ICHR 10-K & 10-Q changes, risk factors and insider trading

•We may be subject to interruptionsinterruptions, failures, or failurescybersecurity breaches in our information technology systems.

•WeIf previouslywe identified material weaknesses in our internal control over financial reporting, and the failurefail to maintain an effective system of internal controls and proceduresprocedures, it may cause investors to lose confidence in our financial reporting.

Our business, financial condition and results of operations depend significantly on expenditures by manufacturers in the semiconductor capital equipment industry. In turn, the semiconductor capital equipment industry depends upon the current and anticipated market demand for semiconductor devices. The semiconductor device industry is subject to cyclical and volatile fluctuations in supply and demand and in the past has experienced significant downturns, including in the fourth quarter of 2022, which often occur in connection with declines in general economic conditions, and which have resulted in significant volatility in the semiconductor capital equipment industry and resulted in weakened customer demand. The semiconductor device industry has also experienced recurring periods of over-supply of products that have had a severe negative effect on the demand for capital equipment used to manufacture such products. Even as the industry recovers from periods of downturns, inventory digestion at our customers and the relative spending levels within our primary served markets, in particular lower spending levels for deposition and etch equipment, may result in decreased demand from our customers, such as in 2023 and early 2024. Our revenue exposure to specific end markets and technology nodes may amplify cyclicality, and downturns with respect to the demand for certain of our products may disproportionately impact our results even when other products are experiencing growth. We anticipate that we will continue to experience significant fluctuations in customer orders for our products and services as a result of such fluctuations and cycles, which may have a material adverse effect on our business, financial condition and results of operations.

In addition, we must be able to appropriately align our cost structure with prevailing market conditions, effectively manage our supply chain and motivate and retain employees, particularly during periods of decreasing demand for our products. We may be forced to reduce our prices during periods of decreasing demand. During the fourththird quarter of 2022,2025, we initiated laborthe costConsolidation reductionRestructuring initiativesPlan to better align our resourcesfootprint with the decreased demand environment, which continued through the second quarter of 2024.environment. While we operate under a low fixed cost model, we may not be able to proportionally reduce all of our costs if we are required to reduce our prices. The cyclical and volatile nature of the semiconductor device industry and the absence of long-term fixed or minimum volume contracts make any effort to project a material reduction in future sales volume difficult. If we overbuild inventory in a period of decreased demand, or we expand our operations and workforce too rapidly, or procure excessive resources in anticipation of increased demand for our products, and that demand does not materialize at the pace at which we expect, or declines, our operating results may be adversely affected as a result of underutilization of capacity, charges related to excess or obsolete inventory, asset impairment or inventory write-downs, increased operating expenses or reduced margins. For example, in the fourth quarter of 2024, gross margin was impacted by costs related to our efforts to ramp headcount and other resources to address expected incremental demand in early 2025, which were unable to be fully absorbed during the quarter. Further, any future capacity expansion by us or our competitors could also lead to overcapacity and oversaturation in our target markets, which could lead to price erosion that could adversely impact our operating results.

Continuing uncertainty regarding the global economy and geopolitical instability continues to pose challenges to our business. Geopolitical instability, including the conflict between Russia and Ukraine, the conflict in the Middle East, actual and potential shifts in U.S. (including as a result of the 2024 U.S. presidential and congressional elections) and foreign trade, economic and other policies, and rising trade tensions between the U.S. and China, as well as other global events, have significantly increased macroeconomic uncertainty at a global level. The current macroeconomic environment is characterized by high inflation, supply chain challenges, shortages of skilled labor and higher labor costs, high interest rates, foreign currency exchange volatility, volatility in the global capital markets, and uncertainty in debt markets, which exacerbates negative trends in business and consumer spending and causes certain of our customers to push out, cancel or refrain from placing orders for products or services, which may reduce sales, reduce our backlog, increase our inventory and materially adversely affect our business, financial condition and results of operations. While inflation has slowed from its peak in 2022 and the U.S. Federal Reserve decreased the federal funds rate in 2024,2024 and 2025, the rate continues to be elevated and there can be no assurances that the rate will continue to decrease or that it will not be increased in 20252026 or beyond. Further, difficulties in obtaining capital, uncertain market conditions or reduced profitability may also cause some customers to scale back operations, exit businesses, merge with other manufacturers, or file for bankruptcy protection and potentially cease operations, leading to customers’ reduced research and development funding or capital expenditures and, in turn, lower orders from our customers or additional slow moving or obsolete inventory or bad debt expense for us. These conditions may also similarly affect our key suppliers, which could impair their ability to deliver parts and result in delays for our products or require us to procure products from higher-cost suppliers, or if no additional suppliers exist, to reconfigure the design and manufacture of our products, and we may be unable to fulfill some customer orders. Any of these conditions or events could have a material adverse effect on our business, financial condition and results of operations.

We may be subject to interruptionsinterruptions, failures, or failurescybersecurity breaches in our information technology systems.

We may be the target of attempted cyber-attacks, computer viruses, malicious code, phishing attacks, denial of service attacks and other information security threats. In addition, to the extent artificial intelligence capabilities improve and are increasingly adopted, they may be used to identify vulnerabilities and to implement increasingly sophisticated cyber-attacks. To date, cyber-attacks have not had a material impact on our financial condition, results or business; however, our efforts to maintain the security and integrity of our information technology systems may not be effective and security breaches or disruptions could result in material financial or other losses in the future, especially if we are not able to predict the probability and the severity of these attacks. Our risk and exposure to these matters remains heightened because of, among other things, the evolving nature of these threats, the current global economic and political environment, our prominent size and scale, the outsourcing of some of our business operations to foreign jurisdictions, the ongoing shortage of qualified cyber-security professionals, and the interconnectivity and interdependence of third parties to our systems. The occurrence of a cyber-attack, breach, unauthorized access, misuse, computer virus or other malicious code or other cyber-security event could jeopardize or result in the unauthorized disclosure, gathering, monitoring, misuse, corruption, loss or destruction of confidential and other information that belongs to us, our customers, our counterparties, third-party service providers or borrowers that is processed and stored in, and transmitted through, our computer systems and networks. The occurrence of such an event could also result in damage to our software, computers or systems, or otherwise cause interruptions or malfunctions in our, our customers’, our counterparties’ or third parties’ operations. This could result in significant losses, loss of customers and business opportunities, reputational damage, litigation, regulatory fines, penalties or intervention, reimbursement or other compensatory costs, or otherwise materially adversely affect our business, financial condition or results of operations. While we have purchased cyber-security insurance, there can be no assurance that the coverage will be sufficient to cover all financial losses. Moreover, as cyber-security events increase in frequency and magnitude, we may be unable to obtain cyber-security insurance in amounts and on terms we view as appropriate for our operations.

Our business will suffer if we are unable to attract, employ and retain highly skilled personnel as our future success depends in part on the continued service of our key executive officers, as well as our research, engineering, sales and manufacturing personnel, most of whom are not subject to employment or non-competition agreements. Competition for qualified personnel in the technology industry is particularly intense, and we operate in geographic locations in which labor markets are competitive. Our management team has significant industry experience, substantial institutional knowledge of our business and operations and deep customer relationships, and therefore would be difficult to replace. In addition, our business is dependent to a significant degree on the expertise and relationships which only a limited number of engineers possess. Many of these engineers often work at our customers’ sites and serve as an extension of our customers’ product design teams. The loss of any of our key executive officers or key engineers and other personnel, including our engineers working at our customers’ sites, or the failure to attract additional personnel as needed, could have a material adverse effect on our business, financial condition and results of operations and could lead to higher labor costs, the use of less-qualified personnel and the loss of customers. We initiated labor cost reduction initiatives in the fourthsecond quarter of 2022,2025, continuing through the secondfourth quarter of 2024,2025, which may adversely affect us as a result of decreased employee morale, the loss of institutional knowledge held by departing employees and the allocation of resources to reorganize and reassign job roles and responsibilities. Furthermore, we do not maintain key person life insurance with respect to any of our employees. In addition, if any of our key executive officers or other key employees were to join a competitor or form a competing company, we could lose customers, suppliers, know-how and key personnel.

As of December 27,26, 2024,2025, we had approximately 1,8201,891 full time employees and 560557 contract or /temporary workersemployees worldwide. None of our employees are unionized, but in various countries, local law requires our participation in works councils. While we have not experienced any material work stoppages at any of our facilities, any stoppage or slowdown could cause material interruptions in manufacturing, and we cannot ensure that alternate qualified personnel would be available on a timely basis, or at all. As a result, labor disruptions at any of our facilities could materially adversely affect our business, financial condition and results of operations.

As a result of recent trade policy changes in the U.S., there may be greater restrictions and economic disincentives on international trade and a resulting impact on our operations, sales and financial condition. For example, the Bureau of Industry and Security (“BIS") has issued multiple rules in the last several years (the "BIS Rules"), most recently on December 2, 2024, that restrict the export of advanced computing and semiconductor manufacturing items when provided for use in certain semiconductor manufacturing activities in China, which have impacted and may continue to impact our sales and operations. We have had some delays in export activity as we analyze available emergency authorizations and assess the new licensing requirements for our business. While we have applied and received licenses from the BIS for our products, we recognize that the BIS could revise or expand the BIS Rules in response to public comments and the BIS may issue guidance clarifying the scope of the BIS Rules. Such revisions, expansions or guidance could change the impact of the BIS Rules on our business and require us to apply for additional licenses. If the BIS denies our license applications or there are delays in issuing licenses, we may have to cease or delay exports, which would cause a reduction in revenue. Furthermore, to the extent any of our customers or counterparties are designated on the Entity List or Unverified List maintained by the BIS, to which BIS may continue to add customers, we could suffer additional disruptions to sales and operations.

We are subject to a variety of federal, state, local and foreign laws and regulations governing the protection of the environment or addressing climate change. These environmental laws and regulations include those relating to the use, storage, handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials (such as regulations imposed on the use or sale of polyfluoroalkyl substances ("PFAS") or PFAS-containing products) used in our manufacturing processes. These materials may have been or could be released into the environment at properties currently or previously owned or operated by us, at other locations during the transport of materials or at properties to which we send substances for treatment or disposal. In addition, we may not be aware of all environmental laws or regulations that could subject us to liability in the U.S. or internationally. If we were to violate or become liable under environmental laws and regulations or become non-compliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including cleanup costs, fines and civil or criminal sanctions, third-party property damage or personal injury claims. We could also be required to alter or discontinue our product design, manufacturing and operations in certain jurisdictions and incur substantial expense in order to comply. In addition, our operations may be interrupted or restricted by the phase-out or ban of certain substances, materials or processes, which may impact the sourcing, supply and pricing of materials used in manufacturing our products.

We are a leader in the design, engineering, and manufacturing of critical fluid delivery subsystems and components primarily for semiconductor capital equipment.equipment, as well as other industries such as defense/aerospace and medical. Our primary product offerings include gas and chemical delivery systems and subsystems, collectively known as fluid delivery systems and subsystems, which are key elements of the process tools used in the manufacturing of semiconductor devices. Our gas delivery subsystems deliver, monitor,monitor and control precise quantities of the specialized gases used in semiconductor manufacturing processes such as etch and deposition. Our chemical delivery systems and subsystems precisely blend and dispense the reactive liquid chemistries used in semiconductor manufacturing processes such as chemical-mechanical planarization, electroplating, and cleaning. We also provide precision-machined components, weldments, electron beam (“e‑beam”) and laser-weldedlaser welded components, precision vacuum and hydrogen brazing and surface treatment technologies, and other proprietary products for the commercial space, aerospace, defense, medical device, and general-industrial industries. This vertically integrated portion of our business is primarily focused on metal and plastic parts that are used in gas and chemical systems, respectively.products.

Fluid delivery subsystems ensure accurate measurement and uniform delivery of specialty gases and chemicals at critical steps in the semiconductor manufacturing processes. Any malfunction or material degradation in fluid delivery reduces yields and increases the likelihood of manufacturing defects in these processes. Most original equipment manufacturers (“OEMs”) outsource all or a portion of the design, engineering, and manufacturing of their gas delivery subsystems to a few specialized suppliers, including us. Additionally, many OEMs are outsourcing the design, engineering, and manufacturing of their chemical delivery subsystems due to the increased fluid expertise required to manufacture these subsystems. Outsourcing these subsystems allows OEMs to leverage their suppliers’ highly specialized engineering, design, and production skills while focusing their internal resources on their own value-added processes. Outsourcing enables OEMs to reduce their costs and development time, as well as provide growth opportunities for specialized subsystems suppliers like us.

We have a global footprint with production facilities in California, Minnesota, Oregon, Texas, Singapore, Malaysia, the United Kingdom, Korea, and Mexico.

While challenging macroeconomic and geopolitical conditions havemay impacted and will continue to impact our business and customerspersist in the near and intermediate term, we believeremain confident in our belief that the long-term demand for semiconductors, semiconductor capital equipment, and our products will returncontinue to growth,grow, fueleddriven by thean long-term growingincreasing need for moreexpanded semiconductor productive capacity and enhancedadvanced manufacturing process technologies.

The functional currency of our international operations is the U.S. dollar. Transactions denominated in currencies other than the functional currency generate foreign exchange gains and losses that are included in other expense (income),expense, net on the accompanying consolidated statements of operations. Substantially all of our sales contracts, and most of our agreements with third-party suppliers, provide for pricing and payment in U.S. dollars. Accordingly, these transactions are not subject to material exchange rate fluctuations.

Income tax expense consists primarily of taxes on our taxable income related to our domestic and foreign operations, offset by the benefit of our tax holiday in Singapore, which expires in 2026. In 2024,2025, the tax benefit resulting from our Singapore tax holiday, compared to the Singapore statutory tax rate, was approximately $7.1$3.4 million. During 2024,2025, we maintained a valuation allowance against our U.S. state and federal deferred tax assets; therefore, we are not recording income tax benefits related to our U.S. GAAP losses. Income tax is also impacted by certain withholding taxes, Pillar 2 top-up taxes, stock option and restricted share unit (“RSU”) activity, and credit generation.

The decrease in gross margin from 20232024 to 20242025 was primarily due to increased restructuring, country exit, and reduction-in-force related costs; increased supplies and tooling, employee, and occupancy costs; and unfavorable sales mix and increased factory labor and overhead costs,mix, partially offset by lower severance costs associated with our global reduction-in-force programs (+20bps) and lower excess and obsolete inventory expense (+10bps).expense.

The decrease in interest expense, net from 20232024 to 20242025 was primarily due to decreases in the weighted average amounts borrowed,borrowed partiallyand offset by an increasedecreases in our weighted average borrowing rate. The reduction in our weighted average borrowings outstanding was primarily due to paying off our revolving credit facility in the first quarter of 2024. The increasedecrease in our weighted average borrowing rate was due to higherlower applicable margin as a result of higher leverage ratios in 2024 (+29bps) and higher Bloomberg Short-Term Bank Yield ("BSBY") andaverage Secured Overnight Financing Rate ("SOFR") rates (-93bps), the variable component of our borrowing rate, and lower applicable margin (-22bps), the fixed component of our borrowing rate, as a result of alower higheraverage short-termleverage borrowingratios interestin rate macroeconomic environment (+22bps).2025.

The change in other expense, net from 20232024 to 20242025 was primarily due to currencydebt exchangeissuance rateand fluctuationsmodification duringcosts the year relatedconnected to our local currency payables ofamending our foreigncredit operations.agreement.

The decreaseincrease in income tax expense from 20232024 to 20242025 was primarily due to recordingthe aimpact valuationof allowanceOrganization againstfor Economic Co-operation and Development ("OECD") Global Anti-Base Erosion Model Rules ("Pillar Two") on our U.S.Singapore federal and state deferred tax assets in the second quarter of 2023,operations, resulting in an $11.1 million charge to incomeincreased tax expense.accrual of $2.0 million. Because we have a valuation allowance recorded against our U.S. state and federal deferred income taxes, we did not record tax benefits from our U.S. taxable losses during 2024.2025.

Management uses certain non-GAAP metrics to evaluate our operating and financial results. We believe the presentation of non-GAAP results is useful to investors for analyzing business trends and comparing performance to prior periods, along with enhancing investors’ ability to view our results from management’s perspective. All non-GAAP adjustments are presented on a gross basis. Non-GAAP gross profit, operating income, and net income (loss) are defined as: gross profit, operating income (loss), or net income (loss), respectively, excluding (1) amortization of intangible assets, share-based compensation expense, and discrete or infrequent charges and gains that are outside of normal business operations, including transaction-related costs, contract and legal settlement gains and losses, facility shutdown costs, inventory impairment charges, and severance costs associated with reduction-in-force programs, to the extent they are present in gross profit, operating income (loss), and net income (loss), respectively; and (2) with respect to non-GAAP net income (loss), the tax impacts associated with these non-GAAP adjustments, as well as non-recurring discrete tax items, including deferred tax asset valuation allowance charges. All non-GAAP adjustments are presented on a gross basis; the related income tax effects, including current and deferred income tax expense, are included in the adjustment line under the heading "Tax adjustments related to non-GAAP adjustments". Non-GAAP diluted earnings per share ("EPS") is defined as non-GAAP net income divided by weighted average diluted ordinary shares outstanding during the period. Non-GAAP gross margin and non-GAAP operating margin are defined as non-GAAP gross profit and non-GAAP operating income, respectively, divided by net sales.

(23)Represents severance costs associated with our global reduction-in-force programs,programs and,(other forthan 2024,severance costs associated with the amountexit includesfrom $0.5our million of costs incurred in connection with exitingScotland and consolidatingKorea oneoperations, ofas ourdescribed U.S.-based manufacturing facilities.above).

(23)Represents severance costs associated with our global reduction-in-force programs.programs Additionally,(other forthan 2024,severance costs associated with the amountexit includesfrom $0.5our million of costs incurred in connection with exitingScotland and consolidatingKorea oneoperations, ofas ourdescribed U.S.-based manufacturing facilities.above).

We ended 20242025 with cash and cash equivalents of $108.7$98.3 million, ana increasedecrease of $28.7$10.4 million from 2023,2024, which was primarily due to netcapital proceedsexpenditures of $136.7$36.2 million from our issuance of 3.8 million ordinary shares in March 2024 in connection with an underwritten public offering and net payments on our credit facilities of $4.4 million, partially offset by cash provided by operating activities of $27.9 million, partially offset by net payments on credit facilities of $120.6 million and capital expenditures of $17.6$29.9 million.

Our cash provided by operating activities of $27.9$29.9 million during 20242025 consisted of net non-cash charges of $46.0$73.7 million, which consisted primarily of depreciation and amortization of $30.7$33.5 millionmillion, inventory impairment of $19.8 million, and share-based compensation expense of $15.6$16.7 million, and a decrease in our net operating assets and liabilities of $2.7$9.0 million, partially offset by a net loss of $20.8$52.8 million.

The decrease in our net operating assets and liabilities of $2.7$9.0 million during 20242025 was primarily due to ana increase in accounts payable of $29.1 million, partially offset by an increasedecrease in accounts receivable of $19.9$16.1 million and a decrease in prepaid assets of $7.9 million, partially offset by a decrease in accrued and other liabilities of $4.6$7.1 million,million and ana increasedecrease in inventoriesaccounts payable of $4.2$6.4 million.

Cash providedused byin financing activities during 20242025 consisted of net proceeds of $136.7 million from our issues of 3.8 million ordinary shares in March 2024 in connection with an underwritten public offering and net proceeds from share-based compensation activity of $2.4 million, partially offset by net payments on our credit facilities of $120.6$4.4 million. The increasedecrease in cash provided by financing activities from 20232024 to 20242025 was primarily due to net proceeds from our issuance of shares,shares partiallyin offsetthe byprior increased net payments on our credit facilities.year.

The semiconductor capital equipment industry is inherently cyclical. Overall semiconductorSemiconductor equipment spending in 2025 increased compared to 2024 levels, and this momentum has continued intoto thestrengthen first quarter ofin 2026, characterized by robust demand in our primary markets of etch and deposition. During the threesecond monthsquarter ended March 27,of 2026, our net sales increased to $256.1$294.8 million, compared to $244.5$240.3 million for the same period in the prior year.year Thisand increase$256.1 reflectsmillion sustainedfor the first quarter of 2026, reflecting higher customer demand fromin oursupport primaryof customersexpanded semiconductor manufacturing capacity and servedadvanced markets.process technologies.

To better align our global operations with evolving customer demand and drive operational efficiencies, we initiated a geographic footprint rationalization and restructuring plan in 2025. As part of this realignment, in 2025 we began transitioning certain manufacturing activities and relocating machining assets to our expanded high-volume facilities,facilities. whichWe continuedsubstantially intocompleted this plan during the firstsecond quarter of 2026.

While macroeconomic, geopolitical, and regulatory challengesrisks maycontinue persistto in the near and intermediate term,evolve, we remain confident in our belief that long‑termlong-term demand for semiconductors, semiconductor capital equipment, and our products will continue to grow, driven by increasing requirements for expanded semiconductor manufacturing capacity and advanced process technologies.

The increase in net sales from the firstthree quarterand ofsix months ended June 27, 2025 to the firstthree quarterand ofsix months ended June 26, 2026 was primarily due to increased customer demand stemming from increased levels of spending within the semiconductor capital equipment industry in support of expanded semiconductor manufacturing capacity and advanced process technologies.

The increase in gross margin from the firstsecond quarter of 2025 to the firstsecond quarter of 2026 was primarily due to decreased employee expenses incurred relative to revenue growth (+130 bps), severance and restructuring charges of $1.1 million in the firstsecond quarter of 2025 that did not repeat in the firstsecond quarter of 2026 (+80 bps), and increased factory utilization.overhead cost leverage from higher volumes (+50bps).

The decreaseincrease in research and development expenses from the firstsecond quarter of 2025 to the firstsecond quarter of 2026 was primarily due to athe decreaseincreased inconsumption employee-relatedof expenses,R&D partiallysupplies offsetof by$2.0 an increase in material and service costs from our new product development programs.million.

The increasedecrease in selling, general, and administrative expenses from the firstsecond quarter of 2025 to the firstsecond quarter of 2026 was primarily due to decreased fixed facility costs of $0.7 million, partially offset by increased employee-related expenses of $1.3$0.4 million and incremental restructuring and facility exit costs of $0.7 million, partially offset by decreased facility costs of $0.5 million, decreased severance costs of $0.4 million, and decreased outside service provider costs of $0.3$0.2 million.

Interest expense, net, remained substantially unchanged from the firstthree quarterand ofsix months ended June 27, 2025 to the firstthree quarterand ofsix months ended June 26, 2026 due to a decrease in interest expense, from a decrease in our weighted average borrowings outstanding and a decrease in our weighted average borrowing rate, partially offset by lowera decrease in interest income.income from a lower average daily cash balance.

The reduction in our weighted average borrowings outstanding is due to the payment of our scheduled principal payments. The decrease in our weighted average borrowing rate was due to lower Secured Overnight Financing Rate ("SOFR") rates, the variable component of our borrowing rate (-74-79 bpsand -77 bps, respectively), partially offset by higher applicable margin, the fixed component of our borrowing rate, under our third quarter 2025 credit agreement (+4563 bpsand +54 bps, respectively).

The changeincrease in other expense, net from the firstthree quarterand ofsix months ended June 27, 2025 to the firstthree quarterand ofsix months ended June 26, 2026 was primarily due to currency exchange rate fluctuations during the quarterrespective periods related to ourthe local currency payables of our foreign operations.

The increase in income tax expense from the firstthree quarterand ofsix months ended June 27, 2025 to the firstthree quarterand ofsix months ended June 26, 2026 was primarily due to the forecasted mix of earnings in domestic and international jurisdictions, taxes on foreign income that differs from the U.S. tax rate, the ending of the Singapore tax holiday at the end of Q1the first quarter of 2026, and the impact of a valuation allowance against U.S. deferred tax assets, respectively.assets.

