Entegris Reports Fourth Quarter and Year End Results

        Print
| Source: Entegris, Inc.
  • Quarterly revenue of $186.3 million, up 13 percent sequentially
  • GAAP net income of $23.1 million, or $0.17 per share; Non-GAAP net income of $24.6 million, or $0.18 per share
  • Operating margin of 14.1 percent; Adjusted operating margin of 15.3 percent
  • Net cash generated from operations of $34.7 million

BILLERICA, Mass., Feb. 4, 2014 (GLOBE NEWSWIRE) -- Entegris, Inc. (Nasdaq:ENTG) today reported its financial results for the Company's fourth quarter and fiscal year ended December 31, 2013.

The Company recorded fourth-quarter sales of $186.3 million, an increase of 11 percent from the prior year, and 13 percent sequentially. Net income was $23.1 million, or $0.17 per share. These results included amortization of intangible assets of $2.4 million. Non-GAAP earnings per share of $0.18 in the fourth quarter of 2013 compared to $0.09 in the fourth quarter a year ago and $0.14 in the third quarter of 2013. A reconciliation table of GAAP to non-GAAP earnings per share is contained in this press release.

Fiscal 2013 sales were $693.5 million, representing a 3 percent decline compared to sales of $715.9 million in 2012. Net income per share of $0.55 compared to net income of $0.50 per share a year earlier. On a non-GAAP basis, net income per share in fiscal 2013 was $0.59 compared with net income per share of $0.55 for the year earlier.

Bertrand Loy, president and chief executive officer, said: "We finished the year on a high note, as revenue and profits in the fourth quarter exceeded our expectations. Demand for our liquid and gas filtration and purification solutions and advanced wafer handling products rebounded strongly from the third quarter. We continue to align ourselves even more tightly with the technology roadmaps of the semiconductor industry's leaders to help them improve yields as they develop and ramp their latest manufacturing processes.

"We generated very healthy levels of cash from operations of $34.7 million in the quarter and $109.4 million for the year," Loy said.

For the fiscal first quarter ending March 29, 2014, the Company expects sales to be $165 million to $180 million and EPS to range between $0.09 and $0.13. On a non-GAAP basis, EPS is expected to range from $0.10 to $0.14, which reflects Non-GAAP net income in the range of $13 million to $18 million, adjusted for expected amortization expense of $2.4 million or $0.01 per share and excluding acquisition related costs.

In a separate press release issued today, Entegris announced that it has entered into a definitive agreement to acquire ATMI. The transaction is expected to close in the second quarter of fiscal 2014.

Conference Call Details

Entegris and ATMI will host a joint conference call and online webcast today, February 4, 2014, at 8:30 a.m. Eastern Time to discuss the transaction announcement. It will be streamed live over Entegris' website at http://investor.entegris.com/events.cfm and over ATMI's website at http://www.atmi.com/. Interested participants can access the call by dialing toll-free (866) 610-1072 or (973) 935-2840 for international callers and referencing confirmation code #59322873. 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 February 4, 2013 at 11:30 a.m. Eastern Time and can be accessed telephonically by dialing (800) 585-8367 or (404) 537-3406 and using the passcode #59322873, or by accessing http://investor.entegris.com/events.cfm.

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
  December 31,
2013
September 28,
2013
December 31,
2012
Net sales $186,260 $164,585 $167,818
Cost of sales 104,365 94,453 101,357
Gross profit 81,895 70,132 66,461
Selling, general and administrative expenses 37,559 31,746 37,273
Engineering, research and development expenses 15,773 13,947 12,911
Amortization of intangible assets 2,358 2,343 2,335
Contingent consideration fair value adjustment -- (1,813) --
Operating income  26,205 23,909 13,942
Other (income) expense, net (663) 963 (895)
Income before income taxes 26,868 22,946 14,837
Income tax expense  3,816 5,139 3,581
Net income $23,052 $17,807 $11,256
       
       
Basic net income per common share: $0.17 $0.13 $0.08
Diluted net income per common share: $0.17 $0.13 $0.08
       
