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,
2023
September 29,
2023
December 30,
2022
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,
2023
September 29,
2023
December 30,
2022
December 29,
2023
December 30,
2022
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,
2023
September 29,
2023
December 30,
2022
December 29,
2023
December 30,
2022
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,
2023
September 29,
2023
December 30,
2022
December 29,
2023
December 30,
2022
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,
2023
September 29,
2023
December 30,
2022
December 29,
2023
December 30,
2022
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,
2023
September 29,
2023
December 30,
2022
December 29,
2023
December 30,
2022
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,
2023
September 29,
2023
December 30,
2022
December 29,
2023
December 30,
2022
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
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