TTM Technologies Inc: Form 10-Q for the period ended Sep 28, 2026

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

On September 16, 2026, we consummated our purchase of all outstanding shares of STG for total cash consideration of $401.2 million. STG produces rigid, rigid-flex, and flex PCB solutions as well as manufacturing and coating capabilities for miniaturized microcircuits. STG operates facilities in both Switzerland and Germany and has a global customer base that includes leading manufacturers in surgical robotics, hearing aids, medical imaging, and implantable solutions. Refer to Part I, Item 1, Note 13, Acquisitions, of the Notes to Consolidated Condensed Financial Statements included in this Report for further information.

On September 24, 2026, we issued our $500.0 million of Senior Notes due 2034, which bear interest at a rate of 6.750% per annum. Refer to 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 for further information.

On September 30, 2026, we entered into the Third Amended and Restated Credit Agreement, which amended and restated the 2026 Credit Agreement and provided for the Incremental Facilities, which were funded on September 30, 2026 in connection with the Epiq acquisition described below. The terms of the Amended Term Loan Facility and the RCF as set forth under the 2026 Credit Agreement remain unchanged. Refer to 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 for further information.

On September 30, 2026, we consummated our acquisition of all of the issued and outstanding membership interest of Epiq for total cash consideration of $1,100.0 million, subject to certain customary post-closing adjustments. We funded the purchase price, including all related fees and adjustments, from a portion of the proceeds of borrowings from our Senior Notes due 2034 and the proceeds of borrowings from our Incremental Facilities. Refer to Part I, Item 1, Note 13, Acquisitions, of the Notes to Consolidated Condensed Financial Statements included in this Report for further information. Because the acquisition was consummated after September 28, 2026, Epiq’s results of operations and financial position are not reflected in our consolidated results for the quarter or three quarters ended September 28, 2026.

On October 19, 2026, we announced that we had entered into a definitive agreement to acquire Ophir Optics for a purchase price of $650.0 million in an all-cash transaction, subject to customary post-closing adjustments. We expect to close this proposed acquisition in the second quarter of 2027.

We previously announced that we entered into two definitive agreements to acquire companies in Europe. These proposed acquisitions are immaterial and are expected to close in the fourth quarter of 2026, subject to the satisfaction of regulatory approvals and other customary closing conditions.

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 five largest customers collectively accounted for 42% and 44% of our net sales for the quarter and three quarters ended September 28, 2026, respectively. Sales to our five largest customers collectively accounted for 45% and 44% of our net sales for the quarter and three quarters ended September 29, 2025, respectively.

The percentage of our net sales attributable to each of the principal end markets we served was as follows:

(1) The end market revenue for the quarter and three quarters ended September 29, 2025 has been recast to reflect the combination of the data center computing and networking end markets.

(2) Sales to EMS companies are classified by the end markets of their OEM customers.

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:

(In thousands, except margin rates)

Net Sales

Total net sales increased $451.1 million, or 59.9%, to $1,203.9 million for the quarter ended September 28, 2026, from $752.7 million for the quarter ended September 29, 2025. The primary drivers of this increase were 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 medical, industrial, and instrumentation and aerospace and defense end markets.

Total net sales increased $921.9 million, or 43.2%, to $3,053.9 million for the three quarters ended September 28, 2026, from $2,132.0 million for the three quarters ended September 29, 2025. The primary drivers of this increase were the same as discussed in the paragraph above.

Gross Profit and Margin Rate

Gross profit increased $135.1 million to $291.9 million for the quarter ended September 28, 2026, from $156.7 million for the quarter ended September 29, 2025. Gross margin rate increased to 24.2% for the quarter ended September 28, 2026, from 20.8% for the quarter ended September 29, 2025. These increases were primarily due to higher sales volume, favorable product mix, and improved operational execution.

Gross profit increased $249.1 million to $684.9 million for the three quarters ended September 28, 2026, from $435.8 million for the three quarters ended September 29, 2025. Gross margin rate increased to 22.4% for the three quarters ended September 28, 2026, from 20.4% for the three quarters ended September 29, 2025. These increases were primarily due to higher sales volume, favorable product mix, and improved operational execution.

Operating Expenses

Operating expenses increased $44.8 million to $129.6 million for the quarter ended September 28, 2026, from $84.8 million for the quarter ended September 29, 2025, primarily due to higher acquisition costs, stock-based compensation, incentive compensation expense, legal expenses, and labor costs.

Operating expenses increased $89.3 million to $341.1 million for the three quarters ended September 28, 2026, from $251.9 million for the three quarters ended September 29, 2025, primarily due to higher stock-based compensation, acquisition costs, labor costs, and incentive compensation expense. 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 $90.3 million to $162.3 million for the quarter ended September 28, 2026, from $71.9 million for the quarter ended September 29, 2025. Operating margin rate increased to 13.5% for the quarter ended September 28, 2026, from 9.6% for the quarter ended September 29, 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 $159.8 million to $343.8 million for the three quarters ended September 28, 2026, from $183.9 million for the three quarters ended September 29, 2025. Operating margin rate increased to 11.3% for the three quarters ended September 28, 2026, from 8.6% for the three quarters ended September 29, 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 $10.5 million to $20.6 million for the quarter ended September 28, 2026, from $10.1 million for the quarter ended September 29, 2025, primarily due to a higher amount of foreign exchange losses during the quarter ended September 28, 2026 resulting from strengthening RMB and MYR as compared to the quarter ended September 29, 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. In addition, we had realized and unrealized losses on derivative instruments intended to economically mitigate the foreign currency risk of the CHF-denominated purchase price of the STG acquisition.

Total other expense, net increased $26.7 million to $62.3 million for the three quarters ended September 28, 2026, from $35.6 million for the three quarters ended September 29, 2025, primarily due to realized and unrealized losses on derivative instruments intended to economically mitigate the foreign currency risk of the CHF-denominated purchase price of the STG acquisition and a higher amount of foreign exchange losses during the three quarters ended September 28, 2026 resulting from strengthening RMB and MYR as compared to the three quarters ended September 29, 2025.

For more details on the realized and unrealized losses on derivative instruments, see Part I, Item 1, Note 12, Cross-currency Swap, of the Notes to Consolidated Condensed Financial Statements included in this Report for more details.

Income Taxes

Income tax expense increased $48.1 million to $56.9 million for the quarter ended September 28, 2026, from $8.8 million for the quarter ended September 29, 2025, primarily due to higher tax expense driven by increased income before income taxes and uncertain tax position reserves, partially offset by tax benefits from the deduction of stock-based compensation.

Income tax expense increased $42.1 million to $63.6 million for the three quarters ended September 28, 2026, from $21.6 million for the three quarters ended September 29, 2025, primarily due to higher tax expense driven by increased income before income taxes, partially offset by tax benefits from the deduction of stock-based compensation.

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 $80.8 million and $41.9 million as of September 28, 2026 and September 29, 2025, respectively.

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:

(In thousands, except margin rates)

(1) Amortization of definite-lived intangibles relates to the A&D reportable segment, but is not reviewed separately by the CODM.

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 $72.1 million, or 20.9%, to $416.5 million for the quarter ended September 28, 2026, from $344.5 million for the quarter ended September 29, 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 $155.0 million, or 15.6%, to $1,151.0 million for the three quarters ended September 28, 2026, from $995.9 million for the three quarters ended September 29, 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 $21.0 million to $77.0 million for the quarter ended September 28, 2026, from $56.0 million for the quarter ended September 29, 2025. Segment operating margin rate for the A&D reportable segment increased to 18.5% for the quarter ended September 28, 2026, from 16.3% for the quarter ended September 29, 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 $49.2 million to $195.7 million for the three quarters ended September 28, 2026, from $146.5 million for the three quarters ended September 29, 2025. Segment operating margin rate for the A&D reportable segment increased to 17.0% for the three quarters ended September 28, 2026, from 14.7% for the three quarters ended September 29, 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 $379.0 million, or 92.7%, to $787.9 million for the quarter ended September 28, 2026, from $408.9 million for the quarter ended September 29, 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 $767.3 million, or 67.5%, to $1,904.5 million for the three quarters ended September 28, 2026, from $1,137.2 million for the three quarters ended September 29, 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 $106.2 million to $166.3 million for the quarter ended September 28, 2026, from $60.0 million for the quarter ended September 29, 2025. Segment operating margin rate for the Commercial reportable segment increased to 21.1% for the quarter ended September 28, 2026, from 14.7% for the quarter ended September 29, 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 $196.8 million to $360.5 million for the three quarters ended September 28, 2026, from $163.7 million for the three quarters ended September 29, 2025. Segment operating margin rate for the Commercial reportable segment increased to 18.9% for the three quarters ended September 28, 2026, from 14.4% for the three quarters ended September 29, 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 acquisitions of Ophir Optics and other companies in Europe, 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 three quarters of 2026 was $272.9 million as compared to cash flow provided by operating activities of $229.0 million in the same period in 2025. The increase in cash flow was primarily due to an increase in net income of $91.1 million partially offset by increased working capital largely driven by the timing of collections.

Net cash used in investing activities during the first three quarters of 2026 was $613.7 million, primarily resulting from the use of $369.1 million for the acquisition of STG, net of cash acquired and $251.6 million for net purchases of property, plant, and equipment and other assets, partially offset by the receipt of $14.5 million of proceeds from the sale of property, plant, and equipment and other assets. Net cash used in investing activities during the first three quarters of 2025 was $222.7 million, primarily resulting from the use of $223.2 million for net purchases of property, plant, and equipment and other assets.

Net cash provided by financing activities during the first three quarters of 2026 was $715.6 million, primarily reflecting proceeds from $1,079.2 million of long-term debt borrowings, partially offset by $344.3 million for the repayment of long-term debt borrowings, $12.0 million for the payment of debt issuance costs, and $5.8 million for the repayment of customer deposits. Net cash used in financing activities during the first three quarters of 2025 was $19.2 million, reflecting the use of $17.9 million for repurchases of our common stock and $2.8 million for the repayment of long-term debt borrowings, partially offset by $1.5 million of customer deposits.

As of September 28, 2026, we had cash and cash equivalents of approximately $876.3 million, of which approximately $241.1 million was held by our foreign subsidiaries, primarily in China, $733.9 million of available borrowing capacity under our RCF, and $8.5 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.

Subsequent to September 28, 2026, we consummated the acquisition of Epiq and paid approximately $1,100.0 million in cash consideration, subject to customary post‑closing adjustments. Refer to Part I, Item 1, Note 13, Acquisitions, of the Notes to Consolidated Condensed Financial Statements included in this Report for further information. The purchase price and related fees and expenses were funded with borrowings under the Incremental Facilities and a portion of the net proceeds of the Senior Notes due 2034. Refer to 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 for further information.

Our total 2026 capital expenditures are expected to be in the range of $410.0 million to $430.0 million, which we increased primarily due to our recently announced plan to invest an additional $400.0 million in additional capacity expansion to support our growing demand for AI infrastructure.

Share Repurchases

On May 8, 2025, our Board of Directors authorized the 2025 Share 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 and three quarters ended September 28, 2026. As of September 28, 2026, the remaining amount in value available to be repurchased under the 2025 Share Repurchase Program was $100.0 million.

On October 26, through October 27, 2026, subsequent to the end of the fiscal third quarter, we repurchased 1.2 million shares of our common stock for a total cost of approximately $100.0 million (including commissions). Upon completion of these share repurchases, we had no remaining value available to be repurchased under the 2025 Share Repurchase Program. Additionally, on October 27, 2026, our Board of Directors authorized the 2026 Share Repurchase Program allowing us to repurchase our outstanding common stock with an aggregate market value of up to $100.0 million from time to time through October 27, 2027.

Long-term Debt and Letters of Credit

As of September 28, 2026, we had $1,643.9 million of outstanding debt, net of discount and issuance costs, composed of $498.0 million of Senior Notes due 2029, $491.0 million of Senior Notes due 2034, $394.9 million under the Amended Term Loan Facility, and $260.0 million under the RCF. On September 30, 2026, subsequent to the end of the fiscal third quarter, we entered into the Third Amended and Restated Credit Agreement, which amended and restated the 2026 Credit Agreement and provided for Incremental Facilities, refer to 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 for further information.

Pursuant to the terms of the Senior Notes due 2029, Senior Notes due 2034, 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 September 28, 2026, we were in compliance with the covenants under the Senior Notes due 2029, Senior Notes due 2034, 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 and revolving debt will be adequate to meet our currently anticipated capital expenditure, acquisitions, acquisition integration costs, 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 $21.5 million and $12.5 million as of September 28, 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 September 28, 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 September 28, 2026, amounted to $422.0 million, which is expected to be settled as follows: $65.0 million within 1 year, $166.7 million within 1-3 years, $72.3 million within 4-5 years, and $118.0 million thereafter. For debt obligations based on variable rates, interest rates used are as of September 28, 2026.

As of September 28, 2026, we had total undiscounted future minimum lease commitments of $25.1 million for leases that are expected to commence subsequent to the end of the fiscal third quarter. See Part I, Item 1, Note 11, Commitments and Contingencies, of the Notes to Consolidated Condensed Financial Statements included in this Report.

As of September 28, 2026, and other than as disclosed herein, 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.

Foreign Currency Exchange Rate Risks

In connection with the acquisition of STG, a foreign subsidiary based in Switzerland, we are exposed to foreign currency risk from our CHF-denominated net investment against fluctuations in CHF/USD exchange rates. As a net investment hedge of our investment in STG, we entered into a fixed-for-fixed USD/CHF cross-currency swap with a major financial institution. As of September 28, 2026, the swap had a net fair value liability of $10.1 million. The terms of the swap were as follows:

(In thousands, except interest rates)

(1) Effective September 16, 2026 and matures on September 16, 2033.

(2) Settlements commence March 16, 2027 through maturity, settled semiannually each March 16 and September 16.

See Part I, Item 1, Note 12, Cross-currency Swap, of the Notes to Consolidated Condensed Financial Statements in this Report for further information.

Interest Rate Risks

As of September 28, 2026, 75.3% of our total debt was based on fixed rates. Based on our borrowings as of September 28, 2026, an assumed 100 basis point change in variable rates would cause our annual interest cost to change by $4.1 million.

Debt Instruments

The fiscal calendar maturities of our debt instruments for the next five years and thereafter were as follows:

(In thousands, except interest rates)

(1) Interest rate swap effectively fixed $250,000 of variable rate debt.

There have been no other material changes to our risks as previously disclosed in Part II, 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.

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 Report. Based on this evaluation, our CEO and CFO have concluded that, as of September 28, 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 September 28, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We have 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 have manufacturing facilities and serve customers outside the United States and are subject to the risks characteristic of international operations, including tariffs.

We have significant manufacturing operations in China, elsewhere in Asia and Canada and recently-added facilities in Switzerland and Germany, as well as sales offices located in Asia and Europe. We continue to pursue acquisitions of foreign companies, such as the pending acquisitions of Ophir Optics and other companies in Europe, and consider additional opportunities to make foreign investments and construct new foreign facilities.

In addition, for the quarter and three quarters ended September 28, 2026, we generated approximately 63% and 59% of our net sales from non-U.S. operations, respectively, and a significant portion of our manufacturing material was provided by international suppliers during this period. The United States’ trade policies and those of foreign countries are subject to change which could adversely affect our ability to purchase and sell goods and materials without significant tariffs, taxes, or duties that may be imposed on the materials we purchase or the goods we sell, thereby increasing the cost of such materials and potentially decreasing our margins. Further, our revenues could be impacted if our customers’ ability to sell their goods is reduced by such tariffs, taxes, or duties. Both the U.S. and Chinese governments have included PCBs among items subjected to tariffs imposed on imports from such countries, which may negatively impact our revenue and profitability. In addition, we are subject to risks relating to significant international operations, including but not limited to: managing international operations and longer payment cycles; imposition of governmental controls, unstable regulatory environments, and government or political unrest; limitations on imports or exports and/or increases in duties and taxation levied on our products; inflation or changes in political and economic conditions; labor unrest, rising wages, difficulties in staffing, geographical labor shortages, and compliance with employment laws; conflict or war between nations over territory that impacts the electronics supply chain leading to potential trade restrictions to and from the nations involved, including Russia, Ukraine, and China; language, communication, and cultural barriers, as well as time zone differences; potentially adverse tax consequences; expropriation of private enterprises; strained trade relationships between the United States and its trading partners, including trade tariffs which could create competitive pricing risk; and government imposed sanction laws and regulations.

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. We entered into a USD/CHF cross-currency swap to hedge our net investment in STG from fluctuations in the USD/CHF exchange rate, see Part I, Item 1, Note 12, Cross-currency Swap, of the Notes to Consolidated Condensed Financial Statements in this Report for further information. 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.

We have pursued and intend to continue to pursue acquisitions and divestitures of assets and businesses and may encounter risks associated with these activities, including with regard to the integration of acquired businesses. If we are unable to manage our growth effectively, our business, financial condition, and results of operations could be materially adversely affected.

As part of our business strategy, we have increased our focus on pursuing acquisitions of businesses, technologies, assets, or product lines that complement or expand our business, such as our recent acquisitions of STG and Epiq, and our proposed acquisitions of Ophir Optics and other companies in Europe, and potential divestitures, such as our sale of Shanghai Backplane Assembly.

Acquisitions of high-technology companies and assets are inherently risky, and no assurance can be given that our prior or future acquisitions will be successful. Failure to manage and successfully integrate acquisitions we make could have a material adverse effect on our business, financial condition, and results of operations. Even when an acquired company has already developed and marketed products, product enhancements may not be made in a timely fashion. In addition, unforeseen issues might arise with respect to such products after any such acquisition.

As we continue to experience growth in the scope and complexity of our operations, we may be required to implement additional operating and financial controls and hire and train additional personnel. There can be no assurance that we will be able to do so in the future, and failure to do so could jeopardize our expansion plans and seriously harm our operations.

In the case of foreign acquisitions and investments, we may face additional challenges associated with integrating operations across different cultures and languages, as well as economic, tax, currency, political, legal, and regulatory risks associated with the countries in which such acquisitions and investments are made.

Other challenges and risks with regard to acquisitions include that they do not advance our business strategy, that we get an unsatisfactory return on our investment, that they raise new compliance-related obligations and challenges, that they distract management from our other businesses, and that announced transactions may not be completed. We also have limited ability to control or influence third-party sellers, which may impact our ability to realize the anticipated benefits.

The success of our acquisitions will depend in part on our ability to leverage new businesses to enhance our existing products and services, as well as the acquired companies’ ability to meet our policies and processes in areas such as data governance, privacy, digital safety, responsible AI, and cybersecurity. It may take longer than expected to realize the full economic benefits from acquisitions, such as increased revenue or enhanced efficiencies, or the benefits may ultimately be smaller than we expected. We have recorded, and may in the future be required to record, a significant charge in our consolidated financial statements during the period in which any impairment of our goodwill or amortizable intangible assets is determined, negatively affecting our results of operations. In addition, an acquisition may be subject to challenge even after it has been completed. These events could adversely affect our business, operations, financial condition, and results of operations.

We have substantial outstanding indebtedness, and our outstanding indebtedness could adversely impact our liquidity and flexibility in obtaining additional financing, our ability to fulfill our debt obligations, and our financial condition and results of operations.

We have incurred, and may continue to incur, substantial debt in connection with our operations and acquisition strategy. As a result, we have, and expect to continue to have, significant debt service obligations with respect to the RCF, Incremental Facilities, Amended Term Loan Facility, the Senior Notes due 2029, the Senior Notes due 2034, and other debt instruments. We and a number of our direct and indirect subsidiaries also have various credit facilities and letters of credit. Such agreements also contain certain financial covenants which require us to maintain, under the occurrence of certain events, a consolidated fixed-charge coverage ratio.

Our high level of debt could have important consequences to our business. For example, it could:

• make it more difficult for us to satisfy all of our debt obligations, which could in turn result in an event of default on such indebtedness;
• require us to use a substantial portion of our cash flow from operations for debt service payments, thereby reducing the availability of cash for working capital, capital expenditures, acquisitions, and other general corporate purposes;
• impair our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions and other investments, or general corporate purposes, which may limit our ability to execute our business strategy;
• diminish our ability to withstand a downturn in our business, the industries in which we operate or the economy generally, or restrict us from exploiting business opportunities or making acquisitions;
• limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate or the general economy;
• increase our vulnerability to general adverse economic and industry conditions, including movements in interest rates, which could result in increased borrowing costs;
• limit management’s discretion in operating our business; and
• place us at a competitive disadvantage as compared to our competitors that have less debt as it could limit our ability to capitalize on future business opportunities and to react to competitive pressures or adverse changes.

Subject to the limits contained in the Third Amended and Restated Credit Agreement, the indentures governing the Senior Notes due 2029 and the Senior Notes due 2034 and our other debt instruments, we may be able to incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other purposes. If we do so, the risks related to our high level of debt could intensify.

In addition, the Third Amended and Restated Credit Agreement, the indentures governing the Senior Notes due 2029 and Senior Notes due 2034 and our other debt instruments contain restrictive covenants that limit our ability to engage in activities that may be in our long-term best interest. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all our debt and limit management’s discretion in operating our business.

Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

Our RCF, Incremental Facilities, and Amended Term Loan Facility are subject to interest at a floating rate of Term SOFR plus a margin, and as a result, we have exposure to interest rate risk. Increases in interest rates increase our cost of borrowing and/or potentially make it more difficult to refinance our existing indebtedness, if necessary. We endeavored to mitigate this risk by entering into a four‑year pay-fixed, receive-floating (1-month CME Term SOFR) interest rate swap arrangement in March 2023. The swap has a notional amount of $250.0 million for the period beginning April 1, 2023 and ending on April 1, 2027. Under the terms of the interest rate swap, we pay a fixed rate of 3.49% against the first interest payments of a portion of our Term SOFR-based debt and receive floating 1-month CME Term SOFR during the swap period. Although we have taken measures to mitigate our risk to interest rate increases, our swap instruments may not be wholly effective in mitigating this risk or otherwise provide an effective hedge against all interest rate volatility. See Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk and Interest Rate Risks, in our Annual Report on Form 10-K for the fiscal year ended December 29, 2025 for further information.

Servicing our debt requires a significant amount of cash and we may not be able to generate sufficient cash to service all of our debt and may be forced to take other actions to satisfy our obligations under our debt, which may not be successful.

Based on certain parameters defined in the Third Amended and Restated Credit Agreement, including a Consolidated First Lien Leverage Ratio, we may be required to make an additional principal payment on an annual basis if our Consolidated First Lien Leverage Ratio is greater than 2.00:1.00.

Our ability to make scheduled payments on or to refinance our debt obligations and to fund planned capital expenditures and expansion efforts depends on our ability to generate cash in the future and our financial condition and operating performance.

If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and be forced to reduce or delay investments and capital expenditures, dispose of material assets or operations, seek additional capital (which could include obtaining additional equity capital on terms that may be onerous or highly dilutive), or restructure or refinance our indebtedness. We may not be able to affect any such alternative measures and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations. Additionally, the Third Amended and Restated Credit Agreement, the indentures governing the Senior Notes due 2029 and Senior Notes due 2034, and other debt instruments restrict our ability to effect such alternative measures to repay other indebtedness when it becomes due.

We conduct certain of our operations through our subsidiaries, and repayment of our indebtedness may be dependent on their generation of cash flow and ability to make such cash available to us. Our subsidiaries do not have any obligation to, and may not be able or permitted to, pay amounts due on our indebtedness unless they are guarantors of our indebtedness. While the Third Amended and Restated Credit Agreement, the indentures governing the Senior Notes due 2029 and Senior Notes due 2034, and other debt instruments limit the ability of our subsidiaries to incur consensual restrictions on their ability to pay dividends or make other intercompany payments to us, these limitations are subject to qualifications and exceptions. Additionally, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from our subsidiaries.

Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, would materially and adversely affect our financial position and results of operations and our ability to satisfy our obligations under our indebtedness. If we cannot make scheduled payments on our debt, we will be in default and holders of the Senior Notes due 2029 or of the Senior Notes due 2034 could declare all outstanding principal and interest to be due and payable, the lenders under the RCF, Incremental Facilities, and Amended Term Loan Facility, could terminate their commitments to loan money, the lenders could foreclose against the assets securing their borrowings and we could be forced into bankruptcy or liquidation.

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.