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Entegris Reports Financial Results For Third Quarter Of Fiscal 2013

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
  September 28, 2013 September 29, 2012 June 29, 2013
Net sales $164,585 $184,449 $177,544
Cost of sales 94,453 102,517 99,974
Gross profit 70,132 81,932 77,570
Selling, general and administrative expenses 31,746 39,095 35,397
Engineering, research and development expenses 13,947 13,314 13,427
Amortization of intangible assets 2,343 2,389 2,359
Contingent consideration fair value adjustment (1,813) -- --
Operating income  23,909 27,134 26,387
Other expense (income), net 963 1,441 (910)
Income before income taxes 22,946 25,693 27,297
Income tax expense  5,139 7,656 7,516
Net income  $17,807 $18,037 $19,781
       
       
Basic net income per common share: $0.13 $0.13 $0.14
Diluted net income per common share: $0.13 $0.13 $0.14
       
Weighted average shares outstanding:      
Basic 138,904 137,453 139,255
Diluted 139,482 138,499 139,751
 
Entegris, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (In thousands, except per share data) (Unaudited)
 
  Nine months ended
  September 28, 2013 September 29, 2012
Net sales $507,199 $548,085
Cost of sales 292,369 307,163
Gross profit 214,830 240,922
Selling, general and administrative expenses 99,564 110,132
Engineering, research and development expenses 39,547 38,029
Amortization of intangible assets 6,989 7,259
Contingent consideration fair value adjustment (1,813) --
Operating income  70,543 85,502
Other (income) expense, net (1,295) 636
Income before income taxes 71,838 84,866
Income tax expense  17,853 27,300
Equity in net income of affiliates -- (3)
Net income $53,985 $57,569
     
     
Basic net income per common share: $0.39 $0.42
Diluted net income per common share: $0.39 $0.42
     
Weighted average shares outstanding:    
Basic 139,061 137,119
Diluted 139,688 138,247
 
Entegris, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (In thousands) (Unaudited)
 
  September 28, 2013 December 31, 2012
ASSETS    
Cash and cash equivalents $358,782 $330,419
Short-term investments -- 19,995
Accounts receivable, net 106,757 94,016
Inventories 97,426 99,144
Deferred tax assets, deferred tax charges and refundable income taxes 13,063 20,201
Other current assets and assets held for sale 9,878 15,549
Total current assets 585,906 579,324
     
Property, plant and equipment, net 179,178 157,021
     
Intangible assets 45,819 47,207
Deferred tax assets – non-current 15,833 17,167
Other assets 20,923 10,825
Total assets $847,659 $811,544
     
LIABILITIES AND EQUITY    
Accounts payable $37,094 $36,341
Accrued liabilities 48,710 51,263
Income tax payable and deferred tax liabilities 6,733 5,659
Total current liabilities 92,537 93,263
     
Other liabilities 21,036 23,482
Shareholders' equity 734,086 694,799
Total liabilities and shareholders' equity $847,659 $811,544
 
Entegris, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited)
  Three months ended Nine months ended
  September 28, 2013 September 29, 2012 September 28, 2013 September 29, 2012  
Operating activities:          
Net income  $17,807 $18,037 $53,985 $57,569  
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation 7,205 7,349 21,812 20,862  
Amortization 2,343 2,389 6,989 7,259  
Stock-based compensation expense 2,090 4,096 5,859 8,030  
Other 1,388 (861) 4,148 515  
Changes in operating assets and liabilities:          
Trade accounts and notes receivable 2,763 6,045 (16,722) (4,290)  
Inventories 580 1,374 (2,555) (9,623)  
Accounts payable and accrued liabilities 4,389 784 (970) 1,528  
Income taxes payable and refundable income taxes (2,285) (3,225) 5,239 (546)  
Other (3,842) (2,673) (3,092) (4,483)  
Net cash provided by operating activities 32,438 33,315 74,693 76,821  
Investing activities:          
Acquisition of property and equipment (14,899) (8,999) (49,030) (39,116)  
Acquisition of business, net of cash acquired -- -- (13,358) (2,961)  
Proceeds from maturities of short-term investments -- -- 20,000 --  
Other 141 (7,995) 6,688 (7,812)  
Net cash used in investing activities (14,758) (16,994) (35,700) (49,889)  
Financing activities:          
Issuance of common stock 345 495 6,667 4,689  
Repurchase and retirement of common stock (5,444) -- (14,826) (427)  
Other 184 509 1,125 1,336  
Net cash (used in) provided by financing activities (4,915) 1,004 (7,034) 5,598  
Effect of exchange rate changes on cash 2,606 3,640 (3,596) 1,707  
Increase in cash and cash equivalents 15,371  20,965 28,363 34,237  
Cash and cash equivalents at beginning of period 343,411 286,865 330,419 273,593  
Cash and cash equivalents at end of period $358,782 $307,830 $358,782 $307,830  
 
Entegris, Inc. and Subsidiaries Segment Information (In thousands) (Unaudited)
 
  Three months ended Nine months ended
Net sales September 28, 2013 September 29, 2012 June 29, 2013 September 28, 2013 September 29, 2012
Contamination Control Solutions $105,150 $112,876 $114,634 $323,745 $351,572
Microenvironments 42,520 54,421 45,869 132,521 139,691
Specialty Materials 16,915 17,152 17,041 50,933 56,822
Total net sales $164,585 $184,449 $177,544 $507,199 $548,085
           
           
  Three months ended Nine months ended
Segment profit September 28, 2013 September 29, 2012 June 29, 2013 September 28, 2013 September 29, 2012
Contamination Control Solutions $25,044 $27,166 $28,581 $75,703 $93,917
Microenvironments 8,635 16,771 9,364 27,324 30,823
Specialty Materials 2,001 2,112 1,900 6,117 11,184
Total segment profit 35,680 46,049 39,845 109,144 135,924
Amortization of intangibles (2,343) (2,389) (2,359) (6,989) (7,259)
Contingent consideration fair value adjustment 1,813 -- -- 1,813 --
Unallocated expenses (11,241) (16,526) (11,099) (33,425) (43,163)
Total operating income $23,909 $27,134 $26,387 $70,543 $85,502
 
Entegris, Inc. and Subsidiaries Reconciliation of GAAP to Adjusted Operating Income and Adjusted EBITDA (In thousands) (Unaudited)
 
  Three months ended Nine months ended
  September 28, 2013 September 29, 2012 June 29, 2013 September 28, 2013 September 29, 2012
Net sales $164,585 $184,449 $177,544 $507,199 $548,085
Net income $17,807 $18,037 $19,781 $53,985 $57,569
Adjustments to net income:           
Equity in net income of affiliates -- -- -- -- (3)
Income tax expense 5,139 7,656 7,516 17,853 27,300
Other expense (income), net 963 1,441 (910) (1,295) 636
GAAP – Operating income 23,909 27,134 26,387 70,543 85,502
Amortization of intangible  assets 2,343 2,389 2,359 6,989 7,259
Contingent consideration fair value adjustment (1,813) -- -- (1,813) --
Charge associated with CEO succession and transition plan -- 3,928 -- -- 3,928
Adjusted operating income  24,439 33,451 28,746 75,719 96,689
Depreciation 7,205 7,349 7,311 21,812 20,862
Adjusted EBITDA $31,644 $40,800 $36,057 $97,531 $117,551
           
Adjusted operating margin 14.8% 18.1% 16.2% 14.9% 17.6%
Adjusted EBITDA – as a % of net sales 19.2% 22.1% 20.3% 19.2% 21.4%
 
Entegris, Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Earnings per Share (In thousands) (Unaudited)
 
  Three months ended Nine months ended
  September 28, 2013 September 29, 2012 June 29, 2013 September 28, 2013 September 29, 2012
GAAP net income $17,807 $18,037 $19,781 $53,985 $57,569
Adjustments to net income:          
Amortization of intangible assets 2,343 2,389 2,359 6,989 7,259
Charge associated with CEO succession and transition plan -- 3,928 -- -- 3,928
Gain associated with equity investments -- -- -- -- (1,522)
Contingent consideration fair value adjustment (1,813) -- -- (1,813) --
Reclassification of cumulative translation adjustment associated with liquidated subsidiary 739 -- -- 739 --
Tax effect of adjustments to net income (190) (2,301) (851) (1,865) (3,802)
Non-GAAP net income $18,886 $22,053 $21,289 $58,035 $63,432
           
Diluted earnings per common share $0.13 $0.13 $0.14 $0.39 $0.42
Effect of adjustments to net income $0.01 $0.03 $0.01 $0.03 $0.04
Diluted non-GAAP earnings per common share $0.14 $0.16 $0.15 $0.42 $0.46
CONTACT: Steven Cantor
         VP of Corporate Relations
         T +1 978 436 6750
         irelations@entegris.com

Entegris, Inc.

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