Kulicke and Soffa Industries : Regulation FD Disclosure - Form 8-K
March 11, 2024 at 05:06 pm EDT
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Item 2.05 Cost Associated with Exit or Disposal Activities.
Previously referred to as Project W, the Company has been engaged with one of its strategic customers (the "Customer") to support the Customer with the development and future mass production of certain technologies relating to advanced display (the "Project"). In connection with the Customer's strategic review of its business, the Customer has informed the Company that it has cancelled the Project.
In connection with the foregoing, on March 11, 2024, the Company committed to a plan to cease operational activities and commence wind down activities concerning various aspects of the Project, as a result of which the Company expects to incur pre-tax charges, including impairments, in the range of $110 million and $130 million.
The pre-tax cash expenditures include (i) between approximately $3 million and $5 million of one-time termination benefits, (ii) between approximately $8 million and $13 million of contract termination charges, and (iii) between approximately $6 million and $11 million of other associated costs.
The Company also expects to incur pre-tax non-cash impairment charges of (i) between approximately $49 million and $53 million of inventory write-down charges, and (ii) between approximately $44 million and $48 million of impairment charges relating to long-lived assets.
The Company plans to recognize the non-cash inventory write-down and impairment charges in the second fiscal quarter of 2024, with the remaining cash expenditures to be recognized over the course of fiscal year 2024.
The Company expects to complete majority of its wind down activities by the end of fiscal year 2024.
The estimates of the charges and expenditures that the Company expects to incur, and the timing thereof, are subject to a number of assumptions and actual amounts may differ materially from estimates.
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Kulicke and Soffa Industries, Inc. specializes in developing semiconductor and electronics assembly solutions. It designs, develops, manufactures, and sells capital equipment, consumables and services used to assemble semiconductors and electronic devices, such as integrated circuits, power discrete, light-emitting diode (LEDs), advanced displays and sensors. The Company operates in four segments. Its Ball Bonding Equipment segment is in designs, development, manufacture, and sell of ball bonding equipment and wafer level bonding equipment. Its Wedge Bonding Equipment segment is in design, development, manufacture, and sale of wedge bonding equipment. The Company's Advanced Solutions is in design, development, manufacture, and sells advanced display, die-attach and thermocompression systems and solutions. Its aftermarket products and services segment is in the design, development, manufacture and sale of a variety of tools, spares and services for the Company's equipment.
KULICKE AND SOFFA INDUSTRIES, INC. 
