MERCURY SYSTEMS INC

Previous wording

From time to time, information provided, statements made by our employees or information included in our filings with the Securities and Exchange Commission (“SEC”) may contain statements that are not historical facts but that are “forward-looking statements,” which involve risks and uncertainties. You can identify these statements by the words “may,” “will,” “could,” “should,” “would,” “plans,” “expects,” “anticipates,” “continue,” “estimate,” “project,” “intend,” “likely,” “forecast,” “probable,” “potential,” and similar expressions. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. Such risks and uncertainties include, but are not limited to, continued funding of defense programs, the timing and amounts of such funding, general economic and business conditions, including unforeseen weakness in our markets, effects of any U.S. federal government shutdown or extended continuing resolution, effects of increasingly volatile geopolitical events and regional conflicts, competition, changes in technology and methods of marketing, delays in or cost increases related to completing development, engineering and manufacturing programs, changes in customer order patterns, changes in product mix, continued success in technological advances and delivering technological innovations, changes in, or in the U.S. government’s interpretation of, federal export control or procurement rules and regulations, including tariffs, changes in, or in the interpretation or enforcement of, environmental rules and regulations, market acceptance of our products, shortages in or delays in receiving components, supply chain delays or volatility for critical components, production delays or unanticipated expenses including due to quality issues or manufacturing execution issues, failure to meet contractual performance specifications, adherence to required manufacturing standards, capacity underutilization, increases in scrap or inventory write-offs, failure to achieve or maintain manufacturing quality certifications, such as AS9100, failure to achieve or maintain qualified business systems, such as those required by the DFARS, adverse findings in government audits or investigations, the impact of supply chain disruption, inflation and labor shortages, among other things, on program execution and the resulting effect on customer satisfaction, inability to fully realize the expected benefits from acquisitions, restructurings, and operational efficiency initiatives or delays in realizing such benefits, challenges in integrating acquired businesses and achieving anticipated synergies, effects of shareholder activism, increases in interest rates, changes to industrial security and cyber-security regulations and requirements and impacts from any cyber or insider threat events, including the risks from heightened, persistent, and increasingly sophisticated nation-state level cyberatt…

Excerpt shortened here; the source contains the full paragraph.

Current wording

From time to time, information provided, statements made by our employees or information included in our filings with the Securities and Exchange Commission (“SEC”) may contain statements that are not historical facts but that are “forward-looking statements,” which involve risks and uncertainties. You can identify these statements by the words “may,” “will,” “could,” “should,” “would,” “plans,” “expects,” “anticipates,” “continue,” “estimate,” “project,” “intend,” “likely,” “forecast,” “probable,” “potential,” and similar expressions. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. Such risks and uncertainties include, but are not limited to, cost increases, our inability to increase production and deliver products on time and with appropriate quality, continued funding of defense programs, the timing and amounts of such funding, general economic and business conditions, including unforeseen weakness in our markets, effects of any U.S. federal government shutdown or extended continuing resolution, effects of increasingly volatile geopolitical events and regional conflicts, competition, changes in technology and methods of marketing, delays in or cost increases related to completing development, engineering and manufacturing programs, changes in customer order patterns, changes in product mix, continued success in technological advances and delivering technological innovations, changes in, or in the U.S. government’s interpretation of, federal export control or procurement rules and regulations, including tariffs, changes in, or in the interpretation or enforcement of, environmental rules and regulations, market acceptance of our products, shortages or delays in receiving components, supply chain delays or volatility for critical components, production delays or unanticipated expenses including due to quality issues or manufacturing execution issues, failure to meet contractual performance specifications, adherence to required manufacturing standards, capacity underutilization, increases in scrap or inventory write-offs, failure to achieve or maintain manufacturing quality certifications, such as AS9100, failure to achieve or maintain qualified business systems, such as those required by the DFARS, adverse findings in government audits or investigations, the impact of supply chain disruption, inflation and labor shortages, among other things, on program execution and the resulting effect on customer satisfaction, inability to fully realize the expected benefits from acquisitions, restructurings, and operational efficiency initiatives or delays in realizing such benefits, challenges in integrating acquired businesses and achieving anticipated synergies, effects of shareholder activism, increases in interest rates, changes to industrial security and cyber-security regulations and requirements and impacts from any cyber or insider threat events…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

As a leading manufacturer of essential components, products, modules and subsystems, we sell to the top U.S. and European defense prime contractors, the U.S. government and original equipment manufacturers (“OEM”) commercial aerospace companies. Our mission-critical products and solutions are deployed by our customers for a variety of applications including sensor and radar processing, electronic warfare, avionics, weapons, and command, control, communications, and intelligence (“C4I”). Mercury has built a trusted, robust portfolio of proven capabilities, leveraging the most advanced commercial silicon technologies and purpose-built to exceed the performance needs of our defense and commercial customers. Customers add their own applications and algorithms to our specialized, secure and innovative products and pre-integrated solutions. This allows them to complete their full system by integrating with their platform, the sensor technology and, increasingly, the processing from Mercury.

Current wording

As a leading manufacturer of essential components, modules and subsystems, we sell to the top U.S. and European defense prime contractors, the U.S. government and original equipment manufacturers (“OEM”) commercial aerospace companies. Our customers deploy our solutions for a variety of applications including sensor and radar processing, electronic warfare, avionics, weapons, and command, control, communications, computers, and intelligence (“C4I”). We deliver a trusted, robust portfolio of proven capabilities, built on the most advanced commercial silicon technologies to exceed the performance needs of our defense and commercial customers.

Previous wording

Our capabilities, technology, people and R&D investment strategy combine to differentiate Mercury in our industry. We maintain our technological edge by investing in critical capabilities and intellectual property (“IP” or “building blocks”) in processing, leveraging open standards and open architectures to adapt quickly those building blocks into solutions for highly data-intensive applications, including emerging needs in areas such as artificial intelligence (“AI”).

Current wording

Our capabilities, technology, people, culture and research and development (“R&D”) strategy all differentiate Mercury in the aerospace and defense industry. We maintain our technological edge by investing in the critical building blocks of processing, developing valuable IP and embracing open standards and architectures. This lets us rapidly shape these building blocks into products and solutions for highly data-intensive missions, including emerging areas like artificial intelligence (“AI”) processing at the edge.

Previous wording

As of March 27, 2026, we had 2,117 employees. We employ hardware and software architects and design engineers, primarily engaged in engineering and research and product development activities to achieve our objectives to fully capitalize upon and maintain our technological leads in the high-performance, real-time sensor processing industry and in mission computing, platform management and other safety-critical applications. Our talent attraction, engagement and retention is critical to execute on our long-term strategy. We invest in our culture and values to drive employee engagement that turns ideas into action, delivering trusted and secure solutions at the speed of innovation. We believe that our success depends on our ability to foster a company-wide culture that values a broad range of solutions to problems, a wide array of skills and experiences, and multiple perspectives. We are committed to providing an inclusive environment that respects the varied backgrounds and viewpoints of our employees. We believe that the workforce required to grow our business and deliver creative solutions must be rich in diverse thought and experience. Our initiatives focus on building and maintaining the talent that will create cohesive and collaborative teams that drive innovation. By adhering to these values, it will help our employees to realize their full potential at work to provide Innovation That Matters®.

Current wording

As of October 2, 2026, we had 2,057 employees. We employ hardware and software architects and design engineers, primarily engaged in engineering and research and product development activities to achieve our objectives to fully capitalize upon and maintain our technological leads in the high-performance, real-time sensor processing industry and in mission computing, platform management and other safety-critical applications. Our talent attraction, engagement and retention is critical to execute on our long-term strategy. We invest in our culture and values to drive employee engagement that turns ideas into action, delivering trusted and secure solutions at the speed of innovation. We believe that our success depends on our ability to foster a company-wide culture that values a broad range of solutions to problems, a wide array of skills and experiences, and multiple perspectives. We are committed to providing an inclusive environment that respects the varied backgrounds and viewpoints of our employees. We believe that the workforce required to grow our business and deliver creative solutions must be rich in diverse thought and experience. Our initiatives focus on building and maintaining the talent that will create cohesive and collaborative teams that drive innovation. By adhering to these values, it will help our employees to realize their full potential at work to provide Innovation That Matters®.

Previous wording

Our consolidated revenues, net loss, diluted net loss per share, adjusted earnings per share (“adjusted EPS”), and adjusted EBITDA for the third quarter ended March 27, 2026 were $235.8 million, $2.9 million, $0.04, $0.27, and $36.1 million, respectively. Our consolidated revenues, net loss, diluted net loss per share, adjusted earnings per share (“adjusted EPS”), and adjusted EBITDA for the nine months ended March 27, 2026 were $693.8 million, $30.5 million, $0.51, $0.68, and $101.7 million, respectively. See the Non-GAAP Financial Measures section for a reconciliation to our most directly comparable GAAP financial measures.

Current wording

Our consolidated revenues, net income, diluted net income per share, adjusted earnings per share (“adjusted EPS”), and adjusted EBITDA for the first quarter ended October 2, 2026 were $253.2 million, $13.1 million, $0.21, $0.52, and $56.4 million, respectively.

Previous wording

There were 13 weeks included in the results of operations for the third quarters ended March 27, 2026 and March 28, 2025, respectively. There were 39 weeks during thenine months ended March 27, 2026 and March 28, 2025, respectively. The results for the third quarter and nine months ended March 27, 2026 are not necessarily indicative of the results to be expected for the full fiscal year.

Current wording

There were 13 weeks included in the results of operations for the first quarters ended October 2, 2026 and September 26, 2025, respectively. The results for the first quarter ended October 2, 2026 are not necessarily indicative of the results to be expected for the full fiscal year.

Previous wording

The third quarter ended March 27, 2026 compared to the third quarter ended March 28, 2025

Current wording

The first quarter ended October 2, 2026 compared to the first quarter ended September 26, 2025

Previous wording

The following table sets forth, for the third quarter ended indicated, financial data from the Consolidated Statements of Operations and Comprehensive Income (Loss):

Current wording

The following table sets forth, for the first quarter ended indicated, financial data from the Consolidated Statements of Operations and Comprehensive Income (Loss):

Previous wording

Total revenues increased $24.4 million, or 11.5%, to $235.8 million during the third quarter ended March 27, 2026, as compared to $211.4 million during the third quarter ended March 28, 2025. Revenues increased year over year as we continued to execute on our program base. Point in time revenue and over time revenue represented 52% and 48%, respectively, of total revenues during the third quarter ended March 27, 2026, an increase of $9.8 million and $14.6 million, respectively. Point in time revenue and over time revenue represented 53% and 47% respectively, of total revenues during the third quarter ended March 28, 2025.

Current wording

Total revenues increased $27.9 million, or 12.4%, to $253.2 million during the first quarter ended October 2, 2026, as compared to $225.2 million during the first quarter ended September 26, 2025. Over time revenue and point in time revenue each represented 50% of total revenues during the first quarter ended October 2, 2026, an increase of $18.4 million and $9.5 million, respectively, as compared to the first quarter ended September 26, 2025. Point in time revenue and over time revenue represented 52% and 48% respectively, of total revenues during the first quarter ended September 26, 2025.

Previous wording

Revenue increases were driven by the modules and sub-assemblies as well as the integrated solutions product grouping which increased $17.5 million and $11.0 million, respectively, partially offset by the components product grouping which decreased $4.1 million during the third quarter ended March 27, 2026, when compared to the prior period. The increase in total revenue was primarily driven by the other sensor and effector, radar, and electronic warfare end applications with increases of $17.3 million, $8.9 million, and $8.6 million, respectively, partially offset by C4I and other end applications which decreased $7.0 million and $3.4 million, respectively. The increase in total revenue was also driven by the Land, Space, and Naval platforms with increases of $19.0 million, $13.9 million, and $12.0 million, respectively, partially offset by decreases to the Airborne and Other platforms of $17.7 million and $2.8 million, respectively. The largest program increases were related to LTAMDS, PWSA, and SEWIP, partially offset by a decrease in F/A-18 when compared to the prior period. There were no programs comprising 10% or more of our revenues for the third quarters ended March 27, 2026 or March 28, 2025.

Current wording

Revenue increases were driven by the components, integrated solutions, as well as the modules and sub-assemblies product groupings which increased $17.8 million, $9.0 million, and $1.1 million, respectively, during the first quarter ended October 2, 2026, when compared to the prior period. The increase in total revenue was primarily driven by the radar, electronic warfare, other sensor and effector, as well as other end applications with increases of $26.5 million, $12.8 million, $10.5 million, and $1.3 million respectively, partially offset by C4I which decreased $23.2 million. The increase in total revenue was also driven by the Land, Other, Naval, and Airborne platforms with increases of $15.8 million, $5.8 million, $4.0 million, and $2.2 million, respectively. The largest program increases were related to LTAMDS, Patriot, F-16, F-15, and an airborne processing program, partially offset by decreases in SCAR, F-35, and an electronic warfare program when compared to the prior period. There were no programs comprising 10% or more of our revenues for the first quarters ended October 2, 2026 or September 26, 2025.

