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What changed in KULICKE & SOFFA INDUSTRIES INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of KULICKE & SOFFA INDUSTRIES INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+242 added−235 removedSource: 10-K (2024-11-14) vs 10-K (2023-11-16)

Top changes in KULICKE & SOFFA INDUSTRIES INC's 2024 10-K

242 paragraphs added · 235 removed · 185 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

67 edited+14 added−29 removed54 unchanged
Biggest changeEmployee Engagement As part of our employee engagement initiatives, every two to three years, we conduct a global employee engagement survey, the “Voice of K&S”, to gather feedback from all our employees on various aspects of their work and on our corporate culture. Survey results are reviewed by management teams to identify improvement opportunity areas.
Biggest changeThe Company also strives to ensure that our employee benefits are compliant in the cities, states and countries in which we operate, while annual benefits benchmarking ensures that our benefits are attractive in the markets where we compete for talent. 11 Table of Contents Employee Engagement As part of our employee engagement initiatives, every two to three years, we conduct a global employee engagement survey, the “Voice of K&S”, to gather feedback from all our employees on various aspects of their work and on our corporate culture.
To ensure that all employees are familiar with our safety standards and actions, we conduct regular health and safety-related trainings including an online based Corporate Safety Training module, as well as hands-on preparedness training comprising periodic fire drill evacuations, first-aid, fire-fighting and hazardous chemical spillage response drills.
To ensure that all employees are familiar with our safety standards and actions, we conduct regular health and safety-related trainings including an online-based Corporate Safety Training module, as well as hands-on emergency preparedness training comprising periodic fire drill evacuations, first-aid, fire-fighting and hazardous chemical spillage response drills.
Our customers primarily consist of integrated device manufacturers (“IDMs”), outsourced semiconductor assembly and test providers (“OSATs”), foundry service providers, and other electronics manufacturers and automotive electronics suppliers. Our goal is to be the technology leader and the most competitive supplier in terms of cost and performance in each of our major product lines.
Our customers primarily consist of integrated device manufacturers (“IDMs”), outsourced semiconductor assembly and test providers (“OSATs”), foundry service providers, and other electronics manufacturers and automotive electronics suppliers. Our goal is to be the technology leader and the most competitive supplier in terms of performance, cost and quality in each of our major product lines.
Our sales support and customer support resources are located primarily in Singapore, Israel, Taiwan, China, Korea, Malaysia, the Philippines, Vietnam, Japan, Thailand, the U.S., Germany, Mexico, Switzerland and the Netherlands. Supporting these local resources, we have technology centers offering additional process expertise in Singapore, China, Switzerland, Israel, the U.S. and the Netherlands.
Our sales support and customer support resources are located primarily in Singapore, Israel, Taiwan, China, Korea, Malaysia, the Philippines, Vietnam, Japan, Thailand, India, the U.S., Germany, Mexico, Switzerland and the Netherlands. Supporting these local resources, we have technology centers offering additional process expertise in Singapore, China, Switzerland, Israel, the U.S. and the Netherlands.
This growth is driven, in part, by regular advances in device performance and by price declines that result from improvements in manufacturing technology. In order to exploit these trends, semiconductor manufacturers, both IDMs and OSATs, periodically invest aggressively in latest generation capital equipment.
This growth is driven, in part, by regular advances in device performance and by price declines that result from improvements in manufacturing technology. In order to exploit these trends, semiconductor manufacturers, both IDMs and OSATs, periodically invest aggressively in the latest generation capital equipment.
By establishing relationships with semiconductor manufacturers, OSATs, and vertically integrated manufacturers of electronic systems, we gain insight into our customers' future semiconductor packaging strategies. In addition, we also send our products and equipment to customers or potential customers for trial and evaluation.
By establishing relationships with semiconductor manufacturers, OSATs, and vertically integrated manufacturers of electronic systems, we gain insight into our customers' future semiconductor packaging strategies. In addition, we also send our products and equipment to customers and potential customers for trial and evaluation.
Our business is subject to various other regulations typical of businesses of our type in the jurisdictions in which we operate. We maintain an export compliance program designed to meet the requirements of the U.S. Department of Commerce and the U.S. Department of State.
Our business is subject to various other regulations typical of businesses of our type in the jurisdictions in which we operate. We maintain an export compliance program designed to meet the requirements of the U.S. Department of Commerce and the U.S.
To maintain these relationships, we primarily utilize our direct sales force, as well as distribution channels such as agents and distributors, depending on the product, region, or end-user application.
To maintain these relationships, we primarily utilize our direct sales force, as well as distribution channels such as agents and distributors, depending on the product, region, and end-user application.
Raw materials used in our equipment manufacturing are generally available from multiple sources; however, many outsourced parts and components are only available from a single or limited number of sources. Our ball bonder, wedge bonder, AT Premier, APAMA TM and Katalyst TM bonder manufacturing and assembly is done at our facility in Singapore.
Raw materials used in our equipment manufacturing are generally available from multiple sources; however, many outsourced parts and components are only available from a single or limited number of sources. Our ball bonder, wedge bonder, AT Premier, APAMA TM , APAMA Plus TM , APTURA TM and Katalyst TM bonder manufacturing and assembly is done at our facility in Singapore.
We value different backgrounds, celebrate unique perspectives, and believe that diversity and inclusion are essential to creating an environment where we can achieve our best innovation essential to the success of the Company. In fiscal 2022, the Company incorporated its Diversity & Inclusion (“D&I”) program into its ESG structure.
We value different backgrounds, celebrate unique perspectives, and believe that diversity and inclusion are essential to creating an environment where we can achieve our best innovation, which is essential to the success of the Company. In fiscal 2022, the Company incorporated its Diversity & Inclusion (“D&I”) program into its ESG structure.
Our major equipment competitors are ASM Pacific Technology, Hesse GmbH, Han's Laser Technology Co., Ltd., BE Semiconductor Industries N.V., Hanwha Precision Machinery Co., Ltd., Panasonic Holdings Corporation, Shinkawa Ltd. and Nordson Corporation. Significant competitive factors in the semiconductor packaging materials industry include performance, price, delivery, product life, and quality.
Our major equipment competitors are ASM Pacific Technology, Hesse GmbH, Han's Laser Technology Co., Ltd., BE Semiconductor Industries N.V., Hanwha Precision Machinery Co., Ltd., Panasonic Holdings Corporation, Yamaha Robotics Holdings Co. Ltd., and Nordson Corporation. Significant competitive factors in the semiconductor packaging materials industry include performance, price, delivery, product life, and quality.
However, this is a highly dynamic situation. As the macroeconomic situation remains highly volatile and the geopolitical situation remains uncertain, there is uncertainty surrounding the operations of our manufacturing locations, our business, our expectations regarding future demand or supply conditions, our near- and long-term liquidity and our financial condition. Consequently, our operating results could deteriorate.
However, this is a highly dynamic situation. As the macroeconomic situation remains highly volatile and the geopolitical situation remains uncertain, there is uncertainty surrounding the operations of our manufacturing locations, our business, our expectations regarding future demand and supply conditions, our near- and long-term liquidity and our financial condition. Consequentially, our operating results could deteriorate.
Furthermore, there is a potential risk of conflict and instability in the relationship between Taiwan and China that could disrupt the operations of our customers and/or suppliers in both Taiwan and China and our manufacturing operations in Taiwan and China.
Furthermore, there remains a potential risk of conflict and instability in the relationship between Taiwan and China that could disrupt the operations of our customers and/or suppliers in both Taiwan and China and our manufacturing operations in Taiwan and China.
We take every raised complaint seriously and prohibit any form of retaliation against any employee for lodging a complaint in good faith. 11 Table of Contents
We take every raised complaint seriously and prohibit any form of retaliation against any employee for lodging a complaint in good faith. 12 Table of Contents
For example, we have developed extensions to address opportunities in memory assembly with our RAPID™ MEM, in particular for NAND Flash storage. 5 Table of Contents Our leading technology for wedge bonder equipment uses ribbon or heavy wire for different applications such as power electronics, automotive and semiconductor applications.
For example, we have developed extensions to address opportunities in memory assembly with our RAPID MEM, in particular for NAND Flash storage. Our leading technology for wedge bonder equipment uses ribbon or heavy wire for different applications such as power electronics, automotive and semiconductor applications.
The shipments to customers headquartered in China are subject to heightened risks and uncertainties related to the respective policies of the governments of China and the U.S.
The shipments to customers headquartered in China are subject to heightened risks and uncertainties related to the respective trade and export control policies of the governments of China and the U.S.
Business Continuity Management Plan We have developed and implemented a global Business Continuity Management Plan (“BCP”) for our business operations. The BCP is designed to facilitate the prompt resumption of our business operations and functions arising from an event which impacts or potentially impacts our business operations.
Department of State. 9 Table of Contents Business Continuity Management Plan We have developed and implemented a global Business Continuity Management Plan (“BCP”) for our business operations. The BCP is designed to facilitate the prompt resumption of our business operations and functions arising from an event which impacts or potentially impacts our business operations.
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports are also available on the SEC's website at www.sec.gov . Our year end for each of fiscal 2023, 2022 and 2021 was September 30, 2023, October 1, 2022, and October 2, 2021, respectively.
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports are also available on the SEC's website at www.sec.gov . Our year end for fiscal 2024, 2023 and 2022 was September 28, 2024, September 30, 2023, and October 1, 2022, respectively.
Significant competitive factors in the semiconductor equipment market include price, speed/throughput, production yield, process control, delivery time, innovation, quality and customer support, each of which contribute to lower the overall cost per package being manufactured.
Competition The market for semiconductor equipment and packaging materials products is intensely competitive. Significant competitive factors in the semiconductor equipment market include price, speed/throughput, production yield, process control, delivery time, innovation, quality and customer support, each of which contribute to lower the overall cost per package being manufactured.
Employees may also confidentially and anonymously raise any concerns of legal violation, violation of the Company ’ s codes and policies, improper or unethical business practices, or concealment of any wrong-doing through the whistleblower hotline or website.
Employees may also confidentially and anonymously raise any concerns of legal violation, violation of the Company’s codes and policies, improper or unethical business practices, or concealment of any wrong-doing through the whistleblower hotline, whistleblower website or the Company's General Counsel.
In 2018, 2019 and 2020, the Board of Directors increased the share repurchase authorization under the Program to $200 million, $300 million and $400 million, respectively. On March 3, 2022, the Board of Directors increased the share repurchase authorization under the Program by an additional $400 million to $800 million, and extended its duration through August 1, 2025.
On March 3, 2022, the Board of Directors increased the share repurchase authorization under the Program by an additional $400 million to $800 million, and extended its duration through August 1, 2025.
We believe that our existing cash, cash equivalents, short-term investments, existing Facility Agreements, and anticipated cash flows from operations will be sufficient to meet our liquidity and capital requirements, notwithstanding the ongoing Israel-Hamas war and the prolonged Ukraine/Russia conflict and other macroeconomic factors, for at least the next twelve months from the date of filing.
We believe that our existing cash, cash equivalents, short-term investments, existing facility agreements, and anticipated cash flows from operations will be sufficient to meet our liquidity and capital requirements, notwithstanding the ongoing tensions in the Middle East and the prolonged Ukraine/Russia conflict and other macroeconomic factors, for at least the next twelve months from the date of this Annual Report.
Despite the slight decrease from the prior fiscal year end, we believe our strong cash position will allow us to continue to invest in product development, pursue non-organic growth opportunities and return capital to investors through our share repurchase and dividend programs Please see “Part II, Item 7. – Management Discussion and Analysis of Financial Condition - Liquidity and Capital Resources” for more information.
We believe our ability to maintain a strong cash position will allow us to continue to invest in product development, pursue non-organic growth opportunities and return capital to investors through our share repurchase and dividend programs. Please see “Part II, Item 7. – Management Discussion and Analysis of Financial Condition - Liquidity and Capital Resources” for more information.
The following table reflects our backlog as of September 30, 2023 and October 1, 2022: As of (in thousands) September 30, 2023 October 1, 2022 Backlog $ 423,824 $ 510,145 7 Table of Contents Manufacturing We believe excellence in manufacturing can create a competitive advantage, both by producing at lower costs and by providing superior responsiveness to changes in customer demand.
The following table reflects our backlog as of September 28, 2024 and September 30, 2023: As of (in thousands) September 28, 2024 September 30, 2023 Backlog $ 148,585 $ 423,824 Manufacturing We believe excellence in manufacturing can create a competitive advantage, both by producing at lower costs and by providing superior responsiveness to changes in customer demand.
In fiscal 2022, we established an Executive Safety Committee (the “Safety Committee”) to provide overall leadership and policy in discharging the Company’s safety responsibilities while promoting a culture of safety within the Company.
The Executive Safety Committee (the “Safety Committee”), that was established in fiscal 2022, provides overall leadership and policy in discharging the Company’s safety responsibilities while promoting a culture of safety within the Company.
The vision of the D&I program is to enrich the experience of all Company employees, irrespective of their seniority or role. It aims to foster an environment that acknowledges and celebrates their contributions and achievements in a unified and supportive setting.
The vision of the D&I program is to enrich the experience of all Company employees, irrespective of their seniority or role. It aims to foster an environment that acknowledges and celebrates their contributions and achievements in a unified and supportive setting. The Company implemented a learning and development series titled “Inclusive Leader Mindset Change Training”.
We are also committed to treating employees with dignity and respect. Diversity is important to the Company and we believe that the combined knowledge and diverse views that our employees contribute across our global locations strengthens our competitive edge.
Diversity is important to the Company and we believe that the combined knowledge and diverse views that our employees contribute across our global locations strengthens our competitive edge.
We believe our unique ability to simultaneously develop both equipment and tools is a core strength supporting our products' technological differentiation. 6 Table of Contents Customers Our major customers include IDMs, OSATs, foundry service providers, and other electronic manufacturers and automotive electronics suppliers.
For all our equipment products, tools are an integral part of their process capability. We believe our unique ability to simultaneously develop both equipment and tools is a core strength supporting our products' technological differentiation. Customers Our major customers include IDMs, OSATs, foundry service providers, and other electronic manufacturers and automotive electronics suppliers.
Approximately 38.6% and 45.8% of our net revenue for fiscal 2023 and 2022, respectively, was for shipments to customers headquartered in China. 4 Table of Contents While our customers have generally been impacted by the current global macroeconomic conditions, those with operations in China, an important manufacturing and supply chain hub, have witnessed a faster decline in demand and, accordingly, a faster decline in product shipments, compared to the rest of the world.
While our customers have generally been impacted by the current global macroeconomic conditions, those with operations in China, an important manufacturing and supply chain hub, have witnessed a faster decline in demand and, accordingly, a faster decline in product shipments, compared to the rest of the world.
If the Company reissues treasury stock at an amount below its acquisition cost and additional paid-in capital associated with prior treasury stock transactions is insufficient to cover the difference between acquisition cost and the reissue price, this difference is recorded against retained earnings. As of September 30, 2023, our remaining stock repurchase authorization under the Program was approximately $181.0 million.
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.
Approximately 91.2% and 94.4% of our net revenue for fiscal 2023 and 2022, respectively, was for shipments to customer locations outside of the U.S., primarily in the Asia/Pacific region.
