Document


 
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) October 25, 2018
 
 _______________________________________
 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))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company                    ☐
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.  ☐
 





Item 2.02.    Results of Operations and Financial Condition.
On October 25, 2018, Entegris, Inc. (the "Company") issued a press release to announce results for the third quarter of 2018, ended September 29, 2018, 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
 
99.2
 
 






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: October 25, 2018            
By: /s/ Gregory B. Graves            
Name: Gregory B. Graves
Title: Executive Vice President and Chief Financial Officer







EXHIBIT INDEX
     
Exhibit
No.
 
Description
99.1
 
99.2
 
 




Exhibit
      http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12511011&doc=4
 
 
PRESS RELEASE

Bill Seymour
VP of Investor Relations
T + 1 978 436 6500
irelations@entegris.com


Exhibit 99.1
FOR RELEASE AT 6:00 AM EST

ENTEGRIS REPORTS SOLID RESULTS IN THIRD QUARTER OF 2018

Record third-quarter revenue of $398.6 million grew 15% from prior year
GAAP net income per diluted share of $0.34 increased 21% from a year ago
Non-GAAP net income per diluted share of $0.46 increased 15% from a year ago

BILLERICA, Mass., October 25, 2018 - 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 29, 2018.
Third-quarter sales were $398.6 million, an increase of 15% from the same quarter last year and a 4% increase sequentially. Third-quarter net income was $48.1 million, or $0.34 per diluted share, which included $21.4 million of amortization of intangible assets, a $3.3 million charge for fair value write-up of acquired inventory sold, a $2.6 million net tax effect related to the Tax Cuts and Jobs Act, $0.8 million of integration costs and transaction expenses associated with the purchase of SAES Pure Gas and $0.5 million of a loss on the sale of a cleaning services business based in France. Non-GAAP net income of $65.6 million, or $0.46 per diluted share, both increased 15%, compared to the third quarter of 2017.
For the first nine months of fiscal 2018, sales of $1.1 billion increased 16% from the same period a year ago. For the first nine months of 2018, net income was $160.0 million, or $1.12 per share, which included $45.1 million of amortization of intangible assets, a $0.4 million net tax effect related to the Tax Cuts and Jobs Act, $7.1 million of integration costs and transaction expenses associated with the purchase of SAES Pure Gas, a $3.5 million charge for fair value write-up of acquired inventory sold, and $0.5 million of a loss on the sale of a cleaning services business based in France. Non-GAAP net income for the first nine months of 2018 of $203.5 million, or $1.42 per diluted share, both increased 39% compared to the first nine months of 2017.
Bertrand Loy, president and chief executive officer, said: "In the third quarter we demonstrated the value and resilience of our broad unit driven business platform, as we achieved record sales and delivered solid performance in a mixed environment. Our recent acquisition of SAES Pure Gas is performing well and its sales have exceeded our expectations during the quarter, reflecting key secular demand drivers for higher process purity."

Mr. Loy added:  "Our unique capability to address the industry's increasing materials complexity and purity challenges is driving our long-term growth prospects and our ability to outperform the market. For the full year 2018 we expect to leverage our sales growth of approximately 15 percent into growth of our non-GAAP earnings per share of approximately 30 percent."





_________________________________________________________________________
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
Q3-2018
Q3-2017
Q2-2018
Net sales
$398,597
$345,591
$383,059
Operating income
$67,975
$60,655
$74,933
Operating margin
17.1
%
17.6
%
19.6
%
Net income
$48,060
$40,902
$54,349
Diluted earnings per share (EPS)
$0.34
$0.28
$0.38
Non-GAAP Results
Non-GAAP adjusted operating income
$93,893
$81,077
$93,473
Non-GAAP adjusted operating margin
23.6
%
23.5
%
24.4
%
Non-GAAP net income
$65,621
$56,989
$69,835
Non-GAAP EPS
$0.46
$0.40
$0.49
Fourth-Quarter Outlook
For the fourth quarter ending December 31, 2018, the Company expects sales of $380 million to $400 million, net income of $43 million to $53 million and net income per diluted share between $0.30 and $0.37. On a non-GAAP basis, EPS is expected to range from $0.41 to $0.48 per diluted share, which reflects net income on a non-GAAP basis in the range of $59 million to $69 million, which is adjusted for expected amortization and integration expenses of approximately $21 million, or $0.11 per share.
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 and substrates for a broad set of applications in the semiconductor industry and other high-technology industries.
Third-Quarter Results Conference Call Details
Entegris will hold a conference call to discuss its results for the third quarter on Thursday, October 25, 2018, at 9:00 a.m. Eastern Time. Participants should dial 888-204-4368 or +1 323-794-2423, referencing confirmation code 1918715. 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 1918715. The replay will be available starting at 12:00 p.m. ET on Thursday, October 25 through December 8, 2018 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.


Entegris, Inc. | page 2 of 12


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 (Loss) to Adjusted Operating Income and Adjusted EBITDA, and GAAP Net Income (Loss) to Non-GAAP Earnings per Share 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,” “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 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; our performance relative to our markets; market and technology trends; the development of new products and the success of their introductions; 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 our capital allocation strategy; the impact of the acquisitions we have made and commercial partnerships we have established; our ability to execute on our strategies; and other matters. These statements involve risks and uncertainties, and actual results may differ. 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, 2017, filed on February 15, 2018, and in our 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. | page 3 of 12


Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
 
 
Three months ended
 
 
September 29, 2018
September 30, 2017
June 30, 2018
Net sales
$398,597
$345,591
$383,059
Cost of sales
216,881

190,184

200,681

 
Gross profit
181,716

155,407

182,378

Selling, general and administrative expenses
62,358

57,699

65,200

Engineering, research and development expenses
29,964

26,002

30,231

Amortization of intangible assets
21,419

11,051

12,014

 
Operating income
67,975

60,655

74,933

Interest expense, net
7,678

7,599

6,925

Other expense, net
810

2,906

3,877

 
Income before income tax expense
59,487

50,150

64,131

Income tax expense
11,427

9,248

9,782

 
Net income
$48,060
$40,902
$54,349
 
 
 
 
 
 
 
 
Basic net income per common share:
$0.34
$0.29
$0.38
Diluted net income per common share:
$0.34
$0.28
$0.38
Cash dividends declared per common share:
$0.07

$0.07
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
Basic
141,556

141,684

141,701

 
Diluted
143,033

143,594

143,238



Entegris, Inc. | page 4 of 12


Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
 
 
Nine months ended
 
 
September 29, 2018
September 30, 2017
Net sales
$1,148,855
$991,970
Cost of sales
608,764

546,664

 
Gross profit
540,091

445,306

Selling, general and administrative expenses
185,827

161,176

Engineering, research and development expenses
87,781

80,462

Amortization of intangible assets
45,102

33,003

 
Operating income
221,381

170,665

Interest expense, net
21,829

24,095

Other expense, net
4,826

3,762

 
Income before income tax expense
194,726

142,808

Income tax expense
34,755

29,401

 
Net income
$159,971
$113,407
 
 
 
 
 
 
Basic net income per common share:
$1.13
$0.80
Diluted net income per common share:
$1.12
$0.79
Cash dividends declared per common share:
$0.21

 
 
 
 
Weighted average shares outstanding:
 
 
 
Basic
141,613

141,627

 
Diluted
143,308

143,472



Entegris, Inc. | page 5 of 12


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

 
September 29, 2018
December 31, 2017
ASSETS
 
 
Cash and cash equivalents
$294,893
$625,408
Accounts receivable, net
212,729

183,434

Inventories
264,090

198,089

Deferred tax charges and refundable income taxes
25,191

18,012

Other current assets
24,043

32,665

      Total current assets
820,946

1,057,608

 
 
 
Property, plant and equipment, net
393,706

359,523

 
 
 
Goodwill
542,235

359,688

Intangible assets
323,379

182,430

Deferred tax assets
11,735

9,103

Other assets
11,455

7,820

      Total assets
$2,103,456
$1,976,172
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
Long-term debt, current maturities

$100,000
Accounts payable
74,590

68,762

Accrued liabilities
116,285

99,374

Income tax payable
20,137

22,835

      Total current liabilities
211,012

290,971

 
 
 
Long-term debt, excluding current maturities
650,625

574,380

Other liabilities
158,148

117,803

Shareholders’ equity
1,083,671

993,018

      Total liabilities and shareholders’ equity
$2,103,456
$1,976,172


Entegris, Inc. | page 6 of 12


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

 
Three months ended
Nine months ended
 
September 29, 2018
September 30, 2017
September 29, 2018
September 30, 2017
Operating activities:
 
 
 
 
Net income
$48,060
$40,902
$159,971
$113,407
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation
16,537

14,785

48,236

43,173

Amortization
21,419

11,051

45,102

33,003

Stock-based compensation expense
4,170

3,548

12,727

11,457

Provision for deferred income taxes
691

(2,953
)
(1,066
)
254

Other
5,944

13,898

10,584

24,028

Changes in operating assets and liabilities:
 
 
 
 
Trade accounts and notes receivable
(11,400
)
(12,313
)
(8,713
)
(15,345
)
Inventories
(6,316
)
(1,047
)
(28,788
)
(14,884
)
Accounts payable and accrued liabilities
5,526

20,911

(9,440
)
7,598

Income taxes payable and refundable income taxes
(1,678
)
(1,293
)
(9,193
)
1,664

Other
1,190

1,552

1,829

3,277

Net cash provided by operating activities
84,143

89,041

221,249

207,632

Investing activities:
 
 
 
 
Acquisition of property and equipment
(27,900
)
(25,447
)
(75,337
)
(67,939
)
Acquisition of businesses, net of cash acquired
(43
)


(380,268
)
(20,000
)
Other
3,109

863

5,014

1,074

Net cash used in investing activities
(24,834
)
(24,584
)
(450,591
)
(86,865
)
Financing activities:
 
 
 
 
Payments on long-term debt

(25,000
)
(27,000
)
(75,000
)
Issuance of common stock
2

677

3,029

3,582

Taxes paid related to net share settlement of equity awards
(139
)
(168
)
(14,552
)
(5,407
)
Repurchase and retirement of common stock
(10,000
)
(10,000
)
(30,000
)
(18,000
)
Dividend payments
(9,899
)

(29,701
)

Other
(250
)


1,254

(1,270
)
Net cash used in financing activities
(20,286
)
(34,491
)
(96,970
)
(96,095
)
Effect of exchange rate changes on cash
(1,236
)
(404
)
(4,203
)
4,136

Increase (Decrease) in cash and cash equivalents
37,787

29,562

(330,515
)
28,808

Cash and cash equivalents at beginning of period
257,106

405,635

625,408

406,389

Cash and cash equivalents at end of period
$294,893
$435,197
$294,893
$435,197


Entegris, Inc. | page 7 of 12


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

 
Three months ended
Nine months ended
Net sales
September 29, 2018
September 30, 2017
June 30, 2018
September 29, 2018
September 30, 2017
Specialty Chemicals and Engineered Materials
$131,234
$124,522
$134,336
$396,313
$360,131
Microcontamination Control
151,345

116,113

124,681

394,663

320,575

Advanced Materials Handling
116,018

104,956

124,042

357,879

311,264

     Total net sales
$398,597
$345,591
$383,059
$1,148,855
$991,970

 
Three months ended
Nine months ended
Segment profit1
September 29, 2018
September 30, 2017
June 30, 2018
September 29, 2018
September 30, 2017
Specialty Chemicals and Engineered Materials
$31,860
$29,539
$37,316
$100,738
$81,727
Microcontamination Control
44,530

39,302

39,054

125,575

102,085

Advanced Materials Handling
19,494

12,483

23,114

65,750

41,612

Total segment profit
95,884

81,324

99,484

292,063

225,424

Amortization of intangibles
21,419

11,051

12,014

45,102

33,003

Unallocated expenses
6,490

9,618

12,537

25,580

21,756

    Total operating income
$67,975
$60,655
$74,933
$221,381
$170,665


1Beginning in the first quarter of 2018, the Company has changed its definition of segment profit to include an allocation of certain general and administrative costs for the Company’s human resources, finance and information technology functions previously unallocated by the Company. Prior quarter information was recast to reflect the change in the Company's definition of segment profit.


