What changed in this filing

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Item 1. Financial Statements

2025-05-06 compared with 2025-02-04 · 149 added, 151 removed, 626 unchanged (32% of the section changed)

3 unchanged sentences

(In thousands, except share and per share data)

December 27, 2024 June 28, 2024

March 28, 2025 June 28, 2024

Current assets:

Cash and cash equivalents $ 269,822 $ 180,521

Accounts receivable, net of allowance for credit losses of $ 1,951 and $ 2,020 at December 27, 2024 and June 28, 2024, respectively

Accounts receivable, net of allowance for credit losses of $ 1,765 and $ 2,020 at March 28, 2025 and June 28, 2024, respectively

103,401 111,441

Unbilled receivables and costs in excess of billings, net of allowance for credit losses of $ 5,311 and $ 6,340 at December 27, 2024 and June 28, 2024, respectively

Unbilled receivables and costs in excess of billings, net of allowance for credit losses of $ 5,311 and $ 6,340 at March 28, 2025 and June 28, 2024, respectively

271,293 304,029

Inventory 352,689 335,300

Prepaid income taxes 2,960 —

Prepaid expenses and other current assets 19,339 22,493

27 unchanged sentences

85,000,000 shares authorized;

58,660,201 and 58,093,528 shares issued and outstanding at December 27, 2024 and June 28, 2024, respectively

58,852,270 and 58,093,528 shares issued and outstanding at March 28, 2025 and June 28, 2024, respectively

Additional paid-in capital 1,279,118 1,242,402

7 unchanged sentences

(In thousands, except per share data)

Second Quarters Ended Six Months Ended

December 27, 2024 December 29, 2023 December 27, 2024 December 29, 2023

Third Quarters Ended Nine Months Ended

March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024

Net revenues $ 211,358 $ 208,258 $ 638,914 $ 586,712

11 unchanged sentences

Interest expense ( 8,068 ) ( 9,319 ) ( 25,404 ) ( 25,856 )

Other expense, net ( 3,865 ) ( 1,148 ) ( 5,204 ) ( 2,922 )

Other income (expense), net 2,304 ( 2,784 ) ( 2,900 ) ( 5,706 )

Loss before income tax benefit ( 21,818 ) ( 57,217 ) ( 69,241 ) ( 170,674 )

11 unchanged sentences

Deferred compensation and pension benefit plan, net of tax ( 79 ) ( 56 ) ( 172 ) ( 169 )

Total other comprehensive income (loss), net of tax 4,334 ( 5,512 ) ( 1,925 ) ( 3,406 )

Total other comprehensive (loss) income, net of tax ( 2,211 ) 2,549 ( 4,136 ) ( 857 )

Total comprehensive loss $ ( 21,381 ) $ ( 42,025 ) $ ( 58,410 ) $ ( 127,720 )

3 unchanged sentences

(In thousands)

For the Second Quarter Ended December 27, 2024

For the Third Quarter Ended March 28, 2025

Common Stock Additional

4 unchanged sentences

Shares Amount

Balance at September 27, 2024 58,455 $ 584 $ 1,253,249 $ 202,274 $ 3,734 $ 1,459,841

Balance at December 27, 2024 58,660 $ 587 $ 1,266,926 $ 184,695 $ 8,068 $ 1,460,276

Issuance of common stock under employee stock incentive plans 102 1 ( 1 ) — — —

Issuance of common stock under employee stock purchase plan 60 1 1,491 — — 1,492

Issuance of common stock under defined contribution plan 90 1 3,794 — — 3,795

1 unchanged sentence

Net loss — — — ( 19,170 ) — ( 19,170 )

Other comprehensive income — — — — 4,334 4,334

Balance at December 27, 2024 58,660 $ 587 $ 1,266,926 $ 184,695 $ 8,068 $ 1,460,276

For the Second Quarter Ended December 29, 2023

Other comprehensive loss — — — — ( 2,211 ) ( 2,211 )

Balance at March 28, 2025 58,852 $ 589 $ 1,279,118 $ 165,525 $ 5,857 $ 1,451,089

For the Third Quarter Ended March 29, 2024

Common Stock Additional

4 unchanged sentences

Shares Amount

Balance at September 29, 2023 57,274 $ 573 $ 1,205,573 $ 320,731 $ 13,935 $ 1,540,812

Balance at December 29, 2023 57,564 $ 576 $ 1,220,343 $ 275,150 $ 8,423 $ 1,504,492

Issuance of common stock under employee stock incentive plans 166 1 ( 1 ) — — —

Issuance of common stock under employee stock purchase plan 107 1 3,162 — — 3,163

Issuance of common stock under defined contribution plan 139 2 4,220 — — 4,222

Retirement of common stock — — ( 15 ) — — ( 15 )

Stock-based compensation — — 6,104 — — 6,104

Net loss — — — ( 44,574 ) — ( 44,574 )

Other comprehensive loss — — — — ( 5,512 ) ( 5,512 )

Balance at December 29, 2023 57,564 $ 576 $ 1,220,343 $ 275,150 $ 8,423 $ 1,504,492

For the Six Months Ended December 27, 2024

Other comprehensive income — — — — 2,549 2,549

Balance at March 29, 2024 57,869 $ 579 $ 1,230,666 $ 230,576 $ 10,972 $ 1,472,793

For the Nine Months Ended March 28, 2025

Common Stock Additional

11 unchanged sentences

Other comprehensive loss — — — — ( 4,136 ) ( 4,136 )

Balance at December 27, 2024 58,660 $ 587 $ 1,266,926 $ 184,695 $ 8,068 $ 1,460,276

For the Six Months Ended December 29, 2023

Balance at March 28, 2025 58,852 $ 589 $ 1,279,118 $ 165,525 $ 5,857 $ 1,451,089

For the Nine Months Ended March 29, 2024

Common Stock Additional

12 unchanged sentences

Other comprehensive loss — — — — ( 857 ) ( 857 )

Balance at December 29, 2023 57,564 $ 576 $ 1,220,343 $ 275,150 $ 8,423 $ 1,504,492

Balance at March 29, 2024 57,869 $ 579 $ 1,230,666 $ 230,576 $ 10,972 $ 1,472,793

The accompanying notes are an integral part of the consolidated financial statements.

2 unchanged sentences

(In thousands)

Six Months Ended

December 27, 2024 December 29, 2023

Nine Months Ended

March 28, 2025 March 29, 2024

Cash flows from operating activities:

Net loss $ ( 54,274 ) $ ( 126,863 )

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

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

Depreciation and amortization expense 62,058 66,639

15 unchanged sentences

Other non-current liabilities ( 7,542 ) ( 1,782 )

Net cash provided by operating activities 70,802 6,426

Net cash provided by (used in) operating activities 100,776 ( 11,379 )

Cash flows from investing activities:

12 unchanged sentences

Cash and cash equivalents at end of period $ 269,822 $ 142,645

Cash paid (refunded) during the period for:

Cash paid during the period for:

Interest $ 28,105 $ 26,660

Income taxes (refunded) paid, net $ ( 398 ) $ 14,881

Income taxes paid, net $ 265 $ 14,451

Supplemental disclosures—non-cash activities:

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Mercury Systems, Inc.

(the Company) is a technology company that delivers mission-critical processing power to the edge - where signals and data are collected - to solve the most pressing aerospace and defense challenges.

Mercury’s products and solutions are deployed in more than 300 programs and across 35 countries.

The Company is headquartered in Andover, Massachusetts, and has over 20 locations worldwide.

The Mercury Processing Platform is the unique advantage the Company provides to its customers.

It comprises the innovative technologies the Company has developed and acquired for more than 40 years that brings integrated, mission-critical processing capabilities to the edge.

The Company's processing platform spans the full breadth of signal processing—from RF front end to the human-machine interface—to rapidly convert meaningful data, gathered in the most remote and hostile environments, into critical decisions.

It allows the Company to offer standard products and custom solutions from silicon to system scale, including components, modules, subsystems, and systems, and it embodies the customer-centric approach the Company takes to delivering capabilities that are mission-ready, trusted and secure, software-defined, and open and modular.

(the Company) is a technology company that delivers mission-critical processing power to the edge to solve the most pressing aerospace and defense challenges.

Combining technologies and expertise developed for more than 40 years, the Mercury Processing Platform offers customers a unique advantage to unleash breakthrough capabilities.

It spans the full breadth of signal processing - from RF front end to the human-machine interface - to rapidly convert meaningful data, gathered in the most remote and hostile environments, into critical decisions.

The Processing Platform allows Mercury to offer standard products and custom integrated solutions from silicon to system scale, including components, modules, subsystems, and systems.

Mercury’s products and integrated solutions are deployed in more than 300 programs and across 35 countries.

The Company is headquartered in Andover, Massachusetts, and has more than 20 locations worldwide.

Summary of Significant Accounting Policies

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These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the fiscal year ended June 28, 2024, which are contained in the Company’s Annual Report on Form 10-K filed with the SEC on August 13, 2024.

The results for the second quarter and six months ended December 27, 2024 are not necessarily indicative of the results to be expected for the full fiscal year.

The results for the third quarter and nine months ended March 28, 2025 are not necessarily indicative of the results to be expected for the full fiscal year.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.

All intercompany transactions and balances have been eliminated in consolidation.

All references to the second quarter of fiscal 2025 are to the quarter ended December 27, 2024.

There were 13 weeks during the second quarters ended December 27, 2024 and December 29, 2023, respectively.

There were 26 weeks during the six months ended December 27, 2024 and December 29, 2023, respectively.

All references to the third quarter of fiscal 2025 are to the quarter ended March 28, 2025.

There were 13 weeks during the third quarters ended March 28, 2025 and March 29, 2024, respectively.

There were 39 weeks during the nine months ended March 28, 2025 and March 29, 2024, respectively.

U SE OF E STIMATES

2 unchanged sentences

F OREIGN C URRENCY

Local currencies are the functional currency for the Company’s subsidiaries in Switzerland, the United Kingdom, Spain and Canada.

Local currencies are the functional currency for the Company’s subsidiaries in Switzerland, the United Kingdom, and Spain.

The accounts of foreign subsidiaries are translated using exchange rates in effect at period-end for assets and liabilities and at average exchange rates during the period for results of operations.

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The Company performs ongoing credit evaluations of its customers’ financial condition and limits the amount of credit extended as necessary.

The allowance is based upon an

assessment of the customer's credit worthiness, reasonable forecasts about the future, history with the customer, and the age of the receivable balance.

The Company typically invoices a customer upon shipment of the product (or completion of a service) for contracts where revenue is recognized at a point in time.

The allowance is based upon an assessment of the customer's credit worthiness, reasonable forecasts about the future, history with the customer, and the age of the receivable balance.

The Company typically invoices a customer upon shipment of the product (or completion of a service)

for contracts where revenue is recognized at a point in time.

For contracts where revenue is recognized over time, the invoicing events are typically based on specified performance obligation deliverables or milestone events, or quantifiable measures of performance.

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Factor ing fees are included as Selling, general and administrative expenses in the Company's Consolidated Statements of Operations and Comprehensive Loss.

The Company had $ 58,120 factored accounts receivables as of December 27, 2024 and incurred factoring fees of approximately $ 459 and $ 821 for the second quarter and six months ended December 27, 2024.

The Company had $ 48,205 factored accounts receivables as of December 29, 2023 and incurred factoring fees of approximately $ 953 and $ 1,261 for the second quarter and six months ended December 29, 2023.

The Company had $ 55,139 factored accounts receivables as of March 28, 2025 and incurred factoring fees of approximately $ 467 and $ 1,288 for the third quarter and nine months ended March 28, 2025.

The Company had $ 44,229 factored accounts receivables as of March 29, 2024 and incurred factoring fees of approximately $ 375 and $ 1,636 for the third quarter and nine months ended March 29, 2024.

The Company records the fair value of its derivative financial instruments in its consolidated financial statements in Other non-current assets, or Other non-current liabilities depending on their net position, regardless of the purpose or intent for holding the derivative contract.

2 unchanged sentences

Changes in the fair values of derivatives not qualifying for hedge accounting are reported in earnings as they occur.

All derivatives for the Company qualified for hedge accounting as of December 27, 2024.

All derivatives for the Company qualified for hedge accounting as of March 28, 2025.

R EVENUE R ECOGNITION

9 unchanged sentences

Revenue recognized at a point in time generally relates to contracts that include a combination of components, modules and sub-assemblies, integrated solutions and related system integration or other services.

Contracts with distinct performance obligations recognized at a point in time, with or without an allocation of the transaction price, to taled 55 % and 50 % of

revenues for the second quarter and six months ended December 27, 2024, respectively.

Contracts with distinct performance obligations recognized at a point in time, with or without an allocation of the transaction price, to taled 47 % and 45 % of revenues for the second quarters and six months ended December 29, 2023, respectively.

Contracts with distinct performance obligations recognized at a point in time, with or without an allocation of the transaction price, to taled 53 % and 51 % of revenues for the third quarter and nine months ended March 28, 2025, respectively.

Contracts with distinct performance obligations recognized at a point in time, with or without an allocation of the transaction price, totaled 42 % and 44 % of revenues for the third quarters and nine months ended March 29, 2024, respectively.

The Company also engages in contracts for development, production and service activities and recognizes revenue for performance obligations over time.

2 unchanged sentences

The Company’s cost reimbursable contracts typically include cost-plus fixed fee and time and material contracts.

Total revenue recognized over time was 45 % and 50 % of total revenues for the second quarter and six months ended December 27, 2024, respectively.

Total revenue recognized over time was 53 % and 55 % of total revenues for the second quarter and six months ended December 29, 2023 , respectively.

Total revenue recognized over time was 47 % and 49 % of total revenues for the third quarter and nine months ended March 28, 2025, respectively.

Total revenue recognized over time was 58 % and 56 % of total revenues for the third quarter and nine months ended March 29, 2024 , respectively.

Accounting for contracts recognized over time requires significant judgment relative to estimating total contract revenues and costs.

4 unchanged sentences

The net impact of changes in estimates had the following impact on the Company’s operating results:

Second Quarters Ended Six Months Ended

(In thousands, except per share data) December 27, 2024 December 29, 2023 December 27, 2024 December 29, 2023

Third Quarters Ended Nine Months Ended

(In thousands, except per share data) March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024

Loss from operations $ ( 3,653 ) $ ( 15,977 ) $ ( 16,354 ) $ ( 63,950 )

26 unchanged sentences

Contract balances are reported in a net position on a contract-by-contract basis.

The contract asset balances were $ 278,657 and $ 304,029 as of December 27, 2024 and June 28, 2024, res pectively.

The contract asset balance decreased due to $ 238,263 of billings, offset by revenue recognized under over time contracts of $ 212,891 during the six months ended December 27, 2024.

The contract liability balances were $ 136,308 and $ 74,367 as of December 27, 2024 and June 28, 2024, respectively.

The contract liability increased due to a higher volume of milestone billing events as well as timing of revenue recognized across multiple programs.

Revenue recognized for the second quarter and six months ended December 27, 2024 that was included in the contract liability balance at June 28, 2024 was $ 15,336 and $ 41,747 , r espectively.

Revenue recognized for the second quarter and six months ended December 29, 2023 that was included in the contract liability balance at June 30, 2023 was $ 10,228 and $ 31,243 , respectively.

The contract asset b alances were $ 271,293 and $ 304,029 as of March 28, 2025 and June 28, 2024, respectively.

The contract asset balance decreased due to $ 344,605 of billings, offset by revenue recognized under over time contracts of $ 311,869 during the nine months ended March 28, 2025.

The contract liability balances were $ 142,801 and $ 74,367 as of March 28, 2025 and June 28, 2024, respectively.

The contract li ability increased due to a higher volume of milestone billing events as well as timing of revenue recognized across multiple programs.

Revenue recognized for the third quarter and nine months ended March 28, 2025 that was included in the contract liability balance at June 28, 2024 was $ 8,563 and $ 50,310 , r espectively.

Revenue recognized for the third quarter and nine months ended March 29, 2024 that was included in the contract liability balance at June 30, 2023 was $ 10,170 and $ 41,413 , respectively.

R EMAINING P ERFORMANCE O BLIGATIONS

1 unchanged sentence

The definition of remaining performance obligations excludes contracts with original expected durations of less than one year, as well as those contracts that provide the customer with the right to cancel or terminate the order with no substantial penalty, even if the Company’s historical experience indicates the likelihood of cancellation or termination is remote.

As of December 27, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 770,011 .

As of March 28, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 722,977 .

The Company expects to recognize approximately 49 % of its remaining performance obligations as revenue in the next 12 months and the balance thereafter.

22 unchanged sentences

Settlements made during the period ( 2,904 )

Balance at December 27, 2024 $ 4,118

Balance at March 28, 2025 $ 3,550

W EIGHTED -A VERAGE S HARES

Weighted-average shares were calculated as follows:

Second Quarters Ended Six Months Ended

December 27, 2024 December 29, 2023 December 27, 2024 December 29, 2023

Third Quarters Ended Nine Months Ended

March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024

Basic weighted-average shares outstanding 58,749 57,698 58,614 57,536

1 unchanged sentence

Diluted weighted-average shares outstanding 58,749 57,698 58,614 57,536

Equity instruments to purchase 2,993 and 2,840 shares of common stock were not included in the calculation of diluted net loss per share for the second quarter and six months ended December 27, 2024, respectively, because the equity instruments were anti-dilutive.

Equity instruments to purchase 2,865 and 2,460 shares of common stock were not included in the calculation of diluted net loss per share for the second quarter and six months ended December 29, 2023, respectively, because the equity instruments were anti-dilutive.

Equity instruments to purchase 2,901 and 2,859 shares of common stock were not included in the calculation of diluted net loss per share for the third quarter and nine months ended March 28, 2025, respectively, because the equity instruments were anti-dilutive.

Equity instruments to purchase 2,711 and 2,551 shares of common stock were not included in the calculation of diluted net loss per share for the third quarter and nine months ended March 29, 2024, respectively, because the equity instruments were anti-dilutive.

R ECENTLY I SSUED A CCOUNTING P RONOUNCEMENTS

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The amendments in this ASU address improvements to disclosures surrounding operating expenses, including purchases of inventory, employee compensation, depreciation, amortization, and depletion, which are all normally included in common expense captions on the face of the income statement.

Any expenses remaining in relevant expense captions that are not disaggregated should be accompanied with a qualitative disclosure as to the nature.

Any expenses remaining in relevant expense captions that are not disaggregated should be accompanied with a qualitative disclosure as to their nature.

This ASU is effective for fiscal years beginning after December 15,

4 unchanged sentences

Fair Value of Financial Instruments

The following table summarizes the Companies' financial instruments measured at fair value on a recurring basis as of December 27, 2024:

The following table summarizes the Companies' financial instruments measured at fair value on a recurring basis as of March 28, 2025:

Fair Value Measurements

December 27, 2024 Level 1 Level 2 Level 3

March 28, 2025 Level 1 Level 2 Level 3

Interest rate swap $ 5,355 $ — $ 5,355 $ —

4 unchanged sentences

The fair value of the September 2023 Swap is estimated using a discounted cash flow analysis based on the contractual terms of the derivative, leveraging observable inputs other than quoted prices, such as interest rates.

As of December 27, 2024, the fair value of the September 2023 Swap was a liability of $ 3,559 a nd is included within Other non-current liabilities in the Company's Consolidated Balance Sheets.

As of March 28, 2025, the fair value of the September 2023 Swap was a liability of $ 5,355 a nd is included within Other non-current liabilities in the Company's Consolidated Balance Sheets.

As of June 28, 2024, the fair value of the September 2023 Swap was a liability of $ 2,436 and was included within Other non-current liabilities in the Company's Consolidated Balance Sheets.

11 unchanged sentences

The excess and obsolete inventory evaluation is based upon assumptions about future demand, historical usage, product mix and possible alternative uses.

During the six months ended December 27, 2024, the Company reclassified $ 12,675 of work in process inventory to Property and equipment, net to support broader customer outreach for its technologies and to meet anticipated production demands for its solutions through additional testing capabilities.

During the nine months ended March 28, 2025, the Company reclassified $ 12,675 of work in process inventory to Property and equipment, net to support broader customer outreach for its technologies and to meet anticipated production demands for its solutions through additional testing capabilities.

Inventory was comprised of the following:

December 27, 2024 June 28, 2024

March 28, 2025 June 28, 2024

Raw materials $ 213,509 $ 200,501

16 unchanged sentences

The Company also assesses potential triggering events during interim reporting periods.

During the second quarter ended December 27, 2024, the Company assessed events and circumstances to consider its reporting units for a potential triggering event, including:

During the third quarter ended March 28, 2025, the Company assessed events and circumstances to consider its reporting units for a potential triggering event, including:

macroeconomic conditions, industry and market considerations, financial performance and expectations of projected financial performance and cash flows, changes in the Company's stock price in relation to the carrying value of its reporting units, among other relevant factors.

1 unchanged sentence

Restructuring

During the six months ended December 27, 2024, the Company incurred $ 2,300 of severance costs.

On January 29, 2025, the Company approved and initiated workforce reductions that eliminated approximately 145 positions resulting in an additional $ 4,931 of severance costs for the three months ended March 28, 2025.

During the nine months ended March 28, 2025, the Company incurred $ 7,231 of severance costs.

The Company incurs restructuring and other charges in connection with management's decision to undertake certain actions to realign operating expenses through workforce reductions and the closure of certain Company facilities, businesses and product lines.

6 unchanged sentences

Cash paid ( 12,913 )

Balance at December 27, 2024 $ 1,873

The Company recorded an income tax benefit of $ 6,725 and $ 18,141 on a loss before income taxes of $ 24,304 and $ 63,722 for the second quarters ended December 27, 2024 and December 29, 2023, respectively.

The Company recorded an income tax benefit of $ 12,319 and $ 31,168 on a loss before income taxes of $ 47,423 and $ 113,457 for the six months ended December 27, 2024, and December 29, 2023, respectively.

During the second quarter and six months ended December 27, 2024, the Company recognized a tax provision of $ 138 and $ 357 related to stock compensation shortfalls, respectively, and during the second quarter and six months ended December 29, 2023, the Company recognized a tax provision of $ 431 and $ 1,646 related to stock compensation shortfalls respectively.

The effective tax rate for the second quarter and six months ended December 27, 2024 differed from the federal statutory rate primarily due to federal and state research and development credits, non-deductible compensation, and state taxes.

The effective tax rate for the second quarter and six months ended December 29, 2023 differed from the federal statutory rate primarily due to federal and state research and development credits, non-deductible compensation, stock compensation shortfalls, and state taxes.

Balance at March 28, 2025 $ 3,076

The Company recorded an income tax benefit of $ 2,648 and $ 12,643 on a loss before income taxes of $ 21,818 and $ 57,217 for the third quarters ended March 28, 2025 and March 29, 2024, respectively.

The Company recorded an income tax benefit of $ 14,967 and $ 43,811 on a loss before income taxes of $ 69,241 and $ 170,674 for the nine months ended March 28, 2025, and March 29, 2024, respectively.

The effective tax rate for the third quarter and nine months ended March 28, 2025 differed from the federal statutory rate primarily due to federal and state research and development credits, return to provision adjustments, non-deductible compensation, and state taxes.

The effective tax rate for the third quarter and nine months ended March 29, 2024 differed from the federal statutory rate primarily due to federal and state research and development credits, non-deductible compensation, stock compensation shortfalls, and state taxes.

The Company continues to maintain a valuation allowance on the majority of its foreign net operating loss carryforwards and state research and developmental tax credit carryforwards.

2 unchanged sentences

The Company maintains a 5 -year revolving credit facility (the "Revolver") with a maturity extended to February 28, 2027.

As of December 27, 2024, the Company's outstanding balance of unamortized deferred financing costs was $ 4,580 , which is being amortized to Other expense, net in the Consolidated Statements of Operations and Comprehensive Loss on a straight line basis over the term of the Revolver and includes the costs incurred in conjunction with the August 2024 amendment to the Revolver.

As of March 28, 2025, the Company's outstanding balance of unamortized deferred financing costs was $ 4,051 , which is being amortized to Other income (expense), net in the Consolidated Statements of Operations and Comprehensive Loss on a straight line basis over the term of the Revolver and includes the costs incurred in conjunction with the August 2024 amendment to the Revolver.

On November 7, 2023, due to the uncertainty surrounding a government shutdown or prolonged continuing resolution and the potential impact on the second quarter and fiscal 2024 results, the Company proactively executed Amendment No.

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6 to the Revolver, the Company incurred $ 2,249 of new deferred financing costs that will be amortized over the remaining term of the Revolver.

As part of the amendment, the Company wrote off $ 714 of previously deferred financing costs associated with the

line of credit facility prior to the amendment.

As part of the amendment, the Company wrote off $ 714 of previously deferred financing costs associated with the line of credit facility prior to the amendment.

This write-off is included in Other expense, net in the Consolidated Statements of Operations and Comprehensive Loss.

Refer to exhibit 10.7.6 on Form 10-K filed by the Company with the SEC on August 13, 2024.

During the second quarter and six months ended December 27, 2024, the Company made no borrowings or repayments.

As of December 27, 2024, the Company was in compliance with all covenants and conditions under the Revolver and there were outstanding borrowings of $ 591,500 against the Revolver, resulting in interest expense of $ 8,430 and $ 17,336 for the second quarter and six months ended December 27, 2024.

The borrowing capacity as defined under the Revolver as of December 27, 2024 is approximately $ 750,000 less outstanding borrowings of $ 591,500 .

There were outstanding letters of credit of $ 987 as of December 27, 2024.

During the third quarter and nine months ended March 28, 2025, the Company made no borrowings or repayments.

As of March 28, 2025, the Company was in compliance with all covenants and conditions under the Revolver and there were outstanding borrowings of $ 591,500 against the Revolver, resulting in interest expense of $ 8,068 and $ 25,404 for the third quarter and nine months ended March 28, 2025.

The borrowing capacity as defined under the Revolver as of March 28, 2025 is approximately $ 900,000 less outstanding borrowings of $ 591,500 .

There were outstanding letters of credit of $ 7,640 as of March 28, 2025.

Employee Benefit Plan

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The funded status may vary from year to year due to changes in the fair value of the Plan’s assets and variations on the underlying assumptions of the projected benefit obligation of the Plan.

The Plan's funded status at December 27, 2024 was a net liability of $ 5,057 , which is recorded in Other non-current liabilities on the Consolidated Balance Sheet.

The Company recognized net periodic benefit costs of $ 231 and $ 208 associated with the Plan and a net loss of $ 51 and $ 57 in AOCI during the second quarters ended December 27, 2024 and December 29, 2023, respectively.

The Company recognized net periodic benefit costs of $ 463 and $ 415 associated with the Plan and a net loss of $ 105 and $ 113 in AOCI during the six months ended December 27, 2024 and December 29, 2023, respectively.

The Plan's funded status at March 28, 2025 was a net liability of $ 5,254 , which is recorded in Other non-current liabilities on the Consolidated Balance Sheet.

The Company recognized net periodic benefit costs of $ 227 and $ 213 associated with the Plan and a net loss of $ 51 and $ 56 in AOCI during the third quarters ended March 28, 2025 and March 29, 2024, respectively.

The Company recognized net periodic benefit costs of $ 691 and $ 628 associated with the Plan and a net loss of $ 156 and $ 169 in AOCI during the nine months ended March 28, 2025 and March 29, 2024, respectively.

The Company's total expected employer contributions to the Plan during fiscal 2025 are $ 939 .

The Company maintains a qualified 401(k) plan (the “401(k) Plan”) for its U.S.

employees and matches participants' contributions to the plan of up to 6 % of their eligible annual compensation in Company stock.

employees and matches participants' contributions to the plan and/or qualified student loan payments of up to 6 % of their eligible annual compensation in Company stock.

The Company may also make optional contributions to the plan for any plan year at its discretion.

The Company had $ 2,922 and $ 2,901 of capitalized stock-based 401(k) matching compensation expense on the Consolidated Balance Sheets at December 27, 2024 and June 28, 2024, respectively.

The Company had $ 3,184 and $ 2,901 of capitalized stock-based 401(k) matching compensation expense on the Consolidated Balance Sheets at March 28, 2025 and June 28, 2024, respectively.

Stock-based 401(k) matching compensation cost is measured based on the value of the matching amount and is recognized as expense as incurred.

During the second quarter and six months ended December 27, 2024, the Company recognized share-based matching contributions related to the 401(k) plan of $ 3,428 and $ 7,860 , as compared to $ 2,811 and $ 7,652 during the second quarter and six months ended December 29, 2023.

During the third quarter and nine months ended March 28, 2025, the Company recognized share-based matching contributions related to the 401(k) plan of $ 3,533 and $ 11,393 , as compared to $ 4,528 and $ 12,180 during the third quarter and nine months ended March 29, 2024.

Deferred Compensation Plan

The Company implemented a nonqualified deferred compensation plan as of January 1, 2024, under which eligible employees may defer up to 50% of their base salaries and up to 100% of their annual incentive bonuses.

The Company may also make employer contributions to participant accounts in its sole discretion, and for calendar year 2024, will match participants’ deferrals under the plan of up to 6% of their eligible annual compensation in the form of deferred stock units (or at the Company’s election, a cash deferral credited to participants’ account balances).

The Company’s matching obligation for 2024 is subject to the satisfaction of a financial performance condition for the Company's four fiscal quarters corresponding to the 2024 calendar year.

The Company may also make employer contributions to participant accounts in its sole discretion, and currently matches participants’ deferrals under the plan of up to 6% of their eligible annual compensation in the form of deferred stock units (or at the Company’s election, a cash deferral credited to participants’ account balances).

The Company’s matching obligations for participant deferrals made during each calendar year are subject to a financial performance condition for the Company's four fiscal quarters corresponding to such calendar year.

In the case of the Company's matching obligations for participant deferrals made during calendar year 2024, the financial performance condition was fully satisfied, and the deferred stock units issued in respect of the Company's matching obligations vested accordingly.

Participant deferrals under the plan are held in a rabbi trust and are subject to the claims of the Company’s creditors.

1 unchanged sentence

All deferrals or employer contributions under the plan, and all earnings thereon, are fully vested as and when made or credited to plan participants.

As of December 27, 2024, the Company held assets under the rabbi trust of $ 210 , and was subject to liabilities for amounts payable under the plan to participants (including accrued employer matching contributions not yet credited to plan participants) of $ 210 .

As of March 28, 2025, the Company held assets under the rabbi trust of $ 212 , and was subject to liabilities for amounts payable under the plan to participants (including accrued employer matching contributions not yet credited to plan participants) of $ 212 .

Assets related to this plan are included in Other assets, and liabilities related to this plan are included in Other long-term liabilities in the Consolidated Balance Sheets.

During the second quarter ended December 27, 2024, the Company recognized an immaterial value of compensation expense as a result of changes in the value of notional investments selected by plan participants for the investment of their plan account balances, with the same amount being recorded as other income attributable to changes in the market value of the assets held by the Rabbi trust.

The nonqualified deferred compensation plan was not in place as of the second quarter ended December 29, 2023.

During the third quarters ended March 28, 2025 and March 29, 2024, the Company recognized an immaterial value of compensation expense as a result of changes in the value of notional investments selected by plan participants for the investment of their plan account balances, with the same amount being recorded as other income attributable to changes in the market value of the assets held by the rabbi trust.

Stock-Based Compensation

S TOCK I NCENTIVE P LANS

At December 27, 2024, the aggregate number of shares authorized for issuance under the Company’s Amended and Restated 2018 Stock Incentive Plan (the “2018 Plan”) is 7,862 shares, including 3,000 shares approved by the Company's shareholders on October 28, 2020 and 2,000 shares approved for future grant under the 2018 Plan by the Company's shareholders on October 26, 2022.

At March 28, 2025, the aggregate number of shares authorized for issuance under the Company’s Amended and Restated 2018 Stock Incentive Plan (the “2018 Plan”) is 7,862 shares, including 3,000 shares approved by the Company's shareholders on October 28, 2020 and 2,000 shares approved for future grant under the 2018 Plan by the Company's shareholders on October 26, 2022.

On October 25, 2023, the Company's shareholders approved an additional 3,450 shares to be added to the 2018 plan.

3 unchanged sentences

Stock options must be granted with an exercise price of not less than 100 % of the fair value of the Company’s common stock on the date of grant and the options generally have a term of seven years .

There were 3,076 available shares for future grant under the 2018 Plan at December 27, 2024.

There were 3,132 available shares for future grant under the 2018 Plan at March 28, 2025.

As part of the Company's ongoing annual equity grant program for employees, the Company grants performance-based restricted stock awards to certain executives and employees pursuant to the 2018 Plan.

8 unchanged sentences

The 1997 ESPP permitted employees to purchase common stock through payroll deductions, which may not have exceeded 10 % of an employee’s compensation as defined in the 1997 ESPP.

There were no shares and 107 shares issued under the 1997 ESPP during the six months ended December 27, 2024 and December 29, 2023, respectively.

There were an immaterial amount of shares related to the 1997 Plan issued and returned to the reserve during the six months ended December 27, 2024.

There were no shares and 107 shares issued under the 1997 ESPP during the nine months ended March 28, 2025 and March 29, 2024, respectively.

There were an immaterial amount of shares related to the 1997 Plan issued and returned to the reserve during the nine months ended March 28, 2025.

The Company adopted a new employee stock purchase plan (the “2024 ESPP”) in April 2024.

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The 2024 ESPP permits employees to purchase common stock through payroll deductions, which may not exceed 10 % of an employee’s compensation as defined in the 2024 ESPP.

There were 65 shares and no shares issued under the 2024 ESPP during the six months ended December 27, 2024 and December 29, 2023, respectively.

Shares available for future purchase under the 2024 ESPP totaled 935 at December 27, 2024.

There were 65 shares and no shares issued under the 2024 ESPP during the nine months ended March 28, 2025 and March 29, 2024, respectively.

Shares available for future purchase under the 2024 ESPP totaled 935 at March 28, 2025.

S TOCK O PTION A ND A WARD A CTIVITY

4 unchanged sentences

Ballhaus are parties to an employment agreement, which is included in exhibit 10.1 on Form 8-K filed by the Company with the SEC on August 15, 2023.

The following table summarizes activity of the Company's stock option plans since June 28, 2024:

The following table summarizes activity with respect to Company-issued stock options since June 28, 2024:

Options Outstanding

4 unchanged sentences

(Years) Aggregate

Intrinsic Value as of December 27, 2024

Intrinsic Value as of March 28, 2025

Outstanding at June 28, 2024 934 $ 12.71 $ 45.00 —

Exercised — —

Outstanding at December 27, 2024 934 12.71 45.00 3.21 years —

Exercisable at December 27, 2024 — $ — $ — — —

There were no options vested or exercised during the second quarter ended December 27, 2024.

Outstanding at March 28, 2025 934 12.71 45.00 2.98 years —

Exercisable at March 28, 2025 — $ — $ — — —

There were no options vested or exercised during the nine months ended March 28, 2025.

Non-vested stock options are subject to the risk of forfeiture until the fulfillment of specified conditions.

As of December 27, 2024, there was $ 7,531 of total unrecognized compensation cost related to non-vested options granted that is expected to be recognized over a weighted-average period of 2.21 years from December 27, 2024.

As of March 28, 2025, there was $ 6,685 of total unrecognized compensation cost related to non-vested options granted that is expected to be recognized over a weighted-average period of 1.98 years from March 28, 2025.

The following table summarizes the status of the Company’s non-vested restricted stock awards and deferred stock awards since June 28, 2024:

5 unchanged sentences

Forfeited ( 164 ) 42.04

Outstanding at December 27, 2024 2,010 $ 39.68

Outstanding at March 28, 2025 1,870 $ 39.36

S TOCK -B ASED C OMPENSATION E XPENSE

The Company recognizes expense for its share-based payment plans in the Consolidated Statements of Operations and Comprehensive Loss in accordance with ASC 718, Compensation - Stock Compensation (“ASC 718”).

The Company had $ 1,559 and $ 456 of capitalized stock-based compensation expense on the Consolidated Balance Sheets for the periods ended December 27, 2024 and June 28, 2024, respectively.

The Company had $ 1,410 and $ 456 of capitalized stock-based compensation expense on the Consolidated Balance Sheets for the periods ended March 28, 2025 and June 28, 2024, respectively.

Under the fair value recognition provisions of ASC 718, stock-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the service period, net of estimated forfeitures.

The following table presents share-based compensation expenses included in the Company’s Consolidated Statements of Operations and Comprehensive Loss:

Second Quarters Ended Six Months Ended

December 27, 2024 December 29, 2023 December 27, 2024 December 29, 2023

Third Quarters Ended Nine Months Ended

March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024

Cost of revenues $ 813 $ 1,299 $ 759 $ 2,119

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Europe Asia Pacific Eliminations Total

SECOND QUARTER ENDED DECEMBER 27, 2024

THIRD QUARTER ENDED MARCH 28, 2025

Net revenues to unaffiliated customers $ 200,241 $ 11,117 $ — $ — $ 211,358

1 unchanged sentence

Net revenues $ 201,780 $ 13,694 $ — $ ( 4,116 ) $ 211,358

SECOND QUARTER ENDED DECEMBER 29, 2023

THIRD QUARTER ENDED MARCH 29, 2024

Net revenues to unaffiliated customers $ 199,834 $ 8,418 $ 6 $ — $ 208,258

1 unchanged sentence

Net revenues $ 201,082 $ 8,629 $ 6 $ ( 1,459 ) $ 208,258

SIX MONTHS ENDED DECEMBER 27, 2024

NINE MONTHS ENDED MARCH 28, 2025

Net revenues to unaffiliated customers $ 597,955 $ 40,959 $ — $ — $ 638,914

1 unchanged sentence

Net revenues $ 604,267 $ 48,884 $ — $ ( 14,237 ) $ 638,914

SIX MONTHS ENDED DECEMBER 29, 2023

NINE MONTHS ENDED MARCH 29, 2024

Net revenues to unaffiliated customers $ 554,877 $ 31,817 $ 18 $ — $ 586,712

14 unchanged sentences

The following table presents the Company's net revenue by end user for the periods presented:

Second Quarters Ended Six Months Ended

December 27, 2024 December 29, 2023 December 27, 2024 December 29, 2023

Third Quarters Ended Nine Months Ended

March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024

$ 176,203 $ 177,973 $ 513,688 $ 506,262

8 unchanged sentences

The following table presents the Company's net revenue by end application for the periods presented:

Second Quarters Ended Six Months Ended

December 27, 2024 December 29, 2023 December 27, 2024 December 29, 2023

Third Quarters Ended Nine Months Ended

March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024

$ 35,921 $ 24,607 $ 116,780 $ 62,373

13 unchanged sentences

The following table presents the Company's net revenue by product grouping for the periods presented:

Second Quarters Ended Six Months Ended

December 27, 2024 December 29, 2023 December 27, 2024 December 29, 2023

Third Quarters Ended Nine Months Ended

March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024

Components (1)

16 unchanged sentences

The following table presents the Company's net revenue by platform for the periods presented:

Second Quarters Ended Six Months Ended

December 27, 2024 December 29, 2023 December 27, 2024 December 29, 2023

Third Quarters Ended Nine Months Ended

March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024

$ 101,548 $ 95,014 $ 288,252 $ 317,808

10 unchanged sentences

The geographic distribution of the Company’s identifiable long-lived assets is summarized as follows:

December 27, 2024 $ 109,025 $ 2,434 $ 111,459

March 28, 2025 $ 104,924 $ 2,553 $ 107,477

June 28, 2024 $ 107,655 $ 2,698 $ 110,353

1 unchanged sentence

Customers comprising 10% or more of the Company’s revenues for the periods shown are as follows:

Second Quarters Ended Six Months Ended

December 27, 2024 December 29, 2023 December 27, 2024 December 29, 2023

RTX Corporation 15 % * 12 % 10 %

Third Quarters Ended Nine Months Ended

March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024

Navy 14 % * 11 % *

L3Harris * * 10 % 10 %

RTX Corporation 11 % 11 % 11 % 10 %

Lockheed Martin Corporation 11 % 15 % 10 % 11 %

L3Harris * 13 % * 11 %

Northrop Grumman * 10 % * *

36 % 49 % 32 % 32 %

1 unchanged sentence

While the Company typically has customers from which it derives 10% or more of its revenue, the sales to each of these customers are spread across multiple programs and platforms.

There were no programs comprising 10% or more of the Company's revenues for the second quarters and six months ended December 27, 2024 and December 29, 2023.

There were no programs comprising 10% or more of the Company's revenues for the third quarters and nine months ended March 28, 2025 and March 29, 2024.

Commitments and Contingencies

9 unchanged sentences

NTS is seeking payment from the Company of NTS’s costs for any required environmental remediation.

In April 2022, the Company engaged in a meet and confer session with NTS pursuant to Massachusetts General Laws Chapter 21E, Section 4A to discuss the status of the environmental review performed by NTS and its licensed site professional.

In April 2022, the Company engaged in a meet and confer session with NTS pursuant to Massachusetts General Laws Chapter

21E, Section 4A to discuss the status of the environmental review performed by NTS and its licensed site professional.

The Company subsequently delivered a letter to NTS outlining the deficiencies in their claim and reiterated that the Company is not obligated to tender a substantive response to their demand without first having received the responsive information requested in connection with the meet and confer session.

9 unchanged sentences

On September 19, 2023, the former CEO filed for binding arbitration under the employment rules of the American Arbitration Association (“AAA”).

An arbitrator was appointed on November 29, 2023, and an arbitration trial that was initially scheduled for mid-December 2024 has been rescheduled to late March 2025.

On March 25, 2024, the arbitrator denied Mr.

Aslett's motion for compensation during the dispute and payment of his legal fees, preserving those matters for the arbitration trial.

The Company intends to contest vigorously the claims under the CIC Agreement and believes that the Company has strong arguments that the former CEO’s claims lack merit.

An arbitrator was appointed on November 29, 2023.

On March 25, 2024, the arbitrator denied the former CEO’s motion for compensation during the dispute and payment of his legal fees, preserving those matters for the arbitration hearing.

An arbitration hearing was conducted from March 31, 2025 through April 9, 2025.

In connection with the hearing, the arbitrator and the parties agreed to a post-hearing briefing schedule with initial briefs due May 16, 2025, response briefs due June 13, 2025 and oral arguments on June 30, 2025.

The Company continues to contest vigorously the claims under the CIC Agreement and believes that the Company has strong arguments that the former CEO’s claims lack merit.

If the arbitrator rules in the Company’s favor, the Company may still need to pay the former CEO’s reasonable legal fees, interest, and compensation during the dispute.

13 unchanged sentences

On October 17, 2024, the Company received a shareholder derivative demand alleging the same claims as those covered in the federal securities class action.

On November 14, 2024, the Company and the shareholder entered into a tolling agreement on the derivative demand.

On November 14, 2024, the Company and the shareholder entered into a tolling agreement on this derivative demand.

On February 20, 2025, the court issued an order that dismissed claims relating to 14 of 17 challenged statements and that allowed the remaining three challenged statements to proceed.

The court also dismissed Messrs.

Ruppert and Farnsworth from the lawsuit.

The parties are beginning the discovery process.

On March 4, 2025, the Company received an additional derivative demand from another shareholder alleging the same claims as those covered in the federal securities class action and the first derivative demand.

Subject to the terms of the Company's by-laws and applicable Massachusetts law, Mr.

Aslett, the Company's former Chief Executive Officer, and Mr.

Ruppert, the Company's former Chief Financial Officer, Mr.

Ballhaus, the Company's current Chief Executive Officer, and Mr.

Farnsworth, the Company's current Chief Financial officer, are

indemnified by the Company for this matter.

The Company believes the claims in the complaints are without merit and intends to defend itself vigorously.

Ballhaus, the Company's current Chief Executive Officer, are indemnified by the Company for this matter.

The Company believes the claims in the complaint and derivative demands are without merit and intends to defend itself vigorously.

It is too early to determine what responsibility, if any, the Company will have for this matter.

1 unchanged sentence

On October 1, 2024, a second former employee at our Torrance location filed a PAGA notice to act in a representative capacity on allegations of a range of violations of California wage and hour regulations.

On December 21, 2024, the Company, reached an agreement in principle to settle these wage and hour class action claims for $ 450 , which settlement is subject to review and approval by the court.

On December 21, 2024, the Company reached an agreement in principle to settle these wage and hour class action claims for $ 450 , which settlement in principle is subject to a final settlement agreement and review and approval by the court.

I NDEMNIFICATION O BLIGATIONS

3 unchanged sentences

P URCHASE C OMMITMENTS

As of December 27, 2024, the Company has entered into non-cancelable purchase commitments for certain inventory components and services used in its normal operations.

As of March 28, 2025, the Company has entered into non-cancelable purchase commitments for certain inventory components and services used in its normal operations.

The purchase commitments covered by these agreements are for less than one year and aggregate to $ 156,759 .

15 unchanged sentences

The September 2023 Swap matures on February 28, 2027, coterminous with the maturity of the Revolver.

As of December 27, 2024, the fair value of the September 2023 Swap was a liability of $ 3,559 a nd is included within Other non-current liabilities in the Company's Consolidated Balance Sheets.

During the second quarter and six months ended December 27, 2024, the Company amortized a total of $ 881 and $ 1,762 , respectively, of the gain associated with the interest swaps terminated on September 29, 2022 and September 28, 2023, which is included within Other comprehensive loss.

As of March 28, 2025, the fair value of the September 2023 Swap was a liability o f $ 5,355 a nd is included within Other non-current liabilities in the Company's Consolidated Balance Sheets.

During the third quarter and nine months ended March 28, 2025, the Company amortized a total of $ 881 and $ 2,643 , respectively, of the gain associated with the interest swaps terminated on September 29, 2022 and September 28, 2023, which is included within Other comprehensive loss.

The market risk associated with the Company’s derivative instrument is the result of interest rate movements that are expected to offset the market risk of the underlying arrangement.

The counterparty to the September 2023 Swap is JPMorgan.

Based on the credit ratings of the Company’s counterparty as of December 27, 2024, nonperformance is not perceived to be a material risk.

Based on the credit ratings of the Company’s counterparty as of March 28, 2025, nonperformance is not perceived to be a material risk.

Furthermore, none of the Company’s derivatives are subject to collateral or other security arrangements and none contain provisions that are dependent on the Company’s credit ratings from any credit rating agency.

3 unchanged sentences

Subsequent Events

The Company has evaluated subsequent events from the date of the Consolidated Balance Sheet through the date the consolidated financial statements were issued.

On January 29, 2025, the Company executed a workforce reduction that will eliminate approximately 145 positions, resulting in expected restructuring charges of approximately $ 5,000 .

All of the restructuring and other charges will be classified as Operating expenses in the Consolidated Statements of Operations and Comprehensive Loss and any remaining restructuring obligations are expected to be paid within the next twelve months.

The Company has evaluated subsequent events from the date of the Consolidated Balance Sheet through the date the consolidated financial statements were issued and noted no items requiring adjustment of the financial statements or additional 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-Q

Item 1. Financial Statements