EX-99.1 2 ex-991_24q2xearnings.htm 2024 Q2 EARNINGS RELEASE Document

Exhibit 99.1
Ichor Holdings, Ltd. Announces Second Quarter 2024 Financial Results
FREMONT, Calif., August 6, 2024–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 second quarter 2024 financial results.
Second quarter 2024 highlights:
•Revenues of $203 million, near the upper end of our guidance range communicated in May;
•Gross margin of 12.6% on a GAAP basis and 13.0% on a non‑GAAP basis;
•Earnings per share of $(0.15) on a GAAP basis and $0.05 on a non-GAAP basis; and
•Free cash flow of $15 million.
"We are encouraged by signs of a recovery in the customer demand profile for wafer fab processing equipment as we progress through 2024,” commented Jeff Andreson, chief executive officer. “With Q2 revenues near the upper end of our expectations, we are also pleased to report continued improvement in gross margin performance over the last two quarters on similar revenue volumes. With industry demand momentum continuing to build, we expect to continue delivering on gross margin expansion and improvements in profitability and cash flow in the forthcoming quarters. Instrumental to our ability to achieve our financial performance targets are the new proprietary product introductions and customer qualifications now underway, which continue to yield positive traction and momentum. Our expectations for a stronger second half of 2024 are primarily driven by initial ramps in technology and capacity investments for leading edge semiconductor devices."
Q2 2024Q1 2024Q2 2023
(dollars in thousands, except per share amounts)
U.S. GAAP Financial Results:
Net sales$203,227 $201,383 $185,008 
Gross margin12.6 %11.4 %13.9 %
Operating margin(1.1)%(1.9)%(1.6)%
Net loss$(5,112)$(8,989)$(20,656)
Diluted EPS$(0.15)$(0.30)$(0.71)
Q2 2024Q1 2024Q2 2023
(dollars in thousands, except per share amounts)
Non-GAAP Financial Results:
Gross margin13.0 %12.2 %14.5 %
Operating margin2.2 %1.2 %2.9 %
Net income (loss)$1,819 $(2,712)$707 
Diluted EPS$0.05 $(0.09)$0.02 
U.S. GAAP Financial Results Overview
For the second quarter of 2024, revenue was $203.2 million, net loss was $5.1 million, and net loss per diluted share (“diluted EPS”) was $(0.15). This compares to revenue of $201.4 million and $185.0 million, net loss of $9.0 million and $(20.7) million, and diluted EPS of $(0.30) and $(0.71), for the first quarter of 2024 and second quarter of 2023, respectively.
Non-GAAP Financial Results Overview
For the second quarter of 2024, non-GAAP net income was $1.8 million and non-GAAP diluted EPS was $0.05. This compares to non-GAAP net income (loss) of $(2.7) million and $0.7 million, and non-GAAP diluted EPS of $(0.09) and $0.02, for the first quarter of 2024 and second quarter of 2023, respectively.
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Third Quarter 2024 Financial Outlook
For the third quarter of 2024, we expect revenue to be in the range of $195 million to $210 million. We expect GAAP diluted EPS to be in the range of $(0.17) to $(0.06) and non-GAAP diluted EPS to be in the range of $0.05 to $0.15.
This outlook for non‑GAAP diluted EPS excludes amortization of intangible assets of approximately $2.1 million and share-based compensation expense of approximately $4.8 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 second quarter of 2024 with cash and cash equivalents of $114.3 million, an increase of $12.2 million from the prior quarter and an increase of $34.4 million from the prior year ended December 29, 2023.
The increase of $12.2 million in the second quarter of 2024 was primarily due to net cash provided by operating activities of $17.5 million, partially offset by capital expenditures of $2.8 million and net payments on our credit facilities of $1.9 million. The increase of $34.4 million during the six months ended June 28, 2024 was primarily due to net proceeds of $136.7 million from our issuance of 3.8 million ordinary shares in March 2024 in connection with an underwritten public offering and net cash provided by operating activities of $22.3 million, partially offset by net payments on credit facilities of $118.8 million and capital expenditures of $7.3 million.
Our cash provided by operating activities of $17.5 million for the second quarter of 2024 consisted of net non-cash charges of $12.1 million, consisting primarily of depreciation and amortization of $8.1 million and share-based compensation expense of $3.9 million, and a decrease in our net operating assets and liabilities of $10.5 million, partially offset by net loss of $5.1 million. Our cash provided by operating activities of $22.3 million for the six months ended June 28, 2024 consisted of net non-cash charges of $22.3 million, consisting primarily of depreciation and amortization of $15.7 million and share-based compensation expense of $6.3 million, and a decrease in our net operating assets and liabilities of $14.1 million, partially offset by net loss of $14.1 million.
The decrease in our net operating assets and liabilities of $10.5 million during the second quarter of 2024 was primarily due to a decrease in inventories of $9.2 million and a decrease in accounts receivable of $8.2 million, partially offset by a decrease in accounts payable of $3.5 million and a decrease in accrued and other liabilities of $3.4 million. The decrease in our net operating assets and liabilities of $14.1 million during the six months ended June 28, 2024 was primarily due to a decrease in inventories of $14.4 million.
Use of Non-GAAP Financial Results
In addition to U.S. GAAP ("GAAP") results, this press release also contains non-GAAP financial results, including non‑GAAP gross profit, non‑GAAP operating income, non‑GAAP net income (loss), non‑GAAP diluted EPS, and free cash flow. Management uses 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 transaction-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.
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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 second quarter 2024 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/ichorholdings080624/en.
To listen via telephone, please call (877) 407‑0989 (domestic) or +1 (201) 389‑0921 (international), conference ID: 13747600. 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 27, 2024 and December 29, 2023 are each 52 weeks. References to 2024 and 2023 relate to the fiscal years then ended. The three-month periods ended June 28, 2024, March 29, 2024, and June 30, 2023 were each 13 weeks. References to the second quarter of 2024, first quarter of 2024, and second quarter of 2023 relate to the three-month periods then ended.
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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, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words “anticipate,” “believe,” “contemplate,” “designed,” “estimate,” “expect,” “forecast,” “goal,” “guidance,” “intend,” “may,” “outlook,” “plan,” “predict,” “project,” “see,” “seek,” “target,” “would” and similar expressions or variations or negatives of these words are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Examples of forward-looking statements include, but are not limited to, statements regarding our outlook for our third fiscal quarter of 2024, statements regarding the current business environment, revenue levels in 2024, manufacturers’ investment in water fabrication equipment, our investment in research and development of new products, acquiring new business, and company and industry growth and performance in 2024 and 2025, as well as any other statement that does not directly relate to any historical fact. Such forward-looking statements are based on management’s current expectations about future events as of the date hereof and involve many risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Our actual results and outcomes could differ materially from those included in these forward-looking statements as a result of various factors, including, but not limited to: geopolitical, economic and market conditions, including high inflation, changes to fiscal and monetary policy, high interest rates, currency fluctuations, challenges in the supply chain and any disruptions in the global economy as a result of the conflicts in Ukraine and the Middle East; dependence on expenditures by manufacturers and cyclical downturns in the semiconductor capital equipment industry; reliance on a very small number of original equipment manufacturers ("OEMs") for a significant portion of sales; negotiating leverage held by our customers; competitiveness and rapid evolution of the industries in which we participate; keeping pace with developments in the industries we serve and with technological innovation generally; designing, developing and introducing new products that are accepted by original equipment manufacturers in order to retain our existing customers and obtain new customers; managing our manufacturing and procurement process effectively; defects in our products that could damage our reputation, decrease market acceptance and result in potentially costly litigation; and our dependence on a limited number of suppliers. 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 29, 2023 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.
Contact:
Greg Swyt, CFO 510-897-5200
Claire McAdams, IR & Strategic Initiatives 530-265-9899
ir@ichorsystems.com
Source: Ichor Holdings, Ltd.
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ICHOR HOLDINGS, LTD.
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
(unaudited)
June 28,
2024		March 29,
2024		December 29,
2023		June 30,
2023
Assets
Current assets:
Cash and cash equivalents$114,349 $102,124 $79,955 $84,608 
Accounts receivable, net65,216 73,371 66,721 95,760 
Inventories231,475 240,679 245,885 266,190 
Prepaid expenses and other current assets7,596 5,047 8,804 5,507 
Total current assets418,636 421,221 401,365 452,065 
Property and equipment, net89,142 92,792 92,755 98,914 
Operating lease right-of-use assets34,623 37,202 36,611 39,184 
Other noncurrent assets13,727 12,621 11,912 12,422 
Deferred tax assets, net3,103 3,008 3,148 1,273 
Intangible assets, net53,056 55,142 57,288 64,096 
Goodwill335,402 335,402 335,402 335,402 
Total assets$947,689 $957,388 $938,481 $1,003,356 
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable$58,961 $61,320 $60,490 $63,868 
Accrued liabilities15,122 15,452 14,871 16,753 
Other current liabilities6,812 7,051 6,638 8,783 
Current portion of long-term debt7,500 7,500 7,500 7,500 
Current portion of lease liabilities9,721 9,926 9,463 9,500 
Total current liabilities98,116 101,249 98,962 106,404 
Long-term debt, less current portion, net122,665 124,424 241,183 284,701 
Lease liabilities, less current portion26,025 28,339 28,187 30,570 
Deferred tax liabilities, net1,169 1,169 1,169 29 
Other non-current liabilities4,838 4,975 4,303 4,349 
Total liabilities252,813 260,156 373,804 426,053 
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; 33,629,331, 33,467,846, 29,435,398, and 29,241,561 shares outstanding, respectively; 38,066,770, 37,905,285, 33,872,837, and 33,812,827 shares issued, respectively)
3 3 3 3 
Additional paid in capital595,881 593,125 451,581 441,883 
Treasury shares at cost (4,437,439 shares)
(91,578)(91,578)(91,578)(91,578)
Retained earnings190,570 195,682 204,671 226,995 
Total shareholders’ equity694,876 697,232 564,677 577,303 
Total liabilities and shareholders’ equity$947,689 $957,388 $938,481 $1,003,356 
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ICHOR HOLDINGS, LTD.
Consolidated Statement of Operations
(in thousands, except share and per share amounts)
(unaudited)
Three Months Ended Six Months Ended
June 28,
2024		March 29,
2024		June 30,
2023		June 28,
2024		June 30,
2023
Net sales$203,227 $201,383 $185,008 $404,610 $410,878 
Cost of sales177,670 178,389 159,266 356,059 351,896 
Gross profit25,557 22,994 25,742 48,551 58,982 
Operating expenses:
Research and development5,926 5,370 5,188 11,296 9,501 
Selling, general, and administrative19,807 19,219 19,500 39,026 39,667 
Amortization of intangible assets2,086 2,146 3,960 4,232 7,926 
Total operating expenses27,819 26,735 28,648 54,554 57,094 
Operating income (loss)(2,262)(3,741)(2,906)(6,003)1,888 
Interest expense, net1,858 4,096 5,030 5,954 9,580 
Other expense, net50 239 100 289 884 
Loss before income taxes(4,170)(8,076)(8,036)(12,246)(8,576)
Income tax expense942 913 12,620 1,855 12,085 
Net loss$(5,112)$(8,989)$(20,656)$(14,101)$(20,661)
Net loss per share:
Basic$(0.15)$(0.30)$(0.71)$(0.44)$(0.71)
Diluted$(0.15)$(0.30)$(0.71)$(0.44)$(0.71)
Shares used to compute Net loss per share:
Basic33,548,07130,010,97129,116,41331,779,52129,050,645
Diluted33,548,07130,010,97129,116,41331,779,52129,050,645
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ICHOR HOLDINGS, LTD.
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended Six Months Ended
June 28,
2024		March 29,
2024		June 30,
2023		June 28,
2024		June 30,
2023
Cash flows from operating activities:
Net loss$(5,112)$(8,989)$(20,656)$(14,101)$(20,661)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization8,123 7,556 8,656 15,679 17,145 
Share-based compensation3,938 2,375 4,277 6,313 7,914 
Deferred income taxes(95)140 11,072 45 10,049 
Amortization of debt issuance costs116 116 117 232 233 
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable, net8,155 (6,650)26,933 1,505 40,561 
Inventories9,204 5,206 5,348 14,410 17,470 
Prepaid expenses and other assets143 1,735 3,281 1,878 5,986 
Accounts payable(3,549)3,405 (2,029)(144)(45,047)
Accrued liabilities(967)1,020 (4,164)53 (5,961)
Other liabilities(2,464)(1,110)(5,892)(3,574)(11,619)
Net cash provided by operating activities17,492 4,804 26,943 22,296 16,070 
Cash flows from investing activities:
Capital expenditures(2,847)(4,490)(4,015)(7,337)(10,834)
Net cash used in investing activities(2,847)(4,490)(4,015)(7,337)(10,834)
Cash flows from financing activities:
Issuance of ordinary shares, net of fees— 136,738 — 136,738 — 
Issuance of ordinary shares under share-based compensation plans1,384 3,335 1,355 4,719 3,981 
Employees' taxes paid upon vesting of restricted share units(1,929)(1,343)(1,637)(3,272)(2,329)
Repayments on revolving credit facility— (115,000)(5,000)(115,000)(5,000)
Repayments on term loan(1,875)(1,875)(1,875)(3,750)(3,750)
Net cash provided by (used in) financing activities(2,420)21,855 (7,157)19,435 (7,098)
Net increase (decrease) in cash12,225 22,169 15,771 34,394 (1,862)
Cash at beginning of period102,124 79,955 68,837 79,955 86,470 
Cash at end of period$114,349 $102,124 $84,608 $114,349 $84,608 
Supplemental disclosures of cash flow information:
Cash paid during the period for interest$2,703 $4,833 $5,106 $7,536 $9,851 
Cash paid during the period for taxes, net of refunds$750 $702 $3,236 $1,452 $3,340 
Supplemental disclosures of non-cash activities:
Capital expenditures included in accounts payable$1,458 $267 $293 $1,458 $293 
Right-of-use assets obtained in exchange for new operating lease liabilities$(431)$2,810 $842 $2,379 $3,103 
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ICHOR HOLDINGS, LTD.
Reconciliation of U.S. GAAP Gross Profit to Non-GAAP Gross Profit
(dollars in thousands)
(unaudited)
Three Months Ended Six Months Ended
June 28,
2024		March 29,
2024		June 30,
2023		June 28,
2024		June 30,
2023
U.S. GAAP gross profit$25,557 $22,994 $25,742 $48,551 $58,982 
Non-GAAP adjustments:
Share-based compensation717 776 1,091 1,493 1,512 
Other (1)160 748 — 908 1,287 
Non-GAAP gross profit$26,434 $24,518 $26,833 $50,952 $61,781 
U.S. GAAP gross margin12.6 %11.4 %13.9 %12.0 %14.4 %
Non-GAAP gross margin13.0 %12.2 %14.5 %12.6 %15.0 %
(1)Represents severance costs associated with our global reduction-in-force programs.
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ICHOR HOLDINGS, LTD.
Reconciliation of U.S. GAAP Operating Income (Loss) to Non-GAAP Operating Income
(dollars in thousands)
(unaudited)
Three Months Ended Six Months Ended
June 28,
2024		March 29,
2024		June 30,
2023		June 28,
2024		June 30,
2023
U.S. GAAP operating income (loss)$(2,262)$(3,741)$(2,906)$(6,003)$1,888 
Non-GAAP adjustments:   
Amortization of intangible assets2,086 2,146 3,960 4,232 7,926 
Share-based compensation3,938 2,375 4,277 6,313 7,914 
Transaction-related costs (1)— 785 — 785 — 
Other (2)733 867 — 1,600 1,324 
Non-GAAP operating income$4,495 $2,432 $5,331 $6,927 $19,052 
U.S. GAAP operating margin(1.1)%(1.9)%(1.6)%(1.5)%0.5 %
Non-GAAP operating margin2.2 %1.2 %2.9 %1.7 %4.6 %
(1)Represents transaction-related costs incurred in connection with our acquisitions pipeline.
(2)Represents severance costs associated with our global reduction-in-force programs, and, for the three and six months ended June 28, 2024, $0.5 million of costs incurred in connection with exiting and consolidating one of our U.S.-based manufacturing facilities.
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ICHOR HOLDINGS, LTD.
Reconciliation of U.S. GAAP Net Loss to Non-GAAP Net Income (Loss)
(in thousands, except share and per share amounts)
(unaudited)
Three Months Ended Six Months Ended
June 28,
2024		March 29,
2024		June 30,
2023		June 28,
2024		June 30,
2023
U.S. GAAP net loss$(5,112)$(8,989)$(20,656)$(14,101)$(20,661)
Non-GAAP adjustments:
Amortization of intangible assets2,086 2,146 3,960 4,232 7,926 
Share-based compensation3,938 2,375 4,277 6,313 7,914 
Transaction-related costs (1)— 785 — 785 — 
Other (2)733 867 — 1,600 1,324 
Tax adjustments related to non-GAAP adjustments (3)174 104 2,032 278 4,238 
Tax expense from valuation allowance (4)— — 11,094 — 11,094 
Non-GAAP net income (loss)$1,819 $(2,712)$707 $(893)$11,835 
U.S. GAAP diluted EPS$(0.15)$(0.30)$(0.71)$(0.44)$(0.71)
Non-GAAP diluted EPS$0.05 $(0.09)$0.02 $(0.03)$0.40 
Shares used to compute non-GAAP diluted EPS34,043,87030,010,97129,492,96631,779,52129,454,500
(1)Represents transaction-related costs incurred in connection with our acquisitions pipeline.
(2)Represents severance costs associated with our global reduction-in-force programs, and, for the three and six months ended June 28, 2024, $0.5 million of costs incurred in connection with exiting and consolidating one of our U.S.-based manufacturing facilities.
(3)Adjusts GAAP income tax expense for the impact of our non-GAAP adjustments, which are presented on a gross basis. During the second quarter of 2023, we recorded a valuation allowance against our U.S. federal and state deferred tax assets on a GAAP basis. In the first quarter of 2024, we determined that the valuation allowance should be recognized against our U.S. federal and state deferred tax assets on a non-GAAP basis as we were not in a three-year cumulative U.S. income position on a non-GAAP basis. Accordingly, from the first quarter of 2024 and forward, tax expense on a GAAP and non-GAAP basis reflects a valuation allowance against our U.S. federal and state deferred tax assets.
(4)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.
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ICHOR HOLDINGS, LTD.
Reconciliation of U.S. GAAP Net Cash Provided by Operating Activities to Free Cash Flow
(in thousands)
(unaudited)
Three Months Ended Six Months Ended
June 28,
2024		March 29,
2024		June 30,
2023		June 28,
2024		June 30,
2023
Net cash provided by operating activities$17,492 $4,804 $26,943 $22,296 $16,070 
Capital expenditures(2,847)(4,490)(4,015)(7,337)(10,834)
Free cash flow$14,645 $314 $22,928 $14,959 $5,236 
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