Investors seek growth stocks to capitalize on above-average growth in financials that help these securities grab the market's attention and produce exceptional returns. But finding a great growth stock is not easy at all.By their very nature, these stocks carry above-average risk and volatility. Moreover, if a company's growth story is over or nearing its end, betting on it could lead to significant loss.However, the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the tr ...

[Executive Summary & Business Outlook](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Outlook) Entegris reported strong Q1 2024 results, exceeding guidance and reducing debt, with a positive outlook for market recovery and outperformance [Q1 2024 Performance Highlights](index=1&type=section&id=Q1%202024%20Performance%20Highlights) Entegris reported strong Q1 2024 financial results, exceeding guidance and completing strategic divestitures while reducing debt - CEO Bertrand Loy highlighted a positive start to the year with sales of **$771 million** at the high end of guidance, and adjusted EBITDA and non-GAAP EPS exceeding guidance[2](index=2&type=chunk) - The company completed all planned divestitures of non-core assets with the sale of the Pipeline and Industrial Materials (PIM) business[2](index=2&type=chunk) - Over **$400 million** of debt was paid down during the quarter using proceeds from the PIM sale and cash on hand[2](index=2&type=chunk) - Management believes the semiconductor market is healthier with normalizing inventories and expects a gradual market recovery throughout 2024, with Entegris continuing to outgrow the market[2](index=2&type=chunk) Q1 2024 Financial Results Summary (in thousands) | Metric | Q1 2024 (Mar 30, 2024) | Q1 2023 (Apr 1, 2023) | Q4 2023 (Dec 31, 2023) | | :--- | :--- | :--- | :--- | | **GAAP Results** | | | | | Net Sales | $771,025 | $922,396 | $812,291 | | Gross Margin % | 45.6% | 43.5% | 42.4% | | Net Income (Loss) | $45,266 | ($88,166) | $37,977 | | Diluted EPS | $0.30 | ($0.59) | $0.25 | | **Non-GAAP Results** | | | | | Adjusted Gross Margin % | 45.6% | 44.3% | 42.4% | | Adjusted EBITDA % | 29.0% | 27.3% | 26.0% | | Diluted Non-GAAP EPS | $0.68 | $0.65 | $0.65 | [Q2 2024 Outlook](index=2&type=section&id=Q2%202024%20Outlook) Entegris projects Q2 2024 sales between $790 million and $810 million, with non-GAAP EPS of $0.68 to $0.73, representing an 8.5% sequential sales increase - The midpoint of the Q2 sales guidance represents an **8.5%** sequential increase, excluding the impact of divestitures[5](index=5&type=chunk) Guidance for Q2 2024 (ending June 29, 2024) (in millions) | Metric | Expected Range | | :--- | :--- | | Sales | $790 - $810 | | GAAP Net Income | $64 - $71 | | GAAP Diluted EPS | $0.42 - $0.47 | | Non-GAAP Net Income | $103 - $110 | | Non-GAAP Diluted EPS | $0.68 - $0.73 | | Adjusted EBITDA | ~28% of sales | [Business Segment Performance](index=2&type=section&id=Business%20Segment%20Performance) Entegris's Q1 2024 net sales were $771.0 million, with Materials Solutions as the largest segment, while Microcontamination Control led in segment profit Segment Net Sales (in thousands) | Segment | Q1 2024 (Mar 30, 2024) | Q1 2023 (Apr 1, 2023) | Q4 2023 (Dec 31, 2023) | | :--- | :--- | :--- | :--- | | Materials Solutions | $350,036 | $448,330 | $364,965 | | Microcontamination Control | $267,864 | $269,297 | $288,427 | | Advanced Materials Handling | $162,854 | $218,853 | $169,191 | Segment Profit (in thousands) | Segment | Q1 2024 (Mar 30, 2024) | Q1 2023 (Apr 1, 2023) | Q4 2023 (Dec 31, 2023) | | :--- | :--- | :--- | :--- | | Materials Solutions | $67,124 | ($29,522) | $53,204 | | Microcontamination Control | $86,555 | $95,997 | $97,558 | | Advanced Materials Handling | $24,606 | $48,165 | $20,463 | [Materials Solutions (MS)](index=2&type=section&id=Materials%20Solutions%20%28MS%29) The Materials Solutions segment provides materials-based solutions including CMP slurries, deposition materials, and process chemistries - The MS segment provides materials-based solutions including chemical mechanical planarization (CMP) slurries and pads, deposition materials, and process chemistries[6](index=6&type=chunk) [Microcontamination Control (MC)](index=2&type=section&id=Microcontamination%20Control%20%28MC%29) The Microcontamination Control segment offers advanced filtration solutions for purifying critical liquid chemistries and gases in semiconductor manufacturing - The MC segment offers advanced filtration solutions to purify critical liquid chemistries and gases used in semiconductor manufacturing[7](index=7&type=chunk) [Advanced Materials Handling (AMH)](index=2&type=section&id=Advanced%20Materials%20Handling%20%28AMH%29) The Advanced Materials Handling segment develops solutions for protecting, monitoring, transporting, and delivering critical materials like wafers and liquid chemistries - The AMH segment develops solutions to protect, monitor, transport, and deliver critical materials like wafers and liquid chemistries[8](index=8&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) Entegris reported Q1 2024 net sales of $771.0 million and net income of $45.3 million, with reduced assets and long-term debt [Statements of Operations](index=6&type=section&id=Statements%20of%20Operations) Entegris's Q1 2024 statements of operations show net sales of $771.0 million and a significant improvement in net income to $45.3 million from a prior-year loss - Operating income in Q1 2024 was significantly higher than Q1 2023, which was impacted by an **$88.9 million** goodwill impairment charge[19](index=19&type=chunk) Q1 2024 Statement of Operations Highlights (in thousands) | Line Item | Q1 2024 (Mar 30, 2024) | Q1 2023 (Apr 1, 2023) | | :--- | :--- | :--- | | Net Sales | $771,025 | $922,396 | | Gross Profit | $351,820 | $401,685 | | Operating Income | $117,592 | $13,466 | | Net Income (Loss) | $45,266 | ($88,166) | | Diluted EPS | $0.30 | ($0.59) | [Balance Sheets](index=7&type=section&id=Balance%20Sheets) Entegris's balance sheet reflects a decrease in total assets to $8.36 billion and a reduction in long-term debt to $4.17 billion as of March 30, 2024 - The decrease in total assets was driven by the reclassification and sale of assets held-for-sale, which dropped from **$278.8 million** to **$8.0 million**[21](index=21&type=chunk) Balance Sheet Highlights (in thousands) | Line Item | Mar 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $340,682 | $456,929 | | Total current assets | $1,575,447 | $1,977,327 | | Total assets | $8,364,723 | $8,812,591 | | Long-term debt | $4,172,942 | $4,577,141 | | Total shareholders' equity | $3,430,170 | $3,408,594 | [Statements of Cash Flows](index=8&type=section&id=Statements%20of%20Cash%20Flows) Entegris generated $147.2 million in operating cash flow, with investing activities driven by business sales proceeds and financing activities primarily for debt repayment - Investing activities were primarily driven by **$249.6 million** in net proceeds from the sale of businesses[23](index=23&type=chunk) - Financing activities included payments of long-term debt of **$643.3 million**, partially offset by proceeds from new long-term debt of **$224.5 million**[23](index=23&type=chunk) Q1 2024 Cash Flow Highlights (in thousands) | Activity | Q1 2024 (Mar 30, 2024) | Q1 2023 (Apr 1, 2023) | | :--- | :--- | :--- | | Net cash provided by operating activities | $147,186 | $151,871 | | Net cash provided by (used in) investing activities | $181,016 | ($357) | | Net cash used in financing