10-KPeriod: FY2020

ENTEGRIS INC Annual Report, Year Ended Dec 31, 2020

Filed February 5, 2021For Securities:ENTG

Summary

Entegris, Inc. (ENTG) operates as a critical supplier of advanced materials and process solutions for the semiconductor and other high-technology industries. In its fiscal year 2020, the company demonstrated strong performance driven by increased demand within the semiconductor sector, reflected in a 17% year-over-year increase in net sales to $1.86 billion. This growth was fueled by higher factory utilization, a favorable sales mix, and contributions from strategic acquisitions. The company's business is structured across three segments: Specialty Chemicals and Engineered Materials (SCEM), Microcontamination Control (MC), and Advanced Materials Handling (AMH). Each segment plays a vital role in the semiconductor manufacturing ecosystem, from supplying high-purity chemicals and materials to ensuring contamination-free processes and safeguarding sensitive components. Entegris' integrated approach, leveraging capabilities across these segments, positions it as a comprehensive solutions provider for its customers.

Financial Highlights

54 data points
Beta

Revenue

$1.86B

45.7% Gross Margin

Net Income

$294.97M

15.9% Net Margin

EPS (Diluted)

$2.16

Total Assets

$2.92B

Cash & Equivalents

$580.89M

Free Cash Flow

$314.92M

Financial Statements
Beta
Revenue$1.86B
Cost of Revenue$1.01B
Gross Profit$849.72M
R&D Expenses$136.06M
SG&A Expenses$265.13M
Operating Income$395.44M
Interest Expense$48.60M
Net Income$294.97M
EPS (Basic)$2.19
EPS (Diluted)$2.16
Shares Outstanding (Basic)134.84M
Shares Outstanding (Diluted)136.27M

Key Highlights

  • 1Entegris reported a 17% increase in net sales for 2020, reaching $1.86 billion, driven by strong demand in the semiconductor industry.
  • 2The company's gross margin improved to 45.7% in 2020 from 44.7% in 2019, attributed to higher factory utilization and a favorable sales mix.
  • 3Net income increased by 16% to $295.0 million in 2020, with diluted earnings per share rising to $2.16 from $1.87 in the prior year.
  • 4The company successfully integrated several acquisitions in 2019 and 2020, contributing to sales growth and expanding its product portfolio.
  • 5Entegris maintains a robust R&D investment, with expenses representing 7.3% of net sales in 2020, focusing on innovation for advanced technology nodes.
  • 6The company's revenue is largely unit-driven and recurring (approximately 70% in 2020), providing a degree of stability against fluctuations in capital equipment sales.
  • 7Entegris has a strong global presence with manufacturing and R&D facilities across key semiconductor markets, including significant expansion plans in Taiwan.

Frequently Asked Questions

Entegris is a leading supplier of advanced materials and process solutions for the semiconductor and other high-technology industries. In 2020, the company experienced significant growth, with net sales increasing by 17% to $1.86 billion, driven by strong demand in the semiconductor sector. This performance was supported by improved factory utilization and strategic acquisitions.

Entegris operates through three distinct segments: Specialty Chemicals and Engineered Materials (SCEM), Microcontamination Control (MC), and Advanced Materials Handling (AMH). SCEM provides essential chemicals and materials, MC focuses on purification and filtration solutions to maintain process integrity, and AMH offers solutions for the safe transport and delivery of critical materials and wafers. These segments work collaboratively to provide integrated solutions to customers.

Entegris benefits from several key trends in the semiconductor industry, including increasing manufacturing complexity, the demand for higher purity materials, and the growing importance of advanced materials for next-generation devices. Emerging applications like 5G, AI, and IoT are expected to drive long-term demand for semiconductors and, consequently, Entegris' products. Approximately 70% of its revenue is unit-driven and recurring, further supporting sustained demand.

Key risks include the cyclical nature of the semiconductor industry, intense competition, reliance on key customers (with the top ten accounting for 46% of sales in 2020), supply chain disruptions (exacerbated by the COVID-19 pandemic), and geopolitical tensions impacting global trade. The company also faces risks related to technological changes, intellectual property protection, and regulatory environments.