What changed in this filing

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Item 1. Financial Statements

2024-08-07 compared with 2024-05-08 · 92 added, 44 removed, 341 unchanged (29% of the section changed)

48 unchanged sentences

(in thousands, except share and per share amounts)

Three Months Ended

2024 March 31,

Three Months Ended Six Months Ended

2024 June 30,

2023 June 28,

2024 June 30,

Net sales $ 203,227 $ 185,008 $ 404,610 $ 410,878

10 unchanged sentences

Loss before income taxes ( 4,170 ) ( 8,036 ) ( 12,246 ) ( 8,576 )

Income tax expense (benefit) 913 ( 535 )

Income tax expense 942 12,620 1,855 12,085

Net loss $ ( 5,112 ) $ ( 20,656 ) $ ( 14,101 ) $ ( 20,661 )

9 unchanged sentences

(in thousands, except share amounts)

For the three months ending March 29, 2024 Ordinary Shares Additional

For the three months ending June 28, 2024 Ordinary Shares Additional

Capital Treasury

3 unchanged sentences

Shares Amount Shares Amount

Balance at March 29, 2024 33,467,846 $ 3 $ 593,125 4,437,439 $ ( 91,578 ) $ 195,682 $ 697,232

Ordinary shares issued from exercise of stock options 31,381 — 747 — — — 747

Ordinary shares issued from vesting of restricted share units 130,104 — ( 1,929 ) — — — ( 1,929 )

Share-based compensation expense — — 3,938 — — — 3,938

Net loss — — — — — ( 5,112 ) ( 5,112 )

Balance at June 28, 2024 33,629,331 $ 3 $ 595,881 4,437,439 $ ( 91,578 ) $ 190,570 $ 694,876

For the three months ending June 30, 2023 Ordinary Shares Additional

Capital Treasury

Shares Retained

Earnings Total

Shareholders'

Shares Amount Shares Amount

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

Ordinary shares issued from exercise of stock options 31,996 — 724 — — — 724

Ordinary shares issued from vesting of restricted share units 124,702 — ( 1,637 ) — — — ( 1,637 )

Ordinary shares issued from employee share purchase plan 49,917 — 1,131 — — — 1,131

Share-based compensation expense — — 4,277 — — — 4,277

Net loss — — — — — ( 20,656 ) ( 20,656 )

Balance at June 30, 2023 29,241,561 $ 3 $ 441,883 4,437,439 $ ( 91,578 ) $ 226,995 $ 577,303

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

ICHOR HOLDINGS, LTD.

Consolidated Statements of Shareholders’ Equity

(in thousands, except share amounts)

For the six months ending June 28, 2024 Ordinary Shares Additional

Capital Treasury

Shares Retained

Earnings Total

Shareholders'

Shares Amount Shares Amount

Balance at December 29, 2023 29,435,398 $ 3 $ 451,581 4,437,439 $ ( 91,578 ) $ 204,671 $ 564,677

5 unchanged sentences

Net loss — — — — — ( 14,101 ) ( 14,101 )

Balance at March 29, 2024 33,467,846 $ 3 $ 593,125 4,437,439 $ ( 91,578 ) $ 195,682 $ 697,232

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

Balance at June 28, 2024 33,629,331 $ 3 $ 595,881 4,437,439 $ ( 91,578 ) $ 190,570 $ 694,876

For the six months ending June 30, 2023 Ordinary Shares Additional

Capital Treasury

9 unchanged sentences

Net loss — — — — — ( 20,661 ) ( 20,661 )

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

Balance at June 30, 2023 29,241,561 $ 3 $ 441,883 4,437,439 $ ( 91,578 ) $ 226,995 $ 577,303

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

2 unchanged sentences

(in thousands)

Three Months Ended

2024 March 31,

Six Months Ended

2024 June 30,

Cash flows from operating activities:

12 unchanged sentences

Other liabilities ( 3,574 ) ( 11,619 )

Net cash provided by (used in) operating activities 4,804 ( 10,873 )

Net cash provided by operating activities 22,296 16,070

Cash flows from investing activities:

7 unchanged sentences

Repayments on term loan ( 3,750 ) ( 3,750 )

Net cash provided by financing activities 21,855 59

Net cash provided by (used in) financing activities 19,435 ( 7,098 )

Net increase (decrease) in cash 34,394 ( 1,862 )

22 unchanged sentences

References to 2024 and 2023 relate to the fiscal years then ended, respectively.

The three-month periods ended March 29, 2024 and March 31, 2023 are each 13 weeks.

References to the first quarter of 2024 and 2023 relate to the three-month periods then ended .

The three-month periods ended June 28, 2024 and June 30, 2023 are each 13 weeks.

References to the second quarter of 2024 and 2023 relate to the three-month periods then ended .

Use of Estimates

63 unchanged sentences

Total property and equipment, net $ 89,142 $ 92,755

Depreciation expense was $ 5.2 million and $ 4.3 million for the first quarter of 2024 and 2023, respectively.

Depreciation expense was $ 5.3 million and $ 4.4 million for the second quarter of 2024 and 2023, respectively.

Depreciation expense was $ 10.4 million and $ 8.7 million for the six months ended June 28, 2024 and June 30, 2023, respectively.

Cloud Computing Implementation Costs

1 unchanged sentence

These costs are recorded to prepaid expenses or other noncurrent assets.

To date, these costs have been those incurred to implement a new company-wide enterprise resource planning (ERP) system.

The balance of capitalized cloud computing implementation costs, net of accumulated amortization, was $ 7.8 million and $ 8.1 million as of March 29, 2024 and December 29, 2023, respectively, and is included in other assets on our consolidated balance sheets.

The related amortization expense was $ 0.3 million and $ 0.2 million for the first quarter of 2024 and 2023, respectively, and is included in selling, general, and administrative expense on our consolidated statements of operations.

To date, these costs have been those incurred to implement a new company-wide enterprise resource planning system.

The balance of capitalized cloud computing implementation costs, net of accumulated amortization, was $ 7.6 million and $ 8.1 million as of June 28, 2024 and December 29, 2023, respectively, and is included in other noncurrent assets on our consolidated balance sheets.

The related amortization expense, which is included in selling, general, and administrative expense on our consolidated statements of operations, was $ 0.3 million and $ 0.2 million for the second quarter of 2024 and 2023, respectively, and $ 0.5 million and $ 0.5 million for the six months ended June 28, 2024 and June 30, 2023, respectively.

Note 4 – Intangible Assets

Definite‑lived intangible assets consist of the following:

March 29, 2024

June 28, 2024

Gross value Accumulated

23 unchanged sentences

The components of lease expense are as follows:

Three Months Ended

2024 March 31,

Three Months Ended Six Months Ended

2024 June 30,

2023 June 28,

2024 June 30,

Operating lease cost $ 2,492 $ 2,393 $ 4,984 $ 4,804

Supplemental cash flow information related to leases is as follows:

Three Months Ended

2024 March 31,

Six Months Ended

2024 June 30,

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

4 unchanged sentences

Weighted-average discount rate of operating leases 3.8 % 3.4 %

Future minimum lease payments under non-cancelable leases are as follows as of March 29, 2024:

Future minimum lease payments under non-cancelable leases are as follows as of June 28, 2024:

2024, remaining $ 4,936

5 unchanged sentences

Income tax information for the periods reported is as follows:

Three Months Ended

2024 March 31,

Income tax expense (benefit) $ 913 $ ( 535 )

Three Months Ended Six Months Ended

2024 June 30,

2023 June 28,

2024 June 30,

Income tax expense $ 942 $ 12,620 $ 1,855 $ 12,085

Loss before income taxes $ ( 4,170 ) $ ( 8,036 ) $ ( 12,246 ) $ ( 8,576 )

Effective income tax rate ( 22.6 ) % ( 157.0 ) % ( 15.1 ) % ( 140.9 ) %

Our effective tax rate for the three months ended March 29, 2024 differs from the statutory rate primarily due to taxes on foreign income that differs from the U.S.

Our effective tax rate for the three and six months ended June 28, 2024 differs from the statutory rate primarily due to taxes on foreign income that differs from the U.S.

tax rate, including a tax holiday in Singapore from which we will benefit through 2026, and a valuation allowance against U.S.

deferred tax assets.

The ending balance for the unrecognized tax benefits for uncertain tax positions was approximately $ 3.8 million as of March 29, 2024.

The related interest and penalties were insignificant.

Our effective tax rate for the three and six months ended June 30, 2023 differs from the statutory rate primarily due to a valuation allowance recorded against our U.S.

federal and state deferred tax assets, as well as taxes on foreign income that differ from the U.S.

tax rate, including a tax holiday in Singapore from which we will benefit through 2026.

We recorded an $ 11.1 million valuation allowance in the second quarter of 2023 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.

We intend to maintain a full valuation allowance on our U.S.

federal and state net deferred tax assets until there is sufficient positive evidence to support the reversal of all or some portion of the valuation allowance.

The ending balance for the unrecognized tax benefits for uncertain tax positions was approximately $ 4.2 million as of June 28, 2024.

The related interest and penalties were $ 0.5 million.

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

As of March 29, 2024, we were not under examination by tax authorities.

As of June 28, 2024, we were under examination by California tax authorities.

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 $ 0.9 million for the first quarter of 2024 and 2023, respectively.

Matching contributions were $ 0.6 million and $ 0.6 million for the second quarter of 2024 and 2023, respectively, and $ 1.4 million and $ 1.5 million for the six months ended June 28, 2024 and June 30, 2023, respectively.

Note 8 – Long-Term Debt

14 unchanged sentences

The Base Rate is equal to the higher of i) the Prime Rate, ii) the Federal Funds Rate plus 0.5 %, or iii) the BSBY Rate plus 1.00 %.

The BSBY Rate is equal to BSBY for a particular tenor matching the respective interest period.

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

2 unchanged sentences

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

As of March 29, 2024, our credit facilities bore interest under the BSBY rate option at 7.72 %.

As of June 28, 2024, our credit facilities bore interest under the BSBY rate option at 7.27 %.

Note 9 – Share‑Based Compensation

4 unchanged sentences

Upon vesting of RSUs, shares are withheld to cover statutory minimum withholding taxes.

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 $ 3.6 million for the first quarter of 2024 and 2023.

Shares withheld are not reflected as an issuance of ordinary shares within our consolidated statements of shareholders’ equity, as the shares are 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 $ 3.9 million and $ 4.3 million for the second quarter of 2024 and 2023, respectively, and $ 6.3 million and $ 7.9 million for the six months ended June 28, 2024 and June 30, 2023, respectively.

Stock Options

8 unchanged sentences

Forfeited or expired ( 639 ) $ 21.76

Outstanding, March 29, 2024 470,574 $ 24.25 1.6 years $ 6,762

Exercisable, March 29, 2024 464,504 $ 24.28 1.6 years $ 6,660

Outstanding, June 28, 2024 439,193 $ 24.28 1.4 years $ 6,266

Exercisable, June 28, 2024 439,193 $ 24.28 1.4 years $ 6,266

Restricted Share Units

The following table summarizes RSU activity:

Number of Restricted Share Units

Number of RSUs

condition Performance

6 unchanged sentences

Forfeited ( 74,110 ) ( 13,021 ) ( 23,419 ) $ 30.26

Unvested, March 29, 2024 966,246 77,669 139,065 $ 30.14

Unvested, June 28, 2024 1,151,884 178,610 201,841 $ 33.61

Employee Share Purchase Plan

2 unchanged sentences

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

As of March 29, 2024, approximately 2.1 million ordinary shares remain available for purchase under the 2017 ESPP.

As of June 28, 2024, approximately 2.1 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

2024 March 31,

Three Months Ended Six Months Ended

2024 June 30,

2023 June 28,

2024 June 30,

Net loss $ ( 5,112 ) $ ( 20,656 ) $ ( 14,101 ) $ ( 20,661 )

17 unchanged sentences

The following table sets forth sales by geographic area:

Three Months Ended

2024 March 31,

Three Months Ended Six Months Ended

2024 June 30,

2023 June 28,

2024 June 30,

United States of America $ 69,259 $ 61,623 $ 133,653 $ 150,675

3 unchanged sentences

Total net sales $ 203,227 $ 185,008 $ 404,610 $ 410,878

Foreign long-lived assets, exclusive of deferred tax assets, were $ 47.8 million and $ 48.2 million as of March 29, 2024 and December 29, 2023, respectively .

Foreign long-lived assets, exclusive of deferred tax assets, were $ 46.2 million and $ 48.2 million as of June 28, 2024 and December 29, 2023, 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