Press Release Details


Entegris Reports Results for Third Quarter of 2019

Oct 24, 2019 at 6:00 AM EDT
  • Third-quarter revenue of $394.1 million, decreased 1% from prior year
  • GAAP net income per diluted share of $0.30, decreased 12% from prior year
  • Non-GAAP net income per diluted share of $0.50, increased 9% from prior year
  • Acquired Hangzhou Anow Microfiltration in September

BILLERICA, Mass.--(BUSINESS WIRE)--Oct. 24, 2019-- Entegris, Inc. (NasdaqGS: ENTG), a leader in specialty chemicals and advanced materials solutions for the microelectronics industry, today reported its financial results for the Company’s third quarter ended September 28, 2019.

Third-quarter sales were $394.1 million, a decrease of 1% from the same quarter last year. GAAP third-quarter net income was $40.8 million, or $0.30 per diluted share, which included $15.2 million of amortization of intangible assets, $8.5 million of restructuring costs, $2.4 million of integration costs, $4.9 million in deal costs mainly associated with the MPD and Anow acquisitions and a $4.5 million charge for fair value write-up of acquired inventory sold. Non-GAAP net income was $68.2 million and non-GAAP net income per diluted share was $0.50.

Bertrand Loy, President and Chief Executive Officer, said: "In the third quarter, we delivered solid results that showcased the resilience of our unit-driven business model and the strong execution of our teams. While end markets continue to be uneven, we experienced accelerated demand for our advanced solutions in new technology nodes. Another highlight of the quarter was our acquisition of Hangzhou Anow, which broadens our filtration offerings and provides us with manufacturing capabilities in China.”

Mr. Loy added: “Going forward, greater materials intensity and greater materials purity will continue to be the two defining factors of the next generation of semiconductor performance. Entegris has never been better positioned and more relevant for our customers, to help them achieve the targeted levels of chip performance, yields and reliability. We feel confident in our positive business momentum going into the fourth quarter and we expect 2019 to be a record year for Entegris."

Quarterly Financial Results Summary
(in thousands, except per share data)

 

GAAP Results

Q3 2019

Q3 2018

Q2 2019

Net sales

$394,147

$398,597

$378,874

Operating income

$52,793

$67,975

$54,909

Operating margin

13.4

%

17.1

%

14.5

%

Net income

$40,767

$48,060

$123,997

Diluted earnings per share (EPS)

$0.30

$0.34

$0.91

Non-GAAP Results

Non-GAAP adjusted operating income

$88,220

$93,893

$76,793

Non-GAAP adjusted operating margin

22.4

%

23.6

%

20.3

%

Non-GAAP net income

$68,179

$65,621

$53,432

Non-GAAP EPS 

$0.50

$0.46

$0.39

Fourth-Quarter Outlook

For the fourth quarter ending December 31, 2019, the Company expects sales of $420 million to $435 million, net income of $51 million to $58 million and net income per diluted share between $0.38 and $0.43. On a non-GAAP basis, EPS is expected to range from $0.51 to $0.56 per diluted share, which reflects net income on a non-GAAP basis in the range of $69 million to $76 million.

Segment Results

The Company reports its results in the following segments:

Specialty Chemicals and Engineered Materials (SCEM): SCEM provides high-performance and high-purity process chemistries, gases and materials, as well as safe and efficient delivery systems to support semiconductor and other advanced manufacturing processes.

Microcontamination Control (MC): MC solutions purify critical liquid chemistries and gases used in semiconductor manufacturing processes and other high-technology industries.

Advanced Materials Handling (AMH): AMH develops solutions to monitor, protect, transport, and deliver critical liquid chemistries, wafers, and substrates for a broad set of applications in the semiconductor industry and other high-technology industries.

Change in Inter-Segment Reporting

In the first quarter of 2019, the Company changed its definition of segment profit to include inter-segment sales. The Company updated its recognition of inter-segment sales to recognize the revenue and profit associated with products and components produced in one segment and supplied to another, before being sold to the ultimate end customer. The Company accounts for inter-segment sales and transfers as if the sales or transfers were to third parties, that is, at approximate market prices. Prior quarter information has been recast to reflect the change in the Company’s definition of segment profit.

Third-Quarter Results Conference Call Details

Entegris will hold a conference call to discuss its results for the third quarter on Thursday, October 24, 2019, at 9:30 a.m. Eastern Time. Participants should dial 888-204-4368 or +1 323-794-2423, referencing confirmation code 9122198. Participants are asked to dial in 5 to 10 minutes prior to the start of the call. For a replay of the call, please Click Here using passcode 9122198. The replay will be available starting at 12:00 p.m. ET on Thursday, October 24 through December 7, 2019 at 12:00 p.m. ET.

The call can also be accessed live and on-demand from the Entegris website. Point your web browser to http://investor.entegris.com/events.cfm and follow the link to the webcast. The on-demand playback will be available for six weeks after the conclusion of the teleconference.

Management’s slide presentation concerning the results for the third quarter, which may be referred to during the call, will be posted on the investor relations section of www.entegris.com Thursday morning before the call.

ABOUT ENTEGRIS
Entegris is a leader in specialty chemicals and advanced materials solutions for the microelectronics industry and other high-tech industries. Entegris is ISO 9001 certified and has manufacturing, customer service and/or research facilities in the United States, Canada, China, France, Germany, Israel, Japan, Malaysia, Singapore, South Korea and Taiwan. Additional information can be found at www.entegris.com.

Non-GAAP Information
The Company’s condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (GAAP). Adjusted EBITDA, Adjusted Gross Profit, Adjusted Segment Profit, and Adjusted Operating Income, together with related measures thereof, and non-GAAP net income and non-GAAP EPS, are considered “Non-GAAP financial measures” under the rules and regulations of the Securities and Exchange Commission. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The Company uses these non-GAAP financial measures for financial and operational decision-making, as a means to evaluate period-to-period comparisons, as well as comparisons to the Company’s competitors' operating results. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding the Company’s performance and liquidity by excluding certain items that may not be indicative of the Company’s recurring business operating results, such as amortization, depreciation and discrete cash charges that may vary significantly from period to period. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing and understanding the Company’s results and performance and when planning, forecasting, and analyzing future periods. The Company believes these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by the Company’s institutional investors and the analyst community to help them analyze the Company’s business. The reconciliations of GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA, GAAP Net Income and Earnings per Share to Non-GAAP Net Income and Earnings per Share, GAAP Gross Profit to Adjusted Gross Profit and GAAP Segment Profit to Adjusted Operating Income are included elsewhere in this release.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “should,” “may,” “will,” “would” or the negative thereof and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include statements related to future period guidance; future sales, net income, net income per diluted share, non-GAAP EPS, non-GAAP net income, expenses and other financial metrics; the Company’s performance relative to its markets; the impact, financial or otherwise, of any organizational changes; market and technology trends; the development of new products and the success of their introductions; the Company's capital allocation strategy, which may be modified at any time for any reason, including share repurchases, dividends, debt repayments and potential acquisitions; the effect of the Tax Cuts and Jobs Act on the Company’s capital allocation strategy; the impact of the acquisitions the Company has made and commercial partnerships the Company has established; the Company’s ability to execute on its strategies; and other matters. These statements involve risks and uncertainties, and actual results may differ materially from those projected in the forward-looking statements. These risks and uncertainties include, but are not limited to, weakening of global and/or regional economic conditions, generally or specifically in the semiconductor industry, which could decrease the demand for the Company’s products and solutions; the Company’s ability to meet rapid demand shifts; the Company’s ability to continue technological innovation and introduce new products to meet customers' rapidly changing requirements; the Company’s concentrated customer base; the Company’s ability to identify, effect and integrate acquisitions, joint ventures or other transactions; the Company’s ability to effectively implement any organizational changes; the Company’s ability to protect and enforce intellectual property rights; operational, political and legal risks of the Company’s international operations; the Company’s dependence on sole source and limited source suppliers; the increasing complexity of certain manufacturing processes; raw material shortages, supply constraints and price increases; changes in government regulations of the countries in which the Company operates; fluctuation of currency exchange rates; fluctuations in the market price of the Company’s stock; the level of, and obligations associated with, the Company’s indebtedness; and other risk factors and additional information described in the Company’s filings with the Securities and Exchange Commission, including under the heading “Risks Factors" in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed on February 11, 2019, and in the Company’s other periodic filings. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)

