Core Viewpoint - MKS Instruments, Inc. has successfully closed an offering of $1.4 billion in convertible senior notes, with net proceeds of approximately $1,374.2 million intended for debt repayment and general corporate purposes [1][2]. Group 1: Offering Details - The offering consisted of $1.4 billion aggregate principal amount of 1.25% convertible senior notes due 2030, with net proceeds after discounts and expenses amounting to approximately $1,374.2 million [1]. - MKS utilized about $167.4 million of the net proceeds to cover costs associated with capped call transactions, while the remaining $1,206.0 million will be used to repay borrowings under its First Lien USD tranche B term loan [2]. Group 2: Notes Characteristics - The notes are unsecured, bearing an interest rate of 1.25% per annum, with interest payable semi-annually starting December 1, 2024, and maturing on June 1, 2030 [3]. - The initial conversion rate is set at 6.4799 shares of MKS common stock per $1,000 principal amount of notes, equating to a conversion price of approximately $154.32 per share, which is a 30% premium over the last reported sale price of $118.71 on May 13, 2024 [4]. - MKS has the option to redeem the notes for cash starting June 5, 2027, under specific conditions related to the stock price [3]. Group 3: Conversion and Repurchase Terms - Upon conversion, MKS will pay cash up to the principal amount of the notes and may pay the remainder in cash, shares, or a combination thereof [5]. - Holders can require MKS to repurchase their notes at a fundamental change repurchase price equal to 100% of the principal amount plus accrued interest if a fundamental change occurs before maturity [6]. Group 4: Capped Call Transactions - MKS has entered into capped call transactions to mitigate potential dilution of its common stock upon conversion of the notes, with an initial cap price of $237.42 per share, representing a 100% premium over the last reported sale price [7]. - The option counterparties may engage in derivative transactions and purchase shares of MKS common stock, which could influence the market price of the stock and the notes [8][9].

Core Viewpoint - MKS Instruments, Inc. has successfully closed an offering of $1.4 billion in convertible senior notes, with net proceeds of approximately $1,374.2 million intended for debt repayment and general corporate purposes [1][2]. Group 1: Offering Details - The offering consisted of $1.4 billion aggregate principal amount of 1.25% convertible senior notes due 2030, with net proceeds after discounts and expenses being approximately $1,374.2 million [1]. - MKS utilized about $167.4 million of the net proceeds to cover costs associated with capped call transactions, while the remaining $1,206.0 million will be used to repay borrowings under its First Lien USD tranche B term loan [2]. - The notes are unsecured, bearing an interest rate of 1.25% per annum, with semi-annual payments starting December 1, 2024, and maturing on June 1, 2030 [3]. Group 2: Conversion and Redemption Terms - The initial conversion rate for the notes is set at 6.4799 shares of MKS common stock per $1,000 principal amount, equating to a conversion price of approximately $154.32 per share, representing a 30% premium over the last reported sale price of $118.71 [4]. - Noteholders can convert their notes under specific conditions prior to March 1, 2030, and thereafter at any time until two trading days before maturity [5]. - In the event of a fundamental change, holders may require MKS to repurchase their notes at a price equal to 100% of the principal amount plus any accrued interest [6]. Group 3: Capped Call Transactions - MKS has entered into capped call transactions to mitigate potential dilution of its common stock upon conversion of the notes, with an initial cap price of $237.42 per share, a 100% premium over the last reported sale price [7]. - The option counterparties are expected to engage in derivative transactions and purchase shares of MKS common stock, which may influence the market price of the stock and the notes [8][9].

ANDOVER, Mass., May 13, 2024 (GLOBE NEWSWIRE) -- MKS Instruments, Inc. (NASDAQ:MKSI) ("MKS") today announced the pricing of its offering of $1.2 billion aggregate principal amount of 1.25% convertible senior notes due 2030 (the "notes"). The notes will be offered and sold in a private placement (the "offering") to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). MKS also granted to the initial purch ...

ANDOVER, Mass., May 13, 2024 (GLOBE NEWSWIRE) -- MKS Instruments, Inc. (NASDAQ:MKSI) ("MKS") today announced that it intends to offer, subject to market and other conditions, $1.0 billion aggregate principal amount of convertible senior notes due 2030 (the "notes") in a private placement (the "offering") to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). MKS also expects to grant to the initial pur ...

