Company Updates First Quarter 2024 Guidance
for Divestiture of PIM
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 $25 million earnout based on the
achievement of certain 2025 and 2026 financial performance targets.
The PIM business was acquired by Entegris with the acquisition of
CMC Materials in July 2022, and sells drag reducing agents (DRAs)
and a range of valve maintenance products and services for pipeline
operations. The proceeds of this transaction will be used for
further debt paydown.
As a result of the divestiture, the Company updated its
financial guidance for the first quarter of 2024. For the first
quarter ending March 30, 2024, the Company expects sales of $755
million to $775 million, GAAP net income of $49 million to $57
million and diluted earnings per common share between $0.33 and
$0.38. On a non-GAAP basis, the Company expects diluted earnings
per common share to range from $0.59 to $0.64, reflecting net
income in the range of $89 million to $97 million. The Company also
expects adjusted EBITDA of approximately 27% to 28% of sales.
About Entegris
Entegris is a leading supplier of advanced materials and process
solutions for the semiconductor and other high-tech industries.
Entegris has approximately 8,000 employees throughout its global
operations and is ISO 9001 certified. It has manufacturing,
customer service and/or research facilities in the United States,
Canada, China, Germany, Israel, Japan, Malaysia, Singapore, South
Korea, and Taiwan. Additional information can be found at
www.entegris.com.
About SCF Partners
Founded in 1989, SCF provides equity capital and strategic
growth assistance to build and grow leading energy service,
equipment, and technology companies that operate throughout the
world. SCF has invested in more than 80 platform companies and made
more than 400 additional acquisitions to develop 18 publicly listed
energy service and equipment companies over its history. The firm
is headquartered in Houston, Texas, and has offices in Calgary,
Aberdeen, and Australia. For more information, please visit
www.scfpartners.com.
Advisors
Jefferies LLC is acting as financial advisor and Wachtell,
Lipton, Rosen & Katz is serving as legal counsel to
Entegris.
Cautions Regarding Forward Looking
Statements
This news release contains “forward-looking statements.” The
words “believe,” “expect,” “anticipate,” “intend,” “estimate,”
“forecast,” “outlook,” “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 future period guidance or
projections and other matters. These forward-looking statements are
based on current management expectations and assumptions only as of
the date of this news release, are not guarantees of future
performance and involve substantial risks and uncertainties that
are difficult to predict and that could cause actual results to
differ materially from the results expressed in, or implied by,
these forward-looking statements. These risks and uncertainties
include, but are not limited to, weakening of global and/or
regional economic conditions, generally or specifically in the
semiconductor industry, which could decrease the demand for the
Company’s products and solutions; the level of, and obligations
associated with, the Company’s indebtedness, including the debts
incurred in connection with the acquisition of CMC Materials; risks
related to the acquisition and integration of CMC Materials,
including unanticipated difficulties or expenditures relating
thereto, the ability to achieve the anticipated synergies and
value-creation contemplated by the acquisition of CMC Materials and
the diversion of management time on transaction-related matters;
raw material shortages, supply and labor constraints, price
increases, inflationary pressures and rising interest rates;
operational, political and legal risks of the Company’s
international operations; the Company’s dependence on sole source
and limited source suppliers; the Company’s ability to meet rapid
demand shifts; the Company’s ability to continue technological
innovation and introduce new products to meet customers’ rapidly
changing requirements; substantial competition; the Company’s
concentrated customer base; the Company’s ability to identify,
complete and integrate acquisitions, joint ventures, divestitures
or other similar transactions; the Company’s ability to effectively
implement any organizational changes; the Company’s ability to
protect and enforce intellectual property rights; the impact of
regional and global instabilities, hostilities and geopolitical
uncertainty, including, but not limited to, the ongoing conflicts
between Ukraine and Russia, between Israel and Hamas and the
current conflict in the Red Sea, as well as the global responses
thereto; the increasing complexity of certain manufacturing
processes; changes in government regulations of the countries in
which the Company operates, including the imposition of tariffs,
export controls and other trade laws and restrictions and changes
to national security and international trade policy, especially as
they relate to China; fluctuation of currency exchange rates;
fluctuations in the market price of the Company’s stock; and other
risk factors and additional information described in the Company’s
filings with the U.S. Securities and Exchange Commission (the
“SEC”), including under the heading “Risk Factors” in Item 1A of
the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2023, filed on February 15, 2024, and in the Company’s
other SEC filings. Except as required under the federal securities
laws and the rules and regulations of the SEC, the Company
undertakes no obligation to update publicly any forward-looking
statements or information contained herein, which speak as of their
respective dates.
Entegris, Inc. and
Subsidiaries Reconciliation of GAAP Outlook to Non-GAAP Outlook
(In millions, except per share data) (Unaudited)
First-Quarter Outlook
Reconciliation GAAP Operating Margin to
non-GAAP Operating Margin and Adjusted EBITDA Margin
March 30, 2024
Net sales
$755 - $775
GAAP - Operating income
$116 - $129
Operating margin - as a % of net sales
15% - 17%
Deal, transaction and integration
costs
3
Amortization of intangible assets
51
Gain on sale of business
(11)
Adjusted operating income
$159 - $172
Adjusted operating margin - as a % of net
sales
21% - 22%
Depreciation
45
Adjusted EBITDA
$204 - $217
Adjusted EBITDA - as a % of net sales
27% - 28%
First-Quarter Outlook
Reconciliation GAAP net income to
non-GAAP net income
March 30, 2024
GAAP net income
$49 - $57
Adjustments to net income:
Deal, transaction and integration
costs
3
Amortization of intangible assets
51
Gain on sale of business
(11)
Loss on extinguishment of debt
8
Income tax effect
(11)
Non-GAAP net income
$89 - $97
First-Quarter Outlook
Reconciliation GAAP diluted earnings
per share to non-GAAP diluted earnings per share
March 30, 2024
Diluted earnings per common share
$0.33 - $0.38
Adjustments to diluted earnings per common
share:
Deal, transaction and integration
costs
0.02
Amortization of intangible assets
0.34
Gain on sale of business
(0.07)
Loss on extinguishment of debt
0.05
Income tax effect
(0.08)
Diluted non-GAAP earnings per common
share
$0.59 - $0.64
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240229171749/en/
Investor Contact: Bill Seymour VP of Investor Relations,
Treasury & Communications + 1 952 556 1844
bill.seymour@entegris.com
Media Contact: Connie Chandler Senior Director of
Corporate Communications +1 978 436 6546
connie.chandler@entegris.com
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