UCTT Filings — Ultra Clean Holdings, Inc. - FilingSpy
UCTT
Ultra Clean Holdings, Inc.
A supplier of critical parts and services for the semiconductor industry, Ultra Clean Holdings designs gas and fluid delivery systems, precision robotics, and process modules used in chip-making equipment, and runs ultra-high purity parts cleaning and coating services for chipmakers' tools. Its customers include equipment makers like Applied Materials and Lam Research as well as semiconductor device manufacturers, with operations reaching Asia Pacific and EMEA.
Revenue rose 24% to $645M and operating income swung to a $29.5M profit after a prior-year goodwill impairment.
returned to positive territory after a year-ago . rose 24.3% to $644.9 million and expanded 0.8 points to 16.1% as semiconductor demand recovered and Products volumes climbed. The company repaid its term loan with convertible note proceeds, eliminating most variable-rate debt but introducing potential future .
Key takeaways
swung to $29.5 million from a $141.8 million loss a year ago, when a $151.1 million non-cash charge had pushed results deep into the red.
rose 24.3% to $644.9 million, driven by a 25.9% increase in Products revenue to $572.7 million on stronger semiconductor industry demand.
Products expanded 1.1 points to 14.6%, as higher volumes, favorable product mix, and improved fixed-cost absorption offset the pressures that had compressed margins in recent quarters.
Section summaries
Management's Discussion and Analysis
Revenue rose 24% to $645M on semiconductor demand recovery; operating profit swung positive after prior-year goodwill impairments.
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Total grew 24.3% to $644.9M in Q2 FY2026, driven by a 25.9% jump in Products revenue to $572.7M on stronger semiconductor industry demand.
fell 89% to $1.1 million after the company used proceeds from a $600 million issuance to repay the remaining $481.5 million of its term loan, substantially reducing variable-rate debt.
Cash used in operations was $74.4 million for the first half of the fiscal year, as inventories rose $238.9 million to support higher production, partially offset by a $104.4 million increase in .
A discrete tax expense of $15.1 million, recorded for a planned distribution of China subsidiary earnings, pushed the to 60.3% for the quarter and contributed to of $8.7 million.
What changed
The $151.1 million that defined Q2 FY2025 did not recur, allowing to swing from a $141.8 million loss to a $29.5 million profit — the question of further write-downs flagged last quarter appears resolved for now.
Products , which had fallen to 13.5% in Q2 FY2025 and was flagged as a key watch item, recovered to 14.6% as higher volumes and improved fixed-cost absorption took hold.
The $91.0 million build flagged in Q1 FY2026 accelerated: inventories rose another $147.9 million in Q2, bringing the first-half increase to $238.9 million, and remained negative at -$41.1 million for the quarter.
The term loan repayment flagged as a capital-structure shift in Q1 is now complete — the full $481.5 million was paid off, leaving only $15.0 million drawn on the as variable-rate debt.
The SEC investigation and securities class action flagged in earlier periods were both resolved in FY2025 with no enforcement action and voluntary dismissal, respectively, removing those sources of uncertainty.
What to watch
Whether the $238.9 million build begins to reverse in the second half, and what that means for after a first half that used $74.4 million.
Whether Products at 14.6% can continue to expand toward the pre-downturn range of 17-18% as volumes rise, or whether product mix and geographic shifts cap the recovery.
Whether the $600 million trigger conversion conditions that would reclassify them as a current liability, reducing reported even if no notes actually convert.
The trajectory of Services , which rose 10.4% in Q1 FY2026, and whether it can sustain growth as a counterweight to any softening in the Products .
Products expanded 110 to 14.6% due to higher volumes, favorable product mix, and improved fixed-cost absorption.
swung to $29.5M from a $141.8M loss a year ago, primarily because the prior period included $151.1M in charges.
fell 89% to $1.1M after repaying the term loan with proceeds from a $600M issuance; the was upsized to $250M.
Cash used in operations was $74.4M for the first half as inventories rose $238.9M to support higher production, partially offset by a $104.4M increase in .
A discrete tax expense of $15.1M was recorded in H1 FY2026 from a China earnings distribution, pushing the to 60.3% for the quarter.
Quantitative and Qualitative Disclosures About Market Risk
During the six months ended June 26, 2026, the Company repaid the remaining $481.5 million outstanding under its term loan facility, resulting in the term loan being fully paid off as of June 26, 2026. This significantly reduced the Company's variable-rate debt and corresponding…
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During the six months ended June 26, 2026, the Company repaid the remaining $481.5 million outstanding under its term loan facility, resulting in the term loan being fully paid off as of June 26, 2026. This significantly reduced the Company's variable-rate debt and corresponding exposure to interest rate risk. As of June 26, 2026, the Company's remaining variable-rate debt consisted of$15.0 million outstanding under its revolving credit facility. A hypothetical 100 basis point increase in borrowing rates on this outstanding balance would not have a material impact on the Company's results of operations. Refer to Part II, Item 7A. “Quantitative and Qualitative Disclosures about Market Risk” included in our Annual Report on Form 10-K for our fiscal year ended December 26, 2025, for a more complete discussion of the market risks we encounter.
From time to time, we are subject to various legal proceedings and claims, either asserted or unasserted, that arise in the ordinary course of business. Although the outcome of the various legal proceedings and claims cannot be predicted with certainty, we have not had a history…
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From time to time, we are subject to various legal proceedings and claims, either asserted or unasserted, that arise in the ordinary course of business. Although the outcome of the various legal proceedings and claims cannot be predicted with certainty, we have not had a history of outcomes to date that have been material to our Condensed Consolidated Statement of Operations and do not believe that any of these proceedings or other claims will have a material adverse effect on our condensed consolidated financial condition or results of operations.
New $600M convertible notes and existing debt create material liquidity, covenant, and stock-price risks.
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A $600M convertible note issuance in March 2026 and $15M in credit-agreement borrowings raise debt-service burdens, limiting cash for operations and growth.
Credit-agreement covenants restrict additional debt, liens, investments, and M&A; a breach could accelerate all outstanding debt.
Holders can require cash of the 2031 Convertible Notes upon a fundamental change, and all conversions settle partly or fully in cash, straining liquidity.
A default under either the credit agreement or the note indenture cross-defaults the other, potentially making all debt immediately due.
Capped call counterparties' hedging and unwind activity may increase or decrease the common stock price, and failure of the capped calls could depress it.
If conversion conditions are met, the notes may be reclassified as a , reducing reported even if no notes convert.