TTMI 10-K & 10-Q changes, risk factors and insider trading
Ttm Technologies Inc. · Nasdaq · Printed Circuit Boards · CIK 1116942 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Changes in future business conditions could cause goodwill, intangible assets, and other long-lived assets to become impaired, which would result in significant losses and write-downs that would reduce our operating income.”
New heading “Future equity issuances could result in dilution, which could cause our common stock price to decline.”
Removed heading “Risk Factor Summary”
Removed heading “We have a significant amount of goodwill and other intangible assets on our consolidated balance sheet. If our goodwill or other intangible assets become impaired in the future, we would be required to record a non-cash charge to earnings, which may be material and would also reduce our stockholders’ equity.”
Removed heading “We may not fully realize the anticipated positive impacts to future financial results from our restructuring efforts.”
Removed heading “The worldwide electronics industry is intensely competitive and volatile.”
Removed heading “We serve customers and have manufacturing facilities throughout the world and are subject to risks caused by local and global pandemics and other similar risks, which could materially adversely affect our business, financial condition, and results of operations.”
Removed heading “We incur significant costs as a result of operating as a public company, and our management is required to devote substantial time to current and evolving compliance initiatives and corporate governance practices.”
Removed heading “Privacy, information security, and data protection laws, rules, and regulations could affect or limit how we collect and use personal information, increase our costs, and adversely affect our business opportunities.”
Largest changes
In addition, for the year ended Decembersee in full comparison30,29,2024,2025, we generated approximately47%50% of our net sales from non-U.S. operations, 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.
Many U.S. and foreign laws andsee in full comparisonregulations, including those promulgated by the SEC,regulations require companies to provide notice of cybersecurity incidents involving certain types of personal data or unauthorized access to, or interference with, our information systems to the public,certain individuals, the media,government authorities, or other third parties.Certain of these laws and regulations include notice or disclosure obligations contingent upon the result of complex analyses, including in some cases a determination of materiality. The nature of cybersecurity incidents can make it difficult to quickly and comprehensively assess an incident's overall impact to our business, and we may make errors in our assessments.If we are unable to appropriately assess a cybersecurity incident in the context of required analyses then we could face compliance issues under these laws and regulations, and we could be subject to lawsuits, regulatoryfines orfines, investigations, or other liabilities, any or all of which could adversely affect our business and operating results. Furthermore, cybersecurity incidents experienced by us, or by our customersorand vendors, that lead to public disclosures may also lead to widespread negative publicity and increased government or regulatory scrutiny.Any security compromise in our industry, whether actual or perceived, could harm our reputation; erode customer confidence in our security measures; negatively affect our ability to attract new customers; or subject us to third-party lawsuits, regulatory fines or investigations, or other liability, any or all of which could adversely affect our business and operating results. Even the perception of inadequate security may damage our reputation and negatively impact our ability to win new customers and retain existing customers.
“Changes in future business conditions could cause goodwill, intangible assets, and other long-lived assets to become impaired, which would result in significant losses and write-downs that would reduce our operating income.”see in full comparison
see in full comparisonUncertainOurglobalbusiness,economicfinancialconditionsposition, results of operations, and/or cash flows havein the pastbeen and may in the future be adverselyimpactimpactedourbybusiness.global economic conditions. The current uncertainty in the worldwide economic environment together with other unfavorable changes in economic conditions, such as higherinflation andinflation, interest rateincreasesincreases,currentlylaborbeingshortages,experiencedandormarketimplemented by most developed economies, as well as recessions that have affected major countries,volatility, may negatively impact consumer confidence andspending, ultimately causing our customers to postpone purchases and may ultimately impact our profitability. Inflation and rapid fluctuations in inflation rates have hadspending in thepast,industries where we operate. These andmay in the future have, negative effects on economies and financial markets. We could experience period-to-period fluctuations in operating results due to general industry or economic conditions and volatile orother uncertain economic conditionscan adversely impact our sales and profitability and make it difficult for us to accurately forecast and plan our future business activities. Furthermore, inflationary pressure and increases in interest ratesmay negatively impact revenue, earnings, and demand for ourproducts.products as well as our ability to accurately forecast and plan our future business activities. During challenging economic times, our current or potential future customers may experience difficulty earning sufficient revenue, securing financing, or generating cash flowproblemsand as a result may modify, delay, or cancel plans to purchase ourproducts.productsAdditionally, if our customers are not successful in generating sufficient revenueand/orare unable to secure financing, theymay not be able to pay, or may delay payment of, accounts receivable that they owe us. Any inability of our current or potential future customers to pay us for our products may adversely affect our earnings and cash flow. Moreover, our key suppliers may reduce their output or become insolvent, thereby adversely impacting our ability to manufacture our products.
“We have a significant amount of goodwill and other intangible assets on our consolidated balance sheet. If our goodwill or other intangible assets become impaired in the future, we would be required to record a non-cash charge to earnings, which may be material and would also reduce our stockholders’ equity.”see in full comparison
“We may not fully realize the anticipated positive impacts to future financial results from our restructuring efforts.”see in full comparison
Full comparison: every changed paragraph (190)
Risk Factor Summary
The risk factors summarized below could materially harm our business, operating results and/or financial condition, impair our future prospects and/or cause the price of our common stock to decline. Listed below is a summary of the principal risks, which are discussed more fully immediately following this summary.
Global economic and market uncertainty may adversely impact our business and operating results.
Uncertainty, volatility, and adverse changes in the global economy and financial markets could have an adverse impact on our business and operating results.
We are subject to the risks characteristic of international operations, including tariffs.
We are subject to risks of currency fluctuations.
If our goodwill or other intangible assets become impaired in the future, we would be required to record a non-cash charge to earnings.
We may not fully realize the anticipated positive impacts to future financial results from our restructuring efforts.
We depend on the U.S. federal government for a significant portion of our business.
Our raw material suppliers or equipment manufacturers may experience disruptions to their supply chain or operations, or otherwise fail to satisfy our product quality standards, or the prices or availability of raw materials may change.
We may be unable to maintain satisfactory capacity utilization rates.
Our results of operations are often subject to demand fluctuations and seasonality. With a high level of fixed operating costs, even small revenue shortfalls would decrease our gross margins.
We may fail to meet the strict quality control standards of the industries in which we participate.
A decline in sales to the relatively small number of OEM customers on whom we depend for a large portion of our sales would materially adversely affect our business.
Competition in the printed circuit boards (PCB) market is intense, and we could lose market share, or our profit margins may decrease, if we are unable to maintain our current competitive position in end markets.
We may not be able to compete effectively if we are unable to adapt our design and production processes when needed.
Products we manufacture may contain design or manufacturing defects.
Damage to any of our manufacturing facilities could materially adversely affect our business.
The prominence of electronic manufacturing services (EMS) companies as our customers could reduce our gross margins, potential sales, and customers.
The worldwide electronics industry is intensely competitive and volatile.
We serve customers and have manufacturing facilities throughout the world and are subject to risks caused by local and global pandemics and other similar risks.
We may encounter risks associated with potential divestitures of assets and acquisitions of other businesses.
We are exposed to the credit risk of our customers and to credit exposures in weakened markets.
We are subject to risks from rising labor costs and labor shortages, employee strikes, and other labor-related disruptions.
We may be unable to hire and retain sufficient qualified personnel at all levels of our organization, and we are subject to risks from the loss of any of our key executive officers, or the inability to maintain a sufficient workforce to satisfy production demands.
Initiatives aimed at addressing potential climate change risks could materially adversely affect our business.
Infringement of our intellectual property rights could negatively affect us, and we may be exposed to intellectual property infringement claims from third parties.
Foreign laws may not afford us sufficient protections for our intellectual property.
We have substantial outstanding indebtedness, which could adversely impact our liquidity, our flexibility in obtaining additional financing, and our ability to fulfill our debt obligations.
We are subject to interest rate risk, which could cause our debt service obligations to increase significantly.
Servicing our debt requires a significant amount of cash, and we may be forced to take other actions to satisfy our obligations under our debt.
We are subject to the requirements of the National Industrial Security Program Operating Manual (NISPOM) for our facility security clearance, which is a prerequisite to our ability to perform on classified contracts for the U.S. government.
