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Item 8. Financial Statements and Supplementary Data

2023-11-16 compared with 2022-11-17 · 318 added, 256 removed, 901 unchanged (39% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements of Kulicke and Soffa Industries, Inc.

listed in the index appearing under Item 15(a)(1) herein are filed as part of this Report under this Item 8.

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm 42

Consolidated Balance Sheets as of September 30, 2023 and October 1, 2022

Consolidated Statements of Operations for fiscal 2023, 2022, and 2021

Consolidated Statements of Comprehensive Income for fiscal 2023, 2022, and 2021

Consolidated Statements of Changes in Shareholders’ Equity for fiscal 2023, 2022, and 2021

Consolidated Statements of Cash Flows for fiscal 2023, 2022, and 2021

Notes to Consolidated Financial Statements 49

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Kulicke and Soffa Industries, Inc.

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We have audited the accompanying consolidated balance sheets of Kulicke and Soffa Industries, Inc.

and its subsidiaries (the “Company”) as of October 1, 2022 and October 2, 2021, and the related consolidated statements of operations, of comprehensive income, of changes in shareholders’ equity and of cash flows for each of the three years in the period ended October 1, 2022, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended October 1, 2022 appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

We also have audited the Company’s internal control over financial reporting as of October 1, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of October 1, 2022 and October 2, 2021 , and the results of its operations and its cash flows for each of the three years in the period ended October 1, 2022 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of October 1, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

and its subsidiaries (the “Company”) as of September 30, 2023 and October 1, 2022, and the related consolidated statements of operations, of comprehensive income, of changes in shareholders’ equity and of cash flows for each of the three years in the period ended September 30, 2023, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended September 30, 2023 appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

We also have audited the Company’s internal control over financial reporting as of September 30, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 30, 2023 and October 1, 2022 , and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2023 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

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We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded Kulicke and Soffa Hi-Tech Co., Ltd.

(“K&S Hi-Tech”) from its assessment of internal control over financial reporting as of September 30, 2023 because it was acquired by the Company in a purchase business combination during the year ended September 30, 2023.

We have also excluded K&S Hi-Tech from our audit of internal control over financial reporting.

K&S Hi-Tech is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent less than 1%, respectively, of the related consolidated financial statement amounts as of and for the year ended September 30, 2023.

Definition and Limitations of Internal Control over Financial Reporting

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Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

and (ii) involved our especially challenging, subjective, or complex judgments.

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.

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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.

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 assumptions 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 the reasonableness of management’s 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 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 included testing the effectiveness of controls relating to management’s reserves for excess and obsolete raw materials, including controls over management’s assumptions 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;

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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.

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

Evaluating management’s assumptions related to forecasted future consumption for raw materials involved evaluating whether the assumptions 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

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(in thousands, except per share amount)

October 1, 2022 October 2, 2021

September 30, 2023 October 1, 2022

Current assets:

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TOTAL SHAREHOLDERS’ EQUITY

$ 1,174,561 $ 1,194,650

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$ 1,499,777 $ 1,588,599

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

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Research and development 144,701 136,852 137,478

Impairment charges 21,535 1,346 —

Operating expenses 319,218 278,248 284,539

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Foreign currency translation adjustment 9,676 ( 30,536 ) 672

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

Unrecognized actuarial (loss) / gain on pension plan, net of tax ( 49 ) 2,276 —

9,627 ( 28,260 ) 672

Derivatives designated as hedging instruments:

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

Total other comprehensive (loss) / income ( 29,878 ) ( 501 ) 7,419

Unrealized gain / (loss) on derivative instruments, net of tax 2,381 ( 2,694 ) 24

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

( 870 ) 1,076 ( 1,197 )

Net increase / (decrease) from derivatives designated as hedging instruments, net of tax 1,511 ( 1,618 ) ( 1,173 )

Total other comprehensive income / (loss) 11,138 ( 29,878 ) ( 501 )

Comprehensive income $ 68,286 $ 403,667 $ 366,660

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Shares Amount

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

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

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

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

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

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Net income — — — 367,161 — 367,161

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

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

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

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

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Net income — — — 57,148 — 57,148

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

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

Balances as of October 1, 2022 57,128 $ 561,684 $ ( 675,800 ) $ 1,341,666 $ ( 32,900 ) $ 1,194,650

Other comprehensive income — — — — 11,138 11,138

Total comprehensive income — — — 57,148 11,138 68,286

Balances as of September 30, 2023 56,310 $ 577,727 $ ( 737,214 ) $ 1,355,810 $ ( 21,762 ) $ 1,174,561

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

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Adjustment for inventory valuation 5,214 ( 2,613 ) ( 2,965 )

Change in the estimation of warranty reserve

— — ( 5,417 )

Deferred taxes ( 4,478 ) ( 8,648 ) ( 9,818 )

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

Unrealized fair value changes on equity investment 323 — —

Unrealized foreign currency translation 85 ( 7,278 ) ( 378 )

Share of results of equity-method investee — — 94

Changes in operating assets and liabilities:

Changes in operating assets and liabilities, net of assets and liabilities assumed in businesses combinations:

Accounts and notes receivable 152,667 113,340 ( 221,924 )

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Proceeds from sales of property, plant and equipment 591 181 291

Purchase of equity investments ( 397 ) — ( 1,288 )

Investment in private equity fund ( 642 ) ( 397 ) —

Purchase of short term investments ( 595,000 ) ( 469,000 ) ( 507,000 )

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Cash and cash equivalents at end of period $ 529,402 $ 555,537 $ 362,788

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:

Property, plant and equipment included in accounts payable and accrued expenses 3,000 9,063 1,928

CASH PAID FOR:

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

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

The 2023, 2022, and 2021 fiscal years ended on September 30, 2023, October 1, 2022 and October 2, 2021, 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 (“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.

The Company designs, develops, 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 integrated device manufacturers (“IDMs”), outsourced semiconductor assembly and test providers (“OSATs”), foundry service providers, and other electronics manufacturers and automotive electronics suppliers worldwide which, in turn, depend on the current and anticipated market demand for semiconductors and products utilizing semiconductors.

These downturns and slowdowns have in the past adversely affected the Company’s operating results.

