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8-K - LIVE FILING - MKS INSTRUMENTS INChtm_54173.htm

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EXHIBIT 99.1

MKS Instruments Reports Q3 2016 Financial Results

Vacuum and Analysis Division Achieves
New Quarterly Record for Semiconductor Revenue

Andover, Mass., October 26, 2016 — MKS Instruments, Inc. (NASDAQ: MKSI), a global provider of technologies that enable advanced processes and improve productivity, today reported third quarter 2016 financial results.

Financial Highlights for the Third Quarter of 2016

Revenue of $381 million
GAAP net income of $32.5 million, or $0.60 per diluted share
Non-GAAP net earnings of $47.9 million, or $0.88 per diluted share

“We had a very strong third quarter driven by continued growth in our semiconductor business, which rose 15% sequentially on a pro-forma basis,” said Gerald Colella, Chief Executive Officer and President. Mr. Colella added, “Our results reflect the depth of our customer relationships and our increasing leverage to key technology inflections driving the semiconductor market, including the transition to smaller node sizes, 3D NAND, multi-patterning, and advanced packaging; moreover, many of these inflections are still in their early stages and provide opportunities for continued growth going forward.”

“We continue to execute on our strategy to delever and reduce our interest cost. During the third quarter, we made a $60 million voluntary pre-payment on our term-loan facility, bringing our total pre-payments to date to $110 million. These prepayments, combined with our debt repricing on June 9th, have reduced our annual Non-GAAP interest cost by $9 million or over 20% since we completed the Newport acquisition,” said Seth Bagshaw, Vice President and Chief Financial Officer.

Results for the Third Quarter of 2016

Sales of $381 million increased 6% from pro forma second quarter sales of $359 million. GAAP net income of $32.5 million included amortization of intangible assets of $12.5 million and aggregate acquisition and integration-related costs of $2.6 million associated with the acquisition of Newport Corporation, which closed on April 29, 2016. Non-GAAP net earnings were $47.9 million, or $0.88 per diluted share.

Quarterly Financial Results
(in millions, except per share data)

                 
 
 
    Q3 2016       Q2 2016  
 
               
GAAP Results
               
Net revenues
  $ 381     $ 326  
Gross margin
    44.2 %     41.7 %
Operating margin
    13.9 %     5.9 %
Net income
  $ 32.5     $ 9.2  
Diluted EPS
  $ 0.60     $ 0.17  
Non-GAAP Results
               
Gross margin
    45.5 %     44.8 %
Operating margin
    19.2 %     18.1 %
Net earnings
  $ 47.9     $ 38.7  
Diluted EPS
  $ 0.88     $ 0.72  

Additional Financial Information

The Company had $426 million in cash and short-term investments as of September 30, $668 million outstanding under its term loan, and during the quarter, paid a dividend of $9.1 million or $0.17 per diluted share.

Fourth Quarter Outlook

Based on current business levels, the Company expects that sales in the fourth quarter of 2016 may range from $370 to $410 million, and at these volumes, GAAP net income could range from $0.68 to $0.92 per diluted share and non-GAAP net earnings could range from $0.87 to $1.10 per diluted share.

Conference Call Details

A conference call with management will be held on Thursday, October 27, 2016 at 8:30 a.m. (Eastern Time). To participate in the conference call, please dial (877) 212-6076 for domestic callers and (707) 287-9331 for international callers, and an operator will connect you. Participants will need to provide the operator with the Conference ID of 89631196, which has been reserved for this call. A live and archived webcast of the call will be available on the Company’s website at www.mksinst.com.

About MKS Instruments

MKS Instruments, Inc. is a global provider of instruments, subsystems and process control solutions that measure, control, power, monitor, and analyze critical parameters of advanced manufacturing processes to improve process performance and productivity. Our products are derived from our core competencies in pressure measurement and control, flow measurement and control, gas and vapor delivery, gas composition analysis, residual gas analysis, leak detection, control and information technology, ozone generation and delivery, RF & DC power, reactive gas generation, vacuum technology, lasers, photonics, sub-micron positioning, vibration isolation, and optics. Our primary served markets include semiconductor capital equipment, general industrial, life sciences, and research. Additional information can be found at www.mksinst.com.

Use of Non-GAAP Financial Results

Non-GAAP amounts exclude amortization of acquired intangible assets, costs associated with completed and announced acquisitions, acquisition integration costs, sale of previously written down inventory, an inventory step-up adjustment related to an acquisition, restructuring charges, fees and expenses related to repricing of term loan, amortization of debt issuance costs, net proceeds from an insurance policy, the tax effect of a legal entity restructuring, other discrete tax benefits and charges, and the related tax effect of these adjustments. These non-GAAP measures are not in accordance with Accounting Principles Generally Accepted in the United States of America (GAAP). MKS’ management believes the presentation of these non-GAAP financial measures is useful to investors for comparing prior periods and analyzing ongoing business trends and operating results. Pro forma revenue amounts assume the acquisition of Newport had occurred as of the beginning of the second quarter of 2016.

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the future financial performance of MKS, our future business prospects, our future growth, and our expected synergies and cost savings from our recent acquisition of Newport Corporation. These statements are only predictions based on current assumptions and expectations. Actual events or results may differ materially from those in the forward-looking statements set forth herein. Among the important factors that could cause actual events to differ materially from those in the forward-looking statements are the conditions affecting the markets in which we operate, including the fluctuations in capital spending in the semiconductor industry, and other advanced manufacturing markets, fluctuations in net sales to our major customers, our ability to successfully integrate Newport’s operations and employees, unexpected costs, charges or expenses resulting from the Newport acquisition, the terms of the term loan financing, MKS’ ability to realize anticipated synergies and cost savings from the Newport acquisition, our ability to successfully grow our business, potential adverse reactions or changes to business relationships resulting from the Newport acquisition, potential fluctuations in quarterly results, the challenges, risks and costs involved with integrating the operations of any other acquired companies, dependence on new product development, rapid technological and market change, acquisition strategy, manufacturing and sourcing risks, volatility of stock price, international operations, financial risk management, and the other factors described in MKS’ most recent Quarterly Report on Form 10-Q filed with the SEC. MKS is under no obligation to, and expressly disclaims any obligation to, update or alter our forward-looking statements, whether as a result of new information, future events or otherwise after the date of this press release.

###

Company Contact: Seth H. Bagshaw
Vice President, Chief Financial Officer and Treasurer
Telephone: 978.645.5578

Investor Relations Contact: Monica Gould
The Blueshirt Group
Telephone: 212.871.3927
Email: monica@blueshirtgroup.com

1

MKS Instruments, Inc.

Unaudited Consolidated Statements of Operations
(In thousands, except per share data)

                         
    Three Months Ended
    September 30, 2016   September 30, 2015   June 30, 2016
Net revenues:
                       
Products
  $ 335,156     $ 179,441     $ 285,471  
Services
    45,504       29,891       40,390  
 
                       
Total net revenues
    380,660       209,332       325,861  
Cost of revenues:
                       
Products
    183,789       95,710       163,993  
Services
    28,486       19,393       25,955  
 
                       
Total cost of revenues
    212,275       115,103       189,948  
Gross profit
    168,385       94,229       135,913  
Research and development
    32,268       17,217       28,214  
Selling, general and administrative
    70,424       33,396       71,429  
Acquisition costs
    233             8,205  
Restructuring
          562       24  
Amortization of intangible assets
    12,452       1,691       8,855  
 
                       
Income from operations
    53,008       41,363       19,186  
Interest (expense) income, net
    (11,604 )     721       (7,944 )
Other income, net
    844             1,126  
 
                       
Income from operations before income taxes
    42,248       42,084       12,368  
Provision for income taxes
    9,699       12,315       3,158  
 
                       
Net income
  $ 32,549     $ 29,769     $ 9,210  
 
                       
Net income per share:
                       
Basic
  $ 0.61     $ 0.56     $ 0.17  
Diluted
  $ 0.60     $ 0.56     $ 0.17  
Cash dividends per common share
  $ 0.17     $ 0.17     $ 0.17  
Weighted average shares outstanding:
                       
Basic
    53,574       53,314       53,461  
Diluted
    54,315       53,568       53,806  
The following supplemental Non-GAAP earnings information is presented to aid in understanding MKS’ operating results:
                       
Net income
  $ 32,549     $ 29,769     $ 9,210  
Adjustments:
                       
Acquisition costs (Note 1)
    233             8,205  
Acquisition inventory step-up (Note 2)
    4,971             10,119  
Fees and expenses relating to repricing of term loan (Note 3)
                713  
Amortization of debt issuance costs (Note 4)
    2,838             1,629  
Integration costs (Note 5)
    2,408             11,850  
Restructuring (Note 6)
          562       24  
Net proceeds from an insurance policy (Note 7)
    (1,323 )            
Tax expense from legal entity restructuring (Note 8)
    1,532              
Amortization of intangible assets
    12,452       1,691       8,855  
Pro forma tax adjustments
    (7,790 )     (543 )     (11,896 )
 
                       
Non-GAAP net earnings (Note 9)
  $ 47,870     $ 31,479     $ 38,709  
 
                       
Non-GAAP net earnings per share (Note 9)
  $ 0.88     $ 0.59     $ 0.72  
 
                       
Weighted average shares outstanding
    54,315       53,568       53,806  
Income from operations
  $ 53,008     $ 41,363     $ 19,186  
Adjustments:
                       
Acquisition costs (Note 1)
    233             8,205  
Acquisition inventory step-up (Note 2)
    4,971             10,119  
Fees and expenses relating to repricing of term loan (Note 3)
                713  
Integration costs (Note 5)
    2,408             11,850  
Restructuring (Note 6)
          562       24  
Amortization of intangible assets
    12,452       1,691       8,855  
 
                       
Non-GAAP income from operations (Note 10)
  $ 73,072     $ 43,616     $ 58,952  
 
                       
Non-GAAP operating margin percentage (Note 10)
    19.2 %     20.8 %     18.1 %
 
                       
Gross profit
  $ 168,385     $ 94,229     $ 135,913  
Acquisition inventory step-up (Note 2)
    4,971             10,119  
 
                       
Non-GAAP gross profit (Note 11)
  $ 173,356     $ 94,229     $ 146,032  
 
                       
Non-GAAP gross profit percentage (Note 11)
    45.5 %     45.0 %     44.8 %
 
                       
Interest (expense) income, net
  $ (11,604 )   $ 721     $ (7,944 )
Amortization of debt issuance costs (Note 4)
    2,838             1,629  
 
                       
Non-GAAP interest (expense) income, net
  $ (8,766 )   $ 721     $ (6,315 )
 
                       

Note 1: We recorded $0.2 million and $8.2 million of acquisition costs during the three months ended September 30, 2016 and June 30, 2016, respectively, related to the Newport Corporation acquisition, which closed during the second quarter of 2016.

Note 2: We recorded $5.0 million and $10.1 million in cost of sales during the three months ended September 30, 2016 and June 30, 2016, respectively, related to the step-up of inventory to fair value as a result of the Newport Corporation acquisition. This was charged to cost of sales over inventory turns of three months.

Note 3: We recorded $0.7 million of fees and expenses during the three months ended June 30, 2016 related to the repricing of our Term Loan Credit Agreement.

Note 4: We recorded $2.8 million and $1.6 million of additional interest expense during the three months ended September 30, 2016 and June 30, 2016, respectively, related to the amortization of debt issuance costs affiliated with our Term Loan Credit Agreement and ABL Facility.

Note 5: We recorded $2.4 million and $11.9 million of integration costs during the three months ended September 30, 2016 and June 30, 2016, respectively, related to the Newport Corporation acquisition.

Note 6: The three months ended September 30, 2015, includes restructuring charges related to the outsourcing of an international manufacturing operation and the consolidation of certain other foreign manufacturing locations.

Note 7: We recorded net proceeds of $1.3 million from a company owned life insurance policy.

Note 8: We recorded a tax expense of $1.5 million related to a legal entity restructuring.

Note 9: The Non-GAAP net earnings and Non-GAAP net earnings per share amounts exclude acquisition costs, an inventory step-up adjustment related to the acquisition of Newport Corporation, fees and expenses related to the repricing of a term loan credit agreement, amortization of debt issuance costs, integration costs related to the acquisition of Newport Corporation, restructuring costs, net proceeds from an insurance policy, the tax effect of a legal entity restructuring, amortization of intangible assets and the related tax effect of these adjustments to reflect the expected full year effective tax rate in the related period.

Note 10: The Non-GAAP income from operations and Non-GAAP operating margin percentages exclude acquisition costs, an inventory step-up adjustment related to the acquisition of Newport Corporation, fees and expenses related to the repricing of a term loan credit agreement, integration costs related to the acquisition of Newport Corporation, restructuring costs, and amortization of intangible assets.

Note 11: The Non-GAAP gross profit amounts and Non-GAAP gross profit percentages exclude an inventory step-up adjustment related to an acquisition.

2

MKS Instruments, Inc.
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)

                 
    Nine Months Ended September 30,
    2016   2015
Net revenues:
               
Products
  $ 774,248     $ 553,818  
Services
    115,954       87,319  
 
               
Total net revenues
    890,202       641,137  
Cost of revenues:
               
Products
    433,134       294,211  
Services
    74,857       56,853  
 
               
Total cost of revenues
    507,991       351,064  
Gross profit
    382,211       290,073  
Research and development
    77,709       51,464  
Selling, general and administrative
    175,803       97,532  
Acquisition costs
    10,932       30  
Restructuring
    24       1,569  
Amortization of intangible assets
    22,990       5,071  
 
               
Income from operations
    94,753       134,407  
Interest (expense) income, net
    (18,668 )     2,015  
Other income, net
    2,336        
 
               
Income from operations before income taxes
    78,421       136,422  
Provision for income taxes
    19,099       39,647  
 
               
Net income
  $ 59,322     $ 96,775  
 
               
Net income per share:
               
Basic
  $ 1.11     $ 1.82  
Diluted
  $ 1.10     $ 1.81  
Cash dividends per common share
  $ 0.510     $ 0.505  
Weighted average shares outstanding:
               
Basic
    53,423       53,304  
Diluted
    53,895       53,562  
The following supplemental Non-GAAP earnings information is presented to aid in understanding MKS’ operating results:
               
Net income
  $ 59,322     $ 96,775  
Adjustments:
               
Acquisition costs (Note 1)
    10,932       30  
Acquisition inventory step-up (Note 2)
    15,090        
Fees and expenses relating to repricing of term loan (Note 3)
    713        
Amortization of debt issuance costs (Note 4)
    4,467        
Integration costs (Note 5)
    14,258        
Restructuring (Note 6)
    24       1,569  
Sale of previously written down inventory (Note 7)
          (2,098 )
Net proceeds from an insurance policy (Note 8)
    (1,323 )      
Tax expense from legal entity restructuring (Note 9)
    1,532        
Amortization of intangible assets
    22,990       5,071  
Pro forma tax adjustments
    (21,279 )     (1,241 )
 
               
Non-GAAP net earnings (Note 10)
  $ 106,726     $ 100,106  
 
               
Non-GAAP net earnings per share (Note 10)
  $ 1.98     $ 1.87  
 
               
Weighted average shares outstanding
    53,895       53,562  
Income from operations
  $ 94,753     $ 134,407  
Adjustments:
               
