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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 April 1, 2022

OR

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 May 6, 2022, the registrant had 28,630,489 ordinary shares, $0.0001 par value per share, outstanding.

 


 

TABLE OF CONTENTS

 

 

 

 


 

PART I

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

ICHOR HOLDINGS, LTD.

Consolidated Balance Sheets

(dollars in thousands, except per share amounts)

(unaudited)

 

 

 

April 1,

2022

 

 

December 31,

2021

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

34,516

 

 

$

75,495

 

Accounts receivable, net

 

 

153,534

 

 

 

142,990

 

Inventories

 

 

263,851

 

 

 

236,133

 

Prepaid expenses and other current assets

 

 

7,662

 

 

 

8,153

 

Total current assets

 

 

459,563

 

 

 

462,771

 

Property and equipment, net

 

 

86,003

 

 

 

85,204

 

Operating lease right-of-use assets

 

 

34,054

 

 

 

29,790

 

Other noncurrent assets

 

 

12,110

 

 

 

9,166

 

Deferred tax assets, net

 

 

8,153

 

 

 

8,116

 

Intangible assets, net

 

 

84,578

 

 

 

89,927

 

Goodwill

 

 

335,902

 

 

 

335,902

 

Total assets

 

$

1,020,363

 

 

$

1,020,876

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

142,866

 

 

$

159,727

 

Accrued liabilities

 

 

21,661

 

 

 

19,066

 

Other current liabilities

 

 

14,185

 

 

 

14,377

 

Current portion of long-term debt

 

 

7,500

 

 

 

7,500

 

Current portion of lease liabilities

 

 

7,854

 

 

 

7,633

 

Total current liabilities

 

 

194,066

 

 

 

208,303

 

Long-term debt, less current portion, net

 

 

283,495

 

 

 

285,253

 

Lease liabilities, less current portion

 

 

26,563

 

 

 

22,354

 

Deferred tax liabilities, net

 

 

38

 

 

 

38

 

Other non-current liabilities

 

 

4,372

 

 

 

4,213

 

Total liabilities

 

 

508,534

 

 

 

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; 28,628,907 and 28,551,160 shares outstanding, respectively; 33,066,346 and 32,988,599 shares issued, respectively)

 

 

3

 

 

 

3

 

Additional paid in capital

 

 

420,513

 

 

 

417,438

 

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

 

 

(91,578

)

 

 

(91,578

)

Retained earnings

 

 

182,891

 

 

 

174,852

 

Total shareholders’ equity

 

 

511,829

 

 

 

500,715

 

Total liabilities and shareholders’ equity

 

$

1,020,363

 

 

$

1,020,876

 

 

See accompanying notes.

1


ICHOR HOLDINGS, LTD.

Consolidated Statements of Operations

(dollars in thousands, except per share amounts)

(unaudited)

 

 

 

Three Months Ended

 

 

 

April 1,

2022

 

 

March 26,

2021

 

Net sales

 

$

293,146

 

 

$

264,566

 

Cost of sales

 

 

249,214

 

 

 

225,054

 

Gross profit

 

 

43,932

 

 

 

39,512

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

 

4,851

 

 

 

3,515

 

Selling, general, and administrative

 

 

23,267

 

 

 

14,349

 

Amortization of intangible assets

 

 

5,349

 

 

 

3,391

 

Total operating expenses

 

 

33,467

 

 

 

21,255

 

Operating income

 

 

10,465

 

 

 

18,257

 

Interest expense, net

 

 

1,532

 

 

 

1,919

 

Other expense, net

 

 

84

 

 

 

185

 

Income before income taxes

 

 

8,849

 

 

 

16,153

 

Income tax expense

 

 

810

 

 

 

1,515

 

Net income

 

$

8,039

 

 

$

14,638

 

Net income per share:

 

 

 

 

 

 

 

 

Basic

 

$

0.28

 

 

$

0.52

 

Diluted

 

$

0.28

 

 

$

0.51

 

Shares used to compute net income per share:

 

 

 

 

 

 

 

 

Basic

 

 

28,592,629

 

 

 

28,004,248

 

Diluted

 

 

29,023,455

 

 

 

28,729,112

 

See accompanying notes.

 

2


 

ICHOR HOLDINGS, LTD.

Consolidated Statements of Shareholders’ Equity

(dollars in thousands)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Treasury

 

 

 

 

 

 

Total

 

For the three months ending April 1, 2022

 

Ordinary Shares

 

 

Paid-In

 

 

Shares

 

 

Retained

 

 

Shareholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Shares

 

 

Amount

 

 

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

 

 

42,753

 

 

 

 

 

 

955

 

 

 

 

 

 

 

 

 

 

 

 

955

 

Ordinary shares issued from vesting of restricted share units

 

 

34,994

 

 

 

 

 

 

(777

)

 

 

 

 

 

 

 

 

 

 

 

(777

)

Share-based compensation expense

 

 

 

 

 

 

 

 

2,897

 

 

 

 

 

 

 

 

 

 

 

 

2,897

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Treasury

 

 

 

 

 

 

Total

 

For the three months ending March 26, 2021

 

Ordinary Shares

 

 

Paid-In

 

 

Shares

 

 

Retained

 

 

Shareholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Shares

 

 

Amount

 

 

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

 

 

105,600

 

 

 

 

 

 

2,381

 

 

 

 

 

 

 

 

 

 

 

 

2,381

 

Ordinary shares issued from vesting of restricted share units

 

 

30,423

 

 

 

 

 

 

(667

)

 

 

 

 

 

 

 

 

 

 

 

(667

)

Ordinary shares issued from employee share purchase plan

 

 

27,151

 

 

 

 

 

 

606

 

 

 

 

 

 

 

 

 

 

 

 

606

 

Share-based compensation expense

 

 

 

 

 

 

 

 

2,415

 

 

 

 

 

 

 

 

 

 

 

 

2,415

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14,638

 

 

 

14,638

 

Balance at March 26, 2021

 

 

28,070,251

 

 

$

3

 

 

$

404,046

 

 

 

4,437,439

 

 

$

(91,578

)

 

$

118,591

 

 

$

431,062

 

 

See accompanying notes.

 

3


 

ICHOR HOLDINGS, LTD.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

Three Months Ended

 

 

 

April 1,

2022

 

 

March 26,

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

8,039

 

 

$

14,638

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

9,315

 

 

 

5,657

 

Share-based compensation

 

 

2,897

 

 

 

2,415

 

Deferred income taxes

 

 

(37

)

 

 

512

 

Amortization of debt issuance costs

 

 

117

 

 

 

242

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(10,544

)

 

 

(7,697

)

Inventories

 

 

(27,718

)

 

 

(9,306

)

Prepaid expenses and other assets

 

 

(650

)

 

 

512

 

Accounts payable

 

 

(18,209

)

 

 

22,101

 

Accrued liabilities

 

 

2,182

 

 

 

(3,467

)

Other liabilities

 

 

(1,670

)

 

 

41

 

Net cash provided by (used in) operating activities

 

 

(36,278

)

 

 

25,648

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(3,417

)

 

 

(5,400

)

Net cash used in investing activities

 

 

(3,417

)

 

 

(5,400

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Issuance of ordinary shares under share-based compensation plans

 

 

1,368

 

 

 

2,654

 

Employees' taxes paid upon vesting of restricted share units

 

 

(777

)

 

 

(667

)

Repayments on revolving credit facility

 

 

 

 

 

(30,000

)

Repayments on term loan

 

 

(1,875

)

 

 

(2,188

)

Net cash used in financing activities

 

 

(1,284

)

 

 

(30,201

)

Net decrease in cash

 

 

(40,979

)

 

 

(9,953

)

Cash at beginning of period

 

 

75,495

 

 

 

252,899

 

Cash at end of period

 

$

34,516

 

 

$

242,946

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

Cash paid during the period for interest

 

$

1,395

 

 

$

1,842

 

Cash paid during the period for taxes, net of refunds

 

$

106

 

 

$

667

 

Supplemental disclosures of non-cash activities:

 

 

 

 

 

 

 

 

Capital expenditures included in accounts payable

 

$

2,278

 

 

$

2,273

 

Right-of-use assets obtained in exchange for new operating lease liabilities, including those acquired through acquisitions

 

$

6,067

 

 

$

364

 

See accompanying notes.

 

 

4


 

 

ICHOR HOLDINGS, LTD.

Notes to Consolidated Financial Statements

(dollar figures in tables in thousands, except per share amounts)

(unaudited)

Note 1 – Basis of Presentation and Selected Significant Accounting Policies

Basis of Presentation

These consolidated unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”). All intercompany balances and transactions have been eliminated upon consolidation. All dollar figures presented in tables in the notes to consolidated financial statements are in thousands, except per share amounts. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted as permitted by the SEC's rules and regulations for interim reporting. These consolidated financial statements should be read in conjunction with our audited financial statements and notes thereto included in our Annual Report on Form 10‑K for the year ended December 31, 2021.

Year End

We use a 52- or 53-week fiscal year ending on the last Friday in December. The three months ended April 1, 2022 and March 26, 2021 were both 13 weeks. References to the first 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.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods presented. We base our estimates and judgments on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Actual results could differ from the estimates made by management. 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

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.

Fair Value of Financial Instruments

The carrying values of our financial instruments, including cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued liabilities, and long-term debt, net of unamortized debt issuance costs, approximate fair value.

Revenue Recognition

We recognize revenue when control of promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. This amount is recorded as net sales in our consolidated statements of operations.

Transaction price – In most of our contracts, prices are generally determined by a customer-issued purchase order and generally remain fixed over the duration of the contract. Certain contracts contain variable consideration, including early-payment discounts and rebates. When a contract includes variable consideration, we evaluate the estimate of the variable consideration to determine whether the estimate needs to be constrained; therefore, we include the variable consideration in the transaction price only to the extent that it is probable that a significant reversal will not occur. Variable consideration estimates are updated at each reporting date. Historically, we have not incurred significant costs to obtain a contract. All amounts billed to a customer relating to shipping and handling are classified as net sales, while all costs incurred by us for shipping and handling are classified as cost of sales.

5


 

Performance obligations – Substantially all of our performance obligations pertain to promised goods (“products”), which are primarily comprised of fluid delivery subsystems, weldments, and other components. Most of our contracts contain a single performance obligation and are generally completed within twelve months. Product sales are recognized at a point-in-time, generally upon delivery, as such term is defined within the contract, as that is when control of the promised good has transferred. Products are covered by a standard assurance warranty, generally extended for a period of one to two years depending on the customer, which promises that delivered products conform to contract specifications. As such, we account for such warranties under ASC 460, Guarantees, and not as a separate performance obligation.

Contract balances – Accounts receivable represents our unconditional right to receive consideration from our customers. Accounts receivable are carried at invoice price less an estimate for doubtful accounts and estimated payment discounts. Payment terms vary by customer but are generally due within 15‑60 days. Historically, we have not incurred significant payment issues with our customers. We had no significant contract assets or liabilities on our consolidated balance sheets in any of the periods presented.

Accounting Pronouncements Recently Adopted

In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2021‑08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805). This ASU requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities (deferred revenue) from acquired contracts using the revenue recognition guidance in Topic 606. 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.

Note 2 – Inventories

Inventories consist of the following:

 

 

 

April 1,

2022

 

 

December 31,

2021

 

Raw materials

 

$

180,541

 

 

$

159,366

 

Work in process

 

 

66,912

 

 

 

62,537

 

Finished goods

 

 

31,336

 

 

 

28,281

 

Excess and obsolete adjustment

 

 

(14,938

)

 

 

(14,051

)

Total inventories

 

$

263,851

 

 

$

236,133

 

 

Note 3 – Property and Equipment and Other Noncurrent Assets

Property and equipment consist of the following:

 

 

 

April 1,

2022

 

 

December 31,

2021

 

Machinery

 

$

82,742

 

 

$

80,953

 

Leasehold improvements

 

 

37,174

 

 

 

36,706

 

Computer software, hardware, and equipment

 

 

8,031

 

 

 

8,031

 

Office furniture, fixtures and equipment

 

 

1,169

 

 

 

1,168

 

Vehicles

 

 

284

 

 

 

284

 

Construction-in-process

 

 

11,054

 

 

 

8,565

 

 

 

 

140,454

 

 

 

135,707

 

Less accumulated depreciation

 

 

(54,451

)

 

 

(50,503

)

Total property and equipment, net

 

$

86,003

 

 

$

85,204

 

 

Depreciation expense was $4.0 million and $2.3 million for the first quarter of 2022 and 2021, respectively.

6


 

Cloud Computing Implementation Costs

We capitalize implementation costs associated with hosting arrangement that are service contracts. These costs are recorded to prepaid expenses or other noncurrent assets. 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

 

$

8,054

 

Costs capitalized during the period

 

 

3,074

 

Capitalized costs amortized during the period

 

 

(152

)

Capitalized cloud computing implementation costs as of April 1, 2022

 

$

10,976

 

 

Note 4 – Intangible Assets

Definite‑lived intangible assets consist of the following:

 

 

 

April 1, 2022

 

 

Gross value

 

 

Accumulated

amortization

 

 

Accumulated

impairment

charges

 

 

Carrying

amount

 

 

Weighted

average

useful life

Customer relationships

 

 

120,962

 

 

 

(44,355

)

 

 

 

 

 

76,607

 

 

8.5 years

Developed technology

 

 

11,047

 

 

 

(3,755

)

 

 

 

 

 

7,292

 

 

10.0 years

Order backlog

 

 

2,600

 

 

 

(1,921

)

 

 

 

 

 

679

 

 

6 months

Total intangible assets

 

$

134,609

 

 

$

(50,031

)

 

$

 

 

$

84,578

 

 

 

 

 

 

December 31, 2021

 

 

Gross value

 

 

Accumulated

amortization

 

 

Accumulated

impairment

charges

 

 

Carrying

amount

 

 

Weighted

average

useful life

Customer relationships

 

 

146,569

 

 

 

(65,953

)

 

 

 

 

 

80,616

 

 

8.7 years

Developed technology

 

 

11,047

 

 

 

(3,483

)

 

 

 

 

 

7,564

 

 

10.0 years

Order backlog

 

 

2,600

 

 

 

(853

)

 

 

 

 

 

1,747

 

 

6 months

Total intangible assets

 

$

160,216

 

 

$

(70,289

)

 

$

 

 

$

89,927

 

 

 

 

 

Note 5 – Leases

Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. For purposes of calculating operating lease ROU assets and operating lease liabilities, we use the non-cancellable lease term plus options to extend that we are reasonably certain to take. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Our leases generally do not provide an implicit rate. As such, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

We lease facilities under various non-cancellable operating leases expiring through 2031. In addition to base rental payments, we are generally responsible for our proportionate share of operating expenses, including facility maintenance, insurance, and property taxes. As these amounts are variable, they are not included in lease liabilities. As of April 1, 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

 

 

 

April 1,

2022

 

 

March 26,

2021

 

Operating lease cost

 

$

2,045

 

 

$

1,381

 

 

7


 

 

Supplemental cash flow information related to leases is as follows:

 

 

 

Three Months Ended

 

 

 

April 1,

2022

 

 

March 26,

2021

 

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

 

 

 

 

 

 

 

 

Operating cash flows from operating leases

 

$

1,823

 

 

$

1,376

 

 

Supplemental balance sheet information related to leases is as follows:

 

 

 

April 1,

2022

 

 

March 26,

2021

 

Weighted-average remaining lease term of operating leases

 

5.8 years

 

 

2.2 years

 

Weighted-average discount rate of operating leases

 

2.2%

 

 

4.4%

 

 

Future minimum lease payments under non-cancelable leases as of April 1, 2022 are as follows:

 

2022, remaining

 

$

6,209

 

2023

 

 

6,451

 

2024

 

 

5,711

 

2025

 

 

5,333

 

2026

 

 

4,857

 

Thereafter

 

 

7,917

 

Total future minimum lease payments

 

 

36,478

 

Less imputed interest

 

 

(2,061

)

Total lease liabilities

 

$

34,417

 

 

Note 6 – Income Taxes

Income tax information for the periods reported are as follows:

 

 

 

Three Months Ended

 

 

 

April 1,

2022

 

 

March 26,

2021

 

Income tax expense

 

$

810

 

 

$

1,515

 

Income before income taxes

 

$

8,849

 

 

$

16,153

 

Effective income tax rate

 

 

9.2

%

 

 

9.4

%

 

Our effective tax rates for the first quarter of 2022 and 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 $3.6 million at April 1, 2022. 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 April 1, 2022, we were not under examination by tax authorities.

Note 7 – Employee Benefit Programs

401(k) Plan

We sponsor a 401(k) plan available to employees of our U.S.‑based subsidiaries. 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 matching maximum of 4% of a participant’s annual compensation. Matching contributions were $1.0 million and $0.6 million for the first quarter of 2022 and 2021, respectively.

8


 

Note 8 – Long-Term Debt

Long‑term debt consists of the following:

 

 

 

April 1,

2022

 

 

December 31,

2021

 

 

Term loan

 

$

148,125

 

 

$

150,000

 

 

Revolving credit facility

 

 

145,000

 

 

 

145,000

 

 

Total principal amount of long-term debt

 

 

293,125

 

 

 

295,000

 

 

Less unamortized debt issuance costs

 

 

(2,130

)

 

 

(2,247

)

 

Total long-term debt, net

 

 

290,995

 

 

 

292,753

 

 

Less current portion

 

 

(7,500

)

 

 

(7,500

)

 

Total long-term debt, less current portion, net

 

$

283,495

 

 

$

285,253

 

 

 

On October 29, 2021, we entered into an amended and restated credit agreement, which includes a group of financial institutions as direct lenders underlying the agreement. The credit agreement includes a $150.0 million term loan facility and a $250.0 million revolving credit facility (together, “credit facilities”). Term loan principal payments of $1.9 million are due on a quarterly basis. The credit facilities mature on October 29, 2026.

Interest is charged at either the Base Rate or the Bloomberg Short-Term Bank Yield (“BSBY”) Rate (as such terms are defined in the credit agreement) at our option, plus an applicable margin. 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 applicable margin on Base Rate and BSBY Rate loans is 0.3751.375% and 1.3752.375% per annum, respectively, depending on our leverage ratio. We are also charged a commitment fee of 0.175%-0.350% 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 April 1, 2022, our credit facilities bore interest under the BSBY rate option of 2.01%.

Note 9 – Share‑Based Compensation

The 2016 Omnibus Incentive Plan (the “2016 Plan”) provides for grants of share‑based awards to employees, directors, and consultants. Awards may be in the form of stock options (“options”), tandem and non‑tandem stock appreciation rights, restricted share awards or restricted share units (“RSUs”), performance awards, and other share‑based awards. Forfeited or expired awards are returned to the incentive plan pool for future grants. Awards generally vest over four years, 25% on the first anniversary of the date of grant and quarterly thereafter over the remaining 3 years. Upon vesting of RSUs, employees may elect to have shares 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 $2.9 million and $2.4 million for the first quarter of 2022 and 2021.

Stock Options

The following table summarizes option activity:

 

 

 

Number of Stock Options

 

 

 

 

 

 

 

 

 

 

 

 

 

Service

condition

 

 

Weighted average exercise price per share

 

 

Weighted average remaining contractual term

 

Aggregate intrinsic value

 

Outstanding, December 31, 2021

 

 

921,469

 

 

$

23.20

 

 

 

 

 

 

 

Granted

 

 

 

 

$