- Record quarterly revenue of
$954 million - Non-GAAP net earnings per diluted share of
$2.74 and GAAP net income per diluted share of$0.09 - Successfully completed acquisition of
Atotech Limited , adding critical chemistry solutions for advanced electronics and specialty industrial markets to MKS' portfolio
"We delivered a strong third quarter driven by robust demand for our vacuum and photonics solutions," said
"We delivered revenues above the midpoint of our guidance range, and are especially pleased with the 100 basis point sequential improvement in Non-GAAP operating margin," said
Fourth Quarter 2022 Outlook
Based on current business levels, regulatory environment, and certain supply chain constraints, the Company expects revenue in the fourth quarter of 2022 of
Conference Call Details
A conference call with management will be held on
About MKS Instruments
Use of Non-GAAP Financial Results
This press release includes financial measures that are not in accordance with
MKS is not providing a quantitative reconciliation of forward-looking Non-GAAP gross margin, operating expenses, interest expense, net, income tax rate, net earnings, net earnings per diluted share and adjusted EBITDA to the most directly comparable GAAP financial measures because it is 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, acquisition inventory step-up, amortization of intangible assets, restructuring and other expense, asset impairment, and the income tax effect of these items. These items are uncertain, depend on various factors, including, but not limited to, our recent acquisition of Atotech and could have a material impact on GAAP reported results for the relevant period.
For further information regarding these Non-GAAP financial measures, 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)
Year to Date | |||||||||||||||||||
Q3 2022 | Q2 2022 | Q3 2021 | Q3 2022 | Q3 2021 | |||||||||||||||
Net Revenues | |||||||||||||||||||
Semiconductor | $ | 541 | $ | 515 | $ | 488 | $ | 1,545 | $ | 1,331 | |||||||||
185 | 77 | 90 | 344 | 342 | |||||||||||||||
228 | 173 | 164 | 572 | 513 | |||||||||||||||
Total net revenues | $ | 954 | $ | 765 | $ | 742 | $ | 2,461 | $ | 2,186 | |||||||||
GAAP Financial Measures | |||||||||||||||||||
Gross margin | 40.8 | % | 44.2 | % | 47.0 | % | 43.1 | % | 46.9 | % | |||||||||
Operating margin | 12.4 | % | 21.5 | % | 23.6 | % | 18.4 | % | 23.7 | % | |||||||||
Net income | $ | 6 | $ | 130 | $ | 132 | $ | 279 | $ | 401 | |||||||||
Diluted EPS | $ | 0.09 | $ | 2.32 | $ | 2.38 | $ | 4.84 | $ | 7.21 | |||||||||
Non-GAAP Financial Measures | |||||||||||||||||||
Gross margin | 44.9 | % | 44.2 | % | 47.0 | % | 44.7 | % | 46.9 | % | |||||||||
Operating margin | 25.1 | % | 24.1 | % | 27.1 | % | 24.9 | % | 26.9 | % | |||||||||
Net earnings | $ | 167 | $ | 145 | $ | 155 | $ | 464 | $ | 466 | |||||||||
Diluted EPS | $ | 2.74 | $ | 2.59 | $ | 2.79 | $ | 8.05 | $ | 8.36 |
Additional Financial Information
At
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
Company Contact:
Vice President, Investor Relations
Telephone: (978) 557-5180
Email: david.ryzhik@mksinst.com
Unaudited Consolidated Statements of Operations | |||||||||||||||||||
(In millions, except per share data) | |||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||
Net revenues: | |||||||||||||||||||
Products | $ | 841 | $ | 664 | $ | 649 | $ | 2,153 | $ | 1,911 | |||||||||
Services | 113 | 101 | 93 | 308 | 275 | ||||||||||||||
Total net revenues | 954 | 765 | 742 | 2,461 | 2,186 | ||||||||||||||
Cost of revenues: | |||||||||||||||||||
Products | 506 | 377 | 345 | 1,243 | 1,012 | ||||||||||||||
Services | 58 | 50 | 49 | 156 | 148 | ||||||||||||||
Total cost of revenues | 564 | 427 | 394 | 1,399 | 1,160 | ||||||||||||||
Gross profit | 390 | 338 | 348 | 1,062 | 1,026 | ||||||||||||||
Research and development | 63 | 53 | 52 | 168 | 149 | ||||||||||||||
Selling, general and administrative | 126 | 101 | 95 | 319 | 289 | ||||||||||||||
Acquisition and integration costs | 31 | 2 | 9 | 41 | 21 | ||||||||||||||
Restructuring and other | 5 | 3 | 2 | 10 | 10 | ||||||||||||||
Amortization of intangible assets | 47 | 15 | 15 | 77 | 40 | ||||||||||||||
Gain on sale of long-lived assets | — | — | — | (7 | ) | — | |||||||||||||
Income from operations | 118 | 164 | 175 | 454 | 517 | ||||||||||||||
Interest income | 1 | 1 | — | 2 | 1 | ||||||||||||||
Interest expense | 80 | 7 | 6 | 93 | 19 | ||||||||||||||
Other (income) expense, net | (1 | ) | 2 | 3 | (4 | ) | 12 | ||||||||||||
Income before income taxes | 40 | 156 | 166 | 367 | 487 | ||||||||||||||
Provision for income taxes | 34 | 26 | 34 | 88 | 86 | ||||||||||||||
Net income | $ | 6 | $ | 130 | $ | 132 | $ | 279 | $ | 401 | |||||||||
Net income per share: | |||||||||||||||||||
Basic | $ | 0.09 | $ | 2.33 | $ | 2.39 | $ | 4.85 | $ | 7.24 | |||||||||
Diluted | $ | 0.09 | $ | 2.32 | $ | 2.38 | $ | 4.84 | $ | 7.21 | |||||||||
Cash dividend per common share | $ | 0.22 | $ | 0.22 | $ | 0.22 | $ | 0.66 | $ | 0.64 | |||||||||
Weighted average shares outstanding: | |||||||||||||||||||
Basic | 61.0 | 55.7 | 55.5 | 57.4 | 55.4 | ||||||||||||||
Diluted | 61.1 | 55.8 | 55.7 | 57.6 | 55.7 |
Unaudited Consolidated Balance Sheet | ||||||||
(In millions) | ||||||||
2022 | 2021 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 884 | $ | 966 | ||||
Short-term investments | 1 | 76 | ||||||
Trade accounts receivable, net | 730 | 443 | ||||||
Inventories | 961 | 577 | ||||||
Other current assets | 215 | 85 | ||||||
Total current assets | 2,791 | 2,147 | ||||||
Property, plant and equipment, net | 655 | 326 | ||||||
Right-of-use assets | 235 | 184 | ||||||
3,851 | 1,228 | |||||||
Intangible assets, net | 3,653 | 576 | ||||||
Other assets | 187 | 79 | ||||||
Total assets | $ | 11,372 | $ | 4,540 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Short-term debt | $ | 95 | $ | 9 | ||||
Accounts payable | 410 | 168 | ||||||
Accrued compensation | 92 | 132 | ||||||
Income taxes payable | 92 | 25 | ||||||
Lease liabilities | 27 | 18 | ||||||
Deferred revenue and customer advances | 103 | 37 | ||||||
Other current liabilities | 192 | 71 | ||||||
Total current liabilities | 1,011 | 460 | ||||||
Long-term debt, net | 4,893 | 808 | ||||||
Non-current deferred taxes | 893 | 99 | ||||||
Non-current accrued compensation | 131 | 49 | ||||||
Non-current lease liabilities | 220 | 193 | ||||||
Other liabilities | 75 | 44 | ||||||
Total liabilities | 7,223 | 1,653 | ||||||
Stockholders' equity | ||||||||
Common stock | — | — | ||||||
Additional paid-in capital | 2,124 | 907 | ||||||
Retained earnings | 2,233 | 1,991 | ||||||
Accumulated other comprehensive loss | (208 | ) | (11 | ) | ||||
Total stockholders' equity | 4,149 | 2,887 | ||||||
Total liabilities and stockholders' equity | $ | 11,372 | $ | 4,540 |
Unaudited Consolidated Statements of Cash Flows | |||||||||||||||||||
(In millions) | |||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||
Net income | $ | 6 | $ | 130 | $ | 132 | $ | 279 | $ | 401 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||
Depreciation and amortization | 64 | 28 | 27 | 120 | 76 | ||||||||||||||
Amortization of inventory step-up adjustment to fair value | 39 | — | — | 39 | — | ||||||||||||||
Unrealized (gain) loss on derivatives not designated as hedging instruments | (1 | ) | 4 | (8 | ) | 6 | (1 | ) | |||||||||||
Amortization of debt issuance costs and original issue discounts | 46 | — | 1 | 46 | 2 | ||||||||||||||
Gain on sale of long-lived assets | — | — | — | (7 | ) | — | |||||||||||||
Stock-based compensation | 10 | 13 | 9 | 31 | 28 | ||||||||||||||
Provision for excess and obsolete inventory | 3 | 3 | 5 | 10 | 14 | ||||||||||||||
Deferred income taxes | 6 | — | (2 | ) | 4 | 7 | |||||||||||||
Other | 1 | 2 | 1 | 3 | 1 | ||||||||||||||
Changes in operating assets and liabilities, net of acquired assets and liabilities | 25 | (75 | ) | (12 | ) | (186 | ) | (83 | ) | ||||||||||
Net cash provided by operating activities | 199 | 105 | 153 | 345 | 445 | ||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||
Acquisition of business, net of cash acquired | (4,473 | ) | — | (268 | ) | (4,473 | ) | (268 | ) | ||||||||||
Purchases of investments | — | (1 | ) | (100 | ) | (1 | ) | (497 | ) | ||||||||||
Maturities of investments | — | 41 | 138 | 76 | 342 | ||||||||||||||
Sales of investments | — | — | — | — | 135 | ||||||||||||||
Proceeds from sale of long-lived assets | — | — | — | 7 | — | ||||||||||||||
Purchases of property, plant and equipment | (26 | ) | (64 | ) | (21 | ) | (109 | ) | (63 | ) | |||||||||
Net cash used in investing activities | (4,499 | ) | (24 | ) | (251 | ) | (4,500 | ) | (351 | ) | |||||||||
Cash flows from financing activities: | |||||||||||||||||||
Net proceeds from borrowings | 4,979 | 3 | — | 4,985 | 1 | ||||||||||||||
Payments of borrowings | (826 | ) | (6 | ) | (2 | ) | (835 | ) | (13 | ) | |||||||||
Dividend payments | (13 | ) | (12 | ) | (12 | ) | (37 | ) | (36 | ) | |||||||||
Net proceeds (payments) related to employee stock awards | — | 1 | (7 | ) | (5 | ) | (14 | ) | |||||||||||
Net cash provided by (used) in financing activities | 4,140 | (14 | ) | (21 | ) | 4,108 | (62 | ) | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | (21 | ) | (13 | ) | (3 | ) | (35 | ) | (7 | ) | |||||||||
(Decrease) increase in cash and cash equivalents | (181 | ) | 54 | (122 | ) | (82 | ) | 25 | |||||||||||
Cash and cash equivalents at beginning of period | 1,065 | 1,011 | 755 | 966 | 608 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 884 | $ | 1,065 | $ | 633 | $ | 884 | $ | 633 |
The following supplemental Non-GAAP earnings information is presented to aid in understanding MKS' operating results: | |||||||||||||||||||
Schedule Reconciling Selected Non-GAAP Financial Measures | |||||||||||||||||||
(In millions, except per share data) | |||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||
Net income | $ | 6 | $ | 130 | $ | 132 | $ | 279 | $ | 401 | |||||||||
Acquisition and integration costs (Note 1) | 31 | 2 | 9 | 41 | 21 | ||||||||||||||
Acquisition inventory step-up (Note 2) | 39 | — | — | 39 | — | ||||||||||||||
Restructuring and other (Note 3) | 5 | 3 | 2 | 10 | 10 | ||||||||||||||
Amortization of intangible assets | 47 | 15 | 15 | 77 | 40 | ||||||||||||||
Amortization of debt issuance costs (Note 4) | 43 | — | — | 43 | 1 | ||||||||||||||
Gain on sale of long-lived assets (Note 5) | — | — | — | (7 | ) | — | |||||||||||||
Currency hedge loss (gain) (Note 6) | — | — | 3 | (5 | ) | 10 | |||||||||||||
Reversal of indefinite reinvestment assertion (Note 7) | 30 | — | — | 30 | — | ||||||||||||||
Windfall tax benefit on stock-based compensation (Note 8) | — | — | — | (1 | ) | (4 | ) | ||||||||||||
Withholding tax related to Brexit (Note 9) | — | — | — | — | 3 | ||||||||||||||
Tax effect of Non-GAAP adjustments (Note 10) | (34 | ) | (5 | ) | (6 | ) | (42 | ) | (16 | ) | |||||||||
Non-GAAP net earnings | $ | 167 | $ | 145 | $ | 155 | $ | 464 | $ | 466 | |||||||||
Non-GAAP net earnings per diluted share | $ | 2.74 | $ | 2.59 | $ | 2.79 | $ | 8.05 | $ | 8.36 | |||||||||
Weighted average diluted shares outstanding | 61.1 | 55.8 | 55.7 | 57.6 | 55.7 | ||||||||||||||
Net cash provided by operating activities | $ | 199 | $ | 105 | $ | 153 | $ | 345 | $ | 445 | |||||||||
Purchases of property, plant and equipment | (26 | ) | (64 | ) | (21 | ) | (109 | ) | (63 | ) | |||||||||
Free cash flow | $ | 173 | $ | 41 | $ | 132 | $ | 236 | $ | 382 |
Schedule Reconciling Selected Non-GAAP Financial Measures | |||||||||||||||||||
(In millions) | |||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||
Gross profit | $ | 390 | $ | 338 | $ | 348 | $ | 1,062 | $ | 1,026 | |||||||||
Acquisition inventory step-up (Note 2) | 39 | — | — | 39 | — | ||||||||||||||
Non-GAAP gross profit | 429 | 338 | 348 | 1,101 | 1,026 | ||||||||||||||
Non-GAAP gross margin | 44.9 | % | 44.2 | % | 47.0 | % | 44.7 | % | 46.9 | % | |||||||||
Operating expenses | $ | 272 | $ | 174 | $ | 173 | $ | 608 | $ | 509 | |||||||||
Acquisition and integration costs (Note 1) | 31 | 2 | 9 | 41 | 21 | ||||||||||||||
Restructuring and other (Note 3) | 5 | 3 | 2 | 10 | 10 | ||||||||||||||
Gain on sale of long-lived assets (Note 5) | — | — | — | (7 | ) | — | |||||||||||||
Amortization of intangible assets | 47 | 15 | 15 | 77 | 40 | ||||||||||||||
Non-GAAP operating expenses | $ | 189 | $ | 154 | $ | 147 | $ | 487 | $ | 438 | |||||||||
Income from operations | $ | 118 | $ | 164 | $ | 175 | $ | 454 | $ | 517 | |||||||||
Acquisition and integration costs (Note 1) | 31 | 2 | 9 | 41 | 21 | ||||||||||||||
Acquisition inventory step-up (Note 2) | 39 | — | — | 39 | — | ||||||||||||||
Restructuring and other (Note 3) | 5 | 3 | 2 | 10 | 10 | ||||||||||||||
Gain on sale of long-lived assets (Note 5) | — | — | — | (7 | ) | — | |||||||||||||
Amortization of intangible assets | 47 | 15 | 15 | 77 | 40 | ||||||||||||||
Non-GAAP income from operations | $ | 240 | $ | 184 | $ | 201 | $ | 614 | $ | 588 | |||||||||
Non-GAAP operating margin | 25.1 | % | 24.1 | % | 27.1 | % | 24.9 | % | 26.9 | % | |||||||||
Interest expense, net | 79 | 6 | 6 | 91 | 18 | ||||||||||||||
Amortization of debt issuance costs (Note 4) | 43 | — | — | 43 | 1 | ||||||||||||||
Non-GAAP interest expense, net | 36 | 6 | 6 | 48 | 17 | ||||||||||||||
Net income | $ | 6 | $ | 130 | $ | 132 | $ | 279 | $ | 401 | |||||||||
Interest expense, net | 79 | 6 | 6 | 91 | 18 | ||||||||||||||
Provision for income taxes | 34 | 26 | 34 | 88 | 86 | ||||||||||||||
Depreciation | 17 | 13 | 12 | 43 | 36 | ||||||||||||||
Amortization of intangible assets | 47 | 15 | 15 | 77 | 40 | ||||||||||||||
EBITDA | $ | 183 | $ | 190 | $ | 199 | $ | 578 | $ | 581 | |||||||||
Stock-based compensation | 10 | 13 | 9 | 31 | 28 | ||||||||||||||
Acquisition and integration costs (Note 1) | 31 | 2 | 9 | 41 | 21 | ||||||||||||||
Acquisition inventory step-up (Note 2) | 39 | — | — | 39 | — | ||||||||||||||
Restructuring and other (Note 3) | 5 | 3 | 2 | 10 | 10 | ||||||||||||||
Gain on sale of long-lived assets (Note 5) | — | — | — | (7 | ) | — | |||||||||||||
Currency hedge loss (gain) (Note 6) | — | — | 3 | (5 | ) | 10 | |||||||||||||
Adjusted EBITDA | $ | 268 | $ | 208 | $ | 222 | $ | 687 | $ | 650 | |||||||||
Adjusted EBITDA margin | 28.0 | % | 27.2 | % | 29.9 | % | 27.9 | % | 29.7 | % |
Reconciliation of GAAP Income Tax Rate to Non-GAAP Income Tax Rate | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||||||
Income Before Income Taxes | Provision (benefit) for Income Taxes | Effective Tax Rate | Income Before Income Taxes | Provision (benefit) for Income Taxes | Effective Tax Rate | ||||||||||||||||
GAAP | $ | 40 | $ | 34 | 85.5 | % | $ | 156 | $ | 26 | 17.0 | % | |||||||||
Acquisition and integration costs (Note 1) | 31 | — | 2 | — | |||||||||||||||||
Acquisition inventory step-up (Note 2) | 39 | — | — | — | |||||||||||||||||
Restructuring and other (Note 3) | 5 | — | 3 | — | |||||||||||||||||
Amortization of intangible assets | 47 | — | 15 | — | |||||||||||||||||
Amortization of debt issuance costs (Note 4) | 43 | — | — | — | |||||||||||||||||
Reversal of indefinite reinvestment assertion (Note 7) | — | (30 | ) | ||||||||||||||||||
Tax effect of Non-GAAP adjustments (Note 10) | — | 34 | — | 5 | |||||||||||||||||
Non-GAAP | $ | 204 | $ | 37 | 18.0 | % | $ | 176 | $ | 31 | 18.0 | % | |||||||||
Three Months Ended | |||||||||||||||||||||
Income Before Income Taxes | Provision (benefit) for Income Taxes | Effective Tax Rate | |||||||||||||||||||
GAAP | $ | 166 | $ | 34 | 20.4 | % | |||||||||||||||
Acquisition and integration costs (Note 1) | 9 | — | |||||||||||||||||||
Restructuring and other (Note 3) | 2 | — | |||||||||||||||||||
Amortization of intangible assets | 15 | — | |||||||||||||||||||
Currency hedge loss (gain) (Note 6) | 3 | — | |||||||||||||||||||
Tax effect of Non-GAAP adjustments (Note 10) | — | 6 | |||||||||||||||||||
Non-GAAP | $ | 195 | $ | 40 | 20.4 | % | |||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||||||||
Income Before | Provision (benefit) | Effective | Income Before | Provision (benefit) | Effective | ||||||||||||||||
Income Taxes | for Income Taxes | Tax Rate | Income Taxes | for Income Taxes | Tax Rate | ||||||||||||||||
GAAP | $ | 367 | $ | 88 | 24.1 | % | $ | 487 | $ | 86 | 17.6 | % | |||||||||
Acquisition and integration costs (Note 1) | 41 | — | 21 | — | |||||||||||||||||
Acquisition inventory step-up (Note 2) | 39 | — | |||||||||||||||||||
Restructuring and other (Note 3) | 10 | — | 10 | — | |||||||||||||||||
Amortization of intangible assets | 77 | — | 40 | — | |||||||||||||||||
Amortization of debt issuance costs (Note 4) | 43 | — | 1 | — | |||||||||||||||||
Gain on sale of long-lived assets (Note 5) | (7 | ) | — | — | — | ||||||||||||||||
Currency hedge loss (gain) (Note 6) | (5 | ) | — | 10 | |||||||||||||||||
Reversal of indefinite reinvestment assertion (Note 7) | (30 | ) | |||||||||||||||||||
Windfall tax benefit on stock-based compensation (Note 8) | — | 1 | — | 4 | |||||||||||||||||
Withholding tax related to Brexit (Note 9) | — | — | — | (3 | ) | ||||||||||||||||
Tax effect of Non-GAAP adjustments (Note 10) | — | 42 | — | 16 | |||||||||||||||||
Non-GAAP | $ | 565 | $ | 101 | 17.9 | % | $ | 569 | $ | 103 | 18.2 | % |
Reconciliation of Net Leverage Ratio | |||||||||||||||||||
(In millions) | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
2022 | 2022 | 2022 | 2021 | Total | |||||||||||||||
Combined Company | |||||||||||||||||||
Net income | $ | (12 | ) | $ | 150 | $ | 187 | $ | 175 | $ | 500 | ||||||||
Interest expense, net | 105 | 21 | 20 | 19 | 165 | ||||||||||||||
Provision for income taxes | 33 | 51 | 46 | 46 | 176 | ||||||||||||||
Depreciation and amortization | 73 | 65 | 67 | 69 | 274 | ||||||||||||||
Stock-based compensation | 13 | 17 | 11 | 13 | 54 | ||||||||||||||
Acquisition and integration costs | 71 | 2 | 9 | 15 | 97 | ||||||||||||||
Acquisition inventory step-up | 39 | — | — | — | 39 | ||||||||||||||
Restructuring and other | 5 | 3 | 3 | 4 | 15 | ||||||||||||||
Gain on sale of long-lived assets | — | — | (7 | ) | — | (7 | ) | ||||||||||||
Currency hedge loss (gain) | — | — | (5 | ) | — | (5 | ) | ||||||||||||
Management fee | — | 1 | 1 | 1 | 3 | ||||||||||||||
Adjusted EBITDA | $ | 327 | $ | 310 | $ | 332 | $ | 342 | $ | 1,311 | |||||||||
Principal outstanding on New Credit Agreement at September 30, 2022 | $ | 5,189 | |||||||||||||||||
Less: Cash & Short Term Investments at September 30, 2022 | 885 | ||||||||||||||||||
Net debt at | $ | 4,304 | |||||||||||||||||
Net leverage ratio at | 3.3x | ||||||||||||||||||
MKS | |||||||||||||||||||
Net income | $ | 54 | $ | 130 | $ | 143 | $ | 150 | $ | 477 | |||||||||
Interest expense, net | 79 | 6 | 6 | 6 | 97 | ||||||||||||||
Provision for income taxes | 44 | 26 | 28 | 29 | 127 | ||||||||||||||
Depreciation and amortization | 28 | 28 | 28 | 28 | 112 | ||||||||||||||
Stock-based compensation | 10 | 13 | 8 | 9 | 40 | ||||||||||||||
Acquisition and integration costs | 30 | 2 | 8 | 9 | 49 | ||||||||||||||
Restructuring and other | — | 3 | 2 | 1 | 6 | ||||||||||||||
Gain on sale of long-lived assets | — | — | (7 | ) | — | (7 | ) | ||||||||||||
Currency hedge loss (gain) | — | — | (5 | ) | — | (5 | ) | ||||||||||||
Adjusted EBITDA | $ | 245 | $ | 208 | $ | 211 | $ | 232 | $ | 896 | |||||||||
Atotech | |||||||||||||||||||
Net income | $ | (66 | ) | $ | 20 | $ | 44 | $ | 25 | $ | 23 | ||||||||
Interest expense, net | 26 | 15 | 14 | 13 | 68 | ||||||||||||||
Provision for income taxes | (11 | ) | 25 | 18 | 17 | 49 | |||||||||||||
Depreciation and amortization | 45 | 37 | 39 | 41 | 162 | ||||||||||||||
Stock-based compensation | 3 | 4 | 3 | 4 | 14 | ||||||||||||||
Acquisition and integration costs | 41 | — | 1 | 6 | 48 | ||||||||||||||
Acquisition inventory step-up | 39 | — | — | — | 39 | ||||||||||||||
Restructuring and other | 5 | — | 1 | 3 | 9 | ||||||||||||||
Management fee | — | 1 | 1 | 1 | 3 | ||||||||||||||
Adjusted EBITDA | $ | 82 | $ | 102 | $ | 121 | $ | 110 | $ | 415 | |||||||||
Combined Company combines the results of MKS (excluding Atotech/Materials Solutions Division for the three months ended | |||||||||||||||||||
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 due to rounding.
Note 1: Acquisition and integration costs during the three and nine months ended
Note 2: Costs of revenues during the three and nine months ended
Note 3: Restructuring and other costs during the three months ended
Note 4: We recorded additional interest expense related to the amortization of debt issuance costs associated with our new and prior term loan facilities.
Note 5: We recorded a gain on the sale of a minority interest investment in a private company.
Note 6: We realized a gain in the nine months ended
Note 7: We no longer intend to indefinitely reinvest earnings of our foreign subsidiaries after the Atotech Acquisition. Additional income tax expense was recorded to reflect an estimate of withholding taxes that would be due on repatriation of prior period earnings.
Note 8: We recorded windfall tax benefits on the vesting of stock-based compensation.
Note 9: We recorded additional withholding taxes on intercompany undistributed earnings following the United Kingdom’s withdrawal from the
Note 10: Non-GAAP adjustments are tax effected at applicable statutory rates resulting in a difference between the GAAP and Non-GAAP tax rates.
Source:
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