INCOME TAXES

12 Months Ended

Jun. 27, 2026

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

For the period ended June 27, 2026, the Company has prospectively adopted ASU 2023-09 (Improvements to Income Tax Disclosures).

The domestic and foreign components of loss before income taxes were:

	Fiscal Year Ended
	June 27, 2026		June 28, 2025
	(in thousands)
Domestic	$	(26,489)	$	(19,691)
Foreign	1,699		7,730
Loss before income taxes	$	(24,790)	$	(11,961)

Income tax provision (benefit) consists of the following:

	Fiscal Year Ended
	June 27, 2026		June 28, 2025
	(in thousands)
Current income tax provision (benefit):
U.S. Federal	$	(106)	$	(10)
State and local	29		122
Foreign	673		2,841
	$	596	$	2,953
Deferred income tax provision (benefit):
U.S. Federal	$	20,687	$	(5,101)
State and local	838		(445)
Foreign	882		(1,050)
	22,407		(6,596)
Total income tax expense (benefit)	$	23,003	$	(3,643)

The Company has gross tax credit carryforwards of approximately $12.2 million at June 27, 2026 consisting of federal research and development (R&D) tax credits.

Management has reviewed all deferred tax assets for purposes of determining whether a valuation allowance may be required. A valuation allowance against deferred tax assets is required if it is more likely than not that some of the deferred tax assets will not be realized. At June 27, 2026, the Company evaluated the realizability of its U.S. federal and state deferred tax assets by considering all available positive and negative evidence. The principal negative evidence included a significant cumulative loss in recent years in the U.S. tax-paying group, continued annual U.S. losses, and fiscal 2026 revenue and operating results below the levels reflected in prior forecasts. At earlier fiscal 2026 reporting dates, management concluded that this negative evidence was outweighed by the positive evidence then available, including scheduled reversals of existing taxable temporary differences, the absence of a history of tax credit or operating loss carryforwards expiring unused, and forecasted future U.S. taxable income associated with anticipated program ramps and operating improvements. At March 28, 2026, the forecast continued to reflect a return to operating profitability during the fourth quarter and was supported by strong customer demand.

During the fourth quarter, actual U.S. operating results did not achieve the timing or magnitude contemplated in the March 28, 2026, realizability assessment. This additional actual-result evidence, considered together with previous forecast shortfalls and the significant cumulative U.S. loss position, reduced the weight that could be placed on projected future taxable income as positive evidence. Because future reversals of existing taxable temporary differences were insufficient to realize the net U.S. deferred tax assets and no carryback or qualifying tax-planning strategies were available, management concluded at June 27, 2026, that it was no longer more likely than not that the affected deferred tax assets would be realized. Accordingly, the Company recorded a full valuation allowance of approximately $28.4 million against its net U.S. deferred tax assets, which increased income tax expense by approximately $28.4 million in the fourth quarter. The U.S. allowance, together with the valuation allowance recorded against deferred tax assets in China, resulted in a total valuation allowance of approximately

$29.5 million at June 27, 2026.

On January 27, 2021, the Company received official notice from the Vietnamese tax authorities, confirming tax benefits awarded related to the Company’s principal product line in Vietnam (the “Tax Holiday”). Under the Tax Holiday, the tax rate applied to income derived from this product line will be zero percent for four years beginning with fiscal year 2021, then five

percent for nine years, then ten percent for one year (as opposed to the normal twenty percent Vietnamese statutory rate). For fiscal year 2026, the impact of the Vietnam Tax Holiday on the effective tax rate was $177,000 or 1.0 percentage points.

The Company continuously evaluates impact of tax law and regulatory changes. For fiscal year 2026, the Company evaluated the impact of enacted tax law changes, including the One Big Beautiful Bill Act (“OBBBA”) which was enacted on July 4, 2025, and reflected the effects of enacted changes in the measurement of current and deferred taxes as applicable. These tax law changes mitigate federal income taxes payable, but do not materially impact the Company’s overall tax position and effective tax rate.

The 2017 Tax Cuts and Jobs Act (TCJA) mandated that, for tax years after fiscal year 2022, certain costs incurred for research and development (R&D) activities would no longer be allowed for immediate deduction but would be capitalized and amortized over 5 years (for R&D activities performed domestically) or 15 years (for R&D activities performed abroad). The Company began capitalizing and amortizing such costs in fiscal year 2023, resulting in an increase to income taxes payable that was largely offset by the utilization of R&D credit carryovers. The OBBBA eliminated the capitalization requirement, applicable to the Company beginning in 2026.

In future years, repatriations of cash will generally be tax-free in the U.S. However, withholding taxes in China may still apply to any such future repatriations. In the fourth quarter of fiscal year 2025, Management changed its indefinite investment assertions relating to the portion of accumulated earnings and profits in China that may be repatriated in the future and updated its deferred tax liability based on the withholding tax expected in connection with future repatriation. Accordingly, management estimates that future repatriations of cash from China may result in approximately $0.1 million of withholding tax. There would be no offsetting foreign tax credits in the U.S. and as such, this potential liability is a direct cost associated with actual repatriations. Withholding taxes will not apply to future repatriations from Mexico or Vietnam.

The Company expects to repatriate approximately $0.9 million from China, in the future. All other unremitted foreign earnings are expected to remain permanently reinvested for planned fixed assets purchases and improvements in foreign locations.

Income tax expense differed from the amounts computed by applying the U.S. Federal statutory income tax rate to income (loss) before income taxes, as presented in conformity with ASU 2023-09 as follows:

	Fiscal Year Ended
	June 27, 2026
	(in thousands)		%
Tax at Statutory Rate	$	(5,206)	21.0	%
State and local taxes, net of federal effect (1),(2)	968		(3.9)	%
Domestic federal tax effects
Cross-border tax laws
GILTI and other foreign income inclusion	124		(0.5)	%
Withholding tax	(180)		0.7	%
Tax Credits
Research & development tax credits	(942)		3.8	%
Nontaxable and nondeductible items
Equity compensation	33		(0.1)	%
Changes in valuation allowances	27,073		(109.2)	%
Other	(65)		0.3	%
Foreign tax effects
China
Statutory income tax rate differential	(110)		0.4	%
Nondeductible expenses	4		—	%
Changes in valuation allowances	1,033		(4.2)	%
Other	3		—	%
Mexico
Statutory income tax rate differential	83		(0.3)	%
Foreign exchange	90		(0.4)	%
Inflation adjustments	65		(0.3)	%
Fixed assets	126		(0.5)	%
Nondeductible salaries	966		(3.9)	%
Maquiladora deduction	(857)		3.4	%
Other nondeductible expenses	23		(0.1)	%
Vietnam
Tax incentives	(177)		0.7	%
Statutory income tax rate differential	(35)		0.2	%
Foreign exchange	(16)		0.1	%
Income tax expense	$	23,003	(92.8)	%

(1)The states that contribute to the majority (greater than 50%) of the tax effect in this category include Mississippi, Minnesota, and Arkansas for fiscal year 2026.

(2)The State and local taxes, net of federal effect, category includes $1.3 million, or (5.4)%, related to changes in valuation allowances.

Income tax expense differed from the amounts computed by applying the U.S. Federal statutory income tax rate to loss before income taxes, as presented prior to the adoption of ASU 2023-09 as follows:

	Fiscal Year Ended
	June 28, 2025
	(in thousands)
Federal income tax provision at statutory rates	$	(2,512)
State income taxes, net of federal tax effect	(264)
Foreign tax rate differences	284
Effect of income tax credits	(569)
Inflation adjustments	115
Deferred income tax on unremitted foreign earnings	(474)
Provision to return reconciliation	(44)
Equity compensation shortfall	33
Foreign exchange gains/losses unrealized for tax purposes	(204)
Other	(8)
Income tax benefit	$	(3,643)

Cash paid for income taxes (net of refunds) by jurisdiction consists of the following:

(in thousands)

	Fiscal Year Ended
	June 27, 2026
	(in thousands)
U.S. Federal	$	—
State and Local	53
Foreign
China	—
Mexico	1,137
Vietnam	469
Total Foreign	1,606
Total income taxes paid, net	$	1,659

The amount of income taxes paid by the Company during the year ended June 28, 2025, was $1.0 million.

Deferred income tax assets and liabilities consist of the following at:

	June 27, 2026		June 28, 2025
	(in thousands)
Deferred tax assets:
Net operating loss	$	1,558	$	—
Tax credit carryforwards, net	9,171		8,121
Inventory	548		240
Identifiable intangibles	123		185
Accruals	4,402		2,764
Property, plant, and equipment	2,323		13
ASC 606 deferred costs	3,142		2,803
Lease liabilities	6,047		2,721
Interest expense deduction carryforward	6,853		5,362
Research and development expenses	8,733		7,818
Other	326		389
Total gross deferred income tax assets	$	43,226	$	30,416
Less: valuation allowance	(29,453)		—
Total net deferred income tax assets	$	13,773	$	30,416
Deferred tax liabilities:
Accrued withholding tax - unremitted earnings	$	(93)	$	(287)
Right-of-use assets	(6,038)		(2,737)
Tax capital lease liabilities	(2,689)		(504)
ASC 606 accelerated revenue	(3,168)		(2,826)
Other	(375)		(665)
Deferred income tax liabilities	$	(12,363)	$	(7,019)
Net deferred income tax assets	$	1,410	$	23,397
Balance sheet caption reported in:
Long-term deferred income tax asset	$	1,451	$	23,397
Long-term deferred income tax liability	(41)		—
Net deferred income tax asset	$	1,410	$	23,397

Uncertain Tax Positions:

The Company has R&D tax credits that approximate $12.2 million that have 20-year carryforwards before expiring. The Company’s R&D tax credits expire in various fiscal years from 2033 to 2046.

As of June 27, 2026, the Company had unrecognized tax benefits of $3.1 million related to its gross R&D tax credits. The unrecognized tax benefits relate to certain R&D tax credits generated from 2005 to 2026.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	Fiscal Year Ended
	June 27, 2026		June 28, 2025
	(in thousands)
Beginning balance	$	2,963	$	2,899
Additions based on tax positions related to the current year	100		80
Adjustment to prior year tax positions and amended tax returns	5		(16)
Lapse of statute of limitations	—		—
Ending balance	$	3,068	$	2,963

The $3.1 million of unrecognized tax benefits at the end of fiscal year 2026, if recognized, would increase the deferred tax assets and corresponding valuation allowance, having no impact on the effective tax rate.

The Company recognizes interest accrued related to unrecognized tax benefits and penalties in its income tax provision. The Company has not recognized any interest or penalties in the fiscal years presented in these financial statements. The Company is subject to income tax in the U.S. federal jurisdiction, various state jurisdictions, Mexico, China and Vietnam. Certain years remain subject to examination but there are currently no ongoing exams in any taxing jurisdiction.