Apr 27, 2017

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 /PRNewswire/ -- 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."

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.

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. 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. 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. 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. 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. 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. 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

 

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

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/entegris-reports-strong-first-quarter-results-300446862.html

SOURCE Entegris, Inc.

News Provided by Acquire Media