What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-10-29 compared with 2025-07-29 · 127 added, 120 removed, 165 unchanged (60% 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.

As discussed in Note 4, Goodwill and Intangible Assets Goodwill to our condensed consolidated financial statements, we performed a quantitative goodwill impairment assessment in the second quarter of 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.

10 unchanged sentences

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 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

The fiscal quarters ended September 26, 2025 and September 27, 2024 were both 13-week periods.

Discussion of Results of Operations for the Three and Nine months ended September 26, 2025 compared to the Three and Nine months ended September 27, 2024

Three Months Ended Nine Months Ended

Revenues by Segment

(Dollars in millions)

2025 June 28,

Change June 27,

2025 June 28,

September 26,

2025 September 27,

Change September 26,

2025 September 27,

Products $ 445.0 $ 479.0 (7.1) % $ 1,356.9 $ 1,350.2 0.5 %

3 unchanged sentences

Services as a percentage of total revenues 12.7 % 11.4 % 12.3 % 12.0 %

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.

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

For the three-month period ended September 26, 2025, Products revenue decreased compared to the same period in the prior year.

The decrease was primarily driven by lower customer demand, reflecting a temporary slowdown in customer purchasing activity in response to short-term market conditions.

For the nine-month period ended September 26, 2025, Products revenue was flat compared to the same period in the prior year, reflecting the broadly consistent year over year state of the semiconductor industry.

Service revenues for the three and nine-month periods ended September 26, 2025, increased compared to the same periods in the prior year, primarily driven by higher demand across its customer base.

Three Months Ended Nine Months Ended

Revenues by Geography

(Dollars in millions)

2025 June 28,

Change June 27,

2025 June 28,

September 26,

2025 September 27,

Change September 26,

2025 September 27,

United States $ 120.6 $ 145.6 (17.2) % $ 378.2 $ 432.7 (12.6) %

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 and six months ended June 27, 2025, U.S.

For the three and nine months ended September 26, 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 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.

to international locations.

As a result, international revenues as a percentage of total revenues increased compared to the same periods in the prior year.

Cost of Revenues

Three Months Ended Six Months Ended

Three Months Ended Nine Months Ended

Cost of revenues by Segment

(Dollars in millions)

2025 June 28,

Change June 27,

2025 June 28,

September 26,

2025 September 27,

Change September 26,

2025 September 27,

Products $ 380.4 $ 403.3 (5.7) % $ 1,163.9 $ 1,141.2 2.0 %

4 unchanged sentences

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

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.

For the three-month period ended September 26, 2025, Cost of Products revenues decreased by $22.9 million compared to the same period in the prior year.

The decrease was primarily driven by lower sales volumes, which led to a $23.3 million reduction in material costs, partially offset by higher restructuring-related costs and increased tariffs and duties.

For the nine-month period ended September 26, 2025, Cost of Products revenues increased by $22.7 million compared to the same period in the prior year.

Although product revenues were relatively flat, the increase in cost was primarily due to changes in product mix, which led to a $10.8 million increase in material costs.

The remaining increase was attributable to higher overhead costs associated with increased production activity, as well as restructuring activities, tariffs and duties.

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

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

For the three and nine-month periods ended September 26, 2025, Services Cost of revenues increased by $3.7 million and $9.2 million, respectively, compared to the same periods in the prior year.

The increase for the three-month period was driven by higher sales, which resulted in increased headcount, overtime, and employee-related expenses at a specific location, as well as higher restructuring-related activities.

The increase for the nine-month period was driven by a higher volume of service orders, and increases in headcount, overtime and employee-related expenses for a specific location, resulting in a $5.8 million in additional costs, as well as higher overhead costs and restructuring-related activities.

Three Months Ended Nine Months Ended

Gross Profit by Segment

(Dollars in millions)

2025 June 28,

Change June 27,

2025 June 28,

September 26,

2025 September 27,

Change September 26,

2025 September 27,

Products $ 64.6 $ 75.7 (14.7) % $ 193.0 $ 209.0 (7.7) %

6 unchanged sentences

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

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.

Products gross profit and gross margin decreased for the three and nine-month periods ended September 26, 2025 compared to the same periods in the prior year, primarily due to higher employee and restructuring-related costs, as well as increased duties and tariffs.

Services gross profit and gross margin decreased for the three and nine-month periods ended September 26, 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 Six Months Ended

Three Months Ended Nine Months Ended

Operating Profit by Segment

(Dollars in millions)

2025 June 28,

Change June 27,

2025 June 28,

September 26,

2025 September 27,

Change September 26,

2025 September 27,

Products $ 7.9 $ 22.4 (64.7) % $ (52.8) $ 55.9 (194.5) %

5 unchanged sentences

Total Company 2.1 % 4.7 % (7.6 %) 4.3 %

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.

Operating profit and operating margin for both Products and Services decreased for the three and nine-month periods ended September 26, 2025 compared to the same periods in the prior year.

The decline for the for the three-month period was due to higher employee-related expenses, including costs associated with involuntary separations and a voluntary retirement program, each a part of the Company’s ongoing restructuring efforts, as well as increases in duties and tariffs.

The decline for the for the nine-month period was primarily driven by the goodwill impairment recorded in the second quarter of fiscal year 2025, and 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 Six Months Ended

(Dollars in millions) June 27,

2025 June 28,

Change June 27,

2025 June 28,

Three Months Ended Nine Months Ended

(Dollars in millions) September 26,

2025 September 27,

Change September 26,

2025 September 27,

Research and development $ 7.8 $ 7.1 9.9 % $ 23.2 $ 21.2 9.4 %

Research and development as a percentage of total revenues 1.5 % 1.3 % 1.5 % 1.4 %

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.

Research and development expenses increased for both the three and nine-month periods ended September 26, 2025 compared to the same periods in the prior year.

The increase in the current period was primarily driven by higher employee-related expenses, including costs associated with involuntary separations and a voluntary retirement program, each a part of the Company’s ongoing restructuring efforts.

Sales and Marketing

Three Months Ended Six Months Ended

(Dollars in millions) June 27,

2025 June 28,

Change June 27,

2025 June 28,

Three Months Ended Nine Months Ended

(Dollars in millions) September 26,

2025 September 27,

Change September 26,

2025 September 27,

Sales and marketing $ 15.1 $ 14.4 4.9 % $ 45.5 $ 42.9 6.1 %

Sales and marketing as a percentage of total revenues 3.0 % 2.7 % 2.9 % 2.8 %

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.

Sales and marketing expenses increased for both the three and nine-month periods ended September 26, 2025 compared to the same periods in the prior year.

The increase was primarily driven by higher restructuring-related costs, including expenses associated with involuntary separations and a voluntary retirement program.

General and Administrative

Three Months Ended Six Months Ended

(Dollars in millions) June 27,

2025 June 28,

Change June 27,

2025 June 28,

Three Months Ended Nine Months Ended

(Dollars in millions) September 26,

2025 September 27,

Change September 26,

2025 September 27,

General and administrative $ 48.7 $ 46.7 4.3 % $ 144.1 $ 135.1 6.7 %

General and administrative as a percentage of total revenues 9.5 % 8.6 % 9.3 % 8.8 %

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.

General and administrative expenses increased $2.0 million and $9.0 million in the three and nine-month periods ended September 26, 2025 compared to the same periods in the prior year.

The increase in the three-month period ended September 26, 2025 was primarily driven by an increase severance payments due to restructuring activities, including both involuntary separations and a voluntary retirement program.

The increase in the nine-month period ended September 26, 2025 was primarily driven by increase in stock-based compensation, a separation payment made to the prior 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,

Three Months Ended Nine Months Ended

(Dollars in millions) September 26,

2025 September 27,

Change September 26,

2025 September 27,

Impairment of Goodwill $ — $ — 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.

Impairment of goodwill represents a non-cash charge of $151.1 million recorded in the second quarter of 2025, as the fair values of our Fluid Solutions and Services reporting units were determined to be below their carrying amounts.

No impairment charges were recorded for the three-month period ended September 26, 2025.

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 Six Months Ended

(Dollars in millions) June 27,

2025 June 28,

Change June 27,

2025 June 28,

Three Months Ended Nine Months Ended

(Dollars in millions) September 26,

2025 September 27,

Change September 26,

2025 September 27,

Interest income $ 1.1 $ 1.1 — % $ 3.0 $ 3.9 (23.1) %

1 unchanged sentence

Other income (expense), net $ (1.2) $ (4.1) (70.7) % $ (2.5) $ 9.3 (126.9) %

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.

Interest income decreased in the nine-month period ended September 26, 2025 compared to the same period in the prior year due to lower interest earning balances.

Interest expense decreased for the three and nine-month periods ended September 26, 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 ended September 26, 2025 was primarily comprised of $1.1 million debt modification related costs.

In the prior period, the Company recognized an $0.8 million loss related to the fair value adjustment of the contingent earn-out from the HIS acquisition, as well as unrealized foreign exchange losses of $3.5 million.

Other income (expense), net, for the nine-month period was primarily comprised of unrealized foreign exchange losses of $3.4 million and $1.0 million debt modification related costs offset by government grants received of $2.2 million.

In the prior period, the Company recognized a $22.0 million gain related to the fair value adjustment of the contingent earn-out from the HIS acquisition which was partially offset by unrealized foreign exchange losses of $8.7 million and debt modification costs of $3.6 million.

Provision for Income Taxes

Three Months Ended Six Months Ended

(Dollars in millions) June 27,

2025 June 28,

Change June 27,

2025 June 28,

Three Months Ended Nine Months Ended

(Dollars in millions) September 26,

2025 September 27,

Change September 26,

2025 September 27,

Provision for income taxes $ 8.7 $ 9.9 (12.1) % $ 23.3 $ 28.2 (17.4) %

Effective tax rate 1450.0 % 97.1 % -15.8 % 66.0 %

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 decrease in the provision for income taxes for the three and nine-month periods ended September 26, 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 tax provision for the three and nine months ended September 26, 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 are no longer permanently reinvested.

As a result, the Company 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.

Company management continuously evaluates the need for a valuation allowance on its deferred tax assets and, as of September 26, 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) June 27,

(In millions) September 26,

2025 December 27,

2 unchanged sentences

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

Six Months Ended

(In millions) June 27,

2025 June 28,

Nine Months Ended

(In millions) September 26,

2025 September 27,

Operating activities $ 57.5 $ 47.9

4 unchanged sentences

Our primary cash inflows and outflows were as follows:

• 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.

• For the nine-month period ended September 26, 2025, we generated cash from operating activities of $57.5 million compared to $47.9 million for the same period in the prior year.

The $9.6 million increase in net cash provided by operating activities was primarily driven by a $20.2 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:

• The major contributors in net changes in operating assets and liabilities for the nine-month period ended September 26, 2025 were as follows:

◦ Accounts receivable decreased $41.6 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 $10.2 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.

Prepaid expenses and

other current assets increased by $6.3 million due to advance payments and prepayments related to various expenses.

◦ Accounts payable decreased $22.8 million, other liabilities by $4.6 million, and income tax payable by $12.1 million, as a result of elevated prepayment activity.

• Net cash used in investing activities during the nine-month periods ended September 26, 2025 and September 27, 2024 consisted primarily of $40.2 million and $46.2 million purchases of property, plant and equipment, respectively.

During the nine months ended September 26, 2025, we received an asset-related government grant amounting to $2.9 million.

• During the nine month period ended September 26, 2025, cash used in financing activities was $22.3 million compared to $8.8 million cash provided in the same period in the prior year.

The $31.1 million increase in net cash used by financing activities was primarily due to $23.5 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 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.

As of September 26, 2025, we had cash and cash equivalents of $314.1 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 September 26, 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.

4 unchanged sentences

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.

For the three and nine-months ended September 26, 2025, we sold accounts receivable totaling $21.5 million and $39.3 million, respectively, 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.

For the nine-month period ended September 26, 2025, we sold accounts receivable totaling $11.6 million under this arrangement, and no accounts receivable were sold during the three month period ended September 26, 2025.

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

As of September 26, 2025, we have cash of approximately $250.3 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 and China.

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.

However, the Company has accrued taxes on a portion of the undistributed earnings of the China subsidiary in its financial statements as of September 26, 2025.

Borrowing Arrangements

The following table summarizes our borrowings:

September 26,

(Dollars in millions) Amount

2 unchanged sentences

Debt issuance costs (5.1)

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.

At September 26, 2025, the Company had an outstanding amount under the Term Loan of $481.5 million, gross of unamortized debt issuance costs of $5.1 million.

As of September 26, 2025, the interest rate on the outstanding Term Loan was 6.9%.

As of September 26, 2025, the Company had $146.6 million, net of $3.4 million of outstanding letters of credit, available under this revolving credit facility.

As of September 26, 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 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.

As of September 26, 2025, there were no borrowings outstanding under these facilities.

As of September 26, 2025, the Company’s total bank debt was $476.4 million, net of unamortized debt issuance costs of $5.1 million.

As of September 26, 2025, the Company had $146.6 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 $29.2 million during the six months ended June 27, 2025 and were primarily attributable to the capital invested in our manufacturing facilities worldwide.

Capital expenditures were $40.2 million during the nine months ended September 26, 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 $407.9 million as of June 27, 2025.

The Company had commitments to various third parties to purchase inventories totaling approximately $463.0 million as of September 26, 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 June 27, 2025, we have not incurred any significant costs to defend lawsuits or settle claims related to these indemnification arrangements.

As of September 26, 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