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 ...

ANDOVER, Mass., May 08, 2024 (GLOBE NEWSWIRE) -- MKS Instruments, Inc. (NASDAQ:MKSI), a global provider of enabling technologies that transform our world, today announced that its Board of Directors has authorized a quarterly cash dividend of $0.22 per share, payable on June 7, 2024, to shareholders of record as of May 28, 2024. Future dividend declarations, as well as the record and payment dates for such dividends, are subject to the final determination of the Company's Board of Directors. About MKS Instr ...

ANDOVER, Mass., May 06, 2024 (GLOBE NEWSWIRE) -- MKS Instruments, Inc. (NASDAQ:MKSI), a global provider of enabling technologies that transform our world, has been recognized as an outstanding supplier by Samsung Electro-Mechanics (SEMCO), a world-class company that develops and produces major electronics components, for the development and trial production of new products with MKS' Atotech team in Korea. "This recognition reflects the strong partnership and deep trust that has been established between MKS ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (MARK ONE) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission File number 0-23621 MKS INSTRUMENTS, INC. (Exact Name of Registrant as Specified in Its Charter) Massachusetts 04-22775 ...

Financial Data and Key Metrics Changes - For Q4 2023, the company reported revenue of $893 million, adjusted EBITDA of $218 million, and net earnings per diluted share of $1.17, all exceeding the high end of guidance [1][29][64] - Full year 2023 revenue totaled $3.6 billion, down 19% year-over-year, with adjusted EBITDA of $863 million and net earnings per diluted share of $4.43 [17][33][64] - The fourth quarter operating margin was 20.3%, significantly above guidance due to higher revenue and prudent cost control [41][64] Business Line Data and Key Metrics Changes - Semiconductor revenue for Q4 was $362 million, down 1% sequentially and 28% year-over-year, driven by a decline in global semiconductor capital equipment spending [62][33] - Electronics and Packaging revenue for Q4 was $226 million, reflecting a stable but muted demand environment [5][62] - Specialty Industrial revenue for Q4 was $305 million, down 3% year-over-year, with consumables and services revenue comprising 41% of total revenue [30][33] Market Data and Key Metrics Changes - The Semiconductor market showed better-than-expected demand in certain product categories, but overall demand remained muted due to a downturn in NAND equipment spending [2][4] - The Electronics and Packaging market experienced stable demand, consistent with production volumes in PCs, smartphones, and servers [5][25] - Specialty Industrial market demand remained stable, with expectations for Q1 2024 to align with Q4 levels [35][66] Company Strategy and Development Direction - The company is focused on innovation, cost control, and managing its balance sheet to drive growth and value creation [1][20] - MKS is positioning itself as a critical enabler of advanced electronics, particularly in the semiconductor and packaging markets, with a strong emphasis on R&D for next-generation designs [22][24] - The integration of Atotech is expected to enhance capabilities and provide a higher mix of consumables and services revenue, with targeted cost synergies on track [20][31] Management's Comments on Operating Environment and Future Outlook - Management anticipates a slow recovery in end markets, with the second half of 2024 expected to show improvement [23][51] - The company expects Q1 2024 revenue to decline sequentially due to typical seasonality and muted demand [4][25] - Management expressed confidence in the company's ability to navigate challenges and capitalize on long-term growth opportunities [39][50] Other Important Information - The company exited Q4 with over $1.3 billion in liquidity and successfully refinanced $744 million in secured term loans [42][72] - The company generated operating cash flow of $319 million and free cash flow of $232 million for the year [68] - The company received industry accolades, including being named one of America's most responsible companies for 2024 [37] Q&A Session Summary Question: How should we think about total revenue and guidance for the first quarter? - Management indicated that visibility is limited, but they expect the first half to be consistent with current levels, with potential improvement in the second half [51][74] Question: How does the company view its performance relative to WFE? - Management noted that while WFE is expected to be flat, they believe their performance will align with industry trends, with inventory levels stabilizing [54][78] Question: What is the outlook for the E&P business and laser systems? - Management acknowledged that demand remains muted but noted that improvements in utilization rates could lead to increased CapEx in the future [57][80] Question: Can you provide insights on the PCB part of the business? - Management stated that CapEx for lasers is lumpy, and while smartphone volumes may grow, they do not expect significant immediate demand for PCB drilling equipment [79][80] Question: What is the outlook for cash flow stability? - Management expressed optimism about cash flow becoming more robust as revenues pick up, despite Q1 typically having lower free cash flow due to timing of compensation payments [85][96]

Ransomware Event Impact - Ransomware event negatively impacted Q1 2023 revenue by approximately $160 million, with $120 million recovered in Q2 and $30 million in Q3[123] - Net revenues for Q3 2023 in the semiconductor market decreased by $74 million (17%) compared to the prior quarter, with $20 million attributed to delayed orders from the ransomware event[134] - The ransomware event incurred net costs of $2 million for Q3 2023 and $14 million for the nine months ended September 30, 2023, primarily due to third-party consulting services and cybersecurity enhancements[125] - The company has recovered approximately $110 million of revenue from orders delayed by the ransomware event from Q1 2023[134] - Net revenues in the specialty industrial market decreased by $15 million (4%) for the three months ended September 30, 2023, compared to the prior quarter, with delayed orders due to a ransomware event impacting revenue by approximately $10 million[144] - Net product revenues decreased by $67 million for the three months ended September 30, 2023, compared to the prior quarter, with $17 million recovered from the ransomware event[149] Semiconductor Market Performance - Net revenues for Q3 2023 in the semiconductor market decreased by $74 million (17%) compared to the prior quarter, with $20 million attributed to delayed orders from the ransomware event[134] - Net revenues for the nine months ended September 30, 2023, in the semiconductor market decreased by $421 million (27%) compared to the same period in the prior year due to softened demand[135] - Net revenues from VSD decreased by $426 million for the nine months ended September 30, 2023, compared to the same period in the prior year, due to volume decreases in the semiconductor market[154] Electronics and Packaging Market Performance - Net revenues for Q3 2023 in the electronics and packaging market increased by $18 million (8%) compared to the prior quarter, driven by higher chemistry sales and increased PCB and package substrate production[138] - Net revenues for the nine months ended September 30, 2023, in the electronics and packaging market increased by $416 million (151%) compared to the same period in the prior year, primarily due to the Atotech Acquisition[139] Specialty Industrial Market Performance - The specialty industrial market net revenues for Q3 2023 were $322 million, representing 35% of total net revenues[131] - Net revenues in the specialty industrial market decreased by $15 million (4%) for the three months ended September 30, 2023, compared to the prior quarter, with delayed orders due to a ransomware event impacting revenue by approximately $10 million[144] - Net revenues in the specialty industrial market increased by $274 million (42%) for the nine months ended September 30, 2023, compared to the same period in the prior year, driven by the Atotech Acquisition[145] Atotech Acquisition Impact - Net revenues for the nine months ended September 30, 2023, in the electronics and packaging market increased by $416 million (151%) compared to the same period in the prior year, primarily due to the Atotech Acquisition[139] - Net revenues in the specialty industrial market increased by $274 million (42%) for the nine months ended September 30, 2023, compared to the same period in the prior year, driven by the Atotech Acquisition[145] - Net product revenues increased by $263 million for the nine months ended September 30, 2023, compared to the same period in the prior year, driven by the Atotech Acquisition, with MSD net product revenues increasing by $710 million[150] - Net revenues from MSD increased by $737 million for the nine months ended September 30, 2023, compared to the prior year, as MSD was established following the Atotech Acquisition[156] - Research and development expenses increased by $50 million for the nine months ended September 30, 2023, compared to the same period in the prior year, primarily due to the Atotech Acquisition[164] - Selling, general, and administrative expenses increased by $195 million for the nine months ended September 30, 2023, driven by the Atotech Acquisition and ransomware-related costs[169] - Acquisition and integration costs for the nine months ended September 30, 2023, were $14 million, primarily related to the Atotech Acquisition[170] - Amortization of intangible assets decreased by $8 million in Q3 2023 compared to the prior quarter, but increased by $148 million for the nine months ended September 30, 2023, due to the Atotech Acquisition[172] - The Atotech Acquisition was completed on August 17, 2022, with a total net purchase price of $5.7 billion, funded by cash on hand and proceeds from the New Term Loan Facility[190] U.S. Export Regulations Impact - The company expects an annualized reduction of net revenues in the range of $250 million to $350 million due to new U.S. export regulations, with the impact currently expected to be on the lower end of that range[136] Financial Performance and Expenses - Total net revenues for Q3 2023 were $932 million, with semiconductor, electronics and packaging, and specialty industrial markets contributing 39%, 26%, and 35% respectively[131] - Gross margin for products decreased to 45.4% for the three months ended September 30, 2023, from 46.9% in the prior quarter, due to lower revenue volumes and higher inventory charges[157] - Gross margin for MSD increased to 54.1% for the three months ended September 30, 2023, from 50.0% in the prior quarter, driven by favorable product mix and lower overhead costs[163] - Selling, general, and administrative expenses decreased by $5 million in Q3 2023 compared to the prior quarter, primarily due to lower compensation and travel costs[168] - Restructuring charges for the nine months ended September 30, 2023, were $13 million, mainly due to severance costs from global cost-saving initiatives[171] - Non-cash goodwill impairments totaled $1,827 million in Q2 2023, with $826 million for the EL reporting unit, $428 million for the GMF reporting unit, and $372 million for the ESB reporting unit[175] - Interest expense increased by $5 million in Q3 2023 compared to the prior quarter, primarily due to higher interest rates on borrowings related to the Atotech Acquisition[178] - Net cash provided by operating activities was $138 million for the nine months ended September 30, 2023, despite a net loss of $1,772 million, driven by non-cash charges and working capital changes[187] - Net cash used in investing activities was $50 million for the nine months ended September 30, 2023, primarily due to $53 million in capital expenditures[188] - Net cash used in financing activities was $116 million for the nine months ended September 30, 2023, including $67 million for payments on the New Term Loan Facility and $44 million in dividend payments[188] - The company declared a cash dividend of $0.22 per share for each of the first three quarters of 2023, totaling $44 million for the nine months ended September 30, 2023[189] Research and Development - Research and development expenses increased by $50 million for the nine months ended September 30, 2023, compared to the same period in the prior year, primarily due to the Atotech Acquisition[164] - Research and development efforts focus on improving instruments, components, chemistry, subsystems, systems, and process control solutions, with projects typically lasting 3 to 36 months[165] - New products are being developed to address industry trends such as the transition to 5G, larger substrate sizes in flat panel displays, and the shift to electric vehicles[166] Financing and Debt - The New Term Loan Facility includes three tranches: a USD 1 billion loan (USD Tranche A), a USD 3.6 billion loan (USD Tranche B), and a EUR 600 million loan (Euro Tranche B)[191] - As of September 30, 2023, the outstanding principal amount of the New Term Loan Facility was $5.0 billion with a weighted average interest rate of 7.9%[211] - The company made a voluntary prepayment of $100 million on the USD Tranche A on October 31, 2023[213] - The company has lines of credit and financing facilities in Japan, providing for aggregate borrowings of up to $13 million, with no borrowings as of September 30, 2023[214] - The company uses derivative instruments, such as foreign exchange forward contracts and interest rate swaps, to manage foreign currency and interest rate exposure[215] - The company converted USD LIBOR-based interest rate caps and swaps to Term SOFR, effective June 30, 2023, with no material impact on results of operations[217] Market Risk and Contractual Obligations - No material changes in the company's exposure to market risk from December 31, 2022 to September 30, 2023[219] - No changes outside the ordinary course of business to the company's contractual obligations as disclosed in the Annual Report[218] International Revenues - International revenues accounted for 66% of total net revenues for the nine months ended September 30, 2023, up from 56% in the prior year, primarily due to the Atotech Acquisition[146]

MKS Instruments, Inc. (NASDAQ:MKSI) Q3 2023 Earnings Conference Call November 2, 2023 8:00 AM ET Company Participants David Ryzhik – Vice President-Investor Relations John Lee – President and Chief Executive Officer Seth Bagshaw – Executive Vice President and Chief Financial Officer Conference Call Participants Krish Sankar – TD Cowen Joe Quatrochi – Wells Fargo Steve Barger – Keybanc Capital Markets James Ricchiuti – Needham & Company Sidney Ho – Deutsche Bank Operator Good day and thank you for standing b ...