EX-99.1 2 entgq12020ex991.htm EX-99.1 Document
entegrislogoq420191.gif
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 EST

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., April 21, 2020 - 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 ResultsMarch 28, 2020March 30, 2019December 31, 2019
Net sales$412,327$391,047$426,998
Operating income $80,744$47,491$84,085
Operating margin19.6 %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 margin24.2 %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.

Entegris, Inc. - page 2 of 13





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
Entegris, Inc. - page 3 of 13





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 13





Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three months ended
 March 28, 2020March 30, 2019December 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. - page 5 of 13





Entegris, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
March 28, 2020December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents $335,077  $351,911  
Trade accounts and notes receivable, net277,796  234,409  
Inventories, net300,694  287,098  
Deferred tax charges and refundable income taxes25,650  24,552  
Other current assets 27,089  34,427  
Total current assets966,306  932,397  
Property, plant and equipment, net474,841  479,544  
Other assets:
Right-of-use assets50,058  50,160  
Goodwill726,234  695,044  
Intangible assets, net355,815  333,952  
Deferred tax assets and other noncurrent tax assets11,563  11,245  
Other13,748  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 payable81,561  84,207  
Accrued liabilities90,447  150,118  
Income tax payable25,982  26,108  
Total current liabilities201,990  264,433  
Long-term debt, excluding current maturities 1,074,888  932,484  
Long-term lease liability43,549  43,827  
Other liabilities106,811  109,453  
Shareholders’ equity1,171,327  1,165,889  
   Total liabilities and equity$2,598,565  $2,516,086  

Entegris, Inc. - page 6 of 13





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

Three months ended
March 28, 2020March 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  
Amortization16,211  18,657  
Stock-based compensation expense4,994  4,653  
Other5,563  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) 
Other3,426  18,211  
Net cash provided by (used in) operating activities11,403  (2,538) 
Investing activities:
Acquisition of property and equipment(22,585) (34,465) 
Acquisition of business, net of cash(75,630) (49,789) 
Other5  197  
Net cash used in investing activities(98,210) (84,057) 
Financing activities:
Proceeds from short-term borrowings and long-term debt217,000  —  
Payments on long-term debt(75,000) (1,000) 
Dividend payments(10,847) (9,470) 
Issuance of common stock551  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 activities71,595  (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 period351,911  482,062  
Cash and cash equivalents at end of period$334,987  $342,360  

Entegris, Inc. - page 7 of 13





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

Three months ended
Net salesMarch 28, 2020March 30, 2019December 31, 2019
Specialty Chemicals and Engineered Materials$144,214  $124,470  $146,747  
Microcontamination Control159,261  157,706  169,794  
Advanced Materials Handling116,137  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 profitMarch 28, 2020March 30, 2019December 31, 2019
Specialty Chemicals and Engineered Materials$32,670  $24,431  $32,822  
Microcontamination Control50,167  47,323  57,157  
Advanced Materials Handling20,632  22,367  20,686  
Total segment profit 103,469  94,121  110,665  
Amortization of intangibles 16,211  18,657  16,028  
Unallocated expenses6,514  27,973  10,552  
Total operating income$80,744  $47,491  $84,085  


Entegris, Inc. - page 8 of 13





Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Gross Profit to Adjusted Gross Profit
(In thousands)
(Unaudited)
Three months ended
March 28, 2020March 30, 2019December 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 sold361  2,155  211  
Adjusted gross profit$185,839  $179,906  $197,835  
Gross margin - as a % of net sales45.0 %45.4 %46.3 %
Adjusted gross margin - as a % of net sales45.1 %46.0 %46.3 %


Entegris, Inc. - page 9 of 13







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

Three months ended
Segment profit-GAAPMarch 28, 2020March 30, 2019December 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 profit103,469  94,121  110,665  
Amortization of intangible assets16,211  18,657  16,028  
Unallocated expenses6,514  27,973  10,552  
    Total operating income$80,744  $47,491  $84,085  

Three months ended
Adjusted segment profitMarch 28, 2020March 30, 2019December 31, 2019
SCEM segment profit$32,670  $24,431  $32,822  
Severance and restructuring costs174  519  184  
Charge for fair value write-up of acquired inventory sold235  120  (476) 
SCEM adjusted segment profit$33,079  $25,070  $32,530  
MC segment profit$50,167  $47,323  $57,157  
Severance and restructuring costs190  724  195  
Charge for fair value write-up of acquired inventory sold126  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 costs135  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 expenses4,691  5,917  6,229  
    Total adjusted operating income$99,638  $92,180  $104,647  

Entegris, Inc. - page 10 of 13





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

Three months ended
March 28, 2020March 30, 2019December 31, 2019
Net sales$412,327  $391,047  $426,998  
Net income$61,006  $32,658  $57,438  
Adjustments to net income:
Income tax expense8,622  5,422  13,656  
Interest expense, net10,238  9,659  12,743  
Other expense (income), net878  (248) 248  
GAAP - Operating income80,744  47,491  84,085  
Charge for fair value write-up of acquired inventory sold361  2,155  211  
Deal and transaction costs1,431  19,136  973  
Integration costs48  2,920  3,350  
Severance and restructuring costs843  1,821  —  
Amortization of intangible assets16,211  18,657  16,028  
Adjusted operating income99,638  92,180  104,647  
Depreciation20,648  16,721  20,352  
Adjusted EBITDA$120,286  $108,901  $124,999  
Net income - as a % of net sales14.8 %8.4 %13.5 %
Adjusted operating margin24.2 %23.6 %24.5 %
Adjusted EBITDA - as a % of net sales29.2 %27.8 %29.3 %



Entegris, Inc. - page 11 of 13





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, 2020March 30, 2019December 31, 2019
GAAP net income$61,006  $32,658  $57,438  
Adjustments to net income:
Charge for fair value write-up of inventory acquired361  2,155  211  
Deal and transaction costs1,431  19,547  973  
Integration costs48  2,920  3,350  
Severance and restructuring costs843  1,821  —  
Loss on debt extinguishment and modification—  —  1,980  
Amortization of intangible assets16,211  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. - page 12 of 13





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 incomeJune 27, 2020
GAAP net income$50 - $59  
Adjustments to net income:
Restructuring and integration costs2  
Amortization of intangible assets12  
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 shareJune 27, 2020
Diluted earnings per common share$0.37 - $0.43  
Adjustments to diluted earnings per common share:
Restructuring and integration costs0.01  
Amortization of intangible assets0.09  
Income tax effect(0.02) 
Diluted non-GAAP earnings per common share$0.45 to $0.51  

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