ENTG
$59.63
Entegris
$1.24
2.12%
Earnings Details
1st Quarter March 2020
Tuesday, April 21, 2020 6:00:00 AM
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Summary

Entegris Guides In-line

Entegris (ENTG) reported 1st Quarter March 2020 earnings of $0.55 per share on revenue of $412.3 million. The consensus earnings estimate was $0.51 per share on revenue of $419.2 million. Revenue grew 5.4% on a year-over-year basis.

The company said it expects second quarter earnings of $0.45 to $0.51 per share on revenue of $410.0 million to $430.0 million. The current consensus earnings estimate is $0.51 per share on revenue of $414.1 million for the quarter ending June 30, 2020.

Entegris Inc is a developer, manufacturer and supplier of products and materials used in processing and manufacturing in the semiconductor and other technology industries.

Results
Reported Earnings
$0.55
Earnings Whisper
-
Consensus Estimate
$0.51
Reported Revenue
$412.3 Mil
Revenue Estimate
$419.2 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Entegris Reports Results for First Quarter of 2020

  • First-quarter revenue of $412.3 million, increased 5% from prior year
  • First-quarter GAAP diluted EPS of $0.45, increased 88%
  • First-quarter Non-GAAP diluted EPS of $0.55, increased 10%

BILLERICA, Mass.--(BUSINESS WIRE)--Entegris, Inc. (NASDAQ: ENTG), today reported its financial results for the Company’s first quarter ended March 28, 2020.

First-quarter sales were $412.3 million, an increase of 5% from the same quarter last year. GAAP first-quarter net income was $61.0 million, or $0.45 per diluted share, which included $16.2 million of amortization of intangible assets and $1.4 million in deal and transaction costs. Non-GAAP net income was $75.6 million and non-GAAP net income per diluted share was $0.55.

Bertrand Loy, president and chief executive officer, said: “During these unprecedented times, our first priority is to ensure the health and safety of our colleagues and families, while continuing to provide exceptional service to our customers. In light of the significant challenges from Covid-19, I’m pleased with our first quarter results. Despite major supply-chain shutdowns across many industries, our manufacturing operations were only modestly impacted by Covid-19, as a direct result of the extraordinary efforts of our Entegris teams and extended supply chain partners around the world.”

Mr. Loy added: “While the demand for our products will likely be impacted by the ongoing effects of Covid-19 on the global economy, we remain very optimistic about the long-term prospects of the industry and the criticality of our solutions. Our team has very effectively managed challenging times in the past and will take the necessary steps to align our business to market conditions as they evolve. Entegris is in a strong financial position and has sufficient liquidity to navigate through this environment.”

Quarterly Financial Results Summary
(in thousands, except percentages and per share data)

GAAP Results

March 28, 2020

March 30, 2019

December 31, 2019

Net sales

$412,327

$391,047

$426,998

Operating income

$80,744

$47,491

$84,085

Operating margin

19.6%

12.1%

19.7%

Net income

$61,006

$32,658

$57,438

Diluted earnings per share (EPS)

$0.45

$0.24

$0.42

Non-GAAP Results

Non-GAAP adjusted operating income

$99,638

$92,180

$104,647

Non-GAAP adjusted operating margin

24.2%

23.6%

24.5%

Non-GAAP net income

$75,571

$67,894

$74,582

Non-GAAP EPS

$0.55

$0.50

$0.55

Second-Quarter Outlook

For the second quarter ending June 27, 2020, the Company expects sales of $410 million to $430 million, net income of $50 million to $59 million and net income per diluted share between $0.37 and $0.43. On a non-GAAP basis, EPS is expected to range from $0.45 to $0.51 per diluted share, which reflects net income on a non-GAAP basis in the range of $61 million to $70 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, as well as safe and efficient delivery systems to support semiconductor and other advanced manufacturing processes.

Microcontamination Control (MC): MC solutions 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.

First-Quarter Results Conference Call Details

Entegris will hold a conference call to discuss its results for the first quarter on Tuesday, April 21, 2020, at 9:00 a.m. Eastern Time. Participants should dial 888-254-3590 or +1 323-994-2093, referencing confirmation code 3810279. 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 3810279.

The call can also be accessed live and on-demand from the Entegris website. Point your web browser 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 first quarter, which may be referred to during the call, will be posted on the investor relations section of www.entegris.com Tuesday morning before the call.

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, together with related measures thereof, and non-GAAP net income and non-GAAP EPS, 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 Net Income to Adjusted Operating Income and Adjusted EBITDA, GAAP Net Income and Earnings per Share to Non-GAAP Net Income and Earnings per Share, GAAP Gross Profit to Adjusted Gross Profit and GAAP Segment Profit to Adjusted Operating Income are included elsewhere in this release.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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; 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 effect of the Tax Cuts and Jobs Act on the Company’s capital allocation strategy; 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, 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; 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; 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, effect 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 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. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

 

Three months ended

 

March 28, 2020

March 30, 2019

December 31, 2019

Net sales

$

412,327

 

$

391,047

 

 

$

426,998

 

Cost of sales

226,849

 

213,654

 

 

229,362

 

Gross profit

185,478

 

177,393

 

 

197,636

 

Selling, general and administrative expenses

58,891

 

82,254

 

 

67,171

 

Engineering, research and development expenses

29,632

 

28,991

 

 

30,352

 

Amortization of intangible assets

16,211

 

18,657

 

 

16,028

 

Operating income

80,744

 

47,491

 

 

84,085

 

Interest expense, net

10,238

 

9,659

 

 

12,743

 

Other expense (income), net

878

 

(248

)

 

248

 

Income before income tax expense

69,628

 

38,080

 

 

71,094

 

Income tax expense

8,622

 

5,422

 

 

13,656

 

Net income

$

61,006

 

$

32,658

 

 

$

57,438

 

 

 

 

 

 

 

 

Basic net income per common share:

$

0.45

 

$

0.24

 

 

$

0.43

 

Diluted net income per common share:

$

0.45

 

$

0.24

 

 

$

0.42

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

Basic

134,745

 

135,299

 

 

134,778

 

Diluted

136,369

 

136,692

 

 

136,470

 

Entegris, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

March 28, 2020

 

December 31, 2019

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

335,077

 

 

$

351,911

 

Trade accounts and notes receivable, net

277,796

 

 

234,409

 

Inventories, net

300,694

 

 

287,098

 

Deferred tax charges and refundable income taxes

25,650

 

 

24,552

 

Other current assets

27,089

 

 

34,427

 

Total current assets

966,306

 

 

932,397

 

Property, plant and equipment, net

474,841

 

 

479,544

 

Other assets:

 

 

 

Right-of-use assets

50,058

 

 

50,160

 

Goodwill

726,234

 

 

695,044

 

Intangible assets, net

355,815

 

 

333,952

 

Deferred tax assets and other noncurrent tax assets

11,563

 

 

11,245

 

Other

13,748

 

 

13,744

 

Total assets

$

2,598,565

 

 

$

2,516,086

 

LIABILITIES AND EQUITY

 

 

Current liabilities

 

 

 

Long-term debt, current maturities

$

4,000

 

 

$

4,000

 

Accounts payable

81,561

 

 

84,207

 

Accrued liabilities

90,447

 

 

150,118

 

Income tax payable

25,982

 

 

26,108

 

Total current liabilities

201,990

 

 

264,433

 

Long-term debt, excluding current maturities

1,074,888

 

 

932,484

 

Long-term lease liability

43,549

 

 

43,827

 

Other liabilities

106,811

 

 

109,453

 

Shareholders’ equity

1,171,327

 

 

1,165,889

 

Total liabilities and equity

$

2,598,565

 

 

$

2,516,086

 

Entegris, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

Three months ended

 

March 28, 2020

March 30, 2019

Operating activities:

 

 

Net income

$

61,006

 

 

$

32,658

 

 

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

 

 

Depreciation

20,648

 

 

16,721

 

 

Amortization

16,211

 

 

18,657

 

 

Stock-based compensation expense

4,994

 

 

4,653

 

 

Other

5,563

 

 

5,694

 

 

Changes in operating assets and liabilities, net of effects of acquisitions:

 

 

Trade accounts and notes receivable

(43,995

)

 

(9,109

)

 

Inventories

(18,205

)

 

(2,131

)

 

Accounts payable and accrued liabilities

(38,020

)

 

(45,019

)

 

Income taxes payable, refundable income taxes and noncurrent taxes payable

(225

)

 

(42,873

)

 

Other

3,426

 

 

18,211

 

 

Net cash provided by (used in) operating activities

11,403

 

 

(2,538

)

 

Investing activities:

 

 

Acquisition of property and equipment

(22,585

)

 

(34,465

)

 

Acquisition of business, net of cash

(75,630

)

 

(49,789

)

 

Other

5

 

 

197

 

 

Net cash used in investing activities

(98,210

)

 

(84,057

)

 

Financing activities:

 

 

Proceeds from short-term borrowings and long-term debt

217,000

 

 

 

Payments on long-term debt

(75,000

)

 

(1,000

)

 

Dividend payments

(10,847

)

 

(9,470

)

 

Issuance of common stock

551

 

 

917

 

 

Taxes paid related to net share settlement of equity awards

(11,440

)

 

(7,727

)

 

Repurchase and retirement of common stock

(29,654

)

 

(35,321

)

 

Deferred acquisition payments

(16,125

)

 

 

Other

(2,890

)

 

(250

)

 

Net cash provided by (used in) financing activities

71,595

 

 

(52,851

)

 

Effect of exchange rate changes on cash and cash equivalents

(1,712

)

 

(256

)

 

(Decrease) in cash and cash equivalents

(16,924

)

 

(139,702

)

 

Cash and cash equivalents at beginning of period

351,911

 

 

482,062

 

 

Cash and cash equivalents at end of period

$

334,987

 

 

$

342,360

 

 

Entegris, Inc. and Subsidiaries

Segment Information

(In thousands)

(Unaudited)

 

 

Three months ended

Net sales

March 28, 2020

March 30, 2019

December 31, 2019

Specialty Chemicals and Engineered Materials

$

144,214

 

 

$

124,470

 

 

$

146,747

 

 

Microcontamination Control

159,261

 

 

157,706

 

 

169,794

 

 

Advanced Materials Handling

116,137

 

 

116,064

 

 

117,455

 

 

Inter-segment elimination

(7,285

)

 

(7,193

)

 

(6,998

)

 

Total net sales

$

412,327

 

 

$

391,047

 

 

$

426,998

 

 

 

Three months ended

Segment profit

March 28, 2020

March 30, 2019

December 31, 2019

Specialty Chemicals and Engineered Materials

$

32,670

 

$

24,431

 

$

32,822

 

Microcontamination Control

50,167

 

47,323

 

57,157

 

Advanced Materials Handling

20,632

 

22,367

 

20,686

 

Total segment profit

103,469

 

94,121

 

110,665

 

Amortization of intangibles

16,211

 

18,657

 

16,028

 

Unallocated expenses

6,514

 

27,973

 

10,552

 

Total operating income

$

80,744

 

$

47,491

 

$

84,085

 

Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Gross Profit to Adjusted Gross Profit

(In thousands)

(Unaudited)

 

 

Three months ended

 

March 28, 2020

March 30, 2019

December 31, 2019

Net sales

$

412,327

 

$

391,047

 

$

426,998

 

Gross profit-GAAP

$

185,478

 

$

177,393

 

$

197,636

 

Adjustments to gross profit:

 

 

 

Severance and restructuring costs

 

358

 

(12)

 

Charge for fair value mark-up of acquired inventory sold

361

 

2,155

 

211

 

Adjusted gross profit

$

185,839

 

$

179,906

 

$

197,835

 

 

 

 

 

Gross margin - as a % of net sales

45.0

%

45.4

%

46.3

%

Adjusted gross margin - as a % of net sales

45.1

%

46.0

%

46.3

%

Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Segment Profit to Adjusted Operating Income

(In thousands)

(Unaudited)

 

 

Three months ended

Segment profit-GAAP

March 28, 2020

March 30, 2019

December 31, 2019

Specialty Chemicals and Engineered Materials (SCEM)

$

32,670

 

$

24,431

 

$

32,822

 

Microcontamination Control (MC)

50,167

 

47,323

 

57,157

 

Advanced Materials Handling (AMH)

20,632

 

22,367

 

20,686

 

Total segment profit

103,469

 

94,121

 

110,665

 

Amortization of intangible assets

16,211

 

18,657

 

16,028

 

Unallocated expenses

6,514

 

27,973

 

10,552

 

Total operating income

$

80,744

 

$

47,491

 

$

84,085

 

 

Three months ended

Adjusted segment profit

March 28, 2020

March 30, 2019

December 31, 2019

SCEM segment profit

$

32,670

 

 

$

24,431

 

 

$

32,822

 

 

Severance and restructuring costs

174

 

 

519

 

 

184

 

 

Charge for fair value write-up of acquired inventory sold

235

 

 

120

 

 

(476

)

 

SCEM adjusted segment profit

$

33,079

 

 

$

25,070

 

 

$

32,530

 

 

 

 

 

 

MC segment profit

$

50,167

 

 

$

47,323

 

 

$

57,157

 

 

Severance and restructuring costs

190

 

 

724

 

 

195

 

 

Charge for fair value write-up of acquired inventory sold

126

 

 

2,035

 

 

687

 

 

MC adjusted segment profit

$

50,483

 

 

$

50,082

 

 

$

58,039

 

 

 

 

 

 

AMH segment profit

$

20,632

 

 

$

22,367

 

 

$

20,686

 

 

Severance and restructuring costs

135

 

 

578

 

 

(379

)

 

AMH adjusted segment profit

$

20,767

 

 

$

22,945

 

 

$

20,307

 

 

 

 

 

 

Unallocated general and administrative expenses

$

6,514

 

 

$

27,973

 

 

$

10,552

 

 

Unallocated deal and integration costs

(1,479

)

 

(22,056

)

 

(4,323

)

 

Unallocated severance and restructuring costs

(344

)

 

 

 

Adjusted unallocated general and administrative expenses

$

4,691

 

 

$

5,917

 

 

$

6,229

 

 

 

 

 

 

Total adjusted segment profit

$

104,329

 

 

$

98,097

 

 

$

110,876

 

 

Adjusted amortization of intangible assets

 

 

 

Adjusted unallocated expenses

4,691

 

 

5,917

 

 

6,229

 

 

Total adjusted operating income

$

99,638

 

 

$

92,180

 

 

$

104,647

 

 

Entegris, Inc. and Subsidiaries

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

(In thousands)

(Unaudited)

 

 

Three months ended

 

March 28, 2020

March 30, 2019

December 31, 2019

Net sales

$

412,327

 

$

391,047

 

 

$

426,998

 

Net income

$

61,006

 

$

32,658

 

 

$

57,438

 

Adjustments to net income:

 

 

 

Income tax expense

8,622

 

5,422

 

 

13,656

 

Interest expense, net

10,238

 

9,659

 

 

12,743

 

Other expense (income), net

878

 

(248

)

 

248

 

GAAP - Operating income

80,744

 

47,491

 

 

84,085

 

Charge for fair value write-up of acquired inventory sold

361

 

2,155

 

 

211

 

Deal and transaction costs

1,431

 

19,136

 

 

973

 

Integration costs

48

 

2,920

 

 

3,350

 

Severance and restructuring costs

843

 

1,821

 

 

 

Amortization of intangible assets

16,211

 

18,657

 

 

16,028

 

Adjusted operating income

99,638

 

92,180

 

 

104,647

 

Depreciation

20,648

 

16,721

 

 

20,352

 

Adjusted EBITDA

$

120,286

 

$

108,901

 

 

$

124,999

 

 

 

 

 

Net income - as a % of net sales

14.8

%

8.4

%

13.5

%

Adjusted operating margin

24.2

%

23.6

%

24.5

%

Adjusted EBITDA - as a % of net sales

29.2

%

27.8

%

29.3

%

Entegris, Inc. and Subsidiaries

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

(In thousands, except per share data)

(Unaudited)

 

 

Three months ended

 

March 28, 2020

March 30, 2019

December 31, 2019

GAAP net income

$

61,006

 

 

$

32,658

 

 

$

57,438

 

 

Adjustments to net income:

 

 

 

Charge for fair value write-up of inventory acquired

361

 

 

2,155

 

 

211

 

 

Deal and transaction costs

1,431

 

 

19,547

 

 

973

 

 

Integration costs

48

 

 

2,920

 

 

3,350

 

 

Severance and restructuring costs

843

 

 

1,821

 

 

 

Loss on debt extinguishment and modification

 

 

1,980

 

 

Amortization of intangible assets

16,211

 

 

18,657

 

 

16,028

 

 

Tax effect of adjustments to net income and discrete items1

(4,329

)

 

(9,864

)

 

(5,398

)

 

Non-GAAP net income

$

75,571

 

 

$

67,894

 

 

$

74,582

 

 

 

 

 

 

Diluted earnings per common share

$

0.45

 

 

$

0.24

 

 

$

0.42

 

 

Effect of adjustments to net income

$

0.11

 

 

$

0.26

 

 

$

0.13

 

 

Diluted non-GAAP earnings per common share

$

0.55

 

 

$

0.50

 

 

$

0.55

 

 

1The tax effect of pre-tax adjustments to net income was calculated using the applicable marginal tax rate during the respective years.

Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Outlook to Non-GAAP Outlook

(In millions, except per share data)

(Unaudited)

 

 

Second-Quarter Outlook

Reconciliation GAAP net income to non-GAAP net income

June 27, 2020

GAAP net income

$50 - $59

Adjustments to net income:

 

Restructuring and integration costs

2

Amortization of intangible assets

12

Income tax effect

(3)

Non-GAAP net income

$61 - $70

 

Second-Quarter Outlook

Reconciliation GAAP diluted earnings per share to non-GAAP diluted earnings per share

June 27, 2020

Diluted earnings per common share

$0.37 - $0.43

Adjustments to diluted earnings per common share:

 

Restructuring and integration costs

0.01

Amortization of intangible assets

0.09

Income tax effect

(0.02)

Diluted non-GAAP earnings per common share

$0.45 to $0.51

 

Bill Seymour
VP of Investor Relations
T + 1 952 556 1844
bill.seymour@entegris.com

Source: Entegris, Inc.