What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-08-08 compared with 2018-05-31 · 243 added, 351 removed, 123 unchanged (83% of the section changed)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

All of the financial information presented in this Item 7 has been revised to reflect the restatement of our consolidated financial statements described in Note 2 - Restatement of Consolidated Financial Statements, which is included in "Financial Statements and Supplementary Data" in Item 8 of this Form 10-K/A.

In addition to historical information, this filing contains statements relating to future events or our future results.

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, 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):

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, wedge bonder, advanced packaging and electronic assembly equipment and for tools, spares 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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Our future results could differ significantly from those expressed or implied by our forward-looking statements.

These risks and uncertainties include, without limitation, those described below and under the heading “Risk Factors” in this Annual Report on Form 10-K/A (the “Annual Report” or "Form 10-K/A") and our other reports and registration statements filed from time to time with the Securities and Exchange Commission.

These risks and uncertainties include, without limitation, those described below and under the heading “Risk Factors” in the Original Form 10-K and our other reports and registration statements filed from time to time with the Securities and Exchange Commission.

This discussion should be read in conjunction with our audited financial statements included in this Form 10-K/A.

We operate in a rapidly changing and competitive environment.

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Given those risks and uncertainties, investors should not place undue reliance on forward-looking statements as predictions of actual results.

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

Discussions of fiscal 2020 items and year-to-year comparisons between fiscal 2021 and 2020 that are not included in this Form 10-K/A 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.

MD&A is organized as follows:

The MD&A is organized as follows:

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.

Segment Realignment

During the fourth quarter of fiscal 2017, we reorganized our reporting structure into two reportable segments consisting of:

(i) Capital Equipment;

and (ii) APS.

As a result of this re-alignment, the Company has aggregated twelve operating segments as of September 30, 2017, with six operating segments within the Capital Equipment reportable segment and six operating segments in the APS reportable segment.

Subsequently, we have recasted financial results for fiscal years 2017, 2016 and 2015 based on the revised segment structure.

The change in the segments was a result of changes to our organizational structure initiated during the

fourth quarter of fiscal 2017 to streamline business operations to improve profitability and competitiveness and reflects a change in the manner in which our chief operating decision maker reviews information to assess our performance and make decisions about resource allocation.

As part of these actions, we transitioned to a new internal management structure whereby the operating management responsible for tools used to assemble semiconductor devices, including integrated circuits (“ICs”), high and low powered discrete devices, light-emitting diodes (“LEDs”) and power modules, services, spares, maintenance, repair and upgrading operating segments was brought under common leadership in the APS segment.

The restructuring actions were completed during the fourth quarter of fiscal year 2017.

Subsequent to the reorganization, the Capital Equipment segment comprises of the manufacturing and selling of ball bonders, wafer level bonders, wedge bonders, advanced packaging and electronic assembly solutions to semiconductor device manufacturers, IDMs, OSATs, other electronics manufacturers and automotive electronics suppliers.

For further information on our operating segments and the reorganization actions, please refer to Note 16, "Segment Information," to our Consolidated Financial Statements included under "Item 8, Financial Statements and Supplementary Data" of this Form 10-K/A.

Our prior period reportable segment information has been recasted to reflect the current segment structure and conform to the current period presentation.

Critical Accounting Policies

– Business” in the Original Form 10-K.

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.

On an ongoing basis, we evaluate estimates, including but not limited to, those related to accounts receivable, reserves for excess and obsolete inventory, carrying value and lives of fixed assets, goodwill and intangible assets, valuation allowances for deferred tax assets and deferred tax liabilities, repatriation of un-remitted foreign subsidiary earnings, equity-based compensation expense and warranties.

On an ongoing basis, we evaluate estimates, including, but not limited to, those related to accounts receivable, reserves for excess and obsolete inventory, carrying value and lives of fixed assets, goodwill and intangible assets, income taxes, equity-based compensation expense and warranties.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable.

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In accordance with ASC No.

605, Revenue Recognition , we recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, the collectability is reasonably assured, and customer acceptance, when applicable, has been received or we otherwise have been released from customer acceptance obligations.

If terms of the sale provide for a customer acceptance period, revenue is recognized upon the expiration of the acceptance period or customer acceptance, whichever occurs first.

Services revenue is generally recognized over the period that the services are provided.

606, Revenue from Contracts with Customers , the Company recognizes revenue when we satisfy performance obligations as evidenced by the transfer of control of our products or services to customers.

In general, the Company generates revenue from product sales, either directly to customers or to distributors.

In determining whether a contract exists, we evaluate the terms of the agreement, the relationship with the customer or distributor and their ability to pay.

The Company recognizes revenue from sales of our products, including sales to our distributors, at a point in time, generally upon shipment or delivery to the customer or distributor, depending upon the terms of the sales order.

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.

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

• Right of Return :

A large portion of our revenue comes from the sale of machines used in the semiconductor assembly process.

Other product sales relate to consumable products, which are sold in high-volume quantities, and are generally maintained at low stock levels at our customer's facility.

A large portion of our revenue comes from the sale of equipment used in the semiconductor assembly process.

Other product sales relate to consumable products, which are sold in high-volume quantities, and are generally maintained at low stock levels at the customer’s facility.

Customer returns have historically represented a very small percentage of customer sales on an annual basis.

• Warranties :

Our equipment is generally shipped with a one-year warranty against manufacturing defects.

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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.

Service revenue is generally recognized over time as the services are performed.

The Company measures revenue based on the amount of consideration we expect to be entitled to in exchange for products or services.

Any variable consideration such as sales incentives are recognized as a reduction of net revenue at the time of revenue recognition.

The length of time between invoicing and payment is not significant under our payment terms.

In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component.

Shipping and handling costs billed to customers are recognized in net revenue.

