Entegris Reports Financial Results for Second Quarter of Fiscal 2013

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| Source: Entegris, Inc.
  • Revenue of $177.5 million, up 8 percent sequentially
  • GAAP net income of $19.8 million, or $0.14 per share; Non-GAAP net income of $21.3 million, or $0.15 per share
  • Operating margin of 14.9 percent; Adjusted operating margin of 16.2 percent
  • Net cash generated from operations of $34.8 million

BILLERICA, Mass., July 23, 2013 (GLOBE NEWSWIRE) -- Entegris, Inc. (Nasdaq:ENTG) today reported its financial results for the Company's second quarter ended June 29, 2013.

The Company recorded second-quarter sales of $177.5 million, an increase of 8 percent sequentially, and a 6 percent decline from the prior year second quarter. Second-quarter operating margin was 14.9 percent, with an adjusted operating margin of 16.2 percent, excluding amortization of intangible assets of $2.4 million. Net income for the second quarter was $19.8 million, or $0.14 per share. Non-GAAP earnings per share of $0.15 in the second quarter of 2013 compared to $0.13 in the first quarter of 2013 and $0.16 in the second quarter of 2012. A reconciliation table of GAAP to non-GAAP earnings per share and operating margin is contained in this press release.

For the first half of fiscal 2013, sales were $342.6 million, down 6 percent from the first half of 2012. Net income for the first half of 2013 was $36.2 million, or $0.26 per share, compared to $39.5 million, or $0.29 per share, for the same period a year ago. Non-GAAP earnings per share for the first six months of 2013 were $0.28 per share versus $0.30 per share a year ago.

Bertrand Loy, president and chief executive officer, said: "The second-quarter sales were stronger than expected as semiconductor makers continued to ramp production on their most advanced fabs. Sales of our Contamination Control Solutions products increased 10 percent sequentially, driven primarily by a record quarter for liquid filter products and higher sales of fluid handling components and gas purification products. Sales of Microenvironment products grew 4 percent, and sales of Specialty Materials products were even with the first quarter levels.

"We are pleased with the operating results which exceeded our target model. We generated strong cash flow from operations in the quarter, and we are deploying our cash consistent with our strategy to achieve our goal of both driving above-market growth and creating long-term shareholder value.

"We are very optimistic about the long-term growth of the semiconductor industry. However, in the short term we are seeing mixed signs in the market," said Loy.

For the fiscal third quarter ending September 28, 2013, the Company expects sales to be approximately $165 million to $180 million, and EPS to range between $0.10 and $0.13 per share. On a non-GAAP basis, EPS is expected to range from $0.11 to $0.14 per share, which reflects net income on a non-GAAP basis in the range of $15 million to $20 million, which is adjusted for expected amortization expense of $2.4 million or $0.01 per share.

Second-Quarter Results Conference Call Details

Entegris will hold a conference call to discuss its results for the second quarter on Tuesday, July 23, 2013, at 10:00 a.m. Eastern Time. Participants should dial 719-457-2645 or toll-free 888-359-3624, referencing confirmation code 6232027. Participants are asked to dial in 5 to 10 minutes prior to the start of the call. A replay of the call will be available starting July 23 at 1:00 p.m. (ET) until September 5, 2013. The replay can be accessed by using passcode 6232027 after dialing 719-457-0820 or 888-203-1112. A live and on-demand webcast of the call can also be accessed from the investor relations section of Entegris' website at www.entegris.com.

About Entegris

Entegris is a leading provider of a wide range of products for purifying, protecting and transporting critical materials used in processing and manufacturing in the semiconductor and other high-technology industries. Entegris is ISO 9001 certified and has manufacturing, customer service and/or research facilities in the United States, China, France, Germany, Israel, Japan, Malaysia, Singapore, South Korea and Taiwan. Additional information can be found at www.entegris.com.

Non-GAAP Information

The Company's consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (GAAP). Adjusted EBITDA and Adjusted Operating Income together with related measures thereof, and non-GAAP EPS, are considered "Non-GAAP financial measures" under the rules and regulations of the SEC. These financial measures are provided as a complement to financial measures provided in accordance with GAAP. We provide non-GAAP financial measures in order to better assess and reflect operating performance. Management believes the non-GAAP measures help indicate our baseline performance before certain gains, losses or other charges that may not be indicative of our business or future outlook. We believe these non-GAAP measures will aid investors' overall understanding of our results by providing a higher degree of transparency for certain expenses and providing a level of disclosure that will help investors understand how we plan and measure our business. The presentation of non-GAAP measures is not meant to be considered in isolation, as a substitute for, or superior to, financial measures or information provided in accordance with GAAP. The calculations of Adjusted EBITDA margin, Adjusted Operating Income, and non-GAAP EPS are included elsewhere in this release.

Forward-Looking Statements

Certain information contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current management expectations only as of the date of this press release, and involve substantial risks and uncertainties that could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. Statements that include such words as "anticipate," "believe," "estimate," "expect," "forecast," "may," "will," "should" or the negative thereof and similar expressions as they relate to Entegris or our management are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. These risks include, but are not limited to, fluctuations in the market price of Entegris' stock, Entegris' future operating results, other acquisition and investment opportunities available to Entegris, general business and market conditions and other factors. Additional information concerning these and other risk factors may be found in previous financial press releases issued by Entegris and Entegris' periodic public filings with the Securities and Exchange Commission, including discussions appearing under the headings "Risks Relating to our Business and Industry," "Manufacturing Risks," "International Risks," and "Risks Related to Owning Our Securities" in Item 1A of our Annual Report on Form 10–K for the fiscal year ended December 31, 2012, as well as other matters and important factors disclosed previously and from time to time in the filings of Entegris with the U.S. Securities and Exchange Commission. Except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission, we undertake no obligation to update publicly any forward-looking statements contained herein.

 
 
Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
 
  Three months ended
  June 29, 2013 June 30, 2012 March 30, 2013
Net sales $177,544 $188,233 $165,070
Cost of sales 99,974 105,487 97,942
Gross profit 77,570 82,746 67,128
Selling, general and administrative expenses 35,397 35,989 32,421
Engineering, research and development expenses 13,427 12,726 12,173
Amortization of intangible assets 2,359 2,420 2,287
Operating income  26,387 31,611 20,247
Other income, net (910) (641) (1,348)
Income before income taxes 27,297 32,252 21,595
Income tax expense  7,516 10,579 5,198
Net income  $19,781 $21,673 $16,397
       
       
Basic net income per common share: $0.14 $0.16 $0.12
Diluted net income per common share: $0.14 $0.16 $0.12
       
Weighted average shares outstanding:      
Basic 139,255 137,303 139,025
Diluted 139,751 138,196 139,831
 
 
Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
 
  Six months ended
  June 29, 2013 June 30, 2012
Net sales $342,614 $363,636
Cost of sales 197,916 204,646
Gross profit 144,698 158,990
Selling, general and administrative expenses 67,818 71,037
Engineering, research and development expenses 25,600 24,715
Amortization of intangible assets 4,646 4,870
Operating income  46,634 58,368
Other income, net (2,258) (805)
Income before income taxes 48,892 59,173
Income tax expense  12,714 19,644
Equity in net income of affiliates -- (3)
Net income $36,178 $39,532
     
   
Basic net income per common share: $0.26 $0.29
Diluted net income per common share: $0.26 $0.29
     
Weighted average shares outstanding:    
Basic 139,140 136,953
Diluted 139,791 138,121
 
 
Entegris, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
     
  June 29, 2013 December 31, 2012
ASSETS    
Cash and cash equivalents  $343,411 $330,419
Short-term investments -- 19,995
Accounts receivable, net 108,168 94,016
Inventories 98,140 99,144
Deferred tax assets, deferred tax charges and refundable income taxes 13,585 20,201
Other current assets and assets held for sale 7,124 15,549
Total current assets 570,428 579,324
     
Property, plant and equipment, net 173,786 157,021
     
Intangible assets 47,990 47,207
Deferred tax assets – non-current 16,378 17,167
Other assets 23,356 10,825
 Total assets $831,938 $811,544
     
LIABILITIES AND EQUITY    
Accounts payable $37,627 $36,341
Accrued liabilities 46,795 51,263
Income tax payable and deferred tax liabilities 9,101 5,659
 Total current liabilities 93,523 93,263
     
Other liabilities 22,152 23,482
Shareholders' equity 716,263 694,799
 Total liabilities and shareholders' equity $831,938 $811,544
 
 
Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
  Three months ended Six months ended
  June 29, 2013 June 30, 2012 June 29, 2013 June 30, 2012
Operating activities:        
Net income  $19,781 $21,673 $36,178 $39,532
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation 7,311 7,026 14,607 13,513
Amortization 2,359 2,420 4,646 4,870
Stock-based compensation expense 2,081 2,171 3,769 3,934
Other 717 (785) 2,760 1,376
Changes in operating assets and liabilities:        
Trade accounts and notes receivable (6,592) 2,476 (19,485) (10,335)
Inventories 623 (3,491) (3,135) (10,997)
Accounts payable and accrued liabilities 1,656 1,023 (5,359) 744
Income taxes payable and refundable income taxes 7,206 7,357 7,524 2,679
Other (322) 3,262 750 (1,810)
Net cash provided by operating activities 34,820 43,132 42,255 43,506
Investing activities:        
Acquisition of property and equipment (17,991) (19,512) (34,131) (30,117)
Acquisition of business, net of cash acquired (13,358) (2,961) (13,358) (2,961)
Proceeds from maturities of short-term investments -- -- 20,000 --
Other 6,535 180 6,547 183
Net cash used in investing activities (24,814) (22,293) (20,942) (32,895)
Financing activities:        
Issuance of common stock 1,448 858 6,322 4,194
Repurchase and retirement of common stock (5,605) (427) (9,382) (427)
Other 201 537 941 827
Net cash (used in) provided by financing activities (3,956) 968 (2,119) 4,594
Effect of exchange rate changes on cash (1,485) (1,873) (6,202) (1,933)
Increase in cash and cash equivalents 4,565 19,934 12,992 13,272
Cash and cash equivalents at beginning of period 338,846 266,931 330,419 273,593
Cash and cash equivalents at end of period $343,411 $286,865 $343,411 $286,865
 
 
Entegris, Inc. and Subsidiaries
Segment Information
(In thousands)
(Unaudited)
           
  Three months ended Six months ended
Net sales June 29,
2013
June 30,
2012
March 30,
2013
June 29,
2013
June 30,
2012
Contamination Control Solutions $114,634 $123,144 $103,961 $218,595 $238,696
Microenvironments 45,869 44,565 44,132 90,001 85,270
Specialty Materials 17,041 20,524 16,977 34,018 39,670
 Total net sales $177,544 $188,233 $165,070 $342,614 $363,636
           
           
  Three months ended Six months ended
Segment profit  June 29,
2013
June 30,
2012
March 30,
2013
June 29,
2013
June 30,
2012
Contamination Control Solutions $28,581 $34,683 $22,078 $50,659 $66,752
Microenvironments 9,364 8,523 9,325 18,689 14,051
Specialty Materials 1,900 4,404 2,216 4,116 9,072
Total segment profit  39,845 47,610 33,619 73,464 89,875
Amortization of intangibles  (2,359) (2,420) (2,287) (4,646) (4,870)
Unallocated expenses (11,099) (13,579) (11,085) (22,184) (26,637)
 Total operating income  $26,387 $31,611 $20,247 $46,634 $58,368
 
 
Entegris, Inc. and Subsidiaries
Reconciliation of GAAP to Adjusted Operating Income and Adjusted EBITDA
(In thousands)
(Unaudited)
 
  Three months ended  Six months ended
  June 29,
2013
June 30,
2012
March 30,
2013
June 29,
2013
June 30,
2012
Net sales $177,544 $188,233 $165,070 $342,614 $363,636
Net income $19,781 $21,673 $16,397 $36,178 $39,532
Adjustments to net income:           
Equity in net income of affiliates -- -- -- -- (3)
Income tax expense 7,516 10,579 5,198 12,714 19,644
Other income, net (910) (641) (1,348) (2,258) (805)
GAAP – Operating income 26,387 31,611 20,247 46,634 58,368
 Amortization of intangible  assets 2,359 2,420 2,287 4,646 4,870
Adjusted operating income  28,746 34,031 22,534 51,280 63,238
 Depreciation 7,311 7,026 7,296 14,607 13,513
Adjusted EBITDA $36,057 $41,057 $29,830 $65,887 $76,751
           
Adjusted operating margin 16.2% 18.1% 13.7% 15.0% 17.4%
Adjusted EBITDA – as a % of net sales 20.3% 21.8% 18.1% 19.2% 21.1%
 
 
Entegris, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Earnings per Share
(In thousands)
(Unaudited)
 
 
  Three months ended Six months ended
  June 29,
2013
June 30,
2012
March 30,
2013
June 29,
2013
June 30,
2012
GAAP net income $19,781 $21,673 $16,397 $36,178 $39,532
Adjustments to net income:          
Amortization of intangible assets 2,359 2,420 2,287 4,646 4,870
Gain associated with equity investments -- (1,522) -- -- (1,522)
Tax effect of adjustments to net income (851) (616) (824) (1,675) (1,501)
Non-GAAP net income $21,289 $21,955 $17,860 $39,149 $41,379
           
Diluted earnings per common share $0.14 $0.16 $0.12 $0.26 $0.29
Effect of adjustments to net income $0.01 $0.00 $0.01 $0.02 $0.01
Diluted non-GAAP earnings per common share $0.15 $0.16 $0.13 $0.28 $0.30
Steven Cantor
VP of Corporate Relations
T +1 978 436 6750