UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 1,December 30, 2023
 
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from                 to                   .
 
Commission File No.: 0-121
KULICKE AND SOFFA INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania23-1498399
(State or other jurisdiction of incorporation)(IRS Employer
 Identification No.)
 
23A Serangoon North Avenue 5, #01-01, Singapore 554369
1005 Virginia Dr., Fort Washington, PA 19034
(Address of principal executive offices and Zip Code)
(215) 784-6000
(Registrant's telephone number, including area code) 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, Without Par ValueKLICThe Nasdaq Global Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No





Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company



If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No

As of April 28, 2023,January 26, 2024, there were 56,582,69756,341,107 shares of the Registrant’s Common Stock, no par value, outstanding.


Table of Contents
KULICKE AND SOFFA INDUSTRIES, INC.
FORM 10 – Q
April 1,December 30, 2023
 Index
 Page Number
   
PART I - FINANCIAL INFORMATION
   
Item 1.FINANCIAL STATEMENTS (Unaudited) 
   
 Consolidated Condensed Balance Sheets as of April 1,December 30, 2023 and October 1, 2022September 30, 2023
   
 Consolidated Condensed Statements of Operations for the three and six months ended April 1,December 30, 2023 and April 2,December 31, 2022
   
Consolidated Condensed Statements of Comprehensive Income for the three and six months ended April 1,December 30, 2023 and April 2,December 31, 2022
Consolidated Condensed Statements of Changes in Shareholders’ Equity for the three and six months ended April 1,December 30, 2023 and April 2,December 31, 2022
 Consolidated Condensed Statements of Cash Flows for the sixthree months ended April 1,December 30, 2023 and April 2,December 31, 2022
   
 Notes to Consolidated Condensed Financial Statements
   
Item 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   
Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   
Item 4.CONTROLS AND PROCEDURES
   
PART II - OTHER INFORMATION
   
Item 1.LEGAL PROCEEDINGS
Item 1A.RISK FACTORS
   
Item 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Item 3.DEFAULTS UPON SENIOR SECURITIES
Item 4.MINE SAFETY DISCLOSURES
Item 5.OTHER INFORMATION
Item 6.EXHIBITS
   
 SIGNATURES



Table of Contents
PART I. - FINANCIAL INFORMATION
Item 1. – FINANCIAL STATEMENTS

KULICKE AND SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
(in thousands)
As of
April 1, 2023October 1, 2022
As ofAs of
December 30, 2023December 30, 2023September 30, 2023
ASSETSASSETS
Current assets:Current assets:
Current assets:
Current assets:
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalentsCash and cash equivalents$389,102 $555,537 
Short-term investmentsShort-term investments345,000 220,000 
Accounts and other receivable, net of allowance for doubtful accounts of $0 and $0, respectively169,140 309,323 
Short-term investments
Short-term investments
Accounts and other receivable, net of allowance for doubtful accounts of $49 and $49, respectively
Inventories, netInventories, net224,159 184,986 
Prepaid expenses and other current assetsPrepaid expenses and other current assets61,472 62,200 
Total current assets Total current assets1,188,873 1,332,046 
Property, plant and equipment, net
Property, plant and equipment, net
Property, plant and equipment, netProperty, plant and equipment, net110,680 80,908 
Operating right-of-use assetsOperating right-of-use assets44,908 41,767 
GoodwillGoodwill98,893 68,096 
Intangible assets, netIntangible assets, net39,892 31,939 
Deferred tax assetsDeferred tax assets32,157 25,572 
Equity investmentsEquity investments5,433 5,397 
Other assetsOther assets3,206 2,874 
TOTAL ASSETS TOTAL ASSETS$1,524,042 $1,588,599 
LIABILITIES AND SHAREHOLDERS’ EQUITYLIABILITIES AND SHAREHOLDERS’ EQUITY  
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES AND SHAREHOLDERS’ EQUITY  
Current liabilities:Current liabilities:  Current liabilities:  
Accounts payable
Accounts payable
Accounts payableAccounts payable54,851 67,311 
Operating lease liabilitiesOperating lease liabilities7,271 6,766 
Income taxes payableIncome taxes payable21,328 40,063 
Accrued expenses and other current liabilitiesAccrued expenses and other current liabilities112,301 134,541 
Total current liabilities Total current liabilities195,751 248,681 
Deferred tax liabilitiesDeferred tax liabilities36,180 34,037 
Deferred tax liabilities
Deferred tax liabilities
Income taxes payableIncome taxes payable52,537 64,634 
Operating lease liabilitiesOperating lease liabilities39,557 34,927 
Other liabilitiesOther liabilities16,320 11,670 
TOTAL LIABILITIES TOTAL LIABILITIES$340,345 $393,949 
Commitments and contingent liabilities (Note 16)
Commitments and contingent liabilities (Note 15)
Commitments and contingent liabilities (Note 15)
Commitments and contingent liabilities (Note 15)
Shareholders’ equity:Shareholders’ equity: 
Shareholders’ equity:
Shareholders’ equity: 
Preferred stock, without par value: Authorized 5,000 shares; issued - nonePreferred stock, without par value: Authorized 5,000 shares; issued - none$— $— 
Common stock, without par value: Authorized 200,000 shares; issued 85,364 and 85,364, respectively; outstanding 56,653 and 57,128 shares, respectively567,031 561,684 
Treasury stock, at cost, 28,710 and 28,237 shares, respectively(719,619)(675,800)
Common stock, without par value: Authorized 200,000 shares; issued 85,364 and 85,364, respectively; outstanding 56,495 and 56,310 shares, respectively
Treasury stock, at cost, 28,869 and 29,054 shares, respectively
Retained earningsRetained earnings1,349,736 1,341,666 
Accumulated other comprehensive lossAccumulated other comprehensive loss(13,451)(32,900)
TOTAL SHAREHOLDERS’ EQUITY TOTAL SHAREHOLDERS’ EQUITY$1,183,697 $1,194,650 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$1,524,042 $1,588,599 
The accompanying notes are an integral part of these consolidated condensed financial statements.
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KULICKE AND SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
(in thousands, except per share data)
Three months ended
Three months ended
Three months ended
Three months endedSix months ended
April 1, 2023April 2, 2022April 1, 2023April 2, 2022
Net revenueNet revenue$173,021 $384,282 $349,254 $845,170 
Net revenue
Net revenue
Cost of sales
Cost of sales
Cost of salesCost of sales88,929 182,572 176,456 420,222 
Gross profitGross profit84,092 201,710 172,798 424,948 
Gross profit
Gross profit
Selling, general and administrativeSelling, general and administrative35,464 35,088 77,840 74,047 
Selling, general and administrative
Selling, general and administrative
Research and development
Research and development
Research and developmentResearch and development35,999 37,281 70,507 70,450 
Operating expensesOperating expenses71,463 72,369 148,347 144,497 
Operating expenses
Operating expenses
Income from operations
Income from operations
Income from operationsIncome from operations12,629 129,341 24,451 280,451 
Interest incomeInterest income8,000 470 14,559 941 
Interest income
Interest income
Interest expense
Interest expense
Interest expenseInterest expense(32)(97)(66)(137)
Income before income taxesIncome before income taxes20,597 129,714 38,944 281,255 
Income before income taxes
Income before income taxes
Provision for income taxes
Provision for income taxes
Provision for income taxesProvision for income taxes5,556 13,713 9,314 31,648 
Net incomeNet income$15,041 $116,001 $29,630 $249,607 
Net income
Net income
Net income per share:
Net income per share:
Net income per share:Net income per share:    
BasicBasic$0.27 $1.89 $0.52 $4.03 
Basic
Basic
Diluted
Diluted
DilutedDiluted$0.26 $1.86 $0.51 $3.97 
Weighted average shares outstanding:Weighted average shares outstanding:    
Weighted average shares outstanding:
Weighted average shares outstanding:
Basic
Basic
BasicBasic56,684 61,482 56,868 61,934 
DilutedDiluted57,577 62,435 57,739 62,907 
Diluted
Diluted

 The accompanying notes are an integral part of these consolidated condensed financial statements.
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KULICKE AND SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
(in thousands)
Three months endedSix months ended
April 1, 2023April 2, 2022April 1, 2023April 2, 2022
Three months ended
Three months ended
Three months ended
December 30, 2023
December 30, 2023
December 30, 2023
Net incomeNet income$15,041 $116,001 $29,630 $249,607 
Net income
Net income
Other comprehensive income:
Other comprehensive income:
Other comprehensive income:Other comprehensive income:
Foreign currency translation adjustmentForeign currency translation adjustment1,654 (4,351)15,973 (6,016)
Unrecognized actuarial (gain)/loss on pension plan, net of tax(9)49 (56)(19)
1,645 (4,302)15,917 (6,035)
Foreign currency translation adjustment
Foreign currency translation adjustment
Unrecognized actuarial gain on pension plan, net of tax
Unrecognized actuarial gain on pension plan, net of tax
Unrecognized actuarial gain on pension plan, net of tax
6,213
6,213
6,213
Derivatives designated as hedging instruments:Derivatives designated as hedging instruments:
Unrealized gain/(loss) on derivative instruments, net of tax737 (143)3,830 65 
Reclassification adjustment for (gain)/loss on derivative instruments recognized, net of tax(578)87 (298)623 
Net increase/(decrease) from derivatives designated as hedging instruments, net of tax159 (56)3,532 688 
Total other comprehensive income/(loss)1,804 (4,358)19,449 (5,347)
Derivatives designated as hedging instruments:
Derivatives designated as hedging instruments:
Unrealized gain on derivative instruments, net of tax
Unrealized gain on derivative instruments, net of tax
Unrealized gain on derivative instruments, net of tax
Reclassification adjustment for loss on derivative instruments recognized, net of tax
Reclassification adjustment for loss on derivative instruments recognized, net of tax
Reclassification adjustment for loss on derivative instruments recognized, net of tax
Net increase from derivatives designated as hedging instruments, net of tax
Net increase from derivatives designated as hedging instruments, net of tax
Net increase from derivatives designated as hedging instruments, net of tax
Total other comprehensive income
Total other comprehensive income
Total other comprehensive income
Comprehensive incomeComprehensive income$16,845 $111,643 $49,079 $244,260 
Comprehensive income
Comprehensive income
The accompanying notes are an integral part of these consolidated condensed financial statements.











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KULICKE AND SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)
(in thousands)
 Common StockTreasury StockRetained EarningsAccumulated Other Comprehensive (Loss)/IncomeShareholders' Equity
SharesAmount
Balances as of October 1, 202257,128 $561,684 $(675,800)$1,341,666 $(32,900)$1,194,650 
Common Stock Common StockTreasury StockRetained EarningsAccumulated Other Comprehensive (Loss)/IncomeShareholders' Equity
Shares
Balances as of September 30, 2023
Balances as of September 30, 2023
Balances as of September 30, 2023
Issuance of stock for services renderedIssuance of stock for services rendered180 57 — — 237 
Repurchase of common stockRepurchase of common stock(1,054)— (45,382)— — (45,382)
Issuance of shares for equity-based compensationIssuance of shares for equity-based compensation667 (6,412)6,412 — — — 
Issuance of shares for equity-based compensation
Issuance of shares for equity-based compensation
Equity-based compensationEquity-based compensation— 6,284 — — — 6,284 
Cash dividend declaredCash dividend declared— — — (10,794)— (10,794)
Cash dividend declared
Cash dividend declared
Components of comprehensive income:Components of comprehensive income:
Net income
Net income
Net incomeNet income— — — 14,589 — 14,589 
Other comprehensive incomeOther comprehensive income— — — — 17,645 17,645 
Total comprehensive incomeTotal comprehensive income— — — 14,589 17,645 32,234 
Balances as of December 31, 202256,747 $561,736 $(714,713)$1,345,461 $(15,255)$1,177,229 
Issuance of stock for services rendered184 53 — — 237 
Repurchase of common stock(102)— (4,990)— — (4,990)
Issuance of shares for equity-based compensation(31)31 — — — 
Equity-based compensation— 5,142 — — — 5,142 
Cash dividend declared— — — (10,766)— (10,766)
Components of comprehensive income:
Net income— — — 15,041 — 15,041 
Other comprehensive income— — — — 1,804 1,804 
Total comprehensive income— — — 15,041 1,804 16,845 
Balances as of April 1, 202356,653 $567,031 $(719,619)$1,349,736 $(13,451)$1,183,697 
Balances as of December 30, 2023

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 Common StockTreasury StockRetained EarningsAccumulated Other Comprehensive LossShareholders' Equity
SharesAmount
Balances as of October 2, 202161,931 $550,117 $(400,412)$948,554 $(3,022)$1,095,237 
Common Stock Common StockTreasury StockRetained EarningsAccumulated Other Comprehensive (Loss)/IncomeShareholders' Equity
Shares
Balances as of October 1, 2022
Balances as of October 1, 2022
Balances as of October 1, 2022
Issuance of stock for services renderedIssuance of stock for services rendered197 41 — — 238 
Repurchase of common stockRepurchase of common stock(276)— (15,380)— — (15,380)
Issuance of shares for equity-based compensationIssuance of shares for equity-based compensation725 (6,963)6,963 — — — 
Issuance of shares for equity-based compensation
Issuance of shares for equity-based compensation
Equity-based compensation
Equity-based compensation
Equity-based compensationEquity-based compensation— 5,074 — — — 5,074 
Cash dividend declaredCash dividend declared— — — (10,610)— (10,610)
Components of comprehensive income:
Cash dividend declared
Cash dividend declared
Components of comprehensive income
Net incomeNet income— — — 133,606 — 133,606 
Other comprehensive loss— — — — (989)(989)
Total comprehensive income/(loss)— — — 133,606 (989)132,617 
Balances as of January 1, 202262,384 $548,425 $(408,788)$1,071,550 $(4,011)$1,207,176 
Issuance of stock for services rendered202 35 — — 237 
Repurchase of common stock(2,944)(30,000)(146,153)— — (176,153)
Issuance of shares for equity-based compensation24 (222)222 — — — 
Equity-based compensation— 4,459 — — — 4,459 
Cash dividend declared— — — (10,110)— (10,110)
Components of comprehensive income/(loss)
Net incomeNet income— — — 116,001 — 116,001 
Other comprehensive loss— — — — (4,358)(4,358)
Total comprehensive income/(loss)— — — 116,001 (4,358)111,643 
Balances as of April 2, 202259,468 $522,864 $(554,684)$1,177,441 $(8,369)$1,137,252 
Net income
Other comprehensive income
Total comprehensive income
Balances as of December 31, 2022

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

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KULICKE AND SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
(in thousands)
Six months ended
April 1, 2023April 2, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:CASH FLOWS FROM OPERATING ACTIVITIES:  
CASH FLOWS FROM OPERATING ACTIVITIES:
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
Net income
Net incomeNet income$29,630 $249,607 
Adjustments to reconcile net income to net cash provided by operating activities:Adjustments to reconcile net income to net cash provided by operating activities:  
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Depreciation and amortization
Depreciation and amortizationDepreciation and amortization12,155 10,563 
Equity-based compensation and employee benefitsEquity-based compensation and employee benefits11,900 10,008 
Adjustment for doubtful accounts— (245)
Equity-based compensation and employee benefits
Equity-based compensation and employee benefits
Adjustment for inventory valuation
Adjustment for inventory valuation
Adjustment for inventory valuationAdjustment for inventory valuation1,694 (140)
Deferred taxesDeferred taxes(6,227)3,584 
Gain on disposal of property, plant and equipment(217)(98)
Deferred taxes
Deferred taxes
Loss/(Gain) on disposal of property, plant and equipment
Loss/(Gain) on disposal of property, plant and equipment
Loss/(Gain) on disposal of property, plant and equipment
Unrealized fair value changes on equity investment
Unrealized fair value changes on equity investment
Unrealized fair value changes on equity investment
Unrealized foreign currency translation
Unrealized foreign currency translation
Unrealized foreign currency translationUnrealized foreign currency translation2,613 (1,412)
Changes in operating assets and liabilities, net of assets and liabilities assumed in businesses combinations:Changes in operating assets and liabilities, net of assets and liabilities assumed in businesses combinations:  
Changes in operating assets and liabilities, net of assets and liabilities assumed in businesses combinations:
Changes in operating assets and liabilities, net of assets and liabilities assumed in businesses combinations:
Accounts and other receivable
Accounts and other receivable
Accounts and other receivableAccounts and other receivable141,637 53,430 
InventoriesInventories(39,055)(44,367)
Inventories
Inventories
Prepaid expenses and other current assets
Prepaid expenses and other current assets
Prepaid expenses and other current assetsPrepaid expenses and other current assets2,107 (27,205)
Accounts payable, accrued expenses and other current liabilitiesAccounts payable, accrued expenses and other current liabilities(41,286)(81,318)
Accounts payable, accrued expenses and other current liabilities
Accounts payable, accrued expenses and other current liabilities
Income taxes payable
Income taxes payable
Income taxes payableIncome taxes payable(30,655)(4,042)
Other, netOther, net2,640 644 
Net cash provided by operating activities86,936 169,009 
Other, net
Other, net
Net cash (used in)/provided by operating activities
Net cash (used in)/provided by operating activities
Net cash (used in)/provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:CASH FLOWS FROM INVESTING ACTIVITIES:  
Acquisition of business, net of cash acquired(36,881)— 
CASH FLOWS FROM INVESTING ACTIVITIES:
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipmentPurchases of property, plant and equipment(24,515)(5,658)
Proceeds from sales of property, plant and equipment235 119 
Purchases of property, plant and equipment
Purchases of property, plant and equipment
Investment in private equity fund
Investment in private equity fund
Investment in private equity fundInvestment in private equity fund(36)— 
Purchase of short-term investmentsPurchase of short-term investments(270,000)(319,000)
Purchase of short-term investments
Purchase of short-term investments
Maturity of short-term investments
Maturity of short-term investments
Maturity of short-term investmentsMaturity of short-term investments145,000 466,000 
Net cash (used in)/provided by investing activities(186,197)141,461 
Net cash used in investing activities
Net cash used in investing activities
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:CASH FLOWS FROM FINANCING ACTIVITIES:  
Payment on short-term debt— (54,500)
Proceeds from short-term debt— 54,500 
CASH FLOWS FROM FINANCING ACTIVITIES:
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment for finance lease
Payment for finance lease
Payment for finance leasePayment for finance lease(326)(242)
Repurchase of common stock/treasury stockRepurchase of common stock/treasury stock(52,048)(191,539)
Repurchase of common stock/treasury stock
Repurchase of common stock/treasury stock
Common stock cash dividends paid
Common stock cash dividends paid
Common stock cash dividends paidCommon stock cash dividends paid(20,537)(19,283)
Net cash used in financing activitiesNet cash used in financing activities(72,911)(211,064)
Net cash used in financing activities
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Effect of exchange rate changes on cash and cash equivalents
Effect of exchange rate changes on cash and cash equivalentsEffect of exchange rate changes on cash and cash equivalents5,737 (1,741)
Changes in cash and cash equivalentsChanges in cash and cash equivalents(166,435)97,665 
Changes in cash and cash equivalents
Changes in cash and cash equivalents
Cash and cash equivalents at beginning of periodCash and cash equivalents at beginning of period555,537 362,788 
Cash and cash equivalents at beginning of period
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Cash and cash equivalents at end of period
Cash and cash equivalents at end of periodCash and cash equivalents at end of period$389,102 $460,453 
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:
Property, plant and equipment included in accounts payable and accrued expenses
Property, plant and equipment included in accounts payable and accrued expenses
Property, plant and equipment included in accounts payable and accrued expensesProperty, plant and equipment included in accounts payable and accrued expenses$8,269 $511 
CASH PAID FOR:  
CASH PAID/(REFUNDED) FOR:
CASH PAID/(REFUNDED) FOR:
CASH PAID/(REFUNDED) FOR:
Interest
Interest
InterestInterest$66 $137 
Income taxes, net of refundsIncome taxes, net of refunds$41,930 $32,856 
Income taxes, net of refunds
Income taxes, net of refunds
The accompanying notes are an integral part of these consolidated condensed financial statements.
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KULICKE AND SOFFA INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited

NOTE 1. BASIS OF PRESENTATION
These consolidated condensed financial statements include the accounts of Kulicke and Soffa Industries, Inc. and its subsidiaries (“we,” “us,” “our,” or the “Company”), with appropriate elimination of intercompany balances and transactions.
The interim consolidated condensed financial statements are unaudited and, in management’s opinion, include all adjustments (consisting only of normal and recurring adjustments) necessary for a fair statement of results for these interim periods. The interim consolidated condensed financial statements do not include all of the information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 1, 2022,September 30, 2023 (the “2023 Annual Report”) filed with the Securities and Exchange Commission on November 16, 2023, which includes the Consolidated Balance Sheets as of September 30, 2023 and October 1, 2022, and October 2, 2021, and the related Consolidated Statements of Operations, Statements of Comprehensive Income, Changes in Shareholders’ Equity and Cash Flows for each of the years in the three-year period ended October 1, 2022.September 30, 2023. The results of operations for any interim period are not necessarily indicative of the results of operations for any other interim period or for a full year.
Fiscal Year    
Each of the Company’s first three fiscal quarters end on the Saturday that is 13 weeks after the end of the immediately preceding fiscal quarter. The fourth quarter of each fiscal year ends on the Saturday closest to September 30. Fiscal 20232024 quarters end on December 31, 2022, April 1,30, 2023, July 1, 2023March 30, 2024, June 29, 2024 and September 30, 2023.28, 2024. In fiscal years consisting of 53 weeks, the fourth quarter will consist of 14 weeks. Fiscal 20222023 quarters ended on January 1,December 31, 2022, April 2, 2022,1, 2023, July 2, 20221, 2023 and October 1, 2022.September 30, 2023.
Nature of Business
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 semiconductor device manufacturers, integrated device manufacturers (“IDMs”), outsourced semiconductor assembly and test providers (“OSATs”), foundry service providers, and other electronics manufacturers includingand 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, solutions and services, including those sold or provided by the Company. These downturns and slowdowns have in the past adversely affected the Company’s operating results. The Company believes such volatility will continue to characterize the industry and the Company’s operations in the future.
Use of Estimates
The preparation of consolidated condensed 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 condensed 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, 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. As a result, management makes judgments regarding the carrying values of the Company’s assets and liabilities that are not readily apparent from other sources. Authoritative pronouncements, historical experience and assumptions are used as the basis for making estimates, and on an ongoing basis, management evaluates these estimates. Actual results may differ from these estimates.
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Due to the prolonged ongoing effectsKULICKE AND SOFFA INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)
In light of 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 April 1,December 30, 2023. While there was no material impact from macroeconomic headwinds to our consolidated condensed financial statements as of and for the quarter ended April 1,December 30, 2023, these estimates may change, as new events occur and additional information is obtained, as well as otherincluding factors related to COVID-19 and macroeconomicthese headwinds, that could materially impact our consolidated condensed financial statements in future reporting periods.
Significant Accounting Policies
There have been no material changes to our significant accounting policies summarized in Note 1: Basis of Presentation to our Consolidated Financial Statements included in our 2023 Annual Report.
Revision of Segment-Related Disclosures within the Previously Issued Consolidated Financial Statements
During the third quarter of fiscal year 2023, in response to comment letters from the staff of the Securities and Exchange Commission (the "SEC"), the Company reconsidered the guidance under ASC 280, Segment Reporting, and determined that certain prior period conclusions about the Company’s operating and reportable segments were erroneous. As a result, the Company had incorrectly presented certain segment-related disclosures in the notes to our previously issued consolidated financial statements, included in our Annual Report on Form 10-K for the year ended October 1, 2022, originally filed with the SEC on November 17, 2022 (the "Original Form 10-K").
The Company has evaluated the materiality of the incorrect presentation of its segment-related disclosures in the notes to its consolidated financial statements and has concluded that it did not result in a material misstatement of the Company’s previously issued consolidated financial statements.
In light of the changes to the Company’s operating and reportable segments, the Company has revised, in this Quarterly Report on Form 10-Q, the segment-related disclosures in Note 14: Segment Information, to update the prior period presentation. The effect of this revision has been reflected in all footnotes impacted by this revision.
Recent Accounting Pronouncements
Disclosure Improvements
In October 2023, the Financial Accounting Standards Board (the "FASB") issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. This ASU aligns the requirements in the FASB Accounting Standards Codification with the SEC’s regulations. The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of a variety of Codification Topics. They will also allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC’s regulations. This ASU will become effective for each amendment on the date on which the SEC removes the related disclosure from its regulations. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.
Segment Reporting
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure, which aims to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments in the ASU enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the amendments is to enable investors to better understand an entity's overall performance and assess potential future cash flows. This ASU will be effective for the Company's fiscal year 2025, and interim periods within the fiscal years beginning after the Company’s fiscal year 2026. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.


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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)

Significant Accounting Policies
There have been no material changes to our significant accounting policies summarized in Note 1 “Basis of Presentation” to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended October 1, 2022.
Recent Accounting Pronouncements
Government AssistanceIncome Taxes
In November 2021,December 2023, the FASB issued ASU 2021-10,2023-09 Government AssistanceIncome Taxes (Topic 832)740): Disclosure by Business Entities about Government Assistance which aims at increasingImprovement to Income Tax Disclosures. The amendments in this update are intended to enhance the transparency and decision usefulness of government assistance received by most business entities. The standard requires business entitiesincome tax disclosures primarily through changes to make annual disclosures about the nature of the transactionsrate reconciliation and the related accounting policy used to accountincome taxes paid information. This ASU will be effective for the transactions, the line items and applicable amounts on the balance sheet and income statementCompany's fiscal year 2026. Early adoption is permitted for annual financial statements that are affected by the transactions, and significant terms and conditions of the transactions, including commitments and contingencies. If an entity omits any required disclosures because it is legally prohibited, it must describe the general nature of the information and indicate that the omitted disclosures are legally prohibited from being disclosed. Thishave not yet been issued or made available for issuance. ASU is effective for fiscal years beginning after December 15, 2021, which for the Company is in fiscal 2023. The Company will include disclosures for material items with the filing of its Annual Report on Form 10-K for the year ending on September 30, 2023.
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 amendments2023-09 should be applied prospectively to business combinations occurring on or aftera prospective basis, but retrospective application is permitted. The Company is currently evaluating the effective date ofimpact the amendments with early adoption permitted. We elected to early adopt this ASU in fiscal year 2023. The adoption of this ASU did notstandard will have a material impact on ourits consolidated condensed financial statements.



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KULICKE AND SOFFA INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)

NOTE 2. BALANCE SHEET COMPONENTS
The following tables reflect the components of significant balance sheet accounts as of April 1,December 30, 2023 and October 1, 2022:September 30, 2023:
 As of
(in thousands)April 1, 2023October 1, 2022
Short-term investments, available-for-sale (1)
$345,000 $220,000 
Inventories, net:  
Raw materials and supplies$137,218 $118,833 
Work in process57,429 40,114 
Finished goods48,913 45,277 
 243,560 204,224 
Inventory reserves(19,401)(19,238)
 $224,159 $184,986 
Property, plant and equipment, net:  
Land$2,182 $2,182 
Buildings and building improvements23,186 22,783 
Leasehold improvements74,888 32,400 
Data processing equipment and software36,102 38,223 
Machinery, equipment, furniture and fixtures93,507 90,151 
Construction in progress14,195 25,004 
 244,060 210,743 
Accumulated depreciation(133,380)(129,835)
 $110,680 $80,908 
Accrued expenses and other current liabilities:  
Accrued customer obligations (2)
$52,861 $58,916 
Wages and benefits25,006 50,279 
Dividends payable10,766 9,743 
Commissions and professional fees4,179 5,019 
Severance42 19 
Other19,447 10,565 
 $112,301 $134,541 

 As of
(in thousands)December 30, 2023September 30, 2023
Inventories, net:  
Raw materials and supplies$119,077 $114,827 
Work in process85,499 74,555 
Finished goods55,463 49,207 
 260,039 238,589 
Inventory reserves(23,481)(21,285)
 $236,558 $217,304 
Property, plant and equipment, net:  
Land$2,182 $2,182 
Buildings and building improvements23,213 23,105 
Leasehold improvements83,586 82,927 
Data processing equipment and software38,267 37,483 
Machinery, equipment, furniture and fixtures98,773 95,692 
Construction in progress11,345 11,099 
 257,366 252,488 
Accumulated depreciation(150,093)(142,437)
 $107,273 $110,051 
Accrued expenses and other current liabilities:  
Accrued customer obligations (1)
$36,287 $35,701 
Wages and benefits23,060 33,096 
Dividends payable11,303 10,710 
Commissions and professional fees4,270 4,091 
Accrued leasehold renovations10,013 11,005 
Other6,260 8,402 
 $91,193 $103,005 
(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 three and six months ended April 1, 2023 and April 2, 2022.
(2)Represents customer advance payments, customer credit program, accrued warranty expense and accrued retrofit obligations.

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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)


NOTE 3. BUSINESS COMBINATION
Acquisition of Advanced Jet Automation Co., Ltd. (“AJA”)
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. Subsequent to the acquisition, AJA has been renamed to Kulicke and Soffa Hi-Tech Co., Ltd..
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 will operate as a business unit (“dispensing business unit”), which is classified as a new operating segment within the Capital Equipment reportable segment. 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 of the Closing Date, 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 Condensed Statements of Operations or Consolidated Condensed Balance Sheets.
The acquisition of AJA was accounted for in accordance with ASC No. 805, Business Combinations, using the acquisition method.
The following table summarizes the allocation of the assets acquired and liabilities assumed based on the fair values as of the Closing Date:
(in thousands)February 22, 2023
Cash and cash equivalents$1,238 
Account and other receivables, net1,156 
Inventory1,581 
Property, plant and equipment, net1,462 
Right-of-use assets989 
Other assets127 
Goodwill27,975 
Intangible assets7,768 
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$38,119 
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.
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)

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 ValueUseful Lives
Developed technology(1)
$4,261 8
Customer relationships(2)
2,131 8
In-process research and development (“IPR&D”)(3)
459 N.A.
Patents(3)
524 8
Order Backlog(4)
393 1
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 the three and six months ended April 1, 2023, the acquired dispensing business unit contributed a net loss of $0.4 million.
For the three and six months ended April 1, 2023, the Company incurred $0.3 million and $0.4 million of expenses related to the acquisition, respectively, which is included within selling, general and administrative expense in the Consolidated Condensed Statements of Operations.
The acquisition did not result in material contributions to revenue and net income in the consolidated financial statements for the three and six months ended April 1, 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.

NOTE 4.3. GOODWILL AND INTANGIBLE ASSETS
Goodwill
Intangible assets classified as goodwill are not amortized. The goodwill established in connection with our acquisitions represents the estimated future economic benefits arising from the assets we acquired that did not qualify to be identified and recognized individually. The goodwill also includes the value of expected future cash flows from the acquisitions, expected synergies with our other affiliates and other unidentifiable intangible assets.
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 20222023 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 non-cash impairment in the future.
During the three and six months ended April 1,December 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 and concluded that no triggering event had occurred. While we have concluded that a triggering event did not occur during the quarter ended April 1,December 30, 2023, the prolonged ongoing effects of the COVID-19 pandemic andpersistent 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.
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)

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, where applicable, by reportable segments and the “All Others” category (refer to Note 15)14 for further information) as of April 1,December 30, 2023 and October 1, 2022:September 30, 2023:
(in thousands)Capital EquipmentAPSTotal
Balance at October 1, 2022$42,189 $25,907 $68,096 
Acquired in business combination27,975 — $27,975 
Other2,542 280 $2,822 
Balance at April 1, 2023$72,706 $26,187 $98,893 
(in thousands)Wedge Bonding EquipmentAPSAll OthersTotal
Balance at September 30, 2023(1)
$18,280 $26,109 44,284 $88,673 
Other— 125 718 $843 
Balance at December 30, 2023$18,280 $26,234 45,002 $89,516 
(1) Cumulative goodwill impairment pertaining to the “All Others” category as of September 30, 2023 was $45.0 million.

During the quarter ended April 1, 2023, the Company recorded goodwill relating to the acquisition
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Table of AJA. For further information on the acquisition of AJA, please refer to Note 3.Contents

KULICKE AND SOFFA INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)
Intangible Assets
Intangible assets with determinable lives are amortized over their estimated useful lives. 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 April 1,December 30, 2023 and October 1, 2022:September 30, 2023: 
 As ofAverage estimated
(dollar amounts in thousands)April 1, 2023October 1, 2022
useful lives (in years)
Developed technology$99,209 $89,017 6.0 to 15.0
Accumulated amortization(64,139)(58,636)
Net developed technology$35,070 $30,381 
Customer relationships$37,156 $33,515 5.0 to 8.0
Accumulated amortization(35,048)(33,515)
Net customer relationships$2,108 $— 
In-process research and development$459 $— N.A
Net in-process research and development$459 $— 
Trade and brand name$7,195 $6,945 7.0 to 8.0
Accumulated amortization(7,195)(6,945)
Net trade and brand name— — 
Other intangible assets$5,618 $4,700 1.0 to 8.0
Accumulated amortization(3,363)(3,142)
Net other intangible assets$2,255 $1,558 
$39,892 $31,939 
 As of December 30, 2023As of September 30, 2023
(dollar amounts in thousands)Average estimated
useful lives
(in years)
Gross Carrying AmountAccumulated AmortizationNet AmountGross Carrying AmountAccumulated AmortizationNet Amount
Developed technology6.0 to 15.0$82,874 $(57,961)$24,913 $80,959 $(55,877)$25,082 
Customer relationships5.0 to 8.0$37,439 $(35,530)$1,909 $36,764 $(34,789)$1,975 
Trade and brand name7.0 to 8.0$7,241 $(7,241)$— $7,130 $(7,130)$— 
Other intangible assets1.0 to 8.0$5,618 $(3,983)$1,635 $5,617 $(3,776)$1,841 
In-process research and developmentN.A$459 $— $459 $459 $— $459 
$133,631 $(104,715)$28,916 $130,929 $(101,572)$29,357 

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

As of
(in thousands)December 30, 2023
Remaining fiscal 2024$3,916 
Fiscal 20255,153 
Fiscal 20265,153 
Fiscal 20274,878 
Fiscal 20284,438 
Thereafter5,378 
Total amortization expense$28,916 
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)


The following table reflects estimated annual amortization expense related to intangible assets as of April 1, 2023:
As of
(in thousands)April 1, 2023
Remaining fiscal 2023$3,567 
Fiscal 20246,963 
Fiscal 20256,799 
Fiscal 20266,799 
Fiscal 20276,095 
Thereafter9,669 
Total amortization expense$39,892 
NOTE 5.4. CASH, CASH EQUIVALENTS, AND SHORT-TERM INVESTMENTS
Cash equivalents consist of instruments with remaining maturities of three months or less at the date of purchase. In general, these investments are free of trading restrictions.
Cash, cash equivalents, and short-term investments consisted of the following as of April 1,December 30, 2023:
(in thousands)(in thousands)Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Estimated
Fair Value
(in thousands)
(in thousands)
Current assets:
Current assets:
Current assets:Current assets:
CashCash$35,326 $— $— $35,326 
Cash
Cash
Cash equivalents:
Cash equivalents:
Cash equivalents:Cash equivalents:
Money market funds (1)
Money market funds (1)
290,721 — (8)290,713 
Money market funds (1)
Money market funds (1)
Time deposits (2)
Time deposits (2)
63,063 — — 63,063 
Time deposits (2)
Time deposits (2)
Total cash and cash equivalents
Total cash and cash equivalents
Total cash and cash equivalentsTotal cash and cash equivalents$389,110 $— $(8)$389,102 
Short-term investments:Short-term investments:
Short-term investments:
Short-term investments:
Time deposits (2)
Time deposits (2)
Time deposits (2)
Time deposits (2)
345,000 — — 345,000 
Total short-term investmentsTotal short-term investments$345,000 $— $— $345,000 
Total short-term investments
Total short-term investments
Total cash, cash equivalents and short-term investmentsTotal cash, cash equivalents and short-term investments$734,110 $— $(8)$734,102 
Total cash, cash equivalents and short-term investments
Total cash, cash equivalents and short-term investments
(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)FairAll 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 three months ended December 30, 2023.


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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)

Cash, cash equivalents and short-term investments consisted of the following as of October 1, 2022:September 30, 2023:
(in thousands)(in thousands)Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Estimated
Fair Value
(in thousands)
(in thousands)
Current assets:
Current assets:
Current assets:Current assets:
CashCash$173,402 $— $— $173,402 
Cash
Cash
Cash equivalents:
Cash equivalents:
Cash equivalents:Cash equivalents:
Money market funds (1)
Money market funds (1)
157,145 — (20)157,125 
Money market funds (1)
Money market funds (1)
Time deposits (2)
Time deposits (2)
225,010 — — 225,010 
Time deposits (2)
Time deposits (2)
Total cash and cash equivalents
Total cash and cash equivalents
Total cash and cash equivalentsTotal cash and cash equivalents$555,557 $— $(20)$555,537 
Short-term investments:Short-term investments:
Short-term investments:
Short-term investments:
Time deposits (2)
Time deposits (2)
Time deposits (2)
Time deposits (2)
220,000 — — 220,000 
Total short-term investmentsTotal short-term investments$220,000 $— $— $220,000 
Total short-term investments
Total short-term investments
Total cash, cash equivalents and short-term investmentsTotal cash, cash equivalents and short-term investments$775,557 $— $(20)$775,537 
Total cash, cash equivalents and short-term investments
Total cash, cash equivalents and short-term investments
(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)FairAll 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 three months ended December 31, 2022.

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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)
NOTE 6.5. EQUITY INVESTMENTS
Equity investments consisted of the following as of April 1,December 30, 2023 and October 1, 2022:September 30, 2023:
As of As of
(in thousands)(in thousands)April 1, 2023October 1, 2022(in thousands)December 30, 2023September 30, 2023
Non-marketable equity securitiesNon-marketable equity securities$5,433 $5,397 
Non-marketable equity securities
Non-marketable equity securities
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 December 30, 2023, the Company has funded $2.2 million into the affiliated investment fund and recognized a cumulative unrealized fair value loss of $0.1 million. The Company has recorded the amount of funded capital that has been called as an equity investment.

NOTE 7.6. FAIR VALUE MEASUREMENTS
Accounting standards establish three levels of inputs that may be used to measure fair value: quoted prices in active markets for identical assets or liabilities (referred to as Level 1), inputs other than Level 1 that are observable for the asset or liability either directly or indirectly (referred to as Level 2) and unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities (referred to as Level 3).
Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis 
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 three and six months ended April 1,December 30, 2023.
Fair Value Measurements on a Nonrecurring Basis
Our non-financial assets such as intangible assets and property, plant and equipment are carried at cost unless impairment is deemed to have occurred.
Fair Value of Financial Instruments
Amounts reported as accounts receivables, prepaid expenses and other current assets, accounts payable and accrued expenses approximate fair value.

NOTE 8.7. DERIVATIVE FINANCIAL INSTRUMENTS
The Company’s international operations are exposed to changes in foreign exchange rates due to transactions denominated in currencies other than U.S. dollars. Most of the Company’s revenue and cost of materials are transacted in U.S. dollars. However, a significant amount of the Company’s operating expenses is denominated in local currencies, primarily in Singapore.
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)

The foreign currency exposure of our operating expenses is generally hedged with foreign exchange forward contracts. The Company’s foreign exchange risk management programs include using foreign exchange forward contracts with cash flow hedge accounting designation to hedge exposures to the variability in the U.S. dollar equivalent of forecasted non-U.S. dollar-denominated operating expenses. These instruments generally mature within twelve months. 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 Condensed Statements of Operations as the impact of the hedged transaction.
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)
The fair value of derivative instruments on our Consolidated Condensed Balance Sheets as of April 1,December 30, 2023 and October 1, 2022September 30, 2023 were as follows:
As of
April 1, 2023October 1, 2022
As of
As of
As of
December 30, 2023December 30, 2023September 30, 2023
(in thousands)(in thousands)Notional Amount
Fair Value Asset Derivatives(1)
Notional Amount
Fair Value Liability Derivatives(2)
(in thousands)Notional Amount
Fair Value Asset
Derivatives(1)
Notional Amount
Fair Value Liability Derivatives(2)
Derivatives designated as hedging instruments:Derivatives designated as hedging instruments:
Foreign exchange forward contracts (3)
Foreign exchange forward contracts (3)
$59,947 $1,298 $57,570 $(2,234)
Foreign exchange forward contracts (3)
Foreign exchange forward contracts (3)
Total derivativesTotal derivatives$59,947 $1,298 $57,570 $(2,234)
(1)The fair value of derivative assets is measured using level 2 fair value inputs and is included in prepaid expenses and other current assets on our Consolidated Condensed Balance Sheets.
(2)The fair value of derivative liabilities is measured using level 2 fair value inputs and is included in accrued expenses and other current liabilities on our Consolidated Condensed Balance Sheets.
(3)Hedged amounts expected to be recognized to income within the next twelve months.

The effects of derivative instruments designated as cash flow hedges in our Consolidated Condensed Statements of Comprehensive Income for the three and six months ended April 1,December 30, 2023 and April 2,December 31, 2022 were as follows:
Three months endedSix months ended
Three months ended
Three months ended
Three months ended
(in thousands)
(in thousands)
(in thousands)(in thousands)April 1, 2023April 2, 2022April 1, 2023April 2, 2022
Foreign exchange forward contract in cash flow hedging relationships:Foreign exchange forward contract in cash flow hedging relationships:
Net gain/(loss) recognized in OCI,
net of tax (1)
$737 $(143)$3,830 $65 
Net gain/(loss) reclassified from accumulated OCI into income, net of tax (2)
$578 $(87)$298 $(623)
Foreign exchange forward contract in cash flow hedging relationships:
Foreign exchange forward contract in cash flow hedging relationships:
Net gain recognized in OCI, net of tax(1)
Net gain recognized in OCI, net of tax(1)
Net gain recognized in OCI, net of tax(1)
Net loss reclassified from accumulated OCI into income, net of tax(2)
Net loss reclassified from accumulated OCI into income, net of tax(2)
Net loss reclassified from accumulated OCI into income, net of tax(2)
(1)Net change in the fair value of the effective portion classified in OCI.
(2)Effective portion classified as selling, general and administrative expense.

NOTE 9.8. LEASES
We have entered into various non-cancellable operating and finance lease agreements for certain of our offices, manufacturing, technology, sales support and service centers, equipment, and vehicles. We determine if an arrangement is a lease, or contains a lease, at inception and record the leases in our financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor. 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 April 1,December 30, 2023, there were four options to extend the lease which was recognized as a right-of-use (“ROU”) asset, or a lease liability. 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. We have elected not to present short-term leases on the Consolidated Condensed 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 operating lease liabilities 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 Condensed Balance Sheets. As of April 1,December 30, 2023 and October 1, 2022,September 30, 2023, our finance leases are not material.


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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)

The following table shows the components of lease expense:
Three months endedSix months ended
(in thousands)(in thousands)April 1, 2023April 2, 2022April 1, 2023April 2, 2022
(in thousands)
(in thousands)
Operating lease expense (1)
Operating lease expense (1)
Operating lease expense (1)
Operating lease expense (1)
$2,683 $1,990 $5,273 $4,044 
(1)Operating lease expense includes short-term lease expense, which is immaterial for the three and six months ended April 1,December 30, 2023 and April 2,December 31, 2022.
The following table shows the cash flows arising from lease transactions. Cash payments related to short-term leases are not included in the measurement of operating lease liabilities, and, as such, are excluded from the amounts below:
Six months ended Three months ended
(in thousands)(in thousands)April 1, 2023April 2, 2022(in thousands)December 30, 2023December 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases Operating cash outflows from operating leases$4,673 $3,752 
Operating cash outflows from operating leases
Operating cash outflows from operating leases
The following table shows the weighted-average lease terms and discount rates for operating leases:
As of
April 1, 2023October 1, 2022
December 30, 2023
December 30, 2023
December 30, 2023
Operating leases:Operating leases:
Operating leases:
Operating leases:
Weighted-average remaining lease term (in years):
Weighted-average remaining lease term (in years):
Weighted-average remaining lease term (in years):
Weighted-average remaining lease term (in years):
7.88.0
Weighted-average discount rate:Weighted-average discount rate:5.9 %5.8 %
Weighted-average discount rate:
Weighted-average discount rate:
Future lease payments, excluding short-term leases, as of December 30, 2023, are detailed as follows:
As of
(in thousands)April 1,December 30, 2023
Remaining fiscal 20232024$4,9877,346 
Fiscal 20249,325 
Fiscal 20258,4779,632 
Fiscal 20267,3478,959 
Fiscal 20275,5317,052 
Fiscal 20286,590 
Thereafter23,48623,110 
Total minimum lease payments$59,15362,689 
Less: Interest$12,32514,272 
Present value of lease obligations$46,82848,417 
Less: Current portion$7,2716,697 
Long-term portion of lease obligations$39,55741,720 



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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)


NOTE 10.9. DEBT AND OTHER OBLIGATIONS
Bank Guarantees
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 April 1,December 30, 2023, the outstanding amount under this facility was $3.2$5.0 million.
Credit Facilities
On February 15, 2019, the Company entered into a Facility Letter and Overdraft Agreement (collectively, the “Facility Agreements”) with MUFG Bank, Ltd., Singapore Branch (the “Bank”). The Facility Agreements provide the Company and one of its subsidiaries with an overdraft facility of up to $150.0 million (the “Overdraft Facility”) for general corporate purposes. Amounts outstanding under the Overdraft Facility, including interest, are payable upon thirty days written demand by the Bank. Interest on the Overdraft Facility is calculated on a daily basis, and the applicable interest rate is calculated at the Secured Overnight Financing Rate (“SOFR”) plus a margin of 1.5% per annum. The Overdraft Facility is an unsecured facility per the terms of the Facility Agreements. The Facility Agreements contain customary non-financial covenants, including, without limitation, covenants that restrict the Company’s ability to sell or dispose of its assets, cease owning at least 51% of two of its subsidiaries (the “Subsidiaries”), or encumber its assets with material security interests (including any pledge of monies in the Subsidiaries' cash deposit account with the Bank). The Facility Agreements also contain typical events of default, including, without limitation, non-payment of financial obligations when due, cross defaults to other material indebtedness of the Company and any breach of a representation or warranty under the Facility Agreements. As of April 1,December 30, 2023, there were no outstanding amounts under the Overdraft Facility.

NOTE 11.10. SHAREHOLDERS’ EQUITY AND EMPLOYEE BENEFIT PLANS
401(k) Retirement Income Plans
The Company has a 401(k) retirement plan (the “401(k) Plan”) for eligible U.S. employees. The 401(k) Plan allows for employee contributions and matching Company contributions from 4% to 6% based upon terms and conditions of the 401(k) Plan.
The following table reflects the Company’s contributions to the 401(k) Plan during the three and six months ended April 1, 2023 and April 2, 2022:
Three months endedSix months ended
(in thousands)April 1, 2023April 2, 2022April 1, 2023April 2, 2022
Cash$540 $496 $1,014 $1,004 
Share Repurchase Program
On August 15, 2017, the Company’s Board of Directors authorized a program (the “Program”) to repurchase up to $100 million of the Company’s common stock on or before August 1, 2020. In 2018, 2019 and 2020, the Board of Directors increased the share repurchase authorization under the Program to $200 million, $300 million, and $400 million, respectively. On March 3, 2022, the Board of Directors further increased the share repurchase authorization under the Program by an additional $400 million to $800 million, and extended its duration through August 1, 2025. TheOn November 17, 2023, the Company has entered into amodified its written trading plan under Rule 10b5-1 of the Exchange Act, such plan as first entered into on May 7, 2022 to facilitate repurchases under the Program. The purpose of the modification was to revise the previously established amounts and prices under the plan by providing for the purchase of up to approximately $169 million of the Company’s common stock from November 20, 2023 through August 1, 2025. The Program may be suspended or discontinued at any time and is funded using the Company’s available cash, cash equivalents and short-term investments. Under the Program, shares may be repurchased through open market and/or privately negotiated transactions at prices deemed appropriate by management. The timing and amount of repurchase transactions under the Program depend on market conditions as well as corporate and regulatory considerations.
During the three and six months ended April 1,December 30, 2023, the Company repurchased a total of approximately 101.9 thousand and 1,156.2555.6 thousand shares of common stock under the Program at a cost of approximately $5.0 million and $50.4 million, respectively.$26.8 million. The stock repurchases were recorded in the periods they were delivered and accounted for as treasury stock in the Company’s Consolidated Condensed Balance Sheets. The Company records treasury stock purchases under the cost method using the first-in, first-out (FIFO) method. Upon re-issuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid-in capital.
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Unaudited (continued)

If the Company reissues treasury stock at an amount below its acquisition cost and additional paid-in capital associated with prior treasury stock transactions is insufficient to cover the difference between acquisition cost and the reissue price, this difference is recorded against retained earnings.
As of April 1,December 30, 2023, our remaining stock repurchase authorization under the Program was approximately $198.8$154.2 million.

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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)
Dividends
On November 16, 2022,15, 2023, the Board of Directors declared a quarterly dividend of $0.19$0.20 per share of common stock. Dividends paid during the three and six months ended April 1,December 30, 2023 totaled $10.8 million and $20.5 million, respectively.$10.7 million. The declaration of any future cash dividend is at the discretion of the Board of Directors and will depend on the Company’s financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination that such dividends are in the best interests of the Company’s shareholders.
Accumulated Other Comprehensive Loss
The following table reflects accumulated other comprehensive loss reflected on the Consolidated Condensed Balance Sheets as of April 1,December 30, 2023 and October 1, 2022:September 30, 2023: 
As of As of
(in thousands)(in thousands)April 1, 2023October 1, 2022(in thousands)December 30, 2023September 30, 2023
Loss from foreign currency translation adjustmentsLoss from foreign currency translation adjustments$(13,881)$(29,854)
Unrecognized actuarial loss on pension plan, net of taxUnrecognized actuarial loss on pension plan, net of tax(868)(812)
Unrealized gain/(loss) on hedgingUnrealized gain/(loss) on hedging1,298 (2,234)
Accumulated other comprehensive lossAccumulated other comprehensive loss$(13,451)$(32,900)
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 April 1,December 30, 2023, 2.51.7 million shares of common stock are available for grant to the Company’s employees and directors under the Plan.
Relative TSRTotal Shareholder Return 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 the relative total shareholder return (“TSR”)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. TSR is measured for the Company and each peer company over a performance period, which is generally three years. Vesting percentages range from 0% to 200% of awards granted. The provisions of the Relative TSR PSUs are reflected in the grant date fair value of the award; therefore, compensation expense is recognized regardless of whether the market condition is ultimately satisfied. 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 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. Revenues from acquisitions will be included in the calculation after four fiscal quarters after acquisition. Any portion of the grant that does not meet the revenue growth objectives and relative growth performance is forfeited. Vesting percentages range from 0% to 200% of awards granted.
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 Condensed Statements of Operations for the three and six months ended April 1,December 30, 2023 and April 2,December 31, 2022 was based upon awards ultimately expected to vest, with forfeiture accounted for when they occur.

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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)

The following table reflects Time-based RSUs, Relative TSR PSUs, Growth PSUs and common stock granted during the three and six months ended April 1,December 30, 2023 and April 2,December 31, 2022:
Three months endedSix months ended
(shares in thousands)(shares in thousands)April 1, 2023April 2, 2022April 1, 2023April 2, 2022
(shares in thousands)
(shares in thousands)
Time-based RSUs
Time-based RSUs
Time-based RSUsTime-based RSUs512 302 
Relative TSR PSUsRelative TSR PSUs— 186 154 
Relative TSR PSUs
Relative TSR PSUs
Growth PSUs
Growth PSUs
Growth PSUsGrowth PSUs— 92 77 
Common stockCommon stock12 
Common stock
Common stock
Equity-based compensation in sharesEquity-based compensation in shares10 18 802 541 
Equity-based compensation in shares
Equity-based compensation in shares
The following table reflects total equity-based compensation expense, which includes Time-based RSUs, Relative TSR PSUs, Growth PSUs and common stock, included in the Consolidated Condensed Statements of Operations during the three and six months ended April 1,December 30, 2023 and April 2,December 31, 2022: 
Three months endedSix months ended
(in thousands)(in thousands)April 1, 2023April 2, 2022April 1, 2023April 2, 2022
(in thousands)
(in thousands)
Cost of sales
Cost of sales
Cost of salesCost of sales$323 $308 $631 $534 
Selling, general and administrativeSelling, general and administrative3,731 3,296 8,598 7,252 
Selling, general and administrative
Selling, general and administrative
Research and development
Research and development
Research and developmentResearch and development1,325 1,092 2,671 2,222 
Total equity-based compensation expenseTotal equity-based compensation expense$5,379 $4,696 $11,900 $10,008 
Total equity-based compensation expense
Total equity-based compensation expense
The following table reflects equity-based compensation expense, by type of award, for the three and six months ended April 1,December 30, 2023 and April 2,December 31, 2022:  
Three months endedSix months ended
(in thousands)(in thousands)April 1, 2023April 2, 2022April 1, 2023April 2, 2022
(in thousands)
(in thousands)
Time-based RSUs
Time-based RSUs
Time-based RSUsTime-based RSUs$3,611 $3,022 $7,198 $5,918 
Relative TSR PSUsRelative TSR PSUs1,193 1,074 2,445 1,987 
Relative TSR PSUs
Relative TSR PSUs
Growth PSUs
Growth PSUs
Growth PSUsGrowth PSUs338 363 1,783 1,628 
Common stockCommon stock237 237 474 475 
Common stock
Common stock
Total equity-based compensation expense
Total equity-based compensation expense
Total equity-based compensation expenseTotal equity-based compensation expense$5,379 $4,696 $11,900 $10,008 

NOTE 12.11. REVENUE AND CONTRACT BALANCES
The Company recognizes revenue when we satisfy performance obligations as evidenced by the transfer of control of our products or services to customers. In general, the Company generates revenue from product sales, either directly to customers or to distributors. In determining whether a contract exists, we evaluate the terms of the agreement, the relationship with the customer or distributor and their ability to pay. Service revenue is generally recognized over time as the services are performed. For the three and six months ended April 1,December 30, 2023 and April 2,December 31, 2022, the service revenue was not material.
The Company reports revenue based on ourits reportable segments. The Company believes that reporting revenue on this basissegments 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 15:14: Segment Information, for disclosure of revenue by segment.segment and end markets.

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Unaudited (continued)
Contract Balances
Our contract assets relate to our rights to consideration for revenue with collection dependent on events other than the passage of time, such as the achievement of specified payment milestones. The contract assets will be transferred to net account receivables as our right to consideration for these contract assets become unconditional. Contracts assets are reported in the accompanying Consolidated Condensed Balance Sheets within prepaid expenses and other current assets.
Our contract liabilities are primarily related to payments received in advance of satisfying performance obligations, and are reported in the accompanying Consolidated Condensed Balance Sheets within accrued expenses and other current liabilities.
Contract liabilities increase as a result of receiving new advance payments from customers and decrease as revenue is recognized from product sales under advance payment arrangements upon satisfying the performance obligations.
The following table shows the changes in contract asset balances during the three months ended December 30, 2023 and December 31, 2022:
Three months ended
(in thousands)December 30, 2023December 31, 2022
Contract assets, beginning of period$10,181 $26,317 
Additions— 2,670 
Transferred to accounts receivable or collected(10,181)— 
Contract assets, end of period$— $28,987 

The following table shows the changes in contract liability balances during the three months ended December 30, 2023 and December 31, 2022:
Three months ended
(in thousands)December 30, 2023December 31, 2022
Contract liabilities, beginning of period$4,797 $3,160 
Revenue recognized(8,543)(7,270)
Additions12,325 11,891 
Contract liabilities, end of period$8,579 $7,781 
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Unaudited (continued)

The following table shows the changes in contract asset balances during the three and six months ended April 1, 2023 and April 2, 2022:
Three months endedSix months ended
(in thousands)April 1, 2023April 2, 2022April 1, 2023April 2, 2022
Contract assets, beginning of period$28,987 $— $26,317 $— 
Additions223 26,721 2,893 26,721 
Contract assets, end of period$29,210 $26,721 $29,210 $26,721 
The following table shows the changes in contract liability balances during the three and six months ended April 1, 2023 and April 2, 2022:
Three months endedSix months ended
(in thousands)April 1, 2023April 2, 2022April 1, 2023April 2, 2022
Contract liabilities, beginning of period$7,781 $28,228 $3,160 $15,596 
Revenue recognized(9,276)(43,818)(16,546)(75,184)
Additions8,051 32,890 19,942 76,888 
Contract liabilities, end of period$6,556 $17,300 $6,556 $17,300 

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Unaudited (continued)


NOTE 13.12. EARNINGS PER SHARE
Basic income per share is calculated using the weighted average number of shares of common stock outstanding during the period. 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 the three and six months ended April 1,December 30, 2023 and April 2,December 31, 2022:
 Three months ended
(in thousands, except per share data)April 1, 2023April 2, 2022
 BasicDilutedBasicDiluted
NUMERATOR:    
Net income$15,041 $15,041 $116,001 $116,001 
DENOMINATOR:    
Weighted average shares outstanding - Basic56,684 56,684 61,482 61,482 
Dilutive effect of Equity Plans893 953 
Weighted average shares outstanding - Diluted 57,577  62,435 
EPS:    
Net income per share - Basic$0.27 $0.27 $1.89 $1.89 
Effect of dilutive shares (0.01) (0.03)
Net income per share - Diluted $0.26  $1.86 
Anti-dilutive shares(1)
021
 Six months ended
(in thousands, except per share data)April 1, 2023April 2, 2022
 BasicDilutedBasicDiluted
NUMERATOR:    
Net income$29,630 $29,630 $249,607 $249,607 
DENOMINATOR:    
Weighted average shares outstanding - Basic56,868 56,868 61,934 61,934 
Dilutive effect of Equity Plans871  973 
Weighted average shares outstanding - Diluted 57,739  62,907 
EPS:    
Net income per share - Basic$0.52 $0.52 $4.03 $4.03 
Effect of dilutive shares (0.01) (0.06)
Net income per share - Diluted $0.51  $3.97 
Anti-dilutive shares(1)
11
 Three months ended
(in thousands, except per share data)December 30, 2023December 31, 2022
 BasicDilutedBasicDiluted
NUMERATOR:    
Net income$9,293 $9,293 $14,589 $14,589 
DENOMINATOR:    
Weighted average shares outstanding - Basic56,650 56,650 57,051 57,051 
Dilutive effect of Equity Plans373 678 
Weighted average shares outstanding - Diluted 57,023  57,729 
EPS:    
Net income per share - Basic$0.16 $0.16 $0.26 $0.26 
Effect of dilutive shares —  (0.01)
Net income per share - Diluted $0.16  $0.25 
Anti-dilutive shares(1)
251
(1) Represents the Relative TSR PSUs and Growth PSUs that are excluded from the calculation of diluted earnings per share for the three and six months ended April 1,December 30, 2023 and April 2,December 31, 2022 as the effect would have been anti-dilutive.


NOTE 13. INCOME TAXES
The following table reflects the provision for income taxes and the effective tax rate for the three months ended December 30, 2023 and December 31, 2022: 
 Three months ended
(dollar amounts in thousands)December 30, 2023December 31, 2022
Provision for income taxes$2,277 $3,758 
Effective tax rate19.7 %20.5 %
For the three months ended December 30, 2023, the decrease in provision for income taxes and effective tax rate as compared to the prior year period was primarily due to lower profitability and a decrease in global intangible low-taxed income (“GILTI”).
For the three months ended December 30, 2023, the effective tax rate is lower than the U.S. federal statutory tax rate primarily due to foreign income earned in lower tax jurisdictions, tax incentives, and tax credits, partially offset by GILTI.


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Unaudited (continued)

NOTE 14. INCOME TAXES
The following table reflects the provision for income taxes and the effective tax rate for the three and six months ended April 1, 2023 and April 2, 2022: 
 Three months endedSix months ended
(dollar amounts in thousands)April 1, 2023April 2, 2022April 1, 2023April 2, 2022
Provision for income taxes$5,556 $13,713 $9,314 $31,648 
Effective tax rate27.0 %10.6 %23.9 %11.3 %

For the three and six months ended April 1, 2023 as compared to the same periods ended April 2, 2022, the decrease in provision for income taxes is primarily related to a decrease in profitability and the increase in effective tax rate is primarily related to the increase in global intangible low-taxed income (“GILTI”), driven by the capitalization of research and development expenditures as mandated by the U.S. Tax Cuts and Jobs Act of 2017.
For the three and six months ended April 1, 2023, the effective tax rate is higher than the U.S. federal statutory tax rate primarily due to GILTI, partially offset by foreign income earned in lower tax jurisdiction and tax incentives.

NOTE 15.14. SEGMENT INFORMATION
Reportable segments are defined as components of an enterprise that engage in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker (the “CODM”) in deciding how to allocate resources and assess performance. The Company’s Chief Executive Officer is the CODM. The CODM does not review discrete asset information.
As discussed in Note 1, during the third quarter of fiscal year 2023, the Company reconsidered the guidance under ASC 280, Segment Reporting, and determined that certain prior period conclusions about the Company’s operating and reportable segments were erroneous. As a result, the Company had incorrectly presented certain segment-related disclosures in the notes to our previously issued consolidated financial statements, included in our Original Form 10-K.
The Company operates twohas revised the prior period presentation to reflect its four reportable segments consisting of:as follows: (1) Capital Equipment;Ball Bonding Equipment, (2) Wedge Bonding Equipment, (3) Advanced Solutions, and (2)(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.
APS: 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.
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)

The following table reflects operating information by segment for the three and six months ended April 1,December 30, 2023 and April 2,December 31, 2022: 
Three months endedSix months ended
(in thousands)(in thousands)April 1, 2023April 2, 2022April 1, 2023April 2, 2022
(in thousands)
(in thousands)
Net revenue:Net revenue:    
Capital Equipment$133,727 $333,909 $269,099 $742,437 
Net revenue:
Net revenue:
Ball Bonding Equipment
Ball Bonding Equipment
Ball Bonding Equipment
Wedge Bonding Equipment
Wedge Bonding Equipment
Wedge Bonding Equipment
Advanced Solutions
Advanced Solutions
Advanced Solutions
APS APS39,294 50,373 80,155 102,733 
APS
APS
All Others
All Others
All Others
Net revenue
Net revenue
Net revenue Net revenue173,021 384,282 349,254 845,170 
Income from operations:    
Capital Equipment3,318 111,200 7,190 243,219 
Income/(loss) from operations:
Income/(loss) from operations:
Income/(loss) from operations:
Ball Bonding Equipment
Ball Bonding Equipment
Ball Bonding Equipment
Wedge Bonding Equipment
Wedge Bonding Equipment
Wedge Bonding Equipment
Advanced Solutions
Advanced Solutions
Advanced Solutions
APS APS9,311 18,141 17,261 37,232 
APS
APS
All Others
All Others
All Others
Corporate Expenses
Corporate Expenses
Corporate Expenses
Income from operations Income from operations$12,629 $129,341 $24,451 $280,451 
Income from operations
Income from operations
We have consideredconsidered: (1) information that is regularly reviewed by our CODM as defined by the authoritative guidance on segment reporting, in evaluating financial performance;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 net revenue by end markets served infor the Capital Equipment segment.three months ended December 30, 2023 and December 31, 2022: 
 Three months ended
(in thousands)December 30, 2023December 31, 2022
General Semiconductor$70,948 $68,372 
Automotive & Industrial23,521 53,180 
LED5,732 9,193 
Memory29,747 4,627 
APS41,241 40,861 
Total revenue$171,189 $176,233 

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KULICKE AND SOFFA INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)

The following table reflects net revenue by Capital Equipment end markets served for the three and six months ended April 1, 2023 and April 2, 2022: 
 Three months endedSix months ended
(in thousands)April 1, 2023April 2, 2022April 1, 2023April 2, 2022
General Semiconductor$71,064 $198,694 $139,436 $447,217 
Automotive & Industrial
51,455 58,700 104,635 109,348 
LED
5,894 42,036 15,087 108,191 
Memory
5,314 34,479 9,941 77,681 
Total Capital Equipment revenue$133,727 $333,909 $269,099 $742,437 

The following table reflects capital expenditures, depreciation expense and amortization expense for the three and six months ended April 1,December 30, 2023 and April 2,December 31, 2022:
Three months endedSix months ended
(in thousands)(in thousands)April 1, 2023April 2, 2022April 1, 2023April 2, 2022
(in thousands)
(in thousands)
Capital expenditures:Capital expenditures:  
Capital Equipment$14,951 $2,467 $29,050 $4,433 
Capital expenditures:
Capital expenditures:
Ball Bonding Equipment
Ball Bonding Equipment
Ball Bonding Equipment
Wedge Bonding Equipment
Wedge Bonding Equipment
Wedge Bonding Equipment
Advanced Solutions
Advanced Solutions
Advanced Solutions
APS APS2,432 917 3,984 1,827 
$17,383 $3,384 $33,034 $6,260 
APS
APS
All Others
All Others
All Others
Corporate Expenses
Corporate Expenses
Corporate Expenses
$
$
$
Depreciation expense:Depreciation expense:    
Capital Equipment$3,187 $2,256 $5,627 $4,539 
Depreciation expense:
Depreciation expense:
Ball Bonding Equipment
Ball Bonding Equipment
Ball Bonding Equipment
Wedge Bonding Equipment
Wedge Bonding Equipment
Wedge Bonding Equipment
Advanced Solutions
Advanced Solutions
Advanced Solutions
APS APS1,792 1,817 3,571 3,590 
$4,979 $4,073 $9,198 $8,129 
APS
APS
All Others
All Others
All Others
Corporate Expenses
Corporate Expenses
Corporate Expenses
$
$
$
Amortization expense:Amortization expense:
Capital Equipment$1,171 $921 $2,192 $1,933 
Amortization expense:
Amortization expense:
Ball Bonding Equipment
Ball Bonding Equipment
Ball Bonding Equipment
Wedge Bonding Equipment
Wedge Bonding Equipment
Wedge Bonding Equipment
Advanced Solutions
Advanced Solutions
Advanced Solutions
APS APS392 230 765 501 
$1,563 $1,151 $2,957 $2,434 
APS
APS
All Others
All Others
All Others
Corporate Expenses
Corporate Expenses
Corporate Expenses
$
$
$

NOTE 16.15. COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS
Warranty Expense
The Company’s equipment is generally shipped with a one-year warranty against manufacturing defects. The Company establishes reserves for estimated warranty expense when revenue for the related equipment is recognized. The reserve for estimated warranty expense is based upon historical experience and management’s estimate of future warranty costs, including product part replacement, freight charges and related labor costs expected to be incurred in correcting manufacturing defects during the warranty period.
The following table reflects the reserve for warranty activity for the three and six months ended April 1, 2023 and April 2, 2022: 
 Three months endedSix months ended
(in thousands)April 1, 2023April 2, 2022April 1, 2023April 2, 2022
Reserve for warranty, beginning of period$11,421 $17,110 $13,443 $16,961 
Provision for warranty2,882 2,191 4,982 6,159 
Utilization of reserve(3,835)(3,783)(7,957)(7,602)
Reserve for warranty, end of period$10,468 $15,518 $10,468 $15,518 

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KULICKE AND SOFFA INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)

The following table reflects the reserve for warranty activity for the three months ended December 30, 2023 and December 31, 2022: 
 Three months ended
(in thousands)December 30, 2023December 31, 2022
Reserve for warranty, beginning of period$10,457 $13,443 
Provision for warranty2,936 2,100 
Utilization of reserve(3,226)(4,122)
Reserve for warranty, end of period$10,167 $11,421 
Other Commitments and Contingencies
The following table reflects obligations not reflected on the Consolidated Condensed Balance Sheets as of April 1,December 30, 2023:
 Payments due by fiscal year  Payments due by fiscal year
(in thousands)(in thousands)Total20232024202520262027thereafter(in thousands)Total20242025202620272028Thereafter
Inventory purchase obligation (1)
Inventory purchase obligation (1)
$233,697 $54,215 $179,482 $— $— $— $— 
(1)The Company orders inventory components in the normal course of its business. A portion of these orders are non-cancelable and a portion may have varying penalties and charges in the event of cancellation.

From time to time, the Company is party to or the target of lawsuits, claims, investigations and proceedings, including for personal injury, intellectual property, commercial, contract, and employment matters, which are handled and defended in the ordinary course of business. The Company accrues a contingent loss liability for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated. When a single amount cannot be reasonably estimated but the cost can be estimated within a range, the Company accrues the minimum amount. The Company expenses legal costs, including those expected to be incurred in connection with a loss contingency, as incurred.
Unfunded Capital Commitments
As of April 1,December 30, 2023, the Company also has an obligation to fund uncalled capital commitments of approximately $9.6$7.8 million, as and when required, in relation to its investment in a private equity fund.
Concentrations
The following table reflects significant customer concentrations as a percentage of net revenue for the sixthree months ended April 1,December 30, 2023 and April 2,December 31, 2022:
SixThree months ended
April 1,December 30, 2023April 2,December 31, 2022
STMicroelectronics N.V.*12.8 %
First Technology China Ltd.(1)
11.9*11.2 %
Matfron (Shanghai) Semiconductor Technology Co.,Ltd.10.6 %*
* Represents less than 10% of total net revenue
(1) Distributor of the Company’s products

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KULICKE AND SOFFA INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)
The following table reflects significant customer concentrations as a percentage of total accounts receivable as of April 1,December 30, 2023 and April 2,December 31, 2022:
 As of
April 1,December 30, 2023April 2,December 31, 2022
Intel CorporationForehope Electronic (Ningbo) Co., Ltd.14.610.7 %*
Tianshui Huatian Technology Co., Ltd.*23.5 %
Haoseng Industrial Co., Ltd. (1)
*12.415.7 %
(1)Distributor of the Company's products.
* Represents less than 10% of total accounts receivable

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Item 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements
In addition to historical information, this filing contains statements relating to future events or our future results. These statements are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are subject to the safe harbor provisions created by statute. Such forward-looking statements include, but are not limited to, statements with respect to our future revenue increasing, continuing or strengthening, or decreasing or weakening; our capital allocation strategies, including any share repurchases; demand for our products, including replacement demand; our research and development effort; our ability to identify and realize new growth opportunities; our ability to control costs; and our operational flexibility as a result of (among other factors):
our expectations regarding the potential impacts on our business of actual or potential inflationary pressures, interest rate and risk premium adjustments, falling consumer sentiment, or economic recession caused, directly or indirectly, by the ongoing Israel-Hamas war, the prolonged Ukraine/Russia conflict, geopolitical tensions and other macroeconomic factors;
our expectations regarding the potential impacts on our business of the novel coronavirus (“COVID-19”) pandemic, including supply chain disruptions the economic and public health effects, and governmentalcaused, directly or indirectly, by various macroeconomic events, including geopolitical tensions, catastrophic events resulting from climate change or other natural disasters and other responses to these impacts;factors;
our expectations regarding our effective tax rate and our unrecognized tax benefit;
our ability to operate our business in accordance with our business plan;
our ability to adequately protect our trade secrets and intellectual property rights from misappropriation;
our expectations regarding our success in integrating companies we may acquire with our business, and our ability to continue to acquire or divest companies;
risks inherent in doing business on an international level, including currency risks, regulatory requirements, systems and cybersecurity risks, political risks, export restrictions and other trade barriers;
projected growth rates in the overall semiconductor industry, the semiconductor assembly equipment market, and the market for semiconductor packaging materials; and
projected demand for our products and services.services; and
unexpected delays and difficulties in executing against our environmental, climate, diversity and inclusion goals or such other ESG targets and commitments.
Generally, words such as “may,” “will,” “should,” “could,” “anticipate,” “expect,” “intend,” “estimate,” “plan,” “continue,” “goal” and “believe,” or the negative of or other variations on these and other similar expressions identify forward-looking statements. These forward-looking statements are made only as of the date of this filing. We do not undertake to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
Forward-looking statements are based on current expectations and involve risks and uncertainties. Our future results could differ significantly from those expressed or implied by our forward-looking statements. These risks and uncertainties include, without limitation, those described below and in our Annual Report on Form 10-K for the fiscal year ended October 1, 2022September 30, 2023 (our “2022“2023 Annual Report”) and our other reports filed from time to time with the Securities and Exchange Commission. This discussion should be read in conjunction with the Consolidated Condensed Financial Statements and Notes included in this report, as well as our audited financial statements included in our 2023 Annual Report.
We operate in a rapidly changing and competitive environment. New risks emerge from time to time and it is not possible for us to predict all risks that may affect us. Future events and actual results, performance and achievements could differ materially from those set forth in, contemplated by or underlying the forward-looking statements, which speak only as of the date on which they were made. Except as required by law, we assume no obligation to update or revise any forward-looking statement to reflect actual results or changes in, or additions to, the factors affecting such forward-looking statement. Given those risks and uncertainties, investors should not place undue reliance on forward-looking statements as predictions of actual results.

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OVERVIEW
Founded in 1951, Kulicke and Soffa Industries, Inc. (“we,” “us,” “our,” or the “Company”) specializes in developing cutting-edge semiconductor and electronics assembly solutions enabling a smarter and more sustainable future. Our ever-growing range of products and services supports growth and facilitates technology transitions across large-scale markets, such as advanced display, automotive, communications, compute, consumer, data storage, energy storage and industrial.
We design, develop, manufacture and sell capital equipment, consumables and services used to assemble semiconductor and electronic devices, such as integrated circuits, powered discrete,power discretes, light-emitting diode (“LEDs”), advanced displays and sensors. We also service, maintain, repair and upgrade our equipment and sell consumable aftermarket solutions and services for our and our peer companies’ equipment. Our customers primarily consist of semiconductor device manufacturers, integrated device manufacturers (“IDMs”), outsourced semiconductor assembly and test providers (“OSATs”), foundry service providers, and other electronics manufacturers and automotive electronics suppliers.
Our goal is to be the technology leader and the most competitive supplier in terms of cost and performance in each of our major product lines. Accordingly, we invest in research and engineering projects intended to expand our market access and enhance our leadership position as a leader in semiconductor, assembly technology.electronics and display assembly. We also remain focused on enhancing our cost structurevalue to customers through higher productivity systems, more autonomous capabilities and also through continuous improvement and optimization of operations. Cost reduction efforts are anour operational costs. Delivering new levels of value to our customers is a critically important part of our normal ongoing operationsgoal for the Company.
Our Ball Bonding Equipment, Wedge Bonding Equipment and are intended to generate savings without compromising overall product quality and service.
We operate twoAdvanced Solutions reportable segments consisting of Capital Equipment and Aftermarket Products and Services (“APS”). We have aggregated thirteen operating segments as of April 1, 2023, with seven operating segments withinengage in the Capital Equipment reportable segment and six operating segments within the APS reportable segment. During the quarter ended April 1, 2023, we have formed an additional operating segment within the Capital Equipment reportable segment as a result of the acquisition of AJA. Please refer to Note 3 of Item 1 for a discussion on the business combination.
Our Capital Equipment segment engages in thedesign, development, manufacture and sale of ball bonders,bonding equipment, wafer level bonders,bonding equipment, wedge bonders,bonding equipment, certain advanced packaging tools, high precision dispensedisplay, die-attach and thermocompression systems mini and micro LED transfer solutions, hybrid and electronic assembly solutions to semiconductor device manufacturers, IDMs, foundries, OSATs, display manufacturers,foundry service providers, and other electronics manufacturers and automotive electronics suppliers.
Our APS segment engages in the design, development, manufacture and sale of a variety of tools, spares and services for our equipment. For example, we manufacture capillaries, blades, wedge bonder consumables and other spare parts which complements our equipment and to support a broadbroader range of semiconductor packaging applications, spare parts,applications. We also provide equipment repair, post-sale support, maintenance and servicing, training services, refurbishment and upgrades for our equipment.
All other operating segments that 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.
Business Environment
The semiconductor business environment is highly volatile and is driven by internal dynamics, both cyclical and seasonal, in addition to macroeconomic forces. Over the long term, semiconductor consumption has historically grown, and is forecasted to continue to grow. This growth is driven, in part, by regular advances in device performance and by price declines that result from improvements in manufacturing technology. In order to exploit these trends, semiconductor manufacturers, both IDMs and OSATs, periodically invest aggressively in latest generation capital equipment. This buying pattern often leads to periods of excess supply and reduced capital spending—the so-called semiconductor cycle. Within this broad semiconductor cycle there are also, generally weaker, seasonal effects that are specifically tied to annual, end-consumer purchasing patterns. Typically, semiconductor manufacturers prepare for heightened demand by adding or replacing equipment capacity by the end of the September quarter. Occasionally, this results in subsequent reductions in demand during the December quarter. This annual seasonality can be overshadowed by effects of the broader semiconductor cycle. Macroeconomic factors also affect the industry, primarily through their effect on business and consumer demand for electronic devices, as well as other products that have significant electronic content such as automobiles, white goods, and telecommunication equipment. There can be no assurances regarding levels of demand for our products and we believe historic industry-wide volatility will persist.

Our Ball Bonding Equipment, Wedge Bonding Equipment and Advanced Solutions reportable segments, and the remaining operating segments in the
All Others category are primarily affected by the industry’s internal cyclical and seasonal dynamics, in addition to broader macroeconomic factors, all of which can positively or negatively affect our financial performance. The sales mix of IDM and OSAT customers, as well as our end market mix, in any period also impacts our financial results. Different customer types and end markets can affect our products’ average selling prices and gross margins due to differences in features, capabilities, order size, and machine configurations.
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Our APS reportable segment has historically been less volatile than other reportable segments. APS sales are more directly tied to semiconductor unit consumption rather than incremental capacity requirements and/or production capability improvements. 
From time to time, our customers may request that we deliver our products to countries where they own or operate production facilities or to countries where they utilize third-party subcontractors or warehouses as part of their supply chain. For example, customers headquartered in the U.S. may require us to deliver our products to their back-end production facilities in China. Our customer base in the Asia/Pacific region has become more geographically concentrated over time as a result of general economic and industry conditions and trends. Approximately 92.5%89.9% and 94.0%89.1% of our net revenue for the three months ended April 1,December 30, 2023 and April 2,December 31, 2022, respectively, were for shipments to customer locations outside of the U.S., primarily in the Asia/Pacific region. Approximately 32.1%46.2% and 40.8%32.8% of our net revenue for the three months ended April 1,December 30, 2023 and April 2, 2022, respectively, were for shipments to customers headquartered in China.
Similarly, approximately 90.8% and 96.0% of our net revenue for the six months ended April 1, 2023 and April 2, 2022, respectively, were for shipments to customer locations outside of the U.S., primarily in the Asia/Pacific region. Approximately 32.5% and 52.3% of our net revenue for the six months ended April 1, 2023 and April 2,December 31, 2022, respectively, were for shipments to customers headquartered in China.
While our customers are impacted by the current global macroeconomic conditions, those with operations in China, an important manufacturing and supply chain hub, have witnessed a faster decline in demand and, accordingly, a faster decline in product shipments, compared to the rest of the world. The shipments to customers headquartered in China are subject to heightened risks and uncertainties related to the respective policies of the governments of China and the U.S. Furthermore, there is a potential risk of conflict and instability in the relationship between Taiwan and China that could disrupt the operations of our customers and/or suppliers in both Taiwan and China and our manufacturing operations in Taiwan and China.
The U.S. and several other countries have levied tariffs on certain goods and have introduced other trade restrictions which, together with the impact of the COVID-19 pandemic discussed below, has resultedresulting in substantial uncertainties in the semiconductor, LED, memory and automotive markets.
Our Capital Equipment segment is primarily affected by the industry’s internal cyclical and seasonal dynamics in addition to broader macroeconomic factors that can positively or negatively affect our financial performance. The sales mix of IDM and OSAT customers in any period also impacts our financial performance, as changes in this mix can affect our products’ average selling prices and gross margins due to differences in volume purchases and machine configurations required by each customer type.
Our APS segment has historically been less volatile than our Capital Equipment segment. The APS sales are more directly tied to semiconductor unit consumption rather than capacity requirements and production capability improvements. 
We continue to position our business to leverage our research and development leadership and innovation and to focus our efforts on mitigating volatility, improving profitability and ensuring longer-term growth. We remain focused on operational excellence, expanding our product offerings through continuous research and development or acquisitions and managing our business efficiently throughout the business cycles. However, our visibility into future demand is generally limited, forecasting is difficult and we generally experience typical industry seasonality.
To limit potential adverse cyclical, seasonal and macroeconomic effects on our financial position, we have continued our efforts to maintain a strong balance sheet. As of April 1,December 30, 2023, our total cash, cash equivalents and short-term investments were $734.1$709.7 million, a $41.4$49.7 million decrease from the prior fiscal year end. We believe our strong cash position will allowallows us to continue to investinvesting in product development, pursuing non-organic opportunities and pursue non-organic opportunities.
Key Events in Fiscal 2023returning capital to Date
Business Combinations
As part ofinvestors through our corporate strategy, we continually evaluate our portfolio of businessesshare repurchase and may decide to buy or sell businesses or enter into joint ventures or other strategic alliances. On February 22, 2023, we completed the acquisition of Advanced Jet Automation Co., Ltd (“AJA”), including the material businessdividend programs. Please see “Liquidity and assets formerly owned by its affiliate, Samurai Spirit Inc., a leading developer and manufacturer of high-precision micro-dispensing equipment and solutions in Taiwan. The purchase price consisted of $38.1 million in cash paid at closing, of which $4.0 million from the purchase price will be held by us in escrow. This acquisition broadens our 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. As of February 22, 2023, AJA became our wholly-owned subsidiary. Please refer to Note 3―Business CombinationCapital Resources” for additional information related to our acquisition of AJA.


more information.

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Key Events in Fiscal 2024 to Date
Israel - Hamas War
On October 7, 2023, an escalated armed conflict between Israel and the Hamas terrorist organization commenced, leading to a series of extended hostilities along Israel’s border with the Gaza Strip. Since then, the Hezbollah militant group has also increased its hostilities against Israel over its northern region.
Our Company has a manufacturing facility and a business office in Haifa, and our capillaries are manufactured at our facilities in Israel and China.
As of the date of this report, our business and manufacturing operations in Israel have not been impacted and no material damage or utilities interruption has been noted at our Israeli facility. Trade routes remain open, and our suppliers and business partners in Israel remain operational. Furthermore, save for a handful of employees who have been mobilized as members of the Israeli military reserves to active duty, disruption to our workforce has been minimal.
We employ around 70 employees in Israel. The safety and well-being of our employees and their families remain our top priority. Our Company continues to provide support to employees and their families who have been impacted by these events.
Given that the intensity, duration and outcome of the ongoing war is uncertain, any further escalation or other hostilities may result in government-mandated lockdowns and disrupt our business operations. We continue to monitor the situation and remain ready to activate our Business Continuity Plan (“BCP”) if necessary.
Macroeconomic Headwinds
Supply chain disruptions and global shortages in electronic components are generally abating in many jurisdictions. However, the cost of logistics remains high as a result of macroeconomic conditions, and labor shortages persist across layers of the supply chain. Additionally, management is continuing to monitor the ongoing Israel-Hamas war and the prolonged Ukraine/Russia conflict, especially regarding the availability and cost of raw materials that are produced in Middle East and Europe in general. Management is also monitoring for signs of any expansion of economic or supply chain disruptions or broader supply chain inflationary and logistical costs resulting either directly or indirectly from the tensions in the Middle East and between Ukraine and Russia.
During fiscal years 2021 and 2022, semiconductor suppliers rapidly increased production output in response to increases in end-consumer demand. Concerns surrounding supply availability spurred defensive inventory purchases, which led to a heightened demand for our products.
The current macroeconomic conditions and declining consumer sentiment have resulted in significant inventory buildup in the semiconductor industry. Many of our consumers who accumulated our products in the past twoseveral years are reducingcontinue to reduce their order rates as a result of inventory adjustment and shorter lead times. The general reduction in demand within the semiconductor industry may also result in the instability of our key suppliers, as they struggle with oversupply and the rising cost of business.
Due to general inflationary pressures, declining consumer sentiment, and an economic downturn caused, directly or indirectly, by various macroeconomic factors, including the ongoing Israel-Hamas war and the prolonged Ukraine/Russia conflict, the sector is seeing short-term volatility and disruption. However, we believe that the semiconductor industry macroeconomics have not changed and we anticipate that the industry’s long-term growth projections will normalize.
The ongoing Israel-Hamas war and the prolonged Ukraine/Russia conflict hashave had no material impact on our financial condition and operating results in fiscal 20232024 to date. We believe that our existing cash, cash equivalents, short-term investments, existing Facility Agreements, and anticipated cash flows from operations will be sufficient to meet our liquidity and capital requirements, notwithstanding the prolonged, ongoing effects ofIsrael-Hamas war and the COVID-19 pandemic, prolonged Ukraine/Russia conflict and other macroeconomic factors, for at least the next twelve months from the date of filing. However, this is a highly dynamic situation. As the macroeconomic situation remains highly volatile and the geopolitical situation remains uncertain, there is uncertainty surrounding the operations of our manufacturing locations, our business, our expectations regarding future demand or supply conditions, our near- and long-term liquidity and our financial condition. Consequentially, our operating results could deteriorate.
COVID-19 Pandemic
The COVID-19 pandemic and the resulting containment measures have significantly impacted the global economy, disrupted global supply chains, created volatility in equity market valuations, created significant volatility and disruption in financial markets, and significantly increased unemployment levels. While conditions related to the COVID-19 pandemic have generally improved since 2022, the global COVID-19 response remains dynamic. The ongoing effects of the COVID-19 pandemic remain difficult to predict due to various uncertainties, including the potential resurgence of illnesses and the potential emergence of new variants of the virus.
For a description of the risks to our business arising from or relating to the COVID-19 pandemic and general macroeconomic conditions, please see Part I, Item 1A, “Risk Factors” of our 20222023 Annual Report.
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RESULTS OF OPERATIONS
As discussed in Note 1: Basis of Presentation of the Notes to the Consolidated Condensed Financial Statements, the segment-related information within Management's Discussion and Analysis of Financial Condition and Results of Operations for the three months ended December 31, 2022 has been revised to correct certain erroneous conclusions about the Company’s operating and reportable segments during prior periods. Accordingly, the following discussion and related tables on Net Revenue, Gross Profit Margin and Income/(Loss) from Operations will reflect the four reportable segments of (1) Ball Bonding Equipment, (2) Wedge Bonding Equipment, (3) Advanced Solutions, and (4) Aftermarket Product and Services (“APS”) and a separate “All Others” category.
The following tables reflect our income from operations for the three and six months ended April 1,December 30, 2023 and April 2,December 31, 2022:
Three months ended  Three months ended 
(dollar amounts in thousands)(dollar amounts in thousands)April 1, 2023April 2, 2022$ Change% Change(dollar amounts in thousands)December 30, 2023December 31, 2022$ Change% Change
Net revenueNet revenue$173,021 $384,282 $(211,261)(55.0)%Net revenue$171,189 $$176,233 $$(5,044)(2.9)(2.9)%
Cost of salesCost of sales88,929 182,572 (93,643)(51.3)%Cost of sales91,293 87,527 87,527 3,766 3,766 4.3 4.3 %
Gross profitGross profit84,092 201,710 (117,618)(58.3)%Gross profit79,896 88,706 88,706 (8,810)(8,810)(9.9)(9.9)%
Selling, general and administrativeSelling, general and administrative35,464 35,088 376 1.1 %Selling, general and administrative41,393 42,376 42,376 (983)(983)(2.3)(2.3)%
Research and developmentResearch and development35,999 37,281 (1,282)(3.4)%Research and development36,810 34,508 34,508 2,302 2,302 6.7 6.7 %
Operating expensesOperating expenses71,463 72,369 (906)(1.3)%
Operating expenses
Operating expenses78,203 76,884 1,319 1.7 %
Income from operationsIncome from operations$12,629 $129,341 $(116,712)(90.2)%Income from operations$1,693 $$11,822 $$(10,129)(85.7)(85.7)%
 Six months ended  
(dollar amounts in thousands)April 1, 2023April 2, 2022$ Change% Change
Net revenue$349,254 $845,170 $(495,916)(58.7)%
Cost of sales176,456 420,222 (243,766)(58.0)%
Gross profit172,798 424,948 (252,150)(59.3)%
Selling, general and administrative77,840 74,047 3,793 5.1 %
Research and development70,507 70,450 57 0.1 %
Operating expenses148,347 144,497 3,850 2.7 %
Income from operations$24,451 $280,451 $(256,000)(91.3)%
Net Revenue
Our net revenue for the three and six months ended April 1,December 30, 2023 decreased as compared to our net revenue for the three and six months ended April 2,December 31, 2022. The decrease in net revenue is primarily due to lower volume in CapitalWedge Bonding Equipment, Advanced Solutions and APS,All Others and partially offset by the higher volume in Ball Bonding Equipment, as further outlined in the following the tables presented immediately below.
The following tables reflect net revenue by reportable segments for the three and six months ended April 1,December 30, 2023 and April 2,December 31, 2022: 
Three months ended  Three months ended 
(dollar amounts in thousands)(dollar amounts in thousands)April 1, 2023April 2, 2022$ Change% Change(dollar amounts in thousands)December 30, 2023December 31, 2022$ Change% Change
Net Revenue% of total net revenueNet Revenue% of total net revenue
Capital Equipment$133,727 77.3 %$333,909 86.9 %$(200,182)(60.0)%
Net Revenue
Ball Bonding Equipment
Ball Bonding Equipment
Ball Bonding Equipment$86,270 50.4 %$53,649 30.4 %$32,621 60.8 %
Wedge Bonding EquipmentWedge Bonding Equipment23,459 13.7 %54,656 31.0 %$(31,197)(57.1)%
Advanced SolutionsAdvanced Solutions11,324 6.6 %14,707 8.3 %$(3,383)(23.0)%
APSAPS39,294 22.7 %50,373 13.1 %(11,079)(22.0)%APS41,241 24.1 24.1 %40,861 23.2 23.2 %380 0.9 0.9 %
All OthersAll Others8,895 5.2 %12,360 7.1 %(3,465)(28.0)%
Total net revenueTotal net revenue$173,021 100.0 %$384,282 100.0 %$(211,261)(55.0)%Total net revenue$171,189 100.0 100.0 %$176,233 100.0 100.0 %$(5,044)(2.9)(2.9)%
 Six months ended  
(dollar amounts in thousands)April 1, 2023April 2, 2022$ Change% Change
Net Revenue% of total net revenueNet Revenue% of total net revenue
Capital Equipment$269,099 77.0 %$742,437 87.8 %$(473,338)(63.8)%
APS80,155 23.0 %102,733 12.2 %(22,578)(22.0)%
Total net revenue$349,254 100.0 %$845,170 100.0 %$(495,916)(58.7)%


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CapitalBall Bonding Equipment
For the three and six months ended April 1,December 30, 2023, the decreaseincrease in CapitalBall Bonding Equipment net revenue as compared to the prior year period was primarily due to higher volumes of customer purchases related to technology transitions and improving market conditions in general semiconductor and memory end markets. This has resulted in the reduction in semiconductor supply chain inventory levels and improved factory utilization levels.
Wedge Bonding Equipment
For the three months ended December 30, 2023, the decrease in Wedge Bonding Equipment net revenue as compared to the prior year period was primarily due to lower volume of customer purchases primarily in the general semiconductor, LED and memory markets. TheGeneral Semiconductor market due to the lower volume in these end markets was a result of uncertaintiespower discrete devices demand, as well as in the overall macroeconomic environment, leading to a decline in consumerautomotive and industrial purchases. This is exacerbated by the high semiconductor supply chain inventories, which contributed to a low utilization of our equipment at our customers, resulting in less demand for our products. The lower volume was partially offset by favorable price variance due to a shift in customer mix (higher sales to customers where we achieve higher average margins).renewable energy market.
APSAdvanced Solutions
For the three and six months ended April 1,December 30, 2023, the decrease in APSAdvanced Solutions net revenue as compared to the prior year period was primarily due to timing of revenue recognition for certain customer contracts.
All Others
For the three months ended December 30, 2023, the decrease in All Others net revenue as compared to the prior year period was primarily due to lower volume of customer purchases primarily in spares and services, as well as a slight decrease in bonding tools. The lower volume was also due to a low utilization of our equipment resultingmini LED transfer solutions from the decline in consumer and industrial purchases and high semiconductor supply chain inventories, primarilysoftness in the general semiconductor end market, by an estimated 20% compared to the prior period.advanced display market.
Gross Profit Margin

The following tables reflect gross profit margin as a percentage of net revenue by reportable segments for the three and six months ended April 1,December 30, 2023 and April 2,December 31, 2022: 
Three months endedBasis Point
April 1, 2023April 2, 2022Change
Capital Equipment46.0 %51.2 %(520)
Three months endedBasis Point
December 30, 2023December 31, 2022Change
Ball Bonding Equipment
Wedge Bonding Equipment
Advanced Solutions
APSAPS57.6 %61.2 %(360)
All Others
Total gross profit marginTotal gross profit margin48.6 %52.5 %(390)
 Six months endedBasis Point
 April 1, 2023April 2, 2022Change
Capital Equipment47.4 %48.8 %(140)
APS56.4 %60.8 %(440)
Total gross profit margin49.5 %50.3 %(80)
CapitalBall Bonding Equipment
For the three and six months ended April 1,December 30, 2023, the decrease in CapitalBall Bonding Equipment gross profit margin as compared to the prior year period was primarily driven by a shift in customer mix, including higher sales to customers where we achieve lower volume of customer purchases resulting from uncertaintiesaverage margins.
Wedge Bonding Equipment
For the three months ended December 30, 2023, the increase in Wedge Bonding Equipment gross profit margin as compared to the overall macroeconomic environment and high semiconductor supply chain inventories and lessprior year period was primarily driven by favorable product mix, (lowerincluding higher sales of higher margin products) from ball bonders and mini and micro LED transfer solutions.products.
APSAdvanced Solutions
For the three and six months ended April 1,December 30, 2023, the decrease in APSAdvanced Solutions gross profit margin as compared to the prior year period was primarily driven by less favorable product mix, among the spares, services and bonding tools, andincluding higher sales of lower average selling prices of bonding tools.margin products.



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All others
For the three months ended December 30, 2023, the decrease in gross profit margin for the “All Others” category as compared to the prior year period was primarily driven by less favorable product mix, including lower sales of higher margin products.
Operating Expenses
The following tables reflect operating expenses for the three and six months ended April 1,December 30, 2023 and April 2,December 31, 2022:
Three months ended
(dollar amounts in thousands)
(dollar amounts in thousands)
(dollar amounts in thousands) (dollar amounts in thousands)April 1, 2023April 2, 2022$ Change% ChangeDecember 30, 2023December 31, 2022$ Change% Change
Selling, general & administrativeSelling, general & administrative$35,464 $35,088 $376 1.1 %Selling, general & administrative$41,393 $$42,376 $$(983)(2.3)(2.3)%
Research & developmentResearch & development35,999 37,281 (1,282)(3.4)%Research & development36,810 34,508 34,508 2,302 2,302 6.7 6.7 %
TotalTotal$71,463 $72,369 $(906)(1.3)%
Total
Total$78,203 $76,884 $1,319 1.7 %
 Six months ended
(dollar amounts in thousands)April 1, 2023April 2, 2022$ Change% Change
Selling, general & administrative$77,840 $74,047 $3,793 5.1 %
Research & development70,507 70,450 57 0.1 %
Total$148,347 $144,497 $3,850 2.7 %
Selling, General and Administrative (“SG&A”)
For the three months ended April 1,December 30, 2023, the increase inlower SG&A expenses as compared to the prior year period waswere primarily due to $0.7$5.1 million net favorable variance in foreign exchange. This was partially offset by $2.9 million higher staff costs relateddue to an increase in headcount and $0.4 million lower wage related incentives received from the Singapore Government. This was partially offset by a $0.7 million gain on a partial disposal of investment.
For the six months ended April 1, 2023, the increase in SG&A expenses as compared to the prior year period was primarily due to $7.6 million in net unfavorable variance in foreign exchange, a $0.9 million increase in professional services, an increase of $0.8 million in severance andequity compensation, $0.7 million higher facilities startup expenses, offset bysales representative commissions and $0.4 million in wage related incentives received from the Singapore Government. These were further offset by a decrease of $6.8 million in sales representative commissions.higher professional services.
Research and Development (“R&D”)
For the three months ended April 1,December 30, 2023, the decrease inhigher R&D expenses as compared to the prior year period was primarily due to $1.0$2.3 million decreasehigher staff costs related to an increase in engineering services, prototype materials, toolingsheadcount and freight.equity compensation.
IncomeIncome/(Loss) from Operations
The following tables reflect incomeincome/(loss) from operations by reportable segments for the three and six months ended April 1,December 30, 2023 and April 2,December 31, 2022:
Three months ended  Three months ended 
(dollar amounts in thousands)(dollar amounts in thousands)April 1, 2023April 2, 2022$ Change% Change(dollar amounts in thousands)December 30, 2023December 31, 2022$ Change% Change
Capital Equipment$3,318 $111,200 $(107,882)(97.0)%
Ball Bonding EquipmentBall Bonding Equipment$27,714 $17,059 $10,655 62.5 %
Wedge Bonding EquipmentWedge Bonding Equipment4,294 19,427 (15,133)(77.9)%
Advanced SolutionsAdvanced Solutions(13,435)(10,735)(2,700)(25.2)%
APSAPS9,311 18,141 (8,830)(48.7)%APS12,246 11,295 11,295 951 951 8.4 8.4 %
All OthersAll Others(8,074)(4,463)(3,611)(80.9)%
Corporate ExpensesCorporate Expenses(21,052)(20,761)(291)(1.4)%
Total income from operationsTotal income from operations$12,629 $129,341 $(116,712)(90.2)%Total income from operations$1,693 $$11,822 $$(10,129)(85.7)(85.7)%
 Six months ended  
(dollar amounts in thousands)April 1, 2023April 2, 2022$ Change% Change
Capital Equipment$7,190 $243,219 $(236,029)(97.0)%
APS17,261 37,232 (19,971)(53.6)%
Total income from operations$24,451 $280,451 $(256,000)(91.3)%

CapitalBall Bonding Equipment, Wedge Bonding Equipment, Advanced Solutions, APS and APSAll Others
For the three and six months ended April 1,December 30, 2023, the decrease in Capitallower Wedge Bonding Equipment and APS income from operations as compared to the prior year period was primarily due to the changesdecrease in revenue and changes in operating expenses as explained under “Net Revenue” and “Operating Expenses” above.
For the three months ended December 30, 2023, the higher Advanced Solutions and All Others loss from operations as compared to the prior year period was primarily due to the decrease in revenue and changes in operating expenses as explained under “Net Revenue” and “Operating Expenses” above.
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For the three months ended December 30, 2023, the higher Ball Bonding Equipment and APS income from operations as compared to the prior year period was primarily due to the increase in revenue and changes in operating expenses as explained under “Net Revenue” and “Operating Expenses” above.
Interest Income and Expense
The following tables reflect interest income and interest expense for the three and six months ended April 1,December 30, 2023 and April 2,December 31, 2022: 
Three months ended  Three months ended 
(dollar amounts in thousands)(dollar amounts in thousands)April 1, 2023April 2, 2022$ Change% Change(dollar amounts in thousands)December 30, 2023December 31, 2022$ Change% Change
Interest incomeInterest income$8,000 $470 $7,530 1,602.1 %Interest income$9,899 $$6,559 $$3,340 50.9 50.9 %
Interest expenseInterest expense$(32)$(97)$65 (67.0)%Interest expense$(22)$$(34)$$12 35.3 35.3 %
 Six months ended  
(dollar amounts in thousands)April 1, 2023April 2, 2022$ Change% Change
Interest income$14,559 $941 $13,618 1,447.2 %
Interest expense$(66)$(137)$71 (51.8)%

Interest income
For the three and six months ended April 1,December 30, 2023, interest income increased as compared to the prior year period primarily due to a higher average balance in short-term investments and higher weighted average interest rate on cash, cash equivalents and short-term investments.
Provision for Income Taxes
The following table reflects the provision for income taxes and the effective tax rate for the three and six months ended April 1,December 30, 2023 and April 2,December 31, 2022: 
Three months endedSix months ended
(dollar amounts in thousands)(dollar amounts in thousands)April 1, 2023April 2, 2022ChangeApril 1, 2023April 2, 2022Change
(dollar amounts in thousands)
(dollar amounts in thousands)
Provision for income taxes
Provision for income taxes
Provision for income taxesProvision for income taxes$5,556 $13,713 $(8,157)$9,314 $31,648 $(22,334)
Effective tax rateEffective tax rate27.0 %10.6 %16.4 %23.9 %11.3 %12.6 %
Effective tax rate
Effective tax rate
For the three months ended April 1,December 30, 2023, as compared to the same period ended April 2, 2022, the decrease in provision for income taxes is primarily related to a decrease in profitability and the increase in effective tax rate is primarily related to the impact of mandatory capitalization of R&D expenditures to GILTI.
For the six months ended April 1, 2023, as compared to the sameprior year period ended April 2, 2022, the decrease in provision for income taxes iswas primarily related to lower profitability and a decrease in profitability and the increase in effective tax rate is higher than the U.S. federal statutory tax rate primarily due to GILTI, partially offset by foreign income earned in lower tax jurisdictions and tax incentives.GILTI.

LIQUIDITY AND CAPITAL RESOURCES
The following table reflects total cash, cash equivalents, and short-term investments as of April 1,December 30, 2023 and October 1, 2022:September 30, 2023:
 As of 
(dollar amounts in thousands)April 1, 2023October 1, 2022$ Change
Cash and cash equivalents$389,102$555,537$(166,435)
Short-term investments345,000220,000125,000 
Total cash, cash equivalents, and short-term investments$734,102$775,537$(41,435)
Percentage of total assets48.2%48.8% 

 As of 
(dollar amounts in thousands)December 30, 2023September 30, 2023$ Change
Cash and cash equivalents$424,660$529,402$(104,742)
Short-term investments285,000230,00055,000 
Total cash, cash equivalents, and short-term investments$709,660$759,402$(49,742)
Percentage of total assets47.7%50.6% 

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The following table reflects a summary of the Consolidated Condensed Statements of Cash Flow information for the sixthree months ended April 1,December 30, 2023 and April 2,December 31, 2022:
Six months ended Three months ended
(in thousands)(in thousands)April 1, 2023April 2, 2022(in thousands)December 30, 2023December 31, 2022
Net cash provided by operating activities$86,936 $169,009 
Net cash (used in)/provided by investing activities(186,197)141,461 
Net cash (used in)/provided by operating activities
Net cash used in investing activities
Net cash used in financing activitiesNet cash used in financing activities(72,911)(211,064)
Effect of exchange rate changes on cash and cash equivalentsEffect of exchange rate changes on cash and cash equivalents5,737 (1,741)
Changes in cash and cash equivalentsChanges in cash and cash equivalents$(166,435)$97,665 
Cash and cash equivalents, beginning of periodCash and cash equivalents, beginning of period555,537 362,788 
Cash and cash equivalents, end of periodCash and cash equivalents, end of period$389,102 $460,453 
SixThree months ended April 1,December 30, 2023
Net cash used in operating activities was primarily due to net income of $9.3 million, non-cash adjustments to net income of $20.4 million and a net unfavourable change in operating assets and liabilities of $37.0 million. The net change in operating assets and liabilities was primarily driven by a increase in accounts and other receivable of $25.6 million, an increase in inventories of $22.1 million and a decrease in accounts payable and accrued expenses and other current liabilities of $0.8 million. This was partially offset by an decrease in prepaid expenses and other current assets of $7.5 million and an increase income tax payable of $2.4 million.
The increase in accounts and other receivable in the three months ended December 30, 2023 was mainly due to the timing of payments due. The increase in inventories was due to the buildup of long lead time materials to fulfill certain customer purchase orders. The decrease in accounts payable and accrued expenses and other current liabilities was primarily due to lower accrued employee compensation that was paid out in the period, partially offset by higher material purchases during the period. The decrease in prepaid expenses was mainly due the transfer of contract assets to net account receivables.
Net cash used in investing activities was due to net purchase of short-term investments of $55.0 million, capital expenditures of $4.4 million and investment in private equity fund of $1.1 million.
Net cash used in financing activities was primarily due to common stock repurchases of $27.2 million and dividend payments of $10.7 million.
Three months ended December 31, 2022
Net cash provided by operating activities was primarily due to net income of $29.6$14.6 million, non-cash adjustments to net income of $21.9$13.5 million and a net favorable change in operating assets and liabilities of $35.4$57.0 million. The net change in operating assets and liabilities was primarily driven by a decrease in accounts and other receivable of $141.6$108.8 million, prepaid expenses and other current assets of $2.1$0.3 million, and income tax payable of $5.7 million. This was partially offset by an increase in inventories of $39.1 million, a decrease in accounts payable and accrued expenses and other current liabilities of $41.3 million and income tax payable of $30.7 million.
The decrease in accounts and other receivable in the six months ended April 1, 2023 was mainly due to lower sales in the period. The decrease in income tax payable was primarily due to lower profitability. The decrease in accounts payable and accrued expenses and other current liabilities was primarily due to higher payments to suppliers, lower material purchases and lower accrued employee compensation that was paid out in the period. The increase in inventories was due to slower utilization in the period and build up of long lead time materials to fulfill certain customer purchase orders.
Net cash used in investing activities was due to net purchase of short-term investments of $125.0 million, cash outflow for the AJA acquisition of $36.9 million and capital expenditures of $24.5 million.
Net cash used in financing activities was primarily due to common stock repurchases of $52.0 million and dividend payments of $20.5 million.
Six months ended April 2, 2022
Net cash provided by operating activities was primarily due to net income of $249.6 million, non-cash adjustments to net income of $22.3 million and a net unfavorable change in operating assets and liabilities of $102.9 million. The net change in operating assets and liabilities was primarily driven by an increase in inventories of $44.4 million, prepaid expenses and other current assets of $27.2 million and a decrease in accounts payable and accrued expenses and other current liabilities of $81.3 million and income tax payable of $4.0$32.8 million. This was partially offset by a
The decrease in accounts and other receivable of $53.4 million.
The increase in inventories was due to higher manufacturing activities in anticipation of higher demand in subsequent periods. The increase in prepaid expenses and other current assetsthe three months ended December 31, 2022 was mainly due to the addition of contract assetslower sales in the period. The decrease in accounts payable and accrued expenses and other current liabilities was primarily due to higher payments to suppliers and lower accrued employee compensation that was paid out in the period. The decreaseincrease in accounts and other receivableinventories was due to slower utilization in the six months ended April 2, 2022 was mainly due to lower sales in the period and a change in customer mix of different credit terms.period.
Net cash provided byused in investing activities was due to net redemptionpurchase of short-term investments of $147.0 million. This was partially offset by$25.0 million and capital expenditures of $5.7$13.9 million.
Net cash used in financing activities was primarily due to common stock repurchases of $191.5$46.3 million and dividend payments of $19.3$9.7 million.

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Fiscal 20232024 Liquidity and Capital Resource Outlook
We expect our aggregate fiscal 20232024 capital expenditures to be between approximately $53.0$23.0 million and $57.0$27.0 million, of which approximately $33.0$3.5 million has been incurred through the secondfirst quarter. Expenditures are anticipated to be primarily for research and development projects, enhancements to our manufacturing operations, improvements to our information technology security, implementation of an enterprise resource planning system and leasehold improvements for our facilities. Our ability to make these expenditures will depend, in part, on our future cash flows, which are determined by our future operating performance and, therefore, subject to prevailing macroeconomic conditions, including the impact from the prolonged ongoing effects of the COVID-19 pandemic, actual or potential inflationary pressures, supply chain challenges, geopolitical tensions including the ongoing Israel-Hamas war and the prolonged Ukraine/Russia conflict and other factors, some of which are beyond our control.
As of April 1,December 30, 2023 and October 1, 2022,September 30, 2023, approximately $553.6$558.7 million and $499.8$576.9 million of cash, cash equivalents, and short-term investments, respectively, were held by the Company’s foreign subsidiaries, with a large portion of the cash amounts expected to be available for use in the U.S. without incurring additional U.S. income tax.
The Company’s operations and capital requirements are anticipated to be funded primarily by cash on hand, cash generated from operating activities, and cash from our existing Facility Agreements. We believe these sources of cash and liquidity are sufficient to meet our additional liquidity needs for the foreseeable future, including repayment of outstanding balances under the Facility Agreements, as well as payment of dividends, share repurchases and income taxes.
We believe that our existing cash, cash equivalents, short-term investments, existing Facility Agreements, and anticipated cash flows from operations will be sufficient to meet our liquidity and capital requirements, notwithstanding the prolonged effect of COVID-19 pandemic and macroeconomic headwinds, for at least the next twelve months and beyond. Our liquidity is affected by many factors, some based on normal operations of our business and others related to macroeconomic conditions including actual or potential inflationary pressures, industry-related uncertainties, and effects arising from the ongoing Israel-Hamas war and the prolonged Ukraine/Russia conflict, which we cannot predict. We also cannot predict economic conditions or industry downturns or the timing, strength or duration of recoveries. We intend to continue to use our cash for working capital needs and for general corporate purposes.
In this unprecedented macroeconomic environment, as a result of the ongoing effects of the COVID-19 pandemic, the prolonged Ukraine/Russia conflict or for other reasons, we may seek, as we believe appropriate, additional debt or equity financing that would provide capital for general corporate purposes, working capital funding, additional liquidity needs or to fund future growth opportunities, including possible acquisitions. The timing and amount of potential capital requirements cannot be determined at this time and will depend on a number of factors, including the actual and projected demand for our products, semiconductor and semiconductor capital equipment industry conditions, competitive factors, the condition of financial markets and the global economic situation.
Share Repurchase Program
On August 15, 2017, the Company’s Board of Directors authorized a program (the “Program”) to repurchase up to $100 million of the Company’s common stock on or before August 1, 2020. In 2018, 2019 and 2020, the Board of Directors increased the share repurchase authorization under the Program to $200 million, $300 million, and $400 million, respectively. On March 3, 2022, the Board of Directors further increased the share repurchase authorization under the Program by an additional $400 million to $800 million, and extended its duration through August 1, 2025. TheOn November 17, 2023, the Company has entered into amodified its written trading plan under Rule 10b5-1 of the Exchange Act, such plan as first entered into on May 7, 2022 to facilitate repurchases under the Program. The purpose of the modification was to revise the previously established amounts and prices under the plan by providing for the purchase of up to approximately $169 million of the Company’s common stock from November 20, 2023 through August 1, 2025. The Program may be suspended or discontinued at any time and is funded using the Company’s available cash, cash equivalents and short-term investments. Under the Program, shares may be repurchased through open market and/or privately negotiated transactions at prices deemed appropriate by management. The timing and amount of repurchase transactions under the Program depend on market conditions as well as corporate and regulatory considerations.


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During the three and six months ended April 1,December 30, 2023, the Company repurchased a total of approximately 101.9 thousand and 1,156.2555.6 thousand shares of common stock under the Program at a cost of approximately $5.0 million and $50.4 million, respectively.$26.8 million. The stock repurchases were recorded in the periods in which the shares were delivered and accounted for as treasury stock in the Company’s Consolidated Condensed Balance Sheets. The Company records treasury stock purchases under the cost method using the first-in, first-out (FIFO) method. Upon re-issuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid-in capital.
If the Company reissues treasury stock at an amount below its acquisition cost and additional paid-in capital associated with prior treasury stock transactions is insufficient to cover the difference between acquisition cost and the reissue price, this difference is recorded against retained earnings.
As of April 1,December 30, 2023, our remaining stock repurchase authorization under the Program was approximately $198.8$154.2 million.
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Dividends
On November 16, 2022,15, 2023, the Board of Directors declared a quarterly dividend of $0.19$0.20 per share of common stock. Dividends paid during the three and six months ended April 1,December 30, 2023 totaled $10.8 million and $20.5 million, respectively.$10.7 million. The declaration of any future cash dividend is at the discretion of the Board of Directors and will depend on the Company’s financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination that such dividends are in the best interests of the Company’s shareholders.
Other Obligations and Contingent Payments
In accordance with U.S. GAAP, certain obligations and commitments are not required to be included in the Consolidated Condensed Balance Sheets and Statements of Operations. These obligations and commitments, while entered into in the normal course of business, may have a material impact on our liquidity and are disclosed in the table below.
As of April 1,December 30, 2023, the Company had deferred tax liabilities of $36.2$37.2 million and unrecognized tax benefits within the income taxes payable for uncertain tax positions of $17.5$18.1 million, inclusive of accrued interest on uncertain tax positions of $2.4$3.1 million, substantially all of which would affect our effective tax rate in the future, if recognized.
It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain unrecognized tax positions will increase or decrease during the next 12twelve 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 timing or financial outcomes of these examinations and, therefore, these amounts are excluded from the amounts below. When estimating its tax positions, the Company considers and evaluates numerous complex areas of taxation, which may require periodic adjustments and which may not reflect the final tax liabilities.
The following table presents certain payments due by the Company under contractual and statutory obligations with minimum firm commitments as of April 1,December 30, 2023:
 Payments due in  Payments due in
(in thousands)(in thousands)TotalLess than 1 year1 - 3 years3 - 5 yearsMore than 5 years(in thousands)TotalLess than 1 year1 - 3 years3 - 5 yearsMore than 5 years
Inventory purchase obligations (1)
Inventory purchase obligations (1)
$233,697 $54,215 $179,482 $— $— 
U.S. one-time transition tax payable (2)
(reflected on our Consolidated Condensed Balance Sheets)
U.S. one-time transition tax payable (2)
(reflected on our Consolidated Condensed Balance Sheets)
$47,686 12,606 35,080 — — 
U.S. one-time transition tax payable (2)
(reflected on our Consolidated Condensed Balance Sheets)
U.S. one-time transition tax payable (2)
(reflected on our Consolidated Condensed Balance Sheets)
TotalTotal$281,383 $66,821 $214,562 $— $— 
Total
Total
(1)The Company orders inventory components in the normal course of its business. A portion of these orders are non-cancellable and some orders impose varying penalties and charges in the event of cancellation.
(2)Associated with the U.S. one-time transition tax on certain earnings and profits of our foreign subsidiaries in relation to the U.S. Tax Cuts and Job Act of 2017.


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Credit facilities
On February 15, 2019, the Company entered into a Facility Letter and Overdraft Agreement (collectively, the “Facility Agreements”) with MUFG Bank, Ltd., Singapore Branch (the “Bank”). The Facility Agreements provide the Company and one of its subsidiaries with an overdraft facility of up to $150.0 million (the “Overdraft Facility”) for general corporate purposes. Amounts outstanding under the Overdraft Facility, including interest, are payable upon thirty days written demand by the Bank. Interest on the Overdraft Facility is calculated on a daily basis, and the applicable interest rate is calculated at the Secured Overnight Financing Rate (“SOFR”) plus a margin of 1.5% per annum. The Overdraft Facility is an unsecured facility per the terms of the Facility Agreements. The Facility Agreements contain customary non-financial covenants, including, without limitation, covenants that restrict the Company’s ability to sell or dispose of its assets, cease owning at least 51% of two of its subsidiaries (the “Subsidiaries”) or encumber its assets with material security interests (including any pledge of monies in the Subsidiaries’ cash deposit account with the Bank). The Facility Agreements also contain typical events of default, including, without limitation, non-payment of financial obligations when due, cross defaults to other material indebtedness of the Company, and breach of a representation or warranty under the Facility Agreements. As of April 1,December 30, 2023, there were no outstanding amounts under the Overdraft Facility.
As of April 1,December 30, 2023, other than the bank guarantee disclosed in Note 109 of Item 1, we did not have any other off-balance sheet arrangements, such as contingent interests or obligations associated with variable interest entities.
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Item 3. - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk
Our available-for-sale securities, if applicable, may consist of short-term investments in highly rated debt instruments of the U.S. Government and its agencies, financial institutions, and corporations. We continually monitor our exposure to changes in interest rates and credit ratings of issuers with respect to any available-for-sale securities and target an average life to maturity of less than 18 months. Accordingly, we believe that the effects on us of changes in interest rates and credit ratings of issuers are limited and would not have a material impact on our financial condition or results of operations.
Foreign Currency Risk
Our international operations are exposed to changes in foreign currency exchange rates due to transactions denominated in currencies other than the location’s functional currency. Our international operations are also exposed to foreign currency fluctuations that impact the remeasurement of net monetary assets of those operations whose functional currency, the U.S. dollar, differs from their respective local currencies, most notably in Israel, Singapore and Switzerland. Our U.S. operations also have foreign currency exposure due to net monetary assets denominated in currencies other than the U.S. dollar. In addition to net monetary remeasurement, we have exposures related to the translation of subsidiary financial statements from their functional currency, the local currency, into its reporting currency, the U.S. dollar, most notably in the Netherlands, China, Taiwan, Japan and Germany.
Based on our foreign currency exposure as of April 1,December 30, 2023, a 10.0% fluctuation could impact our financial position, results of operations or cash flows by $4.0$3.0 million to $5.0$4.0 million. Our attempts to hedge against these risks may not be successful and may result in a material adverse impact on our financial results and cash flow.
We enter into foreign exchange forward contracts to hedge a portion of our forecasted foreign currency-denominated expenses in the normal course of business and, accordingly, they are not speculative in nature. These instruments generally mature within twelve months. We have foreign exchange forward contracts with a notional amount of $59.9$42.7 million outstanding as of April 1,December 30, 2023.
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Item 4. - CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of April 1,December 30, 2023. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of April 1,December 30, 2023 our disclosure controls and procedures were effective in providing reasonable assurance that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 as amended, is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission'sSEC's rules and forms; and (ii) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding disclosure.
Changes in Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) and 15d-15(f) of the Securities Exchange Act Rule 13a-15(f).of 1934, as amended. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.
We completed the acquisition of AJA on February 22, 2023, as discussed in Note 3―Business Combination of the Notes to the Consolidated Condensed Financial Statements. Although existing event driven controls were followed related to the business combination accounting for the acquisition of AJA, management intends to exclude AJA from its assessment of the Company’s internal control over financial reporting for the fiscal year ending September 30, 2023. This exclusion would be in accordance with the SEC’s general guidance that an assessment of a recently acquired business may be omitted from our scope in the first fiscal year in which the acquisition occurred.
In connection with the evaluation by our management, including with the participation of our Chief Executive Officer and Chief Financial Officer, of our internal control over financial reporting, no changes during the three months ended April 1,December 30, 2023 were identified to have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. - OTHER INFORMATION 
Item 1. - LEGAL PROCEEDINGS
From time to time, we may be a plaintiff or defendant in cases arising out of our business. We are party to ordinary, routine litigation incidental to our business. We cannot be assured of the results of any pending or future litigation, but we do not believe resolution of any currently pending matters will have a material adverse effect on our business, financial condition or operating results.

Item 1A. - RISK FACTORS
Certain Risks Related to Our Business
There have been no material changes from the risk factors discussed in Part I, Item 1A, “Risk Factors”, of our 20222023 Annual Report on Form 10-K.Report.

Item 2. - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
The following table summarizes the repurchases of common stock during the three months ended April 1,December 30, 2023 (in millions, except number of shares, which are reflected in thousands, and per share amounts):
PeriodTotal Number of Shares PurchasedAverage Price Paid Per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs(1)
January 1, 2023 to January 28, 202366 $47.01 66 $200.7 
January 29, 2023 to March 4, 202314 $53.19 14 $199.9 
March 5, 2023 to April 1, 202322 $52.14 22 $198.8 
For the three months ended April 1, 2023102 102 
PeriodTotal Number of Shares PurchasedAverage Price Paid Per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs(1)
October 1, 2023 to October 28, 2023154 $45.37 154 $174.1 
October 29, 2023 to December 2, 2023285 $48.21 285 $160.3 
December 3, 2023 to December 30, 2023116 $52.47 116 $154.2 
For the three months ended December 30, 2023555 555 
(1)On August 15, 2017, the Company’s Board of Directors authorized the Program to repurchase up to $100 million in total of the Company’s common stock on or before August 1, 2020. In 2018, 2019 and 2020, the Board of Directors increased the share repurchase authorization under the Program to $200 million, $300 million and $400 million, respectively. On MayMarch 3, 2022, the Board of Directors further increased the share repurchase authorization under the Company’s existing share repurchase program by an additional $400 million to $800 million, and extended its duration through August 1, 2025. The Company may repurchase shares of its common stock through open market and privately negotiated transactions at prices deemed appropriate by management. TheOn November 17, 2023, the Company has entered into amodified its written trading plan under Rule 10b5-1 of the Exchange Act, such plan as first entered into on May 7, 2022 to facilitate repurchases under the Program. The purpose of the modification was to revise the previously established amounts and prices under the plan by providing for the purchase of up to approximately $169 million of the Company’s common stock from November 20, 2023 through August 1, 2025. The Program may be suspended or discontinued at any time and will be funded using the Company’s available cash, cash equivalents and short-term investments. Under the Program, shares may be repurchased through open market and/or privately negotiated transactions at prices deemed appropriate by management. The timing and amount of repurchase transactions under the Program depend on market conditions as well as corporate and regulatory considerations.


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Item 3. – Defaults Upon Senior Securities.

None.

Item 4. – Mine Safety Disclosures

None.

Item 5. – Other Information
Director and Officer Trading Plans and Arrangements
None of the Company’s directors or officers have adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended December 30, 2023, as such terms are defined under Item 408(a) of Regulation S-K.
Issuer Trading Plans and Arrangements
On November 17, 2023, the Company modified its written trading plan under Rule 10b5-1 of the Exchange Act, such plan as first entered into on May 7, 2022 to facilitate repurchases under the Program. The purpose of the modification was to revise the previously established amounts and prices under the plan by providing for the purchase of up to approximately $169 million of the Company’s common stock from November 20, 2023 through August 1, 2025.
The above trading plan of the Company is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act.

None.
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Item 6. -     Exhibits
  
Exhibit No.Description
3.1
3.2
31.1
  
31.2
  
32.1*
  
32.2*
  
101.INS Inline XBRL Instance Document.
   
101.SCH Inline XBRL Taxonomy Extension Schema Document.
   
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document.
   
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document.
   
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document.
   
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101.INS).
*This exhibit shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act or the Exchange Act.
 
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SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 KULICKE AND SOFFA INDUSTRIES, INC.
  
Date: May 4, 2023February 1, 2024By:/s/ LESTER WONG
Lester Wong
Executive Vice President and Chief Financial Officer
(principal financial officer and principal accounting officer)

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