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The preparation of consolidated financial statements requires management 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, management evaluates 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, the valuation estimates and assessment of impairment and observable price adjustments, income taxes, equity-based compensation expense, and warranties.

On an ongoing basis, management evaluates 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, accrual for customer credit programs, the valuation estimates and assessment of impairment and observable price adjustments, income taxes, equity-based compensation expense, and warranties.

Management bases its estimates on historical experience and on various other assumptions believed to be reasonable.

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Actual results may differ from these estimates.

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 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.

At the start of fiscal 2020, the Company determined there was a need to obtain granular data given uncertainty in sales demand.

Accordingly , the Company commenced the collection of granular data over the four fiscal quarters in 2020 to establish a more precise estimate of its warranty reserve.

This collection was finalized and the information incorporated in the fourth quarter of fiscal 2020.

This resulted in a decrease to the reserve for warranty and an increase in net income by $ 5.4 million for the fiscal year 2020, as well as an increase to net income per share, basic and diluted, by $ 0.09 and $ 0.09 , respectively.

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

In light of the macroeconomic headwinds, there has been uncertainty and disruption in the global economy and financial markets.

While there was no material impact to our consolidated financial statements as of and for the year ended September 30, 2023, these estimates may change, as new events occur and additional information is obtained, as well as other factors related to the macroeconomic headwinds that could materially impact our consolidated financial statements in future reporting periods.

KULICKE AND SOFFA INDUSTRIES, INC.

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Vulnerability to Certain Concentrations

Financial instruments which may subject the Company to concentrations of credit risk as of October 1, 2022 and October 2, 2021 consisted primarily of trade receivables.

Financial instruments which may subject the Company to concentrations of credit risk as of September 30, 2023 and October 1, 2022 consisted primarily of trade receivables.

The Company manages credit risk associated with investments by investing its excess cash in highly rated debt instruments of the U.S.

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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 and macroeconomic headwinds.

The Company actively monitors its customers’ financial strength to reduce the risk of loss, especially in light of the current macroeconomic headwinds.

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

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The Company invests in equity securities in companies to promote business and strategic objectives.

Equity investments are measured and recorded as follows:

• 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.

Non-marketable equity securities are equity securities without readily determinable fair value that are measured and recorded as follows:

• Either using a measurement alternative that measures the securities at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes, or;

• Using the published or estimated Net Asset Value (“NAV”) for investments that qualify as a practical expedient to determine the fair values of equity securities.

The fair values of the underlying investments are determined using quoted market prices, or independent third-party broker or dealer price quotes if quoted market prices are not available.

Changes in the fair value of the investments are recognized as gains and losses in earnings.

Allowance for Doubtful Accounts

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 and macroeconomic headwinds, additional allowances may be required.

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 the existing 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.

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If actual market conditions are less favorable than projections, additional inventory reserves may be required.

Inventory reserve provision for certain subsidiaries is determined based on management’s estimate of future consumption for equipment and spare parts.

Inventory reserve provision for certain subsidiaries is determined based on management’s estimate of future consumption for equipment, spare parts and tools.

This estimate is based on historical sales volumes, internal projections and market developments and trends.

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or significant changes in market capitalization.

During the fiscal years ended October 1, 2022 and October 2, 2021, no “triggering” events occurred.

During the fiscal years ended September 30, 2023 and October 1, 2022, no “triggering” events occurred.

Accounting for Impairment of Goodwill

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For further information on goodwill and other intangible assets, see Note 4 below.

Government Incentives

The Company receives government incentives for qualifying research and development, and other activities as defined by the relevant government entities awarding the grants.

Government grants, including non-income tax incentives, are recognized when there is reasonable assurance that the grant will be received and the Company will comply with the conditions specified in the grant agreement.

The Company records operating grants as a reduction to expense in the same line item on the consolidated statements of income as the expenditure for which the grant is intended to compensate.

The Company recognized an immaterial benefit for operating grants in fiscal 2023.

Revenue Recognition

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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.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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.

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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:

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260, Earnings per Share .

Basic EPS include only the weighted average number of common shares outstanding during the period.

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.

Basic EPS include only the weighted average number of common stock outstanding during the period.

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

Accelerated Share Repurchase

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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.

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 stock calculation for basic and diluted earnings per share.

Accounting for Business Acquisitions

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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 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, 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.

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Recent Accounting Pronouncements

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.

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.

Government Assistance

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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.

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

Business Combinations

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with Topic 606:

Revenue from Contracts with Customers .

The amendments should be applied prospectively to business combinations occurring on or after the effective date of the amendments with early adoption permitted.

We elected for an early adoption of this ASU in fiscal year 2023.

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

KULICKE AND SOFFA INDUSTRIES, INC.

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BALANCE SHEET COMPONENTS

The following tables reflect the components of significant balance sheet accounts as of October 1, 2022 and October 2, 2021:

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

Short term investments, available-for-sale (1)

$ 220,000 $ 377,000

The following tables reflect the components of significant balance sheet accounts as of September 30, 2023 and October 1, 2022:

(in thousands) September 30, 2023 October 1, 2022

Inventories, net:

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Dividends payable 10,710 9,743

Severance 19 31

Accrued leasehold renovations 11,005 —

Other 8,402 10,584

$ 103,005 $ 134,541

(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.

(1) Represents customer advance payments, customer credit program, accrued warranty expense and accrued retrofit obligations.

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BUSINESS COMBINATIONS

Acquisition of Uniqarta

On January 19, 2021, Kulicke and Soffa Industries, Inc.

entered into a Stock Purchase Agreement with Uniqarta, Inc.

(“Uniqarta”) and its equity holders to purchase all of Uniqarta’s outstanding equity interests.

Upon the closing of the acquisition, Uniqarta became a wholly-owned subsidiary of the Company.

Uniqarta is a developer of laser transfer technology and the acquisition expands the Company’s presence in the LED end market.

The purchase price consisted of $ 26.5 million in cash paid at closing.

The acquisition of Uniqarta was accounted for in accordance with ASC No.

Acquisition of Advanced Jet Automation Co., Ltd.

On September 8, 2022, the Company through one of its subsidiaries, Kulicke and Soffa Luxembourg S.À R.L, entered into a definitive agreement (the “Definitive Agreement”) for the acquisition of Advanced Jet Automation Co., Ltd.

(“AJA”), a technology company headquartered in Taiwan.

On February 22, 2023 (the “Closing Date”), pursuant to the Definitive Agreement, the Company completed its acquisition of AJA, including the material business and assets formerly owned by AJA’s affiliate, Samurai Spirit Inc., a leading developer and manufacturer of high-precision micro-dispensing equipment and solutions in Taiwan.

AJA became a wholly-owned subsidiary of the Company and on March 30, 2023, AJA was renamed Kulicke and Soffa Hi-Tech Co., Ltd.

(“K&S Hi-Tech”).

The newly acquired business of K&S Hi-Tech will operate as a business unit (“advanced dispensing solutions”), deemed a separate operating segment which is reported under the “All Others” category.

The acquisition broadens the Company’s existing semiconductor, electronic assembly and advanced display portfolio, increasing opportunities across several exciting growth areas including mini and micro-LED, which support both backlighting and direct-emissive approaches.

The purchase price consisted of $ 38.1 million in cash paid at closing (the “Purchase Price”) and additional potential earn-out payments based on certain revenue and earnings before interest, tax, depreciation and amortization (“EBITDA”) benchmarks established for the dispensing business unit.

As at September 30, 2023, the Company held $ 4.0 million in escrow and will continue to hold such sums for a period of twenty-four ( 24 ) months from the Closing Date, as security pending the completion of Ruo Chuan Inc.’s obligations as the seller under the Definitive Agreement.

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

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 of February 21, 2024.

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

The acquisition of AJA was accounted for in accordance with ASC No.

805, Business Combinations , using the acquisition method.

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:

(in thousands) January 19, 2021

Accounts and other receivable $ 7

Prepaid expenses and other current assets 6

(in thousands) February 22, 2023

Cash and cash equivalents $ 1,238

Account and other receivables, net 1,156

Inventory 1,581

Property, plant and equipment, net 1,462

Right-of-use assets 989

Other assets 127

Goodwill 27,975

Intangible assets 7,768

Accounts payable ( 77 )

Accrued expenses and other current liabilities ( 98 )

Accounts and other payables ( 965 )

Accrued expenses and other liabilities ( 251 )

Contract liabilities ( 187 )

Lease liability ( 989 )

Deferred tax liabilities ( 1,785 )

Total purchase price, net of cash acquired $ 38,119

Tangible net assets (liabilities) were valued at their respective carrying amounts, which the Company believes approximate their current fair values at the acquisition date.

The valuation of identifiable intangible assets acquired, representing in-process research and development (“IPR&D”) and others, reflects management’s estimates based on, among other factors, the use of an established valuation method.

The intangible assets are valued using a cost replacement method.

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.

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired and includes the value of expected future cash flows of Uniqarta from expected synergies with our other affiliates and other unidentifiable intangible assets.

No ne of the goodwill recorded as part of the acquisition will be deductible for income tax purposes.

In connection with the acquisition of Uniqarta, the Company recorded deferred tax liabilities primarily relating to the acquired intangible assets, which are partially offset by the acquired tax attributes.

The acquired tax attributes are comprised of net operating losses and research and development credits.

For the year ended October 2, 2021, the acquired business contributed a net loss of $ 0.2 million.

During fiscal 2021, the Company incurred $ 1.7 million of expenses related to the acquisition, which is included within selling, general and administrative expense in the Consolidated Statements of Operations.

Excluding inventory and property, plant and equipment, all other tangible net assets (liabilities) were valued at their respective carrying amounts, which the Company believes approximate their current fair values at the Closing Date.

In connection with the acquisition of AJA, the Company recorded deferred tax liabilities primarily relating to the acquired intangible assets.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following unaudited pro forma information presents the combined results of operations as if the acquisition had been completed on September 29, 2019, the beginning of the comparable prior annual reporting period.

The unaudited pro forma results include:

(i) amortization associated with preliminary estimates for the acquired intangible assets;

and (ii) the associated tax impact on the unaudited pro forma adjustments.

The unaudited pro forma results do not reflect any cost saving synergies from operating efficiencies or the effect of the incremental costs incurred in integrating the two companies.

Accordingly, these unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the acquisition had occurred at the beginning of the periods presented, nor are they indicative of future results of operations:

(in thousands) 2021 2020

Net revenue $ 1,517,664 $ 623,176

Net income 368,546 49,766

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired and includes the value of expected future cash flows of AJA from expected synergies with our other affiliates and other unidentifiable intangible assets.

None of the goodwill recorded as part of the acquisition will be deductible for income tax purposes.

The following table summarizes the fair value, useful life and valuation methodology of each identifiable intangible asset.

(in thousands) Fair Value Useful Lives

Developed technology (1)

Customer relationships (2)

In-process research and development (“IPR&D”) (3)

Order Backlog (4)

Total identifiable intangible assets $ 7,768

(1) The fair value of developed technology was determined using the Relief-from-Royalty Method under the income approach.

(2) Customer relationships represent the fair value of the existing relationships using the Multi-Period Excess Earnings Method under the income approach.

(3) The fair value of IPR&D and Patents were determined using the Replacement Cost Method, a form of the cost approach.

(4) Order backlog represents primarily the fair value of purchase arrangements with customers using the Multi-Period Excess Earnings Method under the income approach.

IPR&D is recorded as an indefinite-lived intangible asset and 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.

Developed technology, customer relationships, patents and order backlog are amortized using a straight-line method, representing the Company’s best estimate of the distribution of the economic value of the identifiable intangible assets.

For fiscal 2023, the acquired dispensing business unit contributed to a net loss of $ 3.0 million.

For fiscal 2023, the Company incurred $ 0.5 million of expenses related to the acquisition, which is included within selling, general and administrative expense in the Consolidated Statements of Operations.

The acquisition did not result in material contributions to revenue and net income in the consolidated financial statements for fiscal 2023.

Additionally, pro forma financial information is not provided for consolidated revenue and net income as such amounts attributable to AJA were insignificant to the Company’s consolidated financial statements taken as a whole.

GOODWILL AND INTANGIBLE ASSETS

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The Company performs an annual impairment test of its goodwill during the fourth quarter of each fiscal year, which coincides with the completion of its annual forecasting and refreshing of business outlook process.

