fair value on a recurring basis to or from Level 1, Level 2 or Level 3 during the six months ended June 29, 2024 or the year ended December 30, 2023.

The carrying values of Cash, Accounts receivable, net, Restricted cash, Prepaid expenses and other current assets, Accounts payable, and Accrued liabilities approximate fair value due to their short maturities.

No changes were made to our valuation techniques during the first three months of fiscal 2024.

No changes were made to our valuation techniques during the first six months of fiscal 2024.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis were as follows (in thousands):

March 30, 2024 Level 1 Level 2 Total

June 29, 2024 Level 1 Level 2 Total

Cash equivalents:

2 unchanged sentences

Commercial paper — 4,483 4,483

agency securities — 994 994

134,013 5,477 139,490

5 unchanged sentences

61,305 100,405 161,710

Foreign exchange derivative contracts — 61 61

Interest rate swap derivative contract — 2,170 2,170

Interest rate swap derivative contracts — 2,137 2,137

Total assets $ 195,318 $ 108,019 $ 303,337

13 unchanged sentences

Foreign exchange derivative contracts — 284 284

Interest rate swap derivative contract — 1,989 1,989

Interest rate swap derivative contracts — 1,989 1,989

Total assets $ 161,398 $ 106,943 $ 268,341

27 unchanged sentences

The fair value of our foreign exchange derivative contracts was determined based on current foreign currency exchange rates and forward points.

All of our foreign exchange derivative contracts outstanding at March 30, 2024 will mature by the first quarter of fiscal 2025.

The following table provides information about our foreign currency forward contracts outstanding as of March 30, 2024 (in thousands):

All of our foreign exchange derivative contracts outstanding at June 29, 2024 will mature by the second quarter of fiscal 2025.

The following table provides information about our foreign currency forward contracts outstanding as of June 29, 2024 (in thousands):

Currency Contract Position Contract Amount

(Local Currency) Contract Amount

Euro Dollar Buy 26,916 $ 29,357

Euro Buy 29,118 $ 31,562

Japanese Yen Sell 2,422,207 15,125

4 unchanged sentences

We measure and report our non-financial assets such as Property, plant and equipment, Goodwill and Intangible assets at fair value on a non-recurring basis if we determine these assets to be impaired or in the period when we make a business acquisition.

There were no assets or liabilities measured at fair value on a nonrecurring basis during the three months ended March 30, 2024 or April 1, 2023.

There were no assets or liabilities measured at fair value on a nonrecurring basis during the three and six months ended June 29, 2024 or July 1, 2023.

Note 8 — Warranty

7 unchanged sentences

Changes in our warranty liability were as follows (in thousands):

Three Months Ended

2024 April 1,

Balance at beginning of period $ 3,177 $ 4,199

Six Months Ended

Balance at beginning of year $ 3,177 $ 4,199

Accruals 4,361 2,934

13 unchanged sentences

Net property, plant and equipment 137,989 137,263

Construction-in-process 69,724 67,136

Construction-in-progress 66,113 67,136

Total $ 204,102 $ 204,399

6 unchanged sentences

During fiscal 2023 we repurchased and retired 32,020 shares of common stock for $ 1.2 million.

During the three months ended March 30, 2024, we repurchased and retired 411,756 shares of common stock for $ 17.4 million (including excise tax accrued), and as of March 30, 2024, $ 56.4 million remained available for future repurchases.

During the six months ended June 29, 2024, we repurchased and retired 483,951 shares of common stock for $ 20.3 million, and as of June 29, 2024, $ 53.5 million remained available for future repurchases.

Our policy related to repurchases of our common stock is to charge the excess of cost over par value to additional paid-in capital once the shares are retired.

The net share repurchases are subject to a 1% excise tax under the Inflation Reduction Act.

Share repurchases are subject to an excise tax enabled by the Inflation Reduction Act that is generally 1% of the fair market value of the shares repurchased at the time of the repurchase, net of the fair market value of certain new stock issuances during the same taxable year.

Certain exceptions apply to the excise tax.

The excise tax incurred reduces the amount available under the repurchase programs, as applicable, and is included in the cost of shares repurchased in the Condensed Consolidated Statement of Stockholders Equity.

4 unchanged sentences

RSUs at December 30, 2023

2,165,729 $ 35.85

Awards granted 149,829 54.41

1 unchanged sentence

Awards forfeited ( 22,393 ) 33.36

RSUs at March 30, 2024 2,054,053 36.16

RSUs at June 29, 2024

2,026,255 37.79

Performance Restricted Stock Units

We may grant Performance RSUs (“PRSUs”) to certain executives, which vest based upon us achieving certain market performance criteria.

There were no market based PRSUs granted during the three months ended March 30, 2024.

There were no market based PRSUs granted during the six months ended June 29, 2024.

PRSUs are included as part of the RSU activity above.

1 unchanged sentence

Information related to activity under our Employee Stock Purchase Plan (“ESPP”) was as follows:

Three Months Ended

March 30, 2024

Six Months Ended

June 29, 2024

Shares issued 197,014

3 unchanged sentences

Stock-based compensation was included in our Condensed Consolidated Statements of Income as follows (in thousands):

Three Months Ended

2024 April 1,

Three Months Ended Six Months Ended

2023 June 29,

Cost of revenues $ 1,932 $ 1,515 $ 3,860 $ 3,425

3 unchanged sentences

Unrecognized Compensation Costs

At March 30, 2024, the unrecognized stock-based compensation was as follows (dollars in thousands):

Unrecognized Expense Average Expected

At June 29, 2024, the unrecognized stock-based compensation was as follows (dollars in thousands):

Average Expected

Recognition Period

5 unchanged sentences

The following table reconciles the shares used in calculating basic net income per share and diluted net income per share (in thousands):

Three Months Ended

2024 April 1,

Three Months Ended Six Months Ended

2023 June 29,

Weighted-average shares used in computing basic net income per share 77,235 77,159 77,343 77,112

5 unchanged sentences

Contractual Obligations and Commitments

Our contractual obligations and commitments have not materially changed as of March 30, 2024 from those disclosed in our Annual Report on Form 10-K for the year ended December 30, 2023.

Our contractual obligations and commitments have not materially changed as of June 29, 2024 from those disclosed in our Annual Report on Form 10-K for the year ended December 30, 2023.

Legal Matters

3 unchanged sentences

We lease real estate space under non-cancelable operating lease agreements for commercial and industrial space, as well as for a portion of our corporate headquarters located in Livermore, California.

Our leases have remaining terms of 1 to 11 years, and some leases include options to extend up to 20 years.

We also have operating leases for automobiles with remaining lease terms of 1 to 3 years.

Our leases have remaining terms of 1 year to 10 years, and some leases include options to extend up to 20 years.

We also have operating leases for automobiles with remaining lease terms of 1 year to 2 years.

We did not include any of our renewal options in our lease terms for calculating our lease liability as the renewal options allow us to maintain operational flexibility and we are not reasonably certain we will exercise these options at this time.

The weighted-average remaining lease term for our operating leases was 4 years as of March 30, 2024 and the weighted-average discount rate was 4.64 %.

The weighted-average remaining lease term for our operating leases was 4.2 years as of June 29, 2024 and the weighted-average discount rate was 4.65 %.

The components of lease expense were as follows (in thousands):

Three Months Ended

2024 April 1,

Three Months Ended Six Months Ended

2023 June 29,

Lease expense:

3 unchanged sentences

$ 3,187 $ 2,743 $ 6,187 $ 5,598

Future minimum payments under our non-cancelable operating leases were as follows as of March 30, 2024 (in thousands):

Future minimum payments under our non-cancelable operating leases were as follows as of June 29, 2024 (in thousands):

Fiscal Year Amount

8 unchanged sentences

Transaction price allocated to the remaining performance obligations:

On March 30, 2024, we had $ 11.3 million of remaining performance obligations, which were comprised of deferred service contracts, extended warranty contracts, and contracts with overtime revenue recognition that are not yet delivered.

On June 29, 2024, we had $ 9.2 million of remaining performance obligations, which were comprised of deferred service contracts, extended warranty contracts, and contracts with overtime revenue recognition that are not yet delivered.

We expect to recognize approximately 65.1 % of our remaining performance obligations as revenue in the remainder of fiscal 2024, approximately 27.7 % in fiscal 2025, and approximately 7.2 % in fiscal 2026 and thereafter.

5 unchanged sentences

A contract asset is recorded when we have performed under the contract but our right to consideration is conditional on something other than the passage of time.

Contract assets as of March 30, 2024 and December 30, 2023 were $ 5.3 million and $ 3.8 million, respectively, and are reported on the Condensed Consolidated Balance Sheets as a component of Prepaid expenses and other current assets.

Contract assets as of June 29, 2024 and December 30, 2023 were $ 5.1 million and $ 3.8 million, respectively, and are reported on the Condensed Consolidated Balance Sheets as a component of Prepaid expenses and other current assets.

Contract liabilities include payments received and payments due in advance of performance under a contract and are satisfied as the associated revenue is recognized.

Contract liabilities are reported on the Condensed Consolidated Balance Sheets at the end of each reporting period as a component of Deferred revenue and Other liabilities.

Contract liabilities as of March 30, 2024 and December 30, 2023 were $ 18.7 million and $ 18.0 million, respectively.

During the three months ended March 30, 2024, we recognized $ 6.5 million of revenue that was included in contract liabilities as of December 30, 2023.

Contract liabilities as of June 29, 2024 and December 30, 2023 were $ 19.1 million and $ 18.0 million, respectively.

During the six months ended June 29, 2024, we recognized $ 10.5 million of revenue that was included in contract liabilities as of December 30, 2023.

During the six months ended June 29, 2024, we divested contract liabilities of $ 1.7 million as of December 30, 2023 with the divestiture of our China operations.

Costs to obtain a contract:

7 unchanged sentences

Three Months Ended

March 30, 2024 April 1, 2023

June 29, 2024 July 1, 2023

Probe Cards Systems Corporate and Other Total Probe Cards Systems Corporate and Other Total

2 unchanged sentences

Gross margin 45.1 % 46.2 % 44.0 % 36.5 % 52.0 % 38.7 %

Six Months Ended

June 29, 2024 July 1, 2023

Probe Cards Systems Corporate and Other Total Probe Cards Systems Corporate and Other Total

Revenues $ 303,493 $ 62,706 $ — $ 366,199 $ 242,631 $ 80,733 $ — $ 323,364

Gross profit 126,030 28,683 ( 5,075 ) 149,638 85,735 41,870 ( 6,244 ) 121,361

Gross margin 41.5 % 45.7 % 40.9 % 35.3 % 51.9 % 37.5 %

Operating results provide useful information to our management for assessment of our performance and results of operations.

3 unchanged sentences

Three Months Ended

March 30, 2024 April 1, 2023

June 29, 2024 July 1, 2023

Probe Cards Systems Total Probe Cards Systems Total

15 unchanged sentences

Japan 4,513 3,098 7,611 3,902 4,030 7,932

Malaysia 5,084 1,518 6,602 6,177 500 6,677

Singapore 4,112 410 4,522 1,718 1,105 2,823

Rest of World 1,204 1,822 3,026 1,673 2,439 4,112

Total $ 166,792 $ 30,682 $ 197,474 $ 115,303 $ 40,613 $ 155,916

Six Months Ended

June 29, 2024 July 1, 2023

Probe Cards Systems Total Probe Cards Systems Total

Foundry & Logic $ 190,428 $ — $ 190,428 $ 183,529 $ — $ 183,529

DRAM 103,938 — 103,938 50,354 — 50,354

Flash 9,127 — 9,127 8,748 — 8,748

Systems — 62,706 62,706 — 80,733 80,733

Total $ 303,493 $ 62,706 $ 366,199 $ 242,631 $ 80,733 $ 323,364

Timing of revenue recognition:

Products transferred at a point in time $ 301,133 $ 56,913 $ 358,046 $ 236,903 $ 79,510 $ 316,413

Products and services transferred over time 2,360 5,793 8,153 5,728 1,223 6,951

Total $ 303,493 $ 62,706 $ 366,199 $ 242,631 $ 80,733 $ 323,364

Geographical region:

South Korea $ 99,363 $ 461 $ 99,824 $ 46,027 $ 2,611 $ 48,638

United States 75,031 18,626 93,657 55,772 24,632 80,404

Taiwan 67,371 7,319 74,690 64,213 5,628 69,841

China 28,997 11,703 40,700 34,992 15,615 50,607

Japan 8,860 7,293 16,153 11,038 7,871 18,909

Singapore 7,628 1,652 9,280 4,918 3,245 8,163

Europe 6,778 10,886 17,664 5,841 14,401 20,242

Malaysia 6,692 1,773 8,465 16,501 1,446 17,947

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements