KULICKE & SOFFA INDUSTRIES INC

Previous wording

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 94.4% and 87.2% of our net revenue for the three months ended January 3, 2026 and December 28, 2024, respectively, were for shipments to customer locations outside of the U.S., primarily in the Asia/Pacific region. Approximately 59.0% and 48.9% of our net revenue for the three months ended January 3, 2026 and December 28, 2024, respectively, were for shipments to customers headquartered in China.

Current wording

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 92.8% and 86.3% of our net revenue for the three months ended April 4, 2026 and March 29, 2025, respectively, were for shipments to customer locations outside of the U.S., primarily in the Asia/Pacific region. Approximately 54.6% and 45.8% of our net revenue for the three months ended April 4, 2026 and March 29, 2025, respectively, were for shipments to customers headquartered in China.

Previous wording

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.

Current wording

While our customers have generally been impacted by the current global macroeconomic conditions, demand trends have varied by region and over time. Those with operations in China, an important manufacturing and supply chain hub, have at times experienced, and may experience in the future, greater volatility in demand compared to other regions. 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.

Previous wording

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 January 3, 2026, our total cash, cash equivalents and short-term investments were $481.1 million, a $29.6 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.

Current wording

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 April 4, 2026, our total cash, cash equivalents and short-term investments were $487.9 million, a $22.8 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.

Previous wording

As discussed in Note 15: Segment Information, the segment-related information within Management's Discussion and Analysis of Financial Condition and Results of Operations for the three months ended January 3, 2026 now excludes a certain product line from the APS segment and reports it as part of “All Others”. This change in composition of the reportable segments has been retrospectively applied to the corresponding results for the three months ended December 28, 2024.

Current wording

As discussed in Note 15: Segment Information, the segment-related information within Management's Discussion and Analysis of Financial Condition and Results of Operations for the three and six months ended April 4, 2026 now excludes a certain product line from the APS segment and reports it as part of “All Others”. This change in composition of the reportable segments has been retrospectively applied to the corresponding results for the three and six months ended March 29, 2025.

Previous wording

The following tables reflect our income from operations for the three months ended January 3, 2026 and December 28, 2024:

Current wording

The following tables reflect our income from operations for the three and six months ended April 4, 2026 and March 29, 2025:

Previous wording

Our net revenue for the three months ended January 3, 2026 increased as compared to our net revenue for the three months ended December 28, 2024. The increase in net revenue is primarily due to higher volume in Ball Bonding Equipment and APS and partially offset by the lower volume in Wedge Bonding Equipment, Advanced Solutions and All Others, as further outlined in the tables presented immediately below.

Current wording

Our net revenue for the three and six months ended April 4, 2026 increased as compared to our net revenue for the three and six months ended March 29, 2025. The increase in net revenue is primarily due to higher volume in Ball Bonding Equipment and APS and partially offset by the lower volume in Wedge Bonding Equipment, Advanced Solutions and All Others, as further outlined in the tables presented immediately below.

Previous wording

The following tables reflect net revenue for the three months ended January 3, 2026 and December 28, 2024:

Current wording

The following tables reflect net revenue for the three and six months ended April 4, 2026 and March 29, 2025:

Previous wording

For the three months ended January 3, 2026, 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 LED which is included in the industrial end market and partially offset by higher customer purchases in the general semiconductor end market.

Current wording

For the six months ended April 4, 2026, Advanced Solutions net revenue decreased by $4.1 million, as compared to the prior year period. This decrease was primarily due to an approximately $14.5 million decrease in volume of customer purchases in the LED product line, which is reported within the automotive and industrial end market. This decrease was partially offset by an approximately $10.4 million increase in customer purchase volumes in the general semiconductor end market due to customer technology transitions.

Previous wording

The following tables reflect gross profit margin as a percentage of net revenue by reportable segments for the three months ended January 3, 2026 and December 28, 2024:

Current wording

The following tables reflect gross profit margin as a percentage of net revenue by reportable segments for the three and six months ended April 4, 2026 and March 29, 2025:

Previous wording

For the three months ended January 3, 2026, 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 higher sales of higher margin products and a shift in customer mix, including higher sales to customers where we achieve higher average margins.

Current wording

For the three and six months ended April 4, 2026, the decrease in Ball Bonding Equipment gross profit margin as compared to the prior year period was primarily due to a less favorable customer mix, including higher sales to customers where we achieve lower average margins. This decrease was partially offset by a favorable product mix, including higher sales of higher margin products.

Previous wording

For the three months ended January 3, 2026, 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.

Current wording

For the three and six months ended April 4, 2026, the decrease in Wedge Bonding Equipment gross profit margin as compared to the prior year period was primarily due to a less favorable product mix, including higher sales of lower margin products.

Previous wording

For the three months ended January 3, 2026, the decrease in Advanced Solutions gross profit margin as compared to the prior year period was primarily due to a less favorable product mix. In addition, the prior year period included revenue recognized from delivered products relating to the cancellation of the Project.

Current wording

For the six months ended April 4, 2026, the decrease in Advanced Solutions gross profit margin as compared to the prior year period was primarily due to a less favorable product mix. In addition, the prior year period included revenue recognized from delivered products relating to the cancellation of the Project.

Previous wording

For the three months ended January 3, 2026, the decrease in APS gross profit margin as compared to the prior year period was primarily driven by unfavorable product mix from spares and services and unfavorable pricing from bonding tools.

Current wording

For the three and six months ended April 4, 2026, the decrease in APS gross profit margin as compared to the prior year period was primarily due to a less favorable product mix from spares and services and less favorable pricing from bonding tools.

Previous wording

For the three months ended January 3, 2026, the increase in gross profit margin for the “All Others” category as compared to the prior year period was primarily driven by sales of previously impaired inventory as a result of the cessation of the EA equipment business.

Current wording

For the three and six months ended April 4, 2026, the increase in gross profit margin for the “All Others” category as compared to the prior year period was primarily due to sales of previously impaired inventory as a result of the cessation of the EA equipment business. In addition, the prior year period included inventory write-down charges incurred as a result of the cessation of the EA equipment business.

Previous wording

The following tables reflect operating expenses for the three months ended January 3, 2026 and December 28, 2024:

Current wording

The following tables reflect operating expenses for the three and six months ended April 4, 2026 and March 29, 2025:

Previous wording

For the three months ended January 3, 2026, the higher R&D expenses as compared to the prior year period were primarily due to a $2.5 million consortium participation fee and $0.7 million higher staff costs. This was partially offset by $0.5 million lower spending on prototype materials.

Current wording

For the six months ended April 4, 2026, the higher R&D expenses as compared to the prior year period were primarily due to a $2.5 million consortium participation fee and $2.0 million higher spending on prototype materials. This was partially offset by $1.0 million in lower professional services.

Previous wording

For the three months ended December 28, 2024, 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 the Project, a $3.2 million gain on the disposal of a subsidiary and a $1.7 million gain from the supplier settlement.

Current wording

For the six months ended March 29, 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 the Project, a $3.2 million gain on the disposal of a subsidiary and a $1.7 million gain from the supplier settlement.

Previous wording

The following tables reflect income from operations by reportable segments for the three months ended January 3, 2026 and December 28, 2024.

Current wording

The following tables reflect income / (loss) from operations by reportable segments for the three and six months ended April 4, 2026 and March 29, 2025.

Previous wording

The following tables reflect interest income and interest expense for the three months ended January 3, 2026 and December 28, 2024:

Current wording

The following tables reflect interest income and interest expense for the three and six months ended April 4, 2026 and March 29, 2025:

Previous wording

For the three months ended January 3, 2026, 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, and lower short-term investments balances.

Current wording

For the three and six months ended April 4, 2026, 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, and lower short-term investments balances.

Previous wording

The following table reflects the provision for income taxes and the effective tax rate for the three months ended January 3, 2026 and December 28, 2024:

Current wording

The following table reflects the provision for income taxes and the effective tax rate for the three and six months ended April 4, 2026 and March 29, 2025:

Previous wording

For the three months ended January 3, 2026, the effective tax rate is higher than the U.S. federal statutory tax rate primarily due to nondeductible expenses, deemed income, and taxes on undistributed foreign earnings, partially offset by tax credits.

Current wording

For the three and six months ended April 4, 2026, the effective tax rate is lower than the U.S. federal statutory tax rate primarily due to tax credits and earnings of foreign subsidiaries subject to tax at different rates than the U.S., partially offset by nondeductible expenses, deemed income, and taxes on undistributed foreign earnings.

Previous wording

The following table reflects a summary of the Consolidated Condensed Statements of Cash Flow information for the three months ended January 3, 2026 and December 28, 2024:

Current wording

The following table reflects a summary of the Consolidated Condensed Statements of Cash Flow information for the six months ended April 4, 2026 and March 29, 2025:

Previous wording

The net cash used in operating activities was primarily due to a net unfavourable change in operating assets and liabilities of $37.7 million, partially offset by a net income of $16.8 million and non-cash adjustments to net income of $11.9 million. The net change in operating assets and liabilities was primarily driven by an increase in accounts and other receivable of $32.2 million, an increase in inventories of $20.3 million This was partially offset by a decrease in prepaid expenses and other current assets of $6.2 million, and an increase in income tax payable of $6.9 million.

Current wording

The net cash provided by operating activities was primarily due to a net income of $51.9 million and non-cash adjustments to net income of $22.9 million, partially offset by a net unfavourable change in operating assets and liabilities of $73.5 million. The net change in operating assets and liabilities was primarily driven by an increase in accounts and other receivable of $72.1 million and an increase in inventories of $50.3 million. This was partially offset by an increase in accounts payable, accrued expenses and other liabilities of $39.5 million and a decrease in prepaid expenses and other current assets of $14.4 million.

Previous wording

The increase in accounts and other receivable in the three months ended January 3, 2026 was mainly due to higher sales for the period. The increase in inventories was due to the higher material purchases. The decrease in prepaid expenses and other current assets was mainly due to the reduction in supplier prepayments. The increase in income tax payable was primarily due timing of tax payments and higher profitability.

Current wording

The increase in accounts and other receivable in the six months ended April 4, 2026 was mainly due to higher sales for the period. The increase in inventories was due to the higher material purchases. The increase in accounts payable, accrued expenses and other liabilities was due to higher material purchases and higher accrued employee compensation The decrease in prepaid expenses and other current assets was mainly due to the reduction in supplier prepayments.

Previous wording

Net cash provided by investing activities was due to net maturity of short-term investments of $96.0 million partially offset by capital expenditures of $2.7 million.

Current wording

Net cash provided by investing activities was due to net maturity of short-term investments of $145.0 million, partially offset by capital expenditures of $6.8 million.

Previous wording

Net cash used in financing activities was primarily due to common stock repurchases of $6.7 million and dividend payments of $10.7 million.

Current wording

Net cash used in financing activities was primarily due to common stock repurchases of $6.9 million and dividend payments of $10.7 million.

Previous wording

The increase in net cash used in operating activities was primarily due to a net income of $81.6 million and non-cash adjustments to net income of $6.4 million, partially offset by a net unfavourable change in operating assets and liabilities of $69.1 million. The net change in operating assets and liabilities was primarily driven by an increase in accounts and other receivable of $53.9 million, an increase in inventories of $9.1 million, and a decrease in accounts payable and accrued expenses and other current liabilities of $15.8 million . This was partially offset by an increase in income tax payable of $9.8 million and a decrease in prepaid expenses and other current assets of $1.9 million.

Current wording

The increase in net cash provided by operating activities was primarily due to non-cash adjustments to net loss of $89.0 million and a net favourable change in operating assets and liabilities of $12.6 million, partially offset by a net loss of $2.9 million. The non-cash adjustments were primarily due to impairment charges of $39.8 million and an inventory write-down of $28.9 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 $20.1 million, a decrease in prepaid expenses and other current assets of $7.4 million, and a net increase in accounts payable, accrued expenses and other liabilities of $3.3 million. This was partially offset by an increase in inventories of $11.3 million after excluding the impact of the inventory write-down as shown above, and a decrease in income tax payable of $5.8 million.

Previous wording

The increase in accounts and other receivable in the three months ended December 28, 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 accounts payable and accrued expenses and other current liabilities was primarily due to lower customer advances, accrued employee compensation and lower material purchases. The increase in income tax payable was primarily due to higher profitability which included the reimbursement from the cancellation of the Project which was recorded as a discrete item in the quarter.

Current wording

The decrease in accounts and other receivable in the six months ended March 29, 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 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.

Previous wording

Net cash provided by investing activities was due to net maturity of short-term investments of $90.0 million and net cash received from the disposal of a subsidiary of $2.6 million, and offset by capital expenditures of $10.2 million and investment in a private equity fund of $0.4 million.

Current wording

Net cash provided by investing activities was due to net maturity of short-term investments of $55.0 million and net cash received from the disposal of a subsidiary of $2.5 million, partially offset by capital expenditures of $12.2 million and investment in a private equity fund of $1.8 million.

Previous wording

Net cash used in financing activities was primarily due to common stock repurchases of $37.2 million and dividend payments of $10.8 million.

Current wording

Net cash used in financing activities was primarily due to common stock repurchases of $58.5 million and dividend payments of $21.8 million.

Previous wording

We expect our aggregate fiscal 2026 capital expenditures to be between approximately $10.0 million and $14.0 million, of which approximately $2.1 million has been incurred through the first quarter. The actual amounts for 2026 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.

Current wording

We expect our aggregate fiscal 2026 capital expenditures to be between approximately $20.0 million and $24.0 million, of which approximately $5.7 million has been incurred through the second quarter. The actual amounts for 2026 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.

Previous wording

As of January 3, 2026 and October 4, 2025, approximately $392.6 million and $414.3 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.

Current wording

As of April 4, 2026 and October 4, 2025, approximately $416.4 million and $414.3 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.

Previous wording

During the three months ended January 3, 2026, the Company repurchased a total of approximately 168.0 thousand shares of common stock under the New Program at a cost of approximately $6.7 million.

Current wording

During the three and six months ended April 4, 2026, the Company repurchased a total of approximately 3.0 thousand and 171.0 thousand shares of common stock under the New Program at a cost of approximately $0.1 million and $6.8 million, respectively.

Previous wording

As of January 3, 2026, our remaining stock repurchase authorization under the New Program was approximately $227.1 million.

Current wording

As of April 4, 2026, our remaining stock repurchase authorization under the New Program was approximately $227.0 million.

Previous wording

On December 5, 2025, the Board of Directors declared a quarterly dividend of $0.205 per share of common stock. Dividends paid during the three months ended January 3, 2026 totaled $10.7 million. 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.

Current wording

On December 5, 2025, the Board of Directors declared a quarterly dividend of $0.205 per share of common stock. Dividends paid during the six months ended April 4, 2026 totaled $10.7 million. 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.

Previous wording

As of January 3, 2026, the Company had deferred tax liabilities of $35.6 million and unrecognized tax benefits within the income taxes payable for uncertain tax positions of $16.9 million, inclusive of accrued interest on uncertain tax positions of $3.4 million, substantially all of which would affect our effective tax rate in the future, if recognized.

Current wording

As of April 4, 2026, the Company had deferred tax liabilities of $34.9 million and unrecognized tax benefits within the income taxes payable for uncertain tax positions of $17.3 million, inclusive of accrued interest on uncertain tax positions of $3.8 million, substantially all of which would affect our effective tax rate in the future, if recognized.