Financial News

Ichor Holdings, Ltd. Announces Third Quarter 2023 Financial Results

Ichor Holdings, Ltd. (NASDAQ: ICHR), a leader in the design, engineering, and manufacturing of critical fluid delivery subsystems and components for semiconductor capital equipment, today announced third quarter 2023 financial results.

Third quarter 2023 highlights:

  • Revenues of $197 million, at the upper end of the guidance range communicated in August;
  • Gross margin of 12.2% on a GAAP basis and 13.1% on a non‑GAAP basis; and
  • Earnings per share of $(0.36) on a GAAP basis and $0.07 on a non-GAAP basis.

"As expected, in Q3 Ichor's revenues returned to sequential growth, and rebounded near the upper end of our guidance range with a 6% increase compared to Q2," commented Jeff Andreson, chief executive officer. "With a similar level of revenues expected again for Q4, our full year expectations are consistent with our forecasts communicated throughout the year. We continue to be focused on maintaining critical R&D investments to enable our technology roadmap, which includes developing proprietary, higher-margin new products and winning evaluation programs that will help drive revenue outperformance and strong operating leverage as our revenues rebound in the coming quarters and years."

 

Q3 2023

 

Q2 2023

 

Q3 2022

 

(dollars in thousands, except per share amounts)

U.S. GAAP Financial Results:

 

 

 

 

 

Net sales

$

196,761

 

 

$

185,008

 

 

$

355,643

 

Gross margin

 

12.2

%

 

 

13.9

%

 

 

17.9

%

Operating margin

 

(2.5

)%

 

 

(1.6

)%

 

 

9.2

%

Net income (loss)

$

(10,425

)

 

$

(20,656

)

 

$

29,031

 

Diluted EPS

$

(0.36

)

 

$

(0.71

)

 

$

1.00

 

 

Q3 2023

 

Q2 2023

 

Q3 2022

 

(dollars in thousands, except per share amounts)

Non-GAAP Financial Results:

 

 

 

 

 

Gross margin

 

13.1

%

 

 

14.5

%

 

 

18.0

%

Operating margin

 

2.2

%

 

 

2.9

%

 

 

11.6

%

Net income

$

2,097

 

 

$

707

 

 

$

35,354

 

Diluted EPS

$

0.07

 

 

$

0.02

 

 

$

1.22

 

U.S. GAAP Financial Results Overview

For the third quarter of 2023, revenue was $196.8 million, net loss was $(10.4) million, and net loss per basic and diluted share (“diluted EPS”) was $(0.36). This compares to revenue of $185.0 million and $355.6 million, net income (loss) of $(20.7) million and $29.0 million, and diluted EPS of $(0.71) and $1.00, for the second quarter of 2023 and third quarter of 2022, respectively.

Non-GAAP Financial Results Overview

For the third quarter of 2023, non-GAAP net income was $2.1 million and non-GAAP diluted EPS was $0.07. This compares to non-GAAP net income of $0.7 million and $35.4 million, and non-GAAP diluted EPS of $0.02 and $1.22, for the second quarter of 2023 and third quarter of 2022, respectively.

Fourth Quarter 2023 Financial Outlook

For the fourth quarter of 2023, we expect revenue to be in the range of $190.0 million to $205.0 million. We expect GAAP diluted EPS to be in the range of $(0.30) to $(0.20) and non-GAAP diluted EPS to be in the range of $(0.03) to $0.17.

This outlook for non‑GAAP diluted EPS excludes amortization of intangible assets of approximately $3.2 million and share-based compensation expense of approximately $4.7 million, as well as the related income tax effects. Non-GAAP diluted EPS should be considered in addition to, but not as a substitute for, our financial information presented in accordance with GAAP.

Balance Sheet and Cash Flow Results

We ended the third quarter of 2023 with cash and cash equivalents of $75.9 million, a decrease of $8.7 million from the prior quarter and a decrease of $10.5 million from the prior year ended December 30, 2022. The decrease of $8.7 million during the third quarter was primarily due to net payments on our credit facilities of $11.9 million and capital expenditures of $2.4 million, partially offset by net cash provided by operating activities of $4.0 million. The decrease during the nine months ended September 29, 2023 was primarily due to net payments on our credit facilities of $20.6 million and capital expenditures of $13.2 million, partially offset by net cash provided by operating activities of $20.1 million.

Our cash provided by operating activities of $20.1 million during the nine months ended September 29, 2023 consisted of net loss of $31.1 million, offset by net non-cash charges of $48.4 million, consisting primarily of depreciation and amortization of $26.0 million, share-based compensation expense of $12.7 million, and deferred income taxes of $9.4 million, and a decrease in our net operating assets and liabilities of $2.7 million. Deferred taxes consists primarily of an $11.1 million charge related to a valuation allowance recorded against our U.S. federal and state deferred tax assets in the second quarter of 2023.

The decrease in our net operating assets and liabilities of $2.7 million during the nine months ended September 29, 2023 was primarily due to a decrease in accounts receivable and inventories of $33.0 million and $16.8 million, respectively, partially offset by a decrease in accounts payable and accrued and other liabilities of $34.8 million and $20.9 million, respectively.

Use of Non-GAAP Financial Results

In addition to U.S. GAAP results, this press release also contains non-GAAP financial results, including non‑GAAP gross profit, non‑GAAP operating income, non‑GAAP net income, non‑GAAP diluted EPS, and free cash flow. Management uses certain non-GAAP metrics to evaluate our operating and financial results. We believe the presentation of non-GAAP results is useful to investors for analyzing business trends and comparing performance to prior periods, along with enhancing investors’ ability to view our results from management’s perspective. Non-GAAP gross profit, operating income, and net income are defined as: gross profit, operating income (loss), or net income (loss), respectively, excluding (1) amortization of intangible assets, share-based compensation expense, and discrete or infrequent charges and gains that are outside of normal business operations, including acquisition-related costs, contract and legal settlement gains and losses, facility shutdown costs, and severance costs associated with reduction-in-force programs, to the extent they are present in gross profit, operating income (loss), and net income (loss), respectively; and (2) the tax impacts associated with these non-GAAP adjustments, as well as non-recurring discrete tax items, including the impact of deferred tax asset valuation allowances. All non-GAAP adjustments are presented on a gross basis; the related income tax effects, including current and deferred income tax expense, are included in the adjustment line under the heading "Tax adjustments related to non-GAAP adjustments". Non-GAAP diluted EPS is defined as non-GAAP net income divided by weighted average diluted ordinary shares outstanding during the period. Non-GAAP gross margin and non-GAAP operating margin are defined as non-GAAP gross profit and non-GAAP operating income, respectively, divided by net sales. Free cash flow is defined as cash provided by or used in operating activities, less capital expenditures. Tables showing these metrics on a GAAP and non-GAAP basis, with reconciliation footnotes thereto, are included at the end of this press release.

Non-GAAP results have limitations as an analytical tool, and you should not consider them in isolation or as a substitute for our results reported under GAAP. Other companies may calculate non-GAAP results differently or may use other measures to evaluate their performance, both of which could reduce the usefulness of our non-GAAP results as a tool for comparison.

Because of these limitations, you should consider non-GAAP results alongside other financial performance measures and results presented in accordance with GAAP. In addition, in evaluating non-GAAP results, you should be aware that in the future we will incur expenses such as those that are the subject of adjustments in deriving non-GAAP results and you should not infer from our presentation of non-GAAP results that our future results will not be affected by these expenses or other discrete or infrequent charges and gains that are outside of normal business operations.

Conference Call

We will conduct a conference call to discuss our third quarter 2023 results and business outlook today at 1:30 p.m. PT.

To listen to a live webcast of the call, please visit our investor relations website at https://ir.ichorsystems.com, or go to the live link at https://www.webcast-eqs.com/register/ichor110623/en. To listen via telephone, please call (877) 407‑0989 (domestic) or +1 (201) 389‑0921 (international), conference ID: 13741625. After the call, an on-demand replay will be available at the same webcast link.

About Ichor

We are a leader in the design, engineering, and manufacturing of critical fluid delivery subsystems and components primarily for semiconductor capital equipment, as well as other industries such as defense/aerospace and medical. Our primary product offerings include gas and chemical delivery subsystems, collectively known as fluid delivery subsystems, which are key elements of the process tools used in the manufacturing of semiconductor devices. Our gas delivery subsystems deliver, monitor and control precise quantities of the specialized gases used in semiconductor manufacturing processes such as etch and deposition. Our chemical delivery subsystems precisely blend and dispense the reactive liquid chemistries used in semiconductor manufacturing processes such as chemical-mechanical planarization, electroplating, and cleaning. We also provide precision-machined components, weldments, e-beam and laser welded components, precision vacuum and hydrogen brazing, surface treatment technologies, and other proprietary products. We are headquartered in Fremont, CA. https://ir.ichorsystems.com.

We use a 52- or 53-week fiscal year ending on the last Friday in December. Our fiscal years ended December 29, 2023 and December 30, 2022 are each 52 weeks. References to 2023 and 2022 relate to the fiscal years then ended. The three-month periods ended September 29, 2023, June 30, 2023, and September 30, 2022 were each 13 weeks. References to the third quarter of 2023, second quarter of 2023, and third quarter of 2022 relate to the three-month periods then ended.

Safe Harbor Statement

Certain statements in this release are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "guidance," "expects," "intends," “may,” “will,” "projects," "plans," “predicts,” "believes," “could,” "estimates," "targets," "anticipates," “look forward,” and similar expressions are used to identify these forward-looking statements.

Examples of forward-looking statements include, but are not limited to, statements regarding financial results for our fourth fiscal quarter of 2023, statements regarding the impacts of current macroeconomic conditions, U.S. export restrictions on semiconductor-related goods and services, materials or component shortages from suppliers, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on current expectations and assumptions, which may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements, including: (1) geopolitical, economic and market conditions, including heightened inflation, slower growth or recession, changes to fiscal and monetary policy, higher interest rates, currency fluctuations, challenges in the supply chain and any disruptions in European economies as a result of the conflict in Ukraine, (2) dependence on expenditures by manufacturers and cyclical downturns in the semiconductor capital equipment industry, (3) reliance on a very small number of original equipment manufacturers for a significant portion of sales, (4) negotiating leverage held by our customers, (5) competitiveness and rapid evolution of the industries in which we participate, (6) risks associated with weakness in the global economy and geopolitical instability, (7) keeping pace with developments in the industries we serve and with technological innovation generally, (8) designing, developing and introducing new products that are accepted by original equipment manufacturers in order to retain our existing customers and obtain new customers, (9) managing our manufacturing and procurement process effectively, (10) defects in our products that could damage our reputation, decrease market acceptance and result in potentially costly litigation, (11) dependence on a limited number of suppliers, and (12) the impact of the COVID‑19 pandemic, any related or unrelated public health threat or fear of such event on economic activity, us and our customers, suppliers, employees, and other business relations, including, but not limited to, demand for our products, workforce availability, and costs to manufacture our products. Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission (the “SEC”), including other risks, relevant factors, and uncertainties identified in the "Risk Factors" section of our Annual Report on Form 10‑K for the year ended December 30, 2022 and any other periodic reports that we may file with the SEC.

All forward-looking statements in this press release are based upon information available to us as of the date hereof, and qualified in their entirety by this cautionary statement. We undertake no obligation to update or revise any forward-looking statements contained herein, whether as a result of actual results, changes in our expectations, future events or developments, or otherwise, except as required by law.

ICHOR HOLDINGS, LTD.

Consolidated Balance Sheets

(in thousands, except share and per share amounts)

(unaudited)

 

 

September 29,

2023

 

June 30,

2023

 

December 30,

2022

 

September 30,

2022

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

$

75,933

 

 

$

84,608

 

 

$

86,470

 

 

$

56,463

 

Accounts receivable, net

 

103,350

 

 

 

95,760

 

 

 

136,321

 

 

 

183,297

 

Inventories

 

266,900

 

 

 

266,190

 

 

 

283,660

 

 

 

290,658

 

Prepaid expenses and other current assets

 

5,142

 

 

 

5,507

 

 

 

7,007

 

 

 

5,164

 

Total current assets

 

451,325

 

 

 

452,065

 

 

 

513,458

 

 

 

535,582

 

Property and equipment, net

 

96,240

 

 

 

98,914

 

 

 

98,055

 

 

 

95,577

 

Operating lease right-of-use assets

 

36,948

 

 

 

39,184

 

 

 

40,557

 

 

 

35,723

 

Other noncurrent assets

 

12,079

 

 

 

12,422

 

 

 

12,926

 

 

 

13,349

 

Deferred tax assets, net

 

1,934

 

 

 

1,273

 

 

 

11,322

 

 

 

11,138

 

Intangible assets, net

 

60,456

 

 

 

64,096

 

 

 

72,022

 

 

 

75,964

 

Goodwill

 

335,402

 

 

 

335,402

 

 

 

335,402

 

 

 

335,402

 

Total assets

$

994,384

 

 

$

1,003,356

 

 

$

1,083,742

 

 

$

1,102,735

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

$

74,011

 

 

$

63,868

 

 

$

110,165

 

 

$

141,914

 

Accrued liabilities

 

16,176

 

 

 

16,753

 

 

 

23,616

 

 

 

26,363

 

Other current liabilities

 

8,588

 

 

 

8,783

 

 

 

15,815

 

 

 

21,224

 

Current portion of long-term debt

 

7,500

 

 

 

7,500

 

 

 

7,500

 

 

 

7,500

 

Current portion of lease liabilities

 

9,393

 

 

 

9,500

 

 

 

9,196

 

 

 

8,062

 

Total current liabilities

 

115,668

 

 

 

106,404

 

 

 

166,292

 

 

 

205,063

 

Long-term debt, less current portion, net

 

272,942

 

 

 

284,701

 

 

 

293,218

 

 

 

294,977

 

Lease liabilities, less current portion

 

28,556

 

 

 

30,570

 

 

 

31,828

 

 

 

28,103

 

Deferred tax liabilities, net

 

29

 

 

 

29

 

 

 

29

 

 

 

38

 

Other non-current liabilities

 

4,510

 

 

 

4,349

 

 

 

4,879

 

 

 

4,709

 

Total liabilities

 

421,705

 

 

 

426,053

 

 

 

496,246

 

 

 

532,890

 

Shareholders’ equity:

 

 

 

 

 

 

 

Preferred shares ($0.0001 par value; 20,000,000 shares authorized; zero shares issued and outstanding)

 

 

 

 

 

 

 

 

 

 

 

Ordinary shares ($0.0001 par value; 200,000,000 shares authorized; 29,375,388, 29,241,561, 28,861,949, and 28,801,274 shares outstanding, respectively; 33,812,827, 33,679,000, 33,299,388, and 33,238,713 shares issued, respectively)

 

3

 

 

 

3

 

 

 

3

 

 

 

3

 

Additional paid in capital

 

447,684

 

 

 

441,883

 

 

 

431,415

 

 

 

427,961

 

Treasury shares at cost (4,437,439 shares)

 

(91,578

)

 

 

(91,578

)

 

 

(91,578

)

 

 

(91,578

)

Retained earnings

 

216,570

 

 

 

226,995

 

 

 

247,656

 

 

 

233,459

 

Total shareholders’ equity

 

572,679

 

 

 

577,303

 

 

 

587,496

 

 

 

569,845

 

Total liabilities and shareholders’ equity

$

994,384

 

 

$

1,003,356

 

 

$

1,083,742

 

 

$

1,102,735

 

 

ICHOR HOLDINGS, LTD.

Consolidated Statement of Operations

(in thousands, except share and per share amounts)

(unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

September 29,

2023

 

June 30,

2023

 

September 30,

2022

 

September 29,

2023

 

September 30,

2022

Net sales

$

196,761

 

 

$

185,008

 

 

$

355,643

 

 

$

607,639

 

 

$

978,349

 

Cost of sales

 

172,692

 

 

 

159,266

 

 

 

292,083

 

 

 

524,588

 

 

 

815,396

 

Gross profit

 

24,069

 

 

 

25,742

 

 

 

63,560

 

 

 

83,051

 

 

 

162,953

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

5,188

 

 

 

5,188

 

 

 

4,859

 

 

 

14,689

 

 

 

14,617

 

Selling, general, and administrative

 

20,066

 

 

 

19,500

 

 

 

22,195

 

 

 

59,733

 

 

 

66,565

 

Amortization of intangible assets

 

3,639

 

 

 

3,960

 

 

 

3,959

 

 

 

11,565

 

 

 

13,963

 

Total operating expenses

 

28,893

 

 

 

28,648

 

 

 

31,013

 

 

 

85,987

 

 

 

95,145

 

Operating income (loss)

 

(4,824

)

 

 

(2,906

)

 

 

32,547

 

 

 

(2,936

)

 

 

67,808

 

Interest expense, net

 

5,136

 

 

 

5,030

 

 

 

3,249

 

 

 

14,716

 

 

 

6,844

 

Other expense (income), net

 

29

 

 

 

100

 

 

 

(210

)

 

 

913

 

 

 

(674

)

Income (loss) before income taxes

 

(9,989

)

 

 

(8,036

)

 

 

29,508

 

 

 

(18,565

)

 

 

61,638

 

Income tax expense

 

436

 

 

 

12,620

 

 

 

477

 

 

 

12,521

 

 

 

3,031

 

Net income (loss)

$

(10,425

)

 

$

(20,656

)

 

$

29,031

 

 

$

(31,086

)

 

$

58,607

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

Basic

$

(0.36

)

 

$

(0.71

)

 

$

1.01

 

 

$

(1.07

)

 

$

2.04

 

Diluted

$

(0.36

)

 

$

(0.71

)

 

$

1.00

 

 

$

(1.07

)

 

$

2.02

 

Shares used to compute net income (loss) per share:

 

 

 

 

 

 

 

 

 

Basic

 

29,297,347

 

 

 

29,116,413

 

 

 

28,769,135

 

 

 

29,132,879

 

 

 

28,675,898

 

Diluted

 

29,297,347

 

 

 

29,116,413

 

 

 

29,050,396

 

 

 

29,132,879

 

 

 

28,965,834

 

 

ICHOR HOLDINGS, LTD.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

September 29,

2023

 

June 30,

2023

 

September 30,

2022

 

September 29,

2023

 

September 30,

2022

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net income (loss)

$

(10,425

)

 

$

(20,656

)

 

$

29,031

 

 

$

(31,086

)

 

$

58,607

 

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

8,891

 

 

 

8,656

 

 

 

8,349

 

 

 

26,036

 

 

 

26,743

 

Share-based compensation

 

4,752

 

 

 

4,277

 

 

 

3,719

 

 

 

12,666

 

 

 

10,125

 

Deferred income taxes

 

(661

)

 

 

11,072

 

 

 

(1,891

)

 

 

9,388

 

 

 

(3,022

)

Amortization of debt issuance costs

 

116

 

 

 

117

 

 

 

116

 

 

 

349

 

 

 

349

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

(7,590

)

 

 

26,933

 

 

 

(24,894

)

 

 

32,971

 

 

 

(40,307

)

Inventories

 

(710

)

 

 

5,348

 

 

 

(331

)

 

 

16,760

 

 

 

(54,525

)

Prepaid expenses and other assets

 

2,624

 

 

 

3,281

 

 

 

1,570

 

 

 

8,610

 

 

 

4,031

 

Accounts payable

 

10,291

 

 

 

(2,029

)

 

 

(6,055

)

 

 

(34,756

)

 

 

(18,508

)

Accrued liabilities

 

(1,145

)

 

 

(4,164

)

 

 

4,237

 

 

 

(7,106

)

 

 

6,823

 

Other liabilities

 

(2,155

)

 

 

(5,892

)

 

 

5,723

 

 

 

(13,774

)

 

 

2,363

 

Net cash provided by (used in) operating activities

 

3,988

 

 

 

26,943

 

 

 

19,574

 

 

 

20,058

 

 

 

(7,321

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Capital expenditures

 

(2,405

)

 

 

(4,015

)

 

 

(8,045

)

 

 

(13,239

)

 

 

(22,458

)

Cash paid for acquisitions, net of cash acquired

 

 

 

 

 

 

 

500

 

 

 

 

 

 

500

 

Net cash used in investing activities

 

(2,405

)

 

 

(4,015

)

 

 

(7,545

)

 

 

(13,239

)

 

 

(21,958

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Issuance of ordinary shares under share-based compensation plans

 

2,170

 

 

 

1,355

 

 

 

1,126

 

 

 

6,151

 

 

 

3,093

 

Employees' taxes paid upon vesting of restricted share units

 

(553

)

 

 

(1,637

)

 

 

(881

)

 

 

(2,882

)

 

 

(2,221

)

Borrowings on revolving credit facility

 

 

 

 

 

 

 

 

 

 

 

 

 

25,000

 

Repayments on revolving credit facility

 

(10,000

)

 

 

(5,000

)

 

 

 

 

 

(15,000

)

 

 

(10,000

)

Repayments on term loan

 

(1,875

)

 

 

(1,875

)

 

 

(1,875

)

 

 

(5,625

)

 

 

(5,625

)

Net cash provided by (used in) financing activities

 

(10,258

)

 

 

(7,157

)

 

 

(1,630

)

 

 

(17,356

)

 

 

10,247

 

Net increase (decrease) in cash

 

(8,675

)

 

 

15,771

 

 

 

10,399

 

 

 

(10,537

)

 

 

(19,032

)

Cash at beginning of period

 

84,608

 

 

 

68,837

 

 

 

46,064

 

 

 

86,470

 

 

 

75,495

 

Cash at end of period

$

75,933

 

 

$

84,608

 

 

$

56,463

 

 

$

75,933

 

 

$

56,463

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

 

Cash paid during the period for interest

$

5,281

 

 

$

5,106

 

 

$

3,162

 

 

$

15,132

 

 

$

6,457

 

Cash paid during the period for taxes, net of refunds

$

512

 

 

$

3,236

 

 

$

836

 

 

$

3,852

 

 

$

2,335

 

Supplemental disclosures of non-cash activities:

 

 

 

 

 

 

 

 

 

Capital expenditures included in accounts payable

$

145

 

 

$

293

 

 

$

1,625

 

 

$

145

 

 

$

1,625

 

Right-of-use assets obtained in exchange for new operating lease liabilities, including those acquired through acquisitions

$

 

 

$

842

 

 

$

1,571

 

 

$

3,103

 

 

$

11,158

 

 

ICHOR HOLDINGS, LTD.

Reconciliation of U.S. GAAP Gross Profit to Non-GAAP Gross Profit

(dollars in thousands)

(unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

September 29,

2023

 

June 30,

2023

 

September 30,

2022

 

September 29,

2023

 

September 30,

2022

U.S. GAAP gross profit

$

24,069

 

 

$

25,742

 

 

$

63,560

 

 

$

83,051

 

 

$

162,953

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

Share-based compensation

 

840

 

 

 

1,091

 

 

 

553

 

 

 

2,352

 

 

 

1,555

 

Fair value adjustment to inventory from acquisitions (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

2,492

 

Other (2)

 

774

 

 

 

 

 

 

 

 

 

2,061

 

 

 

 

Non-GAAP gross profit

$

25,683

 

 

$

26,833

 

 

$

64,113

 

 

$

87,464

 

 

$

167,000

 

U.S. GAAP gross margin

 

12.2

%

 

 

13.9

%

 

 

17.9

%

 

 

13.7

%

 

 

16.7

%

Non-GAAP gross margin

 

13.1

%

 

 

14.5

%

 

 

18.0

%

 

 

14.4

%

 

 

17.1

%

(1)

 

As part of the purchase price allocation of our acquisition of IMG Companies, LLC (“IMG”) in November 2021, we recorded acquired-inventories at fair value, resulting in a fair value step-up. This amount represents the release of the step-up to cost of sales as acquired-inventories were sold.

(2)

 

Included in this amount are severance costs associated with our global reduction-in-force programs.

 

ICHOR HOLDINGS, LTD.

Reconciliation of U.S. GAAP Operating Income (Loss) to Non-GAAP Operating Income

(dollars in thousands)

(unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

September 29,

2023

 

June 30,

2023

 

September 30,

2022

 

September 29,

2023

 

September 30,

2022

U.S. GAAP operating income (loss)

$

(4,824

)

 

$

(2,906

)

 

$

32,547

 

 

$

(2,936

)

 

$

67,808

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

3,639

 

 

 

3,960

 

 

 

3,959

 

 

 

11,565

 

 

 

13,963

 

Share-based compensation

 

4,752

 

 

 

4,277

 

 

 

3,719

 

 

 

12,666

 

 

 

10,125

 

Settlement loss (1)

 

 

 

 

 

 

 

1,046

 

 

 

 

 

 

4,146

 

Fair value adjustment to inventory from acquisitions (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

2,492

 

Acquisition costs (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

296

 

Other (4)

 

793

 

 

 

 

 

 

 

 

 

2,117

 

 

 

 

Non-GAAP operating income

$

4,360

 

 

$

5,331

 

 

$

41,271

 

 

$

23,412

 

 

$

98,830

 

U.S. GAAP operating margin

 

(2.5

)%

 

 

(1.6

)%

 

 

9.2

%

 

 

(0.5

)%

 

 

6.9

%

Non-GAAP operating margin

 

2.2

%

 

 

2.9

%

 

 

11.6

%

 

 

3.9

%

 

 

10.1

%

(1)

 

During the first and third quarters of 2022, we recorded non-recurring loss accruals of $3.1 million and $1.0 million, respectively, relating to expected settlements of employment-related legal matters.

(2)

 

As part of the purchase price allocation of our acquisition of IMG, we recorded acquired-inventories at fair value, resulting in a fair value step-up. This amount represents the release of the step-up to cost of sales as acquired-inventories were sold.

(3)

 

Included in this amount are transaction-related costs incurred in connection with our acquisition of IMG.

(4)

 

Included in this amount are severance costs associated with our global reduction-in-force programs.

 

ICHOR HOLDINGS, LTD.

Reconciliation of U.S. GAAP Net Income (Loss) to Non-GAAP Net Income

(in thousands, except share and per share amounts)

(unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

September 29,

2023

 

June 30,

2023

 

September 30,

2022

 

September 29,

2023

 

September 30,

2022

U.S. GAAP net income (loss)

$

(10,425

)

 

$

(20,656

)

 

$

29,031

 

 

$

(31,086

)

 

$

58,607

 

Non-GAAP adjustments (1):

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

3,639

 

 

 

3,960

 

 

 

3,959

 

 

 

11,565

 

 

 

13,963

 

Share-based compensation

 

4,752

 

 

 

4,277

 

 

 

3,719

 

 

 

12,666

 

 

 

10,125

 

Settlement loss (2)

 

 

 

 

 

 

 

1,046

 

 

 

 

 

 

4,146

 

Fair value adjustment to inventory from acquisitions (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

2,492

 

Acquisition costs (4)

 

 

 

 

 

 

 

 

 

 

 

 

 

296

 

Other (5)

 

793

 

 

 

 

 

 

 

 

 

2,117

 

 

 

 

Tax adjustments related to non-GAAP adjustments (6)

 

3,338

 

 

 

2,032

 

 

 

(2,401

)

 

 

7,576

 

 

 

(5,771

)

Tax expense from valuation allowance (7)

 

 

 

 

11,094

 

 

 

 

 

 

11,094

 

 

 

 

Non-GAAP net income

$

2,097

 

 

$

707

 

 

$

35,354

 

 

$

13,932

 

 

$

83,858

 

U.S. GAAP diluted EPS

$

(0.36

)

 

$

(0.71

)

 

$

1.00

 

 

$

(1.07

)

 

$

2.02

 

Non-GAAP diluted EPS

$

0.07

 

 

$

0.02

 

 

$

1.22

 

 

$

0.47

 

 

$

2.90

 

Shares used to compute non-GAAP diluted EPS

 

29,733,904

 

 

 

29,492,966

 

 

 

29,050,396

 

 

 

29,507,060

 

 

 

28,965,834

 

(1)

 

All non-GAAP adjustments are presented on a gross basis; the related income tax effects, including current and deferred income tax expense, are included in the adjustment line under the heading "Tax adjustments related to non-GAAP adjustments".

(2)

 

During the first and third quarters of 2022, we recorded non-recurring loss accruals of $3.1 million and $1.0 million, respectively, relating to expected settlements of employment-related legal matters.

(3)

 

As part of the purchase price allocation of our acquisition of IMG, we recorded acquired-inventories at fair value, resulting in a fair value step-up. This amount represents the release of the step-up to cost of sales as acquired-inventories were sold.

(4)

 

Included in this amount are transaction-related costs incurred in connection with our acquisition of IMG.

(5)

 

Included in this amount are severance costs associated with our global reduction-in-force programs.

(6)

 

Adjusts U.S. GAAP income tax expense for impact of our non-GAAP adjustments, which are presented on a gross basis, including the impacts of excluding share-based compensation and amortization of intangible assets. The adjustment reflects income tax benefits generated from U.S. taxable losses, on a non-GAAP basis, as we do not have a valuation allowance against our U.S. federal and state deferred tax assets on a non-GAAP basis. Refer to footnote 7 below.

(7)

 

During the second quarter of 2023, we recorded a valuation allowance of $11.1 million against our U.S. federal and state deferred tax assets. The valuation allowance was recorded based on an assessment of available positive and negative evidence, including an estimate of being in a three-year cumulative loss position in the U.S. by the end of 2023, projections of future taxable income, and other quantitative and qualitative information. On a non-GAAP basis, we added back the expense associated with our recognition of a valuation allowance against our U.S. federal and state deferred tax assets, because recording a valuation allowance would not have been appropriate, as we were in, and expect to remain in a three-year cumulative U.S. income position on a non-GAAP basis.

 

ICHOR HOLDINGS, LTD.

Reconciliation of U.S. GAAP Net Cash Provided by (Used in) Operating Activities to Free Cash Flow

(in thousands)

(unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

September 29,

2023

 

June 30,

2023

 

September 30,

2022

 

September 29,

2023

 

September 30,

2022

Net cash provided by (used in) operating activities

$

3,988

 

 

$

26,943

 

 

$

19,574

 

 

$

20,058

 

 

$

(7,321

)

Capital expenditures

 

(2,405

)

 

 

(4,015

)

 

 

(8,045

)

 

 

(13,239

)

 

 

(22,458

)

Free cash flow

$

1,583

 

 

$

22,928

 

 

$

11,529

 

 

$

6,819

 

 

$

(29,779

)

 

Contacts

Greg Swyt, CFO, 510-897-5200

Claire McAdams, IR & Strategic Initiatives, 530-265-9899

ir@ichorsystems.com

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.

Use the myMotherLode.com Keyword Search to go straight to a specific page

Popular Pages

  • Local News
  • US News
  • Weather
  • State News
  • Events
  • Traffic
  • Sports
  • Dining Guide
  • Real Estate
  • Classifieds
  • Financial News
  • Fire Info
Feedback