Press Release Details


Entegris Reports Record Results for Fourth Quarter Of 2019

Feb 04, 2020 at 6:00 AM EST
  • Fourth-quarter revenue of $427.0 million, increased 6% from prior year
  • Fiscal 2019 revenue of $1.6 billion, increased 3%
  • Fiscal 2019 GAAP diluted EPS of $1.87, increased 11%
  • Fiscal 2019 Non-GAAP diluted EPS of $1.93, increased 2%

BILLERICA, Mass.--(BUSINESS WIRE)--Feb. 4, 2020-- 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 fourth quarter ended December 31, 2019.

Fourth-quarter sales were $427.0 million, an increase of 6% from the same quarter last year. GAAP fourth-quarter net income was $57.4 million, or $0.42 per diluted share, which included $16.0 million of amortization of intangible assets, $3.4 million of integration costs, $1.0 million in deal costs mainly associated with the recent acquisitions and a $0.2 million charge for fair value write-up of acquired inventory sold. Non-GAAP net income was $74.6 million and non-GAAP net income per diluted share was $0.55.

Bertrand Loy, president and chief executive officer, said: “Our strong performance in the fourth quarter resulted in record sales, EBITDA and EPS. These results were driven by continued traction of our advanced solutions, particularly in the new technology nodes. Our achievement of record sales and EPS in 2019, in the face of a very challenging end market, showcased the strength of our team’s execution and our highly resilient, differentiated and unit-driven business model.”

Mr. Loy added: “I’m optimistic about improving industry conditions in 2020 and we expect our growth will again outpace the market. We continue to believe that Entegris has never been better positioned and more relevant for our customers to help them achieve the targeted levels of chip performance, yields and reliability. Our position is bolstered by our combination of technology leadership; global scale; and world class operational excellence.”

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

GAAP Results

Q4 2019

Q4 2018

Q3 2019

Net sales

$426,998

$401,642

$394,147

Operating income

$84,085

$71,308

$52,793

Operating margin

19.7%

17.8%

13.4%

Net income

$57,438

$80,784

$40,767

Diluted earnings per share (EPS)

$0.42

$0.57

$0.30

Non-GAAP Results

Non-GAAP adjusted operating income

$104,647

$93,485

$88,220

Non-GAAP adjusted operating margin

24.5%

23.3%

22.4%

Non-GAAP net income

$74,582

$66,300

$68,179

Non-GAAP EPS

$0.55

$0.47

$0.50

First-Quarter Outlook

For the first quarter ending March 28, 2020, the Company expects sales of $415 million to $430 million, net income of $56 million to $63 million and net income per diluted share between $0.41 and $0.46. On a non-GAAP basis, EPS is expected to range from $0.50 to $0.55 per diluted share, which reflects net income on a non-GAAP basis in the range of $68 million to $75 million.

Segment Results

The Company reports its results in the following segments:

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

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

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

Change in Inter-Segment Reporting

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

Entegris’ 2020 Investor and Analyst Day

Entegris will be hosting an Investor and Analyst Day on May 11, 2020 in New York City. More information on this event will be made available in the near future. If you have any questions please reach out to Bill Seymour, V.P. Investor Relations.

Fourth-Quarter Results Conference Call Details

Entegris will hold a conference call to discuss its results for the fourth quarter on Tuesday, February 4, 2020, at 9:00 a.m. Eastern Time. Participants should dial 800-263-0877 or +1 323-794-2094, referencing confirmation code 2038571. 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 2038571. The replay will be available from February 4, 2020 to March 19, 2020.

The call can also be accessed live and on-demand from the Entegris website. Point your web browser to

http://investor.entegris.com/events.cfm and follow the link to the webcast. The on-demand playback will be available for six weeks after the conclusion of the teleconference.

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

ABOUT ENTEGRIS

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

Non-GAAP Information

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

Forward-Looking Statements

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

 

Entegris, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

 

Three months ended

 

 

December 31, 2019

December 31, 2018

September 28, 2019

Net sales

$

426,998

 

$

401,642

 

$

394,147

 

Cost of sales

229,362

 

221,902

 

223,797

 

 

Gross profit

197,636

 

179,740

 

170,350

 

Selling, general and administrative expenses

67,171

 

60,707

 

71,232

 

Engineering, research and development expenses

30,352

 

30,675

 

31,173

 

Amortization of intangible assets

16,028

 

17,050

 

15,152

 

 

Operating income

84,085

 

71,308

 

52,793

 

Interest expense, net

12,743

 

8,426

 

10,216

 

Other expense, net

248

 

3,176

 

934

 

 

Income before income tax expense

71,094

 

59,706

 

41,643

 

Income tax expense (benefit)

13,656

 

(21,078

)

876

 

 

Net income

$

57,438

 

$

80,784

 

$

40,767

 

 

 

 

 

 

 

 

 

Basic net income per common share:

$

0.43

 

$

0.58

 

$

0.30

 

Diluted net income per common share:

$

0.42

 

$

0.57

 

$

0.30

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

Basic

134,778

 

139,268

 

135,092

 

 

Diluted

136,470

 

140,515

 

136,530

 

 

Entegris, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

 

Twelve months ended

 

 

December 31, 2019

December 31, 2018

Net sales

$

1,591,066

 

$

1,550,497

 

Cost of sales

879,413

 

830,666

 

 

Gross profit

711,653

 

719,831

 

Selling, general and administrative expenses

284,807

 

246,534

 

Engineering, research and development expenses

121,140

 

118,456

 

Amortization of intangible assets

66,428

 

62,152

 

 

Operating income

239,278

 

292,689

 

Interest expense, net

42,310

 

30,255

 

Other (income) expense, net

(121,081

)

8,002

 

 

Income before income tax expense

318,049

 

254,432

 

Income tax expense

63,189

 

13,677

 

 

Net income

$

254,860

 

$

240,755

 

 

 

 

 

 

 

Basic net income per common share:

$

1.89

 

$

1.71

 

Diluted net income per common share:

$

1.87

 

$

1.69

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

Basic

135,137

 

141,026

 

 

Diluted

136,568

 

142,610

 

 

Entegris, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

 

December 31, 2019

 

December 31, 2018

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

351,911

 

 

$

482,062

 

Trade accounts and notes receivable, net

234,409

 

 

222,055

 

Inventories, net

 

287,098

 

 

268,140

 

Deferred tax charges and refundable income taxes

24,552

 

 

17,393

 

Other current assets

34,427

 

 

39,688

 

Total current assets

932,397

 

 

1,029,338

 

Property, plant and equipment, net

479,544

 

 

419,529

 

Other assets:

 

 

 

 

 

Right-of-use assets

50,160

 

 

 

Goodwill

695,044

 

 

550,202

 

Intangible assets, net

333,952

 

 

295,687

 

Deferred tax assets and other noncurrent tax assets

11,245

 

 

10,162

 

Other

 

13,744

 

 

12,723

 

Total assets

 

$

2,516,086

 

 

$

2,317,641

 

LIABILITIES AND EQUITY

 

 

Current liabilities

 

 

 

 

Long-term debt, current maturities

 

4,000

 

 

4,000

 

Accounts payable

 

84,207

 

 

93,055

 

Accrued liabilities

 

150,118

 

 

141,020

 

Income tax payable

 

26,108

 

 

31,593

 

Total current liabilities

264,433

 

 

269,668

 

Long-term debt, excluding current maturities

932,484

 

 

934,863

 

Long-term lease liability

 

43,827

 

 

 

Other liabilities

 

109,453

 

 

101,085

 

Shareholders’ equity

 

1,165,889

 

 

1,012,025

 

Total liabilities and equity

$

2,516,086

 

 

$

2,317,641

 

 

Entegris, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

Three months ended

Twelve months ended

 

December 31,
2019

December 31,
2018

December 31,
2019

December 31,
2018

Operating activities:

 

 

 

 

Net income

$

57,438

 

$

80,784

 

$

254,860

 

$

240,755

 

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

 

 

 

 

Depreciation

20,352

 

16,880

 

74,975

 

65,116

 

Amortization

16,028

 

17,050

 

66,428

 

62,152

 

Stock-based compensation expense

4,714

 

4,385

 

19,629

 

17,112

 

Provision for deferred income taxes

(11,885

)

(10,810

)

(14,008

)

(11,876

)

Loss on extinguishment of debt

 

2,319

 

 

2,429

 

Other

9,300

 

5,804

 

23,551

 

16,278

 

Changes in operating assets and liabilities, net of effects of

acquisitions:

 

 

 

 

Trade accounts and notes receivable

27,241

 

(8,760

)

(3,164

)

(17,473

)

Inventories

(15,665

)

(9,312

)

(21,354

)

(38,100

)

Accounts payable and accrued liabilities

9,264

 

29,390

 

(22,647

)

19,950

 

Income taxes payable, refundable income taxes and noncurrent
taxes payable

17,080

 

(21,188

)

(3,494

)

(30,381

)

Other

(5,223

)

(15,215

)

7,522

 

(13,386

)

Net cash provided by operating activities

128,644

 

91,327

 

382,298

 

312,576

 

Investing activities:

 

 

 

 

Acquisition of property and equipment

(25,932

)

(34,816

)

(112,355

)

(110,153

)

Acquisition of business, net of cash

(10,996

)

(426

)

(277,369

)

(380,694

)

Other

1,069

 

(111

)

3,884

 

4,903

 

Net cash used in investing activities

(35,859

)

(35,353

)

(385,840

)

(485,944

)

Financing activities:

 

 

 

 

Proceeds from long-term borrowings

 

400,000

 

 

402,000

 

Payments on long-term debt

(2,000

)

(108,850

)

(4,000

)

(135,850

)

Dividend payments

(10,787

)

(9,890

)

(40,566

)

(39,591

)

Payments for debt extinguishment costs

 

 

 

 

Issuance of common stock

2,940

 

2,548

 

7,291

 

5,577

 

Taxes paid related to net share settlement of equity awards

(145

)

(134

)

(8,722

)

(14,686

)

Repurchase and retirement of common stock

(15,000

)

(143,781

)

(80,321

)

(173,781

)

Other

 

(8,512

)

(502

)

(9,258

)

Net cash (used in) provided by financing activities

(24,992

)

131,381

 

(126,820

)

34,411

 

Effect of exchange rate changes on cash and cash equivalents

1,370

 

(186

)

211

 

(4,389

)

Increase (decrease) in cash and cash equivalents

69,163

 

187,169

 

(130,151

)

(143,346

)

Cash and cash equivalents at beginning of period

282,748

 

294,893

 

482,062

 

625,408

 

Cash and cash equivalents at end of period

$

351,911

 

$

482,062

 

$

351,911

 

$

482,062

 

 

Entegris, Inc. and Subsidiaries

Segment Information

(In thousands)

(Unaudited)

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

 

Three months ended

Twelve months ended

Net sales

December 31,
2019

December 31,
2018

September 28,
2019

December 31,
2019

December 31,
2018

Specialty Chemicals and Engineered Materials

$

146,747

 

$

133,928

 

$

127,750

 

$

526,519

 

$

530,241

 

Microcontamination Control

169,794

 

158,500

 

155,979

 

633,664

 

553,838

 

Advanced Materials Handling

117,455

 

115,527

 

117,256

 

458,290

 

493,404

 

Inter-segment elimination

$

(6,998

)

$

(6,313

)

$

(6,838

)

$

(27,407

)

$

(26,986

)

Total net sales

$

426,998

 

$

401,642

 

$

394,147

 

$

1,591,066

 

$

1,550,497

 

 

Three months ended

Twelve months ended

Segment profit

December 31,
2019

December 31,
2018

September 28,
2019

December 31,
2019

December 31,
2018

Specialty Chemicals and Engineered Materials

$

32,822

 

$

28,221

 

$

17,074

 

$

98,327

 

$

127,080

 

Microcontamination Control

57,157

 

46,879

 

46,792

 

194,398

 

166,852

 

Advanced Materials Handling

20,686

 

19,096

 

17,077

 

75,173

 

92,327

 

Total segment profit

110,665

 

94,196

 

80,943

 

367,898

 

386,259

 

Amortization of intangibles

16,028

 

17,050

 

15,152

 

66,428

 

62,152

 

Unallocated expenses

10,552

 

5,838

 

12,998

 

62,192

 

31,418

 

Total operating income

$

84,085

 

$

71,308

 

$

52,793

 

$

239,278

 

$

292,689

 

 

Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Gross Profit to Adjusted Gross Profit

(In thousands)

(Unaudited)

 

Three months ended

Twelve months ended

 

December 31,
2019

December 31,
2018

September 28,
2019

December 31,
2019

December 31,
2018

Net sales

$

426,998

 

$

401,642

 

$

394,147

 

$

1,591,066

 

$

1,550,497

 

Gross profit-GAAP

$

197,636

 

$

179,740

 

$

170,350

 

$

711,653

 

$

719,831

 

Adjustments to gross profit:

 

 

 

 

 

Severance related to organizational realignment

(12

)

460

 

990

 

1,336

 

460

 

Charge for fair value mark-up of acquired inventory sold

211

 

3,379

 

4,483

 

7,544

 

6,868

 

Adjusted gross profit

$197,835

$183,579

$175,823

$720,533

$727,159

 

 

 

 

 

 

Gross margin - as a % of net sales

46.3

%

44.8

%

43.2

%

44.7

%

46.4

%

Adjusted gross margin - as a % of net sales

46.3

%

45.7

%

44.6

%

45.3

%

46.9

%

 

Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Segment Profit to Adjusted Operating Income

(In thousands)

(Unaudited)

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

 

Three months ended

Twelve months ended

Segment profit-GAAP

December 31,
2019

December 31,
2018

September 28,
2019

December 31,
2019

December 31,
2018

Specialty Chemicals and Engineered Materials

$

32,822

 

$

28,221

 

$

17,074

 

$

98,327

 

$

127,080

 

Microcontamination Control

57,157

 

46,879

 

46,792

 

194,398

 

166,852

 

Advanced Materials Handling

20,686

 

19,096

 

17,077

 

75,173

 

92,327

 

Total segment profit

110,665

 

94,196

 

80,943

 

367,898

 

386,259

 

Amortization of intangible assets

16,028

 

17,050

 

15,152

 

66,428

 

62,152

 

Unallocated expenses

10,552

 

5,838

 

12,998

 

62,192

 

31,418

 

Total operating income

$

84,085

 

$

71,308

 

$

52,793

 

$

239,278

 

$

292,689

 

 

Three months ended

Twelve months ended

Adjusted segment profit

December 31,
2019

December 31,
2018

September 28,
2019

December 31,
2019

December 31,
2018

Specialty Chemicals and Engineered Materials 1

$

32,530

 

$

28,221

 

$

23,700

 

$

105,995

 

$

127,080

 

Microcontamination Control 2

58,039

 

50,258

 

49,769

 

201,016

 

173,720

 

Advanced Materials Handling 3

20,307

 

19,556

 

20,212

 

78,507

 

93,253

 

Total adjusted segment profit

110,876

 

98,035

 

93,681

 

385,518

 

394,053

 

Adjusted amortization of intangible assets4

 

 

 

 

 

Adjusted unallocated expenses5

6,229

 

4,550

 

5,461

 

23,678

 

23,060

 

Total adjusted operating income

$

104,647

 

$

93,485

 

$

88,220

 

$

361,840

 

$

370,993

 

1 Adjusted segment profit for Specialty Chemicals and Engineered Materials excludes charges for fair value mark-up of acquired inventory sold of ($476), $4,483 for the three months ended December 31, 2019 and September 28, 2019, respectively, and $4,822 for the twelve months ended December 31, 2019. Adjusted segment profit for Specialty Chemicals and Engineered Materials excludes severance and restructuring costs of $184 and $2,143 for the three months ended December 31, 2019 and September 28, 2019, respectively, and $2,846 for the twelve months ended December 31, 2019.

2 Adjusted segment profit for Microcontamination Control excludes charges for fair value mark-up of acquired inventory sold of $687 and $3,379 for the three months ended December 31, 2019 and December 31, 2018, respectively, and $2,722 and $6,868 for the twelve months ended December 31, 2019 and December 31, 2018. Adjusted segment profit for Microcontamination Control excludes severance and restructuring costs of $195 and $2,977 for the three months ended December 31, 2019 and September 28, 2019, respectively, and $3,896 for the twelve months ended December 31, 2019.

3 Adjusted segment profit for Advanced Material Handling excludes severance and restructuring costs of ($379) and $3,135 for the three months ended December 31, 2019 and September 28, 2019, respectively, and $3,334 for the twelve months ended December 31, 2019. Adjusted segment profit for Advanced Materials Handling excludes charges for impairment of equipment and loss on sale of subsidiary of $460 and $466, respectively, for the twelve months ended December 31, 2018.

4 Adjusted amortization of intangible assets excludes amortization expense of $16,028, $17,050, and $15,152 for the three months ended December 31, 2019, December 31, 2018, and September 28, 2019, respectively, and $66,428 and $62,152 for the twelve months ended December 31, 2019 and December 31, 2018, respectively.

5 Adjusted unallocated expenses excludes deal and integration expenses of $4,323, $1,288, and $7,289 for the three months ended December 31, 2019, December 31, 2018 and September 28, 2019, respectively, and $36,096 and $8,358 for the twelve months ended December 31, 2019 and December 31, 2018, respectively. Adjusted unallocated expenses excludes severance and restructuring costs of $248 for the three months ended September 28, 2019 and $2,418 for the twelve months ended December 31, 2019.

 

Entegris, Inc. and Subsidiaries

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

(In thousands)

(Unaudited)

 

Three months ended

Twelve months ended

 

December 31,
2019

December 31,
2018

September 28,
2019

December 31,
2019

December 31,
2018

Net sales

$

426,998

 

$

401,642

 

$

394,147

 

$

1,591,066

 

$

1,550,497

 

Net income

$

57,438

 

$

80,784

 

$

40,767

 

$

254,860

 

$

240,755

 

Adjustments to net income:

 

 

 

 

 

Income tax expense (benefit)

13,656

 

(21,078

)

876

 

63,189

 

13,677

 

Interest expense, net

12,743

 

8,426

 

10,216

 

42,310

 

30,255

 

Other expense (income), net

248

 

3,176

 

934

 

(121,081

)

8,002

 

GAAP - Operating income

84,085

 

71,308

 

52,793

 

239,278

 

292,689

 

Charge for fair value write-up of acquired inventory sold

211

 

3,379

 

4,483

 

7,544

 

6,868

 

Deal costs

973

 

 

4,891

 

26,164

 

5,121

 

Integration costs

3,350

 

1,288

 

2,398

 

9,932

 

3,237

 

Severance and restructuring costs

 

460

 

8,503

 

12,494

 

460

 

Loss on sale of subsidiary

 

 

 

 

466

 

Amortization of intangible assets

16,028

 

17,050

 

15,152

 

66,428

 

62,152

 

Adjusted operating income

104,647

 

93,485

 

88,220

 

361,840

 

370,993

 

Depreciation

20,352

 

16,880

 

19,306

 

74,975

 

65,116

 

Adjusted EBITDA

$

124,999

 

$

110,365

 

$

107,526

 

$

436,815

 

$

436,109

 

 

 

 

 

 

 

Net income - as a % of net sales

13.5

%

20.1

%

10.3

%

16.0

%

15.5

%

Adjusted operating margin

24.5

%

23.3

%

22.4

%

22.7

%

23.9

%

Adjusted EBITDA - as a % of net sales

29.3

%

27.5

%

27.3

%

27.5

%

28.1

%

 

Entegris, Inc. and Subsidiaries

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

(In thousands, except per share data)

(Unaudited)

 

Three months ended

Twelve months ended

 

December 31,
2019

December 31,
2018

September 28,
2019

December 31,
2019

December 31,
2018

GAAP net income

$

57,438

 

$

80,784

 

$

40,767

 

$

254,860

 

$

240,755

 

Adjustments to net income:

 

 

 

 

 

Charge for fair value write-up of inventory acquired

211

 

3,379

 

4,483

 

7,544

 

6,868

 

Deal costs

973

 

 

4,891

 

26,575

 

5,121

 

Integration costs

3,350

 

1,288

 

2,398

 

9,932

 

3,237

 

Severance and restructuring costs

 

460

 

8,503

 

12,494

 

460

 

Loss on debt extinguishment and modification

1,980

 

2,319

 

 

1,980

 

2,319

 

Versum termination fee, net

 

 

 

(122,000

)

 

Loss on sale of subsidiary

 

 

 

 

466

 

Amortization of intangible assets

16,028

 

17,050

 

15,152

 

66,428

 

62,152

 

Tax effect of legal entity restructuring

 

(34,478

)

 

9,398

 

(34,478

)

Tax effect of adjustments to net income and discrete items1

(5,398

)

(5,603

)

(8,015

)

(3,124

)

(17,812

)

Tax effect of Tax Cuts and Jobs Act

 

 

1,101

 

 

 

683

 

Non-GAAP net income

$

74,582

 

$

66,300

 

$

68,179

 

$

264,087

 

$

269,771

 

 

 

 

 

 

 

Diluted earnings per common share

$

0.42

 

$

0.57

 

$

0.30

 

$

1.87

 

$

1.69

 

Effect of adjustments to net income

$

0.13

 

$

(0.10

)

$

0.20

 

$

0.07

 

$

0.20

 

Diluted non-GAAP earnings per common share

$

0.55

 

$

0.47

 

$

0.50

 

$

1.93

 

$

1.89

 

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

 

Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Outlook to Non-GAAP Outlook

(In millions, except per share data)

(Unaudited)

 

First-Quarter Outlook

 

Reconciliation GAAP net income to non-GAAP net income

March 28, 2020

 

GAAP net income

$56 - $63

 

Adjustments to net income:

 

 

Restructuring and integration costs

2

 

Amortization of intangible assets

13

 

Income tax effect

(3)

Non-GAAP net income

$68 - $75

 

 

First-Quarter Outlook

 

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

March 28, 2020

 

Diluted earnings per common share

$0.41 - $0.46

 

Adjustments to diluted earnings per common share:

 

 

Restructuring and integration costs

0.01

 

Amortization of intangible assets

0.10

 

Income tax effect

(0.02)

Diluted non-GAAP earnings per common share

$0.50 to $0.55

 

 

Source: Entegris, Inc.

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