What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-08-19 compared with 2024-08-20 · 62 added, 75 removed, 361 unchanged (28% of the section changed)

7 unchanged sentences

• our expectation that the portion of our future revenues attributable to customers in regions outside of North America will increase compared with the portion of those revenues for fiscal year 2025;

• our expectation that we will incur incremental costs of revenue as a result of our planned expansion of our business into new geographic markets;

• our expectation that our fiscal year 2026 selling, general and administrative (“SG&A”) expenses will increase compared to our fiscal year 2025 SG&A expenses;

• our expectation that our employee costs will increase in Thailand and the People’s Republic of China (“PRC”);

• our future capital expenditures and our needs for additional financing;

• the expansion of our manufacturing capacity, including into new geographies;

• our expectation that our employee costs will increase in Thailand and the PRC;

• our future capital expenditures, including the expansion of our manufacturing capacity;

• the growth rates of our existing markets and potential new markets;

21 unchanged sentences

Because we depend upon a small number of customers for a significant percentage of our total revenues, a reduction in orders from, a loss of, or any other adverse actions by, any one of these customers would reduce our revenues and could have a material adverse effect on our business, operating results and share price.

Moreover, our customer concentration increases the concentration of our accounts receivable and payment default by any of our key customers will negatively impact our exposure.

Many of our existing and potential customers have substantial debt burdens, have experienced financial distress or have static or declining revenues, all of which may be exacerbated by the continued uncertainty in the global economies.

Moreover, our customer concentration increases the concentration of our accounts receivable and our exposure to payment default by any of our key customers.

Many of our existing and potential customers have substantial debt burdens, have experienced financial distress or have static or declining revenues.

Certain customers have gone out of business or have been acquired or announced their withdrawal from segments of the optics market.

6 unchanged sentences

If we are unable to maintain our relationships with our existing significant customers, our business, financial condition and operating results could be harmed.

We expect that disruptions in our supply chain and fluctuations in the availability of parts and materials will continue to have an adverse impact on our ability to generate revenue, despite strong demand from our customers.

Furthermore, in some cases, our efforts to identify and secure alternative supply chain sources have resulted in our customers or their end customers requiring requalification and validation of components, a process that can often be lengthy and has negatively impacted the timing of our revenue.

In addition, we expect the near-term inventory correction that our optical communications customers are experiencing to persist, which will have an adverse impact on our ability to generate revenue.

Revenues by Geography

3 unchanged sentences

The substantial majority of our revenues are derived from our manufacturing facilities in Asia-Pacific.

The percentage of our revenues generated from a bill-to location outside of North America increased from 52.0% in fiscal year 2023 to 63.5% in fiscal year 2024, primarily because of an increase in revenue from a customer in Israel and a decrease in sales to our customers in North America.

Based on the short- and medium-term indications and forecasts from our

customers, we expect that the portion of our future revenues attributable to customers in regions outside of North America will increase as compared with the portion of revenues attributable to such customers during fiscal year 2024.

The percentage of our revenues generated from a bill-to location outside of North America decreased from 63.5% in fiscal year 2024 to 56.6% in fiscal year 2025, primarily because of an increase in revenue from sales to our customers in North America.

Based on the short- and medium-term indications and forecasts from our customers, we expect that the portion of our future revenues attributable to customers in regions outside of North America will increase as compared with the portion of revenues attributable to such customers during fiscal year 2025.

The following table presents percentages of total revenues by geographic regions:

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Once materials are designated as either excess or obsolete inventory, our customers are typically required to purchase such inventory from us even if they have chosen to cancel production of the related products.

The excess or obsolete inventory is shipped to the customer and revenue is recognized upon shipment.

The excess or obsolete inventory is shipped to the customer and recognized as an offset against cost of revenue upon shipment.

Cost of Revenues

9 unchanged sentences

Historically, our employee costs have increased primarily due to increases in the number of employees necessary to support our growth and, to a lesser extent, costs to recruit, train and retain employees.

Our cost of revenues is significantly impacted by salary levels in Thailand, the PRC and the United Kingdom, the fluctuation of the Thai baht, RMB and GBP against our functional currency, the U.S.

Our cost of revenues is significantly impacted by salary levels in Thailand and the PRC, the fluctuation of the Thai baht and RMB against our functional currency, the U.S.

dollar, and our ability to retain our employees.

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Our depreciation costs include buildings and fixed assets, primarily at our Pinehurst and Chonburi campuses in Thailand, and capital equipment located at each of our manufacturing locations.

We expect to incur incremental costs of revenue as a result of our planned expansion into new geographic markets, though we are not able to determine the amount of these incremental expenses.

During fiscal years 2025, 2024 and 2023, discretionary merit-based bonus awards were made to our non-executive employees.

1 unchanged sentence

Share-based compensation expense included in cost of revenues was $10.5 million, $7.2 million and $6.7 million for fiscal years 2025, 2024 and 2023, respectively.

We expect to incur incremental costs of revenue as a result of our planned expansion into new geographic markets, though we are not able to determine the amount of these incremental expenses.

Selling, General and Administrative Expenses

Our SG&A expenses primarily consist of corporate employee costs for sales and marketing, general and administrative and other support personnel, including research and development expenses related to the design of customized optics and glass, travel expenses, legal and other professional fees, share-based compensation expense and other general expenses not related to cost of revenues.

In fiscal year 2025, we expect our SG&A expenses will increase compared with our fiscal year 2024 SG&A expenses, mainly due to increase in compensation related expenses and investment in information technology hardware.

In fiscal year 2026, we expect our SG&A expenses will increase compared with our fiscal year 2025 SG&A expenses, mainly due to increased investment in information technology hardware and increased compensation-related expenses.

The compensation committee of our board of directors approved a fiscal year 2025 executive incentive plan with quantitative objectives based solely on achieving certain revenue targets and non-U.S.

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However, conversion of RMB for capital account items, such as direct investments, loans, security investments and repatriation of investments, is still subject to the approval of SAFE.

Under the Administration Rules, foreign-invested enterprises may only buy, sell, or remit foreign currencies at banks authorized to conduct foreign exchange business after providing valid commercial documents and relevant supporting documents and, in the case of capital account item transactions, obtaining approval from SAFE.

Capital investments by foreign-

invested enterprises outside of the PRC are also subject to limitations, which include approvals by the Ministry of Commerce, SAFE and the State Development and Reform Commission.

documents and, in the case of capital account item transactions, obtaining approval from SAFE.

Capital investments by foreign-invested enterprises outside of the PRC are also subject to limitations, which include approvals by the Ministry of Commerce, SAFE and the State Development and Reform Commission.

Circular 142 regulates the conversion by a foreign-invested company of foreign currency into RMB by restricting how the converted RMB may be used.

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Similar preferential tax treatment was available to us through June 2020 with respect to products manufactured at our Pinehurst campus Building 6.

After June 2020, 50% of our income generated from products manufactured at our Pinehurst campus will be exempted from tax through June 2025.

New preferential tax treatment is available to us for products manufactured at our Chonburi campus Building 9, where income generated will be tax exempt through 2031, capped at our actual investment amount.

Between June 2020 and June 2025, 50% of our income generated from products manufactured at our Pinehurst campus was exempted from tax.

Preferential tax treatment is available to us for products manufactured at our Chonburi campus Building 9, where income generated will be tax exempt through 2031, capped at our actual investment amount.

Such preferential tax treatment is contingent on various factors, including the export of our customers’ products out of Thailand and our agreement not to move our manufacturing facilities out of our current province in Thailand for at least 15 years from the date on which preferential tax treatment was granted.

47 unchanged sentences

Differences in forecasted volume used in calculating excess and obsolete inventory can result in a material adverse effect on our business, financial condition and results of operations.

During fiscal year 2024 and fiscal year 2023, a change of 10% for excess and obsolete materials, based on product demand and production requirements from our customers, would have affected our net income by approximately $0.6 million and $1.0 million, respectively.

During fiscal year 2025 and fiscal year 2024, a change of 10% for excess and obsolete materials, based on product demand and production requirements from our customers, would have affected our net income by approximately $0.6 million for both years.

Deferred Income Taxes

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Thus, a full valuation allowance of $1.6 million for the deferred tax assets was set up as of the end of fiscal year 2020.

A full valuation allowance of $3.8 million, $4.9 million and $2.1 million were set up for the fiscal year ended June 30, 2023, June 24, 2022 and June 25, 2021, respectively.

A full valuation allowance of $3.8 million, $4.9 million and $2.1 million was set up for the fiscal year ended June 30, 2023, June 24, 2022 and June 25, 2021, respectively.

During fiscal year 2024, deferred tax assets and valuation allowance were released due to our cessation of operations in the U.K.

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Thus, a full valuation allowance of $1.6 million for the deferred tax assets was released as of June 30, 2023.

However, due to our cessation of operations in the U.K., management believed that it will not generate sufficient taxable income to utilize the remaining deferred tax assets.

Thus, a full valuation allowance of $1.0 million was recorded as of June 28, 2024.

In fiscal year 2024, due to the planned closure of this entity, management believed that it would not generate sufficient taxable income to utilize the remaining deferred tax assets.

Thus, a full valuation allowance of $1.0 million was recorded.

In fiscal year 2025, the remaining deferred tax assets and valuation allowance were written off after the application to dissolve the entity was filed in the U.K.

During fiscal year 2024, our subsidiary in Israel generated net operating loss and management expected that such subsidiary would continue to have net operating losses in the foreseeable future.

1 unchanged sentence

Thus, a full valuation allowance of $2.7 million for the deferred tax assets was set up as of the end of fiscal year 2024.

The full valuation allowance of $2.7 million continued to be recorded for the fiscal year ended June 27, 2025.

Results of Operations

50 unchanged sentences

Our revenues increased by $536.3 million, or 18.6%, to $3,419.3 million for fiscal year 2025, compared with $2,883.0 million for fiscal year 2024.

This increase was primarily due to an increase in our key customers’ demand for optical communication products.

Revenues from optical communications products, which represented $2,289.0 million, or 79.4%, of our revenues for fiscal year 2024, increased by $280.7 million, or 14.0%, compared to prior fiscal year, mainly due to an increase in revenues from data communication products, primarily for artificial intelligence applications, offset by a decline in revenues from telecommunication products as inventory absorption within the telecommunication market continued during fiscal year 2024.

Revenues from non-optical communications products, which represented $594.0 million, or 20.6%, of our revenues for fiscal year 2024, decreased by $42.9 million, or 6.7%, compared to prior fiscal year, primarily due to inventory absorption related to certain programs in the automotive market.

This increase was primarily due to an increase in our key customers’ demand for both optical communications products and non-optical communications products.

Revenues from optical communications products, which represented $2,619.4 million, or 76.6%, of our revenues for fiscal year 2025, increased by $330.3 million, or 14.4%, compared to the prior fiscal year, mainly due to an increase in revenues from telecommunication products, as inventory absorption issues substantially subsided during fiscal year 2025.

Revenues from non-optical communications products, which represented $800.0 million, or 23.4%, of our revenues for fiscal year 2025, increased by $206.0 million, or 34.7%, compared to prior fiscal year, primarily due to growth in automotive revenue as short-term inventory absorption issues substantially subsided during fiscal year 2025.

Cost of revenues .

Our cost of revenues increased by $479.2 million, or 19.0%, to $3,006.0 million, or 87.9% of revenues, for fiscal year 2025, compared with $2,526.8 million, or 87.6% of revenues, for fiscal year 2024.

The increase in cost of revenues was primarily due to a proportional increase in sales volume.

The increase was in line with the increase in sales volume.

Gross profit .

3 unchanged sentences

Our SG&A expenses increased by $9.0 million, or 11.5%, to $87.5 million, or 2.6% of revenues, for fiscal year 2025, compared with $78.5 million, or 2.8% of revenues, for fiscal year 2024.

Our SG&A expenses increased during fiscal year 2024, compared with fiscal year 2023, mainly due to (1) an increase in sales and marketing expenses of $1.0 million;

(2) a net increase in allowance for expected credit losses of $0.9 million;

(3) an increase in information technology repair and maintenance expenses of $0.5 million;

(4) an increase in R&D expenses of $0.3 million;

and (5) an increase in share-based compensation expenses of $0.2 million;

offset by (1) recognizing an actuarial gain on obligation of $0.4 million in fiscal year 2024, compared with recognizing an actuarial loss on obligation of $1.1 million in fiscal year 2023;

(2) a decrease in legal and consulting fees of $0.4 million;

and (3) a decrease in customer relationships amortization of $0.2 million.

Our SG&A expenses increased during fiscal year 2025, compared with fiscal year 2024, mainly due to (1) an increase in executive compensation related expenses of $3.3 million, (2) an increase in legal and consulting fees of $1.6 million, (3) an increase in R&D expenses of $1.4 million, (4) an increase in share-based compensation expenses of $1.4 million, (5) an increase in information technology related expenses of $1.3 million, mainly from network, security system and new hardware costs, (6) recognizing an actuarial loss on obligation of $0.9 million in fiscal year 2025 compared with recognizing an actuarial gain on obligation of $0.4 million in fiscal year 2024, and (7) an increase in severance expenses of $0.7 million, offset by (1) a net decrease in allowance for expected credit losses of $1.1 million, (2) a decrease in sales and marketing expenses of $0.5 million, and (3) a net realized gain from financial instruments of $0.5 million.

Restructuring and other related costs.

We recorded $1.4 million in restructuring costs for fiscal year 2025, due to restructuring of operations in our subsidiary in Thailand.

We recorded a de minimis amount of restructuring costs for fiscal year 2024.

We recorded restructuring and other related costs for fiscal year 2023 of $6.9 million.

Operating income .

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Our interest income increased by $7.0 million, or 21.1% to $40.2 million, or 1.2% of revenues, for fiscal year 2025, compared with $33.2 million, or 1.2% for fiscal year 2024.

The increase was primarily due to a higher weighted average interest rate in fiscal year 2024 and a higher average cash balance and short-term investment of $722.0 million in fiscal year 2024, compared with $468.0 million in fiscal year 2023.

The increase was primarily due to a higher average cash balance and short-term investment of $919.0 million in fiscal year 2025, compared with $722.0 million in fiscal year 2024.

Interest expense .

Our interest expense decreased by $1.4 million to $0.1 million for fiscal year 2024, compared with $1.5 million for fiscal year 2023.

The decrease was primarily due to a decrease in the long-term loan balance.

Our interest expense decreased for fiscal year 2025, compared with fiscal year 2024, due to full repayment of our long-term loan balance.

Foreign exchange gain (loss), net .

We recorded foreign exchange gain, net of $0.4 million for fiscal year 2024, compared with foreign exchange loss, net of $1.2 million for fiscal year 2023.

The foreign exchange gain was mainly due to (1) lower realized loss from payment/receipt of $1.0 million, (2) unrealized gain from revaluation of outstanding Thai baht assets and liabilities of $0.9 million, and (3) higher unrealized gain from mark-to-market of forward contracts of $0.3 million, offset by (1) unrealized loss from revaluation of currencies other than Thai baht of $0.5 million, and (2) lower foreign exchange gain, totaling $0.1 million from our subsidiaries in the PRC and the U.K.

We recorded foreign exchange loss, net of $9.3 million for fiscal year 2025, compared with foreign exchange gain, net of $0.4 million for fiscal year 2024.

The foreign exchange loss was mainly due to (1) unrealized loss from revaluation of outstanding Thai baht assets and liabilities of $8.0 million, (2) higher unrealized loss from revaluation of currencies other than Thai baht of $1.1 million, (3) higher realized loss from payment/receipt of $1.0 million, and (4) foreign exchange loss totaling $0.8 million from our subsidiaries in the PRC and the U.K., offset by higher unrealized gain from mark-to-market of forward contracts of $1.2 million.

Income before income taxes .

2 unchanged sentences

Our provision for income tax reflects an effective tax rate of 6.4% and 4.9% for fiscal year 2025 and fiscal year 2024, respectively.

The increase was primarily due to a full valuation allowance of $3.8 million for deferred tax assets set up in fiscal year 2024.

The increase was primarily due to higher income subject to tax and IRS audit assessment in fiscal year 2025, offset by a full valuation allowance for deferred tax assets set up in fiscal year 2024.

We recorded net income of $332.5 million, or 9.7% of revenues, for fiscal year 2025, compared with net income of $296.2 million, or 10.3% of revenues, for fiscal year 2024.

1 unchanged sentence

We recorded other comprehensive income of $13.4 million, or 0.4% of revenues, for fiscal year 2025, compared with other comprehensive income of $5.0 million, or 0.2% of revenues, for fiscal year 2024.

The increase in other comprehensive income was mainly due to higher unrealized gain from mark-to-market of forward contracts and interest rate swap agreement of $1.0 million, offset by (1) lower unrealized gain from mark-to-market of available-for-sale debt securities of $0.6 million, and (2) lower gain from retirement benefits plan of $0.1 million.

The increase in other comprehensive income was mainly due to (1) higher unrealized gain from mark-to-market of available-for-sale debt securities of $7.8 million, and (2) unrealized gain from foreign currency translation adjustment of $1.2 million, offset by (1) lower gain from retirement benefits plan of $0.3 million, and (2) lower unrealized gain from mark-to-market of forward contracts of $0.3 million.

Comparison of Fiscal Year 2024 with Fiscal Year 2023

Our revenues increased by $237.8 million, or 9.0%, to $2,883.0 million for fiscal year 2024, compared with $2,645.2 million for fiscal year 2023.

This increase was primarily due to an increase in our key customers’ demand for fiscal year 2023.

Revenues from optical communications products represented 75.9% of our revenues for fiscal year 2023, compared with 78.8% for fiscal year 2022.

This increase was primarily due to an increase in our key customers’ demand for optical communication products.

Cost of revenues.

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Our SG&A expenses increased by $0.8 million, or 1.0%, to $78.5 million, or 2.8% of revenues, for fiscal year 2024, compared with $77.7 million, or 2.9% of revenues, for fiscal year 2023.

Our SG&A expenses increased during fiscal year 2023, compared with fiscal year 2022, mainly due to (1) recognizing an actuarial loss on obligation of $1.1 million in fiscal year 2023, compared with recognizing an actuarial gain on obligation of $1.5 million in fiscal year 2022;

(2) an increase in executive benefits of $1.0 million;

Our SG&A expenses increased during fiscal year 2024, compared with fiscal year 2023, mainly due to (1) an increase in sales and marketing expenses of $1.0 million;

(2) a net increase in allowance for expected credit losses of $0.9 million;

(3) an increase in information technology repair and maintenance expenses of $0.5 million;

(4) an increase in R&D expenses of $0.3 million;

(4) an increase in legal and consulting fees of $0.6 million;

and (5) an increase in insurance expenses of $0.3 million;

offset by a net decrease in allowance for expected credit losses of $1.5 million.

and (5) an increase in share-based compensation expenses of $0.2 million;

offset by (1) recognizing an actuarial gain on obligation of $0.4 million in fiscal year 2024, compared with recognizing an actuarial loss on obligation of $1.1 million in fiscal year 2023;

(2) a decrease in legal and consulting fees of $0.4 million;

and (3) a decrease in customer relationships amortization of $0.2 million.

Restructuring and other related costs.

We recorded a de minimis amount of restructuring costs for fiscal year 2024.

We recorded restructuring and other related costs for fiscal year 2023 of $6.9 million.

2 unchanged sentences

Interest income .

Our interest income increased by $9.0 million to $11.2 million for fiscal year 2023, compared with $2.2 million for fiscal year 2022.

The increase was primarily due to a higher weighted average interest rate in fiscal year 2023 compared with fiscal year 2022.

Our interest income increased by $22.0 million, or 196.4% to $33.2 million, or 1.2% for fiscal year 2024, compared with $11.2 million, or 0.4% for fiscal year 2023.

The increase was primarily due to a higher weighted average interest rate in fiscal year 2024, and a higher average cash balance and short-term investment of $722.0 million in fiscal year 2024, compared with $468.0 million in fiscal year 2023.

Interest expense .

Our interest expense increased by $1.1 million to $1.5 million for fiscal year 2023, compared with $0.4 million for fiscal year 2022.

The increase was primarily due to (1) lower interest expense capitalized of $0.9 million following the completion of a new manufacturing building at our Chonburi campus in July 2022, and (2) lower amortization of the fair value of interest rate swaps of $0.3 million during fiscal year 2023;

offset by lower interest expense due to a decrease in the amount of outstanding long-term loans.

Our interest expense decreased by $1.4 million to $0.1 million for fiscal year 2024, compared with $1.5 million for fiscal year 2023.

The decrease was primarily due to a decrease in the long-term balance.

Foreign exchange gain (loss), net .

We recorded foreign exchange loss, net of $1.2 million for fiscal year 2023, compared with foreign exchange gain, net of $2.3 million for fiscal year 2022.

The foreign exchange loss was mainly due to (1) unrealized foreign exchange loss from revaluation of outstanding Thai baht assets and liabilities of $3.5 million for fiscal year 2023, and (2) realized foreign exchange loss from payment/receipt of $3.1 million for fiscal year 2023, offset by (1) foreign exchange gain from subsidiaries in the PRC and the U.K., totaling $1.5 million for fiscal year 2023, (2) unrealized foreign exchange gain from mark-to-market of forward contracts of $1.2 million for fiscal year 2023, and (3) unrealized foreign exchange gain from revaluation of other currencies of $0.4 million for fiscal year 2023.

We recorded foreign exchange gain, net of $0.4 million for fiscal year 2024, compared with foreign exchange loss, net of $1.2 million for fiscal year 2023.

Income before income taxes .

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Our provision for income tax reflects an effective tax rate of 4.9% and 4.7% for fiscal year 2024 and fiscal year 2023, respectively.

The increase was primarily due to higher income subject to tax in fiscal year 2023, as compared to fiscal year 2022.

The increase was primarily due to a full valuation allowance of $3.8 million for deferred tax assets set up in fiscal year 2024.

We recorded net income of $296.2 million, or 10.3% of revenues, for fiscal year 2024, compared with net income of $247.9 million, or 9.4% of revenues, for fiscal year 2023.

Other comprehensive income (loss) .

We recorded other comprehensive income of $4.7 million, or 0.2% of revenues, for fiscal year 2023, compared with other comprehensive loss of $6.5 million, or 0.3% of revenues, for fiscal year 2022.

The increase in other comprehensive income was mainly due to (1) unrealized gain from mark-to-market of available-for-sale debt securities of $9.1 million for fiscal year 2023, and (2) unrealized gain from mark-to-market of forward contracts and interest rate swap agreement of $2.1 million for fiscal year 2023.

We recorded other comprehensive income of $5.0 million, or 0.2% of revenues, for fiscal year 2024, compared with other comprehensive income of $4.7 million, or 0.2% of revenues, for fiscal year 2023.

Liquidity and Capital Resources

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We primarily finance our operations through cash flow from operating activities.

As of June 28, 2024 and June 30, 2023, we had cash, cash equivalents, and short-term investments of $858.6 million and $550.5 million, respectively, and no outstanding debt and outstanding debt of $12.2 million, respectively.

As of June 27, 2025 and June 28, 2024, we had cash, cash equivalents, and short-term investments of $934.2 million and $858.6 million, respectively, and no outstanding debt.

Our cash and cash equivalents, which primarily consist of cash on hand, demand deposits and liquid investments with original maturities of three months or less, are placed with banks and other financial institutions.

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We determine realized gains or losses on sale of available-for-sale debt securities on a specific identification method and record such gains or losses as interest income in the consolidated statements of operations and comprehensive income.

As of June 30, 2023, we had long-term borrowing under our credit facility agreement of $12.2 million.

As of June 28, 2024, we had no outstanding balance under our credit facility agreement (see Note 13 of the Notes to Consolidated Financial Statements for further details).

To better manage our cash on hand, we held short-term investments of $448.6 million as of June 28, 2024.

We believe that our current cash and cash equivalents, short-term investments, cash flow from operations, and funds available through our credit facility will be sufficient to meet our working capital and capital expenditure needs for at least the

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We also believe that our current manufacturing capacity is sufficient to meet our anticipated production requirements for at least the next few quarters.

In February 2025, we began construction of a new manufacturing facility of approximately 2.0 million square feet at our Chonburi campus.

The total expected cost of the project is approximately $132.5 million (Thai baht 4.45 billion).

The following table shows our cash flows for the periods indicated:

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Cash provided by operating activities is net income adjusted for certain non-cash items and changes in certain assets and liabilities.

The increase in cash provided by operating activities for fiscal year 2024 as compared to fiscal year 2023 was primarily driven by efficient cash-favorable working capital changes and higher net income.

The decrease in cash provided by operating activities for fiscal year 2025 as compared to fiscal year 2024 was primarily due to (1) a change in inventories of $174.2 million due to new products and higher sales volume, and (2) an increase in trade receivables of $104.4 million, offset by (1) an increase in trade payables of $134.2 million, (2) an increase in net income of $36.3 million, (3) a change in other current and non-current assets of $13.1 million, and (4) an increase in accrued expenses of $11.6 million.

Investing Activities

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and capital expenditures.

Cash used in investing activities was higher for fiscal year 2024 as compared to cash used in investing activities for fiscal year 2023 primarily due to an increase in investment purchases partially offset by lower capital expenditures.

The increase in cash used in investing activities for fiscal year 2025 as compared to cash used in investing activities for fiscal year 2024 was primarily due to (1) an increase related to the commencement of construction of a new manufacturing building at our Chonburi campus, (2) an increase in capital expenditures to support certain customers, and (3) a decrease in proceeds of investment.

Financing Activities

Financing cash flows consist primarily of repayment of long-term debt, share repurchases, and withholding tax related to net share settlement of restricted share units.

Cash used in financing activities was lower for fiscal year 2024 as compared to the fiscal year 2023 primarily due to lower volume of share repurchases and a decrease in withholding tax related to net share settlement of restricted share units, and lower repayment of long-term borrowings due to one fewer installment from one fewer week in the first quarter of fiscal year 2024 compared to fiscal year 2023.

The increase in cash used in financing activities for fiscal year 2025 as compared to the fiscal year 2024 was primarily due to an increase in share repurchases and higher withholding tax related to net share settlement of restricted share units, offset by lower repayment of long-term borrowings.

Material Cash Requirements for Contractual Obligations

As of June 28, 2024, we had material cash requirements of $5.9 million including scheduled payments within one year of $1.6 million and after one year of $4.3 million.

These material cash requirements consisted of the following contractual and other obligations.

Operating Lease

As of June 27, 2025, we have certain operating lease arrangements under which the lease payments are calculated using the straight-line method.

Our rental expenses under these leases which will be paid within one year is $1.6 million and after one year is $4.3 million.

Our rental expenses under these leases to be paid within one year and after one year are $2.1 million and $4.4 million, respectively.

Capital Expenditures

2 unchanged sentences

Capital expenditures $ 130,658 $ 49,270 $ 66,712

During fiscal year 2024, fiscal year 2023, and fiscal year 2022, we invested in a manufacturing building at our Chonburi campus and continued to purchase equipment to support the expansion of our manufacturing facilities in Thailand, the PRC and Israel.

We expect our capital expenditures for fiscal year 2025 to increase compared to fiscal year 2024 mainly due to investment in the new manufacturing building and building improvements at our Chonburi campus.

During fiscal year 2025, we invested in a new manufacturing building at our Chonburi campus and equipment for expansion of our manufacturing facilities in Thailand.

We expect our capital expenditures for fiscal year 2026 to decrease

compared to fiscal year 2025, mainly due to the new manufacturing building expenditures having been recognized while capital expenditures on equipment for expansion of our manufacturing facilities continue.

Recent Accounting Pronouncements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis