Ultra Clean Reports Second Quarter 2026 Financial Results

 ULTRA CLEAN HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in millions, except per share data)

Three Months Ended

Six Months Ended

June 26,
2026

June 27,
2025

June 26,
2026

June 27,
2025

Revenues:

Products

$       572.7

$       454.9

$     1,038.4

$       911.9

Services

72.2

63.9

140.2

125.5

Total revenues

644.9

518.8

1,178.6

1,037.4

Cost of revenues:

Products

488.8

393.3

889.5

783.5

Services

52.4

46.0

101.0

90.4

Total cost revenues

541.2

439.3

990.5

873.9

Gross margin

103.7

79.5

188.1

163.5

Operating expenses:

Research and development

8.8

7.8

17.4

15.4

Sales and marketing

16.4

15.5

31.9

30.5

General and administrative

49.0

46.9

98.0

95.4

Impairment of goodwill

—

151.1

—

151.1

Total operating expenses

74.2

221.3

147.3

292.4

Income (loss) from operations

29.5

(141.8)

40.8

(128.9)

Interest income

1.0

0.8

2.4

1.9

Interest expense

(1.1)

(10.1)

(8.3)

(20.0)

Other income (expense), net

0.6

(2.2)

(0.7)

(1.3)

Income (loss) before provision for income taxes

30.0

(153.3)

34.2

(148.3)

Provision for income taxes

18.1

7.2

37.2

14.6

Net income (loss)

11.9

(160.5)

(3.0)

(162.9)

Less: Net income attributable to noncontrolling
interests

3.2

1.5

6.2

4.1

Net income (loss) attributable to UCT

$          8.7

$      (162.0)

$         (9.2)

$      (167.0)

Net income (loss) per share attributable to UCT common stockholders:

Basic

$         0.19

$       (3.58)

$       (0.20)

$       (3.70)

Diluted

$         0.19

$       (3.58)

$       (0.20)

$       (3.70)

Shares used in computing net income (loss) per share:

Basic

45.1

45.2

45.2

45.2

Diluted

46.1

45.2

45.2

45.2

ULTRA CLEAN HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions)

June 26,
2026

December 26,
2025

ASSETS

Current assets:

Cash and cash equivalents

$         255.9

$         311.8

Accounts receivable, net of allowance for credit losses

208.0

208.8

Inventories

629.9

390.9

Prepaid expenses and other current assets

66.7

48.2

Total current assets

1,160.5

959.7

Property, plant and equipment, net

323.7

324.6

Goodwill

114.2

114.2

Intangible assets, net

143.2

156.8

Deferred tax assets, net

4.4

3.5

Operating lease right-of-use assets

158.1

157.2

Other non-current assets

14.0

13.0

Total assets

$      1,918.1

$       1,729.0

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Current portion of long-term debt

$             —

$            9.9

Accounts payable

300.6

194.9

Accrued compensation and related benefits

62.4

51.1

Operating lease liabilities

21.5

20.2

Other current liabilities

40.2

24.6

Total current liabilities

424.7

300.7

Long-term debt

599.4

467.0

Deferred tax liabilities

14.1

13.8

Operating lease liabilities

155.0

156.6

Other liabilities

7.8

6.8

Total liabilities

1,201.0

944.9

Equity:

UCT stockholders' equity:

Common stock

0.1

0.1

Additional paid-in capital

560.8

578.7

Common shares held in treasury

(88.7)

(48.4)

Retained earnings

180.0

189.2

Accumulated other comprehensive loss

(12.4)

(8.6)

Total UCT stockholders' equity

639.8

711.0

Noncontrolling interests

77.3

73.1

Total equity

717.1

784.1

Total liabilities and equity

$      1,918.1

$       1,729.0

ULTRA CLEAN HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)

Six Months Ended

June 26,
2026

June 27,
2025

(In millions) 

Cash flows from operating activities:

Net loss

$            (3.0)

$         (162.9)

Adjustments to reconcile net loss to net cash provided by (used in) operating
activities:

Depreciation and amortization

24.8

23.4

Amortization of intangible assets

13.7

14.3

Stock-based compensation

9.6

10.0

Amortization of debt issuance costs

1.6

1.1

Impairment of goodwill

—

151.1

Loss on extinguishment of debt

3.4

—

Loss on disposal of property, plant and equipment

1.2

0.1

Change in the fair value of financial instruments

—

(0.1)

Deferred income taxes

(0.5)

0.6

Changes in assets and liabilities:

Accounts receivable

0.8

34.3

Inventories

(238.9)

5.4

Prepaid expenses and other current assets

(13.8)

(7.8)

Other non-current assets

0.9

(0.5)

Accounts payable

104.4

(11.9)

Accrued compensation and related benefits

11.3

(2.6)

Income taxes payable

(2.5)

(4.2)

Operating lease right-of-use assets and operating lease liabilities

(1.2)

11.1

Other liabilities

13.8

(4.0)

Net cash provided by (used in) operating activities

(74.4)

57.4

Cash flows from investing activities:

Purchases of property, plant and equipment

(25.8)

(29.2)

Proceeds from sale of equipment

0.1

0.1

Net cash used in investing activities

(25.7)

(29.1)

Cash flows from financing activities:

Proceeds from the issuance of convertible notes

600.0

—

Borrowings on revolving credit facility

15.0

—

Proceeds from issuance of common stock

1.1

1.1

Payment of debt issuance costs

(17.4)

(0.6)

Repurchase of common stock

(40.0)

(3.4)

Payment for capped call transactions

(25.1)

—

Principal payments on bank borrowings

(481.5)

(15.1)

Employees' taxes paid upon vesting of restricted stock units

(3.5)

(0.7)

Payments of dividends to a joint venture shareholder

(0.1)

(0.1)

Net cash provided by (used in) financing activities

48.5

(18.8)

Effect of exchange rate changes on cash and cash equivalents

(4.3)

4.0

Net increase (decrease) in cash and cash equivalents

(55.9)

13.5

Cash and cash equivalents at beginning of period

311.8

313.9

Cash and cash equivalents at end of period

$          255.9

$          327.4

ULTRA CLEAN HOLDINGS, INC.

REPORTABLE SEGMENTS

GAAP TO NON-GAAP RECONCILIATION

(Unaudited; dollars in millions)

GAAP

Non-GAAP

Three Months Ended

Three Months Ended

June 26, 2026

June 26, 2026

Products

Services

Consolidated

Products

Services

Consolidated

Revenues

$   572.7

$   72.2

$         644.9

$     572.7

$       72.2

$         644.9

Gross profit

$     83.9

$   19.8

$         103.7

$       86.7

$       20.9

$         107.6

Gross margin

14.6 %

27.4 %

16.1 %

15.1 %

28.9 %

16.7 %

Income from operations

$     24.8

$     4.7

$           29.5

$       37.0

$         8.1

$           45.1

Operating margin

4.3 %

6.6 %

4.6 %

6.5 %

11.2 %

7.0 %

Three Months Ended

June 26, 2026

Products

Services

Consolidated

Reconciliation of GAAP Gross profit to Non-GAAP Gross profit (in millions)

Reported gross profit on a GAAP basis

$      83.9

$       19.8

$     103.7

Amortization of intangible assets (1)

1.3

1.0

2.3

Stock-based compensation expense (2)

1.5

—

1.5

Restructuring charges (3)

—

0.1

0.1

Non-GAAP gross profit

$      86.7

$       20.9

$     107.6

Reconciliation of GAAP Gross margin to Non-GAAP Gross margin

Reported gross margin on a GAAP basis

14.6 %

27.4 %

16.1 %

Amortization of intangible assets (1)

0.2 %

1.4 %

0.4 %

Stock-based compensation expense (2)

0.3 %

— %

0.2 %

Restructuring charges (3)

— %

0.1 %

— %

Non-GAAP gross margin

15.1 %

28.9 %

16.7 %

Reconciliation of GAAP Income from operations to Non-GAAP Income from operations (in millions)

