Ichor Holdings ICHR Form 10-Q filing Q1 FY2026

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

ICHOR HOLDINGS, LTD.

Notes to Consolidated Financial Statements

(dollar figures in tables in thousands, except per share amounts)

(unaudited)

Note 1 – Basis of Presentation and Selected Significant Accounting Policies

Basis of Presentation

These consolidated unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”). All intercompany balances and transactions have been eliminated upon consolidation. All dollar figures presented in tables in the notes to the consolidated financial statements are in thousands, except per share amounts. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted as permitted by the U.S. Securities and Exchange Commission's rules and regulations for interim reporting. These consolidated financial statements should be read in conjunction with our audited financial statements and notes thereto included in our Annual Report on Form 10‑K for the year ended December 26, 2025.

Year End

We use a 52- or 53-week fiscal year ending on the last Friday in December. Our fiscal years ending December 25, 2026 and December 26, 2025 are each 52 weeks. References to 2026 and 2025 relate to the fiscal years then ended, respectively. The three-month periods ended March 27, 2026 and March 28, 2025 are each 13 weeks. References to the first quarter of 2026 and 2025 relate to the three-month periods then ended, respectively.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods presented. We base our estimates and judgments on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Actual results could differ from the estimates made by management. Significant estimates include inventory valuation, uncertain tax positions, valuation allowance on deferred tax assets, and impairment analysis for both definite‑lived intangible assets and goodwill.

Cash and Cash Equivalents

Cash and cash equivalents consist of deposits and financial instruments which are readily convertible into cash and have original maturities of 90 days or less at the time of acquisition.

Fair Value of Financial Instruments

The carrying values of our financial instruments, including cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued liabilities, and long-term debt, net of unamortized debt issuance costs, approximate fair value.

Revenue Recognition

We recognize revenue when control of promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. This amount is recorded as net sales in our consolidated statements of operations.

Transaction price – In most of our contracts, prices are generally determined by a customer-issued purchase order and generally remain fixed over the duration of the contract. Certain contracts contain variable consideration, including early-payment discounts and rebates. When a contract includes variable consideration, we evaluate the estimate of the variable consideration to determine whether the estimate needs to be constrained; therefore, we include the variable consideration in the transaction price only to the extent that it is probable that a significant reversal will not occur. Variable consideration estimates are updated at each reporting date. Historically, we have not incurred significant costs to obtain a contract. All amounts billed to a customer relating to shipping and handling are classified as net sales, while all costs incurred by us for shipping and handling are classified as cost of sales.

Performance obligations – Substantially all of our performance obligations pertain to promised goods (“products”), which are primarily comprised of fluid delivery subsystems, weldments, and other components. Most of our contracts contain a single performance obligation and are generally completed within 12 months. Product sales are recognized at a point-in-time, upon "delivery," as such term is defined within the contract, which is generally at the time of shipment, as that is when control of the product has transferred. Products are covered by a standard assurance warranty, generally extended for a period of one to two years depending on the customer, which promises that delivered products conform to contract specifications. As such, we account for such warranties under Accounting Standards Codification ("ASC") Topic 460, Guarantees, and not as a separate performance obligation.

Contract balances – Accounts receivable represents our unconditional right to receive consideration from our customers. Accounts receivable are carried at invoice price less an estimate for doubtful accounts and estimated payment discounts. Payment terms vary by customer, but payment is generally due within 15 to 60 days of purchase. Historically, we have not experienced significant payment issues with our customers. We had no significant contract assets or liabilities on our consolidated balance sheets in any of the periods presented herein.

Accounting Pronouncements Recently Issued

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40). The ASU requires disaggregation of certain expense captions into specified natural expense categories in the disclosures within the notes to the financial statements. In addition, it requires disclosure of selling expenses and its definition. The ASU is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The guidance can be applied either prospectively or retrospectively. We are currently evaluating the effect that the adoption of this ASU may have on our consolidated financial statements.

Note 2 – Inventories

Inventories consist of the following:

Note 3 – Property and Equipment and Other Noncurrent Assets

Property and equipment consist of the following:

Depreciation expense was $5.1 million and $5.6 million for the first quarter of 2026 and 2025, respectively.

Cloud Computing Implementation Costs

We capitalize implementation costs associated with hosting arrangements that are service contracts. These costs are recorded to prepaid expenses or other noncurrent assets. To date, these costs have been those incurred to implement a new company-wide enterprise resource planning system. The balance of capitalized cloud computing implementation costs, net of accumulated amortization, was $12.0 million and $12.4 million as of March 27, 2026 and December 26, 2025, respectively, and is included in other noncurrent assets on our consolidated balance sheets. The related amortization expense, which is included in selling, general, and administrative expenses on our consolidated statements of operations, was $0.4 million and $0.4 million for the first quarter of 2026 and 2025, respectively.

Note 4 – Intangible Assets

Definite‑lived intangible assets consist of the following:

Note 5 – Leases

Operating lease right-of-use (“ROU”) assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. For purposes of calculating operating lease ROU assets and liabilities, we use the non-cancelable lease term plus options to extend that we are reasonably certain to take. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Our leases generally do not provide an implicit rate. As such, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments.

We lease facilities under non-cancelable operating leases that expire at various dates from 2026 through 2037. In addition to base rental payments, we are generally responsible for our proportionate share of operating expenses, including facility maintenance, insurance, and property taxes. As these amounts are variable, they are not included in lease liabilities.

For the first quarter of 2026 and 2025, no impairment charges were recognized in connection with our ROU lease assets.

The components of lease expense are as follows:

Supplemental cash flow information related to leases is as follows:

Supplemental balance sheet information related to leases is as follows:

Future minimum lease payments under non-cancelable leases are as follows as of March 27, 2026:

Note 6 – Income Taxes

Income tax information for the periods reported is as follows:

The increase in income tax expense from the first quarter of 2025 to the first quarter of 2026 was primarily due to taxes on foreign income that differs from the U.S. tax rate, the ending of our tax holiday in Singapore on March 31, 2026, and the impact of a valuation allowance against U.S. deferred tax assets.

The ending balance of unrecognized tax benefits for uncertain tax positions was approximately $4.1 million as of March 27, 2026. The related interest was insignificant, and the related penalties were $0.7 million.

As of March 27, 2026, we were under examination by California tax authorities for fiscal years 2020-2022.

Note 7 – Employee Benefit Programs

401(k) Plan

We sponsor a 401(k) plan available to employees of our U.S.‑based subsidiaries. Participants may make salary deferral contributions not to exceed 50% of a participant’s annual compensation or the maximum amount otherwise allowed by law. Eligible employees receive a discretionary matching contribution equal to 50% of a participant’s deferral, up to an annual matching maximum of 4% of a participant’s annual compensation. Matching contributions were $0.8 million and $0.8 million for the first quarter of 2026 and 2025, respectively.

Note 8 – Long-Term Debt

Long‑term debt consists of the following:

On September 26, 2025, we entered into an amended and restated credit agreement, which includes a group of financial institutions as direct lenders under the agreement (the "credit agreement"). The credit agreement includes a $125.0 million term loan facility and a $100.0 million revolving credit facility (together, “credit facilities”). The revolving credit facility also contains a $20.0 million letter of credit sub-facility and a $10.0 million swingline sub-facility. Quarterly term loan principal payments of $1.6 million commenced on December 31, 2025, and the amount of such quarterly term loan payments will increase to $2.3 million on September 30, 2028, and $3.1 million on September 30, 2029. The credit agreement matures on September 26, 2030.

The credit agreement includes debt covenants, which contain certain financial thresholds, and place certain restrictions on the incurrence of debt, investments, and issuance of dividends. We were in compliance as of March 27, 2026.

As of March 27, 2026, interest is charged at either the Base Rate or SOFR (as such terms are defined in the credit agreement) at our option, plus an applicable margin. The Base Rate is equal to the higher of i) the Prime Rate, ii) the Federal Funds Rate plus 0.50%, or iii) SOFR plus 1.00%. The applicable margin on Base Rate and SOFR loans is 0.750% to 1.750% and 1.750% to 2.750% per annum, respectively, depending on our leverage ratio, which is based on trailing 12-month consolidated EBITDA, as defined in our credit agreement. We are also charged a commitment fee of 0.175% to 0.350%, depending on our leverage ratio, on the unused portion of our revolving credit facility. Base Rate interest payments and commitment fees are due quarterly. SOFR interest payments are due on the last day of the applicable interest period, or quarterly for applicable interest periods longer than three months. As of March 27, 2026, our credit facilities bore interest under the SOFR option at 5.92%.

Note 9 – Share‑Based Compensation

On March 26, 2025, the Human Capital Committee of our Board of Directors approved the Ichor Holdings, Ltd. 2025 Omnibus Incentive Plan (the "2025 Plan"). The 2025 Plan was approved by our stockholders on May 14, 2025, and allows for the issuance of 2,963,471 shares to be used for awards under the Plan, subject to the applicable adjustment and share recycling provisions set forth in the 2025 plan. The 2025 Plan replaces the Ichor Holdings, Ltd. 2016 Omnibus Incentive Plan (the "2016 Plan") in its entirety, except with respect to awards granted under the 2016 Plan prior to the effective date of the 2025 Plan.

The 2025 Omnibus Incentive Plan provides for grants of share‑based awards to employees, directors, and consultants. Awards may be in the form of stock options (“options”), tandem and non‑tandem stock appreciation rights, restricted share awards or restricted share units (“RSUs”), performance awards, and other share‑based awards. Forfeited or expired awards are returned to the incentive plan pool for future grants. Awards generally vest over four years, 25% on the first anniversary of the date of grant and quarterly thereafter over the remaining three years. Upon vesting of RSUs, shares are withheld to cover statutory minimum withholding taxes. Shares withheld are not reflected as an issuance of ordinary shares within our consolidated statements of shareholders’ equity, as the shares are never issued, and the associated tax payments are reflected as financing activities within our consolidated statements of cash flows.

Share‑based compensation expense across all plans for options, RSUs, and employee share purchase rights was $3.8 million and $4.1 million for the first quarter of 2026 and 2025, respectively.

Stock Options

The following table summarizes option activity:

Restricted Share Units

The following table summarizes RSU activity:

Employee Share Purchase Plan

The 2017 Employee Stock Purchase Plan (the “2017 ESPP”) grants employees the ability to designate a portion of their base-pay to purchase ordinary shares at a price equal to 85% of the fair market value of our ordinary shares on the first or last day of each six-month purchase period. Purchase periods begin on January 1 or July 1 and end on June 30 or December 31 (or the next business day if such date is not a business day). Shares are purchased on the last day of the purchase period.

As of March 27, 2026, approximately 1.9 million ordinary shares remain available for purchase under the 2017 ESPP.

Note 10 – Segment Information

We operate as a single business operating segment, which includes all activities related to the design, engineering, and manufacturing of critical fluid delivery subsystems and components for semiconductor capital equipment. Accordingly, we report as one operating segment. The determination of a single business operating segment is consistent with the consolidated financial information regularly provided to our CODM. The consolidated financial information provided to our CODM does not contain significant disaggregated expenses outside of what is already disclosed in our statements of operations and notes thereto included in these consolidated financial statements. Our CODM is our Chief Executive Officer, and the CODM reviews and evaluates consolidated net income for purposes of assessing performance, making operating decisions, allocating resources, and planning and forecasting for future periods.

Foreign operations are conducted primarily through our wholly owned subsidiaries in Singapore, Malaysia, and Mexico. Our principal markets include North America, Asia, and, to a lesser degree, Europe.

The following table sets forth sales by geographic area, which represents sales to unaffiliated customers based upon the location to which the products were shipped:

Foreign long-lived assets, exclusive of deferred tax assets, were $75.1 million and $71.3 million as of March 27, 2026 and December 26, 2025, respectively.

Note 11 – Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share and a reconciliation of the numerator and denominator used in the calculation:

(1) Represents potentially dilutive options and RSUs excluded from the calculation of diluted weighted average ordinary shares outstanding, because including them would have been antidilutive under the treasury stock method.

Note 12 - Restructuring

In the third quarter of 2025, our Board of Directors approved the Consolidation Restructuring Plan (the "Plan"), which was subsequently amended in the fourth quarter of 2025. The Plan includes activities and plans to align our geographic footprint with our long-term strategic plan. The amended restructuring plan expanded the scope of our initial plan to consolidate our footprint at additional sites. Key components of the Plan as of March 27, 2026 are as follows:

Impairment of inventory

As of March 27, 2026, total expected inventory impairment costs under the Plan are $19.8 million, all of which were recognized during 2025. These costs were recognized within cost of sales on our consolidated statement of operations. During the first quarter of 2026, we disposed of $11.5 million of impaired inventory. The remaining inventory impairment costs of $8.3 million are accrued as a contra-asset valuation account within inventories on our consolidated balance sheet as of March 27, 2026.

Fixed asset charges

As of March 27, 2026, total expected fixed asset charges under the Plan are approximately $5.4 million, of which $0.1 million were recognized during the first quarter of 2026 and $3.1 million were recognized during 2025. These costs were recognized within selling, general, and administrative expenses on our consolidated statement of operations. We expect to incur approximately an additional $2.2 million of fixed asset charges under the plan.

Impairment of operating right-of-use assets

As of March 27, 2026, total expected operating lease ROU asset impairment charges under the Plan are approximately $1.8 million, of which $0.9 million were recognized during 2025. These charges were recognized within selling, general, and administrative expenses on our consolidated statement of operations. We expect to incur approximately an additional $0.9 million of operating lease ROU asset impairment charges under the Plan.

Severance charges

As of March 27, 2026, total expected severance charges under the Plan are approximately $1.7 million, all of which were recognized during 2025. Of this amount recognized, $0.9 million and $0.8 million were recognized within cost of sales and selling, general, and administrative expenses, respectively, in 2025 on our consolidated statement of operations. During the first quarter of 2026, we made severance payments of $0.9 million. The remaining severance charges of $0.1 million are accrued within accrued liabilities on our consolidated balance sheet as of March 27, 2026.

Other Costs

Other costs include other direct and incremental costs incurred as result of the Plan, which primarily includes legal expenses, facility exit costs, and fixed asset transportation costs. As of March 27, 2026, total expected other costs under the Plan are approximately $3.2 million, of which $0.4 million were recognized during the first quarter of 2026 and $1.3 million were recognized during 2025. These costs were recognized within selling, general, and administrative expenses on our consolidated statement of operations. We expect to incur approximately an additional $1.5 million of other costs under the Plan.

We expect the Plan to be substantially complete by the end of 2026. We may incur additional expenses due to unanticipated events or changes in plan scope.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Non-GAAP net income $5,287 $4,236 Diluted EPS $(0.07) $(0.13) Non-GAAP diluted EPS $0.15 $0.12

Macroeconomic Conditions and Business Update

The semiconductor capital equipment industry is inherently cyclical. Overall semiconductor equipment spending in 2025 increased compared to 2024 levels, and this momentum has continued into the first quarter of 2026, characterized by robust demand in our primary markets of etch and deposition. During the three months ended March 27, 2026, our net sales increased to $256.1 million, compared to $244.5 million for the same period in the prior year. This increase reflects sustained demand from our primary customers and served markets.

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, which continued into the first quarter of 2026.

While we continue to benefit from the broader growth in the semiconductor equipment industry, our operations and financial results remain subject to significant risks and uncertainties within the global trade and regulatory landscape. Specifically, the global trade environment remains complex and volatile. The outcome of ongoing international trade negotiations and the imposition of new global tariffs create uncertainty that could materially affect our material costs, product pricing, and overall demand. In addition, the U.S. government continues to expand and refine export controls and licensing requirements aimed at restricting access to advanced semiconductor technology, particularly in China, which may reduce demand for certain equipment, disrupt our customers’ manufacturing plans, and adversely affect our global supply chain.

