BILLERICA, Mass.--(BUSINESS WIRE)--Entegris, Inc. (NASDAQ: ENTG), today reported its financial results for the Company’s third quarter ended September 28, 2024.
Bertrand Loy, Entegris’ president and chief executive officer, said: “The team delivered margins and non-GAAP EPS within our guidance range, despite third quarter sales coming in below expectations, with revenue growth excluding divestitures of 7 percent year-on-year.”
Mr. Loy added: “2024 is a transition year for the semiconductor industry. The market recovery is taking longer than anticipated and 2024 continues to be a year of limited technology transitions. Customers with significant exposure to AI applications are performing well, but the rest of the industry continues to be challenged. In this environment, we remain focused on maintaining strong profitability while continuing to fund critical investments that further improve our technology leadership and position us to benefit as market demand accelerates.”
“Looking ahead, we remain confident about the growth prospects for the semi industry and Entegris. The technology roadmaps continue to be opportunity-rich for Entegris as our customers drive for more complex device architectures and further miniaturization,” he said. “The resulting process complexity is making our expertise in materials science and materials purity increasingly valuable to our customers. This is expected to fuel our market outperformance and incremental content per wafer opportunities, as new nodes ramp in memory and advanced logic in the years to come.”
Quarterly Financial Results Summary
(in thousands, except percentages and per share data) |
|||
GAAP Results |
Sep 28, 2024 |
Sep 30, 2023 |
Jun 29, 2024 |
Net sales |
$807,694 |
$888,239 |
$812,652 |
Gross margin - as a % of net sales |
46.0% |
41.3% |
46.2% |
Operating margin - as a % of net sales |
16.9% |
13.2% |
16.0% |
Net income |
$77,582 |
$33,212 |
$67,696 |
Diluted earnings per common share |
$0.51 |
$0.22 |
$0.45 |
|
|
|
|
Non-GAAP Results |
Sep 28, 2024 |
Sep 30, 2023 |
Jun 29, 2024 |
Adjusted gross margin - as a % of net sales |
46.0% |
41.4% |
46.2% |
Adjusted operating margin - as a % of net sales |
23.0% |
22.0% |
22.0% |
Adjusted EBITDA - as a % of net sales |
28.8% |
26.5% |
27.8% |
Diluted non-GAAP earnings per common share |
$0.77 |
$0.68 |
$0.71 |
Fourth Quarter Outlook
For the Company’s guidance for the fourth quarter ending December 31, 2024, the Company expects sales of $810 million to $840 million. The midpoint of this guidance range represents an 8% year-on-year increase, excluding the impact of divestitures. GAAP net income of $75 million to $86 million and diluted earnings per common share is expected to be between $0.49 and $0.56. On a non-GAAP basis, the Company expects diluted earnings per common share to range from $0.75 to $0.82, reflecting net income on a non-GAAP basis in the range of $114 million to $125 million. The Company also expects adjusted EBITDA of approximately 28.5% to 29.5% of sales.
Segment Results
The Company currently operates in three segments:
Materials Solutions (MS): MS provides materials-based solutions, such as chemical mechanical planarization slurries and pads, deposition materials, process chemistries and gases, formulated cleans, etchants and other specialty materials that enable our customers to achieve better device performance and faster time to yield, while providing for lower total cost of ownership.
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.
On October 30, 2024, Entegris realigned its operating structure to combine the MC and AMH segments, resulting in two reportable segments: the MS segment and the combined MC / AMH segment. As the realignment occurred during the fourth fiscal quarter of 2024, Entegris has presented the results for its three reporting segments through Q3 2024. Beginning in the fourth quarter, Entegris will provide recasted financial information for the two segment structure.
Third-Quarter Results
Entegris will hold a conference call to discuss its results for the third quarter on Monday, November 4, 2024, at 9:00 a.m. Eastern Time. Participants should dial 800-579-2543 or +1 785-424-1789, referencing confirmation ID: ENTGQ324. Participants are asked to dial in 10 minutes prior to the start of the call. For the live webcast and replay of the call, please Click Here.
Management’s slide presentation concerning the results for the third quarter will be posted on the Investor Relations section of www.entegris.com.
About Entegris
Entegris is a leading supplier of advanced materials and process solutions for the semiconductor and other high-tech industries. Entegris has approximately 8,000 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, 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 Net Sales, 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 net sales to Adjusted Net Sales (excluding divestitures), 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 fluctuations in demand for semiconductors; global economic uncertainty and the risks inherent in operating a global business; supply chain matters; inflationary pressures; 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; 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 obtain, protect and enforce intellectual property rights; information technology risks; the Company’s ability to execute on our business strategies, including the Company’s expansion of its manufacturing presence in Taiwan and in Colorado Springs; the Company’s capital allocation strategy, which may be modified at any time for any reason, including with respect to share repurchases, dividends, debt repayments and potential acquisitions; the impact of the acquisitions and divestitures the Company has made and commercial partnerships the Company has established, including the acquisition of CMC Materials, Inc. (now known as CMC Materials LLC) (“CMC Materials”); the amount of goodwill we carry on our balance sheets; key employee retention; future capital and other expenditures, including estimates thereof; the Company’s expected tax rate; the impact, financial or otherwise, of any organizational changes or changes in the legal and regulatory environment in which we operate; the impact of accounting pronouncements; quantitative and qualitative disclosures about market risk; climate change and our environmental, social and governance commitments; and other matters. These forward-looking statements are based on current management expectations and assumptions only as of the date of this news release, 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 the ability to achieve the anticipated value-creation contemplated by the acquisition of CMC Materials; raw material shortages, supply and labor constraints, price increases, 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, divestitures or other similar transactions; the Company’s ability to effectively implement any organizational changes; the Company’s ability to protect and enforce intellectual property rights; the impact of regional and global instabilities, hostilities and geopolitical uncertainty, including, but not limited to, the ongoing conflicts between Ukraine and Russia, between Israel and Hamas and other tensions in the Middle East, as well as the global responses 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, 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 U.S. 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, 2023, filed on February 15, 2024, 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. and Subsidiaries Condensed Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) |
||||||
|
Three months ended |
|||||
|
Sep 28, 2024 |
Sep 30, 2023 |
Jun 29, 2024 |
|||
Net sales |
$807,694 |
$888,239 |
$812,652 |
|||
Cost of sales |
435,869 |
521,165 |
436,833 |
|||
Gross profit |
371,825 |
367,074 |
375,819 |
|||
Selling, general and administrative expenses |
108,455 |
116,051 |
116,315 |
|||
Engineering, research and development expenses |
80,903 |
66,810 |
81,885 |
|||
Amortization of intangible assets |
46,226 |
51,239 |
47,513 |
|||
Goodwill impairment |
— |
15,913 |
— |
|||
Operating income |
136,241 |
117,061 |
130,106 |
|||
Interest expense, net |
50,419 |
75,594 |
52,527 |
|||
Other (income) expense, net |
(212) |
10,243 |
2,977 |
|||
Income before income tax expense (benefit) |
86,034 |
31,224 |
74,602 |
|||
Income tax expense (benefit) |
8,190 |
(2,127) |
6,689 |
|||
Equity in net loss of affiliates |
262 |
139 |
217 |
|||
Net income |
$77,582 |
$33,212 |
$67,696 |
|||
|
|
|
|
|||
|
|
|
||||
Basic earnings per common share: |
$0.51 |
$0.22 |
$0.45 |
|||
Diluted earnings per common share: |
$0.51 |
$0.22 |
$0.45 |
|||
|
|
|
|
|||
Weighted average shares outstanding: |
|
|
|
|||
Basic |
151,196 |
150,127 |
150,801 |
|||
Diluted |
151,924 |
151,229 |
151,819 |
|||
Entegris, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) |
||||
|
Nine months ended |
|||
|
Sep 28, 2024 |
Sep 30, 2023 |
||
Net sales |
$2,391,371 |
$2,711,635 |
||
Cost of sales |
1,291,907 |
1,558,710 |
||
Gross profit |
1,099,464 |
1,152,925 |
||
Selling, general and administrative expenses |
336,963 |
431,514 |
||
Engineering, research and development expenses |
234,664 |
209,746 |
||
Amortization of intangible assets |
143,898 |
163,493 |
||
Goodwill impairment |
— |
104,785 |
||
Gain on termination of alliance agreement |
— |
(154,754) |
||
Operating income |
383,939 |
398,141 |
||
Interest expense, net |
157,325 |
239,020 |
||
Other expense, net |
17,050 |
13,309 |
||
Income before income tax expense |
209,564 |
145,812 |
||
Income tax expense |
18,335 |
2,851 |
||
Equity in net loss of affiliates |
685 |
269 |
||
Net income |
$190,544 |
$142,692 |
||
|
|
|
||
|
|
|||
Basic earnings per common share: |
$1.26 |
$0.95 |
||
Diluted earnings per common share: |
$1.26 |
$0.95 |
||
|
|
|
||
Weighted average shares outstanding: |
|
|
||
Basic |
150,849 |
149,793 |
||
Diluted |
151,820 |
150,816 |
||
Entegris, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (In thousands) (Unaudited) |
||||
|
|
Sep 28, 2024 |
Dec 31, 2023 |
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$432,072 |
$456,929 |
||
Trade accounts and notes receivable, net |
503,165 |
457,052 |
||
Inventories, net |
643,034 |
607,051 |
||
Deferred tax charges and refundable income taxes |
26,941 |
63,879 |
||
Assets held-for-sale |
7,004 |
278,753 |
||
Other current assets |
102,873 |
113,663 |
||
Total current assets |
1,715,089 |
1,977,327 |
||
Property, plant and equipment, net |
1,542,356 |
1,468,043 |
||
Right-of-use assets |
84,788 |
80,399 |
||
Goodwill |
3,946,575 |
3,945,860 |
||
Intangible assets, net |
1,138,630 |
1,281,969 |
||
Deferred tax assets and other noncurrent tax assets |
20,340 |
31,432 |
||
Other assets |
24,979 |
27,561 |
||
Total assets |
$8,472,757 |
$8,812,591 |
||
LIABILITIES AND EQUITY |
|
|||
Current liabilities |
|
|
||
Current portion of long-term debt |
65,000 |
— |
||
Accounts payable |
174,189 |
134,211 |
||
Accrued liabilities |
302,336 |
283,158 |
||
Liabilities held-for-sale |
925 |
19,223 |
||
Income tax payable |
44,241 |
77,403 |
||
Total current liabilities |
586,691 |
513,995 |
||
Long-term debt |
4,060,690 |
4,577,141 |
||
Long-term lease liabilities |
73,017 |
68,986 |
||
Other liabilities |
159,849 |
243,875 |
||
Shareholders’ equity |
3,592,510 |
3,408,594 |
||
Total liabilities and equity |
$8,472,757 |
$8,812,591 |
||
Entegris, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) |
||||||||
|
Three months ended |
Nine months ended |
||||||
|
Sep 28, 2024 |
Sep 30, 2023 |
Sep 28, 2024 |
Sep 30, 2023 |
||||
Operating activities: |
|
|
|
|
||||
Net income |
$77,582 |
$33,212 |
$190,544 |
$142,692 |
||||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation |
47,098 |
39,631 |
139,848 |
130,125 |
||||
Amortization |
46,226 |
51,239 |
143,898 |
163,493 |
||||
Share-based compensation expense |
15,552 |
10,280 |
50,349 |
52,416 |
||||
Provision for deferred income taxes |
(22,979) |
(28,552) |
(47,067) |
(95,366) |
||||
Loss on extinguishment of debt |
— |
3,593 |
11,385 |
10,862 |
||||
Impairment of goodwill |
— |
15,913 |
— |
104,785 |
||||
Gain on termination of alliance agreement |
— |
— |
— |
(154,754) |
||||
(Gain) loss from sale of businesses and held-for-sale assets, net |
— |
— |
(4,311) |
28,579 |
||||
Other |
10,531 |
18,309 |
58,795 |
67,833 |
||||
Changes in operating assets and liabilities, net of effects of acquisitions: |
|
|
|
|
||||
Trade accounts and notes receivable |
(40,167) |
(18,236) |
(52,075) |
(295) |
||||
Inventories |
(18,213) |
68,349 |
(68,872) |
63,340 |
||||
Accounts payable and accrued liabilities |
95,197 |
27,940 |
52,563 |
11,804 |
||||
Income taxes payable, refundable income taxes and noncurrent taxes payable |
(6,785) |
(21,204) |
(23,708) |
(36,774) |
||||
Other |
(6,815) |
(451) |
4,276 |
(2,369) |
||||
Net cash provided by operating activities |
197,227 |
200,023 |
455,625 |
486,371 |
||||
Investing activities: |
|
|
|
|
||||
Acquisition of property and equipment |
(82,193) |
(78,139) |
(208,082) |
(328,182) |
||||
Proceeds, net from sale of businesses |
1,189 |
— |
250,789 |
134,286 |
||||
Proceeds from termination of alliance agreement |
— |
— |
— |
169,251 |
||||
Other |
42 |
1,553 |
(1,875) |
1,919 |
||||
Net cash (used in) provided by investing activities |
(80,962) |
(76,586) |
40,832 |
(22,726) |
||||
Financing activities: |
|
|
|
|
||||
Proceeds from debt |
— |
100,279 |
254,537 |
217,449 |
||||
Payments of debt |
— |
(175,279) |
(728,311) |
(603,950) |
||||
Payments for debt issuance costs |
— |
— |
— |
(3,475) |
||||
Payments for dividends |
(15,123) |
(15,052) |
(45,478) |
(45,202) |
||||
Issuance of common stock |
3,150 |
866 |
13,617 |
30,174 |
||||
Taxes paid related to net share settlement of equity awards |
(840) |
(1,894) |
(16,146) |
(11,540) |
||||
Other |
(913) |
(345) |
(1,815) |
(923) |
||||
Net cash used in financing activities |
(13,726) |
(91,425) |
(523,596) |
(417,467) |
||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
9,525 |
(5,009) |
2,282 |
(15,597) |
||||
Increase (decrease) in cash, cash equivalents and restricted cash |
112,064 |
27,003 |
(24,857) |
30,581 |
||||
Cash, cash equivalents and restricted cash at beginning of period |
320,008 |
567,017 |
456,929 |
563,439 |
||||
Cash, cash equivalents and restricted cash at end of period |
$432,072 |
$594,020 |
$432,072 |
$594,020 |
||||
Entegris, Inc. and Subsidiaries Segment Information (In thousands) (Unaudited) |
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|
Three months ended |
Nine months ended |
||||||||
Net sales |
Sep 28, 2024 |
Sep 30, 2023 |
Jun 29, 2024 |
Sep 28, 2024 |
Sep 30, 2023 |
|||||
Materials Solutions |
$346,634 |
$435,538 |
$342,333 |
$1,039,003 |
$1,324,502 |
|||||
Microcontamination Control |
286,995 |
286,217 |
293,769 |
848,628 |
839,128 |
|||||
Advanced Materials Handling |
182,177 |
180,248 |
188,225 |
533,256 |
589,457 |
|||||
Inter-segment elimination |
(8,112) |
(13,764) |
(11,675) |
(29,516) |
(41,452) |
|||||
Total net sales |
$807,694 |
$888,239 |
$812,652 |
$2,391,371 |
$2,711,635 |
|||||
|
Three months ended |
Nine months ended |
||||||||
Segment profit |
Sep 28, 2024 |
Sep 30, 2023 |
Jun 29, 2024 |
Sep 28, 2024 |
Sep 30, 2023 |
|||||
Materials Solutions |
$71,706 |
$56,955 |
$70,268 |
$209,098 |
$243,171 |
|||||
Microcontamination Control |
96,704 |
101,132 |
93,709 |
276,968 |
297,790 |
|||||
Advanced Materials Handling |
30,611 |
31,642 |
28,980 |
84,197 |
115,637 |
|||||
Total segment profit |
199,021 |
189,729 |
192,957 |
570,263 |
656,598 |
|||||
Amortization of intangibles |
(46,226) |
(51,239) |
(47,513) |
(143,898) |
(163,493) |
|||||
Unallocated expenses |
(16,554) |
(21,429) |
(15,338) |
(42,426) |
(94,964) |
|||||
Total operating income |
$136,241 |
$117,061 |
$130,106 |
$383,939 |
$398,141 |
|||||
Entegris, Inc. and Subsidiaries Reconciliation of GAAP Gross Profit to Adjusted Gross Profit (In thousands) |
||||||||||
|
Three months ended |
Nine months ended |
||||||||
|
Sep 28, 2024 |
Sep 30, 2023 |
Jun 29, 2024 |
Sep 28, 2024 |
Sep 30, 2023 |
|||||
Net Sales |
$807,694 |
$888,239 |
$812,652 |
$2,391,371 |
$2,711,635 |
|||||
Gross profit-GAAP |
$371,825 |
$367,074 |
$375,819 |
$1,099,464 |
$1,152,925 |
|||||
Adjustments to gross profit: |
|
|
|
|
|
|||||
Restructuring costs 1 |
— |
789 |
— |
— |
8,166 |
|||||
Adjusted gross profit |
$371,825 |
$367,863 |
$375,819 |
$1,099,464 |
$1,161,091 |
|||||
|
|
|
|
|
|
|||||
Gross margin - as a % of net sales |
46.0% |
41.3% |
46.2% |
46.0% |
42.5% |
|||||
Adjusted gross margin - as a % of net sales |
46.0% |
41.4% |
46.2% |
46.0% |
42.8% |
|||||
1 Restructuring charges resulting from cost saving initiatives. |
||||||||||
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 |
Sep 28, 2024 |
Sep 30, 2023 |
Jun 29, 2024 |
Sep 28, 2024 |
Sep 30, 2023 |
|||||
MS segment profit |
$71,706 |
$56,955 |
$70,268 |
$209,098 |
$243,171 |
|||||
Restructuring costs 1 |
— |
519 |
— |
— |
7,627 |
|||||
Loss (gain) on sale of businesses and held-for-sale assets, net 2 |
— |
— |
537 |
(4,311) |
28,578 |
|||||
Goodwill impairment 3 |
— |
15,913 |
— |
— |
104,785 |
|||||
Gain on termination of alliance agreement 4 |
— |
— |
— |
— |
(154,754) |
|||||
Impairment on long-lived assets 5 |
— |
— |
— |
12,967 |
— |
|||||
MS adjusted segment profit |
$71,706 |
$73,387 |
$70,805 |
$217,754 |
$229,407 |
|||||
|
|
|
|
|
|
|||||
MC segment profit |
$96,704 |
$101,132 |
$93,709 |
$276,968 |
$297,790 |
|||||
Restructuring costs 1 |
— |
215 |
— |
— |
3,010 |
|||||
MC adjusted segment profit |
$96,704 |
$101,347 |
$93,709 |
$276,968 |
$300,800 |
|||||
|
|
|
|
|
|
|||||
AMH segment profit |
$30,611 |
$31,642 |
$28,980 |
$84,197 |
$115,637 |
|||||
Restructuring costs 1 |
— |
467 |
— |
— |
1,721 |
|||||
AMH adjusted segment profit |
$30,611 |
$32,109 |
$28,980 |
$84,197 |
$117,358 |
|||||
|
|
|
|
|
|
|||||
Unallocated general and administrative expenses |
$16,554 |
$21,429 |
$15,338 |
$42,426 |
$94,964 |
|||||
Less: unallocated deal and integration costs |
(426) |
(10,301) |
(724) |
(3,368) |
(48,717) |
|||||
Less: unallocated restructuring costs 1 |
— |
— |
— |
— |
(86) |
|||||
Less: unallocated acquired tax equalization asset reduction 6 |
(2,959) |
— |
— |
(2,959) |
— |
|||||
Adjusted unallocated general and administrative expenses |
$13,169 |
$11,128 |
$14,614 |
$36,099 |
$46,161 |
|||||
|
|
|
|
|
|
|||||
Total adjusted segment profit |
$199,021 |
$206,843 |
$193,494 |
$578,919 |
$647,565 |
|||||
Less: adjusted unallocated general and administrative expenses |
(13,169) |
(11,128) |
(14,614) |
(36,099) |
(46,161) |
|||||
Total adjusted operating income |
$185,852 |
$195,715 |
$178,880 |
$542,820 |
$601,404 |
|||||
1 Restructuring charges resulting from cost saving initiatives. |
||||||||||
2 Loss (gain) from the sale of certain businesses and held-for-sale assets, net. |
||||||||||
3 Non-cash impairment charges associated with goodwill. |
||||||||||
4 Gain on the termination of the alliance agreement with MacDermid Enthone. |
||||||||||
5 Impairment of long-lived assets. |
||||||||||
6 Represents an asset reduction of an acquired tax equalization asset from the CMC Materials acquisition. |
||||||||||
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 |
||||||||
|
Sep 28, 2024 |
Sep 30, 2023 |
Jun 29, 2024 |
Sep 28, 2024 |
Sep 30, 2023 |
|||||
Net sales |
$807,694 |
$888,239 |
$812,652 |
$2,391,371 |
$2,711,635 |
|||||
Net income |
$77,582 |
$33,212 |
$67,696 |
$190,544 |
$142,692 |
|||||
Net income - as a % of net sales |
9.6% |
3.7% |
8.3% |
8.0% |
5.3% |
|||||
Adjustments to net income: |
|
|
|
|
|
|||||
Equity in net loss of affiliates |
262 |
139 |
217 |
685 |
269 |
|||||
Income tax expense (benefit) |
8,190 |
(2,127) |
6,689 |
18,335 |
2,851 |
|||||
Interest expense, net |
50,419 |
75,594 |
52,527 |
157,325 |
239,020 |
|||||
Other (income) expense, net |
(212) |
10,243 |
2,977 |
17,050 |
13,309 |
|||||
GAAP - Operating income |
136,241 |
117,061 |
130,106 |
383,939 |
398,141 |
|||||
Operating margin - as a % of net sales |
16.9% |
13.2% |
16.0% |
16.1% |
14.7% |
|||||
Goodwill impairment 1 |
— |
15,913 |
— |
— |
104,785 |
|||||
Deal and transaction costs 2 |
— |
— |
— |
— |
3,001 |
|||||
Integration costs: |
|
|
|
|
|
|||||
Professional fees 3 |
287 |
6,756 |
147 |
2,574 |
32,068 |
|||||
Severance costs 4 |
139 |
(454) |
577 |
794 |
1,873 |
|||||
Retention costs 5 |
— |
45 |
— |
— |
1,687 |
|||||
Other costs 6 |
— |
3,953 |
— |
— |
10,087 |
|||||
Restructuring costs 7 |
— |
1,202 |
— |
— |
12,444 |
|||||
Acquired tax equalization asset reduction 8 |
2,959 |
— |
— |
2,959 |
— |
|||||
Loss (gain) on sale of businesses and held-for-sale assets, net 9 |
— |
— |
537 |
(4,311) |
28,579 |
|||||
Gain on termination of alliance agreement 10 |
— |
— |
— |
— |
(154,754) |
|||||
Impairment of long-lived assets 11 |
— |
— |
— |
12,967 |
— |
|||||
Amortization of intangible assets 12 |
46,226 |
51,239 |
47,513 |
143,898 |
163,493 |
|||||
Adjusted operating income |
185,852 |
195,715 |
178,880 |
542,820 |
601,404 |
|||||
Adjusted operating margin - as a % of net sales |
23.0% |
22.0% |
22.0% |
22.7% |
22.2% |
|||||
Depreciation |
47,098 |
39,631 |
47,407 |
139,848 |
130,125 |
|||||
Adjusted EBITDA |
$232,950 |
$235,346 |
$226,287 |
$682,668 |
$731,529 |
|||||
Adjusted EBITDA - as a % of net sales |
28.8% |
26.5% |
27.8% |
28.5% |
27.0% |
|||||
1 Non-cash impairment charges associated with goodwill. |
||||||||||
2 Deal and transaction costs associated with the CMC Materials acquisition and completed divestitures. |
||||||||||
3 Represents professional and vendor fees recorded in connection with services provided by consultants, accountants, lawyers and other third-party service providers to assist us in integrating CMC Materials into our operations. These fees arise outside of the ordinary course of our continuing operations. |
||||||||||
4 Represents severance charges related to the integration of the CMC Materials acquisition. |
||||||||||
5 Represents retention charges related directly to the CMC Materials acquisition and completed divestitures, and are not part of our normal, recurring cash operating expenses. |
||||||||||
6 Represents other employee related costs and other costs incurred relating to the CMC Materials acquisition and the completed divestitures. These costs arise outside of the ordinary course of our continuing operations. |
||||||||||
7 Restructuring charges resulting from cost saving initiatives. |
||||||||||
8 Represents an asset reduction of an acquired tax equalization asset from the CMC Materials acquisition. |
||||||||||
9 Loss (gain) from the sale of certain businesses and held-for-sale assets, net. |
||||||||||
10 Gain on the termination of the alliance agreement with MacDermid Enthone. |
||||||||||
11 Impairment of long-lived assets. |
||||||||||
12 Non-cash amortization expense associated with intangibles acquired in acquisitions. |
||||||||||
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 |
||||||||
|
Sep 28, 2024 |
Sep 30, 2023 |
Jun 29, 2024 |
Sep 28, 2024 |
Sep 30, 2023 |
|||||
GAAP net income |
$77,582 |
$33,212 |
$67,696 |
$190,544 |
$142,692 |
|||||
Adjustments to net income: |
|
|
|
|
|
|||||
Goodwill impairment 1 |
— |
15,913 |
— |
— |
104,785 |
|||||
Deal and transaction costs 2 |
— |
— |
— |
— |
3,001 |
|||||
Integration costs: |
|
|
|
|
|
|||||
Professional fees 3 |
287 |
6,756 |
147 |
2,574 |
32,068 |
|||||
Severance costs 4 |
139 |
(454) |
577 |
794 |
1,873 |
|||||
Retention costs 5 |
— |
45 |
— |
— |
1,687 |
|||||
Other costs 6 |
— |
3,953 |
— |
— |
10,087 |
|||||
Restructuring costs 7 |
— |
1,202 |
— |
— |
12,444 |
|||||
Acquired tax equalization asset reduction 8 |
2,959 |
— |
— |
2,959 |
— |
|||||
Loss on extinguishment of debt and modification 9 |
— |
4,532 |
796 |
12,347 |
12,893 |
|||||
Loss (gain) on sale of businesses and held-for-sale assets, net 10 |
— |
— |
537 |
(4,311) |
28,579 |
|||||
Gain on termination of alliance agreement 11 |
— |
— |
— |
— |
(154,754) |
|||||
Infineum termination fee, net 12 |
— |
— |
— |
— |
(10,877) |
|||||
Impairment of long-lived assets 13 |
— |
— |
— |
12,967 |
— |
|||||
Amortization of intangible assets 14 |
46,226 |
51,239 |
47,513 |
143,898 |
163,493 |
|||||
Tax effect of adjustments to net income and discrete tax items 15 |
(9,611) |
(12,810) |
(10,157) |
(33,309) |
(46,996) |
|||||
Non-GAAP net income |
$117,582 |
$103,588 |
$107,109 |
$328,463 |
$300,975 |
|||||
|
|
|
|
|
|
|||||
Diluted earnings per common share |
$0.51 |
$0.22 |
$0.45 |
$1.26 |
$0.95 |
|||||
Effect of adjustments to net income |
$0.26 |
$0.46 |
$0.26 |
$0.91 |
$1.05 |
|||||
Diluted non-GAAP earnings per common share |
$0.77 |
$0.68 |
$0.71 |
$2.16 |
$2.00 |
|||||
|
|
|
|
|
|
|||||
Diluted weighted averages shares outstanding |
151,924 |
151,229 |
151,819 |
151,820 |
150,816 |
|||||
Diluted non-GAAP weighted average shares outstanding |
151,924 |
151,229 |
151,819 |
151,820 |
150,816 |
|||||
1 Non-cash impairment charges associated with goodwill. |
||||||||||
2 Deal and transaction costs associated with the CMC Materials acquisition and completed divestitures. |
||||||||||
3 Represents professional and vendor fees recorded in connection with services provided by consultants, accountants, lawyers and other third-party service providers to assist us in integrating CMC Materials into our operations. These fees arise outside of the ordinary course of our continuing operations. |
||||||||||
4 Represents severance charges related to the integration of CMC Materials. |
||||||||||
5 Represents retention charges related directly to the CMC Materials acquisition and completed divestitures, and are not part of our normal, recurring cash operating expenses. |
||||||||||
6 Represents other employee-related costs and other costs incurred relating to the CMC Materials acquisition and completed divestitures. These costs arise outside of the ordinary course of our continuing operations. |
||||||||||
7 Restructuring charges resulting from cost saving initiatives. |
||||||||||
8 Represents an asset reduction of an acquired tax equalization asset from the CMC Materials acquisition. |
||||||||||
9 Non-recurring loss on extinguishment of debt and modification of our Credit Agreement. |
||||||||||
10 Loss (gain) from the sale of certain businesses and held-for-sale assets, net. |
||||||||||
11 Gain on the termination of the alliance agreement with MacDermid Enthone. |
||||||||||
12 Non-recurring gain from Infineum termination fee. |
||||||||||
13 Impairment of long-lived assets. |
||||||||||
14 Non-cash amortization expense associated with intangibles acquired in acquisitions. |
||||||||||
15 The tax effect of pre-tax adjustments to net income was calculated using the applicable marginal tax rate for each respective year. |
||||||||||
Entegris, Inc. and Subsidiaries Reconciliation of Reported Net Sales to Adjusted Net Sales (excluding divestitures) Non-GAAP (In thousands) (Unaudited) |
||||||||||
|
Three months ended |
Nine months ended |
||||||||
|
Sep 28, 2024 |
Sep 30, 2023 |
Jun 29, 2024 |
Sep 28, 2024 |
Sep 30, 2023 |
|||||
Net sales |
$807,694 |
$888,239 |
$812,652 |
$2,391,371 |
$2,711,635 |
|||||
Less: divestitures 1 |
— |
(132,250) |
— |
(33,907) |
(411,513) |
|||||
Adjusted Net sales (excluding divestitures) Non-GAAP |
$807,694 |
$755,989 |
$812,652 |
$2,357,464 |
$2,300,122 |
|||||
1 Adjusted for the impact of net sales from divestitures. |
||||||||||
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, 2024 |
|
Net sales |
$810 - $840 |
|
GAAP - Operating income |
$136 - $154 |
|
Operating margin - as a % of net sales |
16.8% - 18.4% |
|
Amortization of intangible assets |
46 |
|
Adjusted operating income |
$183 - $201 |
|
Adjusted operating margin - as a % of net sales |
22.5% - 23.9% |
|
Depreciation |
48 |
|
Adjusted EBITDA |
$231- $248 |
|
Adjusted EBITDA - as a % of net sales |
28.5% - 29.5% |
|
|
Fourth Quarter Outlook |
|
Reconciliation GAAP net income to non-GAAP net income |
December 31, 2024 |
|
GAAP net income |
$75 - $86 |
|
Adjustments to net income: |
|
|
Amortization of intangible assets |
46 |
|
Income tax effect |
(7) |
|
Non-GAAP net income |
$114 - $125 |
|
|
Fourth Quarter Outlook |
|
Reconciliation GAAP diluted earnings per share to non-GAAP diluted earnings per share |
December 31, 2024 |
|
Diluted earnings per common share |
$0.49 - $0.56 |
|
Adjustments to diluted earnings per common share: |
|
|
Amortization of intangible assets |
0.30 |
|
Income tax effect |
(0.04) |
|
Diluted non-GAAP earnings per common share |
$0.75 - $0.82 |
|
|
|
|
*As a result of displaying amounts in millions, rounding differences may exist in the tables. |
||
