What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-11-17 compared with 2021-11-18 · 182 added, 182 removed, 975 unchanged (27% of the section changed)

26 unchanged sentences

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

4 unchanged sentences

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Realizability of deferred income taxes

As described in Notes 1 and 15 to the consolidated financial statements, as of October 2, 2021, the Company's gross deferred tax assets balance of $45.0 million was partially offset by valuation allowances of $34.1 million.

The net release of valuation allowances charged to the consolidated statement of operations during the year was $11.6 million.

As disclosed, management recorded a valuation allowance to reduce its deferred tax assets to the amount expected, on a more likely than not basis, to be realized.

Management has considered future taxable income in assessing the need for the valuation allowance.

The principal considerations for our determination that performing procedures relating to the realizability of deferred tax assets is a critical audit matter are (i) our assessment that this is an area of significant judgment by management in determining the realizability of deferred tax assets;

and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate management's forecasted future taxable income for certain foreign jurisdictions.

Valuation of inventories - Reserves for excess and obsolete raw materials

As described in Notes 1 and 2 to the consolidated financial statements, the Company’s consolidated net inventory balance was $185.0 million.

The Company generally provides reserves for obsolete inventory and for inventory considered to be in excess of demand.

Demand is generally defined as forecasted future consumption for inventories, and is based upon internal projections, historical sales volumes, customer order activity and a review of consumable inventory levels at customers’ facilities.

The principal considerations for our determination that performing procedures relating to the valuation of inventories, specifically the reserves for excess and obsolete raw materials, is a critical audit matter are our assessment that this is an area of significant judgment by management when developing reserves for excess and obsolete raw materials, including developing the assumption related to forecasted future consumption for raw materials.

This has in turn led to significant auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s assumptions over the reasonableness of the significant assumptions related to the forecasted future consumption for raw materials.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the realizability of deferred tax assets, including controls over management's process for developing forecasted future taxable income for certain foreign jurisdictions.

These procedures also included, among others, testing management's process for determining the realizability of deferred tax assets for certain foreign jurisdictions, and evaluating management's forecasted future taxable income for certain foreign jurisdictions, which considered (i) current and past results;

(ii) consistency with external market and industry data;

(iii) availability of objectively verifiable data;

(iv) a comparison of the prior year estimates to actual results in the current year;

and (v) whether these forecasts were consistent with evidence obtained in other areas of the audit.

These procedures included testing the effectiveness of controls relating to management’s reserves for excess and obsolete raw materials, including controls over management’s assumption related to forecasted future consumption for raw materials.

These procedures also included, among others, testing management’s process for developing the reserves for excess or obsolete raw materials;

evaluating the appropriateness of management’s approach;

testing the completeness and accuracy of underlying data used in the approach;

and evaluating the reasonableness of management’s assumption related to forecasted future consumption for raw materials.

Evaluating management’s assumption related to forecasted future consumption for raw materials involved evaluating whether the assumption used by management was reasonable considering (i) current and past sales results, (ii) the consistency of sales with external market and industry data, and (iii) comparing prior year estimates of sales to actual sales results in the current year.

/s/ PricewaterhouseCoopers LLP

9 unchanged sentences

Accounts and notes receivable, net of allowance for doubtful accounts of $ 0 and $ 687 , respectively

309,323 421,193

Inventories, net 184,986 167,323

25 unchanged sentences

Authorized 5,000 shares;

issued - none $ — $ —

issued - no ne

Common stock, no par value:

2 unchanged sentences

outstanding 57,128 and 61,931 shares, respectively

561,684 550,117

Treasury stock, at cost, 28,237 and 23,433 shares, respectively

( 675,800 ) ( 400,412 )

Retained earnings 1,341,666 948,554

34 unchanged sentences

Foreign currency translation adjustment ( 30,536 ) 672 7,755

Unrecognized actuarial (loss) / gain on pension plan, net of tax — ( 1,490 ) 22

Unrecognized actuarial gain / (loss) on pension plan, net of tax 2,276 — ( 1,490 )

( 28,260 ) 672 6,265

Derivatives designated as hedging instruments:

Unrealized gain / (loss) on derivative instruments, net of tax 24 358 ( 741 )

Reclassification adjustment for (gain)/ loss on derivative instruments recognized, net of tax ( 1,197 ) 796 1,215

Unrealized (loss) / gain on derivative instruments, net of tax ( 2,694 ) 24 358

Reclassification adjustment for loss / (gain) on derivative instruments recognized, net of tax 1,076 ( 1,197 ) 796

Net (decrease) / increase from derivatives designated as hedging instruments, net of tax ( 1,618 ) ( 1,173 ) 1,154

10 unchanged sentences

Repurchase of common stock ( 2,486 ) — ( 55,001 ) — — ( 55,001 )

Exercise of stock options 2 14 — — — 14

Issuance of shares for equity-based compensation 834 ( 9,037 ) 9,037 — — —

1 unchanged sentence

Cumulative effect of accounting changes — — — ( 769 ) — ( 769 )

Cash dividends declared — — — ( 31,091 ) — ( 31,091 )

Cash dividend declared — — — ( 30,037 ) — ( 30,037 )

Components of comprehensive income:

Net income — — — 52,300 — 52,300

Other comprehensive loss — — — — ( 6,038 ) ( 6,038 )

Total comprehensive income / (loss) — — — 11,653 ( 6,038 ) 5,615

Balances as of September 28, 2019 63,173 $ 533,590 $ ( 349,212 ) $ 594,625 $ ( 9,940 ) $ 769,063

