What changed in this filing

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Item 1. Financial Statements

2021-11-04 compared with 2021-08-05 · 131 added, 68 removed, 463 unchanged (30% of the section changed)

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 25,

September 26,

September 25,

September 26,

Cost of revenue

8 unchanged sentences

Income before provision for income taxes

Provision (benefit) for income taxes

Provision for income taxes

Earnings per share:

5 unchanged sentences

Three Months Ended

Six Months Ended

Other comprehensive (loss) gain, net of tax:

Change in net unrealized (losses) gains on

Nine Months Ended

September 25,

September 26,

September 25,

September 26,

Other comprehensive gain (loss), net of tax:

Change in net unrealized gains (losses) on

available-for-sale marketable securities

Change in currency translation adjustments

Total other comprehensive (loss) gain, net of tax

Total other comprehensive gain (loss), net of tax

Total comprehensive income

3 unchanged sentences

(In thousands)

September 25,

Current Assets:

15 unchanged sentences

Total current liabilities

Deferred and other tax liabilities

Deferred income taxes

Other non-current liabilities

11 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

September 25,

September 26,

Cash flows from operating activities:

13 unchanged sentences

Purchases of property, plant and equipment

Net cash and cash equivalents (used in) provided by investing activities

Net cash and cash equivalents used in investing activities

Cash flows from financing activities:

5 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

1 unchanged sentence

Supplemental disclosure of cash flow information:

Income taxes paid

Income taxes paid (net of refunds)

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

19 unchanged sentences

Balance at June 26, 2021

Share-based compensation

Issuance of shares through share-based

compensation plans, net

Share-based compensation plan

Currency translation

Unrealized loss on investments

Balance at September 25, 2021

Additional Paid-in

17 unchanged sentences

Balance at June 27, 2020

Issuance of shares through share-based

compensation plans, net

Share-based compensation

Share-based compensation plan

Currency translation

Unrealized loss on investments

Balance at September 26, 2020

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

5 unchanged sentences

Our fiscal year ending January 1, 2022 (“fiscal year 2021”) is a 53-week fiscal year.

The first quarter of the Company’s fiscal year 2021 ended on March 27, 2021, the second quarter ended on June 26, 2021 and the third quarter ends on September 25, 2021.

The first quarter of the Company’s fiscal year 2021 ended on March 27, 2021, the second quarter ended on June 26, 2021 and the third quarter ended on September 25, 2021.

Our fiscal year ended December 26, 2020 was a 52-week fiscal year.

3 unchanged sentences

Actual amounts could differ materially from reported amounts.

The interim results for the three and six months ended June 26, 2021 are not necessarily indicative of results to be expected for the entire year or any future periods.

The interim results for the three and nine months ended September 25, 2021 are not necessarily indicative of results to be expected for the entire year or any future periods.

This interim financial information should be read in conjunction with the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 26, 2020 (the “2020 Form 10-K”) filed with the Securities and Exchange Commission (“SEC”) on February 19, 2021.

9 unchanged sentences

Actual results could differ from these estimates under different assumptions or circumstances and such differences could be material.

The Company also assessed the impacts of COVID-19 on the above accounting matters as of June 26, 2021 and through the date of this report.

While there was not a material impact as of and for the quarter ended June 26, 2021 and through the date of this report, future actual magnitude and duration of the COVID-19 pandemic, as well as other associated factors, could result in material negative impacts to the Company’s condensed consolidated financial statements in future reporting periods.

The Company also assessed the impacts of COVID-19 on the above accounting matters as of September 25, 2021 and through the date of this report.

While there was not a material impact as of and for the quarter ended September 25, 2021 and through the date of this report, future actual magnitude and duration of the COVID-19 pandemic, as well as other associated factors, could result in material negative impacts to the Company’s condensed consolidated financial statements in future reporting periods.

Recent Accounting Pronouncements

8 unchanged sentences

Inspectrology, LLC

On December 31, 2020 , the Company acquired Inspectrology, LLC (“Inspectrology”), a leading supplier of overlay metrology for controlling lithography and etch processes in the compound semiconductor market for $ 27,015 in cash and a potential earnout of $ 10,000 , subject to achievement of certain revenue targets earned for fiscal 2021 and 2022.

As of June 26, 2021, the Company does not believe the earnout criteria will be met.

As of September 25, 2021, the Company does not believe the earnout criteria will be met.

Certain payments, including the earnout, are subject to the principals remaining with the Company for a period of one to three years .

