ALLEGRO MICROSYSTEMS, INC. Management report and analysis of the financial situation and operating results. (Form 10-Q)

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The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our unaudited condensed
consolidated financial statements and the related notes and other information
included elsewhere in this Quarterly Report, as well as the audited financial
statements and the related notes thereto, and the discussion under "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business" included in our Annual Report on Form 10-K for the year ended March
25, 2022, filed with the Securities and Exchange Commission ("SEC") on May 18,
2022 (the "2022 Annual Report").

In addition to historical data, this discussion contains forward-looking
statements about our business, results of operations, cash flows, financial
condition and prospects based on current expectations that involve risks,
uncertainties and assumptions. Our actual results could differ materially from
such forward-looking statements. Factors that could cause or contribute to those
differences include, but are not limited to, those identified below and those
discussed in the section titled "Forward-Looking Statements" and in Part I, Item
1A. "Risk Factors" of our 2022 Annual Report and Part II. Item 1A. "Risk
Factors" of this Quarterly Report. Additionally, our historical results are not
necessarily indicative of the results that may be expected for any period in the
future.

We operate on a 52- or 53-week fiscal year ending on the last Friday of March.
Each fiscal quarter has 13 weeks, except in a 53-week year, when the fourth
fiscal quarter has 14 weeks such as in fiscal year 2023. All references to the
three months ended June 24, 2022 and June 25, 2021 relate to the 13-week periods
ended June 24, 2022 and June 25, 2021, respectively. All references to "2022,"
"fiscal year 2022" or similar references relate to the 52-week period ended
March 25, 2022.

Insight

Allegro MicroSystems, Inc., together with its consolidated subsidiaries ("AMI",
"we", "us" or "our") is a leading global designer, developer, manufacturer and
marketer of sensor integrated circuits ("ICs") and application-specific analog
power ICs enabling the most important emerging technologies in the automotive
and industrial markets. We are a leading supplier of magnetic sensor IC
solutions worldwide based on market share, driven by our market leadership in
automotive. We focus on providing complete IC solutions to sense, regulate and
drive a variety of mechanical systems. This includes sensing the angular or
linear position of a shaft or actuator, driving an electric motor or actuator,
and regulating the power applied to sensing and driving circuits so they operate
safely and efficiently.

We are headquartered in Manchester, New Hampshire and have a global footprint
with 17 locations across four continents. Our portfolio includes more than 1,000
products, and we ship over one billion units annually to more than 10,000
customers worldwide. During the three months ended June 24, 2022 and June 25,
2021, we generated $217.8 million and $188.1 million in total net sales,
respectively, with $10.3 million and $27.7 million in net income, respectively,
and $66.7 million and $53.8 million in Adjusted EBITDA in such fiscal periods,
respectively. For additional information regarding Adjusted EBITDA, a non-GAAP
financial measure, please refer to "Non-GAAP Financial Measures" in this
document.

Recent initiatives to improve operating results

We implemented several initiatives during the fiscal year 2022 and into fiscal
year 2023 designed to improve our operating results during those fiscal years
and going forward.

We continue to implement initiatives to improve gross margins, which is
calculated as gross profit divided by total net sales. Our gross margin improved
from 50.0% in the first quarter of 2022 compared to 54.4% in the first quarter
of 2023. This gross margin improvement was a result of our operational
transformation, improved product mix of higher average selling prices ("ASPs")
on more value-added products, increased leverage of our distribution channel,
and continued efficiency and leverage on higher volumes. We expect to continue
to realize this lower level of cost of goods and improvements in operating
income for the immediate future. Additionally, we will continue to leverage our
facility to increase production where demand for our products warrants.

We have been successful in increasing our ASPs through a focus on feature-rich
products and selective price increases. Increased ASPs and manufacturing
efficiencies have allowed us to continue to improve gross margin in an
environment of limited capacity at our suppliers and rising input costs. Limited
supply and increased demand for many of our products and applications, as well
as supply chain disruptions related to the COVID-19 pandemic, have contributed
to input cost increases on the components needed to manufacture our products. We
will continue to consider opportunities for strategic price increases and
process efficiencies to offset input cost increases on the materials and
supplies that we use in production.

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With our efforts to leverage our fixed cost and operating margin improvements,
we have attained efficiencies through cost structure improvements, streamlining
of manufacturing and support processes, and further utilization of excess
capacity. These manufacturing efficiencies allowed us to leverage higher volumes
to keep pace with increasing demand across most of our applications, while
reducing cost of goods sold and increasing the absorption of fixed costs.
Although these initiatives have resulted in gross margin and operating income
improvements over the previous quarters, we cannot ensure that these trends will
continue over the long-term.

In May 2022, we entered into an agreement to acquire Heyday Integrated Circuits
("Heyday"), a privately held company specializing in compact, fully integrated
isolated gate drivers that enable energy conversion in high-voltage gallium
nitride and silicon carbide wide-bandgap semiconductor designs (the "Heyday
Acquisition"). The Heyday Acquisition is expected to complement our existing
solutions for energy efficiency, including our market-leading current sensor
solutions. Additionally, it is expected to significantly expand Allegro's
addressable market for xEV, solar inverters, data center and 5G power supplies,
and broad-market industrial applications. We are currently awaiting regulatory
approval of the transaction, and we anticipate completion of the acquisition by
the third quarter of fiscal 2023.

Other Key Factors and Trends Affecting Our Results of Operations

Our financial condition and results of operations have been and will continue to be affected by many other factors and trends, including the following:

Inflation

Inflation rates in the markets in which we operate have increased and may
continue to rise. Inflation over the last several months has led us to
experience higher costs, including higher labor costs, wafer and other costs for
materials from suppliers, and transportation costs. Our suppliers have raised
their prices and may continue to raise prices, and in the competitive markets in
which we operate, we may not be able to make corresponding price increases to
preserve our gross margins and profitability. If inflation rates continue to
rise or remain elevated for a sustained period of time, they could have a
material adverse effect on our business, financial condition, results of
operations and liquidity.We have generally been able to offset increases in
these costs through various productivity and cost reduction initiatives, as well
as adjusting our selling prices to pass through some of these higher costs to
our customers; however, our ability to raise our selling prices depends on
market conditions and competitive dynamics. Given the timing of our actions
compared to the timing of these inflationary pressures, there may be periods
during which we are unable to fully recover the increases in our costs.

Design wins with new and existing customers

Our end customers continually develop new products in existing and new
application areas, and we work closely with our significant OEM customers in
most of our target markets to understand their product roadmaps and strategies.
For new products, the time from design initiation and manufacturing until we
generate sales can be lengthy, typically between two and four years. As a
result, our future sales is highly dependent on our continued success at winning
design mandates from our customers. Further, despite current inflationary and
pricing conditions, we expect the ASPs of our products to decline over time, and
we consider design wins to be critical to our future success and anticipate
being increasingly dependent on revenue from newer design wins for our newer
products. The selection process is typically lengthy and may require us to incur
significant design and development expenditures in pursuit of a design win with
no assurance that our solutions will be selected. As a result, the loss of any
key design win or any significant delay in the ramp-up of volume production of
the customer's products into which our product is designed could adversely
affect our business. In addition, volume production is contingent upon the
successful introduction and market acceptance of our customers' end products,
which may be affected by several factors beyond our control.

Customer demand, orders and forecasts

Demand for our products is highly dependent on market conditions in the end
markets in which our customers operate, which are generally subject to
seasonality, cyclicality and competitive conditions. In addition, a substantial
portion of our total net sales is derived from sales to customers that purchase
large volumes of our products. These customers generally provide periodic
forecasts of their requirements, but these forecasts do not commit such
customers to minimum purchases, and customers can revise these forecasts without
penalty. In addition, as is customary in the semiconductor industry, customers
are generally permitted to cancel orders for our products within a specified
period. While historically we have permitted order cancellations for most
customers, most of our current customer order backlog is noncancellable, which
helps to mitigate our exposure to unforeseen order cancellations. However,
cancellations of orders could still result in the loss of anticipated sales
without allowing us sufficient time to reduce our inventory and operating
expenses. In addition, changes in forecasts or the timing of orders from
customers exposes us to the risks of inventory shortages or excess inventory. We
continue to see demand for our products exceed supply, and we are currently
operating in an inflationary environment.

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Manufacturing costs and product mix

Gross margin has been, and will continue to be, affected by a variety of
factors, including the ASPs of our products, product mix in a given period,
material costs, yields, manufacturing costs and efficiencies. We believe the
primary driver of gross margin is the ASP negotiated between us and our
customers relative to material costs and yields. Our pricing and margins depend
on the volumes and the features of the products we produce and sell to our
customers. As our products mature and unit volumes increase, despite current
price leverage, we expect their ASPs to decline in the long term. We continually
monitor and work to reduce the cost of our products and improve the potential
value our solutions provide to our customers as we target new design win
opportunities and manage the product life-cycles of our existing customer
designs. We also maintain a close relationship with our suppliers and
subcontractors to improve quality, increase yields and lower manufacturing
costs. As a result, these declines often coincide with improvements in
manufacturing yields and lower wafer, assembly, and testing costs, which offset
some or all of the margin reduction that results from declining ASPs. However,
we expect our gross margin to fluctuate on a quarterly basis as a result of
changes in ASPs due to product mix, new product introductions, transitions into
volume manufacturing and manufacturing costs. Gross margin generally decreases
if production volumes are lower as a result of decreased demand, which leads to
a reduced absorption of our fixed manufacturing costs. Gross margin generally
increases when the opposite occurs.

Cyclical nature of the semiconductor industry

The semiconductor industry has historically been highly cyclical and is
characterized by increasingly rapid technological change, product obsolescence,
competitive pricing pressures, evolving standards, short product life-cycles and
fluctuations in product supply and demand. New technology may result in sudden
changes in system designs or platform changes that may render some of our
products obsolete and require us to devote significant research and development
resources to compete effectively. Periods of rapid growth and capacity expansion
are occasionally followed by significant market corrections in which sales
decline, inventories accumulate and facilities go underutilized. During periods
of expansion, our margins generally improve as fixed costs are spread over
higher manufacturing volumes and unit sales. In addition, we may build inventory
to meet increasing market demand for our products during these times, which
serves to absorb fixed costs further and increase our gross margins. During an
expansion cycle, we may increase capital spending and hiring to add to our
production capacity. During periods of slower growth or industry contractions,
our sales, production and productivity suffer and margins generally decline.

Components of our operating results

Net sales

Our total net sales come from product sales to direct customers and distributors. We sell products worldwide through our direct sales force, third-party and related distributors and independent sales representatives. Sales come from products for different applications. Our main applications are focused on automotive, industrial and other industries.

We sell magnetic sensor ICs, power ICs and photonics in the Americas, EMEA and
Asia. Revenue is generally recognized when control of the products is
transferred to the customer, which typically occurs at a point in time upon
shipment or delivery, depending on the terms of the contract. When we transact
with a distributor, our contractual arrangement is with the distributor and not
with the end customer. Whether we transact business with and receive the order
from a distributor or directly from an end customer through our direct sales
force and independent sales representatives, our revenue recognition policy and
resulting pattern of revenue recognition for the order are the same. We
recognize revenue net of sales returns, price protection adjustments, stock
rotation rights and any other discounts or credits offered to our customers.

Cost of Goods Sold, Gross Profit and Gross Margin

Cost of goods sold consists primarily of costs of purchasing raw materials,
costs associated with probe, assembly, testing and shipping our products, costs
of personnel, including stock-based compensation, costs of equipment associated
with manufacturing, procurement, planning and management of these processes,
costs of depreciation and amortization, costs of logistics and quality
assurance, and costs of royalties, value-added taxes, utilities, repairs and
maintenance of equipment, and an allocated portion of our occupancy costs.

Gross profit is calculated as total net sales less cost of goods sold. Gross
profit is affected by numerous factors, including average selling price, revenue
mix by product, channel and customer, foreign exchange rates, seasonality,
manufacturing costs and the effective utilization of our facilities. Another
factor impacting gross profit is the time required

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for the expansion of existing facilities to reach their full production capacity. Consequently, gross profit varies from period to period and from year to year.

A significant portion of our costs is fixed, and, as a result, costs are
generally difficult to adjust or may take time to adjust in response to changes
in demand. In addition, our fixed costs increase as we expand our capacity. If
we expand capacity faster than required by our sales growth, our gross margin
could be negatively affected. Gross margin is calculated as gross profit divided
by total net sales.

Operating Expenses

Research and development (“R&D”) expenses

R&D expenses consist primarily of personnel-related costs of our research and
development organization, including stock-based compensation, costs of
development of wafers and masks, license fees for computer-aided design
software, costs of development testing and evaluation, costs of developing
automated test programs, equipment depreciation and related occupancy and
equipment costs. While most of the costs incurred are for new product
development, a significant portion of these costs is related to process
technology development and proprietary package development. R&D expenses also
include costs for technology development by external parties. We expect further
increases in R&D expenses, in absolute dollars, as we continue the development
of innovative technologies and processes for new product offerings, as well as
increase the headcount of our R&D personnel in future years.

Selling, general and administrative (“SG&A”) expenses

SG&A expenses consist primarily of personnel-related costs, including
stock-based compensation, and sales commissions to independent sales
representatives, professional fees, including the costs of accounting, audit,
legal, regulatory and tax compliance. Additionally, costs related to
advertising, trade shows, corporate marketing, as well as an allocated portion
of our occupancy costs, also comprise SG&A expenses.

We expect our sales and marketing expenses to increase in absolute terms as we expand our sales force and increase our sales and marketing activities.

Change in fair value of contingent consideration

The change in the fair value of the contingent consideration represents the gain recorded during the three months ended June 24, 2022 resulting from the adjustment of the contingent consideration related to the acquisition of Voxtel, Inc.
(“Voxtel”).

Interest expense, net

Interest expense, net is comprised of interest expense from term loan debt and
credit facilities we maintain with various financial institutions. Current
expense is partially mitigated by income earned on our cash and cash
equivalents, consisting primarily of certain investments that have contractual
maturities no greater than three months at the time of purchase.

Foreign currency transaction gain (loss)

We incur transaction gains and losses resulting from intercompany transactions
as well as transactions with customers or vendors denominated in currencies
other than the functional currency of the legal entity in which the transaction
is recorded.

(Loss) income in profit from participation

The income (loss) in equity investment profit relates to our equity investment in PSL.

Other, net

Net other items primarily consist of various income and expense items not related to our core business.

Provision for income tax

Our provision for income taxes is based on an estimate of the annual effective tax rate plus the tax impact of separate items.

We are subject to tax in the U.S. and various foreign jurisdictions. Our
effective income tax rate fluctuates primarily because of: the change in the mix
of our U.S. and foreign income; the impact of discrete transactions and law
changes; and the difference between the amount of tax benefits generated by the
foreign derived intangible income deduction ("FDII") and

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research credits, offset by the additional tax costs associated with low-tax global intangible income and non-deductible stock-based compensation expenses.

Pursuant to impacts of the 2017 Tax Cuts and Jobs Act, beginning in fiscal year
2023, U.S. tax law now requires us to capitalize and amortize domestic and
foreign research and development expenditures over five and fifteen years,
respectively ("174 Capitalization"). While it is possible that Congress may
defer, modify, or repeal this provision, potentially with retroactive effect, we
have no assurance that this provision will be reversed. Although our first
quarter fiscal 2023 cash from operations was not materially impacted, if
legislation is not passed and made effective retroactively, we estimate the
impact of this legislative change will increase our annual cash taxes by $21.0
million and produce an increased FDII effective tax rate benefit. The actual
impact of 174 Capitalization on cash taxes and the effective tax rate depends on
if Congress passes additional legislation, whether such legislation is made
effective retroactively, the amount of the research and development expenditures
incurred by the Company during the fiscal year, and upon additional guidance the
Internal Revenue Service ("IRS") may issue related to this provision.

We regularly assess the likelihood of outcomes that could result from the
examination of our tax returns by the IRS and other tax authorities to determine
the adequacy of our income tax reserves and expense. Should actual events or
results differ from our then-current expectations, charges or credits to our
provision for income taxes may become necessary. Any such adjustments could have
a significant effect on our results of operations.

Operating results

Three-month period ended June 24, 2022 Compared to the three-month period ended
June 25, 2021

The following table summarizes our results of operations for the three-month periods ended June 24, 2022 and June 25, 2021.

                                                          Three-Month Period Ended                             Change
                                                        June 24,                June 25,
                                                          2022                    2021                $                    %
                                                                               (Dollars in thousands)
Total net sales (1)                               $     217,753               $ 188,142          $  29,611                  15.7  %
Cost of goods sold                                       99,379                  93,982              5,397                   5.7  %
Gross profit                                            118,374                  94,160             24,214                  25.7  %
Operating expenses:
Research and development                                 33,857                  29,554              4,303                  14.6  %
Selling, general and administrative                      69,980                  32,064             37,916                 118.3  %

Change in fair value of contingent consideration           (200)                    300               (500)               (166.7) %
Total operating expenses                                103,637                  61,918             41,719                  67.4  %
Operating income                                         14,737                  32,242            (17,505)                (54.3) %

Other income (expenses), net:

Interest expense, net                                      (120)                   (345)               225                 (65.2) %
Foreign currency transaction gain (loss)                  1,924                    (254)             2,178                (857.5) %
(Loss) income in earnings of equity investment             (864)                    279             (1,143)               (409.7) %
Other, net                                               (3,429)                     48             (3,477)             (7,243.8) %
Total other expense, net                                 (2,489)                   (272)            (2,217)                815.1  %
Income before income tax provision                       12,248                  31,970            (19,722)                (61.7) %
Income tax provision                                      1,965                   4,263             (2,298)                (53.9) %
Net income                                               10,283                  27,707            (17,424)                (62.9) %
Net income attributable to non-controlling
interests                                                    36                      38                 (2)                 (5.3) %
Net income attributable to Allegro MicroSystems,
Inc.                                              $      10,247               $  27,669          $ (17,422)                (63.0) %


(1)Our total net sales for the periods presented above include related party net
sales generated through our distribution agreement with Sanken. See our
unaudited condensed consolidated financial statements included elsewhere in this
Quarterly Report for additional information regarding our related party net
sales for the periods set forth above.

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The following table presents our results of operations as a percentage of total net sales for the periods presented.

                                                                             Three-Month Period Ended
                                                                        June 24,                   June 25,
                                                                          2022                       2021
Total net sales                                                                100.0  %                  100.0  %
Cost of goods sold                                                              45.6  %                   50.0  %
Gross profit                                                                    54.4  %                   50.0  %
Operating expenses:
Research and development                                                        15.5  %                   15.7  %
Selling, general and administrative                                             32.1  %                   17.0  %

Change in fair value of contingent consideration                                (0.1) %                    0.2  %
Total operating expenses                                                        47.5  %                   32.9  %
Operating income                                                                 6.9  %                   17.1  %

Other income (expenses), net:

Interest expense, net                                                           (0.1) %                   (0.2) %
Foreign currency transaction gain (loss)                                         0.9  %                   (0.2) %
(Loss) income in earnings of equity investment                                  (0.4) %                    0.1  %
Other, net                                                                      (1.6) %                    0.1  %
Total other expense, net                                                        (1.2) %                   (0.2) %
Income before income tax provision                                               5.7  %                   16.9  %
Income tax provision                                                             1.0  %                    2.3  %
Net income                                                                       4.7  %                   14.6  %
Net income attributable to non-controlling interests                               -  %                      -  %
Net income attributable to Allegro MicroSystems, Inc.                            4.7  %                   14.6  %


Total net sales
Total net sales increased by $29.6 million, or 15.7%, to $217.8 million in the
three-month period ended June 24, 2022 from $188.1 million in the three-month
period ended June 25, 2021. This increase was primarily attributable to higher
shipment of our data center, advanced driver assistance systems ("ADAS"),
electrified vehicle ("xEV"), and computing applications.

Sales trends by market

The following table summarizes total net sales by market. The categorization of net sales by market is based on the characteristics of the end product and the application in which our product will be designed.

                        Three-Month Period Ended                  Change
                        June 24,            June 25,
                          2022                2021          Amount          %
                                      (Dollars in thousands)
Automotive        $     149,649            $ 133,523      $ 16,126        12.1  %
Industrial               40,140               30,309         9,831        32.4  %
Other                    27,964               24,310         3,654        15.0  %
Total net sales   $     217,753            $ 188,142      $ 29,611        15.7  %


The increase in net sales to our end markets was driven primarily by increases
in automotive of $16.1 million, or 12.1%, industrial of $9.8 million, or 32.4%,
and other of $3.7 million, or 15.0%.

Automotive net sales increased in the three-month period ended June 24, 2022
compared to the three-month period ended June 25, 2021, primarily due to higher
demand for our ADAS and xEV applications.

Industrial net sales increased in the three-month period ended June 24, 2022
compared to the three-month period ended June 25, 2021mainly due to increased demand in data centers and Industry 4.0 applications.

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Other net sales improved over the three-month period ended June 24, 2022
compared to the three-month period ended June 25, 2021mainly due to the increase in demand for certain IT products.

Sales trends by product

The following table summarizes net sales by product:

                                          Three-Month Period Ended                  Change
                                          June 24,            June 25,
                                            2022                2021          Amount          %
                                                        (Dollars in thousands)
Power integrated circuits ("PIC")   $      80,660            $  66,672      $ 13,988        21.0  %
Magnetic sensors ("MS")                   137,050              120,642        16,408        13.6  %
Photonics                                      43                  828          (785)      (94.8) %
Total net sales                     $     217,753            $ 188,142      $ 29,611        15.7  %


The increase in net sales by product was driven by increases of $16.4 million,
or 13.6%, in MS product sales and $14.0 million, or 21.0%, in PIC product sales,
partially offset by a decrease of $0.8 million in Photonics sales.

Sales trends by geographic location

The following table summarizes net sales by geographic location based on ship-to
location.
                        Three-Month Period Ended                  Change
                        June 24,            June 25,
                          2022                2021          Amount         %
                                      (Dollars in thousands)
Americas:
United States     $      28,391            $  26,841      $  1,550        5.8  %
Other Americas            6,487                6,349           138        2.2  %
EMEA:
Europe                   35,333               34,751           582        1.7  %
Asia:
Japan                    41,709               35,453         6,256       17.6  %
Greater China            55,116               42,779        12,337       28.8  %
South Korea              20,979               21,933          (954)      (4.3) %
Other Asia               29,738               20,036         9,702       48.4  %
Total net sales   $     217,753            $ 188,142      $ 29,611       15.7  %


Net sales increased across the majority of our geographic locations in the
three-month period ended June 24, 2022 compared to the three-month period ended
June 25, 2021, primarily due to content and market share gains, as demand for
many of our products and applications continue to rise.

The increase in net sales of $12.3 million, or 28.8%, in Greater China related
to higher automotive demand, primarily in our ADAS and xEV offerings. Other Asia
experienced sales growth of $9.7 million, or 48.4%, mainly in our data center
sector. Net sales in Japan grew $6.3 million, or 17.6%, which was primarily
driven by higher demand for our safety, comfort and convenience, xEV and
industrial applications. The increase in net sales in the United States of $1.6
million, or 5.8%, was primarily driven by content and market share gains in our
ADAS applications.

Cost of Goods Sold, Gross Profit and Gross Margin

Cost of goods sold increased by $5.4 million, or 5.7%, to $99.4 million in the
three-month period ended June 24, 2022 from $94.0 million in the three-month
period ended June 25, 2021. The increase in cost of goods sold was primarily
attributable to higher sales volume.

Gross profit increased by $24.2 millioni.e. 25.7%, at $118.4 million during the three-month period ended June 24, 2022 of $94.2 million during the three-month period ended June 25, 2021. The increase in gross margin is explained by the $29.6

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million increase in total net sales in all end markets discussed above, partially offset by the impacts on cost of goods sold discussed above.

R&D costs

R&D expenses increased by $4.3 million, or 14.6%, to $33.9 million in the
three-month period ended June 24, 2022 from $29.6 million in the three-month
period ended June 25, 2021. This increase was primarily due to a combined $3.8
million increase in personnel costs, including variable compensation costs, and
general operating expenses and higher stock-based compensation expense of $0.4
million.

R&D expenses represented 15.5% of our total net sales for the three-month period
ended June 24, 2022, a decrease from 15.7% of our total net sales for the
three-month period ended June 25, 2021. This percentage decrease was primarily
due to the growth in net sales in the three-month period ended June 24, 2022.

SG&A expenses
SG&A expenses increased by $38.0 million, or 118.3%, to $70.0 million in the
three-month period ended June 24, 2022 from $32.1 million in the three-month
period ended June 25, 2021. This increase was primarily due to an increase of
$28.6 million in stock-based compensation expense, including accelerated expense
from the retirement of our former chief executive officer of approximately $26.3
million, as well as higher personnel costs, including variable compensation
costs, of $4.4 million and combined costs of $1.6 million comprised of
professional fees and dues and subscription costs. In addition, we recognized
$3.8 million of severance and other transition costs mainly due to the combined
impacts of our recent changes in leadership.

SG&A expenses represented 32.1% of our total net sales for the three-month period ended June 24, 2022an increase from 17.0% of our total net sales for the three-month period ended June 25, 2021. This percentage increase is mainly attributable to the aforementioned impacts, partially offset by the growth in net sales during the three-month period ended. June 24, 2022.

Interest expense, net

Interest expense, net was $0.1 million in the three-month period ended June 24,
2022 compared to $0.3 million in the three-month period ended June 25, 2021. The
decrease in interest expense was primarily due to higher interest income
received from a related party in the first quarter of 2023. The mandatory
interest payments on the Term Loan Facility remained relatively consistent.

