DOCUMENT_AND_ENTITY_INFORMATIO
DOCUMENT AND ENTITY INFORMATION | 3 Months Ended | |
Dec. 27, 2014 | Jan. 23, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | KULICKE & SOFFA INDUSTRIES INC | |
Entity Central Index Key | 56978 | |
Current Fiscal Year End Date | 7 | |
Entity Filer Category | Large Accelerated Filer | |
Trading Symbol | klic | |
Entity Common Stock, Shares Outstanding | 76,771,266 | |
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 27-Dec-14 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2015 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 27, 2014 | Sep. 27, 2014 | ||
In Thousands, unless otherwise specified | ||||
Current assets: | ||||
Cash and cash equivalents | $622,590 | $587,981 | ||
Short-term investments | 10,787 | [1] | 9,105 | [1] |
Accounts and notes receivable, net of allowance for doubtful accounts of $0 and $143 respectively | 121,854 | 171,530 | ||
Inventories, net | 51,930 | 49,694 | ||
Prepaid expenses and other current assets | 11,143 | 15,090 | ||
Deferred income taxes | 4,245 | 4,291 | ||
Total current assets | 822,549 | 837,691 | ||
Property, plant and equipment, net | 52,793 | 52,755 | ||
Goodwill | 41,546 | 41,546 | ||
Intangible assets | 4,562 | 5,891 | ||
Other assets | 6,392 | 6,565 | ||
TOTAL ASSETS | 927,842 | 944,448 | ||
Current liabilities: | ||||
Accounts payable | 27,425 | 35,132 | ||
Accrued expenses and other current liabilities | 32,544 | 43,731 | ||
Income taxes payable | 2,682 | 2,488 | ||
Total current liabilities | 62,651 | 81,351 | ||
Financing obligation | 18,261 | 19,102 | ||
Deferred income taxes | 45,261 | 44,963 | ||
Other liabilities | 9,666 | 9,790 | ||
TOTAL LIABILITIES | 135,839 | 155,206 | ||
Commitments and contingent liabilities (Note 12) | ||||
SHAREHOLDERS' EQUITY: | ||||
Preferred stock, without par value: Authorized 5,000 shares; issued - none | 0 | 0 | ||
Common stock, no par value: Authorized 200,000 shares; issued 82,490 and 81,624 respectively; outstanding 76,917 and 76,626 shares, respectively | 482,744 | 479,116 | ||
Treasury stock, at cost, 5,573 and 4,998 shares, respectively | -54,622 | -46,984 | ||
Accumulated income | 362,708 | 354,866 | ||
Accumulated other comprehensive income | 1,173 | 2,244 | ||
TOTAL SHAREHOLDERS' EQUITY | 792,003 | 789,242 | ||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $927,842 | $944,448 | ||
[1] | All short-term investments were classified as available-for-sale and were measured at fair value based on level one measurement, or quoted market prices, as defined by ASC 820. As of December 27, 2014 and September 27, 2014, fair value approximated the cost basis for short-term investments. The Company did not recognize any realized gains or losses on the sale of investments during the three months ended December 27, 2014 and December 28, 2013. |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 27, 2014 | Sep. 27, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Consolidated Balance Sheets Parenthetical [Abstract] | ||
Allowance for doubtful accounts and notes receivable | $0 | $143 |
Preferred stock, without par value (usd per share) | $0 | $0 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, no par value (usd per share) | $0 | $0 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 82,490,000 | 81,624,000 |
Common stock, shares outstanding | 76,917,000 | 76,626,000 |
Treasury stock, shares | 5,573,000 | 4,998,000 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 27, 2014 | Dec. 28, 2013 |
Income Statement [Abstract] | ||
Net revenue | $107,438 | $79,113 |
Cost of sales | 52,704 | 40,748 |
Gross profit | 54,734 | 38,365 |
Selling, general and administrative | 25,427 | 23,102 |
Research and development | 19,581 | 17,471 |
Operating expenses | 45,008 | 40,573 |
Income / (loss) from operations | 9,726 | -2,208 |
Interest income | 262 | 279 |
Interest expense | -303 | -119 |
Income / (loss) from operations before income taxes | 9,685 | -2,048 |
Provision (benefit) for income taxes | 1,843 | -91 |
Net income / (loss) | $7,842 | ($1,957) |
Net income per share: | ||
Basic (in dollars per share) | $0.10 | ($0.03) |
Diluted (in dollars per share) | $0.10 | ($0.03) |
Weighted average shares outstanding: | ||
Basic (in shares) | 76,888 | 75,912 |
Diluted (in shares) | 77,432 | 75,912 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 27, 2014 | Dec. 28, 2013 |
Statement of Comprehensive Income [Abstract] | ||
Net income / (loss) | $7,842 | ($1,957) |
Other comprehensive income / (loss): | ||
Foreign currency translation adjustment | -679 | 110 |
Derivatives designated as hedging instruments: | ||
Unrealized loss on derivative instruments, net of tax | -640 | 0 |
Reclassification adjustment for loss on derivative instruments recognized, net of tax | 248 | 0 |
Net decrease from derivatives designated as hedging instruments, net of tax | -392 | 0 |
Total other comprehensive income / (loss) | -1,071 | 110 |
Comprehensive income / (loss) | $6,771 | ($1,847) |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 27, 2014 | Dec. 28, 2013 |
Statement of Cash Flows [Abstract] | ||
Net income / (loss) | $7,842 | ($1,957) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 3,556 | 2,992 |
Equity-based compensation and employee benefits | 3,435 | 3,396 |
Allowance for Doubtful Accounts Receivable, Period Increase (Decrease) | 143 | 229 |
Adjustment for inventory valuation | 169 | 905 |
Deferred taxes | 351 | -116 |
Foreign Currency Transaction Gain (Loss), Unrealized | -1,569 | -195 |
Changes in operating assets and liabilities: | ||
Accounts and notes receivable | 49,302 | 49,245 |
Inventory | -2,903 | 972 |
Prepaid expenses and other current assets | 4,009 | 7,197 |
Accounts payable, accrued expenses and other current liabilities | -18,172 | -26,019 |
Income taxes payable | 169 | 505 |
Other, net | 110 | 95 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net cash provided by operating activities | 46,442 | 37,249 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | -2,546 | -5,429 |
Purchase of short-term investments | -1,630 | -3,300 |
Repayments of Unsecured Debt | -81 | -209 |
Net cash used in investing activities | -4,176 | -8,729 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payment on debts | 98 | 467 |
Payments for Repurchase of Common Stock | -7,638 | 0 |
Net cash (used in) / provided by financing activities | -7,621 | 258 |
Effect of exchange rate changes on cash and cash equivalents | -36 | 32 |
Changes in cash and cash equivalents | 34,609 | 28,810 |
Cash and cash equivalents at beginning of period | 587,981 | 521,788 |
Cash and cash equivalents at end of period | 622,590 | 550,598 |
CASH PAID FOR: | ||
Interest | 303 | 119 |
Income taxes | $956 | $890 |
BASIS_OF_PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Dec. 27, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION |
These consolidated financial statements include the accounts of Kulicke and Soffa Industries, Inc. and its subsidiaries (the “Company”), with appropriate elimination of intercompany balances and transactions. | |
The interim consolidated financial statements are unaudited and, in management's opinion, include all adjustments (consisting only of normal and recurring adjustments) necessary for a fair presentation of results for these interim periods. The interim consolidated 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 September 27, 2014, filed with the Securities and Exchange Commission, which includes Consolidated Balance Sheets as of September 27, 2014 and September 28, 2013, and the related Consolidated Statements of Operations, Statements of Other Comprehensive Income, Changes in Shareholders' Equity and Cash Flows for each of the years in the three-year period ended September 27, 2014. 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 30th. Fiscal 2015 quarters end on December 27, 2014, March 28, 2015, June 27, 2015 and October 3, 2015. Fiscal 2014 quarters ended on December 28, 2013, March 29, 2014, June 28, 2014 and September 27, 2014. In fiscal years consisting of 53 weeks, the fourth quarter will consist of 14 weeks. | |
Nature of Business | |
The Company designs, manufactures and sells capital equipment and expendable 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, outsourced semiconductor assembly and test providers (“OSATs”), and other electronics manufacturers including automotive electronics suppliers, worldwide which, in turn, depend on the current and anticipated market demand for semiconductors and products utilizing semiconductors. The semiconductor industry is highly volatile and experiences downturns and slowdowns which can have a severe negative effect on the semiconductor industry's demand for semiconductor capital equipment, including assembly equipment manufactured and sold by the Company and, to a lesser extent, expendable tools, including those sold 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 financial statements requires management to make assumptions, estimates and judgments that affect the reported amounts of assets and liabilities, net revenue and expenses during the reporting periods, and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. On an ongoing basis, management evaluates estimates, including but not limited to, those related to accounts receivable, reserves for excess and obsolete inventory, carrying value and lives of fixed assets, goodwill and intangible assets, valuation allowances for deferred tax assets and deferred tax liabilities, repatriation of un-remitted foreign subsidiary earnings, 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 its 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. | |
Vulnerability to Certain Concentrations | |
Financial instruments which may subject the Company to concentrations of credit risk as of December 27, 2014 and September 27, 2014 consisted primarily of short-term investments and trade receivables. The Company manages credit risk associated with investments by investing its excess cash in highly rated debt instruments of the U.S. Government and its agencies, financial institutions, and corporations. The Company has established investment guidelines relative to diversification and maturities designed to maintain safety and liquidity. These guidelines are periodically reviewed and modified as appropriate. The Company does not have any exposure to sub-prime financial instruments or auction rate securities. | |
The Company's trade receivables result primarily from the sale of semiconductor equipment, related accessories and replacement parts, and expendable tools to a relatively small number of large manufacturers in a highly concentrated industry. Write-offs of uncollectible accounts have historically not been significant; however, the Company monitors its customers' financial strength to reduce the risk of loss. | |
The Company's products are complex and require raw materials, components and subassemblies having a high degree of reliability, accuracy and performance. The Company relies on subcontractors to manufacture many of these components and subassemblies and it relies on sole source suppliers for some important components and raw material inventory. | |
Foreign Currency Translation | |
The majority of the Company's business is transacted in U.S. dollars; however, the functional currencies of some of the Company's subsidiaries are their local currencies. In accordance with ASC No. 830, Foreign Currency Matters (“ASC 830”), for a subsidiary of the Company that has a functional currency other than the U.S. dollar, gains and losses resulting from the translation of the functional currency into U.S. dollars for financial statement presentation are not included in determining net income, but are accumulated in the cumulative translation adjustment account as a separate component of shareholders' equity (accumulated other comprehensive income (loss)). Under ASC 830, cumulative translation adjustments are not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries. Gains and losses resulting from foreign currency transactions are included in the determination of net income. | |
The Company's operations are exposed to changes in foreign currency exchange rates due to transactions denominated in currencies other than the location's functional currency. The Company is 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, Malaysia, Singapore and Switzerland. In addition to net monetary remeasurement, the Company has 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 China, Taiwan, Japan and Germany. The Company's U.S. operations also have foreign currency exposure due to net monetary assets denominated in currencies other than the U.S. dollar. | |
Derivative Financial Instruments | |
The Company’s primary objective for holding derivative financial instruments is to manage the fluctuation in foreign exchange rates and accordingly is not speculative in nature. The Company’s international operations are exposed to changes in foreign exchange rates as described above. The Company has established a program to monitor the forecasted transaction currency risk to protect against foreign exchange rate volatility. Generally, the Company uses foreign exchange forward contracts in these hedging programs. These instruments, which have maturities of up to six months, are recorded at fair value and are included in prepaid expenses and other current assets, or other accrued expenses and other current liabilities. | |
Our accounting policy for derivative financial instruments is based on whether they meet the criteria for designation as a cash flow hedge. A designated hedge with exposure to variability in the functional currency equivalent of the future foreign currency cash flows of a forecasted transaction is referred to as a cash flow hedge. The criteria for designating a derivative as a cash flow hedge include the assessment of the instrument’s effectiveness in risk reduction, matching of the derivative instrument to its underlying transaction, and the assessment of the probability that the underlying transaction will occur. For derivatives with cash flow hedge accounting designation, we report the after-tax gain / (loss) from the effective portion of the hedge as a component of accumulated other comprehensive income / (loss) and reclassify it into earnings in the same period in which the hedged transaction affects earnings and in the same line item on the consolidated statement of income as the impact of the hedged transaction. Derivatives that we designate as cash flow hedges are classified in the consolidated statement of cash flows in the same section as the underlying item, primarily within cash flows from operating activities. | |
The hedge effectiveness of these derivative instruments is evaluated by comparing the cumulative change in the fair value of the hedge contract with the cumulative change in the fair value of the forecasted cash flows of the hedged item. | |
If a cash flow hedge is discontinued because it is no longer probable that the original hedged transaction will occur as previously anticipated, the cumulative unrealized gain or loss on the related derivative is reclassified from accumulated other comprehensive income / (loss) into earnings. Subsequent gain / (loss) on the related derivative instrument is recognized into earnings in each period until the instrument matures, is terminated, is re-designated as a qualified cash flow hedge, or is sold. Ineffective portions of cash flow hedges, as well as amounts excluded from the assessment of effectiveness, are recognized in earnings. | |
Cash Equivalents | |
The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. Cash equivalents are measured at fair value based on level one measurement, or quoted market prices, as defined by ASC No. 820, Fair Value Measurements and Disclosures. As of December 27, 2014 and September 27, 2014, fair value approximated the cost basis for cash equivalents. | |
Investments | |
Investments, other than cash equivalents, are classified as “trading,” “available-for-sale” or “held-to-maturity,” in accordance with ASC No. 320, Investments-Debt & Equity Securities, and depending upon the nature of the investment, its ultimate maturity date in the case of debt securities, and management's intentions with respect to holding the securities. Investments classified as “trading” are reported at fair market value, with unrealized gains or losses included in earnings. Investments classified as “available-for-sale” are reported at fair market value, with net unrealized gains or losses reflected as a separate component of shareholders' equity (accumulated other comprehensive income (loss)). The fair market value of trading and available-for-sale securities is determined using quoted market prices at the balance sheet date. Investments classified as held-to-maturity are reported at amortized cost. Realized gains and losses are determined on the basis of specific identification of the securities sold. | |
Allowance for Doubtful Accounts | |
The Company maintains allowances for doubtful accounts for estimated losses resulting from its customers' failure to make required payments. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The Company is also subject to concentrations of customers and sales to a few geographic locations, which could also impact the collectability of certain receivables. If global or regional economic conditions deteriorate or political conditions were to change in some of the countries where the Company does business, it could have a significant impact on the results of operations, and the Company's ability to realize the full value of its accounts receivable. | |
Inventories | |
Inventories are stated at the lower of cost (on a first-in first-out basis) or market value. The Company generally provides reserves for obsolete inventory and for inventory considered to be in excess of demand. Demand is generally defined as 18 months forecasted future consumption for equipment, 24 months forecasted future consumption for all spare parts, and 12 months forecasted future consumption for expendable tools. Forecasted consumption is based upon internal projections, historical sales volumes, customer order activity and a review of consumable inventory levels at customers' facilities. The Company communicates forecasts of its future consumption to its suppliers and adjusts commitments to those suppliers accordingly. If required, the Company reserves the difference between the carrying value of its inventory and the lower of cost or market value, based upon projections about future consumption, and market conditions. If actual market conditions are less favorable than projections, additional inventory reserves may be required. | |
Property, Plant and Equipment | |
Property, plant and equipment are carried at cost. The cost of additions and those improvements which increase the capacity or lengthen the useful lives of assets are capitalized, while repair and maintenance costs are expensed as incurred. Depreciation and amortization are provided on a straight-line basis over the estimated useful lives as follows: buildings 25 years; machinery and equipment 3 to 10 years; and leasehold improvements are based on the shorter of the life of lease or life of asset. Purchased computer software costs related to business and financial systems are amortized over a five-year period on a straight-line basis. | |
Valuation of Long-Lived Assets | |
In accordance with ASC No. 360, Property, Plant & Equipment ("ASC 360"), the Company's property, plant and equipment is tested for impairment based on undiscounted cash flows when triggering events occur, and if impaired, written-down to fair value based on either discounted cash flows or appraised values. ASC 360 also provides a single accounting model for long-lived assets to be disposed of by sale and establishes additional criteria that would have to be met to classify an asset as held for sale. The carrying amount of an asset or asset group is not recoverable to the extent it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group. Estimates of future cash flows used to test the recoverability of a long-lived asset or asset group must incorporate the entity's own assumptions about its use of the asset or asset group and must factor in all available evidence. | |
ASC 360 requires that long-lived assets be tested for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Such events include significant under-performance relative to historical internal forecasts or projected future operating results; significant changes in the manner of use of the assets; significant negative industry or economic trends; and significant changes in market capitalization. During the three months ended December 27, 2014, no triggering events occurred. | |
Accounting for Impairment of Goodwill | |
The Company operates two reportable segments: Equipment and Expendable Tools. Goodwill was recorded in 2009 for the acquisition of Orthodyne Electronics Corporation ("Orthodyne"), which added wedge bonder products (also known as "reporting unit") to the Equipment business. | |
Accounting Standard Update 2011-08, Testing Goodwill for Impairment (“ASU 2011-08”), provides companies with the option to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If, after assessing the qualitative factors, a company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying value, then performing the two-step impairment test is unnecessary. However, if a company concludes otherwise, then it is required to perform the first step of the two-step goodwill impairment test. If the carrying value of a reporting unit exceeds its fair value in the first step of the test, then a company is required to perform the second step of the goodwill impairment test to measure the amount of the reporting unit's goodwill impairment loss, if any. | |
As part of the annual evaluation, the Company performs an impairment test of its goodwill in the fourth quarter of each fiscal year to coincide with the completion of its annual forecasting and refreshing of its business outlook processes. On an ongoing basis, the Company monitors if a “triggering” event has occurred that may have the effect of reducing the fair value of a reporting unit below its respective carrying value. 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 charge in the future. During the three months ended December 27, 2014, no triggering events occurred. | |
Impairment assessments inherently involve judgment as to the assumptions made about the expected future cash flows and the impact of market conditions on those assumptions. Future events and changing market conditions may impact the assumptions as to prices, costs, growth rates or other factors that may result in changes in the estimates of future cash flows. Although the Company believes the assumptions that it has used in testing for impairment are reasonable, significant changes in any one of the assumptions could produce a significantly different result. Indicators of potential impairment may lead the Company to perform interim goodwill impairment assessments, including significant and unforeseen customer losses, a significant adverse change in legal factors or in the business climate, a significant adverse action or assessment by a regulator, a significant stock price decline or unanticipated competition. | |
For further information on goodwill and other intangible assets, see Note 3 below. | |
Revenue Recognition | |
In accordance with ASC No. 605, Revenue Recognition, the Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, the collectability is reasonably assured, and customer acceptance, when applicable, has been received or we otherwise have been released from customer acceptance obligations. If terms of the sale provide for a customer acceptance period, revenue is recognized upon the expiration of the acceptance period or customer acceptance, whichever occurs first. The Company’s standard terms are ex works (the Company’s factory), with title transferring to its customer at the Company’s loading dock or upon embarkation. The Company has a small percentage of sales with other terms, and revenue is recognized in accordance with the terms of the related customer purchase order. | |
Shipping and handling costs billed to customers are recognized in net revenue. Shipping and handling costs paid by the Company are included in cost of sales. | |
Research and Development | |
The Company charges research and development costs associated with the development of new products to expense when incurred. In certain circumstances, pre-production machines which the Company intends to sell are carried as inventory until sold. | |
Income Taxes | |
In accordance with ASC No. 740, Income Taxes, deferred income taxes are determined using the liability method. The Company records a valuation allowance to reduce its deferred tax assets to the amount it expects is more likely than not to be realized. While the Company has considered future taxable income and its ongoing tax planning strategies in assessing the need for the valuation allowance, if it were to determine that it would be able to realize its deferred tax assets in the future in excess of its net recorded amount, an adjustment to the deferred tax asset would increase income in the period when such determination is made. Likewise, should the Company determine it would not be able to realize all or part of its net deferred tax assets in the future, an adjustment to the deferred tax asset would decrease income in the period when such determination is made. | |
In accordance with ASC No. 740 Topic 10, Income Taxes, General (“ASC 740.10”), the Company accounts for uncertain tax positions taken or expected to be taken in its income tax return. Under ASC 740.10, the Company utilizes a two-step approach for evaluating uncertain tax positions. Step one, or recognition, requires a company to determine if the weight of available evidence indicates a tax position is more likely than not to be sustained upon audit, including resolution of related appeals or litigation processes, if any. Step two, or measurement, is based on the largest amount of benefit, which is more likely than not to be realized on settlement with the taxing authority. | |
Equity-Based Compensation | |
The Company accounts for equity-based compensation under the provisions of ASC No. 718, Compensation - Stock Compensation (“ASC 718”). ASC 718 requires the recognition of the fair value of the equity-based compensation in net income. Compensation expense associated with market-based restricted stock is determined using a Monte-Carlo valuation model, and compensation expense associated with time-based and performance-based restricted stock is determined based on the number of shares granted and the fair value on the date of grant. The fair value of the Company's stock option awards are estimated using a Black-Scholes option valuation model. In addition, the calculation of equity-based compensation costs requires that the Company estimate the number of awards that will be forfeited during the vesting period. The fair value of equity-based awards is amortized over the vesting period of the award and the Company elected to use the straight-line method for awards granted after the adoption of ASC 718. | |
Earnings per Share | |
Earnings per share (“EPS”) are calculated in accordance with ASC No. 260, Earnings per Share. Basic EPS include only the weighted average number of common shares outstanding during the period. Diluted EPS includes the weighted average number of common shares and the dilutive effect of stock options, restricted stock and share unit awards and convertible subordinated notes outstanding during the period, when such instruments are dilutive. | |
In accordance with ASC No. 260.10.55, Earnings per Share - Implementation & Guidance, the Company treats all outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends as participating in undistributed earnings with common shareholders. Awards of this nature are considered participating securities and the two-class method of computing basic and diluted EPS must be applied. | |
Recent Accounting Pronouncements | |
There were no new accounting pronouncements applicable to the Company during the three months ended December 27, 2014. |
BALANCE_SHEET_COMPONENTS
BALANCE SHEET COMPONENTS | 3 Months Ended | ||||||||
Dec. 27, 2014 | |||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||
BALANCE SHEET COMPONENTS | BALANCE SHEET COMPONENTS | ||||||||
The following tables reflect the components of significant balance sheet accounts as of December 27, 2014 and September 27, 2014: | |||||||||
As of | |||||||||
(in thousands) | December 27, 2014 | September 27, 2014 | |||||||
Short term investments, available-for-sale: | |||||||||
Deposits maturing within one year (1) | $ | 10,787 | $ | 9,105 | |||||
Inventories, net: | |||||||||
Raw materials and supplies | $ | 22,712 | $ | 22,184 | |||||
Work in process | 24,545 | 18,783 | |||||||
Finished goods | 18,203 | 22,590 | |||||||
65,460 | 63,557 | ||||||||
Inventory reserves | (13,530 | ) | (13,863 | ) | |||||
$ | 51,930 | $ | 49,694 | ||||||
Property, plant and equipment, net: | |||||||||
Buildings and building improvements | $ | 31,178 | $ | 31,159 | |||||
Leasehold improvements | 13,873 | 13,962 | |||||||
Data processing equipment and software | 27,612 | 27,538 | |||||||
Machinery, equipment, furniture and fixtures | 47,593 | 45,442 | |||||||
120,256 | 118,101 | ||||||||
Accumulated depreciation | (67,463 | ) | (65,346 | ) | |||||
$ | 52,793 | $ | 52,755 | ||||||
Accrued expenses and other current liabilities: | |||||||||
Wages and benefits | $ | 13,355 | $ | 21,498 | |||||
Accrued customer obligations (2) | 6,347 | 8,999 | |||||||
Commissions and professional fees | 2,314 | 1,961 | |||||||
Deferred rent | 2,422 | 2,161 | |||||||
Severance | 617 | 1,067 | |||||||
Other | 7,489 | 8,045 | |||||||
$ | 32,544 | $ | 43,731 | ||||||
-1 | All short-term investments were classified as available-for-sale and were measured at fair value based on level one measurement, or quoted market prices, as defined by ASC 820. As of December 27, 2014 and September 27, 2014, fair value approximated the cost basis for short-term investments. The Company did not recognize any realized gains or losses on the sale of investments during the three months ended December 27, 2014 and December 28, 2013. | ||||||||
-2 | Represents customer advance payments, customer credit program, accrued warranty expense and accrued retrofit obligations. |
GOODWILL_AND_INTANGIBLE_ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended | ||||||||||
Dec. 27, 2014 | |||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS | ||||||||||
Goodwill | |||||||||||
Intangible assets classified as goodwill are not amortized. 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 2014 and concluded that no impairment charge was required. During the three months ended December 27, 2014, the Company reviewed the 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. | |||||||||||
In 2009, the Company acquired Orthodyne and added wedge bonder products to the business. | |||||||||||
Intangible Assets | |||||||||||
Intangible assets with determinable lives are amortized over their estimated useful lives. The Company's intangible assets consist primarily of wedge bonder developed technology and customer relationships. | |||||||||||
The following table reflects net intangible assets as of December 27, 2014 and September 27, 2014: | |||||||||||
As of | Average estimated | ||||||||||
(dollar amounts in thousands) | December 27, 2014 | September 27, 2014 | useful lives (in years) | ||||||||
Wedge bonder developed technology | $ | 33,200 | $ | 33,200 | 7 | ||||||
Accumulated amortization | (29,644 | ) | (28,458 | ) | |||||||
Net wedge bonder developed technology | $ | 3,556 | $ | 4,742 | |||||||
Wedge bonder customer relationships | $ | 19,300 | $ | 19,300 | 5 | ||||||
Accumulated amortization | (19,300 | ) | (19,300 | ) | |||||||
Net wedge bonder customer relationships | $ | — | $ | — | |||||||
Wedge bonder trade name | $ | 4,600 | $ | 4,600 | 8 | ||||||
Accumulated amortization | (3,594 | ) | (3,451 | ) | |||||||
Net wedge bonder trade name | $ | 1,006 | $ | 1,149 | |||||||
Wedge bonder other intangible assets | $ | 2,500 | $ | 2,500 | 1.9 | ||||||
Accumulated amortization | (2,500 | ) | (2,500 | ) | |||||||
Net wedge bonder other intangible assets | $ | — | $ | — | |||||||
Net intangible assets | $ | 4,562 | $ | 5,891 | |||||||
The following table reflects estimated annual amortization expense related to intangible assets as of December 27, 2014: | |||||||||||
As of | |||||||||||
(in thousands) | December 27, 2014 | ||||||||||
Remaining fiscal 2015 | $ | 3,988 | |||||||||
Fiscal 2016 | 574 | ||||||||||
Total amortization expense | $ | 4,562 | |||||||||
CASH_AND_CASH_EQUIVALENTS
CASH AND CASH EQUIVALENTS | 3 Months Ended | |||||||||||||||
Dec. 27, 2014 | ||||||||||||||||
Cash and Cash Equivalents [Abstract] | ||||||||||||||||
CASH AND CASH EQUIVALENTS | 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. We carry these investments at fair value, based on quoted market prices or other readily available market information. | ||||||||||||||||
