EX-99.1 2 entg2017q2ex991.htm EXHIBIT 99.1 Exhibit
      entegrislogoa06.jpg
 
 
PRESS RELEASE

Steven Cantor
VP of Corporate Relations
T + 978 436 6500
irelations@entegris.com

Exhibit 99.1
FOR RELEASE AT 6:00 AM EST

ENTEGRIS REPORTS STRONG SECOND-QUARTER RESULTS

•
Record second-quarter revenue of $329.0 million
•
GAAP net income of $40.0 million, or $0.28 per diluted share
•
Non-GAAP net income of $48.9 million, or $0.34 per diluted share
•
First-half 2017 revenue of $646.4 million grew 13.4 percent
•
First-half 2017 adjusted EBITDA reached $164.1 million, or 25.4 percent of revenue

BILLERICA, Mass., July 27, 2017 - Entegris, Inc. (NasdaqGS: ENTG), a leading specialty materials provider, today reported its financial results for the Company’s second quarter ended July 1, 2017.
Second-quarter sales were $329.0 million, an increase of 8.6% from the same quarter last year and a 3.7% increase sequentially. Second-quarter net income was $40.0 million, or $0.28 per diluted share, which included amortization of intangible assets of $11.0 million, as well as an asset impairment charge and severance expense of $3.6 million. Non-GAAP net income was $48.9 million, or $0.34 per diluted share.
For the first half of fiscal 2017, sales of $646.4 million increased 13.4% from the same period a year ago. First-half 2017 net income was $72.5 million, or $0.51 per share, which included amortization of intangible assets of $22.0 million, as well as an asset impairment charge and severance expense of $3.6 million. Non-GAAP net income for the first half of 2017 was $89.7 million, or $0.63 per diluted share.
Bertrand Loy, president and chief executive officer, said: “I am very pleased with Entegris’ performance thus far this year which puts us on a solid path to grow well in excess of our markets in 2017. Our growth in the second-quarter was driven by positive industry trends and reflected strong performance across our portfolio of solutions, as well as successful product introductions to support the ongoing ramp of advanced semiconductor manufacturing technologies such as 3D NAND. Our first-half sales grew 13% from the prior year, driven by strong growth in Asia, particularly in Korea."
Mr. Loy added: "The quality of our execution and financial performance in the second quarter demonstrates the strength of our business model and our operating leverage, as we generated strong cash flow from operations and achieved an adjusted EBITDA of $88.2 million, or 26.8% of sales."




- more -









_________________________________________________________________________
ENTEGRIS, INC.

129 Concord Road, Building 2

T + 1 978 436 6500
entegris.com

Billerica, MA 01821 USA
F + 1 978 436 6745



Quarterly Financial Results Summary
(in thousands, except per share data)
GAAP Results
Q2-2017
Q2-2016
Q1-2017
Net sales
$329,002
$303,052
$317,377
Operating income
$59,090
$46,400
$50,920
Operating margin
18.0
%
15.3
%
16.0
%
Net income
$39,991
$32,890
$32,514
Diluted earnings per share (EPS)
$0.28
$0.23
$0.23
Non-GAAP Results
Non-GAAP adjusted operating income
$73,826
$57,462
$61,865
Adjusted operating margin
22.4
%
19.0
%
19.5
%
Non-GAAP net income
$48,906
$40,290
$40,754
Non-GAAP EPS
$0.34
$0.28
$0.28
Third-Quarter Outlook
For the third quarter ending September 30, 2017, the Company expects sales of $325 million to $340 million, net income of $36 million to $43 million, and net income per diluted share between $0.25 and $0.30. On a non-GAAP basis, EPS is expected to range from $0.30 to $0.35 per diluted share, which reflects net income on a non-GAAP basis in the range of $43 million to $50 million, which is adjusted for expected amortization expense of approximately $11 million or $0.05 per share.
Segment Results
As of December 31, 2016, the Company changed its financial segment reporting to 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 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 and substrates for a broad set of applications in the semiconductor industry and other high-technology industries.
Second-Quarter Results Conference Call Details
Entegris will hold a conference call to discuss its results for the second quarter on Thursday, July 27, 2017, at 9:00 a.m. Eastern Time. Participants should dial 1-877-852-6583 or 1-719-325-2495, referencing confirmation code 1492733. Participants are asked to dial in 5 to 10 minutes prior to the start of the call. To access a telephonic replay of the call, please [Click Here]. The replay will be available starting at 12:00 p.m. ET on Thursday, July 27 until Saturday, September 9. 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.

Management’s slide presentation concerning the results for the second 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 13


ABOUT ENTEGRIS
Entegris is a leading specialty materials provider for the microelectronics industry and other high-tech industries. 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, Adjusted Gross Profit, Adjusted Segment Profit, 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 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 our competitors' operating results. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain items that may not be indicative of our recurring business operating results, such as amortization, depreciation and discrete cash charges that are infrequent in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing and understanding our results and performance and when planning, forecasting, and analyzing future periods. We believe 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 our institutional investors and the analyst community to help them analyze our business. The reconciliations of GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA, GAAP Gross Profit to Adjusted Gross Profit, GAAP Segment Profit to Adjusted Operating Income, and GAAP to Non-GAAP Earnings per Share are included elsewhere in this release.

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. The words “believe,” “expect,” “anticipate,” “intends,” “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 those about future period guidance; future sales, net income, net income per diluted share, non-GAAP EPS, non-GAAP net income, expenses and other financial metrics; our performance relative to our markets; market and technology trends; the development of new products and the success of their introductions; the Company's capital allocation strategy; our ability to execute on our strategies; and other matters. These forward-looking statements are based on current management expectations and assumptions only as of the date of this press release, are not guarantees of future performance and involve substantial risks and uncertainties that are difficult to predict and that could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. These risks and uncertainties include, but are not limited to, weakening of global and/or regional economic conditions, generally or specifically in the semiconductor industry, which could decrease the demand for our products and solutions; our ability to meet rapid demand shifts; our ability to continue technological innovation and introduce new products to meet our customers' rapidly changing requirements; our concentrated customer base; our ability to identify, effect and integrate acquisitions, joint ventures or other transactions; our ability to protect and enforce intellectual property rights; operational, political and legal risks of our international operations; our dependence on sole source and limited source suppliers; the increasing complexity of certain manufacturing processes; raw material shortages and price increases; changes in government regulations of the countries in which we operate; fluctuation of currency exchange rates; fluctuations in the market price of Entegris’ stock; the level of, and obligations associated with, our indebtedness; and other risk factors and additional information described in our filings with the Securities and Exchange Commission, including under the heading “Risks Factors" in Item 1A of our Annual Report on Form 10-K for the fiscal year

Entegris, Inc. | page 3 of 13


ended December 31, 2016, filed on February 17, 2017, and in our other periodic filings. 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. | page 4 of 13


Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
 
 
Three months ended
 
 
July 1, 2017
July 2, 2016
April 1, 2017
Net sales
$329,002
$303,052
$317,377
Cost of sales
178,699

163,847

177,781

 
Gross profit
150,303

139,205

139,596

Selling, general and administrative expenses
52,985

53,597

50,492

Engineering, research and development expenses
27,221

28,146

27,239

Amortization of intangible assets
11,007

11,062

10,945

 
Operating income
59,090

46,400

50,920

Interest expense, net
8,103

9,051

8,393

Other (income) expense, net
(46
)
(1,054
)
902

 
Income before income tax expense
51,033

38,403

41,625

Income tax expense
11,042

5,513

9,111

 
Net income
$39,991
$32,890
$32,514
 
 
 
 
 
 
 
 
Basic net income per common share:
$0.28
$0.23
$0.23
Diluted net income per common share:
$0.28
$0.23
$0.23
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
Basic
141,696

140,953

141,501

 
Diluted
143,508

141,723

143,315



Entegris, Inc. | page 5 of 13


Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
 
 
Six months ended
 
 
July 1, 2017
July 2, 2016
Net sales
$646,379
$570,076
Cost of sales
356,480

316,165

 
Gross profit
289,899

253,911

Selling, general and administrative expenses
103,477

101,553

Engineering, research and development expenses
54,460

54,048

Amortization of intangible assets
21,952

22,351

 
Operating income
110,010

75,959

Interest expense, net
16,496

18,200

Other expense (income), net
856

(1,729
)
 
Income before income tax expense
92,658

59,488

Income tax expense
20,153

10,386

 
Net income
$72,505
$49,102
 
 
 
 
 
 
Basic net income per common share:
$0.51
$0.35
Diluted net income per common share:
$0.51
$0.35
 
 
 
 
Weighted average shares outstanding:
 
 
 
Basic
141,599

140,867

 
Diluted
143,411

141,547



Entegris, Inc. | page 6 of 13


Entegris, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)

 
July 1, 2017
December 31, 2016
ASSETS
 
 
Cash and cash equivalents
$405,635
$406,389
Accounts receivable, net
171,113

165,675

Inventories
194,155

183,529

Deferred tax charges and refundable income taxes
16,716

20,140

Other current assets
21,374

24,398

      Total current assets
808,993

800,131

 
 
 
Property, plant and equipment, net
341,146

321,562

 
 
 
Goodwill
355,178

345,269

Intangible assets
206,182

217,548

Deferred tax assets
8,622

8,022

Other assets
7,322

7,000

      Total assets
$1,727,443
$1,699,532
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
Long-term debt, current maturities
$100,000
$100,000
Accounts payable
56,961

61,617

Accrued liabilities
75,275

83,530

Income tax payable
18,786

16,424

      Total current liabilities
251,022

261,571

 
 
 
Long-term debt, excluding current maturities
435,910

484,677

Other liabilities
58,242

54,066

Shareholders’ equity
982,269

899,218

      Total liabilities and shareholders’ equity
$1,727,443
$1,699,532


Entegris, Inc. | page 7 of 13


Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

 
Three months ended
Six months ended
 
July 1, 2017
July 2, 2016
July 1, 2017
July 2, 2016
Operating activities:
 
 
 
 
Net income
$39,991
$32,890
$72,505
$49,102
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation
14,411

13,825

28,388

27,525

Amortization
11,007

11,062

21,952

22,351

Stock-based compensation expense
4,039

3,505

7,909

6,366

Provision for deferred income taxes
(215
)
(720
)
3,207

(931
)
Other
6,497

4,408

10,130

9,204

Changes in operating assets and liabilities:
 
 
 
 
Trade accounts and notes receivable
4,514

(29,300
)
(3,032
)
(36,099
)
Inventories
(8,422
)
1,609

(13,837
)
(11,389
)
Accounts payable and accrued liabilities
10,177

23,065

(13,313
)
13,555

Income taxes payable and refundable income taxes
4,209

1,133

2,957

407

Other
(1,049
)
(278
)
1,725

(1,553
)
Net cash provided by operating activities
85,159

61,199

118,591

78,538

Investing activities:
 
 
 
 
Acquisition of business net of cash acquired
(20,000
)
—

(20,000
)
—

Acquisition of property and equipment
(20,302
)
(14,325
)
(42,492
)
(32,144
)
Other
25

837

211

(1,658
)
Net cash used in investing activities
(40,277
)
(13,488
)
(62,281
)
(33,802
)
Financing activities:
 
 
 
 
Payments on long-term debt
(25,000
)
(25,000
)
(50,000
)
(25,000
)
Issuance of common stock
1,864

2,380

2,905

2,380

Taxes paid related to net share settlement of equity awards
(664
)
(136
)
(5,239
)
(2,203
)
Other
(5,000
)
42

(9,270
)
(3,482
)
Net cash used in financing activities
(28,800
)
(22,714
)
(61,604
)
(28,305
)
Effect of exchange rate changes on cash
(1,606
)
4,343

4,540

7,487

Increase (decrease) in cash and cash equivalents
14,476

29,340

(754
)
23,918

Cash and cash equivalents at beginning of period
391,159

344,403

406,389

349,825

Cash and cash equivalents at end of period
$405,635
$373,743
$405,635
$373,743


Entegris, Inc. | page 8 of 13


Entegris, Inc. and Subsidiaries
Segment Information
(In thousands)
(Unaudited)

 
Three months ended
Six months ended
Net sales
July 1, 2017
July 2, 2016
April 1, 2017
July 1, 2017
July 2, 2016
Specialty Chemicals and Engineered Materials
$121,174
$111,782
$114,435
$235,609
$212,889
Microcontamination Control
104,407

91,584

100,055

204,462

169,203

Advanced Materials Handling
103,421

99,686

102,887

206,308

187,984

     Total net sales
$329,002
$303,052
$317,377
$646,379
$570,076

 
Three months ended
Six months ended
Segment profit
July 1, 2017
July 2, 2016
April 1, 2017
July 1, 2017
July 2, 2016
Specialty Chemicals and Engineered Materials
$34,174
$28,914
$28,140
$62,314
$51,330
Microcontamination Control
36,484

28,566

35,581

72,065

46,706

Advanced Materials Handling
19,573

22,519

18,276

37,849

41,430

Total segment profit
90,231

79,999

81,997

172,228

139,466

Amortization of intangibles
11,007

11,062

10,945

21,952

22,351

Unallocated expenses
20,134

22,537

20,132

40,266

41,156

    Total operating income
$59,090
$46,400
$50,920
$110,010
$75,959


Entegris, Inc. | page 9 of 13


Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Gross Profit to Adjusted Gross Profit
(In thousands)
(Unaudited)

 
Three months ended
Six months ended
 
July 1, 2017
July 2, 2016
April 1, 2017
July 1, 2017
July 2, 2016
Net sales
$329,002
$303,052
$317,377
$646,379
$570,076
Gross profit-GAAP
$150,303
$139,205
$139,596
$289,899
$253,911
Adjustments to gross profit:
 
 
 
 
 
Impairment of equipment
1,966

—

—

1,966
—

Adjusted gross profit
$152,269
$139,205
$139,596
$291,865
$253,911
 
 
 
 
 
 
Gross margin - as a % of net sales
45.7
%
45.9
%
44.0
%
44.8
%
44.5
%
Adjusted gross margin - as a % of net sales
46.3
%
45.9
%
44.0
%
45.2
%
44.5
%


Entegris, Inc. | page 10 of 13


Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Segment Profit to Adjusted Operating Income
(In thousands)
(Unaudited)

 
Three months ended
Six months ended
Segment profit-GAAP
July 1, 2017
July 2, 2016
April 1, 2017
July 1, 2017
July 2, 2016
Specialty Chemicals and Engineered Materials
$34,174
$28,914
$28,140
$62,314
$51,330
Microcontamination Control
36,484

28,566

35,581

72,065

46,706

Advanced Materials Handling
19,573

22,519

18,276

37,849

41,430

Total segment profit
90,231

79,999

81,997

172,228

139,466

Amortization of intangible assets
11,007

11,062

10,945

21,952

22,351

Unallocated expenses
20,134

22,537

20,132

40,266

41,156

    Total operating income
$59,090
$46,400
$50,920
$110,010
$75,959
 
 
 
 
 
 
Segment profit margin-GAAP
 
 
 
 
 
Specialty Chemicals and Engineered Materials
28.2
%
25.9
%
24.6
%
26.4
%
24.1
%
Microcontamination Control
34.9
%
31.2
%
35.6
%
35.2
%
27.6
%
Advanced Materials Handling
18.9
%
22.6
%
17.8
%
18.3
%
22.0
%

 
Three months ended
Six months ended
Adjusted segment profit
July 1, 2017
July 2, 2016
April 1, 2017
July 1, 2017
July 2, 2016
Specialty Chemicals and Engineered Materials
$34,174
$28,914
$28,140
$62,314
$51,330
Microcontamination Control 1
37,927

28,566

35,581

73,508

46,706

Advanced Materials Handling 2
21,859

22,519

18,276

40,135

41,430

Total adjusted segment profit
93,960

79,999

81,997

175,957

139,466

Amortization of intangible assets 3
—

—

—

—

—

Unallocated expenses
20,134

22,537

20,132

40,266

41,156

    Total adjusted operating income
$73,826
$57,462
$61,865
$135,691
$98,310
 
 
 
 
 
 
Adjusted segment profit margin
 
 
 
 
 
Specialty Chemicals and Engineered Materials
28.2
%
25.9
%
24.6
%
26.4
%
24.1
%
Microcontamination Control
36.3
%
31.2
%
35.6
%
36.0
%
27.6
%
Advanced Materials Handling
21.1
%
22.6
%
17.8
%
19.5
%
22.0
%

1 Adjusted segment profit for Microcontamination Control for the three and six months ended July 1, 2017 excludes charges for impairment of equipment and severance of $884 and $559, respectively.
2 Adjusted segment profit for Advanced Material Handling for the three and six months ended July 1, 2017 excludes charges for impairment of equipment of $2,286.
3 Adjusted amortization of intangible assets excludes amortization expense of $11,007, $11,062, and $10,945 for the three months ended July 1, 2017, July 2, 2016, and April 1, 2017, respectively and $21,952 and $22,351 for the six months ended July 1, 2017 and July 2, 2016, respectively.








Entegris, Inc. | page 11 of 13


Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA
(In thousands)
(Unaudited)

 
Three months ended
Six months ended
 
July 1, 2017
July 2, 2016
April 1, 2017
July 1, 2017
July 2, 2016
Net sales
$329,002
$303,052
$317,377
$646,379
$570,076
Net income
$39,991
$32,890
$32,514
$72,505
$49,102
Adjustments to net income:
 
 
 
 
 
Income tax expense
11,042
5,513
9,111
20,153
10,386
Interest expense, net
8,103
9,051
8,393
16,496
18,200
Other (income) expense, net
(46)
(1,054)
902
856
(1,729)
GAAP - Operating income
59,090
46,400
50,920
110,010
75,959
Severance
559
—

—

559
—

Impairment of equipment
3,170
—

—

3,170
—

Amortization of intangible assets
11,007
11,062
10,945
21,952
22,351
Adjusted operating income
73,826
57,462
61,865
135,691
98,310
Depreciation
14,411
13,825
13,977
28,388
27,525
Adjusted EBITDA
$88,237
$71,287
$75,842
$164,079
$125,835
 
 
 
 
 
 
Adjusted operating margin
22.4
%
19.0
%
19.5
%
21.0
%
17.2
%
Adjusted EBITDA - as a % of net sales
26.8
%
23.5
%
23.9
%
25.4
%
22.1
%


Entegris, Inc. | page 12 of 13


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
 
Six months ended
 
July 1, 2017
July 2, 2016
April 1, 2017
 
July 1, 2017
July 2, 2016
GAAP net income
$39,991
$32,890
$32,514
 
$72,505
$49,102
Adjustments to net income:
 
 
 
 
 
 
Severance
559

—

—

 
559

—

Impairment of equipment
3,170

—

—

 
3,170

—

Gain on sale of equity investment
—

(38
)
—

 
—

(156
)
Amortization of intangible assets
11,007

11,062

10,945

 
21,952

22,351

Tax effect of adjustments to net income and discrete items
(5,821
)
(3,624
)
(2,705
)
 
(8,526
)
(7,390
)
Non-GAAP net income
$48,906
$40,290
$40,754
 
$89,660
$63,907
 
 
 
 
 
 
 
Diluted earnings per common share
$0.28
$0.23
$0.23
 
$0.51
$0.35
Effect of adjustments to net income
$0.06
$0.05
$0.06
 
$0.12
$0.10
Diluted non-GAAP earnings per common share
$0.34
$0.28
$0.28
 
$0.63
$0.45




### END ###



Entegris, Inc. | page 13 of 13