Quarterly Report for Quarter Ending June 28, 2024 (Form 10-Q)

10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 28, 2024

or

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to _____________

Commission File Number: 001-39675

ALLEGRO MICROSYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Delaware	46-2405937
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
955 Perimeter Road Manchester, New Hampshire	03103
(Address of principal executive offices)	(Zip Code)

(603) 626-2300

(Registrant's telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.01 per share		ALGM		The Nasdaq Stock Market LLC

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, a 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.

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

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 ☒

As of July 29, 2024, the registrant had 193,920,480shares of common stock, par value $0.01 per share, outstanding.

TABLE OF CONTENTS

		Page
	Forward-Looking Statements	2
PART I.	Financial Information	3
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of June 28, 2024 and March 29, 2024 (Unaudited)	3
	Condensed Consolidated Statements of Operations for the three-month periods ended June 28, 2024 and June 30, 2023 (Unaudited)	4
	Condensed Consolidated Statements of Comprehensive Income for the three-month periods ended June 28, 2024 and June 30, 2023 (Unaudited)	5
	Condensed Consolidated Statements of Changes in Equity for the three-month periods ended June 28, 2024 and June 30, 2023 (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the three-month periods ended June 28, 2024 and June 30, 2023 (Unaudited)	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	25
PART II.	Other Information	26
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 5.	Other Information	26
Item 6.	Exhibits	27
	Signatures	28

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (the "Quarterly Report") contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial position, business strategy, prospective products and the plans and objectives of management for future operations, may be forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

Statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, including, among others, statements regarding the liquidity, growth and profitability strategies and factors and trends affecting our business are forward-looking statements. Without limiting the foregoing, in some cases, you can identify forward-looking statements by terms such as "aim," "may," "will," "should," "expect," "exploring," "plan," "anticipate," "could," "intend," "target," "project," "contemplate," "believe," "estimate," "predict," "potential," "seek," or "continue" or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. No forward-looking statement is a guarantee of future results, performance, or achievements, and one should avoid placing undue reliance on such statements.

Forward-looking statements are based on our management's beliefs and assumptions and on information currently available to us. Such beliefs and assumptions may or may not prove to be correct. Additionally, such forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to, those identified in Part I, Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Part II, Item 1A. "Risk Factors" in this Quarterly Report and Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the year ended March 29, 2024, filed with the Securities and Exchange Commission ("SEC") on May 23, 2024 (the "2024 Annual Report"), and those identified in the "Risk Factors" section of our Prospectus on Form S-3ASR dated July 23, 2024 and Prospectus Supplement on Form 424B5 dated July 23, 2024, as any such factors may be updated from time to time in our Quarterly Reports on Form 10-Q, and our other filings with the SEC.

You should read this Quarterly Report and the documents that we reference completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. All forward-looking statements speak only as of the date of this Quarterly Report, and except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements, whether as a result of any new information, future events, or otherwise.

Unless the context otherwise requires, references to "we," "us," "our," the "Company" and "Allegro" refer to the operations of Allegro MicroSystems, Inc. and its consolidated subsidiaries.

PART I - FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited)

ALLEGRO MICROSYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value and share amounts)

(Unaudited)

		June 28, 2024			March 29, 2024
Assets
Current assets:
Cash and cash equivalents		$	173,136			$	212,143
Restricted cash			11,041				10,018
Trade accounts receivable, net			63,358				118,508
Accounts receivable due from related party			39				207
Inventories			175,901				162,302
Prepaid income taxes			29,411				31,908
Prepaid expenses and other current assets			33,647				33,377
Current portion of related party notes receivable			3,750				3,750
Total current assets			490,283				572,213
Property, plant and equipment, net			319,763				321,175
Operating lease right-of-use assets, net			20,423				20,374
Deferred income tax assets			59,589				54,496
Goodwill			202,292				202,425
Intangible assets, net			271,723				276,854
Related party notes receivable, less current portion			3,750				4,688
Equity investment in related party			26,270				26,727
Other assets			54,797				51,651
Total assets		$	1,448,890			$	1,530,603
Liabilities, Non-Controlling Interests and Stockholders' Equity
Current liabilities:
Trade accounts payable		$	35,346			$	35,964
Amounts due to related party			4,895				1,626
Accrued expenses and other current liabilities			58,702				71,126
Current portion of operating lease liabilities			5,183				5,263
Current portion of long-term debt			1,411				3,929
Total current liabilities			105,537				117,908
Long-term debt			202,589				249,611
Operating lease liabilities, less current portion			16,045				16,404
Other long-term liabilities			14,877				14,964
Total liabilities			339,048				398,887
Commitments and contingencies (Note 10)
Stockholders' Equity:
Preferred stock, $0.01par value; 20,000,000shares authorized, noshares issued or outstanding			-				-
Common stock, $0.01par value; 1,000,000,000shares authorized, 193,836,578shares issued and outstanding at June 28, 2024; 1,000,000,000shares authorized, 193,164,609issued and outstanding at March 29, 2024			1,938				1,932
Additional paid-in capital			693,253				694,332
Retained earnings			445,337				463,012
Accumulated other comprehensive loss			(31,946	)			(28,841	)
Equity attributable to Allegro MicroSystems, Inc.			1,108,582				1,130,435
Non-controlling interests			1,260				1,281
Total stockholders' equity			1,109,842				1,131,716
Total liabilities, non-controlling interests and stockholders' equity		$	1,448,890			$	1,530,603

The accompanying notes are an integral part of these condensed consolidated financial statements.

ALLEGRO MICROSYSTEMS, INC.

CONDENSED CONSOLIDATEDSTATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(Unaudited)

		Three-Month Period Ended
		June 28, 2024			June 30, 2023
Net sales		$	166,919			$	278,293
Cost of goods sold			92,148				120,343
Gross profit			74,771				157,950
Operating expenses:
Research and development			45,204				42,975
Selling, general and administrative			40,197				44,229
Total operating expenses			85,401				87,204
Operating (loss) income			(10,630	)			70,746
Other income (expense):
Interest expense			(5,377	)			(769	)
Interest income			494				843
Other income (expense), net			(1,060	)			(2,716	)
(Loss) income before income taxes			(16,573	)			68,104
Income tax provision			1,040				7,215
Net (loss) income			(17,613	)			60,889
Net income attributable to non-controlling interests			62				39
Net (loss) income attributable to Allegro MicroSystems, Inc.		$	(17,675	)		$	60,850
Net (loss) income per common share attributable to Allegro MicroSystems, Inc.:
Basic		$	(0.09	)		$	0.32
Diluted		$	(0.09	)		$	0.31
Weighted average shares outstanding:
Basic			193,465,708				191,997,330
Diluted			193,465,708				194,991,906

The accompanying notes are an integral part of these condensed consolidated financial statements.

ALLEGRO MICROSYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(Unaudited)

		Three-Month Period Ended
		June 28, 2024			June 30, 2023
Net (loss) income		$	(17,613	)		$	60,889
Net income attributable to non-controlling interests			62				39
Net (loss) income attributable to Allegro MicroSystems, Inc.			(17,675	)			60,850
Other comprehensive loss:
Foreign currency translation adjustment, net of tax			(3,188	)			(458	)
Comprehensive (loss) income			(20,863	)			60,392
Other comprehensive gain attributable to non-controlling interests			83				44
Comprehensive (loss) income attributable to Allegro MicroSystems, Inc.		$	(20,780	)		$	60,436

The accompanying notes are an integral part of these condensed consolidated financial statements.

ALLEGRO MICROSYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in thousands, except share amounts)

(Unaudited)

		Preferred Stock			Common Stock			Additional Paid-In			Retained			Accumulated Other Comprehensive			Non-Controlling
		Shares			Amount			Shares			Amount			Capital			Earnings			Loss			Interests			Total Equity
Balance at March 31, 2023			-			$	-				191,754,292			$	1,918			$	674,179			$	310,315			$	(20,784	)		$	1,187			$	966,815
Net income			-				-				-				-				-				60,850				-				39				60,889
Employee stock purchase plan issuances									76,204				1				1,898													1,899
Stock-based compensation, net of forfeitures and restricted stock vested			-				-				541,288				5				11,037				-				-				-				11,042
Payments of taxes withheld on net settlement of equity awards			-				-				-				-				(12,422	)			-				-				-				(12,422	)
Foreign currency translation adjustment			-				-				-				-				-				-				(414	)			(44	)			(458	)
Balance at June 30, 2023			-			$	-				192,371,784			$	1,924			$	674,692			$	371,165			$	(21,198	)		$	1,182			$	1,027,765

		Preferred Stock			Common Stock			Additional Paid-In			Retained			Accumulated Other Comprehensive			Non-Controlling
		Shares			Amount			Shares			Amount			Capital			Earnings			Loss			Interests			Total Equity
Balance at March 29, 2024			-			$	-				193,164,609			$	1,932			$	694,332			$	463,012			$	(28,841	)		$	1,281			$	1,131,716
Net loss			-				-				-				-				-				(17,675	)			-				62				(17,613	)
Employee stock purchase plan issuances									-				-				-				-				-							-
Stock-based compensation, net of forfeitures and restricted stock vested			-				-				671,969				6				10,092				-				-				-				10,098
Payments of taxes withheld on net settlement of equity awards			-				-				-				-				(11,171	)			-				-				-				(11,171	)
Foreign currency translation adjustment			-				-				-				-				-				-				(3,105	)			(83	)			(3,188	)
Balance at June 28, 2024			-			$	-				193,836,578			$	1,938			$	693,253			$	445,337			$	(31,946	)		$	1,260			$	1,109,842

The accompanying notes are an integral part of these condensed consolidated financial statements.

ALLEGRO MICROSYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

		Three-Month Period Ended
		June 28, 2024			June 30, 2023
Cash flows from operating activities:
Net (loss) income		$	(17,613	)		$	60,889
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization			16,458				14,273
Amortization of deferred financing costs			781				34
Deferred income taxes			(4,999	)			(8,362	)
Stock-based compensation			10,118				11,042
Loss on disposal of assets			14				-
Provisions for inventory and expected credit losses			2,377				5,183
Change in fair value of marketable securities			-				3,651
Changes in operating assets and liabilities:
Trade accounts receivable			55,134				(10,321	)
Inventories			(15,986	)			(27,947	)
Prepaid expenses and other assets			(1,715	)			(10,200	)
Trade accounts payable			200				18,431
Due to and from related parties			3,437				10,102
Accrued expenses and other current and long-term liabilities			(14,010	)			(17,112	)
Net cash provided by operating activities			34,196				49,663
Cash flows from investing activities:
Purchases of property, plant and equipment			(10,977	)			(44,910	)
Sales of marketable securities			-				9,971
Net cash used in investing activities			(10,977	)			(34,939	)
Cash flow from financing activities:
Payment of borrowings under 2023 term loan facility			(50,000	)			-
Finance lease payments			(145	)			-
Receipts on related party notes receivable			938				938
Payments for taxes related to net share settlement of equity awards			(11,171	)			(12,422	)
Proceeds from issuance of common stock under employee stock purchase plan awards			-				1,899
Payments of debt issuance costs			-				(1,450	)
Net cash used in financing activities			(60,378	)			(11,035	)
Effect of exchange rate changes on cash and cash equivalents and restricted cash			(825	)			(73	)
Net (decrease) increase in cash and cash equivalents and restricted cash			(37,984	)			3,616
Cash and cash equivalents and restricted cash at beginning of period			222,161				358,705
Cash and cash equivalents and restricted cash at end of period:		$	184,177			$	362,321

The accompanying notes are an integral part of these condensed consolidated financial statements.

ALLEGRO MICROSYSTEMS, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

(Amounts in thousands, except share and per share amounts)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes and other information included elsewhere in this Quarterly Report, as well as the audited financial statements and the related notes thereto, and the discussion under "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business" included in our Annual Report on Form 10-K for the year ended March 29, 2024, filed with the SEC on May 23, 2024 ( the "2024 Annual Report").

In addition to historical data, this discussion contains forward-looking statements about our business, results of operations, cash flows, financial condition and prospects based on current expectations that involve risks, uncertainties and assumptions. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in the section titled "Forward-Looking Statements" and in Part I, Item 1A. "Risk Factors" of our 2024 Annual Report and Part II, Item 1A. "Risk Factors" of this Quarterly Report. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future.

We operate on a 52- or 53-week fiscal year ending on the last Friday of March. Each fiscal quarter has 13 weeks, except in a 53-week year, when the fourth fiscal quarter has 14 weeks. All references to the three-month periods ended June 28, 2024 and June 30, 2023 relate to the 13-week periods ended June 28, 2024 and June 30, 2023, respectively. All references to "2025," "fiscal year 2025" or similar references relate to the 52-week period ended March 28, 2025. All references to "2024," "fiscal year 2024" or similar references relate to the 52-week period ended March 29, 2024.

Overview

We are a leading global designer, developer, fabless manufacturer and marketer of sensor integrated circuits ("ICs") and application-specific analog power ICs enabling the most critical technologies in the automotive and industrial markets. We are a leading supplier of magnetic sensor IC solutions worldwide based on market share, driven by our market leadership in the automotive market. Our products are foundational to automotive and industrial electronic systems. Our sensor ICs enable our customers to precisely measure motion, speed, position and current, while our power ICs include high-temperature and high-voltage capable motor drivers, power management ICs, light emitting diode driver ICs and isolated gate drivers. We believe that our technology expertise, combined with our deep applications knowledge and strong customer relationships, enable us to develop solutions that provide more value to customers than typical ICs. Compared to a typical IC, our solutions are more integrated, intelligent and sophisticated for complex applications and easier for customers to use.

We are headquartered in Manchester, New Hampshire and have a global footprint across multiple continents. Our portfolio now includes more than 1,000 products, and we ship over 1.5 billion units annually to more than 10,000 customers worldwide. During the three-month period ended June 28, 2024 and June 30, 2023, we generated $166.9 million and $278.3 million in total net sales, respectively, with $(17.6) million and $60.9 million in net (loss) income, respectively.

Business Updates

On July 23, 2024, we entered into a share repurchase agreement with Sanken (the "Share Repurchase Agreement") pursuant to which we agreed to repurchase 38,767,315 shares of our common stock from Sanken in a privately negotiated transaction. Pursuant to the terms of the Share Repurchase Agreement, Sanken has agreed to reimburse us for the expenses incurred in connection with the transactions contemplated by the Share Repurchase Agreement, including a facilitation fee of $35.0 million. On July 29, 2024, we completed the first closing under the Share Repurchase Agreement, repurchasing 28,750,000 shares of our common stock for $621.5 million, which was the public offering price in the Equity Offering that closed on July 26, 2024 (as described below), minus the discount to the underwriters and transaction expenses and fees, including the $35.0 million facilitation fee paid to us as described above (the "First Closing"). We used the net proceeds of the Equity Offering to fund the purchase price payable to Sanken at the First Closing, and the shares repurchased in the First Closing were retired. The repurchase of the remainder of the shares of our common stock that we expect to repurchase from Sanken is expected to occur substantially concurrently with the receipt by us of borrowings under the 2023 Revolving Credit Agreement or, otherwise, on another date of our choosing (the "Second Closing"). We expect to fund the purchase price payable to Sanken at the Second Closing with cash on hand or additional borrowings under the 2023 Revolving Credit Agreement.

On July 26, 2024, we completed an underwritten equity offering of 28,750,000 shares of its common stock at a public offering price of $24.00 per share (the "Equity Offering") resulting in net proceeds to us of approximately $665.9 million, after deducting $24.2 million of underwriting discounts. As described above, Sanken reimbursed us for its offering fees and expenses, including the facilitation fee described above. The Equity Offering completed on July 26, 2024 included the exercise of the underwriters' option to purchase 3,750,000 additional shares of our common stock. As described above, we used the net proceeds of the Equity Offering to complete the First Closing under the Share Repurchase Agreement.

We expect to amend the 2023 Revolving Credit Agreement dated as of June 21, 2023, by and among the Company, Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, and each lender from time to time party thereto to (i) incur new incremental term loans pursuant to the 2023 Term Loan Facility to finance a portion of the repurchase of shares of common stock from Sanken in the Second Closing pursuant to the terms of the Share Repurchase Agreement, (ii) increase the amount of revolving

commitments available under the 2023 Revolving Credit Facility by $32.0 million, (iii) permit under the 2023 Revolving Credit Agreement the repurchase contemplated by the Share Repurchase Agreement with debt proceeds and (iv) make certain other changes.

On July 31, 2024, we announced the allocation of a $400 million term loan tranche (the "Term Loan"), consisting of new term loans incurred, in relevant part, to (i) finance a portion of the repurchase of shares of common stock from Sanken at the Second Closing pursuant to the terms of the Share Repurchase Agreement, (ii) fully refinance our 2023 Term Loan Facility, and (iii) otherwise use for general corporate purposes. The Term Loan is expected to have a maturity date of October 31, 2030 and to bear interest at an annual rate based on the Secured Overnight Financing Rate plus an interest rate margin of 2.25%, which annual rate represents a 0.50% per annum reduction as compared to our 2023 Term Loan Facility. The foregoing transactions are subject to market and other conditions, and there can be no assurance that the incremental term loans under the 2023 Term Loan Facility or the increase to revolving commitments under the 2023 Revolving Credit Facility (or the aforementioned amendments) will be completed on the terms described herein, or at all.

Other Key Factors and Trends Affecting Our Operating Results

Our financial condition and results of operations have been, and will continue to be, affected by numerous other factors and trends, including the following:

Inflation

Inflation rates in the markets in which we operate have increased and may continue to rise. Inflation over the last several quarters has led us to experience higher costs, including higher labor costs, wafer and other costs for materials from suppliers, and transportation and energy costs. Our suppliers have raised their prices and may continue to raise prices, and in the competitive markets in which we operate, we may not be able to make corresponding price increases to preserve our gross margins and profitability. If inflation rates continue to rise or remain elevated for a sustained period of time, they could have a material adverse effect on our business, financial condition, results of operations and liquidity. While we have generally been able to offset increases in these costs through various productivity and cost reduction initiatives, as well as adjusting our selling prices and releasing new products with improved gross margins, our ability to increase our average selling prices depends on market conditions and competitive dynamics. Given the timing of our actions compared to the timing of these inflationary pressures, there may be periods during which we are unable to fully recover the increases in our costs.

Design Wins with New and Existing Customers

Our end customers continually develop new products in existing and new application areas, and we work closely with our significant original equipment manufacturer customers in most of our target markets to understand their product roadmaps and strategies. For new products, the time from design initiation and manufacturing until we generate sales can be lengthy, typically between two and four years. As a result, our future sales are highly dependent on our continued success at winning design mandates from our customers. Further, despite current inflationary conditions, we expect the average sales prices ("ASPs") of our products to decline over time, and we consider design wins to be critical to our future success. We anticipate being increasingly dependent on revenue from newer design wins for our newer products. The selection process is typically lengthy and may require us to incur significant design and development expenditures in pursuit of a design win, with no assurance that our solutions will be selected. As a result, the loss of any key design win or any significant delay in the ramp-up of volume production of the customer's products into which our product is designed could adversely affect our business. In addition, volume production is contingent upon the successful introduction and market acceptance of our customers' end products, which may be affected by several factors beyond our control.

Customer Demand, Orders and Forecasts

Demand for our products is highly dependent on market conditions in the end markets in which our customers operate, which are generally subject to seasonality, cyclicality and competitive conditions. In addition, a substantial portion of our total net sales is derived from sales to customers that purchase large volumes of our products. These customers generally provide periodic forecasts of their requirements. However, these forecasts do not commit such customers to minimum purchases, and customers can revise these forecasts without penalty. In addition, as is customary in the semiconductor industry, customers are generally permitted to cancel orders for our products within a specified period. Cancellation of orders could result in the loss of anticipated sales without allowing us sufficient time to reduce our inventory and operating expenses. In addition, changes in forecasts or the timing of orders from customers expose us to the risks of inventory shortages or excess inventory. We are currently operating in an inflationary environment for our products.

Manufacturing Costs and Product Mix

Gross margin has been, and will continue to be, affected by a variety of factors, including the ASPs of our products, product mix in a given period, material costs, yields, manufacturing costs and efficiencies. We believe the primary driver of gross margin is the ASP negotiated between us and our customers relative to material costs and yields. Our pricing and margins depend on the volumes and the features of the products we produce and sell to our customers. As our products mature and unit volumes increase, despite current price leverage, we expect their ASPs to decline in the long term. We continually monitor and work to reduce the cost of our products and improve the potential value our solutions provide to our customers, as we target new design win opportunities and manage the product

life cycles of our existing customer designs. We also maintain a close relationship with our suppliers and subcontractors to improve quality, increase yields and lower manufacturing costs. As a result, these declines often coincide with improvements in manufacturing yields and lower wafer, assembly, and testing costs, which offset some or all of the margin reduction that results from declining ASPs. However, we expect our gross margin to fluctuate on a quarterly basis as a result of changes in ASPs due to product mix, new product introductions, transitions into volume manufacturing and manufacturing costs. Gross margin generally decreases if production volumes are lower as a result of decreased demand, which leads to a reduced absorption of our fixed manufacturing costs. Gross margin generally increases when the opposite occurs.

Cyclical Nature of the Semiconductor Industry

The semiconductor industry has historically been highly cyclical and is characterized by increasingly rapid technological change, product obsolescence, competitive pricing pressures, evolving standards, short product life cycles in consumer and other rapidly changing markets and fluctuations in product supply and demand. New technology may result in sudden changes in system designs or platform changes that may render some of our products obsolete and require us to devote significant research and development resources to compete effectively. Periods of rapid growth and capacity expansion are occasionally followed by significant market corrections in which sales decline, inventories accumulate, and facilities go underutilized. During periods of expansion, our margins generally improve as fixed costs are spread over higher manufacturing volumes and unit sales. In addition, we may build inventory to meet increasing market demand for our products during these times, which serves to absorb fixed costs further and increase our gross margins. During an expansion cycle, we may increase capital spending and hiring to add to our production capacity. During periods of slower growth or industry contractions, our sales, production and productivity and margins generally decline.

2017 Tax Cuts and Jobs Act

Pursuant to the 2017 Tax Cuts and Jobs Act, beginning in fiscal year 2023, U.S. tax law now requires us to capitalize and amortize domestic and foreign research and development expenditures over five and 15 years, for domestic and foreign research, respectively ("174 Capitalization"). The impact of 174 Capitalization for fiscal year 2025 is an increase in annual cash taxes of approximately $15.8 million and a foreign derived intangible income ("FDII") benefit of $7.7 million. Additionally, the Internal Revenue Service has issued Notice 2024-12 and is expected to issue final guidance which may modify this law or change its impact.

Results of Operations

Three-Month Period Ended June 28, 2024 Compared to Three-Month Period Ended June 30, 2023

The following table summarizes our results of operations and our results of operations as a percentage of total net sales for the three-month periods ended June 28, 2024 and June 30, 2023.

		Three-Month Period Ended			Three-Month Period Ended			Change
		June 28, 2024			As a % of Net Sales			June 30, 2023			As a % of Net Sales			$			%
				(Dollars in thousands)
Net sales		$	166,919				100.0	%		$	278,293				100.0	%		$	(111,374	)			(40.0	)%
Cost of goods sold			92,148				55.2	%			120,343				43.2	%			(28,195	)			(23.4	)%
Gross profit			74,771				44.8	%			157,950				56.8	%			(83,179	)			(52.7	)%
Operating expenses:
Research and development			45,204				27.1	%			42,975				15.4	%			2,229				5.2	%
Selling, general and administrative			40,197				24.1	%			44,229				15.9	%			(4,032	)			(9.1	)%
Total operating expenses			85,401				51.2	%			87,204				31.3	%			(1,803	)			(2.1	)%
Operating (loss) income			(10,630	)			(6.4	)%			70,746				25.4	%			(81,376	)			(115.0	)%
Other income (expense), net:
Interest expense			(5,377	)			(3.2	)%			(769	)			(0.3	)%			(4,608	)			599.2	%
Interest income			494				0.3	%			843				0.3	%			(349	)			(41.4	)%
Other income (expense), net			(1,060	)			(0.6	)%			(2,716	)			(1.0	)%			1,656				(61.0	)%
(Loss) income before income tax provision			(16,573	)			(9.9	)%			68,104				24.5	%			(84,677	)			(124.3	)%
Income tax provision			1,040				0.6	%			7,215				2.6	%			(6,175	)			(85.6	)%
Net (loss) income			(17,613	)			(10.6	)%			60,889				21.9	%			(78,502	)			(128.9	)%
Net income attributable to non-controlling interests			62				0.0	%			39				0.0	%			23				59.0	%
Net (loss) income attributable to Allegro MicroSystems, Inc.		$	(17,675	)			(10.6	)%		$	60,850				21.9	%		$	(78,525	)			(129.0	)%

Total net sales

Total net sales decreased in the three-month period ended June 28, 2024 compared to the three-month period ended June 30, 2023. The decrease was driven by an overall reduction in inventory levels maintained by customers and corresponding decline in shipments across all end markets. The decline in shipments impacted all applications including e-Mobility products, safety comfort and

convenience applications, and broad-based and other industrial applications, including clean energy and automation, data center applications and consumer and smart home products.

Sales Trends by Market

The following table summarizes total net sales by market. The categorization of net sales by market is based on the characteristics of the end product and application into which our product will be designed.

		Three-Month Period Ended			Change
		June 28, 2024			June 30, 2023			Amount			%
		(Dollars in thousands)
Automotive		$	131,184			$	185,430			$	(54,246	)			(29.3	)%
Industrial and other			35,735				92,863				(57,128	)			(61.5	)%
Total net sales		$	166,919			$	278,293			$	(111,374	)			(40.0	)%

Automotive net sales decreased in the three-month period ended June 28, 2024 compared to the three-month period ended June 30, 2023, primarily due to inventory rebalancing with our automotive contract manufacturing customers looking to manage excess supply, as well as mix across all general markets.

Industrial and other net sales decreased in the three-month period ended June 28, 2024 compared to the three-month period ended June 30, 2023, primarily due to a decrease in demand of our broad-based and other industrial applications, in addition to distribution inventory reductions.

Sales Trends by Product

The following table summarizes net sales by product.

		Three-Month Period Ended			Change
		June 28, 2024			June 30, 2023			Amount			%
		(Dollars in thousands)
Power integrated circuits ("PIC")		$	51,810			$	103,988			$	(52,178	)			(50.2	)%
Magnetic sensors ("MS") and other			115,109				174,305				(59,196	)			(34.0	)%
Total net sales		$	166,919			$	278,293			$	(111,374	)			(40.0	)%

The decline in PIC sales was driven by a decrease in demand for our motor products. The decrease in MS and other sales was due to a decline in current and isolator products, as well as our magnetic speed and position sensors.

Sales Trends by Geographic Location

The following table summarizes net sales by geographic location based on ship-to location.

		Three-Month Period Ended			Change
		June 28, 2024			June 30, 2023			Amount			%
		(Dollars in thousands)
Americas:
United States		$	22,267			$	48,824			$	(26,557	)			(54.4	)%
Other Americas			5,224				8,508				(3,284	)			(38.6	)%
EMEA:
Europe			26,906				55,388				(28,482	)			(51.4	)%
Asia:
Japan			40,643				41,580				(937	)			(2.3	)%
Greater China			31,860				62,216				(30,356	)			(48.8	)%
South Korea			21,773				29,513				(7,740	)			(26.2	)%
Other Asia			18,246				32,264				(14,018	)			(43.4	)%
Total net sales		$	166,919			$	278,293			$	(111,374	)			(40.0	)%

Americas net sales decreased in the three-month period ended June 28, 2024 compared to the three-month period ended June 30, 2023, primarily due to the decline in the United States automotive and industrial markets across all applications. In addition, Europe and Other Asia net sales declined in industrial and other markets across all applications, South Korea net sales declined in the automotive industries, primarily safety, comfort and convenience applications, and Greater China net sales declined in automotive markets across all applications which are served through distributors currently managing inventory levels.

Cost of goods sold

Cost of goods sold decreased in the three-month period ended June 28, 2024 compared to the three-month period ended June 30, 2023, primarily due to a reduction in production volume as well as product mix, offset by an increase in amortization of intangible assets in relation to the acquisition of Crocus Technology International Corp. ("Crocus").

Cost of goods sold as a percentage of our total net sales was 55.2% and 43.2% for the three-month period ended June 28, 2024 and June 30, 2023, respectively. The increase was primarily due to the reduction in production volume, as well as product mix noted above.

Gross profit and gross margin

Gross profit decreased in the three-month period ended June 28, 2024 compared to the three-month period ended June 30, 2023, due to the decrease in net sales and product mix noted above.

Gross margin was 44.8% and 56.8% for the three-month period ended June 28, 2024 and June 30, 2023, respectively. The decrease was primarily due to the decline in net sales and product mix noted above.

Research and development expenses

Research and development ("R&D") expenses increased in the three-month period ended June 28, 2024 in comparison to the comparable period in fiscal year 2024, primarily due to a combined increase in personnel costs.

R&D expenses as a percentage of our total net sales was 27.1% and 15.4% for the three-month periods ended June 28, 2024 and June 30, 2023, respectively. The increase was primarily due to the increased costs noted above in addition to the decline in net sales.

Selling, general and administrative expenses

Selling, general and administrative ("SG&A") expenses decreased in the three-month period ended June 28, 2024 compared to the three-month period ended June 30, 2023, primarily due to a decrease in general operating expenses and outside service costs, partially offset by a combined increase in personnel and severance expenses.

SG&A expenses as a percentage of our total net sales was 24.1% and 15.9% in the three-month periods ended June 28, 2024 and June 30, 2023, respectively. The increase as a percentage of total net sales was primarily due to the factors noted above in addition to the decline in net sales.

Interest expense

Interest expense increased in the three-month period ended June 28, 2024 compared to the three-month period ended June 30, 2023, due to higher interest payments on the 2023 Term Loan Facility, which was used to finance the acquisition of Crocus.

Interest income

Interest income decreased in the three-month period ended June 28, 2024 compared to the three-month period ended June 30, 2023, primarily due to lower cash balances.

Other income(expense), net

We recorded a foreign currency loss in both of the three-month periods ended June 28, 2024 and June 30, 2023. The foreign currency loss recorded in the three-month period ended June 28, 2024 was primarily due to realized and unrealized gains from our Philippines location. The foreign currency loss recorded in the three-month period ended June 30, 2023, was primarily due to realized and unrealized losses from our United Kingdom location due to the strengthening of the British Pound.

We also recorded investment income of $0.5 million related to our earnings in our money market fund deposits in the three-month period ended June 28, 2024, compared to unrealized losses of $8.9 million, offset by $5.2 million of realized gains during the three-month period ended June 30, 2023.

Income tax provision

Income tax provision and the effective income tax rate were $1.0 million and (6.3)%, respectively, in the three-month period ended June 28, 2024 and $7.2 million and 10.6%, respectively, in the three-month period ended June 30, 2023. The decline in the effective tax rate ("ETR") year-over-year relates primarily to the change in (Loss) income before income taxes, discrete transactions, and the impact of FDII benefits and research credits; offset by non-deductible stock-based compensation charges.

Liquidity and Capital Resources

As of June 28, 2024, we had $173.1 million of cash and cash equivalents and $384.7 million of working capital, compared to $212.1 million of cash and cash equivalents and $454.3 million of working capital as of March 29, 2024. Working capital is impacted by the timing and extent of our business needs.

We expect to amend the 2023 Revolving Credit Facility as part of the Second Closing under the Share Repurchase Agreement as described above under "Business Updates". However, there can be no assurance that the incremental term loans under the 2023 Term Loan Facility or the increase to revolving commitments under the 2023 Revolving Credit Facility (or the aforementioned amendments) will be completed on the terms described herein, or at all.

Our primary requirements for liquidity and capital resources besides our growth initiatives are working capital, capital expenditures, principal and interest payments on our outstanding debt, and other general corporate needs. Historically, these cash requirements have been met through cash provided by operating activities and cash and cash equivalents. Our current capital deployment strategy for fiscal year 2025 is to utilize cash on hand and capacity under our 2023 Revolving Credit Facility to support our continued growth initiatives into select markets and planned capital expenditures, as well as consider potential acquisitions. As of June 28, 2024, the Company was not party to any off-balance sheet arrangements that have had or are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources. The cash requirements for the upcoming fiscal year relate to our operating leases, operating and capital purchase commitments, and expected contributions to our defined benefit and contribution plans. Additionally, we expect to continue to strategically invest in expanding our operations in China, Europe, Japan and India in order to directly manage and service our customers in these markets, which could result in increases in our total net sales, cost of goods sold and operating expenses. For information regarding the Company's expected cash requirements and timing of payments related to leases, noncancellable purchase commitments and pension and defined contribution plans, see Note 12, "Leases," Note 16, "Commitments and Contingencies" and Note 15, "Retirement Plans" to the audited consolidated financial statements in the Company's 2024 Annual Report.

We believe that our existing cash will be sufficient to finance our continued operations, growth strategy, planned capital expenditures and the additional expenses that we expect to incur during the next 12 months. In order to support and achieve our future growth plans, we may need or advantageously seek to obtain additional funding through equity or debt financing. We believe that our current operating structure will facilitate sufficient cash flows from operations to satisfy our expected long-term liquidity requirements beyond the next 12 months. If these resources are not sufficient to satisfy our liquidity requirements due to changes in circumstances, we may be required to borrow under our 2023 Revolving Credit Facility or seek additional financing. If we raise additional funds by issuing equity securities that are not used to repurchase existing shares outstanding, our stockholders will experience dilution. Debt financing, if available, may contain covenants that significantly restrict our operations or our ability to obtain additional debt financing in the future. Any additional financing that we raise may contain terms that are not favorable to us or our stockholders. We cannot assure you that we would be able to obtain additional financing on terms favorable to us or our existing stockholders, or at all.

Cash Flows from Operating, Investing and Financing Activities

The following table summarizes our cash flows for the three-month periods ended June 28, 2024 and June 30, 2023:

		Three-Month Period Ended
		June 28, 2024			June 30, 2023
		(dollars in thousands)
Net cash provided by operating activities		$	34,196			$	49,663
Net cash used in investing activities			(10,977	)			(34,939	)
Net cash used in financing activities			(60,378	)			(11,035	)
Effect of exchange rate changes on cash and cash equivalents and restricted cash			(825	)			(73	)
Net (decrease) increase in cash and cash equivalents and restricted cash		$	(37,984	)		$	3,616

Operating Activities

Net cash provided by operating activities was $34.2 million in the three-month period ended June 28, 2024, resulting primarily from net loss of $17.6 million and noncash charges of $24.7 million, partially offset by a net increase in cash from a decrease in net operating assets and liabilities of $27.1 million. The net decrease in operating assets and liabilities consisted of a $55.1 million decrease in trade accounts receivable, net, a $16.0 million increase in inventories, a $14.0 million decrease in accrued expenses and other current and long-term liabilities, and a $1.7 million increase in prepaid expenses and other assets, partially offset by a $3.4 million increase in net amounts due to related party and a $0.2 million increase in trade accounts payable. The increase in inventories was primarily the result of inventory builds to support anticipated sales growth for the remainder of fiscal year 2025. The decrease in accrued expenses and other current and long-term liabilities was primarily the result of a reduction in accrued personnel costs due to the timing of payments pursuant to our annual incentive compensation plan. The increase in prepaid expenses and other assets was mostly due to higher long-term deposits and the timing of tax payments. The decrease in trade accounts receivable, net was primarily a result of decreased sales year-over-year. Trade accounts payable decreased primarily due to the timing of payments to suppliers and vendors, including unpaid

capital expenditures of $5.5 million. The increase in net amounts due to related parties was primarily due to variations in the timing of such payments in the ordinary course of business.

Net cash provided by operating activities was $49.7 million in the three-month period ended June 30, 2023, resulting primarily from net income of $60.9 million and noncash charges of $25.8 million, partially offset by a net decrease in cash from an increase in net operating assets and liabilities of $37.0 million. The net increase in operating assets and liabilities consisted of a $27.9 million increase in inventories, a $10.2 million increase in prepaid expenses and other assets, a $17.1 million decrease in accrued expenses and other current and long-term liabilities, and a $10.3 million increase in trade accounts receivable, net, partially offset by a $18.4 million increase in trade accounts payable, and a $10.1 million increase in net amounts due from related parties. The increase in inventories was primarily the result of inventory builds to support anticipated sales growth for the remainder of fiscal year 2024. The increase in prepaid expenses and other assets were mostly due to higher long-term deposits and the timing of tax payments, including value-added taxes receivable, insurance and contract costs. The decrease in accrued expenses and other current and long-term liabilities was primarily the result of a reduction in accrued personnel costs due to timing of payments pursuant to our annual incentive compensation plan. The increase in trade accounts receivable, net, was primarily a result of increased sales year-over-year, as well as timing of receipts. Accounts payable increased primarily due to the timing of payments to suppliers and vendors, partially offset by higher operating purchases, including unpaid capital expenditures of $11.7 million. The increase in net amounts due to related parties was primarily due to variations in the timing of such payments in the ordinary course of business.

Investing Activities

Net cash used in investing activities was $11.0 million in the three-month period ended June 28, 2024, consisting of purchases of property, plant and equipment.

Net cash used in investing activities was $34.9 million in the three-month period ended June 30, 2023, consisting of purchases of property, plant and equipment of $44.9 million and proceeds from the sale of marketable securities of $10.0 million.

Financing Activities

Net cash used in financing activities was $60.4 million in the three-month period ended June 28, 2024, consisting of a $50.0 million payment on our 2023 Term Loan Facility and $11.2 million of taxes related to the net settlement of equity awards.

Net cash used in financing activities was $11.0 million in the three-month period ended June 30, 2023, primarily consisting of taxes related to the net settlement of equity awards and payments of debt issuance costs in connection with the 2023 Revolving Credit Facility, partially offset by proceeds received in connection with the issuance of common stock under our employee stock purchase plan.

Debt Obligations

See Note 9, "Debt and Other Borrowings" in the unaudited condensed consolidated financial statements included in this Quarterly Report for information regarding our debt obligations.

Recent Accounting Pronouncements

See Note 2, "Summary of Significant Accounting Policies" in the unaudited condensed consolidated financial statements included in this Quarterly Report for a full description of recent accounting pronouncements, including the respective dates of adoption or expected adoption and effects on our condensed consolidated financial statements contained in Item 1 of this Quarterly Report.

Critical Accounting Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosures of contingencies at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Our significant accounting policies are described in Note 2, "Summary of Significant Accounting Policies" to our consolidated financial statements included in our 2024 Annual Report. There have been no material changes in our critical accounting policies and estimates since March 29, 2024.

Item 3. Quantitative and QualitativeDisclosures About Market Risk.

There have not been any material changes in our exposures to market risk since March 29, 2024. For details on the Company's interest rate, foreign currency exchange rate, and inflation risks, see Part I, Item 7A. "Quantitative and Qualitative Information About Market Risks" in our 2024 Annual Report.

Item 4. Controls and Procedures.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively), evaluated the effectiveness of our disclosure controls and procedures as of June 28, 2024. Based on the evaluation of our disclosure controls and procedures as of June 28, 2024, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act) that occurred during the period covered by this Quarterly Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II-OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may be involved in claims, regulatory examinations or investigations and proceedings arising in the ordinary course of our business. The outcome of any such claims or proceedings, regardless of the merits, and the Company's ultimate liability, if any, is inherently uncertain. We are not currently party to any material legal proceedings, and we are not aware of any pending or threatened legal proceeding against us that we believe could have a material adverse effect on our business, operating results, cash flows or financial condition.

Item 1A. Risk Factors.

Various risk factors associated with our business are included in our Annual Report, as filed with the SEC on May 23, 2024, as supplemented by the risk factors included in the "Risk Factors" section of our Prospectus on Form S-3ASR dated July 23, 2024 and Prospectus Supplement on Form 424B5 dated July 23, 2024, which are available at www.sec.gov. There have been no material changes to those risk factors previously disclosed in our Annual Report, Prospectus and Prospectus Supplement.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 5. OtherInformation.

During the three-month period ended June 28, 2024, no director or officer of the Company adoptedor terminateda "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" as each term is defined in Item 408(a) or Regulation S-K.

Item 6. Exhibits

(a) Exhibits

Exhibit No.		Description of Exhibit
10.1*		Sale and Subscription Agreement by and among Allegro MicroSystems, Inc., Sanken Electric Co., Ltd., Polar Semiconductor, LLC, and PS Investment Aggregator, L.P., dated as of April 25, 2024.†^
31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification of Principal 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 with Embedded Linkbases Document.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101 filed herewith).

* Filed herewith.

** Furnished herewith.

† Certain annexes and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company will furnish the omitted annexes and schedules to the Securities and Exchange Commission upon request.

^ Portions of this exhibit (indicated by "[XXX]") have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K under the Securities Act of 1933, as amended, because they are both (i) not material and (ii) the type of information that the Company customarily and actually treats as private and confidential.

SIGNATURES

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.

		ALLEGRO MICROSYSTEMS, INC.
Date: August 2, 2024		By:	/s/ Vineet Nargolwala
			Vineet Nargolwala
			President and Chief Executive Officer (principal executive officer)
Date: August 2, 2024		By:	/s/ Derek P. D'Antilio
			Derek P. D'Antilio
			Executive Vice President, Chief Financial Officer and Treasurer (principal financial officer)