Attached files
| file | filename |
|---|---|
| EX-99.2 - EX-99.2 - ENTEGRIS INC | entgq32020ex992.htm |
| 8-K - 8-K - ENTEGRIS INC | entg-20201022.htm |
 | PRESS RELEASE Bill Seymour VP of Investor Relations T + 1 952 556 1844 bill.seymour@entegris.com | |||||||||||||
Exhibit 99.1
FOR RELEASE AT 6:00 AM EDT
ENTEGRIS REPORTS RESULTS FOR THIRD QUARTER OF 2020
•Third-quarter revenue of $481.0 million, increased 22% from prior year
•Third-quarter GAAP diluted EPS of $0.58, increased 93%
•Third-quarter Non-GAAP diluted EPS of $0.67, increased 34%
BILLERICA, Mass., October 22, 2020 - Entegris, Inc. (NASDAQ: ENTG), today reported its financial results for the Company’s third quarter ended September 26, 2020.
Third-quarter sales were $481.0 million, an increase of 22% from the same quarter last year. GAAP third-quarter net income was $79.3 million, or $0.58 per diluted share, which included $11.7 million of amortization of intangible assets and $1.3 million of integration costs. Non-GAAP net income was $91.5 million and non-GAAP earnings per diluted share was $0.67.
Bertrand Loy, president and chief executive officer, said: “Our better than expected third quarter results showcased the strength of our value proposition, the resilience of our unit-driven business model and the execution of our teams. This performance was driven by the accelerated demand of our leading-edge solutions in advanced technology nodes. Another highlight of the quarter was our acquisition of GMTI, which provides high precision analytical instruments critical to the complex CMP process.”
Mr. Loy added: “At Entegris, we are benefiting from the two intersecting themes of growing importance of process materials and materials purity, and the impact they have on semiconductor performance, cost and reliability. Our position is bolstered by our technology leadership, global scale, and world class operational excellence. We are looking forward to a strong close to the year and expect to deliver record sales and non-GAAP EPS in 2020.”
Quarterly Financial Results Summary
(in thousands, except percentages and per share data)
| GAAP Results | September 26, 2020 | September 28, 2019 | June 27, 2020 | ||||||||
| Net sales | $480,987 | $394,147 | $448,405 | ||||||||
| Operating income | $106,761 | $52,793 | $94,712 | ||||||||
| Operating margin - as a % of net sales | 22.2 | % | 13.4% | 21.1% | |||||||
| Net income | $79,303 | $40,767 | $68,036 | ||||||||
| Diluted earnings per common share | $0.58 | $0.30 | $0.50 | ||||||||
| Non-GAAP Results | |||||||||||
| Non-GAAP adjusted operating income | $121,612 | $88,220 | $110,835 | ||||||||
| Non-GAAP adjusted operating margin - as a % of net sales | 25.3 | % | 22.4 | % | 24.7 | % | |||||
| Non-GAAP net income | $91,460 | $68,179 | $81,581 | ||||||||
| Diluted non-GAAP earnings per common share | $0.67 | $0.50 | $0.60 | ||||||||
Fourth-Quarter Outlook
For the fourth quarter ending December 31, 2020, the Company expects sales of $480 million to $495 million, net income of $75 million to $82 million and diluted earnings per common share between $0.55 and $0.60. On a non-GAAP basis, diluted earnings per common share is expected to range from $0.62 to $0.67, which reflects net income on a non-GAAP basis in the range of $84 million to $91 million.
Segment Results
The Company reports its results in the following segments:
Specialty Chemicals and Engineered Materials (SCEM): SCEM provides high-performance and high-purity process chemistries, gases and materials, and safe and efficient delivery systems to support semiconductor and other advanced manufacturing processes.
Microcontamination Control (MC): MC offers solutions to filter and purify critical liquid chemistries and gases used in semiconductor manufacturing processes and other high-technology industries.
Advanced Materials Handling (AMH): AMH develops solutions to monitor, protect, transport, and deliver critical liquid chemistries, wafers, and substrates for a broad set of applications in the semiconductor industry and other high-technology industries.
Entegris’ 2020 Investor and Analyst Day
Entegris will be hosting a virtual Investor and Analyst Day on November 17, 2020. If you have any questions or need any additional information please reach out to Bill Seymour, V.P. Investor Relations.
Third-Quarter Results Conference Call Details
Entegris will hold a conference call to discuss its results for the third quarter on Thursday, October 22, 2020, at 9:00 a.m. Eastern Time. Participants should dial 800-437-2398 or +1 323-289-6576, referencing confirmation code 2871729. Participants are asked to dial in 5 to 10 minutes prior to the start of the call. For a replay of the call, please Click Here using passcode 2871729.
The call can also be accessed live and on-demand from the Entegris website. Go to
http://investor.entegris.com/events.cfm and follow the link to the webcast. The on-demand playback will be available for six weeks after the conclusion of the teleconference.
Management’s slide presentation concerning the results for the third quarter, which may be referred to during the call, will be posted on the investor relations section of www.entegris.com Thursday morning before the call.
Entegris, Inc. - page 2 of 14
ABOUT ENTEGRIS
Entegris is a world-class supplier of advanced materials and process solutions for the semiconductor and other high-tech industries. Entegris is ISO 9001 certified and has manufacturing, customer service and/or research facilities in the United States, Canada, China, France, Germany, Israel, Japan, Malaysia, Singapore, South Korea and Taiwan. Additional information can be found at www.entegris.com.
Non-GAAP Information
The Company’s condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (GAAP). Adjusted EBITDA, Adjusted Gross Profit, Adjusted Segment Profit, and 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 uses these non-GAAP financial measures for financial and operational decision-making, as a means to evaluate period-to-period comparisons, as well as comparisons to the Company’s competitors' operating results. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding the Company’s performance and liquidity by excluding certain items that may not be indicative of the Company’s recurring business operating results, such as amortization, depreciation and discrete cash charges that may vary significantly from period to period. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing and understanding the Company’s results and performance and when planning, forecasting, and analyzing future periods. The Company believes these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by the Company’s institutional investors and the analyst community to help them analyze the Company’s business. The reconciliations of GAAP Gross Profit to Adjusted Gross Profit, GAAP Segment Profit to Adjusted Operating Income, GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA, GAAP Net Income and Diluted Earnings per Common Share to Non-GAAP Net Income and Diluted Non-GAAP Earnings per Common Share and GAAP Outlook to Non-GAAP Outlook are included elsewhere in this release.
Forward-Looking Statements
This press 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 include statements related to future period guidance; future sales, net income, net income per diluted share, non-GAAP EPS, non-GAAP net income, expenses and other financial metrics; the Company’s performance relative to its markets, including the drivers of such performance; the impact, financial or otherwise, of any organizational changes; market and technology trends, including the expected impact of the Covid-19 pandemic; the development of new products and the success of their introductions; the Company's capital allocation strategy, which may be modified at any time for any reason, including share repurchases, dividends, debt repayments and potential acquisitions; the impact of the acquisitions the Company has made and commercial partnerships the Company has established; the Company’s ability to execute on its strategies; and other matters. These statements involve risks and uncertainties, and actual results may differ materially from those projected in the forward-looking statements. These risks and uncertainties include, but are not limited to, risks related to the Covid-19 pandemic on the global economy and financial markets, as well as on the Company, our customers and suppliers, which may impact our sales, gross margin, customer demand and our ability to supply our products to our customers; weakening of global and/or regional economic conditions, generally or specifically in the semiconductor industry, which could decrease the demand for the Company’s products and solutions; the Company’s ability to meet rapid demand shifts; the Company’s ability to continue technological innovation and introduce new products to meet customers' rapidly changing requirements; the Company’s concentrated customer base; the Company’s ability to identify, complete and integrate acquisitions, joint ventures or other transactions; the Company’s ability to effectively implement any organizational changes; the Company’s ability to protect and enforce intellectual property rights; operational, political and legal risks of the Company’s international operations; the Company’s dependence on sole source and limited source suppliers; the increasing complexity of certain manufacturing processes; raw material shortages, supply constraints and price increases; changes in government regulations of the countries in which the Company operates; fluctuation of currency exchange rates; fluctuations in the market price of the Company’s stock; the level of, and obligations associated with, the Company’s indebtedness; and other risk factors and additional information described in the Company’s
Entegris, Inc. - page 3 of 14
filings with the Securities and Exchange Commission, including under the heading “Risks Factors" in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed on February 7, 2020, and in the Company’s other periodic filings. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.
Entegris, Inc. - page 4 of 14
Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
| Three months ended | ||||||||||||||
| September 26, 2020 | September 28, 2019 | June 27, 2020 | ||||||||||||
| Net sales | $480,987 | $394,147 | $448,405 | |||||||||||
| Cost of sales | 254,987 | 223,797 | 241,033 | |||||||||||
| Gross profit | 226,000 | 170,350 | 207,372 | |||||||||||
| Selling, general and administrative expenses | 71,195 | 71,232 | 66,872 | |||||||||||
| Engineering, research and development expenses | 36,295 | 31,173 | 32,572 | |||||||||||
| Amortization of intangible assets | 11,749 | 15,152 | 13,216 | |||||||||||
| Operating income | 106,761 | 52,793 | 94,712 | |||||||||||
| Interest expense, net | 12,651 | 10,216 | 12,792 | |||||||||||
| Other (income) expense, net | (1,752) | 934 | (477) | |||||||||||
| Income before income tax expense | 95,862 | 41,643 | 82,397 | |||||||||||
| Income tax expense | 16,559 | 876 | 14,361 | |||||||||||
| Net income | $79,303 | $40,767 | $68,036 | |||||||||||
| Basic earnings per common share: | $0.59 | $0.30 | $0.51 | |||||||||||
| Diluted earnings per common share: | $0.58 | $0.30 | $0.50 | |||||||||||
| Weighted average shares outstanding: | ||||||||||||||
| Basic | 134,957 | 135,092 | 134,700 | |||||||||||
| Diluted | 136,252 | 136,530 | 136,007 | |||||||||||
Entegris, Inc. - page 5 of 14
Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
| Nine months ended | |||||||||||
| September 26, 2020 | September 28, 2019 | ||||||||||
| Net sales | $1,341,719 | $1,164,068 | |||||||||
| Cost of sales | 722,869 | 650,051 | |||||||||
| Gross profit | 618,850 | 514,017 | |||||||||
| Selling, general and administrative expenses | 196,958 | 217,636 | |||||||||
| Engineering, research and development expenses | 98,499 | 90,788 | |||||||||
| Amortization of intangible assets | 41,176 | 50,400 | |||||||||
| Operating income | 282,217 | 155,193 | |||||||||
| Interest expense, net | 35,681 | 29,567 | |||||||||
| Other (income), net | (1,351) | (121,329) | |||||||||
| Income before income tax expense | 247,887 | 246,955 | |||||||||
| Income tax expense | 39,542 | 49,533 | |||||||||
| Net income | $208,345 | $197,422 | |||||||||
| Basic earnings per common share: | $1.55 | $1.46 | |||||||||
| Diluted earnings per common share: | $1.53 | $1.45 | |||||||||
| Weighted average shares outstanding: | |||||||||||
| Basic | 134,801 | 135,256 | |||||||||
| Diluted | 136,209 | 136,601 | |||||||||
Entegris, Inc. - page 6 of 14
Entegris, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
| September 26, 2020 | December 31, 2019 | |||||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Current assets: | ||||||||||||||||||||
| Cash and cash equivalents | $447,972 | $351,911 | ||||||||||||||||||
| Trade accounts and notes receivable, net | 300,489 | 234,409 | ||||||||||||||||||
| Inventories, net | 329,741 | 287,098 | ||||||||||||||||||
| Deferred tax charges and refundable income taxes | 38,100 | 24,552 | ||||||||||||||||||
| Other current assets | 30,148 | 34,427 | ||||||||||||||||||
| Total current assets | 1,146,450 | 932,397 | ||||||||||||||||||
| Property, plant and equipment, net | 490,298 | 479,544 | ||||||||||||||||||
| Other assets: | ||||||||||||||||||||
| Right-of-use assets | 46,655 | 50,160 | ||||||||||||||||||
| Goodwill | 744,470 | 695,044 | ||||||||||||||||||
| Intangible assets, net | 349,066 | 333,952 | ||||||||||||||||||
| Deferred tax assets and other noncurrent tax assets | 12,179 | 11,245 | ||||||||||||||||||
| Other | 12,510 | 13,744 | ||||||||||||||||||
| Total assets | $2,801,628 | $2,516,086 | ||||||||||||||||||
| LIABILITIES AND EQUITY | ||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||
| Long-term debt, current maturities | $— | $4,000 | ||||||||||||||||||
| Accounts payable | 69,918 | 84,207 | ||||||||||||||||||
| Accrued liabilities | 151,849 | 150,118 | ||||||||||||||||||
| Income tax payable | 25,606 | 26,108 | ||||||||||||||||||
| Total current liabilities | 247,373 | 264,433 | ||||||||||||||||||
| Long-term debt, excluding current maturities | 1,085,380 | 932,484 | ||||||||||||||||||
| Long-term lease liability | 40,407 | 43,827 | ||||||||||||||||||
| Other liabilities | 126,167 | 109,453 | ||||||||||||||||||
| Shareholders’ equity | 1,302,301 | 1,165,889 | ||||||||||||||||||
| Total liabilities and equity | $2,801,628 | $2,516,086 | ||||||||||||||||||
Entegris, Inc. - page 7 of 14
Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Three months ended | Nine months ended | |||||||||||||
| September 26, 2020 | September 28, 2019 | September 26, 2020 | September 28, 2019 | |||||||||||
| Operating activities: | ||||||||||||||
| Net income | $79,303 | $40,767 | $208,345 | $197,422 | ||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
| Depreciation | 20,777 | 19,306 | 62,064 | 54,623 | ||||||||||
| Amortization | 11,749 | 15,152 | 41,176 | 50,400 | ||||||||||
| Stock-based compensation expense | 5,903 | 5,326 | 16,552 | 14,915 | ||||||||||
| Other | 20,210 | 5,988 | 33,105 | 12,128 | ||||||||||
| Changes in operating assets and liabilities, net of effects of acquisitions: | ||||||||||||||
| Trade accounts and notes receivable | (23,280) | (35,841) | (65,367) | (30,405) | ||||||||||
| Inventories | 1,084 | (9,398) | (54,278) | (5,689) | ||||||||||
| Accounts payable and accrued liabilities | 4,433 | 20,796 | 10,076 | (31,911) | ||||||||||
| Income taxes payable, refundable income taxes and noncurrent taxes payable | (16,407) | (35,965) | (11,995) | (20,574) | ||||||||||
| Other | (2,540) | (840) | 2,978 | 12,745 | ||||||||||
| Net cash provided by operating activities | 101,232 | 25,291 | 242,656 | 253,654 | ||||||||||
| Investing activities: | ||||||||||||||
| Acquisition of property and equipment | (32,687) | (26,322) | (79,560) | (86,423) | ||||||||||
| Acquisition of business, net of cash acquired | (35,500) | (217,106) | (111,145) | (266,373) | ||||||||||
| Other | 54 | 2,618 | 265 | 2,815 | ||||||||||
| Net cash used in investing activities | (68,133) | (240,810) | (190,440) | (349,981) | ||||||||||
| Financing activities: | ||||||||||||||
| Proceeds from short-term borrowings and long-term debt | — | — | 617,000 | — | ||||||||||
| Payments of short-term borrowings and long-term debt | (100,000) | — | (468,000) | (2,000) | ||||||||||
| Payments for dividends | (10,794) | (10,815) | (32,446) | (29,779) | ||||||||||
| Issuance of common stock | 3,150 | 3,434 | 4,899 | 4,351 | ||||||||||
| Taxes paid related to net share settlement of equity awards | (11,836) | (276) | (24,556) | (8,577) | ||||||||||
| Repurchase and retirement of common stock | — | (15,000) | (29,564) | (65,321) | ||||||||||
| Deferred acquisition payments | — | — | (16,125) | — | ||||||||||
| Other | (1) | (5) | (6,856) | (502) | ||||||||||
| Net cash (used in) provided by financing activities | (119,481) | (22,662) | 44,352 | (101,828) | ||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 1,687 | (453) | (507) | (1,159) | ||||||||||
| (Decrease) increase in cash and cash equivalents | (84,695) | (238,634) | 96,061 | (199,314) | ||||||||||
| Cash and cash equivalents at beginning of period | 532,667 | 521,382 | 351,911 | 482,062 | ||||||||||
| Cash and cash equivalents at end of period | $447,972 | $282,748 | $447,972 | $282,748 | ||||||||||
Entegris, Inc. - page 8 of 14
Entegris, Inc. and Subsidiaries
Segment Information
(In thousands)
(Unaudited)
| Three months ended | Nine months ended | ||||||||||||||||
| Net sales | September 26, 2020 | September 28, 2019 | June 27, 2020 | September 26, 2020 | September 28, 2019 | ||||||||||||
| Specialty Chemicals and Engineered Materials | $150,480 | $127,750 | $146,213 | $440,907 | $379,772 | ||||||||||||
| Microcontamination Control | 193,541 | 155,979 | 183,758 | 536,560 | 463,870 | ||||||||||||
| Advanced Materials Handling | 144,370 | 117,256 | 126,434 | 386,941 | 340,835 | ||||||||||||
| Inter-segment elimination | (7,404) | (6,838) | (8,000) | (22,689) | (20,409) | ||||||||||||
| Total net sales | $480,987 | $394,147 | $448,405 | $1,341,719 | $1,164,068 | ||||||||||||
| Three months ended | Nine months ended | ||||||||||||||||
| Segment profit | September 26, 2020 | September 28, 2019 | June 27, 2020 | September 26, 2020 | September 28, 2019 | ||||||||||||
| Specialty Chemicals and Engineered Materials | $32,600 | $17,074 | $32,938 | $98,208 | $65,505 | ||||||||||||
| Microcontamination Control | 64,915 | 46,792 | 62,137 | 177,219 | 137,241 | ||||||||||||
| Advanced Materials Handling | 33,266 | 17,077 | 22,809 | 76,707 | 54,487 | ||||||||||||
| Total segment profit | 130,781 | 80,943 | 117,884 | 352,134 | 257,233 | ||||||||||||
| Amortization of intangibles | 11,749 | 15,152 | 13,216 | 41,176 | 50,400 | ||||||||||||
| Unallocated expenses | 12,271 | 12,998 | 9,956 | 28,741 | 51,640 | ||||||||||||
| Total operating income | $106,761 | $52,793 | $94,712 | $282,217 | $155,193 | ||||||||||||
Entegris, Inc. - page 9 of 14
Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Gross Profit to Adjusted Gross Profit
(In thousands)
(Unaudited)
| Three months ended | Nine months ended | ||||||||||||||||
| September 26, 2020 | September 28, 2019 | June 27, 2020 | September 26, 2020 | September 28, 2019 | |||||||||||||
| Net sales | $480,987 | $394,147 | $448,405 | $1,341,719 | $1,164,068 | ||||||||||||
| Gross profit-GAAP | $226,000 | $170,350 | $207,372 | $618,850 | $514,017 | ||||||||||||
| Adjustments to gross profit: | |||||||||||||||||
| Integration costs | — | — | (1,557) | (1,557) | — | ||||||||||||
| Severance and restructuring costs | — | 990 | 465 | 465 | 1,348 | ||||||||||||
| Charge for fair value mark-up of acquired inventory sold | 229 | 4,483 | — | 590 | 7,333 | ||||||||||||
| Adjusted gross profit | $226,229 | $175,823 | $206,280 | $618,348 | $522,698 | ||||||||||||
| Gross margin - as a % of net sales | 47.0 | % | 43.2 | % | 46.2 | % | 46.1 | % | 44.2 | % | |||||||
| Adjusted gross margin - as a % of net sales | 47.0 | % | 44.6 | % | 46.0 | % | 46.1 | % | 44.9 | % | |||||||
Entegris, Inc. - page 10 of 14
Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Segment Profit to Adjusted Operating Income
(In thousands)
(Unaudited)
| Three months ended | Nine months ended | ||||||||||||||||
| Segment profit-GAAP | September 26, 2020 | September 28, 2019 | June 27, 2020 | September 26, 2020 | September 28, 2019 | ||||||||||||
| Specialty Chemicals and Engineered Materials (SCEM) | $32,600 | $17,074 | $32,938 | $98,208 | $65,505 | ||||||||||||
| Microcontamination Control (MC) | 64,915 | 46,792 | 62,137 | 177,219 | 137,241 | ||||||||||||
| Advanced Materials Handling (AMH) | 33,266 | 17,077 | 22,809 | 76,707 | 54,487 | ||||||||||||
| Total segment profit | 130,781 | 80,943 | 117,884 | 352,134 | 257,233 | ||||||||||||
| Amortization of intangible assets | 11,749 | 15,152 | 13,216 | 41,176 | 50,400 | ||||||||||||
| Unallocated expenses | 12,271 | 12,998 | 9,956 | 28,741 | 51,640 | ||||||||||||
| Total operating income | $106,761 | $52,793 | $94,712 | $282,217 | $155,193 | ||||||||||||
| Three months ended | Nine months ended | ||||||||||||||||
| Adjusted segment profit | September 26, 2020 | September 28, 2019 | June 27, 2020 | September 26, 2020 | September 28, 2019 | ||||||||||||
| SCEM segment profit | $32,600 | $17,074 | $32,938 | $98,208 | $65,505 | ||||||||||||
| Integration costs | — | — | (1,557) | (1,557) | — | ||||||||||||
| Severance and restructuring costs | 277 | 2,143 | 455 | 906 | 2,662 | ||||||||||||
| Charge for fair value write-up of acquired inventory sold | — | 4,483 | — | 235 | 5,298 | ||||||||||||
| SCEM adjusted segment profit | $32,877 | $23,700 | $31,836 | $97,792 | $73,465 | ||||||||||||
| MC segment profit | $64,915 | $46,792 | $62,137 | $177,219 | $137,241 | ||||||||||||
| Severance and restructuring costs | 301 | 2,977 | 494 | 985 | 3,701 | ||||||||||||
| Charge for fair value write-up of acquired inventory sold | — | — | — | 126 | 2,035 | ||||||||||||
| MC adjusted segment profit | $65,216 | $49,769 | $62,631 | $178,330 | $142,977 | ||||||||||||
| AMH segment profit | $33,266 | $17,077 | $22,809 | $76,707 | $54,487 | ||||||||||||
| Severance and restructuring costs | 213 | 3,135 | 814 | 1,162 | 3,713 | ||||||||||||
| Charge for fair value write-up of acquired inventory sold | 229 | — | — | 229 | — | ||||||||||||
| AMH adjusted segment profit | $33,708 | $20,212 | $23,623 | $78,098 | $58,200 | ||||||||||||
| Unallocated general and administrative expenses | $12,271 | $12,998 | $9,956 | $28,741 | $51,640 | ||||||||||||
| Unallocated deal and integration costs | (1,902) | (7,289) | (2,415) | (5,796) | (31,773) | ||||||||||||
| Unallocated severance and restructuring costs | (180) | (248) | (286) | (810) | (2,418) | ||||||||||||
| Adjusted unallocated general and administrative expenses | $10,189 | $5,461 | $7,255 | $22,135 | $17,449 | ||||||||||||
| Total adjusted segment profit | $131,801 | $93,681 | $118,090 | $354,220 | $274,642 | ||||||||||||
| Adjusted amortization of intangible assets | — | — | — | — | — | ||||||||||||
| Adjusted unallocated general and administrative expenses | 10,189 | 5,461 | 7,255 | 22,135 | 17,449 | ||||||||||||
| Total adjusted operating income | $121,612 | $88,220 | $110,835 | $332,085 | $257,193 | ||||||||||||
Entegris, Inc. - page 11 of 14
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 | ||||||||||||||||
| September 26, 2020 | September 28, 2019 | June 27, 2020 | September 26, 2020 | September 28, 2019 | |||||||||||||
| Net sales | $480,987 | $394,147 | $448,405 | $1,341,719 | $1,164,068 | ||||||||||||
| Net income | $79,303 | $40,767 | $68,036 | $208,345 | $197,422 | ||||||||||||
| Net income - as a % of net sales | 16.5 | % | 10.3 | % | 15.2 | % | 15.5 | % | 17.0 | % | |||||||
| Adjustments to net income: | |||||||||||||||||
| Income tax expense | 16,559 | 876 | 14,361 | 39,542 | 49,533 | ||||||||||||
| Interest expense, net | 12,651 | 10,216 | 12,792 | 35,681 | 29,567 | ||||||||||||
| Other (income) expense, net | (1,752) | 934 | (477) | (1,351) | (121,329) | ||||||||||||
| GAAP - Operating income | 106,761 | 52,793 | 94,712 | 282,217 | 155,193 | ||||||||||||
| Operating margin - as a % of net sales | 22.2 | % | 13.4 | % | 21.1 | % | 21.0 | % | 13.3 | % | |||||||
| Charge for fair value write-up of acquired inventory sold | 229 | 4,483 | — | 590 | 7,333 | ||||||||||||
| Deal and transaction costs | 642 | 4,891 | 503 | 2,576 | 25,191 | ||||||||||||
| Integration costs | 1,260 | 2,398 | 355 | 1,663 | 6,582 | ||||||||||||
| Severance and restructuring costs | 971 | 8,503 | 2,049 | 3,863 | 12,494 | ||||||||||||
| Amortization of intangible assets | 11,749 | 15,152 | 13,216 | 41,176 | 50,400 | ||||||||||||
| Adjusted operating income | 121,612 | 88,220 | 110,835 | 332,085 | 257,193 | ||||||||||||
| Adjusted operating margin - as a % of net sales | 25.3 | % | 22.4 | % | 24.7 | % | 24.8 | % | 22.1 | % | |||||||
| Depreciation | 20,777 | 19,306 | 20,639 | 62,064 | 54,623 | ||||||||||||
| Adjusted EBITDA | $142,389 | $107,526 | $131,474 | $394,149 | $311,816 | ||||||||||||
| Adjusted EBITDA - as a % of net sales | 29.6 | % | 27.3 | % | 29.3 | % | 29.4 | % | 26.8 | % | |||||||
Entegris, Inc. - page 12 of 14
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 | ||||||||||||||||
| September 26, 2020 | September 28, 2019 | June 27, 2020 | September 26, 2020 | September 28, 2019 | |||||||||||||
| GAAP net income | $79,303 | $40,767 | $68,036 | $208,345 | $197,422 | ||||||||||||
| Adjustments to net income: | |||||||||||||||||
| Charge for fair value write-up of inventory acquired | 229 | 4,483 | — | 590 | 7,333 | ||||||||||||
| Deal and transaction costs | 642 | 4,891 | 503 | 2,576 | 25,602 | ||||||||||||
| Integration costs | 1,260 | 2,398 | 355 | 1,663 | 6,582 | ||||||||||||
| Severance and restructuring costs | 971 | 8,503 | 2,049 | 3,863 | 12,494 | ||||||||||||
| Loss on debt extinguishment | 908 | — | 1,470 | 2,378 | — | ||||||||||||
| Versum termination fee, net | — | — | — | — | (122,000) | ||||||||||||
| Amortization of intangible assets | 11,749 | 15,152 | 13,216 | 41,176 | 50,400 | ||||||||||||
| Tax effect of legal entity restructuring | — | — | — | — | 9,398 | ||||||||||||
Tax effect of adjustments to net income and discrete items1 | (3,602) | (8,015) | (4,048) | (11,979) | 2,274 | ||||||||||||
| Non-GAAP net income | $91,460 | $68,179 | $81,581 | $248,612 | $189,505 | ||||||||||||
| Diluted earnings per common share | $0.58 | $0.30 | $0.50 | $1.53 | $1.45 | ||||||||||||
| Effect of adjustments to net income | $0.09 | $0.20 | $0.10 | $0.30 | $(0.06) | ||||||||||||
| Diluted non-GAAP earnings per common share | $0.67 | $0.50 | $0.60 | $1.83 | $1.39 | ||||||||||||
1The tax effect of pre-tax adjustments to net income was calculated using the applicable marginal tax rate during the respective years.
Entegris, Inc. - page 13 of 14
Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Outlook to Non-GAAP Outlook
(In millions, except per share data)
(Unaudited)
| Fourth-Quarter Outlook | |||||
| Reconciliation GAAP net income to non-GAAP net income | December 31, 2020 | ||||
| GAAP net income | $75 - $82 | ||||
| Adjustments to net income: | |||||
| Restructuring and integration costs | 1 | ||||
| Amortization of intangible assets | 12 | ||||
| Income tax effect | (4) | ||||
| Non-GAAP net income | $84 - $91 | ||||
| Fourth-Quarter Outlook | |||||
| Reconciliation GAAP diluted earnings per share to non-GAAP diluted earnings per share | December 31, 2020 | ||||
| Diluted earnings per common share | $0.55 - $0.60 | ||||
| Adjustments to diluted earnings per common share: | |||||
| Restructuring and integration costs | 0.01 | ||||
| Amortization of intangible assets | 0.08 | ||||
| Income tax effect | (0.02) | ||||
| Diluted non-GAAP earnings per common share | $0.62 to $0.67 | ||||
### END ###
Entegris, Inc. - page 14 of 14