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 third quarter 2023 financial results.
Third quarter 2023 highlights:
- Revenues of $197 million, at the upper end of the guidance
range communicated in August;
- Gross margin of 12.2% on a GAAP basis and 13.1% on a non‑GAAP
basis; and
- Earnings per share of $(0.36) on a GAAP basis and $0.07 on a
non-GAAP basis.
"As expected, in Q3 Ichor's revenues returned to sequential
growth, and rebounded near the upper end of our guidance range with
a 6% increase compared to Q2," commented Jeff Andreson, chief
executive officer. "With a similar level of revenues expected again
for Q4, our full year expectations are consistent with our
forecasts communicated throughout the year. We continue to be
focused on maintaining critical R&D investments to enable our
technology roadmap, which includes developing proprietary,
higher-margin new products and winning evaluation programs that
will help drive revenue outperformance and strong operating
leverage as our revenues rebound in the coming quarters and
years."
Q3 2023
Q2 2023
Q3 2022
(dollars in thousands, except per
share amounts)
U.S. GAAP Financial Results:
Net sales
$
196,761
$
185,008
$
355,643
Gross margin
12.2
%
13.9
%
17.9
%
Operating margin
(2.5
)%
(1.6
)%
9.2
%
Net income (loss)
$
(10,425
)
$
(20,656
)
$
29,031
Diluted EPS
$
(0.36
)
$
(0.71
)
$
1.00
Q3 2023
Q2 2023
Q3 2022
(dollars in thousands, except per
share amounts)
Non-GAAP Financial Results:
Gross margin
13.1
%
14.5
%
18.0
%
Operating margin
2.2
%
2.9
%
11.6
%
Net income
$
2,097
$
707
$
35,354
Diluted EPS
$
0.07
$
0.02
$
1.22
U.S. GAAP Financial Results
Overview
For the third quarter of 2023, revenue was $196.8 million, net
loss was $(10.4) million, and net loss per basic and diluted share
(“diluted EPS”) was $(0.36). This compares to revenue of $185.0
million and $355.6 million, net income (loss) of $(20.7) million
and $29.0 million, and diluted EPS of $(0.71) and $1.00, for the
second quarter of 2023 and third quarter of 2022, respectively.
Non-GAAP Financial Results
Overview
For the third quarter of 2023, non-GAAP net income was $2.1
million and non-GAAP diluted EPS was $0.07. This compares to
non-GAAP net income of $0.7 million and $35.4 million, and non-GAAP
diluted EPS of $0.02 and $1.22, for the second quarter of 2023 and
third quarter of 2022, respectively.
Fourth Quarter 2023 Financial
Outlook
For the fourth quarter of 2023, we expect revenue to be in the
range of $190.0 million to $205.0 million. We expect GAAP diluted
EPS to be in the range of $(0.30) to $(0.20) and non-GAAP diluted
EPS to be in the range of $(0.03) to $0.17.
This outlook for non‑GAAP diluted EPS excludes amortization of
intangible assets of approximately $3.2 million and share-based
compensation expense of approximately $4.7 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 third quarter of 2023 with cash and cash
equivalents of $75.9 million, a decrease of $8.7 million from the
prior quarter and a decrease of $10.5 million from the prior year
ended December 30, 2022. The decrease of $8.7 million during the
third quarter was primarily due to net payments on our credit
facilities of $11.9 million and capital expenditures of $2.4
million, partially offset by net cash provided by operating
activities of $4.0 million. The decrease during the nine months
ended September 29, 2023 was primarily due to net payments on our
credit facilities of $20.6 million and capital expenditures of
$13.2 million, partially offset by net cash provided by operating
activities of $20.1 million.
Our cash provided by operating activities of $20.1 million
during the nine months ended September 29, 2023 consisted of net
loss of $31.1 million, offset by net non-cash charges of $48.4
million, consisting primarily of depreciation and amortization of
$26.0 million, share-based compensation expense of $12.7 million,
and deferred income taxes of $9.4 million, and a decrease in our
net operating assets and liabilities of $2.7 million. Deferred
taxes consists primarily of an $11.1 million charge related to a
valuation allowance recorded against our U.S. federal and state
deferred tax assets in the second quarter of 2023.
The decrease in our net operating assets and liabilities of $2.7
million during the nine months ended September 29, 2023 was
primarily due to a decrease in accounts receivable and inventories
of $33.0 million and $16.8 million, respectively, partially offset
by a decrease in accounts payable and accrued and other liabilities
of $34.8 million and $20.9 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 certain 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 third quarter
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/register/ichor110623/en. To
listen via telephone, please call (877) 407‑0989 (domestic) or +1
(201) 389‑0921 (international), conference ID: 13741625. 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. 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. The three-month periods ended September
29, 2023, June 30, 2023, and September 30, 2022 were each 13 weeks.
References to the third quarter of 2023, second quarter of 2023,
and third quarter of 2022 relate to the three-month periods 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. Words such as
"guidance," "expects," "intends," “may,” “will,” "projects,"
"plans," “predicts,” "believes," “could,” "estimates," "targets,"
"anticipates," “look forward,” and similar expressions are used to
identify these forward-looking statements.
Examples of forward-looking statements include, but are not
limited to, statements regarding financial results for our fourth
fiscal quarter of 2023, statements regarding the impacts of current
macroeconomic conditions, U.S. export restrictions on
semiconductor-related goods and services, materials or component
shortages from suppliers, as well as any other statement that does
not directly relate to any historical or current fact.
Forward-looking statements are based on current expectations and
assumptions, which may not prove to be accurate. These statements
are not guarantees and are subject to risks, uncertainties and
changes in circumstances that are difficult to predict. Many
factors could cause actual results to differ materially and
adversely from these forward-looking statements, including: (1)
geopolitical, economic and market conditions, including heightened
inflation, slower growth or recession, changes to fiscal and
monetary policy, higher interest rates, currency fluctuations,
challenges in the supply chain and any disruptions in European
economies as a result of the conflict in Ukraine, (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, (11) dependence on a limited number of suppliers, and
(12) the impact of the COVID‑19 pandemic, any related or unrelated
public health threat or fear of such event on economic activity, us
and our customers, suppliers, employees, and other business
relations, including, but not limited to, demand for our products,
workforce availability, and costs to manufacture our products.
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)
September 29,
2023
June 30,
2023
December 30,
2022
September 30,
2022
Assets
Current assets:
Cash and cash equivalents
$
75,933
$
84,608
$
86,470
$
56,463
Accounts receivable, net
103,350
95,760
136,321
183,297
Inventories
266,900
266,190
283,660
290,658
Prepaid expenses and other current
assets
5,142
5,507
7,007
5,164
Total current assets
451,325
452,065
513,458
535,582
Property and equipment, net
96,240
98,914
98,055
95,577
Operating lease right-of-use assets
36,948
39,184
40,557
35,723
Other noncurrent assets
12,079
12,422
12,926
13,349
Deferred tax assets, net
1,934
1,273
11,322
11,138
Intangible assets, net
60,456
64,096
72,022
75,964
Goodwill
335,402
335,402
335,402
335,402
Total assets
$
994,384
$
1,003,356
$
1,083,742
$
1,102,735
Liabilities and Shareholders’
Equity
Current liabilities:
Accounts payable
$
74,011
$
63,868
$
110,165
$
141,914
Accrued liabilities
16,176
16,753
23,616
26,363
Other current liabilities
8,588
8,783
15,815
21,224
Current portion of long-term debt
7,500
7,500
7,500
7,500
Current portion of lease liabilities
9,393
9,500
9,196
8,062
Total current liabilities
115,668
106,404
166,292
205,063
Long-term debt, less current portion,
net
272,942
284,701
293,218
294,977
Lease liabilities, less current
portion
28,556
30,570
31,828
28,103
Deferred tax liabilities, net
29
29
29
38
Other non-current liabilities
4,510
4,349
4,879
4,709
Total liabilities
421,705
426,053
496,246
532,890
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; 29,375,388, 29,241,561, 28,861,949,
and 28,801,274 shares outstanding, respectively; 33,812,827,
33,679,000, 33,299,388, and 33,238,713 shares issued,
respectively)
3
3
3
3
Additional paid in capital
447,684
441,883
431,415
427,961
Treasury shares at cost (4,437,439
shares)
(91,578
)
(91,578
)
(91,578
)
(91,578
)
Retained earnings
216,570
226,995
247,656
233,459
Total shareholders’ equity
572,679
577,303
587,496
569,845
Total liabilities and shareholders’
equity
$
994,384
$
1,003,356
$
1,083,742
$
1,102,735
ICHOR HOLDINGS, LTD.
Consolidated Statement of
Operations
(in thousands, except share and
per share amounts)
(unaudited)
Three Months Ended
Nine Months Ended
September 29,
2023
June 30,
2023
September 30,
2022
September 29,
2023
September 30,
2022
Net sales
$
196,761
$
185,008
$
355,643
$
607,639
$
978,349
Cost of sales
172,692
159,266
292,083
524,588
815,396
Gross profit
24,069
25,742
63,560
83,051
162,953
Operating expenses:
Research and development
5,188
5,188
4,859
14,689
14,617
Selling, general, and administrative
20,066
19,500
22,195
59,733
66,565
Amortization of intangible assets
3,639
3,960
3,959
11,565
13,963
Total operating expenses
28,893
28,648
31,013
85,987
95,145
Operating income (loss)
(4,824
)
(2,906
)
32,547
(2,936
)
67,808
Interest expense, net
5,136
5,030
3,249
14,716
6,844
Other expense (income), net
29
100
(210
)
913
(674
)
Income (loss) before income taxes
(9,989
)
(8,036
)
29,508
(18,565
)
61,638
Income tax expense
436
12,620
477
12,521
3,031
Net income (loss)
$
(10,425
)
$
(20,656
)
$
29,031
$
(31,086
)
$
58,607
Net income (loss) per share:
Basic
$
(0.36
)
$
(0.71
)
$
1.01
$
(1.07
)
$
2.04
Diluted
$
(0.36
)
$
(0.71
)
$
1.00
$
(1.07
)
$
2.02
Shares used to compute net income (loss)
per share:
Basic
29,297,347
29,116,413
28,769,135
29,132,879
28,675,898
Diluted
29,297,347
29,116,413
29,050,396
29,132,879
28,965,834
ICHOR HOLDINGS, LTD.
Consolidated Statements of
Cash Flows
(in thousands)
(unaudited)
Three Months Ended
Nine Months Ended
September 29,
2023
June 30,
2023
September 30,
2022
September 29,
2023
September 30,
2022
Cash flows from operating activities:
Net income (loss)
$
(10,425
)
$
(20,656
)
$
29,031
$
(31,086
)
$
58,607
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization
8,891
8,656
8,349
26,036
26,743
Share-based compensation
4,752
4,277
3,719
12,666
10,125
Deferred income taxes
(661
)
11,072
(1,891
)
9,388
(3,022
)
Amortization of debt issuance costs
116
117
116
349
349
Changes in operating assets and
liabilities, net of acquisitions:
Accounts receivable, net
(7,590
)
26,933
(24,894
)
32,971
(40,307
)
Inventories
(710
)
5,348
(331
)
16,760
(54,525
)
Prepaid expenses and other assets
2,624
3,281
1,570
8,610
4,031
Accounts payable
10,291
(2,029
)
(6,055
)
(34,756
)
(18,508
)
Accrued liabilities
(1,145
)
(4,164
)
4,237
(7,106
)
6,823
Other liabilities
(2,155
)
(5,892
)
5,723
(13,774
)
2,363
Net cash provided by (used in) operating
activities
3,988
26,943
19,574
20,058
(7,321
)
Cash flows from investing activities:
Capital expenditures
(2,405
)
(4,015
)
(8,045
)
(13,239
)
(22,458
)
Cash paid for acquisitions, net of cash
acquired
—
—
500
—
500
Net cash used in investing activities
(2,405
)
(4,015
)
(7,545
)
(13,239
)
(21,958
)
Cash flows from financing activities:
Issuance of ordinary shares under
share-based compensation plans
2,170
1,355
1,126
6,151
3,093
Employees' taxes paid upon vesting of
restricted share units
(553
)
(1,637
)
(881
)
(2,882
)
(2,221
)
Borrowings on revolving credit
facility
—
—
—
—
25,000
Repayments on revolving credit
facility
(10,000
)
(5,000
)
—
(15,000
)
(10,000
)
Repayments on term loan
(1,875
)
(1,875
)
(1,875
)
(5,625
)
(5,625
)
Net cash provided by (used in) financing
activities
(10,258
)
(7,157
)
(1,630
)
(17,356
)
10,247
Net increase (decrease) in cash
(8,675
)
15,771
10,399
(10,537
)
(19,032
)
Cash at beginning of period
84,608
68,837
46,064
86,470
75,495
Cash at end of period
$
75,933
$
84,608
$
56,463
$
75,933
$
56,463
Supplemental disclosures of cash flow
information:
Cash paid during the period for
interest
$
5,281
$
5,106
$
3,162
$
15,132
$
6,457
Cash paid during the period for taxes, net
of refunds
$
512
$
3,236
$
836
$
3,852
$
2,335
Supplemental disclosures of non-cash
activities:
Capital expenditures included in accounts
payable
$
145
$
293
$
1,625
$
145
$
1,625
Right-of-use assets obtained in exchange
for new operating lease liabilities, including those acquired
through acquisitions
$
—
$
842
$
1,571
$
3,103
$
11,158
ICHOR HOLDINGS, LTD.
Reconciliation of U.S. GAAP
Gross Profit to Non-GAAP Gross Profit
(dollars in thousands)
(unaudited)
Three Months Ended
Nine Months Ended
September 29,
2023
June 30,
2023
September 30,
2022
September 29,
2023
September 30,
2022
U.S. GAAP gross profit
$
24,069
$
25,742
$
63,560
$
83,051
$
162,953
Non-GAAP adjustments:
Share-based compensation
840
1,091
553
2,352
1,555
Fair value adjustment to inventory from
acquisitions (1)
—
—
—
—
2,492
Other (2)
774
—
—
2,061
—
Non-GAAP gross profit
$
25,683
$
26,833
$
64,113
$
87,464
$
167,000
U.S. GAAP gross margin
12.2
%
13.9
%
17.9
%
13.7
%
16.7
%
Non-GAAP gross margin
13.1
%
14.5
%
18.0
%
14.4
%
17.1
%
(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
Nine Months Ended
September 29,
2023
June 30,
2023
September 30,
2022
September 29,
2023
September 30,
2022
U.S. GAAP operating income (loss)
$
(4,824
)
$
(2,906
)
$
32,547
$
(2,936
)
$
67,808
Non-GAAP adjustments:
Amortization of intangible assets
3,639
3,960
3,959
11,565
13,963
Share-based compensation
4,752
4,277
3,719
12,666
10,125
Settlement loss (1)
—
—
1,046
—
4,146
Fair value adjustment to inventory from
acquisitions (2)
—
—
—
—
2,492
Acquisition costs (3)
—
—
—
—
296
Other (4)
793
—
—
2,117
—
Non-GAAP operating income
$
4,360
$
5,331
$
41,271
$
23,412
$
98,830
U.S. GAAP operating margin
(2.5
)%
(1.6
)%
9.2
%
(0.5
)%
6.9
%
Non-GAAP operating margin
2.2
%
2.9
%
11.6
%
3.9
%
10.1
%
(1)
During the first and third quarters of
2022, we recorded non-recurring 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
(in thousands, except share and
per share amounts)
(unaudited)
Three Months Ended
Nine Months Ended
September 29,
2023
June 30,
2023
September 30,
2022
September 29,
2023
September 30,
2022
U.S. GAAP net income (loss)
$
(10,425
)
$
(20,656
)
$
29,031
$
(31,086
)
$
58,607
Non-GAAP adjustments (1):
Amortization of intangible assets
3,639
3,960
3,959
11,565
13,963
Share-based compensation
4,752
4,277
3,719
12,666
10,125
Settlement loss (2)
—
—
1,046
—
4,146
Fair value adjustment to inventory from
acquisitions (3)
—
—
—
—
2,492
Acquisition costs (4)
—
—
—
—
296
Other (5)
793
—
—
2,117
—
Tax adjustments related to non-GAAP
adjustments (6)
3,338
2,032
(2,401
)
7,576
(5,771
)
Tax expense from valuation allowance
(7)
—
11,094
—
11,094
—
Non-GAAP net income
$
2,097
$
707
$
35,354
$
13,932
$
83,858
U.S. GAAP diluted EPS
$
(0.36
)
$
(0.71
)
$
1.00
$
(1.07
)
$
2.02
Non-GAAP diluted EPS
$
0.07
$
0.02
$
1.22
$
0.47
$
2.90
Shares used to compute non-GAAP diluted
EPS
29,733,904
29,492,966
29,050,396
29,507,060
28,965,834
(1)
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".
(2)
During the first and third quarters of
2022, we recorded non-recurring loss accruals of $3.1 million and
$1.0 million, respectively, relating to expected settlements of
employment-related legal matters.
(3)
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.
(4)
Included in this amount are
transaction-related costs incurred in connection with our
acquisition of IMG.
(5)
Included in this amount are severance
costs associated with our global reduction-in-force programs.
(6)
Adjusts U.S. GAAP income tax expense for
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 7 below.
(7)
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 in, 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 (Used in) Operating Activities to Free Cash
Flow
(in thousands)
(unaudited)
Three Months Ended
Nine Months Ended
September 29,
2023
June 30,
2023
September 30,
2022
September 29,
2023
September 30,
2022
Net cash provided by (used in) operating
activities
$
3,988
$
26,943
$
19,574
$
20,058
$
(7,321
)
Capital expenditures
(2,405
)
(4,015
)
(8,045
)
(13,239
)
(22,458
)
Free cash flow
$
1,583
$
22,928
$
11,529
$
6,819
$
(29,779
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231106128293/en/
Greg Swyt, CFO, 510-897-5200 Claire McAdams, IR & Strategic
Initiatives, 530-265-9899 ir@ichorsystems.com
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