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Item 2. Management’s Discussion and Analysis

2025-07-30 compared with 2025-04-30 · 142 added, 84 removed, 196 unchanged (54% of the section changed)

41 unchanged sentences

Executive Summary

For the first quarter of 2025, the Company recognized net sales of $554.3 million, an increase of $18.9 million, or 3.5% as compared to $535.4 million in the first quarter of 2024 including $10.2 million or 1.9% of incremental net sales from the Dortmund Fab acquisition (defined below) in the semiconductor business within the Electronics segment and $6.6 million or 1.2% of unfavorable changes in foreign exchange rates.

The remaining increase in net sales was primarily due to higher volume in the Industrial and Electronics segments.

The Company recognized net income of $43.6 million, or $1.75 per diluted share, in the first quarter of 2025 compared to $48.5 million, or $1.93 per diluted share, in the first quarter of 2024.

The decrease in net income was primarily due to the higher effective tax rate and foreign exchange losses, which were partially offset by the higher operating income in the Electronics and Industrial segments driven by increases in net sales.

Net cash provided by operating activities was $65.8 million for the three months ended March 29, 2025 compared to $57.2 million for the three months ended March 30, 2024.

The increase in net cash provided by operating activities was primarily due to reductions in working capital and higher cash earnings.

For the second quarter of 2025, the Company recognized net sales of $613.4 million, an increase of $54.9 million, or 9.8% as compared to $558.5 million in the second quarter of 2024 including $13.4 million or 2.4% of incremental net sales from the Dortmund Fab acquisition (defined below) in the semiconductor business within the Electronics segment and $7.0 million or 1.3% of favorable changes in foreign exchange rates.

The remaining increase in net sales was primarily due to higher volume in the Electronics and Industrial segments.

The Company recognized net income of $57.3 million, or $2.30 per diluted share, in the second quarter of 2025 compared to $45.5 million, or $1.82 per diluted share, in the second quarter of 2024.

The increase in net income was primarily due to higher operating income across all segments driven by increases in net sales, volume leverage and cost saving initiatives, which were partially offset by higher foreign exchange losses.

Net cash provided by operating activities was $148.2 million for the six months ended June 28, 2025 compared to $126.6 million for the six months ended June 29, 2024.

The increase in net cash provided by operating activities was primarily due to higher cash earnings.

On December 31, 2024, the Company completed the acquisition of a 200mm wafer fab located in Dortmund, Germany (“Dortmund Fab”) from Elmos Semiconductor SE.

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The following table summarizes the Company’s unaudited condensed consolidated results of operations for the periods presented.

The first quarter of 2025 included $8.9 million of restructuring charges primarily related to employee termination costs, and $0.1 million impairment charge related to certain machinery and equipment within the Electronics segment.

The second quarter of 2025 included $2.5 million ($11.4 million year-to-date) of restructuring charges primarily related to employee termination costs.

During the first quarter of 2025, the Company recognized a $0.1 million impairment charge related to certain machinery and equipment within the Electronics segment.

See Note 7, Restructuring, Impairment, and Other Charges, for further discussion.

During the first quarter of 2025, the Company recognized $0.5 million of purchase accounting inventory step-down adjustment, and $0.1 million of legal and professional fees and other integration expenses related to completed and contemplated acquisitions.

The first quarter of 2024 included $2.3 million of restructuring charges primarily related to employee termination costs and a $0.9 million impairment charge related to certain machinery and equipment in the commercial vehicle business within the Transportation segment.

In addition, during the second quarter of 2025, the Company recognized $1.5 million ($1.6 million year-to-date) of legal and professional fees and other integration expenses related to completed and contemplated acquisitions.

During the first quarter of 2025, the Company recognized a $0.5 million purchase accounting inventory step-down adjustment related to the Dortmund Fab acquisition.

The second quarter of 2024 included $5.3 million ($7.6 million year-to-date) of restructuring charges primarily related to employee termination costs.

During the first quarter of 2024, the Company recognized a $0.9 million impairment charge related to certain machinery and equipment in the commercial vehicle business within the Transportation segment.

See Note 7, Restructuring, Impairment, and Other Charges, for further discussion.

In addition, during the first quarter of 2024, the Company recognized $0.9 million of legal and professional fees and other integration expenses related to completed and contemplated acquisitions, partially offset by a gain of $0.3 million recorded for the sale of a building in the commercial vehicle business within the Transportation segment.

First Quarter

In addition, during the second quarter of 2024, the Company recognized $0.8 million ($1.8 million year-to-date) of legal and professional fees and other integration expenses related to completed and contemplated acquisitions, partially offset by a gain of $0.7 million ($1.0 million year-to-date) recorded for the sale of two buildings within the Transportation segment.

