0001628280-25-036413
SEC filingRevenue grew modestly but profitability was severely impacted by a $151.1M goodwill impairment, leading to an operating loss.
For the six months ended June 27, 2025, total revenue increased 4.4% YoY to $1.04B, driven primarily by a 4.7% rise in Products segment revenue. Gross profit declined 4.4% to $163.5M, yielding a gross margin of 15.8% compared to 17.2% a year earlier. The margin compression was attributed to higher employee costs, restructuring charges, and inflation. Operating income swung to a loss of $128.9M from a profit of $40.2M in the prior period, largely due to a $151.1M non-cash goodwill impairment charge. Net income was not disclosed, but the negative effective tax rate indicates a pre-tax loss.
Management expressed optimism about long-term semiconductor demand driven by AI, ML, and advanced packaging. However, no specific quantitative guidance was provided. The company expects capital expenditures for the remainder of 2025 to be funded by operating cash flow and cash on hand. Liquidity remains strong with $327.4M in cash and equivalents and $146.4M available under the revolving credit facility. The impairment suggests ongoing challenges in certain reporting units, but the Core Products and Fluid Delivery Systems reporting units were deemed substantially above carrying values.
Cash and cash equivalents stood at $327.4M as of June 27, 2025, up from $313.9M at year-end 2024. Total debt was $478.4M (net of $6.1M debt issuance costs), consisting of $10.0M current and $468.4M non-current bank borrowings. Shareholders' equity declined to $789.8M from $935.8M due to the $167.0M net loss and share repurchases. Inventory decreased slightly to $375.6M.
No purchase commitments were disclosed. The company leases real estate and equipment under non-cancelable operating leases. Pension obligations total $14.0M benefit obligation with $11.5M plan assets, resulting in an underfunded liability of $2.5M. Future estimated pension payments through 2029 and beyond amount to $21.2M.
Share repurchases of $3.4M (0.2M shares) were executed under the $150M authorization; remaining authorization is $146.6M. No dividends were paid to common shareholders. The company repaid $15.1M of bank borrowings (net debt decrease of $14.1M). Capital expenditures totaled $29.2M (2.8% of sales), primarily in Products ($18.8M) and Services ($10.3M).
The Products segment reported revenues of $911.9M (up 4.7% YoY) but an operating loss of $60.7M due to a $77.6M goodwill impairment. Services revenues of $125.5M (up 2.3% YoY) showed an operating loss of $68.2M including a $73.5M impairment. Revenue concentration: Lam Research (34.4%) and Applied Materials (23.0%) accounted for 57.4% of total revenue. Geographically, Singapore led at 36.9% of revenues, followed by the U.S. (24.8%), and China (7.8%).
Net loss of $162.9M in H1 2025 contrasted sharply with positive operating cash flow of $57.4M, largely due to a $151.1M non-cash goodwill impairment. Absent this charge, adjusted net income would have been roughly $11.8M (net loss plus impairment), aligning better with cash generation. Depreciation and amortization contributed $37.7M (including intangibles), while working capital provided $19.8M (driven by significant collections on accounts receivable and inventory reductions).
Capital expenditures of $29.2M represented 50.9% of operating cash flow, a manageable intensity. Free cash flow (operating cash flow less capex) was approximately $28.2M, though not explicitly stated. The company used $18.8M in financing activities, including $15.1M in debt repayments and $3.4M in share repurchases, both covered by operating cash flow.
Notable working capital swings: accounts receivable decreased $34.3M, inventories decreased $5.4M, while accounts payable dropped $11.9M. Income taxes paid of $18.4M and interest paid of $18.9M were significant cash outflows. The overall cash position increased $13.5M to $327.4M.