While macroeconomic, geopolitical, and regulatory challenges may persist in the near and intermediate term, we remain confident in our belief that long‑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.

Results of Operations

The following table sets forth our unaudited results of operations for the periods presented. The period‑to‑period comparison of results is not necessarily indicative of results for future periods.

(in thousands)

The following table sets forth our unaudited results of operations as a percentage of our total sales for the periods presented.

Comparison of the Three Months Ended March 27, 2026 and March 28, 2025

Net sales

(dollars in thousands)

The increase in net sales from the first quarter of 2025 to the first quarter of 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.

Gross margin

(dollars in thousands)

The increase in gross margin from the first quarter of 2025 to the first quarter of 2026 was primarily due to severance charges of $1.1 million in the first quarter of 2025 that did not repeat in the first quarter of 2026 and increased factory utilization.

Research and development

(dollars in thousands)

The decrease in research and development expenses from the first quarter of 2025 to the first quarter of 2026 was primarily due to a decrease in employee-related expenses, partially offset by an increase in material and service costs from our new product development programs.

Selling, general, and administrative

(dollars in thousands)

The increase in selling, general, and administrative expenses from the first quarter of 2025 to the first quarter of 2026 was primarily due to increased employee-related expenses of $1.3 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 million.

Amortization of intangible assets

(dollars in thousands)

Amortization expense remained substantially unchanged from the first quarter of 2025 to the first quarter of 2026.

Interest expense, net

(dollars in thousands)

Interest expense, net, remained substantially unchanged from the first quarter of 2025 to the first quarter of 2026 due to a decrease in our weighted average borrowings outstanding and a decrease in our weighted average borrowing rate, offset by lower interest income.

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 bps), partially offset by higher applicable margin, the fixed component of our borrowing rate, under our third quarter 2025 credit agreement (+45 bps).

Other expense, net

(dollars in thousands)

The change in other expense, net from the first quarter of 2025 to the first quarter of 2026 was primarily due to currency exchange rate fluctuations during the quarter related to our local currency payables of our foreign operations.

Income tax expense

(dollars in thousands)

The increase in income tax expense from the first quarter of 2025 to the first quarter of 2026 was primarily due to taxes on foreign income that differs from the U.S. tax rate, the ending of the Singapore tax holiday at the end of Q1 2026, and the impact of a valuation allowance against U.S. deferred tax assets, respectively.

Non‑GAAP Financial Results

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.

Non-GAAP results have limitations as an analytical tool, and you should not consider them in isolation or as a substitute for our results reported under GAAP. Other companies may calculate non-GAAP results differently or may use other measures to evaluate their performance, both of which could reduce the usefulness of our non-GAAP results as a tool for comparison.

Because of these limitations, you should consider non-GAAP results alongside other financial performance measures and results presented in accordance with GAAP. In addition, in evaluating non-GAAP results, you should be aware that in the future we will incur expenses such as those that are the subject of adjustments in deriving non-GAAP results and you should not infer from our presentation of non-GAAP results that our future results will not be affected by these expenses or other discrete or infrequent charges and gains that are outside of normal business operations.

The following table presents our unaudited non‑GAAP gross profit and non-GAAP gross margin and a reconciliation from GAAP gross profit, the most comparable GAAP measures, for the periods indicated:

(dollars in thousands)

(1) Represents costs associated with the exit from our Scotland and Korea operations. Included in this amount for the first quarter of 2025 is severance costs associated with affected employees of $0.3 million.

(2) Represents severance costs associated with our global reduction-in-force programs (other than severance costs associated with the exit from our Scotland and Korea operations, as described above).

The following table presents our unaudited non‑GAAP operating income and non-GAAP operating margin and a reconciliation from GAAP operating income (loss), the most comparable GAAP measures, for the periods indicated:

(dollars in thousands, except per share amounts)

(1) Represents the costs associated with our Consolidation Restructuring Plan. Included in this amount for the first quarter of 2026 are: other direct and incremental restructuring related costs of $0.4 million and fixed asset charges of $0.1 million.

(2) Represents costs associated with the exit from our Scotland and Korea operations. Included in this amount for the first quarter of 2026 and for the first quarter of 2025 are other direct and incremental facility exit-related costs of $0.1 million and severance costs associated with affected employees of $0.6 million, respectively.

(3) Represents severance costs associated with our global reduction-in-force programs (other than severance costs associated with the exit from our Scotland and Korea operations, as described above).

The following table presents our unaudited non‑GAAP net income and non-GAAP diluted EPS and a reconciliation from net loss, the most comparable GAAP measure, for the periods indicated. 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."

(dollars in thousands, except per share amounts)

(1) Represents the costs associated with our Consolidation Restructuring Plan. Included in this amount for the first quarter of 2026 are other direct and incremental restructuring related costs of $0.4 million and fixed asset charges of $0.1 million.

(2) Represents costs associated with the exit from our Scotland and Korea operations. Included in this amount for the first quarter of 2026 and for the first quarter of 2025 are other direct and incremental facility exit-related costs of $0.1 million and severance costs associated with affected employees of $0.6 million, respectively.

(3) Represents severance costs associated with our global reduction-in-force programs (other than severance costs associated with the exit from our Scotland and Korea operations, as described above).

(4) Adjusts GAAP income tax expense for the impact of our non-GAAP adjustments, which are presented on a gross basis.

(5) During the first quarter of 2025, we recorded a valuation allowance against the deferred tax assets of our Scotland and Korea operations.

Liquidity and Capital Resources

The following section discusses our liquidity and capital resources, including our primary sources of liquidity and our material cash requirements. Our cash and cash equivalents are maintained in highly liquid and accessible accounts with no significant restrictions.

Material Cash Requirements

Our primary liquidity requirements arise from: (i) working capital requirements, including procurement of raw materials inventory for use in our factories and employee-related costs, (ii) business acquisitions, (iii) interest and principal payments under our credit facilities, (iv) research and development investments and capital expenditures, (v) payment of income taxes, and (vi) payments associated with our noncancellable leases and related occupancy costs. We have no significant long-term purchase commitments related to procuring raw materials inventory. Our ability to fund these requirements will depend, in part, on our future cash flows, which are determined by our future operating performance and are therefore subject to prevailing global macroeconomic conditions, such as interest rates, increased tariffs and retaliatory trade policies, geopolitical events, and financial, business, and other factors, some of which are beyond our control.

We believe that our cash and cash equivalents, the amounts available under our credit facilities, and our operating cash flow will be sufficient to fund our business and our current obligations for at least the next 12 months and beyond.

Sources and Conditions of Liquidity

Our ongoing sources of liquidity to fund our material cash requirements are primarily derived from: (i) sales to our customers and the related changes in our net operating assets and liabilities and (ii) proceeds from our credit facilities and equity offerings, when applicable.

Summary of Cash Flows

We ended the first quarter of 2026 with cash and cash equivalents of $89.1 million, a decrease of $9.2 million from the prior year ended December 26, 2025. The decrease of $9.2 million for the first quarter of 2026 was primarily due to capital expenditures of $7.1 million and cash used in operating activities of $2.9 million.

The following table sets forth a summary of operating, investing, and financing activities for the periods presented:

(in thousands)

Our cash used in operating activities of $2.9 million for the first quarter of 2026 consisted of an increase in our net operating assets and liabilities of $12.7 million and a net loss of $2.5 million, partially offset by non-cash charges of $12.2 million, consisting primarily of depreciation and amortization of $7.7 million and share-based compensation expense of $3.8 million.

The increase in our net operating assets and liabilities of $12.7 million during the first quarter of 2026 was primarily due to an increase in accounts receivable of $22.6 million and an increase in inventory of $20.5 million, partially offset by an increase in accounts payable of $27.4 million, and a decrease in prepaid expenses and other assets of $2.9 million. The decrease in cash provided by operating activities from the three months ended March 28, 2025 to the three months ended March 27, 2026 was primarily due to unfavorable changes in working capital of $23.7 million and a decrease in net non-cash charges of $0.3 million, partially offset by a decrease in net loss of $2.1 million.

