10-QPeriod: Q3 FY2017

ENTEGRIS INC Quarterly Report for Q3 Ended Jul 1, 2017

Filed July 27, 2017For Securities:ENTG

Summary

Entegris, Inc. (ENTG) reported a solid second quarter for 2017, with net sales increasing by 9% year-over-year to $329.0 million. This growth was driven by strong demand across all product lines, particularly from semiconductor industry customers, indicating high industry fab utilization and increased capital spending. The company's gross profit also saw a healthy increase, though the gross margin slightly compressed to 45.7% from 45.9% in the prior year period. Net income rose to $40.0 million, or $0.28 per diluted share, up from $32.9 million, or $0.23 per diluted share, in the same period last year. Financially, Entegris maintained a strong liquidity position with $405.6 million in cash and cash equivalents at the end of the quarter. The company completed a strategic acquisition of a microelectronic water and chemical filtration product line for $20 million, which is expected to complement its existing offerings. Despite increased investment in property and equipment, the company generated substantial operating cash flow of $118.6 million for the first six months of the year, supporting its operations and debt reduction efforts. The company also announced its full-year capital expenditure forecast of $90-$100 million.

Financial Highlights

50 data points
Beta

Revenue

$329.00M

45.7% Gross Margin

Net Income

$39.99M

12.2% Net Margin

EPS (Diluted)

$0.28

Total Assets

$1.76B

Cash & Equivalents

$435.20M

Free Cash Flow

$128.45M

Financial Statements
Beta
Revenue$329.00M
Cost of Revenue$190.18M
Gross Profit$150.30M
R&D Expenses$26.00M
SG&A Expenses$57.70M
Operating Income$60.66M
Interest Expense$7.75M
Net Income$39.99M
EPS (Basic)$0.28
EPS (Diluted)$0.28
Shares Outstanding (Basic)141.68M
Shares Outstanding (Diluted)143.59M

Key Highlights

  • 1Net sales increased 9% year-over-year to $329.0 million, driven by strong demand in the semiconductor industry.
  • 2Net income grew to $40.0 million ($0.28 per diluted share) from $32.9 million ($0.23 per diluted share) in the prior year period.
  • 3Gross profit increased by 8% to $150.3 million, with a gross margin of 45.7%.
  • 4The company acquired a microelectronic water and chemical filtration product line for $20 million, enhancing its product portfolio.
  • 5Operating cash flow remained strong at $118.6 million for the first six months of 2017.
  • 6Cash and cash equivalents stood at $405.6 million as of July 1, 2017, indicating a healthy liquidity position.
  • 7Long-term debt decreased to $535.9 million from $584.7 million at the end of 2016.

Frequently Asked Questions

Revenue growth was primarily driven by strong across-the-board demand for Entegris' products, especially from semiconductor industry customers. This demand was fueled by high industry fab utilization rates and increased capital spending compared to the prior year. The acquisition of the W.L. Gore & Associates product line also contributed to revenue.

Entegris acquired the microelectronic water and chemical filtration product line for $20 million on April 24, 2017. This acquisition complements the company's existing advanced liquid filtration solutions and adds $1.5 million in revenue for the quarter. It also resulted in the recognition of $7.3 million in goodwill.

Entegris expects its full-year capital expenditures for 2017 to be approximately $90 million to $100 million. These expenditures are primarily for investments in equipment and tooling.

Entegris actively manages its debt. For the six months ended July 1, 2017, the company made $50 million in payments on its senior secured term loan. The total long-term debt, including current maturities, decreased to $535.9 million from $584.7 million at the end of 2016, indicating a commitment to deleveraging.