FORMFACTOR INC 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Cautionary Statement Regarding Forward-Looking Statements This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Securities Exchange Act of 1934 and the Securities Act of 1933, which are subject to risks and uncertainties. The forward-looking statements include statements concerning, among other things, our business strategy, financial and operating results, gross margins, liquidity and capital expenditure requirements and impact of accounting standards. In some cases, you can identify these statements by forward-looking words, such as “may,” “might,” “will,” “could,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “intend” and “continue,” the negative or plural of these words and other comparable terminology. The forward-looking statements are only predictions based on our current expectations and our projections about future events. All forward-looking statements included in this Quarterly Report on Form 10-Q are based upon information available to us as of the filing date of this Quarterly Report on Form 10-Q. You should not place undue reliance on these forward-looking statements. We have no obligation to update any of these statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these statements, including risks related to general market trends, the benefits of acquisitions and investments, uncertainties related to COVID-19 and the impact of our responses to it, the interpretation and impacts of changes in export controls and other trade barriers, our ability to execute our business strategy and other risks discussed in the section titled “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 26, 2020 and in this Quarterly Report on Form 10-Q. You should carefully consider the numerous risks and uncertainties described under these sections. The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and the accompanying notes contained in this Quarterly Report on Form 10-Q. Unless expressly stated or the context otherwise requires, the terms “we,” “our,” “us” and “FormFactor” refer to FormFactor, Inc. and its subsidiaries. 25 Overview FormFactor, Inc., headquartered in Livermore, California, is a leading provider of test and measurement technologies. We provide a broad range of high-performance probe cards, analytical probes, probe stations, metrology systems, thermal systems and cryogenic systems to both semiconductor companies and scientific institutions. Our products provide electrical and physical information from a variety of semiconductor and electro-optical devices and integrated circuits from early research, through development, to high-volume production. Customers use our products and services to lower production costs, improve yields, and enable development of their complex next-generation products. We operate in two reportable segments consisting of the Probe Cards segment and the Systems segment. Sales of our probe cards and analytical probes are included in the Probe Cards segment, while sales of our probe stations, metrology systems, and thermal and cryogenic systems are included in the Systems segment. We generated net income of $37.5 million in the first six months of fiscal 2021 as compared to $36.4 million in the first six months of fiscal 2020. The increase in net income was primarily due to increased revenues, partially offset by slightly lower margins on a lower mix of Foundry & Logic probe card sales and higher operating expenses on higher operating levels. Impact of COVID-19 The COVID-19 pandemic continues to cause serious illness and death in many of the regions that we, our customers and our suppliers operate. The COVID-19 pandemic has resulted in significant governmental actions designed to control the spread of the virus, including the imposition of safety requirements and other orders in locations where we have manufacturing and other activities. We believe that we operate in a critical infrastructure industry, as defined by the U.S. Department of Homeland Security. This reduces the current and anticipated impacts of the COVID-19 pandemic on our major customers and suppliers, and upon our operations, as compared to companies that are not part of the critical infrastructure. We currently continue to operate in all of our manufacturing sites at production levels comparable to those prior to the pandemic, albeit subject to certain safety and related constraints. Our other operations are similarly continuing with substantial work-from-home activities. If the provisions of governmental health orders or other safety requirements applicable to us or our customers or suppliers become more restrictive for an extended period of time, or if we have repeated occurrences of COVID-19 in any of our facilities, we may experience disruptions or delays in manufacturing, product design, product development, customer support, manufacturing and sales, and an overall loss of productivity and efficiency. While to date the disruptions in our operations, supply chain and customer demand as a result of the COVID-19 pandemic have been somewhat limited, we believe that the COVID-19 pandemic represents a sustained threat that may give rise to a variety of more significant adverse impacts on our business and financial results. For a further description of the uncertainties and business risks associated with the COVID-19 pandemic, see the risk factors discussed in our Annual Report on Form 10-K for the year ended December 26, 2020. Significant Accounting Policies and the Use of Estimates Management’s Discussion and Analysis and Note 2, Summary of Significant Accounting Policies , to the Consolidated Financial Statements in our 2020 Annual Report on Form 10-K describe the significant accounting estimates and significant accounting policies used in preparation of the Consolidated Financial Statements. Actual results in these areas could differ from management’s estimates. During the six months ended June 26, 2021, there were no significant changes in our significant accounting policies or estimates from those reported in our Annual Report on Form 10-K for the year ended December 26, 2020, which was filed with the Securities and Exchange Commission on February 22, 2021. 26 Results of Operations The following table sets forth our operating results as a percentage of revenues for the periods indicated: Three Months Ended Six Months Ended June 26, 2021 June 27, 2020 June 26, 2021 June 27, 2020 Revenues 100.0 % 100.0 % 100.0 % 100.0 % Cost of revenues 59.4 58.1 59.2 58.1 Gross profit 40.6 41.9 40.8 41.9 Operating expenses: Research and development 13.5 13.3 13.2 13.2 Selling, general and administrative 16.2 14.4 16.1 15.8 Total operating expenses 29.7 27.7 29.3 29.0 Operating income 10.9 14.2 11.5 12.9 Interest income 0.1 0.2 0.1 0.3 Interest expense (0.1) (0.1) (0.1) (0.2) Other expense, net (0.1) — — — Income before income taxes 10.8 14.3 11.5 13.0 Provision for income taxes 1.2 1.4 1.5 1.6 Net income 9.6 % 12.9 % 10.0 % 11.4 % Revenues by Segment and Market Three Months Ended Six Months Ended June 26, 2021 June 27, 2020 June 26, 2021 June 27, 2020 (In thousands) Probe Cards $ 153,641 $ 133,784 $ 312,539 $ 268,499 Systems 34,435 24,040 62,173 50,078 $ 188,076 $ 157,824 $ 374,712 $ 318,577 27 Three Months Ended June 26, 2021 % of Revenues June 27, 2020 % of Revenues $ Change % Change (Dollars in thousands) Probe Cards Markets: Foundry & Logic $ 103,726 55.1 % $ 109,347 69.3 % $ (5,621) (5.1) % DRAM 42,088 22.4 19,052 12.1 23,036 120.9 Flash 7,827 4.2 5,385 3.4 2,442 45.3 Systems Market: Systems 34,435 18.3 24,040 15.2 10,395 43.2 Total revenues $ 188,076 100.0 % $ 157,824 100.0 % $ 30,252 19.2 % Six Months Ended June 26, 2021 % of Revenues June 27, 2020 % of Revenues $ Change % Change (Dollars in thousands) Probe Cards Markets: Foundry & Logic $ 217,136 57.9 % $ 215,092 67.6 % $ 2,044 1.0 % DRAM 75,986 20.3 43,748 13.7 32,238 73.7 Flash 19,417 5.2 9,659 3.0 9,758 101.0 Systems Market: Systems 62,173 16.6 50,078 15.7 12,095 24.2 Total revenues $ 374,712 100.0 % $ 318,577 100.0 % $ 56,135 17.6 % The decrease in Foundry & Logic product revenue for the three months ended June 26, 2021, compared to the three months ended June 27, 2020, was driven principally by lower demand from one major customer, partially offset by increased unit sales to other large semiconductor foundries and integrated device manufacturers, demonstrating success in diversifying across our strategic accounts. The increase in Foundry & Logic product revenue for the six months ended June 26, 2021, compared to the six months ended June 27, 2020, was driven principally by increased unit sales to large semiconductor foundries and integrated device manufacturers, partially offset by lower demand from one major customer. The increase in DRAM product revenue for the three and six months ended June 26, 2021, compared to the three and six months ended June 27, 2020, was driven by an increase in sales as a result of increased design wins and customer demand. The increase in Flash product revenue for the three and six months ended June 26, 2021, compared to the three and six months ended June 27, 2020, was driven by increased sales resulting from the acquisition of Baldwin Park. Our revenue in this market continues to be highly variable. The increase in Systems product revenue for the three and six months ended June 26, 2021, compared to the three and six months ended June 27, 2020, was driven by increased sales of cryogenic systems due to the acquisition of High Precision Devices, Inc. (“HPD”) and increased sales of thermal sub-systems and metrology systems. Due to COVID-19, there were various impacts across our segments due to governmental mandates of social distancing. This resulted in a temporary factory shutdown for almost two weeks during our first fiscal quarter of 2020 in certain locations, limiting our manufacturing capacity. We believe these shutdowns negatively affected revenue and impacted our ability to maintain typical lead times, especially in our Probes segment. The plant shutdowns we experienced in the six months ended June 27, 2020 did not recur in the six months ended June 26, 2021, which presumably drove some of the increased sales, particularly in the Probe Cards segment where the plant shutdowns in 2020 were longer in duration than the shutdowns for the Systems segment. 28 Revenues by Geographic Region Three Months Ended Six Months Ended June 26, 2021 % of Revenue June 27, 2020 % of Revenue June 26, 2021 % of Revenue June 27, 2020 % of Revenue (Dollars in thousands) Taiwan $ 51,884 27.6 % $ 33,171 21.0 % $ 97,464 26.0 % $ 64,951 20.4 % South Korea 36,177 19.2 % 15,113 9.6 % 55,262 14.7 % 29,201 9.2 % United States 32,650 17.4 % 28,121 17.8 % 62,136 16.6 % 60,037 18.8 % China 31,827 16.9 % 48,758 30.9 % 74,452 19.9 % 92,400 29.0 % Asia-Pacific 1 14,288 7.6 % 6,500 4.1 % 43,246 11.5 % 14,363 4.5 % Europe 12,010 6.4 % 14,132 9.0 % 22,009 5.9 % 35,175 11.0 % Japan 7,704 4.1 % 10,059 6.4 % 17,025 4.5 % 18,429 5.8 % Rest of the world 1,536 0.8 % 1,970 1.2 % 3,118 0.9 % 4,021 1.3 % Total revenues $ 188,076 100.0 % $ 157,824 100.0 % $ 374,712 100.0 % $ 318,577 100.0 % 1 Asia-Pacific includes all countries in the region except China, Japan, South Korea and Taiwan, which are disclosed separately. Geographic revenue information is based on the location to which we ship the product. For example, if a certain South Korean customer purchases through their U.S. subsidiary and requests the products to be shipped to an address in South Korea, this sale will be reflected in the revenue for South Korea rather than the U.S. Changes in revenue by geographic region for the three and six months ended June 26, 2021, compared to the three and six months ended June 27, 2020, were primarily attributable to changes in customer demand, shifts in customer regional manufacturing strategies, particularly with our large multinational customers, and product sales mix. Cost of Revenues and Gross Margins Cost of revenues consists primarily of manufacturing materials, compensation and benefits, shipping and handling costs, manufacturing-related overhead and amortization of certain intangible assets. Our manufacturing operations rely on a limited number of suppliers to provide key components and materials for our products, some of which are a sole source. We order materials and supplies based on backlog and forecasted customer orders. Tooling and setup costs related to changing manufacturing lots at our suppliers are also included in the cost of revenues. We expense all warranty costs, inventory provisions and amortization of certain intangible assets as cost of revenues. Our gross profit and gross margin were as follows (dollars in thousands): Three Months Ended June 26, 2021 June 27, 2020 $ Change % Change Gross profit $ 76,283 $ 66,167 $ 10,116 15.3 % Gross margin 40.6 % 41.9 % Six Months Ended June 26, 2021 June 27, 2020 $ Change % Change Gross profit $ 152,989 $ 133,557 $ 19,432 14.5 % Gross margin 40.8 % 41.9 % 29 Our gross profit and gross margin by segment were as follows (dollars in thousands): Three Months Ended June 26, 2021 June 27, 2020 Probe Cards Systems Corporate and Other Total Probe Cards Systems Corporate and Other Total Gross profit $ 66,600 $ 16,907 $ (7,224) $ 76,283 $ 61,523 $ 10,719 $ (6,075) $ 66,167 Gross margin 43.3 % 49.1 % 40.6 % 46.0 % 44.6 % 41.9 % Six Months Ended June 26, 2021 June 27, 2020 Probe Cards Systems Corporate and Other Total Probe Cards Systems Corporate and Other Total Gross profit $136,915 $ 30,506 $ (14,432) $ 152,989 $122,266 $ 24,053 $ (12,762) $ 133,557 Gross margin 43.8 % 49.1 % 40.8 % 45.5 % 48.0 % 41.9 % Probe Cards For the three and six months ended June 26, 2021, gross margins decreased compared to the three and six months ended June 27, 2020, primarily due to a lesser proportion of sales coming from higher gross margin Foundry & Logic probe card sales and a greater proportion of sales coming from lower gross margin DRAM sales, combined with higher materials costs. Systems For the three and six months ended June 26, 2021, gross margins increased compared to the three and six months ended June 27, 2020, primarily as a result of favorable product mix, largely related to increased sales of thermal sub-systems and metrology systems. Corporate and Other Corporate and Other includes unallocated expenses relating to share-based compensation and amortization of intangible assets, inventory and fixed asset fair value adjustments due to acquisitions, and other which are not used in evaluating the results of, or in allocating resources to, our reportable segments. Overall Gross profit and gross margins fluctuate with revenue levels, product mix, selling prices, factory loading and material costs. For the three and six months ended June 26, 2021, compared to the three and six months ended June 27, 2020, gross profit has increased on greater revenue levels while gross margins have decreased, primarily on less favorable Probes segment product mix. Cost of revenues included stock-based compensation expense as follows (in thousands): Three Months Ended Six Months Ended June 26, 2021 June 27, 2020 June 26, 2021 June 27, 2020 Stock-based compensation $ 1,079 $ 901 $ 2,414 $ 1,838 30 Research and Development Three Months Ended June 26, 2021 June 27, 2020 $ Change % Change (Dollars in thousands) Research and development $ 25,454 $ 20,919 $ 4,535 21.7 % % of revenues 13.5 % 13.3 % Six Months Ended June 26, 2021 June 27, 2020 $ Change % Change (Dollars in thousands) Research and development $ 49,500 $ 42,186 $ 7,314 17.3 % % of revenues 13.2 % 13.2 % The increase in research and development expenses in the three and six months ended June 26, 2021 when compared to the corresponding period in the prior year was primarily driven by our recent acquisitions of Baldwin Park and HPD, which increased headcount and general operational costs. Annual salary increases and higher stock-based compensation also contributed to the increase. The increase is in alignment with current operating levels with no change as a percent of revenues for the six months ended June 26, 2021 when compared to the corresponding period in the prior year. A detail of the changes is as follows (in thousands): Three Months Ended June 26, 2021 compared to Three Months Ended June 27, 2020 Six Months Ended June 26, 2021 compared to Six Months Ended June 27, 2020 Employee compensation costs $ 2,992 $ 4,429 Stock-based compensation 274 524 Project material costs 206 510 Depreciation 146 260 Other general operations 917 1,591 $ 4,535 $ 7,314 Research and development included stock-based compensation expense as follows (in thousands): Three Months Ended Six Months Ended June 26, 2021 June 27, 2020 June 26, 2021 June 27, 2020 Stock-based compensation $ 1,663 $ 1,389 $ 3,352 $ 2,828 31 Selling, General and Administrative Three Months Ended June 26, 2021 June 27, 2020 $ Change % Change (Dollars in thousands) Selling, general and administrative $ 30,479 $ 22,755 $ 7,724 33.9 % % of revenues 16.2 % 14.4 % Six Months Ended June 26, 2021 June 27, 2020 $ Change % Change (Dollars in thousands) Selling, general and administrative $ 60,494 $ 50,448 $ 10,046 19.9 % % of revenues 16.1 % 15.8 % The increase in selling, general and administrative expenses in the three and six months ended June 26, 2021 when compared to the corresponding period in the prior year was primarily driven by our recent acquisitions of Baldwin Park and HPD, which increased headcount and general operational costs. Annual salary increases and higher stock-based compensation also contributed to the increase, together with a benefit in the prior year related to contingent consideration for the acquisition of FRT GmbH ("FRT") that did not repeat. A detail of the changes is as follows (in thousands): Three Months Ended June 26, 2021 compared to Three Months Ended June 27, 2020 Six Months Ended June 26, 2021 compared to Six Months Ended June 27, 2020 Gain on contingent consideration $ 3,605 $ 3,605 Employee compensation costs 2,831 4,903 Stock-based compensation 494 1,300 General operating expenses 488 506 Consulting fees 145 (34) Travel related costs 100 (498) Amortization of intangibles 61 264 $ 7,724 $ 10,046 Selling, general and administrative included stock-based compensation expense as follows (in thousands): Three Months Ended Six Months Ended June 26, 2021 June 27, 2020 June 26, 2021 June 27, 2020 Stock-based compensation $ 3,846 $ 3,352 $ 7,899 $ 6,599 32 Interest Income and Interest Expense Three Months Ended Six Months Ended June 26, 2021 June 27, 2020 June 26, 2021 June 27, 2020 (Dollars in thousands) Interest Income $ 148 $ 376 $ 342 $ 1,061 Weighted average balance of cash and investments $ 263,363 $ 235,888 $ 215,232 $ 223,340 Weighted average yield on cash and investments 0.32 % 0.81 % 0.35 % 1.26 % Interest Expense $ 116 $ 171 $ 296 $ 489 Average debt outstanding $ 30,453 $ 32,368 $ 31,358 $ 38,843 Weighted average interest rate on debt 1.58 % 1.92 % 1.58 % 2.26 % Interest income is earned on our cash, cash equivalents, restricted cash and marketable securities. The decrease in interest income for the three and six months ended June 26, 2021 compared with the corresponding period of the prior year was attributable to lower investment yields due to the low interest rate environment, despite higher invested balances. Interest expense primarily includes interest on our term loans, interest rate swap derivative contracts, and term loan issuance costs amortization charges. The decrease in interest expense for the three and six months ended June 26, 2021 compared to the same period of the prior year was primarily due to lower outstanding debt balances due to the pay-off of the term loan acquired when we purchased Cascade Microtech, Inc, and subsequently paid off on June 30, 2020, partially offset by the Building Term Loan that originated in the second quarter of 2020. Interest expense was also lower due to lower average interest rates on the outstanding debt. Other Income (Expense), Net Other income (expense), net, primarily includes the effects of foreign currency impact and various other gains and losses. Provision for Income Taxes Three Months Ended Six Months Ended June 26, 2021 June 27, 2020 June 26, 2021 June 27, 2020 (In thousands, except percentages) Provision for income taxes $ 2,283 $ 2,162 $ 5,489 $ 4,978 Effective tax rate 11.3 % 9.6 % 12.8 % 12.0 % Provision for income taxes reflects the tax provision on our operations in foreign and U.S. jurisdictions, offset by tax benefits from tax credits and the foreign-derived intangible income (“FDII”) deduction. Our effective tax rate may vary from period to period based on changes in estimated taxable income or loss by jurisdiction, changes to the valuation allowance, changes to U.S. federal, state or foreign tax laws, changes in ASC 718 stock-based compensation expense/benefit, future expansion into areas with varying country, state, and local income tax rates, and deductibility of certain costs and expenses by jurisdiction. We have utilized our previous net operating loss carryforwards, and expect the FDII deduction and corresponding benefit to be available, resulting in a decrease from the U.S. statutory rate and included in our worldwide effective tax rate for the year ending December 25, 2021. Liquidity and Capital Resources Capital Resources Our working capital was $343.6 million at June 26, 2021, compared to $332.5 million at December 26, 2020. Cash and cash equivalents primarily consist of deposits held at banks and money market funds. Marketable securities primarily consist of U.S. treasuries, corporate bonds, and commercial paper. We typically invest in highly-rated securities with low probabilities of default. Our investment policy requires investments to be rated single A or better, and limits the types of acceptable investments, issuer concentration and duration of the investment. 33 Our cash, cash equivalents and marketable securities totaled approximately $256.2 million at June 26, 2021, compared to $255.0 million at December 26, 2020. We believe that we will be able to satisfy our working capital requirements and scheduled term loan repayments for at least the next twelve months with the liquidity provided by our existing cash, cash equivalents, marketable securities and cash provided by operations. To the extent necessary, we may consider entering into short and long-term debt obligations, raising cash through a stock issuance, or obtaining new financing facilities, which may not be available on terms favorable to us. Our future capital requirements may vary materially from those now planned. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of financial markets. An extended period of global supply chain and economic disruption could materially affect our business, results of operations, access to sources of liquidity and financial condition. If we are unsuccessful in maintaining or growing our revenues, maintaining or reducing our cost structure (in response to a potential reduction in demand due to an industry downturn, COVID-19, or other event), or increasing our available cash through debt or equity financings, our cash, cash equivalents and marketable securities may decline. We utilize a variety of tax planning and financing strategies to manage our worldwide cash and deploy funds to locations where needed. As part of these strategies, we indefinitely reinvest a portion of our foreign earnings. Should we require additional capital in the United States, we may elect to repatriate indefinitely-reinvested foreign funds or raise capital in the United States. Cash Flows The following table sets forth our net cash flows from operating, investing and financing activities: Six Months Ended June 26, 2021 June 27, 2020 (In thousands) Net cash provided by operating activities $ 66,155 $ 82,447 Net cash used in investing activities (59,813) (20,977) Net cash used in financing activities $ (31,916) $ (7,265) Operating Activities Net cash provided by operating activities for the six months ended June 26, 2021 was primarily attributable to net income of $37.5 million and net non-cash expenses of $51.9 million, further impacted by changes in operating assets and liabilities, as explained below. Inventories, net, increased $12.7 million to $111.9 million at June 26, 2021, compared to $99.2 million at December 26, 2020, as a result of anticipated projected customer demand. Due to provisions for excess and obsolete inventories of $6.9 million, the change in Inventories, net, was further impacted. Operating lease liabilities increased $7.4 million to $42.1 million at June 26, 2021, compared to $34.7 million at December 26, 2020 as a result of additional right-of-use assets obtained in exchange for lease obligations of $11.6 million offset by lease payments. Investing Activities Net cash used in investing activities for the six months ended June 26, 2021 was primarily related to $31.3 million property, plant and equipment acquisitions, and $28.5 million net cash used to purchase marketable securities. Financing Activities Net cash used in financing activities for the six months ended June 26, 2021 primarily related to $24.0 million used to purchase common stock under our stock repurchase program, $5.3 million related to tax withholding associated with the net share settlements of our equity awards, and $4.7 million of principal payments made towards the repayment of our term loans, partially offset by $5.9 million of proceeds received from issuances of common stock under our employee stock purchase plan and stock option plans, and $3.9 million paid to settle the contingent consideration from the acquisition of FRT. 34 Debt FRT Term Loan On October 25, 2019, we entered into a $23.4 million three-year credit facility loan agreement (the “FRT Term Loan”), to fund the acquisition of FRT GmbH, which we acquired on October 9, 2019. The FRT Term Loan bears interest at a rate equal to the Euro Interbank Offered Rate (“EURIBOR”) plus 1.75% per annum and will be repaid in quarterly installments of approximately $2.0 million plus interest. The interest rate at June 26, 2021 was 1.21%. As of June 26, 2021, the balance outstanding pursuant to the FRT term loan was $12.5 million. Building Term Loan On June 22, 2020, we entered into an $18.0 million 15-year credit facility loan agreement (the “Building Term Loan”). The proceeds of the Building Term Loan were used to finance the purchase a building adjacent to our leased facilities in Livermore, California. The Building Term Loan bears interest at a rate equal to the applicable LIBOR rate plus 1.75% per annum. Interest payments are payable in monthly installments over a fifteen-year period. The interest rate at June 26, 2021 was 1.84%. As of June 26, 2021, the balance outstanding pursuant to the Building Term Loan was $17.0 million. On March 17, 2020, we entered into a forward starting interest rate swap agreement to hedge the interest payments on the Building Term Loan for the notional amount of $18.0 million, and an amortization period that matches the debt. As future levels of LIBOR over the life of the loan are uncertain, we entered into this interest-rate swap agreement to hedge the exposure in interest rate risks associated with movement in LIBOR rates. By entering into the agreement, we convert a floating rate interest at one-month LIBOR plus 1.75% into a fixed rate interest at 2.75%. As of June 26, 2021, the notional amount of the loan that is subject to this interest rate swap is $17.0 million. Stock Repurchase Program In October 2020, our Board of Directors authorized a program to repurchase up to $50.0 million of outstanding common stock to offset potential dilution from issuances of common stock under our stock-based compensation plans. The share repurchase program will expire on October 28, 2022. During the six months ended June 26, 2021, we repurchased 620,200 shares of common stock for $24.0 million and, as of June 26, 2021, $26.0 million remained available for future repurchases. Contractual Obligations and Commitments The following table summarizes our significant contractual commitments to make future payments in cash under contractual obligations as of June 26, 2021: Payments Due In Fiscal Year Remainder 2021 2022 2023 2024 2025 Thereafter Total Operating leases $ 4,264 $ 8,527 $ 7,172 $ 6,766 $ 6,742 $ 14,850 $ 48,321 Term loans - principal payments 4,677 9,376 1,050 1,080 1,111 12,259 29,553 Term loans - interest payments (1) 228 364 281 262 240 1,146 2,521 Total $ 9,169 $ 18,267 $ 8,503 $ 8,108 $ 8,093 $ 28,255 $ 80,395 (1) Represents our minimum interest payment commitments at 1.84% per annum for the Building Term Loan and 1.21% per annum for the FRT Term Loan. This also excludes any amounts related to our interest rate swap. Off-Balance Sheet Arrangements Historically, we have not participated in transactions that have generated relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As of June 26, 2021, we were not involved in any such off-balance sheet arrangements. 35 Recent Accounting Pronouncements See Note 1, Basis of Presentation and New Accounting Pronouncements , of Notes to Condensed Consolidated Financial Statements.