Approximately 90.6% and 91.2% of our net revenue for fiscal 2024 and 2023, respectively, was for shipments to customer locations outside of the U.S., primarily in the Asia/Pacific region. Approximately 53.3% and 38.6% of our net revenue for fiscal 2024 and 2023, respectively, was for shipments to customers headquartered in China.
Work flexibility, which had been critical to our success throughout the COVID-19 pandemic, has now become part of our culture. We have provided tools and infrastructure to enable employees the choice and flexibility of a range of flexible work arrangement options that best meet their needs while allowing them to continue to fulfill the Company’s business objectives.
We have provided tools and infrastructure to enable employees the choice and flexibility of a range of flexible work arrangement options that best meet their needs while allowing them to continue to fulfill the Company’s business objectives.
This forms the foundation for our advanced packaging equipment development. We are also developing and manufacturing advanced packaging solutions for the emerging 2.5-dimensional integrated circuit (“2.5D IC”) and 3-dimensional integrated circuit (“3D IC”) markets.
With the launch of our APAMA TM , APAMA Plus TM and APTURA TM , we are also developing and manufacturing advanced packaging solutions for the emerging 2.5-dimensional integrated circuit (“2.5D IC”) and 3-dimensional integrated circuit (“3D IC”) markets.
The Company records treasury stock purchases under the cost method using the first-in, first-out (FIFO) method. Upon re-issuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid-in capital.
The stock repurchases were recorded in the periods they were delivered and accounted for as treasury stock in the Company’s Consolidated Balance Sheets. The Company records treasury stock purchases under the cost method using the first-in, first-out (FIFO) method. Upon re-issuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid-in capital.
These applications are commonly used in most, if not all, of the smartphones available today in the market. We also have expanded the use of AT Premier PLUS for wafer level wire bonding for micro-electro-mechanical systems (“MEMS”) and other sensors. Our technology leadership and bonding process know-how have enabled us to develop highly function-specific equipment with high throughput and accuracy.
These applications are commonly used in most, if not all, 6 Table of Contents of the smartphones available today in the market. We also have expanded the use of AT Premier PLUS for wafer level wire bonding for micro-electro-mechanical systems (“MEMS”) and other sensors.
Our Hybrid and Electronic Assembly solutions manufacturing and assembly is done at our facility in the Netherlands. We have ISO 9001 and ISO 14001 certifications for our equipment manufacturing facilities in Singapore and in the Netherlands. We manufacture dicing blades, capillaries and a portion of our bonding wedge inventory at our facility in China.
Our Hybrid and Electronic Assembly solutions manufacturing and assembly is done at our facility in the Netherlands. Our advanced dispensing manufacturing and assembly is done at our facility in Taiwan. We have ISO 9001, ISO 14001 and ISO 45001 certifications for our equipment manufacturing facilities in Singapore and in the Netherlands.
Safe Workplace We endeavor to provide a safe and healthy workplace for all our employees. The health and safety of our employees is of paramount importance to the Company, and forms an integral part of our organizational culture.
This program was designed to equip all people managers with valuable perspectives and tools to cultivate inclusive leadership. 10 Table of Contents Safe Workplace We endeavor to provide a safe and healthy workplace for all our employees. The health and safety of our employees is of paramount importance to the Company, and forms an integral part of our organizational culture.
As of September 30, 2023, we had 2,877 full-time employees and 148 temporary workers worldwide. Diversity & Inclusion We are committed to providing a diverse and collaborative environment that is rich in opportunities and which enables our employees to grow both professionally and personally in their careers within the Company.
Diversity & Inclusion We are committed to providing a diverse and collaborative environment that is rich in opportunities and which enables our employees to grow both professionally and personally in their careers within the Company. We are also committed to treating employees with dignity and respect.
Our HR function also includes centers of excellence in Talent Management, Talent Acquisition, HR Shared Services, and Global Compensation and Benefits, ensuring best practices in these important areas. 10 Table of Contents Employee Development We believe in investing in our employees’ professional growth by encouraging them to continually develop their functional and leadership skills and to gain different experiences across the Company as they progress along their career paths and grow within our organization.
Employee Development We believe in investing in our employees’ professional growth by encouraging them to continually develop their functional and leadership skills and to gain different experiences across the Company as they progress along their career paths and grow within our organization.
The prolonged Ukraine/Russia conflict did not materially impact our financial condition and operating results in fiscal 2023.
The ongoing tensions in the Middle East and the prolonged Ukraine/Russia conflict did not have a material impact on our financial condition and operating results in fiscal 2024.
In each of the markets we serve, we face competition and the threat of competition from established competitors and potential new entrants, some of which may have greater financial, engineering, manufacturing, and marketing resources. 8 Table of Contents Environmental and Other Regulatory Matters We are subject to various federal, state, local and foreign laws and regulations governing, among other things, the generation, storage, use, emission, discharge, transportation and disposal of hazardous materials and the health and safety of our employees.
Environmental and Other Regulatory Matters We are subject to various federal, state, local and foreign laws and regulations governing, among other things, the generation, storage, use, emission, discharge, transportation and disposal of hazardous materials and the health and safety of our employees.
Management is also monitoring for signs of any expansion of economic or supply chain disruptions or broader supply chain inflationary costs resulting either directly or indirectly from the tensions in the Middle East and between Ukraine and Russia. During fiscal years 2021 and 2022, semiconductor suppliers rapidly increased production output in response to increases in end-consumer demand.
The Company’s management continues to monitor the economy for signs of any expansion of economic or supply chain disruptions or broader supply chain inflationary and logistical costs resulting either directly or indirectly from the tensions in the Middle East and between Ukraine and Russia.
We believe the duration of our patents often exceeds the commercial life cycles of the technologies disclosed and claimed in the patents. Additionally, we believe much of our important technology resides in our trade secrets and proprietary software. Competition The market for semiconductor equipment and packaging materials products is intensely competitive.
We currently hold a number of U.S. patents, many of which have foreign counterparts. We believe the duration of our patents often exceeds the commercial life cycles of the technologies disclosed and claimed in the patents. Additionally, we believe much of our important technology resides in our trade secrets and proprietary software.
Our leadership in system-in-package (“SiP”), multi-chip module (“MCM”) and heterogeneous integration are well positioned to address the requirements of this emerging and growing trend. Our latest fluxless capable bonding technology allows ultra-fine-pitch interconnects necessary for next-generation chiplet-based advanced packages.
Our leadership in system-in-package (“SiP”), multi-chip module (“MCM”) and heterogeneous integration are well positioned to address the requirements of this emerging and growing trend. The APTURA TM is a highly capable thermo-compression bonding system which supports ultra-fine-pitch fluxless direct-copper thermo-compression as well as the CuFirst TM hybrid bonding process.
We continually review these policies and benchmark them against market peers to help ensure that we implement leading practices on recruitment, onboarding and employee development.
We continually review these policies and benchmark them against market peers to help ensure that we implement leading practices on recruitment, onboarding and employee development. Our HR function also includes centers of excellence in Talent Management, Talent Acquisition, HR Shared Services, and Global Compensation and Benefits, ensuring best practices in these important areas.
Our Aftermarket Products and Services (“APS”) segment has historically been less volatile than the other reportable segments. APS sales are more directly tied to semiconductor unit consumption rather than capacity requirements and production capability improvements.
Our Aftermarket Products and Services (“APS”) segment has historically been less volatile than the other reportable segments.
Due to general inflationary pressures, declining consumer sentiment, and an economic downturn caused, directly or indirectly, by various macroeconomic factors, including the ongoing Israel-Hamas war and the prolonged Ukraine/Russia conflict, the sector is seeing short-term volatility and disruption. However, we believe that the semiconductor industry macroeconomics have not changed and we anticipate that the industry’s long-term growth projections will normalize.
Due to general inflationary pressures, declining consumer sentiment, and an economic downturn caused, directly or indirectly, by various macroeconomic factors, including the ongoing tensions in the Middle East and the prolonged Ukraine/Russia conflict, the sector continues to experience volatility and disruption.
For other information, please see “Part I, Item 1A — Risk Factors”. 3 Table of Contents Share Repurchase Program On August 15, 2017, the Company’s Board of Directors authorized a program (the “Program”) to repurchase up to $100 million of the Company’s common stock on or before August 1, 2020.
Share Repurchase Program On August 15, 2017, the Company’s Board of Directors authorized a program (the “Program”) to repurchase up to $100 million of the Company’s common stock on or before August 1, 2020. In 2018, 2019 and 2020, the Board of Directors increased the share repurchase authorization under the Program to $200 million, $300 million and $400 million, respectively.
We believe this will benefit us as it will increase synergies between our various product engineering groups. Furthermore, we continually research adjacent market segments where our technologies could be used.
We believe this will benefit us as it will increase synergies between our various product engineering groups. Furthermore, we continually research adjacent market segments where our technologies could be used. Our Asterion hybrid wedge bonder has demonstrated the capability to provide and enable an expanded bond area, laser bonding, new robust pattern recognition capabilities and extremely tight process controls.
Our research and product development activities are focused on delivering robust production solutions to those projected requirements. We accomplish this by regularly introducing improved versions of existing products or by developing next-generation products. We follow this product development methodology in all our major product lines.
We accomplish this by regularly introducing improved versions of existing products or by developing next-generation products. We follow this product development methodology in all our major product lines. Intellectual Property Where circumstances warrant, we apply for patents on inventions governing new products and processes developed as part of our ongoing research, engineering, and manufacturing activities.
We bring the same technology focus to our tools business, driving tool design and manufacturing technology to optimize the performance and process capability of the equipment in which our tools are used. For all our equipment products, tools are an integral part of their process capability.
We remain focused on driving innovation and delivering new solutions that directly address the next set of semiconductor assembly challenges assembling the next-generation of electronic devices. We bring the same technology focus to our tools business, driving tool design and manufacturing technology to optimize the performance and process capability of the equipment in which our tools are used.
Concerns surrounding supply availability have spurred defensive inventory purchases, which led to a heightened demand for our products. The current macroeconomic conditions and declining consumer sentiment have resulted in significant inventory buildup in the semiconductor industry.
During fiscal years 2021 and 2022, semiconductor suppliers rapidly increased production output in response to increases in end-consumer demand. Concerns surrounding supply availability have spurred defensive inventory purchases, which led to a heightened demand for our products.
The capillaries are produced at our facilities in China and Israel. We both produce and outsource the production of our bonding wedges. Our China and Israel facilities are ISO 9001 certified. Our China facility is also ISO 14001 and ISO 18001 certified. Research and Product Development Many of our customers generate technology roadmaps describing their projected packaging technology requirements.
Our China and Israel facilities are ISO 9001, ISO 14001 and ISO 45001 certified. 8 Table of Contents Research and Product Development Many of our customers generate technology roadmaps describing their projected packaging technology requirements. Our research and product development activities are focused on delivering robust production solutions to those projected requirements.
This website reference is provided for convenience only and the content on the referenced website is expressly not incorporated by reference into this Annual Report on Form 10-K. 9 Table of Contents Human Capital Our Employees Our talented employees are critical to our ability to achieve the Company’s vision to be the leading technology and service provider of innovative interconnect solutions enabling a smart future.
This website reference is provided for convenience only and the content on the referenced website is expressly not incorporated by reference into this Annual Report on Form 10-K.
Under the Program, shares may be repurchased through open market and/or privately negotiated transactions at prices deemed appropriate by management. The timing and amount of repurchase transactions under the Program depend on market conditions as well as corporate and regulatory considerations.
The Program may be suspended or discontinued at any time and is funded using the Company’s available cash, cash equivalents and short-term investments. Under the Program, shares may be repurchased through open market and/or privately negotiated transactions at prices deemed appropriate by management.
We continue to position our business to leverage our research and development leadership and innovation and to focus our efforts on mitigating volatility, improving profitability and ensuring longer-term growth. We remain focused on operational excellence, expanding our product offerings through continuous research and development or acquisitions and managing our business efficiently throughout the business cycles.
We remain focused on operational excellence, expanding our product offerings through continuous research and development or acquisitions and managing our business efficiently throughout the business cycles. Our visibility into future demand is generally limited, forecasting is difficult, and we generally experience typical industry seasonality.
As of September 30, 2023, our total cash, cash equivalents and short-term investments were $759.4 million, a $16.1 million decrease from the prior fiscal year end.
To limit potential adverse cyclical, seasonal and macroeconomic effects on our financial position, we have continued our efforts to maintain a strong balance sheet. As of September 28, 2024, our total cash, cash equivalents and short-term investments were $577.1 million, a $182.3 million decrease from the prior fiscal year end.
In fiscal 2023, we launched a number of global leadership development programs designed to accelerate the development of our key leaders and prepare high potential talents to take on broader leadership roles.
In fiscal 2024, we continued with our global leadership development programs aimed at accelerating the development of our high potential mid-career professionals and managers to prepare them to assume broader leadership roles.
Dividends On August 23, 2023, June 8, 2023, March 2, 2023 and November 16, 2022, the Board of Directors declared a quarterly dividend of $0.19 per share of common stock. During the fiscal year ended September 30, 2023, the Company declared dividends of $0.76 per share of common stock.
As of September 28, 2024, our remaining stock repurchase authorization under the Program was approximately $30.3 million. 4 Table of Contents Dividends On August 26, 2024, May 16, 2024, March 14, 2024 and November 15, 2023, the Board of Directors declared a quarterly dividend of $0.20 per share of common stock, resulting in an aggregate dividend of $0.80 per share of common stock for the fiscal year ended September 28, 2024.
Our significant consumables competitors are PECO Co., Ltd. , Disco Corporation, Small Precision Tools Co., Ltd. and Chaozhou Three-Circle (Group) Co., Ltd.
Our significant consumables competitors are PECO Co., Ltd., Disco Corporation, Small Precision Tools Co., Ltd. and Chaozhou Three-Circle (Group) Co., Ltd. In each of the markets we serve, we face competition and the threat of competition from established competitors and potential new entrants, some of which may have greater financial, engineering, manufacturing, and marketing resources.
This training is included in our new hire on-boarding programs with employee-wide refresher trainings conducted every two years.
This training is included in our new hire on-boarding programs with employee-wide refresher trainings conducted every two years. As and when required, including as a response to a potential global health crisis, our Company will implement site specific business continuity and risk mitigation plans to help maintain the health and safety of our employees.
Please refer to Note 3―Business Combination for additional information related to our acquisition of AJA. Macroeconomic Headwinds Supply chain disruptions and global shortages in electronic components are generally abating in many jurisdictions. However, the cost of logistics remains high as a result of macroeconomic conditions, and labor shortages persist across layers of the supply chain.
For additional information, please see "Part II, Item 8 — Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements - Note 17: Restructuring and Cancellation of Project". 3 Table of Contents Macroeconomic Headwinds The cost of logistics remains high as a result of macroeconomic conditions, inflation and labor shortages across layers of the supply chain.
For more information on our ESG efforts, please refer to our Sustainability Report 2022, which can be found on our website at https://www.kns.com/ESG.
In fiscal 2023, we performed an independent, limited external assurance of our direct (Scope 1) and purchased energy indirect (Scope 2) greenhouse gas emissions data under the operational control boundary of eight of our global operational sites. For more information on our ESG efforts, please refer to our Sustainability Report 2023, which can be found on our website at https://www.kns.com/ESG.
We have also expanded our long-term advanced packaging partnership with the UCLA Center for Heterogeneous Integration and Performance Scaling (“CHIPS”) and Penn State Center for Heterogeneous Integration of Micro Electronic Systems (“CHIMES”).
We continue to expand technology partnerships with key customers and through engagements with institutions and consortiums, including the UCLA Center for Heterogeneous Integration and Performance Scaling (“CHIPS”), Penn State Center for Heterogeneous Integration of Micro Electronic Systems (“CHIMES”), and the “US-Joint” semiconductor consortium led by Resonac Holdings Corporation.
Revenue from our customers may vary significantly from year-to-year based on their respective capital investments, operating expense budgets, and overall industry trends. For other information regarding our concentrations and customers, please see “Part II, Item 8 — Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements - Note 17: Commitments, Contingencies and Concentrations”.
Revenue from our customers may vary significantly from year-to-year based on their respective capital investments, and operating expense budgets, and overall industry trends. There was no customer with sales representing more than 10% of our net revenue in fiscal 2024.
During the fiscal year ended September 30, 2023, the Company repurchased a total of approximately 1,515.0 thousand shares of common stock at a cost of approximately $68.1 million. The stock repurchases were recorded in the periods they were delivered and accounted for as treasury stock in the Company’s Consolidated Balance Sheets.
The timing and amount of repurchase transactions under the Program depend on market conditions as well as corporate and regulatory considerations. During the fiscal year ended September 28, 2024, the Company repurchased a total of approximately 3,221.0 thousand shares of common stock at an aggregate cost of approximately $151.0 million.
There was no customer with sales representing more than 10% of our net revenue in fiscal 2023. Sales and Customer Support We believe long-term customer relationships are critical to our success, and comprehensive sales support and customer support are an important means of establishing those relationships.
For additional information regarding our concentrations and customers, please see “Part II, Item 8 — Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements - Note 16: Commitments, Contingencies and Concentrations”. 7 Table of Contents Sales and Customer Support We believe long-term customer relationships are critical to our success, and comprehensive sales support and customer support are an important means of establishing those relationships.
Removed
Current Events Israel - Hamas War On October 7, 2023, an escalated armed conflict between Israel and the Hamas terrorist organization commenced, leading to a series of extended hostilities along Israel’s border with the Gaza Strip. Additionally, since October 8, 2023, the Hezbollah militant group has increased its hostilities against Israel over its northern region, including Haifa.
Added
Key Events in Fiscal 2024 Cancellation of Project W The Company was engaged by one of its customers (the "Customer") to support the Customer with the development and future mass production of certain technologies relating to advanced display (the "Project"), which project was previously referred to as Project W.
Removed
Our Company has a manufacturing facility and a business office in Haifa, and our capillaries are manufactured at our facilities in Israel and China. As of the date of this report, our business and manufacturing operations in Israel have not been impacted and no material damage or utilities interruption have been noted at our Israeli facility.
Added
In connection with the Customer's strategic review of its business, the Customer informed the Company that it cancelled the Project. In connection with the foregoing, on March 11, 2024, the Company committed to a plan to cease operational activities and commence wind down activities concerning various aspects of the Project.
Removed
Trade routes remain open, and our suppliers and business partners in Israel remain operational. Furthermore, save for a handful of employees who have been mobilized as members of the Israeli military reserves to active duty, disruption to our workforce has been minimal. We employ around 70 employees in Israel.
Added
As of September 28, 2024, the wind down activities have been substantially completed. The cancellation of the Project resulted in the reduction of the Company's fiscal 2024 revenue by approximately $15 million. The Company also incurred certain charges during the year ended September 28, 2024 and expects to incur an immaterial amount of additional related charges in fiscal year 2025.
Removed
The safety and well-being of our employees and their families remain our top priority. Our Company is actively providing support to employees and their families who have been impacted by these events, and employees in our Israeli facilities have the option of working from home to facilitate care-giving needs.
Added
The current macroeconomic conditions and declining consumer sentiment during fiscal years 2023 and 2024 have persisted, which continues to exacerbate inventory buildup in the semiconductor industry. Many of our customers who accumulated our products in the past three years continue to reduce their order rates as a result of inventory adjustment.
Removed
Given that the intensity, duration and outcome of the ongoing war is uncertain, any further escalation or other hostilities may result in government-mandated lockdowns and disrupt our business operations.
Added
However, we believe that the long-term semiconductor industry macroeconomics have not changed and we anticipate that the industry’s growth projections will normalize. For other information, please see “Part I, Item 1A — Risk Factors”.
Removed
We continue to monitor the situation and remain ready to activate our Business Continuity Plan (“BCP”) if necessary. 2 Table of Contents Key Events in Fiscal 2023 Acquisition of Advanced Jet Automation Co., Ltd.
Added
On November 17, 2023, the Company modified its written trading plan under Rule 10b5-1 of the Exchange Act, dated as of May 7, 2022, to facilitate repurchases under the Program. The modification provided for the purchase of up to approximately $169 million of the Company’s common stock from November 20, 2023 through August 1, 2025.
Removed
As part of our corporate strategy, we continually evaluate our portfolio of businesses and may from time to time decide to buy or sell businesses or enter into joint ventures or other strategic alliances. On February 22, 2023, we completed the acquisition of Advanced Jet Automation Co., Ltd.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

54 edited+27 added−9 removed143 unchanged
Biggest changeAs a result, a major portion of our business is subject to the risks associated with international commerce, particularly Asia/Pacific region, such as: • stringent and frequently changing trade compliance regulations; • less protective foreign intellectual property laws, and the enforcement of patent and other intellectual property rights; • longer payment cycles in foreign markets; • foreign exchange restrictions and capital controls, monetary policies and regulatory requirements; • restrictions or significant taxes on the repatriation of our assets, including cash; • tariff and currency fluctuations; • difficulties of staffing and managing dispersed international operations, including labor work stoppages and strikes in our factories or the factories of our suppliers; • changes in our structure or tax incentive arrangements; • possible disagreements with tax authorities; • episodic events outside our control such as, for example, outbreaks of coronaviruses, influenza or other illnesses; • natural disasters such as earthquakes, fires or floods, including as a result of climate change; • war, risks and rumors of war and civil disturbances, including the Israel-Hamas war and the Ukraine/Russia conflict, or other events that may limit or disrupt manufacturing, markets and international trade; • act of terrorism that impact our operations, customers or supply chain or that target U.S. interests or U.S. companies; • seizure of our foreign assets, including cash; • the imposition of sanctions of countries in which we do business; • changing political conditions and rising geopolitical tensions; and • legal systems which are less developed and may be less predictable than those in the U.S. 16 Table of Contents In addition, there is a potential risk of conflict and instability in the relationship between Taiwan and China which could disrupt the operations of our customers and/or suppliers in both Taiwan and China, our manufacturing operations in Taiwan and China, and our future plans in the region.
Biggest changeAs a result, a major portion of our business is subject to the risks associated with international commerce, particularly Asia/Pacific region, such as: • stringent and frequently changing trade compliance regulations; • less protective foreign intellectual property laws, and the enforcement of patent and other intellectual property rights; • longer payment cycles in foreign markets and potential default risks; • foreign exchange restrictions and capital controls, monetary policies and regulatory requirements; • restrictions or significant taxes on the repatriation of our assets, including cash; • tariff and currency fluctuations; • difficulties of staffing and managing dispersed international operations, including labor work stoppages and strikes in our factories or the factories of our suppliers; • changes in our structure or tax incentive arrangements; • possible disagreements with tax authorities; • episodic events outside our control such as, for example, outbreaks of coronaviruses, influenza, monkeypox or other illnesses; 17 Table of Contents • natural disasters such as earthquakes, fires or floods, including as a result of climate change; • war, risks and rumors of war and civil disturbances, including the prolonged tensions in the Middle East and the Ukraine/Russia conflict, or other events that may limit or disrupt manufacturing, markets and international trade; • act of terrorism that impact our operations, customers or supply chain or that target U.S. interests or U.S. companies; • seizure of our foreign assets, including cash; • the imposition of sanctions of countries in which we do business; • changing political conditions and rising geopolitical tensions; and • legal systems which are less developed and may be less predictable than those in the U.S.
However, depending on its nature and scope, cybersecurity incidents could result in business disruption; misappropriation, corruption or loss of confidential information and critical data (of the Company or that belonging to its third parties); reputational damage; litigation with third parties; diminution in the value of our investment in research, development and engineering; data privacy issues; and increased cybersecurity protection and remediation costs.
Depending on its nature and scope, cybersecurity incidents could result in business disruption; misappropriation, corruption or loss of confidential information and critical data (of the Company or that belonging to its third parties); reputational damage; litigation with third parties; diminution in the value of our investment in research, development and engineering; data privacy issues; and increased cybersecurity protection and remediation costs.
As a result, we are exposed to a number of significant risks, including: • decreased control over the manufacturing process for components and subassemblies; • changes in our manufacturing processes in response to changes in the market, which may delay our shipments; • our inadvertent use of defective or contaminated raw materials; • the relatively small operations and limited manufacturing resources of some of our suppliers, which may limit their ability to manufacture and sell subassemblies, components or parts in the volumes we require and at acceptable quality levels and prices; • restrictions on our ability to rely on suppliers due to changes in trade regulation as well as laws and regulations enacted in response to concerns related to climate change, conflict minerals, or responsible sourcing practices; • the inability of suppliers to meet our or other customer demand requirements; • reliability or quality issues with certain key subassemblies provided by single source suppliers as to which we may not have any short-term alternative; • shortages caused by disruptions at our suppliers and subcontractors for a variety of reasons, including public health emergencies and associated containment measures, war or geopolitical tensions (such as the Israel-Hamas war, tensions in the Middle East and the Ukraine/Russia conflict), significant natural disasters (including as a result of climate change) or significant price changes (including as a result of inflationary pressures); • delays in the delivery of raw materials or subassemblies, which, in turn, may delay shipments to our customers; • loss of suppliers as a result of consolidation of suppliers in the industry; and • loss of suppliers because of their bankruptcy or insolvency.
As a result, we are exposed to a number of significant risks, including: • decreased control over the manufacturing process for components and subassemblies; • changes in our manufacturing processes in response to changes in the market, which may delay our shipments; • our inadvertent use of defective or contaminated raw materials; • the relatively small operations and limited manufacturing resources of some of our suppliers, which may limit their ability to manufacture and sell subassemblies, components or parts in the volumes we require and at acceptable quality levels and prices; • restrictions on our ability to rely on suppliers due to changes in trade regulation as well as laws and regulations enacted in response to concerns related to climate change, conflict minerals, or responsible sourcing practices; • the inability of suppliers to meet our or other customer demand requirements; • reliability or quality issues with certain key subassemblies provided by single source suppliers as to which we may not have any short-term alternative; • shortages caused by disruptions at our suppliers and subcontractors for a variety of reasons, including public health emergencies and associated containment measures, war or geopolitical tensions (such as the prolonged tensions in the Middle East and the Ukraine/Russia conflict), significant natural disasters (including as a result of climate change) or significant price changes (including as a result of inflationary pressures); • delays in the delivery of raw materials or subassemblies, which, in turn, may delay shipments to our customers; • loss of suppliers as a result of consolidation of suppliers in the industry; and • loss of suppliers because of their bankruptcy or insolvency.
In the absence of the tax incentive, the income tax rate in Singapore that would otherwise apply is 17%, which would result in a significant increase in our provision for (benefit from) income taxes in future periods. Changes in tax legislation could adversely impact our future profitability. We are subject to income taxes in the U.S. and many foreign jurisdictions.
In the absence of any tax incentive, the income tax rate in Singapore that would otherwise apply is 17%, which would result in a significant increase in our provision for (benefit from) income taxes in future periods. Changes in tax legislation could adversely impact our future profitability. We are subject to income taxes in the U.S. and many foreign jurisdictions.
Our security procedures, such as virus protection software, data loss protection and our business continuity planning, such as our disaster recovery policies and back-up systems, may not be adequate or implemented properly to fully address the adverse effect of such events, which could adversely impact our operations. 22 Table of Contents In addition, our business could be adversely affected to the extent we do not make the appropriate level of investment in our technology systems as our technology systems become out-of-date or obsolete and are not able to deliver the type of data integrity and reporting we need to run our business.
Our security procedures, such as virus protection software, data loss protection and our business continuity planning, such as our disaster recovery policies and back-up systems, may not be adequate or implemented properly to fully address the adverse effect of such events, which could adversely impact our operations. 24 Table of Contents In addition, our business could be adversely affected to the extent we do not make the appropriate level of investment in our technology systems as our technology systems become out-of-date or obsolete and are not able to deliver the type of data integrity and reporting we need to run our business.
The semiconductor equipment and packaging materials industries are very competitive. In the semiconductor equipment industry, significant competitive factors include price, speed/throughput, production yield, process control, delivery time, innovation, quality and customer support. In the semiconductor packaging materials industry, significant competitive factors include price, delivery and quality.
The semiconductor equipment and packaging materials industries are very competitive. In the semiconductor equipment industry, significant competitive factors include price, speed/throughput, production yield, process control, footprint, delivery time, innovation, quality and customer support. In the semiconductor packaging materials industry, significant competitive factors include price, delivery and quality.
Any disruptions, delays or deficiencies in the design and implementation or the ongoing maintenance of the new ERP system could adversely affect our ability to process orders, ship products, provide services and customer support, send invoices and track payments, fulfill contractual obligations, accurately maintain books and records, provide accurate, timely and reliable reports on our financial and operating results, including reports required by the SEC such as the evaluation of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, and otherwise operate our business.
Any disruptions, delays or deficiencies in the design and implementation or the ongoing maintenance of the new ERP system could adversely affect our ability to process orders, ship products, provide services and customer support, send invoices and track payments, fulfill contractual obligations, accurately maintain books and records, provide accurate, timely and reliable reports on our financial and operating results, including reports required by the 25 Table of Contents SEC such as the evaluation of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, and otherwise operate our business.
Consequently, our revenues may decline, and our results of operations and financial condition may be adversely affected. 13 Table of Contents Difficulties in forecasting demand for our product lines may lead to periodic inventory shortages or excesses. We typically operate our business with limited visibility of future demand. We do not have long-term contracts with many of our customers.
Consequently, our revenues may decline, and our results of operations and financial condition may be adversely affected. 14 Table of Contents Difficulties in forecasting demand for our product lines may lead to periodic inventory shortages or excesses. We typically operate our business with limited visibility of future demand. We do not have long-term contracts with many of our customers.
We manufacture our ball, wedge and APAMA TM bonders in Singapore, our Hybrid and Electronic Assembly solutions in the Netherlands, our dicing blades, capillaries and bonding wedges in China, our capillaries in Israel and China, and our advanced dispensing equipment in Taiwan. We also rely on independent foreign distribution channels for certain of our product lines.
We currently manufacture our ball, wedge, APAMA TM and APTURA TM bonders in Singapore, our Hybrid and Electronic Assembly solutions in the Netherlands, our dicing blades, capillaries and bonding wedges in China, our capillaries in Israel and China, and our advanced dispensing equipment in Taiwan. We also rely on independent foreign distribution channels for certain of our product lines.
Additionally, our future effective tax rate could be affected by numerous other factors including higher or lower than anticipated foreign earnings in various jurisdictions where we are subjected to tax rates that differ from the U.S. federal statutory tax rate, by changes in the valuation allowances recorded against certain deferred tax balances, or by changes in accounting principles and reporting requirements, or including the interpretations and application of such accounting principles and reporting requirements.
Additionally, our future effective tax rate could be affected by numerous other factors including higher or lower than anticipated foreign earnings in various jurisdictions where we are subjected to tax rates that differ from the U.S. federal statutory tax rate, by changes in the valuation allowances recorded against certain deferred tax balances, or 26 Table of Contents by changes in accounting principles and reporting requirements, or including the interpretations and application of such accounting principles and reporting requirements.
Changes to our existing tax incentive in Singapore may materially reduce our reported results of operations in future periods. Our existing tax incentive, scheduled to expire in our fiscal 2025, allows certain classes of income to be subject to reduced income tax rates in Singapore provided we meet certain employment and investment conditions.
Changes to our existing tax incentive in Singapore may materially reduce our reported results of operations in future periods. Our existing tax incentive, scheduled to expire in January 2025, allows certain classes of income to be subject to reduced income tax rates in Singapore provided we meet certain employment and investment conditions.
Further changes in trade policy, tariffs, additional taxes, restrictions on exports or other trade barriers, or restrictions on supplies, equipment, and raw materials, may limit our ability to produce products, increase our selling and/or manufacturing costs, reduce the competitiveness of our products, or inhibit our ability to sell products or purchase necessary equipment and supplies, which could have a material adverse effect on our business, results of operations, or financial condition.
Further changes in trade policy, tariffs, additional taxes, restrictions on exports or other trade barriers, or restrictions on supplies, equipment, and raw materials, may limit our ability to produce products, increase our selling and/or manufacturing costs, reduce the competitiveness of our products, or 18 Table of Contents inhibit our ability to sell products or purchase necessary equipment and supplies, which could have a material adverse effect on our business, results of operations, or financial condition.
While we are currently maintaining business and operations in Israel without material damage or interruptions at our Israeli facility, our assets and operations in Israel could be vulnerable to future property damage, inventory loss, business disruption, and expropriation. We have around 70 employees in Israel.
While we are currently maintaining business and operations in Israel without material damage or interruptions at our Israeli facility, our assets and operations in Israel could be vulnerable to future property damage, inventory loss, business disruption, and expropriation. We have approximately 70 employees in Israel.
The potential effects of these conditions could have a material adverse effect on our business, results of operations and financial condition. 12 Table of Contents We depend on our suppliers, including sole source suppliers, for raw materials, components and subassemblies.
The potential effects of these conditions could have a material adverse effect on our business, results of operations and financial condition. 13 Table of Contents We depend on our suppliers, including sole source suppliers, for raw materials, components and subassemblies.
If we cannot compete successfully, we could lose customers and experience reduced margins and profitability. 15 Table of Contents Geographic, Trade and Customer Risks Substantially all of our sales, distribution channels and manufacturing operations are located outside of the U.S., which subjects us to risks, including risks from changes in trade regulations, currency fluctuations, political instability and conflicts.
If we cannot compete successfully, we could lose customers and experience reduced margins and profitability. Geographic, Trade and Customer Risks Substantially all of our sales, distribution channels and manufacturing operations are located outside of the U.S., which subjects us to risks, including risks from changes in trade regulations, currency fluctuations, political instability and conflicts.
This could materially and adversely affect our business, results of operations and financial condition, restrict our ability to access the capital markets, require us to expend significant resources to correct the material weakness, subject us to fines, penalties or judgments, harm our reputation, adversely affect the trading price of our common stock, or otherwise cause a decline in investor confidence.
This could materially and adversely affect our business, results of operations and financial condition, restrict our ability to access the capital markets, require us to expend significant resources to correct the material weakness, subject us to fines, penalties or judgments, harm our reputation, adversely affect the trading price of our common stock, or otherwise cause a decline in investor confidence. 27 Table of Contents
From time to time, senior management or other key employees may leave our company, and the loss of any key employee could result in significant disruptions to our operations, including adversely affecting the timeliness of product releases, the successful implementation and completion of company initiatives, the effectiveness of our disclosure controls and procedures and our internal control over financial reporting, and the results of our operations.
From time to time, senior management or other key employees may leave our Company, and the loss of any key employee could result in significant disruptions to our operations, including adversely affecting the timeliness of product releases, the successful implementation and completion of company initiatives, the effectiveness of our 20 Table of Contents disclosure controls and procedures and our internal control over financial reporting, and the results of our operations.
Any of the foregoing risks, if they were to materialize, could have a material adverse effect on our business, results of operations or financial condition. 19 Table of Contents Operations and Supply Chain Risks We may not be able to continue to consolidate manufacturing and other facilities or entities without incurring unanticipated costs and disruptions to our business.
Any of the foregoing risks, if they were to materialize, could have a material adverse effect on our business, results of operations or financial condition. 21 Table of Contents Operations and Supply Chain Risks We may not be able to continue to consolidate or relocate manufacturing and other facilities or entities without incurring unanticipated costs and disruptions to our business.
Although the timing and methods of implementation may vary, many countries, including those in the Asia/Pacific region in which we have significant operations, have implemented, or are in the process of implementing, legislation or practices inspired by the base erosion and profit shifting project undertaken by the Organization for Economic Co-operation and Development (“OECD”).
Although the timing and methods of implementation may vary, many countries, including those in the Asia/Pacific region in which we have significant operations, have implemented, or are in the process of implementing, legislation or practices inspired by the base erosion and profit shifting project undertaken by the Organization for Economic Co-operation and Development (“OECD”), for example, Pillar Two.
Some governments may have provided, and will continue to provide, financial assistance or other support to some of our competitors or to new entrants, to advance the nation's growth in the semiconductor equipment and packaging materials industries. We expect our competitors to improve their current products’ performance, and to introduce new products and materials with improved price and performance characteristics.
Some governments may have provided, and will continue to provide, financial assistance or other support to some of our competitors or to new entrants, to advance the nation's growth in the semiconductor equipment and packaging materials industries. 16 Table of Contents We expect our competitors to improve their current products’ performance, and to introduce new products and materials with improved price and performance characteristics.
As part of our ongoing efforts to drive further efficiency, we may consolidate our manufacturing and other facilities or entities. Should we consolidate, we may experience unanticipated events, including the actions of governments, suppliers, employees or customers, which may result in unanticipated costs and disruptions to our business.
As part of our ongoing efforts to drive further efficiency, we may consolidate or relocate our manufacturing and other facilities or entities. Should we consolidate or relocate, we may experience unanticipated events, including the actions of governments, suppliers, employees, union representatives or customers, which may result in unanticipated costs and disruptions to our business.
These transactions place additional demands on our management, our various functional teams and our current labor force. The combination of businesses may result in the loss of key personnel or an interruption of, or loss of momentum in, our existing businesses and/or the acquired business.
These transactions place additional demands on our management, our various functional teams and our current labor force. The combination of businesses may result in the loss of key personnel or an interruption of, or loss of 22 Table of Contents momentum in, our existing businesses and/or the acquired business.
These technologies include flip chip and wafer-level packaging. Some of these alternative technologies eliminate the need for wires to establish the electrical connection between a die and its package. The semiconductor industry may, in the future, shift a significant part of its volume into alternative packaging technologies which do not employ our products.
These technologies include hybrid bonding, thermo-compression bonding, flip chip bonding and wafer-level packaging. Some of these alternative technologies eliminate the need for wires to establish the electrical connection between a die and its package. The semiconductor industry may, in the future, shift a significant part of its volume into alternative packaging technologies which do not employ our products.
If we lose orders from a significant customer that we are not able to replace, or if a significant customer reduces its orders substantially, or if we incur liabilities for not meeting customer commitments, these losses, reductions or liabilities may materially and adversely affect our business, financial condition and operating results.
If we lose orders from a significant customer that we are not 19 Table of Contents able to replace, or if a significant customer reduces its orders substantially, or if we incur liabilities for not meeting customer commitments, these losses, reductions or liabilities may materially and adversely affect our business, financial condition and operating results.
If we are unable to continue to attract and retain the managerial, marketing, finance, accounting and technical personnel we require, our business, financial condition and operating results may be materially and adversely affected. 18 Table of Contents Effective succession planning is also important to our long-term success.
If we are unable to continue to attract and retain the managerial, marketing, finance, accounting and technical personnel we require, our business, financial condition and operating results may be materially and adversely affected. Effective succession planning is also important to our long-term success.
To the extent that higher costs result in higher prices for our products, we may experience a reduction in the demand for those products, which could negatively affect our results of operations.
To the extent that higher costs incurred from the above activities result in higher prices for our products, we may experience a reduction in the demand for those products, which could negatively affect our results of operations.
Continued improvement in manufacturing capabilities, control of material and manufacturing quality and costs and product testing are critical factors in our future growth.
Continued improvement in manufacturing capabilities, control of material, emphasis on product safety and manufacturing quality and costs and product testing are critical factors in our future growth.
While we observed some easing of the industry-wide supply constraints towards the end of fiscal 2022 and in fiscal 2023, we expect some constraints to continue and the duration of such constraints or their long-term impact on our business cannot be predicted at this time.
While we observed some easing of the industry-wide supply constraints in fiscal 2024, we expect some constraints to continue from time to time and the duration of such constraints or their long-term impact on our business cannot be predicted at this time.
There was no customer with sales representing more than 10% of net revenue in fiscal 2023. Sales to our ten largest customers comprised 53.5% and 49.1% of our net revenue for fiscal 2023 and fiscal 2022, respectively.
There was no customer with sales representing more than 10% of net revenue in fiscal 2024. Sales to our ten largest customers comprised 53.6% and 53.5% of our net revenue for fiscal 2024 and fiscal 2023, respectively.
We expect that a small number of customers will continue to account for a high percentage of our net revenue for the foreseeable future. Thus, our business success depends on our ability to maintain strong relationships with our customers. Any one of a number of factors could adversely affect these relationships.
We expect that a small number of customers will continue to account for a high percentage of our net revenue for the foreseeable future. Thus, our business success depends on our ability to maintain strong relationships with our customers and closely understand their present and anticipated utilization rates. Any one of a number of factors could adversely affect these relationships.
Approximately 38.6%, 45.8% and 43.4% of our net revenue for fiscal 2023, 2022, and 2021, respectively, was derived from shipments to customers headquartered in China. We expect our future performance to depend on our ability to continue to compete in foreign markets, particularly in the Asia/Pacific region.
Approximately 53.3% and 38.6% of our net revenue for fiscal 2024 and 2023, respectively, was derived from shipments to customers headquartered in China. We expect our future performance to depend on our ability to continue to compete in foreign markets, particularly in the Asia/Pacific region.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has concluded that this material weakness was remediated as of September 30, 2023.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.
In addition, we are authorized to issue, without shareholder approval, up to an aggregate of 200 million common stock, of which approximately 56.3 million shares were outstanding as of September 30, 2023.
In addition, we are authorized to issue, without shareholder approval, up to an aggregate of 200 million common stock, of which approximately 53.9 million shares were outstanding as of September 28, 2024.
In particular, trade tensions between the U.S. and China have been escalating since 2018, with U.S. tariffs on Chinese goods and retaliatory Chinese tariffs on U.S. goods.
In particular, trade tensions between the U.S. and China have been escalating since 2018, with U.S. tariffs on Chinese goods and retaliatory Chinese tariffs on U.S. goods, and there remains significant uncertainty about the future relationship between the U.S. and China.
These facilities operate under permits that must be renewed periodically. A violation of those permits may lead to revocation of the permits, fines, penalties or the incurrence of capital or other costs to comply with the permits, including the potential shutdown of operations.
A violation of those permits may lead to revocation of the permits, fines, penalties or the incurrence of capital or other costs to comply with the permits, including the potential shutdown of operations.
Our ability to compete overseas may therefore be materially and adversely affected by the fluctuations of the U.S. dollar against other currencies. Because nearly all of our business is conducted outside the U.S., we face exposure to adverse movements in foreign currency exchange rates which could have a material adverse impact on our financial results and cash flows.
Because nearly all of our business is conducted outside the U.S., we face exposure to adverse movements in foreign currency exchange rates which could have a material adverse impact on our financial results and cash flows.
Our sustainability report, currently in its seventh edition and available on our website, continues to outline our Company’s strategies, initiatives and performance of ESG topics identified through a materiality assessment to be most relevant to the operations and stakeholders of our Company. The identification, assessment, and disclosure of such matters is complex.
Our sustainability report continues to outline our Company’s strategies, initiatives and performance of ESG topics identified through a materiality assessment to be most relevant to the operations and stakeholders of our Company.
Such temporary suspension of business and services impacted some of the semiconductor factories and suppliers who operate there. The long-term effects of climate change on the global economy and the semiconductor industry in particular are unclear but could be severe, and could exacerbate the other risk factors described herein.
Although our advanced dispensing manufacturing operations in Taiwan were not affected, the earthquake resulted in the temporary suspension of other semiconductor factories and suppliers who operate in Taiwan. The long-term effects of climate change on the global economy and the semiconductor industry in particular are unclear but could be severe, and could exacerbate the other risk factors described herein.
Additionally, if we do not effectively implement the ERP system as planned or the system does not operate as intended, the effectiveness of our internal control over financial reporting could be adversely affected or our ability to assess it adequately could be delayed. 23 Table of Contents Currency and Tax Risks We are exposed to fluctuations in currency exchange rates that could negatively impact our financial results and cash flows.
Additionally, if we do not effectively implement the ERP system as planned or the system does not operate as intended, the effectiveness of our internal control over financial reporting could be adversely affected or our ability to assess it adequately could be delayed.
These provisions and some other provisions of the Pennsylvania Business Corporation Law could delay, defer or prevent us from experiencing a fundamental change and may adversely affect our common shareholders' voting and other rights. 25 Table of Contents If our internal controls over financial reporting or our disclosure controls and procedures are not effective, we may not be able to accurately report our financial results or file our periodic reports in a timely manner, which may cause investors to lose confidence in our reported financial information and may lead to a decline in the trading price of our common stock.
If our internal controls over financial reporting or our disclosure controls and procedures are not effective, we may not be able to accurately report our financial results or file our periodic reports in a timely manner, which may cause investors to lose confidence in our reported financial information and may lead to a decline in the trading price of our common stock.
Such revisions, expansions or guidance could change the impact of the rules for our business. Future changes in, and responses to, the various export regulations, tariffs, or other trade regulations between the U.S. and other countries may be unpredictable.
Future changes in, and responses to, the various export regulations, tariffs, or other trade regulations between the U.S. and other countries may be unpredictable.
Public attention continues to focus on the environmental impact of manufacturing operations and the risk to neighbors of waste and chemical releases from such operations. Proper waste disposal plays an important role in the operation of our manufacturing plants. In many of our facilities we maintain wastewater treatment systems that remove metals and other contaminants from process wastewater.
Public attention continues to focus on the environmental impact of manufacturing operations and the risk to neighbors of waste and chemical releases from such operations. Proper waste disposal plays an important role in the operation of our manufacturing plants. Most of our facilities operate under permits that must be renewed periodically.
If we fail to integrate and manage acquired businesses successfully or to mitigate the risks associated with divestitures, joint ventures or other alliances, or if the time and costs associated with integration exceeds our expectations, or if our acquired business were to perform poorly, our business, financial condition and operating results may be materially and adversely affected. 20 Table of Contents Increasing attention to ESG matters, including any targets or other ESG initiatives, could result in additional costs or risks or adversely impact our business Certain investors, shareholder advocacy groups, other market participants, customers and other stakeholder groups have focused increasingly on companies' environmental, social and governance (“ESG”) initiatives, including those concerning climate change, greenhouse gas emissions, human rights, diversity and inclusion, and shareholder proxy access.
Increasing attention to ESG matters, including any targets or other ESG initiatives, could result in additional costs or risks or adversely impact our business Certain investors, shareholder advocacy groups, other market participants, customers and other stakeholder groups have focused increasingly on companies' environmental, social and governance (“ESG”) initiatives, including those concerning climate change, greenhouse gas emissions, human rights, diversity and inclusion, and shareholder proxy access.
We continue to monitor new tax legislation or other developments since significant changes in tax legislation, or in the interpretation of existing legislation, could materially and adversely affect our financial condition and operating results. 24 Table of Contents Other changes in taxation could materially impact our future effective tax rate.
While we do not expect Pillar Two to have a material tax impact in fiscal 2025, we will continue to monitor new tax legislation and other developments since changes in tax legislation, or in the interpretation of existing legislation, could materially and adversely affect our financial condition and operating results.
For example, we are currently investigating a potential unlawful reverse engineering incident and, where necessary, plan to pursue appropriate legal action against parties that may be involved in such unlawful reverse engineering. 21 Table of Contents Competitors or third parties (including ex-employees violating their surviving contractual obligations with us) may also copy or reverse engineer aspects of our products or solutions through unlawful means, or illegally use information that we regard as proprietary.
Competitors or third parties (including ex-employees violating their surviving contractual obligations with us) may also copy or reverse engineer aspects of our products or solutions through unlawful means, or illegally use information that we regard as proprietary.
Some of the other factors that may cause our expenses to fluctuate from period-to-period include: • timing and extent of our research and development efforts; • severance, restructuring, and other costs of relocating facilities; • inventory write-offs due to obsolescence or other causes; and • an increase in the cost of labor or materials.
Some of the other factors that may cause our expenses to fluctuate from period-to-period include: • timing and extent of our research and development efforts; • severance, restructuring, and other costs of relocating our manufacturing or warehouse facilities; • inventory write-offs due to obsolescence, project cancellations or other causes; and • an increase in the cost of labor or materials. 15 Table of Contents Because our net revenue and operating results are volatile and difficult to predict, we believe consecutive period-to-period or year-over-year comparisons of our operating results may not be a good indication of our future performance.
Additionally, since October 8, 2023, the Hezbollah militant group has increased its hostilities against Israel over its northern region, including Haifa. Many multinational companies in the semiconductor industry have research, design and development centers situated in Israel, including our Company, which has a manufacturing facility and a business office in Haifa.
The situation in Northern Israel and Southern Lebanon remains highly tense and volatile. Many multinational companies in the semiconductor industry have research, design and development centers situated in Israel, including our Company, which has a manufacturing facility and a business office in Haifa.
Our operations and business, and those of our customers and suppliers, can be disrupted by natural disasters, public health issues, cybersecurity incidents, interruptions of service from utilities, or other catastrophic events including as a result of climate change. For example, we have at times experienced temporary disruptions in our manufacturing processes as a result of power outages.
Our operations and business, and those of our customers and suppliers, can be disrupted by natural disasters, public health issues, interruptions of service from utilities, or other catastrophic events including as a result of climate change. In addition, global climate change can result in natural disasters occurring more frequently, with greater intensity and with less predictability.
Because most of our foreign sales are denominated in U.S. dollar, an increase in value of the U.S. dollar against foreign currencies will make our products more expensive than those offered by some of our foreign competitors. In addition, a weakening of the U.S. dollar against other currencies could make our costs in certain non-U.S. locations more expensive to fund.
Currency and Tax Risks We are exposed to fluctuations in currency exchange rates that could negatively impact our financial results and cash flows. Because most of our foreign sales are denominated in U.S. dollar, an increase in value of the U.S. dollar against foreign currencies will make our products more expensive than those offered by some of our foreign competitors.
If we cannot, or elect not to, comply with these conditions, we could be required to refund material tax benefits previously realized with respect to this tax incentive.
If we cannot, or elect not to, comply with these conditions, we could be required to refund material tax benefits previously realized with respect to this tax incentive. There cannot be assurances that we are able to benefit from future tax incentives granted by the Singapore government beyond the expiration of our existing tax incentive.
Additionally, some end users may prefer to avoid the U.S. supply chain in its entirety to avoid the application of these regulations. 17 Table of Contents The rules promulgated by the BIS are typically complex, and the BIS could revise or expand them in response to public comments. Likewise, the BIS may issue guidance clarifying the scope of the rules.
Additionally, the rules promulgated by the BIS are typically complex, and the BIS could revise or expand them in response to public comments. Likewise, the BIS may issue guidance clarifying the scope of the rules. Such revisions, expansions or guidance could change the impact of the rules for our business.
The ongoing Israel-Hamas war may adversely affect our business, financial condition or results of operations. On October 7, 2023, an escalated armed conflict between Israel and the Hamas terrorist organization commenced, leading to a series of extended hostilities along Israel’s border with the Gaza Strip.
On October 7, 2023, an escalated armed conflict between Israel and the Hamas terrorist organization commenced, leading to a series of extended hostilities along Israel’s border with the Gaza Strip. Additionally, since October 8, 2023, the Iran-backed Hezbollah militant group has increased its hostilities against Israel over its northern region, including Haifa.
Typically, our average selling prices have declined over time due to continuous price pressure from our customers and competitive cost reductions in our industry’s supply chains.
Competitive Risks Our average selling prices usually decline over time and may continue to do so. Typically, our average selling prices have declined over time due to continuous price pressure from our customers, our competitors and general cost reductions within our industry’s supply chains. The Chinese government’s initiatives around self-sustainability are propelling China to expand its domestic manufacturing capacity.
We devote significant resources to network security and other measures to protect our systems and data from unauthorized access or misuse.
Notwithstanding the foregoing, future attempts or breaches might, especially given that threat actors may leverage other means and technologies, including artificial intelligence, to circumvent controls and avoid detection. We devote significant resources to network security and other measures to protect our systems and data from unauthorized access or misuse.
Removed
While to our knowledge, there have been no reported casualties or injuries to our employees as of the date of this report, some of our Israeli employees have been mobilized as members of the Israeli military reserves to active duty.
Added
International political instability, geopolitical tensions, terrorist acts and acts of war may adversely affect our business, financial condition or results of operations.
Removed
Because our net revenue and operating results are volatile and difficult to predict, we believe consecutive period-to-period or year-over-year comparisons of our operating results may not be a good indication of our future performance. 14 Table of Contents Competitive Risks Our average selling prices usually decline over time and may continue to do so.
Added
The threat of terrorism or acts of war, risks and rumors of war, escalation and civil disturbances, including the prolonged tensions in the Middle East and the Ukraine/ Russia conflict, increases the uncertainty in our markets and could adversely affect our business.
Removed
In addition, global climate change can result in natural disasters occurring more frequently, with greater intensity and with less predictability. For example, in September 2023, territories in the East Asian monsoon region, including Guangdong, Hong Kong, Fujian and Taiwan, experienced significant typhoons and storm surges, resulting in a temporary suspension of business and services.
Added
In late September 2024, missiles fired by the Iran-backed Hezbollah militant group were seen being intercepted by Israeli air defense system over the city of Haifa.
Removed
Subsequent renewals are at the discretion of the Singapore government and we may not be able to extend the tax incentive arrangement beyond its expiration date or we may also elect not to renew this tax incentive arrangement.
Added
With considerable incentives from the Chinese government, manufacturers based in China are able to lower selling prices, thereby increasing overall competition. This has resulted in a lowering of our average selling prices in China.
Removed
In December 2021, the OECD issued its guidance on the Global Anti-Base Erosion (“GloBE”) rules with the purpose of ensuring multinational companies pay a minimum level tax on the income generated in each of the jurisdictions where they operate in.
Added
In addition, there remains a potential risk of conflict and instability in the relationship between Taiwan and China which could disrupt the operations of our customers and/or suppliers in both Taiwan and China, our manufacturing operations in Taiwan and China, and our future plans in the region.
Removed
In December 2022, the European Council attained a consensus on Pillar Two of the GloBE rules to implement the 15% global minimum tax, and many EU and G20 countries have specified their plan to adhere to the OECD guidelines as early as fiscal 2025 which may materially impact our income tax expense.
Added
We also operate in seismic zones including Taiwan, which is located within a complex zone of convergence between the Philippines Sea Plate and Eurasian Plate. For example, in April 2024, a magnitude 7.4 earthquake struck Taiwan, resulting in significant injuries and death, leading to a temporary suspension of business and services.
Removed
Further, the increased scrutiny on international tax and continuous changes to countries’ tax legislation may also affect the policies and decisions of tax authorities with respect to certain income tax and transfer pricing positions taken by the Company in prior or future periods.
Added
Additionally, some end users may prefer to avoid the U.S. supply chain in its entirety to avoid the application of these regulations. In November 2023, the BIS issued additional rules to update export controls on advanced computing semiconductors and semiconductor manufacturing equipment, as well as items that support supercomputing applications and end-uses, to arms embargoed countries, including China.
Removed
As described in “Part II, Item 9A — Controls and Procedures” of this Annual Report, we previously identified a material weakness in our internal control over financial reporting.
Added
We are taking appropriate measures to comply with all applicable BIS Rules. Where required, we will apply for export licenses from the BIS to avoid disruption to our customers’ operations.
Removed
However, one or more material weaknesses may be identified in the future during the evaluation and testing process of our internal controls in future years.
Added
Export licenses may be subject to a prolonged review and appeals process, to which there cannot be an assurance as to whether an export license may be granted, granted with conditions or eventually revoked due to subsequent challenge.
Added
The cancellation and wind down of the Project may adversely affect our business, results of operations and financial condition.
Added
In connection with the cancellation of a project with one of its customers (previously referred to as Project W) (the "Project"), on March 11, 2024, the Company committed to a plan to cease operational activities and commence wind down activities concerning various aspects of the Project.
Added
As of September 28, 2024, the wind down activities have been substantially completed and as a result of these activities, the Company incurred certain charges during fiscal year 2024. The Company's estimates of the anticipated impact on its results of operations and the timing thereof are subject to a number of assumptions and actual amounts may differ materially from estimates.
Added
As we further wind down the Project, we may discover other facts that could require us to incur additional expenses and/or record additional charges that may be different from our initial expectations about the costs of the wind down.
Added
In addition, we may not be able to complete the wind down in all respects due to factors outside of our control. If actual amounts were to differ from our estimates, or if the full and complete wind down takes longer than expected, our results of operations and financial condition could be materially and adversely affected.
Added
Cancellations of significant orders or other similar projects by other customers in the future could also cause the Company to incur additional costs or expenses or lead to a reduction in future revenue, which could materially and adversely affect our results of operations.
Added
As a result of the cancellation of the Project, the Company has refocused its development resources towards other growth-centric opportunities supporting technology changes within the thermocompression, Vertical Fan-Out, Automotive and Dispense markets. The Company may experience operational difficulties as it shifts its development resources to these other opportunities, which may result in disruptions to the Company's operations.
Added
We cannot be certain that these efforts will be effective or successful, or that we will realize the anticipated benefits of the refocus. As a result, our results of operations and financial condition could be materially and adversely affected.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. PROPERTIES The following table reflects our major facilities as of September 30, 2023: Country Facility (1) Approximate Size Function Reportable Segment Singapore Serangoon 251,000 sq. ft. Corporate headquarters, manufacturing, technology, sales and service center Ball Bonding Equipment Wedge Bonding Equipment Advanced Solutions Kranji 148,000 sq. ft. Manufacturing center Advanced Solutions China Suzhou 155,000 sq. ft.
Biggest changeItem 2. PROPERTIES The following table reflects our major facilities as of September 28, 2024: Country Facility (1) Approximate Size Function Reportable Segment Singapore Serangoon 251,000 sq. ft. Corporate headquarters, manufacturing, technology, sales and service center Ball Bonding Equipment Wedge Bonding Equipment Advanced Solutions China Suzhou 155,000 sq. ft.
Technology, sales and service center Wedge Bonding Equipment Horsham, Pennsylvania 28,000 sq. ft. Technology center Advanced Solutions Israel Haifa 31,000 sq. ft. Manufacturing and technology center APS Taiwan Taipei 20,000 sq. ft. Manufacturing and technology center All Others (1) Each of the facilities listed in this table is leased other than the facilities in Suzhou, China and Fort Washington, Pennsylvania.
Technology, sales and service center Wedge Bonding Equipment Israel Haifa 31,000 sq. ft. Manufacturing and technology center APS Taiwan Taipei 20,000 sq. ft. Manufacturing and technology center All Others (1) Each of the facilities listed in this table is leased other than the facilities in Suzhou, China and Fort Washington, Pennsylvania.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers The following table summarizes the repurchases of common stock during the three months ended September 30, 2023 (in thousands, except per share amounts): Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1) July 2, 2023 to July 29, 2023 16 $ 57.45 16 $ 189,313 July 30, 2023 to September 2, 2023 48 $ 52.08 48 $ 186,811 September 3, 2023 to September 30, 2023 119 $ 48.39 119 $ 181,042 For the three months ended September 30, 2023 183 183 (1) On August 15, 2017, the Company’s Board of Directors authorized a program (the “Program”) to repurchase up to $100 million in total of the Company’s common stock on or before August 1, 2020.
Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers The following table summarizes the repurchases of common stock during the three months ended September 28, 2024 (in thousands, except per share amounts): Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1) June 30, 2024 to July 27, 2024 242 $ 49.15 242 $ 61,009 July 28, 2024 to August 31, 2024 409 $ 42.76 409 $ 43,532 September 1, 2024 to September 28, 2024 325 $ 40.84 325 $ 30,251 For the three months ended September 28, 2024 976 976 (1) On August 15, 2017, the Company’s Board of Directors authorized a program (the “Program”) to repurchase up to $100 million in total of the Company’s common stock on or before August 1, 2020.
For the purpose of calculating the aggregate market value of shares of our common stock held by non-affiliates, as shown on the cover page of this report, we have assumed all of our outstanding shares were held by non-affiliates except for shares held by our directors and executive officers.
For the purpose of calculating the aggregate market value of shares of our common stock held by non-affiliates, as shown on the cover page of this Annual Report, we have assumed all of our outstanding shares were held by non-affiliates except for shares held by our directors and executive officers.
Further information concerning the beneficial ownership of our executive officers, directors and principal shareholders will be included in our Proxy Statement for the 2024 Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission. Recent Sales of Unregistered Securities and Use of Proceeds None.
Further information concerning the beneficial ownership of our executive officers, directors and principal shareholders will be included in our Proxy Statement for the 2025 Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission. Recent Sales of Unregistered Securities and Use of Proceeds None.
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on The Nasdaq Global Market (“Nasdaq”) under the symbol “KLIC.” On November 13, 2023, there were approximately 145 holders of record of the shares of outstanding common stock.
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on The Nasdaq Global Market (“Nasdaq”) under the symbol “KLIC.” Based on data provided by The Depository Trust Company, on November 11, 2024, the management believes that there were approximately 290 holders of record of the shares of outstanding common stock, as defined by Rule 12g5-1 of the Exchange Act.
On August 23, 2023, June 8, 2023, March 2, 2023 and November 16, 2022, the Board of Directors declared a quarterly dividend $0.19 per share of common stock. During the fiscal year ended September 30, 2023, the Company declared dividends of $0.76 per share of common stock.
On August 26, 2024, May 16, 2024, March 14, 2024 and November 15, 2023, the Board of Directors declared a quarterly dividend $0.20 per share of common stock, resulting in an aggregate dividend of $0.80 per share of common stock for the fiscal year ended September 28, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeInterest Income and Expense The following table reflects the interest income and interest expense for fiscal 2023 and 2022: Fiscal (dollar amounts in thousands) 2023 2022 $ Change % Change Interest income $ 32,906 $ 7,124 $ 25,782 361.9 % Interest expense $ (142) $ (208) $ 66 (31.7) % Interest income For fiscal 2023, the higher interest income as compared to fiscal 2022 was primarily due to higher weighted average interest rates on cash, cash equivalents and short-term investments. 35 Table of Contents Provision for Income Taxes The following table reflects the provision for income taxes and the effective tax rate for fiscal 2023 and 2022: Fiscal (dollar amounts in thousands) 2023 2022 Change Provision for income taxes $ 15,053 $ 43,443 $ (28,390) Effective tax rate 20.8 % 9.1 % 11.7 % For fiscal 2023, the decrease in provision for income taxes as compared to fiscal 2022 was primarily due to a decrease in profitability and the increase in effective tax rate was primarily related to the increase in the Global Intangible Low-Taxed Income (“GILTI”), resulting from the capitalization of research and development expenditures as mandated by the U.S.
Biggest changeInterest Income and Expense The following table reflects the interest income and interest expense for fiscal 2024 and 2023: Fiscal (dollar amounts in thousands) 2024 2023 $ Change % Change Interest income $ 34,230 $ 32,906 $ 1,324 4.0 % Interest expense $ (89) $ (142) $ 53 (37.3) % Interest income For fiscal 2024, the higher interest income as compared to fiscal 2023 was primarily due to higher weighted average interest rates on cash, cash equivalents and short-term investments.
Share Repurchase Program On August 15, 2017, the Company’s Board of Directors authorized the Program to repurchase up to $100 million of the Company’s common stock on or before August 1, 2020. In 2018, 2019 and 2020, the Board of Directors increased the share repurchase authorization under the Program to $200 million, $300 million and $400 million, respectively.
Share Repurchase Program On August 15, 2017, the Company's Board of Directors authorized a program (the "Program") to repurchase up to $100 million of the Company’s common stock on or before August 1, 2020. In 2018, 2019 and 2020, the Board of Directors increased the share repurchase authorization under the Program to $200 million, $300 million and $400 million, respectively.
Step two, or measurement, is based on the largest amount of benefit, which is more likely than not to be realized on settlement with the taxing authority, including resolution of related appeals or litigation processes, if any. Equity-Based Compensation The Company accounts for equity-based compensation under the provisions of ASC No. 718, Compensation - Stock Compensation (“ASC 718”).
Step two, or measurement, is based on the largest amount of benefit, which is more likely than not to be realized on settlement with the taxing authority, including resolution of related appeals or litigation processes, if any. 34 Table of Contents Equity-Based Compensation The Company accounts for equity-based compensation under the provisions of ASC No. 718, Compensation - Stock Compensation (“ASC 718”).
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section of this Form 10-K generally discusses fiscal 2023 and 2022 items and year-to-year comparisons between fiscal 2023 and 2022.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section of this Form 10-K generally discusses fiscal 2024 and 2023 items and year-to-year comparisons between fiscal 2024 and 2023.
The Facility Agreements also contain customary events of default, including, without limitation, non-payment of financial obligations when due, cross defaults to other material indebtedness of the Company and any breach of a representation or warranty under the Facility Agreements. As of September 30, 2023, there were no outstanding amounts under the Overdraft Facility.
The Facility Agreements also contain customary events of default, including, without limitation, non-payment of financial obligations when due, cross defaults to other material indebtedness of the Company and any breach of a representation or warranty under the Facility Agreements. As of September 28, 2024, there were no outstanding amounts under the Overdraft Facility.
Other Obligations and Contingent Payments In accordance with U.S. generally accepted accounting principles, certain obligations and commitments as of September 30, 2023 are appropriately not included in the Consolidated Balance Sheets and Statements of Operations in this Form 10-K.
Other Obligations and Contingent Payments In accordance with U.S. generally accepted accounting principles, certain obligations and commitments as of September 28, 2024 are appropriately not included in the Consolidated Balance Sheets and Statements of Operations in this Form 10-K.
If the Company reissues treasury stock at an amount below its acquisition cost and additional paid-in capital associated with prior treasury stock transactions is insufficient to cover the difference between acquisition cost and the reissue price, this difference is recorded against retained earnings. As of September 30, 2023, our remaining stock repurchase authorization under the Program was approximately $181.0 million.
If the Company reissues treasury stock at an amount below its acquisition cost and additional paid-in capital associated with prior treasury stock transactions is insufficient to cover the difference between acquisition cost and the reissue price, this difference is recorded against retained earnings. As of September 28, 2024, our remaining stock repurchase authorization under the Program was approximately $30.3 million.
While the Company anticipates long-term growth in semiconductor consumption, we observed trade-related adverse impacts in demand from China, which continues to persist in fiscal 2023 and beyond. 32 Table of Contents Net Revenue Our net revenues for fiscal 2023 decreased as compared to our net revenues for fiscal 2022.
While the Company anticipates long-term growth in semiconductor consumption, we observed trade-related adverse impacts in demand from China, which continues to persist in fiscal 2024 and beyond. Net Revenue Our net revenues for fiscal 2024 decreased as compared to our net revenues for fiscal 2023.
We intend to continue to use our cash for working capital needs and for general corporate purposes. 37 Table of Contents In this unprecedented macroeconomic environment, and as a result of the ongoing Israel-Hamas war and the prolonged Ukraine/Russia conflict or for other reasons, we may seek, as we believe appropriate, additional debt or equity financing which would provide capital for corporate purposes, working capital funding, additional liquidity needs or to fund future growth opportunities, including possible acquisitions.
In this unprecedented macroeconomic environment, and as a result of the ongoing Israel-Hamas war and the prolonged Ukraine/Russia conflict or for other reasons, we may seek, as we believe appropriate, additional debt or equity financing which would provide capital for corporate purposes, working capital funding, additional liquidity needs or to fund future growth opportunities, including possible acquisitions.
The decrease in net revenue is primarily due to lower volume in Ball Bonding Equipment, Wedge Bonding Equipment, Advanced Solutions, APS and All Others, as further outlined in the tables presented immediately below.
The decrease in net revenue is primarily due to lower volume in Wedge Bonding Equipment, Advanced Solutions and All Others, offset by the higher volumes in Ball Bonding Equipment as further outlined in the tables presented immediately below.
All Others For fiscal 2023, the lower net revenue in the “All Others” category as compared to fiscal 2022 was primarily due to lower volume of customer purchases in the General Semiconductor market and mini LED transfer solutions market.
All Others For fiscal 2024, the lower net revenue in the “All Others” category as compared to fiscal 2023 was primarily due to lower volume of customer purchases in the general semiconductor market and mini LED transfer solutions from softness in the advanced display market.
Discussions of fiscal 2021 items and year-to-year comparisons between fiscal 2022 and 2021 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the 2022 Annual Report filed on November 17, 2022, and amended on August 8, 2023 (the “2022 Annual Report”).
Discussions of fiscal 2022 items and year-to-year comparisons between fiscal 2023 and 2022 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the 2023 Annual Report filed on November 16, 2023 (the "2023 Annual Report").
If actual market conditions are less favorable than projections, additional inventory reserves may be required. Inventory reserve provision for certain subsidiaries is determined based on management’s estimate of future consumption for equipment and spare parts. This estimate is based on historical sales volumes, internal projections and market developments and trends.
If actual market conditions are less favorable than projections, additional inventory reserves may be required. Inventory reserve provision for certain subsidiaries is determined based on management’s estimate of future consumption for equipment and spare parts.
As of September 30, 2023, other than the bank guarantee disclosed in Note 10, we did not have any other off-balance sheet arrangements, such as contingent interests or obligations associated with variable interest entities. 39 Table of Contents
As of September 28, 2024, other than the bank guarantee disclosed in Note 10, we did not have any other off-balance sheet arrangements, such as contingent interests or obligations associated with variable interest entities.
This trading plan was most recently modified on May 29, 2023. The Program may be suspended or discontinued at any time and is funded using the Company’s available cash, cash equivalents and short-term investments. Under the Program, shares may be repurchased through open market and/or privately negotiated transactions at prices deemed appropriate by management.
The Program may be suspended or discontinued at any time and is funded using the Company’s available cash, cash equivalents and short-term investments. Under the Program, shares may be repurchased through open market and/or privately negotiated transactions at prices deemed appropriate by management.
Impairment Charges For fiscal 2023, the Company recognized a non-cash impairment charge of $21.5 million related to goodwill and intangible assets in the Lithography reporting unit, as well as on an investment in a non-marketable equity security. The impairment charge in the prior year period relates to the impairment on an investment in a non-marketable equity security.
The impairment charge in the fiscal 2023 relates to non-cash impairment charge of $21.5 million related to goodwill and intangible assets in the Lithography reporting unit, as well as on the investment in the non-marketable equity security.
As of September 30, 2023 and October 1, 2022, approximat e ly $576.9 million and $499.8 million of cash, cash equivalents, and short-term investments were held by the Company’s foreign subsidiaries, respectively, with a large portion of the cash amounts expected to be available for use in the U.S. without incurring additional U.S. income tax.
As of September 28, 2024 and September 30, 2023, approximately $302.6 million and $576.9 million of cash, cash equivalents, and short-term investments were held by the Company’s foreign subsidiaries, respectively, with a large portion of the cash amounts expected to be available for use in the U.S. without incurring additional U.S. income tax.
The Company measures revenue based on the amount of consideration we expect to be entitled to in exchange for products or services. Any variable consideration such as sales incentives are recognized as a reduction of net revenue at the time of revenue recognition. The length of time between invoicing and payment is not significant under our payment terms.
The Company measures revenue based on the amount of consideration we expect to be entitled to in exchange for products or services. Any variable consideration such as sales incentives are recognized as a reduction of net revenue at the time of revenue recognition.
The timing and amount of repurchase transactions under the Program depend on market conditions as well as corporate and regulatory considerations. During the fiscal year ended September 30, 2023, the Company repurchased a total of approximately 1,515.0 thousand shares of common stock at a cost of approximately $68.1 million.
The timing and amount of repurchase transactions under the Program depend on market conditions as well as corporate and regulatory considerations. 41 Table of Contents During the fiscal year ended September 28, 2024, the Company repurchased a total of approximately 3,221.0 thousand shares of common stock at a cost of approximately $151.0 million.
Expenditures are anticipated to be primarily used for research and development projects, enhancements to our manufacturing operations, improvements to our information technology security, implementation of our enterprise resource planning system and leasehold improvements for our facilities.
The actual amounts for fiscal 2025 will vary depending on market conditions. Expenditures are anticipated to be primarily used for research and development projects, enhancements to our manufacturing operations, improvements to our information technology security, ongoing implementation of our enterprise resource planning system and leasehold improvements for our facilities.
Additionally, as of September 30, 2023, the Company had deferred tax liabilities of $37.3 million and unrecognized tax benefit recorded within the income tax payable for uncertain tax positions of $17.7 million, including related accrued interest of $2.8 million.
Additionally, as of September 28, 2024, the Company had deferred tax liabilities of $34.6 million and unrecognized tax benefit recorded within the income tax payable for uncertain tax positions of $21.4 million, including related accrued interest of $3.7 million.
The Company’s operations and capital requirements are funded primarily by cash on hand, cash generated by foreign operating activities and cash from our existing Facility Agreements.
The decrease is primarily due to the repatriation of cash held by the Company's foreign subsidiaries to the U.S. The Company’s operations and capital requirements are funded primarily by cash on hand, cash generated by foreign operating activities and cash from our existing Facility Agreements.
Control is considered transferred when title and risk of loss pass, when the customer becomes obligated to pay and, where applicable, when the customer has accepted the products or upon expiration of the acceptance period. For sales to distributors, payment is due on our standard commercial terms and is not contingent upon resale of the products.
Control is considered transferred when title and risk of loss pass, when the customer becomes obligated to pay and, where applicable, when the customer has accepted the products or upon expiration of the acceptance period.
On March 3, 2022, the Board of Directors increased the share repurchase authorization under the Program by an additional $400 million to $800 million, and extended its duration through August 1, 2025. On May 7, 2022, the Company entered into a written trading plan under Rule 10b5-1 of the Exchange Act to facilitate repurchases under the Program.
On March 3, 2022, the Board of Directors increased the share repurchase authorization under the Program by an additional $400 million to $800 million, and extended its duration through August 1, 2025.
Accounting for Impairment of Goodwill ASC No. 350, Intangibles-Goodwill and Other requires goodwill and other intangible assets with indefinite lives to be reviewed for impairment annually, or more frequently if circumstances indicate a possible impairment.
This estimate is based on historical sales volumes, internal projections and market developments and trends. 33 Table of Contents Accounting for Impairment of Goodwill ASC No. 350, Intangibles-Goodwill and Other requires goodwill and other intangible assets with indefinite lives to be reviewed for impairment annually, or more frequently if circumstances indicate a possible impairment.
The net change in operating assets and liabilities was primarily driven by a decrease in accounts payable and accrued expenses and other current liabilities of $128.7 million, and an increase in prepaid expenses and other current assets of $37.9 million and inventories of $14.9 million.
The net change in operating assets and liabilities was primarily driven by an increase in accounts and notes receivable of $34.7 million, an increase in inventories of $31.5 million, and a decrease in income tax payable of $17.7 million. This was partially offset by a decrease in prepaid expenses and other current assets of $9.1 million.
Wedge Bonding Equipment For fiscal 2023, the higher Wedge Bonding Equipment gross profit margin as compared to fiscal 2022 was primarily driven by favorable product mix, including higher sales of higher margin products.
Wedge Bonding Equipment For fiscal 2024, the lower Wedge Bonding Equipment gross profit margin as compared to fiscal 2023 was primarily driven by less favorable product mix, including lower sales of higher margin products and a shift in customer mix, including higher sales to customers where we achieve lower average margins.
For fiscal 2023, the higher Advanced Solutions loss from operations as compared to the prior year period was primarily due to the decrease in revenue and changes in operating expenses as explained under “Net Revenue” and “Operating Expenses” above.
Advanced Solutions For fiscal 2024, the higher Advanced Solutions loss from operations as compared to fiscal 2023 was primarily due to the decrease in revenue, inventory write-down and impairment charges as explained under “Net Revenue”, “Gross Profit” and “Operating Expenses” above. 38 Table of Contents All Others For fiscal 2024, the lower All Others loss from operations as compared to fiscal 2023 was primarily due to the decrease in revenue and changes in operating expenses as explained under “Net Revenue” and “Operating Expenses” above.
The Company’s impairment test is performed by comparing the fair value of a reporting unit with its carrying value, and determining if the carrying amount exceeds its fair value. 30 Table of Contents 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.
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.
The Company records a valuation allowance to reduce its deferred tax assets to the amount expected, on a more likely than not basis, to be realized.
Income Taxes In accordance with ASC No. 740 , Income Taxes , deferred income taxes are determined using the balance sheet method. The Company records a valuation allowance to reduce its deferred tax assets to the amount expected, on a more likely than not basis, to be realized.
Amounts outstanding under the Overdraft Facility, including interest, are payable upon thirty days written demand by the Bank. Interest on the Overdraft Facility is calculated on a daily basis, and the applicable interest rate is calculated at the Secured Overnight Financing Rate (“SOFR”) plus a margin of 1.5% per annum.
Interest on the Overdraft Facility is calculated on a daily basis, and the applicable interest rate is calculated at the Secured Overnight Financing Rate (“SOFR”) plus a margin of 1.5% per annum. The Overdraft Facility is an unsecured facility per the terms of the Facility Agreements.
Wedge Bonding Equipment For fiscal 2023, the lower Wedge Bonding Equipment net revenue as compared to fiscal 2022 was due to lower volume of customer purchases primarily in the General Semiconductor market due to the lower power discrete devices demand, which was partially offset by the higher volume of customer purchases in the automotive and renewable energy market.
This has resulted in the reduction in semiconductor supply chain inventory levels and improved factory utilization levels. 36 Table of Contents Wedge Bonding Equipment For fiscal 2024, the lower Wedge Bonding Equipment net revenue as compared to fiscal 2023 was primarily due to lower volume of customer purchases primarily in the general semiconductor market due to the lower power discrete devices demand, as well as in the automotive and renewable energy market.
The net cash used in investing activities was due to net purchase of short-term investments of $10.0 million, cash outflow for the AJA acquisition of $36.9 million and capital expenditures of $44.4 million. 36 Table of Contents The net cash used in financing activities was primarily due to common stock repurchases of $69.2 million and dividend payments of $42.0 million.
The net cash used in investing activities was due to net purchase of short-term investments of $120.0 million, capital expenditures of $16.1 million and investment in a private equity fund of $2.4 million. The net cash used in financing activities was primarily due to common stock repurchases of $150.8 million and dividend payments of $44.2 million.
LIQUIDITY AND CAPITAL RESOURCES The following table reflects the total cash, cash equivalents and short-term investments as of September 30, 2023 and October 1, 2022: As of (dollar amounts in thousands) September 30, 2023 October 1, 2022 Change Cash and cash equivalents $ 529,402 $ 555,537 $ (26,135) Short-term investments 230,000 220,000 10,000 Total cash, cash equivalents, and short-term investments $ 759,402 $ 775,537 $ (16,135) Percentage of total assets 50.6 % 48.8 % The following table reflects the summarized Consolidated Statements of Cash Flows information for fiscal 2023 and 2022: Fiscal (in thousands) 2023 2022 Net cash provided by operating activities $ 173,404 $ 390,188 Net cash (used in) / provided by investing activities (91,338) 133,799 Net cash used in financing activities (111,876) (321,191) Effect of exchange rate changes on cash and cash equivalents 3,675 (10,047) Changes in cash, and cash equivalents $ (26,135) $ 192,749 Cash and cash equivalents, beginning of period 555,537 362,788 Cash and cash equivalents, end of period $ 529,402 $ 555,537 Fiscal 2023 Net cash provided by operating activities consisted of net income of $57.1 million, non-cash adjustments of $73.8 million and a net favorable change in operating assets and liabilities of $42.4 million.
LIQUIDITY AND CAPITAL RESOURCES The following table reflects the total cash, cash equivalents and short-term investments as of September 28, 2024 and September 30, 2023: As of (dollar amounts in thousands) September 28, 2024 September 30, 2023 Change Cash and cash equivalents $ 227,147 $ 529,402 $ (302,255) Short-term investments 350,000 230,000 120,000 Total cash, cash equivalents, and short-term investments $ 577,147 $ 759,402 $ (182,255) Percentage of total assets 46.5 % 50.6 % 39 Table of Contents The following table reflects the summarized Consolidated Statements of Cash Flows information for fiscal 2024 and 2023: Fiscal (in thousands) 2024 2023 Net cash provided by operating activities $ 31,037 $ 173,404 Net cash used in investing activities (138,501) (91,338) Net cash used in financing activities (196,100) (111,876) Effect of exchange rate changes on cash and cash equivalents 1,309 3,675 Changes in cash, and cash equivalents $ (302,255) $ (26,135) Cash and cash equivalents, beginning of period 529,402 555,537 Cash and cash equivalents, end of period $ 227,147 $ 529,402 Fiscal 2024 Net cash provided by operating activities consisted of net loss of $69.0 million, non-cash adjustments of $179.3 million and a net unfavourable change in operating assets and liabilities of $79.2 million.
Advanced Solutions For fiscal 2023, the lower Advanced Solutions net revenue as compared to fiscal 2022 was due to timing of revenue recognition for certain customer contracts, which was partially offset by the higher volume of customer purchases in the General Semiconductor market.
Advanced Solutions For fiscal 2024, the lower Advanced Solutions net revenue as compared to fiscal 2023 was primarily due to lower volume of customer purchases primarily in the general semiconductor market and the cancellation of Project W.
The net cash used in financing activities was primarily due to common stock repurchases of $281.3 million and dividend payments of $39.4 million. Fiscal 2024 Liquidity and Capital Resource Outlook We expect our fiscal 2024 capital expenditures to be between $23.0 million and $27.0 million. The actual amounts for fiscal 2024 will vary depending on market conditions.
The net cash used in financing activities was primarily due to common stock repurchases of $69.2 million and dividend payments of $42.0 million. 40 Table of Contents Fiscal 2025 Liquidity and Capital Resource Outlook We expect our fiscal 2025 capital expenditures to be between $13.0 million and $17.0 million.
The lower volume was a result of uncertainties in the overall macroeconomic environment, leading to a decline in consumer purchases. 33 Table of Contents Gross Profit Margin The following table reflects the gross profit as a percentage of net revenue by reportable segment for fiscal 2023 and 2022: Fiscal 2023 2022 Basis point change Ball Bonding Equipment 45.6 % 49.0 % (340) Wedge Bonding Equipment 52.1 % 48.1 % 400 Advanced Solutions 37.4 % 33.7 % 370 APS 55.2 % 60.5 % (530) All Others 44.4 % 54.5 % (1,010) Total gross margin 48.3 % 49.8 % (150) Ball Bonding Equipment For fiscal 2023, the lower Ball Bonding Equipment gross profit margin as compared to fiscal 2022 was primarily driven by lower volume of customer purchases resulting from uncertainties in the overall macroeconomic environment and high semiconductor supply chain inventories, less favorable product mix, including lower sales of higher margin products, and less favorable customer mix.
Gross Profit Margin The following table reflects the gross profit as a percentage of net revenue by reportable segment for fiscal 2024 and 2023: Fiscal 2024 2023 Basis point change Ball Bonding Equipment 47.7 % 45.6 % 210 Wedge Bonding Equipment 46.7 % 52.1 % (540) Advanced Solutions (81.8) % 37.4 % (11,920) APS 55.6 % 55.2 % 40 All Others 9.2 % 44.4 % (3,520) Total gross margin 38.1 % 48.3 % (1,020) Ball Bonding Equipment For fiscal 2024, the higher Ball Bonding Equipment gross profit margin as compared to fiscal 2023 was primarily driven by a favorable product mix, including higher sales of higher margin products.
Fiscal 2022 Net cash provided by operating activities consisted of net income of $433.5 million, non-cash adjustments of $22.6 million and a net unfavorable change in operating assets and liabilities of $65.9 million.
Fiscal 2023 Net cash provided by operating activities consisted of net income of $57.1 million, non-cash adjustments of $73.8 million and a net favorable change in operating assets and liabilities of $42.4 million.
These amounts are not included in the contractual obligation table below because we are unable to reasonably estimate the timing of these payments at this time. 38 Table of Contents The following table presents certain payments due by the Company under contractual obligations with minimum firm commitments as of September 30, 2023: Payments due in (in thousands) Total Less than 1 year 1 - 3 years 3 - 5 years More than 5 years Inventory purchase obligations (1) $ 182,567 182,567 $ — $ — $ — U.S. one-time transition tax payable (2) (reflected on our Balance Sheets) 47,686 12,606 35,080 — — Total $ 230,253 $ 195,173 $ 35,080 $ — $ — (1) We order inventory components in the normal course of our business.
The following table presents certain payments due by the Company under contractual obligations with minimum firm commitments as of September 28, 2024: Payments due in (in thousands) Total Less than 1 year 1 - 3 years 3 - 5 years More than 5 years Inventory purchase obligations (1) $ 126,078 126,078 $ — $ — $ — U.S. one-time transition tax payable (2) (reflected on our Balance Sheets) 28,619 16,808 11,811 — — Total $ 154,697 $ 142,886 $ 11,811 $ — $ — (1) We order inventory components in the normal course of our business.
Dividends On August 23, 2023, June 8, 2023, March 2, 2023 and November 16, 2022, the Board of Directors declared a quarterly dividend $0.19 per share of common stock. During the fiscal year ended September 30, 2023, the Company declared dividends of $0.76 per share of common stock.
Dividends On August 26, 2024, May 16, 2024, March 14, 2024 and November 15, 2023, the Board of Directors declared a quarterly dividend $0.20 per share of common stock, resulting in an aggregate dividend of $0.80 per share of common stock for the fiscal year ended September 28, 2024.
The following table reflects the net revenue by reportable segment for fiscal 2023 and 2022: Fiscal (dollar amounts in thousands) 2023 2022 $ Change % Change Net revenue % of total net revenue Net revenue % of total net revenue Ball Bonding Equipment $ 287,465 38.7 % $ 909,428 60.5 % $ (621,963) (68.4) % Wedge Bonding Equipment 175,550 23.6 % 194,086 12.9 % (18,536) (9.6) % Advanced Solutions 72,256 9.7 % 94,683 6.3 % (22,427) (23.7) % APS 160,718 21.7 % 197,152 13.1 % (36,434) (18.5) % All Others 46,502 6.3 % 108,271 7.2 % (61,769) (57.1) % Total net revenue $ 742,491 100.0 % $ 1,503,620 100.0 % $ (761,129) (50.6) % Ball Bonding Equipment For fiscal 2023, the lower Ball Bonding Equipment net revenue as compared to fiscal 2022 was due to lower volume of customer purchases primarily in the General Semiconductor and Memory markets.
The following table reflects the net revenue by reportable segment for fiscal 2024 and 2023: Fiscal (dollar amounts in thousands) 2024 2023 $ Change % Change Net revenue % of total net revenue Net revenue % of total net revenue Ball Bonding Equipment $ 357,833 50.7 % $ 287,465 38.7 % $ 70,368 24.5 % Wedge Bonding Equipment 105,826 15.0 % 175,550 23.6 % (69,724) (39.7) % Advanced Solutions 52,876 7.5 % 72,256 9.7 % (19,380) (26.8) % APS 160,009 22.7 % 160,718 21.6 % (709) (0.4) % All Others 29,688 4.1 % 46,502 6.4 % (16,814) (36.2) % Total net revenue $ 706,232 100.0 % $ 742,491 100.0 % $ (36,259) (4.9) % Ball Bonding Equipment For fiscal 2024, the increase in Ball Bonding Equipment net revenue as compared to fiscal 2023 was primarily due to higher volumes of customer purchases related to technology transitions and improving market conditions in general semiconductor and memory end markets.
A portion of these orders are non-cancellable and a portion may have varying penalties and charges in the event of cancellation. (2) Associated with the U.S. one-time transition tax on certain earnings and profits of our foreign subsidiaries in relation to the TCJA.
A portion of these orders are non-cancellable and a portion may have varying penalties and charges in the event of cancellation.
Because of the volatility of customer demand, possibility of customer changes in delivery schedules or cancellations and potential delays in product shipments, our backlog as of any particular date may not be indicative of net revenue for any succeeding period.
Because of the volatility of customer demand, possibility of customer changes in delivery schedules or cancellations and potential delays in product shipments, our backlog as of any particular date may not be indicative of net revenue for any succeeding period. 35 Table of Contents The following tables reflect the bookings and backlog for fiscal 2024 and 2023: Fiscal (in thousands) 2024 2023 Bookings $ 430,994 $ 656,170 As of (in thousands) September 28, 2024 September 30, 2023 Backlog $ 148,585 $ 423,824 The semiconductor industry is volatile and our operating results are adversely impacted by volatile worldwide economic conditions.
These were partially offset by $10.5 million lower sales representative commissions. 34 Table of Contents Research and Development (“R&D”) For fiscal 2023, the higher R&D expenses as compared to fiscal 2022 was primarily due to $4.2 million higher prototype material costs and $3.3 million higher staff costs related to an increase in headcount.
This was partially offset by $4.8 million net favorable variance in foreign exchange. Research and Development (“R&D”) For fiscal 2024, the higher R&D expenses as compared to fiscal 2023 was primarily to $8.4 million higher staff cost related to an increase in headcount and equity compensation, $4.1 million higher prototype materials and $1.1 million higher miscellaneous expenses.
Credit Facilities On February 15, 2019, the Company entered into a Facility Letter and Overdraft Agreement (collectively, the “Facility Agreements”) with MUFG Bank, Ltd., Singapore Branch (the “Bank”). The Facility Agreements provide the Company and one of its subsidiaries with an overdraft facility of up to $150.0 million (the “Overdraft Facility”) for general corporate purposes.
(2) Associated with the U.S. one-time transition tax on certain earnings and profits of our foreign subsidiaries in relation to the TCJA. 42 Table of Contents Credit Facilities On February 15, 2019, the Company entered into a Facility Letter and Overdraft Agreement (collectively, the “Facility Agreements”) with MUFG Bank, Ltd., Singapore Branch (the “Bank”).
Our business is subject to contingencies related to customer orders, including: • Right of Return : A large portion of our revenue comes from the sale of equipment used in the semiconductor assembly process. Other product sales relate to consumable products, which are sold in high-volume quantities, and are generally maintained at low stock levels at the customer’s facility.
For sales to distributors, payment is due on our standard commercial terms and is not contingent upon resale of the products. 32 Table of Contents Our business is subject to contingencies related to customer orders, including: • Right of Return : A large portion of our revenue comes from the sale of equipment used in the semiconductor assembly process.
The following tables reflect the income/(loss) from operations by reportable segment for fiscal 2023 and 2022: Fiscal (dollar amounts in thousands) 2023 2022 $ Change % Change Ball Bonding Equipment $ 81,929 $ 385,276 $ (303,347) (78.7) % Wedge Bonding Equipment 63,088 66,649 (3,561) (5.3) % Advanced Solutions (32,530) (15,389) (17,141) (111.4) % APS 47,654 82,473 (34,819) (42.2) % All Others (36,797) 25,732 (62,529) (243.0) % Corporate expenses (83,907) (74,669) (9,238) (12.4) % Total income from operations $ 39,437 $ 470,072 $ (430,635) (91.6) % Ball Bonding Equipment, Wedge Bonding Equipment, Advanced Solutions, APS and All Others For fiscal 2023, the lower Ball Bonding Equipment, Wedge Bonding Equipment, and APS income from operations as compared to the prior year period was primarily due to the decrease in revenue and changes in operating expenses as explained under “Net Revenue” and “Operating Expenses” above.
