Form 8-K ENTEGRIS INC For: Oct 26
 | PRESS RELEASE Bill Seymour VP of Investor Relations T + 1 952 556 1844 bill.seymour@entegris.com | |||||||||||||
Exhibit 99.1
FOR RELEASE AT 6:00 AM EDT
ENTEGRIS REPORTS RESULTS FOR THIRD QUARTER OF 2021
•Third-quarter revenue of $579 million, increased 20% from prior year
•Third-quarter GAAP diluted EPS of $0.86, increased 48%
•Third-quarter non-GAAP diluted EPS of $0.92, increased 37%
BILLERICA, Mass., October 26, 2021 - Entegris, Inc. (NASDAQ: ENTG), today reported its financial results for the Company’s third quarter ended October 2, 2021.
Third-quarter sales were $579.5 million, an increase of 20% from the same quarter last year. Third-quarter GAAP net income was $117.5 million, or $0.86 per diluted share, which included $11.8 million of amortization of intangible assets and $1.3 million of integration costs. Non-GAAP net income was $125.4 million for the third quarter and non-GAAP earnings per diluted share was $0.92.
Bertrand Loy, Entegris’ president and chief executive officer, said: “In the third quarter, we continued to deliver on our growth strategy in a very dynamic supply chain environment. I am proud that we have been able to achieve over 23 percent organic sales growth year-to-date.”
Mr. Loy added: “While we expect some of the supply chain issues to linger, the record demand for our solution set continues and we are maintaining our outlook for the full year 2021. Looking further ahead, we have a high degree of conviction in our growth prospects, driven by positive secular trends in the semiconductor market and the accelerating pace of transition to more complex device architectures. We believe this is uniquely favorable to our company, because the capabilities we have built around process materials and materials purity will be indispensable enablers of these new chip architectures and will translate into a steadily expanding Entegris content per wafer.”
Quarterly Financial Results Summary
(in thousands, except percentages and per share data)
| GAAP Results | October 2, 2021 | September 26, 2020 | July 3, 2021 | ||||||||
| Net sales | $579,493 | $480,987 | $571,352 | ||||||||
| Operating income | $139,357 | $106,761 | $138,889 | ||||||||
| Operating margin - as a % of net sales | 24.0 | % | 22.2 | % | 24.3 | % | |||||
| Net income | $117,461 | $79,303 | $88,770 | ||||||||
| Diluted earnings per common share | $0.86 | $0.58 | $0.65 | ||||||||
| Non-GAAP Results | |||||||||||
| Non-GAAP adjusted operating income | $152,696 | $121,612 | $151,603 | ||||||||
| Non-GAAP adjusted operating margin - as a % of net sales | 26.3 | % | 25.3 | % | 26.5 | % | |||||
| Non-GAAP net income | $125,383 | $91,460 | $116,711 | ||||||||
| Diluted non-GAAP earnings per common share | $0.92 | $0.67 | $0.85 | ||||||||
Fourth-Quarter Outlook
For the fourth quarter ending December 31, 2021, the Company expects sales of $580 million to $600 million, net income of $109 million to $116 million and diluted earnings per common share between $0.80 and $0.85. On a non-GAAP basis, the Company expects diluted earnings per common share to range from $0.87 to $0.92, reflecting net income on a non-GAAP basis in the range of $119 million to $126 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 other substrates for a broad set of applications in the semiconductor, life sciences and other high-technology industries.
Third-Quarter Results Conference Call Details
Entegris will hold a conference call to discuss its results for the third quarter on Tuesday, October 26, 2021, at 9:00 a.m. Eastern Time. Participants should dial 800-437-2398 or +1 323-289-6576, referencing confirmation code 9127390. 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 Here using passcode 9127390.
The call can also be accessed live and on-demand from the Entegris website. Go to https://investor.entegris.com/events-and-presentations 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 will be posted on the Investor Relations section of www.entegris.com Tuesday morning before the call.
Entegris, Inc. - page 2 of 14
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 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, 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 provides supplemental non-GAAP financial measures to better understand and manage its business and believes these measures provide investors and analysts additional and meaningful information for the assessment of the Company’s ongoing results. Management also uses these non-GAAP measures to assist in the evaluation of the performance of its business segments and to make operating decisions. Management believes that the Company’s non-GAAP measures help indicate the Company’s baseline performance before certain gains, losses or other charges that may not be indicative of the Company’s business or future outlook, and that non-GAAP measures offer a more consistent view of business performance. The Company believes the non-GAAP measures aid investors’ overall understanding of the Company’s results by providing a higher degree of transparency for such items and providing a level of disclosure that will help investors generally understand how management plans, measures and evaluates the Company’s business performance. Management believes that the inclusion of non-GAAP measures provides greater consistency in its financial reporting and facilitates investors’ understanding of the Company’s historical operating trends by providing an additional basis for comparisons to prior periods. 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 the impact of the COVID-19 pandemic on the Company’s operations and markets, including supply chain issues related thereto; future period guidance; future sales, net income, diluted earnings per common share, non-GAAP diluted earnings per share, 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 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; raw material shortages, supply and labor constraints and price increases; 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; changes in government regulations of the countries in which the Company operates, including the imposition of tariffs, export controls and other trade laws and restrictions and changes to foreign and national security policy, especially as they relate to China; 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
Entegris, Inc. - page 3 of 14
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, 2020, filed on February 5, 2021, and in the Company’s other periodic filings. The Company assumes no obligation to update any forward-looking statements or information contained herein, which speak as of their respective dates.
Entegris, Inc. - page 4 of 14
Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
| Three months ended | ||||||||||||||
| October 2, 2021 | September 26, 2020 | July 3, 2021 | ||||||||||||
| Net sales | $579,493 | $480,987 | $571,352 | |||||||||||
| Cost of sales | 315,289 | 254,987 | 305,968 | |||||||||||
| Gross profit | 264,204 | 226,000 | 265,384 | |||||||||||
| Selling, general and administrative expenses | 71,032 | 71,195 | 72,621 | |||||||||||
| Engineering, research and development expenses | 41,972 | 36,295 | 41,972 | |||||||||||
| Amortization of intangible assets | 11,843 | 11,749 | 11,902 | |||||||||||
| Operating income | 139,357 | 106,761 | 138,889 | |||||||||||
| Interest expense, net | 9,339 | 12,651 | 10,643 | |||||||||||
| Other expense (income), net | 1,917 | (1,752) | 23,560 | |||||||||||
| Income before income tax expense | 128,101 | 95,862 | 104,686 | |||||||||||
| Income tax expense | 10,640 | 16,559 | 15,916 | |||||||||||
| Net income | $117,461 | $79,303 | $88,770 | |||||||||||
| Basic earnings per common share: | $0.87 | $0.59 | $0.66 | |||||||||||
| Diluted earnings per common share: | $0.86 | $0.58 | $0.65 | |||||||||||
| Weighted average shares outstanding: | ||||||||||||||
| Basic | 135,583 | 134,957 | 135,498 | |||||||||||
| Diluted | 136,631 | 136,252 | 136,533 | |||||||||||
Entegris, Inc. - page 5 of 14
Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
| Nine months ended | |||||||||||
| October 2, 2021 | September 26, 2020 | ||||||||||
| Net sales | $1,663,689 | $1,341,719 | |||||||||
| Cost of sales | 899,115 | 722,869 | |||||||||
| Gross profit | 764,574 | 618,850 | |||||||||
| Selling, general and administrative expenses | 215,042 | 196,958 | |||||||||
| Engineering, research and development expenses | 121,692 | 98,499 | |||||||||
| Amortization of intangible assets | 35,616 | 41,176 | |||||||||
| Operating income | 392,224 | 282,217 | |||||||||
| Interest expense, net | 31,563 | 35,681 | |||||||||
| Other expense (income), net | 29,807 | (1,351) | |||||||||
| Income before income tax expense | 330,854 | 247,887 | |||||||||
| Income tax expense | 39,947 | 39,542 | |||||||||
| Net income | $290,907 | $208,345 | |||||||||
| Basic earnings per common share: | $2.15 | $1.55 | |||||||||
| Diluted earnings per common share: | $2.13 | $1.53 | |||||||||
| Weighted average shares outstanding: | |||||||||||
| Basic | 135,383 | 134,801 | |||||||||
| Diluted | 136,556 | 136,209 | |||||||||
Entegris, Inc. - page 6 of 14
Entegris, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
| October 2, 2021 | December 31, 2020 | ||||||||||||||||
| ASSETS | |||||||||||||||||
| Current assets: | |||||||||||||||||
| Cash and cash equivalents | $475,752 | $580,893 | |||||||||||||||
| Trade accounts and notes receivable, net | 315,073 | 264,392 | |||||||||||||||
| Inventories, net | 429,016 | 323,944 | |||||||||||||||
| Deferred tax charges and refundable income taxes | 21,760 | 21,136 | |||||||||||||||
| Other current assets | 34,104 | 43,892 | |||||||||||||||
| Total current assets | 1,275,705 | 1,234,257 | |||||||||||||||
| Property, plant and equipment, net | 597,630 | 525,367 | |||||||||||||||
| Other assets: | |||||||||||||||||
| Right-of-use assets | 56,990 | 45,924 | |||||||||||||||
| Goodwill | 749,933 | 748,037 | |||||||||||||||
| Intangible assets, net | 302,487 | 337,632 | |||||||||||||||
| Deferred tax assets and other noncurrent tax assets | 17,565 | 14,519 | |||||||||||||||
| Other | 11,965 | 11,960 | |||||||||||||||
| Total assets | $3,012,275 | $2,917,696 | |||||||||||||||
| LIABILITIES AND EQUITY | |||||||||||||||||
| Current liabilities | |||||||||||||||||
| Accounts payable | $120,611 | $81,618 | |||||||||||||||
| Accrued liabilities | 181,813 | 177,012 | |||||||||||||||
| Income tax payable | 6,989 | 43,996 | |||||||||||||||
| Total current liabilities | 309,413 | 302,626 | |||||||||||||||
| Long-term debt, excluding current maturities | 936,704 | 1,085,783 | |||||||||||||||
| Long-term lease liability | 52,486 | 39,730 | |||||||||||||||
| Other liabilities | 102,892 | 110,063 | |||||||||||||||
| Shareholders’ equity | 1,610,780 | 1,379,494 | |||||||||||||||
| Total liabilities and equity | $3,012,275 | $2,917,696 | |||||||||||||||
Entegris, Inc. - page 7 of 14
Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Three months ended | Nine months ended | |||||||||||||
| October 2, 2021 | September 26, 2020 | October 2, 2021 | September 26, 2020 | |||||||||||
| Operating activities: | ||||||||||||||
| Net income | $117,461 | $79,303 | $290,907 | $208,345 | ||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
| Depreciation | 22,841 | 20,777 | 67,510 | 62,064 | ||||||||||
| Amortization | 11,843 | 11,749 | 35,616 | 41,176 | ||||||||||
| Stock-based compensation expense | 7,467 | 5,903 | 22,124 | 16,552 | ||||||||||
| Loss on extinguishment of debt and modification | — | 908 | 23,338 | 2,378 | ||||||||||
| Other | (1,773) | 19,302 | (1,976) | 30,727 | ||||||||||
| Changes in operating assets and liabilities, net of effects of acquisitions: | ||||||||||||||
| Trade accounts and notes receivable | (5,127) | (23,280) | (53,358) | (65,367) | ||||||||||
| Inventories | (45,464) | 1,084 | (115,187) | (54,278) | ||||||||||
| Accounts payable and accrued liabilities | 52,924 | 4,433 | 37,577 | 10,076 | ||||||||||
| Income taxes payable, refundable income taxes and noncurrent taxes payable | (8,833) | (16,407) | (35,275) | (11,995) | ||||||||||
| Other | (1,835) | (2,540) | 13,198 | 2,978 | ||||||||||
| Net cash provided by operating activities | 149,504 | 101,232 | 284,474 | 242,656 | ||||||||||
| Investing activities: | ||||||||||||||
| Acquisition of property and equipment | (48,885) | (32,687) | (133,986) | (79,560) | ||||||||||
| Acquisition of business, net of cash acquired | — | (35,500) | (2,250) | (111,145) | ||||||||||
| Other | 4,326 | 54 | 4,416 | 265 | ||||||||||
| Net cash used in investing activities | (44,559) | (68,133) | (131,820) | (190,440) | ||||||||||
| Financing activities: | ||||||||||||||
| Proceeds from revolving credit facility and long-term debt | — | — | 451,000 | 617,000 | ||||||||||
| Payments of revolving credit facility and long-term debt | — | (100,000) | (601,000) | (468,000) | ||||||||||
| Payments for debt extinguishment costs | — | — | (19,080) | — | ||||||||||
| Payments for dividends | (10,853) | (10,794) | (32,650) | (32,446) | ||||||||||
| Issuance of common stock | 1,055 | 3,150 | 17,872 | 4,899 | ||||||||||
| Taxes paid related to net share settlement of equity awards | (275) | (11,836) | (15,368) | (24,556) | ||||||||||
| Repurchase and retirement of common stock | (20,000) | — | (50,000) | (29,564) | ||||||||||
| Deferred acquisition payments | — | — | — | (16,125) | ||||||||||
| Other | (486) | (1) | (5,287) | (6,856) | ||||||||||
| Net cash (used in) provided by financing activities | (30,559) | (119,481) | (254,513) | 44,352 | ||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 333 | 1,687 | (3,282) | (507) | ||||||||||
| Increase (decrease) in cash and cash equivalents | 74,719 | (84,695) | (105,141) | 96,061 | ||||||||||
| Cash and cash equivalents at beginning of period | 401,033 | 532,667 | 580,893 | 351,911 | ||||||||||
| Cash and cash equivalents at end of period | $475,752 | $447,972 | $475,752 | $447,972 | ||||||||||
Entegris, Inc. - page 8 of 14
Entegris, Inc. and Subsidiaries
Segment Information
(In thousands)
(Unaudited)
| Three months ended | Nine months ended | |||||||||||||||||||
| Net sales | October 2, 2021 | September 26, 2020 | July 3, 2021 | October 2, 2021 | September 26, 2020 | |||||||||||||||
| Specialty Chemicals and Engineered Materials | $176,380 | $150,480 | $180,366 | $523,287 | $440,907 | |||||||||||||||
| Microcontamination Control | 225,877 | 193,541 | 227,521 | 660,497 | 536,560 | |||||||||||||||
| Advanced Materials Handling | 186,200 | 144,370 | 172,502 | 507,243 | 386,941 | |||||||||||||||
| Inter-segment elimination | (8,964) | (7,404) | (9,037) | (27,338) | (22,689) | |||||||||||||||
| Total net sales | $579,493 | $480,987 | $571,352 | $1,663,689 | $1,341,719 | |||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||||||
| Segment profit | October 2, 2021 | September 26, 2020 | July 3, 2021 | October 2, 2021 | September 26, 2020 | |||||||||||||||
| Specialty Chemicals and Engineered Materials | $41,091 | $32,600 | $44,945 | $120,592 | $98,208 | |||||||||||||||
| Microcontamination Control | 78,399 | 64,915 | 78,132 | 227,097 | 177,219 | |||||||||||||||
| Advanced Materials Handling | 40,503 | 33,266 | 42,093 | 114,691 | 76,707 | |||||||||||||||
| Total segment profit | 159,993 | 130,781 | 165,170 | 462,380 | 352,134 | |||||||||||||||
| Amortization of intangibles | 11,843 | 11,749 | 11,902 | 35,616 | 41,176 | |||||||||||||||
| Unallocated expenses | 8,793 | 12,271 | 14,379 | 34,540 | 28,741 | |||||||||||||||
| Total operating income | $139,357 | $106,761 | $138,889 | $392,224 | $282,217 | |||||||||||||||
Entegris, Inc. - page 9 of 14
Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Gross Profit to Adjusted Gross Profit
(In thousands)
(Unaudited)
| Three months ended | Nine months ended | |||||||||||||||||||
| October 2, 2021 | September 26, 2020 | July 3, 2021 | October 2, 2021 | September 26, 2020 | ||||||||||||||||
| Net sales | $579,493 | $480,987 | $571,352 | $1,663,689 | $1,341,719 | |||||||||||||||
| Gross profit-GAAP | $264,204 | $226,000 | $265,384 | $764,574 | $618,850 | |||||||||||||||
| Adjustments to gross profit: | ||||||||||||||||||||
| Integration costs | — | — | — | — | (1,557) | |||||||||||||||
| Severance and restructuring costs | — | — | — | — | 465 | |||||||||||||||
| Charge for fair value mark-up of acquired inventory sold | — | 229 | — | — | 590 | |||||||||||||||
| Adjusted gross profit | $264,204 | $226,229 | $265,384 | $764,574 | $618,348 | |||||||||||||||
| Gross margin - as a % of net sales | 45.6 | % | 47.0 | % | 46.4 | % | 46.0 | % | 46.1 | % | ||||||||||
| Adjusted gross margin - as a % of net sales | 45.6 | % | 47.0 | % | 46.4 | % | 46.0 | % | 46.1 | % | ||||||||||
Entegris, Inc. - page 10 of 14
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 | October 2, 2021 | September 26, 2020 | July 3, 2021 | October 2, 2021 | September 26, 2020 | |||||||||||||||
| Specialty Chemicals and Engineered Materials (SCEM) | $41,091 | $32,600 | $44,945 | $120,592 | $98,208 | |||||||||||||||
| Microcontamination Control (MC) | 78,399 | 64,915 | 78,132 | 227,097 | 177,219 | |||||||||||||||
| Advanced Materials Handling (AMH) | 40,503 | 33,266 | 42,093 | 114,691 | 76,707 | |||||||||||||||
| Total segment profit | 159,993 | 130,781 | 165,170 | 462,380 | 352,134 | |||||||||||||||
| Amortization of intangible assets | 11,843 | 11,749 | 11,902 | 35,616 | 41,176 | |||||||||||||||
| Unallocated expenses | 8,793 | 12,271 | 14,379 | 34,540 | 28,741 | |||||||||||||||
| Total operating income | $139,357 | $106,761 | $138,889 | $392,224 | $282,217 | |||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||||||
| Adjusted segment profit | October 2, 2021 | September 26, 2020 | July 3, 2021 | October 2, 2021 | September 26, 2020 | |||||||||||||||
| SCEM segment profit | $41,091 | $32,600 | $44,945 | $120,592 | $98,208 | |||||||||||||||
| Integration costs | — | — | — | — | (1,557) | |||||||||||||||
| Severance and restructuring costs | 69 | 277 | 51 | 167 | 906 | |||||||||||||||
| Charge for fair value write-up of acquired inventory sold | — | — | — | — | 235 | |||||||||||||||
| SCEM adjusted segment profit | $41,160 | $32,877 | $44,996 | $120,759 | $97,792 | |||||||||||||||
| MC segment profit | $78,399 | $64,915 | $78,132 | $227,097 | $177,219 | |||||||||||||||
| Severance and restructuring costs | 75 | 301 | 55 | 181 | 985 | |||||||||||||||
| Charge for fair value write-up of acquired inventory sold | — | — | — | — | 126 | |||||||||||||||
| MC adjusted segment profit | $78,474 | $65,216 | $78,187 | $227,278 | $178,330 | |||||||||||||||
| AMH segment profit | $40,503 | $33,266 | $42,093 | $114,691 | $76,707 | |||||||||||||||
| Severance and restructuring costs | 52 | 213 | 38 | 127 | 1,162 | |||||||||||||||
| Charge for fair value write-up of acquired inventory sold | — | 229 | — | — | 229 | |||||||||||||||
| AMH adjusted segment profit | $40,555 | $33,708 | $42,131 | $114,818 | $78,098 | |||||||||||||||
| Unallocated general and administrative expenses | $8,793 | $12,271 | $14,379 | $34,540 | $28,741 | |||||||||||||||
| Unallocated deal and integration costs | (1,290) | (1,902) | (632) | (3,966) | (5,796) | |||||||||||||||
| Unallocated severance and restructuring costs | (10) | (180) | (36) | (54) | (810) | |||||||||||||||
| Adjusted unallocated general and administrative expenses | $7,493 | $10,189 | $13,711 | $30,520 | $22,135 | |||||||||||||||
| Total adjusted segment profit | $160,189 | $131,801 | $165,314 | $462,855 | $354,220 | |||||||||||||||
| Adjusted amortization of intangible assets | — | — | — | — | — | |||||||||||||||
| Adjusted unallocated general and administrative expenses | 7,493 | 10,189 | 13,711 | 30,520 | 22,135 | |||||||||||||||
| Total adjusted operating income | $152,696 | $121,612 | $151,603 | $432,335 | $332,085 | |||||||||||||||
Entegris, Inc. - page 11 of 14
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 | |||||||||||||||||||
| October 2, 2021 | September 26, 2020 | July 3, 2021 | October 2, 2021 | September 26, 2020 | ||||||||||||||||
| Net sales | $579,493 | $480,987 | $571,352 | $1,663,689 | $1,341,719 | |||||||||||||||
| Net income | $117,461 | $79,303 | $88,770 | $290,907 | $208,345 | |||||||||||||||
| Net income - as a % of net sales | 20.3 | % | 16.5 | % | 15.5 | % | 17.5 | % | 15.5 | % | ||||||||||
| Adjustments to net income: | ||||||||||||||||||||
| Income tax expense | 10,640 | 16,559 | 15,916 | 39,947 | 39,542 | |||||||||||||||
| Interest expense, net | 9,339 | 12,651 | 10,643 | 31,563 | 35,681 | |||||||||||||||
| Other expense (income), net | 1,917 | (1,752) | 23,560 | 29,807 | (1,351) | |||||||||||||||
| GAAP - Operating income | 139,357 | 106,761 | 138,889 | 392,224 | 282,217 | |||||||||||||||
| Operating margin - as a % of net sales | 24.0 | % | 22.2 | % | 24.3 | % | 23.6 | % | 21.0 | % | ||||||||||
| Charge for fair value write-up of acquired inventory sold | — | 229 | — | — | 590 | |||||||||||||||
| Deal and transaction costs | — | 642 | — | — | 2,576 | |||||||||||||||
| Integration costs | 1,290 | 1,260 | 632 | 3,966 | 1,663 | |||||||||||||||
| Severance and restructuring costs | 206 | 971 | 180 | 529 | 3,863 | |||||||||||||||
| Amortization of intangible assets | 11,843 | 11,749 | 11,902 | 35,616 | 41,176 | |||||||||||||||
| Adjusted operating income | 152,696 | 121,612 | 151,603 | 432,335 | 332,085 | |||||||||||||||
| Adjusted operating margin - as a % of net sales | 26.3 | % | 25.3 | % | 26.5 | % | 26.0 | % | 24.8 | % | ||||||||||
| Depreciation | 22,841 | 20,777 | 22,574 | 67,510 | 62,064 | |||||||||||||||
| Adjusted EBITDA | $175,537 | $142,389 | $174,177 | $499,845 | $394,149 | |||||||||||||||
| Adjusted EBITDA - as a % of net sales | 30.3 | % | 29.6 | % | 30.5 | % | 30.0 | % | 29.4 | % | ||||||||||
Entegris, Inc. - page 12 of 14
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 | |||||||||||||||||||
| October 2, 2021 | September 26, 2020 | July 3, 2021 | October 2, 2021 | September 26, 2020 | ||||||||||||||||
| GAAP net income | $117,461 | $79,303 | $88,770 | $290,907 | $208,345 | |||||||||||||||
| Adjustments to net income: | ||||||||||||||||||||
| Charge for fair value write-up of inventory acquired | — | 229 | — | — | 590 | |||||||||||||||
| Deal and transaction costs | — | 642 | — | — | 2,576 | |||||||||||||||
| Integration costs | 1,290 | 1,260 | 632 | 3,966 | 1,663 | |||||||||||||||
| Severance and restructuring costs | 206 | 971 | 180 | 529 | 3,863 | |||||||||||||||
| Loss on extinguishment of debt and modification | — | 908 | 23,338 | 23,338 | 2,378 | |||||||||||||||
| Amortization of intangible assets | 11,843 | 11,749 | 11,902 | 35,616 | 41,176 | |||||||||||||||
Tax effect of adjustments to net income and discrete items1 | (5,417) | (3,602) | (8,111) | (16,749) | (11,979) | |||||||||||||||
| Non-GAAP net income | $125,383 | $91,460 | $116,711 | $337,607 | $248,612 | |||||||||||||||
| Diluted earnings per common share | $0.86 | $0.58 | $0.65 | $2.13 | $1.53 | |||||||||||||||
| Effect of adjustments to net income | $0.06 | $0.09 | $0.20 | $0.34 | $0.30 | |||||||||||||||
| Diluted non-GAAP earnings per common share | $0.92 | $0.67 | $0.85 | $2.47 | $1.83 | |||||||||||||||
1The tax effect of pre-tax adjustments to net income was calculated using the applicable marginal tax rate during the respective years.
Entegris, Inc. - page 13 of 14
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, 2021 | ||||
| GAAP net income | $109 - $116 | ||||
| Adjustments to net income: | |||||
| Restructuring and integration costs | 2 | ||||
| Amortization of intangible assets | 10 | ||||
| Income tax effect | (2) | ||||
| Non-GAAP net income | $119 - $126 | ||||
| Fourth-Quarter Outlook | |||||
| Reconciliation GAAP diluted earnings per share to non-GAAP diluted earnings per share | December 31, 2021 | ||||
| Diluted earnings per common share | $0.80 - $0.85 | ||||
| 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 | $0.87 - $0.92 | ||||
### END ###
Entegris, Inc. - page 14 of 14
Earnings Summary October 26, 2021 Third Quarter 2021 Exhibit 99.2
This presentation 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 net revenue, operating expenses, net income, diluted earnings per common share, non-GAAP operating expenses, non-GAAP net income, diluted non-GAAP earnings per common share, and other financial metrics; future repayments under the Company's credit facilities; 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; raw material shortages, supply constraints and price increases; 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; 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, 2020, filed with the Securities and Exchange Commission on February 5, 2021, 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. This presentation contains references to “Adjusted EBITDA,” “Adjusted EBITDA – as a % of Net Sales,” “Adjusted Operating Income,” “Adjusted Operating Margin,” “Adjusted Gross Profit,” “Adjusted Gross Margin – as a % of Net Sales,” “Adjusted Segment Profit,” “Adjusted Segment Profit Margin,” “Non-GAAP Operating Expenses,” "Non-GAAP Tax Rate," “Non-GAAP Net Income,” “Diluted Non-GAAP Earnings per Common Share” and "Free Cash Flow" that are not presented in accordance GAAP. The non-GAAP financial measures should not be considered in isolation or as a substitute for GAAP financial measures but should instead be read in conjunction with the GAAP financial measures. Further information with respect to and reconciliations of such measures to the most directly comparable GAAP financial measure can be found attached to this presentation. 2 Safe Harbor
+20% 1$579M REVENUE +31%$139M OPERATING INCOME +48% $0.92 DILUTED NON-GAAP EPS 2 +180 bps24.0%3 OPERATING MARGIN 1. All growth data on this slide is year-on-year. 2. See appendix for GAAP to non-GAAP reconciliations. 3. As a % of net sales. 3 $0.86 DILUTED GAAP EPS +37% Third Quarter 2021 Financial Summary $153M ADJUSTED OPERATING INCOME 2 +26% 26.3%3 ADJUSTED OPERATING MARGIN 2 +100 bps
4 $ in millions, except per share data 3Q21 3Q21 Guidance 2Q21 3Q20 3Q21 over 3Q20 3Q21 over 2Q21 Net Revenue $579.5 $575 - $590 $571.4 $481.0 20.5% 1.4% Gross Margin 45.6% 46.4% 47.0% Operating Expenses $124.8 $129 - $131 $126.5 $119.2 4.7% (1.3%) Operating Income $139.4 $138.9 $106.8 30.5% 0.3% Operating Margin 24.0% 24.3% 22.2% Tax Rate 8.3% 15.2% 17.3% Net Income $117.5 $104 - $111 $88.8 $79.3 48.1% 32.3% Diluted Earnings Per Common Share $0.86 $0.76 - $0.81 $0.65 $0.58 48.3% 32.3% Summary – Consolidated Statement of Operations (GAAP)
5 $ in millions, except per share data 3Q21 3Q21 Guidance 2Q21 3Q20 3Q21 over 3Q20 3Q21 over 2Q21 Net Revenue $579.5 $575 - $590 $571.4 $481.0 20.5% 1.4% Adjusted Gross Margin – as a % of Net Sales2 45.6% 46.4% 47.0% Non-GAAP Operating Expenses3 $111.5 $116 - $118 $113.8 $104.6 6.6% (2.0%) Adjusted Operating Income $152.7 $151.6 $121.6 25.6% 0.7% Adjusted Operating Margin 26.3% 26.5% 25.3% Non-GAAP Tax Rate4 11.4% 17.1% 18.1% Non-GAAP Net Income5 $125.4 $114 - $121 $116.7 $91.5 37.1% 7.4% Diluted Non-GAAP Earnings Per Common Share $0.92 $0.84 - $0.89 $0.85 $0.67 37.3% 8.2% Summary – Consolidated Statement of Operations (Non-GAAP)1 1. See GAAP to non-GAAP reconciliation tables in the appendix of this presentation. 2. Excludes charges for fair value write-up of acquired inventory sold. 3. Excludes amortization expense, deal and transaction costs, integration costs and severance and restructuring costs. 4. Reflects the tax effect of non-GAAP adjustments and discrete tax items to GAAP taxes. 5. Excludes the items noted in footnotes 2 and 3 and the tax effect of non-GAAP adjustments.
6 1. See GAAP to non-GAAP reconciliation tables in the appendix of this presentation. Year-on-year sales growth was primarily driven by advanced deposition materials and specialty gases. Shortages of key raw materials in the quarter were the primary driver in the modest sequential sales decline. –––––– Segment profit margin (adjusted) sequential decline was primarily driven by a benefit from a sale of intellectual property that occurred in the 2nd quarter 2021. $ in millions 3Q21 2Q21 3Q20 3Q21 over 3Q20 3Q21 over 2Q21 Net Revenue $176.4 $180.4 $150.5 17.2% (2.2%) Segment Profit $41.1 $44.9 $32.6 26.0% (8.6%) Segment Profit Margin 23.3% 24.9% 21.7% Adj. Segment Profit1 $41.2 $45.0 $32.9 25.2% (8.5%) Adj. Segment Profit Margin1 23.3% 24.9% 21.8% Specialty Chemicals and Engineered Materials (SCEM) 3Q21 Highlights
7 1. See GAAP to non-GAAP reconciliation tables in the appendix of this presentation. Microcontamination Control (MC) 3Q21 Highlights $ in millions 3Q21 2Q21 3Q20 3Q21 over 3Q20 3Q21 over 2Q21 Net Revenue $225.9 $227.5 $193.5 16.7% (0.7%) Segment Profit $78.4 $78.1 $64.9 20.8% 0.3% Segment Profit Margin 34.7% 34.3% 33.5% Adj. Segment Profit1 $78.5 $78.2 $65.2 20.3% 0.4% Adj. Segment Profit Margin1 34.7% 34.4% 33.7% Sales growth year-to-date was strong across all product lines, especially in liquid filtration. Freight availability issues negatively impacted shipments of large gas purification systems during the quarter.
8 1. See GAAP to non-GAAP reconciliation tables in the appendix of this presentation. Advanced Materials Handling (AMH) 3Q21 Highlights $ in millions 3Q21 2Q21 3Q20 3Q21 over 3Q20 3Q21 over 2Q21 Net Revenue $186.2 $172.5 $144.4 29.0% 7.9% Segment Profit $40.5 $42.1 $33.3 21.8% (3.8%) Segment Profit Margin 21.8% 24.4% 23.0% Adj. Segment Profit1 $40.6 $42.1 $33.7 20.3% (3.7%) Adj. Segment Profit Margin1 21.8% 24.4% 23.3% Year-on-year sales growth was strongest in wafer handling and fluid handling & measurement, as both product lines benefited from the strong industry capex environment. Sales of our Aramus high purity bags also continued to be very strong. –––––– Segment profit margin (adjusted) decline was primarily driven by supply chain inefficiencies.
9 $ in millions 3Q21 2Q21 3Q20 $ Amount % Total $ Amount % Total $ Amount % Total Cash & Cash Equivalents $475.8 15.8% $401.0 14.0% $448.0 16.0% Accounts Receivable, net $315.1 10.5% $309.9 10.8% $300.5 10.7% Inventories $429.0 14.2% $387.6 13.5% $329.7 11.8% Net PP&E $597.6 19.8% $563.3 19.6% $490.3 17.5% Total Assets $3,012.3 $2,872.7 $2,801.6 Current Liabilities $309.4 10.3% $260.5 9.1% $247.4 8.8% Long-term Debt, Excluding Current Maturities $936.7 31.1% $936.4 32.6% $1,085.4 38.7% Total Liabilities $1,401.5 46.5% $1,357.4 47.3% $1,499.3 53.5% Total Shareholders’ Equity $1,610.8 53.5% $1,515.3 52.7% $1,302.3 46.5% AR – DSOs 49.6 49.5 57.0 Inventory Turns 3.1 3.3 3.1 Summary – Balance Sheet Items
10 $ in millions 3Q21 2Q21 3Q20 Beginning Cash Balance $401.0 $548.5 $532.7 Cash provided by operating activities 149.5 81.9 101.2 Capital expenditures (48.9) (41.8) (32.7) Proceeds from revolving credit facilities and long-term debt — 451.0 — Payments on revolving credit facilities and long-term debt — (601.0) (100.0) Acquisition of business, net of cash — (2.3) (35.5) Repurchase and retirement of common stock (20.0) (15.0) — Payments for dividends (10.9) (10.9) (10.8) Other investing activities 4.3 — 0.1 Other financing activities 0.3 (8.7) (8.7) Effect of exchange rates 0.3 (0.8) 1.7 Ending Cash Balance $475.8 $401.0 $448.0 Free Cash Flow1 $100.6 $40.1 $68.5 Adjusted EBITDA2 $175.5 $174.2 $142.4 Adjusted EBITDA – as a % of net sales2 30.3% 30.5% 29.6% Cash Flows 1. Equals cash from operations less capital expenditures. 2. See GAAP to non-GAAP reconciliation tables in the appendix of this presentation.
11 GAAP $ in millions, except per share data 4Q21 Guidance 3Q21 Actual 2Q21 Actual Net Revenue $580 - $600 $579.5 $571.4 Operating Expenses $128 - $130 $124.8 $126.5 Net Income $109- $116 $117.5 $88.8 Diluted Earnings per Common Share $0.80 - $0.85 $0.86 $0.65 Non-GAAP $ in millions, except per share data 4Q21 Guidance 3Q21 Actual 2Q21 Actual Net Revenue $580 - $600 $579.5 $571.4 Non-GAAP Operating Expenses1 $116 - $118 $111.5 $113.8 Non-GAAP Net Income1 $119 - $126 $125.4 $116.7 Diluted non-GAAP Earnings per Common Share1 $0.87 - $0.92 $0.92 $0.85 Outlook 1. See GAAP to non-GAAP reconciliation tables in the appendix of this presentation.
Entegris®, the Entegris Rings Design®, and other product names are trademarks of Entegris, Inc. as listed on entegris.com/trademarks. All product names, logos, and company names are trademarks or registered trademarks of their respective owners. Use of them does not imply any affiliation, sponsorship, or endorsement by the trademark owner. ©2020 Entegris, Inc. All rights reserved. 12
Appendix 13
14 Reconciliation of GAAP Gross Profit to Adjusted Gross Profit Three months ended Nine months ended $ in thousands October 2, 2021 September 26, 2020 July 3, 2021 October 2, 2021 September 26, 2020 Net sales $579,493 $480,987 $571,352 $1,663,689 $1,341,719 Gross profit-GAAP $264,204 $226,000 $265,384 $764,574 $618,850 Adjustments to gross profit: Integration costs — — — — (1,557) Severance and restructuring costs — — — — 465 Charge for fair value mark-up of acquired inventory sold — 229 — — 590 Adjusted gross profit $264,204 $226,229 $265,384 $764,574 $618,348 Gross margin – as a % of net sales 45.6% 47.0% 46.4% 46.0% 46.1% Adjusted gross margin – as a % of net sales 45.6% 47.0% 46.4% 46.0% 46.1%
15 Reconciliation of GAAP Operating Expenses and Tax Rate to Non-GAAP Operating Expenses and Tax Rate Three months ended $ in millions October 2, 2021 September 26, 2020 July 3, 2021 GAAP operating expenses $124.8 $119.2 $126.5 Adjustments to operating expenses: Deal and transaction costs — 0.6 — Integration costs 1.3 1.3 0.6 Severance and restructuring costs 0.2 1.0 0.2 Amortization of intangible assets 11.8 11.7 11.9 Non-GAAP operating expenses $111.5 $104.6 $113.8 GAAP tax rate 8.3% 17.3% 15.2% Other 3.1% 0.8% 1.9% Non-GAAP tax rate 11.4% 18.1% 17.1%
16 $ in thousands Three months ended Nine months ended Adjusted segment profit October 2, 2021 September 26, 2020 July 3, 2021 October 2, 2021 September 26, 2020 SCEM segment profit $41,091 $32,600 $44,945 $120,592 $98,208 Integration costs — — — — (1,557) Severance and restructuring costs 69 277 51 167 906 Charge for fair value write-up of acquired inventory sold — — — — 235 SCEM adjusted segment profit $41,160 $32,877 $44,996 $120,759 $97,792 MC segment profit $78,399 $64,915 $78,132 $227,097 $177,219 Severance and restructuring costs 75 301 55 181 985 Charge for fair value write-up of acquired inventory sold — — — — 126 MC adjusted segment profit $78,474 $65,216 $78,187 $227,278 $178,330 AMH segment profit $40,503 $33,266 $42,093 $114,691 $76,707 Severance and restructuring costs 52 213 38 127 1,162 Charge for fair value write-up of acquired inventory sold — 229 — — 229 AMH adjusted segment profit $40,555 $33,708 $42,131 $114,818 $78,098 Unallocated general and administrative expenses $8,793 $12,271 $14,379 $34,540 $28,741 Unallocated deal and integration costs (1,290) (1,902) (632) (3,966) (5,796) Unallocated severance and restructuring costs (10) (180) (36) (54) (810) Adjusted unallocated general and administrative expenses $7,493 $10,189 $13,711 $30,520 $22,135 Total adjusted segment profit $160,189 $131,801 $165,314 $462,855 $354,220 Adjusted amortization of intangible assets — — — — — Adjusted unallocated general and administrative expenses 7,493 10,189 13,711 30,520 22,135 Total adjusted operating income $152,696 $121,612 $151,603 $432,335 $332,085 $ in thousands Three Months Ended Nine months ended Segment profit-GAAP October 2, 2021 September 26, 2020 July 3, 2021 October 2, 2021 September 26, 2020 Specialty Chemicals and Engineered Materials (SCEM) $41,091 $32,600 $44,945 $120,592 $98,208 Microcontamination Control (MC) 78,399 64,915 78,132 227,097 177,219 Advanced Materials Handling (AMH) 40,503 33,266 42,093 114,691 76,707 Total segment profit 159,993 130,781 165,170 462,380 352,134 Amortization of intangible assets 11,843 11,749 11,902 35,616 41,176 Unallocated expenses 8,793 12,271 14,379 34,540 28,741 Total operating income $139,357 $106,761 $138,889 $392,224 $282,217 Reconciliation of GAAP Segment Profit to Adjusted Operating Income and Adjusted Segment Profit
17 $ in thousands Three Months Ended Nine months ended October 2, 2021 September 26, 2020 July 3, 2021 October 2, 2021 September 26, 2020 Net sales $579,493 $480,987 $571,352 $1,663,689 $1,341,719 Net income $117,461 $79,303 $88,770 $290,907 $208,345 Net income – as a % of net sales 20.3% 16.5% 15.5% 17.5% 15.5% Adjustments to net income: Income tax expense 10,640 16,559 15,916 39,947 39,542 Interest expense, net 9,339 12,651 10,643 31,563 35,681 Other expense (income), net 1,917 (1,752) 23,560 29,807 (1,351) GAAP - Operating income 139,357 106,761 138,889 392,224 282,217 Operating margin - as a % of net sales 24.0% 22.2% 24.3% 23.6% 21.0% Charge for fair value write-up of acquired inventory sold — 229 — — 590 Deal and transaction costs — 642 — — 2,576 Integration costs 1,290 1,260 632 3,966 1,663 Severance and restructuring costs 206 971 180 529 3,863 Amortization of intangible assets 11,843 11,749 11,902 35,616 41,176 Adjusted operating income 152,696 121,612 151,603 432,335 332,085 Adjusted operating margin - as a % of net sales 26.3% 25.3% 26.5% 26.0% 24.8% Depreciation 22,841 20,777 22,574 67,510 62,064 Adjusted EBITDA $175,537 $142,389 $174,177 $499,845 $394,149 Adjusted EBITDA – as a % of net sales 30.3% 29.6% 30.5% 30.0% 29.4% Reconciliation of GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA
18 $ in thousands, except per share data Three months ended Nine months ended October 2, 2021 September 26, 2020 July 3, 2021 October 2, 2021 September 26, 2020 GAAP net income $117,461 $79,303 $88,770 $290,907 $208,345 Adjustments to net income: Charge for fair value write-up of inventory acquired — 229 — — 590 Deal and transaction costs — 642 — — 2,576 Integration costs 1,290 1,260 632 3,966 1,663 Severance and restructuring costs 206 971 180 529 3,863 Loss on extinguishment of debt and modification — 908 23,338 23,338 2,378 Amortization of intangible assets 11,843 11,749 11,902 35,616 41,176 Tax effect of adjustments to net income and discrete items1 (5,417) (3,602) (8,111) (16,749) (11,979) Non-GAAP net income $125,383 $91,460 $116,711 $337,607 $248,612 Diluted earnings per common share $0.86 $0.58 $0.65 $2.13 $1.53 Effect of adjustments to net income $0.06 $0.09 $0.20 $0.34 $0.30 Diluted non-GAAP earnings per common share $0.92 $0.67 $0.85 $2.47 $1.83 Weighted average diluted shares outstanding 136,631 136,252 136,533 136,556 136,209 Reconciliation of GAAP Net Income and Diluted Earnings per Common Share to Non-GAAP Net Income and Diluted Non-GAAP Earnings per Common Share 1. The tax effect of pre-tax adjustments to net income was calculated using the applicable marginal tax rate during the respective years.
19 $ in millions Fourth-Quarter Outlook Reconciliation GAAP net income to non-GAAP net income GAAP net income $109 - $116 Adjustments to net income: Restructuring costs 2 Amortization of intangible assets 10 Income tax effect (2) Non-GAAP net income $119 - $126 Fourth-Quarter Outlook Reconciliation GAAP diluted earnings per share to non-GAAP diluted earnings per share Diluted earnings per common share $0.80 - $0.85 Adjustments to diluted earnings per common share: Restructuring costs 0.01 Amortization of intangible assets 0.08 Income tax effect (0.02) Diluted non-GAAP earnings per common share $0.87 - $0.92 $ in millions Fourth-Quarter Outlook Reconciliation GAAP operating expenses to non-GAAP operating expenses GAAP operating expenses $128 - $130 Adjustments to net income: Restructuring costs 2 Amortization of intangible assets 10 Non-GAAP operating expenses $116 - $118 Reconciliation of GAAP Outlook to Non-GAAP Outlook
20 $ in thousands Q319 Q419 Q120 Q220 Q320 Q420 Q121 Q221 Q321 Sales SCEM $127,750 $146,747 $144,214 $146,213 $150,480 $168,625 $166,541 $180,366 $176,380 MC 155,979 169,794 159,261 183,758 193,541 205,626 207,099 227,521 225,877 AMH 117,256 117,455 116,137 126,434 144,370 151,741 148,541 172,502 186,200 Inter-segment elimination (6,838) (6,998) (7,285) (8,000) (7,404) (8,398) (9,337) (9,037) (8,964) Total Sales $394,147 $426,998 $412,327 $448,405 $480,987 $517,594 $512,844 $571,352 $579,493 Segment Profit SCEM $17,074 $32,822 $32,670 $32,938 $32,600 $29,761 $34,556 $44,945 $41,091 MC 46,792 57,157 50,167 62,137 64,915 71,691 70,566 78,132 78,399 AMH 17,077 20,686 20,632 22,809 33,266 34,321 32,095 42,093 40,503 Total Segment Profit $80,943 $110,665 $103,469 $117,884 $130,781 $135,773 $137,217 $165,170 $159,993 Segment Profit Margin SCEM 13.4% 22.4% 22.7% 22.5% 21.7% 17.6% 20.7% 24.9% 23.3% MC 30.0% 33.7% 31.5% 33.8% 33.5% 34.9% 34.1% 34.3% 34.7% AMH 14.6% 17.6% 17.8% 18.0% 23.0% 22.6% 21.6% 24.4% 21.8% GAAP Segment Trend Data
21 $ in thousands Q319 Q419 Q120 Q220 Q320 Q420 Q121 Q221 Q321 Sales SCEM $127,750 $146,747 $144,214 $146,213 $150,480 $168,625 $166,541 $180,366 $176,380 MC 155,979 169,794 159,261 183,758 193,451 205,626 207,099 227,521 225,877 AMH 117,256 117,455 116,137 126,434 144,370 151,741 148,541 172,502 186,200 Inter-segment elimination (6,838) (6,998) (7,285) (8,000) (7,404) (8,398) (9,337) (9,037) (8,964) Total Sales $394,147 $426,998 $412,327 $448,405 $480,897 $517,594 $512,844 $571,352 $579,493 Adjusted Segment Profit SCEM segment profit $17,074 $32,822 $32,670 $32,938 $32,600 $29,761 $34,556 $44,945 $41,091 Integration costs — — — (1,557) — — — — — Severance and restructuring costs 2,143 184 174 455 277 155 47 51 69 Charge for fair value write-up of acquired inventory sold 4,483 (476) 235 — — — — — — SCEM adjusted segment profit $23,700 $32,530 $33,079 $31,836 $32,877 $29,916 $34,603 $44,996 $41,160 MC segment profit $46,792 $57,157 $50,167 $62,137 $64,915 $71,691 $70,566 $78,132 $78,399 Severance and restructuring costs 2,977 195 190 494 301 167 51 55 75 Charge for fair value write-up of acquired inventory sold — 687 126 — — — — — — MC adjusted segment profit $49,769 $58,039 $50,483 $62,631 $65,216 $71,858 $70,617 $78,187 $78,474 AMH segment profit $17,077 $20,686 $20,632 $22,809 $33,266 $34,321 $32,095 $42,093 $40,503 Severance and restructuring costs 3,135 (379) 135 814 213 121 37 38 52 Charge for fair value write-up of acquired inventory sold — — — — 229 — — — — AMH adjusted segment profit $20,212 $20,307 $20,767 $23,623 $33,708 $34,442 $32,132 $42,131 $40,555 Adjusted Segment Profit Margin SCEM 18.6% 22.2% 22.9% 21.8% 21.8% 17.7% 20.8% 24.9% 23.3% MC 31.9% 34.2% 31.7% 34.1% 33.7% 34.9% 34.1% 34.4% 34.7% AMH 17.2% 17.3% 17.9% 18.7% 23.3% 22.7% 21.6% 24.4% 21.8% Non-GAAP Segment Trend Data