Our operations in Asia subject us to risks and uncertainties relating to the local laws and regulations and adverse effects of political tensions that arise from time to time with China.
Our failure to comply with the requirements of environmental laws could result in litigation, fines, revocation of necessary permits, or debarment from our participation in federal government contracts.
Our international sales are subject to laws and regulations relating to corrupt practices, trade and export controls, and economic sanctions. Any non-compliance could have a material adverse effect on our business.
Outages, computer viruses, cyber-attacks and cybersecurity incidents, and similar events could materially disrupt our operations.
Privacy, information security, and data protection laws, rules, and regulations could affect or limit how we collect and use personal information, increase our costs, and adversely affect our business opportunities.
Issues arising during the upgrade of our enterprise resource planning (ERP) system could affect our operating results and ability to manage our business effectively.
Our ability to use net operating loss carryforwards to offset future taxable income for U.S. federal, state, and foreign income tax purposes is subject to limitations, and future transfers of shares of our common stock could cause us to experience an “ownership change” that could further limit our ability to utilize our net operating losses.
In addition, the following risk factors and uncertainties could cause our actual results to differ materially from those projected in our forward-looking statements, whether made in this Report or the other documents we file with the Securities and Exchange Commission (SEC), or our annual or quarterly reports to stockholders, future press releases, or orally, whether in presentations, responses to questions, or otherwise.
UncertainOur globalbusiness, economicfinancial conditionsposition, results of operations, and/or cash flows have in the pastbeen and may in the future be adversely impactimpacted ourby business.global economic conditions. The current uncertainty in the worldwide economic environment together with other unfavorable changes in economic conditions, such as higher inflation andinflation, interest rate increasesincreases, currentlylabor beingshortages, experiencedand ormarket implemented by most developed economies, as well as recessions that have affected major countries,volatility, may negatively impact consumer confidence and spending, ultimately causing our customers to postpone purchases and may ultimately impact our profitability. Inflation and rapid fluctuations in inflation rates have hadspending in the past,industries where we operate. These and may in the future have, negative effects on economies and financial markets. We could experience period-to-period fluctuations in operating results due to general industry or economic conditions and volatile orother uncertain economic conditions can adversely impact our sales and profitability and make it difficult for us to accurately forecast and plan our future business activities. Furthermore, inflationary pressure and increases in interest rates may negatively impact revenue, earnings, and demand for our products.products as well as our ability to accurately forecast and plan our future business activities. During challenging economic times, our current or potential future customers may experience difficulty earning sufficient revenue, securing financing, or generating cash flow problems and as a result may modify, delay, or cancel plans to purchase our products.products Additionally, if our customers are not successful in generating sufficient revenue and/or are unable to secure financing, they may not be able to pay, or may delay payment of, accounts receivable that they owe us. Any inability of our current or potential future customers to pay us for our products may adversely affect our earnings and cash flow. Moreover, our key suppliers may reduce their output or become insolvent, thereby adversely impacting our ability to manufacture our products.
Uncertainty, volatility, and adverse changes in the global economy and financial markets, including those resulting from the conflict between Russia and Ukraine and other global conflicts, could have an adverse impact on our business and operating results.
Uncertainty, volatility, or adverse changes in the global economy could lead to a significant decline in demand for the end products manufactured by our customers, which, in turn, could result in a decline in the demand for our products and increaseincreased pressure to reduce our prices. Any decrease in demand for our products could have anThese adverse impactglobal oneconomic our financial condition, operating results, and cash flows. Uncertainty and adverse changes in the economyconditions could also increase the cost and decrease the availability of potential sources of financing and increase our exposure to losses from bad debts,debts. eitherAll of whichthese impacts could have a material adverse effect on our financial condition, operating results, and cash flows.
In addition, for the year ended December 30,29, 2024,2025, we generated approximately 47%50% of our net sales from non-U.S. operations, 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.
managing international operations;
imposition of governmental controls;
unstable regulatory environments;
compliance with employment laws;
implementation of disclosure controls, internal controls, financial reporting systems, and governance standards to comply with U.S. accounting and securities laws and regulations;
limitations on imports or exports of our product offerings;
fluctuations in the value of local currencies;
inflation or changes in political and economic conditions;
public health crises;
labor unrest, rising wages, difficulties in staffing, and geographical labor shortages;
government or political unrest;
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;
longer payment cycles;
language and communication barriers, as well as time zone differences;
cultural differences;
increases in duties and taxation levied on our products;
Management's Discussion & Analysis (MD&A)
New heading “CONSOLIDATED OPERATING RESULTS”
New heading “SEGMENT OPERATING RESULTS”
New heading “Basis of Presentation”
New heading “Segment Operating Income and Margin Rate”
New heading “Segment Operating Income and Margin Rate”
New heading “Segment Operating Income and Margin Rate”
Removed heading “RESULTS OF OPERATIONS”
Removed heading “Selling and Marketing Expenses”
Removed heading “General and Administrative Expenses”
Removed heading “Research and Development Expenses”
Removed heading “Impairment of Goodwill”
Removed heading “Restructuring Charges”
Removed heading “Gain on sale of SH E-MS Property”
Removed heading “Offset Agreements”
Largest changes
see in full comparisonGeneral and administrativeOperating expensesincreaseddecreased$20.5$24.3 million to$170.1$337.0million,millionorfor7.0%theofyearnetendedsales,December 29, 2025, from $361.3 million for the year ended December 30,2024 from $149.6 million, or 6.7% of net sales, for the year ended January 1, 2024. The increase in general and administrative expenses was2024, primarily due toincreasesthe absence of a $32.6 million impairment of goodwill, decreases inconsultingrestructuring charges andotheramortizationprofessionalofservicesdefinite-livedexpenses, labor costs, stock-based compensation, bad debt, incentive compensation,intangibles, and the absence of a $6.1 million write down of our Hong Kong buildingofthat$6.1occurredmillion,during the year ended December 30, 2024, partially offset by higher stock-based compensation and incentive compensation expense as well as the absence of $14.4 million of gains on the sale of assets primarily related to the sale of two buildings vacated with the closure of our Anaheim and Santa Clara plantsofthat$14.4occurredmillion.during the year ended December 30, 2024.
“Operating expenses decreased $9.6 million to $361.3 million for the year ended December 30, 2024, from $371.0 million for the year ended January 1, 2024, primarily due to decreases in restructuring charges, amortization of definite-lived intangibles, and impairment of goodwill, partially offset by higher labor costs, consulting and other professional services expenses, stock-based compensation, bad debt, and incentive compensation. …”see in full comparison
“On July 9, 2025, we announced the acquisition of a facility in Eau Claire, Wisconsin, as well as land rights for an additional future manufacturing site in Penang, Malaysia. We believe the Eau Claire, Wisconsin facility comes equipped with the necessary infrastructure to support advanced technology PCB manufacturing and enhances our ability to support future high-volume U.S. production of advanced technology PCBs across key markets, particularly data center computing and networking for generative AI applications. …”see in full comparison
“Goodwill is allocated to our reporting units, which are our operating segments or one level below our operating segments (the component level). Reporting units are determined by the discrete financial information available for the component and whether it is regularly reviewed by segment management. Components are aggregated into a single reporting unit if they share similar economic characteristics. We evaluate goodwill on an annual basis in the fourth quarter or more frequently if we believe indicators of impairment exist. …”see in full comparison
“During the quarter ended June 30, 2025, in connection with our change in organizational structure to enhance clarity in sector performance, accountability, and operating costs, we concluded that we have three reportable segments: A&D, Commercial, and RF&S Components. In prior periods, we had two reportable segments: PCB and RF&S Components. In connection with our assessment of operating segments, we determined that our operating segments were also our reporting units and reallocated our PCB goodwill between A&D and Commercial based on the estimated relative fair values of the reporting units. …”see in full comparison
Full comparison: every changed paragraph (109)
This financial review presents our operating results for each of our three most recent fiscal years and our financial condition as of December 30,29, 2024.2025. Except for historical information contained herein, the following discussion contains forward-looking statements which are subject to known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from those expressed or implied by such forward-looking statements. We discuss such risks, uncertainties, and other factors throughout this Annual Report on Form 10-K (Report) and specifically under Item 1A, Risk Factors of Part I of this Report. In addition, the following discussion should be read in connection with the information presented in our consolidated financial statements and the related notes to our consolidated financial statements.
We are a leading global manufacturer of technology solutions,products, including mission systems, radio frequency (RF) components, RF microwave/microelectronic assemblies, and quick-turn and technologically advanced printedinterconnect circuitproducts, boardsincluding (PCB).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 1,4001,300 customers in various markets throughout the world, including aerospace and defense, data center computing, automotive, medical, industrialindustrial, and instrumentation, and networking. Our customers include originalOEMs, equipment manufacturers (OEMs), electronic manufacturing services (EMS) providers, original design manufacturers (ODMs),ODMs, distributors, and government agencies (both domestic and allied foreign governments).
On July 9, 2025, we announced the acquisition of a facility in Eau Claire, Wisconsin, as well as land rights for an additional future manufacturing site in Penang, Malaysia. We believe the Eau Claire, Wisconsin facility comes equipped with the necessary infrastructure to support advanced technology PCB manufacturing and enhances our ability to support future high-volume U.S. production of advanced technology PCBs across key markets, particularly data center computing and networking for generative AI applications. In addition, we acquired land rights for ten acres in Penang to establish a new production site that we anticipate will align with customers’ increasing interests in supply chain diversification beyond China. The future Penang facility will be in close proximity to our existing facility and will enable us to deliver cost-competitive, high-quality advanced technology PCB manufacturing to commercial markets such as data center computing, networking, and medical, industrial, and instrumentation. Together, these new investments support our strategy to offer regionally optimized, globally connected manufacturing solutions for our customers.
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-HDI PCBs in support of national security requirements. The building construction is complete, equipment is arriving, and we are beginning to install and test equipment setups. Volume production in this facility is expected to commence in the second half of 2026.
In the third quarter of 2024, we commenced construction of our 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. We believe the planned investment aligns with New York State’s continuing focus on the region as a premier technology hub for U.S. electronics and the recent selection of Buffalo-Rochester-Syracuse (BRS) for the Federal Tech Hub designation. The project reflects our support for cultivating a stronger microelectronics ecosystem in New York and across the U.S. Aerospace and Defense industrial base. The new building will be located on the 24-acre property adjacent to our existing facility in Syracuse, and we expect to commence initial low rate production in 2026. Phase one of the proposed project, including capital for campus-wide improvements is estimated to be $100.0 million to $130.0 million. We expect to receive support in the form of grants, awards, and tax credits from both federal and New York state sources of approximately $52.0 million in the aggregate (subject to certain requirements and contingencies), which would offset the initial capital investment and lower operating expenses.
In addition, we previously announced plans to consolidate our integrated electronics facilities in Elizabeth City, North Carolina and Huntington, New York into existing facilities in order to improve efficiencies. As of the end of fiscal year 2024, the closure of Elizabeth City has been completed and the closure of Huntington is expected by the middle of 2025.
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 55%, 42%, and 41% of our net sales in 2025, 2024, and 2023, respectively.
While our customers include both OEMs and EMS providers, we measure customers based on OEM companies, as they are the ultimate end customers. Sales to our five largest customers accounted for 42%, 41%, and 33% of our net sales in fiscal years 2024, 2023, and 2022, respectively, which is in line with the increase in sales in our aerospace and defense end market. We sell to OEMs both directly and indirectly through EMS providers.
The end market revenue for the years ended December 30, 2024 and January 1, 2024 has been recast to reflect certain adjustments to allocations resulting from the segment reorganization that occurred during the quarter ended June 30, 2025.
We also manufacture certain components, assemblies, subsystems, and completed systems which service our RF and Specialty Components (RF&S Components) customers and certain aerospace and defense customers. We recognize revenue at a point in time upon transfer of control of the products to our customer. Point in time recognition was determined as our customers do not simultaneously receive or consume the benefits provided by our performance and the asset being manufactured has alternative uses to us.
Cost of goods sold consists of materials, labor, outside services, and overhead expenses incurred in the manufacture and testing of our products. Shipping and handling fees and related freight costs and supplies associated with shipping products are also included as a component of cost of goods sold. Many factors affect our gross margin, including capacity utilization, product mix, production volume, supply chain costs, and yield.
Our consolidated financial statements included in this Report have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).GAAP. The preparation of these 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.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management has discussed the development, selection, and disclosure of these estimates with the Audit Committee of our Board of Directors. Actual results may differ from these estimates under different assumptions or conditions.
We believe the following critical accounting policies and estimates reflect the more significant judgments and estimates used by us in preparing our consolidated financial statements:statements. For additional discussion of the application of our significant accounting policies, see Part II, Item 8, Note 1, Nature of Operations and Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements in this Report.
Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. We apply a five-step approach in determining the amount and timing of revenue to be recognized: (1) identifying the contract with a customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to the performance obligations in the contract; and (5) recognizing revenue when the corresponding performance obligation is satisfied.
For PCBs and engineered systems, including pursuant to long-term contracts related to the manufacture of highly sophisticated intelligence, surveillance and communications solutions, components, assemblies, and subsystems, orders for products generally correspond to the production schedules of customers and are supported with firm purchase orders. Customers have continuous control of the work in progress and finished goods throughout the PCB and engineered systems manufacturing process, as these are built to customer specifications with no alternative use, and there is an enforceable right to payment for work performed to date. As a result, we recognize revenue progressively over time based on the extent of progress towards completion of the performance obligation. RevenueSee recognizedPart isII, basedItem on8, aNote cost2, methodRevenues, as it best depictsof the transfer of controlNotes to theConsolidated customerFinancial whichStatements takesin placethis asReport wefor incurfurther costs. Revenues are recorded proportionally as costs are incurred.information.
For revenue recorded on an over time basis, we apply a gross margin estimate to inventory in process of being manufactured for customers to determine how much of a contract asset or contract liability should be recorded at period end. As of December 30, 2024, total contract assets were $386.8 million, of which $381.4 million are expected to be collected within one year and recorded as contract assets and $5.4 million are expected to be collected after one year and included as a component of deposits and other non-current assets on the consolidated balance sheets. As of January 1, 2024, total contract assets were $303.3 million, of which $292.1 million were expected to be collected within one year and recorded as contract assets and $11.3 million were expected to be collected after one year and included as a component of deposits and other non-current assets on the consolidated balance sheets. The increase in total contract assets in 2024 is primarily due to an increase in unbilled receivables. We use historical information to estimate the gross margin associated with performance obligations that are satisfied over time. We reevaluate our estimate of gross margins on a quarterly basis. Based on the review of gross margins, we update our estimate to the model as necessary. If our estimates of gross margins are inaccurate, we may recognize too much or too little revenue in a period. While experience has shown that trends in gross margins are not volatile, changes in pricing or cost efficiencies could create significant fluctuations. An increase or decrease of 200 basis points in gross margin estimates would have increased or decreased our contract assets by $3.7 million and $2.3$2.9 million, respectively, and decreased or increased our contract liabilities by $7.2$6.4 million and $5.6$5.8 million, respectively.
In addition, we manufacture components, assemblies, subsystems, and completed systems which service our RF&S Components and certain aerospace and defense customers. We recognize revenue at a point in time upon transfer of control of the products to the customer. Point in time recognition was determined as our customer does not simultaneously receive or consume the benefits provided by our performance and the asset being manufactured has alternative uses to us.
During the quarter ended June 30, 2025, in connection with our change in organizational structure to enhance clarity in sector performance, accountability, and operating costs, we concluded that we have three reportable segments: A&D, Commercial, and RF&S Components. In prior periods, we had two reportable segments: PCB and RF&S Components. In connection with our assessment of operating segments, we determined that our operating segments were also our reporting units and reallocated our PCB goodwill between A&D and Commercial based on the estimated relative fair values of the reporting units. In connection with the reallocation of goodwill, we performed a quantitative goodwill impairment assessment for these segments and concluded no impairment indicators existed as of June 30, 2025. See Part II, Item 8, Note 4, Segment Information, and Note 6, Goodwill and Definite-lived Intangibles, of the Notes to Consolidated Financial Statements in this Report for further information.
We have significant goodwill and definite-lived intangibles. We review these assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. In addition, we perform an impairment test related to goodwill at least annually. As necessary, we make judgments regarding future cash flow forecasts in the assessment of impairment.
Goodwill is allocated to our reporting units, which are our operating segments or one level below our operating segments (the component level). Reporting units are determined by the discrete financial information available for the component and whether it is regularly reviewed by segment management. Components are aggregated into a single reporting unit if they share similar economic characteristics. We evaluate goodwill on an annual basis in the fourth quarter or more frequently if we believe indicators of impairment exist. We assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount or perform a quantitative impairment test. When tested quantitatively, we compare the fair value of the applicable reporting unit with its carrying value. We estimate the fair values of our reporting units using a combination of the discounted cash flow (DCF) and market approach. If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, the amount by which the carrying value exceeds the fair value is recognized as an impairment loss.
We have two reportable segments: PCB and RF&S Components. Goodwill is attributable to both of our PCB and RF&S Components reportable segments.
In the fourth quarter of 2024, we performed our annual goodwill impairment test qualitatively for the PCB reporting unit and concluded that it was more likely than not that there was no impairment to goodwill.
In the fourth quarter of 2024, we performed our annual goodwill impairment test quantitatively for the RF&S Components reporting unit. As of November 1, 2024, weWe completed aour quantitative goodwill impairment analysis related to our RFPCB, A&SD, Componentsand Commercial reporting unitunits by comparing the fair value of theeach reporting unit with its carrying amount. Based on our analysis, we determined that the fair values of the PCB, A&D, and Commercial reporting units were greater than their respective carrying values. In making this assessment, we rely on a number of factors, including expected future operating results, business plans, economic projections, anticipated future cash flows, and business trends. We determined the fair value of the reporting unitunits by using both a DCF and a market approach. Under the market approach, we used revenue and earnings multiples based on comparable industry multiples to estimate the fair value of the reporting unit.
BasedWe reallocated PCB goodwill to the A&D and Commercial reporting units based on ourtheir analysis,estimated we determined that therelative fair value of the RF&S Components reporting unit was less than its carrying value and recorded a non-cash goodwill impairment charge of $32.6 million during the year ended December 30, 2024.values. Estimating the fair value of the reporting unit requires us to make assumptions and estimates in such areas as future economic conditions, industry-specific conditions, product pricing, and necessary capital expenditures. The use of different assumptions or estimates for future cash flows, discount rates, or terminal growth rates, which are subject to a high degree of judgment, could produce substantially different estimates of the fair value of the reporting unit. We may be subject to additional goodwill impairment charges if actual results do not meet the estimates used in determining the fair value of goodwill and the associated goodwill impairment charge.
In the fourth quarter of 2025, we performed our annual goodwill impairment test qualitatively for the A&D, Commercial, and RF&S Components reporting units and concluded that it was more likely than not that there was no impairment to goodwill.
Management will continue to monitor the reporting units for changes in the business environment that could impact recoverability. The recoverability of goodwill is dependent upon the continued growth of cash flows from our business activities. If the economy or business environment falterfalters and we are unable to achieve our assumed revenue growth rates or profit margin percentages, our projections used would need to be re-measured,remeasured, which could impact the carrying value of our goodwill in one or more of our reporting units.
CONSOLIDATED OPERATING RESULTS
RESULTS OF OPERATIONS
We operate on a 52 or 53 week fiscal calendar with the fourth quarter ending on the Monday nearest December 31. Fiscal years 2025, 2024, 2023, and 20222023 consisted of 52 weeks ended on December 29, 2025, December 30, 2024, and January 1, 2024, andrespectively. JanuaryAll 2,references 2023,to respectively.years relate to fiscal years unless otherwise noted.
Selected financial highlights are presented in the table below:
Total net sales increased $463.6 million, or 19.0%, to $2,906.3 million for the year ended December 29, 2025 from $2,442.8 million for the year ended December 30, 2024. The primary driver of this increase was strong demand in our aerospace and defense, data center computing, and networking end markets, the latter two being driven by generative AI. In addition, our medical, industrial, and instrumentation end market was stronger as inventories and demand normalized in this end market.
The relationship of various items to net sales in our consolidated statements of operations was as follows:
The Telephonics acquisition occurred on June 27, 2022. Accordingly, our fiscal year 2022 only includes Telephonics’ 2022 results of operations since the acquisition date. As of the fourth quarter of 2022, we completed our integration of Telephonics and reassessed our reportable segments, which resulted in the inclusion of Telephonics into our PCB reportable segment.
Net Sales
Total net sales increased $210.2 million, or 9.4%, to $2,442.8 million for the year ended December 30, 2024 from $2,232.5 million for the year ended January 1, 2024. Net sales for the PCB reportable segment increased $211.6 million, or 9.6%, to $2,405.6 million for the year ended December 30, 2024 from $2,194.0 million for the year ended January 1, 2024. The primary driver of this increase was demand growth for generative artificial intelligence (AI) applications in our data center computing end market and strong demand and improved operational execution in our aerospace and defense end market, partially offset by demand weakness due to customers' inventory correction in our automotive, medical, industrial, and instrumentation, and networking end markets. We also sold our Shanghai Backplane Assembly entity in the first quarter of 2023, which had the effect of reducing net sales in 2024 by $8.4 million. Net sales for the RF&S Components reportable segment decreased $1.4 million, or 3.6%, to $37.1 million for the year ended December 30, 2024 from $38.5 million for the year ended January 1, 2024. The decrease in RF&S Components net sales was primarily due to lower demand in our networking end market.
Total net sales decreased $262.5 million, or 10.5%, to $2,232.5 million for the year ended January 1, 2024 from $2,495.0 million for the year ended January 2, 2023. Net sales for the PCB reportable segment decreased $243.9 million, or 10.0%, to $2,194.0 million for the year ended January 1, 2024 from $2,437.9 million for the year ended January 2, 2023. The primary driver of this decrease was demand weakness in our commercial end markets and decrease in sales of $36.3 million from the Shanghai Backplane Assembly entity we sold in the first quarter of 2023, partially offset by the inclusion of a full year of results of Telephonics during the year ended January 1, 2024 (as compared to the inclusion in the year ended January 2, 2023 of its results commencing with its acquisition in 2022), as well as organic growth in our aerospace and defense end market. Net sales for the RF&S Components reportable segment decreased $18.6 million, or 32.5%, to $38.5 million for the year ended January 1, 2024 from $57.1 million for the year ended January 2, 2023. The decrease in RF&S Components net sales was primarily due to lower demand in our networking end market.
For information regarding net sales by country, see Part II, Item 8, Note 10, Segment Information, of the Notes to Consolidated Financial Statements in this Report.
Gross Profit and Margin Rate
Gross profit increased $124.3 million to $601.7 million for the year ended December 29, 2025, from $477.4 million for the year ended December 30, 2024. Gross margin rate increased to 20.7% for the year ended December 29, 2025, from 19.5% for the year ended December 30, 2024. These increases were primarily due to higher sales volume, improved operational execution, favorable product mix, and increased volume of PCB shipments, partially offset by continued ramp-up costs in connection with our fabrication plant in Penang, Malaysia.
Overall gross margin increased to 19.5% for the year ended December 30, 2024 from 18.5% for the year ended January 1, 2024. The increase in overall gross margin was due to the increase in gross margin for the PCB reportable segment to 20.6% for the year ended December 30, 2024, from 19.3% for the year ended January 1, 2024. This increase was primarily due to higher sales volume, particularly in the data center computing and aerospace and defense end markets, and improved operational execution, partially offset by declines in the automotive, medical, industrial, and instrumentation, and networking end markets, higher employee costs, and continued ramp up costs included in cost of goods sold in connection with our fabrication plant in Penang, Malaysia. Gross margin for the RF&S Components reportable segment decreased to 48.9% for the year ended December 30, 2024, from 54.7% for the year ended January 1, 2024, primarily due to lower sales.
Overall gross margin increased slightly to 18.5% for the year ended January 1, 2024 from 18.4% for the year ended January 2, 2023. The increase in overall gross margin was due to the increase in gross margin for the PCB reportable segment to 19.3% for the year ended January 1, 2024, from 18.2% for the year ended January 2, 2023. This increase was primarily due to better product mix and improved execution in our North America region, partially offset by lower revenues and less quick-turn premium in our commercial markets. Gross margin for the RF&S Components reportable segment decreased to 54.7% for the year ended January 1, 2024, from 62.3% for the year ended January 2, 2023, primarily due to lower sales.
An important factor affecting gross margins is capacity utilization, which is measured by the actual production as a percentage of maximum capacity. This measure is particularly important in our high-volume PCB facilities in Asia, as a significant portion of our operating costs are fixed in nature. We believe that our North America utilization figures are not as meaningful as Asia because bottlenecks in these high mix low volume facilities tend to occur in areas outside of plating, which is the core process that we use for calculating utilization rates. Capacity utilization for the year ended December 30, 2024 in our Asia and North America PCB facilities was 59% and 36%, respectively, compared to 49% and 38%, respectively, for the year ended January 1, 2024. The increase in capacity utilization in our Asia PCB facilities was caused by strong demand in the data center computing end market.
Selling and Marketing Expenses
SellingGross and marketing expensesprofit increased $3.1$64.1 million to $80.0$477.4 million for the year ended December 30, 20242024, from $76.9$413.3 million for the year ended January 1, 2024. However,Gross sellingmargin andrate marketing expenses as a percentage of net sales decreasedincreased to 3.3%19.5% for the year ended December 30, 20242024, asfrom compared to 3.4%18.5% for the year ended January 1, 2024. TheThese increaseincreases in the amount of selling and marketing expenses waswere primarily due to anhigher increasesales ofvolume $2.0and millionimproved operational execution, partially offset by higher employee costs and continued ramp-up costs in laborconnection costs,with $0.6our millionfabrication plant in stock-basedPenang, compensation, and $0.5 million in travel costs. The decrease in selling and marketing expenses as a percentage of net sales resulted from higher net sales for the year ended December 30, 2024 as compared to January 1, 2024.Malaysia.
Selling and marketing expenses increased $1.7 million to $76.9 million, or 3.4% of net sales, for the year ended January 1, 2024 from $75.2 million, or 3.0% of net sales, for the year ended January 2, 2023. The increase in selling and marketing expense was primarily due to the inclusion of a full year of Telephonics expenses, which resulted in an increase of $3.5 million and an increase in labor and travels costs, partially offset by a $3.7 million decrease in commission expense.
General and Administrative Expenses
General and administrativeOperating expenses increaseddecreased $20.5$24.3 million to $170.1$337.0 million,million orfor 7.0%the ofyear netended sales,December 29, 2025, from $361.3 million for the year ended December 30, 2024 from $149.6 million, or 6.7% of net sales, for the year ended January 1, 2024. The increase in general and administrative expenses was2024, primarily due to increasesthe absence of a $32.6 million impairment of goodwill, decreases in consultingrestructuring charges and otheramortization professionalof servicesdefinite-lived expenses, labor costs, stock-based compensation, bad debt, incentive compensation,intangibles, and the absence of a $6.1 million write down of our Hong Kong building ofthat $6.1occurred million,during the year ended December 30, 2024, partially offset by higher stock-based compensation and incentive compensation expense as well as the absence of $14.4 million of gains on the sale of assets primarily related to the sale of two buildings vacated with the closure of our Anaheim and Santa Clara plants ofthat $14.4occurred million.during the year ended December 30, 2024.
Operating expenses decreased $9.6 million to $361.3 million for the year ended December 30, 2024, from $371.0 million for the year ended January 1, 2024, primarily due to decreases in restructuring charges, amortization of definite-lived intangibles, and impairment of goodwill, partially offset by higher labor costs, consulting and other professional services expenses, stock-based compensation, bad debt, and incentive compensation. In addition, $14.4 million of gains on the sale of assets primarily related to the sale of two buildings vacated with the closure of our Anaheim and Santa Clara plants were partially offset by the write down of our Hong Kong building of $6.1 million that occurred during the year ended December 30, 2024.
General and administrative expenses decreased $8.5 million to $149.6 million for the year ended January 1, 2024 from $158.2 million for the year ended January 2, 2023, but increased as a percentage of net sales to 6.7% from 6.4% over the same two periods. The decrease in the amount of general and administrative expenses primarily resulted from $13.2 million of reduced acquisition and integration costs mainly related to the acquisition of Telephonics on June 27, 2022. In addition, there were decreases in incentive compensation and bad debt. These decreases were partially offset by the inclusion of a full year of Telephonics expenses, which resulted in an increase of $1.6 million, increase in labor costs and lower gains on the sale of assets. The increase of general and administrative expenses as a percentage of net sales resulted from lower net sales for the year ended January 1, 2024 as compared to January 2, 2023.
Research and Development Expenses
Research and development expenses increased $4.6 million to $31.8 million, or 1.3% of net sales, for the year ended December 30, 2024 from $27.3 million, or 1.2% of net sales, for the year ended January 1, 2024. The increase in research and development expenses was primarily due to increases in labor costs and research and development projects.
Research and development expenses increased $2.5 million to $27.3 million, or 1.2% of net sales, for the year ended January 1, 2024 from $24.8 million, or 1.0% of net sales, for the year ended January 2, 2023. The increase in expense was primarily due to the inclusion of a full year of Telephonics expenses, which resulted in an increase of $4.5 million, partially offset by a decrease in labor and material costs.
Impairment of Goodwill
For the years ended December 30, 2024 and January 1, 2024, we recorded goodwill impairment charges of $32.6 million and $44.1 million, respectively. See Part II, Item 8, Note 6, Goodwill, of the Notes to Consolidated Financial Statements included in this Report for further information.
Restructuring Charges
For the years ended December 30, 2024, January 1, 2024, and January 2, 2023, we incurred restructuring charges of $11.2 million, $24.4 million, and $4.1 million, respectively, related to our global realignment restructuring efforts.
For the year ended December 30, 2024, we recognized restructuring charges of $8.1 million and $3.1 million in our PCB reportable segment and Corporate and Other, respectively. For the year ended January 1, 2024, we recognized restructuring charges of $23.7 million and $0.7 million in our PCB reportable segment and Corporate and Other, respectively. For the year ended January 2, 2023, we recognized restructuring charges of $3.5 million and $0.6 million in our PCB reportable segment and Corporate and Other, respectively. These charges primarily represent employee separation and contract termination and other costs associated with the restructuring plans.
Gain on sale of SH E-MS Property
On December 22, 2022, land, building, and relevant ancillary assets related to our former SH E-MS manufacturing facility was expropriated by the Chinese government for a compensation fee of Renminbi (RMB) 477.6 million ($69.2 million as of January 2, 2023) and we recorded a gain on the sale of $51.8 million during the year ended January 2, 2023.
What changed in the latest 10-Q
Risk Factors
New heading “We are subject to risks of currency exchange rate fluctuations.”
Largest changes
“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. …”see in full comparison
“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.”see in full comparison
see in full comparisonThereDuringhavethebeenquarternoended June 29, 2026, we identified the following materialchangeschangeintooura riskfactorsfactorasthat 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.
Full comparison: every changed paragraph (4)
ThereDuring havethe beenquarter noended June 29, 2026, we identified the following material changeschange into oura risk factorsfactor asthat was previously disclosed in Part I, Item 1A, Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended December 29, 2025.
We are subject to risks of currency exchange rate fluctuations.
A portion of our cash, other assets, and liabilities is held in currencies other than the USD. Changes in exchange rates among other currencies and the USD will affect the value of these assets or liabilities and could negatively impact the amount of cash available to fund operations or repay debt. To the extent that we decide to repatriate some portion of these funds to the United States, the actual value transferred could be impacted by movements in exchange rates. Additionally, we expect to have revenues, expenses, and costs denominated in currencies other than the USD, which include but are not limited to the RMB, the MYR, the CHF, and the Euro. Fluctuations in the exchange rates between the USD and the RMB, the MYR, the CHF, the Euro, or any other currency where we are exposed to foreign currency risk and do not hedge to manage such risk could result in increases in our expenses or decreases in our revenues, which could negatively impact our business, financial condition, and results of operations. In connection with the proposed STG acquisition, we entered into a deal-contingent USD/CHF cross-currency swap, as disclosed in more detail above. Significant inflation or disproportionate changes in foreign exchange rates could occur from general economic conditions, acts of war or terrorism, changes in governmental monetary or tax policy, or changes in local interest rates. Further, China’s government imposes controls over the convertibility of RMB into foreign currencies, which subjects us to further currency exchange risk.
There have been no other material changes in our risk factors as previously disclosed in Part I, Item 1A, Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended December 29, 2025.
Management's Discussion & Analysis (MD&A)
Removed heading “Operating Expenses”
Largest changes
“Total net sales increased $470.7 million, or 34.1%, to $1,850.0 million for the two quarters ended June 29, 2026, from $1,379.3 million for the two quarters ended June 30, 2025. The primary driver of this increase was due to continued strong demand in our data 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.”see in full comparison
“Operating expenses increased $44.5 million to $211.5 million for the two quarters ended June 29, 2026, from $167.1 million for the two quarters ended June 30, 2025, primarily due to higher stock-based compensation, labor costs, incentive compensation, and acquisition costs. The increase in stock-based compensation was primarily driven by exceeding predetermined targets, stock price appreciation, and vesting of certain performance-based stock grants.”see in full comparison
“Our aggregate interest on debt obligations as of June 29, 2026, amounted to $162.8 million, which is expected to be settled as follows: $45.9 million within 1 year, $89.9 million within 1-3 years, and $27.0 million within 4-5 years. For debt obligations based on variable rates, interest rates used are as of June 29, 2026.”see in full comparison
“On June 17, 2026, we announced that we had entered into definitive stock purchase agreements to acquire STG and ILFA in separate transactions. These proposed transactions are expected to close in the third quarter of 2026, subject to the satisfaction of regulatory approvals and other customary closing conditions. In connection with the proposed STG acquisition, we entered into an economic hedge to mitigate foreign currency risk of the CHF-denominated purchase price and interest related to the planned drawdown under the RCF to finance the proposed STG acquisition.”see in full comparison
“Segment operating income for the Commercial reportable segment increased $90.5 million to $194.2 million for the two quarters ended June 29, 2026, from $103.7 million for the two quarters ended June 30, 2025. Segment operating margin rate for the Commercial reportable segment increased to 17.4% for the two quarters ended June 29, 2026, from 14.2% for the two quarters ended June 30, 2025. The primary drivers of these increases were as discussed in the paragraph above.”see in full comparison
Full comparison: every changed paragraph (42)
On June 1, 2026, we entered into the 2026 Credit Agreement, which amended and restated our Prior Term Loan Facility, and provided for the Amended Term Loan Facility and a new RCF that replaced our prior revolving credit facilities, which have been terminated. In addition, the 2026 Credit Agreement will permit us to add one or more senior secured incremental term loan facilities to the Amended Term Loan Facility, subject to the satisfaction of certain conditions.
On June 17, 2026, we announced that we had entered into definitive stock purchase agreements to acquire STG and ILFA in separate transactions. These proposed transactions are expected to close in the third quarter of 2026, subject to the satisfaction of regulatory approvals and other customary closing conditions. In connection with the proposed STG acquisition, we entered into an economic hedge to mitigate foreign currency risk of the CHF-denominated purchase price and interest related to the planned drawdown under the RCF to finance the proposed STG acquisition.
Our customers include both OEMs and EMS providers. We sell to OEMs both directly and indirectly through EMS providers. For such indirect sales, we measureclassify customersnet sales based on OEM companies as they are the ultimate end customers. Sales to our ten largest customers collectively accounted for 56%55% of our net sales for both the quarter and two quarters ended MarchJune 29, 2026. Sales to our ten largest customers collectively accounted for 53% and 54% of our net sales for the quarter and two quarters ended June 30, 20262025, and March 31, 2025.respectively.
The end market revenue for the quarter and two quarters ended MarchJune 31,30, 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.
Total net sales increased $197.3$273.4 million, or 30.4%,37.4%, to $846.0$1,004.1 million for the quarter ended MarchJune 30,29, 2026, from $648.7$730.6 million for the quarter ended MarchJune 31,30, 2025. The primary driver of this increase was due to continued strong demand in our data center and networking end market driven by the continued build out of AI data centers and related applications, as well as strong growth in our aerospace and defense and medical, industrial, and instrumentation and aerospace and defense end markets.
Total net sales increased $470.7 million, or 34.1%, to $1,850.0 million for the two quarters ended June 29, 2026, from $1,379.3 million for the two quarters ended June 30, 2025. The primary driver of this increase was due to continued strong demand in our data 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 increased $50.2$63.7 million to $181.2$211.9 million for the quarter ended MarchJune 30,29, 2026, from $131.0$148.1 million for the quarter ended MarchJune 31,30, 2025. Gross margin rate increased to 21.4%21.1% for the quarter ended MarchJune 30,29, 2026, from 20.2%20.3% for the quarter ended MarchJune 31,30, 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.execution.
Gross profit increased $114.0 million to $393.0 million for the two quarters ended June 29, 2026, from $279.1 million for the two quarters ended June 30, 2025. Gross margin rate increased to 21.2% for the two quarters ended June 29, 2026, from 20.2% for the two quarters ended June 30, 2025. These increases were primarily due to higher sales volume, favorable product mix, and improved operational execution.
Operating Expenses
Operating expenses increased $28.0$16.5 million to $108.7$102.8 million for the quarter ended MarchJune 30,29, 2026, from $80.7$86.3 million for the quarter ended MarchJune 31,30, 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,compensation, and vestingacquisition of certain performance-based stock grants.costs.
Operating expenses increased $44.5 million to $211.5 million for the two quarters ended June 29, 2026, from $167.1 million for the two quarters ended June 30, 2025, primarily due to higher stock-based compensation, labor costs, incentive compensation, and acquisition costs. The increase in stock-based compensation was primarily driven by exceeding predetermined targets, stock price appreciation, and vesting of certain performance-based stock grants.
Operating income increased $22.2$47.3 million to $72.4$109.1 million for the quarter ended MarchJune 30,29, 2026, from $50.3$61.8 million for the quarter ended MarchJune 31,30, 2025. Operating margin rate increased to 8.6%10.9% for the quarter ended MarchJune 30,29, 2026, from 7.7%8.5% for the quarter ended MarchJune 31,30, 2025. The primary drivers of these increases are discussed above in the variance explanations for Gross Profit and Margin Rate and Operating Expenses.
Operating income increased $69.5 million to $181.5 million for the two quarters ended June 29, 2026, from $112.0 million for the two quarters ended June 30, 2025. Operating margin rate increased to 9.8% for the two quarters ended June 29, 2026, from 8.1% for the two quarters ended June 30, 2025. The primary drivers of these increases are discussed above in the variance explanations for Gross Profit and Margin Rate and Operating Expenses.
Total other expense, net increased $4.7$11.6 million to $13.9$27.8 million for the quarter ended MarchJune 30,29, 2026, from $9.3$16.2 million for the quarter ended MarchJune 31,30, 2025, primarily due to a higher amount of foreign exchange losses during the quarter ended MarchJune 30,29, 2026 resulting from strengthening RMB and MYR during the quarter ended MarchJune 30,29, 2026 as compared to the quarter ended MarchJune 31,30, 2025. We utilize the RMB and MYR at our China and Malaysia facilities, respectively, for employee‑related and other costs of running our operations in foreign countries.
Total other expense, net increased $16.2 million to $41.7 million for the two quarters ended June 29, 2026, from $25.5 million for the two quarters ended June 30, 2025, primarily due to a higher amount of foreign exchange losses during the two quarters ended June 29, 2026 resulting from strengthening RMB and MYR during the two quarters ended June 29, 2026 as compared to the two quarters ended June 30, 2025.
Income tax expensebenefit decreasedincreased $0.3$5.8 million to $8.5$1.8 million for the quarter ended MarchJune 30,29, 2026, from $8.8$4.0 million income tax expense for the quarter ended MarchJune 31,30, 2025, primarily due to tax benefits from the deduction of stock-based compensation, partially offset by tax expense driven by higher income before income taxes.
Income tax expense decreased $6.1 million to $6.7 million for the two quarters ended June 29, 2026, from $12.8 million for the two quarters ended June 30, 2025, primarily due to tax benefits from the deduction of stock-based compensation, partially offset by tax expense driven by higher income before income taxes.
Our effective tax rate is primarily impacted by the mix of foreign and U.S. income, tax rates in China and Hong Kong, the U.S. federal income tax rate, apportioned state income tax rates, the generation of credits and deductions available to us as well as changes in valuation allowances and certain non-deductible items. We had a net deferred income tax liability of $45.2$52.8 million and $40.6$41.8 million as of MarchJune 30,29, 2026 and MarchJune 31,30, 2025, respectively.
