Entegris, Inc. · NASDAQ:ENTG
Entegris — Q3 2023 Earnings Presentation
31 slides from Entegris's earnings presentation, Nov 2, 2023
Slide 1: Earnings Summary Third Quarter 2023
Earnings Summary Third Quarter 2023 November 2, 2023
Slide 2: Safe Harbor
Safe Harbor This presentation 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. Thes
Slide 3: Summary – Consolidated Statement of Operations (GAAP)
Summary – Consolidated Statement of Operations (GAAP) $ in millions, except per share data 3Q23 3Q22 2Q23 3Q23 over 3Q22 3Q23 over 2Q23 Net Revenue $888.2 $993.8 $901.0 (10.6%) (1.4%) Gross Margin 41.3% 37.4% 42.6% Operating Expenses $250.0 $356.8 $116.6 (29.9%) 114.4% Operating Income $117.1 $14.9
Slide 4: Summary – Consolidated Statement of Operations (Non-GAAP)
Summary – Consolidated Statement of Operations (Non-GAAP)1 $ in millions, except per share data 3Q23 3Q22 2Q23 3Q23 over 3Q22 3Q23 over 2Q23 Net Revenue $888.2 $993.8 $901.0 (10.6%) (1.4%) Adjusted Gross Margin – as a % of 41.4% 43.6% 42.6% Net Sales Non-GAAP Operating Expenses2 $172.1 $180.4 $183.2
Slide 5: Materials Solutions (MS)
Materials Solutions (MS)2 3Q23 Highlights 3Q23 over 3Q23 over $ in millions 3Q23 3Q22 2Q23 3Q22 2Q23 Sales decrease (SEQ) was driven primarily by lower volumes across certain product Net Revenue1 $435.5 $518.1 $440.7 (15.9%) (1.2%) lines, particularly in memory applications. Offset by strong growth
Slide 6: Microcontamination Control (MC)
Microcontamination Control (MC) 3Q23 Highlights 3Q23 over 3Q23 over $ in millions 3Q23 3Q22 2Q23 3Q22 2Q23 Net Revenue $286.2 $280.6 $283.6 2.0% 0.9% Sales increase (SEQ) was primarily driven by wet etch and clean liquid filtration and gas Segment Profit $101.1 $105.3 $100.7 (4.0%) 0.5% purification
Slide 7: Advanced Materials Handling (AMH)
Advanced Materials Handling (AMH) 3Q23 Highlights 3Q23 over 3Q23 over $ in millions 3Q23 3Q22 2Q23 3Q22 2Q23 Sales decline (SEQ) was driven primarily by Net Revenue $180.2 $210.4 $190.4 (14.3%) (5.3%) products more tied to WFE, like FOUPs. This was partially offset by growth in Segment Profit $31.6
Slide 8: Summary – Balance Sheet Items
Summary – Balance Sheet Items $ in millions 3Q23 3Q22 2Q23 $ Amount % Total $ Amount % Total $ Amount % Total Cash, Cash Equivalents & Restricted Cash $594.0 6.0% $754.7 7.4% $567.0 5.7% Accounts Receivable, net $463.1 4.7% $519.8 5.1% $436.0 4.4% Inventories $662.2 6.7% $823.6 8.1% $740.4 7.5% Net
Slide 9: Cash Flows
Cash Flows $ in millions 3Q23 3Q22 2Q23 Beginning Cash Balance $567.0 $2,743.2 $709.0 Cash provided by operating activities 200.0 145.5 127.0 Capital expenditures (78.1) (126.7) (116.1) Proceeds from revolving credit facilities and debt 100.3 2,810.4 — Payments on revolving credit facilities and deb
Slide 10: Outlook
Outlook GAAP $ in millions, except per share data 4Q23 Guidance 3Q23 Actual 2Q23 Actual Net Revenue $770 - $790 $888.2 $901.0 Operating Expenses $221 - $226 $250.0 $116.6 Net Income $37 - $45 $33.2 $197.6 Diluted Earnings per Common Share $0.25 - $0.30 $0.22 $1.31 Operating Margin 13% - 14% 13.2% 29
Slide 11: Trademarks
Entegris®, the Entegris Rings Design®, and other product names are trademarks of Entegris, Inc. as listed on entegris.com/trademarks. All product names, logos, and company names are trademarks or registered trademarks of their respective owners. Use of them does not imply any affiliation, sponsorshi
Slide 12: Appendix
Appendix Entegris
Slide 13: Consolidated Statement of Operations - Proforma (Includes CMC Materials results)
Summary - Consolidated Statement of Operations - Proforma1 (Includes CMC Materials results) $ in millions, except per share data 1Q22 2Q22 3Q22 4Q22 FY2022 1Q23 2Q23 3Q23 Net Revenue $969.1 $1,011.9 $993.8 $946.1 $3,920.9 $922.4 $901.0 $888.2 Gross Margin 45.2% 42.4% 37.4% 42.8% 41.9% 43.5% 42.6% 41
Slide 14: Consolidated Statement of Operations (Non-GAAP) - Proforma
Summary – Consolidated Statement of Operations (Non-GAAP) - Proforma 1 (Includes CMC Materials results) $ in millions, except per share data 1Q22 2Q22 3Q22 4Q22 FY2022 1Q23 2Q23 3Q23 Net Revenue2 $958.2 $1,011.7 $993.8 $946.1 $3,909.8 $922.4 $901.0 $888.2 Adjusted Gross Margin – as a % of Net 44.5%
Slide 15: Segment Financials Proforma (Includes CMC Materials results)
Segment Financials Proforma (Includes CMC Materials results) Unaudited¹ ² $ in millions 1Q22 2Q22 3Q22 4Q22 FY2022 1Q23 2Q23 3Q23 Sales : MS $520.5 $530.7 $518.1 $458.0 $2,027.3 $448.3 $440.7 $435.5 MC 266.6 274.1 280.6 284.7 1,106.0 269.3 283.6 286.2 AMH 198.1 224.1 210.4 213.9 846.5 218.9 190.4 18
Slide 16: Segment Financials Proforma Non-GAAP
Segment Financials Proforma Non-GAAP (Includes CMC Materials results) Unaudited¹ ² $ in millions 1Q22 2Q22 3Q22 4Q22 FY2022 1Q23 2Q23 3Q23 Sales : MS 3 $509.6 $530.5 $518.1 $458.0 $2,016.2 $448.3 $440.7 $435.5 MC 266.6 274.1 280.6 284.7 1,106.0 269.3 283.6 286.2 AMH 198.1 224.1 210.4 213.9 846.5 218
Slide 17: Reconciliation of GAAP Gross Profit to Adjusted Gross Profit
Reconciliation of GAAP Gross Profit to Adjusted Gross Profit Three months ended Nine months ended $ in millions September 30, 2023 October 1, 2022 July 1, 2023 September 30, 2023 October 1, 2022 Net sales $888.2 $993.8 $901.0 $2,711.6 $2,336.0 Gross profit-GAAP $367.1 $371.7 $384.2 $1,152.9 $991.9 A
Slide 18: GAAP Operating Expenses and Tax Rate to Non-GAAP
Reconciliation of GAAP Operating Expenses and Tax Rate to Non-GAAP Operating Expenses and Tax Rate Three months ended Nine months ended $ in millions September 30, 2023 October 1, 2022 July 1, 2023 September 30, 2023 October 1, 2022 GAAP operating expenses $250.0 $356.8 $116.6 $754.8 $655.7 Adjustme
Slide 19: GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA
Reconciliation of GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA $ in millions Three Months Ended Nine months ended September 30, 2023 October 1, 2022 July 1, 2023 September 30, 2023 October 1, 2022 Net sales $888.2 $993.8 $901.0 $2,711.6 $2,336.0 Net income (loss) 33.2 (73.7) 197.
Slide 20: GAAP Net Income and Diluted EPS to Non-GAAP
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 millions, except per share data Three months ended Nine months ended September 30, 2023 October 1, 2022 July 1, 2023 September 30, 2023 October 1, 2022 G
Slide 21: Reconciliation of GAAP Outlook to Non-GAAP Outlook
Reconciliation of GAAP Outlook to Non-GAAP Outlook $ in millions Fourth-Quarter Outlook Reconciliation GAAP operating expenses to non-GAAP operating expenses: December 31, 2023 GAAP operating expenses $221 - $226 Adjustments to net income: Deal, transaction and integration costs 5 Amortization of in
Slide 22: Reconciliation of GAAP Outlook to Non-GAAP Outlook (continued)
Reconciliation of GAAP Outlook to Non-GAAP Outlook (continued) $ in millions Fourth-Quarter Outlook Reconciliation GAAP Operating Margin to non-GAAP Operating Margin and Adjusted EBITDA Margin December 31, 2023 Net sales $770 - $790 GAAP - Operating income $102 - $114 Operating margin - as a % of ne
Slide 23: Proforma Segment Trend Data to Non-GAAP
Reconciliation of Proforma Segment Trend Data to Non-GAAP Unaudited¹ ² $ in millions Q122 Q222 Q322 Q422 FY 2022 Q123 Q223 Q323 Adjusted MS segment Sales: MS segment Sales $ 520.5 $ 530.7 $ 518.1 $ 458.0 $ 2,027.3 $ 448.3 $ 440.7 $ 435.5 Removal of wood treatment sales r * (10.9) (0.2) — — (11.1) —
Slide 24: Proforma Segment Trend Data to Non-GAAP (continued)
Reconciliation of Proforma Segment Trend Data to Non-GAAP Unaudited¹ ² (continued) $ in millions Q122 Q222 Q322 Q422 FY 2022 Q123 Q223 Q323 Adjusted Segment Profit : MS segment profit $141.1 $123.0 $53.1 $71.5 $388.7 ($29.5) $215.7 $57.0 Adjustments for wood treatment r * (7.4) 0.3 — — (7.1) — — — I
Slide 25: Proforma Segment Trend Data to Non-GAAP (continued)
Reconciliation of Proforma Segment Trend Data to Non-GAAP Unaudited¹ ² (continued) $ in millions Q122 Q222 Q322 Q422 FY 2022 Q123 Q223 Q323 Unallocated expenses $ 20.2 $ 17.6 $ 9.3 $ 7.3 $ 54.4 $ 43.6 $ 29.9 $ 21.4 Other adjustments j * 0.3 0.1 0.1 0.1 0.6 0.1 — (10.3) Deal, transaction & integratio
Slide 26: Proforma Net Sales and Gross Profit Reconciliation
Reconciliation of Proforma Net Sales to Proforma Non-GAAP Net Sales $ in millions Q122 Q222 Q322 Q422 FY 2022 Q123 Q223 Q323 Proforma net sales 1 $969.1 $1,011.9 $993.8 $946.1 $3,920.9 $922.4 $901.0 $888.2 Removal of Wood treatmentr * (10.9) (0.2) — — (11.1) — — — Proforma Non-GAAP net sales $958.2
Slide 27: Proforma Operating Expenses and Tax Rate to Non-GAAP
Reconciliation of Proforma Operating Expenses and Tax Rate to Proforma Non-GAAP Operating Expenses and Non-GAAP Tax Rate $ in millions Q122 Q222 Q322 Q422 FY 2022 Q123 Q223 Q323 Proforma Operating Expense 218.2 226.9 356.8 260.7 1,062.6 388.2 116.6 250.0 Goodwill impairment a * — — — — — 88.9 — 15.9
Slide 28: Proforma Net Income to Adjusted Operating Income and Adjusted EBITDA
Reconciliation of Proforma Net Income to Proforma Adjusted Operating Income and Adjusted EBITDA $ in millions Q122 Q222 Q322 Q422 FY 2022 Q123 Q223 Q323 Net sales $969.1 $1,011.9 $993.8 $946.1 $3,920.9 $922.4 $901.0 $888.2 Net income (loss) 160.3 140.1 (73.7) 57.5 284.1 (88.2) 197.6 33.2 Net income
Slide 29: Proforma Adjusted Operating Income Non-GAAP and Adjusted EBITDA
Reconciliation of Proforma Net Income to Proforma Adjusted Operating Income Non-GAAP and Adjusted EBITDA Non-GAAP $ in millions Q122 Q222 Q322 Q422 FY 2022 Q123 Q223 Q323 Proforma Operating Income $219.9 $201.9 $14.9 $143.8 $580.5 $13.5 $267.6 $117.1 Proforma Operating Income - as a % of proforma ne
Slide 30: Proforma Net Income and Diluted EPS to Non-GAAP
Reconciliation of Proforma Net Income and Diluted EPS to Proforma Non-GAAP Net Income and Diluted Non-GAAP EPS $ in millions, except per share data Q122 Q222 Q322 Q422 FY 2022 Q123 Q223 Q323 Proforma Net Income (Loss) $160.3 $140.1 ($73.7) $57.5 $284.1 ($88.2) $197.6 $33.2 Adjustments to Proforma Ne
Slide 31: Footnotes
Footnotes a. Non-cash impairment charges associated with goodwill. b. Non-recurring deal and transaction costs associated with the CMC Materials acquisition and completed and announced divestitures. c. Represents professional and vendor fees recorded in connection with services provided by consultan