The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our “Condensed Consolidated Financial Statements” in Item 1 of this Quarterly Report on Form 10-Q (“Quarterly Report”) and our consolidated financial statements and related notes included in “Item 8. Financial Statements and Supplementary Data” in our 2025 Form 10-K. Overview We provide equipment, consumables and services for semiconductor device packaging, wafer production and device fabrication. Our products are used to fabricate and package semiconductor devices, such as graphic processing units (GPUs) used in AI applications, silicon carbide (SiC) and silicon (Si) power devices and other optical, analog and digital devices. We sell these products to semiconductor device packaging, electronic assembly and device fabrication companies worldwide. We operate in two reportable segments, based primarily on the industries they serve: (i) Thermal Processing Solutions and (ii) Semiconductor Fabrication Solutions. Our Thermal Processing Solutions includes conveyorized reflow equipment for advanced semiconductor packaging and electronic assembly, high temperature conveyorized furnaces for power semiconductor substrate and electronic components manufacturing, and diffusion furnaces for SiC and Si power device production. Our Semiconductor Fabrication Solutions includes consumables, equipment and services for wafer polishing, dicing and cleaning. The markets we serve are historically cyclical, but not seasonal, with constantly evolving technical requirements and can be subject to tariffs and sourcing restrictions driven by geopolitical tensions. Our revenue is impacted by these broad industry trends. Growth and Investment Strategy We believe there are three key secular trends that are key to our future growth: •Artificial Intelligence - With AI, we believe our reflow oven systems are the favored choice for Outsourced Semiconductor Assembly and Test Services (OSATS) providers who perform advanced packaging of the AI chips. •Supply Chain Resiliency - There is a global trend of creating supply chain resiliency by expanding and/or relocating operations outside of mainland China. We believe these factory openings will create demand for new equipment and services in growing regions like Southeast Asia and Mexico. •Advanced Mobility - Advanced Mobility encompasses both the development and adoption of electric vehicles and charging infrastructure, including both electric vehicle (EV) and hybrid electric vehicles (HEV), as well as advanced automotive electronics including Advanced Driver Assistance Systems (ADAS), infotainment and telematics. Our products intersect these markets in multiple ways: CMP consumables and wafer cleaning systems for the SiC substrates used in the EV power inverters; thermal processing systems for producing EV battery cooling systems and ceramic substrates for HEV power semiconductor packaging; and reflow ovens for ADAS, infotainment and telematics component assemblies. We continue to invest in research and development to expand our Thermal Processing Solutions reflow equipment product line for AI applications. Our goal is to expand our addressable market by enabling mass production of higher density packages. We are also investing in application development and R&D resources to accelerate growth of our Semiconductor Fabrication Solutions business by expanding our consumables product portfolio and providing exceptional technical support and service to customers. Historically, we have grown our business primarily through acquisitions, including the businesses that currently comprise our two reportable segments in the Thermal Processing Solutions and Semiconductor Fabrication Solutions industries: BTU, PR Hoffman, Intersurface Dynamics and Entrepix. We also have a complementary strategy of pursuing organic growth, particularly during times when we lack 27 sufficient capital resources to pursue growth through acquisitions. We intend to continue to pursue acquisitions to supplement organic growth and have added market development resources globally to accelerate organic growth. Results of Operations The following table sets forth certain operational data as a percentage of net revenue for the periods indicated: Three Months Ended June 30, Nine Months Ended June 30, 2026 2025 2026 2025 Revenues, net 100 % 100 % 100 % 100 % Cost of sales 50 % 53 % 52 % 69 % Gross margin 50 % 47 % 48 % 31 % Selling, general and administrative 36 % 38 % 36 % 38 % Research, development and engineering 4 % 2 % 4 % 4 % Loss on sale of property, plant and equipment — % — % — % — % Goodwill impairment — % — % — % 34 % Intangible asset impairment — % — % — % 5 % Severance expense — % 2 % — % 1 % Operating income (loss) 10 % 5 % 8 % (51 )% Interest income 1 % — % 1 % — % Interest expense — % — % — % — % Foreign currency (loss) gain (2 )% — % (1 )% 1 % Other 1 % — % — % — % Income (loss) before income taxes 10 % 5 % 8 % (50 )% Income tax provision 3 % 4 % 3 % 3 % Net income (loss) 7 % 1 % 5 % (53 )% Net Revenue Net revenue consists of revenue recognized upon shipment or delivery of equipment. Spare parts sales are recognized upon shipment and service revenue is recognized upon completion of the service activity, which is generally ratable over the term of the service contract. Since the majority of our revenue is generated from large system sales, revenue, gross profit and operating income can be materially impacted by the timing of system shipments. Our net revenue by reportable segment was as follows, dollars in thousands: Three Months Ended June 30, Nine Months Ended June 30, Segment 2026 2025 Change % Change 2026 2025 Change % Change Thermal Processing Solutions 17,745 $ 14,208 $ 3,537 25 % 46,460 $ 43,467 $ 2,993 7 % Semiconductor Fabrication Solutions 4,638 5,349 (711 ) (13 )% 15,364 16,055 (691 ) (4 )% Total net revenue $ 22,383 $ 19,557 $ 2,826 14 % $ 61,824 $ 59,522 $ 2,302 4 % Total net revenue for the three months ended June 30, 2026 and 2025 was $22.4 million and $19.6 million, respectively, an increase of approximately $2.8 million or 14%. Total net revenue for the nine months ended June 30, 2026 and 2025 was $61.8 million and $59.5 million, respectively, an increase of approximately $2.3 million or 4%. Our Thermal Processing Solutions results for the third quarter increased primarily due to higher reflow oven and diffusion furnace revenue. Our Thermal Processing Solutions results for the nine months ended increased primarily due to higher shipments of reflow ovens and parts in addition to an increase in our service business. We are seeing year-over-year growth in our advanced packaging semiconductor packaging group reflow oven business driven by AI chip demand. Our Semiconductor Fabrication Solutions results for the third quarter and for the nine months ended 28 June 30, 2026 decreased primarily due to lower shipments of our polishing and wafer cleaning equipment, and lower demand for our consumables. Orders and Backlog New orders booked by reportable segment were as follows, dollars in thousands: Three Months Ended June 30, Nine Months Ended June 30, Segment 2026 2025 Change % Change 2026 2025 Change % Change Thermal Processing Solutions $ 24,279 $ 14,057 $ 10,222 73 % $ 57,478 $ 37,786 $ 19,692 52 % Semiconductor Fabrication Solutions 4,521 7,598 (3,077 ) (40 )% 13,125 17,640 (4,515 ) (26 )% Total new orders $ 28,800 $ 21,655 $ 7,145 33 % $ 70,603 $ 55,426 $ 15,177 27 % Our backlog by reportable segment was as follows, dollars in thousands: June 30, Segment 2026 2025 Change % Change Thermal Processing Solutions $ 25,673 $ 15,164 $ 10,509 69 % Semiconductor Fabrication Solutions 2,995 6,052 (3,057 ) (51 )% Total backlog $ 28,668 $ 21,216 $ 7,452 35 % As of June 30, 2026, one of our Thermal Processing Solutions segment customers individually accounted for 28% of our backlog. Additionally, one customer of both our Thermal Processing Solutions and Semiconductor Fabrication Solutions segments accounted for 17% of our backlog. No other customer accounted for more than 10% of our backlog as of June 30, 2026. The orders included in our backlog are generally credit approved customer purchase orders believed to be firm and are generally expected to ship within the next twelve months. Our backlog at any point in time is not necessarily representative of actual sales for succeeding periods, nor is backlog any assurance that we will realize profit from completing these orders. During the nine months ended June 30, 2026, the increase in Thermal Processing Solutions new order bookings was primarily driven by strong demand in Asia for AI application products. Gross Profit and Gross Margin Gross profit is the difference between net revenue and cost of goods sold. Cost of goods sold consists of purchased material, labor and overhead to manufacture equipment and spare parts and the cost of service and support to customers for installation, warranty and paid service calls. Gross margin is gross profit as a percent of net revenue. Our gross profit and gross margin by business segment were as follows, dollars in thousands: Three Months Ended June 30, Nine Months Ended June 30, Segment 2026 Gross Margin 2025 Gross Margin Change 2026 Gross Margin 2025 Gross Margin Change Thermal Processing Solutions $ 9,006 51 % $ 6,325 45 % $ 2,681 $ 22,728 49 % $ 14,005 32 % $ 8,723 Semiconductor Fabrication Solutions 2,187 47 % 2,807 52 % (620 ) 6,728 44 % 4,164 26 % 2,564 Total gross profit $ 11,193 50 % $ 9,132 47 % $ 2,061 $ 29,456 48 % $ 18,169 31 % $ 11,287 Our gross margins can be affected by capacity utilization, material costs, and the type and volume of machines and consumables sold each quarter. Gross margin for the three months ended June 30, 2026 and 2025 was $11.2 million, 50% of net revenue, and $9.1 million, 47% of net revenue, respectively, an increase of $2.1 million. Gross margin for the nine months ended June 30, 2026 and 2025 was $29.5 million, 48% of net revenue, and $18.2 million, 31% of net revenue, respectively, an increase of $11.3 million. Gross margin on products from our Thermal Processing Solutions segment increased for the three and nine months ended June 30, 2026 compared to the three and nine months ended June 30, 2025, due to leverage from higher revenue, 29 favorable product mix and the inventory write down associated with the discontinuation of low margin product lines in the prior year periods. Gross margin from our Semiconductor Fabrication Solutions segment decreased for the three-month period ended June 30, 2026 compared to the same period in 2025 due to lower revenue while they increased for the nine-month period ended June 30, 2026 due to the inventory write down associated with the discontinuation of low margin product lines in the prior year periods. We experienced moderate increases in material costs across all our segments during both periods. In response, we reviewed our pricing plans and supplier agreements, sharing cost increases with our customers where possible; however, we continue to experience pricing pressure from our customers. We are also continuing to explore additional partnerships with contract manufacturers, who can leverage their buying power on a larger scale. Selling, General and Administrative Selling, general and administrative (“SG&A”) expenses consist of the cost of employees, consultants and contractors, facility costs, sales commissions, shipping costs, promotional marketing expenses, legal and accounting expenses, bad debt expense and employee incentive accruals. SG&A expenses for the three months ended June 30, 2026 and 2025 were $8.0 million and $7.4 million, respectively. SG&A expenses for the nine months ended June 30, 2026 decreased to $22.1 million from $22.6 million for the nine months ended June 30, 2025. This decrease was primarily due to lower personnel costs and variable costs partially offset by higher incentive compensation in the nine months ended June 30, 2026 due to improved financial performance. Research, Development and Engineering Research, development and engineering (“RD&E”) expenses consist of the cost of employees, consultants and contractors who design, engineer and develop new products and processes as well as materials and supplies used in producing prototypes. RD&E expenses may vary from period to period depending on the engineering projects in process. Expenses related to engineers working on strategic projects or sustaining engineering projects are recorded in RD&E. However, from time to time we add functionality to our products or develop new products during engineering and manufacturing to fulfill specifications in a customer’s order, in which case the cost of development, along with other costs of the order, are charged to cost of goods sold. Occasionally, we receive reimbursements through governmental research and development grants which are netted against these expenses when certain conditions have been met. RD&E expense, net of grants earned, for the three months ended June 30, 2026 and 2025 was $0.9 million and $0.4 million, respectively, and $2.5 million and $2.1 million in the nine months ended June 30, 2026 and 2025, respectively. The increase in RD&E is related to specific strategic-development projects at our Thermal Processing Solutions segment. Grants earned are immaterial in all periods presented. Goodwill Impairment During the nine months ended June 30, 2026, we recognized no impairment of our goodwill as no triggering event was identified. In the second quarter of fiscal year 2025, we recognized impairment of our goodwill of $15.4 million at our Semiconductor Fabrication Solutions segment and $5.0 million at our Thermal Processing Solutions segment as a result of a triggering event identified at the end of the second fiscal quarter. See Note 6 for a description of the facts and circumstances leading to the goodwill impairment. Intangible Asset Impairment During the nine months ended June 30, 2026, we recognized no impairment of our definite lived intangible assets as no triggering event was identified. In the second quarter of fiscal year 2025, we recognized impairment of our definite lived intangible assets of $2.6 million at our Semiconductor Fabrication Solutions segment. As disclosed above, this impairment was recorded within 30 operating expenses in the Condensed Consolidated Statement of Operations. See Note 6 for a description of the facts and circumstances leading to the intangible asset impairments. Severance Expense Severance expense was $0.1 million and $0.4 million for the three months ended June 30, 2026 and 2025, respectively. Severance expense was $0.1 million and $0.7 million for the nine months ended June 30, 2026 and 2025, respectively. For the three and nine months ended June 30, 2026 and 2025, the amounts primarily related to staff reductions at our Thermal Processing Solutions and Semiconductor Fabrication Solutions segments. Income Taxes Our effective tax rate was 36.7% and (5.1%) for the nine months ended June 30, 2026 and 2025, respectively. The effective tax rate for the nine months ended June 30, 2026 differs from the U.S. statutory tax rate of 21% primarily due to foreign income taxed at a foreign rate different than 21%, for permanent items and changes in valuation allowances. For the three months ended June 30, 2026 and 2025, we recorded income tax expense of $0.6 million and $0.8 million, respectively. For the nine months ended June 30, 2026 and 2025, we recorded income tax expense of $1.7 million and $1.5 million, respectively. The quarterly income tax provision is calculated using an estimated annual effective tax rate, based upon expected annual income, permanent items, statutory rates and planned tax strategies in the various jurisdictions in which we operate. However, losses in certain jurisdictions and discrete items are excluded from the determination of the estimated annual effective tax rate. On July 4, 2025, the President signed into law significant federal tax legislation, H.R.1 (commonly known as the One Big Beautiful Bill Act or OBBBA). The legislation includes numerous changes to U.S. corporate income tax law, including but not limited to: permanent 100% bonus depreciation for qualified property, immediate expensing of domestic research and experimental expenditures, modifications to the limitation on business interest expense, changes to the international tax regime, and expanded limitations on the deductibility of executive compensation under IRC Section 162(m). Most provisions are effective for tax years beginning after December 31, 2024, with certain transition rules and exceptions. OBBBA is not expected to have a material impact on our consolidated financial statements due to the full valuation allowance in the US. We continue to monitor additional guidance issued relating to OBBBA and assess the impact to our financial statements. Our future effective income tax rate depends on various factors, such as the amount of income (loss) in each tax jurisdiction, tax regulations governing each region, non-tax deductible expenses incurred as a percent of pre-tax income and the effectiveness of our tax planning strategies. Liquidity and Capital Resources Cash and Cash Flow We believe that our existing sources of liquidity and cash flows that we expect to generate from our operations will be sufficient to fund our operations, currently planned capital expenditures and R&D efforts, for at least the next 12 months. We regularly review and evaluate the adequacy of our cash flows and banking relationships to ensure that we have the appropriate access to cash to fund both our near-term operating needs and our long-term strategic initiatives. The following table sets forth for the periods presented certain consolidated cash flow information, in thousands: Nine Months Ended June 30, 2026 2025 Net cash provided by operating activities $ 7,316 $ 5,609 Net cash used in investing activities (556 ) (692 ) Net cash provided by financing activities 57,451 80 Effect of exchange rate changes on cash and cash equivalents 994 (520 ) Net increase in cash and cash equivalents 65,205 4,477 Cash and cash equivalents, beginning of period 17,904 11,086 Cash and cash equivalents, end of period $ 83,109 $ 15,563 31 A summary of our cash position as of June 30, 2026 and September 30, 2025, is as follows, in thousands, except the current ratio: June 30, 2026 September 30, 2025 Cash and cash equivalents $ 83,109 $ 17,904 Working capital $ 104,017 $ 39,695 Current ratio (current assets to current liabilities) 5.4:1 2.9:1 The increase in cash and cash equivalents from September 30, 2025 of $65.2 million was primarily due to the $56.5 million of net proceeds received from our underwritten public offering of common stock completed on June 3, 2026 along with an increase in accounts payable and increased collections from customers, partially offset by higher inventory. We maintain a portion of our cash and cash equivalents in Renminbis, a Chinese currency, at our operations in China; therefore, changes in the exchange rates have an impact on our cash balances. The $64.3 million increase in working capital from September 30, 2025, was primarily due to increases in cash and cash equivalents from the proceeds from our public offering of common stock. During periods of weakening demand, we typically generate cash from operating activities, which we may decide to reinvest in our business via strategic projects. Conversely, we are more likely to use operating cash flows for working capital requirements during periods of higher growth. Our sources of capital in the past have included the sale of equity securities in private and public transactions, the incurrence of long-term debt and customer deposits. Cash Flows from Operating Activities Cash provided by our operating activities was $7.3 million for the nine months ended June 30, 2026, compared to $5.6 million provided by operating activities for the nine months ended June 30, 2025. We had increases in our accounts payable, accrued liabilities, and contract liabilities, offset by a decrease in our accounts receivable, for the nine months ended June 30, 2026. Cash Flows from Investing Activities Cash used in investing activities was $0.6 million for the nine months ended June 30, 2026, compared to $0.7 million used in investing activities in the nine months ended June 30, 2025. Both periods consist primarily of capital expenditures. Cash Flows from Financing Activities For the nine months ended June 30, 2026 and 2025, cash provided by financing activities was $57.5 million and $0.1 million, respectively, primarily due to the net proceeds from the issuance of common stock. Public Offering of Common Stock On June 3, 2026, the Company completed an underwritten public offering of 2.9 million shares of common stock at a public offering price of $20.50 per share. The offering generated gross proceeds of approximately $60.0 million and net proceeds of approximately $56.5 million after underwriting discounts, commissions and offering expenses. The financing significantly strengthened the Company's liquidity position and increased available cash resources. Management expects to use the proceeds to accelerate growth across our semiconductor packaging and advanced wafer substrate fabrication platforms, for accretive merger and acquisition opportunities, and for working capital and general corporate purposes. At June 30, 2026, cash and cash equivalents totaled $83.1 million compared with $17.9 million at September 30, 2025. The increase was primarily attributable to the proceeds received from our public offering of common stock completed during the third quarter and cash flow from operations during the nine months ended June 30, 2026. 32 Off-Balance Sheet Arrangements As of June 30, 2026, we had no off-balance sheet arrangements as defined in Item 303(b) of Regulation S-K promulgated by the SEC that have or are reasonably likely to have a current or future effect on financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. Contractual Obligations Unrecorded purchase obligations were $7.8 million as of June 30, 2026, compared to $4.0 million as of September 30, 2025, an increase of $3.8 million. Other than as described in Note 2, there were no material changes to the contractual obligations included in "Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2025 Form 10-K. Critical Accounting Estimates "Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report discusses our condensed consolidated financial statements that have been prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the condensed consolidated financial statements, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, income taxes, inventory valuation, business combination, goodwill, and long-lived asset impairment. We base our estimates and judgments on historical experience, expectations regarding the future and on various other factors that we believe to be reasonable under the circumstances. The results of these estimates and judgments form the basis for making conclusions about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. A critical accounting estimate is one that is both important to the presentation of our financial position and results of operations, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. These uncertainties are discussed in Part I, Item 1A of our 2025 Form 10-K. We believe our critical accounting estimates relate to the more significant judgments and estimates used in the preparation of our consolidated financial statements. We believe the critical accounting estimates discussed in the section entitled “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates” in our 2025 Form 10-K represent the most significant judgments and estimates used in the preparation of our consolidated financial statements. There have been no material changes in our critical accounting estimates during the nine months ended June 30, 2026. Impact of Recently Issued Accounting Pronouncements For discussion of the impact of recently issued accounting pronouncements, see “Part I, Item 1. Financial Information” under “Impact of Recently Issued Accounting Pronouncements.”