Other comprehensive income — — — — 7,419 7,419

Total comprehensive income — — — 52,300 7,419 59,719

Balances as of October 3, 2020 61,558 $ 539,213 $ ( 394,817 ) $ 616,119 $ ( 2,521 ) $ 757,994

Issuance of stock for services rendered 23 616 202 — — 818

2 unchanged sentences

Equity-based compensation — 14,673 — — — 14,673

Cumulative effect of accounting changes — — — ( 769 ) — ( 769 )

Cash dividends declared — — — ( 30,037 ) — ( 30,037 )

Cash dividend declared — — — ( 34,726 ) — ( 34,726 )

Components of comprehensive income:

1 unchanged sentence

Other comprehensive loss — — — — ( 501 ) ( 501 )

Total comprehensive income — — — 52,300 7,419 59,719

Total comprehensive income/(loss) — — — 367,161 ( 501 ) 366,660

Balances as of October 2, 2021 61,931 $ 550,117 $ ( 400,412 ) $ 948,554 $ ( 3,022 ) $ 1,095,237

6 unchanged sentences

Net income — — — 433,545 — 433,545

Other comprehensive gain — — — — ( 501 ) ( 501 )

Other comprehensive loss — — — — ( 29,878 ) ( 29,878 )

Total comprehensive income / (loss) — — — 433,545 ( 29,878 ) 403,667

9 unchanged sentences

Depreciation and amortization 21,293 19,810 19,739

Impairment charges 1,346 — —

Equity-based compensation and employee benefits 18,986 15,491 15,019

4 unchanged sentences

Deferred taxes ( 8,648 ) ( 9,818 ) ( 827 )

Loss on disposal of property, plant and equipment 259 953 20

(Gain) / loss on disposal of property, plant and equipment ( 253 ) 259 953

Gain on disposal of equity-method investments — ( 1,046 ) —

17 unchanged sentences

Disposal of equity-method investments — 2,115 —

Net cash (used in) / provided by investing activities ( 81,707 ) ( 125,957 ) 47,468

Net cash provided by / (used in) investing activities 133,799 ( 81,707 ) ( 125,957 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Payment on short term debt ( 54,500 ) ( 22,750 ) ( 147,143 )

Proceeds from exercise of common stock options — — 14

Payment for finance leases ( 509 ) ( 379 ) ( 123 )

19 unchanged sentences

In fiscal years consisting of 53 weeks, the fourth quarter will consist of 14 weeks.

The 2021, 2020, and 2019 fiscal years ended on October 2, 2021, October 3, 2020 and September 28, 2019, respectively.

The 2022, 2021, and 2020 fiscal years ended on October 1, 2022, October 2, 2021 and October 3, 2020, respectively.

Nature of Business

The Company designs, manufactures and sells capital equipment and tools as well as services, maintains, repairs and upgrades equipment, all used to assemble semiconductor devices.

The Company's operating results depend upon the capital and operating expenditures of semiconductor device manufacturers, integrated device manufacturers, outsourced semiconductor assembly and test providers (“OSATs”), and other electronics manufacturers, including automotive electronics suppliers, worldwide which, in turn, depend on the current and anticipated market demand for semiconductors and products utilizing semiconductors.

The Company’s operating results depend upon the capital and operating expenditures of semiconductor device manufacturers, integrated device manufacturers (“IDMs”), outsourced semiconductor assembly and test providers (“OSATs”), and other electronics manufacturers, including automotive electronics suppliers, worldwide which, in turn, depend on the current and anticipated market demand for semiconductors and products utilizing semiconductors.

The semiconductor industry is highly volatile and experiences downturns and slowdowns which can have a severe negative effect on the semiconductor industry’s demand for semiconductor capital equipment, including assembly equipment manufactured and sold by the Company and, to a lesser extent, tools, including those sold by the Company.

8 unchanged sentences

Actual results may differ from these estimates.

Due to the coronavirus (“COVID-19”) pandemic, there has been uncertainty and disruption in the global economy and financial markets.

Due to the coronavirus (“COVID-19”) pandemic and macroeconomic headwinds, there has been uncertainty and disruption in the global economy and financial markets.

The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of October 1, 2022.

While there was no material impact to our consolidated financial statements as of and for the year ended October 2, 2021, these estimates may change, as new events occur and additional information is obtained, as well as other factors related to COVID-19 that could result in material impacts to our consolidated financial statements in future reporting periods.

While there was no material impact to our consolidated financial statements as of and for the year ended October 1, 2022, these estimates may change, as new events occur and additional information is obtained, as well as other factors related to COVID-19 and macroeconomic headwinds that could materially impact our consolidated financial statements in future reporting periods.

The Company reviews its warranty reserve balances as part of its ongoing policy review.

4 unchanged sentences

For further information on warranty reserve, see Notes 14 and 17 below.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Vulnerability to Certain Concentrations

4 unchanged sentences

These guidelines are periodically reviewed and modified as appropriate.

The Company does not have any exposure to sub-prime financial instruments or auction rate securities.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company’s trade receivables result primarily from the sale of semiconductor equipment, related accessories and replacement parts, and tools to a relatively small number of large manufacturers in a highly concentrated industry.

Write-offs of uncollectible accounts have historically not been material.

The Company actively monitors its customers' financial strength to reduce the risk of loss, including as a result of COVID-19.

The Company actively monitors its customers’ financial strength to reduce the risk of loss, including as a result of COVID-19 and macroeconomic headwinds.

The Company’s products are complex and require raw materials, components and subassemblies having a high degree of reliability, accuracy and performance.

29 unchanged sentences

The hedge effectiveness of these derivative instruments is evaluated by comparing the cumulative change in the fair value of the hedge contract with the cumulative change in the fair value of the forecasted cash flows of the hedged item.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

If a cash flow hedge is discontinued because it is no longer probable that the original hedged transaction will occur as previously anticipated, the cumulative unrealized gain or loss on the related derivative is reclassified from accumulated other comprehensive income / (loss) into earnings.

1 unchanged sentence

Ineffective portions of cash flow hedges, as well as amounts excluded from the assessment of effectiveness, are recognized in earnings.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Cash Equivalents

5 unchanged sentences

Equity investments are measured and recorded as follows:

• Equity method investments are equity securities in investees that provide the Company with the ability to exercise significant influence in which it lacks a controlling financial interest.

Our proportionate share of the income or loss is recognized on a one-quarter lag and is recorded as share of results of equity-method investee, net of tax.

• Non-marketable equity securities are equity securities without readily determinable fair value that are measured and recorded using a measurement alternative that measures the securities at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes.

1 unchanged sentence

The Company maintains allowances for doubtful accounts for estimated losses resulting from its customers’ failure to make required payments.

If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of their ability to make payments, including as a result of COVID-19, additional allowances may be required.

If global or regional economic conditions deteriorate or political conditions were to change in some of the countries where the Company does business, including as a result of COVID-19, it could have a significant impact on the results of operations, and the Company's ability to realize the full value of its accounts receivable.

If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, including as a result of COVID-19 and macroeconomic headwinds, additional allowances may be required.

If global or regional economic conditions deteriorate or political conditions were to change in some of the countries where the Company does business, it could have a significant impact on the results of operations, and the Company’s ability to realize the full value of its accounts receivable.

Inventories are stated at the lower of cost (on a first-in, first-out basis) or net realizable value.

17 unchanged sentences

Land is not depreciated.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Valuation of Long-Lived Assets

4 unchanged sentences

Estimates of future cash flows used to test the recoverability of a long-lived asset or asset group must incorporate the entity’s own assumptions about its use of the asset or asset group and must factor in all available evidence.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

ASC 360 requires that long-lived assets be tested for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

25 unchanged sentences

Control is considered transferred when title and risk of loss pass, when the customer becomes obligated to pay and, where applicable, when the customer has accepted the products or upon expiration of the acceptance period.

For sales to distributors, payment is due on our standard commercial terms and is not contingent upon resale of the products.

For sales to distributors, payment is due on our standard commercial terms and is not contingent upon the distributors’ resale of the products.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Our business is subject to contingencies related to customer orders, including:

6 unchanged sentences

We establish reserves for estimated warranty expense when revenue for the related equipment is recognized.

The reserve for estimated warranty expense is based upon historical experience and management's estimate of future expenses, including product parts replacement, freight charges and labor costs expected to be incurred to correct product failures during the warranty period.

The reserve for estimated warranty expense is based upon historical experience and management’s estimate of future expenses, including product parts replacement, freight charges and labor costs expected to be incurred to correct manufacturing defects during the warranty period.

• Conditions of Acceptance:

Sales of our consumable products generally do not have customer acceptance terms.

In certain cases, sales of our equipment have customer acceptance clauses which may require the equipment to perform in accordance with customer specifications or when installed at the customer's facility.

In such cases, if the terms of

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

acceptance are satisfied at our facility prior to shipment, the revenue for the equipment will be recognized upon shipment.

In certain cases, sales of our equipment have customer acceptance clauses which may require the equipment to perform in accordance with agreed specifications, customer specifications or subject to satisfactory installation at the customer’s facility.

In such cases, if the terms of acceptance are satisfied at our facility prior to shipment, the revenue for the equipment will be recognized upon shipment.

If the terms of acceptance are satisfied at our customers’ facilities, the revenue for the equipment will not be recognized until acceptance, which is typically obtained after installation and testing, is received from the customer.

7 unchanged sentences

Shipping and handling costs paid by the Company are included in cost of sales.

Contract Assets

A contract asset is the Company’s right to consideration in exchange for goods or services that the Company has transferred to a customer.

ASC 606, Revenue from Contracts with Customers , distinguishes between a contract asset and a receivable based on whether receipt of the consideration is conditional on something other than the passage of time.

When the Company transfers control of goods or services to a customer before the customer pays consideration, the Company records either a contract asset or a receivable depending on the nature of the Company’s right to consideration for its performance.

The point at which a contract asset becomes an account receivable may be earlier than the point at which an invoice is issued.

The Company assesses a contract asset for impairment in accordance with ASC 310, Receivables .

Research and Development

1 unchanged sentence

In certain circumstances, pre-production machines that the Company intends to sell are carried as inventory until sold.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

In accordance with ASC No.

14 unchanged sentences

See Note 11 for a summary of the terms of these performance-based awards.

The fair value of the Company's stock option awards is 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.

4 unchanged sentences

Diluted EPS include the weighted average number of common shares and the dilutive effect of stock options, restricted stock awards, performance share units and restricted share units outstanding during the period, when such instruments are dilutive.

Accelerated Share Repurchase

From time to time, the Company may enter into accelerated share repurchase (“ASR”) agreements with third-party financial institutions to repurchase shares of the Company’s common stock.

Under an ASR agreement, in exchange for an up-front payment, the counterparty makes an initial delivery of shares of the Company’s common stock during the purchase period of the relevant ASR.

This initial delivery of shares represents the minimum number of shares that the Company may receive under an ASR agreement.

Upon settlement of an ASR agreement, the counterparty may deliver additional shares, with the final number of shares delivered determined based on the volume-weighted average price of the Company’s common stock over the term of such ASR agreement, less an agreed-upon discount.

The transactions are accounted for as equity transactions and are included in Treasury Stock when the shares are received, at which time there is an immediate reduction in the weighted-average common shares calculation for basic and diluted earnings per share.

Accounting for Business Acquisitions

3 unchanged sentences

The Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and results of operations during the reporting period.

Estimates are used in accounting

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

for, among other things, the fair value of acquired net operating assets, property, plant and equipment, deferred revenue, intangible assets and related deferred income taxes, useful lives of property, plant and equipment, and amortizable lives of acquired intangible assets.

Estimates are used in accounting for, among other things, the fair value of acquired net operating assets, property, plant and equipment, deferred revenue, intangible assets and related deferred income taxes, useful lives of property, plant and equipment, and amortizable lives of acquired intangible assets.

Any excess of the purchase consideration over the identified fair value of the assets and liabilities assumed is recognized as goodwill.

The valuation of these tangible and identifiable intangible assets and liabilities is subject to further management review and may change materially between the preliminary allocation and end of the purchase price allocation period.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Restructuring Charges

5 unchanged sentences

Recent Accounting Pronouncements

Financial Instruments

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments .

This ASU replaces the impairment methodology in current GAAP, which delays recognition of credit losses until it is probable a loss has been incurred, with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, Income Taxes (Topic 740).

The amendments in this ASU, among other changes, simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, clarify and amend the existing guidance.

We adopted this ASU in the first quarter of fiscal 2022.

The adoption of this ASU did not have a material impact on our consolidated financial statements.

Collaborative Arrangements

In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808).

This ASU clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue when the collaborative arrangement participant is a customer in the context of a unit of account and precludes recognizing as revenue consideration received from a collaborative arrangement participant if the participant is not a customer.

This ASU requires retrospective adoption to the date we adopted ASC 606 by recognizing a cumulative-effect adjustment to the opening balance of retained earnings of the earliest annual period presented.

Contracts in Entity’s Own Equity

In August 2020, the FASB issued ASU 2020-06, Derivatives and Hedging - Contracts in Entity’s Own Equity (Topic 815).

The amendments in this ASU, among other changes, remove current guidance that allows an entity to rebut the presumption that potential share settlement be included in the diluted earnings per share calculation when an instrument may be settled in cash or shares if the entity has a history or policy of cash settlement.

These amendments affect any instrument that may be settled in cash or shares and, therefore, affects the diluted earnings per share calculation for both convertible instruments and contracts in an entity's own equity.

We elected to early adopt this ASU in the second quarter of fiscal 2022.

The adoption of this ASU did not have a material impact on our consolidated financial statements.

Codification Improvements

In October 2020, the FASB issued ASU 2020-10, Codification Improvements .

The amendments in this ASU affect a wide variety of topics in the Codification and improve the consistency of the Codification by including all disclosure guidance in the appropriate disclosure sections (Section 50).

We adopted this ASU in the first quarter of fiscal 2022.

The adoption of this ASU did not have a material impact on our consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740).

The amendments in this ASU simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and clarify and amend existing guidance.

This ASU will be effective for us in the first quarter of 2022.

We do not expect the adoption of this ASU to have a material impact on our consolidated financial statements.

Government Assistance

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832):

Disclosure by Business Entities about Government Assistance which aims at increasing the transparency of government assistance received by most business entities.

The standard requires business entities to make annual disclosures about the nature of the transactions and the related accounting policy used to account for the transactions, the line items and applicable amounts on the balance sheet and income statement that are affected by the transactions, and significant terms and conditions of the transactions, including commitments and contingencies.

If an entity omits any required disclosures because it is legally prohibited, it must disclose that fact.

This ASU is effective for fiscal years (and interim periods within those fiscal years) beginning after December 15, 2021, which for the Company is the first quarter of fiscal 2023.

The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

KULICKE AND SOFFA INDUSTRIES, INC.

31 unchanged sentences

$ 134,541 $ 161,570

(1) All short-term investments were classified as available-for-sale and were measured at fair value based on Level 1 measurement, or quoted market prices, as defined by ASC 820.

(1) All short-term investments were classified as available-for-sale and the fair value approximates cost basis.

The Company did not recognize any realized gains or losses on the sale of investments during the fiscal years ended 2022 and 2021.

12 unchanged sentences

805, Business Combinations , using the acquisition method.

The Company has estimated the preliminary fair value of acquired assets and liabilities as of the date of acquisition based on information available.

Any changes in these estimates may have a material impact on our Consolidated Statements of Operations or Consolidated Balance Sheets.

At October 2, 2021, the Company held $ 3.5 million in escrow for a period up to eighteen months from the acquisition date as security pending the completion of Uniqarta's obligations as seller under the Agreement.

On January 19, 2022, the Company finalized the valuation of the tangible and identifiable intangible assets and liabilities in connection with the acquisition of Uniqarta and no further adjustment was recorded.