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

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

Allowance for Doubtful Accounts

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Accounting for Impairment of Goodwill

The Company operates two reportable segments:

Capital Equipment and Aftermarket Products and Services ("APS").

Goodwill was recorded for the acquisitions of Orthodyne Electronics Corporation ("Orthodyne"), Assembléon B.V.

("Assembléon") and Liteq B.V.

in fiscal 2009, 2015 and 2017, respectively.

350, Intangibles-Goodwill and Other ("ASC 350") requires goodwill and intangible assets with indefinite lives to be reviewed for impairment annually, or more frequently if circumstances indicate a possible impairment.

350, Intangibles-Goodwill and Other requires goodwill and other intangible assets with indefinite lives to be reviewed for impairment annually, or more frequently if circumstances indicate a possible impairment.

We assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value.

If, after assessing the qualitative factors, a company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying value, then performing the two-step impairment test is unnecessary.

However, if a company concludes otherwise, then it is required to perform the first step of the two-step goodwill impairment test.

If the carrying value of a reporting unit exceeds its fair value in the first step of the test, then a company is required to perform the second step of the goodwill impairment test to measure the amount of the reporting unit's goodwill impairment loss, if any.

In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment.

The new guidance eliminates the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment.

Under the new guidance the goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount, and recognizing an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value, although it cannot exceed the total amount of goodwill allocated to that reporting unit.

During the third quarter of 2017, we elected to prospectively adopt ASU2017-04.

This eliminates the requirement to perform step 2 of the goodwill impairment test.

In fiscal 2017 and 2016, the Company chose to bypass the qualitative assessment and proceed directly to performing the quantitative evaluation of the fair value of the reporting unit, to compare against the carrying value of the reporting unit.

However, if a company concludes otherwise, then it is required to perform the goodwill impairment test.

The Company’s impairment test is performed by comparing the fair value of a reporting unit with its carrying value, and determining if the carrying amount exceeds its fair value.

As part of the annual evaluation, the Company performs an impairment test of its goodwill in the fourth quarter of each fiscal year to coincide with the completion of its annual forecasting and refreshing of its business outlook processes.

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Impairment assessments inherently involve judgment as to the assumptions made about the expected future cash flows and the impact of market conditions on those assumptions.

Future events and changing market conditions may impact the assumptions as

to prices, costs, growth rates or other factors that may result in changes in the estimates of future cash flows.

Future events and changing market conditions may impact the assumptions as to prices, costs, growth rates or other factors that may result in changes in the estimates of future cash flows.

Although the Company believes the assumptions that it has used in testing for impairment are reasonable, significant changes in any one of the assumptions could produce a significantly different result.

Indicators of potential impairment may lead the Company to perform interim goodwill impairment assessments, including significant and unforeseen customer losses, a significant adverse change in legal factors or in the business climate, a significant adverse action or assessment by a regulator, a significant stock price decline or unanticipated competition.

For further information on goodwill and intangible assets, see Note 6 to our consolidated financial statements in Item 8.

Indicators of potential impairment, including significant and unforeseen customer losses, a significant adverse change in legal factors or in the business climate, a significant adverse action or assessment by a regulator, a significant stock price decline or unanticipated competition, may lead the Company to perform interim goodwill impairment assessments.

For further information on goodwill and other intangible assets, see Note 4 to our consolidated financial statements in Item 8.

In accordance with ASC No.

740 , Income Taxes , deferred income taxes are determined using the balance sheet method.

We record a valuation allowance to reduce our deferred tax assets to the amount we expect is more likely than not to be realized.

While we have considered future taxable income and our ongoing tax planning strategies in assessing the need for the valuation allowance, if we were to determine that we would be able to realize our deferred tax assets in the future in excess of our net recorded amount, an adjustment to the deferred tax asset would increase income in the period such determination was made.

Likewise, should we determine that we would not be able to realize all or part of our net deferred tax assets in the future, an adjustment to the deferred tax asset would decrease income in the period such determination was made.

In accordance with ASC No.

740 Topic 10, Income Taxes, General (“ASC 740.10”), we account for uncertain tax positions taken or expected to be taken in the Company's income tax return.

Under ASC 740.10, we utilize a two-step approach for evaluating uncertain tax positions.

Step one, or recognition, requires us 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 process, if any.

The Financial Accounting Standards Board ("FASB") has issued Accounting Standard Update ("ASU") 2015-17, Income Taxes (Topic 740), regarding the presentation of deferred income taxes.

Under the new standard, both deferred tax liabilities and assets are required to be classified as noncurrent in a classified balance sheet.

During the first quarter of fiscal 2016, we elected to prospectively adopt ASU 2015-17, thus reclassifying current deferred taxes to noncurrent on the accompanying Consolidated Balance Sheet.

The Company records a valuation allowance to reduce its deferred tax assets to the amount expected, on a more likely than not basis, to be realized.

While the Company has considered future taxable income and ongoing tax planning strategies in assessing the need for the valuation allowance, if it were to determine that it would be able to realize its deferred tax assets in the future in excess of its net recorded amount, an adjustment to deferred tax assets would increase income in the period when such determination is made.

Likewise, should the Company determine that it would not be able to realize all or part of its deferred tax assets in the future, an adjustment to deferred tax assets would decrease income in the period when such determination is made.

The Company determines the amount of unrecognized tax benefit with respect to uncertain tax positions taken or expected to be taken on its income tax returns in accordance with ASC No.

740 Topic 10, Income Taxes, General (“ASC 740.10”).

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.

Equity-Based Compensation

We account for equity-based compensation under the provisions of ASC No.

The Company accounts for equity-based compensation under the provisions of ASC No.

718, Compensation - Stock Compensation (“ASC 718”).

ASC 718 requires the recognition of the fair value of equity-based compensation in net income.

