What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-04 compared with 2024-08-06 · 103 added, 84 removed, 240 unchanged (44% of the section changed)

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Department of Defense (DoD).

For the six months ended June 28, 2024 and June 30, 2023, the Company had total revenue of $2.1 billion and $1.9 billion, respectively, the substantial majority of which was derived from U.S.

For the nine months ended September 27, 2024 and September 29, 2023, the Company had total revenue of $3.2 billion and $2.9 billion, respectively, the substantial majority of which was derived from U.S.

government customers.

For the six months ended June 28, 2024 and June 30, 2023, we generated approximately 43% and 41%, respectively, of our total revenue from the U.S.

For the nine months ended September 27, 2024 and September 29, 2023, we generated approximately 42% and 41%, respectively, of our total revenue from the U.S.

Executive Summary

Our revenue increased $94.3 million, or 9.6%, for the three months ended June 28, 2024 as compared to the three months ended June 30, 2023.

Revenue increased primarily due to organic growth for legacy programs.

Revenue from our programs in the Middle East, Asia and the U.S.

increased by $82.0 million, $19.1 million, and $0.4 million, respectively, partially offset by a decrease in revenue from our programs in Europe of $7.2 million, during the three months ended June 28, 2024 as compared to the three months ended June 30, 2023.

Our revenue increased $80.1 million, or 8.0%, for the three months ended September 27, 2024 as compared to the three months ended September 29, 2023.

Revenue increased primarily due to organic growth on legacy programs and new program performance.

Revenue from our programs in the Middle East, the U.S., and Asia increased by $40.6 million, $33.5 million, and $19.6 million, respectively, partially offset by a decrease in revenue from our programs in Europe of $13.6 million, during the three months ended September 27, 2024 as compared to the three months ended September 29, 2023.

During the performance of long-term contracts, estimated final contract prices and costs are reviewed periodically, and revisions are made as required, which are recorded as changes in revenue and cost of revenue in the periods in which they are determined.

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These changes can increase or decrease operating income depending on the dynamics of each contract.

Further details related to consolidated financial results for the three and six months ended June 28, 2024, compared to the three and six months ended June 30, 2023, are contained in the "Discussion of Financial Results" section.

Further details related to consolidated financial results for the three and nine months ended September 27, 2024, compared to the three and nine months ended September 29, 2023, are contained in the "Discussion of Financial Results" section.

Significant Contracts

The following table reflects contracts that accounted for more than 10% of total revenue:

The following table reflects the contract that accounted for more than 10% of total revenue:

% of Total Revenue

Six Months Ended

June 28, June 30,

Nine Months Ended

September 27, September 29,

Contract Name 2024 2023

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The task ord er provides services to support the Geographical Combatant Commands and Army Service Component Commands throughout the full range of military operations in the Kuwait region.

The LOGCAP V - Kuwait Task Order contributed $218.5 million a nd $257.1 million of revenue for the six months ended June 28, 2024 and June 30, 2023 , respectively.

The LOGCAP V - Kuwait Task Order contributed $328.8 million a nd $360.5 million of revenue for the nine months ended September 27, 2024 and September 29, 2023 , respectively.

Total backlog includes remaining performance obligations, consisting of both funded backlog (firm orders for which funding is contractually authorized and appropriated by the customer) and unfunded backlog (firm orders for which funding is not currently contractually obligated by the customer and unexercised contract options).

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The following is a summary of funded and unfunded backlog:

June 28, December 31,

September 27, December 31,

(In millions) 2024 2023

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Funded orders (different from funded backlog) represent orders for which funding was received during the period.

We received funded orders of $2.1 billion during the six months ended June 28, 2024, which was a decrease of $0.3 billion compared to the six months ended June 30, 2023.

We received funded orders of $3.4 billion during the nine months ended September 27, 2024, which was a decrease of $0.1 billion compared to the nine months ended September 29, 2023.

Economic Opportunities, Challenges and Risks

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government's Fiscal Year (FY) begins on October 1 and ends on September 30.

On March 23, 2024, the President signed into law the Further Consolidated Appropriations Act for FY 2024, which provides $825 billion in funding for the DoD, through September 30, 2024.

On March 23, 2024, the President signed into law the Further Consolidated Appropriations Act for FY 2024, which provided $825 billion in funding for the DoD, through September 30, 2024.

On April 24, 2024, the President signed a bill providing $95 billion in additional supplemental funding for Ukraine, Israel and the Indo-Pacific region.

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Congress on March 11, 2024, and requested $895 billion for National Defense, with $850 billion of the total allocated to the DoD.

Congress, over the coming months, will need to approve or revise the Fiscal 2025 budget request through enactment of appropriations and other legislation, which would require final approval from the President to become law.

The Fiscal 2025 budget has not yet been approved by Congress.

On September 26, 2024, the President signed into law a Continuing Resolution (CR) that funds U.S.

government operations in FY 2025 at FY 2024 levels through December 20, 2024.

The timing and approval of FY 2025 appropriations remains uncertain and over the coming months, Congress will need to approve or revise the Fiscal 2025 budget request through enactment of appropriations and other legislation, which would require final approval from the President to become law.

Government operations under an extended CR could have potential impacts on the timing and award of new programs and contracts.

We anticipate the federal budget will continue to be subject to debate and compromise shaped by, among other things, heightened political tensions and the 2024 elections, the global security environment, inflationary pressures, and macroeconomic conditions.

The result may be shifting funding priorities, which could have material impacts on defense spending broadly and our programs.

In January 2023, the statutory debt ceiling limit of $31.4 trillion was reached and on June 3, 2023, the President signed “The Fiscal Responsibility Act” (FRA) into law, which suspends the debt ceiling until January 1, 2025.

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The $95 billion in additional supplemental funding described above is not subject to the FRA caps.

We believe the federal and DoD budget will be shaped by many factors including economic, political, and security conditions.

The result may be shifting funding priorities, which could impact DoD spending and our programs.

While it is difficult to predict the specific course of future defense budgets, V2X believes the core functions the Company performs are mission-essential and spending to maintain readiness, improve performance, increase service life, lower cost, and modernize digital and physical environments will continue to be a U.S.

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Further, given the current level of inflation and geopolitical factors, the Company is monitoring the impact of rising costs on its active and future contracts and its financial results, and actively evaluating opportunities for cost reductions and deleveraging.

In recent quarters of 2023, the Company’s cost-plus and cost-reimbursable contracts have been increasing sequentially as a percentage of total contract mix and revenue.

Continuing the 2023 trend, in 2024 the Company's cost-plus and cost reimbursable contracts as a percentage of total contract mix and revenue have increased as compared to the year ended 2023.

The Company’s earnings and profitability may vary materially depending on the total mix of contracts.

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Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and updated, as necessary, on subsequent Quarterly Reports on Form 10-Q, and the matters identified under the caption “Forward-Looking Statement Information" herein.

Secondary Public Offering

On September 4, 2024, we entered into an underwriting agreement (the Underwriting Agreement), by and among the Company, Vertex Aerospace Holdco LLC (the Selling Stockholder) and Goldman Sachs & Co.

LLC, Morgan Stanley & Co.

LLC and Robert W.

Incorporated, as representatives to several underwriters named therein (the Underwriters), relating to the public offering of 2,000,000 shares of common stock by the Selling Stockholder (the Secondary Offering) and up to 300,000 additional shares of common stock (the Option Shares) by the Selling Stockholder at the Underwriters’ option at any time on or before the 30th day after the date of the Underwriting Agreement (the Option, and together with the Secondary Offering, the Offering).

The Secondary Offering closed on September 6, 2024.

The Company did not sell any securities in the Secondary Offering and did not receive any proceeds from the sale of the shares offered by the Selling Stockholder.

On September 11, 2024, the Underwriters notified the Company and the Selling Stockholder that they had elected to exercise the Option in full.

The offering of the Option Shares closed on September 12, 2024.

All of the Option Shares were sold by the Selling Stockholder.

The Company did not receive any of the proceeds from the sale of the Option Shares by the Selling Stockholder in the offering.

During the three months ended September 27, 2024, we incurred costs of $0.6 million in connection with the Offering.

These costs are included within selling, general, and administrative expenses on our Condensed Consolidated Statement of Income (Loss).

DISCUSSION OF FINANCIAL RESULTS

Three months ended June 28, 2024, compared to three months ended June 30, 2023

Three months ended September 27, 2024, compared to three months ended September 29, 2023

Selected financial highlights are presented in the following table:

Three Months Ended Change

June 28, June 30,

September 27, September 29,

(In thousands, except for percentages) 2024 2023 $ %

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Operating margin 4.6 % 2.1 %

Loss on extinguishment of debt (1,998) — (1,998) *

Interest expense, net (27,152) (30,252) 3,100 (10.2) %

Other expense, net (3,198) (2,024) (1,174) 58.0 %

(Loss) income from operations before income taxes (8,114) 2,009 (10,123) (503.9) %

Income (loss) from operations before income taxes 19,537 (11,237) 30,774 (273.9) %

% of revenue 1.8 % (1.1) %

Income tax (benefit) expense (1,570) 210 (1,780) (847.6) %

Income tax expense (benefit) 4,486 (4,837) 9,323 (192.7) %

Effective income tax rate 23.0 % 43.0 %

Net (loss) income $ (6,544) $ 1,799 $ (8,343) (463.8) %

*Percentage change is not meaningful.

Revenue increased $94.3 million, or 9.6%, for the three months ended June 28, 2024 as compared to the three months ended June 30, 2023.

Revenue increased primarily due to organic growth for legacy programs.

Revenue from our programs in the Middle East, Asia, and the U.S.

increased by $82.0 million, $19.1 million, and $0.4 million, respectively, partially offset by a decrease in revenue from our programs in Europe of $7.2 million.

Net income (loss) $ 15,051 $ (6,400) $ 21,451 (335.2) %

Revenue increased $80.1 million, or 8.0%, for the three months ended September 27, 2024 as compared to the three months ended September 29, 2023.

Revenue increased primarily due to organic growth on legacy programs and new program performance.

Revenue from our programs in the Middle East, the U.S., and Asia, increased by $40.6 million, $33.5 million, and $19.6 million, respectively, partially offset by a decrease in revenue from our programs in Europe of $13.6 million.

Cost of Revenue

Cost of revenue increased $107.9 million, or 12.1%, for the three months ended June 28, 2024 as compared to the three months ended June 30, 2023, primarily driven by increases in revenue and changes in contract mix.

Cost of revenue increased $59.4 million, or 6.4%, for the three months ended September 27, 2024 as compared to the three months ended September 29, 2023, primarily driven by increases in revenue and changes in contract mix.

Selling, General, & Administrative (SG&A) Expenses

SG&A expenses decreased $6.7 million, or 12.7%, for the three months ended June 28, 2024 as compared to the three months ended June 30, 2023, primarily due to cost optimization and lower integration-related costs.

SG&A expenses decreased $8.1 million, or 16.3%, for the three months ended September 27, 2024 as compared to the three months ended September 29, 2023, primarily due to cost optimization and lower integration-related costs.

Operating Income

Operating income decreased $6.8 million, or 20.0%, for the three months ended June 28, 2024 as compared to the three months ended June 30, 2023.

Operating income as a percentage of revenue was 2.6% for the three months ended June 28, 2024, compared to 3.5% for the three months ended June 30, 2023, primarily driven by changes in aggregate cumulative adjustments and contract mix, partially offset by decreased SG&A expenses.

Aggregate cumulative adjustments increased operating income by $0.7 million and $9.1 million for the three months ended June 28, 2024 and June 30, 2023, respectively.

The aggregate cumulative adjustments for the three months ended June 28, 2024 and June 30, 2023 related to changes in contract terms, program performance, customer changes in scope of work and changes to estimates in the reported period.

Loss on Extinguishment of Debt

A loss on extinguishment of debt of $2.0 million was recorded for the three months ended June 28, 2024 due to a refinancing of the First Lien Credit Agreement.

Six months ended June 28, 2024, compared to six months ended June 30, 2023

Operating income increased $28.8 million, or 137.1%, for the three months ended September 27, 2024 as compared to the three months ended September 29, 2023.

Operating income as a percentage of revenue was 4.6% for the three months ended September 27, 2024, compared to 2.1% for the three months ended September 29, 2023, primarily driven by changes in aggregate cumulative adjustments, along with decreased SG&A expenses.

Aggregate cumulative adjustments increased operating income by $17.3 million and $5.0 million for the three months ended September 27, 2024 and September 29, 2023, respectively.

The aggregate cumulative adjustments for the three months ended September 27, 2024 and September 29, 2023 related to changes in contract terms, program performance, customer changes in scope of work and changes to estimates in the reported period.

Nine months ended September 27, 2024, compared to nine months ended September 29, 2023

Selected financial highlights are presented in the following table:

Six Months Ended Change

June 28, June 30,

Nine Months Ended Change

September 27, September 29,

(In thousands, except for percentages) 2024 2023 $ %

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Other expense, net (9,566) (2,335) (7,231) 309.7 %

Loss from operations before income taxes (6,990) (21,208) 14,218 (67.0) %

Income (loss) from operations before income taxes 12,547 (32,445) 44,992 (138.7) %

% of revenue 0.4 % (1.1) %

Income tax benefit (1,590) (5,527) 3,937 (71.2) %

Income tax expense (benefit) 2,896 (10,364) 13,260 (127.9) %

Effective income tax rate 23.1 % 31.9 %

Net loss $ (5,400) $ (15,681) $ 10,281 (65.6) %

Revenue increased $161.4 million, or 8.4%, for the six months ended June 28, 2024 as compared to the six months ended June 30, 2023.

Revenue increased primarily due to organic growth for legacy programs.

Revenue from programs located in the Middle East and Asia increased by $144.2 million and $23.6 million, respectively, partially offset by a decrease in revenue from programs located in the U.S.

and Europe of $3.7 million and $2.7 million, respectively.

Net income (loss) $ 9,651 $ (22,081) $ 31,732 (143.7) %

Revenue increased $241.6 million, or 8.3%, for the nine months ended September 27, 2024 as compared to the nine months ended September 29, 2023.

Revenue increased primarily due to organic growth on legacy programs and new program performance.

Revenue from programs located in the Middle East, Asia, and the U.S.

increased by $184.8 million, $43.2 million, and $29.8 million, respectively, partially offset by a decrease in revenue from programs located in Europe of $16.2 million.

Cost of Revenue

Cost of revenue increased $183.6 million, or 10.5%, for the six months ended June 28, 2024 as compared to the six months ended June 30, 2023, primarily driven by increases in revenue and changes in contract mix.

Cost of revenue increased $242.9 million, or 9.0%, for the nine months ended September 27, 2024 as compared to the nine months ended September 29, 2023, primarily driven by increases in revenue and changes in contract mix.

Selling, General, & Administrative (SG&A) Expenses

SG&A expenses decreased $15.0 million, or 14.8%, for the six months ended June 28, 2024 as compared to the six months ended June 30, 2023 primarily due to cost optimization and lower integration-related costs.

SG&A expenses decreased $23.1 million, or 15.3%, for the nine months ended September 27, 2024 as compared to the nine months ended September 29, 2023 primarily due to cost optimization and lower integration-related costs.

Operating Income

Operating income decreased $7.1 million, or 10.9%, for the six months ended June 28, 2024 as compared to the six months ended June 30, 2023.

Operating income as a percentage of revenue was 2.8% for the six months ended June 28, 2024, compared to 3.4% for the six months ended June 30, 2023.

The decrease in operating income was primarily driven by changes in aggregate cumulative adjustments and contract mix, partially offset by decreased SG&A expenses.

Aggregate cumulative adjustments increased operating income by $1.2 million and $22.2 million for the six months ended June 28, 2024 and June 30, 2023, respectively.

The aggregate cumulative adjustments for the six months ended June 28, 2024 and June 30, 2023 related to changes in contract terms, program performance, customer changes in scope of work and changes to estimates in the reported period.

Interest (Expense) Income, Net

Interest (expense) income, net for the three and six months ended June 28, 2024 and June 30, 2023 was as follows:

Three Months Ended Change Six Months Ended Change

June 28, June 30, June 28, June 30,

Operating income increased $21.8 million, or 25.3%, for the nine months ended September 27, 2024 as compared to the nine months ended September 29, 2023.

Operating income as a percentage of revenue was 3.4% for the nine months ended September 27, 2024, compared to 2.9% for the nine months ended September 29, 2023.

The increase in operating income was primarily driven by decreased SG&A expenses.

Aggregate cumulative adjustments increased operating income by $18.5 million and $27.2 million for the nine months ended September 27, 2024 and September 29, 2023, respectively.

The aggregate cumulative adjustments for the nine months ended September 27, 2024 and September 29, 2023 related to changes in contract terms, program performance, customer changes in scope of work and changes to estimates in the reported period.

Interest Expense, Net

Interest expense, net for the three and nine months ended September 27, 2024 and September 29, 2023 was as follows:

Three Months Ended Change Nine Months Ended Change

September 27, September 29, September 27, September 29,

(In thousands, except for percentages) 2024 2023 $ % 2024 2023 $ %

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Interest expense is related to borrowings under our senior secured credit facilities, with the amortization of debt issuance costs, and derivative instruments used to hedge a portion of exposure to interest rate risk.

Interest expense, net decreased $7.3 million for the six months ended June 28, 2024 compared to the six months ended June 30, 2023 due to both a decrease in our debt balance in the first half of 2024 compared to the first half of 2023, and our interest rate swap contracts, which we entered into at the end of the first quarter of 2023.

Interest expense, net decreased $10.4 million for the nine months ended September 27, 2024 compared to the nine months ended September 29, 2023 due to both a decrease in our debt balance, and our interest rate swap contracts.

Other Expense, Net

During the three and six months ended June 28, 2024, we incurred purchase discount fees and other expenses of $2.5 million and $4.2 million, respectively, related to the sale of accounts receivable through the MARPA Facility.

In addition, during the three and six months ended June 28, 2024, we incurred a $2.2 million impairment charge on a non-operating, long-lived asset, primarily due to a decreased fair market value.

During the three and six months ended June 30, 2023, we incurred purchase discount fees and other expenses of $0.2 million and $0.1 million, respectively, related to the sale of accounts receivable through the MARPA Facility.

Income Tax Benefit

We recorded income tax benefits of $1.6 million and an income tax provision of $0.2 million for the three months ended June 28, 2024 and June 30, 2023, respectively.

Our effective income tax rates for the three months ended June 28, 2024 and June 30, 2023, were 19.3% and 10.5%, respectively.

For the six months ended June 28, 2024 and June 30, 2023, the Company recorded income tax benefits of $1.6 million and $5.5 million, representing effective income tax rates of 22.7% and 26.1%, respectively.

During the three and nine months ended September 27, 2024, we incurred purchase discount fees and other expenses of $3.2 million and $7.4 million, respectively, related to the sale of accounts receivable through the MARPA Facility.

In addition, during the nine months ended September 27, 2024, we incurred a $2.2 million impairment charge on a non-operating, long-lived asset, primarily due to a decreased fair market value.

During the three and nine months ended September 29, 2023, we incurred purchase discount fees and other expenses of $2.0 million and $2.1 million, respectively, related to the sale of accounts receivable through the MARPA Facility.

Income Tax Expense (Benefit)

We recorded an income tax provision of $4.5 million and income tax benefits of $4.8 million for the three months ended September 27, 2024 and September 29, 2023, respectively.

Our effective income tax rates for the three months ended September 27, 2024 and September 29, 2023, were 23.0% and 43.0%, respectively.

For the nine months ended September 27, 2024 and September 29, 2023, the Company recorded an income tax provision of $2.9 million and income tax benefits of $10.4 million, representing effective income tax rates of 23.1% and 31.9%, respectively.

The effective income tax rates vary from the federal statutory rate of 21.0% mainly due to state and foreign taxes, disallowed compensation deduction under Internal Revenue Code Section 162(m), offset by available deductions not reflected in book income, and income tax credits.

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We cannot provide assurance that such financing will be available on acceptable terms or that such financing will be available at all.

As of June 28, 2024, there were $46.0 million of outstanding borrowings and $17.8 million of outstanding letters of credit under the 2023 Revolver.

As of September 27, 2024, there were $15.9 million of outstanding letters of credit under the 2023 Revolver.

Unamortized deferred financing costs related to the 2023 Revolver of $3.4 million are included in other non-current assets in the Condensed Consolidated Balance Sheets.

As of June 28, 2024, the fair value of the 2023 Revolver approximated the carrying value because the debt bears a floating interest rate.

As of June 28, 2024, the carrying value of the 2023 Term Loan portion was $242.2 million, excluding unamortized deferred financing costs of $1.8 million.

The estimated fair value of the 2023 Term Loan as of June 28, 2024 was $242.5 million.

As of September 27, 2024, the fair value of the 2023 Revolver approximated the carrying value because the debt bears a floating interest rate.

As of September 27, 2024, the carrying value of the 2023 Term Loan portion was $242.2 million, excluding unamortized deferred financing costs of $1.7 million.

The estimated fair value of the 2023 Term Loan as of September 27, 2024 was $242.3 million.

The fair value is based on observable inputs of interest rates that are currently available to us for debt with similar terms and maturities for non-public debt.

As of September 27, 2024, the carrying value of the First Lien Credit Agreement was $904.3 million, excluding deferred discount and unamortized deferred financing costs of $31.0 million.

The estimated fair value of the First Lien Credit Agreement as of September 27, 2024 was $903.2 million.

The fair value is based on observable inputs of interest rates that are currently available to us for debt with similar terms and maturities for non-public debt (Level 2).

The cash presented on the Condensed Consolidated Balance Sheets consists of U.S.

and international cash from wholly owned subsidiaries.

Approximately $36.6 million of our $44.8 million in cash, cash equivalents and restricted cash as of June 28, 2024 is held by foreign subsidiaries and is not available to fund U.S.

Approximately $19.8 million of our $59.9 million in cash, cash equivalents and restricted cash as of September 27, 2024 is held by foreign subsidiaries and is not available to fund U.S.

operations unless repatriated.

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We determine our DSO by calculating the number of days necessary to exhaust our ending accounts receivable balance based on our most recent historical revenue.

DSO was 65 and 58 days as of June 28, 2024 and December 31, 2023, respectively.

The following table sets forth net cash (used in) provided by operating activities, investing activities and financing activities:

Six Months Ended

June 28, June 30,

DSO was 61 and 58 days as of September 27, 2024 and December 31, 2023, respectively.

The following table sets forth net cash provided by (used in) operating activities, investing activities and financing activities:

Nine Months Ended

September 27, September 29,

(in thousands) 2024 2023

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Foreign exchange 1

(2,416) 1,252

Net change in cash, cash equivalents and restricted cash $ (12,794) $ (37,808)

1 Impact on cash balances due to changes in foreign exchange rates.

Net cash used in operating activities for the six months ended June 28, 2024 primarily consisted of net cash outflows in working capital accounts of $198.9 million, net cash outflows in other long-term assets and liabilities of $26.6 million and net loss of $5.4 million, partially offset by cash inflows from the sale of receivables through the MARPA Facility of $121.9 million and cash inflows from non-cash net income items of $77.5 million.

Net cash provided by operating activities for the six months ended June 30, 2023 , primarily consisted of cash inflows from non-cash net income items of $104.3 million and sales of accounts receivable through the MARPA Facility of $113.0 million, partially offset by net cash outflows in working capital accounts of $123.5 million and a net loss of $15.7 million.

Net cash used in investing activities for the six months ended June 28, 2024 consisted of $16.9 million for the acquisition of businesses and $8.5 million of capital expenditures for the purchase of software and hardware, vehicles and equipment related to ongoing operations.

Net cash used in investing activities for the six months ended June 30, 2023 consisted of $11.5 million of capital expenditures for the purchase of software and hardware, vehicles and equipment related to ongoing operations.

Net cash provided by financing activities during the six months ended June 28, 2024 consisted of proceeds from the revolver of $648.8 million , partially offset by revolver repayments of $602.8 million , payments for employee withholding taxes on share-based compensation of $5.8 million , repayments of long-term debt of $7.7 million, and payments for debt issuance costs of $1.2 million .

Net cash used in financing activities during the six months ended June 30, 2023 consisted of repayments of long-term debt of $424.9 million, revolver repayments of $467.8 million, payments for employee withholding taxes on share-based compensation of $14.6 million, and payments for debt issuance costs of $7.5 million, partially offset by proceeds from long term debt and the revolver of $250.0 million and $552.8 million, respectively.

Net cash provided by operating activities for the nine months ended September 27, 2024 primarily consisted of cash inflows from non-cash net income items of $110.8 million, cash inflows from the sale of receivables through the MARPA Facility of $70.7 million and net income of $9.7 million, partially offset by net cash outflows in working capital accounts of $119.7 million and net cash outflows in other long-term assets and liabilities of $40.3 million.

Net cash provided by operating activities for the nine months ended September 29, 2023 , primarily consisted of cash inflows from non-cash net income items of $140.7 million , cash inflows from the sale of receivables through the MARPA Facility of $87.9 million, partially offset by net cash outflows in working capital accounts of $44.1 million, net cash outflows in other long-term assets and liabilities of $25.8 million, and a net loss of $22.1 million.

Net cash used in investing activities for the nine months ended September 27, 2024 consisted of $16.9 million for the acquisition of businesses and $10.7 million of capital expenditures for the purchase of software and hardware, vehicles and equipment related to ongoing operations.

Net cash used in investing activities for the nine months ended September 29, 2023 consisted of $16.6 million of capital expenditures for the purchase of software and hardware, vehicles and equipment related to ongoing operations.

Net cash used in financing activities during the nine months ended September 27, 2024 consisted of revolver repayments of $1.0 billion, payments for employee withholding taxes on share-based compensation of $8.0 million, repayments of long-term debt of $7.7 million, and payments for debt issuance costs of $1.2 million, partially offset by proceeds from the revolver of $1.0 billion.

Net cash used in financing activities during the nine months ended September 29, 2023 consisted of repayments of long-term debt of $428.8 million, revolver repayments of $669.8 million, payments for employee withholding taxes on share-based compensation of $17.9 million, and payments for debt issuance costs of $7.5 million, partially offset by proceeds from long term debt and the revolver of $250.0 million and $719.8 million, respectively.

Capital Resources

As of June 28, 2024, we held cash, cash equivalents and restricted cash of $44.8 million, which included $36.6 million held by foreign subsidiaries, and had $436.2 million of available borrowing capacity under the 2023 Revolver, which expires on February 25, 2028.

We believe that our cash, cash equivalents and restricted cash as of June 28, 2024, as supplemented by operating cash flows, the 2023 Revolver, and the MARPA Facility will be sufficient to fund our anticipated operating costs, capital expenditures, and current debt repayment obligations for at least the next 12 months.

As of September 27, 2024, we held cash, cash equivalents and restricted cash of $59.9 million, which included $19.8 million held by foreign subsidiaries, and had $484.1 million of available borrowing capacity under the 2023 Revolver, which expires on February 25, 2028.

We believe that our cash, cash equivalents and restricted cash as of September 27, 2024, as supplemented by operating cash flows, the 2023 Revolver, and the MARPA Facility will be sufficient to fund our anticipated operating costs, capital expenditures, and current debt repayment obligations for at least the next 12 months.

Contractual Obligations

As of June 28, 2024, commitments to make future payments under long-term contractual obligations were as follows:

As of September 27, 2024, commitments to make future payments under long-term contractual obligations were as follows:

Payments Due by Period

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Total $ 1,679,887 $ 111,961 $ 241,207 $ 381,812 $ 944,907

¹ Includes unused funds fee and is based on the June 28, 2024 interest rate and outstanding balance.

¹ Includes unused funds fee and is based on the September 27, 2024 interest rate and outstanding balance.

CRITICAL ACCOUNTING POLICIES, ESTIMATES AND JUDGMENTS

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changes in GAAP;

the impact of the U.S.

November 2024 presidential and congressional elections;

and other factors described in Part I, "Item 1A.

1 unchanged sentence

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