UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________
FORM 8-K
________________________________________
CURRENT REPORT
PURSUANT TO SECTIONS 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) April 27, 2017
_______________________________________
Entegris, Inc.
(Exact name of registrant as specified in its charter)
_______________________________________
Delaware
(State or Other Jurisdiction of Incorporation or Organization)
001-32598 | 41-1941551 | |
(Commission File Number) | (I.R.S. Employer Identification No.) | |
129 Concord Road, Billerica, MA | 01821 | |
(Address of principal executive offices) | (Zip Code) | |
(978) 436-6500
(Registrant’s telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
_______________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On April 27, 2017, the registrant issued a press release to announce results for the first quarter of 2017, ended April 1, 2017, and will hold a conference call to discuss such results. A copy of this press release and the supplemental slides to which management will refer during the conference call are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are incorporated herein by reference.
In accordance with General Instructions B.2 of Form 8-K, the information in this Item 2.02 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing. The information set forth herein will not be deemed an admission as to the materiality of any information required to be disclosed solely to satisfy the requirements of Regulation FD.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. | Description | |
99.1 | Press Release, dated April 27, 2017 | |
99.2 | First Quarter 2017 Earnings Release Presentation Slides, dated April 27, 2017 | |
SIGNATURE
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.
ENTEGRIS, INC.
Dated: April 27, 2017
By: /s/ Gregory B. Graves
Name: Gregory B. Graves
Title: Executive Vice President and Chief Financial Officer
EXHIBIT INDEX
Exhibit No. | Description | |
99.1 | Press Release, dated April 27, 2017 | |
99.2 | First Quarter 2017 Earnings Release Presentation Slides, dated April 27, 2017 | |
 | PRESS RELEASE Steven Cantor VP of Corporate Relations T + 978 436 6500 irelations@entegris.com | |||
Exhibit 99.1
FOR RELEASE AT 7:00 AM EST
ENTEGRIS REPORTS STRONG FIRST-QUARTER RESULTS
• | Record first-quarter revenue of $317.4 million |
• | GAAP net income of $32.5 million, or $0.23 per diluted share |
• | Non-GAAP net income of $40.8 million, or $0.28 per diluted share |
BILLERICA, Mass., April 27, 2017 - 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 first quarter ended April 1, 2017.
First-quarter sales were $317.4 million, an increase of 18.9% from the same quarter last year and a 2.9% increase sequentially. First-quarter net income was $32.5 million, or $0.23 per diluted share, which included amortization of intangible assets of $10.9 million. Non-GAAP net income was $40.8 million, or $0.28 per diluted share.
Bertrand Loy, president and chief executive officer, said: "I am very pleased to report another extremely successful quarter, which reflects the growing importance of our value proposition and the quality of execution by our teams around the world. First-quarter sales reached an all-time high driven by strength across all businesses and record demand for microfiltration and advanced deposition products. In large part, the introduction of new materials is making possible the next level of semiconductor device performance, and we believe that our expertise in advanced materials combined with our broad array of purification and fluid handling solutions will be key enablers of our industry’s innovations."
Mr. Loy added: "We generated record quarterly adjusted EBITDA of $75.8 million, or 23.9% of revenue. In addition to pursuing organic growth prospects for the company, we continued to execute our capital allocation strategy by paying down $25 million of debt in the first quarter and by completing the acquisition of a complementary and accretive liquid filtration product line from W. L. Gore & Associates, Inc."
- more -
_________________________________________________________________________ | ||
ENTEGRIS, INC. | 129 Concord Road, Building 2 | T + 1 978 436 6500 |
entegris.com | Billerica, MA 01821 USA | F + 1 978 436 6745 |
Quarterly Financial Results Summary
(in thousands, except per share data)
GAAP Results | Q1-2017 | Q1-2016 | Q4-2016 | |||
Net sales | $317,377 | $267,024 | $308,502 | |||
Operating income | $50,920 | $29,559 | $44,905 | |||
Operating margin | 16.0 | % | 11.1 | % | 14.6 | % |
Net income | $32,514 | $16,212 | $26,098 | |||
Diluted earnings per share (EPS) | $0.23 | $0.11 | $0.18 | |||
Non-GAAP Results | ||||||
Non-GAAP adjusted operating income | $61,865 | $40,848 | $55,843 | |||
Adjusted operating margin | 19.5 | % | 15.3 | % | 18.1 | % |
Non-GAAP net income | $40,754 | $23,617 | $34,294 | |||
Non-GAAP EPS | $0.28 | $0.17 | $0.24 | |||
Second-Quarter Outlook
For the second quarter ending July 1, 2017, the Company expects sales of $315 million to $330 million, net income of $32 million to $37 million, and net income per diluted share between $0.22 and $0.26. On a non-GAAP basis, EPS is expected to range from $0.27 to $0.31 per diluted share, which reflects net income on a non-GAAP basis in the range of $39 million to $44 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.
First-Quarter Results Conference Call Details
Entegris will hold a conference call to discuss its results for the first quarter on Thursday, April 27, 2017, at 9:30 a.m. Eastern Time. Participants should dial 1-888-778-9067 or 1-913-981-5587, referencing confirmation code 5731098. 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 12:30 p.m. ET on Thursday, April 27 until Saturday, June 10. A live and on-demand webcast of the call can also be accessed from the investor relations section of Entegris’ website at www.entegris.com.
Management’s slide presentation concerning the results for the first 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.
Entegris, Inc. | page 2 of 9
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, 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. These forward-looking statements are based on current management expectations only as of the date of this press release, and involve substantial risks and uncertainties that could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. Statements that include such words as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “may,” “will,” “should” or the negative thereof and similar expressions as they relate to Entegris or our management are intended to identify such forward-looking statements. These statements, including those relating to market trends and financial projections, are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. These risks include, but are not limited to, fluctuations in the market price of Entegris’ stock, Entegris’ future operating results, other acquisition and investment opportunities available to Entegris, general business and market conditions and other factors. Additional information concerning these and other risk factors may be found in previous financial press releases issued by Entegris and Entegris’ periodic public filings with the Securities and Exchange Commission, including discussions appearing under the headings “Risks Relating to our Business and Industry,” “Risks Relating to Our Indebtedness,” “Manufacturing Risks,” “International Risks,” and “Risks Related to Owning Our Common Stock” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed with the U.S Securities and Exchange Commission on February 17, 2017, as well as other matters and important factors disclosed previously and from time to time in the filings of Entegris with the U.S. Securities and Exchange Commission. 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. | page 3 of 9
Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three months ended | |||||||
April 1, 2017 | April 2, 2016 | December 31, 2016 | |||||
Net sales | $317,377 | $267,024 | $308,502 | ||||
Cost of sales | 177,781 | 152,318 | 176,702 | ||||
Gross profit | 139,596 | 114,706 | 131,800 | ||||
Selling, general and administrative expenses | 50,492 | 47,956 | 48,734 | ||||
Engineering, research and development expenses | 27,239 | 25,902 | 27,223 | ||||
Amortization of intangible assets | 10,945 | 11,289 | 10,938 | ||||
Operating income | 50,920 | 29,559 | 44,905 | ||||
Interest expense, net | 8,393 | 9,149 | 8,983 | ||||
Other expense (income), net | 902 | (675 | ) | 1,303 | |||
Income before income tax expense | 41,625 | 21,085 | 34,619 | ||||
Income tax expense | 9,111 | 4,873 | 8,521 | ||||
Net income | $32,514 | $16,212 | $26,098 | ||||
Basic net income per common share: | $0.23 | $0.12 | $0.18 | ||||
Diluted net income per common share: | $0.23 | $0.11 | $0.18 | ||||
Weighted average shares outstanding: | |||||||
Basic | 141,501 | 140,780 | 141,315 | ||||
Diluted | 143,315 | 141,371 | 142,631 | ||||
Entegris, Inc. | page 4 of 9
Entegris, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
April 1, 2017 | December 31, 2016 | |||
ASSETS | ||||
Cash and cash equivalents | $391,159 | $406,389 | ||
Accounts receivable, net | 176,032 | 165,675 | ||
Inventories | 188,343 | 183,529 | ||
Deferred tax charges and refundable income taxes | 16,729 | 20,140 | ||
Other current assets | 19,489 | 24,398 | ||
Total current assets | 791,752 | 800,131 | ||
Property, plant and equipment, net | 330,926 | 321,562 | ||
Goodwill | 349,120 | 345,269 | ||
Intangible assets | 208,591 | 217,548 | ||
Deferred tax assets | 8,418 | 8,022 | ||
Other assets | 7,287 | 7,000 | ||
Total assets | $1,696,094 | $1,699,532 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||
Long-term debt, current maturities | $100,000 | $100,000 | ||
Accounts payable | 54,516 | 61,617 | ||
Accrued liabilities | 66,382 | 83,530 | ||
Income tax payable | 15,341 | 16,424 | ||
Total current liabilities | 236,239 | 261,571 | ||
Long-term debt, excluding current maturities | 460,315 | 484,677 | ||
Other liabilities | 54,479 | 54,066 | ||
Shareholders’ equity | 945,061 | 899,218 | ||
Total liabilities and shareholders’ equity | $1,696,094 | $1,699,532 | ||
Entegris, Inc. | page 5 of 9
Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three months ended | ||||
April 1, 2017 | April 2, 2016 | |||
Operating activities: | ||||
Net income | $32,514 | $16,212 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation | 13,977 | 13,700 | ||
Amortization | 10,945 | 11,289 | ||
Stock-based compensation expense | 3,870 | 2,861 | ||
Provision for deferred income taxes | 3,422 | (211 | ) | |
Other | 3,633 | 4,796 | ||
Changes in operating assets and liabilities: | ||||
Trade accounts and notes receivable | (7,546 | ) | (6,799 | ) |
Inventories | (5,415 | ) | (12,998 | ) |
Accounts payable and accrued liabilities | (23,490 | ) | (9,510 | ) |
Income taxes payable and refundable income taxes | (1,252 | ) | (726 | ) |
Other | 2,774 | (1,275 | ) | |
Net cash provided by operating activities | 33,432 | 17,339 | ||
Investing activities: | ||||
Acquisition of property and equipment | (22,190 | ) | (17,819 | ) |
Other | 186 | (2,495 | ) | |
Net cash used in investing activities | (22,004 | ) | (20,314 | ) |
Financing activities: | ||||
Payments on long-term debt | (25,000 | ) | — | |
Issuance of common stock | 1,041 | — | ||
Taxes paid related to net share settlement of equity awards | (4,575 | ) | (2,067 | ) |
Other | (4,270 | ) | (3,524 | ) |
Net cash used in financing activities | (32,804 | ) | (5,591 | ) |
Effect of exchange rate changes on cash | 6,146 | 3,144 | ||
Decrease in cash and cash equivalents | (15,230 | ) | (5,422 | ) |
Cash and cash equivalents at beginning of period | 406,389 | 349,825 | ||
Cash and cash equivalents at end of period | $391,159 | $344,403 | ||
Entegris, Inc. | page 6 of 9
Entegris, Inc. and Subsidiaries
Segment Information
(In thousands)
(Unaudited)
Three months ended | ||||||
Net sales | April 1, 2017 | April 2, 2016 | December 31, 2016 | |||
Specialty Chemicals and Engineered Materials | $114,435 | $101,107 | $110,945 | |||
Microcontamination Control | 100,055 | 77,619 | 98,717 | |||
Advanced Materials Handling | 102,887 | 88,298 | 98,840 | |||
Total net sales | $317,377 | $267,024 | $308,502 | |||
Three months ended | ||||||
Segment profit | April 1, 2017 | April 2, 2016 | December 31, 2016 | |||
Specialty Chemicals and Engineered Materials | $28,140 | $22,416 | $25,919 | |||
Microcontamination Control | 35,581 | 18,140 | 31,719 | |||
Advanced Materials Handling | 18,276 | 18,911 | 16,644 | |||
Total segment profit | 81,997 | 59,467 | 74,282 | |||
Amortization of intangibles | 10,945 | 11,289 | 10,938 | |||
Unallocated expenses | 20,132 | 18,619 | 18,439 | |||
Total operating income | $50,920 | $29,559 | $44,905 | |||
Entegris, Inc. | page 7 of 9
Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA
(In thousands)
(Unaudited)
Three months ended | ||||||
April 1, 2017 | April 2, 2016 | December 31, 2016 | ||||
Net sales | $317,377 | $267,024 | $308,502 | |||
Net income | $32,514 | $16,212 | $26,098 | |||
Adjustments to net income: | ||||||
Income tax expense | 9,111 | 4,873 | 8,521 | |||
Interest expense, net | 8,393 | 9,149 | 8,983 | |||
Other expense (income), net | 902 | (675) | 1,303 | |||
GAAP - Operating income | 50,920 | 29,559 | 44,905 | |||
Amortization of intangible assets | 10,945 | 11,289 | 10,938 | |||
Adjusted operating income | 61,865 | 40,848 | 55,843 | |||
Depreciation | 13,977 | 13,700 | 14,303 | |||
Adjusted EBITDA | $75,842 | $54,548 | $70,146 | |||
Adjusted operating margin | 19.5 | % | 15.3 | % | 18.1 | % |
Adjusted EBITDA - as a % of net sales | 23.9 | % | 20.4 | % | 22.7 | % |
Entegris, Inc. | page 8 of 9
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 | ||||||
April 1, 2017 | April 2, 2016 | December 31, 2016 | ||||
GAAP net income | $32,514 | $16,212 | $26,098 | |||
Adjustments to net income: | ||||||
Gain on sale of equity investment | — | (118 | ) | — | ||
Amortization of intangible assets | 10,945 | 11,289 | 10,938 | |||
Tax effect of adjustments to net income and discrete items | (2,705 | ) | (3,766 | ) | (2,742 | ) |
Non-GAAP net income | $40,754 | $23,617 | $34,294 | |||
Diluted earnings per common share | $0.23 | $0.11 | $0.18 | |||
Effect of adjustments to net income | $0.06 | $0.05 | $0.06 | |||
Diluted non-GAAP earnings per common share | $0.28 | $0.17 | $0.24 | |||
### END ###
Entegris, Inc. | page 9 of 9
APRIL 27, 2017
Earnings Summary
First Quarter 2017
Exhibit 99.2
2
SAFE HARBOR
Certain information contained in this presentation may constitute forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve substantial risks and
uncertainties that could cause actual results to differ materially from the results expressed in, or implied by, these
forward-looking statements. Statements that include such words as “anticipate,” “believe,” “estimate,” “expect,”
“forecast,” “may,” “will,” “should” or the negative thereof and similar expressions as they relate to Entegris or our
management are intended to identify such forward-looking statements. These statements are not guarantees of future
performance and involve risks, uncertainties and assumptions that are difficult to predict. These risks include, but are
not limited to, fluctuations in the market price of Entegris’ stock, Entegris’ future operating results, other acquisition
and investment opportunities available to Entegris, general business and market conditions and other factors.
Additional information concerning these and other risk factors may be found in previous financial press releases issued
by Entegris and Entegris’ periodic public filings with the Securities and Exchange Commission, including discussions
appearing under the headings “Risks Relating to our Business and Industry,” “Risks Related to Our Indebtedness,”
“Manufacturing Risks,” “International Risks” and “Risks Related to Owning Our Common Stock” in Item 1A of our
Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed with the Securities and Exchange
Commission on February 17, 2017, as well as other matters and important factors disclosed previously and from time
to time in the filings of Entegris with the U.S. Securities and Exchange Commission. 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.
3
1Q17 HIGHLIGHTS
◦ Achieved record sales of $317.4 million, up 19% from the prior year and up 3% from 4Q16
◦ Record sales of microcontamination control and advanced deposition products
◦ Generated GAAP EPS of $0.23 and non-GAAP EPS of $0.28, above the high end of our guidance
◦ For the trailing four quarters, GAAP EPS was $0.80 and non-GAAP EPS was $1.05
◦ Generated record adjusted EBITDA of $75.8 million, or 23.9% of sales
◦ Repaid $25 million of long-term debt, reducing net leverage ratio to 0.6 times
◦ Subsequent to the end of 1Q17, acquired a filtration product line from W. L. Gore
| CONFIDENTIAL
$ in millions, except per share data 1Q17 1Q17 Guidance 4Q16 1Q16
1Q17 over
1Q16
1Q17 over
4Q16
Net Revenue $317.4 $295 to $310 $308.5 $267.0 18.9% 2.9%
Gross Margin 44.0% 42.7% 43.0%
Operating Expenses $88.7 $86.9 $85.1 4.2% 2.1%
Operating Income $50.9 $44.9 $29.6 72.0% 13.4%
Operating Margin 16.0% 14.6% 11.1%
Tax Rate 21.9% 24.6% 23.1%
Net Income $32.5 $25 to $31 $26.1 $16.2 100.6% 24.5%
EPS $0.23 $0.18 to $0.22 $0.18 $0.11 109.1% 27.8%
4
SUMMARY – CONSOLIDATED STATEMENT OF OPERATIONS (GAAP)
$ in millions, except per share data 1Q17 1Q17 Guidance 4Q16 1Q16
1Q17 over
1Q16
1Q17 over
4Q16
Net Revenue $317.4 $295 to $310 $308.5 $267.0 18.9% 2.9%
Adjusted Gross Margin 44.0% 42.7% 43.0%
Non-GAAP Operating Expenses2 $77.7 $76.0 $73.9 5.1% 2.2%
Adjusted Operating Income $61.9 $55.8 $40.8 51.7% 10.9%
Adjusted Operating Margin 19.5% 18.1% 15.3%
Non-GAAP Tax Rate3 22.5% 24.7% 26.8%
Non-GAAP Net Income $40.8 $32 to $38 $34.3 $23.6 72.9% 19.0%
Non-GAAP EPS $0.28 $0.23 to $0.27 $0.24 $0.17 64.7% 16.7%
5
1. See GAAP to Non-GAAP reconciliation tables in the appendix of this presentation.
2. Non-GAAP Operating Expenses exclude amortization expense.
3. Non-GAAP Tax Rate reflects the tax effect of non-GAAP adjustments and discrete tax items to GAAP taxes.
SUMMARY – CONSOLIDATED STATEMENT OF OPERATIONS (NON-GAAP)1
6
1. See Reconciliation of GAAP Net Income to Non-GAAP Earnings per Share in the appendix of this presentation.
DILUTED EARNINGS PER SHARE1
$0.18
$0.23 $0.24
$0.28
$0.00
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
4Q16 1Q17
Diluted EPS: 1Q17 vs. 4Q16
GAAP Non-GAAP
$0.68
$0.80
$0.94
$1.05
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
4Q16 1Q17
Diluted EPS: Trailing 4 Quarters
GAAP Non-GAAP
RESULTS BY SEGMENT1
7
1. Adjusted segment operating margin excludes amortization of intangibles and unallocated expenses.
2. Segment profit for SCEM for 3Q16 includes a charge for severance related to organizational realignment of $699.
3. Segment profit for MC for 3Q16 includes a charge for severance related to organizational realignment of $737.
4. Segment profit for AMH for 3Q16 includes charges for impairment of equipment and severance related to organizational realignment totaling $6,795.
10%
15%
20%
25%
30%
$0
$20
$40
$60
$80
$100
$120
$140
1Q16 2Q16 3Q16 4Q16 1Q17
Specialty Chemicals and
Engineered Materials
Segment2
Sales Adj. Op. margin
10%
15%
20%
25%
30%
35%
40%
$0
$20
$40
$60
$80
$100
$120
1Q16 2Q16 3Q16 4Q16 1Q17
Microcontamination
Control Segment3
Sales Adj. Op. margin
10%
15%
20%
25%
30%
$50
$60
$70
$80
$90
$100
$110
1Q16 2Q16 3Q16 4Q16 1Q17
Advanced Materials
Handling Segment4
Sales Adj. Op. margin
REVENUE BY GEOGRAPHY: STRONG GROWTH IN ASIA AND EUROPE
8
N. America
Asia
Japan
Europe
1Q17 Revenue by Geography
1Q17 Revenue = $317.4 million
2%
32%
1%
16%
N. America
Asia
Japan
Europe
0% 10% 20% 30% 40%
1Q17 vs. 1Q16 Growth Rate
$30.9M
$185.7M
$65.3M
$35.4M
$ in millions 1Q17 4Q16 1Q16
$ Amount % Total $ Amount % Total $ Amount % Total
Cash & Cash Equivalents $391.2 23.1% $406.4 23.9% $344.4 20.8%
Accounts Receivable, net $176.0 10.4% $165.7 9.7% $149.8 9.1%
Inventories $188.3 11.1% $183.5 10.8% $184.0 11.1%
Net PP&E $330.9 19.5% $321.6 18.9% $322.7 19.5%
Total Assets $1,696.1 $1,699.5 $1,653.8
Current Liabilities1 $236.2 13.9% $261.6 15.4% $161.7 9.8%
Long-term debt, excluding
current maturities
$460.3 27.1% $484.7 28.5% $606.6 36.7%
Total Liabilities $751.0 44.3% $800.3 47.1% $832.0 50.3%
Total Shareholders’ Equity $945.1 55.7% $899.2 52.9% $821.8 49.7%
AR - DSOs 50.6 49.0 51.2
Inventory Turns 3.8 3.8 3.4
9
1. Current Liabilities in 1Q17, 4Q16 and 4Q15 includes $100 million of current maturities of long term debt, respectively.
SUMMARY – BALANCE SHEET ITEMS
10
1. See Reconciliation of GAAP Income to Adjusted Operating Income and Adjusted EBITDA in the appendix of this presentation.
ADJUSTED EBITDA MARGIN1
$231M
$285M 21.3%
23.2%
0
0.05
0.1
0.15
0.2
0
50
100
150
200
250
300
TTM- 1Q16 TTM-1Q17
Adjusted EBITDA TTM
Adj. EBITDA in $M Adj. EBITDA as % of Sales
$70M
$76M
22.7% 23.9%
0
0.05
0.1
0.15
0.2
0
10
20
30
40
50
60
70
80
90
4Q16 1Q17
Adjusted EBITDA
Adj. EBITDA in $M Adj. EBITDA as % of Sales
$ in millions 1Q17 4Q16 1Q16
Beginning Cash Balance $406.4 $411.8 $349.8
Cash from operating activities 33.4 57.1 17.3
Capital expenditures (22.2) (20.0) (17.8)
Payments on long-term debt (25.0) (25.0) -
Other investing activities 0.2 0.1 (2.5)
Other financing activities (7.8) (3.2) (5.6)
Effect of exchange rates 6.1 (14.3) 3.1
Ending Cash Balance $391.2 $406.4 $344.4
Free Cash Flow1 $11.2 $37.1 $(0.5)
Adjusted EBITDA $75.8 $70.1 $54.5
CASH FLOWS
11
1. Free cash flow equals cash from operations less capital expenditures.
OUTLOOK
12
1. Non-GAAP operating expenses exclude amortization. In 2Q17, amortization is estimated to be approximately $11 million, or $0.05 per share.
$ in millions, except per share data 2Q17 Guidance 1Q17 2Q16
Net Revenue $315 to $330 $317.4 $303.1
Gross Margin 44.0% 45.9%
Operating Expenses $90 to $92 $88.7 $92.8
Net Income $32 to $37 $32.5 $32.9
EPS $0.22 to $0.26 $0.23 $0.23
$ in millions, except per share data 2Q17 Guidance 1Q17 2Q16
Net Revenue $315 to $330 $317.4 $303.1
Gross Margin 44.0% 45.9%
Non-GAAP Operating Expenses1 $79 to $81 $77.7 $81.7
Non-GAAP Net Income $39 to $44 $40.8 $40.3
Non-GAAP EPS $0.27 to $0.31 $0.28 $0.28
Non-GAAP
GAAP
Entegris®, the Entegris Rings Design™ and Pure Advantage™ are trademarks of Entegris, Inc. ©2016 Entegris, Inc. All rights reserved.
13
14
APPENDIX: NON-GAAP RECONCILIATION TABLES
NON-GAAP RECONCILIATION TABLE
RECONCILIATION OF GAAP TO ADJUSTED OPERATING INCOME AND ADJUSTED EBITDA
15
Three months ended
April 1, 2017 April 2, 2016
December 31,
2016
Net sales $317,377 $267,024 $308,502
Net income $32,514 $16,212 $26,098
Adjustments to net income:
Income tax expense 9,111 4,873 8,521
Interest expense, net 8,393 9,149 8,983
Other expense (income), net 902 (675) 1,303
GAAP - Operating income 50,920 29,559 44,905
Amortization of intangible assets 10,945 11,289 10,938
Adjusted operating income 61,865 40,848 55,843
Depreciation 13,977 13,700 14,303
Adjusted EBITDA $75,842 $54,548 $70,146
Adjusted operating margin 19.5% 15.3% 18.1%
Adjusted EBITDA - as a % of net sales 23.9% 20.4% 22.7%
$ in thousands (unaudited)
NON-GAAP RECONCILIATION TABLE
RECONCILIATION OF GAAP TO NON-GAAP EARNINGS PER SHARE
16
17
GAAP SEGMENT TREND DATA
Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117
Sales
SCEM 99,897$ 110,569$ 105,285$ 103,127$ 101,107$ 111,782$ 104,494$ 110,945$ 114,435$
MC 75,947 79,293 78,485 82,092 77,619 91,584 94,738 98,717 100,055
AMH 87,529 90,847 86,483 81,567 88,298 99,686 97,460 98,840 102,887
Total Sales 263,373$ 280,709$ 270,253$ 266,786$ 267,024$ 303,052$ 296,692$ 308,502$ 317,377$
Segment Profit
SCEM 22,010$ 30,826$ 23,316$ 24,218$ 22,416$ 28,914$ 18,811$ 25,919$ 28,140$
MC 19,874 20,605 21,926 20,671 18,140 28,566 31,617 31,719 35,581
AMH 19,679 20,860 15,786 10,094 18,911 22,519 15,378 16,644 18,276
Total Segment Profit 61,563$ 72,291$ 61,028$ 54,983$ 59,467$ 79,999$ 65,806$ 74,282$ 81,997$
NON-GAAP SEGMENT TREND DATA
18
1 Adjusted segment profit for SCEM for Q316 excludes charges for severance related to organizational realignment of $699.
2 Adjusted segment profit for MC for Q316 excludes charges for severance related to organizational realignment of $737.
3 Adjusted segment profit for AMH for Q316 excludes charges for impairment of equipment and severance related to organizational realignment of $5,826 and $969, respectively.
Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117
Sales
SCEM 99,897$ 110,569$ 105,285$ 103,127$ 101,107$ 111,782$ 104,494$ 110,945$ 114,435$
MC 75,947 79,293 78,485 82,092 77,619 91,584 94,738 98,717 100,055
AMH 87,529 90,847 86,483 81,567 88,298 99,686 97,460 98,840 102,887
Total Sales 263,373$ 280,709$ 270,253$ 266,786$ 267,024$ 303,052$ 296,692$ 308,502$ 317,377$
Adjusted Segment Profit
SCEM1 22,010$ 30,826$ 23,316$ 24,218$ 22,416$ 28,914$ 19,510$ 25,919$ 28,140$
MC2 19,874 20,605 21,926 20,671 18,140 28,566 32,354 31,719 35,581
AMH3 19,679 20,860 15,786 10,094 18,911 22,519 22,173 16,644 18,276
Total Adj. Segment Profit 61,563$ 72,291$ 61,028$ 54,983$ 59,467$ 79,999$ 74,037$ 74,282$ 81,997$