ENTG Entegris Inc

• Net sales (as reported) of $808 million, decreased 9% from prior year.
• Adjusted net sales (excluding the impact of divestitures) increased 7% from prior year.
• GAAP diluted EPS of $0.51.
• Non-GAAP diluted EPS of $0.77.

Entegris, Inc. (NASDAQ: ENTG), today reported its financial results for the Company’s third quarter ended September 28, 2024.

Bertrand Loy, Entegris’ president and chief executive officer, said: “The team delivered margins and non-GAAP EPS within our guidance range, despite third quarter sales coming in below expectations, with revenue growth excluding divestitures of 7 percent year-on-year.”

Mr. Loy added: “2024 is a transition year for the semiconductor industry. The market recovery is taking longer than anticipated and 2024 continues to be a year of limited technology transitions. Customers with significant exposure to AI applications are performing well, but the rest of the industry continues to be challenged. In this environment, we remain focused on maintaining strong profitability while continuing to fund critical investments that further improve our technology leadership and position us to benefit as market demand accelerates.”

“Looking ahead, we remain confident about the growth prospects for the semi industry and Entegris. The technology roadmaps continue to be opportunity-rich for Entegris as our customers drive for more complex device architectures and further miniaturization,” he said. “The resulting process complexity is making our expertise in materials science and materials purity increasingly valuable to our customers. This is expected to fuel our market outperformance and incremental content per wafer opportunities, as new nodes ramp in memory and advanced logic in the years to come.”

Quarterly Financial Results Summary

(in thousands, except percentages and per share data)

GAAP Results

Sep 28, 2024

Sep 30, 2023

Jun 29, 2024

Net sales

$807,694

$888,239

$812,652

Gross margin - as a % of net sales

46.0%

41.3%

46.2%

Operating margin - as a % of net sales

16.9%

13.2%

16.0%

Net income

$77,582

$33,212

$67,696

Diluted earnings per common share

$0.51

$0.22

$0.45

 

 

 

 

Non-GAAP Results

Sep 28, 2024

Sep 30, 2023

Jun 29, 2024

Adjusted gross margin - as a % of net sales

46.0%

41.4%

46.2%

Adjusted operating margin - as a % of net sales

23.0%

22.0%

22.0%

Adjusted EBITDA - as a % of net sales

28.8%

26.5%

27.8%

Diluted non-GAAP earnings per common share

$0.77

$0.68

$0.71

Fourth Quarter Outlook

For the Company’s guidance for the fourth quarter ending December 31, 2024, the Company expects sales of $810 million to $840 million. The midpoint of this guidance range represents an 8% year-on-year increase, excluding the impact of divestitures. GAAP net income of $75 million to $86 million and diluted earnings per common share is expected to be between $0.49 and $0.56. On a non-GAAP basis, the Company expects diluted earnings per common share to range from $0.75 to $0.82, reflecting net income on a non-GAAP basis in the range of $114 million to $125 million. The Company also expects adjusted EBITDA of approximately 28.5% to 29.5% of sales.

Segment Results

The Company currently 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.

On October 30, 2024, Entegris realigned its operating structure to combine the MC and AMH segments, resulting in two reportable segments: the MS segment and the combined MC / AMH segment. As the realignment occurred during the fourth fiscal quarter of 2024, Entegris has presented the results for its three reporting segments through Q3 2024. Beginning in the fourth quarter, Entegris will provide recasted financial information for the two segment structure.

Third-Quarter Results

Entegris will hold a conference call to discuss its results for the third quarter on Monday, November 4, 2024, at 9:00 a.m. Eastern Time. Participants should dial 800-579-2543 or +1 785-424-1789, referencing confirmation ID: ENTGQ324. 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 third 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

 

Sep 28, 2024

Sep 30, 2023

Jun 29, 2024

Net sales

$807,694

$888,239

$812,652

Cost of sales

435,869

521,165

436,833

Gross profit

371,825

367,074

375,819

Selling, general and administrative expenses

108,455

116,051

116,315

Engineering, research and development expenses

80,903

66,810

81,885

Amortization of intangible assets

46,226

51,239

47,513

Goodwill impairment

—

15,913

—

Operating income

136,241

117,061

130,106

Interest expense, net

50,419

75,594

52,527

Other (income) expense, net

(212)

10,243

2,977

Income before income tax expense (benefit)

86,034

31,224

74,602

Income tax expense (benefit)

8,190

(2,127)

6,689

Equity in net loss of affiliates

262

139

217

Net income

$77,582

$33,212

$67,696

 

 

 

 

 

 

 

Basic earnings per common share:

$0.51

$0.22

$0.45

Diluted earnings per common share:

$0.51

$0.22

$0.45

 

 

 

 

Weighted average shares outstanding:

 

 

 

Basic

151,196

150,127

150,801

Diluted

151,924

151,229

151,819

 

Entegris, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

 

Nine months ended

 

Sep 28, 2024

Sep 30, 2023

Net sales

$2,391,371

$2,711,635

Cost of sales

1,291,907

1,558,710

Gross profit

1,099,464

1,152,925

Selling, general and administrative expenses

336,963

431,514

Engineering, research and development expenses

234,664

209,746

Amortization of intangible assets

143,898

163,493

Goodwill impairment

—

104,785

Gain on termination of alliance agreement

—

(154,754)

Operating income

383,939

398,141

Interest expense, net

157,325

239,020

Other expense, net

17,050

13,309

Income before income tax expense

209,564

145,812

Income tax expense

18,335

2,851

Equity in net loss of affiliates

685

269

Net income

$190,544

$142,692

 

 

 

 

 

Basic earnings per common share:

$1.26

$0.95

Diluted earnings per common share:

$1.26

$0.95

 

 

 

Weighted average shares outstanding:

 

 

Basic

150,849

149,793

Diluted

151,820

150,816

 

Entegris, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

 

Sep 28, 2024

Dec 31, 2023

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$432,072

$456,929

Trade accounts and notes receivable, net

503,165

457,052

Inventories, net

643,034

607,051

Deferred tax charges and refundable income taxes

26,941

63,879

Assets held-for-sale

7,004

278,753

Other current assets

102,873

113,663

Total current assets

1,715,089

1,977,327

Property, plant and equipment, net

1,542,356

1,468,043

Right-of-use assets

84,788

80,399

Goodwill

3,946,575

3,945,860

Intangible assets, net

1,138,630

1,281,969

Deferred tax assets and other noncurrent tax assets

20,340

31,432

Other assets

24,979

27,561

Total assets

$8,472,757

$8,812,591

LIABILITIES AND EQUITY

 

Current liabilities

 

 

Current portion of long-term debt

65,000

—

Accounts payable

174,189

134,211

Accrued liabilities

302,336

283,158

Liabilities held-for-sale

925

19,223

Income tax payable

44,241

77,403

Total current liabilities

586,691

513,995

Long-term debt

4,060,690

4,577,141

Long-term lease liabilities

73,017

68,986

Other liabilities

159,849

243,875

Shareholders’ equity

3,592,510

3,408,594

Total liabilities and equity

$8,472,757

$8,812,591

 

Entegris, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

Three months ended

Nine months ended

 

Sep 28, 2024

Sep 30, 2023

Sep 28, 2024

Sep 30, 2023

Operating activities:

 

 

 

 

Net income

$77,582

$33,212

$190,544

$142,692

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

 

 

 

 

Depreciation

47,098

39,631

139,848

130,125

Amortization

46,226

51,239

143,898

163,493

Share-based compensation expense

15,552

10,280

50,349

52,416

Provision for deferred income taxes

(22,979)

(28,552)

(47,067)

(95,366)

Loss on extinguishment of debt

—

3,593

11,385

10,862

Impairment of goodwill

—

15,913

—

104,785

Gain on termination of alliance agreement

—

—

—

(154,754)

(Gain) loss from sale of businesses and held-for-sale assets, net

—

—

(4,311)

28,579

Other

10,531

18,309

58,795

67,833

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

 

 

 

 

Trade accounts and notes receivable

(40,167)

(18,236)

(52,075)

(295)

Inventories

(18,213)

68,349

(68,872)

63,340

Accounts payable and accrued liabilities

95,197

27,940

52,563

11,804

Income taxes payable, refundable income taxes and noncurrent taxes payable

(6,785)

(21,204)

(23,708)

(36,774)

Other

(6,815)

(451)

4,276

(2,369)

Net cash provided by operating activities

197,227

200,023

455,625

486,371

Investing activities:

 

 

 

 

Acquisition of property and equipment

(82,193)

(78,139)

(208,082)

(328,182)

Proceeds, net from sale of businesses

1,189

—

250,789

134,286

Proceeds from termination of alliance agreement

—

—

—

169,251

Other

42

1,553

(1,875)

1,919

Net cash (used in) provided by investing activities

(80,962)

(76,586)

40,832

(22,726)

Financing activities:

 

 

 

 

Proceeds from debt

—

100,279

254,537

217,449

Payments of debt

—

(175,279)

(728,311)

(603,950)

Payments for debt issuance costs

—

—

—

(3,475)

Payments for dividends

(15,123)

(15,052)

(45,478)

(45,202)

Issuance of common stock

3,150

866

13,617

30,174

Taxes paid related to net share settlement of equity awards

(840)

(1,894)

(16,146)

(11,540)

Other

(913)

(345)

(1,815)

(923)

Net cash used in financing activities

(13,726)

(91,425)

(523,596)

(417,467)

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

9,525

(5,009)

2,282

(15,597)

Increase (decrease) in cash, cash equivalents and restricted cash

112,064

27,003

(24,857)

30,581

Cash, cash equivalents and restricted cash at beginning of period

320,008

567,017

456,929

563,439

Cash, cash equivalents and restricted cash at end of period

$432,072

$594,020

$432,072

$594,020

 

Entegris, Inc. and Subsidiaries

Segment Information

(In thousands)

(Unaudited)

 

 

Three months ended

Nine months ended

Net sales

Sep 28, 2024

Sep 30, 2023

Jun 29, 2024

Sep 28, 2024

Sep 30, 2023

Materials Solutions

$346,634

$435,538

$342,333

$1,039,003

$1,324,502

Microcontamination Control

286,995

286,217

293,769

848,628

839,128

Advanced Materials Handling

182,177

180,248

188,225

533,256

589,457

Inter-segment elimination

(8,112)

(13,764)

(11,675)

(29,516)

(41,452)

Total net sales

$807,694

$888,239

$812,652

$2,391,371

$2,711,635

 

Three months ended

Nine months ended

Segment profit

Sep 28, 2024

Sep 30, 2023

Jun 29, 2024

Sep 28, 2024

Sep 30, 2023

Materials Solutions

$71,706

$56,955

$70,268

$209,098

$243,171

Microcontamination Control

96,704

101,132

93,709

276,968

297,790

Advanced Materials Handling

30,611

31,642

28,980

84,197

115,637

Total segment profit

199,021

189,729

192,957

570,263

656,598

Amortization of intangibles

(46,226)

(51,239)

(47,513)

(143,898)

(163,493)

Unallocated expenses

(16,554)

(21,429)

(15,338)

(42,426)

(94,964)

Total operating income

$136,241

$117,061

$130,106

$383,939

$398,141

 

Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Gross Profit to Adjusted Gross Profit

(In thousands)

 

 

Three months ended

Nine months ended

 

Sep 28, 2024

Sep 30, 2023

Jun 29, 2024

Sep 28, 2024

Sep 30, 2023

Net Sales

$807,694

$888,239

$812,652

$2,391,371

$2,711,635

Gross profit-GAAP

$371,825

$367,074

$375,819

$1,099,464

$1,152,925

Adjustments to gross profit:

 

 

 

 

 

Restructuring costs 1

—

789

—

—

8,166

Adjusted gross profit

$371,825

$367,863

$375,819

$1,099,464

$1,161,091

 

 

 

 

 

 

Gross margin - as a % of net sales

46.0%

41.3%

46.2%

46.0%

42.5%

Adjusted gross margin - as a % of net sales

46.0%

41.4%

46.2%

46.0%

42.8%

 

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

Nine months ended

Adjusted segment profit

Sep 28, 2024

Sep 30, 2023

Jun 29, 2024

Sep 28, 2024

Sep 30, 2023

MS segment profit

$71,706

$56,955

$70,268

$209,098

$243,171

Restructuring costs 1

—

519

—

—

7,627

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

—

—

537

(4,311)

28,578

Goodwill impairment 3

—

15,913

—

—

104,785

Gain on termination of alliance agreement 4

—

—

—

—

(154,754)

Impairment on long-lived assets 5

—

—

—

12,967

—

MS adjusted segment profit

$71,706

$73,387

$70,805

$217,754

$229,407

 

 

 

 

 

 

MC segment profit

$96,704

$101,132

$93,709

$276,968

$297,790

Restructuring costs 1

—

215

—

—

3,010

MC adjusted segment profit

$96,704

$101,347

$93,709

$276,968

$300,800

 

 

 

 

 

 

AMH segment profit

$30,611

$31,642

$28,980

$84,197

$115,637

Restructuring costs 1

—

467

—

—

1,721

AMH adjusted segment profit

$30,611

$32,109

$28,980

$84,197

$117,358

 

 

 

 

 

 

Unallocated general and administrative expenses

$16,554

$21,429

$15,338

$42,426

$94,964

Less: unallocated deal and integration costs

(426)

(10,301)

(724)

(3,368)

(48,717)

Less: unallocated restructuring costs 1

—

—

—

—

(86)

Less: unallocated acquired tax equalization asset reduction 6

(2,959)

—

—

(2,959)

—

Adjusted unallocated general and administrative expenses

$13,169

$11,128

$14,614

$36,099

$46,161

 

 

 

 

 

 

Total adjusted segment profit

$199,021

$206,843

$193,494

$578,919

$647,565

Less: adjusted unallocated general and administrative expenses

(13,169)

(11,128)

(14,614)

(36,099)

(46,161)

Total adjusted operating income

$185,852

$195,715

$178,880

$542,820

$601,404

 

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.

6 Represents an asset reduction of an acquired tax equalization asset from the CMC Materials acquisition.

 

Entegris, Inc. and Subsidiaries

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

(In thousands)

(Unaudited)

 

 

Three months ended

Nine months ended

 

Sep 28, 2024

Sep 30, 2023

Jun 29, 2024

Sep 28, 2024

Sep 30, 2023

Net sales

$807,694

$888,239

$812,652

$2,391,371

$2,711,635

Net income

$77,582

$33,212

$67,696

$190,544

$142,692

Net income - as a % of net sales

9.6%

3.7%

8.3%

8.0%

5.3%

Adjustments to net income:

 

 

 

 

 

Equity in net loss of affiliates

262

139

217

685

269

Income tax expense (benefit)

8,190

(2,127)

6,689

18,335

2,851

Interest expense, net

50,419

75,594

52,527

157,325

239,020

Other (income) expense, net

(212)

10,243

2,977

17,050

13,309

GAAP - Operating income

136,241

117,061

130,106

383,939

398,141

Operating margin - as a % of net sales

16.9%

13.2%

16.0%

16.1%

14.7%

Goodwill impairment 1

—

15,913

—

—

104,785

Deal and transaction costs 2

—

—

—

—

3,001

Integration costs:

 

 

 

 

 

Professional fees 3

287

6,756

147

2,574

32,068

Severance costs 4

139

(454)

577

794

1,873

Retention costs 5

—

45

—

—

1,687

Other costs 6

—

3,953

—

—

10,087

Restructuring costs 7

—

1,202

—

—

12,444

Acquired tax equalization asset reduction 8

2,959

—

—

2,959

—

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

—

—

537

(4,311)

28,579

Gain on termination of alliance agreement 10

—

—

—

—

(154,754)

Impairment of long-lived assets 11

—

—

—

12,967

—

Amortization of intangible assets 12

46,226

51,239

47,513

143,898

163,493

Adjusted operating income

185,852

195,715

178,880

542,820

601,404

Adjusted operating margin - as a % of net sales

23.0%

22.0%

22.0%

22.7%

22.2%

Depreciation

47,098

39,631

47,407

139,848

130,125

Adjusted EBITDA

$232,950

$235,346

$226,287

$682,668

$731,529

Adjusted EBITDA - as a % of net sales

28.8%

26.5%

27.8%

28.5%

27.0%

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 Represents an asset reduction of an acquired tax equalization asset from the CMC Materials acquisition.

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 Impairment of long-lived assets.

12 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

Nine months ended

 

Sep 28, 2024

Sep 30, 2023

Jun 29, 2024

Sep 28, 2024

Sep 30, 2023

GAAP net income

$77,582

$33,212

$67,696

$190,544

$142,692

Adjustments to net income:

 

 

 

 

 

Goodwill impairment 1

—

15,913

—

—

104,785

Deal and transaction costs 2

—

—

—

—

3,001

Integration costs:

 

 

 

 

 

Professional fees 3

287

6,756

147

2,574

32,068

Severance costs 4

139

(454)

577

794

1,873

Retention costs 5

—

45

—

—

1,687

Other costs 6

—

3,953

—

—

10,087

Restructuring costs 7

—

1,202

—

—

12,444

Acquired tax equalization asset reduction 8

2,959

—

—

2,959

—

Loss on extinguishment of debt and modification 9

—

4,532

796

12,347

12,893

Loss (gain) on sale of businesses and held-for-sale assets, net 10

—

—

537

(4,311)

28,579

Gain on termination of alliance agreement 11

—

—

—

—

(154,754)

Infineum termination fee, net 12

—

—

—

—

(10,877)

Impairment of long-lived assets 13

—

—

—

12,967

—

Amortization of intangible assets 14

46,226

51,239

47,513

143,898

163,493

Tax effect of adjustments to net income and discrete tax items 15

(9,611)

(12,810)

(10,157)

(33,309)

(46,996)

Non-GAAP net income

$117,582

$103,588

$107,109

$328,463

$300,975

 

 

 

 

 

 

Diluted earnings per common share

$0.51

$0.22

$0.45

$1.26

$0.95

Effect of adjustments to net income

$0.26

$0.46

$0.26

$0.91

$1.05

Diluted non-GAAP earnings per common share

$0.77

$0.68

$0.71

$2.16

$2.00

 

 

 

 

 

 

Diluted weighted averages shares outstanding

151,924

151,229

151,819

151,820

150,816

Diluted non-GAAP weighted average shares outstanding

151,924

151,229

151,819

151,820

150,816

 

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 Represents an asset reduction of an acquired tax equalization asset from the CMC Materials acquisition.

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

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

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

12 Non-recurring gain from Infineum termination fee.

13 Impairment of long-lived assets.

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

15 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

Nine months ended

 

Sep 28, 2024

Sep 30, 2023

Jun 29, 2024

Sep 28, 2024

Sep 30, 2023

Net sales

$807,694

$888,239

$812,652

$2,391,371

$2,711,635

Less: divestitures 1

—

(132,250)

—

(33,907)

(411,513)

Adjusted Net sales (excluding divestitures) Non-GAAP

$807,694

$755,989

$812,652

$2,357,464

$2,300,122

 

1 Adjusted for the 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)

 

 

Fourth Quarter Outlook

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

December 31, 2024

Net sales

$810 - $840

GAAP - Operating income

$136 - $154

Operating margin - as a % of net sales

16.8% - 18.4%

Amortization of intangible assets

46

Adjusted operating income

$183 - $201

Adjusted operating margin - as a % of net sales

22.5% - 23.9%

Depreciation

48

Adjusted EBITDA

$231- $248

Adjusted EBITDA - as a % of net sales

28.5% - 29.5%

 

 

Fourth Quarter Outlook

Reconciliation GAAP net income to non-GAAP net income

December 31, 2024

GAAP net income

$75 - $86

Adjustments to net income:

 

Amortization of intangible assets

46

Income tax effect

(7)

Non-GAAP net income

$114 - $125

 

 

Fourth Quarter Outlook

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

December 31, 2024

Diluted earnings per common share

$0.49 - $0.56

Adjustments to diluted earnings per common share:

 

Amortization of intangible assets

0.30

Income tax effect

(0.04)

Diluted non-GAAP earnings per common share

$0.75 - $0.82

 

 

*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/20241104390625/en/

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