MKS Instruments, Inc. (NASDAQ:MKSI) Q2 2022 Earnings Conference Call July 28, 2022 8:30 AM ET Company Participants David Ryzhik - Vice President, Investor Relations John Lee - President & Chief Executive Officer Seth Bagshaw - Senior Vice President & Chief Financial Officer Conference Call Participants Amanda Scarnati - Citi Patrick Ho - Stifel Joe Quatrochi ??? Wells Fargo James Ricchiuti - Needham & Company Krish Sankar - Cowen Paretosh Misra - Berenberg Mark Miller - The Benchmark Company Operator Good d ...

MKS Instruments Overview - MKS Instruments is a leading critical subsystems supplier for semiconductor manufacturing and an emerging solutions provider for advanced electronics manufacturing[9] - In 2021, Semiconductor accounted for 62% of total revenue, Advanced Electronics 15%, and Specialty Industrial 23%[11] - From 2015 to 2021, MKS Instruments' total revenue increased from $08 billion to $29 billion, representing a compound annual growth rate (CAGR) of +24%[57] Semiconductor Market - MKS addresses >85% of Wafer Fabrication Equipment (WFE)[22] - Average WFE spending is projected to increase from $53 billion (2016-2020) to over $100 billion (2021-2025)[20] - MKS estimates that ~100% of all semiconductor chips manufactured in the world today are made possible by MKS[23] Advanced Electronics Market - Laser manufacturing is seeing broad adoption in electronics manufacturing due to increasing processes and complexity[32, 34] - MKS leverages its "Surround the Workpiece" strategy to drive growth in precision manufacturing[37] Acquisition of Atotech - MKS entered into an agreement to acquire Atotech Limited for ~$51 billion in cash and stock[46] - Pro forma with Atotech, the revenue mix is estimated to be approximately 41% Semiconductor, 27% Advanced Electronics, and 32% Specialty Industrial[67] - The acquisition of Atotech is projected to reduce MKS's exposure to the semiconductor market to ~40% and add recurring revenue with strong profitability[68] Financial Performance - MKS generated $18 billion in strong through-cycle free cash flow[60] - From 2017-2021, MKS allocated $32 billion in capital, with 41% towards acquisitions, 26% towards product development, 14% towards debt management, 10% towards CAPEX, 7% towards dividends and 2% towards share buybacks[62, 63]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q Commission file number 0-23621 MKS INSTRUMENTS, INC. (Exact name of registrant as specified in its charter) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to | Massachusetts | 04-2277512 | | --- | --- | | (State or oth ...

MKS Instruments, Inc. (NASDAQ:MKSI) Q1 2022 Earnings Conference Call April 27, 2022 8:30 AM ET Company Participants David Ryzhik ??? Vice President-Investor Relations John Lee ??? President and Chief Executive Officer Seth Bagshaw ??? Senior Vice President and Chief Financial Officer Conference Call Participants Patrick Ho ??? Stifel Jim Ricchiuti ??? Needham & Company Scott Graham ??? Loop Capital Markets Joe Quatrochi ??? Wells Fargo Paretosh Misra ??? Berenberg Hans Chung ??? D.A. Davidson Operator Good ...

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, 2021 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 - The company reported revenue of $764 million for Q4 2021, which is a 16% increase year-over-year and a 3% increase sequentially [20] - Net earnings for Q4 were $168 million, translating to $3.02 per diluted share, both above the midpoint of guidance [10][24] - For the full year 2021, total sales reached a record $2.9 billion, up 27% year-over-year [28] - Gross margin for Q4 was 46.4%, exceeding guidance by 40 basis points and growing 70 basis points year-over-year [23] - Operating cash flow for Q4 was a record $194 million, and free cash flow was also a record at $171 million [26] Business Line Data and Key Metrics Changes - Semiconductor market sales for Q4 were $495 million, up 26% year-over-year and up 1% sequentially [20] - Advanced markets revenue was $269 million for Q4, up 1% year-over-year and up 6% sequentially [21] - Sales of photonic solutions grew organically more than 50% year-over-year, with a 90% increase including the Photon Control acquisition [20] Market Data and Key Metrics Changes - The revenue split between semiconductor and advanced markets for Q4 was 65% and 35% respectively [23] - Demand trends in the semiconductor market are expected to remain strong, although supply chain constraints will continue to impact near-term performance [12] Company Strategy and Development Direction - The company is focused on organic growth and strategic M&A opportunities, including the acquisition of Atotech, expected to close in Q1 2022 [8][15] - The integration of Atotech is anticipated to enhance the company's technology solutions across semiconductors and advanced electronics [15][17] - The company aims to leverage its expertise in high-density interconnect via drilling to accelerate customer roadmaps [14][22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing supply chain constraints affecting both semiconductor and advanced markets, but emphasized strong demand remains [37][51] - The company expects Q1 2022 revenue to be around $750 million, with gross margin estimated at 45% due to higher input costs [32] - Management expressed confidence in the long-term growth model, projecting to outgrow WFE by 200 basis points [56] Other Important Information - The company issued its inaugural CSR report, highlighting commitments to diversity, equity, inclusion, and environmental management [9] - The company maintained a strong balance sheet with cash and short-term investments exceeding $1 billion [27] Q&A Session Summary Question: Trends in advanced markets for Q1 - Management indicated that supply constraints are affecting both semiconductor and advanced markets, but demand remains strong [37] Question: Component constraints affecting supply - Management confirmed that electronic components from legacy fabs are primarily causing supply constraints, affecting multiple industries [38] Question: Market inflection for HDI tools - Management noted that the HDI market continues to drive demand for smaller features and higher density, with tools already in high-volume production [46] Question: Operating expenses trajectory for 2022 - Management expects operating expenses to increase slightly in Q2, estimating around $160 million [58] Question: Sales expectations in the semiconductor portfolio - Management indicated that while overall semiconductor revenue may be flat, certain product categories like RF Power could continue to grow [63] Question: Supply chain issues and customer orders - Management stated that major customers continue to order at record levels despite supply constraints [77]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(Unaudited).) The unaudited financial statements show significant year-over-year growth in revenue, net income, and total assets [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to $4.37 billion, driven by acquisitions and strong retained earnings growth Condensed Consolidated Balance Sheet Highlights (in millions) | Account | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total current assets** | $1,994.9 | $1,804.4 | | Goodwill | $1,226.2 | $1,066.4 | | Intangible assets, net | $589.5 | $512.2 | | **Total assets** | **$4,365.9** | **$3,903.8** | | **Total current liabilities** | $437.1 | $373.9 | | Long-term debt, net | $809.7 | $815.0 | | **Total liabilities** | **$1,637.3** | **$1,542.9** | | Retained earnings | $1,853.0 | $1,487.3 | | **Total stockholders' equity** | **$2,728.6** | **$2,360.9** | [Condensed Consolidated Statements of Operations and Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) The company reported strong year-over-year growth in revenue and net income for both Q3 and the nine-month period Q3 2021 vs Q3 2020 Performance (in millions, except EPS) | Metric | Q3 2021 | Q3 2020 | % Change | | :--- | :--- | :--- | :--- | | Total net revenues | $741.9 | $589.8 | +25.8% | | Gross profit | $348.4 | $262.0 | +32.9% | | Income from operations | $175.3 | $116.4 | +50.6% | | Net income | $132.4 | $91.7 | +44.4% | | Diluted EPS | $2.38 | $1.66 | +43.4% | Nine Months 2021 vs 2020 Performance (in millions, except EPS) | Metric | Nine Months 2021 | Nine Months 2020 | % Change | | :--- | :--- | :--- | :--- | | Total net revenues | $2,185.7 | $1,669.8 | +30.9% | | Gross profit | $1,025.7 | $747.9 | +37.1% | | Income from operations | $517.1 | $307.1 | +68.4% | | Net income | $401.2 | $234.5 | +71.1% | | Diluted EPS | $7.21 | $4.24 | +69.9% | [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity increased to $2.73 billion, primarily driven by net income of $401.2 million - Retained earnings grew from **$1,487.3 million** at December 31, 2020, to **$1,853.0 million** at September 30, 2021[13](index=13&type=chunk) - The company paid cash dividends totaling **$35.5 million** during the first nine months of 2021[13](index=13&type=chunk)[111](index=111&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow remained strong at $445.2 million, though investing activities increased due to an acquisition Cash Flow Summary (Nine Months Ended Sep 30, in millions) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $445.2 | $366.0 | | Net cash used in investing activities | ($351.2) | ($172.3) | | Net cash used in financing activities | ($61.7) | ($115.3) | | **Increase in cash and cash equivalents** | **$25.0** | **$78.7** | - The acquisition of business, net of cash acquired, used **$268.4 million** in cash during the first nine months of 2021[18](index=18&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail revenue disaggregation, the Photon Control acquisition, and the pending $5.1 billion Atotech acquisition - On July 15, 2021, the Company completed its acquisition of Photon Control for aggregate consideration of **$302.7 million**, funded with cash on hand[113](index=113&type=chunk)[114](index=114&type=chunk) - On July 1, 2021, the Company entered into a definitive agreement to acquire Atotech Limited for approximately **$5.1 billion** in cash and stock, with the acquisition expected to close by the end of 2021[144](index=144&type=chunk) - The company's two largest customers, Lam Research Corporation and Applied Materials, Inc, represented **14.6%** and **10.7%** of net revenues, respectively, for the first nine months of 2021[133](index=133&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=33&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS.) Management attributes strong performance to semiconductor market demand and discusses recent and pending acquisitions [Overview and Recent Events](index=33&type=section&id=Overview%20and%20Recent%20Events) The company completed the acquisition of Photon Control and announced a definitive agreement to acquire Atotech - Completed the acquisition of Photon Control, a designer of optical sensors for semiconductor wafer fabrication, on July 15, 2021, for **CAD 378.6 million (USD 302.7 million)**[153](index=153&type=chunk) - Entered into a definitive agreement to acquire Atotech, a process chemicals technology company, for approximately **$5.1 billion**[155](index=155&type=chunk) - Secured a commitment for a new **$5.3 billion term loan facility** and a **$500 million revolving credit facility** to fund the Atotech acquisition and refinance existing debt[155](index=155&type=chunk) [Segments and Markets](index=34&type=section&id=Segments%20and%20Markets) The semiconductor market drove performance, accounting for 61% of revenue with 36% year-over-year growth in Q3 - The Semiconductor market accounted for approximately **61% of net revenues** for the nine months ended September 30, 2021[162](index=162&type=chunk) - Net revenues in the semiconductor market increased by **36% for Q3 2021** and **34% for the nine months ended Sep 30, 2021**, compared to the same periods in the prior year[164](index=164&type=chunk) - The company is experiencing supply chain disruptions and component shortages in its semiconductor market, which may negatively impact revenue for Q4 2021[168](index=168&type=chunk) [Results of Operations](index=36&type=section&id=Results%20of%20Operations) Q3 net revenues grew 25.8% year-over-year, with gross margin improving to 47.0% due to higher volumes Net Revenues by Segment (in millions) | Segment | Q3 2021 | Q3 2020 | YTD 2021 | YTD 2020 | | :--- | :--- | :--- | :--- | :--- | | Vacuum & Analysis | $483.1 | $361.3 | $1,376.6 | $995.1 | | Light & Motion | $208.7 | $175.9 | $583.6 | $507.3 | | Equipment & Solutions | $50.1 | $52.6 | $225.5 | $167.4 | | **Total** | **$741.9** | **$589.8** | **$2,185.7** | **$1,669.8** | - Total gross margin increased to **47.0% in Q3 2021** from 44.4% in Q3 2020, primarily due to higher revenue volumes and favorable product mix[187](index=187&type=chunk)[189](index=189&type=chunk) - Acquisition and integration costs were **$8.6 million in Q3 2021**, primarily related to the Photon Control acquisition and the announced Atotech acquisition[200](index=200&type=chunk) - The effective tax rate for Q3 2021 was **20.4%**, compared to 15.7% in Q3 2020[96](index=96&type=chunk)[97](index=97&type=chunk)[206](index=206&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with $879.6 million in cash and robust operating cash flow - Cash and cash equivalents and short-term investments totaled **$879.6 million** at September 30, 2021[214](index=214&type=chunk) - Net cash provided by operating activities was **$445.2 million** for the nine months ended September 30, 2021[215](index=215&type=chunk) - The outstanding principal amount of the Term Loan Facility was **$826.7 million** as of September 30, 2021, with an interest rate of 1.8%[227](index=227&type=chunk) - The company declared dividends totaling **$0.64 per share ($35.5 million)** in the first nine months of 2021[221](index=221&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK.) There were no material changes in the company's market risk exposure since the last annual report - As of September 30, 2021, there were **no material changes** in the company's exposure to market risk from December 31, 2020[249](index=249&type=chunk) [Controls and Procedures](index=46&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES.) Management concluded that disclosure controls and procedures were effective as of the end of the quarter - The Chief Executive Officer and Chief Financial Officer concluded that as of September 30, 2021, the company's disclosure controls and procedures were **effective** at a reasonable assurance level[250](index=250&type=chunk) - **No changes occurred** in the company's internal control over financial reporting during the quarter ended September 30, 2021, that would have a material effect[251](index=251&type=chunk) [PART II. OTHER INFORMATION](index=47&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=47&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS.) The company is involved in an ongoing legal proceeding related to the 2016 Newport Corporation acquisition - The company is subject to a legal proceeding stemming from the **2016 Newport Corporation merger**, where plaintiffs allege breaches of fiduciary duty by Newport's former directors[141](index=141&type=chunk) - A Nevada District Court granted summary judgment in favor of the defendants in January 2020, but the plaintiffs have **appealed to the Nevada Supreme Court**[142](index=142&type=chunk) - Management believes the ultimate outcome of this and other ordinary course legal matters will **not have a material adverse effect** on the company's financial condition or results of operations[143](index=143&type=chunk) [Risk Factors](index=47&type=section&id=ITEM%201A.%20RISK%20FACTORS.) The report refers to risk factors previously disclosed in its 2020 Form 10-K and a prior Form 10-Q - For a discussion of risk factors, the report incorporates by reference the sections in the **Annual Report on Form 10-K** for the year ended December 31, 2020, and the **Quarterly Report on Form 10-Q** for the period ended June 30, 2021[254](index=254&type=chunk) [Exhibits](index=48&type=section&id=ITEM%206.%20EXHIBITS.) This section lists filed exhibits, including agreements for the Atotech acquisition and required officer certifications - Key exhibits filed include the **Implementation Agreement with Atotech Limited** dated July 1, 2021, and the associated debt Commitment Letter[256](index=256&type=chunk) - **Certifications from the CEO and CFO** pursuant to Rule 13a-14(a)/15d-14(a) and Section 906 of the Sarbanes-Oxley Act of 2002 are included as exhibits[256](index=256&type=chunk) [Signatures](index=50&type=section&id=SIGNATURES)

MKS Instruments, Inc. (NASDAQ:MKSI) Q3 2021 Earnings Conference Call October 28, 2021 8:30 AM ET Company Participants David Ryzhik ??? Vice President-Investor Relations John Lee ??? President and Chief Executive Officer Seth Bagshaw ??? Senior Vice President and Chief Financial Office Conference Call Participants Jim Ricchuiti ??? Needham Patrick Ho ??? Stifel Krish Sankar ??? Cowen & Company Paretosh Misra ??? Berenberg Tom Diffely ??? D.A. Davidson Joe Quatrochi ??? Wells Fargo Sidney Ho ??? Deutsche Bank ...

Financial Data and Key Metrics Changes - Total revenue for Q2 2021 was $377 million, an increase of 44% year-over-year, including organic revenue growth of 32% and a favorable FX impact of 9% [20][21] - Adjusted EBITDA increased by 63% to a record $118 million, with an adjusted EBITDA margin of 31%, leading the industry [13][22] - Diluted earnings per share was $0.15, a significant recovery from a loss of $3.47 in Q2 2020, with adjusted EPS at $0.29 [25][26] Business Line Data and Key Metrics Changes - Electronics segment revenue was $248 million, up 33% year-over-year, with organic growth of 21% [27] - General Metal Finishing (GMF) segment revenue grew 71% to $129 million, driven by 59% organic growth in chemistry [32] - Organic growth in chemistry revenue for Electronics was 9%, supported by strong demand in the smartphone market and semiconductor-related businesses [28] Market Data and Key Metrics Changes - Strong demand in Asia, particularly for electronics, with significant growth in smartphone and computing sectors [62] - Automotive market remains below full capacity due to semiconductor shortages, but demand is expected to push into 2022 [33][99] - The company experienced sequential revenue declines in Europe and the Americas, attributed to supply chain issues and production ramp-up delays [96] Company Strategy and Development Direction - The company is focused on sustainability-related products, with a strong portfolio aimed at reducing environmental footprints [14][17] - Digitalization initiatives are being prioritized, with contracts signed for IIOT solutions to enhance customer energy efficiency [16] - The acquisition agreement with MKS Instruments is expected to enhance collaboration and innovation in advanced electronics markets [18][19] Management's Comments on Operating Environment and Future Outlook - Management noted that the recovery from the pandemic is ongoing, with strong demand trends expected to continue [8][37] - The company raised its full-year revenue growth guidance to 13% to 14%, reflecting confidence in operational improvements and cost discipline [38] - Supply chain disruptions and elevated raw material costs are anticipated to persist, but the company is working on procurement efficiency [24] Other Important Information - The company ended the quarter with net leverage of 3.2 times EBITDA, improving from 3.7 times at the end of Q1 2021 [36] - Strong free cash flow of $87 million was generated, aligning with long-term targets of over 60% cash flow conversion [35] - The company is investing in a new facility in Mexico and digitalization projects, with CapEx guidance unchanged at approximately 4.5% to 5% of total sales [39][116] Q&A Session Summary Question: Sequential sales and EBITDA change in Electronics - Management highlighted that growth was converted into profit through pricing stability and a lean cost structure, with no significant cost increases materializing [45] Question: Trends in automotive use of metallic coatings - Management expects increased use of metallic coatings in higher-end vehicles and anticipates about 30% more chemistry usage in EVs compared to ICE vehicles [55] Question: Performance of automotive segment - Management noted a strong rebound in automotive business, with good growth rates in all regions, particularly in China [61] Question: Q4 guidance and market trends - Management indicated that Q4 could see a stable or slightly declining automotive market, but they expect to outperform the market [72] Question: Equipment business visibility - Management confirmed strong orders in the equipment business, with good visibility into the first half of next year [66] Question: Update on capital projects - Management reported that the move of the factory from Mexico City to Carretero is progressing as planned, with a focus on digitalization and customer-oriented projects [115]

Atotech Q2 2021 Earnings Presentation Geoff Wild, CEO Peter Frauenknecht, CFO August 11, 2021 Legal Disclaimer Forward‐Looking Statements This presentation and the oral remarks made in connection herewith may contain "forward‐looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Any forward‐looking statements involve risks, uncertainties and assumptions. Although we believe that the assumptions and analysis underlying these statements are reasonable as of the d ...