Second Quarter First Six Months

(in thousands) 2025 2024 Change %

Change 2025 2024 Change %

Net sales $ 613,413 $ 558,489 $ 54,924 9.8 % $ 1,167,720 $ 1,093,874 $ 73,846 6.8 %

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Net income 57,342 45,466 11,876 26.1 % 100,913 93,918 6,995 7.4 %

Net sales increased $18.9 million, or 3.5%, for the first quarter of 2025 compared to the first quarter of 2024 including $10.2 million or 1.9% of incremental net sales from the Dortmund Fab acquisition in the semiconductor business within the Electronics segment and $6.6 million or 1.2% of unfavorable changes in foreign exchange rates.

The remaining increase in net sales was primarily due to higher volume of $15.7 million in the electronics products business within the Electronics segment and $11.3 million in the Industrial segment due to higher end market demand, partially offset by the lower volume from the remaining semiconductor business within the Electronics segment.

Net sales increased $54.9 million, or 9.8%, for the second quarter of 2025 compared to the second quarter of 2024 including $13.4 million or 2.4% of incremental net sales from the Dortmund Fab acquisition in the semiconductor business within the Electronics segment and $7.0 million or 1.3% of favorable changes in foreign exchange rates.

The remaining increase in net sales was primarily due to higher volume of $22.6 million in the electronics products business within the Electronics segment, $14.5 million in the Industrial segment, and $7.1 million and $5.5 million in the passenger car products and the commercial vehicle businesses, respectively, within the Transportation segment due to higher end market demand and favorable price, partially offset by lower volume from the remaining semiconductor business within the Electronics segment.

Net sales increased $73.8 million, or 6.8%, for the six months of 2025 compared to the six months of 2024 including $23.5 million or 2.2% of incremental net sales from the Dortmund Fab acquisition in the semiconductor business within the Electronics segment and $0.4 million of favorable changes in foreign exchange rates.

The remaining increase in net sales was primarily due to higher volume of $38.4 million in the electronics products business within the Electronics segment and $25.7 million in the Industrial segment due to higher end market demand and favorable price, partially offset by lower volume from the remaining semiconductor business within the Electronics segment.

Cost of Sales

Cost of sales was $347.1 million, or 62.6% of net sales, in the first quarter of 2025, compared to $347.6 million, or 64.9% of net sales, in the first quarter of 2024.

As a percent of net sales, cost of sales decreased 2.3% primarily driven by improved margins from the electronics products business within the Electronics segment and the industrial circuit protection business within the Industrial segment driven by volume leverage, favorable price, product mix and cost reduction initiatives.

Gross profit was $207.3 million, or 37.4% of net sales, in the first quarter of 2025 compared to $187.8 million, or 35.1% of net sales, for the first quarter of 2024.

The $19.4 million increase in gross profit was primarily due to higher volume and favorable price from the electronics products business within the Electronics segment and across all businesses within the Industrial segment.

Cost of sales was $381.4 million, or 62.2% of net sales, in the second quarter of 2025 compared to $351.5 million, or 62.9% of net sales, in the second quarter of 2024.

As a percent of net sales, cost of sales decreased 0.7% primarily driven by improved margin from the commercial vehicle and passenger car products businesses within the Transportation segment and across all businesses within the Industrial segment driven by favorable price, volume leverage, and cost reduction initiatives.

In addition, higher volume from the electronics products business within the Electronics segment favorably impacted the decrease in cost of sales as percent of net sales that was partially offset by lower gross margin from the semiconductor business within the Electronics segment.

Cost of sales was $728.4 million, or 62.4% of net sales, in the first six months of 2025 compared to $699.1 million, or 63.9% of net sales, in the first six months of 2024.

As a percent of net sales, cost of sales decreased 1.5% primarily driven by higher volume in the electronics products business within the Electronics segment and across all businesses in the Industrial segment.

Additionally, improved margin from the commercial vehicle and the passenger car products businesses within the Transportation segment driven by volume leverage, favorable price, and cost reduction initiatives favorably impacted the decrease in cost of net sales as percent of net sales that was partially offset by lower volume from the semiconductor business within the Electronics segment.

Gross profit was $232.1 million, or 37.8% of net sales, in the second quarter of 2025 compared to $207.0 million, or 37.1% of net sales, in the second quarter of 2024.

The $25.1 million increase in gross profit was primarily due to higher volume from the electronics products business within the Electronics segment and across all businesses within the Industrial segment and improved margin from the commercial vehicle and the passenger car products businesses within the Transportation segment, partially offset by lower volume from the semiconductor business within the Electronics segment.

Gross profit was $439.3 million, or 37.6% of net sales, in the first six months of 2025 compared to $394.8 million, or 36.1% of net sales, in the first six months of 2024.

The $44.5 million increase in gross profit was primarily from higher volume in the electronics products business within the Electronics segment, across all businesses within the Industrial segment, and the commercial vehicle and the passenger car products businesses within the Transportation driven by higher volume, favorable price, and product mix, partially offset by lower volume from the semiconductor business within the Electronics segment.

Operating Expenses

Operating expenses were $137.1 million, or 24.7% of net sales, for the first quarter of 2025 compared to $132.9 million, or 24.8% of net sales, for the first quarter of 2024.

The increase in operating expenses of $4.3 million was primarily due to higher restructuring, impairment, and other charges of $5.8 million related to company-wide cost control initiatives.

Operating expenses were $139.3 million, or 22.7% of net sales, for the second quarter of 2025 compared to $141.5 million, or 25.3% of net sales, for the second quarter of 2024.

The decrease in operating expenses of $2.2 million was primarily due to lower restructuring, impairment, and other charges of $2.7 million related to cost control initiatives in the semiconductor business within the Electronics segment implemented in the prior year.

Operating expenses were $276.4 million, or 23.7% of net sales, for the first six months of 2025 compared to $274.4 million, or 25.1% of net sales, for the first six months of 2024.

The increase in operating expenses of $2.0 million was primarily due to higher selling, general, and administrative expenses of $3.7 million driven by the Dortmund Fab acquisition and restructuring, impairment, and other charges of $3.0 million related to company-wide cost control initiatives implemented in the first quarter of 2025, partially offset by lower amortization expense of $2.4 million and research and development expenses of $2.4 million.

Operating Income

Operating income was $70.2 million, representing an increase of $15.2 million, or 27.7%, for the first quarter of 2025 compared to $55.0 million for the first quarter of 2024.

The increase in operating income was due to higher gross profit from the Electronics and Industrial segments, partially offset by higher operating expenses mainly driven by higher restructuring, impairment, and other charges.

Operating margins increased from 10.3% in the first quarter of 2024 to 12.7% in the first quarter of 2025 driven by improved gross margin in the Electronics and Industrial segments.

Operating income was $92.8 million, representing an increase of $27.3 million, or 41.6%, for the second quarter of 2025 compared to $65.5 million for the second quarter of 2024.

The increase in operating income was due to higher gross profit from the electronics products business within the Electronics segment and the Transportation and Industrial segments, and lower operating expenses mainly driven by lower restructuring, impairment, and other charges, partially offset by lower gross profit from the semiconductor business within the Electronics segment.

Operating margins increased from 11.7% in the second quarter of 2024 to 15.1% in the second quarter of 2025 driven by improved gross margin in the Transportation and Industrial segments.

Operating income was $162.9 million, representing an increase of $42.5 million, or 35.3%, for the first six months of 2025 compared to $120.5 million for the first six months of 2024.

The increase in operating income was due to higher gross profit across all segments, partially offset by higher operating expenses mainly driven by higher selling, general, and administrative expenses from the Dortmund Fab acquisition and restructuring, impairment, and other charges due to company-wide cost control initiatives implemented in the first quarter of 2025.

Operating margins increased from 11.0% in the first six months of 2024 to 14.0% in the first six months of 2025 driven by improved gross margin in the Industrial and Transportation segments.

Income Before Income Taxes

Income before income taxes was $59.9 million, or 10.8% of net sales, for the first quarter of 2025 compared to $55.7 million, or 10.4% of net sales, for the first fiscal quarter of 2024.

In addition to the factors impacting comparative results for operating income discussed above, income before income taxes was primarily impacted by foreign exchange losses of $4.8 million in the first quarter of 2025 compared to foreign exchange gains of $5.0 million in the first quarter of 2024, and higher unrealized losses of $1.3 million related to the Company's equity investment.

The effective tax rate for the three months ended March 29, 2025 was 27.3%, compared to the effective tax rate for the three months ended March 30, 2024 of 13.0%.

The effective tax rate for 2025 was higher than the effective tax rate for the comparable 2024 period primarily due to the lapse in the statute of limitations for previously unrecognized tax benefits in the first quarter of 2024 which favorably impacted the 2024 effective tax rate by 10.6%.

The effective tax rate for 2025 is higher than the statutory tax rate primarily due to losses in non-US jurisdictions with no related tax benefit, and the effective tax rate for 2024 was lower than the statutory tax rate primarily due to the lapse in statute of limitations for previously unrecognized tax benefits.

The effective tax rate for the three and six months ended June 28, 2025 was 26.7% and 27.0%, respectively, compared to the effective tax rate for the three and six months ended June 29, 2024 of 25.6% and 19.6%, respectively.

The effective tax rate for 2025 was higher than the effective tax rate for the comparable 2024 periods primarily due to increases in foreign exchange losses and losses in non-U.S.

jurisdictions with no related tax benefit, as compared to 2024.

The 2024 periods also recognized more favorable tax rate benefits due to lapses in the statute of limitations for previously unrecognized tax benefits, as compared to the 2025 periods.

The effective tax rates for three and six months ended June 28, 2025 were higher than the statutory tax rate primarily due to foreign exchange losses and losses in non-U.S.

jurisdictions with no related tax benefit.

The effective tax rate for the three months ended June 29, 2024 was higher than the statutory tax rate primarily due to the proportion of pre-tax income that is earned in higher tax jurisdictions.

The effective tax rate for the six months ended June 29, 2024 was lower than the statutory tax rate primarily due to the lapse in the statute of limitations for previously unrecognized tax benefits recognized in the first quarter.

