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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b‑2 of the Exchange Act.

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 ~~August 4, 2017,~~May 1, 2018, the registrant had ~~25,115,852~~25,664,553 ordinary shares, $0.0001 par value per share, outstanding.

	June 30, 2017			December 30, 2016			March 30, 2018			December 29, 2017
Assets
Current assets:
Cash	$	65,044		$	50,854		$	63,796		$	68,794
Restricted cash		1,794			1,794			—			510
Accounts receivable, net		39,818			26,401			76,199			49,249
Inventories		96,995			70,881
Inventories, net								164,623			154,541
Prepaid expenses and other current assets		4,857			7,061			5,260			5,357
Current assets from discontinued operations		35			99			—			3
Total current assets		208,543			157,090			309,878			278,454
Property and equipment, net		14,895			12,018			36,286			34,380
Other noncurrent assets		1,199			3,574			782			1,052
Deferred tax assets		733			570			994			994
Intangible assets, net		28,548			32,146			69,526			73,405
Goodwill		77,071			77,093			168,412			169,399
Total assets	$	330,989		$	282,491		$	585,878		$	557,684
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	101,493		$	88,531		$	130,383		$	121,405
Accrued liabilities		6,479			6,554			11,492			12,211
Other current liabilities		7,476			5,421			7,137			6,715
Current portion of long-term debt								6,563			6,490
Current liabilities from discontinued operations		776			564			—			400
Total current liabilities		116,224			101,070			155,575			147,221
Long-term debt, net of current portion		38,208			37,944
Long-term debt, less current portion, net								181,042			180,247
Deferred tax liabilities		462			606			10,628			10,558
Other non-current liabilities		1,327			1,173			2,950			2,896
Non-current liabilities from discontinued operations		30			39
Total liabilities		156,251			140,832			350,195			340,922
Shareholders’ equity
Preferred shares ($0.0001 par value; 20,000,000 shares authorized; no shares issued and outstanding)		—			—
Ordinary shares ($0.0001 par value; 200,000,000 shares authorized; 25,056,188 and 23,857,381 shares issued and outstanding, respectively)		3			2
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; 26,083,585 and 25,892,162 shares outstanding, respectively; 26,279,335 and 25,892,162 shares issued, respectively)								3			3
Additional paid in capital		206,427			196,049			221,897			214,697
Accumulated deficit		(31,692	)		(54,392	)
Treasury shares (195,750 and zero shares, respectively)								(5,000	)		—
Retained earnings								18,783			2,062
Total shareholders’ equity		174,738			141,659			235,683			216,762
Total liabilities and shareholders’ equity	$	330,989		$	282,491		$	585,878		$	557,684

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30, 2017			June 24, 2016			June 30, 2017			June 24, 2016			March 30, 2018		March 31, 2017
Net sales	$	159,733		$	95,365		$	308,437		$	168,652		$	258,029	$	148,704
Cost of sales		136,227			80,185			260,916			141,547			215,430		124,689
Gross profit		23,506			15,180			47,521			27,105			42,599		24,015
Operating expenses:
Research and development		1,950			1,290			3,694			2,665			2,452		1,744
Selling, general, and administrative		7,984			7,183			14,842			13,547			15,711		6,858
Amortization of intangible assets		1,803			1,803			3,598			3,406			3,879		1,795
Total operating expenses		11,737			10,276			22,134			19,618			22,042		10,397
Operating income		11,769			4,904			25,387			7,487			20,557		13,618
Interest expense, net		675			1,160			1,365			2,062
Interest expense														2,504		690
Other expense (income), net		151			244			(398	)		(143	)		241		(549	)
Income from continuing operations before income taxes		10,943			3,500			24,420			5,568			17,812		13,477
Income tax expense from continuing operations		473			225			998			461			1,091		525
Net income from continuing operations		10,470			3,275			23,422			5,107			16,721		12,952
Discontinued operations:
Loss from discontinued operations before taxes		(610	)		(2,305	)		(721	)		(4,029	)		—		(111	)
Income tax expense from discontinued operations		—			2			1			3			—		1
Net loss from discontinued operations		(610	)		(2,307	)		(722	)		(4,032	)		—		(112	)
Net income		9,860			968			22,700			1,075		$	16,721	$	12,840
Less: Undistributed earnings attributable to preferred shareholders		—			(963	)		—			(1,070	)
Net income attributable to ordinary shareholders	$	9,860		$	5		$	22,700		$	5
Net income per share from continuing operations attributable to ordinary shareholders:
Net income per share from continuing operations:
Basic	$	0.42		$	0.19		$	0.95		$	0.29		$	0.64	$	0.53
Diluted	$	0.40		$	0.06		$	0.91		$	0.08		$	0.63	$	0.51
Net income per share attributable to ordinary shareholders:
Net income per share:
Basic	$	0.40		$	0.06		$	0.92		$	0.07		$	0.64	$	0.52
Diluted	$	0.38		$	0.02		$	0.88		$	0.02		$	0.63	$	0.50
Shares used to compute net income from continuing operations per share attributable to ordinary shareholders:
Shares used to compute net income from continuing operations per share:
Basic		24,848,365			85,589			24,751,390			75,631			26,030,298		24,654,415
Diluted		26,063,527			277,554			25,868,403			285,066			26,734,710		25,640,089
Shares used to compute net income per share attributable to ordinary shareholders:
Shares used to compute net income per share:
Basic		24,848,365			85,589			24,751,390			75,631			26,030,298		24,654,415
Diluted		26,063,527			277,554			25,868,403			285,066			26,734,710		25,640,089

					Additional					Total
	Ordinary Shares				Paid-In		Accumulated			Shareholders’							Additional		Treasury							Total
	Shares		Amount		Capital		Deficit			Equity		Ordinary Shares					Paid-In		Shares					Retained		Shareholders'
Balance at December 30, 2016		23,857,381	$	2	$	196,049	$	(54,392	)	$	141,659
Ordinary shares issued from initial public offering, net of transaction costs		881,667		1		7,277		—			7,278
												Shares			Amount		Capital		Shares		Amount			Earnings		Equity
Balance at December 29, 2017													25,892,162		$	3	$	214,697		—	$	—		$	2,062	$	216,762
Ordinary shares issued from exercise of stock options		264,697		—		2,188		—			2,188		325,969			—		3,232		—		—			—		3,232
Ordinary shares issued from vesting of restricted share units		52,443		—		—		—			—		50,423			—		—		—		—			—		—
Ordinary shares issued from employee share purchase plan													10,781			—		177		—		—			—		177
Repurchase of ordinary shares													(195,750	)		—		—		195,750		(5,000	)		—		(5,000	)
Share-based compensation expense		—		—		913		—			913		—			—		3,791		—		—			—		3,791
Net income		—		—		—		22,700			22,700		—			—		—		—		—			16,721		16,721
Balance at June 30, 2017		25,056,188	$	3	$	206,427	$	(31,692	)	$	174,738
Balance at March 30, 2018													26,083,585		$	3	$	221,897		195,750	$	(5,000	)	$	18,783	$	235,683

	Six Months Ended						Three Months Ended
	June 30, 2017			June 24, 2016			March 30, 2018			March 31, 2017
Cash flows from operating activities:
Net income	$	22,700		$	1,075		$	16,721		$	12,840
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		5,185			4,621			5,752			2,485
Gain on sale of investments and settlement of note receivable		(241	)		—			—			(241	)
Share-based compensation		913			972			3,791			344
Deferred income taxes		(224	)		(175	)		(127	)		(75	)
Amortization of debt issuance costs		264			263			333			132
Changes in operating assets and liabilities, net of assets acquired:
Accounts receivable, net		(13,417	)		(10,732	)		(26,350	)		(22,661	)
Inventories		(26,114	)		1,288			(10,470	)		(20,063	)
Prepaid expenses and other assets		2,462			(1,260	)		370			(1,505	)
Accounts payable		13,592			9,320			8,731			17,904
Accrued liabilities		197			1,116			(974	)		(2,202	)
Other liabilities		2,191			(2,578	)		1,439			1,365
Net cash provided by operating activities		7,508			3,910
Net cash used in operating activities								(784	)		(11,677	)
Cash flows from investing activities:
Capital expenditures		(5,214	)		(804	)		(3,668	)		(2,274	)
Cash paid for acquisitions, net of cash acquired		—			(17,406	)
Proceeds from sale of intangible assets		—			230
Proceeds from sale of property, plant, and equipment		—			243
Proceeds from sale of investments and settlement note receivable		2,430			—			—			2,430
Net cash used in investing activities		(2,784	)		(17,737	)
Net cash provided by (used in) investing activities								(3,668	)		156
Cash flows from financing activities:
Issuance of ordinary shares, net of fees		7,278			—			—			7,277
Proceeds from exercise of stock options		2,188			—
Borrowings under revolving commitment		—			7,000
Repayments on revolving commitment		—			(4,015	)
Borrowing on long-term debt		—			15,000
Repayments on long-term debt		—			(2,275	)
Net cash provided by financing activities		9,466			15,710
Net increase in cash		14,190			1,883
Cash and restricted cash at beginning of year		52,648			24,188
Cash and restricted cash at end of quarter	$	66,838		$	26,071
Issuance of ordinary shares under share-based compensation plans								3,409			—
Repurchase of ordinary shares								(5,000	)		—
Debt issuance and modification costs								(2,092	)		—
Borrowings on revolving credit facility								7,162			—
Repayments on term loan								(4,535	)		—
Net cash provided by (used in) financing activities								(1,056	)		7,277
Net decrease in cash								(5,508	)		(4,244	)
Cash at beginning of year								69,304			52,648
Cash at end of quarter							$	63,796		$	48,404
Supplemental disclosures of cash flow information:
Cash paid during the period for interest	$	1,927		$	1,512		$	1,297		$	1,409
Cash paid during the period for taxes	$	93		$	259		$	230		$	14
Supplemental disclosures of non-cash activities:
Capital expenditures included in accounts payable	$	502		$	224		$	834		$	1,585

(~~dollars~~dollar figures in tables in thousands, except share and per share amounts and percentages)

These consolidated 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 financial figures presented in the notes to consolidated financial statements are in thousands, except share, per share, and percentage figures.

We use a 52 or 53 week fiscal year ending on the last Friday in December. The three months ended ~~June~~March 30, ~~2017~~2018 and ~~June 24, 2016~~March 31, 2017 were both 13 weeks. ~~The six months ended June 30, 2017 and June 24, 2016 were both 26 weeks.~~ References to the ~~second~~first quarter of ~~2017~~2018 and ~~2016~~2017 relate to the three months ended ~~June~~March 30, 2018 and March 31, 2017, ~~and June 24, 2016,~~ respectively. References to fiscal year 2018 relate to our fiscal year ending December 28, 2018.

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. ~~The Company bases its~~We base our estimates and judgments on historical experience and on various other assumptions that ~~it believes~~we believe are reasonable under the circumstances. Actual results could differ from the estimates made by management. Significant estimates include the fair value of assets and liabilities acquired in acquisitions, estimated useful lives for long‑lived assets, allowance for doubtful accounts, inventory valuation, uncertain tax positions, fair value assigned to stock options granted, and impairment analysis for both definite‑lived intangible assets and goodwill.

We recognize revenue when control of promised goods or services is transferred to our customers, in an ~~Immaterial Error~~

~~During~~amount that reflects the ~~second quarter of 2017,~~consideration we ~~corrected an error related~~expect to ~~translating the inventory balances at our Malaysia and Singapore subsidiaries at an incorrect foreign currency rate. The error arose~~be entitled to in ~~prior period financial statements beginning in periods prior to 2014 and through 2016. The correction resulted in a $1,752 increase in cost of~~exchange for those goods or services. This amount is recorded as net sales ~~and a corresponding decrease in gross profit~~ in our consolidated statements of ~~operations~~operations.

Transaction price – In most of our contracts, prices are generally determined by a customer-issued purchase order and remain fixed. Certain contracts contain variable consideration, including early-payment discounts and rebates. When a ~~decrease~~contract includes variable consideration, we evaluate the estimate of the variable consideration to ~~inventories~~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 related to shipping and handling are classified as net sales, while all costs incurred by us for shipping and handling are classified as cost of goods sold.

Performance obligations – Substantially all of our performance obligations pertain to promised goods (“products”), which are primarily comprised of gas and fluid delivery systems, weldments, and other components. Most of our contracts contain a single performance obligation. Product sales are recognized at a point-in-time, generally upon delivery, as such term is definied within the contract, as that is when control of the promised good has transferred. Products are covered by a standard assurance warranty, varying in length by customer, which promises that delivered products conform to contract specifications. As such, we account for such warranties under ASC 460, Guarantees, and not as a separate performance obligation.

Contract balances – Accounts receivable represents our unconditional right to receive consideration from our customers. Accounts receivable are carried at invoice price less an estimate for doubtful accounts and estimated payment discounts. Payment terms vary by customer but are generally due within 15‑60 days. Historically, we have not incurred significant payment issues with our customers. We had no significant contract assets or liabilities on our consolidated ~~balances sheet during~~balance sheets in any of the second quarter of 2017. We evaluated the error on both a quantitative and qualitative basis and determined that the error was not material and did not affect the trend of net income or cash flows in previously issued financial statements. Additionally, we determined that correcting the error in the second quarter of 2017 is not expected to have a material impact to our consolidated financial statements for the fiscal year ended December 29, 2017.periods presented.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards ~~Update~~Updated (“ASU”) ~~No.~~ 2014‑09, Revenue from Contracts with Customers (Topic 606) ~~(“ASU 2014‑09”)~~, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014‑09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes ~~most current~~nearly all existing revenue recognition guidance. ~~In August 2015,~~Subsequent to the issuance of ASU No. 2014‑09, the FASB ~~issued ASU No. 2015‑14,~~clarified the guidance through several ASUs. We adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, on December 30, 2017, the first day of fiscal year 2018, using the modified retrospective method. After assessing our contracts with our customers, we determined that there was not a significant change to the nature, timing, and extent of our revenues under the new standard. Accordingly, we did not make a cumulative-effect adjustment to retained earnings on December 30, 2017, as there was no adjustment to be made.

In August 2016, the FASB issued ASU 2016‑15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments. The amendment provides and clarifies guidance on the classification of certain cash receipts and cash payments in the statement of cash flows to eliminate diversity in practice. We adopted ASU 2016-15 on December 30, 2017, the first day of fiscal year 2018, which did not have a significant impact on our consolidated financial statements.

In May 2017, the FASB issued ASU 2017‑09, Compensation-Stock Compensation (Topic ~~606)~~718) – ~~Deferral~~Scope of ~~the Effective Date~~Modification Accounting ~~(“ASU 2015‑14”)~~, which ~~defers~~provides guidance about which changes to the ~~effective date~~terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. We adopted ASU ~~2014‑~~2017‑09 ~~for one year and permits early adoption in accordance with the original effective date of ASU 2014‑09.The standard is effective for the Company beginning in~~on December 30, 2017, the first ~~quarter~~day of ~~the~~ fiscal year ~~ending December 28, 2018. The Company is currently evaluating the~~2018, which did not have a significant impact ~~of this accounting standard.~~on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016‑02, Leases (Topic 842) ~~(“ASU 2016‑02”)~~, which establishes a comprehensive lease standard for all industries. The standard requires lessees to recognize a right of use asset and a lease liability for virtually all leases, other than leases that meet the definition of short term leases. The standard is effective for ~~the Company~~us beginning in the first quarter of ~~the~~ fiscal year ~~ending December 27,~~ 2019. ~~The Company is~~We are currently evaluating the impact of this accounting standard.

~~In January 2017, the FASB issued ASU No. 2017‑04,~~ ~~Intangibles—Goodwill and Other (Topic 350)~~ ~~(“ASU 2017‑04”), which eliminates the requirement to perform~~ ~~Step 2 of the goodwill impairment test~~. Under ASU 2017‑04, goodwill impairment testing will be performed by comparing the fair value of the reporting unit with its carrying amount and recognizing an impairment charge, if any, for the amount a reporting unit’s carrying amount exceeds its fair value. The standard is effective for goodwill impairment tests in fiscal years beginning after December 15, 2019, and should be applied on a prospective basis. The Company does not expect this standard to have a significant impact on its financial statements.

On December 11, 2017, we completed the acquisition of ~~Ajax‑United Patterns & Molds, Inc.~~Talon Innovations Corporation (“~~Ajax”~~Talon”), a ~~manufacturer~~Minnesota-based leader in the design and manufacturing of ~~complex plastic and metal products~~high precision machined parts used in leading edge semiconductor tools, for $137.0 million. Talon expanded our capacity and capabilities in the ~~medical, biomedical,~~area of component manufacturing for gas and chemical delivery tools used in semiconductor ~~data communication~~manufacturing and ~~food processing equipment industries, for $17,594.~~other industrial applications.

The following table presents the preliminary purchase price allocation as of December 29, 2017 and March 30, 2018, as well as measurement period adjustments ~~from December 30, 2016 to June 30, 2017.~~recorded during the one year measurement period. Measurement period adjustments ~~are~~ primarily ~~related~~relate to ~~finalization~~the fair value of Talon’s opening balance accounts receivable, income taxes payable, and deferred taxes.

	Preliminary Allocation December 29, 2017			Measurement Period Adjustment			Preliminary Allocation March 30, 2018
Cash acquired	$	5,586		$	—		$	5,586
Accounts receivable		11,471			600			12,071
Inventories		19,399			—			19,399
Prepaid expenses and other current assets		182			—			182
Property and equipment		16,655			—			16,655
Other noncurrent assets		76			—			76
Intangible assets		38,000			—			38,000
Goodwill		74,594			(1,375	)		73,219
Accounts payable		(4,706	)		—			(4,706	)
Accrued liabilities		(2,767	)		—			(2,767	)
Other current liabilities		(1,838	)		972			(866	)
Deferred tax liabilities		(19,652	)		(197	)		(19,849	)
Total acquisition consideration	$	137,000		$	—		$	137,000

On July 27, 2017, we completed the ~~valuation~~acquisition of ~~deferred tax liabilities~~Cal‑Weld, Inc. (“Cal‑Weld”), a California-based leader in the design and ~~net identifiable assets~~fabrication of precision, high purity industrial components, subsystems, and ~~liabilities:~~systems, for $56.9 million. Cal‑Weld expanded our capacity and capabilities in the area of component manufacturing for Gas Delivery tools used in semiconductor manufacturing.

The following table presents the preliminary purchase price allocation as of December 29, 2017 and March 30, 2018, as well as measurement period adjustments recorded during the one year measurement period. Measurement period adjustments primarily relate to the fair value of Cal‑Weld’s opening balance inventory.

	Preliminary Allocation December 30, 2016			Measurement Period Adjustment			Final Allocation June 30, 2017			Preliminary Allocation December 29, 2017			Measurement Period Adjustment			Preliminary Allocation March 30, 2018
Cash acquired	$	187		$	-		$	187		$	7,337		$	—		$	7,337
Accounts receivable, net		1,250			-			1,250
Accounts receivable											10,318			—			10,318
Inventories		3,236			-			3,236			20,836			(388	)		20,448
Prepaid expenses and other current assets		77			8			85			400			—			400
Property and equipment, net		1,545			(78	)		1,467
Property and equipment											1,639			—			1,639
Other noncurrent assets		2,948			-			2,948			587			—			587
Intangible assets, net		8,030			-			8,030
Intangible assets											12,140			—			12,140
Goodwill		7,078			(22	)		7,056			17,734			388			18,122
Accounts payable and other accrued liabilities		(4,486	)		9			(4,477	)
Accounts payable											(5,991	)		—			(5,991	)
Accrued liabilities											(1,937	)		—			(1,937	)
Other non-current liabilities											(908	)		—			(908	)
Deferred tax liabilities		(2,271	)		83			(2,188	)		(5,276	)		—			(5,276	)
Total acquisition consideration	$	17,594		$	-		$	17,594		$	56,879		$	—		$	56,879

	June 30, 2017			December 30, 2016			March 30, 2018			December 29, 2017
Machinery	$	6,408		$	5,243		$	25,834		$	23,464
Leasehold improvements		14,326			11,276			14,778			15,329
Computer software, hardware and equipment		3,985			2,848			4,581			4,551
Office furniture, fixtures and equipment		255			220			906			868
Vehicles		9			10			51			51
Construction-in-process		1,202			2,069			4,624			2,771
		26,185			21,666			50,774			47,034
Less accumulated depreciation		(11,290	)		(9,648	)		(14,488	)		(12,654	)
Total property and equipment	$	14,895		$	12,018
Total property and equipment, net							$	36,286		$	34,380

Depreciation expense was ~~$897, $676, $1,587,~~$1.9 million and ~~$1,215~~$0.7 million for the ~~second~~first quarter of 2018 and 2017, ~~and 2016 and the six months ended June 30, 2017 and June 24, 2016,~~ respectively.

	June 30, 2017										March 30, 2018
	Gross value		Accumulated amortization			Accumulated impairment charges			Carrying amount		Gross value		Accumulated amortization			Accumulated impairment charges		Carrying amount		Weighted average useful life
Trademarks	$	9,690	$	(5,327	)	$	—		$	4,363	$	9,690	$	(6,056	)	$	—	$	3,634	10.0 years
Customer relationships		50,557		(18,432	)		(11,076	)		21,049		81,427		(22,826	)		—		58,601	7.8 years
Developed technology		28,100		(16,809	)		(8,155	)		3,136		22,990		(15,699	)		—		7,291	7.7 years
Total intangible assets	$	88,347	$	(40,568	)	$	(19,231	)	$	28,548	$	114,107	$	(44,581	)	$	—	$	69,526

	December 30, 2016										December 29, 2017
	Gross value		Accumulated amortization			Accumulated impairment charges			Carrying amount		Gross value		Accumulated amortization			Accumulated impairment charges		Carrying amount		Weighted average useful life
Trademarks	$	9,690	$	(4,845	)	$	—		$	4,845	$	9,690	$	(5,814	)	$	—	$	3,876	10.0 years
Customer relationships		50,557		(17,150	)		(11,076	)		22,331		81,427		(20,060	)		—		61,367	7.8 years
Developed technology		28,100		(14,975	)		(8,155	)		4,970		22,990		(14,938	)		—		8,052	7.7 years
Backlog		30		(30	)		—			—		660		(550	)		—		110	0.5 years
Total intangible assets	$	88,377	$	(37,000	)	$	(19,231	)	$	32,146	$	114,767	$	(41,362	)	$	—	$	73,405

Amortization expense was ~~$1,803, $1,803, $3,598,~~$3.9 million and ~~$3,406~~$1.8 million for the ~~second~~first quarter of ~~2017~~2018 and ~~2016 and~~2017 ~~the six months ended June 30, 2017 and June 24, 2016,~~, respectively.

~~During~~The following table presents changes to goodwill during the ~~six months ended June 30, 2017, goodwill decreased by $22 due to a measurement period adjustment associated with our acquisition~~first quarter of ~~Ajax.~~2018:

~~The Company leases~~We lease offices under various operating leases expiring through 2024. ~~The Company is~~We are responsible for utilities and ~~its~~our proportionate share of operating expenses under the facilities’ leases. ~~The Company recognizes escalating~~Escalating lease payments are recognized on a straight‑line basis over the lease term. The total obligation at ~~June~~March 30, ~~2017 is $7,249.~~2018 was $22.2 million.

~~The Company is~~We are periodically involved in legal actions and claims that arise as a result of events that occur in the normal course of operations. The ultimate resolution of these actions is not expected to have a material adverse effect on ~~the Company’s~~our financial position or results of operations.

~~At June 30, 2017, the Company has purchase orders outstanding for raw materials and component parts totaling $76,135.~~

~~Information on the Company’s income taxes~~Income tax information for the periods reported isare as follows:

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30, 2017			June 24, 2016			June 30, 2017			June 24, 2016			March 30, 2018			March 31, 2017
Income tax expense from continuing operations	$	473		$	225		$	998		$	461		$	1,091		$	525
Income from continuing operations before income taxes	$	10,943		$	3,500		$	24,420		$	5,568		$	17,812		$	13,477
Effective income tax rate		4.3	%		6.4	%		4.1	%		8.3	%		6.1	%		3.9	%

Our effective tax rate for the ~~second~~first quarter of ~~2017~~2018 differs from the statutory rate due to taxes on foreign income that differ from the U.S. tax rate and ~~2016~~accrued withholding taxes. Our effective tax rate for the first quarter of 2017 differs from the statutory rate due to a full valuation allowance provided against ~~its~~our U.S. net deferred tax assets, taxes on foreign income ~~at rates~~ that differ from the U.S. tax rate, and accrued withholding taxes.

As ~~we do~~of March 30, 2018, our accounting for the tax effects of the Tax Cuts and Jobs Act is not ~~believe that it is more likely than not that we will realize a benefit from our U.S. net deferred tax assets, including our U.S. net operating losses, we continue~~complete, however, during the first quarter of 2018, there were no adjustments made to ~~provide a full valuation allowance against essentially all of those assets, therefore, we do not incur significant U.S. income tax expense or benefit. We have not~~the provisional amounts recorded ~~a valuation allowance against our other foreign net deferred tax assets as we believe that it is more likely than not that we will realize a benefit from those assets.~~at December 29, 2017.

The ending balance for the unrecognized tax benefits for uncertain tax positions was approximately ~~$659~~$2.0 million at ~~June~~March 30, ~~2017.~~2018. The related interest and penalties were ~~$185.~~$0.1 million and $0.4 million, respectively. The uncertain tax positions that are reasonably possible to decrease in the next twelve months are insignificant.

As of ~~June~~March 30, ~~2017, the Company is~~2018, we are not ~~currently~~ under examination by tax authorities.

~~The Company sponsors~~We sponsor a 401(k) plan available to employees of ~~its~~our U.S.‑based subsidiaries. Participants may make salary deferral contributions not to exceed 50% of a participant’s compensation in a plan year or the maximum amount otherwise allowed by law. Eligible employees receive a discretionary matching contribution equal to 50% of each participant’s deferral, up to an annual maximum of two thousand five hundred dollars. Matching contributions were ~~$210, $85, $338,~~$0.5 million and ~~$218~~$0.1 million for the ~~second~~first quarter of ~~2017~~2018 and ~~2016 and the six months ended June 30,~~ 2017, ~~and June 24, 2016,~~ respectively.

~~The Company sponsors~~We sponsor a self‑insured group medical insurance plan for ~~its~~our U.S. employees and their dependents. The self‑insured plan is designed to provide a specified level of coverage, with stop‑loss coverage provided by a commercial insurer, in order to limit ~~the Company’s~~our exposure. Expense incurred related to this plan was ~~$723, $524, $1,416,~~$2.5 million and ~~$1,209~~$0.7 million for the ~~second~~first quarter of ~~2017~~2018 and ~~2016 and the six months ended June 30,~~ 2017, ~~and June 24, 2016,~~ respectively.

On ~~August 11, 2015, the Company~~February 15, 2018, we amended and ~~its subsidiaries entered into~~restated our credit agreement (the “amendment”), which replaced our existing credit facilities with a ~~new $55,000~~$175.0 million term loan ~~facility~~ and ~~$20,000~~a revolving credit facility ~~(collectively,~~(the “revolver”) allowing for borrowings up to $125.0 million. Additionally, the ~~“2015 Credit Facility”)~~amendment reduced our borrowing rate, depending on our leverage ratio, and extended the maturity date. We incurred debt issuance costs of $2.1 million in connection with the amendment. The amendment did not meet the definition of an extinguishment and was accounted for as a syndicate of lenders and repaid all outstanding indebtedness under the prior $50,000 term loan facility and $25,000 revolving credit facility. In April 2016, the Company amended the 2015 Credit Facility to increase the term loan facility by $15,000. The 2015 Credit Facility also includes a letter of credit subfacility under the revolving credit facility.debt modification.

Interest is charged at either the Base Rate or the Eurodollar rate (as such terms are defined in the ~~agreement governing the 2015 Credit Facility)~~credit agreement) at ~~the~~our option, ~~of the Company,~~ plus an applicable margin. The Base Rate is equal to the higher of i) the Prime Rate, ii) the Federal Funds ~~Effective rate~~Rate plus 0.5%, or iii) the Eurodollar Rate plus 1.00%. The Eurodollar rate is equal to LIBOR. The applicable margin on Base Rate and Eurodollar Rate loans is ~~3.00%~~0.75‑1.50% and ~~4.00%,~~1.75‑2.50% per annum, ~~respectively. Interest payments~~respectively, depending on our leverage ratio. We are also charged a commitment fee of 0.20%-0.35% on the ~~outstanding principal balance~~unused portion of our revolver. Base Rate interest payments and commitment fees are due ~~quarterly if loans are made under the Base Rate. Interest~~quarterly. Eurodollar interest payments are due on the last day of the applicable interest ~~period under Eurodollar Rate loans. As of June~~period. At March 30, ~~2017,~~2018, the term loan ~~facility~~and revolver bore interest at the Eurodollar rate option ~~at 5.15%.~~of 4.08% and 4.16%, respectively.

Term loan principal payments of $2.2 million are due on a quarterly basis, commencing June 30, 2018. The term loan and revolver mature on February 15, 2023.

~~The Company received advisory services from Francisco Partners Management, L.P. (“Francisco Partners”) an entity affiliated with~~Share Repurchase Program

In February 2018, our board of directors authorized a share repurchase program up to $50.0 million under which we may repurchase our ordinary shares in the ~~Company’s principal shareholders but in which such shareholders hold no interest,~~open market or through ~~our December 2016 IPO, at which point~~privately negotiated transactions, depending on market conditions and other factors. Ordinary shares repurchased are recorded as treasury shares using the agreement was terminated. Under the agreement, the Company paid Francisco Partners an annual advisory fee equal to $1,500 per year. Francisco Partners has waived payment of advisory fees for all periods presented.

The Company also received consulting services from Francisco Partners Consulting, LLC (“FPC”), an entity that provides consulting services to the private equity funds management by Francisco Partners and their portfolio companiescost method on a ~~dedicated basis, through our December 2016 IPO,~~first-in, first-out basis.

During the first quarter of 2018, we repurchased 195,750 ordinary shares for a total cost of $5.0 million at ~~which point~~an average price of $25.51 per share. At March 30, 2018, $45.0 million remained available to repurchase ordinary shares under the agreement was terminated. FPC is not an affiliate of the Company or of Francisco Partners, and none of the Company’s principal shareholders hold an in interest in FPC. In the six months ended June 30, 2017, the Company received from FPC a refund of previously paid consulting fees of $281. In the six months ended June 24, 2016, the Company paid $262 to FPC for consulting services.

~~The Company purchases certain parts from Ajax Foresight Global Manufacturing Sdn. Bhd. (“AFGM”),~~ ~~an investment acquired in conjunction with the acquisition of Ajax~~. Total purchases from AFGM were $387 and $0 in the six months ended June 30, 2017 and June 24, 2016, respectively. Outstanding accounts payable to AFGM totaled $344 at December 30, 2016. During February 2017, the Company sold its investment in AFGM, and therefore no related party relationship exists on a go‑forward basis.repurchase program.

The ~~Company has two share‑based compensation plans, the Ichor Holdings Ltd. 2012 Equity Incentive Plan (the “2012 Plan”) and~~ ~~the~~ 2016 Omnibus Incentive Plan (the “2016 Plan”)~~, which provide~~ provides for grants of share‑based awards to employees, directors, and consultants. Awards may be in the form of options, tandem and non‑tandem stock appreciation rights, restricted ~~shares,~~share awards or restricted ~~stock~~share units (“restricted shares”), performance awards, and other share‑based awards. Awards generally vest over four years, 25% on the first anniversary and quarterly thereafter.

Share‑based compensation expense across all plans for stock options, restricted shares, and employee share purchase rights was $3.8 million and $0.3 million for the first quarter of 2018 and 2017, respectively.

On January 18, 2018, in connection with the resignation of our former Chief Financial Officer, certain separation benefits became effective, which includes a vesting acceleration of all outstanding and unvested stock options and restricted shares. Consequently, 88,445 stock options and 39,175 restricted shares ~~across all plans~~vested on January 18, 2018. This was ~~$569, $555, $913, and $972~~accounted for ~~the~~ ~~second quarter of 2017 and 2016 and the six months ended June 30, 2017 and June 24, 2016, respectively.~~as an equity award modification under ASC Topic 718, resulting in $2.9 million in share-based compensation expense.

The following table summarizes ~~the Company’s~~ stock option ~~activity during the six months ended June 30, 2017:~~activity:

	Number of Stock Options										Number of Stock Options
	Time vesting			Performance vesting		Weighted average exercise price per share		Weighted average remaining contractual term	Aggregate intrinsic value (in thousands)		Time vesting			Performance vesting		Weighted average exercise price per share		Weighted average remaining contractual term	Aggregate intrinsic value (in thousands)
Outstanding, December 30, 2016		1,948,307			215,908	$	8.87
Outstanding, December 29, 2017												1,452,825			215,908	$	12.87
Granted		402,700			—	$	18.53					711,100			—	$	24.95
Exercised		(264,697	)		—	$	8.27					(325,969	)		—	$	9.91
Forfeited		—			—	$	—					—			—	$	—
Expired		—			—	$	—					—			—	$	—
Outstanding, June 30, 2017		2,086,310			215,908	$	10.62	3.8 years	$	22,078
Exercisable, June 30, 2017		1,431,979			215,908	$	8.95	2.8 years	$	18,480
Outstanding, March 30, 2018												1,837,956			215,908	$	17.52	5.1 years	$	14,537
Exercisable, March 30, 2018												464,356			215,908	$	9.50	2.5 years	$	10,006

The following table summarizes ~~the Company’s~~ restricted share ~~activity during~~activity:

The 2017 Employee Stock Purchase Plan (the “2017 ESPP”) grants employees the ~~six months ended~~ability to designate a portion of their base-pay to purchase ordinary shares at a price equal to 85% of the fair market value of our ordinary shares on the first or last day of each 6 month purchase period. Purchase periods begin on January 1 or July 1 and end on June 30 ~~2017:~~or December 31, or the next business day if such date is not a business day. Shares are purchased on the last day of the purchase period.

During the first quarter of 2018, 10,781 ordinary shares were purchased under the 2017 ESPP. As of March 30, 2018, 2.5 million ordinary shares remain available for purchase under the 2017 ESPP.

~~The Company’s~~Our Chief Operating Decision Maker, the Chief Executive Officer, reviews ~~the Company’s~~our results of operations on a consolidated level and executive staff is structured by function rather than by product category. Therefore, ~~the Company operates~~we operate in one operating segment. Key resources, decisions, and assessment of performance are also analyzed on a company‑wide level.

~~The Company’s foreign~~Foreign operations are conducted primarily through ~~its~~our wholly owned subsidiaries in Singapore and Malaysia. ~~The Company’s~~Our principal markets include North America, Asia and, to a lesser degree, Europe. Sales by geographic area represent sales to unaffiliated customers.

All information on sales by geographic area is based upon the location to which the products were shipped. The following table sets forth sales by geographic ~~area (including sales from discontinued operations):~~area:

	Three Months Ended				Six Months Ended				Three Months Ended
	June 30, 2017		June 24, 2016		June 30, 2017		June 24, 2016		March 30, 2018		March 31, 2017
United States of America	$	88,544	$	70,292	$	166,639	$	120,133	$	162,240	$	78,095
Singapore		62,584		40,247		122,524		63,493		73,736		59,940
Europe		5,977		2,783		12,376		7,908		12,836		6,399
Other		2,628		1,698		6,898		3,550		9,217		4,270
Total net sales	$	159,733	$	115,020	$	308,437	$	195,084	$	258,029	$	148,704

Earnings per share (“EPS”) was presented in conformity with the two‑class method for the second quarter of 2016 and six months ended June 24, 2016, required for participating securities, as the Company had two classes of stock outstanding until its December 2016 IPO. EPS was not presented in conformity with the two‑class method for the second quarter of 2017 and six months ended June 30, 2017, as the Company had only one class of stock outstanding for that period.

The following table sets forth the computation of ~~the Company’s~~ basic and diluted ~~net income (loss)~~earnings per share ~~attributable to ordinary shareholders~~ and a reconciliation of the numerator and denominator used in the calculation:

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30, 2017			June 24, 2016			June 30, 2017			June 24, 2016			March 30, 2018		March 31, 2017
Numerator:
Net income from continuing operations	$	10,470		$	3,275		$	23,422		$	5,107		$	16,721	$	12,952
Undistributed earnings attributed to preferred shareholders		—			(3,259	)		—			(5,085	)
Net income from continuing operations, attributable to ordinary shareholders	$	10,470		$	16		$	23,422		$	22
Net loss from discontinued operations, attributable to ordinary shareholders	$	(610	)	$	(2,307	)	$	(722	)	$	(4,032	)
Net loss from discontinued operations													$	—	$	(112	)
Net income	$	9,860		$	968		$	22,700		$	1,075		$	16,721	$	12,840
Undistributed earnings attributed to preferred shareholders		—			(963	)		—			(1,070	)
Net income, attributable to ordinary shareholders	$	9,860		$	5		$	22,700		$	5
Denominator:
Weighted average ordinary shares outstanding		24,848,365			85,589			24,751,390			75,631			26,030,298		24,654,415
Dilutive effect of stock options		1,162,889			162,820			1,067,393			157,570			658,223		935,200
Dilutive effect of restricted shares		52,273			29,145			49,620			51,865			45,271		50,474
Weighted average number of shares used in diluted per share calculation for net income from continuing operations		26,063,527			277,554			25,868,403			285,066
Dilutive effect of employee share purchase plan														918		—
Weighted average number of shares used in diluted per share calculation for net income and net income from continuing operations														26,734,710		25,640,089
Weighted average ordinary shares outstanding		24,848,365			85,589			24,751,390			75,631			26,030,298		24,654,415
Dilutive effect of stock options		—			—			—			—			—		—
Dilutive effect of restricted shares		—			—			—			—			—		—
Dilutive effect of employee share purchase plan														—		—
Weighted average number of shares used in diluted per share calculation for net loss from discontinued operations		24,848,365			85,589			24,751,390			75,631			26,030,298		24,654,415
Weighted average ordinary shares outstanding		24,848,365			85,589			24,751,390			75,631
Dilutive effect of stock options		1,162,889			162,820			1,067,393			157,570
Dilutive effect of restricted shares		52,273			29,145			49,620			51,865
Weighted average number of shares used in diluted per share calculation for net income		26,063,527			277,554			25,868,403			285,066
Net income (loss) per share attributable to ordinary shareholders:
Continuing operations:
Earnings per share:
Net income from continuing operations:
Basic	$	0.42		$	0.19		$	0.95		$	0.29		$	0.64	$	0.53
Diluted	$	0.40		$	0.06		$	0.91		$	0.08		$	0.63	$	0.51
Discontinued operations:
Net loss from discontinued operations:
Basic	$	(0.02	)	$	(26.95	)	$	(0.03	)	$	(53.31	)	$	—	$	—
Diluted	$	(0.02	)	$	(26.95	)	$	(0.03	)	$	(53.31	)	$	—	$	—
Total:
Net income:
Basic	$	0.40		$	0.06		$	0.92		$	0.07		$	0.64	$	0.52
Diluted	$	0.38		$	0.02		$	0.88		$	0.02		$	0.63	$	0.50

An aggregated total of ~~105,471, 248,218, 192,558,~~346,622 and ~~242,503~~zero potential ordinary shares have been excluded from the computation of diluted net income ~~(loss)~~ per share ~~attributable to ordinary shareholders~~and diluted net income from continuing operations per share for the ~~second~~first quarter of ~~2017~~2018 and ~~2016 and~~ ~~the~~ ~~six months ended June 30,~~ 2017, ~~and June 24, 2016,~~ respectively, because including them would have been antidilutive.

In January 2016, we made the decision to shut down our Kingston, New York facility as this location consumed a significant amount of resources while contributing very little income. We completed the shutdown of the operations of the New York facility in May 2016 through abandonment as a buyer for the facility and operation was not found. ~~The Company continues to incur expenses related to the lease for this facility, which expires February 2018.~~

In ~~the second quarter of~~ 2017, we accrued for remaining costs to occupy the facility ~~until the~~through its lease ~~expires~~expiration in February 2018. ~~Our initial restructuring accrual recorded in~~The discontinued operation was deemed to be fully disposed of at December 29, 2017. Accordingly, there was no activity associated with the ~~second~~discontinued operation during the first quarter of ~~2016 assumed the ability to sublease the facility, which to‑date we have not been able to do. We do not anticipate any sublease of the facility at this time.~~2018.

The following table represents the carrying amounts of the major classes of assets and liabilities of ~~the Kingston, New York facility:~~our discontinued operation:

		June 30, 2017		December 30, 2016			December 29, 2017
Assets	Assets
Current assets:
Prepaid expenses and other current assets		$	35	$	99		$	3
Total current assets			35		99			3
Total assets		$	35	$	99		$	3
Liabilities	Liabilities					Liabilities
Current liabilities:
Accounts payable		$	110	$	152		$	136
Accrued liabilities			632		360			255
Other current liabilities			34		52			9
Total current liabilities			776		564			400
Deferred tax liabilities			30		30
Other long-term liabilities			—		9
Total liabilities		$	806	$	603		$	400

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30, 2017			June 24, 2016			June 30, 2017			June 24, 2016			March 31, 2017
Net sales	$	—		$	19,655		$	—		$	26,432
Cost of sales		—			20,670			—			27,928
Operating expenses:
Research and development		—			74			—			267
Selling, general, and administrative		610			1,216			721			2,266		$	111
Amortization of intangible assets		—			—			—			—
Total operating expenses		610			1,290			721			2,533			111
Operating loss		(610	)		(2,305	)		(721	)		(4,029	)		(111	)
Interest income, net		—			—			—			—
Other expense, net		—			—			—			—
Loss from discontinued operations before income taxes		(610	)		(2,305	)		(721	)		(4,029	)		(111	)
Income tax expense		—			2			1			3			1
Loss from discontinued operations	$	(610	)	$	(2,307	)	$	(722	)	$	(4,032	)	$	(112	)

Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. The Company recognizes in the consolidated financial statements the effectsAcquisition of all subsequent events that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing the financial statements. The Company's consolidated financial statements do not recognize subsequent events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after the balance sheet date and before financial statements are issued. In preparing these consolidated financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through August 11, 2017, the date the consolidated financial statements were issued.IAN Engineering

On ~~July 27, 2017,~~April 13, 2018, our subsidiary, Ichor ~~Holdings, LLC, a wholly‑owned subsidiary of the Company,~~Systems Korea, Ltd., entered into a stock purchase agreement ~~for the acquisition of Cal‑Weld, Inc. (“Cal‑Weld”)~~to acquire IAN Engineering Co., for $50,000, subject to customary adjustments. Ichor financed the acquisition with approximately $20,000 of cash on hand and $30,000 of incremental borrowing. Cal‑Weld is located in Tualatin, Oregon and Fremont, California and isLtd., a Seoul-based leader in ~~the~~providing locally-sourced design and ~~fabrication~~manufacturing of ~~precision, high purity and industrial components, sub-systems, and systems. In connection with the acquisition~~gas delivery systems to customers in South Korea, for a total of Cal‑Weld, the Company executed a Second Amendment to Credit Agreement (the “Amendment”) to amend the 2015 Credit Facility. The Amendment increased the Company’s term loan facility by $20,000, added an additional $20,000$8.0 million, which is inclusive of ~~borrowing capacity under its revolving credit facility, and reduced its borrowing rate.~~

~~On August 8, 2017 the Company’s principal shareholder completed the registration and sale of approximately 5.4~~$4.0 million ordinary shares, bringing its ownership from 48.1% to 26.4%. In connection with the sale, certain executives of the Company sold 76,308 ordinary shares and exercised stock options, resulting in the issuance of an additional 51,277 ordinary shares.

On August 8, 2017, we received a preliminary judgment from arbitration in our working capital claim with the sellers of Ajax. We are currently evaluating the results of the preliminary judgment and considering additional legal response. Once finalized we will record the difference between the final judgment and our preliminary assessment of the amount to be ~~returned~~paid if certain financial and operational milestones are achieved during the years ending December 31, 2018 and 2019. We expect the transaction to close by the ~~company as a current period charge to earnings. The ultimate amount recorded could increase~~end of our ~~payments related to the working capital acquired up to an additional amount which is currently expected not to exceed $1,100.~~second quarter 2018.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and related notes included elsewhere in this report. The following discussion contains forward‑looking statements based upon our current plans, expectations and beliefs that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward‑looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this report, particularly in “Risk Factors”.

We are a leader in the design, engineering and manufacturing of critical fluid delivery subsystems for semiconductor capital equipment. Our primary 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 electroplating and cleaning. We also manufacture certain components such as weldments and precision machined components for ~~internal~~ use in fluid delivery systems ~~and~~ for direct sales to our customers. This vertically integrated portion of our business is primarily focused on metal and plastic parts that are used in gas and chemical systems, respectively.

Fluid delivery subsystems ensure accurate measurement and uniform delivery of specialty gases and chemicals at critical steps in the semiconductor manufacturing process. Any malfunction or material degradation in fluid delivery reduces yields and increases the likelihood of manufacturing defects in these processes. Historically, semiconductor ~~original equipment manufacturers (“OEMs”)~~OEMs internally designed and manufactured the fluid delivery subsystems used in their process tools. Currently, most OEMs outsource the design, engineering and manufacturing of their gas delivery subsystems to a few specialized suppliers, including us. Additionally, many OEMs are also increasingly outsourcing the design, engineering and manufacturing of their chemical delivery subsystems due to the increased fluid expertise required to manufacture these subsystems. Outsourcing these subsystems has allowed OEMs to leverage the suppliers’ highly specialized engineering, design and production skills while focusing their internal resources on their own ~~value‑added~~value-added processes. We believe that this outsourcing trend has enabled OEMs to reduce their fixed costs and development time, as well as provided significant growth opportunities for specialized subsystems suppliers like us.

We have a global footprint with volume production facilities in ~~Malaysia, Singapore and~~Malaysia; Singapore; Tualatin, Oregon; Austin, Texas, Union City, ~~California. We completed our initial public offering (“IPO”) in December 2016.~~California; Fremont, California; and Sauk Rapids, Minnesota. In the ~~second~~first quarter of ~~2017~~2018 and ~~2016,~~2017, our two largest customers by sales were Lam Research and Applied Materials. During the ~~second~~first quarter of ~~2017~~2018 and ~~2016,~~2017, respectively, we generated sales of ~~$159.7~~$258.0 million and ~~$95.4~~$148.7 million, gross profit of ~~$23.5~~$42.6 million and ~~$15.2~~$24.0 million, net income from continuing operations of ~~$10.5~~$16.7 million and ~~$3.3~~$13.0 million, and adjusted net income from continuing operations of ~~$15.5~~$27.5 million and ~~$7.0~~$14.6 million. Adjusted net income from continuing operations is a financial measure that is not calculated in accordance with generally accepted accounting principles in the U.S. (“GAAP”). See “Non‑GAAP Results” for a discussion of adjusted net income from continuing operations, an accompanying presentation of the most directly comparable financial measure calculated in accordance with GAAP, net income from continuing operations, and a reconciliation of the differences between adjusted net income from continuing operations and net income from continuing operations.

The following table sets forth our unaudited results of operations for the periods presented. The period‑to‑period comparison of results is not necessarily indicative of results for future periods.

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30, 2017			June 24, 2016			June 30, 2017			June 24, 2016			March 30, 2018		March 31, 2017
	(in thousands)												(in thousands)
Consolidated Statements of Operations Data:
Sales	$	159,733		$	95,365		$	308,437		$	168,652		$	258,029	$	148,704
Cost of sales		136,227			80,185			260,916			141,547			215,430		124,689
Gross profit		23,506			15,180			47,521			27,105			42,599		24,015
Operating expenses:
Research and development		1,950			1,290			3,694			2,665			2,452		1,744
Selling, general and administrative		7,984			7,183			14,842			13,547
Selling, general, and administrative														15,711		6,858
Amortization of intangible assets		1,803			1,803			3,598			3,406			3,879		1,795
Total operating expenses		11,737			10,276			22,134			19,618			22,042		10,397
Operating income		11,769			4,904			25,387			7,487			20,557		13,618
Interest expense		675			1,160			1,365			2,062			2,504		690
Other expense (income), net		151			244			(398	)		(143	)		241		(549	)
Income from continuing operations before income taxes		10,943			3,500			24,420			5,568			17,812		13,477
Income tax expense from continuing operations		473			225			998			461			1,091		525
Net income from continuing operations		10,470			3,275			23,422			5,107			16,721		12,952
Discontinued operations:
Loss from discontinued operations before taxes		(610	)		(2,305	)		(721	)		(4,029	)		—		(111	)
Income tax expense from discontinued operations		—			2			1			3			—		1
Net loss from discontinued operations		(610	)		(2,307	)		(722	)		(4,032	)		—		(112	)
Net income	$	9,860		$	968		$	22,700		$	1,075		$	16,721	$	12,840

The following table sets forth our unaudited results of operations as a percentage of our total sales for the periods presented.

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30, 2017			June 24, 2016			June 30, 2017			June 24, 2016			March 30, 2018		March 31, 2017
	(in thousands)
Consolidated Statements of Operations Data:
Sales		100.0			100.0			100.0			100.0			100.0		100.0
Cost of sales		85.3			84.1			84.6			83.9			83.5		83.9
Gross profit		14.7			15.9			15.4			16.1			16.5		16.1
Operating expenses:
Research and development		1.2			1.4			1.2			1.6			1.0		1.2
Selling, general and administrative		5.0			7.5			4.8			8.0
Selling, general, and administrative														6.1		4.6
Amortization of intangible assets		1.1			1.9			1.2			2.0			1.5		1.2
Total operating expenses		7.3			10.8			7.2			11.6			8.5		7.0
Operating income		7.4			5.1			8.2			4.4			8.0		9.2
Interest expense		0.4			1.2			0.4			1.2			1.0		0.5
Other expense (income), net		0.1			0.3			(0.1	)		(0.1	)		0.1		(0.4	)
Income from continuing operations before income taxes		6.9			3.7			7.9			3.3			6.9		9.1
Income tax expense from continuing operations		0.3			0.2			0.3			0.3			0.4		0.4
Net income from continuing operations		6.6			3.4			7.6			3.0			6.5		8.7
Discontinued operations:
Loss from discontinued operations before taxes		(0.4	)		(2.4	)		(0.2	)		(2.4	)		0.0		(0.1	)
Income tax expense from discontinued operations		0.0			0.0			0.0			0.0			0.0		0.0
Net loss from discontinued operations		(0.4	)		(2.4	)		(0.2	)		(2.4	)		0.0		(0.1	)
Net income		6.2			1.0			7.4			0.6			6.5		8.6

Comparison of the Three ~~and Six~~ Months Ended ~~June~~March 30, ~~2017~~2018 and ~~June 24, 2016~~March 31, 2017

The increase in net sales from the ~~second~~first quarter of ~~2016~~2017 to the ~~second~~first quarter of ~~2017~~2018 was primarily related to an increase in ~~volume.~~volume resulting from industry growth, our acquisitions of Cal‑Weld and Talon in July 2017 and December 2017, respectively, and market share gains. The volume increase was due to an ~~approximate 4.2%, or approximately $11.5 million,~~ increase in wafer fabrication equipment production, which utilize our ~~market share at our two largest customers,~~gas and ~~an approximately $52.9~~fluid delivery systems. Cal‑Weld and Talon collectively contributed net sales of $57.4 million ~~increase in~~during the ~~volume~~first quarter of purchases primarily by our two largest customers driven by overall industry growth. We refer to the volume of purchases from us by a customer of ours relative to its other suppliers as our market share of that customer.2018. On a geographic basis, sales in the U.S. increased by ~~$18.3~~$84.1 million in the ~~second~~first quarter of ~~2017~~2018 to ~~$88.5~~$162.2 million. Foreign sales increased by ~~$26.5~~$25.2 million in the ~~second~~first quarter of ~~2017~~2018 to ~~$71.2 million.~~

The increase in sales from the six months ended June 24, 2016 to the six months ended June 30, 2017 was primarily related to an increase in volume. The volume increase was due to an approximate 4.9%, or approximately $27.5 million, increase in our market share at our two largest customers, and an approximately $104.9 million increase in the volume of purchases primarily by our two largest customers driven by overall industry growth. We refer to the volume of purchases from us by a customer of ours relative to its other suppliers as our market share of that customer. Ajax contributed and incremental $7.4 million during the six months ended June 30, 2017 as compared to the six months ended June 24, 2016. On a geographic basis, sales in the U.S. increased by $46.5 million in the six months ended June 30, 2017 to $166.6 million. Foreign sales increased by $66.8 million in the six months ended June 30, 2017 to $141.8$95.8 million.

	Three Months Ended						Change					Six Months Ended						Change					Three Months Ended						Change
	June 30, 2017			June 24, 2016			Amount		%			June 30, 2017			June 24, 2016			Amount		%			March 30, 2018			March 31, 2017			Amount		%
	(dollars in thousands)																						(dollars in thousands)
Cost of sales	$	136,227		$	80,185		$	56,042		69.9	%	$	260,916		$	141,547		$	119,369		84.3	%	$	215,430		$	124,689		$	90,741		72.8	%
Gross profit	$	23,506		$	15,180		$	8,326		54.8	%	$	47,521		$	27,105		$	20,416		75.3	%	$	42,599		$	24,015		$	18,584		77.4	%
Gross margin		14.7	%		15.9	%			- 120 bps				15.4	%		16.1	%			- 70 bps				16.5	%		16.1	%			+ 40 bps

The increase in cost of sales from the ~~second~~first quarter of ~~2016~~2018 to the ~~second~~first quarter of ~~2017 and from the six months ended June 24, 2016 to the six months ended June 30,~~ 2017 was primarily due to the increase in sales volume. The increase in absolute dollars of gross profit was driven primarily by an increase in sales volume.

Our gross margin for the first quarter of 2018 was favorably impacted from our acquisitions of Cal‑Weld and Talon, with margins that were accretive to our historical business. As part of our purchase price allocation for our acquisition of Talon, we recorded acquired inventory at fair value, resulting in a fair value step-up to acquired inventory of $6.2 million. In the ~~second~~first quarter of ~~2017~~2018, we ~~completed~~released the ~~re‑implementation~~remaining $4.5 million of ~~our Oracle system in our Singapore and Malaysia subsidiaries to allow for a systems based reporting of results from what had previously been a manual process. In~~ the process of performing the re‑implementation we identified that our previous method had resulted in an accumulated overstatement of inventory as of March 31, 2017 of approximately $1.75 million. In conjunction with the re‑implementation we have corrected this overstatement in the second quarter of 2017 with a chargefair value adjustment to cost of sales ~~of $1.75 million, which impacts both net income and earnings per share. We have evaluated~~as acquired inventory was sold during the inventory overstatement and determined that it accumulated over historical periods from when operations were first commenced in our foreign sites up to and including 2016. We have estimated that the overstatement was not material to any individual historical period and estimate that the impact to reported gross margins in 2014, 2015, and 2016 was 0 basis points, 10 basis points, and 10 basis points, respectively. Our estimate of the overstatement by period was $0.8 million prior to 2014, $0.1 million in 2014, $0.3 million in 2015, and $0.5 million in 2016.quarter. The impact of this charge accounts for a decrease to reported gross margin of ~~110 basis points and 60 basis points in the second quarter of 2017 and the six months ended June 30, 2017, respectively. The overstatement is not expected to recur in future quarters.~~

~~Additionally gross margin was impacted by approximately 60 basis points and 30~~180 basis points for the ~~second~~first quarter of 2017 and the six months ended June 30, 2017, respectively, as we outsourced certain components normally built internally as our capacity additions lagged the significant revenue increase, and we experienced labor inefficiencies due to uneven timing of receipt of these components in relation to our production schedule. We have brought our internal manufacturing capacity on‑line for these parts and do not expect significant outsourcing for the balance2018. As of the ~~year.~~end of the first quarter of 2018, this fair value adjustment has been fully released.

~~These reductions to gross margin percentage were partially offset by improved leverage of our fixed overhead costs on increased volume.~~

The increase in research and development expenses from the ~~second quarter of 2016 to the second~~first quarter of 2017 ~~and from the six months ended June 24, 2016~~ to the ~~six months ended June 30, 2017~~first quarter of 2018 was primarily due to our acquisition of Talon, increased share-based compensation expense, and an increase in headcount and consulting expense to support additional projects.

The increase in selling, general, and administrative ~~expenses~~expense from the ~~second~~first quarter of ~~2016~~2017 to the ~~second~~first quarter of ~~2017~~2018 was primarily due to ~~increased~~incremental operating expenses from our acquisitions of Cal‑Weld and Talon of $3.4 million, increased share-based compensation expense of $3.2 million, inclusive of $2.9 million in share-based compensation expense associated with modifying our former CFO’s outstanding equity awards, additional expense incurred from the ~~secondary offering~~separation of our ~~ordinary shares by Francisco Partners (“FP”)~~former CFO of $1.0 million, and ~~increased public company costs, offset in part by reductions in acquisition‑related expenses.~~

~~The increase in selling, general, and administrative expenses~~a recovery of fees from the six months ended June 24, 2016 to the six months ended June 30, 2017 was primarily due to increased employee‑related costs from incremental Ajax operating expenses and headcount to support increased sales volumes, increased expenses resulting from the secondary offering of our ordinary shares by Francisco Partners, and increased public company costs, offset in part by reductions in acquisition‑related expenses and reduced consulting fees paid to Francisco Partners Consulting ~~LLC~~ (“FPC”). of $0.3 million that occurred in the first quarter of 2017 that did not occur in the first quarter of 2018. The expenses incurred in connection with the resignation of our former CFO were due to separation benefits that became effective in January 2018.

Amortization expense ~~was unchanged~~increased from the ~~second quarter of 2016 to the second~~first quarter of 2017 ~~as there was no addition or disposal~~to the first quarter of ~~intangible assets during the period.~~

~~The increase in~~2018 due to incremental amortization expense from ~~the six months ended June 24, 2016 to the six months ended June 30, 2017 was due~~intangible assets acquired in connection with our acquisitions of Cal‑Weld and Talon.

The fair value assigned to intangible assets acquired in connection with our ~~acquisition~~acquisitions of ~~Ajax.~~Cal‑Weld and Talon is still preliminary. Amortization of intangible assets may change in future periods depending on the final fair value assigned to the acquired intangible assets.

The ~~decrease~~increase in interest expense ~~net~~ from the ~~second quarter of 2016 to the second~~first quarter of 2017 to the first quarter of 2018 was due to ~~a decrease~~an increase in the average amount borrowed ~~in 2017~~during the first quarter of 2018 as a result of ~~the pay down~~an additional $30.0 million and $120.0 million borrowed to fund our acquisitions of ~~debt in December 2016 using proceeds from our IPO~~Cal‑Weld and ~~a 10~~Talon, respectively, partially offset by an 80 basis point decrease in our average interest rate during the ~~second~~first quarter of ~~2017~~2018 compared to the ~~second~~first quarter of ~~2016.~~

The decrease in interest expense, net from the six months ended June 24, 2016 to the six months ended June 30, 2017 was due to a decrease in the average amount borrowed in 2017 as a result of the pay down of debt in December 2016 using proceeds from our IPO, partially offset by 20 basis point increase our average interest rate during the six months ended June 30, 2017 compared to the six months ended June 24, 2016.2017.

Total borrowings outstanding at ~~June~~March 30, ~~2017,~~2018, net of debt issuance costs, ~~was $38.2~~were $187.6 million, compared to ~~$78.6~~$38.1 million at ~~June 24, 2016.~~March 31, 2017.

The change in other expense (income), net from the ~~second~~first quarter of ~~2016~~2017 to the ~~second~~first quarter of ~~2017~~2018 was primarily due to exchange rate fluctuations on transactions denominated in the local currencies of our foreign operations, principally the Singapore Dollar, Malaysian Ringgit, and British Pound.

~~The increase in other income, net from~~ Additionally, the ~~six months ended June 24, 2016 to the six months ended June 30,~~first quarter of 2017 ~~was primarily due to~~included a gain on the sale of our cost method investment, CHawk Technology International, Inc. (“CHawk”) of $0.2 million that ~~occurred~~did not repeat in the first quarter of ~~2017.~~2018.

The increase in the income tax expense from continuing operations from the ~~second quarter of 2016 to the second~~first quarter of 2017 ~~and from the six months ended June 24, 2016~~ to the ~~six months ended June 30, 2017~~first quarter of 2018 was primarily due to ~~increased withholdings taxes on intercompany notes between~~a valuation allowance against our U.S. ~~and foreign~~deferred tax ~~jurisdictions.~~assets in 2017, but not in 2018, partially offset by excess tax benefits from share-based compensation.

Management uses ~~non‑GAAP~~non-GAAP adjusted net income from continuing operations to evaluate ~~our~~Ichor’s operating and financial results. ~~We believe~~Ichor believes the presentation of ~~non‑GAAP~~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~~Ichor’s results from management’s perspective. ~~Non‑GAAP~~Non-GAAP adjusted net income from continuing operations is defined as: (1) net income from continuing operations; (2) excluding amortization of intangible assets, share-based compensation expense, non-recurring expenses including adjustments to the cost of goods sold and ~~other non-recurring expenses;~~a loss on the Ajax acquisition arbitration settlement, and the tax adjustments related to those ~~non‑GAAP~~non-GAAP adjustments; and (3) non-recurring discrete tax items including tax benefits from acquisitions, the tax benefit ~~associated with~~from re-characterizing intercompany debt to equity, and the ~~acquisition~~tax impact from enactment of ~~Ajax; and certain other non‑recurring charges. Non‑GAAP~~the Tax Act. Non-GAAP adjusted diluted EPS is defined as ~~non‑GAAP~~non-GAAP adjusted net income from continuing operations divided by ~~adjusted~~weighted average diluted ordinary shares ~~which assumes~~outstanding during the ~~IPO shares sold, the conversion of preferred shares into ordinary shares, and vesting of restricted shares and options in connection with the IPO occurred at the beginning of the measurement~~ period.

The following table presents our unaudited non‑GAAP adjusted net income from continuing operations and a reconciliation from net income from continuing operations, the most comparable GAAP measure, for the periods indicated:

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30, 2017			June 24, 2016			June 30, 2017			June 24, 2016			March 30, 2018			March 31, 2017
	(in thousands, except share and per share amounts)												(dollars in thousands, except per share amounts)
Non-GAAP Data:
Net income from continuing operations	$	10,470		$	3,275		$	23,422		$	5,107		$	16,721		$	12,952
Non-GAAP adjustments:
Amortization of intangible assets		1,803			1,803			3,598			3,406			3,879			1,795
Share-based compensation(1)		569			555			913			972			3,791			344
Other non-recurring expenses (1)		952			1,342			452			2,055
Other non-recurring expense (income), net (2)														1,439			(500	)
Tax adjustments related to non-GAAP adjustments ~~(2)~~		(18	)		(19	)		(42	)		(39	)		(2,904	)		(24	)
Tax benefit related to Ajax acquisition		—			—			—			—
Adjustments to cost of goods sold (3)		1,752			—			1,752			—
Fair value adjustment to inventory from acquisitions (3)														4,524			—
Non-GAAP adjusted net income from continuing operations	$	15,528		$	6,956		$	30,095		$	11,501		$	27,450		$	14,567
Non-GAAP adjusted diluted EPS (4)	$	0.60		$	0.29		$	1.16		$	0.48
Shares used to compute diluted EPS (5)		26,063,527			24,029,793			25,868,403			24,037,305
Non-GAAP adjusted diluted EPS													$	1.03		$	0.57
Shares used to compute diluted EPS														26,734,710			25,640,089

Included in this amount for the first quarter of 2017 are (i) a refund from FPC and (ii) a gain on sale of our investment in CHawk.

Non‑GAAP adjusted net income from continuing operations has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for net income or any of our other operating results reported under GAAP. Other companies may calculate adjusted net income differently or may use other measures to evaluate their performance, both of which could reduce the usefulness of our adjusted net income as a tool for comparison.

Because of these limitations, you should consider non‑GAAP adjusted net income from continuing operations alongside other financial performance measures, including net income from continuing operations and other financial results presented in accordance with GAAP. In addition, in evaluating non‑GAAP adjusted net income, you should be aware that in the future we will incur expenses such as those that are the subject of adjustments in deriving adjusted net income and you should not infer from our presentation of adjusted net income that our future results will not be affected by these expenses or any unusual or non‑recurring items.

We had cash ~~and restricted cash~~ of ~~$66.8~~$63.8 million as of ~~June~~March 30, ~~2017.~~2018. Our principal uses of liquidity are to fund our working capital needs and purchase new capital equipment. The ~~increase~~net decrease in cash of $5.5 million during the first quarter of 2018 was primarily due to ~~$7.5~~capital expenditures of $3.7 million, of net cash provided by operating activities, $7.3 million of proceeds from the exercise of the underwriters’ over‑allotment option in January 2017 in connection with our IPO, and $2.2 million of proceeds from the exercise of stock options by certain employees of the Company, partially offset by net cash used in ~~investing~~financing activities of ~~$2.8~~$1.1 million, and net cash used in operating activities of $0.8 million.

We believe that our cash, the amounts available under our revolving credit facility, and our cash flows from operations ~~together with the net proceeds from our IPO,~~ will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for at least the next 12 months.

We ~~generated $7.5~~used $0.8 million of cash ~~from~~in operating activities during the ~~six months ended June 30, 2017~~first quarter of 2018 due to ~~net income of $22.7 million and non‑cash charges of $5.9 million, partially offset by~~ a net increase of ~~$21.1~~$27.3 million in our net operating assets and ~~liabilities.~~liabilities, partially offset by net income of $16.7 million and net non‑cash charges of $9.7 million. Non‑cash charges primarily consist of ~~$5.2~~$5.8 million in depreciation and amortization ~~$0.9~~and $3.8 million in ~~share‑based~~share-based compensation ~~and amortization of debt issuance costs of $0.3 million, partially offset by deferred taxes of $0.2 million and a gain on the sale of our investment in CHawk of $0.2 million.~~expense. The increase in net operating assets and liabilities was primarily due to an increase in accounts receivable of ~~$13.4~~$26.4 million, ~~resulting from~~due to increased sales volume and timing of shipments and customer payments during the ~~period,~~quarter, and an increase in inventories of ~~$26.1~~$10.5 million, ~~resulting from~~due to increased materials purchases to support ~~increased demand. This increase was primarily~~demand, partially offset by an increase ~~of $13.6 million~~ in accounts payable ~~resulting from increased inventory purchases.~~of $8.7 million.

Cash used in investing activities during the ~~six months ended June 30, 2017~~first quarter of 2018 of $3.7 million was ~~$2.8~~from capital expenditures to support current and future growth.

Net cash used in financing activities was $1.1 million due to ~~$5.2~~share repurchases of $5.0 million and debt issuance costs of $2.1 million in ~~capital expenditures,~~connection with the refinancing of our credit facilities in February 2018, partially offset by ~~$2.4~~$3.4 million in proceeds ~~from the sale~~related to issuances of ordinary shares under our ~~investments in Ajax Foresight Global Manufacturing Sdn. Bhd. (“AFGM”)~~share-based compensation plans and ~~CHawk and the settlement of our note receivable from AFGM.~~

~~We generated $9.5~~$2.6 million in ~~cash from financing activities during the six months ended June 30, 2017, which consists $7.3 million~~net borrowing of ~~net proceeds from the exercise of the underwriters’ over‑allotment option in January 2017~~long-term debt in connection with ~~our IPO and $2.2 million of proceeds from~~ the ~~exercise of stock options by certain employees of the Company.~~refinancing.

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate our judgments and estimates including those related to revenue recognition, impairment of goodwill and intangible assets, income taxes, advertising expense and share‑based compensation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

The accounting policies we believe to be most critical to understanding our financial results and condition and that require complex and subjective management judgments and estimates are identified and described in our annual consolidated financial statements and the notes included in our Annual Report on Form 10‑K for the year ended December ~~30, 2016~~29, 2017 (our “Annual Report”).

ITEM 3. QUANTITATIVE AND ~~QUALITATI~~VEQUALITATIVE DISCLOSURES ABOUT MARKET RISK

Currently, substantially all of our sales and arrangements with third‑party suppliers provide for pricing and payment in U.S. dollars and, therefore, are not subject to material exchange rate fluctuations. As a result, we do not expect foreign currency exchange rate fluctuations to have a material effect on our results of operations. However, increases in the value of the U.S. dollar relative to other currencies would make our products more expensive relative to competing products priced in such other currencies, which could negatively impact our ability to compete. Conversely, decreases in the value of the U.S. dollar relative to other currencies could result in our foreign suppliers raising their prices in order to continue doing business with us.

While not currently significant, we do have certain operating expenses that are denominated in currencies of the countries in which our operations are located, and may be subject to fluctuations due to foreign currency exchange rates, particularly the Singapore dollar, Malaysian Ringgit, British Pound, and Euro. Fluctuations in foreign currency exchange rates may cause us to recognize transaction gains and losses in our statement of operations. To date, foreign currency transaction gains and losses have not been material to our financial statements, and we have not engaged in any foreign currency hedging transactions.

We had total outstanding debt of ~~$39.8~~$192.2 million as of ~~June~~March 30, ~~2017, no portion~~2018, exclusive of debt issuance costs, of which $6.6 million was due within 12 months. The outstanding amount of debt reflected in our consolidated financial statements included elsewhere in this report is net of ~~$1.6~~$4.6 million of debt issuance costs as of ~~June~~March 30, ~~2017.~~2018.

We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure. We have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates. The interest rate on ~~a significant majority of~~ our outstanding debt is variable ~~which also reduces our exposure to these~~based on LIBOR, the Prime Rate, or the Federal Funds Rate. A hypothetical 1% change in the interest rate ~~risks. A hypothetical 10% change in interest rates during any of the periods presented would not have had a material impact~~ on our ~~financial statements.~~outstanding debt would have resulted in a $0.5 million change to interest expense during the first quarter of 2018, or $1.9 million on an annualized basis.

As required by Rule ~~13a‑~~13a‑15(b) under the Exchange Act, we carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer ~~or CEO,~~ and Chief Financial Officer, ~~or CFO,~~ of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules ~~13a‑~~13a‑15(e) and ~~15d‑~~15d‑15(e) under the Exchange Act) as of the end of the period covered by this report. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. We evaluated the effectiveness of our disclosure controls and procedures as of March 30, 2018, with the participation of our CEO and CFO. Based ~~upon that~~on this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were ~~not~~ effective ~~because~~as of the material weakness in our internal control described below, and did not provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.March 30, 2018.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, a company’s principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate. If we cannot provide reliable financial information, our business, operating results and share price could be negatively impacted.

~~During~~In connection with the ~~second quarter~~adoption of ~~2017,~~new revenue recognition accounting standards, as codified in ASC Topic 606, we ~~identified a material weakness in~~implemented certain internal controls to ensure we adequately evaluated our contracts with our customers and properly assessed the impact of the new revenue recognition accounting standards on our financial statements to facilitate its adoption at the beginning of our first fiscal 2018 quarter. There were no significant changes to our internal control over financial reporting related to ineffective periodic risk assessment over control activities that ensure the ending inventory balances of our Malaysia and Singapore subsidiaries were recorded at the appropriate U.S. Dollar functional currency rate. During our previous consolidation process, we had a manual process that translated these inventory balances into the U.S. Dollar functional currency at incorrect rates for these subsidiaries due to ~~system limitations, and we did not implement a control to reconcile~~ the ending inventory balance at our Malaysia and Singapore subsidiaries to the final inventory balance reported in our consolidated financial statements. This material weakness resulted in an accumulated overstatementadoption of inventory as of March 31, 2017 of approximately $1.75 million. We have completed the re‑implementation of our Oracle system, which allows for a systems‑based calculation of inventory purchases and ending inventory at the proper U.S. Dollar functional currency rates, and we have implemented a control to reconcile the final Malaysia and Singapore inventory sub‑ledger balances to the final balances recorded in consolidation. While we believe that the new system will correctly record inventory purchases and that our newly implemented reconciliation control will operate at a sufficient level of precision to identify any significant errors, management will continue to monitor the mitigation measures taken as the controls will need to operate for a reasonable period of time to determine whether they are operating effectively to remediate the material weakness.accounting standards.

For a discussion of legal proceedings, see ~~“Note~~“Note 6 – Commitments and Contingencies” in the Notes to Financial Statements (Unaudited) included in this report.

~~The risks described in Part I, Item 1A, "Risk Factors,"~~There have been no material changes in our ~~2016 Annual Report and~~risk factors from those disclosed in our 2017 ~~Quarterly Report for the quarter ended March 31, 2017~~Annual Report. These risk factors could materially and adversely affect our business, financial condition and results of operations, and the trading price of our ordinary shares could decline. These risk factors do not identify all risks that we face – our operations could also be affected by factors that are not presently known to us or that we currently consider to be immaterial to our operations. Due to risks and uncertainties, known and unknown, our past financial results may not be a reliable indicator of future performance and historical trends should not be used to anticipate results or trends in future periods. ~~Below we describe additional risks that supplement the risks described in our 2016 Annual Report and our 2017 Quarterly Report for the quarter ended March 31, 2017.~~

In the second quarter of 2017, we identified a material weaknesses in our internal control over financial reporting and may identify additional material weaknesses in the future that may cause us to fail to meet our reporting obligations or result in material misstatements of our financial statements. If our internal control over financial reporting or our disclosure controls and procedures are not effective, we may not be able to accurately report our financial results, prevent fraud or file our periodic reports in a timely manner, which may cause investors to lose confidence in our reported financial information and may lead to a decline in our share price.

During the second quarter of 2017, we identified a material weakness in our internal control over financial reporting related to ineffective periodic risk assessment over control activities that ensure the ending inventory balances of our Malaysia and Singapore subsidiaries were recorded at the appropriate U.S. Dollar functional currency rate. During our previous consolidation process, we had a manual process that translated these inventory balances into the U.S. Dollar functional currency at incorrect rates for these subsidiaries due to system limitations, and we did not implement a control to reconcile the ending inventory balance at our Malaysia and Singapore subsidiaries to the final inventory balance reported in our consolidated financial statements. This material weakness resulted in an accumulated overstatement of inventory as of March 31, 2017 of approximately $1.75 million. We have completed the re‑implementation of our Oracle system, which allows for a systems‑based calculation of inventory purchases and ending inventory at the proper U.S. Dollar functional currency rates, and we have implemented a control to reconcile the final Malaysia and Singapore inventory sub‑ledger balances to the final balances recorded in consolidation. While we believe that the new system will correctly record inventory purchases and that our newly implemented reconciliation control will operate at a sufficient level of precision to identify any significant errors, management will continue to monitor the mitigation measures taken as the controls will need to operate for a reasonable period of time to determine whether they are operating effectively to remediate the material weakness.

If our internal control over financial reporting or our disclosure controls and procedures are not effective, we may not be able to accurately report our financial results, prevent fraud or file our periodic reports in a timely manner, which may cause investors to lose confidence in our reported financial information and may lead to a decline in our stock price.

ITEM 2. ~~UNREGISTERED~~UNREGISTERED SALES OF ~~EQUI~~TYEQUITY SECURITIES AND USE OF PROCEEDS

~~On December 8, 2016, in connection with~~ our ~~IPO, we registered under the Securities Act (i) 6,759,445~~ ordinary shares ~~including~~during the underwriters’ over-allotment option, pursuant to a registration statement on Form S‑1 (File No. 333-214588) and (ii) 146,945 ordinary shares pursuant to a registration statement on Form S‑1 (File No. 333-214995). We completed our IPO on December 14, 2016 at a price to the public of $9.00 per share, for gross proceeds of approximately $52.9 million.three months ended March 30, 2018 is as follows:

We received net proceeds of approximately $47.1 million (after underwriters’ discounts and commissions of $3.7 million and additional offering related costs of approximately $2.1 million). The joint lead bookrunners of the offering were Deutsche Bank Securities Inc. and Stifel, Nicolaus & Company, Incorporated. In January 2017, the underwriters exercised their over-allotment option to purchase an additional 881,667 ordinary shares at a price of $9.00 per share, providing us with additional gross proceeds of approximately $7.9 million and net proceeds of approximately $7.3 million, after deducting underwriting discounts, commissions and other offering related costs.

There was no material change in the use of proceeds from our initial public offering as described in our prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act on December 12, 2016.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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)

Large accelerated filer	☐	Accelerated filer	☐

Non‑accelerated filer	☒ (Do not check if a small reporting company)	Small reporting company	☐

PART I
ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED)	1
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	1314
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	20
ITEM 4.	CONTROLS AND PROCEDURES	20

PART II
ITEM 1.	LEGAL PROCEEDINGS	21
ITEM 1A.	RISK FACTORS	21
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	2221
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	2221
ITEM 4.	MINE SAFETY DISCLOSURES	22
ITEM 5.	OTHER INFORMATION	22
ITEM 6.	EXHIBITS	22

SIGNATURES		23

	June 30, 2017			December 30, 2016
Raw materials	$	73,864		$	46,889
Work in process		24,767			22,649
Finished goods		6,910			9,423
Excess and obsolete adjustment		(8,546	)		(8,080	)
	$	96,995		$	70,881

	March 30, 2018			December 29, 2017
Raw materials	$	101,353		$	91,109
Work in process		45,822			42,186
Finished goods		24,050			27,268
Excess and obsolete adjustment		(6,602	)		(6,022	)
Total inventories, net	$	164,623		$	154,541

	June 30, 2017			December 30, 2016
Term loan facility	$	39,830		$	39,830
Less unamortized debt issuance costs		(1,622	)		(1,886	)
Total long-term debt		38,208			37,944
Less current portion		—			—
Total long-term debt, net of current portion	$	38,208		$	37,944

	March 30, 2018			December 29, 2017
Term loan	$	175,000		$	179,535
Revolving credit facility		17,162			10,000
Total principal amount of long-term debt		192,162			189,535
Less unamortized debt issuance costs		(4,557	)		(2,798	)
Total long-term debt, net		187,605			186,737
Less current portion		(6,563	)		(6,490	)
Total long-term debt, less current portion, net	$	181,042		$	180,247

	Number of Restricted Ordinary Shares
	Time vesting			Weighted average grant date fair value
Unvested, December 29, 2017		153,281		$	17.53
Granted		92,100		$	24.95
Vested		(50,423	)	$	12.16
Forfeited		—		$	—
Unvested, March 30, 2018		194,958		$	22.43

	Number of Restricted Ordinary Shares
	Time vesting			Weighted average grant date fair value
Unvested, December 30, 2016		103,055		$	8.39
Granted		70,100		$	17.14
Vested		(52,443	)	$	8.48
Forfeited		—		$	—
Unvested, June 30, 2017		120,712		$	13.43

	Total Number of Shares Repurchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program		Amount Available Under Repurchase Program (1)
	(dollars in thousands, except share and per share amounts)
February 1, 2018 through February 28, 2018		—	$	—		—	$	50,000
March 1, 2018 through March 30, 2018		195,750	$	25.51		195,750	$	45,000
Total		195,750	$	25.51		195,750	$	45,000


Exhibit Number		Description

10.1		~~Transition~~Amended and Restated Credit Agreement, dated as of ~~June 29, 2017, between~~February 14, 2018, by and among Ichor Holdings, LLC, Ichor Systems, Inc., Precision Flow Technologies, Inc., Ajax-United Patterns & Molds, Inc., Cal-Weld, Inc., Talon Innovations Corporation, and ~~Maurice Carson~~Talon Innovations (FL) Corporation as borrowers, Bank of America, N.A., as administrative agent, and the financial institutions party thereto, as lenders (Incorporated by reference to Exhibit 10.1 to Ichor Holdings, ~~Ltd’s~~Ltd.’s Current Report on Form 8‑K, filed with the Securities and Exchange Commission on ~~June 29, 2017)~~February 15, 2018).
31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a‑14(a) and 15d‑14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002.
31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a‑14(a) and 15d‑14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002.
32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002.
32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002.
101.INS*		XBRL Instance Document
101.SCH*		XBRL Taxonomy Extension Schema Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

	ICHOR HOLDINGS, LTD.

Date: ~~August 11, 2017~~May 8, 2018	By:	/s/ Thomas M. Rohrs
		Thomas M. Rohrs
		Executive Chairman, Director and Chief Executive Officer (Principal Executive Officer)

Date: ~~August 11, 2017~~May 8, 2018	By:	/s/ ~~Maurice Carson~~Jeffrey S. Andreson
		~~Maurice Carson~~Jeffrey S. Andreson
		~~Director, President and~~ Chief Financial Officer (Principal Accounting and Financial Officer)