Cash and cash equivalents consisted of the following as of December 27, 2014: | ||||||||||||||||
(in thousands) | Amortized | Unrealized | Unrealized | Estimated | ||||||||||||
Cost | Gains | Losses | Fair Value | |||||||||||||
Current assets: | ||||||||||||||||
Cash | $ | 131,263 | $ | — | $ | — | $ | 131,263 | ||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | 327,742 | — | — | 327,742 | ||||||||||||
Time deposits | 134,085 | — | — | 134,085 | ||||||||||||
Commercial paper | 29,500 | — | — | 29,500 | ||||||||||||
Total cash and cash equivalents | 622,590 | — | — | 622,590 | ||||||||||||
Short-term investments: | ||||||||||||||||
Time deposits | 10,787 | — | — | 10,787 | ||||||||||||
Total short-term investments | 10,787 | — | — | 10,787 | ||||||||||||
Total cash, cash equivalents and short-term investments | $ | 633,377 | $ | — | $ | — | $ | 633,377 | ||||||||
Cash and cash equivalents consisted of the following as of September 27, 2014: | ||||||||||||||||
(in thousands) | Amortized | Unrealized | Unrealized | Estimated | ||||||||||||
Cost | Gains | Losses | Fair Value | |||||||||||||
Current assets: | ||||||||||||||||
Cash | $ | 130,668 | $ | — | $ | — | $ | 130,668 | ||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | 295,529 | — | — | 295,529 | ||||||||||||
Time deposits | 132,284 | — | — | 132,284 | ||||||||||||
Commercial paper | 29,500 | — | — | 29,500 | ||||||||||||
Total cash and cash equivalents | 587,981 | — | — | 587,981 | ||||||||||||
Short-term investments | ||||||||||||||||
Time deposits | 9,105 | — | — | 9,105 | ||||||||||||
Total short-term investments | 9,105 | — | — | 9,105 | ||||||||||||
Total cash, cash equivalents and short-term investments | $ | 597,086 | $ | — | $ | — | $ | 597,086 | ||||||||
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended | |||||||||||||||
Dec. 27, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
FAIR VALUE MEASURMENTS | FAIR VALUE MEASURMENTS | |||||||||||||||
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 months months ended December 27, 2014. | ||||||||||||||||
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 cash and equivalents, short-term investments, accounts receivables, prepaid expenses and other current assets, accounts payable and accrued expenses approximate fair value. | ||||||||||||||||
The fair value of our financial assets and liabilities at December 27, 2014 were determined using the following inputs: | ||||||||||||||||
(in thousands) | Fair Value Measurements at Reporting Date Using | |||||||||||||||
Quoted Prices | Significant | Significant | ||||||||||||||
in Active | Other | Unobservable | ||||||||||||||
Markets for | Observable | Inputs | ||||||||||||||
Identical Assets | Inputs | |||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
Cash | $ | 131,263 | $ | 131,263 | $ | — | $ | — | ||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | 327,742 | 327,742 | — | — | ||||||||||||
Time deposits | 134,085 | 134,085 | — | — | ||||||||||||
Commerical paper | 29,500 | 29,500 | — | — | ||||||||||||
Short-term investments: | ||||||||||||||||
Time deposits | 10,787 | 10,787 | — | — | ||||||||||||
Total assets | $ | 633,377 | $ | 633,377 | $ | — | $ | — | ||||||||
The fair value of our financial assets and liabilities at September 27, 2014 were determined using the following inputs: | ||||||||||||||||
(in thousands) | Fair Value Measurements at Reporting Date Using | |||||||||||||||
Quoted Prices | Significant | Significant | ||||||||||||||
in Active | Other | Unobservable | ||||||||||||||
Markets for | Observable | Inputs | ||||||||||||||
Identical Assets | Inputs | |||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
Cash | $ | 130,668 | $ | 130,668 | $ | — | $ | — | ||||||||
Cash equivalents | ||||||||||||||||
Money market funds | 295,529 | 295,529 | — | — | ||||||||||||
Time deposits | 132,284 | 132,284 | — | — | ||||||||||||
Commerical paper | 29,500 | 29,500 | — | — | ||||||||||||
Short-term investments | ||||||||||||||||
Time deposits | 9,105 | 9,105 | — | — | ||||||||||||
Total assets | $ | 597,086 | $ | 597,086 | $ | — | $ | — | ||||||||
DERIVATIVES_FINANCIAL_INSTRUME
DERIVATIVES FINANCIAL INSTRUMENTS (Notes) | 3 Months Ended | ||||||||||||
Dec. 27, 2014 | |||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||
DERIVATIVES FINANCIAL INSTRUMENTS | 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 are denominated in local currencies, primarily in Singapore. | |||||||||||||
The foreign currency exposure of our operating expenses are 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 6 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 statements of income as the impact of the hedged transaction. | |||||||||||||
The fair value of derivative instruments on our Consolidated Balance Sheets as of December 27, 2014 was as follows: | |||||||||||||
As of | |||||||||||||
(in thousands) | December 27, 2014 | ||||||||||||
Notional Amount | Fair Value Asset Derivatives(1) | Fair Value Liability Derivatives(2) | |||||||||||
Derivatives designated as hedging instruments: | |||||||||||||
Foreign exchange forward contracts (3) | $ | 9,537 | $ | — | $ | 392 | |||||||
Total derivatives | $ | 9,537 | $ | — | $ | 392 | |||||||
-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 Balance Sheets. | ||||||||||||
-2 | Included in accrued expenses and other current liabilities on our Consolidated Balance Sheets. | ||||||||||||
-3 | Hedged amounts expected to be recognized to income within the next twelve months. | ||||||||||||
The effect of derivative instruments designated as cash flow hedges in our Consolidated Statements of Income for the three months months ended December 27, 2014 was as follows: | |||||||||||||
(in thousands) | Three months ended | ||||||||||||
December 27, 2014 | |||||||||||||
Foreign exchange forward contract in cash flow hedging relationships: | |||||||||||||
Net loss recognized in OCI, net of tax(1) | $ | (640 | ) | ||||||||||
Net loss reclassified from accumulated OCI into income, net of tax(2) | $ | (249 | ) | ||||||||||
Net gain recognized in income(3) | $ | — | |||||||||||
(1)Net change in the fair value of the effective portion classified in other comprehensive income (“OCI”). | |||||||||||||
(2)Effective portion classified as selling, general and administrative expense. | |||||||||||||
(3)Ineffective portion and amount excluded from effectiveness testing classified in selling, general and administrative expense. |
DEBT_AND_OTHER_OBLIGATIONS_DEB
DEBT AND OTHER OBLIGATIONS DEBT AND OTHER OBLIGATIONS (Notes) | 3 Months Ended |
Dec. 27, 2014 | |
Debt Disclosure [Abstract] | |
Debt and Other Obligations | DEBT AND OTHER OBLIGATIONS |
Financing obligation | |
On December 1, 2013, Kulicke & Soffa Pte Ltd. (“Pte”), the Company's wholly owned subsidiary, signed a lease with DBS Trustee Limited as trustee of Mapletree Industrial Trust (the “Landlord”) to lease from the Landlord approximately 198,000 square feet, representing approximately 70% of a building in Singapore as our corporate headquarters, manufacturing, technology, sales and service center (the “Building”). The lease has a 10 year non-cancellable term (the "Initial Term") and contains options to renew for 2 further 10 -year terms. The annual rent and service charge for the Initial Term range from approximately $4 million to approximately $5 million Singapore dollars. | |
Pursuant to the agreement to develop and lease (the "ADL") and in accordance with ASC No. 840, Leases ("ASC 840"), the Company was considered to be the owner of the Building during the construction phase due to its involvement in the asset construction. Following the completion of construction, we performed a sale-leaseback analysis pursuant to ASC 840-40 to determine if we could remove the Landlord’s asset and associated financing obligation from the consolidated balance sheet. Our lease contained collateral, considered a prohibited form of continuing involvement under ASC 840-40 and therefore involvement that precluded us from derecognizing the asset and associated financing obligation. As such, we reclassified the asset from construction in progress to Property, Plant and Equipment and began to depreciate the building over its estimated useful life of twenty-five years. We concluded that the term of the financing obligation is 10 years. This is equal to the non-cancellable term of our lease agreement with the Landlord. At the inception of the lease, the asset and financing obligation recorded on the balance sheet was $20.0 million, which was based on using an interest rate of 6.3% over the Initial Term. The financing obligation will be settled through a combination of periodic cash rental payments and the return of the leased property at the expiration of the lease. We do not report rent expense for the property which is deemed owned for accounting purposes. Rather, rental payments required under the lease are considered debt service and applied to the deemed landlord financing obligation and interest expense. The Building and financing obligation are being amortized in a manner that will not generate a gain or loss upon lease termination. | |
Credit facility | |
On November 22, 2013, the Company obtained a $5.0 million credit facility with Citibank in connection with the issuance of a bank guarantee of $3.4 million Singapore dollars to the Landlord in connection with the lease. The bank guarantee was effective from December 1, 2013 to November 30, 2014. On November 19, 2014, the Company extended the expiration date of the bank guarantee to November 30, 2015 and increased the amount to $3.5 million Singapore dollars. |
SHAREHOLDERS_EQUITY_AND_EMPLOY
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS | 3 Months Ended | ||||||||
Dec. 27, 2014 | |||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||
SHAREHOLDERS’ EQUITY AND EMPLOYEE BENEFIT PLANS | SHAREHOLDERS’ EQUITY AND EMPLOYEE BENEFIT PLANS | ||||||||
Common Stock and 401(k) Retirement Income Plan | |||||||||
The Company has a 401(k) retirement income plan (the “Plan”) for its employees. Historically, the Company's matching contributions to the Plan were made in the form of issued and contributed shares of Company common stock; however, beginning January 2, 2011, matching contributions to the Plan were made in cash instead of stock. The Plan allows for employee contributions and matching Company contributions up to 4% or 6% of the employee's contributed amount based upon years of service. | |||||||||
The following table reflects the Company’s matching contributions to the Plan during the three months ended December 27, 2014 and December 28, 2013: | |||||||||
Three months ended | |||||||||
(in thousands) | December 27, 2014 | December 28, 2013 | |||||||
Cash | $ | 295 | $ | 281 | |||||
Stock Repurchase Program | |||||||||
On August 14, 2014, 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 14, 2017. The Company has entered into a written trading plan under Rule 10b5-1 of the Exchange Act, to facilitate repurchases under the Program. The Program may be suspended or discontinued at any time and will be funded using the Company's available cash. 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 this program will depend on market conditions as well as corporate and regulatory considerations. During the three months ended December 27, 2014, the Company repurchased a total of 0.6 million shares of common stock at a cost of $7.6 million. The stock repurchases were recorded in the periods they were delivered, and the payment of $7.6 million was accounted for as treasury stock in the Company’s Consolidated Balance Sheet. The Company records treasury stock purchases under the cost method using the first-in, first-out (FIFO) method. Upon reissuance 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. | |||||||||
Accumulated Other Comprehensive Income | |||||||||
The following table reflects accumulated other comprehensive income reflected on the Consolidated Balance Sheets as of December 27, 2014 and September 27, 2014: | |||||||||
As of | |||||||||
(in thousands) | December 27, 2014 | September 27, 2014 | |||||||
Gain from foreign currency translation adjustments | $ | 2,520 | $ | 3,199 | |||||
Unrecognized actuarial loss Switzerland pension plan, net of tax | (609 | ) | (609 | ) | |||||
Switzerland pension plan curtailment | (346 | ) | (346 | ) | |||||
Unrealized loss on hedging | (392 | ) | — | ||||||
Accumulated other comprehensive income | $ | 1,173 | $ | 2,244 | |||||
Equity-Based Compensation | |||||||||
As of December 27, 2014, the Company had seven equity-based employee compensation plans (the “Employee Plans”) and three director compensation plans (the “Director Plans”) (collectively, the “Plans”). Under these Plans, market-based share awards (collectively, “market-based restricted stock”), time-based share awards (collectively, “time-based restricted stock”), performance-based share awards (collectively, “performance-based restricted stock”), stock options, or common stock have been granted at 100% of the market price of the Company's common stock on the date of grant. As of December 27, 2014, the Company’s one active plan, the 2009 Equity Plan, had 3.1 million shares of common stock available for grant to its employees and directors. | |||||||||
• | Market-based restricted stock entitles the employee to receive common shares of the Company on the award vesting date, if market performance objectives which measure relative total shareholder return (“TSR”) are attained. Relative TSR is calculated based upon the 90-calendar day average price of the Company's stock as compared to specific peer companies that comprise the Philadelphia 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 market-based restricted stock are reflected in the grant date fair value of the award; therefore, compensation expense is recognized regardless of whether or not the market condition is ultimately satisfied. Compensation expense is reversed if the award is forfeited prior to the vesting date. | ||||||||
• | In general, stock options and time-based restricted stock awarded to employees vest annually over a three-year period provided the employee remains employed by the Company. The Company follows the non-substantive vesting method for stock options and recognizes compensation expense immediately for awards granted to retirement eligible employees, or over the period from the grant date to the date retirement eligibility is achieved. | ||||||||
• | In general, performance-based restricted stock (“PSU”) entitles the employee to receive common shares of the Company on the three-year anniversary of the grant date (if employed by the Company) if return on invested capital and revenue growth targets set by the Management Development and Compensation Committee (“MDCC”) of the Board of Directors on the date of grant are met. If return on invested capital and revenue growth targets are not met, performance-based restricted stock does not vest. Certain PSUs vest based on achievement of strategic goals over a certain time period or periods set by the MDCC. If the strategic goals are not achieved, the PSUs do not vest. | ||||||||
Equity-based compensation expense recognized in the Consolidated Statements of Operations for the three months ended December 27, 2014 and December 28, 2013 was based upon awards ultimately expected to vest. In accordance with ASC No. 718, Stock Based Compensation, forfeitures have been estimated at the time of grant and were based upon historical experience. The Company reviews the forfeiture rates periodically and makes adjustments as necessary. | |||||||||
The following table reflects restricted stock and common stock granted during the three months ended December 27, 2014 and December 28, 2013: | |||||||||
Three months ended | |||||||||
(shares in thousands) | December 27, 2014 | December 28, 2013 | |||||||
Market-based restricted stock | 232 | 324 | |||||||
Time-based restricted stock | 472 | 581 | |||||||
Common stock | 13 | 15 | |||||||
Equity-based compensation in shares | 717 | 920 | |||||||
The following table reflects total equity-based compensation expense, which includes restricted stock, stock options and common stock, included in the Consolidated Statements of Operations during the three months ended December 27, 2014 and December 28, 2013: | |||||||||
Three months ended | |||||||||
(in thousands) | December 27, 2014 | December 28, 2013 | |||||||
Cost of sales | $ | 128 | $ | 105 | |||||
Selling, general and administrative | 2,499 | 2,616 | |||||||
Research and development | 808 | 675 | |||||||
Total equity-based compensation expense | $ | 3,435 | $ | 3,396 | |||||
The following table reflects equity-based compensation expense, by type of award, for the three months ended December 27, 2014 and December 28, 2013: | |||||||||
Three months ended | |||||||||
(in thousands) | December 27, 2014 | December 28, 2013 | |||||||
Market-based restricted stock | $ | 1,350 | $ | 1,472 | |||||
Time-based restricted stock | 1,869 | 1,705 | |||||||
Performance-based restricted stock | 33 | 33 | |||||||
Stock options | 3 | 6 | |||||||
Common stock | 180 | 180 | |||||||
Total equity-based compensation expense | $ | 3,435 | $ | 3,396 | |||||
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 3 Months Ended | ||||||||||||||||
Dec. 27, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE | ||||||||||||||||
Basic income (loss) per share is calculated using the weighted average number of shares of common stock outstanding during the period. Stock options and restricted stock are included in the calculation of diluted earnings per share, except when their effect would be anti-dilutive. For the three months ended December 28, 2013, 0.1 million stock options and 0.8 million restricted stocks were excluded due to the Company's net loss. | |||||||||||||||||
Diluted income (loss) per share is calculated using the weighted average number of shares of common stock outstanding during the period and, if there is net income during the period, the dilutive impact of common stock equivalents outstanding during the period. | |||||||||||||||||
The following tables reflect a reconciliation of the shares used in the basic and diluted net income (loss) per share computation for the three months ended December 27, 2014 and December 28, 2013: | |||||||||||||||||
Three months ended | |||||||||||||||||
(in thousands, except per share data) | December 27, 2014 | December 28, 2013 | |||||||||||||||
Basic | Diluted | Basic | Diluted | ||||||||||||||
NUMERATOR: | |||||||||||||||||
Net income / (loss) | $ | 7,842 | $ | 7,842 | $ | (1,957 | ) | $ | (1,957 | ) | |||||||
DENOMINATOR: | |||||||||||||||||
Weighted average shares outstanding - Basic | 76,888 | 76,888 | 75,912 | 75,912 | |||||||||||||
Stock options | 94 | — | |||||||||||||||
Time-based restricted stock | 213 | — | |||||||||||||||
Market-based restricted stock | 237 | — | |||||||||||||||
Weighted average shares outstanding - Diluted | 77,432 | 75,912 | |||||||||||||||
EPS: | |||||||||||||||||
Net income / (loss) per share - Basic | $ | 0.1 | $ | 0.1 | $ | (0.03 | ) | $ | (0.03 | ) | |||||||
Effect of dilutive shares | — | — | |||||||||||||||
Net income / (loss) per share - Diluted | $ | 0.1 | $ | (0.03 | ) | ||||||||||||
INCOME_TAXES
INCOME TAXES | 3 Months Ended | |||||||
Dec. 27, 2014 | ||||||||
Income Tax Disclosure [Abstract] | ||||||||
INCOME TAXES | INCOME TAXES | |||||||
The following table reflects the provision for income taxes and the effective tax rate for the three months ended December 27, 2014 and December 28, 2013: | ||||||||
Three months ended | ||||||||
(dollar amounts in thousands) | December 27, 2014 | December 28, 2013 | ||||||
Income / (loss) from operations before income taxes | $ | 9,685 | $ | (2,048 | ) | |||
Provision (benefit) for income taxes | 1,843 | (91 | ) | |||||
Net income / (loss) | $ | 7,842 | $ | (1,957 | ) | |||
Effective tax rate | 19 | % | 4.4 | % | ||||
For the three months ended December 27, 2014, the effective income tax rate differed from the federal statutory tax rate primarily due to profits from foreign operations subject to a lower statutory tax rate than the U.S. statutory tax rate, and the impact of tax holidays, offset by an increase for deferred taxes on unremitted earnings, other U.S. deferred taxes and foreign withholding taxes. | ||||||||
For the three months ended December 28, 2013, the effective income tax rate differed from the federal statutory tax rate primarily due to profits from foreign operations subject to a lower statutory tax rate than the U.S. statutory tax rate, and the impact of tax holidays, offset by an increase for deferred taxes on unremitted earnings, other U.S. deferred taxes and additional foreign expenses or benefits related to returns filed in the period. | ||||||||
The effective tax rate for the period ended December 27, 2014 of 19.0% increased from the effective rate for the fiscal period ended September 27, 2014 of 18.3% primarily due to higher volume of local sales, which has a higher statutory tax rate. The Company's future effective tax rate would be affected if earnings were lower than anticipated in countries where it has lower statutory rates and higher than anticipated in countries where it has higher statutory rates, by changes in the valuation of its deferred tax assets and liabilities, or by changes in tax laws, regulations, accounting principles, or interpretations thereof. In addition, anticipated tax benefits from research expenditures and changes in assertions for foreign earnings permanently or non-permanently reinvested as a result of changes in facts and circumstances could significantly impact the effective tax rate. The Company regularly assesses the effects resulting from these factors to determine the adequacy of its provision for income taxes. | ||||||||
It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain unrecognized tax positions will decrease during the next 12 months due to the expected lapse of statutes of limitation. The Company does not expect the change to have a material effect on its statement of operations. |
SEGMENT_INFORMATION
SEGMENT INFORMATION | 3 Months Ended | ||||||||
Dec. 27, 2014 | |||||||||
Segment Reporting [Abstract] | |||||||||
SEGMENT INFORMATION | SEGMENT INFORMATION | ||||||||
The Company operates two reportable segments: Equipment and Expendable Tools. The Equipment segment manufactures and sells a line of ball bonders and heavy wire wedge bonders that are sold to semiconductor device manufacturers, their outsourced semiconductor assembly and test subcontractors, other electronics manufacturers and automotive electronics suppliers. The Company also services, maintains, repairs and upgrades its equipment. The Expendable Tools segment manufactures and sells a variety of expendable tools for a broad range of semiconductor packaging applications. | |||||||||
The following table reflects operating information by segment for the three months ended December 27, 2014 and December 28, 2013: | |||||||||
Three months ended | |||||||||
(in thousands) | December 27, 2014 | December 28, 2013 | |||||||
Net revenue: | |||||||||
Equipment | $ | 90,956 | $ | 63,145 | |||||
Expendable Tools | 16,482 | 15,968 | |||||||
Net revenue | 107,438 | 79,113 | |||||||
Cost of sales: | |||||||||
Equipment | 46,099 | 34,473 | |||||||
Expendable Tools | 6,605 | 6,275 | |||||||
Cost of sales | 52,704 | 40,748 | |||||||
Gross profit: | |||||||||
Equipment | 44,857 | 28,672 | |||||||
Expendable Tools | 9,877 | 9,693 | |||||||
Gross profit | 54,734 | 38,365 | |||||||
Operating expenses: | |||||||||
Equipment | 39,411 | 35,552 | |||||||
Expendable Tools | 5,597 | 5,021 | |||||||
Operating expenses | 45,008 | 40,573 | |||||||
Income / (loss) from operations: | |||||||||
Equipment | 5,446 | (6,880 | ) | ||||||
Expendable Tools | 4,280 | 4,672 | |||||||
Income / (loss) from operations | $ | 9,726 | $ | (2,208 | ) | ||||
The following table reflects assets by segment as of December 27, 2014 and September 27, 2014: | |||||||||
As of | |||||||||
(in thousands) | December 27, 2014 | September 27, 2014 | |||||||
Segment assets: | |||||||||
Equipment | $ | 795,040 | $ | 839,847 | |||||
Expendable Tools | 132,802 | 104,601 | |||||||
Total assets | $ | 927,842 | $ | 944,448 | |||||
The following tables reflect capital expenditures and depreciation expense for the three months ended December 27, 2014 and December 28, 2013: | |||||||||
Three months ended | |||||||||
(in thousands) | December 27, 2014 | December 28, 2013 | |||||||
Capital expenditures: | |||||||||
Equipment | $ | 1,736 | $ | 4,232 | |||||
Expendable Tools | 517 | 1,197 | |||||||
Capital expenditures | $ | 2,253 | $ | 5,429 | |||||
Three months ended | |||||||||
(in thousands) | December 27, 2014 | December 28, 2013 | |||||||
Depreciation expense: | |||||||||
Equipment | $ | 1,585 | $ | 1,098 | |||||
Expendable Tools | 642 | 565 | |||||||
Depreciation expense | $ | 2,227 | $ | 1,663 | |||||
COMMITMENTS_CONTINGENCIES_AND_
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Notes) | 3 Months Ended | ||||||||||||||||||||||||
Dec. 27, 2014 | |||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS | 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. | |||||||||||||||||||||||||
The following table reflects the reserve for product warranty activity for the three months ended December 27, 2014 and December 28, 2013: | |||||||||||||||||||||||||
Three months ended | |||||||||||||||||||||||||
(in thousands) | December 27, 2014 | December 28, 2013 | |||||||||||||||||||||||
Reserve for product warranty, beginning of period | $ | 1,542 | $ | 1,194 | |||||||||||||||||||||
Provision for product warranty | 199 | 148 | |||||||||||||||||||||||
Product warranty costs paid | (526 | ) | (455 | ) | |||||||||||||||||||||
Reserve for product warranty, end of period | $ | 1,215 | $ | 887 | |||||||||||||||||||||
Other Commitments and Contingencies | |||||||||||||||||||||||||
The following table reflects obligations not reflected on the Consolidated Balance Sheet as of December 27, 2014: | |||||||||||||||||||||||||
Payments due by fiscal year | |||||||||||||||||||||||||
(in thousands) | Total | 2015 | 2016 | 2017 | 2018 | thereafter | |||||||||||||||||||
Inventory purchase obligation (1) | $ | 77,658 | $ | 77,658 | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Operating lease obligations (2) | 28,537 | 2,892 | 3,414 | 3,039 | 2,566 | 16,626 | |||||||||||||||||||
Total | $ | 106,195 | $ | 80,550 | $ | 3,414 | $ | 3,039 | $ | 2,566 | $ | 16,626 | |||||||||||||
-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. | ||||||||||||||||||||||||
-2 | The Company has minimum rental commitments under various leases (excluding taxes, insurance, maintenance and repairs, which are also paid by the Company) primarily for various facility and equipment leases, which expire periodically through 2018 (not including lease extension options, if applicable). | ||||||||||||||||||||||||
Pursuant to ASC No. 840, Leases, for lessee's involvement in asset construction, the Company was considered the owner of the Building during the construction phase of the ADL. The building was completed on December 1, 2013 and Pte signed an agreement with the Landlord to lease from the Landlord approximately 198,000 square feet , representing approximately 70% of the Building. Following the completion of construction, we performed a sale-leaseback analysis pursuant to ASC 840-40 and determined that because of our continuing involvement, ASC 840-40 precluded us from derecognizing the asset and associated financing obligation. As such, we reclassified the asset from construction in progress to Property, Plant and Equipment and began to depreciate the building over its estimated useful life of twenty-five years. We concluded that the term of the financing obligation is 10 years. This is equal to the non-cancellable term of our lease agreement with the Landlord. As of December 27, 2014, we recorded a financing obligation of $18.3 million. The financing obligation is not reflected in the table above. | |||||||||||||||||||||||||
Concentrations | |||||||||||||||||||||||||
There is no significant customer that represents 10% or more of our net revenue for the three months ended December 27, 2014 and December 28, 2013. | |||||||||||||||||||||||||
The following table reflects significant customer concentrations as a percentage of total accounts receivable as of December 27, 2014 and December 28, 2013: | |||||||||||||||||||||||||
As of | |||||||||||||||||||||||||
December 27, 2014 | December 28, 2013 | ||||||||||||||||||||||||
Haoseng Industrial Co., Ltd | 19 | % | 10.8 | % | |||||||||||||||||||||
Siliconware Precision Industries Co. Limited | * | 27.4 | % | ||||||||||||||||||||||
* Represents less than 10% of total accounts receivable |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Dec. 27, 2014 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS |
On December 29, 2014, Kulicke & Soffa Holdings B.V. (“KSH”), the Company's wholly owned subsidiary, entered into a Share Sale and Purchase Agreement (the “Agreement”) with Assembléon Holding B.V. Pursuant to the Agreement, KSH agreed to purchase all of the outstanding equity interests of Assembléon B.V. (“Assembléon”), a subsidiary of Assembléon Holding B.V., in an all cash transaction for EUR 80 million (approximately $98 million). Assembléon is a leading technology solutions provider that, together with its subsidiaries, offers assembly equipment, processes and services for the automotive, industrial, and advanced packaging markets. The acquisition expands the Company presence in automotive, industrial and advanced packaging markets. | |
The acquisition was completed on January 9, 2015. Upon acquisition, Assembléon became a wholly owned subsidiary of the Company. The Company is in the process of determining the purchase price allocation for this acquisition. |
BASIS_OF_PRESENTATION_Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Dec. 27, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation | These consolidated financial statements include the accounts of Kulicke and Soffa Industries, Inc. and its subsidiaries (the “Company”), with appropriate elimination of intercompany balances and transactions. |
The interim consolidated financial statements are unaudited and, in management's opinion, include all adjustments (consisting only of normal and recurring adjustments) necessary for a fair presentation of results for these interim periods. The interim consolidated 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 September 27, 2014, filed with the Securities and Exchange Commission, which includes Consolidated Balance Sheets as of September 27, 2014 and September 28, 2013, and the related Consolidated Statements of Operations, Statements of Other Comprehensive Income, Changes in Shareholders' Equity and Cash Flows for each of the years in the three-year period ended September 27, 2014. 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 | 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 30th. Fiscal 2015 quarters end on December 27, 2014, March 28, 2015, June 27, 2015 and October 3, 2015. Fiscal 2014 quarters ended on December 28, 2013, March 29, 2014, June 28, 2014 and September 27, 2014. In fiscal years consisting of 53 weeks, the fourth quarter will consist of 14 weeks. | |
Nature of Business | Nature of Business |
The Company designs, manufactures and sells capital equipment and expendable 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, outsourced semiconductor assembly and test providers (“OSATs”), and other electronics manufacturers including automotive electronics suppliers, worldwide which, in turn, depend on the current and anticipated market demand for semiconductors and products utilizing semiconductors. The semiconductor industry is highly volatile and experiences downturns and slowdowns which can have a severe negative effect on the semiconductor industry's demand for semiconductor capital equipment, including assembly equipment manufactured and sold by the Company and, to a lesser extent, expendable tools, including those sold 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 | Use of Estimates |
The preparation of consolidated financial statements requires management to make assumptions, estimates and judgments that affect the reported amounts of assets and liabilities, net revenue and expenses during the reporting periods, and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. On an ongoing basis, management evaluates estimates, including but not limited to, those related to accounts receivable, reserves for excess and obsolete inventory, carrying value and lives of fixed assets, goodwill and intangible assets, valuation allowances for deferred tax assets and deferred tax liabilities, repatriation of un-remitted foreign subsidiary earnings, 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 its 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. | |
Vulnerability to Certain Concentrations | Vulnerability to Certain Concentrations |
Financial instruments which may subject the Company to concentrations of credit risk as of December 27, 2014 and September 27, 2014 consisted primarily of short-term investments and trade receivables. The Company manages credit risk associated with investments by investing its excess cash in highly rated debt instruments of the U.S. Government and its agencies, financial institutions, and corporations. The Company has established investment guidelines relative to diversification and maturities designed to maintain safety and liquidity. These guidelines are periodically reviewed and modified as appropriate. The Company does not have any exposure to sub-prime financial instruments or auction rate securities. | |
The Company's trade receivables result primarily from the sale of semiconductor equipment, related accessories and replacement parts, and expendable tools to a relatively small number of large manufacturers in a highly concentrated industry. Write-offs of uncollectible accounts have historically not been significant; however, the Company monitors its customers' financial strength to reduce the risk of loss. | |
The Company's products are complex and require raw materials, components and subassemblies having a high degree of reliability, accuracy and performance. The Company relies on subcontractors to manufacture many of these components and subassemblies and it relies on sole source suppliers for some important components and raw material inventory. | |
Foreign Currency Translation | Foreign Currency Translation |
The majority of the Company's business is transacted in U.S. dollars; however, the functional currencies of some of the Company's subsidiaries are their local currencies. In accordance with ASC No. 830, Foreign Currency Matters (“ASC 830”), for a subsidiary of the Company that has a functional currency other than the U.S. dollar, gains and losses resulting from the translation of the functional currency into U.S. dollars for financial statement presentation are not included in determining net income, but are accumulated in the cumulative translation adjustment account as a separate component of shareholders' equity (accumulated other comprehensive income (loss)). Under ASC 830, cumulative translation adjustments are not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries. Gains and losses resulting from foreign currency transactions are included in the determination of net income. | |
The Company's operations are exposed to changes in foreign currency exchange rates due to transactions denominated in currencies other than the location's functional currency. The Company is 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, Malaysia, Singapore and Switzerland. In addition to net monetary remeasurement, the Company has 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 China, Taiwan, Japan and Germany. The Company's U.S. operations also have foreign currency exposure due to net monetary assets denominated in currencies other than the U.S. dollar. | |
Derivative Financial Instruments | Derivative Financial Instruments |
The Company’s primary objective for holding derivative financial instruments is to manage the fluctuation in foreign exchange rates and accordingly is not speculative in nature. The Company’s international operations are exposed to changes in foreign exchange rates as described above. The Company has established a program to monitor the forecasted transaction currency risk to protect against foreign exchange rate volatility. Generally, the Company uses foreign exchange forward contracts in these hedging programs. These instruments, which have maturities of up to six months, are recorded at fair value and are included in prepaid expenses and other current assets, or other accrued expenses and other current liabilities. | |
Our accounting policy for derivative financial instruments is based on whether they meet the criteria for designation as a cash flow hedge. A designated hedge with exposure to variability in the functional currency equivalent of the future foreign currency cash flows of a forecasted transaction is referred to as a cash flow hedge. The criteria for designating a derivative as a cash flow hedge include the assessment of the instrument’s effectiveness in risk reduction, matching of the derivative instrument to its underlying transaction, and the assessment of the probability that the underlying transaction will occur. For derivatives with cash flow hedge accounting designation, we report the after-tax gain / (loss) from the effective portion of the hedge as a component of accumulated other comprehensive income / (loss) and reclassify it into earnings in the same period in which the hedged transaction affects earnings and in the same line item on the consolidated statement of income as the impact of the hedged transaction. Derivatives that we designate as cash flow hedges are classified in the consolidated statement of cash flows in the same section as the underlying item, primarily within cash flows from operating activities. | |
The hedge effectiveness of these derivative instruments is evaluated by comparing the cumulative change in the fair value of the hedge contract with the cumulative change in the fair value of the forecasted cash flows of the hedged item. | |
If a cash flow hedge is discontinued because it is no longer probable that the original hedged transaction will occur as previously anticipated, the cumulative unrealized gain or loss on the related derivative is reclassified from accumulated other comprehensive income / (loss) into earnings. Subsequent gain / (loss) on the related derivative instrument is recognized into earnings in each period until the instrument matures, is terminated, is re-designated as a qualified cash flow hedge, or is sold. Ineffective portions of cash flow hedges, as well as amounts excluded from the assessment of effectiveness, are recognized in earnings. | |
Cash Equivalents | Cash Equivalents |
The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. Cash equivalents are measured at fair value based on level one measurement, or quoted market prices, as defined by ASC No. 820, Fair Value Measurements and Disclosures. As of December 27, 2014 and September 27, 2014, fair value approximated the cost basis for cash equivalents. | |
Investments | Investments |
Investments, other than cash equivalents, are classified as “trading,” “available-for-sale” or “held-to-maturity,” in accordance with ASC No. 320, Investments-Debt & Equity Securities, and depending upon the nature of the investment, its ultimate maturity date in the case of debt securities, and management's intentions with respect to holding the securities. Investments classified as “trading” are reported at fair market value, with unrealized gains or losses included in earnings. Investments classified as “available-for-sale” are reported at fair market value, with net unrealized gains or losses reflected as a separate component of shareholders' equity (accumulated other comprehensive income (loss)). The fair market value of trading and available-for-sale securities is determined using quoted market prices at the balance sheet date. Investments classified as held-to-maturity are reported at amortized cost. Realized gains and losses are determined on the basis of specific identification of the securities sold. | |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts |
The Company maintains allowances for doubtful accounts for estimated losses resulting from its customers' failure to make required payments. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The Company is also subject to concentrations of customers and sales to a few geographic locations, which could also impact the collectability of certain receivables. If global or regional economic conditions deteriorate or political conditions were to change in some of the countries where the Company does business, it could have a significant impact on the results of operations, and the Company's ability to realize the full value of its accounts receivable. | |
Inventories | Inventories |
Inventories are stated at the lower of cost (on a first-in first-out basis) or market value. The Company generally provides reserves for obsolete inventory and for inventory considered to be in excess of demand. Demand is generally defined as 18 months forecasted future consumption for equipment, 24 months forecasted future consumption for all spare parts, and 12 months forecasted future consumption for expendable tools. Forecasted consumption is based upon internal projections, historical sales volumes, customer order activity and a review of consumable inventory levels at customers' facilities. The Company communicates forecasts of its future consumption to its suppliers and adjusts commitments to those suppliers accordingly. If required, the Company reserves the difference between the carrying value of its inventory and the lower of cost or market value, based upon projections about future consumption, and market conditions. If actual market conditions are less favorable than projections, additional inventory reserves may be required. | |
Property, Plant and Equipment | Property, Plant and Equipment |
Property, plant and equipment are carried at cost. The cost of additions and those improvements which increase the capacity or lengthen the useful lives of assets are capitalized, while repair and maintenance costs are expensed as incurred. Depreciation and amortization are provided on a straight-line basis over the estimated useful lives as follows: buildings 25 years; machinery and equipment 3 to 10 years; and leasehold improvements are based on the shorter of the life of lease or life of asset. Purchased computer software costs related to business and financial systems are amortized over a five-year period on a straight-line basis. | |
Valuation of Long-Lived Assets | Valuation of Long-Lived Assets |
In accordance with ASC No. 360, Property, Plant & Equipment ("ASC 360"), the Company's property, plant and equipment is tested for impairment based on undiscounted cash flows when triggering events occur, and if impaired, written-down to fair value based on either discounted cash flows or appraised values. ASC 360 also provides a single accounting model for long-lived assets to be disposed of by sale and establishes additional criteria that would have to be met to classify an asset as held for sale. The carrying amount of an asset or asset group is not recoverable to the extent it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group. Estimates of future cash flows used to test the recoverability of a long-lived asset or asset group must incorporate the entity's own assumptions about its use of the asset or asset group and must factor in all available evidence. | |
ASC 360 requires that long-lived assets be tested for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Such events include significant under-performance relative to historical internal forecasts or projected future operating results; significant changes in the manner of use of the assets; significant negative industry or economic trends; and significant changes in market capitalization. During the three months ended December 27, 2014, no triggering events occurred. | |
Accounting for Impairment of Goodwill | Accounting for Impairment of Goodwill |
The Company operates two reportable segments: Equipment and Expendable Tools. Goodwill was recorded in 2009 for the acquisition of Orthodyne Electronics Corporation ("Orthodyne"), which added wedge bonder products (also known as "reporting unit") to the Equipment business. | |
Accounting Standard Update 2011-08, Testing Goodwill for Impairment (“ASU 2011-08”), provides companies with the option to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If, after assessing the qualitative factors, a company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying value, then performing the two-step impairment test is unnecessary. However, if a company concludes otherwise, then it is required to perform the first step of the two-step goodwill impairment test. If the carrying value of a reporting unit exceeds its fair value in the first step of the test, then a company is required to perform the second step of the goodwill impairment test to measure the amount of the reporting unit's goodwill impairment loss, if any. | |
As part of the annual evaluation, the Company performs an impairment test of its goodwill in the fourth quarter of each fiscal year to coincide with the completion of its annual forecasting and refreshing of its business outlook processes. On an ongoing basis, the Company monitors if a “triggering” event has occurred that may have the effect of reducing the fair value of a reporting unit below its respective carrying value. 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 charge in the future. During the three months ended December 27, 2014, no triggering events occurred. | |
Impairment assessments inherently involve judgment as to the assumptions made about the expected future cash flows and the impact of market conditions on those assumptions. Future events and changing market conditions may impact the assumptions as to prices, costs, growth rates or other factors that may result in changes in the estimates of future cash flows. Although the Company believes the assumptions that it has used in testing for impairment are reasonable, significant changes in any one of the assumptions could produce a significantly different result. Indicators of potential impairment may lead the Company to perform interim goodwill impairment assessments, including significant and unforeseen customer losses, a significant adverse change in legal factors or in the business climate, a significant adverse action or assessment by a regulator, a significant stock price decline or unanticipated competition. | |
For further information on goodwill and other intangible assets, see Note 3 below. | |
Revenue Recognition | Revenue Recognition |
In accordance with ASC No. 605, Revenue Recognition, the Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, the collectability is reasonably assured, and customer acceptance, when applicable, has been received or we otherwise have been released from customer acceptance obligations. If terms of the sale provide for a customer acceptance period, revenue is recognized upon the expiration of the acceptance period or customer acceptance, whichever occurs first. The Company’s standard terms are ex works (the Company’s factory), with title transferring to its customer at the Company’s loading dock or upon embarkation. The Company has a small percentage of sales with other terms, and revenue is recognized in accordance with the terms of the related customer purchase order. | |
Shipping and handling costs billed to customers are recognized in net revenue. Shipping and handling costs paid by the Company are included in cost of sales. | |
Research and Development | Research and Development |
The Company charges research and development costs associated with the development of new products to expense when incurred. In certain circumstances, pre-production machines which the Company intends to sell are carried as inventory until sold. | |
Income Taxes | Income Taxes |
In accordance with ASC No. 740, Income Taxes, deferred income taxes are determined using the liability method. The Company records a valuation allowance to reduce its deferred tax assets to the amount it expects is more likely than not to be realized. While the Company has considered future taxable income and its ongoing tax planning strategies in assessing the need for the valuation allowance, if it were to determine that it would be able to realize its deferred tax assets in the future in excess of its net recorded amount, an adjustment to the deferred tax asset would increase income in the period when such determination is made. Likewise, should the Company determine it would not be able to realize all or part of its net deferred tax assets in the future, an adjustment to the deferred tax asset would decrease income in the period when such determination is made. | |
In accordance with ASC No. 740 Topic 10, Income Taxes, General (“ASC 740.10”), the Company accounts for uncertain tax positions taken or expected to be taken in its income tax return. Under ASC 740.10, the Company utilizes a two-step approach for evaluating uncertain tax positions. Step one, or recognition, requires a company to determine if the weight of available evidence indicates a tax position is more likely than not to be sustained upon audit, including resolution of related appeals or litigation processes, if any. Step two, or measurement, is based on the largest amount of benefit, which is more likely than not to be realized on settlement with the taxing authority. | |
Equity-Based Compensation | Equity-Based Compensation |
The Company accounts for equity-based compensation under the provisions of ASC No. 718, Compensation - Stock Compensation (“ASC 718”). ASC 718 requires the recognition of the fair value of the equity-based compensation in net income. Compensation expense associated with market-based restricted stock is determined using a Monte-Carlo valuation model, and compensation expense associated with time-based and performance-based restricted stock is determined based on the number of shares granted and the fair value on the date of grant. The fair value of the Company's stock option awards are estimated using a Black-Scholes option valuation model. In addition, the calculation of equity-based compensation costs requires that the Company estimate the number of awards that will be forfeited during the vesting period. The fair value of equity-based awards is amortized over the vesting period of the award and the Company elected to use the straight-line method for awards granted after the adoption of ASC 718. | |
Earnings per Share | Earnings per Share |
Earnings per share (“EPS”) are calculated in accordance with ASC No. 260, Earnings per Share. Basic EPS include only the weighted average number of common shares outstanding during the period. Diluted EPS includes the weighted average number of common shares and the dilutive effect of stock options, restricted stock and share unit awards and convertible subordinated notes outstanding during the period, when such instruments are dilutive. | |
In accordance with ASC No. 260.10.55, Earnings per Share - Implementation & Guidance, the Company treats all outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends as participating in undistributed earnings with common shareholders. Awards of this nature are considered participating securities and the two-class method of computing basic and diluted EPS must be applied. | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
There were no new accounting pronouncements applicable to the Company during the three months ended December 27, 2014. |
BALANCE_SHEET_COMPONENTS_Table
BALANCE SHEET COMPONENTS (Tables) | 3 Months Ended | ||||||||
Dec. 27, 2014 | |||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||
Components of significant balance sheet accounts | The following tables reflect the components of significant balance sheet accounts as of December 27, 2014 and September 27, 2014: | ||||||||
As of | |||||||||
(in thousands) | December 27, 2014 | September 27, 2014 | |||||||
Short term investments, available-for-sale: | |||||||||
Deposits maturing within one year (1) | $ | 10,787 | $ | 9,105 | |||||
Inventories, net: | |||||||||
Raw materials and supplies | $ | 22,712 | $ | 22,184 | |||||
Work in process | 24,545 | 18,783 | |||||||
Finished goods | 18,203 | 22,590 | |||||||
65,460 | 63,557 | ||||||||
Inventory reserves | (13,530 | ) | (13,863 | ) | |||||
$ | 51,930 | $ | 49,694 | ||||||
Property, plant and equipment, net: | |||||||||
Buildings and building improvements | $ | 31,178 | $ | 31,159 | |||||
Leasehold improvements | 13,873 | 13,962 | |||||||
Data processing equipment and software | 27,612 | 27,538 | |||||||
Machinery, equipment, furniture and fixtures | 47,593 | 45,442 | |||||||
120,256 | 118,101 | ||||||||
Accumulated depreciation | (67,463 | ) | (65,346 | ) | |||||
$ | 52,793 | $ | 52,755 | ||||||
Accrued expenses and other current liabilities: | |||||||||
Wages and benefits | $ | 13,355 | $ | 21,498 | |||||
Accrued customer obligations (2) | 6,347 | 8,999 | |||||||
Commissions and professional fees | 2,314 | 1,961 | |||||||
Deferred rent | 2,422 | 2,161 | |||||||
Severance | 617 | 1,067 | |||||||
Other | 7,489 | 8,045 | |||||||
$ | 32,544 | $ | 43,731 | ||||||
-1 | All short-term investments were classified as available-for-sale and were measured at fair value based on level one measurement, or quoted market prices, as defined by ASC 820. As of December 27, 2014 and September 27, 2014, fair value approximated the cost basis for short-term investments. The Company did not recognize any realized gains or losses on the sale of investments during the three months ended December 27, 2014 and December 28, 2013. | ||||||||
-2 | Represents customer advance payments, customer credit program, accrued warranty expense and accrued retrofit obligations. |
GOODWILL_AND_INTANGIBLE_ASSETS1
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended | ||||||||||
Dec. 27, 2014 | |||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||
Net intangible assets | The following table reflects net intangible assets as of December 27, 2014 and September 27, 2014: | ||||||||||
As of | Average estimated | ||||||||||
(dollar amounts in thousands) | December 27, 2014 | September 27, 2014 | useful lives (in years) | ||||||||
Wedge bonder developed technology | $ | 33,200 | $ | 33,200 | 7 | ||||||
Accumulated amortization | (29,644 | ) | (28,458 | ) | |||||||
Net wedge bonder developed technology | $ | 3,556 | $ | 4,742 | |||||||
Wedge bonder customer relationships | $ | 19,300 | $ | 19,300 | 5 | ||||||
Accumulated amortization | (19,300 | ) | (19,300 | ) | |||||||
Net wedge bonder customer relationships | $ | — | $ | — | |||||||
Wedge bonder trade name | $ | 4,600 | $ | 4,600 | 8 | ||||||
Accumulated amortization | (3,594 | ) | (3,451 | ) | |||||||
Net wedge bonder trade name | $ | 1,006 | $ | 1,149 | |||||||
Wedge bonder other intangible assets | $ | 2,500 | $ | 2,500 | 1.9 | ||||||
Accumulated amortization | (2,500 | ) | (2,500 | ) | |||||||
Net wedge bonder other intangible assets | $ | — | $ | — | |||||||
Net intangible assets | $ | 4,562 | $ | 5,891 | |||||||
Estimated annual amortization expense related to intangible assets | The following table reflects estimated annual amortization expense related to intangible assets as of December 27, 2014: | ||||||||||
As of | |||||||||||
(in thousands) | December 27, 2014 | ||||||||||
Remaining fiscal 2015 | $ | 3,988 | |||||||||
Fiscal 2016 | 574 | ||||||||||
Total amortization expense | $ | 4,562 | |||||||||
CASH_AND_CASH_EQUIVALENTS_Tabl
CASH AND CASH EQUIVALENTS (Tables) | 3 Months Ended | |||||||||||||||
Dec. 27, 2014 | ||||||||||||||||
Cash and Cash Equivalents [Abstract] | ||||||||||||||||
Cash, cash equivalents and short-term investments [Table Text Block] | Cash and cash equivalents consisted of the following as of December 27, 2014: | |||||||||||||||
(in thousands) | Amortized | Unrealized | Unrealized | Estimated | ||||||||||||
Cost | Gains | Losses | Fair Value | |||||||||||||
Current assets: | ||||||||||||||||
Cash | $ | 131,263 | $ | — | $ | — | $ | 131,263 | ||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | 327,742 | — | — | 327,742 | ||||||||||||
Time deposits | 134,085 | — | — | 134,085 | ||||||||||||
Commercial paper | 29,500 | — | — | 29,500 | ||||||||||||
Total cash and cash equivalents | 622,590 | — | — | 622,590 | ||||||||||||
Short-term investments: | ||||||||||||||||
Time deposits | 10,787 | — | — | 10,787 | ||||||||||||
Total short-term investments | 10,787 | — | — | 10,787 | ||||||||||||
Total cash, cash equivalents and short-term investments | $ | 633,377 | $ | — | $ | — | $ | 633,377 | ||||||||
Cash and cash equivalents consisted of the following as of September 27, 2014: | ||||||||||||||||
(in thousands) | Amortized | Unrealized | Unrealized | Estimated | ||||||||||||
Cost | Gains | Losses | Fair Value | |||||||||||||
Current assets: | ||||||||||||||||
Cash | $ | 130,668 | $ | — | $ | — | $ | 130,668 | ||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | 295,529 | — | — | 295,529 | ||||||||||||
Time deposits | 132,284 | — | — | 132,284 | ||||||||||||
Commercial paper | 29,500 | — | — | 29,500 | ||||||||||||
Total cash and cash equivalents | 587,981 | — | — | 587,981 | ||||||||||||
Short-term investments | ||||||||||||||||
Time deposits | 9,105 | — | — | 9,105 | ||||||||||||
Total short-term investments | 9,105 | — | — | 9,105 | ||||||||||||
Total cash, cash equivalents and short-term investments | $ | 597,086 | $ | — | $ | — | $ | 597,086 | ||||||||
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended | |||||||||||||||
Dec. 27, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Fair value of financial assets and liabilities | The fair value of our financial assets and liabilities at December 27, 2014 were determined using the following inputs: | |||||||||||||||
(in thousands) | Fair Value Measurements at Reporting Date Using | |||||||||||||||
Quoted Prices | Significant | Significant | ||||||||||||||
in Active | Other | Unobservable | ||||||||||||||
Markets for | Observable | Inputs | ||||||||||||||
Identical Assets | Inputs | |||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
Cash | $ | 131,263 | $ | 131,263 | $ | — | $ | — | ||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | 327,742 | 327,742 | — | — | ||||||||||||
Time deposits | 134,085 | 134,085 | — | — | ||||||||||||
Commerical paper | 29,500 | 29,500 | — | — | ||||||||||||
Short-term investments: | ||||||||||||||||
Time deposits | 10,787 | 10,787 | — | — | ||||||||||||
Total assets | $ | 633,377 | $ | 633,377 | $ | — | $ | — | ||||||||
The fair value of our financial assets and liabilities at September 27, 2014 were determined using the following inputs: | ||||||||||||||||
(in thousands) | Fair Value Measurements at Reporting Date Using | |||||||||||||||
Quoted Prices | Significant | Significant | ||||||||||||||
in Active | Other | Unobservable | ||||||||||||||
Markets for | Observable | Inputs | ||||||||||||||
Identical Assets | Inputs | |||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
Cash | $ | 130,668 | $ | 130,668 | $ | — | $ | — | ||||||||
Cash equivalents | ||||||||||||||||
Money market funds | 295,529 | 295,529 | — | — | ||||||||||||
Time deposits | 132,284 | 132,284 | — | — | ||||||||||||
Commerical paper | 29,500 | 29,500 | — | — | ||||||||||||
Short-term investments | ||||||||||||||||
Time deposits | 9,105 | 9,105 | — | — | ||||||||||||
Total assets | $ | 597,086 | $ | 597,086 | $ | — | $ | — | ||||||||
DERIVATIVES_FINANCIAL_INSTRUME1
DERIVATIVES FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended | ||||||||||||
Dec. 27, 2014 | |||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The fair value of derivative instruments on our Consolidated Balance Sheets as of December 27, 2014 was as follows: | ||||||||||||
As of | |||||||||||||
(in thousands) | December 27, 2014 | ||||||||||||
Notional Amount | Fair Value Asset Derivatives(1) | Fair Value Liability Derivatives(2) | |||||||||||
Derivatives designated as hedging instruments: | |||||||||||||
Foreign exchange forward contracts (3) | $ | 9,537 | $ | — | $ | 392 | |||||||
Total derivatives | $ | 9,537 | $ | — | $ | 392 | |||||||
-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 Balance Sheets. | ||||||||||||
-2 | Included in accrued expenses and other current liabilities on our Consolidated Balance Sheets. | ||||||||||||
-3 | Hedged amounts expected to be recognized to income within the next twelve months. | ||||||||||||
Derivative Instruments, Gain (Loss) | The effect of derivative instruments designated as cash flow hedges in our Consolidated Statements of Income for the three months months ended December 27, 2014 was as follows: | ||||||||||||
(in thousands) | Three months ended | ||||||||||||
December 27, 2014 | |||||||||||||
Foreign exchange forward contract in cash flow hedging relationships: | |||||||||||||
Net loss recognized in OCI, net of tax(1) | $ | (640 | ) | ||||||||||
Net loss reclassified from accumulated OCI into income, net of tax(2) | $ | (249 | ) | ||||||||||
Net gain recognized in income(3) | $ | — | |||||||||||
(1)Net change in the fair value of the effective portion classified in other comprehensive income (“OCI”). | |||||||||||||
(2)Effective portion classified as selling, general and administrative expense. | |||||||||||||
(3)Ineffective portion and amount excluded from effectiveness testing classified in selling, general and administrative expense. |
SHAREHOLDERS_EQUITY_AND_EMPLOY1
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Tables) | 3 Months Ended | ||||||||
Dec. 27, 2014 | |||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||
Company’s matching contributions to the Plan | The following table reflects the Company’s matching contributions to the Plan during the three months ended December 27, 2014 and December 28, 2013: | ||||||||
Three months ended | |||||||||
(in thousands) | December 27, 2014 | December 28, 2013 | |||||||
Cash | $ | 295 | $ | 281 | |||||
Accumulated other comprehensive income reflected on the Consolidated Balance Sheets | The following table reflects accumulated other comprehensive income reflected on the Consolidated Balance Sheets as of December 27, 2014 and September 27, 2014: | ||||||||
As of | |||||||||
(in thousands) | December 27, 2014 | September 27, 2014 | |||||||
Gain from foreign currency translation adjustments | $ | 2,520 | $ | 3,199 | |||||
Unrecognized actuarial loss Switzerland pension plan, net of tax | (609 | ) | (609 | ) | |||||
Switzerland pension plan curtailment | (346 | ) | (346 | ) | |||||
Unrealized loss on hedging | (392 | ) | — | ||||||
Accumulated other comprehensive income | $ | 1,173 | $ | 2,244 | |||||
Restricted stock and common stock granted | The following table reflects restricted stock and common stock granted during the three months ended December 27, 2014 and December 28, 2013: | ||||||||
Three months ended | |||||||||
(shares in thousands) | December 27, 2014 | December 28, 2013 | |||||||
Market-based restricted stock | 232 | 324 | |||||||
Time-based restricted stock | 472 | 581 | |||||||
Common stock | 13 | 15 | |||||||
Equity-based compensation in shares | 717 | 920 | |||||||
Equity-based compensation expense | The following table reflects total equity-based compensation expense, which includes restricted stock, stock options and common stock, included in the Consolidated Statements of Operations during the three months ended December 27, 2014 and December 28, 2013: | ||||||||
Three months ended | |||||||||
(in thousands) | December 27, 2014 | December 28, 2013 | |||||||
Cost of sales | $ | 128 | $ | 105 | |||||
Selling, general and administrative | 2,499 | 2,616 | |||||||
Research and development | 808 | 675 | |||||||
Total equity-based compensation expense | $ | 3,435 | $ | 3,396 | |||||
The following table reflects equity-based compensation expense, by type of award, for the three months ended December 27, 2014 and December 28, 2013: | |||||||||
Three months ended | |||||||||
(in thousands) | December 27, 2014 | December 28, 2013 | |||||||
Market-based restricted stock | $ | 1,350 | $ | 1,472 | |||||
Time-based restricted stock | 1,869 | 1,705 | |||||||
Performance-based restricted stock | 33 | 33 | |||||||
Stock options | 3 | 6 | |||||||
Common stock | 180 | 180 | |||||||
Total equity-based compensation expense | $ | 3,435 | $ | 3,396 | |||||
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 3 Months Ended | ||||||||||||||||
Dec. 27, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||
Reconciliation of shares used in the basic and diluted net income per share computation | The following tables reflect a reconciliation of the shares used in the basic and diluted net income (loss) per share computation for the three months ended December 27, 2014 and December 28, 2013: | ||||||||||||||||
Three months ended | |||||||||||||||||
(in thousands, except per share data) | December 27, 2014 | December 28, 2013 | |||||||||||||||
Basic | Diluted | Basic | Diluted | ||||||||||||||
NUMERATOR: | |||||||||||||||||
Net income / (loss) | $ | 7,842 | $ | 7,842 | $ | (1,957 | ) | $ | (1,957 | ) | |||||||
DENOMINATOR: | |||||||||||||||||
Weighted average shares outstanding - Basic | 76,888 | 76,888 | 75,912 | 75,912 | |||||||||||||
Stock options | 94 | — | |||||||||||||||
Time-based restricted stock | 213 | — | |||||||||||||||
Market-based restricted stock | 237 | — | |||||||||||||||
Weighted average shares outstanding - Diluted | 77,432 | 75,912 | |||||||||||||||
EPS: | |||||||||||||||||
Net income / (loss) per share - Basic | $ | 0.1 | $ | 0.1 | $ | (0.03 | ) | $ | (0.03 | ) | |||||||
Effect of dilutive shares | — | — | |||||||||||||||
Net income / (loss) per share - Diluted | $ | 0.1 | $ | (0.03 | ) | ||||||||||||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 3 Months Ended | |||||||
Dec. 27, 2014 | ||||||||
Income Tax Disclosure [Abstract] | ||||||||
Provision for income taxes and the effective tax rate | The following table reflects the provision for income taxes and the effective tax rate for the three months ended December 27, 2014 and December 28, 2013: | |||||||
Three months ended | ||||||||
(dollar amounts in thousands) | December 27, 2014 | December 28, 2013 | ||||||
Income / (loss) from operations before income taxes | $ | 9,685 | $ | (2,048 | ) | |||
Provision (benefit) for income taxes | 1,843 | (91 | ) | |||||
Net income / (loss) | $ | 7,842 | $ | (1,957 | ) | |||
Effective tax rate | 19 | % | 4.4 | % | ||||
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 3 Months Ended | ||||||||
Dec. 27, 2014 | |||||||||
Segment Reporting [Abstract] | |||||||||
Operating information by segment | The following table reflects operating information by segment for the three months ended December 27, 2014 and December 28, 2013: | ||||||||
Three months ended | |||||||||
(in thousands) | December 27, 2014 | December 28, 2013 | |||||||
Net revenue: | |||||||||
Equipment | $ | 90,956 | $ | 63,145 | |||||
Expendable Tools | 16,482 | 15,968 | |||||||
Net revenue | 107,438 | 79,113 | |||||||
Cost of sales: | |||||||||
Equipment | 46,099 | 34,473 | |||||||
Expendable Tools | 6,605 | 6,275 | |||||||
Cost of sales | 52,704 | 40,748 | |||||||
Gross profit: | |||||||||
Equipment | 44,857 | 28,672 | |||||||
Expendable Tools | 9,877 | 9,693 | |||||||
Gross profit | 54,734 | 38,365 | |||||||
Operating expenses: | |||||||||
Equipment | 39,411 | 35,552 | |||||||
Expendable Tools | 5,597 | 5,021 | |||||||
Operating expenses | 45,008 | 40,573 | |||||||
Income / (loss) from operations: | |||||||||
Equipment | 5,446 | (6,880 | ) | ||||||
Expendable Tools | 4,280 | 4,672 | |||||||
Income / (loss) from operations | $ | 9,726 | $ | (2,208 | ) | ||||
Assets by segment | The following table reflects assets by segment as of December 27, 2014 and September 27, 2014: | ||||||||
As of | |||||||||
(in thousands) | December 27, 2014 | September 27, 2014 | |||||||
Segment assets: | |||||||||
Equipment | $ | 795,040 | $ | 839,847 | |||||
Expendable Tools | 132,802 | 104,601 | |||||||
Total assets | $ | 927,842 | $ | 944,448 | |||||
Capital expenditures and depreciation expense | The following tables reflect capital expenditures and depreciation expense for the three months ended December 27, 2014 and December 28, 2013: | ||||||||
Three months ended | |||||||||
(in thousands) | December 27, 2014 | December 28, 2013 | |||||||
Capital expenditures: | |||||||||
Equipment | $ | 1,736 | $ | 4,232 | |||||
Expendable Tools | 517 | 1,197 | |||||||
Capital expenditures | $ | 2,253 | $ | 5,429 | |||||
Three months ended | |||||||||
(in thousands) | December 27, 2014 | December 28, 2013 | |||||||
Depreciation expense: | |||||||||
Equipment | $ | 1,585 | $ | 1,098 | |||||
Expendable Tools | 642 | 565 | |||||||
Depreciation expense | $ | 2,227 | $ | 1,663 | |||||
COMMITMENTS_CONTINGENCIES_AND_1
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Dec. 27, 2014 | |||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||
Reserve for product warranty activity | The following table reflects the reserve for product warranty activity for the three months ended December 27, 2014 and December 28, 2013: | ||||||||||||||||||||||||
Three months ended | |||||||||||||||||||||||||
(in thousands) | December 27, 2014 | December 28, 2013 | |||||||||||||||||||||||
Reserve for product warranty, beginning of period | $ | 1,542 | $ | 1,194 | |||||||||||||||||||||
Provision for product warranty | 199 | 148 | |||||||||||||||||||||||
Product warranty costs paid | (526 | ) | (455 | ) | |||||||||||||||||||||
Reserve for product warranty, end of period | $ | 1,215 | $ | 887 | |||||||||||||||||||||
Obligations not reflected on the Consolidated Balance Sheet | The following table reflects obligations not reflected on the Consolidated Balance Sheet as of December 27, 2014: | ||||||||||||||||||||||||
Payments due by fiscal year | |||||||||||||||||||||||||
(in thousands) | Total | 2015 | 2016 | 2017 | 2018 | thereafter | |||||||||||||||||||
Inventory purchase obligation (1) | $ | 77,658 | $ | 77,658 | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Operating lease obligations (2) | 28,537 | 2,892 | 3,414 | 3,039 | 2,566 | 16,626 | |||||||||||||||||||
Total | $ | 106,195 | $ | 80,550 | $ | 3,414 | $ | 3,039 | $ | 2,566 | $ | 16,626 | |||||||||||||
-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. | ||||||||||||||||||||||||
-2 | The Company has minimum rental commitments under various leases (excluding taxes, insurance, maintenance and repairs, which are also paid by the Company) primarily for various facility and equipment leases, which expire periodically through 2018 (not including lease extension options, if applicable). | ||||||||||||||||||||||||
Pursuant to ASC No. 840, Leases, for lessee's involvement in asset construction, the Company was considered the owner of the Building during the construction phase of the ADL. The building was completed on December 1, 2013 and Pte signed an agreement with the Landlord to lease from the Landlord approximately 198,000 square feet , representing approximately 70% of the Building. Following the completion of construction, we performed a sale-leaseback analysis pursuant to ASC 840-40 and determined that because of our continuing involvement, ASC 840-40 precluded us from derecognizing the asset and associated financing obligation. As such, we reclassified the asset from construction in progress to Property, Plant and Equipment and began to depreciate the building over its estimated useful life of twenty-five years. We concluded that the term of the financing obligation is 10 years. This is equal to the non-cancellable term of our lease agreement with the Landlord. As of December 27, 2014, we recorded a financing obligation of $18.3 million. The financing obligation is not reflected in the table above. | |||||||||||||||||||||||||
Significant customer concentrations as a percentage of total accounts receivable | The following table reflects significant customer concentrations as a percentage of total accounts receivable as of December 27, 2014 and December 28, 2013: | ||||||||||||||||||||||||
As of | |||||||||||||||||||||||||
December 27, 2014 | December 28, 2013 | ||||||||||||||||||||||||
Haoseng Industrial Co., Ltd | 19 | % | 10.8 | % | |||||||||||||||||||||
Siliconware Precision Industries Co. Limited | * | 27.4 | % | ||||||||||||||||||||||
* Represents less than 10% of total accounts receivable |
BASIS_OF_PRESENTATION_Inventor
BASIS OF PRESENTATION (Inventories) (Narrative) (Details) | 3 Months Ended |
Dec. 27, 2014 | |
Equipment [Member] | |
Inventory [Line Items] | |
Reserves For Inventory In Excess Of Demand Inventory Future Consumption Period | 18 months |
Spare Parts [Member] | |
Inventory [Line Items] | |
Reserves For Inventory In Excess Of Demand Inventory Future Consumption Period | 24 months |
Expendable Tools [Member] | |
Inventory [Line Items] | |
Reserves For Inventory In Excess Of Demand Inventory Future Consumption Period | 12 months |
BASIS_OF_PRESENTATION_Property
BASIS OF PRESENTATION (Property, Plant and Equipment) (Narrative) (Details) | 3 Months Ended |
Dec. 27, 2014 | |
Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 25 years |
Leaseholds and Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Estimated Useful Lives | based on the shorter of the life of lease or life of asset |
Software and Software Development Costs [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Minimum [Member] | Machinery and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Maximum [Member] | Machinery and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
BALANCE_SHEET_COMPONENTS_Compo
BALANCE SHEET COMPONENTS (Components of significant balance sheet accounts) (Details) (USD $) | Dec. 27, 2014 | Sep. 27, 2014 | ||
In Thousands, unless otherwise specified | ||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Deposits maturing within one year (1) | $10,787 | [1] | $9,105 | [1] |
Inventories, net: | ||||
Raw materials and supplies | 22,712 | 22,184 | ||
Work in process | 24,545 | 18,783 | ||
Finished goods | 18,203 | 22,590 | ||
Inventory, gross | 65,460 | 63,557 | ||
Inventory reserves | -13,530 | -13,863 | ||
Inventories, net | 51,930 | 49,694 | ||
Property, plant and equipment, net: | ||||
Buildings and building improvements | 31,178 | 31,159 | ||
Leasehold improvements | 13,873 | 13,962 | ||
Data processing equipment and software | 27,612 | 27,538 | ||
Machinery, equipment, furniture and fixtures | 47,593 | 45,442 | ||
Property, plant and equipment, gross | 120,256 | 118,101 | ||
Accumulated depreciation | -67,463 | -65,346 | ||
Property, plant and equipment, net | 52,793 | 52,755 | ||
Accrued expenses and other current liabilities: | ||||
Wages and benefits | 13,355 | 21,498 | ||
Accrued customer obligations (2) | 6,347 | [2] | 8,999 | [2] |
Commissions and professional fees | 2,314 | 1,961 | ||
Deferred rent | 2,422 | 2,161 | ||
Severance | 617 | 1,067 | ||
Other | 7,489 | 8,045 | ||
Accrued expenses and other current liabilities | $32,544 | $43,731 | ||
[1] | All short-term investments were classified as available-for-sale and were measured at fair value based on level one measurement, or quoted market prices, as defined by ASC 820. As of December 27, 2014 and September 27, 2014, fair value approximated the cost basis for short-term investments. The Company did not recognize any realized gains or losses on the sale of investments during the three months ended December 27, 2014 and December 28, 2013. | |||
[2] | Represents customer advance payments, customer credit program, accrued warranty expense and accrued retrofit obligations. |
GOODWILL_AND_INTANGIBLE_ASSETS2
GOODWILL AND INTANGIBLE ASSETS (Net intangible assets) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 27, 2014 | Sep. 27, 2014 |
Finite-Lived Intangible Assets [Line Items] | ||
Net intangible assets | $4,562 | $5,891 |
Wedge bonder developed technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | 33,200 | 33,200 |
Accumulated amortization | -29,644 | -28,458 |
Net intangible assets | 3,556 | 4,742 |
Average estimated useful lives (in years) | 7 years | |
Wedge bonder customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | 19,300 | 19,300 |
Accumulated amortization | -19,300 | -19,300 |
Net intangible assets | 0 | 0 |
Average estimated useful lives (in years) | 5 years | |
Wedge bonder trade name [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | 4,600 | 4,600 |
Accumulated amortization | -3,594 | -3,451 |
Net intangible assets | 1,006 | 1,149 |
Average estimated useful lives (in years) | 8 years | |
Wedge bonder other intangible assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | 2,500 | 2,500 |
Accumulated amortization | -2,500 | -2,500 |
Net intangible assets | $0 | $0 |
Average estimated useful lives (in years) | 1 year 10 months 24 days |
GOODWILL_AND_INTANGIBLE_ASSETS3
GOODWILL AND INTANGIBLE ASSETS (Estimated annual amortization expense) (Details) (USD $) | Dec. 27, 2014 |
In Thousands, unless otherwise specified | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remaining fiscal 2015 | $3,988 |
Fiscal 2016 | 574 |
Total amortization expense | $4,562 |
CASH_AND_CASH_EQUIVALENTS_Deta
CASH AND CASH EQUIVALENTS (Details) (USD $) | Dec. 27, 2014 | Sep. 27, 2014 | Dec. 28, 2013 | Sep. 28, 2013 |
In Thousands, unless otherwise specified | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents, Amortized Cost | $622,590 | $587,981 | $550,598 | $521,788 |
Cash and cash equivalents, Estimated Fair Value | 622,590 | 587,981 | ||
Short-term investments, Amortized Cost | 10,787 | 9,105 | ||
Short-term investments, Estimated Fair Value | 10,787 | 9,105 | ||
Total cash, cash equivalents and short-term investments, Amortized Cost | 633,377 | 597,086 | ||
Total cash, cash equivalents and short-term investments, Estimated Fair Value | 633,377 | 597,086 | ||
Cash [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents, Amortized Cost | 131,263 | 130,668 | ||
Cash and cash equivalents, Estimated Fair Value | 131,263 | 130,668 | ||
Cash equivalents, Money market funds [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents, Amortized Cost | 327,742 | 295,529 | ||
Cash and cash equivalents, Estimated Fair Value | 327,742 | 295,529 | ||
Cash equivalents, Time deposits [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents, Amortized Cost | 134,085 | 132,284 | ||
Cash and cash equivalents, Estimated Fair Value | 134,085 | 132,284 | ||
Commercial Paper [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents, Amortized Cost | 29,500 | 29,500 | ||
Cash and cash equivalents, Estimated Fair Value | 29,500 | 29,500 | ||
Short-term investments, Time deposits [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Short-term investments, Amortized Cost | 10,787 | 9,105 | ||
Short-term investments, Estimated Fair Value | $10,787 | $9,105 |
FAIR_VALUE_MEASUREMENTS_Fair_v
FAIR VALUE MEASUREMENTS (Fair value of financial assets and liabilities) (Details) (USD $) | Dec. 27, 2014 | Sep. 27, 2014 |
In Thousands, unless otherwise specified | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Cash and Cash Equivalents | $622,590 | $587,981 |
Investments | 10,787 | 9,105 |
Total Assets | 633,377 | 597,086 |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total Assets | 633,377 | 597,086 |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total Assets | 633,377 | 597,086 |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total Assets | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Total Assets | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Cash [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Cash and Cash Equivalents | 131,263 | 130,668 |
Fair Value, Measurements, Recurring [Member] | Cash [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Cash and Cash Equivalents | 131,263 | 130,668 |
Fair Value, Measurements, Recurring [Member] | Cash [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Cash and Cash Equivalents | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Cash [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Cash and Cash Equivalents | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Cash equivalents, Money market funds [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Cash and Cash Equivalents | 327,742 | 295,529 |
Fair Value, Measurements, Recurring [Member] | Cash equivalents, Money market funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Cash and Cash Equivalents | 327,742 | 295,529 |
Fair Value, Measurements, Recurring [Member] | Cash equivalents, Money market funds [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Cash and Cash Equivalents | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Cash equivalents, Money market funds [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Cash and Cash Equivalents | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Cash equivalents, Time deposits [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Cash and Cash Equivalents | 134,085 | 132,284 |
Fair Value, Measurements, Recurring [Member] | Cash equivalents, Time deposits [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Cash and Cash Equivalents | 134,085 | 132,284 |
Fair Value, Measurements, Recurring [Member] | Cash equivalents, Time deposits [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Cash and Cash Equivalents | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Cash equivalents, Time deposits [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Cash and Cash Equivalents | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Commercial Paper [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Cash and Cash Equivalents | 29,500 | 29,500 |
Fair Value, Measurements, Recurring [Member] | Commercial Paper [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Cash and Cash Equivalents | 29,500 | 29,500 |
Fair Value, Measurements, Recurring [Member] | Commercial Paper [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Cash and Cash Equivalents | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Commercial Paper [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Cash and Cash Equivalents | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Short-term investments, Time deposits [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Investments | 10,787 | 9,105 |
Fair Value, Measurements, Recurring [Member] | Short-term investments, Time deposits [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Investments | 10,787 | 9,105 |
Fair Value, Measurements, Recurring [Member] | Short-term investments, Time deposits [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Short-term investments, Time deposits [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Investments | $0 | $0 |
DERIVATIVES_FINANCIAL_INSTRUME2
DERIVATIVES FINANCIAL INSTRUMENTS (Fair value of derivative instruments) (Details) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 27, 2014 | Sep. 27, 2014 |
Derivatives, Fair Value [Line Items] | ||
Total derivative, Notional Amount | $9,537 | |
Recognition of hedging effectiveness period | 12 months | |
Prepaid Expenses and Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total derivative, Fair Value Asset Derivatives | 0 | |
Accrued Expenses and Other Current Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total derivative, Fair Value Liability Derivatives | 392 | |
Designated as Hedging Instrument [Member] | Foreign Exchange Forward [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Foreign exchange forward contract, term of contract | 6 months | |
Total derivative, Notional Amount | 9,537 | |
Designated as Hedging Instrument [Member] | Foreign Exchange Forward [Member] | Prepaid Expenses and Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total derivative, Fair Value Asset Derivatives | 0 | |
Designated as Hedging Instrument [Member] | Foreign Exchange Forward [Member] | Accrued Expenses and Other Current Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total derivative, Fair Value Liability Derivatives | $392 |
DERIVATIVES_FINANCIAL_INSTRUME3
DERIVATIVES FINANCIAL INSTRUMENTS (Gain (loss) of derivative instruments) (Details) (Foreign Exchange Forward [Member], Designated as Hedging Instrument [Member], Cash Flow Hedging [Member], USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Dec. 27, 2014 |
Other Comprehensive Income (Loss) [Member] | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Net gain (loss) recognized in OCI, net of tax | ($640) |
Selling, General and Administrative Expenses [Member] | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Net gain (loss) reclassified from accumulated OCI into income, net of tax | -249 |
Net gain (loss) recognized in income | $0 |
DEBT_AND_OTHER_OBLIGATIONS_DEB1
DEBT AND OTHER OBLIGATIONS DEBT AND OTHER OBLIGATIONS (Details) | 0 Months Ended | 12 Months Ended | ||||||
Nov. 19, 2014 | Dec. 27, 2014 | Sep. 27, 2014 | Dec. 01, 2013 | Nov. 22, 2013 | 7-May-12 | Sep. 27, 2014 | Dec. 01, 2013 | |
USD ($) | USD ($) | USD ($) | USD ($) | SGD | sqft | K&S Corporate Headquarters [Member] | K&S Corporate Headquarters [Member] | |
SGD | sqft | |||||||
renewal_option | ||||||||
Capital Leased Assets [Line Items] | ||||||||
Lease Agreement Term | 10 years | |||||||
Lessee Leasing Arrangements, Capital Leases, Number of Renewal Options | 2 | |||||||
Lessee Leasing Arrangements, Capital Leases, Renewal Term | 10 years | |||||||
Annual Rent and Service Charge Minimum Range | 4,000,000 | |||||||
Annual Rent and Service Charge Maximum Range | 5,000,000 | |||||||
Area of Land | 198,000 | 198,000 | ||||||
Percentage Of Building Area To Be Leased From Landlord | 70.00% | |||||||
Financing obligation | 18,261,000 | 19,102,000 | 20,000,000 | |||||
Capital Lease Obligations, Interest Rate, Effective Percentage | 6.30% | |||||||
Line of Credit Facility, Increase (Decrease), Net | 3,500,000 | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | 5,000,000 | |||||||
Guarantor Obligations, Current Carrying Value | 3,400,000 |
SHAREHOLDERS_EQUITY_AND_EMPLOY2
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Matching contributions to the Plan) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 27, 2014 | Dec. 28, 2013 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Cash | $295 | $281 |
SHAREHOLDERS_EQUITY_AND_EMPLOY3
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Accumulated other comprehensive income) (Details) (USD $) | Dec. 27, 2014 | Sep. 27, 2014 |
In Thousands, unless otherwise specified | ||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Gain from foreign currency translation adjustments | $2,520 | $3,199 |
Unrecognized actuarial loss Switzerland pension plan, net of tax | -609 | -609 |
Switzerland pension plan curtailment | -346 | -346 |
Unrealized loss on hedging | -392 | 0 |
Accumulated other comprehensive income | $1,173 | $2,244 |
SHAREHOLDERS_EQUITY_AND_EMPLOY4
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Restricted stock and common stock granted) (Details) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 27, 2014 | Dec. 28, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity-based compensation in shares | 717 | 920 |
Market-based restricted stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity-based compensation in shares | 232 | 324 |
Time-based restricted stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity-based compensation in shares | 472 | 581 |
Common stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity-based compensation in shares | 13 | 15 |
SHAREHOLDERS_EQUITY_AND_EMPLOY5
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Total equity-based compensation expense) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 27, 2014 | Dec. 28, 2013 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total equity-based compensation expense | $3,435 | $3,396 |
Market-based restricted stock [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total equity-based compensation expense | 1,350 | 1,472 |
Time-based restricted stock [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total equity-based compensation expense | 1,869 | 1,705 |
Performance-based restricted stock | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total equity-based compensation expense | 33 | 33 |
Stock options [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total equity-based compensation expense | 3 | 6 |
Common stock [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total equity-based compensation expense | 180 | 180 |
Cost of sales [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total equity-based compensation expense | 128 | 105 |
Selling, general and administrative (1) [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total equity-based compensation expense | 2,499 | 2,616 |
Research and development [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total equity-based compensation expense | $808 | $675 |
SHAREHOLDERS_EQUITY_AND_EMPLOY6
SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS (Narrative) (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Dec. 27, 2014 | Aug. 14, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock Repurchase Program, Authorized Amount | $100 | |
Description Of Maximum Percentage Of Employee Contributions and Matching Contributions Based Upon Years Of Service | employee contributions and matching Company contributions up to 4% or 6% | |
Share-based Compensation Arrangement by Share-based Payment Award, Discount from Market Price, Offering Date | 100.00% | |
Relative Total Shareholder Return Average Stock Price Calculation Period | 90 days | |
Total Shareholder Return Award Performance Measurement Period | 3 years | |
Treasury Stock, Shares, Acquired | 0.6 | |
Treasury Stock, Value, Acquired, Par Value Method | $7.60 | |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Defined Contribution Plan, Employer Matching Contribution, Percent | 4.00% | |
Share Based Compensation Arrangement By Share Based Payment Award Vesting Percentage | 0.00% | |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Defined Contribution Plan, Employer Matching Contribution, Percent | 6.00% | |
Share Based Compensation Arrangement By Share Based Payment Award Vesting Percentage | 200.00% | |
Equity Incentive Plan 2009 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 3.1 |
EARNINGS_PER_SHARE_Narrative_D
EARNINGS PER SHARE (Narrative) (Details) | 3 Months Ended |
In Millions, unless otherwise specified | Dec. 28, 2013 |
Employee Stock [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from computation of earnings per share | 0.1 |
Restricted Stock [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from computation of earnings per share | 0.8 |
EARNINGS_PER_SHARE_Reconciliat
EARNINGS PER SHARE (Reconciliation of the shares used in the basic and diluted net income per share computation) (Details) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 27, 2014 | Dec. 28, 2013 |
NUMERATOR: | ||
Net income / (loss) | $7,842 | ($1,957) |
DENOMINATOR: | ||
Weighted average shares outstanding - Basic (in shares) | 76,888 | 75,912 |
Stock options (in shares) | 94 | 0 |
Time-based restricted stock (in shares) | 213 | 0 |
Market-based restricted stock (in shares) | 237 | 0 |
Weighted average shares outstanding - Diluted | 77,432 | 75,912 |
EPS: | ||
Net income per share - Basic (in dollars per share) | $0.10 | ($0.03) |
Effect of dilutive shares (in dollars per share) | $0 | $0 |
Net income per share - Diluted (in dollars per share) | $0.10 | ($0.03) |
INCOME_TAXES_Provision_for_inc
INCOME TAXES (Provision for income taxes and the effective tax rate) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 27, 2014 | Dec. 28, 2013 | Sep. 28, 2013 |
Income Tax Disclosure [Abstract] | |||
Income / (loss) from operations before income taxes | $9,685 | ($2,048) | |
Provision (benefit) for income taxes | 1,843 | -91 | |
Net income / (loss) | $7,842 | ($1,957) | |
Effective tax rate | 19.00% | 4.40% | 18.30% |
INCOME_TAXES_Narrative_Details
INCOME TAXES (Narrative) (Details) | 3 Months Ended | 12 Months Ended | |
Dec. 27, 2014 | Dec. 28, 2013 | Sep. 28, 2013 | |
Income Tax Disclosure [Abstract] | |||
Effective Income Tax Rate, Continuing Operations | 19.00% | 4.40% | 18.30% |
SEGMENT_INFORMATION_Operating_
SEGMENT INFORMATION (Operating information by segment) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 27, 2014 | Dec. 28, 2013 |
Net revenue: | ||
Net revenue | $107,438 | $79,113 |
Cost of sales : | ||
Cost of sales | 52,704 | 40,748 |
Gross profit : | ||
Gross profit | 54,734 | 38,365 |
Operating expenses: | ||
Operating expenses | 45,008 | 40,573 |
Income from operations: | ||
Income from operations | 9,726 | -2,208 |
Equipment [Member] | ||
Net revenue: | ||
Net revenue | 90,956 | 63,145 |
Cost of sales : | ||
Cost of sales | 46,099 | 34,473 |
Gross profit : | ||
Gross profit | 44,857 | 28,672 |
Operating expenses: | ||
Operating expenses | 39,411 | 35,552 |
Income from operations: | ||
Income from operations | 5,446 | -6,880 |
Expendable Tools [Member] | ||
Net revenue: | ||
Net revenue | 16,482 | 15,968 |
Cost of sales : | ||
Cost of sales | 6,605 | 6,275 |
Gross profit : | ||
Gross profit | 9,877 | 9,693 |
Operating expenses: | ||
Operating expenses | 5,597 | 5,021 |
Income from operations: | ||
Income from operations | $4,280 | $4,672 |
SEGMENT_INFORMATION_Assets_by_
SEGMENT INFORMATION (Assets by segment) (Details) (USD $) | Dec. 27, 2014 | Sep. 27, 2014 |
In Thousands, unless otherwise specified | ||
Segment assets: | ||
Total assets | $927,842 | $944,448 |
Equipment [Member] | ||
Segment assets: | ||
Total assets | 795,040 | 839,847 |
Expendable Tools [Member] | ||
Segment assets: | ||
Total assets | $132,802 | $104,601 |
SEGMENT_INFORMATION_Capital_ex
SEGMENT INFORMATION (Capital expenditures and depreciation expense by segment) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 27, 2014 | Dec. 28, 2013 |
Capital expenditures: | ||
Property, Plant and Equipment, Additions | $2,253 | $5,429 |
Depreciation expense: | ||
Depreciation expense | 2,227 | 1,663 |
Equipment [Member] | ||
Capital expenditures: | ||
Property, Plant and Equipment, Additions | 1,736 | 4,232 |
Depreciation expense: | ||
Depreciation expense | 1,585 | 1,098 |
Expendable Tools [Member] | ||
Capital expenditures: | ||
Property, Plant and Equipment, Additions | 517 | 1,197 |
Depreciation expense: | ||
Depreciation expense | $642 | $565 |
SEGMENT_INFORMATION_Narrative_
SEGMENT INFORMATION (Narrative) (Details) | 3 Months Ended |
Dec. 27, 2014 | |
segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
COMMITMENTS_CONTINGENCIES_AND_2
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Reserve for product warranty activity) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 27, 2014 | Dec. 28, 2013 |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||
Reserve for product warranty, beginning of period | $1,542 | $1,194 |
Provision for product warranty | 199 | 148 |
Product warranty costs paid | -526 | -455 |
Reserve for product warranty, end of period | $1,215 | $887 |
COMMITMENTS_CONTINGENCIES_AND_3
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Obligations not reflected on the Consolidated Balance Sheet) (Details) (USD $) | Dec. 27, 2014 | |
In Thousands, unless otherwise specified | ||
Commitments and Contingencies Disclosure [Abstract] | ||
Inventory purchase obligation | $77,658 | [1] |
Inventory purchase obligation, Payments due by fiscal year 2015 | 77,658 | [1] |
Inventory purchase obligation, Payments due by fiscal year 2016 | 0 | [1] |
Inventory purchase obligation, Payments due by fiscal year 2017 | 0 | [1] |
Inventory purchase obligation, Payments due by fiscal year 2018 | 0 | [1] |
Inventory purchase obligation, Payments due by fiscal year thereafter | 0 | [1] |
Operating lease obligations | 28,537 | [2] |
Operating lease obligations, Payments due by fiscal year 2015 | 2,892 | [2] |
Operating lease obligations, Payments due by fiscal year 2016 | 3,414 | [2] |
Operating lease obligations, Payments due by fiscal year 2017 | 3,039 | [2] |
Operating lease obligations, Payments due by fiscal year 2018 | 2,566 | [2] |
Operating lease obligations, Payments due by fiscal year thereafter | 16,626 | [2] |
Total | 106,195 | |
Total, Payments due by fiscal year 2015 | 80,550 | |
Total, Payments due by fiscal year 2016 | 3,414 | |
Total, Payments due by fiscal year 2017 | 3,039 | |
Total, Payments due by fiscal year 2018 | 2,566 | |
Total, Payments due by fiscal year thereafter | $16,626 | |
[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. | |
[2] | The Company has minimum rental commitments under various leases (excluding taxes, insurance, maintenance and repairs, which are also paid by the Company) primarily for various facility and equipment leases, which expire periodically through 2018 (not including lease extension options, if applicable). Pursuant to ASC No. 840, Leases, for lessee's involvement in asset construction, the Company was considered the owner of the Building during the construction phase of the ADL. The building was completed on December 1, 2013 and Pte signed an agreement with the Landlord to lease from the Landlord approximately 198,000 square feet , representing approximately 70% of the Building. Following the completion of construction, we performed a sale-leaseback analysis pursuant to ASC 840-40 and determined that because of our continuing involvement, ASC 840-40 precluded us from derecognizing the asset and associated financing obligation. As such, we reclassified the asset from construction in progress to Property, Plant and Equipment and began to depreciate the building over its estimated useful life of twenty-five years. We concluded that the term of the financing obligation is 10 years. This is equal to the non-cancellable term of our lease agreement with the Landlord. As of December 27, 2014, we recorded a financing obligation of $18.3 million. The financing obligation is not reflected in the table above. |
COMMITMENTS_CONTINGENCIES_AND_4
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Significant customer concentrations as a percentage of total accounts receivable) (Details) (Accounts Receivable [Member], Customer Concentration Risk [Member]) | 3 Months Ended | |
Dec. 27, 2014 | Dec. 28, 2013 | |
Haoseng Industrial Co., Ltd [Member] | ||
Concentration Risk [Line Items] | ||
Customer concentrations risk percentage | 19.00% | 10.80% |
Siliconware Precision Industries Co Ltd [Member] | ||
Concentration Risk [Line Items] | ||
Customer concentrations risk percentage | 27.40% |
COMMITMENTS_CONTINGENCIES_AND_5
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Narrative) (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 27, 2014 | Sep. 27, 2014 | Dec. 01, 2013 | 7-May-12 |
sqft | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Area of Land | 198,000 | |||
Percentage Of Building Area Agreed To Lease From Landlord | 70.00% | |||
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 10 years | |||
Period Of Warranty For Manufacturing Defects | 1 year | |||
Lease Expiration Year | 2018 | |||
Financing obligation | $18,261 | $19,102 | $20,000 |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (Subsequent Event [Member], Assembléon [Member]) | 0 Months Ended | |
In Millions, unless otherwise specified | Dec. 29, 2014 | Dec. 29, 2014 |
USD ($) | EUR (€) | |
Subsequent Event [Line Items] | ||
Payments to acquire business | $98 | € 80 |