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MKS Instruments(MKSI) - 2024 Q3 - Quarterly Results
MKSIMKS Instruments(MKSI)2024-11-06 21:31

Financial Performance - Quarterly revenue reached 896million,atthehighendofguidance[1]−GAAPnetincomewas896 million, at the high end of guidance[1] - GAAP net income was 62 million, with net income per share of 0.92[1]−AdjustedEBITDAforthequarterwas0.92[1] - Adjusted EBITDA for the quarter was 232 million, exceeding the high-end of guidance[1] - Total net revenues for Q3 2024 reached 896million,a1896 million, a 1% increase from 887 million in Q2 2024, but a 4% decrease from 932millioninQ32023[11]−NetincomeforQ32024was932 million in Q3 2023[11] - Net income for Q3 2024 was 62 million, compared to 23millioninQ22024andalossof23 million in Q2 2024 and a loss of 1,772 million in Q3 2023[11] - Net income for the three months ended September 30, 2024, was 62million,comparedto62 million, compared to 39 million for the same period in 2023, representing a 59% increase[13] - Non-GAAP net earnings for the three months ended September 30, 2024, were 116million,comparedto116 million, compared to 98 million in the same period last year, reflecting an 18.4% increase[14] - Adjusted EBITDA for the three months ended September 30, 2024, was 232million,comparedto232 million, compared to 228 million for the same period last year, indicating a 1.8% increase[15] Cash and Liquidity - Cash and cash equivalents stood at 861millionasofSeptember30,2024[8]−CashandcashequivalentsasofSeptember30,2024,were861 million as of September 30, 2024[8] - Cash and cash equivalents as of September 30, 2024, were 861 million, slightly down from 875millionattheendof2023[12]−Netcashprovidedbyoperatingactivitieswas875 million at the end of 2023[12] - Net cash provided by operating activities was 163 million for the three months ended September 30, 2024, up from 122millioninthepreviousquarter,indicatinga33.6122 million in the previous quarter, indicating a 33.6% increase[14] - Free cash flow for the three months ended September 30, 2024, was 141 million, compared to 96millioninthepreviousquarter,showinga4796 million in the previous quarter, showing a 47% increase[14] - Total cash and cash equivalents at the end of the period were 861 million, compared to 859millionattheendofthepreviousquarter,indicatingaslightincrease[13]ExpensesandCosts−Researchanddevelopmentexpensesincreasedto859 million at the end of the previous quarter, indicating a slight increase[13] Expenses and Costs - Research and development expenses increased to 70 million in Q3 2024 from 66millioninQ22024,indicatingcontinuedinvestmentininnovation[11]−OperatingexpensesforthethreemonthsendedSeptember30,2024,were66 million in Q2 2024, indicating continued investment in innovation[11] - Operating expenses for the three months ended September 30, 2024, were 304 million, up from 292millionforthesameperiodlastyear,markinga4.1292 million for the same period last year, marking a 4.1% increase[15] - The company incurred 3 million in acquisition and integration costs during the three months ended September 30, 2024[14] - Acquisition and integration costs related to the Atotech acquisition amounted to 6million[20]−Restructuringandothercostsprimarilyduetoseverancefromglobalcost−savinginitiativestotaled6 million[20] - Restructuring and other costs primarily due to severance from global cost-saving initiatives totaled 6 million[20] - A ransomware incident incurred costs of 14million,primarilyforthird−partyconsultingandcybersecurityenhancements[21]DebtandEquity−Thecompanymadeavoluntaryprincipalprepaymentof14 million, primarily for third-party consulting and cybersecurity enhancements[21] Debt and Equity - The company made a voluntary principal prepayment of 216 million in October 2024[1] - Long-term debt increased to 4,758millionasofSeptember30,2024,comparedto4,758 million as of September 30, 2024, compared to 4,696 million at the end of 2023[12] - Total stockholders' equity decreased to 2,398millionasofSeptember30,2024,from2,398 million as of September 30, 2024, from 2,472 million at the end of 2023[12] - The company recorded a loss on extinguishment of debt of 5millionforthethreemonthsendedSeptember30,2024,downfrom5 million for the three months ended September 30, 2024, down from 38 million in the previous quarter[14] - The company recorded a loss on extinguishment of debt of 52millionduringtheperiod[18]ProfitabilityMetrics−Grossmarginimprovedto48.252 million during the period[18] Profitability Metrics - Gross margin improved to 48.2% in Q3 2024, compared to 45.7% in Q3 2023[7] - Non-GAAP diluted earnings per share was 1.72, up from 1.46inQ32023[7]−Non−GAAPgrossmarginimprovedto48.21.46 in Q3 2023[7] - Non-GAAP gross margin improved to 48.2% for the three months ended September 30, 2024, compared to 47.3% for the same period in 2023[15] - Non-GAAP income from operations was 195 million for the three months ended September 30, 2024, compared to 192millionforthesameperiodlastyear,reflectinga1.6192 million for the same period last year, reflecting a 1.6% increase[15] - The company reported a non-GAAP operating margin of 21.8% for the three months ended September 30, 2024, compared to 21.7% for the same period last year[15] Strategic Focus - The integration of Atotech Limited is a key strategic focus for future growth opportunities[9] - The company is focused on maintaining strong profit margins and generating healthy cash flow[1] Impairments and Adjustments - The company experienced a goodwill and intangible asset impairment of 1.827 billion in the previous year, which is a significant factor in the overall financial performance[14] - Goodwill and intangible asset impairments reached 1.827billion,attributedtosofterindustrydemandinthepersonalcomputerandsmartphonemarkets[21]−Non−GAAPadjustmentsincludedataxeffectof1.827 billion, attributed to softer industry demand in the personal computer and smartphone markets[21] - Non-GAAP adjustments included a tax effect of 69 million, resulting in a difference between GAAP and Non-GAAP tax rates[18] - The effective tax rate for non-GAAP income was 15.1% for the nine months ended September 30, 2024, compared to 20.5% for the same period in 2023[16] - The company recorded an excess and obsolescence inventory charge of 13millionrelatedtoadiscontinuedproductline[18]FutureOutlook−ForQ42024,thecompanyexpectsrevenueof13 million related to a discontinued product line[18] Future Outlook - For Q4 2024, the company expects revenue of 910 million, plus or minus $40 million[2]