entg-20200421
0001101302ENTEGRIS INCfalse00011013022020-04-212020-04-21
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) April 21, 2020
_______________________________________
Entegris, Inc.
(Exact name of registrant as specified in its charter)
_______________________________________
| | | | | | | | | | | | | | |
Delaware | | 001-32598 | | 41-1941551 |
(State or Other Jurisdiction of Incorporation) | | (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))
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | | | | | | | |
Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
Common stock, $0.01 par value per share | | ENTG | | The Nasdaq Stock Market LLC |
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 April 21, 2020, Entegris, Inc. issued a press release to announce results for the first quarter of 2020 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 INDEX
| | | | | | | | |
Exhibit No. | | Description |
99.1 | | |
99.2 | | |
101.INS | | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
101.SCH | | XBRL Taxonomy Extension Schema Document |
101.CAL | | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | | XBRL Taxonomy Extension Presentation Linkbase Document |
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: April 21, 2020 | By: | /s/ Gregory B. Graves |
| Name: | Gregory B. Graves |
| Title: | Executive Vice President and Chief Financial Officer |
Document
| | | | | | | | | | | | | | |
| | | PRESS RELEASE
Bill Seymour VP of Investor Relations T + 1 952 556 1844 bill.seymour@entegris.com
| |
Exhibit 99.1
FOR RELEASE AT 6:00 AM EST
ENTEGRIS REPORTS RESULTS FOR FIRST QUARTER OF 2020
•First-quarter revenue of $412.3 million, increased 5% from prior year
•First-quarter GAAP diluted EPS of $0.45, increased 88%
•First-quarter Non-GAAP diluted EPS of $0.55, increased 10%
BILLERICA, Mass., April 21, 2020 - Entegris, Inc. (NASDAQ: ENTG), today reported its financial results for the Company’s first quarter ended March 28, 2020.
First-quarter sales were $412.3 million, an increase of 5% from the same quarter last year. GAAP first-quarter net income was $61.0 million, or $0.45 per diluted share, which included $16.2 million of amortization of intangible assets and $1.4 million in deal and transaction costs. Non-GAAP net income was $75.6 million and non-GAAP net income per diluted share was $0.55.
Bertrand Loy, president and chief executive officer, said: “During these unprecedented times, our first priority is to ensure the health and safety of our colleagues and families, while continuing to provide exceptional service to our customers. In light of the significant challenges from Covid-19, I’m pleased with our first quarter results. Despite major supply-chain shutdowns across many industries, our manufacturing operations were only modestly impacted by Covid-19, as a direct result of the extraordinary efforts of our Entegris teams and extended supply chain partners around the world.”
Mr. Loy added: “While the demand for our products will likely be impacted by the ongoing effects of Covid-19 on the global economy, we remain very optimistic about the long-term prospects of the industry and the criticality of our solutions. Our team has very effectively managed challenging times in the past and will take the necessary steps to align our business to market conditions as they evolve. Entegris is in a strong financial position and has sufficient liquidity to navigate through this environment.”
Quarterly Financial Results Summary
(in thousands, except percentages and per share data)
| | | | | | | | | | | |
GAAP Results | March 28, 2020 | March 30, 2019 | December 31, 2019 |
Net sales | $412,327 | $391,047 | $426,998 |
Operating income | $80,744 | $47,491 | $84,085 |
Operating margin | 19.6 | % | 12.1 | % | 19.7 | % |
Net income | $61,006 | $32,658 | $57,438 |
Diluted earnings per share (EPS) | $0.45 | $0.24 | $0.42 |
| | | |
Non-GAAP Results | | | |
Non-GAAP adjusted operating income | $99,638 | $92,180 | $104,647 |
Non-GAAP adjusted operating margin | 24.2 | % | 23.6 | % | 24.5 | % |
Non-GAAP net income | $75,571 | $67,894 | $74,582 |
Non-GAAP EPS | $0.55 | $0.50 | $0.55 |
| | | |
Second-Quarter Outlook
For the second quarter ending June 27, 2020, the Company expects sales of $410 million to $430 million, net income of $50 million to $59 million and net income per diluted share between $0.37 and $0.43. On a non-GAAP basis, EPS is expected to range from $0.45 to $0.51 per diluted share, which reflects net income on a non-GAAP basis in the range of $61 million to $70 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.
First-Quarter Results Conference Call Details
Entegris will hold a conference call to discuss its results for the first quarter on Tuesday, April 21, 2020, at 9:00 a.m. Eastern Time. Participants should dial 888-254-3590 or +1 323-994-2093, referencing confirmation code 3810279. 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 3810279.
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 first quarter, which may be referred to during the call, will be posted on the investor relations section of www.entegris.com Tuesday morning before the call.
Entegris, Inc. - page 2 of 13
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 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, including the expected impact of the Covid-19 pandemic; 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; 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; 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, 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
Entegris, Inc. - page 3 of 13
Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed on February 7, 2020, 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. - page 4 of 13
Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | | | |
| | Three months ended | | |
| | March 28, 2020 | March 30, 2019 | December 31, 2019 |
Net sales | | | $ | 412,327 | | $ | 391,047 | | $ | 426,998 | |
Cost of sales | | | 226,849 | | 213,654 | | 229,362 | |
| Gross profit | | 185,478 | | 177,393 | | 197,636 | |
Selling, general and administrative expenses | | | 58,891 | | 82,254 | | 67,171 | |
Engineering, research and development expenses | | | 29,632 | | 28,991 | | 30,352 | |
Amortization of intangible assets | | | 16,211 | | 18,657 | | 16,028 | |
| Operating income | | 80,744 | | 47,491 | | 84,085 | |
Interest expense, net | | | 10,238 | | 9,659 | | 12,743 | |
Other expense (income), net | | | 878 | | (248) | | 248 | |
| Income before income tax expense | | 69,628 | | 38,080 | | 71,094 | |
Income tax expense | | | 8,622 | | 5,422 | | 13,656 | |
| Net income | | $ | 61,006 | | $ | 32,658 | | $ | 57,438 | |
| | | | |
| | | | |
Basic net income per common share: | | | $ | 0.45 | | $ | 0.24 | | $ | 0.43 | |
Diluted net income per common share: | | | $ | 0.45 | | $ | 0.24 | | $ | 0.42 | |
| | | | |
Weighted average shares outstanding: | | | | | |
| Basic | | 134,745 | | 135,299 | | 134,778 | |
| Diluted | | 136,369 | | 136,692 | | 136,470 | |
Entegris, Inc. - page 5 of 13
Entegris, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | | March 28, 2020 | | December 31, 2019 |
ASSETS | | | | | | |
Current assets: | | | | | | |
Cash and cash equivalents | | | | $ | 335,077 | | | $ | 351,911 | |
Trade accounts and notes receivable, net | | | | 277,796 | | | 234,409 | |
Inventories, net | | | | 300,694 | | | 287,098 | |
Deferred tax charges and refundable income taxes | | | | 25,650 | | | 24,552 | |
Other current assets | | | | 27,089 | | | 34,427 | |
Total current assets | | | | 966,306 | | | 932,397 | |
Property, plant and equipment, net | | | | 474,841 | | | 479,544 | |
Other assets: | | | | | | |
Right-of-use assets | | | | 50,058 | | | 50,160 | |
Goodwill | | | | 726,234 | | | 695,044 | |
Intangible assets, net | | | | 355,815 | | | 333,952 | |
Deferred tax assets and other noncurrent tax assets | | | | 11,563 | | | 11,245 | |
Other | | | | 13,748 | | | 13,744 | |
Total assets | | | | $ | 2,598,565 | | | $ | 2,516,086 | |
LIABILITIES AND EQUITY | | | | | | |
Current liabilities | | | | | | |
Long-term debt, current maturities | | | | $ | 4,000 | | | $ | 4,000 | |
Accounts payable | | | | 81,561 | | | 84,207 | |
Accrued liabilities | | | | 90,447 | | | 150,118 | |
Income tax payable | | | | 25,982 | | | 26,108 | |
Total current liabilities | | | | 201,990 | | | 264,433 | |
Long-term debt, excluding current maturities | | | | 1,074,888 | | | 932,484 | |
Long-term lease liability | | | | 43,549 | | | 43,827 | |
Other liabilities | | | | 106,811 | | | 109,453 | |
Shareholders’ equity | | | | 1,171,327 | | | 1,165,889 | |
Total liabilities and equity | | | | $ | 2,598,565 | | | $ | 2,516,086 | |
Entegris, Inc. - page 6 of 13
Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| | | | | | | | | | |
| Three months ended | | | |
| March 28, 2020 | March 30, 2019 | | |
Operating activities: | | | | |
Net income | $ | 61,006 | | $ | 32,658 | | | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | |
Depreciation | 20,648 | | 16,721 | | | |
Amortization | 16,211 | | 18,657 | | | |
Stock-based compensation expense | 4,994 | | 4,653 | | | |
| | | | |
| | | | |
Other | 5,563 | | 5,694 | | | |
Changes in operating assets and liabilities, net of effects of acquisitions: | | | | |
Trade accounts and notes receivable | (43,995) | | (9,109) | | | |
Inventories | (18,205) | | (2,131) | | | |
Accounts payable and accrued liabilities | (38,020) | | (45,019) | | | |
Income taxes payable, refundable income taxes and noncurrent taxes payable | (225) | | (42,873) | | | |
Other | 3,426 | | 18,211 | | | |
Net cash provided by (used in) operating activities | 11,403 | | (2,538) | | | |
Investing activities: | | | | |
Acquisition of property and equipment | (22,585) | | (34,465) | | | |
Acquisition of business, net of cash | (75,630) | | (49,789) | | | |
Other | 5 | | 197 | | | |
Net cash used in investing activities | (98,210) | | (84,057) | | | |
Financing activities: | | | | |
Proceeds from short-term borrowings and long-term debt | 217,000 | | — | | | |
Payments on long-term debt | (75,000) | | (1,000) | | | |
Dividend payments | (10,847) | | (9,470) | | | |
| | | | |
Issuance of common stock | 551 | | 917 | | | |
Taxes paid related to net share settlement of equity awards | (11,440) | | (7,727) | | | |
Repurchase and retirement of common stock | (29,654) | | (35,321) | | | |
Deferred acquisition payments | (16,125) | | — | | | |
Other | (2,890) | | (250) | | | |
Net cash provided by (used in) financing activities | 71,595 | | (52,851) | | | |
Effect of exchange rate changes on cash and cash equivalents | (1,712) | | (256) | | | |
(Decrease) in cash and cash equivalents | (16,924) | | (139,702) | | | |
Cash and cash equivalents at beginning of period | 351,911 | | 482,062 | | | |
Cash and cash equivalents at end of period | $ | 334,987 | | $ | 342,360 | | | |
Entegris, Inc. - page 7 of 13
Entegris, Inc. and Subsidiaries
Segment Information
(In thousands)
(Unaudited)
| | | | | | | | | | | | | |
| Three months ended | | | | |
Net sales | March 28, 2020 | March 30, 2019 | December 31, 2019 | | |
Specialty Chemicals and Engineered Materials | $ | 144,214 | | $ | 124,470 | | $ | 146,747 | | | |
Microcontamination Control | 159,261 | | 157,706 | | 169,794 | | | |
Advanced Materials Handling | 116,137 | | 116,064 | | 117,455 | | | |
Inter-segment elimination | (7,285) | | (7,193) | | (6,998) | | | |
Total net sales | $ | 412,327 | | $ | 391,047 | | $ | 426,998 | | | |
| | | | | | | | | | | | | |
| Three months ended | | | | |
Segment profit | March 28, 2020 | March 30, 2019 | December 31, 2019 | | |
Specialty Chemicals and Engineered Materials | $ | 32,670 | | $ | 24,431 | | $ | 32,822 | | | |
Microcontamination Control | 50,167 | | 47,323 | | 57,157 | | | |
Advanced Materials Handling | 20,632 | | 22,367 | | 20,686 | | | |
Total segment profit | 103,469 | | 94,121 | | 110,665 | | | |
Amortization of intangibles | 16,211 | | 18,657 | | 16,028 | | | |
Unallocated expenses | 6,514 | | 27,973 | | 10,552 | | | |
Total operating income | $ | 80,744 | | $ | 47,491 | | $ | 84,085 | | | |
Entegris, Inc. - page 8 of 13
Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Gross Profit to Adjusted Gross Profit
(In thousands)
(Unaudited)
| | | | | | | | | | | | | |
| Three months ended | | | | |
| March 28, 2020 | March 30, 2019 | December 31, 2019 | | |
Net sales | $ | 412,327 | | $ | 391,047 | | $ | 426,998 | | | |
Gross profit-GAAP | $ | 185,478 | | $ | 177,393 | | $ | 197,636 | | | |
Adjustments to gross profit: | | | | | |
Severance and restructuring costs | — | | 358 | | (12) | | | |
Charge for fair value mark-up of acquired inventory sold | 361 | | 2,155 | | 211 | | | |
Adjusted gross profit | $ | 185,839 | | $ | 179,906 | | $ | 197,835 | | | |
| | | | | |
Gross margin - as a % of net sales | 45.0 | % | 45.4 | % | 46.3 | % | | |
Adjusted gross margin - as a % of net sales | 45.1 | % | 46.0 | % | 46.3 | % | | |
Entegris, Inc. - page 9 of 13
Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Segment Profit to Adjusted Operating Income
(In thousands)
(Unaudited)
| | | | | | | | | | | | | |
| Three months ended | | | | |
Segment profit-GAAP | March 28, 2020 | March 30, 2019 | December 31, 2019 | | |
Specialty Chemicals and Engineered Materials (SCEM) | $ | 32,670 | | $ | 24,431 | | $ | 32,822 | | | |
Microcontamination Control (MC) | 50,167 | | 47,323 | | 57,157 | | | |
Advanced Materials Handling (AMH) | 20,632 | | 22,367 | | 20,686 | | | |
Total segment profit | 103,469 | | 94,121 | | 110,665 | | | |
Amortization of intangible assets | 16,211 | | 18,657 | | 16,028 | | | |
Unallocated expenses | 6,514 | | 27,973 | | 10,552 | | | |
Total operating income | $ | 80,744 | | $ | 47,491 | | $ | 84,085 | | | |
| | | | | | | | | | | | | |
| Three months ended | | | | |
Adjusted segment profit | March 28, 2020 | March 30, 2019 | December 31, 2019 | | |
SCEM segment profit | $ | 32,670 | | $ | 24,431 | | $ | 32,822 | | | |
Severance and restructuring costs | 174 | | 519 | | 184 | | | |
Charge for fair value write-up of acquired inventory sold | 235 | | 120 | | (476) | | | |
SCEM adjusted segment profit | $ | 33,079 | | $ | 25,070 | | $ | 32,530 | | | |
| | | | | |
MC segment profit | $ | 50,167 | | $ | 47,323 | | $ | 57,157 | | | |
Severance and restructuring costs | 190 | | 724 | | 195 | | | |
Charge for fair value write-up of acquired inventory sold | 126 | | 2,035 | | 687 | | | |
MC adjusted segment profit | $ | 50,483 | | $ | 50,082 | | $ | 58,039 | | | |
| | | | | |
AMH segment profit | $ | 20,632 | | $ | 22,367 | | $ | 20,686 | | | |
Severance and restructuring costs | 135 | | 578 | | (379) | | | |
| | | | | |
AMH adjusted segment profit | $ | 20,767 | | $ | 22,945 | | $ | 20,307 | | | |
| | | | | |
Unallocated general and administrative expenses | $ | 6,514 | | $ | 27,973 | | $ | 10,552 | | | |
Unallocated deal and integration costs | (1,479) | | (22,056) | | (4,323) | | | |
Unallocated severance and restructuring costs | (344) | | — | | — | | | |
Adjusted unallocated general and administrative expenses | $ | 4,691 | | $ | 5,917 | | $ | 6,229 | | | |
| | | | | |
Total adjusted segment profit | $ | 104,329 | | $ | 98,097 | | $ | 110,876 | | | |
Adjusted amortization of intangible assets | — | | — | | — | | | |
Adjusted unallocated expenses | 4,691 | | 5,917 | | 6,229 | | | |
Total adjusted operating income | $ | 99,638 | | $ | 92,180 | | $ | 104,647 | | | |
Entegris, Inc. - page 10 of 13
Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA
(In thousands)
(Unaudited)
| | | | | | | | | | | | | |
| Three months ended | | | | |
| March 28, 2020 | March 30, 2019 | December 31, 2019 | | |
Net sales | $ | 412,327 | | $ | 391,047 | | $ | 426,998 | | | |
Net income | $ | 61,006 | | $ | 32,658 | | $ | 57,438 | | | |
Adjustments to net income: | | | | | |
Income tax expense | 8,622 | | 5,422 | | 13,656 | | | |
Interest expense, net | 10,238 | | 9,659 | | 12,743 | | | |
Other expense (income), net | 878 | | (248) | | 248 | | | |
GAAP - Operating income | 80,744 | | 47,491 | | 84,085 | | | |
Charge for fair value write-up of acquired inventory sold | 361 | | 2,155 | | 211 | | | |
Deal and transaction costs | 1,431 | | 19,136 | | 973 | | | |
Integration costs | 48 | | 2,920 | | 3,350 | | | |
Severance and restructuring costs | 843 | | 1,821 | | — | | | |
| | | | | |
Amortization of intangible assets | 16,211 | | 18,657 | | 16,028 | | | |
Adjusted operating income | 99,638 | | 92,180 | | 104,647 | | | |
Depreciation | 20,648 | | 16,721 | | 20,352 | | | |
Adjusted EBITDA | $ | 120,286 | | $ | 108,901 | | $ | 124,999 | | | |
| | | | | |
Net income - as a % of net sales | 14.8 | % | 8.4 | % | 13.5 | % | | |
Adjusted operating margin | 24.2 | % | 23.6 | % | 24.5 | % | | |
Adjusted EBITDA - as a % of net sales | 29.2 | % | 27.8 | % | 29.3 | % | | |
Entegris, Inc. - page 11 of 13
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 | | | | |
| March 28, 2020 | March 30, 2019 | December 31, 2019 | | |
GAAP net income | $ | 61,006 | | $ | 32,658 | | $ | 57,438 | | | |
Adjustments to net income: | | | | | |
Charge for fair value write-up of inventory acquired | 361 | | 2,155 | | 211 | | | |
Deal and transaction costs | 1,431 | | 19,547 | | 973 | | | |
Integration costs | 48 | | 2,920 | | 3,350 | | | |
Severance and restructuring costs | 843 | | 1,821 | | — | | | |
Loss on debt extinguishment and modification | — | | — | | 1,980 | | | |
| | | | | |
| | | | | |
Amortization of intangible assets | 16,211 | | 18,657 | | 16,028 | | | |
| | | | | |
Tax effect of adjustments to net income and discrete items1 | (4,329) | | (9,864) | | (5,398) | | | |
| | | | | |
Non-GAAP net income | $ | 75,571 | | $ | 67,894 | | $ | 74,582 | | | |
| | | | | |
Diluted earnings per common share | $ | 0.45 | | $ | 0.24 | | $ | 0.42 | | | |
Effect of adjustments to net income | $ | 0.11 | | $ | 0.26 | | $ | 0.13 | | | |
Diluted non-GAAP earnings per common share | $ | 0.55 | | $ | 0.50 | | $ | 0.55 | | | |
1The tax effect of pre-tax adjustments to net income was calculated using the applicable marginal tax rate during the respective years.
Entegris, Inc. - page 12 of 13
Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Outlook to Non-GAAP Outlook
(In millions, except per share data)
(Unaudited)
| | | | | |
| Second-Quarter Outlook |
Reconciliation GAAP net income to non-GAAP net income | June 27, 2020 |
GAAP net income | $50 - $59 | |
Adjustments to net income: | |
Restructuring and integration costs | 2 | |
Amortization of intangible assets | 12 | |
Income tax effect | (3) | |
Non-GAAP net income | $61 - $70 | |
| | | | | |
| Second-Quarter Outlook |
Reconciliation GAAP diluted earnings per share to non-GAAP diluted earnings per share | June 27, 2020 |
Diluted earnings per common share | $0.37 - $0.43 | |
Adjustments to diluted earnings per common share: | |
Restructuring and integration costs | 0.01 | |
Amortization of intangible assets | 0.09 | |
Income tax effect | (0.02) | |
Diluted non-GAAP earnings per common share | $0.45 to $0.51 | |
### END ###
Entegris, Inc. - page 13 of 13
q12020exhibit992
Exhibit 99.2 Earnings Summary First Quarter 2020 April 21, 2020
SAFE HARBOR This presentation 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, including the expected impact of the Covid-19 pandemic; 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; 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; 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, 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, 2019, filed on February 7, 2020, 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. This presentation contains references to “Adjusted EBITDA,” “Adjusted EBITDA Margin,” “Adjusted EBITDA – as a % of Net Sales”, “Adjusted Operating Income,” “Adjusted Operating Margin”, “Adjusted Gross Profit,” “Adjusted Gross Profit Margin”, “Adjusted Segment Profit”, “Adjusted Segment Profit Margin”, “Non-GAAP Operating Expenses”, “Non- GAAP Net Income” and “Diluted 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
First Quarter 2020 Financial Summary 1 $0.45 +88% $412MM +5% GAAP EPS REVENUE $0.55 +10% NON-GAAP EPS 4 $120MM +10% $212MM +44% 3 ADJUSTED EBITDA2 TTM FREE CASH FLOW 1. All growth data on this slide is year-on-year. 2. See appendix for EBITDA reconciliations. 3. Free cash flow equals cash from operations less capital expenditures. 4. Excludes Versum transaction termination fee, net of $83.4 million. 3
Summary – Consolidated Statement of Operations (GAAP) 1Q20 over 1Q20 over $ in millions, except per share data 1Q20 1Q20 Guidance 4Q19 1Q19 1Q19 4Q19 Net Revenue $412.3 $415 - $430 $427.0 $391.0 5.4% (3.4)% Gross Margin 45.0% 46.3% 45.4% Operating Expenses $104.7 $111 - $113 $113.6 $129.9 (19.4)% (7.8)% Operating Income $80.7 $84.1 $47.5 69.9% (4.0)% Operating Margin 19.6% 19.7% 12.1% Tax Rate 12.4% 19.2% 14.2% Net Income $61.0 $56 - $63 $57.4 $32.7 86.5% 6.3% Earnings per diluted share $0.45 $0.41 - $0.46 $0.42 $0.24 87.5% 7.1% 4
Summary – Consolidated Statement of Operations (Non-GAAP) 1 1Q20 over 1Q20 over $ in millions, except per share data 1Q20 1Q20 Guidance 4Q19 1Q19 1Q19 4Q19 Net Revenue $412.3 $415 - $430 $427.0 $391.0 5.4% (3.4)% Adjusted Gross Margin2 45.1% 46.3% 46.0% Non-GAAP Operating Expenses3 $86.2 $96 - $98 $93.2 $87.7 (1.7)% (7.5)% Adjusted Operating Income $99.6 $104.6 $92.2 8.0% (4.8)% Adjusted Operating Margin 24.2% 24.5% 23.6% Non-GAAP Tax Rate4 14.6% 20.3% 18.4% Non-GAAP Net Income5 $75.6 $68 - $75 $74.6 $67.9 11.3% 1.3% Non-GAAP EPS 0.55 $0.50 - $0.55 $0.55 $0.50 10.0% —% 1. See GAAP to Non-GAAP reconciliation tables in the appendix of this presentation. 2. Adjusted Gross Margin excludes charges for fair value write-up of acquired inventory sold and severance and restructuring costs. 3. Non-GAAP Operating Expenses exclude amortization expense, deal and transaction costs, integration costs and severance and restructuring costs. 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. 5
Specialty Chemicals and Engineered Materials Segment (SCEM) 1 1Q20 Highlights 1Q20 over 1Q20 over 1Q20 SCEM Highlights $ in millions 1Q20 4Q19 1Q19 1Q19 4Q19 • Sales growth (YOY): primarily driven by Net Revenue $144.2 $146.7 $124.5 15.8% (1.7)% advanced deposition materials, cleaning chemistries, and the positive impact of the DSC, Segment Profit $32.7 $32.8 $24.4 34.0% (0.3)% MPD and Sinmat acquisitions. Segment Profit Margin 22.7% 22.4% 19.6% • Sales decline (SEQ): primarily driven by specialty materials. Adj. Segment Profit $33.1 $32.5 $25.1 31.9% 1.8% • Adj. Profit Margin increase (YOY): driven Adj. Segment Profit Margin 22.9% 22.2% 20.1% primarily by higher volume and good expense control. 1. See GAAP to Non-GAAP reconciliation tables in the appendix of this presentation. 6
Microcontamination Control (MC)1 1Q20 Highlights 1Q20 over 1Q20 over 1Q20 MC Highlights $ in millions 1Q20 4Q19 1Q19 1Q19 4Q19 • Sales growth (YOY): growth in liquid filtration, Net Revenue $159.3 $169.8 $157.7 1.0% (6.2)% gas filtration and the impact of the Anow acquisition; more than offset declines in gas Segment Profit $50.2 $57.2 $47.3 6.1% (12.2)% purification. Segment Profit Margin 31.5% 33.7% 30.0% • Sales decline (SEQ): primarily driven by gas purification, which was impacted the temporary Adj. Segment Profit $50.5 $58.0 $50.1 0.8% (12.9)% supply chain issues at our California facility. Adj. Segment Profit Margin 31.7% 34.2% 31.8% • Adj. Profit Margin decline (SEQ): driven primarily by the lower volumes and manufacturing inefficiencies. 1. See GAAP to Non-GAAP reconciliation tables in the appendix of this presentation. 7
Advanced Materials Handling (AMH) 1 1Q20 Highlights 1Q20 over 1Q20 over 1Q20 AMH Highlights $ in millions 1Q20 4Q19 1Q19 1Q19 4Q19 • Sales decline (SEQ): primarily driven by wafer Net Revenue $116.1 $117.5 $116.1 —% (1.2)% reticle handling and sensing products. • Adj. Profit Margin increase (SEQ): driven Segment Profit $20.6 $20.7 $22.4 (8.0)% (0.5)% primarily by solid cost management. Segment Profit Margin 17.8% 17.6% 19.3% Adj. Segment Profit $20.8 $20.3 $22.9 (9.2)% 2.5% Adj. Segment Profit Margin 17.9% 17.3% 19.8% 1. See GAAP to Non-GAAP reconciliation tables in the appendix of this presentation. 8
Summary – Balance Sheet Items $ in millions 1Q20 4Q19 1Q19 $ Amount % Total $ Amount % Total $ Amount % Total Cash & Cash Equivalents $335.1 12.9% $351.9 14.0% $342.4 14.8% Accounts Receivable, net $277.8 10.7% $234.4 9.3% $232.1 10.0% Inventories $300.7 11.6% $287.1 11.4% $271.5 11.7% Net PP&E $474.8 18.3% $479.5 19.1% $442.4 19.1% Total Assets $2,598.6 $2,516.1 $2,314.0 Current Liabilities1 $202.0 7.8% $264.4 10.5% $212.8 9.2% Long-term debt, excluding current maturities $1,074.9 41.4% $932.5 37.1% $934.3 40.4% Total Liabilities $1,427.3 54.9% $1,350.2 53.7% $1,313.5 56.8% Total Shareholders’ Equity $1,171.3 45.1% $1,165.9 46.3% $1,000.5 43.2% AR – DSOs 61.5 50.1 54.2 Inventory Turns 3.1 3.2 3.2 1. Current Liabilities includes $4 million of current maturities of long term debt. 9
Cash Flows $ in millions 1Q20 4Q19 1Q19 Beginning Cash Balance $351.9 $282.7 $482.1 Cash provided by operating activities $11.4 $128.6 ($2.5) Capital expenditures ($22.6) ($25.9) ($34.5) Proceeds from short-term borrowings and long-term debt $217.0 — — Payments on long-term debt ($75.0) ($2.0) ($1.0) Acquisition of business, net of cash ($75.6) ($11.0) ($49.8) Repurchase and retirement of common stock ($29.7) ($15.0) ($35.3) Dividend payments ($10.8) ($10.8) ($9.5) Other investing activities — $1.1 $0.2 Other financing activities ($29.9) $2.8 ($7.1) Effect of exchange rates ($1.7) $1.4 ($0.2) Ending Cash Balance $335.0 $351.9 $342.4 Free Cash Flow1 ($11.2) $102.7 ($37.0) Adjusted EBITDA $120.3 $125.0 $108.9 Adjusted EBITDA % 29.2% 29.3% 27.8% 1. Free cash flow equals cash from operations less capital expenditures. 10
Outlook GAAP $ in millions, except per share data 2Q20 Guidance 1Q20 Actual 1Q19 Actual Net Revenue $410 - $430 $412.3 $391.0 Operating Expenses $102 - $104 $104.7 $129.9 Net Income $50 - $59 $61.0 $32.7 Earnings (Per Diluted Share) $0.37 - $0.43 $0.45 $0.24 Non-GAAP $ in millions, except per share data 2Q20 Guidance 1Q20 Actual 1Q19 Actual Net Revenue $410 - $430 $412.3 $391.0 Non-GAAP Operating Expenses1 $88 - $90 $86.2 $87.7 Non-GAAP Net Income1 $61 - $70 $75.6 $67.9 Non-GAAP EPS1 $0.45 - $0.51 $0.55 $0.50 1. See GAAP to Non-GAAP reconciliation tables in the appendix of this presentation. 11
Liquidity and Capital Structure (as of 3/28/2020) $ millions Liquidity U.S. Cash $134 Foreign Cash $201 Total Cash $335 Undrawn Revolving Credit Facility $158 Total Liquidity $493 Debt Structure Covenants Senior Secured Term Loan (due 2025) $396 No maintenance covenants Senior Unsecured Notes (due 2026) $550 No maintenance covenants Revolving Credit Facility (drawn amount)1 $142 3.25x secured net leverage 1. Springing covenant when borrowings exceed $105 million. Current covenant calculation: <1x (well below 3.25x threshold). 12
Entegris®, the Entegris Rings Design-™ and Pure Advantage™ are trademarks of Entegris, Inc. ©2016 Entegris, Inc. All rights reserved.
Non-GAAP Reconciliation Table Reconciliation of GAAP Gross Profit to Adjusted Gross Profit Three months ended (In thousands) March 28, 2020 March 30, 2019 December 31, 2019 Net sales $ 412,327 $ 391,047 $ 426,998 Gross profit-GAAP $ 185,478 $ 177,393 $ 197,636 Adjustments to gross profit: Severance and restructuring costs — 358 (12) Charge for fair value mark-up of acquired inventory sold 361 2,155 211 Adjusted gross profit $ 185,839 $ 179,906 $ 197,835 Gross margin - as a % of net sales 45.0 % 45.4 % 46.3 % Adjusted gross margin - as a % of net sales 45.1 % 46.0 % 46.3 % 14
NON-GAAP RECONCILIATION TABLE RECONCILIATION OF GAAP OPERATING EXPENSES AND TAX RATE TO NON-GAAP OPERATING EXPENSES AND TAX RATE Three months ended (In millions) March 28, 2020 March 30, 2019 December 31, 2019 GAAP operating expenses $ 104.7 $ 129.9 $ 113.6 Adjustments to operating expenses: Deal and transaction costs 1.4 19.1 0.9 Integration costs 0.1 2.9 3.4 Severance and restructuring costs 0.8 1.5 — Amortization of intangible assets 16.2 18.7 16.0 Non-GAAP operating expenses $ 86.2 $ 87.7 $ 93.2 GAAP tax rate 12.4 % 14.2 % 19.2 % Other 2.2 % 4.2 % 1.1 % Non-GAAP tax rate 14.6 % 18.4 % 20.3 % 15
NON-GAAP RECONCILIATION TABLE RECONCILIATION OF GAAP SEGMENT PROFIT TO ADJUSTED OPERATING INCOME (In thousands) Three months ended Segment profit-GAAP March 28, 2020 March 30, 2019 December 31, 2019 Specialty Chemicals and Engineered Materials (SCEM) $ 32,670 $ 24,431 $ 32,822 Microcontamination Control (MC) 50,167 47,323 57,157 Advanced Materials Handling (AMH) 20,632 22,367 20,686 Total segment profit 103,469 94,121 110,665 Amortization of intangible assets 16,211 18,657 16,028 Unallocated expenses 6,514 27,973 10,552 Total operating income $ 80,744 $ 47,491 $ 84,085 (In thousands) Three months ended Adjusted segment profit March 28, 2020 March 30, 2019 December 31, 2019 SCEM segment profit $ 32,670 $ 24,431 $ 32,822 Severance and restructuring costs 174 519 184 Charge for fair value write-up of acquired inventory sold 235 120 (476) SCEM adjusted segment profit $ 33,079 $ 25,070 $ 32,530 MC segment profit $ 50,167 $ 47,323 $ 57,157 Severance and restructuring costs 190 724 195 Charge for fair value write-up of acquired inventory sold 126 2,035 687 MC adjusted segment profit $ 50,483 $ 50,082 $ 58,039 AMH segment profit $ 20,632 $ 22,367 $ 20,686 Severance and restructuring costs 135 578 (379) AMH adjusted segment profit $ 20,767 $ 22,945 $ 20,307 Unallocated general and administrative expenses $ 6,514 $ 27,973 $ 10,552 Unallocated deal and integration costs (1,479) (22,056) (4,323) Unallocated severance and restructuring costs (344) — — Adjusted unallocated general and administrative expenses $ 4,691 $ 5,917 $ 6,229 Total adjusted segment profit $ 104,329 $ 98,097 $ 110,876 Adjusted amortization of intangible assets — — — Adjusted unallocated expenses 4,691 5,917 6,229 Total adjusted operating income $ 99,638 $ 92,180 $ 104,647 16
NON-GAAP RECONCILIATION TABLE RECONCILIATION OF GAAP NET INCOME TO ADJUSTED OPERATING INCOME AND ADJUSTED EBITDA Three months ended (In thousands) March 28, 2020 March 30, 2019 December 31, 2019 Net sales $ 412,327 $ 391,047 $ 426,998 Net income $ 61,006 $ 32,658 $ 57,438 Adjustments to net income: Income tax expense 8,622 5,422 13,656 Interest expense, net 10,238 9,659 12,743 Other expense (income), net 878 (248) 248 GAAP - Operating income 80,744 47,491 84,085 Charge for fair value write-up of acquired inventory sold 361 2,155 211 Deal and transaction costs 1,431 19,136 973 Integration costs 48 2,920 3,350 Severance and restructuring costs 843 1,821 — Amortization of intangible assets 16,211 18,657 16,028 Adjusted operating income 99,638 92,180 104,647 Depreciation 20,648 16,721 20,352 Adjusted EBITDA $ 120,286 $ 108,901 $ 124,999 Net income - as a % of net sales 14.8 % 8.4 % 13.5 % Adjusted operating margin 24.2 % 23.6 % 24.5 % Adjusted EBITDA - as a % of net sales 29.2 % 27.8 % 29.3 % 17
NON-GAAP RECONCILIATION TABLE RECONCILIATION OF GAAP NET INCOME AND EARNINGS PER SHARE TO NON-GAAP NET INCOME AND EARNINGS PER SHARE Three months ended (In thousands, except per share data) March 28, 2020 March 30, 2019 December 31, 2019 GAAP net income $ 61,006 $ 32,658 $ 57,438 Adjustments to net income: Charge for fair value write-up of inventory acquired 361 2,155 211 Deal and transaction costs 1,431 19,547 973 Integration costs 48 2,920 3,350 Severance and restructuring costs 843 1,821 — Loss on debt extinguishment and modification — — 1,980 Amortization of intangible assets 16,211 18,657 16,028 Tax effect of adjustments to net income and discrete items1 (4,329) (9,864) (5,398) Non-GAAP net income $ 75,571 $ 67,894 $ 74,582 Diluted earnings per common share $ 0.45 $ 0.24 $ 0.42 Effect of adjustments to net income $ 0.11 $ 0.26 $ 0.13 Diluted non-GAAP earnings per common share $ 0.55 $ 0.50 $ 0.55 1. The tax effect of pre-tax adjustments to net income was calculated using the applicable marginal tax rate during the respective years. 18
NON-GAAP RECONCILIATION TABLE RECONCILIATION OF GAAP OUTLOOK TO NON-GAAP OUTLOOK (In millions) Second-Quarter Outlook Reconciliation GAAP operating expenses to non-GAAP operating expenses June 27, 2020 GAAP operating expenses $102 - $104 Adjustments to net income: Restructuring and integration costs 2 Amortization of intangible assets 12 Non-GAAP operating expenses $88 - $90 (In millions) Second-Quarter Outlook Reconciliation GAAP net income to non-GAAP net income June 27, 2020 GAAP net income $50 - $59 Adjustments to net income: Restructuring and integration costs 2 Amortization of intangible assets 12 Income tax effect (3) Non-GAAP net income $61 - $70 Second-Quarter Outlook Reconciliation GAAP diluted earnings per share to non-GAAP diluted earnings per share June 27, 2020 Diluted earnings per common share $0.37 - $0.43 Adjustments to diluted earnings per common share: Restructuring and integration costs 0.01 Amortization of intangible assets 0.09 Income tax effect (0.02) Diluted non-GAAP earnings per common share $0.45 to $0.51 19
GAAP Segment Trend Data 1 (In thousands) Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 Q120 Sales SCEM $ 130,743 $ 134,336 $ 131,234 $ 133,928 $ 124,470 $ 127,552 $ 127,750 $ 146,747 $ 144,214 MC 118,923 124,937 151,478 158,500 157,706 150,185 155,979 169,794 159,261 AMH 124,078 130,572 123,227 115,527 116,064 107,515 117,256 117,455 116,137 Inter-segment elimination (6,545) (6,786) (7,342) (6,313) (7,193) (6,378) (6,838) (6,998) (7,285) Total Sales $ 367,199 $ 383,059 $ 398,597 $ 401,642 $ 391,047 $ 378,874 $ 394,147 $ 426,998 $ 412,327 Segment Profit SCEM $ 30,921 $ 36,728 $ 31,210 $ 28,221 $ 24,431 $ 24,000 $ 17,074 $ 32,822 $ 32,670 MC 40,311 37,214 42,448 46,879 47,323 43,126 46,792 57,157 50,167 AMH 25,463 25,542 22,226 19,096 22,367 15,043 17,077 20,686 20,632 Total Segment Profit $ 96,695 $ 99,484 $ 95,884 $ 94,196 $ 94,121 $ 82,169 $ 80,943 $ 110,665 $ 103,469 Segment Profit Margin SCEM 23.7 % 27.3 % 23.8 % 21.1 % 19.6 % 18.8 % 13.4 % 22.4 % 22.7 % MC 33.9 % 29.8 % 28.0 % 29.6 % 30.0 % 28.7 % 30.0 % 33.7 % 31.5 % AMH 20.5 % 19.6 % 18.0 % 16.5 % 19.3 % 14.0 % 14.6 % 17.6 % 17.8 % 1. In 1Q19 the Company changed its definition of segment profit to include inter-segment sales. Prior period information has been recast to reflect the change. 20
NON-GAAP Segment Trend Data1 (In thousands) Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 Q120 Sales SCEM $ 130,743 $ 134,336 $ 131,234 $ 133,928 $ 124,470 $ 127,552 $ 127,750 $ 146,747 $ 144,214 MC 118,923 124,937 151,478 158,500 157,706 150,185 155,979 169,794 159,261 AMH 124,078 130,572 123,227 115,527 116,064 107,515 117,256 117,455 116,137 Inter-segment elimination (6,545) (6,786) (7,342) (6,313) (7,193) (6,378) (6,838) (6,998) (7,285) Total Sales $ 367,199 $ 383,059 $ 398,597 $ 401,642 $ 391,047 $ 378,874 $ 394,147 $ 426,998 $ 412,327 Segment Profit SCEM2 $ 30,921 $ 36,728 $ 31,210 $ 28,221 $ 25,070 $ 24,695 $ 23,700 $ 32,530 $ 33,079 MC3 40,311 37,422 45,729 50,258 50,082 43,126 49,769 58,039 50,483 AMH3 25,463 25,542 22,692 19,556 22,945 15,043 20,212 20,307 20,767 Total Segment Profit $ 96,695 $ 99,692 $ 99,631 $ 98,035 $ 98,097 $ 82,864 $ 93,681 $ 110,876 $ 104,329 Adjusted Segment Profit Margin SCEM 23.7 % 27.3 % 23.8 % 21.1 % 20.1 % 19.4 % 18.6 % 22.2 % 22.9 % MC 33.9 % 30.0 % 30.2 % 31.7 % 31.8 % 28.7 % 31.9 % 34.2 % 31.7 % AMH 20.5 % 19.6 % 18.4 % 16.9 % 19.8 % 14.0 % 17.2 % 17.3 % 17.9 % 1. In 1Q19 the Company changed its definition of segment profit to include inter-segment sales. Prior period information has been recast to reflect the change. Segment profit excludes amortization of intangibles and unallocated expenses. 2. Adjusted segment profit for SCEM for 3Q17, 1Q19, 3Q19,4Q19 and 1Q20 excludes charges for severance and restructuring of $14, $519, $2,143, $184 and $174, respectively. Adjusted segment profit for SCEM for 1Q19, 2Q19, 3Q19, 4Q19 and 1Q20 excludes fair value mark-up of inventory and severance charges of $120, $695, $4,483, ($476) and 235, respectively. 3. 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 3Q17, 1Q19, 3Q19, 4Q19 and 1Q20 excludes charges for severance of $196, $724, $2,977, $195 and $190, respectively. Adjusted segment profit for MC for 2Q18, 3Q18, 4Q18, 1Q19, 4Q19 and 1Q20 excludes charges for fair value mark-up of acquired inventory sold of $208, $3,281, $3,379, $2,035, $687 and $126, respectively. 4. Adjusted segment profit for AMH for 2Q17 excludes charges for impairment of equipment of $2,286. Adjusted segment profit for AMH for 3Q17 excludes impairment of equipment and severance and restructuring of $3,364 and $1,857 respectively. Adjusted segment profit for AMH for 3Q18 excludes loss on sale of subsidiary of $466. Adjusted segment profit for AMH for 4Q18, 1Q19, 3Q19, 4Q19 and 1Q20 excludes severance and restructuring of $460, $578, $3,135, ($379) and $135, respectively. 21