Compensation expense associated with market-based restricted stock is determined using a Monte-Carlo valuation model, and compensation expense associated with time-based and performance-based restricted stock is determined based on the number of shares granted and the fair value on the date of grant.

The fair value of our stock option awards are estimated using a Black-Scholes option valuation model.

The calculation of equity-based compensation costs requires us to estimate the number of awards that will be forfeited during the vesting period.

We have estimated forfeitures at the time of grant based upon historical experience, and review the forfeiture rates periodically and make adjustments as necessary.

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

In general, equity-based awards vest annually over a three year period.

Our performance-based restricted stock entitles the employee to receive common shares of the Company on the three-year anniversary of the grant date (if employed by the Company) if return on invested capital and revenue growth targets set by the Management Development and Compensation Committee of the Board of Directors on the date of grant are met.

If return on invested capital and revenue growth targets are not met, performance-based restricted stock does not vest.

Estimated attainment percentages and the corresponding equity-based compensation expense reported may vary from period to period.

ASC 718 requires the recognition of the fair value of the equity-based compensation in net income.

Compensation expense associated with Relative TSR Performance Share Units is determined using a Monte-Carlo valuation model, and compensation expense associated with time-based and Growth Performance Share Units is determined based on the number of shares granted and the fair value on the date of grant.

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 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.

RECENT ACCOUNTING PRONOUNCEMENTS

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The following table reflects our income from operations for fiscal 2022 and 2021:

(dollar amounts in thousands)

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

Net revenue $ 1,503,620 $ 1,517,664 $ (14,044) (0.9) %

Cost of sales 755,300 820,678 (65,378) (8.0) %

Gross profit 748,320 696,986 51,334 7.4 %

Selling, general and administrative 141,396 147,061 (5,665) (3.9) %

Research and development 136,852 137,478 (626) (0.5) %

Impairment charges

Operating expenses 278,248 284,539 (6,291) (2.2) %

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(in thousands) 2022 2021

(in thousands)

September 30, 2017

October 1, 2016

Our net revenues for fiscal 2017 increased as compared to our net revenues for fiscal 2016 due to strong customer demand.

The semiconductor industry is volatile and our operating results have fluctuated significantly in the past.

Customer demand for our products could weaken and lead to a decline in our net revenues.

Approximately 92.9% and 92.4% of our net revenue for fiscal 2017 and 2016 , respectively, was for shipments to customer locations outside of the U.S., primarily in the Asia/Pacific region.

In the Asia/Pacific region, our customer base is also becoming more geographically concentrated as a result of economic and industry conditions.

Approximately 40.0% and 33.7% of our net revenue for fiscal 2017 and 2016 , respectively, was for shipments to customers located in China.

The following table reflects net revenue by business segment for fiscal 2017 and 2016 :

(dollar amounts in thousands)

Capital Equipment

Bookings $ 1,226,524 $ 2,176,981

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

Backlog $ 510,145 $ 787,241

The semiconductor industry is volatile and our operating results are adversely impacted by volatile worldwide economic conditions.

Though the semiconductor industry’s cycle can be independent of the general economy, global economic conditions may have a direct impact on demand for semiconductor units and ultimately demand for semiconductor capital equipment and expendable tools.

Accordingly, our business and financial performance is impacted, both positively and negatively, by fluctuations in the macroeconomic environment.

Our visibility into future demand is generally limited and forecasting is difficult.

There can be no assurances regarding levels of demand for our products and we believe historical industry-wide volatility will persist.

and several other countries have levied tariffs on certain goods.

In particular, trade tensions between the U.S.

and China have been escalating since 2018, with U.S.

tariffs on Chinese goods and retaliatory Chinese tariffs on U.S.

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 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 Ball Bonding Equipment, APS and All Others, partially offset by higher volume in Wedge Bonding Equipment and Advanced Solutions, as further outlined following the tables presented immediately below.

Please refer to Note 16 for further information on the revision of the reportable and operating segments.

The following table reflects net revenue by reportable segments for fiscal 2022 and 2021:

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

Net revenue % of total net revenue Net revenue % of total net revenue

Ball Bonding Equipment $ 909,428 60.5 % $ 1,016,663 67.0 % $ (107,235) (10.5) %

Wedge Bonding Equipment 194,086 12.9 % 138,836 9.2 % $ 55,250 39.8 %

Advanced Solutions 94,683 6.3 % 35,123 2.3 % $ 59,560 169.6 %

APS 197,152 13.1 % 205,088 13.5 % $ (7,936) (3.9) %

All Others 108,271 7.2 % 121,954 8.0 % $ (13,683) (11.2) %

Total net revenue $ 1,503,620 100.0 % $ 1,517,664 100.0 % $ (14,044) (0.9) %

Capital Equipment

The following table reflects the components of Capital Equipment net revenue change between fiscal 2017 and 2016 :

Fiscal 2017 vs.

(in thousands)

Capital Equipment

For fiscal 2017, the higher Capital Equipment net revenue as compared to fiscal 2016 was primarily due to higher volume.

The higher sales volume was primarily due to growing market demand in consumer, enterprise, automotive and industrial applications partially offset by lower demand for our Hybrid products in the SiP market.

The higher sales volume was partially offset by unfavorable price variance due to price reduction.

The following table reflects the components of APS net revenue change between fiscal 2017 and 2016 :

Fiscal 2017 vs.

(in thousands)

For fiscal 2017, the higher APS net revenue as compared to fiscal 2016 was primarily due to higher sales in tools.

This was partially offset by price reduction.

The following table reflects gross profit by business segment for fiscal 2017 and 2016 :

(dollar amounts in thousands)

Capital Equipment

Total gross profit

The following table reflects gross profit as a percentage of net revenue by business segment for fiscal 2017 and 2016 :

Capital Equipment

Ball Bonding Equipment

For fiscal 2022, the lower Ball Bonding Equipment net revenue as compared to fiscal 2021 was primarily 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.

Wedge Bonding Equipment

For fiscal 2022, the higher Wedge Bonding Equipment net revenue as compared to fiscal 2021 was primarily due to higher volume and favorable price variance due to product mix.

The higher volume was due to an increase in customer investments mainly in the automotive and renewable energy market.

Advanced Solutions

For fiscal 2022, the higher Advanced Solutions net revenue as compared to fiscal 2021 was primarily due to higher volume mainly for thermocompression systems and solutions and the timing of revenue recognition for certain customer contracts.

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.

For fiscal 2022, the lower net revenue in the “All Others” category as compared to fiscal 2021 was primarily due to lower volume.

The lower volume was due to a decrease in customer purchases primarily in mini LED transfer solutions market and the general semiconductor end markets.

Gross Profit Margin

The following table reflects gross profit as a percentage of net revenue by reportable segments for fiscal 2022 and 2021:

2022 2021 Basis point

Ball Bonding Equipment 49.0 % 45.1 % 390

Wedge Bonding Equipment 48.1 % 42.2 % 590

Advanced Solutions 33.7 % 17.1 % 1,660

APS 60.4 % 58.2 % 220

All Others 54.5 % 45.4 % 910

Total gross margin 49.8 % 45.9 % 390

Capital Equipment

The following table reflects the components of Capital Equipment gross profit change between fiscal 2017 and 2016 :

Fiscal 2017 vs.

2016 (As Restated)

(in thousands)

Capital Equipment

For fiscal 2017, the higher Capital Equipment gross profit as compared to fiscal 2016 was primarily due to higher volume and lower cost.

The lower cost was due to product mix and better absorption from higher manufacturing volume.

The higher sales volume and lower cost were partially offset by unfavorable price variance due to price reduction.

The following table reflects the components of APS gross profit change between fiscal 2017 and 2016 :

Fiscal 2017 vs.

(in thousands)

For fiscal 2017, the higher APS gross profit as compared to fiscal 2016 was primarily due to higher sales in tools.

This was partially offset by price reduction.

Ball Bonding Equipment

For fiscal 2022, the higher Ball Bonding Equipment gross profit margin as compared to fiscal 2021 was primarily driven by favorable price variance due to product mix (higher sales of higher margin products).

Wedge Bonding Equipment

For fiscal 2022, the higher Wedge Bonding Equipment gross profit margin as compared to fiscal 2021 was primarily driven by favorable price variance due to product mix (higher sales of higher margin products).

Advanced Solutions

For fiscal 2022, the higher Advanced Solutions gross profit margin as compared to fiscal 2021 was primarily driven by favorable price variance due to timing of revenue recognition for certain customer contracts.

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.

For fiscal 2022, the higher gross profit margin in the “All Others” category as compared to fiscal 2021 was primarily driven by favorable price variance due to product mix in the mini LED transfer solutions market and favorable customer mix in the general semiconductor end market.

Operating Expenses

The following table reflects operating expenses as a percentage of net revenue for fiscal 2017 and 2016 :

Selling, general & administrative

Research & development

Impairment charges

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

For fiscal 2017, lower SG&A as compared to fiscal 2016 was primarily due to net decrease of $5.2 million of expenses relating to the restructuring programs, $1.4 million relating to other severance payments and a $0.8 million recovery of insurance claims.

These were partially offset by $3.4 million increase in incentive compensation due to better current fiscal year performance and $2.8 million increase in executive staff costs.

Research and Development (“R&D”)

For fiscal 2017, higher R&D expenses as compared to fiscal 2016 was primarily due to higher staff costs.

This was partially offset by lower prototype material costs for advanced packaging products.

Impairment Charges

In fiscal 2017 , the Company recognized a non-cash impairment charge related to goodwill in the EA/APMR (former Assembléon) reporting unit.

See Note 6 “Goodwill and Intangible Assets” of the accompanying consolidated financial statements for further information.

Income from Operations (As Restated)

For fiscal 2017 , total income from operations was higher by $59.1 million as compared to fiscal 2016.

This was primarily due to higher revenue for Capital Equipment sales and partially offset by higher operating expenses as explained above.

Interest Income and Expense

The following table reflects interest income and interest expense for fiscal 2017 and 2016 :

(dollar amounts in thousands)

Interest income

Interest expense

For fiscal 2017, interest income was higher as compared to fiscal 2016.

This was primarily due to higher returns and a larger cash, cash equivalent and short-term investment balances.

Interest expense for fiscal 2017 and 2016 was attributable to the interest on financing obligation relating to the building, which was incurred subsequent to the completion of the building in December 2013 (Refer to Note 11 of our Consolidated Financial Statements included in Item 8 of this report).

Provision for Income Taxes

The following table reflects the provision for income taxes and the effective tax rate for fiscal 2017 and 2016 :

(in thousands)

Income tax (benefit) / expense

Effective tax rate

During fiscal 2017, the Company elected to adopt the foreign tax credit for its U.S.

federal tax return filings.

As a result of this election, the Company has amended its U.S.

tax returns from 2006 through 2015, filed its 2016 return on the same basis, and accrued the benefit for 2017.

Due to this tax position, the Company recorded foreign tax credits of approximately $26.1 million which resulted in a decrease of our effective tax rate from fiscal 2016.

For fiscal 2017, the effective tax rate differed from the federal statutory tax rate primarily due to tax benefits from foreign tax credits, profits generated in foreign operations subject to a lower statutory tax rate than the U.S.

federal rate, domestic research tax credit, and the impact of tax holidays, partially offset by an increase for deferred taxes on unremitted earnings, deemed dividends, foreign withholding taxes, tax liabilities from foreign operations, and non-deductible goodwill impairment.

For fiscal 2016, the effective tax rate differed from the federal statutory tax rate primarily due to tax benefits from profits in foreign operations subject to a lower statutory tax rate than the federal rate, tax benefits from the change in permanent reinvestment assertion from the restructuring implementation, tax benefits from domestic research expenditures, and the impact of tax holidays, partially offset by a tax liability arising from a settlement with a foreign tax authority, an increase for deferred taxes on unremitted earnings, foreign withholding taxes, and an increase in valuation allowance against certain foreign deferred tax assets.

Our future effective tax rate would be affected if earnings were lower than anticipated in countries where we are subjected to lower statutory rates and higher than anticipated in countries where we are subjected to higher statutory rates, by changes in the valuation of our deferred tax assets and liabilities, or by changes in tax laws, regulations, accounting principles, or interpretations thereof.

In addition, changes in assertion for foreign earnings permanently or non-permanently reinvested as a result of changes in facts and circumstances could significantly impact the effective tax rate.

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.

We cannot practicably estimate the financial outcomes of these examinations.

Results of Operations for fiscal 2016 and 2015

The following table reflects our income from operations for fiscal 2016 and 2015:

(dollar amounts in thousands)

Cost of sales

The following table reflects operating expenses for fiscal 2022 and 2021:

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

Selling, general and administrative $ 141,396 $ 147,061 $ (5,665) (3.9) %

Research and development 136,852 137,478 $ (626) (0.5) %

Operating expenses

Income from operations

Bookings and Backlog

The following tables reflect our bookings and backlog for fiscal 2016 and 2015:

(in thousands)

October 1, 2016

October 3, 2015

Our net revenues for fiscal 2016 increased as compared to our net revenues for fiscal 2015 due to strong customer demand and additional revenue resulting from the Assembléon acquisition.

The semiconductor industry is volatile and our operating results have fluctuated significantly in the past.

Customer demand for our products could weaken and lead to a decline in our net revenues.

Approximately 92.4% and 91.2% of our net revenue for fiscal 2016 and 2015, respectively, was for shipments to customer locations outside of the U.S., primarily in the Asia/Pacific region.

In the Asia/Pacific region, our customer base is also becoming more geographically concentrated as a result of economic and industry conditions.

Approximately 33.7% and 31.6% of our net revenue for fiscal 2016 and 2015 was for shipments to customers located in China.

The following table reflects net revenue by business segment for fiscal 2016 and 2015:

(dollar amounts in thousands)

Capital Equipment

Total net revenue

Capital Equipment

The following table reflects the components of Capital Equipment net revenue change between fiscal 2016 and 2015:

Fiscal 2016 vs.

(in thousands)

Capital Equipment

For fiscal 2016, the higher Capital Equipment net revenue as compared to fiscal 2015 was primarily due to the higher volume driven by the strong demand from our customers and inclusion of the additional revenue resulting from the Assembléon acquisition.

This was partially offset by the unfavorable price variance in our ball bonders and Advanced Packaging products.

The unfavorable price variance was due to the unfavorable customer mix.

The following table reflects the components of APS net revenue change between fiscal 2016 and 2015:

Fiscal 2016 vs.

(in thousands)

For fiscal 2016, the higher APS net revenue as compared to fiscal 2015 was primarily due to the higher volume.

The higher volume was primarily due to higher demand in wire bonding tools and inclusion of the additional revenue resulting from the Assembléon acquisition.

This was partially offset by a price reduction.

The following table reflects gross profit by business segment for fiscal 2016 and 2015:

(dollar amounts in thousands)

Capital Equipment

Total gross profit

The following table reflects gross profit as a percentage of net revenue by business segment for fiscal 2016 and 2015:

Capital Equipment

Total gross margin

Capital Equipment

The following table reflects the components of Equipment gross profit change between fiscal 2016 and 2015:

Fiscal 2016 vs.

2015 (As Restated)

(in thousands)

Capital Equipment

For fiscal 2016, the higher Capital Equipment gross profit as compared to fiscal 2015 was primarily due to the higher volume described above and lower cost.

The higher volume was driven by the strong demand from our customers and inclusion of the additional revenue resulting from the Assembléon acquisition.

The lower cost was primarily due to product mix.

Higher volume and lower cost were partially offset by the unfavorable price variance in our ball bonders and Advanced Packaging products.

The unfavorable price variance was due to the unfavorable customer mix.

The following table reflects the components of APS gross profit change between fiscal 2016 and 2015:

Fiscal 2016 vs.

(in thousands)

For fiscal 2016, the higher APS gross profit as compared to fiscal 2015 was primarily due to the higher volume.

The higher volume was primarily due to higher demand in wire bonding tools and wedge bonding tools and inclusion of the additional revenue resulting from the Assembléon acquisition.

This was partially offset by a price reduction.

Operating Expenses

The following table reflects operating expenses as a percentage of net revenue for fiscal 2016 and 2015:

(As Restated)

Selling, general & administrative

Research & development

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

For fiscal 2016, higher SG&A as compared to fiscal 2015 was primarily due to $7.9 million of expenses relating to the restructuring program, $7.6 million increase due to inclusion of SG&A expenses resulting from the Assembléon acquisition, $3.2 million increase in incentive compensation due to better performance and a $2.6 million unfavorable net foreign exchange variance.

These were partially offset by lower staff costs of $5.5 million due to streamlining of our international operations and functions, and lower amortization expenses of $4.7 million relating to the wedge bonder developed technology which were fully amortized in fiscal year 2015.

Total $ 278,248 $ 284,539 $ (6,291) (2.2) %

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

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 2016, higher R&D expenses as compared to fiscal 2015 were primarily due to additional investment in the development of advanced packaging products.

This was partially offset by lower staff costs.

Income from Operations (As Restated)

For fiscal 2016, total income from operations was higher by $15.4 million as compared to fiscal 2015.

