Ichor (US:ICHR)2022-11-09 12:01Financial Performance - Net sales for the three months ended September 30, 2022, increased by 35.3% to $355,643,000 compared to $262,855,000 for the same period in 2021[68]. - Gross profit for the three months ended September 30, 2022, was $63,560,000, resulting in a gross margin of 17.9%, up from 16.6% in the prior year[68]. - Operating income for the three months ended September 30, 2022, was $32,547,000, compared to $21,197,000 for the same period in 2021, reflecting a significant increase[68]. - Net income for the three months ended September 30, 2022, was $29,031,000, an increase from $18,537,000 in the same period of 2021[68]. - The company reported a non-GAAP net income of $35,354,000 for the three months ended September 30, 2022, compared to $23,421,000 for the same period in 2021[68]. - U.S. GAAP gross profit for Q3 2022 was $63.56 million, up from $43.64 million in Q3 2021, representing a 45.7% increase[88]. - Non-GAAP gross profit for Q3 2022 was $64.11 million, compared to $43.98 million in Q3 2021, reflecting a 45.6% increase[88]. - U.S. GAAP net income for Q3 2022 was $29.03 million, an increase from $18.54 million in Q3 2021, marking a 56.5% growth[89]. - Non-GAAP net income for Q3 2022 was $35.35 million, up from $23.42 million in Q3 2021, indicating a 50.9% increase[89]. - Non-GAAP diluted EPS for Q3 2022 was $1.22, compared to $0.81 in Q3 2021, representing a 50.6% increase[89]. Expenses and Costs - Operating expenses for the three months ended September 30, 2022, totaled $31,013,000, up from $22,440,000 in the same period of 2021[68]. - Research and development expenses for the three months ended September 30, 2022, were $4,859,000, compared to $3,905,000 in the prior year[70]. - Cost of sales increased by $72,865 thousand (33.2%) for the three months ended September 30, 2022, compared to the same period in 2021, and by $136,169 thousand (20.0%) for the nine months ended September 30, 2022[74]. - Research and development expenses increased by $3,905 thousand (80.4%) for the three months ended September 30, 2022, and by $3,148 thousand (27.4%) for the nine months ended September 30, 2022[75]. - Selling, general, and administrative expenses rose by $7,048 thousand (46.5%) for the three months ended September 30, 2022, and by $22,370 thousand (50.6%) for the nine months ended September 30, 2022[76][77]. - Interest expense, net increased by $1,762 thousand (118.5%) for the three months ended September 30, 2022, and by $1,847 thousand (37.0%) for the nine months ended September 30, 2022[79][80]. - Income tax expense decreased by $800 thousand (-62.6%) for the three months ended September 30, 2022, and by $498 thousand (-14.1%) for the nine months ended September 30, 2022[84]. - The effective income tax rate for the three months ended September 30, 2022 was 1.6%, down from 6.4% in the same period of 2021[84]. - The increase in amortization of intangible assets was $571 thousand (16.9%) for the three months ended September 30, 2022, and $3,794 thousand (37.3%) for the nine months ended September 30, 2022[78]. Growth and Market Conditions - The acquisition of IMG Companies, LLC in November 2021 contributed to incremental revenues, supporting the overall growth in net sales[73]. - Macroeconomic conditions, including high inflation and supply chain challenges, may impact the semiconductor capital equipment industry, but long-term demand for semiconductors is expected to drive growth[69]. - The increase in gross margin was attributed to increased factory utilization and operating leverage, despite rising costs in materials, logistics, and labor[74]. Cash Flow and Financial Position - Cash and cash equivalents at the end of Q3 2022 were $56.5 million, a decrease of $19.0 million from December 31, 2021[95]. - Cash used in operating activities for the nine months ended September 30, 2022, was $(7.32) million, compared to $24.41 million for the same period in 2021[95]. - The increase in net operating assets and liabilities was $100.1 million during the nine months ended September 30, 2022, primarily due to a $54.5 million increase in inventories[96]. - Total indebtedness as of September 30, 2022, was $304.4 million, with $7.5 million due within 12 months[102]. - The company expects its cash and cash equivalents, along with available credit facilities, to be sufficient to fund operations for at least the next 12 months[92].