activities | ($439,861) | ($6,482) | [Reconciliation of GAAP to Non-GAAP Measures](index=10&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) Entegris provides non-GAAP metrics, with Q1 2024 adjusted net sales of $737.1 million and non-GAAP EPS of $0.68, primarily excluding amortization and restructuring costs [Net Sales and Gross Profit Reconciliation](index=10&type=section&id=Net%20Sales%20and%20Gross%20Profit%20Reconciliation) This section reconciles GAAP net sales and gross profit to non-GAAP figures, primarily by adjusting for divestitures and restructuring costs Reconciliation of Net Sales (in thousands) | Line Item | Q1 2024 | Q1 2023 | Q4 2023 | | :--- | :--- | :--- | :--- | | Net sales (GAAP) | $771,025 | $922,396 | $812,291 | | Less: Divestitures | (33,907) | (144,038) | (46,843) | | Adjusted Net sales (Non-GAAP) | $737,118 | $778,358 | $765,448 | Reconciliation of Gross Profit (in thousands) | Line Item | Q1 2024 | Q1 2023 | Q4 2023 | | :--- | :--- | :--- | :--- | | Gross profit (GAAP) | $351,820 | $401,685 | $344,680 | | Restructuring costs | — | 7,377 | 28 | | Adjusted gross profit (Non-GAAP) | $351,820 | $409,062 | $344,708 | [Operating Income & EBITDA Reconciliation](index=12&type=section&id=Operating%20Income%20%26%20EBITDA%20Reconciliation) This section reconciles GAAP operating income to adjusted EBITDA, with key adjustments including amortization of intangible assets and impairment charges - Major adjustments to operating income in Q1 2024 included **$50.2 million** for amortization of intangible assets and **$13.0 million** for impairment of long-lived assets, offset by a **$4.8 million** gain on sale of businesses[28](index=28&type=chunk) Reconciliation to Adjusted EBITDA (in thousands) | Line Item | Q1 2024 | Q1 2023 | Q4 2023 | | :--- | :--- | :--- | :--- | | Net income (loss) | $45,266 | ($88,166) | $37,977 | | GAAP - Operating income | 117,592 | 13,466 | 101,017 | | Adjustments* | 60,496 | 191,306 | 67,251 | | Adjusted operating income | 178,088 | 204,772 | 168,268 | | Depreciation | 45,343 | 46,775 | 42,558 | | Adjusted EBITDA | $223,431 | $251,547 | $210,826 | [Net Income & EPS Reconciliation](index=13&type=section&id=Net%20Income%20%26%20EPS%20Reconciliation) This section reconciles GAAP net income and EPS to non-GAAP figures, primarily adjusting for amortization, asset impairment, and debt extinguishment - Key adjustments to arrive at non-GAAP net income for Q1 2024 included adding back **$50.2 million** for amortization, **$13.0 million** for asset impairment, and **$11.6 million** for loss on debt extinguishment, offset by a **$4.8 million** gain on business sales and a **$13.5 million** tax effect[30](index=30&type=chunk) Reconciliation to Non-GAAP Net Income & EPS (in thousands) | Line Item | Q1 2024 | Q1 2023 | Q4 2023 | | :--- | :--- | :--- | :--- | | GAAP net income (loss) | $45,266 | ($88,166) | $37,977 | | Non-GAAP net income | $103,772 | $97,782 | $97,943 | | Diluted GAAP EPS | $0.30 | ($0.59) | $0.25 | | Diluted Non-GAAP EPS | $0.68 | $0.65 | $0.65 | [Outlook Reconciliation](index=15&type=section&id=Outlook%20Reconciliation) This section provides the Q2 2024 outlook reconciliation, with primary adjustments for amortization of intangible assets and deal-related costs - The primary adjustments for the Q2 2024 outlook are expected to be **$48 million** for amortization of intangible assets and **$2 million** for deal, transaction, and integration costs, with an associated income tax effect of **($11) million**[33](index=33&type=chunk) Q2 2024 Outlook Reconciliation (in millions) | Metric | GAAP Outlook | Adjustments | Non-GAAP Outlook | | :--- | :--- | :--- | :--- | | Net Income | $64 - $71 | $39 | $103 - $110 | | Diluted EPS | $0.42 - $0.47 | $0.26 | $0.68 - $0.73 |

 Key PointsFive key trends should be at the top of investors' minds as they enter the new quarter.Working through the fundamental trends, all the way to sector-specific interests in the stock market, there is opportunity at each turn.Wall Street price targets and EPS projections support the upcoming capital rotation.5 stocks we like better than Taiwan Semiconductor ManufacturingThe global financial markets are like a machine, and each asset class acts as a cog that twists and turns each cycle. Today, there ...

PM Images Entegris, Inc. (NASDAQ:ENTG) appears to be receiving a lot of attention because of recent earnings growth expectations for 2024 and price momentum increases. I believe that the total amount of recurrent sales is a good reason to follow the stock. In addition, careful research of ENTG's corporate documents reveals that the company is going through many changes that include severance costs and sale of divisions, which may facilitate deleveraging the balance sheet. In my view, we could see significan ...

PonyWang Summary Readers may find my previous coverage via this link. My previous rating was a buy as I believed Entegris' (NASDAQ:ENTG) growth had bottomed, and gross margins would see expansion moving forward; with both factors driving an upward revision of its multiple. As of April 8th, the ENTG share price has touched my target price of $139.40; hence, I think it is time for an update. I am reiterating my buy rating for ENTG as I remain very positive about the strong operating performance up ahead. ...

BILLERICA, Mass.--(BUSINESS WIRE)--Entegris, Inc. (Nasdaq: ENTG), a leading supplier of advanced materials and process solutions for the semiconductor and other high-technology industries, announced today it has completed the sale of its Pipeline and Industrial Materials business (PIM) to SCF Partners, Inc. (“SCF”), an energy investment firm, for a purchase price of up to $285 million, consisting of $260 million in cash that has been received at closing, subject to customary post-closing adjustment, and a $ ...

The Zacks Electronics - Manufacturing Machinery industry is suffering from challenging macroeconomic conditions globally. Softness in the 3D NAND end-market has been a headwind. However, industry participants are benefiting from increased capital spending on high-performance computing, AI, mobility, augmented reality and virtual reality, advanced packaging, lithography and wet processing solutions by semiconductor manufacturers. The ongoing transformation in cloud computing is noteworthy. Entegris (ENTG) an ...

Financial Data and Key Metrics Changes - The company closed 2023 with strong fourth quarter sales and EPS results, both above guidance [20] - Total debt at the end of 2023 was $4.7 billion after paying down $1.3 billion during the year, indicating a solid debt structure [34][35] - The company expects approximately 11% sales growth CAGR from 2023 to 2026, with EBITDA margins projected to reach approximately 31% by 2026 [39][70] Business Line Data and Key Metrics Changes - The Materials Solutions (MS) division, which combines the SCM and APS divisions, is expected to achieve four to six points of growth in excess of the industry, with margins improving from 16% to 22%-24% over time [31] - The Advanced Materials Handling (AMH) division anticipates topline growth of two to four points in excess of the industry, with operating margins in the low-to-mid 20s [32] - The Microcontamination Control (MC) division expects to outperform by five to seven points, with operating margins projected to reach 35%-37% [33] Market Data and Key Metrics Changes - The semiconductor industry is expected to reach $1 trillion in revenue by 2030, driven by digitalization and demand for faster, more energy-efficient semiconductors [12] - The company expects MSI to grow about 5% in 2024, while industry CapEx is expected to be flat, leading to an overall industry growth of 4% [48] Company Strategy and Development Direction - The company is focused on enhancing its R&D investments, which are expected to be approximately 9% of sales, to support customer technology roadmaps [14][89] - Investments in local manufacturing and tech centers are being ramped up to improve customer engagement and accelerate learning [11] - The company aims to balance debt reduction with critical investments in future growth, including potential strategic acquisitions [68][133] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about long-term growth prospects for the semiconductor industry despite recent downturns [22] - The company expects a recovery year in 2024, with different segments recovering at varying rates, led by advanced logic and DRAM [78] - The complexity of customer technology roadmaps is increasing, leading to greater engagement and collaboration opportunities for the company [122] Other Important Information - The company completed the acquisition of CMC Materials and successfully integrated it within 13 months, which has contributed to strong performance [44] - The company has a unique customer base, with 70% of fab revenues coming from logic and foundry customers, providing greater resilience [53] Q&A Session Summary Question: What are the drivers of the Q4 results above guidance and the 6 points of outperformance for 2023? - All three divisions performed well, with the MS division showing strong recovery in Q4 due to improved memory segment performance [43][74] Question: Can you break down the 4% industry growth for 2024 MSI versus CapEx end-markets? - MSI is expected to grow about 5%, while industry CapEx is expected to be flat, leading to a blended growth of 4% [48] Question: What are the drivers of the outperformance in 2024? - The company expects to benefit from greater Entegris content per wafer and node transitions in 3D NAND and advanced logic [107] Question: How do you see the cadence of EBITDA margins as we go into Q1 and throughout next year? - Guidance for Q1 EBITDA margin is approximately 27%, with expectations for gradual recovery throughout the year [85] Question: Can you talk about the progress of the sales synergies from CMC? - The integration has exceeded expectations, with strong customer engagement and a positive outlook for the MS platform [82][84] Question: How do you see Material Solutions margins going forward? - Margins are expected to improve as volumes ramp up and the benefits of R&D investments are realized [124]

Business Segments and Divestitures - In Q3 2023, the Company realigned its segments into three reportable segments to enhance its capabilities in the semiconductor manufacturing ecosystem [205]. - The Company completed the divestiture of the Electronic Chemicals business on October 2, 2023, receiving cash proceeds of $737.1 million, or net proceeds of $675.2 million [214]. - The Company received proceeds of $134.3 million from the divestiture of the QED business on March 1, 2023 [211]. - The Company terminated the definitive agreement with Infineum to sell its PIM business, receiving a $12.0 million termination fee in Q1 2023 [210]. - The Company announced a termination of the Alliance Agreement with MacDermid Enthone, resulting in net proceeds of $191.2 million in 2023 [213]. Financial Performance - Net sales for 2023 were $3,523.9 million, an increase of $241.9 million, or 7%, from 2022 [224]. - The increase in net sales was driven by $537.8 million from the acquisition of CMC Materials, offset by a $116.2 million decrease from divestitures and a $146.5 million decrease in semiconductor market demand [224]. - Gross profit margin remained unchanged at 42.5% for both 2023 and 2022 [227]. - Net income for 2023 was $180.7 million, or $1.20 per diluted share, compared to $208.9 million, or $1.46 per diluted share, in 2022 [239]. - Adjusted EBITDA decreased to $942.4 million in 2023, down from $973.2 million in 2022, with a margin of 26.7% [242]. - Non-GAAP net income for 2023 was $398,918,000, down 25.4% from $534,170,000 in 2022 [299]. - Diluted non-GAAP earnings per share decreased to $2.64 in 2023 from $3.73 in 2022, reflecting a decline of 29.4% [299]. Expenses and Costs - Selling, general and administrative (SG&A) expenses increased by $32.7 million, or 6%, to $576.2 million in 2023 [228]. - Engineering, research and development (ER&D) expenses rose to $277.3 million in 2023, up from $229.0 million in 2022 [230]. - Interest expense increased to $312.4 million in 2023 from $212.7 million in 2022, primarily due to the CMC Materials acquisition [234]. - The Company recorded a goodwill impairment charge of $115.2 million in 2023 [232]. - Unallocated general and administrative expenses for 2023 totaled $114.2 million, down from $190.5 million in 2022, mainly due to a decrease in deal and integration costs related to CMC Materials [256]. Cash Flow and Debt - Cash provided by operating activities increased by $277.3 million in 2023, totaling $629.6 million, driven by changes in operating assets and liabilities [261]. - In 2023, cash provided by investing activities was $553.1 million, a significant improvement from $4,945.7 million cash used in 2022, primarily due to the absence of the prior-year acquisition of CMC Materials [264]. - Total debt decreased to $4,577.1 million in 2023 from $5,784.9 million in 2022, reflecting repayments and refinancing activities [257]. - The Company declared a quarterly cash dividend of $0.10 per share to be paid on February 21, 2024, totaling $60.2 million in dividend payments for 2023, compared to $57.3 million in 2022 [269]. Strategic Focus and Market Conditions - The Company is focused on developing new products and solutions to meet rapidly changing customer requirements in the semiconductor industry [201]. - The updated U.S. export control regulations may impact the Company's operations and competitiveness, particularly concerning sales to certain countries, including China [207]. - The Company has not experienced significant revenue from regions affected by the ongoing military conflicts in the Middle East, but uncertainties remain regarding global supply chains and pricing [208]. - The company is focused on expanding its manufacturing presence in Taiwan and Colorado Springs as part of its growth strategy [201]. - The company is positioned to leverage the acquisition of CMC Materials to enhance its product offerings and address complex manufacturing challenges [206]. Segment Performance - Materials Solutions segment net sales increased by 22% to $1,689.5 million in 2023, reflecting the impact of the CMC Materials acquisition [246]. - MC net sales for 2023 increased to $1,127.6 million, up 2% from $1,106.0 million in 2022, primarily due to improved sales from liquid filtration products [250]. - AMH net sales decreased 10% to $758.6 million in 2023 from $846.5 million in 2022, primarily due to lower sales from microenvironment solutions products [254]. Accounting and Tax - The Company’s critical accounting policies involve significant estimates related to business acquisitions, goodwill impairment, and fair value assessments [215]. - Income tax liabilities include $267,545,000, with $67,700,000 related to uncertain tax positions [282]. - The effective tax rate decreased to (4.9)% in 2023 from 15.4% in 2022, influenced by a tax benefit related to divestiture and impairment activity [238].

For the quarter ended December 2023, Entegris (ENTG) reported revenue of $812.29 million, down 14.1% over the same period last year. EPS came in at $0.65, compared to $0.83 in the year-ago quarter.The reported revenue represents a surprise of +4.77% over the Zacks Consensus Estimate of $775.3 million. With the consensus EPS estimate being $0.59, the EPS surprise was +10.17%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street ...