Financial Performance - For the three months ended March 31, 2024, total net revenues were $868 million, a decrease of $25 million or 3% compared to the prior quarter, but an increase of $74 million or 9% compared to the same period last year [116]. - Semiconductor market revenues were $351 million, down $11 million or 3% from the prior quarter, but up $42 million or 14% year-over-year due to prior year order fulfillment issues related to a ransomware event [119]. - Electronics and packaging market revenues decreased by $18 million or 8% from the prior quarter and by $14 million or 6% year-over-year, primarily due to softness in the consumer electronics market [121]. - Specialty industrial market revenues increased by $4 million or 1% from the prior quarter and by $46 million or 17% year-over-year, mainly due to lower revenue in the prior year period from the ransomware event [126]. - Total net revenues for the three months ended March 31, 2024, were $868 million, a decrease from $893 million in the prior quarter but an increase from $794 million in the same period last year [134]. Profitability Metrics - Gross profit margin improved to 47.8% for the three months ended March 31, 2024, compared to 46.0% in the prior quarter and 42.2% in the same period last year [130]. - Net income for the three months ended March 31, 2024, was 1.7%, a recovery from a net loss of 7.6% in the prior quarter [130]. - The cost of revenues decreased to 52.2% of total net revenues for the three months ended March 31, 2024, down from 54.0% in the prior quarter [130]. - Gross margin as a percentage of net revenues increased to 47.8% for the three months ended March 31, 2024, compared to 46.0% in the prior quarter and 42.2% in the same period last year [137]. Research and Development - Research and development expenses increased to 8.1% of total net revenues for the three months ended March 31, 2024, compared to 7.8% in the prior quarter [130]. - Research and development expenses for the three months ended March 31, 2024, were $70 million, flat compared to the prior quarter and a decrease of $2 million from the same period last year [143]. - The company continues to focus on developing new products to meet evolving customer needs, particularly in semiconductor and electronics markets [145]. - The company expects to continue significant investment in research and development to support market expansion and product advancements [146]. Cash Flow and Investments - Net cash provided by operating activities was $67 million for the three months ended March 31, 2024, resulting from a net income of $15 million [163]. - Net cash used in investing activities was $18 million for the three months ended March 31, 2024, all attributed to capital expenditures [164]. - Net cash used in financing activities was $72 million for the three months ended March 31, 2024, primarily due to net proceeds from Incremental Tranche B Loans [165]. - Cash and cash equivalents and short-term investments totaled $846 million as of March 31, 2024, down from $875 million at the end of 2023 [162]. Debt and Financing - The company entered into a credit agreement providing for a senior secured term loan facility of $5.6 billion and a revolving credit facility of $500 million [167]. - As of March 31, 2024, the outstanding principal of the Term Loan Facility was $4.89 billion with a weighted average interest rate of 7.6% [189]. - The company has the ability to incur additional incremental debt facilities up to $1,011 million or 75% of consolidated EBITDA, plus voluntary prepayments and an unlimited amount subject to leverage ratio tests [182]. - The total net leverage ratio must not exceed 5.25 to 1.00 for fiscal quarters ending December 31, 2023, through September 30, 2024, with an annual step-down of 0.25:1.00 [183]. - As of March 31, 2024, there were no borrowings under the Revolving Facility, which has a maturity date in August 2027 [189]. - The company has lines of credit and financing facilities with Japanese subsidiaries providing for aggregate borrowings of up to $20 million as of March 31, 2024, with no borrowings under these arrangements [190]. - The Credit Agreement contains negative covenants restricting the ability to incur additional indebtedness, pay dividends, and engage in certain transactions [186]. Tax and Other Expenses - The effective tax rate for the three months ended March 31, 2024 was 23.1%, higher than the U.S. statutory tax rate, primarily due to foreign withholding taxes and U.S. base erosion tax [159]. - Interest expense for the three months ended March 31, 2024 was $81 million, compared to $82 million for the same period in 2023, indicating a slight decrease [156]. - Loss on extinguishment of debt for the three months ended March 31, 2024 was $9 million, up from $8 million in the previous quarter [157]. - Other (income) expense, net for the three months ended March 31, 2024 was a loss of $3 million, compared to a gain of $12 million in the previous quarter [158]. Market Risk and Compliance - The company is currently evaluating the impact of new accounting standards on its disclosures, including segment reporting and income tax disclosures [195][196]. - There were no material changes in the company's exposure to market risk from December 31, 2023, to March 31, 2024 [198]. - The company has used derivative instruments for risk management, including foreign exchange forward contracts and interest rate swaps [191]. - As of March 31, 2024, the company was in compliance with all covenants under the Credit Agreement [187].

MKS Instruments (MKSI) reported adjusted earnings of $1.18 per share in first-quarter 2024, up from the year-ago quarter’s earnings of 48 cents. The figure beat the Zacks Consensus Estimate by 57.33%.Revenues of $868 million beat the consensus mark by 0.73% and increased 9.3% year over year.Products revenues (86.9% of total revenues) were $754 million, up 5.9% year over year.Services revenues (13.1% of total revenues) rallied 39% year over year to $114 million. Quarterly UpdateRevenues from the Semiconducto ...

Financial Data and Key Metrics - Q1 2024 revenue was $868 million, exceeding the midpoint of guidance [2] - Adjusted EBITDA was $217 million, representing a 25% margin and exceeding the high end of guidance [2][25] - Net earnings per diluted share were $1.18, exceeding the high end of guidance [2] - Gross margin was 47.8%, exceeding the high end of guidance [62] - Operating margin was 20.2%, exceeding the high end of guidance [5] - Net leverage ratio was 4.3x based on trailing 12 months adjusted EBITDA of $940 million [38] - Free cash flow was $49 million and unlevered free cash flow was $108 million [38] Business Line Data and Key Metrics - Semiconductor market revenue was $351 million, above the high end of guidance and down 3% sequentially [61] - Electronics and packaging market revenue was $208 million, in line with guidance and down 8% sequentially [36] - Specialty industrial market revenue was $309 million, above the midpoint of guidance and up 1% sequentially [24] - Consumables and services revenue comprised 42% of total revenue across all end markets [24] Market Data and Key Metrics - Semiconductor market demand remains muted due to low NAND equipment spending, but inventories are more balanced compared to previous quarters [33] - Electronics and packaging market saw a slight pickup in demand for plating equipment lines driven by AI server demand [21] - Specialty industrial market revenue was slightly better than expected, driven by Life and Health Sciences and research and defense markets [22] Company Strategy and Industry Competition - The company is focused on managing costs while investing in innovation to capitalize on future opportunities [5] - AI is identified as a powerful secular trend driving growth in the industry [8] - The company is well-positioned for the next cyclical upturn due to its differentiated product and technology portfolio [6] - The acquisition of Atotech has contributed significantly to gross and operating margins, with cost synergies exceeding targets [37] Management Commentary on Operating Environment and Future Outlook - The company expects a slow recovery in the semiconductor and electronics and packaging markets in the second half of 2024 [30][40] - Early signs of improvement in memory pricing and demand tied to AI applications are encouraging [58] - The company is prepared to support higher run rates and capacity expansions as needed [68] Other Important Information - The company refinanced its term loan and completed a $50 million voluntary debt prepayment in Q1 [25] - Q2 2024 revenue is expected to be $860 million plus or minus $40 million, with semiconductor revenue expected to be $335 million plus or minus $15 million [64] - Q2 2024 adjusted EBITDA is expected to be $197 million plus or minus $23 million [41] Q&A Session Summary Question: Recovery timing for memory and leading-edge markets [68] - The company expects a slow recovery in the second half of 2024 but is prepared for potential inflections in demand [68] Question: Advanced packaging opportunities and complexity [69][70] - AI is driving demand for more complex substrates, benefiting the company's laser drilling, chemistry, and plating equipment solutions [69][70] Question: Pricing environment and Atotech's impact on margins [72] - Pricing has been strong, with Atotech contributing significantly to gross margins across all divisions [72] Question: NAND inventory burn-down and revenue opportunities [94][95] - NAND inventory burn-down is expected to continue into the second half of 2024, with revenue opportunities tied to node upgrades [94][95] Question: Free cash flow and net leverage [104][106] - The company is focused on deleveraging, with free cash flow and net leverage dependent on profitability and revenue growth [104][106] Question: Services gross margin strength [97][98] - Services gross margins were strong due to favorable product mix, pricing, and reduced cost pressures [97][98]

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MKS Instruments (MKSI) came out with quarterly earnings of $1.18 per share, beating the Zacks Consensus Estimate of $0.75 per share. This compares to earnings of $0.48 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 57.33%. A quarter ago, it was expected that this maker of analysis and processing equipment for semiconductor companies would post earnings of $0.89 per share when it actually produced earnings of $1.17, delivering ...

EXHIBIT 99.1 MKS Instruments Reports First Quarter 2024 Financial Results Andover, MA, May 8, 2024 -- MKS Instruments, Inc. (NASDAQ: MKSI), a global provider of enabling technologies that transform our world, today reported first quarter 2024 financial results. "MKS delivered strong results in the first quarter despite a soft end-market demand environment," said John T.C. Lee, President and Chief Executive Officer. "With markets expected to improve later this year, we are in an outstanding position with cri ...