# EDGAR Filing Document

**Accession Number:** 0000056978
**File Stem:** 0000056978-25-000071
**Filing Date:** 2025-8
**Character Count:** 182423
**Document Hash:** 1d43fe9181d531cc7892e65a4ac33cdd
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000056978-25-000071.hdr.sgml**: 20250806

**ACCESSION NUMBER**: 0000056978-25-000071

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 90

**CONFORMED PERIOD OF REPORT**: 20250628

**FILED AS OF DATE**: 20250806

**DATE AS OF CHANGE**: 20250806

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** KULICKE & SOFFA INDUSTRIES INC
- **CENTRAL INDEX KEY:** 0000056978
- **STANDARD INDUSTRIAL CLASSIFICATION:** SEMICONDUCTORS & RELATED DEVICES [3674]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 231498399
- **STATE OF INCORPORATION:** PA
- **FISCAL YEAR END:** 1004

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-00121
- **FILM NUMBER:** 251190583

**BUSINESS ADDRESS:**
- **STREET 1:** 23A SERANGOON NORTH AVENUE 5, #01-01
- **CITY:** SINGAPORE
- **STATE:** U0
- **ZIP:** 554369
- **BUSINESS PHONE:** 2157846000

**MAIL ADDRESS:**
- **STREET 1:** 23A SERANGOON NORTH AVENUE 5, #01-01
- **CITY:** SINGAPORE
- **STATE:** U0
- **ZIP:** 554369

?xml version='1.0' encoding='ASCII'? klic-20250628

**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 June 28, 2025

OR

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the transition period from <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u> to <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>.

*Commission File No.: 000-00121* 

**<u>KULICKE AND SOFFA INDUSTRIES, INC.</u>**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **<u>Pennsylvania</u>** | **<u>23-1498399</u>** |
| (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)

**<u>(215) 784-6000</u>**

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered <br> <u>Common Stock, Without Par Value</u> <u>KLIC</u> <u>The Nasdaq Global Market</u>

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 August 1, 2025, there were 52,145,526 shares of the Registrant's Common Stock, no par value, outstanding.

------

<u>[**Table of Contents**](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

**KULICKE AND SOFFA INDUSTRIES, INC.**

**FORM 10 – Q**

**June 28, 2025** 

 **Index**

---

| | | |
|:---|:---|:---|
| | | **<u>Page Number</u>** |
| **PART I - FINANCIAL INFORMATION** | **PART I - FINANCIAL INFORMATION** | **PART I - FINANCIAL INFORMATION** |
| **<u>[Item 1.](#i187efbb5d82945e694cc3c3b11a8257e_34)</u>** | **FINANCIAL STATEMENTS (Unaudited)** | |
|  | Consolidated Condensed Balance Sheets as of June 28, 2025 and September 28, 2024 | <u>[1](#i187efbb5d82945e694cc3c3b11a8257e_46)</u> |
|  | Consolidated Condensed Statements of Operations for the three and nine months ended June 28, 2025 and June 29, 2024 | <u>[2](#i187efbb5d82945e694cc3c3b11a8257e_49)</u> |
|  | Consolidated Condensed Statements of Comprehensive Income for the three and nine months ended June 28, 2025 and June 29, 2024 | <u>[3](#i187efbb5d82945e694cc3c3b11a8257e_52)</u> |
|  | Consolidated Condensed Statements of Changes in Shareholders' Equity for the three and nine months ended June 28, 2025 and June 29, 2024 | <u>[4](#i187efbb5d82945e694cc3c3b11a8257e_55)</u> |
|  | Consolidated Condensed Statements of Cash Flows for the nine months ended June 28, 2025 and June 29, 2024 | <u>[6](#i187efbb5d82945e694cc3c3b11a8257e_61)</u> |
|  | Notes to Consolidated Condensed Financial Statements | <u>[7](#i187efbb5d82945e694cc3c3b11a8257e_64)</u> |
| **<u>[Item 2.](#i187efbb5d82945e694cc3c3b11a8257e_178)</u>** | **MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS** | <u>[30](#i187efbb5d82945e694cc3c3b11a8257e_178)</u> |
| **<u>[Item 3.](#i187efbb5d82945e694cc3c3b11a8257e_253)</u>** | **QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK** | <u>[44](#i187efbb5d82945e694cc3c3b11a8257e_253)</u> |
| **<u>[Item 4.](#i187efbb5d82945e694cc3c3b11a8257e_259)</u>** | **CONTROLS AND PROCEDURES** | <u>[45](#i187efbb5d82945e694cc3c3b11a8257e_259)</u> |
| **PART II - OTHER INFORMATION** | **PART II - OTHER INFORMATION** | **PART II - OTHER INFORMATION** |
| **<u>[Item 1.](#i187efbb5d82945e694cc3c3b11a8257e_313)</u>** | **LEGAL PROCEEDINGS** | <u>[46](#i187efbb5d82945e694cc3c3b11a8257e_313)</u> |
| **<u>[Item 1A.](#i187efbb5d82945e694cc3c3b11a8257e_316)</u>** | **RISK FACTORS** | <u>[46](#i187efbb5d82945e694cc3c3b11a8257e_316)</u> |
| **<u>[Item 2.](#i187efbb5d82945e694cc3c3b11a8257e_319)</u>** | **UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS** | <u>[48](#i187efbb5d82945e694cc3c3b11a8257e_319)</u> |
| **<u>[Item 3.](#i187efbb5d82945e694cc3c3b11a8257e_322)</u>** | **DEFAULTS UPON SENIOR SECURITIES** | <u>[49](#i187efbb5d82945e694cc3c3b11a8257e_322)</u> |
| **<u>[Item 4.](#i187efbb5d82945e694cc3c3b11a8257e_325)</u>** | **MINE SAFETY DISCLOSURES** | <u>[49](#i187efbb5d82945e694cc3c3b11a8257e_325)</u> |
| **<u>[Item 5.](#i187efbb5d82945e694cc3c3b11a8257e_328)</u>** | **OTHER INFORMATION** | <u>[49](#i187efbb5d82945e694cc3c3b11a8257e_328)</u> |
| **<u>[Item 6.](#i187efbb5d82945e694cc3c3b11a8257e_334)</u>** | **EXHIBITS** | <u>[50](#i187efbb5d82945e694cc3c3b11a8257e_334)</u> |
|  | **SIGNATURES** | <u>[51](#i187efbb5d82945e694cc3c3b11a8257e_337)</u> |

---

------

<u>[**Table of Contents**](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

**PART I. - FINANCIAL INFORMATION**

**Item 1. – FINANCIAL STATEMENTS**

**KULICKE AND SOFFA INDUSTRIES, INC.**

 **CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)**

*(in thousands)*

---

| | | |
|:---|:---|:---|
| | As of | As of |
| | June 28, 2025 | September 28, 2024 |
| **ASSETS** | **ASSETS** | **ASSETS** |
| **CURRENT ASSETS** |  |  |
| Cash and cash equivalents | $246481 | $227147 |
| Short-term investments | 310000 | 350000 |
| Accounts and other receivable, net of allowance for doubtful accounts of $49 and $49, respectively | 173839 | 193909 |
| Inventories, net | 158330 | 177736 |
| Prepaid expenses and other current assets | 41551 | 46161 |
| &nbsp;&nbsp;&nbsp;&nbsp;**TOTAL CURRENT ASSETS** | 930201 | 994953 |
| Property, plant and equipment, net | 59534 | 64823 |
| Operating right-of-use assets | 29266 | 35923 |
| Goodwill | 69522 | 89748 |
| Intangible assets, net | 5908 | 25239 |
| Deferred tax assets | 17827 | 17900 |
| Equity investments | 6107 | 3143 |
| Other assets | 6531 | 8433 |
| &nbsp;&nbsp;&nbsp;&nbsp;**TOTAL ASSETS** | $1124896 | $1240162 |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** | **LIABILITIES AND SHAREHOLDERS' EQUITY** | **LIABILITIES AND SHAREHOLDERS' EQUITY** |
| **CURRENT LIABILITIES** |  |  |
| Accounts payable | $52735 | $58847 |
| Operating lease liabilities | 6566 | 7718 |
| Accrued expenses and other current liabilities | 98928 | 90802 |
| Income taxes payable | 30235 | 26427 |
| &nbsp;&nbsp;&nbsp;&nbsp;**TOTAL CURRENT LIABILITIES** | 188464 | 183794 |
| Deferred tax liabilities | 35812 | 34594 |
| Income taxes payable | 20042 | 31352 |
| Operating lease liabilities | 29783 | 33245 |
| Other liabilities | 13269 | 13168 |
| &nbsp;&nbsp;&nbsp;&nbsp;**TOTAL LIABILITIES** | $287370 | $296153 |
| 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 52,374 and 53,854 shares, respectively | 612332 | 596703 |
| Treasury stock, at cost, 32,990 and 31,510 shares, respectively | (957392) | (881830) |
| Retained earnings | 1203768 | 1242558 |
| Accumulated other comprehensive loss | (21182) | (13422) |
| &nbsp;&nbsp;&nbsp;&nbsp;**TOTAL SHAREHOLDERS' EQUITY** | $837526 | $944009 |
| &nbsp;&nbsp;&nbsp;&nbsp;**TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY** | $1124896 | $1240162 |

---

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

------

<u>[**Table of Contents**](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

**KULICKE AND SOFFA INDUSTRIES, INC.**

 **CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (Unaudited)**

*(in thousands, except per share data)*

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three months ended | Three months ended | Nine months ended | Nine months ended |
| | June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 |
| Net revenue | $148413 | $181650 | $476523 | $524913 |
| Cost of sales | 79170 | 96920 | 279812 | 343816 |
| Gross profit | 69243 | 84730 | 196711 | 181097 |
| Selling, general and administrative | 39596 | 38516 | 126224 | 119359 |
| Research and development | 35741 | 37937 | 110769 | 112451 |
| Gain relating to cessation of business |  |  | (75987) |  |
| Impairment charges |  |  | 39817 | 44472 |
| Operating expenses | 75337 | 76453 | 200823 | 276282 |
| (Loss) / Income from operations | (6094) | 8277 | (4112) | (95185) |
| Interest income | 6008 | 8060 | 17982 | 26807 |
| Interest expense | (32) | (20) | (95) | (60) |
| (Loss) / Income before income taxes | (118) | 16317 | 13775 | (68438) |
| Provision for income taxes | 3171 | 4053 | 19941 | 12685 |
| Net (loss) / income | $(3289) | $12264 | $(6166) | $(81123) |
| Net (loss) / income per share: |  |  |  |  |
| Basic | $(0.06) | $0.22 | $(0.12) | $(1.45) |
| Diluted | $(0.06) | $0.22 | $(0.12) | $(1.45) |
| Weighted average shares outstanding: |  |  |  |  |
| Basic | 52692 | 55280 | 53265 | 56028 |
| Diluted | 52692 | 55724 | 53265 | 56028 |

---

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

------

<u>[**Table of Contents**](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

**KULICKE AND SOFFA INDUSTRIES, INC.**

 **CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)**

*(in thousands)*

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three months ended | Three months ended | Nine months ended | Nine months ended |
| | June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 |
| Net (loss) / income | $(3289) | $12264 | $(6166) | $(81123) |
| Other comprehensive income / (loss): |  |  |  |  |
| Foreign currency translation adjustment | 212 | (1168) | (7577) | 2085 |
| Net changes in pension plan, net of tax | (170) | (2) | (91) | (14) |
| Net increase / (decrease) from derivatives designated as hedging instruments, net of tax | 2107 | (427) | (92) | (118) |
| Total other comprehensive income / (loss) | 2149 | (1597) | (7760) | 1953 |
| Comprehensive (loss) / income | $(1140) | $10667 | $(13926) | $(79170) |

---

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

------

<u>[**Table of Contents**](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

**KULICKE AND SOFFA INDUSTRIES, INC.**

 **CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)**

*(in thousands)*

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | Common Stock | Common Stock | | | | |
| | Outstanding Shares | Amount |<br>Treasury Stock |<br>Retained earnings |<br>Accumulated Other Comprehensive (loss) / income |<br>Shareholders' Equity |
| Balances as of September 28, 2024 | 53854 | $596703 | $(881830) | $1242558 | $(13422) | $944009 |
| Issuance of stock for services rendered | 7 | 245 | 70 |  |  | 315 |
| Repurchase of common stock | (793) |  | (36879) |  |  | (36879) |
| Issuance of shares for equity-based compensation | 473 | (4873) | 4549 |  |  | (324) |
| Excise tax |  |  | (151) |  |  | (151) |
| Equity-based compensation |  | 5826 |  |  |  | 5826 |
| Cash dividend declared ($0.205 per share) |  |  |  | (10987) |  | (10987) |
| Components of comprehensive income |  |  |  |  |  |  |
| Net income |  |  |  | 81642 |  | 81642 |
| Other comprehensive loss |  |  |  |  | (10707) | (10707) |
| Total other comprehensive income / (loss) |  |  |  | 81642 | (10707) | 70935 |
| Balances as of December 28, 2024 | 53541 | $597901 | $(914241) | $1313213 | $(24129) | $972744 |
| Issuance of stock for services rendered | 7 | 259 | 55 |  |  | 314 |
| Repurchase of common stock | (518) |  | (21250) |  |  | (21250) |
| Issuance of shares for equity-based compensation | 2 | (17) | 14 |  |  | (3) |
| Excise tax |  |  | (211) |  |  | (211) |
| Equity-based compensation |  | 7179 |  |  |  | 7179 |
| Cash dividend declared ($0.205 per share) |  |  |  | (10886) |  | (10886) |
| Components of comprehensive loss |  |  |  |  |  |  |
| Net loss |  |  |  | (84519) |  | (84519) |
| Other comprehensive income |  |  |  |  | 798 | 798 |
| Total other comprehensive (loss) / income |  |  |  | (84519) | 798 | (83721) |
| Balances as of March 29, 2025 | 53032 | $605322 | $(935633) | $1217808 | $(23331) | $864166 |
| Issuance of stock for services rendered | 8 | 205 | 66 |  |  | 271 |
| Repurchase of common stock | (668) |  | (21621) |  |  | (21621) |
| Issuance of shares for equity-based compensation | 2 | (16) | 12 |  |  | (4) |
| Excise tax |  |  | (216) |  |  | (216) |
| Equity-based compensation |  | 6821 |  |  |  | 6821 |
| Cash dividend declared ($0.205 per share) |  |  |  | (10751) |  | (10751) |
| Components of comprehensive loss |  |  |  |  |  |  |
| Net loss |  |  |  | (3289) |  | (3289) |
| Other comprehensive income |  |  |  |  | 2149 | 2149 |
| Total other comprehensive (loss) / income |  |  |  | (3289) | 2149 | (1140) |
| Balances as of June 28, 2025 | 52374 | $612332 | $(957392) | $1203768 | $(21182) | $837526 |

---

------

<u>[**Table of Contents**](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | Common Stock | Common Stock | | | | |
| | Outstanding Shares | Amount |<br>Treasury Stock |<br>Retained earnings |<br>Accumulated Other Comprehensive (loss) / income |<br>Shareholders' Equity |
| Balances as of September 30, 2023 | 56310 | $577727 | $(737214) | $1355810 | $(21762) | $1174561 |
| Issuance of stock for services rendered | 7 | 253 | 62 |  |  | 315 |
| Repurchase of common stock | (556) |  | (26840) |  |  | (26840) |
| Issuance of shares for equity-based compensation | 734 | (7043) | 7043 |  |  |  |
| Equity-based compensation |  | 7542 |  |  |  | 7542 |
| Cash dividend declared ($0.20 per share) |  |  |  | (11303) |  | (11303) |
| Components of comprehensive income |  |  |  |  |  |  |
| Net income |  |  |  | 9293 |  | 9293 |
| Other comprehensive income |  |  |  |  | 7683 | 7683 |
| Total other comprehensive income |  |  |  | 9293 | 7683 | 16976 |
| Balances as of December 30, 2023 | 56495 | $578479 | $(756949) | $1353800 | $(14079) | $1161251 |
| Issuance of stock for services rendered | 6 | 258 | 57 |  |  | 315 |
| Repurchase of common stock | (755) |  | (37329) |  |  | (37329) |
| Issuance of shares for equity-based compensation | 4 | (28) | 28 |  |  |  |
| Equity-based compensation |  | 5917 |  |  |  | 5917 |
| Cash dividend declared ($0.20 per share) |  |  |  | (11164) |  | (11164) |
| Components of comprehensive loss |  |  |  |  |  |  |
| Net loss |  |  |  | (102680) |  | (102680) |
| Other comprehensive loss |  |  |  |  | (4133) | (4133) |
| Total other comprehensive loss |  |  |  | (102680) | (4133) | (106813) |
| Balances as of March 30, 2024 | 55750 | $584626 | $(794193) | $1239956 | $(18212) | $1012177 |
| Issuance of stock for services rendered | 6 | 256 | 60 |  |  | 316 |
| Repurchase of common stock | (934) |  | (43954) |  |  | (43954) |
| Excise tax |  |  | (730) |  |  | (730) |
| Issuance of shares for equity-based compensation | 1 | (14) | 14 |  |  |  |
| Equity-based compensation |  | 6047 |  |  |  | 6047 |
| Cash dividend declared ($0.20 per share) |  |  |  | (10985) |  | (10985) |
| Components of comprehensive income |  |  |  |  |  |  |
| Net income |  |  |  | 12264 |  | 12264 |
| Other comprehensive loss |  |  |  |  | (1597) | (1597) |
| Total other comprehensive income / (loss) |  |  |  | 12264 | (1597) | 10667 |
| Balances as of June 29, 2024 | 54823 | $590915 | $(838803) | $1241235 | $(19809) | $973538 |

---

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

------

<u>[**Table of Contents**](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

 **KULICKE AND SOFFA INDUSTRIES, INC.**

**CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)**

*(in thousands)*

---

| | | |
|:---|:---|:---|
| | Nine months ended | Nine months ended |
| | June 28, 2025 | June 29, 2024 |
| CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |
| Net loss | $(6166) | $(81123) |
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: |  |  |
| Depreciation and amortization | 13941 | 19896 |
| Impairment charges | 39817 | 44472 |
| Equity-based compensation | 20726 | 20452 |
| Adjustment for inventory valuation | 43128 | 68755 |
| Deferred taxes | 1318 | 13013 |
| (Gain) Loss disposal of property, plant and equipment | (118) | 43 |
| Gain on disposal of a subsidiary | (3154) |  |
| Unrealized fair value changes on equity investment | (629) | (346) |
| Unrealized foreign currency translation | (9200) | 2044 |
| Changes in operating assets and liabilities, net of businesses acquired or sold: |  |  |
| Accounts and other receivable | 19965 | (42387) |
| Inventories | (21382) | (27004) |
| Prepaid expenses and other current assets | 4698 | 18369 |
| Accounts payable, accrued expenses and other current liabilities | 10514 | (7839) |
| Income taxes payable | (7492) | (23097) |
| Other, net | 193 | (5830) |
| Net cash provided by (used in) operating activities | $106159 | $(582) |
| CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |
| Disposal of a subsidiary, net of cash disposed of | 2535 |  |
| Purchases of property, plant and equipment | (14246) | (13680) |
| Proceeds from sales of property, plant and equipment | 207 |  |
| Investment in private equity fund | (2335) | (1838) |
| Purchase of short-term investments | (400000) | (470000) |
| Maturity of short-term investments | 440000 | 465000 |
| Net cash provided by (used in) investing activities | $26161 | $(20518) |
| CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |
| Payment for finance lease | (310) | (417) |
| Repurchase of common stock/treasury stock | (80100) | (108135) |
| Payments related to tax on vested equity compensation | (331) |  |
| Payment of excise tax for share repurchases | (1156) |  |
| Common stock cash dividends paid | (32667) | (33177) |
| Net cash used in financing activities | $(114564) | $(141729) |
| Effect of exchange rate changes on cash and cash equivalents | 1578 | 344 |
| Changes in cash and cash equivalents | 19334 | (162485) |
| Cash and cash equivalents at beginning of period | 227147 | 529402 |
| Cash and cash equivalents at end of period | $246481 | $366917 |
| SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES: |  |  |
| CASH PAID FOR: |  |  |
| Interest | $95 | $60 |
| Income taxes, net of refunds | $21490 | $22533 |

---

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

------

<u>[**Table of Contents**](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

**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 ("K&S," "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 28, 2024 (the "2024 Annual Report") filed with the Securities and Exchange Commission on November 14, 2024, which includes the Consolidated Balance Sheets as of September 28, 2024 and September 30, 2023, 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 28, 2024. 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***&nbsp;&nbsp;&nbsp;&nbsp;

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 2025 quarters end on December 28, 2024, March 29, 2025, June 28, 2025 and October 4, 2025. In fiscal years consisting of 53 weeks, the fourth quarter will consist of 14 weeks. Fiscal 2024 quarters ended on December 30, 2023, March 30, 2024, June 29, 2024 and September 28, 2024.

***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.

On March 25, 2025, the Board of Directors of the Company approved a strategic plan related to the intended cessation of its Electronics Assembly ("EA") equipment business. The plan includes an intention to wind down the EA equipment business in an effort to prioritize core semiconductor assembly business opportunities and enhance overall through-cycle financial performance. The intended cessation of the EA equipment business is subject to a consultation process with the applicable works council and union representatives, which the Company has initiated in the third fiscal quarter of 2025. The wind down activities are ongoing and are expected to be substantially completed by the first half of fiscal 2026, after which there will be some service support activities to serve out the remaining customer obligations. For additional information, see Note 16: Cessation of Business in our Notes to the Consolidated Condensed Financial Statements.

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<u>[**Table of Contents**](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

**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 June 28, 2025. While there was no material impact from macroeconomic headwinds to our consolidated condensed financial statements as of and for the quarter ended June 28, 2025, 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 2024 Annual Report.

***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 over a variety of Codification Topics. They will also allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC's regulations. This ASU will become effective for each amendment on the date on which the SEC removes the related disclosure from its regulations. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

*Segment Reporting*

In November 2023, the FASB issued ASU 2023-07, *Segment Reporting* (Topic 280): Improvements to Reportable Segment Disclosure, which aims to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments in the ASU enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the amendments is to enable investors to better understand an entity's overall performance and assess potential future cash flows. This ASU will be effective for the Company's fiscal year 2025, and interim periods within the fiscal years beginning after the Company's fiscal year 2026. Early adoption is permitted. The Company will include the required Segment Reporting disclosures within the Notes to Financial Statements with the filing of its Annual Report on Form 10-K for the year ending on October 4, 2025.

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<u>[**Table of Contents**](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

**KULICKE AND SOFFA INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS** 

**Unaudited (continued)**

*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.

*Disaggregation of Income Statement Expenses*

In November 2024, the FASB issued ASU 2024-03 *Income Statement - Reporting Comprehensive Income -Expense Disaggregation Disclosures* (Topic 220): Disaggregation of Income Statement Expenses. This ASU requires disclosure of certain expenses in the notes to the financial statements. This ASU will be effective for the Company's fiscal 2028 on a prospective basis, with retrospective application permitted. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

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<u>[**Table of Contents**](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

**KULICKE AND SOFFA INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS** 

**Unaudited (continued)**

**NOTE 2. BALANCE SHEET COMPONENTS**

Components of significant balance sheet accounts as of June 28, 2025 and September 28, 2024 are as follows:

---

| | | |
|:---|:---|:---|
| | As of | As of |
| (in thousands) | June 28, 2025 | September 28, 2024 |
| Inventories, net: |  |  |
| Raw materials and supplies | $118857 | $113119 |
| Work in process | 40840 | 43023 |
| Finished goods | 66428 | 53378 |
|  | 226125 | 209520 |
| Inventory reserves <sup>(1)</sup> | (67795) | (31784) |
|  | $158330 | $177736 |
| Property, plant and equipment, net: <sup>(1) (2)</sup> |  |  |
| Land | $2182 | $2182 |
| Buildings and building improvements | 31084 | 23951 |
| Leasehold improvements | 39409 | 44682 |
| Data processing equipment and software | 39510 | 37917 |
| Machinery, equipment, furniture and fixtures | 102478 | 105548 |
| Construction in progress | 7036 | 10060 |
|  | 221699 | 224340 |
| Accumulated depreciation | (162165) | (159517) |
|  | $59534 | $64823 |
| Accrued expenses and other current liabilities: |  |  |
| Accrued customer obligations <sup>(3)</sup> | $28712 | $31014 |
| Wages and benefits | 30800 | 28942 |
| Dividend payable | 10751 | 10794 |
| Commissions and professional fees | 5670 | 4654 |
| Accrued leasehold renovations |  | 6476 |
| Accrued adverse purchase commitments <sup>(1)</sup> | 9700 | 1836 |
| Severance <sup>(1)</sup> | 10497 | 2407 |
| Other | 2798 | 4679 |
|  | $98928 | $90802 |

---

(1)Please see Note 16: Cessation of Business for more information on the wind down charges and impairments related to the intended cessation of the EA equipment business.

(2)Certain balances previously presented as Accumulated Impairment as of September 28, 2024 have been reclassified to conform to the current period presentation. These reclassifications have no impact to the consolidated financial statements in the fiscal period.

(3)Represents customer advance payments, customer credit program, accrued warranty expense and accrued retrofit obligations.

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<u>[**Table of Contents**](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

**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 2024 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.

Under ASC 350, the Company is required to test its goodwill and other intangible assets for impairment annually or when a triggering event has occurred that would indicate it is more likely than not that the fair value of the reporting unit is less than the carrying value including goodwill and other intangible assets. In the previous quarter ended March 29, 2025, the Company concluded that a triggering event had occurred in connection with one reporting unit within the APS reportable segment and one reporting unit within the "All Others" category. The triggering event occurred based on the approval of the strategic plan related to the intended cessation of the EA equipment business. In view of the intended cessation of the EA equipment business and the related reduction in revenue and future cash flow for the reporting units, the Company performed a qualitative assessment and determined that it is more likely than not that this will reduce the fair value of the impacted reporting units below their carrying amount.

In accordance with the guidance under ASC 350, the Company's impairment test is performed by comparing the fair value of a reporting unit with its carrying amount, and recognizing an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value, not to exceed the amount of goodwill assigned to the report unit. Accordingly, the Company performed a quantitative impairment test and estimated the fair value of each reporting unit to be less than its carrying value.

The Company used a discounted cash flow model to determine the fair value of each reporting unit within the APS reportable segment and "All Others" category respectively, and as such they were classified as Level 3 assets in the fair value hierarchy. The cash flow projections used within the discounted cash flow models were prepared using the forecasted financial results of each reporting unit, which was based upon the underlying assumption that future revenue and cash flows will diminish once the intended cessation of business is completed. Please refer to Note 16: Cessation of Business for further information on the intended cessation of business. As a result, a goodwill impairment charge, which is a non-cash charge that represents the entire goodwill assigned to the respective reporting units, of $19.2 million within the APS reportable segment and "All Others" category has been recorded and reflected in the Company's Consolidated Condensed Statements of Operations for the nine months ended June 28, 2025.

During the three months ended June 28, 2025, the Company reviewed qualitative factors to ascertain if a "triggering" event may have taken place that would indicate it is more likely than not that that the fair value of the reporting unit is less than the 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 June 28, 2025, 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. 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.

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**KULICKE AND SOFFA INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS** 

**Unaudited (continued)**

The following table summarizes the changes in the Company's recorded goodwill, where applicable, by reportable segments and the "All Others" category as of June 28, 2025 and September 28, 2024. Please refer to Note 16: Cessation of Business for further information on the intended cessation of business:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| (in thousands) |  | Wedge Bonding Equipment | APS | All others | Total |
| Balance at September 28, 2024 | <sup>(1)</sup> | $18280 | $26268 | $45200 | $89748 |
| Goodwill impairment |  |  | (2850) | (16348) | $(19198) |
| Other |  |  | (152) | (876) | $(1028) |
| Balance at June 28, 2025 |  | $18280 | $23266 | $27976 | $69522 |

---

(1) Cumulative goodwill impairment pertaining to the "All Others" category as of September 28, 2024 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.

In connection with the intended cessation of the EA equipment business, the Company recorded an impairment charge of $15.7 million on the developed technology reported within the APS reportable segment and "All Others" category in the previous quarter ended March 29, 2025. The impairment of intangible assets is a non-cash charge which has been reflected in the Company's Consolidated Statements of Operations for nine months ended June 28, 2025.

The following table reflects net intangible assets as of June 28, 2025 and September 28, 2024:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | | As of June 28, 2025 | As of June 28, 2025 | As of June 28, 2025 | As of September 28, 2024 | As of September 28, 2024 | As of September 28, 2024 |
| (dollar amounts in thousands) | Average estimated useful lives (in years) | Gross carrying amount | Accumulated amortization | Net amount | Gross carrying amount | Accumulated amortization | Net amount |
| Developed technology | 6.0 to 15.0 | $37461 | $(34443) | $3018 | $83401 | $(61575) | $21826 |
| Customer relationships | 5.0 to 8.0 | $21430 | $(19921) | $1509 | $37625 | $(35916) | $1709 |
| Trade and brand name | 7.0 to 8.0 | $4600 | $(4600) | $— | $7272 | $(7272) | $— |
| Other intangible assets | 1.0 to 8.0  | $5618 | $(4696) | $922 | $5617 | $(4372) | $1245 |
| In-process research and development | N.A | $459 | $— | $459 | $459 | $— | $459 |
| Total |  | $69568 | $(63660) | $5908 | $134374 | $(109135) | $25239 |

---

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**KULICKE AND SOFFA INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS** 

**Unaudited (continued)**

The following table reflects estimated annual amortization expense related to intangible assets as of June 28, 2025:

---

| | |
|:---|:---|
| | As of |
| *(in thousands)* | June 28, 2025 |
| Remaining Fiscal 2025 | $322 |
| Fiscal 2026 | $1288 |
| Fiscal 2027 | $1013 |
| Fiscal 2028 | $922 |
| Fiscal 2029 | $922 |
| Thereafter | $1441 |
| Total amortization expense | $5908 |

---

**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 June 28, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
| *(in thousands)* | Amortized Cost | Unrealized<br>Gains | Unrealized<br>Losses | Estimated<br>Fair Value |
| Current assets: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash | $52991 | $— | $— | $52991 |
| &nbsp;&nbsp;&nbsp;Cash equivalents: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mutual Funds <sup>(1)</sup> | 156853 | 72 |  | 156925 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time deposits <sup>(2)</sup> | 36565 |  |  | 36565 |
| Total cash and cash equivalents | $246409 | $72 | $— | $246481 |
| &nbsp;&nbsp;&nbsp;Short-term investments: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time deposits <sup>(2)</sup> | 310000 |  |  | 310000 |
| Total short-term investments | $310000 | $— | $— | $310000 |
| Total cash, cash equivalents, restricted cash, and short-term investments | $556409 | $72 | $— | $556481 |

---

(1)Mutual funds held by the Company include Money Market Funds and Ultra-Short Funds. 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)The fair value of all short-term investments approximates cost basis. The Company did not recognize any realized gains or losses on the sale of investments during the three and nine months ended June 28, 2025.

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<u>[**Table of Contents**](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

**KULICKE AND SOFFA INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS** 

**Unaudited (continued)**

Cash, cash equivalents and short-term investments consisted of the following as of September 28, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| *(in thousands)* | Amortized Cost | Unrealized<br>Gains | Unrealized<br>Losses | Estimated<br>Fair Value |
| Current assets: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash | $26800 | $— | $— | $26800 |
| &nbsp;&nbsp;&nbsp;Cash equivalents: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mutual Funds <sup>(1)</sup> | 157590 | 89 |  | 157679 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time deposits <sup>(2)</sup> | 42668 |  |  | 42668 |
| Total cash and cash equivalents | $227058 | $89 | $— | $227147 |
| &nbsp;&nbsp;&nbsp;Short-term investments: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time deposits <sup>(2)</sup> | 350000 |  |  | 350000 |
| Total short-term investments | $350000 | $— | $— | $350000 |
| Total cash, cash equivalents, restricted cash, and short-term investments | $577058 | $89 | $— | $577147 |

---

(1)Mutual funds held by the Company include Money Market Funds. 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)The fair value of all short-term investments approximates cost basis. The Company did not recognize any realized gains or losses on the sale of investments during the three and nine months ended June 29, 2024.

**NOTE 5. EQUITY INVESTMENTS**

Equity investments consisted of the following as of June 28, 2025 and September 28, 2024:

---

| | | |
|:---|:---|:---|
| | As of | As of |
| *(in thousands)* | June 28, 2025 | September 28, 2024 |
| Non-marketable equity securities | $6107 | $3143 |

---

**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 otherwise 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 and has not been classified in the fair value hierarchy. As of June 28, 2025, the Company has funded $5.8 million into the affiliated investment fund and recognized a cumulative unrealized fair value gain of $0.3 million. The Company has recorded the amount of funded capital that has been called as an equity investment.

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**KULICKE AND SOFFA INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS** 

**Unaudited (continued)**

**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 as described in Note 4: Cash, Cash Equivalents, And Short-term Investments and Note 5: Equity Investments at fair value on a recurring basis. There were no transfers between fair value measurement levels during the three and nine months ended June 28, 2025.

***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. Please refer to Note 3: Goodwill and Intangible Assets for further information on the fair value measurement of assets relating to the intended cessation of the EA equipment business.

***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 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 June 28, 2025 and September 28, 2024 were as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | As of | As of | As of | As of | As of | |
| | June 28, 2025 | June 28, 2025 | | September 28, 2024 | September 28, 2024 | |
| *(in thousands)* | Notional Amount | Fair Value Asset Derivatives | <sup>(1)</sup> | Notional Amount | Fair Value Asset Derivatives | <sup>(1)</sup> |
| Derivatives designated as hedging instruments: |  |  |  |  |  |  |
| Foreign exchange forward contracts <sup>(2)</sup> | $47632 | $1429 |  | $46234 | $1521 |  |
| Total derivatives | $47632 | $1429 |  | $46234 | $1521 |  |

---

(1)The fair value of derivative assets is measured using level 2 fair value inputs and is included in prepaid expenses and other current assets on our Consolidated Condensed Balance Sheets.

(2)Hedged amounts expected to be recognized to income within the next twelve months.

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**KULICKE AND SOFFA INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS** 

**Unaudited (continued)**

The effects of derivative instruments designated as cash flow hedges in our Consolidated Condensed Statements of Comprehensive Income for the three and nine months ended June 28, 2025 and June 29, 2024 were as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | Three Months Ended | Three Months Ended | Nine months ended | Nine months ended |
| (in thousands) |  | June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 |
| Foreign exchange forward contract in cash flow hedging relationships: |  |  |  |  |  |
| Net gain/(loss) recognized in OCI, net of tax | <sup>(1)</sup> | $1847 | $(484) | $(224) | $(418) |
| Net loss reclassified from accumulated OCI into income, net of tax | <sup>(2)</sup> | $(260) | $(57) | $(132) | $(300) |

---

(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 June 28, 2025, 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 June 28, 2025 and September 28, 2024, our finance leases are not material.

The following table shows the components of lease expense:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three months ended | Three months ended | Nine months ended | Nine months ended |
| *(in thousands)* | June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 |
| Operating lease expense <sup>(1)</sup> | $2239 | $2310 | $6956 | $7725 |

---

(1)Operating lease expense includes short-term lease expense and variable lease expenses, which is immaterial for the three and nine months ended June 28, 2025 and June 29, 2024.

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:

---

| | | |
|:---|:---|:---|
| | Nine months ended | Nine months ended |
| *(in thousands)* | June 28, 2025 | June 29, 2024 |
| Cash paid for amounts included in the measurement of lease liabilities: |  |  |
| Operating cash outflows from operating leases | $7909 | $7867 |

---

------

<u>[**Table of Contents**](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

**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 | As of |
| | June 28, 2025 | September 28, 2024 |
| Operating leases: |  |  |
| Weighted-average remaining lease term *(in years)*: | 7.0 | 7.3 |
| Weighted-average discount rate: | 7.1% | 7.2% |

---

Future lease payments, excluding short-term leases, as of June 28, 2025, are detailed as follows:

---

| | |
|:---|:---|
| | As of |
| (in thousands) | June 28, 2025 |
| Remaining fiscal 2025 | $2441 |
| Fiscal 2026 | 8422 |
| Fiscal 2027 | 6070 |
| Fiscal 2028 | 5294 |
| Fiscal 2029 | 5163 |
| Thereafter | 18893 |
| Total minimum lease payments | 46283 |
| Less: Interest | $9934 |
| Present value of lease obligations | $36349 |
| Less: Current portion | $6566 |
| Long-term portion of lease obligations | $29783 |

---

 **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 June 28, 2025, the outstanding amount under this facility was $5.0 million.

***Credit Facilities***

On February 15, 2019, the Company entered into a Facility Letter and Overdraft Agreement (collectively, the "Facility Agreements") with MUFG Bank, Ltd., Singapore Branch (the "Bank"). The Facility Agreements provide the Company and one of its subsidiaries with an overdraft facility of up to $150.0 million (the "Overdraft Facility") for general corporate purposes.

On June 6, 2025, the Company terminated the Facility Agreements with the Bank. As of the date of termination, there were no outstanding amounts under the Overdraft Facility. In addition, the Company did not incur any early termination penalties in connection with the termination of the Facility Agreements.

------

<u>[**Table of Contents**](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

**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 to repurchase up to $100 million of the Company's common stock on or before August 1, 2020. In 2018, 2019, 2020 and 2022, the Board of Directors increased the share repurchase authorization to $200 million, $300 million, $400 million and $800 million, respectively, and extended its duration through August 1, 2025 (the "Prior Program").

During the three months ended December 28, 2024, the Company repurchased a total of approximately 657.0 thousand shares of common stock under the Prior Program at a cost of approximately $30.3 million. On December 2, 2024, the Company announced that it has completed share repurchases under the Prior Program.

Additionally, as announced on November 13, 2024, the Board of Directors authorized a new share repurchase program to repurchase up to $300 million of the Company's common stock (the "New Program"). On December 2, 2024, the Company entered into a new written trading plan under Rule 10b5-1 of the Exchange Act, to facilitate repurchases under the New Program. The plan permits the purchase of up to approximately $300 million of the Company's common stock from December 2, 2024 through December 2, 2029. The New 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 New 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 New Program depend on market conditions as well as corporate and regulatory considerations.

During the three and nine months ended June 28, 2025, the Company repurchased a total of approximately 668.0 thousand and 1,322.0 thousand shares of common stock under the New Program at a cost of approximately $21.6 million and $49.5 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 June 28, 2025, our remaining stock repurchase authorization under the New Program was approximately $250.5 million.

***Dividends***

On June 5, 2025, the Board of Directors declared a quarterly dividend of $0.205 per share of common stock. Dividends paid during the three and nine months ended June 28, 2025 totaled $10.9 million and $32.7 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.

------

<u>[**Table of Contents**](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

**KULICKE AND SOFFA INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS** 

**Unaudited (continued)**

***Accumulated Other Comprehensive Loss***

The following table reflects changes in accumulated other comprehensive income/(loss) by component as of June 28, 2025 and September 28, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| (in thousands) | Cumulative Foreign Currency Translation Adjustment | Pension Plan Adjustments | Gain / (Loss) on Derivative Instruments | Total |
| As of September 28, 2024 | $(13261) | $(1682) | $1521 | $(13422) |
| Other comprehensive loss before reclassifications | (6916) | (91) | (224) | (7231) |
| Amount reclassified out of accumulated other comprehensive (loss)/income | (815) |  | 132 | (683) |
| Tax effects | 154 |  |  | 154 |
| Other comprehensive loss | (7577) | (91) | (92) | (7760) |
| As of June 28, 2025 | $(20838) | $(1773) | $1429 | $(21182) |

---

***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. On March 5, 2025, the stockholders of the Company approved an amendment to the Plan that increased the number of shares of common stock available for issuance by 2.8 million shares, which were registered on the registration statement on Form S-8 filed with the SEC on March 11, 2025. As of June 28, 2025, 3.9 million shares of common stock are available for grant to the Company's employees and directors under the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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 nine months ended June 28, 2025 and June 29, 2024 was based upon awards ultimately expected to vest, with forfeiture accounted for when they occur.

------

<u>[**Table of Contents**](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

**KULICKE AND SOFFA INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS** 

**Unaudited (continued)**

The following table reflects Time-based RSUs, Relative TSR PSUs, Growth PSUs and common stock granted during the three and nine months ended June 28, 2025 and June 29, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three months ended | Three months ended | Nine months ended | Nine months ended |
| (shares in thousands) | June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 |
| Time-based RSUs | 4 | 4 | 567 | 506 |
| Relative TSR PSUs |  | 1 | 128 | 232 |
| Growth PSUs |  |  |  | 49 |
| Common stock | 8 | 6 | 22 | 19 |
| Equity-based compensation in shares | 12 | 11 | 717 | 806 |

---

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 nine months ended June 28, 2025 and June 29, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three months ended | Three months ended | Nine months ended | Nine months ended |
| *(in thousands)* | June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 |
| Cost of sales | $376 | $315 | $1146 | $1037 |
| Selling, general and administrative | 4527 | 4300 | 13186 | 14083 |
| Research and development | 2189 | 1748 | 6394 | 5332 |
| Total equity-based compensation expense | $7092 | $6363 | $20726 | $20452 |

---

The following table reflects equity-based compensation expense, by type of award, for the three and nine months ended June 28, 2025 and June 29, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three months ended | Three months ended | Nine months ended | Nine months ended |
| *(in thousands)* | June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 |
| Time-based RSUs | $5003 | $4327 | $15369 | $13340 |
| Relative TSR PSUs | 1705 | 1484 | 5320 | 4317 |
| Growth PSUs | 113 | 237 | (863) | 1850 |
| Common stock | 271 | 315 | 900 | 945 |
| Total equity-based compensation expense | $7092 | $6363 | $20726 | $20452 |

---

**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 nine months ended June 28, 2025 and June 29, 2024, 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.

------

<u>[**Table of Contents**](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

**KULICKE AND SOFFA INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS** 

**Unaudited (continued)**

***Contract Balances***

---

| | | |
|:---|:---|:---|
| | As of | As of |
| (in thousands) | June 28, 2025 | September 28, 2024 |
| Contract liabilities | $17834 | $18646 |

---

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 increased as a result of receiving new advanced payments from customers, partially offset by the recognition in revenue of $15.0 million that was included in contract liabilities as of September 28, 2024.

**NOTE 12. EARNINGS PER SHARE**

Basic income per share is calculated using the weighted average number of shares of common stock outstanding during the period. Restricted stock are included in the calculation of diluted earnings per share, except when their effect would be anti-dilutive. For the three months ended June 28, 2025, and nine months ended June 28, 2025 and June 29, 2024, restricted stock were excluded due to the net loss the Company incurred during the period.

The following table reflects a reconciliation of the shares used in the basic and diluted net (loss)/income per share computation for the three and nine months ended June 28, 2025 and June 29, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three months ended | Three months ended | Three months ended | Three months ended |
| *(in thousands, except per share)* | June 28, 2025 | June 28, 2025 | June 29, 2024 | June 29, 2024 |
|  | Basic | Diluted | Basic | Diluted |
| NUMERATOR: |  |  |  |  |
| Net (loss)/income | $(3289) | $(3289) | $12264 | $12264 |
| DENOMINATOR: |  |  |  |  |
| Weighted average shares outstanding - Basic | 52692 | 52692 | 55280 | 55280 |
| Dilutive effect of Equity Plans |  |  |  | 444 |
| Weighted average shares outstanding - Diluted |  | 52692 |  | 55724 |
| EPS: |  |  |  |  |
| Net (loss)/income per share - Basic | $(0.06) | $(0.06) | $0.22 | $0.22 |
| Effect of dilutive shares |  |  |  |  |
| Net (loss)/income per share - Diluted |  | $(0.06) |  | $0.22 |
| Anti-dilutive shares <sup>(1)</sup> |  | 289 |  | 21 |

---

------

<u>[**Table of Contents**](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

**KULICKE AND SOFFA INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS** 

**Unaudited (continued)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Nine months ended | Nine months ended | Nine months ended | Nine months ended |
| *(in thousands, except per share)* | June 28, 2025 | June 28, 2025 | June 29, 2024 | June 29, 2024 |
|  | Basic | Diluted | Basic | Diluted |
| NUMERATOR: |  |  |  |  |
| Net loss | $(6166) | $(6166) | $(81123) | $(81123) |
| DENOMINATOR: |  |  |  |  |
| Weighted average shares outstanding - Basic | 53265 | 53265 | 56028 | 56028 |
| Dilutive effect of Equity Plans |  |  |  |  |
| Weighted average shares outstanding - Diluted |  | 53265 |  | 56028 |
| EPS: |  |  |  |  |
| Net loss per share - Basic | $(0.12) | $(0.12) | $(1.45) | $(1.45) |
| Effect of dilutive shares |  |  |  |  |
| Net loss per share - Diluted |  | $(0.12) |  | $(1.45) |
| Anti-dilutive shares <sup>(1)</sup> |  | 237 |  | 445 |

---

(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 nine months ended June 28, 2025 and June 29, 2024 as the effect would have been anti-dilutive.

**NOTE 13. INCOME TAXES**

The following table reflects the provision for income taxes and the effective tax rate for the three and nine months ended June 28, 2025 and June 29, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three months ended | Three months ended | Nine months ended | Nine months ended |
| *(dollar amounts in thousands)* | June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 |
| Provision for income taxes | $3171 | $4053 | $19941 | $12685 |
| Effective tax rate | (2687.3)% | 24.8% | 144.8% | (18.5)% |

---

For the three and nine months ended June 28, 2025, as compared to the same period ended June 29, 2024, the change in provision for income taxes and effective tax rate was primarily due to the tax effects of the intended cessation of the Company's EA equipment business and the reimbursement from the cancellation of Project W which were recorded as discrete items during fiscal 2025 as well as the one-time charge for cancellation of Project W and the increase in valuation allowance recorded against certain deferred tax assets, which were recorded as discrete items during fiscal 2024.

For the three and nine months ended June 28, 2025, the effective tax rate is different than the U.S. federal statutory tax rate primarily due to earnings of foreign subsidiaries subject to tax at different rates than the U.S., tax incentives, tax credits, changes in valuation allowances, the impact of global intangible low-taxed income, and the tax impact of the discrete items noted above.

------

<u>[**Table of Contents**](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

**KULICKE AND SOFFA INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS** 

**Unaudited (continued)**

**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.

The Company has four reportable segments consisting of: (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 and wedge-related 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 and die-attach 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.

The following table reflects operating information by segment for the three and nine months ended June 28, 2025 and June 29, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three months ended | Three months ended | Nine months ended | Nine months ended |
| (in thousands) | June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 |
| Net revenue: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Ball Bonding Equipment | $75990 | $93254 | $201957 | $261432 |
| &nbsp;&nbsp;&nbsp;&nbsp;Wedge Bonding Equipment | 22126 | 26144 | 90546 | 72364 |
| &nbsp;&nbsp;&nbsp;&nbsp;Advanced Solutions | 10811 | 20953 | 56627 | 46401 |
| &nbsp;&nbsp;&nbsp;&nbsp;APS | 36448 | 38059 | 113354 | 119967 |
| &nbsp;&nbsp;&nbsp;&nbsp;All Others | 3038 | 3240 | 14039 | 24749 |
| Net revenue | $148413 | $181650 | $476523 | $524913 |
| (Loss)/Income from operations: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Ball Bonding Equipment | $23480 | $27751 | $56203 | $80617 |
| &nbsp;&nbsp;&nbsp;&nbsp;Wedge Bonding Equipment | 2065 | 4149 | 17681 | 12696 |
| &nbsp;&nbsp;&nbsp;&nbsp;Advanced Solutions | (10692) | (9785) | 61753 | (140201) |
| &nbsp;&nbsp;&nbsp;&nbsp;APS | 7346 | 11443 | 17304 | 36275 |
| &nbsp;&nbsp;&nbsp;&nbsp;All Others | (6179) | (8317) | (84637) | (25945) |
| &nbsp;&nbsp;&nbsp;&nbsp;Corporate Expenses | (22114) | (16964) | (72416) | (58627) |
| (Loss)/Income from operations | $(6094) | $8277 | $(4112) | $(95185) |

---

------

<u>[**Table of Contents**](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

**KULICKE AND SOFFA INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS** 

**Unaudited (continued)**

We have considered: (1) information that is regularly reviewed by our CODM in evaluating financial performance and how to allocate resources; and (2) other financial data, including information that we include in our earnings releases but which is not included in our financial statements, to disaggregate revenues by end markets served. The principal category we use to disaggregate revenues is by the end markets served.

The following table reflects net revenue by end markets served for the three and nine months ended June 28, 2025 and June 29, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three months ended | Three months ended | Nine months ended | Nine months ended |
| (in thousands) | June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 |
| General Semiconductor | $79381 | $89154 | $235624 | $250239 |
| Automotive & Industrial <sup>(1)</sup> | 17116 | 40061 | 98546 | 100257 |
| Memory | 15468 | 14376 | 28999 | 54450 |
| APS | 36448 | 38059 | 113354 | 119967 |
| Total revenue | $148413 | $181650 | $476523 | $524913 |

---

(1) In view of the intended EA equipment business cessation, the Company has simplified its end market disclosures by consolidating LED revenue within Automotive & Industrial revenue. As a result, the net revenue recorded within the previously-defined LED end market for prior periods has been consolidated within the Automotive & Industrial end market to conform to the current period presentation. These changes have no impact to the consolidated financial statements.

------

<u>[**Table of Contents**](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

**KULICKE AND SOFFA INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS** 

**Unaudited (continued)**

The following table reflects capital expenditures, depreciation expense and amortization expense for the three and nine months ended June 28, 2025 and June 29, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three months ended | Three months ended | Nine months ended | Nine months ended |
| (in thousands) | June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 |
| Capital expenditures: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Ball Bonding Equipment | $19 | $172 | $76 | $726 |
| &nbsp;&nbsp;&nbsp;&nbsp;Wedge Bonding Equipment | 211 | 495 | 291 | 630 |
| &nbsp;&nbsp;&nbsp;&nbsp;Advanced Solutions | 32 | 47 | 124 | 365 |
| &nbsp;&nbsp;&nbsp;&nbsp;APS | 441 | 157 | 1234 | 827 |
| &nbsp;&nbsp;&nbsp;&nbsp;All Others | 390 | 412 | 777 | 839 |
| &nbsp;&nbsp;&nbsp;&nbsp;Corporate Expenses | 1640 | 1983 | 5058 | 7258 |
|  | $2733 | $3266 | $7560 | $10645 |
| Depreciation expense: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Ball Bonding Equipment | $321 | $363 | $985 | $1010 |
| &nbsp;&nbsp;&nbsp;&nbsp;Wedge Bonding Equipment | 219 | 228 | 674 | 764 |
| &nbsp;&nbsp;&nbsp;&nbsp;Advanced Solutions | 277 | 295 | 793 | 5663 |
| &nbsp;&nbsp;&nbsp;&nbsp;APS | 1209 | 1332 | 3921 | 3957 |
| &nbsp;&nbsp;&nbsp;&nbsp;All Others | 255 | 398 | 925 | 1164 |
| &nbsp;&nbsp;&nbsp;&nbsp;Corporate Expenses | 1328 | 1078 | 3918 | 3416 |
|  | $3609 | $3694 | $11216 | $15974 |
| Amortization expense: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Ball Bonding Equipment | $— | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Wedge Bonding Equipment |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Advanced Solutions |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;APS |  | 227 | 526 | 684 |
| &nbsp;&nbsp;&nbsp;&nbsp;All Others | 216 | 931 | 1924 | 2963 |
| &nbsp;&nbsp;&nbsp;&nbsp;Corporate Expenses | 92 | 92 | 275 | 275 |
|  | $308 | $1250 | $2725 | $3922 |

---

**NOTE 15. COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS**

***Warranty Expense***

The Company's equipment is generally shipped with a one-year warranty against manufacturing defects. The Company establishes reserves for estimated warranty expense when revenue for the related equipment is recognized. The reserve for estimated warranty expense is based upon historical experience and management's estimate of future warranty costs, including product part replacement, freight charges and related labor costs expected to be incurred in correcting manufacturing defects during the warranty period.

------

<u>[**Table of Contents**](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

**KULICKE AND SOFFA INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS** 

**Unaudited (continued)**

The following table reflects the reserve for warranty activity for the three and nine months ended June 28, 2025 and June 29, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three months ended | Three months ended | Nine months ended | Nine months ended |
| (in thousands) | June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 |
| Reserve for product warranty, beginning of period | $8524 | $9907 | $9911 | $10457 |
| Provision for product warranty | 2064 | 3787 | 6476 | 9856 |
| Utilization of reserve | (2977) | (3329) | (8776) | (9948) |
| Reserve for product warranty, end of period | $7611 | $10365 | $7611 | $10365 |

---

***Other Commitments and Contingencies***

The following table reflects obligations not reflected on the Consolidated Condensed Balance Sheets as of June 28, 2025:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | | Payments due by fiscal year | Payments due by fiscal year | Payments due by fiscal year | Payments due by fiscal year | Payments due by fiscal year | Payments due by fiscal year |
| (in thousands) | Total | 2025 | 2026 | 2027 | 2028 | 2029 | Thereafter |
| Inventory purchase obligation <sup>(1)</sup> | $133373 | $26837 | $106536 | $— | $— | $— | $— |

---

(1)The Company orders inventory components in the normal course of its business. A portion of these orders are non-cancelable and a portion may have varying penalties and charges in the event of cancellation.

From time to time, the Company is party to or the target of lawsuits, claims, investigations and proceedings, including for personal injury, intellectual property, commercial, contract, and employment matters, which are handled and defended in the ordinary course of business. The Company accrues a contingent loss liability for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated. When a single amount cannot be reasonably estimated but the cost can be estimated within a range, the Company accrues the minimum amount. The Company expenses legal costs, including those expected to be incurred in connection with a loss contingency, as incurred.

*Unfunded Capital Commitments*

As of June 28, 2025, the Company also has an obligation to fund uncalled capital commitments of approximately $4.2 million, as and when required, in relation to its investment in a private equity fund.

***Concentrations***

The following table reflects significant customer concentrations as a percentage of net revenue for the nine months ended June 28, 2025 and June 29, 2024:

---

| | | |
|:---|:---|:---|
| | Nine months ended | Nine months ended |
| | June 28, 2025 | June 29, 2024 |
| Tianshui Huatian Technology Co., Ltd | 10.1% | \* |

---

\* Represents less than 10% of total net revenue

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**KULICKE AND SOFFA INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS** 

**Unaudited (continued)**

The following table reflects significant customer concentrations as a percentage of total accounts receivable as of June 28, 2025 and June 29, 2024:

---

| | | |
|:---|:---|:---|
| | As of | As of |
| | June 28, 2025 | June 29, 2024 |
| Intel Corporation | \* | 10.7% |
| Forehope Group | 16.2% | 23.8% |
| Tianshui Huatian Technology Co., Ltd | 18.0% | 12.4% |

---

\* Represents less than 10% of total accounts receivable

**NOTE 16. CESSATION OF BUSINESS**

***Cancellation of Project***

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"), previously referred to as Project W. As previously disclosed in fiscal 2024, in connection with the Customer's strategic review of its business, the Customer informed the Company that it cancelled the Project.

On November 4, 2024, the Company and the Customer entered into a written agreement pursuant to which the Customer had agreed to reimburse the Company for certain costs and expenses that the Company incurred in connection with the Project. Pursuant to the agreement, the Customer agreed to pay $86.2 million to the Company. During the nine months ended June 28, 2025, $15.1 million was included within "Net Revenue" for delivered products and the remaining $71.1 million was included in "Gain relating to cessation of business" in the Consolidated Condensed Statements of Operations. In the previous quarter ended March 29, 2025, the Company has received the reimbursement amount from the Customer.

***Intended cessation of EA Equipment Business***

On March 25, 2025, the Board of Directors of the Company approved a strategic plan related to the intended cessation of its EA equipment business. The plan includes the intended wind down of the EA equipment business in an effort to prioritize core semiconductor assembly business opportunities and enhance overall through-cycle financial performance. The intended cessation of the EA equipment business is subject to a consultation process with the applicable works council and union representatives, which the Company has initiated in the third fiscal quarter of 2025.

The Company expects to complete the majority of the wind down activities related to the EA equipment business in the first half of fiscal 2026, after which there will be some service support activities to serve out the remaining customer obligations.

Wind down charges as a result of these activities incurred during the three and nine period ended June 28, 2025 were accounted in accordance with ASC 330, *Inventory* and ASC 712, *Compensation—Nonretirement Postemployment Benefits.* The Company also performed the impairment tests of all associated assets with reference to the guidance under ASC 330, *Inventory,* ASC 360, *Property, Plant and Equipment* and ASC 350, *Intangibles - Goodwill and Other.* The wind down charges and impairments are primarily recorded in the Company's "All Others" category and the APS reportable segment. We plan to fund the cash costs through existing cash balances.

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**KULICKE AND SOFFA INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS** 

**Unaudited (continued)**

The following table summarizes the charges resulting from the intended cessation of the EA equipment business.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three months ended June 28, 2025 | Three months ended June 28, 2025 | Three months ended June 28, 2025 | Three months ended June 28, 2025 |
| | Cost of sales | Impairment charges | Selling, general and administrative | Total |
| Inventory write-down | $2662 | $— | $— | $2662 |
| Adverse purchase commitments | 614 |  |  | 614 |
|  | $3276 | $— | $— | $3276 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Nine months ended June 28, 2025 | Nine months ended June 28, 2025 | Nine months ended June 28, 2025 | Nine months ended June 28, 2025 |
| | Cost of sales | Impairment charges | Selling, general and administrative | Total |
| Inventory write-down | $31581 | $— | $— | $31581 |
| Impairment charges related to goodwill and intangible assets |  | 34870 |  | 34870 |
| Impairment charges relating to long-lived assets |  | 4947 |  | 4947 |
| Employee termination benefits |  |  | 8180 | 8180 |
| Adverse purchase commitments | 10278 |  |  | 10278 |
|  | $41859 | $39817 | $8180 | $89856 |

---

*Inventory write-down*

In determining the value of our inventory, we consider indicators that net realizable value may be lower than cost based upon projections about future consumption, and market conditions. For the three and nine months ended June 28, 2025, we recorded a write-down to inventory totaling $2.7 million and $31.6 million with a corresponding increase to cost of sales in our consolidated condensed financial statements for the three and nine months ended June 28, 2025. See Note 2: Balance Sheet Components for inventory balances.

*Impairment charges relating to goodwill and intangible assets*

In accordance with the guidance under ASC 350, the Company performed a qualitative assessment as the intended cessation of the EA equipment business was a triggering event. Accordingly, the Company performed a quantitative impairment test and estimated the fair value of each reporting unit to be less than its carrying value. During the nine months ended June 28, 2025, we recorded a full impairment charge of $19.2 million related to goodwill, and $15.7 million related to the intangible assets reported within the APS reportable segment and "All Others" category. See Note 3: Goodwill and Intangible Assets for more details.

*Impairment charges relating to long-lived assets*

During the nine months ended June 28, 2025, we recorded a full impairment of the long-lived assets, resulting in an impairment charge of $1.4 million related to property, plant and equipment and $3.6 million related to the ROU assets.

*Employee termination benefits*

During the nine months ended June 28, 2025, in connection with the intended cessation of the EA equipment business and in accordance with ASC 712, the Company accrued for costs amounting to $8.2 million pertaining to the ongoing employee benefit arrangements. The costs were recorded within "Selling, general and administrative" in the Consolidated Statement of Operations, and are expected to be paid when wind-down activities are completed.

The Company also expects to incur additional employee termination benefits pertaining to one-time benefit arrangements in accordance with ASC 420. We expect to record between approximately $3.0 million and $5.0 million of these costs throughout the completion of the wind-down period.

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**KULICKE AND SOFFA INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS** 

**Unaudited (continued)**

*Adverse purchase commitments*

During the three and nine months ended June 28, 2025, the Company accrued for a loss of $0.6 million and $10.3 million that is expected to arise from firm, non-cancelable and unhedged commitments for the future purchase of inventory items in accordance with ASC 330. The costs were recorded within "Cost of Sales" in the Consolidated Statement of Operations.

*Contract termination charges and other associated costs*

Contract termination charges primarily relate to the costs expected to be incurred to terminate a contract before the end of its term in accordance with ASC 420. The Company expects to record between approximately $3.0 million and $5.0 million throughout the completion of the wind-down period.

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

**Forward-Looking Statements**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• our ability to successfully carry out the intended cessation of our Electronics Assembly ("EA") equipment business, including delays or other problems arising from regulatory or judicial review of the activities concerning the intended cessation;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• our ability to achieve expected organizational efficiencies after the successful cessation of our EA equipment business;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• risks arising from changes or uncertainties in trade policies, including the imposition of new, reciprocal or increases in existing tariffs or other restrictive trade measures, affecting supply chain costs, product pricing and customer demand;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• our expectations regarding the potential impacts on our business of actual or potential inflationary pressures, interest rate and risk premium adjustments, falling consumer sentiment, or economic recession caused, directly or indirectly, by the ongoing tensions in the Middle East, the prolonged Ukraine/Russia conflict, the worsening trade relationship between the U.S. and the world, geopolitical tensions and other macroeconomic factors;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• our expectations regarding supply chain disruptions caused, directly or indirectly, by various macroeconomic events, including increased tariffs, geopolitical tensions, catastrophic events resulting from climate change or other natural disasters and other factors;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• our expectations regarding our effective tax rate and our unrecognized tax benefit;* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• our ability to operate our business in accordance with our business plan;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• our ability to adequately protect our trade secrets and intellectual property rights from misappropriation;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• our expectations regarding our success in integrating companies we may acquire with our business, and our ability to continue to acquire or divest companies;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• risks inherent in doing business on an international level, including currency risks, regulatory requirements, systems and cybersecurity risks, political risks, evolving trade and export restrictions and other trade-related barriers;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• disruptions, breaches or failures in our information technology systems and network infrastructures;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• projected growth rates in the overall semiconductor industry, the semiconductor assembly equipment market, and the market for semiconductor packaging materials;* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *projected demand for our products and services; and* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• unexpected delays and difficulties in executing against our environmental, climate, diversity and inclusion goals or such other environmental, social and governance ("ESG") targets and commitments.*

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*Generally, words such as "may," "will," "should," "could," "anticipate," "expect," "intend," "estimate," "plan," "continue," "goal" and "believe," or the negative of or other variations on these and other similar expressions identify forward-looking statements. These forward-looking statements are made only as of the date of this filing. We do not undertake to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.*

*Forward-looking statements are based on current expectations and involve risks and uncertainties. Our future results could differ significantly from those expressed or implied by our forward-looking statements. These risks and uncertainties include, without limitation, those described below and in our Annual Report on Form 10-K for the fiscal year ended September 28, 2024 (our "2024 Annual Report") and our other reports filed from time to time with the Securities and Exchange Commission. This discussion should be read in conjunction with the Consolidated Condensed Financial Statements and Notes included in this Quarterly Report, as well as our audited financial statements included in our 2024 Annual Report.*

*We operate in a rapidly changing and competitive environment. New risks emerge from time to time and it is not possible for us to predict all risks that may affect us. Future events and actual results, performance and achievements could differ materially from those set forth in, contemplated by or underlying the forward-looking statements, which speak only as of the date on which they were made. Except as required by law, we assume no obligation to update or revise any forward-looking statement to reflect actual results or changes in, or additions to, the factors affecting such forward-looking statement. Given those risks and uncertainties, investors should not place undue reliance on forward-looking statements as predictions of actual results.*

**OVERVIEW**

Kulicke and Soffa Industries, Inc. ("K&S," "we," "us," "our," or the "Company") is a global leader in semiconductor assembly technology, advancing device performance across automotive, compute, industrial, memory and communications markets. Founded on innovation in 1951, K&S is uniquely positioned to overcome increasingly dynamic process challenges – creating and delivering long-term value by aligning technology with opportunity.

We design, develop, manufacture and sell capital equipment and consumables and provide services used to assemble semiconductor and electronic devices, such as integrated circuits, power discretes, light-emitting diode ("LEDs"), advanced displays and sensors. We also service, maintain, repair and upgrade our equipment and sell consumable aftermarket solutions and services for our and our peer companies' equipment. Our customers primarily consist of 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. Accordingly, we invest in research and engineering projects intended to expand our market access and enhance our leadership position in semiconductor, electronics and display assembly. We also remain focused on enhancing our value to customers through higher productivity systems, more autonomous capabilities and continuous improvement and optimization of our operational costs. Delivering new levels of value to our customers is a critically important goal.

Our Ball Bonding Equipment, Wedge Bonding Equipment and Advanced Solutions reportable segments engage in the design, development, manufacture and sale of ball bonding equipment, wafer level bonding equipment, wedge and wedge-related bonding equipment, certain advanced display, die-attach and thermocompression systems and solutions to IDMs, OSATs, foundry service providers, and other electronics manufacturers and automotive electronics suppliers.

Our APS segment engages in the design, development, manufacture and sale of a variety of tools, spares and services for our equipment. For example, we manufacture capillaries, blades, wedge bonder consumables and other spare parts which complements our equipment and to support a broader range of semiconductor packaging applications. We also provide equipment repair, post-sale support, maintenance and servicing, training services, refurbishment and upgrades for our equipment.

All other operating segments that do not meet the quantitative threshold to be disclosed as a separate reportable segment have been grouped within an "All Others" category. This group is reflective of the results of the Company from the design, development, manufacture and sale of certain advanced display, advanced dispense, electronics assembly, and die-attach systems and solutions.

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**Business Environment**

The semiconductor business environment is highly volatile and is driven by internal dynamics, both cyclical and seasonal, in addition to macroeconomic forces. Over the long term, semiconductor consumption has historically grown, and is forecasted to continue to grow. This growth is driven, in part, by regular advances in device performance and by price declines that result from improvements in manufacturing technology. In order to exploit these trends, semiconductor manufacturers, both IDMs and OSATs, periodically invest aggressively in the latest generation capital equipment. This buying pattern often leads to periods of excess supply and reduced capital spending — the so-called semiconductor cycle. Within this broad semiconductor cycle there are also, generally weaker, seasonal effects that are specifically tied to annual, end-consumer purchasing patterns. Typically, semiconductor manufacturers prepare for heightened demand by adding or replacing equipment capacity by the end of the September quarter. Occasionally, this results in subsequent reductions in demand during the December quarter. This annual seasonality can be overshadowed by effects of the broader semiconductor cycle. Macroeconomic factors also affect the industry, primarily through their effect on business and consumer demand for electronic devices, as well as other products that have significant electronic content such as automobiles, white goods, and telecommunication equipment. There can be no assurances regarding levels of demand for our products and we believe historic industry-wide volatility will persist.

From time to time, our customers may request that we deliver our products to countries where they own or operate production facilities or to countries where they utilize third-party subcontractors or warehouses as part of their supply chain. For example, customers headquartered in the U.S. may require us to deliver our products to their back-end production facilities in China. Our customer base in the Asia/Pacific region has become more geographically concentrated over time as a result of general economic and industry conditions and trends. Approximately 92.1% and 92.3% of our net revenue for the three months ended June 28, 2025 and June 29, 2024, respectively, were for shipments to customer locations outside of the U.S., primarily in the Asia/Pacific region. Approximately 60.0% and 54.7% of our net revenue for the three months ended June 28, 2025 and June 29, 2024, respectively, were for shipments to customers headquartered in China.

Similarly, approximately 88.4% and 89.5% of our net revenue for the nine months ended June 28, 2025 and June 29, 2024, respectively, were for shipments to customer locations outside of the U.S., primarily in the Asia/Pacific region. Approximately 51.3% and 49.9% of our net revenue for the nine months ended June 28, 2025 and June 29, 2024, respectively, were for shipments to customers headquartered in China.

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. 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, including the imposition of new tariffs or increases in existing tariffs and general inflationary considerations. 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.

The U.S. and several other countries have levied tariffs on certain goods and sectors and have introduced other trade restrictions resulting in substantial uncertainties in the semiconductor, LED, memory and automotive markets.

Our Ball Bonding Equipment, Wedge Bonding Equipment and Advanced Solutions reportable segments, as well as the remaining operating segments in the "All Others" category, are primarily affected by the industry's internal cyclical and seasonal dynamics in addition to broader macroeconomic factors that can positively or negatively affect our financial performance. The sales mix of IDM and OSAT customers in any period also impacts financial performance, as changes in this mix can affect our products' average selling prices and gross margins due to differences in volume purchases and machine configurations required by each customer type.

Our APS reportable 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.

We continue to position our business to leverage our research and development leadership and innovation and to focus our efforts on mitigating volatility, improving profitability and ensuring longer-term growth. We remain focused on operational excellence, expanding our product offerings through continuous research and development or acquisitions and managing our business efficiently throughout the business cycles. However, our visibility into future demand is generally limited, forecasting is difficult, and we generally experience typical industry seasonality.

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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 June 28, 2025, our total cash, cash equivalents and short-term investments were $556.5 million, a $20.7 million decrease from the prior fiscal year end. 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 "Liquidity and Capital Resources" for more information.

**Key Events in Fiscal 2025 to Date**

***Israel-Iran War***

The Israel–Iran war began on June 13, 2025 with Israel's preemptive attacks on Iran's nuclear facilities, military sites, and other infrastructure. Iran retaliated with missile attacks on Israeli cities, including Haifa and Tel Aviv, and military targets. The conflict also drew in the United States, which defended Israel and later conducted its own precision strikes on Iranian nuclear sites. A ceasefire was reached on June 24, 2025.

The 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 interruptions have been noted at our Israeli facility. Trade routes remain open, and our suppliers and business partners in Israel remain operational. Furthermore, disruption to our workforce has been minimal.

Given that any further escalation or other hostilities cannot be excluded, we continue to monitor the situation and remain ready to activate our Business Continuity Plan ("BCP") if necessary.

***Intended Cessation of EA Equipment Business***

On March 25, 2025, the Board of Directors of the Company approved a strategic plan related to the intended cessation of its Electronics Assembly ("EA") equipment business. The plan includes an intention to wind down the EA equipment business in an effort to prioritize core semiconductor assembly business opportunities and enhance overall through-cycle financial performance. The intended cessation of the EA equipment business is subject to a consultation process with the applicable works council and union representatives, which the Company has initiated in the third fiscal quarter of 2025. The wind down activities are ongoing and are expected to be substantially completed by the first half of fiscal 2026, after which there will be some service support activities to serve out the remaining customer obligations. For additional information, see Note 16: Cessation of Business in our Notes to the Consolidated Condensed Financial Statements.

***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"), previously referred to as Project W. As previously disclosed in fiscal 2024, in connection with the Customer's strategic review of its business, the Customer informed the Company that it cancelled the Project.

On November 4, 2024, the Company and the Customer entered into a written agreement pursuant to which the Customer had agreed to reimburse the Company for certain costs and expenses that the Company incurred in connection with the Project. Pursuant to the agreement, the Customer agreed to pay $86.2 million to the Company. In the quarter ended December 28, 2024, $15.1 million was included within "Net Revenue" for delivered products and the remaining $71.1 million was included in "Gain relating to cessation of business" in the Consolidated Condensed Statements of Operations. In the previous quarter ended March 29, 2025, the Company has received the reimbursement amount from the Customer.

***Macroeconomic Headwinds***

The cost of logistics remains high as a result of macroeconomic conditions, inflation and labor shortages across layers of the supply chain. The Company's management continues to monitor 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 or between Ukraine and Russia, as well as the imposition of new, increased or retaliatory tariffs.

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The ongoing tensions in the Middle East, including the Israel-Iran war, and the prolonged Ukraine/Russia conflict have not had a material impact on our financial condition and operating results in fiscal 2025 to date. We believe that our existing cash, cash equivalents, short-term investments, 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 Quarterly Report. However, this is a highly dynamic situation. As the macroeconomic situation remains highly volatile and the geopolitical situation remains uncertain, there is uncertainty surrounding the operations of our manufacturing locations, our business, our expectations regarding future demand or supply conditions, our near- and long-term liquidity and our financial condition. Consequentially, our operating results could deteriorate.

During fiscal years 2021 and 2022, semiconductor suppliers rapidly increased production output in response to increases in end-consumer demand. Concerns surrounding supply availability spurred defensive inventory purchases, which led to a heightened demand for our products.

The current macroeconomic conditions and declining consumer sentiment 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.

Due to general inflationary pressures, existing and future tariffs, 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. 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 a description of the risks to our business arising from or relating to the general macroeconomic conditions, please see Part I, Item 1A, "Risk Factors" of our 2024 Annual Report.

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**RESULTS OF OPERATIONS**

The following tables reflect our income from operations for the three and nine months ended June 28, 2025 and June 29, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three months ended | Three months ended | | |
| *(dollar amounts in thousands)* | June 28, 2025 | June 29, 2024 | $ Change | % Change |
| Net revenue | $148413 | $181650 | $(33237) | (18.3)% |
| Cost of sales | 79170 | 96920 | (17750) | (18.3)% |
| Gross profit | 69243 | 84730 | (15487) | (18.3)% |
| Selling, general and administrative | 39596 | 38516 | 1080 | 2.8% |
| Research and development | 35741 | 37937 | (2196) | (5.8)% |
| Operating expenses | 75337 | 76453 | (1116) | (1.5)% |
| (Loss)/Income from operations | $(6094) | $8277 | $(14371) | (173.6)% |

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| | | | | |
|:---|:---|:---|:---|:---|
| | Nine months ended | Nine months ended | | |
| *(dollar amounts in thousands)* | June 28, 2025 | June 29, 2024 | $ Change | % Change |
| Net revenue | $476523 | $524913 | $(48390) | (9.2)% |
| Cost of sales | 279812 | 343816 | (64004) | (18.6)% |
| Gross profit | 196711 | 181097 | 15614 | 8.6% |
| Selling, general and administrative | 126224 | 119359 | 6865 | 5.8% |
| Research and development | 110769 | 112451 | (1682) | (1.5)% |
| Impairment charges | 39817 | 44472 | (4655) | (10.5)% |
| Gain relating to cessation of business | (75987) |  | (75987) | N/A |
| Operating expenses | 200823 | 276282 | (75459) | (27.3)% |
| Loss from operations | $(4112) | $(95185) | $91073 | 95.7% |

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***Net Revenue***

Our net revenue for the three and nine months ended June 28, 2025 decreased as compared to our net revenue for the three and nine months ended June 29, 2024. The decrease in net revenue is primarily due to lower volume in Ball Bonding Equipment, APS and All Others and partially offset by the higher volume in Wedge Bonding Equipment and Advanced Solutions, as further outlined in the following tables presented immediately below.

The following tables reflect net revenue for the three and nine months ended June 28, 2025 and June 29, 2024:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | Three months ended | Three months ended | Three months ended | Three months ended | | |
| *(dollar amounts in thousands)* | June 28, 2025 | June 28, 2025 | June 29, 2024 | June 29, 2024 | $ Change | % Change |
|  | Net Revenue | % of total net revenue | Net Revenue | % of total net revenue |  |  |
| Ball Bonding Equipment | $75990 | 51.2% | $93254 | 51.3% | $(17264) | (18.5)% |
| Wedge Bonding Equipment | 22126 | 14.9% | 26144 | 14.4% | (4018) | (15.4)% |
| Advanced Solutions | 10811 | 7.3% | 20953 | 11.5% | (10142) | (48.4)% |
| APS | 36448 | 24.6% | 38059 | 21.0% | (1611) | (4.2)% |
| All Others | 3038 | 2.0% | 3240 | 1.8% | (202) | (6.2)% |
| Total net revenue | $148413 | 100.0% | $181650 | 100.0% | $(33237) | (18.3)% |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | Nine months ended | Nine months ended | Nine months ended | Nine months ended | | |
| *(dollar amounts in thousands)* | June 28, 2025 | June 28, 2025 | June 29, 2024 | June 29, 2024 | $ Change | % Change |
|  | Net Revenue | % of total net revenue | Net Revenue | % of total net revenue |  |  |
| Ball Bonding Equipment | $201957 | 42.4% | $261432 | 49.8% | $(59475) | (22.7)% |
| Wedge Bonding Equipment | 90546 | 19.0% | 72364 | 13.8% | 18182 | 25.1% |
| Advanced Solutions | 56627 | 11.9% | 46401 | 8.8% | 10226 | 22.0% |
| APS | 113354 | 23.8% | 119967 | 22.9% | (6613) | (5.5)% |
| All Others | 14039 | 2.9% | 24749 | 4.7% | (10710) | (43.3)% |
| Total net revenue | $476523 | 100.0% | $524913 | 100.0% | $(48390) | (9.2)% |

---

*Ball Bonding Equipment*

For the three and nine months ended June 28, 2025, the decrease in Ball Bonding Equipment net revenue as compared to the prior year period was primarily due to lower volume of customer purchases in the general semiconductor and memory end markets as a result of relatively stable factory utilization levels in certain regions.

*Wedge Bonding Equipment*

For the three months ended June 28, 2025, the decrease in Wedge Bonding Equipment net revenue as compared to the prior year period was primarily due to lower volume of customer purchases primarily in the automotive markets and partially offset by higher customer purchase in the general semiconductor.

For the nine months ended June 28, 2025, the increase in Wedge Bonding Equipment net revenue as compared to the prior year period was primarily due to higher volume of customer purchases primarily in the general semiconductor and partially offset by lower customer purchases in the automotive markets.

*Advanced Solutions* 

For the three months ended June 28, 2025, the decrease in Advanced Solutions net revenue as compared to the prior year period was primarily due to a lower volume of customer purchases in the general semiconductor end markets.

For the nine months ended June 28, 2025, the increase in Advanced Solutions net revenue as compared to the prior year period was primarily due to a higher volume of customer purchases in LED which is included in the industrial end market and partially offset by lower customer purchases in general semiconductor end market.

*APS*

For the three and nine months ended June 28, 2025, the decrease in APS net revenue as compared to the prior year period was due to a lower volume of customer purchases primarily in spares and services, and unfavorable pricing from bonding tools.

*All Others*

For the three and nine months ended June 28, 2025, the decrease in All Others net revenue as compared to the prior year period was primarily due to a lower volume of customer purchases in the general semiconductor end market.

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<u>[Table of Conten](#i187efbb5d82945e694cc3c3b11a8257e_7)[t](#i187efbb5d82945e694cc3c3b11a8257e_7)[s](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

***Gross Profit Margin***

The following tables reflect gross profit margin as a percentage of net revenue by reportable segments for the three and nine months ended June 28, 2025 and June 29, 2024:

---

| | | | |
|:---|:---|:---|:---|
| | Three months ended | Three months ended | |
| | June 28, 2025 | June 29, 2024 | Basis Point<br>Change |
| Ball Bonding Equipment | 50.8% | 46.3% | 450 |
| Wedge Bonding Equipment | 43.2% | 44.3% | (110) |
| Advanced Solutions | 46.8% | 42.7% | 410 |
| APS | 43.4% | 54.5% | (1110) |
| All Others | 6.9% | 9.5% | (260) |
| Total gross profit margin | 46.7% | 46.6% | 10 |

---

---

| | | | |
|:---|:---|:---|:---|
| | Nine months ended | Nine months ended | |
| | June 28, 2025 | June 29, 2024 | Basis Point<br>Change |
| Ball Bonding Equipment | 50.0% | 47.0% | 300 |
| Wedge Bonding Equipment | 44.2% | 48.5% | (430) |
| Advanced Solutions | 65.7% | (97.8)% | 16350 |
| APS | 48.6% | 55.3% | (670) |
| All Others | (260.4)% | 8.5% | (26890) |
| Total gross profit margin | 41.3% | 34.5% | 680 |

---

*Ball Bonding Equipment*

For the three and nine months ended June 28, 2025, the increase in Ball Bonding Equipment gross profit margin as compared to the prior year period was primarily driven by a favorable product mix, including lower sales of lower margin products and a shift in customer mix, including higher sales to customers where we achieve higher average margins.

*Wedge Bonding Equipment*

For the three and nine months ended June 28, 2025, the decrease in Wedge Bonding Equipment gross profit margin as compared to the prior year period was primarily driven by a less favorable product mix, including higher sales of lower margin products and a shift in customer mix, including higher sales to customers where we achieve lower average margins.

*Advanced Solutions*

For the three months ended June 28, 2025, the increase in Advanced Solutions gross profit margin as compared to the prior year period was primarily due to favorable product mix, including higher sales of higher margin products.

For the nine months ended June 28, 2025, the increase in Advanced Solutions gross profit margin as compared to the prior year period was primarily due to the inventory write-down charges in the prior year as a result of the cancellation of Project W and favorable product mix, including higher sales of higher margin products.

*APS*

For the three and nine months ended June 28, 2025, the decrease in APS gross profit margin as compared to the prior year period was primarily driven by lower volume from spares and services, and unfavorable pricing from bonding tools, and the spares related inventory write-down charges incurred as a result of the intended cessation of the EA equipment business.

*All others*

For the three and nine months ended June 28, 2025, the decrease in gross profit margin for the "All Others" category as compared to the prior year period was primarily driven by the inventory write-down charges incurred as a result of the intended cessation of the EA equipment business.

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<u>[Table of Conten](#i187efbb5d82945e694cc3c3b11a8257e_7)[t](#i187efbb5d82945e694cc3c3b11a8257e_7)[s](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

***Operating Expenses***

The following tables reflect operating expenses for the three and nine months ended June 28, 2025 and June 29, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three months ended | Three months ended | | |
| *(dollar amounts in thousands)* | June 28, 2025 | June 29, 2024 | $ Change | % Change |
| Selling, general and administrative | $39596 | $38516 | $1080 | 2.8% |
| Research and development | 35741 | 37937 | (2196) | (5.8)% |
| Total | $75337 | $76453 | $(1116) | (1.5)% |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Nine months ended | Nine months ended | | |
| *(dollar amounts in thousands)* | June 28, 2025 | June 29, 2024 | $ Change | % Change |
| Selling, general and administrative | $126224 | $119359 | $6865 | 5.8% |
| Research and development | 110769 | 112451 | (1682) | (1.5)% |
| Gain relating to cessation of business | (75987) |  | (75987) | N/A |
| Impairment charges | 39817 | 44472 | (4655) | (10.5)% |
| Total | $200823 | $276282 | $(75459) | (27.3)% |

---

*Selling, General and Administrative ("SG&A")*

For the three months ended June 28, 2025, the higher SG&A expenses as compared to the prior year period were primarily due to $1.0 million net unfavourable variance in foreign exchange and $0.5 million higher staff cost. This was partially offset by $0.5 million lower professional services .

For the nine months ended June 28, 2025, the higher SG&A expenses as compared to the prior year period were primarily due to $7.2 million higher severance expenses and $2.3 million higher staff cost. This was partially offset by $2.6 million net favourable variance in foreign exchange.

*Research and Development ("R&D")*

For the three months ended June 28, 2025, the lower R&D expenses as compared to the prior year period were primarily due to $1.5 million lower prototype materials and $0.6 million lower staff cost.

For the nine months ended June 28, 2025, the lower R&D expenses as compared to the prior year period were primarily due to $4.0 million lower prototype materials. This was partially offset by $2.8 million higher staff cost.

*Gain relating to cessation of business*

For the nine months ended June 28, 2025, the gain relating to cessation of business was primarily due to the $71.1 million reimbursement for certain costs and expenses from the cancellation of Project W, a $3.2 million gain on the disposal of a subsidiary and a $1.7 million gain from the supplier settlement.

*Impairment Charges*

For the nine months ended June 28, 2025, the impairment charges in the current period were due to $39.8 million impairment charges on long-lived assets, intangible assets and goodwill related to the intended cessation of the EA equipment business. The impairment charges in the prior year period were due to $44.5 million impairment charges on long-lived assets related to the cancellation of Project W.

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<u>[Table of Conten](#i187efbb5d82945e694cc3c3b11a8257e_7)[t](#i187efbb5d82945e694cc3c3b11a8257e_7)[s](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

***Loss from Operations***

The changes in loss from operations for the respective segments are due to the changes in net revenue, gross profit margin and operating expenses as explained in the respective sections above.

The following tables reflect loss from operations by reportable segments for the three and nine months ended June 28, 2025 and June 29, 2024.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three months ended | Three months ended | | |
| *(dollar amounts in thousands)* | June 28, 2025 | June 29, 2024 | $ Change | % Change |
| Ball Bonding Equipment | $23480 | $27751 | $(4271) | (15.4)% |
| Wedge Bonding Equipment | 2065 | 4149 | (2084) | (50.2)% |
| Advanced Solutions | (10692) | (9785) | (907) | (9.3)% |
| APS | 7346 | 11443 | (4097) | (35.8)% |
| All Others | (6179) | (8317) | 2138 | 25.7% |
| Corporate Expenses | (22114) | (16964) | (5150) | (30.4)% |
| Total (loss)/income from operations | $(6094) | $8277 | $(14371) | (173.6)% |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Nine months ended | Nine months ended | | |
| *(dollar amounts in thousands)* | June 28, 2025 | June 29, 2024 | $ Change | % Change |
| Ball Bonding Equipment | $56203 | $80617 | $(24414) | (30.3)% |
| Wedge Bonding Equipment | 17681 | 12696 | 4985 | 39.3% |
| Advanced Solutions | 61753 | (140201) | 201954 | 144.0% |
| APS | 17304 | 36275 | (18971) | (52.3)% |
| All Others | (84637) | (25945) | (58692) | (226.2)% |
| Corporate Expenses | (72416) | (58627) | (13789) | (23.5)% |
| Total loss from operations | $(4112) | $(95185) | $91073 | 95.7% |

---

***Interest Income and Expense***

The following tables reflect interest income and interest expense for the three and nine months ended June 28, 2025 and June 29, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three months ended | Three months ended | | |
| *(dollar amounts in thousands)* | June 28, 2025 | June 29, 2024 | $ Change | % Change |
| Interest income | $6008 | $8060 | $(2052) | (25.5)% |
| Interest expense | $(32) | $(20) | $(12) | (60.0)% |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Nine months ended | Nine months ended | | |
| *(dollar amounts in thousands)* | June 28, 2025 | June 29, 2024 | $ Change | % Change |
| Interest income | $17982 | $26807 | $(8825) | (32.9)% |
| Interest expense | $(95) | $(60) | $(35) | (58.3)% |

---

*Interest income*

For the three and nine months ended June 28, 2025, interest income decreased as compared to the prior year period primarily due to a lower weighted interest rate on cash, cash equivalents and short-term investments.