Entegris, Inc. | page 8 of 12


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

 
Three months ended
 
Nine months ended
 
September 29, 2018
September 30, 2017
June 30, 2018
 
September 29, 2018
September 30, 2017
Net sales
$398,597
$345,591
$383,059
 
$1,148,855
$991,970
Gross profit-GAAP
$181,716
$155,407
$182,378
 
$540,091
$445,306
Adjustments to gross profit:
 
 
 
 
 
 
Severance related to organizational realignment

740


 

740

Charge for fair value mark-up of acquired inventory sold
3,281


208

 
3,489

Impairment of equipment

3,364


 

5,330

Adjusted gross profit
$184,997
$159,511
$182,586
 
$543,580
$451,376
 
 
 
 
 
 
 
Gross margin - as a % of net sales
45.6
%
45.0
%
47.6
%
 
47.0
%
44.9
%
Adjusted gross margin - as a % of net sales
46.4
%
46.2
%
47.7
%
 
47.3
%
45.5
%


Entegris, Inc. | page 9 of 12


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

 
Three months ended
Nine months ended
Segment profit-GAAP
September 29, 2018
September 30, 2017
June 30, 2018
September 29, 2018
September 30, 2017
Specialty Chemicals and Engineered Materials
$31,860
$29,539
$37,316
$100,738
$81,727
Microcontamination Control
44,530

39,302

39,054

125,575

102,085

Advanced Materials Handling
19,494

12,483

23,114

65,750

41,612

Total segment profit
95,884

81,324

99,484

292,063

225,424

Amortization of intangible assets
21,419

11,051

12,014

45,102

33,003

Unallocated expenses
6,490

9,618

12,537

25,580

21,756

    Total operating income
$67,975
$60,655
$74,933
$221,381
$170,665

 
Three months ended
Nine months ended
Adjusted segment profit
September 29, 2018
September 30, 2017
June 30, 2018
September 29, 2018
September 30, 2017
Specialty Chemicals and Engineered Materials1
$31,860
$29,553
$37,316
$100,738
$81,741
Microcontamination Control 2
47,811

39,498

39,262

129,064

103,724

Advanced Materials Handling 3
19,960

17,704

23,114

66,216

49,119

Total adjusted segment profit
99,631

86,755

99,692

296,018

234,584

Amortization of intangible assets4





Unallocated expenses5
5,738

5,678

6,219

18,510

17,816

    Total adjusted operating income
$93,893
$81,077
$93,473
$277,508
$216,768

1Adjusted segment profit for Specialty Chemicals and Engineered Materials for the three months and nine months ended September 30, 2017 excludes charges for severance related to organizational realignment of $14.
2Adjusted segment profit for Microcontamination Control for the three months ended September 29, 2018 and June 30, 2018 excludes charges for fair value mark-up of acquired inventory sold of $3,281 and $208, respectively. Adjusted segment profit for Microcontamination Control for the nine months ended September 29, 2018 excludes charges for fair value mark-up of acquired inventory sold of $3,489. Adjusted segment profit for Microcontamination Control excludes charges for impairment of equipment and severance related to organizational realignment of $196 and $1,639 for the three and nine months ended September 30, 2017, respectively.
3 Adjusted segment profit for Advanced Material Handling excludes loss on sale of subsidiary of $466 for the three and nine months ended September 29, 2018, respectively. Adjusted segment profit for Advanced Material Handling excludes charges for impairment of equipment and severance related to organizational realignment of $5,221 and $7,507 for the three and nine months ended September 30, 2017, respectively.
4 Adjusted amortization of intangible assets excludes amortization expense of $21,419, $11,051 and $12,014 for the three months ended September 29, 2018, September 30, 2017, and June 30, 2018, respectively and $45,102 and $33,003 for the nine months ended September 29, 2018 and September 30, 2017, respectively.
5 Adjusted unallocated expenses for the three months ended September 29, 2018 exclude integration expenses of $752. Adjusted unallocated expenses for the three months ended June 30, 2018 exclude deal costs and integration expenses of $5,121 and $1,197, respectively.
Adjusted unallocated expenses for the nine months ended September 29, 2018 exclude deal costs and integration expenses of $5,121 and $1,949, respectively. Adjusted unallocated expenses excludes charges for impairment of intangibles and severance related to organizational realignment of $3,940 for the three and nine months ended September 30, 2017, respectively.







Entegris, Inc. | page 10 of 12


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 29, 2018
September 30, 2017
June 30, 2018
 
September 29, 2018
September 30, 2017
Net sales
$398,597
$345,591
$383,059
 
$1,148,855
$991,970
Net income
$48,060
$40,902
$54,349
 
$159,971
$113,407
Adjustments to net income:
 
 
 
 
 
 
Income tax expense
11,427
9,248
9,782
 
34,755
29,401
Interest expense, net
7,678
7,599
6,925
 
21,829
24,095
Other expense, net
810
2,906
3,877
 
4,826
3,762
GAAP - Operating income
67,975
60,655
74,933
 
221,381
170,665
Charge for fair value write-up of acquired inventory sold
3,281


208

 
3,489

Deal Costs


5,121

 
5,121

Integration Costs
752


1,197

 
1,949

Severance

2,141


 

2,700

Impairment of equipment and intangibles1 

7,230


 

10,400

Loss on sale of subsidiary
466



 
466


Amortization of intangible assets
21,419
11,051
12,014
 
45,102
33,003
Adjusted operating income
93,893
81,077
93,473
 
277,508
216,768
Depreciation
16,537
14,785
15,802
 
48,236
43,173
Adjusted EBITDA
$110,430
$95,862
$109,275
 
$325,744
$259,941
 
 
 
 
 
 
 
Adjusted operating margin
23.6
%
23.5
%
24.4
%
 
24.2
%
21.9
%
Adjusted EBITDA - as a % of net sales
27.7
%
27.7
%
28.5
%
 
28.4
%
26.2
%

1 Includes product line impairment charges of $3,364 and $5,330 classified as cost of sales for the three and nine months ended September 30, 2017, respectively.

Includes Jetalon intangible impairment charge of $3,866 classified as selling general and administrative expense for both the three and nine months ended September 30, 2017.

Includes product line impairment charge of $320 classified as selling general and administrative expense for the nine months ended September 30, 2017.

Includes product line impairment charge of $884 classified as engineering, research and development expense for the nine months ended September 30, 2017.


Entegris, Inc. | page 11 of 12


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
 
Nine months ended
 
September 29, 2018
September 30, 2017
June 30, 2018
 
September 29, 2018
September 30, 2017
GAAP net income
$48,060
$40,902
$54,349
 
$159,971
$113,407
Adjustments to net income:
 
 
 
 
 
 
Charge for fair value write-up of acquired inventory sold

3,281


208

 
3,489


Deal Costs


5,121

 
5,121


Integration Costs
752


1,197

 
1,949


Severance

2,141


 

2,700

Impairment of equipment and intangibles1

10,030


 

13,200

Loss on sale of subsidiary
466



 
466


Amortization of intangible assets
21,419

11,051

12,014

 
45,102

33,003

Tax effect of adjustments to net income and discrete items2
(5,797
)
(7,135
)
(3,702
)
 
(12,209
)
(15,661
)
Tax effect of Tax Cuts and Jobs Act
(2,560
)

$648
 
(418
)

Non-GAAP net income
$65,621
$56,989
$69,835
 
$203,471
$146,649
 
 
 
 
 
 
 
Diluted earnings per common share
$0.34
$0.28
$0.38
 
$1.12
$0.79
Effect of adjustments to net income
$0.12
$0.11
$0.11
 
$0.30
$0.23
Diluted non-GAAP earnings per common share
$0.46
$0.40
$0.49
 
$1.42
$1.02

1 Includes product line impairment charges of $3,364 and $5,330 classified as cost of sales for the three and nine months ended September 30, 2017, respectively.

Includes Jetalon intangible impairment charge of $3,866 classified as selling general and administrative expense for both the three and nine months ended September 30, 2017.

Includes product line impairment charge of $320 classified as selling general and administrative expense for the nine months ended September 30, 2017.

Includes product line impairment charge of $884 classified as engineering, research and development expense for the nine months ended September 30, 2017.

Includes product line impairment charge of $2,800 classified as other expense for both the three and nine months ended September 30, 2017.
2The tax effect of pre-tax adjustments to net income was calculated using the applicable marginal tax rate during the respective years.


### END ###

Entegris, Inc. | page 12 of 12
entegrisslides3q18ex992
EXHIBIT 99.2 Earnings Summary Third Quarter 2018 October 25, 2018


 
SAFE HARBOR This presentation contains, and management may make, 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 statements related to future period guidance; projected 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, including the duration and drivers of any growth trends; the development of new products and the success of their introductions; the focus of our engineering, research and development projects; our business strategies; our 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 our capital allocation strategy; the Company’s expected tax rate; the impact of the acquisitions we have made and commercial partnerships we have established; and other matters. These statements involve risks and uncertainties, and actual results may differ. 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 ability to execute on our strategies; 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, 2017, filed on February 15, 2018, and in our other periodic filings. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates. This presentation contains references to “Adjusted EBITDA,” “Adjusted EBITDA Margin,” “Adjusted Operating Income,” “Adjusted Operating Income Margin,” “Adjusted Gross Profit” and “Non-GAAP Earnings per Share” that are not presented in accordance GAAP. The non-GAAP financial measures should not be considered in isolation or as a substitute for GAAP financial measures but should instead be read in conjunction with the GAAP financial measures. Further information with respect to and reconciliations of such measures to the most directly comparable GAAP financial measure can be found attached to this presentation. 2


 
3Q18 HIGHLIGHTS Year-to-date1 sales of $1.1 billion million grew 16% from the same period in 2017 3Q18 sales of $399 million grew 15% from same quarter a year ago and 4% from 2Q18 Specialty Chemicals and Engineered Materials sales grew 5% from prior year and declined 2% sequentially Microcontamination Control sales grew 30% from prior year and 21% sequentially (includes $29 million in sales from SAES Pure Gas (SPG)) Advanced Materials Handling sales grew 11% from prior year and declined 6% sequentially Integration of SAES Pure Gas (SPG) is proceeding well, sales exceeded expectations 3Q18 GAAP and non-GAAP tax rate of 19% and 23%, higher than expectations (equal to approximately 2 cents per share) Year-to-date1 GAAP Earnings Per Share of $1.12; non-GAAP EPS of $1.42 grew 39% from the prior year 3Q18 GAAP Earnings Per Share of $0.34; non-GAAP EPS of $0.46 grew 15% from the prior year Generated $110 million of adjusted EBITDA, or 28% of sales 3 1. First nine months of fiscal 2018.