On July 15, 2022, the Company released the escrow amount of $ 3.5 million to the seller in respect of Uniqarta’s completion of its post-closing obligations under the Agreement.

The following table summarizes the allocation of the assets acquired and liabilities assumed based on the fair values as of the acquisition date:

12 unchanged sentences

The intangible assets are valued using a cost replacement method.

The IPR&D intangible asset of $ 9.0 million is not amortized, but rather is reviewed for impairment on an annual basis or more frequently if indicators of impairment are present, until the project is completed, abandoned, or transferred to a third party.

The other intangible assets acquired of $ 2.2 million are amortized over the period of estimated benefit using the straight-line method and the estimated useful life of six years .

As of October 2, 2021, the IPR&D intangible asset of $ 9.0 million is not amortized, but rather is reviewed for impairment on an annual basis or more frequently if indicators of impairment are present, until the project is completed, abandoned, or transferred to a third party.

As of October 1, 2022, the IPR&D were transferred to developed technology (definite-lived intangible assets) as the research and development process was completed.

The other intangible assets acquired of $ 2.2 million and the IPR&D are amortized over the period of estimated benefit using the straight-line method and the estimated useful life of six years .

The straight-line method of amortization represents the Company’s best estimate of the distribution of the economic value of the identifiable intangible assets.

24 unchanged sentences

During the fiscal year ended October 1, 2022, the Company reviewed qualitative factors to ascertain if a “triggering” event may have taken place that may have the effect of reducing the fair value of the reporting unit below its carrying value and concluded that no triggering event had occurred.

While we have concluded that a triggering event did not occur during the fiscal year ended October 2, 2021, a prolonged COVID-19 pandemic could impact the results of operations due to changes to assumptions utilized in the determination of the estimated fair values of the reporting units that could be significant enough to trigger an impairment.

While we have concluded that a triggering event did not occur during the fiscal year ended October 1, 2022, the prolonged COVID-19 pandemic and macroeconomic headwinds could impact the results of operations due to changes to assumptions utilized in the determination of the estimated fair values of the reporting units that could be significant enough to trigger an impairment.

Net sales and earnings growth rates could be negatively impacted by reductions or changes in demand for our products.

3 unchanged sentences

Balance at October 2, 2021 46,561 26,388 72,949

Acquired in business combination 16,799 — 16,799

Other ( 4,372 ) ( 481 ) ( 4,853 )

Balance at October 1, 2022 42,189 25,907 68,096

During the quarter ended April 3, 2021, the Company recorded goodwill relating to the acquisition of Uniqarta.

For further information on the acquisition of Uniqarta, please refer to Note 3.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Intangible Assets

1 unchanged sentence

The Company’s intangible assets consist primarily of developed technology, customer relationships, in-process research and development, and trade and brand names.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table reflects net intangible assets as of October 1, 2022 and October 2, 2021:

7 unchanged sentences

Net customer relationships $ — $ —

In-process research and development $ 8,795 $ — N.A.

In-process research and development (1)

$ — $ 8,795 N.A.

Accumulated amortization $ — $ —

7 unchanged sentences

Net intangible assets $ 31,939 $ 42,752

(1) During the year ended October 1, 2022, $ 7.9 million of in-process research and development assets were transferred to developed technology (definite-lived intangible assets) as the research and development process was completed, and are being amortized over the period of estimated benefit using the straight-line method and the estimated useful life of six years .

The following table reflects estimated annual amortization expense related to intangible assets as of October 1, 2022:

23 unchanged sentences

Time deposits (2)

225,010 — — 225,010

Total cash and cash equivalents $ 555,557 $ — $ ( 20 ) $ 555,537

1 unchanged sentence

Time deposits (2)

$ 220,000 $ — $ — $ 220,000

Total short-term investments $ 220,000 $ — $ — $ 220,000

13 unchanged sentences

Time deposits (2)

40,007 — — 40,007

Total cash and cash equivalents $ 362,806 $ — $ ( 18 ) $ 362,788

6 unchanged sentences

(2) Fair value approximates cost basis.

(3) Represents deposits that require a notice period of three months for withdrawal.

KULICKE AND SOFFA INDUSTRIES, INC.

4 unchanged sentences

Non-marketable equity securities $ 5,397 $ 6,388

Equity method investments (1)

Total $ 6,388 $ 7,535

(1) On March 5, 2021, the Company executed an agreement to sell its interest in an equity method investment.

A gain of $ 1.0 million was recognized in selling, general and administrative expense in the Consolidated Statements of Operations.

During the year ended October 1, 2022, the Company recorded an impairment of $ 1.3 million on a non-marketable equity security without a readily determinable fair value.

The entire amount of the investment in the non-marketable equity security was impaired due to a significant deterioration in the earnings performance of the equity investee.

The impairment amount is recorded within “Selling, general and administrative expense” in the Consolidated Statement of Operations.

FAIR VALUE MEASUREMENTS

6 unchanged sentences

Our non-financial assets such as intangible assets and property, plant and equipment are carried at cost unless impairment is deemed to have occurred.

Our equity method investments are recorded at fair value only if an impairment is recognized.

Fair Value of Financial Instruments

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The fair value of derivative instruments on our Consolidated Balance Sheet as of October 2, 2021 and October 3, 2020 is as follows:

The fair value of derivative instruments on our Consolidated Balance Sheets as of October 1, 2022 and October 2, 2021 is as follows:

(in thousands) October 1, 2022 October 2, 2021

Notional Amount Fair Value Liability Derivatives (1)

Notional Amount Fair Value Asset

Derivatives (2)

Notional Amount Fair Value Liability Derivatives (1)

Derivatives designated as hedging instruments:

2 unchanged sentences

Total derivatives $ 57,570 $ ( 2,234 ) $ 57,682 $ ( 616 )

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

(2) The fair value of derivative assets is measured using level 2 fair value inputs and is included in prepaid expenses and other current assets on our Consolidated Balance Sheet.

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

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

The effect of derivative instruments designated as cash flow hedges in our Consolidated Statements of Operations for the fiscal year ended October 2, 2021 and October 3, 2020 was as follows:

The effect of derivative instruments designated as cash flow hedges in our Consolidated Statements of Operations for the fiscal years ended October 1, 2022 and October 2, 2021 was as follows:

(in thousands) Fiscal

Foreign exchange forward contract in cash flow hedging relationships:

Net gain recognized in OCI, net of tax (1)

Net gain/ (loss) reclassified from accumulated OCI into earnings, net of tax (2)

Net (loss)/gain recognized in OCI, net of tax (1)

$ ( 2,694 ) $ 24

Net (loss)/gain reclassified from accumulated OCI into earnings, net of tax (2)

$ ( 1,076 ) $ 1,197

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

3 unchanged sentences

Our lease terms may include one or more options to extend the lease terms, for periods from one year to 20 years, when it is reasonably certain that we will exercise that option.

As of October 2, 2021, three options to extend the lease were recognized as right-of-use ("ROU") assets, and lease liabilities.

As of October 1, 2022, one option to extend the lease were recognized as right-of-use (“ROU”) assets and lease liabilities.

We have lease agreements with lease and non-lease components, and non-lease components are accounted for separately and not included in our leased assets and corresponding liabilities.

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Long-term portion of lease obligations $ 34,927

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DEBT AND OTHER OBLIGATIONS

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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

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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.

1 unchanged sentence

401(k) Retirement Income Plans

The Company has a 401(k) retirement plan (the “Plan”) for eligible U.S.

The Plan allows for employee contributions and matching Company contributions from 4% to 6% based upon terms and conditions of the 401(k) Plan.

The following table reflects the Company’s contributions to the Plan during fiscal 2021 and 2020:

The Company has a 401(k) retirement plan (the “401(k) Plan”) for eligible U.S.

The 401(k) Plan allows for employee contributions and matching Company contributions from 4 % to 6 % based upon terms and conditions of the 401(k) Plan.

The following table reflects the Company’s contributions to the 401(k) Plan during fiscal 2022 and 2021:

(in thousands) 2022 2021

2 unchanged sentences

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 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.

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.

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

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.

1 unchanged sentence

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.

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.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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.

The declaration of any future cash dividend is at the discretion of the Board of Directors and will depend on the Company's financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination that such dividends are in the best interests of the Company's stockholders.

The declaration of any future cash dividend is at the discretion of the Board of Directors, subject to applicable laws, and will depend on the Company’s financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination that such dividends are in the best interests of the Company’s stockholders.

Accumulated Other Comprehensive Income

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(in thousands) October 1, 2022 October 2, 2021

Gain from foreign currency translation adjustments $ 682 $ 10

(Loss) / gain from foreign currency translation adjustments $ ( 29,854 ) $ 682

Unrecognized actuarial loss on pension plan, net of tax ( 812 ) ( 3,088 )

Unrealized (loss) / gain on hedging ( 616 ) 557

Unrealized loss on hedging ( 2,234 ) ( 616 )

Accumulated other comprehensive loss $ ( 32,900 ) $ ( 3,022 )

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Vested ( 268 )

Relative TSR PSUs outstanding as of September 28, 2019 561 $ 4,136 0.9

Relative TSR PSUs outstanding as of October 3, 2020 403 $ 4,198 1.1

Granted 155 $ 28.21

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Relative TSR PSUs outstanding as of October 1, 2022 380 $ 4,619 0.9

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table reflects the assumptions used to calculate compensation expense related to the Company’s Relative TSR PSUs issued during fiscal 2022, 2021, and 2020:

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Risk-free interest rate 0.68 % 0.21 % 1.49 %

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Equity-Based Compensation:

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Vested ( 569 )

Time-based RSUs outstanding as of September 28, 2019 947 $ 10,555 1.4

Time-based RSUs outstanding as of October 3, 2020 788 $ 10,480 1.6

Granted 486 $ 24.34

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Time-based RSUs outstanding as of October 1, 2022 736 $ 13,752 1.2

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Equity-Based Compensation:

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Forfeited or expired ( 22 )

Special/Growth PSUs outstanding as of September 28, 2019 97 $ 1,128 1.6

Special/Growth PSUs outstanding as of October 3, 2020 151 $ 1,252 1.1

Granted 52 $ 24.01

Forfeited or expired ( 34 )

Vested ( 17 )

Special/Growth PSUs outstanding as of October 2, 2021 152 $ 1,247 1.0

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Special/Growth PSUs outstanding as of October 1, 2022 127 $ 1,405 0.9

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table reflects employee stock option activity for fiscal 2021, 2020, and 2019:

Number of shares (in thousands) Weighted average exercise price Average remaining contractual life (in years) Aggregate intrinsic value (in thousands)

Options outstanding as of September 29, 2018 2 $ 8.64

Exercised ( 2 ) $ 8.64 $ 24

Forfeited or expired — $ —

Options outstanding as of September 28, 2019 — $ —

Exercised — $ — $ —

Forfeited or expired — $ —

Options outstanding as of October 3, 2020 — $ —

Exercised — $ — $ —

Forfeited or expired — $ —

Options outstanding as of October 2, 2021 — $ — — $ —

Options vested and expected to vest as of October 2, 2021 — $ — — $ —

Options exercisable as of October 2, 2021 — $ — —

In the money exercisable options as of October 2, 2021 — $ —

Intrinsic value of stock options exercised is determined by calculating the difference between the market value of the Company's stock price at the time an option is exercised and the exercise price, multiplied by the number of shares.

As of October 2, 2021, there were no unvested employee stock options.

As of October 1, 2022, there were no employee stock options.

Equity-Based Compensation:

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These other plans are not required to report nor do they determine the actuarial present value of accumulated benefits or net assets available for plan benefits as they are defined contribution plans.

REVENUE AND CONTRACT LIABILITIES

REVENUE AND CONTRACT BALANCES

The Company recognizes revenue when we satisfy performance obligations as evidenced by the transfer of control of our products or services to customers.

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Segment Information, for disclosure of revenue by segment.

Contract Liabilities

Contract Balances

Our contract assets relate to our rights to consideration for revenue with collection dependent on events other than the passage of time, such as the achievement of specified payment milestones.

The contract assets will be transferred to net account receivables as our right to consideration for these contract assets become unconditional.

Contracts assets are reported in the accompanying Consolidated Balance Sheets within prepaid expenses and other current assets.

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

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

The following table shows the changes in contract liability balances during the fiscal year ended October 2, 2021 and October 3, 2020:

The following table shows the changes in contract asset balances during the fiscal years ended October 1, 2022 and October 2, 2021:

(in thousands) 2022 2021

Contract assets, beginning of period $ — $ —

Additions 51,774 —

Transferred to accounts receivable or collected ( 25,457 ) —

Contract assets, end of period $ 26,317 $ —

The following table shows the changes in contract liability balances during the fiscal years ended October 1, 2022 and October 2, 2021:

(in thousands) 2022 2021

Contract liabilities, beginning of period $ 15,596 $ 2,958

2 unchanged sentences

Contract liabilities, end of period $ 3,160 $ 15,596

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

EARNINGS PER SHARE

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Stock options and restricted stock are included in the calculation of diluted earnings per share, except when their effect would be anti-dilutive.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table reflects a reconciliation of the shares used in the basic and diluted net income per share computation for fiscal 2022, 2021, and 2020:

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Net income per share - Diluted $ 7.09 $ 5.78 $ 0.83

Anti-dilutive shares (1)

(1) Represents the Relative TSR PSUs and Growth PSUs that are excluded from the calculation of diluted earnings per share for fiscal 2022, 2021, and 2020 as the effect would have been anti-dilutive.

OTHER FINANCIAL DATA

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Benefit from foreign tax credits ( 26,021 ) ( 20,281 ) ( 1,701 )

one-time transition tax — — 9,369

Remeasurement of deferred taxes — ( 145 ) 5,480

Valuation allowance ( 5,830 ) ( 11,620 ) 1,224

Foreign operations (Deemed income, taxes on undistributed foreign earnings, and withholding taxes) 45,421 52,414 8,886

Unrecognized tax benefit ( 180 ) 285 156

Non-deductible items 267 113 1,232

Other, net (1)

438 2,988 177

Provision for income taxes $ 43,443 $ 47,295 $ 11,998

Effective tax rate 9.1 % 11.4 % 18.6 %

In fiscal 2021, the Company recorded tax expense primarily from domestic and foreign operations, deemed income, and undistributed foreign earnings, partially offset by tax benefits from tax incentives, tax credits and the net release of valuation allowances recorded against certain loss and credit carryforwards.

In fiscal 2020, the Company recorded tax expense primarily from domestic and foreign operations, deemed income, undistributed foreign earnings, the net increase of valuation allowances recorded against certain loss and credit carryforwards, and non-deductible expenses, partially offset by tax benefits from tax incentives and net tax credits, inclusive of an out of period adjustment of $ 3.5 million 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 for income taxes and income taxes payable was not material to its fiscal 2020 or prior period consolidated financial statements.

(1) Certain balances in fiscal 2021 and 2020 have been reclassified to conform to the current period presentation.

These reclassifications have no impact to the consolidated financial statements in fiscal 2021 and 2020.

For fiscal 2022 and 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.

As of October 2, 2022, a large portion of the Company’s undistributed foreign earnings are not considered to be indefinitely reinvested outside the U.S.

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Further, we operate in a number of foreign jurisdictions, including Singapore, where we have a tax incentive that allows for a reduced tax rate on certain classes of income, provided the Company meets certain employment and investment conditions through the expiration date in fiscal 2025.

In fiscal 2021, 2020, and 2019, the tax incentive arrangement helped to reduce the

In fiscal 2022, 2021, and 2020, the tax incentive arrangement helped to reduce the Company’s provision for income taxes by $ 50.1 million or $ 0.82 per share, $ 45.5 million or $ 0.72 per share and $ 6.8 million or $ 0.11 per share, respectively.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Company’s provision for income taxes by $ 45.5 million or $ 0.72 per share, $ 6.8 million or $ 0.11 per share and $ 5.0 million or $ 0.08 per share, respectively.

The following table reflects deferred tax balances based on the tax effects of cumulative temporary differences for fiscal 2022 and 2021:

2 unchanged sentences

Tax credit carryforwards 3,893 4,230

Fixed and intangible assets 5,963 465

Net operating loss carryforwards 15,329 28,913

1 unchanged sentence

Valuation allowance $ ( 21,750 ) $ ( 34,095 )

$ ( 34,095 ) $ ( 46,561 )

Deferred tax assets, net of valuation allowance $ 17,603 $ 11,403

Taxes on undistributed foreign earnings $ ( 26,068 ) $ ( 28,516 )

$ ( 28,516 ) $ ( 25,676 )

Fixed and intangible assets 465 ( 4,297 )

Deferred tax liabilities $ ( 26,068 ) $ ( 28,516 )

3 unchanged sentences

Net deferred tax liabilities $ ( 8,465 ) $ ( 17,113 )

(1) Certain balances in fiscal 2020 relating to foreign tax credits on undistributed foreign earnings and related valuation allowances have been reclassified to conform to the current period presentation.

These reclassifications have no impact to the consolidated financial statements in fiscal 2020.

As of October 1, 2022, the Company has foreign net operating loss carryforwards of $ 37.9 million, state net operating loss carryforwards of $ 54.6 million, and U.S.

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As of October 1, 2022, the Company has recognized $ 2.0 million of accrued interest and penalties related to unrecognized tax benefit within the income tax payable for uncertain tax positions and approximately $ 17.1 million of unrecognized tax benefit, including related interest and penalties, that if recognized, would impact the Company’s effective tax rate.

It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain uncertain tax positions will increase or decrease during the next 12 months due to the expected lapse of statutes of limitation and/or settlements of tax examinations.

Given the number of years and numerous matters that remain subject to examination in various tax jurisdictions, we cannot practicably estimate the financial outcomes of these examinations.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain unrecognized tax positions will increase or decrease during the next 12 months due to the expected lapse of statutes of limitation and/or settlements of tax examinations.

Given the number of years and numerous matters that remain subject to examination in various tax jurisdictions, we cannot practicably estimate the financial outcomes of these examinations.

The Company files a U.S.

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General Semiconductor $ 843,763 $ 928,259 $ 290,220

$ 928,259 $ 290,220 $ 209,885

Automotive & Industrial 198,138 129,817 60,169

2 unchanged sentences

Total Capital Equipment revenue $ 1,306,468 $ 1,312,576 $ 462,059

(1) The Company noted a growing portion of the general semiconductor and LED end market is increasing in complexity and driving more capital intensity, therefore demanding more advanced packaging solutions.

This has reduced the relevance of the advanced packaging end market.

In view of this, sales previously defined as advanced packaging will be primarily categorized within the general semiconductor end market.

KULICKE AND SOFFA INDUSTRIES, INC.

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China $ 855,345 $ 843,470 $ 321,294

Taiwan 275,251 64,373 63,440

Hong Kong 82,436 43,288 12,096

Malaysia 126,520 70,253 40,641

Taiwan 123,995 275,251 64,373

Korea 87,647 58,308 30,848

United States 83,906 54,353 36,186

Vietnam 36,469 8,699 10,978

Thailand 24,448 9,389 9,941

Philippines 17,651 9,439 12,057

Japan 11,850 9,150 10,341

Hong Kong 27,216 82,436 43,288

All other (1)

198,991 133,593 86,546

Total destination sales to unaffiliated customers $ 1,503,620 $ 1,517,664 $ 623,176

(1) Certain balances in fiscal 2021 and 2020 have been reclassified to conform to the current period presentation.

These reclassifications have no impact to the consolidated financial statements in fiscal 2021 and 2020.

KULICKE AND SOFFA INDUSTRIES, INC.

4 unchanged sentences

United States 31,469 32,684

32,684 29,291 24,597

25,386 24,899 18,818

8,597 8,829 6,760

China 19,548 25,386

Israel 10,610 8,597

All other 9,647 11,187

11,187 12,038 5,318

Total long-lived assets $ 130,946 $ 118,324

(1) Certain balances in fiscal 2020 and 2019 relating to long-lived assets by country have been revised to exclude deferred tax asset balances.

The previously included balances are not material and there is no impact to the Consolidated Balance Sheets in fiscal 2020 and 2019 .

COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS

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O ther Commitments and Contingencies

The following table reflects obligations not reflected on the Consolidated Balance Sheet as of October 2, 2021:

The following table reflects obligations not reflected on the Consolidated Balance Sheets as of October 1, 2022:

Payments due by fiscal year

8 unchanged sentences

The Company expenses legal costs, including those expected to be incurred in connection with a loss contingency, as incurred.

Unfunded Capital Commitments

As of October 1, 2022, the Company also has an obligation to fund uncalled capital commitments of approximately $ 9.6 million, as and when required, in relation to its investment in a private equity fund.

KULICKE AND SOFFA INDUSTRIES, INC.

8 unchanged sentences

Tianshui Huatian Technology Co., Ltd.

16.7 % 18.2 %

Haoseng Industrial Co., Ltd.

Forehope Electronic Co., Ltd * 20.0 %

Regent Manner Limited * 10.3 %

* Represents less than 10% of total accounts receivable

12.6 % 14.3 %

(1) Distributor of the Company's products

1 unchanged sentence

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 8. Financial Statements and Supplementary Data