What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-05-10 compared with 2022-11-09 · 119 added, 158 removed, 253 unchanged (52% of the section changed)

3 unchanged sentences

(in thousands, except share and per share amounts)

September 30,

2023 December 30,

Current assets:

1 unchanged sentence

Accounts receivable, net 122,693 136,321

Inventories 271,538 283,660

Prepaid expenses and other current assets 6,530 7,007

5 unchanged sentences

Intangible assets, net 68,056 72,022

Goodwill 335,402 335,402

Total assets $ 1,040,151 $ 1,083,742

Liabilities and Shareholders’ Equity

14 unchanged sentences

20,000,000 shares authorized;

zero shares issued and outstanding)

0 shares issued and outstanding)

Ordinary shares ($ 0.0001 par value;

4 unchanged sentences

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

Accumulated other comprehensive loss

( 91,578 ) ( 91,578 )

Retained earnings 247,651 247,656

1 unchanged sentence

Total liabilities and shareholders’ equity $ 1,040,151 $ 1,083,742

See accompanying notes.

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

ICHOR HOLDINGS, LTD.

2 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

September 24,

September 30,

September 24,

2023 April 1,

Net sales $ 225,870 $ 293,146

Cost of sales 192,630 249,214

Gross profit 33,240 43,932

Operating expenses:

5 unchanged sentences

Interest expense, net 4,550 1,532

Other expense (income), net

Income before income taxes

Income tax expense

Net income per share:

Shares used to compute net income per share:

See accompanying notes.

ICHOR HOLDINGS, LTD.

Consolidated Statements of Comprehensive Income

(in thousands)

Three Months Ended

Nine Months Ended

September 30,

September 24,

September 30,

September 24,

Other comprehensive loss, net of tax:

Unrealized gain (loss) on available-for-sale marketable securities

Comprehensive income

See accompanying notes.

Other expense, net 784 84

Income (loss) before income taxes ( 540 ) 8,849

Income tax expense (benefit) ( 535 ) 810

Net income (loss) $ ( 5 ) $ 8,039

Net income (loss) per share

Basic $ 0.00 $ 0.28

Diluted $ 0.00 $ 0.28

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

Basic 28,984,878 28,592,629

Diluted 28,984,878 29,023,455

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

ICHOR HOLDINGS, LTD.

1 unchanged sentence

(in thousands, except share amounts)

For the three months ending September 30, 2022

Ordinary Shares

Other Comprehensive

Shareholders'

Income (Loss)

Balance at July 1, 2022

Ordinary shares issued from exercise of stock options

Ordinary shares issued from vesting of restricted share units

Share-based compensation expense

Balance at September 30, 2022

For the nine months ending September 30, 2022

Ordinary Shares

Other Comprehensive

For the three months ending March 31, 2023 Ordinary Shares Additional

Capital Treasury

Shares Retained

Earnings Total

Shareholders'

Income (Loss)

Shares Amount Shares Amount

Balance at December 30, 2022 28,861,949 $ 3 $ 431,415 4,437,439 $ ( 91,578 ) $ 247,656 $ 587,496

3 unchanged sentences

Share-based compensation expense — — 3,637 — — — 3,637

Balance at September 30, 2022

See accompanying notes.

ICHOR HOLDINGS, LTD.

Consolidated Statements of Shareholders’ Equity (continued)

(in thousands, except share amounts)

For the three months ending September 24, 2021

Ordinary Shares

Other Comprehensive

Shareholders'

Income (Loss)

Balance at June 25, 2021

Ordinary shares issued from exercise of stock options

Ordinary shares issued from vesting of restricted share units

Ordinary shares issued from employee share purchase plan

Share-based compensation expense

Other comprehensive loss

Balance at September 24, 2021

For the nine months ending September 24, 2021

Ordinary Shares

Other Comprehensive

Net loss — — — — — ( 5 ) ( 5 )

Balance at March 31, 2023 29,034,946 $ 3 $ 437,388 4,437,439 $ ( 91,578 ) $ 247,651 $ 593,464

For the three months ending April 1, 2022 Ordinary Shares Additional

Capital Treasury

Shares Retained

Earnings Total

Shareholders'

Income (Loss)

Shares Amount Shares Amount

Balance at December 31, 2021 28,551,160 $ 3 $ 417,438 4,437,439 $ ( 91,578 ) $ 174,852 $ 500,715

1 unchanged sentence

Ordinary shares issued from vesting of restricted share units 34,994 — ( 777 ) — — — ( 777 )

Ordinary shares issued from employee share purchase plan

Share-based compensation expense — — 2,897 — — — 2,897

Other comprehensive loss

Balance at September 24, 2021

See accompanying notes.

Net income — — — — — 8,039 8,039

Balance at April 1, 2022 28,628,907 $ 3 $ 420,513 4,437,439 $ ( 91,578 ) $ 182,891 $ 511,829

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

ICHOR HOLDINGS, LTD.

1 unchanged sentence

(in thousands)

Nine Months Ended

September 30,

September 24,

Three Months Ended

2023 April 1,

Cash flows from operating activities:

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

Net income (loss) $ ( 5 ) $ 8,039

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

Depreciation and amortization 8,489 9,315

2 unchanged sentences

Amortization of debt issuance costs 116 117

Gain on sale of asset disposal group

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable, net 13,628 ( 10,544 )

Inventories 12,122 ( 27,718 )

Prepaid expenses and other assets 2,705 ( 650 )

2 unchanged sentences

Other liabilities ( 5,727 ) ( 1,670 )

Net cash provided by (used in) operating activities

Net cash used in operating activities ( 10,873 ) ( 36,278 )

Cash flows from investing activities:

Capital expenditures ( 6,819 ) ( 3,417 )

Cash paid for acquisitions, net of cash acquired

Purchase of marketable securities

Proceeds from maturities and sales of marketable securities

Proceeds from sale of property and equipment

Net cash used in investing activities ( 6,819 ) ( 3,417 )

2 unchanged sentences

Employees' taxes paid upon vesting of restricted share units ( 692 ) ( 777 )

Borrowings on revolving credit facility

Repayments on revolving credit facility

Repayments on term loan ( 1,875 ) ( 1,875 )

9 unchanged sentences

Right-of-use assets obtained in exchange for new operating lease liabilities, including those acquired through acquisitions $ 2,261 $ 6,067

See accompanying notes.

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

ICHOR HOLDINGS, LTD.

9 unchanged sentences

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

The three months ended September 30, 2022 and September 24, 2021 were both 13 weeks.

References to the third quarter of 2022 and 2021 refer to the three-month periods then ended .

References to fiscal year 2022 and 2021 refer to our fiscal years ending December 30, 2022 and December 31, 2021, respectively.

Fiscal year 2022 and 2021 are 52 and 53 weeks, respectively.

Our fiscal years ending December 29, 2023 and December 30, 2022 each are 52 weeks.

References to 2023 and 2022 relate to the fiscal years then ended.

The three-month periods ended March 31, 2023 and April 1, 2022 each are 13 weeks.

References to the first quarter of 2023 and 2022 relate to the three-month periods then ended .

Use of Estimates

32 unchanged sentences

At the acquisition date, the acquirer applies the revenue model as if it had originated the acquired contracts.

The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Adoption of the ASU should be applied prospectively.

Early adoption is also permitted, including adoption in an interim period.

If early adopted, the amendments are applied retrospectively to all business combinations for which the acquisition date occurred during the fiscal year of adoption.

This ASU is currently not expected to have a material impact on our consolidated financial statements .

We adopted the ASU on the first day of 2023 and it did not have a material impact on our consolidated financial statements.

Note 2 – Inventories

Inventories consist of the following:

September 30,

2023 December 30,

Raw materials $ 196,504 $ 197,726

5 unchanged sentences

Property and equipment consist of the following:

September 30,

2023 December 30,

Machinery $ 96,338 $ 90,507

Leasehold improvements 43,556 43,129

1 unchanged sentence

Office furniture, fixtures, and equipment 1,354 1,337

Vehicles 401 401

Construction-in-process 21,510 19,869

173,212 164,907

Less accumulated depreciation ( 71,731 ) ( 66,852 )

Total property and equipment, net $ 101,481 $ 98,055

Depreciation expense was $ 4.4 million and $ 2.8 million for the third quarter of 2022 and 2021, respectively.

Depreciation expense was $ 12.8 million and $ 7.5 million for the nine months ended September 30, 2022 and September 24, 2021, respectively.

Depreciation expense was $ 4.3 million and $ 4.0 million for the first quarter of 2023 and 2022, respectively.

Cloud Computing Implementation Costs

2 unchanged sentences

To-date, these costs are those incurred to implement a new company-wide ERP system.

The following table summarizes capitalized cloud computing implementation costs:

Capitalized cloud computing implementation costs as of December 31, 2021

Costs capitalized during the period

Capitalized costs amortized during the period

Capitalized cloud computing implementation costs as of September 30, 2022

The balance of capitalized cloud computing implementation costs, net of accumulated amortization, was $ 11.4 million and $ 11.6 million as of March 31, 2023 and December 30, 2022, respectively, and is included in other assets on our consolidated balance sheets.

The related amortization expense was $ 0.2 million and $ 0.2 million during the first quarter of 2023 and 2022, respectively, and is included in selling, general, and administrative expense on our consolidated statements of operations.

Note 4 – Intangible Assets

Definite‑lived intangible assets consist of the following:

September 30, 2022

Customer relationships

Developed technology

March 31, 2023

Gross value Accumulated

amortization Accumulated

charges Carrying

amount Weighted

Customer relationships 117,022 ( 55,202 ) — 61,820 8.4 years

Developed technology 11,047 ( 4,811 ) — 6,236 10.0 years

Total intangible assets $ 128,069 $ ( 60,013 ) $ — $ 68,056

December 30, 2022

Customer relationships

Developed technology

Order backlog

Gross value Accumulated

amortization Accumulated

charges Carrying

amount Weighted

Customer relationships 117,022 ( 51,337 ) — 65,685 8.4 years

Developed technology 11,047 ( 4,710 ) — 6,337 10.0 years

Total intangible assets $ 128,069 $ ( 56,047 ) $ — $ 72,022

The following table presents the changes to goodwill.

There were no goodwill impairment losses recognized during the nine months ended September 30, 2022.

Balance at December 31, 2021

Balance at September 30, 2022

Note 5 – Leases

7 unchanged sentences

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

As of September 30, 2022, we had one operating lease executed for which the rental period had not yet commenced.

The components of lease expense are as follows:

Three Months Ended

Nine Months Ended

September 30,

September 24,

September 30,

September 24,

2023 April 1,

Operating lease cost $ 2,411 $ 2,045

Supplemental cash flow information related to leases is as follows:

Nine Months Ended

September 30,

September 24,

Three Months Ended

2023 April 1,

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

1 unchanged sentence

Supplemental balance sheet information related to leases is as follows:

September 30,

Weighted-average remaining lease term of operating leases

2023 December 30,

Weighted-average remaining lease term of operating leases 5.2 years 5.3 years

Weighted-average discount rate of operating leases 3.2 % 3.0 %

Future minimum lease payments under non-cancelable leases as of September 30, 2022 are as follows:

Future minimum lease payments under non-cancelable leases are as follows as of March 31, 2023:

2023, remaining $ 7,117

Thereafter 5,367

Total future minimum lease payments 44,912

2 unchanged sentences

Note 6 – Income Taxes

Income tax information for the periods reported are as follows:

Income tax information for the periods reported is as follows:

Three Months Ended

Nine Months Ended

September 30,

September 24,

September 30,

September 24,

Income tax expense

Income before income taxes

2023 April 1,

Income tax expense (benefit) $ ( 535 ) $ 810

Income (loss) before income taxes $ ( 540 ) $ 8,849

Effective income tax rate 99.1 % 9.2 %

Our effective tax rates for the three and nine months ended September 30, 2022 and September 24, 2021 differ from the statutory rate primarily 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.

The ending balance for the unrecognized tax benefits for uncertain tax positions was approximately $ 4.1 million at September 30, 2022.

Our effective tax rates for the three months ended March 31, 2023 and April 1, 2022 differ from the statutory rate primarily due to taxes on foreign income that differ from the U.S.

tax rate, including a tax holiday in Singapore.

Our effective tax rate of 99.1 % for the first quarter of 2023 is primarily due to projected pre-tax loss in the U.S.

for 2023, which generates tax benefits, partially offset by projected pre-tax income in Singapore, our primary source of non-U.S.

pre-tax income and for which we participate in a tax holiday through 2026.

The ending balance for the unrecognized tax benefits for uncertain tax positions was approximately $ 4.5 million at March 31, 2023.

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 September 30, 2022, we were not under examination by tax authorities.

As of March 31, 2023, we were under examination by the Inland Revenue Board of Malaysia for the years 2016 to 2020.

Note 7 – Employee Benefit Programs

2 unchanged sentences

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 $ 0.7 million and $ 0.5 million for the third quarter of 2022 and 2021, respectively.

Matching contributions were $ 2.3 million and $ 1.6 million for the nine months ended September 30, 2022 and September 24, 2021, respectively.

Matching contributions were $ 0.9 million and $ 1.0 million for the first quarter of 2023 and 2022, respectively.

Note 8 – Long-Term Debt

Long‑term debt consists of the following:

September 30,

2023 December 30,

Term loan $ 140,625 $ 142,500

Revolving credit facility 160,000 160,000

11 unchanged sentences

The applicable margin on Base Rate and BSBY Rate loans is 0.375 - 1.375 % and 1.375 - 2.375 % per annum, respectively, depending on our leverage ratio, which is based on trailing 12-month EBITDA, as defined in our credit agreement.

We are also charged a commitment fee of 0.175 %- 0.350 % on the unused portion of our revolving credit facility.

We are also charged a commitment fee of 0.175 %- 0.350 %, depending on our leverage ratio, on the unused portion of our revolving credit facility.

Base Rate interest payments and commitment fees are due quarterly.

BSBY Rate interest payments are due on the last day of the applicable interest period, or quarterly for applicable interest periods longer than 3 months.

At September 30, 2022, our credit facilities bore interest under the BSBY rate option of 4.94 %.

At March 31, 2023, our credit facilities bore interest under the BSBY rate option of 6.51 %.

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 $ 3.7 million and $ 3.0 million for the third quarter of 2022 and 2021, and was $ 10.1 million and $ 8.1 million for the nine months ended September 30, 2022 and September 24, 2021, respectively.

Share‑based compensation expense across all plans for options, RSUs, and employee share purchase rights was $ 3.6 million and $ 2.9 million for the first quarter of 2023 and 2022.

Stock Options

1 unchanged sentence

Number of Stock Options

Weighted average exercise price per share

Weighted average remaining contractual term

Aggregate intrinsic value

condition Weighted average exercise price

per share Weighted average remaining

contractual term Aggregate intrinsic value

Outstanding, December 30, 2022 805,115 $ 23.35

Granted — $ 0.00

Exercised ( 92,766 ) $ 22.91

Forfeited or expired ( 1,444 ) $ 22.18

Outstanding, September 30, 2022

Exercisable, September 30, 2022

Outstanding, March 31, 2023 710,905 $ 23.41 2.6 years $ 6,634

Exercisable, March 31, 2023 634,134 $ 23.36 2.4 years $ 5,951

Restricted Share Units

1 unchanged sentence

Number of Restricted Share Units

Weighted average grant-date fair value per share

condition Performance

condition Market

condition Weighted average grant-date fair

value per share

Unvested, December 30, 2022 860,595 57,562 86,342 $ 30.26

Unvested, September 30, 2022

Granted 69,675 — — $ 27.04

Vested ( 51,938 ) — — $ 33.57

Forfeited ( 11,936 ) — — $ 31.81

Unvested, March 31, 2023 866,396 57,562 86,342 $ 29.78

Employee Share Purchase Plan

2 unchanged sentences

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

As of September 30, 2022, approximately 2.3 million ordinary shares remain available for purchase under the 2017 ESPP.

As of March 31, 2023, approximately 2.2 million ordinary shares remain available for purchase under the 2017 ESPP.

Note 10 – Earnings per Share

1 unchanged sentence

Three Months Ended

Nine Months Ended

September 30,

September 24,

September 30,

September 24,

2023 April 1,

Net income (loss) $ ( 5 ) $ 8,039

Basic weighted average ordinary shares outstanding 28,984,878 28,592,629

4 unchanged sentences

Securities excluded from the calculation of diluted weighted average ordinary shares outstanding (1) 1,879,000 267,000

Earnings per share:

Net income (loss) per share:

Basic $ 0.00 $ 0.28

Diluted $ 0.00 $ 0.28

(1) Represents potentially dilutive options and RSUs excluded from the calculation of diluted weighted average ordinary shares outstanding, because including them would have been antidilutive under the treasury stock method.

8 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

September 24,

September 30,

September 24,

2023 April 1,

United States of America $ 89,052 $ 142,470

Singapore 82,286 103,295

Europe 29,986 24,392

Other 24,546 22,989

Total net sales $ 225,870 $ 293,146

Foreign long-lived assets, exclusive of deferred tax assets, were $ 44.0 million and $ 38.4 million at September 30, 2022 and December 31, 2021, respectively .

Foreign long-lived assets, exclusive of deferred tax assets, were $ 52.5 million and $ 52.8 million at March 31, 2023 and December 30, 2022, 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