24 unchanged sentences

A financial asset’s or liability’s fair value measurement classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The following tables provide the assets and liabilities carried at fair value measured on a recurring basis at June 26, 2021 and December 26, 2020:

The following tables provide the assets and liabilities carried at fair value measured on a recurring basis at September 25, 2021 and December 26, 2020:

Fair Value Measurements Using

5 unchanged sentences

Unobservable Inputs

June 26, 2021

September 25, 2021

Available-for-sale debt securities:

5 unchanged sentences

Foreign currency forward contracts

Total liabilities

December 26, 2020

12 unchanged sentences

Marketable Securities

At June 26, 2021 and December 26, 2020, marketable securities are categorized as follows:

At September 25, 2021 and December 26, 2020, marketable securities are categorized as follows:

Amortized Cost

1 unchanged sentence

Gross Unrealized Holding Losses

June 26, 2021

September 25, 2021

Municipal notes and bonds

11 unchanged sentences

Total marketable securities

The amortized cost and estimated fair value of marketable securities classified by the maturity date listed on the security, regardless of the Condensed Consolidated Balance Sheets classification, is as follows at June 26, 2021 and December 26, 2020:

June 26, 2021

September 25, 2021

December 26, 2020

3 unchanged sentences

Due after one through five years

Due after five through ten years

Due after ten years

Due after five years

Total marketable securities

The following table summarizes the estimated fair value and gross unrealized holding losses of marketable securities, aggregated by investment instrument and period of time in an unrealized loss position, at June 26, 2021 and December 26, 2020:

In Unrealized Loss Position For

4 unchanged sentences

Gross Unrealized Losses

June 26, 2021

September 25, 2021

Municipal notes and bonds

Certificate of deposit

Commercial paper

Corporate bonds

6 unchanged sentences

The Company, when it considers it to be appropriate, enters into forward contracts to hedge the economic exposures arising from foreign currency denominated transactions.

At June 26, 2021 and December 26, 2020, these contracts included the

future sale of British pound sterling, euro, Israeli shekel, Japanese yen, Korean won, Singapore dollar, Taiwanese dollar, and Chinese renminbi to purchase U.S.

At September 25, 2021 and December 26, 2020, these contracts

included the future sale of British pound sterling, euro, Israeli shekel, Japanese yen, Korean won, Singapore dollar, Taiwanese dollar, and Chinese renminbi to purchase U.S.

Foreign currency forward contracts are not designated as hedges for accounting purposes and therefore, the change in fair value is recorded in “Other expense, net,” in the Condensed Consolidated Statements of Operations.

1 unchanged sentence

The dollar equivalent of the U.S.

dollar forward contracts and related fair values as of June 26, 2021 and December 26, 2020 were as follows:

dollar forward contracts and related fair values as of September 25, 2021 and December 26, 2020 were as follows:

September 25,

Notional amount

Fair value of asset (liability)

Fair value of liability

Goodwill and Purchased Intangible Assets

1 unchanged sentence

Balance at December 26, 2020

Goodwill acquired during the period (Note 2)

Balance at June 26, 2021

Goodwill from Inspectrology acquisition (Note 2)

Balance at September 25, 2021

Intangible Assets

Purchased intangible assets as of June 26, 2021 and December 26, 2020 are as follows:

Purchased intangible assets as of September 25, 2021 and December 26, 2020 are as follows:

Gross Carrying Amount

Accumulated Amortization

June 26, 2021

September 25, 2021

Finite-lived intangibles:

18 unchanged sentences

Inventories, net are comprised of the following:

June 26, 2021

September 25, 2021

December 26, 2020

4 unchanged sentences

Property, plant and equipment, net is comprised of the following:

June 26, 2021

September 25, 2021

December 26, 2020

7 unchanged sentences

Other assets is comprised of the following:

June 26, 2021

September 25, 2021

December 26, 2020

3 unchanged sentences

Accrued liabilities is comprised of the following:

June 26, 2021

September 25, 2021

December 26, 2020

3 unchanged sentences

Other current liabilities is comprised of the following:

June 26, 2021

September 25, 2021

December 26, 2020

6 unchanged sentences

Other non-current liabilities is comprised of the following:

June 26, 2021

September 25, 2021

December 26, 2020

5 unchanged sentences

The Company maintains arrangements under which eligible accounts receivable in Japan are sold without recourse to unrelated third-party financial institutions.

The Company sold $ 6,226 of receivables during the six months ended June 26, 2021.

The Company sold $ 14,850 of receivables during the nine months ended September 25, 2021.

These receivables were not included in the condensed consolidated balance sheets as the criteria for sale treatment had been met.

There were no material gains or losses on the sale of such receivables.

There were no amounts due from such third-party financial institutions at June 26, 2021.

There were no amounts due from such third-party financial institutions at September 25, 2021.

Intellectual Property Indemnification Obligations

8 unchanged sentences

The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary.

Settlements of warranty reserves are generally associated with sales that occurred during the 12 to 14 months prior to the period-end and warranty accruals are related to sales during the same year.

Warranty provisions are generally related to current period sales.

Settlements of warranty reserves are generally associated with sales that occurred during the 12 to 14 months prior to the period-end.

Changes in the Company’s warranty reserves are as follows:

Six Months Ended

Nine Months Ended

September 25,

September 26,

Balance, beginning of the period

41 unchanged sentences

The Company is permitted to borrow up to 70 % of the value of eligible securities held at the time the line of credit is accessed.

The available line of credit as of June 26, 2021 was approximately $ 99.4 million with an available interest rate of 1.8 %.

The available line of credit as of September 25, 2021 was approximately $ 110.9 million with an available interest rate of 1.8 %.

The credit agreement is available to the Company until such time that either party terminates the arrangement at their discretion.

2 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 25,

September 26,

September 25,

September 26,

Point-in-time

6 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 25,

September 26,

September 25,

September 26,

Balance, beginning of the period

5 unchanged sentences

Restricted Stock Unit Activity

A summary of the Company’s restricted stock unit activity with respect to the six months ended June 26, 2021 is as follows:

A summary of the Company’s restricted stock unit activity with respect to the nine months ended September 25, 2021 is as follows:

Number of Shares

2 unchanged sentences

Nonvested at December 26, 2020

Nonvested at June 26, 2021

As of June 26, 2021 and December 26, 2020, there was $ 27,391 and $ 19,135 of total unrecognized compensation cost related to restricted stock units granted under the Company’s stock plans, respectively.

That cost is expected to be recognized over a weighted average period of 1.8 years and 1.7 years for June 26, 2021 and December 26, 2020, respectively.

Nonvested at September 25, 2021

As of September 25, 2021 and December 26, 2020, there was $ 23,747 and $ 19,135 of total unrecognized compensation cost related to restricted stock units granted under the Company’s stock plans, respectively.

That cost is expected to be recognized over a weighted average period of 1.6 years and 1.7 years for September 25, 2021 and December 26, 2020, respectively.

Other Expense, Net

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

September 25,

September 26,

September 25,

September 26,

Foreign currency exchange losses, net

2 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 25,

September 26,

September 25,

September 26,

Income before income taxes

Provision (benefit) for income taxes

Provision for income taxes

Effective tax rate

The income tax provision for the three and six months ended June 26, 2021 was computed based on the Company’s annual forecast of profit by jurisdiction and forecasted effective tax rate for the year.

The increase in the Company’s income tax provision for the three and six months ended June 26, 2021 as compared to the three and six months ended June 27, 2020 is primarily due to an increase in quarterly earnings, offset by (i) an increase in the Foreign Derived Intangible Income (“FDII”) deduction, (ii) an increase in the excess tax benefit associated with equity compensation, and (iii) a release of reserves due to expiration of the applicable statute of limitations.

The income tax provision for the three and nine months ended September 25, 2021 was computed based on the Company’s annual forecast of profit by jurisdiction and forecasted effective tax rate for the year.

The increase in the Company’s income tax provision for the three months ended September 25, 2021 as compared to the three months ended September 26, 2020 is primarily due to an increase in quarterly earnings, a decrease to the estimated tax benefit of the R&D and foreign tax credits, offset by an increase in the Foreign Derived Intangible Income (“FDII”) deduction and an increase in the excess tax benefit associated with equity compensation.

The Company’s recorded effective tax rate is less than the U.S.

6 unchanged sentences

The Company continues to monitor available evidence and may reverse some or all of its remaining valuation allowance in future periods, if appropriate.

The Company has a recorded valuation allowance against a certain portion of its deferred tax assets of $ 14,254 and $ 14,238 as of June 26, 2021 and December 26, 2020, respectively.

The Company has a recorded valuation allowance against a certain portion of its deferred tax assets of $ 14,244 and $ 14,238 as of September 25, 2021 and December 26, 2020, respectively.

Earnings Per Share

3 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 25,

September 26,

September 25,

September 26,

Basic earnings per share - weighted average shares

5 unchanged sentences

Accumulated Other Comprehensive Income

The components of accumulated other comprehensive income, net of tax, at June 26, 2021, as well as the activity for the six months ended June 26, 2021, were as follows:

The components of accumulated other comprehensive income, net of tax, at September 25, 2021, as well as the activity for the nine months ended September 25, 2021, were as follows:

Foreign currency

6 unchanged sentences

Reclassifications

Balance at June 26, 2021

Balance at September 25, 2021

Segment Reporting and Geographic Information

7 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 25,

September 26,

September 25,

September 26,

Systems and software

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 25,

September 26,

September 25,

September 26,

Revenue from third parties:

3 unchanged sentences

The following customers accounted for 10% or more of total revenue for the indicated periods:

Six Months Ended

Samsung Semiconductor

Nine Months Ended

September 25,

September 26,

Taiwan Semiconductor Manufacturing Co.

Samsung Semiconductor

Share Repurchase Authorization

1 unchanged sentence

Repurchases may be made through both public market and private transactions from time to time with shares purchased being subsequently retired.

At June 26, 2021, there was $ 100,000 available for future share repurchases under this share repurchase authorization.

At September 25, 2021, there was $ 100,000 available for future share repurchases under this share repurchase authorization.

The following table summarizes the Company’s share repurchases for the periods indicated:

Three Months Ended

Six Months Ended

Nine Months Ended

September 25,

September 26,

September 25,

September 26,

Shares of common stock repurchased

2 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements