Entegris, Inc. · NASDAQ:ENTG
Entegris — Q2 2017 Earnings Presentation
21 slides from Entegris's earnings presentation, Jul 27, 2017
Slide 1: Earnings Summary Second Quarter 2017
JULY 27, 2017 Earnings Summary Second Quarter 2017 Exhibit 99.2
Slide 2: Safe Harbor
2 SAFE HARBOR Certain information contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “should,” “may,” “will,”
Slide 3: 2Q17 and 1H17 Highlights
3 2Q17 AND 1H17 HIGHLIGHTS ◦ Achieved record second quarter sales of $329.0 million, up 9% from the prior year and up 4% from 1Q17 ◦ 1H17 sales of $646.4 million grew 13% from the prior year, reflecting strong growth in Asia, particularly in Korea ◦ Sales strength reflected robust demand for filtrat
Slide 4: Summary – Consolidated Statement of Operations (GAAP)
$ in millions, except per share data 2Q17 2Q17 Guidance 1Q17 2Q16 2Q17 over 2Q16 2Q17 over 1Q17 Net Revenue $329.0 $315 to $330 $317.4 $303.1 8.5% 3.7% Gross Margin 45.7% 44.0% 45.9% Operating Expenses $91.2 $90 to $92 $88.7 $92.8 (1.7%) 2.8% Operating Income $59.1 $50.9 $46.4 27.4% 16.1% Operating
Slide 5: Summary – Consolidated Statement of Operations (Non-GAAP)
$ in millions, except per share data 2Q17 2Q17 Guidance 1Q17 2Q16 2Q17 over 2Q16 2Q17 over 1Q17 Net Revenue $329.0 $315 to $330 $317.4 $303.1 8.5% 3.7% Adjusted Gross Margin2 46.3% 44.0% 45.9% Non-GAAP Operating Expenses3 $78.4 $79 to $81 $77.7 $81.7 (4.0%) 0.9% Adjusted Operating Income $73.8 $61.9
Slide 6: Summary – Consolidated Statement of Operations (GAAP) – Year to Date
$ in millions, except per share data 1H17 1H16 1H17 over 1H16 Net Revenue $646.4 $570.1 13.4% Gross Margin 44.8% 44.5% Operating Expenses $179.9 $178.0 1.1% Operating Income $110.0 $76.0 44.7% Operating Margin 17.0% 13.3% Tax Rate 21.7% 17.5% Net Income $72.5 $49.1 47.7% EPS $0.51 $0.35 45.7% 6 SUMM
Slide 7: Summary – Consolidated Statement of Operations (Non-GAAP) – Year to Date
$ in millions, except per share data 1H17 1H16 1H17 over 1H16 Net Revenue $646.4 $570.1 13.4% Adjusted Gross Margin2 45.2% 44.5% Non-GAAP Operating Expenses3 $156.2 $155.6 0.4% Adjusted Operating Income $135.7 $98.3 38.0% Adjusted Operating Margin 21.0% 17.2% Non-GAAP Tax Rate4 24.2% 21.8% Non-GAAP
Slide 8: Earnings Per Share
8 1. Represents diluted earnings per share. See Reconciliation of GAAP Net Income to Non-GAAP Earnings per Share in the appendix of this presentation. EARNINGS PER SHARE1 $0.23 $0.28 $0.28 $0.34 $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 $0.40 1Q17 2Q17 EPS: 2Q17 vs. 1Q17 GAAP Non-GAAP $0.80 $0
Slide 9: Results by Segment
RESULTS BY SEGMENT1 9 1. Adjusted segment operating margin excludes amortization of intangibles and unallocated expenses. 2. Segment profit for SCEM for 3Q16 includes a charge for severance of $699K. 3. Segment profit for MC for 3Q16 includes a charge for severance of $737K. Segment profit for MC fo
Slide 10: Revenue by Geography: Strong Growth in Asia and Europe
REVENUE BY GEOGRAPHY: STRONG GROWTH IN ASIA AND EUROPE 10 N. America Asia Japan Europe 1H17 Revenue by Geography 1H17 Revenue = $646.4 million 4% 21% -2% 13% N. America Asia Japan Europe -10% 0% 10% 20% 30% 1H17 vs. 1H16 Growth Rate $59.7M $374.9M $135.7M $76.1M
Slide 11: Summary – Balance Sheet Items
$ in millions 2Q17 1Q17 2Q16 $ Amount % Total $ Amount % Total $ Amount % Total Cash & Cash Equivalents $405.6 23.5% $391.2 23.1% $373.7 22.0% Accounts Receivable, net $171.1 9.9% $176.0 10.4% $180.6 10.7% Inventories $194.2 11.2% $188.3 11.1% $181.1 10.7% Net PP&E $341.1 19.7% $330.9 19.5% $322.7 1
Slide 12: Adjusted EBITDA Margin
12 1. See Reconciliation of GAAP Income to Adjusted Operating Income and Adjusted EBITDA in the appendix of this presentation. ADJUSTED EBITDA MARGIN1 23.2% 24.1% 0 50 100 150 200 250 300 TTM-1Q17 TTM-2Q17 Adjusted EBITDA TTM Adj. EBITDA in $M Adj. EBITDA as % of Sales $285M $302M 23.9% 26.8% 0 10 2
Slide 13: Cash Flows
$ in millions 2Q17 1Q17 2Q16 Beginning Cash Balance $391.2 $406.4 $344.4 Cash from operating activities $85.2 $33.4 $61.2 Capital expenditures ($20.3) ($22.2) ($14.3) Payments on long-term debt ($25.0) ($25.0) ($25.0) Acquisition of business ($20.0) - - Other investing activities - $0.2 $0.8 Other f
Slide 14: Outlook
OUTLOOK 14 1. Non-GAAP operating expenses exclude amortization. In 3Q17, amortization is estimated to be approximately $11 million, or $0.05 per share. $ in millions, except per share data 3Q17 Guidance 2Q17 3Q16 Net Revenue $325 to $340 $329.0 $296.7 Operating Expenses $90 to $92 $91.2 $88.3 Net In
Slide 15: Trademarks
Entegris®, the Entegris Rings Design™ and Pure Advantage™ are trademarks of Entegris, Inc. ©2016 Entegris, Inc. All rights reserved. 15
Slide 16: Reconciliation of GAAP Gross Profit to Adjusted Gross Profit
NON-GAAP RECONCILIATION TABLE RECONCILIATION OF GAAP GROSS PROFIT TO ADJUSTED GROSS PROFIT 16 Three months ended Six months ended July 1, 2017 July 2, 2016 April 1, 2017 July 1, 2017 July 2, 2016 Net Sales $329,002 $303,052 $317,377 $646,379 $570,076 Gross profit-GAAP $150,303 $139,205 $139,596 $289
Slide 17: Reconciliation of GAAP Segment Profit to Adjusted Operating Income
NON-GAAP RECONCILIATION TABLE RECONCILIATION OF GAAP SEGMENT PROFIT TO ADJUSTED OPERATING INCOME 17 Three months ended Six months ended Segment profit-GAAP July 1, 2017 July 2, 2016 April 1, 2017 July 1, 2017 July 2, 2016 Specialty Chemicals and Engineered Materials $34,174 $28,914 $28,140 $62,314 $
Slide 18: Reconciliation of GAAP to Adjusted Operating Income and Adjusted EBITDA
NON-GAAP RECONCILIATION TABLE RECONCILIATION OF GAAP TO ADJUSTED OPERATING INCOME AND ADJUSTED EBITDA 18 Three months ended Six months ended July 1, 2017 July 2, 2016 April 1, 2017 July 1, 2017 July 2, 2016 Net sales $329,002 $303,052 $317,377 $646,379 $570,076 Net income $39,991 $32,890 $32,514 $72
Slide 19: Reconciliation of GAAP to Non-GAAP Earnings Per Share
NON-GAAP RECONCILIATION TABLE RECONCILIATION OF GAAP TO NON-GAAP EARNINGS PER SHARE 19 Three months ended Six months ended July 1, 2017 July 2, 2016 April 1, 2017 July 1, 2017 July 2, 2016 GAAP net income $39,991 $32,890 $32,514 $72,505 $49,102 Adjustments to net income: Severance 559 - - 559 - Impa
Slide 20: GAAP Segment Trend Data
20 GAAP SEGMENT TREND DATA Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Sales SCEM 99,897$ 110,569$ 105,285$ 103,127$ 101,107$ 111,782$ 104,494$ 110,945$ 114,435$ 121,174$ MC 75,947 79,293 78,485 82,092 77,619 91,584 94,738 98,717 100,055 104,407 AMH 87,529 90,847 86,483 81,567 88,298 99,686 97
Slide 21: Non-GAAP Segment Trend Data
NON-GAAP SEGMENT TREND DATA 21 1 Adjusted segment profit for SCEM for Q316 excludes charges for severance of $699K. 2 Adjusted segment profit for MC for Q316 excludes charges for severance of $737K. Adjusted segment profit for MC for 2Q17 excludes charges for impairment of equipment and severance of