Entegris, Inc. · NASDAQ:ENTG
Entegris — Q3 2017 Earnings Presentation
21 slides from Entegris's earnings presentation, Oct 26, 2017
Slide 1: Earnings Summary Third Quarter 2017
OCTOBER 26, 2017 Earnings Summary Third Quarter 2017
Slide 2: Safe Harbor
2 SAFE HARBOR This document contains 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,” “would” or the negative thereof and similar
Slide 3: 3Q17 and Year-to-Date Highlights
3 3Q17 AND YEAR-TO-DATE HIGHLIGHTS ◦ 3Q17 sales grew 16% from a year ago and 5% sequentially, reflecting strong performance of both our new products and legacy offerings; ◦ Specialty Chemicals and Engineered Materials sales grew 19% from a year ago to a record level ◦ Microcontamination Control sale
Slide 4: Summary – Consolidated Statement of Operations (GAAP)
$ in millions, except per share data 3Q17 3Q17 Guidance 2Q17 3Q16 3Q17 over 3Q16 3Q17 over 2Q17 Net Revenue $345.6 $325 to $340 $329.0 $296.7 16.5% 5.0% Gross Margin 45.0% 45.7% 41.5% Operating Expenses $94.8 $90 to $92 $91.2 $88.3 7.4% 3.9% Operating Income $60.7 $59.1 $34.7 74.9% 2.7% Operating Ma
Slide 5: Summary – Consolidated Statement of Operations (Non-GAAP)
$ in millions, except per share data 3Q17 3Q17 Guidance 2Q17 3Q16 3Q17 over 3Q16 3Q17 over 2Q17 Net Revenue $345.6 $325 to $340 $329.0 $296.7 16.5% 5.0% Adjusted Gross Margin2 46.2% 46.3% 43.6% Non-GAAP Operating Expenses3 $78.4 $79 to $81 $78.4 $75.4 4.0% 0% Adjusted Operating Income $81.1 $73.8 $5
Slide 6: Summary – Consolidated Statement of Operations (GAAP) – Year to Date
$ in millions, except per share data Nine Months Ended September 30, 2017 Nine Months Ended October 1, 2016 Year-over-Year Net Revenue $992.0 $866.8 14.4% Gross Margin 44.9% 43.5% Operating Expenses $274.6 $266.3 3.1% Operating Income $170.7 $110.6 54.3% Operating Margin 17.2% 12.8% Tax Rate 20.6% 1
Slide 7: Summary – Consolidated Statement of Operations (Non-GAAP) – Year to Date
$ in millions, except per share data Nine Months Ended September 30, 2017 Nine Months Ended October 1, 2016 Year-over-Year Net Revenue $992.0 $866.8 14.4% Gross Margin 45.5% 44.2% Operating Expenses $234.6 $231.0 1.6% Operating Income $216.8 $152.2 42.4% Operating Margin 21.9% 17.6% Tax Rate 23.5% 2
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 $0.15 $0.28 $0.24 $0.40 $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 $0.40 $0.45 3Q16 3Q17 EPS: 3Q17 vs. 3Q16 GAAP Non-GAAP $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 and 3Q17 includes a charge for severance of $699K and $14K, respectively. 3. Segment profit for MC for 3Q16 and Q317 includes a charge for sev
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 YTD17 Revenue by Geography YTD Revenue = $992.0 million 11% 19% 2% 13% N. America Asia Japan Europe 0% 5% 10% 15% 20% 25% YTD17 vs. YTD16 Growth Rate $89.0M $571.0M $212.1M $119.9M
Slide 11: Summary – Balance Sheet Items
$ in millions 3Q17 2Q17 3Q16 $ Amount % Total $ Amount % Total $ Amount % Total Cash & Cash Equivalents $435.2 24.8% $405.6 23.5% $411.8 24.0% Accounts Receivable, net $183.4 10.4% $171.1 9.9% $167.6 9.8% Inventories $193.3 11.0% $194.2 11.2% $186.0 10.9% Net PP&E $346.7 19.7% $341.1 19.7% $315.5 18
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 $245 $33021.6% 25.4% 0 50 100 150 200 250 300 350 TTM -3Q16 TTM-3Q17 Adjusted EBITDA TTM Adj. EBITDA in $M Adj. EBITDA as % of Sales $68 $70 $76 $88
Slide 13: Cash Flows
$ in millions 3Q17 2Q17 3Q16 Beginning Cash Balance $405.6 $391.2 $373.7 Cash from operating activities $89.0 $85.2 $71.9 Capital expenditures ($25.4) ($20.3) ($13.1) Acquisition of business - ($20.0) - Payments on long-term debt ($25.0) ($25.0) ($25.0) Repurchase and retirement of common stock ($10
Slide 14: Outlook
OUTLOOK 14 1. Non-GAAP operating expenses exclude amortization. In 4Q17, amortization is estimated to be approximately $11 million, or $0.05 per share. $ in millions, except per share data 4Q17 Guidance 3Q17 Actual 4Q16 Actual Net Revenue $335 to $345 $345.6 $308.5 Operating Expenses $90 to $92 $94.
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 Nine months ended September 30, 2017 October 1, 2016 July 1, 2017 September 30, 2017 October 1, 2016 Net Sales $345,591 $296,692 $329,002 $991,970 $866,768 Gross profit-GAAP $155,407 $122
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 Nine months ended Segment profit-GAAP September 30, 2017 October 1, 2016 July 1, 2017 September 30, 2017 October 1, 2016 Specialty Chemicals and Engineered Materials $34,647 $18,811
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 Nine months ended September 30, 2017 October 1, 2016 July 1, 2017 September 30, 2017 October 1, 2016 Net sales $345,591 $296,692 $329,002 $991,970 $866,768 Net income $40,902 $
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 Nine months ended September 30, 2017 October 1, 2016 July 1, 2017 September 30, 2017 October 1, 2016 GAAP net income $40,902 $21,947 $39,991 $113,407 $71,049 Adjustments to net income: Severance
Slide 20: GAAP Segment Trend Data
20 GAAP SEGMENT TREND DATA Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Sales SCEM 99,897$ 110,569$ 105,285$ 103,127$ 101,107$ 111,782$ 104,494$ 110,945$ 114,435$ 121,174$ 124,522$ MC 75,947 79,293 78,485 82,092 77,619 91,584 94,738 98,717 100,055 104,407 116,113 AMH 87,529 90,847 86,483 8
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. Adjusted segment profit for SCEM for Q317 excludes charges for severance of $14K. 2. Adjusted segment profit for MC for Q316 excludes charges for severance of $737K. Adjusted segment