MKS Instruments, Inc. (NASDAQ: MKSI), a global provider of enabling
technologies that transform our world, today reported second
quarter 2024 financial results.
“Our continued execution, especially in our Semiconductor and
Electronics & Packaging markets, drove strong financial results
in the second quarter. Revenues of $887 million were at the
high end of our guidance while Adjusted EBITDA exceeded the upper
end of that same guidance,” said John T.C. Lee, President and Chief
Executive Officer. “As a critical enabler of chipmaking, package
substrates and printed circuit boards, we have been able to
leverage our broad and differentiated product portfolio and
commitment to prudent cost control to generate
healthy profits, even in a muted semiconductor and
advanced electronics environment.”
Mr. Lee added, “The team continues to deliver robust gross
margins as we closely manage the cost structure through the current
cycle. In addition, we have taken proactive measures to improve our
debt profile, including our convertible notes offering in May as
well as another repricing and voluntary term loan prepayment of
$110 million in July. These actions set the stage for improved
operating and earnings leverage when demand conditions
recover.”
Third Quarter 2024 Outlook
For the third quarter of 2024, the Company expects revenue of
$870 million, plus or minus $40 million, Adjusted EBITDA of $206
million, plus or minus $23 million, and Non-GAAP net earnings per
diluted share of $1.43, plus or minus $0.28.
Conference Call Details
A conference call with management will be held on Thursday,
August 8, 2024 at 8:30 a.m. (Eastern Time). To participate in the
call by phone, participants should visit the Investor Relations
section of MKS’ website at investor.mks.com and click on Events
& Presentations, where you will be able to register online and
receive dial-in details. We encourage participants to register and
dial in to the conference call at least 15 minutes before the start
of the call to ensure a timely connection. A live and archived
webcast and related presentation materials will be available on the
Investor Relations section of the MKS website.
About MKS Instruments
MKS Instruments enables technologies that transform our world.
We deliver foundational technology solutions to leading edge
semiconductor manufacturing, electronics and packaging, and
specialty industrial applications. We apply our broad science and
engineering capabilities to create instruments, subsystems,
systems, process control solutions and specialty chemicals
technology that improve process performance, optimize productivity
and enable unique innovations for many of the world's leading
technology and industrial companies. Our solutions are critical to
addressing the challenges of miniaturization and complexity in
advanced device manufacturing by enabling increased power, speed,
feature enhancement, and optimized connectivity. Our solutions are
also critical to addressing ever-increasing performance
requirements across a wide array of specialty industrial
applications. Additional information can be found at
www.mks.com.
Use of Non-GAAP Financial Results
This press release includes financial measures that are not in
accordance with U.S. generally accepted accounting principles
(“Non-GAAP financial measures”). These Non-GAAP financial measures
should be viewed in addition to, and not as a substitute for, MKS’
reported results under U.S. generally accepted accounting
principles (“GAAP”), and may be different from Non-GAAP financial
measures used by other companies. In addition, these Non-GAAP
financial measures are not based on any comprehensive set of
accounting rules or principles. MKS management believes the
presentation of these Non-GAAP financial measures is useful to
investors for comparing prior periods and analyzing ongoing
business trends and operating results.
MKS is not providing a quantitative reconciliation of
forward-looking Non-GAAP net earnings per diluted share and
Adjusted EBITDA to their most directly comparable GAAP financial
measures because we are unable to estimate with reasonable
certainty the ultimate timing or amount of certain significant
items without unreasonable efforts. These items include, but are
not limited to, acquisition and integration costs, amortization of
intangible assets, restructuring expense, goodwill and intangible
asset impairments, excess and obsolescence inventory charges,
amortization of debt issuance costs, debt refinancing fee, loss on
extinguishment of debt, and the income tax effect of these items.
These items are uncertain, depend on various factors, including,
but not limited to, the integration of our acquisition of Atotech
Limited (“Atotech”), which we acquired in August 2022 (the “Atotech
Acquisition”), and the interest rate and refinancing environment,
and could have a material impact on GAAP reported results for the
relevant period.
For further information regarding these Non-GAAP financial
measures, including a change in the fourth quarter of 2023 to the
definition of Adjusted EBITDA, please refer to the tables
presenting reconciliations of our Non-GAAP results to our GAAP
results and the “Notes on Our Non-GAAP Financial Information” at
the end of this press release.
Selected GAAP and Non-GAAP Financial
Measures(In millions, except per share
data) |
|
|
Three Months Ended |
|
Six Months Ended |
|
Q2 2024 |
|
Q1 2024 |
|
Q2 2023 |
|
Q2 2024 |
|
Q2 2023 |
Net
Revenues |
|
|
|
|
|
|
|
|
|
Semiconductor |
$ |
369 |
|
|
$ |
351 |
|
|
$ |
441 |
|
|
$ |
720 |
|
|
$ |
750 |
|
Electronics and Packaging |
|
229 |
|
|
|
208 |
|
|
|
225 |
|
|
|
437 |
|
|
|
447 |
|
Specialty Industrial |
|
289 |
|
|
|
309 |
|
|
|
337 |
|
|
|
598 |
|
|
|
600 |
|
Total net revenues |
$ |
887 |
|
|
$ |
868 |
|
|
$ |
1,003 |
|
|
$ |
1,755 |
|
|
$ |
1,797 |
|
GAAP Financial Measures |
|
|
|
|
|
|
|
|
|
Gross margin |
|
47.3 |
% |
|
|
47.8 |
% |
|
|
46.9 |
% |
|
|
47.5 |
% |
|
|
44.8 |
% |
Operating margin |
|
14.4 |
% |
|
|
12.2 |
% |
|
|
(169.1 |
%) |
|
|
13.3 |
% |
|
|
(94.3 |
%) |
Net income (loss) |
$ |
23 |
|
|
$ |
15 |
|
|
$ |
(1,769 |
) |
|
$ |
37 |
|
|
$ |
(1,812 |
) |
Diluted income (loss) per
share |
$ |
0.33 |
|
|
$ |
0.22 |
|
|
$ |
(26.47 |
) |
|
$ |
0.55 |
|
|
$ |
(27.14 |
) |
Non-GAAP Financial
Measures |
|
|
|
|
|
|
|
|
|
Gross margin |
|
47.3 |
% |
|
|
47.8 |
% |
|
|
46.9 |
% |
|
|
47.5 |
% |
|
|
44.8 |
% |
Operating margin |
|
21.7 |
% |
|
|
20.2 |
% |
|
|
22.6 |
% |
|
|
21.0 |
% |
|
|
17.9 |
% |
Net earnings |
$ |
103 |
|
|
$ |
79 |
|
|
$ |
88 |
|
|
$ |
183 |
|
|
$ |
120 |
|
Diluted earnings per
share |
$ |
1.53 |
|
|
$ |
1.18 |
|
|
$ |
1.32 |
|
|
$ |
2.71 |
|
|
$ |
1.80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional Financial Information
At June 30, 2024, the Company had $851 million in cash,
cash equivalents and short-term investments, $3.6 billion of
secured term loan principal outstanding, $1.4 billion of
convertible senior notes outstanding and up to $675 million of
additional borrowing capacity under a revolving credit facility,
subject to certain leverage ratio requirements. During the second
quarter of 2024, the Company paid a cash dividend of $15 million or
$0.22 per diluted share and made a voluntary prepayment of $50
million on its USD term loan B. In May 2024, the Company completed
a private offering of $1.4 billion aggregate principal amount of
1.25% convertible senior notes due 2030. In connection with the
offering, the Company entered into capped call transactions, which
are expected to reduce the potential dilution to the Company’s
common stockholders upon conversion of any notes, subject to a cap.
The Company used substantially all of the net proceeds of the
offering to pay the cost of the capped call transactions and repay
approximately $1.2 billion in borrowings outstanding under its USD
term loan B.
In July 2024, the Company completed the repricing of its USD
term loan B and its EUR term loan B and made a voluntary prepayment
of $110 million, consisting of $69 million to its USD term loan B
and €38 million to its EUR term loan B.
SAFE HARBOR FOR FORWARD-LOOKING
STATEMENTS
This press release contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995, Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934 regarding the future financial
performance, business prospects and growth of MKS Instruments, Inc.
(“MKS,” the “Company,” “our,” or “we”). These statements are only
predictions based on current assumptions and expectations. Any
statements that are not statements of historical fact (including
statements containing the words “will,” “projects,” “intends,”
“believes,” “plans,” “anticipates,” “expects,” “estimates,”
“forecasts,” “continues” and similar expressions) should be
considered to be forward-looking statements. Actual events or
results may differ materially from those in the forward-looking
statements set forth herein. Among the important factors that could
cause actual events to differ materially from those in the
forward-looking statements that we make are the level and terms of
our substantial indebtedness; our entry into the chemicals
technology business through the Atotech Acquisition, which may
expose us to significant additional liabilities; the risk that we
are unable to integrate the Atotech Acquisition successfully or
realize the anticipated synergies, cost savings and other benefits
of the Atotech Acquisition; legal, reputational, financial and
contractual risks resulting from the ransomware incident we
identified in February 2023, and other risks related to
cybersecurity, data privacy and intellectual property; competition
from larger, more advanced or more established companies in our
markets; the ability to successfully grow our business, including
through growth of the Atotech business and growth of the Electro
Scientific Industries, Inc. business, which we acquired in February
2019, and financial risks associated with those and potential
future acquisitions, including goodwill and intangible asset
impairments; manufacturing and sourcing risks, including those
associated with limited and sole source suppliers and the impact
and duration of supply chain disruptions, component shortages, and
price increases; changes in global demand; the impact of a pandemic
or other widespread health crisis; risks associated with doing
business internationally, including geopolitical conflicts, such as
the conflict in the Middle East, trade compliance, regulatory
restrictions on our products, components or markets, particularly
the semiconductor market, and unfavorable currency exchange and tax
rate fluctuations, which risks become more significant as we grow
our business internationally and in China specifically; conditions
affecting the markets in which we operate, including fluctuations
in capital spending in the semiconductor, electronics manufacturing
and automotive industries, and fluctuations in sales to our major
customers; disruptions or delays from third-party service providers
upon which our operations may rely; the ability to anticipate and
meet customer demand; the challenges, risks and costs involved with
integrating or transitioning global operations of the companies we
have acquired; risks associated with the attraction and retention
of key personnel; potential fluctuations in quarterly results;
dependence on new product development; rapid technological and
market change; acquisition strategy; volatility of stock price;
risks associated with chemical manufacturing and environmental
regulation compliance; risks related to defective products;
financial and legal risk management; and the other important
factors described under the heading “Risk Factors” in Part I, Item
1A of our Annual Report on Form 10-K for the year ended December
31, 2023 and any subsequent Quarterly Reports on Form 10-Q, each as
filed with the U.S. Securities and Exchange Commission. MKS is
under no obligation to, and expressly disclaims any obligation to,
update or alter these forward-looking statements, whether as a
result of new information, future events or otherwise, even if
subsequent events cause our views to change, after the date of this
press release. Amounts reported in this press release are
preliminary and subject to finalization prior to the filing of our
Quarterly Report on Form 10-Q for the quarter ended June 30,
2024.
