false Q2 0001652535 --12-31 00-0000000 P15D true 2021-01-01 true 0001652535 2020-12-26 2021-06-25 xbrli:shares 0001652535 2021-07-29 iso4217:USD 0001652535 2021-06-25 0001652535 2020-12-25 iso4217:USD xbrli:shares 0001652535 2021-03-27 2021-06-25 0001652535 2020-03-28 2020-06-26 0001652535 2019-12-28 2020-06-26 0001652535 us-gaap:CommonStockMember 2021-03-26 0001652535 us-gaap:AdditionalPaidInCapitalMember 2021-03-26 0001652535 us-gaap:TreasuryStockMember 2021-03-26 0001652535 us-gaap:RetainedEarningsMember 2021-03-26 0001652535 2021-03-26 0001652535 us-gaap:CommonStockMember 2021-03-27 2021-06-25 0001652535 us-gaap:AdditionalPaidInCapitalMember 2021-03-27 2021-06-25 0001652535 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-03-27 2021-06-25 0001652535 us-gaap:RetainedEarningsMember 2021-03-27 2021-06-25 0001652535 us-gaap:CommonStockMember 2021-06-25 0001652535 us-gaap:AdditionalPaidInCapitalMember 2021-06-25 0001652535 us-gaap:TreasuryStockMember 2021-06-25 0001652535 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-06-25 0001652535 us-gaap:RetainedEarningsMember 2021-06-25 0001652535 us-gaap:CommonStockMember 2020-12-25 0001652535 us-gaap:AdditionalPaidInCapitalMember 2020-12-25 0001652535 us-gaap:TreasuryStockMember 2020-12-25 0001652535 us-gaap:RetainedEarningsMember 2020-12-25 0001652535 us-gaap:CommonStockMember 2020-12-26 2021-06-25 0001652535 us-gaap:AdditionalPaidInCapitalMember 2020-12-26 2021-06-25 0001652535 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-12-26 2021-06-25 0001652535 us-gaap:RetainedEarningsMember 2020-12-26 2021-06-25 0001652535 us-gaap:CommonStockMember 2020-03-27 0001652535 us-gaap:AdditionalPaidInCapitalMember 2020-03-27 0001652535 us-gaap:TreasuryStockMember 2020-03-27 0001652535 us-gaap:RetainedEarningsMember 2020-03-27 0001652535 2020-03-27 0001652535 us-gaap:CommonStockMember 2020-03-28 2020-06-26 0001652535 us-gaap:AdditionalPaidInCapitalMember 2020-03-28 2020-06-26 0001652535 us-gaap:RetainedEarningsMember 2020-03-28 2020-06-26 0001652535 us-gaap:CommonStockMember 2020-06-26 0001652535 us-gaap:AdditionalPaidInCapitalMember 2020-06-26 0001652535 us-gaap:TreasuryStockMember 2020-06-26 0001652535 us-gaap:RetainedEarningsMember 2020-06-26 0001652535 2020-06-26 0001652535 us-gaap:CommonStockMember 2019-12-27 0001652535 us-gaap:AdditionalPaidInCapitalMember 2019-12-27 0001652535 us-gaap:TreasuryStockMember 2019-12-27 0001652535 us-gaap:RetainedEarningsMember 2019-12-27 0001652535 2019-12-27 0001652535 us-gaap:CommonStockMember 2019-12-28 2020-06-26 0001652535 us-gaap:AdditionalPaidInCapitalMember 2019-12-28 2020-06-26 0001652535 us-gaap:RetainedEarningsMember 2019-12-28 2020-06-26 0001652535 srt:MinimumMember 2020-12-26 2021-06-25 0001652535 srt:MaximumMember 2020-12-26 2021-06-25 0001652535 2021-06-26 2021-06-25 0001652535 us-gaap:AccountingStandardsUpdate201912Member 2021-06-25 0001652535 us-gaap:MachineryAndEquipmentMember 2021-06-25 0001652535 us-gaap:MachineryAndEquipmentMember 2020-12-25 0001652535 us-gaap:LeaseholdImprovementsMember 2021-06-25 0001652535 us-gaap:LeaseholdImprovementsMember 2020-12-25 0001652535 us-gaap:ComputerSoftwareIntangibleAssetMember 2021-06-25 0001652535 us-gaap:ComputerSoftwareIntangibleAssetMember 2020-12-25 0001652535 us-gaap:FurnitureAndFixturesMember 2021-06-25 0001652535 us-gaap:FurnitureAndFixturesMember 2020-12-25 0001652535 us-gaap:VehiclesMember 2021-06-25 0001652535 us-gaap:VehiclesMember 2020-12-25 0001652535 us-gaap:ConstructionInProgressMember 2021-06-25 0001652535 us-gaap:ConstructionInProgressMember 2020-12-25 0001652535 us-gaap:TrademarksMember 2021-06-25 0001652535 us-gaap:CustomerRelationshipsMember 2021-06-25 0001652535 us-gaap:DevelopedTechnologyRightsMember 2021-06-25 0001652535 us-gaap:TrademarksMember srt:WeightedAverageMember 2020-12-26 2021-06-25 0001652535 us-gaap:CustomerRelationshipsMember srt:WeightedAverageMember 2020-12-26 2021-06-25 0001652535 us-gaap:DevelopedTechnologyRightsMember srt:WeightedAverageMember 2020-12-26 2021-06-25 0001652535 us-gaap:TrademarksMember 2020-12-25 0001652535 us-gaap:CustomerRelationshipsMember 2020-12-25 0001652535 us-gaap:DevelopedTechnologyRightsMember 2020-12-25 0001652535 us-gaap:TrademarksMember srt:WeightedAverageMember 2019-12-28 2020-12-25 0001652535 us-gaap:CustomerRelationshipsMember srt:WeightedAverageMember 2019-12-28 2020-12-25 0001652535 us-gaap:DevelopedTechnologyRightsMember srt:WeightedAverageMember 2019-12-28 2020-12-25 ichr:Operatinglease 0001652535 2021-03-26 2021-06-25 0001652535 2020-03-27 2020-06-26 0001652535 2019-12-27 2020-06-26 xbrli:pure 0001652535 ichr:TermLoanFacilityMember 2021-06-25 0001652535 ichr:TermLoanFacilityMember 2020-12-25 0001652535 us-gaap:RevolvingCreditFacilityMember 2021-06-25 0001652535 us-gaap:RevolvingCreditFacilityMember 2020-12-25 0001652535 ichr:CreditAgreementMember 2018-02-15 0001652535 ichr:TermLoanFacilityMember ichr:CreditAgreementMember 2018-02-15 0001652535 us-gaap:RevolvingCreditFacilityMember ichr:CreditAgreementMember 2018-02-15 0001652535 ichr:TermLoanFacilityMember ichr:CreditAgreementMember 2020-12-26 2021-06-25 0001652535 ichr:TermLoanAndRevolvingCreditFacilityMember ichr:CreditAgreementMember 2020-12-26 2021-06-25 0001652535 ichr:CreditAgreementMember 2020-12-26 2021-06-25 0001652535 ichr:FederalFundRateMember ichr:CreditAgreementMember 2018-02-15 2018-02-15 0001652535 us-gaap:EurodollarMember ichr:CreditAgreementMember 2018-02-15 2018-02-15 0001652535 ichr:CreditAgreementMember us-gaap:InterestRateFloorMember 2018-02-15 2018-02-15 0001652535 us-gaap:BaseRateMember srt:MinimumMember ichr:CreditAgreementMember 2018-02-15 2018-02-15 0001652535 us-gaap:BaseRateMember srt:MaximumMember ichr:CreditAgreementMember 2018-02-15 2018-02-15 0001652535 us-gaap:EurodollarMember srt:MinimumMember ichr:CreditAgreementMember 2018-02-15 2018-02-15 0001652535 us-gaap:EurodollarMember srt:MaximumMember ichr:CreditAgreementMember 2018-02-15 2018-02-15 0001652535 srt:MinimumMember us-gaap:RevolvingCreditFacilityMember ichr:CreditAgreementMember 2018-02-15 2018-02-15 0001652535 srt:MaximumMember us-gaap:RevolvingCreditFacilityMember ichr:CreditAgreementMember 2018-02-15 2018-02-15 0001652535 us-gaap:BaseRateMember ichr:CreditAgreementMember 2020-12-26 2021-06-25 0001652535 us-gaap:EurodollarMember ichr:CreditAgreementMember 2020-12-26 2021-06-25 0001652535 us-gaap:EurodollarMember ichr:TermLoanFacilityMember ichr:CreditAgreementMember 2021-06-25 0001652535 us-gaap:EurodollarMember us-gaap:RevolvingCreditFacilityMember ichr:CreditAgreementMember 2021-06-25 0001652535 ichr:TwoThousandSixteenOmnibusIncentivePlanMember 2020-12-26 2021-06-25 0001652535 ichr:ServiceConditionMember us-gaap:StockOptionMember 2020-12-25 0001652535 ichr:ServiceConditionMember us-gaap:StockOptionMember 2020-12-26 2021-06-25 0001652535 ichr:ServiceConditionMember us-gaap:StockOptionMember 2021-06-25 0001652535 us-gaap:StockOptionMember 2020-12-25 0001652535 us-gaap:StockOptionMember 2020-12-26 2021-06-25 0001652535 us-gaap:StockOptionMember 2021-06-25 0001652535 ichr:PerformanceConditionMember us-gaap:StockOptionMember 2020-12-25 0001652535 ichr:PerformanceConditionMember us-gaap:StockOptionMember 2020-12-26 2021-06-25 0001652535 ichr:ServiceConditionMember 2020-12-25 0001652535 ichr:ServiceConditionMember 2020-12-26 2021-06-25 0001652535 ichr:ServiceConditionMember 2021-06-25 0001652535 ichr:PerformanceConditionMember 2020-12-26 2021-06-25 0001652535 ichr:PerformanceConditionMember 2021-06-25 0001652535 ichr:MarketConditionMember 2020-12-26 2021-06-25 0001652535 ichr:MarketConditionMember 2021-06-25 0001652535 ichr:TwoThousandSeventeenEmployeeStockPurchasePlanMember 2020-12-26 2021-06-25 0001652535 us-gaap:EmployeeStockOptionMember 2021-03-27 2021-06-25 0001652535 us-gaap:EmployeeStockOptionMember 2020-03-28 2020-06-26 0001652535 us-gaap:EmployeeStockOptionMember 2020-12-26 2021-06-25 0001652535 us-gaap:EmployeeStockOptionMember 2019-12-28 2020-06-26 0001652535 us-gaap:RestrictedStockMember 2021-03-27 2021-06-25 0001652535 us-gaap:RestrictedStockMember 2020-03-28 2020-06-26 0001652535 us-gaap:RestrictedStockMember 2020-12-26 2021-06-25 0001652535 us-gaap:RestrictedStockMember 2019-12-28 2020-06-26 0001652535 ichr:TwoThousandSeventeenEmployeeStockPurchasePlanMember 2021-03-27 2021-06-25 0001652535 ichr:TwoThousandSeventeenEmployeeStockPurchasePlanMember 2020-03-28 2020-06-26 0001652535 ichr:TwoThousandSeventeenEmployeeStockPurchasePlanMember 2019-12-28 2020-06-26 0001652535 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member us-gaap:MoneyMarketFundsMember 2021-06-25 0001652535 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2021-06-25 0001652535 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:CommercialPaperMember 2021-06-25 0001652535 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperMember 2021-06-25 0001652535 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member us-gaap:USTreasurySecuritiesMember 2021-06-25 0001652535 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember 2021-06-25 0001652535 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember 2021-06-25 0001652535 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember 2021-06-25 0001652535 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:DomesticCorporateDebtSecuritiesMember 2021-06-25 0001652535 us-gaap:FairValueMeasurementsRecurringMember us-gaap:DomesticCorporateDebtSecuritiesMember 2021-06-25 0001652535 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2021-06-25 0001652535 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2021-06-25 0001652535 us-gaap:FairValueMeasurementsRecurringMember 2021-06-25 ichr:Segment 0001652535 country:US 2021-03-27 2021-06-25 0001652535 country:US 2020-03-28 2020-06-26 0001652535 country:US 2020-12-26 2021-06-25 0001652535 country:US 2019-12-28 2020-06-26 0001652535 country:SG 2021-03-27 2021-06-25 0001652535 country:SG 2020-03-28 2020-06-26 0001652535 country:SG 2020-12-26 2021-06-25 0001652535 country:SG 2019-12-28 2020-06-26 0001652535 srt:EuropeMember 2021-03-27 2021-06-25 0001652535 srt:EuropeMember 2020-03-28 2020-06-26 0001652535 srt:EuropeMember 2020-12-26 2021-06-25 0001652535 srt:EuropeMember 2019-12-28 2020-06-26 0001652535 ichr:OtherCountriesMember 2021-03-27 2021-06-25 0001652535 ichr:OtherCountriesMember 2020-03-28 2020-06-26 0001652535 ichr:OtherCountriesMember 2020-12-26 2021-06-25 0001652535 ichr:OtherCountriesMember 2019-12-28 2020-06-26

 

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 June 25, 2021

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 July 29, 2021, the registrant had 28,358,970 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

15

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

22

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)

 

 

 

June 25,

2021

 

 

December 25,

2020

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

141,714

 

 

$

252,899

 

Marketable securities

 

 

104,951

 

 

 

 

Accounts receivable, net

 

 

119,108

 

 

 

100,977

 

Inventories

 

 

166,256

 

 

 

134,756

 

Prepaid expenses and other current assets

 

 

8,491

 

 

 

7,082

 

Total current assets

 

 

540,520

 

 

 

495,714

 

Property and equipment, net

 

 

52,374

 

 

 

41,811

 

Operating lease right-of-use assets

 

 

9,333

 

 

 

10,088

 

Other noncurrent assets

 

 

7,036

 

 

 

5,503

 

Deferred tax assets, net

 

 

5,235

 

 

 

6,324

 

Intangible assets, net

 

 

33,064

 

 

 

39,845

 

Goodwill

 

 

174,887

 

 

 

174,887

 

Total assets

 

$

822,449

 

 

$

774,172

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

149,844

 

 

$

116,664

 

Accrued liabilities

 

 

19,820

 

 

 

20,792

 

Other current liabilities

 

 

14,216

 

 

 

10,700

 

Current portion of long-term debt

 

 

8,750

 

 

 

8,750

 

Current portion of lease liabilities

 

 

5,108

 

 

 

5,128

 

Total current liabilities

 

 

197,738

 

 

 

162,034

 

Long-term debt, less current portion, net

 

 

157,630

 

 

 

191,522

 

Lease liabilities, less current portion

 

 

4,497

 

 

 

5,272

 

Deferred tax liabilities, net

 

 

109

 

 

 

109

 

Other non-current liabilities

 

 

3,992

 

 

 

3,546

 

Total liabilities

 

 

363,966

 

 

 

362,483

 

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; 28,326,559 and 27,907,077 shares outstanding, respectively; 32,763,998 and 32,344,516 shares issued, respectively)

 

 

3

 

 

 

3

 

Additional paid in capital

 

 

408,626

 

 

 

399,311

 

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

 

 

(91,578

)

 

 

(91,578

)

Accumulated other comprehensive loss

 

 

(24

)

 

 

 

Retained earnings

 

 

141,456

 

 

 

103,953

 

Total shareholders’ equity

 

 

458,483

 

 

 

411,689

 

Total liabilities and shareholders’ equity

 

$

822,449

 

 

$

774,172

 

 

See accompanying notes.

1


ICHOR HOLDINGS, LTD.

Consolidated Statements of Operations

(dollars in thousands, except per share amounts)

(unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 25,

2021

 

 

June 26,

2020

 

 

June 25,

2021

 

 

June 26,

2020

 

Net sales

 

$

282,308

 

 

$

221,564

 

 

$

546,874

 

 

$

441,592

 

Cost of sales

 

 

234,955

 

 

 

192,302

 

 

 

460,009

 

 

 

383,556

 

Gross profit

 

 

47,353

 

 

 

29,262

 

 

 

86,865

 

 

 

58,036

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

4,049

 

 

 

3,509

 

 

 

7,564

 

 

 

6,831

 

Selling, general, and administrative

 

 

14,699

 

 

 

13,113

 

 

 

29,048

 

 

 

29,731

 

Amortization of intangible assets

 

 

3,390

 

 

 

3,336

 

 

 

6,781

 

 

 

6,670

 

Total operating expenses

 

 

22,138

 

 

 

19,958

 

 

 

43,393

 

 

 

43,232

 

Operating income

 

 

25,215

 

 

 

9,304

 

 

 

43,472

 

 

 

14,804

 

Interest expense

 

 

1,591

 

 

 

2,302

 

 

 

3,510

 

 

 

4,676

 

Other expense (income), net

 

 

22

 

 

 

2

 

 

 

207

 

 

 

(29

)

Income before income taxes

 

 

23,602

 

 

 

7,000

 

 

 

39,755

 

 

 

10,157

 

Income tax expense (benefit)

 

 

737

 

 

 

189

 

 

 

2,252

 

 

 

(53

)

Net income

 

$

22,865

 

 

$

6,811

 

 

$

37,503

 

 

$

10,210

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.81

 

 

$

0.30

 

 

$

1.33

 

 

$

0.45

 

Diluted

 

$

0.79

 

 

$

0.30

 

 

$

1.30

 

 

$

0.44

 

Shares used to compute net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

28,180,821

 

 

 

22,836,400

 

 

 

28,092,535

 

 

 

22,786,782

 

Diluted

 

 

29,092,521

 

 

 

23,066,976

 

 

 

28,942,902

 

 

 

23,099,946

 

See accompanying notes.

2


ICHOR HOLDINGS, LTD.

Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 25,

2021

 

 

June 26,

2020

 

 

June 25,

2021

 

 

June 26,

2020

 

Net income

 

$

22,865

 

 

$

6,811

 

 

$

37,503

 

 

$

10,210

 

Other comprehensive loss, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on available-for-sale marketable securities

 

 

(24

)

 

 

 

 

 

(24

)

 

 

 

Comprehensive income

 

$

22,841

 

 

$

6,811

 

 

$

37,479

 

 

$

10,210

 

 

See accompanying notes.

 

3


 

 

ICHOR HOLDINGS, LTD.

Consolidated Statements of Shareholders’ Equity

(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

 

 

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

 

 

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.

4


ICHOR HOLDINGS, LTD.

Consolidated Statements of Shareholders’ Equity (continued)

(dollars in thousands)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Treasury

 

 

 

 

 

 

Total

 

For the three months ending June 26, 2020

 

Ordinary Shares

 

 

Paid-In

 

 

Shares

 

 

Retained

 

 

Shareholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Shares

 

 

Amount

 

 

Earnings

 

 

Equity

 

Balance at March 27, 2020

 

 

22,806,679

 

 

$

2

 

 

$

247,023

 

 

 

4,437,439

 

 

$

(91,578

)

 

$

74,073

 

 

$

229,520

 

Ordinary shares issued from exercise of stock options

 

 

8,797

 

 

 

 

 

 

111

 

 

 

 

 

 

 

 

 

 

 

 

111

 

Ordinary shares issued from vesting of restricted share units

 

 

53,523

 

 

 

 

 

 

(393

)

 

 

 

 

 

 

 

 

 

 

 

(393

)

Share-based compensation expense

 

 

 

 

 

 

 

 

2,141

 

 

 

 

 

 

 

 

 

 

 

 

2,141

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,811

 

 

 

6,811

 

Balance at June 26, 2020

 

 

22,868,999

 

 

$

2

 

 

$

248,882

 

 

 

4,437,439

 

 

$

(91,578

)

 

$

80,884

 

 

$

238,190

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Treasury

 

 

 

 

 

 

Total

 

For the six months ending June 26, 2020

 

Ordinary Shares

 

 

Paid-In

 

 

Shares

 

 

Retained

 

 

Shareholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Shares

 

 

Amount

 

 

Earnings

 

 

Equity

 

Balance at December 27, 2019

 

 

22,618,708

 

 

$

2

 

 

$

242,318

 

 

 

4,437,439

 

 

$

(91,578

)

 

$

70,674

 

 

$

221,416

 

Ordinary shares issued from exercise of stock options

 

 

122,336

 

 

 

 

 

 

2,594

 

 

 

 

 

 

 

 

 

 

 

 

2,594

 

Ordinary shares issued from vesting of restricted share units

 

 

111,435

 

 

 

 

 

 

(1,386

)

 

 

 

 

 

 

 

 

 

 

 

(1,386

)

Ordinary shares issued from employee share purchase plan

 

 

16,520

 

 

 

 

 

 

350

 

 

 

 

 

 

 

 

 

 

 

 

350

 

Share-based compensation expense

 

 

 

 

 

 

 

 

5,006

 

 

 

 

 

 

 

 

 

 

 

 

5,006

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,210

 

 

 

10,210

 

Balance at June 26, 2020

 

 

22,868,999

 

 

$

2

 

 

$

248,882

 

 

 

4,437,439

 

 

$

(91,578

)

 

$

80,884

 

 

$

238,190

 

See accompanying notes.

 

5


 

 

ICHOR HOLDINGS, LTD.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

Six Months Ended

 

 

 

June 25,

2021

 

 

June 26,

2020

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

37,503

 

 

$

10,210

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

11,464

 

 

 

11,662

 

Share-based compensation

 

 

5,096

 

 

 

5,006

 

Deferred income taxes

 

 

1,089

 

 

 

384

 

Amortization of debt issuance costs

 

 

483

 

 

 

484

 

Gain on sale of asset disposal group

 

 

(504

)

 

 

 

Other

 

 

59

 

 

 

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(18,131

)

 

 

(20,010

)

Inventories

 

 

(31,500

)

 

 

(22,153

)

Prepaid expenses and other assets

 

 

(478

)

 

 

563

 

Accounts payable

 

 

33,302

 

 

 

(13,717

)

Accrued liabilities

 

 

(952

)

 

 

3,138

 

Other liabilities

 

 

1,458

 

 

 

(750

)

Net cash provided by (used in) operating activities

 

 

38,889

 

 

 

(25,183

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(15,369

)

 

 

(5,665

)

Purchase of marketable securities

 

 

(105,033

)

 

 

 

Proceeds from sale of property and equipment

 

 

504

 

 

 

 

Net cash used in investing activities

 

 

(119,898

)

 

 

(5,665

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Issuance of ordinary shares under share-based compensation plans

 

 

6,117

 

 

 

2,966

 

Employees' taxes paid upon vesting of restricted share units

 

 

(1,918

)

 

 

(1,386

)

Borrowings on revolving credit facility

 

 

 

 

 

30,000

 

Repayments on revolving credit facility

 

 

(30,000

)

 

 

 

Repayments on term loan

 

 

(4,375

)

 

 

(4,375

)

Net cash provided by (used in) financing activities

 

 

(30,176

)

 

 

27,205

 

Net decrease in cash

 

 

(111,185

)

 

 

(3,643

)

Cash at beginning of period

 

 

252,899

 

 

 

60,612

 

Cash at end of period

 

$

141,714

 

 

$

56,969

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

Cash paid during the period for interest

 

$

3,341

 

 

$

4,240

 

Cash paid during the period for taxes, net of refunds

 

$

1,272

 

 

$

34

 

Supplemental disclosures of non-cash activities:

 

 

 

 

 

 

 

 

Capital expenditures included in accounts payable

 

$

246

 

 

$

1,191

 

Right-of-use assets obtained in exchange for new operating lease liabilities

 

$

1,709

 

 

$

328

 

See accompanying notes.

 

 

6


 

 

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 25, 2020.

Year End

We use a 52- or 53-week fiscal year ending on the last Friday in December. The three months ended June 25, 2021 and June 26, 2020 were both 13 weeks. References to the second quarter of 2021 and 2020 refer to the three-month periods then ended. References to fiscal year 2021 and 2020 refer to our fiscal years ending December 31, 2021 and December 25, 2020, 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 and Marketable Securities

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. Marketable securities consist primarily of highly liquid investments with maturities of greater than 90 days when purchased. We classify our marketable securities as available-for-sale and, accordingly, report them at fair value with the related unrealized gains and losses included in accumulated other comprehensive income (loss). Any unrealized losses which are considered to be other-than-temporary are recorded in other income (expense), net. Realized gains and losses on the sale of marketable securities are determined using the specific-identification method and recorded in other income (expense), net.

All of our available-for-sale investments are subject to a periodic impairment review. If an available-for-sale debt security’s fair value is less than its amortized cost basis, then we evaluate whether the decline is the result of a credit loss, in which case an impairment is recorded through an allowance for credit losses. Unrealized gains and losses not attributable to credit losses are included, net of tax, in accumulated other comprehensive income (loss). We have not record an allowance for credit losses during 2021.

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.

7


 

Performance obligations – Substantially all of our performance obligations pertain to promised good