ENTG Entegris Inc

• Net sales (as reported) of $813 million, decreased 10% from prior year and increased 5% sequentially

• Adjusted net sales (excluding the impact of divestitures) increased 6% from prior year and 10% sequentially

• GAAP diluted EPS of $0.45

• Non-GAAP diluted EPS of $0.71

Entegris, Inc. (NASDAQ: ENTG), today reported its financial results for the Company’s second quarter ended June 29, 2024.

Bertrand Loy, Entegris’ president and chief executive officer, said: “The Entegris team delivered another quarter of strong performance and execution. Sales (excluding divestitures) increased 10 percent sequentially and were up in all three divisions and in most product lines.”

Mr. Loy added: "2024 continues to be a transition year for the semiconductor industry. We feel good about the improving fundamentals of the semi market and expect it will gradually recover in the second half of this year, albeit at a more moderate pace than previously expected. In the second half of 2024, we will continue to position the company for strong growth acceleration into 2025.”

“The compounding process complexity of our customers’ roadmaps is making Entegris expertise in materials science and materials purity increasingly valuable,” he said. “This is expected to translate into higher Entegris content per wafer, expanding served market, and fuel our market outperformance.”

Quarterly Financial Results Summary

(in thousands, except percentages and per share data)

GAAP Results

Jun 29, 2024

Jul 1, 2023

Mar 30, 2024

Net sales

$812,652

$901,000

$771,025

Gross margin - as a % of net sales

46.2%

42.6%

45.6%

Operating margin - as a % of net sales

16.0%

29.7%

15.3%

Net income

$67,696

$197,646

$45,266

Diluted earnings per common share

$0.45

$1.31

$0.30

 

 

 

 

Non-GAAP Results

Jun 29, 2024

Jul 1, 2023

Mar 30, 2024

Adjusted gross margin - as a % of net sales

46.2%

42.6%

45.6%

Adjusted operating margin - as a % of net sales

22.0%

22.3%

23.1%

Adjusted EBITDA - as a % of net sales

27.8%

27.2%

29.0%

Diluted non-GAAP earnings per common share

$0.71

$0.66

$0.68

Third Quarter Outlook

For the Company’s guidance for the third quarter ending September 28, 2024, the Company expects sales of $820 million to $840 million. The midpoint of this guidance range represents a 10% year-on-year increase, excluding the impact of divestitures. GAAP net income of $78 million to $85 million and diluted earnings per common share is expected to be between $0.51 and $0.56. On a non-GAAP basis, the Company expects diluted earnings per common share to range from $0.75 to $0.80, reflecting net income on a non-GAAP basis in the range of $114 million to $121 million. The Company also expects adjusted EBITDA of approximately 28.5% to 29.5% of sales.

Segment Results

The Company operates in three segments:

Materials Solutions (MS): MS provides materials-based solutions, such as chemical mechanical planarization slurries and pads, deposition materials, process chemistries and gases, formulated cleans, etchants and other specialty materials that enable our customers to achieve better device performance and faster time to yield, while providing for lower total cost of ownership.

Microcontamination Control (MC): MC offers advanced filtration solutions that improve customers’ yield, device reliability and cost by filtering and purifying critical liquid chemistries and gases used in semiconductor manufacturing processes and other high-technology industries.

Advanced Materials Handling (AMH): AMH develops solutions that improve customers’ yields by protecting critical materials during manufacturing, transportation, and storage including products that monitor, protect, transport and deliver critical liquid chemistries, wafers, and other substrates for a broad set of applications in the semiconductor, life sciences and other high-technology industries.

Second-Quarter Results

Entegris will hold a conference call to discuss its results for the second quarter on Wednesday, July 31, 2024, at 9:00 a.m. Eastern Time. Participants should dial 800-225-9448 or +1 203-518-9708, referencing confirmation ID: ENTGQ224. Participants are asked to dial in 10 minutes prior to the start of the call. For the live webcast and replay of the call, please Click Here.

Management’s slide presentation concerning the results for the second quarter will be posted on the Investor Relations section of www.entegris.com.

About Entegris

Entegris is a leading supplier of advanced materials and process solutions for the semiconductor and other high-tech industries. Entegris has approximately 8,000 employees throughout its global operations and is ISO 9001 certified. It has manufacturing, customer service and/or research facilities in the United States, Canada, China, 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 Net Sales, Adjusted EBITDA, Adjusted Gross Profit, Adjusted Segment Profit, 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 provides supplemental non-GAAP financial measures to better understand and manage its business and believes these measures provide investors and analysts additional and meaningful information for the assessment of the Company’s ongoing results. Management also uses these non-GAAP measures to assist in the evaluation of the performance of its business segments and to make operating decisions. Management believes that the Company’s non-GAAP measures help indicate the Company’s baseline performance before certain gains, losses or other charges that may not be indicative of the Company’s business or future outlook, and that non-GAAP measures offer a more consistent view of business performance. The Company believes the non-GAAP measures aid investors’ overall understanding of the Company’s results by providing a higher degree of transparency for such items and providing a level of disclosure that will help investors generally understand how management plans, measures and evaluates the Company’s business performance. Management believes that the inclusion of non-GAAP measures provides greater consistency in its financial reporting and facilitates investors’ understanding of the Company’s historical operating trends by providing an additional basis for comparisons to prior periods. The reconciliations of GAAP net sales to Adjusted Net Sales (excluding divestitures), 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.

Cautionary Note on Forward-Looking Statements

This news 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 may include statements about fluctuations in demand for semiconductors; global economic uncertainty and the risks inherent in operating a global business; supply chain matters; inflationary pressures; future period guidance or projections; the Company’s performance relative to its markets, including the drivers of such performance; market and technology trends, including the duration and drivers of any growth trends; the development of new products and the success of their introductions; the focus of the Company’s engineering, research and development projects; the Company’s ability to obtain, protect and enforce intellectual property rights; information technology risks; the Company’s ability to execute on our business strategies, including the Company’s expansion of its manufacturing presence in Taiwan and in Colorado Springs; the Company’s capital allocation strategy, which may be modified at any time for any reason, including with respect to share repurchases, dividends, debt repayments and potential acquisitions; the impact of the acquisitions and divestitures the Company has made and commercial partnerships the Company has established, including the acquisition of CMC Materials, Inc. (now known as CMC Materials LLC) (“CMC Materials”); the amount of goodwill we carry on our balance sheets; key employee retention; future capital and other expenditures, including estimates thereof; the Company’s expected tax rate; the impact, financial or otherwise, of any organizational changes or changes in the legal and regulatory environment in which we operate; the impact of accounting pronouncements; quantitative and qualitative disclosures about market risk; climate change and our environmental, social and governance commitments; and other matters. These forward-looking statements are based on current management expectations and assumptions only as of the date of this news 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 the Company’s products and solutions; the level of, and obligations associated with, the Company’s indebtedness, including the debts incurred in connection with the acquisition of CMC Materials; risks related to the acquisition and integration of CMC Materials, including the ability to achieve the anticipated value-creation contemplated by the acquisition of CMC Materials; raw material shortages, supply and labor constraints, price increases, inflationary pressures and rising interest rates; operational, political and legal risks of the Company’s international operations; the Company’s dependence on sole source and limited source suppliers; 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; substantial competition; the Company’s concentrated customer base; the Company’s ability to identify, complete and integrate acquisitions, joint ventures, divestitures or other similar transactions; the Company’s ability to effectively implement any organizational changes; the Company’s ability to protect and enforce intellectual property rights; the impact of regional and global instabilities, hostilities and geopolitical uncertainty, including, but not limited to, the ongoing conflicts between Ukraine and Russia, between Israel and Hamas and other tensions in the Middle East, as well as the global responses thereto; the increasing complexity of certain manufacturing processes; changes in government regulations of the countries in which the Company operates, including the imposition of tariffs, export controls and other trade laws, restrictions and changes to national security and international trade policy, especially as they relate to China; fluctuation of currency exchange rates; fluctuations in the market price of the Company’s stock; and other risk factors and additional information described in the Company’s filings with the U.S. Securities and Exchange Commission (the “SEC”), including under the heading “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed on February 15, 2024, and in the Company’s other SEC filings. Except as required under the federal securities laws and the rules and regulations of the SEC, the Company undertakes no obligation to update publicly any forward-looking statements or information contained herein, 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

 

 

Jun 29, 2024

Jul 1, 2023

Mar 30, 2024

Net sales

$812,652

$901,000

$771,025

Cost of sales

436,833

516,834

419,205

 

Gross profit

375,819

384,166

351,820

Selling, general and administrative expenses

116,315

145,596

112,193

Engineering, research and development expenses

81,885

71,030

71,876

Amortization of intangible assets

47,513

54,680

50,159

Gain on termination of alliance agreement

—

(154,754)

—

 

Operating income

130,106

267,614

117,592

Interest expense, net

52,527

78,605

54,379

Other expense, net

2,977

7,724

14,285

 

Income before income tax expense (benefit)

74,602

181,285

48,928

Income tax expense (benefit)

6,689

(16,491)

3,456

Equity in net loss of affiliates

217

130

206

 

Net income

$67,696

$197,646

$45,266

 

 

 

 

 

 

 

 

Basic earnings per common share:

$0.45

$1.32

$0.30

Diluted earnings per common share:

$0.45

$1.31

$0.30

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

Basic

150,801

149,825

150,549

 

Diluted

151,819

150,837

151,718

Entegris, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

 

Six months ended

 

 

Jun 29, 2024

Jul 1, 2023

Net sales

$1,583,677

$1,823,396

Cost of sales

856,038

1,037,545

 

Gross profit

727,639

785,851

Selling, general and administrative expenses

228,508

315,463

Engineering, research and development expenses

153,761

142,936

Amortization of intangible assets

97,672

112,254

Goodwill impairment

—

88,872

Gain on termination of alliance agreement

—

(154,754)

 

Operating income

247,698

281,080

Interest expense, net

106,906

163,426

Other expense, net

17,262

3,066

 

Income before income tax expense

123,530

114,588

Income tax expense

10,145

4,978

Equity in net loss of affiliates

423

130

 

Net income

$112,962

$109,480

 

 

 

 

 

 

Basic earnings per common share:

$0.75

$0.73

Diluted earnings per common share:

$0.74

$0.73

 

 

 

 

Weighted average shares outstanding:

 

 

 

Basic

150,675

149,626

 

Diluted

151,769

150,609

Entegris, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

 

Jun 29, 2024

Dec 31, 2023

ASSETS

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$320,008

$456,929

Trade accounts and notes receivable, net

457,107

457,052

Inventories, net

 

633,373

607,051

Deferred tax charges and refundable income taxes

52,690

63,879

Assets held-for-sale

 

 

6,195

278,753

Other current assets

107,413

113,663

Total current assets

1,576,786

1,977,327

Property, plant and equipment, net

1,495,098

1,468,043

Right-of-use assets

83,710

80,399

Goodwill

3,943,893

3,945,860

Intangible assets, net

1,184,955

1,281,969

Deferred tax assets and other noncurrent tax assets

24,059

31,432

Other assets

 

28,085

27,561

Total assets

 

$8,336,586

$8,812,591

LIABILITIES AND EQUITY

 

Current liabilities

 

 

 

Accounts payable

 

141,579

134,211

Accrued liabilities

 

235,201

283,158

Liabilities held-for-sale

 

662

19,223

Income tax payable

 

62,416

77,403

Total current liabilities

439,858

513,995

Long-term debt

4,122,233

4,577,141

Long-term lease liabilities

 

71,800

68,986

Other liabilities

 

200,305

243,875

Shareholders’ equity

 

3,502,390

3,408,594

Total liabilities and equity

$8,336,586

$8,812,591

Entegris, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

Three months ended

Six months ended

 

Jun 29, 2024

Jul 1, 2023

Jun 29, 2024

Jul 1, 2023

Operating activities:

 

 

 

 

Net income

$67,696

$197,646

$112,962

$109,480

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

 

 

 

 

Depreciation

47,407

43,719

92,750

90,494

Amortization

47,513

54,680

97,672

112,254

Share-based compensation expense

26,889

11,458

34,797

42,136

Provision for deferred income taxes

(12,723)

(31,988)

(24,088)

(66,814)

Loss on extinguishment of debt

796

4,482

11,385

7,269

Impairment of goodwill

—

—

—

88,872

Gain on termination of alliance agreement

—

(154,754)

—

(154,754)

Loss (gain) from sale of businesses and held-for-sale assets, net

537

14,935

(4,311)

28,577

Other

13,784

21,670

48,264

49,526

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

 

 

 

 

Trade accounts and notes receivable

(35,125)

9,562

(11,908)

17,941

Inventories

(15,797)

29,843

(50,659)

(5,009)

Accounts payable and accrued liabilities

(33,728)

(43,638)

(42,634)

(23,595)

Income taxes payable, refundable income taxes and noncurrent taxes payable

(15,001)

(31,437)

(16,923)

(15,570)

Other

18,964

840

11,091

(1,918)

Net cash provided by operating activities

111,212

127,018

258,398

278,889

Investing activities:

 

 

 

 

Acquisition of property and equipment

(59,269)

(116,051)

(125,889)

(250,043)

Proceeds, net from sale of businesses

—

759

249,600

134,286

Proceeds from termination of alliance agreement

—

169,251

—

169,251

Other

47

258

(1,917)

366

Net cash (used in) provided by investing activities

(59,222)

54,217

121,794

53,860

Financing activities:

 

 

 

 

Proceeds from debt

30,000

—

254,537

117,170

Payments of debt

(85,000)

(311,501)

(728,311)

(428,671)

Payments for debt issuance costs

—

(3,475)

—

(3,475)

Payments for dividends

(15,099)

(14,980)

(30,355)

(30,150)

Issuance of common stock

1,494

18,374

10,467

36,767

Taxes paid related to net share settlement of equity awards

(878)

(240)

(15,306)

(9,646)

Other

(526)

(279)

(902)

(578)

Net cash used in financing activities

(70,009)

(312,101)

(509,870)

(318,583)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(2,655)

(11,149)

(7,243)

(10,588)

(Decrease) increase in cash, cash equivalents and restricted cash

(20,674)

(142,015)

(136,921)

3,578

Cash, cash equivalents and restricted cash at beginning of period

340,682

709,032

456,929

563,439

Cash, cash equivalents and restricted cash at end of period

$320,008

$567,017

$320,008

$567,017

Entegris, Inc. and Subsidiaries

Segment Information

(In thousands)

(Unaudited)

 

 

Three months ended

Six months ended

Net sales

Jun 29, 2024

Jul 1, 2023

Mar 30, 2024

Jun 29, 2024

Jul 1, 2023

Materials Solutions

$342,333

$440,634

$350,036

$692,369

$888,964

Microcontamination Control

293,769

283,614

267,864

561,633

552,911

Advanced Materials Handling

188,225

190,356

162,854

351,079

409,209

Inter-segment elimination

(11,675)

(13,604)

(9,729)

(21,404)

(27,688)

Total net sales

$812,652

$901,000

$771,025

$1,583,677

$1,823,396

 

 

 

 

 

 

 

Three months ended

Six months ended

Segment profit

Jun 29, 2024

Jul 1, 2023

Mar 30, 2024

Jun 29, 2024

Jul 1, 2023

Materials Solutions

$70,268

$215,738

$67,124

$137,392

$186,216

Microcontamination Control

93,709

100,661

86,555

180,264

196,658

Advanced Materials Handling

28,980

35,830

24,606

53,586

83,995

Total segment profit

192,957

352,229

178,285

371,242

466,869

Amortization of intangibles

(47,513)

(54,680)

(50,159)

(97,672)

(112,254)

Unallocated expenses

(15,338)

(29,935)

(10,534)

(25,872)

(73,535)

Total operating income

$130,106

$267,614

$117,592

$247,698

$281,080

Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Gross Profit to Adjusted Gross Profit

(In thousands)

 

Three months ended

Six months ended

 

Jun 29, 2024

Jul 1, 2023

Mar 30, 2024

Jun 29, 2024

Jul 1, 2023

Net Sales

$812,652

$901,000

$771,025

$1,583,677

$1,823,396

Gross profit-GAAP

$375,819

$384,166

$351,820

$727,639

$785,851

Adjustments to gross profit:

 

 

 

 

 

Restructuring costs 1

—

—

—

—

7,377

Adjusted gross profit

$375,819

$384,166

$351,820

$727,639

$793,228

 

 

 

 

 

 

Gross margin - as a % of net sales

46.2 %

42.6 %

45.6 %

45.9 %

43.1 %

Adjusted gross margin - as a % of net sales

46.2 %

42.6 %

45.6 %

45.9 %

43.5 %

 

1 Restructuring charges resulting from cost saving initiatives.

Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Segment Profit to Adjusted Operating Income

(In thousands)

(Unaudited)

 

Three months ended

Six months ended

Adjusted segment profit

Jun 29, 2024

Jul 1, 2023

Mar 30, 2024

Jun 29, 2024

Jul 1, 2023

MS segment profit

$70,268

$215,738

$67,124

$137,392

$186,216

Restructuring costs 1

—

—

—

—

7,108

Loss (gain) on sale of businesses and held-for-sale assets, net 2

537

14,936

(4,848)

(4,311)

28,578

Goodwill impairment 3

—

—

—

—

88,872

Gain on termination of alliance agreement 4

—

(154,754)

—

—

(154,754)

Impairment on long-lived assets 5

—

—

12,967

12,967

—

MS adjusted segment profit

$70,805

$75,920

$75,243

$146,048

$156,020

 

 

 

 

 

 

MC segment profit

$93,709

$100,661

$86,555

$180,264

$196,658

Restructuring costs 1

—

—

—

—

2,795

MC adjusted segment profit

$93,709

$100,661

$86,555

$180,264

$199,453

 

 

 

 

 

 

AMH segment profit

$28,980

$35,830

$24,606

$53,586

$83,995

Restructuring costs 1

—

—

—

—

1,254

AMH adjusted segment profit

$28,980

$35,830

$24,606

$53,586

$85,249

 

 

 

 

 

 

Unallocated general and administrative expenses

$15,338

$29,935

$10,534

$25,872

$73,535

Less: unallocated deal and integration costs

(724)

(18,441)

(2,218)

(2,942)

(38,416)

Less: unallocated restructuring costs 1

—

—

—

—

(86)

Adjusted unallocated general and administrative expenses

$14,614

$11,494

$8,316

$22,930

$35,033

 

 

 

 

 

 

Total adjusted segment profit

$193,494

$212,411

$186,404

$379,898

$440,722

Less: adjusted unallocated general and administrative expenses

(14,614)

(11,494)

(8,316)

(22,930)

(35,033)

Total adjusted operating income

$178,880

$200,917

$178,088

$356,968

$405,689

 

1 Restructuring charges resulting from cost saving initiatives.

2 Loss (gain) from the sale of certain businesses and held-for-sale assets, net.

3 Non-cash impairment charges associated with goodwill.

4 Gain on the termination of the alliance agreement with MacDermid Enthone.

5 Impairment of long-lived assets.

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

 

Jun 29, 2024

Jul 1, 2023

Mar 30, 2024

Jun 29, 2024

Jul 1, 2023

Net sales

$812,652

$901,000

$771,025

$1,583,677

$1,823,396

Net income

$67,696

$197,646

$45,266

$112,962

$109,480

Net income - as a % of net sales

8.3%

21.9%

5.9%

7.1%

6.0%

Adjustments to net income:

 

 

 

 

 

Equity in net loss of affiliates

217

130

206

423

130

Income tax expense (benefit)

6,689

(16,491)

3,456

10,145

4,978

Interest expense, net

52,527

78,605

54,379

106,906

163,426

Other expense, net

2,977

7,724

14,285

17,262

3,066

GAAP - Operating income

130,106

267,614

117,592

247,698

281,080

Operating margin - as a % of net sales

16.0%

29.7%

15.3%

15.6%

15.4%

Goodwill impairment 1

—

—

—

—

88,872

Deal and transaction costs 2

—

—

—

—

3,001

Integration costs:

 

 

 

 

 

Professional fees 3

147

13,324

2,140

2,287

25,312

Severance costs 4

577

965

78

655

2,327

Retention costs 5

—

362

—

—

1,642

Other costs 6

—

3,789

—

—

6,134

Restructuring costs 7

—

—

—

—

11,242

Loss (gain) on sale of businesses and held-for-sale assets, net 8

537

14,937

(4,848)

(4,311)

28,579

Gain on termination of alliance agreement 9

—

(154,754)

—

—

(154,754)

Impairment of long-lived assets 10

—

—

12,967

12,967

—

Amortization of intangible assets 11

47,513

54,680

50,159

97,672

112,254

Adjusted operating income

178,880

200,917

178,088

356,968

405,689

Adjusted operating margin - as a % of net sales

22.0%

22.3%

23.1%

22.5%

22.2%

Depreciation

47,407

43,719

45,343

92,750

90,494

Adjusted EBITDA

$226,287

$244,636

$223,431

$449,718

$496,183

Adjusted EBITDA - as a % of net sales

27.8%

27.2%

29.0%

28.4%

27.2%

 

1 Non-cash impairment charges associated with goodwill.

2 Deal and transaction costs associated with the CMC Materials acquisition and completed divestitures.

3 Represents professional and vendor fees recorded in connection with services provided by consultants, accountants, lawyers and other third-party service providers to assist us in integrating CMC Materials into our operations. These fees arise outside of the ordinary course of our continuing operations.

4 Represents severance charges related to the integration of the CMC Materials acquisition.

5 Represents retention charges related directly to the CMC Materials acquisition and completed divestitures, and are not part of our normal, recurring cash operating expenses.

6 Represents other employee related costs and other costs incurred relating to the CMC Materials acquisition and the completed divestitures. These costs arise outside of the ordinary course of our continuing operations.

7 Restructuring charges resulting from cost saving initiatives.

8 Loss (gain) from the sale of certain businesses and held-for-sale assets, net.

9 Gain on the termination of the alliance agreement with MacDermid Enthone.

10 Impairment of long-lived assets.

11 Non-cash amortization expense associated with intangibles acquired in acquisitions.

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

Six months ended

 

Jun 29, 2024

Jul 1, 2023

Mar 30, 2024

Jun 29, 2024

Jul 1, 2023

GAAP net income

$67,696

$197,646

$45,266

$112,962

$109,480

Adjustments to net income:

 

 

 

 

 

Goodwill impairment 1

—

—

—

—

88,872

Deal and transaction costs 2

—

—

—

—

3,001

Integration costs:

 

 

 

 

 

Professional fees 3

147

13,324

2,140

2,287

25,312

Severance costs 4

577

965

78

655

2,327

Retention costs 5

—

362

—

—

1,642

Other costs 6

—

3,789

—

—

6,134

Restructuring costs 7

—

—

—

—

11,242

Loss on extinguishment of debt and modification 8

796

4,481

11,551

12,347

8,361

Loss (gain) on sale of businesses and held-for-sale assets, net 9

537

14,937

(4,848)

(4,311)

28,579

Gain on termination of alliance agreement 10

—

(154,754)

—

—

(154,754)

Infineum termination fee, net 11

—

—

—

—

(10,877)

Impairment of long-lived assets 12

—

—

12,967

12,967

—

Amortization of intangible assets 13

47,513

54,680

50,159

97,672

112,254

Tax effect of adjustments to net income and discrete tax items14

(10,157)

(35,825)

(13,541)

(23,698)

(34,186)

Non-GAAP net income

$107,109

$99,605

$103,772

$210,881

$197,387

 

 

 

 

 

 

Diluted earnings per common share

$0.45

$1.31

$0.30

$0.74

$0.73

Effect of adjustments to net income

$0.26

$(0.65)

$0.39

$0.65

$0.58

Diluted non-GAAP earnings per common share

$0.71

$0.66

$0.68

$1.39

$1.31

 

 

 

 

 

 

Diluted weighted averages shares outstanding

151,819

150,837

151,718

151,769

150,609

Diluted non-GAAP weighted average shares outstanding

151,819

150,837

151,718

151,769

150,609

 

1 Non-cash impairment charges associated with goodwill.

2 Deal and transaction costs associated with the CMC Materials acquisition and completed divestitures.

3 Represents professional and vendor fees recorded in connection with services provided by consultants, accountants, lawyers and other third-party service providers to assist us in integrating CMC Materials into our operations. These fees arise outside of the ordinary course of our continuing operations.

4 Represents severance charges related to the integration of CMC Materials.

5 Represents retention charges related directly to the CMC Materials acquisition and completed divestitures, and are not part of our normal, recurring cash operating expenses.

6 Represents other employee-related costs and other costs incurred relating to the CMC Materials acquisition and completed divestitures. These costs arise outside of the ordinary course of our continuing operations.

7 Restructuring charges resulting from cost saving initiatives.

8 Non-recurring loss on extinguishment of debt and modification of our Credit Agreement.

9 Loss (gain) from the sale of certain businesses and held-for-sale assets, net.

10 Gain on the termination of the alliance agreement with MacDermid Enthone.

11 Non-recurring gain from Infineum termination fee.

12 Impairment of long-lived assets.

13 Non-cash amortization expense associated with intangibles acquired in acquisitions.

14 The tax effect of pre-tax adjustments to net income was calculated using the applicable marginal tax rate for each respective year.

Entegris, Inc. and Subsidiaries

Reconciliation of Reported Net Sales to Adjusted Net Sales (excluding divestitures) Non-GAAP

(In thousands)

(Unaudited)

 

Three months ended

Six months ended

 

Jun 29, 2024

Jul 1, 2023

Mar 30, 2024

Jun 29, 2024

Jul 1, 2023

Net sales

$812,652

$901,000

$771,025

$1,583,677

$1,823,396

Less: divestitures 1

—

(135,225)

(33,907)

(33,907)

(279,263)

Adjusted Net sales (excluding divestitures) Non-GAAP

$812,652

$765,775

$737,118

$1,549,770

$1,544,133

 

1 Adjusted for the quarterly impact of net sales from divestitures.

Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Outlook to Non-GAAP Outlook *

(In millions, except per share data)

(Unaudited)

 

Third Quarter Outlook

Reconciliation GAAP Operating Margin to non-GAAP Operating Margin and Adjusted EBITDA Margin

September 28, 2024

Net sales

$820 - $840

GAAP - Operating income

$139 - $153

Operating margin - as a % of net sales

17.0% - 18.2%

Deal, transaction and integration costs

—

Amortization of intangible assets

47

Adjusted operating income

$187 - $201

Adjusted operating margin - as a % of net sales

22.7% - 23.9%

Depreciation

47

Adjusted EBITDA

$234 - $248

Adjusted EBITDA - as a % of net sales

28.5% - 29.5%

 

Third Quarter Outlook

Reconciliation GAAP net income to non-GAAP net income

September 28, 2024

GAAP net income

$78 - $85

Adjustments to net income:

 

Deal, transaction and integration costs

—

Amortization of intangible assets

47

Income tax effect

(11)

Non-GAAP net income

$114 - $121

 

Third Quarter Outlook

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

September 28, 2024

Diluted earnings per common share

$0.51 - $0.56

Adjustments to diluted earnings per common share:

 

Deal, transaction and integration costs

—

Amortization of intangible assets

0.31

Income tax effect

(0.07)

Diluted non-GAAP earnings per common share

$0.75 - $0.80

 

 

*As a result of displaying amounts in millions, rounding differences may exist in the tables.

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240731830670/en/

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