Integer Holdings Corp

Previous wording

•operational risks, such as our dependence upon a limited number of customers; pricing pressures and contractual pricing restraints we face from customers; our reliance on third-party suppliers for raw materials, key products and subcomponents; interruptions in our manufacturing operations; our ability to attract, train and retain a sufficient number of qualified associates to maintain and grow our business; the potential for harm to our reputation and competitive advantage caused by quality problems related to our products; our dependence upon our information technology systems and our ability to prevent cyber-attacks and other failures; global climate change and the emphasis on Environmental, Social and Governance matters by various stakeholders; our dependence upon our senior management team and key technical personnel; and consolidation in the healthcare industry resulting in greater competition;

Current wording

•operational risks, such as our dependence upon a limited number of customers; pricing pressures and contractual pricing restraints we face from customers; our reliance on third-party suppliers for raw materials, key products and subcomponents; interruptions in our manufacturing operations; uncertainty surrounding macroeconomic and geopolitical factors in the U.S. and globally; our ability to attract, train and retain a sufficient number of qualified associates to maintain and grow our business; the potential for harm to our reputation and competitive advantage caused by quality problems related to our products; our dependence upon our information technology systems and our ability to prevent cyber-attacks and other failures; global climate change and the emphasis on Environmental, Social and Governance matters by various stakeholders; our dependence upon our senior management team and key technical personnel; and consolidation in the healthcare industry resulting in greater competition;

Previous wording

32 - property and proprietary rights; our ability to comply with customer-driven policies and third-party standards or certification requirements; our ability to obtain and/or retain necessary licenses from third parties for new technologies; our ability and the cost to comply with environmental regulations; legal and regulatory risks from our international operations; the fact that the healthcare industry is highly regulated and subject to various regulatory changes; and our business being indirectly subject to healthcare industry cost containment measures that could result in reduced sales of our products; and

Current wording

•legal and compliance risks, such as regulatory issues resulting from product complaints, recalls or regulatory audits; the potential of becoming subject to product liability or intellectual property claims; our ability to protect our intellectual property and proprietary rights; our ability to comply with customer-driven policies and third-party standards or certification requirements; our ability to obtain and/or retain necessary licenses from third parties for new technologies; our ability and the cost to comply with environmental regulations; legal and regulatory risks from our international operations; the fact that the healthcare industry is highly regulated and subject to various regulatory changes; and our business being indirectly subject to healthcare industry cost containment measures that could result in reduced sales of our products; and

Previous wording

Except as may be required by applicable law, we disclaim any obligation to update forward-looking statements in this Form 10-Q whether to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results, financial conditions or prospects, or otherwise.

Current wording

Unless otherwise noted, any forward-looking statement made by us in this Form 10-Q is based only on information currently available to us and speaks only as of the date on which it is made. Except as may be required by applicable law, we disclaim any obligation to update forward-looking statements in this Form 10-Q whether to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results, financial conditions or prospects, or otherwise.

Previous wording

Our future results of operations and liquidity could be materially adversely affected by uncertainty surrounding macroeconomic and geopolitical factors in the U.S. and globally characterized by the supply chain environment, inflationary pressure, elevated interest rates, disruptions in the commodities’ markets as a result of the conflict between Russia and Ukraine and conflicts in the Middle East, including Israel and Iran, and the introduction of or changes in tariffs or trade barriers. The impact of these issues on our business will vary by geographic market and product line, but specific impacts to our business include increased borrowing costs, labor shortages, disruptions in the supply chain, delayed or reduced customer orders and sales, delays in shipments to and from certain countries and potential increased expenses resulting from tariffs or other trade barriers. We monitor economic conditions closely. In response to reductions in revenue, we can take actions to align our cost structure with changes in demand and manage our working capital. However, there can be no assurance as to the effectiveness of our efforts to mitigate any impact of the current and future adverse economic conditions and other developments.

Current wording

Our future results of operations and liquidity could be materially adversely affected by uncertainty surrounding macroeconomic and geopolitical factors in the U.S. and globally characterized by the supply chain environment, inflationary pressure, elevated interest rates, disruptions in the commodities’ markets as a result of the conflict between Russia and Ukraine and conflicts in the Middle East, including Israel and Iran, and the introduction of or changes in tariffs or trade barriers. The impact of these issues on our business will vary by geographic market and product line, but specific impacts to our business may include increased borrowing costs, labor shortages, disruptions in the supply chain, delayed or reduced customer orders and sales, delays in shipments to and from certain countries and potential increased expenses resulting from tariffs or other trade barriers. We monitor economic conditions closely. In response to reductions in revenue, we can take actions to align our cost structure with changes in demand and manage our working capital. However, there can be no assurance as to the effectiveness of our efforts to mitigate any impact of the current and future adverse economic conditions and other developments.

