Item 1. Financial Statements
ITEM 1. Financial Statements
ULTRA CLEAN HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 27,
2025 December 27,
2024
(In millions, except par value)
ASSETS
Current assets:
Cash and cash equivalents $ 327.4 $ 313.9
Accounts receivable, net of allowance for credit losses of $ 2.3 and $ 2.1 at June 27, 2025 and December 27, 2024, respectively
206.7 241.1
Inventories 375.6 381.0
Prepaid expenses and other current assets 46.1 34.1
Total current assets 955.8 970.1
Property, plant and equipment, net 336.7 325.9
Goodwill 114.2 265.3
Intangible assets, net 170.6 184.9
Deferred tax assets, net 2.8 3.1
Operating lease right-of-use assets 153.9 161.0
Other non-current assets 11.6 9.6
Total assets $ 1,745.6 $ 1,919.9
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Bank borrowings $ 10.0 $ 16.0
Accounts payable 202.2 212.5
Accrued compensation and related benefits 47.6 50.1
Operating lease liabilities 18.6 18.6
Other current liabilities 33.6 38.4
Total current liabilities 312.0 335.6
Bank borrowings, net of current portion 468.4 476.5
Deferred tax liabilities 16.2 16.1
Operating lease liabilities 151.4 149.2
Other liabilities 7.8 6.7
Total liabilities 955.8 984.1
Commitments and contingencies (See Note 9)
Equity:
UCT stockholders’ equity:
Preferred stock — $ 0.001 par value, 10.0 shares authorized; none outstanding
— —
Common stock — $ 0.001 par value, 90.0 shares authorized; 47.0 and 46.6 shares issued and 45.3 and 45.1 shares outstanding at June 27, 2025 and December 27, 2024, respectively
0.1 0.1
Additional paid-in capital 568.8 558.4
Common shares held in treasury, at cost, 1.7 and 1.5 shares at June 27, 2025 and December 27, 2024, respectively
( 48.4 ) ( 45.0 )
Retained earnings 203.4 370.4
Accumulated other comprehensive loss ( 4.5 ) ( 10.3 )
Total UCT stockholders’ equity 719.4 873.6
Noncontrolling interests 70.4 62.2
Total equity 789.8 935.8
Total liabilities and equity $ 1,745.6 $ 1,919.9
(See accompanying Notes to Condensed Consolidated Financial Statements)
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ULTRA CLEAN HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 27,
2025 June 28,
2024 June 27,
2025 June 28,
2024
(In millions, except per share amounts)
Revenues:
Products $ 454.9 $ 452.7 $ 911.9 $ 871.2
Services 63.9 63.4 125.5 122.7
Total revenues 518.8 516.1 1,037.4 993.9
Cost of revenues:
Products 393.3 383.9 783.5 738.0
Services 46.0 43.7 90.4 84.8
Total cost revenues 439.3 427.6 873.9 822.8
Gross margin 79.5 88.5 163.5 171.1
Operating expenses:
Research and development 7.8 7.1 15.4 14.1
Sales and marketing 15.5 14.8 30.5 28.5
General and administrative 46.9 43.7 95.4 88.3
Impairment of goodwill 151.1 — 151.1 —
Total operating expenses 221.3 65.6 292.4 130.9
Income (loss) from operations ( 141.8 ) 22.9 ( 128.9 ) 40.2
Interest income 0.8 1.4 1.9 2.8
Interest expense ( 10.1 ) ( 11.7 ) ( 20.0 ) ( 23.9 )
Other income (expense), net ( 2.2 ) 17.4 ( 1.3 ) 13.5
Income (loss) before provision for income taxes ( 153.3 ) 30.0 ( 148.3 ) 32.6
Provision for income taxes 7.2 8.5 14.6 18.4
Net income (loss) ( 160.5 ) 21.5 ( 162.9 ) 14.2
Less: Net income attributable to noncontrolling interests 1.5 2.4 4.1 4.5
Net income (loss) attributable to UCT $ ( 162.0 ) $ 19.1 $ ( 167.0 ) $ 9.7
Net income (loss) per share attributable to UCT common stockholders:
Basic $ ( 3.58 ) $ 0.43 $ ( 3.70 ) $ 0.22
Diluted $ ( 3.58 ) $ 0.42 $ ( 3.70 ) $ 0.21
Shares used in computing net income (loss) per share:
Basic 45.2 44.9 45.2 44.7
Diluted 45.2 45.4 45.2 45.3
(See accompanying Notes to Condensed Consolidated Financial Statements)
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ULTRA CLEAN HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
Three Months Ended Six Months Ended
June 27,
2025 June 28,
2024 June 27,
2025 June 28,
2024
(In millions)
Net income (loss) $ ( 160.5 ) $ 21.5 $ ( 162.9 ) $ 14.2
Other comprehensive income (loss):
Change in cumulative translation adjustment, net of tax 9.5 ( 2.0 ) 10.0 ( 6.3 )
Total other comprehensive income (loss) 9.5 ( 2.0 ) 10.0 ( 6.3 )
Comprehensive income (loss) ( 151.0 ) 19.5 ( 152.9 ) 7.9
Comprehensive income, attributable to noncontrolling interests 5.7 1.3 8.3 1.2
Comprehensive income (loss) attributable to UCT $ ( 156.7 ) $ 18.2 $ ( 161.2 ) $ 6.7
(See accompanying Notes to Condensed Consolidated Financial Statements)
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ULTRA CLEAN HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 27,
2025 June 28,
2024
(In millions)
Cash flows from operating activities:
Net income (loss) $ ( 162.9 ) $ 14.2
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 23.4 22.7
Amortization of intangible assets 14.3 15.3
Stock-based compensation 10.0 8.0
Amortization of debt issuance costs 1.1 1.9
Impairment of goodwill 151.1 —
Change in the fair value of financial instruments ( 0.1 ) ( 22.6 )
Deferred income taxes 0.6 ( 0.5 )
Loss on sale of property, plant and equipment 0.1 0.1
Changes in assets and liabilities:
Accounts receivable 34.3 ( 26.1 )
Inventories 5.4 ( 25.4 )
Prepaid expenses and other current assets ( 7.8 ) ( 1.5 )
Other non-current assets ( 0.5 ) 0.7
Accounts payable ( 11.9 ) 41.4
Accrued compensation and related benefits ( 2.6 ) 1.5
Income taxes payable ( 4.2 ) 1.4
Operating lease assets and liabilities 11.1 0.5
Other liabilities ( 4.0 ) 1.4
Net cash provided by operating activities 57.4 33.0
Cash flows from investing activities:
Purchases of property, plant and equipment ( 29.2 ) ( 31.0 )
Proceeds from sale of equipment 0.1 0.1
Net cash used in investing activities ( 29.1 ) ( 30.9 )
Cash flows from financing activities:
Proceeds from issuance of common stock 1.1 0.9
Principal payments on bank borrowings ( 15.1 ) ( 7.1 )
Repurchase of shares ( 3.4 ) —
Employees’ taxes paid upon vesting of restricted stock units ( 0.7 ) ( 2.2 )
Payments of dividends to a joint venture shareholder ( 0.1 ) ( 0.1 )
Proceeds from bank borrowings — 67.7
Extinguishment of bank borrowings — ( 44.2 )
Payment of debt issuance costs — ( 2.5 )
Other financing activities ( 0.6 ) —
Net cash provided by (used in) financing activities ( 18.8 ) 12.5
Effect of exchange rate changes on cash and cash equivalents 4.0 ( 2.1 )
Net increase in cash and cash equivalents 13.5 12.5
Cash and cash equivalents at beginning of period 313.9 307.0
Cash and cash equivalents at end of period $ 327.4 $ 319.5
Supplemental cash flow information:
Income taxes paid, net of income tax refunds $ 18.4 $ 17.7
Interest paid $ 18.9 $ 22.3
Non-cash investing and financing activities:
Property, plant and equipment purchased included in accounts payable and other liabilities $ 4.5 $ 4.3
(See accompanying Notes to Condensed Consolidated Financial Statements)
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ULTRA CLEAN HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
Three Months Ended
June 27, 2025
Common Stock Treasury shares
Shares
Amount Additional
Paid-in
Capital
Shares Amount
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders’
Equity of UCT
Noncontrolling
Interests
Total
Equity
(In millions)
Balance March 28, 2025 45.1 $ 0.1 $ 561.3 1.5 $ ( 45.0 ) $ 365.4 $ ( 9.8 ) $ 872.0 $ 64.8 $ 936.8
Issuance under employee stock plans 0.4 — 1.1 — — — — 1.1 — 1.1
Employees' taxes paid upon vesting of restricted stock units — — ( 0.7 ) — — — — ( 0.7 ) — ( 0.7 )
Stock-based compensation expense — — 7.1 — — — — 7.1 — 7.1
Repurchase of shares ( 0.2 ) — — 0.2 ( 3.4 ) — — ( 3.4 ) — ( 3.4 )
Dividend payments to a joint venture shareholder — — — — — — — — ( 0.1 ) ( 0.1 )
Net income (loss) — — — — — ( 162.0 ) — ( 162.0 ) 1.5 ( 160.5 )
Other comprehensive income — — — — — — 5.3 5.3 4.2 9.5
Balance June 27, 2025 45.3 $ 0.1 $ 568.8 1.7 $ ( 48.4 ) $ 203.4 $ ( 4.5 ) $ 719.4 $ 70.4 $ 789.8
Six Months Ended
June 27, 2025
Common Stock Treasury shares
Shares
Amount Additional
Paid-in
Capital
Shares Amount
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders’
Equity of UCT
Noncontrolling
Interests
Total
Equity
(In millions)
Balance December 27, 2024 45.1 $ 0.1 $ 558.4 1.5 $ ( 45.0 ) $ 370.4 $ ( 10.3 ) $ 873.6 $ 62.2 $ 935.8
Issuance under employee stock plans 0.4 — 1.1 — — — — 1.1 — 1.1
Employees' taxes paid upon vesting of restricted stock units — — ( 0.7 ) — — — — ( 0.7 ) — ( 0.7 )
Stock-based compensation expense — — 10.0 — — — — 10.0 — 10.0
Repurchase of shares ( 0.2 ) — — 0.2 ( 3.4 ) — — ( 3.4 ) — ( 3.4 )
Dividend payments to a joint venture shareholder — — — — — — — — ( 0.1 ) ( 0.1 )
Net income (loss) — — — — — ( 167.0 ) — ( 167.0 ) 4.1 ( 162.9 )
Other comprehensive income — — — — — — 5.8 5.8 4.2 10.0
Balance June 27, 2025 45.3 $ 0.1 $ 568.8 1.7 $ ( 48.4 ) $ 203.4 $ ( 4.5 ) $ 719.4 $ 70.4 $ 789.8
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Three Months Ended
June 28, 2024
Common Stock Treasury shares
Shares
Amount Additional
Paid-in
Capital
Shares Amount
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders’
Equity of UCT
Noncontrolling
Interests
Total
Equity
(In millions)
Balance March 29, 2024 44.6 $ 0.1 $ 545.0 1.5 $ ( 45.0 ) $ 337.3 $ ( 6.5 ) $ 830.9 $ 58.2 $ 889.1
Issuance under employee stock plans 0.5 — 0.9 — — — — 0.9 — 0.9
Employees' taxes paid upon vesting of restricted stock units ( 0.1 ) — ( 2.2 ) — — — — ( 2.2 ) — ( 2.2 )
Stock-based compensation expense — — 4.5 — — — — 4.5 — 4.5
Net income — — — — — 19.1 — 19.1 2.4 21.5
Dividend payments to a joint venture shareholder — — — — — — — — ( 0.1 ) ( 0.1 )
Other comprehensive loss — — — — — — ( 0.9 ) ( 0.9 ) ( 1.1 ) ( 2.0 )
Balance June 28, 2024 45.0 $ 0.1 $ 548.2 1.5 $ ( 45.0 ) $ 356.4 $ ( 7.4 ) $ 852.3 $ 59.4 $ 911.7
Six Months Ended
June 28, 2024
Common Stock Treasury shares
Shares
Amount Additional
Paid-in
Capital
Shares Amount
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders’
Equity of UCT
Noncontrolling
Interests
Total
Equity
(In millions)
Balance December 29, 2023 44.6 $ 0.1 $ 541.5 1.5 $ ( 45.0 ) $ 346.7 $ ( 4.4 ) $ 838.9 $ 58.3 $ 897.2
Issuance under employee stock plans 0.5 — 0.9 — — — — 0.9 — 0.9
Employees' taxes paid upon vesting of restricted stock units ( 0.1 ) — ( 2.2 ) — — — — ( 2.2 ) — ( 2.2 )
Stock-based compensation expense — — 8.0 — — — — 8.0 — 8.0
Net income — — — — — 9.7 — 9.7 4.5 14.2
Dividend payments to a joint venture shareholder — — — — — — — — ( 0.1 ) ( 0.1 )
Other comprehensive loss — — — — — — ( 3.0 ) ( 3.0 ) ( 3.3 ) ( 6.3 )
Balance June 28, 2024 45.0 $ 0.1 $ 548.2 1.5 $ ( 45.0 ) $ 356.4 $ ( 7.4 ) $ 852.3 $ 59.4 $ 911.7
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Table of Contents
ULTRA CLEAN HOLDINGS, INC.
INDEX TO NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Page
1. Organization and Significant Accounting Policies
10
2. Balance Sheet Information
11
3. Fair Value
12
4. Goodwill and Intangible Assets
13
5. Borrowing Arrangements
15
6. Income Tax
15
7. Retirement Plans
16
8. Commitments and Contingencies
17
9. Stockholders’ Equity and Noncontrolling Interests
17
10. Employee Stock Plans
18
11. Revenue Recognition
19
12. Leases
20
13. Net Loss Per Share
20
14. Reportable Segments
21
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Index to Notes
ULTRA CLEAN HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization — Ultra Clean Holdings, Inc., (the “Company” or “UCT”) a Delaware corporation, was founded in November 2002 and became a publicly traded company on the NASDAQ Global Market in March 2004. The Company is a leading developer and supplier of critical subsystems, components, parts, and ultra-high purity cleaning and analytical services, primarily for the semiconductor industry. UCT offers its customers an integrated outsourced solution for major subassemblies, improved design-to-delivery cycle times, design for manufacturability, prototyping and part and component manufacturing, as well as tool chamber parts cleaning and coating, and micro-contamination analytical services. The Company’s Products business primarily designs, engineers and manufactures production tools, components and parts, and modules and subsystems for the semiconductor and display capital equipment markets. Products include chemical delivery modules, frame assemblies, gas delivery systems, fluid delivery systems, precision robotics, process modules, sub-fab process equipment support racks, as well as other high-level assemblies. The Company’s Services business provides ultra-high purity parts cleaning, process tool part recoating, surface encapsulation and high sensitivity micro contamination analysis primarily for the semiconductor device makers and wafer fabrication equipment markets.
Basis of Presentation — The unaudited Condensed Consolidated Financial Statements included in this quarterly report on Form 10-Q include the accounts of the Company and its majority-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. This financial information reflects all adjustments which are, in the opinion of the Company, normal, recurring and necessary for a fair statement of the results of operations, financial position, and cash flows for the interim periods presented. Certain information and footnote disclosures normally included in our annual financial statements, prepared in accordance with U.S. GAAP, have been condensed or omitted from the interim financial statements in this Quarterly Report on Form 10-Q. Therefore, these unaudited financial statements should be read in conjunction with the Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 27, 2024.
Fiscal Year — The Company uses a 52-53 week fiscal year ending on the Friday nearest December 31. All references to quarters refer to fiscal quarters and all references to years refer to fiscal years.
Principles of Consolidation — The Company’s Condensed Consolidated Financial Statements include the accounts of the Company and its majority-owned subsidiaries and all intercompany accounts and transactions have been eliminated upon consolidation.
Significant Accounting Policies — There were no changes to the accounting policies disclosed in Note 1, Organization and Significant Accounting Polices of the Company’s Annual Report on Form 10-K for the year ended December 27, 2024 that had a material impact on the Company’s condensed consolidated financial statements and related notes.
Accounting Standards Recently Adopted
In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU No. 2023-09”). ASU No. 2023-09 enhances the transparency and usefulness of income tax disclosures by requiring consistent categories and greater disaggregation in the rate reconciliation, as well as disaggregation of income taxes paid by jurisdiction. The ASU also includes other amendments aimed at improving the effectiveness of income tax disclosures.
The Company adopted ASU No. 2023-09 prospectively in the first quarter of fiscal year 2025. The adoption did not have a material impact on the Company’s interim condensed consolidated financial statements but is expected to result in expanded annual income tax disclosures beginning with the Company’s Form 10-K for the fiscal year ending December 26, 2025.
Accounting Standards Not Yet Adopted
In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU No. 2024-03”). ASU No. 2024-03 requires entities to provide disaggregated disclosure of certain expense categories, including but not limited to, inventory purchases, employee compensation, depreciation, amortization, and depletion, within relevant income statement captions.
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Index to Notes
In January 2025, the FASB issued ASU No. 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which confirmed that the guidance in ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The guidance is to be applied prospectively, although retrospective application is allowed.
The Company is currently evaluating the impact of ASU 2024-03 and ASU 2025-01 on its financial statement disclosures.
2. BALANCE SHEET INFORMATION
Accounts Receivable Factoring Agreements
The Company has receivables factoring arrangements, pursuant to which certain receivables are sold to banks without recourse in exchange for cash. Transactions under the receivables factoring arrangements are accounted for as sales under ASC 860, Transfers and Servicing of Financial Assets, with the sold receivables removed from the Company’s balance sheet. Under these receivables factoring arrangements, the Company does not maintain any beneficial interest in the receivables sold. The banks’ purchase of eligible receivables is subject to a maximum amount of uncollected receivables. The Company services the receivables on behalf of the banks, but otherwise maintains no significant continuing involvement with respect to the receivables. Sale proceeds that are representative of the fair value of factored receivables, less a factoring fee, are reflected in cash flows from operating activities on the Consolidated Statements of Cash Flows, while sale proceeds in excess of the fair value of factored receivables are reflected in cash flows from financing activities on the Consolidated Statements of Cash Flows.
The Company currently has two active receivables factoring arrangements. One arrangement allows for the factoring of up to $ 25.0 million of uncollected receivables originated within the United States. The second arrangement allows for the factoring of up to $ 12.0 million of uncollected receivables originated within the EMEA and Asia Pacific regions. During the three and six months ended June 27, 2025, the Company received cash proceeds of $ 23.0 million and $ 29.4 million, respectively, from the sales of accounts receivables under its factoring arrangements. As of June 27, 2025, there were a total of $ 25.4 million of uncollected receivables that had been sold and removed from the Company’s Condensed Consolidated Balance Sheets.
Inventories
Inventories consisted of the following:
(In millions) June 27,
2025 December 27,
2024
Raw materials $ 202.0 $ 195.4
Work in process 122.1 130.8
Finished goods 51.5 54.8
Total $ 375.6 $ 381.0
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Index to Notes
Property, plant and equipment, net
Property, plant and equipment, net, consisted of the following:
(In millions) June 27,
2025 December 27,
2024
Land $ 6.4 $ 5.7
Buildings 55.8 52.2
Leasehold improvements 148.0 138.7
Machinery and equipment 230.3 222.4
Computer equipment and software 77.0 78.2
Furniture and fixtures 5.0 4.8
522.5 502.0
Accumulated depreciation ( 226.8 ) ( 214.0 )
Construction in progress 41.0 37.9
Total $ 336.7 $ 325.9
Capitalized interest was not significant for the six months ended June 27, 2025, or for the fiscal year ended December 27, 2024.
3. FAIR VALUE
The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following table summarizes, for assets or liabilities measured at fair value, the respective fair value and the classification by level of input within the fair value hierarchy:
Fair Value Measurement at
Reporting Date Using
Description June 27, 2025 Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant
Other Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
(In millions)
Other liabilities:
Pension obligation $ 2.5 $ — $ — $ 2.5
Fair Value Measurement at
Reporting Date Using
Description December 27, 2024 Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant
Other Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
(In millions)
Other non-current assets:
Plan assets $ 0.1 $ — $ — $ 0.1
Other liabilities:
Pension obligation $ 1.7 $ — $ — $ 1.7
Contingent earn-out $ 0.1 $ — $ — $ 0.1
The estimated fair value of pension obligation is based on expected years of service and average compensation. The valuation model used to value pension obligation utilizes mortality rate, inflation, interest rate risks and changes in the life expectancy for pensioners. These assumptions are routinely made in the appraisal process by the independent actuary resulting in a Level 3 classification. As of June 27, 2025, the Company’s aggregate pension benefit obligations was $ 14.0 million and the fair value of the pension plan assets was $ 11.5 million, resulting in underfunded pension benefit obligations of $ 2.5 million. The Company recognizes the overfunded or underfunded status of defined benefit pension plans, measured as the difference between the fair value of the plan assets and the benefit obligation. Each overfunded plan is recognized as an asset and each underfunded plan is recognized as a liability.
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Index to Notes
Prior to fiscal year 2025, the Company measured its contingent earn-out liabilities at fair value on a recurring basis using a Monte Carlo simulation model. The significant unobservable inputs used in the model included the forecasted operating profit of the acquired business during the earn-out period ending in calendar year 2025. Significant increases or decreases to the forecasted results would result in a significantly higher or lower liability, with a higher liability capped by the contractual maximum of the contingent earn-out obligation. Ultimately, the liability will be equivalent to the amount paid, and the difference between the fair value estimate and amount paid will be recorded in earnings. The amount paid that is less than or equal to the contingent earn-out liability on the acquisition date is reflected as cash used in financing activities in the consolidated statements of cash flows. Any amount paid in excess of the contingent earn-out liability on the acquisition date will be reflected as cash used in operating activities in the consolidated statements of cash flows.
In the first quarter of fiscal year 2025, the Company reassessed the fair value of the contingent earn-out associated with the acquisition of HIS, decreasing the fair value from $ 0.1 million as of December 27, 2024, to zero . The $ 0.1 million decrease was recorded as Other income (expense), net in the Condensed Consolidated Statements of Operations for the six months ended June 27, 2025. The change in fair value was primarily due to lower-than-expected financial performance. There was no change in the fair value estimate during the second quarter of fiscal year 2025.
For the three and six months ended June 28, 2024, the Company recognized gains of $ 24.1 million and $ 22.8 million, respectively, related to the change in the fair value of contingent earn-out liability. These amounts were recorded within other income (expense), net in the Condensed Consolidated Statements of Operations.
There were no transfers in or out of any level during the three and six months ended June 27, 2025 and June 28, 2024. Fair value adjustments were noncash, and therefore did not impact the Company’s liquidity or capital resources.
4. GOODWILL AND INTANGIBLE ASSETS
Goodwill
Goodwill represents the excess of the consideration transferred over the fair value of the tangible and identifiable intangible assets acquired, less the liabilities assumed in a business combination. Changes in the carrying amount of goodwill by segment during the six months ended June 27, 2025, were as follows:
(In millions) Products Services Total
Balance at December 27, 2024 $ 191.8 $ 73.5 $ 265.3
Impairment of Goodwill ( 77.6 ) ( 73.5 ) ( 151.1 )
Balance at June 27, 2025 $ 114.2 $ — $ 114.2
During the first quarter of 2025, the Company combined the HIS and Core Products reporting units following a reevaluation of its reporting structure. Impairment assessments were performed immediately before and after the change, and it was concluded that the fair values of these reporting units exceeded their carrying values on both an individual and combined basis. Following this reevaluation, the Company is organized into four reporting units: Core Products, Fluid Solutions, Fluid Delivery Systems, and Services. During the first quarter of 2025, the Company did not recognize any impairment charges or additions to goodwill.
During the second quarter of 2025, the Company experienced a sustained decline in the market price of its common stock. As a result, the Company’s market capitalization became much closer to, and at times fell below, the carrying value of its net assets. The decline in market capitalization, combined with other factors specific to each reporting unit, such as changes in market conditions and financial performance, was identified as a triggering event under ASC 350, Intangibles—Goodwill and Other, requiring the Company to perform an interim goodwill impairment test.
The Company performed a quantitative goodwill impairment test for each of its four reporting units by comparing the estimated fair value of each reporting unit to its respective carrying value. Based on the results of this assessment, goodwill impairments were identified in the Fluid Solutions and Services reporting units. As a result, the Company recorded a total goodwill impairment charge of $ 151.1 million during the second quarter of 2025, of which $ 77.6 million was attributable to the Products segment and $ 73.5 million was attributable to the Services segment. No impairments were identified in the Core Products or Fluid Delivery Systems reporting units.
For the quantitative goodwill impairment tests performed, the fair value estimates of the Company’s reporting units were derived from an income approach. Under the income approach, the Company estimated the fair value of the reporting unit based on the present value of estimated future cash flows, which the Company considers to be a Level 3 unobservable input in the fair value hierarchy. The Company 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,
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Index to Notes
industry, and market conditions. The Company based the discount rate on the weighted-average cost of capital considering Company-specific characteristics and changes in the reporting unit's projected cash flows.
Following the impairment of goodwill recorded in the second quarter of 2025, there is no goodwill recorded in the Fluid Solutions reporting unit or in the Services reporting unit. The fair values of the Core Products reporting unit and the Fluid Delivery Systems reporting unit were each substantially in excess of their respective carrying values.
Prior to testing goodwill for impairment, the Company evaluated the recoverability of its long-lived assets under ASC 360, Property, Plant, and Equipment, and determined that no impairment of long-lived assets was required.
Intangible Assets
Intangible assets are generally recorded in connection with a business acquisition. The Company evaluates the useful lives of its intangible assets each reporting period to determine whether events and circumstances require revising the remaining period of amortization. In addition, the Company reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable and evaluates indefinite-lived intangible asset for impairment annually, or more frequently if indicators of potential impairment exist. Management considers such indicators as significant differences in product demand from the estimates, changes in the competitive and economic environment, technological advances, and changes in cost structure.
Details of intangible assets were as follows:
As of June 27, 2025 As of December 27, 2024
(Dollars in millions) Useful Life
(In years) Gross
Carrying
Amount Accumulated
Amortization Carrying
Value Gross
Carrying
Amount Accumulated
Amortization Carrying
Value
Customer relationships 6 - 10
$ 207.2 $ ( 126.8 ) $ 80.4 $ 207.2 $ ( 117.4 ) $ 89.8
Recipes 20 73.2 ( 25.0 ) 48.2 73.2 ( 23.2 ) 50.0
Intellectual property/know-how 7 - 15
48.9 ( 25.0 ) 23.9 48.9 ( 22.8 ) 26.1
Tradename 4 - 6 *
32.5 ( 23.2 ) 9.3 32.5 ( 22.9 ) 9.6
Standard operating procedures 20 8.6 ( 2.9 ) 5.7 8.6 ( 2.7 ) 5.9
Developed technology 5 4.6 ( 1.5 ) 3.1 4.6 ( 1.1 ) 3.5
Total $ 375.0 $ ( 204.4 ) $ 170.6 $ 375.0 $ ( 190.1 ) $ 184.9
* The Company concluded that the asset life of UCT tradename of $ 9.0 million is indefinite and is therefore not amortized but is reviewed for impairment at least annually and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.
The Company amortizes its intangible assets on a straight-line or accelerated basis over the estimated economic life of the assets. Amortization expense was approximately $ 7.0 million and $ 14.3 million for the three and six months ended June 27, 2025, respectively. For the three and six months ended June 28, 2024, amortization expense was approximately $ 7.6 million and $ 15.3 million, respectively. Amortization expense related to recipes, standard operating procedures, developed technology and certain intellectual property/know-how is included in cost of revenues, while the remaining amortization expense is included in general and administrative expense. As of June 27, 2025, future estimated amortization expense is expected to be as follows:
(In millions) Amortization
Expense
2025 (remaining in year) $ 13.8
2026 27.2
2027 26.9
2028 23.8
2029 16.2
Thereafter 53.7
Total $ 161.6
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Index to Notes
5. BORROWING ARRANGEMENTS
On October 8, 2024, the Company entered into the Seventh Amendment to its Credit Agreement, originally dated August 27, 2018, as amended. The Seventh Amendment, among other changes, reduced the interest rate on the term loan facility by 0.25 % per annum.
The term loan facility has a maturity date of February 25, 2028. The Company pays monthly interest payments in arrears and quarterly principal payments of 0.625 % of the outstanding principal balance since October 8, 2024, with the remaining principal paid upon maturity.
The revolving credit facility has aggregate commitments of $ 150.0 million and a maturity date of August 27, 2027. The Company pays a quarterly commitment fee in arrears equal to 0.25 % of the average daily available commitment outstanding. Outstanding letters of credit reduce the availability of the revolving credit facility and, 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.
The letter of credit facility has an available commitment of $ 50.0 million and a maturity date of August 27, 2027. The Company pays a quarterly fee in arrears on the dollar equivalent of all outstanding letters of credit equal to the applicable margin for the revolving credit facility, and a fronting fee equal to 0.125 % of the undrawn and unexpired amount of each letter of credit. As of June 27, 2025, the Company had $ 3.6 million of outstanding letters of credit and $ 46.4 million of available commitments remaining under the letter of credit facility.
Under the Credit Agreement, the Company may elect that the Term Loan bear interest at a rate per annum equal to either (a) “ABR” (as defined in the Credit Agreement), plus the applicable margin or (b) the “Term SOFR” (as defined in the Credit Agreement), plus the applicable margin. The applicable margin for the Term Loan is equal to a rate per annum equal to either (i) at any time that the Company’s corporate family rating is Ba3 (with a stable outlook) or higher from Moody’s and BB- (with a stable outlook) or higher from S&P, (x) 3.00 % for such Term SOFR loans and (y) 2.00 % for such ABR term loans or (ii) at all other times, (x) 3.25 % for such Term SOFR loans and (y) 2.25 % for such ABR term loans. Interest on the Term Loan is payable on (1) in the case of such ABR term loans, the last day of each calendar quarter and (2) in the case of such Term SOFR loans, the last day of each relevant interest period and, in the case of any interest period longer than three months, on each successive date three months after the first day of such interest period.
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 %.
The Credit Agreement requires the Company to maintain certain financial covenants including a minimum consolidated fixed charge coverage ratio and a maximum consolidated leverage ratio as of the last day of any fiscal quarter. The Company currently has no revolving loans outstanding under the Credit Agreement. As of June 27, 2025, the Company was in compliance with the financial covenants contained within the 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 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.
The fair value of the Company’s long-term debt is based on Level 2 inputs, and was determined using quoted prices for similar instruments in inactive markets. The Company’s carrying value approximates fair value for the Company’s long-term debt.
6. INCOME TAX
The Company’s effective tax rate was ( 4.7 )% and 28.3 % for the three months ended June 27, 2025 and June 28, 2024, respectively, and ( 9.8 )% and 56.4 % for the six months ended June 27, 2025 and June 28, 2024, respectively.
The Company recorded income tax provision of $ 7.2 million and $ 8.5 million for the three months ended June 27, 2025 and June 28, 2024, respectively, and $ 14.6 million and $ 18.4 million for the six months ended June 27, 2025 and June 28, 2024, respectively.
The change in respective tax rates reflects primarily reflects the goodwill impairment booked in the second quarter of fiscal year 2025, 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
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Index to Notes
management continuously evaluates the need for a valuation allowance and, as of June 27, 2025, concluded that a full valuation allowance on its U.S. federal and state and certain of its foreign deferred tax assets was still appropriate.
As of June 27, 2025 and December 27, 2024, the Company’s gross liability for unrecognized tax benefits, excluding interest, was $ 5.0 million and $ 2.3 million, respectively. Increases or decreases to interest and penalties on uncertain tax positions are included in the income tax provision in the Condensed Consolidated Statements of Operations. Although it is possible that some of the unrecognized tax benefits could be settled within the next twelve months, the Company cannot reasonably estimate the outcome at this time.
The Organization for Economic Co-operation and Development and the G20 Inclusive Framework on Base Erosion and Profit Shifting (the “Inclusive Framework”) have put forth Pillar Two proposals that ensure a minimal level of taxation. Several countries in which the Company operates have adopted legislation to implement the Inclusive Framework’s global corporate minimum tax rate of fifteen percent. This legislation became effective in certain jurisdictions the Company operates in for the current fiscal year, ending December 26, 2025. Based on the Company’s current analysis of the enacted Pillar Two provisions and transitional safe harbor provisions, Pillar Two will not have a significant impact on the Company's financial statements for fiscal year 2025.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law enacting significant changes to U.S. tax and related laws. Some of the provisions of the new tax law affecting corporations include, but are not limited to, expensing of domestic research expenses, increasing the limit of the deduction of interest expense deduction to thirty percent of EBITDA, and one hundred percent bonus depreciation on eligible property acquired after January 19, 2025. The Company is currently evaluating the impact the new tax law will have on its financial condition and results of operations. Preliminarily, the Company does not anticipate a material change to its effective income tax rate and its net deferred income tax assets as the Company maintains a full valuation allowance for all U.S. deferred tax assets. The impact of the tax law changes from the OBBBA will be included in the Company’s financial statements beginning in the three months ending September 30, 2025.
7. RETIREMENT PLANS
Defined Benefit Plans
Cinos Korea has a noncontributory defined benefit pension plan covering substantially all of its employees upon their retirement. The Company’s entities in Israel also have noncontributory defined benefit pension plans covering their employees upon their retirement. The benefits for these plans are based on expected years of service and average compensation. The net period costs are recognized as employees render the services necessary to earn the postretirement benefits. The Company records annual amounts relating to the pension plan based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, assumed rates of return, compensation increases and turnover rates. The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current and expected rates of return and trends when it is appropriate to do so. The effect of modifications to those assumptions is recorded in accumulated other comprehensive income and amortized to net periodic cost over future periods using the corridor method. The Company believes that the assumptions utilized in recording its obligations under the plans are reasonable based on its experience and market conditions.
As of June 27, 2025, the benefit obligation of the plans was $ 14.0 million and the fair value of the benefit plan assets was $ 11.5 million which are invested in several fixed deposit accounts with financial institutions. As of June 27, 2025, the underfunded balance of the plans of $ 2.5 million has been recorded by the Company and is included in other liabilities.
Amounts recognized in accumulated other comprehensive income (loss) and contributions made for the three and six months ended June 27, 2025 and June 28, 2024 were negligible.
As of June 27, 2025, the Company’s future estimated payment obligations for the respective fiscal years are as follows:
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Index to Notes
(In millions)
2025 $ 1.6
2026 1.8
2027 2.8
2028 1.4
2029 1.3
Thereafter 12.3
Total $ 21.2
Employee Savings and Retirement Plan
The Company sponsors a 401(k) savings and retirement plan (the “401(k) Plan”) for all U.S. employees who meet certain eligibility requirements. Participants can elect to contribute to the 401(k) Plan, on a pre-tax basis, up to 25 % of their salary to a maximum of the IRS limit. The Company matches 50.0 % of each employee's contribution, up to a maximum of 6 % of the employee’s eligible earnings. The Company made discretionary employer contributions to its 401(k) Plan of $ 0.9 million and $ 1.9 million for the three and six months ended June 27, 2025, respectively, and $ 0.9 million and $ 1.9 million for the three and six months ended June 28, 2024, respectively.
8. COMMITMENTS AND CONTINGENCIES
Commitments
The Company leases real estate and equipment under various non-cancelable operating leases.
Contingencies
From time to time, the Company is subject to various legal proceedings and claims, either asserted or unasserted, that arise in the ordinary course of business. Although the outcome of the various legal proceedings and claims individually or in the aggregate cannot be predicted with certainty, the Company has not had a history of outcomes to date that have been material to the Condensed Consolidated Statements of Operations and does not believe that any of these proceedings or other claims will have a material adverse effect on its consolidated financial condition, results of operations or cash flows.
9. STOCKHOLDERS’ EQUITY AND NONCONTROLLING INTERESTS
Treasury Stock
On October 20, 2022, the Board of Directors approved a share repurchase program authorizing the Company to purchase up to an aggregate of $ 150 million of the Company’s common stock over a three-year period.
For the three and six months ended June 27, 2025, approximately 0.2 million shares were repurchased under this program with aggregate cost of $ 3.4 million. No shares were repurchased under this program for the three and six months ended June 28, 2024.
As of June 27, 2025, 1.5 million shares had been repurchased under the program and they are held in treasury stock. The Company records treasury stock using the cost method. The Company may reissue these treasury shares as part of its stock-based compensation programs.
Non-controlling Interests
The Company owns part of the outstanding shares of Cinos Korea, a South Korean company that provides outsourced cleaning and recycling of precision parts for the semiconductor industry through its operating facilities in South Korea and through a partial interest in Cinos China.
The carrying value of the remaining interest held by another shareholder in Cinos Korea and the remaining interest in Cinos China are presented as noncontrolling interests in the accompanying Condensed Consolidated Financial Statements. Noncontrolling interests are calculated based on minority ownership percentages, representing the proportionate share of net assets in the balance sheet and net income (loss) in the income statement.
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Index to Notes
10. EMPLOYEE STOCK PLANS
Employee Stock Plans
The Company grants stock awards in the form of restricted stock units (“RSUs”) and performance stock units (“PSUs”) to its employees as part of the Company’s long-term equity compensation plan. These stock awards are granted to employees with a unit purchase price of zero dollars and typically vest over three years , subject to the employee’s continued service with the Company and, in the case of PSUs, subject to achieving certain performance goals and market conditions. The Company also grants common stock to its board members in the form of restricted stock awards (“RSAs”), which vest on the earlier of the next Annual Shareholder Meeting, or 365 days from date of grant. The aggregate number of shares authorized for issuance under the plan is 1.3 million.
Stock-based compensation expense includes compensation costs related to estimated fair values of awards granted. The estimated fair value of the Company’s equity-based awards is amortized on a straight-line basis over the awards’ vesting period and is adjusted for performance as it relates to PSUs.
The following table shows the Company’s stock-based compensation expense included in the Condensed Consolidated Statements of Operations:
Three Months Ended Six Months Ended
(In millions) June 27,
2025 June 28,
2024 June 27,
2025 June 28,
2024
Cost of revenues (1) $ 0.3 $ 0.4 $ 0.7 $ 0.8
Research and development 0.1 0.1 0.2 0.1
Sales and marketing 0.4 0.6 0.9 1.0
General and administrative 6.3 3.4 8.2 6.1
Total stock-based compensation $ 7.1 $ 4.5 $ 10.0 $ 8.0
(1) Stock-based compensation expense capitalized in inventory for the three and six months ended June 27, 2025 and June 28, 2024 were immaterial.
For the three and six months ended June 27, 2025, 0.7 million and 0.8 million RSUs were granted with a weighted average fair value of $ 22.12 and $ 22.35 per share, respectively. For the three and six months ended June 28, 2024, 451 thousand and 475 thousand RSUs were granted with a weighted average fair value of $ 41.32 and $ 41.47 per share, respectively.
For the three and six months ended June 27, 2025, 98 thousand PSUs were granted with fair value of $ 2.2 million, while 125 thousand PSUs were granted for the three and six months ended June 28, 2024, with a fair value of $ 5.8 million.
For the six months ended June 27, 2025, 1 thousand RSAs were granted with a weighted fair value of $ 24.96 per share. For the three and six months ended June 28, 2024 26 thousand RSAs were granted with a weighted fair value of $ 46.17 per share.
The following table summarizes the Company’s combined RSU, PSU and RSA activity for the six months ended June 27, 2025:
(In millions) Number of
Shares Aggregate
Intrinsic
Value
Outstanding at December 27, 2024 1.4 $ 52.0
Granted 0.9
Vested ( 0.4 )
Forfeited ( 0.3 )
Outstanding at June 27, 2025 1.6 $ 35.3
Expected to vest at June 27, 2025 1.5 $ 35.1
As of June 27, 2025, approximately $ 36.0 million of unrecognized stock-based compensation cost related to employee and director awards remains to be amortized on a straight-line basis over a weighted average period of 2.1 years, and will be adjusted for subsequent changes in future grants.
Under the current PSU program, performance goals are set at the time of grant and performance is reviewed at the end of a three-year period. The percentage to be applied to each participant’s target award ranges from zero to 200 %, based upon the extent to which the financial performance goals are achieved. If specific performance threshold levels for the financial
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Index to Notes
goals are met on an annual basis, the amount earned for that element will be applied to one-third of the participant’s PSU award granted to determine the number of total units earned.
Recipients of PSU awards generally must remain employed by the Company on a continuous basis through the end of the three-year performance period in order to receive any amount of the PSUs covered by that award. In events such as death, disability or retirement, the recipient may be entitled to pro-rata amounts of PSUs as defined in the Plan. Target shares subject to PSU awards do not have voting rights of common stock until earned and issued following the end of the three-year performance period.
Employee Stock Purchase Plan
The ESPP permits employees to purchase common stock at a discount through payroll withholdings at certain specified dates (purchase period) within a defined offering period. The purchase price is 85 % of the fair market value of the common stock at the end of the purchase period and is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. The aggregate number of shares authorized for issuance under the plan is 1.1 million.
During the three and six months ended June 27, 2025. 72 thousand shares were issued under the ESPP. The Company recorded $ 0.2 million and $ 0.4 million of expense related to ESPP for the three and six months ended June 27, 2025
During the three and six months ended June 28, 2024, 42 thousand shares were issued under the ESPP. The Company recorded $ 0.2 million and $ 0.3 million of expense related to ESPP for the three and six months ended June 28, 2024.
11. REVENUE RECOGNITION
Revenue is recognized when the Company satisfies the performance obligations as evidenced by the transfer of control of the promised goods or services to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.
The Company sells its products and services primarily to customers in the semiconductor capital equipment industry. The Company’s revenues are highly concentrated and therefore highly dependent upon a small number of customers. Typical payment terms with our customers range from thirty to sixty days .
The Company’s Products business segment provides warranty on its products for a period of up to two years and provides for warranty costs at the time of sale based on historical activity. Determination of the warranty reserve requires the Company to make estimates of product return rates and expected costs to repair or replace the products under warranty. If actual return rates and/or repair and replacement costs differ significantly from these estimates, adjustments to recognize additional cost of revenues may be required in future periods. The warranty reserve is included in other current liabilities on the Condensed Consolidated Balance Sheets and is not considered significant.
The Company’s products are manufactured and services provided at the Company’s locations throughout the Americas, Asia Pacific and Europe and the Middle East (“EMEA”). Sales to customers are initiated through a purchase order and are governed by our standard terms and conditions, written agreements, or both. Revenue is recognized when performance obligations under the terms of an agreement with a customer are satisfied; generally, this occurs with the transfer of control of the products or when the Company provides the services. Based on the enforceable rights included in our agreements or prevailing terms and conditions, products produced by the Company without an alternative use are not protected by an enforceable right of payment that includes a reasonable profit throughout the duration of the agreement. Consignment sales are recognized in revenue at the earlier of the period that the goods are consumed or after a period of time subsequent to receipt by the customer as specified by terms of the agreement, provided control of the promised goods or services has transferred.
Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Sales, value-added, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. Certain of our customers may receive cash-based incentives, such as rebates or credits, which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. As of June 27, 2025, the total unpaid rebates amounted to $ 1.8 million, of which $ 1.1 million was recorded as a reduction to accounts receivable, and $ 0.7 million was recorded within accounts payable. Accruals for unpaid customer rebates of $ 2.3 million as of December 27, 2024, were netted against accounts receivable. The Company’s disaggregated revenues are apportioned by segments within the Company’s Condensed Consolidated Statement of Operations. Certain services performed by the Company related to products sold to customers are included in Products revenue in the Condensed Consolidated Statement of Operations. These services are not material for any of the periods presented.
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Index to Notes
The Company’s principal markets include Americas, Asia Pacific and EMEA. The Company’s foreign operations are conducted primarily through its subsidiaries in China, Czechia, Israel, Malaysia, Singapore, South Korea, Taiwan, and the United Kingdom. Revenues by geographic area are categorized based on the customer’s location to which the products were shipped or services were performed. The following table sets forth revenue by geographic area (in millions):
Three Months Ended Six Months Ended
June 27,
2025 June 28,
2024 June 27,
2025 June 28,
2024
Singapore $ 179.0 $ 168.9 $ 382.7 $ 326.1
United States 134.6 146.2 257.6 287.1
Austria 49.3 45.2 95.4 82.8
China 47.8 59.6 81.1 114.5
South Korea 28.1 24.7 57.9 48.3
Malaysia 18.4 10.1 39.7 50.4
Taiwan 12.0 21.6 25.2 37.1
Others 49.6 39.8 97.8 47.6
Total $ 518.8 $ 516.1 $ 1,037.4 $ 993.9
The Company’s most significant customers (having individually accounted for 10% or more of revenues) are from Products segment and their related revenues as a percentage of total revenues were as follows:
Three Months Ended Six Months Ended
June 27,
2025 June 28,
2024 June 27,
2025 June 28,
2024
Lam Research Corporation 32.7 % 31.7 % 34.4 % 31.6 %
Applied Materials, Inc. 23.3 22.8 23.0 22.8
Total 56.0 % 54.5 % 57.4 % 54.4 %
As of June 27, 2025, gross accounts receivable from Lam Research Corporation exceeded 10% of the Company's total gross accounts receivable, representing approximately 13.9 % of the total.
Three customers’ gross accounts receivable balances, Applied Materials, Inc., Lam Research Corporation and ASML Holding NV were individually greater than 10% of gross accounts receivable as of December 27, 2024, and were in the aggregate approximately 41.9 % of total gross accounts receivable.
12. LEASES
The Company leases land, offices, facilities and equipment in locations throughout the United States, Asia Pacific and EMEA.
13. NET LOSS PER SHARE
Potential common shares from employee stock plans totaling 1.4 million and 1.3 million for the three and six months ended June 27, 2025, respectively, were excluded from the computation of diluted loss per share as their effect would have been antidilutive. The Company did not have any significant antidilutive securities excluded from the calculation of diluted earnings per share for the three and six months ended June 28, 2024.
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Index to Notes
The table below presents the calculation of basic and diluted loss per share:
Three Months Ended Six Months Ended
(In millions, except share amounts) June 27,
2025 June 28,
2024 June 27,
2025 June 28,
2024
Numerator:
Net income (loss) attributable to UCT $ ( 162.0 ) $ 19.1 $ ( 167.0 ) $ 9.7
Denominator:
Shares used in computation — basic:
Basic weighted average common shares outstanding 45.2 44.9 45.2 44.7
Shares used in computation — diluted:
Weighted average common shares outstanding 45.2 44.9 45.2 44.7
Effect of potential dilutive securities:
Employee stock plans — 0.5 — 0.6
Diluted weighted average common shares outstanding 45.2 45.4 45.2 45.3
Net income (loss) per share attributable to UCT:
Basic $ ( 3.58 ) $ 0.43 $ ( 3.70 ) $ 0.22
Diluted $ ( 3.58 ) $ 0.42 $ ( 3.70 ) $ 0.21
14. REPORTABLE SEGMENTS
The Company’s Chief Executive Officer is the Company’s chief operating decision maker (CODM). The CODM primarily uses income from operations to evaluate each segment’s performance and allocate resources, primarily through periodic budgeting and segment performance reviews. Significant expenses within segment operating profit include cost of revenue, research and development, and selling, general and administrative expenses, which are each separately presented on the Company’s Condensed Consolidated Statements of Operations.
The Company’s reportable segments are determined based on the nature of their revenue streams and the Company’s internal organization structure.
The Company prepared financial results based on two operating segments (Products and Services) and two reportable segments (Products and Services).
The following table describes each segment:
Segment Product or Services Primary Markets Served Geographic Areas
Products Assembly
Weldments
Machining
Fabrication Semiconductor Americas
Asia Pacific
EMEA
Services Cleaning
Analytics
Coating Semiconductor Americas
Asia Pacific
EMEA
The CODM uses segment operating profit or loss to evaluate performance and to allocate capital resources. Segment operating profit or loss is defined as a segment’s income or loss from continuing operations before interest and other income (expense), net and provision for income taxes. Any intercompany sales and associated profit (and any other intercompany items) are eliminated from segment results.
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Index to Notes
Segment Data
Three Months Ended Six Months Ended
(In millions) June 27,
2025 June 28,
2024 June 27,
2025 June 28,
2024
Revenues:
Products $ 454.9 $ 452.7 $ 911.9 $ 871.2
Services 63.9 63.4 125.5 122.7
Total segment revenues $ 518.8 $ 516.1 $ 1,037.4 $ 993.9
Cost of revenues:
Products $ 393.3 $ 383.9 $ 783.5 $ 738.0
Services 46.0 43.7 90.4 84.8
Total segment cost of revenues $ 439.3 $ 427.6 $ 873.9 $ 822.8
Gross profit:
Products $ 61.6 $ 68.8 $ 128.4 $ 133.2
Services 17.9 19.7 35.1 37.9
Total segment gross profit $ 79.5 $ 88.5 $ 163.5 $ 171.1
Operating expenses:
Products
Research and development 5.4 4.6 10.5 9.1
Sales and marketing 12.7 12.2 24.7 23.1
General and administrative 36.8 33.2 76.3 67.5
Impairment of goodwill 77.6 — 77.6 —
Total Products operating expenses 132.5 50.0 189.1 99.7
Services
Research and development 2.4 2.4 4.9 4.8
Sales and marketing 2.8 2.7 5.7 5.4
General and administrative 10.1 10.5 19.2 21.0
Impairment of goodwill 73.5 — 73.5 —
Total Services operating expenses 88.8 15.6 103.3 31.2
Total segment operating expenses $ 221.3 $ 65.6 $ 292.4 $ 130.9
Segment operating profit (loss):
Products $ ( 70.9 ) $ 18.8 $ ( 60.7 ) $ 33.5
Services ( 70.9 ) 4.1 ( 68.2 ) 6.7
Total segment operating profit (loss) $ ( 141.8 ) $ 22.9 $ ( 128.9 ) $ 40.2
Reconciliation of segment operating profit (loss):
Total segment operating profit $ ( 141.8 ) $ 22.9 $ ( 128.9 ) $ 40.2
Interest income $ 0.8 $ 1.4 $ 1.9 $ 2.8
Interest expense $ ( 10.1 ) $ ( 11.7 ) $ ( 20.0 ) $ ( 23.9 )
Other income (expense), net $ ( 2.2 ) $ 17.4 $ ( 1.3 ) $ 13.5
Income (loss) before provision for income taxes $ ( 153.3 ) $ 30.0 $ ( 148.3 ) $ 32.6
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Index to Notes
Expenditures for segment property, plant and equipment
Products $ 9.7 $ 8.3 $ 18.8 $ 20.0
Services 7.1 4.7 10.3 11.0
Total expenditures for segment assets $ 16.8 $ 13.0 $ 29.1 $ 31.0
Depreciation and amortization
Products $ 12.5 $ 12.6 $ 25.1 $ 25.7
Services 6.2 6.2 12.6 12.3
Total depreciation and amortization $ 18.7 $ 18.8 $ 37.7 $ 38.0
(In millions) June 27,
2025 December 27,
2024
Assets
Products $ 1,468.6 $ 1,657.0
Services 277.0 262.9
Total segment assets $ 1,745.6 $ 1,919.9
Long-lived assets comprised of operating lease right-of-use assets and property, plant and equipment, net, are reported based on the location of the asset. The carrying amount of long-lived assets in United States, Malaysia, Israel, South Korea and other foreign countries were $ 176.4 million, $ 83.7 million, $ 75.4 million, $ 54.5 million and $ 100.6 million, respectively as of June 27, 2025, and $ 176.9 million, $ 83.2 million, $ 75.2 million, $ 49.8 million and $ 101.8 million, respectively as of December 27, 2024.
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Table of Contents
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.