Previous wording

Gross margin was 29.3% for the third quarter ended March 27, 2026, an increase of 230 basis points from the 27.0% gross margin realized during the third quarter ended March 28, 2025. The higher gross margin was driven by net estimate at completion ("EAC") change impact on our programs recognized over time of approximately $2.1 million recorded in the quarter, an incremental improvement of approximately $1.6 million, or 80 basis points, when compared to the prior period. The increase was also driven by lower net manufacturing variances $4.1 million, partially offset by higher inventory reserves of $3.3 million.

Current wording

Gross margin was 35.2% for the first quarter ended October 2, 2026, an increase of 730 basis points from the 27.9% gross margin realized during the first quarter ended September 26, 2025. The higher gross margin was driven by program mix, lower inventory reserves of $5.4 million, and lower net estimate at completion ("EAC") change impact on our programs recognized over time of approximately $3.1 million recorded in the quarter, an incremental improvement of approximately $1.0 million, or 60 basis points, when compared to the prior period. These decreases were partially offset by higher scrap of $0.8 million.

Previous wording

We recognized $9.6 million of amortization of intangible assets during the third quarter ended March 27, 2026, as compared to $10.2 million during the third quarter ended March 28, 2025, primarily due to various customer relationship intangibles being fully amortized in fiscal 2025.

Current wording

We recognized $9.3 million of amortization of intangible assets during the first quarter ended October 2, 2026, as compared to $10.3 million during the first quarter ended September 26, 2025. The decrease from the prior period is primarily due to various customer relationship intangibles being fully amortized in fiscal 2026.

Previous wording

Restructuring and other charges were $5.6 million during the nine months ended March 27, 2026, as compared to $7.2 million during the nine months ended March 28, 2025. Restructuring and other charges during the nine months ended March 27, 2026 were primarily severance related charges associated with workforce reductions initiated during the period that eliminated approximately 100 positions. Restructuring and other charges during the nine months ended March 28, 2025 related to severance related charges primarily related to the reduction in workforce initiated January 29, 2025.

Current wording

We incurred $2.0 million of restructuring and other charges during the first quarter ended October 2, 2026, as compared to $1.6 million during the first quarter ended September 26, 2025. Restructuring and other charges during the first quarter ended October 2, 2026 were primarily related to severance related charges of $1.5 million associated with a workforce reduction initiated during the quarter that eliminated approximately 35 positions, predominantly in manufacturing, SG&A, and R&D, $0.3 million of exit costs for the closure of two of our facility leases, as well as $0.2 million of information systems transformation costs. Restructuring and other charges during the first quarter ended September 26, 2025 were primarily related to severance related charges associated with a workforce reduction initiated during the quarter that eliminated approximately 40 positions.

Previous wording

There was an immaterial amount of acquisition costs and other related expenses, including costs incurred in the asset acquisition of a provider of specialized manufacturing processes, during the third quarters ended March 27, 2026 and March 28, 2025.

Current wording

There were an immaterial amount of acquisition costs and other related expenses during the first quarters ended October 2, 2026 and September 26, 2025.

Previous wording

We recognized $2.5 million of interest income during the third quarter ended March 27, 2026, as compared to $1.3 million during the third quarter ended March 28, 2025. The increase was driven by higher average cash and cash equivalents during the period.

Current wording

We recognized $1.3 million of interest income during the first quarter ended October 2, 2026, as compared to $2.0 million during the first quarter ended September 26, 2025. The decrease was driven by lower average cash and cash equivalents during the period.

Previous wording

We incurred $7.3 million of interest expense during the third quarter ended March 27, 2026, as compared to $8.1 million during the third quarter ended March 28, 2025. The decrease was driven by lower interest rates during the period on our existing credit facility (the "Revolver").

Current wording

We incurred $5.4 million of interest expense during the first quarter ended October 2, 2026, as compared to $7.9 million during the first quarter ended September 26, 2025. The decrease was driven by lower average borrowings on our existing credit facility (the "Revolver").

Previous wording

Other expense, net was $3.1 million during the third quarter ended March 27, 2026, as compared to other income, net of $2.3 million during the third quarter ended March 28, 2025. The third quarter ended March 27, 2026 includes a $1.9 million adjustment related to the disposal of our former manufacturing operations in Switzerland, $0.6 million of financing costs, and $0.5 million of net foreign currency translation losses. The third quarter ended March 28, 2025 includes other income of $2.7 million, related to the sale of the mc.com domain name, $1.2 million net of foreign currency translation gains, $0.9 million of financing costs, $0.5 million of securities class action expense, and $0.2 million of consulting costs.

Current wording

Other expense, net was $1.1 million during the first quarter ended October 2, 2026, as compared to $2.1 million during the first quarter ended September 26, 2025. The first quarter ended October 2, 2026 includes $0.6 million of financing costs and $0.5 million of net foreign currency transaction losses. The first quarter ended September 26, 2025 includes $0.9 million of financing costs, $0.8 million net foreign currency transaction losses, and $0.4 million of securities class action expense.

Previous wording

We recorded an income tax provision of $0.2 million and an income tax benefit of $2.6 million on a loss before income taxes of $2.7 million and $21.8 million for the third quarters ended March 27, 2026 and March 28, 2025, respectively.

Current wording

We recorded an income tax provision of $0.2 million and an income tax benefit of $4.0 million on income before income taxes of $13.3 million and losses before income taxes of $16.5 million for the first quarters ended October 2, 2026 and September 26, 2025, respectively.

Previous wording

During the nine months ended March 27, 2026 and March 28, 2025, we recognized a tax benefit of $2.4 million related to stock compensation windfalls and a tax provision of $0.4 million related to stock compensation shortfalls, respectively.

Current wording

During the first quarters ended October 2, 2026 and September 26, 2025, we recognized tax benefits of $5.4 million and $1.1 million related to stock compensation windfalls, respectively.

Previous wording

The effective tax rate for the third quarter ended March 27, 2026 differed from the federal statutory rate primarily due to federal and state research and development credits, non-deductible compensation, stock compensation windfalls, and state taxes. The effective tax rate for the third quarter ended March 28, 2025 differed from the federal statutory rate primarily due to federal and state research and development credits, return to provision adjustments, non-deductible compensation, and state taxes.

Current wording

The effective tax rate for the first quarters ended October 2, 2026 and September 26, 2025 differed from the federal statutory rate primarily due to stock compensation windfalls, non-deductible compensation, state taxes, and federal and state research and development credits.

Previous wording

We continue to maintain a valuation allowance on all of our foreign net operating loss carryforwards and the majority of our state research and developmental tax credit carryforwards. Based on forecasted taxable income and the scheduled reversal of the remaining deferred tax assets, we believe it is more likely than not that all other deferred tax assets will be recognized. We expect to amortize previously capitalized research and development expenditures.

Current wording

We continue to maintain a valuation allowance on all of our foreign net operating loss carryforwards and the majority of our state research and developmental tax credit carryforwards. Based on forecasted taxable income and the scheduled reversal of the remaining deferred tax assets, we believe it is more likely than not that all other deferred tax assets will be recognized.

Previous wording

Our primary sources of liquidity come from existing cash and cash generated from operations, our Revolver, and our ability to raise capital under our universal shelf registration statement. Our near-term fixed commitments for cash expenditures consist primarily of payments under operating leases and inventory purchase commitments. As of March 27, 2026, our working capital balance decreased $14.3 million, or 3%, as compared to the balance as of June 27, 2025.

Current wording

Our primary sources of liquidity come from existing cash and cash generated from operations, our Revolver, and our ability to raise capital under our universal shelf registration statement. Our near-term fixed commitments for cash expenditures consist primarily of payments under operating leases and inventory purchase commitments. Our working capital balance, which we define as Total current assets less Cash and cash equivalents and Total current liabilities, as of October 2, 2026 was $490.9 million, as compared to $430.6 million as of July 3, 2026.

Previous wording

We have an unlimited amount available under the shelf registration statement.

Current wording

We have an unlimited amount available under the shelf registration statement. We anticipate renewing our shelf registration statement during the second quarter of fiscal 2027.

Previous wording

We have a 5-year Revolver with a maturity extended to November 4, 2030. The borrowing capacity as defined under the Revolver as of March 27, 2026 is the total availability of $850.0 million less outstanding borrowings of $591.5 million and outstanding letters of credit of $4.2 million. During the nine months ended March 27, 2026, we made no borrowings or repayments. As of March 27, 2026, we were in compliance with all covenants and conditions under the Revolver.

Current wording

We have an $850.0 million revolving credit facility that matures on November 4, 2030. The borrowing capacity as defined under the Revolver as of October 2, 2026 is the total availability of $850.0 million less outstanding borrowings of $341.5 million and outstanding letters of credit of $6.2 million. During the first quarter ended October 2, 2026, we made payments of $100.0 million on the Revolver with no additional borrowings. As of October 2, 2026, we were in compliance with all covenants and conditions under the Revolver.

Previous wording

On August 13, 2024, we entered into a $60.0 million committed receivables purchase and servicing agreement (“RPSA”) with a new party. The RPSA has an initial term of two years. Pursuant to the RPSA, the new party has committed to purchase receivables at a discount from a list of certain of our customers, maintaining a balance of purchased receivables at or below $60.0 million. On December 10, 2025, the Company amended the RPSA to increase the facility from $60.0 million to $75.0 million. We had $75.0 million of factored accounts receivable, of which $60.9 million was included as a contra account within Accounts receivable, net of allowance for credit losses on our Consolidated Balance Sheet and $14.1 million was recorded in Due to factoring facility on our Consolidated Balance Sheet as of March 27, 2026. We incurred factoring fees of approximately $1.4 million during the nine months ended March 27, 2026. We had $60.0 million of factored accounts receivable, of which $55.1 million was included as a contra account within Accounts receivable, net of allowance for credit losses on our Consolidated Balance Sheet and $4.9 million was recorded in Due to factoring facility on our Consolidated Balance Sheet as of March 28, 2025. We incurred factoring fees of approximately $1.3 million during the nine months ended March 28, 2025.

Current wording

On June 1, 2026, we entered into a $100.0 million committed RPA. The RPA has an initial term of one year. Pursuant to the RPA, the counterparty committed to purchase receivables at a discount from a list of certain of our customers, maintaining a balance of purchased receivables at or below $100.0 million. We had $98.6 million of factored accounts receivable, of which $91.6 million was included within Accounts receivable, net of allowance for credit losses on our Consolidated Balance Sheet and $7.0 million was recorded in Due to factoring facility on our Consolidated Balance Sheet as of October 2, 2026. We incurred factoring fees of approximately $0.5 million during the first quarter ended October 2, 2026. We had $51.1 million of factored accounts receivable, of which $45.5 million was included within Accounts receivable, net of allowance for credit losses on our Consolidated Balance Sheet and $5.6 million was recorded in Due to factoring facility on our Consolidated Balance Sheet as of September 26, 2025. We incurred factoring fees of approximately $0.4 million during the first quarter ended September 26, 2025.

Previous wording

On November 3, 2025, the Board of Directors authorized a new share repurchase program for the purchase of up to $200.0 million of our outstanding common stock. The program has no expiration date and repurchases may be made through open market or privately negotiated transactions from time to time at prevailing market prices. The timing and amount of repurchases will depend on market conditions and other factors. Repurchased shares are accounted for as authorized and unissued shares. All share repurchases are made in accordance with Rule 10b-18. During the third quarter ended March 27, 2026, no shares of the Company's common stock were repurchased under the share repurchase program. During the nine months ended March 27, 2026, 221,510 shares of the Company's common stock were repurchased and immediately retired under the share repurchase program at an average cost of $67.70 per share. As of March 27, 2026, there was $185.0 million available for future share repurchases under this share repurchase program.

Current wording

On November 3, 2025, the Board of Directors authorized a share repurchase program for the purchase of up to $200.0 million of our outstanding common stock. The program has no expiration date and repurchases may be made through open market or privately negotiated transactions from time to time at prevailing market prices. The timing and amount of repurchases will depend on market conditions and other factors. Repurchased shares are accounted for as authorized and unissued shares. All share repurchases are made in accordance with Rule 10b-18. During the first quarter ended October 2, 2026, no shares of our common stock was repurchased under the share repurchase program. As of October 2, 2026, there was $185.0 million available for future share repurchases under this share repurchase program.

Previous wording

Our cash and cash equivalents increased by $22.7 million from June 27, 2025 to March 27, 2026, as the result of $60.2 million of cash provided by operating activities, partially offset by $20.7 million invested in purchases of property and equipment, $15.0 million of cash paid in the purchase and retirement of common stock, and $1.4 million of cash paid in the asset acquisition of a provider of specialized manufacturing processes.

Current wording

Our cash and cash equivalents decreased by $104.6 million from July 3, 2026 to October 2, 2026, as the result of the $100.0 million repayment on the Revolver, $14.0 million of cash used in operating activities, and $10.4 million invested in purchases of property and equipment, partially offset by $19.8 million of proceeds from stock option exercises.

Previous wording

During the nine months ended March 27, 2026, we had an inflow of $60.2 million in cash from operating activities compared to a $100.8 million inflow during the nine months ended March 28, 2025. The reduced inflow during the nine months ended March 27, 2026 was primarily due to an outflow of $6.5 million from deferred revenues and customer advances, as compared to an inflow of $67.9 million in the prior period, an outflow of $20.5 million due to prepaid expenses and other current assets, as compared to an inflow of $4.0 million in the prior period, and a $18.2 million lower inflow from accounts receivable, unbilled receivables, and costs in excess of billings. This activity was partially offset by an inflow of $47.4 million from accounts payable, accrued expenses, accrued compensation, and due to factoring, as compared to an outflow in the prior period of $5.3 million. Under the terms of the RPSA for some customers, we will collect customer payments related to factored receivables, which are then remitted to the counterparty after receipt. As of March 27, 2026, we had collected $14.1 million on behalf of the RPSA. These collected balances are reflected as Cash and cash equivalents and the related obligation to remit the cash to the counterparty is recorded in Due to factoring facility on our Consolidated Balance Sheet. The lower inflow of cash from operating activities was partially offset by a lower net loss of $23.8 million. The settlement in principle of the federal securities class action lawsuit, which is expected to be covered by our insurance, reached during the nine months ended September 26, 2025, increased the cash provided by accrued expenses and was offset by a $32.5 million outflow in other current assets, respectively.

Current wording

During the first quarter ended October 2, 2026, we had an outflow of $14.0 million in cash from operating activities compared to a $2.2 million inflow during the first quarter ended September 26, 2025. The outflow during the first quarter ended October 2, 2026 was primarily due to an outflow of $17.5 million from accounts receivable, unbilled receivables, and costs in excess of billings, as compared to an inflow of $20.1 million in the prior period, an outflow of $10.4 million due to accounts payable, accrued expenses, accrued compensation, and due to factoring, as compared to an inflow of $20.9 million in the prior period, and a $20.1 million greater outflow from inventory. This activity was partially offset by a lower outflow of $33.7 million from prepaid expenses and other current assets. The outflow of cash from operating activities was also partially offset by net income of $13.1 million, as compared to a net loss of $12.5 million in the prior period.

Previous wording

Purchase obligations repre sent open non-cancelable purchase commitments for certain inventory components and services used in normal operations. The purchase commitments covered by these agreements aggregated approximately $224.2 million at March 27, 2026.

Current wording

Purchase obligations repre sent open non-cancelable purchase commitments for certain inventory components and services used in normal operations. The purchase commitments covered by these agreements aggregated approximately $359.0 million at October 2, 2026. We are experiencing higher levels of purchase obligations in an effort to secure materials to support execution on performance obligations.

Previous wording

We have a liability at March 27, 2026 of $4.0 million for uncertain tax positions that have been taken or are expected to be taken in various income tax returns. We do not know the ultimate resolution on these uncertain tax positions and as such, do not know the ultimate timing of payments or amount, if any, related to this liability. Accordingly, these amounts are not included in the above table.

Current wording

We have a liability at October 2, 2026 of $3.5 million for uncertain tax positions that have been taken or are expected to be taken in various income tax returns. We do not know the ultimate resolution on these uncertain tax positions and as such, do not know the ultimate timing of payments or amount, if any, related to this liability. Accordingly, these amounts are not included in the above table.

Previous wording

The following table reconciles our net loss, the most directly comparable GAAP financial measure, to our adjusted EBITDA:

Current wording

The following table reconciles our net income (loss), the most directly comparable GAAP financial measure, to our adjusted EBITDA:

Previous wording

The following tables reconcile net loss and diluted loss per share, the most directly comparable GAAP measures, to adjusted income and adjusted EPS:

Current wording

The following table reconciles net income (loss) and diluted earnings (loss) per share, the most directly comparable GAAP measures, to adjusted income and adjusted EPS:

Previous wording

The following table reconciles cash provided by operating activities, the most directly comparable GAAP financial measure, to free cash flow:

Current wording

The following table reconciles cash (used in) provided by operating activities, the most directly comparable GAAP financial measure, to free cash flow: