10-Q: Quarterly report [Sections 13 or 15(d)]
Published on August 5, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form
For the quarterly period ended
Or
For the transition period from ____________ to____________
Commission File Number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
(Address of principal executive offices)
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading symbol(s) |
Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☑ |
Accelerated filer |
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Non-accelerated filer |
☐ |
Smaller reporting company |
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of July 31, 2026, there were outstanding
TTM TECHNOLOGIES, INC.
Form 10-Q
For the Quarter Ended June 29, 2026
TABLE OF CONTENTS
2
Glossary of Terms and Acronyms
The following table provides definitions of certain terms and acronyms that may be used within the text of this Report.
2025 Repurchase Program |
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Share repurchase program authorized by the Board of Directors on May 8, 2025 |
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MYR |
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Malaysian ringgit |
2026 Credit Agreement |
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Second Amended and Restated Credit Agreement by and among the Company, the foreign subsidiary borrowers party thereto, any designated borrowers party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the several lenders from time to time parties thereto, dated June 1, 2026 |
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ODMs |
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Original design manufacturers |
A&D |
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Aerospace and Defense |
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OEMs |
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Original equipment manufacturers |
AI |
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Artificial intelligence |
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PCB |
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Printed circuit board |
Amended Term Loan Facility |
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Repriced and upsized $400.0 million senior secured term loan credit facility under the 2026 Credit Agreement |
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PRUs |
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Performance-based restricted stock units |
Asia ABL |
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Asia Asset-Based Lending Credit Agreement |
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Prior Term Loan Facility |
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First Amendment, dated as of August 1, 2024, to that certain Amended and Restated Term Loan Credit Agreement, dated as of May 30, 2023 |
ASU |
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Accounting Standards Update |
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RCF |
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Senior secured cash flow revolving credit facility with committed maximum borrowing capacity of up to $1.0 billion under the 2026 Credit Agreement |
CEO |
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Chief Executive Officer |
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Report |
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This Quarterly Report on Form 10-Q for the fiscal quarter ended June 29, 2026 |
CFO |
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Chief Financial Officer |
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RF |
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Radio frequency |
CHF |
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Swiss franc |
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RF&S Components |
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RF and Specialty Components |
CME |
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Chicago Mercantile Exchange |
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RMB |
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Renminbi |
CODM |
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Chief operating decision maker |
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RSUs |
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Restricted stock units |
Company |
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TTM Technologies, Inc. |
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SEC |
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Securities and Exchange Commission |
EMS |
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Electronic manufacturing services |
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SOFR |
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Secured Overnight Financing Rate |
Exchange Act |
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Securities Exchange Act of 1934, as amended |
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STG |
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Swiss Technology Group AG |
FASB |
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Financial Accounting Standards Board |
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U.S. ABL |
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U.S. Asset-Based Lending Credit Agreement |
Guarantors |
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The Company’s direct and indirect, existing and future domestic subsidiary guarantors, subject to certain exceptions |
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U.S. GAAP |
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Accounting principles generally accepted in the United States of America |
ILFA |
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ILFA GmbH |
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USD |
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U.S. dollar |
The Company uses a 52/53-week fiscal calendar with the fourth quarter ending on the Monday nearest December 31. Discussion and analysis in this Report is for the quarter and two quarters ended June 29, 2026, compared to the quarter and two quarters ended June 30, 2025, unless otherwise stated.
3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
TTM TECHNOLOGIES, INC.
Consolidated Condensed Balance Sheets
As of June 29, 2026 and December 29, 2025
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As of |
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June 29, 2026 |
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December 29, 2025 |
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(Unaudited) |
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(In thousands, except par value) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, net |
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Contract assets |
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Inventories |
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Prepaid expenses and other current assets |
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Total current assets |
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Property, plant, and equipment, net |
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Operating lease right-of-use assets |
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Goodwill |
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Definite-lived intangibles, net |
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Deposits and other non-current assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities: |
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Short-term debt, including current portion of long-term debt |
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$ |
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$ |
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Accounts payable |
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Contract liabilities |
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Accrued salaries, wages, and benefits |
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Other current liabilities |
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Total current liabilities |
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Long-term debt, net of discount and issuance costs |
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Operating lease liabilities |
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Other long-term liabilities |
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Total long-term liabilities |
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Equity: |
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Common stock, $ |
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Treasury stock – common stock at cost; |
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Additional paid-in capital |
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Retained earnings |
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Accumulated other comprehensive loss |
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( |
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( |
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Total stockholders’ equity |
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Total liabilities and stockholders' equity |
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$ |
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$ |
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See accompanying notes to consolidated condensed financial statements.
4
TTM TECHNOLOGIES, INC.
Consolidated Condensed Statements of Operations
For the Quarter and Two Quarters Ended June 29, 2026 and June 30, 2025
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For the Quarter Ended |
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For the Two Quarters Ended |
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June 29, 2026 |
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June 30, 2025 |
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June 29, 2026 |
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June 30, 2025 |
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(Unaudited) |
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(In thousands, except per share data) |
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Net sales |
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$ |
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$ |
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$ |
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$ |
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Cost of goods sold |
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Gross profit |
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Operating expenses: |
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Selling and marketing |
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General and administrative |
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Research and development |
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Amortization of definite-lived intangibles |
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Restructuring charges |
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Total operating expenses |
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Operating income |
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Other expense: |
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Interest expense |
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( |
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( |
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( |
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( |
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Loss on extinguishment of debt |
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( |
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( |
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Unrealized loss on derivative instruments |
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( |
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Other, net |
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( |
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( |
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( |
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Total other expense, net |
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( |
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( |
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( |
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( |
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Income before income taxes |
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Income tax benefit (provision) |
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( |
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( |
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( |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Earnings per share: |
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Basic earnings per share |
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$ |
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$ |
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$ |
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$ |
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Diluted earnings per share |
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See accompanying notes to consolidated condensed financial statements.
5
TTM TECHNOLOGIES, INC.
Consolidated Condensed Statements of Comprehensive Income
For the Quarter and Two Quarters Ended June 29, 2026 and June 30, 2025
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For the Quarter Ended |
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For the Two Quarters Ended |
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June 29, 2026 |
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June 30, 2025 |
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June 29, 2026 |
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June 30, 2025 |
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(Unaudited) |
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(In thousands) |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Other comprehensive income, net of tax: |
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Pension obligation |
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Foreign currency translation |
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Net unrealized gain (loss) on cash flow hedges: |
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Unrealized gain (loss) on effective cash flow |
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( |
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( |
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Amounts realized in the statement of |
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( |
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( |
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( |
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( |
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Net |
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( |
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( |
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Other comprehensive income (loss), net of tax |
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( |
) |
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( |
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Comprehensive income, net of tax |
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$ |
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$ |
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$ |
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$ |
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See accompanying notes to consolidated condensed financial statements.
6
TTM TECHNOLOGIES, INC.
Consolidated Condensed Statements of Stockholders’ Equity
For the Two Quarters Ended June 29, 2026 and June 30, 2025
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Common Stock |
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Treasury Stock |
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Additional |
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Retained |
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Accumulated |
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Total |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Earnings |
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Loss |
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Equity |
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(Unaudited) |
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(In thousands) |
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Balance, December 29, 2025 |
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$ |
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( |
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$ |
( |
) |
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$ |
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$ |
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$ |
( |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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— |
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— |
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Other comprehensive income |
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— |
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— |
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— |
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— |
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— |
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— |
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Issuance of stock for PRUs |
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— |
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— |
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( |
) |
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— |
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— |
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— |
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Issuance of stock for RSUs |
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— |
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— |
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( |
) |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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Balance, March 30, 2026 |
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$ |
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( |
) |
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$ |
( |
) |
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$ |
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$ |
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$ |
( |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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— |
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— |
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Other comprehensive income |
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— |
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— |
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— |
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— |
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— |
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— |
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Issuance of stock for RSUs |
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— |
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— |
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( |
) |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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Balance, June 29, 2026 |
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$ |
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( |
) |
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$ |
( |
) |
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$ |
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$ |
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$ |
( |
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$ |
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Common Stock |
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Treasury Stock |
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Additional |
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Retained |
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Accumulated |
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Total |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Earnings |
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Loss |
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Equity |
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(Unaudited) |
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(In thousands) |
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Balance, December 30, 2024 |
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$ |
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( |
) |
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$ |
( |
) |
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$ |
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$ |
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$ |
( |
) |
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$ |
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|||||
Net income |
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— |
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— |
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— |
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— |
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— |
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— |
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Other comprehensive income |
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— |
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— |
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— |
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— |
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— |
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— |
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Issuance of stock for PRUs |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Issuance of stock for RSUs |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Repurchases of common stock |
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— |
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— |
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( |
) |
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( |
) |
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— |
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— |
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— |
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( |
) |
Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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Balance, March 31, 2025 |
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$ |
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( |
) |
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$ |
( |
) |
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$ |
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$ |
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$ |
( |
) |
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$ |
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|||||
Net income |
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— |
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— |
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— |
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— |
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— |
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— |
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Other comprehensive loss |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Issuance of stock for RSUs |
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— |
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— |
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( |
) |
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— |
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— |
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— |
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||
Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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Balance, June 30, 2025 |
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$ |
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( |
) |
|
$ |
( |
) |
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$ |
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|
$ |
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$ |
( |
) |
|
$ |
|
|||||
See accompanying notes to consolidated condensed financial statements.
7
TTM TECHNOLOGIES, INC.
Consolidated Condensed Statements of Cash Flows
For the Two Quarters Ended June 29, 2026 and June 30, 2025
|
|
For the Two Quarters Ended |
|
|||||
|
|
June 29, 2026 |
|
|
June 30, 2025 |
|
||
|
|
(Unaudited) |
|
|||||
|
|
(In thousands) |
|
|||||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net income |
|
$ |
|
|
$ |
|
||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation of property, plant, and equipment |
|
|
|
|
|
|
||
Amortization of definite-lived intangible assets |
|
|
|
|
|
|
||
Amortization of debt discount and issuance costs |
|
|
|
|
|
|
||
Loss on extinguishment of debt |
|
|
|
|
|
|
||
Deferred income taxes |
|
|
|
|
|
|
||
Stock-based compensation |
|
|
|
|
|
|
||
Unrealized loss on derivative instruments |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
( |
) |
|
|
( |
) |
Contract assets |
|
|
( |
) |
|
|
( |
) |
Inventories |
|
|
( |
) |
|
|
( |
) |
Prepaid expenses and other assets |
|
|
( |
) |
|
|
( |
) |
Accounts payable |
|
|
|
|
|
|
||
Contract liabilities |
|
|
|
|
|
( |
) |
|
Accrued salaries, wages, and benefits |
|
|
( |
) |
|
|
( |
) |
Other liabilities |
|
|
|
|
|
|
||
Net cash provided by operating activities |
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
|
||
Net purchases of property, plant, and equipment and other assets |
|
|
( |
) |
|
|
( |
) |
Proceeds from sale of property, plant, and equipment and other assets |
|
|
|
|
|
|
||
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from long-term debt borrowings |
|
|
|
|
|
|
||
Repayment of long-term debt borrowings |
|
|
( |
) |
|
|
( |
) |
Repayment of customer deposits |
|
|
( |
) |
|
|
|
|
Payment of debt issuance costs |
|
|
( |
) |
|
|
|
|
Repurchases of common stock |
|
|
|
|
|
( |
) |
|
Other |
|
|
( |
) |
|
|
|
|
Net cash provided by (used in) financing activities |
|
|
|
|
|
( |
) |
|
Effect of foreign currency exchange rates on cash and cash equivalents |
|
|
|
|
|
|
||
Net increase in cash and cash equivalents |
|
|
|
|
|
( |
) |
|
Cash and cash equivalents at beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents at end of period |
|
$ |
|
|
$ |
|
||
Supplemental cash flow information: |
|
|
|
|
|
|
||
Cash paid, net for interest |
|
$ |
|
|
$ |
|
||
Cash paid, net for income taxes |
|
|
|
|
|
|
||
Supplemental disclosure of non-cash investing and financing activities: |
|
|
|
|
|
|
||
Cashless rollover of debt |
|
$ |
|
|
$ |
|
||
Property, plant, and equipment recorded in accounts payable and other current liabilities |
|
|
|
|
|
|
||
See accompanying notes to consolidated condensed financial statements.
8
TTM TECHNOLOGIES, INC.
Notes to Consolidated Condensed Financial Statements
(Unaudited)
(Dollars and shares in thousands, except per share data)
(1) Nature of Operations and Basis of Presentation
TTM Technologies, Inc. is a leading global manufacturer of technology products, including mission systems, RF components, RF microwave/microelectronic assemblies, and technologically advanced interconnect products, including PCBs and substrates. The Company provides time-to-market and volume production of advanced technology products and offers a one-stop design, engineering, and manufacturing solution to customers. This solution allows the Company to align technology developments with the diverse needs of the Company’s customers and to enable them to reduce the time required to develop new products and bring them to market.
The Company serves a diversified customer base in various markets throughout the world, including aerospace and defense; automotive; data center and networking; and medical, industrial, and instrumentation. The Company’s customers include OEMs, EMS providers, ODMs, distributors, and government agencies (both domestic and allied foreign governments).
The accompanying unaudited consolidated condensed financial statements have been prepared by the Company pursuant to the rules and regulations of the SEC. Certain information and disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s most recent Annual Report on Form 10-K. The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s consolidated condensed financial statements and accompanying notes. Due, in part, to the conflicts between Russia and Ukraine and conflicts in the Middle East, as well as other global regions, the imposition of, or changes to, tariffs by the United States as well as retaliatory tariffs or measures by other countries, and the rising prices of global crude oil, the global economy and financial markets have continued to be volatile. As such, the Company has considered information available to it as of the date of issuance of these consolidated condensed financial statements and is not aware of any specific events or circumstances that would require an update to its estimates or judgments, or a revision to the carrying value of its assets or liabilities. The actual results the Company experienced may differ materially and adversely from its estimates.
Derivative Instruments
All derivatives are recognized on the Company's consolidated condensed balance sheets at fair value based on quoted market prices or the Company's estimate of their fair value, and are recorded in current or non-current assets or liabilities based on their maturity. Changes in the fair values of derivatives are recorded in net earnings or other comprehensive income (loss), based on whether the instrument is designated and effective as a hedge transaction and, if so, the type of hedge transaction. Gains or losses on derivative instruments reported in accumulated other comprehensive loss are reclassified to earnings in the period the hedged item affects earnings. If the underlying hedged transaction ceases to exist, any associated amounts reported in accumulated other comprehensive loss are reclassified to earnings at that time.
On June 18, 2026, in connection with the proposed STG acquisition (see Note 11, Commitments and Contingencies for further information), the Company entered into a deal-contingent, forward-starting, fixed-for-fixed USD/CHF cross-currency swap with a major financial institution. The swap was entered to economically mitigate the foreign currency risk of the CHF-denominated purchase price and convert a portion of the anticipated USD financing into fixed-rate CHF financing. The instrument is contingent upon the closing of the proposed STG acquisition. The swap has notional exchanges of $
The instrument does not qualify for hedge accounting at inception. As of June 29, 2026, the fair value of the derivative instrument was a net liability of $
Recently Issued Accounting Standards Not Yet Adopted
In December 2025, the FASB issued ASU 2025-10, Accounting for Government Grants Received by Business Entities, to provide guidance on how business entities should recognize, measure, and present government grants received. The ASU is effective for annual periods beginning after December 15, 2028, and interim periods within those annual reporting periods. Early adoption is permitted. The guidance may be applied on a modified prospective basis, a modified retrospective basis, or a retrospective basis. The Company is currently evaluating the timing of the adoption and the impact of this ASU on its consolidated financial statements and related disclosures.
9
In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software, which amends the existing standard to remove all references to prescriptive and sequential software development project stages. Under this guidance, eligible software development costs will begin capitalization when management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended. The ASU is effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The guidance may be applied on a prospective basis, a modified basis for in-process projects, or a retrospective basis. The Company is currently evaluating the timing of the adoption and the impact of this ASU on its consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disclosure in the notes to the financial statements of specified information about certain costs and expenses. In January 2025, the FASB issued ASU 2025-01, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which amends the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of ASU 2024-03 is permitted. ASU 2024-03 should be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements and related disclosures, but expects additional disclosures upon adoption.
(2) Revenues
For contracts in which anticipated total costs exceed the total expected revenue, an estimated loss is recognized in the period when identifiable. A provision for the entire amount of the estimated loss is recorded on a cumulative basis. The estimated remaining costs to complete for loss contracts as of June 29, 2026 and December 29, 2025 were $
As of June 29, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations for long‑term contracts was $
Revenue recognized for the two quarters ended June 29, 2026 from amounts recorded as contract liabilities as of December 29, 2025 was $
Revenue from products and services transferred to customers over time and at a point in time accounted for
Disaggregated revenue by principal end markets within reportable segments was as follows:
|
|
For the Quarter Ended |
|
|||||||||||||||||||||
|
|
June 29, 2026 |
|
|
June 30, 2025 |
|
||||||||||||||||||
|
|
A&D |
|
|
Commercial |
|
|
Total |
|
|
A&D |
|
|
Commercial |
|
|
Total |
|
||||||
|
|
(In thousands) |
|
|||||||||||||||||||||
End Markets (1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Aerospace and Defense |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||||
Automotive |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
||||
Data Center and Networking |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Medical, Industrial, and Instrumentation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
10
|
|
For the Two Quarters Ended |
|
|||||||||||||||||||||
|
|
June 29, 2026 |
|
|
June 30, 2025 |
|
||||||||||||||||||
|
|
A&D |
|
|
Commercial |
|
|
Total |
|
|
A&D |
|
|
Commercial |
|
|
Total |
|
||||||
|
|
(In thousands) |
|
|||||||||||||||||||||
End Markets (1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Aerospace and Defense |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||||
Automotive |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
||||
Data Center and Networking |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Medical, Industrial, and Instrumentation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
(3) Significant Customers and Concentration of Credit Risk
Financial instruments that are potentially subject to concentrations of credit risk are primarily cash and cash equivalents and accounts receivable.