This was primarily due to higher revenue for equipment sales and partially offset by higher operating expenses as explained above.

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/(loss) from operations by reportable segments for fiscal 2022 and 2021:

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

Ball Bonding Equipment $ 385,276 $ 401,450 $ (16,174) (4.0) %

Wedge Bonding Equipment 66,649 34,563 32,086 92.8 %

Advanced Solutions ( 15,389 ) ( 40,759 ) 25,370 62.2 %

APS 82,473 75,400 7,073 9.4 %

All Others 25,732 20,565 5,167 25.1 %

Corporate Expenses ( 74,669 ) ( 78,772 ) 4,103 5.2 %

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

Ball Bonding Equipment, Wedge Bonding Equipment, Advanced Solutions, APS and All Others

For the fiscal year 2022, the higher Wedge Bonding Equipment, All Others and APS income from operations and the lower Advanced Solutions loss from operations as compared to the prior year period was primarily due to the changes in revenue and operating expenses as explained under “Net Revenue” and “Operating Expenses” above.

For Ball Bonding Equipment, the lower income from operations was primarily due to the changes in revenue as explained under “Net Revenue” above.

Interest Income and Expense

The following table reflects interest income and interest expense for fiscal 2022 and 2021:

(dollar amounts in thousands)

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

Interest income $ 7,124 $ 2,321 $ 4,803 206.9 %

Interest expense $ (208) $ (218) $ 10 4.6 %

For fiscal 2016, higher interest income was derived from a higher cash, cash equivalent and short-term investment balances.

Interest expense for fiscal 2016 and 2015 was attributable to the interest on financing obligation relating to the new building, which was incurred subsequent to the completion of the new building in December 2013 (Refer to Note 11 of our Consolidated Financial Statements included in Item 8 of this report).

Interest income

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

For fiscal 2022, the lower interest expense as compared to fiscal 2021 was primarily due to lower levels of average short-term debt outstanding.

Please refer to Note 10:

Debt and Other Obligations to our consolidated financial statements in Item 8 for a discussion of the Overdraft Facility.

Provision for Income Taxes

The following table reflects the provision for income taxes and the effective tax rate for fiscal 2022 and 2021:

(in thousands)

Income tax expense / (benefit)

(dollar amounts in thousands) 2022 2021 Change

Provision for income taxes $ 43,443 $ 47,295 $ (3,852)

Effective tax rate 9.1 % 11.4 % (2.3) %

For fiscal 2016, the effective income tax rate increased from fiscal 2015 by 46.7% due primarily to a lower tax benefit of $9.7 million recorded in 2016 as compared to $19.7 million recorded in 2015 related to the reduction in deferred tax liabilities as a result of the change in permanent reinvestment assertion, a one-time tax expense of $4.9 million recorded in 2016 arising from a settlement reached with a foreign tax authority, and a restructuring related tax expense of $4.2 million.

For fiscal 2015, the effective income tax rate differed from the federal statutory rate due primarily to tax benefits from the reduction in deferred tax liabilities on certain unremitted foreign earnings as a result of the change in permanent reinvestment assertion due to a business structure reorganization, tax benefits from research and development expenditures, profits from foreign operations subject to a lower statutory tax rate than the federal rate, and the impact of tax holidays, offset by an increase in valuation allowance against certain foreign deferred tax assets, foreign earnings not permanently reinvested, and foreign withholding taxes.

In addition, changes in assertion for foreign earnings permanently or non-permanently reinvested as a result of changes in facts and circumstances could significantly impact the effective tax rate.

In fiscal 2016, the Company restructured its entities resulting in a change in its permanent reinvestment assertion outside the United States.

During the year ended October 1, 2016, approximately $9.7 million in deferred tax liability was reversed and recorded as a tax benefit due to the change in the assertion.

As part of the plan, the Company also recorded a restructuring related tax expense of $4.2 million for the transfers and exchanges of certain foreign subsidiaries.

We regularly assess the effects resulting from these factors to determine the adequacy of our provision for income taxes.

We cannot practicably estimate the financial outcomes of these examinations.

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:

Income Taxes to our consolidated financial statements in Item 8.

LIQUIDITY AND CAPITAL RESOURCES

The following table reflects total cash and investments as of September 30, 2017 and October 1, 2016 :

(dollar amounts in thousands)

September 30, 2017

October 1, 2016

The following table reflects total cash, cash equivalents and short-term investments as of October 1, 2022 and October 2, 2021:

(dollar amounts in thousands) October 1, 2022 October 2, 2021 Change

Cash and cash equivalents $ 555,537 $ 362,788 $ 192,749

Restricted cash

Short-term investments 220,000 377,000 (157,000)

Total cash, cash equivalents, restricted cash and short-term investments

Total cash, cash equivalents, and short-term investments $ 775,537 $ 739,788 $ 35,749

Percentage of total assets 48.8 % 46.2 %

The following table reflects summary Consolidated Statement of Cash Flow information for fiscal 2017 and 2016 :

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

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

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

3 unchanged sentences

Cash and cash equivalents, end of period $ 555,537 $ 362,788

Fiscal 2017 (As Restated)

Net cash provided by operating activities was primarily the result of net income of $126.1 million , non-cash adjustments of $61.8 million and working capital changes of $(51.6) million .

The change in working capital was primarily driven by an increase in accounts and notes receivable of $67.9 million and an increase in net inventories of $ 47.4 million .

This was partially offset by an increase in accounts payable and accrued expenses and other current liabilities of $63.4 million .

The increase in accounts receivable was due to higher sales in fiscal 2017 as compared to fiscal 2016.

The increase in net inventories was primarily due to higher manufacturing activity in the fourth quarter of fiscal 2017 as compared to fourth quarter of fiscal 2016.

The increase in accounts payable and accrued expenses and other current liabilities was primarily due to an increase in manufacturing activity, higher accrued incentive compensation due to better performance, and higher customer obligations.

Net cash used in investing activities was primarily due to net cash outflow for the Liteq acquisition of $27.1 million , purchases of short-term investments of $305.0 million and capital expenditures of $25.6 million , offset by maturity of short-term investments of $213.0 million .

Net cash used in financing relates to the repurchase of common stock of $18.2 million , reversal of excess tax benefits of $4.4 million and repayment of loans of $0.6 million .

This was offset by proceeds from the exercise of stock options of $0.5 million .

Fiscal 2016 (As Restated)

Net cash provided by operating activities was primarily the result of net income of $48.5 million, non-cash adjustments of $14.1 million and working capital changes of $5.8 million.

The change in working capital was primarily driven by increase in accounts payable and accrued expenses and other current liabilities of $32.7 million, income tax payable of $10.5 million and others of $1.1 million.

This was partially offset by an increase in accounts and notes receivable of $22.1 million and an increase in net inventories of $16.3 million.

The increase in accounts payable and accrued expenses and other current liabilities and the increase in net inventories was primarily due to higher manufacturing activity in the fourth quarter of fiscal 2016 as compared to fourth quarter of fiscal 2015 in anticipation of higher sales in the first quarter of fiscal 2017.

The higher income taxes payable was mainly due to additional tax liability arising from a settlement reached with a foreign tax authority.

The increase in accounts receivables was due to higher sales in the fourth quarter of fiscal 2016 as compared to the fourth quarter of fiscal 2015.

The lower sales in fourth quarter of fiscal 2015 was mainly attributable to lower equipment utilization rate due to the economic conditions, and therefore lower demand from our customers.

Net cash used in investing activities was primarily due to capital expenditures of $6.2 million offset by proceeds from sales of property, plant and equipment of $1.1 million.

Net cash used in financing relates to the repurchase of common stock of $14.6 million and repayment of loans of $0.5 million.

This was offset by proceeds from the exercise of stock options of $0.4 million.

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.

This was partially offset by an increase in accounts payable and accrued expenses and other current liabilities of $182.0 million, and income tax payable of $7.7 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 2021 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 $35.0 million, the Uniqarta acquisition of $26.3 million, and capital expenditures of $22.8 million, partially offset by proceeds from the sale of an equity-method investment of $2.1 million.

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.

Fiscal 2023 Liquidity and Capital Resource Outlook

We expect our fiscal 2023 capital expenditures to be between $70.0 million and $74.0 million.

Expenditures are anticipated to be primarily used for R&D projects, enhancements to our manufacturing operations in Asia, improvements to our information technology infrastructure 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.

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.

As of September 30, 2017 and October 1, 2016, approximately $565.0 million and $479.7 million of cash, cash equivalents, restricted cash and short-term investments were held by the Company's foreign subsidiaries, respectively.

The cash amounts not available for use in the U.S.

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

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.

income tax as of September 30, 2017 and October 1, 2016, were approximately $505.5 million and $428.4 million, respectively.

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.

The Company’s U.S.

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

operating activities.

In addition, the Company has entered into an Uncommitted Revolving Credit Agreement with United Overseas Bank Limited, New York Agency ("UOB"), providing for a $25 million revolving credit facility (the "2016 Credit Facility").

The 2016 Credit Facility is an unsecured revolving credit facility of $25 million with an initial maturity date of March 20, 2017, which has been extended on the same terms until March 20, 2018.

The proceeds of the 2016 Credit Facility may be used for the Company's general corporate purposes and provide additional liquidity for any U.S.

We believe our U.S.

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

for the foreseeable future including funding of U.S.

operations, capital expenditures and the share repurchase program as approved by the Board of Directors.

We currently do not expect that we will repatriate the funds we have designated as indefinitely reinvested outside the U.S., but may do so in the future.

In fiscal 2022, the Company’s U.S.

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

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.

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.

cash needs exceed its funds generated by U.S.

operations due to changing business conditions or transactions outside the ordinary course, such as acquisitions of large capital assets, businesses or any other capital appropriation in the U.S., the Company may require additional financing in the U.S.

In this event, the Company could borrow under the 2016 Credit Facility, seek other U.S.

borrowing alternatives, repatriate funds held by foreign subsidiaries that have already been subject to U.S.

taxation without incurring additional income tax expense (i.e.

earnings previously subject to U.S.

income tax or U.S.

deferred taxes already accrued on those respective earnings), or a combination thereof.

On August 15, 2017, the Company announced that it fully executed its $100 million share repurchase program (the "Program"), originally announced on August 27, 2014.

In addition, the Company announced that its Board of Directors approved a new share repurchase program (the "New Program") that authorizes the repurchase of up to $100 million of the Company's common shares, from time to time over the three year period ending August 1, 2020.

The Company may purchase shares of its common stock through open market and privately negotiated transactions at prices deemed appropriate by management.

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

The New Program is effective immediately, may be suspended or discontinued at any time and will be funded using the Company's available cash, cash equivalents and short-term investments.

The timing and amount of repurchase transactions under the New Program depend on market conditions as well as corporate and regulatory considerations.

During the year ended September 30, 2017 , the Company repurchased a total of 0.9 million shares of common stock at a cost of $18.2 million .

As of September 30, 2017 , our remaining share repurchase authorization under the New Program was approximately $88.8 million .

Other Obligations and Contingent Payments (As Restated)

and foreign operations due to changing business conditions or transactions outside the ordinary course, such as acquisitions of large capital assets, businesses or any other capital appropriation in the U.S., the Company may require additional financing in the U.S.

In this event, the Company could seek U.S.

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 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.

The Program may be suspended or discontinued at any time and is funded using the Company’s available cash, cash equivalents and short-term investments.

Under the Program, shares may be repurchased through open market and/or privately negotiated transactions at prices deemed appropriate by management.

The timing and amount of repurchase transactions under the Program depend on market conditions as well as corporate and regulatory considerations.

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 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.

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.

Other Obligations and Contingent Payments

In accordance with U.S.

generally accepted accounting principles, certain obligations and commitments are not required to be included in the Consolidated Balance Sheets and Statements of Operations.

These obligations and commitments, while entered into in the normal course of business, may have a material impact on our liquidity.

Certain of the following commitments as of September 30, 2017 are appropriately not included in the Consolidated Balance Sheets and Statements of Operations included in this Form 10-K/A;

however, they have been disclosed in the table below for additional information.

The Company’s other non-current liabilities in the Consolidated Balance Sheets consist primarily of deferred tax liabilities, gross long-term tax payable and retirement obligations.

As of September 30, 2017, the Company had deferred tax liabilities of $27.2 million and long-term tax payable of $6.4 million.

At this time, the Company is unable to make a reasonably reliable estimate of the timing of payments due to uncertainties in the timing of tax audit outcomes;

therefore, such amounts are not included in the above contractual obligation table.

In addition, the Company has retirement obligations and other severances of $6.4 million which are payable on employee departure.

The following table presents certain payments due by the Company under contractual obligations with minimum firm commitments as of September 30, 2017 :

generally accepted accounting principles, certain obligations and commitments as of October 1, 2022 are appropriately not included in the Consolidated Balance Sheets and Statements of Operations in this Form 10-K/A.

However, because these obligations and commitments are entered into in the normal course of business and because they may have a material impact on our liquidity, we have disclosed them in the table below.

Additionally, as of October 1, 2022, the Company had deferred tax liabilities of $34.0 million and unrecognized tax benefit recorded within the income tax payable for uncertain tax positions of $16.9 million, including related accrued interest of $2.0 million.

These amounts are not included in the contractual obligation table below because we are unable to reasonably estimate the timing of these payments at this time.

The following table presents certain payments due by the Company under contractual obligations with minimum firm commitments as of October 1, 2022:

Payments due in

(in thousands)

Less than 1 year

More than 5 years

(in thousands) Total Less than 1 year 1 - 3 years 3 - 5 years More than 5 years

Inventory purchase obligations (1)

Operating lease obligations (2)

Asset retirement obligations (reflected on our Balance Sheets) (3)

Total Obligations and Contingent Payments not reflected on the Consolidated Financial Statements

$ 316,123 316,123 $ — $ — $ —

one-time transition tax payable (2)

(reflected on our Balance Sheets)

54,408 6,723 29,414 18,271 —

Total $ 370,531 $ 322,846 $ 29,414 $ 18,271 $ —

(1) We order inventory components in the normal course of our business.

A portion of these orders are non-cancellable and a portion may have varying penalties and charges in the event of cancellation.

Represents minimum rental commitments under various leases (excluding taxes, insurance, maintenance and repairs, which are also paid by us) primarily for various facility and equipment leases, which expire periodically through 2023 (not including lease extension options, if applicable).

The annual rent and service charge for our corporate headquarters range from $4 million to $5 million Singapore dollars and is not included in the table above.

In accordance with ASC No.

840, Leases ("ASC 840"), the Company was considered to be the owner of its headquarters during the construction phase due to its involvement in the asset construction.

As a result of the Company's continued involvement during the lease term, the Company did not fulfill the criteria to apply sale-leaseback accounting under ASC 840.

Therefore, at completion, the building remained on the Consolidated Balance Sheet, and the corresponding financing obligation was reclassified to long-term liability.

As of September 30, 2017 , we recorded a financing obligation of $16.8 million .

The financing obligation is not reflected in the table above.

Asset retirement obligations are associated with commitments to return the property to its original condition upon lease termination at various sites.

Off-Balance Sheet Arrangements

Credit facilities and Bank Guarantees

On November 22, 2013, the Company obtained a $5.0 million credit facility with Citibank in connection with the issuance of a bank guarantee for operational purposes.

As of September 30, 2017 , the outstanding amount was $3.2 million .

In addition, the Company has other bank guarantees for operational purposes which are secured with corresponding deposits placed with the issuer banks.

These amounts are shown as restricted cash in the Consolidated Balance Sheets.

On March 21, 2016, the Company entered into an Uncommitted Revolving Credit Agreement with United Overseas Bank Limited, New York Agency ("UOB"), providing for a $25 million revolving credit facility (the "2016 Credit Facility").

The 2016 Credit Facility is an unsecured revolving credit facility of $25 million with an initial term of one year, and has been extended by another year until March 20, 2018.

All other material terms and conditions of the 2016 Credit Facility remain in force and effect.

The proceeds of the 2016 Credit Facility may be used for the Company's general corporate purposes.

As of September 30, 2017 , there were no outstanding amounts under the 2016 Credit Facility and we were in compliance with the covenants described in the 2016 Credit Facility.

As of September 30, 2017 , we did not have any other off-balance sheet arrangements, such as contingent interests or obligations associated with variable interest entities.

(2) Associated with the U.S.

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

Credit Facilities

On February 15, 2019, the Company entered into a Facility Letter and Overdraft Agreement (collectively, the “Facility Agreements”) with MUFG Bank, Ltd., Singapore Branch (the “Bank”).

The Facility Agreements provide the Company and one of its subsidiaries with an overdraft facility of up to $150.0 million (the “Overdraft Facility”) for general corporate purposes.

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 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 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.

As of October 1, 2022, other than the bank guarantee disclosed in Note 10, we did not have any other off-balance sheet arrangements, such as contingent interests or obligations associated with variable interest entities.

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/A

Item 7. Management’s Discussion and Analysis