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Item 1. Financial Statements

2025-11-03 compared with 2025-08-04 · 151 added, 118 removed, 455 unchanged (37% of the section changed)

FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)

Three Months Ended Six Months Ended

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

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

Three Months Ended Nine Months Ended

September 26, September 27, September 26, September 27,

(In thousands, except per share data) 2025 2024 2025 2024

6 unchanged sentences

Other expense, net ( 2,962 ) ( 3,198 ) ( 7,836 ) ( 9,566 )

Income (loss) from operations before income taxes 29,450 ( 8,114 ) 39,520 ( 6,990 )

Income tax expense (benefit) 7,059 ( 1,570 ) 9,022 ( 1,590 )

Net income (loss) $ 22,391 $ ( 6,544 ) $ 30,498 $ ( 5,400 )

Earnings (loss) per share

Income from operations before income taxes 32,746 19,537 72,266 12,547

Income tax expense 8,141 4,486 17,163 2,896

Net income $ 24,605 $ 15,051 $ 55,103 $ 9,651

Earnings per share

Basic $ 0.78 $ 0.48 $ 1.74 $ 0.31

3 unchanged sentences

The accompanying notes are an integral part of these financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

Three Months Ended Six Months Ended

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

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

Three Months Ended Nine Months Ended

September 26, September 27, September 26, September 27,

(In thousands) 2025 2024 2025 2024

Net income (loss) $ 22,391 $ ( 6,544 ) $ 30,498 $ ( 5,400 )

Other comprehensive income (loss), net of tax

Net income $ 24,605 $ 15,051 $ 55,103 $ 9,651

Other comprehensive (loss) income, net of tax

Changes in derivative instruments:

Net change in fair value of interest rate swaps ( 413 ) ( 10,247 ) ( 5,585 ) ( 4,785 )

Tax benefit (expense) 386 ( 2,320 ) 1,201 ( 1,302 )

Tax benefit 96 2,523 1,297 1,220

Net change in derivative instruments ( 317 ) ( 7,724 ) ( 4,288 ) ( 3,565 )

Foreign currency translation adjustments, net of tax (expense) benefit of $( 1,635 ), $ 1,612 , $( 2,959 ) and $ 1,024

Foreign currency translation adjustments, net of tax benefit (expense) of $ 1,132 , $( 1,471 ), $( 1,827 ) and $( 447 )

( 3,740 ) 4,574 6,040 1,305

Other comprehensive income (loss), net of tax 4,127 ( 1,618 ) 5,809 890

Total comprehensive income (loss) $ 26,518 $ ( 8,162 ) $ 36,307 $ ( 4,510 )

Other comprehensive (loss) income, net of tax ( 4,057 ) ( 3,150 ) 1,752 ( 2,260 )

Total comprehensive income $ 20,548 $ 11,901 $ 56,855 $ 7,391

The accompanying notes are an integral part of these financial statements.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

June 27, December 31,

September 26, December 31,

(In thousands, except per share data) 2025 2024

33 unchanged sentences

100,000,000 shares authorized;

31,709,357 and 31,560,490 shares issued and outstanding as of June 27, 2025 and December 31, 2024, respectively

31,731,719 shares issued and 31,531,719 shares outstanding as of September 26, 2025;

31,560,490 shares issued and outstanding as of December 31, 2024

Treasury stock, at cost - 200,000 and no shares as of September 26, 2025 and December 31, 2024, respectively

Additional paid in capital 776,415 769,719

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Six Months Ended

June 27, June 28,

Nine Months Ended

September 26, September 27,

(In thousands) 2025 2024

Operating activities

Net income (loss) $ 30,498 $ ( 5,400 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Net income $ 55,103 $ 9,651

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Depreciation expense 12,468 16,442

13 unchanged sentences

Other liabilities ( 26,683 ) ( 16,581 )

Net cash used in operating activities ( 66,931 ) ( 31,551 )

Net cash (used in) provided by operating activities ( 27,484 ) 31,103

Investing activities

8 unchanged sentences

Proceeds from stock awards and stock options 558 154

Purchase of treasury stock ( 10,000 ) —

Payment of debt issuance costs ( 3,909 ) ( 1,188 )

Payments of employee withholding taxes on stock-based compensation ( 2,982 ) ( 8,036 )

Net cash (used in) provided by financing activities ( 10,618 ) 31,525

Net cash used in financing activities ( 23,879 ) ( 16,739 )

Exchange rate effect on cash 235 467

6 unchanged sentences

Purchase of capital assets on account $ 768 $ 90

Purchase of treasury stock on account $ 56 $ —

The accompanying notes are an integral part of these financial statements.

17 unchanged sentences

Balance at June 28, 2024 31,480 $ 315 $ 767,982 $ 225,451 $ ( 1,797 ) $ 991,951

Net income — — — 15,051 — 15,051

Foreign currency translation adjustments — — — — 4,574 4,574

Unrealized loss on cash flow hedge — — — — ( 7,724 ) ( 7,724 )

Employee stock awards and stock options 77 1 4 — — 5

Taxes withheld on stock compensation awards — — ( 2,269 ) — — ( 2,269 )

Stock-based compensation — — 973 — — 973

Balance at September 27, 2024 31,557 $ 316 $ 766,690 $ 240,502 $ ( 4,947 ) $ 1,002,561

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES TO SHAREHOLDERS' EQUITY (UNAUDITED)

Common Stock Issued Additional Paid-in Capital Accumulated Other Comprehensive Loss

Common Stock Issued

Treasury Stock

Additional Paid-in Capital Accumulated Other Comprehensive Loss

Total Shareholders' Equity

(In thousands) Shares Amount Retained Earnings

(In thousands) Shares Amount

Retained Earnings

Balance at December 31, 2024 31,560 $ 316 — $ — $ 769,719 $ 265,535 $ ( 9,418 ) $ 1,026,152

13 unchanged sentences

Balance at June 27, 2025 31,709 $ 317 — $ — $ 773,002 $ 296,033 $ ( 3,609 ) $ 1,065,743

Net Income — — — — — 24,605 — 24,605

Foreign currency translation adjustments — — — — — — ( 3,740 ) ( 3,740 )

Unrealized loss on cash flow hedge — — — — — — ( 317 ) ( 317 )

Employee stock awards and stock options 22 — — — 481 — — 481

Taxes withheld on stock compensation awards — — — — ( 8 ) — — ( 8 )

Stock-based compensation — — — — 2,940 — — 2,940

Treasury stock — — ( 200 ) ( 10,056 ) — — — ( 10,056 )

Balance at September 26, 2025 31,731 $ 317 ( 200 ) $ ( 10,056 ) $ 776,415 $ 320,638 $ ( 7,666 ) $ 1,079,648

The accompanying notes are an integral part of these financial statements.

16 unchanged sentences

The Company accounts for its investments in HDSS, J&J, ServCore and Inuksuk under the equity method and has the ability to exercise significant influence over, but does not hold a controlling interest in, these entities.

The Company's proportionate 25 %, 50 %, 40 % and 49 % shares, respectively, of income or losses from HDSS, J&J, ServCore and Inuksuk are recorded in selling, general and administrative expenses in the Condensed Consolidated Statements of Income (Loss).

These investments are recorded in other non-current assets in the Condensed Consolidated Balance Sheets.

2 unchanged sentences

Any cash distributions in excess of cumulative earnings are recorded as a return of investment in investing cash flows within the Condensed Consolidated Statements of Cash Flows.

As of June 27, 2025 and December 31, 2024, the Company's combined investment balance was $ 8.5 million and $ 8.6 million, respectively.

The Company's proportionate share of income from equity method investments was $ 2.1 million and $ 2.9 million for the three and six months ended June 27, 2025, respectively, and $ 4.4 million and $ 7.0 million for the three and six months ended June 28, 2024 , respectively.

As of September 26, 2025 and December 31, 2024, the Company's combined investment balance was $ 9.4 million and $ 8.6 million, respectively.

The Company's proportionate share of income from equity method investments was $ 2.6 million and $ 5.5 million for the three and nine months ended September 26, 2025, respectively, and $ 2.0 million and $ 9.0 million for the three and nine months ended September 27, 2024, respectively.

Basis of Presentation

The Company's quarterly financial periods end on the Friday closest to the last day of the calendar quarter (June 27, 2025 for the second quarter of 2025 and June 28, 2024 for the second quarter of 2024), except for the last quarter of the fiscal year, which ends on December 31.

The Company's quarterly financial periods end on the Friday closest to the last day of the calendar quarter (September 26, 2025 for the third quarter of 2025 and September 27, 2024 for the third quarter of 2024), except for the last quarter of the fiscal year, which ends on December 31.

For ease of presentation, the quarterly financial statements included herein are described as three months ended.

9 unchanged sentences

Restricted Cash

As of June 27, 2025, the Company had total cash, cash equivalents, and restricted cash of $ 190.5 million which included $ 3.0 million of restricted cash.

As of September 26, 2025, the Company had total cash, cash equivalents, and restricted cash of $ 182.3 million which included $ 3.0 million of restricted cash.

The Company's restricted cash was $ 3.1 million as of December 31, 2024.

3 unchanged sentences

The CCA implementation costs are amortized over the term of the related hosting agreement, including renewal periods that are reasonably certain to be exercised.

Amortization expense of CCA implementation costs is included in cost of revenue on the Company's Condensed Consolidated Statements of Income (Loss).

Amortization expense of CCA implementation costs is included in cost of revenue on the Company's Condensed Consolidated Statements of Income.

The CCA implementation costs are included within operating activities on the Company's Condensed Consolidated Statements of Cash Flows.

As of June 27, 2025 and December 31, 2024, the Company had total capitalized CCA implementation costs, net of accumulated amortization, of $ 26.8 million and $ 29.2 million, respectively, included in prepaid expenses and other current assets and other non-current assets on the Company's Condensed Consolidated Balance Sheet.

As of September 26, 2025 and December 31, 2024, the Company had total capitalized CCA implementation costs, net of accumulated amortization, of $ 25.6 million and $ 29.2 million, respectively, included in prepaid expenses and other current assets and other non-current assets on the Company's Condensed Consolidated Balance Sheet.

Prepaid Expenses and Other Current Assets

The components of prepaid expenses and other current assets are as follows:

June 27, December 31,

September 26, December 31,

(In thousands) 2025 2024

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The Company is currently evaluating the impact of adoption of this standard on its consolidated financial statements.

In September 2025, the FASB issued ASU No.

2025-06 Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use-Software, to remove all references to prescriptive and sequential software development stages throughout Subtopic 350-40 to better align the accounting for software costs with how software is developed.

The amendments in this ASU are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods.

Early adoption is permitted as of the beginning of an annual reporting period.

The Company is currently evaluating the impact of adoption of this standard on its consolidated financial statements.

Remaining Performance Obligations

13 unchanged sentences

Remaining performance obligations are presented in the following table:

June 27, December 31,

September 26, December 31,

(In millions) 2025 2024

Performance Obligations $ 3,480 $ 3,483

As of June 27, 2025, the Company expects to recognize approximately 48 % of the remaining performance obligations as revenue in 2025 and the majority of the remainder of the balance as revenue in 2026 and 2027.

As of September 26, 2025, the Company expects to recognize approximately 30 % of the remaining performance obligations as revenue in 2025 and the majority of the remainder of the balance as revenue in 2026 and 2027.

Contract Estimates

The impact of adjustments in contract estimates on the Company's operating income can be reflected in either revenue or cost of revenue.

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

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

For the three and six months ended June 27, 2025, the net adjustments to operating income increased revenue by $ 4.9 million and $ 19.7 million, respectively.

For the three and six months ended June 28, 2024, the net adjustments to operating income increased revenue by $ 6.0 million and $ 9.4 million, respectively.

Cumulative adjustments for the three months ended September 26, 2025 and September 27, 2024 increased operating income by $ 2.5 million and $ 17.3 million, respectively.

Cumulative adjustments for the nine months ended September 26, 2025 and September 27, 2024 increased operating income by $ 8.1 million and $ 18.5 million, respectively.

For the three and nine months ended September 26, 2025, the net adjustments to operating income increased revenue by $ 5.0 million and $ 24.7 million, respectively.

For the three and nine months ended September 27, 2024, the net adjustments to operating income increased revenue by $ 12.8 million and $ 22.2 million, respectively.

Revenue by Category

15 unchanged sentences

Revenue by contract type is as follows:

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

September 26, September 27, % September 26, September 27, %

(In thousands) 2025 2024 Change 2025 2024 Change

4 unchanged sentences

Revenue by geographic region in which the contract is performed is as follows:

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

September 26, September 27, % September 26, September 27, %

(In thousands) 2025 2024 Change 2025 2024 Change

5 unchanged sentences

Revenue by contract relationship is as follows:

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

September 26, September 27, % September 26, September 27, %

(In thousands) 2025 2024 Change 2025 2024 Change

3 unchanged sentences

Revenue by customer is as follows:

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

September 26, September 27, % September 26, September 27, %

(In thousands) 2025 2024 Change 2025 2024 Change

12 unchanged sentences

As of January 1, 2024, the Company had contract assets of $ 561.9 million.

As of June 27, 2025 and December 31, 2024, the Company had contract assets of $ 587.5 million and $ 620.5 million, respectively.

As of September 26, 2025 and December 31, 2024, the Company had contract assets of $ 636.6 million and $ 620.5 million, respectively.

Contract assets primarily consist of unbilled receivables which represent rights to consideration for work completed but not billed as of the reporting date.

5 unchanged sentences

As of January 1, 2024, the Company had contract liabilities of $ 109.6 million.

As of June 27, 2025 and December 31, 2024, contract liabilities, included in other accrued liabilities in the Condensed Consolidated Balance Sheets, were $ 98.2 million and $ 98.7 million, respectively.

As of September 26, 2025 and December 31, 2024, contract liabilities, included in other accrued liabilities in the Condensed Consolidated Balance Sheets, were $ 95.8 million and $ 98.7 million, respectively.

Receivables were comprised of the following:

June 27, December 31,

September 26, December 31,

(In thousands) 2025 2024

3 unchanged sentences

Total receivables $ 773,287 $ 710,068

As of June 27, 2025 and December 31, 2024, substantially all billed receivables were due from the U.S.

As of September 26, 2025 and December 31, 2024, substantially all billed receivables were due from the U.S.

government, either directly as prime contractor to the U.S.

3 unchanged sentences

Unbilled receivables are contract assets that represent revenue recognized on long-term contracts in excess of amounts billed as of the balance sheet date.

The Company expects to bill customers for most of the June 27, 2025 contract assets during 2025.

The Company expects to bill customers for most of the September 26, 2025 contract assets during 2025.

Changes in the balance of receivables are primarily due to the timing differences between performance and customers' payments.

1 unchanged sentence

First Lien Credit Agreement

On January 2, 2025, the First Lien Credit Agreement was amended to provide, among other things, a new tranche of term loans in an aggregate original principal amount of $ 899.8 million (the New Term Loans), in which the New Term Loans replace or refinance in full all the existing term loans outstanding under the First Lien Term Tranche as in effect immediately prior to the amendment (the Existing Term Loans).

On January 2, 2025, the First Lien Credit Agreement was amended to provide, among other things, a new tranche of term loans in an aggregate original principal amount of $ 899.8 million (the New Term Loans), in which the New Term Loans replace or refinance in full all the existing term loans outstanding under the First Lien Term Tranche in effect immediately prior to the amendment (the Existing Term Loans).

The loans under the First Lien Credit Agreement, as amended (the First Lien Credit Agreement), amortize in an amount equal to approximately $ 2.2 million per quarter through September 30, 2030, with the balance of $ 848.0 million due on December 6, 2030.

The replacement of the Existing Term Loans with the New Term Loans resulted in a loss on extinguishment of debt of $ 2.2 million in the Condensed Consolidated Statement of Income (Loss) for the six months ended June 27, 2025.

On May 30, 2024, the First Lien Credit Agreement was amended to provide, among other things, a new tranche of term loans to replace or refinance in full all the existing term loans outstanding under the First Lien Initial Term Tranche, resulting in a loss on extinguishment of debt of $ 2.0 million in the Condensed Consolidated Statement of Income (Loss) for the three and six months ended June 28, 2024.

The replacement of the Existing Term Loans with the New Term Loans resulted in a loss on extinguishment of debt of $ 2.2 million in the Condensed Consolidated Statement of Income for the nine months ended September 26, 2025.

V2X LLC (formerly known as Vertex Aerospace Services LLC) (V2X Borrower) obligations under the First Lien Credit Agreement are guaranteed by V2X Intermediate LLC (formerly known as Vertex Aerospace Intermediate LLC) and V2X Borrower’s wholly-owned domestic subsidiaries (collectively, the Guarantors), subject to customary exceptions and limitations.

1 unchanged sentence

The borrowings under the First Lien Credit Agreement bear interest at rates that, at the V2X Borrower’s option, can be either a base rate, determined by reference to the greater of (a) the federal funds rate plus 0.50 %, (b) the prime lending rate, or (c) an adjusted Secured Overnight Financing Rate (SOFR) rate plus 1.00 %, plus a margin of 1.25 % per annum, or SOFR, plus a margin of 2.25 % per annum.

As of June 27, 2025, the effective interest rate for the First Lien Credit Agreement was 7.11 %.

As of September 26, 2025, the effective interest rate for the First Lien Credit Agreement was 7.10 %.

The First Lien Credit Agreement contains customary representations and warranties and affirmative covenants.

2 unchanged sentences

If an event of default occurs and is continuing, the V2X Borrower may be required immediately to repay all amounts outstanding under the First Lien Credit Agreement.

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.

As of September 26, 2025, the carrying value of the First Lien Credit Agreement was $ 895.3 million, excluding deferred discount and unamortized deferred financing costs of $ 25.2 million.

The estimated fair value of the First Lien Credit Agreement as of September 26, 2025 was $ 895.3 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 (Level 2).

2023 Credit Agreement

The 2023 Credit Agreement provides for $ 750.0 million in senior secured financing, with a first lien on substantially all the V2X Borrower’s assets and consists of (a) a $ 500.0 million five-year revolving credit facility (2023 Revolver) (which includes (i) a $ 50.0 million sublimit of availability for letters of credit, and (ii) a $ 50.0 million sublimit for short-term borrowings on a swingline basis) and (b) a five-year $ 250.0 million term loan (the 2023 Term Loan).

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.

The 2023 Credit Agreement provides for $ 750.0 million in senior secured financing, with a first lien on substantially all the V2X Borrower’s assets and consists of (a) a $ 500.0 million five-year revolving credit facility (the 2023 Revolver) (which includes (i) a $ 50.0 million sublimit of availability for letters of credit, and (ii) a $ 50.0 million sublimit for short-term borrowings on a swingline basis) and (b) a five-year $ 250.0 million term loan (the 2023 Term Loan).

The 2025 Term Loans amortize at approximately $ 1.5 million per quarter for the fiscal quarters ending June 30, 2025 through March 31, 2027, increasing to $ 3.0 million per quarter for the fiscal quarters ending June 30, 2027 through December 31, 2029, with the balance of $ 193.0 million due on March 31, 2030.

The amendment to the 2023 Credit Agreement resulted in a loss on extinguishment of debt of $ 0.3 million in the Condensed Consolidated Statement of Income (Loss) for the three and six months ended June 27, 2025.

The amendment to the 2023 Credit Agreement resulted in a loss on extinguishment of debt of $ 0.3 million in the Condensed Consolidated Statement of Income for the nine months ended September 26, 2025.

The V2X Borrower’s obligations under the 2023 Credit Agreement are guaranteed by the Guarantors, subject to customary exceptions and limitations.

1 unchanged sentence

The borrowings under the 2023 Credit Agreement bear interest at rates that, at the V2X Borrower’s option, can be either a base rate, determined by reference to the greater of (a) the federal funds rate plus 0.50 %, (b) the prime lending rate, or (c) an adjusted SOFR rate plus 1.00 %, plus a margin of 0.50 % to 1.50 % per annum, or SOFR, plus a margin of 1.50 % to 2.50 % per annum, in each case, depending on the consolidated total net leverage ratio of the V2X Borrower and its subsidiaries.

As of June 27, 2025, the effective interest rate for the 2025 Term Loans was 6.49 %.

As of September 26, 2025, the effective interest rate for the 2025 Term Loans was 6.48 %.

Unutilized commitments under the 2025 Revolver are subject to a per annum fee ranging from 0.25 % to 0.50 % depending on the consolidated total net leverage ratio of the V2X Borrower and its subsidiaries.

5 unchanged sentences

If an event of default occurs and is continuing, the V2X Borrower may be required immediately to repay all amounts outstanding under the 2023 Credit Agreement.

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.

As of September 26, 2025, there were no outstanding borrowings and $ 24.1 million of outstanding letters of credit under the 2025 Revolver.

Availability under the 2025 Revolver was $ 475.9 million as of September 26, 2025.

Unamortized deferred financing costs related to the 2025 Revolver of $ 4.3 million are included in other non-current assets in the Condensed Consolidated Balance Sheets.

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.

As of September 26, 2025, the fair value of the 2025 Revolver approximated the carrying value because the debt bears a floating interest rate.

As of September 26, 2025, the carrying value of the 2025 Term Loans was $ 236.0 million, excluding unamortized deferred financing costs of $ 1.8 million.

The estimated fair value of the 2025 Term Loans as of September 26, 2025 was $ 235.4 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 aggregate scheduled maturities of the First Lien Credit Agreement and 2023 Credit Agreement as of June 27, 2025 are as follows:

The aggregate scheduled maturities of the First Lien Credit Agreement and 2023 Credit Agreement as of September 26, 2025 are as follows:

(In thousands) Payments due

2 unchanged sentences

Total $ 1,131,287

As of June 27, 2025, the Company was in compliance with all covenants related to the First Lien Credit Agreement and the 2023 Credit Agreement.

As of September 26, 2025, the Company was in compliance with all covenants related to the First Lien Credit Agreement and the 2023 Credit Agreement.

DERIVATIVE INSTRUMENTS

3 unchanged sentences

The Company is exposed to the risk that the earnings and cash flows could be adversely impacted due to fluctuations in interest rates.

To mitigate this risk, the Company entered into $ 450.0 million of interest rate swap contracts as of June 27, 2025.

As of June 27, 2025 and December 31, 2024, these contracts had notional values of $ 437.5 million and $ 439.1 million, respectively.

To mitigate this risk, the Company entered into $ 450.0 million of interest rate swap contracts as of September 26, 2025.

As of September 26, 2025 and December 31, 2024, these contracts had notional values of $ 434.4 million and $ 439.1 million, respectively.

These contracts are designated and qualify as effective cash flow hedges.

1 unchanged sentence

Fair Value (level 2)

June 27, December 31,

September 26, December 31,

(In thousands) Balance sheet caption 2025 2024

1 unchanged sentence

Interest rate swap designated as cash flow hedge Other non-current assets $ — $ 1,938

Interest rate swap designated as cash flow hedge Other accrued liabilities $ 53 $ —

Interest rate swap designated as cash flow hedge Other non-current liabilities $ 1,857 $ —

1 unchanged sentence

The Company regularly assesses the creditworthiness of the counterparty.

As of June 27, 2025, the counterparty to the interest rate swaps had performed in accordance with its contractual obligations.

As of September 26, 2025, the counterparty to the interest rate swaps had performed in accordance with its contractual obligations.

Both the counterparty credit risk and the Company's credit risk were considered in the fair value determination.

Net interest rate derivative gains of $ 0.8 million and $ 1.5 million were recognized in interest expense, net, in the Condensed Consolidated Statements of Income (Loss) during the three and six months ended June 27, 2025, respectively.

Net interest rate derivative gains of $ 1.4 million and $ 2.9 million were recognized in interest expense, net, in the Condensed Consolidated Statements of Income (Loss) during the three and six months ended June 28, 2024, respectively .

The Company expects $ 0.8 million of existing interest rate swap gains reported in accumulated other comprehensive loss as of June 27, 2025 to be recognized in earnings within the next 12 months.

Net interest rate derivative gains of $ 0.7 million and $ 2.2 million were recognized in interest expense, net, in the Condensed Consolidated Statements of Income during the three and nine months ended September 26, 2025, respectively.

Net interest rate derivative gains of $ 1.6 million and $ 4.5 million were recognized in interest expense, net, in the Condensed Consolidated Statements of Income during the three and nine months ended September 27, 2024, respectively.

The Company expects an immaterial amount of existing interest rate swap gains reported in accumulated other comprehensive loss as of September 26, 2025 to be recognized in earnings within the next 12 months.

COMMITMENTS AND CONTINGENCIES

8 unchanged sentences

Such assessments, along with any assessments regarding provisions for other legal proceedings, are reviewed on a quarterly basis for sufficiency based on the latest information available to us.

The Company estimated and accrued $ 12.1 million and $ 13.1 million as of June 27, 2025 and December 31, 2024, respectively, in other accrued liabilities in the Condensed Consolidated Balance Sheets for legal proceedings and for claims with respect to its U.S.

The Company estimated and accrued $ 13.5 million and $ 13.1 million as of September 26, 2025 and December 31, 2024, respectively, in other accrued liabilities in the Condensed Consolidated Balance Sheets for legal proceedings and for claims with respect to its U.S.

government contracts as discussed below, including years where the U.S.

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Congress or executive agencies could have a material adverse effect on the Company's financial condition or results of operations.

The FY 2026 appropriations for the U.S.

government were not enacted by September 30, 2025, resulting in a U.S.

federal government shutdown that began on October 1, 2025, and continues through the date of this filing.

Per federal guidelines, we are continuing to perform work on existing contracts that have been funded with appropriations from prior years.

While not currently the case, we may be expected to operate for some period of time on certain U.S.

government contracts even if the U.S.

government customer is unable to make timely payments.

To date, the Company has not experienced a material impact from the government shutdown.

However, if the U.S.

federal government shutdown continues for an extended period it could result in significant consequences for our company, employees, customers, suppliers and our industry and could result in material impacts to our financial position, results of operations, bookings, backlog, and/or collections and cash flows.

Furthermore, the Company's contracts with the U.S.

26 unchanged sentences

The Company accounts for NQOs, stock-settled RSUs and PSUs as equity-based compensation awards.

Stock-based compensation expense and the associated tax benefits impacting the Company's Condensed Consolidated Statements of Income (Loss) were as follows:

Three Months Ended Six Months Ended

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

Stock-based compensation expense and the associated tax benefits impacting the Company's Condensed Consolidated Statements of Income were as follows:

Three Months Ended Nine Months Ended

September 26, September 27, September 26, September 27,

(In thousands) 2025 2024 2025 2024

3 unchanged sentences

Future tax benefit $ 714 $ 275 $ 2,216 $ 3,283

As of June 27, 2025, total unrecognized compensation costs related to equity-based awards we re $ 24.0 million , which are expected to be recognized ratably over a weighted average period of 1.47 years .

The following table provides a summary of the activities for NQOs, RSUs and PSUs for the six months ended June 27, 2025:

As of September 26, 2025, total unrecognized compensation costs related to equity-based awards were $ 20.4 million, which are expected to be recognized ratably over a weighted average period of 1.70 years.

The following table provides a summary of the activities for NQOs, RSUs and PSUs for the nine months ended September 26, 2025:

NQOs RSUs PSUs

5 unchanged sentences

Forfeited or expired — $ — ( 57 ) $ 45.83 ( 26 ) $ 33.42

Outstanding at June 27, 2025 32 $ 21.73 438 $ 46.69 387 $ 45.41

Outstanding at September 26, 2025 10 $ 21.19 431 $ 47.10 372 $ 48.35

Restricted Stock Units

3 unchanged sentences

Stock compensation expense will be recognized ratably over the requisite service period of the RSU awards.

As of June 27, 2025, there was $ 14.7 million of unrecognized RSU related compensation expense.

As of September 26, 2025, there was $ 12.4 million of unrecognized RSU related compensation expense.

Performance Share Units

During the six months ended June 27, 2025, the Company granted performance-based awards that include two performance components, including TSR performance and Adjusted Earnings Per Share performance.

During the nine months ended September 26, 2025, the Company granted performance-based awards that include two performance components, including TSR performance and Adjusted Earnings Per Share performance.

The performance-based awards will vest and the stock will be issued at the end of a three-year period assuming and based on i) the attainment of total shareholder return performance measures relative to certain Aerospace and Defense companies in the S&P 1500 Index, ii) Company performance against an annual adjusted EPS target established each year and iii) the employee's continued service through the vesting date.

3 unchanged sentences

The fair value is based on the average of the results.

As of June 27, 2025, there was $ 9.3 million of unrecognized PSU related compensation expense.

As of September 26, 2025, there was $ 8.0 million of unrecognized PSU related compensation expense.

Effective Tax Rate

1 unchanged sentence

The computation of the estimated effective income tax rate at each interim period requires certain estimates and judgment including, but not limited to, forecasted operating income for the year, projections of the income earned and taxed in various jurisdictions, newly enacted tax rate and legislative changes, permanent and temporary differences, and the likelihood of recovering deferred tax assets generated in the current year.

For the three months ended June 27, 2025 and June 28, 2024, the Company recorded income tax expense of $ 7.1 million and income tax benefits of $ 1.6 million, respectively, representing effective income tax rates of 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, respectively, representing effective income tax rates of 22.8 % and 22.7 %, respectively.

For the three months ended September 26, 2025 and September 27, 2024, the Company recorded income tax expense of $ 8.1 million and $ 4.5 million, respectively, representing effective income tax rates of 24.9 % and 23.0 %, respectively.

For the nine months ended September 26, 2025 and September 27, 2024, the Company recorded income tax expense of $ 17.2 million and $ 2.9 million, respectively, representing effective income tax rates of 23.7 % and 23.1 %, 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.

Uncertain Tax Positions

As of both June 27, 2025 and December 31, 2024, unrecognized tax benefits from uncertain tax positions were $ 3.6 million.

As of both September 26, 2025 and December 31, 2024, unrecognized tax benefits from uncertain tax positions were $ 3.6 million.

The One Big Beautiful Bill Act (OBBBA) was enacted on July 4, 2025.

5 unchanged sentences

Diluted EPS includes the dilutive effect of stock-based compensation outstanding after application of the treasury stock method.

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

September 26, September 27, September 26, September 27,

(In thousands, except per share data) 2025 2024 2025 2024

Net income (loss) $ 22,391 $ ( 6,544 ) $ 30,498 $ ( 5,400 )

Net income $ 24,605 $ 15,051 $ 55,103 $ 9,651

Weighted average common shares outstanding 31,617 31,550 31,634 31,458

Dilutive impact of stock options 12 20 16 19

Dilutive impact of restricted stock units 172 — 225 —

Dilutive impact of restricted stock units and performance share units 227 403 231 444

Diluted weighted average common shares outstanding 31,856 31,973 31,881 31,921

Earnings (loss) per share

Earnings per share

Basic $ 0.78 $ 0.48 $ 1.74 $ 0.31

1 unchanged sentence

The following table summarizes the weighted average of anti-dilutive securities excluded from the diluted EPS calculation.

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

September 26, September 27, September 26, September 27,

(In thousands) 2025 2024 2025 2024

6 unchanged sentences

Adjustments to the fair value of plan investments and obligations are recorded in selling, general, and administrative expenses.

The plan assets and liabilities were $ 5.3 million and $ 5.2 million as of June 27, 2025 and December 31, 2024, respectively.

The plan assets and liabilities were $ 5.8 million and $ 5.2 million as of September 26, 2025 and December 31, 2024, respectively.

Multi-Employer Pension Plans

Certain Company employees who perform work on contracts within the continental United States participate in multi-employer pension plans of which the Company is not the sponsor.

Company expenses related to these plans were $ 4.9 million and $ 8.9 million for the three and six months ended June 27, 2025, respectively, and $ 4.4 million and $ 9.4 million for the three and six months ended June 28, 2024, respectively.

Company expenses related to these plans were $ 4.8 million and $ 13.7 million for the three and nine months ended September 26, 2025, respectively, and $ 3.6 million and $ 13.0 million for the three and nine months ended September 27, 2024, respectively.

SALE OF RECEIVABLES

6 unchanged sentences

As of and for the

Six Months Ended

June 27, June 28,

Nine Months Ended

September 26, September 27,

(In thousands) 2025 2024

8 unchanged sentences

Remaining sold receivables $ 189,986 $ 105,152

1 For the six months ended June 27, 2025, the Company recorded a net cash inflow from sale of receivables of $ 9.0 million from operating activities.

2 Includes the cash collected on behalf of, but not yet remitted to, MUFG as of June 27, 2025.

1 For the nine months ended September 26, 2025, the Company recorded a net cash inflow from sale of receivables of $ 17.0 million from operating activities.

2 Includes the cash collected on behalf of, but not yet remitted to, MUFG as of September 26, 2025.

This balance is included in other accrued liabilities as of the balance sheet date.

During both the three months ended June 27, 2025 and June 28, 2024, the Company incurred purchase discount fees, net of servicing fees, of $ 2.6 million, which are presented in other expense, net on the Condensed Consolidated Statements of Income (Loss).

During six months ended June 27, 2025 and June 28, 2024, the Company incurred purchase discount fees, net of servicing fees, of $ 5.1 million and $ 4.2 million, respectively, which are presented in other expense, net on the Condensed Consolidated Statements of Income (Loss) and are reflected as cash flows from operating activities on the Condensed Consolidated Statements of Cash Flows.

During the three months ended September 26, 2025 and September 27, 2024, the Company incurred purchase discount fees, net of servicing fees, of $ 3.0 million and $ 3.2 million, respectively, which are presented in other expense, net on the Condensed Consolidated Statements of Income.

During the nine months ended September 26, 2025 and September 27, 2024, the Company incurred purchase discount fees, net of servicing fees, of $ 8.1 million and $ 7.4 million, respectively, which are presented in other expense, net on the Condensed Consolidated Statements of Income and are reflected as cash flows from operating activities on the Condensed Consolidated Statements of Cash Flows.

The Company does not retain an ongoing financial interest in the transferred receivables other than cash collection and administrative services.

The Company estimated that its servicing fee was at fair value and therefore has not recognized a servicing asset or liability as of June 27, 2025.

The Company estimated that its servicing fee was at fair value and therefore has not recognized a servicing asset or liability as of September 26, 2025.

Proceeds from the sale of receivables are reflected as cash flows from operating activities on the Condensed Consolidated Statements of Cash Flows.

3 unchanged sentences

The chief operating decision maker (CODM) for the Company is the President and Chief Executive Officer.

The CODM uses consolidated profit metrics, including net income and operating income, as reported on the Condensed Consolidated Statements of Income (Loss), to allocate resources and assess financial performance.

Our CODM reviews significant expenses as reported in the Condensed Consolidated Statements of Income (Loss) in addition to depreciation and amortization information, which is summarized below for the three and six months ended June 27, 2025 and June 28, 2024:

Three Months Ended Six Months Ended

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

The CODM uses consolidated profit metrics, including net income and operating income, as reported on the Condensed Consolidated Statements of Income, to allocate resources and assess financial performance.

Our CODM reviews significant expenses as reported in the Condensed Consolidated Statements of Income in addition to depreciation and amortization information, which is summarized below for the three and nine months ended September 26, 2025 and September 27, 2024:

Three Months Ended Nine Months Ended

September 26, September 27, September 26, September 27,

(In thousands) 2025 2024 2025 2024

Depreciation and amortization $ 28,117 $ 28,486 $ 83,870 $ 86,767

The CODM also reviews consolidated capital expenditures as reported as purchases of capital assets in the Consolidated Statements of Cash Flows.

SUBSEQUENT EVENTS

The United States Air Force (USAF) awarded V2X the T-6 Contractor Operated and Maintained Base Supply (COMBS) IV contract valued at $ 4.3 billion.

The period of performance is August 1, 2025 through July 31, 2034 in support of USAF, United States Navy, and United States Army T-6A/B/D Texan II Aircraft.

The current funding obligated to the contract is $ 5.3 million.

The services V2X will provide under the T-6 COMBS contract include a full spectrum of Supply Chain Management services to support safe, flyable aircraft to meet users’ daily flight schedule and depot requirements consistent with U.S Department of Defense (DoD) and commercial sector best practices in procuring, producing, and delivering products and services to customers.

T-6 operating locations include Columbus Air Force Base (AFB), MS, Laughlin AFB, TX, Randolph AFB, TX, Sheppard AFB, TX, and Vance AFB, OK.

The CODM also reviews consolidated capital expenditures as reported as purchases of capital assets in the Condensed Consolidated Statements of Cash Flows.

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 1. Financial Statements