Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares outstanding of the issuer’s common stock as of October ~~23, 2020: 40.5~~22, 2021: 44.9 million

	September 25,			December 27,			September 24,			December 25,
(In millions, except par value)	2020			2019			2021			2020
ASSETS
Current assets:
Cash and cash equivalents	$	176.1		$	162.5		$	457.0		$	200.3
Accounts receivable, net of allowance for doubtful accounts of $0.3 at September 25, 2020 and December 27, 2019		145.5			112.7
Accounts receivable, net of allowance for doubtful accounts of $0.2 and $0.3 at September 24, 2021 and December 25, 2020, respectively								232.5			145.5
Inventories		175.3			172.4			324.6			180.4
Prepaid expenses and other current assets		17.2			19.4			38.6			18.9
Total current assets		514.1			467.0			1,052.7			545.1
Property, plant and equipment, net		150.5			145.3			227.9			159.2
Goodwill		171.1			171.1			263.6			171.1
Intangibles assets, net		165.5			180.3			261.0			160.5
Deferred tax assets, net		15.8			15.5			23.1			23.5
Operating lease right-of-use assets		38.1			34.9			87.0			37.8
Other non-current assets		5.2			5.2			8.7			5.3
Total assets	$	1,060.3		$	1,019.3		$	1,924.0		$	1,102.5
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Bank borrowings	$	7.5		$	8.8		$	23.2		$	7.4
Accounts payable		111.4			133.1			271.3			121.3
Accrued compensation and related benefits		30.8			24.8			52.0			34.5
Operating lease liabilities		12.1			13.2			18.2			11.7
Other current liabilities		33.5			30.7			46.3			26.3
Total current liabilities		195.3			210.6			411.0			201.2
Bank borrowings, net of current portion		272.6			283.4			545.1			261.6
Deferred tax liabilities		25.2			25.2			44.4			33.6
Operating lease liabilities		31.2			28.8			69.5			31.1
Other liabilities		17.5			18.8			13.7			23.8
Total liabilities		541.8			566.8			1,083.7			551.3
Commitments and contingencies (See Note 9)
Commitments and contingencies (See Note 10)
Equity:
UCT stockholders’ equity:
Preferred stock — $0.001 par value, 10.0 shares authorized; NaN outstanding	—			—			—			—
Common stock — $0.001 par value, 90.0 shares authorized; 40.5 shares and 39.9 shares issued and outstanding at September 25, 2020 and December 27, 2019, respectively		0.1			0.1
Common stock — $0.001 par value, 90.0 shares authorized; 44.9 shares and 40.6 shares issued and outstanding at September 24, 2021 and December 25, 2020, respectively								0.1			0.1
Additional paid-in capital		309.2			300.9			510.4			312.8
Common shares held in treasury, at cost, 0.6 shares at September 25, 2020 and December 27, 2019		(3.3	)		(3.3	)
Common shares held in treasury, at cost, 0.6 shares at September 24, 2021 and December 25, 2020								(3.3	)		(3.3	)
Retained earnings		195.4			140.3			291.9			217.9
Accumulated other comprehensive loss		(1.3	)		(1.3	)
Accumulated other comprehensive gain								0.9			5.1
Total UCT stockholders' equity		500.1			436.7			800.0			532.6
Noncontrolling interests		18.4			15.8			40.3			18.6
Total equity		518.5			452.5			840.3			551.2
Total liabilities and equity	$	1,060.3		$	1,019.3
Total liabilities and stockholders' equity							$	1,924.0		$	1,102.5

		Three Months Ended						Nine Months Ended							Three Months Ended						Nine Months Ended
		September 25,			September 27,			September 25,			September 27,				September 24,			September 25,			September 24,			September 25,
(In millions, except per share amounts)		2020			2019			2020			2019				2021			2020			2021			2020
Revenues:
Product		$	294.4		$	200.0		$	831.7		$	610.6
Products															$	482.0		$	294.4		$	1,270.1		$	831.7
Services			68.9			54.3			197.3			169.2				71.7			68.9			216.4			197.3
Total revenues			363.3			254.3			1,029.0			779.8				553.7			363.3			1,486.5			1,029.0
Cost of revenues:
Product			243.6			170.1			687.6		525.7
Products																393.4			243.6			1,044.9		687.6
Services		45.1				36.7		127.2			113.6					46.2			45.1			140.7		127.2
Total cost of revenues		288.7				206.8		814.8			639.3				439.6				288.7			1,185.6		814.8
Gross profit			74.6			47.5			214.2			140.5				114.1			74.6			300.9			214.2
Operating expenses:
Research and development		3.5			3.6			10.7			10.9				6.5			3.5			16.8			10.7
Sales and marketing			6.0		5.9			17.7			16.7					13.8			6.0			34.1		17.7
General and administrative			30.2		29.7				97.5		87.4					43.2		30.2				127.1		97.5
Total operating expenses			39.7		39.2				125.9			115.0				63.5		39.7				178.0			125.9
Income from operations			34.9			8.3			88.3		25.5					50.6			34.9			122.9		88.3
Interest income			0.2			-			0.7			0.4				0.1			0.2			0.3			0.7
Interest expense			(4.1	)		(6.6	)		(13.1	)		(19.9	)			(6.9	)		(4.1	)		(17.6	)		(13.1	)
Other income (expense), net			(1.1	)		3.1			(3.2	)		4.2				(1.4	)		(1.1	)		(6.4	)		(3.2	)
Income before provision for income taxes			29.9			4.8			72.7			10.2				42.4			29.9			99.2			72.7
Provision for income taxes			4.8		3.9				15.0		8.2					8.4		4.8				21.6			15.0
Net income			25.1			0.9			57.7			2.0				34.0			25.1			77.6			57.7
Less: Net income attributable to noncontrolling interests			0.7			0.4			2.6			1.1				2.1			0.7			3.6			2.6
Net income attributable to UCT		$	24.4		$	0.5		$	55.1		$	0.9			$	31.9		$	24.4		$	74.0		$	55.1

Net income per share attributable to UCT common stockholders:	Net income per share attributable to UCT common stockholders:													Net income per share attributable to UCT common stockholders:
Basic		$	0.60		$	0.01		$	1.37		$	0.02			$	0.71		$	0.60		$	1.73		$	1.37
Diluted		$	0.59		$	0.01		$	1.35		$	0.02			$	0.70		$	0.59		$	1.69		$	1.35
Shares used in computing net income per share:
Basic			40.4			39.5			40.1			39.4				44.8			40.4			42.8			40.1
Diluted			41.1			40.0			40.9			39.7				45.4			41.1			43.7			40.9

	Three Months Ended					Nine Months Ended					Three Months Ended					Nine Months Ended
	September 25,		September 27,			September 25,		September 27,			September 24,			September 25,		September 24,			September 25,
(In millions)	2020		2019			2020		2019			2021			2020		2021			2020
Net income	$	25.1	$	0.9		$	57.7	$	2.0		$	34.0		$	25.1	$	77.6		$	57.7
Other comprehensive income (loss):
Other comprehensive gain (loss):
Change in cumulative translation adjustment		2.0		(1.6	)		—		(3.8	)		(3.5	)		2.0		(4.1	)		—
Change in fair value of derivatives	—			(0.1	)		—		-			(0.2	)		—		(0.1	)		—
Total other comprehensive income (loss)		2.0		(1.7	)		—		(3.8	)
Total other comprehensive gain (loss)												(3.7	)		2.0		(4.2	)		—
Other comprehensive income, attributable to noncontrolling interests	0.7			0.4			2.6		1.1		2.1				0.7		3.6			2.6
Comprehensive income (loss) attributable to UCT	$	26.4	$	(1.2	)	$	55.1	$	(2.9	)
Comprehensive income attributable to UCT											$	28.2		$	26.4	$	69.8		$	55.1

	Nine Months Ended						Nine Months Ended
	September 25,			September 27,			September 24,			September 25,
(In millions)	2020			2019			2021			2020
Cash flows from operating activities:
Net income	$	57.7		$	2.0		$	77.6		$	57.7
Adjustments to reconcile net income to net cash provided by operating activities (excluding assets acquired and liabilities assumed):
Depreciation and amortization		18.8			15.8			24.0			18.8
Amortization of intangible assets		14.8			15.0			23.9			14.8
Stock-based compensation		9.5			9.1			11.5			9.5
Amortization of debt issuance costs		1.4			1.3			2.4			1.4
Gain on the disposal of assets		(1.4	)		—
Gain from insurance proceeds		(0.6	)		—			(7.3	)		(0.6	)
Deferred income taxes		(0.3	)		(2.1	)		0.8			(0.3	)
Change in the fair value of financial instruments and earn-out liability		4.4			(3.7	)		13.0			4.4
Changes in assets and liabilities:
Others								0.3			(1.4	)
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable		(32.7	)		(2.4	)		(35.4	)		(32.7	)
Inventories		(2.9	)		42.5			(70.5	)		(2.9	)
Prepaid expenses and other current assets		0.3			2.0			(0.8	)		0.3
Other non-current assets		—			(0.8	)		(0.3	)		—
Accounts payable		(21.9	)		(0.3	)		119.5			(21.9	)
Accrued compensation and related benefits		5.9			8.8			7.0			5.9
Income taxes payable		3.2			(1.4	)		1.0			3.2
Operating lease assets and liabilities		(0.8	)		—			(0.3	)		(0.8	)
Other liabilities		(2.5	)		3.3			3.6			(2.5	)
Net cash provided by operating activities		52.9			89.1			170.0			52.9
Cash flows from investing activities:
Purchases of property, plant and equipment		(26.5	)		(12.7	)		(42.7	)		(26.5	)
Proceeds from sale of property and equipment, including insurance proceeds		6.6			2.7
Acquisition of Dynamic Manufacturing Solutions, LLC		—			(29.8	)
Proceeds from sale of equipment, including insurance proceeds								7.6			6.6
Settlement of forward contracts in conjunction with the acquisition of Ham-Let								(10.4	)		—
Acquisition of business, net of cash acquired								(344.8	)		—
Net cash used in investing activities		(19.9	)		(39.8	)		(390.3	)		(19.9	)
Cash flows from financing activities:
Proceeds from bank borrowings		69.7			34.8			394.7			69.7
Proceeds from issuance of common stock		0.3			0.1			193.1			0.3
Principal payments on bank borrowings and finance leases		(85.7	)		(64.5	)		(93.9	)		(85.7	)
Payments of debt issuance costs								(8.9	)		—
Payments of dividends to a joint venture shareholder								(0.1	)		—
Employees’ taxes paid upon vesting of restricted stock units								(7.0	)		(1.5	)
Payment of contingent earn-out		(1.4	)		—			—			(1.4	)
Taxes paid related to net share settlement of equity awards		(1.5	)		(1.7	)
Net cash used in financing activities		(18.6	)		(31.3	)
Net cash provided by (used in) financing activities								477.9			(18.6	)
Effect of exchange rate changes on cash and cash equivalents		(0.8	)		(3.4	)		(0.9	)		(0.8	)
Net increase in cash and cash equivalents		13.6			14.6			256.7			13.6
Cash and cash equivalents at beginning of period		162.5			144.1			200.3			162.5
Cash and cash equivalents at end of period		176.1		$	158.7			457.0		$	176.1
Supplemental cash flow information:
Income taxes paid, net of income tax refunds	$	8.5		$	12.2		$	15.1		$	8.5
Interest paid	$	12.9		$	16.4		$	14.4		$	12.9
Non-cash investing and financing activities:
Fair value of earn-out payment related to DMS acquisition		—		$	1.4
Reclassification of common stock purchase obligation liability to noncontrolling interests							$	16.4			—
Property, plant and equipment purchased included in accounts payable and other liabilities	$	2.7		$	4.6		$	6.3		$	2.7
Business interruption insurance proceeds receivable		—		$	1.0

	Three Months Ended																										Three Months Ended
	September 25, 2020																										September 24, 2021
	Common Stock								Treasury shares																		Common Stock					Additional Paid-in			Treasury shares					Retained		Accumulated Other Comprehensive			Total Stockholders’			Noncontrolling			Total
(In millions)	Shares			Amount		Additional Paid-in Capital			Shares		Amount			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity of UCT			Noncontrolling Interests		Total Equity			Shares			Amount		Capital			Shares		Amount			Earnings		Income (Loss)			Equity of UCT			Interests			Equity
Balance June 26, 2020		40.3		$	0.1	$	306.0			0.6	$	(3.3	)	$	171.0	$	(3.3	)	$	470.5		$	17.7	$	488.2
Balance June 25, 2021																												44.8		$	0.1	$	506.1			0.6	$	(3.3	)	$	260.0	$	4.6		$	767.5		$	21.2		$	788.7
Issuance under employee stock plans		0.2		—		—			—		—			—		—			—			—		—				0.1			—	$	—			—		—			—		—			—			—			—
Stock-based compensation expense	—			—			3.2		—		—			—		—				3.2		—			3.2			—			—		4.3			—		—			—		—			4.3			—			4.3
Noncontrolling interests from acquisition of Ham-Let																												—			—		—			—		—			—		—			—			0.6			0.6
Net income	—			—		—			—		—				24.4	—				24.4			0.7		25.1			—			—	—				—		—			31.9		—			31.9			2.1			34.0
Reclassification of common stock purchase obligation liability upon modification of agreement (see Note 11)																												—			—		—			—		—			—		—			—			16.4			16.4
Other comprehensive loss	—			—		—			—		—			—			2.0			2.0		—			2.0			—			—	—				—		—			—		(3.7	)		(3.7	)		—			(3.7	)
Balance September 25, 2020		40.5		$	0.1	$	309.2			0.6	$	(3.3	)	$	195.4	$	(1.3	)	$	500.1		$	18.4	$	518.5
Balance September 24, 2021																												44.9		$	0.1	$	510.4			0.6	$	(3.3	)	$	291.9	$	0.9		$	800.0		$	40.3		$	840.3

	Nine Months Ended																										Nine Months Ended
	September 25, 2020																										September 24, 2021
	Common Stock								Treasury shares																		Common Stock					Additional Paid-in			Treasury shares					Retained		Accumulated Other Comprehensive			Total Stockholders’			Noncontrolling			Total
(In millions)	Shares			Amount		Additional Paid-in Capital			Shares		Amount			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity of UCT			Noncontrolling Interests		Total Equity			Shares			Amount		Capital			Shares		Amount			Earnings		Income (Loss)			Equity of UCT			Interests			Equity
Balance December 27, 2019		39.9		$	0.1	$	300.9			0.6	$	(3.3	)	$	140.3	$	(1.3	)	$	436.7		$	15.8	$	452.5
Balance December 25, 2020																												40.6		$	0.1	$	312.8			0.6	$	(3.3	)	$	217.9	$	5.1		$	532.6		$	18.6		$	551.2
Issuance of common stock in public offering																												3.7			—		192.8			—		—			—		—			192.8			—			192.8
Issuance under employee stock plans		0.7		—			0.2		—		—			—		—				0.2		—		$	0.2			0.7			—		0.3			—		—			—		—			0.3			—			0.3
Employees’ taxes paid upon vesting of restricted stock units																												(0.1	)		—		(7.0	)		—		—			—		—			(7.0	)		—			(7.0	)
Stock-based compensation expense	—			—			9.5		—		—			—		—				9.5		—			9.5			—			—		11.5			—		—			—		—			11.5			—			11.5
Taxes paid related to net share settlement of equity awards		(0.1	)	—			(1.4	)	—		—			—		—				(1.4	)	—			(1.4	)
Noncontrolling interests from acquisition of Ham-Let																												—			—		—			—		—			—		—			—			1.8			1.8
Net income	—			—		—			—		—				55.1	—				55.1			2.6		57.7			—			—		—			—		—			74.0		—			74.0			3.6			77.6
Dividend payments to a joint venture shareholder																												—			—		—			—		—			—		—			—			(0.1	)		(0.1	)
Reclassification of common stock purchase obligation liability upon modification of agreement (see Note 11)																																																	16.4			16.4
Other comprehensive loss	—			—		—			—		—			—			—			—		—			—			—			—		—			—		—			—		(4.2	)		(4.2	)		—			(4.2	)
Balance September 25, 2020		40.5		$	0.1	$	309.2			0.6	$	(3.3	)	$	195.4	$	(1.3	)	$	500.1		$	18.4	$	518.5

Balance September 24, 2021																												44.9		$	0.1	$	510.4			0.6	$	(3.3	)	$	291.9	$	0.9		$	800.0		$	40.3		$	840.3

	Three Months Ended																										Three Months Ended
	September 27, 2019																										September 25, 2020
	Common Stock								Treasury shares																		Common Stock								Treasury shares
(In millions)	Shares			Amount		Additional Paid-in Capital			Shares		Amount			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity of UCT			Noncontrolling Interests		Total Equity			Shares			Amount		Additional Paid-in Capital			Shares		Amount			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity of UCT			Noncontrolling Interests		Total Equity
Balance June 28, 2019		39.5		$	0.1	$	294.9			0.6	$	(3.3	)	$	150.1	$	(2.7	)	$	439.1		$	15.4	$	454.5
Balance June 26, 2020																												40.3		$	0.1	$	306.0			0.6	$	(3.3	)	$	171.0	$	(3.3	)	$	470.5		$	17.7	$	488.2
Issuance under employee stock plans																												0.2		—		—			—		—			—		—			—			—		—
Stock-based compensation expense																											—			—			3.2		—		—			—		—				3.2		—			3.2
Net income																											—			—		—			—		—				24.4	—				24.4			0.7		25.1
Other comprehensive loss																											—			—		—			—		—			—			2.0			2.0		—			2.0
Balance September 25, 2020																												40.5		$	0.1	$	309.2			0.6	$	(3.3	)	$	195.4	$	(1.3	)	$	500.1		$	18.4	$	518.5

																											Nine Months Ended
																											September 25, 2020
																											Common Stock								Treasury shares
(In millions)																											Shares			Amount		Additional Paid-in Capital			Shares		Amount			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity of UCT			Noncontrolling Interests		Total Equity
Balance December 27, 2019																												39.9		$	0.1	$	300.9			0.6	$	(3.3	)	$	140.3	$	(1.3	)	$	436.7		$	15.8	$	452.5
Issuance under employee stock plans		0.3		—		—			—		—			—		—			—			—		—				0.7		—			0.2		—		—			—		—				0.2		—			0.2
Stock-based compensation expense	—			—			3.3		—		—			—		—				3.3		—			3.3		—			—			9.5		—		—			—		—				9.5		—			9.5
Taxes paid related to net share settlement of equity awards	—			—			(0.3	)	—		—			—		—				(0.3	)	—			(0.3	)		(0.1	)	—			(1.4	)	—		—			—		—				(1.4	)	—			(1.4	)
Net income	—			—		—			—		—				0.5	—				0.5			0.4		0.9		—			—		—			—		—				55.1	—				55.1			2.6		57.7
Other comprehensive loss	—			—		—			—		—			—			(1.7	)		(1.7	)	—			(1.7	)	—			—		—			—		—			—		—			—			—		—
Balance September 27, 2019		39.8		$	0.1	$	297.9			0.6	$	(3.3	)	$	150.6	$	(4.4	)	$	440.9		$	15.8	$	456.7

	Nine Months Ended
	September 27, 2019
	Common Stock								Treasury shares
(In millions)	Shares			Amount		Additional Paid-in Capital			Shares		Amount			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity of UCT			Noncontrolling Interests		Total Equity
Balance December 28, 2018		39.1		$	0.1	$	290.4			0.6	$	(3.3	)	$	149.7	$	(0.6	)	$	436.3		$	14.7	$	451.0
Issuance under employee stock plans		0.9		—			0.1		—		—			—		—				0.1		—			0.1
Stock-based compensation expense	—			—			9.1		—		—			—		—				9.1		—			9.1
Taxes paid related to net share settlement of equity awards		(0.2	)	—			(1.7	)	—		—			—		—				(1.7	)	—			(1.7	)
Net income	—			—		—			—		—				0.9	—				0.9			1.1		2.0
Other comprehensive loss	—			—		—			—		—			—			(3.8	)		(3.8	)	—			(3.8	)
Balance September 27, 2019		39.8		$	0.1	$	297.9			0.6	$	(3.3	)	$	150.6	$	(4.4	)	$	440.9		$	15.8	$	456.7
Balance September 25, 2020																												40.5		$	0.1	$	309.2			0.6	$	(3.3	)	$	195.4	$	(1.3	)	$	500.1		$	18.4	$	518.5

Organization — Ultra Clean Holdings, Inc., (the “Company” or “UCT”) a Delaware corporation, was founded in November 2002 and became a publicly traded company on the NASDAQ Global Market in March 2004. Ultra Clean Holdings, Inc. is a leading developer and supplier of critical subsystems, components and parts, and ultra-high purity cleaning and analytical services primarily for the semiconductor industry. UCT offers its customers an integrated outsourced solution for major subassemblies, improved design-to-delivery cycle times, design for manufacturability, prototyping and part and component manufacturing, as well as tool chamber parts cleaning and coating, and micro-contamination analytical services. The Company is ~~a global leader in~~ ~~the design, engineering~~operates and ~~manufacture of~~reports results for 2 operating segments: Products and Services (formerly known as “SPS” and “SSB”, respectively). The Company’s Products business primarily designs, engineers and manufactures production tools, components and parts, and modules and subsystems for the semiconductor and display capital equipment markets. ~~The Company’s products~~Products include chemical delivery modules, frame assemblies, gas delivery systems, fluid delivery systems, precision robotics, process modules as well as other high-level assemblies. The Company’s ~~services provide~~Services business provides ultra-high purity parts cleaning, process tool part ~~cleaning,~~recoating, surface encapsulation and high sensitivity micro contamination analysis primarily for the semiconductor device makers and wafer fabrication equipment ~~markets.~~markets.

TheOn March 31, 2021, the Company ~~reports results~~completed the acquisition of Ham-Let (Israel-Canada) Ltd. (“Ham-Let”), a public company organized under the laws of the State of Israel (not a U.S. registrant), pursuant to an Agreement and Plan of Merger (the “Merger Agreement”), for ~~two segments:~~approximately $362.9 million, which included $273.5 million of equity value plus $91.3 million of net debt offset by the settlement of an existing relationship of $1.9 million. Ham-Let engages in the development, manufacturing and marketing of process valves, fittings and hoses for the control and monitoring of industrial systems in a variety of markets, including the Semiconductor ~~Products~~market. These products are primarily used in ultra clean gas transportation systems for the transmission of liquids and ~~Solutions (“Products”~~gases. The Company’s primary reason for this acquisition was to broaden UCT’s relevance to the semiconductor equipment market and provide access to a new set of customers in the semiconductor fab infrastructure market. See Note 2 to the Company’s Condensed Consolidated Financial Statements for further information about the acquisition of Ham-Let.

On April 13, 2021, the Company completed an underwritten public offering of 3,181,818 shares of the Company’s common stock, in which the Company received net proceeds of approximately $167.6 million, after deducting the underwriting discounts and offering expenses payable by the Company. On April 29, 2021, the Underwriters exercised the option to purchase an additional 477,272 shares of the Company’s common stock for approximately $25.2 million in cash. The Company intends to use the net proceeds from this offering for general corporate purposes, which may include working capital, sales and marketing activities, product development, general and administrative matters, and capital expenditures. The Company may use a portion of the net proceeds to acquire complementary businesses, products, services, or ~~“SPS”) and Semiconductor Services Business (“Services”~~technologies, although it has no agreements, commitments, or ~~“SSB”).~~plans for any specific acquisitions at this time.

Basis of Presentation — The unaudited Condensed Consolidated Financial Statements included in this quarterly report on Form 10-Q include the accounts of the Company and its ~~wholly-owned~~majority-owned subsidiaries and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). This financial information reflects all adjustments which are, in the opinion of the Company, normal, recurring and necessary for the fair financial statement presentation for the dates and periods presented. Certain information and footnote disclosures normally included in our annual financial statements, prepared in accordance with GAAP, have been condensed or omitted. The Company’s December ~~27, 2019~~25, 2020 balance sheet data were derived from its audited financial statements as of that date.

Fiscal Year — The Company uses a 52-53 week fiscal year ending on the Friday nearest December 31. All references to quarters refer to fiscal quarters and all references to years refer to fiscal years.

Principles of Consolidation — The Company’s Condensed Consolidated Financial Statements include the accounts of the Company and its ~~subsidiaries with the ownership interests of minority shareholders presented as noncontrolling interests.~~majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated upon consolidation.

Noncontrolling interests — ~~The Company recognizes noncontrolling~~Noncontrolling interests are recognized to reflect the portion of the equity of the majority-owned subsidiaries which is not attributable, directly or indirectly, to the controlling stockholder. The Company’s consolidated entities include partially-owned entities, which are (1) Cinos Co., Ltd (“Cinos Korea”), a South Korean company that provides outsourced cleaning and recycling of precision parts for the semiconductor industry through its operating facilities in South Korea, ~~86.0% of whose equity interests the Company is obligated to purchase and whose results the Company consolidates and~~ (2) Cinos Xian Clean Technology, Ltd. (“Cinos China”), a Chinese entity that is ~~60.0%~~partially owned by Cinos ~~Korea.~~Korea and (3) Rovac Pte, Ltd (“Rovac”), a Singaporean Company that is majority owned by Ham-Let. The interest held by others in Cinos Korea, ~~and~~ in Cinos China and in Rovac are presented as noncontrolling interests in the accompanying Condensed Consolidated Financial Statements. The noncontrolling interests will continue to be attributed ~~their~~its share of gains and losses even if that attribution results in a deficit noncontrolling ~~interests~~interests’ balance.

Segments — The Financial Accounting Standards Board’s (“FASB”) guidance regarding disclosure about segments in an enterprise and related information establishes standards for the reporting by public business enterprises of information about reportable segments, products and services, geographic areas, and major customers. The method for determining what information to report is based on the manner in which management organizes the reportable segments within the Company for making operational decisions and assessments of financial performance. The Company’s chief operating decision-maker is the Chief Executive Officer. The Company operates and reports 2 ~~segments.~~segments: Products and Services. Ham-Let’s business activities are similar to Products and, therefore, were included within this segment. See Note 1516 of the Notes to the ~~Company’s~~Condensed Consolidated Financial Statements.

Foreign Currency Translation and Remeasurement — The functional currency of the ~~SPS business unit’s~~majority of the Products division’s foreign subsidiaries is the U.S. dollar. The functional currency of the ~~SSB business unit’s~~Service division’s foreign subsidiaries is the local currency except for that of its Singapore and Scotland entities, which is the U.S. dollar.

~~The functional currency of the Company’s other international subsidiaries is either the U.S. dollar or their local currency.~~ For the Company’s foreign subsidiaries where the local currency is the functional currency, the Company translates the financial statements of these subsidiaries to U.S. dollars using month-end exchange rates for assets and liabilities, and average exchange rates ~~of exchange~~ for revenue, costs and expenses. Translation gains and losses are recorded in ~~AOCI as a component of stockholders'~~accumulated other comprehensive income (AOCI) within UCT stockholders’ equity. For the Company’s foreign subsidiaries where the U.S. dollar is the functional currency, any gains and losses resulting from the translation of the assets and liabilities of these subsidiaries are recorded in other income (expense), net.

Use of Estimates — The presentation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions include inventory valuation, accounting for income taxes, business combinations, valuation of goodwill, intangible assets and long-lived assets. The Company bases its estimates and judgments on historical experience and on various other assumptions that it believes are reasonable under the circumstances. However, future events are subject to change and the best estimates and judgments routinely require adjustments. Actual amounts may differ from those estimates.

Cash and Cash Equivalents — The Company considers currency on hand, demand deposits, time deposits, and all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash and cash equivalents. Cash and cash equivalents are held in various financial institutions in the United States and internationally.

Concentration of Credit Risk — Financial instruments which subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company sells its products and provides services primarily to semiconductor capital equipment manufacturers in the United States. The Company performs credit evaluations of its customers’ financial condition and generally requires no collateral.

~~Two of the~~The Company’s most significant customers (having accounted for 10% or more of ~~revenues~~revenues) and their related revenues as a percentage of total revenues were as follows:

	Three Months Ended						Nine Months Ended						Three Months Ended						Nine Months Ended
	September 25,			September 27,			September 25,			September 27,			September 24,			September 25,			September 24,			September 25,
	2020			2019			2020			2019			2021			2020			2021			2020
Lam Research Corporation		42.9	%		37.6	%		42.3	%		39.4	%		42.3	%		42.9	%		40.8	%		42.3	%
Applied Materials, Inc.		25.2	%		24.3	%		25.0	%		21.5	%		24.3	%		25.2	%		23.4	%		25.0	%
Total		68.1	%		61.9	%		67.3	%		60.9	%		66.6	%		68.1	%		64.2	%		67.3	%

~~In addition,~~NaN customers’ accounts receivable balances, Lam Research Corporation and Applied Materials, Inc., were individually greater than 10% of accounts receivable as of September 24, 20213, and in the aggregate approximately 34.8% of accounts receivable. NaN of the Company’s ~~customers:~~customers account receivable balances, Lam Research Corporation, Applied Materials, Inc. and ASM International, Inc., ~~had accounts receivable balances that~~ were individually greater than ~~10%~~10.0% of total accounts receivable as of ~~September~~December 25, 2020, ~~and December 27, 2019,~~ and in the aggregate approximately ~~59.1% and 66.7%~~67.3% of total accounts ~~receivable, respectively.~~receivable.

Fair Value of Measurements — The Company measures its cash equivalents, derivative contracts, contingent earn-out liabilities, pension obligation and common stock purchase obligation at fair value on a recurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. Assets and liabilities recorded at fair value are measured and classified in accordance with a three-tier fair value hierarchy based on the observability of the inputs available in the market used to measure fair value:

Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 — Inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be derived from observable market data. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and credit ratings.

Level 3 — Unobservable inputs that are supported by little or no market activities.

Derivative Financial Instruments — The Company uses forward contracts to hedge a portion of, but not all, existing and anticipated foreign currency denominated transactions typically expected to occur within 24 months. The purpose of the hedge is to mitigate the effect of exchange rate fluctuations on certain foreign currency denominated costs and eventual cash flows. The Company recognizes derivative instruments as either assets or liabilities in the accompanying Condensed Consolidated Balance Sheets at fair value. The Company records changes in the fair value of the derivatives in the accompanying Condensed Consolidated Statements of Operations as other income (expense), net, or as a component of AOCI in the accompanying Condensed Consolidated Balance Sheets.

Inventories — Inventories are stated at the lower of cost (which approximates actual cost on a first-in, first-out basis) or net realizable value. The Company evaluates the valuation of all inventories, including raw materials, work-in-process, finished goods and spare parts on a periodic basis. Obsolete inventory or inventory in excess of management’s estimated usage is ~~written-down~~written down to its estimated market value less costs to sell, if less than its cost. Inherent in the estimates of market value are management’s estimates related to economic trends, future demand for products, and technological obsolescence of the Company’s products.

Inventory write downs inherently involve judgments ~~as to~~based on assumptions about expected future demand and the impact of market conditions on those assumptions. Although the Company believes that the assumptions it used in estimating inventory write downs are reasonable, significant changes in any one of the assumptions in the future could produce a significantly different result. There can be no assurances that future events and changing market conditions will not result in significant increases in inventory write downs.

Property, Plant and Equipment, net — Property, plant and equipment are stated at cost, or, in the case of equipment under finance leases, the present value of future minimum lease payments at inception of the related lease. The Company also capitalizes interest on borrowings related to eligible capital expenditures. Capitalized interest is added to the cost of the qualified assets and ~~depreciated.~~is subject to depreciation. Depreciation and amortization are computed using the straight-line method over the lesser of the estimated useful lives of the assets or the terms of the leases. Useful lives range from three to fifty years. Direct costs incurred to develop software for internal use are capitalized and amortized over an estimated useful life of three orto ten years. Costs related to the design or maintenance of internal use software are expensed as incurred. Capitalized internal use software is included in computer equipment and software.

Long-lived Assets — The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset group may not be recoverable. The Company assesses the fair value of the assets based on the amount of the undiscounted future cash flows that the assets are expected to generate and recognizes an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset are less than the carrying value of the asset. If the Company identifies an impairment, the Company reduces the carrying value of the group of assets to comparable market values, when available and appropriate, or to its estimated fair value based on a discounted cash flow approach.

The Company assessed the useful lives of its long-lived assets, including property, plant and equipment as well as its intangible assets as of September ~~25, 2020~~24, 2021 and concluded that 0 impairment was required.

Leases — The Company determines if an arrangement is a lease, or contains a lease, at the inception of the arrangement. When the Company determines the arrangement is a lease, or contains a lease, at lease inception, it then determines whether the lease is an operating lease or a finance lease. Operating and finance leases with lease terms of one year or greater result in the Company recording a right-of-use (ROU) asset and lease liability on its balance sheet. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating and finance lease ROU assets and liabilities are initially recognized based on the present value of lease payments over the lease term. In determining the present value of lease payments, the Company uses the implicit interest rate if readily determinable or when the implicit interest rate is not readily determinable, the Company uses its incremental borrowing rate. The incremental borrowing rate is not a commonly quoted rate and is derived through a combination of inputs including the Company’s credit rating and the impact of full collateralization. The incremental borrowing rate is based on the Company’s collateralized borrowing capabilities over a similar term of the lease payments. The Company utilizes the consolidated group incremental borrowing rate for all leases. The operating lease ROU asset also includes any lease payments made and excludes any lease incentives. Specific lease terms used in computing the ROU assets and lease liabilities may include options to extend or terminate the lease when the Company believes it is reasonably certain that it will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. As allowed by the guidance, the Company has elected not to recognize ROU assets and lease liabilities that arise from short-term (12 months or less) leases for any class of underlying asset. Operating leases are included in operating lease ROU assets, other current liabilities, and long-term operating lease liabilities on the Company’s consolidated balance sheet. The Company’s finance leases at September ~~25, 2020~~24, 2021 and December ~~27, 2019~~25, 2020 were not significant.

Goodwill and ~~Indefinite Lived~~Indefinite-Lived Intangible Assets — Goodwill and indefinite-lived intangible assets are not amortized, but are reviewed for impairment annually. Intangible assets are presented at cost, net of accumulated amortization, and are amortized on either a straight-line method or on an accelerated method over their estimated future discounted cash flows. The Company reviews goodwill and purchased intangible assets with indefinite lives for impairment annually and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable, such as when reductions in demand or significant economic slowdowns in the semiconductor industry are present.

Deferred Debt Issuance Costs — Debt issuance costs incurred in connection with obtaining debt financing are deferred and presented as a direct deduction from Bank Borrowings in the accompanying Condensed Consolidated Balance Sheets. Costs incurred in connection with revolving credit facilities and letter of credit facilities are deferred and presented as an offset to bank borrowings in the accompanying Condensed Consolidated Balance Sheets. Deferred costs are amortized on an effective interest method basis over the contractual term.

Defined Benefit Pension Plan — The Company has a noncontributory defined benefit pension plan covering substantially all of the employees of one of its foreign entities upon termination of their employee services. For further discussion of the Company’s defined benefit pension plan see Note 89 of the Notes to the Condensed Consolidated Financial Statements.

Revenue Recognition — Revenue is recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company ~~assesses collectability based on~~performs the ~~credit worthiness~~following five steps to determine when to recognize revenue: (1) identification of the ~~customer~~contract(s) with customers, (2) identification of the performance obligations in the contract, (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligations in the contract, and ~~past transaction history. The Company performs on-going credit evaluations~~(5) recognition of ~~customers and generally does not require collateral from customers.~~revenue when, or as, a performance obligation is satisfied.

Shipping and Handling Costs — Shipping and handling costs are included as a component of cost of revenues.

Research and Development Costs — Research and development costs are expensed as incurred.

Stock-Based Compensation Expense — The Company maintains stock-based compensation plans which allow for the issuance of equity-based awards to executives and certain employees. These equity-based awards include ~~stock options,~~ restricted stock awards ~~and~~(“RSAs”), restricted stock ~~units.~~units (“RSUs”) and performance stock units (“PSUs”). The Company also maintains an employee stock purchase plan (“ESPP”) that provides for the issuance of shares to all eligible employees of the Company at a discounted price.

Government Subsidies — Government subsidies are recognized where there is reasonable assurance that the subsidy will be received and all attached conditions will be complied with. When the subsidy relates to an expense item, it is recognized as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the subsidy relates to an asset, it is recognized as income in equal amounts over the expected useful life of the related asset. When the subsidy does not relate to specific expenses or assets, the income is accounted for in the period where there is reasonable assurance that the subsidy will be received.

Income Taxes — The Company utilizes the asset and liability method of accounting for income taxes, under which deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future. In evaluating our ability to realize our deferred tax assets within the jurisdiction from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. In projecting future taxable income, we begin with historical results and incorporate assumptions about the amount of future federal, state, ~~federal,~~ and foreign pretax operating income adjusted for items that do not have tax consequences. The assumptions about future taxable income require significant judgment and are consistent with the plans and estimates we are using to manage the underlying businesses. In evaluating the objective evidence that historical results provide, we consider recent cumulative income (loss). A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. ~~The Company continued to maintain a full valuation allowance on its federal and state deferred tax amounts as of September 25, 2020.~~

Income tax positions must meet a more likely than not recognition threshold to be recognized. ~~Income~~The Company recognizes tax benefits from uncertain tax positions ~~that previously failed to meet the~~only if it is more likely than not ~~threshold are~~that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the ~~first subsequent~~ financial ~~reporting period in which~~statements from such positions are then measured based on the largest benefit that ~~threshold is met. Previously recognized tax positions that no longer meet the more likely~~has a greater than ~~not threshold are derecognized in the first subsequent financial reporting period in which that threshold is no longer met.~~50% likelihood of being realized upon ultimate settlement. The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits within the ~~Condensed Consolidated Statements~~consolidated statements of ~~Operations~~income as income tax expense.

The calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of complex tax laws. Resolution of these uncertainties in a manner inconsistent with the Company’s expectations could have a significant impact on its results of operations and financial position. Management believes that it has adequately providedCompany accounts for ~~any adjustments that may result from these examinations; however, the outcome of tax audits cannot be predicted with certainty.~~Global Intangible Low-Taxed Income (“GILTI”) as period costs when incurred.

Net Income per Share — Basic net income per share is computed by dividing net income by the weighted average number of shares outstanding for the period. Diluted net income per share is calculated by dividing net income by the weighted average number of

common shares outstanding and common equivalent shares from dilutive ~~stock options and~~ restricted stock using the treasury stock method, except when such shares are anti-dilutive. See Note 1415 of the Notes to the ~~Company’s~~ Condensed Consolidated Financial Statements.

Business Combinations — The Company recognizes assets acquired (including goodwill and identifiable intangible assets), liabilities assumed and noncontrolling interest at fair value on the acquisition date. Subsequent changes to the fair value of such assets acquired and liabilities assumed are recognized in earnings, after the expiration of the measurement period, a period not to exceed 12 months from the acquisition date. Acquisition-related expenses and acquisition-related restructuring costs are recognized in earnings in the period in which they are incurred.

~~In December 2019, the FASB issued ASU 2019-12,~~ ~~Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes~~. This standard simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Topic 740 related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill and allocating consolidated income taxes to separate financial statements of entities not subject to income tax. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. Upon adoption, the Company must apply certain aspects of this standard retrospectively for all periods presented while other aspects are applied on a modified retrospective basis

through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company is currently evaluating the impact of this new standard on its consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financing Reporting. This guidance provides temporary optional expedients and exceptions through December 31, 2022 to the U.S. GAAP guidance on contract modifications to ease the financial reporting burdens of the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. ~~This~~The Company expects to adopt this guidance ~~was effective upon issuance. As a result,~~and apply it to reference rate reform effected arrangement modifications.

Although there are several other new accounting pronouncements issued by the FASB, the Company ~~adopted the guidance in the second quarter~~does not believe any of ~~fiscal 2020 and there was no financial~~these accounting pronouncements had or will have a material impact on ~~the Condensed~~its Consolidated Financial ~~Statements upon adoption.~~Statements.

~~Dynamic~~ ~~Manufacturing Solutions, LLC (“DMS”)~~Ham-Let (Israel-Canada) Ltd.

On ~~April 15, 2019,~~March 31, 2021, the Company ~~purchased substantially~~acquired all of the ~~assets~~outstanding common shares of DMS, a semiconductor weldment and solutions provider. Pursuant to the purchase agreement, the former owners of DMS were entitled to up to a maximum of $12.5 million of potential cash earn-out if the combined weldment business achieves certain gross profit and gross margin targetsHam-Let for the twelve months ended June 26, 2020. The fair value of the earn-out at the acquisition date was $1.5 million and was determined using a risk-adjusted earnings projection utilizing the Monte Carlo Simulation method. These inputs are not observable in the market and thus represent a Level 3 measurement as discussed in Note 1 of the Company’s Condensed Consolidated Financial Statements. The total purchase consideration of ~~DMS for purposes of the Company’s purchase price allocation was determined to be $31.4~~$362.9 million, which ~~includes~~included $273.5 million of equity value plus $91.3 million of net debt offset by the ~~cash payment~~settlement of ~~$29.9~~an existing relationship of $1.9 million ~~and~~(vendor of UCT). In addition, the ~~fair value~~Company incurred approximately $10.6 million of costs related to the ~~potential earn-out payments of $1.5 million.~~

~~During the second quarter of~~acquisition ($1.0 million incurred in fiscal year 2020 ~~DMS achieved the specified performance target of the earn-out, which resulted in the maximum payout of $12.5~~and $9.6 million ~~which~~ was ~~paid in August 2020. The increase in fair value of $3.0 from $9.5 million at December 27, 2019 was recorded as other expense in the condensed consolidated statement of~~charged to operations for the nine months ended September ~~25, 2020, respectively.~~24, 2021). Ham-Let engages in the development, manufacturing and marketing of process valves, fittings and hoses for the control and monitoring of industrial systems in a variety of markets, including the Semiconductor market. These products are primarily used in ultra clean gas transportation systems for the transmission of liquids and gases. The Company’s primary reason for this acquisition was to broaden UCT’s relevance to the semiconductor equipment market and provide access to a new set of customers in the semiconductor fab infrastructure market. The Company borrowed an additional $355.0 million from its existing Credit Facility to finance the acquisition. See further discussion in Note 7 to the Notes to Condensed Consolidated Financial Statements.

In ~~the first quarter of fiscal year~~December 2020, the Company announced the acquisition of Ham-Let. The expected cash consideration for the equity valuation at that time was approximately 934.7 million Israeli New Shekel (“ILS”) or $287.1 million in equity value. In order to hedge against the foreign currency fluctuation of the USD against ILS at the settlement date, UCT received Board of Director approval to enter into forward hedge contracts to buy ILS. In January 2021, UCT completed the purchase of forward hedge contracts of 905.8 million ILS to lock in the $283.9 million cash that was delivered at the closing of the Ham-Let acquisition. US GAAP requires the recording of the purchase price of the acquired entity at the spot rate on acquisition ~~accounting~~date, rather than the cash amount hedged and paid. The variance between the cash paid of $283.9 million and the spot value at acquisition of $273.5 million was a loss of $10.4 million and was recorded in the accompanying Condensed Consolidated Statements of Operations as other income (expense), net for the nine month period ended September 24, 2021.

The Company has preliminarily allocated the purchase price of Ham-Let to the tangible assets, liabilities, identifiable intangible assets acquired and noncontrolling interest, based on their estimated fair values. The excess of purchase price over the aggregate fair value was recorded as goodwill. Goodwill associated with the acquisition is primarily attributable to the future technology, market presence and knowledgeable and experienced workforce. The fair value assigned to identifiable intangible assets acquired was determined using the income approach taking into account the Company’s consideration of a number of inputs, including an independent third-party analysis that was based upon estimates and assumptions provided by the Company. These estimates and assumptions were determined through established and generally accepted valuation techniques. The estimated fair value of the tangible and intangible assets acquired was allocated at Ham-Let’s acquisition date.

The allocation of the purchase price is preliminary pending the completion of various analyses and the finalization of estimates. The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the fair values of certain tangible assets and liabilities, primarily inventories, accounts receivable, property, plant and equipment, operating lease right-of-use assets and related operating lease liabilities, income and other taxes, intangible assets and residual goodwill. During the measurement period, which can be no more than one year from the date of acquisition, we expect to continue to obtain information to assist us in determining the final fair value of the net assets acquired at the acquisition date during the measurement period. Assets acquired, liabilities assumed and noncontrolling interest are recorded based on valuations derived from estimated fair value assessments and assumptions used by the Company. Thus, the provisional measurements of fair value discussed above are subject to change. The Company expects to finalize

the valuation as soon as practicable, but not later than one year from the acquisition date. While the Company believes that its estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different valuations assigned to the individual assets acquired, liabilities assumed and noncontrolling interest, and the resulting amount of goodwill.

Subsequent to the filing of the Company’s June 25, 2021 financial statements, the Company continued its analysis of the fair value of ~~the~~ assets acquired, liabilities assumed as well as the noncontrolling interests from the acquisition date through the end of the third quarter of 2021. As a result of its analysis, the Company recorded, as a measurement period adjustment, a reduction in the fair value of the inventories of approximately $6.6 million and an increase to noncontrolling interest of $0.6 million during the third quarter of 2021. This also resulted in an $0.8 million decrease in deferred tax liabilities ~~assumed.~~ and an increase in goodwill of $6.4 million during the third quarter of 2021.

The following table summarizes the ~~recognized amounts~~preliminary fair values of assets acquired, ~~and~~ liabilities assumed and noncontrolling interest at the date of acquisition ~~date:~~(in millions):

Fair Market Values (in millions)
Cash and cash equivalents				$	20.1
Accounts receivable	$	1.5			51.6
Inventories		8.9			73.7
Equipment and leasehold improvements		5.4
Prepaid expenses and other assets					17.3
Property, plant and equipment					52.1
Goodwill		12.3			92.5
Purchased intangible assets		6.9			124.4
Deferred tax assets					0.8
Operating lease right-of-use assets					27.7
Other non-current assets		0.3			2.2
Total assets acquired		35.3			462.4
Bank borrowings					(5.0	)
Accounts payable		(3.8	)		(30.8	)
Accrued compensation and related benefits					(10.5	)
Other current liabilities					(12.4	)
Deferred tax liabilities					(11.2	)
Operating lease liabilities					(23.8	)
Other liabilities		(0.1	)		(4.0	)
Total liabilities assumed		(3.9	)		(97.7	)
Purchase consideration transferred	$	31.4
Noncontrolling interests					(1.8	)
Total consideration transferred				$	362.9

Goodwill is not amortized but is reviewed for impairment at least annually and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The results of operations for the Company for the nine months ended September 24, 2021 include operating activities for Ham-Let since its acquisition date of March 31, 2021. For the three and nine months ended September 24, 2021, net sales of approximately $64.4 million and $122.6 million, respectively, attributable to Ham-Let were included in the consolidated results of operations. For the three and nine months ended September 24, 2021, results of operations included charges of $4.6 million and $9.2 million, respectively, attributable to amortization of purchased intangible assets. In addition, deal costs associated with the acquisition of $0.1 million and $9.5 million were included in the results of operations for the three and nine months ended September 27, 2019 included operating activity for DMS since its acquisition date of April 15, 2019. The results of operations for the three and nine months ended September 25, 2020, included charges attributable to amortization of purchased intangible assets of $0.3 million and $0.9 million, respectively, and $0.3 million and $0.5 million for the three and nine months ended September 27, 2019, respectively, which24, 2021, respectively. Deal costs are included in general and administrative expenses in the Company’s Condensed Consolidated ~~Statements~~Results of Operations.

The following unaudited pro forma consolidated results of operations assume the ~~DMS~~ acquisition was completed as of the beginning of the year of the reporting periods ~~presented~~. presented.

The unaudited pro forma consolidated results of operations for the three and nine months ended September ~~27, 2019 is~~24, 2021 and September 25, 2020 (in millions, except per share amounts) are summarized as follows:

	Nine Months Ended		Three Months Ended				Nine Months Ended
	September 27,		September 24,		September 25,		September 24,		September 25,
	2019		2021		2020		2021		2020
(In millions, except per share amounts)
Revenues	$	789.0	$	553.7	$	411.9	$	1,542.8	$	1,172.8
Net income	$	2.2	$	32.0	$	21.5	$	87.8	$	27.2
Basic income per share	$	0.06	$	0.71	$	0.53	$	2.05	$	0.68
Diluted income per share	$	0.06	$	0.70	$	0.52	$	2.00	$	0.67

The unaudited pro forma results above include adjustments related to the purchase price allocation and financing of the acquisition, primarily to increase amortization for the identifiable intangible assets, ~~acquired,~~ to increase interest expense for the additional debt incurred to complete the acquisition, to eliminate the $11.6 million loss related to the forward contracts entered into in conjunction of the acquisition of Ham-Let and to reflect the related income tax effect. The unaudited pro forma results for the nine months ended September 25, 2020 include acquisition related costs of $15.0 million which are not expected to occur in future quarters. The unaudited pro forma condensed combined financial information has been prepared by management for illustrative purposes only and are not necessarily indicative of the condensed consolidated financial position or results of ~~operations~~income in future periods or the results that would have been realized had UCT and ~~DMS~~Ham-Let been a combined company during the specified periods. The unaudited pro forma condensed combined financial information does not reflect any operating efficiencies and/or cost savings that the Company may achieve with respect to the combined companies, or any liabilities that may result from integration activities.

On April 15, 2019, the Company purchased substantially all of the assets of DMS, a semiconductor weldment and solutions provider based in Austin, Texas. Pursuant to the purchase agreement, the former owners of DMS were entitled to receive up to $12.5 million of potential cash earn-out if the combined weldment business, after the acquisition, achieved certain gross profit and gross margin targets for the twelve months ending June 26, 2020. During the second quarter of fiscal year 2020, DMS achieved the specified performance target of the earn-out, which resulted in the maximum payment of $12.5 million paid in August 2020. In the first quarter of fiscal year 2020, the Company completed the acquisition accounting and the valuation of the fair value of the assets acquired and the liabilities assumed.

	September 25,		December 27,		September 24,		December 25,
(In millions)	2020		2019		2021		2020
Raw materials	$	106.3	$	99.9	$	184.5	$	102.9
Work in process		55.8		57.6		92.6		64.5
Finished goods		13.2		14.9		47.5		13.0
Total	$	175.3	$	172.4	$	324.6	$	180.4

	Useful Life	September 25,			December 27,			Useful Life	September 24,			December 25,
(In millions)	(in years)	2020			2019			(in years)	2021			2020
Land		$	3.2		$	4.8			$	4.7		$	3.8
Buildings	50		35.0			36.9		50		52.7			37.2
Machinery and equipment	5-10		67.0			58.1		5-10		125.7			73.8
Leasehold improvements	*		45.7			41.8		*		53.6			46.7
Computer equipment and software	3-10		41.8			32.1		3-10		55.8			42.5
Furniture and fixtures	5		4.3			4.4		5		5.1			4.4
			197.0			178.1				297.6			208.4
Accumulated depreciation			(75.1	)		(56.7	)			(105.6	)		(84.0	)
Construction in progress			28.6			23.9				35.9			34.8
Total		$	150.5		$	145.3			$	227.9		$	159.2

During the first quarter of fiscal year 2020, the Company made a strategic decision to fully integrate Quantum Global Technologies, LLC’s (“QGT”) corporate office responsibilities from Quakertown, PA to UCT’s corporate office in Hayward, CA. As a result, the Company recorded a restructuring charge of $1.9 million for the nine months ended September 25, 2020, respectively, in general and administrative expense, primarily related to employee severance as well as the impaired value of the facility lease and losses on sale of equipment.

~~- 14 -~~In September 2018, a fire in a facility owned by Cinos Korea destroyed certain assets, including equipment, the building and inventory owned by one of its customers. During the first fiscal quarter of 2021, the Company received final insurance proceeds related to the Cinos fire of $7.3 million, which was recorded for the nine months ended September 24, 2021 in the accompanying Condensed Consolidated Statements of Operations as other income (expense), net. No insurance proceeds were received in the comparable period in the prior year.

The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following table summarizes, for assets or liabilities measured at fair value, the respective fair value and the classification by level of input within the fair value hierarchy:

			Fair Value Measurement at								Fair Value Measurement at
			Reporting Date Using								Reporting Date Using
Description	September 25, 2020		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		September 24, 2021		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
(In millions)
Other non-current assets:
Purchase option									$	1.0	$	—	$	—	$	1.0
Other liabilities:
Common stock purchase obligation	$	8.2	$	—	$	—	$	8.2
Forward contracts									$	0.3	$	—	$	0.3	$	—
Pension obligation	$	5.2	$	—	$	—	$	5.2	$	3.3	$	—	$	—	$	3.3

			Fair Value Measurement at								Fair Value Measurement at
			Reporting Date Using								Reporting Date Using
Description	December 27, 2019		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		December 25, 2020		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
(In millions)
Prepaid expenses and other:
Forward contracts									$	1.1	$	—	$	1.1	$	—
Other liabilities:
Contingent earn-out liability	$	9.5	$	—	$	—	$	9.5
Common stock purchase obligation	$	6.8	$	—	$	—	$	6.8	$	12.6	$	—	$	—	$	12.6
Pension obligation	$	4.4	$	—	$	—	$	4.4	$	4.7	$	—	$	—	$	4.7

A wholly-owned subsidiary of Ham-Let owns 70.0% interest in Rovac with an option to acquire the remaining 30.0% ownership interest. The fair value of the ~~contingent earn-out liability~~purchase option recorded in the Company’s financial statements was ~~transferred~~determined using the Black Scholes option pricing model which utilizes the stock price of Rovac, volatility, expected life and risk-free interest rate based on the implied yield available on U.S. Treasury Securities with a maturity equivalent to the purchase option’s expected life. These assumptions were developed during the valuation process resulting in a Level 3 classification.

The estimated fair value of foreign currency forward contracts is based upon quoted market prices obtained from independent pricing services for similar derivative contracts and these financial instruments are characterized as Level 2 assets in the fair value hierarchy.

The estimated fair value of the pension obligation is based on expected years of service and average compensation. The valuation model used to value the pension obligation utilizes mortality rate, inflation, interest rate risks and changes in the life expectancy for pensioners. These assumptions are routinely made in the appraisal process by the independent actuary thus resulted in a Level 3 classification.

The estimated fair value of the common stock purchase obligation is based on a combination of an income and market valuation approach. The income and market valuation approaches may incorporate Level 3 fair value measures for instances when observable inputs are not available. The more significant judgmental assumptions used to estimate the value of the common stock purchase obligation include an estimated discount rate, a range of assumptions that form the basis of the expected future net cash flows (e.g., the revenue growth rates and operating margins), and a company specific beta. The significant judgmental assumptions used that incorporate market data, including the relative weighting of market observable information and the comparability of that information in the valuation models, are forward-looking and could be affected by future economic and market conditions. In July 2021, the Company entered into an amendment with Cinos Korea and a shareholder of Cinos Korea to terminate the obligation to purchase additional interest in Cinos Korea. As a result, the balance of the common stock purchase obligation of $16.4 million was reclassified to the noncontrolling interest in Cinos Korea.

There were no transfers from Level 1 ~~from~~or Level ~~3 due to the achievement of the maximum amount of the earn-out as defined in the purchase agreement with DMS dated April 15, 2019.~~2. Fair value adjustments were noncash, and therefore did not impact the Company’s liquidity or capital resources. Qualitative information about Level 3 fair value measurements ~~are primarily~~is as follows:

	September 25,		Valuation	Unobservable			September 24,		Valuation	Unobservable
	2020		Techniques	Input	Range		2021		Techniques	Input	Range/Multiple
(Dollars in millions, except rate/multiple)	(Dollars in millions, except rate/multiple)						(Dollars in millions, except rate/multiple)
Common stock purchase obligation	$	8.2	Discounted cash flow	Revenue multiple		1.5
Purchase option							$	1.0	Black‑Scholes option-pricing model	Volatility		65.0	%
										Risk free interest rate		0.03	%
				EBITDA Multiple		5.5				Stock price	$	1.2
				Discount rate	25.0%					Strike price	$	0.1
Pension obligation	$	5.2	Projected unit credit method	Discount rate	2.0%		$	3.3	Projected unit credit method	Discount rate		2.1	%
				Rate on return	1.7%					Rate on return		2.6	%
				Salary increase rate	4.5%					Salary increase rate		4.0	%

The Company utilizes foreign currency forward contracts to reduce the risk that its cash flows and earnings will be adversely affected by foreign currency exchange rate fluctuations. The Company classifies its foreign currency forward within Level 2 of the fair-value hierarchy discussed in Note 4 of the Company’s Condensed Consolidated Financial Statements as the valuation inputs are based on quoted prices and market observable data of similar instruments.

The Company uses foreign currency contracts to economically hedge the functional currency equivalent cash flows of non-U.S. dollar- denominated acquisitions. The change in fair value of these derivatives is recorded through earnings in other income (expense), net.

The Company records all derivatives in the Condensed Consolidated Balance Sheets at fair value. The Company’s accounting treatment for these derivative instruments is based on its hedge designation. The following tables show the Company’s derivative instruments at gross fair value as of September 24, 2021and December 25, 2020.

The effect of derivative instruments in cash flow hedging relationships on income and other comprehensive income (OCI) is summarized below:

The amount of gain or loss reclassified from accumulated OCI into income is $0.1 million and $0.2 million for the three and nine months ended September 24, 2021, respectively. The amount of gain or loss reclassified from accumulated OCI into income is not significant for the three and nine months ended September 25, 2020.

In 2020, the Company entered into multiple foreign currency contracts to hedge the functional currency equivalent cash flows related to the non-U.S. dollar-denominated acquisition price of Ham-Let. As of March 26, 2021, these contracts were terminated and the $10.4 million liability related to these forward hedge contracts was paid on March 31, 2021 in conjunction with the acquisition of Ham-Let.

The Company’s methodology for allocating the purchase price relating to an acquisition is determined through established and generally accepted valuation techniques. Goodwill is measured as the excess of the consideration transferred over the sum of the amounts assigned to tangible and identifiable intangible assets acquired less liabilities assumed.

Goodwill and purchased intangible assets with indefinite useful lives are not amortized, but are reviewed for impairment at least annually and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. To test goodwill for impairment, the Company first performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If the Company concludes it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, the Company does not proceed to perform a quantitative impairment test. If the Company concludes it is more likely than not that the fair value of the reporting unit is less than its carrying value, a quantitative goodwill impairment test will be performed by comparing the fair value of each reporting unit to its carrying value. A quantitative impairment analysis, if necessary, considers the income approach, which requires estimates of the present value of expected future cash flows to determine a reporting unit’s fair value. Significant estimates include revenue growth rates and operating margins used to calculate projected future cash flows, discount rates, and future economic and market conditions. A goodwill impairment charge is recognized for the amount by which the reporting unit’s fair value is less than its carrying value. Any loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The process of evaluating the potential impairment of goodwill and intangible assets requires significant judgment. The Company regularly monitors current business conditions and other factors including, but not limited to, adverse industry or economic trends and lower projections of profitability that may impact future operating results.

Intangible assets are generally recorded in connection with a business acquisition. The Company evaluates the useful lives of its intangible assets each reporting period to determine whether events and circumstances require revising the remaining period of amortization. In addition, the Company reviews indefinite lived intangible assets for impairment when events or changes in circumstances indicate their carrying value may not be recoverable and tests definite lived intangible assets at least annually for impairment. Management considers such indicators as significant differences in product demand from the estimates, changes in the competitive and economic environment, technological advances, and changes in cost structure.

		As of September 25, 2020							As of December 27, 2019								As of September 24, 2021							As of December 25, 2020
		Gross							Gross								Gross							Gross
	Useful Life	Carrying		Accumulated			Carrying		Carrying		Accumulated			Carrying		Useful Life	Carrying		Accumulated			Carrying		Carrying		Accumulated			Carrying
(Dollars in millions)	(in years)	Amount		Amortization			Value		Amount		Amortization			Value		(in years)	Amount		Amortization			Value		Amount		Amortization			Value
Customer relationships	6 - 10	$	119.4	$	(47.9	)	$	71.5	$	119.4	$	(39.8	)	$	79.6	6 - 10	$	193.3	$	(62.4	)	$	130.9	$	119.4	$	(50.6	)	$	68.8
Tradename	4 - 6*		27.0		(10.8	)		16.2		27.0		(8.1	)		18.9	4 - 6*		36.8		(15.8	)		21.0		27.0		(11.7	)		15.3
Intellectual property/know-how	7 - 12		13.9		(9.4	)		4.5		13.9		(8.4	)		5.5	7 - 15		49.4		(12.1	)		37.3		13.9		(9.8	)		4.1
Recipes	20		73.2		(7.6	)		65.6		73.2		(4.9	)		68.3	20		73.2		(11.3	)		61.9		73.2		(8.5	)		64.7
Standard operating procedures	20		8.6		(0.9	)		7.7		8.6		(0.6	)		8.0	20		8.6		(1.3	)		7.3		8.6		(1.0	)		7.6
Backlog																1		5.2		(2.6	)		2.6		—		—			—
Total		$	242.1	$	(76.6	)	$	165.5	$	242.1	$	(61.8	)	$	180.3		$	366.5	$	(105.5	)	$	261.0	$	242.1	$	(81.6	)	$	160.5

The Company amortizes its intangible assets on a straight-line or accelerated basis over the estimated economic life of the assets. Amortization expense was approximately ~~$4.9~~$9.5 million and ~~$5.1~~$23.9 million for the three and nine months ended September ~~25, 2020 and September 27, 2019,~~24, 2021, respectively, and ~~was approximately~~$4.9 million and $14.8 million ~~and $15.0 million~~ for the three and nine months ended September 25, 2020, ~~and September 27, 2019.~~respectively. Amortization expense related to ~~QGT’s~~ recipes, ~~and~~ standard operating procedures and certain intellectual property/know-how is charged to cost of revenues and the remainder is charged to general and administrative expense. As of September ~~25, 2020,~~24, 2021, future estimated amortization expense is expected to be as follows:

	Amortization		Amortization
(In millions)	Expense		Expense
2020 (remaining in year)	$	4.9
2021		19.6
2021 (remaining in year)			$	9.5
2022		19.3		33.4
2023		14.2		26.4
2024		14.0		25.5
2025				23.2
Thereafter		84.5		134.0
Total	$	156.5	$	252.0

In August 2018, the Company entered into a credit agreement (the “Credit Agreement”) with Barclays Bank that provided a Term Loan, a Revolving Credit Facility, and a Letter of Credit Facility ~~(the~~(collectively the “Credit ~~Facilities”~~Facility”). UCT and certain of its subsidiaries have agreed to secure all of their obligations under the Credit ~~Facilities~~Facility by granting a first priority lien in substantially all of their respective personal property assets (subject to certain exceptions and limitations). In August 2018, the Company borrowed $350.0 million under the Term Loan Facility and used the proceeds, together with cash on hand, to finance the acquisition of QGT and to refinance its previous credit facilities.

On March 31, 2021, the Company entered into a Second Amendment (the “Second Amendment”) to the Credit Agreement to, among other things, (i) refinance and reprice $272.8 million of existing term B borrowings that will remain outstanding and (ii) obtain a $355.0 million senior secured incremental term loan B facility ((i) and (ii) collectively the “Term Loan”) with Barclays Bank, which increased the amount of term loan indebtedness outstanding under the Company’s Credit Facility.

The Term Loan has a maturity date of August 27, 2025, with monthly interest payments in arrears, quarterly principal payments of 0.625% of the ~~original~~ outstanding principal balance ~~payable beginning January 2019,~~thereof as of March 31, 2021, with the remaining principal paid upon maturity. ~~The~~Under the Credit Facility, the Company may elect that the Term Loan ~~accrues~~bear interest at a rate per annum equal to either (a) “ABR” (as defined in the Credit Agreement), plus the applicable margin or (b) the “Eurodollar Rate” (as defined in the Credit Agreement), based on LIBOR, plus the applicable margin. The applicable margin for the Term Loan is equal to a ~~base LIBOR~~ rate ~~determined by reference~~per annum to either (i) at any time that the Company’s corporate family rating is Ba3 (with a stable outlook) or higher from Moody’s and BB- (with a stable outlook) or higher from S&P, (x) 3.50% for such Eurodollar term loans and (y) 2.50% for such ABR term loans or (ii) at all other times, (x) 3.75% for such Eurodollar term loans and (y) 2.75% for such ABR term loans. Interest on the Term Loan is payable on (1) in the case of such ABR term loans, the last day of each calendar quarter and (2) in the case of such Eurodollar term loans, the last day of each relevant interest period and, in the case of any interest period longer than three months, on each successive date three months after the first day of such interest period. On March 29, 2021, the Company elected that the Term Loan outstanding as of March 31, 2021 accrue interest based on the “Eurodollar Rate” for an initial interest period of one month. As of March 31, 2021, the applicable margin with respect to the ~~London interbank offered rate for dollars, plus 4.5% (subject~~Term Loan facility was 3.75%. Pursuant to ~~certain adjustments quarterly based upon~~ the ~~Company’s consolidated leverage ratio).~~ Second Amendment to the Credit Agreement, the Credit Facility contains customary LIBOR replacement provisions in the event LIBOR is discontinued. At September ~~25, 2020~~24, 2021, the Company had an outstanding amount under the Term Loan of ~~$287.8~~$569.9 million, gross of unamortized debt issuance costs of ~~$8.3~~$14.4 million. As of September 24, 2021, the interest rate on the outstanding Term Loan was 3.8%.

The Revolving Credit Facility has an initial available commitment of $65.0 million and a maturity date of August 27, 2023. The Company pays a quarterly commitment fee in arrears equal to 0.25% of the average daily available commitment outstanding. ~~In March 2020, the Company drew $40.0 million under the~~

The Revolving Credit Facility ~~to fund operations. In September 2020, the revolver balance of $40.0 million was repaid in full.~~

~~As of~~ ~~September 25, 2020, the interest rate on the outstanding Term Loan was 4.7%. After December 31, 2021, LIBOR will officially be phased out. The Company will work with its bank to determine alternative risk-free rates.~~

~~The Credit Agreement~~ requires the Company to maintain certain financial covenants, as defined in the Credit Agreement, including a consolidated fixed charge coverage ratio ~~(as defined in the New Credit Agreement)~~ as of the last day of any fiscal quarter of at least 1.25 to 1.00, and a consolidated leverage ratio ~~(as defined in the New Credit Agreement)~~ as of the last day of any fiscal quarter of no greater than 3.75 to 1.00. The Company was in compliance with all financial covenants as of the quarter ended September ~~25, 2020~~24, 2021.

The Letter of Credit Facility has an initial available commitment of $50.0 million and a maturity date of August 27, 2023. The Company pays quarterly in arrears a fee equal to 2.5% (subject to certain adjustments ~~as per~~to the Term ~~Loans)~~Loan) of the dollar equivalent of all outstanding letters of credit, and a fronting fee equal to 0.125% of the undrawn and unexpired amount of each letter of credit. As of September ~~25, 2020~~24, 2021, the Company had ~~$2.4~~$2.8 million of outstanding letters of credit with beneficiaries such as landlords of certain facility leases, insurance providers and government agencies making up the majority of the outstanding balance. The remaining available commitments are ~~$47.6~~$47.2 million on the Letter of Credit Facility and $65.0 million on the Revolving Credit Facility.

~~The Company’s subsidiary in the Czech Republic, UCT Fluid Delivery Solutions s.r.o., (FDS) has a revolving credit facility which renews annually at the end of the fiscal second quarter. As of~~ ~~September 25, 2020, FDS had an outstanding amount of $0.3 million with an interest rate of 0.8% under the revolving credit facility.~~- 20 -

maturity dates through September 23, 2022 and interest rates ranging from ~~1.9%~~2.0% to ~~4.1%~~4.2%. As of September ~~25, 2020,~~24, 2021, Cinos China had an outstanding ~~amount~~debt of ~~$ 0.3~~$2.5 million with an average interest rate of ~~1.9%~~3.4% under these ~~Credit Agreements.~~credit agreements.

Cinos Korea has ~~Credit Agreements with various banks~~a credit agreement that ~~provide Revolving Credit Facilities~~provides a revolving credit facility for a total available commitment of ~~1.6~~0.6 billion Korean Won ~~(approximately $1.4~~(approximately $0.5 million) with annual renewals beginning ~~from April 2021 through~~ June ~~2021 and~~2022 with an interest ~~rates ranging from 1.4% - 5.4%~~rate of 2.9%. During the nine months ended September 25, 2020, borrowings under ~~these Revolving Facilities~~the revolving credit facility were insignificant and 0 ~~amounts were~~debt was outstanding as of September ~~25, 2020.~~24, 2021.

UCT Fluid Delivery Solutions s.r.o. has a credit agreement with a local bank in the Czech Republic that provides for a revolving credit facility in the aggregate of up to 6.0 million euros. As of September ~~25, 2020~~24, 2021, no debt was outstanding under this revolving credit facility.

Ham-Let has credit facilities and loan agreements with various financial institutions. As of September 24, 2021, Ham-Let had $10.3 million of outstanding debt with interest rates ranging from 1.8% to 4.6%.

As of September 24, 2021, the Company’s total bank debt was ~~$280.1~~$568.3 million, net of unamortized debt issuance costs of ~~$8.3~~$14.4 million. As of September ~~25, 2020~~,24, 2021, the Company had $65.0 million, $9.7 million and ~~$9.3~~$1.0 million available to borrow on its revolving credit facilities in the U.S., Czech Republic and ~~Czech Republic,~~China, respectively.

The fair value of the Company’s ~~long term-debt~~long-term debt was based on Level 2 inputs, and fair value was determined using quoted prices for similar liabilities in inactive markets. The Company’s carrying value approximates fair value for the Company’s long-term debt.

The Company's effective tax rate was ~~16.0%~~19.8% and ~~81.4%~~16.0% for the three months ended September 24, 2021 and September 25, 2020, ~~and September 27, 2019,~~ respectively, and ~~20.6%~~21.8% and ~~80.5%~~20.6% for the nine months ended September ~~25, 2020~~24, 2021 and September ~~27, 2019, respectively.~~25, 2020. The Company’s income tax provision was ~~$4.8~~$8.4 million and ~~$3.9~~$4.8 million for the three months ended September 24, 2021 and September 25, 2020, ~~and September 27, 2019,~~ respectively, and ~~$15.0 million~~$21.6 and ~~$8.2 million~~$15.0 for the nine months ended September ~~25, 2020~~24, 2021 and September ~~27, 2019, respectively.~~25, 2020. The change in respective rates reflects, primarily, changes in the geographic mix of worldwide earnings and financial results in jurisdictions which are taxed at different rates and the impact of losses in jurisdictions with full federal and state valuation allowances.

Company management continuously evaluates the need for a valuation allowance and, as of September ~~25, 2020,~~24, 2021, concluded that a full valuation allowance on its U.S. federal and state deferred tax assets was still appropriate.

The Company provides for U.S. income taxes on the earnings of its foreign subsidiaries to the extent required by the Tax Cuts and Jobs Act (~~TCJA)~~(TCJA). ~~However,~~In a prior period, the Company ~~does not provide~~has also recognized a deferred tax liability for ~~withholding~~ taxes that would be withheld on ~~that~~a distribution of a portion of the undistributed earnings of one of its China subsidiaries. However, the Company has not provided for withholding taxes on the remaining portion of the undistributed earnings of its China subsidiary nor for the undistributed earnings of its other foreign subsidiaries that it intends to reinvest indefinitely outside the U.S. In prior years, the Company determined that a portion of the current year earnings of one of its China subsidiaries may be remitted in the future to one of its foreign subsidiaries outside of China and, accordingly, the Company provided for the related withholding taxes in its Condensed Consolidated Financial Statements. The Company remitted a portion of those earnings during 2019 and may remit the remainder of the earnings on which withholding taxes have already been accrued but does not currently expect to remit any other Chinese earnings. The Company has also historically remitted earnings from its Singapore subsidiary to the U.S. and may do so again in the future. However, the Company has not ~~accrued~~provided for withholding taxes on undistributed Singapore earnings as ~~the country~~Singapore does not currently impose a withholding ~~tax.~~tax on dividends. If the Company changes its intent to reinvest its undistributed foreign earnings indefinitely or if a greater amount of undistributed earnings ~~are~~is needed than the previous anticipated remaining unremitted foreign earnings, the Company could be required to accrue or pay foreign taxes on some or all of these undistributed earnings. As of September ~~25, 2020~~,24, 2021, the Company had undistributed earnings of foreign subsidiaries that are considered indefinitely invested outside of the U.S. of approximately ~~$212.6~~$361.4 million. It is not practicable to determine the tax liability that might be incurred if these earnings were to be distributed.

As of September ~~25, 2020~~24, 2021 and September ~~27, 2019,~~25, 2020, the Company’s gross liability for unrecognized tax benefits, excluding interest, was $1.4 million and $1.0 million, ~~for both periods.~~ respectively. Increases or decreases to interest and penalties on uncertain tax positions are included in the income tax provision in the Condensed Consolidated Statements of Operations.Although it is possible that some of the unrecognized tax benefits could be settled within the next twelve months, the Company cannot reasonably estimate the outcome at this time.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“(the CARES ~~Act”)~~Act) was ~~enacted. The CARES Act includes changes to tax provisions that benefit business entities and makes certain technical corrections~~signed into law in response to the ~~2017 TCJA. Tax relief measures for businesses include modifications to limitations~~U.S. COVID-19 pandemic, which, among other things, suspends the 80.0% limitation on the ~~deductibility of net operating losses (NOLs) such as a five-year carryback of~~deduction for NOLs ~~incurred~~ in ~~tax years beginning in 2018, 2019 or 2020, and removal of the 80% of~~ taxable ~~income limitation on NOL deductions for tax~~ years beginning before January 1, ~~2021. Other tax relief measures include modifications to~~2021, permits a 5-year carryback of NOLs arising in taxable years beginning after December 31, 2017 and before January 1, 2021, and generally caps the ~~limitations~~limitation on the ~~deductibility~~deduction for net interest expense at 50.0% of ~~interest~~adjusted taxable income for ~~tax~~taxable years beginning in 2019 and ~~2020, acceleration~~2020. In addition, the CARES Act raises the corporate charitable deduction limit to 25.0% of ~~alternative minimum tax credit refunds, payroll tax relief,~~taxable income and ~~a technical correction to the TCJA that would provide accelerated depreciation deductions for~~makes qualified improvement ~~property. The CARES Act also provides other non-tax benefits to assist those impacted by the COVID-19 pandemic.~~property generally eligible for 15-year cost-recovery and 100.0% bonus depreciation. The Company has evaluated the impact of the CARES Act and determined that there was 0 significant impact to the income tax provision for the three and nine months ended September ~~25, 2020. The Company also does not expect~~24, 2021.

On December 27, 2020, the U.S. government enacted the Consolidated Appropriations Act, 2021, which enhances and expands certain provisions of the CARES Act. This legislative act is not expected to have a material impact on the Company’s consolidated financial results.

On March 11, 2021, the American Rescue Plan Act of 2021 (“American Rescue Plan”) was signed into law to ~~result~~provide additional relief in connection with the ongoing COVID-19 pandemic. The American Rescue Plan includes, among other things, provisions relating to Paycheck Protection Plan (“PPP”) loan expansion, defined pension contributions, excessive employee remuneration, and the repeal of the election to allocate interest expense on a ~~significant cash benefit. However,~~worldwide basis. The Company does not currently expect that such provisions will have a material impact on the ~~Company continues~~Company’s Condensed Consolidated Financial Statements.

In December 2019, the FASB issued Accounting Standards Update No. 2019-12, “Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes”, as part of its initiative to ~~monitor and evaluate~~reduce complexity in the ~~regulatory and interpretive guidance~~accounting standards. The ASU eliminates certain exceptions from ASC 740 related to the ~~CARES Act~~.approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also clarifies and simplifies other aspects of the accounting for income taxes. The guidance is effective for fiscal years beginning after December 15, 2020 and for interim periods within those fiscal years. The Company adopted ASU 2019-12 on January 1, 2021. The adoption of this standard did not have a material impact on the Company’s Condensed Consolidated Financial Statements.

Cinos Korea has a noncontributory defined benefit pension plan covering substantially all of its employees upon their retirement. The benefits are based on expected years of service and average compensation. The net period costs are recognized as employees render the services necessary to earn the postretirement benefits. The Company records annual amounts relating to the pension plan based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, assumed rates of return, compensation increases and turnover rates. The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current and expected rates of return and trends when it is appropriate to do so. The effect of modifications to those assumptions is recorded in accumulated other comprehensive income and amortized to net periodic cost over future periods using the corridor method. The Company believes that the assumptions utilized in recording its obligations under the plan are reasonable based on its experience and market conditions.

As of September ~~25, 2020~~24, 2021, the benefit obligation of the plan ~~is $8.7~~was $9.7 million and the fair value of the benefit plan assets, which are invested in several fixed deposit accounts with a bank, ~~is $5.1~~was $8.3 million. As of September ~~25, 2020~~24, 2021, the unfunded balance of the plan of ~~$3.6~~$1.4 million has been accrued for by the Company and is included in other long-term liabilities. Amounts recognized in accumulated other comprehensive income as of September ~~25, 2020~~24, 2021 isare $0.5 million. The ~~contributions~~contribution to the plan by the Company and its subsidiaries during the ~~year~~period ended September ~~25, 2020~~24, 2021 was ~~$1.4~~$2.7 million. The benefits expected to be paid from the pension plan in each year from ~~2020-2024~~2021-2025 are ~~$0.2 million, $1.1~~nil, $0.1 million, $2.2 million, $0.9 million and ~~$1.0~~$0.9 million, respectively. The aggregate benefits expected to be paid in the five years from ~~2025-2029~~2026-2031 are ~~$4.6~~$5.5 million.

The Company sponsors a 401(k) savings and retirement plan (the “401(k) Plan”) for all U.S. employees who meet certain eligibility requirements. Participants ~~could~~can elect to contribute to the 401(k) Plan, on a pre-tax basis, up to 25% of their salary to a maximum of ~~$19,500.~~the IRS limit. The Company ~~may make matching contributions~~matches 50.0% of participant salary up to 3%6.0% of employee contributions based upon eligibility. The Company made approximately $0.6 million and ~~$1.9~~$1.8 million discretionary employer contributions to the 401(k) Plan in the three and nine months ended September ~~25, 2020~~24, 2021~~, respectively,~~ and ~~$0.3~~$0.6 million and ~~$0.9~~$1.9 million for the three and nine months ended September ~~27, 2019,~~25, 2020, respectively.

The Company had commitments to various third parties to purchase ~~inventory~~inventories totaling approximately ~~$179.4~~$472.4 million as of September ~~25, 2020.~~24, 2021.

From time to time, the Company is 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 individually or in the aggregate cannot be predicted with certainty, the Company has not had a history of outcomes to date that have been ~~significant~~material to the Condensed Consolidated Statements of Operations and does not believe that any of these proceedings or other claims will have a ~~significant~~material adverse effect on its consolidated financial condition, results of operations or cash flows.

On April 13, 2021, the Company completed an underwritten public offering of 3,181,818 shares of the Company’s common stock, for which the Company received net proceeds of approximately $167.6 million, after deducting the underwriting discounts and offering expenses payable by the Company. On April 29, 2021, the Underwriters exercised the option to purchase an additional 477,272 shares of the Company’s common stock for approximately $25.2 million in cash.

QGT, through its wholly-owned subsidiary in Singapore,owns ~~51.0%~~part of the outstanding shares of Cinos Korea, a South Korean company that provides outsourced cleaning and recycling of precision parts for the semiconductor industry through its operating facilities in South Korea and through ~~a 60.0%~~its partial interest in Cinos China. QGT is obligated to purchase shares held by another shareholder of Cinos Korea representing a 35.0% interest. QGT accounted for this unconditional obligation as an assumed liability and derecognized any noncontrolling interest related to the 35.0%, which brings its controlling interest up to 86.0%.

The carrying value of the remaining ~~14.0%~~ interest held by another shareholder in Cinos Korea and the ~~40.0%~~remaining interest in ~~the~~ Cinos ~~joint venture~~China are presented as noncontrolling interests in the accompanying Condensed Consolidated Financial Statements. The fair values of the noncontrolling interests were estimated based on the values of Cinos Korea and Cinos China on a 100.0% basis. The values were calculated based on the pro-rata portion of total ~~forecasted~~ QGT earnings before interest expense, taxes, depreciation and amortization ~~("EBITDA")~~ contributed by each entity.

~~The~~On July 24, 2021, the Company ~~is obligated to purchase shares owned by a~~entered into an amendment with Cinos Korea ~~shareholder. A certain number~~and a shareholder of ~~shares would be purchased at a fixed price per share, while~~Cinos Korea to eliminate the ~~other remaining shares would be purchased based on the greater of the then fair value of the stock~~

~~and the fixed price per share (floor). The Company has a firm~~ obligation to purchase certain shares of the ~~shares and~~common stock owned by the shareholder. As a ~~call option, while~~result, the ~~other shareholder has a put option. As~~carrying amount of ~~September 25, 2020, the~~noncontrolling interest in Cinos Korea was increased by 35.0%. The fair value of the obligation is $8.2 million which has been recorded as a non-current liability in the accompanying consolidated balance sheets and represents a Level 3 measurement as discussed in Note 4 of the Company’s Consolidated Financial Statements. The agreement with Cinos Korea allows for the common stock purchase obligation of $16.4 million was reclassified to ~~become due~~noncontrolling interest in ~~December 2022, and once completed,~~ the ~~Company will own~~ ~~86.0~~%third quarter of ~~Cinos Korea~~.fiscal 2021.

The Company grants stock awards in the form of ~~restricted stock units (RSUs)~~RSUs and ~~performance stock units (PSUs)~~PSUs to its employees as part of the Company’s ~~long term~~long-term equity compensation plan. These stock awards are granted to employees with a unit purchase price of 0 dollars and typically vest over three years, subject to the employee’s continued service with the Company and, in the case of PSUs, subject to achieving certain performance goals. The Company also grants common stock to its board members in the form of ~~restricted share awards (RSAs),~~RSAs, which vest on the earlier of 1) the next Annual Shareholder Meeting, or 2) 365 days from date of grant.

Stock-based compensation expense includes compensation costs related to estimated fair values of awards granted. The estimated fair value of the Company’s equity-based awards, net of expected forfeitures, is amortized on a straight-line basis over the awards’ vesting period and is adjusted for subsequent changes in estimated forfeitures related to all equity-based awards and performance as it relates to PSUs.

The following table shows the Company’s stock-based compensation expense included in the Condensed Consolidated Statements of Operations:

	Three Months Ended						Nine Months Ended						Three Months Ended						Nine Months Ended
	September 25,			September 27,			September 25,			September 27,			September 24,			September 25,			September 24,			September 25,
(In millions)	2020			2019			2020			2019			2021			2020			2021			2020
Cost of revenues (1)	$	0.4		$	0.6		$	1.4		$	1.8		$	0.5		$	0.4		$	1.4		$	1.4
Research and development		-			0.1			0.1			0.3			0.1		—				0.2			0.1
Sales and marketing		0.3			0.3			0.9			0.9			0.3			0.3			1.0			0.9
General and administrative		2.6			2.3			7.1			6.1			3.4			2.6			8.9			7.1
		3.3			3.3			9.5			9.1			4.3			3.3			11.5			9.5
Income tax benefit		(0.5	)		(2.7	)		(1.9	)		(7.3	)		(0.9	)		(0.5	)		(2.5	)		(1.9	)
Stock-based compensation expense, net of tax	$	2.8		$	0.6		$	7.6		$	1.8		$	3.4		$	2.8		$	9.0		$	7.6

For purposes of determining compensation expense related to ~~these~~ RSUs and PSUs, the fair value is determined based on the closing market price of the Company’s common stock on the date of award.

~~There were 21.2 thousand RSUs granted during the quarter ended September 25, 2020, with a weighted average fair value of $22.39 per share.~~ For the nine months ended September 25, 2020, ~~0.8~~0.4 million RSUs were granted with a weighted average fair value of ~~$18.32~~$49.12 per share.

For the nine months ended September 25, 2020, 0.1 million vested shares were withheld to satisfy withholding tax obligations, resulting in the net issuance of 0.6 million shares.

As of September ~~25, 2020,~~24, 2021, approximately ~~$18.4~~$23.8 million of stock-based compensation cost, net of estimated forfeitures, related to RSUs and PSUs remains to be amortized over a weighted average period of ~~1.9~~1.6 years. As of September ~~25, 2020,~~24, 2021, a total of ~~1.7~~1.3 million RSUs and PSUs remain outstanding with an aggregate intrinsic value of ~~$35.9~~$59.9 million and a weighted average remaining contractual term of ~~1.3 year.~~1.2 year.

As of September ~~25, 2020,~~24, 2021, a total of ~~44,107~~18,893 shares of RSAs were outstanding. The total unamortized expense of the Company’s unvested restricted stock awards as of September ~~25, 2020~~24, 2021 was $0.6 million.

The following table summarizes the Company’s combined RSU, PSU and RSA activity for the nine months ended September ~~25, 2020:~~24, 2021:

The ESPP permits employees to purchase common stock at a discount through payroll withholdings at certain specified dates (purchase period) within a defined offering period. The purchase price is 85% of the fair market value of the common stock at the end of the purchase period and is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. During the nine month period ended September 24, 2021, 7,464 shares were issued under the ESPP. The Company recorded $0.1 million of expense related to ESPP for the three and nine months ended September 24, 2021.

Revenue is recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

The Company sells its products and services primarily to customers in the semiconductor capital equipment industry. The Company’s revenues are highly concentrated, and we are therefore highly dependent upon a small number of customers. Typical payment terms with our customers range from thirty to sixty days.

The Company’s ~~SPS segment~~Products division provides warranty on its products for a period of up to two years and provides for warranty costs at the time of sale based on historical activity. Determination of the warranty reserve requires the Company to make estimates of product return rates and expected costs to repair or replace the products under warranty. If actual return rates and/or repair and replacement costs differ significantly from these estimates, adjustments to recognize additional cost of revenues may be required in future periods. The warranty reserve is included in other current liabilities on the Condensed Consolidated Balance Sheets and is not considered significant.

The Company’s products are manufactured and services provided at ~~our~~ facilities inthroughout the ~~U.S.A., China, Singapore~~Americas, Asia Pacific and EMEA (“Europe and the ~~Czech Republic. The Company provides services from operations in the U.S.A., Singapore, United Kingdom, Israel, Taiwan, South Korea, and China.~~Middle East”). Sales to customers are initiated through a purchase order and are governed by our standard terms and conditions, written agreements, or both. Revenue is recognized when performance obligations under the terms of an agreement with a customer are satisfied; generally, this occurs with the transfer of control of the products or when the Company provides the services. Transfer of control occurs at a specific point-in-time. Based on the enforceable rights included in our agreements or prevailing terms and conditions, products produced by the Company without an alternative use are not protected by an enforceable right of payment that includes a reasonable profit throughout the duration of the agreement. Consignment sales are recognized in revenue at the earlier of the period that the goods are consumed or after a period of time subsequent to receipt by the customer as specified by terms of the agreement, provided control of the promised goods or services has transferred.

Revenue is measured as the amount of consideration we expect to receive in exchange for transferring ~~goods~~Products or providing services. Sales, value-add, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. Certain of our customers may receive cash-based incentives, such as rebates or credits, which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. As of September 24, 2021 and December 25, 2020,, an accrual for unpaid customer rebates of ~~$2.4~~$3.8 million for both periods was included in ~~accrued expenses~~accounts receivable on the Company’s Condensed Consolidated Balance Sheet. The Company's disaggregated revenues are by ~~segment.~~segments within the Company’s Condensed Consolidated Statement of Operations.

The Company’s principal markets include America, Asia Pacific and ~~Europe. The Company’s foreign operations are conducted primarily through its subsidiaries in China, Singapore, Israel, Taiwan, South Korea, the United Kingdom and the Czech Republic.~~EMEA. Revenues by geographic area are categorized based on the customer’s location to which the products were shipped or where the services were performed. The following table sets forth revenue by geographic area (in millions):

	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
	September 25,		September 27,		September 25,		September 27,		September 24,		September 25,		September 24,		September 25,
	2020		2019		2020		2019		2021		2020		2021		2020
United States	$	155.6	$	136.1	$	453.3	$	406.4	$	182.3	$	155.6	$	542.2	$	453.3
Singapore		132.2		68.1		364.0		212.3		201.8		132.2		537.6		364.0
South Korea		21.1		15.6		62.7		51.7		43.5		21.1		106.8		62.7
China										26.4		12.6		67.8		33.7
Taiwan		18.3		11.5		48.5		31.1		23.7		18.3		67.0		48.5
Austria		14.7		9.7		42.2		34.2		28.6		14.7		67.9		42.2
China		12.6		7.7		33.7		28.1
Israel										5.8		4.2		15.2		12.2
Other		8.8		5.6		24.6		16.0		41.6		4.6		82.0		12.4
	$	363.3	$	254.3	$	1,029.0	$	779.8	$	553.7	$	363.3	$	1,486.5	$	1,029.0

The Company leases offices, facilities and equipment in locations throughout the ~~United States,~~Americas, Asia Pacific and ~~Europe.~~EMEA.

The Company’s leases do not provide an implicit rate, thus the Company uses an estimated incremental borrowing rate in determining the present value of lease payments.

	Three Months Ended				Nine Months Ended						Three Months Ended				Nine Months Ended
	September 25,		September 27,		September 25,			September 27,			September 24,		September 25,		September 24,			September 25,
(Dollars in millions)	2020		2019		2020			2019			2021		2020		2021			2020
Operating lease cost	$	3.3	$	3.7	$	9.9		$	10.4		$	4.9	$	3.3	$	13.4		$	9.9
Short-term lease cost		0.3		0.5		1.0			1.1			0.5		0.3		1.4			1.0
Total lease cost	$	3.6	$	4.2	$	10.9		$	11.5		$	5.4	$	3.6	$	14.8		$	10.9

Operating cash flows from operating leases	$	3.9	$	3.5	$	12.7		$	10.6		$	5.3	$	3.9	$	14.5		$	12.7
Weighted-average remaining lease term – operating leases						2.0			2.4							1.8			2.0
Weighted-average discount rate – operating leases						5.5	%		7.0	%						5.1	%		5.5	%

Future minimum payments under operating leases as of September ~~25, 2020~~24, 2021 were summarized as follows:

(In millions)	Operating Leases		Operating Leases
2020 remaining	$	3.7
2021		12.4
2021 remaining			$	5.3
2022		10.2		20.4
2023		7.3		17.3
2024		5.0		13.7
2025				10.9
Thereafter		9.2		34.6
Total minimum lease payments		47.8		102.2
Less: imputed interest		4.5		14.5
Lease liability	$	43.3	$	87.7

The Company assumed $23.8 million of facility leases as part of the acquisition of Ham-Let. The Company also entered into a new lease agreement in Malaysia commencing in the third quarter of 2021.

