What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-09-17 compared with 2024-10-15 · 214 added, 417 removed, 620 unchanged (50% of the section changed)

4 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Key Tronic Corporation (the “Company”) as of June 29, 2024, July 1, 2023, and July 2, 2022, the related consolidated statements of operations, comprehensive income (loss), cash flows, and shareholders’ equity for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of June 29, 2024, July 1, 2023, and July 2, 2022, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Restatement of Previously Issued Financial Statements

As discussed in Note 14 to the consolidated financial statements, the consolidated financial statements for the years ended July 1, 2023 and July 2, 2022, have been restated to correct misstatements.

We have audited the accompanying consolidated balance sheets of Key Tronic Corporation (the ”Company”) as of June 28, 2025 and June 29, 2024, the related consolidated statements of operations, comprehensive loss, cash flows, and shareholders’ equity for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of June 28, 2025 and June 29, 2024, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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The Company has an enforceable right to payment including a reasonable profit for performance completed to date with respect to these contracts.

As a result, revenue is recognized under these contracts over-time based on the input cost-to-cost method as it better depicts the transfer of

As a result, revenue is recognized under these contracts over-time based on the input cost-to-cost method as it better depicts the transfer of control.

This input method is based on the ratio of costs incurred to date as compared to the total estimated costs at completion of the performance obligation.

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• Identifying and testing significant assumptions used in the revenue calculation, including the ratio of costs incurred to date as compared to the total estimated costs at completion of the performance obligations.

• Comparing margins realized to trending historic margins, and comparing total revenue recognized to independent expectations of total revenues disaggregated by revenue stream.

• Comparing margins realized to trending historic margins and comparing total manufacturing services revenue recognized to an independent expectation of manufacturing services revenue.

• Performing cutoff procedures to test that revenue transactions were recorded in the appropriate period.

/s/ Moss Adams LLP

/s/ Baker Tilly US, LLP

Seattle, Washington

October 15, 2024

September 16, 2025

We have served as the Company’s auditor since 2021.

2 unchanged sentences

(In thousands)

June 29, 2024 July 1, 2023 July 2, 2022

June 28, 2025 June 29, 2024

Current assets:

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Deferred income tax asset 23,397 17,376

Other 5,346 11,397 14,117

Other, net of credit losses of $ 500 and $ 0

Total other assets 42,627 22,722

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Retained earnings 68,603 76,921

Accumulated other comprehensive (loss) income ( 215 ) ( 97 ) ( 425 )

Accumulated other comprehensive income (loss) 1,029 ( 215 )

Total shareholders’ equity 117,134 123,990

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Fiscal Year Ended

Restated Restated

June 29, 2024 July 1, 2023 July 2, 2022

June 28, 2025 June 29, 2024

Net sales $ 467,871 $ 566,942

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Interest expense, net 12,523 11,945

Income (loss) before income taxes ( 5,187 ) 6,300 3,691

Income tax provision (benefit) ( 2,400 ) 1,143 314

Net income (loss) $ ( 2,787 ) $ 5,157 $ 3,377

Net income (loss) per share — Basic $ ( 0.26 ) $ 0.48 $ 0.31

Loss before income taxes ( 11,961 ) ( 5,187 )

Income tax benefit ( 3,643 ) ( 2,400 )

Net loss $ ( 8,318 ) $ ( 2,787 )

Net loss per share — Basic $ ( 0.77 ) $ ( 0.26 )

Weighted average shares outstanding — Basic 10,762 10,762

Net income (loss) per share — Diluted $ ( 0.26 ) $ 0.47 $ 0.31

Net loss per share — Diluted $ ( 0.77 ) $ ( 0.26 )

Weighted average shares outstanding — Diluted 10,762 10,762

1 unchanged sentence

KEY TRONIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

Fiscal Year Ended

June 29, 2024 July 1, 2023 July 2, 2022

Comprehensive income:

Net income (loss) $ ( 2,787 ) $ 5,157 $ 3,377

Other comprehensive income:

June 28, 2025 June 29, 2024

Comprehensive loss:

Net loss $ ( 8,318 ) $ ( 2,787 )

Other comprehensive income (loss):

Unrealized gain (loss) on hedging instruments, net of tax 1,244 ( 118 )

Comprehensive income (loss) $ ( 2,905 ) $ 5,485 $ 880

Other comprehensive income for fiscal years 2024, 2023, and 2022 is reflected net of tax provision (benefit) of approximately $( 0.1 ) million, $ 0.0 million , and $( 0.8 ) million, respectively.

Comprehensive loss $ ( 7,074 ) $ ( 2,905 )

Other comprehensive loss for fiscal years 2025 and 2024 is reflected net of tax provision (benefit) of approximately $ 0.4 million and $( 0.1 ) million, respectively.

See accompanying notes to consolidated financial statements.

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Fiscal Year Ended

June 29, 2024 July 1, 2023 July 2, 2022

June 28, 2025 June 29, 2024

Operating activities:

Net income (loss) $ ( 2,787 ) $ 5,157 $ 3,377

Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:

Net loss $ ( 8,318 ) $ ( 2,787 )

Adjustments to reconcile net loss to cash provided by operating activities:

Depreciation and amortization 9,599 11,038

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Other liabilities ( 3,648 ) ( 8,123 )

Cash provided by (used in) operating activities 13,776 ( 11,311 ) ( 4,907 )

Cash provided by operating activities 18,929 13,776

Investing activities:

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Principal payments on finance leases ( 2,223 ) ( 5,070 )

Cash provided by (used in) financing activities ( 10,519 ) 17,741 11,192

Cash used in financing activities ( 18,098 ) ( 10,519 )

Net increase (decrease) in cash and cash equivalents ( 3,368 ) 1,149

18 unchanged sentences

Balances, July 1, 2023 10,762 $ 47,728 $ 82,986 $ ( 97 ) $ 130,617

Net income 3,377 — 3,377

Unrealized loss on hedging instruments, net of tax — — — ( 2,497 ) ( 2,497 )

Share-based compensation — 293 — — 293

Balances, July 2, 2022 10,762 47,474 77,829 ( 425 ) $ 124,878

Net income — — 5,157 — 5,157

Unrealized gain on hedging instruments, net of tax — — — 328 328

Share-based compensation — 254 — — 254

Balances, July 1, 2023 10,762 $ 47,728 $ 82,986 $ ( 97 ) $ 130,617

Net loss — — ( 2,787 ) — ( 2,787 )

3 unchanged sentences

Balances, June 29, 2024 10,762 $ 47,284 $ 76,921 $ ( 215 ) $ 123,990

Net loss — ( 8,318 ) — ( 8,318 )

Unrealized gain on hedging instruments, net of tax — — — 1,244 1,244

Share-based compensation — 218 — — 218

Balances, June 28, 2025 10,762 $ 47,502 $ 68,603 $ 1,029 $ 117,134

See accompanying notes to consolidated financial statements.

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Historically, due to the timing between the procurement of raw materials, production cycle and payment from our customers, we have financed operations and met our capital expenditure requirements primarily through cash flows provided by operations and borrowings under our credit facilities.

We generated operating and net income of $ 6.8 million and $( 2.8 ) million respectively, during the 12-month period ended June 29, 2024 and have positive working capital of $ 184.2 million as of June 29, 2024.

We generated operating income and net loss of $ 0.6 million and $( 8.3 ) million respectively, during the 12-month period ended June 28, 2025 and have positive working capital of $ 142.2 million as of June 28, 2025.

Due to the timing between the procurement of raw materials, production cycle and payment from our customers, we have relied on borrowings on our credit facilities to fund operations during fiscal year 2025.

Based on current projections, we anticipate generating cash from operations as revenue increases in the first quarter of fiscal year 2025.

As of June 29, 2024, we have limited additional borrowing capacity on our credit facility, which matures on December 3, 2025.

We are in discussions with multiple financial institutions to extend the borrowing capacity on our credit facility.

Based on current projections, we anticipate generating cash from operations as revenue increases in the first half of fiscal year 2026.

As of June 28, 2025, we have $ 25.0 million of additional borrowing capacity on our credit facility, which matures on December 3, 2029.

If we are unable to meet projected operating results or extend our borrowing capacity, we may need to delay the purchase of raw materials or require our customers to fund inventory raw material costs ahead of production.

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Certain prior period reclassifications were made to conform with the current period presentation.

These reclassifications had no effect on reported income, comprehensive income, cash flows, total assets, or shareholders' equity as previously reported.

These reclassifications had no effect on reported income, comprehensive loss, cash flows, total assets, or shareholders' equity as previously reported.

Principles of Consolidation

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Allowance for Credit Losses

The Company evaluates the collectability of accounts receivable and records an allowance for credit losses, which reduces the receivables to an amount that management reasonably estimates will be collected.

A specific allowance is recorded against receivables considered to be impaired based on the Company’s knowledge of the financial condition of the customer, and a general allowance is calculated and applied to remaining receivables based on the Company's historical collection experience.

The Company evaluates the collectability of accounts receivable, contract assets, and other recoverable costs and records an allowance for credit losses, which reduces these assets to an amount that management reasonably estimates will be collected.

A specific allowance is recorded against receivables considered to be impaired based on the Company’s knowledge of the financial condition of the customer, and a general allowance is calculated and applied to remaining assets based on the Company's historical collection experience.

In determining the amount of the allowance, the Company considers several factors including the aging of the receivables, the current business environment and historical experience.

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Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, accounts receivable, current liabilities, and non-current operating lease liability are reflected on the balance sheets at June 29, 2024, July 1, 2023, and July 2, 2022 , reasonably approximate their fair value.

The Company had an outstanding balance on its lines of credit of $ 112.6 million as of June 29, 2024, $ 115.4 million as of July 1, 2023, and $ 95.1 million as of July 2, 2022 with a carrying value that reasonably approximates the fair value.

The Company had an outstanding balance on its foreign term loan of MXN 40.5 million ($ 2.2 million USD) as of June 29, 2024, MXN 58.2 million ($ 3.4 million USD) as of July 1, 2023, and MXN 93.3 million ($ 4.6 million USD) as of July 2, 2022 with a carrying value that reasonably approximates the fair value.

The domestic equipment term loans were $ 5.8 million as of June 29, 2024, $ 6.5 million as of July 1, 2023, and $ 3.3 million as of July 2, 2022 with a carrying value that reasonably approximates the fair value.

The carrying values of cash and cash equivalents, accounts receivable, current liabilities, and non-current operating lease liability are reflected on the balance sheets at June 28, 2025 and June 29, 2024, reasonably approximate their fair value.

The Company had an outstanding balance on its lines of credit of $ 71.2 million as of June 28, 2025, and $ 112.6 million as of June 29, 2024, with a carrying value that reasonably approximates the fair value.

The Company had an outstanding balance on its foreign term loan of MXN18.9 million ($ 1.0 million USD) as of June 28, 2025, and MXN 40.5 million ($ 2.2 million USD) as of June 29, 2024, with a carrying value that reasonably approximates the fair value.

The domestic equipment term loans were $ 9.0 million as of June 28, 2025, and $ 5.8 million as of June 29, 2024, with a carrying value that reasonably approximates the fair value.

Share-based Compensation

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Newly Adopted and Recent Accounting Pronouncements

On November 4, 2024 the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures.

The ASU requires entities to disclose in the notes to the financial statements specified information about certain costs and expenses.

Subsequently, the FASB issued ASU 2025-01 which clarifies the effective date of ASU 2024-03 for public business entities.

The ASU applies to the Company’s annual reporting period beginning in fiscal year 2028 and interim reporting periods beginning in fiscal year 2029.The Company does not anticipate early adoption of the new disclosure standard.

On December 14, 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

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Early adoption is permitted.

The Company is currently evaluating the guidance and its impact to the financial statements.

In September 2022, the FASB issued ASU No.

2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50).

This standard requires disclosure of the key terms of outstanding supplier finance programs and a roll forward of the related obligations.

The new standard does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations.

The ASU became effective for the Company July 2, 2023, except for the roll forward requirement, which becomes effective June 30, 2024.

This ASU, except for the roll forward requirement, was adopted retrospectively as of July 2, 2023 and did not have a material impact on our consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08 amending Business Combination:

(Topic 805), which was necessary due to 2014-09, Revenue from Contracts with Customers (Topic 606).

The FASB issued this ASU to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to (1) recognition of an acquired contract liability and (2) payment terms and their effect on subsequent revenue recognized by the acquirer.

The Company adopted these amendments as of the effective date of July 2, 2023.

These amendments are to be applied prospectively to business combinations occurring on or after the effective date of the amendments.

The Company plans to apply the practical expedients as needed for any future acquisitions.

The practical expedients cover contracts that were modified prior to acquisition date as well as determining which date an acquirer would have to determine the standalone selling price of each performance obligation in an acquired contract.

This ASU did not have a material impact on our consolidated financial statements.

In March of 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Instruments, which clarifies specific issues raised by stakeholders.

Specifically, the ASU clarifies the following:

1) that all entities are required to provide the fair value option disclosures in ASC 825, Financial Instruments 2) clarifies that the portfolio exception in ASC 820, Fair

Value Measurement, applies to nonfinancial items accounted for as derivatives under ASC 815, Derivatives and Hedging;

3) clarifies that for purposes of measuring expected credit losses on a net investment in a lease in accordance with ASC 326, Financial Instruments - Credit Losses, the lease term determined in accordance with ASC 842, Leases, should be used as the contractual term;

4) clarifies that when an entity regains control of financial assets sold, it should recognize an allowance for credit losses in accordance with ASC 326;

and 5) aligns the disclosure requirements for debt securities in ASC 320, Investments - Debt Securities, with the corresponding requirements for depository and lending institutions in ASC 942, Financial Services - Depository and Lending.

The amendments in the ASU have various effective dates and transition requirements which are dependent on timing of adoption of ASU 2016-13.

The Company adopted this amendment as of the effective date of July 2, 2023 on a modified retrospective basis.

This ASU did not have a material impact on our consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13 Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments and also issued subsequent amendments to the initial guidance:

ASU 2018-19, ASU 2019-04 and ASU 2019-05, which replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected.

The guidance was effective for the Company beginning in the first quarter of fiscal year 2024.

The Company adopted this amendment as of the effective date of July 2, 2023, and the impacts are disclosed in opening retained earnings on the Consolidated Statement of Shareholders' Equity.

Refer to further discussion in Note 15 - "Restatement of Interim Financial Information"

The Company adopted the standard during the year ended June 28, 2025.

See Note 11 to the consolidated financial statements included within this report for more information on the increased disclosure for the Company's single reportable segment.

The Company operates on a 52/53 week fiscal year.

Fiscal years end on the Saturday nearest June 30.

As such, fiscal years 2024 and 2023 ended on June 29, 2024 and July 1, 2023, respectively.

As such, fiscal years 2025 and 2024 ended on June 28, 2025 and June 29, 2024, respectively.

Fiscal years 2024 and 2025 were 52 week years.

Inventory as of June 29, 2024 is $ 105.1 million compared to $ 137.9 million as of July 1, 2023 and $ 155.7 million as of July 2, 2022.

Inventory as of June 28, 2025 is $ 97.3 million compared to $ 105.1 million as of June 29, 2024.

The components of inventories consist of the following (in thousands):

June 29, 2024 July 1, 2023 July 2, 2022

June 28, 2025 June 29, 2024

(in thousands)

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Property, plant and equipment consists of the following:

Life June 29, 2024 July 1, 2023 July 2, 2022

Life June 28, 2025 June 29, 2024

(in years) (in thousands)

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Furniture and fixtures 3 to 5

6,660 5,418 5,286

Total property, plant and equipment 134,688 118,564

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Fiscal Year Ended

June 29, 2024 July 1, 2023 July 2, 2022

June 28, 2025 June 29, 2024

(in thousands)

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Debt consists of the following:

Maturity Date Interest Rate June 29, 2024 July 1, 2023 July 2, 2022

Maturity Date Interest Rate June 28, 2025 June 29, 2024

(in thousands)

Asset-based senior secured revolving credit facility (1) December 3, 2029 7.4 % $ 67,900 $ 107,149

Domestic term loan - Callodine (2) December 3, 2029 11.5 % 26,500 —

Foreign line of credit (3) December 11, 2026 11.8 % 3,253 5,403

Domestic term loan - Balboa (4) September 19, 2030 6 % to 8 %

4,535 4,148 —

Foreign term loan - Banorte (5) April 24, 2026 5.5 % 1,000 2,200

Domestic term loan - Bank of America (6) August 14, 2025 4.9 % — 1,277

Domestic term loan - Avtech 8 (7) October 31, 2028 13.6 % 278 —

Domestic term loan - Avtech 9 (8) June 30, 2028 11.7 % 4,996 —

Total debt 107,629 120,564

2 unchanged sentences

Long-term debt, net $ 98,936 $ 116,382

(1) On August 14, 2020, the Company entered into a loan agreement with Bank of America (“Loan Agreement”).

The Loan Agreement replaced the Company’s prior amended and restated credit agreement, as amended, with Wells Fargo Bank.

The Loan Agreement provides for an asset-based senior secured revolving credit facility with an original availability of up to $ 93 million.

On September 3, 2021, the Company entered into an amendment to the Loan Agreement, which increased the availability under the credit facility to $ 120 million, subject to the Company’s borrowing base, and set the maturity date to September 3, 2026.

On August 26, 2022, the Company entered into a third amendment to the Loan Agreement, which removed the cash flow leverage ratio covenant and increased the interest rate by 25 basis points.

On May 7, 2024, the Company entered into a fourth amendment to the Loan Agreement, effective as of March 29, 2024, which amendment modified debt covenant provisions to reduce the minimum requirement for the fixed charge coverage ratio from 1.25 :1.00 to 1.00 :1.00 as of March 30, 2024 and allow for the add back of severance expenses incurred during the quarter ended March 30, 2024.

The minimum requirement for the fixed charge coverage ratio will increase as follows:

1.05 :1.00 on July 27, 2024, 1.15 :1.00 on October 26, 2024, 1.20 :1.00 on January 25, 2025, and 1.25 :1.00 on and after March 29, 2025.

In addition, the amendment increased the interest rate by 100 basis points beginning on March 29, 2024 and moved forward the maturity date by one year to September 3, 2025.

On September 27, 2024, the Company entered into a fifth amendment to the Loan Agreement, which extended the maturity date by three months to December 3, 2025.

On October 9, 2024, the Company entered into a sixth amendment to the Loan Agreement, The Amendment waived existing events of default relating to non-compliance with (a) prescribed fixed charge coverage ratios for the periods ending June 29, 2024 and July 27, 2024 and (b) delivering audited financial statements within 90 days of the Company's fiscal year-end.

The Amendment increased the interest rate by 50 basis points beginning on October 9, 2024 so that the applicable margin on base rate loans is 3.50 % and term SOFR loans is 4.50 %.

In addition, the Amendment increased the availability block, which reduces the calculated borrowing base under the Loan Agreement, from $ 8 million to $ 10 million, with further increases to $ 11 million and $ 12 million to be effective on December 31, 2024 and March 31, 2025, respectively.

(1) On December 3, 2024, Key Tronic Corporation (the "Company") entered into an asset-based credit agreement (the "Credit Agreement") among the Company, certain domestic subsidiaries (as co-borrowers or guarantors), BMO Bank, N.A (the "Bank"), as administrative agent and swing line lender, BMO Capital Markets as arranger and book runner, and certain financial institutions, as lenders.

The Credit Agreement provides for an asset-based senior secured revolving credit facility (the "Credit Facility") of up to $ 115 million, maturing on December 3, 2029.

Generally, under the Credit Agreement and at the Company’s option:

(i) each SOFR Loan shall bear interest at a rate per annum equal to Adjusted Term SOFR (Term SOFR plus 0.10 %, subject to a floor of 0.00 %) plus an applicable margin of 2.50 % to 3.00 %, depending on the availability of borrowing amounts under the Credit Agreement;

and (ii) each Base Rate Loan, Swing Line Loan or other Obligation shall bear interest at a rate per annum equal to the Base Rate (subject to a floor of 1.00 %) plus an applicable margin of 1.50 % to 2.00 %, depending on the availability of borrowing amounts under the Credit Agreement.

As of June 28, 2025, the applicable margin was 2.75 % for SOFR Loans and 1.75 % for Base Rate Loans.

If there is an event of default under the Credit Agreement, all loans and other obligations may bear interest at a rate of an additional 2.00 % on the otherwise applicable interest rates.

In addition to the applicable interest rates, the Company is required to pay a fee of 0.2 % per annum on the unused portion of the Credit Facility, monthly in arrears.

Availability on the line of credit is generally determined based on eligible inventory and accounts receivable balances.

On May 13, 2025, the Company entered into a first amendment and limited waiver to the Credit Agreement.

The amendment waived an existing event of cross-default created by an event of default under the Term Loan as defined and discussed in footnote (2) below.

The amendment also adds an additional reporting requirement.

Proceeds from the Credit Facility and the Term Loan discussed below were used to pay-off the Company's prior loan and security agreement, as amended, with Bank of America, N.A.

(with the related credit facility, the "Prior Credit Facility") in the amount of $ 99.7 million, as well as its outstanding equipment term loan, and financing costs related to the Credit Agreement.

The Term Loan, may also be used to pay-off certain other existing debt, to issue letters of credit, and for other business purposes, including working capital needs.

As of June 28, 2025, the Company had an outstanding balance under the asset-based revolving credit facility of $ 67.9 million, $ 0.4 million in outstanding letters of credit and $ 25.0 million available for future borrowings.

As of July 1, 2023, the Company had an outstanding balance under the asset-based revolving credit facility of $ 115.4 million, $ 0.3 million in outstanding letters of credit and $ 4.6 million available for future borrowings.

As of July 2, 2022, the Company had an outstanding balance under the asset-based revolving credit facility of $ 95.1 million, $ 0.3 million in outstanding letters of credit and $ 10.8 million available for future borrowings.

Generally, the interest rate applicable to loans under the Bank of America loan agreement will be, at the Company’s option:

(i) the base rate which is the highest of (a) the Prime Rate for such day, (b) the Federal Funds Rate for such day plus 0.50 %, and (c) Term SOFR for a one month interest period as of such day, plus 1.00 % (provided that in no event shall the base rate be less than zero), plus the applicable interest margin for base rate loans;

or (ii) SOFR rate for an applicable interest period, plus the applicable interest margin for SOFR rate loans.

As modified by the sixth amendment to the Loan Agreement, the applicable interest margin on:

(x) base rate loans is 3.50 % and (y) SOFR rate loans is 4.50 %, resetting on a quarterly basis.

If there is an event of default that is not waived under the Loan Agreement, all loans and other obligations will bear interest at a rate of an

additional 2.00 % on the otherwise applicable interest rates.

In addition to interest charges, the Company is required to pay a fee of 0.25 % per annum on the unused portion of the Credit Facility, monthly in arrears.

As of June 29, 2024, the interest rate on the asset-based revolving credit facility with Bank of America was 9.46 %.

On August 14, 2020, the Company entered into a loan agreement with Bank of America (“Loan Agreement”).

The Loan Agreement, as amended, provided for an asset-based senior secured revolving credit facility with an availability of up to $ 120 million, subject to the Company’s borrowing base, and was set to mature on December 3, 2025.

The interest rate as of December 2, 2024 at the time of pay-off was approximately 9.2 %.

As of June 29, 2024, the Company had an outstanding balance under the Prior Credit Facility of $ 107.1 million, $ 0.3 million in outstanding letters of credit and $ 12.9 million available for future borrowings.

(2) On December 3, 2024, the Company entered into a $ 28 million term loan (the "Term Loan") credit agreement among the Company, certain domestic subsidiaries (as co-borrowers or guarantors), Callodine Commercial Finance, LLC (“Callodine”), as administrative agent, and certain financial institutions, as term loan lenders.

The Term Loan requires quarterly repayments of

principal in the amount of $ 0.75 million.

The remainder will be payable at maturity which is the earlier of December 3, 2029 or the maturity of the Credit Agreement described above.

The Term Loan bears interest at Adjusted Term SOFR (Term SOFR plus 0.15 %, subject to a floor of 3.50 %) plus an applicable margin of 7.00 %.

If there is an event of default under the Term Loan, all loans and other obligations may bear interest at a rate of an additional 2.00 % on the otherwise applicable interest rate.

On May 13, 2025, the Company entered into a first amendment and limited waiver to the Term Loan.

The amendment waived an existing event of default relating to non-compliance with minimum required earnings before interest, depreciation, amortization, and other adjustments for the period ending March 29, 2025.

The amendment permanently adds an additional reporting requirement, and requires minimum earnings before interest, taxes, depreciation, amortization, and other adjustments only if average daily availability for the applicable fiscal quarter is less than 12.5 % of the combined borrowing base.

(3) On December 11, 2023, the Company entered into a loan agreement in Mexican peso with Banorte Financial Group.

1 unchanged sentence

The credit facility bears interest at Iterbancario de Equilibrio Interest Rate plus 2.75 %, and as of June 28, 2025, was 11.8 %.

As of June 29, 2024, the Company had an outstanding balance under the revolving credit facility of MXN 99 million ($ 5.4 USD) and MXN 1 million ($ 0.1 million USD) available for future borrowings.

As of June 28, 2025, the Company had an outstanding balance under the revolving credit facility of MXN 61 million ($ 3.25 million USD) and MXN 39 million ($ 1.67 million USD) available for future borrowings.

(4) On September 19, 2023, the Company entered into a $ 1.1 million equipment financing agreement with Ameris Bank dba Balboa Capital ("Balboa Capital").

1 unchanged sentence

Under these loan agreements, equal monthly payments of $ 94,000 commenced in the fourth quarter of fiscal year 2024 and will continue through the maturity of the equipment financing facility in the first quarter of fiscal 2030.

The Company had an outstanding balance $ 4.5 million as of June 29, 2024.

(5) On November 24, 2020, the Company entered into a $ 6.0 million equipment financing facility related to the Company’s existing manufacturing equipment that bears interest at 5.52 % and matures on April 24, 2026.

Under this loan agreement, equal monthly payments of $ 100,000 commenced on May 24, 2021 and will continue through the maturity of the equipment financing facility on April 24, 2026.

As of June 29, 2024, the Company had an outstanding balance of $ 2.2 million.

As of July 1, 2023, the Company had an outstanding balance of $ 3.4 million.

As of July 2, 2022, the Company had an outstanding balance of $ 4.6 million.

(6) On August 14, 2020, the Company entered into a $ 5.0 million equipment financing facility with Bank of America relating to the Company’s existing U.S.

manufacturing equipment that bears interest at 4.85 % and matures on August 14, 2025.

Under this loan agreement, equal monthly payments of approximately $ 94,000 commenced on September 14, 2020 and will continue through the maturity of the equipment financing facility on August 14, 2025.

As of June 29, 2024, the Company had an outstanding balance of $ 1.3 million.

As of July 1, 2023, the Company had an outstanding balance of $ 2.3 million.

As of July 2, 2022, the Company had an outstanding balance of $ 3.3 million.

Debt maturities as of June 29, 2024 for the next five years are as follows (in thousands):

manufacturing equipment that accrued interest at 4.85 % and was set to mature on August 14, 2025.

Under this loan agreement, equal monthly payments of approximately $ 94,000 commenced on September 14, 2020 and continued through the pay-off of the Prior Credit Facility on December 4, 2024.

(7) On May 1, 2025, the Company entered into a $ 4.0 million equipment financing facility related to new manufacturing equipment that bears interest at 13.56 % and matures on October 31, 2028.

Under this loan agreement, equal quarterly payments of $ 383,679 will commence when the full amount of the facility is drawn and will continue through the maturity of the equipment financing facility on October 31, 2028.

(8) On March 6, 2025, the Company entered into a $ 5.0 million equipment financing facility related to the Company’s existing manufacturing equipment that bears interest at 11.71 % and matures on June 30, 2028.

Under this loan agreement, equal quarterly payments of $ 464,361 commenced on July 15, 2025 and will continue through the maturity of the equipment financing facility on June 30, 2028.

Debt maturities as of June 28, 2025 for the next four years are as follows (in thousands):

Fiscal Years Ending Amount

3 unchanged sentences

Long-term debt, net of unamortized financing costs $ 105,151

The Company must comply with certain financial covenants, including a fixed charge coverage ratio.

The credit agreement requires the Company to grant certain inspection rights to Bank of America, limit or restrict the Company’s cash management;

The Company must comply with certain financial covenants, including average and daily availability and, if triggered, earnings before interest, taxes, depreciation, amortization and other adjustments and a fixed charge coverage ratio covenant will apply.

The credit agreement requires the Company to grant certain inspection rights to Bank of Montreal, limit or restrict the Company’s cash management;

limit or restrict the ability of the Company to incur additional liens, make acquisitions or investments, incur additional indebtedness, engage in mergers, consolidations, liquidations, dissolutions, or dispositions, pay dividends or other restricted payments, prepay certain indebtedness, engage in transactions with affiliates, and use proceeds.

As of June 29, 2024, The Company was not in compliance with the fixed coverage charge ratio.

On October 9, 2024, the Company executed a sixth amendment to the Loan Agreement which waived existing events of default as of that date .

As of June 28, 2025, the Company was in compliance with all applicable financial covenants.

On May 13, 2025, the Company executed a first amendment and limited waiver to the Term Loan which waived an existing event of default as of that date.

Also on May 13, 2025, the Company executed a first amendment and limited waiver to the Credit Agreement which waived an existing event of cross-default as of that date.

Income tax benefit consists of the following:

Fiscal Year Ended

June 29, 2024 July 1, 2023 July 2, 2022

June 28, 2025 June 29, 2024

(in thousands)

2 unchanged sentences

Foreign 2,841 1,451

1,714 3,132 ( 167 )

Deferred income tax provision (benefit):

2 unchanged sentences

( 6,596 ) ( 4,114 )

Total income tax provision $ ( 2,400 ) $ 1,143 $ 314

Total income tax benefit $ ( 3,643 ) $ ( 2,400 )

The Company has gross tax credit carryforwards of approximately $ 11.1 million at June 28, 2025 consisting of federal research and development (R&D) tax credits.

1 unchanged sentence

A valuation allowance against deferred tax assets is required if it is more likely than not that some of the deferred tax assets will not be realized.

Based upon the Company’s profitability, forecasted income, and evaluation of all other positive and negative evidence, management determined that it is more likely than not that the deferred tax assets will be realized.

In spite of the Company’s current cumulative loss position before nonrecurring items such as cyber losses and restructuring costs, based upon the Company’s historical profitability and forecasted income, management determined that it is more likely than not that the deferred tax assets will be realized.

The Company’s largest deferred tax assets are federal research and development tax credits, deferred research and development expenses, and interest expense deduction carryforwards.

Company forecasts show that the credits will be utilized within the expiration period.

Deferred research and development expenses will be deductible in fiscal year 2026 under the One Big Beautiful Bill Act.

Interest expense deduction carryforwards, which never expire and carry forward indefinitely, are projected to be utilized in future periods as profitability increases and interest expense decreases.

Profitability is forecasted in the coming years due to the nonrecurrence of significant expense items in recent years such as cyber losses and restructuring costs, the future cost benefits associated with the restructuring costs, and significant income and increased margins from multiple new customers.

The Company has closely monitored the realizability of deferred tax assets, tracking book income, permanent differences, and nonrecurring items while projecting future utilization of deferred tax assets, and will continue to do so as future actual results are compared to forecasted results.

On January 27, 2021, the Company received official notice from the Vietnamese tax authorities, confirming tax benefits awarded related to the Company’s principal product line in Vietnam (the “Tax Holiday”).

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The Company noted no changes during the current quarter or fiscal year that would have a material impact on its provision for income taxes or overall income tax position.

After the end of fiscal year 2025, on July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, which includes several tax related provisions that may impact the Company beginning in fiscal year 2026.

The Company is still evaluating the implications, and it is expected that these tax law changes will mitigate federal income taxes payable, but it is not expected to materially impact the Company’s overall tax position and effective tax rate.

The 2017 Tax Cuts and Jobs Act (TCJA) mandated that, for tax years after fiscal year 2022, certain costs incurred for research and development (R&D) activities would no longer be allowed for immediate deduction but would be capitalized and amortized over 5 years (for R&D activities performed domestically) or 15 years (for R&D activities performed abroad).

The Company began capitalizing and amortizing such costs in fiscal year 2023, resulting in an increase to income taxes payable that was largely offset by the utilization of R&D credit carryovers.

However, one aspect of the OBBBA is to eliminate the capitalization requirement and the Company expects to expense any unamortized capitalized R&D costs in fiscal year 2026.

In future years, repatriations of cash will generally be tax-free in the U.S.

However, withholding taxes in China may still apply to any such future repatriations.

Management has not changed its indefinite investment assertions regarding to the portion of accumulated earnings and profits in China that may be repatriated in the future.

In the fourth quarter of fiscal year 2025, Management changed its indefinite investment assertions relating to the portion of accumulated earnings and profits in China that may be repatriated in the future and updated its deferred tax liability based on the withholding tax expected in connection with future repatriation.

Accordingly, management estimates that future repatriations of cash from China may result in approximately $ 0.3 million of withholding tax.

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Withholding taxes will not apply to future repatriations from Mexico or Vietnam.

The Company expects to repatriate a portion of its foreign earnings based on increased net sales growth driving additional capital requirements domestically, cash requirements for potential acquisitions and to implement certain tax strategies.

The Company expects to repatriate approximately $ 2.9 million from China, in the future.

2 unchanged sentences

Fiscal Year Ended

June 29, 2024 July 1, 2023 July 2, 2022

June 28, 2025 June 29, 2024

(in thousands)

2 unchanged sentences

Foreign tax rate differences 284 ( 71 )

Net operating loss carryback — — ( 593 )

Effect of income tax credits ( 569 ) ( 929 )

1 unchanged sentence

Inflation adjustments 115 132

Tax penalties & interest included in tax provision — — 179

Deferred income tax on unremitted foreign earnings ( 474 ) 39

Global Intangible Low-Taxed Income (GILTI) tax — 53

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Other ( 8 ) ( 15 )

Income tax provision (benefit) $ ( 2,400 ) $ 1,143 $ 314

The domestic and foreign components of income before income taxes were:

Income tax benefit $ ( 3,643 ) $ ( 2,400 )

The domestic and foreign components of loss before income taxes were:

Fiscal Year Ended

June 29, 2024 July 1, 2023 July 2, 2022

June 28, 2025 June 29, 2024

(in thousands)

1 unchanged sentence

Foreign 7,730 8,352

Income before income taxes $ ( 5,187 ) $ 6,300 $ 3,691

Loss before income taxes $ ( 11,961 ) $ ( 5,187 )

Deferred income tax assets and liabilities consist of the following at:

June 29, 2024 July 1, 2023 July 2, 2022

June 28, 2025 June 29, 2024

(in thousands)

1 unchanged sentence

Tax credit carryforwards, net $ 8,121 $ 7,544

Net operating loss — — 486

Inventory 240 252

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Fiscal Year Ended

June 29, 2024 July 1, 2023 July 2, 2022

June 28, 2025 June 29, 2024

(in thousands)

8 unchanged sentences

The Company has not recognized any interest or penalties in the fiscal years presented in these financial statements.

The Company is subject to income tax in the U.S.

is subject to income tax in the U.S.

federal jurisdiction, various state jurisdictions, Mexico, China and Vietnam.

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EARNINGS PER SHARE

Basic earnings per share (EPS) is calculated by dividing net income (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period.

Basic earnings per share (EPS) is calculated by dividing net loss (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period.

Diluted EPS is computed by including both the weighted-average number of shares outstanding and any dilutive common share equivalents in the denominator.

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Fiscal Year Ended (in thousands, except per share information)

June 29, 2024 July 1, 2023 July 2, 2022

Net income (loss) $ ( 2,787 ) $ 5,157 $ 3,377

June 28, 2025 June 29, 2024

Net loss $ ( 8,318 ) $ ( 2,787 )

Weighted average shares outstanding—basic 10,762 10,762

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Weighted average shares outstanding—diluted 10,762 10,762

Net income (loss) per share—basic $ ( 0.26 ) $ 0.48 $ 0.31

Net income (loss) per share—diluted $ ( 0.26 ) $ 0.47 $ 0.31

Antidilutive SARs not included in diluted earnings per share 515 376 619

Net loss per share—basic $ ( 0.77 ) $ ( 0.26 )

Net loss per share—diluted $ ( 0.77 ) $ ( 0.26 )

Antidilutive stock-based awards not included in diluted earnings per share 11 515

STOCK-BASED COMPENSATION AND BENEFIT PLANS

The Company’s incentive plan provides for equity and liability awards to employees and non-employee directors in the form of stock options, stock appreciation rights (SARs), restricted stock, restricted stock units, stock awards, stock units, performance shares, performance units, and other stock-based or cash-based awards.

The Company’s 2024 Incentive Plan provides for equity and liability awards to employees and non-employee directors with service and performance vesting conditions in the form of stock options, stock appreciation rights (SARs), restricted stock, restricted stock units, stock awards, stock units, performance shares, performance units, and other stock-based or cash-based awards.

The 2024 Incentive Plan replaced the previous 2010 Incentive Plan, which provided for similar awards, and expired on October 24, 2024.

At June 28, 2025, 1,596,135 shares were available for grant from the 2024 Incentive Plan.

New shares of common stock are issued upon the exercise of SARs or when vesting conditions on restricted stock units are fully satisfied.

Compensation cost is recognized on a straight-line basis over the requisite employee service period, which is generally the vesting period, and is recorded as employee compensation expense in cost of goods sold, research, development and engineering, and selling, general and administrative expenses.

Share-based compensation is recognized only for those awards that are expected to vest, with forfeitures estimated at the date of grant based on historical experience and future expectations.

In addition to service conditions, these SARs contain a performance condition.

Share-based compensation is recognized only for those awards that are expected to vest.

For SARs awards forfeitures are estimated at the date of grant based on historical experience and future expectations.

Due to a lack of historical experience and a different grant pool than SARs, forfeitures for restricted stock units are accounted for prospectively as they occur.

Stock Appreciation Rights

In addition to service conditions, SARs contain a performance condition.

The additional performance condition is based upon the achievement of Return on Invested Capital (ROIC) goals relative to a peer group.

All awards with performance conditions are measured over the vesting period and are charged to compensation expense over the requisite service period based on the number of shares expected to vest.

The SARs cliff vest after a three-year period from date of grant based on the performance metric and expire five years from date of grant.

On July 29, 2022, the Compa ny granted 145,000 SARs under the 2010 Incentive Plan to certain key employees and outside directors at a strike price of $ 5.10 and a grant date fair value of $ 2.09 .

As of June 29, 2024, 136,250 remain outstanding.

The grant date fair value for the awards granted during fiscal year 2023, were estimated using the Black Scho les option valuation method with the following weighted average assumptions as of July 29, 2022:

Fiscal Year 2023

July 29, 2022

Expected dividend yield — %

Risk-free interest rate 3.01 %

Expected volatility 48.56 %

Expected life 4.00

On August 9, 2021, the Compa ny granted 165,000 SARs under the 2010 Incentive Plan to certain key employees and outside directors at a strike price of $ 7.17 and a grant date fair value of $ 2.73 .

As of June 29, 2024, 136,250 remain outstanding.

The grant date fair value for the awards granted during fiscal year 2022, were estimated using the Black Scho les option valuation method with the following weighted average assumptions as of August 9, 2021:

Fiscal Year 2022

August 9, 2021

Expected dividend yield — %

Risk-free interest rate 0.62 %

Expected volatility 48.58 %

Expected life 4.00

The Black-Scholes option valuation model is used by the Company for estimating the fair value of SARs.

Option valuation models require the input of highly subjective assumptions, particularly for the expected term and expected stock price volatility.

Changes in these assumptions can materially affect the fair value estimates.

Share-based compensation expense is recognized only for those awards that are expected to vest, with forfeitures estimated at the date of grant based on the Company’s historical experience and future expectations.

This forfeiture rate will be revised, if necessary, in subsequent periods if actual forfeitures differ from the amount estimated.

Share-based compensation expense for fiscal years ended June 29, 2024, July 1, 2023 and July 2, 2022 was $( 0.4 ) million, $ 0.3 million and $ 0.3 million, respectively.

The fiscal year 2024 amount relates to reversal of prior expense for which performance metrics were not ultimately attained.

There were no SARs exercised during fiscal year 2024, fiscal year 2023 and fiscal year 2022.

As of June 29, 2024, total unrecognized compensation expense related to nonvested share-based compensation arrangements was approximately $ 0.1 million.

This expense is expected to be recognized over a weighted-average period of 1.0 years.

The following table summarizes the Company’s SARs activity from July 3, 2021 through June 29, 2024:

For Grant SARs

Outstanding Aggregate

All awards with performance conditions are evaluated quarterly to determine the likelihood that performance metrics will be achieved during the performance period.

These awards are charged to compensation expense over the requisite service period based on the number of shares expected to vest.

If the performance and service conditions are attained, then the SARs cliff vest after the completion of the three-year period from date of grant and expire five years from date of grant.

SARs Aggregate

thousands) Weighted

Price Weighted

Balances, July 3, 2021 688,084 791,250 $ 7.15 1.9

SARs granted ( 165,000 ) 165,000 $ 7.17

SARs expired 197,500 ( 197,500 ) $ 8.17

Balances, July 2, 2022 720,584 758,750 $ — $ 6.89 2.1

SARs granted ( 145,000 ) 145,000 $ 5.10

Balance, July 1, 2023 626,250 $ — $ 6.41 2.2

SARs forfeited ( 137,500 ) 6.9

SARs expired ( 101,250 ) 8.17

Balances, July 1, 2023 853,084 626,250 $ — $ 6.41 2.2

Balance, June 30, 2024 387,500 $ — 5.78 1.8

SARs forfeited ( 136,250 ) 7.17

SARs expired ( 115,000 ) 4.93

Balances, June 29, 2024 1,091,834 387,500 $ — $ 5.78 1.8

Balance, June 28, 2025 136,250 $ — $ 5.10 2.1

Exercisable at June 28, 2025 — — — —

The Black-Scholes option valuation model is used by the Company for estimating the fair value of SARs.

Option valuation models require the input of highly subjective assumptions, particularly for the expected term and expected stock price volatility.

Changes in these assumptions can materially affect the fair value estimates.

There were no SARs granted during fiscal years ended June 28, 2025 and June 29, 2024.

This forfeiture rate will be revised, if necessary, in subsequent periods if actual forfeitures differ from the amount estimated.

Total SARs expense recognized during fiscal years ended June 28, 2025 and June 29, 2024 was approximately $( 141,000 ) and $( 400,000 ), respectively

There were no SARs exercised during fiscal years ended June 28, 2025 or June 29, 2024.

As of June 28, 2025, there is no unrecognized compensation expense for SARs awards due to unachieved performance.

Restricted Stock Units

The Company grants restricted stock units that have a performance condition and/or a service condition.

Restricted stock units with only a service condition generally vest in equal annual installments over a maximum of three years .

Certain restricted stock units are granted with a performance condition.

The final number of shares issued will be determined annually based on the achievement of annual financial targets.

Forfeitures for restricted stock units are accounted for prospectively as they occur.

The fair value of restricted stock units is the market close price on the date of grant.

The Company granted 329,457 restricted stock units at a weighted average grant date fair value of $ 4.52 per share during the fiscal year ended June 28, 2025.

During the same period, 47,880 restricted stock units with a weighted average grant date fair value of $ 4.52 per share were forfeited due to not meeting the minimum performance threshold as of June 28, 2025 .

Total restricted stock unit expense recognized during the fiscal year ended June 28, 2025 was approximately $ 359,000 .

As of June 28, 2025, total unrecognized compensation expense on restricted stock units was $ 0.9 million, which is expected to be recognized over a weighted average period of approximately 2.09 years.

The company has defined contribution plans available to U.S.

employees who have attained age 21.

Company contributions to the plans were approximately $ 1.3 million, $ 1.1 million and $ 0.9 million during fiscal years 2024, 2023 and 2022, respectively.

Company contributions to the plans were approximately $ 1.4 million during fiscal years ended June 28, 2025 and $ 1.3 million during June 29, 2024, respectively.

COMMITMENTS AND CONTINGENCIES

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The determination of such allowances requires the Company to make estimates of product return rates and expected costs to repair or to replace the products under warranty.

If actual return rates and/or repair and replacement costs

differ significantly from management's estimates, adjustments to recognize additional cost of sales may be required in future periods.

As of June 29, 2024, July 1, 2023, and July 2, 2022 the reserve for warranty costs was approximately $ 164,000 , $ 29,000 , and $ 31,000 respectively.

If actual return rates and/or repair and replacement costs differ significantly from management's estimates, adjustments to recognize additional cost of sales may be required in future

As of June 28, 2025 and June 29, 2024, the reserve for warranty costs was approximately $ 26,000 and $ 164,000 respectively.

Please refer to Footnote “Leases” of the “Notes to Consolidated Financial Statements” for information regarding lease commitments.

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DERIVATIVE FINANCIAL INSTRUMENTS

A significant portion of our operations are in foreign locations, which results in transactions occurring in currencies other than the U.S.

As a part of our risk management strategy, we use Mexican Peso forward contracts to hedge foreign currency fluctuations for a portion of our Mexican Peso denominated expenses.

As of June 28, 2025, the Company had outstanding foreign currency forward contracts with a total notional amount of $ 12.9 million.

The maturity dates for these contracts extend through December 2025.

For the three months ended June 29, 2024, the Company entered into $ 12.5 million of foreign currency forward contracts and did not settle any of contracts.

During the same period of the previous year, the Company did not enter or settle any foreign currency forward contracts.

For the twelve months ended June 29, 2024, the Company entered into $ 19.0 million of foreign currency forward contracts and settled $ 6.5 million of contracts.

During the same period of the previous year, the Company did not enter into or settle any foreign currency forward contracts.

On November 6, 2019, the Company entered into an interest rate swap contract with an effective date of November 6, 2019 and a termination date of September 30, 2022, related to the borrowings outstanding under the term loan with Wells Fargo Bank.

This interest rate swap contract was terminated on August 14, 2020 when the Company entered into a loan and security agreement with Bank of America.

At date of termination this interest rate swap was in a liability position of $ 148,400 , which was amortized to interest expense over the original term of the swap.

For the three months ended June 28, 2025, the Company did not enter into any foreign currency forward contracts and settled $ 8.0 million of such contracts.

During the same period of the previous year, the Company entered $ 12.5 million of foreign currency forward contracts and did not settle any of such contracts.

For the twelve months ended June 28, 2025, the Company entered into $ 29.0 million of foreign currency forward contracts and settled $ 28.6 million of such contracts.

During the same period of the previous year, the Company entered into $ 19.0 million of foreign currency forward contracts and settled $ 6.5 million of such contracts.

Changes in the fair value of the forward contracts are recognized as a component of OCI and will be recognized in cost of sales when the hedged item affects earnings.

The amount of net gains expected to be reclassified into earnings in the next 6 months is $ 1.1 million.

On November 6, 2019, the Company entered into an interest rate swap contract with an effective date of November 6, 2019 and a termination date of November 1, 2023, related to the borrowings outstanding under the line of credit with Wells Fargo Bank.

This interest rate swap contract was terminated on August 14, 2020 when the Company entered into a loan and security agreement with Bank of America.

At date of termination this interest rate swap was in a liability position of $ 776,500 , which was amortized to interest expense over the original term of the swap.

The following table summarizes the fair value of the derivative instruments in the Consolidated Balance Sheets as of June 29, 2024, July 1, 2023 and July 2, 2022 (in thousands):

Derivatives designated as hedging instruments under Subtopic 815-20 Balance Sheet Location June 29, 2024 July 1, 2023 July 2, 2022

This interest rate swap contract was terminated on August 14, 2020 when the Company entered into the Loan Agreement with Bank of America.

On the date of termination this interest rate swap was in a liability position of $ 776,500 , which has been amortized to interest expense over the original term of the swap.

The following table summarizes the fair value of the derivative instruments in the Consolidated Balance Sheets as of June 28, 2025 and June 29, 2024 (in thousands):

Derivatives designated as hedging instruments under Subtopic 815-20 Balance Sheet Location June 28, 2025 June 29, 2024

Foreign currency forward contracts Other current assets $ 1,330 $ —

Foreign currency forward contracts Other current liabilities $ — $ ( 277 )

1 unchanged sentence

Derivatives Designated as Hedging Instruments Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) AOCI Balance

July 1, 2023 Effective

June 29, 2024 Effective

AOCI Effective Portion

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Forward contracts Cost of sales 215 ( 2,803 ) 1,559 ( 1,029 )

Interest rate swap Interest expense ( 97 ) — 97 —

Total $ 215 ( 2,803 ) 1,559 ( 1,029 )

4 unchanged sentences

Income AOCI Balance

Forward contracts Cost of sales $ ( 79 ) $ — $ 79 $ —

Interest rate swap Interest expense ( 346 ) — 249 ( 97 )

Total $ ( 425 ) $ — $ 328 $ ( 97 )

Derivatives Designated as Hedging Instruments Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) AOCI Balance

June 28, 2021 Effective

AOCI Effective Portion

Reclassified From

Income AOCI Balance

June 29, 2024

Forward contracts Cost of sales $ — $ 287 $ ( 72 ) $ 215

2 unchanged sentences

As of June 28, 2025, the Company does not have any foreign exchange contracts with credit-risk-related contingent features.

The Company is subject to the risk of fluctuating interest rates from our line of credit and foreign currency risk resulting from our China operations.

The Company is subject to the risk of fluctuating interest rates from our line of credit and foreign currency risk resulting from our China and Vietnam operations.

The Company does not currently manage these risk exposures by using derivative instruments.

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and Level 3 – inputs are unobservable inputs for the asset or liability.

There have been no changes in the fair value methodologies used at June 29, 2024, July 1, 2023, and July 2, 2022 .

The carrying values of cash and cash equivalents, accounts receivable, contract assets, and current liabilities are reflected on the balance sheets at June 29, 2024, July 1, 2023, and July 2, 2022 and reasonably approximate their fair value.

The Company’s long-term debt, which is measured at amortized cost, primarily consists of an asset-based revolving credit facility, and equipment loans.

These borrowings bear interest at SOFR plus 4.5 % per the loan agreement.

Each of these rates is a variable floating rate dependent upon current market conditions and the Company’s current credit risk as discussed in Footnote “Long-Term Debt” of the “Notes to Consolidated Financial Statements.”

There have been no changes in the fair value methodologies used at June 28, 2025 and June 29, 2024.

The carrying values of cash and cash equivalents, accounts receivable, contract assets, and current liabilities are reflected on the balance sheets at June 28, 2025 and June 29, 2024 and reasonably approximate their fair value.

The Company’s long-term debt, which is measured at amortized cost, primarily consists of an asset-based revolving credit facility, term loans, and equipment loans.

The asset-based revolving credit facility and Callodine term loan borrowings bear interest at Adjusted SOFR per the loan agreements.

Each of these rates is a variable floating rate dependent upon current market conditions and the Company’s current average availability as discussed along with the interest rates for all long-term debt agreements in Footnote “Long-Term Debt” of the “Notes to Consolidated Financial Statements.”

As a result of the determinable market rates for our asset-based revolving credit facility and equipment loans, they are classified within Level 2 of the fair value hierarchy.

Further, the carrying value of each of these instruments reasonably approximates their fair value as of June 29, 2024, July 1, 2023, and July 2, 2022.

ENTERPRISE-WIDE DISCLOSURES

Further, the carrying value of each of these instruments reasonably approximates their fair value as of June 28, 2025 and June 29, 2024.

SEGMENT INFORMATION AND ENTERPRISE-WIDE DISCLOSURES

Operating segments are defined in ASC Topic 280, Segment Reporting as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance.

2 unchanged sentences

This segment provides integrated electronic and mechanical engineering, assembly, sourcing and procurement, logistics, and new product testing for our customers.

The chief operating decision maker assesses performance and determines resource allocation for the Company’s single reportable segment based on consolidated net income/loss and total assets/liabilities.

The accounting policies of the single reportable segment are the same as those described in the summary of significant accounting policies.

Significant segment measures include gross profit which is primarily composed of materials spend and labor costs, which are further presented below.

Products and Services

Of the revenues for the years ended June 29, 2024, July 1, 2023, and July 2, 2022 contract manufacturing sales and services were $ 566.9 million, $ 605.3 million, and $ 544.2 million respectively.

Of the revenues for the years ended June 28, 2025, and June 29, 2024 contract manufacturing sales and services were $ 467.9 million and $ 566.9 million, respectively.

Geographic Areas

Net sales and long-lived assets (property, plant, and equipment) by geographic area for the years ended and as of June 29, 2024, July 1, 2023, and July 2, 2022 are summarized in the following table.

Net sales and long-lived assets (property, plant, and equipment) by geographic area for the years ended and as of June 28, 2025 and June 29, 2024 are summarized in the following table.

Net sales set forth below are based on the shipping destination.

2 unchanged sentences

(in thousands)

Restated Restated

2024 2023 2022

Geographic net sales:

10 unchanged sentences

Fiscal Year Ended

2024 2023 2022

United States 79 % 77 %

2 unchanged sentences

Total 100 % 100 %

(a) No other individual foreign country accounted for 10% or more of the foreign sales in fiscal years 2024 or 2023.

(a) No other individual foreign country accounted for 10% or more of the foreign sales in fiscal years 2025 and 2024

Significant Customers

4 unchanged sentences

Customer A 25 % 20 % 16 % 21 %

Customer B * * 13 % * * *

Significant Segment Measures

In accordance with the adoption of ASU 2023-07 in 2025, the Company determined that significant segment measures included gross profit which is primarily composed of materials and labor costs as follows (in thousands):

Twelve Months Ended

June 28, 2025 June 29, 2024

Materials $ 276,366 $ 354,080

Labor costs 111,682 125,856

Other 43,396 47,127

Total Cost of sales $ 431,444 $ 527,063

Revenue Recognition

33 unchanged sentences

Contract Assets

Beginning balance, July 1, 2023

Beginning balance, June 29, 2024

Revenue recognized $ 443,294

1 unchanged sentence

Ending balance, June 28, 2025

The following table summarizes the activity in the Company’s contract assets during the twelve months ended July 1, 2023 (in thousands):

Contract Assets

Beginning balance, July 2, 2022

Revenue recognized 590,624

Amounts collected or invoiced ( 582,673 )

Ending balance, July 1, 2023

The following table summarizes the activity in the Company’s contract assets during the twelve months ended July 2, 2022 (in thousands):

The following table summarizes the activity in the Company’s contract assets during the twelve months ended June 29, 2024 (in thousands):

Contract Assets

2 unchanged sentences

Amounts collected or invoiced ( 506,023 )

Ending balance, July 2, 2022

Ending balance, June 29, 2024

Disaggregation of Revenue

The following table presents the Company’s revenue disaggregated for the twelve months ended June 29, 2024, the twelve months ended July 1, 2023, and the twelve months ended July 2, 2022 (in thousands):

Recognition June 29, 2024 July 1, 2023 (Restated) July 2, 2022 (Restated)

The following table presents the Company’s revenue disaggregated for the twelve months ended June 28, 2025, the twelve months ended June 29, 2024, (in thousands):

Recognition June 28, 2025 June 29, 2024

Over-Time $ 443,294 $ 497,348

1 unchanged sentence

Total $ 467,871 $ 566,942

Revenues and associated costs from engineering design, development services and tooling, which are performed under contract of short term durations, are recognized over time as the services are performed.

The Company has several commitments under operating and financing leases for warehouses, manufacturing facilities, office buildings, and equipment with initial terms that expire at various dates during the next 1 year to 6 years.

3 unchanged sentences

The weighted average discount rate is disclosed in the tables below.

The components of lease cost were as follows as of June 29, 2024, July 1, 2023 and July 2, 2022 (in thousands):

Year Ended Year Ended Year Ended

Lease cost Classification June 29, 2024 July 1, 2023 July 2, 2022

The components of lease cost were as follows as of June 28, 2025 and June 29, 2024 (in thousands):

Year Ended Year Ended

Lease cost Classification June 28, 2025 June 29, 2024

Operating lease cost Cost of sales $ 5,135 $ 4,814

6 unchanged sentences

Total lease cost $ 9,407 $ 10,619

Amounts reported in the Consolidated Balance Sheet as of June 29, 2024, July 1, 2023 and July 2, 2022 were (in thousands, except weighted average lease term and discount rate):

June 29, 2024 July 1, 2023 July 2, 2022

Amounts reported in the Consolidated Balance Sheet as of June 28, 2025 and June 29, 2024 were (in thousands, except weighted average lease term and discount rate):

June 28, 2025 June 29, 2024

Operating Leases:

1 unchanged sentence

Operating lease liabilities (1)

$ 11,347 $ 15,416

Weighted-average remaining lease term (in years)

16 unchanged sentences

2027 3,404 519

2028 2,324 606

Thereafter 352 —

2 unchanged sentences

Total lease liabilities $ 11,347 $ 1,912

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

In connection with the preparation of the Company's consolidated financial statements as of and for the year ended June 29, 2024, the Company concluded that cost recovery of material price variances was not being consistently recorded across its facilities.

Material price variance occurs when the price the Company pays for materials exceeds the price quoted to customers, and the Company typically recovers the excess cost from customers through a sales price adjustment.

Per Company policy, this

cost recovery should be recorded as net sales when inventory enters the production process, however, certain of the Company’s facilities were recording the cost recovery as a reduction to cost of sales.

These errors resulted in an understatement of both net sales and cost of sales for the years ended July 1, 2023 and July 2, 2022 (the "impacted annual periods").

As a result, the Company has restated its consolidated statements of operations for the impacted annual periods presented herein.

The nature of the restatement adjustments shown below and their impact on the previously issued consolidated statements of operations is to increase net sales and increase cost of sales to appropriately reflect these transactions as sales price adjustments.

Fiscal Year Ended 7/1/2023

CORRECTED CONSOLIDATED STATEMENT OF OPERATIONS (in thousands, except per share information) As previously reported Adjustments As restated

Net sales $ 588,135 $ 17,180 $ 605,315

Cost of sales 540,663 17,180 557,843

Gross profit 47,472 — 47,472

Research, development and engineering expenses 9,735 — 9,735

Selling, general and administrative expenses 25,715 — 25,715

Gain on insurance proceeds, net of losses ( 4,301 ) — ( 4,301 )

Total operating expenses 31,149 — 31,149

Operating income 16,323 — 16,323

Interest expense, net 10,023 — 10,023

Income before income taxes 6,300 — 6,300

Income tax provision 1,143 — 1,143

Net income $ 5,157 $ — $ 5,157

Net income per share — Basic $ 0.48 $ — $ 0.48

Weighted average shares outstanding — Basic 10,762 — 10,762

Net income per share — Diluted $ 0.47 $ — $ 0.47

Weighted average shares outstanding — Diluted 10,938 — 10,938

Fiscal Year Ended 7/2/2022

CORRECTED CONSOLIDATED STATEMENT OF OPERATIONS (in thousands, except per share information) As previously reported Adjustments As restated

Net sales $ 531,815 $ 12,362 $ 544,177

Cost of sales 488,601 12,362 500,963

Gross profit 43,214 — 43,214

Research, development and engineering expenses 9,821 — 9,821

Selling, general and administrative expenses 24,598 — 24,598

Gain on insurance proceeds, net of losses — — —

Total operating expenses 34,419 — 34,419

Operating income 8,795 — 8,795

Interest expense, net 5,104 — 5,104

Income before income taxes 3,691 — 3,691

Income tax provision 314 — 314

Net income $ 3,377 $ — $ 3,377

Net income per share — Basic $ 0.31 $ — $ 0.31

Weighted average shares outstanding — Basic 10,762 — 10,762

Net income per share — Diluted $ 0.31 $ — $ 0.31

Weighted average shares outstanding — Diluted 11,063 — 11,063

All referenced amounts for prior periods in these financial statements and the notes herein reflect the balances and amounts on a restated basis.

RESTATEMENT AND REVISION OF INTERIM FINANCIAL INFORMATION

Restatement of Unaudited Consolidated Statements of Operations

In connection with the preparation of the Company’s consolidated financial statements as of and for the year ended June 29, 2024, the Company concluded that cost recovery of material price variances was not being consistently recorded across its facilities.

Per Company policy, this cost recovery should be recorded as net sales when inventory enters the production process, however, certain of the Company’s facilities were recording the cost recovery as a reduction to cost of sales.

These errors resulted in an understatement of both net revenues and cost of sales for the quarters ended March 30, 2024, December 30, 2023, September 30, 2023, April 1, 2023, December 31, 2022, October 1, 2022, April 2, 2022, January 1, 2022, and October 2, 2022 (the “impacted quarterly periods”).

As a result of these errors, the Company has restated its unaudited consolidated statements of operations for the impacted quarterly periods in the following tables.

The unaudited consolidated balance sheets, statements of comprehensive income, shareholders’ equity and cash flows for the impacted quarters were not impacted by the errors noted above and have not been restated;

provided, that the unaudited consolidated balance sheets as of March 30, 2024, December 30, 2023, September 30, 2023 have been revised as a result of error related to the adoption of ASU 326 as discussed below under "Revision of Unaudited Consolidated Balance Sheets."

Interim periods - fiscal year 2024 (in thousands, except per share information)

CORRECTED CONSOLIDATED STATEMENT OF OPERATIONS As restated - three months ended 9/30/23 As restated - three months ended 12/30/23 As restated - three months ended 3/30/24 Three months ended 6/29/24 Twelve months ended 6/29/24

Net sales $ 150,112 [1] $ 147,847 [2] $ 142,427 [3] $ 126,556 $ 566,942

Cost of sales 139,250 [1] 136,084 [2] 134,346 [3] 117,383 527,063

Gross profit 10,862 11,763 8,081 9,173 39,879

Research, development and engineering expenses 2,241 1,758 2,234 2,100 8,333

Selling, general and administrative expenses 5,784 6,057 6,422 6,956 25,219

Gain on insurance proceeds, net of losses ( 431 ) — — — ( 431 )

Total operating expenses 7,594 7,815 8,656 9,056 33,121

Operating income 3,268 3,948 ( 575 ) 117 6,758

Interest expense, net 3,011 2,961 2,800 3,173 11,945

Income (loss) before income taxes 257 987 ( 3,375 ) ( 3,056 ) ( 5,187 )

Income tax provision (benefit) ( 78 ) ( 97 ) ( 1,154 ) ( 1,071 ) ( 2,400 )

Net income (loss) $ 335 $ 1,084 $ ( 2,221 ) $ ( 1,985 ) $ ( 2,787 )

Net income (loss) per share — Basic $ 0.03 $ 0.10 $ ( 0.21 ) $ ( 0.18 ) $ ( 0.26 )

Weighted average shares outstanding — Basic 10,762 10,762 10,762 10,762 10,762

Net income (loss) per share — Diluted $ 0.03 $ 0.10 $ ( 0.21 ) $ ( 0.18 ) $ ( 0.26 )

Weighted average shares outstanding — Diluted 11,003 10,889 10,762 10,762 10,762

[1] - Includes an increase of $ 2,349 over amounts previously reported in the Net Sales and Cost of Sales lines, respectively.

[2] - Includes an increase of $ 2,430 over amounts previously reported in the Net Sales and Cost of Sales lines, respectively.

[3] - Includes an increase of $ 1,900 over amounts previously reported in the Net Sales and Cost of Sales lines, respectively.

Interim periods - fiscal year 2023 (in thousands, except per share information)

CORRECTED CONSOLIDATED STATEMENT OF OPERATIONS As restated - three months ended 10/1/22 As restated - three months ended 12/31/22 As restated - three months ended 4/1/23 As restated - three months ended 7/1/23 As restated - twelve months ended 7/1/23

Net sales $ 140,971 [1] $ 127,592 [2] $ 167,758 [3] $ 168,994 [4] $ 605,315

Cost of sales 130,592 [1] 118,672 [2] 153,482 [3] 155,096 [4] 557,843

Gross profit 10,379 8,920 14,276 13,898 47,472

Research, development and engineering expenses 2,296 2,287 2,580 2,573 9,735

Selling, general and administrative expenses 5,656 5,735 6,961 7,363 25,715

Gain on insurance proceeds, net of losses ( 934 ) ( 2,710 ) ( 396 ) ( 261 ) ( 4,301 )

Total operating expenses 7,018 5,312 9,145 9,675 31,149

Operating income 3,361 3,608 5,131 4,223 16,323

Interest expense, net 1,887 2,507 2,688 2,941 10,023

Income before income taxes 1,474 1,101 2,443 1,282 6,300

Income tax provision 322 134 467 220 1,143

Net income $ 1,152 $ 967 $ 1,976 $ 1,062 $ 5,157

Net income per share — Basic $ 0.11 $ 0.09 $ 0.18 $ 0.10 $ 0.48

Weighted average shares outstanding — Basic 10,762 10,762 10,762 10,762 10,762

Net income per share — Diluted $ 0.11 $ 0.09 $ 0.18 $ 0.10 $ 0.47

Weighted average shares outstanding — Diluted 10,832 10,832 10,865 10,996 10,938

[1] - Includes an increase of $ 3,708 over amounts previously reported in the Net Sales and Cost of Sales lines, respectively.

[2] - Includes an increase of $ 3,884 over amounts previously reported in the Net Sales and Cost of Sales lines, respectively.

[3] - Includes an increase of $ 3,205 over amounts previously reported in the Net Sales and Cost of Sales lines, respectively.

[4] - Includes an increase of $ 6,384 over amounts previously reported in the Net Sales and Cost of Sales lines, respectively.

Interim periods - fiscal year 2022 (in thousands, except per share information)

CORRECTED CONSOLIDATED STATEMENT OF OPERATIONS As restated - three months ended 10/2/21 As restated - three months ended 1/1/22 As restated - three months ended 4/2/22 As restated - three months ended 7/2/22 As restated - twelve months ended 7/2/22

Net sales $ 133,130 [1] $ 136,407 [2] $ 140,714 [3] $ 133,926 [4] $ 544,177

Cost of sales 122,992 [1] 126,599 [2] 129,206 [3] 122,166 [4] 500,963

Gross profit 10,138 9,808 11,508 11,760 43,214

Research, development and engineering expenses 2,449 2,498 2,526 2,348 9,821

Selling, general and administrative expenses 5,595 5,659 6,193 7,151 24,598

Gain on insurance proceeds, net of losses — — — — —

Total operating expenses 8,044 8,157 8,719 9,499 34,419

Operating income 2,094 1,651 2,789 2,261 8,795

Interest expense, net 992 1,095 1,551 1,466 5,104

Income before income taxes 1,102 556 1,238 795 3,691

Income tax provision (benefit) 287 ( 31 ) 231 ( 173 ) 314

Net income $ 815 $ 587 $ 1,007 $ 968 $ 3,377

Net income per share — Basic $ 0.08 $ 0.05 $ 0.09 $ 0.09 $ 0.31

Weighted average shares outstanding — Basic 10,762 10,762 10,762 10,762 10,762

Net income per share — Diluted $ 0.07 $ 0.05 $ 0.09 $ 0.09 $ 0.31

Weighted average shares outstanding — Diluted 11,052 11,057 11,062 11,071 11,063

[1] - Includes an increase of $ 368 over amounts previously reported in the Net Sales and Cost of Sales lines, respectively.

[2] - Includes an increase of $ 1,951 over amounts previously reported in the Net Sales and Cost of Sales lines, respectively.

[3] - Includes an increase of $ 2,323 over amounts previously reported in the Net Sales and Cost of Sales lines, respectively.

[4] - Includes an increase of $ 7,720 over amounts previously reported in the Net Sales and Cost of Sales lines, respectively.

Revision of Unaudited Consolidated Balance Sheets

In addition, in connection with the preparation of the Company’s consolidated financial statements as of and for the year ended June 29, 2024, the Company concluded that it had not recorded an immaterial adjustment related to its adoption on July 2, 2023 of ASU 2016-13 Financial Instruments - Credit Losses (ASU 326):

Measurement of Credit Losses on Financial Instruments .

As of July 2, 2023, the Company should have performed an assessment and recorded any adjustment as a modified retrospective adjustment through its opening retained earnings balance.

The error resulted in an immaterial overstatement of accounts receivable, contract assets, other assets and retained earnings as of March 30, 2024, December 30, 2023 and September 30, 2023.

Given the restatement described above, the Company elected to revise its unaudited consolidated balance sheets as of March 30, 2024, December 30, 2023 and September 30, 2023 in the following tables.

The related unaudited consolidated statements of operations, statements of comprehensive income, shareholders’ equity and cash flows were not materially impacted by this error and have not been revised for this matter.

CORRECTED CONSOLIDATED BALANCE SHEETS (in thousands) As revised - as of 9/30/23 As revised - as of 12/30/23 As revised - as of 3/30/24

Current assets:

Cash and cash equivalents $ 3,574 $ 2,953 $ 5,255

Trade receivables, net of credit losses [1] 138,463 $ 131,913 $ 132,663

Contract assets [1] 32,878 $ 27,745 $ 28,594

Inventories 126,778 $ 124,054 $ 115,115

Other [1] 21,700 $ 21,382 $ 20,994

Total current assets 323,393 $ 308,047 $ 302,621

Property, plant and equipment, net 28,085 $ 28,935 $ 29,046

Operating lease right-of-use assets, net 15,928 $ 18,104 $ 16,790

Other assets:

Deferred income tax asset [1] 14,161 $ 14,117 $ 15,533

Other 7,500 $ 6,243 $ 6,109

Total other assets 21,661 $ 20,360 $ 21,642

Total assets $ 389,067 $ 375,446 $ 370,099

LIABILITIES AND SHAREHOLDERS ’ EQUITY

Current liabilities:

Accounts payable $ 101,638 $ 91,358 $ 82,198

Accrued compensation and vacation 11,860 $ 5,677 $ 7,071

Current portion of long-term debt 2,886 $ 3,068 $ 3,094

Other 16,640 $ 18,263 $ 17,040

Total current liabilities 133,024 $ 118,366 $ 109,403

Long-term liabilities:

Long-term debt, net 115,789 $ 114,894 $ 122,193

Operating lease liabilities 10,939 $ 12,380 $ 11,351

Deferred income tax liability 324 22 $ 19

Other long-term obligations 1,201 627 $ 336

Total long-term liabilities 128,253 127,923 $ 133,899

Total liabilities 261,277 246,289 $ 243,302

Commitments and contingencies (Note 9)

Shareholders’ equity:

Common stock, no par value—shares authorized 25,000 ;

issued and outstanding 10,762 , 10,762 , and 10,762 shares, respectively

47,786 47,839 47,891

Retained earnings [1] 80,043 81,127 78,906

Accumulated other comprehensive (loss) income ( 39 ) 191 —

Total shareholders’ equity 127,790 129,157 126,797

Total liabilities and shareholders’ equity $ 389,067 $ 375,446 370,099

[1] - Each presented period includes a reduction for expected credit losses of $( 2,979 ) related to receivables, $( 1,230 ) related to Other, $( 25 ) related to Contract Assets, $ 956 related to deferred income tax asset, and $( 3,278 ) related to Retained Earnings.

These adjustments serve to reflect a modified retrospective adoption of ASC 326 - Financial Instruments, Credit Losses.

The related tax-effects and subsequent inter-period adjustments are considered immaterial for presentation on an interim basis.

As of June 28, 2025, we have additional operating and finance leases for commercial properties and equipment that have not yet commenced with future lease payments of approximately $ 28.6 million and $ 5.1 million, respectively.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

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