10-Q 1 klic-20240330.htm 10-Q klic-20240330
March 30, 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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 30, 2024
 
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from                  to                    .
 
Commission File No.: 0-121
KULICKE AND SOFFA INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania
23-1498399
(State or other jurisdiction of incorporation)(IRS Employer
 Identification No.)
 
23A Serangoon North Avenue 5, #01-01, Singapore 554369
1005 Virginia Dr., Fort Washington, PA 19034
(Address of principal executive offices and Zip Code)
(215) 784-6000
(Registrant's telephone number, including area code) 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, Without Par ValueKLICThe Nasdaq Global Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐





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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No ☒ 
As of April 26, 2024, there were 55,463,682 shares of the Registrant’s Common Stock, no par value, outstanding.


KULICKE AND SOFFA INDUSTRIES, INC.
FORM 10 – Q
March 30, 2024
 Index
  Page Number
   
PART I - FINANCIAL INFORMATION
   
Item 1.FINANCIAL STATEMENTS (Unaudited) 
   
 
Consolidated Condensed Balance Sheets as of March 30, 2024 and September 30, 2023
   
 
Consolidated Condensed Statements of Operations for the three and six months ended March 30, 2024 and April 1, 2023
   
Consolidated Condensed Statements of Comprehensive Income for the three and six months ended March 30, 2024 and April 1, 2023
Consolidated Condensed Statements of Changes in Shareholders’ Equity for the three and six months ended March 30, 2024 and April 1, 2023
 
Consolidated Condensed Statements of Cash Flows for the six months ended March 30, 2024 and April 1, 2023
   
 Notes to Consolidated Condensed Financial Statements
   
Item 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   
Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   
Item 4.CONTROLS AND PROCEDURES
   
PART II - OTHER INFORMATION
   
Item 1.LEGAL PROCEEDINGS
Item 1A.RISK FACTORS
   
Item 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Item 3.DEFAULTS UPON SENIOR SECURITIES
Item 4.MINE SAFETY DISCLOSURES
Item 5.OTHER INFORMATION
Item 6.EXHIBITS
   
 SIGNATURES



PART I. - FINANCIAL INFORMATION
Item 1. – FINANCIAL STATEMENTS
KULICKE AND SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
(in thousands)
As of
March 30, 2024September 30, 2023
ASSETS
Current assets:
Cash and cash equivalents$359,748 $529,402 
Short-term investments275,000 230,000 
Accounts and other receivable, net of allowance for doubtful accounts of $49 and $49, respectively
194,819 158,601 
Inventories, net180,541 217,304 
Prepaid expenses and other current assets40,309 53,751 
     Total current assets1,050,417 1,189,058 
Property, plant and equipment, net65,003 110,051 
Operating right-of-use assets36,653 47,148 
Goodwill89,082 88,673 
Intangible assets, net27,139 29,357 
Deferred tax assets18,101 31,551 
Equity investments2,254 716 
Other assets10,058 3,223 
     TOTAL ASSETS$1,298,707 $1,499,777 
LIABILITIES AND SHAREHOLDERS’ EQUITY  
Current liabilities:  
Accounts payable51,487 49,302 
Operating lease liabilities7,021 6,574 
Income taxes payable17,102 22,670 
Accrued expenses and other current liabilities90,126 103,005 
     Total current liabilities165,736 181,551 
Deferred tax liabilities36,377 37,264 
Income taxes payable36,647 52,793 
Operating lease liabilities34,307 41,839 
Other liabilities13,463 11,769 
     TOTAL LIABILITIES$286,530 $325,216 
Commitments and contingent liabilities (Note 15)
Shareholders’ equity: 
Preferred stock, without par value: Authorized 5,000 shares; issued - none
$ $ 
Common stock, without par value: Authorized 200,000 shares; issued 85,364 and 85,364, respectively; outstanding 55,750 and 56,310 shares, respectively
584,626 577,727 
Treasury stock, at cost, 29,614 and 29,054 shares, respectively
(794,193)(737,214)
Retained earnings1,239,956 1,355,810 
Accumulated other comprehensive loss(18,212)(21,762)
     TOTAL SHAREHOLDERS’ EQUITY$1,012,177 $1,174,561 
     TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$1,298,707 $1,499,777 

The accompanying notes are an integral part of these consolidated condensed financial statements.
1

KULICKE AND SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
(in thousands, except per share data)
Three months endedSix months ended
 March 30, 2024April 1, 2023March 30, 2024April 1, 2023
Net revenue$172,074 $173,021 $343,263 $349,254 
Cost of sales155,603 88,929 246,896 176,456 
Gross profit16,471 84,092 96,367 172,798 
Selling, general and administrative39,450 35,464 80,843 77,840 
Research and development37,704 35,999 74,514 70,507 
Impairment charges44,472 — 44,472 — 
Operating expenses121,626 71,463 199,829 148,347 
(Loss) / Income from operations(105,155)12,629 (103,462)24,451 
Interest income8,848 8,000 18,747 14,559 
Interest expense(18)(32)(40)(66)
(Loss) / Income before income taxes(96,325)20,597 (84,755)38,944 
Provision for income taxes6,355 5,556 8,632 9,314 
Net (loss) / income$(102,680)$15,041 $(93,387)$29,630 
Net (loss) / income per share:
Basic$(1.83)$0.27 $(1.66)$0.52 
Diluted$(1.83)$0.26 $(1.66)$0.51 
Weighted average shares outstanding:    
Basic56,154 56,684 56,402 56,868 
Diluted56,154 57,577 56,402 57,739 

 The accompanying notes are an integral part of these consolidated condensed financial statements.
2

KULICKE AND SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
(in thousands)
Three months endedSix months ended
March 30, 2024April 1, 2023March 30, 2024April 1, 2023
Net (loss) / income$(102,680)$15,041 $(93,387)$29,630 
Other comprehensive (loss) / income:
Foreign currency translation adjustment(3,027)1,654 3,253 15,973 
Unrecognized actuarial gain / (loss) on pension plan, net of tax55 (9)(12)(56)
(2,972)1,645 3,241 15,917 
Derivatives designated as hedging instruments:
Unrealized (loss) / gain on derivative instruments, net of tax(1,189)737 66 3,830 
Reclassification adjustment for loss / (gain) on derivative instruments recognized, net of tax28 (578)243 (298)
Net (decrease) / increase from derivatives designated as hedging instruments, net of tax(1,161)159 309 3,532 
Total other comprehensive (loss) / income(4,133)1,804 3,550 19,449 
Comprehensive (loss) / income$(106,813)$16,845 $(89,837)$49,079 
The accompanying notes are an integral part of these consolidated condensed financial statements.











3

KULICKE AND SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)
(in thousands)
 Common StockTreasury StockRetained Earnings Accumulated Other Comprehensive (Loss)/IncomeShareholders' Equity
SharesAmount
Balances as of September 30, 202356,310 $577,727 $(737,214)$1,355,810 $(21,762)$1,174,561 
Issuance of stock for services rendered7 253 62 — — 315 
Repurchase of common stock(556)— (26,840)— — (26,840)
Issuance of shares for equity-based compensation734 (7,043)7,043 — —  
Equity-based compensation— 7,542 — — — 7,542 
Cash dividend declared— — — (11,303)— (11,303)
Components of comprehensive income:
Net income— — — 9,293 — 9,293 
Other comprehensive income— — — — 7,683 7,683 
Total comprehensive income— — — 9,293 7,683 16,976 
Balances as of December 30, 202356,495 $578,479 $(756,949)$1,353,800 $(14,079)$1,161,251 
Issuance of stock for services rendered6 258 57 — — 315 
Repurchase of common stock(755) (37,329)— — (37,329)
Issuance of shares for equity-based compensation4 (28)28 — —  
Equity-based compensation— 5,917 — — — 5,917 
Cash dividend declared— — — (11,164)— (11,164)
Components of comprehensive income:
Net loss— — — (102,680)— (102,680)
Other comprehensive loss— — — — (4,133)(4,133)
Total comprehensive loss— — — (102,680)(4,133)(106,813)
Balances as of March 30, 202455,750 $584,626 $(794,193)$1,239,956 $(18,212)$1,012,177 

4

 Common StockTreasury StockRetained Earnings Accumulated Other Comprehensive (Loss)/IncomeShareholders' Equity
SharesAmount
Balances as of October 1, 202257,128 $561,684 $(675,800)$1,341,666 $(32,900)$1,194,650 
Issuance of stock for services rendered6 180 57 — — 237 
Repurchase of common stock(1,054)— (45,382)— — (45,382)
Issuance of shares for equity-based compensation667 (6,412)6,412 — —  
Equity-based compensation— 6,284 — — — 6,284 
Cash dividend declared— — — (10,794)— (10,794)
Components of comprehensive income
Net income— — — 14,589 — 14,589 
Other comprehensive income— — — — 17,645 17,645 
Total comprehensive income— — — 14,589 17,645 32,234 
Balances as of December 31, 202256,747 $561,736 $(714,713)$1,345,461 $(15,255)$1,177,229 
Issuance of stock for services rendered5 184 53 — — 237 
Repurchase of common stock(102) (4,990)— — (4,990)
Issuance of shares for equity-based compensation3 (31)31 — —  
Equity-based compensation— 5,142 — — — 5,142 
Cash dividend declared— — — (10,766)— (10,766)
Components of comprehensive income:
Net income— — — 15,041 — 15,041 
Other comprehensive income— — — — 1,804 1,804 
Total comprehensive income— — — 15,041 1,804 16,845 
Balances as of April 1, 202356,653 $567,031 $(719,619)$1,349,736 $(13,451)$1,183,697 

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

5

KULICKE AND SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
(in thousands)
 Six months ended
 March 30, 2024April 1, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:  
Net (loss) / income$(93,387)$29,630 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization14,952 12,155 
Impairment charges44,472 — 
Equity-based compensation and employee benefits14,089 11,900 
Adjustment for inventory valuation65,681 1,694 
Deferred taxes12,563 (6,227)
Loss/(Gain) on disposal of property, plant and equipment43 (217)
Unrealized fair value changes on equity investment(423)— 
Unrealized foreign currency translation1,689 2,613 
Changes in operating assets and liabilities, net of assets and liabilities assumed in businesses combinations:  
Accounts and other receivable(36,491)141,637 
Inventories(28,644)(39,055)
Prepaid expenses and other current assets13,406 2,107 
Accounts payable, accrued expenses and other current liabilities(7,784)(41,286)
Income taxes payable(21,713)(30,655)
Other, net(5,932)2,640 
Net cash (used in)/provided by operating activities(27,479)86,936 
CASH FLOWS FROM INVESTING ACTIVITIES:  
Acquisition of business, net of cash acquired— (36,881)
Purchases of property, plant and equipment(10,997)(24,515)
Proceeds from sales of property, plant and equipment— 235 
Investment in private equity fund(1,115)(36)
Purchase of short-term investments(430,000)(270,000)
Maturity of short-term investments385,000 145,000 
Net cash used in investing activities(57,112)(186,197)
CASH FLOWS FROM FINANCING ACTIVITIES:  
Payment for finance lease(306)(326)
Repurchase of common stock/treasury stock(63,477)(52,048)
Common stock cash dividends paid(22,013)(20,537)
Net cash used in financing activities(85,796)(72,911)
Effect of exchange rate changes on cash and cash equivalents 733 5,737 
Changes in cash and cash equivalents(169,654)(166,435)
Cash and cash equivalents at beginning of period529,402 555,537 
Cash and cash equivalents at end of period$359,748 $389,102 
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:
Property, plant and equipment included in accounts payable and accrued expenses$ $8,269 
CASH PAID FOR:  
Interest$40 $66 
Income taxes, net of refunds$17,488 $41,930 
The accompanying notes are an integral part of these consolidated condensed financial statements.
6

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

NOTE 1. BASIS OF PRESENTATION
These consolidated condensed financial statements include the accounts of Kulicke and Soffa Industries, Inc. and its subsidiaries (“we,” “us,” “our,” or the “Company”), with appropriate elimination of intercompany balances and transactions.
The interim consolidated condensed financial statements are unaudited and, in management’s opinion, include all adjustments (consisting only of normal and recurring adjustments) necessary for a fair statement of results for these interim periods. The interim consolidated condensed financial statements do not include all of the information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023 (the “2023 Annual Report”) filed with the Securities and Exchange Commission on November 16, 2023, which includes the Consolidated Balance Sheets as of September 30, 2023 and October 1, 2022, and the related Consolidated Statements of Operations, Statements of Comprehensive Income, Changes in Shareholders’ Equity and Cash Flows for each of the years in the three-year period ended September 30, 2023. The results of operations for any interim period are not necessarily indicative of the results of operations for any other interim period or for a full year.
Fiscal Year    
Each of the Company’s first three fiscal quarters end on the Saturday that is 13 weeks after the end of the immediately preceding fiscal quarter. The fourth quarter of each fiscal year ends on the Saturday closest to September 30. Fiscal 2024 quarters end on December 30, 2023, March 30, 2024, June 29, 2024 and September 28, 2024. In fiscal years consisting of 53 weeks, the fourth quarter will consist of 14 weeks. Fiscal 2023 quarters ended on December 31, 2022, April 1, 2023, July 1, 2023 and September 30, 2023.
Nature of Business
The Company designs, develops, manufactures and sells capital equipment and tools as well as services, maintains, repairs and upgrades equipment, all used to assemble semiconductor devices. The Company’s operating results depend upon the capital and operating expenditures of integrated device manufacturers (“IDMs”), outsourced semiconductor assembly and test providers (“OSATs”), foundry service providers, and other electronics manufacturers and automotive electronics suppliers worldwide which, in turn, depend on the current and anticipated market demand for semiconductors and products utilizing semiconductors. The semiconductor industry is highly volatile and experiences downturns and slowdowns which can have a severe negative effect on the semiconductor industry’s demand for semiconductor capital equipment, including assembly equipment manufactured and sold by the Company and, to a lesser extent, tools, solutions and services, including those sold or provided by the Company. These downturns and slowdowns have in the past adversely affected the Company’s operating results. The Company believes such volatility will continue to characterize the industry and the Company’s operations in the future.
In connection with the cancellation of a project with one of its strategic customers (previously referred to as Project W), on March 11, 2024, the Company committed to a plan to cease operational activities and commence wind down activities concerning various aspects of Project W. The wind down activities are ongoing and are expected to be substantially completed by the end of fiscal year 2024. For additional information, see Note 16: Restructuring and Cancellation of Project in our Notes to the Consolidated Condensed Financial Statements.

7

KULICKE AND SOFFA INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)
Use of Estimates
The preparation of consolidated condensed financial statements requires management to make assumptions, estimates and judgments that affect the reported amounts of assets and liabilities, net revenue and expenses during the reporting periods, and disclosures of contingent assets and liabilities as of the date of the consolidated condensed financial statements. On an ongoing basis, management evaluates estimates, including but not limited to, those related to accounts receivable, reserves for excess and obsolete inventory and inventory valuation, carrying value and lives of fixed assets, goodwill and intangible assets, accrual for customer credit programs, the valuation estimates and assessment of impairment and observable price adjustments, income taxes, equity-based compensation expense, accrual for employee termination benefits and warranties. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable. As a result, management makes judgments regarding the carrying values of the Company’s assets and liabilities that are not readily apparent from other sources. Authoritative pronouncements, historical experience and assumptions are used as the basis for making estimates, and on an ongoing basis, management evaluates these estimates. Actual results may differ from these estimates.
In light of macroeconomic headwinds, there has been uncertainty and disruption in the global economy and financial markets. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of March 30, 2024. While there was no material impact from macroeconomic headwinds to our consolidated condensed financial statements as of and for the quarter ended March 30, 2024, these estimates may change, as new events occur and additional information is obtained, including factors related to these headwinds, that could materially impact our consolidated condensed financial statements in future reporting periods.
Significant Accounting Policies
There have been no material changes to our significant accounting policies summarized in Note 1: Basis of Presentation to our Consolidated Financial Statements included in our 2023 Annual Report.
Revision of Segment-Related Disclosures within the Previously Issued Consolidated Financial Statements
During the third quarter of fiscal year 2023, in response to comment letters from the staff of the Securities and Exchange Commission (the "SEC"), the Company reconsidered the guidance under ASC 280, Segment Reporting, and determined that certain prior period conclusions about the Company’s operating and reportable segments were erroneous. As a result, the Company had incorrectly presented certain segment-related disclosures in the notes to our previously issued consolidated financial statements, included in our Annual Report on Form 10-K for the year ended October 1, 2022, originally filed with the SEC on November 17, 2022 (the "Original Form 10-K").
The Company has evaluated the materiality of the incorrect presentation of its segment-related disclosures in the notes to its consolidated financial statements and has concluded that it did not result in a material misstatement of the Company’s previously issued consolidated financial statements.
In light of the changes to the Company’s operating and reportable segments, the Company has revised, in this Quarterly Report on Form 10-Q, the segment-related disclosures in Note 14: Segment Information, to update the prior period presentation. The effect of this revision has been reflected in all footnotes impacted by this revision.
Recent Accounting Pronouncements
Disclosure Improvements
In October 2023, the Financial Accounting Standards Board (the "FASB") issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. This ASU aligns the requirements in the FASB Accounting Standards Codification with the SEC’s regulations. The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of a variety of Codification Topics. They will also allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC’s regulations. This ASU will become effective for each amendment on the date on which the SEC removes the related disclosure from its regulations. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.
8

KULICKE AND SOFFA INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)
Segment Reporting
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure, which aims to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments in the ASU enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the amendments is to enable investors to better understand an entity's overall performance and assess potential future cash flows. This ASU will be effective for the Company's fiscal year 2025, and interim periods within the fiscal years beginning after the Company’s fiscal year 2026. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.
Income Taxes
In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvement to Income Tax Disclosures. The amendments in this update are intended to enhance the transparency and decision usefulness of income tax disclosures primarily through changes to the rate reconciliation and income taxes paid information. This ASU will be effective for the Company's fiscal year 2026. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

9

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

NOTE 2. BALANCE SHEET COMPONENTS
The following tables reflect the components of significant balance sheet accounts as of March 30, 2024 and September 30, 2023:
 As of
(in thousands)March 30, 2024September 30, 2023
Inventories, net:  
Raw materials and supplies $117,797 $114,827 
Work in process 63,046 74,555 
Finished goods 54,804 49,207 
 235,647 238,589 
Inventory reserves(1)
(55,106)(21,285)
 $180,541 $217,304 
Property, plant and equipment, net:  
Land$2,182 $2,182 
Buildings and building improvements23,184 23,105 
Leasehold improvements 84,987 82,927 
Data processing equipment and software 39,709 37,483 
Machinery, equipment, furniture and fixtures100,336 95,692 
Construction in progress 11,072 11,099 
 261,470 252,488 
Accumulated depreciation (154,960)(142,437)
Accumulated impairment (1)
(41,507) 
 $65,003 $110,051 
Accrued expenses and other current liabilities:  
Accrued customer obligations (2)
$32,399 $35,701 
Wages and benefits(1)
24,420 33,096 
Dividends payable11,164 10,710 
Commissions and professional fees 4,398 4,091 
Accrued leasehold renovations 7,613 11,005 
Other10,132 8,402 
 $90,126 $103,005 
(1)Please see Note 16: Restructuring and Cancellation of Project for more information on the wind down charges and impairments related to the cancellation of Project W.
(2)Represents customer advance payments, customer credit program, accrued warranty expense and accrued retrofit obligations.
10

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

NOTE 3. GOODWILL AND INTANGIBLE ASSETS
Goodwill
Intangible assets classified as goodwill are not amortized. The goodwill established in connection with our acquisitions represents the estimated future economic benefits arising from the assets we acquired that did not qualify to be identified and recognized individually. The goodwill also includes the value of expected future cash flows from the acquisitions, expected synergies with our other affiliates and other unidentifiable intangible assets.
The Company performs an annual impairment test of its goodwill during the fourth quarter of each fiscal year, which coincides with the completion of its annual forecasting and refreshing of business outlook process.
The Company performed its annual impairment test in the fourth quarter of fiscal 2023 and concluded that no impairment charge was required. Any future adverse changes in expected operating results and/or unfavorable changes in other economic factors used to estimate fair values could result in a non-cash impairment in the future.
During the three months ended March 30, 2024, the Company reviewed qualitative factors to ascertain if a “triggering” event may have taken place that may have the effect of reducing the fair value of the reporting unit below its carrying value and concluded that no triggering event had occurred. While we have concluded that a triggering event did not occur during the quarter ended March 30, 2024, the persistent macroeconomic headwinds could impact the results of operations due to changes to assumptions utilized in the determination of the estimated fair values of the reporting units that could be significant enough to trigger an impairment. Net sales and earnings growth rates could be negatively impacted by reductions or changes in demand for our products. The discount rate utilized in our valuation model could also be impacted by changes in the underlying interest rates and risk premiums included in the determination of the cost of capital.
The following table summarizes the Company’s recorded goodwill, where applicable, by reportable segments and the “All Others” category (refer to Note 14 for further information) as of March 30, 2024 and September 30, 2023:
(in thousands)Wedge Bonding EquipmentAPSAll OthersTotal
Balance at September 30, 2023(1)
$18,280 $26,109 44,284 $88,673 
Other 61 348 $409 
Balance at March 30, 2024$18,280 $26,170 44,632 $89,082 
(1) Cumulative goodwill impairment pertaining to the “All Others” category as of September 30, 2023 was $45.0 million.

Intangible Assets
Intangible assets with determinable lives are amortized over their estimated useful lives. The Company’s intangible assets consist primarily of developed technology, customer relationships, in-process research and development, and trade and brand names.

11

KULICKE AND SOFFA INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)
The following table reflects net intangible assets as of March 30, 2024 and September 30, 2023: 
 
As of March 30, 2024
As of September 30, 2023
(dollar amounts in thousands)Average estimated
useful lives
(in years)
Gross Carrying AmountAccumulated AmortizationNet AmountGross Carrying AmountAccumulated AmortizationNet Amount
Developed technology
6.0 to 15.0
$81,889 $(58,512)$23,377 $80,959 $(55,877)$25,082 
Customer relationships
5.0 to 8.0
$37,091 $(35,250)$1,841 $36,764 $(34,789)$1,975 
Trade and brand name
7.0 to 8.0
$7,184 $(7,184)$ $7,130 $(7,130)$ 
Other intangible assets
1.0 to 8.0
$5,618 $(4,156)$1,462 $5,617 $(3,776)$1,841 
In-process research and developmentN.A$459 $ $459 $459 $ $459 
$132,241 $(105,102)$27,139 $130,929 $(101,572)$29,357 

The following table reflects estimated annual amortization expense related to intangible assets as of March 30, 2024:
 As of
(in thousands)March 30, 2024
Remaining fiscal 2024$2,535 
Fiscal 20255,069 
Fiscal 20265,069 
Fiscal 20274,794 
Fiscal 20284,362 
Thereafter5,310 
Total amortization expense$27,139 

12

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

NOTE 4. CASH, CASH EQUIVALENTS, AND SHORT-TERM INVESTMENTS
Cash equivalents consist of instruments with remaining maturities of three months or less at the date of purchase. In general, these investments are free of trading restrictions.
Cash, cash equivalents, and short-term investments consisted of the following as of March 30, 2024:
(in thousands)Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Estimated
Fair Value
Current assets:
Cash$36,654 $ $ $36,654 
Cash equivalents:
Money market funds (1)
223,107  (13)223,094 
Time deposits (2)
100,000   100,000 
Total cash and cash equivalents$359,761 $ $(13)$359,748 
Short-term investments:
Time deposits (2)
275,000   275,000 
Total short-term investments$275,000 $ $ $275,000 
Total cash, cash equivalents and short-term investments$634,761 $ $(13)$634,748 
(1)The fair value was determined using unadjusted prices in active, accessible markets for identical assets, and as such they were classified as Level 1 assets in the fair value hierarchy.
(2)All short-term investments were classified as available-for-sale and the fair value approximates cost basis. The Company did not recognize any realized gains or losses on the sale of investments during the three and six months ended March 30, 2024.
Cash, cash equivalents and short-term investments consisted of the following as of September 30, 2023:
(in thousands)Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Estimated
Fair Value
Current assets:
Cash$37,292 $ $ $37,292 
Cash equivalents:
Money market funds (1)
202,113  (10)202,103 
Time deposits (2)
290,007   290,007 
Total cash and cash equivalents$529,412 $ $(10)$529,402 
Short-term investments:
Time deposits (2)
230,000   230,000 
Total short-term investments$230,000 $ $ $230,000 
Total cash, cash equivalents and short-term investments$759,412 $ $(10)$759,402 
(1)The fair value was determined using unadjusted prices in active, accessible markets for identical assets, and as such they were classified as Level 1 assets in the fair value hierarchy.
(2)All short-term investments were classified as available-for-sale and the fair value approximates cost basis. The Company did not recognize any realized gains or losses on the sale of investments during the three and six months ended April 1, 2023.
13

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

NOTE 5. EQUITY INVESTMENTS
Equity investments consisted of the following as of March 30, 2024 and September 30, 2023:
 As of
(in thousands)March 30, 2024September 30, 2023
Non-marketable equity securities$2,254 $716 
Net Asset Value (“NAV”) (Private Equity Fund): Equity investments in affiliated investment funds are valued based on the NAV reported by the investment fund in accordance with ASC Topic 820-10. Investments held by the affiliated investment fund include a diversified portfolio of investments in the global semiconductor industry. The Company receives distributions through the liquidation of the underlying investments by the affiliated investment fund. However, the period of time over which the underlying investments are expected to be liquidated is unknown. Additionally, the Company’s ability to withdraw from the fund is subject to restrictions. The term of the fund will continue until March 18, 2032 unless dissolved earlier or extended by the General Partner. In accordance with ASC Topic 820-10, this investment is measured at fair value using the NAV per share (or its equivalent) practical expedient has not been classified in the fair value hierarchy. As of March 30, 2024, the Company has funded $2.2 million into the affiliated investment fund and recognized a cumulative unrealized fair value gain of $0.1 million. The Company has recorded the amount of funded capital that has been called as an equity investment.


NOTE 6. FAIR VALUE MEASUREMENTS
Accounting standards establish three levels of inputs that may be used to measure fair value: quoted prices in active markets for identical assets or liabilities (referred to as Level 1), inputs other than Level 1 that are observable for the asset or liability either directly or indirectly (referred to as Level 2) and unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities (referred to as Level 3).
Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis 
We measure certain financial assets and liabilities at fair value on a recurring basis. There were no transfers between fair value measurement levels during the three and six months ended March 30, 2024.
Fair Value Measurements on a Nonrecurring Basis
Our non-financial assets such as intangible assets and property, plant and equipment are carried at cost unless impairment is deemed to have occurred.
Fair Value of Financial Instruments
Amounts reported as accounts receivables, prepaid expenses and other current assets, accounts payable and accrued expenses approximate fair value.

NOTE 7. DERIVATIVE FINANCIAL INSTRUMENTS
The Company’s international operations are exposed to changes in foreign exchange rates due to transactions denominated in currencies other than U.S. dollars. Most of the Company’s revenue and cost of materials are transacted in U.S. dollars. However, a significant amount of the Company’s operating expenses is denominated in local currencies, primarily in Singapore.
The foreign currency exposure of our operating expenses is generally hedged with foreign exchange forward contracts. The Company’s foreign exchange risk management programs include using foreign exchange forward contracts with cash flow hedge accounting designation to hedge exposures to the variability in the U.S. dollar equivalent of forecasted non-U.S. dollar-denominated operating expenses. These instruments generally mature within twelve months. For these derivatives, we report the after-tax gain or loss from the effective portion of the
14

KULICKE AND SOFFA INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)
hedge as a component of accumulated other comprehensive income (loss), and we reclassify it into earnings in the same period or periods in which the hedged transaction affects earnings and in the same line item on the Consolidated Condensed Statements of Operations as the impact of the hedged transaction.
The fair value of derivative instruments on our Consolidated Condensed Balance Sheets as of March 30, 2024 and September 30, 2023 were as follows:
As of
March 30, 2024September 30, 2023
(in thousands)Notional Amount
Fair Value Liability
Derivatives(1)
Notional Amount
Fair Value Liability Derivatives(1)
Derivatives designated as hedging instruments:
Foreign exchange forward contracts (2)
$49,625 $(414)$54,590 $(723)
Total derivatives$49,625 $(414)$54,590 $(723)
(1)The fair value of derivative liabilities is measured using level 2 fair value inputs and is included in accrued expenses and other current liabilities on our Consolidated Condensed Balance Sheets.
(2)Hedged amounts expected to be recognized to income within the next twelve months.

The effects of derivative instruments designated as cash flow hedges in our Consolidated Condensed Statements of Comprehensive Income for the three and six months ended March 30, 2024 and April 1, 2023 were as follows:
Three months endedSix months ended
(in thousands)March 30, 2024April 1, 2023March 30, 2024April 1, 2023
Foreign exchange forward contract in cash flow hedging relationships:
Net (loss) / gain recognized in OCI, net of tax(1)
$(1,189)$737 $66 $3,830 
Net (loss) / gain reclassified from accumulated OCI into income, net of tax(2)
$(28)$578 $(243)$298 
(1)Net change in the fair value of the effective portion classified in OCI.
(2)Effective portion classified as selling, general and administrative expense.

NOTE 8. LEASES
We have entered into various non-cancellable operating and finance lease agreements for certain of our offices, manufacturing, technology, sales support and service centers, equipment, and vehicles. We determine if an arrangement is a lease, or contains a lease, at inception and record the leases in our financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor. Our lease terms may include one or more options to extend the lease terms, for periods from one year to 20 years, when it is reasonably certain that we will exercise that option. As of March 30, 2024, there were no options to extend the lease which was recognized as a right-of-use (“ROU”) asset, or a lease liability. We have lease agreements with lease and non-lease components, and non-lease components are accounted for separately and not included in our leased assets and corresponding liabilities. We have elected not to present short-term leases on the Consolidated Condensed Balance Sheets as these leases have a lease term of 12 months or less at lease inception.
Operating leases are included in operating ROU assets, current operating lease liabilities and non-current operating lease liabilities, and finance leases are included in property, plant and equipment, accrued expenses and other current liabilities, and other liabilities on the Consolidated Condensed Balance Sheets. As of March 30, 2024 and September 30, 2023, our finance leases are not material.
15

KULICKE AND SOFFA INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)
The following table shows the components of lease expense:
 Three months endedSix months ended
(in thousands)March 30, 2024April 1, 2023March 30, 2024April 1, 2023
Operating lease expense (1)
$2,558 $2,683 $5,415 $5,273 
(1)Operating lease expense includes short-term lease expense, which is immaterial for the three and six months ended March 30, 2024 and April 1, 2023.
The following table shows the cash flows arising from lease transactions. Cash payments related to short-term leases are not included in the measurement of operating lease liabilities, and, as such, are excluded from the amounts below:
 Six months ended
(in thousands)March 30, 2024April 1, 2023
Cash paid for amounts included in the measurement of lease liabilities:
 Operating cash outflows from operating leases$4,705 $4,673 

16

KULICKE AND SOFFA INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)
The following table shows the weighted-average lease terms and discount rates for operating leases:
 As of
March 30, 2024September 30, 2023
Operating leases:
Weighted-average remaining lease term (in years):
7.67.7
Weighted-average discount rate:7.2 %6.7 %
Future lease payments, excluding short-term leases, as of March 30, 2024, are detailed as follows:
As of
(in thousands)March 30, 2024
Remaining fiscal 2024$4,849 
Fiscal 20259,453 
Fiscal 20267,037 
Fiscal 20275,041 
Fiscal 20284,780 
Thereafter22,606 
Total minimum lease payments$53,766 
Less: Interest$12,438 
Present value of lease obligations$41,328 
Less: Current portion$7,021 
Long-term portion of lease obligations$34,307 

NOTE 9. DEBT AND OTHER OBLIGATIONS
Bank Guarantees
On November 22, 2013, the Company obtained a $5.0 million credit facility with Citibank in connection with the issuance of bank guarantees for operational purposes. As of March 30, 2024, the outstanding amount under this facility was $4.9 million.
Credit Facilities
On February 15, 2019, the Company entered into a Facility Letter and Overdraft Agreement (collectively, the “Facility Agreements”) with MUFG Bank, Ltd., Singapore Branch (the “Bank”). The Facility Agreements provide the Company and one of its subsidiaries with an overdraft facility of up to $150.0 million (the “Overdraft Facility”) for general corporate purposes. Amounts outstanding under the Overdraft Facility, including interest, are payable upon thirty days written demand by the Bank. Interest on the Overdraft Facility is calculated on a daily basis, and the applicable interest rate is calculated at the Secured Overnight Financing Rate (“SOFR”) plus a margin of 1.5% per annum. The Overdraft Facility is an unsecured facility per the terms of the Facility Agreements. The Facility Agreements contain customary non-financial covenants, including, without limitation, covenants that restrict the Company’s ability to sell or dispose of its assets, cease owning at least 51% of two of its subsidiaries (the “Subsidiaries”), or encumber its assets with material security interests (including any pledge of monies in the Subsidiaries' cash deposit account with the Bank). The Facility Agreements also contain typical events of default, including, without limitation, non-payment of financial obligations when due, cross defaults to other material indebtedness of the Company and any breach of a representation or warranty under the Facility Agreements. As of March 30, 2024, there were no outstanding amounts under the Overdraft Facility.


17

KULICKE AND SOFFA INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)
NOTE 10. SHAREHOLDERS’ EQUITY AND EMPLOYEE BENEFIT PLANS
Share Repurchase Program
On August 15, 2017, the Company’s Board of Directors authorized a program (the “Program”) to repurchase up to $100 million of the Company’s common stock on or before August 1, 2020. In 2018, 2019 and 2020, the Board of Directors increased the share repurchase authorization under the Program to $200 million, $300 million, and $400 million, respectively. On March 3, 2022, the Board of Directors further increased the share repurchase authorization under the Program by an additional $400 million to $800 million, and extended its duration through August 1, 2025. On November 17, 2023, the Company modified its written trading plan under Rule 10b5-1 of the Exchange Act, such plan as first entered into on May 7, 2022, to facilitate repurchases under the Program. The modified plan permits the purchase of up to approximately $169 million of the Company’s common stock from November 20, 2023 through August 1, 2025. The Program may be suspended or discontinued at any time and is funded using the Company’s available cash, cash equivalents and short-term investments. Under the Program, shares may be repurchased through open market and/or privately negotiated transactions at prices deemed appropriate by management. The timing and amount of repurchase transactions under the Program depend on market conditions as well as corporate and regulatory considerations.
During the three and six months ended March 30, 2024, the Company repurchased a total of approximately 754.6 thousand and 1,310.2 thousand shares of common stock under the Program at a cost of approximately $37.3 million and $64.1 million, respectively. The stock repurchases were recorded in the periods the repurchased shares were delivered and accounted for as treasury stock in the Company’s Consolidated Condensed Balance Sheets. The Company records treasury stock purchases under the cost method using the first-in, first-out (FIFO) method. Upon re-issuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid-in capital.
If the Company reissues treasury stock at an amount below its acquisition cost and additional paid-in capital associated with prior treasury stock transactions is insufficient to cover the difference between acquisition cost and the reissue price, this difference is recorded against retained earnings.
As of March 30, 2024, our remaining stock repurchase authorization under the Program was approximately $116.9 million.
Dividends
On November 15, 2023, the Board of Directors declared a quarterly dividend of $0.20 per share of common stock. Dividends paid during the three and six months ended March 30, 2024 totaled $11.3 million and $22.0 million, respectively. The declaration of any future cash dividend is at the discretion of the Board of Directors and will depend on the Company’s financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination that such dividends are in the best interests of the Company’s shareholders.
Accumulated Other Comprehensive Loss
The following table reflects accumulated other comprehensive loss reflected on the Consolidated Condensed Balance Sheets as of March 30, 2024 and September 30, 2023: 
 As of
(in thousands)March 30, 2024September 30, 2023
Loss from foreign currency translation adjustments$(16,925)$(20,178)
Unrecognized actuarial loss on pension plan, net of tax(873)(861)
Unrealized loss on hedging(414)(723)
Accumulated other comprehensive loss$(18,212)$(21,762)

18

KULICKE AND SOFFA INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)
Equity-Based Compensation
The Company has a stockholder-approved equity-based compensation plan, the 2021 Omnibus Incentive Plan (the “Plan”) from which employees and directors receive grants. As of March 30, 2024, 1.8 million shares of common stock are available for grant to the Company’s employees and directors under the Plan.
Relative Total Shareholder Return Performance Share Units (“Relative TSR PSUs”) entitle the employee to receive common stock of the Company on the award vesting date, typically the third anniversary of the grant date (or as soon as administratively practicable if later), if market performance objectives which measure the relative TSR are attained. Relative TSR is calculated based upon the 90-calendar day average price at the end of the performance period of the Company’s stock as compared to specific peer companies that comprise the GICS (45301020) Semiconductor Index. TSR is measured for the Company and each peer company over a performance period, which is generally three years. Vesting percentages range from 0% to 200% of awards granted. The provisions of the Relative TSR PSUs are reflected in the grant date fair value of the award; therefore, compensation expense is recognized regardless of whether the market condition is ultimately satisfied. Compensation expense is reversed if the award is forfeited prior to the vesting date.
Revenue Growth Performance Share Units (“Growth PSUs”) entitle the employee to receive common stock of the Company on the award vesting date, typically the third anniversary of the grant date (or as soon as administratively practicable if later), based on organic revenue growth objectives and relative growth performance against named competitors as set by the Management Development and Compensation Committee (“MDCC”) of the Company’s Board of Directors. Organic revenue growth is calculated by averaging revenue growth (net of revenues from acquisitions) over a performance period, which is generally three years. Revenues from acquisitions will be included in the calculation after four fiscal quarters after acquisition. Any portion of the grant that does not meet the revenue growth objectives and relative growth performance is forfeited. Vesting percentages range from 0% to 200% of awards granted.
In general, Time-based Restricted Share Units (“Time-based RSUs”) awarded to employees vest ratably over a three-year period on the anniversary of the grant date provided the employee remains employed by the Company.
Equity-based compensation expense recognized in the Consolidated Condensed Statements of Operations for the three and six months ended March 30, 2024 and April 1, 2023 was based upon awards ultimately expected to vest, with forfeiture accounted for when they occur.
The following table reflects Time-based RSUs, Relative TSR PSUs, Growth PSUs and common stock granted during the three and six months ended March 30, 2024 and April 1, 2023:
 Three months endedSix months ended
(shares in thousands)March 30, 2024April 1, 2023March 30, 2024April 1, 2023
Time-based RSUs3 4 502 512 
Relative TSR PSUs  231 186 
Growth PSUs  49 92 
Common stock6 6 13 12 
Equity-based compensation in shares9 10 795 802 

19

KULICKE AND SOFFA INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)
The following table reflects total equity-based compensation expense, which includes Time-based RSUs, Relative TSR PSUs, Growth PSUs and common stock, included in the Consolidated Condensed Statements of Operations during the three and six months ended March 30, 2024 and April 1, 2023: 
 Three months endedSix months ended
(in thousands)March 30, 2024April 1, 2023March 30, 2024April 1, 2023
Cost of sales$363 $323 $722 $631 
Selling, general and administrative 4,103 3,731 9,783 8,598 
Research and development1,766 1,325 3,584 2,671 
Total equity-based compensation expense$6,232 $5,379 $14,089 $11,900 
The following table reflects equity-based compensation expense, by type of award, for the three and six months ended March 30, 2024 and April 1, 2023:  
 Three months endedSix months ended
(in thousands)March 30, 2024April 1, 2023March 30, 2024April 1, 2023
Time-based RSUs$4,470 $3,611 $9,013 $7,198 
Relative TSR PSUs1,273 1,193 2,833 2,445 
Growth PSUs174 338 1,613 1,783 
Common stock315 237 630 474 
Total equity-based compensation expense $6,232 $5,379 $14,089 $11,900 

NOTE 11. REVENUE AND CONTRACT BALANCES
The Company recognizes revenue when we satisfy performance obligations as evidenced by the transfer of control of our products or services to customers. In general, the Company generates revenue from product sales, either directly to customers or to distributors. In determining whether a contract exists, we evaluate the terms of the agreement, the relationship with the customer or distributor and their ability to pay. Service revenue is generally recognized over time as the services are performed. For the three and six months ended March 30, 2024 and April 1, 2023, the service revenue was not material.
The Company reports revenue based on its reportable segments and end markets, which provides information about how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Please refer to Note 14: Segment Information, for disclosure of revenue by segment and end markets.
Contract Balances
Our contract assets relate to our rights to consideration for revenue with collection dependent on events other than the passage of time, such as the achievement of specified payment milestones. The contract assets will be transferred to net account receivables as our right to consideration for these contract assets become unconditional. Contracts assets are reported in the accompanying Consolidated Condensed Balance Sheets within prepaid expenses and other current assets.
Our contract liabilities are primarily related to payments received in advance of satisfying performance obligations, and are reported in the accompanying Consolidated Condensed Balance Sheets within accrued expenses and other current liabilities.
Contract liabilities increase as a result of receiving new advance payments from customers and decrease as revenue is recognized from product sales under advance payment arrangements upon satisfying the performance obligations.

20

KULICKE AND SOFFA INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)
The following table shows the changes in contract asset balances during the three and six months ended March 30, 2024 and April 1, 2023:
Three months endedSix months ended
(in thousands)March 30, 2024April 1, 2023March 30, 2024April 1, 2023
Contract assets, beginning of period$ $28,987 $10,181 $26,317 
Additions 223  2,893 
Transferred to accounts receivable or collected  (10,181) 
Contract assets, end of period$ $29,210 $ $29,210 
The following table shows the changes in contract liability balances during the three and six months ended March 30, 2024 and April 1, 2023:
Three months endedSix months ended
(in thousands)March 30, 2024April 1, 2023March 30, 2024April 1, 2023
Contract liabilities, beginning of period$8,579 $7,781 $4,797 $3,160 
Revenue recognized(11,229)(9,276)(19,772)(16,546)
Additions9,316 8,051 21,641 19,942 
Contract liabilities, end of period$6,666 $6,556 $6,666 $6,556 
21

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

NOTE 12. (LOSS) EARNINGS PER SHARE
Basic (loss)/income per share is calculated using the weighted average number of shares of common stock outstanding during the period. Restricted stock are included in the calculation of diluted earnings per share, except when their effect would be anti-dilutive. For the three and six months ended March 30, 2024, restricted stock were excluded due to the net loss the Company incurred during those periods.
The following table reflects a reconciliation of the shares used in the basic and diluted net income per share computation for the three and six months ended March 30, 2024 and April 1, 2023:
 Three months ended
(in thousands, except per share data)March 30, 2024April 1, 2023
 BasicDilutedBasicDiluted
NUMERATOR:    
Net (loss)/income$(102,680)$(102,680)$15,041 $15,041 
DENOMINATOR:    
Weighted average shares outstanding - Basic56,154 56,154 56,684 56,684 
Dilutive effect of Equity Plans 893 
Weighted average shares outstanding - Diluted  56,154  57,577 
EPS:    
Net (loss)/income per share - Basic$(1.83)$(1.83)$0.27 $0.27 
Effect of dilutive shares   (0.01)
Net (loss)/income per share - Diluted $(1.83) $0.26 
Anti-dilutive shares(1)
4160
 Six months ended
(in thousands, except per share data)March 30, 2024April 1, 2023
 BasicDilutedBasicDiluted
NUMERATOR:    
Net (loss)/income$(93,387)$(93,387)$29,630 $29,630 
DENOMINATOR:    
Weighted average shares outstanding - Basic56,402 56,402 56,868 56,868 
Dilutive effect of Equity Plans  871 
Weighted average shares outstanding - Diluted  56,402  57,739 
EPS:    
Net (loss)/income per share - Basic$(1.66)$(1.66)$0.52 $0.52 
Effect of dilutive shares   (0.01)
Net (loss)/income per share - Diluted $(1.66) $0.51 
Anti-dilutive shares(1)
4121
(1) Represents the Time-based RSUs, Relative TSR PSUs and Growth PSUs that are excluded from the calculation of diluted earnings per share for the three and six months ended March 30, 2024 and April 1, 2023 as the effect would have been anti-dilutive.



22

KULICKE AND SOFFA INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)
NOTE 13. INCOME TAXES
The following table reflects the provision for income taxes and the effective tax rate for the three and six months ended March 30, 2024 and April 1, 2023: 
 Three months endedSix months ended
(dollar amounts in thousands)March 30, 2024April 1, 2023March 30, 2024April 1, 2023
Provision for income taxes$6,355 $5,556 $8,632 $9,314 
Effective tax rate(6.6)%27.0 %(10.2)%23.9 %
For the three and six months ended March 30, 2024 as compared to the three and six months ended April 1, 2023, the change in provision for income taxes was primarily due to an increase in valuation allowance recorded against certain deferred tax assets during the quarter, offset by the decrease in provision for income taxes resulting from lower profitability. The decrease in effective tax rate was primarily due to the tax benefit from the one-time charge for cancellation of Project W which was recorded as a discrete during the quarter, partially offset by an increase in valuation allowance recorded against certain deferred tax assets which was also recorded as a discrete during the quarter.
For the three and six months ended March 30, 2024, the effective tax rate is lower than the U.S. federal statutory tax rate primarily due to the two discrete tax items discussed above, foreign income earned in lower tax jurisdictions, tax incentives, and tax credits.

NOTE 14. SEGMENT INFORMATION
Reportable segments are defined as components of an enterprise that engage in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker (the “CODM”) in deciding how to allocate resources and assess performance. The Company’s Chief Executive Officer is the CODM. The CODM does not review discrete asset information.
As discussed in Note 1, during the third quarter of fiscal year 2023, the Company reconsidered the guidance under ASC 280, Segment Reporting, and determined that certain prior period conclusions about the Company’s operating and reportable segments were erroneous. As a result, the Company had incorrectly presented certain segment-related disclosures in the notes to our previously issued consolidated financial statements, included in our Original Form 10-K.
The Company has revised the prior period presentation to reflect its four reportable segments as follows: (1) Ball Bonding Equipment, (2) Wedge Bonding Equipment, (3) Advanced Solutions, and (4) Aftermarket Products and Services (“APS”). The four reportable segments are disclosed below:
Ball Bonding Equipment: Reflects the results of the Company from the design, development, manufacture and sale of ball bonding equipment and wafer level bonding equipment.
Wedge Bonding Equipment: Reflects the results of the Company from the design, development, manufacture and sale of wedge bonding equipment.
Advanced Solutions: Reflects the results of the Company from the design, development, manufacture and sale of certain advanced display, die-attach and thermocompression systems and solutions.
APS: Reflects the results of the Company from the design, development, manufacture and sale of a variety of tools, spares and services for our equipment.
Any other operating segments that have not been aggregated within the reportable segments described above which do not meet the quantitative threshold to be disclosed as a separate reportable segment have been grouped within an “All Others” category. This group is reflective of the results of the Company from the design, development, manufacture and sale of certain advanced display, advanced dispense, electronics assembly, die-attach and lithography systems and solutions. Results for the “All Others” category and other corporate expenses are included as a reconciling item between the Company’s reportable segments and its consolidated results of operations.

23

KULICKE AND SOFFA INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited (continued)
The following table reflects operating information by segment for the three and six months ended March 30, 2024 and April 1, 2023: 
 Three months endedSix months ended
(in thousands)March 30, 2024April 1, 2023March 30, 2024April 1, 2023
Net revenue:    
Ball Bonding Equipment$81,908 $53,535 $168,178 $107,184 
Wedge Bonding Equipment22,761 48,586 46,220 103,242 
Advanced Solutions14,124 20,432 25,448 35,139 
APS40,667 39,294 81,908 80,155 
All Others12,614 11,174 21,509 23,534 
              Net revenue172,074 173,021 343,263 349,254