Ultra Clean Reports Third Quarter 2026 Financial Results

 ULTRA CLEAN HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in millions, except per share data)

Three Months Ended

Nine Months Ended

September 25, 2026

September 26, 2025

September 25, 2026

September 26, 2025

Revenues:

Products

$           681.9

$           445.0

$        1,720.3

$        1,356.9

Services

77.1

65.0

217.3

190.4

Total revenues

759.0

510.0

1,937.6

1,547.3

Cost of revenues:

Products

575.7

380.4

1,465.2

1,163.9

Services

54.9

47.4

155.9

137.8

Total cost of revenues

630.6

427.8

1,621.1

1,301.7

Gross profit

128.4

82.2

316.5

245.6

Operating expenses:

Research and development

8.8

7.8

26.1

23.2

Sales and marketing

15.9

15.1

47.8

45.5

General and administrative

50.0

48.7

148.1

144.1

Impairment of goodwill

—

—

—

151.1

Total operating expenses

74.7

71.6

222.0

363.9

Income (loss) from operations

53.7

10.6

94.5

(118.3)

Interest income

1.4

1.1

3.8

3.0

Interest expense

(1.5)

(9.9)

(9.8)

(29.9)

Other expense, net

(2.5)

(1.2)

(3.2)

(2.5)

Income (loss) before provision for income taxes

51.1

0.6

85.3

(147.7)

Provision for income taxes

10.3

8.7

47.5

23.3

Net income (loss)

40.8

(8.1)

37.8

(171.0)

Less: Net income attributable to noncontrolling interests

1.7

2.8

7.9

6.9

Net income (loss) attributable to UCT

$             39.1

$           (10.9)

$             29.9

$         (177.9)

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

Basic

$             0.86

$           (0.24)

$             0.66

$           (3.93)

Diluted

$             0.85

$           (0.24)

$             0.65

$           (3.93)

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

Basic

45.4

45.4

45.3

45.2

Diluted

46.2

45.4

46.2

45.2

ULTRA CLEAN HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions)

September 25,
2026

December 26,
2025

ASSETS

Current assets:

Cash and cash equivalents

$                       270,9

$                      311,8

Accounts receivable, net of allowance for credit losses

272,4

208,8

Inventories

723,3

390,9

Prepaid expenses and other current assets

67,6

48,2

Total current assets

1 334,2

959,7

Property, plant and equipment, net

344,4

324,6

Goodwill

114,2

114,2

Intangible assets, net

136,4

156,8

Deferred tax assets, net

4,1

3,5

Operating lease right-of-use assets

156,3

157,2

Other non-current assets

14,8

13,0

Total assets

$                    2 104,4

$                   1 729,0

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Current portion of long-term debt

$                           —

$                          9,9

Accounts payable

335,2

194,9

Accrued compensation and related benefits

63,3

51,1

Operating lease liabilities

22,3

20,2

Other current liabilities

57,8

24,6

Total current liabilities

478,6

300,7

Long-term debt

635,1

467,0

Deferred tax liabilities

13,7

13,8

Operating lease liabilities

152,7

156,6

Other liabilities

11,0

6,8

Total liabilities

1 291,1

944,9

Equity:

UCT stockholders' equity:

Common stock 

0,1

0,1

Additional paid-in capital

601,6

578,7

Common shares held in treasury

(88,7)

(48,4)

Retained earnings

219,1

189,2

Accumulated other comprehensive loss

(4,6)

(8,6)

Total UCT stockholders' equity

727,5

711,0

Noncontrolling interests

85,8

73,1

Total equity

813,3

784,1

Total liabilities and equity

$                    2 104,4

$                   1 729,0

ULTRA CLEAN HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)

Nine Months Ended

September 25,
2026

(In millions)

Cash flows from operating activities:

Net income (loss)

$              37.8

$           (171.0)

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

Depreciation and amortization

37.5

35.5

Amortization of intangible assets

20.4

21.2

Stock-based compensation

17.2

14.4

Amortization of debt issuance costs

2.5

2.1

Loss on extinguishment of debt

3.4

—

Loss on disposal of property, plant and equipment

1.2

0.7

Impairment of goodwill

—

151.1

Change in the fair value of financial instruments

—

(0.1)

Deferred income taxes

(0.6)

0.4

Changes in assets and liabilities:

Accounts receivable

(63.6)

41.6

Inventories

(332.4)

(1.2)

Prepaid expenses and other current assets

(16.0)

(6.3)

Other non-current assets

0.0

(1.0)

Accounts payable

131.1

(22.8)

Accrued compensation and related benefits

12.2

(0.6)

Income taxes payable

3.3

(12.1)

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

(0.9)

10.2

Other liabilities

30.2

(4.6)

Net cash provided by (used in) operating activities

(116.7)

57.5

Cash flows from investing activities:

Purchases of property, plant and equipment

(45.3)

(40.2)

Proceeds from sale of equipment

0.1

3.2

Net cash used in investing activities

(45.2)

(37.0)

Cash flows from financing activities:

Proceeds from the issuance of common stock under at-the-market offering, net of commissions and fees

34.0

—

At-the-market offering costs for the issuance of common stock

(0.1)

—

Proceeds from the issuance of convertible notes

600.0

—

Borrowings on revolving credit facility

50.0

—

Proceeds from bank borrowings

—

59.3

Extinguishment of bank borrowings

—

(59.3)

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)

(18.2)

Employees' taxes paid upon vesting of restricted stock units

(4.3)

(1.1)

Payments of dividends to a joint venture shareholder

(0.1)

(0.1)

Net cash provided by (used in) financing activities

116.6

(22.3)

Effect of exchange rate changes on cash and cash equivalents

4.4

2.0

Net increase (decrease) in cash and cash equivalents

(40.9)

0.2

Cash and cash equivalents at beginning of period

311.8

313.9

Cash and cash equivalents at end of period

$             270.9

$             314.1

ULTRA CLEAN HOLDINGS, INC.

REPORTABLE SEGMENTS

GAAP TO NON-GAAP RECONCILIATION 

(Unaudited; dollars in millions)

GAAP

Non-GAAP

Three Months Ended

Three Months Ended

September 25, 2026

September 25, 2026

Products

Services

Consolidated

Products

Services

Consolidated

Revenues

$           681.9

$             77.1

$           759.0

$            681.9

$              77.1

$            759.0

Gross profit

$           106.2

$             22.2

$           128.4

$            108.3

$              23.2

$            131.5

Gross margin

15.6 %

28.8 %

16.9 %

15.9 %

30.1 %

17.3 %

Income from operations

$             46.7

$              7.0

$             53.7

$              58.1

$              10.5

$              68.6

Operating margin

6.8 %

9.1 %

7.1 %

8.5 %

13.6 %

9.0 %

Three Months Ended

September 25, 2026

Products

Services

Consolidated

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

Reported gross profit on a GAAP basis

$            106.2

$              22.2

$            128.4

Amortization of intangible assets (1)

1.3

1.0

2.3

Stock-based compensation expense (2)

0.6

—

0.6

Restructuring charges (3)

0.2

—

0.2

Non-GAAP gross profit

$            108.3

$              23.2

$            131.5

Reconciliation of GAAP Gross margin to Non-GAAP Gross margin

Reported gross margin on a GAAP basis

15.6 %

28.8 %

16.9 %

Amortization of intangible assets (1)

0.2 %

1.3 %

0.3 %

Stock-based compensation expense (2)

0.1 %

— %

0.1 %

Restructuring charges (3)

0.0 %

— %

0.0 %

Non-GAAP gross margin

15.9 %

30.1 %

17.3 %

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

Reported income from operations on a GAAP basis

$              46.7

$                7.0

$              53.7

Amortization of intangible assets (1)

3.9

2.9

6.8

Stock-based compensation expense (2)

6.3

0.6

6.9

Restructuring charges (3)

0.6

0.0

0.6

Legal-related costs (4)

0.6

—

0.6

Non-GAAP income from operations

$              58.1

$              10.5

$              68.6

Reconciliation of GAAP Operating margin to Non-GAAP Operating margin

Reported operating margin on a GAAP basis

6.8 %

9.1 %

7.1 %

Amortization of intangible assets (1)

0.6 %

3.8 %

0.8 %

Stock-based compensation expense (2)

0.9 %

0.7 %

0.9 %

Restructuring charges (3)

0.1 %

— %

0.1 %

Legal-related costs (4)

0.1 %

— %

0.1 %

Non-GAAP operating margin

8.5 %

13.6 %

9.0 %

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 estimated costs related to certain legal proceedings and a cybersecurity incident

ULTRA CLEAN HOLDINGS, INC.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS

Three Months Ended

September 25,
2026

September 26,
2025

June 26,
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

$           39.1

$         (10.9)

$          8.7

Amortization of intangible assets (1)

6.8

6.9

6.8

Stock-based compensation expense (2)

6.9

4.6

8.1

Restructuring charges (3)

0.6

7.1

0.7

Debt refinancing costs expensed (4)

—

1.1

0.7

Legal-related costs (5)

0.6

0.2

—

Unrealized loss (gain) on foreign exchange (6)

2.6

(2.4)

(1.9)

VAT settlement (7)

—

(0.2)

—

Income tax effect of non-GAAP adjustments (8)

(3.5)

(4.0)

(2.9)

Income tax effect of valuation allowance (9)

0.1

8.6

12.1

Non-GAAP net income attributable to UCT

$           53.2

$           11.0

$        32.3

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

Reported income from operations on a GAAP basis

$           53.7

$           10.6

$        29.5

Amortization of intangible assets (1)

6.8

6.9

6.8

Stock-based compensation expense (2)

6.9

4.6

8.1

Restructuring charges (3)

0.6

7.1

0.7

Legal-related costs (5)

0.6

0.2

—

VAT settlement (7)

—

(0.2)

—

Non-GAAP income from operations

$           68.6

$           29.2

$        45.1

Reconciliation of GAAP Operating margin to Non-GAAP Operating margin

Reported operating margin on a GAAP basis

7.1 %

2.1 %

4.6 %

Amortization of intangible assets (1)

0.8 %

1.3 %

1.0 %

Stock-based compensation expense (2)

0.9 %

0.9 %

1.3 %

Restructuring charges (3)

0.1 %

1.4 %

0.1 %

Legal-related costs (5)

0.1 %

0.0 %

— %

VAT settlement (7)

— %

0.0 %

— %

Non-GAAP operating margin

9.0 %

5.7 %

7.0 %

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

Reported gross profit on a GAAP basis

$         128.4

$           82.2

$      103.7

Amortization of intangible assets (1)

2.3

2.3

2.3

Stock-based compensation expense (2)

0.6

0.5

1.5

Restructuring charges (3)

0.2

2.1

0.1

VAT settlement (7)

—

(0.2)

—

Non-GAAP gross profit

$         131.5

$           86.9

$      107.6

Reconciliation of GAAP Gross margin to Non-GAAP Gross margin

Reported gross margin on a GAAP basis

16.9 %

16.1 %

16.1 %

Amortization of intangible assets (1)

0.3 %

0.4 %

0.4 %

Stock-based compensation expense (2)

0.1 %

0.1 %

0.2 %

Restructuring charges (3)

0.0 %

0.4 %

0.0 %

VAT settlement (7)

— %

0.0 %

— %

Non-GAAP gross margin

17.3 %

17.0 %

16.7 %

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

$           (2.5)

$           (1.2)

$          0.6

Debt refinancing costs expensed (4)

—

1.1

0.7

Unrealized loss (gain) on foreign exchange (6)

2.6

(2.4)

(1.9)

Non-GAAP Other income (expense), net

$            0.1

$           (2.5)

$         (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

$           0.85

$         (0.24)

$        0.19

Amortization of intangible assets (1)

0.15

0.15

0.15

Stock-based compensation expense (2)

0.15

0.10

0.18

Restructuring charges (3)

0.01

0.16

0.01

Debt refinancing costs expensed (4)

—

0.02

0.01

Legal-related costs (5)

0.01

0.00

—

Unrealized loss (gain) on foreign exchange (6)

0.06

(0.05)

(0.04)

VAT settlement (7)

—

0.00

—

Income tax effect of non-GAAP adjustments (8)

(0.08)

(0.09)

(0.06)

Income tax effect of valuation allowance (9)

0.00

0.19

0.26

Impact of dilutive shares

0.00

0.00

0.00

Non-GAAP net earnings

$           1.15

$           0.24

$        0.70

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

46.2

45.6

46.0

ULTRA CLEAN HOLDINGS, INC.

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

Three Months Ended

September 25,
2026

September 26,
2025

June 26,
2026

Provision for income taxes on a GAAP basis

$           10.3

$            8.7

$        18.1

Income tax effect of non-GAAP adjustments (8)

3.5

4.0

2.9

Income tax effect of valuation allowance (9)

(0.1)

(8.6)

(12.1)

Non-GAAP provision for income taxes

$           13.7

$            4.1

$          8.9

Income before income taxes on a GAAP basis

$           51.1

$            0.6

$        30.0

Amortization of intangible assets (1)

6.8

6.9

6.8

Stock-based compensation expense (2)

6.9

4.6

8.1

Restructuring charges (3)

0.6

7.1

0.7

Debt refinancing costs expensed (4)

—

1.1

0.7

Legal-related costs (5)

0.6

0.2

—

Unrealized loss (gain) on foreign exchange (6)

2.6

(2.4)

(1.9)

VAT settlement (7)

—

(0.2)

—

Non-GAAP income before income taxes

$           68.6

$           17.9

$        44.4

Effective income tax rate on a GAAP basis

20.2 %

1450.0 %

60.3 %

Non-GAAP effective income tax rate

20.0 %

22.9 %

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 and a cybersecurity incident

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

7    Represents impact of value added tax ruling

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 capped call cap price instead of the initial conversion price