As of March 30, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations for long‑term contracts was $393,556. The Company expects to recognize revenue on approximately 62% of the remaining performance obligations for the Company’s long-term contracts over the next 12 months with the remaining amount expected to be recognized thereafter. The remaining performance obligations for the Company’s short‑term contracts are expected to be recognized within one year, and the Company is applying the optional permitted exemption to forgo disclosing the amount of transaction price allocated to the remaining performance obligations for contracts with an expected duration of one year or less.
Revenue recognized for the quarter ended March 30, 2026 from amounts recorded as contract liabilities as of December 29, 2025 was $42,002. Revenue recognized for the quarter ended March 31, 2025 from amounts recorded as contract liabilities as of December 30, 2024 was $22,496.
Revenue from products and services transferred to customers over time and at a point in time accounted for 96% and 4%, respectively, of the Company's revenue for both the quarters ended March 30, 2026 and March 31, 2025.
Disaggregated revenue by principal end markets within reportable segments was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended |
|
|
|
March 30, 2026 |
|
|
March 31, 2025 |
|
|
|
A&D |
|
|
Commercial |
|
|
Total |
|
|
A&D |
|
|
Commercial |
|
|
Total |
|
|
|
(In thousands) |
|
End Markets (1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace and Defense |
|
$ |
341,557 |
|
|
$ |
— |
|
|
$ |
341,557 |
|
|
$ |
307,418 |
|
|
$ |
— |
|
|
$ |
307,418 |
|
Automotive |
|
|
— |
|
|
|
69,770 |
|
|
|
69,770 |
|
|
|
— |
|
|
|
71,354 |
|
|
|
71,354 |
|
Data Center and Networking |
|
|
8,663 |
|
|
|
293,084 |
|
|
|
301,747 |
|
|
|
7,911 |
|
|
|
179,539 |
|
|
|
187,450 |
|
Medical, Industrial, and Instrumentation |
|
|
966 |
|
|
|
131,936 |
|
|
|
132,902 |
|
|
|
909 |
|
|
|
81,537 |
|
|
|
82,446 |
|
Total |
|
$ |
351,186 |
|
|
$ |
494,790 |
|
|
$ |
845,976 |
|
|
$ |
316,238 |
|
|
$ |
332,430 |
|
|
$ |
648,668 |
|
(1)The end market revenue for the quarter ended March 31, 2025 has been recast to reflect certain adjustments to allocations resulting from the segment reorganizations that occurred during the quarters ended March 30, 2026 and June 30, 2025 as well as the combination of the data center computing and networking end markets. The end market revenue excludes intersegment sales totaling $731 and $287 for the quarters ended March 30, 2026 and March 31, 2025, respectively. See Note 4, Segment Information, for further information.
(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 $156,445 and $191,925 as of March 30, 2026 and December 29, 2025, respectively. The Company maintains its cash and cash equivalents with major financial institutions and such balances exceed Federal Deposit Insurance Corporation (FDIC) insurance limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risk on cash and cash equivalents.
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 March 30, 2026 and December 29, 2025, one customer accounted for 13% and 14%, respectively, of the Company's accounts receivable.
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.
For the quarter ended March 30, 2026, two customers collectively accounted for approximately 26% of the Company's net sales. For the quarter ended March 31, 2025, one customer accounted for approximately 12% of the Company's net sales.
(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 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.
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 President and Chief Executive Officer, to assess performance and to allocate resources. The CODM uses segment operating income to allocate resources such as employees and capital resources for each segment during the Company’s annual budgeting and forecasting process. Total sales and operating profit by segment include
(7) Long-term Debt and Letters of Credit
Long-term debt was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
|
March 30, 2026 |
|
|
December 29, 2025 |
|
|
|
Interest Rate |
|
Principal
Outstanding |
|
|
Interest Rate |
|
Principal
Outstanding |
|
|
|
(In thousands, except interest rates) |
|
Senior Notes due March 2029 |
|
|
4.00 |
|
% |
|
$ |
500,000 |
|
|
|
4.00 |
|
% |
|
$ |
500,000 |
|
Term Loan due May 2030 |
|
|
5.91 |
|
|
|
|
341,303 |
|
|
|
5.97 |
|
|
|
|
342,169 |
|
Asia ABL Revolving Loan due June 2028 |
|
|
4.96 |
|
|
|
|
80,000 |
|
|
|
5.02 |
|
|
|
|
80,000 |
|
Other |
|
|
5.99 |
|
|
|
|
1,925 |
|
|
|
5.99 |
|
|
|
|
1,981 |
|
Total debt |
|
|
|
|
|
|
923,228 |
|
|
|
|
|
|
|
924,150 |
|
Less: Unamortized debt issuance costs |
|
|
|
|
|
|
(5,274 |
) |
|
|
|
|
|
|
(5,617 |
) |
Less: Unamortized debt discount |
|
|
|
|
|
|
(2,261 |
) |
|
|
|
|
|
|
(2,382 |
) |
Subtotal |
|
|
|
|
|
|
915,693 |
|
|
|
|
|
|
|
916,151 |
|
Less: Current maturities |
|
|
|
|
|
|
(3,851 |
) |
|
|
|
|
|
|
(3,815 |
) |
Long-term debt, less current maturities |
|
|
|
|
|
$ |
911,842 |
|
|
|
|
|
|
$ |
912,336 |
|
Debt Covenants
Borrowings under the Senior Notes due 2029 and 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 ABL Revolving Loans are subject to various financial covenants, including leverage and fixed-charge coverage ratios.
Debt Issuance Costs and Debt Discount
Remaining unamortized debt issuance costs and debt discount were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
March 30, 2026 |
|
December 29, 2025 |
|
|
Debt
Issuance Costs |
|
|
Debt
Discount |
|
|
Effective
Interest Rate |
|
Debt
Issuance Costs |
|
|
Debt
Discount |
|
|
Effective
Interest Rate |
|
|
(In thousands, except interest rates) |
Senior Notes due March 2029 |
|
$ |
2,414 |
|
|
$ |
— |
|
|
|
4.18 |
|
% |
|
$ |
2,608 |
|
|
$ |
— |
|
|
|
4.18 |
|
% |
Term Loan due May 2030 |
|
|
2,860 |
|
|
|
2,261 |
|
|
|
8.01 |
|
|
|
|
3,009 |
|
|
|
2,382 |
|
|
|
8.01 |
|
|
Total |
|
$ |
5,274 |
|
|
$ |
2,261 |
|
|
|
|
|
|
$ |
5,617 |
|
|
$ |
2,382 |
|
|
|
|
|
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 ABL Revolving Loans of $784 and $874 as of March 30, 2026 and December 29, 2025, respectively, are included in deposits and other non-current assets and are amortized to interest expense over the duration of the ABL Revolving Loans using the straight-line method of amortization.
As of March 30, 2026, the remaining weighted average amortization period for all unamortized debt issuance costs and debt discount was 3.6 years.
(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 ended March 30, 2026, the Company’s effective tax rate was impacted by a net discrete benefit of $2,816. The net discrete benefit was primarily related to the deduction of stock‑based compensation, partially offset by a deferred tax expense related to the approval of the High and New Technology Enterprise (HNTE) status for a manufacturing subsidiary in China.
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. and so a deferred tax liability has been recorded for foreign withholding taxes and the estimated federal/state tax impact on any repatriation. For those other companies 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 |
|
|
|
March 30, 2026 |
|
|
March 31, 2025 |
|
|
|
(In thousands, except per share amounts) |
|
Net income |
|
$ |
49,988 |
|
|
$ |
32,178 |
|
|
|
|
|
|
|
|
Basic weighted average shares |
|
|
103,832 |
|
|
|
101,866 |
|
Dilutive effect of PRUs, RSUs, and stock options |
|
|
3,252 |
|
|
|
2,664 |
|
Diluted shares |
|
|
107,084 |
|
|
|
104,530 |
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
Basic earnings per share |
|
$ |
0.48 |
|
|
$ |
0.32 |
|
Diluted earnings per share |
|
|
0.47 |
|
|
|
0.31 |
|
For the quarter ended March 30, 2026, there were no PRUs, RSUs, or stock options that would have had an anti-dilutive impact. For the quarter ended March 31, 2025, PRUs and RSUs to purchase 130 shares of common stock were not included in the computation of diluted earnings per share. The PRUs were not included in the computation of diluted earnings per share because the performance conditions had not been met, and for the RSUs, the total expected proceeds under the treasury stock method were greater than the average market price of common stock and, as a result, the impact would be anti-dilutive.
