XML 35 R24.htm IDEA: XBRL DOCUMENT
v3.25.1

CESSATION OF BUSINESS | 6 Months Ended
--- | ---
Mar. 29, 2025
Cessation Of Business [Abstract] |
CESSATION OF BUSINESS | 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. In the previous 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. As of the 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 intends to initiate in its 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 period ended March 29, 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. The following table summarizes the charges resulting from the intended cessation of the EA equipment business.
|  | Three and Six Months Ended March 29, 2025
|  | Cost of sales |  | Impairment charges |  | Selling, general and administrative |  | Total
Inventory write-down |  | $ | 28,919 |  |  | $ | — |  |  | $ | — |  |  | $ | 28,919 |
Impairment charges related to goodwill and intangible assets |  | $ | — |  |  | $ | 34,870 |  |  | $ | — |  |  | $ | 34,870 |
Impairment charges relating to long-lived assets |  | $ | — |  |  | $ | 4,947 |  |  | $ | — |  |  | $ | 4,947 |
Employee termination benefits |  | $ | — |  |  | $ | — |  |  | $ | 8,180 |  |  | $ | 8,180 |
Adverse purchase commitments |  | $ | 9,664 |  |  | $ | — |  |  | $ | — |  |  | $ | 9,664 |
|  | $ | 38,583 |  |  | $ | 39,817 |  |  | $ | 8,180 |  |  | $ | 86,580 |
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. We recorded a write-down to inventory totaling $28.9 million with a corresponding increase to cost of sales in our consolidated condensed statement of operations for the three and six months ended March 29, 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. 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 At March 29, 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 quarter ended March 29, 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. Adverse purchase commitments During the quarter ended March 29, 2025, the Company accrued for a loss of $9.7 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.

X
- Definition Cessation Of Business + References No definition available. + Details
Name: | klic_CessationOfBusinessAbstract
Namespace Prefix: | klic_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Cessation Of Business + References No definition available. + Details
Name: | klic_CessationOfBusinessTextBlock
Namespace Prefix: | klic_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration