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"We are thrilled to receive this important recognition for a second straight year," said John T.C. Lee, President and Chief Executive Officer at MKS. "We recognize that our success rests on our ability to attract and retain some of the most talented people in our industry. To that end, we work to create an environment and culture in which individuals are valued and supported so they can reach their full potential. We are proud that U.S. News has again recognized our efforts, which speaks to our long-term co ...

Group 1: MKS Instruments Expansion - MKS Instruments is set to build a Super Center factory in Penang, Malaysia, to support wafer fabrication equipment production, with construction expected to begin in early 2025 [7] - The new facility will be developed in three phases, highlighting MKS Instruments' commitment to expanding its operations in the region [7] - The decision to establish the factory underscores Malaysia's growing reputation as a premier destination for advanced technology investments [8] Group 2: Economic Impact and Workforce Development - The establishment of MKS Instruments' facility is expected to create high-value job opportunities for the local workforce, aligning with Penang's ambition to enhance its semiconductor value chain [1] - The Malaysian Investment Development Authority (MIDA) anticipates that MKS Instruments' activities in the semiconductor market will significantly enhance manufacturing capabilities in Malaysia, supporting the New Industrial Masterplan 2030 (NIMP2030) [2] - MIDA expresses excitement about the collaboration with MKS Instruments, viewing it as a pivotal step towards strengthening Malaysia's advanced manufacturing sector [2] Group 3: Strategic Importance of Penang - Penang is recognized for its well-developed industrial ecosystem, making it an ideal location for high-tech companies like MKS Instruments to expand operations [1][2] - The proximity to customers, suppliers, and a robust technology infrastructure in Penang is seen as a significant advantage for MKS Instruments [9] - The investment by MKS Instruments reflects confidence in Malaysia's skilled workforce and favorable business environment [8]

Core Viewpoint - MKS Instruments reported strong Q1 2024 earnings, with significant year-over-year growth in both earnings and revenues, although some segments underperformed expectations [2][3][4]. Financial Performance - Adjusted earnings per share for Q1 2024 were $1.18, a substantial increase from $0.48 in the same quarter last year, exceeding the Zacks Consensus Estimate by 57.33% [2]. - Total revenues reached $868 million, surpassing the consensus mark by 0.73% and reflecting a 9.3% year-over-year increase [3]. - Product revenues, accounting for 86.9% of total revenues, were $754 million, up 5.9% year over year, while service revenues surged 39% to $114 million [3]. Segment Performance - Revenues from the Semiconductor market, which constituted 40.4% of total revenues, increased by 13.6% year over year to $351 million, beating the Zacks Consensus Estimate by 6.70% [4]. - Electronics & Packaging revenues fell to $208 million from $222 million in the previous year, missing estimates by 5.13% [4]. - Specialty Industrial revenues rose 17.5% year over year to $309 million but fell short of the Zacks Consensus Estimate by 1.44% [5]. Operating Metrics - Adjusted gross margin expanded by 560 basis points to 47.8% year over year [6]. - Non-GAAP operating income increased by 82.3% to $175 million, with the adjusted operating margin rising 810 basis points to 20.2% [6]. - Adjusted EBITDA grew 55% year over year to $217 million, with the adjusted EBITDA margin widening 740 basis points to 25% [7]. Balance Sheet and Cash Flow - As of March 31, 2024, cash and cash equivalents totaled $845 million, down from $875 million at the end of 2023 [8]. - Cash flow from operations was $67 million, significantly lower than the $180 million reported in the previous quarter [8]. - Free cash flow decreased to $49 million from $146 million in the prior quarter, with a cash dividend of $15 million paid [8]. Guidance - For Q2 2024, MKS Instruments expects revenues of $860 million, with a variance of +/- $40 million [9]. - The company anticipates adjusted EBITDA of $197 million (+/- $23 million) and non-GAAP earnings of 93 cents (+/- 26 cents) per share [10]. Market Sentiment - Recent estimates for MKS Instruments have trended downward, with a consensus estimate shift of -11.32% [10]. - The company holds a Zacks Rank of 3 (Hold), indicating expectations for an in-line return in the coming months [12]. - MKS Instruments has a strong Growth Score of A but lags in Momentum Score with a D, resulting in an aggregate VGM Score of B [11].

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 ...