FORMFACTOR, INC. Cautionary Statement Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Securities Exchange Act of 1934 and the Securities Act of 1933, which are subject to risks and uncertainties. The forward-looking statements include statements concerning, among other things, our business strategy, financial and operating results, gross margins, liquidity and capital expenditure requirements and impact of accounting standards. In some cases, you can identify these statements by forward-looking words, such as "may," "might," "will," "could," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "intend" and "continue," the negative or plural of these words and other comparable terminology. The forward-looking statements are only predictions based on our current expectations and our projections about future events. All forward-looking statements included in this Quarterly Report on Form 10-Q are based upon information available to us as of the filing date of this Quarterly Report on Form 10-Q. You should not place undue reliance on these forward-looking statements. We have no obligation to update any of these statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these statements, including risks related to general market trends, the benefits of acquisitions and investments, our supply chain, uncertainties related to COVID-19 and the impact of our responses to it, the interpretation and impacts of changes in export controls and other trade barriers, military conflicts, political volatility and similar factors, our ability to execute our business strategy and other risks discussed in the section titled "Risk Factors" and elsewhere in our Annual Report on Form 10-K for the year endedDecember 25, 2021 and in this Quarterly Report on Form 10-Q. You should carefully consider the numerous risks and uncertainties described under these sections. The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and the accompanying notes contained in this Quarterly Report on Form 10-Q. Unless expressly stated or the context otherwise requires, the terms "we," "our," "us" and "FormFactor" refer toFormFactor, Inc. and its subsidiaries.
Overview
FormFactor, Inc. , headquartered inLivermore, California , is a leading provider of essential test and measurement technologies along the full semiconductor product lifecycle - from characterization, modeling, reliability, and design de-bug, to qualification 22 -------------------------------------------------------------------------------- and production test. We provide a broad range of high-performance probe cards, analytical probes, probe stations, metrology systems, thermal systems, and cryogenic systems to both semiconductor companies and scientific institutions. Our products provide electrical and physical information from a variety of semiconductor and electro-optical devices and integrated circuits from early research, through development, to high-volume production. Customers use our products and services to accelerate profitability by optimizing device performance and advancing yield knowledge. We operate in two reportable segments consisting of the Probe Cards segment and the Systems segment. Sales of our probe cards and analytical probes are included in the Probe Cards segment, while sales of our probe stations, metrology systems, thermal systems and cryogenic systems are included in the Systems segment. We generated net income of$60.1 million in the first six months of fiscal 2022 as compared to$37.5 million in the first six months of fiscal 2021. The increase in net income was primarily due to increased revenue with improved gross margins from a change in product mix and a reduction in the amortization of intangibles from significant intangibles becoming fully amortized, partially offset by higher operating expenses.
Impact of COVID-19
The COVID-19 pandemic continues to cause serious illness and death in many of the regions that we, our customers and our suppliers operate. The COVID-19 pandemic has resulted in significant governmental actions designed to control the spread of the virus, including the imposition of safety requirements and other orders in locations where we have manufacturing and other activities. We continue to operate our manufacturing sites at production levels greater than those prior to the pandemic, albeit subject to certain safety and related constraints. Our other operations are continuing with substantial work-from-home activities. If the provisions of governmental health orders or other safety requirements applicable to us or our customers or suppliers become more restrictive for an extended period of time, or if we have repeated occurrences of COVID-19 in any of our facilities, we may experience disruptions or delays in manufacturing, product design, product development, customer support, manufacturing and sales, and an overall loss of productivity and efficiency. While the disruptions in our operations, supply chain and customer demand as a result of the COVID-19 pandemic have been somewhat limited, we continue to see impacts on elements in the supply chain and believe that the COVID-19 pandemic represents a sustained threat that may give rise to a variety of more significant adverse impacts on our business and financial results. The semiconductor industry is experiencing various supply constraints due to the pandemic. While we are working with our global supply chain partners to mitigate this risk, the duration and extent of the supply chain disruptions remain uncertain. For a further description of the uncertainties and business risks associated with the COVID-19 pandemic, see the risk factors discussed in our Annual Report on Form 10-K for the year endedDecember 25, 2021 .
Significant Accounting Policies and the Use of Estimates
Management's Discussion and Analysis and Note 2, Summary of Significant Accounting Policies, to the Consolidated Financial Statements in our 2021 Annual Report on Form 10-K describe the significant accounting estimates and significant accounting policies used in preparation of the Consolidated Financial Statements. Actual results in these areas could differ from management's estimates. During the six months endedJune 25, 2022 , there were no significant changes in our significant accounting policies or estimates from those reported in our Annual Report on Form 10-K for the year endedDecember 25, 2021 , which was filed with theSecurities and Exchange Commission onFebruary 18, 2022 . 23 --------------------------------------------------------------------------------
Results of Operations
The following table sets forth our operating results as a percentage of revenues
for the periods indicated:
Three Months Ended Six Months Ended
June 25, June 26, June 25, June 26,
2022 2021 2022 2021
Revenues 100.0 % 100.0 % 100.0 % 100.0 %
Cost of revenues 53.7 59.4 53.0 59.2
Gross profit 46.3 40.6 47.0 40.8
Operating expenses:
Research and development 13.9 13.5 13.8 13.2
Selling, general and administrative 16.4 16.2 16.5 16.1
Total operating expenses 30.3 29.7 30.3 29.3
Operating income 16.0 10.9 16.7 11.5
Interest income 0.1 0.1 0.1 0.1
Interest expense (0.1) (0.1) (0.1) (0.1)
Other income (expense), net 0.3 (0.1) 0.2 -
Income before income taxes 16.3 10.8 16.9 11.5
Provision for income taxes 1.5 1.2 1.9 1.5
Net income 14.8 % 9.6 % 15.0 % 10.0 %
Revenues by Segment and Market
Three Months Ended Six Months Ended
June 25, June 26, June 25, June 26,
2022 2021 2022 2021
(In thousands)
Probe Cards $ 167,708 $ 153,641 $ 327,691 $ 312,539
Systems 36,199 34,435 73,390 62,173
$ 203,907 $ 188,076 $ 401,081 $ 374,712
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Three Months Ended
June 25, June 26,
2022 % of Revenues 2021 % of Revenues $ Change % Change
(Dollars in thousands)Probe Cards Markets: Foundry & Logic$ 122,380 60.0 %$ 103,726 55.1 %$ 18,654 18.0 % DRAM 36,843 18.0 42,088 22.4 (5,245) (12.5) Flash 8,485 4.2 7,827 4.2 658 8.4 Systems Market: Systems 36,199 17.8 34,435 18.3 1,764 5.1 Total revenues$ 203,907 100.0 %$ 188,076 100.0 %$ 15,831 8.4 % Six Months Ended June 25, June 26, 2022 % of Revenues 2021 % of Revenues $ Change % Change (Dollars in thousands) Probe Cards Markets: Foundry & Logic$ 236,501 58.9 %$ 217,136 57.9 %$ 19,365 8.9 % DRAM 71,280 17.8 75,986 20.3 (4,706) (6.2) Flash 19,910 5.0 19,417 5.2 493 2.5 Systems Market: Systems 73,390 18.3 62,173 16.6 11,217 18.0 Total revenues$ 401,081 100.0 %$ 374,712 100.0 %$ 26,369 7.0 % The increase in Foundry & Logic product revenue for the three and six months endedJune 25, 2022 , compared to the three and six months endedJune 26, 2021 , was driven principally by the increased demand and increased unit sales to other large semiconductor foundries and integrated device manufacturers. The decrease in DRAM product revenue for the three and six months endedJune 25, 2022 , compared to the three and six months endedJune 26, 2021 , was driven by decreased design wins and customer demand.
The increase in Flash product revenue for the three and six months ended
The increase in Systems market revenue for the three and six months ended
25
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Revenues by
Three Months Ended Six Months Ended
June 25, % of June 26, % of June 25, % of June 26, % of
2022 Revenue 2021 Revenue 2022 Revenue 2021 Revenue
(Dollars in thousands)
Taiwan $ 50,020 24.5 % $ 51,884 27.6 % $ 103,089 25.7 % $ 97,464 26.0 %
China 49,735 24.4 31,827 16.9 88,134 22.0 74,452 19.9
United States 31,242 15.3 32,650 17.4 56,889 14.2 62,136 16.6
South Korea 28,755 14.1 36,177 19.2 56,256 14.0 55,262 14.7
Malaysia 16,244 8.0 3,195 1.7 38,443 9.6 23,125 6.2
Japan 9,937 4.9 7,704 4.1 19,319 4.8 17,025 4.5
Europe 8,091 4.0 12,010 6.4 16,486 4.1 22,009 5.9
Singapore 7,108 3.5 9,962 5.3 18,004 4.5 18,520 4.9
Rest of the world 2,775 1.3 2,667 1.4 4,461 1.1 4,719 1.3
Total revenues $ 203,907 100.0 % $ 188,076 100.0 % $ 401,081 100.0 % $ 374,712 100.0 %
Geographic revenue information is based on the location to which we ship the
product. For example, if a certain South Korean customer purchases through their
U.S. subsidiary and requests the products to be shipped to an address in South
Korea , this sale will be reflected in the revenue for South Korea rather than
the U.S.
