What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2022-11-17 compared with 2021-11-18 · 90 added, 77 removed, 251 unchanged (40% of the section changed)

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These statements are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are subject to the safe harbor provisions created by statute.

Such forward-looking statements include, but are not limited to, statements with respect to our future revenue, increasing, continuing or strengthening, or decreasing or weakening, demand for our products, replacement demand, our research and development efforts, our ability to identify and realize new growth opportunities, our ability to control costs and our operational flexibility as a result of (among other factors):

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

Such forward-looking statements include, but are not limited to, statements with respect to our future revenue increasing, continuing or strengthening, or decreasing or weakening;

our capital allocation strategies, including any share repurchases;

demand for our products, including replacement demand;

our research and development efforts;

our ability to identify and realize new growth opportunities;

our ability to control costs;

and our operational flexibility as a result of (among other factors):

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

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

• our expectations regarding our effective tax rate and our unrecognized tax benefit;

• our ability to operate our business in accordance with our business plan;

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

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

• projected demand for ball bonder, wedge bonder, advanced packaging and electronic assembly equipment and for tools, spare parts and services.

• projected demand for our products and services.

Generally, words such as “may,” “will,” “should,” “could,” “anticipate,” “expect,” “intend,” “estimate,” “plan,” “continue,” “goal” and “believe,” or the negative of or other variations on these and other similar expressions identify forward-looking statements.

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This section of this Form 10-K generally discusses fiscal 2022 and 2021 items and year-to-year comparisons between fiscal 2022 and 2021.

Discussions of fiscal 2019 items and year-to-year comparisons between fiscal 2020 and 2019 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended October 3, 2020.

Discussions of fiscal 2020 items and year-to-year comparisons between fiscal 2021 and 2020 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended October 2, 2021, which was filed with the SEC on November 18, 2021.

Our Management's Discussion and Analysis (“MD&A”) is provided in addition to the accompanying consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition, and cash flows.

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Introduction of our operations, key events, business environment, technology leadership, products and services

• Critical Accounting Policies

• Critical Accounting Policies and Estimates

• Recent Accounting Pronouncements

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For an overview of our business, see “Part I – Item 1.

Critical Accounting Policies

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements requires us to make assumptions, estimates and judgments that affect the reported amounts of assets and liabilities, net revenue and expenses during the reporting periods, and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements.

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We maintain allowances for doubtful accounts for estimated losses resulting from our customers’ failure to make required payments.

If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make

payments, additional allowances may be required.

If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

We are subject to concentrations of customers and sales to a few geographic locations, which could also impact the collectability of certain receivables.

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Under ASC 740.10, the Company utilizes a two-step approach for evaluating uncertain tax positions.

Step one, or recognition,

requires a company to determine if the weight of available evidence indicates a tax position is more likely than not to be sustained upon examination solely based on its technical merit.

Step one, or recognition, requires a company to determine if the weight of available evidence indicates a tax position is more likely than not to be sustained upon examination solely based on its technical merit.

Step two, or measurement, is based on the largest amount of benefit, which is more likely than not to be realized on settlement with the taxing authority, including resolution of related appeals or litigation processes, if any.

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See Note 11 to our consolidated financial statements in Item 8 for a summary of the terms of these performance-based awards.

The fair value of the Company's stock option awards are estimated using a Black-Scholes option valuation model.

The fair value of equity-based awards is amortized over the vesting period of the award and the Company elected to use the straight-line method for awards granted after the adoption of ASC 718.

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These have resulted in uncertainties in the semiconductor, LED, memory and automotive markets.

While the Company anticipates long-term growth in semiconductor consumption, we observed trade-related adverse impacts in demand from China from the fourth quarter of fiscal 2018 through fiscal 2020, and such impacts may arise again in fiscal 2022 and/or beyond.

Our net revenues for fiscal 2021 increased as compared to our net revenues for fiscal 2020.

The increase in net revenue is primarily due to higher volume in both Capital Equipment and APS.

