10-QPeriod: Q2 FY2021

ENTEGRIS INC Quarterly Report for Q2 Ended Apr 3, 2021

Filed April 27, 2021For Securities:ENTG

Summary

Entegris, Inc. (ENTG) reported strong financial results for the first quarter of 2021, with net sales increasing by 24% year-over-year to $512.8 million. This growth was driven by robust demand across its semiconductor and high-technology industry segments, supported by strong industry conditions and multiple node transitions. The company achieved a gross margin of 45.8%, an improvement from the prior year's 45.0%, reflecting higher factory utilization and a favorable sales mix. Net income rose to $84.7 million, or $0.62 per diluted share, a significant increase from $61.0 million, or $0.45 per diluted share, in the same period last year. The company also highlighted proactive management of its operations and supply chain amidst the ongoing COVID-19 pandemic, including inventory management strategies to mitigate potential disruptions. Financially, Entegris maintained a solid liquidity position with $548.5 million in cash and cash equivalents, and has taken steps to strengthen its balance sheet, including pricing a new offering of senior unsecured notes.

Financial Highlights

51 data points
Beta

Revenue

$512.84M

45.8% Gross Margin

Net Income

$84.68M

16.5% Net Margin

EPS (Diluted)

$0.62

Total Assets

$2.93B

Cash & Equivalents

$548.52M

Free Cash Flow

$9.79M

Financial Statements
Beta
Revenue$512.84M
Cost of Revenue$277.86M
Gross Profit$234.99M
R&D Expenses$37.75M
SG&A Expenses$71.39M
Operating Income$113.98M
Interest Expense$11.65M
Net Income$84.68M
EPS (Basic)$0.63
EPS (Diluted)$0.62
Shares Outstanding (Basic)135.07M
Shares Outstanding (Diluted)136.50M

Key Highlights

  • 1Net sales surged 24% year-over-year to $512.8 million, driven by strong demand in the semiconductor industry.
  • 2Gross profit increased 27% to $235.0 million, with gross margin improving to 45.8% from 45.0% in the prior year.
  • 3Net income reached $84.7 million ($0.62 per diluted share), up from $61.0 million ($0.45 per diluted share) in Q1 2020.
  • 4The Microcontamination Control (MC) segment showed particularly strong growth with net sales up 30% and segment profit up 41%.
  • 5The company maintained a healthy liquidity position with $548.5 million in cash and cash equivalents as of April 3, 2021.
  • 6Entegris is actively managing supply chain risks related to COVID-19, including increasing inventory levels for certain components.
  • 7Subsequent to the quarter, the company priced a private offering of $400 million in senior unsecured notes due 2029 to refinance existing debt.

Frequently Asked Questions

The 24% year-over-year increase in net sales to $512.8 million was primarily driven by strong industry conditions within the semiconductor sector, multiple technological node transitions by customers, and robust overall demand for Entegris' products and solutions across all three of its operating segments.

Entegris implemented rigorous health and safety measures and has largely kept its global facilities operational. To mitigate potential supply chain disruptions, the company increased inventory levels for certain raw materials and components. While demand remains strong, management notes that customer ordering patterns in Q1 2021 may have been influenced by inventory build-ups to hedge against future supply disruptions.

Entegris ended the quarter with $548.5 million in cash and cash equivalents, indicating a solid liquidity position. The company also announced a subsequent $400 million note offering to refinance existing debt. Management believes its current cash reserves and anticipated operating cash flows are sufficient to meet its cash needs for the next twelve months and beyond, despite ongoing COVID-19 uncertainties.

All three segments demonstrated growth. The Microcontamination Control (MC) segment showed particularly strong performance, with net sales increasing by 30% and segment profit growing by 41% year-over-year, driven by improved sales of liquid and gas filtration products.