Business Wire | Oct 22, 2020 06:00AM EDT

Entegris Reports Results for Third Quarter Of 2020

Oct. 22, 2020

BILLERICA, Mass.--(BUSINESS WIRE)--Oct. 22, 2020--Entegris, Inc. (NASDAQ: ENTG), today reported its financial results for the Company's third quarter ended September 26, 2020.

Third-quarter sales were $481.0 million, an increase of 22% from the same quarter last year. GAAP third-quarter net income was $79.3 million, or $0.58 per diluted share, which included $11.7 million of amortization of intangible assets and $1.3 million of integration costs. Non-GAAP net income was $91.5 million and non-GAAP earnings per diluted share was $0.67.

Bertrand Loy, president and chief executive officer, said: "Our better than expected third quarter results showcased the strength of our value proposition, the resilience of our unit-driven business model and the execution of our teams. This performance was driven by the accelerated demand of our leading-edge solutions in advanced technology nodes. Another highlight of the quarter was our acquisition of GMTI, which provides high precision analytical instruments critical to the complex CMP process."

Mr. Loy added: "At Entegris, we are benefiting from the two intersecting themes of growing importance of process materials and materials purity, and the impact they have on semiconductor performance, cost and reliability. Our position is bolstered by our technology leadership, global scale, and world class operational excellence. We are looking forward to a strong close to the year and expect to deliver record sales and non-GAAP EPS in 2020."

Quarterly Financial Results Summary

(in thousands, except percentages and per share data)

GAAP Results September 26, September 28, June 27, 2020 2019 2020

Net sales $480,987 $394,147 $448,405

Operating income $106,761 $52,793 $94,712

Operating margin - as a % of net sales 22.2% 13.4% 21.1%

Net income $79,303 $40,767 $68,036

Diluted earnings per common share $0.58 $0.30 $0.50

Non-GAAP Results

Non-GAAP adjusted operating income $121,612 $88,220 $110,835

Non-GAAP adjusted operating margin - as 25.3% 22.4 % 24.7%a % of net sales

Non-GAAP net income $91,460 $68,179 $81,581

Diluted non-GAAP earnings per common $0.67 $0.50 $0.60share

Fourth-Quarter Outlook

For the fourth quarter ending December 31, 2020, the Company expects sales of $480 million to $495 million, net income of $75 million to $82 million and diluted earnings per common share between $0.55 and $0.60. On a non-GAAP basis, diluted earnings per common share is expected to range from $0.62 to $0.67, which reflects net income on a non-GAAP basis in the range of $84 million to $91 million.

Segment Results

The Company reports its results in the following segments:

Specialty Chemicals and Engineered Materials (SCEM): SCEM provides high-performance and high-purity process chemistries, gases and materials, and safe and efficient delivery systems to support semiconductor and other advanced manufacturing processes.

Microcontamination Control (MC): MC offers solutions to filter and purify critical liquid chemistries and gases used in semiconductor manufacturing processes and other high-technology industries.

Advanced Materials Handling (AMH): AMH develops solutions to monitor, protect, transport, and deliver critical liquid chemistries, wafers, and substrates for a broad set of applications in the semiconductor industry and other high-technology industries.

Entegris' 2020 Investor and Analyst Day

Entegris will be hosting a virtual Investor and Analyst Day on November 17, 2020. If you have any questions or need any additional information please reach out to Bill Seymour, V.P. Investor Relations.

Third-Quarter Results Conference Call Details

Entegris will hold a conference call to discuss its results for the third quarter on Thursday, October 22, 2020, at 9:00 a.m. Eastern Time. Participants should dial 800-437-2398 or +1 323-289-6576, referencing confirmation code 2871729. Participants are asked to dial in 5 to 10 minutes prior to the start of the call. For a replay of the call, please Click Hereusing passcode 2871729.

The call can also be accessed live and on-demand from the Entegris website. Go to https://investor.entegris.com/and follow the link to the webcast. The on-demand playback will be available for six weeks after the conclusion of the teleconference.

Management's slide presentation concerning the results for the third quarter, which may be referred to during the call, will be posted on the investor relations section of https://www.entegris.com Thursday morning before the call.

ABOUT ENTEGRIS

Entegris is a world-class supplier of advanced materials and process solutions for the semiconductor and other high-tech industries. Entegris is ISO 9001 certified and has manufacturing, customer service and/or research facilities in the United States, Canada, China, France, Germany, Israel, Japan, Malaysia, Singapore, South Korea and Taiwan. Additional information can be found at https://www.entegris.com.

Non-GAAP Information

The Company's condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (GAAP). Adjusted EBITDA, Adjusted Gross Profit, Adjusted Segment Profit, and Adjusted Operating Income, non-GAAP net income, non-GAAP adjusted operating margin and diluted non-GAAP earnings per common share, together with related measures thereof, are considered "Non-GAAP financial measures" under the rules and regulations of the Securities and Exchange Commission. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The Company uses these non-GAAP financial measures for financial and operational decision-making, as a means to evaluate period-to-period comparisons, as well as comparisons to the Company's competitors' operating results. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding the Company's performance and liquidity by excluding certain items that may not be indicative of the Company's recurring business operating results, such as amortization, depreciation and discrete cash charges that may vary significantly from period to period. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing and understanding the Company's results and performance and when planning, forecasting, and analyzing future periods. The Company believes these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by the Company's institutional investors and the analyst community to help them analyze the Company's business. The reconciliations of GAAP Gross Profit to Adjusted Gross Profit, GAAP Segment Profit to Adjusted Operating Income, GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA, GAAP Net Income and Diluted Earnings per Common Share to Non-GAAP Net Income and Diluted Non-GAAP Earnings per Common Share and GAAP Outlook to Non-GAAP Outlook are included elsewhere in this release.

Forward-Looking Statements

This press release contains forward-looking statements. The words "believe," "expect," "anticipate," "intend," "estimate," "forecast," "project," "should," "may," "will," "would" or the negative thereof and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include statements related to future period guidance; future sales, net income, net income per diluted share, non-GAAP EPS, non-GAAP net income, expenses and other financial metrics; the Company's performance relative to its markets, including the drivers of such performance; the impact, financial or otherwise, of any organizational changes; market and technology trends, including the expected impact of the Covid-19 pandemic; the development of new products and the success of their introductions; the Company's capital allocation strategy, which may be modified at any time for any reason, including share repurchases, dividends, debt repayments and potential acquisitions; the impact of the acquisitions the Company has made and commercial partnerships the Company has established; the Company's ability to execute on its strategies; and other matters. These statements involve risks and uncertainties, and actual results may differ materially from those projected in the forward-looking statements. These risks and uncertainties include, but are not limited to, risks related to the Covid-19 pandemic on the global economy and financial markets, as well as on the Company, our customers and suppliers, which may impact our sales, gross margin, customer demand and our ability to supply our products to our customers; weakening of global and/or regional economic conditions, generally or specifically in the semiconductor industry, which could decrease the demand for the Company's products and solutions; the Company's ability to meet rapid demand shifts; the Company's ability to continue technological innovation and introduce new products to meet customers' rapidly changing requirements; the Company's concentrated customer base; the Company's ability to identify, complete and integrate acquisitions, joint ventures or other transactions; the Company's ability to effectively implement any organizational changes; the Company's ability to protect and enforce intellectual property rights; operational, political and legal risks of the Company's international operations; the Company's dependence on sole source and limited source suppliers; the increasing complexity of certain manufacturing processes; raw material shortages, supply constraints and price increases; changes in government regulations of the countries in which the Company operates; fluctuation of currency exchange rates; fluctuations in the market price of the Company's stock; the level of, and obligations associated with, the Company's indebtedness; and other risk factors and additional information described in the Company's filings with the Securities and Exchange Commission, including under the heading "Risks Factors" in Item 1A of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed on February 7, 2020, and in the Company's other periodic filings. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Entegris, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

Three months ended

September September June 27, 26, 28, 2020 2020 2019

Net sales $480,987 $394,147 $448,405

Cost of sales 254,987 223,797 241,033

Gross profit 226,000 170,350 207,372

Selling, general and administrative expenses 71,195 71,232 66,872

Engineering, research and development 36,295 31,173 32,572expenses

Amortization of intangible assets 11,749 15,152 13,216

Operating income 106,761 52,793 94,712

Interest expense, net 12,651 10,216 12,792

Other (income) expense, net (1,752) 934 (477)

Income before income tax expense 95,862 41,643 82,397

Income tax expense 16,559 876 14,361

Net income $79,303 $40,767 $68,036





Basic earnings per common share: $0.59 $0.30 $0.51

Diluted earnings per common share: $0.58 $0.30 $0.50



Weighted average shares outstanding:

Basic 134,957 135,092 134,700

Diluted 136,252 136,530 136,007

Entegris, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

Nine months ended

September 26,

2020

September 28,

2019

Net sales

$1,341,719

$1,164,068

Cost of sales

722,869

650,051

Gross profit

618,850

514,017

Selling, general and administrative expenses

196,958

217,636

Engineering, research and development expenses

98,499

90,788

Amortization of intangible assets

41,176

50,400

Operating income

282,217

155,193

Interest expense, net

35,681

29,567

Other (income), net

(1,351)

(121,329)

Income before income tax expense

247,887

246,955

Income tax expense

39,542

49,533

Net income

$208,345

$197,422

Basic earnings per common share:

$1.55

$1.46

Diluted earnings per common share:

$1.53

$1.45

Weighted average shares outstanding:

Basic

134,801

135,256

Diluted

136,209

136,601

Entegris, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

Nine months ended

September 26, September 28, 2020 2019

Net sales $1,341,719 $1,164,068

Cost of sales 722,869 650,051

Gross profit 618,850 514,017

Selling, general and administrative expenses 196,958 217,636

Engineering, research and development expenses 98,499 90,788

Amortization of intangible assets 41,176 50,400

Operating income 282,217 155,193

Interest expense, net 35,681 29,567

Other (income), net (1,351) (121,329)

Income before income tax expense 247,887 246,955

Income tax expense 39,542 49,533

Net income $208,345 $197,422





Basic earnings per common share: $1.55 $1.46

Diluted earnings per common share: $1.53 $1.45



Weighted average shares outstanding:

Basic 134,801 135,256

Diluted 136,209 136,601

Entegris, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

September 26,

2020

December 31,

2019

ASSETS

Current assets:

Cash and cash equivalents

$447,972

$351,911

Trade accounts and notes receivable, net

300,489

234,409

Inventories, net

329,741

287,098

Deferred tax charges and refundable income taxes

38,100

24,552

Other current assets

30,148

34,427

Total current assets

1,146,450

932,397

Property, plant and equipment, net

490,298

479,544

Other assets:

Right-of-use assets

46,655

50,160

Goodwill

744,470

695,044

Intangible assets, net

349,066

333,952

Deferred tax assets and other noncurrent tax assets

12,179

11,245

Other

12,510

13,744

Total assets

$2,801,628

$2,516,086

LIABILITIES AND EQUITY

Current liabilities

Long-term debt, current maturities

$-

$4,000

Accounts payable

69,918

84,207

Accrued liabilities

151,849

150,118

Income tax payable

25,606

26,108

Total current liabilities

247,373

264,433

Long-term debt, excluding current maturities

1,085,380

932,484

Long-term lease liability

40,407

43,827

Other liabilities

126,167

109,453

Shareholders' equity

1,302,301

1,165,889

Total liabilities and equity

$2,801,628

$2,516,086

Entegris, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

September 26, December 31, 2020 2019

ASSETS

Current assets:

Cash and cash equivalents $447,972 $351,911

Trade accounts and notes receivable, net 300,489 234,409

Inventories, net 329,741 287,098

Deferred tax charges and refundable income taxes 38,100 24,552

Other current assets 30,148 34,427

Total current assets 1,146,450 932,397

Property, plant and equipment, net 490,298 479,544

Other assets:

Right-of-use assets 46,655 50,160

Goodwill 744,470 695,044

Intangible assets, net 349,066 333,952

Deferred tax assets and other noncurrent tax 12,179 11,245assets

Other 12,510 13,744

Total assets $2,801,628 $2,516,086

LIABILITIES AND EQUITY

Current liabilities

Long-term debt, current maturities $- $4,000

Accounts payable 69,918 84,207

Accrued liabilities 151,849 150,118

Income tax payable 25,606 26,108

Total current liabilities 247,373 264,433

Long-term debt, excluding current maturities 1,085,380 932,484

Long-term lease liability 40,407 43,827

Other liabilities 126,167 109,453

Shareholders' equity 1,302,301 1,165,889

Total liabilities and equity $2,801,628 $2,516,086

Entegris, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Three months ended

Nine months ended

September 26,

2020

September 28,

2019

September 26,

2020

September 28,

2019

Operating activities:

Net income

$79,303

$40,767

$208,345

$197,422

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

20,777

19,306

62,064

54,623

Amortization

11,749

15,152

41,176

50,400

Stock-based compensation expense

5,903

5,326

16,552

14,915

Other

20,210

5,988

33,105

12,128

Changes in operating assets and liabilities, net of effects of acquisitions:

Trade accounts and notes receivable

(23,280)

(35,841)

(65,367)

(30,405)

Inventories

1,084

(9,398)

(54,278)

(5,689)

Accounts payable and accrued liabilities

4,433

20,796

10,076

(31,911)

Income taxes payable, refundable income taxes and noncurrent taxes payable

(16,407)

(35,965)

(11,995)

(20,574)

Other

(2,540)

(840)

2,978

12,745

Net cash provided by operating activities

101,232

25,291

242,656

253,654

Investing activities:

Acquisition of property and equipment

(32,687)

(26,322)

(79,560)

(86,423)

Acquisition of business, net of cash acquired

(35,500)

(217,106)

(111,145)

(266,373)

Other

54

2,618

265

2,815

Net cash used in investing activities

(68,133)

(240,810)

(190,440)

(349,981)

Financing activities:

Proceeds from short-term borrowings and long-term debt

-

-

617,000

-

Payments of short-term borrowings and long-term debt

(100,000)

-

(468,000)

(2,000)

Payments for dividends

(10,794)

(10,815)

(32,446)

(29,779)

Issuance of common stock

3,150

3,434

4,899

4,351

Taxes paid related to net share settlement of equity awards

(11,836)

(276)

(24,556)

(8,577)

Repurchase and retirement of common stock

-

(15,000)

(29,564)

(65,321)

Deferred acquisition payments

-

-

(16,125)

-

Other

(1)

(5)

(6,856)

(502)

Net cash (used in) provided by financing activities

(119,481)

(22,662)

44,352

(101,828)

Effect of exchange rate changes on cash and cash equivalents

1,687

(453)

(507)

(1,159)

(Decrease) increase in cash and cash equivalents

(84,695)

(238,634)

96,061

(199,314)

Cash and cash equivalents at beginning of period

532,667

521,382

351,911

482,062

Cash and cash equivalents at end of period

$447,972

$282,748

$447,972

$282,748

Entegris, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Three months ended Nine months ended

September September September September 26, 28, 26, 28,

2020 2019 2020 2019

Operating activities:

Net income $79,303 $40,767 $208,345 $197,422

Adjustments to reconcile net income tonet cash provided by operating activities:

Depreciation 20,777 19,306 62,064 54,623

Amortization 11,749 15,152 41,176 50,400

Stock-based compensation expense 5,903 5,326 16,552 14,915

Other 20,210 5,988 33,105 12,128

Changes in operating assets andliabilities, net of effects of acquisitions:

Trade accounts and notes receivable (23,280) (35,841) (65,367) (30,405)

Inventories 1,084 (9,398) (54,278) (5,689)

Accounts payable and accrued 4,433 20,796 10,076 (31,911)liabilities

Income taxes payable, refundable income (16,407) (35,965) (11,995) (20,574)taxes and noncurrent taxes payable

Other (2,540) (840) 2,978 12,745

Net cash provided by operating 101,232 25,291 242,656 253,654activities

Investing activities:

Acquisition of property and equipment (32,687) (26,322) (79,560) (86,423)

Acquisition of business, net of cash (35,500) (217,106) (111,145) (266,373)acquired

Other 54 2,618 265 2,815

Net cash used in investing activities (68,133) (240,810) (190,440) (349,981)

Financing activities:

Proceeds from short-term borrowings and - - 617,000 -long-term debt

Payments of short-term borrowings and (100,000) - (468,000) (2,000)long-term debt

Payments for dividends (10,794) (10,815) (32,446) (29,779)

Issuance of common stock 3,150 3,434 4,899 4,351

Taxes paid related to net share (11,836) (276) (24,556) (8,577)settlement of equity awards

Repurchase and retirement of common - (15,000) (29,564) (65,321)stock

Deferred acquisition payments - - (16,125) -

Other (1) (5) (6,856) (502)

Net cash (used in) provided by (119,481) (22,662) 44,352 (101,828)financing activities

Effect of exchange rate changes on cash 1,687 (453) (507) (1,159)and cash equivalents

(Decrease) increase in cash and cash (84,695) (238,634) 96,061 (199,314)equivalents

Cash and cash equivalents at beginning 532,667 521,382 351,911 482,062of period

Cash and cash equivalents at end of $447,972 $282,748 $447,972 $282,748period

Entegris, Inc. and Subsidiaries

Segment Information

(In thousands)

(Unaudited)

Three months ended

Nine months ended

Net sales

September 26,

2020

September 28,

2019

June 27,

2020

September 26,

2020

September 28,

2019

Specialty Chemicals and Engineered Materials

$150,480

$127,750

$146,213

$440,907

$379,772

Microcontamination Control

193,541

155,979

183,758

536,560

463,870

Advanced Materials Handling

144,370

117,256

126,434

386,941

340,835

Inter-segment elimination

(7,404)

(6,838)

(8,000)

(22,689)

(20,409)

Total net sales

$480,987

$394,147

$448,405

$1,341,719

$1,164,068

Entegris, Inc. and Subsidiaries

Segment Information

(In thousands)

(Unaudited)

Three months ended Nine months ended

September September June 27, September SeptemberNet sales 26, 28, 26, 28, 2020 2020 2019 2020 2019

Specialty Chemicals and $150,480 $127,750 $146,213 $440,907 $379,772Engineered Materials

Microcontamination Control 193,541 155,979 183,758 536,560 463,870

Advanced Materials Handling 144,370 117,256 126,434 386,941 340,835

Inter-segment elimination (7,404) (6,838) (8,000) (22,689) (20,409)

Total net sales $480,987 $394,147 $448,405 $1,341,719 $1,164,068

Three months ended

Nine months ended

Segment profit

September 26,

2020

September 28,

2019

June 27,

2020

September 26,

2020

September 28,

2019

Specialty Chemicals and Engineered Materials

$32,600

$17,074

$32,938

$98,208

$65,505

Microcontamination Control

64,915

46,792

62,137

177,219

137,241

Advanced Materials Handling

33,266

17,077

22,809

76,707

54,487

Total segment profit

130,781

80,943

117,884

352,134

257,233

Amortization of intangibles

11,749

15,152

13,216

41,176

50,400

Unallocated expenses

12,271

12,998

9,956

28,741

51,640

Total operating income

$106,761

$52,793

$94,712

$282,217

$155,193

Three months ended Nine months ended

September September June September SeptemberSegment profit 26, 28, 27, 26, 28,

2020 2019 2020 2020 2019

Specialty Chemicals and $32,600 $17,074 $32,938 $98,208 $65,505Engineered Materials

Microcontamination Control 64,915 46,792 62,137 177,219 137,241

Advanced Materials Handling 33,266 17,077 22,809 76,707 54,487

Total segment profit 130,781 80,943 117,884 352,134 257,233

Amortization of intangibles 11,749 15,152 13,216 41,176 50,400

Unallocated expenses 12,271 12,998 9,956 28,741 51,640

Total operating income $106,761 $52,793 $94,712 $282,217 $155,193

Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Gross Profit to Adjusted Gross Profit

(In thousands)

(Unaudited)

Three months ended

Nine months ended

September 26,

2020

September 28,

2019

June 27,

2020

September 26,

2020

September 28,

2019

Net sales

$480,987

$394,147

$448,405

$1,341,719

$1,164,068

Gross profit-GAAP

$226,000

$170,350

$207,372

$618,850

$514,017

Adjustments to gross profit:

Integration costs

-

-

(1,557)

(1,557)

-

Severance and restructuring costs

-

990

465

465

1,348

Charge for fair value mark-up of acquired inventory sold

229

4,483

-

590

7,333

Adjusted gross profit

$226,229

$175,823

$206,280

$618,348

$522,698

Gross margin - as a % of net sales

47.0%

43.2%

46.2%

46.1%

44.2%

Adjusted gross margin - as a % of net sales

47.0%

44.6%

46.0%

46.1%

44.9%

Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Gross Profit to Adjusted Gross Profit

(In thousands)

(Unaudited)

Three months ended Nine months ended

September September June 27, September September 26, 28, 26, 28, 2020 2020 2019 2020 2019

Net sales $480,987 $394,147 $448,405 $1,341,719 $1,164,068

Gross profit-GAAP $226,000 $170,350 $207,372 $618,850 $514,017

Adjustments to gross profit:

Integration costs - - (1,557) (1,557) -

Severance and restructuring - 990 465 465 1,348costs

Charge for fair valuemark-up of acquired 229 4,483 - 590 7,333inventory sold

Adjusted gross profit $226,229 $175,823 $206,280 $618,348 $522,698



Gross margin - as a % of net 47.0% 43.2% 46.2% 46.1% 44.2%sales

Adjusted gross margin - as a 47.0% 44.6% 46.0% 46.1% 44.9%% of net sales

Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Segment Profit to Adjusted Operating Income

(In thousands)

(Unaudited)

Three months ended

Nine months ended

Segment profit-GAAP

September 26,

2020

September 28,

2019

June 27,

2020

September 26,

2020

September 28,

2019

Specialty Chemicals and Engineered Materials (SCEM)

$32,600

$17,074

$32,938

$98,208

$65,505

Microcontamination Control (MC)

64,915

46,792

62,137

177,219

137,241

Advanced Materials Handling (AMH)

33,266

17,077

22,809

76,707

54,487

Total segment profit

130,781

80,943

117,884

352,134

257,233

Amortization of intangible assets

11,749

15,152

13,216

41,176

50,400

Unallocated expenses

12,271

12,998

9,956

28,741

51,640

Total operating income

$106,761

$52,793

$94,712

$282,217

$155,193

Three months ended

Nine months ended

Adjusted segment profit

September 26,

2020

September 28,

2019

June 27,

2020

September 26,

2020

September 28,

2019

SCEM segment profit

$32,600

$17,074

$32,938

$98,208

$65,505

Integration costs

-

-

(1,557)

(1,557)

-

Severance and restructuring costs

277

2,143

455

906

2,662

Charge for fair value write-up of acquired inventory sold

-

4,483

-

235

5,298

SCEM adjusted segment profit

$32,877

$23,700

$31,836

$97,792

$73,465

MC segment profit

$64,915

$46,792

$62,137

$177,219

$137,241

Severance and restructuring costs

301

2,977

494

985

3,701

Charge for fair value write-up of acquired inventory sold

-

-

-

126

2,035

MC adjusted segment profit

$65,216

$49,769

$62,631

$178,330

$142,977

AMH segment profit

$33,266

$17,077

$22,809

$76,707

$54,487

Severance and restructuring costs

213

3,135

814

1,162

3,713

Charge for fair value write-up of acquired inventory sold

229

-

-

229

-

AMH adjusted segment profit

$33,708

$20,212

$23,623

$78,098

$58,200

Unallocated general and administrative expenses

$12,271

$12,998

$9,956

$28,741

$51,640

Unallocated deal and integration costs

(1,902)

(7,289)

(2,415)

(5,796)

(31,773)

Unallocated severance and restructuring costs

(180)

(248)

(286)

(810)

(2,418)

Adjusted unallocated general and administrative expenses

$10,189

$5,461

$7,255

$22,135

$17,449

Total adjusted segment profit

$131,801

$93,681

$118,090

$354,220

$274,642

Adjusted amortization of intangible assets

-

-

-

-

-

Adjusted unallocated general and administrative expenses

10,189

5,461

7,255

22,135

17,449

Total adjusted operating income

$121,612

$88,220

$110,835

$332,085

$257,193

Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Segment Profit to Adjusted Operating Income

(In thousands)

(Unaudited)

Three months ended Nine months ended

September September June 27, September SeptemberSegment profit-GAAP 26, 28, 26, 28, 2020 2020 2019 2020 2019

Specialty Chemicals and $32,600 $17,074 $32,938 $98,208 $65,505Engineered Materials (SCEM)

Microcontamination Control 64,915 46,792 62,137 177,219 137,241(MC)

Advanced Materials Handling 33,266 17,077 22,809 76,707 54,487(AMH)

Total segment profit 130,781 80,943 117,884 352,134 257,233

Amortization of intangible 11,749 15,152 13,216 41,176 50,400assets

Unallocated expenses 12,271 12,998 9,956 28,741 51,640

Total operating income $106,761 $52,793 $94,712 $282,217 $155,193

Three months ended Nine months ended

September September June 27, September SeptemberAdjusted segment profit 26, 28, 26, 28, 2020 2020 2019 2020 2019

SCEM segment profit $32,600 $17,074 $32,938 $98,208 $65,505

Integration costs - - (1,557) (1,557) -

Severance and restructuring 277 2,143 455 906 2,662costs

Charge for fair value write-up - 4,483 - 235 5,298of acquired inventory sold

SCEM adjusted segment profit $32,877 $23,700 $31,836 $97,792 $73,465



MC segment profit $64,915 $46,792 $62,137 $177,219 $137,241

Severance and restructuring 301 2,977 494 985 3,701costs

Charge for fair value write-up - - - 126 2,035of acquired inventory sold

MC adjusted segment profit $65,216 $49,769 $62,631 $178,330 $142,977



AMH segment profit $33,266 $17,077 $22,809 $76,707 $54,487

Severance and restructuring 213 3,135 814 1,162 3,713costs

Charge for fair value write-up 229 - - 229 - of acquired inventory sold

AMH adjusted segment profit $33,708 $20,212 $23,623 $78,098 $58,200



Unallocated general and $12,271 $12,998 $9,956 $28,741 $51,640administrative expenses

Unallocated deal and (1,902) (7,289) (2,415) (5,796) (31,773)integration costs

Unallocated severance and (180) (248) (286) (810) (2,418)restructuring costs

Adjusted unallocated general $10,189 $5,461 $7,255 $22,135 $17,449and administrative expenses



Total adjusted segment profit $131,801 $93,681 $118,090 $354,220 $274,642

Adjusted amortization of - - - - -intangible assets

Adjusted unallocated general 10,189 5,461 7,255 22,135 17,449and administrative expenses

Total adjusted operating $121,612 $88,220 $110,835 $332,085 $257,193income

Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA

(In thousands)

(Unaudited)

Three months ended

Nine months ended

September 26,

2020

September 28,

2019

June 27,

2020

September 26,

2020

September 28,

2019

Net sales

$480,987

$394,147

$448,405

$1,341,719

$1,164,068

Net income

$79,303

$40,767

$68,036

$208,345

$197,422

Net income - as a % of net sales

16.5%

10.3%

15.2%

15.5%

17.0%

Adjustments to net income:

Income tax expense

16,559

876

14,361

39,542

49,533

Interest expense, net

12,651

10,216

12,792

35,681

29,567

Other (income) expense, net

(1,752)

934

(477)

(1,351)

(121,329)

GAAP - Operating income

106,761

52,793

94,712

282,217

155,193

Operating margin - as a % of net sales

22.2%

13.4%

21.1%

21.0%

13.3%

Charge for fair value write-up of acquired inventory sold

229

4,483

-

590

7,333

Deal and transaction costs

642

4,891

503

2,576

25,191

Integration costs

1,260

2,398

355

1,663

6,582

Severance and restructuring costs

971

8,503

2,049

3,863

12,494

Amortization of intangible assets

11,749

15,152

13,216

41,176

50,400

Adjusted operating income

121,612

88,220

110,835

332,085

257,193

Adjusted operating margin - as a % of net sales

25.3%

22.4%

24.7%

24.8%

22.1%

Depreciation

20,777

19,306

20,639

62,064

54,623

Adjusted EBITDA

$142,389

$107,526

$131,474

$394,149

$311,816

Adjusted EBITDA - as a % of net sales

29.6%

27.3%

29.3%

29.4%

26.8%

Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Net Income to Adjusted Operating Income and AdjustedEBITDA

(In thousands)

(Unaudited)

Three months ended Nine months ended

September September June 27, September September 26, 28, 26, 28, 2020 2020 2019 2020 2019

Net sales $480,987 $394,147 $448,405 $1,341,719 $1,164,068

Net income $79,303 $40,767 $68,036 $208,345 $197,422

Net income - as a % of net 16.5% 10.3% 15.2% 15.5% 17.0%sales

Adjustments to net income:

Income tax expense 16,559 876 14,361 39,542 49,533

Interest expense, net 12,651 10,216 12,792 35,681 29,567

Other (income) expense, net (1,752) 934 (477) (1,351) (121,329)

GAAP - Operating income 106,761 52,793 94,712 282,217 155,193

Operating margin - as a % of 22.2% 13.4% 21.1% 21.0% 13.3%net sales

Charge for fair valuewrite-up of acquired 229 4,483 - 590 7,333inventory sold

Deal and transaction costs 642 4,891 503 2,576 25,191

Integration costs 1,260 2,398 355 1,663 6,582

Severance and restructuring 971 8,503 2,049 3,863 12,494costs

Amortization of intangible 11,749 15,152 13,216 41,176 50,400assets

Adjusted operating income 121,612 88,220 110,835 332,085 257,193

Adjusted operating margin - 25.3% 22.4% 24.7% 24.8% 22.1%as a % of net sales

Depreciation 20,777 19,306 20,639 62,064 54,623

Adjusted EBITDA $142,389 $107,526 $131,474 $394,149 $311,816

Adjusted EBITDA - as a % of 29.6% 27.3% 29.3% 29.4% 26.8%net sales

Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Net Income and Diluted Earnings per Common Share to Non-GAAP Net Income and Diluted Non-GAAP Earnings per Common Share

(In thousands, except per share data)

(Unaudited)

Three months ended

Nine months ended

September 26,

2020

September 28,

2019

June 27,

2020

September 26,

2020

September 28,

2019

GAAP net income

$79,303

$40,767

$68,036

$208,345

$197,422

Adjustments to net income:

Charge for fair value write-up of inventory acquired

229

4,483

-

590

7,333

Deal and transaction costs

642

4,891

503

2,576

25,602

Integration costs

1,260

2,398

355

1,663

6,582

Severance and restructuring costs

971

8,503

2,049

3,863

12,494

Loss on debt extinguishment

908

-

1,470

2,378

-

Versum termination fee, net

-

-

-

-

(122,000)

Amortization of intangible assets

11,749

15,152

13,216

41,176

50,400

Tax effect of legal entity restructuring

-

-

-

-

9,398

Tax effect of adjustments to net income and discrete items1

(3,602)

(8,015)

(4,048)

(11,979)

2,274

Non-GAAP net income

$91,460

$68,179

$81,581

$248,612

$189,505

Diluted earnings per common share

$0.58

$0.30

$0.50

$1.53

$1.45

Effect of adjustments to net income

$0.09

$0.20

$0.10

$0.30

$(0.06)

Diluted non-GAAP earnings per common share

$0.67

$0.50

$0.60

$1.83

$1.39

1The tax effect of pre-tax adjustments to net income was calculated using the applicable marginal tax rate during the respective years.

Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Net Income and Diluted Earnings per Common Share toNon-GAAP Net Income and Diluted Non-GAAP Earnings per Common Share

(In thousands, except per share data)

(Unaudited)

Three months ended Nine months ended

September September June September September 26, 28, 27, 26, 28,

2020 2019 2020 2020 2019

GAAP net income $79,303 $40,767 $68,036 $208,345 $197,422

Adjustments to net income:

Charge for fair value write-up 229 4,483 - 590 7,333of inventory acquired

Deal and transaction costs 642 4,891 503 2,576 25,602

Integration costs 1,260 2,398 355 1,663 6,582

Severance and restructuring 971 8,503 2,049 3,863 12,494costs

Loss on debt extinguishment 908 - 1,470 2,378 -

Versum termination fee, net - - - - (122,000)

Amortization of intangible 11,749 15,152 13,216 41,176 50,400assets

Tax effect of legal entity - - - - 9,398restructuring

Tax effect of adjustments to (3,602) (8,015) (4,048) (11,979) 2,274net income and discrete items^1

Non-GAAP net income $91,460 $68,179 $81,581 $248,612 $189,505



Diluted earnings per common $0.58 $0.30 $0.50 $1.53 $1.45share

Effect of adjustments to net $0.09 $0.20 $0.10 $0.30 $(0.06)income

Diluted non-GAAP earnings per $0.67 $0.50 $0.60 $1.83 $1.39common share

1The tax effect of pre-tax adjustments to net income was calculated using the applicable marginal tax rate during the respective years.

Entegris, Inc. and Subsidiaries

Reconciliation of GAAP Outlook to Non-GAAP Outlook

(In millions, except per share data)

(Unaudited)

Fourth-Quarter Outlook

Reconciliation GAAP net income to non-GAAP net income December 31, 2020

GAAP net income $75 - $82

Adjustments to net income:

Restructuring and integration costs 1

Amortization of intangible assets 12

Income tax effect (4)

Non-GAAP net income $84 - $91

Fourth-Quarter Outlook

Reconciliation GAAP diluted earnings per share to non-GAAP December 31,diluted earnings per share 2020

Diluted earnings per common share $0.55 - $0.60

Adjustments to diluted earnings per common share:

Restructuring and integration costs 0.01

Amortization of intangible assets 0.08

Income tax effect (0.02)

Diluted non-GAAP earnings per common share $0.62 to $0.67

View source version on businesswire.com: https://www.businesswire.com/news/home/20201022005294/en/

CONTACT: Bill Seymour VP of Investor Relations T + 1 952 556 1844 bill.seymour@entegris.com