The Company had cash and cash equivalents held by its foreign subsidiaries of $
In the normal course of business, the Company extends credit to its customers. Some customers to whom the Company extends credit are located outside the United States. The Company performs ongoing credit evaluations of customers, does not require collateral, and considers the credit risk profile of the entity from which the receivable is due in further evaluating collection risk. As of June 29, 2026 and December 29, 2025,
The Company’s customers include both OEMs and EMS companies. The Company’s OEM customers often direct a significant portion of their purchases through EMS companies. While the Company’s customers include both OEM and EMS providers, the Company measures customer concentration based on OEM companies, as they are the ultimate end customers.
(4) Segment Information
During the quarter ended March 30, 2026, the Company strategically realigned RF&S Components within the A&D sector and concluded that the Company now has
The reportable segments shown below are the Company’s segments for which separate financial information is available and upon which operating results are evaluated by the CODM, who is the , to assess performance and to allocate resources.
The A&D reportable segment consists of PCBs, value-added assemblies, microelectronics, RF/microwave components and assemblies, integrated mission systems, and commercial off-the-shelf (COTS) components. These highly engineered electronics products include the manufacture and test of customer‑supplied designs as well as long-term contracts to design, develop, manufacture, and test new products. The products in the A&D reportable segment support surveillance, intelligence, communications, and other critical missions for customers in the aerospace and defense industry as well as commercial customers in the telecommunications, industrial, and instrumentation markets. The Commercial reportable segment consists of PCBs using customer-supplied engineering and design plans supporting customers in the automotive; data center and networking; and medical, industrial, and instrumentation end markets.
11
Reconciliations of net sales and segment operating income were as follows:
|
|
For the Quarter Ended |
|
|||||||||||||||||||||
|
|
June 29, 2026 |
|
|
June 30, 2025 |
|
||||||||||||||||||
|
|
Net Sales |
|
|
Intersegment Sales |
|
|
Segment Sales |
|
|
Net Sales |
|
|
Intersegment Sales |
|
|
Segment Sales |
|
||||||
|
|
(In thousands) |
|
|||||||||||||||||||||
A&D |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Eliminations |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
|
|
For the Two Quarters Ended |
|
|||||||||||||||||||||
|
|
June 29, 2026 |
|
|
June 30, 2025 |
|
||||||||||||||||||
|
|
Net Sales |
|
|
Intersegment Sales |
|
|
Segment Sales |
|
|
Net Sales |
|
|
Intersegment Sales |
|
|
Segment Sales |
|
||||||
|
|
(In thousands) |
|
|||||||||||||||||||||
A&D |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Eliminations |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
|
|
For the Quarter Ended June 29, 2026 |
|||||||||||||||||||
|
|
Net Sales |
|
|
Cost of Goods Sold |
|
|
Operating Expenses |
|
|
Operating Income |
|
|
Operating Margin |
|||||||
|
|
(In thousands, except margin rates) |
|||||||||||||||||||
A&D |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
|
|
% |
|||
Commercial |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|||
Total segment |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|||
Eliminations |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unallocated amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Restructuring |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Acquisition-related and other charges |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Other corporate expenses |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Amortization of definite-lived intangibles |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Consolidated |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Loss on extinguishment of debt |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Unrealized loss on derivative instruments |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Other, net |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Income before income taxes |
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|||||
12
|
|
For the Quarter Ended June 30, 2025 |
|||||||||||||||||||
|
|
Net Sales |
|
|
Cost of Goods Sold |
|
|
Operating Expenses |
|
|
Operating Income |
|
|
Operating Margin |
|||||||
|
|
(In thousands, except margin rates) |
|||||||||||||||||||
A&D |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
|
|
% |
|||
Commercial |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|||
Total segment |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|||
Eliminations |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unallocated amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Restructuring |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Other corporate expenses |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Amortization of definite-lived intangibles |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Consolidated |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Other, net |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Income before income taxes |
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|||||
|
|
For the Two Quarters Ended June 29, 2026 |
|||||||||||||||||||
|
|
Net Sales |
|
|
Cost of Goods Sold |
|
|
Operating Expenses |
|
|
Operating Income |
|
|
Operating Margin |
|||||||
|
|
(In thousands, except margin rates) |
|||||||||||||||||||
A&D |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
|
|
% |
|||
Commercial |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|||
Total segment |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|||
Eliminations |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unallocated amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Restructuring |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Acquisition-related and other charges |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Other corporate expenses |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Amortization of definite-lived intangibles |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Consolidated |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Loss on extinguishment of debt |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Unrealized loss on derivative instruments |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Other, net |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Income before income taxes |
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|||||
13
|
|
For the Two Quarters Ended June 30, 2025 |
|||||||||||||||||||
|
|
Net Sales |
|
|
Cost of Goods Sold |
|
|
Operating Expenses |
|
|
Operating Income |
|
|
Operating Margin |
|||||||
|
|
(In thousands, except margin rates) |
|||||||||||||||||||
A&D |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
|
|
% |
|||
Commercial |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|||
Total segment |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|||
Eliminations |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unallocated amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Restructuring |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Other corporate expenses |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Amortization of definite-lived intangibles |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Consolidated |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|||||
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Other, net |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||
Income before income taxes |
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|||||
Depreciation expense by reportable segment was as follows:
|
|
For the Quarter Ended |
|
|
For the Two Quarters Ended |
|
||||||||||
|
|
June 29, 2026 |
|
|
June 30, 2025 |
|
|
June 29, 2026 |
|
|
June 30, 2025 |
|
||||
|
|
(In thousands) |
|
|||||||||||||
A&D |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Segment total |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The Company markets and sells its products in approximately
|
|
For the Quarter Ended |
|
|
For the Two Quarters Ended |
|
||||||||||
|
|
June 29, 2026 |
|
|
June 30, 2025 |
|
|
June 29, 2026 |
|
|
June 30, 2025 |
|
||||
|
|
(In thousands) |
|
|||||||||||||
United States |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Taiwan |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total net sales |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Long-lived assets include property, plant, and equipment, goodwill, and definite-lived intangibles and were as follows:
|
|
As of |
|
|||||
|
|
June 29, 2026 |
|
|
December 29, 2025 |
|
||
|
|
(In thousands) |
|
|||||
United States |
|
$ |
|
|
$ |
|
||
China |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
14
(5) Composition of Certain Consolidated Condensed Financial Statement Captions
|
|
As of |
|
|||||
|
|
June 29, 2026 |
|
|
December 29, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Inventories: |
|
|
|
|
|
|
||
Raw materials |
|
$ |
|
|
$ |
|
||
Work-in-process |
|
|
|
|
|
|
||
Finished goods |
|
|
|
|
|
|
||
Inventories |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Property, plant, and equipment, net: |
|
|
|
|
|
|
||
Land and land use rights |
|
$ |
|
|
$ |
|
||
Buildings and improvements |
|
|
|
|
|
|
||
Machinery and equipment |
|
|
|
|
|
|
||
Furniture and fixtures and other |
|
|
|
|
|
|
||
Construction-in-progress |
|
|
|
|
|
|
||
Property, plant, and equipment, gross |
|
|
|
|
|
|
||
Less: Accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Property, plant, and equipment, net |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Other current liabilities: |
|
|
|
|
|
|
||
Income taxes payable |
|
$ |
|
|
$ |
|
||
Sales return and allowances |
|
|
|
|
|
|
||
Accrued facility operating costs |
|
|
|
|
|
|
||
Operating leases |
|
|
|
|
|
|
||
Housing fund |
|
|
|
|
|
|
||
Interest |
|
|
|
|
|
|
||
Warranty |
|
|
|
|
|
|
||
Accrued professional fees |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Other current liabilities |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Other long-term liabilities: |
|
|
|
|
|
|
||
Deferred income taxes |
|
$ |
|
|
$ |
|
||
Derivative liabilities |
|
|
|
|
|
|
||
Customer deposits |
|
|
|
|
|
|
||
Finance leases |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Other long-term liabilities |
|
$ |
|
|
$ |
|
||
As of June 29, 2026, prepaid expenses and other current assets include a derivative asset of $
15
(6) Goodwill and Definite-lived Intangibles
Goodwill
In connection with the Company’s strategic segment realignment during the quarter ended March 30, 2026, the RF&S Components reporting unit is now included as part of A&D. Management performed a goodwill impairment assessment over the $
As of June 29, 2026 and December 29, 2025, goodwill by reportable segment was $
Definite-lived Intangibles
The components of definite-lived intangibles were as follows:
|
|
Gross |
|
|
Accumulated |
|
|
Net |
|
|
Weighted |
|
||||
|
|
(In thousands) |
|
|
(In years) |
|
||||||||||
As of June 29, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Customer relationships |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|||
Technology |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
As of December 29, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Customer relationships |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|||
Technology |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|||
Definite-lived intangibles are amortized using the straight-line method of amortization over the useful life. Amortization expense was as follows:
|
|
For the Quarter Ended |
|
|
For the Two Quarters Ended |
|
||||||||||
|
|
June 29, 2026 |
|
|
June 30, 2025 |
|
|
June 29, 2026 |
|
|
June 30, 2025 |
|
||||
|
|
(In thousands) |
|
|||||||||||||
Total amortization expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Amortization expense in cost of goods sold |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Estimated aggregate amortization for definite-lived intangible assets for the next five years and thereafter is as follows:
|
|
(In thousands) |
|
|
Remaining 2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
$ |
|
|
16
(7) Long-term Debt and Letters of Credit
Long-term debt was as follows:
|
|
As of |
|
|||||||||||||||
|
|
June 29, 2026 |
|
|
December 29, 2025 |
|
||||||||||||
|
|
Interest Rate |
|
Principal |
|
|
Interest Rate |
|
Principal |
|
||||||||
|
|
(In thousands, except interest rates) |
|
|||||||||||||||
Senior Notes due |
|
|
|
% |
|
$ |
|
|
|
|
% |
|
$ |
|
||||
Term Loan due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
RCF due |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Asia ABL Revolving Loan due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Less: Unamortized debt issuance costs |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
||
Less: Unamortized debt discount |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
||
Subtotal |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Less: Current maturities |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
||
Long-term debt, less current maturities |
|
|
|
|
|
$ |
|
|
|
|
|
|
$ |
|
||||
The fiscal calendar maturities of debt for the next five years are as follows:
|
|
(In thousands) |
|
|
Remaining 2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
$ |
|
|
Debt Issuance Costs and Debt Discount
Remaining unamortized debt issuance costs and debt discount were as follows:
|
|
As of |
||||||||||||||||||||||||
|
|
June 29, 2026 |
|
December 29, 2025 |
||||||||||||||||||||||
|
|
Debt |
|
|
Debt |
|
|
Effective |
|
Debt |
|
|
Debt |
|
|
Effective |
||||||||||
|
|
(In thousands, except interest rates) |
||||||||||||||||||||||||
Senior Notes due March 2029 |
|
$ |
|
|
$ |
— |
|
|
|
|
% |
|
$ |
|
|
$ |
— |
|
|
|
|
% |
||||
Term Loan due May 2030 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total |
|
$ |
|
|
$ |
|
|
|
|
|
|
$ |
|
|
$ |
|
|
|
|
|
||||||
The above debt issuance costs and debt discount are recorded as a reduction of the debt and are amortized into interest expense using an effective interest rate over the duration of the debt.
Remaining unamortized debt issuance costs for the RCF of $
As of June 29, 2026, the remaining weighted average amortization period for all unamortized debt issuance costs and debt discount was
Debt Covenants
Borrowings under the Senior Notes due 2029 and Amended Term Loan Facility are subject to certain affirmative and negative covenants, including limitations on indebtedness, corporate transactions, investments, dispositions, and restricted payments.
Under the occurrence of certain events, the RCF is subject to various financial covenants, including leverage and interest coverage ratios.
17
2026 Credit Agreement; Refinancing of Term Loan Facility and RCF
On June 1, 2026, the Company entered into the 2026 Credit Agreement, which amended and restated the Company’s Prior Term Loan Facility, and provided for a new RCF. In addition, the 2026 Credit Agreement will permit the Company to add one or more senior secured incremental term loan facilities to the Amended Term Loan Facility, subject to the satisfaction of certain conditions.
Amended Term Loan Facility
The 2026 Credit Agreement provided for a $
RCF
In addition, the 2026 Credit Agreement provides for a new RCF that replaces the Company’s previous $
The RCF includes a letter of credit subfacility with a sublimit of $
The obligations under the 2026 Credit Agreement are unconditionally guaranteed by each of the Company’s Guarantors, subject to certain exceptions. In addition, subject to certain exclusions and limitations, the obligations of the Company and each Guarantor in respect of the 2026 Credit Agreement are secured by a perfected first priority security interest in substantially all of the tangible and intangible assets of the Company and the Guarantors, including all of the capital stock held by the Company and the Guarantors (subject to a limitation of
The 2026 Credit Agreement contains certain affirmative and restrictive covenants that the Company must comply with, including limitations on additional indebtedness, liens, investments, the issuance of dividends, and fundamental changes, as well as other customary covenants for credit facilities of this type. The 2026 Credit Agreement contains customary maintenance financial covenants applicable solely to the RCF. Specifically, the Company is required to maintain a minimum consolidated interest coverage ratio of at least
Loss on Extinguishment of Debt
During the quarter and two quarters ended June 29, 2026, the Company recognized loss on extinguishment of debt of $
18
(8) Income Taxes
The Company’s effective tax rate is impacted by the mix of foreign and U.S. income, tax rates in China and Hong Kong, the U.S. federal income tax rate, apportioned state income tax rates, the generation of credits, and deductions available to the Company as well as changes in valuation allowances and certain non-deductible items. No tax benefit was recorded on the losses incurred in certain foreign jurisdictions as a result of corresponding increases in the valuation allowances in these jurisdictions.
During the quarter and two quarters ended June 29, 2026, the Company’s effective tax rate was impacted by a net discrete benefit of $
The Company has various foreign subsidiaries formed or acquired to conduct or support its business outside the U.S. The Company expects its earnings attributable to most foreign subsidiaries may be repatriated back to the U.S. Accordingly, a deferred tax liability has been recorded for foreign withholding taxes and the estimated federal/state tax impact on any repatriation. For the Company’s other foreign subsidiaries with earnings currently being reinvested outside of the U.S., no deferred tax liability on undistributed earnings has been recorded.
(9) Earnings Per Share, Share Repurchase Program, and Accumulated Other Comprehensive Loss
Earnings Per Share
The reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share is as follows:
|
|
For the Quarter Ended |
|
|
For the Two Quarters Ended |
|
||||||||||
|
|
June 29, 2026 |
|
|
June 30, 2025 |
|
|
June 29, 2026 |
|
|
June 30, 2025 |
|
||||
|
|
(In thousands, except per share amounts) |
|
|||||||||||||
Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic weighted average shares |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive effect of PRUs, RSUs, and stock options |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted shares |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic earnings per share |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Diluted earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
||||
PRUs and RSUs to purchase
Share Repurchase Program
On May 8, 2025, the Company's Board of Directors authorized the 2025 Repurchase Program, under which the Company may repurchase up to $
During the quarter and two quarters ended June 29, 2026, the Company did
19
Accumulated Other Comprehensive Loss
The components of accumulated other comprehensive loss, net of tax, were as follows:
|
|
As of |
|
|||||
|
|
June 29, 2026 |
|
|
December 29, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Foreign currency translation |
|
$ |
( |
) |
|
$ |
( |
) |
Pension obligation |
|
|
|
|
|
|
||
Cash flow hedges |
|
|
|
|
|
( |
) |
|
Total |
|
$ |
( |
) |
|
$ |
( |
) |
(10) Fair Value Measures
The carrying amount and estimated fair value of the Company’s financial instruments were as follows:
|
|
As of |
|
|||||||||||||
|
|
June 29, 2026 |
|
|
December 29, 2025 |
|
||||||||||
|
|
Carrying Amount |
|
|
Fair Value |
|
|
Carrying Amount |
|
|
Fair Value |
|
||||
|
|
(In thousands) |
|
|||||||||||||
Derivatives designated as hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative assets, current |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Derivative liabilities, current |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative liabilities, non-current |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives not designated as hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative assets, current |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative liabilities, non-current |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Senior Notes due March 2029 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Term Loan due May 2030 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
RCF due May 2031 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Asia ABL Revolving Loan due June 2028 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other loan |
|
|
|
|
|
|
|
|
|
|
|
|
||||
The fair value of the derivative instruments was determined using pricing models developed based on the 1-month CME Term SOFR swap rate, USD/CHF spot and forward exchange rates, USD and CHF interest-rate curves, and other observable market data, including quoted market prices, as appropriate using Level 2 inputs. The values were adjusted to reflect non-performance risk of both the counterparty and the Company and deal-contingent provisions, as necessary.
The fair value of the long-term debt was estimated based on quoted market prices, where available, as of June 29, 2026 and December 29, 2025, which are considered Level 2 inputs.
As of June 29, 2026 and December 29, 2025, the Company’s other financial instruments included cash and cash equivalents, accounts receivable, contract assets, accounts payable, and contract liabilities. The carrying amount of these instruments approximates fair value.
(11) Commitments and Contingencies
Legal Matters
The Company is subject to various legal matters, which it considers normal for its business activities. While the Company currently believes that the amount of any reasonably possible loss for known matters would not be material to the Company’s financial condition, the outcome of these actions is inherently difficult to predict. In the event of an adverse outcome, the ultimate potential loss could have a material adverse effect on the Company’s financial condition or results of operations in a particular period. The Company has accrued amounts for its loss contingencies which are probable and estimable as of June 29, 2026 and December 29, 2025 and included as a component of other current liabilities. However, these amounts are not material to the consolidated condensed financial statements of the Company.
Supplier Finance Program Obligations
The Company has agreements with financial institutions to facilitate payments to certain suppliers. Liabilities associated with these agreements are recorded in accounts payable on the consolidated condensed balance sheets and amounted to $
20
Banking Facility Agreement
In June 2026, the Company entered a banking facility with a major financial institution to replace a portion of the trade credit capacity granted under the previous Asia ABL. This banking facility provides the Company with a line of credit for up to an aggregate $
Proposed Acquisitions of STG and ILFA
On June 17, 2026, the Company announced that it had entered into definitive stock purchase agreements to acquire STG and ILFA in separate transactions. These proposed transactions are expected to close in the third quarter of 2026, subject to the satisfaction of regulatory approvals and other customary closing conditions.
In connection with the proposed STG acquisition, the Company entered into an economic hedge to mitigate foreign currency risk of the CHF-denominated purchase price and interest related to the planned drawdown under the RCF to finance the proposed STG acquisition. See Note 1, Nature of Operations and Basis of Presentation for further information.
21
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Statement Regarding Forward-Looking Statements
This Report contains forward-looking statements regarding future events or our future financial and operational performance. Forward-looking statements include statements regarding markets for our products; trends in net sales, gross profits, and estimated expense levels; liquidity and anticipated cash needs and availability; and any statement that contains the words “anticipate,” “believe,” “plan,” “forecast,” “foresee,” “estimate,” “project,” “expect,” “seek,” “target,” “intend,” “goal,” and other similar expressions. The forward-looking statements included in this Report reflect our current expectations and beliefs, and we do not undertake publicly to update or revise these statements, even if experience or future changes make it clear that any projected results expressed in this Report or future quarterly reports to stockholders, press releases, or company statements will not be realized. In addition, the inclusion of any statement in this Report does not constitute an admission by us that the events or circumstances described in such statement are material. Furthermore, we wish to caution and advise readers that these statements are based on assumptions that may not materialize and may involve risks and uncertainties, many of which are beyond our control, that could cause actual events or performance to differ materially from those contained or implied in these forward-looking statements. These risks and uncertainties include the risks identified under the heading "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 29, 2025, as updated by our other filings with the SEC, and described elsewhere in this Report. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated condensed financial statements and the related notes and the other financial information included in this Report, as well as the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth in our Annual Report on Form 10-K for the fiscal year ended December 29, 2025, filed with the SEC.
COMPANY OVERVIEW
We are a leading global manufacturer of technology products, including mission systems, RF components, RF microwave/microelectronic assemblies, and technologically advanced interconnect products, including PCBs and substrates. We focus on providing time-to-market and volume production of advanced technology products and offer a one-stop design, engineering, and manufacturing solution to our customers. This solution allows us to align technology development with the diverse needs of our customers and to enable them to reduce the time required to develop new products and bring them to market. We serve a diversified customer base consisting of approximately 1,300 customers in various markets throughout the world, including aerospace and defense; automotive; data center and networking; and medical, industrial, and instrumentation. Our customers include OEMs, EMS providers, ODMs, distributors, and government agencies (both domestic and allied foreign governments).
RECENT DEVELOPMENTS
We previously announced we are in the process of constructing a new advanced technology PCB manufacturing facility in Syracuse, New York. We expect that our new facility will bring advanced technology capability for our domestic high-volume production of ultra‑high‑density interconnect (HDI) PCBs in support of national security requirements. The building construction is complete, equipment is arriving, and we continue to install and test equipment setups. Volume production in this facility is expected to commence in the second half of 2026.
On June 1, 2026, we entered into the 2026 Credit Agreement, which amended and restated our Prior Term Loan Facility, and provided for the Amended Term Loan Facility and a new RCF that replaced our prior revolving credit facilities, which have been terminated. In addition, the 2026 Credit Agreement will permit us to add one or more senior secured incremental term loan facilities to the Amended Term Loan Facility, subject to the satisfaction of certain conditions.
On June 17, 2026, we announced that we had entered into definitive stock purchase agreements to acquire STG and ILFA in separate transactions. These proposed transactions are expected to close in the third quarter of 2026, subject to the satisfaction of regulatory approvals and other customary closing conditions. In connection with the proposed STG acquisition, we entered into an economic hedge to mitigate foreign currency risk of the CHF-denominated purchase price and interest related to the planned drawdown under the RCF to finance the proposed STG acquisition.
FINANCIAL OVERVIEW
Our customers include both OEMs and EMS providers. We sell to OEMs both directly and indirectly through EMS providers. For such indirect sales, we classify net sales based on OEM companies as they are the ultimate end customers. Sales to our ten largest customers collectively accounted for 55% of our net sales for both the quarter and two quarters ended June 29, 2026. Sales to our ten largest customers collectively accounted for 53% and 54% of our net sales for the quarter and two quarters ended June 30, 2025, respectively.
22
The percentage of our net sales attributable to each of the principal end markets we served was as follows:
|
|
For the Quarter Ended |
|
For the Two Quarters Ended |
||||||||||||||||
|
|
June 29, 2026 |
|
June 30, 2025 (1) |
|
June 29, 2026 |
|
June 30, 2025 (1) |
||||||||||||
End Markets (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Aerospace and Defense |
|
|
37 |
|
% |
|
|
45 |
|
% |
|
|
39 |
|
% |
|
|
47 |
|
% |
Automotive |
|
|
8 |
|
|
|
|
11 |
|
|
|
|
8 |
|
|
|
|
11 |
|
|
Data Center and Networking |
|
|
40 |
|
|
|
|
29 |
|
|
|
|
38 |
|
|
|
|
28 |
|
|
Medical, Industrial, and Instrumentation |
|
|
15 |
|
|
|
|
15 |
|
|
|
|
15 |
|
|
|
|
14 |
|
|
Total |
|
|
100 |
|
% |
|
|
100 |
|
% |
|
|
100 |
|
% |
|
|
100 |
|
% |
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our consolidated condensed financial statements included in this Report have been prepared in accordance with U.S. GAAP. The preparation of these consolidated condensed financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales and expenses, and related disclosure of contingent assets and liabilities.
See Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report on Form 10-K for the fiscal year ended December 29, 2025 for further discussion of critical accounting policies and estimates. There have been no material changes to our critical accounting policies and estimates since December 29, 2025.
CONSOLIDATED OPERATING RESULTS
Net sales consist of gross sales less an allowance for returns, which typically have been approximately 2% of gross sales. We provide our customers a limited right of return for defective PCBs including components, assemblies, and subsystems. We record an estimate for sales returns and allowances at the time of sale based on historical results and anticipated returns.