The Company performed its annual impairment test in the fourth quarter of fiscal 2022 and concluded that no impairment charge was required.

Any future adverse changes in expected operating results and/or unfavorable changes in other economic factors used to estimate fair values could result in a noncash impairment in the future.

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 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.

During the fiscal year ended September 30, 2023, 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.

The Company concluded that a triggering event had occurred during the third quarter in the fiscal year ended September 30, 2023 in connection with the Lithography reporting unit, which is grouped within the “All Others” category.

The triggering event occurred based on the long-term financial and business outlook for the Lithography reporting unit updated as part of the Company’s annual strategic planning process performed during the third quarter.

This updated outlook projected that the near-term projected cash flows are expected to be lower than previously forecasted due to a shift in market penetration timeline and increase in cost of materials being purchased.

Under ASC 350, the Company is required to test its goodwill and other intangible assets for impairment annually or when a triggering event has occurred that would indicate it is more likely than not that the fair value of the reporting unit is less than the carrying value including goodwill and other intangible assets.

Accordingly, the Company has performed the goodwill impairment test for the Lithography reporting unit with reference to the guidance under ASC 350.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company used a discounted cash flow model to determine the fair value of the Lithography reporting unit.

The cash flow projections used within the discounted cash flow model were prepared using the forecasted financial results of the reporting unit, which was based upon underlying estimates of the total market size using independent third party industry reports, and market share data developed using the combination of independent third-party data and our internal data.

Significant assumptions used to determine the fair value of the Lithography reporting unit include revenue forecasts, terminal growth rate of 2.5 %, working capital, tax rate and a weighted average cost of capital (discount rate) of 11.7 %.

In accordance with the guidance under ASC 350, the Company’s 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.

Based on the calculation, the Company determined that the carrying value exceeded the fair value of this reporting unit which resulted in a goodwill impairment charge of $ 9.8 million, representing the entire goodwill assigned to this reporting unit.

This goodwill impairment charge, which is a non-cash charge, has been reflected in the Company’s Consolidated Statements of Operations for the fiscal year ended September 30, 2023.

While we have concluded that a triggering event for the other reporting units did not occur during the fiscal year ended September 30, 2023, the persistent 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.

The discount rate utilized in our valuation model could also be impacted by changes in the underlying interest rates and risk premiums included in the determination of the cost of capital.

The following table summarizes the Company’s recorded goodwill by reportable segments as of October 1, 2022 and October 2, 2021:

(in thousands) Capital Equipment

The following table summarizes the Company’s recorded goodwill based on its reportable segments as of September 30, 2023 and October 1, 2022:

(in thousands) Wedge Bonding Equipment APS All Others Total

Balance at October 1, 2022 (1)

18,280 25,907 23,909 68,096

Acquired in business combination — — 27,975 27,975

Impairment charges — — ( 9,794 ) ( 9,794 )

Other — 202 2,194 2,396

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

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Balance at September 30, 2023 18,280 26,109 44,284 88,673

(1) Cumulative goodwill impairment as of October 1, 2022 was approximately $ 35.2 million.

Intangible Assets

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

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

In connection with the evaluation of the goodwill impairment in the Lithography reporting unit performed during the third quarter of fiscal year ended September 30, 2023, the Company assessed tangible and intangible assets for impairment prior to performing the first step of the goodwill impairment test.

The Company first compared the carrying value to the undiscounted cash flows of the reporting unit which was lower.

Subsequently, the Company proceeded to measure the impairment loss by comparing the carrying value against the discounted cash flow model to determine the fair value of the asset group for the Lithography reporting unit, where significant assumptions include revenue forecasts, terminal growth rate of 2.5 %, working capital, tax rate and a weighted average cost of capital (discount rate) of 11.7 %.

As a result of the analysis, the Company determined an impairment charge of $ 6.9 million on the developed technology reported within the “All Others” category for the fiscal year ended September 30, 2023.

The impairment of intangible assets is a non-cash charge which has been reflected in the Company’s Consolidated Statements of Operations for the fiscal year ended September 30, 2023.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table reflects net intangible assets as of September 30, 2023 and October 1, 2022:

As of Average estimated

(dollar amounts in thousands) October 1, 2022 October 2, 2021 useful lives (in years)

(dollar amounts in thousands) September 30, 2023 October 1, 2022 useful lives (in years)

Developed technology $ 80,959 $ 89,017 6.0 to 15.0

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Net customer relationships $ 1,975 $ —

In-process research and development (1)

$ — $ 8,795 N.A.

Accumulated amortization $ — $ —

In-process research and development $ 459 $ — N.A.

Net in-process research and development $ 459 $ —

6 unchanged sentences

Net intangible assets $ 29,357 $ 31,939

(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:

(in thousands) October 1, 2022

Fiscal 2023 $ 5,348

Fiscal 2024 $ 5,348

Fiscal 2025 $ 5,348

Fiscal 2026 $ 5,348

Fiscal 2027 $ 4,685

The following table reflects estimated annual amortization expense related to intangible assets as of September 30, 2023:

(in thousands) September 30, 2023

Fiscal 2029 and thereafter

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In general, these investments are free of trading restrictions.

Cash, cash equivalents and short-term investments consisted of the following as of October 1, 2022:

Cash, cash equivalents and short-term investments consisted of the following as of September 30, 2023:

(dollar amounts in thousands) Amortized

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(1) The fair value was determined using unadjusted prices in active, accessible markets for identical assets, and as such they were classified as Level 1 assets in the fair value hierarchy.

(2) Fair value approximates cost basis.

(2) 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 2023 and 2022.

Cash, cash equivalents, restricted cash and short-term investments consisted of the following as of October 1, 2022:

9 unchanged sentences

Time deposits (2)

225,010 — — 225,010

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

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(1) The fair value was determined using unadjusted prices in active, accessible markets for identical assets, and as such they were classified as Level 1 assets in the fair value hierarchy.

(2) Fair value approximates cost basis.

(2) 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 2023 and 2022.

KULICKE AND SOFFA INDUSTRIES, INC.

1 unchanged sentence

EQUITY INVESTMENTS

Equity investments consisted of the following as of October 1, 2022 and October 2, 2021:

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

Equity investments consisted of the following as of September 30, 2023 and October 1, 2022:

(in thousands) September 30, 2023 October 1, 2022

Non-marketable equity securities $ 716 $ 5,397

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.

During the year ended September 30, 2023, the Company recorded an impairment of $ 5.0 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.

Net Asset Value (“NAV”) (Private Equity Fund) :

Equity investments in affiliated investment funds are valued based on the NAV reported by the investment fund in accordance with ASC Topic 820-10.

Investments held by the affiliated investment fund include a diversified portfolio of investments in the global semiconductor industry.

The Company receives distributions through the liquidation of the underlying investments by the affiliated investment fund.

However, the period of time over which the underlying investments are expected to be liquidated is unknown.

Additionally, the Company’s ability to withdraw from the fund is subject to restrictions.

The term of the fund will continue until March 18, 2032 unless dissolved earlier or extended by the General Partner.

In accordance with ASC Topic 820-10, this investment is measured at fair value using the NAV per share (or its equivalent) practical expedient has not been classified in the fair value hierarchy.

As of September 30, 2023, the Company has funded $ 1.0 million into the affiliated investment fund and recognized an unrealized fair value loss of $ 0.3 million on the Consolidated Statements of Operations.

The Company has recorded the amount of funded capital that has been called as an equity investment.

FAIR VALUE MEASUREMENTS

3 unchanged sentences

We measure certain financial assets and liabilities at fair value on a recurring basis.

There were no transfers between fair value measurement levels during the fiscal year ended October 1, 2022.

There were no transfers between fair value measurement levels during the fiscal year ended September 30, 2023.

Fair Value Measurements on a Nonrecurring Basis

6 unchanged sentences

However, a significant amount of the Company’s operating expenses is denominated in foreign currencies, primarily in Singapore.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The foreign currency exposure of our operating expenses is generally hedged with foreign exchange forward contracts.

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For these derivatives, we report the after-tax gain or loss from the effective portion of the hedge as a component of accumulated other comprehensive income (loss), and we reclassify it into earnings in the same period or periods in which the hedged transaction affects earnings and in the same line item on the Consolidated Statements of Operations as the impact of the hedged transaction.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

The fair value of derivative instruments on our Consolidated Balance Sheets as of September 30, 2023 and October 1, 2022 is as follows:

(in thousands) September 30, 2023 October 1, 2022

Notional Amount Fair Value Liability Derivatives (1)

6 unchanged sentences

(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 years ended October 1, 2022 and October 2, 2021 was as follows:

The effect of derivative instruments designated as cash flow hedges in our Consolidated Statements of Operations for the fiscal years ended September 30, 2023 and October 1, 2022 was as follows:

(in thousands) Fiscal

Foreign exchange forward contract in cash flow hedging relationships:

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

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

$ 2,381 $ ( 2,694 )

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

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

$ 870 $ ( 1,076 )

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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 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.

As of September 30, 2023, four 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

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

our leased assets and corresponding liabilities.

We have elected not to present short-term leases on the Consolidated Balance Sheets as these leases have a lease term of 12 months or less at lease inception.

Operating leases are included in operating ROU assets, current and non-current operating lease liabilities, and finance leases are included in property, plant and equipment, accrued expenses and other current liabilities, and other liabilities on the Consolidated Balance Sheets.

As of October 1, 2022, our finance leases are not material.

As of September 30, 2023, our finance leases are not material.

The following table shows the components of lease expense:

2 unchanged sentences

$ 10,746 8,625

(1) Operating lease expense includes short-term lease expense, which is immaterial for the fiscal year ended October 1, 2022.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(1) Operating lease expense includes short-term lease expense, which is immaterial for the fiscal year ended September 30, 2023.

The following table shows the cash flows arising from lease transactions.

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Weighted-average discount rate:

Future lease payments, excluding short-term leases, as of October 1, 2022, are detailed as follows:

Future lease payments, excluding short-term leases, as of September 30, 2023, are detailed as follows:

(in thousands) Operating leases

15 unchanged sentences

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

As of October 1, 2022 and October 2, 2021, the outstanding amount was $ 2.9 million and $ 3.0 million respectively.

As of September 30, 2023 and October 1, 2022, the outstanding amount was $ 3.1 million and $ 2.9 million respectively.

Credit Facilities

6 unchanged sentences

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 September 30, 2023, there were no outstanding amounts under the Overdraft Facility.

SHAREHOLDERS’ EQUITY AND EMPLOYEE BENEFIT PLANS

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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.

On May 7, 2022, the Company entered into a written trading plan under Rule 10b5-1 of the Exchange Act to facilitate repurchases under the Program.

This trading plan was most recently modified on May 29, 2023.

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.

1 unchanged sentence

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.

During the fiscal year ended September 30, 2023, the Company repurchased a total of approximately 1,515.0 thousand shares of common stock at a cost of approximately $ 68.1 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.

4 unchanged sentences

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.

As of September 30, 2023, our remaining stock repurchase authorization under the Program was approximately $ 181.0 million.

On August 23, 2023, June 8, 2023, March 2, 2023 and November 16, 2022, the Board of Directors declared a quarterly dividend $ 0.19 per share of common stock.

During the fiscal year ended September 30, 2023, the Company declared dividends of $ 0.76 per share of common stock.

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

The following table reflects accumulated other comprehensive loss reflected on the Consolidated Balance Sheets as of October 1, 2022 and October 2, 2021:

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

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

The following table reflects the accumulated other comprehensive loss reflected on the Consolidated Balance Sheets as of September 30, 2023 and October 1, 2022:

(in thousands) September 30, 2023 October 1, 2022

Loss from foreign currency translation adjustments $ ( 20,178 ) $ ( 29,854 )

Unrecognized actuarial loss on pension plan, net of tax ( 861 ) ( 812 )

1 unchanged sentence

Accumulated other comprehensive loss $ ( 21,762 ) $ ( 32,900 )

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Equity-Based Compensation

The Company has a stockholder-approved equity-based compensation plan, the 2021 Omnibus Incentive Plan (the “Plan”) from which employees and directors receive grants.

As of October 1, 2022, 3.3 million shares of common stock are available for grant to the Company’s employees and directors under the Plan.

• Relative TSR Performance Share Units (“Relative TSR PSUs”) entitle the employee to receive common shares of the Company on the award vesting date, typically the third anniversary of the grant date (or as soon as administratively practicable if later), if market performance objectives which measure relative total shareholder return (“TSR”) are attained.

As of September 30, 2023, 2.5 million shares of common stock are available for grant to the Company’s employees and directors under the Plan.

• Relative TSR Performance Share Units (“Relative TSR PSUs”) entitle the employee to receive common stock of the Company on the award vesting date, typically the third anniversary of the grant date (or as soon as administratively practicable if later), if market performance objectives which measure relative total shareholder return (“TSR”) are attained.

Relative TSR is calculated based upon the 90 -calendar day average price at the end of the performance period of the Company’s stock as compared to specific peer companies that comprise the GICS (45301020) Semiconductor Index.

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Compensation expense is reversed if the award is forfeited prior to the vesting date.

• Revenue Growth Performance Share Units (“Growth PSUs”) entitle the employee to receive common shares of the Company on the award vesting date, typically the third anniversary of the grant date (or as soon as administratively practicable if later), based on organic revenue growth objectives and relative growth performance against named competitors as set by the Management Development and Compensation Committee (“MDCC”) of the Company’s Board of Directors.

• Revenue Growth Performance Share Units (“Growth PSUs”) entitle the employee to receive common stock of the Company on the award vesting date, typically the third anniversary of the grant date (or as soon as administratively practicable if later), based on organic revenue growth objectives and relative growth performance against named competitors as set by the Management Development and Compensation Committee (“MDCC”) of the Company’s Board of Directors.

Organic revenue growth is calculated by averaging revenue growth (net of revenues from acquisitions) over a performance period, which is generally three years .

2 unchanged sentences

Vesting percentages range from 0 % to 200 % of awards granted.

• In general, stock options and Time-based Restricted Share Units (“Time-based RSUs”) awarded to employees vest ratably over a three-year period on the anniversary of the grant date provided the employee remains employed by the Company.

The Company follows the non-substantive vesting method for stock options and recognizes compensation expense immediately for awards granted to retirement eligible employees, or over the period from the grant date to the date retirement eligibility is achieved.

• In general, Time-based Restricted Share Units (“Time-based RSUs”) awarded to employees vest ratably over a three-year period on the anniversary of the grant date provided the employee remains employed by the Company.

Equity-based compensation expense recognized in the Consolidated Statements of Operations for fiscal 2023, 2022, and 2021 was based upon awards ultimately expected to vest, with forfeiture accounted for when they occur.

The following table reflects total equity-based compensation expense, which includes Relative TSR PSUs, Time-based RSUs, Growth PSUs, and common stock, included in the Consolidated Statements of Operations for fiscal 2022, 2021, and 2020:

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table reflects the total equity-based compensation expense, which includes Relative TSR PSUs, Time-based RSUs, Growth PSUs, and common stock, included in the Consolidated Statements of Operations for fiscal 2023, 2022, and 2021:

(in thousands) 2023 2022 2021

3 unchanged sentences

Total equity-based compensation expense $ 22,744 $ 18,986 $ 15,502

The following table reflects equity-based compensation expense, by type of award, for fiscal 2022, 2021, and 2020:

The following table reflects the equity-based compensation expense, by type of award, for fiscal 2023, 2022, and 2021:

(in thousands) 2023 2022 2021

4 unchanged sentences

Total equity-based compensation expense $ 22,744 $ 18,986 $ 15,502

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Equity-Based Compensation:

Relative TSR PSUs

The following table reflects Relative TSR PSUs activity for fiscal 2022, 2021, and 2020:

The following table reflects the Relative TSR PSUs activity for fiscal 2023, 2022, and 2021:

Number of shares (in thousands) Unrecognized compensation expense (in thousands) Average remaining service period (in years) Weighted average grant date fair value per share

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

9 unchanged sentences

Vested ( 197 )

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

Relative TSR PSUs outstanding as of September 30, 2023 367 $ 5,939 1.0

KULICKE AND SOFFA INDUSTRIES, INC.

8 unchanged sentences

Time-based RSUs

The following table reflects Time-based RSUs activity for fiscal 2022, 2021, and 2020:

The following table reflects the Time-based RSUs activity for fiscal 2023, 2022, and 2021:

Number of shares (in thousands) Unrecognized compensation expense (in thousands) Average remaining service period (in years) Weighted average grant date fair value per share

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

9 unchanged sentences

Vested ( 389 )

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

Time-based RSUs outstanding as of September 30, 2023 832 $ 17,693 1.5

KULICKE AND SOFFA INDUSTRIES, INC.

1 unchanged sentence

Equity-Based Compensation:

The following table reflects Growth PSUs activity for fiscal 2022, 2021, and 2020:

The following table reflects the Growth PSUs activity for fiscal 2023, 2022, and 2021:

Number of shares (in thousands) Unrecognized compensation expense (in thousands) Average remaining service period (in years) Weighted average grant date fair value per share

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

6 unchanged sentences

Vested ( 95 )

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

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

Special/Growth PSUs outstanding as of September 30, 2023 122 $ 1,626 1.0

As of September 30, 2023, there were no employee stock options.

Equity-Based Compensation:

Non-Employee Directors

The 2021 Equity Plan provides for the grant of common shares to each non-employee director upon initial election to the board and on the first business day of each calendar quarter while serving on the board.

The grant to a non-employee director upon initial election to the board is that number of common shares closest in value to, without exceeding, $ 120,000 .

The quarterly grant to a non-employee director upon the first business day of each calendar quarter is that number of common shares closest in value to, without exceeding, $ 39,500 .

The 2021 Equity Plan provides for the grant of common stock to each non-employee director upon initial election to the board and on the first business day of each calendar quarter while serving on the board.

The grant to a non-employee director upon initial election to the board is that number of common stock closest in value to, without exceeding, $ 120,000 .

The quarterly grant to a non-employee director upon the first business day of each calendar quarter is that number of common stock closest in value to, without exceeding, $ 39,500 .

The following table reflects shares of common stock issued to non-employee directors and the corresponding fair value for fiscal 2023, 2022, and 2021:

(in thousands) 2023 2022 2021

Number of common shares issued 18 22 37

Number of common stock issued 21 18 22

Fair value based upon market price at time of issue $ 1,000 $ 949 $ 828

The following table reflects the Company’s defined benefits pension obligations, mainly in Switzerland and Taiwan, as of October 1, 2022 and October 2, 2021:

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

The following table reflects the Company’s defined benefits pension obligations, mainly in Switzerland and Taiwan, as of September 30, 2023 and October 1, 2022:

(in thousands) September 30, 2023 October 1, 2022

Switzerland pension obligation $ 1,119 $ 1,038

9 unchanged sentences

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

For the fiscal years ended October 1, 2022, and October 2, 2021, service revenue is not material.

For the fiscal years ended September 30, 2023, and October 1, 2022, service revenue is not material.

Please refer to Note 1:

Basis of Presentation — Revenue Recognition , for additional disclosure on the Company’s revenue recognition policy.

The Company reports revenue based on our reportable segments.

The Company believes that reporting revenue on this basis provides information about how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

The Company reports revenue based on our reportable segments and end markets, which provides information about how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

Please refer to Note 16:

Segment Information, for disclosure of revenue by segment.

Segment Information, for disclosure of revenue by segments and end markets.

Contract Balances

4 unchanged sentences

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 asset balances during the fiscal years ended October 1, 2022 and October 2, 2021:

The following table shows the changes in contract asset balances during the fiscal years ended September 30, 2023 and October 1, 2022:

(in thousands) 2023 2022

3 unchanged sentences

Contract assets, end of period $ 10,181 $ 26,317

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

The following table shows the changes in contract liability balances during the fiscal years ended September 30, 2023 and October 1, 2022:

(in thousands) 2023 2022

7 unchanged sentences

Basic income per share is calculated using the weighted average number of shares of common stock outstanding during the period.

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

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

The following table reflects a reconciliation of the shares used in the basic and diluted net income per share computation for fiscal 2023, 2022, and 2021:

11 unchanged sentences

OTHER FINANCIAL DATA

The following table reflects other financial data for fiscal 2022, 2021, and 2020:

The following table reflects the other financial data for fiscal 2023, 2022, and 2021:

(in thousands) 2023 2022 2021

1 unchanged sentence

Warranty and retrofit expense 13,729 16,349 22,068

The following table reflects U.S.

The following table reflects the U.S.

and foreign income (loss) before income taxes for fiscal 2023, 2022, and 2021:

24 unchanged sentences

Foreign operations (Deemed income, taxes on undistributed foreign earnings, and withholding taxes) 24,450 45,421 52,414

Non-deductible items 267 113 1,232

Goodwill impairment 2,517 — —

Other, net (1)

4 unchanged sentences

These reclassifications have no impact to the consolidated financial statements in fiscal 2022 and 2021.

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.

As of September 30, 2023, a large portion of the Company’s undistributed foreign earnings are not considered to be indefinitely reinvested outside the U.S.

and are expected to be available for use in the U.S.

without incurring additional U.S.

Determination of the amount of unrecognized deferred tax liabilities related to the indefinitely reinvested undistributed foreign earnings is not practicable.

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.

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

The following table reflects the deferred tax balances based on the tax effects of cumulative temporary differences for fiscal 2023 and 2022:

(in thousands) 2023 2022

Accruals and reserves $ 13,118 $ 14,168

Capitalized Research (1)

12,529 25,105

Tax credit carryforwards 5,026 3,893

Fixed and intangible assets 5,963 465

Net operating loss carryforwards 26,607 15,329

2 unchanged sentences

Deferred tax assets, net of valuation allowance $ 35,797 $ 36,745

Fixed and intangible assets (1)

$ ( 16,357 ) $ ( 19,142 )

Taxes on undistributed foreign earnings ( 25,153 ) ( 26,068 )

4 unchanged sentences

Net deferred tax liabilities $ ( 5,713 ) $ ( 8,465 )

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.

(1) Certain balances in fiscal 2022 have been reclassified to conform to the current period presentation.

These reclassifications have no impact to the consolidated financial statements in fiscal 2022.

As of September 30, 2023, the Company has foreign net operating loss carryforwards of $ 89.7 million, state net operating loss carryforwards of $ 35.0 million, and U.S.

federal and state tax credit carryforwards of $ 7.8 million that can be used to offset future income tax obligations.

9 unchanged sentences

The amount of interest and penalties related to unrecognized tax benefit recorded in fiscal 2023 provision for income taxes is not material.

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.

As of September 30, 2023, the Company has recognized $ 2.8 million of accrued interest and penalties related to unrecognized tax benefit within the income tax payable for uncertain tax positions and approximately $ 17.9 million of unrecognized tax benefit, including related interest and penalties, that if recognized, would impact the Company’s effective tax rate.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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.

9 unchanged sentences

The CODM does not review discrete asset information.

The Company operates two reportable segments consisting of:

(1) Capital Equipment;

and (2) Aftermarket Products and Services (“APS”).

The following table reflects operating information by segment for fiscal 2022, 2021, and 2020:

The Company operates four reportable segments consisting of:

(1) Ball Bonding Equipment, (2) Wedge Bonding Equipment, (3) Advanced Solutions, and (4) Aftermarket Products and Services (“APS”).

The four reportable segments are disclosed below:

Ball Bonding Equipment :

Reflects the results of the Company from the design, development, manufacture and sale of ball bonding equipment and wafer level bonding equipment.

Wedge Bonding Equipment :

Reflects the results of the Company from the design, development, manufacture and sale of wedge bonding equipment.

Advanced Solutions :

Reflects the results of the Company from the design, development, manufacture and sale of certain advanced display, die-attach and thermocompression systems and solutions.

Reflects the results of the Company from the design, development, manufacture and sale of a variety of tools, spares and services for our equipment.

Any other operating segments that have not been aggregated within the reportable segments described above which do not meet the quantitative threshold to be disclosed as a separate reportable segment have been grouped within an “All Others” category.

This group is reflective of the results of the Company from the design, development, manufacture and sale of certain advanced display, advanced dispense, electronics assembly, die-attach and lithography systems and solutions.

Results for the “All Others” category and other corporate expenses are included as a reconciling item between the Company’s reportable segments and its consolidated results of operations.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table reflects the operating information by reportable segment for fiscal 2023, 2022, and 2021:

(in thousands) 2023 2022 2021

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

Ball Bonding Equipment $ 287,465 $ 909,428 $ 1,016,663

Wedge Bonding Equipment 175,550 194,086 138,836

Advanced Solutions 72,256 94,683 35,123

APS 160,718 197,152 205,088

All Others 46,502 108,271 121,954

Net revenue 742,491 1,503,620 1,517,664

Income from operations:

Capital Equipment 397,920 355,982 22,069

Income/(loss) from operations:

Ball Bonding Equipment $ 81,929 385,276 401,450

Wedge Bonding Equipment 63,088 66,649 34,563

Advanced Solutions ( 32,530 ) ( 15,389 ) ( 40,759 )

APS 47,654 82,473 75,400

All Others ( 36,797 ) 25,732 20,565

Corporate Expenses ( 83,907 ) ( 74,669 ) ( 78,772 )

Income from Operations 39,437 470,072 412,447

We have considered:

(1) information that is regularly reviewed by our CODM as defined by the authoritative guidance on segment reporting, in evaluating financial performance and (2) other financial data, including information that we include in our earnings releases but which is not included in our financial statements, to disaggregate revenues by end markets served.

The principal category we use to disaggregate revenues is by the end markets served in the Capital Equipment segment.

The following table reflects net revenue by Capital Equipment end markets served for fiscal 2022, 2021, and 2020

(1) information that is regularly reviewed by our CODM in evaluating financial performance and how to allocate resources;

and (2) other financial data, including information that we include in our earnings releases but which is not included in our financial statements, to disaggregate revenues by end markets served.

The principal category we use to disaggregate revenues is by the end markets served.

The following table reflects the net revenue by end markets served for fiscal 2023, 2022, and 2021:

(in thousands) 2023 2022 2021

3 unchanged sentences

Memory 22,421 127,490 66,932

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

APS 160,718 197,152 205,088

Total revenue $ 742,491 $ 1,503,620 $ 1,517,664

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following tables reflect capital expenditures, depreciation and amortization expense by segment for fiscal 2022, 2021, and 2020.

The following tables reflect the capital expenditures, depreciation and amortization expense by reportable segment for fiscal 2023, 2022, and 2021:

(in thousands) 2023 2022 2021

Capital expenditures:

Capital Equipment $ 26,655 $ 15,257 $ 5,798

Ball Bonding Equipment $ 1,087 $ 978 $ 1,627

Wedge Bonding Equipment 436 1,450 387

Advanced Solutions 30,522 19,036 6,090

APS 5,298 4,964 5,286

All Others $ 658 $ 1,364 $ 1,046

Corporate Expenses 9,701 4,441 8,119

Capital expenditures $ 47,702 $ 32,233 $ 22,555

1 unchanged sentence

Depreciation expense:

Capital Equipment $ 9,152 $ 6,938 $ 6,360

Ball Bonding Equipment $ 1,538 $ 1,398 $ 1,153

Wedge Bonding Equipment 1,169 981 940

Advanced Solutions 7,706 2,034 845

APS 6,166 6,632 5,969

All Others $ 1,505 1,047 1,179

Corporate Expenses 4,674 4,284 3,750

Depreciation expense $ 22,758 $ 16,376 $ 13,836

1 unchanged sentence

Amortization expense:

Capital Equipment $ 3,873 $ 3,584 $ 4,255

Ball Bonding Equipment $ — $ — $ —

Wedge Bonding Equipment — — —

Advanced Solutions — — —

APS 896 994 2,319

All Others $ 4,837 3,557 3,369

Corporate Expenses 366 366 286

Amortization expense $ 6,099 $ 4,917 $ 5,974

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Geographical information

3 unchanged sentences

China $ 335,393 $ 855,345 $ 843,470

Malaysia 126,520 70,253 40,641

United States 65,705 83,906 54,353

Taiwan 66,358 123,995 275,251

Malaysia 64,013 126,520 70,253

Japan 35,849 18,092 11,850

Philippines 31,527 44,510 17,651

Korea 17,977 87,647 58,308

United States 83,906 54,353 36,186

Hong Kong 13,933 27,216 82,436

4 unchanged sentences

These reclassifications have no impact to the consolidated financial statements in fiscal 2022 and 2021.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(in thousands) 2023 2022

4 unchanged sentences

Israel 9,264 10,610

All other 9,647 11,187

Total long-lived assets $ 161,138 $ 130,946

8 unchanged sentences

Provision for warranty 12,850 12,907 18,889

Changes in the estimation of warranty reserve — — ( 5,417 )

Utilization of reserve ( 15,836 ) ( 16,425 ) ( 11,504 )

Reserve for warranty, end of period $ 10,457 $ 13,443 $ 16,961

For the change in estimation of warranty reserve, see Note 1 for details.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

O ther Commitments and Contingencies

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

The following table reflects the obligations not reflected on the Consolidated Balance Sheets as of September 30, 2023:

Payments due by fiscal year

9 unchanged sentences

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

As of September 30, 2023, the Company also has an obligation to fund uncalled capital commitments of approximately $ 9.0 million, as and when required, in relation to its investment in a private equity fund.

Concentrations

The following tables reflect significant customer concentrations as a percentage of net revenue for fiscal 2022, 2021, and 2020:

The following table reflect the significant customer concentrations as a percentage of net revenue for fiscal 2023, 2022, and 2021:

2023 2022 2021

1 unchanged sentence

* Represents less than 10% of total net revenue

The following table reflects significant customer concentrations as a percentage of total accounts receivable as of October 1, 2022 and October 2, 2021:

October 1, 2022 October 2, 2021

The following table reflects the significant customer concentrations as a percentage of total accounts receivable as of September 30, 2023 and October 1, 2022:

September 30, 2023 October 1, 2022

Tianshui Huatian Technology Co., Ltd.

16.7 % 18.2 %

Haoseng Industrial Co., Ltd.

12.6 % 14.3 %

(1) Distributor of the Company's products

* Represents less than 10% of total accounts receivables

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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