 

 

Three months ended

 

 

September 28, 2019

September 29, 2018

June 29, 2019

Net sales

$

394,147

 

$

398,597

 

$

378,874

 

Cost of sales

223,797

 

216,881

 

212,600

 

 

Gross profit

170,350

 

181,716

 

166,274

 

Selling, general and administrative expenses

71,232

 

62,358

 

64,150

 

Engineering, research and development expenses

31,173

 

29,964

 

30,624

 

Amortization of intangible assets

15,152

 

21,419

 

16,591

 

 

Operating income

52,793

 

67,975

 

54,909

 

Interest expense, net

10,216

 

7,678

 

9,692

 

Other expense (income), net

934

 

810

 

(122,015

)

 

Income before income tax expense

41,643

 

59,487

 

167,232

 

Income tax expense

876

 

11,427

 

43,235

 

 

Net income

$

40,767

 

$

48,060

 

$

123,997

 

 

 

 

 

 

 

 

 

Basic net income per common share:

$

0.30

 

$

0.34

 

$

0.92

 

Diluted net income per common share:

$

0.30

 

$

0.34

 

$

0.91

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

Basic

135,092

 

141,556

 

135,378

 

 

Diluted

136,530

 

143,033

 

136,581

 

Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)

 

 

Nine months ended

 

 

September 28, 2019

September 29, 2018

Net sales

$

1,164,068

 

$

1,148,855

 

Cost of sales

650,051

 

608,764

 

 

Gross profit

514,017

 

540,091

 

Selling, general and administrative expenses

217,636

 

185,827

 

Engineering, research and development expenses

90,788

 

87,781

 

Amortization of intangible assets

50,400

 

45,102

 

 

Operating income

155,193

 

221,381

 

Interest expense, net

29,567

 

21,829

 

Other (income) expense, net

(121,329

)

4,826

 

 

Income before income tax expense

246,955

 

194,726

 

Income tax expense

49,533

 

34,755

 

 

Net income

$

197,422

 

$

159,971

 

 

 

 

 

 

 

Basic net income per common share:

$

1.46

 

$

1.13

 

Diluted net income per common share:

$

1.45

 

$

1.12

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

Basic

135,256

 

141,613

 

 

Diluted

136,601

 

143,308

 

Entegris, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)

 

September 28, 2019

December 31, 2018

ASSETS

 

 

Cash and cash equivalents

$

282,748

 

$

482,062

 

Trade accounts and notes receivable, net

261,306

 

222,055

 

Inventories, net

290,270

 

268,140

 

Deferred tax charges and refundable income taxes

21,825

 

17,393

 

Other current assets

28,091

 

39,688

 

Total current assets

884,240

 

1,029,338

 

 

 

 

Property, plant and equipment, net

470,005

 

419,529

 

 

 

 

Right-of-use assets

48,684

 

 

Goodwill

659,840

 

550,202

 

Intangible assets

367,558

 

295,687

 

Deferred tax assets and other noncurrent tax assets

23,191

 

10,162

 

Other

14,166

 

12,723

 

Total assets

$

2,467,684

 

$

2,317,641

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

Long-term debt, current maturities

4,000

 

4,000

 

Accounts payable

73,071

 

93,055

 

Accrued liabilities

133,174

 

141,020

 

Income tax payable

2,835

 

31,593

 

Total current liabilities

213,080

 

269,668

 

 

 

 

Long-term debt, excluding current maturities

934,080

 

934,863

 

Long-term lease liability

44,375

 

 

Other liabilities

156,232

 

101,085

 

Shareholders’ equity

1,119,917

 

1,012,025

 

Total liabilities and shareholders’ equity

$

2,467,684

 

$

2,317,641

 

Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

 

Three months ended

Nine months ended

 

September 28,
2019

September 29,
2018

September 28,
2019

September 29,
2018

Operating activities:

 

 

 

 

Net income

$

40,767

 

$

48,060

 

$

197,422

 

$

159,971

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation

19,306

 

16,537

 

54,623

 

48,236

 

Amortization

15,152

 

21,419

 

50,400

 

45,102

 

Stock-based compensation expense

5,326

 

4,170

 

14,915

 

12,727

 

Other

5,988

 

6,635

 

12,128

 

9,518

 

Changes in operating assets and liabilities:

 

 

 

 

Trade accounts and notes receivable

(35,841

)

(11,400

)

(30,405

)

(8,713

)

Inventories

(9,398

)

(6,316

)

(5,689

)

(28,788

)

Accounts payable and accrued liabilities

20,796

 

5,526

 

(31,911

)

(9,440

)

Income taxes payable and refundable income taxes

(35,965

)

(1,678

)

(20,574

)

(9,193

)

Other

(840

)

1,190

 

12,745

 

1,829

 

Net cash provided by operating activities

25,291

 

84,143

 

253,654

 

221,249

 

Investing activities:

 

 

 

 

Acquisition of property and equipment

(26,322

)

(27,900

)

(86,423

)

(75,337

)

Acquisition of businesses, net of cash acquired

(217,106

)

(43

)

(266,373

)

(380,268

)

Other

2,618

 

3,109

 

2,815

 

5,014

 

Net cash used in investing activities

(240,810

)

(24,834

)

(349,981

)

(450,591

)

Financing activities:

 

 

 

 

Payments on long-term debt

 

 

(2,000

)

(27,000

)

Issuance of common stock

3,434

 

2

 

4,351

 

3,029

 

Taxes paid related to net share settlement of equity awards

(276

)

(139

)

(8,577

)

(14,552

)

Repurchase and retirement of common stock

(15,000

)

(10,000

)

(65,321

)

(30,000

)

Dividend payments

(10,815

)

(9,899

)

(29,779

)

(29,701

)

Other

(5

)

(250

)

(502

)

1,254

 

Net cash used in financing activities

(22,662

)

(20,286

)

(101,828

)

(96,970

)

Effect of exchange rate changes on cash

(453

)

(1,236

)

(1,159

)

(4,203

)

(Decrease) increase in cash and cash equivalents

(238,634

)

37,787

 

(199,314

)

(330,515

)

Cash and cash equivalents at beginning of period

521,382

 

257,106

 

482,062

 

625,408

 

Cash and cash equivalents at end of period

$

282,748

 

$

294,893

 

$

282,748

 

$

294,893

 

Entegris, Inc. and Subsidiaries
Segment Information
(In thousands)
(Unaudited)

Note: In the first quarter of 2019, the Company changed its definition of segment profit to include inter-segment sales. The Company updated its recognition of inter-segment sales to recognize the revenue and profit associated with products and components produced in one segment and supplied to another, before being sold to the ultimate end customer. The Company accounts for inter-segment sales and transfers as if the sales or transfers were to third parties, that is, at approximate market prices. Inter-segment sales are presented as an elimination below. Prior quarter information has been recast to reflect the change in the Company’s definition of segment profit.

 

Three months ended

 

Nine months ended

Net sales

September 28,
2019

September 29,
2018

June 29, 2019

 

September 29, 2019

September 29, 2018

Specialty Chemicals and Engineered Materials

$

127,750

 

$

131,234

 

$

127,552

 

 

$

379,772

 

$

396,313

 

Microcontamination Control

155,979

 

151,478

 

150,185

 

 

463,870

 

395,338

 

Advanced Materials Handling

117,256

 

123,227

 

107,515

 

 

340,835

 

377,877

 

Inter-segment elimination

(6,838

)

(7,342

)

(6,378

)

 

(20,409

)

(20,673

)

Total net sales

$

394,147

 

$

398,597

 

$

378,874

 

 

$

1,164,068

 

$

1,148,855

 

 

Three months ended

 

Nine months ended

Segment profit

September 28,
2019

September 29,
2018

June 29, 2019

 

September 28, 2019

September 29, 2018

Specialty Chemicals and Engineered Materials

$

17,074

 

$

31,210

 

$

24,000

 

 

$

65,505

 

$

98,859

 

Microcontamination Control

46,792

 

42,448

 

43,126

 

 

137,241

 

119,973

 

Advanced Materials Handling

17,077

 

22,226

 

15,043

 

 

54,487

 

73,231

 

Total segment profit

80,943

 

95,884

 

82,169

 

 

257,233

 

292,063

 

Amortization of intangible assets

15,152

 

21,419

 

16,591

 

 

50,400

 

45,102

 

Unallocated expenses

12,998

 

6,490

 

10,669

 

 

51,640

 

25,580

 

Total operating income

$

52,793

 

$

67,975

 

$

54,909

 

 

$

155,193

 

$

221,381

 

Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Gross Profit to Adjusted Gross Profit
(In thousands)
(Unaudited)

 

Three months ended

 

Nine months ended

 

September 28, 2019

September 29, 2018

June 29, 2019

 

September 28, 2019

September 29, 2018

Net sales

$

394,147

 

$

398,597

 

$

378,874

 

 

$

1,164,068

 

$

1,148,855

 

Gross profit-GAAP

$

170,350

 

$

181,716

 

$

166,274

 

 

$

514,017

 

$

540,091

 

Adjustments to gross profit:

 

 

 

 

 

 

Severance and restructuring costs

990

 

 

 

 

1,348

 

 

Charge for fair value mark-up of acquired inventory sold

4,483

 

3,281

 

695

 

 

7,333

 

3,489

 

Adjusted gross profit

$

175,823

 

$

184,997

 

$

166,969

 

 

$

522,698

 

$

543,580

 

 

 

 

 

 

 

 

Gross margin - as a % of net sales

43.2

%

45.6

%

43.9

%

 

44.2

%

47.0

%

Adjusted gross margin - as a % of net sales

44.6

%

46.4

%

44.1

%

 

44.9

%

47.3

%

Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Segment Profit to Adjusted Operating Income
(In thousands)
(Unaudited)

Note: In the first quarter of 2019, the Company changed its definition of segment profit to include inter-segment sales. The Company updated its recognition of inter-segment sales to recognize the revenue and profit associated with products and components produced in one segment and supplied to another, before being sold to the ultimate end customer. The Company accounts for inter-segment sales and transfers as if the sales or transfers were to third parties, that is, at approximate market prices. Prior quarter information has been recast to reflect the change in the Company’s definition of segment profit.

 

Three months ended

 

Nine months ended

Segment profit-GAAP

September 28,
2019

September 29,
2018

June 29, 2019

 

September 28, 2019

September 29, 2018

Specialty Chemicals and Engineered Materials

$

17,074

 

$

31,210

 

$

24,000

 

 

$

65,505

 

$

98,859

 

Microcontamination Control

46,792

 

42,448

 

43,126

 

 

137,241

 

119,973

 

Advanced Materials Handling

17,077

 

22,226

 

15,043

 

 

54,487

 

73,231

 

Total segment profit

80,943

 

95,884

 

82,169

 

 

257,233

 

292,063

 

Amortization of intangible assets

15,152

 

21,419

 

16,591

 

 

50,400

 

45,102

 

Unallocated expenses

12,998

 

6,490

 

10,669

 

 

51,640

 

25,580

 

Total operating income

$

52,793

 

$

67,975

 

$

54,909

 

 

$

155,193

 

$

221,381

 

 

Three months ended

 

Nine months ended

Adjusted segment profit

September 28,
2019

September 29,
2018

June 29, 2019

 

September 28, 2019

September 29, 2018

Specialty Chemicals and Engineered Materials1

$

23,700

 

$

31,210

 

$

24,695

 

 

$

73,465

 

$

98,859

 

Microcontamination Control 2

49,769

 

45,729

 

43,126

 

 

142,977

 

123,462

 

Advanced Materials Handling 3

20,212

 

22,692

 

15,043

 

 

58,200

 

73,697

 

Total adjusted segment profit

93,681

 

99,631

 

82,864

 

 

274,642

 

296,018

 

Adjusted amortization of intangible assets4

 

 

 

 

 

 

Adjusted unallocated expenses5

5,461

 

5,738

 

6,071

 

 

17,449

 

18,510

 

Total adjusted operating income

$

88,220

 

$

93,893

 

$

76,793

 

 

$

257,193

 

$

277,508

 

1 Adjusted segment profit for Specialty Chemicals and Engineered Materials for the three months ended September 28, 2019 and June 29, 2019, and for the nine months ended September 28, 2019 excludes charges for fair value mark-up of acquired inventory sold of $4,483, $695 and $5,298, respectively. Adjusted segment profit for the three and nine months ended September 28, 2019 also excludes charges for severance and restructuring of $2,143 and $2,662, respectively.
2 Adjusted segment profit for Microcontamination Control for the three and nine months ended September 28, 2019 excludes charges for severance and restructuring of $2,977 and $3,701, respectively. Adjusted segment profit for the three months ended September 29, 2018 and the nine months ended September 28, 2019 and September 29, 2018 excludes charges for fair value mark-up of acquired inventory sold of $3,281, $2,035 and $3,489, respectively.
3Adjusted segment profit for Advanced Materials Handling for the three and nine months ended September 28, 2019 excludes charges for severance and restructuring of $3,135 and $3,713, respectively. Adjusted segment profit for the three and nine months ended September 29, 2018 excludes loss on the sale of subsidiary of $466.
4 Adjusted amortization of intangible assets excludes amortization expense of $15,152, $21,419 and $16,591 for the three months ended September 28, 2019, September 29, 2018 and June 29, 2019, respectively, and $50,400 and $45,102 for the nine months ended September 28, 2019 and September 29, 2018, respectively.
5 Adjusted unallocated expenses for the three months ended September 28, 2019, September 29, 2018, and June 29, 2019 and the nine months ended September 28, 2019 and September 29, 2018 excludes deal and integration expenses of $7,289, $752, $2,428, $31,773, and $7,070, respectively. Adjusted unallocated expenses for the three months ended September 28, 2019, and June 29, 2019 and the nine months ended September 28, 2019 excludes charges for severance and restructuring of $248, $2,170, and $2,418, respectively.

Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA
(In thousands)
(Unaudited)

 

Three months ended

 

Nine months ended

 

September 28, 2019

September 29, 2018

June 29, 2019

 

September 28, 2019

September 29, 2018

Net sales

$

394,147

 

$

398,597

 

$

378,874

 

 

$

1,164,068

 

$

1,148,855

 

Net income

$

40,767

 

$

48,060

 

$

123,997

 

 

$

197,422

 

$

159,971

 

Adjustments to net income:

 

 

 

 

 

 

Income tax expense

876

 

11,427

 

43,235

 

 

49,533

 

34,755

 

Interest expense, net

10,216

 

7,678

 

9,692

 

 

29,567

 

21,829

 

Other expense (income), net

934

 

810

 

(122,015

)

 

(121,329

)

4,826

 

GAAP - Operating income

52,793

 

67,975

 

54,909

 

 

155,193

 

221,381

 

Charge for fair value write-up of acquired inventory sold

4,483

 

3,281

 

695

 

 

7,333

 

3,489

 

Deal costs

4,891

 

 

1,164

 

 

25,191

 

5,121

 

Integration costs

2,398

 

752

 

1,264

 

 

6,582

 

1,949

 

Severance and restructuring costs

8,503

 

 

2,170

 

 

12,494

 

 

Loss on sale of subsidiary

 

466

 

 

 

 

466

 

Amortization of intangible assets

15,152

 

21,419

 

16,591

 

 

50,400

 

45,102

 

Adjusted operating income

88,220

 

93,893

 

76,793

 

 

257,193

 

277,508

 

Depreciation

19,306

 

16,537

 

18,596

 

 

54,623

 

48,236

 

Adjusted EBITDA

$

107,526

 

$

110,430

 

$

95,389

 

 

$

311,816

 

$

325,744

 

 

 

 

 

 

 

 

Net income - as a % of net sales

10.3

%

12.1

%

32.7

%

 

17.0

%

13.9

%

Adjusted operating margin

22.4

%

23.6

%

20.3

%

 

22.1

%

24.2

%

Adjusted EBITDA - as a % of net sales

27.3

%

27.7

%

25.2

%

 

26.8

%

28.4

%

Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Net Income and Earnings per Share to Non-GAAP Net Income and Earnings per Share
(In thousands, except per share data)
(Unaudited)

 

Three months ended

 

Nine months ended

 

September 28, 2019

September 29, 2018

June 29, 2019

 

September 28,
2019

September 29,
2018

GAAP net income

$

40,767

 

$

48,060

 

$

123,997

 

 

$

197,422

 

$

159,971

 

Adjustments to net income:

 

 

 

 

 

 

Charge for fair value write-up of acquired inventory sold

4,483

 

3,281

 

695

 

 

7,333

 

3,489

 

Deal costs

4,891

 

 

1,164

 

 

25,602

 

5,121

 

Integration costs

2,398

 

752

 

1,264

 

 

6,582

 

1,949

 

Severance and restructuring costs

8,503

 

 

2,170

 

 

12,494

 

 

Versum termination fee, net

 

 

(122,000

)

 

(122,000

)

 

Loss on sale of subsidiary

 

466

 

 

 

 

466

 

Amortization of intangible assets

15,152

 

21,419

 

16,591

 

 

50,400

 

45,102

 

Tax effect of legal entity restructuring

 

 

9,398

 

 

9,398

 

 

Tax effect of adjustments to net income and discrete items1

(8,015

)

(5,797

)

20,153

 

 

2,274

 

(12,209

)

Tax effect of Tax Cuts and Jobs Act

 

(2,560

)

 

 

 

(418

)

Non-GAAP net income

$

68,179

 

$

65,621

 

$

53,432

 

 

$

189,505

 

$

203,471

 

 

 

 

 

 

 

 

Diluted earnings per common share

$

0.30

 

$

0.34

 

$

0.91

 

 

$

1.45

 

$

1.12

 

Effect of adjustments to net income

$

0.20

 

$

0.12

 

$

(0.52

)

 

$

(0.06

)

$

0.30

 

Diluted non-GAAP earnings per common share

$

0.50

 

$

0.46

 

$

0.39

 

 

$

1.39

 

$

1.42

 

1The tax effect of pre-tax adjustments to net income was calculated using the applicable marginal tax rate during the respective years.

Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Outlook to Non-GAAP Outlook
(In millions, except per share data)
(Unaudited)

 

Fourth-Quarter Outlook

Reconciliation GAAP net income to non-GAAP net income

December 31, 2019

GAAP net income

$51 - $58

Adjustments to net income:

 

Charge for fair value write-up of acquired inventory sold

5

Restructuring and integration costs

2

Amortization of intangible assets

17

Income tax effect

(6)

Non-GAAP net income

$69 - $76

 

Fourth-Quarter Outlook

Reconciliation GAAP diluted earnings per share to non-GAAP diluted earnings per share

December 31, 2019

Diluted earnings per common share

$0.38 - $0.43

Adjustments to diluted earnings per common share:

 

Charge for fair value write-up of acquired inventory sold

0.03

Restructuring and integration costs

0.01

Amortization of intangible assets

0.13

Income tax effect

(0.04)

Diluted non-GAAP earnings per common share

$0.51 to $0.56

 

Source: Entegris, Inc

Bill Seymour 
VP of Investor Relations 
T + 1 952 556 1844