Entegris(ENTG) - 2021 Q4 - Annual Report

Financial Performance - Total net sales for 2021 were $2,298.9 million, an increase of $439.6 million, or 24%, from $1,859.3 million in 2020[221] - Gross profit for 2021 increased by $209.9 million to $1,059.7 million, resulting in a gross margin rate of 46.1%, up from 45.7% in 2020[221] - Net income for 2021 was $409.1 million, or $3.00 per diluted share, compared to $295.0 million, or $2.16 per diluted share, in 2020[221] - Adjusted EBITDA increased to $699.4 million in 2021, representing 30.4% of net sales, compared to 29.2% in 2020[233] - The company reported an operating margin of 24.0% for 2021, up from 21.3% in 2020[258] - Non-GAAP net income for 2021 was $469,390 thousand, compared to $345,735 thousand in 2020, reflecting an increase of approximately 35.8%[258] - Diluted earnings per common share for 2021 were $3.00, up from $2.16 in 2020, representing a growth of approximately 38.9%[258] Segment Performance - Specialty Chemicals and Engineered Materials segment net sales increased to $711.3 million in 2021, a 17% rise from $609.5 million in 2020[234] - Microcontamination Control segment net sales rose to $919.4 million in 2021, up 24% from $742.2 million in 2020[235] - Advanced Materials Handling segment net sales increased to $704.9 million in 2021, a 30.8% increase from $538.7 million in 2020[235] - SCEM reported a segment profit of $167.8 million for 2021, up 31% from $128.0 million in 2020, driven by higher sales levels and a gain on the sale of non-core intangibles[237] - MC net sales increased to $919.4 million in 2021, up 24% from $742.2 million in 2020, with strong growth in liquid and gas filtration products[237] - AMH net sales rose 31% to $704.9 million in 2021 from $538.7 million in 2020, attributed to improved sales from wafer handling and fluid handling products[237] Expenses and Costs - The Company’s engineering, research and development expenses increased by $31.6 million in 2021, reflecting higher employee costs and project-related costs[221] - The Company’s selling, general and administrative expenses increased by $27.3 million in 2021, mainly due to higher employee costs[221] - Selling, general and administrative (SG&A) expenses rose to $292.4 million in 2021, a 10% increase from $265.1 million in 2020, but as a percentage of net sales, it decreased to 12.7% from 14.3%[229] - Engineering, research and development (ER&D) expenses were $167.6 million in 2021, remaining flat at 7.3% of net sales compared to 2020[230] Cash Flow and Debt - Cash flow from operating activities was $400.5 million in 2021, with cash and cash equivalents at $402.6 million as of December 31, 2021[221] - Long-term borrowings, including current maturities, were $937.0 million at December 31, 2021, down from $1,085.8 million at December 31, 2020[221] - Total debt decreased to $937.0 million as of December 31, 2021, from $1,085.8 million in 2020[237] - Cash and cash equivalents were $402.6 million as of December 31, 2021, down from $580.9 million in 2020[247] - Net cash provided by operating activities was $400.5 million for the year ended December 31, 2021, down from $446.7 million in 2020, reflecting a decrease of $46.2 million[241] - Cash used in investing activities increased to $298.1 million in 2021, primarily due to higher capital expenditures of $210.6 million compared to $131.8 million in 2020[242] - Cash used in financing activities was $276.5 million in 2021, compared to cash provided of $22.1 million in 2020, mainly due to increased payments on long-term debt[245] Mergers and Acquisitions - The Company acquired BASF's Precision Microchemicals business for $89.7 million in cash during 2021[221] - The Company entered into a merger agreement with CMC, where each outstanding share of CMC will be converted into $133.00 in cash and 0.4506 shares of Entegris common stock[221] - The company has obtained fully committed debt financing from Morgan Stanley Senior Funding, Inc. and other financial institutions for the merger[252] Future Outlook - The company expects capital expenditure spending to be approximately $500 million in 2022, with $225 million allocated for a new manufacturing facility in Taiwan[251] - The Company plans to utilize existing cash and anticipated operating cash flows to meet cash needs for the next twelve months[247] - Employee incentive payout of $86.5 million is due within one year, to be paid in the first quarter of 2022[252]