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GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended
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Sep. 28, 2024
Goodwill and Intangible Assets Disclosure [Abstract] |
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 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. During the fiscal year ended September 30, 2023, 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. The Company concluded that a triggering event had occurred during the third quarter in the fiscal year ended September 30, 2023 in connection with the Lithography reporting unit, which is grouped within the “All Others” category. The triggering event occurred based on the long-term financial and business outlook for the Lithography reporting unit updated as part of the Company’s annual strategic planning process performed during the third quarter. This updated outlook projected that the near-term projected cash flows are expected to be lower than previously forecasted due to a shift in market penetration timeline and increase in cost of materials being purchased. 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. Accordingly, the Company has performed the goodwill impairment test for the Lithography reporting unit with reference to the guidance under ASC 350. The Company used a discounted cash flow model to determine the fair value of the Lithography reporting unit. The cash flow projections used within the discounted cash flow model were prepared using the forecasted financial results of the reporting unit, which was based upon underlying estimates of the total market size using independent third party industry reports, and market share data developed using the combination of independent third-party data and our internal data. Significant assumptions used to determine the fair value of the Lithography reporting unit include revenue forecasts, terminal growth rate of 2.5%, working capital, tax rate and a weighted average cost of capital (discount rate) of 11.7%. 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. Based on the calculation, the Company determined that the carrying value exceeded the fair value of this reporting unit which resulted in a goodwill impairment charge of $9.8 million, representing the entire goodwill assigned to this reporting unit. This goodwill impairment charge was reflected in the Company’s Consolidated Statements of Operations in fiscal 2023. The Company performed its annual impairment test in the fourth quarter of fiscal 2024 and elected to perform the quantitative impairment test as permitted by ASC 350. Based on the quantitative assessment performed on all its reporting units, the Company concluded that no impairment on the Company's recorded goodwill was required. The following table summarizes the changes in the Company’s recorded goodwill based on its reportable segments as of September 28, 2024 and September 30, 2023:
(in thousands) |  | Wedge Bonding Equipment |  | APS |  | All Others |  | Total
Balance at September 30, 2023(1) |  | 18,280 |  |  | 26,109 |  |  | 44,284 |  |  | 88,673
Other |  | — |  |  | 159 |  |  | 916 |  |  | 1,075 |
Balance at September 28, 2024 |  | 18,280 |  |  | 26,268 |  |  | 45,200 |  |  | 89,748 |
(1) Cumulative goodwill impairment as of September 30, 2023 was approximately $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 evaluation of the goodwill impairment in the Lithography reporting unit performed during the third quarter of fiscal year ended September 30, 2023, the Company assessed tangible and intangible assets for impairment prior to performing the first step of the goodwill impairment test. The Company first compared the carrying value to the undiscounted cash flows of the reporting unit which was lower. Subsequently, the Company proceeded to measure the impairment loss by comparing the carrying value against the discounted cash flow model to determine the fair value of the asset group for the Lithography reporting unit, where significant assumptions include revenue forecasts, terminal growth rate of 2.5%, working capital, tax rate and a weighted average cost of capital (discount rate) of 11.7%. As a result of the analysis, the Company recorded an impairment charge of $6.9 million on the developed technology reported within the “All Others” category in fiscal 2023. The impairment of intangible assets was reflected in the Company’s Consolidated Statements of Operations in fiscal 2023. No impairment charge was required in the fiscal year ended September 28, 2024 . The following table reflects net intangible assets as of September 28, 2024 and September 30, 2023:
|  |  | As of September 28, 2024 |  | As of September 30, 2023
(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 | $ | 83,401 |  |  | $ | (61,575) |  |  | $ | 21,826 |  |  | $ | 80,959 |  |  | (55,877) |  |  | $ | 25,082 |
Customer relationships |  | 5.0 to 8.0 | 37,625 |  |  | (35,916) |  |  | 1,709 |  |  | 36,764 |  |  | (34,789) |  |  | 1,975 |
Trade and brand name |  | 7.0 to 8.0 | 7,272 |  |  | (7,272) |  |  | — |  |  | 7,130 |  |  | (7,130) |  |  | — |
Other intangible assets |  | 1.0 to 8.0 | 5,617 |  |  | (4,372) |  |  | 1,245 |  |  | 5,617 |  |  | (3,776) |  |  | 1,841 |
In-process research and development |  | N.A | 459 |  |  | — |  |  | 459 |  |  | 459 |  |  | — |  |  | 459 |
|  |  | $ | 134,374 |  |  | $ | (109,135) |  |  | $ | 25,239 |  |  | $ | 130,929 |  |  | $ | (101,572) |  |  | $ | 29,357 |
The following table reflects estimated annual amortization expense related to intangible assets as of September 28, 2024:
| As of
(in thousands) | September 28, 2024
Fiscal 2025 | $ | 5,198 |
Fiscal 2026 | $ | 5,198 |
Fiscal 2027 | $ | 4,923 |
Fiscal 2028 | $ | 4,479 |
Fiscal 2029 | $ | 3,420 |
Fiscal 2030 and thereafter | $ | 2,021 |
Total amortization expense | $ | 25,239 |

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 30 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-30/tableOfContent Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-20/tableOfContent + Details
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