Selected financial highlights are presented in the table below:
|
|
For the Quarter Ended |
|
|
For the Two Quarters Ended |
|
||||||||||
|
|
June 29, 2026 |
|
|
June 30, 2025 |
|
|
June 29, 2026 |
|
|
June 30, 2025 |
|
||||
|
|
(In thousands, except margin rates) |
|
|||||||||||||
Net sales |
|
$ |
1,004,054 |
|
|
$ |
730,621 |
|
|
$ |
1,850,030 |
|
|
$ |
1,379,289 |
|
Cost of goods sold |
|
|
792,196 |
|
|
|
582,512 |
|
|
|
1,456,991 |
|
|
|
1,100,208 |
|
Gross profit |
|
|
211,858 |
|
|
|
148,109 |
|
|
|
393,039 |
|
|
|
279,081 |
|
Gross margin |
|
|
21.1 |
% |
|
|
20.3 |
% |
|
|
21.2 |
% |
|
|
20.2 |
% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling and marketing |
|
|
25,490 |
|
|
|
21,316 |
|
|
|
50,484 |
|
|
|
42,587 |
|
General and administrative |
|
|
62,107 |
|
|
|
49,719 |
|
|
|
130,852 |
|
|
|
93,493 |
|
Research and development |
|
|
7,978 |
|
|
|
7,009 |
|
|
|
15,786 |
|
|
|
15,073 |
|
Amortization of definite-lived intangibles |
|
|
6,888 |
|
|
|
6,888 |
|
|
|
13,777 |
|
|
|
13,777 |
|
Restructuring charges |
|
|
340 |
|
|
|
1,408 |
|
|
|
636 |
|
|
|
2,122 |
|
Total operating expenses |
|
|
102,803 |
|
|
|
86,340 |
|
|
|
211,535 |
|
|
|
167,052 |
|
Operating income |
|
|
109,055 |
|
|
|
61,769 |
|
|
|
181,504 |
|
|
|
112,029 |
|
Operating margin |
|
|
10.9 |
% |
|
|
8.5 |
% |
|
|
9.8 |
% |
|
|
8.1 |
% |
Total other expense, net |
|
|
(27,808 |
) |
|
|
(16,244 |
) |
|
|
(41,732 |
) |
|
|
(25,513 |
) |
Income tax benefit (provision) |
|
|
1,800 |
|
|
|
(3,995 |
) |
|
|
(6,737 |
) |
|
|
(12,808 |
) |
Net income |
|
$ |
83,047 |
|
|
$ |
41,530 |
|
|
$ |
133,035 |
|
|
$ |
73,708 |
|
Net Sales
Total net sales increased $273.4 million, or 37.4%, to $1,004.1 million for the quarter ended June 29, 2026, from $730.6 million for the quarter ended June 30, 2025. The primary driver of this increase was due to continued strong demand in our data center and networking end market driven by the continued build out of AI data centers and related applications, as well as strong growth in our aerospace and defense and medical, industrial, and instrumentation end markets.
Total net sales increased $470.7 million, or 34.1%, to $1,850.0 million for the two quarters ended June 29, 2026, from $1,379.3 million for the two quarters ended June 30, 2025. The primary driver of this increase was due to continued strong demand in our data
23
center and networking end market driven by the continued build out of AI data centers and related applications, as well as strong growth in our medical, industrial, and instrumentation and aerospace and defense end markets.
Gross Profit and Margin Rate
Gross profit increased $63.7 million to $211.9 million for the quarter ended June 29, 2026, from $148.1 million for the quarter ended June 30, 2025. Gross margin rate increased to 21.1% for the quarter ended June 29, 2026, from 20.3% for the quarter ended June 30, 2025. These increases were primarily due to higher sales volume, favorable product mix, and improved operational execution.
Gross profit increased $114.0 million to $393.0 million for the two quarters ended June 29, 2026, from $279.1 million for the two quarters ended June 30, 2025. Gross margin rate increased to 21.2% for the two quarters ended June 29, 2026, from 20.2% for the two quarters ended June 30, 2025. These increases were primarily due to higher sales volume, favorable product mix, and improved operational execution.
Operating Expenses
Operating expenses increased $16.5 million to $102.8 million for the quarter ended June 29, 2026, from $86.3 million for the quarter ended June 30, 2025, primarily due to higher labor costs, incentive compensation, and acquisition costs.
Operating expenses increased $44.5 million to $211.5 million for the two quarters ended June 29, 2026, from $167.1 million for the two quarters ended June 30, 2025, primarily due to higher stock-based compensation, labor costs, incentive compensation, and acquisition costs. The increase in stock-based compensation was primarily driven by exceeding predetermined targets, stock price appreciation, and vesting of certain performance-based stock grants.
Operating Income and Margin Rate
Operating income increased $47.3 million to $109.1 million for the quarter ended June 29, 2026, from $61.8 million for the quarter ended June 30, 2025. Operating margin rate increased to 10.9% for the quarter ended June 29, 2026, from 8.5% for the quarter ended June 30, 2025. The primary drivers of these increases are discussed above in the variance explanations for Gross Profit and Margin Rate and Operating Expenses.
Operating income increased $69.5 million to $181.5 million for the two quarters ended June 29, 2026, from $112.0 million for the two quarters ended June 30, 2025. Operating margin rate increased to 9.8% for the two quarters ended June 29, 2026, from 8.1% for the two quarters ended June 30, 2025. The primary drivers of these increases are discussed above in the variance explanations for Gross Profit and Margin Rate and Operating Expenses.
Total Other Expense, Net
Total other expense, net increased $11.6 million to $27.8 million for the quarter ended June 29, 2026, from $16.2 million for the quarter ended June 30, 2025, primarily due to a higher amount of foreign exchange losses during the quarter ended June 29, 2026 resulting from strengthening RMB and MYR during the quarter ended June 29, 2026 as compared to the quarter ended June 30, 2025. We utilize the RMB and MYR at our China and Malaysia facilities, respectively, for employee‑related and other costs of running our operations in foreign countries.
Total other expense, net increased $16.2 million to $41.7 million for the two quarters ended June 29, 2026, from $25.5 million for the two quarters ended June 30, 2025, primarily due to a higher amount of foreign exchange losses during the two quarters ended June 29, 2026 resulting from strengthening RMB and MYR during the two quarters ended June 29, 2026 as compared to the two quarters ended June 30, 2025.
Income Taxes
Income tax benefit increased $5.8 million to $1.8 million for the quarter ended June 29, 2026, from $4.0 million income tax expense for the quarter ended June 30, 2025, primarily due to tax benefits from the deduction of stock-based compensation, partially offset by tax expense driven by higher income before income taxes.
Income tax expense decreased $6.1 million to $6.7 million for the two quarters ended June 29, 2026, from $12.8 million for the two quarters ended June 30, 2025, primarily due to tax benefits from the deduction of stock-based compensation, partially offset by tax expense driven by higher income before income taxes.
Our effective tax rate is primarily impacted by the mix of foreign and U.S. income, tax rates in China and Hong Kong, the U.S. federal income tax rate, apportioned state income tax rates, the generation of credits and deductions available to us as well as changes in valuation allowances and certain non-deductible items. We had a net deferred income tax liability of $52.8 million and $41.8 million as of June 29, 2026 and June 30, 2025, respectively.
24
SEGMENT OPERATING RESULTS
Basis of Presentation
During the quarter ended March 30, 2026, the Company strategically realigned RF&S Components within the A&D sector and concluded that the Company now has two reportable segments: A&D and Commercial. In prior periods, the Company had three reportable segments: A&D, Commercial, and RF&S Components following a change during the quarter ended June 30, 2025. As a result, certain prior period amounts have been reclassified to conform with this new presentation. See Part I, Item 1, Note 4, Segment Information, of the Notes to Consolidated Condensed Financial Statements in this Report for further information.
Selected segment financial highlights, with reconciliations to operating income, are presented in the table below:
|
|
For the Quarter Ended |
|
|
For the Two Quarters Ended |
|
||||||||||
|
|
June 29, 2026 |
|
|
June 30, 2025 |
|
|
June 29, 2026 |
|
|
June 30, 2025 |
|
||||
|
|
(In thousands, except margin rates) |
|
|||||||||||||
Segment sales: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
A&D |
|
$ |
382,750 |
|
|
$ |
335,183 |
|
|
$ |
734,414 |
|
|
$ |
651,433 |
|
Commercial |
|
|
621,605 |
|
|
|
395,624 |
|
|
|
1,116,648 |
|
|
|
728,329 |
|
Total |
|
$ |
1,004,355 |
|
|
$ |
730,807 |
|
|
$ |
1,851,062 |
|
|
$ |
1,379,762 |
|
Segment operating income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
A&D |
|
$ |
63,861 |
|
|
$ |
48,145 |
|
|
$ |
118,640 |
|
|
$ |
90,514 |
|
Commercial |
|
|
112,676 |
|
|
|
60,069 |
|
|
|
194,244 |
|
|
|
103,718 |
|
Total |
|
|
176,537 |
|
|
|
108,214 |
|
|
|
312,884 |
|
|
|
194,232 |
|
Segment operating margin rate: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
A&D |
|
|
16.7 |
% |
|
|
14.4 |
% |
|
|
16.2 |
% |
|
|
13.9 |
% |
Commercial |
|
|
18.1 |
% |
|
|
15.2 |
% |
|
|
17.4 |
% |
|
|
14.2 |
% |
Total |
|
|
17.6 |
% |
|
|
14.8 |
% |
|
|
16.9 |
% |
|
|
14.1 |
% |
Unallocated amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Restructuring |
|
|
(340 |
) |
|
|
(1,408 |
) |
|
|
(636 |
) |
|
|
(2,122 |
) |
Acquisition-related and other charges |
|
|
(4,749 |
) |
|
|
— |
|
|
|
(4,946 |
) |
|
|
— |
|
Stock-based compensation |
|
|
(13,292 |
) |
|
|
(9,188 |
) |
|
|
(37,648 |
) |
|
|
(17,975 |
) |
Other corporate expenses |
|
|
(39,877 |
) |
|
|
(26,625 |
) |
|
|
(69,702 |
) |
|
|
(43,658 |
) |
Amortization of definite-lived intangibles (1) |
|
|
(9,224 |
) |
|
|
(9,224 |
) |
|
|
(18,448 |
) |
|
|
(18,448 |
) |
Operating income |
|
$ |
109,055 |
|
|
$ |
61,769 |
|
|
$ |
181,504 |
|
|
$ |
112,029 |
|
Segment operating income, as reconciled in Part I, Item 1, Note 4, Segment Information, of the Notes to Consolidated Condensed Financial Statements in this Report, and segment operating margin rate (segment operating income divided by segment sales) are presented in conformity with Accounting Standards Codification (ASC) Topic 280, Segment Reporting. These measures are reported to the CODM, who is the President and CEO, for purposes of making decisions about allocating resources to the segments and assessing their performance. For these reasons, these measures are excluded from the definition of non‑GAAP financial measures under the SEC's Regulation G and Item 10(e) of Regulation S-K.
A&D
Segment Sales
Segment sales for the A&D reportable segment increased $47.6 million, or 14.2%, to $382.8 million for the quarter ended June 29, 2026, from $335.2 million for the quarter ended June 30, 2025. The primary drivers of this increase were strong defense budget spending, our strong strategic program alignment, and key bookings for ongoing franchise programs, including restricted programs. These increases were driven by increased sales related to missiles and munitions as well as strong demand in our mission systems and specialty assembly businesses.
Segment sales for the A&D reportable segment increased $83.0 million, or 12.7%, to $734.4 million for the two quarters ended June 29, 2026, from $651.4 million for the two quarters ended June 30, 2025. The primary drivers of the increase were as discussed in the paragraph above.
Segment Operating Income and Margin Rate
Segment operating income for the A&D reportable segment increased $15.7 million to $63.9 million for the quarter ended June 29, 2026, from $48.1 million for the quarter ended June 30, 2025. Segment operating margin rate for the A&D reportable segment
25
increased to 16.7% for the quarter ended June 29, 2026, from 14.4% for the quarter ended June 30, 2025. The primary drivers of these increases were higher sales volume, as discussed above, favorable product mix, and improved operational execution.
Segment operating income for the A&D reportable segment increased $28.1 million to $118.6 million for the two quarters ended June 29, 2026, from $90.5 million for the two quarters ended June 30, 2025. Segment operating margin rate for the A&D reportable segment increased to 16.2% for the two quarters ended June 29, 2026, from 13.9% for the two quarters ended June 30, 2025. The primary drivers of these increases were as discussed in the paragraph above.
Commercial
Segment Sales
Segment sales for the Commercial reportable segment increased $226.0 million, or 57.1%, to $621.6 million for the quarter ended June 29, 2026, from $395.6 million for the quarter ended June 30, 2025. The primary drivers of this increase were strong demand in our data center and networking end market driven by the continued buildout of AI data centers and related applications, as well as strong sales performance in our medical, industrial, and instrumentation end market.
Segment sales for the Commercial reportable segment increased $388.3 million, or 53.3%, to $1,116.6 million for the two quarters ended June 29, 2026, from $728.3 million for the two quarters ended June 30, 2025. The primary drivers of this increase were as discussed in the paragraph above.
Segment Operating Income and Margin Rate
Segment operating income for the Commercial reportable segment increased $52.6 million to $112.7 million for the quarter ended June 29, 2026, from $60.1 million for the quarter ended June 30, 2025. Segment operating margin rate for the Commercial reportable segment increased to 18.1% for the quarter ended June 29, 2026, from 15.2% for the quarter ended June 30, 2025. The primary drivers of these increases were higher sales volume, as discussed above, improving mix, and improved operational execution.
Segment operating income for the Commercial reportable segment increased $90.5 million to $194.2 million for the two quarters ended June 29, 2026, from $103.7 million for the two quarters ended June 30, 2025. Segment operating margin rate for the Commercial reportable segment increased to 17.4% for the two quarters ended June 29, 2026, from 14.2% for the two quarters ended June 30, 2025. The primary drivers of these increases were as discussed in the paragraph above.
Liquidity and Capital Resources
Our principal sources of liquidity have been cash provided by operations, the issuance of debt, and borrowings under our RCF. Our principal uses of cash have been to finance capital expenditures, finance acquisitions, fund working capital requirements, repay debt obligations, and repurchase common stock. We anticipate that financing capital expenditures, financing acquisitions including but not limited to the proposed STG and ILFA acquisitions, funding working capital requirements, servicing debt, and repurchasing common stock will be the principal demands on our cash in the future.
Cash flow provided by operating activities during the first two quarters of 2026 was $118.2 million as compared to cash flow provided by operating activities of $87.1 million in the same period in 2025. The increase in cash flow was primarily due to an increase in net income of $59.3 million partially offset by increased working capital largely driven by the timing of collections.
Net cash used in investing activities during the first two quarters of 2026 was $157.2 million, primarily resulting from the use of $169.2 million for net purchases of property, plant, and equipment and other assets, partially offset by the receipt of $12.0 million of proceeds from the sale of property, plant, and equipment and other assets. Net cash used in investing activities during the first two quarters of 2025 was $123.5 million, primarily resulting from the use of $123.7 million for net purchases of property, plant, and equipment and other assets.
Net cash provided by financing activities during the first two quarters of 2026 was $45.6 million, primarily reflecting proceeds from long-term debt borrowing of $199.2 million, partially offset by repayment of long-term debt borrowings of $143.3 million, repayments of $5.0 million for customer deposits, and $4.7 million for payment of debt issuance costs. Net cash used in financing activities during the first two quarters of 2025 was $19.8 million, reflecting the use of $17.9 million for repurchases of common stock and $1.9 million for the repayment of long-term debt borrowings.
As of June 29, 2026, we had cash and cash equivalents of approximately $507.9 million, of which approximately $185.4 million was held by our foreign subsidiaries, primarily in China, $913.9 million of available borrowing capacity under our RCF, and $5.7 million of available letters of credit under our banking facility. Should we choose to remit cash to the United States from our foreign locations, we may incur tax obligations which would reduce the amount of cash ultimately available to the United States. However, we believe there would be no material tax expenses not previously accrued for the repatriation of this cash.
Our total 2026 capital expenditures are expected to be in the range of $345.0 million to $365.0 million, primarily for capacity expansion to meet market demand.
26
Share Repurchases
On May 8, 2025, our Board of Directors authorized the 2025 Repurchase Program, under which we may repurchase up to $100.0 million in value of our common stock from time to time through May 7, 2027. We did not repurchase any shares of our common stock during the quarter ended June 29, 2026. As of June 29, 2026, the remaining amount in value available to be repurchased under the 2025 Repurchase Program was $100.0 million.
Long-term Debt and Letters of Credit
As of June 29, 2026, we had $973.5 million of outstanding debt, net of discount and issuance costs, composed of $497.8 million of Senior Notes due 2029, $395.7 million under the Amended Term Loan Facility, and $80.0 million under the RCF.
Pursuant to the terms of the Senior Notes due 2029 and the 2026 Credit Agreement (which provides for the Amended Term Loan Facility and the RCF), we are subject to certain affirmative and negative covenants, including limitations on indebtedness, corporate transactions, investments, dispositions, and restricted payments, and with respect to the RCF, various financial covenants, including leverage and interest coverage ratios. As of June 29, 2026, we were in compliance with the covenants under the Senior Notes due 2029 and the 2026 Credit Agreement.
Based on our current level of operations, we believe that cash generated from operations, cash on hand, and cash from the issuance of available term, incremental, and revolving debt will be adequate to meet our currently anticipated capital expenditure, acquisitions, debt service, and working capital needs for the next 12 months. Additional information regarding our indebtedness, including information about the credit available under our debt facilities, interest rates, and other key terms of our outstanding indebtedness, is included in Part I, Item 1, Note 7, Long‑term Debt and Letters of Credit, of the Notes to Consolidated Condensed Financial Statements included in this Report.
Supplier Finance Program Obligations
We have agreements with financial institutions to facilitate payments to certain suppliers. Liabilities associated with these agreements are recorded in accounts payable on the consolidated condensed balance sheets and amounted to $15.3 million and $12.5 million as of June 29, 2026 and December 29, 2025, respectively.
Contractual Obligations and Commitments
As part of our ongoing operations, we enter into contractual arrangements that obligate us to make future cash payments. These obligations impact our liquidity and capital resource needs. Our estimated future obligations consist of long-term debt obligations, interest on debt obligations, derivative liabilities, purchase obligations, and leases.
A summary of our long-term debt obligations as of June 29, 2026 is included in Part I, Item 1, Note 7, Long‑term Debt and Letters of Credit, of the Notes to Consolidated Condensed Financial Statements included in this Report.
Our aggregate interest on debt obligations as of June 29, 2026, amounted to $162.8 million, which is expected to be settled as follows: $45.9 million within 1 year, $89.9 million within 1-3 years, and $27.0 million within 4-5 years. For debt obligations based on variable rates, interest rates used are as of June 29, 2026.
As of June 29, 2026, there were no other material changes outside the ordinary course of business since December 29, 2025 to our contractual obligations and commitments and the related cash requirements.
Seasonality
We do not consider any material portion of our business to be seasonal. Various factors, however, can affect the distribution of our sales between accounting periods, including the timing of customer orders, the availability of customer funding, product deliveries, and customer acceptance.
Recently Issued Accounting Standards
For a description of recently adopted and issued accounting standards, including the respective dates of adoption and the expected effects on our results of operations and financial condition, see Part I, Item 1, Note 1, Nature of Operations and Basis of Presentation, of the Notes to Consolidated Condensed Financial Statements included in this Report.
27
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Foreign Currency Exchange Rate Risks
In connection with the proposed STG acquisition, we expect to become exposed to additional foreign currency risk from the CHF-denominated purchase price and interest related to the planned drawdown under the RCF to finance the proposed STG acquisition, which is expected to close in the third quarter of 2026, subject to the satisfaction of regulatory approvals and other customary closing conditions.
In an effort to economically mitigate these risks, we entered into a deal-contingent forward-starting, fixed-for-fixed USD/CHF cross-currency swap with a major financial institution. As of June 29, 2026, the swap had a net fair value liability of $14.0 million. The terms of the deal-contingent swap were as follows:
|
|
As of June 29, 2026 |
||||||||||
|
|
Remaining |
|
2027 |
|
2028 |
|
2029 |
|
2030 |
|
Thereafter |
|
|
(In thousands, except interest rates) |
||||||||||
USD principal (1) |
|
Pay |
|
— |
|
— |
|
— |
|
— |
|
Receive |
CHF principal (1) |
|
Receive |
|
— |
|
— |
|
— |
|
— |
|
Pay |
USD interest (2) |
|
— |
|
Receive |
|
Receive |
|
Receive |
|
Receive |
|
Receive |
CHF interest (2) |
|
— |
|
Pay |
|
Pay |
|
Pay |
|
Pay |
|
Pay |
See Part I, Item 1, Note 1, Nature of Operations and Basis of Presentation, of the Notes to Consolidated Condensed Financial Statements in this Report for further information.
Interest Rate Risks
As of June 29, 2026, 76.5% of our total debt was based on fixed rates. Based on our borrowings as of June 29, 2026, an assumed 100 basis point change in variable rates would cause our annual interest cost to change by $2.3 million.
Debt Instruments
The fiscal calendar maturities of our debt instruments for the next five years and thereafter were as follows:
|
|
As of June 29, 2026 |
|||||||||||||||||||||||||||||||||||
|
|
Remaining |
|
|
2027 |
|
|
2028 |
|
|
2029 |
|
|
2030 |
|
|
Thereafter |
|
|
Total |
|
|
Fair |
|
|
Weighted |
|||||||||||
|
|
(In thousands, except interest rates) |
|||||||||||||||||||||||||||||||||||
Variable Rate (1) |
|
$ |
2,000 |
|
|
$ |
5,000 |
|
|
$ |
3,000 |
|
|
$ |
4,000 |
|
|
$ |
386,000 |
|
|
$ |
80,000 |
|
|
$ |
480,000 |
|
|
$ |
481,000 |
|
|
|
5.36 |
|
% |
Fixed Rate |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
500,000 |
|
|
|
— |
|
|
|
— |
|
|
|
500,000 |
|
|
|
481,760 |
|
|
|
4.00 |
|
|
Total |
|
$ |
2,000 |
|
|
$ |
5,000 |
|
|
$ |
3,000 |
|
|
$ |
504,000 |
|
|
$ |
386,000 |
|
|
$ |
80,000 |
|
|
$ |
980,000 |
|
|
$ |
962,760 |
|
|
|
|
|
|
There have been no other material changes to our risks as previously disclosed in Item 7A, Quantitative and Qualitative Disclosures About Market Risk, in our Annual Report on Form 10-K for the fiscal year ended December 29, 2025.
28
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, under the supervision and with the participation of our CEO and CFO, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our CEO and CFO have concluded that, as of June 29, 2026, such disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms and (2) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosures.
In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 29, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
29
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may become a party to various legal proceedings arising in the ordinary course of our business. There can be no assurance that we will prevail in any such litigation. We believe that the amount of any reasonably possible or probable loss for known matters would not be material to our financial statements; however, the outcome of these actions is inherently difficult to predict. In the event of an adverse outcome, the ultimate potential loss could have a material adverse effect on our financial condition, results of operations, or cash flows in a particular period.
Item 1A. Risk Factors
During the quarter ended June 29, 2026, we identified the following material change to a risk factor that was previously disclosed in Part I, Item 1A, Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended December 29, 2025.
We are subject to risks of currency exchange rate fluctuations.
A portion of our cash, other assets, and liabilities is held in currencies other than the USD. Changes in exchange rates among other currencies and the USD will affect the value of these assets or liabilities and could negatively impact the amount of cash available to fund operations or repay debt. To the extent that we decide to repatriate some portion of these funds to the United States, the actual value transferred could be impacted by movements in exchange rates. Additionally, we expect to have revenues, expenses, and costs denominated in currencies other than the USD, which include but are not limited to the RMB, the MYR, the CHF, and the Euro. Fluctuations in the exchange rates between the USD and the RMB, the MYR, the CHF, the Euro, or any other currency where we are exposed to foreign currency risk and do not hedge to manage such risk could result in increases in our expenses or decreases in our revenues, which could negatively impact our business, financial condition, and results of operations. In connection with the proposed STG acquisition, we entered into a deal-contingent USD/CHF cross-currency swap, as disclosed in more detail above. Significant inflation or disproportionate changes in foreign exchange rates could occur from general economic conditions, acts of war or terrorism, changes in governmental monetary or tax policy, or changes in local interest rates. Further, China’s government imposes controls over the convertibility of RMB into foreign currencies, which subjects us to further currency exchange risk.
There have been no other material changes in our risk factors as previously disclosed in Part I, Item 1A, Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended December 29, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
On May 8, 2025, our Board of Directors authorized a new share repurchase program, under which we may repurchase up to $100.0 million in value of our outstanding shares of common stock from time to time through May 7, 2027.
We did not repurchase any shares of our common stock during the quarter ended June 29, 2026.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Rule 10b5-1 Trading Plans
During the quarter ended June 29, 2026, none of our directors and/or officers (as defined in Rule 16a-1(f) under the Exchange Act)
30
Item 6. Exhibits
Exhibit |
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|
|
Filed/Furnished |
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Incorporated by Reference |
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Number |
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Exhibit Description |
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Herewith |
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Form |
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File Number |
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Exhibit |
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Filing Date |
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|
|
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10.1‡ |
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X |
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10.2‡ |
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|
8-K |
|
000-31285 |
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10.1 |
|
May 8, 2026 |
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10.3 |
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|
8-K |
|
000-31285 |
|
10.1 |
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June 3, 2026 |
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|
|
|
|
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|
31.1 |
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CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
X |
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31.2 |
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CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
X |
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32.1* |
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CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
X |
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|
|
|
|
|
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|
|
32.2* |
|
CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
101.INS |
|
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
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|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
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|
104 |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
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|
‡ Management contract or compensatory plan.
* Furnished herewith. The certifications attached as Exhibits 32.1 and 32.2 that accompany this Report are not deemed filed with the Commission and are not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this Report, irrespective of any general incorporation language contained in such filing.
31
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
TTM Technologies, Inc. |
|
|
|
|
|
|
|
|
/s/ Daniel L. Boehle |
|
|
|
Dated: August 5, 2026 |
|
Daniel L. Boehle |
|
|
Executive Vice President and Chief Financial Officer |
|
|
(Principal Financial Officer and Principal Accounting Officer and duly authorized signatory) |
32