 
SUMMARY – CONSOLIDATED STATEMENT OF OPERATIONS (GAAP) $ in millions, except per share 3Q18 3Q18 over 3Q18 over data 3Q18 Guidance 2Q18 3Q17 3Q17 2Q18 Net Revenue $398.6 $395 to $410 $383.1 $345.6 15.3% 4.0% Gross Margin 45.6% 47.6% 45.0% Operating Expenses $113.7 $108 to $110 $107.4 $94.8 19.9% 5.9% Operating Income $68.0 $74.9 $60.7 12.0% (9.2%) Operating Margin 17.1% 19.6% 17.6% Tax Rate 19.2% 15.3% 18.4% Net Income $48.1 $52 to $59 $54.3 $40.9 17.6% (11.4%) Earnings per diluted share $0.34 $0.36 to $0.41 $0.38 $0.28 21.4% (10.5%) 4


 
SUMMARY – CONSOLIDATED STATEMENT OF OPERATIONS (NON-GAAP)1 $ in millions, except per share 3Q18 3Q18 over 3Q18 over data 3Q18 Guidance 2Q18 3Q17 3Q17 2Q18 Net Revenue $398.6 $395 to $410 $383.1 $345.6 15.3% 4.0% Adjusted Gross Margin2 46.4% 47.7% 46.2% Non-GAAP Operating $91.1 $89.1 $78.4 16.2% 2.2% Expenses3 $90 to $92 Adjusted Operating Income $93.9 $93.5 $81.1 15.8% 0.4% Adjusted Operating Margin 23.6% 24.4% 23.5% Non-GAAP Tax Rate4 23.2% 15.5% 22.3% Non-GAAP Net Income5 $65.6 $66 to $73 $69.8 $57.0 15.1% (6.0%) Non-GAAP EPS $0.46 $0.46 to $0.51 $0.49 $0.40 15.0 % (6.1%) 1. See GAAP to Non-GAAP reconciliation tables in the appendix of this presentation. 2. Adjusted Gross Margin excludes charge for fair value write-up of acquired inventory sold. 3. Non-GAAP Operating Expenses exclude amortization expense, deal costs, integration costs, severance, loss on sale of subsidiary, and impairment of equipment and intangibles. 4. Non-GAAP Tax Rate reflects the tax effect of non-GAAP adjustments and discrete tax items to GAAP taxes. 5 5. Non-GAAP Net Income excludes amortization expense, the tax effect of non-GAAP adjustments and discrete tax items to GAAP taxes.


 
SUMMARY – CONSOLIDATED STATEMENT OF OPERATIONS (GAAP) – YEAR TO DATE Nine Months Nine Months Ended Ended $ in millions, except per share September 29, September 30, data 2018 2017 Year-over-Year Net Revenue $1,148.9 $992.0 15.8% Gross Margin 47.0% 44.9% Operating Expenses $318.7 $274.6 16.1% Operating Income $221.4 $170.7 29.7% Operating Margin 19.3% 17.2% Tax Rate 17.8% 20.6% Net Income $160.0 $113.4 41.1% EPS $1.12 $0.79 41.8% 6


 
SUMMARY – CONSOLIDATED STATEMENT OF OPERATIONS (NON-GAAP) – YEAR TO DATE1 Nine Months Nine Months Ended Ended $ in millions, except per share September 29, September 30, data 2018 2017 Year-over-Year Net Revenue $1,148.9 $992.0 15.8% Adjusted Gross Margin2 47.3% 45.5% Non-GAAP Operating Expenses3 $266.1 $234.6 13.4% Adjusted Operating Income $277.5 $216.8 28.0% Adjusted Operating Margin 24.2% 21.9% Non-GAAP Tax Rate4 18.9% 23.5% Non-GAAP Net Income5 $203.5 $146.6 38.8% Non-GAAP EPS $1.42 $1.02 39.2% 1. See GAAP to Non-GAAP reconciliation tables in the appendix of this presentation. 2. Adjusted Gross Margin excludes charge for fair value write-up of acquired inventory sold. 3. Non-GAAP Operating Expenses exclude amortization expense, deal costs, integration costs, severance, loss on sale of subsidiary, and impairment of equipment and intangibles. 4. Non-GAAP Tax Rate reflects the tax effect of non-GAAP adjustments and discrete tax items to GAAP taxes. 5. Non-GAAP Net Income excludes amortization expense, the tax effect of non-GAAP adjustments and discrete tax items to GAAP taxes. 7


 
EARNINGS PER SHARE1 EPS: 3Q18 vs. 3Q17 EPS: 3Q18 vs. 2Q18 $0.49 $0.50 $0.50 $0.46 $0.46 $0.45 $0.45 $0.40 $0.40 $0.40 $0.38 $0.34 $0.34 $0.35 $0.35 $0.30 $0.28 $0.30 $0.25 $0.25 $0.20 $0.20 $0.15 $0.15 $0.10 $0.10 $0.05 $0.05 $0.00 $0.00 3Q17 3Q18 2Q18 3Q18 GAAP Non-GAAP GAAP Non-GAAP 1. Represents diluted earnings per share. See Reconciliation of GAAP Net Income to Non-GAAP Earnings per Share in the appendix of this presentation. 8


 
RESULTS BY SEGMENT1 Specialty Chemicals Microcontamination Advanced and Engineered Control Segment3 Materials Handling 2 Materials Segment Segment4 $ in millions 40% 40% 40% $150 $150 $150 $120 30% $120 30% $120 30% $90 $90 $90 20% 20% 20% $60 $60 $60 10% 10% 10% $30 $30 $30 $0 0% $0 0% 3Q17 4Q17 1Q18 2Q18 3Q18 $0 0% 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18 Sales Adj. Op. margin Sales Adj. Op. margin Sales Adj. Op. margin 1.Adjusted segment operating margin excludes amortization of intangibles and unallocated expenses. Corporate cost related to HR, Finance, and IT are charged back to the Segments starting 1Q18. Prior quarter results are adjusted retrospectively using consistent allocation method. 2.Segment profit for SCEM for 3Q17 includes a charge for severance of $14K. 3.Segment profit for MC for Q317 includes a charge for severance of $196K. Segment profit for MC for Q318 and Q218 excludes charges for fair value mark- up of acquired inventory sold of $3,281K and $208K, respectively. 4.Segment profit for AMH for 3Q17 includes charges for impairment of equipment and severance totaling $5,221K. Segment profit for AMH excludes loss on sale of subsidiary of $466K for Q318. 9


 
REVENUE BY GEOGRAPHY: STRONG GROWTH IN N. AMERICA, KOREA, JAPAN, CHINA AND EUROPE YTD18 Revenue by Geography YTD18 vs. YTD17 Growth Rate Revenue = $1,148.9 million Taiwan -5% Taiwan N. America 20% N. America $211.1M South Korea 19% $255.8M Southeast Japan 32% Asia $87.0M $104.2M China 37% Europe $187.3M Europe 17% $157.9M South Southeast Asia 4% $145.6M Korea Japan China -15% -5% 5% 15% 25% 35% 45% 55% 10


 
SUMMARY – BALANCE SHEET ITEMS $ in millions 3Q18 2Q18 3Q17 $ Amount % Total $ Amount % Total $ Amount % Total Cash & Cash Equivalents $294.9 14.0% $257.1 12.4% $435.2 24.8% Accounts Receivable, net $212.7 10.1% $200.4 9.7% $183.4 10.4% Inventories $264.1 12.6% $265.4 12.8% $193.3 11.0% Net PP&E $393.7 18.7% $380.3 18.4% $346.7 19.7% Total Assets $2,103.5 $2,066.1 $1,757.7 Current Liabilities1 $211.0 10.0% $204.3 9.9% $269.9 15.4% Long-term debt, excluding $650.6 30.9% $650.2 31.5% $411.5 23.4% current maturities Total Liabilities $1,019.8 48.5% $1,013.2 49.0% $739.4 42.1% Total Shareholders’ Equity $1,083.7 51.5% $1,052.9 51.0% $1,018.4 57.9% AR – DSOs 48.7 47.7 48.4 Inventory Turns 3.3 3.3 3.9 1. Current Liabilities in 3Q17 includes $100 million of current maturities of long term debt. 11


 
ADJUSTED EBITDA MARGIN1 Adjusted EBITDA and EBITDA Margin Adjusted TTM EBITDA 28.2% 28.9% 28.5% 27.7% 27.7% 400 $423 27.7% 25.4% $109 $110 $106 350 $96 $97 300 $330 80 250 200 150 40 100 50 0 0 3Q17 4Q17 1Q18 2Q18 3Q18 TTM-3Q17 TTM-3Q18 Adj. EBITDA in $M Adj. EBITDA as % of Sales Adj. EBITDA in $M Adj. EBITDA as % of Sales 1. See Reconciliation of GAAP Income to Adjusted Operating Income and Adjusted EBITDA in the appendix of this presentation. 12


 
CASH FLOWS $ in millions 3Q18 2Q18 3Q17 Beginning Cash Balance $257.1 $550.2 $405.6 Cash from operating activities $84.1 $98.3 $89.0 Capital expenditures ($27.9) ($26.4) ($25.4) Acquisition of business - ($342.6) - Payments on long-term debt - ($2.0) ($25.0) Repurchase and retirement of common ($10.0) ($10.0) ($10.0) stock Dividend payments ($9.9) ($9.9) - Other investing activities $3.1 $1.8 $0.9 Other financing activities ($0.4) $4.0 $0.5 Effect of exchange rates ($1.2) ($6.3) ($0.4) Ending Cash Balance $294.9 $257.1 $435.2 Free Cash Flow1 $56.2 $71.9 $63.6 Adjusted EBITDA $110.4 $109.3 $95.9 1. Free cash flow equals cash from operations less capital expenditures. 13


 
OUTLOOK GAAP $ in millions, except per share data 4Q18 Guidance 3Q18 Actual 4Q17 Actual Net Revenue $380 to $400 $398.6 $350.6 Operating Expenses $111 to $114 $113.7 $92.5 Net Income $43 to $53 $48.1 ($28.3) Earnings Per Diluted Share $0.30 to $0.37 $0.34 ($0.20) Non-GAAP $ in millions, except per share data 4Q18 Guidance 3Q18 Actual 4Q17 Actual Net Revenue $380 to $400 $398.6 $350.6 Non-GAAP Operating $90 to $93 $91.1 $81.5 Expenses1 Non-GAAP Net Income $59 to $69 $65.6 $59.7 Non-GAAP EPS $0.41 to $0.48 $0.46 $0.42 1. Non-GAAP operating expenses exclude amortization and integration costs. In 4Q18, amortization is estimated to be approximately $20.5million, or $0.11 per share, and integration costs are estimated to be approximately $0.6 million, or $0.00 per share. 14


 
Entegris®, the Entegris Rings Design™ and Pure Advantage™ are trademarks of Entegris, Inc. ©2016 Entegris, Inc. All rights reserved. 15


 
NON-GAAP RECONCILIATION TABLE RECONCILIATION OF GAAP GROSS PROFIT TO ADJUSTED GROSS PROFIT Three months ended Nine months ended $ in thousands September 29, September 30, June 30, September 29, September 30, 2018 2017 2018 2018 2017 Net Sales $398,597 $345,591 $383,059 $1,148,855 $991,970 Gross profit-GAAP $181,716 $155,407 $182,378 $540,091 $445,306 Adjustments to gross profit: Charge for fair value mark-up of acquired inventory sold 3,281 - 208 3,489 - Severance related to organizational realignment - 740 - - 740 Impairment of equipment - 3,364 - - 5,330 Adjusted gross profit $184,997 $159,511 $182,586 $543,580 $451,376 Gross margin - as a % of net sales 45.6% 45.0% 47.6% 47.0% 44.9% Adjusted gross margin - as a % of net sales 46.4% 46.2% 47.7% 47.3% 45.5% 16


 
NON-GAAP RECONCILIATION TABLE RECONCILIATION OF GAAP SEGMENT PROFIT TO ADJUSTED OPERATING INCOME $ in thousands Three months ended Nine months ended September 29, September 30, September 29, September 30, Segment profit-GAAP 2018 2017 June 30, 2018 2018 2017 Specialty Chemicals and Engineered Materials $31,860 $29,539 $37,316 $100,738 $81,727 Microcontamination Control 44,530 39,302 39,054 125,575 102,085 Advanced Materials Handling 19,494 12,483 23,114 65,750 41,612 Total segment profit 95,884 81,324 99,484 292,063 225,424 Amortization of intangible assets 21,419 11,051 12,014 45,102 33,003 Unallocated expenses 6,490 9,618 12,537 25,580 21,756 Total operating income $67,975 $60,655 $74,933 $221,381 $170,665 Three months ended Nine months ended September 29, September 30, September 29, September 30, Adjusted segment profit 2018 2017 June 30, 2018 2018 2017 Specialty Chemicals and Engineered Materials1 $31,860 $29,553 $37,316 $100,738 $81,741 Microcontamination Control2 47,811 39,498 39,262 129,064 103,724 Advanced Materials Handling3 19,960 17,704 23,114 66,216 49,119 Total segment profit 99,631 86,755 99,692 296,018 234,584 Amortization of intangible assets4 - - - - - Unallocated expenses5 5,738 5,678 6,219 18,510 17,816 Total operating income $93,893 $81,077 $93,473 $277,508 $216,768 1. Adjusted segment profit for Specialty Chemicals and Engineered Materials for the three months and nine months ended September 30, 2017 excludes charges for severance related to organizational realignment of $14. 2. Adjusted segment profit for Microcontamination Control for the three months ended September 29, 2018 and June 30, 2018 excludes charges for fair value mark-up of acquired inventory sold of $3,281 and $208, respectively. Adjusted segment profit for Microcontamination Control for the nine months ended September 29, 2018 excludes charges for fair value mark-up of acquired inventory sold of $3,489. Adjusted segment profit for Microcontamination Control excludes charges for impairment of equipment and severance related to organizational realignment of $196 and $1,639 for the three and nine months ended September 30, 2017, respectively. 3. Adjusted segment profit for Advanced Material Handling excludes loss on sale of subsidiary of $466 for the three and nine months ended September 29, 2018, respectively. Adjusted segment profit for Advanced Material Handling excludes charges for impairment of equipment and severance related to organizational realignment of $5,221 and $7,507 for the three and nine months ended September 30, 2017, respectively. 4. Adjusted amortization of intangible assets excludes amortization expense of $21,419, $11,051 and $12,014 for the three months ended September 29, 2018, September 30, 2017, and June 30, 2018, respectively and $45,102 and $33,003 for the nine months ended September 29, 2018 and September 30, 2017, respectively. 5. Adjusted unallocated expenses for the three months ended September 29, 2018 exclude integration expenses of $752. Adjusted unallocated expenses for the three months ended June 30, 2018 exclude deal costs and integration expenses of $5,121 and $1,197, respectively. Adjusted unallocated expenses for the nine months ended September 29, 2018 exclude deal costs and integration expenses of $5,121 and $1,949, respectively. Adjusted unallocated expenses excludes charges for impairment of intangibles and severance related to organizational realignment of $3,940 for the three and nine months ended September 30, 2017, 17 respectively.


 
NON-GAAP RECONCILIATION TABLE RECONCILIATION OF GAAP TO ADJUSTED OPERATING INCOME AND ADJUSTED EBITDA Three months ended Nine months ended $ in thousands September 29, September 30, September 29, September 30, 2018 2017 June 30, 2018 2018 2017 Net sales $398,597 $345,591 $383,059 $1,148,855 $991,970 Net income $48,060 $40,902 $54,349 $159,971 $113,407 Adjustments to net income: Income tax expense 11,427 9,248 9,782 34,755 29,401 Interest expense, net 7,678 7,599 6,925 21,829 24,095 Other expense, net 810 2,906 3,877 4,826 3,762 GAAP - Operating income 67,975 60,655 74,933 221,381 170,665 Charge for fair value write-up of acquired inventory sold 3,281 - 208 3,489 - Deal Costs - - 5,121 5,121 - Integration Costs 752 - 1,197 1,949 - Severance - 2,141 - - 2,700 Impairment of equipment and intangibles1 - 7,230 - - 10,400 Loss on sale of subsidiary 466 - - 466 - Amortization of intangible assets 21,419 11,051 12,014 45,102 33,003 Adjusted operating income 93,893 81,077 93,473 277,508 216,768 Depreciation 16,537 14,785 15,802 48,236 43,173 Adjusted EBITDA $110,430 $95,862 $109,275 $325,744 $259,941 Adjusted operating margin 23.6% 23.5% 24.4% 24.2% 21.9% Adjusted EBITDA - as a % of net sales 27.7% 27.7% 28.5% 28.4% 26.2% 1. Includes product line impairment charges of $3,364 and $5,330 classified as cost of sales for the three and nine months ended September 30, 2017, respectively. Includes Jetalon intangible impairment charge of $3,866 classified as selling general and administrative expense for both the three and nine months ended September 30, 2017. Includes product line impairment charge of $320 classified as selling general and administrative expense for the nine months ended September 30, 2017. Includes product line impairment charge of $884 classified as engineering, research and development expense for the nine months ended September 30, 2017. 18


 
NON-GAAP RECONCILIATION TABLE RECONCILIATION OF GAAP TO NON-GAAP EARNINGS PER SHARE Three months ended Nine months ended $ in thousands, except per share data September 29, September 30, September 29, September 30, 2018 2017 June 30, 2018 2018 2017 GAAP net income $48,060 $40,902 $54,349 $159,971 $113,407 Adjustments to net income: Charge for fair value write-up of acquired inventory sold 3,281 - 208 3,489 - Deal Costs - - 5,121 5,121 - Integration Costs 752 - 1,197 1,949 - Severance - 2,141 - - 2,700 Impairment of equipment and intangibles1 - 10,030 - - 13,200 Loss on sale of subsidiary 466 - - 466 - Amortization of intangible assets 21,419 - 12,014 45,102 - Tax effect of adjustments to net income and discrete items2 (5,797) 11,051 (3,702) (12,209) 33,003 Tax effect of Tax Cuts and Jobs Act (2,560) (7,135) 648 (418) (15,661) Non-GAAP net income $65,621 $56,989 $69,835 $203,471 $146,649 Diluted earnings per common share $0.34 $0.28 $0.38 $1.12 $0.79 Effect of adjustments to net income $0.12 $0.11 $0.11 $0.30 $0.23 Diluted non-GAAP earnings per common share $0.46 $0.40 $0.49 $1.42 $1.02 1. Includes product line impairment charges of $3,364 and $5,330 classified as cost of sales for the three and nine months ended September 30, 2017, respectively. Includes Jetalon intangible impairment charge of $3,866 classified as selling general and administrative expense for both the three and nine months ended September 30, 2017. Includes product line impairment charge of $320 classified as selling general and administrative expense for the nine months ended September 30, 2017. Includes product line impairment charge of $884 classified as engineering, research and development expense for the nine months ended September 30, 2017. Includes product line impairment charge of $2,800 classified as other expense for both the three and nine months ended September 30, 2017. 19 2. The tax effect of pre-tax adjustments to net income was calculated using the applicable marginal tax rate during the respective years.


 
GAAP SEGMENT TREND DATA $ in thousands Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Sales SCEM $ 101,107 $ 111,782 $ 104,494 $ 110,945 $ 114,435 $ 121,174 $ 124,522 $ 125,339 $ 130,743 $ 134,336 $ 131,234 MC 77,619 91,584 94,738 98,717 100,055 104,407 116,113 115,650 118,637 124,681 151,345 AMH 88,298 99,686 97,460 98,840 102,887 103,421 104,956 109,573 117,819 124,042 116,018 Total Sales $ 267,024 $ 303,052 $ 296,692 $ 308,502 $ 317,377 $ 329,002 $ 345,591 $ 350,562 $ 367,199 $ 383,059 $ 398,597 Segment Profit1 SCEM $ 17,818 $ 24,205 $ 14,244 $ 21,061 $ 23,128 $ 29,060 $ 29,539 $ 30,075 $ 31,562 $ 37,316 $ 31,860 MC 14,181 24,511 27,684 27,535 30,987 31,796 39,302 39,328 41,991 39,054 44,530 AMH 14,697 18,203 11,192 12,190 13,960 15,169 12,483 18,226 23,142 23,114 19,494 Total Segment Profit $ 46,696 $ 66,919 $ 53,120 $ 60,786 $ 68,075 $ 76,025 $ 81,324 $ 87,629 $ 96,695 $ 99,484 $ 95,884 Segment Profit Margin SCEM 17.6% 21.7% 13.6% 19.0% 20.2% 24.0% 23.7% 24.0% 24.1% 27.8% 24.3% MC 18.3% 26.8% 29.2% 27.9% 31.0% 30.5% 33.8% 34.0% 35.4% 31.3% 29.4% AMH 16.6% 18.3% 11.5% 12.3% 13.6% 14.7% 11.9% 16.6% 19.6% 18.6% 16.8% 1.Segment profit excludes amortization of intangibles and unallocated expenses. Corporate cost related to HR, Finance, and IT are charged back to the Segments starting 1Q18. Prior quarter results are adjusted retrospectively using consistent allocation method. 20


 
NON-GAAP SEGMENT TREND DATA $ in thousands Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Sales SCEM $ 101,107 $ 111,782 $ 104,494 $ 110,945 $ 114,435 $ 121,174 $ 124,522 $ 125,339 $ 130,743 $ 134,336 $ 131,234 MC 77,619 91,584 94,738 98,717 100,055 104,407 116,113 115,650 118,637 124,681 151,345 AMH 88,298 99,686 97,460 98,840 102,887 103,421 104,956 109,573 117,819 124,042 116,018 Total Sales $ 267,024 $ 303,052 $ 296,692 $ 308,502 $ 317,377 $ 329,002 $ 345,591 $ 350,562 $ 367,199 $ 383,059 $ 398,597 Adjusted Segment Profit1 2 SCEM $ 17,818 $ 24,205 $ 14,943 $ 21,061 $ 23,128 $ 29,060 $ 29,553 $ 30,075 $ 31,562 $ 37,316 $ 31,860 3 MC 14,181 24,511 28,421 27,535 30,987 33,239 39,498 39,328 41,991 39,262 47,811 4 AMH 14,697 18,203 17,987 12,190 13,960 17,455 17,704 18,226 23,142 23,114 19,960 Total Adj. Segment Profit $ 46,696 $ 66,919 $ 61,351 $ 60,786 $ 68,075 $ 79,754 $ 86,755 $ 87,629 $ 96,695 $ 99,692 $ 99,631 Adjusted Segment Profit Margin SCEM 17.6% 21.7% 14.3% 19.0% 20.2% 24.0% 23.7% 24.0% 24.1% 27.8% 24.3% MC 18.3% 26.8% 30.0% 27.9% 31.0% 31.8% 34.0% 34.0% 35.4% 31.5% 31.6% AMH 16.6% 18.3% 18.5% 12.3% 13.6% 16.9% 16.9% 16.6% 19.6% 18.6% 17.2% 1. Segment profit excludes amortization of intangibles and unallocated expenses. Corporate cost related to HR, Finance, and IT are charged back to the Segments starting 1Q18. Prior quarter results are adjusted retrospectively using consistent allocation method. 2. Adjusted segment profit for SCEM for Q316 excludes charges for severance of $699. Adjusted segment profit for SCEM for Q317 excludes charges for severance of $14. 3 Adjusted segment profit for MC for Q316 excludes charges for severance of $737. Adjusted segment profit for MC for 2Q17 excludes charges for impairment of equipment and severance of $884 and $559, respectively. Adjusted segment profit for MC for Q317 excludes charges for severance of $196K. Adjusted segment profit for MC for Q218 and Q318 excludes charges for fair value mark-up of acquired inventory sold of $208 and $3,281, respectively. 4. 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. Adjusted segment profit for AMH for 2Q17 excludes charges for impairment of equipment of $2,286. Adjusted segment profit for AMH for Q317 excludes charges for impairment of equipment and severance related to organizational realignment of $3,364 and $1,857, respectively. Adjusted segment profit for AMH for Q318 excludes loss on sale of subsidiary of $466. 21


 

Delayed at least 20 minutes.
Provided by eSignal.