Posted in: Proestukkies, romanses
Finaliste vir ATKV woordveertjies 2011
Proestukkie: Linelle Venter – Onverskrokke rebel
3 thoughts on “Proestukkie: Chanette Paul: Willemien”
‘n Formidabele slag vir vroueregte – en skreeusnaaks daarby! false--09-28Q32019SG0000056978KULICKE & SOFFA INDUSTRIES INC20272P1Y38500000.120.1200200000000200000000846590008534900067143000638370000.060.04P6YP15YP8YP5YP7YP7Y005000000500000000P1YP5Y1751600021512000 0000056978 2018-09-30 2019-06-29 0000056978 2019-07-29 0000056978 2018-09-29 0000056978 2019-06-29 0000056978 2017-10-01 2018-06-30 0000056978 2018-04-01 2018-06-30 0000056978 2019-03-31 2019-06-29 0000056978 us-gaap:TreasuryStockMember 2018-06-30 0000056978 2018-03-31 0000056978 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-04-01 2018-06-30 0000056978 us-gaap:CommonStockMember 2018-04-01 2018-06-30 0000056978 2017-12-31 2018-03-31 0000056978 2017-09-30 0000056978 2017-10-01 2017-12-30 0000056978 us-gaap:CommonStockMember 2018-03-31 0000056978 us-gaap:RetainedEarningsMember 2018-03-31 0000056978 us-gaap:RetainedEarningsMember 2017-12-31 2018-03-31 0000056978 us-gaap:CommonStockMember 2018-06-30 0000056978 us-gaap:CommonStockMember 2017-12-31 2018-03-31 0000056978 us-gaap:CommonStockMember 2017-10-01 2017-12-30 0000056978 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-10-01 2017-12-30 0000056978 us-gaap:RetainedEarningsMember 2018-04-01 2018-06-30 0000056978 us-gaap:CommonStockMember 2017-09-30 0000056978 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-12-31 2018-03-31 0000056978 us-gaap:TreasuryStockMember 2017-09-30 0000056978 us-gaap:RetainedEarningsMember 2017-09-30 0000056978 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-09-30 0000056978 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-03-31 0000056978 us-gaap:TreasuryStockMember 2017-10-01 2017-12-30 0000056978 us-gaap:TreasuryStockMember 2018-03-31 0000056978 2018-06-30 0000056978 2017-12-30 0000056978 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-06-30 0000056978 us-gaap:CommonStockMember 2017-12-30 0000056978 us-gaap:TreasuryStockMember 2018-04-01 2018-06-30 0000056978 us-gaap:TreasuryStockMember 2017-12-30 0000056978 us-gaap:RetainedEarningsMember 2017-10-01 2017-12-30 0000056978 us-gaap:RetainedEarningsMember 2017-12-30 0000056978 us-gaap:RetainedEarningsMember 2018-06-30 0000056978 us-gaap:TreasuryStockMember 2017-12-31 2018-03-31 0000056978 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-12-30 0000056978 2018-12-30 2019-03-30 0000056978 us-gaap:TreasuryStockMember 2018-09-29 0000056978 us-gaap:CommonStockMember 2018-12-30 2019-03-30 0000056978 us-gaap:RetainedEarningsMember 2018-09-30 2018-12-29 0000056978 us-gaap:CommonStockMember 2019-03-31 2019-06-29 0000056978 us-gaap:RetainedEarningsMember 2018-12-29 0000056978 us-gaap:CommonStockMember 2018-12-29 0000056978 us-gaap:RetainedEarningsMember 2019-03-31 2019-06-29 0000056978 us-gaap:RetainedEarningsMember 2018-09-29 0000056978 us-gaap:TreasuryStockMember 2018-09-30 2018-12-29 0000056978 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-29 0000056978 us-gaap:CommonStockMember 2018-09-29 0000056978 us-gaap:TreasuryStockMember 2019-03-30 0000056978 us-gaap:RetainedEarningsMember 2018-12-30 2019-03-30 0000056978 us-gaap:RetainedEarningsMember 2019-03-30 0000056978 us-gaap:CommonStockMember 2018-09-30 2018-12-29 0000056978 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-29 0000056978 2019-03-30 0000056978 us-gaap:CommonStockMember 2019-06-29 0000056978 us-gaap:TreasuryStockMember 2019-06-29 0000056978 2018-09-30 2018-12-29 0000056978 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-09-29 0000056978 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-30 0000056978 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-30 2019-03-30 0000056978 us-gaap:TreasuryStockMember 2019-03-31 2019-06-29 0000056978 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-09-30 2018-12-29 0000056978 us-gaap:RetainedEarningsMember 2019-06-29 0000056978 us-gaap:AccountingStandardsUpdate201616Member us-gaap:RetainedEarningsMember 2018-09-29 0000056978 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 2019-06-29 0000056978 us-gaap:TreasuryStockMember 2018-12-29 0000056978 us-gaap:CommonStockMember 2019-03-30 0000056978 2018-12-29 0000056978 us-gaap:TreasuryStockMember 2018-12-30 2019-03-30 0000056978 us-gaap:LeaseholdsAndLeaseholdImprovementsMember 2018-09-30 2019-06-29 0000056978 klic:SparePartsMember 2018-09-30 2019-06-29 0000056978 srt:MinimumMember us-gaap:MachineryAndEquipmentMember 2018-09-30 2019-06-29 0000056978 srt:MaximumMember us-gaap:MachineryAndEquipmentMember 2018-09-30 2019-06-29 0000056978 us-gaap:BuildingMember 2018-09-30 2019-06-29 0000056978 klic:ExpendableToolsMember 2018-09-30 2019-06-29 0000056978 us-gaap:EquipmentMember 2018-09-30 2019-06-29 0000056978 us-gaap:SoftwareAndSoftwareDevelopmentCostsMember 2018-09-30 2019-06-29 0000056978 sic:Z3541 2018-09-30 2019-06-29 0000056978 us-gaap:CustomerRelationshipsMember 2019-06-29 0000056978 us-gaap:CustomerRelationshipsMember 2018-09-29 0000056978 us-gaap:OtherIntangibleAssetsMember 2018-09-29 0000056978 us-gaap:DevelopedTechnologyRightsMember 2019-06-29 0000056978 us-gaap:TradeNamesMember 2019-06-29 0000056978 us-gaap:DevelopedTechnologyRightsMember 2018-09-29 0000056978 us-gaap:TradeNamesMember 2018-09-29 0000056978 us-gaap:OtherIntangibleAssetsMember 2019-06-29 0000056978 us-gaap:OtherIntangibleAssetsMember 2018-09-30 2019-06-29 0000056978 klic:CapitalEquipmentMember 2018-09-29 0000056978 klic:CapitalEquipmentMember 2019-06-29 0000056978 klic:AftermarketProductsandServicesMember 2019-06-29 0000056978 klic:AftermarketProductsandServicesMember 2018-09-29 0000056978 srt:MaximumMember us-gaap:TradeNamesMember 2018-09-30 2019-06-29 0000056978 srt:MaximumMember us-gaap:CustomerRelationshipsMember 2018-09-30 2019-06-29 0000056978 srt:MinimumMember us-gaap:TradeNamesMember 2018-09-30 2019-06-29 0000056978 srt:MaximumMember us-gaap:DevelopedTechnologyRightsMember 2018-09-30 2019-06-29 0000056978 srt:MinimumMember us-gaap:CustomerRelationshipsMember 2018-09-30 2019-06-29 0000056978 srt:MinimumMember us-gaap:DevelopedTechnologyRightsMember 2018-09-30 2019-06-29 0000056978 us-gaap:DemandDepositsMember 2018-09-29 0000056978 us-gaap:BankTimeDepositsMember 2018-09-29 0000056978 us-gaap:MoneyMarketFundsMember 2018-09-29 0000056978 us-gaap:DemandDepositsMember 2019-06-29 0000056978 us-gaap:BankTimeDepositsMember 2019-06-29 0000056978 us-gaap:MoneyMarketFundsMember 2019-06-29 0000056978 2019-01-30 0000056978 us-gaap:AccruedLiabilitiesMember 2018-09-29 0000056978 us-gaap:ForeignExchangeForwardMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-06-29 0000056978 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:ForeignExchangeForwardMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-06-29 0000056978 us-gaap:AccruedLiabilitiesMember us-gaap:ForeignExchangeForwardMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-09-29 0000056978 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember 2019-06-29 0000056978 us-gaap:ForeignExchangeForwardMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-09-29 0000056978 us-gaap:ForeignExchangeForwardMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:OtherComprehensiveIncomeMember 2019-03-31 2019-06-29 0000056978 us-gaap:ForeignExchangeForwardMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:OtherComprehensiveIncomeMember 2017-10-01 2018-06-30 0000056978 us-gaap:ForeignExchangeForwardMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:SellingGeneralAndAdministrativeExpensesMember 2018-04-01 2018-06-30 0000056978 us-gaap:ForeignExchangeForwardMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:SellingGeneralAndAdministrativeExpensesMember 2018-09-30 2019-06-29 0000056978 us-gaap:ForeignExchangeForwardMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:SellingGeneralAndAdministrativeExpensesMember 2019-03-31 2019-06-29 0000056978 us-gaap:ForeignExchangeForwardMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:SellingGeneralAndAdministrativeExpensesMember 2017-10-01 2018-06-30 0000056978 us-gaap:ForeignExchangeForwardMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:OtherComprehensiveIncomeMember 2018-09-30 2019-06-29 0000056978 us-gaap:ForeignExchangeForwardMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:OtherComprehensiveIncomeMember 2018-04-01 2018-06-30 0000056978 us-gaap:ForeignExchangeForwardMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-09-30 2019-06-29 0000056978 klic:KSCorporateHeadquartersMember 2013-12-01 0000056978 klic:KSCorporateHeadquartersMember 2013-12-01 2013-12-01 0000056978 klic:CurrentandNoncurrentPortionMember 2019-06-29 0000056978 2013-12-01 0000056978 klic:KSCorporateHeadquartersMember 2018-09-30 2019-06-29 0000056978 klic:CitibankMember 2019-06-29 0000056978 klic:FacilityAgreementsMember klic:MUFGBankLtd.SingaporeBranchMember us-gaap:LondonInterbankOfferedRateLIBORMember 2018-09-30 2019-06-29 0000056978 klic:FacilityAgreementsMember klic:MUFGBankLtd.SingaporeBranchMember 2019-02-15 0000056978 klic:CitibankMember 2013-11-22 0000056978 klic:RelativeTSRPSUMember 2019-03-31 2019-06-29 0000056978 klic:TimebasedRSUMember 2018-09-30 2019-06-29 0000056978 klic:TimebasedRSUMember 2019-03-31 2019-06-29 0000056978 us-gaap:CommonStockMember 2018-09-30 2019-06-29 0000056978 klic:RelativeTSRPSUMember 2017-10-01 2018-06-30 0000056978 us-gaap:CommonStockMember 2019-03-31 2019-06-29 0000056978 klic:RelativeTSRPSUMember 2018-09-30 2019-06-29 0000056978 klic:SpecialGrowthPSUMember 2018-04-01 2018-06-30 0000056978 us-gaap:CommonStockMember 2017-10-01 2018-06-30 0000056978 klic:SpecialGrowthPSUMember 2019-03-31 2019-06-29 0000056978 klic:TimebasedRSUMember 2018-04-01 2018-06-30 0000056978 klic:TimebasedRSUMember 2017-10-01 2018-06-30 0000056978 klic:RelativeTSRPSUMember 2018-04-01 2018-06-30 0000056978 us-gaap:CommonStockMember 2018-04-01 2018-06-30 0000056978 klic:SpecialGrowthPSUMember 2018-09-30 2019-06-29 0000056978 klic:SpecialGrowthPSUMember 2017-10-01 2018-06-30 0000056978 2017-08-15 0000056978 srt:MaximumMember 2019-06-29 0000056978 srt:MinimumMember 2019-06-29 0000056978 2018-07-10 0000056978 klic:EquityIncentivePlan2017Member 2019-06-29 0000056978 2019-01-31 0000056978 2019-02-28 2019-02-28 0000056978 us-gaap:CostOfSalesMember 2019-03-31 2019-06-29 0000056978 us-gaap:ResearchAndDevelopmentExpenseMember 2019-03-31 2019-06-29 0000056978 us-gaap:ResearchAndDevelopmentExpenseMember 2017-10-01 2018-06-30 0000056978 us-gaap:CostOfSalesMember 2018-04-01 2018-06-30 0000056978 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2018-09-30 2019-06-29 0000056978 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2018-04-01 2018-06-30 0000056978 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2017-10-01 2018-06-30 0000056978 us-gaap:ResearchAndDevelopmentExpenseMember 2018-09-30 2019-06-29 0000056978 us-gaap:CostOfSalesMember 2018-09-30 2019-06-29 0000056978 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2019-03-31 2019-06-29 0000056978 us-gaap:CostOfSalesMember 2017-10-01 2018-06-30 0000056978 us-gaap:ResearchAndDevelopmentExpenseMember 2018-04-01 2018-06-30 0000056978 2018-12-12 2018-12-12 0000056978 2019-05-20 2019-05-20 0000056978 srt:MaximumMember 2018-09-30 2019-06-29 0000056978 srt:MinimumMember 2018-09-30 2019-06-29 0000056978 klic:AftermarketProductsandServicesAPSSegmentMember 2019-03-31 2019-06-29 0000056978 klic:CapitalEquipmentSegmentMember 2018-04-01 2018-06-30 0000056978 klic:AftermarketProductsandServicesAPSSegmentMember 2018-04-01 2018-06-30 0000056978 klic:CapitalEquipmentSegmentMember 2018-09-30 2019-06-29 0000056978 klic:AftermarketProductsandServicesAPSSegmentMember 2018-09-30 2019-06-29 0000056978 klic:CapitalEquipmentSegmentMember 2017-10-01 2018-06-30 0000056978 klic:CapitalEquipmentSegmentMember 2019-03-31 2019-06-29 0000056978 klic:AftermarketProductsandServicesAPSSegmentMember 2017-10-01 2018-06-30 0000056978 klic:HaosengIndustrialCompanyLimitedMember us-gaap:SalesMember us-gaap:CustomerConcentrationRiskMember 2017-10-01 2018-06-30 0000056978 klic:MicronTechnologyIncMemberMember us-gaap:SalesMember us-gaap:CustomerConcentrationRiskMember 2018-09-30 2019-06-29 0000056978 klic:HaosengIndustrialCompanyLimitedMember us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2017-10-01 2018-06-30 0000056978 klic:ForehopeElectronicNingboCoLtdMember us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2018-09-30 2019-06-29 0000056978 klic:MicronTechnologyIncMemberMember us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2018-09-30 2019-06-29 0000056978 klic:SuperPowerInternationalMember us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2017-10-01 2018-06-30 0000056978 klic:SuperPowerInternationalMember us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2018-09-30 2019-06-29 0000056978 us-gaap:ForeignExchangeForwardMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:SubsequentEventMember 2019-07-29 0000056978 us-gaap:ForeignExchangeForwardMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:SubsequentEventMember 2019-07-29 2019-07-29 xbrli:shares iso4217:USD xbrli:shares iso4217:USD iso4217:SGD utreg:sqft xbrli:pure klic:renewal_option klic:segment
23A Serangoon North Avenue 5, #01-01 K&S Corporate Headquarters, Singapore 554369
As of July 29, 2019, there were 63,407,840 shares of the Registrant's Common Stock, no par value, outstanding.
Consolidated Condensed Balance Sheets as of June 29, 2019 and September 29, 2018
Consolidated Condensed Statements of Operations for the three and nine months ended June 29, 2019 and June 30, 2018
Consolidated Condensed Statements of Comprehensive Income (Loss) for the three and nine months ended June 29, 2019 and June 30, 2018
Consolidated Condensed Statements of Shareholders' Equity for the three and nine months ended June 29, 2019 and June 30, 2018
Consolidated Condensed Statements of Cash Flows for the nine months ended June 29, 2019 and June 30, 2018
Accounts and other receivable, net of allowance for doubtful accounts of $0 and $385, respectively
Authorized 200,000 shares; issued 85,349 and 84,659, respectively; outstanding 63,837 and 67,143 shares, respectively
Treasury stock, at cost, 21,512 and 17,516 shares, respectively
Unrecognized actuarial (loss)/gain on pension plan, net of tax
Unrealized (loss)/gain on derivative instruments, net of tax
Reclassification adjustment for loss/(gain) on derivative instruments recognized, net of tax
Net (increase)/decrease from derivatives designated as hedging instruments, net of tax
CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Balances as of September 29, 2018
Issuance of stock for services rendered
Issuance of shares for market-based restricted stock and time-based restricted stock
Components of comprehensive income/(loss):
Balances as of December 29, 2018
Components of comprehensive (loss)/income:
Balances as of March 30, 2019
Balances as of June 29, 2019
Balances as of December 30, 2017
Share of results of equity-method investee
Proceeds from short term debt
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 29, 2018, filed with the Securities and Exchange Commission, which includes Consolidated Balance Sheets as of September 29, 2018 and September 30, 2017, and the related Consolidated Statements of Operations, Statements of Other Comprehensive Income, Changes in Shareholders' Equity and Cash Flows for each of the years in the three-year period ended September 29, 2018. 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.
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 2019 quarters end on December 29, 2018, March 30, 2019, June 29, 2019 and September 28, 2019. In fiscal years consisting of 53 weeks, the fourth quarter will consist of 14 weeks. Fiscal 2018 quarters ended on December 30, 2017, March 31, 2018, June 30, 2018 and September 29, 2018.
