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) February 8, 2012
ENTEGRIS, INC.
(Exact name of registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation or Organization)
| 001-32598 | 41-1941551 | |
| (Commission File Number) |
(I.R.S. Employer Identification No.) |
| 129 Concord Road, Billerica, MA | 01821 | |
| (Address of principal executive offices) | (Zip Code) |
(978) 436-6500
(Registrant’s telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On February 1, 2012, the registrant issued a press release to announce financial results for the fourth quarter of 2011 and the year ended December 31, 2011. In the press release the registrant reported net income of $40.8 million, or $0.30 per share and non-GAAP earnings of $0.16 per share for the fourth quarter of 2011 and non-GAAP earnings of $0.80 per share for the year ended December 31, 2011. On February 8, 2012, the registrant discovered that the foregoing net income, earnings per share and non-GAAP earnings figures did not reflect a tax liability arising from the previously reported sale of an interest in a Japanese joint venture by the registrant’s Dutch subsidiary which resulted in U.S. taxable income even though the proceeds were not repatriated to the U.S. This resulted in a $600,000 reduction of the tax benefit on the Consolidated Statement of Operations reported in the February 1, 2012 press release and a corresponding reduction in net income to $40.2 million, revised net income per share of $0.29 or a $0.01 reduction, and revised non-GAAP net income per share of $0.15 per share, or a $0.01 reduction, for the fourth quarter of 2011 and revised non-GAAP net income per share of $0.79 per share, or a $0.01 reduction, for the year ended December 31, 2011. Revised Condensed Consolidated Statements of Operations, Revised Condensed Consolidated Balance Sheets, Revised Condensed Consolidated Statements of Cash Flows, Revised Reconciliation of GAAP to Adjusted Operating Income and Adjusted EBITA and Revised Reconciliation of GAAP to Non-GAAP Earnings per Share are attached hereto as Exhibit 99.1.
Non-GAAP Information — The Company’s consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (GAAP). Adjusted EBITDA 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. These financial measures are provided as a complement to financial measures provided in accordance with GAAP. The registrant provides non-GAAP financial measures in order to better assess and reflect operating performance. Management of the registrant believes the non-GAAP measures help indicate the registrant’s baseline performance before certain gains, losses or other charges that may not be indicative of the registrant’s business or future outlook. The registrant believes these non-GAAP measures will aid investors’ overall understanding of its results by providing a higher degree of transparency for certain expenses and providing a level of disclosure that will help investors understand how the registrant plans and measures its business. The presentation of non-GAAP measures is not meant to be considered in isolation, as a substitute for, or superior to, financial measures or information provided in accordance with GAAP. The calculations of Adjusted EBITDA margin, Adjusted Operating Income, and non-GAAP EPS are included in Exhibit 99.1 to this report.
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 (the “Exchange Act”), 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 7.01. Regulation FD Disclosure.
See the description set forth under 2.02 Results of Operations and Financial Condition above which is incorporated into this Item 7.01 by reference.
Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits |
| Exhibit 99.1 | Revised Financial Statements |
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: February 14, 2012 | By | /s/ Gregory B. Graves | ||||
| Gregory B. Graves, | ||||||
| Executive Vice President & Chief Financial Officer | ||||||
Exhibit 99.1
Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
| Three Months Ended | ||||||||||||
| December 31, 2011 |
October 1, 2011 |
December 31, 2010 |
||||||||||
| Net sales |
$ | 163,922 | $ | 173,014 | $ | 182,100 | ||||||
| Cost of sales |
96,308 | 98,186 | 101,591 | |||||||||
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|
|
|
|
|
|||||||
| Gross profit |
67,614 | 74,828 | 80,509 | |||||||||
| Selling, general and administrative expenses |
32,398 | 33,533 | 38,199 | |||||||||
| Engineering, research and development expenses |
11,029 | 11,957 | 10,997 | |||||||||
| Amortization of intangible assets |
2,462 | 2,505 | 2,772 | |||||||||
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|
|||||||
| Operating income |
21,725 | 26,833 | 28,541 | |||||||||
| Interest expense (income), net |
9 | (38 | ) | 306 | ||||||||
| Other (income) expense, net |
(102 | ) | 315 | (271 | ) | |||||||
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|
|||||||
| Income before income taxes and equity in affiliates |
21,818 | 26,556 | 28,506 | |||||||||
| Income tax (benefit) expense |
(18,333 | ) | 4,582 | (196 | ) | |||||||
| Equity in net (income) loss of affiliates |
(10 | ) | (14 | ) | 1,838 | |||||||
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|
|||||||
| Net income |
40,161 | 21,988 | 26,864 | |||||||||
| Net loss attributable to noncontrolling interest |
— | — | (139 | ) | ||||||||
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| Net income attributable to Entegris, Inc. |
$ | 40,161 | $ | 21,988 | $ | 27,003 | ||||||
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|||||||
| Amounts attributable to Entegris, Inc.: |
||||||||||||
| Basic net income per common share: |
$ | 0.30 | $ | 0.16 | $ | 0.20 | ||||||
| Diluted net income per common share: |
$ | 0.29 | $ | 0.16 | $ | 0.20 | ||||||
| Weighted average shares outstanding: |
||||||||||||
| Basic |
135,509 | 134,995 | 132,314 | |||||||||
| Diluted |
137,032 | 136,305 | 133,971 | |||||||||
Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
| Twelve months ended | ||||||||
| December 31, 2011 |
December 31, 2010 |
|||||||
| Net sales |
$ | 749,259 | $ | 688,416 | ||||
| Cost of sales |
423,329 | 377,773 | ||||||
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|
|||||
| Gross profit |
325,930 | 310,643 | ||||||
| Selling, general and administrative expenses |
140,847 | 147,051 | ||||||
| Engineering, research and development expenses |
47,980 | 43,934 | ||||||
| Amortization of intangible assets |
10,225 | 13,231 | ||||||
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|
|||||
| Operating income |
126,878 | 106,427 | ||||||
| Interest expense, net |
659 | 3,516 | ||||||
| Other (income) expense, net |
(1,745 | ) | 1,430 | |||||
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|
|||||
| Income before income taxes |
127,964 | 101,481 | ||||||
| Income tax expense |
4,217 | 15,006 | ||||||
| Equity in net (income) loss of affiliates |
(499 | ) | 1,353 | |||||
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|||||
| Net income |
124,246 | 85,122 | ||||||
| Net income attributable to noncontrolling interest |
400 | 766 | ||||||
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|||||
| Net income attributable to Entegris, Inc. |
$ | 123,846 | $ | 84,356 | ||||
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|||||
| Amounts attributable to Entegris, Inc.: |
||||||||
| Basic net income per common share: |
$ | 0.92 | $ | 0.64 | ||||
| Diluted net income per common share: |
$ | 0.91 | $ | 0.63 | ||||
| Weighted average shares outstanding: |
||||||||
| Basic |
134,685 | 131,685 | ||||||
| Diluted |
136,223 | 133,174 | ||||||
Entegris, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
| December 31, 2011 | December 31, 2010 | |||||||
| ASSETS |
||||||||
| Cash and cash equivalents |
$ | 273,593 | $ | 133,954 | ||||
| Accounts receivable, net |
107,223 | 124,732 | ||||||
| Inventories |
93,937 | 101,043 | ||||||
| Deferred tax assets, deferred tax charges and refundable income taxes |
15,805 | 11,484 | ||||||
| Other current assets and assets held for sale |
12,441 | 15,878 | ||||||
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|||||
| Total current assets |
502,999 | 387,091 | ||||||
| Property, plant and equipment, net |
130,554 | 126,725 | ||||||
| Intangible assets |
56,453 | 65,087 | ||||||
| Deferred tax assets – non-current |
25,119 | 10,855 | ||||||
| Other assets |
9,538 | 11,627 | ||||||
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| Total assets |
$ | 724,663 | $ | 601,385 | ||||
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| LIABILITIES AND EQUITY |
||||||||
| Accounts payable |
$ | 30,609 | $ | 34,631 | ||||
| Accrued liabilities |
47,841 | 59,503 | ||||||
| Income tax payable and deferred tax liabilities |
14,144 | 13,500 | ||||||
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|||||
| Total current liabilities |
92,594 | 107,634 | ||||||
| Other liabilities |
23,831 | 29,738 | ||||||
| Equity |
608,238 | 464,013 | ||||||
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|||||
| Total liabilities and equity |
$ | 724,663 | $ | 601,385 | ||||
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Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, 2011 |
December 31, 2010 |
December 31, 2011 |
December 31, 2010 |
|||||||||||||
| Operating activities: |
||||||||||||||||
| Net income |
$ | 40,161 | $ | 26,864 | $ | 124,246 | $ | 85,122 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||||||
| Depreciation |
6,547 | 7,322 | 26,839 | 27,967 | ||||||||||||
| Amortization |
2,462 | 2,772 | 10,225 | 13,231 | ||||||||||||
| Stock-based compensation expense |
1,735 | 2,154 | 7,519 | 7,588 | ||||||||||||
| Deferred tax valuation allowance and other tax items |
(19,254 | ) | (5,017 | ) | (19,367 | ) | (2,953 | ) | ||||||||
| Other |
978 | 2,881 | 541 | 2,676 | ||||||||||||
| Changes in operating assets and liabilities: |
||||||||||||||||
| Trade accounts and notes receivable |
3,652 | 971 | 19,336 | (26,789 | ) | |||||||||||
| Inventories |
7,836 | (3,056 | ) | 3,632 | (14,285 | ) | ||||||||||
| Accounts payable and accrued liabilities |
(289 | ) | 2,509 | (15,127 | ) | 34,860 | ||||||||||
| Income taxes payable and refundable income taxes |
418 | 4,813 | (433 | ) | 13,243 | |||||||||||
| Other |
270 | (2,229 | ) | (125 | ) | 238 | ||||||||||
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|||||||||
| Net cash provided by operating activities |
44,516 | 39,984 | 157,286 | 140,898 | ||||||||||||
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| Investing activities: |
||||||||||||||||
| Acquisition of property and equipment |
(6,121 | ) | (4,635 | ) | (30,267 | ) | (16,794 | ) | ||||||||
| Other |
2,440 | 317 | 1,836 | 4,809 | ||||||||||||
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|||||||||
| Net cash used in investing activities |
(3,681 | ) | (4,318 | ) | (28,431 | ) | (11,985 | ) | ||||||||
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|||||||||
| Financing activities: |
||||||||||||||||
| Payments on short-term borrowings and long-term debt |
— | (6,203 | ) | — | (259,157 | ) | ||||||||||
| Proceeds from short-term and long-term borrowings |
— | — | — | 186,649 | ||||||||||||
| Issuance of common stock |
6,034 | 5,136 | 11,690 | 6,799 | ||||||||||||
| Other |
259 | 85 | (826 | ) | — | |||||||||||
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| Net cash provided by (used in) financing activities |
6,293 | (982 | ) | 10,864 | (65,709 | ) | ||||||||||
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| Effect of exchange rate changes on cash |
(572 | ) | 456 | (80 | ) | 2,050 | ||||||||||
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|||||||||
| Increase in cash and cash equivalents |
46,556 | 35,140 | 139,639 | 65,254 | ||||||||||||
| Cash and cash equivalents at beginning of period |
227,037 | 98,814 | 133,954 | 68,700 | ||||||||||||
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| Cash and cash equivalents at end of period |
$ | 273,593 | $ | 133,954 | $ | 273,593 | $ | 133,954 | ||||||||
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Entegris, Inc. and Subsidiaries
Segment Information
(In thousands)
(Unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
| Net sales |
December 31, 2011 |
October 1, 2011 |
December 31, 2010 |
December 31, 2011 |
December 31, 2010 |
|||||||||||||||
| Contamination Control Solutions |
$ | 105,062 | $ | 110,015 | $ | 118,106 | $ | 483,958 | $ | 435,858 | ||||||||||
| Microenvironments |
40,116 | 42,738 | 45,772 | 182,150 | 182,485 | |||||||||||||||
| Specialty Materials |
18,744 | 20,261 | 18,222 | 83,151 | 70,073 | |||||||||||||||
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| Total net sales |
$ | 163,922 | $ | 173,014 | $ | 182,100 | $ | 749,259 | $ | 688,416 | ||||||||||
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| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
| Segment profit |
December 31, 2011 |
October 1, 2011 |
December 31, 2010 |
December 31, 2011 |
December 31, 2010 |
|||||||||||||||
| Contamination Control Solutions |
$ | 26,082 | $ | 29,522 | $ | 34,609 | $ | 140,313 | $ | 122,891 | ||||||||||
| Microenvironments |
6,201 | 6,790 | 7,602 | 29,959 | 38,930 | |||||||||||||||
| Specialty Materials |
4,340 | 4,675 | 2,847 | 18,255 | 11,080 | |||||||||||||||
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| Total segment profit |
36,623 | 40,987 | 45,058 | 188,527 | 172,901 | |||||||||||||||
| Amortization of intangibles |
(2,462 | ) | (2,505 | ) | (2,772 | ) | (10,225 | ) | (13,231 | ) | ||||||||||
| Unallocated expenses |
(12,436 | ) | (11,649 | ) | (13,745 | ) | (51,424 | ) | (53,243 | ) | ||||||||||