While the Company anticipates long-term growth in semiconductor consumption, we observed trade-related adverse impacts in demand from China from the fourth quarter of fiscal 2018 through fiscal 2022, and such impacts may increase in severity in fiscal 2023 and/or beyond.

Our net revenues for fiscal 2022 decreased as compared to our net revenues for fiscal 2021.

The decrease in net revenue is primarily due to lower volume in both Capital Equipment and APS.

The following table reflects net revenue by business segment for fiscal 2022 and 2021:

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Capital Equipment

For fiscal 2021, the higher Capital Equipment net revenue as compared to fiscal 2020 was driven by growing demand in the general semiconductor end market for consumer applications and 5G transition, automotive end market, memory end market and in the LED end market for both the adoption of the advanced LED display and sequential improvements for general lighting LED.

For fiscal 2021, the higher APS net revenue as compared to fiscal 2020 was primarily due to higher volume in spares, services and bonding tools.

For fiscal 2022, the lower Capital Equipment net revenue as compared to fiscal 2021 was due to lower volume.

The lower volume was due to a decrease in customer investments as a result of uncertainties in the overall macroeconomic environment, partially offset by favorable price variance due to product mix.

For fiscal 2022, the lower APS net revenue as compared to fiscal 2021 was primarily due to lower volume in spares, services and bonding tools.

The lower volume was due to a decrease in customer utilization.

Gross Profit Margin

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Capital Equipment

For fiscal 2021, the lower Capital Equipment gross profit margin as compared to fiscal 2020 was primarily driven by an increased gross margin in fiscal 2020 due to a warranty reserve revision, partially offset by more favorable product mix.

For fiscal 2021, the higher APS gross profit margin as compared to fiscal 2020 was primarily driven by favorable product mix in spares and services.

Income from Operations

For fiscal 2021, total income from operations was higher as compared to fiscal 2020.

This was primarily due to increased revenue in fiscal 2021, partially offset by higher operating expenses.

The following tables reflect income from operations by business segment for fiscal 2021 and 2020:

(dollar amounts in thousands) 2021 2020 $ Change % Change

Capital Equipment $ 355,982 $ 22,069 $ 333,913 1,513.0 %

APS 56,465 36,440 20,025 55.0 %

Total income from operations $ 412,447 $ 58,509 $ 353,938 604.9 %

Capital Equipment

For fiscal 2021, the higher Capital Equipment income from operations as compared to fiscal 2020 was primarily due to higher demand as explained under 'Net Revenue' above.

This was partially offset by higher operating expenses as explained under 'Operating Expenses' below.

For fiscal 2021, the higher APS income from operations as compared to fiscal 2020 was primarily due to higher demand as explained under 'Net Revenue' above.

This was partially offset by higher operating expenses as explained under 'Operating Expenses' below.

For fiscal 2022, the higher Capital Equipment gross profit margin as compared to fiscal 2021 was primarily driven by favorable price variance due to product mix.

For fiscal 2022, the higher APS gross profit margin as compared to fiscal 2021 was primarily driven by favorable product mix in spares and services offset by less favorable price variance in bonding tools.

Operating Expenses

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

For fiscal 2021, the higher SG&A expenses as compared to fiscal 2020 were primarily due to $22.1 million higher staff costs related to an increase in incentive compensation and headcount, and $9.5 million in sales representative commissions.

For fiscal 2022, the lower SG&A expenses as compared to fiscal 2021 was primarily due to $7.1 million net favorable variance in foreign exchange.

This was partially offset by a $2.0 million COVID-19 related grant received from the Singapore government in the prior year period.

Research and Development (“R&D”)

For fiscal 2021, the higher R&D expenses as compared to fiscal 2020 were primarily due to higher staff costs related to an increase in incentive compensation and headcount, and increased engineering services.

These were partially offset by lower spending on prototype materials.

For fiscal 2022, the lower R&D expenses as compared to fiscal 2021 was primarily due to lower staff costs related to incentive compensation.

This is partially offset by higher spending on prototype materials.

Income from Operations

For fiscal 2022, total income from operations was higher as compared to fiscal 2021.

This was primarily due to higher gross profit and lower operating expenses in fiscal 2022.

The following tables reflect income from operations by business segment for fiscal 2022 and 2021:

(dollar amounts in thousands) 2022 2021 $ Change % Change

Capital Equipment $ 397,920 $ 355,982 $ 41,938 11.8 %

APS 72,152 56,465 15,687 27.8 %

Total income from operations $ 470,072 $ 412,447 $ 57,625 14.0 %

Capital Equipment

For fiscal 2022, the higher Capital Equipment income from operations as compared to fiscal 2021 was primarily due to a higher gross profit as explained under “Gross Profit Margin” above.

For fiscal 2022, the higher APS income from operations as compared to fiscal 2021 was primarily due to lower operating expenses as explained under “Operating Expenses” above.

Interest Income and Expense

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Interest income

For fiscal 2021, the lower interest income as compared to fiscal 2020 was primarily due to lower weighted average interest rates on cash, cash equivalents and short-term investments.

For fiscal 2022, the higher interest income as compared to fiscal 2021 was primarily due to higher weighted average interest rates on cash, cash equivalents and short-term investments.

Interest expense

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Effective tax rate 9.1 % 11.4 % (2.3) %

For fiscal 2021, the effective tax rate differed from the U.S.

federal statutory tax rate primarily due to tax benefits from tax incentives, foreign earnings subject to a lower statutory tax rate than the U.S.

federal statutory tax rate, tax credits generated during the fiscal year, and the net release of valuation allowances recorded against certain loss and credit carryforwards, partially offset by tax expense related to deemed income and undistributed foreign earnings.

For fiscal 2020, the effective tax rate differed from the U.S.

federal statutory tax rate primarily due to tax benefits from tax incentives, foreign earnings subject to a lower statutory tax rate than the U.S.

federal statutory tax rate, and tax credits generated during the fiscal year net of a $3.5 million out of period adjustment, partially offset by tax expense related to deemed income, net increase of valuation allowances recorded against certain deferred tax assets, undistributed foreign earnings, and other non-deductible items.

The $3.5 million out of period adjustment was to correct previously unrecorded income tax expense related to prior years jurisdictional adjustments.

The Company determined that the out of period adjustment to the provision of income taxes and income taxes payable was not material to its fiscal 2020 or prior period consolidated financial statements.

For fiscal 2022, the lower effective tax rate as compared to fiscal 2021 is primarily due to tax benefits from foreign exchange losses and increase in tax credits generated during the fiscal year.

Please refer to Note 15:

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Percentage of total assets 48.8 % 46.2 %

The following table reflects summary Consolidated Statement of Cash Flow information for fiscal 2021 and 2020:

The following table reflects summary Consolidated Statements of Cash Flows information for fiscal 2022 and 2021:

(in thousands) 2022 2021

Net cash provided by operating activities $ 390,188 $ 300,032

Net cash used in investing activities (81,707) (125,957)

Net cash provided by / (used in) investing activities 133,799 (81,707)

Net cash used in financing activities (321,191) (44,258)

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Net cash provided by operating activities consisted of net income of $433.5 million, non-cash adjustments of $22.6 million and a net unfavorable change in operating assets and liabilities of $65.9 million.

The net change in operating assets and liabilities was primarily driven by a decrease in accounts payable and accrued expenses and other current liabilities of $128.7 million, and an increase in prepaid expenses and other current assets of $37.9 million and inventories of $14.9 million.

This was partially offset by a decrease in accounts and notes receivable of $113.3 million and income tax payable of $4.9 million.

The decrease in accounts payable and accrued expenses and other current liabilities was primarily due to lower purchases in the fourth quarter of fiscal 2022, lower accrued employee compensation, accrued customer obligations and accrued commissions.

The increase in prepaid expenses and other current assets was mainly due to the addition of contract assets in fiscal 2022.

The increase in inventories was due to increased manufacturing activities to meet higher demand in the first half of fiscal 2022 followed by slower utilization due to lower demand in the second half of fiscal 2022.

The decrease in accounts and notes receivable was due to lower sales in the fourth quarter of fiscal 2022 and a change in customer mix of different credit terms.

The net cash provided by investing activities was primarily due to net maturity of short-term investments of $157.0 million, partially offset by capital expenditures of $23.0 million.

The net cash used in financing activities was primarily due to common stock repurchases of $281.3 million and dividend payments of $39.4 million.

Net cash provided by operating activities consisted of net income of $367.2 million, non-cash adjustments of $21.2 million and a net unfavorable change in operating assets and liabilities of $88.3 million.

The net change in operating assets and liabilities was primarily driven by an increase in accounts and notes receivable of $221.9 million, inventories of $52.7 million, and prepaid expenses and other current assets of $4.6 million.

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The net cash used in financing activities was primarily due to dividend payments of $33.5 million, and common stock repurchases of $10.4 million.

Net cash provided by operating activities consisted of net income of $52.3 million, non-cash adjustments of $34.9 million and a net favorable change in operating assets and liabilities of $7.2 million.

The net change in operating assets and liabilities was primarily driven by an increase in accounts payable and accrued expenses and other current liabilities of $38.1 million.

This was partially offset by an increase in inventories of $26.2 million, and prepaid expenses and other current assets of $3.6 million, and an increase in accounts and notes receivable of $1.9 million.

The increase in accounts payable and accrued expenses and other current liabilities was primarily due to higher purchases due to higher manufacturing activities.

The increase in inventories was due to increased manufacturing activities in fiscal 2020 in response to increased sales.

The increase in accounts receivable was due to higher sales.

The net cash used in investing activities was primarily due to net purchases of short-term investments of $113.0 million, capital expenditures of $11.7 million and an equity investment of $1.3 million.

The net cash used in financing activities was primarily due to a net repayment of short-term debt of $60.9 million, common stock repurchases of $54.5 million, and dividend payments of $30.2 million.

Fiscal 2023 Liquidity and Capital Resource Outlook

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The actual amounts for fiscal 2023 will vary depending on market conditions.

Expenditures are anticipated to be primarily used for R&D projects, enhancements to our manufacturing operations, improvements to our information technology security, implementation of an enterprise resource planning system and leasehold improvements for our facilities.

We believe that our existing cash and investments and anticipated cash flows from operations will be sufficient to meet our liquidity and capital requirements for at least the next twelve months from the date of filing.

Our liquidity is affected by many factors, some based on normal operations of our business and others related to global economic conditions and industry uncertainties, which we cannot predict.

We also cannot predict economic conditions and industry downturns or the timing, strength or duration of recoveries.

We intend to continue to use our cash for working capital needs and for general corporate purposes.

We may seek, as we believe appropriate, additional debt or equity financing which would provide capital for corporate purposes, working capital funding, additional liquidity needs or to fund future growth opportunities, including possible acquisitions and investments.

The timing and amount of potential capital requirements cannot be determined at this time and will depend on a number of factors, including our actual and projected demand for our products, semiconductor and semiconductor capital equipment industry conditions, competitive factors, and the condition of financial markets.

Expenditures are anticipated to be primarily used for research and development projects, enhancements to our manufacturing operations, improvements to our information technology security, implementation of an enterprise resource planning system and leasehold improvements for our facilities.

Our ability to make these expenditures will depend, in part, on our future cash flows, which are determined by our future operating performance and, therefore, subject to prevailing macroeconomic conditions, including the impact from the COVID-19 pandemic, inflationary pressures, geopolitical tensions including the prolonged Ukraine/Russia conflict and other factors, some of which are beyond our control.

As of October 1, 2022 and October 2, 2021, approximat ely $499.8 million and $724.5 million of cash, cash equivalents, and short-term investments were held by the Company’s foreign subsidiaries, respectively, with a large portion of the cash amounts expected to be available for use in the U.S.

without incurring additional U.S.

