What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-04 compared with 2025-05-05 · 121 added, 75 removed, 223 unchanged (47% of the section changed)

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The Company operates as one segment and offers a broad suite of capabilities including multi-domain high impact readiness, integrated supply chain management, mission solutions, and platform renewal and modernization to national security, defense, civilian and international customers.

Our primary customer is the U.S.

Department of Defense (DoD).

For both the three months ended March 28, 2025 and March 29, 2024, the Company had total revenue of $1.0 billion, the substantial majority of which was derived from U.S.

Our primary customer is the DoD.

For both the six months ended June 27, 2025 and June 28, 2024, the Company had total revenue of $2.1 billion, the substantial majority of which was derived from U.S.

government customers.

For the three months ended March 28, 2025 and March 29, 2024, the Company generated approximately 44% and 43%, respectively, of our total revenue from the U.S.

For both the six months ended June 27, 2025 and June 28, 2024, we generated approximately 43% of our total revenue from the U.S.

Executive Summary

Our revenue increased $5.4 million, or 0.5%, for the three months ended March 28, 2025 as compared to the three months ended March 29, 2024, primarily due to organic growth.

Our revenue increased $6.1 million, or 0.6%, for the three months ended June 27, 2025 as compared to the three months ended June 28, 2024.

Revenue increased primarily due to the conclusion of a non-recurring contractual commitment.

Revenue from our programs in the U.S.

and Asia increased by $32.8 million and $7.2 million, respectively, partially offset by decreases in revenue from our programs in the Middle East and Europe of $25.0 million and $9.6 million, respectively.

Operating income for the three months ended March 28, 2025 was $34.3 million, an increase of $4.0 million or 13.1%, compared to the three months ended March 29, 2024.

Operating income increased primarily due to changes in aggregate cumulative adjustments, as further described below.

and Europe increased by $53.4 million and $1.3 million, respectively, partially offset by a decrease in revenue from our programs in the Middle East and Asia of $40.7 million and $7.9 million, respectively, during the three months ended June 27, 2025 as compared to the three months ended June 28, 2024.

Operating income for the three and six months ended June 27, 2025 was $52.9 million and $87.2 million, respectively, an increase of $25.5 million and $29.5 million, or 93.0% and 51.0%, respectively, compared to the three and six months ended June 28, 2024.

Operating income increased primarily due to the conclusion of a non-recurring contractual commitment, decreased Selling, General, & Administrative (SG&A) expenses, changes in aggregate cumulative adjustments and favorable contract mix.

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 months ended March 28, 2025, compared to the three months ended March 29, 2024, are contained in the "Discussion of Financial Results" section.

Further details related to consolidated financial results for the three and six months ended June 27, 2025, compared to the three and six months ended June 28, 2024, are contained in the "Discussion of Financial Results" section.

Significant Contracts

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% of Total Revenue

Three Months Ended

March 28, March 29,

Six Months Ended

June 27, June 28,

Contract Name 2025 2024

Logistics Civil Augmentation Program (LOGCAP) V - Kuwait Task Order 10.9% 10.5%

T-45 10.1% 7.9%

Revenue associated with a contract will fluctuate based on increases or decreases in the work being performed on the contract, award fee payment assumptions, and other contract modifications within the term of the contract resulting in changes to the total contract value.

The LOGCAP V - Kuwait Task Order is currently exercised through June 30, 2025, with one additional twelve-month option and one six-month option through December 31, 2026.

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 $116.9 million a nd $110.7 million of revenue for the three months ended March 28, 2025 and March 29, 2024 , respectively.

The LOGCAP V - Kuwait Task Order is currently exercised through June 30, 2026.

On April 17, 2025, the U.S.

Department of the Army announced that it will extend the current period of performance for the various task orders under the LOGCAP V, including the Kuwait Task Order, which is scheduled to extend through June 2030.

The T-45 contract is currently exercised through December 31, 2025, with three additional twelve-month options and one six-month option through June 30, 2029.

The contract provides services to support and maintain all Navy T-45 aircraft, aircraft systems, and related support equipment in support of flight, test and evaluation operations.

The T-45 contract contributed $103.0 million and $79.4 million of revenue for the three months ended March 28, 2025 and March 29, 2024, 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).

Total backlog excludes potential orders under IDIQ contracts and contracts awarded to us that are being protested by competitors with the GAO or in the COFC.

The value of the backlog is based on anticipated revenue levels over the anticipated life of the contract.

Actual values may be greater or less than anticipated.

Total backlog is converted into revenue as work is performed.

The level of order activity related to programs can be affected by the timing of government funding authorizations and their project evaluation cycles.

The Kuwait 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 $229.1 million a nd $218.5 million of revenue for the six months ended June 27, 2025 and June 28, 2024 , respectively.

Backlog represents revenue we expect to recognize in the future as work is performed for remaining performance obligations for our contracts.

Backlog includes funded amounts (funding is contractually authorized and appropriated by the customer) and unfunded amounts (amounts not currently contractually obligated by the customer).

Total backlog excludes potential orders under IDIQ contracts and contracts awarded to us that are being protested by competitors with the GAO or in the COFC for which a stop work order has been received by the Company.

Actual backlog values may vary due to the level of order activity related to programs, the timing of government funding authorizations or de-obligations of funding.

Year-over-year comparisons could, at times, be impacted by these factors, among others.

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The following is a summary of funded and unfunded backlog:

March 28, December 31,

June 27, December 31,

(In millions) 2025 2024

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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 $984.4 million during the three months ended March 28, 2025, which was an increase of $124.0 million compared to the three months ended March 29, 2024.

We received funded orders of $2.2 billion during the six months ended June 27, 2025, which was an increase of $0.1 billion compared to the six months ended June 28, 2024.

Economic Opportunities, Challenges and Risks

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However, government operations under the FY 2025 CR could have potential impacts on the timing and award of new programs and contracts.

The Administration’s FY 2026 budget request is expected to be submitted to Congress in the coming months and will kick off the FY 2026 defense authorization and appropriations legislative process.

The Administration recently submitted the FY 2026 budget request to Congress, kicking off the defense authorization and appropriations legislative process.

The DoD FY 2026 budget request is approximately $962 billion, including both discretionary appropriations and mandatory funding contained in the One Big Beautiful Bill Act (OBBBA).

The OBBBA was signed into law by the President on July 4th, 2025, and allocates approximately $150 billion in appropriations to support defense and national security priorities.

Of the $150 billion in OBBBA appropriations, approximately $113 billion is mandatory funding aligned to the FY 2026 DoD budget.

Congress will need to approve or revise the FY 2026 budget request through enactment of appropriations and other legislation, which would require final approval from the President to become law.

See Note 9, Income Taxes , in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion relating to the OBBBA.

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

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

Additionally, the Administration is assessing government-wide procurement, staffing, and support activities, including the evaluation of mission priorities, acquisition methods, contract performance, and other factors, which could result in potential actions.

Additionally, the Administration continues to assess government-wide procurement, staffing, and support activities, including the evaluation of mission priorities, acquisition methods, contract performance, and other factors, which could result in potential actions.

Those actions remain uncertain and could result in impacts to our current and future financial performance and business prospects.

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While customers may reduce the level of services required from us, the Company does not currently anticipate the complete elimination of these services, and the Company continues to focus on contract expansion and capturing new business opportunities.

However, business conditions have become more challenging and uncertain due to macroeconomic conditions, including inflation and rising interest rates, as well as recent international events.

However, business conditions have become more challenging and uncertain due to macroeconomic and geopolitical conditions, including inflation and rising interest rates, as well as recent international events.

For example, global hostilities could create additional demand for our products and services;

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Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, 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 May 15, 2025, we entered into an underwriting agreement (the Underwriting Agreement), by and among the Company, Vertex Aerospace Holdco LLC (the Selling Shareholder) and RBC Capital Markets, LLC, as underwriter (the Underwriter), relating to the public offering (the Offering) of 2,000,000 shares of common stock by the Selling Shareholder and up to 300,000 additional shares of common stock at the Underwriter’s option at any time on or before the 30th day after the date of the prospectus supplement dated May 15, 2025 (the Option).

The Offering closed on May 19, 2025.

The Selling Shareholder elected not to exercise the Option.

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

During the three months ended June 27, 2025, we incurred costs of $0.2 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 March 28, 2025, compared to three months ended March 29, 2024

Three months ended June 27, 2025, compared to three months ended June 28, 2024

Selected financial highlights are presented in the following table:

Three Months Ended Change

March 28, March 29,

June 27, June 28,

(In thousands, except for percentages) 2025 2024 $ %

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Other expense, net (2,579) (4,735) 2,156 (45.5) %

Income from operations before income taxes 10,070 1,124 8,946 795.9 %

Income (loss) from operations before income taxes 29,450 (8,114) 37,564 (463.0) %

% of revenue 2.7 % (0.8) %

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Effective income tax rate 24.0 % 19.3 %

Net income $ 8,107 $ 1,144 $ 6,963 608.7 %

*Percentage change is not meaningful.

Revenue increased $5.4 million, or 0.5%, for the three months ended March 28, 2025 as compared to the three months ended March 29, 2024 primarily due to organic growth.

Net income (loss) $ 22,391 $ (6,544) $ 28,935 (442.2) %

Revenue increased $6.1 million, or 0.6%, for the three months ended June 27, 2025 as compared to the three months ended June 28, 2024 primarily due to the conclusion of a non-recurring contractual commitment.

Revenue from our programs in the U.S.

Cost of Revenue

Cost of revenue decreased $2.5 million, or 0.3%, for the three months ended March 28, 2025 as compared to the three months ended March 29, 2024, primarily driven by changes in contract mix.

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

SG&A expenses increased $3.9 million, or 9.7%, for the three months ended March 28, 2025 as compared to the three months ended March 29, 2024, primarily due to timing of expenses.

Cost of revenue decreased $15.8 million, or 1.6%, for the three months ended June 27, 2025 as compared to the three months ended June 28, 2024, primarily driven by favorable contract mix.

Selling, General, & Administrative Expenses

SG&A expenses decreased $3.6 million, or 7.8%, for the three months ended June 27, 2025 as compared to the three months ended June 28, 2024, primarily due to lower integration-related costs and timing of expenses.

Operating Income

Operating income increased $4.0 million, or 13.1%, for the three months ended March 28, 2025 as compared to the three months ended March 29, 2024.

Operating income as a percentage of revenue was 3.4% for the three months ended March 28, 2025, compared to 3.0% for the three months ended March 29, 2024 primarily driven by changes in aggregate cumulative adjustments.

Aggregate cumulative catch-up adjustments increased operating income by $4.2 million and $0.5 million for the three months ended March 28, 2025 and March 29, 2024, respectively.

The aggregate cumulative catch-up adjustments for the three months ended March 28, 2025 and March 29, 2024 related to changes in contract terms, program performance, customer changes in scope of work and changes to estimates in the reported period.

Operating income increased $25.5 million, or 93.0%, for the three months ended June 27, 2025 as compared to the three months ended June 28, 2024.

Operating income as a percentage of revenue was 4.9% for the three months ended June 27, 2025, compared to 2.6% for the three months ended June 28, 2024, primarily driven by the conclusion of a non-recurring contractual commitment, decreased SG&A expenses and favorable contract mix.

Aggregate cumulative adjustments increased operating income by $1.4 million and $0.7 million for the three months ended June 27, 2025 and June 28, 2024, respectively.

The aggregate cumulative adjustments for the three months ended June 27, 2025 and June 28, 2024 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

The Company recorded a $2.2 million loss on extinguishment of debt for the three months ended March 28, 2025.

The Company recorded a $0.3 million loss on extinguishment of debt for the three months ended June 27, 2025 and a $2.0 million loss on extinguishment of debt for the three months ended June 28, 2024.

For further discussion see Note 5, Debt, in the Notes to Condensed Consolidated Financial Statements.

Six months ended June 27, 2025, compared to six months ended June 28, 2024

Selected financial highlights are presented in the following table:

Six Months Ended Change

June 27, June 28,

(In thousands, except for percentages) 2025 2024 $ %

Revenue $ 2,094,253 $ 2,082,747 $ 11,506 0.6 %

Cost of revenue 1,920,417 1,938,638 (18,221) (0.9) %

% of revenue 91.7 % 93.1 %

Selling, general, and administrative expenses 86,598 86,352 246 0.3 %

% of revenue 4.1 % 4.1 %

Operating income 87,238 57,757 29,481 51.0 %

Operating margin 4.2 % 2.8 %

Loss on extinguishment of debt (2,527) (1,998) (529) 26.5 %

Interest expense, net (40,317) (56,381) 16,064 (28.5) %

Interest expense, net for the three months ended March 28, 2025 and March 29, 2024 was as follows:

Three Months Ended Change

March 28, March 29,

Other expense, net (4,874) (6,368) 1,494 (23.5) %

Income (loss) from operations before income taxes 39,520 (6,990) 46,510 (665.4) %

% of revenue 1.9 % (0.3) %

Income tax expense (benefit) 9,022 (1,590) 10,612 (667.4) %

Effective income tax rate 22.8 % 22.7 %

Net income (loss) $ 30,498 $ (5,400) $ 35,898 (664.8) %

Revenue increased $11.5 million, or 0.6%, for the six months ended June 27, 2025 as compared to the six months ended June 28, 2024 primarily due to the conclusion of a non-recurring contractual commitment.

Revenue from programs located in the U.S.

increased by $86.2 million, partially offset by a decrease in revenue from programs located in the Middle East, Europe and Asia of $65.7 million, $8.3 million and $0.7 million, respectively.

Cost of Revenue

Cost of revenue decreased $18.2 million, or 0.9%, for the six months ended June 27, 2025 as compared to the six months ended June 28, 2024, primarily driven by favorable contract mix.

Selling, General, & Administrative Expenses

SG&A expenses increased $0.2 million, or 0.3%, for the six months ended June 27, 2025 as compared to the six months ended June 28, 2024.

Operating Income

Operating income increased $29.5 million, or 51.0%, for the six months ended June 27, 2025 as compared to the six months ended June 28, 2024.

Operating income as a percentage of revenue was 4.2% for the six months ended June 27, 2025, compared to 2.8% for the six months ended June 28, 2024.

The increase in operating income was primarily driven by the conclusion of a non-recurring contractual commitment, changes in aggregate cumulative adjustments and favorable contract mix.

Aggregate cumulative adjustments increased operating income by $5.6 million and $1.2 million for the six months ended June 27, 2025 and June 28, 2024, respectively.

The aggregate cumulative adjustments for the six months ended June 27, 2025 and June 28, 2024 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

The Company recorded a $2.5 million loss on extinguishment of debt for the six months ended June 27, 2025 and a $2.0 million loss on extinguishment of debt for the six months ended June 28, 2024.

For further discussion see Note 5, Debt, in the Notes to Condensed Consolidated Financial Statements.

Interest Expense, Net

Interest expense, net for the three and six months ended June 27, 2025 and June 28, 2024 was as follows:

Three Months Ended Change Six Months Ended Change

June 27, June 28, June 27, June 28,

(In thousands, except for percentages) 2025 2024 $ % 2025 2024 $ %

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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 $7.9 million for the three months ended March 28, 2025 compared to the three months ended March 29, 2024 primarily due to a decrease in our debt balance and reduced interest rates resulting from the January 2, 2025 Amendment to the First Lien Credit Agreement.

For further discussion of the Amendment see Note 5, Debt , in the Notes to Condensed Consolidated Financial Statements.

Interest expense, net decreased $16.1 million for the six months ended June 27, 2025 compared to the six months ended June 28, 2024 primarily due to a decrease in our debt balance and reduced interest rates resulting from both the January 2, 2025 amendment to the First Lien Credit Agreement and the March 31, 2025 amendment to the 2023 Credit Agreement.

For further discussion of these amendments see Note 5, Debt , in the Notes to Condensed Consolidated Financial Statements.

Other Expense, Net

During the three months ended March 28, 2025, we incurred purchase discount fees and other expenses of $2.5 million, related to the sale of accounts receivable through the MARPA Facility.

For a discussion of the MARPA Facility, see Note 12, Sale of Receivables , in the Notes to Condensed Consolidated Financial Statements.

During the three and six months ended June 27, 2025, we incurred purchase discount fees, net of servicing fees, of $2.6 million and $5.1 million, respectively, related to the sale of accounts receivable through the MARPA Facility.

During the three and six months ended June 28, 2024, we incurred purchase discount fees and other expenses of $2.6 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 27, 2025, there were no impairment charges on non-operating, long-lived assets.

Income Tax Expense (Benefit)

We recorded income tax expense of $2.0 million and income tax benefits which were not material for the three months ended March 28, 2025 and March 29, 2024, respectively.

Our effective income tax rates for the three months ended March 28, 2025 and March 29, 2024, were 19.5% and (1.8)%, respectively.

We recorded income tax expense of $7.1 million and income tax benefits of $1.6 million for the three months ended June 27, 2025 and June 28, 2024, respectively.

Our effective income tax rates for the three months ended June 27, 2025 and June 28, 2024, were 24.0% and 19.3%, respectively.

For the six months ended June 27, 2025 and June 28, 2024, the Company recorded income tax expense of $9.0 million and income tax benefits of $1.6 million, representing effective income tax rates of 22.8% and 22.7%, 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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In addition, other than items discussed, there are no known material trends, favorable or unfavorable, in our capital resources and no expected material changes in the mix of such resources.

Our major source of funding for 2025 and beyond will be our operating cash flow, our existing balances of cash and cash equivalents and proceeds from any issuances of debt.

Our major source of funding for 2025 and beyond is expected to be our operating cash flow, our existing balances of cash and cash equivalents and proceeds from any issuances of debt.

We believe we have sufficient liquidity to fund operations, acquisitions, capital expenditures and scheduled debt repayments.

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See Note 5, Debt , in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion.

As of March 28, 2025, the carrying value of the First Lien Credit Agreement was $899.8 million, excluding deferred discount and unamortized deferred financing costs of $27.7 million.

The estimated fair value of the First Lien Credit Agreement as of March 28, 2025 was $887.4 million.

On March 31, 2025, the 2023 Credit Agreement was amended to provide, among other things, a new tranche of term loans in an aggregate original principal amount of $237.5 million (the 2025 Term Loans), which replace or refinance in full all the existing term loans outstanding under the 2023 Credit Agreement as in effect immediately prior to the amendment.

The 2023 Credit Agreement was further amended to provide a new tranche of revolving credit commitments in an aggregate original principal amount of $500.0 million (the 2025 Revolver), which replace or refinance in full all the existing revolving credit loans and commitments outstanding under the 2023 Credit Agreement as in effect immediately prior to the amendment.

See Note 5, Debt , in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion.

As of June 27, 2025, the carrying value of the First Lien Credit Agreement was $897.5 million, excluding deferred discount and unamortized deferred financing costs of $26.4 million.

The estimated fair value of the First Lien Credit Agreement as of June 27, 2025 was $894.2 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).

As of March 28, 2025, there were no outstanding borrowings and $22.3 million of outstanding letters of credit under the 2023 Revolver.

Availability under the 2023 Revolver was $477.7 million as of March 28, 2025.

As of June 27, 2025, there were no outstanding borrowings and $23.8 million of outstanding letters of credit under the 2025 Revolver.

Availability under the 2025 Revolver was $476.2 million as of June 27, 2025.

Unamortized deferred financing costs related to the 2025 Revolver of $4.5 million are included in other non-current assets in the Condensed Consolidated Balance Sheets.

As of March 28, 2025, the fair value of the 2023 Revolver approximated the carrying value because the debt bears a floating interest rate.

As of March 28, 2025, the carrying value of the 2023 Term Loan was $239.1 million, excluding unamortized deferred financing costs of $1.5 million.

The estimated fair value of the 2023 Term Loan as of March 28, 2025 was $235.8 million.

As of June 27, 2025, the fair value of the 2025 Revolver approximated the carrying value because the debt bears a floating interest rate.

As of June 27, 2025, the carrying value of the 2025 Term Loans was $237.5 million, excluding unamortized deferred financing costs of $1.9 million.

The estimated fair value of the 2025 Term Loans as of June 27, 2025 was $236.6 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).

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and international cash from wholly owned subsidiaries.

Approximately $35.8 million of our $169.1 million in cash, cash equivalents and restricted cash as of March 28, 2025 is held by foreign subsidiaries and is not available to fund U.S.

Approximately $34.3 million of our $190.5 million in cash, cash equivalents and restricted cash as of June 27, 2025 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 wa s 58 and 57 d ays as of March 28, 2025 and December 31, 2024, respectively.

DSO was 60 and 57 days as of June 27, 2025 and December 31, 2024, respectively.

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

Three Months Ended

March 28, March 29,

Six Months Ended

June 27, June 28,

(in thousands) 2025 2024

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

Net cash used in operating activities for the three months ended March 28, 2025 consisted of net cash outflows in working capital accounts of $159.6 million and net cash outflows in other long-term assets and liabilities of $3.5 million, partially offset by cash inflows from non-cash net income items of $31.4 million, cash inflows from the sale of receivables through the MARPA Facility of $28.2 million, and net income of $8.1 million.

Net cash used in operating activities for the three months ended March 29, 2024 primarily consisted of net cash outflows in working capital accounts of $119.8 million and net cash outflows in other long-term assets and liabilities of $8.0 million, partially offset by cash inflows from non-cash net income items of $35.8 million, cash inflows from the sale of receivables through the MARPA Facility of $33.7 million and net income of $1.1 million.

Net cash used in investing activities for the three months ended March 28, 2025 consisted of $2.6 million of net capital expenditures for the purchase of software and hardware, vehicles and equipment related to ongoing operations.

Net cash used in investing activities for the three months ended March 29, 2024 consisted of $16.9 million for the acquisition of businesses and $7.8 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 three months ended March 28, 2025 consisted of revolver repayments of $141.0 million, payments for employee withholding taxes on stock-based compensation of $2.7 million, and payments for debt issuance costs of $1.2 million, partially offset by proceeds from the revolver of $141.0 million.

Net cash provided by financing activities during the three months ended March 29, 2024 consisted of proceeds from the revolver of $375.3 million, partially offset by revolver repayments of $319.3 million, payments for employee withholding taxes on stock-based compensation of $5.7 million, and repayments of long-term debt of $3.8 million.

Net cash used in operating activities for the six months ended June 27, 2025 consisted of net cash outflows in working capital accounts of $161.7 million and net cash outflows in other long-term assets and liabilities of $7.8 million, partially offset by cash inflows from non-cash net income items of $63.0 million, net income of $30.5 million and cash inflows from the sale of receivables through the MARPA Facility of $9.0 million.

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 used in investing activities for the six months ended June 27, 2025 consisted of $5.1 million of net 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 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 financing activities during the six months ended June 27, 2025 consisted of revolver repayments of $319.0 million, payments for debt issuance costs of $3.9 million, repayments of long-term debt of $3.8 million and payments for employee withholding taxes on stock-based compensation of $3.0 million, partially offset by proceeds from the revolver of $319.0 million.

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 stock-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 .

Capital Resources

As of March 28, 2025, we held cash, cash equivalents and restricted cash of $169.1 million, which included $35.8 million held by foreign subsidiaries, and had $477.7 million of available borrowing capacity under the 2023 Revolver.

We believe that our cash, cash equivalents and restricted cash as of March 28, 2025, as supplemented by cash flows from operations, 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 June 27, 2025, we held cash, cash equivalents and restricted cash of $190.5 million, which included $34.3 million held by foreign subsidiaries, and had $476.2 million of available borrowing capacity under the 2025 Revolver.

We believe that our cash, cash equivalents and restricted cash as of June 27, 2025, as supplemented by operating cash flows, the 2025 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 March 28, 2025, commitments to make future payments under long-term contractual obligations were as follows:

As of June 27, 2025, commitments to make future payments under long-term contractual obligations were as follows:

Payments Due by Period

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Total $ 1,573,251 $ 98,451 $ 207,046 $ 384,616 $ 883,138

¹ Includes unused funds fee and is based on the March 28, 2025 interest rate and outstanding balance.

¹ Includes unused funds fee and is based on the June 27, 2025 interest rate and outstanding balance.

CRITICAL ACCOUNTING POLICIES, ESTIMATES AND JUDGMENTS

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis