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) November 2, 2022
 | ||
_______________________________________
Entegris, Inc.
(Exact name of registrant as specified in its charter)
_______________________________________
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
| (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:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
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 November 2, 2022, Entegris, Inc. issued a press release to announce results for the third quarter of 2022 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 | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL 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: November 2, 2022 | By: | /s/ Gregory B. Graves | ||||||
| Name: | Gregory B. Graves | |||||||
| Title: | Executive Vice President and Chief Financial Officer | |||||||
 | 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 EDT
ENTEGRIS REPORTS RESULTS FOR THIRD QUARTER OF 2022
•Third-quarter revenue (as reported) of $994 million, increased 71% from prior year
•Third-quarter revenue (proforma), increased 14%
•Third-quarter GAAP diluted EPS of ($0.50)
•Third-quarter non-GAAP diluted EPS of $0.85
BILLERICA, Mass., November 2, 2022 - Entegris, Inc. (NASDAQ: ENTG), today reported its financial results for the Company’s third quarter ended October 1, 2022. Third-quarter sales were $993.8 million, an increase of 71% from the same quarter last year. Third-quarter GAAP net loss was $73.7 million, or $0.50 loss per diluted share, which included $65.3 million of amortization of intangible assets, $20.8 million of integration costs, $31.9 million of deal and transaction costs, $58.4 million contractual and non-cash integration costs and $2.4 million interest expense, net. Non-GAAP net income was $127.8 million for the third quarter and non-GAAP earnings per diluted share was $0.85. All the results presented herein are shown on a “as reported” basis and not on a “proforma” basis, and as a result do not include CMC Materials’ results in prior periods.
Bertrand Loy, Entegris’ president and chief executive officer, said: “Our execution was solid in the third quarter, and we are pleased with our proforma 18 percent year-to-date top line growth, especially in light of the growing economic uncertainty and unfavorable impact of foreign currencies. During the quarter, we continued to benefit from strong demand for our advanced solutions, which are of growing importance to our customers’ leading-edge technology roadmaps and new facility investments.”
Mr. Loy added: “We are also pleased with our steady progress on the CMC Materials integration. As a part of our assessment of the various parts of the CMC portfolio, we recently announced that we entered into a definitive agreement for Infineum to acquire the Pipeline and Industrial Materials business. Going forward, our focus will be on driving revenue and cost synergies, and continuing to pay down the debt.”
Mr. Loy added: “For the full year 2022, despite softening in the semiconductor market and the impact of the new U.S. government export restrictions, we expect to achieve strong growth, well in excess of the market. Looking ahead, our differentiated unit-driven model and experienced team will be key as we navigate the uncertain environment.”
Quarterly Financial Results Summary
(in thousands, except percentages and per share data)
| GAAP Results | October 1, 2022 | October 2, 2021 | July 2, 2022 | ||||||||
| Net sales | $993,828 | $579,493 | $692,489 | ||||||||
| Operating income | $14,889 | $139,357 | $157,970 | ||||||||
| Operating margin - as a % of net sales | 1.5 | % | 24.0 | % | 22.8 | % | |||||
| Net (loss) income | ($73,703) | $117,461 | $99,491 | ||||||||
| Diluted (loss) earnings per common share | ($0.50) | $0.86 | $0.73 | ||||||||
| Non-GAAP Results | |||||||||||
| Non-GAAP adjusted operating income | $253,207 | $152,696 | $183,039 | ||||||||
| Non-GAAP adjusted operating margin - as a % of net sales | 25.5 | % | 26.3 | % | 26.4 | % | |||||
| Non-GAAP net income | $127,770 | $125,383 | $136,816 | ||||||||
| Diluted non-GAAP earnings per common share | $0.85 | $0.92 | $1.00 | ||||||||
Fourth-Quarter Outlook
For the fourth quarter ending December 31, 2022, the Company expects sales of $930 million to $970 million, net income of $42 million to $50 million and diluted earnings per common share between $0.28 and $0.33. On a non-GAAP basis, the Company expects diluted earnings per common share to range from $0.75 to $0.80, reflecting net income on a non-GAAP basis in the range of $112 million to $120 million. The company also expects EBITDA of approximately 29% of sales, for the fourth quarter of 2022. We estimate that the impact of the U.S. government’s announced new export controls restricting the sale of semiconductor technology to certain companies in China will reduce sales by approximately $40 million to $50 million in the fourth quarter of 2022 (reflected in the guidance above).
Segment Results
In connection with the completion of the CMC Materials acquisition, the company now operates in four segments (which include the new APS division):
Specialty Chemicals and Engineered Materials (SCEM): SCEM provides advanced materials enabling complex chip designs and improved device electrical performance; including high-performance and high-purity process chemistries, gases and materials and safe and efficient delivery systems to support semiconductor and other advanced manufacturing processes.
Microcontamination Control (MC): MC offers advanced filtration solutions that improve customers’ yield, device reliability and cost; by filtering and purifying critical liquid chemistries and gases used in semiconductor manufacturing processes and other high-technology industries.
Advanced Materials Handling (AMH): AMH develops solutions that improve customers’ yields by protecting critical materials during manufacturing, transportation, and storage; including products that monitor, protect, transport and deliver critical liquid chemistries, wafers, and other substrates for a broad set of applications in the semiconductor, life sciences and other high-technology industries.
Advanced Planarization Solutions (APS): APS develops an end-to-end chemical mechanical planarization (CMP) solution and applications expertise delivered through advanced materials and high purity chemicals; including CMP slurries, pads, formulated cleans and other electronic chemicals used in the semiconductor manufacturing processes.
Third-Quarter Results Conference Call Details
Entegris will hold a conference call to discuss its results for the third quarter on Wednesday, November 2, 2022, at 9:00 a.m. Eastern Time. Participants should dial 888-882-4478 or +1 323-794-2591, referencing confirmation code 8055261. 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 8055261. The on-demand playback will be available for six weeks after the conclusion of the teleconference. The call can also be accessed live and on-demand from the Investor Relations section of www.entegris.com.
Management’s slide presentation concerning the results for the third quarter will be posted on the Investor Relations section of www.entegris.com Wednesday morning before the call.
Entegris, Inc. - page 2 of 15
About Entegris
Entegris is a world-class supplier of advanced materials and process solutions for the semiconductor and other high-tech industries. Entegris has approximately 10,000 employees throughout its global operations and is ISO 9001 certified. It 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, adjusted operating income, non-GAAP net income, non-GAAP adjusted operating margin and diluted non-GAAP earnings per common share, together with related measures thereof, 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 provides supplemental non-GAAP financial measures to better understand and manage its business and believes these measures provide investors and analysts additional and meaningful information for the assessment of the Company’s ongoing results. Management also uses these non-GAAP measures to assist in the evaluation of the performance of its business segments and to make operating decisions. Management believes that the Company’s non-GAAP measures help indicate the Company’s baseline performance before certain gains, losses or other charges that may not be indicative of the Company’s business or future outlook, and that non-GAAP measures offer a more consistent view of business performance. The Company believes the non-GAAP measures aid investors’ overall understanding of the Company’s results by providing a higher degree of transparency for such items and providing a level of disclosure that will help investors generally understand how management plans, measures and evaluates the Company’s business performance. Management believes that the inclusion of non-GAAP measures provides greater consistency in its financial reporting and facilitates investors’ understanding of the Company’s historical operating trends by providing an additional basis for comparisons to prior periods. The reconciliations of GAAP gross profit to adjusted gross profit, GAAP segment profit to adjusted operating income, GAAP net income to adjusted operating income and adjusted EBITDA, GAAP net income and diluted earnings per common share to non-GAAP net income and diluted non-GAAP earnings per common share and GAAP outlook to non-GAAP outlook are included elsewhere in this release.
Cautionary Note on Forward Looking Statements
This news release contains forward looking statements. The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “should,” “may,” “will,” “would” or the negative thereof and similar expressions are intended to identify such forward looking statements. These forward looking statements may include statements about the ongoing impacts of the COVID-19 pandemic and the conflict in Ukraine on the Company’s operations and markets, including supply chain issues and inflationary pressures related thereto; 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 our business strategies, including with respect to Company’s expansion of its manufacturing presence in Taiwan; 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, including the acquisition of CMC Materials, Inc. (“CMC Materials”); trends relating to the fluctuation of currency exchange rates; 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, 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 level of, and obligations associated with, the Company’s indebtedness, including the debts incurred in connection with the acquisition of CMC Materials; risks related to the acquisition and integration of CMC Materials, including unanticipated difficulties or expenditures relating thereto; the ability to achieve the anticipated synergies and value-creation contemplated by the acquisition of CMC Materials and the diversion of management time on transaction-related matters; risks related to the COVID-19 pandemic on the global economy and financial markets, as well as on the Company, its customers and suppliers, which may impact its sales, gross margin, customer demand and its ability to supply its products to its customers; raw material shortages, supply and labor constraints and price increases, pricing and inflationary pressures and
Entegris, Inc. - page 3 of 15
rising interest rates; operational, political and legal risks of the Company’s international operations; the Company’s dependence on sole source and limited source suppliers; 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; substantial competition; 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; the ongoing conflict in Ukraine and the global response thereto; the increasing complexity of certain manufacturing processes; changes in government regulations of the countries in which the Company operates, including the imposition of tariffs, export controls and other trade laws and restrictions and changes to national security and international trade policy, especially as they relate to China; fluctuation of currency exchange rates; fluctuations in the market price of the Company’s stock; and other risk factors and additional information described in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including under the heading “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed on February 4, 2022, and in the Company’s other SEC filings. Except as required under the federal securities laws and the rules and regulations of the SEC, the Company undertakes no obligation to update publicly any forward-looking statements or information contained herein, which speak as of their respective dates.
Entegris, Inc. - page 4 of 15
Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
| Three months ended | ||||||||||||||
| October 1, 2022 | October 2, 2021 | July 2, 2022 | ||||||||||||
| Net sales | $993,828 | $579,493 | $692,489 | |||||||||||
| Cost of sales | 622,157 | 315,289 | 382,092 | |||||||||||
| Gross profit | 371,671 | 264,204 | 310,397 | |||||||||||
| Selling, general and administrative expenses | 226,446 | 71,032 | 90,685 | |||||||||||
| Engineering, research and development expenses | 64,990 | 41,972 | 49,248 | |||||||||||
| Amortization of intangible assets | 65,346 | 11,843 | 12,494 | |||||||||||
| Operating income | 14,889 | 139,357 | 157,970 | |||||||||||
| Interest expense, net | 82,755 | 9,339 | 31,343 | |||||||||||
| Other expense, net | 12,852 | 1,917 | 9,619 | |||||||||||
| (Loss) Income before income tax expense | (80,718) | 128,101 | 117,008 | |||||||||||
| Income tax (benefit) expense | (7,015) | 10,640 | 17,517 | |||||||||||
| Net (loss) income | $(73,703) | $117,461 | $99,491 | |||||||||||
| Basic (loss) earnings per common share: | $(0.50) | $0.87 | $0.73 | |||||||||||
| Diluted (loss) earnings per common share: | $(0.50) | $0.86 | $0.73 | |||||||||||
| Weighted average shares outstanding: | ||||||||||||||
| Basic | 148,570 | 135,583 | 135,895 | |||||||||||
| Diluted | 148,570 | 136,631 | 136,454 | |||||||||||
Entegris, Inc. - page 5 of 15
Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
| Nine months ended | |||||||||||
| October 1, 2022 | October 2, 2021 | ||||||||||
| Net sales | $2,335,963 | $1,663,689 | |||||||||
| Cost of sales | 1,344,075 | 899,115 | |||||||||
| Gross profit | 991,888 | 764,574 | |||||||||
| Selling, general and administrative expenses | 404,239 | 215,042 | |||||||||
| Engineering, research and development expenses | 160,953 | 121,692 | |||||||||
| Amortization of intangible assets | 90,491 | 35,616 | |||||||||
| Operating income | 336,205 | 392,224 | |||||||||
| Interest expense, net | 126,962 | 31,563 | |||||||||
| Other expense, net | 27,373 | 29,807 | |||||||||
| Income before income tax expense | 181,870 | 330,854 | |||||||||
| Income tax expense | 30,377 | 39,947 | |||||||||
| Net income | $151,493 | $290,907 | |||||||||
| Basic earnings per common share: | $1.08 | $2.15 | |||||||||
| Diluted earnings per common share: | $1.08 | $2.13 | |||||||||
| Weighted average shares outstanding: | |||||||||||
| Basic | 140,045 | 135,383 | |||||||||
| Diluted | 140,892 | 136,556 | |||||||||
Entegris, Inc. - page 6 of 15
Entegris, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
| October 1, 2022 | December 31, 2021 | ||||||||||||||||
| ASSETS | |||||||||||||||||
| Current assets: | |||||||||||||||||
| Cash, cash equivalents and restricted cash | $754,667 | $402,565 | |||||||||||||||
| Trade accounts and notes receivable, net | 519,793 | 347,413 | |||||||||||||||
| Inventories, net | 823,637 | 475,213 | |||||||||||||||
| Deferred tax charges and refundable income taxes | 22,024 | 35,312 | |||||||||||||||
| Other current assets | 102,155 | 52,867 | |||||||||||||||
| Total current assets | 2,222,276 | 1,313,370 | |||||||||||||||
| Property, plant and equipment, net | 1,383,693 | 654,098 | |||||||||||||||
| Other assets: | |||||||||||||||||
| Right-of-use assets | 95,397 | 66,563 | |||||||||||||||
| Goodwill | 4,405,292 | 793,702 | |||||||||||||||
| Intangible assets, net | 1,969,729 | 335,113 | |||||||||||||||
| Deferred tax assets and other noncurrent tax assets | 18,637 | 17,671 | |||||||||||||||
| Other | 38,380 | 11,379 | |||||||||||||||
| Total assets | $10,133,404 | $3,191,896 | |||||||||||||||
| LIABILITIES AND EQUITY | |||||||||||||||||
| Current liabilities | |||||||||||||||||
| Short-term debt, including current portion of long-term debt | $219,787 | $— | |||||||||||||||
| Accounts payable | 187,697 | 130,734 | |||||||||||||||
| Accrued liabilities | 390,706 | 199,131 | |||||||||||||||
| Income tax payable | 42,831 | 49,136 | |||||||||||||||
| Total current liabilities | 841,021 | 379,001 | |||||||||||||||
| Long-term debt, excluding current maturities | 5,627,698 | 937,027 | |||||||||||||||
| Long-term lease liability | 82,870 | 60,101 | |||||||||||||||
| Other liabilities | 465,498 | 101,986 | |||||||||||||||
| Shareholders’ equity | 3,116,317 | 1,713,781 | |||||||||||||||
| Total liabilities and equity | $10,133,404 | $3,191,896 | |||||||||||||||
Entegris, Inc. - page 7 of 15
Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Three months ended | Nine months ended | |||||||||||||
| October 1, 2022 | October 2, 2021 | October 1, 2022 | October 2, 2021 | |||||||||||
| Operating activities: | ||||||||||||||
| Net (loss) income | $(73,703) | $117,461 | $151,493 | $290,907 | ||||||||||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||||||||
| Depreciation | 45,203 | 22,841 | 93,489 | 67,510 | ||||||||||
| Amortization | 65,346 | 11,843 | 90,491 | 35,616 | ||||||||||
| Share-based compensation expense | 38,077 | 7,467 | 57,544 | 22,124 | ||||||||||
| Loss on extinguishment of debt and modification | 2,235 | — | 2,235 | 23,338 | ||||||||||
| Other | 52,533 | (1,773) | 61,220 | (1,976) | ||||||||||
| Changes in operating assets and liabilities, net of effects of acquisitions: | ||||||||||||||
| Trade accounts and notes receivable | 22,931 | (5,127) | (34,378) | (53,358) | ||||||||||
| Inventories | (55,394) | (45,464) | (180,335) | (115,187) | ||||||||||
| Accounts payable and accrued liabilities | 56,162 | 52,924 | 83,307 | 37,577 | ||||||||||
| Income taxes payable, refundable income taxes and noncurrent taxes payable | (12,089) | (8,833) | (15,637) | (35,275) | ||||||||||
| Other | 4,231 | (1,835) | 10,801 | 13,198 | ||||||||||
| Net cash provided by operating activities | 145,532 | 149,504 | 320,230 | 284,474 | ||||||||||
| Investing activities: | ||||||||||||||
| Acquisition of property and equipment | (126,739) | (48,885) | (318,836) | (133,986) | ||||||||||
| Acquisition of business, net of cash acquired | (4,474,925) | — | (4,474,925) | (2,250) | ||||||||||
| Other | 1 | 4,326 | 1,124 | 4,416 | ||||||||||
| Net cash used in investing activities | (4,601,663) | (44,559) | (4,792,637) | (131,820) | ||||||||||
| Financing activities: | ||||||||||||||
| Proceeds from revolving credit facility, short-term debt and long-term debt | 2,810,439 | — | 5,416,753 | 451,000 | ||||||||||
| Payments of revolving credit facility, short-term debt and long-term debt | (223,000) | — | (416,000) | (601,000) | ||||||||||
| Payments for debt extinguishment costs | — | — | — | (19,080) | ||||||||||
| Payments for dividends | (14,929) | (10,853) | (42,413) | (32,650) | ||||||||||
| Issuance of common stock | 1,787 | 1,055 | 10,764 | 17,872 | ||||||||||
| Taxes paid related to net share settlement of equity awards | (6,430) | (275) | (22,747) | (15,368) | ||||||||||
| Repurchase and retirement of common stock | — | (20,000) | — | (50,000) | ||||||||||
| Other | (89,182) | (486) | (100,348) | (5,287) | ||||||||||
| Net cash provided by (used in) financing activities | 2,478,685 | (30,559) | 4,846,009 | (254,513) | ||||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (11,118) | 333 | (21,500) | (3,282) | ||||||||||
| (Decrease) increase in cash, cash equivalents and restricted cash | (1,988,564) | 74,719 | 352,102 | (105,141) | ||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 2,743,231 | 401,033 | 402,565 | 580,893 | ||||||||||
| Cash, cash equivalents and restricted cash at end of period | $754,667 | $475,752 | $754,667 | $475,752 | ||||||||||
Entegris, Inc. - page 8 of 15
Entegris, Inc. and Subsidiaries
Segment Information
(In thousands)
(Unaudited)
| Three months ended | Nine months ended | |||||||||||||||||||
| Net sales | October 1, 2022 | October 2, 2021 | July 2, 2022 | October 1, 2022 | October 2, 2021 | |||||||||||||||
| Specialty Chemicals and Engineered Materials | $224,192 | $154,605 | $179,412 | $569,380 | $460,707 | |||||||||||||||
| Microcontamination Control | 280,550 | 225,877 | 274,133 | 821,320 | 660,497 | |||||||||||||||
| Advanced Materials Handling | 210,405 | 186,200 | 224,084 | 632,602 | 507,243 | |||||||||||||||
| Advanced Planarization Solutions | 293,854 | 21,775 | 28,317 | 352,816 | 62,580 | |||||||||||||||
| Inter-segment elimination | (15,173) | (8,964) | (13,457) | (40,155) | (27,338) | |||||||||||||||
| Total net sales | $993,828 | $579,493 | $692,489 | $2,335,963 | $1,663,689 | |||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||||||
| Segment profit | October 1, 2022 | October 2, 2021 | July 2, 2022 | October 1, 2022 | October 2, 2021 | |||||||||||||||
| Specialty Chemicals and Engineered Materials | $34,228 | $33,552 | $35,539 | $107,459 | $98,760 | |||||||||||||||
| Microcontamination Control | 105,335 | 78,399 | 100,109 | 304,062 | 227,097 | |||||||||||||||
| Advanced Materials Handling | 42,077 | 40,503 | 46,926 | 135,693 | 114,691 | |||||||||||||||
| Advanced Planarization Solutions | 18,903 | 7,539 | 10,179 | 40,241 | 21,832 | |||||||||||||||
| Total segment profit | 200,543 | 159,993 | 192,753 | 587,455 | 462,380 | |||||||||||||||
| Amortization of intangibles | 65,346 | 11,843 | 12,494 | 90,491 | 35,616 | |||||||||||||||
| Unallocated expenses | 120,308 | 8,793 | 22,289 | 160,759 | 34,540 | |||||||||||||||
| Total operating income | $14,889 | $139,357 | $157,970 | $336,205 | $392,224 | |||||||||||||||
Entegris, Inc. - page 9 of 15
Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Gross Profit to Adjusted Gross Profit
(In thousands)
(Unaudited)
| Three months ended | Nine months ended | |||||||||||||||||||
| October 1, 2022 | October 2, 2021 | July 2, 2022 | October 1, 2022 | October 2, 2021 | ||||||||||||||||
| Net Sales | $993,828 | $579,493 | $692,489 | $2,335,963 | $1,663,689 | |||||||||||||||
| Gross profit-GAAP | $371,671 | $264,204 | $310,397 | $991,888 | $764,574 | |||||||||||||||
| Adjustments to gross profit: | ||||||||||||||||||||
| Charge for fair value mark-up of acquired inventory sold | 61,932 | — | — | 61,932 | — | |||||||||||||||
| Adjusted gross profit | $433,603 | $264,204 | $310,397 | $1,053,820 | $764,574 | |||||||||||||||
| Gross margin - as a % of net sales | 37.4 | % | 45.6 | % | 44.8 | % | 42.5 | % | 46.0 | % | ||||||||||
| Adjusted gross margin - as a % of net sales | 43.6 | % | 45.6 | % | 44.8 | % | 45.1 | % | 46.0 | % | ||||||||||
Entegris, Inc. - page 10 of 15
Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Segment Profit to Adjusted Operating Income
(In thousands)
(Unaudited)
| Three months ended | Nine months ended | |||||||||||||||||||
| Adjusted segment profit | October 1, 2022 | October 2, 2021 | July 2, 2022 | October 1, 2022 | October 2, 2021 | |||||||||||||||
| SCEM segment profit | $34,228 | $33,552 | $35,539 | $107,459 | $98,760 | |||||||||||||||
| Integration costs | — | — | — | — | — | |||||||||||||||
| Severance and restructuring costs | — | 69 | — | — | 167 | |||||||||||||||
| Charge for fair value write-up of acquired inventory sold | 5,104 | — | — | 5,104 | — | |||||||||||||||
| SCEM adjusted segment profit | $39,332 | $33,621 | $35,539 | $112,563 | $98,927 | |||||||||||||||
| MC segment profit | $105,335 | $78,399 | $100,109 | $304,062 | $227,097 | |||||||||||||||
| Severance and restructuring costs | — | 75 | — | — | 181 | |||||||||||||||
| MC adjusted segment profit | $105,335 | $78,474 | $100,109 | $304,062 | $227,278 | |||||||||||||||
| AMH segment profit | $42,077 | $40,503 | $46,926 | $135,693 | $114,691 | |||||||||||||||
| Severance and restructuring costs | — | 52 | — | — | 127 | |||||||||||||||
| AMH adjusted segment profit | $42,077 | $40,555 | $46,926 | $135,693 | $114,818 | |||||||||||||||
| APS segment profit | $18,903 | $7,539 | $10,179 | $40,241 | 21,832 | |||||||||||||||
| APS Integration | 56,828 | — | — | 56,828 | — | |||||||||||||||
| APS adjusted segment profit | $75,731 | $7,539 | $10,179 | $97,069 | $21,832 | |||||||||||||||
| Unallocated general and administrative expenses | $120,308 | $8,793 | $22,289 | $160,759 | $34,540 | |||||||||||||||
| Unallocated deal and integration costs | (111,040) | (1,290) | (12,575) | (129,869) | (3,966) | |||||||||||||||
| Unallocated severance and restructuring costs | — | (10) | — | — | (54) | |||||||||||||||
| Adjusted unallocated general and administrative expenses | $9,268 | $7,493 | $9,714 | $30,890 | $30,520 | |||||||||||||||
| Total adjusted segment profit | $262,475 | $160,189 | $192,753 | $649,387 | $462,855 | |||||||||||||||
| Adjusted amortization of intangible assets | — | — | — | — | — | |||||||||||||||
| Adjusted unallocated general and administrative expenses | 9,268 | 7,493 | 9,714 | 30,890 | 30,520 | |||||||||||||||
| Total adjusted operating income | $253,207 | $152,696 | $183,039 | $618,497 | $432,335 | |||||||||||||||
Entegris, Inc. - page 11 of 15
Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA
(In thousands)
(Unaudited)
| Three months ended | Nine months ended | |||||||||||||||||||
| October 1, 2022 | October 2, 2021 | July 2, 2022 | October 1, 2022 | October 2, 2021 | ||||||||||||||||
| Net sales | $993,828 | $579,493 | $692,489 | $2,335,963 | $1,663,689 | |||||||||||||||
| Net (loss) income | $(73,703) | $117,461 | $99,491 | $151,493 | $290,907 | |||||||||||||||
| Net (loss) income - as a % of net sales | (7.4 | %) | 20.3 | % | 14.4 | % | 6.5 | % | 17.5 | % | ||||||||||
| Adjustments to net (loss) income: | ||||||||||||||||||||
| Income tax (benefit) expense | (7,015) | 10,640 | 17,517 | 30,377 | 39,947 | |||||||||||||||
| Interest expense, net | 82,755 | 9,339 | 31,343 | 126,962 | 31,563 | |||||||||||||||
| Other expense, net | 12,852 | 1,917 | 9,619 | 27,373 | 29,807 | |||||||||||||||
| GAAP - Operating income | 14,889 | 139,357 | 157,970 | 336,205 | 392,224 | |||||||||||||||
| Operating margin - as a % of net sales | 1.5 | % | 24.0 | % | 22.8 | % | 14.4 | % | 23.6 | % | ||||||||||
| Charge for fair value write-up of acquired inventory sold | 61,932 | — | — | 61,932 | — | |||||||||||||||
| Deal and transaction costs | 31,867 | — | 2,410 | 39,285 | — | |||||||||||||||
| Integration costs | 20,762 | 1,290 | 10,165 | 32,173 | 3,966 | |||||||||||||||
| Contractual and non-cash integration costs | 58,411 | — | — | 58,411 | — | |||||||||||||||
| Severance and restructuring costs | — | 206 | — | — | 529 | |||||||||||||||
| Amortization of intangible assets | 65,346 | 11,843 | 12,494 | 90,491 | 35,616 | |||||||||||||||
| Adjusted operating income | 253,207 | 152,696 | 183,039 | 618,497 | 432,335 | |||||||||||||||
| Adjusted operating margin - as a % of net sales | 25.5 | % | 26.3 | % | 26.4 | % | 26.5 | % | 26.0 | % | ||||||||||
| Depreciation | 45,203 | 22,841 | 24,381 | 93,489 | 67,510 | |||||||||||||||
| Adjusted EBITDA | $298,410 | $175,537 | $207,420 | $711,986 | $499,845 | |||||||||||||||
| Adjusted EBITDA - as a % of net sales | 30.0 | % | 30.3 | % | 30.0 | % | 30.5 | % | 30.0 | % | ||||||||||
Entegris, Inc. - page 12 of 15
Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Net Income and Diluted Earnings per Common Share to Non-GAAP Net Income and Diluted Non-GAAP Earnings per Common Share
(In thousands, except per share data)
(Unaudited)
| Three months ended | Nine months ended | |||||||||||||||||||
| October 1, 2022 | October 2, 2021 | July 2, 2022 | October 1, 2022 | October 2, 2021 | ||||||||||||||||
| GAAP net (loss) income | $(73,703) | $117,461 | $99,491 | $151,493 | $290,907 | |||||||||||||||
| Adjustments to net income: | ||||||||||||||||||||
| Charge for fair value write-up of inventory acquired | 61,932 | — | — | 61,932 | — | |||||||||||||||
| Deal and transaction costs | 31,867 | — | 2,410 | 39,285 | — | |||||||||||||||
| Integration costs | 20,762 | 1,290 | 10,165 | 32,173 | 3,966 | |||||||||||||||
| Contractual and non-cash integration costs | 58,411 | — | — | 58,411 | — | |||||||||||||||
| Severance and restructuring costs | — | 206 | — | — | 529 | |||||||||||||||
| Loss on extinguishment of debt and modification | 2,235 | — | — | 2,235 | 23,338 | |||||||||||||||
| Interest expense, net | 2,397 | — | 22,742 | 29,822 | — | |||||||||||||||
| Amortization of intangible assets | 65,346 | 11,843 | 12,494 | 90,491 | 35,616 | |||||||||||||||
Tax effect of adjustments to net income and discrete items1 | (41,477) | (5,417) | (10,486) | (56,123) | (16,749) | |||||||||||||||
| Non-GAAP net income | $127,770 | $125,383 | $136,816 | $409,719 | $337,607 | |||||||||||||||
| Diluted (loss) earnings per common share | $(0.50) | $0.86 | $0.73 | $1.08 | $2.13 | |||||||||||||||
| Effect of adjustments to net income | $1.35 | $0.06 | $0.27 | $1.83 | $0.34 | |||||||||||||||
| Diluted non-GAAP earnings per common share | $0.85 | $0.92 | $1.00 | $2.91 | $2.47 | |||||||||||||||
| Diluted weighted averages shares outstanding | 148,570 | 136,631 | 136,454 | 140,892 | 136,556 | |||||||||||||||
| Effect of adjustment to diluted weighted average shares outstanding | 1,099 | — | — | — | ||||||||||||||||
| Diluted non-GAAP weighted average shares outstanding | 149,669 | 136,631 | 136,454 | 140,892 | 136,556 | |||||||||||||||
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 13 of 15
Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Outlook to Non-GAAP Outlook
(In millions, except per share data)
(Unaudited)
| Fourth-Quarter Outlook | |||||
| Reconciliation GAAP Operating Margin to non-GAAP Operating Margin and Adjusted EBITDA Margin | December 31, 2022 | ||||
| Net sales | $930 - $970 | ||||
| GAAP - Operating income | $132 - $153 | ||||
| Operating margin - as a % of net sales | 14% - 16% | ||||
| Deal, transaction and integration costs | 23 | ||||
| Amortization of intangible assets | 66 | ||||
| Adjusted operating income | $221 - $242 | ||||
| Adjusted operating margin - as a % of net sales | 24% - 25% | ||||
| Depreciation | 45 | ||||
| Adjusted EBITDA | $266 - $287 | ||||
| Adjusted EBITDA - as a % of net sales | 29 | % | |||
| Fourth-Quarter Outlook | |||||
| Reconciliation GAAP net income to non-GAAP net income | December 31, 2022 | ||||
| GAAP net income | $42 - $50 | ||||
| Adjustments to net income: | |||||
| Deal, transaction and integration costs | 23 | ||||
| Amortization of intangible assets | 66 | ||||
| Income tax effect | (19) | ||||
| Non-GAAP net income | $112 - $120 | ||||
| Fourth-Quarter Outlook | |||||
| Reconciliation GAAP diluted earnings per share to non-GAAP diluted earnings per share | December 31, 2022 | ||||
| Diluted earnings per common share | $0.28 - $0.33 | ||||
| Adjustments to diluted earnings per common share: | |||||
| Deal, transaction and integration costs | 0.15 | ||||
| Amortization of intangible assets | 0.44 | ||||
| Income tax effect | (0.12) | ||||
| Diluted non-GAAP earnings per common share | $0.75 - $0.80 | ||||
Entegris, Inc. - page 14 of 15
Entegris, Inc. and Subsidiaries
Reconciliation of Proforma GAAP Net Sales to Proforma Non-GAAP Net Sales
(In thousands)
(Unaudited)
| Three months ended | Nine months ended | |||||||||||||||||||||||||
| October 1, 2022 | October 2, 2021 | October 1, 2022 | October 2, 2021 | 3Q22 over 3Q21 | YTD 3Q22 over 3Q21 | |||||||||||||||||||||
| Proforma GAAP Net Sales | $993.8 | $889.3 | $2,974.8 | $2,568.7 | 11.8 | % | 15.8 | % | ||||||||||||||||||
| Less: Wood treatment | — | 21.2 | 11.1 | 55.8 | ||||||||||||||||||||||
| Proforma Net Sales - Non GAAP | $993.8 | $868.1 | $2,963.7 | $2,512.9 | 14.5 | % | 17.9 | % | ||||||||||||||||||
### END ###
Entegris, Inc. - page 15 of 15
Earnings Summary November 2, 2022 Third Quarter 2022 Exhibit 99.2
This presentation contains forward-looking statements. The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “should,” “may,” “will,” “would” or the negative thereof and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include statements related to future period guidance; future revenue, EBITDA as a percentage of sales and other financial metrics; future repayments under the Company's credit facilities; the Company’s performance relative to its markets, including the drivers of such performance; the impact, financial or otherwise, of any organizational changes; market and technology trends, including the expected impact of the COVID-19 pandemic; the 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, including the acquisition of CMC Materials, Inc. ("CMC Materials"); the Company’s ability to execute on its strategies; and other matters. These statements involve risks and uncertainties, and actual results may differ materially from those projected in the forward-looking statements. These risks and uncertainties include, but are not limited to, weakening of global and/or regional economic conditions, generally or specifically in the semiconductor industry, which could decrease the demand for the Company’s products and solutions; the level of, and obligations associated with, the Company’s indebtedness, including the debts incurred in connection with the acquisition of CMC Materials; risks related to the acquisition and integration of CMC Materials, including unanticipated difficulties or expenditures relating thereto; the ability to achieve the anticipated synergies and value-creation contemplated by the acquisition of CMC Materials and the diversion of management time on transaction-related matters; risks related to the COVID-19 pandemic on the global economy and financial markets, as well as on the Company, its customers and suppliers, which much impact the Company's sales, gross margin, customer demand and its ability to supply its products to its customers; raw material shortages, supply and labor constraints and price increases, pricing and inflationary pressures and rising interest rates; operational, political and legal risks of the Company’s international operations; the Company’s dependence on sole source and limited source suppliers; 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; substantial competition; 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; the ongoing conflict in Ukraine and the global response thereto; the increasing complexity of certain manufacturing processes; changes in government regulations of the countries in which the Company operates, including the imposition of tariffs, export controls and other trade laws and restrictions and changes to national security and international trade policy, especially as they relate to China; fluctuation of currency exchange rates; fluctuations in the market price of the Company’s stock; and other risk factors and additional information described in the Company’s filings with the Securities and Exchange Commission (the "SEC"), including under the heading “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed on February 4, 2022, and in the Company’s other SEC filings. Except as required under the federal securities laws and the rules and regulations of the SEC, the Company undertakes no obligation to update publicly any forward-looking statements or information contained herein, which speak as of their respective dates. This presentation contains references to “Adjusted EBITDA,” “Adjusted EBITDA – as a % of Net Sales,” “Adjusted Operating Income,” “Adjusted Operating Margin,” “Adjusted Gross Profit,” “Adjusted Gross Margin – as a % of Net Sales,” “Adjusted Segment Profit,” “Adjusted Segment Profit Margin,” “Non-GAAP Operating Expenses,” "Non-GAAP Tax Rate," “Non-GAAP Net Income,” “Diluted Non-GAAP Earnings per Common Share,” "Free Cash Flow" and other measures 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 measure can be found attached to this presentation. 2 Safe Harbor
3 $ in millions, except per share data 3Q22 2Q22 3Q21 3Q22 over 3Q21 3Q22 over 2Q22 Net Revenue $993.8 $692.5 $579.5 71.5% 43.5% Gross Margin 37.4% 44.8% 45.6% Operating Expenses $356.8 $152.4 $124.8 185.8% 134.1% Operating Income $14.9 $158.0 $139.4 (89.3%) (90.6%) Operating Margin 1.5% 22.8% 24.0% Tax Rate 8.7% 15.0% 8.3% Net (Loss) Income $(73.7) $99.5 $117.5 (162.7%) (174.1%) Diluted (Loss) Earnings Per Common Share $(0.50) $0.73 $0.86 (158.1%) (168.5%) Summary – Consolidated Statement of Operations (GAAP)
4 $ in millions, except per share data 3Q22 2Q22 3Q21 3Q22 over 3Q21 3Q22 over 2Q22 Net Revenue $993.8 $692.5 $579.5 71.5% 43.5% Adjusted Gross Margin – as a % of Net Sales2 43.6% 44.8% 45.6% Non-GAAP Operating Expenses3 $180.4 $127.4 $111.5 61.8% 41.6% Adjusted Operating Income $253.2 $183.0 $152.7 65.8% 38.3% Adjusted Operating Margin 25.5% 26.4% 26.3% Non-GAAP Tax Rate4 21.2% 17.0% 11.4% Non-GAAP Net Income5 $127.8 $136.8 $125.4 1.9% (6.6%) Diluted Non-GAAP Earnings Per Common Share $0.85 $1.00 $0.92 (7.6%) (15.0%) Summary – Consolidated Statement of Operations (Non-GAAP)1 1. See GAAP to non-GAAP reconciliation tables in the appendix of this presentation. 2. Excludes charges for fair value write-up of acquired inventory sold. 3. Excludes amortization expense, deal and transaction costs, integration costs and severance and restructuring costs. 4. Reflects the tax effect of non-GAAP adjustments and discrete tax items to GAAP taxes. 5. Excludes the items noted in footnotes 2 and 3, interest expense, net and the tax effect of non-GAAP adjustments.
5 1. See GAAP to non-GAAP reconciliation tables in the appendix of this presentation. Microcontamination Control (MC) $ in millions 3Q22 2Q22 3Q21 3Q22 over 3Q21 3Q22 over 2Q22 Net Revenue $280.6 $274.1 $225.9 24.2% 2.4% Segment Profit $105.3 $100.1 $78.4 34.3% 5.2% Segment Profit Margin 37.5% 36.5% 34.7% Adj. Segment Profit1 $105.3 $100.1 $78.5 34.1% 5.2% Adj. Segment Profit Margin1 37.5% 36.5% 34.7% Sales growth (YOY) was strong across all major product lines, including liquid filtration, gas purification and gas filtration. –––––– Segment profit margin (adjusted) increase was driven primarily by strong overall execution and favorable product mix. 3Q22 Highlights
6 1. See GAAP to non-GAAP reconciliation tables in the appendix of this presentation. Advanced Materials Handling (AMH) $ in millions 3Q22 2Q22 3Q21 3Q22 over 3Q21 3Q22 over 2Q22 Net Revenue $210.4 $224.1 $186.2 13.0% (6.1%) Segment Profit $42.1 $46.9 $40.5 4.0% (10.2%) Segment Profit Margin 20.0% 20.9% 21.8% Adj. Segment Profit1 $42.1 $46.9 $40.6 3.7% (10.2%) Adj. Segment Profit Margin1 20.0% 20.9% 21.8% Sales growth (YOY) was strongest in wafer and fluid handling solutions. The biggest driver of the sequential sales decline was lower sales of the Aramus bag. –––––– Segment profit margin (adjusted) decline was primarily driven by the decrease in volumes in life sciences. 3Q22 Highlights
7 1. See GAAP to non-GAAP reconciliation tables in the appendix of this presentation. 2. 2Q22 and 3Q21 are reported on a proforma basis, see proforma GAAP to proforma non-GAAP reconciliation tables in the appendix of this presentation. Sales growth (YOY) was primarily driven by surface preparation solutions, specialty coatings and advanced deposition materials. $ in millions 3Q22 2Q22 3Q21 3Q22 over 3Q21 3Q22 over 2Q22 Net Revenue1 $224.2 $225.2 $197.3 13.6% (0.4%) Segment Profit1 $34.2 $38.1 $36.9 (7.3%) (10.2%) Segment Profit Margin 15.3% 16.9% 18.7% Adj. Segment Profit1 $39.3 $38.4 $35.9 9.5% 2.3% Adj. Segment Profit Margin1 17.5% 17.1% 18.2% Specialty Chemicals and Engineered Materials (SCEM)2 3Q22 Highlights
8 Advanced Planarization Solutions (APS)2 $ in millions 3Q22 2Q22 3Q21 3Q22 over 3Q21 3Q22 over 2Q22 Net Revenue $293.9 $305.3 $269.8 8.9% (3.7%) Segment Profit1 $18.9 $84.9 $68.5 (72.4%) (77.7%) Segment Profit Margin 6.4% 27.8% 25.4% Adj. Segment Profit1 $75.7 $77.2 $60.6 24.9% (1.9%) Adj. Segment Profit Margin1 25.8% 25.3% 22.5% Sales growth (YOY) was primarily driven by the CMP consumable products. The biggest driver of the sequential sales decline was CMP consumable products. 3Q22 Highlights 1. See GAAP to non-GAAP reconciliation tables in the appendix of this presentation. 2. 2Q22 and 3Q21 are reported on a proforma basis, see proforma GAAP to proforma non-GAAP reconciliation tables in the appendix of this presentation.
9 $ in millions 3Q22 2Q22 3Q21 $ Amount % Total $ Amount % Total $ Amount % Total Cash, Cash Equivalents & Restricted Cash $754.7 7.4% $2,743.2 46.8% $475.8 15.8% Accounts Receivable, net $519.8 5.1% $381.3 6.5% $315.1 10.5% Inventories $823.6 8.1% $583.8 10.0% $429.0 14.2% Net PP&E $1,383.7 13.7% $779.6 13.3% $597.6 19.8% Total Assets $10,133.4 $5,861.2 $3,012.3 Current Liabilities $841.0 8.3% $393.1 6.7% $309.4 10.3% Long-term Debt, Excluding Current Maturities $5,627.7 55.5% $3,408.8 58.2% $936.7 31.1% Total Liabilities $7,017.1 69.2% $3,948.5 67.4% $1,401.5 46.5% Total Shareholders’ Equity $3,116.3 30.8% $1,912.7 32.6% $1,610.8 53.5% AR – DSOs 47.7 50.2 49.6 Inventory Turns 3.5 2.7 3.1 Summary – Balance Sheet Items
10 $ in millions 3Q22 2Q22 3Q21 Beginning Cash Balance $2,743.2 $352.7 $401.0 Cash provided by operating activities 145.5 110.9 149.5 Capital expenditures (126.7) (107.7) (48.9) Proceeds from revolving credit facilities and debt 2,810.4 2,527.3 — Payments on revolving credit facilities and debt (223.0) (114.0) — Acquisition of business, net of cash (4,474.9) — — Repurchase and retirement of common stock — — (20.0) Payments for dividends (14.9) (13.6) (10.9) Other investing activities — — 4.3 Other financing activities (93.8) (4.8) 0.3 Effect of exchange rates (11.1) (7.6) 0.3 Ending Cash Balance $754.7 $2,743.2 $475.8 Free Cash Flow1 $18.8 $3.2 $100.6 Adjusted EBITDA2 $298.4 $207.4 $175.5 Adjusted EBITDA – as a % of net sales2 30.0% 30.0% 30.3% Cash Flows 1. Equals cash from operations less capital expenditures. 2. See GAAP to non-GAAP reconciliation tables in the appendix of this presentation.
11 GAAP $ in millions, except per share data 4Q22 Guidance 3Q22 Actual 2Q22 Actual Net Revenue $930 - $970 $993.8 $692.5 Operating Expenses $259 - $264 $356.8 $152.4 Net Income (Loss) $42 - $50 $(73.7) $99.5 Diluted Earnings (Loss) per Common Share $0.28 - $0.33 $(0.50) $0.73 Operating Margin 14% - 16% 1.5% 22.8% Non-GAAP $ in millions, except per share data 4Q22 Guidance 3Q22 Actual 2Q22 Actual Net Revenue $930 - $970 $993.8 $692.5 Non-GAAP Operating Expenses1 $170 - $175 $180.4 $127.4 Non-GAAP Net Income1 $112 - $120 $127.8 $136.8 Diluted non-GAAP Earnings per Common Share1 $0.75 - $0.80 $0.85 $1.00 Adjusted EBITDA Margin 29% 30.0% 30.0% Outlook 1. See GAAP to non-GAAP reconciliation tables in the appendix of this presentation.
Entegris®, the Entegris Rings Design®, and other product names are trademarks of Entegris, Inc. as listed on entegris.com/trademarks. All product names, logos, and company names are trademarks or registered trademarks of their respective owners. Use of them does not imply any affiliation, sponsorship, or endorsement by the trademark owner. ©2020 Entegris, Inc. All rights reserved. 12
Appendix 13
14 Reconciliation of GAAP Gross Profit to Adjusted Gross Profit Three months ended Nine months ended $ in thousands October 1, 2022 October 2, 2021 July 2, 2022 October 1, 2022 October 2, 2021 Net sales $993,828 $579,493 $692,489 $2,335,963 $1,663,689 Gross profit-GAAP $371,671 $264,204 $310,397 $991,888 $764,574 Adjustments to gross profit: Charge for fair value mark-up of acquired inventory sold 61,932 — — 61,932 — Adjusted gross profit $433,603 $264,204 $310,397 $1,053,820 $764,574 Gross margin – as a % of net sales 37.4% 45.6% 44.8% 42.5% 46.0% Adjusted gross margin – as a % of net sales 43.6% 45.6% 44.8% 45.1% 46.0%
15 Reconciliation of GAAP Operating Expenses and Tax Rate to Non-GAAP Operating Expenses and Tax Rate Three months ended $ in millions October 1, 2022 October 2, 2021 July 2, 2022 GAAP operating expenses $356.8 $124.8 $152.4 Adjustments to operating expenses: Deal and transaction costs 31.9 — 2.4 Integration costs 20.8 1.3 10.2 Contractual and non-cash integration costs 58.4 — — Severance and restructuring costs — 0.2 — Amortization of intangible assets 65.3 11.8 12.5 Non-GAAP operating expenses $180.4 $111.5 $127.4 GAAP tax rate 8.7% 8.3% 15.0% Other 12.5% 3.1% 2.0% Non-GAAP tax rate 21.2% 11.4% 17.0%
16 $ in thousands Three Months Ended Nine months ended October 1, 2022 October 2, 2021 July 2, 2022 October 1, 2022 October 2, 2021 Net sales $993,828 $579,493 $692,489 $2,335,963 $1,663,689 Net (loss) income $(73,703) $117,461 $99,491 $151,493 $290,907 Net (loss) income – as a % of net sales (7.4%) 20.3% 14.4% 6.5% 17.5% Adjustments to net (loss) income: Income tax (benefit) expense (7,015) 10,640 17,517 30,377 39,947 Interest expense, net 82,755 9,339 31,343 126,962 31,563 Other expense, net 12,852 1,917 9,619 27,373 29,807 GAAP - Operating income 14,889 139,357 157,970 336,205 392,224 Operating margin - as a % of net sales 1.5% 24.0% 22.8% 14.4% 23.6% Charge for fair value write-up of acquired inventory sold 61,932 — — 61,932 — Deal and transaction costs 31,867 — 2,410 39,285 — Integration costs 20,762 1,290 10,165 32,173 3,966 Contractual and non-cash integration costs 58,411 — — 58,411 — Severance and restructuring costs — 206 — — 529 Amortization of intangible assets 65,346 11,843 12,494 90,491 35,616 Adjusted operating income 253,207 152,696 183,039 618,497 432,335 Adjusted operating margin - as a % of net sales 25.5% 26.3% 26.4% 26.5% 26.0% Depreciation 45,203 22,841 24,381 93,489 67,510 Adjusted EBITDA $298,410 $175,537 $207,420 $711,986 499,845 Adjusted EBITDA – as a % of net sales 30.0% 30.3% 30.0% 30.5% 30.0% Reconciliation of GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA
17 $ in thousands, except per share data Three months ended Nine months ended October 1, 2022 October 2, 2021 July 2, 2022 October 1, 2022 October 2, 2021 GAAP net (loss) income $(73,703) $117,461 $99,491 $151,493 $290,907 Adjustments to net (loss) income: Charge for fair value write-up of inventory acquired 61,932 — — 61,932 — Deal and transaction costs 31,867 — 2,410 39,285 — Integration costs 20,762 1,290 10,165 32,173 3,966 Contractual and non-cash integration costs 58,411 — — 58,411 — Severance and restructuring costs — 206 — — 529 Loss on extinguishment of debt and modification 2,235 — — 2,235 23,338 Interest expense, net 2,397 — 22,742 29,822 — Amortization of intangible assets 65,346 11,843 12,494 90,491 35,616 Tax effect of adjustments to net income and discrete items1 (41,477) (5,417) (10,486) (56,123) (16,749) Non-GAAP net income $127,770 $125,383 $136,816 $409,719 $337,607 Diluted earnings per common share $(0.50) $0.86 $0.73 $1.08 $2.13 Effect of adjustments to net income $1.35 $0.06 $0.27 $1.83 $0.34 Diluted non-GAAP earnings per common share $0.85 $0.92 $1.00 $2.91 $2.47 Weighted average diluted shares outstanding 148,570 136,631 136,454 140,892 136,556 Effect of adjustment to diluted weighted average shares outstanding 1,099 — — — — Diluted non-GAAP weighted average shares outstanding 149,669 136,631 136,454 140,892 136,556 Reconciliation of GAAP Net Income and Diluted Earnings per Common Share to Non-GAAP Net Income and Diluted Non-GAAP Earnings per Common Share 1. The tax effect of pre-tax adjustments to net income was calculated using the applicable marginal tax rate during the respective years.
18 $ in millions Fourth-Quarter 2022 Outlook Reconciliation GAAP net income to non-GAAP net income GAAP net income $42 - $50 Adjustments to net income: Deal, transaction and integration costs 23 Amortization of intangible assets 66 Income tax effect (19) Non-GAAP net income $112 - $120 Fourth-Quarter 2022 Outlook Reconciliation GAAP diluted earnings per share to non-GAAP diluted earnings per share Diluted earnings per common share $0.28 - $0.33 Adjustments to diluted earnings per common share: Deal, transaction and integration costs 0.15 Amortization of intangible assets 0.44 Income tax effect (0.12) Diluted non-GAAP earnings per common share $0.75 - $0.80 $ in millions Fourth-Quarter 2022 Outlook Reconciliation GAAP operating expenses to non-GAAP operating expenses GAAP operating expenses $259 - $264 Adjustments to net income: Deal, transaction and integration costs 23 Amortization of intangible assets 66 Non-GAAP operating expenses $170 - $175 Reconciliation of GAAP Outlook to Non-GAAP Outlook
19 Reconciliation of GAAP Outlook to Non-GAAP Outlook Continued Fourth-Quarter Outlook Reconciliation GAAP Operating Margin to non-GAAP Operating Margin and Adjusted EBITDA Margin December 31, 2022 Net sales $930 - $970 GAAP - Operating income $132 - $153 Operating margin - as a % of net sales 14% - 16% Deal, transaction and integration costs 23 Amortization of intangible assets 66 Adjusted operating income $221 - $242 Adjusted operating margin - as a % of net sales 24% -25% Depreciation 45 Adjusted EBITDA $266 - $287 Adjusted EBITDA - as a % of net sales 29 %
ENTEGRIS PROPRIETARY AND CONFIDENTIAL – INTERNAL 20 $ in millions Q120 Q220 Q320 Q420 Q121 Q221 Q321 Q421 Q122 Q222 Q322 FY 2020 FY 2021 Nine months October 1, 2022 Sales SCEM $ 190.9 $ 181.1 $ 181.6 $ 198.5 $ 193.8 $ 224.3 $ 218.5 $ 220.7 $ 221.4 $ 225.4 $ 224.2 $ 752.1 $ 857.3 $ 671.0 MC 159.3 183.8 193.5 205.6 207.1 227.5 225.9 258.9 266.6 274.1 280.6 742.2 919.4 821.3 AMH 116.1 126.4 144.4 151.7 148.5 172.5 186.2 197.7 198.1 224.1 210.4 538.6 704.9 632.6 APS 237.5 239.8 243.1 258.0 263.4 265.6 269.8 284.4 299.1 305.3 293.9 978.4 1,083.2 898.3 Inter-segment elimination (8.9) (9.9) (8.9) (11.0) (11.7) (11.6) (11.1) (11.5) (16.1) (17.0) (15.3) (38.7) (45.9) (48.4) Total Sales $ 694.9 $ 721.2 $ 753.7 $ 802.8 $ 801.1 $ 878.3 $ 889.3 $ 950.2 $ 969.1 $ 1,011.9 $ 993.8 $ 2,972.6 $ 3,518.9 $ 2,974.8 Segment Profit (Loss) SCEM $ 53.3 $ 49.7 $ 43.3 $ 34.9 $ (165.4) $ 57.2 $ 36.9 $ 41.4 $ 52.2 $ 38.1 $ 34.2 $ 181.2 $ (29.9) $ 124.5 FV Step-up — — — — (5.1) — — — — — 5.1 — (5.1) 5.1 SCEM Segment Profit (Loss) Adjusted $ 53.3 $ 49.7 $ 43.3 $ 34.9 $ (170.5) $ 57.2 $ 36.9 $ 41.4 $ 52.2 $ 38.1 $ 39.3 $ 181.2 $ (35.0) $ 129.6 MC 50.2 62.1 64.9 71.7 70.6 78.1 78.4 94.2 98.6 100.1 105.3 248.9 321.3 304.0 AMH 20.6 22.8 33.3 34.3 32.1 42.1 40.5 45.3 46.7 46.9 42.1 111.0 160.0 135.7 APS 60.6 69.2 67.1 72.6 72.8 71.9 68.5 80.2 88.9 84.9 18.9 269.5 293.4 192.7 Depreciation ³ (7.7) (7.7) (7.7) (7.7) (7.7) (7.7) (7.7) (7.7) (7.7) (7.7) — (30.8) (30.8) (15.4) FV Step-up ⁴ — — — — (56.8) — — — — — 56.8 — (56.8) 56.8 APS Segment Profit Adjusted $ 52.9 $ 61.5 $ 59.4 $ 64.9 $ 8.3 $ 64.2 $ 60.8 $ 72.5 $ 81.2 $ 77.2 $ 75.7 $ 238.7 $ 205.8 $ 234.1 Total Segment Profit (Loss) $ 177.0 $ 196.1 $ 200.9 $ 205.8 $ (59.5) $ 241.6 $ 216.6 $ 253.4 $ 278.7 $ 262.3 $ 262.4 $ 779.8 $ 652.1 $ 803.4 Proforma GAAP Segment Trend Data Unaudited¹ ² ¹ During the three months ended October 1, 2022, the Company realigned its financial reporting structure reflecting management and organizational changes. The Company will report its financial performance based on four reportable segments: Specialty Chemicals and Engineered Materials (SCEM), Microcontamination Control (MC), Advanced Material Handling (AMH) and Advanced Planarization Solutions (APS). The following prior year information has been recast to reflect this realignment ² The above pro forma results include the addition of CMC Materials, Inc.’s net sales and segment profit amounts recorded prior to the consummation of the merger with the Company on July 6, 2022 to the Company’s reported GAAP net sales and segment profit amounts related to businesses that were transferred to the above business segments after the effectiveness of the merger and are provided as a complement to, and should be read in conjunction with, the condensed financial statements to better facilitate the assessment and measurement of the Company’s operating performance. Intercompany sales between the Company and CMC Materials, Inc have been eliminated, see table below. ³ Represents the preliminary pro forma adjustment to recognize changes to straight-line depreciation expense resulting from the fair value adjustments to acquired property, plant, and equipment. The preliminary fair value of the property, plant and equipment may not represent the actual value of the property, plant and equipment when the Merger is completed resulting in a potential difference in straight-line depreciation expense, and that difference may be material. ⁴ Represents the additional cost of goods sold recognized in connection with the step-up of inventory valuation. Entegris will recognize the increased value of inventory in cost of sales as the inventory is sold, which for purposes of these pro forma presentation is assumed to occur within the first quarter of 2021 based on inventory turns and is non-recurring in nature.
ENTEGRIS PROPRIETARY AND CONFIDENTIAL – INTERNAL 21 $ in millions Q120 Q220 Q320 Q420 Q121 Q221 Q321 Q421 Q122 Q222 Q322 FY 2020 FY 2021 Nine months October 1, 2022 Total Segment Profit (Loss) $ 177.0 $ 196.1 $ 200.9 $ 205.8 $ (59.5) $ 241.6 $ 216.6 $ 253.4 $ 278.7 $ 262.3 $ 262.4 $ 779.8 $ 652.1 $ 803.4 Amortization of intangible assets 34.8 30.7 29.7 28.9 28.4 28.8 28.6 28.1 28.5 28.3 65.3 124.1 113.9 122.1 Additional Amortization ⁵ 36.3 36.3 36.3 36.3 36.3 36.3 36.3 36.3 36.3 36.3 — 145.2 145.2 72.6 Stock based ⁶ compensation — — — — 6.1 — — — — — — — 6.1 — Transaction Expenses ⁷ — — — — 160.0 — — (11.1) (17.8) (22.3) (111.0) — 148.9 (151.1) Unallocated expenses 17.6 20.7 26.1 24.2 23.8 25.5 19.2 33.0 38.0 39.9 120.3 88.6 101.5 198.2 Total Operating Income (Loss) $ 88.3 $ 108.4 $ 108.8 $ 116.4 $ (314.1) $ 151.0 $ 132.5 $ 167.1 $ 193.7 $ 180.1 $ 187.8 $ 421.9 $ 136.5 $ 561.6 Proforma GAAP Segment Trend Data Unaudited¹ ² (continued) ¹ During the three months ended October 1, 2022, the Company realigned its financial reporting structure reflecting management and organizational changes. The Company will report its financial performance based on four reportable segments: Specialty Chemicals and Engineered Materials (SCEM), Microcontamination Control (MC), Advanced Material Handling (AMH) and Advanced Planarization Solutions (APS). The following prior year information has been recast to reflect this realignment ² The above pro forma results include the addition of CMC Materials, Inc.’s net sales and segment profit amounts recorded prior to the consummation of the merger with the Company on July 6, 2022 to the Company’s reported GAAP net sales and segment profit amounts related to businesses that were transferred to the above business segments after the effectiveness of the merger and are provided as a complement to, and should be read in conjunction with, the condensed financial statements to better facilitate the assessment and measurement of the Company’s operating performance. Intercompany sales between the Company and CMC Materials, Inc have been eliminated, see table below. ⁵ Represents estimated incremental straight-line amortization expense resulting from the allocation of purchase consideration to definite-lived intangible assets subject to amortization. ⁶ Represents the incremental pro forma stock-based compensation expense for accelerated vesting upon the change in control for stock options, restricted stock units, restricted stock shares, phantom units, and other deferred restricted stock units. ⁷ Represents one-time transaction-related costs for both Entegris and CMC that have yet to be expensed or accrued in the historical financial statements in connection with the Merger including bank fees, legal fees, consulting fees, severance payments, retention payments, CICSPA, and other transaction expenses.
ENTEGRIS PROPRIETARY AND CONFIDENTIAL – INTERNAL 22 $ in millions Q120 Q220 Q320 Q420 Q121 Q221 Q321 Q421 Q122 Q222 Q322 FY 2020 FY 2021 Nine months October 1, 2022 Sales - GAAP SCEM $ 190.9 $ 181.1 $ 181.6 $ 198.5 $ 193.8 $ 224.3 $ 218.5 $ 220.7 $ 221.4 $ 225.4 $ 224.2 $ 752.1 $ 857.3 $ 671.0 MC 159.3 183.8 193.5 205.6 207.1 227.5 225.9 258.9 266.6 274.1 280.6 742.2 919.4 821.3 AMH 116.1 126.4 144.4 151.7 148.5 172.5 186.2 197.7 198.1 224.1 210.4 538.6 704.9 632.6 APS 237.5 239.8 243.1 258 263.4 265.6 269.8 284.4 299.1 305.3 293.9 978.4 1083.2 898.3 Inter-segment elimination (8.9) (9.9) (8.9) (11.0) (11.7) (11.6) (11.1) (11.5) (16.1) (17.0) (15.3) (38.7) (45.9) (48.4) Total Sales $ 694.9 $ 721.2 $ 753.7 $ 802.8 $ 801.1 $ 878.3 $ 889.3 $ 950.2 $ 969.1 $ 1,011.9 $ 993.8 $ 2,972.6 $ 3,518.9 $ 2,974.8 Adjusted Segment Sales SCEM $ 175.9 $ 162.3 $ 163.4 $ 181.2 $ 178.3 $ 205.2 $ 197.3 $ 205.7 $ 210.5 $ 225.2 $ 224.2 $ 682.8 $ 786.5 $ 659.9 MC 159.3 183.8 193.5 205.6 207.1 227.5 225.9 258.9 266.6 274.1 280.6 742.2 919.4 821.3 AMH 116.1 126.4 144.4 151.7 148.5 172.5 186.2 197.7 198.1 224.1 210.4 538.6 704.9 632.6 APS 237.5 239.8 243.1 258 263.4 265.6 269.8 284.4 299.1 305.3 293.9 978.4 1083.2 898.3 Inter-segment elimination (8.9) (9.9) (8.9) (11.0) (11.7) (11.6) (11.1) (11.5) (16.1) (17.0) (15.3) (38.7) (45.9) (48.4) Total Adjusted Sales $ 679.9 $ 702.4 $ 735.5 $ 785.5 $ 785.6 $ 859.2 $ 868.1 $ 935.2 $ 958.2 $ 1,011.7 $ 993.8 $ 2,903.3 $ 3,448.1 $ 2,963.7 Adjusted SCEM segment Sales: SCEM segment Sales $ 190.9 $ 181.1 $ 181.6 $ 198.5 $ 193.8 $ 224.3 $ 218.5 $ 220.7 $ 221.4 $ 225.4 $ 224.2 $ 752.1 $ 857.3 $ 671.0 Removal of wood treatment sales (15.0) (18.8) (18.2) (17.3) (15.5) (19.1) (21.2) (15.0) (10.9) (0.2) — (69.3) (70.8) (11.1) SCEM adjusted segment sales $ 175.9 $ 162.3 $ 163.4 $ 181.2 $ 178.3 $ 205.2 $ 197.3 $ 205.7 $ 210.5 $ 225.2 $ 224.2 $ 682.8 $ 786.5 $ 659.9 Proforma Non-GAAP Segment Trend Data Unaudited¹ ² ¹ During the three months ended October 1, 2022, the Company realigned its financial reporting structure reflecting management and organizational changes. The Company will report its financial performance based on four reportable segments: Specialty Chemicals and Engineered Materials (SCEM), Microcontamination Control (MC), Advanced Material Handling (AMH) and Advanced Planarization Solutions (APS). The following prior year information has been recast to reflect this realignment ² The above pro forma results include the addition of CMC Materials, Inc.’s net sales and segment profit amounts recorded prior to the consummation of the merger with the Company on July 6, 2022 to the Company’s reported GAAP net sales and segment profit amounts related to businesses that were transferred to the above business segments after the effectiveness of the merger and are provided as a complement to, and should be read in conjunction with, the condensed financial statements to better facilitate the assessment and measurement of the Company’s operating performance. Intercompany sales between the Company and CMC Materials, Inc have been eliminated, see table below.
ENTEGRIS PROPRIETARY AND CONFIDENTIAL – INTERNAL 23 $ in millions Q120 Q220 Q320 Q420 Q121 Q221 Q321 Q421 Q122 Q222 Q322 FY 2020 FY 2021 Nine months October 1, 2022 Segment Profit - GAAP SCEM $ 53.3 $ 49.7 $ 43.3 $ 34.9 $ (170.5) $ 57.2 $ 36.9 $ 41.4 $ 52.2 $ 38.1 $ 39.3 $ 181.2 $ (35.0) $ 129.6 MC 50.2 62.1 64.9 71.7 70.6 78.1 78.4 94.2 98.6 100.1 105.3 248.9 321.3 304.0 AMH 20.6 22.8 33.3 34.3 32.1 42.1 40.5 45.3 46.7 46.9 42.1 111.0 160.0 135.7 APS 52.9 61.5 59.4 64.9 8.3 64.2 60.8 72.5 81.2 77.2 75.7 238.7 205.8 234.1 Total Segment profit (loss) $ 177.0 $ 196.1 $ 200.9 $ 205.8 $ (59.5) $ 241.6 $ 216.6 $ 253.4 $ 278.7 $ 262.3 $ 262.4 $ 779.8 $ 652.1 $ 803.4 Amortization of intangible assets 71.1 67 66 65.2 64.7 65.1 64.9 64.4 64.8 64.6 65.3 269.3 259.1 194.7 Unallocated expenses 17.6 20.7 26.1 24.2 189.9 25.5 19.2 21.9 20.2 17.6 9.3 88.6 256.5 47.1 Total Operating Income (Loss) $ 88.3 $ 108.4 $ 108.8 $ 116.4 $ (314.1) $ 151.0 $ 132.5 $ 167.1 $ 193.7 $ 180.1 $ 187.8 $ 421.9 $ 136.5 $ 561.6 Adjusted Segment Profit (Loss) SCEM segment profit (loss) $ 53.3 $ 49.7 $ 43.3 $ 34.9 $ (170.5) $ 57.2 $ 36.9 $ 41.4 $ 52.2 $ 38.1 $ 39.3 $ 181.2 $ (35.0) $ 129.6 Adjustments for wood treatment (10.6) (13.3) (12.9) (12.9) (11.5) (14.2) (15.7) (10.7) (7.4) 0.3 — (49.7) (52.1) (7.1) Impairment charges — — 2.3 7.3 208.2 3.1 11.7 9.4 — — — 9.6 232.4 — Integration Expenses — (1.6) — — — — — — — — — (1.6) — — FV Mark-up of Inventory sold 0.2 — — — 5.1 — — 0.4 — — 0.2 5.5 — Other adjustments 0.1 0.3 0.1 (1.0) — 2.9 (0.3) (3.3) — 0.5 1.6 (3.3) Severance - Restructuring 0.2 0.5 0.3 0.2 — 0.1 0.1 — — — — 1.2 0.2 — SCEM adjusted segment profit $ 43.2 $ 35.6 $ 33.0 $ 29.6 $ 30.3 $ 46.2 $ 35.9 $ 40.2 $ 41.5 $ 38.4 $ 39.3 $ 141.4 $ 152.6 $ 119.2 MC segment Profit $ 50.2 $ 62.1 $ 64.9 $ 71.7 $ 70.6 $ 78.1 $ 78.4 $ 94.2 $ 98.6 $ 100.1 $ 105.3 $ 248.9 $ 321.3 $ 304.0 FV Mark-up of Inventory sold 0.1 — — — — — — — — — — 0.1 — — Severance - Restructuring 0.2 0.5 0.3 0.2 0.1 0.1 0.1 — — — — 1.2 0.3 — MC adjusted segment profit $ 50.5 $ 62.6 $ 65.2 $ 71.9 $ 70.7 $ 78.2 $ 78.5 $ 94.2 $ 98.6 $ 100.1 $ 105.3 $ 250.2 $ 321.6 $ 304.0 Proforma Non-GAAP Segment Trend Data Unaudited¹ ² (continued) ¹ During the three months ended October 1, 2022, the Company realigned its financial reporting structure reflecting management and organizational changes. The Company will report its financial performance based on four reportable segments: Specialty Chemicals and Engineered Materials (SCEM), Microcontamination Control (MC), Advanced Material Handling (AMH) and Advanced Planarization Solutions (APS). The following prior year information has been recast to reflect this realignment ² The above pro forma results include the addition of CMC Materials, Inc.’s net sales and segment profit amounts recorded prior to the consummation of the merger with the Company on July 6, 2022 to the Company’s reported GAAP net sales and segment profit amounts related to businesses that were transferred to the above business segments after the effectiveness of the merger and are provided as a complement to, and should be read in conjunction with, the condensed financial statements to better facilitate the assessment and measurement of the Company’s operating performance. Intercompany sales between the Company and CMC Materials, Inc have been eliminated, see table below.
ENTEGRIS PROPRIETARY AND CONFIDENTIAL – INTERNAL 24 $ in millions Q120 Q220 Q320 Q420 Q121 Q221 Q321 Q421 Q122 Q222 Q322 FY 2020 FY 2021 Nine months October 1, 2022 Adjusted Segment Profit AMH segment Profit $ 20.6 $ 22.8 $ 33.3 $ 34.3 $ 32.1 $ 42.1 $ 40.5 $ 45.3 $ 46.7 $ 46.9 $ 42.1 $ 111.0 $ 160.0 $ 135.7 FV Mark-up of Inventory sold — — 0.2 — — — — — — — — 0.2 — — Severance - Restructuring 0.1 0.8 0.2 0.1 — — 0.1 — — — — 1.2 0.1 — AMH adjusted segment profit $ 20.7 $ 23.6 $ 33.7 $ 34.4 $ 32.1 $ 42.1 $ 40.6 $ 45.3 $ 46.7 $ 46.9 $ 42.1 $ 112.4 $ 160.1 $ 135.7 APS segment profit $ 52.9 $ 61.5 $ 59.4 $ 64.9 $ 8.3 $ 64.2 $ 60.8 $ 72.5 $ 81.2 $ 77.2 $ 75.7 $ 238.7 $ 205.8 $ 234.1 FV Mark-up of Inventory sold APS — — — — 56.8 — — — — — — — 56.8 — Other adjustments 0.2 0.1 0.1 0.1 — 1.5 (0.2) 0.5 — — — 0.5 1.8 — APS adjusted segment profit $ 53.1 $ 61.6 $ 59.5 $ 65.0 $ 65.1 $ 65.7 $ 60.6 $ 73.0 $ 81.2 $ 77.2 $ 75.7 $ 239.2 $ 264.4 $ 234.1 Unallocated expenses $ 17.6 $ 20.7 $ 26.1 $ 24.2 $ 189.9 $ 25.5 $ 19.2 $ 21.9 $ 20.2 $ 17.6 $ 9.3 $ 88.6 $ 256.5 $ 47.1 Other adjustments 0.5 1.9 0.5 1.1 (0.4) (1.6) (0.3) 2.7 0.3 0.1 0.1 4.0 0.4 0.5 Deal, transaction & integration costs 3.8 3.6 5.5 3.7 170.3 4.0 3.5 — — — — 16.6 177.8 — Adjusted unallocated expenses $ 13.3 $ 15.2 $ 20.1 $ 19.4 $ 20.0 $ 23.1 $ 16.0 $ 19.2 $ 19.9 $ 17.5 $ 9.2 $ 68.0 $ 78.3 $ 46.6 Total Adjusted Segment Profit $ 167.5 $ 183.4 $ 191.4 $ 200.9 $ 198.2 $ 232.2 $ 215.6 $ 252.7 $ 268.0 $ 262.6 $ 262.4 $ 743.2 $ 898.7 $ 793.0 Adjusted unallocated expenses 13.3 15.2 20.1 19.4 20.0 23.1 16.0 19.2 19.9 17.5 9.2 68.0 78.3 46.6 Total adjusted operating Income $ 154.2 $ 168.2 $ 171.3 $ 181.5 $ 178.2 $ 209.1 $ 199.6 $ 233.5 $ 248.1 $ 245.1 $ 253.2 $ 675.2 $ 820.4 $ 746.4 Proforma Non-GAAP Segment Trend Data Unaudited¹ ² (continued) ¹ During the three months ended October 1, 2022, the Company realigned its financial reporting structure reflecting management and organizational changes. The Company will report its financial performance based on four reportable segments: Specialty Chemicals and Engineered Materials (SCEM), Microcontamination Control (MC), Advanced Material Handling (AMH) and Advanced Planarization Solutions (APS). The following prior year information has been recast to reflect this realignment ² The above pro forma results include the addition of CMC Materials, Inc.’s net sales and segment profit amounts recorded prior to the consummation of the merger with the Company on July 6, 2022 to the Company’s reported GAAP net sales and segment profit amounts related to businesses that were transferred to the above business segments after the effectiveness of the merger and are provided as a complement to, and should be read in conjunction with, the condensed financial statements to better facilitate the assessment and measurement of the Company’s operating performance. Intercompany sales between the Company and CMC Materials, Inc have been eliminated, see table below. $ in millions Q120 Q220 Q320 Q420 Q121 Q221 Q321 Q421 Q122 Q222 Q322 FY 2020 FY 2021 Nine months October 1, 2022 Intercompany sales and COGS ² $ 1.6 $ 1.9 $ 1.5 $ 2.7 $ 2.3 $ 2.5 $ 2.1 $ 2.0 $ 4.7 $ 3.6 $ 3.0 $ 7.7 $ 8.9 $ 11.3