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 $100,000 in value of the Company’s outstanding shares of common stock from time to time through May 7, 2027. The Company may repurchase shares through open market purchases, privately‑negotiated transactions, or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 of the Exchange Act, which sets certain restrictions on the method, timing, price, and volume of open market stock repurchases. In addition, the Company adopted one trading plan in accordance with Rule 10b5-1 of the Exchange Act to facilitate certain purchases that may be effected under the share repurchase program. The timing, manner, price, and amount of any repurchases will be determined at the Company’s discretion, and the share repurchase program may be suspended, terminated, or modified at any time for any reason. The repurchase program does not obligate the Company to acquire any specific number of shares.
During the quarter ended March 30, 2026, the Company did not repurchase any shares. As of March 30, 2026, the remaining amount in value available to be repurchased under the 2025 Repurchase Program was $100,000.
Accumulated Other Comprehensive Loss
The components of accumulated other comprehensive loss, net of tax, were as follows:
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
|
March 30, 2026 |
|
|
December 29, 2025 |
|
|
|
(In thousands) |
|
Foreign currency translation |
|
$ |
(33,239 |
) |
|
$ |
(33,374 |
) |
Pension obligation |
|
|
2,891 |
|
|
|
2,891 |
|
Cash flow hedges |
|
|
482 |
|
|
|
(447 |
) |
Total |
|
$ |
(29,866 |
) |
|
$ |
(30,930 |
) |
(10) Fair Value Measures
The carrying amount and estimated fair value of the Company’s financial instruments were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
|
March 30, 2026 |
|
|
December 29, 2025 |
|
|
|
Carrying Amount |
|
|
Fair Value |
|
|
Carrying Amount |
|
|
Fair Value |
|
|
|
(In thousands) |
|
Derivative assets, current |
|
$ |
4,230 |
|
|
$ |
4,230 |
|
|
$ |
5,212 |
|
|
$ |
5,212 |
|
Derivative liabilities, current |
|
|
— |
|
|
|
— |
|
|
|
31 |
|
|
|
31 |
|
Derivative liabilities, non-current |
|
|
— |
|
|
|
— |
|
|
|
382 |
|
|
|
382 |
|
Senior Notes due March 2029 |
|
|
497,586 |
|
|
|
477,825 |
|
|
|
497,392 |
|
|
|
488,325 |
|
Term Loan due May 2030 |
|
|
336,182 |
|
|
|
344,289 |
|
|
|
336,778 |
|
|
|
345,806 |
|
ABL Revolving Loans |
|
|
80,000 |
|
|
|
80,000 |
|
|
|
80,000 |
|
|
|
80,000 |
|
Other loan |
|
|
1,925 |
|
|
|
1,925 |
|
|
|
1,981 |
|
|
|
1,981 |
|
The fair value of the derivative instruments was determined using pricing models developed based on the 1-month Chicago Mercantile Exchange (CME) Term Secured Overnight Financing Rate (SOFR) swap rate 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, as necessary.
The fair value of the long-term debt was estimated based on quoted market prices, where available, as of March 30, 2026 and December 29, 2025, which are considered Level 2 inputs.
As of March 30, 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 March 30, 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 $16,375 and $12,535 as of March 30, 2026 and December 29, 2025, respectively.
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.
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 measure customers based on OEM companies as they are the ultimate end customers. Sales to our ten largest customers collectively accounted for 56% of our net sales for both the quarters ended March 30, 2026 and March 31, 2025.
The percentage of our net sales attributable to each of the principal end markets we served was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended |
|
|
March 30, 2026 |
|
March 31, 2025 (1) |
End Markets (2): |
|
|
|
|
|
|
|
|
Aerospace and Defense |
|
|
40 |
|
% |
|
|
48 |
|
% |
Automotive |
|
|
8 |
|
|
|
|
11 |
|
|
Data Center and Networking |
|
|
36 |
|
|
|
|
28 |
|
|
Medical, Industrial, and Instrumentation |
|
|
16 |
|
|
|
|
13 |
|
|
Total |
|
|
100 |
|
% |
|
|
100 |
|
% |
(1)The end market revenue for the quarter ended March 31, 2025 has been recast to reflect certain adjustments to allocations resulting from the segment reorganization that occurred during the quarter ended June 30, 2025 as well as 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:
|
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended |
|
|
|
March 30, 2026 |
|
|
March 31, 2025 |
|
|
|
(In thousands, except margin rates) |
|
Net sales |
|
$ |
845,976 |
|
|
$ |
648,668 |
|
Cost of goods sold |
|
|
664,795 |
|
|
|
517,696 |
|
Gross profit |
|
|
181,181 |
|
|
|
130,972 |
|
Gross margin |
|
|
21.4 |
% |
|
|
20.2 |
% |
Operating expenses: |
|
|
|
|
|
|
Selling and marketing |
|
|
24,994 |
|
|
|
21,271 |
|
General and administrative |
|
|
68,745 |
|
|
|
43,774 |
|
Research and development |
|
|
7,808 |
|
|
|
8,064 |
|
Amortization of definite-lived intangibles |
|
|
6,889 |
|
|
|
6,889 |
|
Restructuring charges |
|
|
296 |
|
|
|
714 |
|
Total operating expenses |
|
|
108,732 |
|
|
|
80,712 |
|
Operating income |
|
|
72,449 |
|
|
|
50,260 |
|
Operating margin |
|
|
8.6 |
% |
|
|
7.7 |
% |
Total other expense, net |
|
|
(13,924 |
) |
|
|
(9,269 |
) |
Income tax provision |
|
|
(8,537 |
) |
|
|
(8,813 |
) |
Net income |
|
$ |
49,988 |
|
|
$ |
32,178 |
|
Net Sales
Total net sales increased $197.3 million, or 30.4%, to $846.0 million for the quarter ended March 30, 2026, from $648.7 million for the quarter ended March 31, 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 medical, industrial, and instrumentation and aerospace and defense end markets.
Gross Profit and Margin Rate
Gross profit increased $50.2 million to $181.2 million for the quarter ended March 30, 2026, from $131.0 million for the quarter ended March 31, 2025. Gross margin rate increased to 21.4% for the quarter ended March 30, 2026, from 20.2% for the quarter ended March 31, 2025. These increases were primarily due to higher sales volume, favorable product mix, and improved operational execution, partially offset by continued ramp-up costs in connection with our fabrication plant in Penang, Malaysia.
Operating Expenses
Operating expenses increased $28.0 million to $108.7 million for the quarter ended March 30, 2026, from $80.7 million for the quarter ended March 31, 2025, primarily due to higher stock-based compensation, labor costs, and incentive compensation. 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 $22.2 million to $72.4 million for the quarter ended March 30, 2026, from $50.3 million for the quarter ended March 31, 2025. Operating margin rate increased to 8.6% for the quarter ended March 30, 2026, from 7.7% for the quarter ended March 31, 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 $4.7 million to $13.9 million for the quarter ended March 30, 2026, from $9.3 million for the quarter ended March 31, 2025, primarily due to a higher amount of foreign exchange losses during the quarter ended March 30, 2026 resulting from strengthening RMB and MYR during the quarter ended March 30, 2026 as compared to the quarter ended March 31, 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.
Income Taxes
Income tax expense decreased $0.3 million to $8.5 million for the quarter ended March 30, 2026, from $8.8 million for the quarter ended March 31, 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 $45.2 million and $40.6 million as of March 30, 2026 and March 31, 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:
|
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended |
|
|
|
March 30, 2026 |
|
|
March 31, 2025 |
|
|
|
(In thousands, except margin rates) |
|
Segment sales: |
|
|
|
|
|
|
A&D |
|
$ |
351,664 |
|
|
$ |
316,250 |
|
Commercial |
|
|
495,043 |
|
|
|
332,705 |
|
Total |
|
$ |
846,707 |
|
|
$ |
648,955 |
|
Segment operating income: |
|
|
|
|
|
|
A&D |
|
$ |
54,779 |
|
|
$ |
42,369 |
|
Commercial |
|
|
81,568 |
|
|
|
43,649 |
|
Total |
|
|
136,347 |
|
|
|
86,018 |
|
Segment operating margin rate: |
|
|
|
|
|
|
A&D |
|
|
15.6 |
% |
|
|
13.4 |
% |
Commercial |
|
|
16.5 |
% |
|
|
13.1 |
% |
Total |
|
|
16.1 |
% |
|
|
13.3 |
% |
Unallocated amounts: |
|
|
|
|
|
|
Restructuring |
|
|
(296 |
) |
|
|
(714 |
) |
Acquisition-related and other charges |
|
|
(197 |
) |
|
— |
|
Stock-based compensation |
|
|
(24,356 |
) |
|
|
(8,787 |
) |
Other corporate expenses |
|
|
(29,825 |
) |
|
|
(17,033 |
) |
Amortization of definite-lived intangibles (1) |
|
|
(9,224 |
) |
|
|
(9,224 |
) |
Operating income |
|
$ |
72,449 |
|
|
$ |
50,260 |
|
(1)Amortization of definite-lived intangibles relates to the A&D and Commercial reportable segments, but is not reviewed separately by the CODM. For the quarters ended March 30, 2026 and March 31, 2025, amortization expense of $2,335 is included in cost of goods sold for the A&D reportable segment.
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 Chief Executive Officer, 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 $35.4 million, or 11.2%, to $351.7 million for the quarter ended March 30, 2026, from $316.3 million for the quarter ended March 31, 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 Operating Income and Margin Rate
Segment operating income for the A&D reportable segment increased $12.4 million to $54.8 million for the quarter ended March 30, 2026, from $42.4 million for the quarter ended March 31, 2025. Segment operating margin rate for the A&D reportable segment increased to 15.6% for the quarter ended March 30, 2026, from 13.4% for the quarter ended March 31, 2025. The primary drivers of these increases were higher sales volume, as discussed above, favorable product mix, and improved operational execution.
Commercial
Segment Sales
Segment sales for the Commercial reportable segment increased $162.3 million, or 48.8%, to $495.0 million for the quarter ended March 30, 2026, from $332.7 million for the quarter ended March 31, 2025. The primary driver of this increase was 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 Operating Income and Margin Rate
Segment operating income for the Commercial reportable segment increased $37.9 million to $81.6 million for the quarter ended March 30, 2026, from $43.6 million for the quarter ended March 31, 2025. Segment operating margin rate for the Commercial reportable segment increased to 16.5% for the quarter ended March 30, 2026, from 13.1% for the quarter ended March 31, 2025. The primary driver of these increases was higher sales volume, as discussed above, and improved operational execution, partially offset by increased ramp-up costs in connection with our fabrication plant in Penang, Malaysia.
Liquidity and Capital Resources
Our principal sources of liquidity have been cash provided by operations, the issuance of debt, and borrowings under our revolving credit facilities. 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, 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 quarter of 2026 was $21.7 million as compared to cash flow used in operating activities of $10.7 million in the same period in 2025. The increase in cash flow was primarily due to an increase in net income of $17.8 million.
Net cash used in investing activities during the first quarter of 2026 was $106.8 million, consisting of net purchases of property, plant, and equipment and other assets. Net cash used in investing activities during the first quarter of 2025 was $63.2 million, primarily resulting from the use of $63.3 million for purchases of property, plant, and equipment and other assets.
Net cash used in financing activities during the first quarter of 2026 was $6.2 million, primarily resulting from the repayments of $5.0 million for customer deposits and $0.9 million for long-term debt borrowings. Net cash used in financing activities during the first quarter of 2025 was $18.8 million, reflecting the use of $17.9 million for repurchases of common stock and $0.9 million for the repayment of long-term debt borrowings.
As of March 30, 2026, we had cash and cash equivalents of approximately $410.0 million, of which approximately $156.4 million was held by our foreign subsidiaries, primarily in China, and $189.5 million of available borrowing capacity under our revolving credit facilities. 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 $300.0 million to $320.0 million, primarily for capacity expansion to meet market demand.
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 March 30, 2026. As of March 30, 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 March 30, 2026, we had $915.7 million of outstanding debt, net of discount and issuance costs, composed of $497.6 million of Senior Notes due 2029, $336.2 million under the Term Loan Facility, $80.0 million under the Asia ABL, and $1.9 million of other loans.
Pursuant to the terms of the Senior Notes due 2029 and Term Loan Facility, we are subject to certain affirmative and negative covenants, including limitations on indebtedness, corporate transactions, investments, dispositions, and restricted payments. Under the ABL Revolving Loans, we are also subject to various financial covenants, including leverage and fixed-charge coverage ratios. As of March 30, 2026, we were in compliance with the covenants under the Senior Notes due 2029, Term Loan Facility, and ABL Revolving Loans.
Based on our current level of operations, we believe that cash generated from operations, cash on hand, and cash from the issuance of term and revolving debt will be adequate to meet our currently anticipated capital expenditure, 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 $16.4 million and $12.5 million as of March 30, 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. As of March 30, 2026, there were no 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.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no 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.
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 March 30, 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 March 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.