What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-05-05 compared with 2020-11-05 · 85 added, 121 removed, 82 unchanged (72% of the section changed)

8 unchanged sentences

This one-stop design, engineering and manufacturing solution allows us to align technology development with the diverse needs of our customers and to enable them to reduce the time required to develop new products and bring them to market.

We serve a diversified customer base consisting of approximately 1,200 customers in various markets throughout the world, including aerospace and defense, computing, automotive components, medical, industrial and instrumentation related products, as well as networking/communications infrastructure products.

We serve a diversified customer base consisting of approximately 1,100 customers in various markets throughout the world, including aerospace and defense, data center computing, automotive components, medical, industrial and instrumentation related products, as well as networking/communications infrastructure products.

Our customers include both original equipment manufacturers (OEMs) and electronic manufacturing services (EMS) providers.

RECENT DEVELOPMENTS

The recent coronavirus (COVID-19) pandemic first caused some business disruption in our operations in China beginning in January 2020.

The coronavirus (COVID-19) pandemic first caused business disruption in our operations in China in January 2020.

By March 2020, the situation escalated as the scope of the COVID-19 pandemic worsened outside of the Asia-Pacific region, with Europe and North America being affected by the pandemic.

There is significant uncertainty relating to the potential impacts of the COVID-19 pandemic, and we cannot reasonably estimate its duration or severity.

The COVID-19 pandemic creates various global macroeconomic, customer demand, operational and supply chain risks any one of which could have a material and adverse impact on our business going forward.

Also, we experienced an increase in COVID-19 cases in our facilities in North America during the fourth quarter of 2020.

As a result, we expect continued impacts on our production, as well as ongoing significant uncertainty relating to the actual and potential impacts of the COVID-19 pandemic, and we cannot reasonably estimate its duration or severity.

The COVID-19 pandemic has created and continues to create various global macroeconomic, customer demand, operational and supply chain risks any one of which could have a material and adverse impact on our business going forward.

See Item 1A, Risk Factors , of Part II below for further information related to the COVID-19 pandemic.

We have taken measures to protect our employees, suppliers and customers by implementing our pandemic recovery protocols, establishing situational leadership teams in Asia-Pacific and North America along with regularly scheduled executive review and planning calls, implementing global travel restrictions, and conforming to the guidance and direction of local governments and global health organizations.

We have taken active measures to protect our employees, suppliers and customers by implementing our pandemic recovery protocols, establishing situational leadership teams in Asia-Pacific and North America along with regularly scheduled executive review and planning calls, implementing global travel restrictions, and conforming to the guidance and direction of local governments and global health organizations.

We are monitoring the impacts the COVID-19 pandemic has had, and continues to have, on our supply chain and are collaborating with our third-party partners with the goal of mitigating, to the extent reasonably practicable, significant delays in delivery of our products.

There have been increasing prices and lead times of copper clad laminates (CCLs), a key raw material for the manufacture of PCBs.

CCLs are made from epoxy resin, glass cloth and copper foil, all of which are seeing limited supply and resulting in increased prices.

We are actively managing higher raw materials costs by seeking to pass on the increase in costs to our customers, implementing ongoing operational efficiencies, and through supplier diversification.

FINANCIAL OVERVIEW

On April 17, 2020, we completed the sale of our Mobility business unit for a final purchase price of $569.2 million, received proceeds from the sale, net of cash disposed of $507.5 million, and recorded a gain on sale before income taxes of $237.3 million.

Results related to our Mobility business unit are reported as discontinued operations for all periods presented.

2 unchanged sentences

While our customers include both OEMs and EMS providers, we measure customers based on OEM companies, as they are the ultimate end customers.

Sales to our ten largest customers accounted for 40% and 38% of our net sales for the quarter and three quarters ended September 28, 2020, respectively.

Sales to our ten largest customers accounted for 39% and 41% of our net sales for the quarter and three quarters ended September 30, 2019, respectively.

Sales to our ten largest customers collectively accounted for 45% and 42% of our net sales for the quarters ended March 29, 2021 and March 30, 2020, respectively.

We sell to OEMs both directly and indirectly through EMS providers.

1 unchanged sentence

Quarter Ended

Three Quarters Ended

End Markets (1)

September 28, 2020

September 30, 2019

September 28, 2020

September 30, 2019

March 29, 2021

March 30, 2020

Aerospace and Defense

Cellular Phone

Computing/Storage/Peripherals

Data Center Computing (2)

Medical/Industrial/Instrumentation

1 unchanged sentence

Sales to EMS companies are classified by the end markets of their OEM customers.

Other consumer devices that include wearables, portable video devices and personal headphones are included in the Other end market.

In the current period, the Computing/Storage/Peripherals end market was renamed to Data Center Computing to better reflect the customer mix and growth prospects.

There was no change to the customers included in this end market.

Other end market reflects direct sales to EMS and distributor customers.

We derive revenues primarily from the sale of PCBs, custom electronic assemblies using customer-supplied engineering and design plans as well as our long-term contracts related to the design and manufacture of RF and microwave components, assemblies and subsystems.

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As a result, we recognize revenue progressively over time based on the extent of progress towards completion of the performance obligation.

We recognize revenue based on the cost-to-cost method as it best depicts the transfer of control to the customer which takes place as we incur costs.

Under the cost-to-cost measure of progress, the extent of progress toward completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation.

We recognize revenue based on a cost method as it best depicts the transfer of control to the customer which takes place as we incur costs.

Revenues are recorded proportionally as costs are incurred.

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Selling and marketing expenses consist primarily of salaries, labor related benefits, and commissions paid to our internal sales force, independent sales representatives, and our sales support staff, as well as costs associated with marketing materials and trade shows.

General and administrative costs primarily include the salaries for executive, finance, accounting, information technology, facilities, and human resources personnel, as well as expenses for restructuring, accounting, legal assistance and incentive compensation expense, and gains or losses on the sale or disposal of property, plant and equipment.

General and administrative costs primarily include the salaries for executive, finance, accounting, information technology, facilities, and human resources personnel, as well as expenses for accounting and legal assistance, incentive compensation expense, and gains or losses on the sale or disposal of property, plant and equipment.

Research and development expenses consist primarily of salaries and labor related benefits paid to our research and development staff, as well as material costs.

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See Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , in our Annual Report on Form 10-K for the fiscal year ended December 28, 2020 for further discussion of critical accounting policies and estimates.

There were no material changes to our critical accounting policies and estimates since December 30, 2019, except for the estimates used in

the quantitative goodwill impairment analysis performed as of September 28, 2020 .

See Part I, Item 1, Note 6, Goodwill , of the Notes to Consolidated Condensed Financial Statements included in this Quarterly Report on Form 10-Q for further information .

There were no material changes to our critical accounting policies and estimates since December 28, 2020.

RESULTS OF OPERATIONS

1 unchanged sentence

Quarter Ended

Three Quarters Ended

September 28, 2020

September 30, 2019

September 28, 2020

September 30, 2019

March 29, 2021

March 30, 2020

Cost of goods sold

4 unchanged sentences

Amortization of definite-lived intangibles

Impairment of goodwill

Total operating expenses

Operating (loss) income

Operating income

Other (expense) income:

Interest expense

Loss on extinguishment of debt

Total other expense, net

(Loss) income from continuing operations before income taxes

Loss from continuing operations before income taxes

Income tax benefit (provision)

Net (loss) income from continuing operations

During the quarter ended September 28, 2020, our RF&S Components operating segment met the quantitative threshold for separate presentation of a reportable segment.

In prior periods, we had two reportable segments:

PCB and E-M Solutions.

The RF&S Components reportable segment was previously aggregated with the PCB reportable segment.

The PCB reportable segment is comprised of multiple operating segments.

Factors considered in determining whether operating segments can be aggregated into reportable segments included similarity regarding economic characteristics, products, production process, type or class of customers, distribution methods and regulatory environments.

Total net sales decreased $20.6 million, or 3.9%, to $513.6 million for the third quarter of 2020 from $534.2 million for the third quarter of 2019.

This decrease primarily resulted from a decrease in net sales for the E-M Solutions reportable segment of $29.5 million, or 43.6%, to $38.2 million for the third quarter of 2020 from $67.7 million for the third quarter of 2019 primarily due to winding down of this reportable segment and lower demand in our Automotive end market.

Also contributing to this decrease in total net sales was a decrease in net sales for the RF&S Components reportable segment of $1.9 million, or 13.9%, to $11.7 million for the third quarter of 2020 from $13.6 million for the third quarter of 2019 primarily due to lower demand in our Networking/Communications end market.

The decrease in total net sales was partially offset by an increase in net sales for the PCB reportable segment of $10.8 million, or 2.4%, to $463.7 million for the third quarter of 2020 from $452.8 million for the third quarter of 2019.

The increase was primarily due to increased demand in our Aerospace and Defense, Medical/Industrial/Instrumentation, and Computing/Storage/Peripherals end markets, partially offset by lower demand in our Automotive end market.

In addition, these changes in the PCB reportable segment resulted in an increase in the average price per square foot of 13.3%, driven mainly by product mix shift.

The resulting increase in net sales, however, was partially offset by a 4.4% decrease in the volume of PCB shipments as compared to the third quarter of 2019.

Total net sales decreased $16.0 million, or 1.0%, to $1,581.5 million for the first three quarters of 2020 from $1,597.5 million for the first three quarters of 2019.

This decrease primarily resulted from a decrease in net sales for the E-M Solutions reportable segment of $60.4 million, or 33.7%, to $118.6 million for the first three quarters of 2020 from $179.0 million for the first three quarters of 2019 primarily due to winding down of this reportable segment and lower demand in our Automotive end market.

Also contributing to this decrease in total net sales was a decrease in net sales for the RF&S Components reportable segment of $18.5 million, or 35.7%, to $33.3 million for the first three quarters of 2020 from $51.7 million for the first three quarters of 2019 primarily due to a loss of a key customer in this reportable segment and coupled with the impact of COVID-19, resulted in lower demand in our Networking/Communications end market.

The decrease in total net sales was partially offset by an increase in net sales for the

PCB reportable segment of $ 62 .

9 million, or 4 .

6 %, to $ 1,4 29 .

6 million for the first three quarters of 2020 from $ 1, 366 .

8 million for the first t hree quarters of 2019.

In addition, these changes in the PCB reportable segment resulted in an increase in the average price per square foot of 20 .

7 %, driven mainly by product mix shift .

The resulting increase in net sales , however, was partially offset by a 14 .

2 % decrease in the volume of PCB shipments as compared to the first t hree quarters of 2019.

Overall gross margin increased to 17.4% for the third quarter of 2020 from 16.0% for the third quarter of 2019.

This increase was primarily driven by an increase in gross margin for the PCB reportable segment increased to 18.7% for the third quarter of 2020 from 16.7% for the third quarter of 2019, primarily due to higher volumes.

Gross margin for the RF&S Components and E-M Solutions reportable segments decreased to 48.1% and 5.3%, respectively, for the third quarter of 2020 from 60.7% and 7.9%, respectively, for the third quarter of 2019, in each case primarily due to lower sales.

Overall gross margin decreased to 17.1% for the first three quarters of 2020 from 17.3% for the first three quarters of 2019.

Gross margin for the PCB reportable segment increased to 18.8% for the first three quarters of 2020 from 17.6% for the first three quarters of 2019.

However, the decrease in overall gross margin was primarily driven by the gross margin for the RF&S Components reportable segment, which decreased to 50.8% for the first three quarters of 2020 from 64.3% for the first three quarters of 2019, primarily due to lower sales.

Furthermore, gross margin for the E-M Solutions reportable segment decreased to (0.2%) for the first three quarters of 2020 from 7.2% for the first three quarters of 2019, primarily due to lower sales and an additional provision for excess and obsolete inventories.

Capacity utilization is a key driver for us, which is measured by the actual production as a percentage of maximum capacity.

Net loss from continuing operations

As of March 29, 2021, E-M Solutions no longer meets the criteria for segment reporting and the SH BPA facility is integrated into the PCB reportable segment.

In fiscal 2020, subsequent to the quarter ended March 30, 2020, RF&S Components was added as a reportable segment.

As a result, we reclassified prior periods to reflect the new segment.

Despite the closure of the two plants from our discontinued E-M Solutions segment, which accounted for $10.9 million reduction in net sales, total net sales increased $28.8 million, or 5.8%, to $526.4 million for the first quarter of 2021 from $497.6 million for the first quarter of 2020.

This increase in total net sales primarily resulted from an increase in net sales for the PCB reportable segment of $36.5 million, or 7.7%, to $510.5 million for the first quarter of 2021 from $474.0 million for the first quarter of 2020 primarily due to higher demand in our Automotive, Data Center Computing and Aerospace and Defense end markets, partially offset by lower demand in our Networking/Communications and Other end markets.

In addition, these changes in the PCB reportable segment resulted in a 28.8% increase in the volume of PCB shipments, partially offset by a decrease in the average price per square foot of 15.8%, driven mainly by product mix shift as compared to the first quarter of 2020.

Also contributing to the increase in total net sales was an increase in net sales for the RF&S Components reportable segment of $3.2 million, or 34.4%, to $12.7 million for the first quarter of 2021 from $9.4 million for the first quarter of 2020 primarily due to higher demand in our Networking/Communications end market.

Overall gross margin decreased to 15.5% for the first quarter of 2021 from 16.3% for the first quarter of 2020.

This decrease was primarily driven by a decrease in gross margin for the PCB reportable segment to 15.7% for the first quarter of 2021 from 17.6% for the first quarter of 2020.

This decline was due to approximately $13.0 million of additional costs related to a stronger Chinese currency, higher raw material costs due to increased commodity prices, primarily copper, and continued costs and production inefficiencies due to COVID-19.

We were able to mitigate most of these costs through higher revenue, and production and spending efficiencies.

Gross margin for the RF&S Components reportable segment increased to 47.5% for the first quarter of 2021 from 45.8% for the first quarter of 2020, primarily due to higher sales.

Capacity utilization is a key driver for us, which is measured by actual production as a percentage of maximum capacity.

This measure is particularly important in our high-volume facilities in Asia, as a significant portion of our operating costs are fixed in nature.

Capacity utilization for the third quarter of 2020 in our Asia and North America PCB facilities was 63% and 61%, respectively, compared to 60% and 58%, respectively, for the third quarter of 2019.

Capacity utilization for the first three quarters of 2020 in our Asia and North America PCB facilities was 62% and 63%, respectively, compared to 61% and 60%, respectively for the first three quarters of 2019.

The increase in capacity utilization in our Asia and North America PCB facilities was due to an increase in production related to increased sales in our Aerospace and Defense, Medical/Industrial/Instrumentation, and Computing/Storage/Peripherals end markets.

Capacity utilization for the first quarter of 2021 in our Asia and North America PCB facilities was 80% and 55%, respectively, compared to 52% and 67%, respectively, for the first quarter of 2020.

The increase in capacity utilization in our Asia PCB facilities was due to an increase in production resulting from increased sales in our Automotive and Data Center Computing end

The decrease in our capacity utilization in our North America PCB facilities was due to production inefficiencies caused by COVID-19 .

Selling and Marketing Expenses

Selling and marketing expenses decreased $1.3 million, to $15.9 million for the third quarter of 2020 from $17.2 million for the third quarter of 2019.

As a percentage of net sales, selling and marketing expenses was 3.1% for the third quarter of 2020, as compared to 3.2% for the third quarter of 2019.

The decrease in selling and marketing expense for the third quarter of 2020 was primarily due to reduced travel expense due to the COVID-19 pandemic, which has decreased travel on a temporary basis.

Selling and marketing expenses decreased $3.6 million, to $48.0 million for the first three quarters of 2020 from $51.6 million for the first three quarters of 2019.

As a percentage of net sales, selling and marketing expenses was 3.0% for the first three quarters of 2020, as compared to 3.2% for the first three quarters of 2019.

The decrease in selling and marketing expense for the first three quarters of 2020 was primarily due to reduced travel and commission expense.

Selling and marketing expenses increased $0.1 million, to $16.3 million for the first quarter of 2021 from $16.2 million for the first quarter of 2020.

As a percentage of net sales, selling and marketing expenses was 3.1% for the first quarter of 2021, as compared to 3.2% for the first quarter of 2020.

The increase in selling and marketing expense for the first quarter of 2021 was primarily due to an increase in commission expense, partially offset by reduced travel expense due to the COVID-19 pandemic, which has decreased travel on a temporary basis.

General and Administrative Expenses

General and administrative expenses decreased $4.0 million to $29.1 million, or 5.7% of net sales, for the third quarter of 2020 from $33.1 million, or 6.2% of net sales, for the third quarter of 2019.

This decrease was primarily due to a decrease in acquisition costs and supplies expense.

General and administrative expenses increased $15.2 million to $110.5 million, or 7.0% of net sales, for the first three quarters of 2020 from $95.3 million, or 6.0% of net sales, for the first three quarters of 2019.

This increase was primarily due to the $14.7 million restructuring charges associated with the E-M Solutions business unit.

Impairment of Goodwill

During the third quarter of 2020, we performed an interim evaluation of goodwill as we believed there were impairment triggering events and circumstances that warranted an evaluation.

These circumstances included a permanent loss of a key customer in the RF&S Components reporting unit that coupled with the impact of COVID-19, resulted in lower than anticipated results and continued decline in sales.

As a result, we recorded a charge for the impairment of goodwill in the amount of $69.2 million in the third quarter of 2020.

General and administrative expenses decreased $3.1 million to $31.5 million, or 6.0% of net sales, for the first quarter of 2021 from $34.7 million, or 7.0% of net sales, for the first quarter of 2020.

This decrease was primarily due to a decrease in bad debt and acquisition/integration costs.

Other Expense

Other expense, net increased $7.8 million to $22.5 million for the third quarter of 2020 from $14.5 million for the third quarter of 2019.

This increase was primarily the result of foreign currency losses in the current quarter due to the strengthening of the Chinese Renminbi (RMB) in the third quarter of 2020 compared to the third quarter of 2019.

We utilize the RMB at our China facilities for employee-related expenses, RMB denominated purchases, and other costs of running our operations in China.

Other expense, net increased $4.3 million to $57.9 million for the first three quarters of 2020 from $53.6 million for the first three quarters of 2019.

This increase was primarily the result of foreign currency losses due to the strengthening of the RMB in the first three quarters of 2020 compared to the first three quarters of 2019.

The foreign currency loss was partially offset by a decrease in interest expense of $3.6 million mainly as a result of the $400.0 million debt principal prepayment for the Term Loan made during the third quarter of 2020.

Income tax benefit increased by $5.5 million to $1.3 million of tax benefit for the third quarter of 2020 from $4.2 million of tax expense for the third quarter of 2019.

The increase in income tax benefit for the third quarter of 2020 was primarily due to a decrease in continuing operating income, a change in the estimated tax benefit related to Global Intangible Low Taxed Income (GILTI) in the United States and unrealized foreign exchange gain and loss in Hong Kong.

The income tax benefit increased by $9.1 million to $3.6 million of tax benefit for the first three quarters of 2020 from $5.5 million of tax expense for the first three quarters of 2019.

The increase in income tax benefit for the first three quarters of 2020 was primarily due to (i) a decrease in continuing operating income, (ii) an increase in the release of uncertain tax positions due to the expiration of the statute of limitation in foreign jurisdictions, netted against (iii) an increase related to the retroactive approval of the Company’s renewal application for High and New Tax Enterprise status in China, and (iv) an increase in the valuation allowance and withholding tax deferred tax liability related to the announced closure of two of the E-M Solutions plants.

Other expense, net increased $6.8 million to $24.1 million for the first quarter of 2021 from $17.3 million for the first quarter of 2020.

This increase was primarily the result of $15.2 million of loss on extinguishment of debt associated with the premium paid on extinguishment of debt and the write-off of the remaining unamortized debt issuance costs related to the repayment of the Senior Notes due in 2025.

This increase is partially offset by a decrease in interest expense of $8.4 million due to overall lower levels of debt outstanding.

Income tax expense decreased by $3.2 million to $1.1 million of tax benefit for the first quarter of 2021 from $2.1 million of tax expense for the first quarter of 2020.

The decrease in income tax expense for the first quarter of 2021 was primarily due to a decrease in pre-tax income from continuing operations and the approval of the Company’s renewal application for High and New Enterprise status for two of the Company’s manufacturing subsidiaries in China.

Our effective tax rate is primarily impacted by tax rates in China and Hong Kong, the U.S.

federal income tax rate, apportioned state income tax rates, the generation of credits and deductions available to us, as well as changes in valuation allowances and certain non-deductible items.

On March 27, 2020, the President of the United States signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) providing economic relief to disruptions caused by the Coronavirus pandemic.

federal income tax rate, apportioned state income tax rates, the generation of credits and deductions available to the Company as well as changes in valuation allowances and certain non-deductible items.

We had a net deferred income tax asset of approximately $16.0 million and $24.5 million as of March 29, 2021 and March 30, 2020, respectively.

On March 11, 2021, the President of the United States signed the American Rescue Plan (ARP) providing additional economic relief to the disruptions caused by the COVID-19 pandemic.

Accounting Standard Codification (ASC) 740, Accounting for Income Taxes , requires companies to recognize the effect of tax law changes in the period of enactment regardless of the effective date of those tax law changes.

We considered the impact to our financial statements of the corporate income tax aspects of the CARES Act and determined the impact is not material to our financial statements.

The CARES Act includes a number of provisions, including the increase of IRC Section 163(j) interest expense deduction limitation of Adjusted Tax Income (ATI) from 30% to 50%.

This is applicable to the 2019 and 2020 tax years.

The Company accounted for such change in the Q1 2020 provision calculation.

There are also provisions that allow for a 100% refund of Alternative Minimum Tax Credit carryforwards and which postpone tax compliance deadlines and payments ordinarily due April 15, 2020.

We considered the impact to our financial statements of the corporate income tax aspects of the ARP and determined the impact is not material to our financial statements.

Liquidity and Capital Resources

Our principal sources of liquidity have been cash provided by operations, the issuance of debt, and borrowings under our Revolving Credit Facility.

Our principal sources of liquidity have been cash provided by operations, the issuance of debt, and borrowings under our Revolving Credit Facilities.

Our principal uses of cash have been to finance capital expenditures, finance acquisitions, fund working capital requirements, and to repay existing debt.

We anticipate that servicing debt, financing capital expenditures, financing acquisitions, and funding working capital requirements will continue to be the principal demands on our cash in the future.

Cash flow provided by operating activities for continuing operations during the first three quarters of 2020 was $192.2 million as compared to cash flow provided by operating activities for continuing operations of $169.6 million in the same period in 2019.

We anticipate that financing capital expenditures, financing acquisitions, funding working capital requirements, servicing debt, and potential share repurchases will be the principal demands on our cash in the future.

Cash flow provided by operating activities for continuing operations during the first quarter of 2021 was $41.1 million as compared to cash flow provided by operating activities for continuing operations of $6.6 million in the same period in 2020.

The increase in cash flow was primarily due to less investment in working capital.

Net cash used in investing activities for continuing operations was approximately $75.0 million for the first three quarters of 2020, comprised primarily of $74.5 million for purchases of property, plant and equipment and other assets.

Net cash used in investing activities for continuing operations was approximately $68.6 million for the first three quarters of 2019, reflecting $74.6 million for purchases of property, plant and equipment and other assets less proceeds from sale of property, plant and equipment and other assets of $6.0 million.

Net cash used in financing activities for continuing operations during the first three quarters of 2020 was $392.5 million, reflecting repayment of long-term debt of $400.0 million, offset by $7.3 million for capital equipment financing.

Net cash used in financing activities was approximately $31.6 million for the first three quarters of 2019, reflecting repayment of long-term debt of $30.0 million and payment of debt issuance costs of $1.6 million.

We received proceeds from the sale of the Mobility business unit, net of cash disposed of $507.5 million during the first three quarters of 2020, which have been presented in the consolidated condensed statements of cash flows within net cash provided by investing activities from discontinued operations.

As of September 2 8 , 2020, we had cash , cash equivalents , and restricted cash of approximately $6 63 .

3 million, of which approximately $ 233.8 million was held by our foreign subsidiaries, primarily in Hong Kong and China.

As of September 28, 2020, o ur restricted cash balance of $250.0 million consisted of a specifi c deposit account to be used for principal payment on the Convertible Senior Notes due December 2020.

Our 2020 capital expenditures are expected to be approximately $100.0 million.

We believe our existing cash resources and sources of liquidity, together with cash generated from operations, will be sufficient to meet our working capital requirements for at least the next twelve months.

However, should demand for our products change significantly over the next twelve months or should we experience significant increases in delinquent or uncollectible accounts receivable for any reason, including in particular continued or worsening economic conditions caused by the COVID-19 global pandemic, our cash provided by operations could decrease significantly and we could be required to seek additional sources of liquidity to continue our operations at their current level.

Net cash used in investing activities for continuing operations was approximately $21.0 million for the first quarter of 2021, reflecting $21.8 million for purchases of property, plant and equipment and other assets less $0.8 million for proceeds from sale of property, plant and equipment and other assets.

Net cash used in investing activities for continuing operations was approximately $23.9 million for the first quarter of 2020, reflecting purchases of property, plant and equipment and other assets.

Net cash provided by financing activities for continuing operations during the first quarter of 2021 was $68.1 million, primarily reflecting proceeds from long-term debt borrowing of $500.0 million, less the repayment of long-term debt borrowings of $425.8 million and payment of debt issuance costs of $4.8 million.

There was no activity related to cash flows from financing activities for the first quarter of 2020.

As of March 29, 2021, we had cash and cash equivalents of approximately $539.6 million, of which approximately $233.8 million was held by our foreign subsidiaries, primarily in China.

Should we choose to remit cash to the United States from our

foreign locations, we may incur tax obligations which would reduce the amount of cash ultimately available to the United States.

However, we believe there would be no material tax consequences not previously accrued for on the repatriation of this cash .

Our total 2021 capital expenditures are expected to be in the range of $70.0 million to $90.0 million.

Long-term Debt and Letters of Credit

As of September 28, 2020, we had $1,090.0 million of outstanding debt, net of discount and debt issuance costs, composed of $402.2 million of Term Loan debt due September 2024, $370.3 million of Senior Notes due October 2025, $247.6 million of Convertible Senior Notes due December 2020, $40.0 million under the U.S.

ABL, and $30.0 million under the Asia ABL.

Borrowings under the Term Loan Facility and Senior Notes Facility are subject to certain affirmative and negative covenants, including limitations on indebtedness, corporate transactions, investments, dispositions, and share payments.

Under the occurrence of certain events, the ABL Revolving Loans are subject to various financial and operational covenants, including maintaining minimum fixed charge coverage ratios.

As of September 28, 2020, we were in compliance with the covenants under the Term Loan Facility, Senior Notes Facility and ABL Revolving Loans.

Additional information regarding our indebtedness, including information about availability under our credit facilities, interest rates and other key terms of our outstanding indebtedness, is included in Part I, Item 1, Note 8, Long-term Debt and Letters of Credit , of the Notes to Consolidated Condensed Financial Statements included in this Quarterly Report on Form 10-Q.

As of March 29, 2021, we had $926.1 million of outstanding debt, net of discount and debt issuance costs, composed of $493.5 million of Senior Notes due March 2029, $402.6 million of Term Loan due September 2024, and $30.0 million under the Asia Asset-Based Lending Credit Agreement (Asia ABL).

Pursuant to the terms of the Term Loan Facility and Senior Notes due 2029, we are subject to certain affirmative and negative covenants, including limitations on indebtedness, corporate transactions, investments, dispositions, and share payments.

Under the occurrence of certain events, as a result of the U.S.

Asset-Based Lending Credit Agreement (U.S.

ABL) and Asia ABL (collectively, the ABL Revolving Loans), we are also subject to various financial covenants, including leverage and fixed charge coverage ratios.

As of March 29, 2021, we were in compliance with the covenants under the Term Loan Facility, Senior Notes due 2029 and ABL Revolving Loans.

Based on our current level of operations, we believe that cash generated from operations, cash on hand and cash from the issuance of term and revolving debt will be adequate to meet our currently anticipated capital expenditure, debt service, and working capital needs for the next twelve months.

Additional information regarding our indebtedness, including information about the credit available under our debt facilities, interest rates and other key terms of our outstanding indebtedness, is included in Part I, Item 1, Note 8, Long-term Debt and Letters of Credit , of the Notes to Consolidated Condensed Financial Statements included in this Quarterly Report on Form 10-Q.

Contractual Obligations and Commitments

As of the date of this report, there were no material changes to our contractual obligations and commitments outside the ordinary course of business since December 30, 2019 as reported in our Annual Report on Form 10-K for the fiscal year ended December 30, 2019.

The following table provides information on our contractual obligations as of March 29, 2021:

Contractual Obligations (1)

(In thousands)

Long-term debt obligations

Interest on debt obligations

Derivative liabilities

Purchase obligations

Total contractual obligations

Unrecognized uncertain tax benefits of $2.8 million are not included in the table above as the settlement timing is uncertain.

Operating leases are not included in the table above – see Part I, Item 1, Note 3, Leases , of the Notes to Consolidated Condensed Financial Statements included in this Quarterly Report on Form 10-Q for further details.

Off-Balance Sheet Arrangements

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis