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8-K - 8-K - ENTEGRIS INCd136893d8k.htm

Exhibit 99.1

Entegris Reports Fourth-Quarter and Full-Year Results;

$100 Million Share Repurchase Authorization Announced

 

    Quarterly revenue of $266.8 million

 

    GAAP net income of $17.6 million, or $0.12 per diluted share; Non-GAAP net income of $28.8 million, or $0.20 per diluted share

 

    Generated $52.2 million in Cash from Operations

BILLERICA, Mass., February 9, 2016 – Entegris, Inc. (NasdaqGS: ENTG), a leading provider of yield-enhancing materials and solutions for advanced manufacturing processes, today reported its financial results for the Company’s fourth quarter and fiscal year ended December 31, 2015.

The Company recorded fourth-quarter sales of $266.8 million. Fourth-quarter net income of $17.6 million, or $0.12 per diluted share, included amortization of intangible assets of $11.4 million and aggregated acquisition and integration-related costs of $ 5.6 million associated with the April 30, 2014 acquisition of ATMI, Inc. Non-GAAP net income was $ 28.8 million, or $0.20 per diluted share.

Fiscal 2015 sales were $1.1 billion and compared to sales of $962.1 million in fiscal 2014. Net income for fiscal 2015 was $80.3 million which included amortization of intangible assets of $47.3 million and aggregated acquisition and integration-related costs of $12.7 million associated with the acquisition of ATMI, Inc. Net income of $0.57 per diluted share compared to net income of $0.06 per diluted share a year earlier. On a non-GAAP basis, net income per diluted share in fiscal 2015 was $0.85 compared with net income per diluted share of $0.69 for the year earlier.

Bertrand Loy, president and chief executive officer, said: “The fourth quarter was a strong finish to a transformational year for Entegris. We are pleased with our fourth-quarter sales of $266.8 million, particularly in light of softening trends in the semiconductor industry. Non-GAAP earnings per share of $0.20 reflected a lower gross margin which was offset by a favorable tax rate. Gross margin was primarily impacted by lower manufacturing volumes as we aggressively drove a reduction of our inventory levels, as well as accelerated customer qualification activity related to the i2M ramp. The 8 percent reduction of inventories helped us generate near record cash from operations in the quarter.”

Mr. Loy added: “For the year, we grew our top line on a constant currency basis in excess of our markets, in spite of a difficult industry environment. We generated $121 million of cash from operations, and grew our Non-GAAP earnings per share by 23 percent to a record high. We are particularly pleased with these results in a year in which we completed an effective integration of ATMI, accelerated our new product development activity, and repaid $100 million of our debt.”


Quarterly Financial Results Summary

(in millions, except per share data)

 

GAAP Results    Q4-2015     Q4-2014     Q3-2015  
Net sales    $ 266,786      $ 271,633      $ 270,253   
Operating income      20,116        20,815        31,066   
Operating margin      7.5     7.7     11.5
Net income    $ 17,573      $ 9,312      $ 23,403   
Diluted earnings per share (EPS)    $ 0.12      $ 0.07      $ 0.17   
Non-GAAP adjusted operating income    $ 37,141      $ 42,056      $ 44,814   
Non-GAAP adjusted operating margin      13.9     15.5     16.6
Non-GAAP net income    $ 28,822      $ 23,818      $ 32,444   
Non-GAAP diluted EPS    $ 0.20      $ 0.17      $ 0.23   

First-Quarter Outlook

For the fiscal first quarter ending April 2, 2016 the Company expects sales of $250 million to $265 million, net income of $11 million to $16 million, and net income per diluted share between $0.08 to $0.12 per share. On a non-GAAP basis, EPS is expected to range from $0.13 to $0.17 per diluted share, which reflects net income on a non-GAAP basis in the range of $19 million to $24 million, which is adjusted for expected amortization expense of approximately $11.2 million or $0.05 per share.

Share BuyBack Authorization Announced

Entegris announced that the Company’s Board of Directors has authorized the repurchase of up to $100 million of its common stock. The purchases will occur in open market transactions from time to time depending on market conditions or in accordance with a repurchase plan under SEC Rule 10b5-1.

This authorization does not obligate the Company to repurchase any dollar amount or number of shares of common stock. This authorization is in effect until February 2017 and may be suspended or discontinued at any time.

Segment Results

The Company reports its results in two business segments: Critical Materials Handling (CMH) and Electronic Materials (EM). Summary results by segment are contained in this press release.

CMH provides a broad range of products that filter, handle, dispense, and protect critical materials used in the semiconductor manufacturing process and in other high-technology manufacturing. CMH’s products and subsystems include high-purity materials packaging, fluid-handling and dispensing systems, liquid filters, as well as microenvironments that protect critical substrates such as wafers during shipping and manufacturing. CMH also provides specialized graphite components and specialty coatings for use in high-temperature applications.


EM provides high-performance materials and specialty gas management solutions that enable high-yield, cost-effective semiconductor manufacturing. EM’s products consist of specialized chemistries and performance materials, gas microcontamination control solutions, and sub-atmospheric pressure gas delivery systems for the efficient handling of hazardous gases to semiconductor process equipment.

Fourth-Quarter Results Conference Call Details

Entegris will hold a conference call to discuss its results for the fourth quarter and fiscal year on Tuesday, February 9, 2016, at 10:00 a.m. Eastern Time. Participants should dial 785-424-1675 or toll-free 888-632-3384, referencing confirmation code 2412795. Participants are asked to dial in 5 to 10 minutes prior to the start of the call. A replay of the call will be available starting February 9, 2016 at 1:00 p.m. (ET) until Monday, March 17, 2016. The replay can be accessed by using passcode 2412795 after dialing 1-719-457-0820 or 1-888-203-1112. A live and on-demand webcast of the call can also be accessed from the investor relations section of Entegris’ website at www.entegris.com.

ABOUT ENTEGRIS

Entegris is a leading provider of yield-enhancing materials and solutions for advanced manufacturing processes in the semiconductor and other high-technology industries. On April 30, 2014, Entegris acquired Danbury, CT-based ATMI, Inc. Entegris is ISO 9001 certified and has manufacturing, customer service and/or research facilities in the United States, 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 and Adjusted Operating Income together with related measures thereof, and non-GAAP EPS, are considered “Non-GAAP financial measures” under the rules and regulations of the SEC. These financial measures are provided as a complement to financial measures provided in accordance with GAAP. We provide non-GAAP financial measures in order to better assess and measure operating performance. Management believes the non-GAAP measures better portray our baseline performance before certain gains, losses or other charges that may not be indicative of our business or future outlook. We believe these non-GAAP measures will aid investors’ overall understanding of our results by providing a higher degree of transparency for certain expenses and providing a level of disclosure that will help investors understand how we plan and measure our business. The reconciliations of GAAP to non-GAAP Statements of Operations, GAAP to Adjusted Operating Income and Adjusted EBITDA, and GAAP to Non-GAAP Earnings per Share are included elsewhere in this release.

In addition we have included pro forma segment net sales and segment profit for the Critical Materials Handling and Electronic Materials business segments for the twelve months ended December 31, 2014. Our pro forma presentation includes transactions (i) recorded by ATMI, Inc. prior to its merger with the Company and (ii) as if those business segments were configured during those prior periods to include the businesses included in those segments during the twelve


months ended December 31, 2014. We have provided this non-GAAP pro forma information to provide investors with comparative historical context for the performance of these business segments during the twelve months ended December 31, 2014. Footnotes to the Historical Non-GAAP Pro Forma Segment Information table provided elsewhere in this release reconcile this information to the corresponding GAAP information.

Forward-Looking Statements

Certain information contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current management expectations only as of the date of this press release, and involve substantial risks and uncertainties that could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. Statements that include such words as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “may,” “will,” “should” or the negative thereof and similar expressions as they relate to Entegris or our management are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. These risks include, but are not limited to, fluctuations in the market price of Entegris’ stock, Entegris’ future operating results, Entegris’ ability to successfully integrate the ATMI business and achieve anticipated synergies, other acquisition and investment opportunities available to Entegris, general business and market conditions and other factors. Additional information concerning these and other risk factors may be found in previous financial press releases issued by Entegris and Entegris’ periodic public filings with the Securities and Exchange Commission, including discussions appearing under the headings “Risks Relating to our Business and Industry,” “Additional Risks Related to Our Business,” “Risks Relating to Our Indebtedness,” “Manufacturing Risks,” “International Risks,” and “Risks Related to Owning Our Securities” in Item 1A of our Annual Report on Form 10–K for the fiscal year ended December 31, 2014, filed with the U.S Securities and Exchange Commission on February 26, 2015, the discussion appearing in Part II, Item 1A of our Quarterly Report on Form 10–Q for the fiscal period ended September 26, 2015, filed with the U.S Securities and Exchange Commission on October 29, 2015, as well as other matters and important factors disclosed previously and from time to time in the filings of Entegris with the U.S. Securities and Exchange Commission. Except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission, we undertake no obligation to update publicly any forward-looking statements contained herein.


Entegris, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

     Three months ended  
     December 31,
2015
    December 31,
2014
     September 26,
2015
 

Net sales

   $ 266,786      $ 271,633       $ 270,253   

Cost of sales

     157,488        153,713         153,943   
  

 

 

   

 

 

    

 

 

 

Gross profit

     109,298        117,920         116,310   

Selling, general and administrative expenses

     51,024        58,879         46,730   

Engineering, research and development expenses

     26,717        26,013         26,841   

Amortization of intangible assets

     11,441        12,213         11,673   
  

 

 

   

 

 

    

 

 

 

Operating income

     20,116        20,815         31,066   

Interest expense, net

     9,694        9,772         9,201   

Other (income) expense, net

     (3,889     1,088         (5,624
  

 

 

   

 

 

    

 

 

 

Income before income tax (benefit)

expense and equity in net loss of affiliates

     14,311        9,955         27,489   

Income tax (benefit) expense

     (4,731     440         4,018   

Equity in net loss of affiliates

     1,469        203         68   
  

 

 

   

 

 

    

 

 

 

Net income

   $ 17,573      $ 9,312       $ 23,403   
  

 

 

   

 

 

    

 

 

 

Basic net income per common share:

   $ 0.13      $ 0.07       $ 0.17   

Diluted net income per common share:

   $ 0.12      $ 0.07       $ 0.17   

Weighted average shares outstanding:

       

Basic

     140,567        139,601         140,555   

Diluted

     141,433        140,433         141,317   


Entegris, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

     Twelve months ended  
     December 31, 2015     December 31, 2014  

Net sales

   $ 1,081,121      $ 962,069   

Cost of sales

     610,890        585,386   
  

 

 

   

 

 

 

Gross profit

     470,231        376,683   

Selling, general and administrative expenses

     198,914        231,833   

Engineering, research and development expenses

     105,900        87,711   

Amortization of intangible assets

     47,349        37,067   

Contingent consideration fair value adjustment

     —          (1,282
  

 

 

   

 

 

 

Operating income

     118,068        21,354   

Interest expense, net

     38,238        32,019   

Other (income) expense, net

     (12,355     2,727   
  

 

 

   

 

 

 

Income (loss) before income tax expense

(benefit) and equity in net loss of affiliates

     92,185        (13,392

Income tax expense (benefit)

     10,202        (21,572

Equity in net loss of affiliates

     1,687        293   
  

 

 

   

 

 

 

Net income

   $ 80,296      $ 7,887   
  

 

 

   

 

 

 

Basic net income per common share:

   $ 0.57      $ 0.06   

Diluted net income per common share:

   $ 0.57      $ 0.06   

Weighted average shares outstanding:

    

Basic

     140,353        139,311   

Diluted

     141,121        140,062   


Entegris, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

     December 31, 2015      December 31, 2014  

ASSETS

     

Cash and cash equivalents

   $ 349,825       $ 389,699   

Short-term investments

     2,181         4,601   

Accounts receivable, net

     141,409         153,961   

Inventories

     173,176         163,125   

Deferred tax assets, deferred tax charges and refundable income taxes

     18,943         30,556   

Other current assets

     25,228         23,713   
  

 

 

    

 

 

 

Total current assets

     710,762         765,655   

Property, plant and equipment, net

     321,301         313,569   

Goodwill

     342,111         340,743   

Intangible assets

     258,942         308,554   

Deferred tax assets – non-current

     7,771         5,068   

Other assets

     17,053         28,502   
  

 

 

    

 

 

 

Total assets

   $ 1,657,940       $ 1,762,091   
  

 

 

    

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

     

Long-term debt, current maturities

   $ 50,000       $ 100,000   

Accounts payable

     36,916         57,417   

Accrued liabilities

     75,859         91,551   

Income tax payable and deferred tax liabilities

     12,775         13,552   
  

 

 

    

 

 

 