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<u>[Table of Conten](#i187efbb5d82945e694cc3c3b11a8257e_7)[t](#i187efbb5d82945e694cc3c3b11a8257e_7)[s](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

***Provision for Income Taxes***

The following table reflects the provision for income taxes and the effective tax rate for the three and nine months ended June 28, 2025 and June 29, 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | Three months ended | Three months ended | Three months ended | Nine months ended | Nine months ended | Nine months ended |
| (dollar amounts in thousands) | June 28, 2025 | June 29, 2024 | Change | June 28, 2025 | June 29, 2024 | Change |
| Provision for income taxes | $3171 | $4053 | $(882) | $19941 | $12685 | $7256 |
| Effective tax rate | (2687.3)% | 24.8% | (2712.1)% | 144.8% | (18.5)% | 163.3% |

---

For the three and nine months ended June 28, 2025, as compared to the same period ended June 29, 2024, the change in provision for income taxes and effective tax rate was primarily due to the tax effects of the intended cessation of the Company's EA equipment business and the reimbursement from the cancellation of Project W which were recorded as discrete items during fiscal 2025 as well as the one-time charge for the cancellation of Project W and the increase in valuation allowance recorded against certain deferred tax assets, which were recorded as discrete items during fiscal 2024.

For the three and nine months ended June 28, 2025, the effective tax rate is different than the U.S. federal statutory tax rate primarily due to earnings of foreign subsidiaries subject to tax at different rates than the U.S., tax incentives, tax credits, change in valuation allowances, the impact of global intangible low-taxed income, and the tax impact of the discrete items noted above.

**LIQUIDITY AND CAPITAL RESOURCES**

The following table reflects total cash, cash equivalents, and short-term investments as of June 28, 2025 and September 28, 2024:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | As of | As of | As of | As of | |
| *(dollar amounts in thousands)* | June 28, 2025 | June 28, 2025 | September 28, 2024 | September 28, 2024 | $ Change |
| Cash and cash equivalents | $| 246481 | $| 227147 | $19334 |
| Short-term investments | 310000 | 310000 | 350000 | 350000 | (40000) |
| Total cash, cash equivalents, and short-term investments | $| 556481 | $| 577147 | $(20666) |
| Percentage of total assets | 49.5% | 49.5% | 46.5% | 46.5% |  |

---

The following table reflects a summary of the Consolidated Condensed Statements of Cash Flow information for the nine months ended June 28, 2025 and June 29, 2024:

---

| | | |
|:---|:---|:---|
| | Nine months ended | Nine months ended |
| *(in thousands)* | June 28, 2025 | June 29, 2024 |
| Net cash provided by (used in) operating activities | $106159 | $(582) |
| Net cash provided by (used in) investing activities | 26161 | (20518) |
| Net cash used in financing activities | (114564) | (141729) |
| Effect of exchange rate changes on cash and cash equivalents | 1578 | 344 |
| Changes in cash and cash equivalents | $19334 | $(162485) |
| Cash and cash equivalents, beginning of period | 227147 | 529402 |
| Cash and cash equivalents, end of period | $246481 | $366917 |

---

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<u>[Table of Conten](#i187efbb5d82945e694cc3c3b11a8257e_7)[t](#i187efbb5d82945e694cc3c3b11a8257e_7)[s](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

**Nine months ended June 28, 2025** 

The increase in net cash provided by operating activities was primarily due to non-cash adjustments to net loss of $105.8 million and a net favourable change in operating assets and liabilities of $6.5 million, partially offset by a net loss of $6.2 million. The non-cash adjustments were primarily due to impairment charges of $39.8 million and an inventory write-down of $31.6 million as a result of the intended cessation of the EA equipment business. The net change in operating assets and liabilities was primarily driven by a decrease in accounts and other receivable of $20.0 million, a decrease in prepaid expenses and other current assets of $4.7 million, and a net increase in accounts payable, accrued expenses and other liabilities of $10.5 million. This was partially offset by an increase in inventories of $21.4 million after excluding the impact of the inventory write-down as shown above, and a decrease in income tax payable of $7.5 million.

The decrease in accounts and other receivable in the nine months ended June 28, 2025 was mainly due to lower sales for the period. The decrease in prepaid expenses and other current assets was mainly due to the receipt of tax refunds. The net increase in accounts payable, accrued expenses and other liabilities was primarily due to higher accrued employee termination benefits and adverse purchase commitments, partially offset by overall lower purchases. The increase in inventories was due to the buildup of long lead time materials to fulfill certain customer purchase orders. The decrease in income tax payable was primarily due to lower profitability which included the net impact from the intended cessation of EA equipment business and reimbursement from the cancellation of Project W which were treated as discrete items.

Net cash provided by investing activities was due to net maturity of short-term investments of $40.0 million and net cash received from the disposal of a subsidiary of $2.5 million, partially offset by capital expenditures of $14.2 million and investment in a private equity fund of $2.3 million.

Net cash used in financing activities was primarily due to common stock repurchases of $80.1 million and dividend payments of $32.7 million.

**Nine months ended June 29, 2024**

The increase in net cash used in operating activities was primarily due to a net loss of $81.1 million and a net unfavourable change in operating assets and liabilities of $87.8 million, partially offset by non-cash adjustments to net income of $168.3 million. 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. The net change in operating assets and liabilities was primarily driven by an increase in accounts and other receivable of $42.4 million, an increase in inventories of $27.0 million after excluding the impact of the inventory write-down as shown above, a decrease in income tax payable of $23.1 million and a decrease in accounts payable and accrued expenses and other current liabilities of $7.8 million. This was partially offset by a decrease in prepaid expenses and other current assets of $18.4 million.

The increase in accounts and other receivable in the nine months ended June 29, 2024 was mainly due to the timing of payments due. The increase in inventories was due to the buildup of long lead time materials to fulfill certain customer purchase orders. The decrease in income tax payable was primarily due to lower profitability. The decrease in accounts payable and accrued expenses and other current liabilities was primarily due to the payment of back loaded purchases and lower accrued employee compensation. The decrease in prepaid expenses was mainly due the transfer of contract assets to net account receivables.

Net cash used in investing activities was due to net purchase of short-term investments of $5.0 million, capital expenditures of $13.7 million and investment in a private equity fund of $1.8 million.

Net cash used in financing activities was primarily due to common stock repurchases of $108.1 million and dividend payments of $33.2 million.

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<u>[Table of Conten](#i187efbb5d82945e694cc3c3b11a8257e_7)[t](#i187efbb5d82945e694cc3c3b11a8257e_7)[s](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

**Fiscal 2025 Liquidity and Capital Resource Outlook**

We expect our aggregate fiscal 2025 capital expenditures to be between approximately $8.0 million and $12.0 million, of which approximately $7.6 million has been incurred through the third quarter. The actual amounts for 2025 will vary depending on market conditions. Expenditures are anticipated to be primarily for research and development projects, enhancements to our manufacturing operations, improvements to our information technology security, implementation of an enterprise resource planning system and leasehold improvements for our facilities. Our ability to make these expenditures will depend, in part, on our future cash flows, which are determined by our future operating performance and, therefore, subject to prevailing macroeconomic conditions, including actual or potential inflationary pressures, supply chain challenges, geopolitical tensions and other factors, some of which are beyond our control.

As of June 28, 2025 and September 28, 2024, approximately $413.6 million and $302.6 million of cash, cash equivalents, and short-term investments, respectively, were held by the Company's foreign subsidiaries, with a large portion of the cash amounts expected to be available for use in the U.S. without incurring additional U.S. income tax. The 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 anticipated to be funded primarily by cash on hand and cash generated from operating activities. We believe these sources of cash and liquidity are sufficient to meet our additional liquidity needs for the foreseeable future, including payment of dividends, share repurchases and income taxes.

We believe that our existing cash, cash equivalents, short-term investments, and anticipated cash flows from operations will be sufficient to meet our liquidity and capital requirements, notwithstanding the macroeconomic headwinds, for at least the next twelve months and beyond. Our liquidity is affected by many factors, some based on normal operations of our business and others related to macroeconomic conditions including actual or potential inflationary pressures, industry-related uncertainties, and effects arising from the ongoing tensions in the Middle East and the prolonged Ukraine/Russia conflict, which we cannot predict. We also cannot predict economic conditions or industry downturns or the timing, strength or duration of recoveries. We intend to continue to use our cash for working capital needs and for general corporate purposes.

In this unprecedented macroeconomic environment, we may seek, as we believe appropriate, additional debt or equity financing that would provide capital for general corporate purposes, working capital funding, additional liquidity needs or to fund future growth opportunities, including possible acquisitions. The timing and amount of potential capital requirements cannot be determined at this time and will depend on a number of factors, including the actual and projected demand for our products, semiconductor and semiconductor capital equipment industry conditions, competitive factors, the condition of financial markets and the global economic situation.

***Share Repurchase Program***

On August 15, 2017, the Company's Board of Directors authorized a program to repurchase up to $100 million of the Company's common stock on or before August 1, 2020. In 2018, 2019, 2020 and 2022, the Board of Directors increased the share repurchase authorization to $200 million, $300 million, $400 million and $800 million, respectively, and extended its duration through August 1, 2025 (the "Prior Program").

During the three months ended December 28, 2024, the Company repurchased a total of approximately 657.0 thousand shares of common stock under the Prior Program at a cost of approximately $30.3 million. On December 2, 2024, the Company announced that it has completed share repurchases under the Prior Program.

Additionally, as announced on November 13, 2024, the Board of Directors authorized a new share repurchase program to repurchase up to $300 million of the Company's common stock (the "New Program"). On December 2, 2024, the Company entered into a new written trading plan under Rule 10b5-1 of the Exchange Act, to facilitate repurchases under the New Program. The plan permits the purchase of up to approximately $300 million of the Company's common stock from December 2, 2024 through December 2, 2029. The New 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 New 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 New Program depend on market conditions as well as corporate and regulatory considerations.

------

<u>[Table of Conten](#i187efbb5d82945e694cc3c3b11a8257e_7)[t](#i187efbb5d82945e694cc3c3b11a8257e_7)[s](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

During the three and nine months ended June 28, 2025, the Company repurchased a total of approximately 668.0 thousand and 1,322.0 thousand shares of common stock under the New Program at a cost of approximately $21.6 million and $49.5 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 June 28, 2025, our remaining stock repurchase authorization under the New Program was approximately $250.5 million.

***Dividends***

On June 5, 2025, the Board of Directors declared a quarterly dividend of $0.205 per share of common stock. Dividends paid during the three and nine months ended June 28, 2025 totaled $10.9 million and $32.7 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.

**Other Obligations and Contingent Payments**

In accordance with U.S. GAAP, certain obligations and commitments are not required to be included in the Consolidated Condensed Balance Sheets and Statements of Operations. These obligations and commitments, while entered into in the normal course of business, may have a material impact on our liquidity and are disclosed in the table below.

As of June 28, 2025, the Company had deferred tax liabilities of $35.8 million and unrecognized tax benefits within the income taxes payable for uncertain tax positions of $20.0 million, inclusive of accrued interest on uncertain tax positions of $4.9 million, substantially all of which would affect our effective tax rate in the future, if recognized.

It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain unrecognized tax positions will increase or decrease during the next twelve months due to the expected lapse of statutes of limitation and / or settlements of tax examinations. Given the number of years and numerous matters that remain subject to examination in various tax jurisdictions, we cannot practicably estimate the timing or financial outcomes of these examinations and, therefore, these amounts are excluded from the amounts below.

The following table presents certain payments due by the Company under contractual and statutory obligations with minimum firm commitments as of June 28, 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | Payments due in | Payments due in | Payments due in | Payments due in |
| *(in thousands)* | Total | Less than 1 year | 1 - 3 years | 3 - 5 years | More than 5<br>years |
| Inventory purchase obligations <sup>(1)</sup> | $133373 | $26837 | $106536 | $— | $— |
| U.S. one-time transition tax payable <sup>(2)</sup><br>(reflected on our Consolidated Condensed Balance Sheets) | $11811 | 11811 |  |  |  |
| Total | $145184 | $38648 | $106536 | $— | $— |

---

(1)The Company orders inventory components in the normal course of its business. A portion of these orders are non-cancellable and some orders impose varying penalties and charges in the event of cancellation.

(2) Associated with the U.S. one-time transition tax on certain earnings and profits of our foreign subsidiaries in relation to the U.S. Tax Cuts and Job Act of 2017.

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<u>[Table of Conten](#i187efbb5d82945e694cc3c3b11a8257e_7)[t](#i187efbb5d82945e694cc3c3b11a8257e_7)[s](#i187efbb5d82945e694cc3c3b11a8257e_7)</u>

***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.

On June 6, 2025, the Company terminated the Facility Agreements with the Bank. As of the date of termination, there were no outstanding amounts under the Overdraft Facility. In addition, the Company did not incur any early termination penalties in connection with the termination of the Facility Agreements.

As of June 28, 2025, other than the bank guarantee disclosed in Note 9: Debt And Other Obligations in our Notes to Consolidated Condensed Financial Statements, we did not have any other off-balance sheet arrangements, such as contingent interests or obligations associated with variable interest entities.

**Item 3. - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

**Interest Rate Risk**

Our available-for-sale securities, if applicable, may consist of short-term investments in highly rated debt instruments of the U.S. Government and its agencies, financial institutions, and corporations. We continually monitor our exposure to changes in interest rates and credit ratings of issuers with respect to any available-for-sale securities and target an average life to maturity of less than 18 months. Accordingly, we believe that the effects on us of changes in interest rates and credit ratings of issuers are limited and would not have a material impact on our financial condition or results of operations.

**Foreign Currency Risk**

Our international operations are exposed to changes in foreign currency exchange rates due to transactions denominated in currencies other than the location's functional currency. Our international operations are also exposed to foreign currency fluctuations that impact the remeasurement of net monetary assets of those operations whose functional currency, the U.S. dollar, differs from their respective local currencies, most notably in Israel, Singapore and Switzerland. Our U.S. operations also have foreign currency exposure due to net monetary assets denominated in currencies other than the U.S. dollar. In addition to net monetary remeasurement, we have exposures related to the translation of subsidiary financial statements from their functional currency, the local currency, into its reporting currency, the U.S. dollar, most notably in the Netherlands, China, Taiwan, Japan and Germany.

Based on our foreign currency exposure as of June 28, 2025, a 10.0% fluctuation could impact our financial position, results of operations or cash flows by $5.0 million 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.

We enter into foreign exchange forward contracts to hedge a portion of our forecasted foreign currency-denominated expenses in the normal course of business and, accordingly, they are not speculative in nature. These instruments generally mature within twelve months. We have foreign exchange forward contracts with a notional amount of $47.6 million outstanding as of June 28, 2025.

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**Item 4. - CONTROLS AND PROCEDURES**

**Evaluation of Disclosure Controls and Procedures**

Our Management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 28, 2025. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of June 28, 2025, our disclosure controls and procedures were effective in providing reasonable assurance that the information required to be disclosed by us in reports filed under the Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms; and (ii) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding disclosure.

**Changes in Internal Control Over Financial Reporting**

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.

In connection with the evaluation by our management, including with the participation of our Chief Executive Officer and Chief Financial Officer, of our internal control over financial reporting, no changes during the three months ended June 28, 2025 were identified to have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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**PART II. - OTHER INFORMATION** 

**Item 1. - LEGAL PROCEEDINGS**

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

**Item 1A. - RISK FACTORS**

**Certain Risks Related to Our Business**

There have been no material changes from the risk factors discussed in Part I, Item 1A, "Risk Factors", of our 2024 Annual Report, except for the following:

***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.***

From time to time, our customers may request that we deliver our products to countries where they own or operate production facilities or to countries where they utilize third party subcontractors or warehouses as part of their supply chain. Our customer base in the Asia/Pacific region has become more geographically concentrated over time as a result of general economic and industry conditions and trends. Over 85% of our net revenue is derived from shipments to customers located outside of the U.S., primarily in the Asia/Pacific region. Approximately 51.3% and 49.9% of our net revenue for the nine months ended June 28, 2025 and June 29, 2024, respectively, were for 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. Some of these economies have been highly volatile, resulting in significant fluctuation in local currencies, and political and economic instability. Some of these economies may also increase trade protectionism, thereby increasing barriers to entry, amplifying supply chain risks and adversely affecting the demand for our products. These conditions may continue or worsen, which may materially and adversely affect our business, financial condition and operating results.

We also rely on non U.S. suppliers for materials and components used in our products, and substantially all of our manufacturing operations are located in countries other than the U.S. We currently manufacture our ball, wedge, APAMA<sup>TM</sup> and APTURA<sup>TM</sup> bonders in Singapore, our Hybrid and Electronic Assembly solutions in the Netherlands and in Singapore, 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. As a result, a major portion of our business is subject to the risks associated with international commerce, particularly Asia/Pacific region, such as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• stringent and frequently changing trade compliance regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• less protective foreign intellectual property laws, and the enforcement of patent and other intellectual property rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• longer payment cycles in foreign markets and potential default risks;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• foreign exchange restrictions and capital controls, monetary policies and regulatory requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• restrictions or significant taxes on the repatriation of our assets, including cash;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• tariff and currency fluctuations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• trade wars or trade conflicts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• difficulties of staffing and managing dispersed international operations, including labor work stoppages and strikes in our factories or the factories of our suppliers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in our structure or tax incentive arrangements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• possible disagreements with tax authorities;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• episodic events outside our control such as, for example, outbreaks of coronaviruses, influenza, monkeypox or other illnesses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• natural disasters such as earthquakes, fires or floods, including as a result of climate change;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• act of terrorism that impact our operations, customers or supply chain or that target U.S. interests or U.S. companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• seizure of our foreign assets, including cash;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the imposition of sanctions of countries in which we do business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changing political conditions and rising geopolitical tensions; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• legal systems which are less developed and may be less predictable than those in the U.S.

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.

Our international operations also depend on favorable trade relations between the U.S. and those foreign countries in which our customers, subcontractors and materials suppliers have operations. In 2025, the U.S. has imposed, or threatened to impose, additional tariffs on a number of countries. Impacted countries have imposed, and in the future may impose, retaliatory tariffs, and such actions could give rise to an escalation of other trade measures by the countries subject to such tariffs. While the application of certain previously announced tariffs has been delayed, there is no guarantee that the tariffs will not go into effect and there is the possibility that additional U.S. tariffs may be imposed on certain countries. In addition to tariffs, the U.S. has imposed export controls targeted at specific industries, including the semiconductor industry.

These tariffs and other adverse trade actions, as well as the threat of trade wars against foreign countries/regions, have created even more uncertainties in international trade, which may affect our business. For example, the imposition of tariffs and export controls could increase the cost of our products, which could in turn materially and adversely affect our ability to sell our products in foreign markets.

***We are subject to export restrictions that may limit our ability to sell to certain customers, and trade wars, in particular the U.S. China trade war, could adversely affect our business.***

The U.S. and several other countries levy tariffs on certain goods and impose other trade restrictions that may impact our customers' investment in manufacturing equipment, reduce the competitiveness of our products, or inhibit our ability to sell products or purchase necessary equipment and supplies.

In particular, trade tensions between the U.S. and China have been ongoing. There has been a further escalation of trade tensions between the U.S. and China since 2015, with U.S. tariffs on Chinese goods and retaliatory Chinese tariffs on U.S. goods. While a temporary de-escalation has been reached in May 2025, full retaliatory tariffs and other non-tariff countermeasures may be reimposed in the future should there be a suspension or breakdown of trade negotiations.

We cannot predict what further actions may ultimately be taken with respect to tariffs or trade relations between the U.S. and other countries, what products may be subject to such actions, or what actions may be taken by other countries in response. 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.

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Though nearly all of our manufacturing activities take place outside of the U.S., certain of our advanced packaging products are subject to the EAR because they are based on U.S. technology or contain more than a de minimis amount of controlled U.S. content. The EAR require licenses for, and sometimes prohibit, the export of certain products. The CCL sets forth the types of goods and services controlled by the EAR, including civilian science, technology, and engineering dual use items. For products listed on the CCL, a license may be required as a condition to export depending on the end destination, end use or end user and any applicable license exceptions.

In 2020, the U.S. Department of Commerce Bureau of Industry and Security ("BIS") amended the EAR to expand controls on certain foreign products based on U.S. technology and sold to Huawei and certain other companies. In October 2022, the BIS amended the EAR again to extend those foreign controls to numerous companies on BIS' so called Entity List. The 2020 and 2022 amendments impact some of our advanced packaging products, which are based on U.S. technology and are within the scope of the expanded EAR controls on Huawei and other Entity List companies. Therefore, these products cannot be sold to Huawei and other Entity List companies, and are subject to certain end use restrictions. To date, these amendments to the EAR have not had a material direct impact on our business, financial condition or results of operations and we do not expect that they will, although they could have indirect impact, including increasing tensions in U.S. and Chinese trade relations, potentially leading to negative sentiments towards U.S. based companies among Chinese consumers. 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. Further in December 2024, the BIS added new export controls pertaining to high-bandwidth memory, semiconductor manufacturing equipment and related items that enable advanced-node integrated circuit production. While the BIS rescinded its *"Framework for AI Diffusion"* in May 2025, there is a possibility of a replacement rule or other rules being introduced in the future.

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. 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.

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. 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. Such further changes may limit our ability to produce products, increase our selling or manufacturing costs, decrease margins, reduce the competitiveness of our products and cause our sales to decline, and therefore could have a material adverse effect on our business, financial condition or results of operations.

**Item 2. - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

*Purchases of Equity Securities by the Issuer and Affiliated Purchasers*

The following table summarizes the repurchases of common stock during the three months ended June 28, 2025 (in millions, except number of shares, which are reflected in thousands, and per share amounts):

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| | | | | |
|:---|:---|:---|:---|:---|
| 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 <sup>(1)</sup> |
| March 30, 2025 to April 26, 2025 | 218 | $30.34 | 218 | $265512 |
| April 27, 2025 to May 31, 2025 | 256 | $32.73 | 256 | $257136 |
| June 1, 2025 to June 28, 2025 | 194 | $34.19 | 194 | $250500 |
| For the three months ended June 28, 2025 | 668 |  | 668 |  |

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(1)On August 15, 2017, the Company's Board of Directors authorized the Prior Program, as amended from time to time. Additionally, and as previously announced on November 13, 2024, the Board of Directors authorized the New Program, with the intention that the New Program initiate upon the completion of the Prior Program. Contemporaneously, on December 2, 2024, the Company entered into a new written trading plan under Rule 10b5-1 of the Exchange Act, to facilitate repurchases under the New Program. The plan permits the purchase of up to approximately $300 million of the Company's common stock from December 2, 2024 through December 2, 2029. The New 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 New 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 New Program depend on market conditions as well as corporate and regulatory considerations.

**Item 3. – Defaults Upon Senior Securities.**

None.

**Item 4. – Mine Safety Disclosures**

None.

**Item 5. – Other Information**

*Director and Officer Trading Plans and Arrangements*

None of the Company's directors or officers (as defined in Rule 16a-1f of the Exchange Act) have adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company's fiscal quarter ended June 28, 2025, as such terms are defined under Item 408(a) of Regulation S-K.

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**Item 6. -&nbsp;&nbsp;&nbsp;&nbsp; Exhibits**

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| | |
|:---|:---|
| Exhibit No. | Description |
| 3.1 | <u>[The Company's Amended and Restated Articles of Incorporation, dated December 5, 2007, are incorporated herein by reference to Exhibit 3(i) to the Company's Annual Report on Form 10-K for the fiscal year ended September 29, 2007, SEC file number 000-00121.](https://www.sec.gov/Archives/edgar/data/56978/000119312507262429/dex3i.htm)</u> |
| 3.2 | <u>[The Company's Amended and Restated By-Laws, dated](https://www.sec.gov/Archives/edgar/data/56978/000005697825000061/ex31amendedarticleiii.htm)[June 5](https://www.sec.gov/Archives/edgar/data/56978/000005697825000061/ex31amendedarticleiii.htm)[, 202](https://www.sec.gov/Archives/edgar/data/56978/000005697825000061/ex31amendedarticleiii.htm)[5](https://www.sec.gov/Archives/edgar/data/56978/000005697825000061/ex31amendedarticleiii.htm)[, are incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K dated](https://www.sec.gov/Archives/edgar/data/56978/000005697825000061/ex31amendedarticleiii.htm)[June](https://www.sec.gov/Archives/edgar/data/56978/000005697825000061/ex31amendedarticleiii.htm)[9](https://www.sec.gov/Archives/edgar/data/56978/000005697825000061/ex31amendedarticleiii.htm)[, 2025](https://www.sec.gov/Archives/edgar/data/56978/000005697825000061/ex31amendedarticleiii.htm)[.](https://www.sec.gov/Archives/edgar/data/56978/000005697825000061/ex31amendedarticleiii.htm)</u> |
| 31.1 | <u>[Certification of Fusen Chen, Chief Executive Officer of Kulicke and Soffa Industries, Inc., pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.](a10qq32025ex311.htm)</u> |
| 31.2 | <u>[Certification of Lester Wong, Chief Financial Officer of Kulicke and Soffa Industries, Inc., pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.](a10qq32025ex312.htm)</u> |
| 32.1\* | <u>[Certification of Fusen Chen, Chief Executive Officer of Kulicke and Soffa Industries, Inc., pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](a10qq32025ex321.htm)</u> |
| 32.2\* | <u>[Certification of Lester Wong, Chief Financial Officer of Kulicke and Soffa Industries, Inc., pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](a10qq32025ex322.htm)</u> |
| 101.INS | Inline XBRL Instance Document. |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101.INS). |
| \* | This exhibit shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act or the Exchange Act. |

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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| | | |
|:---|:---|:---|
| | KULICKE AND SOFFA INDUSTRIES, INC. | KULICKE AND SOFFA INDUSTRIES, INC. |
| Date: August 6, 2025 | By: | /s/ LESTER WONG |
|  |  | Lester Wong |
|  |  | Executive Vice President and Chief Financial Officer <br>(principal financial officer and principal accounting officer) |

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## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION**

I, Fusen Chen, certify that:

1.&nbsp;&nbsp;&nbsp;&nbsp;I have reviewed this quarterly report on Form 10-Q of Kulicke and Soffa Industries, Inc.;

2.&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.&nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)&nbsp;&nbsp;&nbsp;&nbsp;Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.&nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)&nbsp;&nbsp;&nbsp;&nbsp;All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)&nbsp;&nbsp;&nbsp;&nbsp;Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

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| | | |
|:---|:---|:---|
| Date: August 6, 2025 | By: | /s/ FUSEN CHEN |
|  |  | Fusen Chen |
|  |  | President and Chief Executive Officer |

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## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION**

I, Lester Wong, certify that:

1.&nbsp;&nbsp;&nbsp;&nbsp;I have reviewed this quarterly report on Form 10-Q of Kulicke and Soffa Industries, Inc.;

2.&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.&nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.&nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)&nbsp;&nbsp;&nbsp;&nbsp;All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)&nbsp;&nbsp;&nbsp;&nbsp;Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

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| | | |
|:---|:---|:---|
| Date: August 6, 2025 | By: | /s/ LESTER WONG |
|  |  | Lester Wong |
|  |  | Executive Vice President and Chief Financial Officer |

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## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

I, Fusen Chen, President and Chief Executive Officer of Kulicke and Soffa Industries, Inc., do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.the Quarterly Report on Form 10-Q of Kulicke and Soffa Industries, Inc. for the period ended June 28, 2025 (the "June 28, 2025 Form 10-Q"), as filed with the Securities and Exchange Commission, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.the information contained in the June 28, 2025 Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Kulicke and Soffa Industries, Inc.

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| | | |
|:---|:---|:---|
| Date: August 6, 2025 | By: | /s/ FUSEN CHEN |
|  |  | Fusen Chen |
|  |  | President and Chief Executive Officer |

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## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

I, Lester Wong, Executive Vice President and Chief Financial Officer of Kulicke and Soffa Industries, Inc., do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. the Quarterly Report on Form 10-Q of Kulicke and Soffa Industries, Inc. for the period ended June 28, 2025 (the "June 28, 2025 Form 10-Q"), as filed with the Securities and Exchange Commission, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. the information contained in the June 28, 2025 Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Kulicke and Soffa Industries, Inc.

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| | | |
|:---|:---|:---|
| Date: August 6, 2025 | By: | /s/ LESTER WONG |
|  |  | Lester Wong |
|  |  | Executive Vice President and Chief Financial Officer |

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