Company Contact: Paretosh MisraVice President,
Investor RelationsTelephone: (978) 284-4705Email:
paretosh.misra@mksinst.com
MKS
Instruments, Inc. |
Unaudited
Consolidated Statements of Operations |
(In
millions, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net
revenues: |
|
|
|
|
|
|
|
|
|
Products |
$ |
770 |
|
|
$ |
754 |
|
|
$ |
885 |
|
|
$ |
1,524 |
|
|
$ |
1,597 |
|
Services |
|
117 |
|
|
|
114 |
|
|
|
118 |
|
|
|
231 |
|
|
|
200 |
|
Total net revenues |
|
887 |
|
|
|
868 |
|
|
|
1,003 |
|
|
|
1,755 |
|
|
|
1,797 |
|
Cost of
revenues: |
|
|
|
|
|
|
|
|
|
Products |
|
412 |
|
|
|
398 |
|
|
|
470 |
|
|
|
810 |
|
|
|
878 |
|
Services |
|
56 |
|
|
|
55 |
|
|
|
63 |
|
|
|
111 |
|
|
|
113 |
|
Total cost of revenues (exclusive of amortization shown separately
below) |
|
468 |
|
|
|
453 |
|
|
|
533 |
|
|
|
921 |
|
|
|
991 |
|
Gross
profit |
|
419 |
|
|
|
415 |
|
|
|
470 |
|
|
|
834 |
|
|
|
806 |
|
Research and
development |
|
66 |
|
|
|
70 |
|
|
|
75 |
|
|
|
136 |
|
|
|
147 |
|
Selling,
general and administrative |
|
161 |
|
|
|
170 |
|
|
|
172 |
|
|
|
331 |
|
|
|
348 |
|
Acquisition
and integration costs |
|
2 |
|
|
|
1 |
|
|
|
5 |
|
|
|
3 |
|
|
|
11 |
|
Restructuring and other |
|
2 |
|
|
|
3 |
|
|
|
11 |
|
|
|
5 |
|
|
|
12 |
|
Fees and
expenses related to amendments to the Term Loan Facility |
|
— |
|
|
|
3 |
|
|
|
— |
|
|
|
3 |
|
|
|
— |
|
Amortization
of intangible assets |
|
61 |
|
|
|
62 |
|
|
|
76 |
|
|
|
123 |
|
|
|
157 |
|
Goodwill and
intangible asset impairments |
|
— |
|
|
|
— |
|
|
|
1,827 |
|
|
|
— |
|
|
|
1,827 |
|
Income
(loss) from operations |
|
127 |
|
|
|
106 |
|
|
|
(1,696 |
) |
|
|
233 |
|
|
|
(1,696 |
) |
Interest
income |
|
(5 |
) |
|
|
(6 |
) |
|
|
(4 |
) |
|
|
(11 |
) |
|
|
(7 |
) |
Interest
expense |
|
79 |
|
|
|
87 |
|
|
|
88 |
|
|
|
166 |
|
|
|
173 |
|
Loss on
extinguishment of debt |
|
38 |
|
|
|
9 |
|
|
|
— |
|
|
|
47 |
|
|
|
— |
|
Other
(income) expense, net |
|
(7 |
) |
|
|
(3 |
) |
|
|
11 |
|
|
|
(10 |
) |
|
|
9 |
|
Income
(loss) before income taxes |
|
22 |
|
|
|
19 |
|
|
|
(1,791 |
) |
|
|
41 |
|
|
|
(1,871 |
) |
(Benefit)
provision for income taxes |
|
(1 |
) |
|
|
4 |
|
|
|
(22 |
) |
|
|
4 |
|
|
|
(59 |
) |
Net income (loss) |
$ |
23 |
|
|
$ |
15 |
|
|
$ |
(1,769 |
) |
|
$ |
37 |
|
|
$ |
(1,812 |
) |
Net income
(loss) per share: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.34 |
|
|
$ |
0.22 |
|
|
$ |
(26.47 |
) |
|
$ |
0.56 |
|
|
$ |
(27.14 |
) |
Diluted |
$ |
0.33 |
|
|
$ |
0.22 |
|
|
$ |
(26.47 |
) |
|
$ |
0.55 |
|
|
$ |
(27.14 |
) |
Cash
dividend per common share |
$ |
0.22 |
|
|
$ |
0.22 |
|
|
$ |
0.22 |
|
|
$ |
0.44 |
|
|
$ |
0.44 |
|
Weighted
average shares outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
67.3 |
|
|
|
67.0 |
|
|
|
66.8 |
|
|
|
67.2 |
|
|
|
66.8 |
|
Diluted |
|
67.5 |
|
|
|
67.4 |
|
|
|
66.8 |
|
|
|
67.5 |
|
|
|
66.8 |
|
MKS
Instruments, Inc. |
Unaudited
Consolidated Balance Sheets |
(In
millions) |
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
2024 |
|
|
|
2023 |
|
ASSETS |
|
|
|
Cash and
cash equivalents |
$ |
850 |
|
|
$ |
875 |
|
Short-term
investments |
|
1 |
|
|
|
— |
|
Accounts
receivable, net |
|
597 |
|
|
|
603 |
|
Inventories |
|
938 |
|
|
|
991 |
|
Other
current assets |
|
262 |
|
|
|
227 |
|
Total current assets |
|
2,648 |
|
|
|
2,696 |
|
Property,
plant and equipment, net |
|
759 |
|
|
|
784 |
|
Right-of-use
assets, net |
|
229 |
|
|
|
225 |
|
Goodwill |
|
2,495 |
|
|
|
2,554 |
|
Intangible
assets, net |
|
2,418 |
|
|
|
2,619 |
|
Other
assets |
|
314 |
|
|
|
240 |
|
Total assets |
$ |
8,863 |
|
|
$ |
9,118 |
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY |
|
|
|
Short-term
debt |
$ |
50 |
|
|
$ |
93 |
|
Accounts
payable |
|
291 |
|
|
|
327 |
|
Other
current liabilities |
|
399 |
|
|
|
428 |
|
Total current liabilities |
|
740 |
|
|
|
848 |
|
Long-term
debt, net |
|
4,832 |
|
|
|
4,696 |
|
Non-current
deferred taxes |
|
588 |
|
|
|
640 |
|
Non-current
accrued compensation |
|
144 |
|
|
|
151 |
|
Non-current
lease liabilities |
|
202 |
|
|
|
205 |
|
Other
liabilities |
|
124 |
|
|
|
106 |
|
Total liabilities |
|
6,630 |
|
|
|
6,646 |
|
Stockholders' equity |
|
|
|
Common
stock |
|
— |
|
|
|
— |
|
Additional
paid-in capital |
|
2,042 |
|
|
|
2,195 |
|
Retained
earnings |
|
381 |
|
|
|
373 |
|
Accumulated
other comprehensive (loss) income |
|
(190 |
) |
|
|
(96 |
) |
Total stockholders' equity |
|
2,233 |
|
|
|
2,472 |
|
Total liabilities and stockholders' equity |
$ |
8,863 |
|
|
$ |
9,118 |
|
MKS
Instruments, Inc. |
Unaudited
Consolidated Statements of Cash Flows |
(In
millions) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Cash flows
from operating activities: |
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
23 |
|
|
$ |
15 |
|
|
$ |
(1,769 |
) |
|
$ |
37 |
|
|
$ |
(1,812 |
) |
Adjustments
to reconcile net income (loss) to net cash provided by (used in)
operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
86 |
|
|
|
88 |
|
|
|
101 |
|
|
|
175 |
|
|
|
208 |
|
Goodwill and intangible asset impairments |
|
— |
|
|
|
— |
|
|
|
1,827 |
|
|
|
— |
|
|
|
1,827 |
|
Unrealized (gain) loss on derivatives not designated as hedging
instruments |
|
(3 |
) |
|
|
3 |
|
|
|
6 |
|
|
|
— |
|
|
|
20 |
|
Amortization of debt issuance costs and original issue
discounts |
|
8 |
|
|
|
8 |
|
|
|
7 |
|
|
|
16 |
|
|
|
15 |
|
Loss on extinguishment of debt |
|
38 |
|
|
|
9 |
|
|
|
— |
|
|
|
47 |
|
|
|
— |
|
Stock-based compensation |
|
11 |
|
|
|
15 |
|
|
|
13 |
|
|
|
26 |
|
|
|
31 |
|
Provision for excess and obsolete inventory |
|
14 |
|
|
|
11 |
|
|
|
12 |
|
|
|
25 |
|
|
|
30 |
|
Deferred income taxes |
|
(59 |
) |
|
|
(36 |
) |
|
|
(109 |
) |
|
|
(95 |
) |
|
|
(120 |
) |
Other |
|
2 |
|
|
|
2 |
|
|
|
1 |
|
|
|
4 |
|
|
|
1 |
|
Changes in operating assets and liabilities |
|
2 |
|
|
|
(48 |
) |
|
|
(148 |
) |
|
|
(46 |
) |
|
|
(222 |
) |
Net cash
provided by (used in) operating activities |
|
122 |
|
|
|
67 |
|
|
|
(59 |
) |
|
|
189 |
|
|
|
(22 |
) |
Cash flows
from investing activities: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of long-lived assets |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
Purchases of property, plant and equipment |
|
(26 |
) |
|
|
(18 |
) |
|
|
(18 |
) |
|
|
(45 |
) |
|
|
(35 |
) |
Net cash
used in investing activities |
|
(26 |
) |
|
|
(18 |
) |
|
|
(18 |
) |
|
|
(44 |
) |
|
|
(34 |
) |
Cash flows
from financing activities: |
|
|
|
|
|
|
|
|
|
Proceeds from borrowings |
|
1,400 |
|
|
|
761 |
|
|
|
— |
|
|
|
2,161 |
|
|
|
1 |
|
Payments of borrowings |
|
(1,269 |
) |
|
|
(806 |
) |
|
|
(22 |
) |
|
|
(2,075 |
) |
|
|
(45 |
) |
Purchase of capped calls related to Convertible Notes |
|
(167 |
) |
|
|
— |
|
|
|
— |
|
|
|
(167 |
) |
|
|
— |
|
Payments of deferred financing fees |
|
(31 |
) |
|
|
(2 |
) |
|
|
— |
|
|
|
(33 |
) |
|
|
— |
|
Dividend payments |
|
(15 |
) |
|
|
(15 |
) |
|
|
(15 |
) |
|
|
(30 |
) |
|
|
(29 |
) |
Net (payments) proceeds related to employee stock awards |
|
(2 |
) |
|
|
(9 |
) |
|
|
1 |
|
|
|
(11 |
) |
|
|
(5 |
) |
Other financing activities |
|
(3 |
) |
|
|
(1 |
) |
|
|
1 |
|
|
|
(4 |
) |
|
|
— |
|
Net cash
used in financing activities |
|
(87 |
) |
|
|
(72 |
) |
|
|
(35 |
) |
|
|
(159 |
) |
|
|
(78 |
) |
Effect of
exchange rate changes on cash and cash equivalents |
|
(4 |
) |
|
|
(7 |
) |
|
|
(11 |
) |
|
|
(11 |
) |
|
|
(18 |
) |
Increase
(decrease) in cash and cash equivalents |
|
5 |
|
|
|
(30 |
) |
|
|
(123 |
) |
|
|
(25 |
) |
|
|
(152 |
) |
Cash and
cash equivalents at beginning of period |
|
845 |
|
|
|
875 |
|
|
|
880 |
|
|
|
875 |
|
|
|
909 |
|
Cash and
cash equivalents at end of period |
$ |
850 |
|
|
$ |
845 |
|
|
$ |
757 |
|
|
$ |
850 |
|
|
$ |
757 |
|
|
|
|
|
|
|
|
|
|
|
The following
supplemental Non-GAAP earnings information is presented to aid in
understanding MKS’ operating results: |
|
|
|
|
|
|
|
|
|
|
MKS
Instruments, Inc. |
Schedule
Reconciling Selected Non-GAAP Financial Measures |
(In
millions, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income
(loss) |
$ |
23 |
|
|
$ |
15 |
|
|
$ |
(1,769 |
) |
|
$ |
37 |
|
|
$ |
(1,812 |
) |
Acquisition and integration costs (Note 1) |
|
2 |
|
|
|
1 |
|
|
|
5 |
|
|
|
3 |
|
|
|
11 |
|
Restructuring and other (Note 2) |
|
2 |
|
|
|
3 |
|
|
|
11 |
|
|
|
5 |
|
|
|
12 |
|
Amortization of intangible assets |
|
61 |
|
|
|
62 |
|
|
|
76 |
|
|
|
123 |
|
|
|
157 |
|
Goodwill and intangible asset impairments (Note 3) |
|
— |
|
|
|
— |
|
|
|
1,827 |
|
|
|
— |
|
|
|
1,827 |
|
Amortization of debt issuance costs (Note 4) |
|
5 |
|
|
|
6 |
|
|
|
5 |
|
|
|
11 |
|
|
|
11 |
|
Fees and expenses related to amendments to the Term Loan Facility
(Note 5) |
|
— |
|
|
|
3 |
|
|
|
— |
|
|
|
3 |
|
|
|
— |
|
Ransomware incident (Note 6) |
|
— |
|
|
|
— |
|
|
|
4 |
|
|
|
— |
|
|
|
11 |
|
Loss on extinguishment of debt (Note 7) |
|
38 |
|
|
|
9 |
|
|
|
— |
|
|
|
47 |
|
|
|
— |
|
Foreign tax rate adjustment (Note 8) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2 |
) |
Tax effect of Non-GAAP adjustments (Note 9) |
|
(28 |
) |
|
|
(20 |
) |
|
|
(71 |
) |
|
|
(46 |
) |
|
|
(95 |
) |
Non-GAAP net
earnings |
$ |
103 |
|
|
$ |
79 |
|
|
$ |
88 |
|
|
$ |
183 |
|
|
$ |
120 |
|
Non-GAAP net
earnings per diluted share |
$ |
1.53 |
|
|
$ |
1.18 |
|
|
$ |
1.32 |
|
|
$ |
2.71 |
|
|
$ |
1.80 |
|
Weighted
average diluted shares outstanding |
|
67.5 |
|
|
|
67.4 |
|
|
|
67.0 |
|
|
|
67.5 |
|
|
|
66.9 |
|
|
|
|
|
|
|
|
|
|
|
Net cash
provided by (used in) operating activities |
$ |
122 |
|
|
$ |
67 |
|
|
$ |
(59 |
) |
|
$ |
189 |
|
|
$ |
(22 |
) |
Purchases of
property, plant and equipment |
|
(26 |
) |
|
|
(18 |
) |
|
|
(18 |
) |
|
|
(45 |
) |
|
|
(35 |
) |
Free cash
flow |
$ |
96 |
|
|
$ |
49 |
|
|
$ |
(77 |
) |
|
$ |
144 |
|
|
$ |
(57 |
) |
MKS
Instruments, Inc. |
Schedule
Reconciling Selected Non-GAAP Financial Measures |
(In
millions) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
GAAP and
Non-GAAP gross profit |
$ |
419 |
|
|
$ |
415 |
|
|
$ |
470 |
|
|
$ |
834 |
|
|
$ |
806 |
|
GAAP and
Non-GAAP gross margin |
|
47.3 |
% |
|
|
47.8 |
% |
|
|
46.9 |
% |
|
|
47.5 |
% |
|
|
44.8 |
% |
Operating
expenses |
$ |
292 |
|
|
$ |
309 |
|
|
$ |
2,166 |
|
|
$ |
601 |
|
|
$ |
2,502 |
|
Acquisition and integration costs (Note 1) |
|
2 |
|
|
|
1 |
|
|
|
5 |
|
|
|
3 |
|
|
|
11 |
|
Restructuring and other (Note 2) |
|
2 |
|
|
|
3 |
|
|
|
11 |
|
|
|
5 |
|
|
|
12 |
|
Amortization of intangible assets |
|
61 |
|
|
|
62 |
|
|
|
76 |
|
|
|
123 |
|
|
|
157 |
|
Goodwill and intangible asset impairments (Note 3) |
|
— |
|
|
|
— |
|
|
|
1,827 |
|
|
|
— |
|
|
|
1,827 |
|
Fees and expenses related to amendments to the Term Loan Facility
(Note 5) |
|
— |
|
|
|
3 |
|
|
|
— |
|
|
|
3 |
|
|
|
— |
|
Ransomware incident (Note 6) |
|
— |
|
|
|
— |
|
|
|
4 |
|
|
|
— |
|
|
|
11 |
|
Non-GAAP
operating expenses |
$ |
227 |
|
|
$ |
240 |
|
|
$ |
243 |
|
|
$ |
467 |
|
|
$ |
484 |
|
Income
(loss) from operations |
$ |
127 |
|
|
$ |
106 |
|
|
$ |
(1,696 |
) |
|
$ |
233 |
|
|
$ |
(1,696 |
) |
Operating
margin |
|
14.4 |
% |
|
|
12.2 |
% |
|
|
(169.1 |
%) |
|
|
13.3 |
% |
|
|
(94.3 |
%) |
Acquisition and integration costs (Note 1) |
|
2 |
|
|
|
1 |
|
|
|
5 |
|
|
|
3 |
|
|
|
11 |
|
Restructuring and other (Note 2) |
|
2 |
|
|
|
3 |
|
|
|
11 |
|
|
|
5 |
|
|
|
12 |
|
Amortization of intangible assets |
|
61 |
|
|
|
62 |
|
|
|
76 |
|
|
|
123 |
|
|
|
157 |
|
Goodwill and intangible asset impairments (Note 3) |
|
— |
|
|
|
— |
|
|
|
1,827 |
|
|
|
— |
|
|
|
1,827 |
|
Fees and expenses related to amendments to the Term Loan Facility
(Note 5) |
|
— |
|
|
|
3 |
|
|
|
— |
|
|
|
3 |
|
|
|
— |
|
Ransomware incident (Note 6) |
|
— |
|
|
|
— |
|
|
|
4 |
|
|
|
— |
|
|
|
11 |
|
Non-GAAP
income from operations |
$ |
192 |
|
|
$ |
175 |
|
|
$ |
227 |
|
|
$ |
367 |
|
|
$ |
322 |
|
Non-GAAP
operating margin |
|
21.7 |
% |
|
|
20.2 |
% |
|
|
22.6 |
% |
|
|
21.0 |
% |
|
|
17.9 |
% |
Interest
expense, net |
$ |
74 |
|
|
$ |
81 |
|
|
$ |
84 |
|
|
$ |
155 |
|
|
$ |
166 |
|
Amortization of debt issuance costs (Note 4) |
|
5 |
|
|
|
6 |
|
|
|
5 |
|
|
|
11 |
|
|
|
11 |
|
Non-GAAP
interest expense, net |
$ |
69 |
|
|
$ |
75 |
|
|
$ |
79 |
|
|
$ |
144 |
|
|
$ |
155 |
|
Net income
(loss) |
$ |
23 |
|
|
$ |
15 |
|
|
$ |
(1,769 |
) |
|
$ |
37 |
|
|
$ |
(1,812 |
) |
Interest expense, net |
|
74 |
|
|
|
81 |
|
|
|
84 |
|
|
|
155 |
|
|
|
166 |
|
Other (income) expense, net (Note 10) |
|
(7 |
) |
|
|
(3 |
) |
|
|
11 |
|
|
|
(10 |
) |
|
|
9 |
|
(Benefit) provision for income taxes |
|
(1 |
) |
|
|
4 |
|
|
|
(22 |
) |
|
|
4 |
|
|
|
(59 |
) |
Depreciation |
|
25 |
|
|
|
26 |
|
|
|
25 |
|
|
|
52 |
|
|
|
51 |
|
Amortization of intangible assets |
|
61 |
|
|
|
62 |
|
|
|
76 |
|
|
|
123 |
|
|
|
157 |
|
Stock-based compensation |
|
11 |
|
|
|
15 |
|
|
|
13 |
|
|
|
26 |
|
|
|
31 |
|
Acquisition and integration costs (Note 1) |
|
2 |
|
|
|
1 |
|
|
|
5 |
|
|
|
3 |
|
|
|
11 |
|
Restructuring and other (Note 2) |
|
2 |
|
|
|
3 |
|
|
|
11 |
|
|
|
5 |
|
|
|
12 |
|
Goodwill and intangible asset impairments (Note 3) |
|
— |
|
|
|
— |
|
|
|
1,827 |
|
|
|
— |
|
|
|
1,827 |
|
Fees and expenses related to amendments to the Term Loan Facility
(Note 5) |
|
— |
|
|
|
3 |
|
|
|
— |
|
|
|
3 |
|
|
|
— |
|
Ransomware incident (Note 6) |
|
— |
|
|
|
— |
|
|
|
4 |
|
|
|
— |
|
|
|
11 |
|
Loss on extinguishment of debt (Note 7) |
|
38 |
|
|
|
9 |
|
|
|
— |
|
|
|
47 |
|
|
|
— |
|
Adjusted
EBITDA (Note 10) |
$ |
228 |
|
|
$ |
217 |
|
|
$ |
265 |
|
|
$ |
445 |
|
|
$ |
404 |
|
Adjusted
EBITDA margin |
|
25.7 |
% |
|
|
25.0 |
% |
|
|
26.4 |
% |
|
|
25.4 |
% |
|
|
22.5 |
% |
MKS
Instruments, Inc. |
Reconciliation of GAAP Income Tax Rate to Non-GAAP Income
Tax Rate |
(In
millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2024 |
|
Three Months Ended March 31, 2024 |
|
Income Before Income Taxes |
|
(Benefit) Provision for Income Taxes |
|
Effective Tax Rate |
|
Income Before Income Taxes |
|
Provision for Income Taxes |
|
Effective Tax Rate |
GAAP |
$ |
22 |
|
|
$ |
(1 |
) |
|
|
(3.6 |
%) |
|
$ |
19 |
|
|
$ |
4 |
|
|
|
23.1 |
% |
Acquisition and integration costs (Note 1) |
|
2 |
|
|
|
— |
|
|
|
|
|
1 |
|
|
|
— |
|
|
|
Restructuring and other (Note 2) |
|
2 |
|
|
|
— |
|
|
|
|
|
3 |
|
|
|
— |
|
|
|
Amortization of intangible assets |
|
61 |
|
|
|
— |
|
|
|
|
|
62 |
|
|
|
— |
|
|
|
Amortization of debt issuance costs (Note 4) |
|
5 |
|
|
|
— |
|
|
|
|
|
6 |
|
|
|
— |
|
|
|
Fees and expenses related to amendments to the Term Loan Facility
(Note 5) |
|
— |
|
|
|
— |
|
|
|
|
|
3 |
|
|
|
— |
|
|
|
Loss on extinguishment of debt (Note 7) |
|
38 |
|
|
|
— |
|
|
|
|
|
9 |
|
|
|
— |
|
|
|
Tax effect of Non-GAAP adjustments (Note 9) |
|
— |
|
|
|
28 |
|
|
|
|
|
— |
|
|
|
20 |
|
|
|
Non-GAAP |
$ |
130 |
|
|
$ |
27 |
|
|
|
20.5 |
% |
|
$ |
103 |
|
|
$ |
24 |
|
|
|
23.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2023 |
|
|
|
|
|
|
|
(Loss) Income Before Income Taxes |
|
(Benefit) Provision for Income Taxes |
|
Effective Tax Rate |
GAAP |
|
|
|
|
|
|
$ |
(1,791 |
) |
|
$ |
(22 |
) |
|
|
1.2 |
% |
Acquisition and integration costs (Note 1) |
|
|
|
|
|
|
|
5 |
|
|
|
— |
|
|
|
Restructuring and other (Note 2) |
|
|
|
|
|
|
|
11 |
|
|
|
— |
|
|
|
Amortization of intangible assets |
|
|
|
|
|
|
|
76 |
|
|
|
— |
|
|
|
Goodwill and intangible asset impairments (Note 3) |
|
|
|
|
|
|
|
1,827 |
|
|
|
— |
|
|
|
Amortization of debt issuance costs (Note 4) |
|
|
|
|
|
|
|
5 |
|
|
|
— |
|
|
|
Ransomware incident (Note 6) |
|
|
|
|
|
|
|
4 |
|
|
|
— |
|
|
|
Tax effect of Non-GAAP adjustments (Note 9) |
|
|
|
|
|
|
|
— |
|
|
|
71 |
|
|
|
Non-GAAP |
|
|
|
|
|
|
$ |
137 |
|
|
$ |
49 |
|
|
|
35.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2024 |
|
Six Months Ended June 30, 2023 |
|
Income Before Income Taxes |
|
Provision for Income Taxes |
|
Effective Tax Rate |
|
(Loss) Income Before Income Taxes |
|
(Benefit) Provision for Income Taxes |
|
Effective Tax Rate |
GAAP |
$ |
41 |
|
|
$ |
4 |
|
|
|
8.9 |
% |
|
$ |
(1,871 |
) |
|
$ |
(59 |
) |
|
|
3.2 |
% |
Acquisition and integration costs (Note 1) |
|
3 |
|
|
|
— |
|
|
|
|
|
11 |
|
|
|
— |
|
|
|
Restructuring and other (Note 2) |
|
5 |
|
|
|
— |
|
|
|
|
|
12 |
|
|
|
— |
|
|
|
Amortization of intangible assets |
|
123 |
|
|
|
— |
|
|
|
|
|
157 |
|
|
|
— |
|
|
|
Goodwill and intangible asset impairments (Note 3) |
|
— |
|
|
|
— |
|
|
|
|
|
1,827 |
|
|
|
— |
|
|
|
Amortization of debt issuance costs (Note 4) |
|
11 |
|
|
|
— |
|
|
|
|
|
11 |
|
|
|
— |
|
|
|
Fees and expenses related to amendments to the Term Loan Facility
(Note 5) |
|
3 |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
Ransomware incident (Note 6) |
|
— |
|
|
|
— |
|
|
|
|
|
11 |
|
|
|
— |
|
|
|
Loss on extinguishment of debt (Note 7) |
|
47 |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
Foreign tax rate adjustment (Note 8) |
|
— |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
2 |
|
|
|
Tax effect of Non-GAAP adjustments (Note 9) |
|
— |
|
|
|
46 |
|
|
|
|
|
— |
|
|
|
95 |
|
|
|
Non-GAAP |
$ |
233 |
|
|
$ |
50 |
|
|
|
21.7 |
% |
|
$ |
158 |
|
|
$ |
38 |
|
|
|
24.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
MKS Instruments,
Inc.Notes on Our Non-GAAP Financial
Information
Non-GAAP financial measures adjust GAAP financial measures for
the items listed below. These Non-GAAP financial measures should be
viewed in addition to, and not as a substitute for, MKS’ reported
GAAP results, and may be different from Non-GAAP financial measures
used by other companies. In addition, these Non-GAAP financial
measures are not based on any comprehensive set of accounting rules
or principles. MKS management believes the presentation of these
Non-GAAP financial measures is useful to investors for comparing
prior periods and analyzing ongoing business trends and operating
results. Totals presented may not sum and percentages may not
recalculate using figures presented due to rounding.
Note 1: Acquisition and integration costs related to the Atotech
Acquisition.
Note 2: Restructuring and other costs primarily related to
severance costs due to global cost-saving initiatives.
Note 3: During the three months ended June 30, 2023, we noted
softer industry demand, particularly in the personal computer and
smartphone markets and concluded there was a triggering event at
our Materials Solutions Division, which represents the former
Atotech business, and Equipment Solutions Business, which
represents the former Electro Scientific Industries business and is
a reporting unit of our Photonics Solutions Division. We performed
a quantitative assessment which resulted in an impairment of $1.3
billion for our Materials Solutions Division and $0.5 billion for
our Equipment Solutions Business.
Note 4: We recorded additional interest expense related to the
amortization of debt issuance costs associated with our term loan
facility.
Note 5: In the first quarter of 2024, we recorded fees and
expenses related to an amendment to our term loan facility where we
borrowed additional amounts under our USD term loan B and EUR term
loan B and fully paid our term loan A.
Note 6: We recorded costs, net of recoveries, associated with
the ransomware incident we identified on February 3, 2023. These
costs were primarily comprised of various third-party consulting
services, including forensic experts, restoration experts, legal
counsel, and other information technology and accounting
professional expenses, enhancements to our cybersecurity measures,
and costs to restore our systems and access our data.
Note 7: During the three and six months ended June 30, 2024, we
recorded a charge to write-off deferred financing fees and original
issue discount costs related to extinguishment of debt on our USD
term loan B and EUR term loan B. Additionally, during the three
months ended March 31, 2024 and the six months ended June 30, 2024,
we recorded a charge to write-off deferred financing fees related
to the extinguishment of our term loan A.
Note 8: During the six months ended June 30, 2023, we recorded a
reduction in benefit for income taxes for a retrospective approval
of an income tax rate reduction from a foreign jurisdiction.
Note 9: Non-GAAP adjustments are tax effected at applicable
statutory rates resulting in a difference between the GAAP and
Non-GAAP tax rates.
Note 10: In the fourth quarter of 2023, we modified our
definition of Adjusted EBITDA to exclude other (income) expense,
net from this Non-GAAP measure. Other (income) expense, net
primarily relates to changes in foreign exchange rates. We believe
this change enhances investor insight into our operational
performance. We have applied this modified definition of Adjusted
EBITDA to all periods presented.
MKS Instruments (NASDAQ:MKSI)
過去 株価チャート
から 9 2024 まで 10 2024
MKS Instruments (NASDAQ:MKSI)
過去 株価チャート
から 10 2023 まで 10 2024