Total current liabilities

     175,550         262,520   

Long-term debt, excluding current maturities

     617,287         666,796   

Other liabilities

     62,220         84,334   

Shareholders’ equity

     802,883         748,441   
  

 

 

    

 

 

 

Total liabilities and shareholders’ equity

   $ 1,657,940       $ 1,762,091   
  

 

 

    

 

 

 


Entegris, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

     Three months ended     Twelve months ended  
     December 31,
2015
    December 31,
2014
    December 31,
2015
    December 31,
2014
 

Operating activities:

        

Net income

   $ 17,573      $ 9,312      $ 80,296      $ 7,887   

Adjustments to reconcile net income to net cash provided by operating activities:

        

Depreciation

     14,225        13,632        54,305        46,637   

Amortization

     11,441        12,213        47,349        37,067   

Stock-based compensation expense

     2,913        2,374        11,033        8,887   

Charge for fair value mark-up of acquired inventory sold

     —          —          —          48,586   

Provision for deferred income taxes

     (15,907     (15,934     (13,313     (44,716

Other

     (1,999     4,692        (14,101     11,728   

Changes in operating assets and liabilities:

        

Trade accounts and notes receivable

     43,232        16,454        5,212        (4,845

Inventories

     12,880        (3,530     (26,670     (11,608

Accounts payable and accrued liabilities

     (41,262     (13,581     (28,686     14,348   

Income taxes payable and refundable income taxes

     8,602        14,128        4,955        10,975   

Other

     520        (4,557     538        1,477   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

     52,218        35,203        120,918        126,423   
  

 

 

   

 

 

   

 

 

   

 

 

 

Investing activities:

        

Acquisition of property and equipment

     (16,281     (13,720     (71,977     (57,733

Acquisition of business, net of cash acquired

     —          —          —          (809,390

Proceeds from sale and maturities of investments

     5,581        2,582        7,692        13,778   

Other

     300        2,315        647        (6,950
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (10,400     (8,823     (63,638     (860,295
  

 

 

   

 

 

   

 

 

   

 

 

 

Financing activities:

        

Payments on long-term debt

     —          (26,150     (100,000     (88,650

Proceeds from long-term debt

     —          —          —          855,200   

Payments for debt issue costs

     —          —          —          (20,747

Issuance of common stock

     1,656        1,854        4,264        3,559   

Taxes paid related to net share settlement of equity awards

     (50     (189     (2,508     (2,479

Other

     4,792        2        5,457        765   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     6,398        (24,483     (92,787     747,648   
  

 

 

   

 

 

   

 

 

   

 

 

 

Effect of exchange rate changes on cash

     548        (2,691     (4,367     (8,503
  

 

 

   

 

 

   

 

 

   

 

 

 

Increase (decrease) in cash and cash equivalents

     48,764        (794     (39,874     5,273   

Cash and cash equivalents at beginning of year

     301,061        390,493        389,699        384,426   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of year

   $ 349,825      $ 389,699      $ 349,825      $ 389,699   
  

 

 

   

 

 

   

 

 

   

 

 

 


Entegris, Inc. and Subsidiaries

Segment Information

(In thousands)

(Unaudited)

 

     Three months ended      Twelve months ended  

Net sales

  

December 31,
2015

    

December 31,
2014

    

September 26,
2015

    

December 31,
2015

    

December 31,
2014

 

Critical Materials Handling

   $ 163,567       $ 166,207       $ 166,043       $ 671,331       $ 653,964   

Electronic Materials

     103,219         105,426         104,210         409,790         308,105   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total net sales

   $ 266,786       $ 271,633       $ 270,253       $ 1,081,121       $ 962,069   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

     Three months ended      Twelve months ended  

Segment profit

  

December 31,
2015

    

December 31,
2014

    

September 26,
2015

    

December 31,
2015

    

December 31,
2014

 

Critical Materials Handling

   $ 33,030       $ 31,264       $ 37,109       $ 155,212       $ 138,379   

Electronic Materials

     21,953         30,393         23,919         94,653         90,121   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total segment profit

     54,983         61,657         61,028         249,865         228,500   

Charge for fair value mark-up of acquired inventory

     —           —           —           —           48,586   

Amortization of intangibles

     11,441         12,213         11,673         47,349         37,067   

Contingent consideration fair value adjustment

     —           —           —           —           (1,282

Unallocated expenses

     23,426         28,629         18,289         84,448         122,775   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total operating income

   $ 20,116       $ 20,815       $ 31,066       $ 118,068       $ 21,354   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 


Entegris, Inc. and Subsidiaries

Historical Non-GAAP Pro Forma Segment Information

(In thousands)

(Unaudited)

 

     Twelve Months Ended  

Segment Net Sales (a)

  

December 31,
2014

As Reported

    

December 31,
2014

Pro Forma(1)

 

Critical Materials Handling

   $ 653,964       $ 667,154   

Electronic Materials

     308,105         409,180   
  

 

 

    

 

 

 

Total segment net sales

   $ 962,069       $ 1,076,334   
  

 

 

    

 

 

 

Segment profit (b)

             

Critical Materials Handling

   $ 138,379       $ 142,413   

Electronic Materials

     90,121         117,114   
  

 

 

    

 

 

 

Total segment profit

   $ 228,500       $ 259,527   
  

 

 

    

 

 

 

(1)The above pro forma results include the addition of ATMI, Inc.’s net sales and segment profit amounts recorded prior to the consummation of the merger with the Company on April 30, 2014 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 Consolidated Statements of Operations to better facilitate the assessment and measurement of the Company’s operating performance.

The above GAAP to Non-GAAP Pro Forma Segment Information is reconciled to the Company’s GAAP figures for the quarters ended December 31, 2014 in the following footnotes.

 

  (a) The above pro forma segment sales include amounts for the year ended December 31, 2014 representing the Company’s previously reported sales plus the sales of ATMI, Inc. reported prior to the consummation of the merger with the Company on April 30, 2014 as such sales are not included in the Company’s financial statements. CMH sales made by ATMI Inc. prior to the merger were $13.2 million for the year ended December 31, 2014. EM sales made by ATMI Inc. prior to the merger were $101.1 million for the year ended December 31, 2014.

 

  (b) The above pro forma segment profit figures include amounts for the year ended December 31, 2014 representing the Company’s previously reported segment profit figures plus the segment profit of ATMI, Inc. reported prior to the consummation of the merger with the Company on April 30, 2014, as such segment profits are not included in the Company’s financial statements. CMH profits made by ATMI Inc. prior to the merger were $4.0 million for the year ended December 31, 2014. EM profits made by ATMI Inc. prior to the merger were $27.0 million for the year ended December 31, 2014.

 


Entegris, Inc. and Subsidiaries

GAAP to Non-GAAP Reconciliation of Statement of Operations

(In thousands, except per share data)

(Unaudited)

 

     Three months ended
December 31, 2015
    Twelve months ended
December 31, 2015
 
     U.S.
GAAP
    Adjustments     Non-GAAP     U.S.
GAAP
    Adjustments     Non-
GAAP
 

Net sales

   $ 266,786      $ —        $ 266,786      $ 1,081,121      $ —        $ 1,081,121   

Cost of sales

     157,488        —          157,488        610,890        —          610,890   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     109,298        —          109,298        470,231        —          470,231   

Selling, general and administrative expenses (a)

     51,024        (5,584     45,440        198,914        (12,667     186,247   

Engineering, research and development expenses

     26,717        —          26,717        105,900        —          105,900   

Amortization of intangible assets (b)

     11,441        (11,441     —          47,349        (47,349     —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     20,116        (17,025     37,141        118,068        (60,016     178,084   

Interest expense, net

     9,694        —          9,694        38,238        —          38,238   

Other income, net (c)

     (3,889     3,414        (475     (12,355     2,847        (9,508
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax (benefit) expense and equity in net loss of affiliates

     14,311        (13,611     27,922        92,185        (57,169     149,354   

Income tax (benefit) expense (d)

     (4,731     3,760        (971     10,202        18,248        28,450   

Equity in net loss of affiliates (e)

     1,469        (1,398     71        1,687        (1,398     289   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 17,573      $ (11,249   $ 28,822      $ 80,296      $ 40,319      $ 120,615   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic income per common share:

   $ 0.13      $ 0.08      $ 0.21      $ 0.57      $ 0.29      $ 0.86   

Diluted income per common share:

   $ 0.12      $ 0.08      $ 0.20      $ 0.57      $ 0.29      $ 0.85   

Weighted average shares outstanding:

            

Basic

     140,567        140,567        140,567        140,353        140,353        140,353   

Diluted

     141,433        141,433        141,433        141,121        141,121        141,121   

The above GAAP to Non-GAAP Reconciliation of Statement of Operations is provided as a complement to and should be read in conjunction with the Condensed Consolidated Statements of Operations. The above GAAP to Non-GAAP Reconciliation of Statement of Operations is provided to better facilitate the assessment and measurement of the Company’s operating performance.

 

  a) Selling, general and administrative expense for the three and twelve months ended December 31, 2015 is adjusted for $5.6 million and $12.7 million, respectively, for integration costs related to the ATMI acquisition.

 

  b) Amortization expense for the three and twelve months ended December 31, 2015 is adjusted for $11.4 million and $47.3 million, respectively, for amortization expense related to the ATMI and prior acquisitions.

 

  c) Other income, net for the three and twelve months ended December 31, 2015 is adjusted for $2.0 million and $1.4 million, respectively, for net gain on impairment or sale of investments.

 

  d) Income tax (benefit) expense for the three and twelve months ended December 31, 2015 is adjusted for $3.8 million and $18.2 million, respectively, related to the adjustments noted above and items related to the ATMI acquisition and other matters.

 

  e) Equity in net loss of affiliates for the three and twelve months ended December 31, 2015 is adjusted for $1.4 million and $1.4 million, respectively, related to the impairment of an equity investment.


Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA

(In thousands)

(Unaudited)

 

     Three months ended     Twelve months ended  
    

December 31,
2015

   

December 31,
2014

   

September 26,
2015

   

December 31,
2015

   

December 31,
2014

 

Net sales

   $ 266,786      $ 271,633      $ 270,253      $ 1,081,121      $ 962,069   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 17,573      $ 9,312      $ 23,403      $ 80,296      $ 7,887   

Adjustments to net income:

          

Equity in net loss of affiliates

     1,469        203        68        1,687        293   

Income tax (benefit) expense

     (4,731     440        4,018        10,202        (21,572

Interest expense, net

     9,694        9,772        9,201        38,238        32,019   

Other (income) expense, net

     (3,889     1,088        (5,624     (12,355     2,727   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

GAAP – Operating income

     20,116        20,815        31,066        118,068        21,354   

Charge for fair value mark-up of acquired inventory sold

     —          —          —          —          48,586   

Transaction-related costs

     —          —          —          —          26,776   

Deal costs

     —          —          —          —          9,125   

Integration costs

     5,584        9,028        2,075        12,667        19,652   

Contingent consideration fair value adjustment

     —          —          —          —          (1,282

Amortization of intangible assets

     11,441        12,213        11,673        47,349        37,067   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted operating income

     37,141        42,056        44,814        178,084        161,278   

Depreciation

     14,225        13,632        13,356        54,305        46,637   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 51,366      $ 55,688      $ 58,170      $ 232,389      $ 207,915   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted operating margin

     13.9     15.5     16.6     16.5     16.8

Adjusted EBITDA – as a % of net sales

     19.3     20.5     21.5     21.5     21.6


Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Net Income to Non-GAAP Earnings per Share

(In thousands, except per share data)

(Unaudited)

 

     Three months ended     Twelve months ended  
    

December 31,
2015

   

December 31,
2014

   

September 26,
2015

   

December 31,
2015

   

December 31,
2014

 

GAAP net income

   $ 17,573      $ 9,312      $ 23,403      $ 80,296      $ 7,887   

Adjustments to net income:

          

Charge for fair value mark-up

of acquired inventory sold

     —          —          —          —          48,586   

Transaction-related costs

     —          —          —          —          26,776   

Deal costs

     —          —          —          —          13,288   

Integration costs

     5,584        9,028        2,075        12,667        19,510   

Contingent consideration fair value adjustment

     —          —          —          —          (1,282

Net (gain) loss on impairment or sale of investments

     (2,016     1,710        (50     (1,449     1,710   

Amortization of intangible assets

     11,441        12,213        11,673        47,349        37,067   

Tax effect of adjustments to net income

     (3,760     (8,445     (4,657     (18,248     (56,819
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income

   $ 28,822      $ 23,818      $ 32,444      $ 120,615      $ 96,723   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per common share

   $ 0.12      $ 0.07      $ 0.17      $ 0.57      $ 0.06   

Effect of adjustments to net income

   $ 0.08      $ 0.10      $ 0.06      $ 0.29      $ 0.63   

Diluted non-GAAP earnings per common share

   $ 0.20      $ 0.17      $ 0.23      $ 0.85      $ 0.69   

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