KULICKE & SOFFA INDUSTRIES INCKLIC
KULICKE & SOFFA INDUSTRIES INC Goodwill & Intangibles Disclosure
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.
Impairment pertaining to the Lithography reporting unit in fiscal 2023
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, which is a non-cash charge, has been reflected in the Company’s Consolidated Statements of Operations for the fiscal year ended September 30, 2023.
Impairment pertaining to the reporting units within APS and "All Others" category in fiscal 2025
During the fiscal year ended October 4, 2025, 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. In the quarter ended March 29, 2025, the Company concluded that a triggering event had occurred in connection with one reporting unit within the APS reportable segment and one reporting unit within the "All Others" category. The triggering event occurred based on the approval of the strategic plan related to the cessation of the EA equipment business. In view of the cessation of the EA equipment business and the related reduction in revenue and future cash flow for the reporting units, the Company performed a qualitative assessment and determined that it is more likely than not that this will reduce the fair value of the impacted reporting units below their carrying amount.
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, not to exceed the amount of goodwill assigned to the reporting unit. Accordingly, the Company performed a quantitative impairment test and estimated the fair value of each reporting unit to be less than its carrying value.
The Company used a discounted cash flow model to determine the fair value of each reporting unit within the APS reportable segment and "All Others" category respectively, and as such they were classified as Level 3 assets in the fair value hierarchy. The cash flow projections used within the discounted cash flow models were prepared using the forecasted financial results of each reporting unit, which was based upon the underlying assumption that future revenue and cash flows will diminish once the cessation of business is completed. Significant assumptions used to determine the fair value of the respective reporting units include revenue forecasts, a terminal growth rate of 2.5%, working capital, tax rate and a weighted average cost of capital (discount rate) of 12.6%. Please refer to Note 17: Cessation of Business for further information on the cessation of business. As a result, a goodwill impairment charge, which is a non-cash charge that represents the entire goodwill assigned to the respective reporting units, of $19.2 million within the APS reportable segment and "All Others" category has been recorded and reflected in the for the fiscal year ended October 4, 2025.
The Company performed its annual impairment test in the fourth quarter of fiscal 2025 and elected to perform the quantitative impairment test as permitted by ASC 350 for another reporting unit within the "All Others" category and the qualitative impairment assessment for all of its remaining reporting units. Based on the quantitative and qualitative assessments performed, the Company concluded that no impairment on the Company's recorded goodwill was required in addition to the impairment recorded in the quarter ended March 29, 2025.
The following table summarizes the changes in the Company’s recorded goodwill based on its reportable segments as of October 4, 2025 and September 28, 2024:
| (in thousands) | Wedge Bonding Equipment | APS | All Others | Total | ||||||||||||||||||||||
| Balance at September 30, 2023 | 18,280 | 26,109 | 44,284 | 88,673 | ||||||||||||||||||||||
| Other | — | 159 | 916 | 1,075 | ||||||||||||||||||||||
| Balance at September 28, 2024 | (1) | 18,280 | 26,268 | 45,200 | 89,748 | |||||||||||||||||||||
| Goodwill impairment | — | (2,850) | (16,348) | $ | (19,198) | |||||||||||||||||||||
| Other | — | (152) | (876) | $ | (1,028) | |||||||||||||||||||||
| Balance at October 4, 2025 | (1) | 18,280 | 23,266 | 27,976 | 69,522 | |||||||||||||||||||||
(1) Cumulative goodwill impairment as of September 28, 2024 and October 4, 2025 was approximately $45.0 million and $64.2 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.
Impairment pertaining to the Lithography reporting unit in fiscal 2023
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 determined an impairment charge of $6.9 million on the developed technology reported within the “All Others” category for the fiscal year ended September 30, 2023. The impairment of intangible assets is a non-cash charge which has been reflected in the Company’s Consolidated Statements of Operations for the fiscal year ended September 30, 2023.
Impairment pertaining to the cessation of EA equipment business in fiscal 2025
In connection with the cessation of the EA equipment business, the Company recorded an impairment charge of $15.7 million on the developed technology reported within the APS reportable segment and “All Others” category in
the fiscal year ended October 4, 2025. The impairment of intangible assets is a non-cash charge which has been reflected in the Consolidated Statements of Operations for the fiscal year ended October 4, 2025.
The following table reflects net intangible assets as of October 4, 2025 and September 28, 2024:
| As of October 4, 2025 | As of September 28, 2024 | |||||||||||||||||||||||||||||||||||||||||||
| (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 | 7.0 to 8.0 | $ | 37,461 | $ | (34,576) | $ | 2,885 | $ | 83,401 | $ | (61,575) | $ | 21,826 | |||||||||||||||||||||||||||||||
| Customer relationships | 5.0 to 8.0 | $ | 21,430 | $ | (19,988) | $ | 1,442 | $ | 37,625 | $ | (35,916) | $ | 1,709 | |||||||||||||||||||||||||||||||
| Trade and brand name | 8.0 | $ | 4,600 | $ | (4,600) | $ | — | $ | 7,272 | $ | (7,272) | $ | — | |||||||||||||||||||||||||||||||
| Other intangible assets | 1.0 to 8.0 | $ | 5,618 | $ | (4,804) | $ | 814 | $ | 5,617 | $ | (4,372) | $ | 1,245 | |||||||||||||||||||||||||||||||
| In-process research and development | N.A | $ | 459 | $ | — | $ | 459 | $ | 459 | $ | — | $ | 459 | |||||||||||||||||||||||||||||||
| Total | $ | 69,568 | $ | (63,968) | $ | 5,600 | $ | 134,374 | $ | (109,135) | $ | 25,239 | ||||||||||||||||||||||||||||||||
The following table reflects estimated annual amortization expense related to intangible assets as of October 4, 2025:
| As of | |||||
| (in thousands) | October 4, 2025 | ||||
| Fiscal 2026 | 1,250 | ||||
| Fiscal 2027 | 1,013 | ||||
| Fiscal 2028 | 922 | ||||
| Fiscal 2029 | 922 | ||||
| Fiscal 2030 | 922 | ||||
| Thereafter | 571 | ||||
| Total amortization expense | 5,600 | ||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Nov 20, 2025 | Showing above |
| 2024 | Nov 14, 2024 | |
| 2023 | Nov 16, 2023 | |
| 2022 | Nov 17, 2022 | |
| 2021 | Nov 18, 2021 | |
| 2020 | Nov 20, 2020 | |
| 2019 | Nov 15, 2019 | |
| 2018 | Nov 20, 2018 | |
| 2017 | Nov 16, 2017 | |
| 2016 | Nov 17, 2016 | |
| 2015 | Nov 18, 2015 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.