DEBT

9 Months Ended

Jul. 31, 2022

DEBT [Abstract]

DEBT

NOTE 5 - DEBT

The tables below provide information on our long-term debt.

As of July 31, 2022	Xiamen Project Loans			Xiamen Working Capital Loans			Hefei Equipment Loan		Finance Leases			Total
Principal due:
Next 12 months	$	-		$	3,798		$	-	$	6,929		$	10,727
Months 13 – 24	$	3,812		$	-		$	-	$	6,585		$	10,397
Months 25 – 36		9,390			-			-		19,622			29,012
Months 37 – 48		7,180			-			-		-			7,180
Long-term debt	$	20,382		$	-		$	-	$	26,207		$	46,589
Total debt	$	20,382		$	3,798		$	-	$	33,136		$	57,316
Interest rate at balance sheet date		4.60	%		4.46	%		N/A			(3)
Basis spread on interest rates		0.00			76.00			N/A		N/A
Interest rate reset	Quarterly			Monthly/Annually			N/A			N/A
Maturity date	December 2025			July 2023			Paid July 2022				(3)
Periodic payment amount	Varies as loans mature(1)(2)			Increases as loans mature			N/A				(3)
Periodic payment frequency	Semiannual, on individual loans			Semiannual, on individual loans			N/A		Monthly
Loan collateral (carrying amount)	$	79,200			N/A			N/A	$	38,694	(4)

⁽¹⁾ During the three-month period ended July 31, 2022, we repaid 26.0 million RMB (approximately $3.9 million) that was due to be paid in December 2023, and 3.0 million RMB (approximately $0.4 million) that was due to be paid in June 2024.

⁽²⁾ In September 2022, we repaid the entire $3.8 million shown in the table above as due to be paid in months 13-24, and we repaid approximately $2.3 million of the amount shown in the table above as due to be paid in months 25-36.

⁽³⁾ See Note 7 for periodic payment amounts.

⁽⁴⁾ Represents the carrying amount at the balance sheet date of the related ROU assets, in which the lessors have secured interests.

As of October 31, 2021	Xiamen Project Loans			Xiamen Working Capital Loans			Hefei Equipment Loan			Finance Leases			Total
Principal due:
Next 12 months	$	2,068		$	8,197		$	4,694		$	7,289		$	22,248
Months 13 – 24	$	10,071		$	4,005		$	4,693		$	6,512		$	25,281
Months 25 – 36		10,278			-			6,257			6,610			23,145
Months 37 – 48		9,902			-			5,585			17,961			33,448
Months 49 – 60		7,572			-			-			-			7,572
Long-term debt	$	37,823		$	4,005		$	16,535		$	31,083		$	89,446
Total	$	39,891		$	12,202		$	21,229		$	38,372		$	111,694
Interest rate at balance sheet date		4.65	%		4.53% - 4.61	%		4.20	%			(2)
Basis spread on interest rates		0.00			67.75 - 76.00			(45.00	)		N/A
Interest rate reset		Quarterly			Monthly/Annually			Annually			N/A
Maturity date	December 2025			July 2023			September 2025					(2)
Periodic payment amount	Varies as loans mature			Increases as loans mature			Varies(1)					(2)
Periodic payment frequency	Semiannual, on individual loans			Semiannual, on individual loans			Semiannual(1)			Monthly
Loan collateral (carrying amount)	$	90,096			N/A		$	86,487		$	40,826	(3)

⁽¹⁾ First five semiannual loan repayments were each to be for 7.5 percent of the approved 200 million RMB loan principal; last five installments were each to be for 12.5 percent of the approved loan principal. We repaid our entire outstanding balance on this loan in July 2022, and did not extend our credit agreement with the lender. The collateral associated with this loan has been released.

⁽²⁾ See Note 7 for interest rates on lease liabilities, maturity dates, and periodic payment amounts.

⁽³⁾ Represents the carrying amount at the balance sheet date of the related ROU assets, in which the lessors have secured interests.

Xiamen Project Loans

In November 2018, PDMCX obtained approval to borrow 345.0 million RMB from the Industrial and Commercial Bank of China. From November 2018 through July 2020, PDMCX entered into separate loan agreements (the “Project Loans”) for the entire approved amount and, as of July 31, 2022, 137.4 million RMB ($20.4 million) remained outstanding. The Project Loans were used to finance certain capital expenditures at the PDMCX facility and are collateralized by liens granted on the land use right, building, and certain equipment located at the facility. The interest rates on the Project Loans are variable (based on the RMB Loan Prime Rate of the National Interbank Funding Center), and interest incurred on the loans was eligible for reimbursement through incentives provided by the Xiamen Torch Hi-Tech Industrial Development Zone, which provide for such reimbursements up to a prescribed limit and duration. The Project Loans are subject to covenants and provisions, certain of which relate to the assets pledged as security for the loans, all of which we were in compliance with at July 31, 2022.

Xiamen Working Capital Loans

In November 2018, PDMCX obtained approval for revolving, unsecured credit of the equivalent of $25.0 million, pursuant to which PDMCX may enter into separate loan agreements with varying terms to maturity. This facility is subject to annual reviews and extensions, with the most recent extension set to expire in October 2022. As of July 31, 2022, PDMCX had 25.6 million RMB ($3.8 million) outstanding against the approval. The interest rates are variable, based on the RMB Loan Prime Rate of the National Interbank Funding Center. Interest incurred on the loans is eligible for reimbursement through incentives provided by the Xiamen Torch Hi-Tech Industrial Development Zone, which provided for such reimbursements up to a prescribed limit and duration.

Hefei Equipment Loan

In October 2020, our Hefei, China, facility was approved to borrow 200 million RMB from the China Construction Bank Corporation. In July 2022, we repaid our entire outstanding balance of 120.7 million RMB ($18.0 million). This credit facility was subject to annual reviews and extension, the most recent of which expired in August 2022; we did not apply for an extension. The loan proceeds were used to fund purchases of two lithography tools at the Hefei facility. The interest rate on the loan was variable and based on the RMB Loan Prime Rate of the National Interbank Funding Center. The borrowings were secured by the Hefei facility, its related land use right, and certain manufacturing equipment. The Hefei Equipment Loan was subject to covenants and provisions, certain of which related to the assets pledged as security for the loan, including covenants for the ratio of total liabilities to total assets and the ratio of current assets to current liabilities, all of which we were in compliance with at the time of repayment.

Finance Leases

In February 2021, we entered into a five-year $7.2 million finance lease for a high-end inspection tool and, in December 2020, we entered into a $35.5 million lease for a high-end lithography tool. See Note 7 for additional information on these leases.

Corporate Credit Agreement

In September 2018, we entered into a five-year amended and restated credit agreement (the “Credit Agreement”), which has a $50 million borrowing limit, with an expansion capacity to $100 million. The Credit Agreement is secured by substantially all of our assets located in the United States and common stock we own in certain subsidiaries. The Credit Agreement includes covenants around minimum interest coverage ratio, total leverage ratio, and minimum unrestricted cash balance (all of which we were in compliance with at July 31, 2022), and limits the amount of cash dividends, distributions, and redemptions we can pay on our common stock to an aggregate annual amount of $50 million. We had no outstanding borrowings against the Credit Agreement at July 31, 2022. The interest rate on the Credit Agreement (3.36% at July 31, 2022) is based on our total leverage ratio at one-month LIBOR plus a spread, as defined in the Credit Agreement.