Previous wording

We used a portion of the remaining net proceeds from the issuance of the 2030 Convertible Notes to exchange $383.7 million in aggregate principal amount of our outstanding 2.125% Convertible Senior Notes due in 2028 (the “2028 Convertible Notes”) for an aggregate cash exchange consideration of $384.4 million in cash and 1,553,806 shares of Common Stock (the “Note Exchange Transactions”). The Note Exchange Transactions were considered an induced conversion and, as a result, we recorded $46.7 million during the three months ended March 28, 2025 in induced conversion expense within Other loss, net in the Condensed Consolidated Statements of Operations and Comprehensive Income. Contemporaneously with the Note Exchange Transactions, we terminated a portion of the capped call transactions related to the 2028 Convertible Notes and received 436,963 shares of Common Stock. We allotted the remainder of the net proceeds to pay the down our revolving credit facility (the “Revolving Credit Facility”) and five-year “term A” loan (the “TLA Facility”).

Current wording

We used a portion of the remaining net proceeds from the issuance of the 2030 Convertible Notes to exchange $383.7 million in aggregate principal amount of our outstanding 2.125% Convertible Senior Notes due in 2028 (the “2028 Convertible Notes”) for an aggregate cash exchange consideration of $384.4 million in cash and 1,553,806 shares of Common Stock (the “Note Exchange Transactions”). The Note Exchange Transactions were considered an induced conversion and, as a result, we recorded $46.7 million during the three months ended March 28, 2025 in induced conversion expense within Other (income) loss, net in the Condensed Consolidated Statements of Operations and Comprehensive Income. Contemporaneously with the Note Exchange Transactions, we terminated a portion of the capped call transactions related to the 2028 Convertible Notes and received 436,963 shares of Common Stock. We allotted the remainder of the net proceeds to pay the down our revolving credit facility (the “Revolving Credit Facility”) and five-year “term A” loan (the “TLA Facility”).

Previous wording

On October 31, 2024, we completed the sale of our wholly-owned subsidiary Electrochem Solutions, Inc. (“Electrochem”), which focused on nonmedical applications for the energy, military and environmental sectors. As a result of the Electrochem divestiture, the results of operations of the Electrochem business have been classified as discontinued operations for all periods presented. Loss from discontinued operations for the first quarters of 2025 and 2024 were not material.

Current wording

On October 31, 2024, we completed the sale of our wholly-owned subsidiary Electrochem Solutions, Inc. (“Electrochem”), which focused on nonmedical applications for the energy, military and environmental sectors. As a result of the Electrochem divestiture, the results of operations of the Electrochem business have been classified as discontinued operations for all periods presented. Income (loss) from discontinued operations for the second quarters and first six months of 2025 and 2024 were not material.

Previous wording

Income (loss) from continuing operations for the first quarter of 2025 was a loss of $22.5 million, or $0.66 per diluted share, compared to income of $20.6 million, or $0.59 per diluted share, for the first quarter of 2024. These variances are primarily the result of the following:

Current wording

Income from continuing operations for the second quarter and first six months of 2025 was $37.0 million, or $1.04 per diluted share, and $14.5 million, or $0.41 per diluted share, respectively, compared to $31.2 million, or $0.88 per diluted share, and $51.8 million, or $1.47 per diluted share for the second quarter and first six months of 2024, respectively. These variances are primarily the result of the following:

Previous wording

•Sales for the first quarter of 2025 increased $29.6 million when compared to the same period in 2024, driven by strong demand, new product ramps, growth from emerging customers with PMA (premarket approval) products and contributions from our recent acquisitions.

Current wording

•Sales for the second quarter and first six months of 2025 increased $48.6 million and $78.2 million, respectively, when compared to the same periods in 2024, driven by strong demand, new product ramps, growth from emerging customers with PMA (premarket approval) products and contributions from our recent acquisitions.

Previous wording

•Gross profit for the first quarter of 2025 increased $12.0 million, primarily from higher sales volume leverage, efficiencies gained from the continued improvement in the supply chain and contributions from our recent acquisitions.

Current wording

•Gross profit for the second quarter and first six months of 2025 increased $11.8 million and $23.8 million, respectively, primarily from higher sales volume leverage, efficiencies gained from the continued improvement in the supply chain and contributions from our recent acquisitions.

Previous wording

•Operating expenses for the first quarter of 2025 increased $1.2 million when compared to the same period in 2024, primarily due to higher SG&A, partially offset by lower RD&E costs and Restructuring and other charges. Operating expenses as a percentage of sales improved to 16.2% for the first quarter of 2025 compared to 17.1% or the first quarter of 2024.

Current wording

•Operating expenses for the second quarter and first six months of 2025 increased $6.9 million and $8.1 million, respectively, when compared to the same periods in 2024, primarily due to higher SG&A expenses. Operating expenses as a percentage of sales was 14.7% for the second quarter of 2025 and 2024 and improved to 15.4% for first six months of 2025, compared to 15.8% for the same period in 2024.

Previous wording

•During the first quarters of 2025 and 2024, we recognized gains on equity investments of $0.2 million and $1.1 million, respectively. Gains and losses on equity investments are generally unpredictable in nature.

Current wording

•During the first six months of 2025 and 2024 we recognized net gains $0.2 million and $1.1 million, respectively, from our equity investments. Gains and losses on equity investments are generally unpredictable in nature.

Previous wording

•Other loss, net for the first quarter of 2025 was $47.9 million compared to $1.0 million for the first quarter of 2024, primarily due to $46.7 million of debt conversion inducement expense related to the partial exchange of our outstanding 2028 Convertible Notes that was completed during the first quarter of 2025.

Current wording

•Other (income) loss, net for the second quarter and first six months of 2025 were net losses of $4.0 million and $51.9 million, respectively, compared to net gains of $0.1 million and net losses of $0.9 million, respectively, for the second quarter and first six months of 2024. Other (income) loss, net includes $46.7 million of debt conversion inducement expense, which was recognized the first quarter of 2025, related to the partial exchange of our outstanding 2028 Convertible Notes.

Previous wording

•We recorded provisions for income taxes for the first quarters of 2025 and 2024 of $9.5 million and $4.2 million, respectively. The change in income tax expense was primarily due to relative changes in pre-tax income and the impact of discrete tax items.

Current wording

•We recorded provisions for income taxes for the second quarter and first six months of 2025 of $8.6 million and $18.1 million, respectively, compared with provisions for income taxes of $8.8 million and $13.1 million, respectively, for the second quarter and first six months of 2024. The changes in income tax expense were primarily due to relative changes in pre-tax income and the impact of discrete tax items.

Previous wording

For the first quarter of 2025, Cardio & Vascular (“C&V”) sales increased $37.0 million, or 17%, versus the comparable 2024 period. The increase in C&V sales was driven by new product ramps in electrophysiology and acquisitions, partially offset by the impact of fewer shipping days in the first quarter 2025 versus the first quarter 2024. C&V sales for the first quarter of 2025 included $13.3 million of aggregate sales from the recent Precision and VSi acquisitions. Foreign currency exchange rate fluctuations decreased C&V sales for the first quarter of 2025 by $0.4 million in comparison to the 2024 period, primarily due to U.S. dollar fluctuations relative to the Euro.

Current wording

For the second quarter and first six months of 2025, Cardio & Vascular (“C&V”) sales increased $55.4 million, or 24%, and $92.5 million, or 20%, respectively, versus the comparable 2024 periods. The increases in C&V sales for the second quarter and first six months of 2025 were driven by new product ramps in electrophysiology, acquisitions and strong customer demand in neurovascular. C&V sales for the second quarter and first six months of 2025 included $14.0 million and $27.2 million, respectively, of aggregate sales from the recent Precision and VSi acquisitions. Foreign currency exchange rate fluctuations increased C&V sales for the second quarter and first six months of 2025 by $0.8 million and $0.4 million, in comparison to the 2024 periods, primarily due to U.S. dollar fluctuations relative to the Euro.

Previous wording

For the first quarter of 2025, Cardiac Rhythm Management & Neuromodulation (“CRM&N”) sales increased $3.4 million, or 2%, versus the comparable 2024 period, driven by strong growth in emerging neuromodulation customers with PMA (pre-market approval) products and normalized cardiac rhythm management growth, offset by the impact of fewer shipping days in the first quarter 2025 versus the first quarter 2024. Foreign currency exchange rate fluctuations did not have a material impact on CRM&N sales during the first quarter of 2025 in comparison to 2024.

Current wording

For the second quarter and first six months of 2025, Cardiac Rhythm Management & Neuromodulation (“CRM&N”) sales increased $3.9 million, or 2%, and $7.4 million, or 2%, respectively, versus the comparable 2024 periods, driven by strong growth in emerging neuromodulation customers with PMA (pre-market approval) products, normalized cardiac rhythm management growth, and the final quarters of the planned decline of an early spinal cord stimulation neuromodulation finished implantable pulse generator (non-emerging) customer, announced in 2020. Foreign currency exchange rate fluctuations did not have a material impact on CRM&N sales during the second quarter and first six months of 2025 in comparison to 2024.

Previous wording

Other Markets sales for the first quarter of 2025 decreased $10.8 million, or 37%, versus the comparable 2024 period, primarily driven by the planned multi-year Portable Medical Exit. Foreign currency exchange rate fluctuations did not have a material impact on Other Markets sales during the first quarter of 2025 in comparison to the 2024 period.

Current wording

Other Markets sales for the second quarter and first six months of 2025 decreased $10.8 million, or 38%, and decreased $21.6 million or 38%, respectively, versus the comparable 2024 periods, driven by execution of the Portable Medical Exit. Foreign currency exchange rate fluctuations did not have a material impact on Other Markets sales during the second quarter and first six months of 2025 in comparison to the 2024 periods.

Previous wording

Changes to SG&A expenses from the prior year period were due to the following (in thousands):

Current wording

Changes to SG&A expenses from the prior year periods were due to the following (in thousands):

Previous wording

RD&E expense for the first quarter of 2025 was $14.2 million, compared to $15.3 million for the first quarter of 2024. The decrease in RD&E expense for 2025 compared to 2024 was primarily due to lower labor costs and the timing of program milestone achievements for customer funded programs. RD&E expenses are influenced by the number and timing of in-process projects and labor hours and other costs associated with these projects. Our research and development initiatives continue to emphasize new product development, product improvements, and the development of new technological platform innovations.

Current wording

RD&E expense for the second quarter and first six months of 2025 was $14.2 million and $28.4 million, respectively, compared to $15.6 million and $30.9 million, respectively, for the second quarter and first six months of 2024. The decrease in RD&E expense during the second quarter and first six months of 2025 compared to the same periods in 2024 is primarily due to the timing of program milestone achievements for customer funded programs. RD&E expenses are influenced by the number and timing of in-process projects and labor hours and other costs associated with these projects. Our research and development initiatives continue to emphasize new product development, product improvements, and the development of new technological platform innovations.

Previous wording

(a)Restructuring charges for the first quarters of 2025 and 2024 primarily consist of costs associated with our strategic reorganization and alignment and manufacturing alignment to support growth initiatives.

Current wording

(a)Restructuring charges for the first six months of 2025 and 2024 primarily consist of costs associated with our strategic reorganization and alignment and manufacturing alignment to support growth initiatives.

Previous wording

(b)Amounts for the first quarter of 2025 primarily include acquisition expenses related to the Precision and VSi acquisitions. Amounts for the first quarter of 2024 primarily included acquisition expenses related to the InNeuroCo and Pulse acquisitions.

Current wording

(b)Amounts for the first six months of 2025 primarily include acquisition expenses related to the Precision and VSi acquisitions. Amounts for the first six months of 2024 primarily included acquisition expenses related to the InNeuroCo and Pulse acquisitions.

Previous wording

(c)Amounts include gains and losses in connection with the disposal of property, plant and equipment.

Current wording

(c)Amounts include gains and losses in connection with the disposal of property, plant and equipment. In addition, during the second quarter of 2024 we recorded $1.2 million of loss recoveries relating to property damage which occurred in the fourth quarter of 2023 at one of our manufacturing facilities.

Previous wording

During 2025, contractual interest expense has decreased due to a lower combined interest rate, partially offset by higher average debt balance outstanding. The higher average debt balance outstanding is primarily the result of borrowings on our Revolving Credit Facility to fund the Precision and VSi acquisitions.

Current wording

During 2025, contractual interest expense has decreased due to a lower combined interest rates, partially offset by higher average debt balance outstanding and higher losses from extinguishment of debt. The lower combined interest rates are due to a favorable change to the mix in average debt balances outstanding and lower interest rates on our fixed rate debt as a result issuance of the 2030 Convertible Notes. The higher average debt balance outstanding is primarily the result of borrowings to fund the Precision and VSi acquisitions.

Previous wording

Other components of interest expense on borrowings include non-cash amortization and write-off (losses from extinguishment of debt) of deferred debt issuance costs and original issue discount. Amortization of deferred debt issuance costs and original issue discount increased during the first quarter of 2025 compared to the same periods in 2024 as a result of higher unamortized balances related to new debt. The losses from extinguishment of debt during the first quarter of 2025 were related to prepayments of portions of the TLA Facility in connection with issuance by the Company of its 2030 Convertible Notes.

Current wording

Other components of interest expense on borrowings include non-cash amortization and write-off (losses from extinguishment of debt) of deferred debt issuance costs and original issue discount. Amortization of deferred debt issuance costs and original issue discount increased during the second quarter and first six months 2025 compared to the same periods in 2024 as a result of higher unamortized balances related to new debt. The losses from extinguishment of debt during the second quarter and first six months of 2025 were related to prepayments of portions of the TLA Facility, primarily in connection with issuance of our 2030 Convertible Notes.

Previous wording

As of March 28, 2025 and December 31, 2024, approximately 89% and 50%, respectively, of our principal amount of debt are fixed rate borrowings.

Current wording

As of June 27, 2025 and December 31, 2024, approximately 91% and 50%, respectively, of our principal amount of debt are fixed rate borrowings.

Previous wording

Gain on equity investments for each period were as follows (in thousands):

Current wording

(Gain) loss on equity investments for each period were as follows (in thousands):

Previous wording

During the first quarters of 2025 and 2024, we recognized gains on equity investments of $0.2 million and $1.1 million, respectively. The amounts for both the first quarters of 2025 and 2024 relate to our share of equity method investee losses including unrealized depreciation of the underlying interests of the investee. As of March 28, 2025 and December 31, 2024, the carrying value of our equity investments was $7.6 million and $7.4 million, respectively.

Current wording

The amounts for both periods in 2025 and 2024 relate to our share of equity method investee (gains) losses including unrealized appreciation/depreciation of the underlying interests of the investee. As of June 27, 2025 and December 31, 2024, the carrying value of our equity investments was $7.5 million and $7.4 million, respectively.

Previous wording

Other loss, net for the first quarter of 2025 was $47.9 million compared to $1.0 million for the first quarter of 2024. Other loss, net for the first quarter of 2025 primarily includes debt conversion inducement expense of $46.7 million related to the partial exchange of $383.7 million in aggregate principal amount of the 2028 Convertible Notes. Other loss, net for the first quarter of 2024 primarily includes gains/losses from the impact of exchange rates on transactions denominated in foreign currencies.

Current wording

Other (income) loss, net for the second quarter and first six months of 2025 were losses of $4.0 million and $51.9 million, respectively, compared to gains of $0.1 million and net losses of $0.9 million, respectively, for the second quarter and first six months of 2024. Other (income) loss, net generally includes gains/losses from the impact of exchange rates on transactions denominated in foreign currencies. In addition, Other (income) loss, net includes $46.7 million of debt conversion inducement expense, which was recognized in the first quarter of 2025, related to the partial exchange of our outstanding 2028 Convertible Notes.

Previous wording

Our foreign currency transaction gains/losses are based primarily on fluctuations of the U.S. dollar relative to the Euro, Mexican peso, Uruguayan peso, Malaysian ringgits or Dominican peso. The impact of exchange rates on transactions denominated in foreign currencies included in Other loss, net for the first quarters of 2025 and 2024 were net losses of $1.1 million for both periods. We continually monitor our foreign currency exposures and seek to take steps to mitigate these risks. However, fluctuations in exchange rates could have a significant impact, positive or negative, on our financial results in the future.

Current wording

Our foreign currency transaction gains/losses are based primarily on fluctuations of the U.S. dollar relative to the Euro, Mexican peso, Uruguayan peso, Malaysian ringgits or Dominican peso. The impact of exchange rates on transactions denominated in foreign currencies included in Other (income) loss, net for the second quarter and first six months of 2025 were net losses of $3.9 million and $5.0 million, respectively, compared to net gains of $0.2 million and net losses of $0.9 million for the second quarter and first six months of 2024, respectively. We continually monitor our foreign currency exposures and seek to take steps to mitigate these risks. However, fluctuations in exchange rates could have a significant impact, positive or negative, on our financial results in the future.

Previous wording

We recognized income tax expense of $9.5 million for the first quarter of 2025 on a loss before taxes of $13.0 million (effective tax rate of (72.8)%), compared to an income tax expense of $4.2 million on $24.8 million of income before taxes (effective tax rate of 17.1%) for the same period of 2024. Income tax expense for the first quarters of 2025 and 2024 included discrete tax benefits of $1.5 million and $0.8 million, respectively. The discrete tax benefits for the first quarter of 2025 and 2024 are predominately related to excess tax benefits, net of deductibility limitations, recognized upon vesting of RSUs.

Current wording

We recognized income tax expense of $8.6 million for the second quarter of 2025 on $45.6 million of income before taxes (effective tax rate of 18.8%), compared to an income tax expense of $8.8 million on $40.0 million of income before taxes (effective tax rate of 22.1%) for the same period of 2024. The income tax expense for the first six months of 2025 was $18.1 million on $32.6 million of income before taxes (effective tax rate of 55.4%), compared to income tax expense of $13.1 million on income before taxes of $64.9 million (effective tax rate of 20.2%) for the same period of 2024. Income tax expense for the second quarter and first six months of 2025 included discrete tax benefits of $0.7 million and $2.2 million, respectively. The discrete tax benefits for the second quarter and first six months of 2025 are predominately related to excess tax benefits from stock-based compensation, net of deductibility limitations. Income tax expense for the second quarter and first six months of 2024 included discrete tax expense of $0.5 million and a discrete tax benefit of $0.3 million, respectively.

Previous wording

On December 15, 2022, the European Union (EU) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development (OECD) Pillar Two Framework. The effective dates are January 1, 2024 and January 1, 2025, for different aspects of the directive. A significant number of other countries are expected to also implement similar legislation with varying effective dates in the future. We continue to evaluate the potential impact on future periods of the Pillar Two Framework, pending legislative adoption by additional individual countries. Our 2025 provision for income taxes includes the impact of the Pillar Two 15% Global Minimum Tax.

Current wording

On December 15, 2022, the European Union (EU) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development (OECD) Pillar Two Framework. The effective dates are January 1, 2024 and January 1, 2025, for different aspects of the directive. We continue to evaluate the potential impact on future periods of the Pillar Two Framework, pending legislative adoption by additional individual countries. Our 2025 provision for income taxes includes the impact of the Pillar Two 15% Global Minimum Tax.

Previous wording

There is a potential for volatility of our effective tax rate due to several factors, including changes in the mix of pre-tax income and the jurisdictions to which it relates, business acquisitions, settlements with taxing authorities, changes in tax rates, and foreign currency exchange rate fluctuations. In addition, we continue to explore tax planning opportunities that may have a material impact on our effective tax rate.

Current wording

There is a potential for volatility of our effective tax rate due to several factors, including changes in the mix of pre-tax income and the jurisdictions to which it relates, business acquisitions, settlements with taxing authorities, changes in tax rates, and foreign currency exchange rate fluctuations. In addition, on July 4, 2025, President Trump signed the One Big Beautiful Bill Act (“OBBBA”) enacting a broad range of tax reform provisions, including extending and modifying certain key domestic and international Tax Cuts & Jobs Act provisions. Only certain provisions will have current-year financial reporting implications due to varying effective dates and discretionary elections. We are currently evaluating the OBBBA and do not anticipate a material impact to the condensed consolidated financial statements. We also continue to explore tax planning opportunities that may have a material impact on our effective tax rate.

Previous wording

Cash and cash equivalents at March 28, 2025 decreased by $14.8 million from December 31, 2024, primarily as a result of cash generated by operating activities of $31.3 million offset by purchases of property, plant and equipment of $25.2 million and tax withholding payments related to net share settlements of restricted stock unit awards of $14.1 million. The payment of the cash portion of the purchase price payable at closing for acquisitions of each of Precision and VSi were fully funded by borrowings on our Revolving Credit Facility. Net proceeds from the issuance of our 2030 Convertible Notes were utilized to purchase capped call options relating to the 2030 Convertible Notes, exchange of a portion of our 2028 Convertible Notes, and pay down our Revolving Credit Facility and TLA Facility.

Current wording

Cash and cash equivalents at June 27, 2025 decreased by $23.4 million from December 31, 2024, primarily as a result of cash generated by operating activities of $75.1 million offset by purchases of property, plant and equipment of $44.2 million, additional payments of $44.0 million during the second quarter on our TLA Facility and tax withholding payments related to net share settlements of restricted stock unit awards of $16.7 million. The payment of the cash portion of the purchase price payable at closing for acquisitions of each of Precision and VSi were fully funded by borrowings on our Revolving Credit Facility. Net proceeds from the issuance of our 2030 Convertible Notes were utilized to purchase capped call options relating to the 2030 Convertible Notes, exchange of a portion of our 2028 Convertible Notes, and pay down our Revolving Credit Facility and TLA Facility.

Previous wording

Working capital from continuing operations increased by $51.9 million from December 31, 2024, or $66.7 million excluding the increase in cash and cash equivalents. The increase in working capital, exclusive of cash and cash equivalents, primarily relates to positive fluctuations in accounts receivable, inventory and accrued expenses. Inventory increased from higher sales volume and product demand which also contributed to the increase in accounts receivable. Accrued expenses primarily decreased from the payment of our calendar 2024 short-term incentive plan pay-out.

Current wording

Working capital from continuing operations increased by $77.5 million from December 31, 2024, or $100.9 million excluding the decrease in cash and cash equivalents. The increase in working capital, exclusive of cash and cash equivalents, primarily relates to positive fluctuations in accounts receivable, inventory, prepaid expenses and other current assets, and accrued expenses. Inventory increased from higher sales volume and product demand which also contributed to the increase in accounts receivable. Accrued expenses primarily decreased from the payment of our calendar 2024 short-term incentive plan pay-out.

Previous wording

At March 28, 2025, $21.0 million of our cash and cash equivalents were held by foreign subsidiaries. We intend to limit our distributions from foreign subsidiaries to previously taxed income or current period earnings. If distributions are made utilizing current period earnings, we will record foreign withholding taxes in the period of the distribution.

Current wording

At June 27, 2025, $17.8 million of our cash and cash equivalents were held by foreign subsidiaries. We intend to limit our distributions from foreign subsidiaries to previously taxed income or current period earnings. If distributions are made utilizing current period earnings, we will record foreign withholding taxes in the period of the distribution.

Previous wording

As of March 28, 2025, our capital structure consisted of $1.235 billion of debt, net of deferred debt issuance costs and unamortized discounts and 35 million shares of common stock outstanding. As of March 28, 2025, we had access to $794.7 million of borrowing capacity under our Revolving Credit Facility, available for normal course of business and letters of credit, and are authorized to issue up to 100 million shares of common stock and 100 million shares of preferred stock. As of March 28, 2025, our contractual debt service obligations for the next twelve months, consisting of interest on our outstanding debt, are estimated to be approximately $32 million. As of March 28, 2025, we have prepaid all contractual principal payments on our outstanding indebtedness required in the next twelve months. Actual principal and interest payments may be higher if, for instance, the applicable interest rates on our Senior Secured Credit Facilities increase, we borrow additional amounts on our Revolving Credit Facility, or we pay principal amounts in excess of the required minimums reflected in the contractual debt service obligations above.

Current wording

As of June 27, 2025, our capital structure consisted of $1.202 billion of debt, net of deferred debt issuance costs and unamortized discounts and 35 million shares of common stock outstanding. As of June 27, 2025, we had access to $784.7 million of borrowing capacity under our Revolving Credit Facility, available for normal course of business and letters of credit, and are authorized to issue up to 100 million shares of common stock and 100 million shares of preferred stock. As of June 27, 2025, our contractual debt service obligations for the next twelve months, consisting of interest on our outstanding debt, are estimated to be approximately $29 million. As of June 27, 2025, we have prepaid all contractual principal payments on our outstanding indebtedness required in the next twelve months. Actual principal and interest payments may be higher if, for instance, the applicable interest rates on our Senior Secured Credit Facilities increase, we borrow additional amounts on our Revolving Credit Facility, or we pay principal amounts in excess of the required minimums reflected in the contractual debt service obligations above.

Previous wording

As of March 28, 2025, we had Senior Secured Credit Facilities that consist of an $800 million Revolving Credit Facility, with no outstanding principal balance, and a TLA Facility with an outstanding principal balance of $145 million. The Revolving Credit Facility and TLA Facility mature on February 15, 2028. The Senior Secured Credit Facilities include a mandatory prepayment provision customary for similar credit facilities.

Current wording

As of June 27, 2025, we had Senior Secured Credit Facilities that consist of an $800 million Revolving Credit Facility, with $10 million outstanding principal balance, and a TLA Facility with an outstanding principal balance of $101 million. The Revolving Credit Facility and TLA Facility mature on February 15, 2028. The Senior Secured Credit Facilities include a mandatory prepayment provision customary for similar credit facilities.

Previous wording

The conditions allowing holders of the 2028 Convertible Notes to convert have been met such that holders have the right to exercise their conversion option through the close of business on June 30, 2025. Any determination regarding the convertibility of the 2028 Convertible Notes during future periods will be made in accordance with the terms of the indenture governing the 2028 Convertible Notes. If a conversion request occurs, we have the intent and ability to refinance the amounts that may become due with respect to the 2028 Convertible Notes using the available borrowing capacity under the Revolving Credit Facility. As such, these obligations with respect to the 2028 Convertible Notes continue to be classified as a long-term liability on the Condensed Consolidated Balance Sheet at March 28, 2025.

Current wording

The conditions allowing holders of the 2028 Convertible Notes to convert have been met such that holders have the right to exercise their conversion option through the close of business on June 30, 2025. Any determination regarding the convertibility of the 2028 Convertible Notes during future periods will be made in accordance with the terms of the indenture governing the 2028 Convertible Notes. If a conversion request occurs, we have the intent and ability to refinance the amounts that may become due with respect to the 2028 Convertible Notes using the available borrowing capacity under the Revolving Credit Facility. As such, these obligations with respect to the 2028 Convertible Notes continue to be classified as a long-term liability on the Condensed Consolidated Balance Sheet at June 27, 2025. The conditions allowing holders of the 2030 Convertible Notes to convert have not been met as of June 27, 2025.

Previous wording

The Revolving Credit Facility and TLA Facility contain covenants requiring that we maintain (i) a Total Net Leverage Ratio not to exceed 5.00:1.00, subject to increase in certain circumstances following certain qualified acquisitions and (ii) an interest coverage ratio of at least 2.50:1.00. As of March 28, 2025, we were in compliance with these financial covenants. As of March 28, 2025, our Total Net Leverage Ratio, calculated in accordance with our Senior Secured Credit Facilities agreement, was approximately 2.8:1.0. For the twelve month period ended March 28, 2025, our interest coverage ratio, calculated in accordance with our Senior Secured Credit Facilities agreement, was approximately 8.6:1.0.

Current wording

The Revolving Credit Facility and TLA Facility contain covenants requiring that we maintain (i) a Total Net Leverage Ratio not to exceed 5.00:1.00, subject to increase in certain circumstances following certain qualified acquisitions and (ii) an interest coverage ratio of at least 2.50:1.00. As of June 27, 2025, we were in compliance with these financial covenants. As of June 27, 2025, our Total Net Leverage Ratio, calculated in accordance with our Senior Secured Credit Facilities agreement, was approximately 2.7:1.0. For the twelve month period ended June 27, 2025, our interest coverage ratio, calculated in accordance with our Senior Secured Credit Facilities agreement, was approximately 10.4:1.0.

Previous wording

We utilize accounts receivable factoring arrangements with financial institutions to accelerate the timing of cash receipts and enhance our cash position. These arrangements, in all cases, do not contain recourse provisions, which would obligate us in the event of our customers’ failure to pay. During the first three months of 2025 and 2024, we sold, without recourse, $58.1 million and $57.6 million of accounts receivable, respectively. See Note 1, “Basis of Presentation” of the Notes to the Condensed Consolidated Financial Statements contained in Item 1 of this report for further information regarding our factoring arrangements.

Current wording

We utilize accounts receivable factoring arrangements with financial institutions to accelerate the timing of cash receipts and enhance our cash position. These arrangements, in all cases, do not contain recourse provisions, which would obligate us in the event of our customers’ failure to pay. During the first six months of 2025 and 2024, we sold, without recourse, $131.1 million and $116.8 million of accounts receivable, respectively. See Note 1, “Basis of Presentation” of the Notes to the Condensed Consolidated Financial Statements contained in Item 1 of this report for further information regarding our factoring arrangements.

Previous wording

Operating Activities– During the first three months of 2025, we generated cash from operations of $31.3 million, compared to $23.2 million for the first three months of 2024. The increase of $8.0 million was the result of a $14.4 million increase in net income (loss) adjusted for non-cash items such as depreciation and amortization, partially offset by a $6.4 million decrease in cash flow provided by changes in operating assets and liabilities.

Current wording

Operating Activities– During the first six months of 2025, we generated cash from operations of $75.1 million, compared to $70.5 million for the first six months of 2024. The increase of $4.7 million was the result of a $25.4 million increase in net income adjusted for non-cash items such as depreciation and amortization, partially offset by a $20.8 million decrease in cash flow provided by changes in operating assets and liabilities.