[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents the unaudited consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures [ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) Unaudited financial statements for Q3 and nine months 2023 show significant performance decline, net losses, and positive operating cash flow from working capital changes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to **$994.4 million** from **$1,083.7 million**, with liabilities also down, while shareholders' equity slightly declined Consolidated Balance Sheet Highlights (in thousands) | Account | September 29, 2023 | December 30, 2022 | | :--- | :--- | :--- | | **Total current assets** | $451,325 | $513,458 | | **Total assets** | $994,384 | $1,083,742 | | **Total current liabilities** | $115,668 | $166,292 | | **Total liabilities** | $421,705 | $496,246 | | **Total shareholders' equity** | $572,679 | $587,496 | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Q3 2023 net sales fell to **$196.8 million**, resulting in a **$10.4 million** net loss, while the nine-month period also saw a **$31.1 million** net loss Statement of Operations Summary (in thousands, except per share data) | Metric | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $196,761 | $355,643 | $607,639 | $978,349 | | Gross profit | $24,069 | $63,560 | $83,051 | $162,953 | | Operating income (loss) | $(4,824) | $32,547 | $(2,936) | $67,808 | | Net income (loss) | $(10,425) | $29,031 | $(31,086) | $58,607 | | Diluted EPS | $(0.36) | $1.00 | $(1.07) | $2.02 | [Consolidated Statements of Shareholders' Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Shareholders%27%20Equity) Shareholders' equity decreased to **$572.7 million** due to a **$31.1 million** net loss, partially offset by **$12.7 million** in share-based compensation - The primary drivers of change in shareholders' equity during the first nine months of 2023 were a net loss of **$31.1 million** and share-based compensation expense of **$12.7 million**[15](index=15&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating activities generated **$20.1 million** cash, a significant improvement driven by working capital changes, while investing and financing activities used cash Cash Flow Summary (in thousands) | Activity | Nine Months Ended Sep 29, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $20,058 | $(7,321) | | Net cash used in investing activities | $(13,239) | $(21,958) | | Net cash provided by (used in) financing activities | $(17,356) | $10,247 | | **Net decrease in cash** | **$(10,537)** | **$(19,032)** | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, showing **$266.9 million** in inventories, a **(67.4)%** effective tax rate due to a valuation allowance, **$281.9 million** long-term debt, and concentrated sales in the US and Singapore - The effective tax rate for the nine months ended September 29, 2023 was **(67.4)%**, primarily due to an **$11.1 million** valuation allowance recorded against U.S. federal and state deferred tax assets in Q2 2023[37](index=37&type=chunk) Sales by Geographic Area (in thousands) | Region | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | | United States of America | $215,204 | $457,753 | | Singapore | $232,881 | $350,255 | | Europe | $86,625 | $76,084 | | Other | $72,929 | $94,257 | | **Total net sales** | **$607,639** | **$978,349** | - As of September 29, 2023, the company had total principal long-term debt of **$281.9 million**, consisting of a term loan and borrowings on a revolving credit facility[40](index=40&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=16&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management attributes declining revenue and profitability to a semiconductor industry downturn, exacerbated by macroeconomic factors, leading to cost reductions and increased debt-servicing costs [Overview and Macroeconomic Conditions](index=16&type=section&id=Overview%20and%20Macroeconomic%20Conditions) The company, a semiconductor equipment supplier, faces a cyclical industry downturn and macroeconomic headwinds, prompting cost reduction initiatives - The semiconductor industry entered a cyclical downturn in Q4 2022, leading to reduced spending on capital equipment and weakened customer demand for Ichor's products through the first three quarters of 2023[61](index=61&type=chunk) - To align resources with lower business levels, the company initiated labor and other cost reduction programs, incurring severance charges in Q4 2022 and Q1/Q3 2023[61](index=61&type=chunk) [Results of Operations](index=18&type=section&id=Results%20of%20Operations) Q3 2023 net sales declined **44.7%** to **$196.8 million**, with gross margin contracting **570 bps** and operating losses recorded for both periods Net Sales Performance (in thousands) | Period | 2023 | 2022 | Change Amount | Change % | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended | $196,761 | $355,643 | $(158,882) | (44.7)% | | Nine Months Ended | $607,639 | $978,349 | $(370,710) | (37.9)% | Gross Margin Performance | Period | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Three Months Ended | 12.2% | 17.9% | -570 bps | | Nine Months Ended | 13.7% | 16.7% | -300 bps | - The decrease in gross margin was primarily due to reduced factory utilization from lower volumes[68](index=68&type=chunk) - Increased excess and obsolete inventory expense also unfavorably impacted gross margin by **150bps** for the third quarter of 2023[68](index=68&type=chunk) - Interest expense increased by **115.0%** for the nine-month period year-over-year, driven by a significant rise in the weighted average borrowing rate from **2.74%** to **6.60%** due to tightening monetary policy[73](index=73&type=chunk) [Non-GAAP Financial Results](index=21&type=section&id=Non-GAAP%20Financial%20Results) Non-GAAP net income for Q3 2023 was **$2.1 million** ($0.07 diluted EPS), contrasting with a GAAP net loss, after adjustments for non-cash and severance costs GAAP to Non-GAAP Net Income Reconciliation (Q3 2023, in thousands) | Description | Amount | | :--- | :--- | | U.S. GAAP net loss | $(10,425) | | Amortization of intangible assets | $3,639 | | Share-based compensation | $4,752 | | Other (severance) | $793 | | Tax adjustments | $3,338 | | **Non-GAAP net income** | **$2,097** | GAAP vs. Non-GAAP Diluted EPS | Period | GAAP Diluted EPS | Non-GAAP Diluted EPS | | :--- | :--- | :--- | | Q3 2023 | $(0.36) | $0.07 | | Q3 2022 | $1.00 | $1.22 | | Nine Months 2023 | $(1.07) | $0.47 | | Nine Months 2022 | $2.02 | $2.90 | [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) The company ended Q3 2023 with **$75.9 million** cash, with operating activities providing **$20.1 million** cash, and sufficient liquidity for the next 12 months - Primary sources of liquidity are sales to customers and proceeds from credit facilities[92](index=92&type=chunk) - As of September 29, 2023, **$105.0 million** remained available under the **$250.0 million** revolving credit facility[92](index=92&type=chunk) - Cash from operations improved to a **$20.1 million** inflow in the first nine months of 2023 from a **$7.3 million** outflow in the prior-year period, primarily due to favorable changes in working capital balances[93](index=93&type=chunk)[95](index=95&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=26&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Primary market risks are interest rate risk on variable-rate debt, with a **100 bps** change impacting interest expense by **$2.8 million**, and immaterial foreign currency risk - Foreign currency exchange risk is limited because substantially all sales and the majority of supplier arrangements are priced and paid in U.S. dollars[100](index=100&type=chunk) - The company is exposed to interest rate risk on its **$281.9 million** of variable-rate debt[102](index=102&type=chunk) - A hypothetical **100 basis point** change in the interest rate would change annualized interest expense by **$2.8 million**[102](index=102&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=27&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Disclosure controls and procedures were ineffective due to a material weakness in internal control over financial reporting, with remediation expected by year-end 2023 - Disclosure controls and procedures were deemed not effective as of September 29, 2023, due to a previously identified material weakness in internal control over financial reporting[103](index=103&type=chunk) - The company is implementing a remediation plan and expects the material weakness to be remediated before the end of fiscal year 2023[106](index=106&type=chunk) [PART II - OTHER INFORMATION](index=28&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, unregistered equity sales, other information, and a list of exhibits [ITEM 1. LEGAL PROCEEDINGS](index=28&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is not currently involved in any material pending or threatened legal proceedings - As of the filing date, the company is not involved in any material legal proceedings[107](index=107&type=chunk) [ITEM 1A. RISK FACTORS](index=28&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes to risk factors have occurred since the 2022 Annual Report on Form 10-K - No material changes have occurred in the company's risk factors since the 2022 Annual Report on Form 10-K[108](index=108&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=28&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) No unregistered sales of equity securities or use of proceeds were reported during the period - None[109](index=109&type=chunk) [ITEM 5. OTHER INFORMATION](index=28&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during Q3 2023 - No directors or officers adopted or terminated insider trading arrangements under Rule 10b5-1 during Q3 2023[112](index=112&type=chunk) [ITEM 6. EXHIBITS](index=29&type=section&id=ITEM%206.%20EXHIBITS) This section lists filed exhibits, including executive certifications and Inline XBRL documents - Exhibits filed include executive certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL data files[114](index=114&type=chunk)

Financial Data and Key Metrics Changes - In Q3, the company's revenues were $197 million, a 6% increase from Q2, primarily due to a rebound in the core gas delivery business [28][47] - Q3 gross margin was 13.1%, lower than expectations due to additional inventory provisions and a less favorable product mix [28][47] - Operating expenses for Q3 were $21.3 million, a decline from Q2 levels, resulting in an operating margin of 2.2% [28] - Net earnings for the quarter were $0.07 per share, aligning with expectations [28][47] - For Q4, the company anticipates revenues between $190 million and $205 million, with gross margins expected to improve to approximately 14% [29][30] Business Line Data and Key Metrics Changes - The NAND Memory segment has seen spending declines of up to 75%, with memory WFE now representing about 25% of total revenues [24] - The company is experiencing growth in segments like EUV and lithography, with new customer design wins in silicon carbide [24][25] - Proprietary machine components are seeing new qualifications, with initial shipments expected soon [26] Market Data and Key Metrics Changes - The company noted that the semiconductor process equipment market is stabilizing, with expectations for a revenue ramp in the second half of 2024 [49] - The overall industry is expected to recover significantly in 2025, with the company positioned to benefit from this recovery [49] Company Strategy and Development Direction - The company is focusing on share gains for proprietary products and investing in new offerings to support long-term customer technology roadmaps [49] - The new gas panel contains about 75% proprietary content, which could significantly expand the gross margin profile [49] - The company is working on integrating proprietary components into existing gas panels, which will take time as customers deplete existing inventory [26][49] Management's Comments on Operating Environment and Future Outlook - Management indicated that the current demand environment is expected to remain stable, with new technology drivers emerging [48] - The company does not foresee a NAND inflection in the first half of 2024, which may impact revenue growth [43] - Management expressed confidence in achieving a 25% flow-through at similar revenue levels compared to Q2 [54] Other Important Information - Cash and equivalents totaled $76 million at the end of the quarter, with a decrease primarily due to net debt reduction [53] - The company generated $4 million in cash flow from operations, with free cash flow for the quarter at $1.6 million [53] Q&A Session Summary Question: What is the outlook for Ichor's business in 2024? - Management expects revenue levels to remain similar, with potential share gains to offset muted order patterns [58] Question: What drove the inventory reserve increase in Q3? - The increase was due to headwinds in various business units and additional reserves taken for inventory roll-off from prior quarters [59] Question: How does the company benefit from shipments to China? - The company does not sell directly to Chinese OEMs but benefits indirectly through customer shipments [6] Question: What is the status of the silicon carbide market? - The company has one customer in the silicon carbide space, with expectations for market growth [80] Question: What is the timeline for new gas panel evaluations? - Initial evaluations are expected to lead to production tool rollouts in late 2024 and 2025 [83]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR o 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 ______________________________________________________________________________________________________________________ ...

Financial Data and Key Metrics Changes - The second quarter revenues were $185 million, which is an 18% decline from Q1 but at the upper end of expectations [22][55] - Gross margin was 14.5%, consistent with expectations of just under 20% flow-through on the revenue decline [22][55] - Net earnings for the quarter were $0.02 per share, exceeding prior expectations of a breakeven quarter [7][55] - Interest expense is expected to increase to approximately $5.3 million due to higher interest rates [9] Business Line Data and Key Metrics Changes - The company has seen increased demand in trailing nodes, logic, and high-bandwidth memory, but this is offset by softening demand in leading-edge logic and slower build schedules in areas like EUV lithography [2][68] - Incremental gross margin flow-through expectations are approximately 25% on increasing revenues, which is expected to drive Q3 gross margin improvement to the high 14s level [24][55] Market Data and Key Metrics Changes - The company is less exposed to the memory market than before, estimating current exposure to be less than 25% compared to 40% in 2022 [56] - The component side of the business is expected to take longer to recover, with inventory levels at OEM customers still not matching demand [46][68] Company Strategy and Development Direction - The company is focusing on driving share gains for proprietary products and making investments in new offerings that support long-term technology roadmaps [69] - The company is reviewing its Japan strategy to accelerate results in that region and developing new components for the market expected to be leased in 2024 [4][69] Management's Comments on Operating Environment and Future Outlook - Management views the second quarter of 2023 as the trough quarter, with modest sequential growth expected as the year progresses [2] - The overall outlook for 2023 remains largely unchanged, with expectations of a revenue decline of 20% to 25% due to various factors [68] - Management remains optimistic about a strong snapback of demand as the industry recovers, particularly in the silicon carbide market [56][68] Other Important Information - The company generated $27 million of cash flow from operations, with free cash flow for the quarter at $23 million [73] - The company plans to maintain a nominal non-GAAP tax expense each quarter, with a projected net tax benefit of $4 million to $5 million for fiscal 2023 [75] Q&A Session Summary Question: Can you discuss the design activity for the new gas panels? - Management indicated that there is both a cost advantage and a technology advantage that has attracted initial customers [16] Question: Are you where you want to be regarding resizing headcount and expense structure? - Management stated that they have right-sized the workforce to meet expected demand and are taking a guarded approach to operating expenses while continuing R&D investments [17] Question: What is the status of inventory levels with OEM customers? - Management noted that inventory levels are still not matching demand and that the component side of the business will take longer to recover [46] Question: What areas do you think will allow you to grow faster than the industry? - Management highlighted silicon carbide as a significant growth driver and mentioned that they expect to see growth year-over-year in that area [47][68] Question: Can you elaborate on the actions being taken to accelerate penetration in the Japanese market? - Management is reviewing their strategy and developing new components for the market to enhance results [4][69] Question: What is the expected cash generation for Q3 and potential debt reduction? - Management expects to generate enough cash flow to service the business and address some debt in the quarter [109][110]

Financial Performance - Net sales for the three months ended March 31, 2023, were $225,870, a decrease of $67,276 or 22.9% compared to $293,146 for the same period in 2022[59][66] - Gross margin for the first quarter of 2023 was 14.7%, down from 15.0% in the first quarter of 2022, reflecting reduced factory utilization due to lower customer demand[59][69] - Operating income for the three months ended March 31, 2023, was $4,794, a decline of 54.1% from $10,465 in the same period of 2022[64] - The decrease in net income for the first quarter of 2023 was $5, compared to a net income of $8,039 in the first quarter of 2022[59][64] - Cost of sales for the first quarter of 2023 was $192,630, down 22.7% from $249,214 in the same period of 2022[68] Expenses - Research and development expenses decreased by 11.1% to $4,313 in the first quarter of 2023, down from $4,851 in the first quarter of 2022[70] - Selling, general, and administrative expenses fell by 13.3% to $20,167 in the first quarter of 2023, compared to $23,267 in the same period of 2022[73] - The company incurred severance charges of $1.3 million in the first quarter of 2023 as part of cost reduction initiatives[61] - Interest expense increased significantly to $4,550 in the first quarter of 2023, compared to $1,532 in the same period of 2022, due to rising borrowing rates[64][62] - Other expense, net increased to $784,000 from $84,000, reflecting an 833.3% increase primarily due to currency exchange rate fluctuations[79] Non-GAAP Metrics - Non-GAAP gross profit for the three months ended March 31, 2023, was $34,948,000, down from $46,975,000 in the prior year, with a non-GAAP gross margin of 15.5% compared to 16.0%[85] - Non-GAAP operating income decreased to $13,721,000 from $24,578,000, with a non-GAAP operating margin of 6.1% compared to 8.4%[85] - Non-GAAP net income for the three months ended March 31, 2023, was $11,128,000, down from $20,178,000, with non-GAAP diluted EPS of $0.38 compared to $0.70[88] Cash Flow and Indebtedness - Cash and cash equivalents at the end of Q1 2023 were $68.8 million, a decrease of $17.6 million from the prior year[93] - Cash used in operating activities was $10,873,000 for Q1 2023, compared to $36,278,000 in the prior year, with a net decrease in cash of $17,633,000[93][94] - Total indebtedness as of March 31, 2023, was $300.6 million, with $7.5 million due within 12 months[100] Interest Rate and Currency Risks - The weighted average borrowings outstanding rose to $302,479,000, a 2.5% increase from $294,959,000 in the prior year[77] - The weighted average borrowing rate increased by 427 basis points to 6.10% from 1.83% due to tightening monetary policy[77] - A hypothetical 100 basis point change in interest rates would result in a $0.8 million change to interest expense for the quarter, or $3.0 million on an annualized basis[100] - The company does not expect foreign currency exchange rate fluctuations to materially affect its results, as most sales and supplier arrangements are in U.S. dollars[98] - The company has not engaged in any foreign currency hedging transactions to date[99] Future Outlook - The company expects long-term growth in demand for semiconductors and semiconductor equipment despite current macroeconomic challenges[61] - The company does not anticipate being exposed to material risks due to changes in interest rates[100] - Increases in the value of the U.S. dollar could make products more expensive compared to competitors priced in other currencies, potentially impacting competitiveness[98] - Foreign suppliers may raise prices if the U.S. dollar decreases in value relative to other currencies[98]

Financial Performance - Revenue for 2022 was $1,280.1 million, an increase from $1,096.9 million in 2021, representing a growth of approximately 16.7%[19] - Net income for 2022 was $72.8 million, compared to $70.9 million in 2021, reflecting a growth of about 2.7%[19] - Total capital expenditures in 2022 were $29.4 million, which is 2.3% of sales, significantly up from $20.8 million (1.9% of sales) in 2021[24] Market Position and Strategy - The company aims to grow its market share within existing customers by leveraging specialized engineering talent and early collaboration, targeting a broader range of process tools[25] - The acquisition of IMG Companies in November 2021 expanded the company's product offerings and customer base, including entry into medical and aerospace sectors[27] - The company has established long-standing relationships with top-tier customers, including Lam Research, Applied Materials, and ASML, which are critical for competitive positioning[22] - The semiconductor capital equipment market is cyclical, and the company has structured its business to minimize fixed costs, allowing for growth in net income at a higher rate than sales during growth periods[24] - The company is actively engaging with new customers in various sectors, including those considering outsourcing their gas and chemical delivery needs[28] - The semiconductor equipment market is highly concentrated, with five companies accounting for over 70% of all process tool revenues[37] - In 2022, the two largest customers, Lam Research and Applied Materials, accounted for a combined 79% of sales[37] Innovation and Development - As of December 30, 2022, the engineering team consisted of approximately 90 engineers and designers, enhancing the company's product development capabilities[46] - The company has established an ESG council to support sustainable practices and community involvement, with a five-year roadmap initiated in 2022[58] - As of December 30, 2022, the company had 59 granted patents and 67 pending patent applications, indicating a strong focus on intellectual property[50] - The company is focused on improving manufacturing process efficiency to reduce cycle times and costs, enhancing profitability and product attractiveness[29] - The average order-to-delivery cycle time for manufacturing a gas delivery system can be as little as 20 to 30 days[40] Operations and Manufacturing - The company operates ISO 9001 certified manufacturing locations and adheres to strict design tolerances and specifications[41] - The company utilizes just-in-time stocking programs to manage component inventories and respond to changing customer requirements[44] - Approximately 2,280 full-time employees and 700 contract or temporary workers were employed as of December 30, 2022, supporting operational flexibility[53] Financial Management and Risks - Total indebtedness as of December 30, 2022, was $302.5 million, with $7.5 million payable within the next 12 months[209] - The interest rate on outstanding debt is based on the Bloomberg Short-Term Bank Yield Index, with a hypothetical 100 basis point change resulting in a $3.0 million change to annual interest expense[209] - The company does not expect foreign currency exchange rate fluctuations to materially affect its results, as most sales and supplier arrangements are in U.S. dollars[207] - Operating expenses may be subject to fluctuations due to foreign currency exchange rates, particularly in currencies such as the Singapore dollar and euro[208] - The company has not engaged in foreign currency hedging transactions, and foreign currency transaction gains and losses have not been material to financial statements[208] - The company has not used derivative financial instruments to manage interest rate risk exposure[209] Compliance and Environmental - The company believes it operates in substantial compliance with environmental regulations, but future compliance costs could be significant[206] - There are no known environmental investigations, lawsuits, or claims against the company at this time[206] Investor Relations - The company maintains a variety of information available on its Investor Relations website, including annual and quarterly reports[60] - The SEC maintains a site with reports and information regarding issuers that file documents electronically[61]

Financial Data and Key Metrics Changes - Q4 revenues were $302 million, up 5% year-over-year but down 15% from the record third quarter [41] - Gross margin improved to 16.7%, with a flow-through of approximately 25% compared to Q3 [41] - Q1 revenue guidance is between $210 million to $240 million, reflecting a 25% decline from Q4 [42] - Operating expenses are expected to decline to approximately $21.7 million in Q1 due to headcount and spending reductions [42] Business Line Data and Key Metrics Changes - The company expects significant growth in the gas delivery business, particularly serving the EUV lithography market [39] - The lithography segment is expected to increase by 25%, while non-litho segments are projected to decline by 25% to 30% [48] - The company anticipates a 5% outperformance in the non-litho WFE segment compared to the overall market decline [15][84] Market Data and Key Metrics Changes - The overall WFE market is expected to decline by 20% to 25% in 2023, with the memory market potentially down by 50% [65] - The company has reduced its exposure to the memory market to below 40% of revenues [65] - The company expects a recovery in customer demand towards the end of the year, contingent on the slope of the recovery [66] Company Strategy and Development Direction - The company is focusing on qualifying new components and expanding its market share, particularly in the components business [49] - Continued investments in R&D and optimization of capacity are planned to support future growth [40] - The company aims to manage its variable operating model to adjust to lower levels of WFE demand while maintaining discipline on operating expenses [40] Management's Comments on Operating Environment and Future Outlook - Management noted a softening business environment and reduced shipment levels expected for the March quarter [37] - The company remains confident in showing solid financial results and strong cash flow performance during 2023 [50] - Management expects to see a balanced WFE demand environment between the first and second half of 2023 [37] Other Important Information - Cash conversion of working capital improved, generating $32 million of free cash flow in Q4 [52] - Total cash at quarter end was $86 million, with total debt at $303 million [52] - The company plans to be more aggressive with debt paydowns as cash flow generation improves [23] Q&A Session Summary Question: How is the gas delivery segment performing compared to other segments? - Management indicated that gas delivery is expected to perform relatively well compared to other segments, particularly in the first half of the year [7] Question: What are the expectations for operating expenses and staffing? - Management confirmed that most SG&A-focused reductions have been implemented, with operating expenses expected to decline significantly in Q1 [8][11] Question: Can you clarify the company's ability to outperform WFE? - Management stated that they expect to outperform the non-litho WFE segment by about five percentage points, despite the overall market decline [15][16] Question: What is the outlook for gross margins in the upcoming quarters? - Management expects gross margins to remain stable between Q1 and Q2, with potential improvements in the second half of the year due to share gains [25] Question: How does the company plan to address debt and interest expenses? - Management plans to use strong cash flow generation to pay down debt, with interest expenses expected to rise due to increasing rates [23][70] Question: What is the timeline for new product revenue generation? - Management indicated that significant revenue from new gas panel products is expected to start in late 2023, with ongoing evaluations [78][99]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) Cayman Islands Not Applicable ( State or other jurisdiction of incorporation or organization) 3185 Laurelview Ct. Fremont, CA 94538 (Address of principal executive offices) (Zip Code) (I.R.S. Employer Identification No.) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF TH ...

Ichor Holdings, Ltd. (NASDAQ:ICHR) Q3 2022 Earnings Conference Call November 8, 2022 4:30 PM ET Company Participants Claire McAdams - Investor Relations Jeff Andreson - Chief Executive Officer Larry Sparks - Chief Financial Officer Conference Call Participants Quinn Bolton - Needham & Co Craig Ellis - B. Riley Securities Robert Burns - Cowen Hans Chung - D.A. Davidson Operator Good day, ladies and gentlemen and welcome to Ichor's Third Quarter 2022 Earnings Conference Call. At this time, all participants ar ...

chor Investor Presentation Jefferies Semiconductor, IT Hardware & Communications Infrastructure Summit August 30, 2022 Proprietary Forward-Looking Statements, Non-GAAP Financials and COVID-19 This Presentation and the accompanying oral presentation include "forward‐looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding Ichor Holdings, Ltd. and its subsidiaries ("Ichor" or the "Company"), i ...