<< Back
Press Release

Entegris Reports Strong Second-Quarter Results

BILLERICA, Mass., July 27, 2017 /PRNewswire/ -- Entegris, Inc. (NasdaqGS: ENTG), a leading specialty materials provider, today reported its financial results for the Company's second quarter ended July 1, 2017.

Entegris, Inc.

Second-quarter sales were $329.0 million, an increase of 8.6% from the same quarter last year and a 3.7% increase sequentially.  Second-quarter net income was $40.0 million, or $0.28 per diluted share, which included amortization of intangible assets of $11.0 million, as well as an asset impairment charge and severance expense of $3.6 million. Non-GAAP net income was $48.9 million, or $0.34 per diluted share.

For the first half of fiscal 2017, sales of $646.4 million increased 13.4% from the same period a year ago.  First-half 2017 net income was $72.5 million, or $0.51 per share, which included amortization of intangible assets of $22.0 million, as well as an asset impairment charge and severance expense of $3.6 million.  Non-GAAP net income for the first half of 2017 was $89.7 million, or $0.63 per diluted share.

Bertrand Loy, president and chief executive officer, said: "I am very pleased with Entegris' performance thus far this year which puts us on a solid path to grow well in excess of our markets in 2017.  Our growth in the second-quarter was driven by positive industry trends and reflected strong performance across our portfolio of solutions, as well as successful product introductions to support the ongoing ramp of advanced semiconductor manufacturing technologies such as 3D NAND. Our first-half sales grew 13% from the prior year, driven by strong growth in Asia, particularly in Korea."

Mr. Loy added:  "The quality of our execution and financial performance in the second quarter demonstrates the strength of our business model and our operating leverage, as we generated strong cash flow from operations and achieved an adjusted EBITDA of $88.2 million, or 26.8% of sales."

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

GAAP Results

Q2-2017

Q2-2016

Q1-2017

Net sales

$329,002

$303,052

$317,377

Operating income

$59,090

$46,400

$50,920

Operating margin

18.0%

15.3%

16.0%

Net income

$39,991

$32,890

$32,514

Diluted earnings per share (EPS)

$0.28

$0.23

$0.23

Non-GAAP Results

Non-GAAP adjusted operating income

$73,826

$57,462

$61,865

Adjusted operating margin

22.4%

19.0%

19.5%

Non-GAAP net income

$48,906

$40,290

$40,754

Non-GAAP EPS

$0.34

$0.28

$0.28

 

Third-Quarter Outlook
For the third quarter ending September 30, 2017, the Company expects sales of $325 million to $340 million, net income of $36 million to $43 million, and net income per diluted share between $0.25 and $0.30.  On a non-GAAP basis, EPS is expected to range from $0.30 to $0.35 per diluted share, which reflects net income on a non-GAAP basis in the range of $43 million to $50 million, which is adjusted for expected amortization expense of approximately $11 million or $0.05 per share.

Segment Results
As of December 31, 2016, the Company changed its financial segment reporting to the following segments:

Specialty Chemicals and Engineered Materials (SCEM): SCEM provides high-performance and high-purity process chemistries, gases, and materials and 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 and substrates for a broad set of applications in the semiconductor industry and other high-technology industries.

Second-Quarter Results Conference Call Details
Entegris will hold a conference call to discuss its results for the second quarter on Thursday, July 27, 2017, at 9:00 a.m. Eastern Time.  Participants should dial 1-877-852-6583 or 1-719-325-2495, referencing confirmation code 1492733.  Participants are asked to dial in 5 to 10 minutes prior to the start of the call.  To access a telephonic replay of the call, please [Click Here]. The replay will be available starting at 12:00 p.m. ET on Thursday, July 27 until Saturday, September 9.  A live and on-demand webcast of the call can also be accessed from the investor relations section of Entegris' website at http://investor.entegris.com/.

Management's slide presentation concerning the results for the second quarter, which may be referred to during the call, will be posted on the investor relations section of http://investor.entegris.com/ Thursday morning before the call.

ABOUT ENTEGRIS
Entegris is a leading specialty materials provider 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, 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 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 our competitors' operating results. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain items that may not be indicative of our recurring business operating results, such as amortization, depreciation and discrete cash charges that are infrequent in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing and understanding our results and performance and when planning, forecasting, and analyzing future periods.  We believe 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 our institutional investors and the analyst community to help them analyze our business.  The reconciliations of GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA, GAAP Gross Profit to Adjusted Gross Profit, GAAP Segment Profit to Adjusted Operating Income, and GAAP to Non-GAAP Earnings per Share are included elsewhere in this release.

Forward-Looking Statements
Certain information contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  The words "believe," "expect," "anticipate," "intends," "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 those about future period guidance; future sales, net income, net income per diluted share, non-GAAP EPS, non-GAAP net income, expenses and other financial metrics; our performance relative to our markets; market and technology trends; the development of new products and the success of their introductions; the Company's capital allocation strategy; our ability to execute on our strategies; and other matters. These forward-looking statements are based on current management expectations and assumptions only as of the date of this press release, are not guarantees of future performance and involve substantial risks and uncertainties that are difficult to predict and that could cause actual results to differ materially from the results expressed in, or implied by, these 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 our products and solutions; our ability to meet rapid demand shifts; our ability to continue technological innovation and introduce new products to meet our customers' rapidly changing requirements; our concentrated customer base; our ability to identify, effect and integrate acquisitions, joint ventures or other transactions; our ability to protect and enforce intellectual property rights; operational, political and legal risks of our international operations; our dependence on sole source and limited source suppliers; the increasing complexity of certain manufacturing processes; raw material shortages and price increases; changes in government regulations of the countries in which we operate; fluctuation of currency exchange rates; fluctuations in the market price of Entegris' stock; the level of, and obligations associated with, our indebtedness; and other risk factors and additional information described in our filings with the Securities and Exchange Commission, including under the heading "Risks Factors" in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed on February 17, 2017, and in our other periodic filings. Except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission, we undertake no obligation to update publicly any forward-looking statements contained herein.

 

 

Entegris, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 
   

Three months ended

   

July 1, 2017

 

July 2, 2016

 

April 1, 2017

 

Net sales

$329,002

 

$303,052

 

$317,377

 

Cost of sales

178,699

 

163,847

 

177,781

 
 

Gross profit

150,303

 

139,205

 

139,596

 

Selling, general and administrative expenses

52,985

 

53,597

 

50,492

 

Engineering, research and development expenses

27,221

 

28,146

 

27,239

 

Amortization of intangible assets

11,007

 

11,062

 

10,945

 
 

Operating income

59,090

 

46,400

 

50,920

 

Interest expense, net

8,103

 

9,051

 

8,393

 

Other (income) expense, net

(46)

 

(1,054)

 

902

 
 

Income before income tax expense

51,033

 

38,403

 

41,625

 

Income tax expense

11,042

 

5,513

 

9,111

 
 

Net income

$39,991

 

$32,890

 

$32,514

 
               
           

Basic net income per common share:

$0.28

 

$0.23

 

$0.23

 

Diluted net income per common share:

$0.28

 

$0.23

 

$0.23

 
             

Weighted average shares outstanding:

           
 

Basic

141,696

 

140,953

 

141,501

 
 

Diluted

143,508

 

141,723

 

143,315

 

 

 

Entegris, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 
   

Six months ended

   

July 1, 2017

 

July 2, 2016

 

Net sales

$646,379

 

$570,076

 

Cost of sales

356,480

 

316,165

 
 

Gross profit

289,899

 

253,911

 

Selling, general and administrative expenses

103,477

 

101,553

 

Engineering, research and development expenses

54,460

 

54,048

 

Amortization of intangible assets

21,952

 

22,351

 
 

Operating income

110,010

 

75,959

 

Interest expense, net

16,496

 

18,200

 

Other expense (income), net

856

 

(1,729)

 
 

Income before income tax expense

92,658

 

59,488

 

Income tax expense

20,153

 

10,386

 
 

Net income

$72,505

 

$49,102

 
           
         

Basic net income per common share:

$0.51

 

$0.35

 

Diluted net income per common share:

$0.51

 

$0.35

 
           

Weighted average shares outstanding:

       
 

Basic

141,599

 

140,867

 
 

Diluted

143,411

 

141,547

 

 

 

Entegris, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 
 

July 1, 2017

 

December 31, 2016

 

ASSETS

       

Cash and cash equivalents

$405,635

 

$406,389

 

Accounts receivable, net

171,113

 

165,675

 

Inventories

194,155

 

183,529

 

Deferred tax charges and refundable  income taxes

16,716

 

20,140

 

Other current assets

21,374

 

24,398

 

      Total current assets

808,993

 

800,131

 
         

Property, plant and equipment, net

341,146

 

321,562

 
         

Goodwill

355,178

 

345,269

 

Intangible assets

206,182

 

217,548

 

Deferred tax assets

8,622

 

8,022

 

Other assets

7,322

 

7,000

 

      Total assets

$1,727,443

 

$1,699,532

 
         

LIABILITIES AND SHAREHOLDERS' EQUITY

       

Long-term debt, current maturities

$100,000

 

$100,000

 

Accounts payable

56,961

 

61,617

 

Accrued liabilities

75,275

 

83,530

 

Income tax payable

18,786

 

16,424

 

      Total current liabilities

251,022

 

261,571

 
         

Long-term debt, excluding current maturities

435,910

 

484,677

 

Other liabilities

58,242

 

54,066

 

Shareholders' equity

982,269

 

899,218

 

      Total liabilities and shareholders' equity

$1,727,443

 

$1,699,532

 
 

 

 

Entegris, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 
 

Three months ended

 

Six months ended

 

July 1, 2017

 

July 2, 2016

 

July 1, 2017

 

July 2, 2016

 

Operating activities:

               

Net  income

$39,991

 

$32,890

 

$72,505

 

$49,102

 

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

               

Depreciation

14,411

 

13,825

 

28,388

 

27,525

 

Amortization

11,007

 

11,062

 

21,952

 

22,351

 

Stock-based compensation expense

4,039

 

3,505

 

7,909

 

6,366

 

Provision for deferred income taxes

(215)

 

(720)

 

3,207

 

(931)

 

Other

6,497

 

4,408

 

10,130

 

9,204

 

Changes in operating assets and liabilities:

               

Trade accounts and notes receivable

4,514

 

(29,300)

 

(3,032)

 

(36,099)

 

Inventories

(8,422)

 

1,609

 

(13,837)

 

(11,389)

 

Accounts payable and accrued liabilities

10,177

 

23,065

 

(13,313)

 

13,555

 

Income taxes payable and refundable income taxes

4,209

 

1,133

 

2,957

 

407

 

Other

(1,049)

 

(278)

 

1,725

 

(1,553)

 

Net cash provided by operating activities

85,159

 

61,199

 

118,591

 

78,538

 

Investing activities:

               

Acquisition of business net of cash acquired

(20,000)

 

 

(20,000)

 

 

Acquisition of property and equipment

(20,302)

 

(14,325)

 

(42,492)

 

(32,144)

 

Other

25

 

837

 

211

 

(1,658)

 

Net cash used in investing activities

(40,277)

 

(13,488)

 

(62,281)

 

(33,802)

 

Financing activities:

               

Payments on long-term debt

(25,000)

 

(25,000)

 

(50,000)

 

(25,000)

 

Issuance of common stock

1,864

 

2,380

 

2,905

 

2,380

 

Taxes paid related to net share settlement of
equity awards

(664)

 

(136)

 

(5,239)

 

(2,203)

 

Other

(5,000)

 

42

 

(9,270)

 

(3,482)

 

Net cash used in financing activities

(28,800)

 

(22,714)

 

(61,604)

 

(28,305)

 

Effect of exchange rate changes on cash

(1,606)

 

4,343

 

4,540

 

7,487

 

Increase (decrease) in cash and cash equivalents

14,476

 

29,340

 

(754)

 

23,918

 

Cash and cash equivalents at beginning of period

391,159

 

344,403

 

406,389

 

349,825

 

Cash and cash equivalents at end of period

$405,635

 

$373,743

 

$405,635

 

$373,743

 
 

 

 

Entegris, Inc. and Subsidiaries

Segment Information

(In thousands)

(Unaudited)

 
 

Three months ended

 

Six months ended

Net sales

July 1, 2017

 

July 2, 2016

 

April 1, 2017

 

July 1, 2017

 

July 2, 2016

 

Specialty Chemicals and Engineered
Materials

$121,174

 

$111,782

 

$114,435

 

$235,609

 

$212,889

 

Microcontamination Control

104,407

 

91,584

 

100,055

 

204,462

 

169,203

 

Advanced Materials Handling

103,421

 

99,686

 

102,887

 

206,308

 

187,984

 

     Total net sales

$329,002

 

$303,052

 

$317,377

 

$646,379

 

$570,076

 

 

 

Three months ended

 

Six months ended

Segment profit

July 1, 2017

 

July 2, 2016

 

April 1, 2017

 

July 1, 2017

 

July 2, 2016

 

Specialty Chemicals and Engineered
Materials

$34,174

 

$28,914

 

$28,140

 

$62,314

 

$51,330

 

Microcontamination Control

36,484

 

28,566

 

35,581

 

72,065

 

46,706

 

Advanced Materials Handling

19,573

 

22,519

 

18,276

 

37,849

 

41,430

 

Total segment profit

90,231

 

79,999

 

81,997

 

172,228

 

139,466

 

Amortization of intangibles

11,007

 

11,062

 

10,945

 

21,952

 

22,351

 

Unallocated expenses

20,134

 

22,537

 

20,132

 

40,266

 

41,156

 

    Total operating income

$59,090

 

$46,400

 

$50,920

 

$110,010

 

$75,959

 
 

 

 

Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Gross Profit to Adjusted Gross Profit

(In thousands)

(Unaudited)

 
 

Three months ended

 

Six months ended

 

July 1, 2017

 

July 2, 2016

 

April 1, 2017

 

July 1, 2017

 

July 2, 2016

 

Net sales

$329,002

 

$303,052

 

$317,377

 

$646,379

 

$570,076

 

Gross profit-GAAP

$150,303

 

$139,205

 

$139,596

 

$289,899

 

$253,911

 

Adjustments to gross profit:

                   

Impairment of equipment

1,966

 

 

 

1,966

 

 

Adjusted gross profit

$152,269

 

$139,205

 

$139,596

 

$291,865

 

$253,911

 
                     

Gross margin - as a % of net sales

45.7

%

45.9

%

44.0

%

44.8

%

44.5

%

Adjusted gross margin - as a % of net sales

46.3

%

45.9

%

44.0

%

45.2

%

44.5

%

 

 

 

Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Segment Profit to Adjusted Operating Income

(In thousands)

(Unaudited)

 
 

Three months ended

 

Six months ended

Segment profit-GAAP

July 1, 2017

 

July 2, 2016

 

April 1, 2017

 

July 1, 2017

 

July 2, 2016

 

Specialty Chemicals and Engineered Materials

$34,174

 

$28,914

 

$28,140

 

$62,314

 

$51,330

 

Microcontamination Control

36,484

 

28,566

 

35,581

 

72,065

 

46,706

 

Advanced Materials Handling

19,573

 

22,519

 

18,276

 

37,849

 

41,430

 

Total segment profit

90,231

 

79,999

 

81,997

 

172,228

 

139,466

 

Amortization of intangible assets

11,007

 

11,062

 

10,945

 

21,952

 

22,351

 

Unallocated expenses

20,134

 

22,537

 

20,132

 

40,266

 

41,156

 

    Total operating income

$59,090

 

$46,400

 

$50,920

 

$110,010

 

$75,959

 
                     

Segment profit margin-GAAP

                   

Specialty Chemicals and Engineered Materials

28.2

%

25.9

%

24.6

%

26.4

%

24.1

%

Microcontamination Control

34.9

%

31.2

%

35.6

%

35.2

%

27.6

%

Advanced Materials Handling

18.9

%

22.6

%

17.8

%

18.3

%

22.0

%

 

 

Three months ended

 

Six months ended

Adjusted segment profit

July 1, 2017

 

July 2, 2016

 

April 1, 2017

 

July 1, 2017

 

July 2, 2016

 

Specialty Chemicals and Engineered Materials

$34,174

 

$28,914

 

$28,140

 

$62,314

 

$51,330

 

Microcontamination Control 1

37,927

 

28,566

 

35,581

 

73,508

 

46,706

 

Advanced Materials Handling 2

21,859

 

22,519

 

18,276

 

40,135

 

41,430

 

Total adjusted segment profit

93,960

 

79,999

 

81,997

 

175,957

 

139,466

 

Amortization of intangible assets 3

 

 

 

 

 

Unallocated expenses

20,134

 

22,537

 

20,132

 

40,266

 

41,156

 

    Total adjusted operating income

$73,826

 

$57,462

 

$61,865

 

$135,691

 

$98,310

 
                     

Adjusted segment profit margin

                   

Specialty Chemicals and Engineered Materials

28.2

%

25.9

%

24.6

%

26.4

%

24.1

%

Microcontamination Control

36.3

%

31.2

%

35.6

%

36.0

%

27.6

%

Advanced Materials Handling

21.1

%

22.6

%

17.8

%

19.5

%

22.0

%

 

1 Adjusted segment profit for Microcontamination Control for the three and six months ended July 1, 2017 excludes charges for impairment of equipment and severance of $884 and $559, respectively.

2 Adjusted segment profit for Advanced Material Handling for the three and six months ended July 1, 2017 excludes charges for impairment of equipment of $2,286.

3  Adjusted amortization of intangible assets excludes amortization expense of $11,007, $11,062, and $10,945 for the three months ended July 1, 2017, July 2, 2016, and April 1, 2017, respectively and $21,952 and $22,351 for the six months ended July 1, 2017 and July 2, 2016, respectively.

 

 

 

Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA

(In thousands)

(Unaudited)

 
 

Three months ended

 

Six months ended

 

July 1, 2017

 

July 2, 2016

 

April 1, 2017

 

July 1, 2017

 

July 2, 2016

 

Net sales

$329,002

 

$303,052

 

$317,377

 

$646,379

 

$570,076

 

Net income

$39,991

 

$32,890

 

$32,514

 

$72,505

 

$49,102

 

Adjustments to net income:

                   

Income tax expense

11,042

 

5,513

 

9,111

 

20,153

 

10,386

 

Interest expense, net

8,103

 

9,051

 

8,393

 

16,496

 

18,200

 

Other (income) expense, net

(46)

 

(1,054)

 

902

 

856

 

(1,729)

 

GAAP - Operating income

59,090

 

46,400

 

50,920

 

110,010

 

75,959

 

Severance

559

 

 

 

559

 

 

Impairment of equipment

3,170

 

 

 

3,170

 

 

Amortization of intangible assets

11,007

 

11,062

 

10,945

 

21,952

 

22,351

 

Adjusted operating income

73,826

 

57,462

 

61,865

 

135,691

 

98,310

 

Depreciation

14,411

 

13,825

 

13,977

 

28,388

 

27,525

 

Adjusted EBITDA

$88,237

 

$71,287

 

$75,842

 

$164,079

 

$125,835

 
                     

Adjusted operating margin

22.4

%

19.0

%

19.5

%

21.0

%

17.2

%

Adjusted EBITDA - as a % of net sales

26.8

%

23.5

%

23.9

%

25.4

%

22.1

%

 

 

 

Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Net Income to Non-GAAP Earnings per Share

(In thousands, except per share data)

(Unaudited)

 
 

Three months ended

   

Six months ended

 

July 1, 2017

 

July 2, 2016

 

April 1, 2017

   

July 1, 2017

 

July 2, 2016

 

GAAP net income

$39,991

 

$32,890

 

$32,514

   

$72,505

 

$49,102

 

Adjustments to net income:

                     

Severance

559

 

 

   

559

 

 

Impairment of equipment

3,170

 

 

   

3,170

 

 

Gain on sale of equity investment

 

(38)

 

   

 

(156)

 

Amortization of intangible assets

11,007

 

11,062

 

10,945

   

21,952

 

22,351

 

Tax effect of adjustments to net income and discrete items

(5,821)

 

(3,624)

 

(2,705)

   

(8,526)

 

(7,390)

 

Non-GAAP net income

$48,906

 

$40,290

 

$40,754

   

$89,660

 

$63,907

 
                       

Diluted earnings per common share

$0.28

 

$0.23

 

$0.23

   

$0.51

 

$0.35

 

Effect of adjustments to net income

$0.06

 

$0.05

 

$0.06

   

$0.12

 

$0.10

 

Diluted non-GAAP earnings per common share

$0.34

 

$0.28

 

$0.28

   

$0.63

 

$0.45

 

 

Contact:
Steven Cantor
VP of Corporate Relations
T + 978 436 6500
irelations@entegris.com

View original content:http://www.prnewswire.com/news-releases/entegris-reports-strong-second-quarter-results-300495010.html

SOURCE Entegris, Inc.

 

 

News Provided by Acquire Media

Delayed at least 20 minutes.
Provided by eSignal.