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| Total operating income |
$ | 21,725 | $ | 26,833 | $ | 28,541 | $ | 126,878 | $ | 106,427 | ||||||||||
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Entegris, Inc. and Subsidiaries
Reconciliation of GAAP to Adjusted Operating Income and Adjusted EBITDA
(In thousands)
(Unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
| December 31, 2011 |
October 1, 2011 |
December 31, 2010 |
December 31, 2011 |
December 31, 2010 |
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| Net sales |
$ | 163,922 | $ | 173,014 | $ | 182,100 | $ | 749,259 | $ | 688,416 | ||||||||||
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| Net income attributable to Entegris, Inc. |
$ | 40,161 | $ | 21,988 | $ | 27,003 | $ | 123,846 | $ | 84,356 | ||||||||||
| Adjustments to net income attributable to Entegris, Inc. |
||||||||||||||||||||
| Net (loss) income attributable to noncontrolling interest |
— | — | (139 | ) | 400 | 766 | ||||||||||||||
| Equity in net (income) loss of affiliates |
(10 | ) | (14 | ) | 1,838 | (499 | ) | 1,353 | ||||||||||||
| Income tax (benefit) expense |
(18,333 | ) | 4,582 | (196 | ) | 4,217 | 15,006 | |||||||||||||
| Other (income) expense, net |
(102 | ) | 315 | (271 | ) | (1,745 | ) | 1,430 | ||||||||||||
| Interest expense (income), net |
9 | (38 | ) | 306 | 659 | 3,516 | ||||||||||||||
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| GAAP – Operating income |
21,725 | 26,833 | 28,541 | 126,878 | 106,427 | |||||||||||||||
| Amortization of intangible assets |
2,462 | 2,505 | 2,772 | 10,225 | 13,231 | |||||||||||||||
| Gain associated with pension curtailment |
— | (726 | ) | — | (726 | ) | — | |||||||||||||
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| Adjusted operating income |
24,187 | 28,612 | 31,313 | 136,377 | 119,658 | |||||||||||||||
| Depreciation |
6,547 | 6,763 | 7,322 | 26,839 | 27,967 | |||||||||||||||
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| Adjusted EBITDA |
$ | 30,734 | $ | 35,375 | $ | 38,635 | $ | 163,216 | $ | 147,625 | ||||||||||
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| Adjusted operating margin |
14.8 | % | 16.5 | % | 17.2 | % | 18.2 | % | 17.4 | % | ||||||||||
| Adjusted EBITDA – as a % of net sales |
18.7 | % | 20.4 | % | 21.2 | % | 21.8 | % | 21.4 | % | ||||||||||
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Entegris, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Earnings per Share
(In thousands)
(Unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
| December 31, 2011 |
October 1, 2011 |
December 31, 2010 |
December 31, 2011 |
December 31, 2010 |
||||||||||||||||
| GAAP net income attributable to Entegris, Inc. |
$ | 40,161 | $ | 21,988 | $ | 27,003 | $ | 123,846 | $ | 84,356 | ||||||||||
| Adjustments to net income attributable to Entegris, Inc.: |
||||||||||||||||||||
| Amortization of intangible assets |
2,462 | 2,505 | 2,772 | 10,225 | 13,231 | |||||||||||||||
| Accelerated write-off of debt costs |
— | — | — | 282 | 890 | |||||||||||||||
| Gain on sale of equity investment |
— | — | — | (1,523 | ) | (892 | ) | |||||||||||||
| Gain associated with pension curtailment |
— | (726 | ) | — | (726 | ) | — | |||||||||||||
| Reversal of deferred tax valuation allowance (1) |
(20,999 | ) | — | — | (20,999 | ) | — | |||||||||||||
| Impairment of equity investment |
— | — | 2,164 | — | 2,164 | |||||||||||||||
| Tax effect of adjustments to net income attributable to Entegris, Inc. |
(863 | ) | (458 | ) | (1,022 | ) | (3,355 | ) | (4,871 | ) | ||||||||||
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| Non-GAAP net income attributable to Entegris, Inc. |
$ | 20,761 | $ | 23,309 | $ | 30,917 | $ | 107,750 | $ | 94,878 | ||||||||||
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| Diluted earnings per common share attributable to Entegris, Inc.: |
$ | 0.29 | $ | 0.16 | $ | 0.20 | $ | 0.91 | $ | 0.63 | ||||||||||
| Effect of adjustments to net income attributable to Entegris, Inc. |
$ | 0.14 | $ | 0.01 | $ | 0.03 | $ | 0.12 | $ | 0.08 | ||||||||||
| Diluted non-GAAP earnings per common share attributable to Entegris, Inc.: |
$ | 0.15 | $ | 0.17 | $ | 0.23 | $ | 0.79 | $ | 0.71 | ||||||||||
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| (1) | This amount represents the reversal of the remaining valuation allowance on certain of the Company’s deferred tax assets. The amount excludes the reversal of the valuation allowance on those deferred tax assets realized in 2011 and 2010 based on earnings in those years. |