Amortization of definite-lived intangibles relates to the A&D and Commercial reportable segments,segment, 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,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.
Segment sales for the A&D reportable segment increased $35.4$47.6 million, or 11.2%,14.2%, to $351.7$382.8 million for the quarter ended MarchJune 30,29, 2026, from $316.3$335.2 million for the quarter ended MarchJune 31,30, 2025. The primary drivers of this increase were strong defense budget spending, our strong strategic program alignment, and key bookings for ongoing franchise programs, including restricted programs. These increases were driven by increased sales related to missiles and munitions as well as strong demand in our mission systems and specialty assembly businesses.
Segment sales for the A&D reportable segment increased $83.0 million, or 12.7%, to $734.4 million for the two quarters ended June 29, 2026, from $651.4 million for the two quarters ended June 30, 2025. The primary drivers of the increase were as discussed in the paragraph above.
Segment operating income for the A&D reportable segment increased $12.4$15.7 million to $54.8$63.9 million for the quarter ended MarchJune 30,29, 2026, from $42.4$48.1 million for the quarter ended MarchJune 31,30, 2025. Segment operating margin rate for the A&D reportable segment increased to 15.6%16.7% for the quarter ended MarchJune 30,29, 2026, from 13.4%14.4% for the quarter ended MarchJune 31,30, 2025. The primary drivers of these increases were higher sales volume, as discussed above, favorable product mix, and improved operational execution.
Segment operating income for the A&D reportable segment increased $28.1 million to $118.6 million for the two quarters ended June 29, 2026, from $90.5 million for the two quarters ended June 30, 2025. Segment operating margin rate for the A&D reportable segment increased to 16.2% for the two quarters ended June 29, 2026, from 13.9% for the two quarters ended June 30, 2025. The primary drivers of these increases were as discussed in the paragraph above.
Segment sales for the Commercial reportable segment increased $162.3$226.0 million, or 48.8%,57.1%, to $495.0$621.6 million for the quarter ended MarchJune 30,29, 2026, from $332.7$395.6 million for the quarter ended MarchJune 31,30, 2025. The primary driverdrivers of this increase waswere strong demand in our data center and networking end market driven by the continued buildout of AI data centers and related applications, as well as strong sales performance in our medical, industrial, and instrumentation end market.
Segment sales for the Commercial reportable segment increased $388.3 million, or 53.3%, to $1,116.6 million for the two quarters ended June 29, 2026, from $728.3 million for the two quarters ended June 30, 2025. The primary drivers of this increase were as discussed in the paragraph above.
Segment operating income for the Commercial reportable segment increased $37.9$52.6 million to $81.6$112.7 million for the quarter ended MarchJune 30,29, 2026, from $43.6$60.1 million for the quarter ended MarchJune 31,30, 2025. Segment operating margin rate for the Commercial reportable segment increased to 16.5%18.1% for the quarter ended MarchJune 30,29, 2026, from 13.1%15.2% for the quarter ended MarchJune 31,30, 2025. The primary driverdrivers of these increases waswere higher sales volume, as discussed above, improving mix, and improved operational execution, partially offset by increased ramp-up costs in connection with our fabrication plant in Penang, Malaysia.execution.
Segment operating income for the Commercial reportable segment increased $90.5 million to $194.2 million for the two quarters ended June 29, 2026, from $103.7 million for the two quarters ended June 30, 2025. Segment operating margin rate for the Commercial reportable segment increased to 17.4% for the two quarters ended June 29, 2026, from 14.2% for the two quarters ended June 30, 2025. The primary drivers of these increases were as discussed in the paragraph above.
Our principal sources of liquidity have been cash provided by operations, the issuance of debt, and borrowings under our revolving credit facilities.RCF. Our principal uses of cash have been to finance capital expenditures, finance acquisitions, fund working capital requirements, repay debt obligations, and repurchase common stock. We anticipate that financing capital expenditures, financing acquisitions including but not limited to the proposed STG and ILFA acquisitions, funding working capital requirements, servicing debt, and repurchasing common stock will be the principal demands on our cash in the future.
Cash flow provided by operating activities during the first quartertwo quarters of 2026 was $21.7$118.2 million as compared to cash flow usedprovided inby operating activities of $10.7$87.1 million in the same period in 2025. The increase in cash flow was primarily due to an increase in net income of $17.8$59.3 million.million partially offset by increased working capital largely driven by the timing of collections.
Net cash used in investing activities during the first quartertwo quarters of 2026 was $106.8$157.2 million, consistingprimarily resulting from the use of $169.2 million for net purchases of property, plant, and equipment and other assets, partially offset by the receipt of $12.0 million of proceeds from the sale of property, plant, and equipment and other assets. Net cash used in investing activities during the first quartertwo quarters of 2025 was $63.2$123.5 million, primarily resulting from the use of $63.3$123.7 million for net purchases of property, plant, and equipment and other assets.
Net cash usedprovided inby financing activities during the first quartertwo quarters of 2026 was $6.2$45.6 million, primarily resultingreflecting proceeds from thelong-term debt borrowing of $199.2 million, partially offset by repayment of long-term debt borrowings of $143.3 million, repayments of $5.0 million for customer depositsdeposits, and $0.9$4.7 million for long-termpayment of debt borrowings.issuance costs. Net cash used in financing activities during the first quartertwo quarters of 2025 was $18.8$19.8 million, reflecting the use of $17.9 million for repurchases of common stock and $0.9$1.9 million for the repayment of long-term debt borrowings.
As of MarchJune 30,29, 2026, we had cash and cash equivalents of approximately $410.0$507.9 million, of which approximately $156.4$185.4 million was held by our foreign subsidiaries, primarily in China, and $189.5$913.9 million of available borrowing capacity under our revolvingRCF, and $5.7 million of available letters of credit facilities.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.
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 MarchJune 30,29, 2026. As of MarchJune 30,29, 2026, the remaining amount in value available to be repurchased under the 2025 Repurchase Program was $100.0 million.
As of MarchJune 30,29, 2026, we had $915.7$973.5 million of outstanding debt, net of discount and issuance costs, composed of $497.6$497.8 million of Senior Notes due 2029, $336.2$395.7 million under the Amended Term Loan Facility, and $80.0 million under the Asia ABL, and $1.9 million of other loans.RCF.
Pursuant to the terms of the Senior Notes due 2029 and the 2026 Credit Agreement (which provides for the Amended Term Loan Facility,Facility and the RCF), we are subject to certain affirmative and negative covenants, including limitations on indebtedness, corporate transactions, investments, dispositions, and restricted payments.payments, Underand with respect to the ABL Revolving Loans, we are also subject toRCF, various financial covenants, including leverage and fixed-chargeinterest coverage ratios. As of MarchJune 30,29, 2026, we were in compliance with the covenants under the Senior Notes due 2029, Term Loan Facility,2029 and ABLthe Revolving2026 Loans.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 termavailable term, incremental, and revolving debt will be adequate to meet our currently anticipated capital expenditure, acquisitions, debt service, and working capital needs for the next 12 months. Additional information regarding our indebtedness, including information about the credit available under our debt facilities, interest rates, and other key terms of our outstanding indebtedness, is included in Part I, Item 1, Note 7, Long‑term Debt and Letters of Credit, of the Notes to Consolidated Condensed Financial Statements included in this Report.
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$15.3 million and $12.5 million as of MarchJune 30,29, 2026 and December 29, 2025, respectively.
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.
A summary of our long-term debt obligations as of June 29, 2026 is included in Part I, Item 1, Note 7, Long‑term Debt and Letters of Credit, of the Notes to Consolidated Condensed Financial Statements included in this Report.
Our aggregate interest on debt obligations as of June 29, 2026, amounted to $162.8 million, which is expected to be settled as follows: $45.9 million within 1 year, $89.9 million within 1-3 years, and $27.0 million within 4-5 years. For debt obligations based on variable rates, interest rates used are as of June 29, 2026.
As of June 29, 2026, there were no other material changes outside the ordinary course of business since December 29, 2025 to our contractual obligations and commitments and the related cash requirements.
TTMI insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 2 Form 4 filings (2 insiders, 2 trade dates, 15,000 shares, about $1.6M) and open-market sales in 21 filings (11 insiders, 4 trade dates, 125,041 shares, about $23.6M; 20 of these filings say the sales were made under a Rule 10b5-1 trading plan). Net open-market shares: -110,041 (purchases minus sales); net value about -$21.9M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-02 | Roks Edwin |
Shares withheld for tax | 5,331 | $115.33 | $614.8K |
| 2026-08-25 | Roks Edwin |
Open-market purchase | 10,000 | $111.77 | $1.1M |
| 2026-08-25 | Boehle Daniel L. |
Shares withheld for tax |
5,890 | $112.14 | $660.5K |
| 2026-08-24 | Geveden Rex D |
Open-market purchase | 5,000 | $104.90 | $524.5K |
| 2026-08-10 | Knecht Dale Martin |
Open-market sale | 26,198 | $142.00 | $3.7M |
| 2026-06-25 | Walsh James P |
Open-market sale |
118 | $204.95 | $24.2K |
| 2026-06-25 | Walsh James P |
Open-market sale |
43 | $206.25 | $8.9K |
| 2026-06-25 | Walsh James P |
Open-market sale |
108 | $207.04 | $22.4K |
| 2026-06-25 | Walsh James P |
Open-market sale |
801 | $208.40 | $166.9K |
| 2026-06-25 | Walsh James P |
Open-market sale |
507 | $209.06 | $106.0K |
| 2026-06-25 | Walsh James P |
Open-market sale |
290 | $210.10 | $60.9K |
| 2026-06-25 | Walsh James P |
Open-market sale |
7 | $218.27 | $1.5K |
| 2026-06-25 | Walsh James P |
Open-market sale |
11 | $211.86 | $2.3K |
| 2026-06-25 | Walsh James P |
Open-market sale |
12 | $213.51 | $2.6K |
| 2026-06-25 | Walsh James P |
Open-market sale |
9 | $214.46 | $1.9K |
| 2026-06-25 | Walsh James P |
Open-market sale |
11 | $216.49 | $2.4K |
| 2026-06-25 | Walsh James P |
Open-market sale |
18 | $217.43 | $3.9K |
| 2026-06-25 | Walsh James P |
Open-market sale |
178 | $211.08 | $37.6K |
| 2026-06-25 | Romo Elizabeth |
Open-market sale |
40 | $204.95 | $8.2K |
| 2026-06-25 | Romo Elizabeth |
Open-market sale |
15 | $206.25 | $3.1K |
| 2026-06-25 | Romo Elizabeth |
Open-market sale |
37 | $207.04 | $7.7K |
| 2026-06-25 | Romo Elizabeth |
Open-market sale |
273 | $208.40 | $56.9K |
| 2026-06-25 | Romo Elizabeth |
Open-market sale |
173 | $209.06 | $36.2K |
| 2026-06-25 | Romo Elizabeth |
Open-market sale |
99 | $210.10 | $20.8K |
| 2026-06-25 | Romo Elizabeth |
Open-market sale |
1 | $218.27 | $218 |
| 2026-06-25 | Romo Elizabeth |
Open-market sale |
4 | $211.86 | $847 |
| 2026-06-25 | Romo Elizabeth |
Open-market sale |
4 | $213.51 | $854 |
| 2026-06-25 | Romo Elizabeth |
Open-market sale |
3 | $214.46 | $643 |
| 2026-06-25 | Romo Elizabeth |
Open-market sale |
4 | $216.49 | $866 |
| 2026-06-25 | Romo Elizabeth |
Open-market sale |
6 | $217.43 | $1.3K |
| 2026-06-25 | Romo Elizabeth |
Open-market sale |
61 | $211.08 | $12.9K |
| 2026-06-25 | Boehle Daniel L. |
Open-market sale |
1 | $203.68 | $204 |
| 2026-06-25 | Boehle Daniel L. |
Open-market sale |
235 | $204.95 | $48.2K |
| 2026-06-25 | Boehle Daniel L. |
Open-market sale |
85 | $206.25 | $17.5K |
| 2026-06-25 | Boehle Daniel L. |
Open-market sale |
216 | $207.04 | $44.7K |
| 2026-06-25 | Boehle Daniel L. |
Open-market sale |
1,600 | $208.40 | $333.4K |
| 2026-06-25 | Boehle Daniel L. |
Open-market sale |
1,011 | $209.06 | $211.4K |
| 2026-06-25 | Boehle Daniel L. |
Open-market sale |
13 | $218.27 | $2.8K |
| 2026-06-25 | Boehle Daniel L. |
Open-market sale |
355 | $211.08 | $74.9K |
| 2026-06-25 | Boehle Daniel L. |
Open-market sale |
22 | $211.86 | $4.7K |
| 2026-06-25 | Boehle Daniel L. |
Open-market sale |
25 | $213.51 | $5.3K |
| 2026-06-25 | Boehle Daniel L. |
Open-market sale |
19 | $214.46 | $4.1K |
| 2026-06-25 | Boehle Daniel L. |
Open-market sale |
22 | $216.49 | $4.8K |
| 2026-06-25 | Boehle Daniel L. |
Open-market sale |
36 | $217.43 | $7.8K |
| 2026-06-25 | Boehle Daniel L. |
Open-market sale |
578 | $210.10 | $121.4K |
| 2026-06-25 | Clapprood Tom |
Open-market sale |
104 | $211.08 | $22.0K |
| 2026-06-25 | Clapprood Tom |
Open-market sale |
6 | $211.86 | $1.3K |
| 2026-06-25 | Clapprood Tom |
Open-market sale |
7 | $213.51 | $1.5K |
| 2026-06-25 | Clapprood Tom |
Open-market sale |
6 | $214.46 | $1.3K |
| 2026-06-25 | Clapprood Tom |
Open-market sale |
6 | $216.49 | $1.3K |
| 2026-06-25 | Clapprood Tom |
Open-market sale |
69 | $204.95 | $14.1K |
| 2026-06-25 | Clapprood Tom |
Open-market sale |
25 | $206.25 | $5.2K |
| 2026-06-25 | Clapprood Tom |
Open-market sale |
11 | $217.43 | $2.4K |
| 2026-06-25 | Clapprood Tom |
Open-market sale |
5 | $218.27 | $1.1K |
| 2026-06-25 | Clapprood Tom |
Open-market sale |
63 | $207.04 | $13.0K |
| 2026-06-25 | Clapprood Tom |
Open-market sale |
470 | $208.40 | $97.9K |
| 2026-06-25 | Clapprood Tom |
Open-market sale |
297 | $209.06 | $62.1K |
| 2026-06-25 | Clapprood Tom |
Open-market sale |
170 | $210.10 | $35.7K |
| 2026-06-25 | Knecht Dale Martin |
Open-market sale |
483 | $209.06 | $101.0K |
| 2026-06-25 | Knecht Dale Martin |
Open-market sale |
17 | $217.43 | $3.7K |
Well-known investors holding TTMI (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Whale Rock Capital Management | 2026-06-30 | 4,230,575 | $791.2M | 6.35% | Added 20% |
| Lone Pine Capital (Stephen Mandel) | 2026-06-30 | 2,738,075 | $512.1M | 3.13% | New position |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 777,177 | $145.3M | 0.05% | Added 5% |
| Millennium Management (Israel Englander) | 2026-06-30 | 738,767 | $138.2M | 0.09% | Added 98% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 528,648 | $98.9M | 0.06% | Added 103% |
| Third Point (Dan Loeb) | 2026-06-30 | 505,000 | $94.4M | 2.03% | New position |
| Two Sigma Investments | 2026-06-30 | 461,830 | $86.4M | 0.06% | Added 24% |
| First Eagle Investment Management | 2026-06-30 | 157,414 | $29.4M | 0.05% | Reduced 30% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 56,447 | $10.6M | 0.02% | Reduced 69% |
| Bridgewater Associates | 2026-06-30 | 59,223 | $5.8M | — | Sold out |
| Renaissance Technologies | 2026-06-30 | 27,369 | $5.1M | 0.01% | Reduced 93% |
| D. E. Shaw & Co. | 2026-06-30 | 14,446 | $2.7M | 0.0% | Added 8% |