News Release Details
Entegris Reports Results for Third Quarter Of 2021
-
Third-quarter revenue of
$579 million , increased 20% from prior year -
Third-quarter GAAP diluted EPS of
$0.86 , increased 48% -
Third-quarter non-GAAP diluted EPS of
$0.92 , increased 37%
Third-quarter sales were
Quarterly Financial Results Summary |
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(in thousands, except percentages and per share data) |
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GAAP Results |
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Net sales |
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Operating income |
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Operating margin - as a % of net sales |
24.0% |
22.2% |
24.3% |
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Net income |
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Diluted earnings per common share |
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Non-GAAP Results |
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Non-GAAP adjusted operating income |
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Non-GAAP adjusted operating margin - as a % of net sales |
26.3% |
25.3% |
26.5% |
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Non-GAAP net income |
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Diluted non-GAAP earnings per common share |
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Fourth-Quarter Outlook
For the fourth quarter ending
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, and safe and efficient delivery systems to support semiconductor and other advanced manufacturing processes.
Microcontamination Control (MC): MC offers solutions to filter and 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 other substrates for a broad set of applications in the semiconductor, life sciences 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
The call can also be accessed live and on-demand from the Entegris website. Go here 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 will be posted on the Investor Relations section of www.entegris.com Tuesday morning before the call.
About Entegris
Entegris is a world-class supplier of advanced materials and process solutions for the semiconductor and other high-tech industries. Entegris is ISO 9001 certified and has manufacturing, customer service and/or research facilities in
Non-GAAP Information
The Company’s condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in
Forward-Looking Statements
This press release contains forward-looking statements. 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 the impact of the COVID-19 pandemic on the Company’s operations and markets, including supply chain issues related thereto; future period guidance; future sales, net income, diluted earnings per common share, non-GAAP diluted earnings per share, non-GAAP net income, expenses and other financial metrics; the Company’s performance relative to its markets, including the drivers of such performance; the impact, financial or otherwise, of any organizational changes; market and technology trends, including the expected impact of the COVID-19 pandemic; the development of new products and the success of their introductions; 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, risks related to the COVID-19 pandemic on the global economy and financial markets, as well as on the Company, our customers and suppliers, which may impact our sales, gross margin, customer demand and our ability to supply our products to our customers; 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; raw material shortages, supply and labor constraints and price increases; 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; the Company’s concentrated customer base; the Company’s ability to identify, complete 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; changes in government regulations of the countries in which the Company operates, including the imposition of tariffs, export controls and other trade laws and restrictions and changes to foreign and national security policy, especially as they relate to
Condensed Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) |
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Three months ended |
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Net sales |
|
|
|
|
Cost of sales |
315,289 |
254,987 |
305,968 |
|
|
Gross profit |
264,204 |
226,000 |
265,384 |
Selling, general and administrative expenses |
71,032 |
71,195 |
72,621 |
|
Engineering, research and development expenses |
41,972 |
36,295 |
41,972 |
|
Amortization of intangible assets |
11,843 |
11,749 |
11,902 |
|
|
Operating income |
139,357 |
106,761 |
138,889 |
Interest expense, net |
9,339 |
12,651 |
10,643 |
|
Other expense (income), net |
1,917 |
(1,752) |
23,560 |
|
|
Income before income tax expense |
128,101 |
95,862 |
104,686 |
Income tax expense |
10,640 |
16,559 |
15,916 |
|
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Net income |
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|
|
|
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Basic earnings per common share: |
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Diluted earnings per common share: |
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|
|
|
|
|
|
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Weighted average shares outstanding: |
|
|
|
|
|
Basic |
135,583 |
134,957 |
135,498 |
|
Diluted |
136,631 |
136,252 |
136,533 |
Condensed Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) |
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Nine months ended |
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|
|
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Net sales |
|
|
|
Cost of sales |
899,115 |
722,869 |
|
|
Gross profit |
764,574 |
618,850 |
Selling, general and administrative expenses |
215,042 |
196,958 |
|
Engineering, research and development expenses |
121,692 |
98,499 |
|
Amortization of intangible assets |
35,616 |
41,176 |
|
|
Operating income |
392,224 |
282,217 |
Interest expense, net |
31,563 |
35,681 |
|
Other expense (income), net |
29,807 |
(1,351) |
|
|
Income before income tax expense |
330,854 |
247,887 |
Income tax expense |
39,947 |
39,542 |
|
|
Net income |
|
|
|
|
|
|
|
|
||
Basic earnings per common share: |
|
|
|
Diluted earnings per common share: |
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
Basic |
135,383 |
134,801 |
|
Diluted |
136,556 |
136,209 |
Condensed Consolidated Balance Sheets (In thousands) (Unaudited) |
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ASSETS |
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Current assets: |
|
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Cash and cash equivalents |
|
|
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Trade accounts and notes receivable, net |
315,073 |
264,392 |
|||
Inventories, net |
|
429,016 |
323,944 |
||
Deferred tax charges and refundable income taxes |
21,760 |
21,136 |
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Other current assets |
34,104 |
43,892 |
|||
Total current assets |
1,275,705 |
1,234,257 |
|||
Property, plant and equipment, net |
597,630 |
525,367 |
|||
Other assets: |
|
|
|
|
|
Right-of-use assets |
56,990 |
45,924 |
|||
|
749,933 |
748,037 |
|||
Intangible assets, net |
302,487 |
337,632 |
|||
Deferred tax assets and other noncurrent tax assets |
17,565 |
14,519 |
|||
Other |
|
11,965 |
11,960 |
||
Total assets |
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LIABILITIES AND EQUITY |
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Current liabilities |
|
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||
Accounts payable |
|
|
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Accrued liabilities |
|
181,813 |
177,012 |
||
Income tax payable |
|
6,989 |
43,996 |
||
Total current liabilities |
309,413 |
302,626 |
|||
Long-term debt, excluding current maturities |
936,704 |
1,085,783 |
|||
Long-term lease liability |
|
52,486 |
39,730 |
||
Other liabilities |
|
102,892 |
110,063 |
||
Shareholders’ equity |
|
1,610,780 |
1,379,494 |
||
Total liabilities and equity |
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Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) |
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Three months ended |
Nine months ended |
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Operating activities: |
|
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Net income |
|
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|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
Depreciation |
22,841 |
20,777 |
67,510 |
62,064 |
Amortization |
11,843 |
11,749 |
35,616 |
41,176 |
Stock-based compensation expense |
7,467 |
5,903 |
22,124 |
16,552 |
Loss on extinguishment of debt and modification |
— |
908 |
23,338 |
2,378 |
Other |
(1,773) |
19,302 |
(1,976) |
30,727 |
Changes in operating assets and liabilities, net of effects of acquisitions: |
|
|
|
|
Trade accounts and notes receivable |
(5,127) |
(23,280) |
(53,358) |
(65,367) |
Inventories |
(45,464) |
1,084 |
(115,187) |
(54,278) |
Accounts payable and accrued liabilities |
52,924 |
4,433 |
37,577 |
10,076 |
Income taxes payable, refundable income taxes and noncurrent taxes payable |
(8,833) |
(16,407) |
(35,275) |
(11,995) |
Other |
(1,835) |
(2,540) |
13,198 |
2,978 |
Net cash provided by operating activities |
149,504 |
101,232 |
284,474 |
242,656 |
Investing activities: |
|
|
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|
Acquisition of property and equipment |
(48,885) |
(32,687) |
(133,986) |
(79,560) |
Acquisition of business, net of cash acquired |
— |
(35,500) |
(2,250) |
(111,145) |
Other |
4,326 |
54 |
4,416 |
265 |
Net cash used in investing activities |
(44,559) |
(68,133) |
(131,820) |
(190,440) |
Financing activities: |
|
|
|
|
Proceeds from revolving credit facility and long-term debt |
— |
— |
451,000 |
617,000 |
Payments of revolving credit facility and long-term debt |
— |
(100,000) |
(601,000) |
(468,000) |
Payments for debt extinguishment costs |
— |
— |
(19,080) |
— |
Payments for dividends |
(10,853) |
(10,794) |
(32,650) |
(32,446) |
Issuance of common stock |
1,055 |
3,150 |
17,872 |
4,899 |
Taxes paid related to net share settlement of equity awards |
(275) |
(11,836) |
(15,368) |
(24,556) |
Repurchase and retirement of common stock |
(20,000) |
— |
(50,000) |
(29,564) |
Deferred acquisition payments |
— |
— |
— |
(16,125) |
Other |
(486) |
(1) |
(5,287) |
