PonyWang Summary Readers may find my previous coverage via this link. My previous rating was a buy as I believed Entegris' (NASDAQ:ENTG) growth had bottomed, and gross margins would see expansion moving forward; with both factors driving an upward revision of its multiple. As of April 8th, the ENTG share price has touched my target price of $139.40; hence, I think it is time for an update. I am reiterating my buy rating for ENTG as I remain very positive about the strong operating performance up ahead. ...

BILLERICA, Mass.--(BUSINESS WIRE)--Entegris, Inc. (Nasdaq: ENTG), a leading supplier of advanced materials and process solutions for the semiconductor and other high-technology industries, announced today it has completed the sale of its Pipeline and Industrial Materials business (PIM) to SCF Partners, Inc. (“SCF”), an energy investment firm, for a purchase price of up to $285 million, consisting of $260 million in cash that has been received at closing, subject to customary post-closing adjustment, and a $ ...

The Zacks Electronics - Manufacturing Machinery industry is suffering from challenging macroeconomic conditions globally. Softness in the 3D NAND end-market has been a headwind. However, industry participants are benefiting from increased capital spending on high-performance computing, AI, mobility, augmented reality and virtual reality, advanced packaging, lithography and wet processing solutions by semiconductor manufacturers. The ongoing transformation in cloud computing is noteworthy. Entegris (ENTG) an ...

Financial Data and Key Metrics Changes - The company closed 2023 with strong fourth quarter sales and EPS results, both above guidance [20] - Total debt at the end of 2023 was $4.7 billion after paying down $1.3 billion during the year, indicating a solid debt structure [34][35] - The company expects approximately 11% sales growth CAGR from 2023 to 2026, with EBITDA margins projected to reach approximately 31% by 2026 [39][70] Business Line Data and Key Metrics Changes - The Materials Solutions (MS) division, which combines the SCM and APS divisions, is expected to achieve four to six points of growth in excess of the industry, with margins improving from 16% to 22%-24% over time [31] - The Advanced Materials Handling (AMH) division anticipates topline growth of two to four points in excess of the industry, with operating margins in the low-to-mid 20s [32] - The Microcontamination Control (MC) division expects to outperform by five to seven points, with operating margins projected to reach 35%-37% [33] Market Data and Key Metrics Changes - The semiconductor industry is expected to reach $1 trillion in revenue by 2030, driven by digitalization and demand for faster, more energy-efficient semiconductors [12] - The company expects MSI to grow about 5% in 2024, while industry CapEx is expected to be flat, leading to an overall industry growth of 4% [48] Company Strategy and Development Direction - The company is focused on enhancing its R&D investments, which are expected to be approximately 9% of sales, to support customer technology roadmaps [14][89] - Investments in local manufacturing and tech centers are being ramped up to improve customer engagement and accelerate learning [11] - The company aims to balance debt reduction with critical investments in future growth, including potential strategic acquisitions [68][133] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about long-term growth prospects for the semiconductor industry despite recent downturns [22] - The company expects a recovery year in 2024, with different segments recovering at varying rates, led by advanced logic and DRAM [78] - The complexity of customer technology roadmaps is increasing, leading to greater engagement and collaboration opportunities for the company [122] Other Important Information - The company completed the acquisition of CMC Materials and successfully integrated it within 13 months, which has contributed to strong performance [44] - The company has a unique customer base, with 70% of fab revenues coming from logic and foundry customers, providing greater resilience [53] Q&A Session Summary Question: What are the drivers of the Q4 results above guidance and the 6 points of outperformance for 2023? - All three divisions performed well, with the MS division showing strong recovery in Q4 due to improved memory segment performance [43][74] Question: Can you break down the 4% industry growth for 2024 MSI versus CapEx end-markets? - MSI is expected to grow about 5%, while industry CapEx is expected to be flat, leading to a blended growth of 4% [48] Question: What are the drivers of the outperformance in 2024? - The company expects to benefit from greater Entegris content per wafer and node transitions in 3D NAND and advanced logic [107] Question: How do you see the cadence of EBITDA margins as we go into Q1 and throughout next year? - Guidance for Q1 EBITDA margin is approximately 27%, with expectations for gradual recovery throughout the year [85] Question: Can you talk about the progress of the sales synergies from CMC? - The integration has exceeded expectations, with strong customer engagement and a positive outlook for the MS platform [82][84] Question: How do you see Material Solutions margins going forward? - Margins are expected to improve as volumes ramp up and the benefits of R&D investments are realized [124]

Business Segments and Divestitures - In Q3 2023, the Company realigned its segments into three reportable segments to enhance its capabilities in the semiconductor manufacturing ecosystem [205]. - The Company completed the divestiture of the Electronic Chemicals business on October 2, 2023, receiving cash proceeds of $737.1 million, or net proceeds of $675.2 million [214]. - The Company received proceeds of $134.3 million from the divestiture of the QED business on March 1, 2023 [211]. - The Company terminated the definitive agreement with Infineum to sell its PIM business, receiving a $12.0 million termination fee in Q1 2023 [210]. - The Company announced a termination of the Alliance Agreement with MacDermid Enthone, resulting in net proceeds of $191.2 million in 2023 [213]. Financial Performance - Net sales for 2023 were $3,523.9 million, an increase of $241.9 million, or 7%, from 2022 [224]. - The increase in net sales was driven by $537.8 million from the acquisition of CMC Materials, offset by a $116.2 million decrease from divestitures and a $146.5 million decrease in semiconductor market demand [224]. - Gross profit margin remained unchanged at 42.5% for both 2023 and 2022 [227]. - Net income for 2023 was $180.7 million, or $1.20 per diluted share, compared to $208.9 million, or $1.46 per diluted share, in 2022 [239]. - Adjusted EBITDA decreased to $942.4 million in 2023, down from $973.2 million in 2022, with a margin of 26.7% [242]. - Non-GAAP net income for 2023 was $398,918,000, down 25.4% from $534,170,000 in 2022 [299]. - Diluted non-GAAP earnings per share decreased to $2.64 in 2023 from $3.73 in 2022, reflecting a decline of 29.4% [299]. Expenses and Costs - Selling, general and administrative (SG&A) expenses increased by $32.7 million, or 6%, to $576.2 million in 2023 [228]. - Engineering, research and development (ER&D) expenses rose to $277.3 million in 2023, up from $229.0 million in 2022 [230]. - Interest expense increased to $312.4 million in 2023 from $212.7 million in 2022, primarily due to the CMC Materials acquisition [234]. - The Company recorded a goodwill impairment charge of $115.2 million in 2023 [232]. - Unallocated general and administrative expenses for 2023 totaled $114.2 million, down from $190.5 million in 2022, mainly due to a decrease in deal and integration costs related to CMC Materials [256]. Cash Flow and Debt - Cash provided by operating activities increased by $277.3 million in 2023, totaling $629.6 million, driven by changes in operating assets and liabilities [261]. - In 2023, cash provided by investing activities was $553.1 million, a significant improvement from $4,945.7 million cash used in 2022, primarily due to the absence of the prior-year acquisition of CMC Materials [264]. - Total debt decreased to $4,577.1 million in 2023 from $5,784.9 million in 2022, reflecting repayments and refinancing activities [257]. - The Company declared a quarterly cash dividend of $0.10 per share to be paid on February 21, 2024, totaling $60.2 million in dividend payments for 2023, compared to $57.3 million in 2022 [269]. Strategic Focus and Market Conditions - The Company is focused on developing new products and solutions to meet rapidly changing customer requirements in the semiconductor industry [201]. - The updated U.S. export control regulations may impact the Company's operations and competitiveness, particularly concerning sales to certain countries, including China [207]. - The Company has not experienced significant revenue from regions affected by the ongoing military conflicts in the Middle East, but uncertainties remain regarding global supply chains and pricing [208]. - The company is focused on expanding its manufacturing presence in Taiwan and Colorado Springs as part of its growth strategy [201]. - The company is positioned to leverage the acquisition of CMC Materials to enhance its product offerings and address complex manufacturing challenges [206]. Segment Performance - Materials Solutions segment net sales increased by 22% to $1,689.5 million in 2023, reflecting the impact of the CMC Materials acquisition [246]. - MC net sales for 2023 increased to $1,127.6 million, up 2% from $1,106.0 million in 2022, primarily due to improved sales from liquid filtration products [250]. - AMH net sales decreased 10% to $758.6 million in 2023 from $846.5 million in 2022, primarily due to lower sales from microenvironment solutions products [254]. Accounting and Tax - The Company’s critical accounting policies involve significant estimates related to business acquisitions, goodwill impairment, and fair value assessments [215]. - Income tax liabilities include $267,545,000, with $67,700,000 related to uncertain tax positions [282]. - The effective tax rate decreased to (4.9)% in 2023 from 15.4% in 2022, influenced by a tax benefit related to divestiture and impairment activity [238].

For the quarter ended December 2023, Entegris (ENTG) reported revenue of $812.29 million, down 14.1% over the same period last year. EPS came in at $0.65, compared to $0.83 in the year-ago quarter.The reported revenue represents a surprise of +4.77% over the Zacks Consensus Estimate of $775.3 million. With the consensus EPS estimate being $0.59, the EPS surprise was +10.17%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street ...

BILLERICA, Mass.--(BUSINESS WIRE)--Entegris, Inc. (NASDAQ: ENTG), today reported its financial results for the Company’s fourth quarter ended December 31, 2023. Fourth-quarter sales were $812.3 million, a decrease of 14% from the same quarter last year. Fourth-quarter GAAP net income was $38.0 million, or $0.25 income per diluted share, which included $30.0 million of gain on termination of the Alliance Agreement with MacDermid Enthone, $10.4 million of goodwill impairment, $30.5 million of impairment of lo ...

Analysts on Wall Street project that Entegris (ENTG) will announce quarterly earnings of $0.59 per share in its forthcoming report, representing a decline of 28.9% year over year. Revenues are projected to reach $775.3 million, declining 18.1% from the same quarter last year.Over the last 30 days, there has been an upward revision of 3.1% in the consensus EPS estimate for the quarter, leading to its current level. This signifies the covering analysts' collective reconsideration of their initial forecasts ov ...

BILLERICA, Mass.--(BUSINESS WIRE)--Entegris, Inc. (NASDAQ: ENTG), will host a webcast on its fourth quarter 2023 results and provide a brief analyst update on Wednesday, February 14, 2024 at 9:00 a.m. Eastern Time. *Please note, Entegris expects to release its financial results for the fourth quarter 2023 after market close on February 13. Participants can use the link below to register and join the live webcast. https://app.webinar.net/OEr1gk1anQW Note: There are no dial-in numbers for this live webcas ...

Earnings Summary Third Quarter 2023 November 2, 2023 2 Safe Harbor This presentation contains forward-looking statements. The words "believe," "expect," "anticipate," "intend," "estimate," "forecast," "project," "should," "may," "will," "would" or the negative thereof and similar expressions are intended to identify such forward-looking statements. These forward-looking statements may include statements about supply chain matters; inflationary pressures; future period guidance or projections; the Company's ...