VISHAY INTERTECHNOLOGY INC

Previous wording

Our goal is to enhance stockholder value by growing our business and improving earnings per share. Since 1985, we have pursued a business strategy of growth through focused research and development and acquisitions. We plan to continue to grow our business through intensified internal growth supplemented by opportunistic acquisitions, while maintaining a prudent capital structure. As we advance our Think Customer First organizational culture in 2026, we are focused on maintaining capacity readiness to fulfill rising demand, growing existing customer relationships, attracting new customer relationships, driving innovation, delivering new products and solutions, and expanding production in low cost countries to support our regional competitiveness.

Current wording

Our goal is to enhance stockholder value by growing our business and improving earnings per share. Since 1985, we have pursued a business strategy of growth through focused research and development and acquisitions. We plan to continue to grow our business through intensified internal growth supplemented by opportunistic acquisitions, while maintaining a prudent capital structure. As we advance our Think Customer First organizational culture in 2026, we are focused on maintaining capacity readiness to fulfill rising demand, growing existing customer relationships, attracting new customer relationships, driving innovation, delivering new products and solutions, and expanding production in low cost countries to support our regional competitiveness. We continue to evaluate our manufacturing footprint for ways to improve efficiency and profitability while maintaining capacity readiness.

Previous wording

We are focused on realizing the full value of our broad product portfolio, becoming a customer-first company, and capitalizing on the mega trends of e-mobility, sustainability, and connectivity to drive top line growth, expand margins, and optimize stockholder returns. We are using eight strategic levers to achieve these goals. Our elevated capital expenditure levels over the past three years has positioned us with increased capacity to assure our customers of reliable supply as they scale production and to supply more part numbers to them. We are committed to completing our capacity expansion projects, but have modulated and will continue to modulate spending in response to order flow, timing of customer demand and qualification, changes in lead times for equipment, and increases in subcontractor capacity. For 2026, we plan to spend between $400 million to $440 million for capital expenditures, approximately half of which will be invested in our 12-inch wafer fab we are building in Itzehoe, Germany.

Current wording

We are focused on realizing the full value of our broad product portfolio, becoming a customer-first company, and capitalizing on the mega trends of e-mobility, sustainability, and connectivity to drive top line growth, expand margins, and optimize stockholder returns. We are using eight strategic levers to achieve these goals. Our elevated capital expenditure levels over the past three years have positioned us with increased capacity in an effort to ensure our customers of reliable supply as they scale production and to supply more part numbers to them. We are committed to completing our capacity expansion projects, but have modulated and will continue to modulate spending in response to order flow, timing of customer demand and qualification, changes in lead times for equipment, and increases in subcontractor capacity. For 2026, we plan to spend between $400 million to $440 million for capital expenditures, approximately half of which will be invested in our 12-inch wafer fab we are building in Itzehoe, Germany.

Previous wording

We utilize several financial metrics, including net revenues, gross profit margin, operating margin, segment operating income, segment operating margin, end-of-period backlog, book-to-bill ratio, inventory turnover, change in average selling prices, net cash and short-term investments (debt), and free cash generation to evaluate the performance and assess the future direction of our business. See further discussion in “Financial Metrics” and “Financial Condition, Liquidity, and Capital Resources” below. Nearly all key financial metrics increased versus the prior fiscal quarter and the prior year quarter. Net revenues increased versus the prior fiscal quarter and the prior year quarter primarily due to higher sales volume. Margins were positively impacted by higher sales volume and associated manufacturing efficiencies, which offset higher metals and materials costs. Backlog and book-to-bill increased due to higher order volume.

Current wording

We utilize several financial metrics, including net revenues, gross profit margin, operating margin, segment operating income, segment operating margin, end-of-period backlog, book-to-bill ratio, inventory turnover, change in average selling prices, net cash and short-term investments (debt), and free cash generation to evaluate the performance and assess the future direction of our business. See further discussion in “Financial Metrics” and “Financial Condition, Liquidity, and Capital Resources” below. Nearly all key financial metrics increased versus the prior fiscal quarter and prior year periods. Net revenues increased versus the prior fiscal quarter and the prior year periods primarily due to higher sales volume. Margins were positively impacted by higher sales volume and associated manufacturing efficiencies, which offset higher metals and materials costs. The order level remained at a high level and backlog continued to increase.

Previous wording

Net revenues for the fiscal quarter ended April 4, 2026 were $839.2 million, compared to $800.9 million and $715.2 million for the fiscal quarters ended December 31, 2025 and March 29, 2025, respectively. Net earnings for the fiscal quarter ended April 4, 2026 were $7.2 million, or $0.05 per diluted share, compared to net earnings of $1.0 million, or $0.01 per diluted share for the fiscal quarter ended December 31, 2025, and a net loss of $(4.1) million, or $(0.03) per share for the fiscal quarter ended March 29, 2025.

Current wording

Net revenues for the fiscal quarter ended July 4, 2026 were $888.6 million, compared to $839.2 million and $762.3 million for the fiscal quarters ended April 4, 2026 and June 28, 2025, respectively. Net earnings for the fiscal quarter ended July 4, 2026 were $28.1 million, or $0.19 per diluted share, compared to net earnings of $7.2 million, or $0.05 per diluted share for the fiscal quarter ended April 4, 2026, and net earnings of $2.0 million, or $0.01 per diluted share for the fiscal quarter ended June 28, 2025.

Previous wording

Measures such as free cash and segment operating income are considered non-GAAP measures. We define free cash as the cash flows generated from continuing operations less capital expenditures plus net proceeds from the sale of property and equipment. We define segment operating income as operating income excluding selling, general, and administrative costs of our global operations, sales and marketing, information systems, finance, and administrative groups, as well as restructuring and severance costs, goodwill impairments, and other items affecting comparability. The reconciliation of free cash is below. Note 10 to our consolidated condensed financial statements includes the reconciliation for segment operating income. These non-GAAP measures should not be viewed as alternatives to GAAP measures of performance or liquidity. Non-GAAP measures such as free cash and segment operating income do not have uniform definitions. These measures, as calculated by Vishay, may not be comparable to similarly titled measures used by other companies. Management believes that free cash is a meaningful measure of our ability to fund acquisitions, repay debt, and otherwise enhance stockholder value through stock repurchases or dividends. We utilize the free cash metric in defining our Stockholder Return Policy. Management uses segment operating income, along with segment gross profit, to make decisions, allocate resources, and assess performance of its operating segments.

Current wording

Measures such as adjusted net earnings (loss), free cash, and segment operating income are considered non-GAAP measures. We define adjusted net earnings (loss) as net earnings (loss) determined in accordance with GAAP adjusted for various items that management believes are not indicative of the intrinsic operating performance of our business. We define free cash as the cash flows generated from continuing operations less capital expenditures plus net proceeds from the sale of property and equipment. We define segment operating income as operating income excluding selling, general, and administrative costs of our global operations, sales and marketing, information systems, finance, and administrative groups, as well as restructuring and severance costs, goodwill impairments, and other items affecting comparability. The reconciliations of adjusted net earnings (loss), adjusted net earnings (loss) per share, and free cash are below. Note 10 to our consolidated condensed financial statements includes the reconciliation for segment operating income. These non-GAAP measures should not be viewed as alternatives to GAAP measures of performance or liquidity. Non-GAAP measures such as adjusted net earnings (loss), adjusted net earnings (loss) per share, free cash, and segment operating income do not have uniform definitions. These measures, as calculated by Vishay, may not be comparable to similarly titled measures used by other companies. Management believes that adjusted net earnings (loss) and adjusted net earnings (loss) per share are meaningful because they provide insight with respect to our intrinsic operating results. Management believes that free cash is a meaningful measure of our ability to fund acquisitions, repay debt, and otherwise enhance stockholder value through stock repurchases or dividends. We utilize the free cash metric in defining our Stockholder Return Policy. Management uses segment operating income, along with segment gross profit, to make decisions, allocate resources, and assess performance of its operating segments.

Previous wording

On February 20, 2026, the United States Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”). The ultimate availability, timing, and amount of any potential refunds of such tariffs remain highly uncertain and are subject to further legal, regulatory, and administrative developments. Following the Supreme Court’s decision, the U.S. presidential administration announced its intention to invoke other laws to collect tariffs and announced new tariffs on imports from all countries, inaddition to any existing non-IEEPA tariffs. There remains substantial uncertainty regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, or suspended, and the impacts of such actions on our business. We continue to monitor and evaluate these developments and assess their potential impact on our business, financial condition, and results of operations.

Current wording

On February 20, 2026, the United States Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”). Following the Supreme Court’s decision, the U.S. administration announced its intention to invoke other laws to collect tariffs and announced new tariffs on imports from all countries, in addition to any existing non-IEEPA tariffs. There remains substantial uncertainty regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, or suspended, and the impacts of such actions on our business. We continue to monitor and evaluate these developments and assess their potential impact on our business, financial condition, and results of operations.

Previous wording

In 2022, our Board of Directors adopted a Stockholder Return Policy, which calls for us to return at least 70% of free cash flow, net of scheduled principal payments of long-term debt, on an annual basis. We intend to return such amounts to stockholders directly, in the form of dividends, or indirectly, in the form of stock repurchases. The policy sets forth our intention, but does not obligate us to acquire any shares of common stock or declare any dividends, and the policy may be terminated or suspended at any time at our discretion, in accordance with applicable laws and regulations. For 2026, we expect to maintain our dividend and opportunistically repurchase shares based on U.S. available liquidity in line with this policy.

Current wording

In 2022, our Board of Directors adopted a Stockholder Return Policy, which calls for us to return at least 70% of free cash flow, net of scheduled principal payments of long-term debt, on an annual basis. We intend to return such amounts to stockholders directly, in the form of dividends, or indirectly, in the form of stock repurchases. The policy sets forth our intention, but does not obligate us to acquire any shares of common stock or declare any dividends, and the policy may be terminated or suspended at any time at our discretion, in accordance with applicable laws and regulations. For 2026, we expect to maintain our dividend and opportunistically repurchase shares in line with this policy. We did not repurchase any shares of common stock in the second fiscal quarter of 2026. We expect to be in compliance with our Stockholder Return Policy without repurchasing any common stock in 2026.

Previous wording

Our chief operating decision maker makes decisions, allocates resources, and evaluates business segment performance based on segment gross profit and segment operating income. Only dedicated, direct selling, general, and administrative ("SG&A") expenses of the segments are included in the calculation of segment operating income. We do not allocate certain SG&A expenses that are managed at the regional or corporate global level to our segments. Accordingly, segment operating income does not include these SG&A expenses that are not directly traceable to the segments. Segment operating income also would not include costs not routinely used in the management of the segments in periods when those items are present, such as restructuring and severance costs, goodwill impairment charges, and other items affecting comparability. Segment operating income is clearly a function of net revenues, but also reflects our cost management programs and our ability to contain fixed costs. Segment operating margin is segment operating income expressed as a percentage of net revenues.

Current wording

Our chief operating decision maker makes decisions, allocates resources, and evaluates business segment performance based on segment gross profit and segment operating income. Only dedicated, direct selling, general, and administrative ("SG&A") expenses of the segments are included in the calculation of segment operating income. We do not allocate certain SG&A expenses that are managed at the regional or corporate global level to our segments. Accordingly, segment operating income does not include these SG&A expenses that are not directly traceable to the segments. Segment operating income also would not include income or costs not routinely used in the management of the segments in periods when those items are present, such as tariff refunds received from the U.S. government, tariff refunds passed through to customers, restructuring and severance costs, goodwill impairment charges, and other items affecting comparability. Segment operating income is clearly a function of net revenues, but also reflects our cost management programs and our ability to contain fixed costs. Segment operating margin is segment operating income expressed as a percentage of net revenues.

Previous wording

The quarter-to-quarter trends in these financial metrics can also be an important indicator of the likely direction of our business. The following table shows net revenues, gross profit margin, operating margin, end-of-period backlog, book-to-bill ratio, inventory turnover, and changes in ASP for our business as a whole during the five fiscal quarters beginning with the first fiscal quarter of 2025 through the first fiscal quarter of 2026(dollars in thousands):

Current wording

The quarter-to-quarter trends in these financial metrics can also be an important indicator of the likely direction of our business. The following table shows net revenues, gross profit margin, operating margin, end-of-period backlog, book-to-bill ratio, inventory turnover, and changes in ASP for our business as a whole during the five fiscal quarters beginning with the second fiscal quarter of 2025 through the second fiscal quarter of 2026(dollars in thousands):

Previous wording

(1) Operating margin for the second fiscal quarter of 2025 includes an $11.3 million gain recognized upon the favorable resolution of a contingency.

Current wording

(2) Gross profit margin and operating margin for the second fiscal quarter of 2026 also include $30.0 million tariff refunds received from the U.S. government, with no impact on gross profit. Operating margin for the second fiscal quarter of 2025 includes an $11.3 million gain recognized upon the favorable resolution of a contingency.

Previous wording

Revenues increased versus the prior fiscal quarter and prior year quarter. The increases versus the prior fiscal quarter and prior year quarter are primarily due to higher sales volume. The book-to-bill ratio and backlog increased versus the prior fiscal quarter and prior year quarter due to higher order levels. We continue to increase capacity for critical product lines. Average selling prices, including tariff adders, decreased versus the prior fiscal quarter and prior year quarter.

Current wording

Revenues increased versus the prior fiscal quarter and prior year quarter. The increases versus the prior fiscal quarter and prior year quarter are primarily due to higher sales volume and improved pricing conditions. Order levels remain high and backlog increased versus the prior fiscal quarter and prior year quarter. We continue to increase capacity for critical product lines. Average selling prices increased versus the prior fiscal quarter.

Previous wording

The following table shows net revenues, book-to-bill ratio, gross profit margin, and segment operating margin broken out by segment for the five fiscal quarters beginning with the first fiscal quarter of 2025 through the first fiscal quarter of 2026(dollars in thousands):

Current wording

The following table shows net revenues, book-to-bill ratio, gross profit margin, and segment operating margin broken out by segment for the five fiscal quarters beginning with the second fiscal quarter of 2025 through the second fiscal quarter of 2026(dollars in thousands):

Previous wording

We continued to see improving market conditions in the first fiscal quarter of 2026, resulting in revenue growth driven primarily by higher sales volume. This represents an improvement from most of 2025 when we experienced distribution customers digesting high channel inventories. The long-term prospects of our business remain favorable. We continue to increase manufacturing capacities for critical product lines.

Current wording

We continued to see improving market conditions in the second fiscal quarter of 2026, resulting in revenue growth driven primarily by higher sales volume and improved pricing conditions. This represents an improvement from most of 2025 when we experienced distribution customers digesting high channel inventories. The long-term prospects of our business remain favorable. We continue to increase manufacturing capacities for critical product lines.

Previous wording

Gross profit margins for the fiscal quarter ended April 4, 2026 were 21.0%, versus 19.6% and 19.0% for the comparable prior fiscal quarter and prior year period, respectively. Gross profit margin increased versus the prior fiscal quarter and prior year quarter primarily due to higher sales volume and associated manufacturing efficiencies, which offset higher metals and materials costs.

Current wording

Gross profit margins for the fiscal quarter ended July 4, 2026 were 23.3%, versus 21.0% and 19.5% for the comparable prior fiscal quarter and prior year quarter, respectively. Gross profit margins for the six fiscal months ended July 4, 2026 were 22.2%, versus 19.2% for the comparable prior year period. Gross profit margin increased versus the prior fiscal quarter and prior year quarter primarily due to higher sales volume, associated manufacturing efficiencies, and higher average selling prices, which offset higher metals and materials costs and unfavorable foreign exchange impacts.

Previous wording

Net revenues of the Diodes segment increased versus the prior fiscal quarter and prior year quarter. The increase versus the prior fiscal quarter is primarily due to increased sales to OEM customers, automotive end market customers, and customers in the Europe region. The increase versus the prior year quarter is primarily to due to increased sales to customers in nearly all sales channels, end markets, and regions, most significantly OEM customers, customers in the industrial and automotive end markets, and customers in the Europe region.

Current wording

Net revenues of the MOSFETs segment increased versus the prior fiscal quarter and prior year periods. The increase versus the prior fiscal quarter is primarily due to increased sales to distribution customers, industrial end market end market customers, and customers in all regions. The increases versus the prior year periods are primarily due to increased sales to OEM and distribution customers, industrial and automotive end market customers, and customers in all regions.

Previous wording

Segment operating margin increased versus the prior fiscal quarter and prior year quarter. The increases are primarily due to changes in gross profit and decreased segment SG&A expenses associated with the Newport wafer fab.

Current wording

Segment operating margin increased versus the prior fiscal quarter and prior year periods. The increases are primarily due to changes in gross profit and decreased segment SG&A expenses associated with the Newport wafer fab.

Previous wording

Net revenues of the Optoelectronic Components segment increased versus the prior fiscal quarter and prior year quarter. The increase versus the prior fiscal quarter is primarily due to increased sales to distribution customers, industrial end market customers, and customers in the Europe region. The increase versus the prior year quarter is primarily to due to increased sales to customers in nearly all sales channels, end markets, and regions, most significantly distribution customers, customers in the industrial end market, and customers in the Europe region.

Current wording

Net revenues of the Optoelectronic Components segment increased versus the prior fiscal quarter and prior year periods. The increases versus the prior fiscal quarter and prior year periods are primarily due to increased sales to customers in nearly all sales channels, end markets, and regions, most significantly distribution customers and industrial end market customers.

Previous wording

Net revenues of the Resistors segment increased versus the prior fiscal quarter and prior year quarter. The increase versus the prior fiscal quarter is primarily to due to increased sales to distribution customers, customers in the industrial, automotive, and military and aerospace end markets, and customers in the Europe region. The increase versus the prior year quarter is primarily due to increased sales to customers in nearly all sales channels, end markets, and regions, most significantly distribution customers and industrial end market customers.

Current wording

Net revenues of the Resistors segment increased versus the prior fiscal quarter and prior year periods. The increases versus the prior fiscal quarter and prior year periods are primarily due to increased sales to distribution customers, industrial end market customers, and customers in all regions.

Previous wording

Gross profit margin increased versus the prior fiscal quarter, but decreased versus the prior year quarter. The increase versus the prior fiscal quarter is primarily due to higher sales volume, partially offset by higher metals costs. The decrease versus the prior year quarter is primarily due to higher labor, materials, and metals costs and unfavorable product mix, partially offset by higher sales volume.

Current wording

Gross profit margin increased slightly versus the prior fiscal quarter, but decreased versus the prior year periods. The increase versus the prior fiscal quarter is primarily due to higher sales volume and higher average selling prices, partially offset by higher metals costs. The decreases versus the prior year periods are primarily due to higher metals costs, unfavorable product mix, and unfavorable foreign exchange impacts, partially offset by higher sales volume and higher average selling prices.

Previous wording

Net revenues of the Inductors segment were flat versus the prior fiscal quarter, but increased versus the prior year quarter. The increase versus the prior year quarter is primarily due to increased sales to distribution customers, customers in the healthcare and military and aerospace end markets, and customers in the Asia and Americas regions.

Current wording

Net revenues of the Inductors segment increased versus the prior fiscal quarter and prior year periods. The increase versus the prior fiscal quarter is primarily due to increased sales to customers in nearly all sales channels, end markets, and regions, most significantly distribution customers and customers in the Americas region. The increases versus the prior year periods are primarily due to increased sales to distribution customers, military and aerospace and healthcare end market customers, and customers in the Americas and Asia regions.

Previous wording

Gross profit margin decreased versus the prior fiscal quarter, but increased versus the prior year quarter. The decrease versus the prior fiscal quarter is primarily due to lower average selling prices. The increase versus the prior year quarter is primarily due to higher sales volume, partially offset by lower average selling prices and higher metals costs.

Current wording

Gross profit margin decreased versus the prior fiscal quarter, but increased versus the prior year periods. The decrease versus the prior fiscal quarter is primarily due to higher material and labor costs, partially offset by higher sales volume and higher average selling prices. The increases versus the prior year periods are primarily due to higher sales volume, materials price savings, lower logistics costs, and higher yield, partially offset by lower average selling prices.

Previous wording

Net revenues of the Capacitors segment increased versus the prior fiscal quarter and prior year quarter. The increase versus the prior fiscal quarter is primarily due to increased sales to distribution and OEM customers, customers in the military and aerospace end market, and customers in the Europe and Americas regions, partially offset by decreased sales to customers in the Asia region due to Lunar New Year. The increase versus the prior year quarter is primarily due to increased sales to customers in nearly all sales channels, end markets, and regions, most significantly distribution customers, industrial end market customers, and customers in the Asia and Americas regions.

Current wording

Net revenues of the Capacitors segment increased versus the prior fiscal quarter and prior year periods. The increase versus the prior fiscal quarter is primarily due to increased sales to distribution customers, industrial end market customers, and customers in the Asia region. The increases versus the prior year periods are primarily due to increased sales to customers in nearly all sales channels, end markets, and regions, most significantly distribution end market customers, industrial and military and aerospace end market customers, and customers in the Asia and Americas regions.

Previous wording

We are incurring additional SG&A costs associated with our strategic initiatives. The sequential increase in SG&A expenses is primarily due to uneven attribution of stock-based compensation expense and higher bonus compensation accruals. SG&A expenses increased versus the prior year quarter due to higher stock-based compensation expense and general cost inflation.

Current wording

We are incurring additional SG&A costs associated with our strategic initiatives. The sequential decrease in SG&A expenses is primarily due to uneven attribution of stock-based compensation expense. SG&A expenses increased versus the prior year periods due to higher stock-based compensation expense, general cost inflation, and a one-time gain recognized in the prior year periods.

Previous wording

Interest expense for the fiscal quarter ended April 4, 2026 increased by $0.2 million versus the fiscal quarter ended December 31, 2025 and $1.2 million versus the fiscal quarter ended March 29, 2025. The increases are due to higher outstanding balances on our revolving credit facility.

Current wording

Interest expense for the fiscal quarter ended July 4, 2026 increased $0.3 million versus the fiscal quarter ended April 4, 2026 and decreased $(0.3) million versus the fiscal quarter ended June 28, 2025. Interest expense for the six fiscal months ended July 4, 2026 increased $0.9 million versus the six fiscal months ended June 28, 2025. The increase versus the prior year-to-date period is due to higher average outstanding balances on our revolving credit facility.

Previous wording

For the fiscal quarter ended April 4, 2026, our effective tax rate was 44.3%, as compared to 82.3% and 3.2% for the fiscal quarters ended December 31, 2025 and March 29, 2025, respectively. We expect that our effective tax rate will be higher than the U.S. statutory rate, excluding unusual transactions, even at higher levels of pre-tax income.

Current wording

For the fiscal quarter ended July 4, 2026, our effective tax rate was 33.7%, as compared to 44.3% and 83.7% for the fiscal quarters ended April 4, 2026 and June 28, 2025, respectively. For the six fiscal months ended July 4, 2026, our effective tax rate was 36.1%, as compared to 125.9% for the six fiscal months ended June 28, 2025. We expect that our effective tax rate will be higher than the U.S. statutory rate, excluding unusual transactions, even at higher levels of pre-tax income.

Previous wording

Cash flows provided by operating activities were $63.7 million for the three fiscal months ended April 4, 2026, as compared to cash flows provided by operations of $16.1 million for the three fiscal months ended March 29, 2025.

Current wording

Cash flows provided by operating activities were $169.0 million for the six fiscal months ended July 4, 2026, as compared to cash flows provided by operations of $7.3 million for the six fiscal months ended June 28, 2025.

Previous wording

In order to manage our working capital and operating cash needs, we monitor our cash conversion cycle. The following table presents the components of our cash conversion cycle during the five fiscal quarters beginning with the first fiscal quarter of 2025 through the first fiscal quarter of 2026:

Current wording

In order to manage our working capital and operating cash needs, we monitor our cash conversion cycle. The following table presents the components of our cash conversion cycle during the five fiscal quarters beginning with the second fiscal quarter of 2025 through the second fiscal quarter of 2026:

Previous wording

The cash conversion cycle improved to 116 days in the first fiscal quarter of 2026, reflecting our sale of an additional $63.1 million trade receivables and disciplined working capital management.

Current wording

The cash conversion cycle improved to 110 days in the second fiscal quarter of 2026, reflecting increased revenues and cost of products sold, our sale of an additional net $15.5 million trade receivables, and disciplined working capital management.

Previous wording

Cash paid for property and equipment for the three fiscal months ended April 4, 2026 was $110.7 million, as compared to $61.6 million for the three fiscal months ended March 29, 2025. To be well positioned to service our customers and to fully participate in growing markets, we have increased and expect to maintain a relatively high level of capital expenditures for expansion in the mid-term. Our elevated capital expenditure levels over the past three years have positioned us with increased capacity to assure our customers of reliable supply as they scale production and to supply more part numbers to them. We are committed to completing our capacity expansion projects, but have modulated and will continue to modulate spending in response to order flow, timing of customer demand and qualification, changes in lead times for equipment, and increases in subcontractor capacity. For 2026, we plan to spend between $400 million to $440 million for capital expenditures, approximately half of which will be invested in our 12-inch wafer fab we are building in Itzehoe, Germany.

Current wording

Cash paid for property and equipment for the six fiscal months ended July 4, 2026 was $205.9 million, as compared to $126.2 million for the six fiscal months ended June 28, 2025. To be well positioned to service our customers and to fully participate in growing markets, we have increased and expect to maintain a relatively high level of capital expenditures for expansion in the mid-term. Our elevated capital expenditure levels over the past three years have positioned us with increased capacity to assure our customers of reliable supply as they scale production and to supply more part numbers to them. We are committed to completing our capacity expansion projects, but have modulated and will continue to modulate spending in response to order flow, timing of customer demand and qualification, changes in lead times for equipment, and increases in subcontractor capacity. For 2026, we plan to spend between $400 million to $440 million for capital expenditures, approximately half of which will be invested in our 12-inch wafer fab we are building in Itzehoe, Germany.

Previous wording

Free cash flow for the three fiscal months ended April 4, 2026 decreased slightly versus the three fiscal months ended March 29, 2025. Free cash flow for the three fiscal months ended April 4, 2026 was negatively impacted by a high level of capital expenditures. We expect that free cash flow will be negatively impacted by the expected high level of capital expenditures for expansion after which we expect to generate increasingly higher levels of free cash. There is no assurance, however, that we will be able to continue to generate cash flows from operations and free cash at our historical levels, or at all, going forward if the economic environment worsens.

Current wording

Free cash flow for the six fiscal months ended July 4, 2026 increased versus the six fiscal months ended June 28, 2025. Free cash flow for the six fiscal months ended July 4, 2026 was positively impacted by increased net earnings, as well as tariff refunds received from the U.S. government and additional net cash inflows related to our account receivable securitization programs. We expect that free cash flow will be negatively impacted by the expected high level of capital expenditures for expansion after which we expect to generate increasingly higher levels of free cash. There is no assurance, however, that we will be able to continue to generate cash flows from operations and free cash at our historical levels, or at all, going forward if the economic environment worsens.

Previous wording

We invest a portion of our excess cash in highly liquid, high-quality instruments with maturities greater than 90 days, but less than 1 year, which we classify as short-term investments on our consolidated condensed balance sheets. As these investments were funded using a portion of excess cash and represent a significant aspect of our cash management strategy, we include the investments in the calculation of net cash and short-term investments (debt).

Current wording

We invest a portion of our excess cash in highly liquid, high-quality instruments with maturities greater than 90 days, but less than 1 year, which we classify as short-term investments on our consolidated condensed balance sheets. As these investments were funded using a portion of excess cash and represent a significant aspect of our cash management strategy, we include the investments in the calculation of net cash and short-term investments (debt). Following the completion of our public offering on July 1, 2026, we have increased excess cash available to invest in such instruments.

Previous wording

As of April 4, 2026, $13.6 million of our cash and cash equivalents and short-term investments were held by our U.S. subsidiaries. As of April 4, 2026, we are in a net borrowing position in the U.S. and we expect to continue to be at least throughout 2026 based on expected cash payments pursuant to our Stockholder Return Policy and funding of our growth plan. As of April 4, 2026, we have approximately $561 million of earnings that are deemed not indefinitely reinvested, primarily in Germany and Israel. Based on the expected timing of future repatriations, we estimate that the tax liability to repatriate these unremitted earnings will be approximately $81 million, which has been accrued, but will only be paid upon repatriation of the unremitted earnings. Repatriating these unremitted earnings earlier than currently planned may not be possible and would incur additional tax expense. We also have amounts of unremitted foreign earnings, which continue to be reinvested indefinitely, that we have not accrued for the incremental foreign income taxes and withholding taxes payable to foreign jurisdictions that would be incurred to repatriate these amounts. Certain of these subsidiaries are located in countries with restrictive regulations and high tax rates for repatriating cash. Due to the uncertainties associated with the ability, timing, and method to repatriate these unremitted earnings and other complexities associated with its hypothetical calculation, determination of the amount of tax expense that would be incurred to repatriate the unremitted earnings is not practicable, but could be significant. Our undrawn credit facility provides us with adequate operating liquidity in the United States.

Current wording

As of July 4, 2026, $804.9 million of our cash and cash equivalents and short-term investments were held by our U.S. subsidiaries. The cash generated from the public offering of our common stock completed on July 1, 2026, was held in the U.S. as of July 4, 2026, and will be deployed to execute our global strategic priorities. As of July 4, 2026, we have approximately $560.4 million of earnings that are deemed not indefinitely reinvested, primarily in Germany and Israel. Based on the expected timing of future repatriations, we estimate that the tax liability to repatriate these unremitted earnings will be approximately $80.8 million, which has been accrued, but will only be paid upon repatriation of the unremitted earnings. Repatriating these unremitted earnings earlier than currently planned may not be possible and would incur additional tax expense. We also have amounts of unremitted foreign earnings, which continue to be reinvested indefinitely, that we have not accrued for the incremental foreign income taxes and withholding taxes payable to foreign jurisdictions that would be incurred to repatriate these amounts. Certain of these subsidiaries are located in countries with restrictive regulations and high tax rates for repatriating cash. Due to the uncertainties associated with the ability, timing, and method to repatriate these unremitted earnings and other complexities associated with its hypothetical calculation, determination of the amount of tax expense that would be incurred to repatriate the unremitted earnings is not practicable, but could be significant. Our undrawn credit facility provides us with adequate operating liquidity in the United States.

Previous wording

Upon successful completion of our growth plan, we expect to generate increasingly higher levels of free cash that will be sufficient to meet our long-term financing needs related to normal operating requirements, regular dividend payments, and share repurchases pursuant to our Stockholder Return Policy, while allowing us to manage our repatriation and financing activities to minimize tax and interest expense. During the current period of intensified capital expenditures to achieve our growth plans, we are considering a combination of additional and alternative sources of financing, such as the agreements to sell up to approximately $150 million of accounts receivable on a revolving basis that we initiated in 2025, and our cash on hand to fund a portion of the capital expenditures that would conserve cash for future acquisitions while enabling us to minimize tax expense.

Current wording

Upon successful completion of our growth plan, we expect to generate increasingly higher levels of free cash that will be sufficient to meet our long-term financing needs related to normal operating requirements, regular dividend payments, and share repurchases pursuant to our Stockholder Return Policy, while allowing us to manage our repatriation and financing activities to minimize tax and interest expense.

Previous wording

We were in compliance with all financial covenants under the credit facility at April 4, 2026. Our interest coverage ratio and net leverage ratio were 9.70 to 1 and 2.34 to 1, respectively. We expect to continue to be in compliance with these covenants based on current projections. The usable capacity on the credit facility is approximately $307 million as of April 4, 2026.

Current wording

We were in compliance with all financial covenants under the credit facility at July 4, 2026. Our interest coverage ratio and net leverage ratio were 10.70 to 1 and 2.10 to 1, respectively. We expect to continue to be in compliance with these covenants based on current projections. The usable capacity on the credit facility is approximately $423 million as of July 4, 2026.

Previous wording

If we are not in compliance with all of the required financial covenants, the credit facility could be terminated by the lenders, and any amounts then outstanding pursuant to the credit facility could become immediately payable. Additionally, our convertible senior notes due 2030 have cross-default provisions that could accelerate repayment in the event the indebtedness under the credit facility is accelerated.

Current wording

If we are not in compliance with all of the required financial covenants, the credit facility could be terminated by the lenders, and any amounts then outstanding pursuant to the credit facility could become immediately payable. Additionally, our convertible senior notes due 2030(the "2030 Notes")have cross-default provisions that could accelerate repayment in the event the indebtedness under the credit facility is accelerated.

Previous wording

Borrowings under the credit facility bear interest at variable reference rates plus an interest margin. The applicable interest margin is based on our total leverage ratio. We also pay a commitment fee, also based on our total leverage ratio, on undrawn amounts. U.S. dollar borrowings under the credit facility are based on SOFR (including a customary spread adjustment). Borrowings in foreign currencies bear interest at currency-specific reference rates plus an interest margin. Based on our current total leverage ratio of 3.07 to 1, any new U.S. dollar borrowings will bear interest at SOFR plus 2.10% (including the applicable credit spread), and the undrawn commitment fee is 0.35% per annum.

Current wording

Borrowings under the credit facility bear interest at variable reference rates plus an interest margin. The applicable interest margin is based on our total leverage ratio. We also pay a commitment fee, also based on our total leverage ratio, on undrawn amounts. U.S. dollar borrowings under the credit facility are based on SOFR (including a customary spread adjustment). Borrowings in foreign currencies bear interest at currency-specific reference rates plus an interest margin. Based on our current total leverage ratio of 2.77 to 1, any new U.S. dollar borrowings will bear interest at SOFR plus 2.10% (including the applicable credit spread), and the undrawn commitment fee is 0.35% per annum.

Previous wording

We had $219 million outstanding on our revolving credit facility at December 31, 2025 and $250 million outstanding at April 4, 2026. We borrowed $203 million and repaid $172 million on the revolving credit facility during the three fiscal months ended April 4, 2026. The average outstanding balance on our revolving credit facility calculated at fiscal month-ends was $259 million and the highest amount outstanding at a fiscal month end was $271 million during the three fiscal months ended April 4, 2026. We expect, at least initially, to fund certain future obligations required to be paid by the U.S. parent company by borrowing under our credit facility. We also expect to continue to use the credit facility from time-to-time to meet certain short-term financing needs. Additional acquisition activity, convertible debt repurchases, or conversion of our convertible debt instruments may require additional borrowing under our credit facility or may otherwise require us to incur additional debt. No principal payments on our debt are due until 2028.

Current wording

We had $219 million outstanding on our revolving credit facility at December 31, 2025 and $238 million outstanding at July 4, 2026. We borrowed $384 million and repaid $365 million on the revolving credit facility during the six fiscal months ended July 4, 2026. The average outstanding balance on our revolving credit facility calculated at fiscal month-ends was $273 million and the highest amount outstanding at a fiscal month end was $319 million during the six fiscal months ended July 4, 2026. In the third fiscal quarter of 2026, we used a portion of the net proceeds from the public offering of our common stock completed on July 1, 2026, to fully repay the outstanding balance on our revolving credit facility. We expect, at least initially, to fund certain future obligations required to be paid by the U.S. parent company by borrowing under our credit facility. We also expect to continue to use the credit facility from time-to-time to meet certain short-term financing needs. Additional acquisition activity, convertible debt repurchases, or conversion of our convertible debt instruments, may require additional borrowing under our credit facility or may otherwise require us to incur additional debt. No principal payments on our debt are due until 2028.