The effective tax rate for 2025 is higher than the effective tax rate for the comparable 2024 periods primarily due to increases in foreign exchange losses and losses in non-U.S.

jurisdictions with no related tax benefit, as compared to 2024.

The 2024 periods also recognized more favorable tax rate benefits due to lapses in the statute of limitations for previously unrecognized tax benefits, as compared to the 2025 periods.

The effective tax rates for the three and six months ended June 28, 2025 are higher than the statutory tax rate primarily due to foreign exchange losses and losses in non-U.S.

jurisdictions with no related tax benefit.

The effective tax rate for the three months ended June 29, 2024 is higher than the statutory tax rate primarily due to the proportion of pre-tax income that is earned in higher tax jurisdictions.

The effective tax rate for the six months ended June 29, 2024 is lower than the statutory tax rate primarily due to the lapse in the statute of limitations for previously unrecognized tax benefits recognized in the first quarter.

Segment Results of Operations

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The following table is a summary of the Company’s net sales and operating income by segment:

Net Sales First Quarter

Net Sales Second Quarter First Six Months

(in thousands) 2025 2024 Change %

Change 2025 2024 Change %

Electronics $ 335,666 $ 305,639 $ 30,027 9.8 % $ 642,915 $ 596,744 $ 46,171 7.7 %

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Total $ 613,413 $ 558,489 $ 54,924 9.8 % $ 1,167,720 $ 1,093,874 $ 73,846 6.8 %

Segment Operating Income First Quarter

Segment Operating Income Second Quarter First Six Months

(in thousands) 2025 2024 Change %

Change 2025 2024 Change %

Electronics $ 49,861 $ 46,165 $ 3,696 8.0 % $ 96,627 $ 83,968 $ 12,659 15.1 %

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Total operating income $ 92,778 $ 65,506 $ 27,272 41.6 % $ 162,928 $ 120,458 $ 42,470 35.3 %

(a) Included in “Other” Operating income for the first quarter of 2025 was $8.9 million of restructuring charges primarily related to employee termination costs, and $0.1 million impairment charge related to certain machinery and equipment within the Electronics segment.

(a) Included in “Other” Operating income for the second quarter of 2025 was $2.5 million ($11.4 million year-to-date) of restructuring charges primarily related to employee termination costs.

During the first quarter of 2025, the Company recognized a $0.1 million impairment charge related to certain machinery and equipment within the Electronics segment.

See Note 7, Restructuring, Impairment, and Other Charges, for further discussion.

Included in “Other” Operating income for the first quarter of 2024 was $2.3 million of restructuring charges primarily related to employee termination costs and a $0.9 million impairment charge related to certain machinery and equipment in the commercial vehicle business within the Transportation segment.

During the first quarter of 2025, the Company recognized a $0.5 million purchase accounting inventory step-down adjustment related to the Dortmund Fab acquisition.

Included in “Other” Operating income for the second quarter of 2024 was $5.3 million ($7.6 million year-to-date) of restructuring charges primarily related to employee termination costs.

See Note 7, Restructuring, Impairment, and Other Charges, for further discussion.

Electronics Segment

Net sales increased $16.1 million, or 5.5%, in the first quarter of 2025 compared to the first quarter of 2024 and included unfavorable changes in foreign exchange rates of $3.8 million.

The sales increase was primarily due to higher volume of $15.7 million from the electronics products business driven by higher end market demand and $10.2 million of incremental net sales from the Dortmund Fab acquisition in the semiconductor business, partially offset by the lower volume from the remaining semiconductor business.

Net sales increased $30.0 million, or 9.8%, in the second quarter of 2025 compared to the second quarter of 2024 and included favorable changes in foreign exchange rates of $3.7 million or 1.2% .

The net sales increase was primarily due to higher volume of $22.6 million from the electronics products business driven by higher end market demand and $13.4 million of incremental net sales from the Dortmund Fab acquisition in the semiconductor business, partially offset by lower volume from the remaining semiconductor business.

Net sales increased $46.2 million, or 7.7%, in the first six months of 2025 compared to the first six months of 2024 and included unfavorable changes in foreign exchange rates of $0.1 million.

The sales increase was primarily due to higher volume of $38.4 million from the electronics products business driven by higher end market demand and $23.5 million of incremental net sales from the Dortmund Fab acquisition in the semiconductor business, partially offset by lower volume from the remaining semiconductor business.

Operating Income

Operating income was $46.8 million, representing an increase of $9.0 million, or 23.7%, for the first quarter of 2025 compared to $37.8 million for the first quarter of 2024.

Operating income was $49.9 million, representing an increase of $3.7 million, or 8.0%, for the second quarter of 2025 compared to $46.2 million for the second quarter of 2024.

The increase in operating income was primarily from the electronics products business due to volume leverage.

Operating margins increased from 13.0% in the first quarter of 2024 to 15.2% in the first quarter of 2025 primarily due to the volume leverage from the electronics products business.

Operating margins decreased from 15.1% in the second quarter of 2024 to 14.9% in the second quarter of 2025 primarily due to lower gross margin for the semiconductor business, partially offset by volume leverage from the electronics products business.

Operating income was $96.6 million, representing an increase of $12.7 million, or 15.1%, for the first six months of 2025 compared to $84.0 million for the first six months of 2024.

The increase in operating income was primarily from the electronics products business due to volume leverage.

Operating margins increased from 14.1% in the first six months of 2024 to 15.0% in the first six months of 2025 primarily due to volume leverage from the electronics products business, partially offset by lower gross margin from the semiconductor business.

Transportation Segment

Net sales decreased $8.5 million, or 5.0%, in the first quarter of 2025 compared to the first quarter of 2024 and included unfavorable changes in foreign exchange rates of $2.2 million.

The remaining sales decline was primarily due to lower automotive sensors business volume of $5.5 million driven by the strategic exit of certain lower margin products.

Net sales increased $10.4 million, or 6.2%, in the second quarter of 2025 compared to the second quarter of 2024 and included favorable changes in foreign exchange rates of $3.1 million or 1.8%.

The net sales increase was primarily due to higher net sales of $7.1 million and $5.5 million in the passenger car products and the commercial vehicle businesses, respectively, driven by increased end market demand and favorable price.

Net sales increased $1.9 million, or 0.6%, in the first six months of 2025 compared to the first six months of 2024 and included favorable changes in foreign exchange rates of $0.9 million.

The net sales increase was primarily due to higher net sales of $5.9 million and $3.8 million in the passenger car products and the commercial vehicle businesses respectively, driven by increased end market demand and favorable price, partially offset by lower automotive sensors business volume of $7.7 million driven by the strategic exit of certain lower margin products.

Operating Income

Operating income was $18.9 million, representing an increase of $2.7 million, or 16.7%, for the first quarter of 2025 compared to $16.2 million for the first quarter of 2024.

The increase in operating income was primarily from the commercial vehicle business due to favorable price and cost reduction initiatives.

Operating margins increased from 9.5% in the first quarter of 2024 to 11.7% in the first quarter of 2025 primarily driven by favorable price, cost reduction initiatives and product mix from the commercial vehicle business.

Operating income was $28.1 million, representing an increase of $12.8 million, or 84.3%, for the second quarter of 2025 compared to $15.2 million for the second quarter of 2024.

The increase in operating income was primarily from the commercial vehicle and passenger car products businesses due to favorable price, volume leverage, and cost reduction initiatives.

Operating margins increased from 9.0% in the second quarter of 2024 to 15.6% in the second quarter of 2025 primarily driven by improved gross margin from the commercial vehicle and passenger car products businesses.

Operating income was $47.0 million, representing an increase of $15.6 million, or 49.5%, for the first six months of 2025 compared to $31.4 million for the first six months of 2024.

The increase in operating income was primarily from the commercial vehicle and passenger car products businesses due to favorable price, volume leverage, and cost reduction initiatives.

Operating margins increased from 9.3% in the first six months of 2024 to 13.8% in the first six months of 2025 primarily driven by improved gross margin from the commercial vehicle and passenger car products businesses.

Industrial Segment

Net sales increased by $11.3 million, or 15.3%, in the first quarter of 2025 compared to the first quarter of 2024, which included unfavorable changes in foreign exchange rates of $0.6 million.

The sales increase was due to higher volume from industrial circuit protection and industrial control and sensor products driven by higher end market demand and favorable price.

Net sales increased $14.5 million, or 17.2%, in the second quarter of 2025 compared to the second quarter of 2024 and included favorable changes in foreign exchange rates of $0.2 million.

The net sales increase was due to higher volume from industrial control and sensor and industrial circuit protection products driven by favorable price and higher end market demand.

Net sales increased $25.7 million, or 16.3%, in the first six months of 2025 compared to the first six months of 2024 and included unfavorable changes in foreign exchange rates of $0.4 million.

The net sales increase was due to higher volume from industrial control and sensor and industrial circuit protection products driven by higher end market demand and favorable price.

Operating Income

Operating income was $13.1 million, representing an increase of $8.3 million, or 172.6%, for the first quarter of 2025 compared to $4.8 million for the first quarter of 2024.

The increase in operating income was driven by higher volume from industrial circuit protection and industrial control and sensor products driven by increased end market demand and favorable price and product mix.

Operating margins increased from 6.5% in the first quarter of 2024 to 15.3% in the first fiscal quarter of 2025 due to higher volume and favorable price.

Operating income was $18.9 million, representing an increase of $9.3 million, or 97.6%, for the second quarter of 2025 compared to $9.5 million for the second quarter of 2024.

The increase in operating income was driven by higher net sales from industrial control and sensor and industrial circuit protection products driven by favorable price, increased end market demand and product mix.

Operating margins increased from 11.4% in the second quarter of 2024 to 19.2% in the second quarter of 2025 due to favorable price and higher volume.

Operating income was $31.9 million, representing an increase of $17.6 million, or 122.7%, for the first six months of 2025 compared to $14.3 million for the first six months of 2024.

The increase in operating income was driven by higher volume from industrial control and sensor and industrial circuit protection products driven by increased end market demand, favorable price and product mix.

Operating margins increased from 9.1% in the first six months of 2024 to 17.4% in the first six months of 2025 due to higher volume and favorable price.

Geographic Net Sales Information

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The following table is a summary of the Company’s net sales by geography:

First Quarter

Second Quarter First Six Months

(in thousands) 2025 2024 Change %

Change 2025 2024 Change %

Americas $ 249,440 $ 228,330 $ 21,110 9.2 % $ 474,130 $ 443,114 $ 31,016 7.0 %

2 unchanged sentences

Total $ 613,413 $ 558,489 $ 54,924 9.8 % $ 1,167,720 $ 1,093,874 $ 73,846 6.8 %

Net sales increased $9.9 million, or 4.6%, in the first quarter of 2025 compared to the first quarter of 2024 and included unfavorable changes in foreign exchange rates of $0.6 million.

The net sales increase was due to higher volume from the Industrial and Electronics segments, partially offset by lower volume from the passenger car product business within the Transportation segment.

Net sales increased $11.6 million, or 6.0%, in the first quarter of 2025 compared to the first quarter of 2024 and included unfavorable changes in foreign exchange rates of $2.6 million.

The increase in net sales was primarily due to higher net sales from the electronics products business within the Electronics segment and higher net sales from passenger car products and the commercial vehicle businesses within the Transportation segment, partially offset by lower volume from the semiconductor business within the Electronics segment and the automotive sensor business within the Transportation segment.

Net sales decreased $2.6 million, or 2.0%, in the first quarter of 2025 compared to the first quarter of 2024 and included unfavorable changes in foreign exchange rates of $3.4 million.

The decrease in net sales was primarily due to unfavorable foreign exchange rate impact and lower net sales from the Transportation segment, partially offset by $10.2 million or 1.9% of incremental net sales from the Dortmund Fab acquisition in the semiconductor business within the Electronics segment.

Net sales increased $21.1 million, or 9.2%, in the second quarter of 2025 compared to the second quarter of 2024.

The increase in net sales was primarily due to higher volume from the Industrial segment, the electronics products business within the Electronics segment and the commercial vehicle businesses within the Transportation segment.

Net sales increased $31.0 million, or 7.0%, in the first six months of 2025 compared to the first six months of 2024 and included unfavorable changes in foreign exchange rates of $0.6 million.

The increase in net sales was due to higher volume from the Industrial segment, the electronics products business within the Electronics segment, partially offset by lower volume from the passenger car product business within the Transportation segment.

Net sales increased $9.7 million, or 4.5%, in the second quarter of 2025 compared to the second quarter of 2024 and included favorable changes in foreign exchange rates of $0.8 million.

The increase in net sales was primarily due to higher net sales from

the electronics products business within the Electronics segment and the passenger car products business within the Transportation segment, partially offset by lower volume from the semiconductor business within the Electronics segment.

Net sales increased $21.3 million, or 5.2%, in the first six months of 2025 compared to the first six months of 2024 and included unfavorable changes in foreign exchange rates of $1.8 million.

The increase in net sales was primarily due to higher net sales from the electronics products business within the Electronics segment and the passenger car products and the commercial vehicle businesses within the Transportation segment, partially offset by lower volume from the semiconductor business within the Electronics segment and the automotive sensor business within the Transportation segment.

Net sales increased $24.1 million, or 20.8%, in the second quarter of 2025 compared to the second quarter of 2024 and included favorable changes in foreign exchange rates of $6.2 million.

The increase in net sales was primarily due to $13.4 million or 2.4% of incremental net sales from the Dortmund Fab acquisition in the semiconductor business within the Electronics segment and higher net sales from the electronics products business within the Electronics segment.

Net sales increased $21.5 million, or 8.9%, in the first six months of 2025 compared to the first six months of 2024 and included favorable changes in foreign exchange rates of $2.8 million.

The increase in net sales was primarily due to $23.5 million or 2.2% of incremental net sales from the Dortmund Fab acquisition in the semiconductor business within the Electronics segment.

Liquidity and Capital Resources

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Management expects that the Company’s (i) current level of cash, cash equivalents, and marketable securities, (ii) current and forecasted cash flows from operations, (iii) availability under existing funding arrangements, and (iv) access to capital in the capital markets will provide sufficient funds to support the Company’s operations, capital expenditures, investments, and debt obligations on both a short-term and long-term basis.

Cash and cash equivalents were $618.7 million as of March 29, 2025, a decrease of $106.2 million, as compared to December 28, 2024.

As of March 29, 2025, $174.0 million of the Company's $618.7 million cash and cash equivalents was held by U.S.

Cash and cash equivalents were $685.2 million as of June 28, 2025, a decrease of $39.7 million, as compared to December 28, 2024.

As of June 28, 2025, $265.1 million of the Company's $685.2 million cash and cash equivalents was held by U.S.

subsidiaries.

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Pursuant to the Credit Agreement, the Company may, from time to time, increase the size of the revolving credit facility or enter into one or more tranches of term loans in minimum increments of $25 million if there is no event of default and the Company is in compliance with certain financial covenants.

month periods, plus 1.00% to 1.75%, plus a SOFR adjustment of 0.10% or at the bank’s Base Rate, as defined in the Credit Agreement, plus 0.00% to 0.75%, based upon the Company’s Consolidated Leverage Ratio, as defined in the Credit Agreement.

Loans made under the available credit facility pursuant to the Credit Agreement ("the Credit Facility") bear interest at the Company’s option, at either Secured Overnight Financing Rate ("SOFR"), fixed for interest periods of one, two, three or six-month periods, plus 1.00% to 1.75%, plus a SOFR adjustment of 0.10% or at the bank’s Base Rate, as defined in the Credit Agreement, plus 0.00% to 0.75%, based upon the Company’s Consolidated Leverage Ratio, as defined in the Credit Agreement.

The Company is also required to pay commitment fees on unused portions of the Credit Facility ranging from 0.10% to 0.175%, based on the Consolidated Leverage Ratio, as defined in the Credit Agreement.

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Subject to certain conditions, (i) the Company may terminate or reduce the Aggregate Revolving Commitments, as defined in the Credit Agreement, in whole or in part, and (ii) the Company may prepay the revolving loans or the term loans at any time, without premium or penalty.

During the three months ended March 29, 2025, the Company made term loan payments of $3.8 million.

The revolving loan and term loan balance under the Credit Facility were $100.0 million and $277.5 million, respectively, as of March 29, 2025.

During the three and six months

ended June 28, 2025, the Company made term loan payments of $3.8 million and $7.5 million, respectively.

The revolving loan and term loan balances under the Credit Facility were $100.0 million and $273.8 million, respectively, as of June 28, 2025.

On May 12, 2022, the Company entered into an interest rate swap agreement to manage interest rate risk exposure, effectively converting the interest rate on the Company's SOFR based floating-rate loans to a fixed-rate.

The interest rate swap, with a notional value of $200 million, was designated as a cash flow hedge against the variability of cash flows associated with the Company's SOFR based loans scheduled to mature on June 30, 2027.

As of March 29, 2025, the effective interest rate on unhedged portion of the outstanding borrowings under the credit facility was 5.42%, and 4.13% on the hedged portion.

As of March 29, 2025, the Company had $0.1 million outstanding letters of credit and had $599.9 million of borrowing capacity available under the revolving credit facility.

As of March 29, 2025, the Company was in compliance with all covenants under the Credit Agreement.

As of June 28, 2025, the effective interest rate on the unhedged portion of the outstanding borrowings under the credit facility was 5.68%, and 4.13% on the hedged portion.

As of June 28, 2025, the Company had $0.1 million outstanding letters of credit and had $599.9 million of borrowing capacity available under the revolving credit facility.

As of June 28, 2025, the Company was in compliance with all covenants under the Credit Agreement.

On December 8, 2016, the Company entered into a Note Purchase Agreement, pursuant to which the Company issued and sold €212 million aggregate principal amount of senior notes in two series.

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Debt Covenants

The Company was in compliance with all covenants under the Credit Agreement and Senior Notes as of March 29, 2025 and currently expects to remain in compliance based on management’s estimates of operating and financial results for 2024.

As of March 29, 2025, the Company met all the conditions required to borrow under the Credit Agreement and management expects the Company to continue to meet the applicable borrowing conditions.

The Company was in compliance with all covenants under the Credit Agreement and Senior Notes as of June 28, 2025 and currently expects to remain in compliance based on management’s estimates of operating and financial results for 2024.

As of June 28, 2025, the Company met all the conditions required to borrow under the Credit Agreement and management expects the Company to continue to meet the applicable borrowing conditions.

On December 31, 2024, the Company completed the acquisition of Dortmund Fab from Elmos Semiconductor SE.

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The business is reported in the Electronics-Semiconductor business within the Company’s Electronics segment.

During the first quarter of 2025, the Company paid quarterly dividends of $17.3 million to its shareholders.

On April 30, 2025, the Company announced the declaration of a quarterly cash dividend of $0.70 per share payable on June 5, 2025 to stockholders of record as of May 22, 2025.

During the second quarter of 2025, the Company paid quarterly dividends of $17.3 million to its shareholders.

On July 30, 2025, the Company announced the declaration of a quarterly cash dividend of $0.75 per share, a 7% increase from the first quarter, payable on September 4, 2025 to stockholders of record as of August 21, 2025.

Cash Flow Overview

First Three Months

First Six Months

(in thousands) 2025 2024

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Operating cash outflows are largely attributable to recurring expenditures for raw materials, labor, rent, interest, taxes and other operating activities.

Net cash provided by operating activities was $65.8 million for the three months ended March 29, 2025 compared to $57.2 million for the three months ended March 30, 2024.

The increase in net cash provided by operating activities was primarily due to reductions in working capital and higher cash earnings.

Net cash provided by operating activities was $148.2 million for the six months ended June 28, 2025 compared to $126.6 million for the six months ended June 29, 2024.

The increase in net cash provided by operating activities was primarily due to higher cash earnings.

Cash Flow from Investing Activities

Net cash used in investing activities was $80.5 million for the three months ended March 29, 2025 compared to $8.5 million during the three months ended March 30, 2024.

Net cash paid for the Dortmund Fab acquisition was $57.4 million during the three months ended March 29, 2025.

Capital expenditures were $23.1 million, representing an increase of $7.6 million compared to the three months ended March 30, 2024.

During the three months ended March 30, 2024, the Company received proceeds of $7.1 million from the sale of a building from the commercial vehicle business within the Transportation segment.

Net cash used in investing activities was $89.7 million for the six months ended June 28, 2025 compared to $26.7 million during the six months ended June 29, 2024.

Net cash paid for the Dortmund Fab acquisition was $57.4 million during the six months ended June 28, 2025.

Capital expenditures were $33.0 million, representing a decrease of $1.7 million, compared to the six months ended June 29, 2024.

During the six months ended June 29, 2024, the Company received proceeds of $8.7 million from the sale of two buildings within the Transportation segment.

Cash Flow from Financing Activities

Net cash used in financing activities was $97.0 million for the three months ended March 29, 2025 compared to $33.5 million during the three months ended March 30, 2024.

During the three months ended March 29, 2025, the Company paid off $50 million of U.S.

Net cash used in financing activities was $120.5 million for the six months ended June 28, 2025 compared to $79.3 million for the six months ended June 29, 2024.

During the six months ended June 28, 2025, the Company paid off $50 million of U.S.

Senior Notes, Series A, due February 15, 2025 and made payments of $7.5 million on the term loan.

During the three months ended March 30, 2024, the Company made payments of $1.9 million on the term loan.

The Company paid dividends of $17.3 million and $16.2 million in the three months ended March 29, 2025 and March 30, 2024, respectively.

Additionally, during the three months ended March 29, 2025 and March 30, 2024, the Company repurchased 120,689 shares of its common stock totaling $27.4 million and 70,280 shares of its common stock totaling $16.1 million, respectively.

During the six months ended June 29, 2024, the Company made payments of $3.8 million on the term loan.

The Company paid dividends of $34.7 million and $32.3 million in the six months ended June 28, 2025 and June 29, 2024, respectively.

In addition, during the six months ended June 28, 2025 and June 29, 2024, the Company repurchased 120,689 shares of its common stock totaling $27.4 million and 179,311 shares of its common stock totaling $40.9 million, respectively.

The Company paid a $0.2 million excise tax related to the share repurchases during the three and six months ended June 28, 2025.

Share Repurchase Program

On April 25, 2024, the Company's Board of Directors authorized a three-year program to repurchase up to $300.0 million in the aggregate of shares of the Company's stock for the period from May 1, 2024 to April 30, 2027 ("2024 program") to replace its previous 2021 program.

During the three months ended March 29, 2025, the Company repurchased 120,689 shares of its common stock totaling $27.4 million pursuant to the 2024 program.

During the three months ended March 30, 2024, the Company repurchased 70,280 shares of its common stock totaling $16.1 million pursuant to the 2021 program.

The Company did not repurchase shares of its common stock for the three months ended June 28, 2025.

During the six months ended June 28, 2025, the Company repurchased 120,689 shares of its common stock totaling $27.4 million pursuant to the 2024 program.

During the three and six months ended June 29, 2024, the Company repurchased 109,031 and 179,311 shares of its common stock totaling $24.7 million and $40.9 million, respectively, of which $38.9 million was pursuant to the 2021 program and $2.0 million was pursuant to the 2024 program.

Off-Balance Sheet Arrangements

As of March 29, 2025, the Company did not have any off-balance sheet arrangements, as defined under SEC rules.

As of June 28, 2025, the Company did not have any off-balance sheet arrangements, as defined under SEC rules.

Specifically, the Company was not liable for guarantees of indebtedness owed by third parties, the Company was not directly liable for the debt of any unconsolidated entity and the Company did not have any retained or contingent interest in assets.

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The significant accounting policies and critical accounting estimates are consistent with those discussed in Note 1, Summary of Significant Accounting Policies and Other Information , to the consolidated financial statements and the MD&A section of the Company’s Annual Report on Form 10-K for the year ended December 28, 2024.

During the three months ended March 29, 2025, there were no significant changes in the application of critical accounting policies and estimates.

During the six months ended June 28, 2025, there were no significant changes in the application of critical accounting policies and estimates.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See Item 7A, Quantitative and Qualitative Disclosures about Market Risk , of the Company's Annual Report on Form 10-K for the year ended December 28, 2024.

During the three months ended March 29, 2025, there were no material changes in the Company's exposure to market risk.

During the six months ended June 28, 2025, there were no material changes in the Company's exposure to market risk.

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-Q

Item 2. Management’s Discussion and Analysis