The following is a reconciliation of the numerators and denominators used in computing basic and diluted net income ~~(loss)~~ per share:

	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
	September 25,		September 27,		September 25,		September 27,		September 24,		September 25,		September 24,		September 25,
(In millions, except share amounts)	2020		2019		2020		2019		2021		2020		2021		2020
Numerator:
Net income attributable to UCT	$	24.4	$	0.5	$	55.1	$	0.9	$	31.9	$	24.4	$	74.0	$	55.1
Denominator:
Shares used in computation — basic:
Weighted average common shares outstanding		40.4		39.5		40.1		39.4		44.8		40.4		42.8		40.1
Shares used in computation — diluted:
Weighted average common shares outstanding		40.4		39.5		40.1		39.4		44.8		40.4		42.8		40.1
Dilutive effect of common shares outstanding subject to repurchase		0.7		0.5		0.8		0.3		0.6		0.7		0.9		0.8
Shares used in computing diluted net income per share		41.1		40.0		40.9		39.7		45.4		41.1		43.7		40.9
Net income per share attributable to UCT — basic	$	0.60	$	0.01	$	1.37	$	0.02	$	0.71	$	0.60	$	1.73	$	1.37
Net income per share attributable to UCT — diluted	$	0.59	$	0.01	$	1.35	$	0.02	$	0.70	$	0.59	$	1.69	$	1.35

The Company operates and reports financial results for 2 operating segments: ~~SPS~~Products and ~~SSB.~~Services. These segments are organized primarily by the nature of the products and service they provide. The Company’s Chief Executive Officer (chief operating decision maker) views and evaluates operations based on the results of each of the reportable segments. The following table describes each segment:

The Company uses segment profit or loss as the primary measure of profitability to evaluate operating performance and to allocate capital resources. Segment profit or loss is defined as a segment’s income or loss from continuing operations before other income and income taxes included in the accompanying condensed consolidated statements of operations.

Any intercompany sales and associated profit (and any other intercompany items) are eliminated from segment results. There were no significant intercompany eliminations for the periods presented.

	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
	September 25,		September 27,		September 25,		September 27,		September 24,		September 25,		September 24,		September 25,
	2020		2019		2020		2019		2021		2020		2021		2020
Revenues:
SPS	$	294.4	$	200.0	$	831.7	$	610.6
SSB		68.9		54.3		197.3		169.2
Products									$	482.0	$	294.4	$	1,270.1	$	831.7
Services										71.7		68.9		216.4		197.3
Total segment revenues	$	363.3	$	254.3	$	1,029.0	$	779.8	$	553.7	$	363.3	$	1,486.5	$	1,029.0

Gross profit:
SPS	$	50.8	$	29.9	$	144.1	$	84.9
SSB		23.8		17.6		70.1		55.6
Products									$	88.6	$	50.8	$	225.2	$	144.1
Services										25.5		23.8		75.7		70.1
Total segment gross profit	$	74.6	$	47.5	$	214.2	$	140.5	$	114.1	$	74.6	$	300.9	$	214.2

Operating profit:
SPS	$	27.4	$	7.4	$	72.0	$	18.1
SSB		7.5		0.9		16.3		7.4
Products									$	43.8	$	27.4	$	102.0	$	72.0
Services										6.8		7.5		20.9		16.3
Consolidated income from operations	$	34.9	$	8.3	$	88.3	$	25.5	$	50.6	$	34.9	$	122.9	$	88.3

					September 25,		December 27,						September 24,		December 25,
					2020		2019						2021		2020
Assets
SPS					$	831.4	$	828.0
SSB						228.9		191.3
Products													$	1,662.1	$	868.4
Services														261.9		234.1
Total segment assets					$	1,060.3	$	1,019.3					$	1,924.0	$	1,102.5

As of September ~~25, 2020,~~24, 2021, approximately ~~$83.8~~$119.7 million and ~~$8.2~~$47.1 million of the Company’s net long-lived assets were located in Asia Pacific and ~~Europe,~~EMEA, respectively, and the remaining balances were located in the United States. At December ~~27, 2019,~~25, 2020, approximately ~~$81.4~~$90.4 million and ~~$3.3~~$9.4 million of the Company’s net long-lived assets were located in Asia and Europe, respectively, and the remaining balances were located in the United States.

From April through September of the current year, the Singapore government announced a series of relief measures for wages paid to local employees with the purpose of supporting employers during this period of economic uncertainty related to the COVID-19 pandemic, including the co-funding of wages incurred by local employers for nine months ending December 31, 2020. The Company

estimated that the total amount of these subsidies will be $3.2 million of which $ 1.1 million and $1.8 million was recorded during the three and nine months ended September 25, 2020, respectively, as an offset to cost of revenues.

The Company also received unconditional subsidies of $0.6 million from the China government during the nine months ended September 25, 2020. These subsidies were recognized as other income in the condensed consolidated statements of operations. In addition, the China government reduced the cost of certain social insurance requirements and also subsidized rent which benefited the Company by $0.4 million and $1.1 million during the three and nine months ended September 25, 2020, respectively. These subsidies were recorded as an offset to cost of revenues and other operating expenses

You should read the following discussion of our financial condition and results of operations in conjunction with the Condensed Consolidated Financial Statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K filed with the SEC on ~~March 11, 2020.~~February 23, 2021. This Quarterly Report on Form 10-Q contains “forward-looking statements” that involve substantial risks and uncertainties. The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, statements regarding our expectations, beliefs, intentions, strategies, future operations, future financial position, future revenue, projected expenses, gross margins and plans and objectives of management. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “will,” “would,” “should,” “could,” “can,” “predict,” “potential,” “continue,” “objective,” or the negative of these terms, and similar expressions intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words. These forward-looking statements reflect our current views about future events and involve known risks, uncertainties and other factors that may cause our actual results, performance or achievement to be materially different from those expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K filed with the SEC on ~~March 11, 2020.~~February 23, 2021, as updated in our Current Report on Form 8-K filed with the SEC on April 5, 2021. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Ultra Clean Holdings, Inc., (“UCT”, the “Company” or “We”) is a leading developer and supplier of critical subsystems, components and parts, and ultra-high purity cleaning and analytical services primarily for the semiconductor industry. UCT offers its customers an integrated outsourced solution for major subassemblies, improved design-to-delivery cycle times, design for manufacturability, prototyping and part and component manufacturing, as well as tool chamber parts cleaning and coating, and micro-contamination analytical services. We operate and report ~~our~~ results for two operating segments: ~~Semiconductor~~ Products and ~~Solutions (“SPS”)~~Services (formerly known as “SPS” and ~~Semiconductor Services Business (“SSB”)~~“SSB”, respectively). Our ~~SPS~~Products business primarily designs, engineers and manufactures production tools, components and parts, and modules and subsystems for the semiconductor and display capital equipment markets. ~~SPS products~~Products include chemical delivery modules, frame assemblies, gas delivery systems, fluid delivery systems, precision robotics, process modules as well as other high-level assemblies. Our ~~SSB~~Services business provides ultra-high purity ~~outsourced~~ parts cleaning, process tool part recoating, surface encapsulation and high sensitivity micro contamination analysis primarily for the semiconductor device makers and wafer fabrication equipment (WFE) ~~equipment~~ markets.

We ~~ship~~sell a majority of our products and provide most of our services to U.S. registered customers with locations both in and outside the U.S. In addition to U.S. manufacturing and service operations, we manufacture products and provide parts cleaning and other related services in our Asian and European facilities to support local and U.S. based customers. We conduct our operating activities primarily through our subsidiaries, Ultra Clean Technology Systems and Service, Inc., American Integration Technologies, LLC, Ultra Clean Micro-Electronics Equipment (Shanghai) Co., Ltd., Ultra Clean Asia Pacific, Pte, Ltd., UCT Thermal Solutions, Inc., UCT Fluid Delivery Solutions s.r.o. (FDS), Quantum Global Technologies, LLC (“QGT”) and Dynamic Manufacturing Solutions, LLC ("DMS").subsidiaries.

Over the long-term, we believe the semiconductor market we serve will continue to grow due to multi-year industry ~~inflections creating~~ demand from a broad range of drivers including mobile demand driven by 5G, new CPU architectures which are enabling higher performance servers, and cloud, AI and ~~machine learnings.~~Machine Learning. We also believe that semiconductor original equipment ~~OEMs~~manufacturers (“OEM”) are increasingly relying on partners like UCT to fulfill their expanding capacity requirements. Additionally, our Services division is benefiting as device manufacturers rely on precision cleaning, coating and analytics to advance ever more complex devices.

~~Impact~~On March 31, 2021, we completed the acquisition of ~~COVID-19 on Our Business~~

~~We are subject to risks and uncertainties as~~Ham-Let (Israel-Canada) Ltd. (“Ham-Let”), a ~~result~~public company organized under the laws of the ~~COVID-19 pandemic.~~ ~~Our financial results~~State of Israel (not a U.S. registrant), pursuant to an Agreement and Plan of Merger (the “Merger Agreement”), for approximately $362.9 million, which included $273.5 million of equity value plus $91.3 million of net debt offset by the settlement of existing relationship of $1.9 million. Ham-Let engages in the development, manufacturing and marketing of innovative control valves, fittings, and hoses for the ~~three months ended September 25, 2020 represent~~control and monitoring of industrial systems in a variety of markets, including the Semiconductor market. These products are primarily used in ultra clean gas transportation systems for the transmission of liquids and gases. The Company’s primary reason for this acquisition was to broaden UCT’s relevance to the semiconductor equipment market and to provide access to a new set of customers in the semiconductor fab infrastructure market.

On April 13, 2021, we completed an underwritten public offering of 3,181,818 shares of our ~~second full quarter~~common stock, in which we received net proceeds of ~~operations during~~approximately $167.6 million, after deducting the ~~COVID-19 pandemic.~~ ~~The extent~~underwriting discounts and offering expenses. On April 29, 2021, the Underwriters exercised the option to purchase an additional 477,272 shares of our common stock for approximately $25.2 million in cash. We intend to use the net proceeds from this offering for general corporate purposes, which may include working capital, sales and marketing activities, product development, general and administrative matters, and capital expenditures. We may use a portion of the ~~impact of the COVID-19 pandemic on the Company's business is highly uncertain and difficult~~net proceeds to predict, as the response to the pandemic is ongoing and information is constantly evolving. Furthermore, the negative impact of the COVID-19 pandemic on economies worldwide has been and continues to be severe.acquire complementary businesses, products, services, or technologies, although we have no agreements, commitments, or plans for any specific acquisitions at this time.

The severity of the impact of the COVID-19 pandemic on our business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic and the extent and severity of the impact on our customers, all of which are uncertain and cannot be predicted. Our future results of operations and liquidity could be adversely impacted by delays in payments of outstanding receivable amounts beyond normal payment terms, supply chain disruptions and uncertain demand, and the impact of any initiatives or programs that we may undertake to address financial and operations challenges faced by our customers. As of the date of issuance of these condensed consolidated financial statements, the extent to which the COVID-19 pandemic may materially impact our financial condition, liquidity, or results of operations is uncertain. We will continue to actively monitor the situation and take further actions that may alter our business operations as may be required by federal, state or local authorities or if we determine are in the best interests of our employees, customers, suppliers and shareholders. While we are unable to determine or predict the nature, duration or scope of the overall impact the COVID-19 pandemic will have on our business, results of operations, liquidity or capital resources, we believe that it is important to share where our company stands today, how our response to COVID-19 is progressing and how our operations and financial condition may change as the fight against COVID-19 progresses. For additional details, see the discussion in the Risk Factors section.

Our Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States, which require us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosure at the date of our Condensed Consolidated Financial Statements. ~~From time to time,~~On an on-going basis, we evaluate our estimates and judgments, including those related to ~~sales,~~ inventories, income taxes, business combinations and goodwill, ~~and~~ intangible assets ~~stock compensation~~ and ~~income taxes.~~long-lived assets. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances, the results of which form the basis of our judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. We consider certain accounting policies related to inventory valuation, accounting for income taxes, business combinations, valuation of goodwill, intangible assets and ~~goodwill, accounting for pension obligations and equity incentives to employees~~long-lived assets to be critical policies due to the estimates and judgments involved in each.

There have been no significant changes to our critical accounting policies, significant judgments and estimates disclosed in our Annual Report on Form 10-K subsequent to December ~~27, 2019.~~25, 2020. For further information on our critical and other significant accounting policies and estimates, see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December ~~27, 2019,~~25, 2020, as filed with the SEC.

Our fiscal year is the 52- or 53-week period ending on the Friday nearest December 31. Fiscal year ~~2020~~2021 is the ~~52-week~~53-week period ending December ~~25, 2020,~~31, 2021, and fiscal year ~~2019~~2020 was the 52-week period ended December ~~27, 2019.~~25, 2020. The fiscal quarters ended September ~~25, 2020~~24, 2021 and September ~~27, 2019~~25, 2020 were both 13-week periods.

Discussion of Results of Operations for the Three and Nine months ended September ~~25, 2020~~24, 2021 Compared to the Three and Nine ~~Months Ended~~months ended September ~~27, 2019~~25, 2020

The results of operations for the Company for the nine months ended September 24, 2021 include operating activities for Ham-Let since its acquisition date of March 31, 2021.

Three Months Ended

Nine Months Ended

Revenues by Segment
September 25,

September 27,

Percent

September 25,

September 27,

Percent

(Dollars in millions)
2020

2019

Change

2020

2019

Change

SPS
$
294.4

$
200.0

47.2
%

$
831.7

$
610.6

36.2
%
SSB

68.9

54.3

26.9
%

197.3

169.2

16.6
%
Total Revenues
$
363.3

$
254.3

42.9
%

$
1,029.0

$
780

32.0
%
SPS as a percentage of total revenues

81.0
%

78.6
%

80.8
%

78.3
%

SSB as a percentage of total revenues

19.0
%

21.4
%

19.2
%

21.7
%

	Three Months Ended									Nine Months Ended
Revenues by Segment	September 24,			September 25,			Percent			September 24,			September 25,			Percent
(Dollars in millions)	2021			2020			Change			2021			2020			Change
Products	$	482.0		$	294.4			63.7	%	$	1,270.1		$	831.7			52.7	%
Services		71.7			68.9			4.1	%		216.4			197.3			9.7	%
Total Revenues	$	553.7		$	363.3			52.4	%	$	1,486.5		$	1,029.0			44.5	%
Products as a percentage of total revenues		87.1	%		81.0	%					85.4	%		80.8	%
Services as a percentage of total revenues		12.9	%		19.0	%					14.6	%		19.2	%

Total ~~SPS~~Products revenues increased in the three and nine months ended September ~~25, 2020,~~24, 2021, compared to the same periods in the prior year, primarily due to an increase in customer demand in the semiconductor industry, in particular, the wafer fabrication equipment ~~industry.~~industry and in part due to the inclusion of Ham-Let. Ham-Let contributed $64.4 million and $122.6 million of revenues for the three and nine month periods ended September 24, 2021. Total ~~SSB~~Services revenues increased in the three and nine months ended September ~~25, 2020,~~24, 2021, compared to the same ~~periods~~period in the prior year, primarily due to increases in demand across ~~its~~our customer base.

	Three Months Ended									Nine Months Ended									Three Months Ended									Nine Months Ended
Revenues by Geography	September 25,			September 27,			Percent			September 25,			September 27,			Percent			September 24,			September 25,			Percent			September 24,			September 25,			Percent
(Dollars in millions)	2020			2019			Change			2020			2019			Change			2021			2020			Change			2021			2020			Change
United States	$	152.5		$	119.1			28.0	%	$	436.0		$	376.4			15.8	%	$	167.9		$	152.5			10.1	%	$	475.6		$	436.0			9.1	%
International		210.8			135.2			55.9	%		593.0			403.4			47.0	%		385.8			210.8			83.0	%		1,010.9			593.0			70.5	%
Total Revenues	$	363.3		$	254.3			42.9	%	$	1,029.0		$	779.8			32.0	%	$	553.7		$	363.3			52.4	%	$	1,486.5		$	1,029.0			44.5	%
Unites States as a percentage of total revenues		42.0	%		46.8	%					42.4	%		48.3	%
United States as a percentage of total revenues																				30.3	%		42.0	%					32.0	%		42.4	%
International as a percentage of total revenues		58.0	%		53.2	%					57.6	%		51.7	%					69.7	%		58.0	%					68.0	%		57.6	%

On a geographic basis, revenues represent products shipped from or services performed at our U.S. and international locations. For the three and nine months ended September ~~25, 2020,~~24, 2021, both U.S. and international revenues increased ~~driven by 2 factors. The first of these was~~due to an overall global increase in semiconductor industry demand in the U.S. The second factor relates to the April, 2019 acquisition of DMS, whose customers are primarily U.S. based. For the three and nine months ended September 25, 2020, international revenue increased in absolute terms and as a percentage of total revenue, primarily due to the overall higher semiconductor and semiconductor capital equipment ~~demand outside of the U.S..~~and general industry demand.

Three Months Ended

Nine Months Ended

Cost of Revenues by Segment
September 25,

September 27,

Percent

September 25,

September 27,

Percent

(Dollars in millions)
2020

2019

Change

2020

2019

Change

SPS
$
243.6

$
170.1

43.2
%

$
687.6

$
525.7

30.8
%
SSB

45.1

36.7

22.9
%

127.2

113.6

12.0
%
Total Cost of Revenues
$
288.7

$
206.8

39.6
%

$
814.8

$
639.3

27.5
%
SPS as a percentage of total SPS revenues

82.7
%

85.1
%

82.7
%

86.1
%

SSB as a percentage of total SSB revenues

65.5
%

67.6
%

64.5
%

67.1
%

	Three Months Ended									Nine Months Ended
Cost of Revenues by Segment	September 24,			September 25,			Percent			September 24,			September 25,			Percent
(Dollars in millions)	2021			2020			Change			2021			2020			Change
Products	$	393.4		$	243.6			61.5	%	$	1,044.9		$	687.6			52.0	%
Services		46.2			45.1			2.4	%		140.7			127.2			10.6	%
Total Cost of Revenues	$	439.6		$	288.7			52.3	%	$	1,185.6		$	814.8			45.5	%
Products as a percentage of total Products revenues		81.6	%		82.7	%					82.3	%		82.7	%
Services as a percentage of total Services revenues		64.4	%		65.5	%					65.0	%		64.5	%

Total cost of revenues increased ~~$81.9~~$150.9 million and ~~$175.5 million~~$370.8 for the three and nine months ended September ~~25, 2020, respectively,~~24, 2021 due to higher demand for both ~~SPS products~~Products and ~~SSB services.~~Services and in part by the inclusion of Ham-Let operations.

~~SPS cost~~Cost of Products revenues consists of purchased materials, direct labor and manufacturing overhead. ~~SPS cost~~Cost of Products revenues increased ~~$73.5~~$149.8 million for the three months ended September ~~25, 2020~~ 24, 2021 compared to the same period in the prior year, due to the inclusion of Ham-Let, higher volume of sales driving increased material costs of $115.0 million (including $2.4 million of materials costs resulting from the step-up in value of Ham-Let’s inventories at the acquisition/valuation date that were sold through during the quarter ended September 24, 2021 and $0.7 million of inventory written off related to end of life products). Also contributing to the increase in Cost of Product revenues, were higher direct labor spending of $21.6 million and higher overhead costs of $13.2 million (including $0.7 million of intangible amortization resulting from the acquisition of Ham-Let). Cost of Products increased $357.3 million for the nine months ended September 24, 2021 compared to the same period in the prior year, due to higher volume of sales driving increased material costs of ~~$64.7~~$284.4 million(including $9.6 million of materials costs resulting from the step-up in value of Ham-Let’s inventories at the acquisition/valuation date that were sold through during September 24, 2021 and $0.7 million of inventory written off related to end of life products). Also contributing to the increase in Cost of Product revenues were, higher direct labor spending of ~~$1.0~~$44.5 million and higher overhead costs of ~~$7.8 million. SPS cost~~$28.4 million (including $1.4 million of ~~revenues increased $161.9 million for~~intangible amortization resulting from the ~~nine months ended September 25, 2020 compared to the same period in the prior year, due to higher volume~~acquisition of ~~sales driving increased material costs of $151.5 million, higher direct labor spending of $6.4 million and higher overhead costs of $4.0 million.~~Ham-Let).

~~SSB cost~~Cost of Services revenues consists of direct labor, manufacturing overhead and materials (such as chemicals, gases and consumables). ~~SSB cost~~Cost of Services revenues increased ~~$8.4~~$1.1 million infor the three months ended September ~~25, 2020~~24, 2021 compared to the same period in the prior year driven by higher volumes of service orders, resulting in an increase in labor costs of ~~$4.4~~$0.5 million (the largest component of ~~SSB’s total cost~~Cost of ~~revenues),~~Services) and higher material costs of ~~$3.3~~$0.8 million ~~and higher~~offset by $0.2 million decrease in overhead ~~costs~~costs. Cost of ~~$0.7 million driven by higher service orders. SSB cost of revenues~~Services increased ~~$13.6~~$13.5 million for the nine months ended September ~~25, 2020~~24, 2021 compared to the same period in the prior year ~~driven by higher volumes of service orders, resulting in increases~~due to an increase in labor costs of ~~$6.8~~$4.9 million, ~~and~~ higher material costs of ~~$4.7~~$3.4 million and higher ~~depreciation expense~~overhead costs of ~~$2.2~~$5.2 million ~~as a result of an increase in capital assets.~~driven by higher service orders.

	Three Months Ended									Nine Months Ended									Three Months Ended									Nine Months Ended
Gross Profit by Segment	September 25,			September 27,			Percent			September 25,			September 27,			Percent			September 24,			September 25,			Percent			September 24,			September 25,			Percent
(Dollars in millions)	2020			2019			Change			2020			2019			Change			2021			2020			Change			2021			2020			Change
SPS	$	50.8		$	29.9			69.9	%	$	144.1		$	84.9			69.7	%
SSB		23.8			17.6			35.2	%		70.1			55.6			26.1	%
Products																			$	88.6		$	50.8			74.4	%	$	225.2		$	144.1			56.3	%
Services																				25.5			23.8			7.1	%		75.7			70.1			8.0	%
Gross profit	$	74.6		$	47.5			57.1	%	$	214.2		$	140.5			52.5	%	$	114.1		$	74.6			52.9	%	$	300.9		$	214.2			40.5	%
Gross Margin by Segment
SPS		17.3	%		15.0	%					17.3	%		13.9	%
SSB		34.5	%		32.4	%					35.5	%		32.9	%
Products																				18.4	%		17.3	%					17.7	%		17.3	%
Services																				35.6	%		34.5	%					35.0	%		35.5	%
Total Company		20.5	%		18.7	%					20.8	%		18.0	%					20.6	%		20.5	%					20.2	%		20.8	%

~~SPS~~Products gross margin increased in the three and nine months ended September ~~25, 2020,~~24, 2021, compared to the same period in the prior year, due to higher volume and favorable mix of higher margin products. Services gross margin increased in the three months ended September 24, 2021 compared to the same period in the prior year, due to more fully leveraging our infrastructure costs via volume.

Research and development expenses increased $3.0 million and $6.1 million in the three and nine months ended September 24, 2021 compared to the same periods in the prior year, ~~due~~ primarily ~~to higher volume, and the mix of higher margin products. SSB gross margin increased in the three and nine months ended September 25, 2020, compared~~due to the ~~same periods in the prior year, due to direct labor efficiencies along with lower facility-related costs.~~

~~Research~~inclusion of Ham-Let’s research and development activities and to an increase in personnel-related expenses ~~remained consistent for the three and nine months ended September 25, 2020, compared to the same periods~~associated with an increase in ~~the prior year.~~headcount.

	Three Months Ended									Nine Months Ended									Three Months Ended									Nine Months Ended
	September 25,			September 27,			Percent			September 25,			September 27,			Percent			September 24,			September 25,			Percent			September 24,			September 25,			Percent
(Dollars in millions)	2020			2019			Change			2020			2019			Change			2021			2020			Change			2021			2020			Change
Sales and marketing	$	6.0		$	5.9			1.7	%	$	17.7		$	16.7			6.0	%	$	13.8		$	6.0			130.0	%	$	34.1		$	17.7			92.7	%
Sales and marketing as a percentage of total revenues		1.7	%		2.3	%					1.7	%		2.1	%					2.5	%		1.7	%					2.3	%		1.7	%

Sales and marketing expenses ~~remained consistent for~~increased $7.8 million in the three months ended September ~~25, 2020, compared to the same period in the prior year. Sales and marketing expensesincreased $1.0 million in the nine months ended September 25, 2020,~~24, 2021 compared to the same period in the prior year primarily due to anthe inclusion of Ham-Let’s sales and marketing activities, $2.1 million increase in personnel-related ~~costs as well as~~expenses driven by higher headcount, bonuses and severance. Sales and marketing expenses increased $16.4 million in the ~~inclusion of DMS’ sales and marketing expenses for the full~~ nine months ended September ~~25, 2020.~~24, 2021 with the comparable period in the prior year due to the inclusion of Ham-Let’s sales and marketing activities and an increase of $4.8 million in personnel-related expenses driven by higher headcount, bonuses and severance.

	Three Months Ended									Nine Months Ended									Three Months Ended									Nine Months Ended
	September 25,			September 27,			Percent			September 25,			September 27,			Percent			September 24,			September 25,			Percent			September 24,			September 25,			Percent
(Dollars in millions)	2020			2019			Change			2020			2019			Change			2021			2020			Change			2021			2020			Change
General and administrative	$	30.2		$	29.7			1.7	%	$	97.5		$	87.4			11.6	%	$	43.2		$	30.2			43.0	%	$	127.1		$	97.5			30.4	%
General and administrative as a percentage of total revenues		8.3	%		11.7	%					9.5	%		11.2	%					7.8	%		8.3	%					8.6	%		9.5	%

General and administrative expenses increased ~~$0.5~~$13.0 million in the three months ended September ~~25, 2020, compared to the same period in the prior year, due to higher personnel-related expenses primarily due to increases in headcount.~~ ~~General~~ ~~and administrative expensesincreased $10.1 million in the nine months ended September 25, 2020,~~24, 2021, compared to the same period in the prior year, due to the inclusion of ~~DMS’~~Ham-Let’s general and administrative activities, $2.2 million increase in personnel-related expenses ~~for~~driven by higher headcount and bonuses and $0.9 million increase in outside accounting-related services. General and administrative expensesincreased $29.6 million in the ~~full~~ nine months ended September ~~25, 2020, an increase~~24, 2021, compared to the same period in ~~certain professional fees, higher personnel-related expenses primarily~~the prior year, due to ~~increases in headcount~~the inclusion of Ham-Let’s general and ~~higher bonuses, and restructuring~~

administrative activities, $9.2 million of expenses related to the ~~closure~~acquisition of ~~the SSB headquarters~~Ham-Let, $5.4 million increase in ~~Quakertown, PA, partially offset~~personnel-related expenses driven by ~~a $1.4~~higher headcount and bonuses and $1.7 million ~~gain from the sale of property and equipment.~~increase in outside professional services.

	Three Months Ended									Nine Months Ended									Three Months Ended									Nine Months Ended
	September 25,			September 27,			Percent			September 25,			September 27,			Percent			September 24,			September 25,			Percent			September 24,			September 25,			Percent
(Dollars in millions)	2020			2019			Change			2020			2019			Change			2021			2020			Change			2021			2020			Change
Interest income	$	0.2		$	-		n/m			$	0.7		$	0.4			75.0	%	$	0.1		$	0.2			-50.0	%	$	0.3		$	0.7			-57.1	%
Interest expense	$	(4.1	)	$	(6.6	)		-37.9	%	$	(13.1	)	$	(19.9	)		-34.2	%	$	(6.9	)	$	(4.1	)		68.3	%	$	(17.6	)	$	(13.1	)		34.4	%
Other income (expense), net	$	(1.1	)	$	3.1			-135.5	%	$	(3.2	)	$	4.2			-176.2	%	$	(1.4	)	$	(1.1	)		27.3	%	$	(6.4	)	$	(3.2	)		100.0	%

Interest expense ~~decreased~~increased in the three and nine months ended September ~~25, 2020,~~24, 2021, compared to the same periods in the prior year, due to a ~~lower~~higher average debt balance offset partially by lower interest rates resulting from lower LIBOR ~~rates and higher interest expense capitalized on borrowings related to qualified capital expenditures.~~rates.

Other income (expense), net ~~decreased~~increased $0.3 million in the three months ended September 25, ~~2020,~~2021, compared to the same period in the prior year, mainly due to foreign exchange losses of $0.7 million offset by a change in the fair value of the Cinos Korea common stock purchase obligation of $0.3 million.

Other income (expense), net increased $3.2 million in the nine months ended September 24, 2021, compared to the same period in the prior year, due to an increase of $11.6 million in the fair value of forward hedge contracts related to the non-U.S. dollar-denominated acquisition price of Ham-Let, a $1.1 million increase in foreign exchange losses and a decrease of $0.6 million in government grants income. These increases were partially offset by insurance proceeds of $7.3 million received for the reimbursement of our losses in the Cinos Korea fire and by the absence of $3.0 million loss from the ~~decrease~~change in fair value of the contingent earn-out ~~liability of $2.4 million related to the QGT acquisition and the $1.0 million business interruption insurance income, which were recorded~~ in ~~the same period of the prior year.~~

~~Other income (expense), net decreased in the~~ fiscal 2021.nine months ended September 25, 2020, compared to the same period in the prior year, due to increases in the fair value of the contingent earn-out liability related to the DMS acquisition and of the common stock purchase obligation of $2.7 million and $1.4 million, respectively. These other expenses were partially offset by other income of $0.6 million of government subsidies received by the Company’s subsidiary in China and by $0.6 million of insurance proceeds pertaining to the Cinos fire and the absence of the $3.9 million decrease in fair value of the contingent earn out related to the QGT acquisition and the $1.0 million business interruption insurance income, which were recorded in the same period of the prior year.

	Three Months Ended									Nine Months Ended									Three Months Ended									Nine Months Ended
	September 25,			September 27,			Percent			September 25,			September 27,			Percent			September 24,			September 25,			Percent			September 24,			September 25,			Percent
(Dollars in millions)	2020			2019			Change			2020			2019			Change			2021			2020			Change			2021			2020			Change
Provision for income taxes	$	4.8		$	3.9			23.1	%	$	15.0		$	8.2			82.9	%	$	8.4		$	4.8			75.0	%	$	21.6		$	15.0			44.0	%
Effective tax rate		16.0	%		81.4	%					20.6	%		80.5	%					19.8	%		16.0	%					21.8	%		20.6	%

The change in respective rates reflects, primarily, changes in the geographic mix of worldwide earnings and financial results in jurisdictions which are taxed at different rates and the impact of losses in jurisdictions with full federal and state valuation allowances.

Company management continuously evaluates the need for a valuation allowance on its deferred tax assets and, as of September ~~25, 2020,~~24, 2021, concluded that a full valuation allowance on its federal and state deferred tax assets remained appropriate.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was enacted and signed into law and GAAP requires recognition of the tax effects of new legislation during the reporting period that includes the enactment date. The CARES Act includes changes to tax provisions that benefit business entities and makes certain technical corrections to the 2017 TCJA. Tax relief measures for businesses include modifications to limitations on the deductibility of net operating losses (NOLs) such as a five-year carryback of NOLs incurred in tax years beginning in 2018, 2019 or 2020, and removal of the 80% of taxable income limitation on NOL deductions for tax years beginning before January 1, 2021. Other tax relief measures include modifications to the limitations on the deductibility of interest for tax years beginning in 2019 and 2020, acceleration of alternative minimum tax credit refunds, payroll tax relief, and a technical correction to the TCJA that would provide accelerated depreciation deductions for qualified improvement property. The CARES Act also provides other non-tax benefits to assist those impacted by the COVID-19 pandemic. The Company has evaluated the impact of the CARES Act and determined that there was no significant impact to the income tax provision for the three and nine months ended September 25, 2020. The Company also does not expect the provisions of the CARES Act to result in a significant cash benefit. However, the Company continues to monitor and evaluate the regulatory and interpretive guidance related to the CARES Act.

	September 25,		December 27,				September 24,		December 25,
(In millions)	2020		2019		Increase		2021		2020		Increase
Total cash and cash equivalents	$	176.1	$	162.5	$	13.6	$	457.0	$	200.3	$	256.7

	Nine Months Ended						Nine Months Ended
	September 25,			September 27,			September 24,			September 25,
(In millions)	2020			2019			2021			2020
Net cash flow provided by (used in):
Operating activities	$	52.9		$	89.1		$	170.0		$	52.9
Investing activities		(19.9	)		(39.8	)		(390.3	)		(19.9	)
Financing activities		(18.6	)		(31.3	)		477.9			(18.6	)
Effects of exchange rate changes on cash and cash equivalents		(0.8	)		(3.4	)		(0.9	)		(0.8	)
Net increase in cash and cash equivalents	$	13.6		$	14.6		$	256.7		$	13.6

We have required capital to fund our working capital needs, satisfy our debt obligations, maintain our equipment, purchase new capital equipment and make strategic acquisitions from time to time. As of September ~~25, 2020,~~24, 2021, we had cash of ~~$176.1~~$457.0 million

compared to ~~$162.5~~$200.3 million as of December ~~27, 2019.~~25, 2020. Our cash and cash equivalents, cash generated from operations, and amounts available under our revolving line of credit described below were our principal sources of liquidity as of September ~~25, 2020.~~24, 2021.

We anticipate that our existing cash and cash equivalents balance and operating cash flow will be sufficient to service our indebtedness and meet our working capital requirements and technology development projects for at least the next twelve months. The adequacy of these resources to meet our liquidity needs beyond that period will depend on our growth, the size and number of any acquisitions, the state of the worldwide economy, our ability to meet our financial covenants with our credit facility, the cyclical expansion or contraction of the semiconductor capital equipment industry and the other industries we serve and capital expenditures required to meet possible increased demand for our products.

In order to expand our business or acquire additional complementary businesses or technologies, we may need to raise additional funds through equity or debt financings. If required, additional financing may not be available on terms that are favorable to us, if at all. If we raise additional funds through the issuance of equity or convertible debt securities, our stockholders’ equity interest will be diluted and these securities might have rights, preferences and privileges senior to those of our current stockholders. We may also require the consent of our new lenders to raise additional funds through equity or debt financings. No assurance can be given that additional financing will be available or that, if available, such financing can be obtained on terms favorable to our stockholders and us.

In prior years, we determined that a portion of the current year and future year earnings of one of our China subsidiaries may be remitted in the future to one of our foreign subsidiaries outside of China and, accordingly, we provided for the related withholding taxes in our Condensed Consolidated Financial Statements. As of September ~~25, 2020,~~24, 2021, we had undistributed earnings of foreign subsidiaries that are indefinitely invested outside of the U.S. of approximately ~~$212.6~~$361.4 million. As of September ~~25, 2020,~~24, 2021, we have cash of approximately ~~$149.9~~$310.0 million in our foreign subsidiaries.

	September 25, 2020					September 24, 2021
(Dollars in millions)	Amount		Interest Rate			Amount			Weighted- Average Interest Rate
U.S. Term Loan	$	287.8		4.7	%	$	569.9		3.83%
FDS Revolving Credit Facility		0.3		0.8	%
Cinos China Term Loan		0.3		1.9	%
Ham-Let Credit Facilities							10.3		1.78% - 4.59%
Cinos China Credit Facilities							2.5		1.98% - 4.15%
Debt issuance costs							(14.4	)
	$	288.4				$	568.3

In August 2018, we entered into a credit agreement (the “Credit Agreement”) with Barclays Bank that provided a Term Loan, a Revolving Credit Facility, and a Letter of Credit Facility ~~(the~~(collectively the “Credit ~~Facilities”~~Facility”). We and some of our subsidiaries have agreed to secure all of their obligations under the Credit ~~Facilities~~Facility by granting a first priority lien in substantially all of our respective personal property assets (subject to certain exceptions and limitations). In August 2018, we borrowed $350.0 million under the Term Loan and used the proceeds, together with cash on hand, to finance the acquisition of QGT and to refinance our previous credit facilities.

On March 31, 2021, we entered into the Second Amendment (the “Second Amendment”) to the Credit Agreement to, among other things, (i) refinance and reprice $272.8 million of existing term B borrowings that will remain outstanding and (ii) obtain a $355.0 million senior secured incremental term loan B facility ((i) and (ii) collectively the “Term Loan”) with Barclays Bank, which increased the amount of term loan indebtedness outstanding under the Credit Facility.

The Term Loan has a maturity date of August 27, 2025, with monthly interest payments in arrears, quarterly principal payments of 0.625% of the ~~original~~ outstanding principal balance ~~payable beginning January 2019,~~thereof as of March 31, 2021, with the remaining principal paid upon maturity. ~~The~~ Under the Credit Facility, we may elect that the Term Loan ~~accrues~~bear interest ~~daily~~ at a rate per annum equal to either (a) “ABR” (as defined in the Credit Agreement), plus the applicable margin or (b) the “Eurodollar Rate” (as defined in the Credit Agreement), based on LIBOR, plus the applicable margin. The applicable margin for the Term Loan is equal to a ~~base LIBOR~~ rate ~~determined by reference~~per annum equal to either (i) at any time that our corporate family rating is Ba3 (with a stable outlook) or higher from Moody’s and BB- (with a stable outlook) or higher from S&P, (x) 3.50% for such Eurodollar term loans and (y) 2.50% for such ABR term loans or (ii) at all other times, (x) 3.75% for such Eurodollar term loans and (y) 2.75% for such ABR term loans. Interest on the Term Loan is payable on (1) in the case of such ABR term loans the last day of each calendar quarter and (2) in the case of such Eurodollar term loans, the last day of each relevant interest period and, in the case of any interest period longer than three months, on each successive date three months after the first day of such interest period. On March 29, 2021, we elected that the Term Loan outstanding as of March 31, 2021 accrue interest based on the “Eurodollar Rate” for an initial interest period of one month. As of March 31, 2021, the applicable margin with respect to the ~~London interbank offered rate for dollars, plus 4.5% (subject~~Term Loan was 3.75%. Pursuant to ~~certain adjustments quarterly based upon~~ the ~~Company’s consolidated leverage ratio).~~ Second Amendment to the Credit Agreement, the Credit Facility contains customary LIBOR replacement provisions in the event LIBOR is discontinued. At ~~As of~~ September ~~25, 2020~~24, 2021, we had an outstanding amount under the Term Loan of ~~$287.8~~$569.9 million, gross of unamortized debt issuance costs of ~~$8.3~~$14.4 million. As of September 24, 2021, the interest rate on the outstanding Term Loan was 3.8%. On December 31, 2021, LIBOR will officially be phased out. We will work with the bank to determine alternative risk-free rates.

The Revolving Credit Facility has an initial available commitment of $65.0 million and a maturity date of August 27, 2023. We pay a quarterly commitment fee in arrears equal to 0.25% of the average daily available commitment outstanding.~~During the first quarter of 2020 we drew $40.0 million under the~~

The Revolving Credit Facility ~~to fund operations. In September 2020, the revolver balance of $40.0 million was repaid in full~~.

~~As of~~ ~~September 25, 2020, interest rates on the outstanding Term Loan was 4.7%. After December 31, 2021, LIBOR will officially be phased out. We will work with our bank to determine alternative risk-free rates.~~

~~The Credit Agreement~~ requires that we maintain certain financial covenants, as defined in the Credit Agreement, including a consolidated fixed charge coverage ratio ~~(as defined in the New Credit Agreement)~~ as of the last day of any fiscal quarter of at least 1.25 to 1.00, and a consolidated leverage ratio ~~(as defined in the New Credit Agreement)~~ as of the last day of any fiscal quarter of no greater than 3.75 to 1.00. We were in compliance with all covenants for the quarter ended September ~~25, 2020.~~24, 2021.

The Letter of Credit Facility has an initial available commitment of $50.0 million and a maturity date of August 27, 2023. We pay quarterly in arrears a fee equal to 2.5% (subject to certain adjustments ~~as per~~to the Term ~~Loans)~~Loan) of the dollar equivalent of all outstanding letters of credit, and a fronting fee equal to 0.125% of the undrawn and unexpired amount of each letter of credit. As of September ~~25, 2020,~~24, 2021, we had ~~$2.4~~$2.8 million of outstanding letters of credit with beneficiaries such as landlords of certain facility leases and government agencies making up the majority of the outstanding balance. The remaining available commitments are $~~47.6~~47.2 million on the Letter of Credit Facility and $65.0 million on the Revolving Credit Facility.

~~As of~~ ~~September 25, 2020, FDS had an outstanding amount under a revolving credit facility of $0.3 million with an interest rate of 0.8%.~~

In ~~the quarter ended September 25,~~ 2020, Cinos China amended its existing ~~Credit Agreement~~credit agreement and entered into two additional ~~Credit Agreements~~credit agreements with a local bank that provide ~~Revolving Credit Facilities~~revolving credit facilities for a total available commitment of $3.5 million with various maturity dates through September 23, 2022 and interest rates ranging from ~~1.9%~~2.0% to ~~4.1%~~4.2%. As of September ~~25, 2020,~~24, 2021, Cinos China had an outstanding ~~amount~~debt of ~~$ 0.3~~$2.5 million with an average interest rate of ~~1.9%~~3.4% under these ~~Credit Agreements.~~credit agreements.

Cinos Korea has ~~Credit Agreements with various banks~~a credit agreement that ~~provide Revolving Credit Facilities~~provides a revolving credit facility for a total available commitment of ~~1.6~~0.6 billion Korean Won ~~(approximately $1.4~~(approximately $0.5 million) with annual renewals beginning ~~from April 2021 through~~ June ~~2021 and~~2022 with an interest ~~rates ranging from 1.4% - 5.4%~~rate of 2.9%. During the nine months ended September ~~25, 2020,~~24, 2021, borrowings under ~~these Revolving Facilities~~the revolving credit facility were insignificant and no ~~amounts were~~debt was outstanding as of September ~~25, 2020.~~24, 2021.

UCT Fluid Delivery Solutions s.r.o. has a credit agreement with a local bank in the Czech Republic that provides for a revolving credit facility in the aggregate of up to 6.0 million euros. As of September 24, 2021, no debt was outstanding under this revolving credit facility.

As of September ~~25, 2020,~~24, 2021, our total bank debt was ~~$280.1~~$568.3 million, net of unamortized debt issuance costs of ~~$8.3~~$14.4 million. As of September ~~25, 2020,~~24, 2021, we had ~~$55.0 million and $9.3 million available to borrow on our~~unused revolving credit facilities of $65.0 million, $9.7 million and $1.0 million in the ~~U.S.~~United States, Czech Republic and ~~Czech Republic,~~China, respectively.

The fair value of our long-term debt was based on Level 2 inputs, and fair value was determined using quoted prices for similar liabilities in inactive markets. The carrying value of our long-term debt approximates fair value.

Capital expenditures were ~~$26.7~~$44.4 million during the nine months ended September 25, 2020 and were primarily attributable to the capital invested in our manufacturing facilities in the United States, China and South Korea as well as costs associated with the ongoing design and implementation of our new enterprise resource planning system. The Company’s anticipated capital expenditures for the remainder of ~~2020~~2021 are expected to be financed primarily from our cash flow generated from operations.

During the periods presented, we ~~did~~do not have ~~any relations 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.

In conjunction with the sale of our products in the ordinary course of business, we provide standard indemnification against certain liabilities to our customers, which may include claims of losses by their own customers resulting out of property damages, bodily injuries or deaths, or infringement of intellectual property rights by our products. Our potential liability arising out of intellectual property infringement claims by any third party is generally uncapped. As of September 24, 2021, we have not incurred any significant costs to defend lawsuits or settle claims related to these indemnification arrangements. As a result, we believe the estimated fair value of these arrangements is minimal.

Other than operating leases for certain equipment and real estate and purchase order commitments primarily for inventory, we have no off-balance sheet transactions ~~unconditional purchase obligations~~ or similar instruments and, other than the arrangements described under “Borrowing Arrangements” above and our common stock purchase obligations resulting from the acquisition of QGT, are not a guarantor of any other entities’ debt or other financial obligations. The following table summarizes our future minimum lease payments, principal payments under debt obligations and our purchase obligations for the purchase of inventory as of September ~~25, 2020:~~24, 2021:

(In millions)	Total		Fiscal Year 2020		Fiscal Years 2021 - 2022		Fiscal Years 2023 - 2024		Beyond		Total		Fiscal Year 2021		Fiscal Years 2022 - 2023		Fiscal Years 2024 - 2025		Beyond
Operating leases (1)	$	47.8	$	3.7	$	22.6	$	12.3	$	9.2	$	102.2	$	5.3	$	37.7	$	24.6	$	34.6
Borrowing arrangements (2)		288.4		2.8		17.5		17.5		250.6		582.7		17.3		30.7		534.7		—
Common stock purchase obligation (3)		8.2		—		8.2		—		—
Purchase order commitments (4)		179.4		179.4		—		—		—
Purchase order commitments (3)												472.4		472.4		—		—		—
Total	$	523.8	$	185.9	$	48.3	$	29.8	$	259.8	$	1,157.3	$	495.0	$	68.4	$	559.3	$	34.6

There were no significant changes to our quantitative and qualitative disclosures about market risk during the period covered by this report. 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 ~~27, 2019~~25, 2020 for a more complete discussion of the market risks we encounter.

Under the supervision and with the participation of our management, including our ~~chief~~principal executive officer and ~~chief~~principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as ~~such term is~~ defined ~~under Rule~~in Rules 13a-15(e) ~~promulgated~~and 15d-15(e) under the Exchange ~~Act. Disclosure~~Act as of the end of the period covered by this report (the "Evaluation Date"). Based on this evaluation, our principal executive officer and principal financial officer concluded as of the Evaluation Date that our disclosure controls and procedures ~~are designed~~were effective such that the information related to ~~ensure that information~~the Company, including our consolidated subsidiaries, required to be disclosed ~~by us~~ in ~~the~~our SEC reports ~~we file or submit under the Exchange Act~~(i) is recorded, processed, summarized and reported within the time periods specified in ~~the SEC’s~~SEC rules and forms, and ~~that such information~~(ii) is accumulated and communicated to the Company's management, including ~~the chief~~our principal executive officer and ~~chief~~principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based upon this evaluation, our chief executive officer and our chief financial officer concluded that because of the material weaknesses identified in our internal control over financial reporting discussed below, our disclosure controls and procedures were not effective as of ~~September 25, 2020, the end of the period covered by this Quarterly Report on Form 10-Q.~~

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

~~Previously Identified Material Weaknesses in Internal Control Over Financial Reporting~~

~~We previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 27, 2019, the following control deficiencies~~ ~~related to our Semiconductor Services Business (SSB) segment, which continue to exist as of September 25, 2020, that constitute material weaknesses in our internal control over financial reporting:~~

We are taking the steps necessary to remediate the control deficiencies that constituted the material weaknesses described above by implementing changes to our internal control over financial reporting. Management is implementing measures to ensure that the control deficiencies contributing to the material weaknesses are remediated, and that these controls are designed and operating effectively. ~~We are using both internal and external resources to assist in the following actions:~~

~~As described below, we are in the midst of our remediation process, and have taken the following steps to remediate the control deficiencies that constituted the material weaknesses described above:~~

We believe the measures described above will facilitate the remediation of the control deficiencies we have identified and strengthen our internal control over financial reporting. We are committed to continuing to improve our internal control processes and will continue to review, optimize and enhance our financial reporting controls and procedures. As we continue to evaluate and work to improve our internal control over financial reporting, we may take additional measures to address control deficiencies, or we may modify, or, in appropriate circumstances, not complete, certain of the remediation measures described above. These material weaknesses will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

~~Except for the remediation efforts discussed above under “Status of Remediation Efforts”, there~~There were no changes in internal controls over financial reporting during the third fiscal ~~third~~ quarter ended September ~~25, 2020,~~24, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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.

There were no material changes during the period covered in this report to the risk factors previously disclosed in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December ~~27, 2019~~25, 2020~~, except~~ (as ~~follows:~~updated in our Current Report on Form 8-K filed on April 5, 2021).

The COVID-19 outbreak is now a global pandemic as declared by the World Health Organization in March 2020. In response to the rapidly spreading pandemic, many governments around the world, including those in the United States, have taken the unprecedented measures to slow the spread, including the implementation of various forms of “shelter-in-place” orders that shut down most business operations around the globe. UCT’s work in manufacturing and cleaning semiconductor equipment parts is considered “essential critical infrastructure” work as identified in the federal guidelines issued by the U.S. Department of Homeland Security, which deemed semiconductor supply chain vendors critical to the continuity of economic and national security. To date, we have continued our operations within the permitted boundaries set forth in both the federal guidelines and state and local shelter-in-place orders. The future impact of COVID-19 on our business, however, is extremely difficult to estimate, as much of it depends on the efficacy of the current shelter-in-place orders in slowing down the pandemic, the governments’ changing calculations on the economic impact and the health implications of maintaining these orders, the progress in the healthcare industry’s ability to effectively combat the virus, and potential increase or decrease in semiconductor demand resulting from COVID-19 responses, all of which are highly unpredictable. Likewise, the financial market as a whole has experienced extreme volatility as a result of the global economic impact of the COVID-19 pandemic, which has impacted, and may continue to impact, our stock price.

Cybersecurity attacks are evolving and include, but are not limited to, malicious software, attempts to gain unauthorized access to data, and other electronic security breaches that could lead to disruptions in systems, unauthorized release of confidential or otherwise protected information and corruption of data (our own or that of third parties). Although we have adopted certain measures to mitigate potential risks to our systems from information technology-related disruptions, given the unpredictability of the timing, nature and scope of such disruptions, we could potentially be subject to production downtimes, operational delays, other detrimental impacts on our operations or ability to provide products and services to our customers, the compromising of confidential or otherwise protected information, misappropriation, destruction or corruption of data, security breaches, other manipulation or improper use of our systems or networks, financial losses from remedial actions, loss of business or potential liability, and/or damage to our reputation, any of which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

In August 2020, a third party gained unauthorized access to some of our data by launching a cyberattack on some of our servers. The Company believes that information related to fewer than 6000 employees (and former employees) of the Company was accessed, and that the information included social security numbers and some financial and credit card account numbers. While remedial actions are ongoing, including notifying all affected individuals and relevant state regulatory agencies, the attack has had no impact on our operations, and we do not anticipate that it will have any material adverse effect on our business, financial condition, results of operations or cash flows.

The following exhibits are filed with this quarterly Report on Form 10-Q for the quarter ended September ~~25, 2020:~~24, 2021:

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Delaware		61-1430858
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

26462 Corporate Avenue, Hayward, California		94545
(Address of principal executive offices)		(Zip Code)

Large accelerated filer	☐☒	Accelerated filer	☒☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐


	PART I. FINANCIAL INFORMATION
ITEM 1.	UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	3
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	2528
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	3336
ITEM 4.	CONTROLS AND PROCEDURES	3336
	PART II. OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	3537
ITEM 1A.	RISK FACTORS	3537
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	3537
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	3537
ITEM 4.	MINE SAFETY DISCLOSURES	3537
ITEM 5.	OTHER INFORMATION	3637
ITEM 6.	EXHIBITS	3637
SIGNATURES		3738

(In millions)	Shares			Aggregate Fair Value
Unvested RSUs, PSUs and RSAs at December 25, 2020		1.7		$	54.1
Granted	0.5
Vested		(0.8	)
Forfeited		(0.1	)
Unvested RSUs, PSUs and RSAs as of September 24, 2021		1.3		$	60.8
Vested and expected to vest RSUs, PSUs and RSAs as of September 24, 2021		1.2		$	54.0

			Purchased
	Useful Life		Intangible Assets
	(In years)		(In millions)
Customer relationships		6	$	6.9

(In millions)	Common stock Purchase obligation		Pension obligation
As of December 27, 2019	$	6.8	$	4.4
Fair value adjustments	1.4		0.8
As of September 25, 2020	$	8.2	$	5.2

	Gains (Losses) Recognized in OCI on Derivatives Before Tax Effect (Effective Portion)
	Three Months Ended					Nine Months Ended
	September 24,			September 25,		September 24,			September 25,
(In millions)	2021			2020		2021			2020
Derivatives in Cash Flow Hedging Relationship
Forward contracts	$	(0.3	)	$	—	$	(0.4	)	$	—

	Losses Recognized in Income on Derivatives
		Three Months Ended				Nine Months Ended
		September 24,		September 25,		September 24,			September 25,
(In millions)	Income Statement Location	2021		2020		2021			2020
Derivatives Not Designated As Hedging Instruments
Forward contracts	Other income (expense), net	$	—	$	—	$	(11.6	)	$	—

(In millions)	SPS		SSB		Total
Balance at December 27, 2019	$	97.6	$	73.5	$	171.1
Adjustments	0		0		0
Balance at September 25, 2020	$	97.6	$	73.5	$	171.1

Exhibit Number		Description
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

	ULTRA CLEAN HOLDINGS, INC.
	(Registrant)
Date: November ~~4, 2020~~3, 2021

	By:	/S/ JAMES P. SCHOLHAMER
	Name:	James P. Scholhamer
	Title:	Chief Executive Officer
		(Principal Executive Officer and duly authorized signatory)

Date: November ~~4, 2020~~3, 2021

	By:	/S/ SHERI SAVAGE
	Name:	Sheri Savage
	Title:	Chief Financial Officer
		(Principal Financial Officer and duly authorized signatory)