CMC Materials, Inc. (Nasdaq: CCMP), a leading global supplier of
consumable materials primarily to semiconductor manufacturers,
today reported financial results for its second quarter of fiscal
2022, which ended March 31, 2022.
“We are very pleased to report strong results for our second
fiscal quarter, which represents our sixth consecutive quarter of
record revenue, driven by continued robust demand for our
Electronic Materials offerings and improving demand for our
Performance Materials solutions,” said David Li, President and CEO
of CMC Materials. “I am appreciative of the hard work and
dedication of the CMC Materials team, who continue to successfully
navigate global supply chain complexities and meet global customer
demand in full and on time, while maintaining strong profitability.
Looking ahead to the remainder of the fiscal year, we remain on
track to deliver against our financial targets and are reiterating
our expectation for Adjusted EBITDA1 to be between $355 million to
$385 million.”
Regarding the company’s previously announced pending transaction
with Entegris, Inc. (Nasdaq: ENTG), under which Entegris will
acquire the company in a cash and stock transaction (“Entegris
Transaction”), Mr. Li stated, “On March 3, 2022, our stockholders
voted to approve the merger agreement for the Entegris Transaction.
We continue to work through integration planning activities with
the Entegris team to create an industry-leading electronic
materials provider.”
Key Financial Information for the Second
Quarter
- Revenue was $324.1 million, 11.6% higher than the same quarter
last year with an increase of 13.2% in Electronic Materials and
3.4% in Performance Materials.
- Revenue was up 2.2% sequentially, driven by both volume and
price.
- Gross margin was 39.6% versus 42.6% in the prior year. Adjusted
gross margin1 was 40.8%, versus 43.3% in the prior year.
- This decline was primarily due to the exit of the wood
treatment business and an increase in the cost of a key raw
material in the pipeline and industrial materials (PIM)
business.
- Net income was $34.6 million compared to a net loss of $149.8
million in the same quarter last year.
- In the second quarter of fiscal year 2022, the company recorded
$12.2 million in transaction expenses related to the Entegris
Transaction.
- In the second quarter of fiscal year 2021, the company recorded
$208.2 million of non-cash, pre-tax goodwill impairment
charges for the PIM and wood treatment businesses.
- Adjusted net income1 was $56.4 million, 11.1% higher compared
to the prior year driven by higher revenue and lower operating
expenses.
- Benefits from the company’s previously announced Future Forward
cost optimization program resulted in a 10.5% year-over-year
decline in adjusted operating expenses1. The company remains
committed to continued investment in product development,
operations, and quality across its businesses.
- Diluted EPS was $1.19 compared to loss per diluted share of
$5.13 in the same quarter last year. Adjusted diluted EPS1 was
$1.94, 13.5% higher compared to the same quarter last year.
- Adjusted EBITDA1 was $96.3 million, 13.6% higher compared to
the same quarter last year. Adjusted EBITDA margin1 for the quarter
was 29.7%, compared to 29.2% in the same quarter last year due to
higher revenue and lower adjusted operating expenses.
1Refer to financial tables and “Use of Certain GAAP, non-GAAP
Adjusted Financial Information” below for information about these
non-GAAP financial measures and reconciliations of these non-GAAP
measures to their most comparable GAAP measure.
Electronic Materials – Revenue was $274.5
million, 13.2% higher than revenue in the same quarter last year
due to growth across all businesses in the segment. Sequentially,
revenue was 2.6% higher driven by growth in CMP pads and electronic
chemicals, while CMP slurries revenue was approximately flat.
- CMP slurries increased 4.5% compared to the second fiscal
quarter of 2021 due to a continued healthy semiconductor
environment and strong demand from both logic and memory
customers.
- CMP pads increased 20.5% year-over-year due to robust market
growth and new position wins.
- Electronic chemicals increased 18.7% compared to the same
quarter last year driven by strong customer demand.
Adjusted EBITDA was $94.0 million, or 34.2% of revenue, compared
to $81.3 million, or 33.5% of revenue, in the same quarter last
year. The Adjusted EBITDA margin1 increase was due to the benefit
from higher revenue from all businesses in the segment. Global
price increases implemented during fiscal year 2022 largely offset
the higher costs for raw materials, freight and logistics in the
second fiscal quarter.
Performance Materials –
Revenue was $49.6 million for the quarter, 3.4% higher than revenue
in the same quarter last year as higher revenue in the PIM business
more than offset the impact of the exit of the wood treatment
business. Revenue was essentially flat sequentially.
- PIM revenue increased 17.0% compared to the same quarter last
year, and 14.1% sequentially. The PIM business reached its highest
quarter revenue since the second quarter of fiscal year 2020 and
benefited from stronger customer demand, including the ramp of new
domestic and international orders.
- The PIM business continues to execute against its strategic
initiatives by pursuing new customer opportunities and achieving
additional R&D progress to drive profitability
improvement.
- During the second quarter of fiscal year 2022, the company
successfully completed its exit of the wood treatment
business.
Adjusted EBITDA was $13.9 million, or 28.0% of revenue1,
compared to $18.8 million, or 39.1% of revenue1, in the same
quarter last year. The Adjusted EBITDA decline was primarily the
result of the exit of the wood treatment business and an increase
in the cost of a key raw material in the PIM business.
Please refer to the financial table below titled “Segment
Revenue and Adjusted EBITDA” for more information.
Current Financial Guidance
The company currently expects Electronic Materials revenue in
the third quarter of fiscal 2022 to be up low single digits
compared to revenue in the second quarter of fiscal 2022.
Primarily because the company completed its exit of the wood
treatment business in the second quarter of 2022, Performance
Materials revenue is expected to be down approximately 20% in the
third quarter of fiscal 2022 compared to revenue in the second
quarter of fiscal 2022. Excluding the wood treatment business,
Performance Materials revenue is expected to be up low single
digits sequentially.
Company revenue is expected to be approximately flat
sequentially. Excluding the wood treatment business, company
revenue is expected to be up low single digits sequentially.
The company is reiterating full fiscal year 2022 guidance, which
includes Adjusted EBITDA1 to be between $355 million to $385
million, depreciation and amortization to be between $50 million to
$55 million, interest expense to be between $38 million to $40
million, tax rate to be between 20% to 23%, and capital spending to
be between $60 million to $80 million.
The company’s outlook includes its completed exit of the wood
treatment business, which is expected to negatively impact Adjusted
EBITDA by approximately $36 million compared to fiscal 2021. The
company expects to generally offset this impact with organic growth
as well as with the initial impact of the Future Forward
program.
Additionally, for fiscal year 2022, the global pricing actions
taken are expected to largely offset the increased costs for raw
materials, freight and logistics. The company continues to evaluate
further pricing actions to mitigate additional inflationary
headwinds as needed.
For additional details on the company’s exit of the wood
treatment business, please refer to the company’s fourth quarter
and full year fiscal 2021 earnings slides and remarks document,
which can be accessed here, or by visiting the Investor Relations
Quarterly Results section of the company’s website.
Future Forward Strategic Cost Optimization
Program
The Future Forward program is proceeding as planned, and the
company continues to expect the program to drive savings of
approximately $15 million in fiscal year 2022, which should be a
direct benefit to the company’s Adjusted EBITDA, and ongoing
annualized savings in the range of $20 million-$25 million by
approximately the end of fiscal 2023.
Entegris Transaction
Please refer to www.EntegrisCMCTransaction.com for more
information about the Entegris Transaction.
Conference Call
In light of the Entegris Transaction, the company has not
scheduled a conference call to discuss its quarterly financial
results.
ABOUT CMC MATERIALS, INC.
CMC Materials, Inc., headquartered in Aurora, Illinois, is a
leading global supplier of consumable materials primarily to
semiconductor manufacturers. The company’s products play a critical
role in the production of advanced semiconductor devices, helping
to enable the manufacture of smaller, faster and more complex
devices by its customers. CMC Materials, Inc. is also a leading
provider of performance materials to pipeline operators. The
company's mission is to create value by delivering high-performing
and innovative solutions that solve its customers’ challenges. The
company has approximately 2,200 employees globally. For more
information about CMC Materials, Inc., visit www.cmcmaterials.com,
or contact Colleen Mumford, Vice President, Communications and
Marketing, at 630-499-2600.
USE OF CERTAIN GAAP AND NON-GAAP ADJUSTED FINANCIAL
INFORMATION
The company’s financial results are provided in accordance with
accounting principles generally accepted in the United States of
America (GAAP) and using certain non-GAAP financial measures. In
particular, the Company presents the following non-GAAP financial
measures: adjusted net income, adjusted diluted earnings per share,
adjusted EBITDA, adjusted EBITDA margin, free cash flow, and net
debt. Adjusted EBITDA is defined as earnings before interest,
income taxes, depreciation and amortization, and excludes certain
items that affect comparability from period to period. Adjusted
EBITDA margin is defined as adjusted EBITDA as a percentage of
revenue.
The non-GAAP financial measures provided in this press release
are a supplement to, and not a substitute for, the company’s
financial results presented in accordance with U.S. GAAP. These
non-GAAP financial measures are provided to enhance the investor's
understanding about the company's ongoing operations. Specifically,
the company believes the impact of the adjustments related to
impairment charges, Entegris Transaction-related expenses, Future
Forward-related expenses, acquisition and integration-related
expenses and acquisition-related amortization expenses, costs of
restructuring related to the wood treatment business, costs
incurred related to the Pandemic net of grants received, and costs
related to the KMG-Bernuth warehouse fire, net of recoveries, are
not indicative of its core operating results and thus presents
these certain measures excluding these effects. The presentation of
non-GAAP financial measures is not meant to be considered in
isolation or as a substitute for results prepared and presented in
accordance with U.S. GAAP. Reconciliations of non-GAAP measures to
their most comparable GAAP measures are included in the financial
statements portion of this press release.
Adjusted EBITDA for the Electronic Materials and Performance
Materials segments is presented in conformity with Accounting
Standards Codification Topic 280, Segment Reporting. This measure
is reported to the chief operating decision maker for purposes of
making decisions about allocating resources to the segments and
assessing their performance. For these reasons, this measure is
excluded from the definition of non-GAAP financial measures under
the SEC Regulation G and Item 10(e) of Regulation S-K.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements, which
address a variety of subjects including, for example, the proposed
Entegris Transaction, including expected timing, completion and
effects of the proposed transaction; expected savings from our
Future Forward strategic cost optimization program, future sales
and operating results; growth or contraction, and trends in the
industries and markets in which the company participates such as
the semiconductor, and oil and gas, industries; the acquisition of,
investment in, or collaboration with other entities, and the
expected benefits and synergies of such transactions; divestment or
disposition, or cessation of investment, in certain of the
company’s businesses; new product introductions; development of new
products, technologies and markets; product performance; the
financial conditions of the company's customers; the competitive
landscape that relates to the company’s business; the company's
supply chain; the targeted benefits of company cost reduction or
optimization initiatives; natural disasters; various economic or
political factors and international or national events, including
related to global public health crises such as the Pandemic, the
ongoing conflict between the Russian Federation and Ukraine and
sanctions imposed in connection therewith, and the enactment of
trade sanctions, tariffs, or other similar matters; the generation,
protection and acquisition of intellectual property, and litigation
related to such intellectual property or third party intellectual
property; environmental, health and safety laws and regulations,
and related compliance and costs of compliance; the operation of
facilities by the company; the company's management; foreign
exchange fluctuation; the company's current or future tax rate,
including the effects of changes to tax laws in the jurisdictions
in which the company operates; cybersecurity threats and
vulnerabilities; and, financing facilities and related debt, pay
off or payment of principal and interest, and compliance with
covenants and other terms, uses and investment of the company's
cash balance, including dividends and share repurchases, which may
be suspended, terminated or modified at any time for any reason by
the company, based on a variety of factors. Statements that are not
historical facts, including statements about CMC Materials Inc.’s
(“CMC”) beliefs, plans and expectations, are forward-looking
statements. Such statements are based on current expectations of
CMC’s management and are subject to a number of factors and
uncertainties, which could cause actual results to differ
materially from those described in the forward-looking statements.
For information about factors that could cause actual results to
differ materially from those described in the forward-looking
statements, please refer to CMC’s filings with the Securities and
Exchange Commission (the “SEC”), including the risk factors
contained in CMC’s Annual Report on Form 10-K for the fiscal year
ended September 30, 2021 filed on November 12, 2021 and its
Quarterly Report on Form 10-Q for the quarter ended
December 31, 2021, filed on February 3, 2022 and its Quarterly
Report on Form 10-Q for the quarter ended March 31, 2022 to be
filed by May 10, 2022. Except as required by law, CMC Materials
undertakes no obligation to update forward-looking statements made
by it to reflect new information, subsequent events or
circumstances.
ADDITIONAL INFORMATION ABOUT THE ENTEGRIS TRANSACTION
AND WHERE TO FIND IT
This press release does not constitute an offer to buy or sell
or the solicitation of an offer to buy or sell any securities or a
solicitation of any vote or approval. This press release relates to
a proposed business combination between Entegris and CMC. In
connection with the proposed transaction, on January 28, 2022,
Entegris filed with the SEC a registration statement on Form S-4
(the “Registration Statement”) that includes a proxy statement of
CMC and that also constitutes a prospectus of Entegris. Each of
Entegris and CMC may also file other relevant documents with the
SEC regarding the proposed transaction. This document is not a
substitute for the proxy statement/prospectus or Registration
Statement or any other document that Entegris or CMC may file with
the SEC. The Registration Statement was declared effective by the
SEC on January 28, 2022 and CMC commenced mailing of the definitive
proxy statement/prospectus to its stockholders on or about January
28, 2022. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE
REGISTRATION STATEMENT, PROXY STATEMENT/PROSPECTUS AND OTHER
DOCUMENTS THAT MAY BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS
OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY
IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and
security holders will be able to obtain free copies of these
documents (if and when available) and other documents containing
important information about Entegris and CMC, once such documents
are filed with the SEC through the website maintained by the SEC at
http://www.sec.gov. Copies of the documents filed with the SEC by
Entegris will be available free of charge on Entegris’ website at
http://entegris.com or by contacting Entegris’ Investor Relations
Department by email at irelations@entegris.com or by phone at +1
978-436-6500. Copies of the documents filed with the SEC by CMC
will be available free of charge on CMC’s website at
www.cmcmaterials.com/investors or by contacting CMC’s Investor
Relations Department by email at investors@cmcmaterials.com by
phone at +1 630-499-2600.
PARTICIPANTS IN THE SOLICITATION
Entegris, CMC and certain of their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies in respect of the Entegris Transaction.
Information about the directors and executive officers of Entegris
is set forth in Entegris’ in the definitive proxy
statement/prospectus included in the Registration Statement, and
Entegris’ Annual Report on Form 10-K for the fiscal year ended
December 31, 2021, which was filed with the SEC on February 4,
2022. Information about the directors and executive officers of CMC
is set forth in the definitive proxy statement/prospectus included
in the Registration Statement, and CMC’s Annual Report on Form 10-K
for the fiscal year ended September 30, 2021, which was filed with
the SEC on November 12, 2021 and amended by the Form 10-K/A filed
with the SEC on January 19, 2022. Other information regarding the
participants in the proxy solicitations and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in other relevant materials to be filed with the
SEC regarding the Entegris Transaction when such materials become
available. Investors should read the Registration Statement and the
proxy statement/prospectus carefully before making any voting or
investment decisions. You may obtain free copies of these documents
from Entegris or CMC using the sources indicated above.
Contact: Colleen Mumford Vice President,
Communications and Marketing CMC Materials, Inc. (630) 499-2600
CMC MATERIALS, INC.CONSOLIDATED
STATEMENTS OF INCOME(Unaudited and amounts in thousands,
except per share amounts)
|
Three Months Ended |
|
Six Months Ended |
|
March 31, 2022 |
|
December 31, 2021 |
|
March 31, 2021 |
|
March 31, 2022 |
|
March 31, 2021 |
Revenue |
$ |
324,127 |
|
|
$ |
317,046 |
|
|
$ |
290,528 |
|
|
$ |
641,173 |
|
|
$ |
578,391 |
|
Cost of sales |
|
195,904 |
|
|
|
191,210 |
|
|
|
166,782 |
|
|
|
387,114 |
|
|
|
331,741 |
|
Gross profit |
|
128,223 |
|
|
|
125,836 |
|
|
|
123,746 |
|
|
|
254,059 |
|
|
|
246,650 |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Research, development and technical |
|
12,337 |
|
|
|
13,328 |
|
|
|
12,925 |
|
|
|
25,665 |
|
|
|
25,353 |
|
Selling, general and administrative |
|
47,111 |
|
|
|
56,483 |
|
|
|
58,538 |
|
|
|
103,594 |
|
|
|
114,458 |
|
Impairment charges |
|
— |
|
|
|
9,435 |
|
|
|
208,221 |
|
|
|
9,435 |
|
|
|
215,568 |
|
Entegris Transaction-related expenses |
|
12,243 |
|
|
|
6,050 |
|
|
|
— |
|
|
|
18,293 |
|
|
|
— |
|
Total operating expenses |
|
71,691 |
|
|
|
85,296 |
|
|
|
279,684 |
|
|
|
156,987 |
|
|
|
355,379 |
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
56,532 |
|
|
|
40,540 |
|
|
|
(155,938 |
) |
|
|
97,072 |
|
|
|
(108,729 |
) |
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
9,537 |
|
|
|
9,743 |
|
|
|
9,495 |
|
|
|
19,280 |
|
|
|
19,080 |
|
Other (expense) income,
net |
|
(1,445 |
) |
|
|
(152 |
) |
|
|
(484 |
) |
|
|
(1,597 |
) |
|
|
968 |
|
Income (loss) before income
taxes |
|
45,550 |
|
|
|
30,645 |
|
|
|
(165,917 |
) |
|
|
76,195 |
|
|
|
(126,841 |
) |
|
|
|
|
|
|
|
|
|
|
Provision for (benefit from)
income taxes |
|
10,979 |
|
|
|
3,217 |
|
|
|
(16,109 |
) |
|
|
14,196 |
|
|
|
(8,563 |
) |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
34,571 |
|
|
$ |
27,428 |
|
|
$ |
(149,808 |
) |
|
$ |
61,999 |
|
|
$ |
(118,278 |
) |
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per
share |
$ |
1.21 |
|
|
$ |
0.96 |
|
|
$ |
(5.13 |
) |
|
$ |
2.17 |
|
|
$ |
(4.06 |
) |
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per
share |
$ |
1.19 |
|
|
$ |
0.95 |
|
|
$ |
(5.13 |
) |
|
$ |
2.14 |
|
|
$ |
(4.06 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted average basic shares
outstanding |
|
28,609 |
|
|
|
28,451 |
|
|
|
29,210 |
|
|
|
28,526 |
|
|
|
29,164 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted
shares outstanding |
|
28,999 |
|
|
|
28,821 |
|
|
|
29,210 |
|
|
|
28,909 |
|
|
|
29,164 |
|
CMC MATERIALS, INC.CONSOLIDATED
CONDENSED BALANCE SHEETS(Unaudited and amounts in
thousands)
|
March 31, 2022 |
|
September 30, 2021 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
237,685 |
|
$ |
185,979 |
Accounts receivable, net |
|
169,345 |
|
|
150,099 |
Inventories |
|
184,730 |
|
|
173,464 |
Prepaid expenses and other current assets |
|
35,460 |
|
|
25,439 |
Total current assets |
|
627,220 |
|
|
534,981 |
|
|
|
|
Property, plant and equipment, net |
|
346,344 |
|
|
354,771 |
Other long-term assets |
|
1,227,042 |
|
|
1,261,133 |
Total assets |
$ |
2,200,606 |
|
$ |
2,150,885 |
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
55,540 |
|
$ |
52,748 |
Current portion of long-term debt |
|
10,650 |
|
|
13,313 |
Accrued expenses and other current liabilities |
|
132,738 |
|
|
139,797 |
Total current liabilities |
|
198,928 |
|
|
205,858 |
|
|
|
|
Long-term debt, net of current portion |
|
899,153 |
|
|
903,031 |
Other long-term liabilities |
|
158,444 |
|
|
163,059 |
Total liabilities |
|
1,256,525 |
|
|
1,271,948 |
|
|
|
|
Stockholders' equity |
|
944,081 |
|
|
878,937 |
Total liabilities and stockholders' equity |
$ |
2,200,606 |
|
$ |
2,150,885 |
CMC MATERIALS, INC.CONSOLIDATED
CONDENSED STATEMENTS OF CASH FLOWS(Unaudited and amounts
in thousands)
|
Six Months Ended March 31, |
|
|
2022 |
|
|
|
2021 |
|
Net cash provided by operating
activities |
$ |
110,207 |
|
|
$ |
123,508 |
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
Additions to property, plant and equipment |
|
(23,310 |
) |
|
|
(21,119 |
) |
Proceeds from the sale of assets |
|
10 |
|
|
|
363 |
|
Net cash used in investing
activities |
|
(23,300 |
) |
|
|
(20,756 |
) |
|
|
|
|
Cash flows from financing
activities: |
|
|
|
Dividends paid |
|
(26,524 |
) |
|
|
(26,115 |
) |
Proceeds from issuance of stock |
|
16,834 |
|
|
|
10,279 |
|
Repurchases of common stock under Share Repurchase Program |
|
(10,600 |
) |
|
|
(10,002 |
) |
Repurchases of common stock withheld for taxes |
|
(3,724 |
) |
|
|
(5,436 |
) |
Repayment of long-term debt |
|
(7,987 |
) |
|
|
(5,325 |
) |
Other financing activities |
|
(264 |
) |
|
|
(72 |
) |
Net cash used in financing
activities |
|
(32,265 |
) |
|
|
(36,671 |
) |
|
|
|
|
Effect of exchange rate
changes on cash |
|
(2,936 |
) |
|
|
1,401 |
|
Increase in cash and cash
equivalents |
|
51,706 |
|
|
|
67,482 |
|
Cash and cash equivalents at
beginning of period |
|
185,979 |
|
|
|
257,354 |
|
Cash and cash equivalents at
end of period |
$ |
237,685 |
|
|
$ |
324,836 |
|
CMC MATERIALS, INC.SEGMENT REVENUE AND
ADJUSTED EBITDA(Unaudited and amounts in thousands)
|
Three Months Ended March 31, |
|
Six Months Ended March 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Segment Revenue: |
|
|
|
|
|
|
|
Electronic Materials: |
|
|
|
|
|
|
|
CMP slurries |
$ |
146,540 |
|
|
$ |
140,194 |
|
|
$ |
292,681 |
|
|
$ |
274,915 |
|
Electronic chemicals |
|
95,111 |
|
|
|
80,098 |
|
|
|
186,250 |
|
|
|
160,104 |
|
CMP pads |
|
26,815 |
|
|
|
22,255 |
|
|
|
50,854 |
|
|
|
44,326 |
|
Materials technologies |
|
6,045 |
|
|
|
— |
|
|
|
12,377 |
|
|
|
— |
|
Total Electronic Materials |
|
274,511 |
|
|
|
242,547 |
|
|
|
542,162 |
|
|
|
479,345 |
|
|
|
|
|
|
|
|
|
Performance Materials: |
|
|
|
|
|
|
|
PIM |
|
30,394 |
|
|
|
25,987 |
|
|
|
57,029 |
|
|
|
51,894 |
|
Wood treatment |
|
10,907 |
|
|
|
15,546 |
|
|
|
25,865 |
|
|
|
32,869 |
|
QED |
|
8,315 |
|
|
|
6,448 |
|
|
|
16,117 |
|
|
|
14,283 |
|
Total Performance Materials |
|
49,616 |
|
|
|
47,981 |
|
|
|
99,011 |
|
|
|
99,046 |
|
|
|
|
|
|
|
|
|
Consolidated Revenue |
$ |
324,127 |
|
|
$ |
290,528 |
|
|
$ |
641,173 |
|
|
$ |
578,391 |
|
|
|
|
|
|
|
|
|
Segment adjusted EBITDA: |
|
|
|
|
|
|
|
Electronic
Materials |
$ |
93,957 |
|
|
$ |
81,315 |
|
|
$ |
182,039 |
|
|
$ |
162,071 |
|
Performance Materials |
|
13,901 |
|
|
|
18,750 |
|
|
|
28,902 |
|
|
|
41,725 |
|
Unallocated corporate expenses |
|
(11,542 |
) |
|
|
(15,261 |
) |
|
|
(22,738 |
) |
|
|
(27,436 |
) |
Consolidated adjusted EBITDA |
$ |
96,316 |
|
|
$ |
84,804 |
|
|
$ |
188,203 |
|
|
$ |
176,360 |
|
CMC MATERIALS, INC.Unaudited
Reconciliation of Certain GAAP Financial Measures to Certain
Non-GAAP Financial Measures (Unaudited and amounts in
thousands, except per share and percentage amounts)
Reconciliation of GAAP Net Income (Loss) to Non-GAAP
Adjusted Net Income and GAAP Diluted Earnings (Loss) Per Share to
Non-GAAP Adjusted Diluted Earnings Per Share |
|
Three Months Ended March 31, |
|
Six Months Ended March 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net income (loss) |
$ |
34,571 |
|
|
$ |
1.19 |
|
|
$ |
(149,808 |
) |
|
$ |
(5.13 |
) |
|
$ |
61,999 |
|
|
$ |
2.14 |
|
|
$ |
(118,278 |
) |
|
$ |
(4.06 |
) |
Amortization of acquisition
related intangibles |
|
19,618 |
|
|
|
0.68 |
|
|
|
19,695 |
|
|
|
0.67 |
|
|
|
39,263 |
|
|
|
1.36 |
|
|
|
39,896 |
|
|
|
1.35 |
|
Entegris Transaction-related expenses |
|
12,243 |
|
|
|
0.42 |
|
|
|
— |
|
|
|
— |
|
|
|
18,293 |
|
|
|
0.63 |
|
|
|
— |
|
|
|
— |
|
Impairment charges |
|
— |
|
|
|
— |
|
|
|
208,221 |
|
|
|
7.02 |
|
|
|
9,435 |
|
|
|
0.33 |
|
|
|
215,568 |
|
|
|
7.27 |
|
Future Forward-related expenses |
|
45 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,024 |
|
|
|
0.10 |
|
|
|
— |
|
|
|
— |
|
Net costs related to restructuring of wood treatment business |
|
219 |
|
|
|
0.01 |
|
|
|
46 |
|
|
|
— |
|
|
|
245 |
|
|
|
0.01 |
|
|
|
72 |
|
|
|
— |
|
Costs related to Pandemic, net of grants received |
|
— |
|
|
|
— |
|
|
|
(421 |
) |
|
|
(0.01 |
) |
|
|
— |
|
|
|
— |
|
|
|
841 |
|
|
|
0.03 |
|
Acquisition and integration-related expenses |
|
(540 |
) |
|
|
(0.02 |
) |
|
|
2,167 |
|
|
|
0.07 |
|
|
|
(233 |
) |
|
|
(0.01 |
) |
|
|
4,536 |
|
|
|
0.15 |
|
Costs related to KMG-Bernuth warehouse fire, net of recoveries |
|
(3,500 |
) |
|
|
(0.12 |
) |
|
|
(1,076 |
) |
|
|
(0.04 |
) |
|
|
(3,500 |
) |
|
|
(0.12 |
) |
|
|
(1,076 |
) |
|
|
(0.04 |
) |
Tax effect on adjustments to net income1 |
|
(6,291 |
) |
|
|
(0.22 |
) |
|
|
(28,109 |
) |
|
|
(0.95 |
) |
|
|
(12,789 |
) |
|
|
(0.44 |
) |
|
|
(34,057 |
) |
|
|
(1.15 |
) |
Adjustment for the dilutive
impact of securities |
|
|
|
— |
|
|
|
|
|
0.08 |
|
|
|
|
|
— |
|
|
|
|
|
0.08 |
|
Adjusted net income |
$ |
56,365 |
|
|
$ |
1.94 |
|
|
$ |
50,715 |
|
|
$ |
1.71 |
|
|
$ |
115,737 |
|
|
$ |
4.00 |
|
|
$ |
107,502 |
|
|
$ |
3.63 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted common shares
outstanding |
|
|
|
28,999 |
|
|
|
|
|
29,210 |
|
|
|
|
|
28,909 |
|
|
|
|
|
29,164 |
|
Effect of dilutive
securities |
|
|
|
— |
|
|
|
|
|
444 |
|
|
|
|
|
— |
|
|
|
|
|
458 |
|
Adjusted diluted common shares
outstanding |
|
|
|
28,999 |
|
|
|
|
|
29,654 |
|
|
|
|
|
28,909 |
|
|
|
|
|
29,622 |
|
Reconciliation of GAAP Revenue to Non-GAAP Adjusted Gross
Profit and Gross Margin |
|
Three Months Ended March 31, |
|
Six Months Ended March 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenue |
$ |
324,127 |
|
|
$ |
290,528 |
|
|
$ |
641,173 |
|
|
$ |
578,391 |
|
Cost of sales |
|
195,904 |
|
|
|
166,782 |
|
|
|
387,114 |
|
|
|
331,741 |
|
Gross profit |
$ |
128,223 |
|
|
$ |
123,746 |
|
|
$ |
254,059 |
|
|
$ |
246,650 |
|
Gross margin |
|
39.6 |
% |
|
|
42.6 |
% |
|
|
39.6 |
% |
|
|
42.6 |
% |
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
Amortization of acquisition related intangibles |
|
3,762 |
|
|
|
3,130 |
|
|
|
7,525 |
|
|
|
6,362 |
|
Future Forward-related expenses |
|
2 |
|
|
|
— |
|
|
|
971 |
|
|
|
— |
|
Net costs related to restructuring of wood treatment business |
|
219 |
|
|
|
46 |
|
|
|
245 |
|
|
|
72 |
|
Costs related to KMG-Bernuth warehouse fire, net of recoveries |
|
— |
|
|
|
(1,076 |
) |
|
|
— |
|
|
|
(1,076 |
) |
Costs related to the Pandemic, net of grants received |
|
— |
|
|
|
8 |
|
|
|
— |
|
|
|
1,184 |
|
Adjusted gross profit |
$ |
132,206 |
|
|
$ |
125,854 |
|
|
$ |
262,800 |
|
|
$ |
253,192 |
|
Adjusted gross margin |
|
40.8 |
% |
|
|
43.3 |
% |
|
|
41.0 |
% |
|
|
43.8 |
% |
Reconciliation of GAAP Operating expenses to Non-GAAP
Adjusted Operating expenses |
|
Three Months Ended March 31, |
|
Six Months Ended March 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Research, development and
technical |
$ |
12,337 |
|
|
$ |
12,925 |
|
|
$ |
25,665 |
|
|
$ |
25,353 |
|
Selling, general, and
administrative |
|
47,111 |
|
|
|
58,538 |
|
|
|
103,594 |
|
|
|
114,458 |
|
Impairment charges |
|
— |
|
|
|
208,221 |
|
|
|
9,435 |
|
|
|
215,568 |
|
Entegris Transaction-related
expenses |
|
12,243 |
|
|
|
— |
|
|
|
18,293 |
|
|
|
— |
|
Operating expenses |
$ |
71,691 |
|
|
$ |
279,684 |
|
|
$ |
156,987 |
|
|
$ |
355,379 |
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
Amortization of acquisition related intangibles2 |
|
(15,856 |
) |
|
|
(16,565 |
) |
|
|
(31,738 |
) |
|
|
(33,534 |
) |
Entegris Transaction-related expenses |
|
(12,243 |
) |
|
|
— |
|
|
|
(18,293 |
) |
|
|
— |
|
Impairment charges |
|
— |
|
|
|
(208,221 |
) |
|
|
(9,435 |
) |
|
|
(215,568 |
) |
Future Forward-related expenses2 |
|
(43 |
) |
|
|
— |
|
|
|
(2,053 |
) |
|
|
— |
|
Costs related to the Pandemic, net of grants received2 |
|
— |
|
|
|
429 |
|
|
|
— |
|
|
|
343 |
|
Acquisition and integration-related expenses2 |
|
540 |
|
|
|
(2,167 |
) |
|
|
233 |
|
|
|
(4,536 |
) |
Costs related to KMG-Bernuth warehouse fire, net of
recoveries2 |
|
3,500 |
|
|
|
— |
|
|
|
3,500 |
|
|
|
— |
|
Adjusted operating expenses |
$ |
47,589 |
|
|
$ |
53,160 |
|
|
$ |
99,201 |
|
|
$ |
102,084 |
|
Reconciliation of GAAP Net Income to Non-GAAP Adjusted
EBITDA and EBITDA Margin |
|
|
Three Months Ended March 31, |
|
Six Months Ended March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net income (loss) |
|
$ |
34,571 |
|
|
$ |
(149,808 |
) |
|
$ |
61,999 |
|
|
$ |
(118,278 |
) |
Interest expense, net |
|
|
9,537 |
|
|
|
9,495 |
|
|
|
19,280 |
|
|
|
19,080 |
|
Provision for income taxes |
|
|
10,979 |
|
|
|
(16,109 |
) |
|
|
14,196 |
|
|
|
(8,563 |
) |
Depreciation & amortization |
|
|
32,762 |
|
|
|
32,289 |
|
|
|
65,464 |
|
|
|
64,180 |
|
EBITDA |
|
|
87,849 |
|
|
|
(124,133 |
) |
|
|
160,939 |
|
|
|
(43,581 |
) |
EBITDA margin |
|
|
27.1 |
% |
|
|
(42.7 |
%) |
|
|
25.1 |
% |
|
|
(7.5 |
%) |
|
|
|
|
|
|
|
|
|
Adjustments (pre-tax): |
|
|
|
|
|
|
|
|
Entegris Transaction-related expenses |
|
|
12,243 |
|
|
|
— |
|
|
|
18,293 |
|
|
|
— |
|
Impairment charges |
|
|
— |
|
|
|
208,221 |
|
|
|
9,435 |
|
|
|
215,568 |
|
Future Forward-related expenses |
|
|
45 |
|
|
|
— |
|
|
|
3,024 |
|
|
|
— |
|
Net costs related to restructuring of wood treatment business |
|
|
219 |
|
|
|
46 |
|
|
|
245 |
|
|
|
72 |
|
Costs related to the Pandemic, net of grants received |
|
|
— |
|
|
|
(421 |
) |
|
|
— |
|
|
|
841 |
|
Acquisition and integration-related expenses |
|
|
(540 |
) |
|
|
2,167 |
|
|
|
(233 |
) |
|
|
4,536 |
|
Costs related to KMG-Bernuth warehouse fire, net of recoveries |
|
|
(3,500 |
) |
|
|
(1,076 |
) |
|
|
(3,500 |
) |
|
|
(1,076 |
) |
Adjusted EBITDA |
|
$ |
96,316 |
|
|
$ |
84,804 |
|
|
$ |
188,203 |
|
|
$ |
176,360 |
|
Adjusted EBITDA margin |
|
|
29.7 |
% |
|
|
29.2 |
% |
|
|
29.4 |
% |
|
|
30.5 |
% |
Fiscal Year 2022 Guidance
Reconciliation3 |
|
Fiscal Year 2022 |
|
Low |
|
High |
Net income |
$ |
107,000 |
|
|
$ |
131,000 |
|
Interest expense, net4 |
|
39,000 |
|
|
|
39,000 |
|
Provision for income taxes4 |
|
44,000 |
|
|
|
50,000 |
|
Depreciation4 |
|
53,000 |
|
|
|
53,000 |
|
Amortization |
|
85,000 |
|
|
|
85,000 |
|
EBITDA (Consolidated) |
$ |
328,000 |
|
|
$ |
358,000 |
|
Entegris Transaction-related expenses5 |
|
18,293 |
|
|
|
18,293 |
|
Impairment charges5 |
|
9,435 |
|
|
|
9,435 |
|
Future Forward-related expenses5 |
|
3,024 |
|
|
|
3,024 |
|
Net costs related to restructuring of wood treatment business5 |
|
245 |
|
|
|
245 |
|
Acquisition and integration-related expenses5 |
|
(233 |
) |
|
|
(233 |
) |
Costs related to KMG-Bernuth warehouse fire, net of
recoveries5 |
|
(3,500 |
) |
|
|
(3,500 |
) |
Adjusted EBITDA Guidance -
Consolidated |
$ |
355,264 |
|
|
$ |
385,264 |
|
1 Tax effect on the adjustments were calculated
using the U.S. Federal and state blended tax rate for the
respective periods as the related adjustments are mainly U.S.
driven. 2 Adjustment is related to the Selling, general and
administrative expenses.3 This is a reconciliation of our indicated
full year net income to our adjusted EBITDA. The amounts above may
not reflect certain future charges costs and/or gains that are
inherently difficult to predict and estimate due to their unknown
timing, effect and/or significance.4 Amounts represent the
mid-point of the financial guidance provided on May 4, 2022.5
Amounts represent actual Non-GAAP adjustments through the second
quarter of fiscal 2022.
CMC Materials (NASDAQ:CCMP)
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