The decrease is primarily due to the repatriation of cash held by the Company’s foreign subsidiaries to the U.S.

The Company’s international operations and capital requirements are funded primarily by cash generated by foreign operating activities and cash held by foreign subsidiaries.

Most of the Company's operations and liquidity needs are outside the U.S.

In fiscal 2022, the Company’s U.S.

operations and capital requirements have been funded primarily by cash generated from U.S.

operating activities, repatriation of cash generated by foreign operating activities, and by a Facility Agreement with MUFG Bank, Ltd.

operating activities, cash held by U.S.

entities, and cash previously held by foreign subsidiaries that was repatriated to the U.S.

entities during the fiscal year.

In the future, the Company may repatriate additional cash held by foreign subsidiaries that has already been subject to U.S.

We believe these future repatriations of cash and our U.S.

sources of cash and liquidity are sufficient to meet our other business needs in the U.S.

for the foreseeable future including funding of U.S.

operations, capital expenditures, repayment of outstanding balances under the Facility Agreement with MUFG Bank, Ltd., dividend program, and the share repurchase program as approved by the Board of Directors.

income tax or drawdown cash from our existing Facility Agreements.

We believe these sources of cash and liquidity are sufficient to meet our additional liquidity needs for the foreseeable future including repayment of outstanding balances under the Facility Agreements, as well as payment of dividends, share repurchases and income taxes.

Should the Company’s U.S.

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borrowing alternatives.

We believe that our existing cash, cash equivalents, short-term investments, existing Facility Agreements, and anticipated cash flows from operations will be sufficient to meet our liquidity and capital requirements, notwithstanding the COVID-19 pandemic and macroeconomic headwinds, for the next twelve months and beyond.

Our liquidity is affected by many factors, some based on normal operations of our business and others related to macroeconomic conditions including inflationary pressures, industry-related uncertainties, effects arising from the prolonged Ukraine/Russia conflict, which we cannot predict.

We also cannot predict economic conditions and industry downturns or the timing, strength or duration of recoveries.

We intend to continue to use our cash for working capital needs and for general corporate purposes.

In this unprecedented environment, as a result of the COVID-19 pandemic, the prolonged Ukraine/Russia conflict or for other reasons, we may seek, as we believe appropriate, additional debt or equity financing which would provide capital for corporate purposes, working capital funding, additional liquidity needs or to fund future growth opportunities, including possible acquisitions.

Share Repurchase Program

On August 15, 2017, the Company's Board of Directors authorized the Program to repurchase up to $100 million of the Company’s common stock on or before August 1, 2020.

In 2018 and 2019, the Board of Directors increased the share repurchase authorization under the Program to $200 million and $300 million, respectively.

On July 3, 2020, the Board of Directors increased the share repurchase authorization under the Company's existing share repurchase program by an additional $100 million to $400 million, and extended its duration through August 1, 2022.

On August 15, 2017, the Company’s Board of Directors authorized a program (the “Program”) to repurchase up to $100 million of the Company’s common stock on or before August 1, 2020.

In 2018, 2019 and 2020, the Board of Directors increased the share repurchase authorization under the Program to $200 million, $300 million and $400 million, respectively.

On March 3, 2022, the Board of Directors increased the share repurchase authorization under the Program by an additional $400 million to $800 million, and extended its duration through August 1, 2025.

The Company has entered into a written trading plan under Rule 10b5-1 of the Exchange Act to facilitate repurchases under the Program.

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During the fiscal year ended October 1, 2022, the Company repurchased a total of approximately 2,782.1 thousand shares of common stock at a cost of approximately $132.8 million.

As of October 2, 2021, our remaining share repurchase authorization under the Program was approximately $132.0 million.

On August 26, 2021, May 28, 2021, March 5, 2021 and December 10, 2020, the Board of Directors declared a quarterly dividend $0.14 per share of common stock.

The stock repurchases were recorded in the periods they were delivered and accounted for as treasury stock in the Company’s Consolidated Balance Sheets.

The Company records treasury stock purchases under the cost method using the first-in, first-out (FIFO) method.

Upon re-issuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid-in capital.

If the Company reissues treasury stock at an amount below its acquisition cost and additional paid-in capital associated with prior treasury stock transactions is insufficient to cover the difference between acquisition cost and the reissue price, this difference is recorded against retained earnings.

Accelerated Share Repurchase (“ASR”)

In addition to the 2,782.1 thousand shares of common stock repurchased under the Program during the fiscal year ended October 1, 2022, on March 9, 2022, the Company entered into an ASR agreement (the “March 2022 ASR Agreement”) with an investment bank counterparty (“Dealer”) to repurchase $150 million of the Company’s common stock.

The March 2022 ASR Agreement was entered into pursuant to the Company’s current $800 million share repurchase authorization.

Under the March 2022 ASR Agreement, the Company made an up-front payment of $150 million to the Dealer and received an initial delivery of 2,449.9 thousand shares of common stock at a cost of approximately $120 million on March 10, 2022.

The final number of shares to be repurchased will be based on the volume-weighted average price of the Company’s common stock during the term of the transaction, less a discount and subject to adjustments pursuant to the terms and conditions of the March 2022 ASR Agreement.

For accounting purposes, the March 2022 ASR Agreement is evaluated as an unsettled forward contract indexed to the Company’s own stock, with $30 million being classified within common stock.

At settlement, the Dealer may be required to deliver additional shares of common stock to the Company, or, under certain circumstances, the Company may be required to deliver shares of its common stock or may elect to make a cash payment to the Dealer.

The March 2022 ASR Agreement was settled between the Company and the Dealer on April 22, 2022 and the Company received an additional 344.5 thousand shares of common stock from the Dealer.

In total, an aggregate of 2,794.4 thousand shares of common stock were delivered by the Dealer under the March 2022 ASR Agreement at an average price of $53.68 per share, which was then reclassified as treasury stock from common stock in shareholder’s equity.

As of October 1, 2022, our remaining stock repurchase authorization under the Program was approximately $249.2 million.

On August 30, 2022, June 8, 2022, March 3, 2022 and October 18, 2021, the Board of Directors declared a quarterly dividend $0.17 per share of common stock.

During the fiscal year ended October 1, 2022, the Company declared dividends of $0.68 per share of common stock.

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(2) Associated with the U.S.

one-time transition tax on certain earnings and profits of our foreign subsidiaries in relation to the U.S.

Tax Cuts and Jobs Act of 2017.

Off-Balance Sheet Arrangements

one-time transition tax on certain earnings and profits of our foreign subsidiaries in relation to the TCJA.

Credit Facilities

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Amounts outstanding under the Overdraft Facility, including interest, are payable upon thirty days written demand by the Bank.

Interest on the Overdraft Facility is calculated on a daily basis, and the applicable interest rate is calculated at the overnight U.S.

Dollar LIBOR rate plus a margin of 1.5% per annum.

Interest on the Overdraft Facility is calculated on a daily basis, and the applicable interest rate is calculated at the Secured Overnight Financing Rate (“SOFR”) plus a margin of 1.5% per annum.

The Overdraft Facility is an unsecured facility per the terms of the Facility Agreements.

The Facility Agreements contain customary non-financial covenants, including, without limitation, covenants that restrict the Company’s ability to sell or dispose of its assets, cease owning at least 51% of two of its subsidiaries (the “Subsidiaries”), or encumber its assets with material security interests (including any pledge of monies in the Subsidiaries’ cash deposit account with the Bank).

The Facility Agreements also contain typical events of default, including, without limitation, non-payment of financial obligations when due, cross defaults to other material indebtedness of the Company and any breach of a representation or warranty under the Facility Agreements.

The Facility Agreements also contain customary events of default, including, without limitation, non-payment of financial obligations when due, cross defaults to other material indebtedness of the Company and any breach of a representation or warranty under the Facility Agreements.

As of October 1, 2022, there were no outstanding amounts under the Overdraft Facility.

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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-K

Item 7. Management’s Discussion and Analysis