Changes in revenue by geographic region for the three and six months ended
June 25, 2022 , compared to the three and six months ended June 26, 2021 , were
primarily attributable to changes in customer demand, shifts in customer
regional manufacturing strategies, particularly with our large multinational
customers, and product sales mix. More specifically, the increase in revenues
for China and Malaysia were driven principally by a single large U.S. -based
company with operations in China and Malaysia . Further increases in China were
driven by increased demand from a large Chinese DRAM integrated device
manufacturer.
Cost of Revenues and Gross Margins
Cost of revenues consists primarily of manufacturing materials, compensation and benefits, shipping and handling costs, manufacturing-related overhead and amortization of certain intangible assets. Our manufacturing operations rely on a limited number of suppliers to provide key components and materials for our products, some of which are a sole source. We order materials and supplies based on backlog and forecasted customer orders. Tooling and setup costs related to changing manufacturing lots at our suppliers are also included in the cost of revenues. We expense all warranty costs, inventory provisions and amortization of certain intangible assets as cost of revenues.
Our gross profit and gross margin were as follows (dollars in thousands):
Three Months Ended
June 25, June 26,
2022 2021 $ Change % Change
Gross profit $ 94,369 $ 76,283 $ 18,086 23.7 %
Gross margin 46.3 % 40.6 %
Six Months Ended
June 25, June 26,
2022 2021 $ Change % Change
Gross profit $ 188,593 $ 152,989 $ 35,604 23.3 %
Gross margin 47.0 % 40.8 %
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Our gross profit and gross margin by segment were as follows (dollars in thousands):
Three Months Ended
June 25, 2022 June 26, 2021
Corporate and Corporate and
Probe Cards Systems Other Total Probe Cards Systems Other Total
Gross profit $ 78,420 $ 18,276 $ (2,327) $ 94,369 $ 66,600 $ 16,907 $ (7,224) $ 76,283
Gross margin 46.8 % 50.5 % 46.3 % 43.3 % 49.1 % 40.6 %
Six Months Ended
June 25, 2022 June 26, 2021
Corporate and Corporate and
Probe Cards Systems Other Total Probe Cards Systems Other Total
Gross profit $155,622 $ 37,683 $ (4,712) $ 188,593 $136,915 $ 30,506 $ (14,432) $ 152,989
Gross margin 47.5 % 51.3 % 47.0 % 43.8 % 49.1 % 40.8 %
Probe Cards
For the three and six months ended June 25, 2022 , gross margins increased
compared to the three and six months ended June 26, 2021 , primarily due to
higher revenues and improved standard margins related to favorable product mix,
partially offset by higher net manufacturing spending driven by higher material
and labor costs, and - for the three month periods - unfavorable absorption of
costs despite higher production volumes.
Systems
For the three and six months endedJune 25, 2022 , gross margins increased compared to the three and six months endedJune 26, 2021 , primarily as a result of favorable product mix primarily driven by increased sales of metrology tools at favorable margins, and improved leverage on fixed costs at these higher volumes. Corporate and Other Corporate and Other includes unallocated expenses relating to share-based compensation and amortization of intangible assets, inventory and fixed asset fair value adjustments due to acquisitions, and restructuring which are not used in evaluating the results of, or in allocating resources to, our reportable segments. The reduction in Corporate and Other for the three and six months endedJune 25, 2022 compared to the three and six months endedJune 26, 2021 is primarily due to a reduction in the amortization of intangibles resulting from significant intangibles becoming fully amortized, partially offset by increased share-based compensation driven by increases in headcount to support our growth.
Overall
Gross profit and gross margins fluctuate with revenue levels, product mix, selling prices, factory loading and material costs. For the three and six months endedJune 25, 2022 , compared to the three and six months endedJune 26, 2021 , gross profit and gross margins have increased on higher revenue levels, favorable product mix, and less amortization of intangibles. Cost of revenues included stock-based compensation expense as follows (in thousands): Three Months Ended Six Months Ended June 25, June 26, June 25, June 26, 2022 2021 2022 2021 Stock-based compensation$ 734 $ 1,079 $ 1,812 $ 2,414 27
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Research and Development
Three Months Ended
June 25, June 26,
2022 2021 $ Change % Change
(Dollars in thousands)
Research and development $ 28,317 $ 25,454 $ 2,863 11.2 %
% of revenues 13.9 % 13.5 %
Six Months Ended
June 25, June 26,
2022 2021 $ Change % Change
(Dollars in thousands)
Research and development $ 55,451 $ 49,500 $ 5,951 12.0 %
% of revenues 13.8 % 13.2 %
The increase in research and development expenses in the three and six months
ended June 25, 2022 when compared to the corresponding period in the prior year
was primarily driven by an increase in headcount to support our continued
investment in technology leadership. Increased general operational costs, annual
salary adjustments, project material costs, and stock-based compensation also
contributed to the increase.
A detail of the changes is as follows (in thousands):
Three Months Ended
June 25, 2022 Six Months Ended June
compared to Three 25, 2022 compared to
Months Ended June 26, Six Months Ended June
2021 26, 2021
Employee compensation costs $ 1,006 $ 2,612
Other general operations 1,421 2,387
Stock-based compensation 32 329
Project material costs 404 623
$ 2,863 $ 5,951
Research and development included stock-based compensation expense as follows
(in thousands):
Three Months Ended Six Months Ended
June 25, June 26, June 25, June 26,
2022 2021 2022 2021
Stock-based compensation $ 1,695 $ 1,663 $ 3,681 $ 3,352 Selling, General and Administrative
Three Months Ended
June 25, June 26,
2022 2021 $ Change % Change
(Dollars in thousands)
Selling, general and administrative $ 33,406 $ 30,479 $ 2,927 9.6 %
% of revenues 16.4 % 16.2 %
Six Months Ended
June 25, June 26,
2022 2021 $ Change % Change
(Dollars in thousands)
Selling, general and administrative $ 66,312 $ 60,494 $ 5,818 9.6 %
% of revenues 16.5 % 16.1 %
28-------------------------------------------------------------------------------- The increase in selling, general and administrative expenses in the three and six months endedJune 25, 2022 when compared to the corresponding period in the prior year was primarily driven by increased headcount, annual salary adjustments, increased travel related costs as restrictions related to COVID-19 relaxed, and higher stock-based compensation. We expect travel costs to continue to return to previous levels assuming travel restrictions continue to ease. These increases were partially offset by lower amortization of intangibles.
A detail of the changes is as follows (in thousands):
Three Months Ended
June 25, 2022 Six Months Ended June
compared to Three 25, 2022 compared to
Months Ended June 26, Six Months Ended June
2021 26, 2021
Employee compensation costs $ 1,249 $ 2,632
General operating expenses 831 1,465
Travel related costs 809 1,436
Stock-based compensation 83 486
Amortization of intangibles (45) (201)
$ 2,927 $ 5,818
Selling, general and administrative included stock-based compensation expense as
follows (in thousands):
Three Months Ended Six Months Ended
June 25, June 26, June 25, June 26,
2022 2021 2022 2021
Stock-based compensation $ 3,929 $ 3,846 $ 8,385 $ 7,899
Interest Income and Interest Expense
Interest income is earned on our cash, cash equivalents, restricted cash and
marketable securities. The increase in interest income for the three and six
months ended June 25, 2022 compared with the corresponding period of the prior
year was attributable to a slight increase in investment yields due to the
higher interest rate environment on higher invested balances.
Interest expense primarily includes interest on our term loans, interest rate
swap derivative contracts, and term loan issuance costs amortization charges.
The interest expense for the three and six months ended June 25, 2022 compared
to the same period of the prior year remained consistent despite a lower
outstanding debt due to increased average interest rates on the outstanding
debt.
Other Income (Expense), Net
Other income (expense), net, primarily includes the effects of foreign currency
impact and various other gains and losses.
Provision for Income Taxes
Three Months Ended Six Months Ended
June 25, June 26, June 25, June 26,
2022 2021 2022 2021
(In thousands, except percentages)
Provision for income taxes $ 3,136 $ 2,283 $ 7,586 $ 5,489
Effective tax rate 9.4 % 11.3 % 11.2 % 12.8 %
Provision for income taxes reflects the tax provision on our operations in
foreign and U.S. jurisdictions, offset by tax benefits from tax credits and the
foreign-derived intangible income ("FDII") deduction. Our effective tax rate may
vary from period to period based on changes in estimated taxable income or loss
by jurisdiction, changes to the valuation allowance, changes to U.S. federal,
state or foreign tax laws, changes in ASC 718 stock-based compensation
expense/benefit, future expansion into areas with varying country, state, and
local income tax rates, and deductibility of certain costs and expenses by
jurisdiction.
We have utilized our previous net operating loss carryforwards, and expect the
FDII deduction and corresponding benefit to be available, resulting in a
decrease from the
The decrease in the effective tax rate in the three months endedJune 25, 2022 when compared to the corresponding period in the prior year was primarily driven by an increased tax deduction from FDII. 29 -------------------------------------------------------------------------------- As ofJanuary 1, 2022 , the Tax Cuts and Jobs Act of 2017 eliminates the option to deduct research and experimental expenditures immediately in the year incurred and requires taxpayers to amortize such expenditures over five years in theU.S. and fifteen years in foreign jurisdictions. While it is possible thatCongress may defer, modify, or repeal this provision, potentially with retroactive effect, we have no assurance that this provision will be deferred, modified, or repealed. If this provision is not deferred, modified, or repealed with retroactive effect toJanuary 1, 2022 , we expect our cash taxes to slowly increase over the next few years until we have fully utilized our Federal research and development credits to offset our Federal tax liability to the extent allowed by law.
Liquidity and Capital Resources
Capital Resources
Our working capital was
Cash and cash equivalents primarily consist of deposits held at banks, money market funds,U.S. treasuries and commercial paper. Marketable securities primarily consist ofU.S. treasuries, corporate bonds, and commercial paper. We typically invest in highly-rated securities with low probabilities of default. Our investment policy requires investments to be rated single A or better, and limits the types of acceptable investments, issuer concentration and duration of the investment. Our cash, cash equivalents and marketable securities totaled approximately$266.3 million atJune 25, 2022 , compared to$276.1 million atDecember 25, 2021 . Based on our historical results of operations, we expect that our cash, cash equivalents, and marketable securities on hand, and the cash we expect to generate from operations, will be sufficient to fund our short-term and long-term liquidity requirements primarily arising from: research and development, capital expenditures, working capital, outstanding commitments, and other liquidity requirements associated with existing operations. However, we cannot be certain that our cash, cash equivalents, and marketable securities on hand, and cash generated from operations, will be available in the future to fund all of our capital and operating requirements. In addition, any future strategic investments and significant acquisitions may require additional cash and capital resources. To the extent necessary, we may consider entering into short and long-term debt obligations, raising cash through a stock issuance, or obtaining new financing facilities, which may not be available on terms favorable to us. If we are unable to obtain sufficient cash or capital to meet our needs on a timely basis and on favorable terms, our business and operations could be materially and adversely affected. If we are unsuccessful in maintaining or growing our revenues, maintaining or reducing our cost structure (in response to a potential reduction in demand due to an industry downturn, COVID-19, or other event), or increasing our available cash through debt or equity financings, our cash, cash equivalents and marketable securities may decline. We utilize a variety of tax planning and financing strategies to manage our worldwide cash and deploy funds to locations where needed. As part of these strategies, we indefinitely reinvest a portion of our foreign earnings. Should we require additional capital inthe United States , we may elect to repatriate indefinitely-reinvested foreign funds or raise capital inthe United States . Cash Flows The following table sets forth our net cash flows from operating, investing and financing activities: Six Months EndedJune 25 ,June 26, 2022 2021 (In thousands)
Net cash provided by operating activities
Operating Activities Net cash provided by operating activities for the six months endedJune 25, 2022 was primarily attributable to net income of$60.1 million and net non-cash expenses of$42.0 million , which includes depreciation, amortization, stock-based compensation, and the provision for excess and obsolete inventories. These inflows were partially offset by net changes in working capital of$15.3 million , primarily related to cash paid for inventories of$32.3 million , partially offset by cash provided by an increase in accounts payable of$7.5 million , an increase in accrued liabilities for$4.1 million , and a reduction in accounts receivable of$5.5 million . 30 -------------------------------------------------------------------------------- Investing Activities Net cash used in investing activities for the six months endedJune 25, 2022 was primarily related to$30.1 million property, plant and equipment purchases,$6.9 million net cash used to purchase marketable securities, and$3.1 million for acquisition of a business. Financing Activities Net cash used in financing activities for the six months endedJune 25, 2022 primarily related to$54.3 million used to purchase common stock under our stock repurchase programs,$4.4 million of principal payments made towards the repayment of our term loans, and$4.2 million related to tax withholdings associated with the net share settlements of our equity awards, partially offset by$5.7 million of proceeds received from issuances of common stock under our employee stock purchase plan. Debt FRT Term Loan OnOctober 25, 2019 , we entered into a$23.4 million three-year credit facility loan agreement (the "FRT Term Loan"), to fund the acquisition ofFRT GmbH , which we acquired onOctober 9, 2019 . The FRT Term Loan bears interest at a rate equal to the Euro Interbank Offered Rate ("EURIBOR") plus 1.75% per annum and will be repaid in quarterly installments of approximately$1.8 million plus interest. The interest rate atJune 25, 2022 was 1.29%. As ofJune 25, 2022 , the balance outstanding pursuant to the FRT term loan was$3.7 million . The FRT Term Loan is expected to be fully paid as ofOctober 25, 2022 . Building Term Loan OnJune 22, 2020 , we entered into an$18.0 million 15-year credit facility loan agreement (the "Building Term Loan"). The proceeds of theBuilding Term Loan were used to finance the purchase of a building adjacent to our leased facilities inLivermore, California . TheBuilding Term Loan bears interest at a rate equal to the applicable LIBOR rate plus 1.75% per annum. Interest payments are payable in monthly installments over a fifteen-year period. The interest rate atJune 25, 2022 was 2.81%. As ofJune 25, 2022 , the balance outstanding pursuant to theBuilding Term Loan was$16.0 million . OnMarch 17, 2020 , we entered into a forward starting interest rate swap agreement to hedge the interest payments on theBuilding Term Loan for the notional amount of$18.0 million , and an amortization period that matches the debt. As future levels of LIBOR over the life of the loan are uncertain, we entered into this interest-rate swap agreement to hedge the exposure in interest rate risks associated with movement in LIBOR rates. By entering into the agreement, we converted a floating interest rate of one-month LIBOR plus 1.75% into a fixed interest rate of 2.75%. As ofJune 25, 2022 , the notional amount of the loan that is subject to this interest rate swap is$16.0 million .
Stock Repurchase Programs
OnOctober 26, 2020 , our Board of Directors authorized a two-year program to repurchase up to$50 million of outstanding common stock to offset potential dilution from issuances of common stock under our stock-based compensation programs. During fiscal 2021 we repurchased and retired 622,400 shares of common stock for$24.0 million . During the six months endedJune 25, 2022 , we repurchased and retired 676,408 shares of common stock for$26.0 million , utilizing the remaining funds available for repurchase. OnMay 20, 2022 , our Board of Directors authorized an additional program to repurchase up to$75 million of outstanding common stock, also with the primary purpose to offset potential dilution from issuances of common stock under our stock-based compensation programs. The share repurchase program will expire onMay 20, 2024 . During the three months endedJune 25, 2022 , we repurchased and retired 767,083 shares of common stock for$28.4 million under this program. As ofJune 25, 2022 ,$46.6 million remained available for future repurchases. 31 --------------------------------------------------------------------------------
Contractual Obligations and Commitments
The following table summarizes our significant contractual commitments to make
future payments in cash under contractual obligations as of
Payments Due In Fiscal Year
Remainder
2022 2023 2024 2025 2026 Thereafter Total
Operating leases $ 4,319 $ 7,564 $ 7,224 $ 7,187 $ 6,505 $ 9,143 $ 41,942
Term loans -
principal payments 4,208 1,050 1,080 1,111 1,142 11,116 19,707
Term loans -
interest payments
(1) 244 428 400 366 335 1,415 3,188
Total $ 8,771 $ 9,042 $ 8,704 $ 8,664 $ 7,982 $ 21,674 $ 64,837 (1) Represents our minimum interest payment commitments at 2.81% per annum for
the
Off-Balance Sheet Arrangements
Historically, we have not participated in transactions that have generated relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As ofJune 25, 2022 , we were not involved in any such off-balance sheet arrangements.
Recent Accounting Pronouncements
See Note 1, Basis of Presentation and New Accounting Pronouncements, of Notes to Condensed Consolidated Financial Statements.
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