(Loss)/Income from Operations The following table reflect the income/(loss) from operations by reportable segment for fiscal 2024 and 2023: Fiscal (dollar amounts in thousands) 2024 2023 $ Change % Change Ball Bonding Equipment $ 113,000 $ 81,929 $ 31,071 37.9 % Wedge Bonding Equipment 19,575 63,088 (43,513) (69.0) % Advanced Solutions (155,350) (32,530) (122,820) (377.6) % APS 49,744 47,654 2,090 4.4 % All Others (33,527) (36,797) 3,270 8.9 % Corporate expenses (85,938) (83,907) (2,031) (2.4) % Total (loss)/income from operations $ (92,496) $ 39,437 $ (131,933) (334.5) % Ball Bonding Equipment For fiscal 2024, the higher Ball Bonding Equipment income from operations as compared to fiscal 2023 was primarily due to the increase in revenue, gross margin and changes in operating expenses as explained under “Net Revenue”, "Gross Profit" and “Operating Expenses” above.
Customer returns have historically represented a very small percentage of customer sales on an annual basis. 29 Table of Contents • Warranties : Our equipment is generally shipped with a one-year warranty against manufacturing defects. We establish reserves for estimated warranty expense when revenue for the related equipment is recognized.
Other product sales relate to consumable products, which are sold in high-volume quantities, and are generally maintained at low stock levels at the customer’s facility. Customer returns have historically represented a very small percentage of customer sales on an annual basis. • Warranties : Our equipment is generally shipped with a one-year warranty against manufacturing defects.
Tax Cuts and Jobs Act of 2017 (“TCJA”) effective in fiscal 2023 and the net release of valuation allowances recorded against certain loss and credit carryforwards in fiscal 2022, partially offset by tax benefits from changes jurisdictional mix of profitability. Please refer to “Note 15: Income Taxes” to our consolidated financial statements in Item 8 for additional information.
Tax Court opinion in Varian Medical Systems, Inc. v. Commissioner related to the U.S. Tax Cuts and Jobs Act of 2017 (“TCJA”) one-time transition tax, partially offset by an increase in valuation allowance. Please refer to “Note 14: Income Taxes” to our consolidated financial statements in Item 8 for additional information.
RECENT ACCOUNTING PRONOUNCEMENTS See Note 1 to our consolidated financial statements in Item 8 for a description of certain recent accounting pronouncements, including the expected dates of adoption and effects on our consolidated results of operations and financial condition. 31 Table of Contents RESULTS OF OPERATIONS Results of Operations for fiscal 2023 and 2022 The following table reflects the income from operations for fiscal 2023 and 2022: Fiscal (dollar amounts in thousands) 2023 2022 $ Change % Change Net revenue $ 742,491 $ 1,503,620 $ (761,129) (50.6) % Cost of sales 383,836 755,300 (371,464) (49.2) % Gross profit 358,655 748,320 (389,665) (52.1) % Selling, general and administrative 152,982 140,050 12,932 9.2 % Research and development 144,701 136,852 7,849 5.7 % Impairment charges 21,535 1,346 20,189 1,499.9 % Operating expenses 319,218 278,248 40,970 14.7 % Income from operations $ 39,437 $ 470,072 $ (430,635) (91.6) % Bookings and Backlog Our backlog consists of customer orders scheduled for shipment within the next twelve months.
RESULTS OF OPERATIONS Results of Operations for fiscal 2024 and 2023 The following table reflects the (loss) / income from operations for fiscal 2024 and 2023: Fiscal (dollar amounts in thousands) 2024 2023 $ Change % Change Net revenue $ 706,232 $ 742,491 $ (36,259) (4.9) % Cost of sales 437,478 383,836 53,642 14.0 % Gross profit 268,754 358,655 (89,901) (25.1) % Selling, general and administrative 165,564 152,982 12,582 8.2 % Research and development 151,214 144,701 6,513 4.5 % Impairment charges 44,472 21,535 22,937 106.5 % Operating expenses 361,250 319,218 42,032 13.2 % (Loss) / Income from operations $ (92,496) $ 39,437 $ (131,933) (334.5) % Bookings and Backlog Our backlog consists of customer orders scheduled for shipment within the next twelve months.
APS For fiscal 2023, the lower APS gross profit margin as compared to fiscal 2022 was primarily driven by lower volume, less favorable product mix among the spares, services and bonding tools, and lower average selling prices of bonding tools.
Advanced Solutions For fiscal 2024, the lower Advanced Solutions gross profit margin as compared to fiscal 2023 was primarily driven by the inventory write-down charges we incurred as a result of the cancellation of Project W and less favorable product mix, including lower sales of higher margin products.
For fiscal 2023, the loss from operations in the “All Others” category as compared to the income from operations in prior year period was primarily due to decrease in revenue as explained under “Net Revenue” above, the goodwill impairment charge, integration of newly acquired business and net unfavorable variance in foreign exchange.
Wedge Bonding Equipment For fiscal 2024, the lower Wedge Bonding Equipment income from operations as compared to fiscal 2023 was primarily due to the decrease in revenue, gross margin and changes in operating expenses as explained under “Net Revenue”, "Gross Profit" and “Operating Expenses” above.
For further information on goodwill and other intangible assets, see Note 4 to our consolidated financial statements in Item 8. Income Taxes In accordance with ASC No. 740 , Income Taxes , deferred income taxes are determined using the balance sheet method.
The discount rate utilized in our valuation model could also be impacted by changes in the underlying interest rates and risk premiums included in the determination of the cost of capital. For further information on goodwill and other intangible assets, see Note 4 to our consolidated financial statements in Item 8.
Operating Expenses The following table reflects the operating expenses for fiscal 2023 and 2022: Fiscal (dollar amounts in thousands) 2023 2022 $ Change % Change Selling, general and administrative $ 152,982 $ 140,050 $ 12,932 9.2 % Research and development 144,701 136,852 $ 7,849 5.7 % Impairment charges 21,535 1,346 $ 20,189 1499.9 % Total $ 319,218 $ 278,248 $ 40,970 14.7 % Selling, General and Administrative (“SG&A”) For fiscal 2023, the higher SG&A expenses as compared to fiscal 2022 was primarily due to $15.4 million net unfavorable variance in foreign exchange, $2.7 million higher staff costs due to an increase in headcount, $1.7 million higher professional services and $1.2 million higher amortization.
All Others For fiscal 2024, the lower All Others gross profit margin as compared to fiscal 2023 was primarily driven by the overall lower volumes, the provision of excess and obsolete materials, less favorable product mix, including lower sales of higher margin products and the reversal of previously accrued customer credit program in the prior year period. 37 Table of Contents Operating Expenses The following table reflects the operating expenses for fiscal 2024 and 2023: Fiscal (dollar amounts in thousands) 2024 2023 $ Change % Change Selling, general and administrative $ 165,564 $ 152,982 $ 12,582 8.2 % Research and development 151,214 144,701 $ 6,513 4.5 % Impairment charges 44,472 21,535 $ 22,937 106.5 % Total $ 361,250 $ 319,218 $ 42,032 13.2 % Selling, General and Administrative (“SG&A”) For fiscal 2024, the higher SG&A expenses as compared to fiscal 2023 was primarily due to $4.8 million higher staff cost, $4.2 million higher sales representative commissions, $4.1 million severance expenses, $2.2 million higher miscellaneous expenses and $1.6 million higher professional services.
Removed
The following tables reflect the bookings and backlog for fiscal 2023 and 2022: Fiscal (in thousands) 2023 2022 Bookings $ 656,170 $ 1,226,524 As of (in thousands) September 30, 2023 October 1, 2022 Backlog $ 423,824 $ 510,145 The semiconductor industry is volatile and our operating results are adversely impacted by volatile worldwide economic conditions.
Added
We establish reserves for estimated warranty expense when revenue for the related equipment is recognized.
Removed
The lower volume in these end markets was a result of uncertainties in the overall macroeconomic environment, leading to a decline in consumer and industrial purchases. This was exacerbated by the high semiconductor supply chain inventories, which contributed to low utilization of our equipment by our customers, resulting in lower demand for our products.
Added
The Company’s performance obligations relate to contracts with a duration of less than one year, therefore as allowed under ASC 606, we have opted not to disclose the unsatisfied performance obligations for contracts with original expected durations of less than one year. The length of time between invoicing and payment is not significant under our payment terms.
Removed
APS For fiscal 2023, the lower APS net revenue as compared to fiscal 2022 was primarily due to lower volume of customer purchases primarily in spares, services and bonding tools. The lower volume was also due to low utilization of our equipment resulting from the decline in consumer and industrial purchases and high semiconductor supply chain inventories.
Added
The Company’s impairment test is performed by comparing the fair value of a reporting unit with its carrying value, and determining if the carrying amount exceeds its fair value.
Removed
Advanced Solutions For fiscal 2023, the higher Advanced Solutions gross profit margin as compared to fiscal 2022 was primarily due to the reversal of previously accrued customer credit program due to the change in accounting estimates resulting from new information.
Added
The Company performed its annual impairment test in the fourth quarter of fiscal 2024 and elected to perform the quantitative impairment test as permitted by ASC 350. Based on the quantitative assessment performed on all its reporting units, the Company concluded that no impairment on the Company's recorded goodwill was required.
Removed
All Others For fiscal 2023, the lower All Others gross profit margin as compared to fiscal 2022 was primarily due to less favorable product mix. This was partially offset by the reversal of previously accrued customer credit program due to the change in accounting estimates resulting from new information.
Added
The persistent macroeconomic headwinds could, in the future, require changes to assumptions utilized in the determination of the estimated fair values of the reporting units which could result in future goodwill impairment charges. Net sales and earnings growth rates could be negatively impacted by reductions or changes in demand for our products.
Removed
See Note 4: Goodwill and Intangible Assets and Note 6: Equity Investments of the Notes to the Consolidated Financial Statements for further information. Income from Operations For fiscal 2023, total income from operations was lower as compared to fiscal 2022. This was primarily due to lower gross profit and higher operating expenses in fiscal 2023.
Added
RECENT ACCOUNTING PRONOUNCEMENTS See Note 1 to our consolidated financial statements in Item 8 for a description of certain recent accounting pronouncements, including the expected dates of adoption and effects on our consolidated results of operations and financial condition.
Removed
The decrease in income tax payable was primarily due to lower profitability.
Added
This was partially offset by $6.9 million lower professional services. Impairment Charges For fiscal 2024, the higher impairment charges as compared to the fiscal 2023 was due to $44.5 million impairment charges on long-lived assets related to the cancellation of Project W.
Removed
This was partially offset by a decrease in accounts and notes receivable of $113.3 million and income tax payable of $4.9 million. The decrease in accounts payable and accrued expenses and other current liabilities was primarily due to lower purchases in the fourth quarter of fiscal 2022, lower accrued employee compensation, accrued customer obligations and accrued commissions.
Added
Provision for Income Taxes The following table reflects the provision for income taxes and the effective tax rate for fiscal 2024 and 2023: Fiscal (dollar amounts in thousands) 2024 2023 Change Provision for income taxes $ 10,651 $ 15,053 $ (4,402) Effective tax rate (18.3) % 20.8 % (39.1) % For fiscal 2024, the decrease in provision for income taxes and effective tax rate as compared to fiscal 2023 was primarily due to a decrease in overall profitability, the tax impact of the one-time charge for cancellation of Project W, and the tax benefit from the U.S.
Removed
The increase in prepaid expenses and other current assets was mainly due to the addition of contract assets in fiscal 2022. The increase in inventories was due to increased manufacturing activities to meet higher demand in the first half of fiscal 2022 followed by slower utilization due to lower demand in the second half of fiscal 2022.
Added
The non-cash adjustments were primarily due to impairment charges of $44.5 million and inventory write-down of $57.3 million as a result of the cancellation of the Project.
Removed
The decrease in accounts and notes receivable was due to lower sales in the fourth quarter of fiscal 2022 and a change in customer mix of different credit terms. The net cash provided by investing activities was primarily due to net maturity of short-term investments of $157.0 million, partially offset by capital expenditures of $23.0 million.
Added
The increase in accounts and other receivable was primarily due to the timing of payments due. The increase in inventories was due to the buildup of long lead time materials to fulfill certain customer purchase orders.
Removed
The Overdraft Facility is an unsecured facility per the terms of the Facility Agreements.
Added
The decrease in income tax payable is primarily due to the current year payment of the U.S. one-time transition tax and tax benefit from the U.S. Tax Court opinion in Varian Medical Systems, Inc. v. Commissioner . The decrease in prepaid expenses was mainly due the transfer of contract assets to net account receivables.
Added
The decrease in income tax payable was primarily due to lower profitability. The net cash used in investing activities was due to net purchase of short-term investments of $10.0 million, cash outflow for the acquisition of Advanced Jet Automation Co., Ltd. of $36.9 million and capital expenditures of $44.4 million.
Added
We intend to continue to use our cash for working capital needs and for general corporate purposes.
Added
On November 17, 2023, the Company modified its written trading plan under Rule 10b5-1 of the Exchange Act, dated as of May 7, 2022, to facilitate repurchases under the Program. The modification provided for the purchase of up to approximately $169 million of the Company’s common stock from November 20, 2023 through August 1, 2025.
Added
These amounts are not included in the contractual obligation table below because we are unable to reasonably estimate the timing of these payments at this time.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−1 removed6 unchanged
Biggest changeOur international operations are also exposed to foreign currency fluctuations that impact the remeasurement of net monetary assets of those operations whose functional currency, the U.S. dollar, differs from their respective local currencies, most notably in Israel, Singapore and Switzerland.
Biggest changeOur international operations are also exposed to foreign currency fluctuations that impact the remeasurement of net monetary assets of those operations whose functional currency, the U.S. dollar, differs from their respective local currencies, most notably in Israel and Singapore. Our U.S. operations also have foreign currency exposure due to net monetary assets denominated in currencies other than the U.S. dollar.
Based on our foreign currency exposure as of September 30, 2023, a 10.0% fluctuation could impact our financial position, results of operations or cash flows by $5.0 to $6.0 million. Our attempts to hedge against these risks may not be successful and may result in a material adverse impact on our financial results and cash flow.
Based on our foreign currency exposure as of September 28, 2024, a 10.0% fluctuation could impact our financial position, results of operations or cash flows by $4.0 to $5.0 million. Our attempts to hedge against these risks may not be successful and may result in a material adverse impact on our financial results and cash flow.
We have foreign exchange forward contracts with a notional amount of $54.6 million outstanding as of September 30, 2023. 40 Table of Contents
We have foreign exchange forward contracts with a notional amount of $46.2 million outstanding as of September 28, 2024. 43 Table of Contents
Removed
Our U.S. operations also have foreign currency exposure due to net monetary assets denominated in currencies other than the U.S. dollar.

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