Management uses certain non-GAAP metrics to evaluate our operating and financial results. We believe the presentation of non-GAAP results is useful to investors for analyzing business trends and comparing performance to prior periods, along with enhancing investors’ ability to view our results from management’s perspective. All non-GAAP adjustments are presented on a gross basis. Non-GAAP gross profit, operating income, and net income (loss) are defined as: gross profit, operating income (loss), or net income (loss), respectively, excluding (1) amortization of intangible assets, share-based compensation expense, and discrete or infrequent charges and gains that are outside of normal business operations, including transaction-related costs, contract and legal settlement gains and losses, facility shutdown costs, inventory impairment charges, and severance costs associated with reduction-in-force programs, to the extent they are present in gross profit, operating income (loss), and net income (loss), respectively; and (2) with respect to non-GAAP net income (loss), the tax impacts associated with these non-GAAP adjustments, as well as non-recurring discrete tax items, including deferred tax asset valuation allowance charges. All non-GAAP adjustments are presented on a gross basis; the related income tax effects, including current and deferred income tax expense, are included in the adjustment line under the heading "Tax adjustments related to non-GAAP adjustments". Non-GAAP diluted earnings per share ("EPS") is defined as non-GAAP net income divided by weighted average diluted ordinary shares outstanding during the period. Non-GAAP gross margin and non-GAAP operating margin are defined as non-GAAP gross profit and non-GAAP operating income, respectively, divided by net sales. Beginning in the second quarter of 2026, we revised the definition of non-GAAP financial measures to no longer exclude inventory impairment charges. Prior period non-GAAP financial measures have been recast to conform to the current definition.

(1)Represents costs associated with the exit from our Scotland and Korea operations. Included in this amount for the firstsecond quarter of 2025 isand for the six months ended June 27, 2025 are severance costs associated with affected employees of $0.3$0.1 million.million and $0.4 million, respectively.

(1)Represents the costs associated with our Consolidation Restructuring Plan. Included in this amount for the firstsecond quarter of 2026 and the six months ended June 26, 2026 are: (i) fixed asset charges of $1.3 million and $1.4 million respectively; (ii) ROU asset impairment costs of $0.9 million and $0.9 million, respectively; and (iii) other direct and incremental restructuring related costs of $0.4$0.5 million and fixed$0.9 assetmillion charges of $0.1 million.respectively.

(2)Represents costs associated with the exit from our Scotland and Korea operations. Included in this amount for the firstsecond quarter of 2026 and for2026, the firstsecond quarter of 2025, the six months ended June 26, 2026, and the six months ended June 27, 2025 are: (i) other direct and incremental facility exit-related costs of $0.1 millionmillion, $0.6 million, $0.2 million, and $0.6 million, respectively; (ii) ROU asset impairment costs of $0.0 million, $1.3 million, $0.0 million, and $1.3 million, respectively; (iii) fixed asset charges of $0.0 million, $0.6 million, $0.0 million, and $0.6 million, respectively; and (iv) severance costs associated with affected employees of $0.6$0.0 million, $0.2 million, $0.0 million, and $0.8 million, respectively.

(1)Represents the costs associated with our Consolidation Restructuring Plan. Included in this amount for the firstsecond quarter of 2026 and the six months ended June 26, 2026 are: (i) fixed asset charges of $1.3 million and $1.4 million respectively; (ii) ROU asset impairment costs of $0.9 million and $0.9 million, respectively; and (iii) other direct and incremental restructuring related costs of $0.4$0.5 million and fixed$0.9 assetmillion charges of $0.1 million.respectively.

(2)Represents costs associated with the exit from our Scotland and Korea operations. Included in this amount for the firstsecond quarter of 2026 and for2026, the firstsecond quarter of 2025, the six months ended June 26, 2026, and the six months ended June 27, 2025 are: (i) other direct and incremental facility exit-related costs of $0.1 millionmillion, $0.6 million, $0.2 million, and $0.6 million, respectively; (ii) ROU asset impairment costs of $0.0 million, $1.3 million, $0.0 million, and $1.3 million, respectively; (iii) fixed asset charges of $0.0 million, $0.6 million, $0.0 million, and $0.6 million, respectively; and (iv) severance costs associated with affected employees of $0.6$0.0 million, $0.2 million, $0.0 million, and $0.8 million, respectively.

We ended the firstsecond quarter of 2026 with cash and cash equivalents of $89.1$256.5 million, aan decreaseincrease of $9.2$158.2 million from the prior year ended December 26, 2025. The decrease of $9.2 million for the first quarter of 2026increase was primarily due to capitalnet expendituresproceeds of $7.1$195.4 million andfrom our issuance of 2.5 million ordinary shares in June 2026 in connection with our ATM Program, partially offset by cash used in operating activities of $2.9$18.8 million and capital expenditures of $14.8 million.