Reported income from operations on a GAAP basis

$      24.8

$        4.7

$       29.5

Amortization of intangible assets (1)

3.9

2.9

6.8

Stock-based compensation expense (2)

7.6

0.5

8.1

Restructuring charges (3)

0.7

—

0.7

Non-GAAP income from operations

$      37.0

$        8.1

$       45.1

Reconciliation of GAAP Operating margin to Non-GAAP Operating margin

Reported operating margin on a GAAP basis

4.3 %

6.6 %

4.6 %

Amortization of intangible assets (1)

0.7 %

4.0 %

1.0 %

Stock-based compensation expense (2)

1.3 %

0.6 %

1.3 %

Restructuring charges (3)

0.1 %

— %

0.1 %

Non-GAAP operating margin

6.5 %

11.2 %

7.0 %

1    Amortization of intangible assets related to the Company's business acquisitions

2    Represents compensation expense for stock granted to employees and directors

3    Represents costs associated with employee separation, severance, retention, and other expenses related to facility closures

ULTRA CLEAN HOLDINGS, INC.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS

Three Months Ended

June 26,
2026

June 27,
2025

March 27,
2026

Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (in millions)

Reported net income (loss) attributable to UCT on a GAAP basis

$        8.7

$    (162.0)

$     (17.9)

Amortization of intangible assets (1)

6.8

7.0

6.9

Stock-based compensation expense (2)

8.1

7.1

4.0

Restructuring charges (3)

0.7

4.8

4.8

Debt refinancing costs expensed (4)

0.7

—

3.0

Legal-related costs (5)

—

0.3

—

Unrealized loss (gain) on foreign exchange (6)

(1.9)

3.7

(1.1)

Impairment of goodwill (7)

—

151.1

—

Income tax effect of non-GAAP adjustments (8)

(2.9)

(34.9)

(3.5)

Income tax effect of valuation allowance (9)

12.1

37.9

18.3

Non-GAAP net income attributable to UCT

$       32.3

$       15.0

$       14.5

Reconciliation of GAAP Income (Loss) from operations to Non-GAAP Income from operations (in millions)

Reported income (loss) from operations on a GAAP basis

$       29.5

$    (141.8)

$       11.4

Amortization of intangible assets (1)

6.8

7.0

6.9

Stock-based compensation expense (2)

8.1

7.1

4.0

Restructuring charges (3)

0.7

4.8

4.8

Legal-related costs (5)

—

0.3

—

Impairment of goodwill (7)

—

151.1

—

Non-GAAP income from operations

$       45.1

$       28.5

$       27.1

Reconciliation of GAAP Operating margin to Non-GAAP Operating margin

Reported operating margin on a GAAP basis

4.6 %

(27.3) %

2.1 %

Amortization of intangible assets (1)

1.0 %

1.3 %

1.3 %

Stock-based compensation expense (2)

1.3 %

1.4 %

0.8 %

Restructuring charges (3)

0.1 %

0.9 %

0.9 %

Legal-related costs (5)

— %

0.1 %

— %

Impairment of goodwill (7)

— %

29.1 %

— %

Non-GAAP operating margin

7.0 %

5.5 %

5.1 %

Reconciliation of GAAP Gross profit to Non-GAAP Gross profit (in millions)

Reported gross profit on a GAAP basis

$     103.7

$       79.5

$       84.4

Amortization of intangible assets (1)

2.3

2.3

2.3

Stock-based compensation expense (2)

1.5

0.4

1.2

Restructuring charges (3)

0.1

2.4

0.3

Non-GAAP gross profit

$     107.6

$       84.6

$       88.2

Reconciliation of GAAP Gross margin to Non-GAAP Gross margin

Reported gross margin on a GAAP basis

16.1 %

15.3 %

15.8 %

Amortization of intangible assets (1)

0.4 %

0.4 %

0.4 %

Stock-based compensation expense (2)

0.2 %

0.1 %

0.2 %

Restructuring charges (3)

— %

0.5 %

0.1 %

Non-GAAP gross margin

16.7 %

16.3 %

16.5 %

Reconciliation of GAAP Other income (expense), net to Non-GAAP Other income (expense), net (in millions)

Reported Other income (expense), net on a GAAP basis

$        0.6

$       (2.2)

$       (1.3)

Debt refinancing costs expensed (4)

0.7

—

3.0

Unrealized loss (gain) on foreign exchange (6)

(1.9)

3.7

(1.1)

Non-GAAP Other income (expense), net

$        1.5

$        0.6

Reconciliation of GAAP Income (Loss) Per Diluted Share to Non-GAAP Earnings Per Diluted Share

Reported net income (loss) on a GAAP basis

$       0.19

$     (3.58)

$     (0.40)

Amortization of intangible assets (1)

0.15

0.15

0.15

Stock-based compensation expense (2)

0.18

0.16

0.09

Restructuring charges (3)

0.01

0.10

0.10

Debt refinancing costs expensed (4)

0.01

—

0.06

Legal-related costs (5)

—

0.01

—

Unrealized loss (gain) on foreign exchange (6)

(0.04)

0.08

(0.02)

Impairment of goodwill (7)

—

3.34

—

Income tax effect of non-GAAP adjustments (8)

(0.06)

(0.77)

(0.08)

Income tax effect of valuation allowance (9)

0.26

0.84

0.40

Impact of dilutive shares

—

—

0.01

Non-GAAP net earnings

$       0.70

$       0.33

$       0.31

Weighted average number of diluted shares (in millions) on a
non-GAAP basis (10)

46.0

45.3

46.3

ULTRA CLEAN HOLDINGS, INC.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP EFFECTIVE INCOME TAX RATE

Three Months Ended

June 26,
2026

June 27,
2025

March 27,
2026

Provision for income taxes on a GAAP basis

$       18.1

$         7.2

$       19.2

Income tax effect of non-GAAP adjustments (8)

2.9

34.9

3.5

Income tax effect of valuation allowance (9)

(12.1)

(37.9)

(18.3)

Non-GAAP provision for income taxes

$         8.9

$         4.2

$         4.4

Income before income taxes on a GAAP basis

$       30.0

$    (153.3)

$         4.2

Amortization of intangible assets (1)

6.8

7.0

6.9

Stock-based compensation expense (2)

8.1

7.1

4.0

Restructuring charges (3)

0.7

4.8

4.8

Debt refinancing costs expensed (4)

0.7

—

3.0

Legal-related costs (5)

—

0.3

—

Unrealized loss (gain) on foreign exchange (6)

(1.9)

3.7

(1.1)

Impairment of goodwill (7)

—

151.1

—

Non-GAAP income before income taxes

$       44.4

$       20.7

$       21.8

Effective income tax rate on a GAAP basis

60.3 %

(4.7) %

457.1 %

Non-GAAP effective income tax rate

20.0 %

20.3 %

20.0 %

1

Amortization of intangible assets related to the Company's business acquisitions

2

Represents compensation expense for stock granted to employees and directors

3

Represents costs associated with employee separation, severance, retention, and other expenses related to facility closures

4

Represents certain third party transaction costs related to the amended credit agreement and the previously capitalized costs of extinguished debt

5

Represents estimated costs related to certain legal proceedings

6

Represents unrealized foreign exchange gains and losses arising from the remeasurement of monetary assets and liabilities

7

 Represents non-cash charges related to the impairment of goodwill

8

Tax effect of items (1) through (7) above based on the non-GAAP tax rate

9

The Company's GAAP tax expense is generally higher than the Company's non-GAAP tax expense, primarily due to losses in the U.S. with full federal and state valuation allowances. The Company's non-GAAP tax rate and resulting non-GAAP tax expense considers the tax implications as if there was no federal or state valuation allowance position in effect

10

Non-GAAP diluted weighted-average common shares are adjusted to reflect the dilutive impact of our convertible note based on the higher note hedge strike price instead of the initial conversion price