# Skyworks Solutions, Inc.: Form 10-Q for the period ended Jun 28, 2024

- Company: [Skyworks Solutions, Inc.](/companies/swks.md) (CIK 4127)
- Form: 10-Q
- Filed: 2024-07-31
- Accepted by EDGAR: Jul 30, 2024, 17:56 ET
- Period: 2024-06-28
- Accession: 0000004127-24-000070
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/4127/000000412724000070/swks-20240628.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/4127/000000412724000070/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-06-28.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-03-30 to 2024-06-28 | $905.5m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2023-09-30 to 2024-06-28 | $3.15bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2024-03-30 to 2024-06-28 | $541.4m | us-gaap:CostOfRevenue |
| Cost of revenue | 9 months, 2023-09-30 to 2024-06-28 | $1.86bn | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2024-03-30 to 2024-06-28 | $364.1m | us-gaap:GrossProfit |
| Gross profit | 9 months, 2023-09-30 to 2024-06-28 | $1.29bn | us-gaap:GrossProfit |
| Research and development | 3 months, 2024-03-30 to 2024-06-28 | $160.7m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 9 months, 2023-09-30 to 2024-06-28 | $468.1m | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2024-03-30 to 2024-06-28 | $71.2m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months, 2023-09-30 to 2024-06-28 | $226.7m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2024-03-30 to 2024-06-28 | $130.4m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2023-09-30 to 2024-06-28 | $578.0m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2024-03-30 to 2024-06-28 | $6.6m | us-gaap:InterestExpense |
| Interest expense | 9 months, 2023-09-30 to 2024-06-28 | $23.8m | us-gaap:InterestExpense |
| Income tax | 3 months, 2024-03-30 to 2024-06-28 | $12.5m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2023-09-30 to 2024-06-28 | $42.5m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-03-30 to 2024-06-28 | $120.9m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2023-09-30 to 2024-06-28 | $535.5m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-03-30 to 2024-06-28 | $0.75 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2023-09-30 to 2024-06-28 | $3.32 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-03-30 to 2024-06-28 | $0.75 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2023-09-30 to 2024-06-28 | $3.34 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-03-30 to 2024-06-28 | 161,400,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2023-09-30 to 2024-06-28 | 161,400,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2023-09-30 to 2024-06-28 | $1.35bn | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2023-09-30 to 2024-06-28 | $74.2m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 3 months, 2024-03-30 to 2024-06-28 | $109.1m | us-gaap:PaymentsOfDividendsCommonStock |
| Dividends paid | 9 months, 2023-09-30 to 2024-06-28 | $327.1m | us-gaap:PaymentsOfDividendsCommonStock |
| Share repurchases | 9 months, 2023-09-30 to 2024-06-28 | $77.3m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2024-06-28 | $1.26bn | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-06-28 | $3.24bn | us-gaap:AssetsCurrent |
| Total assets | at 2024-06-28 | $8.24bn | us-gaap:Assets |
| Current liabilities | at 2024-06-28 | $562.9m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-06-28 | $1.90bn | us-gaap:Liabilities |
| Long-term debt | at 2024-06-28 | $994.0m | us-gaap:LongTermDebt |
| Current portion of debt | at 2024-06-28 | $0 | us-gaap:DebtCurrent |
| Shareholders' equity | at 2024-06-28 | $6.34bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 18,463 characters.

This report and other documents we have filed with the SEC contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and are subject to the “safe harbor” created by those sections. Any statements that are not statements of historical fact should be considered to be forward-looking statements. Words such as “anticipates,” “believes,” “continues,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” targets,” “will,” “would,” and similar expressions or variations or negatives of such words are intended to identify forward-looking statements but are not the exclusive means of identifying forward-looking statements in this report. Additionally, statements concerning future matters such as the possible impacts of geopolitical conflicts, inflation, recession, and global health crises, as well as the development of new products, enhancements of technologies, sales levels, expense levels, the benefits of acquisitions we have made or may make in the future, and other statements regarding matters that are not historical are forward-looking statements. Although forward-looking statements in this report reflect the good faith judgment of our management as of the date the statement is first made, such statements can only be based on facts and factors then known and understood by us. Consequently, forward-looking statements involve inherent risks and uncertainties, and actual financial results and outcomes may differ materially and adversely from the results and outcomes discussed in, or anticipated by, the forward-looking statements. A number of important factors could cause actual financial results to differ materially and adversely from those in the forward-looking statements. We urge you to consider the risks and uncertainties discussed in the 2023 10-K, under the heading “Risk Factors” and in the other documents filed by us with the SEC in evaluating our forward-looking statements. We have no plans, and undertake no obligation, to revise or update our forward-looking statements to reflect any event or circumstance that may arise after the date of the initial filing of this Quarterly Report on Form 10-Q. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made.

In this document, the words “we,” “our,” “ours,” “us,” and “the Company” refer only to Skyworks Solutions, Inc., and its subsidiaries and not any other person or entity.

### RESULTS OF OPERATIONS

### Three and Nine Months Ended June 28, 2024, and June 30, 2023

The following table sets forth the results of our operations expressed as a percentage of net revenue:

|  | Three Months Ended June 28, 2024 | June 30, 2023 | Nine Months Ended June 28, 2024 | June 30, 2023 |
| --- | ---: | ---: | ---: | ---: |
| Net revenue | 100.0% | 100.0% | 100.0% | 100.0% |
| Cost of goods sold | 59.8 | 56.7 | 59.1 | 54.2 |
| Gross profit | 40.2 | 43.3 | 40.9 | 45.8 |
| Operating expenses: |  |  |  |  |
| Research and development | 17.7 | 13.8 | 14.8 | 12.9 |
| Selling, general, and administrative | 7.9 | 7.2 | 7.2 | 6.8 |
| Amortization of intangibles | — | 0.4 | — | 0.8 |
| Restructuring, impairment, and other charges | 0.2 | 0.4 | 0.6 | 0.8 |
| Total operating expenses | 25.8 | 21.8 | 22.6 | 21.3 |
| Operating income | 14.4 | 21.5 | 18.3 | 24.4 |
| Interest expense | 0.7 | 1.5 | 0.8 | 1.5 |
| Other income, net | 1.1 | 0.7 | 0.8 | 0.4 |
| Income before income taxes | 14.8 | 20.7 | 18.3 | 23.4 |
| Provision for income taxes | 1.4 | 2.5 | 1.3 | 2.7 |
| Net income | 13.4% | 18.3% | 17.0% | 20.8% |

### OVERVIEW

We, together with our consolidated subsidiaries, are empowering the wireless networking revolution. Our highly innovative analog and mixed-signal semiconductors are connecting people, places, and things spanning a number of new and previously unimagined applications within the aerospace, automotive, broadband, cellular infrastructure, connected home, defense, entertainment and gaming, industrial, medical, smartphone, tablet, and wearable markets.

### General

During the three months ended June 28, 2024, the following key factors contributed to our overall results of operations, financial position, and cash flows:

- Net revenue decreased to $905.5 million for the three months ended June 28, 2024, as compared to $1,071.2 million for the corresponding period in fiscal 2023, driven primarily by a decrease in demand for our mobile and mixed-signal products.
- Our ending cash, cash equivalents, and marketable securities balance increased to $1,283.9 million. The increase in cash, cash equivalents, and marketable securities during the three months ended June 28, 2024, was primarily due to cash generated from operations of $273.5 million, partially offset by dividend payments of $109.1 million, share repurchases of $77.4 million, and capital expenditures of $24.4 million.

### Net Revenue

*(dollars in millions)*

|  | Three Months Ended June 28, 2024 | Change | June 30, 2023 | Nine Months Ended June 28, 2024 | Change | June 30, 2023 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Net revenue | $905.5 | (15.5)% | $1,071.2 | $3,153.0 | (11.3)% | $3,553.6 |

We market and sell our products directly to OEMs of communications and electronics products, third-party original design manufacturers and contract manufacturers, and indirectly through electronic components distributors. We generally experience seasonal peaks during our fourth and first fiscal quarters (which correspond to the second half of the calendar year), primarily as a result of increased worldwide production of consumer electronics in anticipation of holiday sales, whereas our second and third fiscal quarters are typically lower and in line with seasonal industry trends.

The decrease in net revenue for the three and nine months ended June 28, 2024, as compared with the corresponding periods in fiscal 2023, was driven primarily by a decrease in demand for our mobile and mixed-signal products.

### Gross Profit

*(dollars in millions)*

|  | Three Months Ended June 28, 2024 | Change | June 30, 2023 | Nine Months Ended June 28, 2024 | Change | June 30, 2023 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Gross profit | $364.1 | (21.5)% | $464.1 | $1,291.0 | (20.8)% | $1,629.2 |
| % of net revenue | 40.2% |  | 43.3% | 40.9% |  | 45.8% |

Gross profit represents net revenue less cost of goods sold. Our cost of goods sold consists primarily of purchased materials, labor, and overhead (including depreciation, share-based compensation expense, and amortization of acquisition intangibles) associated with product manufacturing. Erosion of average selling prices of established products is typical of the semiconductor industry. Consistent with trends in the industry, we anticipate that average selling prices for our established products will continue to decline over time. As part of our normal course of business, we intend to improve gross profit with efforts to increase unit volumes, improve manufacturing efficiencies, lower manufacturing costs of existing products, and by introducing new and higher value-added products.

The decrease in gross profit for the three and nine months ended June 28, 2024, as compared with the corresponding periods in fiscal 2023, was primarily the result of an unfavorable product mix, lower unit volumes, and lower average selling prices.

### Research and Development

*(dollars in millions)*

|  | Three Months Ended June 28, 2024 | Change | June 30, 2023 | Nine Months Ended June 28, 2024 | Change | June 30, 2023 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Research and development | $160.7 | 8.6% | $148.0 | $468.1 | 1.8% | $460.0 |
| % of net revenue | 17.7% |  | 13.8% | 14.8% |  | 12.9% |

Research and development expenses consist primarily of direct personnel costs including share-based compensation expense, costs for pre-production evaluation, and testing of new devices, non-production masks, engineering prototypes, and design tool costs.

The increase in research and development expenses for the three and nine months ended June 28, 2024, as compared with the corresponding periods in fiscal 2023, was primarily related to an increase in certain headcount-related expenses as a result of our increased investment in developing new technologies and products, partially offset by a decrease in depreciation expense as a result of extending the useful lives of certain machinery and equipment. For information regarding this change in accounting estimate, refer to Note 1 of the Notes to Consolidated Financial Statements.

### Selling, General, and Administrative

*(dollars in millions)*

|  | Three Months Ended June 28, 2024 | Change | June 30, 2023 | Nine Months Ended June 28, 2024 | Change | June 30, 2023 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Selling, general, and administrative | $71.2 | (7.8)% | $77.2 | $226.7 | (5.8)% | $240.7 |
| % of net revenue | 7.9% |  | 7.2% | 7.2% |  | 6.8% |

Selling, general, and administrative expenses include legal and related costs, accounting, treasury, human resources, information systems, customer service, bad debt expense, sales commissions, share-based compensation expense, advertising, marketing, costs associated with business combinations completed or contemplated during the period, and other costs.

The decrease in selling, general, and administrative expenses for the three and nine months ended June 28, 2024, as compared with the corresponding periods in fiscal 2023, was primarily related to a gain on the sale of property, plant, and equipment, a decrease in professional services costs, and a decrease in share-based compensation.

### Amortization of Intangibles

*(dollars in millions)*

|  | Three Months Ended June 28, 2024 | Change | June 30, 2023 | Nine Months Ended June 28, 2024 | Change | June 30, 2023 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Amortization of intangibles | $0.2 | (94.7)% | $3.8 | $0.7 | (97.6)% | $29.5 |
| % of net revenue | —% |  | 0.4% | —% |  | 0.8% |

The decrease in amortization expense for the three and nine months ended June 28, 2024, as compared with the corresponding periods in fiscal 2023, was primarily due to certain intangible assets that were acquired in prior fiscal years reaching the end of their useful lives.

### Restructuring, Impairment, and Other Charges

*(dollars in millions)*

|  | Three Months Ended June 28, 2024 | Change | June 30, 2023 | Nine Months Ended June 28, 2024 | Change | June 30, 2023 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Restructuring, impairment, and other charges | $1.6 | (63.6)% | $4.4 | $17.5 | (37.5)% | $28.0 |
| % of net revenue | 0.2% |  | 0.4% | 0.6% |  | 0.8% |

Restructuring, impairment, and other charges for the three months ended June 28, 2024 was primarily due to employee severance costs. Restructuring, impairment, and other charges for the nine months ended June 28, 2024 was primarily related to the abandonment of a previously capitalized IPR&D project.

Restructuring, impairment, and other charges for the three months ended June 30, 2023 was primarily due to employee severance costs. Restructuring, impairment, and other charges for the nine months ended June 30, 2023 was primarily due to impairment charges on divested assets.

### Interest Expense

*(dollars in millions)*

|  | Three Months Ended June 28, 2024 | Change | June 30, 2023 | Nine Months Ended June 28, 2024 | Change | June 30, 2023 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Interest expense | $6.6 | (59.3)% | $16.2 | $23.8 | (54.2)% | $52.0 |
| % of net revenue | 0.7% |  | 1.5% | 0.8% |  | 1.5% |

The decrease in interest expense for the three and nine months ended June 28, 2024, as compared with the corresponding periods in fiscal 2023, was due to the repayment of the outstanding balance on the Term Loans (as defined below).

### Other Income, Net

*(dollars in millions)*

|  | Three Months Ended June 28, 2024 | Change | June 30, 2023 | Nine Months Ended June 28, 2024 | Change | June 30, 2023 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Other income, net | $9.6 | 26.3% | $7.6 | $23.8 | 75.0% | $13.6 |
| % of net revenue | 1.1% |  | 0.7% | 0.8% |  | 0.4% |

The increase in other income, net for the three and nine months ended June 28, 2024, as compared with the corresponding periods in fiscal 2023, was primarily due to an increase in interest income generated from marketable securities.

### Provision for Income Taxes

*(dollars in millions)*

|  | Three Months Ended June 28, 2024 | Change | June 30, 2023 | Nine Months Ended June 28, 2024 | Change | June 30, 2023 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Provision for income taxes | $12.5 | (52.5)% | $26.3 | $42.5 | (55.1)% | $94.6 |
| % of net revenue | 1.4% |  | 2.5% | 1.3% |  | 2.7% |

We recorded a provision for income taxes of $12.5 million (which consisted of $8.6 million and $3.9 million related to United States and foreign income taxes, respectively) and $42.5 million (which consisted of $16.0 million and $26.5 million related to United States and foreign income taxes, respectively) for the three and nine months ended June 28, 2024, respectively.

The decrease in income tax expense for the three and nine months ended June 28, 2024, as compared with the corresponding periods in fiscal 2023, was primarily due to lower income from operations and a lower tax on GILTI, partially offset by an increase in the shortfall in tax deductions for share-based compensation.

### LIQUIDITY AND CAPITAL RESOURCES

*(in millions)*

|  | Nine Months Ended June 28, 2024 | June 30, 2023 |
| --- | ---: | ---: |
| Cash and cash equivalents at beginning of period | $718.8 | $566.0 |
| Net cash provided by operating activities | 1,348.6 | 1,490.9 |
| Net cash used in investing activities | (84.5) | (146.2) |
| Net cash used in financing activities | (719.5) | (1,189.1) |
| Cash and cash equivalents at end of period | $1,263.4 | $721.6 |

### Cash provided by operating activities:

Cash provided by operating activities consists of net income for the period adjusted for certain non-cash items and changes in certain operating assets and liabilities. The $142.3 million decrease in cash provided by operating activities during the nine months ended June 28, 2024, as compared with the corresponding period in fiscal 2023, was primarily related to lower net income, partially offset by favorable changes in working capital of $109.3 million, due primarily to a decrease in inventory.

### Cash used in investing activities:

Cash used in investing activities consists primarily of capital expenditures, cash paid to acquire intangible assets, and cash paid to purchase marketable securities, offset by cash received related to the sale or maturity of marketable securities. The $61.7 million decrease in cash used in investing activities during the nine months ended June 28, 2024, as compared with the corresponding period in fiscal 2023, was primarily related to a decrease of $256.4 million in purchases of marketable securities and a decrease of $66.0 million in cash used for capital expenditures, partially offset by a decrease of $263.7 million in sales of marketable securities.

### Cash used in financing activities:

Cash used in financing activities consists primarily of proceeds and payments related to our long-term borrowings and cash transactions related to equity. The $469.6 million decrease in cash used in financing activities during the nine months ended June 28, 2024, as compared with the corresponding period in fiscal 2023, was primarily related to a decrease of $400.0 million for the repayment of debt, a decrease of $98.0 million in stock repurchase activity, partially offset by an increase of $30.4 million in dividend payments.

### Liquidity:

Cash, cash equivalents, and marketable securities totaled $1,283.9 million as of June 28, 2024, representing an increase of $545.4 million from September 29, 2023.

We have outstanding $500.0 million of Notes Due 2026 and $500.0 million of Notes Due 2031 (the “Notes”). During the nine months ended June 28, 2024, we repaid $300.0 million of outstanding borrowings under the term loans (the “Term Loans”) that the Company borrowed on July 26, 2021 under a $1.0 billion term loan facility (the “Term Loan Facility”). As of June 28, 2024, there were no borrowings outstanding under the Term Loan Facility. We have a Revolving Credit Agreement (the “Revolving Credit Agreement”) under which we may borrow up to $750.0 million for general corporate purposes and working capital needs of the Company and its subsidiaries. As of June 28, 2024, there were no borrowings outstanding under the revolving credit facility (the “Revolver”). The Revolving Credit Agreement expires July 26, 2026.

Based on our historical results of operations, we expect that our cash, cash equivalents, and marketable securities on hand, the cash we expect to generate from operations, and funds from our Revolver, will be sufficient to fund our short-term and long-term liquidity requirements primarily arising from: research and development, capital expenditures, potential acquisitions, working capital, quarterly cash dividend payments (if such dividends are declared by the Board of Directors), outstanding commitments, and other liquidity requirements associated with existing operations. However, we cannot be certain that our cash on hand, cash generated from operations, and funds from our Revolver will be available in the future to fund all of our capital and operating requirements. In addition, any future strategic investments and significant acquisitions may require additional cash and capital resources. If we are unable to obtain sufficient cash or capital to meet our needs on a timely basis and on favorable terms, our business and operations could be materially and adversely affected.

Our invested cash balances primarily consist of highly liquid marketable securities that are available to meet near-term cash requirements including: money market funds, U.S. Treasury and government securities, corporate bonds and notes, and municipal bonds.

Our contractual obligations disclosure in the 2023 10-K has not materially changed since we filed that report.

## Market risk

As filed, 3,753 characters.

We are subject to overall financial market risks, such as changes in market liquidity, credit quality, investment risk, interest rate risk, and foreign exchange rate risk as described below.

### Investment and Interest Rate Risk

Our exposure to interest rate and general market risks relates to our investment portfolio. Our investment portfolio consists of cash and cash equivalents (money market funds, municipal bonds, and U.S. Treasury and government securities purchased with less than ninety days until maturity) that total approximately $1,263.4 million, and marketable securities (U.S. Treasury and government securities, corporate bonds and notes, and municipal bonds) that total approximately $5.6 million and $14.9 million within short-term and long-term marketable securities, respectively, as of June 28, 2024.

The main objectives of our investment activities are liquidity and preservation of capital. Our cash equivalent investments have short-term maturity periods that dampen the impact of market or interest rate risk. Our marketable securities have short-term maturity periods less than one year. Credit risk associated with our investments is not material because our investments are diversified across several types of securities with high credit ratings, which reduces the amount of credit exposure to any one investment.

Based on our results of operations for the three and nine months ended June 28, 2024, a hypothetical reduction in the interest rates on our cash, cash equivalents, and other investments to zero would result in an immaterial reduction of interest income with a de minimis impact on income before taxes.

We do not believe that investment or interest rate risks currently pose material exposures to our business or results of operations.

### Foreign Exchange Rate Risk

Substantially all sales to customers and arrangements with third-party manufacturers provide for pricing and payment in United States dollars, thereby reducing the impact of foreign exchange rate fluctuations on our results. A percentage of our international operational expenses are denominated in foreign currencies, and exchange rate volatility could positively or negatively impact those operating costs. Increases in the value of the United States dollar relative to other currencies could make our products more expensive, which could negatively impact our ability to compete. Conversely, decreases in the value of the United States dollar relative to other currencies could result in our suppliers raising their prices to continue doing business with us. Given the relatively small number of customers and arrangements with third-party manufacturers denominated in foreign currencies, we do not believe that foreign exchange volatility has a material impact on our current business or results of operations. However, fluctuations in currency exchange rates could have a greater effect on our business or results of operations in the future to the extent our expenses increasingly become denominated in foreign currencies.

We may enter into foreign currency forward and options contracts with financial institutions to protect against foreign exchange risks associated with certain existing assets and liabilities, certain firmly committed transactions, forecasted future cash flows, and net investments in foreign subsidiaries. However, we may choose not to hedge certain foreign exchange exposures for a variety of reasons, including, but not limited to, accounting considerations and the prohibitive economic cost of hedging particular exposures. For the three and nine months ended June 28, 2024 and June 30, 2023, we had not entered into any outstanding foreign currency forward or options contracts with financial institutions.

## Controls and procedures

As filed, 2,183 characters.

### Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of June 28, 2024. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well-designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on management’s evaluation of our disclosure controls and procedures as of June 28, 2024, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

### Changes in Internal Control Over Financial Reporting

During the third quarter of fiscal 2024, we completed the implementation of our new enterprise resource planning (“ERP”) system and have modified certain existing internal control processes and procedures related to the new system. These changes did not materially affect our internal control over financial reporting. As we implement new functionality under this ERP system, we will continue to assess the impact on our internal control over financial reporting.

## Risk factors

As filed, 271 characters.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, Item 1A Risk Factors in the 2023 10-K, which could materially affect our business, financial condition, or future results.

Filed Jul 31, 2024.
Source: SEC EDGAR, the filing index for accession 0000004127-24-000070. Last ingested by Listed: Oct 30, 2026, 13:55 ET. No prices; not investment advice.