Entegris Clocks 42% Revenue Growth, Tops Estimates: Recent Deals Will Pay Down Debt

Entegris, Inc ENTG reported first-quarter FY23 revenue growth of 42% year-on-year to $922.4 million, beating the consensus of $892.67 million.

• Revenue proforma decreased by 3.7% Y/Y.
• Adjusted EPS was $0.65, down from $1.06 last year, beating the consensus of $0.52.
• Entegris' net cash provided by operating activities for the quarter totaled $151.87 million, compared to $63.89 million in 1Q22.
• The adjusted gross margin contracted 340 basis points to 44.3%, and the adjusted operating margin reduced 590 bps to 22.2%.
• Adjusted EBITDA increased 22% Y/Y to $251.55 million; the margin was 27.3%, down 446 bps.
• "2023 continues to be an uncertain year for the semiconductor industry."
• Despite these challenges, CEO Bertrand Loy says Entegris has made good progress on key initiatives. "The CMC Materials integration is proceeding very well, and on track to hit important milestones," he added.
• The recent sale of the Electronic Chemicals business, along with the QED divestiture, are expected to result in more than $800 million of proceeds to be used to pay down debt.
• 2Q23 Outlook: Entegris sees sales of $870 million - $900 million versus the consensus of $871.55 million. 

It sees Adjusted EPS of $0.53 to $0.58 versus the consensus of $0.57. The Company also expects EBITDA of ~27% to 28% of sales.

Price Action: ENTG shares are trading higher by 8.31% at $84.60 premarket on Thursday.

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