Acquisition costs (Note 1)
    10,932       30  
Acquisition inventory step-up (Note 2)
    15,090        
Fees and expenses relating to repricing of term loan (Note 3)
    713        
Integration costs (Note 5)
    14,258        
Restructuring (Note 6)
    24       1,569  
Sale of previously written down inventory (Note 7)
          (2,098 )
Amortization of intangible assets
    22,990       5,071  
 
               
Non-GAAP income from operations (Note 11)
  $ 158,760     $ 138,979  
 
               
Non-GAAP operating margin percentage (Note 11)
    17.8 %     21.7 %
 
               
Gross profit
  $ 382,211     $ 290,073  
Acquisition inventory step-up (Note 2)
    15,090        
Sale of previously written down inventory (Note 7)
          (2,098 )
 
               
Non-GAAP gross profit (Note 12)
  $ 397,301     $ 287,975  
 
               
Non-GAAP gross profit percentage (Note 12)
    44.6 %     44.9 %
 
               
Interest (expense) income, net
  $ (18,668 )   $ 2,015  
Amortization of debt issuance costs (Note 4)
    4,467        
 
               
Non-GAAP interest (expense) income, net
  $ (14,201 )   $ 2,015  
 
               

Note 1: We recorded $10.9 million of acquisition costs during the nine months ended September 30, 2016 related to the Newport Corporation acquisition, which closed during the second quarter of 2016. We recorded $0.03 million of acquisition costs during the nine months ended September 30, 2015 related to the Precisive LLC acquisition, which closed during the first quarter of 2015.

Note 2: We recorded $15.1 million in cost of sales during the nine months ended September 30, 2016 related to the step-up of inventory to fair value as a result of the Newport Corporation acquisition. This was charged to cost of sales over inventory turns of three months.

Note 3: We recorded $0.7 million of fees and expenses during the nine months ended September 30, 2016 related to the repricing of our Term Loan Credit Agreement.

Note 4: We recorded $4.5 million of amortization expense during the nine months ended September 30, 2016 related to the amortization of debt issuance costs affiliated with our Term Loan Credit Agreement and ABL Facility.

Note 5: We recorded $14.3 million of integration costs during the nine months ended September 30, 2016 related to the Newport Corporation acquisition.

Note 6: We recorded $1.6 million of restructuring costs during the nine months ended September 30, 2015 related to the outsourcing of an international manufacturing operation.

Note 7: Cost of sales for the nine months ended September 30, 2015, include the reversal of a special charge of $2.1 million for obsolete inventory, which was sold in the second quarter of 2015.

Note 8: We recorded net proceeds of $1.3 million from a company owned life insurance policy.

Note 9: We recorded a tax expense of $1.5 million related to a legal entity restructuring.

Note 10: The Non-GAAP net earnings and Non-GAAP net earnings per share amounts exclude acquisition costs, an inventory step-up adjustment related to the acquisition of Newport Corporation, fees and expenses related to the repricing of a term loan credit agreement, amortization of debt issuance costs, integration costs related to the acquisition of Newport Corporation, restructuring costs, the reversal of certain previously written off inventory items that were subsequently sold, net proceeds from an insurance policy, the tax effect of a legal entity restructuring, amortization of intangible assets and the related tax effect of these adjustments to reflect the expected full year effective tax rate in the related period.

Note 11: The Non-GAAP income from operations and Non-GAAP operating margin percentages exclude acquisition costs, an inventory step-up adjustment related to the acquisition of Newport Corporation, fees and expenses related to the repricing of a term loan credit agreement, integration costs related to the acquisition of Newport Corporation, restructuring costs, the reversal of certain previously written off inventory items that were subsequently sold and amortization of intangible assets.

Note 12: The Non-GAAP gross profit amounts and Non-GAAP gross profit percentages exclude an inventory step-up adjustment related to the acquisition of Newport Corporation and the reversal of certain previously written off inventory items that were subsequently sold.

3

MKS Instruments, Inc.
Reconciliation of GAAP Income Tax Rate to Non-GAAP Income Tax Rate
(In thousands)

                                                 
    Three Months Ended September 30, 2016   Three Months Ended June 30, 2016
         Provision            Provision    
    Income Before   (benefit) for   Effective   Income Before   (benefit) for   Effective
     Income Taxes     Income Taxes     Tax Rate     Income Taxes     Income Taxes     Tax Rate 
GAAP                
  $          42,248     $         9,699          23.0%        $         12,368     $         3,158          25.5%     
Adjustments:
                                               
Acquisition costs (Note 1)
    233                     8,205                
Acquisition inventory step-up (Note 2)
    4,971                     10,119                
Fees and expenses relating to
                        713                
repricing of term loan (Note 3)
                                               
Amortization of debt issuance costs
    2,838                     1,629                
(Note 4)
                                               
Integration costs (Note 5)
    2,408                     11,850                
Restructuring
                        24                
Net proceeds from an insurance policy
    (1,323 )                                  
(Note 7)
                                               
Tax expense from legal entity
          (1,532 )                            
restructuring (Note 8)
                                               
Amortization of intangible assets
    12,452                     8,855                
Tax effect of pro forma adjustments
          7,790                     11,708          
Adjustment to pro forma tax rate
                              188          
 
                                               
Non-GAAP
  $          63,827     $       15,957          25.0%        $        53,763     $         15,054          28.0%     
 
                                               
                         
    Three Months Ended September 30, 2015
         Provision    
    Income Before    (benefit) for   Effective
     Income Taxes     Income Taxes     Tax Rate 
GAAP
  $       42,084     $       12,315         29.3%    
Adjustments:
                       
Restructuring (Note 6)
    562                
Amortization of intangible assets
    1,691                
Tax effect of pro forma adjustments
          755          
Adjustment to pro forma tax rate
          (212 )        
 
                       
Non-GAAP
  $       44,337     $       12,858       29.0%    
 
                       
                                                 
    Nine Months Ended September 30, 2016   Nine Months Ended September 30, 2015
         Provision            Provision    
    Income Before   (benefit) for   Effective   Income Before   (benefit) for   Effective
     Income Taxes     Income Taxes     Tax Rate     Income Taxes     Income Taxes     Tax Rate 
GAAP                
  $          78,421     $         19,099          24.4%        $        136,422     $         39,647          29.1%     
Adjustments:
                                               
Acquisition costs (Note 1)
    10,932                     30                
Acquisition inventory step-up
    15,090                                    
(Note 2)
                                               
Fees and expenses relating to
    713                                    
repricing of term loan (Note 3)
                                               
Amortization of debt issuance
    4,467                                    
costs (Note 4)
                                               
Integration costs (Note 5)
    14,258                                    
Restructuring (Note 6)
    24                     1,569                
Net proceeds from an insurance
    (1,323 )                                  
policy (Note 7)
                                               
Tax expense from legal entity
          (1,532 )                            
restructuring (Note 8)
                                               
Amortization of intangible assets
    22,990                     5,071                
Sale of previously written down
                        (2,098 )              
inventory (Note 9)
                                               
Tax effect of pro forma adjustments
          21,001                     1,883          
Adjustment to pro forma tax rate
          278                     (642 )        
 
                                               
Non-GAAP
  $         145,572     $       38,846       26.7%        $       140,994     $         40,888          29.0%     
 
                                               

Note 1: We recorded $0.2 million and $10.9 million of acquisition costs during the three and nine months ended September 30, 2016, respectively, related to the Newport Corporation acquisition, which closed during the second quarter of 2016. We recorded $0.03 million of acquisition costs during the nine months ended September 30, 2015 related to the Precisive LLC acquisition, which closed during the first quarter of 2015.

Note 2: We recorded $5.0 million and $15.1 million of amortization expense, respectively, during the three and nine months ended September 30, 2016 related to the step-up of inventory to fair value as a result of the Newport Corporation acquisition.

Note 3: We recorded $0.7 million of fees and expenses during the three months ended June 30, 2016 and nine months ended September 30, 2016 related to the repricing of our Term Loan Credit Agreement.

Note 4: We recorded $2.8 million and $4.5 million of additional interest expense during the three and nine months ended September 30, 2016 and $1.6 million during the three months ended June 30, 2016, related to the amortization of debt issuance costs affiliated with our Term Loan Credit Agreement and ABL Facility.

Note 5: We recorded $2.4 million and $14.3 million of integration costs during the three and nine months ended September 30, 2016 and $11.9 million during the three months ended June 30, 2016 related to the Newport Corporation acquisition.

Note 6: We recorded $1.6 million of restructuring costs during the nine months ended September 30, 2015 related to the outsourcing of an international manufacturing operation.

Note 7: We recorded net proceeds of $1.3 million from a company owned life insurance policy.

Note 8: We recorded a tax expense of $1.5 million related to a legal entity restructuring.

Note 9: Cost of sales for the nine months ended September 30, 2015, include the reversal of a special charge of $2.1 million for obsolete inventory, which was sold in the second quarter of 2015.

MKS Instruments, Inc.
Reconciliation of Q4-16 Guidance — GAAP Net Income to Non-GAAP Net Earnings
(In thousands, except per share data)

                                 
    Three Months Ended December 31, 2016
    Low Guidance   High Guidance
    $ Amount   $ Per Share   $ Amount   $ Per Share
GAAP net income
  $ 36,800     $ 0.68     $ 50,000     $ 0.92  
Amortization
    12,300       0.23       12,300       0.23  
Debt issuance costs
    820       0.02       820       0.02  
Acquisition costs
    200       0.00       200       0.00  
Integration costs
    1,600       0.03       1,600       0.03  
Tax effect of adjustments (Note 1)
    (4,720 )     (0.09 )     (4,920 )     (0.09 )
 
                               
Non-GAAP net earnings
  $ 47,000     $ 0.87     $ 60,000     $ 1.10  
 
                               
Q4 - 16 forecasted shares
            54,300               54,300  

Note 1: The Non-GAAP adjustments are tax effected at the applicable statutory rates.

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MKS Instruments, Inc.
Unaudited Consolidated Balance Sheet
(In thousands)

                 
    September 30, 2016   December 31, 2015
ASSETS
               
Cash and cash equivalents
  $ 366,874     $ 227,574  
Restricted cash
    5,931        
Short-term investments
    53,104       430,663  
Trade accounts receivable, net
    243,853       101,883  
Inventories
    278,965       152,631  
Other current assets
    53,616       26,760  
 
               
Total current assets
    1,002,343       939,511  
Property, plant and equipment, net
    179,694       68,856  
Goodwill
    594,635       199,703  
Intangible assets, net
    419,811       44,027  
Long-term investments
    15,256        
Other assets
    29,926       21,250  
 
               
Total assets
  $ 2,241,665     $ 1,273,347  
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Short-term debt
  $ 11,528     $  
Accounts payable
    68,371       23,177  
Accrued compensation
    63,424       28,424  
Income taxes payable
    13,758       4,024  
Other current liabilities
    73,354       35,359  
 
               
Total current liabilities
    230,435       90,984  
Long-term debt, net
    639,068        
Non-current deferred taxes
    91,928       2,655  
Non-current accrued compensation
    44,739       13,395  
Other liabilities
    19,956       5,432  
 
               
Total liabilities
    1,026,126       112,466  
 
               
Stockholders’ equity:
               
Common stock
    113       113  
Additional paid-in capital
    770,444       744,725  
Retained earnings
    458,369       427,214  
Accumulated other comprehensive loss
    (13,387 )     (11,171 )
 
               
Total stockholders’ equity
    1,215,539       1,160,881  
 
               
Total liabilities and stockholders’ equity
  $ 2,241,665     $ 1,273,347  
 
               

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