Financial Analysis

Acquisition On December 15, 2025, we acquired 100% of the shares of Keystone Photonics for total consideration of $20.6 million, net of cash acquired of $1.7 million. Keystone Photonics provides optical probing technology used in the testing of silicon photonics (SiPh) and co-packaged optics devices. The acquisition expands the Companys testing capabilities in these areas and supports customers as SiPh and co-packaged optics technologies transition from development into high-volume manufacturing, including applications related to artificial intelligence infrastructure. The acquisition was accounted for under the acquisition method of accounting, which requires that assets acquired and liabilities assumed be recognized on the consolidated balance sheets at their fair values as of the acquisition date. The fair values assigned to assets acquired and liabilities assumed are still preliminary as we continue to gather the necessary information to perform our fair value estimates and provisional amounts. Provisional amounts include items related to intangibles. Goodwill represents the excess of purchase price over the fair value assigned to the assets acquired and liabilities assumed and is allocated to the systems reporting unit within the Systems reportable segment. The identified intangible asset, developed technology, has a preliminary useful life of ten years. Our Consolidated Statements of Income include the financial results of Keystone Photonics subsequent to the acquisitio …

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Commitments and Contingencies Leases See Note 8, Leases . Government Assistance In January 2023, we received a $18.0 million Grant from the California Governors Office of Business and Economic Development. The Grant requires us to create and maintain full-time jobs and make significant infrastructure investments within California over a 5-year term. If we do not meet the requirements of the Grant, we will be required to repay all or a portion of the Grant. See Note 2, Summary of Significant Accounting Policies under the caption Government Assistance, for additional information. Environmental Matters We are subject to U.S. federal, state, local, and foreign governmental laws and regulations relating to the protection of the environment, including those governing the discharge of pollutants into the air and water, the management and disposal of hazardous substances and wastes, the clean-up of contaminated sites and the maintenance of a safe workplace. We believe that we comply in all material respects with the environmental laws and regulations that apply to us as of December 27, 2025. There are no matters pending that we currently believe are reasonably possible of having a material impact to our business, consolidated financial condition, results of operations or cash flows. In the future, we may receive notices of violations of environmental regulations, or otherwise learn of such violations. Environmental contamination or violations may negatively impact our business. Indem …

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Employee Benefit Plans We have an employee savings plan that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. The plan is designed to provide employees with an accumulation of funds for retirement on a tax-deferred basis and provide for annual discretionary employer contributions. The total charge to net income under the 401(k) plan for fiscal 2025, 2024 and 2023 aggregated to $2.7 million, $2.6 million and $2.3 million, respectively.

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Debt Our debt consisted of the following (in thousands): December 27, 2025 December 28, 2024 Term loan $ 12,258 $ 13,368 Less unamortized issuance costs (50) (54) Term loan less issuance costs $ 12,208 $ 13,314 Revolving Credit Agreement On July 29, 2025, we entered into a Revolving Credit Agreement (the Revolver) with Wells Fargo Bank, National Association, as Administrative Agent, and the lenders party thereto, providing us with a $150 million revolving credit facility (the Facility). The Facility matures on July 29, 2030 and may be used for working capital and other general corporate purposes, subject to the terms and conditions set forth in the Revolver. No amounts were outstanding under the Facility as of December 27, 2025. Borrowings under the Facility will bear interest at a fluctuating rate per annum equal to, at our option, (i) the forward-looking secured overnight financing rate (term SOFR), (ii) a base rate set forth in the Revolver, or (iii) a combination thereof, plus, in each case, an applicable margin calculated based on our leverage ratio. Voluntary prepayments may be made without penalty, subject to certain notice requirements and minimum prepayment and reduction thresholds. The Facility is also subject to a quarterly commitment fee ranging from 0.15% to 0.25% per annum, applied to the daily amount by which the committed amount exceed the borrowings outstanding. The commitment fee as of December 27, 2025 was 0.15%. The Revolver contains customary representati …

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Fair Value Whenever possible, the fair values of our financial assets and liabilities are determined using quoted market prices of identical securities or quoted market prices of similar securities from active markets. The three levels of inputs that may be used to measure fair value are as follows: Level 1 valuations are obtained from real-time quotes for transactions in active exchange markets involving identical securities; Level 2 valuations utilize significant observable inputs, such as quoted prices for similar assets or liabilities, quoted prices near the reporting date in markets that are less active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3 valuations utilize unobservable inputs to the valuation methodology and include our own data about assumptions market participants would use in pricing the asset or liability based on the best information available under the circumstances. We did not have any transfers of assets or liabilities measured at fair value on a recurring basis to or from Level 1, Level 2 or Level 3 during fiscal 2025, 2024 or 2023. The carrying values of Cash, Accounts receivable, net, Restricted cash, Prepaid expenses and other current assets, Accounts payable, and Accrued liabilities approximate fair value due to their short maturities. No changes were made to our valuation techniques during fiscal 2025. Cash Equivalents The fair value …

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Income Taxes Components of Income Before Income Taxes The components of income before income taxes were as follows (in thousands): Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 United States $ 48,817 $ 66,953 $ (10,681) Foreign 20,574 12,459 99,948 $ 69,391 $ 79,412 $ 89,267 Provision for Income Taxes The components of the provision for income taxes are as follows (in thousands): Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 Current provision: Federal $ 4,585 $ 15,688 $ 8,970 State 647 1,703 835 Foreign 5,845 5,762 9,175 11,077 23,153 18,980 Deferred provision (benefit): Federal 2,699 (11,446) (10,810) State (657) (1,806) (330) Foreign (115) (103) (960) 1,927 (13,355) (12,100) Total provision for income taxes: Federal 7,284 4,242 (1,840) State (10) (103) 505 Foreign 5,730 5,659 8,215 $ 13,004 $ 9,798 $ 6,880 Tax Rate Reconciliation The following is a reconciliation of the difference between income taxes computed by applying the federal statutory rate of 21% and the provision from income taxes for fiscal 2025, 2024, and 2023 (dollars in thousands): Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 Amount Percent Amount Percent Amount Percent U.S. statutory federal tax $ 14,572 21.0 % $ 16,676 21.0 % $ 18,746 21.0 % State taxes and credits, net of federal benefit (1) (1,457) (2.1) (1,309) (1.6) (891) (1.0) Foreign tax effects: Germany: Foreign taxes at rates different than the U.S. 1,657 2.4 1,099 1.4 8,6 …

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Leases Our operating lease, right-of-use assets relate to real estate space under non-cancelable operating lease agreements for commercial and industrial space, as well as for our corporate headquarters located in Livermore, California. Our leases have remaining terms of one to nine , and some leases include options to extend up to twenty years. We did not include any of our renewal options in our lease terms for calculating our lease liability as the renewal options allow us to maintain operational flexibility and we are not reasonably certain we will exercise these options at this time. The weighted-average remaining lease term for our operating leases was three years at December 27, 2025 and the weighted-average discount rate was 4.99%. The components of lease expense were as follows (in thousands): Lease Expense December 27, 2025 December 28, 2024 December 30, 2023 Operating lease expense $ 8,577 $ 8,457 $ 8,453 Short-term lease expense 531 341 524 Variable lease expense 3,310 4,194 2,389 $ 12,418 $ 12,992 $ 11,366 Future minimum payments under our non-cancelable operating leases were as follows as of December 27, 2025 (in thousands): Fiscal Year Amount 2026 $ 8,926 2027 8,421 2028 4,736 2029 510 2030 461 Thereafter 993 Total minimum lease payments 24,047 Less: interest (3,897) Present value of net minimum lease payments 20,150 Less: current portion (7,662) Total long-term operating lease liabilities $ 12,488

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Recent Accounting Pronouncements Adopted ASU 2023-09 In December 2023, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU includes requirements that an entity disclose specific categories in the rate reconciliation and provide additional information for reconciling items that are greater than five percent of the amount computed by multiplying pretax income by the applicable statutory income tax rate. The standard also requires that entities disclose income before income taxes and provision for income taxes disaggregated between domestic and foreign. This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. An entity may apply the amendments outlined in this ASU prospectively by providing the revised disclosures for the current period and continuing to provide the pre-ASU disclosures for the prior periods, or may apply the amendments retrospectively by providing the revised disclosures for all periods presented. We adopted the new standard effective December 27, 2025. As a result, we have enhanced our income tax disclosures retrospectively by reconciling the U.S. federal statutory tax amount and rate to our actual global effective amounts and rates. See Note 15, Income Taxes , for additional information. Pending Adoption ASU 2024-03 In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Repo …

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Restructuring Charges During fiscal 2025, the Company executed on multiple restructuring initiatives intended to improve operational efficiency and streamline operations. These actions included the consolidation of certain sites within our Systems and Probe Cards segments. As a result of these initiatives, the Company incurred personnel-related costs primarily associated with the severance of employees and recognized non-cash charges related to the impairment of certain property and equipment no longer in use. We recognized restructuring plan charges of approximately $5.7 million for the year ended December 27, 2025, with $2.8 million within the Probe Cards Segment, $1.8 million within the Systems segment, and $1.1 million within Corporate. The Company recognized total 2025 restructuring charges of $3.0 million for severance and employee-related costs and $2.7 million for property and equipment impairments and other asset related costs. Total restructuring charges included in our Consolidated Statements of Income were as follows (in thousands): Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 Cost of revenues $ 1,768 $ 639 $ 357 Research and development 277 137 291 Selling, general and administrative 3,624 147 1,187 $ 5,669 $ 923 $ 1,835

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Segments and Geographic Information We operate in two reportable segments consisting of the Probe Cards Segment and the Systems Segment. Our chief operating decision maker (CODM) is our President and Chief Executive Officer, who assesses the reportable segments' performance by using each reportable segment's net contribution to make decisions about allocating resources and assessing performance for the entire company. The CODM uses net contribution for each reportable segment predominantly in the annual budget and forecasting process, as well as consideration of budget-to-actual variances on a quarterly basis when making decisions for assessment of our performance and results of operations. Certain components of net contribution are utilized to determine executive compensation along with other measures. The following table provides net contribution by reportable segment and includes a reconciliation to income before income taxes (dollars in thousands): Fiscal 2025 Probe Cards Systems Corporate and Other Total Revenues $ 637,898 $ 147,095 $ $ 784,993 Cost of revenues 379,398 85,542 11,202 476,142 Gross profit 258,500 61,553 (11,202) 308,851 Gross margin 40.5 % 41.8 % 39.3 % Research and development 86,295 18,816 10,571 115,682 Selling 29,085 14,938 7,276 51,299 Marketing 6,494 7,472 4,943 18,909 Net contribution $ 136,626 $ 20,327 $ (33,992) 122,961 General and administrative 62,866 Factory start-up costs 3,025 Operating income 57,070 Interest income 10,640 Interest expense (5 …

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Summary of Significant Accounting Policies Basis of Consolidation and Foreign Currency Translation The consolidated financial statements include our accounts and those of our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. The functional currencies of certain of our foreign subsidiaries are the local currencies and, accordingly, all assets and liabilities of these foreign operations are translated to U.S. Dollars at current period-end exchange rates, and revenues and expenses are translated to U.S. Dollars using average exchange rates in effect during the period. The gains and losses from the foreign currency translation of these subsidiaries' financial statements are included as a separate component of stockholders' equity on our Consolidated Balance Sheets within Accumulated other comprehensive loss. Certain other of our foreign subsidiaries use the U.S. Dollar as their functional currency. Accordingly, monetary assets and liabilities in non-functional currencies of these subsidiaries are remeasured using exchange rates in effect at the end of the period. Revenues and costs in local currency are remeasured using average exchange rates for the period, except for costs related to those balance sheet items that are remeasured using historical exchange rates. The resulting remeasurement gains and losses are included in the Consolidated Statements of Income as a component of Other income (expense), net as incurred. Use of Estimates The …

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Stockholders' Equity Preferred Stock We have authorized 10,000,000 shares of undesignated preferred stock, $0.001 par value, none of which is issued and outstanding. Our Board of Directors shall determine the rights, preferences, privileges and restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of any series. Common Stock Each share of common stock has the right to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors, subject to the prior rights of holders, if any, of all classes of stock outstanding having priority rights as to dividends. No dividends have been declared or paid as of December 27, 2025. Common Stock Repurchase Programs On May 20, 2022, our Board of Directors authorized a two-year program to repurchase up to $75 million of outstanding common stock to offset potential dilution from issuance of common stock under our stock-based compensation programs. During fiscal 2022 and 2023, we repurchased and retired 1,700,893 shares of common stock for $56.4 million and 504,352 shares of common stock for $18.6 million, respectively, utilizing all of the shares available for repurchase under the program. On October 30, 2023, our Board of Directors authorized a two-year program to repurchase up …

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Subsequent Events On January 5, 2026, we adopted restructuring plans that are intended to better align our cost structure and support gross margin improvement to the Companys target financial model, while also aligning manufacturing capabilities with current and anticipated business needs and the Company's strategic priorities. As part of this restructuring plan, the Company is consolidating the manufacturing facilities located in Carlsbad, California and Baldwin Park, California, to other manufacturing facilities. The restructuring plans are expected to result in the Company recording restructuring charges in the aggregate amount of approximately $30 million to $40 million, estimated to be comprised primarily of $20 million to $25 million of cost related to impairment of leasehold improvements, facility exits, and other costs, $9 million to $13 million of severance, retention and other employee-related costs to sever or retain approximately 200 to 300 employees, and $1 million to $2 million in contract and lease termination costs. Of these amounts, the Company expects the majority of the charges to be incurred in fiscal 2026. The Company expects approximately $10 million to $15 million of the charges will result in future cash expenditures and approximately $20 million to $25 million in non-cash charges. …

SubsequentEventsTextBlock · excerpt; the full note is in the filing