10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 28, 2013

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 0-12853

ELECTRO SCIENTIFIC INDUSTRIES, INC.

Oregon	93-0370304
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
13900 N.W. Science Park Drive, Portland, Oregon	97229
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 503-641-4141

Registrant’s web address: www.esi.com

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated  filer	ý
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý

The number of shares outstanding of the Registrant’s Common Stock as of February 3, 2014 was 29,915,584 shares.

ELECTRO SCIENTIFIC INDUSTRIES, INC.

2014 FORM 10-Q QUARTERLY REPORT

TABLE OF CONTENTS

Part I	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets - at December 28, 2013 and March 30,2013	3
	Condensed Consolidated Statements of Operations - for the fiscal quarter and three fiscal quarters ended December 28, 2013 and December 29, 2012	4
	Condensed Consolidated Statements of Comprehensive (Loss) Income - for the fiscal quarter and three fiscal quarters ended December 28, 2013 and December 29, 2012	4
	Condensed Consolidated Statements of Cash Flows - for the three fiscal quarters ended December 28, 2013 and December 29, 2012	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	22
Item 4.	Controls and Procedures	23
Part II	OTHER INFORMATION
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	24
Item 4.	Mine Safety Disclosures	31
Item 6.	Exhibits and Financial Statement Schedules	32
SIGNATURES		33

ELECTRO SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)	Dec 28, 2013		Mar 30, 2013
ASSETS
Current assets:
Cash and cash equivalents	$	77,174	$	88,913
Short-term investments	46,299		56,144
Trade receivables, net of allowances of $464 and $442	27,479		31,779
Inventories	68,626		63,067
Shipped systems pending acceptance	1,179		1,007
Deferred income taxes, net	1,714		1,682
Other current assets	4,796		3,898
Total current assets	227,267		246,490
Non-current assets:
Non-current investments	6,024		12,329
Property, plant and equipment, net of accumulated depreciation of $97,056 and $98,734	27,830		27,894
Non-current deferred income taxes, net	3,680		3,766
Goodwill	7,889		7,889
Acquired intangible assets, net of accumulated amortization of $17,524 and $15,393	7,696		9,088
Other assets	19,199		14,752
Total assets	$	299,585	$	322,208
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	14,191	$	16,958
Accrued liabilities	20,944		24,930
Deferred revenue	6,694		10,196
Total current liabilities	41,829		52,084
Non-current liabilities:
Income taxes payable	6,208		5,982
Commitments and contingencies
Shareholders’ equity:
Preferred stock, without par value; 1,000 shares authorized; no shares issued	—		—
Common stock, without par value; 100,000 shares authorized; 30,095 and 29,583 issued and outstanding	181,844		176,631
Retained earnings	69,368		87,228
Accumulated other comprehensive income, other	336		283
Total shareholders’ equity	251,548		264,142
Total liabilities and shareholders’ equity	$	299,585	$	322,208

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

3

ELECTRO SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Fiscal quarter ended						Three fiscal quarters ended
(In thousands, except per share amounts)	Dec 28, 2013			Dec 29, 2012			Dec 28, 2013			Dec 29, 2012
Net sales	$	38,267		$	37,930		$	144,086		$	177,051
Cost of sales	21,986			24,697			83,787			106,645
Gross profit	16,281			13,233			60,299			70,406
Operating expenses:
Selling, service and administration	12,408			11,696			41,206			42,473
Research, development and engineering	9,768			8,730			27,912			28,791
Legal settlement proceeds, net	—			(15,365		)	—			(15,365		)
Gain on sale of property and equipment, net	(1,301		)	(1,226		)	(1,301		)	(1,226		)
Gain on acquisition of Semiconductor Systems business	—			—			(499		)	—
Net operating expenses	20,875			3,835			67,318			54,673
Operating (loss) income	(4,594		)	9,398			(7,019		)	15,733
Non-operating income (expense):
Other-than-temporary impairment of cost based investments	—			—			(3,588		)	—
Interest and other income (expense), net	95			(5		)	115			(64		)
Total non-operating income (expense)	95			(5		)	(3,473		)	(64		)
(Loss) income before income taxes	(4,499		)	9,393			(10,492		)	15,669
Provision for income taxes	141			2,625			209			4,634
Net (loss) income	$	(4,640	)	$	6,768		$	(10,701	)	$	11,035
Net (loss) income per share—basic	$	(0.15	)	$	0.23		$	(0.36	)	$	0.38
Net (loss) income per share—diluted	$	(0.15	)	$	0.23		$	(0.36	)	$	0.37
Weighted average number of shares—basic	30,054			29,434			29,922			29,296
Weighted average number of shares—diluted	30,054			30,043			29,922			29,954
Cash dividends paid per outstanding common share	$	0.08		$	2.08		$	0.24		$	2.24

ELECTRO SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS COMPREHENSIVE (LOSS) INCOME

(Unaudited)

	Fiscal quarter ended						Three fiscal quarters ended
(In thousands)	Dec 28, 2013			Dec 29, 2012			Dec 28, 2013			Dec 29, 2012
Net (loss) income	$	(4,640	)	$	6,768		$	(10,701	)	$	11,035
Other comprehensive (loss) income:
Foreign currency translation adjustment, net of taxes of $(86), ($134), $22 and $19	(153		)	(239		)	39			37
Accumulated other comprehensive income related to benefit plan obligation, net of taxes of $2, $1, $5 and $4	3			3			9			8
Net unrealized gain (loss) on available-for-sale securities, net of taxes of $(2), ($8), $3 and ($5)	(3		)	(15		)	5			(9		)
Comprehensive (loss) income	$	(4,793	)	$	6,517		$	(10,648	)	$	11,071

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

4

ELECTRO SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three fiscal quarters ended
(In thousands)	Dec 28, 2013			Dec 29, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income	$	(10,701	)	$	11,035
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization	5,636			6,867
Amortization of acquired intangible assets	2,133			1,810
Share-based compensation expense	5,130			6,132
Gain on sale of property and equipment, net	(1,264		)	(1,226		)
Gain on acquisition of Semiconductor Systems business	(499		)	—
Other-than-temporary impairment of cost based investments	3,588			—
(Increase) decrease in deferred income taxes	(317		)	4,537
Changes in operating accounts, net of acquisitions:
Decrease in trade receivables, net	8,047			14,315
Increase in inventories	(1,389		)	(11,744		)
(Increase) decrease in shipped systems pending acceptance	(172		)	1,002
(Increase) decrease in other current assets	(924		)	61
Decrease in accounts payable and accrued liabilities	(9,460		)	(912		)
Decrease in deferred revenue	(3,681		)	(4,343		)
Net cash (used in) provided by operating activities	(3,873		)	27,534
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments	(237,113		)	(857,435		)
Proceeds from sales and maturities of investments	253,265			885,818
Purchase of property, plant and equipment	(5,344		)	(5,127		)
Proceeds from sale of property, plant and equipment	3,617			2,020
Cash paid for business acquisitions	(9,731		)	(9,466		)
Minority equity investment	(5,000		)	—
Decrease in other assets	(408		)	403
Net cash (used in) provided by investing activities	(714		)	16,213
CASH FLOWS FROM FINANCING ACTIVITIES
Cash dividends paid to shareholders	(7,158		)	(65,723		)
Stock plan activity, net	83			73
Excess tax benefit of share-based compensation	—			71
Net cash used in financing activities	(7,075		)	(65,579		)
Effect of exchange rate changes on cash	(77		)	(708		)
NET CHANGE IN CASH AND CASH EQUIVALENTS	(11,739		)	(22,540		)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	88,913			69,780
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	77,174		$	47,240
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for income taxes	$	(3,072	)	$	(1,174	)
Income tax refunds received	$	65		$	651

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

5

ELECTRO SCIENTIFIC INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation

These unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted in these interim statements. Accordingly, these condensed consolidated financial statements are to be read in conjunction with the financial statements and notes included in the Company's Annual Report on Form 10-K for its fiscal year ended March 30, 2013. These interim statements include all adjustments (consisting of only normal recurring adjustments and accruals) necessary for a fair presentation of results for the interim periods presented. The results for interim periods are not necessarily indicative of the results of operations for the entire year.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of commitments and contingencies at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results may differ from those estimates.

Management believes that the estimates used are reasonable. Significant estimates made by management include: revenue recognition; inventory valuation; product warranty reserves; allowance for doubtful accounts; accrued restructuring costs; share-based compensation; income taxes including the valuation of deferred tax assets; fair value measurements; valuation of cost method equity investments; valuation of long-lived assets; valuation of goodwill; and valuation of acquired technology.

There have been no significant changes to the Company's significant accounting policies from those presented in Note 2 “Summary of Significant Accounting Policies” to the consolidated financial statements included in the Company's Annual Report on Form 10-K for its fiscal year ended March 30, 2013. All references to years or quarters relate to fiscal years or fiscal quarters unless otherwise noted.

2. Recent Accounting Pronouncements

There have been no recent accounting pronouncements or changes in accounting pronouncements during the quarter ended December 28, 2013 that are of significance to the Company.

3. Share-Based Compensation

The Company recognizes expense related to the fair value of its share-based compensation awards using the Black-Scholes model to estimate the fair value of awards on the date of grant, except for unvested restricted stock unit awards which are valued at the fair value of the Company's stock on the date of award. The Company recognizes compensation expense for all share-based compensation awards on a straight-line basis over the requisite service period of the award.

Stock-settled stock appreciation rights (SARs) grant the right to receive shares of the Company's stock equivalent to the increase in stock value of a specified number of shares over a specified period of time, divided by the stock price at the time of exercise. The Company uses the Black-Scholes model to estimate the fair value of SARs. Similar to options, SARs are recorded at the fair value of the award at grant date and the expense is recognized on a straight-line basis over the requisite service period of the award.

The Company granted a total of 621,000 restricted stock unit awards during the first three quarters of 2014, but did not grant any stock options or SARs. The Company granted 552,500 restricted stock unit awards and 5,000 stock options during the first three quarters of 2013, but did not grant any SARs.

6

Share-based compensation expense was included in the Company’s Condensed Consolidated Statements of Operations as follows:

	Fiscal quarter ended				Three fiscal quarters ended
(In thousands)	Dec 28, 2013		Dec 29, 2012		Dec 28, 2013		Dec 29, 2012
Cost of sales	$	184	$	202	$	558	$	635
Selling, service and administration	728		867		3,488		4,145
Research, development and engineering	350		413		1,084		1,579
Total share-based compensation expense	$	1,262	$	1,482	$	5,130	$	6,359

No share-based compensation costs were capitalized in the first three quarters of 2014. As of December 28, 2013, the Company had $9.2 million of total unrecognized share-based compensation costs, net of estimated forfeitures, which are expected to be recognized over a weighted average period of 1.9 years.

4. Fair Value Measurements

Financial Assets Measured at Fair Value

ASC Topic 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include the following:

• Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities;

• Level 2, defined as inputs that are observable either directly or indirectly such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and other inputs that can be corroborated by observable market data; and

• Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

7

The Company’s fair value hierarchy for its financial assets measured at fair value on a recurring basis as of December 28, 2013 and March 30, 2013 was as follows (in thousands):

December 28, 2013	Level 1		Level 2			Level 3		Total
Money market securities	$	3,724	$	—		$	—	$	3,724
Commercial paper	—		20,447			—		20,447
Corporate Bonds	—		18,550			—		18,550
Municipal bonds	—		14,461			—		14,461
Government agencies	—		8,034			—		8,034
Forward purchase or (sale) contracts:
Japanese Yen	—		108			—		108
New Taiwan Dollar	—		(5		)	—		(5		)
Korean Won	—		33			—		33
Euro	—		(129		)	—		(129		)
British Pound	—		29			—		29
Chinese Renminbi	—		(18		)	—		(18		)
Singapore Dollar	—		(3		)	—		(3		)

March 30, 2013	Level 1		Level 2			Level 3		Total
Money market securities	$	9,457	$	—		$	—	$	9,457
Commercial paper	—		51,443			—		51,443
Government agencies	—		29,646			—		29,646
Corporate bonds	—		18,396			—		18,396
Municipal bonds	—		3,389			—		3,389
Forward purchase or (sale) contracts:
Japanese Yen	—		176			—		176
New Taiwan Dollar	—		(10		)	—		(10		)
Korean Won	—		(46		)	—		(46		)
Euro	—		100			—		100
British Pound	—		38			—		38
Chinese Renminbi	—		(1		)	—		(1		)
Singapore Dollar	—		(12		)	—		(12		)

For Level 1 assets, the Company utilized quoted prices in active markets for identical assets.

For Level 2 assets, exclusive of forward contracts, the Company utilized quoted prices in active markets for similar assets. For forward contracts, spot prices at December 28, 2013 and March 30, 2013 were utilized to calculate fair values.

During the first three quarters of 2014, there were no transfers between Level 1 and Level 2 assets.

8

Investments

Certain information regarding the Company’s investments at December 28, 2013 and March 30, 2013 was as follows (in thousands):

			Unrealized
December 28, 2013	Cost		Gain		Loss			Fair Value
Available-for-sale securities (current):
Commercial paper	$	20,447	$	—	$	—		$	20,447
Corporate Bonds	18,549		1		—			18,550
Municipal Bonds	10,428		7		—			10,435
Government agencies	6,035		1		—			6,036
	$	55,459	$	9	$	—		$	55,468
Available-for-sale securities (non-current):
Municipal Bonds	$	4,019	$	7	$	—		$	4,026
Government agencies	1,998		—		—			1,998
	$	6,017	$	7	$	—		$	6,024
			Unrealized
March 30, 2013	Cost		Gain		Loss			Fair Value
Available-for-sale securities (current):
Commercial paper	$	51,443	$	—	$	—		$	51,443
Government agencies	26,556		8		—			26,564
Corporate Bonds	10,473		7		—			10,480
Municipal Bonds	2,058		—		—			2,058
	$	90,530	$	15	$	—		$	90,545
Available-for-sale securities (non-current):
Corporate Bonds	$	7,923	$	—	$	(7	)	$	7,916
Government agencies	3,082		—		—			3,082
Municipal Bonds	1,330		1		—			1,331
	$	12,335	$	1	$	(7	)	$	12,329

For purposes of determining gross realized gains and losses and reclassification out of accumulated other comprehensive (loss) income, the cost of securities sold is based on specific identification. Net unrealized holding gains and losses on current available-for-sale securities included in accumulated other comprehensive (loss) income were insignificant as of December 28, 2013 and March 30, 2013.

Underlying maturities of investments at December 28, 2013 were $55.5 million within one year and $6.0 million between one to five years.

5. Business Acquisitions

Fiscal 2014

On May 3, 2013, the Company completed the purchase of assets related to the Semiconductor Systems business of GSI Group Inc. for $8.0 million, subject to certain closing working capital adjustments. As of June 29, 2013 the working capital adjustments had not been finalized but were estimated and accrued at $1.6 million. On September 20, 2013, the Company finalized the closing working capital adjustment and paid $1.7 million of cash for a total purchase price of $9.7 million.

The acquisition provides the Company with direct access to industry-leading wafer marking, wafer trimming and circuit trimming laser systems. The purchase price was allocated to the underlying assets acquired and liabilities assumed based on their fair values and resulted in a net gain on bargain purchase of $0.5 million. The fair value of the acquired net assets of $10.5 million was in excess of the total purchase consideration of $9.7 million, primarily due to the recognition of certain intangible assets. The resulting gain of $0.8 million was partially offset by $0.3 million of deferred tax liabilities. Analysis supporting the purchase price allocation included a valuation of assets and liabilities as of the closing date, an analysis of intangible assets and a detailed review of the opening balance sheet to determine other significant adjustments required to recognize assets and liabilities at fair value. The acquisition was an asset purchase for tax purposes.

9

As a result of the acquisition, the Company recorded approximately $8.2 million of inventory, $3.9 million of accounts receivable and other current assets, $0.7 million of identifiable intangible assets, $2.3 million of current liabilities, and a gain on bargain purchase of $0.8 million. The $0.7 million of identifiable intangible assets includes approximately $0.5 million of backlog and $0.2 million of developed technology. The acquired intangibles will be amortized over their estimated useful lives which range from one to three years.

In the first three quarters of 2014, the Company also incurred approximately $1.3 million in acquisition related costs which are included in Selling, service and administration expenses in the Condensed Consolidated Statements of Operations.

The operating results of this purchase are included in the Company’s results of operations since the date of acquisition. Pro forma financial information has not been provided for the purchase as it was not material to the Company’s overall financial position.

Fiscal 2013

On June 14, 2012, the Company acquired Eolite Systems (Eolite), a designer and manufacturer of unique fiber lasers, for $9.7 million in cash for all its outstanding shares. The purchase price of $9.5 million, net of cash acquired, was allocated to the underlying assets acquired and liabilities assumed based on their fair values. Analyses supporting the purchase price allocation included a valuation of assets and liabilities as of the closing date, an analysis of intangible assets and a detailed review of the opening balance sheet to determine other significant adjustments required to recognize assets and liabilities at fair value.

The acquisition provides the Company with direct access to differentiated, higher power laser technology which can be used in a broad set of microfabrication applications. The Company has allocated $3.9 million of the purchase price to goodwill. The premium paid over the fair value of the individual assets acquired and liabilities assumed reflects the Company’s view that this acquisition will increase the Company’s ability to customize lasers to specific customer applications with differentiated capability. None of the goodwill is deductible for tax purposes.

As a result of the acquisition, the Company recorded $5.5 million of identifiable intangible assets including approximately $5.0 million of developed technology, $0.4 million in customer relationships, and $0.1 million in trademarks and backlog. The acquired intangibles will be amortized over their estimated useful lives which range from one to nine years.

In the first three quarters of 2013, the Company also incurred approximately $0.9 million in acquisition-related costs which are included in Selling, service and administration expenses in the Condensed Consolidated Statements of Operations.

The operating results of this acquisition are included in the Company’s results of operations since the date of acquisition. Pro forma financial information has not been provided for the acquisition of Eolite as it was not material to the Company’s overall financial position.

6. Inventories

Inventories are principally valued at standard costs, which approximate the lower of cost (first-in, first-out) or market. Components of inventories were as follows:

(In thousands)	Dec 28, 2013		Mar 30, 2013
Raw materials and purchased parts	$	49,298	$	44,332
Work-in-process	13,353		8,985
Finished goods	5,975		9,750
	$	68,626	$	63,067

7. Other Current Assets

Other current assets consisted of the following:

(In thousands)	Dec 28, 2013		Mar 30, 2013
Prepaid expenses	$	2,931	$	2,240
Value added tax receivable	672		763
Other	1,193		895
	$	4,796	$	3,898

10

8. Other Assets

Other assets consisted of the following:

(In thousands)	Dec 28, 2013		Mar 30, 2013
Minority equity investment	$	10,378	$	8,966
Consignment and demo equipment, net	6,830		4,263
Long term deposits and other	1,991		1,523
	$	19,199	$	14,752

Minority equity investment represents the Company's investment in OmniGuide, Inc. During the second quarter of 2014, the Company invested $5 million in Series F Preferred Stock of OmniGuide, Inc. As of December 28, 2013, the Company had $6.0 million invested in Series D Preferred Stock, $3.0 million invested in Series E Preferred Stock, and $5.0 million invested in Series F Preferred Stock of OmniGuide, Inc., representing a 15% interest. At each reporting period end, the Company determines whether events or circumstances have occurred that are likely to have a significant adverse effect on the fair value of these investments. If there are no events or circumstances identified that would adversely affect the fair value of the investments, the fair values of the investments are not calculated. In the second quarter of 2014, OmniGuide, Inc. engaged in a Series F Preferred Stock round of equity financing at pricing below previous rounds which was considered a triggering event. As a result, the Company performed a valuation of the investment which resulted in a $3.6 million impairment charge of our Series D and Series E investments.

9. Accrued Liabilities

Accrued liabilities consisted of the following:

(In thousands)	Dec 28, 2013		Mar 30, 2013
Payroll-related liabilities	$	7,805	$	7,918
Product warranty accrual	4,623		5,411
Professional fees payable	1,762		1,322
Pension benefit liabilities	1,667		1,501
Purchase order commitments and receipts	1,257		2,533
Customer deposits	685		225
Freight accrual	536		646
Income taxes payable	429		2,884
Restructuring costs payable	327		485
Value added taxes payable	272		258
Other	1,581		1,747
	$	20,944	$	24,930

10. Product Warranty

The following is a reconciliation of the changes in the aggregate product warranty accrual:

	Fiscal quarter ended						Three fiscal quarters ended
(In thousands)	Dec 28, 2013			Dec 29, 2012			Dec 28, 2013			Dec 29, 2012
Product warranty accrual, beginning	$	5,563		$	6,096		$	5,411		$	4,187
Warranty charges incurred, net	(1,755		)	(1,603		)	(5,298		)	(5,513		)
Provision for warranty charges	815			1,297			4,510			7,116
Product warranty accrual, ending	$	4,623		$	5,790		$	4,623		$	5,790

Net warranty charges incurred include labor charges and costs of replacement parts for system repairs under warranty. These costs are recorded net of any estimated cost recoveries resulting from either successful repair of damaged parts or from warranties offered by the Company’s suppliers for defective components. The provision for warranty charges reflects the estimate of future anticipated net warranty costs to be incurred for all products under warranty at quarter end and is recorded to cost of sales.

11

11. Deferred Revenue

Generally, revenue is recognized upon fulfillment of acceptance criteria at the Company's factory and title transfer which frequently occurs at the time of delivery to a common carrier. Revenue is deferred whenever title transfer is pending and/or acceptance criteria have not yet been fulfilled. Deferred revenue occurrences include sales to Japanese customers, shipments of substantially new products and shipments with custom specifications and acceptance criteria. In sales involving multiple element arrangements, the relative selling price of any undelivered elements, including installation services, is deferred until the elements are delivered and acceptance criteria are met. Revenue related to maintenance and service contracts is deferred and recognized ratably over the duration of the contracts.

The following is a reconciliation of the changes in deferred revenue:

	Fiscal quarter ended						Three fiscal quarters ended
(In thousands)	Dec 28, 2013			Dec 29, 2012			Dec 28, 2013			Dec 29, 2012
Deferred revenue, beginning	$	7,855		$	9,456		$	10,196		$	10,751
Revenue deferred	5,294			5,394			18,892			43,340
Revenue recognized	(6,455		)	(8,330		)	(22,394		)	(47,571		)
Deferred revenue, ending	$	6,694		$	6,520		$	6,694		$	6,520

12. Earnings (Loss) Per Share

The following is a reconciliation of weighted average shares outstanding used in the calculation of basic and diluted earnings per share:

	Fiscal quarter ended					Three fiscal quarters ended
(In thousands, except per share data)	Dec 28, 2013			Dec 29, 2012		Dec 28, 2013			Dec 29, 2012
Net (loss) income	$	(4,640	)	$	6,768	$	(10,701	)	$	11,035
Weighted average shares used for basic earnings per share	30,054			29,434		29,922			29,296
Incremental diluted shares	—			609		—			658
Weighted average shares used for diluted earnings per share	30,054			30,043		29,922			29,954
Net (loss) income per share:
Net (loss) income — basic	$	(0.15	)	$	0.23	$	(0.36	)	$	0.38
Net (loss) income — diluted	$	(0.15	)	$	0.23	$	(0.36	)	$	0.37

Awards of options, stock appreciation rights (SARs) and unvested restricted stock units (RSUs) representing an additional 3.8 million and 2.5 million shares of stock for the third quarter of 2014 and 2013, respectively, were not included in the calculation of diluted net earnings per share because their effect would have been antidilutive.

For the three quarters endedDecember 28, 2013 and December 29, 2012, awards of options, SARs, and unvested RSUs representing an additional 4.0 million and 2.3 million shares, respectively, were not included in the calculation of diluted net earnings per share because their effect would have been antidilutive.

13. Product and Geographic Information

Net sales by product type were as follows:

	Fiscal quarter ended				Three fiscal quarters ended
(In thousands)	Dec 28, 2013		Dec 29, 2012		Dec 28, 2013		Dec 29, 2012
Interconnect & Microfabrication Group (IMG)	$	25,378	$	30,537	$	98,096	$	147,506
Semiconductor Group (SG)	8,535		3,322		25,083		9,938
Components Group (CG)	4,354		4,071		20,907		19,607
	$	38,267	$	37,930	$	144,086	$	177,051

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Net sales by geographic area, based on the location of the end user, were as follows:

	Fiscal quarter ended				Three fiscal quarters ended
(In thousands)	Dec 28, 2013		Dec 29, 2012		Dec 28, 2013		Dec 29, 2012
Asia	$	29,087	$	28,928	$	117,361	$	154,962
Americas	4,761		6,990		15,470		15,696
Europe	4,419		2,012		11,255		6,393
	$	38,267	$	37,930	$	144,086	$	177,051

14. Restructuring and Cost Management Plans

In 2013, the Company initiated a restructuring plan to improve efficiency, transition from memory repair and other legacy products, and focus on laser microfabrication for consumer electronics, emerging technologies related to semiconductor 3D packaging, and proprietary laser technology. The planned completion date for remaining actions to be taken under this plan is April 30, 2014. See the Company's Form 10-K for the year ended March 30, 2013 for additional information related to restructuring and cost management plans.

In the first three quarters of 2014, net restructuring credits of $31 thousand were recognized due to changes in estimates. At December 28, 2013 and March 30, 2013, the amount of unpaid restructuring costs included in accrued liabilities was $0.3 million and $0.5 million, respectively.

The following table presents the amounts related to restructuring costs payable (in thousands):

Restructuring costs payable balance as of March 30, 2013	$	485
Employee severance and related benefits:
Cash payments	(153		)
Other adjustments	(5		)
Restructuring costs payable balance as of December 28, 2013	$	327

15. Shareholders’ Equity

Share Repurchase Program

On December 9, 2011, the Board of Directors authorized a share repurchase program totaling $20.0 million to acquire shares of the Company’s outstanding common stock. The repurchases are to be made at management’s discretion in the open market or in privately negotiated transactions in compliance with applicable securities laws and other legal requirements and are subject to market conditions, share price and other factors. The Company did not repurchase any shares under this program in either the first three quarters of 2013 or 2014. There is no fixed completion date for the repurchase program.

Dividends

In December 2011, the Board of Directors adopted a dividend policy under which the Company intends to pay quarterly cash dividends. The following table summarizes the quarterly dividend declared and paid by the Company since the third quarter of 2013:

Date Declared	Record Date	Payable Date	Amount per Share
November 7, 2013	November 19, 2013	December 4, 2013	$0.08
August 8, 2013	August 19, 2013	September 3, 2013	$0.08
May 14, 2013	June 5, 2013	June 19, 2013	$0.08
February 7, 2013	February 28, 2013	March 14, 2013	$0.08
November 8, 2012	November 21, 2012	December 5, 2012	$0.08

A special dividend of $2.00 per share was declared by the Board of Directors on December 3, 2012 after the successful settlement of a patent dispute. The special dividend should not be considered a recurring event.

The Company paid aggregate dividends of $7.2 million and $65.7 million in the first three quarters of 2014 and 2013, respectively.

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The Company currently anticipates that it will continue to pay cash dividends on a quarterly basis in the future, although the declaration, timing and amount of any future cash dividends are at the discretion of the Board of Directors and will depend on the Company’s financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination that cash dividends are in the best interest of the shareholders.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The statements contained in this report that are not statements of historical fact, including without limitation, statements containing the words “believes,” “expects,” “anticipates” and similar words, constitute forward-looking statements that are subject to a number of risks and uncertainties. From time to time we may make other forward-looking statements. Investors are cautioned that such forward-looking statements are subject to an inherent risk that actual results may materially differ as a result of many factors, including the risks described in Part II, Item 1A “Risk Factors.”

Overview of Business

Electro Scientific Industries, Inc. and its subsidiaries (ESI) is a leading supplier of innovative laser-based manufacturing solutions for the microtechnology industry. Our advanced laser systems enable precise structuring of micron to submicron features in components and devices which are used in a wide variety of end products in the consumer electronics, computer, semiconductor, communications and other markets. These features enable our customers to achieve functionality, or improve yield and productivity in their manufacturing processes that can be critical to their profitability. Founded in 1944, ESI is headquartered in Portland, Oregon, with global operations and subsidiaries in Asia, Canada, Europe and the United States.

Our advanced laser microfabrication systems allow microelectronics, semiconductor, and other microtechnology manufacturers to physically alter select device features during high-volume production in order to increase performance and improve production yields. Laser microfabrication comprises a set of precise micron-level processes, including drilling, scribing, dicing, singulation, cutting, ablating, trimming, and precision marking on multiple types of materials. These processes require application-specific laser systems that are able to meet our customers’ exacting performance and productivity requirements. Our laser-based systems improve production yields or enable improved performance for flexible and rigid high density interconnect printed circuit boards, semiconductor devices, light emitting diodes (LEDs), advanced semiconductor packaging, touch-panel glass, flat panel liquid crystal displays (LCDs) and other high value components.

Additionally, we produce high-capacity test and inspection equipment that is critical to the quality control process during the production of multilayer ceramic capacitors (MLCCs). Our equipment ensures that each component meets the electrical and physical tolerances required to perform properly. Lastly, we produce systems that use photonic technology to perform precision inspection for quality control and defect identification.

Summary of Sequential Quarterly Results

The financial results of the quarter ended December 28, 2013, which represented the third quarter of 2014 , reflected a sequential decline in sales and earnings as a result of timing of design wins in our advanced micromachining business and absorption of capacity in some of our markets. Revenue decreased to $38.3 million from $59.6 million in the third quarter of 2014 which ended December 28, 2013. Total order volume for the third quarter of 2014 declined from $46.2 million to $35.6 million, primarily driven by timing of orders for advanced microfabrication equipment, and timing of service contract bookings.

Total shipments were $37.4 million in the third quarter of 2014 compared to $56.9 million in the second quarter of 2014. By product group, Semiconductor Group (SG) shipments increased by approximately 21%, Interconnect & Microfabrication Group (IMG) shipments decreased by approximately 39%, and Components Group (CG) shipments decreased by approximately 58%.

Net sales were $38.3 million in the third quarter of 2014 compared to $59.6 million in the second quarter of 2014. All three business groups showed a sequential decline in sales and orders. IMG decreased due to lower flex, microfabrication and service sales. CG decreased due to MLCC customers absorbing capacity following strong shipments in the second quarter. Finally, SG sales decreased due to shipment push-outs and acceptance delays.

Gross profit was $16.3 million in the third quarter of 2014 compared to a gross profit of $24.6 million in the second quarter of 2014. Gross margin was 42.5% on net sales of $38.3 million in the third quarter of 2014 compared to a gross profit of 41.3% on net sales of $59.6 million in the second quarter of 2014. The increase in gross margin was primarily driven by favorable product mix, partially offset by lower sales volume.

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Net operating expenses of $20.9 million in the third quarter of 2014decreased$3.1 million from $23.9 million in the second quarter of 2014. This decrease is due to a $1.8 million decrease in selling, service and administration (SS&A) and a $1.3 million gain on sale of property. RD&E expense remained fairly flat compared to the prior quarter. SS&A expense decreased primarily due to reduced compensation and other variable expenses based on lower business volume and less amortization of acquired intangible assets.

Operating loss was $4.6 million in the third quarter of 2014 compared to an operating income of $0.7 million in the second quarter of 2014, a change of $5.3 million. The operating loss was primarily due to lower sales volumes in the third quarter partially offset by a decreased operating expenses and the gain on sale of property.

Non-operating income was $0.1 million in the third quarter of 2014 compared to expense of $3.5 million in the second quarter of 2014. The change is primarily due to the $3.6 million impairment against our minority equity investment in OmniGuide, Inc recorded in the second quarter of 2014.

Provision for income taxes was $141 thousand in the third quarter of 2014 compared to a benefit of $33 thousand in the second quarter of 2014.

Net loss was $4.6 million in the third quarter of 2014 compared to a net loss of $2.8 million in the second quarter of 2014.

Quarter Ended December 28, 2013 Compared to Quarter Ended December 29, 2012

Results of Operations

The following table presents results of operations data as a percentage of net sales:

	Fiscal quarter ended
	Dec 28, 2013		Dec 29, 2012
Net sales	100.0	%	100.0	%
Cost of sales	57.5		65.1
Gross profit	42.5		34.9
Selling, service and administration	32.4		30.8
Research, development and engineering	25.5		23.0
Legal settlement proceeds, net	—		(40.5	)
Gain on sale of property and equipment, net	(3.4	)	(3.2	)
Operating (loss) income	(12.0	)	24.8
Interest and other income, net	0.2		—
(Loss) income before income taxes	(11.8	)	24.8
Provision for income taxes	0.3		7.0
Net (loss) income	(12.1	)%	17.8	%

Net Sales

The following table presents net sales information by product group:

	Fiscal quarter ended
	Dec 28, 2013				Dec 29, 2012
(In thousands, except percentages)	Net Sales		% of Net Sales		Net Sales		% of Net Sales
Interconnect & Microfabrication Group (IMG)	$	25,378	66.3	%	$	30,537	80.5	%
Semiconductor Group (SG)	8,535		22.3		3,322		8.8
Components Group (CG)	4,354		11.4		4,071		10.7
	$	38,267	100.0	%	$	37,930	100.0	%

Net sales for the third quarter of 2014increased$0.3 million or 1% from net sales for the third quarter of 2013. Sales in IMG decreased by 17%, while SG and CG increased by 157% and 7% , respectively.

IMG sales for the third quarter of 2014decreased$5.2 million compared to the third quarter of 2013. The decrease in IMG sales was driven by last year's shipments of advanced microfabrication systems which were higher, following large design wins in early 2013, which exceeded the order volume experienced in 2014.

15

SG sales for the third quarter of 2014increased$5.2 million compared to the third quarter of 2013. The increase was primarily driven by the sales in our newly acquired Semiconductor Systems business.

CG sales for the third quarter of 2014increased$0.3 million compared to the third quarter of 2013, fairly consistent with the seasonally lower levels of the previous year.

The following table presents net sales information by geographic region:

	Fiscal quarter ended
	Dec 28, 2013				Dec 29, 2012
(In thousands, except percentages)	Net Sales		% of Net Sales		Net Sales		% of Net Sales
Asia	$	29,087	76.0	%	$	28,928	76.3	%
Americas	4,761		12.4		6,990		18.4
Europe	4,419		11.6		2,012		5.3
	$	38,267	100.0	%	$	37,930	100.0	%

Gross Profit

	Fiscal quarter ended
	Dec 28, 2013				Dec 29, 2012
(In thousands, except percentages)	Gross Profit		% of Net Sales		Gross Profit		% of Net Sales
Gross Profit	$	16,281	42.5	%	$	13,233	34.9	%

Gross profit was $16.3 million for the third quarter of 2014, an increase of $3.0 million compared to the third quarter of 2013. This increase was primarily driven by favorable product mix, warranty improvements, lower material and manufacturing costs and to a lesser extent, by slightly higher production volume. Gross profit as a percentage of net sales was 42.5% and 34.9% for the third quarters of 2014 and 2013, respectively.

Operating Expenses

	Fiscal quarter ended
	Dec 28, 2013					Dec 29, 2012
(In thousands, except percentages)	Expense			% of Net Sales		Expense			% of Net Sales
Selling, service and administration	$	12,408		32.4	%	$	11,696		30.8	%
Research, development and engineering	9,768			25.5		8,730			23.0
Legal settlement proceeds, net	—			—		(15,365		)	(40.5	)
Gain on sale of property and equipment, net	(1,301		)	(3.4	)	(1,226		)	(3.2	)
	$	20,875		54.5	%	$	3,835		10.1	%

Selling, Service and Administration

Selling, service and administration (SS&A) expenses primarily consist of labor and other employee-related expenses including share-based compensation expense, travel expenses, professional fees, sales commissions and facilities costs.

SS&A expenses for the third quarter of 2014increased$0.7 million compared to the third quarter of 2013. This increase was primarily attributable to increases in expenses associated with the addition of the Semiconductor systems business and a slightly higher installed base, partially offset by lower asset depreciation, variable pay, share-based compensation and the impact of restructuring actions taken in the fourth quarter of FY2013.

16

Research, Development and Engineering

Research, development and engineering (RD&E) expenses are primarily comprised of labor and other employee-related expenses, professional fees, project materials costs, equipment costs and facilities costs. RD&E expenses for the third quarter of 2014increased$1.0 million compared to the third quarter of 2013. This increase was primarily due to the addition of the Semiconductor systems business and higher project development costs, partially offset by the impact of restructuring actions taken in the fourth quarter of 2013.

Legal Settlement Proceeds, net

Legal settlement proceeds, net for the third quarter of 2013 were $15.4 million, which consisted of All Ring litigation legal settlement proceeds and related non-recurring legal matters.

Gain on Sale of Property and Equipment, net

During the third quarter of 2014, we sold a facility in Portland, Oregon for $3.6 million, resulting in a pre-tax gain of $1.3 million. The 2013 gain on sale for $1.2 million was primarily due to a facility sale in China which resulted in a pre-tax gain of $1.3 million, partially offset by the loss on disposal of certain fixed assets.

Non-operating Income and Expense

Non-operating income and expense consists of interest income and expense, market gains and losses on assets held in employees’ deferred compensation accounts, realized and unrealized foreign exchange gains and losses, bank charges, investment management fees, and other miscellaneous non-operating items. Net non-operating income was $95 thousand in the third quarter of 2014 and net non-operating expense was $5 thousand in the third quarter of 2013. The increase in income was primarily attributable to market gains on assets held in deferred compensation accounts.

Income Taxes

	Fiscal quarter ended
	Dec 28, 2013				Dec 29, 2012
(In thousands, except percentages)	Income Tax Provision		Effective Tax Rate		Income Tax Provision		Effective Tax Rate
Provision for income taxes	$	141	(3.1	)%	$	2,625	27.9	%

The income tax provision for the third quarter of 2014 was $141 thousand on pretax loss of $4.5 million, an effective tax rate of (3.1)%. For the third quarter of 2013, the income tax provision was $2.6 million on pretax income of $9.4 million, an effective rate of 27.9%. The change in the effective tax rate is primarily due to the relative quarterly income level, the mix of income between foreign and domestic jurisdictions and their relative tax rates, the impact of the valuation allowance on domestic tax assets, and a discrete benefit resulting from the filing of the Company's tax returns.

Net (Loss) Income

	Fiscal quarter ended
	Dec 28, 2013					Dec 29, 2012
(In thousands, except percentages)	Net Loss			% of Net Sales		Net Income		% of Net Sales
Net (loss) income	$	(4,640	)	(12.1	)%	$	6,768	17.8	%

As a result of the factors discussed above, net loss for the third quarter of 2014 was $4.6 million, or $0.15 per basic and diluted share, compared to net income of $6.8 million, or $0.23 per basic and diluted share, for the third quarter of 2013.

17

Three Quarters Ended December 28, 2013 Compared to Three Quarters Ended December 29, 2012

Results of Operations

The following table presents results of operations data as a percentage of net sales:

	Three fiscal quarters ended
	Dec 28, 2013		Dec 29, 2012
Net sales	100.0	%	100.0	%
Cost of sales	58.2		60.2
Gross profit	41.8		39.8
Selling, service and administration	28.6		24.0
Research, development and engineering	19.4		16.3
Legal settlement proceeds, net	—		(8.7	)
Gain on sale of property and equipment, net	(0.9	)	(0.7	)
Gain on acquisition of Semiconductor Systems business	(0.4	)	—
Operating (loss) income	(4.9	)	8.9
Other-than-temporary impairment of cost based investments	(2.5	)	—
Interest and other (expense) income, net	0.1		(0.1	)
Total non-operating income (expense)	(2.4	)	(0.1	)
(Loss) income before income taxes	(7.3	)	8.8
Provision for income taxes	0.1		2.6
Net (loss) income	(7.4	)%	6.2	%

Net Sales

The following table presents net sales information by product group:

	Three fiscal quarters ended
	Dec 28, 2013				Dec 29, 2012
(In thousands, except percentages)	Net Sales		% of Net Sales		Net Sales		% of Net Sales
Interconnect & Microfabrication Group (IMG)	$	98,096	68.1	%	$	147,506	83.3	%
Semiconductor Group (SG)	25,083		17.4		9,938		5.6
Components Group (CG)	20,907		14.5	%	19,607		11.1	%
	$	144,086	100.0	%	$	177,051	100.0	%

Net sales for the first three quarters of 2014decreased$33.0 million or 18.6% from net sales for the first three quarters of 2013. Sales in IMG decreased by 33.5%, while sales in SG and CG increased by 152.4% and 6.6%, respectively.

IMG sales for the first three quarters of 2014decreased$49.4 million compared to the first three quarters of 2013. The decrease in IMG sales was primarily driven by the shipment of advanced microfabrication systems following large design wins in early 2013 which did not repeat at the same level in 2014.

SG sales for the first three quarters of 2014increased$15.1 million compared to the first three quarters of 2013. The increase in SG sales was primarily driven by the addition of our Semiconductor Systems business, which we acquired in the first quarter of 2014.

CG sales for the first three quarters of 2014increased$1.3 million compared to the first three quarters of 2013. The increase was primarily driven by improved sales of the new multilayer ceramic capacitor testers.

18

The following table presents net sales information by geographic region:

	Three fiscal quarters ended
	Dec 28, 2013				Dec 29, 2012
(In thousands, except percentages)	Net Sales		% of Net Sales		Net Sales		% of Net Sales
Asia	$	117,361	81.5	%	$	154,962	87.5	%
Americas	15,470		10.7		15,696		8.9
Europe	11,255		7.8		6,393		3.6
	$	144,086	100.0	%	$	177,051	100.0	%

Gross Profit

	Three fiscal quarters ended
	Dec 28, 2013				Dec 29, 2012
(In thousands, except percentages)	Gross Profit		% of Net Sales		Gross Profit		% of Net Sales
Gross Profit	$	60,299	41.8	%	$	70,406	39.8	%

Gross profit was $60.3 million for the first three quarters of 2014 and decreased$10.1 million compared to the first three quarters of 2013. This decrease was primarily due to lower sales and production volumes. Gross profit as a percentage of net sales increased to 41.8% for the first three quarters of 2014 from 39.8% for the first three quarters of 2013. This increase was primarily due to a more favorable product mix and to a lesser extent by improvements in manufacturing resulting in lower expenses.

Operating Expenses

	Three fiscal quarters ended
	Dec 28, 2013					Dec 29, 2012
(In thousands, except percentages)	Expense			% of Net Sales		Expense			% of Net Sales
Selling, service and administration	$	41,206		28.6	%	$	42,473		24.0	%
Research, development and engineering	27,912			19.4		28,791			16.3
Legal settlement proceeds, net	—			—		(15,365		)	(8.7	)
Gain on sale of property and equipment, net	(1,301		)	(0.9	)	(1,226		)	(0.7	)
Gain on acquisition of Semiconductor Systems business	(499		)	(0.4	)	—			—
	$	67,318		46.7	%	$	54,673		30.9	%

Selling, Service and Administration

Selling, service and administration (SS&A) expenses primarily consist of labor and other employee-related expenses including share-based compensation expense, travel expenses, professional fees, sales commissions and facilities costs.

SS&A expenses for the first three quarters of 2014decreased$1.3 million compared to the first three quarters of 2013. This decrease was primarily attributable to the impact of restructuring actions taken at the end of 2013, decreases in variable expense associated with lower sales volume, and, to a lesser extent, by lower legal fees, asset depreciation and share-based compensation costs, partially offset by increased expenses resulting from addition of the Semiconductor Systems business.

Research, Development and Engineering

Research, development and engineering (RD&E) expenses are primarily comprised of labor and other employee-related expenses, professional fees, project materials costs, equipment costs and facilities costs. RD&E expenses for the first three quarters of 2014decreased$0.9 million compared to the first three quarters of 2013. This decrease was primarily due to decrease in labor costs due to selective headcount reductions, lower variable pay, lower share-based compensation expense and lower asset depreciation, partially offset by the addition of the Semiconductor Systems business.

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Legal Settlement Proceeds, net

Legal settlement proceeds, net for the third quarter of 2013 were $15.4 million, which consisted of All Ring litigation legal settlement proceeds and related non-recurring legal matters.

Gain on Sale of Property and Equipment, net

During the third quarter of 2014, we sold a facility in Portland, Oregon for $3.6 million, resulting in a pre-tax gain of $1.3 million. The 2013 gain on sale for $1.2 million was primarily due to a facility sale in China which resulted in a pre-tax gain of $1.3 million, partially offset by the loss on disposal of certain fixed assets.

Gain on acquisition of Semiconductor Systems Business

Gain on acquisition of Semiconductor Systems business was $0.5 million in 2014. This purchase resulted in an overall gain as the estimated fair value of the assets purchased was in excess of the total purchase consideration, primarily due to the recognition of certain intangible assets, comprised of developed technology and order backlog.

Non-operating Income and Expense

Non-operating income and expense, net, consists of interest income and expense, market gains and losses on assets held in employees’ deferred compensation accounts, realized and unrealized foreign exchange gains and losses, bank charges, investment management fees, and other miscellaneous non-operating items.

Non-operating income and expense were as follows:

	Three fiscal quarters ended
	Dec 28, 2013					Dec 29, 2012
(In thousands, except percentages)	Non-Operating Income (Expense)			% of Net Sales		Non-Operating Income (Expense)			% of Net Sales
Other-than-temporary impairment of cost based investments	$	(3,588	)	(2.5	)%	$	—		—	%
Interest and other income (expense), net	$	115		0.1	%	$	(64	)	(0.1	)%
Total non-operating income (expense)	$	(3,473	)	(2.4	)%	$	(64	)	(0.1	)%

Other-than-temporary impairment of cost based investments

Other-than-temporary impairment of cost based investments was $3.6 million in first three quarters of 2014 and relates to our minority interest investment in OmniGuide, Inc. During the second quarter, OmniGuide, Inc. engaged in a Series F Preferred Stock round of equity financing at pricing below previous rounds which was considered a triggering event. We performed a valuation of the investment which resulted in a $3.6 million impairment charge of our Series D and Series E investments.

Interest and other (expense) income, net

Net interest and other income was $115 thousand in the first three quarters of 2014 compared to net interest and other expense of $64 thousand in the first three quarters of 2013. The increase in income was primarily attributable to market gains on assets held in deferred compensation accounts.

Income Taxes

	Three fiscal quarters ended
	Dec 28, 2013				Dec 29, 2012
(In thousands, except percentages)	Income Tax Provision		Effective Tax Rate		Income Tax Provision		Effective Tax Rate
Provision for income taxes	$	209	(2.0	)%	$	4,634	29.6	%

The income tax provision for the first three quarters of 2014 was $0.2 million on pretax loss of $10.5 million, an effective tax rate of (2.0)%. For the first three quarters of 2013, the income tax provision was $4.6 million on pretax income of $15.7 million, an effective rate of 29.6%. The change in the effective tax rate is primarily due to the relative income level, the mix of income between foreign and domestic jurisdictions and their relative tax rates, the impact of the valuation allowance on domestic tax assets, and a discrete benefit resulting from the closure of various open foreign tax returns and filing of the Company's tax returns.

20

Net (Loss) Income

	Three fiscal quarters ended
	Dec 28, 2013					Dec 29, 2012
(In thousands, except percentages)	Net Loss			% of Net Sales		Net Income		% of Net Sales
Net (loss) income	$	(10,701	)	(7.4	)%	$	11,035	6.2	%

As a result of the factors discussed above, net loss for the first three quarters of 2014 was $10.7 million, or $0.36 per basic and diluted share, compared to net income of $11.0 million, or $0.38 per basic and $0.37 per diluted share, for the first three quarters of 2013.

Financial Condition and Liquidity

At December 28, 2013, our principal sources of liquidity were cash and cash equivalents of $77.2 million, short-term investments of $46.3 million and accounts receivable of $27.5 million. At December 28, 2013, we had a current ratio of 5.43 and held no long-term debt. Working capital of $185.4 million decreased $9.0 million compared to the March 30, 2013 balance of $194.4 million substantially impacted by the purchase of the Semiconductor Systems business for $9.7 million, the $5.0 million investment in OmniGuide, Inc. and the payment of quarterly dividends. We also held approximately $6.0 million of non-current investments at December 28, 2013.

In December 2011, the Board of Directors adopted a dividend policy under which we intend to pay quarterly cash dividends. The following table summarizes the quarterly dividend declared and paid by us since the third quarter of 2013:

Date Declared	Record Date	Payable Date	Amount per Share
November 7, 2013	November 19, 2013	December 4, 2013	$0.08
August 8, 2013	August 19, 2013	September 3, 2013	$0.08
May 14, 2013	June 5, 2013	June 19, 2013	$0.08
February 7, 2013	February 28, 2013	March 14, 2013	$0.08
November 8, 2012	November 21, 2012	December 5, 2012	$0.08

A special dividend of $2.00 per share was declared by the Board of Directors on December 3, 2012 after the successful settlement of a patent dispute. The special dividend should not be considered a recurring event.

We paid aggregate dividends of $7.2 million and $65.7 million for the first third quarters of 2014 and 2013, respectively.

We currently anticipate that we will continue to pay cash dividends on a quarterly basis in the future, although the declaration, timing and amount of any future cash dividends are at the discretion of the Board of Directors and will depend on our financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination that cash dividends are in the best interest of our shareholders.

In December 2011, the Board of Directors authorized a share repurchase program totaling $20.0 million to acquire shares of our outstanding common stock. The repurchases are to be made at management’s discretion in the open market or in privately negotiated transactions in compliance with applicable securities laws and other legal requirements and are subject to market conditions, share price and other factors. We did not repurchase any shares under this program in 2014 or 2013. There is no fixed completion date for the repurchase program.

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Sources and Uses of Cash

Net cash used in operating activities of $3.9 million for the three quarters endedDecember 28, 2013, was due to $10.7 million in net loss and $7.6 million of cash outflows from working capital, partially offset by $14.4 million in non-cash charges. For the three quarters endedDecember 28, 2013, the primary uses of cash from working capital consisted of a $9.5 million decrease in accounts payable and accrued liabilities, $3.7 million decrease in deferred revenue, $1.4 million increase in inventories, $0.9 million increase in other current assets and $0.2 million increase in shipped systems pending acceptance, partially offset by $8.0 million decrease in trade receivables.

For the three quarters endedDecember 28, 2013, net cash used in investing activities of $0.7 million was the result of $237.1 million of purchases of investments, $9.7 million of net cash paid for acquisition of the Semiconductor Systems business, $5.0 million in additional investment in OmniGuide, Inc., $5.3 million of purchases of property, plant and equipment and $0.4 million increase in other assets, partially offset by $253.3 million of proceeds from sales and maturities of investments and $3.6 million of proceeds from the sale of property.

For the three quarters endedDecember 28, 2013, net cash used in financing activities of $7.1 million primarily resulted from $7.2 million of cash dividends paid to shareholders offset by $0.1 million from net stock plan activity.

We believe that our existing cash, cash equivalents and short-term investments are adequate to fund our operations, any dividends which may be declared, our share repurchase program and contractual obligations for at least the next twelve months.

Critical Accounting Policies and Estimates

We reaffirm the “Critical Accounting Policies and Estimates” in Part II Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations reported in our Form 10-K for the year ended March 30, 2013.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes in the market risk disclosure contained in our Form 10-K for the year ended March 30, 2013.

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Item 4. Controls and Procedures

Attached to this quarterly report as exhibits 31.1 and 31.2 are the certifications of our President and Chief Executive Officer (CEO) and our Chief Financial Officer (CFO) required by Section 302 of the Sarbanes-Oxley Act of 2002 (the Section 302 Certifications). This portion of our quarterly report on Form 10-Q is our disclosure of the conclusions of our management regarding the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report based on management’s evaluation of those disclosure controls and procedures. This disclosure should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

Disclosure Controls and Procedures

Our management has evaluated, under the supervision and with the participation of our CEO and CFO, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (Exchange Act). Based on that evaluation, our CEO and CFO have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting during the third quarter of 2014 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

In the ordinary course of business, we are involved in various legal matters, either asserted or unasserted, and investigations. In the opinion of management, ultimate resolution of these matters will not have a material effect on our consolidated financial position, results of operations or cash flows.

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Item 1A. Risk Factors

The statements contained in this report that are not statements of historical fact, including without limitation statements containing the words “believes,” “expects” and similar words, constitute forward-looking statements that are subject to a number of risks and uncertainties. From time to time, we may make other forward-looking statements. Investors are cautioned that such forward-looking statements are subject to an inherent risk that actual results may differ materially. The following information highlights some of the factors that could cause actual results to differ materially from the results expressed or implied by our forward-looking statements. Forward-looking statements should be considered in light of these factors. Factors that may result in such variances include, but are not limited to, the following:

Risks Related to Our Competition and Customers

Volatility of Our Customers’ Industries

Our business is dependent upon the capital expenditures of manufacturers of microelectronics, semiconductors and light emitting diodes (LEDs) used in consumer electronics, computers, wireless communications and other electronic products. The capital equipment market for microelectronics, semiconductor and consumer electronics manufacturers has historically been characterized by sudden and severe cyclical variations in product supply and demand due to a number of factors including capacity utilization, timing of customers’ new product introductions and demand for their products, inventory levels relative to demand and access to affordable capital. The timing, severity and duration of these market cycles are difficult or impossible to predict. As a result, business levels can vary significantly from quarter to quarter or year to year. Significant downturns in the market for microelectronics, semiconductors, and LEDs used in electronic devices or in the market for consumer electronics reduce demand for our products and may materially and adversely affect our business, financial condition and results of operations. For example, starting in the second half of fiscal 2012, we experienced the negative impact of an uncertain economic environment, slower market growth and overcapacity in several of our markets, which resulted in overall lower order and revenue levels. As a result of these factors, our total order volume declined in 2012 compared to 2011 and continued to decline in 2013. In addition, due to changes in the memory repair industry, we do not expect to experience material sales of memory repair systems in future up cycles. The degree of the impact of any downturn on our business depends on a number of factors, including: the strength of the global and United States economies; the overall level of demand for consumer electronics products; the stability of global financial systems; and the overall health of the microelectronics, semiconductor, LEDs and consumer electronics industries.

Highly Competitive Markets

We face substantial competition from established competitors throughout the world, some of which have greater financial, engineering, manufacturing and marketing resources than we do. Those competitors with greater resources may, in addition to other things, be able to better withstand periodic downturns, compete more effectively on the basis of price and technology, or more quickly develop enhancements to, and new generations of, products that compete with the products we manufacture and market. New companies may enter the markets in which we compete, or industry consolidation may occur, further increasing competition in those markets. We believe that to be competitive we must continue to expend significant financial resources in order to, among other things, invest in new product development and enhancements. We may not be able to compete successfully in the future and increased competition may result in price reductions, reduced profit margins and loss of market share.

Increased Price Pressure

We have experienced and continue to experience pricing pressure in the sale of our products, from both competitors and customers. Pricing pressures from competitors typically have become more intense during cyclical downturns when competitors seek to maintain or increase market share, reduce inventory or introduce more technologically advanced products. In addition, we may agree to pricing concessions with our customers in connection with volume orders. Our business, financial condition, margins or results of operations may be materially and adversely affected by competitive pressure and intense price-based competition.

Revenues are Largely Dependent on Few Customers

We depend on a few significant customers for a large portion of our revenues. In 2013, our top ten customers accounted for approximately 61% of total net sales, with one customer accounting for approximately 31% of total net sales. We anticipate that sales of our products to a relatively small number of customers will continue to account for a significant portion of our revenues. Consolidation between customers, changes in technologies or solutions used by customers, changes in products manufactured by customers or in end-user demand for those products, selection of suppliers other than us, customer

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bankruptcies or customer departures from their respective industries all may result in even fewer customers accounting for a high percentage of our revenue. Furthermore, none of our customers have any long-term obligation to continue to buy our products or services and may therefore delay, reduce or cease ordering our products or services at any time. The cancellation, reduction or deferral of purchases of our products by even a single customer could significantly reduce our revenues in any particular quarter. If we were to lose any of our significant customers or suffer a material reduction in their purchase orders, revenue could decline and our business, financial condition and results of operations could be materially and adversely affected.

Revenues are Largely Based on the Sale of a Small Number of Product Units

We derive a substantial portion of our revenue from the sale of a relatively small number of products. Accordingly, our revenues, margins and other operating results could fluctuate significantly from quarter to quarter depending upon a variety of factors in addition to those described above, including:

• changes in the timing of orders and terms or acceptance of product shipments by our customers;

• changes in the mix of products and services that we sell;

• timing and market acceptance of our new product introductions;

• customer adoption of new technologies or manufacturing processes requiring use of our equipment;

• timing of new application design wins; and

• delays or problems in the planned introduction of new products, or in the performance of any such products following delivery to customers.

As a result of these risks, we believe that quarter to quarter comparisons of our revenue and operating results may not be meaningful, and that these comparisons may not be an accurate indicator of our future performance.

Risks Related to Our Supply Chain and Production

Variability of Production Capacity

To meet rapidly changing demand in the industries we serve, we must effectively manage our resources and production capacity. During periods of decreasing demand for our products, we must be able to appropriately align our cost structure with prevailing market conditions and effectively manage our supply chain. Our ability to rapidly and effectively reduce our cost structure in response to such downturns is limited by the fixed nature of many of our expenses in the near term and by our need to continue our investment in next-generation product technology and to support and service our products. Conversely, when upturns occur in the markets we serve, we may have difficulty rapidly and effectively increasing our manufacturing capacity or procuring sufficient materials to meet sudden increases in customer demand that could result in the loss of business to our competitors and harm to our relationships with our customers. If we are not able to timely and appropriately adapt to changes in our business environment, our business, financial condition or results of operations may be materially and adversely affected.

Reliance on Critical Suppliers

We use a wide range of components from numerous suppliers in the manufacture of our products, including custom electronic, laser, optical and mechanical components. We generally do not have guaranteed supply arrangements with our suppliers. We seek to reduce the risk of production and service interruptions and shortages of key parts by selecting and qualifying alternative suppliers for key parts, monitoring the financial stability of key suppliers and maintaining appropriate inventories of key parts. Although we make reasonable efforts to ensure that parts are available from multiple suppliers, some key parts are available only from a single supplier or a limited group of suppliers in the short term. In addition, some of the lasers we use in our products are difficult to manufacture, and as a result we may not receive an adequate supply of lasers in a timely fashion to fill orders. Operations at our suppliers’ facilities are subject to disruption or discontinuation for a variety of reasons, including changes in business relationships, competitive factors, financial difficulties, work stoppages, fire, natural disasters or other causes. Any such disruption or discontinuation to our suppliers’ operations could interrupt or reduce our manufacturing activities and delay delivery of our products, any or all of which could materially and adversely affect our results of operations. In addition, when markets recover from economic downturns, there is a heightened risk that one or more of our suppliers may not be able to meet increased demand requirements, adversely impacting our ability to fulfill orders and win business with our customers.

Utilization of Contract Manufacturers

We have arrangements with contract manufacturers to complete the manufacturing of certain of our products or product subcomponents. Any significant interruption in our contract manufacturers’ ability to provide manufacturing services to us as a result of contractual disputes with us or another party, labor disruptions, financial difficulties, natural disasters, delay or

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interruption in the receipt of inventory, customer prioritization or other causes could result in reduced manufacturing capabilities or delayed deliveries for certain of our products, any or all of which could materially and adversely affect our results of operations.

Charges for Excess or Obsolete Inventory

One factor on which we compete is the ability to ship products on schedules required by customers. In order to facilitate timely shipping, management forecasts demand, both in type and amount of products, and these forecasts are used to determine inventory to be purchased. We also order materials based on our technology roadmap, which represents management’s assessment of technology that will be utilized in new products that we develop. Certain types of inventory, including lasers and optical equipment, are particularly expensive and may only be used in the production of a single type of product. If actual demand is lower than forecast with respect to the type or amount of products actually ordered, or both, our inventory levels may increase. As a result, there is a risk that we may have to incur material accounting charges for excess and obsolete inventory if inventory cannot be used, which would negatively affect our financial results. Also, if we alter our technology or product development strategy, we may have inventory that may not be usable under the new strategy, which may also result in material accounting charges. For example, during 2013, we recorded $21.0 million of charges in cost of sales for an inventory write-off associated with discontinued products.

Uncertainties Resulting from Conflict Minerals Regulation

On August 22, 2012, the SEC adopted a new rule requiring disclosures of specified minerals, known as conflict minerals, that are necessary to the functionality or production of products manufactured or contracted to be manufactured by companies filing public reports. The new rule, which is effective for the 2013 calendar year and requires a disclosure report to be filed by May 31, 2014, will require companies to perform due diligence, disclose, and report whether such minerals originate from the Democratic Republic of Congo or an adjoining country. The new rule could affect sourcing at competitive prices and availability in sufficient quantities of certain minerals used in the manufacture of our products, including tantalum, tin, gold, and tungsten. The number of suppliers who provide conflict-free minerals may be limited. In addition, there may be material costs associated with complying with the disclosure requirements, such as costs related to determining the source of certain minerals used in our products, as well as costs of possible changes to products, processes, or sources of supply as a consequence of such verification activities. Since our supply chain is complex, we may not be able to sufficiently verify the origins of the relevant minerals used in our products through the due diligence procedures that we implement, which may harm our reputation. In addition, we may encounter challenges to satisfy those customers who require that all of the components of our products be certified as conflict-free, which could place us at a competitive disadvantage if we are unable to do so.

Risks Related to Our Organization

Operating a Global Business

International shipments accounted for 90% of net sales in 2013, with 85% of our net shipments to customers in Asia. We expect that international shipments will continue to represent a significant percentage of net sales in the future. We also have significant foreign operations, including manufacturing facilities in Singapore and China, research and development facilities in Canada, France and Taiwan, and sales and service offices in various countries. Under our globalization strategy, we intend to increase our foreign operations in the future. Our non-U.S. sales, purchases and operations are subject to risks inherent in conducting business abroad, many of which are outside our control, including the following:

• periodic local or geographic economic downturns and unstable political conditions;

• price and currency exchange controls;

• fluctuation in the relative values of currencies;

• difficulty in repatriating money, whether as a result of tax laws or otherwise;

• difficulties protecting intellectual property;

• compliance with labor laws and other laws governing employees;

• local labor disputes;

• shipping delays and disruptions;

• unexpected changes in trading policies, regulatory requirements, tariffs and other barriers; and

• difficulty in managing a global enterprise, including staffing, collecting accounts receivable, and managing suppliers, distributors and representatives.

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Our business and operating results could also be impacted, directly or indirectly, by natural disasters, outbreaks of infectious disease, military action, international conflicts, terrorist activities, civil unrest and associated political instability. Many of our facilities, including our Portland, Oregon headquarters, are in areas with known earthquake risk. Some of these events or circumstances may also result in heightened security concerns with respect to domestic and international travel and commerce, which may further affect our business and operating results. In particular, due to these uncertainties, we are subject to the following additional risks:

• future tightening of immigration controls may adversely affect the residence status of non-U.S. engineers and other key technical employees in our U.S. facilities or our ability to hire new non-U.S. employees in such facilities;

• more frequent instances of shipping delays;

• demand for our products may not increase or may decrease; and

• our customers or suppliers may experience financial difficulties or cease operations.

We currently benefit from a tax incentive program in Singapore pursuant to which we pay no Singapore income tax with respect to our manufacturing income. The incentive commenced on July 1, 2006 and will continue through June 30, 2016 assuming we are able to satisfy applicable requirements. There is no assurance we will be able to satisfy these requirements. Failure to meet such requirements may lead to reduction in future benefits.

Implementation and Modification of Globalization Strategy

We are implementing our globalization strategy in which we are moving certain operational resources and capabilities to different countries in Asia to be closer to many of our significant customers and to reduce costs. We believe this strategy will enhance customer relationships, improve our responsiveness, and reduce our manufacturing costs for certain products. We opened a manufacturing facility in Singapore in the fourth quarter of 2010, which manufactures certain IMG, LED, CG and laser ablation products and is now our primary system manufacturing facility. Additionally, we have a manufacturing facility in Beijing China, which manufactures certain laser products.

Our globalization strategy is subject to a variety of complexities and risks, many of which we have little experience managing, and which may divert a substantial amount of management’s time. These risks include:

• challenges in designing new facilities that can be scaled for future expansion, replicating current processes and bringing new facilities up to full operation;

• unpredictable costs, redundancy costs and cost overruns for developing new facilities and acquiring equipment;

• building local management teams, technical personnel and other staff for functions that we have not previously conducted outside of the United States;

• technical obstacles such as poor production or process yield and loss of quality control during the ramp of a new facility;

• re-qualifications and other procedures that may be required by our customers;

• our ability to bring up local suppliers to meet our quality and cycle-time needs;

• our ability to reduce costs in the United States as we add costs in Asia;

• rapidly changing business conditions that may require plans to be changed or abandoned before they are fully implemented; and

• challenges posed by distance and by differences in language and culture.

These and other factors could delay the development and implementation of our strategy, as well as impair our gross margins, delay shipments and deliveries, cause us to lose sales, require us to write off investments already made, damage our reputation and harm our business, financial condition and results of operations. If we decide to change our current globalization strategy, we may incur charges for certain costs incurred.

Acquisitions and Divestitures

We may make acquisitions of, or significant investments in, other businesses with complementary products, services or technologies, such as our June 2012 acquisition of Eolite Systems and our May 2013 acquisition of the assets of the Semiconductor Systems business from GSI, Group Inc. Acquisitions involve numerous risks, many of which are unpredictable and beyond our control, including:

• difficulties and increased costs in connection with integration of the personnel, operations, technologies and products of the acquired businesses;

• implementation of our enterprise resource planning (ERP) system into the acquired company’s operations;

• diversion of management’s attention from other operational matters;

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• the potential loss of key employees of the acquired company;

• lack of synergy or inability to realize expected synergies resulting from the acquisition;

• acquired assets becoming impaired as a result of technological advancements or worse-than-expected performance by the acquired company;

• difficulties establishing satisfactory internal controls at the acquired company;

• risks and uncertainties relating to the performance of the combined company following the transaction; and

• acquiring unanticipated liabilities for which we will not be indemnified.

Furthermore, the accounting for an acquisition could result in significant charges resulting from amortization or write-off of intangible assets we acquire. Our inability to effectively manage these risks could result in our inability to realize the anticipated benefits of an acquisition on a timely basis, or at all, and materially and adversely affect our business, financial condition and results of operations. In addition, all acquisition transaction costs must be expensed as incurred rather than capitalized, which may have a material adverse effect on our results of operations.

The means by which we finance an acquisition may also significantly affect our business or the value of the shares of our common stock. If we issue common stock to pay for an acquisition, the ownership percentage of our existing shareholders will be diluted and the value of the shares held by our existing shareholders could be reduced. If we use cash on hand to pay for an acquisition, the payment could significantly reduce the cash that would be available to fund our operations or to use for other purposes. If we borrow funds in connection with an acquisition, we would be required to use cash to service the debt and to comply with financial and other covenants.

We may from time to time also make strategic investments in development stage companies. Investments in development stage companies are subject to a high degree of risk. We could lose all or a portion of our investment in any such company or could be required to recognize an impairment charge with respect to our investment, as we did in the second quarter of 2014 regarding our investment in OmniGuide, Inc.

Hiring and Retention of Personnel

Our continued success depends in part upon the services of our key managerial, financial and technical personnel. The loss of key personnel, or our inability to attract, assimilate and retain qualified personnel, could result in the loss of customers, inhibit our ability to operate and grow our business and otherwise have a material adverse effect on our business and results of operations. We have previously had to, and may in the future have to, impose salary reductions on employees during economic downturns in an effort to maintain our financial position. These actions may have an adverse effect on employee loyalty and may make it more difficult for us to attract and retain key personnel. Competition for qualified personnel in the industries in which we compete is intense, and we may not be successful in attracting and retaining qualified personnel. We may incur significant costs in our efforts to recruit and retain key personnel, which could affect our financial position and results of operations.

Risks Related to Technology

Markets Characterized by Rapid Technological Change

The markets for our products are characterized by rapid technological change and innovation, frequent new product introductions, changes in customer requirements and evolving industry standards. Our future performance will depend on the successful development, introduction and market acceptance of new and enhanced products that address technological changes and the requirements of current and potential customers. The development of new, technologically advanced products is a complex and uncertain process, requiring high levels of innovation and highly skilled engineering and development personnel, as well as the accurate anticipation of technological and market trends. We cannot assure you that we will be able to identify, develop, manufacture, market or support new or enhanced products successfully, if at all, or on a timely basis. The introduction by us or by our competitors of new or enhanced products, or alternative technologies, may cause our customers to defer, change or cancel orders for our existing products or cease purchasing our products altogether. For example, our semiconductor memory customers are exploring alternative redundancy technologies such as electrical redundancy technology. We believe our historical semiconductor memory customers are converting these technologies into their manufacturing process for newer products, thereby materially reducing the size of the addressable market of our memory yield improvement systems. Further, we cannot assure that our new products will gain market acceptance or that we will be able to respond effectively to product announcements by competitors, technology changes or emerging industry standards. If we are unable to develop new or enhanced products to address product or technology changes or new industry standards on a timely basis or at all, or if our new or enhanced products are not accepted by the market, or if our customers adopt alternative technologies, our business, financial condition and results of operations may be adversely affected.

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Need to Invest in Research and Development

Our industry is characterized by the need for continued investment in research and development. Because of intense competition in the industries in which we compete, if we were to fail to invest sufficiently in research and development, our products could become less attractive to our current and potential customers or obsolete, and our business and financial condition could be materially and adversely affected. As a result of our need to maintain our spending levels in this area, our operating results could be materially harmed if our net sales decline. In addition, as a result of our emphasis on research and development and technological innovation, our operating costs may increase in the future, and research and development expenses may increase as a percentage of total operating expenses and as a percentage of net sales.

Products are Highly Complex

Our products are highly complex, and our extensive product development, manufacturing and testing processes may not be adequate to detect all defects, errors, failures and quality issues that could impact customer satisfaction or result in claims against us. As a result, we may have to replace certain components or provide remediation in response to the discovery of defects in products after they are shipped. The occurrence of any defects, errors, failures or quality issues could result in cancellation of orders, product returns, diversion of our resources, legal actions by our customers and other losses to us or to our customers. These occurrences could also result in the loss of, or delay in, market acceptance of our products, loss of sales and increased expenses and warranty costs, which would harm our business and adversely affect our revenues and profitability.

Risks Related to Legal Matters

Protection of Proprietary Rights – Generally

Our success depends significantly upon the protection of our proprietary rights. We attempt to protect our proprietary rights through patents, copyrights, trademarks, maintenance of trade secrets and other measures, including entering into confidentiality agreements. We incur substantial costs to obtain and maintain patents and to defend our intellectual property rights. We rely upon the laws of the United States and foreign countries where we develop, manufacture or sell our products to protect our proprietary rights. We may not be successful in protecting these proprietary rights, these rights may not provide the competitive advantages that we expect, or other parties may challenge, invalidate or circumvent these rights.

Protection of Proprietary Rights – Foreign Jurisdictions

Our efforts to protect our intellectual property may be less effective in some foreign countries where intellectual property rights are not as well protected as in the United States. Many United States companies have encountered substantial problems in protecting their proprietary rights against infringement in foreign countries. If we fail to adequately protect our intellectual property in these countries, it could be easier for our competitors to sell competing products in foreign countries, which could result in reduced sales and gross margins.

Intellectual Property Infringement Claims

Several of our competitors hold patents covering a variety of technologies, applications and methods of use similar to some of those used in our products. While we attempt in our designs to avoid patent infringement, from time to time we and our customers have received correspondence from our competitors claiming that some of our products, as used by our customers, may be infringing one or more of these patents. Competitors or others have in the past and may in the future assert infringement claims against our customers or us with respect to current or future products or uses, and these assertions may result in costly litigation or require us to obtain a license to use intellectual property rights of others. If claims of infringement are asserted against our customers, those customers may seek indemnification from us for damages or expenses they incur.

If we become subject to infringement claims, we will evaluate our position and consider the available alternatives, which may include seeking licenses to use the technology in question or defending our position. These licenses, however, may not be available on satisfactory terms or at all. If we are not able to negotiate the necessary licenses on commercially reasonable terms or successfully defend our position, our financial condition and results of operations could be materially and adversely affected.

Tax Audits and Changes in Tax Law

We are periodically under audit by United States and foreign tax authorities and may have exposure to additional tax liabilities as a result. Significant judgment is required in determining our provision for income and other tax liabilities. Although we believe our tax estimates are reasonable, the final outcome of tax audits and the impact of changes in tax laws or the interpretation of tax laws could result in material differences from what is reflected in historical income tax accruals. If additional taxes are assessed as a result of an examination, a material effect on our financial results, tax positions or cash flows could occur in the period or periods in which the determination is made.

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Legal Proceedings

From time to time we are subject to various legal proceedings, including breach of contract claims and claims that involve possible infringement of patent or other intellectual property rights of third parties. It is inherently difficult to assess the outcome of litigation matters, and there can be no assurance that we will prevail in any litigation. Any litigation could result in substantial cost and diversion of management’s attention, which by itself could have a material adverse effect on our financial condition and results of operations. Further, adverse determinations in such litigation could result in loss of our property rights, subject us to significant liabilities, require us to seek licenses from others or prevent us from manufacturing or selling our products, any of which could materially adversely affect our business, financial condition, results of operations or cash flows.

Provisions Restricting Our Acquisition

Our articles of incorporation and bylaws contain provisions that could make it harder for a third party to acquire us without the consent of our Board of Directors. Our Board of Directors has also adopted a shareholder rights plan, or “poison pill,” which would significantly dilute the ownership of a hostile acquirer. In addition, the Oregon Control Share Act and the Oregon Business Combination Act limit the ability of parties who acquire a significant amount of voting stock to exercise control over us. These provisions may have the effect of lengthening the time required for a person to acquire control of us through a proxy contest or the election of a majority of our Board of Directors, may deter efforts to obtain control of us and may make it more difficult for a third party to acquire us without negotiation. These provisions may apply even if the offer may be considered beneficial by our shareholders.

Risks Related to Financial Matters

Unfavorable Currency Exchange Rate Fluctuations

Currency exchange rate fluctuations could have an adverse effect on our sales and results of operations and we could experience losses with respect to forward exchange contracts into which we may enter. Unfavorable currency fluctuations could require us to increase prices to foreign customers, which could result in lower net sales by us to those customers. Alternatively, if we do not adjust the prices for our products in response to unfavorable currency fluctuations, our results of operations could be materially and adversely affected. In addition, some of our foreign sales are denominated in the currency of the country in which these products are sold and the currency we receive in payment for such sales could be less valuable at the time of receipt as a result of exchange rate fluctuations. From time to time, we enter into forward exchange contracts to hedge the value of accounts receivable primarily denominated in Japanese yen and other currencies. However, we cannot be certain that our efforts will be adequate to protect us against significant currency fluctuations or that such efforts will not expose us to additional exchange rate risks, which could adversely affect our results of operations.

Fluctuations in Effective Tax Rate

As a global company, we are subject to taxation in the United States and numerous foreign jurisdictions. Our effective tax rate is subject to fluctuation from one period to the next because the income tax rates for each year are a function of many factors, including: (a) taxable income levels and the effects of a mix of profits (losses) earned by us and our subsidiaries in numerous tax jurisdictions with a broad range of income tax rates; (b) our ability to utilize deferred tax assets; (c) taxes, refunds, interest or penalties resulting from tax audits; (d) the magnitude of various credits and deductions as a percentage of total taxable income; and (e) changes in tax laws or the interpretation of such tax laws. Changes in the mix of these items may cause our effective tax rate to fluctuate between periods, which could have a material adverse effect on our financial position and results of operations.

Impairment of Intangible Assets

We held a total of $7.7 million in acquired intangible assets and $7.9 million in goodwill at December 28, 2013. We review our acquired intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. We test goodwill for impairment using a quantitative approach at least annually or between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value below the carrying value.

We performed a review of our acquired intangible assets in the fourth quarter of 2013. We identified intangible assets relating to acquired in-process research and development programs from which we no longer expect to derive value. As a result, we accelerated amortization of $2.3 million on acquired intangible assets. There were no other events or circumstances during the first three quarters of 2014 that would indicate the carrying value of our long-lived assets may not be recoverable.

We performed our annual goodwill impairment analysis during the fourth quarter of 2013 and determined that it was not “more likely than not” that the fair value of our single reporting unit was less than its carrying value. If at any time management determines that an impairment exists, we will be required to reflect the impaired value as part of operating

30

income, which will result in a reduction in earnings and a corresponding reduction in our net asset value in the period such impairment is identified.

Stock Price Volatility

The market price of our common stock has fluctuated widely. During fiscal 2013, our stock price fluctuated between a high of $15.20 per share and a low of $9.46 per share. Consequently, the current market price of our common stock may not be indicative of future market prices, and we may be unable to sustain or increase the value of an investment in our common stock. Factors affecting our stock price, many of which are outside of our control, may include:

• variations in our operating results from quarter to quarter or our guidance for future operating results;

• changes in either short term or long term earnings estimates by analysts or our failure to meet analysts’ expectations;

• changes in the market price per share of our public company customers;

• market conditions in the semiconductor and other industries into which we sell products;

• general economic conditions;

• political changes, hostilities or natural disasters;

• low trading volume of our common stock;

• the number of analysts covering our common stock; and

• the number of firms making a market in our common stock.

In addition, the stock market has recently experienced significant price and volume fluctuations. These fluctuations have particularly affected the market prices of the securities of high-technology companies like ours. These market fluctuations could adversely affect the market price of our common stock.

Reduction or Cessation of Dividends

Our Board of Directors first adopted a dividend policy in December 2011. We intend to pay quarterly dividends subject to capital availability and periodic determinations by our Board of Directors that cash dividends are in the best interest of our shareholders and are in compliance with all laws and agreements applicable to the declaration and payment of cash dividends. Future dividends may be affected by, among other factors: our views on potential future capital requirements for investments in acquisitions; funding of research and development; legal risks; stock repurchase programs; changes in federal and state income tax laws or corporate laws; and changes to our business model. Our dividend payments may change from time to time, and we cannot provide assurance that we will continue to declare dividends at all or in any particular amounts. Further, the special dividend declared by the Board of Directors in December 2012 should not be considered a recurring event. A reduction or cessation in our dividend payments could have a negative effect on our stock price.

Impairment of Investments

Our investment portfolio is primarily comprised of commercial paper, debt securities issued by U.S. governmental agencies and municipal debt securities. These investments are intended to be highly liquid and low risk. If the markets for these securities were to deteriorate for any reason, including as a result of a downgrade in the credit rating of U.S. government securities, the liquidity and value of these investments could be negatively affected, which could result in impairment charges. In addition, the value of any investments we may make in private companies, such as OmniGuide, Inc., could be negatively affected by any number of reasons, including the financial condition or prospects of the company or the terms of any subsequent financing, which could also result in an impairment charge. Any such impairment charges may have a material impact on our financial condition and results of operations.

Item 4. Mine Safety Disclosures

Not Applicable.

31

Item 6. Exhibits

This list is intended to constitute the exhibit index.

3.1	Third Restated Articles of Incorporation, as amended. Incorporated by reference to Exhibit 3.1 of the Company's Annual Report on Form 10-K for the fiscal year ended April 3, 2010.
3.2	2009 Amended and Restated Bylaws, as amended. Incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on November 9, 2012.
4.1	Rights Agreement, dated as of May 18, 2009, between Electro Scientific Industries, Inc. and Mellon Investor Services. Incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K filed on May 19, 2009.
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document *
101.SCH	XBRL Taxonomy Extension Schema Document *
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document *
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document *
101.LAB	XBRL Taxonomy Extension Label Linkbase Document *
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document *

* Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections.

32

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:	February 5, 2014	ELECTRO SCIENTIFIC INDUSTRIES, INC.
		By:	/s/    NICHOLAS KONIDARIS
			Nicholas Konidaris
			President and Chief Executive Officer
			(Principal Executive Officer)
		By:	/s/    Paul Oldham
			Paul Oldham
			Vice President of Administration, Chief Financial Officer and Corporate Secretary
			(Principal Financial Officer)
		By:	/s/    Kerry Mustoe
			Kerry Mustoe
			Vice President, Corporate Controller and Chief Accounting Officer
			(Principal Accounting Officer)

33

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, Nicholas Konidaris, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Electro Scientific Industries, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 5, 2014

/s/ Nicholas Konidaris

Nicholas Konidaris

President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, Paul Oldham, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Electro Scientific Industries, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 5, 2014

/s/ Paul Oldham

Paul Oldham

Vice President of Administration,

Chief Financial Officer and Corporate Secretary

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this quarterly report on Form 10-Q of Electro Scientific Industries, Inc. (the Company) for the quarterly period ended December 28, 2013 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Nicholas Konidaris, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Nicholas Konidaris

Nicholas Konidaris

President and Chief Executive Officer

February 5, 2014

This certification is made solely for the purpose of 18 U.S.C. Section 1350, and not for any other purpose. A signed original of this written statement required by Section 906 has been provided to Electro Scientific Industries, Inc. and will be retained by Electro Scientific Industries, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this quarterly report on Form 10-Q of Electro Scientific Industries, Inc. (the Company) for the quarterly period ended December 28, 2013 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Paul Oldham, Vice President of Administration, Chief Financial Officer, and Corporate Secretary of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Paul Oldham

Paul Oldham

Vice President of Administration,

Chief Financial Officer and Corporate Secretary

February 5, 2014

This certification is made solely for the purpose of 18 U.S.C. Section 1350, and not for any other purpose. A signed original of this written statement required by Section 906 has been provided to Electro Scientific Industries, Inc. and will be retained by Electro Scientific Industries, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Inventories - Components of Inventories (Details) (USD $) In Thousands, unless otherwise specified	Dec. 28, 2013	Mar. 30, 2013
Inventory Disclosure [Abstract]
Raw materials and purchased parts	$ 49,298	$ 44,332
Work-in-process	13,353	8,985
Finished goods	5,975	9,750
Inventories	$ 68,626	$ 63,067

XML

Product and Geographic Information - Net Sales by Product Type (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 28, 2013	Dec. 29, 2012
Product Information
Net sales	$ 38,267	$ 37,930	$ 144,086	$ 177,051
Interconnect Microfabrication Group
Product Information
Net sales	25,378	30,537	98,096	147,506
Components Group
Product Information
Net sales	4,354	4,071	20,907	19,607
Semiconductor Group
Product Information
Net sales	$ 8,535	$ 3,322	$ 25,083	$ 9,938

XML

Earnings (Loss) Per Share - Reconciliation of Weighted Average Shares Outstanding Used in Calculation of Basic and Diluted Earnings Per Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 28, 2013	Dec. 29, 2012
Earnings Per Share [Abstract]
Net income (loss)	$ (4,640)	$ 6,768	$ (10,701)	$ 11,035
Weighted average number of shares - basic	30,054	29,434	29,922	29,296
Incremental diluted shares	0	609	0	658
Weighted average shares used for diluted earnings per share	30,054	30,043	29,922	29,954
Net (loss) income per share - basic	$ (0.15)	$ 0.23	$ (0.36)	$ 0.38
Net (loss) income per share - diluted	$ (0.15)	$ 0.23	$ (0.36)	$ 0.37

XML

Restructuring and Cost Management Plans (Tables)

9 Months Ended

Dec. 28, 2013

Restructuring and Related Activities [Abstract]

Amounts Related to Restructuring Costs Payable

The following table presents the amounts related to restructuring costs payable (in thousands):

Restructuring costs payable balance as of March 30, 2013	$	485
Employee severance and related benefits:
Cash payments	(153		)
Other adjustments	(5		)
Restructuring costs payable balance as of December 28, 2013	$	327

XML

Inventories (Tables)

9 Months Ended

Dec. 28, 2013

Inventory Disclosure [Abstract]

Components of Inventories

Components of inventories were as follows:

(In thousands)	Dec 28, 2013		Mar 30, 2013
Raw materials and purchased parts	$	49,298	$	44,332
Work-in-process	13,353		8,985
Finished goods	5,975		9,750
	$	68,626	$	63,067

XML

Restructuring and Cost Management Plans - Amounts Related to Restructuring Costs Payable (Details) (USD $)	9 Months Ended
	Dec. 28, 2013
Restructuring Cost and Reserve [Line Items]
Change in estimate	$ 0
Restructuring Reserve [Roll Forward]
Beginning balance	485,000
Cash payments	(153,000)
Other adjustments	(5,000)
Ending balance	$ 327,000

XML

Other Assets - Additional Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 28, 2013	Dec. 29, 2012	Mar. 30, 2013
Schedule of Cost-method Investments [Line Items]
Cost Method Investments	$ 10,378		$ 10,378		$ 8,966
Other than temporary impairment of cost based investments	0	0	3,588	0
Omni Guide Incorporation [Member]
Schedule of Cost-method Investments [Line Items]
Percentage Of Ownership Interests	15.00%		15.00%
Cost Method Investment Preferred Stock Class D [Member] | Omni Guide Incorporation [Member]
Schedule of Cost-method Investments [Line Items]
Cost Method Investments	6,000		6,000
Cost Method Investment Preferred Stock Class F [Member] | Omni Guide Incorporation [Member]
Schedule of Cost-method Investments [Line Items]
Cost Method Investments	5,000		5,000
Cost Method Investment Preferred Stock Class E [Member] | Omni Guide Incorporation [Member]
Schedule of Cost-method Investments [Line Items]
Cost Method Investments	$ 3,000		$ 3,000

XML

Fair Value Measurements - Investments (Details) (USD $)	Dec. 28, 2013	Mar. 30, 2013
Schedule of Available-for-sale Securities
Available-for-sale Securities, Debt Maturities, Year Two Through Five, Amortized Cost Basis	$ 6,000,000
Available-for-sale Securities, Debt Maturities, Next Twelve Months, Amortized Cost Basis	55,500,000
Available for sale Securities Current
Schedule of Available-for-sale Securities
Cost	55,459,000	90,530,000
Unrealized Gain	9,000	15,000
Unrealized Loss	0	0
Fair Value	55,468,000	90,545,000
Available for sale Securities Current | Commercial Paper
Schedule of Available-for-sale Securities
Cost	20,447,000	51,443,000
Unrealized Gain	0	0
Unrealized Loss	0	0
Fair Value	20,447,000	51,443,000
Available for sale Securities Current | Government agencies
Schedule of Available-for-sale Securities
Cost	6,035,000	26,556,000
Unrealized Gain	1,000	8,000
Unrealized Loss	0	0
Fair Value	6,036,000	26,564,000
Available for sale Securities Current | Corporate Bonds
Schedule of Available-for-sale Securities
Cost	18,549,000	10,473,000
Unrealized Gain	1,000	7,000
Unrealized Loss	0	0
Fair Value	18,550,000	10,480,000
Available for sale Securities Current | Municipal Bonds
Schedule of Available-for-sale Securities
Cost	10,428,000	2,058,000
Unrealized Gain	7,000	0
Unrealized Loss	0	0
Fair Value	10,435,000	2,058,000
Available for sale Securities Non Current
Schedule of Available-for-sale Securities
Cost	6,017,000	12,335,000
Unrealized Gain	7,000	1,000
Unrealized Loss	0	(7,000)
Fair Value	6,024,000	12,329,000
Available for sale Securities Non Current | Government agencies
Schedule of Available-for-sale Securities
Cost	1,998,000	3,082,000
Unrealized Gain	0	0
Unrealized Loss	0	0
Fair Value	1,998,000	3,082,000
Available for sale Securities Non Current | Corporate Bonds
Schedule of Available-for-sale Securities
Cost		7,923,000
Unrealized Gain		0
Unrealized Loss		(7,000)
Fair Value		7,916,000
Available for sale Securities Non Current | Municipal Bonds
Schedule of Available-for-sale Securities
Cost	4,019,000	1,330,000
Unrealized Gain	7,000	1,000
Unrealized Loss	0	0
Fair Value	$ 4,026,000	$ 1,331,000

XML

Shareholders' Equity - Dividend Declared and Paid (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended					9 Months Ended
	Dec. 28, 2013	Sep. 28, 2013	Jun. 29, 2013	Mar. 30, 2013	Dec. 29, 2012	Dec. 28, 2013	Dec. 29, 2012
Stockholders' Equity Note [Abstract]
Date Declared	Nov. 07, 2013	Aug. 08, 2013	May 14, 2013	Feb. 07, 2013	Nov. 08, 2012
Record Date	Nov. 19, 2013	Aug. 19, 2013	Jun. 05, 2013	Feb. 28, 2013	Nov. 21, 2012
Payment Date	Dec. 04, 2013	Sep. 03, 2013	Jun. 19, 2013	Mar. 14, 2013	Dec. 05, 2012
Amount per Share	$ 0.08	$ 0.08	$ 0.08	$ 0.08	$ 0.08
Special dividend per share declared					$ 2.00		$ 2.00
Cash dividends paid to shareholders						$ (7,158)	$ (65,723)

XML

Earnings (Loss) Per Share - Additional Information (Details) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 28, 2013	Dec. 29, 2012
Antidilutive Securities Excluded from Computation of Earnings Per Share
Number of shares that are not included in the calculation of diluted net earnings per share	3.8	2.5	4.0	2.3

XML

Recent Accounting Pronouncements

9 Months Ended

Dec. 28, 2013

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

There have been no recent accounting pronouncements or changes in accounting pronouncements during the quarter ended December 28, 2013 that are of significance to the Company.

XML

Accrued Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Dec. 28, 2013	Sep. 28, 2013	Mar. 30, 2013	Dec. 29, 2012	Sep. 29, 2012	Mar. 31, 2012
Disclosure Accrued Liabilities [Abstract]
Payroll-related liabilities	$ 7,805		$ 7,918
Product warranty accrual	4,623	5,563	5,411	5,790	6,096	4,187
Purchase order commitments and receipts	1,257		2,533
Pension benefit liabilities	1,667		1,501
Professional fees payable	1,762		1,322
Freight accrual	536		646
Income taxes payable	429		2,884
Restructuring costs payable	327		485
Customer deposits	685		225
Value added taxes payable	272		258
Other	1,581		1,747
Accrued liabilities	$ 20,944		$ 24,930

XML

Product Warranty (Tables)

9 Months Ended

Dec. 28, 2013

Product Warranties Disclosures [Abstract]

Reconciliation of the Change in Aggregate Accrual for Product Warranty

The following is a reconciliation of the changes in the aggregate product warranty accrual:

	Fiscal quarter ended						Three fiscal quarters ended
(In thousands)	Dec 28, 2013			Dec 29, 2012			Dec 28, 2013			Dec 29, 2012
Product warranty accrual, beginning	$	5,563		$	6,096		$	5,411		$	4,187
Warranty charges incurred, net	(1,755		)	(1,603		)	(5,298		)	(5,513		)
Provision for warranty charges	815			1,297			4,510			7,116
Product warranty accrual, ending	$	4,623		$	5,790		$	4,623		$	5,790

XML

Accrued Liabilities (Tables)

9 Months Ended

Dec. 28, 2013

Disclosure Accrued Liabilities [Abstract]

Accrued Liabilities

Accrued liabilities consisted of the following:

(In thousands)	Dec 28, 2013		Mar 30, 2013
Payroll-related liabilities	$	7,805	$	7,918
Product warranty accrual	4,623		5,411
Professional fees payable	1,762		1,322
Pension benefit liabilities	1,667		1,501
Purchase order commitments and receipts	1,257		2,533
Customer deposits	685		225
Freight accrual	536		646
Income taxes payable	429		2,884
Restructuring costs payable	327		485
Value added taxes payable	272		258
Other	1,581		1,747
	$	20,944	$	24,930

XML

Product Warranty (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 28, 2013	Dec. 29, 2012
Product Warranty
Product warranty accrual, beginning	$ 5,563	$ 6,096	$ 5,411	$ 4,187
Warranty charges incurred, net	1,755	1,603	5,298	5,513
Provision for warranty charges	815	1,297	4,510	7,116
Product warranty accrual, ending	$ 4,623	$ 5,790	$ 4,623	$ 5,790

XML

Deferred Revenue (Tables)

9 Months Ended

Dec. 28, 2013

Deferred Revenue Disclosure [Abstract]

Reconciliation of the Changes in Deferred Revenue

The following is a reconciliation of the changes in deferred revenue:

	Fiscal quarter ended						Three fiscal quarters ended
(In thousands)	Dec 28, 2013			Dec 29, 2012			Dec 28, 2013			Dec 29, 2012
Deferred revenue, beginning	$	7,855		$	9,456		$	10,196		$	10,751
Revenue deferred	5,294			5,394			18,892			43,340
Revenue recognized	(6,455		)	(8,330		)	(22,394		)	(47,571		)
Deferred revenue, ending	$	6,694		$	6,520		$	6,694		$	6,520

XML

Earnings (Loss) Per Share (Tables)

9 Months Ended

Dec. 28, 2013

Earnings Per Share [Abstract]

Reconciliation of Weighted Average Shares Outstanding Used in Calculation of Basic and Diluted Earnings Per Share

The following is a reconciliation of weighted average shares outstanding used in the calculation of basic and diluted earnings per share:

	Fiscal quarter ended					Three fiscal quarters ended
(In thousands, except per share data)	Dec 28, 2013			Dec 29, 2012		Dec 28, 2013			Dec 29, 2012
Net (loss) income	$	(4,640	)	$	6,768	$	(10,701	)	$	11,035
Weighted average shares used for basic earnings per share	30,054			29,434		29,922			29,296
Incremental diluted shares	—			609		—			658
Weighted average shares used for diluted earnings per share	30,054			30,043		29,922			29,954
Net (loss) income per share:
Net (loss) income — basic	$	(0.15	)	$	0.23	$	(0.36	)	$	0.38
Net (loss) income — diluted	$	(0.15	)	$	0.23	$	(0.36	)	$	0.37

XML

The Company

9 Months Ended

Dec. 28, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The Company

Basis of Presentation

These unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted in these interim statements. Accordingly, these condensed consolidated financial statements are to be read in conjunction with the financial statements and notes included in the Company's Annual Report on Form 10-K for its fiscal year ended March 30, 2013. These interim statements include all adjustments (consisting of only normal recurring adjustments and accruals) necessary for a fair presentation of results for the interim periods presented. The results for interim periods are not necessarily indicative of the results of operations for the entire year.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of commitments and contingencies at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results may differ from those estimates.

Management believes that the estimates used are reasonable. Significant estimates made by management include: revenue recognition; inventory valuation; product warranty reserves; allowance for doubtful accounts; accrued restructuring costs; share-based compensation; income taxes including the valuation of deferred tax assets; fair value measurements; valuation of cost method equity investments; valuation of long-lived assets; valuation of goodwill; and valuation of acquired technology.

There have been no significant changes to the Company's significant accounting policies from those presented in Note 2 “Summary of Significant Accounting Policies” to the consolidated financial statements included in the Company's Annual Report on Form 10-K for its fiscal year ended March 30, 2013. All references to years or quarters relate to fiscal years or fiscal quarters unless otherwise noted.

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Product and Geographic Information (Tables)

9 Months Ended

Dec. 28, 2013

Segment Reporting [Abstract]

Net sales by product type

Net sales by product type were as follows:

	Fiscal quarter ended				Three fiscal quarters ended
(In thousands)	Dec 28, 2013		Dec 29, 2012		Dec 28, 2013		Dec 29, 2012
Interconnect & Microfabrication Group (IMG)	$	25,378	$	30,537	$	98,096	$	147,506
Semiconductor Group (SG)	8,535		3,322		25,083		9,938
Components Group (CG)	4,354		4,071		20,907		19,607
	$	38,267	$	37,930	$	144,086	$	177,051

Net sales by geographic area, based on location of end user

Net sales by geographic area, based on the location of the end user, were as follows:

	Fiscal quarter ended				Three fiscal quarters ended
(In thousands)	Dec 28, 2013		Dec 29, 2012		Dec 28, 2013		Dec 29, 2012
Asia	$	29,087	$	28,928	$	117,361	$	154,962
Americas	4,761		6,990		15,470		15,696
Europe	4,419		2,012		11,255		6,393
	$	38,267	$	37,930	$	144,086	$	177,051

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Other Current Assets (Details) (USD $) In Thousands, unless otherwise specified	Dec. 28, 2013	Mar. 30, 2013
Disclosure Other Current Assets [Abstract]
Prepaid expenses	$ 2,931	$ 2,240
Value added tax receivable	672	763
Other	1,193	895
Other current assets	$ 4,796	$ 3,898

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Dec. 28, 2013	Mar. 30, 2013
Current assets:
Cash and cash equivalents	$ 77,174	$ 88,913
Short-term investments	46,299	56,144
Trade receivables, net of allowances	27,479	31,779
Inventories	68,626	63,067
Shipped systems pending acceptance	1,179	1,007
Deferred income taxes, net	1,714	1,682
Other current assets	4,796	3,898
Total current assets	227,267	246,490
Non-current assets:
Non-current investments	6,024	12,329
Property, plant and equipment, net	27,830	27,894
Non-current deferred income taxes, net	3,680	3,766
Goodwill	7,889	7,889
Acquired intangible assets, net	7,696	9,088
Other assets	19,199	14,752
Total assets	299,585	322,208
Current liabilities:
Accounts payable	14,191	16,958
Accrued liabilities	20,944	24,930
Deferred revenue	6,694	10,196
Total current liabilities	41,829	52,084
Non-current liabilities:
Non-current income taxes payable	6,208	5,982
Commitments and Contingencies
Shareholders' equity:
Preferred stock, without par value	0	0
Common stock, without par value	181,844	176,631
Retained earnings	69,368	87,228
Accumulated other comprehensive income	336	283
Total shareholders' equity	251,548	264,142
Total liabilities and shareholders' equity	$ 299,585	$ 322,208

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Deferred Revenue (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 28, 2013	Dec. 29, 2012
Deferred Revenue Disclosure [Abstract]
Deferred revenue, beginning	$ 7,855	$ 9,456	$ 10,196	$ 10,751
Revenue deferred	5,294	5,394	18,892	43,340
Revenue recognized	(6,455)	(8,330)	(22,394)	(47,571)
Deferred revenue, ending	$ 6,694	$ 6,520	$ 6,694	$ 6,520

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 28, 2013	Dec. 29, 2012
Foreign currency translation adjustment, taxes	$ (86)	$ (134)	$ 22	$ 19
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Tax	2	1	5	4
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Tax	$ (2)	$ (8)	$ 3	$ (5)

XML

Fair Value Measurements - Fair Value Hierarchy for Financial Assets Measured at Fair Value on Recurring Basis (Details) (Fair Value, Measurements, Recurring, USD $) In Thousands, unless otherwise specified	Dec. 28, 2013	Mar. 30, 2013
Money Market Instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets	$ 3,724	$ 9,457
Commercial Paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets	20,447	51,443
Government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets	8,034	29,646
Corporate Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets	18,550	18,396
Municipal Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets	14,461	3,389
Forward purchase or (sale) contracts | Japanese Yen
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets	108	176
Forward purchase or (sale) contracts | New Taiwan Dollars
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets	(5)	(10)
Forward purchase or (sale) contracts | Korean Won
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets	33	(46)
Forward purchase or (sale) contracts | Euro
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets	(129)	100
Forward purchase or (sale) contracts | British Pound
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets	29	38
Forward purchase or (sale) contracts | Chinese Renminbi
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets	(18)	(1)
Forward purchase or (sale) contracts | Singapore Dollar
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets	(3)	(12)
Level 1 | Money Market Instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets	3,724	9,457
Level 1 | Commercial Paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets
Level 1 | Government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets
Level 1 | Corporate Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets
Level 1 | Municipal Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets
Level 1 | Forward purchase or (sale) contracts | Japanese Yen
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets
Level 1 | Forward purchase or (sale) contracts | New Taiwan Dollars
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets
Level 1 | Forward purchase or (sale) contracts | Korean Won
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets
Level 1 | Forward purchase or (sale) contracts | Euro
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets
Level 1 | Forward purchase or (sale) contracts | British Pound
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets
Level 1 | Forward purchase or (sale) contracts | Chinese Renminbi
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets
Level 1 | Forward purchase or (sale) contracts | Singapore Dollar
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets
Level 2 | Money Market Instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets
Level 2 | Commercial Paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets	20,447	51,443
Level 2 | Government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets	8,034	29,646
Level 2 | Corporate Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets	18,550	18,396
Level 2 | Municipal Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets	14,461	3,389
Level 2 | Forward purchase or (sale) contracts | Japanese Yen
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets	108	176
Level 2 | Forward purchase or (sale) contracts | New Taiwan Dollars
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets	(5)	(10)
Level 2 | Forward purchase or (sale) contracts | Korean Won
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets	33	(46)
Level 2 | Forward purchase or (sale) contracts | Euro
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets	(129)	100
Level 2 | Forward purchase or (sale) contracts | British Pound
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets	29	38
Level 2 | Forward purchase or (sale) contracts | Chinese Renminbi
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets	(18)	(1)
Level 2 | Forward purchase or (sale) contracts | Singapore Dollar
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets	(3)	(12)
Level 3 | Money Market Instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets
Level 3 | Commercial Paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets
Level 3 | Government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets
Level 3 | Corporate Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets
Level 3 | Municipal Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets
Level 3 | Forward purchase or (sale) contracts | Japanese Yen
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets
Level 3 | Forward purchase or (sale) contracts | New Taiwan Dollars
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets
Level 3 | Forward purchase or (sale) contracts | Korean Won
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets
Level 3 | Forward purchase or (sale) contracts | Euro
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets
Level 3 | Forward purchase or (sale) contracts | British Pound
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets
Level 3 | Forward purchase or (sale) contracts | Chinese Renminbi
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets
Level 3 | Forward purchase or (sale) contracts | Singapore Dollar
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial assets

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Shareholders' Equity

9 Months Ended

Dec. 28, 2013

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Shareholders’ Equity

Share Repurchase Program

On December 9, 2011, the Board of Directors authorized a share repurchase program totaling $20.0 million to acquire shares of the Company’s outstanding common stock. The repurchases are to be made at management’s discretion in the open market or in privately negotiated transactions in compliance with applicable securities laws and other legal requirements and are subject to market conditions, share price and other factors. The Company did not repurchase any shares under this program in either the first three quarters of 2013 or 2014. There is no fixed completion date for the repurchase program.

Dividends

In December 2011, the Board of Directors adopted a dividend policy under which the Company intends to pay quarterly cash dividends. The following table summarizes the quarterly dividend declared and paid by the Company since the third quarter of 2013:

Date Declared	Record Date	Payable Date	Amount per Share
November 7, 2013	November 19, 2013	December 4, 2013	$0.08
August 8, 2013	August 19, 2013	September 3, 2013	$0.08
May 14, 2013	June 5, 2013	June 19, 2013	$0.08
February 7, 2013	February 28, 2013	March 14, 2013	$0.08
November 8, 2012	November 21, 2012	December 5, 2012	$0.08

A special dividend of $2.00 per share was declared by the Board of Directors on December 3, 2012 after the successful settlement of a patent dispute. The special dividend should not be considered a recurring event.

The Company paid aggregate dividends of $7.2 million and $65.7 million in the first three quarters of 2014 and 2013, respectively.

The Company currently anticipates that it will continue to pay cash dividends on a quarterly basis in the future, although the declaration, timing and amount of any future cash dividends are at the discretion of the Board of Directors and will depend on the Company’s financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination that cash dividends are in the best interest of the shareholders.

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Share-Based Compensation - Expense (Details) (USD $)	3 Months Ended		9 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 28, 2013	Dec. 29, 2012
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period			621,000	552,500
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross				5,000
Total share-based compensation expense	$ 1,262,000	$ 1,482,000	$ 5,130,000	$ 6,359,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition			1 year 10 months 24 days
Cost of Sales
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Total share-based compensation expense	184,000	202,000	558,000	635,000
Selling, General and Administrative Expenses
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Total share-based compensation expense	728,000	867,000	3,488,000	4,145,000
Research and Development Expense
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Total share-based compensation expense	350,000	413,000	1,084,000	1,579,000
Stock Options
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	$ 9,200,000		$ 9,200,000

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Share-Based Compensation Expense (Tables)

9 Months Ended

Dec. 28, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

Share-based compensation expense was included in the Company’s Condensed Consolidated Statements of Operations as follows:

	Fiscal quarter ended				Three fiscal quarters ended
(In thousands)	Dec 28, 2013		Dec 29, 2012		Dec 28, 2013		Dec 29, 2012
Cost of sales	$	184	$	202	$	558	$	635
Selling, service and administration	728		867		3,488		4,145
Research, development and engineering	350		413		1,084		1,579
Total share-based compensation expense	$	1,262	$	1,482	$	5,130	$	6,359

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Dec. 28, 2013	Dec. 29, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income	$ (10,701)	$ 11,035
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization	5,636	6,867
Amortization of acquired intangible assets	2,133	1,810
Share-based compensation expense	5,130	6,132
Gain on sale of property and equipment, net	1,264	1,226
Gain on acquisition of Semiconductor Systems business	(499)	0
Other than temporary impairment of cost based investments	3,588	0
Decrease (increase) in deferred income taxes	(317)	4,537
Changes in operating accounts, net of acquisitions:
Decrease (increase) in trade receivables, net	8,047	14,315
Decrease (increase) in inventories	(1,389)	(11,744)
Decrease (increase) in shipped systems pending acceptance	(172)	1,002
Decrease (increase) in other current assets	(924)	61
Increase (decrease) in accounts payable and accrued liabilities	(9,460)	(912)
Increase (decrease) in deferred revenue	(3,681)	(4,343)
Net cash (used in) provided by operating activities	(3,873)	27,534
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments	(237,113)	(857,435)
Proceeds from sales and maturities of investments	253,265	885,818
Purchase of property, plant and equipment	(5,344)	(5,127)
Proceeds from sale of property, plant, and equipment	3,617	2,020
Cash paid for business acquisitions	(9,731)	(9,466)
Minority equity investment	(5,000)	0
Decrease (increase) in other assets	(408)	403
Net cash (used in) provided by investing activities	(714)	16,213
CASH FLOWS FROM FINANCING ACTIVITIES
Cash dividends paid to shareholders	(7,158)	(65,723)
Stock plan activity, net	83	73
Excess tax benefit of share-based compensation	0	71
Net cash (used in) provided by financing activities	(7,075)	(65,579)
Effect of exchange rate changes on cash	(77)	(708)
NET CHANGE IN CASH AND CASH EQUIVALENTS	(11,739)	(22,540)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	88,913	69,780
CASH AND CASH EQUIVALENTS AT END OF PERIOD	77,174	47,240
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for income taxes	(3,072)	(1,174)
Income tax refunds received	$ 65	$ 651

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 28, 2013	Mar. 30, 2013
Statement of Financial Position [Abstract]
Trade receivables, allowances	$ 464	$ 442
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	97,056	98,734
Finite-Lived Intangible Assets, Accumulated Amortization	$ 17,524	$ 15,393
Preferred stock, without par value	$ 0	$ 0
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Common stock, without par value	$ 0	$ 0
Common stock, shares authorized	100,000,000	100,000,000
Common stock, issued	30,095,000	29,583,000
Common stock, outstanding	30,095,000	29,583,000

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Product Warranty

9 Months Ended

Dec. 28, 2013

Product Warranties Disclosures [Abstract]

Product Warranty

Product Warranty

The following is a reconciliation of the changes in the aggregate product warranty accrual:

	Fiscal quarter ended						Three fiscal quarters ended
(In thousands)	Dec 28, 2013			Dec 29, 2012			Dec 28, 2013			Dec 29, 2012
Product warranty accrual, beginning	$	5,563		$	6,096		$	5,411		$	4,187
Warranty charges incurred, net	(1,755		)	(1,603		)	(5,298		)	(5,513		)
Provision for warranty charges	815			1,297			4,510			7,116
Product warranty accrual, ending	$	4,623		$	5,790		$	4,623		$	5,790

Net warranty charges incurred include labor charges and costs of replacement parts for system repairs under warranty. These costs are recorded net of any estimated cost recoveries resulting from either successful repair of damaged parts or from warranties offered by the Company’s suppliers for defective components. The provision for warranty charges reflects the estimate of future anticipated net warranty costs to be incurred for all products under warranty at quarter end and is recorded to cost of sales.

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Document and Entity Information	9 Months Ended
	Dec. 28, 2013	Feb. 03, 2014
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 28, 2013
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Entity Registrant Name	ELECTRO SCIENTIFIC INDUSTRIES INC
Entity Central Index Key	0000726514
Current Fiscal Year End Date	--03-29
Entity Well-know Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		29,915,584

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Deferred Revenue

9 Months Ended

Dec. 28, 2013

Deferred Revenue Disclosure [Abstract]

Deferred Revenue

Deferred Revenue

Generally, revenue is recognized upon fulfillment of acceptance criteria at the Company's factory and title transfer which frequently occurs at the time of delivery to a common carrier. Revenue is deferred whenever title transfer is pending and/or acceptance criteria have not yet been fulfilled. Deferred revenue occurrences include sales to Japanese customers, shipments of substantially new products and shipments with custom specifications and acceptance criteria. In sales involving multiple element arrangements, the relative selling price of any undelivered elements, including installation services, is deferred until the elements are delivered and acceptance criteria are met. Revenue related to maintenance and service contracts is deferred and recognized ratably over the duration of the contracts.

The following is a reconciliation of the changes in deferred revenue:

	Fiscal quarter ended						Three fiscal quarters ended
(In thousands)	Dec 28, 2013			Dec 29, 2012			Dec 28, 2013			Dec 29, 2012
Deferred revenue, beginning	$	7,855		$	9,456		$	10,196		$	10,751
Revenue deferred	5,294			5,394			18,892			43,340
Revenue recognized	(6,455		)	(8,330		)	(22,394		)	(47,571		)
Deferred revenue, ending	$	6,694		$	6,520		$	6,694		$	6,520

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 28, 2013	Dec. 29, 2012
Net sales	$ 38,267	$ 37,930	$ 144,086	$ 177,051
Cost of sales	21,986	24,697	83,787	106,645
Gross profit	16,281	13,233	60,299	70,406
Operating expenses:
Selling, service and administration	12,408	11,696	41,206	42,473
Research, development and engineering	9,768	8,730	27,912	28,791
Legal settlement proceeds, net	0	(15,365)	0	(15,365)
(Gain) Loss on Sale of Property Plant Equipment	(1,301)	(1,226)	(1,301)	(1,226)
Gain on acquisition of Semiconductor Systems business	0	0	(499)	0
Net operating expenses	20,875	3,835	67,318	54,673
Operating (loss) income	(4,594)	9,398	(7,019)	15,733
Non-operating (expense) income:
Other-than-temporary impairment of cost based investments	0	0	(3,588)	0
Interest and other (expense) income, net	95	(5)	115	(64)
Other Nonoperating Income (Expense)	95	(5)	(3,473)	(64)
Income (loss) before income taxes	(4,499)	9,393	(10,492)	15,669
Provision for (benefit from) income taxes	141	2,625	209	4,634
Net (loss) income	$ (4,640)	$ 6,768	$ (10,701)	$ 11,035
Net (loss) income per share - basic	$ (0.15)	$ 0.23	$ (0.36)	$ 0.38
Net (loss) income per share - diluted	$ (0.15)	$ 0.23	$ (0.36)	$ 0.37
Weighted average number of shares - basic	30,054	29,434	29,922	29,296
Weighted average number of shares - diluted	30,054	30,043	29,922	29,954
Cash dividends paid per common share	$ 0.08	$ 2.08	$ 0.24	$ 2.24

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Business Acquisitions

9 Months Ended

Dec. 28, 2013

Business Combinations [Abstract]

Business Acquisitions

Business Acquisitions

Fiscal 2014

On May 3, 2013, the Company completed the purchase of assets related to the Semiconductor Systems business of GSI Group Inc. for $8.0 million, subject to certain closing working capital adjustments. As of June 29, 2013 the working capital adjustments had not been finalized but were estimated and accrued at $1.6 million. On September 20, 2013, the Company finalized the closing working capital adjustment and paid $1.7 million of cash for a total purchase price of $9.7 million.

The acquisition provides the Company with direct access to industry-leading wafer marking, wafer trimming and circuit trimming laser systems. The purchase price was allocated to the underlying assets acquired and liabilities assumed based on their fair values and resulted in a net gain on bargain purchase of $0.5 million. The fair value of the acquired net assets of $10.5 million was in excess of the total purchase consideration of $9.7 million, primarily due to the recognition of certain intangible assets. The resulting gain of $0.8 million was partially offset by $0.3 million of deferred tax liabilities. Analysis supporting the purchase price allocation included a valuation of assets and liabilities as of the closing date, an analysis of intangible assets and a detailed review of the opening balance sheet to determine other significant adjustments required to recognize assets and liabilities at fair value. The acquisition was an asset purchase for tax purposes.

As a result of the acquisition, the Company recorded approximately $8.2 million of inventory, $3.9 million of accounts receivable and other current assets, $0.7 million of identifiable intangible assets, $2.3 million of current liabilities, and a gain on bargain purchase of $0.8 million. The $0.7 million of identifiable intangible assets includes approximately $0.5 million of backlog and $0.2 million of developed technology. The acquired intangibles will be amortized over their estimated useful lives which range from one to three years.

In the first three quarters of 2014, the Company also incurred approximately $1.3 million in acquisition related costs which are included in Selling, service and administration expenses in the Condensed Consolidated Statements of Operations.

The operating results of this purchase are included in the Company’s results of operations since the date of acquisition. Pro forma financial information has not been provided for the purchase as it was not material to the Company’s overall financial position.

Fiscal 2013

On June 14, 2012, the Company acquired Eolite Systems (Eolite), a designer and manufacturer of unique fiber lasers, for $9.7 million in cash for all its outstanding shares. The purchase price of $9.5 million, net of cash acquired, was allocated to the underlying assets acquired and liabilities assumed based on their fair values. Analyses supporting the purchase price allocation included a valuation of assets and liabilities as of the closing date, an analysis of intangible assets and a detailed review of the opening balance sheet to determine other significant adjustments required to recognize assets and liabilities at fair value.

The acquisition provides the Company with direct access to differentiated, higher power laser technology which can be used in a broad set of microfabrication applications. The Company has allocated $3.9 million of the purchase price to goodwill. The premium paid over the fair value of the individual assets acquired and liabilities assumed reflects the Company’s view that this acquisition will increase the Company’s ability to customize lasers to specific customer applications with differentiated capability. None of the goodwill is deductible for tax purposes.

As a result of the acquisition, the Company recorded $5.5 million of identifiable intangible assets including approximately $5.0 million of developed technology, $0.4 million in customer relationships, and $0.1 million in trademarks and backlog. The acquired intangibles will be amortized over their estimated useful lives which range from one to nine years.

In the first three quarters of 2013, the Company also incurred approximately $0.9 million in acquisition-related costs which are included in Selling, service and administration expenses in the Condensed Consolidated Statements of Operations.

The operating results of this acquisition are included in the Company’s results of operations since the date of acquisition. Pro forma financial information has not been provided for the acquisition of Eolite as it was not material to the Company’s overall financial position.

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Share-Based Compensation

9 Months Ended

Dec. 28, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

Share-Based Compensation

The Company recognizes expense related to the fair value of its share-based compensation awards using the Black-Scholes model to estimate the fair value of awards on the date of grant, except for unvested restricted stock unit awards which are valued at the fair value of the Company's stock on the date of award. The Company recognizes compensation expense for all share-based compensation awards on a straight-line basis over the requisite service period of the award.

Stock-settled stock appreciation rights (SARs) grant the right to receive shares of the Company's stock equivalent to the increase in stock value of a specified number of shares over a specified period of time, divided by the stock price at the time of exercise. The Company uses the Black-Scholes model to estimate the fair value of SARs. Similar to options, SARs are recorded at the fair value of the award at grant date and the expense is recognized on a straight-line basis over the requisite service period of the award.

The Company granted a total of 621,000 restricted stock unit awards during the first three quarters of 2014, but did not grant any stock options or SARs. The Company granted 552,500 restricted stock unit awards and 5,000 stock options during the first three quarters of 2013, but did not grant any SARs.

Share-based compensation expense was included in the Company’s Condensed Consolidated Statements of Operations as follows:

	Fiscal quarter ended				Three fiscal quarters ended
(In thousands)	Dec 28, 2013		Dec 29, 2012		Dec 28, 2013		Dec 29, 2012
Cost of sales	$	184	$	202	$	558	$	635
Selling, service and administration	728		867		3,488		4,145
Research, development and engineering	350		413		1,084		1,579
Total share-based compensation expense	$	1,262	$	1,482	$	5,130	$	6,359

No share-based compensation costs were capitalized in the first three quarters of 2014. As of December 28, 2013, the Company had $9.2 million of total unrecognized share-based compensation costs, net of estimated forfeitures, which are expected to be recognized over a weighted average period of 1.9 years.

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Fair Value Measurements (Tables)

9 Months Ended

Dec. 28, 2013

Fair Value Disclosures [Abstract]

Fair Value Hierarchy for Financial Assets Measured at Fair Value on Recurring Basis

The Company’s fair value hierarchy for its financial assets measured at fair value on a recurring basis as of December 28, 2013 and March 30, 2013 was as follows (in thousands):

December 28, 2013	Level 1		Level 2			Level 3		Total
Money market securities	$	3,724	$	—		$	—	$	3,724
Commercial paper	—		20,447			—		20,447
Corporate Bonds	—		18,550			—		18,550
Municipal bonds	—		14,461			—		14,461
Government agencies	—		8,034			—		8,034
Forward purchase or (sale) contracts:
Japanese Yen	—		108			—		108
New Taiwan Dollar	—		(5		)	—		(5		)
Korean Won	—		33			—		33
Euro	—		(129		)	—		(129		)
British Pound	—		29			—		29
Chinese Renminbi	—		(18		)	—		(18		)
Singapore Dollar	—		(3		)	—		(3		)

March 30, 2013	Level 1		Level 2			Level 3		Total
Money market securities	$	9,457	$	—		$	—	$	9,457
Commercial paper	—		51,443			—		51,443
Government agencies	—		29,646			—		29,646
Corporate bonds	—		18,396			—		18,396
Municipal bonds	—		3,389			—		3,389
Forward purchase or (sale) contracts:
Japanese Yen	—		176			—		176
New Taiwan Dollar	—		(10		)	—		(10		)
Korean Won	—		(46		)	—		(46		)
Euro	—		100			—		100
British Pound	—		38			—		38
Chinese Renminbi	—		(1		)	—		(1		)
Singapore Dollar	—		(12		)	—		(12		)

Investments

Certain information regarding the Company’s investments at December 28, 2013 and March 30, 2013 was as follows (in thousands):

			Unrealized
December 28, 2013	Cost		Gain		Loss			Fair Value
Available-for-sale securities (current):
Commercial paper	$	20,447	$	—	$	—		$	20,447
Corporate Bonds	18,549		1		—			18,550
Municipal Bonds	10,428		7		—			10,435
Government agencies	6,035		1		—			6,036
	$	55,459	$	9	$	—		$	55,468
Available-for-sale securities (non-current):
Municipal Bonds	$	4,019	$	7	$	—		$	4,026
Government agencies	1,998		—		—			1,998
	$	6,017	$	7	$	—		$	6,024
			Unrealized
March 30, 2013	Cost		Gain		Loss			Fair Value
Available-for-sale securities (current):
Commercial paper	$	51,443	$	—	$	—		$	51,443
Government agencies	26,556		8		—			26,564
Corporate Bonds	10,473		7		—			10,480
Municipal Bonds	2,058		—		—			2,058
	$	90,530	$	15	$	—		$	90,545
Available-for-sale securities (non-current):
Corporate Bonds	$	7,923	$	—	$	(7	)	$	7,916
Government agencies	3,082		—		—			3,082
Municipal Bonds	1,330		1		—			1,331
	$	12,335	$	1	$	(7	)	$	12,329

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(Loss) Earnings Per Share

9 Months Ended

Dec. 28, 2013

Earnings Per Share [Abstract]

(Loss) Earnings Per Share

Earnings (Loss) Per Share

The following is a reconciliation of weighted average shares outstanding used in the calculation of basic and diluted earnings per share:

	Fiscal quarter ended					Three fiscal quarters ended
(In thousands, except per share data)	Dec 28, 2013			Dec 29, 2012		Dec 28, 2013			Dec 29, 2012
Net (loss) income	$	(4,640	)	$	6,768	$	(10,701	)	$	11,035
Weighted average shares used for basic earnings per share	30,054			29,434		29,922			29,296
Incremental diluted shares	—			609		—			658
Weighted average shares used for diluted earnings per share	30,054			30,043		29,922			29,954
Net (loss) income per share:
Net (loss) income — basic	$	(0.15	)	$	0.23	$	(0.36	)	$	0.38
Net (loss) income — diluted	$	(0.15	)	$	0.23	$	(0.36	)	$	0.37

Awards of options, stock appreciation rights (SARs) and unvested restricted stock units (RSUs) representing an additional 3.8 million and 2.5 million shares of stock for the third quarter of 2014 and 2013, respectively, were not included in the calculation of diluted net earnings per share because their effect would have been antidilutive.

For the three quarters endedDecember 28, 2013 and December 29, 2012, awards of options, SARs, and unvested RSUs representing an additional 4.0 million and 2.3 million shares, respectively, were not included in the calculation of diluted net earnings per share because their effect would have been antidilutive.

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Other Assets

9 Months Ended

Dec. 28, 2013

Other Assets, Noncurrent Disclosure [Abstract]

Other Assets

Other Assets

Other assets consisted of the following:

(In thousands)	Dec 28, 2013		Mar 30, 2013
Minority equity investment	$	10,378	$	8,966
Consignment and demo equipment, net	6,830		4,263
Long term deposits and other	1,991		1,523
	$	19,199	$	14,752

Minority equity investment represents the Company's investment in OmniGuide, Inc. During the second quarter of 2014, the Company invested $5 million in Series F Preferred Stock of OmniGuide, Inc. As of December 28, 2013, the Company had $6.0 million invested in Series D Preferred Stock, $3.0 million invested in Series E Preferred Stock, and $5.0 million invested in Series F Preferred Stock of OmniGuide, Inc., representing a 15% interest. At each reporting period end, the Company determines whether events or circumstances have occurred that are likely to have a significant adverse effect on the fair value of these investments. If there are no events or circumstances identified that would adversely affect the fair value of the investments, the fair values of the investments are not calculated. In the second quarter of 2014, OmniGuide, Inc. engaged in a Series F Preferred Stock round of equity financing at pricing below previous rounds which was considered a triggering event. As a result, the Company performed a valuation of the investment which resulted in a $3.6 million impairment charge of our Series D and Series E investments.

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Inventories

9 Months Ended

Dec. 28, 2013

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories are principally valued at standard costs, which approximate the lower of cost (first-in, first-out) or market. Components of inventories were as follows:

(In thousands)	Dec 28, 2013		Mar 30, 2013
Raw materials and purchased parts	$	49,298	$	44,332
Work-in-process	13,353		8,985
Finished goods	5,975		9,750
	$	68,626	$	63,067

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Other Current Assets

9 Months Ended

Dec. 28, 2013

Disclosure Other Current Assets [Abstract]

Other Current Assets

Other Current Assets

Other current assets consisted of the following:

(In thousands)	Dec 28, 2013		Mar 30, 2013
Prepaid expenses	$	2,931	$	2,240
Value added tax receivable	672		763
Other	1,193		895
	$	4,796	$	3,898

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Accrued Liabilities

9 Months Ended

Dec. 28, 2013

Disclosure Accrued Liabilities [Abstract]

Accrued Liabilities

Accrued Liabilities

Accrued liabilities consisted of the following:

(In thousands)	Dec 28, 2013		Mar 30, 2013
Payroll-related liabilities	$	7,805	$	7,918
Product warranty accrual	4,623		5,411
Professional fees payable	1,762		1,322
Pension benefit liabilities	1,667		1,501
Purchase order commitments and receipts	1,257		2,533
Customer deposits	685		225
Freight accrual	536		646
Income taxes payable	429		2,884
Restructuring costs payable	327		485
Value added taxes payable	272		258
Other	1,581		1,747
	$	20,944	$	24,930

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Shareholders' Equity (Tables)

9 Months Ended

Dec. 28, 2013

Stockholders' Equity Note [Abstract]

Dividend Declared and Paid

In December 2011, the Board of Directors adopted a dividend policy under which the Company intends to pay quarterly cash dividends. The following table summarizes the quarterly dividend declared and paid by the Company since the third quarter of 2013:

Date Declared	Record Date	Payable Date	Amount per Share
November 7, 2013	November 19, 2013	December 4, 2013	$0.08
August 8, 2013	August 19, 2013	September 3, 2013	$0.08
May 14, 2013	June 5, 2013	June 19, 2013	$0.08
February 7, 2013	February 28, 2013	March 14, 2013	$0.08
November 8, 2012	November 21, 2012	December 5, 2012	$0.08

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Shareholders' Equity - Additional Information (Details) (USD $)	9 Months Ended		0 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 09, 2011 2011 Share Repurchase Program
Equity, Class of Treasury Stock [Line Items]
Payments of Dividends	$ 7,158,000	$ 65,723,000
Share repurchase authorization amount			$ 20,000,000

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Restructuring and Cost Management Plans

9 Months Ended

Dec. 28, 2013

Restructuring and Related Activities [Abstract]

Restructuring and Cost Management Plans

Restructuring and Cost Management Plans

In 2013, the Company initiated a restructuring plan to improve efficiency, transition from memory repair and other legacy products, and focus on laser microfabrication for consumer electronics, emerging technologies related to semiconductor 3D packaging, and proprietary laser technology. The planned completion date for remaining actions to be taken under this plan is April 30, 2014. See the Company's Form 10-K for the year ended March 30, 2013 for additional information related to restructuring and cost management plans.

In the first three quarters of 2014, net restructuring credits of $31 thousand were recognized due to changes in estimates. At December 28, 2013 and March 30, 2013, the amount of unpaid restructuring costs included in accrued liabilities was $0.3 million and $0.5 million, respectively.

The following table presents the amounts related to restructuring costs payable (in thousands):

Restructuring costs payable balance as of March 30, 2013	$	485
Employee severance and related benefits:
Cash payments	(153		)
Other adjustments	(5		)
Restructuring costs payable balance as of December 28, 2013	$	327

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Other Current Assets (Tables)

9 Months Ended

Dec. 28, 2013

Disclosure Other Current Assets [Abstract]

Other Current Assets

Other current assets consisted of the following:

(In thousands)	Dec 28, 2013		Mar 30, 2013
Prepaid expenses	$	2,931	$	2,240
Value added tax receivable	672		763
Other	1,193		895
	$	4,796	$	3,898

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Product and Geographic Information - Net Sales by Geographic Area (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 28, 2013	Dec. 29, 2012
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	$ 38,267	$ 37,930	$ 144,086	$ 177,051
Asia
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	29,087		117,361	154,962
Americas
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	4,761	6,990	15,470	15,696
Europe
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	$ 4,419	$ 2,012	$ 11,255	$ 6,393

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Other Assets (Details) (USD $) In Thousands, unless otherwise specified	Dec. 28, 2013	Mar. 30, 2013
Other Assets, Noncurrent Disclosure [Abstract]
Minority equity investment	$ 10,378	$ 8,966
Consignment and demo equipment, net	6,830	4,263
Other	1,991	1,523
Other assets	$ 19,199	$ 14,752

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Statement (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 28, 2013	Dec. 29, 2012
Net (loss) income	$ (4,640)	$ 6,768	$ (10,701)	$ 11,035
Foreign currency translation adjustment, net of taxes	(153)	(239)	39	37
Accumulated other comprehensive loss related to benefit plan obligations, net of taxes	3	3	9	8
Net unrealized (loss) gain on available-for-sale securities, net of taxes	(3)	(15)	5	(9)
Comprehensive (loss) income	$ (4,793)	$ 6,517	$ (10,648)	$ 11,071

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Fair Value Measurements

9 Months Ended

Dec. 28, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Financial Assets Measured at Fair Value

ASC Topic 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include the following:

• Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities;

• Level 2, defined as inputs that are observable either directly or indirectly such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and other inputs that can be corroborated by observable market data; and

• Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The Company’s fair value hierarchy for its financial assets measured at fair value on a recurring basis as of December 28, 2013 and March 30, 2013 was as follows (in thousands):

December 28, 2013	Level 1		Level 2			Level 3		Total
Money market securities	$	3,724	$	—		$	—	$	3,724
Commercial paper	—		20,447			—		20,447
Corporate Bonds	—		18,550			—		18,550
Municipal bonds	—		14,461			—		14,461
Government agencies	—		8,034			—		8,034
Forward purchase or (sale) contracts:
Japanese Yen	—		108			—		108
New Taiwan Dollar	—		(5		)	—		(5		)
Korean Won	—		33			—		33
Euro	—		(129		)	—		(129		)
British Pound	—		29			—		29
Chinese Renminbi	—		(18		)	—		(18		)
Singapore Dollar	—		(3		)	—		(3		)

March 30, 2013	Level 1		Level 2			Level 3		Total
Money market securities	$	9,457	$	—		$	—	$	9,457
Commercial paper	—		51,443			—		51,443
Government agencies	—		29,646			—		29,646
Corporate bonds	—		18,396			—		18,396
Municipal bonds	—		3,389			—		3,389
Forward purchase or (sale) contracts:
Japanese Yen	—		176			—		176
New Taiwan Dollar	—		(10		)	—		(10		)
Korean Won	—		(46		)	—		(46		)
Euro	—		100			—		100
British Pound	—		38			—		38
Chinese Renminbi	—		(1		)	—		(1		)
Singapore Dollar	—		(12		)	—		(12		)

For Level 1 assets, the Company utilized quoted prices in active markets for identical assets.

For Level 2 assets, exclusive of forward contracts, the Company utilized quoted prices in active markets for similar assets. For forward contracts, spot prices at December 28, 2013 and March 30, 2013 were utilized to calculate fair values.

During the first three quarters of 2014, there were no transfers between Level 1 and Level 2 assets.

Investments

Certain information regarding the Company’s investments at December 28, 2013 and March 30, 2013 was as follows (in thousands):

			Unrealized
December 28, 2013	Cost		Gain		Loss			Fair Value
Available-for-sale securities (current):
Commercial paper	$	20,447	$	—	$	—		$	20,447
Corporate Bonds	18,549		1		—			18,550
Municipal Bonds	10,428		7		—			10,435
Government agencies	6,035		1		—			6,036
	$	55,459	$	9	$	—		$	55,468
Available-for-sale securities (non-current):
Municipal Bonds	$	4,019	$	7	$	—		$	4,026
Government agencies	1,998		—		—			1,998
	$	6,017	$	7	$	—		$	6,024
			Unrealized
March 30, 2013	Cost		Gain		Loss			Fair Value
Available-for-sale securities (current):
Commercial paper	$	51,443	$	—	$	—		$	51,443
Government agencies	26,556		8		—			26,564
Corporate Bonds	10,473		7		—			10,480
Municipal Bonds	2,058		—		—			2,058
	$	90,530	$	15	$	—		$	90,545
Available-for-sale securities (non-current):
Corporate Bonds	$	7,923	$	—	$	(7	)	$	7,916
Government agencies	3,082		—		—			3,082
Municipal Bonds	1,330		1		—			1,331
	$	12,335	$	1	$	(7	)	$	12,329

For purposes of determining gross realized gains and losses and reclassification out of accumulated other comprehensive (loss) income, the cost of securities sold is based on specific identification. Net unrealized holding gains and losses on current available-for-sale securities included in accumulated other comprehensive (loss) income were insignificant as of December 28, 2013 and March 30, 2013.

Underlying maturities of investments at December 28, 2013 were $55.5 million within one year and $6.0 million between one to five years.

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Other Assets (Tables)

9 Months Ended

Dec. 28, 2013

Other Assets, Noncurrent Disclosure [Abstract]

Other Assets

Other assets consisted of the following:

(In thousands)	Dec 28, 2013		Mar 30, 2013
Minority equity investment	$	10,378	$	8,966
Consignment and demo equipment, net	6,830		4,263
Long term deposits and other	1,991		1,523
	$	19,199	$	14,752

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Business Acquisitions - Allocation of Purchase Price of Assets Acquired and Liabilities Assumed Based on the Fair Value (Details) (USD $)	3 Months Ended		9 Months Ended			0 Months Ended		3 Months Ended	0 Months Ended						0 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 28, 2013	Dec. 29, 2012	Mar. 30, 2013	Sep. 20, 2013 Semiconductor Systems business [Member]	May 03, 2013 Semiconductor Systems business [Member]	Dec. 28, 2013 Semiconductor Systems Business [Member] [Member]	Jun. 14, 2012 Eolite Systems	May 03, 2013 Order or Production Backlog [Member] Semiconductor Systems business [Member]	May 03, 2013 Developed technology Semiconductor Systems business [Member]	Jun. 14, 2012 Developed technology Eolite Systems	Jun. 14, 2012 Customer Relationships [Member] Eolite Systems	Jun. 14, 2012 Trademarks and backlog Eolite Systems	May 03, 2013 Minimum Semiconductor Systems business [Member]	Jun. 14, 2012 Minimum Eolite Systems	May 03, 2013 Maximum Semiconductor Systems business [Member]	Jun. 14, 2012 Maximum Eolite Systems
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net							$ 10,500,000
Payments to Acquire Businesses, Gross						9,700,000	8,000,000		9,700,000
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net									9,500,000
Acquired intangibles							700,000		5,500,000	500,000	200,000	5,000,000	400,000	100,000
Business Acquisition, Purchase Price Allocation, Current Liabilities							(2,300,000)
Estimated useful life of intangible assets															1 year	1 year	3 years	9 years
Goodwill	7,889,000		7,889,000		7,889,000				3,900,000
Gain on acquisition of Semiconductor Systems business	0	0	499,000	0
Business Combination, Bargain Purchase, Total Gain								(800,000)
Business Combination, Bargain Purchase, Tax								300,000
Business Acquisition, Purchase Price Allocation, Current Assets, Inventory							8,200,000
Business Acquisition, Purchase Price Allocation, Current Assets, Receivables							3,900,000
Cash paid for business acquisitions			(9,731,000)	(9,466,000)
Business Combination, Acquisition Related Costs							(1,300,000)		900,000
Business Acquisition, Contingent Consideration, Potential Cash Payment						$ 1,700,000	$ 1,600,000

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Product and Geographic Information

9 Months Ended

Dec. 28, 2013

Segment Reporting [Abstract]

Product and Geographic Information

Product and Geographic Information

Net sales by product type were as follows:

	Fiscal quarter ended				Three fiscal quarters ended
(In thousands)	Dec 28, 2013		Dec 29, 2012		Dec 28, 2013		Dec 29, 2012
Interconnect & Microfabrication Group (IMG)	$	25,378	$	30,537	$	98,096	$	147,506
Semiconductor Group (SG)	8,535		3,322		25,083		9,938
Components Group (CG)	4,354		4,071		20,907		19,607
	$	38,267	$	37,930	$	144,086	$	177,051

Net sales by geographic area, based on the location of the end user, were as follows:

	Fiscal quarter ended				Three fiscal quarters ended
(In thousands)	Dec 28, 2013		Dec 29, 2012		Dec 28, 2013		Dec 29, 2012
Asia	$	29,087	$	28,928	$	117,361	$	154,962
Americas	4,761		6,990		15,470		15,696
Europe	4,419		2,012		11,255		6,393
	$	38,267	$	37,930	$	144,086	$	177,051