Entegris(ENTG) - 2025 Q1 - Quarterly Results

Entegris First Quarter 2025 Earnings Release First Quarter 2025 Financial Highlights The company reported 5% year-over-year adjusted revenue growth, managed tariff impacts, and focused on improving profitability and cash flow - CEO Bertrand Loy highlighted that Q1 revenue grew 5% year-over-year (excluding divestitures) and that gross margin, EBITDA margin, and non-GAAP EPS were within guidance[2] - Despite increased uncertainty from new tariffs, the company is focused on leveraging its global footprint to mitigate impacts, improving free cash flow, and paying down debt[2] - Net Sales (as reported): $773 million, an increase of 0.3% from the prior year[4] - Adjusted Net Sales (excluding divestiture): Increased 5% from the prior year[4] - GAAP Diluted EPS: $0.41[4] - Non-GAAP Diluted EPS: $0.67[4] Q1 2025 Financial Results Summary (GAAP vs. Non-GAAP) | Metric | Mar 29, 2025 (Q1'25) | Mar 30, 2024 (Q1'24) | Dec 31, 2024 (Q4'24) | | :--- | :--- | :--- | :--- | | GAAP Results | | | | | Net Sales | $773.2 M | $771.0 M | $849.8 M | | Gross Margin % | 46.1% | 45.6% | 45.6% | | Operating Margin % | 15.8% | 15.3% | 17.7% | | Net Income | $62.9 M | $45.3 M | $102.3 M | | Diluted EPS | $0.41 | $0.30 | $0.67 | | Non-GAAP Results | | | | | Adjusted Gross Margin % | 46.1% | 45.6% | 45.6% | | Adjusted Operating Margin % | 22.1% | 23.1% | 23.5% | | Adjusted EBITDA % | 28.5% | 29.0% | 29.2% | | Diluted Non-GAAP EPS | $0.67 | $0.68 | $0.84 | Business Outlook The company projects Q2 2025 sales between $735 million and $775 million, with non-GAAP diluted EPS expected to be $0.60 to $0.67 Second Quarter 2025 Guidance | Metric | Q2 2025 Outlook | | :--- | :--- | | Sales | $735 M - $775 M | | GAAP Net Income | $51 M - $62 M | | GAAP Diluted EPS | $0.34 - $0.41 | | Non-GAAP Net Income | $91 M - $102 M | | Non-GAAP Diluted EPS | $0.60 - $0.67 | | Adjusted EBITDA | ~27.5% of sales | Segment Performance The Advanced Purity Solutions segment led in revenue, while the Materials Solutions segment showed year-over-year profit growth - Materials Solutions (MS): Provides materials-based solutions like chemical vapor deposition materials, CMP slurries and pads, and specialty gases to improve device performance and yield[6][7] - Advanced Purity Solutions (APS): Offers filtration, purification, and contamination-control solutions to ensure the purity of critical liquids and gases in semiconductor manufacturing[6][7] Segment Results (in millions) | Metric | Mar 29, 2025 (Q1'25) | Mar 30, 2024 (Q1'24) | Dec 31, 2024 (Q4'24) | | :--- | :--- | :--- | :--- | | Net Sales | | | | | Materials Solutions | $341.4 | $350.0 | $361.1 | | Advanced Purity Solutions | $433.9 | $423.3 | $491.2 | | Segment Profit | | | | | Materials Solutions | $75.0 | $67.1 | $77.1 | | Advanced Purity Solutions | $108.1 | $111.2 | $134.9 | Consolidated Financial Statements (Unaudited) Condensed Consolidated Statements of Operations Net sales increased slightly year-over-year to $773.2 million, driving significant growth in net income to $62.9 million Q1 2025 Statement of Operations (in millions, except per share data) | Line Item | Mar 29, 2025 | Mar 30, 2024 | Dec 31, 2024 | | :--- | :--- | :--- | :--- | | Net sales | $773.2 | $771.0 | $849.8 | | Gross profit | $356.5 | $351.8 | $387.3 | | Operating income | $122.3 | $117.6 | $150.0 | | Income before income tax expense | $71.4 | $48.9 | $112.5 | | Net income | $62.9 | $45.3 | $102.3 | | Diluted earnings per common share | $0.41 | $0.30 | $0.67 | Condensed Consolidated Balance Sheets Total assets reached $8.43 billion, supported by $3.75 billion in shareholders' equity and balanced by $3.98 billion in long-term debt Balance Sheet Highlights (in millions) | Account | Mar 29, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $340.9 | $329.2 | | Total current assets | $1,670.2 | $1,616.3 | | Goodwill | $3,943.9 | $3,943.6 | | Total assets | $8,431.4 | $8,394.6 | | Liabilities and Equity | | | | Total current liabilities | $512.6 | $525.2 | | Long-term debt | $3,984.5 | $3,981.1 | | Shareholders' equity | $3,749.4 | $3,691.5 | | Total liabilities and equity | $8,431.4 | $8,394.6 | Condensed Consolidated Statements of Cash Flows The company generated $140.4 million in operating cash flow, funding capital expenditures and ending the quarter with $340.9 million in cash Cash Flow Summary for Three Months Ended (in millions) | Activity | Mar 29, 2025 | Mar 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $140.4 | $147.2 | | Net cash (used in) provided by investing activities | $(108.3) | $181.0 | | Net cash used in financing activities | $(22.4) | $(439.9) | | Increase (decrease) in cash and cash equivalents | $11.7 | $(116.2) | | Cash and cash equivalents at end of period | $340.9 | $340.7 | Reconciliations of GAAP to Non-GAAP Measures Reconciliation of GAAP Gross Profit to Adjusted Gross Profit Q1 2025 GAAP gross profit was adjusted for minor restructuring costs, resulting in an adjusted gross profit of $356.7 million Gross Profit Reconciliation (in millions) | Line Item | Mar 29, 2025 | Mar 30, 2024 | Dec 31, 2024 | | :--- | :--- | :--- | :--- | | Gross profit-GAAP | $356.5 | $351.8 | $387.3 | | Restructuring costs | 0.2 | — | 0.4 | | Adjusted gross profit | $356.7 | $351.8 | $387.7 | Reconciliation of GAAP Segment Profit to Adjusted Operating Income Adjustments to segment profits for restructuring costs yielded a total adjusted operating income of $170.8 million for Q1 2025 Adjusted Operating Income Reconciliation (in millions) | Line Item | Mar 29, 2025 | Mar 30, 2024 | Dec 31, 2024 | | :--- | :--- | :--- | :--- | | MS adjusted segment profit | $75.1 | $75.3 | $78.2 | | APS adjusted segment profit | $110.4 | $111.2 | $137.1 | | Total adjusted segment profit | $185.5 | $186.5 | $215.3 | | Less: adjusted unallocated G&A | (14.7) | (8.4) | (15.2) | | Total adjusted operating income | $170.8 | $178.1 | $200.1 | Reconciliation of GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA Adjusted EBITDA for Q1 2025 was $220.7 million, reconciled from GAAP net income by adding back taxes, interest, and other non-cash charges Adjusted EBITDA Reconciliation (in millions) | Line Item | Mar 29, 2025 | Mar 30, 2024 | Dec 31, 2024 | | :--- | :--- | :--- | :--- | | Net income | $62.9 | $45.3 | $102.3 | | GAAP - Operating income | 122.3 | 117.6 | 150.0 | | Amortization of intangible assets | 46.1 | 50.2 | 46.2 | | Adjusted operating income | 170.8 | 178.1 | 200.1 | | Depreciation | 49.9 | 45.3 | 48.3 | | Adjusted EBITDA | $220.7 | $223.4 | $248.4 | Reconciliation of GAAP Net Income and Diluted Earnings per Common Share to Non-GAAP Net Income and Diluted Non-GAAP Earnings per Common Share Non-GAAP net income reached $101.5 million ($0.67 per share) after adjusting for amortization of intangibles and restructuring costs Non-GAAP Net Income and EPS Reconciliation (in millions, except per share data) | Line Item | Mar 29, 2025 | Mar 30, 2024 | Dec 31, 2024 | | :--- | :--- | :--- | :--- | | GAAP net income | $62.9 | $45.3 | $102.3 | | Amortization of intangible assets | 46.1 | 50.2 | 46.2 | | Restructuring costs | 2.4 | — | 3.9 | | Tax effect of adjustments | (9.9) | (13.6) | (6.9) | | Non-GAAP net income | $101.5 | $103.8 | $127.5 | | GAAP Diluted EPS | $0.41 | $0.30 | $0.67 | | Diluted non-GAAP EPS | $0.67 | $0.68 | $0.84 | Reconciliation of Reported Net Sales to Adjusted Net Sales (excluding divestiture) Non-GAAP Q1 2024 net sales were adjusted to $737.1 million to exclude a divested business, providing a basis for like-for-like comparison Adjusted Net Sales Reconciliation (in millions) | Line Item | Mar 29, 2025 | Mar 30, 2024 | Dec 31, 2024 | | :--- | :--- | :--- | :--- | | Net sales | $773.2 | $771.0 | $849.8 | | Less: divestiture | — | (33.9) | — | | Adjusted net sales (Non-GAAP) | $773.2 | $737.1 | $849.8 | Reconciliation of GAAP Outlook to Non-GAAP Outlook The Q2 2025 GAAP outlook is adjusted for expected amortization of intangibles to provide a non-GAAP forecast Q2 2025 Outlook Reconciliation | Metric | GAAP Outlook | Adjustments | Non-GAAP Outlook | | :--- | :--- | :--- | :--- | | Net Income (in millions) | $51 - $62 | $40 | $91 - $102 | | Diluted EPS | $0.34 - $0.41 | $0.26 | $0.60 - $0.67 | Appendix Non-GAAP Information The company utilizes non-GAAP measures to offer investors a clearer view of ongoing business performance and future outlook - The Company provides supplemental non-GAAP financial measures to better understand its business, believing they offer investors additional meaningful information for assessing ongoing results[11] - Management uses these measures to evaluate segment performance and believes they help indicate baseline performance before certain charges not indicative of the business's future outlook[11] Cautionary Note on Forward-Looking Statements This release contains forward-looking statements subject to significant risks and uncertainties that could impact future performance - The news release contains forward-looking statements based on current management expectations, which are not guarantees of future performance[13] - These statements involve substantial risks and uncertainties that could cause actual results to differ materially, including fluctuations in semiconductor demand, global economic uncertainty, and tariffs[13]