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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________________________________
FORM 10-Q
______________________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 3, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number: 001-32598
https://cdn.kscope.io/91866a1bfc1f2ccf5a79df8817d66ba5-entg-20210403_g1.jpg
_______________________________________
Entegris, Inc.
(Exact name of registrant as specified in its charter)
 _________________________________________
Delaware 41-1941551
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
129 Concord Road,Billerica,Massachusetts 01821
(Address of principal executive offices) (Zip Code)
(978) 436-6500
(Registrant’s telephone number, including area code)
None
(Former name, former address and former fiscal year, if changed since last report)
 _______________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $0.01 par value per shareENTGThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ý    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ýAccelerated filer 
Non-accelerated filer ¨Smaller reporting company 
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. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ý
As of April 23, 2021, there were 135,500,992 shares of the registrant’s common stock outstanding.



Table of Contents
ENTEGRIS, INC. AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTS
FOR THE QUARTER ENDED APRIL 3, 2021
DescriptionPage
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Cautionary Statements
This Quarterly Report on Form 10-Q 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 may include statements about the impact of the COVID-19 pandemic on the Company’s operations and markets; future period guidance or projections; the Company’s performance relative to its markets, including the drivers of such performance; market and technology trends, including the duration and drivers of any growth trends and the impact of the COVID-19 pandemic on such trends; the development of new products and the success of their introductions; the focus of the Company’s engineering, research and development projects; the Company’s ability to execute on its business strategies; 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 impact of the acquisitions the Company has made and commercial partnerships the Company has established; future capital and other expenditures, including estimates thereof; the Company’s expected tax rate; the impact, financial or otherwise, of any organizational changes; the impact of accounting pronouncements; quantitative and qualitative disclosures about market risk; and other matters. These forward-looking statements are based on current management expectations and assumptions only as of the date of this Quarterly Report, are not guarantees of future performance and involve substantial risks and uncertainties that are difficult to predict and that could cause actual results to differ materially from the results expressed in, or implied by, these 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; 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; raw material shortages, supply constraints and price increases; changes in government regulations of the countries in which the Company operates, including the imposition of tariffs, export controls and other trade
2

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laws and restrictions and changes to foreign and national security policy, especially as they relate to China; 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, 2020, filed on February 5, 2021, under the heading “Risk Factors” in Item 1A of this Quarterly Report and in the Company’s other periodic filings. Except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission, the Company undertakes no obligation to update publicly any forward-looking statements or information contained herein, which speak as of their respective dates.
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PART 1.    FINANCIAL INFORMATION
Item 1. Financial Statements

ENTEGRIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) 
(In thousands, except share and per share data)April 3, 2021December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents$548,520 $580,893 
Trade accounts and notes receivable, net of allowance for doubtful accounts of $2,718 and $2,384
282,649 264,392 
Inventories, net358,819 323,944 
Deferred tax charges and refundable income taxes20,227 21,136 
Other current assets34,391 43,892 
Total current assets1,244,606 1,234,257 
Property, plant and equipment, net of accumulated depreciation of $592,146 and $574,257
542,605 525,367 
Other assets:
Right-of-use assets48,057 45,924 
Goodwill747,518 748,037 
Intangible assets, net of accumulated amortization of $457,862 and $445,795
325,454 337,632 
Deferred tax assets and other noncurrent tax assets14,684 14,519 
Other10,615 11,960 
Total assets$2,933,539 $2,917,696 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$93,045 $81,618 
Accrued payroll and related benefits49,554 94,364 
Other accrued liabilities81,981 82,648 
Income taxes payable41,691 43,996 
Total current liabilities266,271 302,626 
Long-term debt, excluding current maturities, net of unamortized discount and debt issuance costs of $8,814 and $9,217
1,086,186 1,085,783 
Pension benefit obligations and other liabilities36,663 36,457 
Deferred tax liabilities and other noncurrent tax liabilities73,133 73,606 
Long-term lease liability42,953 39,730 
Commitments and contingent liabilities  
Equity:
Preferred stock, par value $.01; 5,000,000 shares authorized; none issued and outstanding as of April 3, 2021 and December 31, 2020
  
Common stock, par value $.01; 400,000,000 shares authorized; issued and outstanding shares as of April 3, 2021: 135,395,571 and 135,193,171, respectively; issued and outstanding shares as of December 31, 2020: 135,148,774 and 134,946,374, respectively
1,354 1,351 
Treasury stock, at cost: 202,400 shares held as of April 3, 2021 and December 31, 2020
(7,112)(7,112)
Additional paid-in capital837,622 844,850 
Retained earnings 637,574 577,833 
Accumulated other comprehensive loss(41,105)(37,428)
Total equity1,428,333 1,379,494 
Total liabilities and equity$2,933,539 $2,917,696 
See the accompanying notes to condensed consolidated financial statements.
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ENTEGRIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
 Three months ended
(In thousands, except per share data)April 3, 2021March 28, 2020
Net sales$512,844 $412,327 
Cost of sales277,858 226,849 
Gross profit234,986 185,478 
Selling, general and administrative expenses71,389 58,891 
Engineering, research and development expenses37,748 29,632 
Amortization of intangible assets11,871 16,211 
Operating income113,978 80,744 
Interest expense11,652 10,559 
Interest income(71)(321)
Other expense, net4,330 878 
Income before income tax expense 98,067 69,628 
Income tax expense13,391 8,622 
Net income $84,676 $61,006 
Basic earnings per common share$0.63 $0.45 
Diluted earnings per common share$0.62 $0.45 
Weighted shares outstanding:
Basic135,068134,745
Diluted136,502136,369
See the accompanying notes to condensed consolidated financial statements.

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ENTEGRIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
 Three months ended
(In thousands)April 3, 2021March 28, 2020
Net income$84,676 $61,006 
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments(3,716)(9,361)
Pension liability adjustments39 10 
Other comprehensive loss(3,677)(9,351)
Comprehensive income $80,999 $51,655 
See the accompanying notes to condensed consolidated financial statements.

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ENTEGRIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
(In thousands)Common
shares
outstanding
Common
stock
Treasury sharesTreasury stockAdditional
paid-in
capital
Retained earnings
Foreign currency translation adjustmentsDefined benefit pension adjustmentsTotal
Balance at December 31, 2019134,930 $1,349 (202)$(7,112)$842,784 $366,127 $(36,468)$(791)$1,165,889 
Shares issued under stock plans483 5 —  (10,894)   (10,889)
Share-based compensation expense—  —  4,994    4,994 
Repurchase and retirement of common stock(604)(6)—  (3,740)(25,818)  (29,564)
Dividends declared ($0.08 per share)
—  —  15 (10,773)  (10,758)
Pension liability adjustment—  —     10 10 
Foreign currency translation—  —    (9,361) (9,361)
Net income—  —   61,006   61,006 
Balance at March 28, 2020134,809 $1,348 (202)$(7,112)$833,159 $390,542 $(45,829)$(781)$1,171,327 

(In thousands)Common
shares
outstanding
Common
stock
Treasury sharesTreasury stockAdditional
paid-in
capital
Retained earnings
Foreign currency translation adjustmentsDefined benefit pension adjustmentsTotal
Balance at December 31, 2020135,149 $1,351 (202)$(7,112)$844,850 $577,833 $(36,588)$(840)$1,379,494 
Shares issued under stock plans392 4 —  (13,470)   (13,466)
Share-based compensation expense—  —  7,138    7,138 
Repurchase and retirement of common stock(145)(1)—  (904)(14,095)  (15,000)
Dividends declared ($0.08 per share)
—  —  8 (10,840)  (10,832)
Pension liability adjustment—  —     39 39 
Foreign currency translation—  —    (3,716) (3,716)
Net income—  —   84,676   84,676 
Balance at April 3, 2021135,396 $1,354 (202)$(7,112)$837,622 $637,574 $(40,304)$(801)$1,428,333 

See the accompanying notes to condensed consolidated financial statements.
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ENTEGRIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
 Three months ended
(In thousands)April 3, 2021March 28, 2020
Operating activities:
Net income $84,676 $61,006 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation22,095 20,648 
Amortization11,871 16,211 
Share-based compensation expense7,138 4,994 
Provision for deferred income taxes1,581 (64)
Charge for excess and obsolete inventory3,249 3,605 
Other3,336 2,022 
Changes in operating assets and liabilities:
Trade accounts and notes receivable(21,564)(43,995)
Inventories(39,337)(18,205)
Accounts payable and accrued liabilities(28,591)(38,020)
Other current assets9,400 5,825 
Income taxes payable and refundable income taxes(3,588)(225)
Other2,849 (2,399)
Net cash provided by operating activities53,115 11,403 
Investing activities:
Acquisition of property, plant and equipment(43,330)(22,585)
Acquisition of businesses, net of cash acquired (75,630)
Other72 5 
Net cash used in investing activities(43,258)(98,210)
Financing activities:
Proceeds from short-term borrowings 217,000 
Payments of short-term borrowings (75,000)
Payments for dividends(10,908)(10,847)
Issuance of common stock1,572 551 
Repurchase and retirement of common stock(15,000)(29,564)
Taxes paid related to net share settlement of equity awards(15,038)(11,440)
Deferred acquisition payments (16,125)
Other(1)(2,890)
Net cash (used in) provided by financing activities(39,375)71,685 
Effect of exchange rate changes on cash and cash equivalents(2,855)(1,712)
Decrease in cash and cash equivalents(32,373)(16,834)
Cash and cash equivalents at beginning of period580,893 351,911 
Cash and cash equivalents at end of period$548,520 $335,077 
See the accompanying notes to condensed consolidated financial statements.
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ENTEGRIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Unaudited)

Supplemental Cash Flow InformationThree months ended
(unaudited)
(In thousands)April 3, 2021March 28, 2020
Non-cash transactions:
Deferred acquisition payments$ $1,451 
Equipment purchases in accounts payable8,249 6,689 
Changes in dividends payable76 89 
Schedule of interest and income taxes paid:
Interest paid13,515 15,296 
Income taxes paid, net of refunds received14,959 7,997 
See the accompanying notes to condensed consolidated financial statements.
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ENTEGRIS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations Entegris, Inc. (“Entegris”, “the Company”, “us”, “we”, or “our”) is a leading supplier of advanced materials and process solutions for the semiconductor and other high-technology industries.
Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries. Intercompany profits, transactions and balances have been eliminated in consolidation.
Use of Estimates The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, particularly receivables, inventories, property, plant and equipment, right-of-use assets, goodwill, intangibles, accrued expenses, short-term and long-term lease liability, income taxes and related accounts, and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Basis of Presentation The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and contain all adjustments considered necessary, and are of a normal recurring nature, to present fairly the financial position as of April 3, 2021 and December 31, 2020, and the results of operations and comprehensive income for the three months ended April 3, 2021 and March 28, 2020, the equity statements as of and for the three months ended April 3, 2021 and March 28, 2020, and cash flows for the three months ended April 3, 2021 and March 28, 2020.
The condensed consolidated financial statements and accompanying notes are presented as permitted by Form 10-Q and do not contain certain information included in the Company’s annual consolidated financial statements and notes. The information included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis and consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2020. The results of operations for the three months ended April 3, 2021 are not necessarily indicative of the results to be expected for the full year.
Fair Value of Financial Instruments The carrying value of cash equivalents, accounts receivable, accounts payable, accrued payroll and related benefits, and other accrued liabilities approximates fair value due to the short maturity of those items. The fair value of long-term debt, including current maturities, was $1,115.2 million at April 3, 2021, compared to the carrying amount of long-term debt, including current maturities, of $1,086.2 million at April 3, 2021.
Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, “Simplifying the Accounting for Income Taxes” under ASC 740, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application. This guidance is effective for fiscal years beginning after December 15, 2020, including interim periods within that fiscal year. The Company adopted this new guidance in the first quarter of fiscal 2021. The adoption of ASU 2019-12 did not have a material impact on the condensed consolidated financial statements.
Recently Issued Accounting Pronouncements The Company currently has no material recent accounting pronouncements yet to be adopted.
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2. REVENUES
Revenue Recognition Revenue is measured based on consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer.
Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.
Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of sales.
The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less.
When the Company receives consideration, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a sales contract, the Company records deferred revenue, which represents a contract liability. Such deferred revenue typically results from advance payments received on sales of the Company’s products. The Company makes the required disclosures with respect to deferred revenue below.
The Company does not disclose information about remaining performance obligations that have original expected durations of one year or less.
Nature of goods and services The following is a description of principal activities from which the Company generates its revenues. The Company has three reportable segments. For more detailed information about reportable segments, see note 10 to the condensed consolidated financial statements. For each of the three reportable segments, the recognition of revenue regarding the nature of goods and services provided by the segments are similar and described below. The Company recognizes revenue for product sales at a point in time following the transfer of control of such products to the customer, which generally occurs upon shipment or delivery, depending on the terms of the underlying contracts. For product sales contracts that contain multiple performance obligations, the Company allocates the transaction price to each performance obligation identified in the contract based on relative standalone selling prices, or estimates of such prices, and recognizes the related revenue as control of each individual product is transferred to the customer, in satisfaction of the corresponding performance obligations.
The Company generally recognizes revenue for sales of services when the Company has satisfied the performance obligation. The payment terms and revenue recognized is based on time and materials.
The Company also enters into arrangements to license its intellectual property. These arrangements typically permit the customer to use a specialized manufacturing process or patented technology and in return the Company receives a royalty fee. The Company recognizes revenue for a sales-based or usage-based royalty promised in exchange for a license of intellectual property when the subsequent sale or usage occurs.
The Company offers certain customers cash discounts and volume rebates as sales incentives. The discounts and volume rebates are recorded as a reduction in sales at the time revenue is recognized in an amount estimated based on historical experience and contractual obligations. The Company periodically reviews the assumptions underlying its estimates of discounts and volume rebates and adjusts its revenues accordingly.
In addition, the Company offers free product rebates to certain customers. The Company utilizes an adjusted market approach to estimate the stand-alone selling price of the loyalty program and allocates a portion of the consideration received to the free product offering. The free product offering is redeemable upon future purchases of the Company’s products. The amount associated with free product rebates is recorded as deferred revenue on the balance sheet and is recognized as revenue when the free product is redeemed or when the likelihood of redemption is remote. The Company has deemed that the amount is immaterial for disclosure.
The Company provides for the estimated costs of fulfilling its obligations under product warranties at the time the related revenue is recognized. The Company estimates the costs based on historical failure rates, projected repair costs, and knowledge of specific product failures (if any). The specific warranty terms and conditions vary depending upon the product sold and the country in which we do business, but generally include parts and labor over a period generally ranging from 90 days to one year. The Company regularly reevaluates its estimates to assess the adequacy of the recorded warranty liabilities and adjusts the amounts as necessary.
The Company’s contracts are generally short-term in nature. Most contracts’ terms do not exceed twelve months. Payment terms vary by the type and location of the Company’s customers and the products or services offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, the Company requires payment before the products or services are delivered to the customer. Those customers that prepay are represented by the contract liabilities below until the performance obligations are satisfied.
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The following table provides information about contract liabilities from contracts with customers. The contract liabilities are included in other accrued liabilities balance in the condensed consolidated balance sheet.
(In thousands)April 3, 2021December 31, 2020
Contract liabilities - current$19,077 $13,852 
Significant changes in the contract liabilities balances during the period are as follows:
Three months ended
(In thousands)April 3, 2021
Revenue recognized that was included in the contract liability balance at the beginning of the period$(9,713)
Increases due to cash received, excluding amounts recognized as revenue during the period14,938 

3. ACQUISITIONS
Global Measurement Technologies, Inc.
On July 10, 2020, the Company acquired Global Measurement Technologies, Inc. (“GMTI”), an analytical instrument provider for critical processes in semiconductor production, and its manufacturing partner Clean Room Plastics, Inc. GMTI reports into the Advanced Materials Handling segment of the Company. The acquisition was accounted for under the acquisition method of accounting, and GMTI’s results of operations are included in the Company’s condensed consolidated financial statements as of and since July 10, 2020. The acquisition does not constitute a material business combination.
The purchase price for GMTI includes cash consideration of $36.3 million, net of cash acquired, which was funded from the Company’s existing cash on hand.
The purchase price of GMTI exceeds the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed by $16.1 million. Cash flows used to determine the purchase price included strategic and synergistic benefits (investment value) specific to the Company, which resulted in a purchase price in excess of the fair value of identifiable net assets. This additional investment value resulted in goodwill, which is expected to be non-deductible for income tax purposes.
During the quarter ended September 26, 2020, the Company finalized its fair value determination of the assets acquired and the liabilities assumed. The following table summarizes the final allocation of the purchase price to the fair values assigned to the assets acquired and liabilities assumed at the date of the acquisition:
(In thousands):July 10, 2020
Trade accounts and note receivable, net$937 
Inventories, net1,079 
Identifiable intangible assets18,180 
Right-of-use assets337 
Accounts payable and accrued liabilities(28)
Short-term lease liability(150)
Long-term lease liability(187)
Net assets acquired20,168 
Goodwill16,099 
Total purchase price, net of cash acquired$36,267 
The Company recognized the following finite-lived intangible assets as part of the acquisition of GMTI:
(In thousands)AmountWeighted
average life in
years
Developed technology$3,570 6.5
Trademarks and trade names1,010 11.5
Customer relationships13,600 15.5
$18,180 13.5

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Sinmat
On January 10, 2020, the Company acquired Sinmat, a chemical mechanical polishing slurry manufacturer. Sinmat reports into the Specialty Chemicals and Engineered Materials segment of the Company. The acquisition was accounted for under the acquisition method of accounting and Sinmat’s results of operations are included in the Company’s condensed consolidated financial statements as of and since January 10, 2020. Costs associated with the acquisition of Sinmat were $0.7 million for the year ended March 28, 2020 and were expensed as incurred. These costs are included in the selling, general and administrative expenses in the Company’s condensed consolidated statement of operations. The acquisition does not constitute a material business combination.
The purchase price for Sinmat includes cash consideration of $76.2 million, or $75.6 million net of cash acquired, which was funded from the Company’s existing cash on hand.
The purchase price of Sinmat exceeds the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed by $31.7 million. Cash flows used to determine the purchase price included strategic and synergistic benefits (investment value) specific to the Company, which resulted in a purchase price in excess of the fair value of identifiable net assets. This additional investment value resulted in goodwill, which is expected to be non-deductible for income tax purposes.
During the quarter ended June 27, 2020, the Company finalized its fair value determination of the assets acquired and the liabilities assumed. The following table summarizes the provisional and final allocations of the purchase price to the fair values assigned to the assets acquired and liabilities assumed at the date of the acquisition date and as adjusted as of June 27, 2020, respectively:
(In thousands):As of January 10, 2020As of June 27, 2020
Trade accounts and note receivable, net$1,189 $1,189 
Inventories, net1,010 1,010 
Other current assets8 8 
Property, plant and equipment63 63 
Identifiable intangible assets41,680 41,680 
Right-of-use assets1,712 1,712 
Deferred tax asset 102 
Accounts payable and accrued liabilities(58)(58)
Short-term lease liability(150)(150)
Long-term lease liability(1,562)(1,562)
Net assets acquired43,892 43,994 
Goodwill31,751 31,651 
Total purchase price, net of cash acquired$75,643 $75,645 
The Company recognized the following finite-lived intangible assets as part of the acquisition of Sinmat:
(In thousands)AmountWeighted
average life in
years
Developed technology$7,650 7.0
Trademarks and trade names130 1.3
Customer relationships33,900 15.0
$41,680 13.5

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4. INVENTORIES
Inventories consist of the following:
 
(In thousands)April 3, 2021December 31, 2020
Raw materials$124,799 $97,319 
Work-in process36,980 32,316 
Finished goods197,040 194,309 
Total inventories, net$358,819 $323,944 

5. GOODWILL AND INTANGIBLE ASSETS
Goodwill activity for each of the Company’s reportable segments that carry goodwill, Specialty Chemicals and Engineered Materials (“SCEM”), Microcontamination Control (“MC”) and Advanced Materials Handling (“AMH”), for each period was as follows:
(In thousands)Specialty Chemicals and Engineered MaterialsMicrocontamination ControlAdvanced Materials HandlingTotal
December 31, 2020$427,713 $247,154 $73,170 $748,037 
Foreign currency translation(31)(488) (519)
April 3, 2021$427,682 $246,666 $73,170 $747,518 
Identifiable intangible assets at April 3, 2021 and December 31, 2020 consist of the following:
April 3, 2021
(In thousands)Gross  carrying
Amount
Accumulated
amortization
Net  carrying
value
Developed technology$283,228 $224,340 $58,888 
Trademarks and trade names30,087 18,887 11,200 
Customer relationships449,606 201,743 247,863 
Other20,395 12,892 7,503 
$783,316 $457,862 $325,454 

December 31, 2020
(In thousands)Gross  carrying
amount
Accumulated
amortization
Net  carrying
value
Developed technology$283,272 $221,651 $61,621 
Trademarks and trade names30,100 18,374 11,726 
Customer relationships449,659 193,313 256,346 
Other20,396 12,457 7,939 
$783,427 $445,795 $337,632 
Future amortization expense during the remainder of 2021, each of the succeeding four years and thereafter relating to intangible assets currently recorded in the Company’s condensed consolidated balance sheets is estimated to be the following at April 3, 2021:
(In thousands)Remaining 20212022202320242025ThereafterTotal
Future amortization expense$36,332 47,602 46,913 34,294 27,663 132,650 $325,454 


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6. EARNINGS PER COMMON SHARE
Basic earnings per common share (“EPS”) is calculated based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share is calculated based on the weighted average number of shares of common stock outstanding plus potentially dilutive shares of common stock outstanding during the period. The following table presents a reconciliation of the share amounts used in the computation of basic and diluted earnings per common share: 
 Three months ended
(In thousands)April 3, 2021March 28, 2020
Basic—weighted common shares outstanding135,068 134,745 
Weighted common shares assumed upon exercise of stock options and vesting of restricted common stock1,434 1,624 
Diluted—weighted common shares and common shares equivalent outstanding136,502 136,369 
The Company excluded the following shares underlying stock-based awards from the calculations of diluted EPS because their inclusion would have been anti-dilutive for the three months ended April 3, 2021 and March 28, 2020:
 Three months ended
(In thousands)April 3, 2021March 28, 2020
Shares excluded from calculations of diluted EPS140 252 

7. LEASES
As of April 3, 2021, the Company was obligated under operating lease agreements for certain sales offices and manufacturing facilities, manufacturing equipment, vehicles, information technology equipment and warehouse space. As of April 3, 2021, the Company does not have material finance leases. Our leases have remaining lease terms of 1 year to 13 years, some of which may include options to extend the lease for up to 6 years, and some of which may include options to terminate the leases within 1 year.
As of April 3, 2021 and December 31, 2020, the Company’s operating lease components with initial or remaining terms in excess of one year were classified on the condensed consolidated balance sheet as follows, together with certain supplemental balance sheet information:
(In thousands, except lease term and discount rate)
ClassificationApril 3, 2021December 31, 2020
Assets
Right-of-use assetsRight-of-use assets$48,057 $45,924 
Liabilities
Short-term lease liabilityOther accrued liabilities8,903 9,960 
Long-term lease liabilityLong-term lease liability42,953 39,730 
Total lease liabilities$51,856 $49,690 
Lease Term and Discount Rate
Weighted average remaining lease term (years)8.77.9
Weighted average discount rate4.8 %5.0 %
Expense for leases less than 12 months for the three months ended April 3, 2021 and March 28, 2020 were not material. The components of lease expense for the three months ended April 3, 2021 and March 28, 2020 are as follows:
Three months ended
(In thousands)
April 3, 2021March 28, 2020
Operating lease cost$3,399 $3,541 
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The Company combines the amortization of the right-of-use assets and the change in the operating lease liability in the same line item in the condensed consolidated statement of cash flows. Other information related to the Company’s operating leases for the three months ended April 3, 2021 and March 28, 2020 are as follows:
(In thousands)
April 3, 2021March 28, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from leases$2,782 $2,717 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases$5,082 $912 
Future minimum lease payments for noncancellable operating leases as of April 3, 2021, were as follows:
(In thousands)Operating Leases
Remaining 2021$11,235 
20228,037 
20236,490 
20245,654 
20255,181 
Thereafter28,026 
Total64,623 
Less: Interest12,767 
Present value of lease liabilities$51,856 

8. SEGMENT REPORTING
The Company’s financial segment reporting reflects an organizational alignment intended to leverage the Company’s unique portfolio of capabilities to create value for its customers by developing mission-critical solutions to maximize manufacturing yields and enable higher performance of devices. While these segments have separate products and technical know-how, they share common business systems and processes, technology centers, and strategic and technology roadmaps. The Company leverages its expertise from these three segments to create new and increasingly integrated solutions for its customers. The Company’s business is reported in the following segments:
Specialty Chemicals and Engineered Materials: 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 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 develops solutions to monitor, protect, transport and deliver critical liquid chemistries, wafers, and other substrates for a broad set of applications in the semiconductor industry and other high-technology industries.
Summarized financial information for the Company’s reportable segments is shown in the following tables.
 Three months ended
(In thousands)April 3, 2021March 28, 2020
Net sales
SCEM$166,541 $144,214 
MC207,099 159,261 
AMH148,541 116,137 
Inter-segment elimination(9,337)(7,285)
Total net sales$512,844 $412,327 

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 Three months ended
(In thousands)April 3, 2021March 28, 2020
Segment profit
SCEM$34,556 $32,670 
MC70,566 50,167 
AMH32,095 20,632 
Total segment profit$137,217 $103,469 
The following table reconciles total segment profit to income before income tax expense:
 Three months ended
(In thousands)April 3, 2021March 28, 2020
Total segment profit$137,217 $103,469 
Less:
Amortization of intangible assets11,871 16,211 
Unallocated general and administrative expenses11,368 6,514 
Operating income113,978 80,744 
Interest expense11,652 10,559 
Interest income(71)(321)
Other expense, net4,330 878 
Income before income tax expense $98,067 $69,628 
In the following tables, revenue is disaggregated by customers’ country or region for the three months ended April 3, 2021 and March 28, 2020, respectively.
Three months ended April 3, 2021
(In thousands)SCEM MCAMHInter-segment Total
North America$49,064 $34,592 $45,465 $(9,337)$119,784 
Taiwan28,679 44,830 27,806  101,315 
China20,662 41,689 20,577  82,928 
South Korea25,170 28,011 18,905  72,086 
Japan22,480 36,723 12,005  71,208 
Europe11,777 11,117 16,494  39,388 
Southeast Asia8,709 10,137 7,289  26,135 
$166,541 $207,099 $148,541 $(9,337)$512,844 

Three months ended March 28, 2020
(In thousands)SCEM MCAMHInter-segmentTotal
North America$46,550 $28,680 $33,403 $(7,285)$101,348 
Taiwan25,182 42,483 24,801  92,466 
China15,510 18,197 11,639  45,346 
South Korea20,129 20,122 15,161  55,412 
Japan17,123 28,111 10,420  55,654 
Europe8,608 13,488 12,548  34,644 
Southeast Asia11,112 8,180 8,165  27,457 
$144,214 $159,261 $116,137 $(7,285)$412,327 

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9. SUBSEQUENT EVENT
On April 16, 2021, the Company announced that it had priced its private offering of $400.0 million aggregate principal amount of 3.625% senior unsecured notes due 2029 (the “2029 Notes”). The 2029 Notes will be senior unsecured obligations of the Company and will be guaranteed by certain subsidiaries of the Company. The issuance of the 2029 Notes is expected to close on April 30, 2021, subject to customary closing conditions.
The Company expects the net proceeds of the offering to be approximately $394.0 million, after deducting estimated commissions and offering fees and expenses. The Company intends to use the net proceeds of the offering, together with cash on hand and approximately $75.0 million borrowed under the Company’s revolving credit facility (the “Revolving Facility”), to pay the redemption price for the redemption in full of the $550.0 million aggregate principal amount of 4.625% senior unsecured notes due 2026 that are currently outstanding. The redemption of the $550.0 million notes due 2026 is expected to result in a loss of $23.1 million on extinguishment of debt, which will be included in the C