Cash used in investing activities during the three months ended March 27, 2026 and March 28, 2025 consisted of capital expenditures.

Cash provided by financing activities during the three months ended March 27, 2026 consisted of net proceeds from share-based compensation activity of $2.3 million, partially offset by net payments on our credit facilities of $1.6 million. The increase in cash provided by financing activities from the three months ended March 28, 2025 to the three months ended March 27, 2026 was primarily due to an increase in the net proceeds from share-based compensation activity of $0.4 million.

Critical Accounting Estimates

Our consolidated financial statements have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales, expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. Actual results may differ from these estimates. To the extent that there are material differences between these estimates and our actual results, our future financial statements will be affected.

The critical accounting policies requiring estimates, assumptions, and judgments that we believe have the most significant impact on our consolidated financial statements are identified and described in our annual consolidated financial statements and the notes included in our 2025 Annual Report on Form 10‑K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Please see our 2025 Annual Report on Form 10-K (Part II, Item 7A). There have been no material changes to this information.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer (the "certifying officers"), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a‑15(e) and 15d‑15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act”)) as of the end of the period covered by this report. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based on the evaluation of our disclosure controls and procedures as required by Rule 13a-15(b) or 15d-15(b) of the Exchange Act, our certifying officers concluded that our disclosure controls and procedures were effective as of March 27, 2026.

Inherent limitations on Effectiveness of Controls and Procedures

A company’s internal control over financial reporting is a process designed by, or under the supervision of, a company’s principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate. If we cannot provide reliable financial information, our business, operating results, and share price could be negatively impacted.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f) of the Exchange Act) during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

At this time, neither we nor any of our subsidiaries is a party to, and none of our respective property is the subject of, any legal proceeding that, if determined adversely to us, would have a material adverse effect on us.

ITEM 1A. RISK FACTORS

This quarterly report should be read in conjunction with the risk factors included in our 2025 Annual Report on Form 10‑K. These risk factors do not identify all risks that we face – our operations could also be affected by factors that are not presently known to us or that we currently consider to be immaterial to our operations. Due to risks and uncertainties, known and unknown, our past financial results may not be a reliable indicator of future performance and historical trends should not be used to anticipate results or trends in future periods.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Rule 10b5-1 Trading Plans

On February 26, 2026, Greg Swyt, Chief Financial Officer, entered into a 10b5-1 trading arrangement intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) promulgated under the Exchange Act. The trading arrangement provides for the potential sale of an aggregate of up to 63,273 of ordinary shares, consisting of sellable shares, vesting restricted stock units, and vesting performance shares. The actual amount of which may be less based on tax withholdings and the achievement of performance, market, and service conditions. These shares were granted to Mr. Swyt under our 2016 and 2025 Omnibus Incentive Plans. The trading arrangement will expire on April 30, 2027, and may be terminated earlier in the limited circumstances defined in the trading arrangement.

On March 5, 2026, Philip Barros, Chief Executive Officer and a director of the Company, entered into a 10b5-1 trading arrangement intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) promulgated under the Exchange Act. The trading arrangement provides for the potential sale of an aggregate of up to 74,239 of ordinary shares, consisting of sellable shares, vested stock options, vesting restricted stock units, and vesting performance shares. The actual amount of which may be less based on tax withholdings and the achievement of performance, market, and service conditions. These shares were granted to Mr. Barros under our 2016 and 2025 Omnibus Incentive Plans. The trading arrangement will expire on March 31, 2027, and may be terminated earlier in the limited circumstances defined in the trading arrangement.

ITEM 6. EXHIBITS

Exhibit Number Description

31.1* Certification of Principal Executive Officer Pursuant to Rules 13a‑14(a) and 15d‑14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002. 31.2* Certification of Principal Financial Officer Pursuant to Rules 13a‑14(a) and 15d‑14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002. 32.1** Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002. 32.2** Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002. 101.INS* Inline XBRL Instance Document 101.SCH* Inline XBRL Taxonomy Extension Schema Document 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document (104) Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)

*Filed herewith.

**Furnished herewith and not filed.