Ultra Clean Holdings, Inc.
For the period ended Jun 26, 2026. Filed Aug 4, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 26, 2026 · Filed Aug 4, 2026
UCTT$41.13+10.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-27; filed 2026-04-29.
0001628280-26-028365
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-26; filed 2026-08-04.
0001628280-26-052540
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 78 previous paragraphs and 81 current paragraphs.
40 unchanged; 33 reworded; 7 added; 4 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
For the six-month period ended June 26, 2026, Products cost of revenue increased by $106.0 million compared to the same period in the prior year. The increase was primarily driven by higher material and labor costs of $80.6 million and $27.8 million, respectively, associated with increased production activity, partially offset by a decrease in manufacturing overhead costs of $2.4 million.
Current report
For the three and six month periods ended June 26, 2026, Services Cost of revenues increased by $6.4 million and $10.6 million, respectively, compared to the same periods in the prior year.
Current report
The increase for the three-month period was primarily driven by higher service volume, which resulted in increased labor, overhead, and material costs of $3.7 million, $1.7 million and $1.0 million, respectively.
Current report
The increase for the six-month period was primarily driven by higher service volume, which resulted in increased labor, overhead, and material costs of $5.9 million, $3.0 million and $1.7 million, respectively.
Current report
Products operating income and operating margin increased for the three and six month periods ended June 26, 2026 compared to the same periods in the prior year, primarily reflecting higher gross profit and the absence of the $77.6 million goodwill impairment charge recorded in the prior period.
Current report
General and administrative expenses increased for the three and six month periods ended June 26, 2026 compared to the same periods in the prior year, primarily due to higher employee-related costs.
Current report
The Company’s total gross debt as of June 26, 2026 reflects $600.0 million aggregate principal amount of 0.00% Convertible Notes due 2031 issued in fiscal year 2026 and a $15.0 million revolver drawdown. The Company's term loan facility was retired in full during fiscal year 2026 and carried no outstanding balance as of June 26, 2026.
Removed paragraphs (4)
Previous report
Products operating income and operating margin decreased for the three-month period ended March 27, 2026 compared to the same period in the prior year, primarily reflecting lower gross profit. Although product revenue increased modestly, cost of revenues increased at a higher rate, resulting in a decline in gross margin, primarily due to an unfavorable product mix and a shift in sales volumes across different geographic regions. Increases in operating expenses were not a significant driver but contributed to the overall decrease.
Previous report
Interest income increased for the three-month period ended March 27, 2026 compared to the same period in the prior year, primarily due to higher interest-earning balances.
Previous report
The Company’s total debt increased to $601.9 million as of March 27, 2026, primarily due to the issuance of $600.0 million aggregate principal amount of 0.00% Convertible Notes due 2031 during the quarter, partially offset by the repayment of $462.0 million of the Company’s term loan facility.
Previous report
At March 27, 2026, the Company had $19.4 million outstanding under the Term Loan, with an interest rate of 6.4%. The term loan facility matures on February 25, 2028. As of March 27, 2026, total unamortized debt issuance costs related to the Term Loan and the revolving credit facility were $1.0 million.
Reworded paragraphs (33)
Previous wording
24 - circumstances, the results of which form the basis of our judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. We consider certain accounting policies related to revenue recognition, inventory valuation, accounting for income taxes, business combinations, valuation of goodwill, intangible assets and long-lived assets to be critical policies due to the estimates and judgments involved in each.
Current wording
26 - circumstances, the results of which form the basis of our judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. We consider certain accounting policies related to revenue recognition, inventory valuation, accounting for income taxes, business combinations, valuation of goodwill, intangible assets and long-lived assets to be critical policies due to the estimates and judgments involved in each.
Previous wording
Discussion of Results of Operations for the Three months ended March 27, 2026 compared to the Three months ended March 28, 2025
Current wording
Discussion of Results of Operations for the Three and Six months ended June 26, 2026 compared to the Three and Six months ended June 27, 2025
Previous wording
For the three-month period ended March 27, 2026, Products revenues increased compared to the same period in the prior year. The increase in Products revenues was primarily due to an increase in customer demand, along with an overall market improvement in the semiconductor industry.
Current wording
For the three and six month periods ended June 26, 2026, Products revenues increased compared to the same periods in the prior year, primarily due to an increase in customer demand, driven by an overall market improvement in the semiconductor industry.
Previous wording
Services revenues increased for the three-month period ended March 27, 2026 compared to the same period in the prior year primarily due to an increase in demand across its customer base.
Current wording
Services revenues increased for the three and six month periods ended June 26, 2026 compared to the same periods in the prior year, primarily due to an increase in demand across its customer base.
Previous wording
Revenues by geographic area are categorized based on the customer’s location to which the products were shipped or services were performed.
Current wording
Revenues by geographic area are categorized based on the location to which the products were shipped or the location where services were performed.
Previous wording
For the three months ended March 27, 2026, U.S. and international revenues increased compared to the same period in the prior year, primarily reflecting improved conditions in the semiconductor capital equipment market, which drove higher customer demand across multiple regions.
Current wording
For the three and six months ended June 26, 2026, U.S. and international revenues increased compared to the same periods in the prior year, primarily reflecting improved conditions in the semiconductor capital equipment market, which drove higher customer demand across multiple regions. International revenue grew faster than U.S. revenue in both periods, shifting the geographic mix further toward international.
Previous wording
Cost of Products revenues consists of purchased materials, direct labor and manufacturing overhead. For the three-month period ended March 27, 2026, Cost of Products revenues increased by $10.4 million compared to the same period in the prior year. The increase was primarily driven by higher labor and manufacturing overhead costs of $9.4 million and $2.2 million, respectively, associated with increased production activity, partially offset by a decrease in material costs of $1.2 million.
Current wording
For the three-month period ended June 26, 2026, Products cost of revenue increased by $95.5 million compared to the same period in the prior year. The increase was primarily driven by higher material and labor costs of $81.8 million and $18.4 million, respectively, associated with increased production activity, partially offset by a decrease in manufacturing overhead costs of $4.7 million.
Previous wording
Services Cost of revenues consists of direct labor, overhead, and materials such as chemicals, gases and consumables. For the three-month period ended March 27, 2026, Services Cost of revenues increased by $4.3 million compared to the same period in the prior year. The increase was primarily driven by a higher service volumes, which resulted in increased labor, overhead, and material costs of $2.4 million, $1.3 million and $0.6 million, respectively.
Current wording
Services Cost of revenues consists of direct labor, overhead, and materials such as chemicals, gases and consumables.
Previous wording
Products gross profit and margin decreased for the three-month period ended March 27, 2026 compared to the same period in the prior year due to an unfavorable product mix and a shift in sales volumes across different geographic regions.
Current wording
Products gross profit and margin increased for the three and six month periods ended June 26, 2026 compared to the same periods in the prior year, due to higher revenue levels, favorable absorption of fixed costs, a favorable product mix, and a shift in sales volumes across different geographic regions.
Previous wording
Services gross profit and gross margin increased for the three-month period ended March 27, 2026 compared to the same period in the prior year, primarily due to higher revenue levels and improved absorption of fixed costs.
Current wording
Services gross profit increased for the three and six month periods ended June 26, 2026 compared to the same periods in the prior year, primarily due to higher revenue levels. Gross margin remained flat for the six-month period, as cost of revenue grew in line with revenue and offset improved absorption of fixed costs. For the three-month period, gross margin decreased slightly, as cost of revenue growth outpaced revenue growth.
Previous wording
Services operating income and operating margin increased for the three-month period ended March 27, 2026 compared to the same period in the prior year, primarily reflecting higher gross profit driven by increased revenue and improved fixed cost absorption while changes in operating expenses were not material.
Current wording
Services operating income and operating margin increased for the three and six month periods ended June 26, 2026 compared to the same periods in the prior year, primarily reflecting higher gross profit driven by increased revenue, with operating expenses not materially different, and the absence of the $73.5 million goodwill impairment charge recorded in the prior period.
Previous wording
Research and development expenses increased for the three-month period ended March 27, 2026 compared to the same period in the prior year, primarily due to higher employee-related costs driven by increased headcount and, to a lesser extent, annual merit increases.
Current wording
Research and development expenses increased for the three and six month periods ended June 26, 2026 compared to the same periods in the prior year, primarily due to higher employee-related compensation costs.
Previous wording
Sales and marketing expenses increased for the three-month period ended March 27, 2026 compared to the same period in the prior year, primarily due to increases across various expense categories, none of which were individually significant.
Current wording
Sales and marketing expenses increased for the three and six month periods ended June 26, 2026 compared to the same periods in the prior year, primarily due to higher employee-related costs.
Previous wording
General and administrative expenses were relatively consistent for the three-month period ended March 27, 2026 compared to the same period in the prior year.
Current wording
Interest income was relatively consistent for the three and six month periods ended June 26, 2026 compared to the same periods in the prior year.
Previous wording
Interest expense decreased for the three-month period ended March 27, 2026 compared to the same period in the prior year, primarily due to lower interest rates and a reduced principal balance.
Current wording
Interest expense decreased for the three and six month periods ended June 26, 2026 compared to the same periods in the prior year, primarily due to lower interest expense following the term loan prepayment, partially offset by higher amortization of debt issuance costs related to the convertible notes.
Previous wording
Other income (expense), net decreased for the three-month period ended March 27, 2026 compared to the same period in the prior year. The prior year period primarily reflected foreign exchange gains, while the current period reflects a loss on extinguishment of debt, partially offset by favorable foreign exchange transaction and remeasurement gains and higher other miscellaneous income.
Current wording
Other income (expense), net improved for the three and six month periods ended June 26, 2026 compared to the same periods in the prior year, primarily due to favorable foreign exchange gains, partially offset by a loss on extinguishment of debt in the current-year six-month period.
Previous wording
The increase in the provision for income taxes for the three-month period ended March 27, 2026 compared to the same period in the prior year is primarily attributable to the impact of a planned distribution of earnings from one of the Company’s foreign subsidiaries in the current year, changes in the geographic mix of worldwide earnings and financial results in jurisdictions which are taxed at different rates, and the impact of losses in jurisdictions with full valuation allowances on deferred tax assets.
Current wording
The increase in the provision for income taxes for the three and six month periods ended June 26, 2026 compared to the same periods in the prior year is primarily attributable to the impact of a distribution of earnings from, and change in ownership of, one of the Company’s foreign subsidiaries in the current year, changes in the geographic mix of worldwide earnings and financial results in jurisdictions which are taxed at different rates, and the impact of losses in jurisdictions with full valuation allowances on deferred tax assets.
Previous wording
The Company recorded a discrete tax expense of $14.8 million in the quarter ended March 27, 2026 due to the Company's determination that certain earnings of one of our subsidiaries in China can no longer be permanently reinvested.
Current wording
The Company recorded a discrete tax expense of $15.1 million in the six months ended June 26, 2026, due to the distribution of earnings from China. The Company recorded a discrete tax expense of $9.6 million in the quarter ended June 26, 2026, due to a change in ownership of one of the Company’s foreign subsidiaries.
Previous wording
Company management continuously evaluates the need for a valuation allowance on its deferred tax assets and, as of March 27, 2026, concluded that a full valuation allowance on its U.S. federal, state and certain of its foreign deferred tax assets remained appropriate.
Current wording
Management continuously evaluates the need for a valuation allowance on its deferred tax assets and, as of June 26, 2026, concluded that a full valuation allowance on its U.S. federal, state and certain of its foreign deferred tax assets remained appropriate.
Previous wording
•For the three-month period ended March 27, 2026, cash used in operating activities was $33.3 million, compared to cash provided by operating activities of $28.2 million for the same period in the prior year. The $61.5 million decrease in net cash provided by operating activities was primarily driven by an unfavorable change in net working capital of $68.6 million and a higher net loss of $12.5 million, partially offset by a $19.6 million increase in non-cash items included in net loss.
Current wording
•For the six-month period ended June 26, 2026, cash used in operating activities was $74.4 million, compared to cash provided by operating activities of $57.4 million for the same period in the prior year. The $131.8 million decrease in net cash provided by operating activities was primarily driven by an unfavorable change in net working capital of $145.0 million and an unfavorable change in non-cash items included in net loss of $146.7 million, partially offset by a $159.9 million improvement in net loss.
Previous wording
•The major contributors to net changes in operating assets and liabilities for the three-month period ended March 27, 2026 were as follows:
Current wording
•The major contributors to net changes in operating assets and liabilities for the six-month period ended June 26, 2026 were as follows:
Previous wording
◦Accounts payable increased by $68.0 million, while accrued compensation and related benefits decreased by $4.0 million and income taxes payable decreased by $2.8 million, primarily reflecting increased production activities and the timing of payments.
Current wording
◦Accounts payable increased by $104.4 million, accrued compensation and related benefits increased by $11.3 million, and other liabilities increased by $13.8 million, primarily reflecting increased production activities and the timing of payments.
Previous wording
◦Accounts receivable increased by $24.0 million, primarily due to the timing of shipments and collections, inventories increased by $91.0 million due to higher production levels, and prepaid and other current assets increased by $7.3 million, primarily due to higher prepaid expenses and deposits.
Current wording
◦Accounts receivable decreased by $0.8 million, primarily due to the timing of shipments and collections. Inventories increased by $238.9 million due to higher production levels. Prepaid and other current assets increased by $13.8 million, primarily due to higher prepaid expenses and deposits.
Previous wording
•Net cash used in investing activities during the three-month period ended March 27, 2026 and March 28, 2025 consisted primarily of $9.6 million and $12.4 million purchases of property, plant and equipment, respectively.
Current wording
•Net cash used in investing activities during the six-month period ended June 26, 2026 and June 27, 2025 consisted primarily of $25.8 million and $29.2 million purchases of property, plant and equipment, respectively.
Previous wording
•Net cash provided by financing activities was $57.6 million for the three-month period ended March 27, 2026, compared to cash used in financing activities of $12.2 million for the same period in the prior year. The increase was primarily driven by $600.0 million of proceeds from the issuance of convertible notes. This was partially offset by principal payments on bank borrowings of $462.0 million, repurchases of common stock of $40.0 million, payments for capped call transactions of $25.1 million, and payments of debt issuance costs of $15.3 million. In the prior year, financing activities primarily reflected lower levels of debt repayments and minimal issuance costs, with no comparable convertible note issuance or share repurchase activity.
Current wording
•Net cash provided by financing activities was $48.5 million for the six-month period ended June 26, 2026, compared to cash used in financing activities of $18.8 million for the same period in the prior year. The increase was primarily driven by $600.0 million of proceeds from the issuance of convertible notes and a $15.0 million drawdown on the revolving credit facility. This was partially offset by principal payments on bank borrowings of $481.5 million, repurchases of common stock of $40.0 million, payments for capped call transactions of $25.1 million, and payments of debt issuance costs of $17.4 million. In the prior year, financing activities primarily reflected lower levels of debt repayments and minimal issuance costs, with no comparable convertible note issuance or share repurchase activity.
Previous wording
We believe we have sufficient capital to fund our working capital needs, satisfy our debt obligations, maintain our existing capital equipment, purchase new capital equipment and make strategic acquisitions from time to time. As of March 27, 2026, we had cash and cash equivalents of $323.5 million compared to $311.8 million as of December 26, 2025. Our cash and cash equivalents, cash generated from operations, and amounts available under our revolving line of credit described below were our principal sources of liquidity as of March 27, 2026.
Current wording
We believe we have sufficient capital to fund our working capital needs, satisfy our debt obligations, maintain our existing capital equipment, purchase new capital equipment and make strategic acquisitions. As of June 26, 2026, we had cash and cash equivalents of $255.9 million compared to $311.8 million as of December 26, 2025. Our cash and cash equivalents, cash generated from operations, and amounts available under our revolving line of credit described below were our principal sources of liquidity as of June 26, 2026.
Previous wording
During the three months ended March 27, 2026, the Company sold accounts receivable totaling $19.0 million under this arrangement.
Current wording
During the six months ended June 26, 2026, the Company sold accounts receivable totaling $49.0 million under this arrangement.
Previous wording
As of March 27, 2026, we have cash of approximately $231.1 million in our foreign subsidiaries. It is not practicable to determine the tax liability that might be incurred if the undistributed earnings of these foreign subsidiaries were to be distributed. It is the Company’s practice and intention to reinvest the earnings of its non-U.S. subsidiaries in those
Current wording
As of June 26, 2026, we have cash of approximately $219.6 million in our foreign subsidiaries. It is not practicable to determine the tax liability that might be incurred if the undistributed earnings of these foreign subsidiaries were to be distributed. It is the Company’s practice and intention to reinvest the earnings of its non-U.S. subsidiaries in those operations, except for certain of its subsidiaries based in Singapore and China. There is no expected Singapore or U.S. tax liability on a distribution of the Singapore earnings. However, the Company has accrued taxes on a portion of the undistributed earnings of the China subsidiary in its financial statements as of June 26, 2026.
Previous wording
On April 23, 2026, the Company entered into the Tenth Amendment to its Credit Agreement, which increased the aggregate revolving credit commitment from $150.0 million to $250.0 million and extended the maturity date to April 23, 2031. As of March 27, 2026, there were no borrowings outstanding under the revolving credit facility, and available borrowing capacity was $145.9 million, net of $4.1 million of outstanding letters of credit. The Company was in compliance with all financial covenants under the Amended Credit Agreement as of March 27, 2026.
Current wording
On April 23, 2026, the Company entered into the Tenth Amendment to its Credit Agreement, which increased the aggregate revolving credit commitment from $150.0 million to $250.0 million and extended the maturity date to April 23, 2031. As of June 26, 2026, the Company had $15.0 million of borrowings outstanding under the revolving credit facility, and available borrowing capacity was $230.9 million, net of outstanding letters of credit and borrowings. The Company was in compliance with all financial covenants under the Amended Credit Agreement as of June 26, 2026.
Previous wording
The Company also maintains credit facilities in Czechia and Israel, which provide for revolving credit capacity of up to 7.0 million euros (approximately $8.1 million) and $5.0 million, respectively. As of March 27, 2026, there were no borrowings outstanding under these facilities, and the full amounts remained available.
Current wording
The Company also maintains credit facilities in Czechia and Israel, which provide for revolving credit capacity of up to 7.0 million euros (approximately $8.0 million) and $5.0 million, respectively. As of June 26, 2026, there were no borrowings outstanding under either facility; however, $2.1 million of the Czechia facility was utilized for outstanding bank guarantees.
Previous wording
As of March 27, 2026, the Company had $145.9 million, $6.4 million and $5.0 million available to draw from its credit facilities in the U.S., Czechia, and Israel, respectively.
Current wording
As of June 26, 2026, the Company had $230.9 million, $5.9 million and $5.0 million available to draw from its credit facilities in the U.S., Czechia, and Israel, respectively.
Previous wording
Capital expenditures were $9.6 million during the three months ended March 27, 2026 and were primarily attributable to the capital invested in our manufacturing and service facilities worldwide. Our anticipated capital expenditures for the remainder of 2026 are expected to be financed primarily from our cash flow generated from operations and cash on hand.
Current wording
Capital expenditures were $25.8 million during the six months ended June 26, 2026 and were primarily attributable to the capital invested in our manufacturing and service facilities worldwide. Our anticipated capital expenditures for the remainder of 2026 are expected to be financed primarily from our cash flow generated from operations and cash on hand.
Previous wording
The Company had commitments to various third parties to purchase inventories totaling approximately $721.3 million as of March 27, 2026.
Current wording
The Company had commitments to various third parties to purchase inventories totaling approximately $971.1 million as of June 26, 2026.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Products cost of revenue consists of purchased materials, direct labor and manufacturing overhead.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
29 - operations, except for certain of its subsidiaries based in Singapore and China. There is no expected Singapore or U.S. tax liability on a distribution of the Singapore earnings. However, the Company has accrued taxes on a portion of the undistributed earnings of the China subsidiary in its financial statements as of March 27, 2026.