ICHR - Ichor Holdings Ltd. Announces Fourth Quarter and Fiscal Year 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 fourth quarter and fiscal year 2023 financial results.
Fourth quarter 2023 highlights:
- Revenues of $203 million, at the upper end of the guidance range communicated in November;
- Gross margin of 10.0% on a GAAP basis and 10.4% on a non?GAAP basis;
- Earnings per share ("EPS") of $(0.40) on a GAAP basis and $(0.06) on a non-GAAP basis;
- $38 million of cash flow from operations; and
- $32 million reduction in total debt outstanding during the quarter.
"Within a relatively stable demand environment, revenues at the upper end of guidance exceeded our expectations; however, product and customer mix became less favorable, resulting in a temporary setback in our strategies to deliver consistent improvement in gross margins," commented Jeff Andreson, chief executive officer. "We anticipate our revenues will continue at similar levels through mid-2024, during which time we expect to drive meaningful improvements in gross margins and profitability. Looking forward, we are encouraged by early indications of an improvement in overall fab investment levels as we progress through the year. Within the currently challenging business environment, we continue to focus our R&D investments on new products that will drive gross margin accretion and strong operating leverage as revenue levels rebound. We are engaged with multiple customers in various stages of tool evaluations, qualifications, and design wins that we anticipate will enable Ichor to outperform overall industry growth as spending levels improve, and we look forward to delivering improved year-over-year financial performance, both for this year as well as the expected strong growth year for our industry in 2025."
|
|
| Q4 2023 |
|
|
| Q3 2023 |
|
|
| Q4 2022 |
|
|
| FY 2023 |
|
|
| FY 2022 |
|
|
| (dollars in thousands, except per share amounts) |
| U.S. GAAP Financial Results: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net sales |
| $ |
| 203,481 |
|
|
|
|
| $ |
| 196,761 |
|
|
|
|
| $ |
| 301,720 |
|
|
|
|
| $ |
| 811,120 |
|
|
|
|
| $ |
| 1,280,069 |
|
|
| Gross margin |
|
|
| 10.0 |
| % |
|
|
|
|
| 12.2 |
| % |
|
|
|
|
| 16.2 |
| % |
|
|
|
|
| 12.7 |
| % |
|
|
|
|
| 16.6 |
| % |
| Operating margin |
|
|
| (3.9 |
| )% |
|
|
|
|
| (2.5 |
| )% |
|
|
|
|
| 6.0 |
| % |
|
|
|
|
| (1.3 |
| )% |
|
|
|
|
| 6.7 |
| % |
| Net income (loss) |
| $ |
| (11,899 |
| ) |
|
|
| $ |
| (10,425 |
| ) |
|
|
| $ |
| 14,197 |
|
|
|
|
| $ |
| (42,985 |
| ) |
|
|
| $ |
| 72,804 |
|
|
| Diluted EPS |
| $ |
| (0.40 |
| ) |
|
|
| $ |
| (0.36 |
| ) |
|
|
| $ |
| 0.49 |
|
|
|
|
| $ |
| (1.47 |
| ) |
|
|
| $ |
| 2.51 |
|
|
|
|
| Q4 2023 |
|
|
| Q3 2023 |
|
|
| Q4 2022 |
|
|
| FY 2023 |
|
|
| FY 2022 |
|
|
| (dollars in thousands, except per share amounts) |
| Non-GAAP Financial Results: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross margin |
|
|
| 10.4 |
| % |
|
|
|
|
| 13.1 |
| % |
|
|
|
|
| 16.7 |
| % |
|
|
|
|
| 13.4 |
| % |
|
|
|
|
| 17.0 |
| % |
| Operating margin |
|
|
| 0.0 |
| % |
|
|
|
|
| 2.2 |
| % |
|
|
|
|
| 8.9 |
| % |
|
|
|
|
| 2.9 |
| % |
|
|
|
|
| 9.8 |
| % |
| Net income (loss) |
| $ |
| (1,675 |
| ) |
|
|
| $ |
| 2,097 |
|
|
|
|
| $ |
| 21,005 |
|
|
|
|
| $ |
| 12,257 |
|
|
|
|
| $ |
| 104,863 |
|
|
| Diluted EPS |
| $ |
| (0.06 |
| ) |
|
|
| $ |
| 0.07 |
|
|
|
|
| $ |
| 0.72 |
|
|
|
|
| $ |
| 0.42 |
|
|
|
|
| $ |
| 3.62 |
|
|
| U.S. GAAP Financial Results Overview |
For the fourth quarter of 2023, revenue was $203.5 million, net loss was $11.9 million, and net loss per diluted share (“diluted EPS”) was $0.40. This compares to revenue of $196.8 million and $301.7 million, net income (loss) of $(10.4) million and $14.2 million, and diluted EPS of $(0.36) and $0.49, for the third quarter of 2023 and fourth quarter of 2022, respectively.
For 2023, revenue was $811.1 million, net loss was $43.0 million, and diluted EPS was $(1.47). This compares to revenue of $1,280.1 million, net income of $72.8 million, and diluted EPS of $2.51 for 2022.
| Non-GAAP Financial Results Overview |
For the fourth quarter of 2023, non-GAAP net loss was $1.7 million and non-GAAP diluted EPS was $(0.06). This compares to non-GAAP net income of $2.1 million and $21.0 million, and non-GAAP diluted EPS of $0.07 and $0.72, for the third quarter of 2023 and fourth quarter of 2022, respectively.
For 2023, non-GAAP net income was $12.3 million and non-GAAP diluted EPS was $0.42. This compares to non-GAAP net income of $104.9 million, and non-GAAP diluted EPS of $3.62 for 2022.
| First Quarter 2024 Financial Outlook |
For the first quarter of 2024, we expect revenue to be in the range of $190 million to $210 million. We expect GAAP diluted EPS to be in the range of $(0.24) to $(0.14) and non-GAAP diluted EPS to be in the range of $(0.05) to $0.05.
This outlook for non?GAAP diluted EPS excludes amortization of intangible assets of approximately $2.1 million and share-based compensation expense of approximately $3.9 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 fourth quarter of 2023 with cash and cash equivalents of $80.0 million, an increase of $4.0 million from the prior quarter, and a decrease of $6.5 million from 2022.
The increase of $4.0 million in the fourth quarter was primarily due to net cash provided by operating activities of $37.6 million, partially offset by net payments on our credit facilities of $31.9 million.
The decrease of $6.5 million in 2023 was primarily due to net payments on our credit facilities of $52.5 million and capital expenditures of $15.5 million, partially offset by cash provided by operating activities of $57.6 million.
Our cash provided by operating activities of $57.6 million in 2023 consisted of net loss of $43.0 million and net non-cash charges of $61.7 million, which consisted primarily of depreciation and amortization of $34.6 million, share-based compensation expense of $17.3 million, and deferred income taxes of $9.3 million.
The decrease in our net operating assets and liabilities of $38.9 million in 2023 was primarily due to a decrease in accounts receivable and inventories of $69.6 million and $37.8 million, respectively, partially offset by a decrease in accounts payable and accrued and other liabilities of $51.0 million and $27.7 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 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 fourth quarter and fiscal year 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/ichor020624/en .
To listen via telephone, please call (877) 407?0989 (domestic) or +1 (201) 389?0921 (international), conference ID: 13743811. 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. The three-month periods ended December 29, 2023, September 29, 2023, and December 30, 2022 were each 13 weeks. References to the fourth quarter of 2023, third quarter of 2023, and fourth quarter of 2022 relate to the three-month periods then ended. 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.
| 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, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words “anticipate,” “believe,” “contemplate,” “designed,” “estimate,” “expect,” “forecast,” “goal,” “guidance,” “intend,” “may,” “outlook,” “plan,” “predict,” “project,” “see,” “seek,” “target,” “would” and similar expressions or variations or negatives of these words are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words".
Examples of forward-looking statements include, but are not limited to, statements regarding our outlook for our first fiscal quarter of 2024, statements regarding the current business environment, revenue levels in 2024, manufacturers’ investment in water fabrication equipment, our investment in research and development of new products, acquiring new business, and company and industry growth and performance in 2024 and 2025, as well as any other statement that does not directly relate to any historical fact. Such forward-looking statements are based on our management’s current expectations about future events as of the date hereof and involve many risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Our actual results and outcomes could differ materially from those included in these forward-looking statements as a result of various factors, including, but not limited to: (1) geopolitical, economic and market conditions, including high inflation, changes to fiscal and monetary policy, high interest rates, currency fluctuations, challenges in the supply chain and any disruptions in the global economy as a result of the conflicts in Ukraine and the Middle East, (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, and (11) our dependence on a limited number of suppliers. 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) |
|
|
| December 29, |
|
|
| September 29, |
|
|
| December 30, |
| Assets |
|
|
|
|
|
|
|
|
|
|
| Current assets: |
|
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
| $ |
| 79,955 |
|
|
|
|
| $ |
| 75,933 |
|
|
|
|
| $ |
| 86,470 |
|
|
| Accounts receivable, net |
|
|
| 66,721 |
|
|
|
|
|
|
| 103,350 |
|
|
|
|
|
|
| 136,321 |
|
|
| Inventories |
|
|
| 245,885 |
|
|
|
|
|
|
| 266,900 |
|
|
|
|
|
|
| 283,660 |
|
|
| Prepaid expenses and other current assets |
|
|
| 8,804 |
|
|
|
|
|
|
| 5,142 |
|
|
|
|
|
|
| 7,007 |
|
|
| Total current assets |
|
|
| 401,365 |
|
|
|
|
|
|
| 451,325 |
|
|
|
|
|
|
| 513,458 |
|
|
| Property and equipment, net |
|
|
| 92,755 |
|
|
|
|
|
|
| 96,240 |
|
|
|
|
|
|
| 98,055 |
|
|
| Operating lease right-of-use assets |
|
|
| 36,611 |
|
|
|
|
|
|
| 36,948 |
|
|
|
|
|
|
| 40,557 |
|
|
| Other noncurrent assets |
|
|
| 11,912 |
|
|
|
|
|
|
| 12,079 |
|
|
|
|
|
|
| 12,926 |
|
|
| Deferred tax assets, net |
|
|
| 3,148 |
|
|
|
|
|
|
| 1,934 |
|
|
|
|
|
|
| 11,322 |
|
|
| Intangible assets, net |
|
|
| 57,288 |
|
|
|
|
|
|
| 60,456 |
|
|
|
|
|
|
| 72,022 |
|
|
| Goodwill |
|
|
| 335,402 |
|
|
|
|
|
|
| 335,402 |
|
|
|
|
|
|
| 335,402 |
|
|
| Total assets |
| $ |
| 938,481 |
|
|
|
|
| $ |
| 994,384 |
|
|
|
|
| $ |
| 1,083,742 |
|
|
| Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
|
|
|
|
|
| Accounts payable |
| $ |
| 60,490 |
|
|
|
|
| $ |
| 74,011 |
|
|
|
|
| $ |
| 110,165 |
|
|
| Accrued liabilities |
|
|
| 14,871 |
|
|
|
|
|
|
| 16,176 |
|
|
|
|
|
|
| 23,616 |
|
|
| Other current liabilities |
|
|
| 6,638 |
|
|
|
|
|
|
| 8,588 |
|
|
|
|
|
|
| 15,815 |
|
|
| Current portion of long-term debt |
|
|
| 7,500 |
|
|
|
|
|
|
| 7,500 |
|
|
|
|
|
|
| 7,500 |
|
|
| Current portion of lease liabilities |
|
|
| 9,463 |
|
|
|
|
|
|
| 9,393 |
|
|
|
|
|
|
| 9,196 |
|
|
| Total current liabilities |
|
|
| 98,962 |
|
|
|
|
|
|
| 115,668 |
|
|
|
|
|
|
| 166,292 |
|
|
| Long-term debt, less current portion, net |
|
|
| 241,183 |
|
|
|
|
|
|
| 272,942 |
|
|
|
|
|
|
| 293,218 |
|
|
| Lease liabilities, less current portion |
|
|
| 28,187 |
|
|
|
|
|
|
| 28,556 |
|
|
|
|
|
|
| 31,828 |
|
|
| Deferred tax liabilities, net |
|
|
| 1,169 |
|
|
|
|
|
|
| 29 |
|
|
|
|
|
|
| 29 |
|
|
| Other non-current liabilities |
|
|
| 4,303 |
|
|
|
|
|
|
| 4,510 |
|
|
|
|
|
|
| 4,879 |
|
|
| Total liabilities |
|
|
| 373,804 |
|
|
|
|
|
|
| 421,705 |
|
|
|
|
|
|
| 496,246 |
|
|
| 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; 29,435,398, 29,375,388, and 28,861,949 shares outstanding, respectively; 33,872,837, 33,812,827, and 33,299,388 shares issued, respectively) |
|
|
| 3 |
|
|
|
|
|
|
| 3 |
|
|
|
|
|
|
| 3 |
|
|
| Additional paid in capital |
|
|
| 451,581 |
|
|
|
|
|
|
| 447,684 |
|
|
|
|
|
|
| 431,415 |
|
|
| Treasury shares at cost (4,437,439 shares) |
|
|
| (91,578 |
| ) |
|
|
|
|
| (91,578 |
| ) |
|
|
|
|
| (91,578 |
| ) |
| Retained earnings |
|
|
| 204,671 |
|
|
|
|
|
|
| 216,570 |
|
|
|
|
|
|
| 247,656 |
|
|
| Total shareholders’ equity |
|
|
| 564,677 |
|
|
|
|
|
|
| 572,679 |
|
|
|
|
|
|
| 587,496 |
|
|
| Total liabilities and shareholders’ equity |
| $ |
| 938,481 |
|
|
|
|
| $ |
| 994,384 |
|
|
|
|
| $ |
| 1,083,742 |
|
|
| ICHOR HOLDINGS, LTD. |
| Consolidated Statement of Operations |
| (in thousands, except share and per share amounts) |
| (unaudited) |
|
|
| Three Months Ended |
|
|
| Year Ended |
|
|
| December 29, |
|
|
| September 29, |
|
|
| December 30, |
|
|
| December 29, |
|
|
| December 30, |
| Net sales |
| $ |
| 203,481 |
|
|
|
|
| $ |
| 196,761 |
|
|
|
|
| $ |
| 301,720 |
|
|
|
|
| $ |
| 811,120 |
|
|
|
|
| $ |
| 1,280,069 |
|
|
| Cost of sales |
|
|
| 183,136 |
|
|
|
|
|
|
| 172,692 |
|
|
|
|
|
|
| 252,809 |
|
|
|
|
|
|
| 707,724 |
|
|
|
|
|
|
| 1,068,205 |
|
|
| Gross profit |
|
|
| 20,345 |
|
|
|
|
|
|
| 24,069 |
|
|
|
|
|
|
| 48,911 |
|
|
|
|
|
|
| 103,396 |
|
|
|
|
|
|
| 211,864 |
|
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Research and development |
|
|
| 5,534 |
|
|
|
|
|
|
| 5,188 |
|
|
|
|
|
|
| 4,947 |
|
|
|
|
|
|
| 20,223 |
|
|
|
|
|
|
| 19,564 |
|
|
| Selling, general, and administrative |
|
|
| 19,601 |
|
|
|
|
|
|
| 20,066 |
|
|
|
|
|
|
| 22,007 |
|
|
|
|
|
|
| 79,334 |
|
|
|
|
|
|
| 88,572 |
|
|
| Amortization of intangible assets |
|
|
| 3,169 |
|
|
|
|
|
|
| 3,639 |
|
|
|
|
|
|
| 3,942 |
|
|
|
|
|
|
| 14,734 |
|
|
|
|
|
|
| 17,905 |
|
|
| Total operating expenses |
|
|
| 28,304 |
|
|
|
|
|
|
| 28,893 |
|
|
|
|
|
|
| 30,896 |
|
|
|
|
|
|
| 114,291 |
|
|
|
|
|
|
| 126,041 |
|
|
| Operating income (loss) |
|
|
| (7,959 |
| ) |
|
|
|
|
| (4,824 |
| ) |
|
|
|
|
| 18,015 |
|
|
|
|
|
|
| (10,895 |
| ) |
|
|
|
|
| 85,823 |
|
|
| Interest expense, net |
|
|
| 4,663 |
|
|
|
|
|
|
| 5,136 |
|
|
|
|
|
|
| 4,212 |
|
|
|
|
|
|
| 19,379 |
|
|
|
|
|
|
| 11,056 |
|
|
| Other expense (income), net |
|
|
| (109 |
| ) |
|
|
|
|
| 29 |
|
|
|
|
|
|
| 111 |
|
|
|
|
|
|
| 804 |
|
|
|
|
|
|
| (563 |
| ) |
| Income (loss) before income taxes |
|
|
| (12,513 |
| ) |
|
|
|
|
| (9,989 |
| ) |
|
|
|
|
| 13,692 |
|
|
|
|
|
|
| (31,078 |
| ) |
|
|
|
|
| 75,330 |
|
|
| Income tax expense (benefit) |
|
|
| (614 |
| ) |
|
|
|
|
| 436 |
|
|
|
|
|
|
| (505 |
| ) |
|
|
|
|
| 11,907 |
|
|
|
|
|
|
| 2,526 |
|
|
| Net income (loss) |
| $ |
| (11,899 |
| ) |
|
|
| $ |
| (10,425 |
| ) |
|
|
| $ |
| 14,197 |
|
|
|
|
| $ |
| (42,985 |
| ) |
|
|
| $ |
| 72,804 |
|
|
| Net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
| $ |
| (0.40 |
| ) |
|
|
| $ |
| (0.36 |
| ) |
|
|
| $ |
| 0.49 |
|
|
|
|
| $ |
| (1.47 |
| ) |
|
|
| $ |
| 2.54 |
|
|
| Diluted |
| $ |
| (0.40 |
| ) |
|
|
| $ |
| (0.36 |
| ) |
|
|
| $ |
| 0.49 |
|
|
|
|
| $ |
| (1.47 |
| ) |
|
|
| $ |
| 2.51 |
|
|
| Shares used to compute net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
|
| 29,404,548 |
|
|
|
|
|
|
| 29,297,347 |
|
|
|
|
|
|
| 28,830,505 |
|
|
|
|
|
|
| 29,200,796 |
|
|
|
|
|
|
| 28,714,550 |
|
|
| Diluted |
|
|
| 29,404,548 |
|
|
|
|
|
|
| 29,297,347 |
|
|
|
|
|
|
| 29,046,802 |
|
|
|
|
|
|
| 29,200,796 |
|
|
|
|
|
|
| 28,963,031 |
|
|
| ICHOR HOLDINGS, LTD. |
| Consolidated Statements of Cash Flows |
| (in thousands) |
| (unaudited) |
|
|
| Three Months Ended |
|
|
| Year Ended |
|
|
| December 29, |
|
|
| September 29, |
|
|
| December 30, |
|
|
| December 29, |
|
|
| December 30, |
| Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) |
| $ |
| (11,899 |
| ) |
|
|
| $ |
| (10,425 |
| ) |
|
|
| $ |
| 14,197 |
|
|
|
|
| $ |
| (42,985 |
| ) |
|
|
| $ |
| 72,804 |
|
|
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Depreciation and amortization |
|
|
| 8,541 |
|
|
|
|
|
|
| 8,891 |
|
|
|
|
|
|
| 8,357 |
|
|
|
|
|
|
| 34,577 |
|
|
|
|
|
|
| 35,100 |
|
|
| Share-based compensation |
|
|
| 4,672 |
|
|
|
|
|
|
| 4,752 |
|
|
|
|
|
|
| 3,799 |
|
|
|
|
|
|
| 17,338 |
|
|
|
|
|
|
| 13,924 |
|
|
| Deferred income taxes |
|
|
| (74 |
| ) |
|
|
|
|
| (661 |
| ) |
|
|
|
|
| (193 |
| ) |
|
|
|
|
| 9,314 |
|
|
|
|
|
|
| (3,215 |
| ) |
| Amortization of debt issuance costs |
|
|
| 116 |
|
|
|
|
|
|
| 116 |
|
|
|
|
|
|
| 116 |
|
|
|
|
|
|
| 465 |
|
|
|
|
|
|
| 465 |
|
|
| Changes in operating assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Accounts receivable, net |
|
|
| 36,629 |
|
|
|
|
|
|
| (7,590 |
| ) |
|
|
|
|
| 46,976 |
|
|
|
|
|
|
| 69,600 |
|
|
|
|
|
|
| 6,669 |
|
|
| Inventories |
|
|
| 21,015 |
|
|
|
|
|
|
| (710 |
| ) |
|
|
|
|
| 6,998 |
|
|
|
|
|
|
| 37,775 |
|
|
|
|
|
|
| (47,527 |
| ) |
| Prepaid expenses and other assets |
|
|
| 1,594 |
|
|
|
|
|
|
| 2,624 |
|
|
|
|
|
|
| 477 |
|
|
|
|
|
|
| 10,204 |
|
|
|
|
|
|
| 4,508 |
|
|
| Accounts payable |
|
|
| (16,218 |
| ) |
|
|
|
|
| 10,291 |
|
|
|
|
|
|
| (31,667 |
| ) |
|
|
|
|
| (50,974 |
| ) |
|
|
|
|
| (50,175 |
| ) |
| Accrued liabilities |
|
|
| (2,660 |
| ) |
|
|
|
|
| (1,145 |
| ) |
|
|
|
|
| (3,175 |
| ) |
|
|
|
|
| (9,766 |
| ) |
|
|
|
|
| 3,648 |
|
|
| Other liabilities |
|
|
| (4,142 |
| ) |
|
|
|
|
| (2,155 |
| ) |
|
|
|
|
| (7,111 |
| ) |
|
|
|
|
| (17,916 |
| ) |
|
|
|
|
| (4,748 |
| ) |
| Net cash provided by operating activities |
|
|
| 37,574 |
|
|
|
|
|
|
| 3,988 |
|
|
|
|
|
|
| 38,774 |
|
|
|
|
|
|
| 57,632 |
|
|
|
|
|
|
| 31,453 |
|
|
| Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Capital expenditures |
|
|
| (2,257 |
| ) |
|
|
|
|
| (2,405 |
| ) |
|
|
|
|
| (6,975 |
| ) |
|
|
|
|
| (15,496 |
| ) |
|
|
|
|
| (29,433 |
| ) |
| Cash paid for acquisitions, net of cash acquired |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 500 |
|
|
| Net cash used in investing activities |
|
|
| (2,257 |
| ) |
|
|
|
|
| (2,405 |
| ) |
|
|
|
|
| (6,975 |
| ) |
|
|
|
|
| (15,496 |
| ) |
|
|
|
|
| (28,933 |
| ) |
| Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Issuance of ordinary shares under share-based compensation plans |
|
|
| 1,370 |
|
|
|
|
|
|
| 2,170 |
|
|
|
|
|
|
| 675 |
|
|
|
|
|
|
| 7,521 |
|
|
|
|
|
|
| 3,768 |
|
|
| Employees' taxes paid upon vesting of restricted share units |
|
|
| (790 |
| ) |
|
|
|
|
| (553 |
| ) |
|
|
|
|
| (592 |
| ) |
|
|
|
|
| (3,672 |
| ) |
|
|
|
|
| (2,813 |
| ) |
| Borrowings on revolving credit facility |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 25,000 |
|
|
| Repayments on revolving credit facility |
|
|
| (30,000 |
| ) |
|
|
|
|
| (10,000 |
| ) |
|
|
|
|
| — |
|
|
|
|
|
|
| (45,000 |
| ) |
|
|
|
|
| (10,000 |
| ) |
| Repayments on term loan |
|
|
| (1,875 |
| ) |
|
|
|
|
| (1,875 |
| ) |
|
|
|
|
| (1,875 |
| ) |
|
|
|
|
| (7,500 |
| ) |
|
|
|
|
| (7,500 |
| ) |
| Net cash provided by (used in) financing activities |
|
|
| (31,295 |
| ) |
|
|
|
|
| (10,258 |
| ) |
|
|
|
|
| (1,792 |
| ) |
|
|
|
|
| (48,651 |
| ) |
|
|
|
|
| 8,455 |
|
|
| Net increase (decrease) in cash |
|
|
| 4,022 |
|
|
|
|
|
|
| (8,675 |
| ) |
|
|
|
|
| 30,007 |
|
|
|
|
|
|
| (6,515 |
| ) |
|
|
|
|
| 10,975 |
|
|
| Cash at beginning of period |
|
|
| 75,933 |
|
|
|
|
|
|
| 84,608 |
|
|
|
|
|
|
| 56,463 |
|
|
|
|
|
|
| 86,470 |
|
|
|
|
|
|
| 75,495 |
|
|
| Cash at end of period |
| $ |
| 79,955 |
|
|
|
|
| $ |
| 75,933 |
|
|
|
|
| $ |
| 86,470 |
|
|
|
|
| $ |
| 79,955 |
|
|
|
|
| $ |
| 86,470 |
|
|
| Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash paid during the period for interest |
| $ |
| 5,236 |
|
|
|
|
| $ |
| 5,281 |
|
|
|
|
| $ |
| 4,133 |
|
|
|
|
| $ |
| 20,368 |
|
|
|
|
| $ |
| 10,590 |
|
|
| Cash paid during the period for taxes, net of refunds |
| $ |
| 25 |
|
|
|
|
| $ |
| 512 |
|
|
|
|
| $ |
| 950 |
|
|
|
|
| $ |
| 3,877 |
|
|
|
|
| $ |
| 3,285 |
|
|
| Supplemental disclosures of non-cash activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Capital expenditures included in accounts payable |
| $ |
| 625 |
|
|
|
|
| $ |
| 145 |
|
|
|
|
| $ |
| 1,543 |
|
|
|
|
| $ |
| 625 |
|
|
|
|
| $ |
| 1,543 |
|
|
| Right-of-use assets obtained in exchange for new operating lease liabilities, including those acquired through acquisitions |
| $ |
| 1,686 |
|
|
|
|
| $ |
| — |
|
|
|
|
| $ |
| 6,731 |
|
|
|
|
| $ |
| 4,789 |
|
|
|
|
| $ |
| 17,889 |
|
|
| ICHOR HOLDINGS, LTD. |
| Reconciliation of U.S. GAAP Gross Profit to Non-GAAP Gross Profit |
| (dollars in thousands) |
| (unaudited) |
|
|
| Three Months Ended |
|
|
| Year Ended |
|
|
| December 29, |
|
|
| September 29, |
|
|
| December 30, |
|
|
| December 29, |
|
|
| December 30, |
| U.S. GAAP gross profit |
| $ |
| 20,345 |
|
|
|
|
| $ |
| 24,069 |
|
|
|
|
| $ |
| 48,911 |
|
|
|
|
| $ |
| 103,396 |
|
|
|
|
| $ |
| 211,864 |
|
|
| Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Share-based compensation |
|
|
| 778 |
|
|
|
|
|
|
| 840 |
|
|
|
|
|
|
| 501 |
|
|
|
|
|
|
| 3,130 |
|
|
|
|
|
|
| 2,056 |
|
|
| Fair value adjustment to inventory from acquisitions (1) |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 2,492 |
|
|
| Other (2) |
|
|
| 130 |
|
|
|
|
|
|
| 774 |
|
|
|
|
|
|
| 933 |
|
|
|
|
|
|
| 2,191 |
|
|
|
|
|
|
| 933 |
|
|
| Non-GAAP gross profit |
| $ |
| 21,253 |
|
|
|
|
| $ |
| 25,683 |
|
|
|
|
| $ |
| 50,345 |
|
|
|
|
| $ |
| 108,717 |
|
|
|
|
| $ |
| 217,345 |
|
|
| U.S. GAAP gross margin |
|
|
| 10.0 |
| % |
|
|
|
|
| 12.2 |
| % |
|
|
|
|
| 16.2 |
| % |
|
|
|
|
| 12.7 |
| % |
|
|
|
|
| 16.6 |
| % |
| Non-GAAP gross margin |
|
|
| 10.4 |
| % |
|
|
|
|
| 13.1 |
| % |
|
|
|
|
| 16.7 |
| % |
|
|
|
|
| 13.4 |
| % |
|
|
|
|
| 17.0 |
| % |
| (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 |
|
|
| Year Ended |
|
|
| December 29, |
|
|
| September 29, |
|
|
| December 30, |
|
|
| December 29, |
|
|
| December 30, |
| U.S. GAAP operating income (loss) |
| $ |
| (7,959 |
| ) |
|
|
| $ |
| (4,824 |
| ) |
|
|
| $ |
| 18,015 |
|
|
|
|
| $ |
| (10,895 |
| ) |
|
|
| $ |
| 85,823 |
|
|
| Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amortization of intangible assets |
|
|
| 3,169 |
|
|
|
|
|
|
| 3,639 |
|
|
|
|
|
|
| 3,942 |
|
|
|
|
|
|
| 14,734 |
|
|
|
|
|
|
| 17,905 |
|
|
| Share-based compensation |
|
|
| 4,672 |
|
|
|
|
|
|
| 4,752 |
|
|
|
|
|
|
| 3,799 |
|
|
|
|
|
|
| 17,338 |
|
|
|
|
|
|
| 13,924 |
|
|
| Settlement loss (1) |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 4,146 |
|
|
| Fair value adjustment to inventory from acquisitions (2) |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 2,492 |
|
|
| Acquisition costs (3) |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 296 |
|
|
| Other (4) |
|
|
| 181 |
|
|
|
|
|
|
| 793 |
|
|
|
|
|
|
| 1,144 |
|
|
|
|
|
|
| 2,298 |
|
|
|
|
|
|
| 1,144 |
|
|
| Non-GAAP operating income |
| $ |
| 63 |
|
|
|
|
| $ |
| 4,360 |
|
|
|
|
| $ |
| 26,900 |
|
|
|
|
| $ |
| 23,475 |
|
|
|
|
| $ |
| 125,730 |
|
|
| U.S. GAAP operating margin |
|
|
| (3.9 |
| )% |
|
|
|
|
| (2.5 |
| )% |
|
|
|
|
| 6.0 |
| % |
|
|
|
|
| (1.3 |
| )% |
|
|
|
|
| 6.7 |
| % |
| Non-GAAP operating margin |
|
|
| 0.0 |
| % |
|
|
|
|
| 2.2 |
| % |
|
|
|
|
| 8.9 |
| % |
|
|
|
|
| 2.9 |
| % |
|
|
|
|
| 9.8 |
| % |
| (1) |
| During the first and third quarters of 2022, we recorded 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 (Loss) |
| (in thousands, except share and per share amounts) |
| (unaudited) |
|
|
| Three Months Ended |
|
|
| Year Ended |
|
|
| December 29, |
|
|
| September 29, |
|
|
| December 30, |
|
|
| December 29, |
|
|
| December 30, |
| U.S. GAAP net income (loss) |
| $ |
| (11,899 |
| ) |
|
|
| $ |
| (10,425 |
| ) |
|
|
| $ |
| 14,197 |
|
|
|
|
| $ |
| (42,985 |
| ) |
|
|
| $ |
| 72,804 |
|
|
| Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amortization of intangible assets |
|
|
| 3,169 |
|
|
|
|
|
|
| 3,639 |
|
|
|
|
|
|
| 3,942 |
|
|
|
|
|
|
| 14,734 |
|
|
|
|
|
|
| 17,905 |
|
|
| Share-based compensation |
|
|
| 4,672 |
|
|
|
|
|
|
| 4,752 |
|
|
|
|
|
|
| 3,799 |
|
|
|
|
|
|
| 17,338 |
|
|
|
|
|
|
| 13,924 |
|
|
| Settlement loss (1) |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 4,146 |
|
|
| Fair value adjustment to inventory from acquisitions (2) |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 2,492 |
|
|
| Acquisition costs (3) |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 296 |
|
|
| Other (4) |
|
|
| 181 |
|
|
|
|
|
|
| 793 |
|
|
|
|
|
|
| 1,144 |
|
|
|
|
|
|
| 2,298 |
|
|
|
|
|
|
| 1,144 |
|
|
| Tax adjustments related to non-GAAP adjustments (5) |
|
|
| 2,202 |
|
|
|
|
|
|
| 3,338 |
|
|
|
|
|
|
| (2,077 |
| ) |
|
|
|
|
| 9,778 |
|
|
|
|
|
|
| (7,848 |
| ) |
| Tax expense from valuation allowance (6) |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 11,094 |
|
|
|
|
|
|
| — |
|
|
| Non-GAAP net income (loss) |
| $ |
| (1,675 |
| ) |
|
|
| $ |
| 2,097 |
|
|
|
|
| $ |
| 21,005 |
|
|
|
|
| $ |
| 12,257 |
|
|
|
|
| $ |
| 104,863 |
|
|
| U.S. GAAP diluted EPS |
| $ |
| (0.40 |
| ) |
|
|
| $ |
| (0.36 |
| ) |
|
|
| $ |
| 0.49 |
|
|
|
|
| $ |
| (1.47 |
| ) |
|
|
| $ |
| 2.51 |
|
|
| Non-GAAP diluted EPS |
| $ |
| (0.06 |
| ) |
|
|
| $ |
| 0.07 |
|
|
|
|
| $ |
| 0.72 |
|
|
|
|
| $ |
| 0.42 |
|
|
|
|
| $ |
| 3.62 |
|
|
| Shares used to compute diluted non-GAAP EPS |
|
|
| 29,404,548 |
|
|
|
|
|
|
| 29,733,904 |
|
|
|
|
|
|
| 29,046,802 |
|
|
|
|
|
|
| 29,514,553 |
|
|
|
|
|
|
| 28,963,031 |
|
|
| (1) |
| During the first and third quarters of 2022, we recorded 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. |
| (5) |
| Adjusts U.S. GAAP income tax expense for the 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 6 below. |
| (6) |
| 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, 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 Operating Activities to Free Cash Flow |
| (in thousands) |
| (unaudited) |
|
|
| Three Months Ended |
|
|
| Year Ended |
|
|
| December 29, |
|
|
| September 29, |
|
|
| December 30, |
|
|
| December 29, |
|
|
| December 30, |
| Net cash provided by operating activities |
| $ |
| 37,574 |
|
|
|
|
| $ |
| 3,988 |
|
|
|
|
| $ |
| 38,774 |
|
|
|
|
| $ |
| 57,632 |
|
|
|
|
| $ |
| 31,453 |
|
|
| Capital expenditures |
|
|
| (2,257 |
| ) |
|
|
|
|
| (2,405 |
| ) |
|
|
|
|
| (6,975 |
| ) |
|
|
|
|
| (15,496 |
| ) |
|
|
|
|
| (29,433 |
| ) |
| Free cash flow |
| $ |
| 35,317 |
|
|
|
|
| $ |
| 1,583 |
|
|
|
|
| $ |
| 31,799 |
|
|
|
|
| $ |
| 42,136 |
|
|
|
|
| $ |
| 2,020 |
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240206414919/en/
Greg Swyt, CFO 510-897-5200
Claire McAdams, IR & Strategic Initiatives 530-265-9899
ir@ichorsystems.com