What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-08-22 compared with 2024-08-23 · 272 added, 205 removed, 876 unchanged (35% of the section changed)

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and subsidiaries (the “Company”) as of June 30, 2025 and 2024, the related consolidated statements of income, comprehensive income, share owners’ equity, and cash flows, for each of the three years in the period ended June 30, 2025, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”).

We have also audited the Company’s internal control over financial reporting as of June 30, 2024, based on the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We also have audited the Company’s internal control over financial reporting as of June 30, 2025, based on the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2025, in conformity with accounting principles generally accepted in the United States of America.

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Our audit procedures related to management’s estimates of the anticipated margins used to recognize revenue over time and record contract assets included the following, among others:

• We tested the effectiveness of controls over the Company’s recognition of revenue over time and the related contract asset balance, including management’s process for estimating the anticipated margins for products manufactured to customer specifications for which the Company has an enforceable right to payment for performance completed to date.

We evaluated management’s ability to estimate revenue accurately by comparing actual margins to management’s historical estimates for completed contracts.

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Current Liabilities:

Current portion of borrowings under credit facilities $ 59,837 $ 46,454

Current portion of long-term debt $ 17,400 $ 59,837

Accounts payable 218,805 213,551

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Goodwill Impairment — 5,820 —

Asset Impairment

(Gain on Disposal) Asset Impairment

( 2,391 ) 17,040 —

Operating Income 45,535 49,277 87,729

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Non-operating income (expense), net ( 5,332 ) ( 1,877 ) 3,125

Other income (expense), net ( 24,078 ) ( 12,985 ) ( 8,818 )

Other expense, net

( 19,306 ) ( 24,078 ) ( 12,985 )

Income Before Taxes on Income 26,229 25,199 74,744

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Depreciation and amortization 36,994 38,030 32,416

(Gain) loss on sales of assets ( 15 ) ( 23 ) 90

Gain on sales of assets

( 1,139 ) ( 15 ) ( 23 )

Deferred income taxes ( 6,243 ) ( 8,852 ) ( 1,714 )

Goodwill impairment — 5,820 —

Asset impairment 17,040 — —

(Gain on disposal) asset impairment ( 2,391 ) 17,040 —

Stock-based compensation 6,519 7,185 6,914

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Purchases of capitalized software ( 399 ) ( 966 ) ( 1,321 )

Net proceeds from disposal 18,507 — —

Other, net 85 20 ( 95 )

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Proceeds from credit facilities 100,000 — 105,000

Payments on credit facilities ( 237,500 ) — —

Additional net change in revolving credit facilities ( 9,830 ) 13,450 ( 4,304 )

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Debt issuance costs ( 499 ) ( 150 ) ( 100 )

Net cash provided by financing activities 8,974 99,179 103,741

Net cash (used for) provided by financing activities ( 160,874 ) 8,974 99,179

Effect of Exchange Rate Change on Cash, Cash Equivalents, and Restricted Cash 2,325 ( 755 ) ( 895 )

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( 2,417 ) 1,001 ( 1,416 )

Restricted share units issuance ( 2,000 shares)

( 40 ) 22 ( 18 )

Deferred share issuance ( 3,000 shares)

Repurchase of Common Stock ( 485,000 shares)

( 9,122 ) ( 9,122 )

Amounts at June 30, 2023 $ 315,482 $ 296,053 $ ( 11,046 ) $ ( 76,495 ) $ 523,994

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Compensation expense related to stock compensation plans 6,773 6,773

Performance share issuance ( 84,000 shares)

Performance and restricted share issuance ( 108,000 and 19,000 shares, respectively)

( 3,027 ) 1,549 ( 1,478 )

Repurchase of Common Stock ( 136,000 shares)

( 3,035 ) ( 3,035 )

Amounts at June 30, 2024 $ 319,463 $ 316,564 $ ( 17,807 ) $ ( 77,759 ) $ 540,461

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( 2,379 ) 1,341 ( 1,038 )

Charitable donation of common stock ( 2,000 shares)

Repurchase of Common Stock

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We provide electronics manufacturing services (“EMS”), including engineering and supply chain support, to customers in the automotive, medical, and industrial end markets.

We deliver a package of value that begins with our core competency of producing durable electronics, and we further offer contract manufacturing services for non-electronic components, medical disposables, precision molded plastics, and production automation, test, and inspection equipment.

We further produce higher level and final assemblies and offer contract manufacturing organization (“CMO”) solutions which include the production of medical disposables and drug delivery devices, from precision molded plastics and cold chain management to drug integration.

Our design and manufacturing expertise coupled with robust processes and procedures help us ensure that we deliver the highest levels of quality, reliability, and service throughout the entire life cycle of our customers’ products.

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We are well recognized by customers and industry trade publications for our excellent quality, reliability, and innovative service.

Subsequent to June 30, 2024, on July 31, 2024, we completed the divestiture of GES, our automation, test and measurement business unit.

See Note 3 - Assets and Liabilities Held for Sale for more information on the GES divestiture.

Principles of Consolidation:

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Kimball Electronics has business units located in the United States, China, Mexico, Poland, Romania, and Thailand, and each of these business units qualify as operating segments.

In addition, GES has operations located in the United States, China, India, Japan, and Vietnam.

The GES operations qualify as a single operating segment with its group results regularly reviewed by our chief operating decision maker, which is our Chief Executive Officer.

Our operating segments meet the aggregation criteria under the current accounting guidance for segment reporting.

As of June 30, 2024, all of our operating segments provide contract manufacturing services, including engineering and supply chain support, for the production of electronic assemblies and other products including medical devices, medical disposables, precision molded plastics, and automation, test, and inspection equipment primarily in automotive, medical, and industrial applications, to the specifications and designs of our customers.

As of June 30, 2025, all of our operating segments provide contract manufacturing services, including engineering and supply chain support, for the production of electronic assemblies and other products including precision molded plastics drug delivery devices primarily in automotive, medical, and industrial applications, to the specifications and designs of our customers.

The nature of the products, the production process, the type of customers, and the methods used to distribute the products have similar characteristics across all our operating segments.

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All of our operating segments have similar long-term economic characteristics, and as such, have been aggregated into one reportable segment.

See Note 17 - Segment Reporting for more information.

Revenue Recognition:

We recognize revenue in accordance with the standard issued by the Financial Accounting Standards Board (“FASB”), Revenue from Contracts with Customers and all the related amendments.

Our revenue from contracts with customers is generated primarily from manufacturing services provided for the production of electronic assemblies, components, medical devices, medical disposables, precision molded plastics, and automation, test, and inspection equipment built to customers’ specifications.

Our revenue from contracts with customers is generated primarily from manufacturing services provided for the production of electronic assemblies, components, medical devices, medical disposables, and precision molded plastics built to customers’ specifications.

Our customer agreements are generally not for a definitive term but continue for the relevant product’s life cycle.

Typically, our customer agreements do not commit the customer to purchase our services until a purchase order is provided, which is generally short term in nature.

Customer purchase orders primarily have a single performance obligation.

Generally, the prices stated in the customer purchase orders are agreed upon prices for the manufactured product and do not vary over the

term of the order, and therefore, the majority of our contracts do not contain variable consideration.

Typically, our customer agreements do not commit the customer to purchase our services until a purchase order or a contractually binding forecast is provided, which are generally short term in nature.

Customer purchase orders and contractually binding forecasts primarily have a single performance obligation.

Generally, the prices stated in the customer purchase orders or committed to in contractually binding forecasts are agreed upon prices for the manufactured product and do not vary over the term of the order or the contractually binding forecast period, and therefore, the majority of our contracts do not contain variable consideration.

In limited circumstances, we may enter into a contract which contains minimum quantity thresholds to cover our capital costs, and we may offer our customer a rebate for specific volume thresholds or other incentives;

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Receivables are considered sold when they are transferred beyond the reach of Kimball Electronics and its creditors, the purchaser has the right to pledge or exchange the receivables, and we have surrendered control over the transferred receivables.

During fiscal years 2024, 2023, and 2022, we sold, without recourse, $ 410.0 million, $ 485.4 million, and $ 303.4 million of accounts receivable, respectively.

Factoring fees were $ 3.4 million, $ 4.8 million, and $ 1.6 million during fiscal years 2024, 2023, and 2022, respectively, and were included in Selling and Administrative Expenses on the Consolidated Statements of Income.

During fiscal year 2024, changes to the expected timing of payments from and risk of default for a customer resulted in the recording of an allowance for credit losses of $ 2.0 million in Selling and Administrative Expenses on our Consolidated Statements of Income.

During fiscal years 2025, 2024, and 2023, we sold $ 338.4 million, $ 410.0 million, and $ 485.4 million of accounts receivable, respectively.

Factoring fees were $ 2.3 million, $ 3.4 million, and $ 4.8 million during fiscal years 2025, 2024, and 2023, respectively.

Factoring fees are recorded in Non-operating income (expense), net on our Consolidated Statements of Income for the fiscal year ended June 30, 2025.

Prior to fiscal year 2025, factoring fees were recorded in Selling and Administrative Expenses.

Beginning in fiscal year 2025, we are also a party to a Receivables Purchase Agreement (the “RPA”) with a third-party banking institution for the sale of trade receivables generated from sales to certain customers, subject to acceptance by, and a funding commitment from, the bank that is a party to the RPA.

Receivables sold pursuant to the RPA are serviced by us.

Under the program, we sell our entire interest in certain receivables at the invoice amount less a discount.

Upon sale, these receivables are removed from the Consolidated Balance Sheets and cash received is presented as cash provided by operating activities in the Consolidated Statements of Cash Flows.

We are required to remit amounts collected as a servicer under the RPA on a weekly basis to the financial institution that purchased the receivables.

Our risks with respect to receivables we service include commercial disputes regarding such receivables and no greater than 5.0 % of sold and outstanding receivables in the event of customer insolvency.

In fiscal year 2025, under this program, we sold $ 19.4 million of receivables and incurred discount fees of $ 0.1 million, recorded in Non-operating income (expense), net on our Consolidated Statements of Income.

Receivables sold under the RPA and subject to our servicing that remained outstanding and uncollected as of June 30, 2025 were $ 19.4 million.

In limited circumstances, our China operation may receive banker’s acceptance drafts from customers as payment on account.

The banker’s acceptance drafts are non-interest bearing and primarily mature within six months from the origination date.

The Company has the ability to sell the drafts at a discount or transfer the drafts in settlement of current accounts payable prior to the scheduled maturity date.

There are no drafts outstanding at June 30, 2025 and 2024, respectively.

Drafts received and outstanding would be reflected in Receivables on the Consolidated Balance Sheets until the banker’s drafts are sold at a discount, transferred in settlement of current accounts payable, or cash is received at maturity.

Banker’s acceptance drafts sold at a discount or transferred in settlement of current accounts payable during fiscal year 2025 were $ 14.3 million.

No banker’s acceptance drafts were sold at a discount or transferred in settlement of current accounts payable during fiscal years 2024 and 2023.

In fiscal year 2024, changes to the expected timing of payments from and risk of default for a customer resulted in the recording of an allowance for credit losses in Selling and Administrative Expenses on our Consolidated Statements of Income.

Although the customer is not in bankruptcy and we will continue to pursue full recovery, an allowance was deemed necessary in consideration of the expected timing of payments and risk of default.

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Property, Equipment, and Depreciation:

Property and equipment are stated at cost less accumulated depreciation and depreciated over the estimated useful life of the assets using the straight-line method.

Property and equipment are stated at cost less accumulated depreciation and depreciated over the estimated useful life of the assets using the straight-line method for most assets and units of production method for certain fully dedicated machinery and equipment.

Generally, maintenance and repairs are expensed as incurred.

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In fiscal year 2024, we recognized $ 17.0 million of impairment with the decision to divest of GES.

See Note 3 - Assets and Liabilities Held for Sale for more information on the GES divestiture.

In addition, on November 4, 2024, the Company announced that its Board of Directors has approved a plan to cease operations at our Tampa facility, which concluded with the assets being held for sale at the end of the fiscal year.

No impairment was recorded on the Tampa assets as we deemed them recoverable.

See Note 3 - Sale of GES and Note 4 - Restructuring Activities , respectively, for more information on the GES divestiture and Tampa Closure.

Impairment of long-lived assets was not material during fiscal years 2024 and 2023.

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If the estimated fair value of the reporting unit is less than the carrying value, goodwill is written down to its estimated fair value.

To test for goodwill impairment, we use a combination of the Income Approach and the Market Approach.

See Note 7 - Goodwill and Other Intangible Assets for more information on Goodwill.

To test GES, our automation, test, and measurement business unit, for goodwill impairment in fiscal year 2024, we used a combination of the Income Approach and the Market Approach.

The discounted cash flow method (Income Approach) uses forecasted information based on management’s strategic plans and projections.

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In the Market Approach, fair value is determined using transactional evidence for similar publicly traded equity.

During fiscal year 2024, the Company made the decision to divest of GES, our automation, test and measurement business unit and committed to a plan to sell the business.

As a result, the business unit met the criteria to be classified as held for sale, and goodwill and asset impairment were recorded during the quarter.

See Note 3 - Assets and Liabilities Held for Sale for more information on goodwill and asset impairment and Note 6 - Goodwill and Other Intangible Assets of Notes to Condensed Consolidated Financial Statements for more information on Goodwill.

During fiscal year 2024, the Company made the decision to divest of GES and committed to a plan to sell the business.

As a result, the business unit met the criteria to be classified as held for sale, and goodwill and asset impairment were recorded.

See Note 3 - Sale of GES for more information on the sale of GES.

Other Intangible Assets:

Other Intangible Assets reported on the Consolidated Balance Sheets consist of capitalized software, customer relationships, technology, and trade name.

Other Intangible Assets reported on the Consolidated Balance Sheets consist of capitalized software.

Intangible assets are reviewed for impairment, and their remaining useful lives evaluated for revision, when events or circumstances indicate that the carrying value may not be recoverable over the remaining lives of the assets.

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Software maintenance, training, data conversion, and business process reengineering costs are expensed in the period in which they are incurred.

The Company leases certain office facilities, warehouse facilities and equipment under operating leases, in addition to land on which certain office and manufacturing facilities reside.

The Company leases certain office facilities, manufacturing facilities, warehouse facilities, and equipment under operating leases, in addition to land on which certain office and manufacturing facilities reside.

These operating leases expire from fiscal year 2027 to 2056.

Operating lease costs and cash payments for operating leases are immaterial to the Consolidated Balance Sheets, Consolidated Statements of Income and our Consolidated Statements of Cash Flows.

The Company determines if a contract is or contains a lease at inception.

Lease assets and liabilities are initially recognized based on the present value of lease payments over the lease term calculated using our estimated incremental borrowing rate, unless the implicit rate is readily determinable.

The estimated incremental borrowing rate is the rate of interest we would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms.

Lease terms include options to extend or terminate the lease when it is reasonably certain that those options will be exercised.

See Note 21 - Leases for more information on leases.

Research and Development:

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We recognize interest and penalties related to unrecognized tax benefits in Provision for Income Taxes on the Consolidated Statements of Income.

See Note 11 - Income Taxes of Notes to Consolidated Financial Statements for more information on income taxes.

See Note 12 - Income Taxes for more information.

Concentrations of Credit Risk:

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Off-Balance Sheet Risk:

Off-balance sheet arrangements are limited to standby letters of credit entered into in the normal course of business as described in Note 7 - Commitments and Contingent Liabilities of Notes to Consolidated Financial Statements.

Other General Income:

Other General Income in fiscal years 2024, 2023, and 2022 consisted of $ 0.9 million, $ 0.2 million, and $ 1.4 million, respectively, resulting from payments received related to class action lawsuits in which Kimball Electronics was a class member.

These lawsuits alleged that certain suppliers to the EMS industry conspired over a number of years to raise and fix the prices of electronic components, resulting in overcharges to purchasers of those components.

Restructuring:

We recorded restructuring expenses of $ 2.4 million in fiscal year 2024 for employee-related costs as we undertook restructuring efforts to align our cost structure with reduced end market demand levels, including resizing our workforce and taking specific cost actions.

We expect to continue executing the restructuring efforts and estimate between $ 3.0 million and $ 4.0 million of additional pre-tax restructuring charges, most of which we expect in the first half of fiscal year 2025.

There were no restructuring charges in fiscal year 2023 or fiscal year 2022.

Off-balance sheet arrangements are limited to standby letters of credit entered into in the normal course of business as described in Note 8 - Commitments and Contingent Liabilities .

Non-operating Income and Expense:

Non-operating income (expense), net includes the impact of such items as foreign currency rate movements and related derivative gain or loss, fair value adjustments on supplemental employee retirement plan (“SERP”) investments, government subsidies, credit facility fees, bank charges, and other miscellaneous non-operating income and expense items that are not directly related to operations.

Non-operating income (expense), net includes the impact of such items as foreign currency rate movements and related derivative gain or loss, fair value adjustments on supplemental employee retirement plan (“SERP”) investments, government subsidies, credit facility fees, factoring fees, bank charges, and other miscellaneous non-operating income and expense items that are not directly related to operations.

Prior to fiscal year 2025, factoring fees were recorded in Selling and Administrative Expenses on our Consolidated Statements of Income.

The gain (loss) on SERP investments is offset by a change in the SERP liability that is recognized in Selling and Administrative Expense.

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Gain (loss) on SERP investments 614 680 701

Factoring fees/AR program discounts ( 2,415 ) — —

Credit facilities fees and bank charges

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Cash receipts and cash payments related to derivative instruments are recorded in the same category as the cash flows from the items being hedged on the Consolidated Statements of Cash Flows.

See Note 14 - Derivative Instruments of Notes to Consolidated Financial Statements for more information on derivative instruments and hedging activities.

See Note 15 - Derivative Instruments for more information on derivative instruments and hedging activities.

Stock-Based Compensation:

As described in Note 10 - Stock Compensation Plans of Notes to Consolidated Financial Statements, the Company maintains the 2023 Equity Incentive Plan, which allows for the issuance of incentive stock options, stock appreciation rights, restricted shares, unrestricted shares, restricted share units, or performance shares and performance units for grant to officers and other key employees, and to members of the Board of Directors who are not employees.

As described in Note 11 - Stock Compensation Plans , the Company maintains the 2023 Equity Incentive Plan, which allows for the issuance of incentive stock options, stock appreciation rights, restricted shares, unrestricted shares, restricted share units, or performance shares and performance units for grant to officers and other key employees, and to members of the Board of Directors who are not employees.

The Company also maintains the Kimball Electronics, Inc.

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New Accounting Standards:

Not Yet Adopted:

Adopted in Fiscal Year 2025:

In November 2023, the Financial Accounting Standards Board (“FASB”) issued guidance on Improvements to Reportable Segment Disclosures, requiring additional, more detailed information about a reportable segment.

The guidance is effective for fiscal years beginning after December 15, 2023 and for interim periods beginning after December 15, 2024.

Early adoption is permitted.

The Company adopted the standard for the year ended June 30, 2025.

See Note 1 7 - Segment Reporting for more information.

Not Yet Adopted:

In November 2024, the FASB issued guidance on Expense Disaggregation Disclosures, requiring more disclosure about the types of expenses presented in our expense captions.

The guidance is effective for fiscal years beginning after December 15, 2026 and for interim periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted, and the guidance can be applied prospectively or retrospectively.

We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.

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Early adoption is permitted.

We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.

The Company plans to adopt the standard for the year ended June 30, 2026 and will include any additional disclosures in its Annual Report on Form 10-K for the fiscal year.

Note 2 Revenue from Contracts with Customers

Our revenue from contracts with customers is generated primarily from manufacturing services provided for the production of electronic assemblies, electronic and non-electronic components, medical devices, medical disposables, precision molded plastics, and automation, test, and inspection equipment in automotive, medical, and industrial applications, to the specifications and designs of our customers.

Beginning in fiscal year 2023, the Company changed its presentation of revenue for the industrial and public safety end market verticals by combining them into the industrial end market vertical.

Beginning in fiscal year 2024, the Company changed its presentation of revenue for miscellaneous sales previously included in Other to include in the respective customers’ end market verticals.

Prior year periods have been recast to conform to the current year presentation.

Our revenue from contracts with customers is generated primarily from manufacturing services provided for the production of electronic assemblies, electronic and non-electronic components, medical devices, medical disposables, and precision molded plastics in automotive, medical, and industrial applications, to the specifications and designs of our customers.

The following table disaggregates our revenue by end market vertical for fiscal years 2025, 2024, and 2023:

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Automotive $ 737.9 $ 826.4 $ 843.8

$ 826.4 $ 843.8 $ 590.5

425.7 500.7 394.9

Medical 396.2 425.7 500.7

Industrial 352.6 462.4 478.9

462.4 478.9 364.1

Total net sales $ 1,486.7 $ 1,714.5 $ 1,823.4

(1) For the fiscal years ended June 30, 2023 and 2022, respectively, $ 23.7 million and $ 8.3 million of the Automotive net sales were previously categorized as Other.

(2) For the fiscal years ended June 30, 2023 and 2022, respectively, $ 6.7 million and $ 3.2 million of the Medical net sales were previously categorized as Other.

(3) For the fiscal years ended June 30, 2023 and 2022, respectively, $ 4.3 million and $ 5.9 million of the Industrial net sales were previously categorized as Other.

For fiscal years 2025, 2024, and 2023, approximately 98 %, 96 %, and 95 % of our net sales, respectively, were recognized over time as manufacturing services were performed under a customer contract on a product with no alternative use and we have an enforceable right to payment for performance completed to date.

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These payments are recognized as contract liabilities until the performance obligations are completed and are included in Advances from customers, if inventory related, and Accrued expenses, if not inventory related, on the Consolidated Balance Sheets which amounted to $ 41.5 million and $ 43.1 million as of June 30, 2025 and 2024, respectively.

Our performance obligations are short term in nature and therefore our contract liabilities are all expected to be settled within twelve months.

We also have deposits associated with inventory purchases classified as long term.

See Note 4 - Inventori es of Notes to Consolidated Financial Statements for further discussion.

Note 3 Assets and Liabilities Held for Sale

During fiscal year 2024, the Company made the decision to divest GES, our automation, test and measurement business unit (“disposal group”), and committed to a plan to sell the business, allowing for increased focus and support for the Company’s EMS operations.

As a result, the disposal group business has met the criteria to be classified as held for sale.

Accordingly, the Company classified the assets and liabilities of the disposal group as held for sale during the third quarter of fiscal year 2024.

The disposal group did not qualify as discontinued operations as it did not represent a strategic shift that will have a major effect on our operations and financial results.

Once the disposal group was classified as held for sale, it was reported at the lower of its carrying value or fair value less costs to sell during the fiscal year ended June 30, 2024.

The carrying value exceeded the fair value less costs to sell, and the Company recognized impairment charges of $ 5.8 million and $ 17.0 million on goodwill and assets held for sale, respectively.

The Company ceased recording depreciation and amortization on the applicable assets of the disposal group.

We assess goodwill for impairment at the reporting unit level annually or when conditions indicate an earlier review is necessary.

In connection with the preparation of our financial statements for the quarter ended March 31, 2024, we completed an impairment analysis for the goodwill recorded in the reporting unit due to the more-likely-than-not expectation of selling the reporting unit.

We determined the reporting unit’s carrying value was more than its fair value by an amount greater than the $ 5.8 million carrying amount of goodwill and thus was fully impaired.

See Note 6 - Goodwill and Other Intangible Assets of Notes to Condensed Consolidated Financial Statements for more information on Goodwill.

The major classes of assets and liabilities held for sale consisted of the following:

(Amounts in Thousands) June 30,

Assets held for sale:

Receivables, net $ 12,472

Inventories 4,395

Prepaid expenses and other current assets 1,237

Property and Equipment, net 5,861

Other Intangible Assets, net 8,010

Other Assets, net

Valuation Allowance ( 17,040 )

Total Assets held for sale $ 27,587

Liabilities held for sale:

Accounts payable $ 4,376

Advances from customers —

Accrued expenses 2,428

Other long-term liabilities 1,790

Total Liabilities held for sale $ 8,594

In the table above, Other assets, net includes $ 11.1 million of deferred tax assets and Other long-term liabilities includes $ 1.2 million of deferred tax liabilities.

Other than deposits associated with inventory purchases classified as long term, our performance obligations are generally short term in nature and therefore our contract liabilities are all expected to be settled within twelve months.

See Note 5 - Inventories for further discussion.

Note 3 Sale of GES

Following approval by our Board of Directors, on July 31, 2024, we entered into a definitive agreement and closed on the sale of 100% of the equity interests in GES to Averna Test Systems, Inc., resulting in cash proceeds after costs to sell of $ 18.5 million.

The pre-tax gain recognized on the sale in fiscal year 2025 was $ 2.4 million.

In fiscal year 2024, following the Company’s decision to divest of GES, we classified the disposal group as held for sale and recognized $ 22.9 million in pre-tax impairment charges.

The following table summarizes net sales and income (loss) before taxes on income for the disposal group:

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$ 2,112 $ ( 23,518 ) $ 5,467

(1) Includes goodwill impairment of $ 5.8 million and asset impairment of $ 17.0 million for the fiscal year ended June 30, 2024.

Also includes allocated corporate overhead expenses.

Following approval by our Board of Directors, on July 31, 2024, we entered into a definitive agreement and closed on the sale of 100% of the equity interests in GES to Averna Test Systems, Inc.

for net cash proceeds of $ 21 million, subject to customary purchase price adjustments in fiscal year 2025.

As a result of impairment already recognized in fiscal year 2024, we do not expect a material gain or loss from the transaction.

At June 30, 2024, GES included approximately 400 employees and operations in California, China, India, Japan, and Vietnam.

(1) Includes gain on sale of $ 2.4 million in the year ended June 30, 2025 and $ 22.9 million of pre-tax impairment charges in the year ended June 30, 2024.

Note 4 Restructuring Activities

During fiscal years 2025 and 2024, we undertook restructuring efforts to align our cost structure with reduced end market demand levels, including resizing our workforce and taking specific cost actions, and recorded restructuring expense of $ 5.7 million and $ 2.4 million, respectively, which were primarily employee-related costs.

The cumulative amount incurred since inception of these efforts beginning in fiscal year 2024 through June 30, 2025 was $ 8.1 million.

The restructuring charges are considered substantially complete at June 30, 2025.

We do not expect significant additional restructuring charges relating to these previously announced restructuring efforts.

Additionally, on November 4, 2024, the Company announced that its Board of Directors approved a plan to cease operations at our Tampa facility (“Tampa Closure Plan”).

The decision was made to leverage capacity within our global footprint and streamline the operating structure.

At June 30, 2025, we revised our estimated restructuring charges that we expect to incur to approximately $ 5.5 million to $ 6.5 million in total exit costs, including approximately $ 4.5 million in employee termination benefits and $ 1.0 million to $ 2.0 million in logistical costs to transfer and validate programs at our other facilities.

These costs are predominantly cash expenditures.

We expect to incur between $ 0.5 million and $ 1.0 million during fiscal year 2026.

We recorded restructuring expense of $ 5.3 million in fiscal year 2025 for the Tampa Closure Plan.

Accrued restructuring is recorded in Accrued expenses in the Consolidated Balance Sheets.

The changes in the Company’s accrued restructuring costs under the Tampa Closure Plan were as follows:

(Amounts in Thousands) Severance and Termination Benefits Other Exit Costs Total

Balance at June 30, 2024

Restructuring charges 4,176 1,085 5,261

Payments ( 2,158 ) ( 1,085 ) ( 3,243 )

Non-cash activity — — —

Balance at June 30, 2025

$ 2,018 $ — $ 2,018

As Tampa’s operations ceased in the fourth quarter of fiscal year 2025, their land, building, and certain equipment met the criteria to be classified as Assets Held for Sale at June 30, 2025.

The total carrying value of $ 6.9 million includes land of $ 5.1 million, buildings of $ 1.5 million, and machinery and equipment of $ 0.3 million.

These assets are reflected as Assets held for sale in our Consolidated Balance Sheets, and we ceased recording depreciation and amortization on the applicable assets.

We expect the Assets Held for Sale to be disposed of in fiscal year 2026.

We anticipate the proceeds will exceed the combined amount of the total expected restructuring costs and the carrying value of the Assets Held for Sale, and as such no impairment was recorded.

Note 5 Inventories

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Total inventory $ 273,500 $ 338,116

Additionally, we have raw materials inventory totaling $ 42.8 million classified as long-term included in Other Assets, net in our Consolidated Balance Sheets.

This inventory is associated with a customer who is remediating a recall and we do not expect the inventory to be consumed within the next twelve months.

We have received deposits totaling $ 38.7 million from this customer related to this inventory, which is included in Other long-term liabilities in our Consolidated Balance Sheets.

At June 30, 2023, we had no inventory or customer deposits classified as long-term.

Additionally, as of June 30, 2025 and 2024, we have raw materials inventory totaling $ 39.4 million and $ 42.8 million, respectively, classified as long-term included in Other Assets, net in our Consolidated Balance Sheets.

A majority of this inventory is associated with a customer who is remediating a recall and we do not expect the inventory to be consumed within the next twelve months.

The remaining inventory classified as long term is primarily related to other excess raw materials inventory we do not expect to consume or sell within twelve months.

For a majority of these, we have arrangements with our customers to pay us carrying costs.

As of June 30, 2025 and 2024, we have received deposits for long-term inventory totaling $ 27.0 million and $ 38.7 million, respectively, which is included in Other long-term liabilities in our Consolidated Balance Sheets.

Note 6 Property and Equipment

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Machinery and equipment

417,017 402,100

Machinery and equipment - fully dedicated 18,079 —

Construction-in-progress 34,006 38,937

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Property and equipment, net $ 264,804 $ 269,659

The useful lives used in computing depreciation are based on estimated service lives for classes of property, as follows:

The useful lives used in computing straight-line depreciation are based on estimated service lives for classes of property, as follows:

Buildings and improvements 5 to 40

Machinery and equipment 3 to 11

Depreciation of property and equipment totaled $ 35.7 million for fiscal year 2024, $ 28.9 million for fiscal year 2023, and $ 26.0 million for fiscal year 2022.

Effective April 1, 2025, the Company implemented a new class of asset, fully dedicated machinery and equipment, which is depreciated using the units of production method.

As of June 30, 2025, the net book value of the equipment was $ 15.3 million.

This equipment is highly customized for specific customer programs and has substantially no value other than production for that program.

The units of production method more accurately reflects the pattern of usage and expected benefits of these assets than other depreciation methods.

Depreciation of property and equipment totaled $ 36.0 million, $ 35.7 million, and $ 28.9 million for each of the three years in the period ended June 30, 2025, respectively.

Note 7 Goodwill and Other Intangible Assets

A summary of goodwill is as follows, amounts as of June 30, 2024 exclude the amounts classified as held for sale:

A summary of goodwill is as follows:

(Amounts in Thousands)

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Goodwill, net $ 6,191

Impairment recorded ( 5,820 )

Goodwill classified as held for sale ( 13,745 )

Accumulated impairment classified as held for sale 13,745

Balance as of June 30, 2025

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Goodwill, net $ 6,191

A summary of other intangible assets subject to amortization is as follows, amounts as of June 30, 2024 exclude the amounts classified as held for sale:

Other Intangible Assets includes capitalized software.

A summary of the capitalized software’s cost and accumulated amortization is as follows:

June 30, 2025 June 30, 2024

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Capitalized Software $ 30,654 $ ( 28,227 ) $ 2,427 $ 30,294 $ ( 27,300 ) $ 2,994

Customer Relationships — — — 8,618 ( 3,524 ) 5,094

Technology — — — 5,060 ( 4,816 ) 244

Trade Name — — — 6,575 ( 3,060 ) 3,515

Other Intangible Assets $ 30,294 $ ( 27,300 ) $ 2,994 $ 51,120 $ ( 38,785 ) $ 12,335

The estimated useful life of internal-use software ranges from 3 to 10 years .

During fiscal years 2025, 2024, and 2023, amortization expense of other intangible assets was, in millions, $ 1.0 , $ 2.3 , and $ 3.5 , respectively.

Amortization expense in future periods is expected to be, in millions, $ 0.7 , $ 0.5 , $ 0.4 , $ 0.2 , and $ 0.2 in the five years ending June 30, 2030, and $ 0.4 thereafter.

The estimated useful life of internal-use software ranges from 3 to 10 years.

The amortization period for the customer relationships, technology, and trade name intangible assets is 15 years, 5 years, and 10 years, respectively.

We ceased amortization on the intangible assets upon meeting the held for sale classification.

See Note 3 - Assets and Liabilities Held for Sale of Notes to Condensed Consolidated Financial Statements for additional information.

Fiscal years 2024 and 2023 included the full year’s amortization on customer relationships, technology, and trade name intangible assets associated with GES.

See Note 3 - Sale of GES for additional information.

We have no intangible assets with indefinite useful lives which are not subject to amortization.

Note 8 Commitments and Contingent Liabilities

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Dollar Equivalents) June 30, 2025 June 30, 2025 June 30, 2024

Primary credit facility (1)

Primary credit facility, revolving (1)

$ 249.6 $ 50.0 $ 285.5

Primary credit facility, term (1)

Secondary credit facility (2)

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Total credit facilities $ 284.7 147.5 294.8

Unamortized deferred debt financing fees $ ( 0.4 ) $ —

Total long-term debt $ 147.1 $ 294.8

current portion ( 17.4 ) ( 59.8 )

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$ 129.7 $ 235.0

(1) The Company maintains a U.S.

primary credit facility (the “primary credit facility”) among the Company, the lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent, and Bank of America, N.A., as Documentation Agent, scheduled to mature May 4, 2027.

The primary credit facility provides for $ 300 million in borrowings, with an option to increase the amount available for borrowing to $ 450 million at the Company’s request, subject to the consent of each lender participating in such increase.

This facility is maintained for working capital and general corporate purposes of the Company.

A commitment fee is payable on the unused portion of the credit facility which was immaterial to our operating results in fiscal years 2024, 2023, and 2022.

The commitment fee on the unused portion of principal amount of the credit facility is payable at a rate that ranges from 10.0 to 25.0 basis points per annum as determined by the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA, as defined in the primary credit facility.

Types of borrowings available on the primary credit facility include revolving loans, multi-currency term loans, and swingline loans.

The interest rate on borrowings is dependent on the type and currencies of borrowings and will be one of the following options:

(1) The Company maintained a U.S.

primary credit facility which was scheduled to mature on May 4, 2027 that provided for $300 million in borrowings, and the Company had utilized this facility for revolving borrowings.

On December 20, 2024, the Company entered into an amended and restated credit agreement (the “restated primary credit facility”) among the Company, the lenders party thereto, and JPMorgan Chase Bank, N.

A., as Administrative Agent, and Bank of America, N.A., as Documentation Agent.

The restated primary credit facility adds a term loan borrowing facility that provides for term loan borrowings (“term borrowings”) of $ 100 million repayable in scheduled quarterly installments, scheduled to mature December 20, 2029.

The terms for the revolving borrowings remain largely unchanged with a maturity date of May 4, 2027 and continue to provide for $ 300 million in borrowings, with an option to increase the amount available for borrowing to $ 450 million upon request, subject to the consent of each lender participating in such increase.

This facility is maintained for working capital and general corporate purposes of the Company, and pursuant to the restated primary credit facility, the Company is permitted to use the proceeds to refinance existing indebtedness.

A commitment fee is payable on the unused portion of the credit facility at a rate that ranges from 10.0 to 25.0 basis points per annum as determined by the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA, as defined in the

restated primary credit facility.

Types of borrowings available on the restated primary credit facility include term loans, revolving loans, multi-currency term loans, and swingline loans.

At June 30, 2025, all outstanding borrowings under the primary credit facility were Term Benchmark borrowings denominated in U.S.

The interest rate on borrowings is dependent on the class, type and currencies of borrowings and will be one of the following options:

• any Term Benchmark borrowing denominated in U.S.

Dollars will utilize the Secured Overnight Financing Rate (“SOFR”), which is a rate per annum equal to the secured overnight financing rate for such business day published by the SOFR Administrator, the Federal Reserve Bank of New York, on the immediately succeeding business day, plus the Revolving Commitment Term Benchmark spread which can range from 100.0 to 175.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA;

• any Term Benchmark borrowing denominated in Euros will utilize the Euro Interbank Offered Rate (“EURIBOR”) in effect two target days prior to the advance (adjusted upwards to reflect bank reserve costs) for such interest period as defined in the agreement, plus the Revolving Commitment Term Benchmark spread which can range from 100.0 to 175.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA;

Dollars will utilize the Secured Overnight Financing Rate (“SOFR”) for one, three, or six-month tenors as elected, which is a rate per annum equal to the secured overnight financing rate for such business day published by the SOFR Administrator, the Federal Reserve Bank of New York, on the immediately succeeding business day, plus ten hundredths percent ( 0.10 %), plus the Revolving Commitment Term Benchmark spread or Term Loan Benchmark spread which can range from 100.0 to 175.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA;

• any Term Benchmark borrowing denominated in Euros will utilize the Euro Interbank Offered Rate (“EURIBOR”) in effect two target days prior to the advance (adjusted upwards to reflect bank reserve costs) for such interest period as defined in the agreement, plus the Revolving Commitment Term Benchmark spread or Term Loan Term Benchmark spread which can range from 100.0 to 175.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA;

• the Alternate Base Rate (“ABR”), which is defined as the highest of the fluctuating rate per annum equal to the higher of:

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last quoted by the Wall Street Journal, and if this is ceased to be quoted, the highest bank prime loan rate or similar loan rate quoted by the Federal Reserve Board;

1/2 of 1% per annum above the Federal Funds Effective Rate (as defined under the primary credit facility);

1 % per annum above the Adjusted SOFR Rate (as defined under the primary credit facility);

1/2 of 1% per annum above the Federal Reserve Bank of New York (NYFRB) Rate (as defined under the restated primary credit facility);

1 % per annum above the Adjusted SOFR Rate (as defined under the restated primary credit facility);

plus the Revolving Commitment ABR spread which can range from 0.0 to 75.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA.

The Company’s financial covenants under the primary credit facility require:

Under the restated primary credit facility, the ABR Spread and Benchmark Spread for term borrowings are the same as for revolving borrowings.

The Company’s financial covenants under the amended primary credit facility require:

• a ratio of consolidated total indebtedness minus unencumbered U.S.

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• an interest coverage ratio, defined as that ratio of consolidated EBITDA for such period to cash interest expense for such period, for any period of four consecutive fiscal quarters, to not be less than 3.5 to 1.0.

The Company had $ 0.4 million in letters of credit contingently committed against the primary credit facility at both June 30, 2024 and 2023.

(2) The Company amended its 364-day multi-currency revolving credit facility agreement on January 5, 2024 (the “secondary credit facility”), which allows for borrowings up to $ 100.0 million, among the Company, as borrower, certain subsidiaries of the Company as guarantors, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and Bank of America, N.A., as Documentation Agent.

The secondary credit facility has a maturity date of January 3, 2025.

The proceeds of the loans are to be used for working capital and general corporate purposes of the Company.

A commitment fee on the unused portion of principal amount of this secondary credit facility is payable at 30.0 basis points per annum.

The interest rate on borrowings is dependent on the type of borrowings and will be one of the following options:

• any Term Benchmark borrowing denominated in U.S.

Dollars will utilize the Secured Overnight Financing Rate (“SOFR”), which is a rate per annum equal to the secured overnight financing rate for such business day published by the SOFR Administrator, the Federal Reserve Bank of New York, on the immediately succeeding business day, plus a Revolving Commitment Term Benchmark spread of 175.0 basis points;

• the Alternate Base Rate (“ABR”), which is defined as the highest of the fluctuating rate per annum equal to the higher of:

Prime Rate in the U.S.

last quoted by the Wall Street Journal, and if this is ceased to be quoted, the highest bank prime loan rate or similar loan rate quoted by the Federal Reserve Board;

1/2 of 1% per annum above the Federal Funds Effective Rate (as defined under the primary credit facility);

1 % per annum above the Adjusted SOFR Rate (as defined under the primary credit facility);

plus a Revolving Commitment ABR spread of 75.0 basis points.

The Company’s financial covenants under this secondary credit facility are the same as the financial covenants for its primary credit facility.

The Company had $ 0.4 million in letters of credit contingently committed against the primary credit facility at both June 30, 2025 and June 30, 2024.

(2) Concurrently on December 20, 2024 with its entry into the restated primary credit facility, the Company terminated its 364-day multi-currency revolving credit facility agreement (the “secondary credit facility”), which was entered into on January 5, 2024 and originally scheduled to mature on January 3, 2025.

The secondary credit facility allowed for borrowings up to $ 100.0 million, and the Company had no borrowings on the secondary credit facility at June 30, 2024.

(3) The Company also maintains foreign credit facilities for working capital and general corporate purposes at specific foreign locations rather than utilizing funding from intercompany sources.

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(4) The Company maintains a foreign credit facility for its operation in Thailand which allows for borrowings of up to $ 10.1 million.

(5) The Company entered into a foreign credit facility for its EMS operation in China with a new lender during the current fiscal year which allows for borrowings up to 50 million RMB (approximately $ 6.9 million at June 30, 2024 exchange rates) and canceled the prior credit facility which allowed for borrowings up to $ 7.5 million.

(6) The Company also maintains an uncommitted revolving credit facility for our Netherlands subsidiary.

(5) The Company no longer maintains the foreign credit facility for its operation in China .

(6) The Company maintains an uncommitted revolving credit facility for our Netherlands subsidiary.

The Netherlands credit facility allows for borrowings of up to 9.2 million Euro (approximately $ 10.8 million at June 30, 2025 exchange rates), which borrowings can be made in Euro, U.S.

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Interest on borrowing under this facility is charged at a rate of interest dependent on the denomination of the currency borrowed.

(7) The Company entered into a foreign credit facility for its operation in Poland which allows for borrowings up to 5.0 million Euro (approximately $ 5.4 million at June 30, 2024 exchange rates).

(8) The Company entered into a foreign credit facility for its operation in Vietnam which allows for borrowings up to $ 5.0 million.

(7) The Company maintains a foreign credit facility for its operation in Poland which allows for borrowings up to 10.0 million Euro (approximately $ 11.7 million at June 30, 2025 exchange rates).

(8) As a result of the GES divestiture that occurred on July 31, 2024, the Company no longer has the Vietnam credit facility, which allowed for borrowings up to $ 5.0 million.

(9) The amount of Long-term debt under credit facilities, less current maturities reflects the borrowings on the primary credit facility that the Company intends, and has the ability, to refinance for a period longer than twelve months.

The primary credit facility matures on May 4, 2027.

The weighted-average interest rate on borrowings outstanding under the credit facilities at both June 30, 2024 and June 30, 2023 were 6.8 %.

The revolving borrowings on the primary credit facility matures on May 4, 2027.

As of June 30, 2025, the contractual maturities of the term borrowings on the primary credit facility were as follows:

(Amounts in Millions) Contractual Maturities

Thereafter 70.00

Total $ 97.50

The weighted-average interest rate on borrowings outstanding under the credit facilities at June 30, 2025 and June 30, 2024 were 5.9 % and 6.8 %, respectively.

Capitalized interest expense was immaterial during fiscal years 2025, 2024, and 2023.

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As of June 30, 2024, total obligations under these plans were $ 7.0 million of which $ 6.2 million were long term and $ 0.8 million were short term.

Net periodic benefit costs were not material for the twelve months ended June 30, 2024 and 2023.

Net periodic benefit costs were not material for the fiscal years ended June 30, 2025, 2024, and 2023.

Note 11 Stock Compensation Plans

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Performance Shares:

We made long-term performance share grants to officers and other key employees.

We made long-term performance share grants to leadership team members and other key employees.

The Talent, Culture, and Compensation Committee of the Board approved these annual performance share grants.

Grants cliff vest at the third anniversary of the award date.

Under these grants, a number of shares will be awarded to each participant based upon a combination of the Company’s profitability based on its operating income over the performance period as defined in the Company’s operating business plans for the applicable fiscal years and the Company’s growth based on a comparison of its three -year revenue compounded annual growth rate (“CAGR”) with the Electronics Manufacturing Services Industry’s three-year revenue CAGR.

The number of shares issued will be less than the targeted shares issuable if the Company does not reach 100 % of one or both of the above-

mentioned performance metrics, and could be zero if the Company does not reach the required minimum thresholds of either metric.

Under the awards granted to leadership team members, a number of shares will be issued to each participant based on the Company’s economic profit for fiscal years 2026 and 2027 as compared to the Board approved plan.

The number of shares issued could be zero if minimum thresholds are not met up to a maximum of 200 %.

Under the awards granted to key employees, a number of shares will be awarded to each participant based upon a combination of the Company’s profitability based on its operating income over the performance period as defined in the Company’s operating business plans for the applicable fiscal years and the Company’s growth based on a comparison of its three -year revenue compounded annual growth rate (“CAGR”) with the Electronics Manufacturing Services Industry’s three-year revenue CAGR.

The number of shares issued will be less than the targeted shares issuable if the Company does not reach 100 % of one or both of the above-mentioned performance metrics, and could be zero if the Company does not reach the required minimum thresholds of both metrics.

The number of shares issued will exceed the number of targeted issuable shares granted (up to a maximum of 125 %) if the Company exceeds 100 % of one or both of the above-mentioned incentive metrics.

The Company recognizes expense based on management’s expectation of achievement of the specific performance metrics monitored throughout the service period of the awards.

The Talent, Culture, and Compensation Committee of the Board approved an additional long-term performance share grant of 35,033 shares to a key employee in the second quarter of fiscal year 2024.

Any awards will vest over a 5 -year performance cycle, with one-third of the interest in the shares vesting after fiscal year 2026, another one-third after fiscal year 2027, and the final one-third after fiscal year 2028.

The vesting of the performance share awards could range from 0 % to 100 % of the targeted issuable shares granted, dependent on the achievement of specific non-financial performance metrics.

The Company recognizes expense, for both leadership team and key employee awards, based on management’s expectation of achievement of the specific performance metrics monitored throughout the service period of the awards.

If a participant is not employed on the date shares are issued, the performance share award is forfeited, except in the case of a Qualifying Termination (a termination of service due to death, Disability, or Retirement), as defined by the Plan.

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Total Shareholder Return Performance Shares:

Separate from the performance shares described above, total shareholder return (“TSR”) performance shares were granted to our CEO during fiscal year 2023.

This grant was approved by the Talent, Culture, and Compensation Committee of the Board.

The participant will earn from 0 % to 100 % of the grant based on the total shareholder return ranking of the Company compared to the performance peer group at the end of the three -year performance period.

TSR performance shares are expensed over the contractual vesting period as earned.

The shares will vest on March 1, 2026.

If the employment of a holder of TSR performance shares terminates before the TSR performance shares have vested for any reason other than death, retirement, or total permanent disability, the TSR performance shares will be forfeited.

During fiscal year 2023, the Company granted 42,626 TSR performance shares at an average grant date fair value of $ 16.88 for a total fair value of $ 0.7 million.

The grant date fair value of the TSR performance share grants was calculated using a Monte Carlo simulation, with the assistance of a third-party valuation specialist.

The Talent, Culture, and Compensation Committee of the Board approved total shareholder return awards granted to leadership team members during fiscal year 2025 based on the Company’s relative total shareholder return (rTSR) for the performance period as compared to a group of peer companies selected by the Talent, Culture, and Compensation Committee of the Board.

The number of shares issued could be zero if minimum thresholds are not met up to a maximum of 200 %.

No TSR performance shares were awarded during fiscal year 2024.

A summary of the Company’s total shareholder return performance share activity during fiscal year 2025 is presented below:

of Shares Weighted Average

Total shareholder return performance shares outstanding at July 1, 2024 42,626 $ 16.88

Granted 62,203 $ 27.36

Forfeited ( 3,412 ) $ 27.36

Total shareholder return performance shares outstanding at June 30, 2025 101,417 $ 22.96

As of June 30, 2025, there was approximately $ 1.4 million of unrecognized compensation cost related to total shareholder return performance shares.

That cost is expected to be recognized over performance periods ending March 2026 through August 2027, with a weighted average vesting period of 1.5 years.

The fair value of total shareholder return performance shares is based on the grant date fair value calculated using a Monte Carlo simulation, with the assistance of a third-party valuation specialist.

No shares vested during fiscal years 2025, 2024, and 2023.

Unrestricted Share Grants:

Unrestricted shares were granted to key employees and non-employee members of the Board as consideration for services rendered.

Unrestricted shares were granted to non-employee members of the Board as consideration for services rendered.

Unrestricted share grants do not have vesting periods, holding periods, restrictions on sale, or other restrictions.

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The contractual life of the restricted shares is three years , with one-third of the interest in the restricted shares vested after year one of the grant, another one-third after year two of the grant, and the final one-third after year three of the grant.

Additional restricted share grants were approved by the Talent, Culture, and Compensation Committee of the Board and 23,356 shares were granted to a key employee in the second quarter of fiscal year 2024.

The awards will vest over a 5 -year service period, with one-third of the interest in the shares vesting after fiscal year 2026, another one-third after fiscal year 2027, and the final one-third after fiscal year 2028.

Restricted shares are expensed over the contractual vesting period as earned.

If a participant is not employed on the date shares are issued, the restricted share award is forfeited, except in the case of a Qualifying Termination (a termination of service due to death, Disability, or Retirement), as defined by the Plan.

During fiscal years 2024 and 2023, the Company granted restricted shares to officers and other key employees for a total fair value of $ 2.8 million and $ 1.9 million.

During fiscal years 2025, 2024, 2023 the Company granted restricted shares to officers and other key employees for a total fair value of $ 2.9 million, $ 2.8 million, and $ 1.9 million.

of Shares Weighted Average

Restricted shares outstanding at July 1, 2024 137,283 $ 26.91

60,312 $ 24.17

Granted 154,792 $ 18.43

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Restricted shares outstanding at June 30, 2025 232,617 $ 21.63

137,283 $ 26.91

As of June 30, 2025, there was approximately $ 2.0 million of unrecognized compensation cost related to restricted shares.

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Note 12 Income Taxes

On July 4, 2025, the One Big Beautiful Bill Act (“2025 U.S.

tax reform”) was enacted into law.

The 2025 U.S.

Tax reform contains several key tax laws, including extensions and modifications of the Tax Cuts and Jobs Act.

In accordance with ASC 740, Income Taxes, the Company is required to recognize the effect of the tax law changes in the period of enactment, such as remeasuring the estimated U.S.

deferred tax assets and liabilities, as well as potential impacts to previously existing valuation allowances.

The legislation has multiple effective dates, with certain provisions effective in fiscal year 2026 and others implemented through fiscal year 2028.

The Company is in the process of assessing the impacts from the 2025 U.S.

Tax Cuts and Jobs Act (“Tax Reform”) was enacted into law on December 22, 2017, making broad and complex changes to the U.S.

Tax Reform required a one-time transition tax on certain unremitted earnings of foreign subsidiaries that is payable over an eight-year period.

As of June 30, 2024 and 2023, the remaining provision recorded for the one-time deemed repatriation tax were $ 5.9 million and $ 7.8 million, respectively, payable through fiscal year 2026, with the long-term portion recorded in Long-term income taxes payable on the Consolidated Balance Sheets.

As of June 30, 2024 and 2023, $ 2.6 million and $ 1.9 million of the remaining deemed repatriation tax is short term and is recorded in Accrued expenses on the Consolidated Balance Sheet.

As of June 30, 2025 and 2024, the remaining provision recorded for the one-time deemed repatriation tax were $ 3.3 million and $ 5.9 million, respectively.

The remaining $ 3.3 million is payable in fiscal year 2026 and is recorded in Accrued expenses on the Consolidated Balance Sheet.

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

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Tax credit carryforwards 9,650 6,171

Goodwill — 746

Net operating loss carryforward 4,676 364

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Deferred Tax Liabilities:

Other intangible assets $ — $ 859

Property and equipment 8,101 4,100

Net foreign currency gains — 79

Miscellaneous 1,336 799

1 unchanged sentence

Net Deferred Income Taxes $ 25,190 $ 19,748

During fiscal year 2024, the Company has capitalized research and development expenses that are required to be capitalized as an amortizable asset under Section 174 of the Internal Revenue Code and amortized over a period of five years.

Since fiscal year 2023, we have capitalized research and development expenses that are required to be capitalized as an amortizable asset under Section 174 of the Internal Revenue Code and amortized over a period of five years.

This requirement is based on the implementation of Tax Reform effective in tax years beginning as of January 1, 2022.

As of June 30, 2024 and 2023, the Company has a net deferred tax asset from capitalized research and development expenses of $ 5.7 million and $ 3.5 million, respectively.

As of June 30, 2025 and 2024, we have a net deferred tax asset from capitalized research and development expenses of $ 10.2 million and $ 5.7 million, respectively.

Income tax benefits associated with the net operating loss carryforwards expire from fiscal year 2030 to 2045.

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A valuation allowance was provided as of June 30, 2025 and 2024 for deferred tax assets related to certain state credits of $ 7.2 million and $ 5.8 million, respectively.

Additionally, in fiscal year 2024, we recorded a full $ 3.4 million valuation allowance on the business interest carryforward deferred tax asset, following a determination that it is more likely than not that it will not be realized.

As of June 30, 2025 and 2024, we have full valuation allowances of $ 6.9 million and $ 3.4 million, respectively on the business interest carryforward deferred tax asset, following a determination that it is not more likely than not that it will be realized.

Additionally, in fiscal year 2025, we recorded a deferred tax asset from the capital loss on the sale of GES for $ 5.3 million, on which a $ 2.3 million valuation allowance has been provided.

See Note 3 - Sale of GES for further information regarding the sale.

Except as reserved for in the valuation allowance, we believe our deferred income taxes are more likely than not to be realized in the future.

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The Company continually evaluates its global cash needs.

The aggregate unremitted earnings of the Company’s foreign subsidiaries, which are currently permanently reinvested, were approximately $ 482 million as of June 30, 2024.

Most of our accumulated unremitted foreign earnings have been invested in active non-U.S.

business operations.

The aggregate unremitted earnings of the Company’s foreign subsidiaries were approximately $ 451 million as of June 30, 2025.

If such funds were repatriated or we determined that all or a portion of such foreign earnings are no longer permanently reinvested, we may be subject to applicable non-U.S.

income and withholding taxes.

Determination of the amount of any potential future unrecognized deferred tax liability on such unremitted earnings is not practicable and is recorded in the period that the funds are repatriated.

income and withholding

Determination of the amount of any potential future unrecognized deferred tax liability on such unremitted earnings is not practicable and is recorded in the period when any foreign earnings are determined to be no longer permanently reinvested.

During fiscal year 2025, the Company changed its indefinite reinvestment assertion for our subsidiary in China, and has recorded a deferred tax liability on their earnings for the applicable withholding taxes.

The Company continues to assert permanent reinvestment of foreign earnings in all other foreign jurisdictions as well as for earnings prior to fiscal year 2025 for China.

The provision for income taxes is composed of the following items:

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Valuation allowance 7,176 27.4 4,988 19.8 718 1.0

Asset impairment

Asset impairment/Disposal

( 4,732 ) ( 18.0 ) ( 2,882 ) ( 11.4 ) — —

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Total provision for income taxes $ 9,245 35.2 % $ 4,688 18.6 % $ 18,913 25.3 %

In fiscal year 2024, the tax effects of recording deferred tax assets resulting from the impairment recorded following the held for sale classification of GES are included in asset impairment in the above table.

The Asset impairment/Disposal line in the table above includes, in fiscal year 2024, the tax effects of recording deferred tax assets resulting from the impairment recorded following the held for sale classification of GES.

In fiscal year 2025, the line reflects the $5.3 million tax benefit on the capital loss from the GES sale as well as the tax impact of other adjustments to GES deferred tax assets following the disposal.

See Note 3 - Sale of GES for further information regarding the sale.

Changes in the unrecognized tax benefit, excluding accrued interest and penalties, during fiscal years 2025, 2024, and 2023 were as follows:

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The Repurchase Plan has no expiration date but may be suspended or discontinued at any time.

During fiscal year 2024, the Company repurchased $ 3.0 million of common stock under the Repurchase Plan at an average price of $ 22.12 per share.

During fiscal years 2025 and 2024, the Company repurchased $ 11.9 million and $ 3.0 million, respectively, of common stock under the Repurchase Plan at an average price of $ 18.19 per share and $ 22.12 per share, respectively, which was recorded as Treasury stock, at cost in the Consolidated Balance Sheets.

The Company did not repurchase any shares during fiscal year 2023.

During fiscal year 2022, the Company repurchased $ 9.1 million of common stock under the Repurchase Plan at an average price of $ 18.82 per share, which was recorded as Treasury stock, at cost in the Consolidated Balance Sheets.

Since the inception of the Repurchase Plan, the Company has repurchased $ 103.7 million of common stock at an average cost of $ 15.70 per share.

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Financial Instrument Level Valuation Technique/Inputs Used

Cash Equivalents 1 Market - Quoted market prices

Derivative Assets:

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The SERP investment assets are offset by a SERP liability which represents the Company’s obligation to distribute SERP funds to participants.

See Note 9 - Employee Benefit Plans of Notes to Consolidated Financial Statements for further information regarding the SERP.

See Note 10 - Employee Benefit Plans for further information regarding the SERP.

Non-Recurring Fair Value Measurements:

During fiscal year 2024, the automation, test and measurement business unit met the criteria to be classified as held for sale, and as a result, a valuation allowance of $ 17.0 million was established to reflect the fair value less cost to sell of the disposal group, which was based on expected proceeds and the estimated carrying value of the net assets to be disposed.

During fiscal year 2025, the land, building, and certain equipment of our Tampa facility, with a total carrying value of $ 6.9 million, met the criteria to be classified as Assets Held for Sale at June 30, 2025.

The carrying value reflects the fair value, which was based on expected proceeds and the carrying value of the net assets to be disposed.

We utilized level 3 inputs based on management’s best estimates and assumptions to estimate the fair value.

See Note 3 - Assets and Liabilities Held for Sale of Notes to Consolidated Financial Statements for additional information.

See Note 4 - Restructuring Activities for additional information.

Financial Instruments Not Carried At Fair Value:

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The gain or loss associated with derivative instruments that are not designated as hedging instruments or that cease to meet the criteria for hedging under FASB guidance is reported immediately in Non-operating income (expense), net on the Consolidated Statements of Income.

Based on fair values as of June 30, 2024, we estimate that approximately $ 1.6 million of pre-tax derivative loss deferred in Accumulated Other Comprehensive Loss will be reclassified into earnings, along with the earnings effects of related forecasted transactions, within the next twelve months.

Based on fair values as of June 30, 2025, we estimate that approximately $ 1.6 million of pre-tax derivative gain deferred in Accumulated Other Comprehensive Loss will be reclassified into earnings, along with the earnings effects of related forecasted transactions, within the next twelve months.

Losses on foreign exchange contracts are generally offset by gains in operating income in the income statement when the underlying hedged transaction is recognized in earnings.

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The maximum length of time we had hedged our exposure to the variability in future cash flows was 12 months as of both June 30, 2025 and June 30, 2024.

See Note 13 - Fair Value of Notes to Consolidated Financial Statements for further information regarding the fair value of derivative assets and liabilities and Note 18 - Accumulated Other Comprehensive Income (Loss) of Notes to Consolidated Financial Statements for the changes in deferred derivative gains and losses.

See Note 14 - Fair Value for further information regarding the fair value of derivative assets and liabilities and Note 20 - Accumulated Other Comprehensive Income (Loss) for the changes in deferred derivative gains and losses.

Information on the location and amounts of derivative fair values in the Consolidated Balance Sheets and derivative gains and losses in the Consolidated Statements of Income are presented below.

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Note 16 Accrued Expenses

Accrued expenses consisted of the following, amounts as of June 30, 2024 exclude the amounts classified as held for sale:

Accrued expenses consisted of the following, amounts as of June 30, 2024 exclude the amounts classified as held for sale for GES:

(Amounts in Thousands) 2025 2024

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Insurance 1,368 2,195

Restructuring 2,018 557

Other expenses 6,066 7,102

Total accrued expenses $ 46,489 $ 63,189

Note 17 Segment Reporting

The Company’s operations are managed by its Chief Executive Officer , who has been identified as our chief operating decision maker “CODM.” The CODM evaluates the performance of multiple business units domestically and globally, inclusive of the United States, China, Mexico, Poland, Romania, and Thailand.

Previously, the Company had operations in Japan, India, and Vietnam as part of the GES business unit, that was divested in July of 2024.

Each of these business units qualify as operating segments, providing contract manufacturing services, including engineering and supply chain support, for the production of electronic assemblies and other products including medical devices, medical disposables, precision molded plastics, and complete device assembly primarily in automotive, medical, and industrial applications, to the specifications and designs of our customers.

These operating segments are aggregated into one reportable segment, Business Unit Operations, due to similarities in the nature of the products, the production process, the type of customer, the methods used to distribute the products, and long-term economic characteristics.

The accounting policies for the Business Unit Operations segment are consistent with those described in the Summary of Significant Accounting Policies.

The CODM uses operating income as the measure of profitability to evaluate income or loss generated from each operating segment and to guide decisions on capital investments and assess performance.

These decisions may include capital expenditures and/or acquisitions.

Expenditures for long-lived assets for fiscal years 2025, 2024, and 2023 are $ 33.7 million, $ 47.0 million, and $ 90.7 million, respectively.

The measure of segment assets is reported on the Consolidated Balance Sheet as Total Assets;

however, it should be noted the discrete balance sheet information is not utilized by the CODM in assessing performance and allocating resources.

Certain corporate administrative expenses have been allocated to the Business Unit Operations Segment based upon the nature of the expenses.

The following table presents significant operations segment net sales and expenses:

Year Ended June 30

(Amounts in Thousands) 2025 2024 2023

Business Unit Operations $ 1,519,456 $ 1,748,218 $ 1,837,305

Corporate/Eliminations ( 32,729 ) ( 33,708 ) ( 13,876 )

Total Net Sales $ 1,486,727 $ 1,714,510 $ 1,823,429

Cost of Sales (Excluding Depreciation and Amortization) 1,345,624 1,537,813 1,637,636

Selling and Administrative (Excluding Depreciation and Amortization)

49,975 65,036 65,860

Depreciation and Amortization 36,994 38,030 32,416

Other General Income — (892) (212)

Restructuring Expense 10,990 2,386 —

Goodwill Impairment — 5,820 —

(Gain on Disposal) Asset Impairment

(2,391) 17,040 —

Total Operating Income $ 45,535 $ 49,277 $ 87,729

Note 18 Geographic Information

The following geographic area data includes net sales based on the country location of the Company’s business unit providing the manufacturing or other service and long-lived assets based on physical location.

Long-lived assets include property and equipment and capitalized software, and amounts as of June 30, 2024 exclude the amounts classified as held for sale.

Long-lived assets include property and equipment and capitalized software, and amounts as of June 30, 2025 and 2024 exclude the amounts classified as held for sale.

Year Ended June 30

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Amounts in parentheses indicate reductions to income.

(1) See Note 14 - Derivative Instruments of Notes to Consolidated Financial Statements for further information on derivative instruments.

(2) See Note 9 - Employee Benefit Plans of Notes to Consolidated Financial Statements for further information on postemployment benefit plans.

(1) See Note 15 - Derivative Instruments for further information on derivative instruments.

(2) See Note 10 - Employee Benefit Plans for further information on postemployment benefit plans.

Note 21 Leases

The Company determines if a contract is or contains a lease at inception.

The Company leases certain office, manufacturing, and warehouse facilities and equipment under operating leases, in addition to land on which certain office and manufacturing facilities reside.

These operating leases expire from fiscal year 2027 to 2056.

Operating lease costs in fiscal years 2025, 2024, and 2023 were $ 1.5 million, $ 1.9 million, and $ 1.7 million, respectively.

During fiscal year 2025, the Company executed a lease for a facility to expand our medical CMO footprint with the lease commencing in June 2025, including obtaining $ 10.6 million operating right-of-use assets in exchange for operating lease liabilities.

The initial lease term is ten years and annual base rent of $ 1.8 million, increasing 3 % each year.

The lease assets and liabilities, which exclude leases with terms of 12 months or less , as of June 30, 2025 and 2024, were as follows, amounts as of June 30, 2024 exclude the amounts classified as held for sale:

(Amounts in Thousands) 2025 2024

Operating lease right-of-use assets (included in Other Assets) $ 11,779 $ 1,765

Operating lease liability, current (included in Accrued expenses) $ 520 $ 623

Operating lease liability, noncurrent (included in Other long-term liabilities) $ 11,386 $ 1,142

Weighted average remaining lease term in years - operating leases 9.6 3.8

Weighted average discount rate - operating leases 5.9 % 4.0 %

Cash payments for operating leases included in the measurement of lease liabilities in fiscal years 2025, 2024, and 2023 were $ 0.7 million, $ 1.4 million, and $ 1.1 million, respectively, and were included in Cash Flows from Operating Activities in the Consolidated Statements of Cash Flows.

Future lease payments as of June 30, 2025 are as follows:

(Amounts in Thousands)

Thereafter 12,205

Total undiscounted lease payments $ 22,161

tenant allowance not yet received 4,617

imputed interest 5,638

Present value of lease liabilities

Item 9 - Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data