ANDOVER, Mass., April 14, 2025 (GLOBE NEWSWIRE) -- MKS Instruments, Inc. (NASDAQ: MKSI), a global provider of enabling technologies that transform our world, today announced that the Company will release first quarter 2025 financial results after market close on Wednesday, May 7, 2025. A conference call with management will be held on Thursday, May 8, 2025 at 8:30 a.m. (Eastern Time). A live and archived webcast of the call can be accessed on the company’s website at https://investor.mks.com/, or by registe ...

ANDOVER, Mass., Feb. 26, 2025 (GLOBE NEWSWIRE) -- MKS Instruments, Inc. (NASDAQ: MKSI), a global provider of enabling technologies that transform our world, announced today that John T.C. Lee, President and Chief Executive Officer, will participate in a fireside chat at Cantor Fitzgerald Global Technology Conference on Tuesday, March 11, 2025 at 1:00 p.m. EDT. A live webcast of the session will be available in the Investor Relations section of the company's website at https://investor.mksinst.com/events-and ...

Revenue Performance - Total net revenues for 2024 were $3,586 million, a decrease of 1% compared to $3,622 million in 2023[243]. - Semiconductor market revenues increased by $19 million, or 1%, in 2024, accounting for 42% of total net revenues[246][247]. - Revenues from the electronics and packaging market rose by $6 million, or 1%, in 2024, representing 26% of total net revenues[249][250]. - Specialty industrial market revenues decreased by $61 million, or 5%, in 2024, making up 32% of total net revenues[255]. - Approximately 78% of total net revenues in 2024 came from international markets, up from 75% in 2023[257]. - The Vacuum Solutions Division reported net revenues of $1.384 billion in 2024, a decrease of $56 million compared to 2023[295]. - Product revenues decreased by $76 million to $3.124 billion in 2024, primarily due to lower sales in the specialty industrial market and electronics and packaging market[293]. - Service revenues increased by $40 million to $462 million in 2024, driven by growth in the semiconductor market[294]. Profitability and Expenses - Gross profit as a percentage of net revenues improved to 47.6% in 2024, up from 45.3% in 2023, reflecting a favorable product mix and higher factory utilization[298]. - Research and development expenses decreased by $17 million to $271 million in 2024, mainly due to lower compensation-related costs[302]. - Selling, general and administrative expenses slightly decreased by $1 million to $674 million in 2024, primarily due to reduced compensation-related costs[306]. - Acquisition and integration costs related to the Atotech acquisition were $9 million in 2024, down from $16 million in 2023[307]. - Amortization of intangible assets decreased by $50 million to $245 million in 2024, primarily due to the full amortization of backlog-related intangible assets[311]. - Goodwill and intangible asset impairments were $0 in 2024, a significant decrease from $1.902 billion in 2023[312]. Impairments and Inventory Management - A non-cash goodwill impairment of $826 million for the Electronics reporting unit, $428 million for the General Metal Finishing unit, and $372 million for the Equipment Solutions Business was recorded due to softer industry demand[283]. - As of October 31, 2023, additional non-cash goodwill impairment charges of $48 million and $13 million were recorded at the Electronics and Equipment Solutions Business reporting units, respectively[284]. - Excess and obsolete inventory expense was $56 million, $64 million, and $21 million for 2024, 2023, and 2022, respectively, with the increase in 2023 attributed to a product line discontinuation[269]. - The company regularly reviews inventory quantities and adjusts provisions for excess and obsolete inventory based on demand forecasts[268]. Cash Flow and Debt Management - Net cash provided by operating activities was $528 million for 2024, resulting from a net income of $190 million and non-cash charges of $334 million[334]. - Total cash and cash equivalents decreased from $875 million in 2023 to $714 million in 2024, with $268 million held in the U.S. and $446 million by foreign subsidiaries[331][332]. - The company paid cash dividends of $59 million in 2024, maintaining a dividend of $0.88 per share, consistent with 2023[339]. - As of December 31, 2024, the principal outstanding on the Term Loan Facility was $3.2 billion, with a weighted average interest rate of 6.4%[345]. - The company refinanced its existing USD Tranche B loan and Euro Tranche B loan with a new $2.5 billion USD Tranche B loan and a new €596 million Euro Tranche B loan[352]. - The applicable margin for the USD Tranche B was decreased from 2.25% to 2.00% for Term SOFR borrowings, and from 1.25% to 1.00% for base rate borrowings[352]. - The company recorded a $38 million loss on extinguishment of debt due to the repayment of borrowings[355]. Tax and Regulatory Matters - The effective tax rate for 2024 was (5.7)%, lower than the U.S. statutory tax rate, mainly due to deductions for foreign derived intangible income[324]. - The company anticipates recognizing approximately $3 million of previously unrecognized tax benefits over the next 12 months, primarily due to the expiration of statutes of limitations[327]. - The new accounting standard for income tax disclosures will be effective for annual periods beginning after December 15, 2024[378]. - The company is evaluating the impact of new expense disaggregation disclosures effective after December 15, 2026, but it will not affect consolidated financial statements[380]. Risk Management - The company uses derivative instruments for risk management, including foreign exchange forward contracts and interest rate swaps, to mitigate market risks[288]. - The fair value of stock-based compensation awards is estimated using various models, including the Black-Scholes model for Employee Stock Purchase Plan shares[274]. - Warranty costs are estimated based on historical repair costs and specific product issues, with obligations included in current and long-term liabilities[270]. - The company performs annual goodwill impairment tests, with qualitative assessments determining if further quantitative assessments are necessary[280]. - The company maintains a portion of cash equivalents in money market funds to minimize interest rate risk exposure[386]. - The company uses interest rate swap agreements to manage exposure to fluctuations in interest rates associated with the Term Loan Facility[387]. Market Conditions - The semiconductor capital equipment industry faces significant trade restrictions, particularly in China, impacting future demand[245]. - The company supports over 85% of the wafer fabrication equipment market, emphasizing its critical role in semiconductor manufacturing[244]. - The company expects international net revenues to continue to represent a significant percentage of total revenues in the foreseeable future[257].

Safe Harbor for Forward-Looking Statements Fourth Quarter and Full Year 2024 Financial Results MKS Instruments, Inc. February 13, 2025 This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 regarding the future financial performance, business prospects and growth of MKS Instruments, Inc. ("MKS", the "Company", "our", or "we"). These sta ...

Financial Data and Key Metrics Changes - For Q4 2024, the company reported revenue of $935 million, up 5% year-over-year and 4% sequentially, exceeding the midpoint of guidance [24][12] - Gross margin for Q4 was 47.2%, slightly down sequentially but above guidance, with a full-year gross margin of 47.6%, up 190 basis points year-over-year [28][37] - Earnings per diluted share increased by 49% year-over-year to $2.15, reflecting strong operating performance and lower income taxes [31][38] - Free cash flow for Q4 was $125 million, representing 13% of revenue, with full-year free cash flow of $410 million, an increase of $178 million year-over-year [31][38] Business Line Data and Key Metrics Changes - Semiconductor revenue for Q4 was $400 million, up 10% year-over-year and 6% sequentially, driven by demand in DRAM and logic foundry applications [25][13] - Electronics and packaging revenue grew 10% sequentially to $254 million, with a year-over-year increase of 13% [26][18] - Specialty industrial revenue decreased 2% sequentially to $281 million, down 8% year-over-year, primarily due to softness in the industrial market [27][20] Market Data and Key Metrics Changes - The semiconductor market showed a sequential revenue increase of 6%, with expectations for flat revenue in Q1 2025 [16][13] - Electronics and packaging market revenue is expected to decline by 4% sequentially in Q1 2025 due to seasonal factors [19][21] - Specialty industrial market revenue is anticipated to decline by 6% in Q1 2025, mainly due to seasonal impacts and softness in the industrial sector [21][41] Company Strategy and Development Direction - The company is focused on maintaining investments in R&D and strategic initiatives, including technology innovations in optics, lasers, and chemistry solutions for advanced packaging [9][10] - MKS aims to leverage its broad product portfolio to address complex customer challenges, particularly in semiconductor and electronics sectors [10][11] - The company is prioritizing deleveraging its balance sheet while continuing to invest in growth and operational efficiencies [32][122] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position to capitalize on emerging opportunities as market conditions improve, particularly in semiconductor investments [46][43] - The company noted that while demand remains low, it is higher than a year ago, and investments made will strengthen its ability to outperform as the market recovers [17][21] - Management highlighted the importance of maintaining a disciplined approach to cost management while investing for long-term growth [23][122] Other Important Information - The company received accolades for being one of the best companies to work for in its industry and recognized as one of America's most responsible companies for 2025 [22] - The company closed Q4 with approximately $1.4 billion in liquidity and a net leverage ratio of 4.3x based on trailing 12-month adjusted EBITDA [32][33] Q&A Session Summary Question: NAND component inventory levels and purchasing outlook - Management noted that inventory levels are being reduced, and new orders are starting to come in, indicating progress but still off low levels [50][51] Question: Semiconductor segment growth expectations - Management indicated that they have historically outperformed WFE growth and expect to continue doing so, with design wins supporting this outlook [61][62] Question: Specialty industrial market recovery timeline - Management stated that the specialty industrial market is experiencing steady decline, with visibility on recovery being limited due to its diverse nature [64][65] Question: AI's impact on revenue and growth - Management explained that AI is driving growth in specific segments, particularly in IC substrates, but overall exposure is challenging to quantify [131][134] Question: Interest expense guidance and debt repayment strategy - Management clarified that interest expense is expected to be slightly up due to prior classifications, but they are focused on reducing debt and improving operational efficiency [145][147]

Core Viewpoint - MKS Instruments reported strong fourth-quarter 2024 results with adjusted earnings of $2.15 per share, significantly up from $1.17 per share in the same quarter last year, exceeding the Zacks Consensus Estimate by 11.98% [1] - The company’s revenues reached $935 million, surpassing the consensus mark by 2.68% and reflecting a year-over-year increase of 4.7% [1] Revenue Breakdown - Product revenues, which constitute 88.1% of total revenues, amounted to $824 million, a 5% increase year over year, and also beat the Zacks Consensus Estimate by 3.92% [1] - Service revenues, making up 11.9% of total revenues, rose 2.8% year over year to $111 million, but fell short of the Zacks Consensus Estimate by 6.12% [2] - Revenues from the Semiconductor market, accounting for 42.8% of total revenues, increased 10.5% year over year to $400 million, exceeding the Zacks Consensus Estimate by 5.39% [3] - Electronics & Packaging revenues, representing 27.2% of total revenues, were $254 million, up from $226 million in the previous year, beating the Zacks Consensus Estimate by 6.66% [3] - Specialty Industrial revenues, which constitute 30.1% of total revenues, declined 7.9% year over year to $281 million, missing the Zacks Consensus Estimate by 4.12% [4] Operating Performance - The adjusted gross margin expanded by 110 basis points year over year to 47.2% [5] - Non-GAAP operating income increased by 9.3% year over year to $199 million, with the adjusted operating margin expanding by 90 basis points to 21.3% [5] - Adjusted EBITDA rose 8.7% year over year to $237 million, with the adjusted EBITDA margin increasing by 90 basis points to 25.3% [6] Balance Sheet and Cash Flow - As of December 31, 2024, MKS Instruments had cash and cash equivalents of $714 million, down from $861 million as of September 30, 2024 [7] - Cash flow from operations was $176 million in the fourth quarter, compared to $163 million in the third quarter [7] - Free cash flow decreased to $125 million from $141 million in the previous quarter [7] - The company paid cash dividends of $15 million, equating to 22 cents per share [7] Guidance - MKS Instruments expects first-quarter 2025 revenues to be around $910 million, with a variance of +/- $40 million [8] - The company anticipates adjusted EBITDA of $217 million, with a variance of +/- $23 million, and non-GAAP earnings of $1.40 per share, with a variance of +/- 27 cents [9]

Core Insights - MKS Instruments reported revenue of $935 million for the quarter ended December 2024, reflecting a 4.7% increase year-over-year and surpassing the Zacks Consensus Estimate by 2.68% [1] - The company's EPS for the quarter was $2.15, significantly higher than the $1.17 reported in the same quarter last year, resulting in an EPS surprise of 11.98% over the consensus estimate of $1.92 [1] Revenue Breakdown - Semiconductor segment generated net revenues of $400 million, exceeding the average estimate of $379.55 million by analysts, marking a 10.5% increase year-over-year [4] - Electronics and Packaging segment reported net revenues of $254 million, surpassing the average estimate of $238.14 million, with a year-over-year growth of 12.4% [4] - Specialty Industrial segment's net revenues were $281 million, falling short of the average estimate of $293.09 million, representing a decline of 7.9% compared to the previous year [4] - Products segment achieved net revenues of $824 million, exceeding the average estimate of $792.93 million, with a year-over-year increase of 5% [4] - Services segment reported net revenues of $111 million, below the average estimate of $118.24 million, but still showing a 2.8% increase year-over-year [4] Stock Performance - Over the past month, MKS Instruments' shares have returned -0.4%, contrasting with the Zacks S&P 500 composite's increase of 4.3% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Company Performance - MKS Instruments reported quarterly earnings of $2.15 per share, exceeding the Zacks Consensus Estimate of $1.92 per share, and up from $1.17 per share a year ago, adjusted for non-recurring items [1] - The earnings surprise for the quarter was 11.98%, following a previous quarter where the company also exceeded expectations with earnings of $1.72 per share against an estimate of $1.42 per share, resulting in a surprise of 21.13% [2] - The company achieved revenues of $935 million for the quarter, surpassing the Zacks Consensus Estimate by 2.68%, and an increase from $893 million year-over-year [3] Market Performance - MKS Instruments shares have increased approximately 6% since the beginning of the year, outperforming the S&P 500, which gained 3.2% [4] - The current consensus EPS estimate for the upcoming quarter is $1.60 on revenues of $904.81 million, and for the current fiscal year, it is $7.48 on revenues of $3.81 billion [8] Industry Outlook - The Electronics - Manufacturing Machinery industry, to which MKS Instruments belongs, is currently ranked in the bottom 7% of over 250 Zacks industries, indicating potential challenges ahead [9] - Ultra Clean Holdings, another company in the same industry, is expected to report quarterly earnings of $0.44 per share, reflecting a year-over-year increase of 131.6%, with revenues projected at $558.3 million, up 25.5% from the previous year [10][11]

Financial Performance - Q4 2024 revenue reached $935 million, exceeding the midpoint of guidance, with a full-year revenue of $3.586 billion[5]. - Q4 2024 GAAP net income was $90 million, translating to a diluted earnings per share of $1.33, compared to a net loss of $68 million in Q4 2023[9]. - Adjusted EBITDA for Q4 2024 was $237 million, also above the midpoint of guidance, with full-year adjusted EBITDA totaling $1.014 billion[5]. - Gross margin for Q4 2024 was 47.2%, slightly down from 48.2% in Q3 2024, while operating margin improved to 14.5%[9]. - Non-GAAP net earnings for 2024 reached $444 million, up from $297 million in 2023, representing a 49.5% increase[24]. - Free cash flow for 2024 was $410 million, compared to $232 million in 2023, indicating a 76.7% increase[24]. - Non-GAAP income from operations for Q4 2024 was $199 million, resulting in a non-GAAP operating margin of 21.3%[26]. - Adjusted EBITDA for Q4 2024 was $237 million, with an adjusted EBITDA margin of 25.3%[26]. - The company expects GAAP net income of $43 million for Q1 2025, with non-GAAP net earnings projected at $95 million[29]. Cash and Debt Management - Cash and cash equivalents stood at $714 million as of December 31, 2024, with $3.2 billion in secured term loan principal outstanding[11]. - MKS Instruments made a voluntary principal prepayment of $100 million on its USD term loan B in January 2025, continuing to manage leverage proactively[3][12]. - Long-term debt decreased from $4,696 million in 2023 to $4,488 million in 2024, a reduction of 4.4%[20]. - Interest expense for Q4 2024 was $49 million, down from $83 million in Q4 2023[26]. Asset and Liability Management - Total assets decreased from $9,118 million in 2023 to $8,590 million in 2024, a decline of 5.8%[20]. - Total liabilities reduced from $6,646 million in 2023 to $6,268 million in 2024, a decrease of 5.7%[20]. - Cash and cash equivalents decreased to $714 million at the end of 2024 from $875 million at the end of 2023, a decline of 18.4%[22]. - Retained earnings increased from $373 million in 2023 to $503 million in 2024, reflecting a growth of 34.8%[20]. Segment Performance - The semiconductor segment generated $400 million in revenue for Q4 2024, while the electronics and packaging segment contributed $254 million[9]. - Gross profit for Q4 2024 was $441 million, with a gross margin of 47.2%, compared to $432 million and 48.2% in Q3 2024[26]. Operational Costs and Expenses - Operating expenses for Q4 2024 were $306 million, down from $387 million in Q4 2023[26]. - The company reported depreciation and amortization expenses of $348 million for 2024, down from $397 million in 2023[24]. - The company incurred $9 million in acquisition and integration costs for 2024, down from $16 million in 2023[24]. - The company recorded a non-GAAP operating expense of $242 million for Q4 2024, compared to $229 million in Q4 2023[26]. Impairments and Charges - The company recorded an impairment of $1.3 billion for its Materials Solutions Division and $0.5 billion for its Equipment Solutions Business due to softer industry demand, particularly in the personal computer and smartphone markets[36]. - Additional impairment charges of $62 million for the Materials Solutions Division and $13 million for the Equipment Solutions Business were recorded during the three months ended December 31, 2023[36]. - An excess and obsolescence inventory charge was recorded related to a discontinued product line[39]. Other Financial Considerations - The effective tax rate for non-GAAP income in Q4 2024 was 4.0%, compared to 15.6% in Q4 2023[28]. - Non-GAAP financial measures are presented to provide investors with a useful comparison of ongoing business trends and operating results[31]. - Non-GAAP adjustments are tax affected at applicable statutory rates, resulting in a difference between GAAP and Non-GAAP tax rates[39]. - The company incurred costs related to a ransomware incident identified on February 3, 2023, primarily for third-party consulting services and enhancements to cybersecurity measures[38]. - Fees and expenses related to the repricing of USD term loan B and EUR term loan B were recorded during the twelve months ended December 31, 2024[35].

Core Insights - MKS Instruments reported strong financial results for Q4 and full year 2024, with revenue and adjusted EBITDA exceeding the midpoint of guidance, indicating robust performance despite mixed demand conditions [2][3][7] - The company is well-positioned for 2025, driven by increased customer engagement in its optics solutions and solid trends in its chemistry business, highlighting its critical role in advanced electronics [2][3] Financial Performance - Q4 2024 revenue reached $935 million, up from $896 million in Q3 2024 and $893 million in Q4 2023, while full year revenue totaled $3.586 billion, slightly down from $3.622 billion in 2023 [9] - GAAP net income for Q4 2024 was $90 million, translating to a diluted earnings per share of $1.33, compared to $62 million and $0.92 per share in Q3 2024 [9][7] - Adjusted EBITDA for Q4 2024 was $237 million, with non-GAAP net earnings per diluted share at $2.15, both figures above the midpoint of guidance [7][9] Guidance for Q1 2025 - The company anticipates Q1 2025 revenue of $910 million, plus or minus $40 million, with GAAP net income projected at $43 million, plus or minus $19 million, and adjusted EBITDA expected to be $217 million, plus or minus $23 million [4] Operational Highlights - MKS Instruments maintained a healthy gross margin of 47.2% in Q4 2024, slightly down from 48.2% in Q3 2024, while the operating margin improved to 14.5% from 14.3% [9][30] - The company successfully managed its leverage, completing a repricing of its term loan B and making a voluntary principal prepayment of $100 million in January 2025 [3][12] Cash Flow and Capital Structure - As of December 31, 2024, MKS had $714 million in cash and cash equivalents, with total liabilities amounting to $6.268 billion [11][21] - The company paid a cash dividend of $15 million in Q4 2024, maintaining a consistent dividend policy [11]