Weighted average shares outstanding:      
Basic 138,615 138,904 137,867
Diluted 139,408 139,482 138,907
 
Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
 
  Twelve Months Ended
  December 31,
2013
December 31,
2012
Net sales $693,459 $715,903
Cost of sales 396,734 408,520
Gross profit 296,725 307,383
Selling, general and administrative expenses 137,123 147,405
Engineering, research and development expenses 55,320 50,940
Amortization of intangible assets 9,347 9,594
Contingent consideration fair value adjustment (1,813) --
Operating income  96,748 99,444
Other income, net (1,958) (259)
Income before income taxes and equity in affiliates 98,706 99,703
Income tax expense  21,669 30,881
Equity in net income of affiliates -- (3)
Net income $77,037 $68,825
     
     
Basic net income per common share: $0.55 $0.50
Diluted net income per common share: $0.55 $0.50
     
Weighted average shares outstanding:    
Basic 138,950 137,306
Diluted 139,618 138,412
 
Entegris, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
 
  December 31, 2013 December 31, 2012
ASSETS    
Cash and cash equivalents $384,426 $330,419
Short-term investments -- 19,995
Accounts receivable, net 101,873 94,016
Inventories 96,585 99,144
Deferred tax assets, deferred tax charges and refundable income taxes 20,844 20,201
Other current assets and assets held for sale 11,088 15,549
Total current assets 614,816 579,324
     
Property, plant and equipment, net 186,440 157,021
     
Intangible assets 43,509 47,207
Deferred tax assets – non-current 12,039 17,167
Other assets 21,001 10,825
Total assets $877,805 $811,544
     
     
Accounts payable 38,396 36,341
Accrued liabilities 48,816 51,263
Income tax payable and deferred tax liabilities 10,373 5,659
Total current liabilities 97,585 93,263
     
Other liabilities 20,866 23,482
Equity 759,354 694,799
Total liabilities and equity $877,805 $811,544
 
Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
  Three Months Ended Twelve Months Ended
  December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
Operating activities:        
Net income  $23,052 $11,256 $77,037 $68,825
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation 7,656 7,151 29,468 28,013
Amortization 2,358 2,335 9,347 9,594
Stock-based compensation expense 2,069 1,851 7,928 9,881
Deferred tax valuation allowance and other tax items 4,950 12,012 8,232 10,822
Other (1,582) 198 (716) 1,903
Changes in operating assets and liabilities:        
Trade accounts and notes receivable 3,359 14,916 (13,363) 10,626
Inventories (397) 3,505 (2,952) (6,118)
Accounts payable and accrued liabilities (3,438) 4,737 (4,408) 6,265
Income taxes payable and refundable income taxes (2,508) (9,351) 2,731 (9,897)
Other (810) (10,269) (3,902) (14,752)
Net cash provided by operating activities 34,709 38,341 109,402 115,162
Investing activities:        
Acquisition of property and equipment (11,330) (10,813) (60,360) (49,929)
Acquisition of business, net of cash acquired -- -- (13,358) (2,961)
Purchases of short-term investments, net of proceeds from maturities -- (11,994) 20,000 (19,990)
Other 1 229 6,689 413
Net cash used in investing activities (11,329) (22,578) (47,029) (72,467)
Financing activities:        
Issuance of common stock 1,018 2,742 7,685 7,431
Repurchase and retirement of common stock (668) -- (15,494) (427)
Other 2,789 2,550 3,914 3,886
Net cash provided by (used in) financing activities 3,139 5,292 (3,895) 10,890
Effect of exchange rate changes on cash (875) 1,534 (4,471) 3,241
Increase in cash and cash equivalents 25,644 22,589 54,007 56,826
Cash and cash equivalents at beginning of period 358,782 307,830 330,419 273,593
Cash and cash equivalents at end of period $384,426 $330,419 $384,426 $330,419
 
Entegris, Inc. and Subsidiaries
Segment Information
(In thousands)
(Unaudited)
           
  Three Months Ended Twelve Months Ended
Net sales December 31,
2013
September 28,
2013
December 31,
2012
December 31,
2013
December 31,
2012
Contamination Control Solutions $123,665 $105,150 $110,266 $447,410 $461,838
Microenvironments 45,680 42,520 42,684 178,201 182,375
Specialty Materials 16,915 16,915 14,868 67,848 71,690
Total net sales $186,260 $164,585 $167,818 $693,459 $715,903
     
     
  Three Months Ended Twelve Months Ended
Segment profit  December 31,
2013
September 28,
2013
December 31,
2012
December 31,
2013
December 31,
2012
Contamination Control Solutions $32,489 $25,044 $22,438 $108,192 116,356
Microenvironments 8,852 8,635 6,401 36,176 37,223
Specialty Materials 970 2,001 1,046 7,087 12,230
Total segment profit  42,311 35,680 29,885 151,455 165,809
Amortization of intangibles  (2,358) (2,343) (2,335) (9,347) (9,594)
Contingent consideration fair value adjustment -- 1,813 -- 1,813 --
Unallocated expenses (13,748) (11,241) (13,608) (47,173) (56,771)
 Total operating income  $26,205 $23,909 $13,942 $96,748 $99,444
 
Entegris, Inc. and Subsidiaries
Reconciliation of GAAP to Adjusted Operating Income and Adjusted EBITDA
(In thousands)
(Unaudited)
 
  Three Months Ended Twelve Months Ended
  December 31,
2013
September 28,
2013
December 31,
2012
December 31,
2013
December 31,
2012
Net sales $186,260 $164,585 $167,818 $693,459 $715,903
Net income $23,052 $17,807 $11,256 $77,037 $68,825
           
Adjustments to net income           
           
Equity in net income of affiliates -- -- -- -- (3)
Income tax expense 3,816 5,139 3,581 21,669 30,881
Other (income) expense, net (663) 963 (895) (1,958) (259)
GAAP – Operating income 26,205 23,909 13,942 96,748 99,444
Amortization of intangible assets 2,358 2,343 2,335 9,347 9,594
Contingent consideration fair value adjustment -- (1,813) -- (1,813) --
Charge associated with CEO succession and transition plan -- -- -- -- 3,928
Adjusted operating income  28,563 24,439 16,277 104,282 112,966
Depreciation 7,656 7,205 7,151 29,468 28,013
Adjusted EBITDA $36,219 $31,644 $23,428 $133,750 $140,979
 
Adjusted operating margin 15.3% 14.8% 9.7% 15.0% 15.8%
Adjusted EBITDA – as a % of net sales 19.4% 19.2% 14.0% 19.3% 19.7%
 
Entegris, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Earnings per Share
(In thousands)
(Unaudited)
 
  Three Months Ended Twelve Months Ended
  December 31, 2013 September 28, 2013 December 31, 2012 December 31, 2013 December 31, 2012
GAAP net income $23,052 $17,807 $11,256 $77,037 $68,825
Adjustments to net income:          
Amortization of intangible assets 2,358 2,343 2,335 9,347 9,594
Contingent consideration fair value adjustment -- (1,813) -- (1,813) --
Reclassification of cumulative translation adjustment associated with liquidated subsidiaries 48 739 -- 787 --
Gain on sale of equity investment -- -- -- -- (1,522)
Charge associated with CEO succession and transition plan -- -- -- -- 3,928
Tax effect of adjustments to net income attributable to Entegris, Inc. (850) (190) (841) (2,714) (4,643)
Non-GAAP net income $24,608 $18,886 $12,750 $82,644 $76,182
           
Diluted earnings per common share $0.17 $0.13 $0.08 $0.55 $0.50
           
Effect of adjustments to net income 0.01 0.01 0.01 0.04 0.05
           
Diluted non-GAAP earnings per common share $0.18 $0.14 $0.09 $0.59 $0.55
Steven Cantor
VP of Corporate Relations
T +1 978 436 6750