LEASES

9 Months Ended

Jun. 28, 2025

LEASES

We have entered into various non-cancellable operating and finance lease agreements for certain of our offices, manufacturing, technology, sales support and service centers, equipment, and vehicles. We determine if an arrangement is a lease, or contains a lease, at inception and record the leases in our financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor. Our lease terms may include one or more options to extend the lease terms, for periods from one year to 20 years, when it is reasonably certain that we will exercise that option. As of June 28, 2025, there were no options to extend the lease which was recognized as a right-of-use (“ROU”) asset, or a lease liability. We have lease agreements with lease and non-lease components, and non-lease components are accounted for separately and not included in our leased assets and corresponding liabilities. We have elected not to present short-term leases on the Consolidated Condensed Balance Sheets as these leases have a lease term of 12 months or less at lease inception.

Operating leases are included in operating ROU assets, current operating lease liabilities and non-current operating lease liabilities, and finance leases are included in property, plant and equipment, accrued expenses and other current liabilities, and other liabilities on the Consolidated Condensed Balance Sheets. As of June 28, 2025 and September 28, 2024, our finance leases are not material.

The following table shows the components of lease expense:





	Three months ended				Nine months ended
(in thousands)	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Operating lease expense (1)	$	2,239	$	2,310	$	6,956	$	7,725

(1)Operating lease expense includes short-term lease expense and variable lease expenses, which is immaterial for the three and nine months ended June 28, 2025 and June 29, 2024.

The following table shows the cash flows arising from lease transactions. Cash payments related to short-term leases are not included in the measurement of operating lease liabilities, and, as such, are excluded from the amounts below:





	Nine months ended
(in thousands)	June 28, 2025		June 29, 2024
Cash paid for amounts included in the measurement of lease liabilities:


Operating cash outflows from operating leases	$	7,909	$	7,867

The following table shows the weighted-average lease terms and discount rates for operating leases:





	As of
	June 28, 2025		September 28, 2024
Operating leases:
Weighted-average remaining lease term (in years):	7.0		7.3
Weighted-average discount rate:	7.1	%	7.2	%

Future lease payments, excluding short-term leases, as of June 28, 2025, are detailed as follows:




	As of
(in thousands)	June 28, 2025
Remaining fiscal 2025	$	2,441
Fiscal 2026	8,422
Fiscal 2027	6,070
Fiscal 2028	5,294
Fiscal 2029	5,163
Thereafter	18,893
Total minimum lease payments	46,283
Less: Interest	$	9,934
Present value of lease obligations	$	36,349
Less: Current portion	$	6,566
Long-term portion of lease obligations	$	29,783

KULICKE & SOFFA INDUSTRIES INC 10-Q