Foreign currency transaction gain (loss)

We recorded a foreign currency transaction gain of $1.9 million in the
three-month period ended June 24, 2022 compared to a loss of $0.3 million in the
three-month period ended June 25, 2021. The foreign currency transaction gains
or losses recorded in each three-month period were primarily due to the realized
and unrealized gains or losses from our UK location.

(Loss) income in profit from participation

(Loss) income in earnings of equity investment reflected losses of $0.9 million
and gains of $0.3 million in the three-month period ended June 24, 2022 and
June 25, 2021, respectively, representing the earnings on our 30% investment in
PSL.

Other, net

Other, net decreased by $3.5 million to a loss of more than $3.4 million in the
three-month period ended June 24, 2022 from less than $0.1 million of gains in
the three-month period ended June 25, 2021. The decrease in the three-month
period ended June 24, 2022 was primarily due to $3.5 million of unrealized
losses on marketable securities.

Income tax provision
Income tax expense and the effective income tax rate were $2.0 million, or
16.0%, and $4.3 million, or 13.3%, respectively, in the three-month period ended
June 24, 2022 and June 25, 2021, respectively. The quarter ending June 25, 2021
effective tax rate was favorably impacted by one-time state tax refunds. Current
year 174 Capitalization resulted in increased U.S. taxable income and cash
taxes; however, it also produced an additional FDII benefit of $9.0 million with
offsetting inclusions from Subpart F of $2.8 million. The net current year
benefits of 174 Capitalization were offset by an increase in current year
non-deductible executive compensation of approximately $6.7 million.

Non-GAAP Financial Measures

In addition to the measures presented in our consolidated financial statements, we regularly review other measures,

                                       31
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defined as non-GAAP financial measures by the SEC, to evaluate our business,
measure our performance, identify trends, prepare financial forecasts and make
strategic decisions. The key measures we consider are non-GAAP Gross Profit,
non-GAAP Gross Margin, non-GAAP Operating Expenses, non-GAAP Operating Income,
non-GAAP Operating Margin, non-GAAP Profit before Tax, non-GAAP Provision for
Income Tax, non-GAAP Net Income, non-GAAP Net Earnings per Share, EBITDA,
Adjusted EBITDA and Adjusted EBITDA margin (collectively, the "Non-GAAP
Financial Measures"). These Non-GAAP Financial Measures provide supplemental
information regarding our operating performance on a non-GAAP basis that
excludes certain gains, losses and charges of a non-cash nature or that occur
relatively infrequently and/or that management considers to be unrelated to our
core operations, and in the case of non-GAAP Provision for Income Tax,
management believes that this non-GAAP measure of income taxes provides it with
the ability to evaluate the non-GAAP Provision for Income Taxes across different
reporting periods on a consistent basis, independent of special items and
discrete items, which may vary in size and frequency. By presenting these
Non-GAAP Financial Measures, we provide a basis for comparison of our business
operations between periods by excluding items that we do not believe are
indicative of our core operating performance, and we believe that investors'
understanding of our performance is enhanced by our presenting these Non-GAAP
Financial Measures, as they provide a reasonable basis for comparing our ongoing
results of operations. Management believes that tracking and presenting these
Non-GAAP Financial Measures provides management and the investment community
with valuable insight into matters such as: our ongoing core operations; our
ability to generate cash to service our debt and fund our operations; and the
underlying business trends that are affecting our performance. These Non-GAAP
Financial Measures are used by both management and our board of directors,
together with the comparable GAAP information, in evaluating our current
performance and planning our future business activities. In particular,
management finds it useful to exclude non-cash charges in order to better
correlate our operating activities with our ability to generate cash from
operations and to exclude certain cash charges as a means of more accurately
predicting our liquidity requirements. We believe that these Non-GAAP Financial
Measures, when used in conjunction with our GAAP financial information, also
allow investors to better evaluate our financial performance in comparison to
other periods and to other companies in our industry.

These non-GAAP financial measures have significant limitations as analytical tools. Some of these limitations are:

•these measures do not reflect our cash expenditures, our future capital expenditure needs or our contractual commitments;

•these measures exclude certain costs that are important in analyzing our GAAP results;

•these measures do not reflect changes in or cash requirements for our working capital requirements;

•these measures do not reflect interest charges or cash requirements to service interest or principal payments on our debt;

•these measures do not reflect our tax burden or cash requirements to pay our taxes;

•although depreciation and amortization are non-cash charges, depreciated assets will often need to be replaced in the future;

•some measures do not reflect the cash requirements for these replacements; and

•Other companies in our industry may calculate these measures differently than we do, which further limits their usefulness as comparative measures.

The Non-GAAP Financial Measures are supplemental measures of our performance
that are neither required by, nor presented in accordance with, GAAP. These
Non-GAAP Financial Measures should not be considered as substitutes for GAAP
financial measures such as gross profit, gross margin, net income or any other
performance measures derived in accordance with GAAP. Also, in the future we may
incur expenses or charges such as those being adjusted in the calculation of
these Non-GAAP Financial Measures. Our presentation of these Non-GAAP Financial
Measures should not be construed as an inference that future results will be
unaffected by unusual or nonrecurring items.

Our prior disclosure referred to non-GAAP Gross Profit and non-GAAP Gross Margin
as Adjusted Gross Profit and Adjusted Gross Margin, respectively. No changes
have been made to how we calculate these measures.

Non-GAAP Gross Profit and Non-GAAP Gross Margin

We calculate non-GAAP Gross Profit and non-GAAP Gross Margin excluding the items
below from cost of goods sold in applicable periods, and we calculate non-GAAP
Gross Margin as non-GAAP Gross Profit divided by total net sales.

                                       32
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• Voxtel Inventory Depreciation – Represents the costs associated with discontinuing one of our product lines manufactured by Voxtel.

•Stock-based compensation-Represents non-cash expenses arising from the grant of
stock-based awards. A significant portion of the cost included in fiscal year
2023 related to retirement of our former CEO.

•AMTC Facility consolidation one-time costs-Represents one-time costs incurred
in connection with closing of the AMTC Facility and transitioning of test and
assembly functions to the AMPI Facility announced in fiscal year 2020,
consisting of: moving equipment between facilities, contract terminations and
other non-recurring charges. The closure and transition of the AMTC Facility was
substantially completed as of the end of March 2021, and we sold the AMTC
Facility in August 2021.

•Amortization of acquisition-related intangible assets-Represents non-cash
expenses associated with the amortization of intangible assets in connection
with the acquisition of Voxtel, which closed in August 2020.

•COVID-19 related expenses-Represents expenses attributable to the COVID-19
pandemic primarily related to increased purchases of masks, gloves and other
protective materials, and overtime premium compensation paid for maintaining
24-hour service at the AMPI Facility through fiscal year 2022.

Non-GAAP Operating Expenses, Non-GAAP Operating Income and Non-GAAP Operating Margin

We calculate non-GAAP Operating Expenses and non-GAAP Operating Income excluding
the same items excluded above to the extent they are classified as operating
expenses, and also excluding the items below in applicable periods. We calculate
non-GAAP Operating Margin as non-GAAP Operating Income divided by total net
sales.

•Transaction fees-Represents transaction-related legal and consulting fees
incurred primarily in connection with (i) one-time transaction-related legal,
consulting and registration fees related to a secondary offering on behalf of
certain stockholders in fiscal 2022 and (ii) one-time transaction-related legal
and consulting fees in fiscal 2023 and 2022 not related to (i).

•Severance-Represents (i) severance costs associated with the closing of the
AMTC Facility and the transitioning of test and assembly functions to the AMPI
Facility announced and initiated in fiscal year 2020, (ii) severance costs
related to the discontinuation of one of our product lines manufactured by
Voxtel in fiscal year 2022, and (iii) nonrecurring separation costs related to
the departures of executive officers in fiscal years 2023 and 2022.

•Change in fair value of contingent consideration-Represents the change in fair
value of contingent consideration payable in connection with the acquisition of
Voxtel.

EBITDA, Adjusted EBITDA and Adjusted EBITDA margin

We calculate EBITDA as net income minus interest income (expense), tax provision
(benefit), and depreciation and amortization expenses. We calculate Adjusted
EBITDA as EBITDA excluding the same items excluded above and also excluding the
items below in applicable periods. We calculate Adjusted EBITDA Margin as
Adjusted EBITDA divided by total net sales.

• Non-core loss (gain) on sale of equipment – Represents miscellaneous non-core losses and gains on the sale of equipment.

•Foreign currency translation (gain) loss-Represents losses and gains resulting
from the remeasurement and settlement of intercompany debt and operational
transactions, as well as transactions with external customers or vendors
denominated in currencies other than the functional currency of the legal entity
in which the transaction is recorded.

• (Loss) Income in Equity Earnings – Represents our equity method investment in PSL.

• Unrealized Loss on Investments – Represents adjustments to the market value of equity investments whose fair value is readily determinable.

Non-GAAP earnings before tax, non-GAAP net income, and non-GAAP basic and diluted earnings per share

We calculate non-GAAP Profit before Tax as Income before Income Taxes excluding
the same items excluded above. We calculate non-GAAP Net Income as Net Income
excluding the same items excluded above and also excluding the item below in
applicable periods.

                                       33
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Non-GAAP provision for income tax

In calculating the non-GAAP income tax provision, we have added the following items to the GAAP income tax provision:

• Tax effect of adjustments to GAAP earnings – Represents the estimated tax impact of the adjustments to non-GAAP pre-tax earnings described above and the elimination of discrete tax adjustments.

                                                                                           Three-Month Period Ended
                                                                        June 24,                   March 25,                  June 25,
                                                                          2022                       2022                       2021
                                                                                            (Dollars in thousands)

Reconciliation of Non-GAAP Gross Profit

GAAP Gross Profit                                                  $           118,374       $             109,603       $            94,160

Voxtel inventory impairment                                                          -                           -                     2,835
Stock-based compensation                                                           832                       1,184                       528
AMTC Facility consolidation one-time costs                                           -                           -                       137
Amortization of acquisition-related intangible assets                              273                         273                       273
COVID-19 related expenses                                                            -                         296                       343
Total Non-GAAP Adjustments                                         $             1,105       $               1,753       $             4,116

Non-GAAP Gross Profit                                              $           119,479       $             111,356       $            98,276
Non-GAAP Gross Margin                                                            54.9%                       55.6%                     52.2%


                                       34
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                                                                   Three-Month Period Ended
                                                            June 24,       March 25,      June 25,
                                                              2022           2022           2021
                                                                    (Dollars in thousands)
Reconciliation of Non-GAAP Operating Expenses

GAAP Operating Expenses                                    $ 103,637      $ 

79,354 $61,918

Research and Development Expenses
GAAP Research and Development Expenses                        33,857         32,432        29,554
Stock-based compensation                                       1,128          1,119           752
AMTC Facility consolidation one-time costs                         -              -             2

COVID-19 related expenses                                          -              3             6
Transaction fees                                                 202              5             -

Non-GAAP Research and Development Expenses                    32,527        

31,305 28,794

Selling, General and Administrative Expenses
GAAP Selling, General and Administrative Expenses             69,980         46,822        32,064
Stock-based compensation                                      32,176         12,598         3,551
AMTC Facility consolidation one-time costs                        96             74           324
Amortization of acquisition-related intangible assets             22             22            29
COVID-19 related expenses                                          -            215           381
Transaction fees                                               1,597            384            23
Severance                                                      4,186              -           168

Non-GAAP selling, general and administrative expenses 31,903

33,529 27,588

Change in fair value of contingent consideration                (200)           100           300

Total Non-GAAP Adjustments                                    39,207         14,520         5,536

Non-GAAP Operating Expenses                                $  64,430      $  64,834      $ 56,382


                                       35
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                                                                                           Three-Month Period Ended
                                                                        June 24,                  March 25,                  June 25,
                                                                          2022                       2022                      2021
                                                                                            (Dollars in thousands)

Reconciliation of Non-GAAP Operating Income

GAAP Operating Income                                              $            14,737       $             30,249       $            32,242

Voxtel inventory impairment                                                          -                          -                     2,835
Stock-based compensation                                                        34,136                     14,901                     4,831
AMTC Facility consolidation one-time costs                                          96                         74                       463
Amortization of acquisition-related intangible assets                              295                        295                       302
COVID-19 related expenses                                                            -                        514                       730

Change in fair value of contingent consideration                                 (200)                        100                       300
Transaction fees                                                                 1,799                        389                        23
Severance                                                                        4,186                          -                       168
Total Non-GAAP Adjustments                                         $            40,312       $             16,273       $             9,652

Non-GAAP Operating Income                                          $            55,049       $             46,522       $            41,894
Non-GAAP Operating Margin (% of net sales)                                       25.3%                      23.2%                     22.3%



                                                                                         Three-Month Period Ended
                                                                      June 24,                  March 25,                  June 25,
                                                                        2022                       2022                      2021
                                                                                          (Dollars in thousands)

Reconciliation of EBITDA and Adjusted EBITDA

GAAP Net Income                                                  $            10,283       $             25,652       $            27,707

Interest expense (income), net                                                   120                      (707)                       345
Income tax provision                                                           1,965                      4,504                     4,263
Depreciation & amortization                                                   11,918                     12,006                    12,172
EBITDA                                                           $            24,286       $             41,455       $            44,487

Non-core (gain) loss on sale of equipment                                        (3)                          1                      (35)
Voxtel inventory impairment                                                        -                          -                     2,835

Foreign currency translation (gain) loss                                     (1,924)                        513                       254
Loss (income) in earnings of equity investment                                   864                      (215)                     (279)
Unrealized loss on investments                                                 3,486                        760                         -
Stock-based compensation                                                      34,136                     14,901                     4,831
AMTC Facility consolidation one-time costs                                        96                         74                       463
COVID-19 related expenses                                                          -                        514                       730

Change in fair value of contingent consideration                               (200)                        100                       300
Transaction fees                                                               1,799                        389                        23
Severance                                                                      4,186                          -                       168
Adjusted EBITDA                                                  $            66,726       $             58,492       $            53,777
Adjusted EBITDA Margin (% of net sales)                                        30.6%                      29.2%                     28.6%


                                       36
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                                                                               Three-Month Period Ended
                                                                    June 24,          March 25,          June 25,
                                                                      2022               2022              2021
                                                                                (Dollars in thousands)
Reconciliation of Non-GAAP Profit before Tax

GAAP Income before Tax Provision                                   $ 12,248 

$30,156 $31,970

Non-core (gain) loss on sale of equipment                                (3)                 1               (35)
Voxtel inventory impairment                                               -                  -             2,835

Foreign currency translation (gain) loss                             (1,924)               513               254
Loss (income) in earnings of equity investment                          864               (215)             (279)
Unrealized loss on investments                                        3,486                760                 -
Stock-based compensation                                             34,136             14,901             4,831
AMTC Facility consolidation one-time costs                               96                 74               463
Amortization of acquisition-related intangible assets                   295                295               302
COVID-19 related expenses                                                 -                514               730

Change in fair value of contingent consideration                       (200)               100               300
Transaction fees                                                      1,799                389                23
Severance                                                             4,186                  -               168
Total Non-GAAP Adjustments                                         $ 42,735          $  17,332          $  9,592

Non-GAAP Profit before Tax                                         $ 54,983          $  47,488          $ 41,562



                                                                                         Three-Month Period Ended
                                                                      June 24,                  March 25,                  June 25,
                                                                        2022                       2022                      2021
                                                                                          (Dollars in thousands)

Reconciliation of non-GAAP provision for income taxes

 GAAP Income Tax Provision                                       $             1,965       $              4,504       $             4,263
GAAP effective tax rate                                                        16.0%                      14.9%                     13.3%

Tax effect of adjustments to GAAP results                                      5,900                      2,817                     2,091

Non-GAAP Provision for Income Taxes                              $             7,865       $              7,321       $             6,354
Non-GAAP effective tax rate                                                    14.3%                      15.4%                     15.3%


                                       37
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                                                                                      Three-Month Period Ended
                                                                       June 24,               March 25,               June 25,
                                                                         2022                   2022                    2021
                                                                                       (Dollars in thousands)

Reconciliation of non-GAAP net income

GAAP Net Income                                                    $      

10,283 $25,652 $27,707
GAAP basic earnings per share

                                      $        

$0.05 0.14 $0.15
Diluted earnings per share under GAAP

                                    $        

$0.05 0.13 $0.14

Non-core (gain) loss on sale of equipment                                     (3)                      1                    (35)
Voxtel inventory impairment                                                    -                       -                  2,835

Foreign currency translation (gain) loss                                  (1,924)                    513                    254
Loss (income) in earnings of equity investment                               864                    (215)                  (279)
Unrealized loss on investments                                             3,486                     760                      -
Stock-based compensation                                                  34,136                  14,901                  4,831
AMTC Facility consolidation one-time costs                                    96                      74                    463
Amortization of acquisition-related intangible assets                        295                     295                    302
COVID-19 related expenses                                                      -                     514                    730

Change in fair value of contingent consideration                            (200)                    100                    300
Transaction fees                                                           1,799                     389                     23
Severance                                                                  4,186                       -                    168
Tax effect of adjustments to GAAP results                                 (5,900)                 (2,817)                (2,091)

Non-GAAP Net Income                                                $      

47 118 $40,167 $35,208
Basic weighted average common stock

                                 190,638,135             189,997,738            189,585,381
Diluted weighted average common shares                               192,406,276             192,125,252            191,163,074
Non-GAAP Basic Earnings per Share                                  $        

$0.25 0.21 $0.19
Non-GAAP diluted earnings per share

                                $        

$0.24 0.21 $0.18

Cash and capital resources

As of June 24, 2022, we had $286.6 million of cash and cash equivalents and
$417.2 million of working capital compared to $282.4 million of cash and cash
equivalents and $407.5 million of working capital as of March 25, 2022. Working
capital is impacted by the timing and extent of our business needs.

Our primary requirements for liquidity and capital are working capital, capital
expenditures, principal and interest payments on our outstanding debt and other
general corporate needs. Historically, these cash requirements have been met
through cash provided by operating activities and cash and cash equivalents. Our
current capital deployment strategy for 2023 is to invest excess cash on hand to
support our continued growth initiatives into select markets, planned capital
expenditures and strategic arrangements, as well as consider potential
acquisitions. As of June 24, 2022, the Company is not party to any off-balance
sheet arrangements that have or are reasonably likely to have a current or
future material effect on our financial condition, results of operations,
liquidity, capital expenditures, or capital resources. The cash requirements for
the upcoming fiscal year relate to our operating leases, operating and capital
purchase commitments and expected contributions to our defined benefit and
contribution plans. For information regarding the Company's expected cash
requirements and timing of payments related to leases and noncancellable
purchase commitments, see Note 17, "Commitments and Contingencies" to the
Company's 2022 Annual Report. Additionally, refer to Note 16, "Retirement Plans"
to the Company's 2022 Annual Report for more information related to the
Company's pension and defined contribution plans.

                                       38
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We believe that our existing cash will be sufficient to finance our continued
operations, growth strategy, planned capital expenditures and the additional
expenses that we expect to incur during the next 12 months. In order to support
and achieve our future growth plans, we may need or seek advantageously to
obtain additional funding through equity or debt financing. We believe that our
current operating structure will facilitate sufficient cash flows from
operations to satisfy our expected long-term liquidity requirements beyond the
next 12 months. If these resources are not sufficient to satisfy our liquidity
requirements due to changes in circumstances, we may be required to seek
additional financing. If we raise additional funds by issuing equity securities,
our stockholders will experience dilution. Debt financing, if available, may
contain covenants that significantly restrict our operations or our ability to
obtain additional debt financing in the future. Any additional financing that we
raise may contain terms that are not favorable to us or our stockholders. We
cannot assure you that we would be able to obtain additional financing on terms
favorable to us or our existing stockholders, or at all.

Cash flow from operating, investing and financing activities

The following table summarizes our cash flows for the three months ended
June 24, 2022 and June 25, 2021:

                                                                      Three-Month Period Ended
                                                               June 24, 2022           June 25, 2021
                                                                       (dollars in thousands)
Net cash provided by operating activities                     $      36,553          $       38,495
Net cash used in investing activities                               (14,389)                (15,346)
Net cash used in financing activities                                (9,137)                      -

Effect of changes in exchange rates on cash and cash equivalents (6,554)

                  2,608

Net increase in cash and cash equivalents and restricted cash $6,473

         $       25,757


Operating Activities

Net cash provided by operating activities was $36.6 million in the three months
ended June 24, 2022, resulting primarily from our net income of $10.3 million
and noncash charges of $44.2 million, partially offset by a net decrease in
operating assets and liabilities of $17.9 million. Net changes in operating
assets and liabilities consisted of a $13.1 million increase in prepaid
expenses, a $4.9 million increase in inventories, a $4.7 million increase in
trade accounts receivable, net, and a $3.3 million decrease in net amounts due
from related parties, partially offset by a $1.2 million increase in accrued
expenses and other current and long-term liabilities, a $4.1 million increase in
trade accounts payable and a $2.7 million decrease in other accounts receivable.
The increase in prepaid expenses and other assets was primarily due to higher
long-term deposits and the timing of tax payments, including value-added taxes
receivable, insurance and contract costs. The increase in inventories was
primarily the result of inventory builds to support anticipated sales growth in
fiscal 2023. The increase in trade accounts receivable, net was primarily a
result of increased sales year-over-year, as well as the timing of receipts from
customers. The decrease in net amounts due to related parties was primarily due
to variations in the timing of such payments in the ordinary course of business.
The increase in accrued expenses and other current and long-term liabilities was
primarily the result of higher accrued income taxes and accrued personnel costs,
partially offset by higher management incentive payments. Accounts payable
increased mainly due to the timing of payments to suppliers and vendors,
partially offset by higher operating purchases, including unpaid capital
expenditures of $2.6 million. The decrease in accounts receivable - other was
primarily due to increased distributor sales year-over-year, as well as the
timing of receipts from Sanken.

Net cash provided by operating activities was $38.5 million in the three months
ended June 25, 2021, resulting primarily from our net income of $27.7 million
and noncash charges of $17.5 million, partially offset by a net decrease in
operating assets and liabilities of $6.7 million. Net changes in operating
assets and liabilities consisted of a $10.0 million increase in trade accounts
receivable, net, a $2.4 million decrease in accrued expenses and other current
and long-term liabilities and a $3.0 million decrease in trade accounts payable,
partially offset by a $5.1 million decrease in inventories, a $1.7 million
decrease in prepaid expenses, and a $1.9 million increase in net amounts due
from related parties. The increase in trade accounts receivable, net was
primarily a result of increased sales year-over-year, as well as the timing of
receipts from customers. The decrease in accrued expenses and other current and
long-term liabilities was primarily the result of management incentive payments,
partially offset by higher accrued personnel costs. Accounts payable decreased
mainly due to the timing of payments to suppliers and vendors, partially offset
by higher operating purchases, including unpaid capital expenditures of $5.5
million. The decrease in inventories was primarily a result of the continued
drawdown after building inventory up in prior periods to support anticipated
sales growth and recovery from the COVID-19 pandemic. The decrease in prepaid
expenses and other assets was primarily due to the timing of tax payments,
including value-added taxes receivable,

                                       39
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insurance and contract costs. The increase in net amounts due to related parties
was primarily due to variations in the timing of such payments in the ordinary
course of business.

Investing Activities

Net cash used in investing activities consists primarily of purchases of property, plant and equipment, partially offset by proceeds from the sale of property, plant and equipment.

Net cash used in investing activities was $14.4 million within three months June 24, 2022consisting of acquisitions of property, plant and equipment.

Net cash used in investing activities was $15.3 million within three months June 25, 2021consisting of acquisitions of property, plant and equipment.

Fundraising activities

Net cash used in financing activities was $9.1 million in the three months ended
June 24, 2022, consisting of taxes related to the net settlement of equity
awards, partially offset by proceeds received related to the quarterly payment
from PSL on our related party loan.

No net cash was used for financing activities during the three months ended
June 25, 2021.

Debt Obligations

On September 30, 2020, we entered into a term loan credit agreement with Credit
Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent,
and the other agents, arrangers and lenders party thereto, providing for a
$325.0 million senior secured term loan facility due in 2027 (the "Term Loan
Facility"). On September 30, 2020, we also entered into a revolving facility
credit agreement with Mizuho Bank, Ltd., as administrative agent and collateral
agent, and the other agents, arrangers and lenders party thereto, providing for
a $50.0 million senior secured revolving credit facility expiring in 2023 (the
"Revolving Credit Facility" and, together with the Term Loan Facility, the
"Senior Secured Credit Facilities"). As of June 24, 2022, we had $25.0 million
in aggregate principal amount of debt outstanding under our Senior Secured
Credit Facilities. There were no material changes in our debt obligations from
those disclosed in our 2022 Annual Report.

AMPI credit facilities

Refer to Note 10, “Debt and Other Borrowings” for more information on line of credit arrangements in our Philippines site.

Recent accounting pronouncements

See Note 2, "Summary of Significant Accounting Policies" in the unaudited
condensed consolidated financial statements included elsewhere in this Quarterly
Report for a full description of recent accounting pronouncements, including the
respective dates of adoption or expected adoption and effects on our condensed
consolidated financial statements contained in Item 1 of this Quarterly Report.

Critical accounting estimates

The preparation of financial statements in conformity with U.S. GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets, liabilities, and disclosures of contingencies at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Our significant accounting policies are described in Note
2, "Summary of Significant Accounting Policies" to our consolidated financial
statements included in our 2022 Annual Report. There have been no material
changes in our critical accounting policies and estimates since March 25, 2022.

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