CMC Materials, Inc. (Nasdaq: CCMP), a leading global supplier of
consumable materials primarily to semiconductor manufacturers,
today reported financial results for its first quarter of fiscal
2022, which ended December 31, 2021.
“I am proud of the CMC Materials team for delivering our fifth
consecutive quarter of record revenue,” said David Li, President
and CEO of CMC Materials. “Strong growth in our Electronic
Materials segment was driven by robust demand for our innovative
and high performing solutions and supported by a healthy
semiconductor industry. Additionally, we are encouraged by the
sequential and year-over-year improvement in our pipeline and
industrial materials (PIM) business.”
Regarding the company’s previously announced pending transaction
with Entegris, Inc. (“Entegris Transaction”), Mr. Li commented,
“Our strong focus on technology innovation and customer
partnerships will continue as part of Entegris’ leading electronic
materials platform, while providing expanded opportunities for our
stakeholders.”
Key Financial Information for the First
Quarter
- Revenue was $317.0 million, 10.1% higher than the same quarter
last year.
- Growth was driven by 13.0% growth in the company’s Electronic
Materials segment, which represents more than 80% of the company’s
revenue. Revenue in the Performance Materials segment declined
3.3%.
- During the first quarter of fiscal 2022, the company
implemented price increases to its global customer base to largely
offset the expected higher costs for raw materials, freight and
logistics.
- Revenue was up 1.6% sequentially, driven by both volume and
price.
- Gross margin was 39.7% versus 42.7% in the prior year. Adjusted
gross margin1 was 41.2%, versus 44.2% in the prior year.
- This decline was primarily due to higher raw materials, freight
and logistics costs across both segments.
- During the first fiscal quarter, the company began the
implementation of global price increases to largely offset the
increased costs for raw materials, freight and logistics. These
global pricing actions are expected to largely offset those
increased costs in the second fiscal quarter.
- The company continues to evaluate further pricing actions to
offset additional inflationary headwinds as needed.
- Net income was $27.4 million compared to $31.5 million in the
same quarter last year. In the quarter, the company recorded a
$9.4 million impairment charge for the company’s exit of the
wood treatment business, $6.1 million in transaction expenses
related to the Entegris Transaction, and $3.0 million of severance
costs related to the Future Forward strategic cost optimization
program, previously announced in November 2021.
- Adjusted net income1 was $59.4 million, 4.6% higher compared to
the prior year.
- The increase was driven by higher revenue, lower operating
expenses, and a lower effective tax rate, which reflected increased
benefit from stock option activity during the quarter.
- Higher raw materials, freight, and logistics costs partially
offset the increase.
- Diluted EPS was $0.95 compared to $1.07 in the same quarter
last year. Adjusted diluted EPS1 was $2.06, 7.3% higher compared to
the same quarter last year.
- Adjusted EBITDA1 was $91.9 million, up slightly compared to the
same quarter last year. Adjusted EBITDA margin1 for the quarter was
29.0%, compared to 31.8% in the same quarter last year.
- The Adjusted EBITDA margin1 decline was due to higher raw
materials, freight and logistics costs, partially offset by global
price increases.
- Adjusted operating expenses1 as a percent of sales were down
slightly year-over-year.
1Refer to financial tables and “Use of Certain GAAP, non-GAAP
Adjusted Financial Information” below for information about these
non-GAAP financial measures and reconciliations of these non-GAAP
measures to their most comparable GAAP measure.
Electronic Materials – Revenue was $267.7
million, 13.0% higher than revenue in the same quarter last year
due to growth across all segment businesses, continuing the
company’s track record of outpacing wafer start growth.
Sequentially, revenue was 5.3% higher driven by growth in CMP
slurries and electronic chemicals.
- CMP slurries increased 8.5% compared to the first fiscal
quarter of 2021 driven by customer technology advancement and
continued robust demand for the company’s products.
- CMP pads increased 8.9% year-over-year due to a continued
robust semiconductor demand environment and new position wins.
- Electronic chemicals increased 13.9% compared to the same
quarter last year driven by strong customer demand, particularly in
Europe, and new position wins.
Adjusted EBITDA was $88.1 million, or 32.9% of revenue, compared
to $80.8 million, or 34.1% of revenue, in the same quarter last
year. The Adjusted EBITDA margin1 decline was due to higher costs
for raw materials, freight and logistics, which more than offset
the benefit from higher revenue from all businesses in the segment.
Global price increases, which began to be implemented during the
quarter, are expected to largely offset the higher costs for raw
materials, freight and logistics.
Performance Materials –
Revenue was $49.4 million for the quarter, 3.3% lower than revenue
in the same quarter last year, and 14.3% lower sequentially due to
the exit of the wood treatment business, which is expected to be
completed by the end of the second quarter of fiscal 2022. Lower
revenue from the wood treatment business more than offset the
year-over-year increase in the PIM business.
- PIM revenue increased 2.8% compared to the same quarter last
year, and 5.2% sequentially. The PIM business continued to execute
against its strategic initiatives by pursuing new customer
opportunities and achieving additional progress on developing the
R&D pipeline with a focus on driving profitability
improvement.
Adjusted EBITDA was $15.0 million, or 30.4% of revenue1,
compared to $23.0 million, or 45.0% of revenue1, in the same
quarter last year. The Adjusted EBITDA decline was primarily the
result of the exit of the wood treatment business and a significant
increase in the cost of a key raw material in the PIM business.
Please refer to the financial table below titled “Segment
Revenue and Adjusted EBITDA” for more information.
Current Financial Guidance
The company currently expects total revenue in the second
quarter of fiscal 2022 to be flat to up low single digits
sequentially compared to revenue in the first quarter of fiscal
2022. Electronic Materials revenue is expected to be up low single
digits sequentially. Primarily because the company is exiting the
wood treatment business, Performance Materials revenue is expected
to be down mid to high single digits compared to the first quarter
of fiscal 2022.
In terms of Adjusted EBITDA margin for the company’s second
fiscal quarter, historically this quarter has been lower than the
first fiscal quarter due to the timing of typical annual items such
as merit and benefit increases.
The company is reiterating full fiscal 2022 guidance, which
includes Adjusted EBITDA1 to be between $355 million to $385
million, depreciation and amortization to be between $50 million to
$55 million, tax rate to be between 20% to 23%, and capital
spending to be between $60 million to $80 million. Interest expense
is now expected to be between $38 million to $40 million.
The company’s outlook includes its exit of the wood treatment
business by the end of the second fiscal quarter of 2022, which is
expected to negatively impact Adjusted EBITDA by approximately $37
million compared to fiscal 2021. The company expects to generally
offset this impact with organic growth, as well as the initial
impact of the Future Forward program, which benefits the second
half of the fiscal year.
Additionally, in the second quarter, the global pricing actions
taken are expected to largely offset the increased costs for raw
materials, freight and logistics. The company continues to evaluate
further pricing actions to mitigate additional inflationary
headwinds as needed.
Please refer to the company’s fourth quarter and full year
fiscal 2021 earnings slides and remarks document for additional
details on the exit of the wood treatment business and full fiscal
2022 guidance. The document can be accessed here, or by visiting
the Quarterly Results section of the company’s investor relations
website.
With respect to this guidance, the company notes the continued
uncertainty as to the ongoing macroeconomic environment and the
impact of the COVID-19 Pandemic (“Pandemic”) on the industries in
which the company participates.
Future Forward Strategic Cost Optimization
Program
The company’s Future Forward program is designed to implement
structural changes to enhance operational efficiencies, while
maintaining a strong focus on technology, innovation and customer
partnerships. The Future Forward program is proceeding as planned,
and the company continues to expect the program to drive savings of
approximately $15 million in fiscal year 2022, which should be a
direct benefit to the company’s Adjusted EBITDA, and ongoing
annualized savings in the range of $20 million-$25 million by
approximately the end of fiscal 2023.
Entegris Transaction
Please refer to www.EntegrisCMCTransaction.com for more
information about the Entegris Transaction.
Conference Call
In light of the Entegris Transaction, the company has not
scheduled a conference call to discuss its quarterly financial
results.
ABOUT CMC MATERIALS, INC.
CMC Materials, Inc., headquartered in Aurora, Illinois, is a
leading global supplier of consumable materials primarily to
semiconductor manufacturers. The company’s products play a critical
role in the production of advanced semiconductor devices, helping
to enable the manufacture of smaller, faster and more complex
devices by its customers. CMC Materials, Inc. is also a leading
provider of performance materials to pipeline operators. The
company's mission is to create value by delivering high-performing
and innovative solutions that solve its customers’ challenges. The
company has approximately 2,200 employees globally. For more
information about CMC Materials, Inc., visit www.cmcmaterials.com,
or contact Colleen Mumford, Vice President, Communications and
Marketing, at 630-499-2600.
USE OF CERTAIN GAAP AND NON-GAAP ADJUSTED FINANCIAL
INFORMATION
The company’s financial results are provided in accordance with
accounting principles generally accepted in the United States of
America (GAAP) and using certain non-GAAP financial measures. In
particular, the Company presents the following non-GAAP financial
measures: adjusted net income, adjusted diluted earnings per share,
adjusted EBITDA, adjusted EBITDA margin, free cash flow, and net
debt. Adjusted EBITDA is defined as earnings before interest,
income taxes, depreciation and amortization, and excludes certain
items that affect comparability from period to period. Adjusted
EBITDA margin is defined as adjusted EBITDA as a percentage of
revenue.
The non-GAAP financial measures provided in this press release
are a supplement to, and not a substitute for, the company’s
financial results presented in accordance with U.S. GAAP. These
non-GAAP financial measures are provided to enhance the investor's
understanding about the company's ongoing operations. Specifically,
the company believes the impact of the adjustments related to
impairment charges, Entegris Transaction-related expenses, Future
Forward-related expenses, acquisitions, such as expenses incurred
to complete an acquisition and related integration and
acquisition-related amortization expenses, costs of restructuring
related to the wood treatment business, and costs incurred related
to the Pandemic net of grants received, are not indicative of its
core operating results and thus presents these certain measures
excluding these effects. The presentation of non-GAAP financial
measures is not meant to be considered in isolation or as a
substitute for results prepared and presented in accordance with
U.S. GAAP. Reconciliations of non-GAAP measures to their most
comparable GAAP measures are included in the financial statements
portion of this press release.
Adjusted EBITDA for the Electronic Materials and Performance
Materials segments is presented in conformity with Accounting
Standards Codification Topic 280, Segment Reporting. This measure
is reported to the chief operating decision maker for purposes of
making decisions about allocating resources to the segments and
assessing their performance. For these reasons, this measure is
excluded from the definition of non-GAAP financial measures under
the SEC Regulation G and Item 10(e) of Regulation S-K.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements, which
address a variety of subjects including, for example, the proposed
Entegris Transaction, including expected timing, completion and
effects of the proposed transaction; expected savings from our
Future Forward strategic cost optimization program, future sales
and operating results; growth or contraction, and trends in the
industries and markets in which the company participates such as
the semiconductor, and oil and gas, industries; the acquisition of,
investment in, or collaboration with other entities, and the
expected benefits and synergies of such transactions; divestment or
disposition, or cessation of investment, in certain of the
company’s businesses; new product introductions; development of new
products, technologies and markets; product performance; the
financial conditions of the company's customers; the competitive
landscape that relates to the company’s business; the company's
supply chain; the targeted benefits of company cost reduction or
optimization initiatives; natural disasters; various economic or
political factors and international or national events, including
related to global public health crises such as the Pandemic, and
the enactment of trade sanctions, tariffs, or other similar
matters; the generation, protection and acquisition of intellectual
property, and litigation related to such intellectual property or
third party intellectual property; environmental, health and safety
laws and regulations, and related compliance and costs of
compliance; the operation of facilities by the company; the
company's management; foreign exchange fluctuation; the company's
current or future tax rate, including the effects of changes to tax
laws in the jurisdictions in which the company operates;
cybersecurity threats and vulnerabilities; and, financing
facilities and related debt, pay off or payment of principal and
interest, and compliance with covenants and other terms, uses and
investment of the company's cash balance, including dividends and
share repurchases, which may be suspended, terminated or modified
at any time for any reason by the company, based on a variety of
factors. Statements that are not historical facts, including
statements about CMC Materials’ beliefs, plans and expectations,
are forward-looking statements. Such statements are based on
current expectations of CMC Materials’ management and are subject
to a number of factors and uncertainties, which could cause actual
results to differ materially from those described in the
forward-looking statements. For information about factors that
could cause actual results to differ materially from those
described in the forward-looking statements, please refer to CMC
Materials’ filings with the Securities and Exchange Commission
(“SEC”), including the risk factors contained in CMC Materials’
Annual Report on Form 10-K for the fiscal year ended
September 30, 2021 filed on November 12, 2021 and its
Quarterly Report on Form 10-Q for the quarter ended
December 31, 2021, to be filed by February 3, 2022. Except as
required by law, CMC Materials undertakes no obligation to update
forward-looking statements made by it to reflect new information,
subsequent events or circumstances.
ADDITIONAL INFORMATION ABOUT THE ENTEGRIS TRANSACTION
AND WHERE TO FIND IT
This communication does not constitute an offer to buy or sell
or the solicitation of an offer to buy or sell any securities or a
solicitation of any vote or approval. This communication relates to
the Entegris Transaction. In connection with the Entegris
Transaction, Entegris filed with the SEC a registration statement
on Form S-4 (the “Registration Statement”) that included a proxy
statement of CMC and that also constitutes a prospectus of
Entegris. Each of Entegris and CMC may also file other relevant
documents with the SEC regarding the Entegris Transaction. This
document is not a substitute for the proxy statement/prospectus or
Registration Statement or any other document that Entegris or CMC
may file with the SEC. The Registration Statement on Form S-4 was
declared effective by the SEC on January 28, 2022 and CMC commenced
mailing of the definitive proxy statement/prospectus to its
stockholders on or about January 28, 2022. INVESTORS AND SECURITY
HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT, PROXY
STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT MAY BE FILED WITH THE
SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS,
CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE ENTEGRIS TRANSACTION. Investors and security
holders will be able to obtain free copies of these documents and
other documents containing important information about Entegris and
CMC, through the website maintained by the SEC at
http://www.sec.gov. Copies of the documents filed with the SEC by
Entegris are available free of charge on Entegris’ website at
http://Entegris.com or by contacting Entegris’ Investor Relations
Department by email at irelations@Entegris.com or by phone at
+1 978-436-6500. Copies of the documents filed with the SEC by CMC
are available free of charge on CMC’s website at
www.CMCmaterials.com/investors or by contacting CMC’s Investor
Relations Department by email at investors@CMCmaterials.com by
phone at +1 630-499-2600.
PARTICIPANTS IN THE SOLICITATION
Entegris, CMC and certain of their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies in respect of the Entegris Transaction.
Information about the directors and executive officers of Entegris
is set forth in Entegris’ in the definitive proxy
statement/prospectus included in the Registration Statement, and
Entegris’ Annual Report on Form 10-K for the fiscal year ended
December 31, 2020, which was filed with the SEC on February 5,
2021. Information about the directors and executive officers of CMC
is set forth in the definitive proxy statement/prospectus included
in the Registration Statement, and CMC’s Annual Report on Form 10-K
for the fiscal year ended September 30, 2021, which was filed with
the SEC on November 12, 2021 and amended by the Form 10-K/A filed
with the SEC on January 19, 2022. Other information regarding the
participants in the proxy solicitations and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in other relevant materials to be filed with the
SEC regarding the Entegris Transaction when such materials become
available. Investors should read the Registration Statement and the
proxy statement/prospectus carefully before making any voting or
investment decisions. You may obtain free copies of these documents
from Entegris or CMC using the sources indicated above.
Contact: Colleen Mumford Vice President,
Communications and MarketingCMC Materials, Inc. (630) 499-2600
CMC MATERIALS, INC.CONSOLIDATED
STATEMENTS OF INCOME(Unaudited and amounts in thousands,
except per share amounts)
|
Three Months Ended |
|
December 31, 2021 |
|
September 30, 2021 |
|
December 31, 2020 |
Revenue |
$ |
317,046 |
|
|
$ |
311,924 |
|
|
$ |
287,863 |
Cost of sales |
|
191,210 |
|
|
|
189,601 |
|
|
|
164,959 |
Gross profit |
|
125,836 |
|
|
|
122,323 |
|
|
|
122,904 |
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
Research, development and technical |
|
13,328 |
|
|
|
15,188 |
|
|
|
12,428 |
Selling, general and administrative |
|
56,483 |
|
|
|
58,186 |
|
|
|
55,920 |
Impairment charges |
|
9,435 |
|
|
|
11,734 |
|
|
|
7,347 |
Entegris Transaction-related expenses |
|
6,050 |
|
|
|
— |
|
|
|
— |
Total operating expenses |
|
85,296 |
|
|
|
85,108 |
|
|
|
75,695 |
|
|
|
|
|
|
Operating income |
|
40,540 |
|
|
|
37,215 |
|
|
|
47,209 |
|
|
|
|
|
|
Interest expense, net |
|
9,743 |
|
|
|
9,740 |
|
|
|
9,585 |
Other (expense) income,
net |
|
(152 |
) |
|
|
(1,671 |
) |
|
|
1,452 |
Income before income
taxes |
|
30,645 |
|
|
|
25,804 |
|
|
|
39,076 |
|
|
|
|
|
|
Provision for income
taxes |
|
3,217 |
|
|
|
9,745 |
|
|
|
7,546 |
|
|
|
|
|
|
Net income |
$ |
27,428 |
|
|
$ |
16,059 |
|
|
$ |
31,530 |
|
|
|
|
|
|
Basic earnings per share |
$ |
0.96 |
|
|
$ |
0.56 |
|
|
$ |
1.08 |
|
|
|
|
|
|
Diluted earnings per
share |
$ |
0.95 |
|
|
$ |
0.55 |
|
|
$ |
1.07 |
|
|
|
|
|
|
Weighted average basic shares
outstanding |
|
28,451 |
|
|
|
28,922 |
|
|
|
29,123 |
|
|
|
|
|
|
Weighted average diluted
shares outstanding |
|
28,821 |
|
|
|
29,261 |
|
|
|
29,598 |
|
|
|
|
|
|
|
|
|
|
|
CMC MATERIALS, INC.CONSOLIDATED
CONDENSED BALANCE SHEETS(Unaudited and amounts in
thousands)
|
December 31, 2021 |
|
September 30, 2021 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
200,023 |
|
$ |
185,979 |
Accounts receivable, net |
|
166,957 |
|
|
150,099 |
Inventories |
|
174,445 |
|
|
173,464 |
Prepaid expenses and other current assets |
|
32,387 |
|
|
25,439 |
Total current assets |
|
573,812 |
|
|
534,981 |
|
|
|
|
Property, plant and equipment, net |
|
351,602 |
|
|
354,771 |
Other long-term assets |
|
1,233,705 |
|
|
1,261,133 |
Total assets |
$ |
2,159,119 |
|
$ |
2,150,885 |
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
59,478 |
|
$ |
52,748 |
Current portion of long-term debt |
|
13,313 |
|
|
13,313 |
Accrued expenses and other current liabilities |
|
121,263 |
|
|
139,797 |
Total current liabilities |
|
194,054 |
|
|
205,858 |
|
|
|
|
Long-term debt, net of current portion |
|
901,093 |
|
|
903,031 |
Other long-term liabilities |
|
161,152 |
|
|
163,059 |
Total liabilities |
|
1,256,299 |
|
|
1,271,948 |
|
|
|
|
Stockholders' equity |
|
902,820 |
|
|
878,937 |
Total liabilities and stockholders' equity |
$ |
2,159,119 |
|
$ |
2,150,885 |
|
|
|
|
|
|
CMC MATERIALS, INC.CONSOLIDATED
CONDENSED STATEMENTS OF CASH FLOWS(Unaudited and amounts
in thousands)
|
Three months ended December 31, |
|
|
2021 |
|
|
|
2020 |
|
Net cash provided by operating
activities |
$ |
45,232 |
|
|
$ |
54,038 |
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
Additions to property, plant and equipment |
|
(13,193 |
) |
|
|
(11,939 |
) |
Proceeds from the sale of assets |
|
5 |
|
|
|
353 |
|
Net cash used in investing
activities |
|
(13,188 |
) |
|
|
(11,586 |
) |
|
|
|
|
Cash flows from financing
activities: |
|
|
|
Dividends paid |
|
(13,375 |
) |
|
|
(13,260 |
) |
Proceeds from issuance of stock |
|
13,204 |
|
|
|
5,023 |
|
Repurchases of common stock under Share Repurchase Program |
|
(10,600 |
) |
|
|
(9,201 |
) |
Repurchases of common stock withheld for taxes |
|
(3,339 |
) |
|
|
(5,220 |
) |
Repayment of long-term debt |
|
(2,663 |
) |
|
|
(2,663 |
) |
Other financing activities |
|
(232 |
) |
|
|
(43 |
) |
Net cash used in financing
activities |
|
(17,005 |
) |
|
|
(25,364 |
) |
|
|
|
|
Effect of exchange rate
changes on cash |
|
(995 |
) |
|
|
4,453 |
|
Increase in cash and cash
equivalents |
|
14,044 |
|
|
|
21,541 |
|
Cash and cash equivalents at
beginning of period |
|
185,979 |
|
|
|
257,354 |
|
Cash and cash equivalents at
end of period |
$ |
200,023 |
|
|
$ |
278,895 |
|
|
|
|
|
|
|
|
|
CMC MATERIALS, INC.SEGMENT REVENUE AND
ADJUSTED EBITDA(Unaudited and amounts in thousands)
|
Three Months Ended December 31, |
|
|
2021 |
|
|
|
2020 |
|
Segment Revenue: |
|
|
|
Electronic Materials: |
|
|
|
CMP slurries |
$ |
146,141 |
|
|
$ |
134,721 |
|
Electronic chemicals |
|
91,139 |
|
|
|
80,006 |
|
CMP pads |
|
24,039 |
|
|
|
22,071 |
|
Materials technologies |
|
6,332 |
|
|
|
— |
|
Total Electronic Materials |
|
267,651 |
|
|
|
236,798 |
|
|
|
|
|
Performance Materials: |
|
|
|
PIM |
|
26,635 |
|
|
|
25,907 |
|
Wood treatment |
|
14,958 |
|
|
|
17,323 |
|
QED |
|
7,802 |
|
|
|
7,835 |
|
Total Performance Materials |
|
49,395 |
|
|
|
51,065 |
|
|
|
|
|
Consolidated Revenue |
$ |
317,046 |
|
|
$ |
287,863 |
|
|
|
|
|
Segment adjusted EBITDA: |
|
|
|
Electronic Materials |
$ |
88,082 |
|
|
$ |
80,756 |
|
Performance Materials |
|
15,001 |
|
|
|
22,975 |
|
Unallocated corporate expenses |
|
(11,196 |
) |
|
|
(12,175 |
) |
Consolidated adjusted EBITDA |
$ |
91,887 |
|
|
$ |
91,556 |
|
CMC MATERIALS, INC.Unaudited
Reconciliation of Certain GAAP Financial Measures to Certain
Non-GAAP Financial Measures (Unaudited and amounts in
thousands, except per share and percentage amounts)
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net
Income and GAAP Diluted Earnings Per Share to Non-GAAP Adjusted
Diluted Earnings Per Share |
|
Three Months Ended December 31, |
|
|
2021 |
|
|
|
2020 |
|
Net income |
$ |
27,428 |
|
|
$ |
0.95 |
|
|
$ |
31,530 |
|
|
$ |
1.07 |
|
Amortization of acquisition
related intangibles |
|
19,645 |
|
|
|
0.68 |
|
|
|
20,201 |
|
|
|
0.68 |
|
Impairment charges |
|
9,435 |
|
|
|
0.33 |
|
|
|
7,347 |
|
|
|
0.25 |
|
Entegris Transaction-related expenses |
|
6,050 |
|
|
|
0.21 |
|
|
|
— |
|
|
|
— |
|
Future Forward-related expenses |
|
2,979 |
|
|
|
0.11 |
|
|
|
— |
|
|
|
— |
|
Acquisition and
integration-related expenses |
|
307 |
|
|
|
0.01 |
|
|
|
2,369 |
|
|
|
0.08 |
|
Net costs related to
restructuring of wood treatment business |
|
26 |
|
|
|
— |
|
|
|
26 |
|
|
|
— |
|
Costs related to Pandemic, net
of grants received |
|
— |
|
|
|
— |
|
|
|
1,262 |
|
|
|
0.04 |
|
Tax effect on adjustments to
net income1 |
|
(6,498 |
) |
|
|
(0.23 |
) |
|
|
(5,948 |
) |
|
|
(0.20 |
) |
Adjusted Net income |
$ |
59,372 |
|
|
$ |
2.06 |
|
|
$ |
56,787 |
|
|
$ |
1.92 |
|
Diluted common shares
outstanding |
|
|
|
28,821 |
|
|
|
|
|
29,598 |
|
Reconciliation of GAAP Revenue to Non-GAAP Adjusted Gross
Profit and Gross Margin |
|
Three Months Ended December 31, |
|
|
2021 |
|
|
|
2020 |
|
Revenue |
$ |
317,046 |
|
|
$ |
287,863 |
|
Cost of sales |
|
191,210 |
|
|
|
164,959 |
|
Gross profit |
$ |
125,836 |
|
|
$ |
122,904 |
|
Gross margin |
|
39.7 |
% |
|
|
42.7 |
% |
Adjustments: |
|
|
|
Amortization of acquisition related intangibles |
|
3,763 |
|
|
|
3,232 |
|
Future Forward-related expenses |
|
969 |
|
|
|
— |
|
Net costs related to restructuring of wood treatment business |
|
26 |
|
|
|
26 |
|
Costs related to the Pandemic, net of grants received |
|
— |
|
|
|
1,176 |
|
Adjusted gross profit |
$ |
130,594 |
|
|
$ |
127,338 |
|
Adjusted gross margin |
|
41.2 |
% |
|
|
44.2 |
% |
Reconciliation of GAAP Operating expenses to Non-GAAP
Adjusted Operating expenses |
|
Three Months Ended December 31, |
|
|
2021 |
|
|
|
2020 |
|
Research, development and
technical |
$ |
13,328 |
|
|
$ |
12,428 |
|
Selling, general, and
administrative |
|
56,483 |
|
|
|
55,920 |
|
Impairment charges |
|
9,435 |
|
|
|
7,347 |
|
Entegris Transaction-related
expenses |
|
6,050 |
|
|
|
— |
|
Operating expenses |
$ |
85,296 |
|
|
$ |
75,695 |
|
Adjustments: |
|
|
|
Amortization of acquisition related intangibles2 |
|
(15,882 |
) |
|
|
(16,969 |
) |
Impairment charges |
|
(9,435 |
) |
|
|
(7,347 |
) |
Entegris Transaction-related expenses |
|
(6,050 |
) |
|
|
— |
|
Future Forward-related expenses2 |
|
(2,010 |
) |
|
|
— |
|
Acquisition and integration-related expenses2 |
|
(307 |
) |
|
|
(2,369 |
) |
Costs related to the Pandemic, net of grants received2 |
|
— |
|
|
|
(86 |
) |
Adjusted operating expenses |
$ |
51,612 |
|
|
$ |
48,924 |
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP Net Income to Non-GAAP Adjusted
EBITDA and EBITDA Margin |
|
|
Three Months Ended December 31, |
|
|
|
2021 |
|
|
|
2020 |
|
Net income |
|
$ |
27,428 |
|
|
$ |
31,530 |
|
Interest expense, net |
|
|
9,743 |
|
|
|
9,585 |
|
Provision for income
taxes |
|
|
3,217 |
|
|
|
7,546 |
|
Depreciation &
amortization |
|
|
32,702 |
|
|
|
31,891 |
|
EBITDA |
|
|
73,090 |
|
|
|
80,552 |
|
EBITDA margin |
|
|
23.1 |
% |
|
|
28.0 |
% |
|
|
|
|
|
Adjustments (pre-tax): |
|
|
|
|
Impairment charges |
|
|
9,435 |
|
|
|
7,347 |
|
Entegris Transaction-related expenses |
|
|
6,050 |
|
|
|
— |
|
Future Forward-related expenses |
|
|
2,979 |
|
|
|
— |
|
Acquisition and
integration-related expenses |
|
|
307 |
|
|
|
2,369 |
|
Net costs related to
restructuring of wood treatment business |
|
|
26 |
|
|
|
26 |
|
Costs related to the Pandemic,
net of grants received |
|
|
— |
|
|
|
1,262 |
|
Adjusted EBITDA |
|
$ |
91,887 |
|
|
$ |
91,556 |
|
Adjusted EBITDA margin |
|
|
29.0 |
% |
|
|
31.8 |
% |
Fiscal Year 2022 Guidance
Reconciliation3 |
|
Fiscal Year 2022 |
|
Low |
|
High |
Net income |
$ |
126,000 |
|
$ |
150,000 |
Interest expense, net4 |
|
39,000 |
|
|
39,000 |
Provision for income
taxes4 |
|
34,000 |
|
|
40,000 |
Depreciation4 |
|
53,000 |
|
|
53,000 |
Amortization |
|
85,000 |
|
|
85,000 |
EBITDA (Consolidated) |
$ |
337,000 |
|
$ |
367,000 |
Impairment charges5 |
|
9,435 |
|
|
9,435 |
Entegris Transaction-related
expenses5 |
|
6,050 |
|
|
6,050 |
Future Forward-related
expenses5 |
|
2,979 |
|
|
2,979 |
Acquisition and
integration-related expenses5 |
|
307 |
|
|
307 |
Net costs related to
restructuring of wood treatment business5 |
|
26 |
|
|
26 |
Adjusted EBITDA Guidance -
Consolidated |
$ |
355,797 |
|
$ |
385,797 |
|
|
|
|
|
|
1 Tax effect on the adjustments were calculated
using the U.S. Federal and state blended tax rate for the
respective periods as the related adjustments are mainly U.S.
driven. 2 Adjustment is related to the Selling, general and
administrative expenses.3 This is a reconciliation of our indicated
full year net income to our adjusted EBITDA. The amounts above may
not reflect certain future charges costs and/or gains that are
inherently difficult to predict and estimate due to their unknown
timing, effect and/or significance.4 Amounts represent the
mid-point of the financial guidance provided on February 2,
2022.5 Amounts represent actual Non-GAAP adjustments through the
first quarter of fiscal 2022.
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