Acquisitions and Divestitures

12 Months Ended

Dec. 31, 2025

Business Combination [Abstract]

Acquisitions and Divestitures

Note 20 – Acquisitions and Divestitures

TF Semiconductor Solutions, Inc. Agreement and Plan of Merger

On April 29, 2025, the Company entered into an agreement to sell its approximate 56.4% ownership stake in TF Semiconductor Solutions, Inc. to Microchip Technology Incorporated (“MCHP”) in exchange for shares of MCHP common stock at a value up to approximately $17.6 million, subject to earnout provisions, and certain closing adjustments. The transaction closed on May 8, 2025, resulting in a gain of $13.7 million.

Fortemedia acquisition

On October 31, 2024, the Company closed its acquisition of Fortemedia, Inc. (“Fortemedia”), a global company that focuses on developing high-quality solutions and semiconductor products that provide advanced voice processing technologies to enhance human-to-human and human-to-machine voice communication quality and efficiencies. The Company acquired Fortemedia to expand its product portfolio and enhance the Company’s footprint in advanced voice processing technologies, primarily targeted at the automotive and computer markets.

The Company acquired 100% of the outstanding interest of Fortemedia for a total aggregate purchase price of $60.4 million and total net consideration of $52.6 million after adjusting for cash acquired. The purchase price was funded with cash on hand. The Company incurred acquisition costs of approximately $1.1 million that were recognized in SG&A.

The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations. Treatment as a business combination is based upon the following primary considerations: the counterparties in the transaction are not under common control with the Company, there is no concentration of substantially all the fair value of assets acquired in a single asset or group of similar assets, and Fortemedia had substantive processes that contributed to the ability to produce outputs, including an organized workforce which was acquired. During the fourth quarter of 2025, the Company finalized the purchase price allocation with adjustments to uncertain tax positions. The following table summarizes the preliminary purchase price allocation, the fourth quarter 2025 purchase price adjustments, and the final purchase price allocation:

		Preliminary Values		Adjustments Debit/(Credit)			Final Values
Fair value of consideration transferred	$		60,378				$	60,378
Estimated fair value of assets acquired:
Cash and cash equivalents			7,803		-			7,803
Accounts receivable			1,898		-			1,898
Inventories			1,845		-			1,845
Prepaid expenses and other current assets			2,324		(472	)		1,852
Property, plant, and equipment			5,388		-			5,388
Intangible assets			19,000		-			19,000
Other long-term assets			3,799		-			3,799
Total assets acquired			42,057		(472	)		41,585
Estimated fair value of liabilities assumed:
Accounts payable			381		-			381
Accrued liabilities and other			7,437		-			7,437
Income tax payable			64		-			64
Deferred taxes			412		292			120
Other long-term liabilities			9,728		(991	)		10,719
Total liabilities assumed			18,022		(699	)		18,721
Total identifiable net assets			24,035		(1,171	)		22,864
Goodwill			36,343		1,171			37,514
Fair value of consideration transferred	$		60,378				$	60,378

The excess of the total equity value of Fortemedia over net assets acquired was recorded as goodwill. The goodwill is primarily attributable to the synergies expected to arise after the acquisition. None of the goodwill is expected to be deductible for tax purposes.

The intangible assets acquired as a result of the acquisition consisted of developed technologies and customer relationships, both of which will be amortized over the remaining useful life. The fair value of developed technologies were valued using a Multi-Period Excess Earnings method. The Multi-Period Excess Earning method model estimates revenues and cash flows derived from the asset and then deducts portions of the cash flow that can be attributed to supporting assets. The fair value was determined to be $13.0 million and will be amortized over a four-year period. The customer relationships were valued using the With and Without method. The With and Without method calculates the value of an intangible asset by comparing the estimated value of a business with the asset in place to the

estimated value of the same business without the asset, with the difference representing the value of the asset itself. The fair value was determined to be $6.0 million and will be amortized over a one-year period.

The amounts of revenue and earnings of Fortemedia included in the Company’s consolidated statement of operations from the acquisition date to the period ending December 31, 2024 are as follows:

	November 1, 2024 to
	December 31, 2024
Net sales	$	8,297
Net loss		(1,808	)

Unaudited Pro Forma Financial Information

The following unaudited pro forma summary presents consolidated information of the Company as if the acquisition and consolidation of Fortemedia had occurred on January 1, 2023:

	Twelve Months Ended December 31,
	2024		2023
Net sales	$	1,334,446	$	1,693,230
Net income		49,465		218,815
Net income attributable to common stockholders		42,647		215,349
Earnings per share - basic	$	0.92	$	4.70
Earnings per share - diluted	$	0.92	$	4.65

The unaudited pro forma consolidated results of operations do not purport to be indicative of the results that would have been obtained if the above acquisition occurred as of the dates indicated or of those results that may be obtained in the future. The unaudited pro forma consolidated results for the twelve months ended December 31, 2024, include adjustments that result in an increase to amortization and depreciation of $2.5 million, net of tax.

The unaudited pro forma consolidated results for the twelve months ended December 31, 2023 include adjustments that result in an increase to amortization and depreciation of $7.7 million, net of tax. These unaudited pro forma consolidated results of operations were derived, in part, from the historical consolidated financial statements of Fortemedia and other available information and assumptions believed to be reasonable under the circumstances. Fortemedia has been conformed to the Company's reporting calendar.