What changed in this filing

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Item 1. Financial Statements

2021-08-04 compared with 2021-05-05 · 110 added, 39 removed, 276 unchanged (35% of the section changed)

4 unchanged sentences

Current assets:

Cash and cash equivalents

Marketable securities

Accounts receivable, net

29 unchanged sentences

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

Accumulated other comprehensive loss

Retained earnings

6 unchanged sentences

Three Months Ended

Six Months Ended

Cost of sales

13 unchanged sentences

ICHOR HOLDINGS, LTD.

Consolidated Statements of Comprehensive Income

(in thousands)

Three Months Ended

Six Months Ended

Other comprehensive loss, net of tax:

Unrealized loss on available-for-sale marketable securities

Comprehensive income

See accompanying notes.

ICHOR HOLDINGS, LTD.

Consolidated Statements of Shareholders’ Equity

(dollars in thousands)

For the three months ending March 26, 2021

For the three months ending June 25, 2021

Ordinary Shares

Other Comprehensive

Shareholders'

Balance at March 26, 2021

Ordinary shares issued from exercise of stock options

Ordinary shares issued from vesting of restricted share units

Share-based compensation expense

Other comprehensive loss

Balance at June 25, 2021

For the six months ending June 25, 2021

Ordinary Shares

Other Comprehensive

Shareholders'

Balance at December 25, 2020

3 unchanged sentences

Share-based compensation expense

Other comprehensive loss

Balance at June 25, 2021

See accompanying notes.

ICHOR HOLDINGS, LTD.

Consolidated Statements of Shareholders’ Equity (continued)

(dollars in thousands)

For the three months ending June 26, 2020

Ordinary Shares

Shareholders'

Balance at March 27, 2020

For the three months ending March 27, 2020

Ordinary shares issued from exercise of stock options

Ordinary shares issued from vesting of restricted share units

Share-based compensation expense

Balance at June 26, 2020

For the six months ending June 26, 2020

Ordinary Shares

5 unchanged sentences

Share-based compensation expense

Balance at March 27, 2020

Balance at June 26, 2020

See accompanying notes.

2 unchanged sentences

(in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

4 unchanged sentences

Amortization of debt issuance costs

Gain on sale of asset disposal group

Changes in operating assets and liabilities, net of acquisitions:

7 unchanged sentences

Capital expenditures

Purchase of marketable securities

Proceeds from sale of property and equipment

Net cash used in investing activities

27 unchanged sentences

We use a 52- or 53-week fiscal year ending on the last Friday in December.

The three months ended March 26, 2021 and March 27, 2020 were both 13 weeks.

References to the first quarter of 2021 and 2020 refer to the three-month periods then ended .

The three months ended June 25, 2021 and June 26, 2020 were both 13 weeks.

References to the second quarter of 2021 and 2020 refer to the three-month periods then ended .

References to fiscal year 2021 and 2020 refer to our fiscal years ending December 31, 2021 and December 25, 2020, respectively.

4 unchanged sentences

Significant estimates include inventory valuation, uncertain tax positions, fair value assigned to stock options granted, and impairment analysis for both definite‑lived intangible assets and goodwill.

Cash and Cash Equivalents and Marketable Securities

Cash and cash equivalents consist of deposits and financial instruments which are readily convertible into cash and have original maturities of 90 days or less at the time of acquisition.

Marketable securities consist primarily of highly liquid investments with maturities of greater than 90 days when purchased.

We classify our marketable securities as available-for-sale and, accordingly, report them at fair value with the related unrealized gains and losses included in accumulated other comprehensive income (loss).

Any unrealized losses which are considered to be other-than-temporary are recorded in other income (expense), net.

Realized gains and losses on the sale of marketable securities are determined using the specific-identification method and recorded in other income (expense), net.

All of our available-for-sale investments are subject to a periodic impairment review.

If an available-for-sale debt security’s fair value is less than its amortized cost basis, then we evaluate whether the decline is the result of a credit loss, in which case an impairment is recorded through an allowance for credit losses.

Unrealized gains and losses not attributable to credit losses are included, net of tax, in accumulated other comprehensive income (loss).

We have no t record an allowance for credit losses during 2021.

Revenue Recognition

38 unchanged sentences

Total property and equipment, net

Depreciation expense was $ 2.3 million and $ 2.4 million for the first quarter of 2021 and 2020, respectively.

Depreciation expense was $ 2.4 million and $ 2.6 million for the second quarter of 2021 and 2020, respectively, and $ 4.7 million and $ 5.0 million for the six months ended June 25, 2021 and June 26, 2020, respectively.

Cloud Computing Implementation Costs

6 unchanged sentences

Capitalized costs amortized during the period

Capitalized cloud computing implementation costs as of March 26, 2021

Capitalized cloud computing implementation costs as of June 25, 2021

Note 4 – Intangible Assets

Definite‑lived intangible assets consist of the following:

March 26, 2021

June 25, 2021

Customer relationships

14 unchanged sentences

As these amounts are variable, they are not included in lease liabilities.

As of March 26, 2021, we had one operating lease executed for which the rental period had not yet commenced.

As of June 25, 2021, we had zero operating lease executed for which the rental period had not yet commenced.

The components of lease expense are as follows:

Three Months Ended

Six Months Ended

Operating lease cost

Supplemental cash flow information related to leases is as follows:

Three Months Ended

Six Months Ended

Cash paid for amounts included in the measurement of lease liabilities:

3 unchanged sentences

Weighted-average discount rate of operating leases

Future minimum lease payments under non-cancelable leases as of March 26, 2021 are as follows:

Future minimum lease payments under non-cancelable leases as of June 25, 2021 are as follows:

2021, remaining

5 unchanged sentences

Three Months Ended

Six Months Ended

Income tax expense (benefit)

1 unchanged sentence

Effective income tax rate

Our effective tax rate for the first quarter of 2021 differs from the statutory rate due to taxes on foreign income that differ from the U.S.

Our effective tax rate for the three and six months ended June 25, 2021 differs from the statutory rate due to taxes on foreign income that differ from the U.S.

tax rate, including a tax holiday in Singapore, and the impact of share-based compensation activity during the quarter.

Our effective tax rate for first quarter of 2020 differs from the statutory rate due to taxes on foreign income that differ from the U.S.

tax rate and the release of the certain tax reserves related to statute of limitation expirations and settlements, excess tax benefits from share-based compensation and the impact of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act.

The ending balance for the unrecognized tax benefits for uncertain tax positions was approximately $ 3.0 million at March 26, 2021.

Our effective tax rate for the three and six months ended June 26, 2020 differs from the statutory rate due to taxes on foreign income that differ from the U.S.

tax rate, excess tax benefits from share-based compensation, and the impact of the CARES Act.

The ending balance for the unrecognized tax benefits for uncertain tax positions was approximately $ 3.2 million at June 25, 2021.

The related interest and penalties were insignificant.

The uncertain tax positions that are reasonably possible to decrease in the next twelve months are insignificant.

As of March 26, 2021, we were not under examination by tax authorities.

As of June 25, 2021, we were not under examination by tax authorities.

Note 7 – Employee Benefit Programs

1 unchanged sentence

Participants may make salary deferral contributions not to exceed 50 % of a participant’s annual compensation or the maximum amount otherwise allowed by law.

Eligible employees receive a discretionary matching contribution equal to 50 % of a participant’s deferral, up to an annual maximum of 4 % of a participant’s annual compensation.

Matching contributions were $ 0.6 million and $ 0.5 million for the first quarter of 2021 and 2020, respectively.

Eligible employees receive a discretionary matching contribution equal to 50 % of a participant’s deferral, up to an annual matching maximum of 4 % of a participant’s annual compensation.

Matching contributions were $ 0.5 million and $ 0.5 million for the second quarter of 2021 and 2020, respectively and $ 1.1 million and $ 1.0 million for the six months ended June 25, 2021 and June 26, 2020, respectively.

Note 8 – Long-Term Debt

1 unchanged sentence

Revolving credit facility

Total principal amount of long-term debt

Total principal amount of debt

Less unamortized debt issuance costs

Total long-term debt, net

Total debt, net

Less current portion

12 unchanged sentences

Eurodollar interest payments are due on the last day of the applicable interest period .

At March 26, 2021, the term loan and revolving credit facility bore interest at the Eurodollar rate option of 3.25 % and 2.50 %, respectively .

At June 25, 2021, the term loan and revolving credit facility bore interest at the Eurodollar rate option of 3.00 % and 2.03 %, respectively .

Note 9 – Share‑Based Compensation

5 unchanged sentences

Shares withheld are not reflected as an issuance of ordinary shares within our consolidated statements of shareholders’ equity, as the shares were never issued, and the associated tax payments are reflected as financing activities within our consolidated statements of cash flows.

Share‑based compensation expense across all plans for options, RSUs, and employee share purchase rights was $ 2.4 million and $ 2.9 million for the first quarter of 2021 and 2020, respectively.

Share‑based compensation expense across all plans for options, RSUs, and employee share purchase rights was $ 2.7 million and $ 2.1 million for the second quarter of 2021 and 2020, respectively, and $ 5.1 million and $ 5.0 million for the six months ended June 25, 2021 and June 26, 2020, respectively.

Stock Options

7 unchanged sentences

Forfeited or expired

Outstanding, March 26, 2021

Exercisable, March 26, 2021

Outstanding, June 25, 2021

Exercisable, June 25, 2021

Restricted Share Units

3 unchanged sentences

Unvested, December 25, 2020

Unvested, March 26, 2021

Unvested, June 25, 2021

Employee Share Purchase Plan

2 unchanged sentences

Shares are purchased on the last day of the purchase period.

During the first quarter of 2021, 27,151 ordinary shares were purchased by eligible employees under the 2017 ESPP.

As of March 26, 2021, approximately 2.4 million ordinary shares remain available for purchase under the 2017 ESPP.

During the six months ended June 25, 2021, 27,151 ordinary shares were purchased by eligible employees under the 2017 ESPP.

As of June 25, 2021, approximately 2.4 million ordinary shares remain available for purchase under the 2017 ESPP.

Note 10 – Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share and a reconciliation of the numerator and denominator used in the calculation:

Three Months Ended

Six Months Ended

Basic weighted average ordinary shares outstanding

Dilutive effect of options

Dilutive effect of RSUs

Dilutive effect of ESPP

Diluted weighted average ordinary shares outstanding

Earnings per share:

A combined total of approximately 185,000 , 1,790,000 , 185,000 , and 1,555,000 potentially dilutive options and RSUs were excluded from the calculation of net income per share for the three and six months ended June 25, 2021 and June 26, 2020, respectively, because including them would have been antidilutive under the treasury stock method.

Note 11 – Fair Value Measurements

We measure certain assets and liabilities, including cash equivalents and marketable securities, at fair value.

Whenever possible, the fair values of our financial assets and liabilities are determined using quoted market prices of identical securities or quoted market prices of similar securities from active markets.

The three levels of inputs that may be used to measure fair value are as follows :

Quoted prices in active markets for identical assets.

Observable market-based inputs or unobservable inputs that are corroborated by market data.

Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets.

Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

As of June 25, 2021, assets measured at fair value on a recurring basis were as follows:

Cash equivalents:

Money market funds

Commercial paper

Marketable securities:

Commercial paper

Corporate bonds

The difference between amortized cost and fair value of marketable securities, due to unrealized gains and losses, was immaterial and is recorded as a component of accumulated other comprehensive income (loss).

We did not have any other-than-temporary unrealized gains or losses at either period-end included in these financial statements .

Note 12 – Segment Information

8 unchanged sentences

Three Months Ended

Six Months Ended

United States of America

Total net sales

Foreign long-lived assets, exclusive of deferred tax assets, were $ 34.8 million and $ 31.5 million at March 26, 2021 and December 25, 2020, respectively .

Note 11 – Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share and a reconciliation of the numerator and denominator used in the calculation:

Three Months Ended

Basic weighted average ordinary shares outstanding

Dilutive effect of options

Dilutive effect of RSUs

Dilutive effect of ESPP

Diluted weighted average ordinary shares outstanding

Earnings per share:

A combined total of approximately 75,000 and 720,000 potentially dilutive o ptions and RSUs were excluded from the calculation of net income per share for the first quarter of 2021 and 2020 , respectively, because including them would have been antidilutive under the treasury stock method .

Foreign long-lived assets, exclusive of deferred tax assets, were $ 39.8 million and $ 31.5 million at June 25, 2021 and December 25, 2020, respectively .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements