What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-07-29 compared with 2025-04-29 · 147 added, 89 removed, 138 unchanged (63% of the section changed)

35 unchanged sentences

For further information on our critical and other significant accounting policies and estimates, see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 27, 2024, as filed with the SEC.

As discussed in Note 4, Goodwill and Intangible Assets Goodwill to our condensed consolidated financial statements, we performed a quantitative goodwill impairment assessment as of June 27, 2025, which resulted in goodwill impairment charges of $151.1 million related to the Fluid Solutions and Services reporting units.

The fair value estimate of each reporting unit was derived from an income approach.

Under the income approach, we estimated the fair value of the reporting unit based on the present value of estimated future cash flows.

We prepared cash flow projections based on management's estimates of revenue growth rates and operating margins, taking into consideration historical performance and the current macroeconomic, industry, and market conditions.

We based the discount rate on the weighted-average cost of capital considering company-specific characteristics and the uncertainty related to the reporting unit's ability to execute on the projected cash flows.

Revenue growth rates, operating margins, and the discount rate applied were significant assumptions used to determine the fair value of each reporting unit.

The concluded fair value of our reporting units was reconciled to our market capitalization.

The excess of the concluded fair value over our market capitalization represents an implied control premium, which we reviewed for reasonableness by comparison to observed transaction premiums and consideration of specific attributes of the Company.

If the actual results are not consistent with the assumptions and judgments we have made in determining the fair value of our reporting units, we may record additional impairment losses.

The fair values of the Core Products and the Fluid Delivery Systems reporting units, both of which are part of the Products segment, were each substantially in excess of their respective carrying values.

Results of Operations

1 unchanged sentence

Fiscal year 2025 is a 52-week period ending December 26, 2025 and fiscal year 2024 was a 52-week ended December 27, 2024.

The fiscal quarters ended March 28, 2025 and March 29, 2024 were both 13-week periods.

Discussion of Results of Operations for the Three months ended March 28, 2025 compared to the Three months ended March 29, 2024

Three Months Ended

The fiscal quarters ended June 27, 2025 and June 28, 2024 were both 13-week periods.

Discussion of Results of Operations for the Three and Six months ended June 27, 2025 compared to the Three and Six months ended June 28, 2024

Three Months Ended Six Months Ended

Revenues by Segment

(Dollars in millions)

2025 March 29,

2025 June 28,

Change June 27,

2025 June 28,

Products $ 454.9 $ 452.7 0.5 % $ 911.9 $871.2 4.7 %

3 unchanged sentences

Services as a percentage of total revenues 12.3 % 12.3 % 12.1 % 12.3 %

For the three-month period ended March 28, 2025, Products revenues increased compared to the same period in the prior year.

For the three and six-month periods ended June 27, 2025, Products revenues increased compared to the same periods in the prior year.

The increase in Products revenues was primarily due to an increase in customer demand, along with an overall market improvement in the semiconductor industry.

Services revenues increased for the three-month period ended March 28, 2025 compared to the same period in the prior year primarily due to an increase in demand across its customer base.

Three Months Ended

Service revenues for the three and six-month periods ended June 27, 2025, increased compared to the same periods in the prior year, primarily driven by higher demand across its customer base.

Three Months Ended Six Months Ended

Revenues by Geography

(Dollars in millions)

2025 March 29,

2025 June 28,

Change June 27,

2025 June 28,

United States $ 134.6 $ 146.2 (7.9) % $ 257.6 $287.1 (10.3) %

4 unchanged sentences

Revenues by geographic area are categorized based on the customer’s location to which the products were shipped or services were performed.

For the three months ended March 28, 2025, U.S.

revenues decreased compared to the same period in the prior year, primarily due to a shift of product revenues from U.S.

For the three and six months ended June 27, 2025, U.S.

revenues decreased compared to the same periods in the prior year, primarily due to a shift of product revenues from U.S.

to international markets.

International revenues increased for the three months ended March 28, 2025 compared to the same period in the prior year, primarily as a result of market improvement driving higher customer demand.

International revenues increased for the three and six months ended June 27, 2025 compared to the same periods in the prior year, primarily as a result of market improvement driving higher customer demand.

Cost of Revenues

Three Months Ended

Three Months Ended Six Months Ended

Cost of revenues by Segment

(Dollars in millions)

2025 March 29,

2025 June 28,

Change June 27,

2025 June 28,

Products $ 393.3 $ 383.9 2.4 % $ 783.5 $738.0 6.2 %

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Cost of Products revenues consists of purchased materials, direct labor and manufacturing overhead.