(6,856) |
Net cash (used in) provided by financing activities |
(30,559) |
(119,481) |
(254,513) |
44,352 |
Effect of exchange rate changes on cash and cash equivalents |
333 |
1,687 |
(3,282) |
(507) |
Increase (decrease) in cash and cash equivalents |
74,719 |
(84,695) |
(105,141) |
96,061 |
Cash and cash equivalents at beginning of period |
401,033 |
532,667 |
580,893 |
351,911 |
Cash and cash equivalents at end of period |
|
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Segment Information (In thousands) (Unaudited) |
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Three months ended |
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Nine months ended |
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Net sales |
|
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Specialty Chemicals and Engineered Materials |
|
|
|
|
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|
Microcontamination Control |
225,877 |
193,541 |
227,521 |
|
660,497 |
536,560 |
Advanced Materials Handling |
186,200 |
144,370 |
172,502 |
|
507,243 |
386,941 |
Inter-segment elimination |
(8,964) |
(7,404) |
(9,037) |
|
(27,338) |
(22,689) |
Total net sales |
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Three months ended |
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Nine months ended |
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Segment profit |
|
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|
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Specialty Chemicals and Engineered Materials |
|
|
|
|
|
|
Microcontamination Control |
78,399 |
64,915 |
78,132 |
|
227,097 |
177,219 |
Advanced Materials Handling |
40,503 |
33,266 |
42,093 |
|
114,691 |
76,707 |
Total segment profit |
159,993 |
130,781 |
165,170 |
|
462,380 |
352,134 |
Amortization of intangibles |
11,843 |
11,749 |
11,902 |
|
35,616 |
41,176 |
Unallocated expenses |
8,793 |
12,271 |
14,379 |
|
34,540 |
28,741 |
Total operating income |
|
|
|
|
|
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Reconciliation of GAAP Gross Profit to Adjusted Gross Profit (In thousands) (Unaudited) |
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Three months ended |
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Nine months ended |
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Net sales |
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Gross profit-GAAP |
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Adjustments to gross profit: |
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|
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Integration costs |
— |
— |
— |
|
— |
(1,557) |
|||||
Severance and restructuring costs |
— |
— |
— |
|
— |
465 |
|||||
Charge for fair value mark-up of acquired inventory sold |
— |
229 |
— |
|
— |
590 |
|||||
Adjusted gross profit |
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|
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Gross margin - as a % of net sales |
45.6% |
47.0% |
46.4% |
|
46.0% |
46.1% |
|||||
Adjusted gross margin - as a % of net sales |
45.6% |
47.0% |
46.4% |
|
46.0% |
46.1% |
Reconciliation of GAAP Segment Profit to Adjusted Operating Income (In thousands) (Unaudited) |
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Three months ended |
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Nine months ended |
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Segment profit-GAAP |
|
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Specialty Chemicals and Engineered Materials (SCEM) |
|
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|
|
|
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Microcontamination Control (MC) |
78,399 |
64,915 |
78,132 |
|
227,097 |
177,219 |
Advanced Materials Handling (AMH) |
40,503 |
33,266 |
42,093 |
|
114,691 |
76,707 |
Total segment profit |
159,993 |
130,781 |
165,170 |
|
462,380 |
352,134 |
Amortization of intangible assets |
11,843 |
11,749 |
11,902 |
|
35,616 |
41,176 |
Unallocated expenses |
8,793 |
12,271 |
14,379 |
|
34,540 |
28,741 |
Total operating income |
|
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Three months ended |
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Nine months ended |
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Adjusted segment profit |
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SCEM segment profit |
|
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|
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Integration costs |
— |
— |
— |
|
— |
(1,557) |
|||||
Severance and restructuring costs |
69 |
277 |
51 |
|
167 |
906 |
|||||
Charge for fair value write-up of acquired inventory sold |
— |
— |
— |
|
— |
235 |
|||||
SCEM adjusted segment profit |
|
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|
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|
|||||
|
|
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MC segment profit |
|
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|
|
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|
|||||
Severance and restructuring costs |
75 |
301 |
55 |
|
181 |
985 |
|||||
Charge for fair value write-up of acquired inventory sold |
— |
— |
— |
|
— |
126 |
|||||
MC adjusted segment profit |
|
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|
|||||
|
|
|
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|
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|
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AMH segment profit |
|
|
|
|
|
|
|||||
Severance and restructuring costs |
52 |
213 |
38 |
|
127 |
1,162 |
|||||
Charge for fair value write-up of acquired inventory sold |
— |
229 |
— |
|
— |
229 |
|||||
AMH adjusted segment profit |
|
|
|
|
|
|
|||||
|
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|
|
|
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|
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Unallocated general and administrative expenses |
|
|
|
|
|
|
|||||
Unallocated deal and integration costs |
(1,290) |
(1,902) |
(632) |
|
(3,966) |
(5,796) |
|||||
Unallocated severance and restructuring costs |
(10) |
(180) |
(36) |
|
(54) |
(810) |
|||||
Adjusted unallocated general and administrative expenses |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
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Total adjusted segment profit |
|
|
|
|
|
|
|||||
Adjusted amortization of intangible assets |
— |
— |
— |
|
— |
— |
|||||
Adjusted unallocated general and administrative expenses |
7,493 |
10,189 |
13,711 |
|
30,520 |
22,135 |
|||||
Total adjusted operating income |
|
|
|
|
|
|
|||||
|
Reconciliation of GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA (In thousands) (Unaudited) |
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Three months ended |
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Nine months ended |
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Net sales |
|
|
|
|
|
|
|||||
Net income |
|
|
|
|
|
|
|||||
Net income - as a % of net sales |
20.3% |
16.5% |
15.5% |
|
17.5% |
15.5% |
|||||
Adjustments to net income: |
|
|
|
|
|
|
|||||
Income tax expense |
10,640 |
16,559 |
15,916 |
|
39,947 |
39,542 |
|||||
Interest expense, net |
9,339 |
12,651 |
10,643 |
|
31,563 |
35,681 |
|||||
Other expense (income), net |
1,917 |
(1,752) |
23,560 |
|
29,807 |
(1,351) |
|||||
GAAP - Operating income |
139,357 |
106,761 |
138,889 |
|
392,224 |
282,217 |
|||||
Operating margin - as a % of net sales |
24.0% |
22.2% |
24.3% |
|
23.6% |
21.0% |
|||||
Charge for fair value write-up of acquired inventory sold |
— |
229 |
— |
|
— |
590 |
|||||
Deal and transaction costs |
— |
642 |
— |
|
— |
2,576 |
|||||
Integration costs |
1,290 |
1,260 |
632 |
|
3,966 |
1,663 |
|||||
Severance and restructuring costs |
206 |
971 |
180 |
|
529 |
3,863 |
|||||
Amortization of intangible assets |
11,843 |
11,749 |
11,902 |
|
35,616 |
41,176 |
|||||
Adjusted operating income |
152,696 |
121,612 |
151,603 |
|
432,335 |
332,085 |
|||||
Adjusted operating margin - as a % of net sales |
26.3% |
25.3% |
26.5% |
|
26.0% |
24.8% |
|||||
Depreciation |
22,841 |
20,777 |
22,574 |
|
67,510 |
62,064 |
|||||
Adjusted EBITDA |
|
|
|
|
|
|
|||||
Adjusted EBITDA - as a % of net sales |
30.3% |
29.6% |
30.5% |
|
30.0% |
29.4% |
Reconciliation of GAAP Net Income and Diluted Earnings per Common Share to Non-GAAP Net Income and Diluted Non-GAAP Earnings per Common Share (In thousands, except per share data) (Unaudited) |
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|
Three months ended |
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Nine months ended |
|||
|
|
|
|
|
|
|
GAAP net income |
|
|
|
|
|
|
Adjustments to net income: |
|
|
|
|
|
|
Charge for fair value write-up of inventory acquired |
— |
229 |
— |
|
— |
590 |
Deal and transaction costs |
— |
642 |
— |
|
— |
2,576 |
Integration costs |
1,290 |
1,260 |
632 |
|
3,966 |
1,663 |
Severance and restructuring costs |
206 |
971 |
180 |
|
529 |
3,863 |
Loss on extinguishment of debt and modification |
— |
908 |
23,338 |
|
23,338 |
2,378 |
Amortization of intangible assets |
11,843 |
11,749 |
11,902 |
|
35,616 |
41,176 |
Tax effect of adjustments to net income and discrete items1 |
(5,417) |
(3,602) |
(8,111) |
|
(16,749) |
(11,979) |
Non-GAAP net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share |
|
|
|
|
|
|
Effect of adjustments to net income |
|
|
|
|
|
|
Diluted non-GAAP earnings per common share |
|
|
|
|
|
|
1The tax effect of pre-tax adjustments to net income was calculated using the applicable marginal tax rate during the respective years.
Reconciliation of GAAP Outlook to Non-GAAP Outlook (In millions, except per share data) (Unaudited) |
||
|
Fourth-Quarter Outlook |
|
Reconciliation GAAP net income to non-GAAP net income |
|
|
GAAP net income |
|
|
Adjustments to net income: |
|
|
Restructuring and integration costs |
2 |
|
Amortization of intangible assets |
10 |
|
Income tax effect |
(2) |
|
Non-GAAP net income |
|
|
Fourth-Quarter Outlook |
|
Reconciliation GAAP diluted earnings per share to non-GAAP diluted earnings per share |
|
|
Diluted earnings per common share |
|
|
Adjustments to diluted earnings per common share: |
|
|
Restructuring and integration costs |
0.01 |
|
Amortization of intangible assets |
0.08 |
|
Income tax effect |
(0.02) |
|
Diluted non-GAAP earnings per common share |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20211026005286/en/
VP of Investor Relations
T + 1 952 556 1844
bill.seymour@entegris.com
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