- 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 |