BENCHMARK ELECTRONICS INC

Previous wording

This Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts and may include words such as “anticipate,” “believe,” “intend,” “plan,” “project,” “forecast,” “strategy,” “position,” “continue,” “estimate,” “expect,” “may,” “will,” “could,” “predict,” and similar expressions of the negative or other variations thereof. In particular, statements, expressed or implied, concerning the Company's outlook and guidance for quarterly periods or fiscal year 2026 results, future operating results or margins, the ability to generate sales and income or cash flow, expected revenue mix, the Company’s business strategy and strategic initiatives, the Company’s expectations regarding enterprise AI opportunities, anticipated growth in bookings, and repurchases of shares of its common stock, the Company’s expectations regarding restructuring activity and charges, stock-based compensation expense, amortization of intangibles, award or extension of any tax incentives and capital expenditures, the Company’s intentions concerning the payment of dividends, the Company’s expectations regarding the impact of inflation, tariffs and trade policies, and the Company’s positions and strategies with respect to ongoing or threatened litigation and expected outcomes, among others, are forward-looking statements. Although the Company believes these statements are based on and derived from reasonable assumptions, they involve risks, uncertainties and assumptions, that are beyond the Company’s ability to control or predict, relating to operations, markets and the business environment generally, including those discussed under Part I, Item 1A of the 2025 10-K and in any of the Company’s subsequent reports filed with the Securities and Exchange Commission (the SEC). Risks and uncertainties relating to the possibility of customer demand fluctuations, supply chain constraints, continuing inflationary pressures, the effects of foreign currency fluctuations and high interest rates, geopolitical uncertainties including continuing hostilities and tensions in the Middle East and elsewhere, trade restrictions and sanctions, tariffs and retaliatory countermeasures, the ability to utilize the Company’s manufacturing facilities at sufficient levels to cover its fixed operating costs, or write-downs or write-offs of obsolete or unsold inventory, may have resulting impacts on the Company’s business, financial condition, results of operations, and the Company’s ability (or inability) to execute on its plans. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes, including the future results of the Company’s operations, may vary materially from those ind…

Excerpt shortened here; the source contains the full paragraph.

Current wording

This Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts and may include words such as “anticipate,” “believe,” “intend,” “plan,” “project,” “forecast,” “strategy,” “position,” “continue,” “estimate,” “expect,” “may,” “will,” “could,” “predict,” and similar expressions of the negative or other variations thereof. In particular, statements, expressed or implied, concerning the Company's outlook and guidance for quarterly periods or fiscal year 2026 results, future operating results or margins, the ability to generate sales and income or cash flow, expected revenue mix, the Company’s business strategy and strategic initiatives, the Company’s expectations regarding enterprise artificial intelligence (AI) opportunities, anticipated growth in bookings, and repurchases of shares of its common stock, the Company’s expectations regarding restructuring activity and charges, stock-based compensation expense, amortization of intangibles, award or extension of any tax incentives and capital expenditures, the Company’s intentions concerning the payment of dividends, the Company’s expectations regarding the impact of inflation, tariffs and trade policies, and the Company’s positions and strategies with respect to ongoing or threatened litigation and expected outcomes, among others, are forward-looking statements. Although the Company believes these statements are based on and derived from reasonable assumptions, they involve risks, uncertainties and assumptions, that are beyond the Company’s ability to control or predict, relating to operations, markets and the business environment generally, including those discussed under Part I, Item 1A of the 2025 10-K and in any of the Company’s subsequent reports filed with the Securities and Exchange Commission (the SEC). Risks and uncertainties relating to the possibility of customer demand fluctuations, supply chain constraints, continuing inflationary pressures, the effects of foreign currency fluctuations and high interest rates, geopolitical uncertainties including continuing hostilities and tensions in the Middle East and elsewhere, trade restrictions and sanctions, tariffs and retaliatory countermeasures, the ability to utilize the Company’s manufacturing facilities at sufficient levels to cover its fixed operating costs, or write-downs or write-offs of obsolete or unsold inventory including obsolete or unsold inventory that is the subject of current litigation as described in this Report, may have resulting impacts on the Company’s business, financial condition, results of operations, and the Company’s ability (or inability) to execute on its plans. Should one or more of these risks or uncertainties materialize, or should underlying ass…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Design & Engineering Services include turnkey product design, designing for manufacturability, design optimization for our factory processes and supply chain, test development, concurrent and sustaining engineering, and regulatory services. Our engineering services may be for systems, subsystems, printed circuit boards and assemblies, and components. We have the flexibility and capability to engage anywhere in the design process flow. We provide these services across all the industries we serve. We often partner with our customers to provide turnkey product realization from requirements through the launch to volume production in our factories. We have also developed differentiated capabilities in radio frequency (RF) and optics.

Current wording

Design & Engineering Services include turnkey product design, designing for manufacturability, design optimization for our factory processes and supply chain, test development, concurrent and sustaining engineering, and regulatory services. Our engineering services may be for systems, subsystems, printed circuit boards and assemblies, and components. We have the flexibility and capability to engage anywhere in the design process flow. We provide these services across all the industries we serve. We often partner with our customers to provide turnkey product realization from requirements through the launch to volume production in our factories. We have also developed differentiated capabilities in radio frequency (RF) and optics. The need to improve size, weight and power (SWaP) to accommodate high frequency electronics communications is important to customers in the A&D, medical, and AC&C markets.

Previous wording

A strong focus on human capital—encompassing the talent we attract, develop, and retain—is essential to sustaining our competitiveness and long-term success. Our people-first culture is grounded in our five core values: acting with integrity, valuing inclusion, commitment to customers, promoting ingenuity, and demonstrating genuine caring for one another, our customers, and the communities we serve. We are committed to fostering an environment where our team members feel engaged, valued, and empowered to thrive, recognizing that inclusion and diverse perspectives drive innovation, strengthen decision-making, and enhance overall performance. Our approach is centered on delivering exceptional value to our customers while achieving operational and financial performance aligned with our strategic objectives. Through ongoing employee engagement and customer listening strategies, we are committed to continually improving our practices, understanding that we serve our customers best by supporting our people first. We invest in building a forward-thinking, high-performing workforce by developing leaders at all levels and supporting the personal growth and career aspirations of our employees. These efforts are demonstrated through our executive development program, CLIMB; our general manager readiness program, ASCEND; and our employee mentorship program, Thrive.

Current wording

A strong focus on human capital—encompassing the talent we attract, develop, and retain—is essential to sustaining our competitiveness and long-term success. Our people-first culture is grounded in our five core values: acting with integrity, valuing inclusion, commitment to customers, promoting ingenuity, and demonstrating genuine caring for one another, our customers, and the communities we serve. We are committed to fostering an environment where our team members feel engaged, valued, and empowered to thrive, recognizing that inclusion and diverse perspectives drive innovation, strengthen decision-making, and enhance overall performance. Our approach is centered on delivering exceptional value to our customers while achieving operational and financial performance aligned with our strategic objectives. Through ongoing employee engagement and customer listening strategies, we are committed to continually improving our practices, understanding that we serve our customers best by supporting our people first. We invest in building a forward-thinking, high-performing workforce by developing leaders at all levels and supporting the personal growth and career aspirations of our employees. These efforts are demonstrated through our executive development program, CLIMB; our general manager readiness program, ASCEND and self-guided leadership journeys for aspiring, new, mid-level, and senior-level leaders.

Previous wording

Our sales depend on the success of our customers, some of which operate in businesses associated with rapid technological change and consequent product obsolescence. Developments adverse to our major customers or their products, including conditions affecting the availability of electronic components or the failure of a major customer to pay for components or services, can impact our ability to fulfill customer demand. A substantial percentage of our sales are made to a small number of customers, and the loss of a major customer, if not replaced, would adversely affect us. Sales to our ten largest customers represented 50% and 53% of our total sales during the six months ended June 30, 2026 and 2025, respectively.

Current wording

Our sales depend on the success of our customers, some of which operate in businesses associated with rapid technological change and consequent product obsolescence. Developments adverse to our major customers or their products, including conditions affecting the availability of electronic components or the failure of a major customer to pay for components or services, can impact our ability to fulfill customer demand. A substantial percentage of our sales are made to a small number of customers, and the loss of a major customer, if not replaced, would adversely affect us. Sales to our ten largest customers represented 50% and 53% of our total sales during the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

We experience fluctuations in gross profit from period to period. Different programs contribute different gross profits depending on the type of services involved, location of production, size of the program, complexity of the product and level of material costs associated with the various products. Moreover, new programs can contribute relatively less to our gross profit in their early stages when manufacturing volumes are usually lower, resulting in inefficiencies and unabsorbed manufacturing overhead costs. During periods of low production volume, we generally have unabsorbed manufacturing overhead costs and reduced gross profit. Gross profit can also be impacted by higher costs associated with other situations, such as supply chain constraints. This includes supply chain premiums for excess component costs paid to secure available supply resulting in revenue with cost recovery only with no margin. In addition, a number of our new program ramps require incremental investment during the launch and ramp phase, which can exert downward pressure on our gross profit.

Current wording

We experience fluctuations in gross profit margin from period to period. Different programs contribute different gross profit margins depending on the type of services involved, location of production, size of the program, complexity of the product and level of material costs associated with the various products. Moreover, new programs can contribute relatively less to our gross profit margin in their early stages due to lower manufacturing volumes, which can result in inefficiencies and unabsorbed manufacturing overhead costs, as well as incremental investments required during the launch and ramp phases. During periods of low production volume, we generally have unabsorbed manufacturing overhead costs and reduced gross profit margin. Gross profit margin can also be impacted by higher costs associated with other situations, such as supply chain constraints. This includes supply chain premiums for excess component costs paid to secure available supply resulting in revenue with cost recovery only with no margin.

Previous wording

On February 20, 2026, the U.S. Supreme Court issued a ruling invalidating tariffs imposed under the International Emergency Economic Powers Act, including, among others, tariffs on imports of certain Canadian, Chinese, and Mexican goods, a universal baseline tariff on imports from most countries, and reciprocal tariffs on select countries. In March 2026, the U.S. Court of International Trade further ruled that importers that paid such tariffs are entitled to refunds. During the second quarter of 2026, U.S. Customs and Border Protection launched a process to administer IEEPA tariff refund claims, and the Company submitted claims for qualifying IEEPA tariff refunds. We continue to monitor developments related to tariffs and trade policies and evaluate the potential impact on our results of operations and financial condition. For the three and six months ended June 30, 2026, the Company recorded in the consolidated statement of income tariff refunds of $11.8 million as a reduction to cost of sales, reflecting the recovery of previously incurred tariff costs, and recorded a corresponding reduction to sales for amounts reimbursable to customers. For additional information, refer to Part I, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Current wording

On February 20, 2026, the U.S. Supreme Court issued a ruling invalidating tariffs imposed under the International Emergency Economic Powers Act (IEEPA), including, among others, tariffs on imports of certain Canadian, Chinese, and Mexican goods, a universal baseline tariff on imports from most countries, and reciprocal tariffs on select countries. In March 2026, the U.S. Court of International Trade further ruled that importers that paid such tariffs are entitled to refunds. During the second quarter of 2026, U.S. Customs and Border Protection launched a process to administer IEEPA tariff refund claims, and the Company submitted claims for qualifying IEEPA tariff refunds. We continue to monitor developments related to tariffs and trade policies and evaluate the potential impact on our results of operations and financial condition. For the nine months ended September 30, 2026, the Company recorded in the consolidated statement of income tariff refunds of $11.8 million as a reduction to cost of sales, reflecting the recovery of previously incurred tariff costs, and recorded a corresponding reduction to sales for amounts reimbursable to customers. For additional information, refer to Part I, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Previous wording

Aerospace and Defense. Sales for the three months ended June 30, 2026 decreased 12% to $111.2 million from $126.3 million for the three months ended June 30, 2025. Sales for the six months ended June 30, 2026 decreased 7% to $231.0 million from $248.1 million for the six months ended June 30, 2025. The decreases were primarily due to certain programs going end-of-life, partially offset by new program wins.

Current wording

Aerospace and Defense. Sales for the three months ended September 30, 2026 decreased 1% to $127.9 million from $128.7 million for the three months ended September 30, 2025. Sales for the nine months ended September 30, 2026 decreased 5% to $358.9 million from $376.8 million for the nine months ended September 30, 2025. The decreases primarily reflect the wind-down of certain programs, partially offset by new program wins.

Previous wording

Medical. Sales for the three months ended June 30, 2026 increased 22% to $133.6 million from $109.6 million for the three months ended June 30, 2025. Sales for the six months ended June 30, 2026 increased 23% to $262.0 million from $213.2 million for the six months ended June 30, 2025. The increases were primarily due to program ramps.

Current wording

Medical. Sales for the three months ended September 30, 2026 increased 9% to $138.2 million from $126.3 million for the three months ended September 30, 2025. Sales for the nine months ended September 30, 2026 increased 18% to $400.2 million from $339.5 million for the nine months ended September 30, 2025. The increases were primarily due to program ramps.

Previous wording

Advanced Computing and Communications. Sales for the three months ended June 30, 2026 increased 71% to $127.1 million from $74.5 million for the three months ended June 30, 2025. Sales for the six months ended June 30, 2026 increased 56% to $232.2 million from $149.0 million for the six months ended June 30, 2025. The increases were primarily due to new program wins in high performance computing, driven primarily by customer investments in data center infrastructure.

Current wording

Advanced Computing and Communications. Sales for the three months ended September 30, 2026 increased 50% to $132.5 million from $88.2 million for the three months ended September 30, 2025. Sales for the nine months ended September 30, 2026 increased 54% to $364.7 million from $237.2 million for the nine months ended September 30, 2025. The increases were primarily due to program wins in the high performance computing market, supported by continued investment in data center infrastructure.

Previous wording

Our international operations are subject to the risks of doing business abroad. See Part I, Item 1A of our 2025 10-K for factors pertaining to our international sales, fluctuations in foreign currency exchange rates and a discussion of potential adverse effects in operating results associated with the risks of doing business abroad. During the three months ended June 30, 2026 and 2025, 63% and 64%, respectively, of our sales were from international operations.

Current wording

Our international operations are subject to the risks of doing business abroad. See Part I, Item 1A of our 2025 10-K for factors pertaining to our international sales, fluctuations in foreign currency exchange rates and a discussion of potential adverse effects in operating results associated with the risks of doing business abroad. During the three months ended September 30, 2026 and 2025, 66% and 56%, respectively, of our sales were from international operations. During the nine months ended September 30, 2026 and 2025, 64% and 56%, respectively, of our sales were from international operations.

Previous wording

Americas. Sales for the three months ended June 30, 2026 increased 15% to $340.5 million from $295.2 million for the three months ended June 30, 2025. Sales for the six months ended June 30, 2026 increased 12% to $651.8 million from $579.5 million for the six months ended June 30, 2025. The increases were primarily due to higher demand in AC&C, Medical, and Industrial sectors.

Current wording

Americas. Sales for the three months ended September 30, 2026 increased 20% to $369.4 million from $309.0 million for the three months ended September 30, 2025. Sales for the nine months ended September 30, 2026 increased 15% to $1,021.2 million from $888.5 million for the nine months ended September 30, 2025. The increases were primarily due to higher demand in AC&C, Medical, and Industrial sectors.

Previous wording

Asia. Sales for the three months ended June 30, 2026 increased 20% to $345.5 million from $287.1 million for the three months ended June 30, 2025. Sales for the six months ended June 30, 2026 increased 14% to $648.6 million from $571.1 million for the six months ended June 30, 2025. The increases were primarily due to an increase in demand for Industrial, AC&C, Semi-Cap, and A&D sectors.

Current wording

Asia. Sales for the three months ended September 30, 2026 increased 22% to $375.3 million from $307.3 million for the three months ended September 30, 2025. Sales for the nine months ended September 30, 2026 increased 17% to $1,023.9 million from $878.4 million for the nine months ended September 30, 2025. The increases were primarily due to an increase in demand for Industrial, AC&C, and Semi-Cap sectors.

Previous wording

Europe. Sales for the three months ended June 30, 2026 increased 10% to $91.5 million from $83.4 million for the three months ended June 30, 2025. Sales for the six months ended June 30, 2026 increased 3% to $174.8 million from $169.7 million for the six months ended June 30, 2025. The increases were primarily due to an increase in demand for Semi-Cap and Medical sectors, partially offset by lower demand in Industrial and A&D sectors.

Current wording

Europe. Sales for the three months ended September 30, 2026 increased 4% to $89.4 million from $86.3 million for the three months ended September 30, 2025. Sales for the nine months ended September 30, 2026 increased 3% to $264.2 million from $256.0 million for the nine months ended September 30, 2025. The increases were primarily due to an increase in demand for Semi-Cap and Medical sectors, partially offset by lower demand in the Industrial sector.

Previous wording

Gross profit for the six months ended June 30, 2026 increased 15% to $147.6 million from $128.0 million for the six months ended June 30, 2025. Gross profit margin increased to 10.3% for the six months ended June 30, 2026 from 10.0% for the six months ended June 30, 2025. The increases were primarily due to increased throughput across operations, resulting in improved leverage of fixed manufacturing costs and a more favorable mix of products sold.

Current wording

Gross profit for the three months ended September 30, 2026 increased 24% to $84.4 million from $67.9 million for the three months ended September 30, 2025. Gross profit margin increased to 10.4% for the three months ended September 30, 2026 from 10.0% for the three months ended September 30, 2025. The increases were primarily due to stronger revenue, resulting in enhanced manufacturing cost leverage, and a higher-margin product mix.

Previous wording

Gross profit for the three months ended June 30, 2026 increased 21% to $78.4 million from $64.8 million for the three months ended June 30, 2025. Gross profit margin increased to 10.4% for the three months ended June 30, 2026 from 10.1% for the three months ended June 30, 2025. The increases were primarily due to higher sales, which resulted in improved absorption of fixed manufacturing costs, as well as a more favorable mix of products sold.

Current wording

Gross profit for the nine months ended September 30, 2026 increased 18% to $232.1 million from $195.9 million for the nine months ended September 30, 2025. Gross profit margin increased to 10.3% for the nine months ended September 30, 2026 from 10.0% for the nine months ended September 30, 2025. The increases were primarily due to higher production volumes due to increased sales, which resulted in improved absorption of fixed manufacturing costs, along with a more favorable mix of products sold.

Previous wording

Income from operations for the three months ended June 30, 2026 increased 48% to $30.3 million from $20.5 million in the three months ended June 30, 2025. Income from operations for the six months ended June 30, 2026 increased 62% to $52.1 million from $32.2 million in the six months ended June 30, 2025. The increases were primarily due to higher sales as well as decreased restructuring expenses and other costs, as the settlement of a tax assessment in the Americas was recorded during the six months ended June 30, 2025.

Current wording

Income from operations for the three months ended September 30, 2026 increased 30% to $30.7 million from $23.7 million in the three months ended September 30, 2025. Income from operations for the nine months ended September 30, 2026 increased 48% to $82.8 million from $55.9 million in the nine months ended September 30, 2025. The increases were primarily due to higher sales and gross profit as well as decreased restructuring expenses and other costs, as a charge relating to the settlement of a tax assessment in the Americas was recorded during the nine months ended September 30, 2025, partially offset by increased selling, general and administrative (SG&A) expenses.

Previous wording

Americas. Income from operations for the three months ended June 30, 2026 increased 81% to $19.5 million from $10.8 million for the three months ended June 30, 2025. Income from operations for the six months ended June 30, 2026 increased 331% to $27.4 million from $6.3 million for the six months ended June 30, 2025. The increases were primarily due to higher sales as well as decreased restructuring expenses and other costs, as the settlement of a tax assessment in the Americas was recorded during the six months ended June 30, 2025.

Current wording

Americas. Income from operations for the three months ended September 30, 2026 increased 123% to $23.9 million from $10.7 million for the three months ended September 30, 2025. Income from operations for the nine months ended September 30, 2026 increased 201% to $51.3 million from $17.0 million for the nine months ended September 30, 2025. The increases were primarily due to higher sales and lower restructuring charges and other costs, as a charge relating to the settlement of a tax assessment in the Americas was recorded during the nine months ended September 30, 2025.

Previous wording

SG&A expenses increased to $46.1 million for the three months ended June 30, 2026 from $40.6 million for the three months ended June 30, 2025. SG&A expenses increased to $88.5 million for the six months ended June 30, 2026 from $79.4 million for the six months ended June 30, 2025. The increases were primarily due to higher variable compensation.

Current wording

SG&A expenses increased to $50.4 million for the three months ended September 30, 2026 from $41.5 million for the three months ended September 30, 2025. SG&A expenses increased to $138.9 million for the nine months ended September 30, 2026 from $120.9 million for the nine months ended September 30, 2025. The increases were primarily driven by higher variable compensation and stock-based compensation expense.

Previous wording

Amortization of intangible assets was $1.2 million for both the three months ended June 30, 2026 and 2025. Amortization of intangible assets was $2.4 for both the six months ended June 30, 2026 and 2025.

Current wording

Amortization of intangible assets was $1.2 million for both the three months ended September 30, 2026 and 2025. Amortization of intangible assets was $3.6 million for both the nine months ended September 30, 2026 and 2025.

Previous wording

During the three and six months ended June 30, 2026, we recognized $1.1 million and $4.9 million of restructuring charges and other costs which primarily related to a planned closure of our site in Phoenix, Arizona and other smaller activities involving capacity reductions and reductions in workforce in certain facilities across various regions. Phoenix, Arizona operations ceased during the second quarter of 2026 and all related restructuring activity is expected to be substantially complete in 2026. Additionally, the Company recorded a $0.3 million net recovery related to the settlement of tax assessments in the Americas.

Current wording

During the three and nine months ended September 30, 2026, we recognized $2.2 million and $7.0 million of restructuring charges which primarily related to a planned closure of our site in Phoenix, Arizona and other smaller activities involving capacity reductions and reductions in workforce in certain facilities across various regions. Phoenix, Arizona operations ceased during the second quarter of 2026 and all related restructuring activity is expected to be substantially complete in 2026. Additionally, the Company recorded a $0.3 million net recovery related to the settlement of tax assessments in the Americas for the nine months ended September 30, 2026.

Previous wording

During the three and six months ended June 30, 2025, we recognized $1.9 million and $3.3 million restructuring charges and other costs primarily due to capacity and workforce reductions at our sites in the Americas. Additionally, the Company incurred $0.6 million and $10.7 million of settlement costs related to a tax assessment in the Americas for the three and six months ended June 30, 2025, respectively.

Current wording

During the three and nine months ended September 30, 2025, we recognized $1.2 million and $4.5 million of restructuring charges primarily related to closures of our site in Fremont, California and our prior facility in Guadalajara, Mexico in the Americas, the exit of a business in the Americas, and other smaller activities involving capacity reductions and reductions in workforce in certain facilities across various regions. Additionally, the Company incurred $0.3 million and $11.0 million of settlement costs related to a tax assessment in the Americas for the three and nine months ended September 30, 2025, respectively.

Previous wording

Interest expense decreased to $3.8 million for the three months ended June 30, 2026 from $6.3 million for the three months ended June 30, 2025. Interest expense decreased to $7.4 million for the six months ended June 30, 2026 from $11.6 million for the six months ended June 30, 2025. The decreases were primarily due to decreased borrowings and a lower interest rate environment.

Current wording

Interest expense decreased to $3.4 million for the three months ended September 30, 2026 from $4.4 million for the three months ended September 30, 2025. Interest expense decreased to $10.8 million for the nine months ended September 30, 2026 from $16.1 million for the nine months ended September 30, 2025. The decreases were primarily due to decreased borrowings and lower short-term borrowing rates applicable to the Credit Agreement.

Previous wording

Interest income decreased to $2.0 million for the three months ended June 30, 2026 from $3.1 million for the three months ended June 30, 2025. Interest income decreased to $3.9 million for the six months ended June 30, 2026 from $5.9 million for the six months ended June 30, 2025. The decreases were primarily due to a lower interest environment and lower cash balances in interest-bearing accounts.

Current wording

Interest income was $2.0 million for both the three months ended September 30, 2026 and 2025. Interest income decreased to $5.8 million for the nine months ended September 30, 2026 from $7.8 million for the nine months ended September 30, 2025 primarily due to lower short-term interest rates earned on cash balances and lower cash balances in interest-bearing accounts.

Previous wording

Other income (expense), net increased to income of $0.2 million for the three months ended June 30, 2026 from expense of $0.7 million for the three months ended June 30, 2025. Other income (expense), net was flat at expense of $1.5 million for the six months ended June 30, 2026 and 2025. The increase for the three months ended June 30, 2026 was primarily due to higher foreign currency exchange gains.

Current wording

Other expense, net increased to $2.4 million for the three months ended September 30, 2026 from $0.6 million for the three months ended September 30, 2025. Other expense, net increased to $3.8 million for the nine months ended September 30, 2026 from $2.1 million for the nine months ended September 30, 2025. The increases were primarily due to higher foreign currency exchange losses.

Previous wording

Income tax expense was $8.8 million for the three months ended June 30, 2026, resulting in an effective tax rate of 30.8%, compared with income tax expense of $15.6 million and an effective tax rate of 94.1% for the three months ended June 30, 2025. Income tax expense was $14.2 million for the six months ended June 30, 2026, resulting in an effective tax rate of 30.2%, compared with income tax expense of $20.4 million and an effective tax rate of 81.5% for the six months ended June 30, 2025. The decrease in the effective tax rate for the three and six months ended June 30, 2026 compared to the respective prior year periods was primarily attributable to a $10.4 million discrete tax expense recorded during the three months ended June 30, 2025 related to foreign withholding taxes on repatriated dividends and recognition of deferred tax liabilities on unremitted earnings in China.

Current wording

Income tax expense was $9.7 million for the three months ended September 30, 2026, resulting in an effective tax rate of 36.1%, compared with income tax expense of $6.3 million and an effective tax rate of 30.7% for the three months ended September 30, 2025. Income tax expense was $23.9 million for the nine months ended September 30, 2026, resulting in an effective tax rate of 32.4%, compared with income tax expense of $26.7 million and an effective tax rate of 58.6% for the nine months ended September 30, 2025. The effective tax rates were primarily impacted by losses incurred in certain jurisdictions for which no tax benefit was recognized and the geographic mix of earnings among the jurisdictions in which the Company operates. The 2026 effective tax rates were also negatively impacted by the Organization for Economic Co-operation and Development (OECD) Pillar Two Global Minimum Tax. These impacts were partially offset by tax incentives available in certain foreign jurisdictions. The decrease in the effective tax rate for the nine months ended September 30, 2026 compared to the prior-year period was also attributable to discrete tax expense recorded in the second quarter of 2025 related to foreign withholding taxes on repatriated dividends and the recognition of deferred tax liabilities associated with unremitted earnings in China.

Previous wording

We reported net income of $19.9 million, or $0.55 per diluted share, for the three months ended June 30, 2026, compared with net income of $1.0 million, or $0.03 per diluted share, for the three months ended June 30, 2025. We reported net income of $32.9 million, or $0.91 per diluted share, for the six months ended June 30, 2026, compared with net income of $4.6 million, or $0.13 per diluted share, for the six months ended June 30, 2025. The increases were primarily due to the items discussed above.

Current wording

We reported net income of $17.1 million, or $0.47 per diluted share, for the three months ended September 30, 2026, compared with net income of $14.3 million, or $0.39 per diluted share, for the three months ended September 30, 2025. We reported net income of $50.1 million, or $1.38 per diluted share, for the nine months ended September 30, 2026, compared with net income of $18.9 million, or $0.52 per diluted share, for the nine months ended September 30, 2025. The increases were primarily due to the items discussed above.

Previous wording

We have historically financed our organic growth and operations through funds generated from operations and borrowings under our Credit Agreement (as defined below), consisting of a $150 million term loan facility and a $550 million revolving credit facility, both with a maturity date of June 27, 2030. Cash, cash equivalents and restricted cash totaled $315.2 million as of June 30, 2026, which included $311.0 million held outside the United States in various foreign subsidiaries.

Current wording

We have historically financed our organic growth and operations through funds generated from operations and borrowings under our borrowing facilities, consisting of a $150 million term loan facility, a $550 million revolving credit facility, and a $45 million revolving credit facility through our Malaysian subsidiary, each with a maturity date of June 27, 2030. Cash, cash equivalents and restricted cash totaled $290.7 million as of September 30, 2026, which included $255.8 million held outside the United States in various foreign subsidiaries.

Previous wording

Management believes that our existing cash balances, funds generated from operations, and borrowing availability under our revolving credit facility will be sufficient to permit us to meet our liquidity requirements over the next 12 months. Management further believes that our ongoing cash flows from operations and any borrowings we may incur under our revolving credit facility will enable us to meet operating cash requirements in future years. From time to time, we may pursue strategic opportunities, including acquisitions, or experience changes in working capital or capital investment requirements, which could increase our capital needs and may result in our need to increase available borrowings under our Credit Agreement or access public or private debt and equity markets. There can be no assurance, however, that we would be successful in raising additional debt or equity on acceptable terms.

Current wording

Management believes that our existing cash balances, funds generated from operations, and borrowing availability under our revolving credit facilities will be sufficient to permit us to meet our liquidity requirements over the next 12 months. Management further believes that our ongoing cash flows from operations and any borrowings we may incur under our revolving credit facilities will enable us to meet operating cash requirements in future years. From time to time, we may pursue strategic opportunities, including acquisitions, or experience changes in working capital or capital investment requirements, which could increase our capital needs and may result in our need to increase available borrowings under our Credit Agreement or access public or private debt and equity markets. There can be no assurance, however, that we would be successful in raising additional debt or equity on acceptable terms.

Previous wording

Cash provided from operating activities was $81.7 million during the six months ended June 30, 2026, and primarily consisted of $32.9 million of net income, adjusted for $23.9 million of depreciation and amortization, $11.6 million of stock-based compensation expense, a $150.5 million increase in accounts payable, an $8.8 million increase in advance payments from customers, and a $6.4 million increase in accrued liabilities partially offset by a $62.7 million increase in inventories, a $61.9 million increase in accounts receivable, a $13.9 million increase in prepaid expenses and other assets, and a $13.6 million increase in contract assets. Working capital was $0.8 billion as of June 30, 2026.

Current wording

Cash provided by operating activities was $111.6 million during the nine months ended September 30, 2026, and primarily consisted of $50.1 million of net income, adjusted for $36.0 million of depreciation and amortization, $21.2 million of stock-based compensation expense, a $260.5 million increase in accounts payable, a $12.6 million increase in accrued liabilities, and an $8.2 million increase in advance payments from customers, partially offset by a $152.3 million increase in inventories, a $46.0 million increase in accounts receivable, a $38.7 million increase in contract assets, a $24.4 million increase in prepaid expenses and other assets, and a $15.6 million increase to income taxes. Working capital was $0.8 billion as of September 30, 2026.

Previous wording

Cash used in investing activities was $29.1 million during the six months ended June 30, 2026 primarily due to capital expenditures for property, plant and equipment of $28.8 million and purchased software of $2.4 million partially offset by proceeds from the sale of assets held for sale of $2.3 million. The purchases of property, plant and equipment were primarily for buildings and machinery and equipment in the Americas and Asia.

Current wording

Cash used in investing activities was $44.4 million during the nine months ended September 30, 2026 primarily due to capital expenditures for property, plant and equipment of $43.3 million, and purchased software of $3.4 million, partially offset by proceeds from the sale of assets held for sale of $2.3 million. The purchases of property, plant and equipment were primarily for buildings and machinery and equipment in the Americas and Asia.

Previous wording

Cash used in financing activities was $56.2 million during the six months ended June 30, 2026. Borrowings under the Credit Agreement were $271.0 million and principal payments under the Credit Agreement were $300.9 million. In addition, during the six months ended June 30, 2026, we paid $12.2 million for dividends, $8.3 million for employee taxes in connection with the settlement of stock-based awards, and $5.8 million for share repurchases.

Current wording

Cash used in financing activities was $94.8 million during the nine months ended September 30, 2026. Borrowings under our borrowing facilities were $457.0 million and principal payments under our borrowing facilities were $509.8 million. In addition, during the nine months ended September 30, 2026, we paid $18.3 million for dividends, $14.3 million for share repurchases, and $9.1 million for employee taxes in connection with the settlement of stock-based awards.

Previous wording

On June 27, 2025, the Company entered into a $700 million second amended and restated credit agreement (the Credit Agreement) by and among the Company, certain of its subsidiaries, the lenders party thereto and Bank of America, N.A., as Administrative Agent, Swingline Lender and an L/C Issuer. The Credit Agreement is comprised of a five-year $550 million revolving credit facility and a five-year $150 million term loan facility, both with a maturity date of June 27, 2030. As of June 30, 2026, we had $146.3 million in borrowings outstanding under the term loan facility, $37.0 million outstanding under our revolving credit facility and $4.0 million in letters of credit outstanding under our revolving credit facility. See Note 5 to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Report for more information regarding the terms of our Credit Agreement.

Current wording

On June 27, 2025, the Company entered into a $700 million second amended and restated credit agreement (the Credit Agreement) by and among the Company, certain of its subsidiaries, the lenders party thereto and Bank of America, N.A., as Administrative Agent, Swingline Lender and an L/C Issuer. The Credit Agreement is comprised of a five-year $550 million revolving credit facility (the Revolving Credit Facility) and a five-year $150 million term loan facility (the Term Loan Facility), both with a maturity date of June 27, 2030. On September 2, 2026, the Company’s Malaysian subsidiary entered into a separate credit agreement for a $45 million revolving credit facility (the Malaysia Facility and, together with the Revolving Credit Facility, the Revolving Borrowing Facilities) that matures on June 27, 2030. As of September 30, 2026, we had $145.3 million in borrowings outstanding under the Term Loan Facility, $15.0 million in borrowings outstanding under the Malaysia Facility, and $4.0 million in letters of credit outstanding under the Revolving Credit Facility. See Note 5 to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Report for more information regarding the terms of our borrowing facilities.

Previous wording

As of June 30, 2026, we had $509.0 million available for borrowings under the Credit Agreement, subject to compliance with financial covenants as to interest coverage and debt leverage, in addition to other debt covenant restrictions. During the next 12 months, we believe our capital expenditures will approximate $80 million to $90 million, principally for machinery and equipment to help increase our production capacity to support anticipated revenue growth and our ongoing business around the globe.

Current wording

As of September 30, 2026, the Company had an aggregate of $576.0 million available for future borrowings under the Revolving Borrowing Facilities subject to compliance with financial covenants as to interest coverage and debt leverage, in addition to other debt covenant restrictions, as applicable. During the next 12 months, we believe our capital expenditures will approximate $85 million to $90 million, principally for machinery and equipment to help increase our production capacity to support anticipated revenue growth and our ongoing business around the globe.

Previous wording

During the six months ended June 30, 2026 and 2025, cash dividends paid totaled $12.2 million and $12.3, respectively. On June 8, 2026, the Board of Directors declared a quarterly cash dividend of $0.17 per share of the Company’s common stock to shareholders of record as of June 30, 2026. The dividend of $6.1 million was paid on July 10, 2026.

Current wording

During the nine months ended September 30, 2026 and 2025, cash dividends paid totaled $18.3 million and $18.4 million, respectively. On September 8, 2026, the Board of Directors declared a quarterly cash dividend of $0.17 per share of the Company’s common stock to shareholders of record as of September 30, 2026. The dividend of $6.1 million was paid on October 13, 2026.

Previous wording

The Company repurchased 0.1 million shares for an aggregate of $5.8 million at an average price of $53.67 per share during the six months ended June 30, 2026. As of June 30, 2026, the Company had $116.9 million remaining under share repurchase authorizations. See Note 7 to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Report for more information on the share repurchase authorization.

Current wording

The Company repurchased 0.2 million shares for an aggregate of $14.3 million at an average price of $63.50 per share during the nine months ended September 30, 2026. As of September 30, 2026, the Company had $108.4 million remaining under share repurchase authorizations. See Note 7 to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Report for more information on the share repurchase authorization.