The Company designs, manufactures and sells capital equipment and tools as well as services, maintains, repairs and upgrades equipment, all used to assemble semiconductor devices. The Company's operating results depend upon the capital and operating expenditures of semiconductor device manufacturers, integrated device manufacturers, outsourced semiconductor assembly and test providers (“OSATs”), and other electronics manufacturers including automotive electronics suppliers, worldwide which, in turn, depend on the current and anticipated market demand for semiconductors and products utilizing semiconductors. The semiconductor industry is highly volatile and experiences downturns and slowdowns which can have a severe negative effect on the semiconductor industry's demand for semiconductor capital equipment, including assembly equipment manufactured and sold by the Company and, to a lesser extent, tools, including those sold by the Company. These downturns and slowdowns have in the past adversely affected the Company's operating results. The Company believes such volatility will continue to characterize the industry and the Company's operations in the future.
The preparation of consolidated condensed financial statements requires management to make assumptions, estimates and judgments that affect the reported amounts of assets and liabilities, net revenue and expenses during the reporting periods, and disclosures of contingent assets and liabilities as of the date of the consolidated condensed financial statements. On an ongoing basis, management evaluates estimates, including but not limited to, those related to accounts receivable, reserves for excess and obsolete inventory, carrying value and lives of fixed assets, goodwill and intangible assets, the valuation estimates and assessment of impairment and observable price adjustments, valuation allowances for deferred tax assets and deferred tax liabilities, repatriation of un-remitted foreign subsidiary earnings, equity-based compensation expense, and warranties. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable. As a result, management makes judgments regarding the carrying values of the Company's assets and liabilities that are not readily apparent from other sources. Authoritative pronouncements, historical experience and assumptions also are used as the basis for making estimates, and on an ongoing basis, management evaluates these estimates. Actual results may differ from these estimates.
Financial instruments which may subject the Company to concentrations of credit risk as of June 29, 2019 and September 29, 2018 consisted primarily of trade receivables. The Company manages credit risk associated with investments by investing its excess cash in highly rated debt instruments of the U.S. Government and its agencies, financial institutions, and corporations. The Company has established investment guidelines relative to diversification and maturities designed to maintain safety and liquidity. These
guidelines are periodically reviewed and modified as appropriate. The Company does not have any exposure to sub-prime financial instruments or auction rate securities.
The Company's trade receivables result primarily from the sale of semiconductor equipment, related accessories and replacement parts, and tools to a relatively small number of large manufacturers in a highly concentrated industry. Write-offs of uncollectible accounts have historically not been significant. The Company actively monitors its customers' financial strength to reduce the risk of loss.
The Company's operations are exposed to changes in foreign currency exchange rates due to transactions denominated in currencies other than the location's functional currency. The Company is also exposed to foreign currency fluctuations that impact the remeasurement of net monetary assets of those operations whose functional currency, the U.S. dollar, differs from their respective local currencies, most notably in Israel, Singapore and Switzerland. In addition to net monetary remeasurement, the Company has exposures related to the translation of subsidiary financial statements from their functional currency, the local currency, into its reporting currency, the U.S. dollar, most notably in the Netherlands, China, Taiwan, Japan and Germany. The Company's U.S. operations also have foreign currency exposure due to net monetary assets denominated in currencies other than the U.S. dollar.
The Company’s primary objective for holding derivative financial instruments is to manage the fluctuation in foreign exchange rates and accordingly is not speculative in nature. The Company’s international operations are exposed to changes in foreign exchange rates as described above. The Company has established a program to monitor the forecasted transaction currency risk to protect against foreign exchange rate volatility. Generally, the Company uses foreign exchange forward contracts in these hedging programs. These instruments, which have maturities of up to twelve months, are recorded at fair value and are included in prepaid expenses and other current assets, or accrued expenses and other current liabilities.
The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. Cash equivalents are measured at fair value based on level one measurement, or quoted market prices, as defined by ASC No. 820, Fair Value Measurements and Disclosures.
The Company invests in equity securities in companies to promote business and strategic objectives. Equity investments are measured and recorded as follows:
Equity method investments are equity securities in investees that provide the Company with the ability to exercise significant influence in which it lacks a controlling financial interest. Our proportionate share of the income or loss is recognized on a one-quarter lag and is recorded as share of results of equity-method investee, net of tax.
Non-marketable equity securities are equity securities without readily determinable fair value that are measured and recorded using a measurement alternative that measures the securities at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes.
The Company maintains allowances for doubtful accounts for estimated losses resulting from its customers' failure to make required payments. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. If global or regional economic conditions deteriorate or political conditions were to change in some of the countries where the Company does business, it could have a significant impact on the results of operations, and the Company's ability to realize the full value of its accounts receivable.
Inventories are stated at the lower of cost (on a first-in first-out basis) or net realizable value. The Company generally provides reserves for obsolete inventory and for inventory considered to be in excess of demand. Demand is generally defined as 18 months forecasted future consumption for equipment, 24 months forecasted future consumption for spare parts, and 12 months forecasted future consumption for tools. Forecasted consumption is based upon internal projections, historical sales volumes, customer order activity and a review of consumable inventory levels at customers' facilities. The Company communicates forecasts of its future consumption to its suppliers and adjusts commitments to those suppliers accordingly. If required, the Company reserves the difference between the carrying value of its inventory and the lower of cost or net realizable value, based upon projections about future consumption, and market conditions. If actual market conditions are less favorable than projections, additional inventory reserves may be required.
Property, plant and equipment are carried at cost. The cost of additions and those improvements which increase the capacity or lengthen the useful lives of assets are capitalized, while repair and maintenance costs are expensed as incurred. Depreciation and amortization are provided on a straight-line basis over the estimated useful lives as follows: buildings 25 years; machinery, equipment, furniture and fittings 3 to 10 years; toolings 1 year; and leasehold improvements are based on the shorter of the life of lease or life of asset. Purchased computer software costs related to business and financial systems are amortized over a five-year period on a straight-line basis. Land is not depreciated.
In accordance with ASC No. 360, Property, Plant & Equipment ("ASC 360"), the Company's property, plant and equipment is tested for impairment based on undiscounted cash flows when triggering events occur, and if impaired, written-down to fair value based on either discounted cash flows or appraised values. ASC 360 also provides a single accounting model for long-lived assets to be disposed of by sale and establishes additional criteria that would have to be met to classify an asset as held for sale. The carrying amount of an asset or asset group is not recoverable to the extent it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group. Estimates of future cash flows used to test the recoverability of a long-lived asset or asset group must incorporate the entity's own assumptions about its use of the asset or asset group and must factor in all available evidence.
ASC 360 requires that long-lived assets be tested for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Such events include significant under-performance relative to historical internal forecasts or projected future operating results; significant changes in the manner of use of the assets; significant negative industry or economic trends; or significant changes in market capitalization. During the three and nine months ended June 29, 2019, no "triggering" events occurred.
In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which eliminates the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment. Under this guidance, the goodwill 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, although it cannot exceed the total amount of goodwill allocated to that reporting unit. This ASU will be effective for us beginning in our first quarter of 2021 and early adoption is permitted. During the third quarter of 2017, we elected to prospectively adopt ASU2017-04. This eliminates the requirement to perform step 2 of the goodwill impairment test.
As part of the annual evaluation, the Company performs an impairment test of its goodwill in the fourth quarter of each fiscal year to coincide with the completion of its annual forecasting and refreshing of its business outlook processes. On an ongoing basis, the Company monitors if a “triggering” event has occurred that may have the effect of reducing the fair value of a reporting unit below its respective carrying value. Adverse changes in expected operating results and/or unfavorable changes in other economic factors used to estimate fair values could result in a non-cash impairment charge in the future.
For further information on goodwill and other intangible assets, see Note 3 below.
In accordance with ASC No. 606, Revenue from Contracts with Customers, 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.
The Company recognizes revenue from sales of our products, including sales to our distributors, at a point in time, generally upon shipment or delivery to the customer or distributor, depending upon the terms of the sales order. Control is considered transferred when title and risk of loss pass, when the customer becomes obligated to pay and, where applicable, when the customer has accepted the products or upon expiration of the acceptance period. For sales to distributors, payment is due on our standard commercial terms and is not contingent upon resale of the products.
Our business is subject to contingencies related to customer orders, including:
Right of Return: A large portion of our revenue comes from the sale of equipments used in the semiconductor assembly process. Other product sales relate to consumable products, which are sold in high-volume quantities, and are generally maintained at low stock levels at our customer's facility. Customer returns have historically represented a very small percentage of customer sales on an annual basis.
Warranties: Our equipment is generally shipped with a one-year warranty against manufacturing defects. We establish 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 expenses, including product parts replacement, freight charges and labor costs expected to be incurred to correct product failures during the warranty period.
Conditions of Acceptance: Sales of our consumable products generally do not have customer acceptance terms. In certain cases, sales of our equipment have customer acceptance clauses which may require the equipment to perform in accordance with customer specifications or when installed at the customer's facility. In such cases, if the terms of acceptance are satisfied at our facility prior to shipment, the revenue for the equipment will be recognized upon shipment. If the terms of acceptance are satisfied at our customers' facilities, the revenue for the equipment will not be recognized until acceptance, which is typically obtained after installation and testing, is received from the customer.
Service revenue is generally recognized over time as the services are performed. For the three and nine months ended June 29, 2019, and June 30, 2018, the service revenue is not material.
The Company measures revenue based on the amount of consideration we expect to be entitled to in exchange for products or services. Any variable consideration such as sales incentives are recognized as a reduction of net revenue at the time of revenue recognition.
The length of time between invoicing and payment is not significant under any of our payment terms. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component.
In accordance with ASC No. 740, Income Taxes, deferred income taxes are determined using the balance sheet method. The Company records a valuation allowance to reduce its deferred tax assets to the amount it expects is more likely than not to be realized. While the Company has considered future taxable income and its ongoing tax planning strategies in assessing the need for the valuation allowance, if it were to determine that it would be able to realize its deferred tax assets in the future in excess of its net recorded amount, an adjustment to the deferred tax asset would increase income in the period when such determination is made. Likewise, should the Company determine it would not be able to realize all or part of its net deferred tax assets in the future, an adjustment to the deferred tax asset would decrease income in the period when such determination is made.
In accordance with ASC No. 740 Topic 10, Income Taxes, General (“ASC 740.10”), the Company accounts for uncertain tax positions taken or expected to be taken in its income tax return. Under ASC 740.10, the Company utilizes a two-step approach for evaluating uncertain tax positions. Step one, or recognition, requires a company to determine if the weight of available evidence indicates a tax position is more likely than not to be sustained upon examination solely based on its technical merit. Step two, or measurement, is based on the largest amount of benefit, which is more likely than not to be realized on settlement with the taxing authority, including resolution of related appeals or litigation processes, if any.
The Company accounts for equity-based compensation under the provisions of ASC No. 718, Compensation - Stock Compensation (“ASC 718”). ASC 718 requires the recognition of the fair value of the equity-based compensation in net income. Compensation expense associated with Relative TSR Performance Share Units is determined using a Monte-Carlo valuation model, and compensation expense associated with time-based and Special/Growth Performance Share Units is determined based on the number of shares granted and the fair value on the date of grant. See Note 9 for a summary of the terms of these performance-based awards. The fair value of the Company's stock option awards is estimated using a Black-Scholes option valuation model. The fair value of equity-based awards is amortized over the vesting period of the award and the Company elected to use the straight-line method for awards granted after the adoption of ASC 718.
Earnings per share (“EPS”) are calculated in accordance with ASC No. 260, Earnings per Share. Basic EPS include only the weighted average number of common shares outstanding during the period. Diluted EPS include the weighted average number of common shares and the dilutive effect of stock options, restricted stock awards, performance share units and restricted share units outstanding during the period, when such instruments are dilutive.
The Company accounts for business acquisitions in accordance with ASC No. 805, Business Combinations. The fair value of the net assets acquired and the results of operations of the acquired businesses are included in the Unaudited Consolidated Condensed Financial Statements from the acquisition date forward. The Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and results of operations during the reporting period. Estimates are used in accounting for, among other things, the fair value of acquired net operating assets, property, plant and equipment, deferred revenue, intangible assets and related deferred tax liabilities, useful lives of property, plant and equipment, and amortizable lives of acquired intangible assets. Any excess of the purchase consideration over the identified fair value of the assets and liabilities acquired is recognized as goodwill. The valuation of these tangible and identifiable intangible assets and liabilities is subject to further management review and may change materially between the preliminary allocation and end of the purchase price allocation period.
In October 2016, the FASB issued ASU 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory. The new guidance is effective for the Company beginning fiscal 2019 and requires the tax effects of intercompany transactions (other than transfers of inventory) to be recognized currently. The Company has adopted the modified retrospective approach for the transition based on the new guidance and, as of the beginning of the period of adoption, has recorded the cumulative effect of adjustments related to intra-entity transfers of intangible and fixed assets of $0.5 million in prior years as an increase to retained earnings.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under current GAAP.
Subsequently in July 2018, the FASB issued ASU 2018-11 -Leases (Topic 842): Targeted Improvements, provides additional information concerning the new leases standard in ASU 2016-02, Leases (Topic 842). The targeted improvements provide entities with additional and optional transition methods.
In November 2018, the FASB issued ASU 2018-20 – Leases (Topic 842): Narrow-Scope Improvements for Lessors. This ASU provides guidance in several areas, including the accounting policy election for sales taxes and other similar taxes collected from lessees, accounting for certain lessor costs and accounting for variable payments for contracts with lease and nonlease components.
The Company will adopt these ASUs utilizing the modified retrospective transition method through a cumulative-effect adjustment at the beginning of its first quarter of 2020. In addition, we will elect the package of practical expedients permitted under the transition guidance that allowed us to apply prior conclusions related to lease definition, classification and initial direct costs. The adoption of these ASUs will result in an increase in our consolidated balance sheets for these right of use assets and corresponding liabilities. However, the ultimate impact of adopting these ASUs will depend on the Company's lease portfolio as of the adoption date. We are currently evaluating the effects of the adoption of these ASUs on our financial statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU replaces the impairment methodology in current GAAP, which delays recognition of credit losses until it is probable a loss has been incurred, with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This ASU will be effective for us beginning in our first quarter of fiscal 2021. We are currently evaluating the impact of the adoption of this ASU on our financial statements.
In August 2017, the FASB issued ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities (Topic 815). The new guidance expands and refines hedge accounting for both financial and non-financial risks. The new guidance also modifies disclosure requirements for hedging activities. The new guidance will be effective for us beginning in our first quarter of fiscal 2020, and early adoption is permitted in any interim period. We do not expect the adoption of this ASU to have a material impact on our financial statements.
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which amends the accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers.
Subsequently, the FASB has issued the following standards related to ASU 2014-09: ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (“ASU 2016-08”); ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing (“ASU 2016-10”); ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”); and ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers (“ASU 2016-20” and collectively, the “new revenue standards”).
The Company has performed an evaluation of this ASU and its impact on the financial statements. This included tasks such as identifying contracts, performance obligations and reviewing the applicable revenue streams. We have completed our assessment and implemented policies, processes, and controls to support the standard's measurement and disclosure requirements. The new standard was adopted in the first quarter of fiscal 2019 using a modified retrospective approach.
Based on our review of all our customer agreements for the affected periods, our revenue from sales of our products, such as equipment and spare parts, will continue to be recognized at a point in time, generally upon shipment or delivery to customers or distributors, depending upon the terms of the sales order, consistent with our current revenue recognition model. Revenue related to the sale of services will generally continue to be recognized over time as the services are performed. In certain instances, where collection of consideration is not probable, recognition of revenue may occur later under the new model after we have completed all of our obligations under the contract. However, when adopting the new standard, we did not identify any balances where collection of consideration is not probable. This ASU did not have a material impact on the amount and timing of revenue recognized in the Company’s consolidated financial statements.
In November 2018, the FASB issued ASU 2018-18 – Collaborative Arrangements (Topic 808). This ASU clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue when the collaborative arrangement participant is a customer in the context of a unit of account and precludes recognizing as revenue consideration received from a collaborative arrangement participant if the participant is not a customer. This ASU will be effective for us in the first quarter of 2021 with early adoption permitted. This ASU requires retrospective adoption to the date we adopted ASC 606 by recognizing a cumulative-effect adjustment to the opening balance of retained earnings of the earliest annual period presented. We are currently evaluating the timing and the effects of the adoption of this ASU on our financial statements.
The following tables reflect the components of significant balance sheet accounts as of June 29, 2019 and September 29, 2018:
Buildings and building improvements (2)
All short-term investments were classified as available-for-sale and were measured at fair value based on level one measurement, or quoted market prices, as defined by ASC 820. The Company did not recognize any realized gains or losses on the sale of investments during the three and nine months ended June 29, 2019 and June 30, 2018.
Certain balances as at September 29, 2018 relating to Property, plant and equipment have been reclassified. These reclassifications have no impact to the Consolidated Balance Sheet as at September 29, 2018.
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 of 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 2018 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 noncash impairment in the future.
During the three and nine months ended June 29, 2019, the Company reviewed qualitative factors to ascertain if a "triggering" event may have taken place that may have the effect of reducing the fair value of the reporting unit below its carrying value and concluded that no triggering event had occurred.
The following table summarizes the Company's recorded goodwill as of June 29, 2019 and September 29, 2018:
The following table reflects net intangible assets as of June 29, 2019 and September 29, 2018:
Net developed technology
Net trade and brand names
The following table reflects estimated annual amortization expense related to intangible assets as of June 29, 2019:
Remaining fiscal 2019
Fiscal 2023 and onwards
NOTE 4: CASH, CASH EQUIVALENTS, RESTRICTED CASH 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, restricted cash and short-term investments consisted of the following as of June 29, 2019: