0000056978-25-000071
SEC filingQ3 FY25 revenue fell 18.3% YoY to $148.4M, with gross margin flat; operating loss of $6.1M vs profit prior year due to lower volumes.
For the three months ended June 28, 2025, net revenue decreased 18.3% YoY to $148.4 million, driven by lower volumes across most segments. Gross profit declined 18.3% to $69.2 million, but gross margin remained stable at 46.7%, up 10 basis points from 46.6% in the prior year period. Operating expenses decreased slightly by 1.5% to $75.3 million, as lower R&D spending was partially offset by higher SG&A costs. This resulted in an operating loss of $6.1 million, compared to operating income of $8.3 million in the prior year quarter. The decline in operating performance was primarily attributable to the revenue drop and a $1.1 million net unfavorable foreign exchange impact in SG&A.
Segment performance varied widely. Ball Bonding Equipment revenue fell 18.5% to $76.0 million, with operating income down 15.4% to $23.5 million, reflecting lower customer purchases in general semiconductor and memory markets. Wedge Bonding Equipment revenue decreased 15.4% to $22.1 million but operating income dropped 50.2% to $2.1 million, impacted by unfavorable product and customer mix. Advanced Solutions saw revenue plunge 48.4% to $10.8 million, and operating loss widened to $10.7 million, driven by lower general semiconductor sales. APS revenue was relatively resilient, down only 4.2% to $36.4 million, but operating income fell 35.8% to $7.3 million due to lower margins from spares/services and bonding tool pricing. All Others revenue declined 6.2% to $3.0 million, with operating loss improving to $6.2 million from $8.3 million. Overall, the revenue mix shifted slightly toward lower-margin segments, but gross margin improvements in Ball Bonding and Advanced Solutions partially offset.
Management provided limited quantitative guidance but noted that the intended cessation of the Electronics Assembly (EA) equipment business is ongoing, with wind-down activities expected to be substantially completed by the first half of fiscal 2026. The company incurred $39.8 million in impairment charges and $31.6 million in inventory write-downs in the nine-month period related to this exit. Additionally, the cancellation of Project W resulted in a $76.0 million gain from customer reimbursement and other settlements. Capital expenditures for fiscal 2025 are forecasted between $8 million and $12 million, with $7.6 million incurred through Q3. Despite macroeconomic headwinds, including tariffs and geopolitical tensions, management believes existing cash and cash flows are sufficient for at least the next twelve months. The company continues to return capital via dividends and share repurchases, with $49.5 million in buybacks under the new $300 million program through Q3. The outlook remains cautious due to limited visibility and ongoing inventory adjustments in the semiconductor industry.
Operating cash flow (CFO) of $106.2 million was significantly better than the prior year's $(0.6) million, driven by a net loss of $6.2 million reversed by non-cash adjustments (depreciation $13.9M, impairment $39.8M, inventory valuation $43.1M, deferred taxes $1.3M, equity compensation $20.7M) and working capital inflows. Key working capital sources included a $20.0M decrease in receivables and a $10.5M increase in payables, partially offset by a $21.4M inventory build and $7.5M income tax payments. The company generated positive free cash flow (implicitly CFO less capex of $14.2M) despite the net loss.
Capital intensity is moderate, with capex of $14.2M (13.4% of CFO). The company returned $112.8M to shareholders via buybacks ($80.1M) and dividends ($32.7M), fully covered by CFO. Investing activities also included $40.0M net from short-term investment maturities and $2.5M from subsidiary disposal.
One-time items: Impairment charges of $39.8M and a $3.2M gain on subsidiary disposal. The operating cash flow improvement reflects strong working capital management and cost controls.