ICHOR HOLDINGS, LTD. [ICHR] Filings

10-Q 1 ichr-10q_20220701.htm 10-Q ichr-10q_20220701.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 1, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __ to __

Commission File Number: 001-37961

ICHOR HOLDINGS, LTD.

(Exact Name of Registrant as Specified in its Charter)

Cayman Islands	Not Applicable
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
3185 Laurelview Ct. Fremont, CA	94538
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (510) 897-5200

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary Shares, par value $0.0001	ICHR	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S‑T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐

Non‑accelerated filer	☐	Small reporting company	☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes ☐ No ☒

As of August 5, 2022, the registrant had 28,739,608 ordinary shares, $0.0001 par value per share, outstanding.

TABLE OF CONTENTS

PART I
ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED)	1
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	14
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	21
ITEM 4.	CONTROLS AND PROCEDURES	22

PART II
ITEM 1.	LEGAL PROCEEDINGS	23
ITEM 1A.	RISK FACTORS	23
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	23
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	23
ITEM 4.	MINE SAFETY DISCLOSURES	23
ITEM 5.	OTHER INFORMATION	23
ITEM 6.	EXHIBITS	23

SIGNATURES		24

PART I

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

ICHOR HOLDINGS, LTD.

Consolidated Balance Sheets

(dollars in thousands, except per share amounts)

(unaudited)

	July 1, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	46,064		$	75,495
Accounts receivable, net		158,403			142,990
Inventories		290,327			236,133
Prepaid expenses and other current assets		5,699			8,153
Total current assets		500,493			462,771
Property and equipment, net		91,603			85,204
Operating lease right-of-use assets		35,649			29,790
Other noncurrent assets		12,887			9,166
Deferred tax assets, net		9,247			8,116
Intangible assets, net		79,923			89,927
Goodwill		335,902			335,902
Total assets	$	1,065,704		$	1,020,876
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	147,650		$	159,727
Accrued liabilities		21,652			19,066
Other current liabilities		14,162			14,377
Current portion of long-term debt		7,500			7,500
Current portion of lease liabilities		7,956			7,633
Total current liabilities		198,920			208,303
Long-term debt, less current portion, net		296,736			285,253
Lease liabilities, less current portion		28,063			22,354
Deferred tax liabilities, net		38			38
Other non-current liabilities		4,623			4,213
Total liabilities		528,380			520,161
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; 28,735,728 and 28,551,160 shares outstanding, respectively; 33,173,167 and 32,988,599 shares issued, respectively)		3			3
Additional paid in capital		424,471			417,438
Treasury shares at cost (4,437,439 shares)		(91,578	)		(91,578	)
Accumulated other comprehensive loss		—			—
Retained earnings		204,428			174,852
Total shareholders’ equity		537,324			500,715
Total liabilities and shareholders’ equity	$	1,065,704		$	1,020,876

See accompanying notes.

ICHOR HOLDINGS, LTD.

Consolidated Statements of Operations

(dollars in thousands, except per share amounts)

(unaudited)

	Three Months Ended					Six Months Ended
	July 1, 2022			June 25, 2021		July 1, 2022			June 25, 2021
Net sales	$	329,560		$	282,308	$	622,706		$	546,874
Cost of sales		274,099			234,955		523,313			460,009
Gross profit		55,461			47,353		99,393			86,865
Operating expenses:
Research and development		4,907			4,049		9,758			7,564
Selling, general, and administrative		21,103			14,699		44,370			29,048
Amortization of intangible assets		4,655			3,390		10,004			6,781
Total operating expenses		30,665			22,138		64,132			43,393
Operating income		24,796			25,215		35,261			43,472
Interest expense, net		2,063			1,591		3,595			3,510
Other expense (income), net		(548	)		22		(464	)		207
Income before income taxes		23,281			23,602		32,130			39,755
Income tax expense		1,744			737		2,554			2,252
Net income	$	21,537		$	22,865	$	29,576		$	37,503
Net income per share:
Basic	$	0.75		$	0.81	$	1.03		$	1.33
Diluted	$	0.74		$	0.79	$	1.02		$	1.30
Shares used to compute net income per share:
Basic		28,665,930			28,180,821		28,629,280			28,092,535
Diluted		29,042,519			29,092,521		28,948,055			28,942,902

See accompanying notes.

ICHOR HOLDINGS, LTD.

Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)

	Three Months Ended					Six Months Ended
	July 1, 2022		June 25, 2021			July 1, 2022		June 25, 2021
Net income	$	21,537	$	22,865		$	29,576	$	37,503
Other comprehensive loss, net of tax:
Unrealized loss on available-for-sale marketable securities		—		(24	)		—		(24	)
Comprehensive income	$	21,537	$	22,841		$	29,576	$	37,479

See accompanying notes.

ICHOR HOLDINGS, LTD.

Consolidated Statements of Shareholders’ Equity

(dollars in thousands)

(unaudited)

					Additional			Treasury					Accumulated				Total
For the three months ending July 1, 2022	Ordinary Shares				Paid-In			Shares					Other Comprehensive		Retained		Shareholders'
	Shares		Amount		Capital			Shares		Amount			Income (Loss)		Earnings		Equity
Balance at April 1, 2022		28,628,907	$	3	$	420,513			4,437,439	$	(91,578	)	$	—	$	182,891	$	511,829
Ordinary shares issued from exercise of stock options		5,015		—		83			—		—			—		—		83
Ordinary shares issued from vesting of restricted share units		59,741		—		(563	)		—		—			—		—		(563	)
Ordinary shares issued from employee share purchase plan		42,065		—		929			—		—			—		—		929
Share-based compensation expense		—		—		3,509			—		—			—		—		3,509
Net income		—		—		—			—		—			—		21,537		21,537
Balance at July 1, 2022		28,735,728	$	3	$	424,471			4,437,439	$	(91,578	)	$	—	$	204,428	$	537,324

					Additional			Treasury					Accumulated				Total
For the six months ending July 1, 2022	Ordinary Shares				Paid-In			Shares					Other Comprehensive		Retained		Shareholders'
	Shares		Amount		Capital			Shares		Amount			Income (Loss)		Earnings		Equity
Balance at December 31, 2021		28,551,160	$	3	$	417,438			4,437,439	$	(91,578	)	$	—	$	174,852	$	500,715
Ordinary shares issued from exercise of stock options		47,768		—		1,038			—		—			—		—		1,038
Ordinary shares issued from vesting of restricted share units		94,735		—		(1,340	)		—		—			—		—		(1,340	)
Ordinary shares issued from employee share purchase plan		42,065		—		929			—		—			—		—		929
Share-based compensation expense		—		—		6,406			—		—			—		—		6,406
Net income		—		—		—			—		—			—		29,576		29,576
Balance at July 1, 2022		28,735,728	$	3		424,471			4,437,439	$	(91,578	)	$	—	$	204,428	$	537,324

See accompanying notes.

ICHOR HOLDINGS, LTD.

Consolidated Statements of Shareholders’ Equity (continued)

(dollars in thousands)

(unaudited)

					Additional			Treasury					Accumulated					Total
For the three months ending June 25, 2021	Ordinary Shares				Paid-In			Shares					Other Comprehensive			Retained		Shareholders'
	Shares		Amount		Capital			Shares		Amount			Income (Loss)			Earnings		Equity
Balance at March 26, 2021		28,070,251	$	3	$	404,046			4,437,439	$	(91,578	)	$	—		$	118,591	$	431,062
Ordinary shares issued from exercise of stock options		179,131		—		3,150			—		—			—			—		3,150
Ordinary shares issued from vesting of restricted share units		77,177		—		(1,251	)		—		—			—			—		(1,251	)
Share-based compensation expense		—		—		2,681			—		—			—			—		2,681
Other comprehensive loss		—		—		—			—		—			(24	)		—		(24	)
Net income		—		—		—			—		—			—			22,865		22,865
Balance at June 25, 2021		28,326,559	$	3	$	408,626			4,437,439	$	(91,578	)	$	(24	)	$	141,456	$	458,483

					Additional			Treasury					Accumulated					Total
For the six months ending June 25, 2021	Ordinary Shares				Paid-In			Shares					Other Comprehensive			Retained		Shareholders'
	Shares		Amount		Capital			Shares		Amount			Income (Loss)			Earnings		Equity
Balance at December 25, 2020		27,907,077	$	3	$	399,311			4,437,439	$	(91,578	)	$	—		$	103,953	$	411,689
Ordinary shares issued from exercise of stock options		284,731		—		5,531			—		—			—			—		5,531
Ordinary shares issued from vesting of restricted share units		107,600		—		(1,918	)		—		—			—			—		(1,918	)
Ordinary shares issued from employee share purchase plan		27,151		—		606			—		—			—			—		606
Share-based compensation expense		—		—		5,096			—		—			—			—		5,096
Other comprehensive loss		—		—		—			—		—			(24	)		—		(24	)
Net income		—		—		—			—		—			—			37,503		37,503
Balance at June 25, 2021		28,326,559	$	3	$	408,626			4,437,439	$	(91,578	)	$	(24	)	$	141,456	$	458,483

See accompanying notes.

ICHOR HOLDINGS, LTD.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Six Months Ended
	July 1, 2022		June 25, 2021
Cash flows from operating activities:
Net income	$	29,576	$	37,503
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		18,394

ICHOR HOLDINGS, LTD. [ICHR] Filings
10-Q	[2022-08-10]
10-Q	[2022-05-11]
10-K	[2022-02-28]
10-Q	[2021-11-03]
10-Q	[2021-08-04]
10-Q	[2021-05-05]
10-K	[2021-03-05]
10-Q	[2020-11-03]
10-Q	[2020-08-04]
10-Q	[2020-05-05]
10-K	[2020-03-06]
10-Q	[2019-11-06]
10-Q	[2019-08-07]
10-Q	[2019-05-08]
10-K	[2019-03-08]
10-Q	[2018-11-07]
10-Q	[2018-08-08]
10-Q	[2018-05-09]
10-K	[2018-03-13]
10-Q	[2017-11-13]
10-Q	[2017-08-11]
S-1	[2017-08-01]
10-Q	[2017-05-12]
S-1	[2017-04-13]
10-K	[2017-03-28]
S-1	[2016-11-14]