What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-08-11 compared with 2024-08-13 · 211 added, 218 removed, 972 unchanged (31% of the section changed)

11 unchanged sentences

Inventory 332,920 335,300

Prepaid income taxes 457 —

Prepaid expenses and other current assets 27,639 22,493

35 unchanged sentences

MERCURY SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except per share data)

For the Fiscal Years Ended

June 28, 2024 June 30, 2023 July 1, 2022

June 27, 2025 June 28, 2024 June 30, 2023

Net revenues $ 912,020 $ 835,275 $ 973,882

8 unchanged sentences

Total operating expenses 274,121 343,655 338,413

(Loss) income from operations ( 147,754 ) ( 21,685 ) 31,610

Loss from operations ( 19,627 ) ( 147,754 ) ( 21,685 )

Interest income 3,607 1,199 1,053

1 unchanged sentence

Other expense, net ( 974 ) ( 7,705 ) ( 2,751 )

(Loss) income before income taxes ( 189,275 ) ( 48,542 ) 18,395

Income tax (benefit) provision ( 51,635 ) ( 20,207 ) 7,120

Net (loss) income $ ( 137,640 ) $ ( 28,335 ) $ 11,275

Basic net (loss) earnings per share $ ( 2.38 ) $ ( 0.50 ) $ 0.20

Diluted net (loss) earnings per share $ ( 2.38 ) $ ( 0.50 ) $ 0.20

Loss before income taxes ( 50,424 ) ( 189,275 ) ( 48,542 )

Income tax benefit ( 12,520 ) ( 51,635 ) ( 20,207 )

Net loss $ ( 37,904 ) $ ( 137,640 ) $ ( 28,335 )

Basic net loss per share $ ( 0.65 ) $ ( 2.38 ) $ ( 0.50 )

Diluted net loss per share $ ( 0.65 ) $ ( 2.38 ) $ ( 0.50 )

Weighted-average shares outstanding:

1 unchanged sentence

Diluted 58,746 57,738 56,554

Comprehensive (loss) income:

Net (loss) income $ ( 137,640 ) $ ( 28,335 ) $ 11,275

Comprehensive loss:

Net loss $ ( 37,904 ) $ ( 137,640 ) $ ( 28,335 )

Change in fair value of derivative instruments, net of tax ( 4,666 ) ( 833 ) 5,856

Foreign currency translation adjustments, net of tax ( 20 ) 380 300

Pension benefit plan, net of tax ( 1,383 ) 142 4,739

Deferred compensation and pension benefit plan, net of tax ( 1,809 ) ( 1,383 ) 142

Total other comprehensive (loss) income, net of tax ( 6,495 ) ( 1,836 ) 6,298

Total comprehensive (loss) income $ ( 139,476 ) $ ( 22,037 ) $ 17,145

Total comprehensive loss $ ( 44,399 ) $ ( 139,476 ) $ ( 22,037 )

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

1 unchanged sentence

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For the Fiscal Years Ended June 28, 2024, June 30, 2023 and July 1, 2022

For the Fiscal Years Ended June 27, 2025, June 28, 2024 and June 30, 2023

(In thousands)

3 unchanged sentences

Comprehensive

(Loss) Income Total

Shareholders’

3 unchanged sentences

Issuance of common stock under employee stock purchase plan 145 2 5,490 — — 5,492

Issuance of common stock under defined contribution plan 400 4 18,366 — — 18,370

Retirement of common stock ( 1 ) — ( 63 ) — — ( 63 )

Stock-based compensation — — 27,738 — — 27,738

Net income — — — 11,275 — 11,275

Net loss — — — ( 28,335 ) — ( 28,335 )

Other comprehensive income — — — — 6,298 6,298

Balance at July 1, 2022 55,680 557 1,145,323 385,774 5,531 1,537,185

Balance at June 30, 2023 56,962 $ 570 $ 1,196,847 $ 357,439 $ 11,829 $ 1,566,685

Issuance of common stock under employee stock incentive plans 476 5 ( 5 ) — — —

4 unchanged sentences

Net loss — — — ( 137,640 ) — ( 137,640 )

Other comprehensive income — — — — 6,298 6,298

Other comprehensive loss — — — — ( 1,836 ) ( 1,836 )

Balance at June 28, 2024 58,094 $ 581 $ 1,242,402 $ 219,799 $ 9,993 $ 1,472,775

2 unchanged sentences

Issuance of common stock under defined contribution plan 375 4 15,144 — — 15,148

Retirement of common stock ( 1 ) ( 1 ) ( 30 ) — — ( 31 )

Stock-based compensation — — 26,276 — — 26,276

7 unchanged sentences

For the Fiscal Years Ended

June 28, 2024 June 30, 2023 July 1, 2022

June 27, 2025 June 28, 2024 June 30, 2023

Cash flows from operating activities:

Net (loss) income $ ( 137,640 ) $ ( 28,335 ) $ 11,275

Net loss $ ( 37,904 ) $ ( 137,640 ) $ ( 28,335 )

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

19 unchanged sentences

Purchases of property and equipment ( 19,803 ) ( 34,291 ) ( 38,796 )

Acquisition of assets and businesses, net of cash acquired ( 4,543 ) — —

Proceeds from sale of manufacturing operations to Cicor Group 6,246 — —

Other investing activities 4,600 — 235

Acquisition of businesses, net of cash acquired — — ( 243,464 )

Net cash used in investing activities ( 13,500 ) ( 34,291 ) ( 38,561 )

7 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents 1,815 187 295

Net increase (decrease) in cash and cash equivalents 108,958 5,909 ( 48,185 )

Net increase in cash and cash equivalents 128,578 108,958 5,909

Cash and cash equivalents at beginning of year 180,521 71,563 65,654

2 unchanged sentences

Interest $ 36,559 $ 37,423 $ 27,288

Income taxes (refunded) paid, net $ ( 9,315 ) $ 24,243 $ 14,121

Income taxes paid (refunded), net $ 365 $ ( 9,315 ) $ 24,243

Supplemental disclosures—non-cash activities:

1 unchanged sentence

Purchases of property and equipment incurred but not yet paid $ 3,895 $ 4,051 $ 6,475

Non-cash investing activity:

Inventory transfer to property and equipment, net $ 12,675 $ — $ —

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

4 unchanged sentences

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.

(the Company) is a technology company that delivers mission-critical processing 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.

1 unchanged sentence

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

The Company's processing platform spans the full breadth of signal processing—from radio frequency (“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.

4 unchanged sentences

B ASIS OF P RESENTATION

All references to fiscal 2025 are to the 52-week period from June 29, 2024 to June 27, 2025.

All references to fiscal 2024 are to the 52-week period from July 1, 2023 to June 28, 2024.

All references to fiscal 2023 are to the 52-week period from July 2, 2022 to June 30, 2023.

All references to fiscal 2022 are to the 52-week period from July 3, 2021 to July 1, 2022.

U SE OF E STIMATES

13 unchanged sentences

The Company measures its lease obligations in accordance with ASC 842, Leases , (“ASC 842”), which requires lessees to recognize a right-of-use (“ROU”) asset and lease liability for most lease arrangements.

The Company has arrangements involving the lease of facilities, machinery and equipment.

The Company has arrangements involving the lease of facilities.

Under ASC 842, at inception of the arrangement, the Company determines whether the contract is or contains a lease and whether the lease should be classified as an operating or a financing lease.

9 unchanged sentences

The Company has elected to exclude non-lease components from the calculation of its ROU assets and lease liabilities.

In the Company's adoption of ASC 842, leases with an initial term of 12 months or less will not result in recognition of a ROU asset and a lease liability and will be expensed as incurred over the lease term.

Leases with an initial term of 12 months or less do not result in recognition of a ROU asset and a lease liability and will be expensed as incurred over the lease term.

Leases of this nature were immaterial to the Company’s consolidated financial statements.

5 unchanged sentences

Operating leases are included in Operating lease right-of-use assets, net, Accrued expenses, and Operating lease liabilities in the Company's Consolidated Balance Sheets.

The standard had no impact on the Company's Consolidated Statements of Operations and Comprehensive (Loss) Income or Consolidated Statements of Cash Flows.

See Note I to the consolidated financial statements for more information regarding our obligations under leases.

10 unchanged sentences

In these cases, the Company conducts such tests and, if they are completed successfully, includes a written confirmation with each order shipped.

As a result, at the time of each product shipment, the Company

believes that no further customer testing requirements exist and that there is no uncertainty of acceptance by its customer.

As a result, at the time of each product shipment, the Company believes that no further customer testing requirements exist and that there is no uncertainty of acceptance by its customer.

The Company's contracts with customers generally do not include a right of return relative to delivered products.

1 unchanged sentence

In most instances, contract modifications are accounted for as part of the existing contract.

Certain contracts with customers have options for the customer to acquire additional goods or services.

Certain contracts with customers have options for the customer

to acquire additional goods or services.

In most cases the pricing of these options are reflective of the standalone selling price of the good or service.

24 unchanged sentences

Standalone selling prices will be analyzed on a more frequent basis if a significant change in the Company’s business necessitates a more frequent analysis or if the Company experiences significant variances in its selling prices.

Revenue recognized at a point in time generally relates to contracts that include a combination of components, modules and sub-assemblies, integrated subsystems 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, totaled 45 %, 44 % and 45 % of revenues in the fiscal years ended June 28, 2024, June 30, 2023 and July 1, 2022, respectively.

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, totaled 53 %, 45 % and 44 % of revenues in the fiscal years ended June 27, 2025, June 28, 2024 and June 30, 2023, respectively.

Revenue is recognized at a point in time for these products and services (versus over time recognition) due to the following:

6 unchanged sentences

Revenue is recognized over time, due to the fact that:

(i) the Company’s performance creates or enhances an asset that the customer controls as the asset is created or

(i) the Company’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced;

and (ii) the Company’s performance creates an asset with no alternative use to the Company and the Company has an enforceable right to payment for performance completed to date.

The Company considers the nature of these contracts and the types of products and services provided when determining the proper accounting for a particular contract.

These contracts include both fixed-price and cost reimbursable contracts.

These contracts

include both fixed-price and cost reimbursable contracts.

The Company’s cost reimbursable contracts typically include cost-plus fixed fee and time and material (“T&M”) contracts.

12 unchanged sentences

For over time contracts, the Company recognizes anticipated contract losses as soon as they become known and estimable.

Total revenue recognized under over time contracts was 47 %, 55 % and 56 % of revenues in the fiscal years ended June 27, 2025, June 28, 2024 and June 30, 2023, respectively.

Accounting for contracts recognized over time requires significant judgment relative to estimating total contract revenues and costs, in particular, assumptions relative to the amount of time to complete the contract, including the assessment of the nature and complexity of the work to be performed and the impact of contract amendments which may result in cumulative adjustments.

4 unchanged sentences

For the Fiscal Years Ended

(In thousands, except per share data) June 28, 2024 June 30, 2023 July 1, 2022

(In thousands, except per share data) June 27, 2025 June 28, 2024 June 30, 2023

Loss from operations $ ( 21,070 ) $ ( 73,245 ) $ ( 56,266 )

3 unchanged sentences

(1) Federal and state statutory rate of 27%

Total revenue recognized under over time contracts over time was 55 %, 56 % and 55 % of revenues in the fiscal years ended June 28, 2024, June 30, 2023 and July 1, 2022, respectively.

The Company generally does not provide its customers with rights of product return other than those related to assurance warranty provisions that permit repair or replacement of defective goods over a period of 12 to 36 months.

25 unchanged sentences

The contract asset balance decreased due to $ 452,171 of billings, offset by revenue recognized under over time contracts of $ 426,617 during the fiscal year ended June 27, 2025.

During the fiscal year ended June 28, 2024, the Company's contract assets were impacted by changes in estimates for contracts recognized over time and $ 16,017 write-offs and reserves as a result of ongoing negotiations of settlement terms with its customers.

The contract liability balances were $ 127,605 and $ 74,367 as of June 27, 2025 and June 28, 2024, respectively.

19 unchanged sentences

A CCOUNTS R ECEIVABLES F ACTORING

On September 27, 2022, the Company executed an uncommitted receivables purchase agreement (“RPA”), pursuant to which the Company may offer to sell certain customer receivables, subject to the terms and conditions of the RPA.

The RPA is an uncommitted arrangement such that the Company is not obligated to sell any receivables and the party has no obligation to purchase any receivables from the Company.

Pursuant to the RPA, the party may pu rchase certain of the Company's customer receivables at a discounted rate, subject to a limit that as of any date, the total amount of purchased receivables held by the party, less the amount of all collections received on such receivables, may not exceed $ 20,000 .

The RPA has an indefinite term and the agreement remains in effect until it is terminated by either party.

Factoring under the RPA Agreement is treated as a true sale of accounts receivable by the Company.

The Company has continued involvement in servicing accounts receivable under the RPA, but no retained interests related to the factored accounts receivable.

On March 14, 2023, the Company amended the RPA to increase the capacity from $ 20,000 to $ 30,600 .

On June 21, 2023, the Company further amended the RPA to increase the capacity from $ 30,600 to $ 60,000 .

On September 27, 2022, the Company executed an uncommitted receivables purchase agreement (“RPA”), pursuant to which the Company could offer to sell certain customer receivables, subject to the terms and conditions of the RPA.

On August 13, 2024, the Company terminated the RPA in conjunction with entering into a new receivables purchase and service agreement.

On August 13, 2024, the Company entered into a $ 60,000 committed receivables purchase and servicing agreement (“RPSA”) with a new party.

The RPSA has an initial term of two years.

Pursuant to the RPSA, the new party has committed to purchase receivables at a discount from a list of certain of the Company’s customers, maintaining a balance of purchased receivables at or below $ 60,000 .

Under the RPSA, a portion of the factored receivables is paid by the counterparty in cash and classified as a deferred purchase price receivable, which is paid as receivables are collected by the Company.

Proceeds for amounts factored by the Company are recorded as an incr ease to cash and a reduction to accounts receivable outstanding in the Consolidated Balance Sheets.

Cash Flows attributable to factoring are reflected as cash flows from operating activities in the Company's Consolidated Statements of Cash Flows.

Factoring fees are included as selling, general and administrative expenses in the Company's Consolidated Statements of Operations and Comprehensive (Loss) Income .

The Company had $ 33,777 and $ 30,488 factored accounts receivables as of June 28, 2024 and June 30, 2023, respectively.

Cash flows attributable to factored receivables are reflected as cash flows from operating activities in the Company's Consolidated Statements of Cash Flows.

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

The Company had $ 52,164 and $ 33,777 of factored accounts receivables as of June 27, 2025 and June 28, 2024, respectively.

The Company incurred factoring fees of approximately $ 1,758 and $ 1,947 for fiscal years 2025 and 2024, respectively.

See Note R "Subsequent Events" to the consolidated financial statements for discussion of the Company's termination of its uncommitted RPA and entrance into a committed receivables purchase and service agreement ("RPSA") a new party.

F AIR V ALUE OF F INANCIAL I NSTRUMENTS

92 unchanged sentences

Diluted weighted-average shares outstanding 58,746 57,738 56,554

Equity instruments to purchase 2,501 , 1,852 and 39 shares of common stock were not included in the calculation of diluted net earnings per share for the fiscal years ended June 28, 2024, June 30, 2023 and July 1, 2022, respectively, because the equity instruments were anti-dilutive.

Equity instruments to purchase 2,594 , 2,501 and 1,852 shares of common stock were not included in the calculation of diluted net earnings per share for the fiscal years ended June 27, 2025, June 28, 2024 and June 30, 2023, respectively, because the equity instruments were anti-dilutive.

A CCUMULATED O THER C OMPREHENSIVE ( L OSS) I NCOME

Accumulated other comprehensive (loss) income (“AOCI”) includes changes in fair value of derivative instruments, foreign currency translation adjustments and pension benefit plan adjustments.

The components of AOCI included the change in fair value of derivative instruments, net of tax adjustments and totaled $( 833 ) and $ 5,856 for the fiscal years ended June 28, 2024 and June 30, 2023, respectively.

There was no change in fair value of derivative instruments, net of tax adjustments for the fiscal year ended July 1, 2022.

Also included are $ 380 , $ 300 and $ 1,131 of foreign currency translation adjustments for the fiscal years ended June 28, 2024, June 30, 2023 and July 1, 2022, respectively, and pension benefit plan adjustments totaled $( 1,383 ), $ 142 and $ 4,739 for the fiscal years ended June 28, 2024, June 30, 2023 and July 1, 2022, respectively.

A summary of the change in component of Accumulated other comprehensive (loss) income, net of tax is provided below:

Foreign currency translation adjustments, net of tax Pension benefit plan, net of tax Change in fair of derivative instruments, net of tax Accumulated Other Comprehensive (Loss) Income

Balance at July 2, 2021 $ ( 80 ) $ ( 259 ) $ — $ ( 339 )

Other comprehensive income, net of tax 1,131 4,739 — 5,870

The components of AOCI included the change in fair value of derivative instruments, net of tax adjustments and totaled $( 4,666 ), $( 833 ), and $ 5,856 for the fiscal years ended June 27, 2025, June 28, 2024, and June 30, 2023, respectively.

Also included are $( 20 ), $ 380 and $ 300 of foreign currency translation adjustments for the fiscal years ended June 27, 2025, June 28, 2024 and June 30, 2023, respectively, and pension benefit plan adjustments totaled $( 1,809 ), $( 1,383 ) and $ 142 for the fiscal years ended June 27, 2025, June 28, 2024 and June 30, 2023, respectively.

A summary of the change in component of Accumulated other comprehensive income, net of tax is provided below:

Foreign currency translation adjustments, net of tax Deferred compensation and pension benefit plan, net of tax Change in fair of derivative instruments, net of tax Accumulated Other Comprehensive Income

Balance at July 1, 2022 $ 1,051 $ 4,480 $ — $ 5,531

1 unchanged sentence

Balance at June 30, 2023 1,351 4,622 5,856 11,829

Other comprehensive (loss) income, net of tax 380 ( 1,383 ) ( 833 ) ( 1,836 )

Other comprehensive income (loss), net of tax 380 ( 1,383 ) ( 833 ) ( 1,836 )

Balance at June 28, 2024 1,731 3,239 5,023 9,993

Other comprehensive loss, net of tax ( 20 ) ( 1,809 ) ( 4,666 ) ( 6,495 )

Balance at June 27, 2025 $ 1,711 $ 1,430 $ 357 $ 3,498

F OREIGN C URRENCY

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

1 unchanged sentence

Gains (losses) resulting from non-U.S.

currency transactions are included in Other income (expense), net in the Consolidated Statements of Operations and Comprehensive (Loss) Income and were immaterial for all periods presented.

currency transactions are included in Other expense, net in the Consolidated Statements of Operations and Comprehensive Loss and were immaterial for all periods presented.

R ECENTLY I SSUED A CCOUNTING P RONOUNCEMENTS

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (ASC 280):

Improvements to Reportable Segment Disclosures , an amendment of the FASB Accounting Standards Codification.

The amendments in this ASU address improvements to reportable segment disclosure requirements, specifically requiring disclosure of significant segment expenses.

The amendment also extends certain annual disclosures to interim periods, and clarifies that single reportable segment entities must apply ASC 280 in its entirety, inclusive of this update.

This ASU is effective for fiscal years beginning after December 15, 2023, as well as all interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted, including adoption in an interim period.

The Company is currently evaluating the effect that this standard will have on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No.

5 unchanged sentences

In March 2024, the FASB issued ASU No.

2024-01, Compensation - Stock Compensation (Topic 718) , an amendment of the FASB Accounting Standards Codification.

The amendments in this ASU address improvements to clarify the accounting treatment of profits interest awards.

The amendments provide illustrative examples for entities to evaluate whether profits interest awards should be accounted for are share based compensation (Topic 718) or as cash bonus or profit-sharing arrangement (Topic 710).

The Company does not believe this standard will have an impact on its consolidated financial statements and related disclosures.

In March 2024, the FASB issued ASU No.

2024-02, Codification Improvements - Amendments to Remove References to the Concepts Statements , an amendment of the FASB Accounting Standards Codification.

2 unchanged sentences

The Company does not believe this standard will have an impact on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures , an amendment of the FASB Accounting Standard Codification.

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 their nature.

This ASU is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the effect that this standard will have on its consolidated financial statements and related disclosures.

In May 2025, the FASB issued ASU No.

2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810):

Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, an amendment of the FASB Accounting Standards Codification.

The amendments in this ASU are intended to clarify guidance surrounding who the accounting acquirer is in a business combination, specifically when a Variable Interest Entity ("VIE") is involved.

The ASU is effective for fiscal years beginning after December 15, 2026, and all interim periods within applicable annual periods, with early adoption permitted.

The Company does not believe this standard will have an impact on its consolidated financial statements and related disclosures.

R ECENTLY A DOPTED A CCOUNTING P RONOUNCEMENTS

Effective July 1, 2023, the company adopted ASU No.

2021-08, Business Combinations (ASC 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , an amendment of the FASB Accounting Standards Codification.

The amendments in this ASU address diversity and inconsistency related to the recognition and measurement of contract assets and contract liabilities acquired in a business combination and require that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers .

This adoption did not have an impact to the Company's consolidated financial statements or related disclosures.

Effective March 29, 2025, the company adopted ASU No.

2023-07, Segment Reporting (ASC 280):

Improvements to Reportable Segment Disclosures , an amendment of the FASB Accounting Standards Codification.

The amendments in this ASU address improvements to reportable segment disclosure requirements, specifically requiring disclosure of significant segment expenses.

The amendment also extends certain annual disclosures to interim periods, and clarifies that single reportable segment entities must apply ASC 280 in its entirety, inclusive of this update.

This adoption resulted in the Company disclosing it continues to be one reportable segment where the CEO is the Chief Operating Decision Maker ("CODM"), the selected profitability measure is consolidated net income (loss), and a reference that significant segment expenses are provided on the Consolidated Statement of Operations and Comprehensive Loss.

The Company's segment assets are reported on the Consolidated Balance Sheets as Total Assets and its segment purchase of property plant and equipment are disclosed in the Notes to Consolidated Financial Statements.

Fair Value of Financial Instruments

The following table summarizes the Companies' financial instruments measured at fair value on a recurring basis as of June 28, 2024:

The following table summarizes the Company's financial instruments measured at fair value on a recurring basis as of June 27, 2025:

Fair Value Measurements

1 unchanged sentence

Interest rate swap $ 5,391 $ — $ 5,391 $ —

Total $ 2,436 $ — $ 2,436 $ —

Total measured at fair value $ 5,391 $ — $ 5,391 $ —

The carrying values of cash and cash equivalents, including money market funds, restricted cash, accounts receivable and payable, contract assets and liabilities and accrued liabilities approximate fair value due to the short-term maturities of these assets and liabilities.

7 unchanged sentences

Interest rate swap $ 2,436 $ — $ 2,436 $ —

Total assets measured at fair value $ 3,523 $ — $ 3,523 $ —

The fair value of interest rate hedging agreement entered on September 29, 2022 ("the 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 June 30, 2023, the fair value of the Swap was an asset of $ 3,523 and was included within Other non-current assets in the Company's Consolidated Balance Sheets.

The Company terminated the Swap during the first quarter ended September 29, 2023.

Refer to Note Q for further information regarding the September 2023 Swap and the termination of the Swap.

Total measured at fair value $ 2,436 $ — $ 2,436 $ —

The fair value of interest rate hedging agreement entered on September 29, 2022 ("the September 2022 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 June 28, 2024, the fair value of the September 2022 Swap was a liability of $ 2,436 and included within Other non-current liabilities in the Company's Consolidated Balance Sheets.

The Company terminated the September 2022 Swap during the first quarter ended September 29, 2023.

Refer to Note Q for further information regarding the September 2023 Swap and the termination of the September 2022 Swap.

During fiscal 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.

Fiscal 2025 includes the impact of $ 10,579 of inventory sold in connection to the sale of manufacturing operations to Cicor Group.

Inventory was comprised of the following:

18 unchanged sentences

Property and equipment, net $ 101,440 $ 110,353

The $ 9,201 decrease in Property and equipment, net was primarily due to depreciation expense and was partially offset by current year additions.

The $ 8,913 decrease in Property and equipment, net was primarily due to depreciation expense and was partially offset by current year additions of $ 19,803 .

During fiscal 2025 and 2024, the Company retired $ 991 and $ 1,308 , respectively, of computer equipment and software, furniture and fixtures, leasehold improvements, and machinery and equipment that were no longer in use by the Company.

Depreciation expense related to property and equipment for the fiscal years ended June 28, 2024, June 30, 2023 and July 1, 2022 was $ 40,369 , $ 43,777 and $ 33,150 , respectively.

Depreciation expense related to property and equipment for the fiscal years ended June 27, 2025, June 28, 2024 and June 30, 2023 was $ 39,178 , $ 40,369 and $ 43,777 , respectively.

In accordance with FASB ASC 350, Intangibles-Goodwill and Other (“ASC 350”), the Company determines its reporting units based upon whether discrete financial information is available, if management regularly reviews the operating results of the component, the nature of the products offered to customers and the market characteristics of each reporting unit.

3 unchanged sentences

Accordingly, these were determined to be the Company's reporting units which is consistent with the prior period.

There were no adjustments to the carrying value of Goodwill during fiscal 2024.

There were no adjustments to the carrying value of Goodwill during fiscal 2025 and 2024.

The Company performed its annual goodwill impairment test in the fourth quarter of fiscal 2025.

In making this assessment, management relies on a number of factors including expected future operating results, business plans, economic projections, anticipated future cash flows, business trends, and changes in the Company's market capitalization.

The Company determined the fair values of the reporting units by using a discounted cash flow ("DCF") approach.

Under the DCF approach, the Company estimated the future cash flows, as well as selected a risk-adjusted Weighted Average Cost of Capital ("WACC") of 9.0% and 8.5% for Microelectronics and Missions Systems, respectively, to measure the present value of the anticipated cash flows.

When determining future cash flow estimates, the Company considered historical results adjusted to reflect current and anticipated future operating conditions.

The Company estimated cash flows for the reporting units over a discrete period and a terminal period (considering expected long-term growth rates and trends).

The Company then used the market approach to corroborate the results of the DCF approach.

Under the market approach, the Company used revenue and earnings multiples based on comparable industry multiples to estimate the fair value of the reporting units.

If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, the amount by which the carrying value exceeds the fair value is recognized as an impairment loss.

Based on the quantitative evaluation, the Company determined that the Mission Systems reporting unit had an estimated fair value in excess of their carrying value of 5.0 % and the Microelectronics reporting unit had an estimated fair value that substantially exceeded its carrying value.

Based on the quantitative evaluation, the Company determined that the Mission Systems and Microelectronics reporting units had estimated fair values that substantially exceeded their carrying values.

The Company concluded that its goodwill was not impaired.

In order to evaluate the sensitivity of the estimated fair value for Mission Systems, the Company assessed an increase of 1.0% in the WACC under the DCF approach would have a material impact to the Mission Systems reporting unit's fair value determination.

If there are adverse trends in the Mission Systems reporting unit's expected future operating results, business plans, economic projections, anticipated future cash flows, business trends, and Company's market capitalization, then it could result in the carrying value of the Mission Systems reporting unit exceeding its estimated fair value and impairment charges.

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

During the third quarter ended March 29, 2024, 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.

As a result of the sustained decline in the Company's stock and overall market capitalization during the third quarter ended March 29, 2024, along with other qualitative considerations the Company concluded that there was a triggering event for its Mission Systems reporting unit that would require an interim impairment test.

As of March 29, 2024, the Company completed a quantitative goodwill impairment analysis related to its Mission Systems reporting unit by comparing the fair value of the reporting unit with its carrying amount.

Under the DCF approach, the Company estimated the future cash flows, as well as selected a risk-adjusted WACC of 8.5% to measure the present value of the anticipated cash flows.

The Company then used the market approach to corroborate the results of the DCF approach.

Under the market approach, the Company used revenue and earnings multiples based on comparable industry multiples to estimate the fair value of the reporting unit.

Based on the interim quantitative evaluation, the Company determined that the Mission Systems reporting unit had an estimated fair value in excess of their carrying value of 2.5 %.

The Company concluded that the Mission Systems reporting unit's goodwill was not impaired.

The Company is required to perform the next annual goodwill impairment analysis during the fourth quarter of fiscal year 2026.

11 unchanged sentences

Completed technologies 125,586 ( 73,505 ) 52,081 9.2 years

Other 3,238 ( 1,046 ) 2,192 5.0 years

$ 469,858 $ ( 259,247 ) $ 210,611

3 unchanged sentences

Completed technologies 122,680 ( 62,975 ) 59,705 9.4 years

Backlog 410 ( 325 ) 85 2.0 years

Other 3,238 ( 1,046 ) 2,192 5.0 years

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Total future amortization expense $ 210,611

Estimated salvage value of identified intangible assets 1,392

Net carrying amount $ 250,512

The Company reviews net intangible assets with finite lives for impairment when an event occurs indicating the potential for impairment.

2 unchanged sentences

Any impairment charges that the Company may record in the future could be material to the results of operations and financial condition.

During fiscal 2025, the Company acquired completed technologies of $ 4,866 with a useful life of 7.5 years in connection with the Company's asset acquisition of Star Lab.

Restructuring

During fiscal 2025, the Company incurred $ 7,216 of restructuring charges in connection with workforce reductions that eliminated approximately 145 positions.

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.

The Company's adjustments reflected in restructuring and other charges are typically related to organizational redesign programs or discrete post-acquisition integration activities initiated as part of discrete post acquisition integration activities.

During fiscal 2024, the Company initiated several immediate cost savings measures that simplify the Company’s organizational structure, facilitate clearer accountability, and align to the Company’s priorities, including:

7 unchanged sentences

The workforce reductions that eliminated approximately 350 positions in fiscal 2024 were across manufacturing, SG&A and R&D based on ongoing talent and workforce optimization efforts.

During fiscal 2023, the Company incurred $ 6,981 of restructuring and other charges.

Restructuring and other charges primarily related to $ 3,415 of severance costs, 1MPACT related costs consisting of $ 1,804 for facility optimization efforts, including $ 1,339 related to lease asset impairment, and $ 1,762 of third party consulting costs.

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

1 unchanged sentence

The following table presents the detail of charges included in the Company’s liability for restructuring and other charges:

Severance & Related Facilities & Other Total

Restructuring liability at July 1, 2022 $ 4,722 $ — $ 4,722

Severance & Related

Restructuring liability at June 30, 2023 $ 1,529

Restructuring charges 26,170

Cash paid ( 18,941 )

Reversals (*) ( 21 ) ( 21 )

Restructuring liability at June 28, 2024 8,758

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Other supplemental operating lease information is summarized as follows:

For the Fiscal Year Ended For the Fiscal Year Ended

For the Fiscal Year Ended

June 27, 2025 June 28, 2024

Cash paid for amounts included in the measurement of operating lease liabilities $ 11,401 $ 10,343

$ 10,343 $ 10,756

Right-of-use assets obtained in exchange for new lease liabilities

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2025 2024 2023

Tax (benefit) provision at federal statutory rates ( 21.0 ) % ( 21.0 ) % 21.0 %

Tax benefit at federal statutory rates ( 21.0 ) % ( 21.0 ) % ( 21.0 ) %

State income tax, net of federal tax benefit ( 6.5 ) ( 5.9 ) ( 5.4 )

4 unchanged sentences

Non-deductible compensation 4.6 0.9 1.0

Acquisition costs — — 1.2

Reserves for unrecognized income tax benefits ( 3.0 ) 0.2 ( 6.9 )

1 unchanged sentence

Foreign derived intangible income ( 0.3 ) — ( 1.4 )

Global intangible low-taxed income 1.3 — —

Other 1.4 — 1.3

( 24.8 ) % ( 27.3 ) % ( 41.6 ) %

The effective tax rate for fiscal 2025 differed from the federal statutory rate primarily due to federal and state research and development tax credits, releases to reserves for unrecognized income tax benefits and state taxes, partially offset by tax provisions related to stock compensation.

The effective tax rate for fiscal 2024 differed from the federal statutory rate primarily due to federal and state research and development tax credits and state taxes, partially offset by tax provisions related to stock compensation.

The effective tax rate for fiscal 2023 differed from the federal statutory rate primarily due to federal and state research and development tax credits, releases to reserves for unrecognized income tax benefits and state taxes, partially offset by valuation allowances recorded and tax provisions related to stock compensation.

The effective tax rate for fiscal 2022 differed from the Federal statutory rate primarily due to additional tax provisions for non-deductible compensation, provision to return adjustments, state taxes and excess tax provisions related to stock compensation, partially offset by research and development tax credits.

The components of the Company’s net deferred tax assets (liabilities) were as follows:

10 unchanged sentences

Operating lease liabilities 17,493 20,107

Deferred revenue 2,951 1,135

Other 316 204

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At June 27, 2025, the Company has gross interest expense carryforwards of $ 42,877 , which have an indefinite life, gross state net operating loss carryforwards of $ 47,591 , which will expire starting in fiscal year 2040 and gross foreign net operating loss carryforwards of $ 21,226 which will expire starting in fiscal year 2028.

The Company maintains a valuation allowance on the majority of the foreign net operating loss carryforward.

Based on forecasted taxable income and the scheduled reversal of the remaining deferred tax assets, the Company believes it is more likely than not that all other deferred tax assets will be realized.

The Company maintains a valuation allowance on all foreign net operating loss carryforwards.

The Company is subject to taxation in the U.S.

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Increases for tax positions taken during the current period 518 3,083

Decreases for tax positions taken by an acquired company — ( 2,679 )

Decreases for tax positions taken related to a prior period ( 3,094 ) ( 2,971 )

Decreases for settlements of previously recognized positions — ( 93 )

Decreases as a result of a lapse of the applicable statute of limitations ( 1,091 ) ( 935 )

1 unchanged sentence

The Company has $ 4,046 of unrecognized tax benefits as of June 27, 2025.

If released, $ 5,543 of these unrecognized income tax benefits would reduce the Company's income tax provision.

If released, all $ 4,046 of these unrecognized income tax benefits would reduce the Company's income tax provision.

The Company includes interest and penalties related to unrecognized tax benefits within the provision for income taxes.

The total amount of interest and penalties accrued was $ 1,374 and $ 583 as of June 28, 2024 and June 30, 2023, respectively, and the amount of interest and penalties accrued and recognized was $ 791 and $ 96 during June 28, 2024 and June 30, 2023, respectively.

The total amount of interest and penalties accrued was $ 878 and $ 1,374 as of June 27, 2025 and June 28, 2024, respectively, and the amount of interest and penalties (released) accrued and recognized was $( 496 ) and $ 791 during June 27, 2025 and June 28, 2024, respectively.

The Company’s major tax jurisdiction is the U.S.

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It is too early to determine what responsibility, if any, the Company may have for these environmental matters.

While the Company has not received any communications on these environmental matters in over a year, the Company assesses them each quarter and plans to only continue reporting updates in the Company's quarterly reports only when there is an update on the claims.

On June 19, 2023, the Board of Directors received notice of the Company's former CEO’s resignation from his positions of President and Chief Executive Officer.

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The Company disputes these claims and maintains that he resigned without good reason.

On September 19, 2023, the former CEO filed for binding arbitration under the employment rules of the American Arbitration Association

An arbitrator was appointed on November 29, 2023, and the arbitration trial has been scheduled for mid-December 2024.

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.

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.

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 through April 9, 2025.

Following the arbitration hearing, the parties filed post-hearing briefs on May 16, response briefs on June 13 and conducted oral arguments on June 30, 2025.

Unless the arbitrator requests additional time, and the parties' consent to such request, the arbitrator is expected to deliver a ruling on the claims no than August 14, 2025.

The Company continue 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.

If instead the arbitrator rules for the former CEO, the Company could be liable for up to approximately $ 14,100 , based on the closing price of the Company's common stock on June 26, 2023, for accelerated equity vesting, severance, and other benefits under the CIC Agreement, plus interest, legal fees and expenses and compensation during dispute, which could include Mr.

Aslett's base salary and other amounts based on the compensation, benefit and insurance plans in which he participated.

The Company categorically denies any wrongdoing or liability under the CIC Agreement, but the outcome of potential arbitration is inherently uncertain.

The Company categorically denies any wrongdoing or liability under the CIC Agreement, but the outcome of potential

arbitration is inherently uncertain.

Accordingly, it is reasonably possible that the Company will incur a liability in this matter, and the Company estimates the potential range of exposure from $ 0 to $ 14,100 , plus costs and attorneys’ fees and compensation to the former CEO during the dispute.

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On July 24, 2024, the Court dismissed the case without prejudice and permitted the plaintiffs 30 days to file an amended complaint.

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

Aslett, the former Chief Executive Officer, Mr.

Ruppert, the former Chief Financial Officer, Mr.

Ballhaus, the current Chief Executive Officer, and Mr.

Farnsworth, the current Chief Financial officer, are indemnified by the Company for this matter.

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

The plaintiffs filed for leave to amend their complaint on August 23, 2024, the Company filed its opposition motion on September 6th, the plaintiffs filed their response brief on September 17, 2024, and the Company filed its reply on September 30, 2024.

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 in the discovery process.

Subject to the terms of our by-laws and applicable Massachusetts law, Mr.

Aslett and Mr.

Ballhaus are indemnified by the Company for the federal securities class action.

On October 11, 2024, the Company received a shareholder derivative demand on behalf of Robert Sawyer alleging substantially the same claims as those covered in the federal securities class action.

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

On February 28, 2025, the Company received a derivative demand on behalf of James Jones alleging substantially the same claims as those covered in the federal securities class action and the Robert Sawyer derivative demand.

On May 20, 2025, the Board of Directors formed a Special Investigation Committee of independent directors to investigate the subject matters of the demand letters.

On June 6, 2025, James Jones, on behalf of nominal defendant Mercury Systems, Inc., filed a derivative complaint in Massachusetts Superior Court in Essex County against Mark Aslett, Michael Ruppert, William Ballhaus, David Farnsworth, Orlando Carvalho, Lisa Disbrow, Barry Nearhos, Howard Lance, Debora Plunkett, Gerard DeMuro, Scott Ostfeld, Roger Krone, William O’Brien, Vincent Vitto, James Bass, Michael Daniels, and Mary Louise Krakauer, all current or former Mercury officers or directors.

This derivative action has been stayed while the Special Investigation Committee conducts its investigation.

On July 17, 2025, the Company received a derivative demand on behalf of Pauline McKinnon alleging substantially the same claims as those covered in the federal securities class action and the James Jones and Robert Sawyer derivative demands.

The Company believes the claims in the federal securities class action, derivative demands, and derivative action are without merit and intend to defend itself vigorously.

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

On January 31, 2024, a former employee at the Company's Torrance, California location, filed a wage and hour class action lawsuit in California state court in Los Angeles County, along with a companion Private Attorneys General Act (“PAGA”) lawsuit, to act in a representative capacity for other Mercury Mission Systems, LLC employees in California, alleging a range of violations of California wage and hour regulations.

The Company believes the claims in the complaints 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.

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 in principle is subject to a final settlement agreement and review and approval by the court.

I NDEMNIFICATION O BLIGATIONS

4 unchanged sentences

As of June 27, 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 $ 122,195 .

The purchase commitments covered by these agreements aggregate to $ 206,386 .

The Company may elect from time to time to purchase and subsequently retire shares of common stock in order to settle an individual employees’ tax liability associated with vesting of a restricted stock award or exercise of stock options.

2 unchanged sentences

On February 28, 2022, the Company amended the Revolver to increase and extend the borrowing capacity to a $ 1,100,000 , 5-year revolving credit line, with the maturity extended to February 28, 2027.

As of June 28, 2024, the Company's outstanding balance of unamortized deferred financing costs was $ 4,051 , which is being amortized to Other (expense) income, net in the Consolidated Statements of Operations and Comprehensive (Loss) Income over the term of the Revolver and includes the costs incurred in conjunction with the November 2023 amendment to the Revolver.

As of June 27, 2025, the Company's outstanding balance of unamortized deferred financing costs was $ 3,523 , which is being amortized to Other expense, net in the Consolidated Statements of Operations and Comprehensive Loss over the term of the Revolver and includes the costs incurred in conjunction with the November 2023 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.

3 unchanged sentences

Refer to exhibit 10.7.5 included herein.

See Note R "Subsequent Events" to the consolidated financial statements for discussion of the Company's Amendment No.

On August 13, 2024, the Company executed Amendment No.

6 to the Revolver, decreasing the permanent borrowing capacity to $ 900,000 , with a temporary reduction in credit availability to $ 750,000 until the Company meets a minimum consolidated EBITDA level, as defined in the Amendment No.

6 to the Revolver.

In conjunction with Amendment No.

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.

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.

The Revolver has a 5-year maturity and will mature on February 28, 2027.

8 unchanged sentences

The Revolver also provides for customary representations and warranties, affirmative covenants and events of default (including, among others, the failure to make required payments of principal and interest, certain insolvency events and an event of default upon a change of control).

If an event of default occurs, the lenders under the Revolver will be entitled to take various actions, including the termination of unutilized commitments, the acceleration of amounts outstanding under the Revolver and all actions permitted to be taken by a secured creditor.

If an event of default occurs, the lenders under the Revolver will be entitled to take

various actions, including the termination of unutilized commitments, the acceleration of amounts outstanding under the Revolver and all actions permitted to be taken by a secured creditor.

Guarantees and Security

1 unchanged sentence

The obligations of both the Company and the Guarantors are secured by a perfected security interest in substantially all of the assets of the Company and the Guarantors, in each case, now owned or later acquired, including a pledge of all of the capital stock of substantially all of the Company’s domestic wholly-owned restricted subsidiaries and 65 % of the capital stock of certain of its foreign restricted subsidiaries, subject in each case to the exclusion of certain assets and additional exceptions.

As of June 28, 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 as compared to $ 511,500 for the fiscal year ended June 30, 2023, resulting in interest expense of $ 35,015 and $ 25,159 for fiscal years ended June 28, 2024 and June 30, 2023, respectively.

As of June 27, 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 for the fiscal years ended June 27, 2025 and June 28, 2024, respectively.

The Company incurred interest expense of $ 33,430 and $ 35,015 for fiscal years ended June 27, 2025 and June 28, 2024, respectively.

The current borrowing capacity as defined under the Revolver as of June 27, 2025 is approximately $ 900,000 , of which we had outstanding borrowings against of $ 591,500 .

11 unchanged sentences

The Plan's funded status at June 27, 2025 and June 28, 2024 was a net liability of $ 5,282 and $ 5,005 , respectively, which is recorded in other non-current liabilities on the Consolidated Balance Sheets.

The Company recognized net periodic benefit costs of $ 471 and $ 440 associated with the Plan and a net (loss) gain of $( 1,383 ) and $ 142 in AOCI during the fiscal years ended June 28, 2024 and June 30, 2023, respectively.

The Company recognized net periodic benefit (gain) costs of $( 1,233 ) and $ 471 associated with the Plan and a net loss of $ 1,809 and 1,383 in AOCI during the fiscal years ended June 27, 2025 and June 28, 2024, respectively.

Total employer contributions to the Plan were $ 978 during the year ended June 27, 2025, and the Company's total expected employer contributions to the Plan during fiscal 2026 are $ 704 .

11 unchanged sentences

Amortization net of loss — ( 18 )

Settlement loss recognized ( 354 ) ( 509 )

Net periodic benefit cost $ 471 $ 440

Settlement gain recognized ( 181 ) ( 354 )

Curtailment gain recognized ( 2,062 ) —

Net periodic benefit (gain) cost $ ( 1,233 ) $ 471

During fiscal year 2025, due to the sale of manufacturing operations to Cicor Group, there was a $ 2,062 plan curtailment.

The following table reflects the related actuarial assumptions used to determine net periodic benefit cost of the Plan for the fiscal years ended June 27, 2025 and June 28, 2024:

14 unchanged sentences

Employee contributions 1,106 1,235

Actuarial (loss) gain 629 ( 516 )

Actuarial gain 2,046 629

Benefits paid 557 ( 881 )

1 unchanged sentence

Plan amendment ( 22 ) 20

Foreign exchange (gain) loss ( 42 ) 1,763

Curtailment ( 1,750 ) —

Foreign exchange loss (gain) 2,722 ( 42 )

Projected benefit obligation at end of year $ 17,722 $ 21,878

8 unchanged sentences

Settlements ( 10,299 ) ( 5,239 )

Foreign exchange (loss) gain ( 35 ) 1,429

Foreign exchange gain (loss) 2,100 ( 35 )

Fair value of Plan assets at end of year $ 12,440 $ 16,873

13 unchanged sentences

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

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

The Company had $ 3,068 and $ 2,901 of capitalized stock-based 401(k) matching compensation expense on the Consolidated Balance Sheet as of June 27, 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.

Expense recognized by the Company for matching contributions related to the 401(k) plan was $ 15,853 , $ 15,665 , and $ 7,603 during the fiscal years ended June 28, 2024, June 30, 2023, and July 1, 2022, respectively.

Expense recognized by the Company for matching contributions related to the 401(k) plan was $ 14,900 , $ 15,853 , and $ 15,665 during the fiscal years ended June 27, 2025, June 28, 2024, and June 30, 2023, respectively.

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 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.

3 unchanged sentences

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 fiscal year ended June 28, 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 June 30, 2023.

During the fiscal year ended June 27, 2025, 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.

Shareholders’ Equity

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The 2018 Plan replaced the 2005 Plan.

The shares authorized for issuance under the 2018 Plan will continue to be increased by any future cancellations, forfeitures or terminations of awards under the 2005 Plan.

The foregoing does not affect any outstanding awards under the 2005 Plan, which remain in full force and effect in accordance with their terms.

The 2018 Plan provides for the grant of non-qualified and incentive stock options, restricted stock, stock appreciation rights and deferred stock awards to employees and non-employees.

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E MPLOYEE S TOCK P URCHASE P LAN

The number of shares authorized for issuance under the Company’s 1997 Employee Stock Purchase Plan, as amended and restated (the “ 1997 ESPP”), is 2,300 shares, including 500 shares approved by the Company's shareholders on October 28, 2020.

Under the 1997 ESPP, rights are granted to purchase shares of common stock at 85 % of the lesser of the market value of such shares at either the beginning or the end of each six-month offering period.

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

The Company's 1997 Employee Stock Purchase Plan, as amended and restated (the “ 1997 ESPP”) was terminated in accordance with its terms effective May 14, 2024.

Under the 1997 ESPP, rights were granted to purchase shares of common stock at 85 % of the lesser of the market value of such shares at either the beginning or the end of each six-month offering period.

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.

The number of shares issued under the 1997 ESPP during fiscal years 2025, 2024 and 2023 was 0 , 167 and 145 , respectively.

The 1997 ESPP terminated in accordance with its terms effective May 14, 2024.

There were an immaterial amount of shares related to the 1997 Plan issued and returned to the reserve during fiscal 2025.

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

Subject to shareholder approval at the Company’s 2024 annual meeting of shareholders, the number of shares authorized for issuance under the 2024 ESPP is 1,000 shares.

The Company's shareholders approved the plan at the Company’s 2024 annual meeting of shareholders, the number of shares authorized for issuance under the 2024 ESPP is 1,000 shares.

Under the 2024 ESPP, rights are granted to purchase shares of common stock at 85 % of the lesser of the market value of such shares at either the beginning or the end of each six-month offering period.

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.

As of June 28, 2024, no shares have been issued under the 2024 ESPP.

As of June 27, 2025, 130 shares have been issued under the 2024 ESPP.

Shares available for future purchase under the 2024 ESPP totaled 870 as of June 27, 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 New Hire Option is granted in four (4) tranches as follows:

(w) 233,500 shares of the Company’s common stock with an exercise price equal to $ 42.00 (“Tranche 1”);

(x) 233,500 shares of the Company’s common stock with an exercise price equal to $ 43.00 (“Tranche 2”);

(y) 233,500 shares of the Company’s common stock with an exercise price equal to $ 46.00 (“Tranche 3”);

and (z) 233,500 shares of the Company’s common stock with an exercise price equal to $ 49.00 (“Tranche 4”).

Tranche 1 and Tranche 2 shall become vested and exercisable on the third anniversary of August 17, 2023 ("the Initial Grant Date") (subject to the Executive’s continued employment through such date) and shall expire on the fourth anniversary of the Initial Grant Date.

Tranche 3 and Tranche 4 shall become vested and exercisable on the fourth anniversary of the Initial Grant Date (subject to the Executive’s continued employment through such date) and shall expire on the fifth anniversary of the Initial Grant Date.

The following table summarizes activity of the Company's stock option plans since July 1, 2022:

The following table summarizes activity with respect to Company-issued stock options since June 30, 2023:

Options Outstanding

4 unchanged sentences

Intrinsic Value as of 6/28/2024

Outstanding at June 30, 2023 — — $ — — —

Granted 934 $ 12.71 $ 45.00

2 unchanged sentences

Outstanding at June 28, 2024 934 $ 12.71 $ 45.00 3.69 years $ —

Granted — $ —

Exercised — $ —

Cancelled — $ —

Outstanding at June 27, 2025 934 $ 12.71 $ 45.00 2.75 years $ —

Exercisable at June 27, 2025 — $ — $ — — $ —

18 unchanged sentences

The Company applied an estimated annual forfeiture rate based on historical averages in determining the expense recorded in each period.

There were 934 stock options granted during fiscal year ended June 28, 2024.

The following table summarizes the status of the Company’s non-vested restricted stock awards and deferred stock awards since July 1, 2022:

The following table summarizes the status of the Company’s non-vested restricted stock awards and deferred stock awards since June 30, 2023:

Non-Vested Restricted Stock Awards

Shares Weighted Average

Outstanding at July 1, 2022 2,305 $ 57.47

Outstanding at June 30, 2023 1,339 $ 54.45

Granted 1,334 36.38

13 unchanged sentences

Fiscal Years Ended

June 28, 2024 June 30, 2023 July 1, 2022

June 27, 2025 June 28, 2024 June 30, 2023

Cost of revenues $ 1,205 $ 2,919 $ 2,926

3 unchanged sentences

Income taxes (1)

( 6,755 ) ( 6,931 ) ( 7,216 )

Stock-based compensation expense, net of income taxes $ 18,264 $ 18,738 $ 20,537

(1) Federal and state statutory rate of 27%

Operating Segment, Geographic Information and Significant Customers

Operating segments are defined as components of an enterprise evaluated regularly by the Company's chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance.

Operating segments are defined as components of an enterprise evaluated regularly by the Company's chief executive officer who acts as its CODM in deciding how to allocate resources and assess performance.

The Company evaluated its internal organization under FASB ASC 280, Segment Reporting ("ASC 280") to determine whether there has been a change to its conclusion of a single operating and reportable segment.

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The Company utilized the management approach for determining its operating segment in accordance with ASC 280.

The Company adopted Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures , as of March 29, 2025.

See the section Recently Adopted Accounting Pronouncements in Note B for more information.

The CODM utilizes Net loss that is reported on the Consolidated Statement of Operations and Comprehensive Loss to assess operating performance and make decisions related to resource allocation.

The Company's significant segment expenses include stock-based compensation and deprecation which are disclosed in Note O and Note E, respectively.

Any other significant segment expenses which are regularly provided to the CODM are provided on the Consolidated Statement of Operations and Comprehensive Loss.

The Company's segment assets are reported on the Consolidated Balance Sheets as Total Assets and its segment purchase of property plant and equipment are disclosed in Note E.

The geographic distribution of the Company’s revenues as determined by order origination based on the country in which the Company's legal subsidiary is domiciled is summarized as follows:

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Identifiable long-lived assets (1) $ 107,655 $ 2,698 $ — $ — $ 110,353

YEAR ENDED JULY 1, 2022

YEAR ENDED JUNE 30, 2023

Net revenues to unaffiliated customers $ 927,003 $ 46,857 $ 22 $ — $ 973,882

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In recent years, the Company completed a series of acquisitions that changed its technological capabilities, applications and end markets.

As these acquisitions and changes occurred, the Company's proportion of revenue derived from the sale of components in different technological areas, and modules, sub-assemblies and integrated subsystems which combine technologies into more complex diverse products has shifted.

As these acquisitions and changes occurred, the Company's proportion of revenue derived from the sale of components in different technological areas, and modules, sub-assemblies and integrated solutions which combine technologies into more complex diverse products has shifted.

The following tables present revenue consistent with the Company's strategy of expanding its technological capabilities and program content.

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Fiscal Years Ended

June 28, 2024 June 30, 2023 July 1, 2022

June 27, 2025 June 28, 2024 June 30, 2023

Domestic (1) $ 746,306 $ 704,115 $ 865,216

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Fiscal Years Ended

June 28, 2024 June 30, 2023 July 1, 2022

June 27, 2025 June 28, 2024 June 30, 2023

Radar (1) $ 169,738 $ 102,084 $ 229,467

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Fiscal Years Ended

June 28, 2024 June 30, 2023 July 1, 2022

June 27, 2025 June 28, 2024 June 30, 2023

Components (1) $ 189,983 $ 192,473 $ 197,180

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Fiscal Years Ended

June 28, 2024 June 30, 2023 July 2, 2021

June 27, 2025 June 28, 2024 June 30, 2023

Airborne (1) $ 410,677 $ 431,277 $ 506,264

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Naval (3) 86,888 78,967 136,954

55,972 60,546 42,643

Other (5) 192,233 148,704 130,516

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(3) Naval platform includes products that relate to personnel, equipment or pieces of equipment designed for naval operations.

(4) All platforms other than Airborne, Land or Naval.

(4) Space platform includes products that relate to personnel, equipment or pieces of equipment designed for space operations.

(5) All platforms other than Airborne, Land, Naval or Space.

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

Fiscal Years Ended

June 28, 2024 June 30, 2023 July 1, 2022

L3Harris 12 % * *

Lockheed Martin Corporation 11 % 13 % 10 %

June 27, 2025 June 28, 2024 June 30, 2023

RTX Corporation 13 % 10 % 14 %

Northrop Grumman * 11 % *

Lockheed Martin Corporation 10 % 11 % 13 %

Navy 10 % * *

L3Harris * 12 % *

Northrop Grumman * * 11 %

33 % 33 % 38 %

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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 years ended June 28, 2024, June 30, 2023 and July 1, 2022.

There were no programs comprising 10% or more of the Company's revenues for the years ended June 27, 2025, June 28, 2024 and June 30, 2023.

The Company utilizes interest rate derivatives to mitigate interest rate exposure with respect to its financing arrangements.

On September 7, 2022, the Company entered into an interest rate Swap (the “Initial Swap”) with JP Morgan Chase Bank, N.A.

(“JPMorgan”) for a notional amount of 300,000 in order to fix the interest rate associated with a portion of the total $ 511,500 existing borrowings on the Revolver.

(“JPMorgan”) for a notional amount of $ 300,000 in order to fix the interest rate associated with a portion of the total $ 511,500 existing borrowings on the Revolver at a rate of 3.25 %.

The Initial Swap agreement was designated and qualified for hedge accounting treatment as a cash flow hedge.

The initial Swap matured on February 28, 2027, coterminous with the maturity of the Revolver.

The initial Swap established a fixed interest rate on the first 300,000 of the Company's outstanding borrowings against the Revolver obligation at 3.25 %.

The Initial Swap was scheduled to mature on February 28, 2027, coterminous with the maturity of the Revolver.

On September 29, 2022, the Company terminated the Initial Swap.

At the time of termination, the fair value of the Swap was an asset of $ 5,995 .

At the time of termination, the fair value of the Initial Swap was an asset of $ 5,995 .

The Company received the cash settlement of $ 5,995 and these proceeds are classified within Operating Activities of the Consolidated Statements of Cash Flows for the year ended June 30, 2023.

Following the termination of the initial Swap, the Company entered into the Swap agreement with JPMorgan on September 29, 2022.

The Swap fixes $ 300,000 of total $ 511,500 existing borrowings on the Revolver at the time of the Swap.

Following the termination of the Initial Swap, the Company entered into the September 2022 Swap agreement with JPMorgan on September 29, 2022.

The September 2022 Swap fixed $ 300,000 of total $ 511,500 existing borrowings on the Revolver at the time of the Swap at a rate of 3.79 %.

The Swap agreement was designated and qualified for hedge accounting treatment as a cash flow hedge.

The Swap was scheduled to mature on February 28, 2027, coterminous with the maturity of the Revolver.

The Swap established a fixed interest rate on the first $ 300,000 of 3.79 %.

On September 28, 2023, the Company terminated the Swap.

On September 28, 2023, the Company terminated the September 2022 Swap.

At the time of termination, the fair value of the Swap was an asset of $ 7,403 .

The Company received the cash settlement of $ 7,403 and these proceeds are classified within Operating Activities of the Consolidated Statements of Cash Flows for the year ended June 30, 2024.

Following the termination of the Swap, the Company entered into the September 2023 Swap agreement on September 28, 2023 with JPMorgan for a notional amount of $ 300,000 in order to fix the interest rate associated with a portion of the total $ 576,500 existing borrowings on Company's Revolver at the time of the Swap at 4.66 %.

Following the termination of the September 2022 Swap, the Company entered into the September 2023 Swap agreement on September 28, 2023 with JPMorgan for a notional amount of $ 300,000 in order to fix the interest rate associated with a portion of the total $ 576,500 existing borrowings on Company's Revolver at the time of the Swap at 4.66 %.

The September 2023 Swap agreement was designated and qualified for hedge accounting treatment as a cash flow hedge.

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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.

On August 13, 2024, the Company entered into a $ 60,000 committed receivables purchase and servicing agreement (“RPSA”) with a new party.

The RPSA has an initial term of two years.

Pursuant to the RPSA, the new party has committed to purchase receivables at a discount rate from a list of the Company’s customers, maintaining a balance of purchased receivables at or below $ 60,000 .

On August 13, 2024, the Company executed Amendment No.

6 to the Revolver, decreasing the permanent borrowing capacity to $ 900,000 , with a temporary reduction in credit availability to $750,000 until the Company meets a minimum consolidated EBITDA level, as defined in the Amendment No.

6 to the Revolver, of $75,000 excluding (a) adjustments for cost savings, operating expense reductions and synergies, (b) EAC charges and other non-cash expenses, charges, and losses addbacks and (c) deducts to reverse EAC charges previously added back, in each case for a last twelve-month period.

Refer to exhibit 10.7.6 included herein.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data