Kulicke & Soffa (NASDAQ:KLIC) Industries, Inc. (NASDAQ: KLIC), a global provider of semiconductor packaging and electronic assembly solutions, today announced the cancellation of a previously undisclosed advanced display technology project, referred to as Project W, by one of its strategic customers. This cancellation has led the company to initiate a wind-down of operations related to the project.
The company disclosed that as a result of this termination, it expects to record pre-tax charges ranging from $110 million to $130 million. These charges include a combination of cash expenditures and non-cash impairment charges. Specifically, Kulicke & Soffa anticipates one-time termination benefits to cost between $3 million and $5 million, contract termination charges to range from $8 million to $13 million, and other associated costs to be between $6 million and $11 million.
Additionally, the company is preparing for non-cash inventory write-down charges estimated to be between $49 million and $53 million, as well as impairment charges related to long-lived assets projected to be between $44 million and $48 million. These non-cash charges are expected to be recognized in the second fiscal quarter of 2024, while the cash expenditures are anticipated to be accounted for throughout the fiscal year.
Kulicke & Soffa has outlined its plan to complete the majority of its wind-down activities by the end of the fiscal year 2024. However, the company has indicated that the estimated charges and the timing of these charges are based on assumptions that could change, leading to materially different actual amounts.
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