For the three-month period ended March 28, 2025, Cost of Products revenues increased by $36.3 million compared to the same period in the prior year.

The increase was primarily driven by higher sales volumes, which resulted in a $30.7 million increase in material costs.

The remaining increase was attributable to higher labor and overhead costs associated with increased production activity.

For the three and six-month periods ended June 27, 2025, Cost of Products revenues increased by $9.4 million and $45.5 million, respectively, compared to the same periods in the prior year.

The increase was primarily driven by higher sales volumes, which led to a $3.5 million increase in material costs for the three-month period, and $34.2 million increase for the six month-period.

The remaining increase was attributable to higher labor and overhead costs associated with increased production activity, as well as restructuring activities, merit increases, and inflation.

Services Cost of revenues consists of direct labor, overhead, and materials such as chemicals, gases and consumables.

For the three-month period ended March 28, 2025, Services Cost of revenues increased by $3.2 million compared to the same period in the prior year.

The increase was driven by a higher volume of service orders, which resulted in increased labor costs of $1.7 million and overhead cost of $1.6 million.

Three Months Ended

For the three and six-month periods ended June 27, 2025, Services Cost of revenues increased by $2.3 million and $5.6 million, respectively, compared to the same periods in the prior year.

Revenue remained essentially flat for the three-month period ended June 27, 2025 compared to the same period in the prior year.

The increase in labor costs of $2.3 million for the three-month period was primarily due to higher headcount, overtime, and incentive compensation for a specific location.

The increase for the six-month period was driven by a higher volume of service orders, as well as higher headcount, overtime and incentive compensation for a specific location, resulting in a $4.2 million increase.

Three Months Ended Six Months Ended

Gross Profit by Segment

(Dollars in millions)

2025 March 29,

2025 June 28,

Change June 27,

2025 June 28,

Products $ 61.6 $ 68.8 (10.5) % $ 128.4 $133.2 (3.6) %

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Gross profit and gross margins fluctuate with revenue levels, product mix, material costs, and labor costs.

Products gross profit increased for the three-month period ended March 28, 2025 compared to the same period in the prior year primarily due to higher revenue levels.

However, Products gross margin decreased primarily due to an unfavorable product mix and a shift in sales volumes across different geographic regions.

Services gross profit and gross margin decreased for the three-month period ended March 28, 2025 compared to the same period in the prior year.

The decrease was primarily due to higher fixed costs which did not scale proportionately with the increase in Services revenue.

Products gross profit and gross margin decreased for the three and six-month periods ended June 27, 2025 compared to the same periods in the prior year primarily due to higher employee and restructuring related costs.

Services gross profit and gross margin decreased for the three and six-month periods ended June 27, 2025 compared to the same periods in the prior year, primarily due to higher cost of revenues driven by increased labor and compensation-related costs at a specific location.

Operating Margin

Three Months Ended

Three Months Ended Six Months Ended

Operating Profit by Segment

(Dollars in millions)

2025 March 29,

2025 June 28,

Change June 27,

2025 June 28,

Products $ (70.9) $ 18.8 (477.1) % $ (60.7) $33.5 (281.2) %

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Total Company (27.3 %) 4.4 % (12.4 %) 4.0 %

Operating profit and operating margin of Products decreased for the three-month period ended March 28, 2025 compared to the same period in the prior year.

The decrease was primarily due to higher employee-related expenses, which were driven by increased compensation costs.

These included annual salary increases, higher incentive compensation, and separation costs associated with the resignation of the Company’s former Chief Executive Officer (CEO).

Operating profit and operating margin of Services were consistent for the three-month period ended March 28, 2025 compared to the same period in the prior year.

Operating profit and operating margin for both Products and Services decreased for the three and six-month periods ended June 27, 2025 compared to the same periods in the prior year.

This decline was primarily driven by the goodwill impairment recorded during the second quarter of fiscal year 2025, as well as increases in stock-based compensation and severance costs due to restructuring activities, including both involuntary separations and a voluntary retirement program.

Research and Development

Three Months Ended

(Dollars in millions) March 28,

2025 March 29,

Three Months Ended Six Months Ended

(Dollars in millions) June 27,

2025 June 28,

Change June 27,

2025 June 28,

Research and development $ 7.8 $ 7.1 9.9 % $ 15.4 $ 14.1 9.2 %

Research and development as a percentage of total revenues 1.5 % 1.4 % 1.5 % 1.4 %

Research and development expenses remained consistent for the three-month period ended March 28, 2025 compared to the same period in the prior year.

Research and development expenses remained consistent for both the three and six-month periods ended June 27, 2025 compared to the same periods in the prior year.

Sales and Marketing

Three Months Ended

(Dollars in millions) March 28,

2025 March 29,

Three Months Ended Six Months Ended

(Dollars in millions) June 27,

2025 June 28,

Change June 27,

2025 June 28,

Sales and marketing $ 15.5 $ 14.8 4.7 % $ 30.5 $ 28.5 7.0 %

Sales and marketing as a percentage of total revenues 3.0 % 2.9 % 2.9 % 2.9 %

Sales and marketing expenses increased for the three-month period ended March 28, 2025 compared to the same period in the prior year primarily due to higher employee-related expenses.

Sales and marketing expenses remained consistent for both the three and six-month periods ended June 27, 2025 compared to the same periods in the prior year.

General and Administrative

Three Months Ended

(Dollars in millions) March 28,

2025 March 29,

Three Months Ended Six Months Ended

(Dollars in millions) June 27,

2025 June 28,

Change June 27,

2025 June 28,

General and administrative $ 46.9 $ 43.7 7.3 % $ 95.4 $ 88.3 8.0 %

General and administrative as a percentage of total revenues 9.0 % 8.5 % 9.2 % 8.9 %

General and administrative expenses increased $4.0 million in the three-month period ended March 28, 2025 compared to the same period in the prior year.

The increase was primarily driven by non-recurring separation costs related to the resignation of the Company’s CEO, as well as an increase in employee-related expenses due to higher compensation costs, including annual salary increases and higher incentive compensation accruals.

These increases were partially offset by a decrease in stock-based compensation expense resulting from the forfeiture of restricted stock units and performance stock units following the former CEO’s resignation.

General and administrative expenses increased $3.2 million and $7.1 million in the three and six-month periods ended June 27, 2025 compared to the same periods in the prior year.

The increase in the three-month period ended June 27, 2025 was primarily driven by an increase in stock-based compensation and severance payments due to restructuring activities, including both involuntary separations and a voluntary retirement program.

The increase in the six-month period ended June 27, 2025 was primarily driven by increase in stock-based compensation, separation payment made to the previous CEO, and increased restructuring activities, including both involuntary separations and a voluntary retirement program.

Impairment of Goodwill

Three Months Ended Six Months Ended

(Dollars in millions) June 27,

2025 June 28,

Change June 27,

2025 June 28,

Impairment of Goodwill $ 151.1 $ — n/m $ 151.1 $ — n/m

Impairment of goodwill represents a non-cash charge of $151.1 million recorded during the three months ended June 27, 2025, as it was determined that the fair values of our Fluid Solutions and Services reporting units were below their carrying amounts.

Refer to Note 4, Goodwill and Intangible Assets to the condensed consolidated financial statements for more information.

Interest and Other Expense, net

Three Months Ended

(Dollars in millions) March 28,

2025 March 29,

Three Months Ended Six Months Ended

(Dollars in millions) June 27,

2025 June 28,

Change June 27,

2025 June 28,

Interest income $ 0.8 $ 1.4 (42.9) % $ 1.9 $ 2.8 (32.1) %

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Other income (expense), net $ (2.2) $ 17.4 (112.6) % $ (1.3) $ 13.5 (109.6) %

Interest income was consistent in the three-month period ended March 28, 2025 compared to the same period in the prior year.

Interest expense decreased for the three-month period ended March 28, 2025 compared to the same period in the prior year primarily due to lower interest rates and reduced amortization of debt issuance costs.

Other income (expense), net, increased by $4.6 million for the three-month period ended March 28, 2025 compared to the same period in the prior year.

This increase was primarily due to favorable foreign exchange transaction and

remeasurement gains, as well as the absence of $1.3 million loss from the change in the fair value of contingent earn-out in the prior period.

Interest income decreased in the three and six-month periods ended June 27, 2025 compared to the same periods in the prior year due to lower interest earning balances.

Interest expense decreased for the three and six-month periods ended June 27, 2025 compared to the same periods in the prior year primarily due to lower interest rates and reduced amortization of debt issuance costs.

Other income (expense), net, for the three-month period was primarily comprised of unrealized foreign exchange losses of $4.2 million offset by government grants received of $2.2 million.

In the prior period, the Company recognized a $24.1

million gain related to the fair value adjustment of the contingent earn-out from the HIS acquisition which was offset by unrealized foreign exchange losses of $2.8 million million and debt modification costs of $3.6 million.

Other income (expense), net, for the six-month period was primarily comprised of unrealized foreign exchange losses of $3.4 million offset by government grants received of $2.2 million.

In the prior period, the Company recognized a $22.8 million million gain related to the fair value adjustment of the contingent earn-out from the HIS acquisition which was offset by unrealized foreign exchange losses of $5.2 million and debt modification costs of $3.6 million.

Provision for Income Taxes

Three Months Ended

(Dollars in millions) March 28,

2025 March 29,

Three Months Ended Six Months Ended

(Dollars in millions) June 27,

2025 June 28,

Change June 27,

2025 June 28,

Provision for income taxes $ 7.2 $ 8.5 (15.3) % $ 14.6 $ 18.4 (20.7) %

Effective tax rate -4.7 % 28.3 % - 9.8 % 56.4 %

The decrease in the effective tax rate for the three-month period ended March 28, 2025 compared to the same period in the prior year is primarily attributable to changes in the geographic mix of worldwide earnings and financial results in jurisdictions which are taxed at different rates and the impact of losses in jurisdictions with full valuation allowances on deferred tax assets.

Company management continuously evaluates the need for a valuation allowance on its deferred tax assets and, as of March 28, 2025, concluded that a full valuation allowance on its U.S.

The decrease in the effective tax rate for the three and six-month periods ended June 27, 2025 compared to the same periods in the prior year is primarily attributable to the changes in the geographic mix of worldwide earnings and financial results in jurisdictions which are taxed at different rates and the impact of losses in jurisdictions with full valuation allowances on deferred tax assets.

The negative tax rates in the three and six-month periods ended June 27, 2025 are the result of pre-tax losses in those periods compared to pre-tax profits in the comparable periods ended June 28, 2024.

The tax provision for the three and six months ended June 27, 2025 includes the impact of a change in the Company’s plans for the earnings of one of its subsidiaries in China.

In the past, the Company has asserted that the earnings of our foreign subsidiaries, with the exception of certain of its subsidiaries in Singapore, were considered indefinitely reinvested, thus avoiding the recognition of deferred taxes on the earnings considered indefinitely reinvested.

The negative tax rates in the three and six-month periods ended June 27, 2025 are the result of pre-tax losses during those periods compared to pre-tax profits in the comparable periods ended June 28, 2024.

The tax provision for the three and six months ended June 27, 2025 includes the impact of a change in the Company’s assertion that earnings from fiscal 2023 and going forward in one of its subsidiaries in China is no longer permanently reinvested.

As a result, the Company has recorded a discrete tax expense of $3.4 million in the second quarter of 2025.

The Company will also record deferred taxes on the undistributed current and future year earnings of this China subsidiary.

Company management continuously evaluates the need for a valuation allowance on its deferred tax assets and, as of June 27, 2025, concluded that a full valuation allowance on its U.S.

federal, state and certain of its foreign deferred tax assets remained appropriate.

2 unchanged sentences

The following table summarizes our cash and cash equivalents:

(In millions) March 28,

(In millions) June 27,

2025 December 27,

2 unchanged sentences

The following table summarizes the Condensed Consolidated Statements of Cash Flow information:

Three Months Ended

(In millions) March 28,

2025 March 29,

Six Months Ended

(In millions) June 27,

2025 June 28,

Operating activities $ 57.4 $ 33.0

2 unchanged sentences

Effects of exchange rate changes on cash and cash equivalents 4.0 (2.1)

Net increase (decrease) in cash and cash equivalents $ 3.7 $ (14.0)

Net increase in cash and cash equivalents $ 13.5 $ 12.5

Our primary cash inflows and outflows were as follows:

• For the three-month period ended March 28, 2025, we generated cash from operating activities of $28.2 million compared to $9.8 million for the same period in the prior year.

The $18.4 million increase in net cash provided by operating activities was primarily driven by a $16.4 million favorable change in net working capital and a $4.7 million increase in net income, partially offset by $2.7 million decrease in non-cash items included in net income.

• The major contributors in net changes in operating assets and liabilities for the three-month period ended March 28, 2025 were as follows:

◦ Accounts receivable decreased $23.1 million primarily due to the timing of shipments and collections and $6.4 million decrease in inventories due to increased production levels and corresponding consumption of inventory balances.

◦ Accounts payable decreased $8.5 million, other liabilities decreased $2.3 million, and accrued compensation and related benefits decreased $10.4 million, primarily due to the timing of payments.

• Net cash used in investing activities during the three-month period ended March 28, 2025 and March 29, 2024 consisted primarily of $12.4 million and $18.0 million purchases of property, plant and equipment, respectively.

• During the three-month period ended March 28, 2025, cash used in financing activities was $12.2 million compared to $4.5 million in the same period in the prior year.

The $7.7 million increase in net cash used by financing activities was primarily due to $7.5 million additional principal payments on bank borrowings.

• For the six-month period ended June 27, 2025, we generated cash from operating activities of $57.4 million compared to $33.0 million for the same period in the prior year.

The $24.4 million increase in net cash provided by operating activities was primarily driven by a $25.9 million favorable change in net working capital.

• The major contributors in net changes in operating assets and liabilities for the six-month period ended June 27, 2025 were as follows:

◦ Accounts receivable decreased $34.3 million primarily due to the timing of shipments and collections, as well as the sale of accounts receivable through factoring arrangements.

Inventories decreased by $5.4 million as inventory on hand was consumed.

Operating lease assets and liabilities decreased $11.1 million, reflecting lease payments and amortization.

Prepaid expenses and other current assets increased by $7.8 million due to advance payments and prepayments related to various expenses.

◦ Accounts payable decreased $11.9 million, other liabilities by $4.0 million, accrued compensation and related benefits by $2.6 million, and income tax payable by $4.2 million, as a result of elevated prepayment activity.

• Net cash used in investing activities during the six-month periods ended June 27, 2025 and June 28, 2024 consisted primarily of $29.2 million and $31.0 million purchases of property, plant and equipment, respectively.

• During the six-month period ended June 27, 2025, cash used in financing activities was $18.8 million compared to $12.5 million cash provided in the same period in the prior year.

The $31.3 million increase in net cash used by financing activities was primarily due to $31.5 million net cash proceeds from bank borrowings related to the debt modification in the prior period.

We believe we have sufficient capital to fund our working capital needs, satisfy our debt obligations, maintain our existing capital equipment, purchase new capital equipment and make strategic acquisitions from time to time.

As of March 28, 2025, we had cash and cash equivalents of $317.6 million compared to $313.9 million as of December 27, 2024.

Our cash and cash equivalents, cash generated from operations, and amounts available under our revolving line of credit described below were our principal sources of liquidity as of March 28, 2025.

Fluid Solutions has an existing factoring arrangement with a financial institution in which a portion of its accounts receivable are sold on a non-recourse basis.

As of March 28, 2025, there were outstanding customer invoices amounting to $7.5 million that we factored under this arrangement.

As of June 27, 2025, we had cash and cash equivalents of $327.4 million compared to $313.9 million as of December 27, 2024.

Our cash and cash equivalents, cash generated from operations, and amounts available under our revolving line of credit described below were our principal sources of liquidity as of June 27, 2025.

In the second quarter of 2025, we entered into a factoring agreement with a financial institution to sell certain accounts receivables under a non-recourse agreement.

Under the arrangement, we sell certain trade receivables on a non-recourse basis and account for the transaction as a sale of the receivables.

The financial institution assumes the full risk of collection, without recourse to the Company in the event of a loss.

As part of the factoring arrangements, we perform certain collection and administrative functions for the receivables sold.

The applicable receivables are removed from our consolidated balance sheet when the cash proceeds are received by us.

We utilize this factoring arrangement as part of our financing for working capital.

For the three and six months ended June 27, 2025, we sold accounts receivable totaling $17.8 million under this arrangement.

In addition, Fluid Solutions has an existing factoring agreement with a financial institution to sell certain accounts receivables under a non-recourse agreement.

For the three and six month periods ended June 27, 2025, we sold accounts receivable totaling $5.2 million and $11.6 million, respectively under this arrangement.

We anticipate that our existing cash and cash equivalents balance and operating cash flow will be sufficient to service our indebtedness and meet our working capital requirements and technology development projects for at least the next twelve months.

5 unchanged sentences

No assurance can be given that additional financing will be available or that, if available, such financing can be obtained on terms favorable to our stockholders and us.

As of March 28, 2025, we have cash of approximately $277.5 million in our foreign subsidiaries.

As of June 27, 2025, we have cash of approximately $227.9 million in our foreign subsidiaries.

It is not practicable to determine the tax liability that might be incurred if the undistributed earnings of these foreign subsidiaries were to be distributed.

It is the Company’s practice and intention to reinvest the earnings of its non-U.S.

subsidiaries in those operations, except for certain of its subsidiaries based in Singapore.

However, since there is no expected Singapore or U.S.

tax liability on a distribution of those earnings, the Company does not have taxes accrued for unremitted foreign earnings as of March 28, 2025.

subsidiaries in those

operations, except for certain of its subsidiaries based in Singapore and China.

There is no expected Singapore or U.S.

tax liability on a distribution of the Singapore earnings.

However, the Company has accrued taxes on the undistributed earnings of the China subsidiary in its financial statements as of June 27, 2025.

Borrowing Arrangements

4 unchanged sentences

Debt issuance costs (6.1)

At March 28, 2025, the Company had an outstanding amount under the Term Loan of $487.5 million, gross of unamortized debt issuance costs of $6.6 million.

As of March 28, 2025, the interest rate on the outstanding Term Loan was 7.6%.

As of March 28, 2025, the Company had $146.4 million, net of $3.6 million of outstanding letters of credit, available under this revolving credit facility.

As of March 28, 2025, the Company was in compliance with the financial covenants contained within the Amended Credit Agreement.

At June 27, 2025, the Company had an outstanding amount under the Term Loan of $484.5 million, gross of unamortized debt issuance costs of $6.1 million.

As of June 27, 2025, the interest rate on the outstanding Term Loan was 7.6%.

As of June 27, 2025, the Company had $146.4 million, net of $3.6 million of outstanding letters of credit, available under this revolving credit facility.

As of June 27, 2025, the Company was in compliance with the financial covenants contained within the Amended Credit Agreement.

The Company maintains credit agreements with a local bank in Czechia and with a financial institution in Israel, which provide for revolving credit facilities of up to 7.0 million euros (approximately $8.2 million) and $5.0 million, respectively.

As of March 28, 2025, there were no borrowings outstanding under these facilities.

As of March 28, 2025, the Company’s total bank debt was $480.9 million, net of unamortized debt issuance costs of $6.6 million.

As of March 28, 2025, the Company had $146.4 million, $5.0 million and $7.5 million available to draw from our credit facilities in the U.S., Israel and Czechia, respectively.

As of June 27, 2025, there were no borrowings outstanding under these facilities.

As of June 27, 2025, the Company’s total bank debt was $478.4 million, net of unamortized debt issuance costs of $6.1 million.

As of June 27, 2025, the Company had $146.4 million, $5.0 million, and 5.5 million euros (approximately $6.4 million) available to draw from its credit facilities in the U.S., Israel and Czechia, respectively.

See Note 6 - Borrowing Arrangements, of our Condensed Consolidated Financial Statements, included in Part 1 of this Form-10Q for additional information.

Capital Expenditures

Capital expenditures were $12.4 million during the three months ended March 28, 2025 and were primarily attributable to the capital invested in our manufacturing facilities worldwide.

The Company’s anticipated capital expenditures for the remainder of 2025 are expected to be financed primarily from our cash flow generated from operations and cash on hand.

Capital expenditures were $29.2 million during the six months ended June 27, 2025 and were primarily attributable to the capital invested in our manufacturing facilities worldwide.

The Company anticipates that capital expenditures for the remainder of 2025 will be financed primarily through cash flow generated from operations and cash on hand.

Contractual Obligations

The Company had commitments to various third parties to purchase inventories totaling approximately $403.6 million as of March 28, 2025.

The Company had commitments to various third parties to purchase inventories totaling approximately $407.9 million as of June 27, 2025.

In conjunction with the sale of our products in the ordinary course of business, we provide standard indemnification against certain liabilities to our customers, which may include claims of losses by their own customers resulting out of property damages, bodily injuries or deaths, or infringement of intellectual property rights by our products.

Our potential liability arising out of intellectual property infringement claims by any third party is generally uncapped.

As of March 28, 2025, we have not incurred any significant costs to defend lawsuits or settle claims related to these indemnification arrangements.

As of June 27, 2025, we have not incurred any significant costs to defend lawsuits or settle claims related to these indemnification arrangements.

As a result, we believe the estimated fair value of these arrangements is minimal.

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