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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q
________________________________________ 

(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 28, 2020April 3, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                     to                     
Commission file number: 001-32598
 _______________________________________
entg-20210403_g1.jpg

Entegris, Inc.
(Exact name of registrant as specified in its charter)
 ________________________________________________________________________________
Delaware 41-1941551
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
129 Concord Road,Billerica,Massachusetts 01821
(Address of principal executive offices) (Zip Code)
(978) 436-6500
(Registrant’s telephone number, including area code)
None
(Former name, former address and former fiscal year, if changed since last report)
 _______________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $0.01 par value per shareENTGThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ý    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ýAccelerated filer 
Non-accelerated filer ¨Smaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý
As of April 17, 2020,23, 2021, there were 134,606,530135,500,992 shares of the registrant’s common stock outstanding.




Table of Contents
ENTEGRIS, INC. AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTS
FOR THE QUARTER ENDED MARCH 28, 2020APRIL 3, 2021
DescriptionPage
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Cautionary Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.statements.” The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “forecast,” “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 the impact of the COVID-19 pandemic on the Company’s operations and markets; future period guidance or projections; the Company’s performance relative to its markets;markets, including the drivers of such performance; market and technology trends, including the duration and drivers of any growth trends and the impact of the COVID-19 pandemic;pandemic on such trends; the development of new products and the success of their introductions; the focus of the Company’s engineering, research and development projects; the Company’s ability to execute on its business strategies; the Company’s capital allocation strategy, which may be modified at any time for any reason, including share repurchases, dividends, debt repayments and potential acquisitions; the effect of the Tax Cuts and Jobs Act; the impact of the acquisitions the Company has made and commercial partnerships the Company has established; future capital and other expenditures, including estimates thereof; the Company’s expected tax rate; the impact, financial or otherwise, of any organizational changes; the impact of accounting pronouncements; quantitative and qualitative disclosures about market risk; and other matters. These forward-looking statements are based on current management expectations and assumptions only as of the date of this Quarterly Report, 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; risks related to the COVID-19 pandemic on the global economy and financial markets, as well as on the Company, our customers and suppliers, which may impact our sales, gross margin, customer demand and our ability to supply our products to our customers; 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 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; the Company’s concentrated customer base; the Company’s ability to identify, effectcomplete and integrate acquisitions, joint ventures or other transactions; the Company’s ability to effectively implement any organizational changes; the Company’s ability to protect and enforce intellectual property rights; operational, political and legal risks of the Company’s international operations; the Company’s dependence on sole source and limited source suppliers; the increasing complexity of certain manufacturing
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processes; raw material shortages, supply constraints and price increases; changes in government regulations of the countries in which the Company operates;operates, including the imposition of tariffs, export controls and other trade
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laws and restrictions and changes to foreign and national security policy, especially as they relate to China; fluctuation of currency exchange rates; fluctuations in the market price of the Company’s stock; the level of, and obligations associated with, the Company’s indebtedness; and other risk factors and additional information described in the Company’s filings with the Securities and Exchange Commission, including under the heading “Risks Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019,2020, filed on February 7, 2020,5, 2021, under the heading “Risk Factors” in Item 1A of this Quarterly Report and in the Company’s other periodic filings. Except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission, the Company undertakes no obligation to update publicly any forward-looking statements or information contained herein, which speak as of their respective dates.
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PART 1.    FINANCIAL INFORMATION
Item 1. Financial Statements

ENTEGRIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) 
(In thousands, except share and per share data)(In thousands, except share and per share data)March 28, 2020December 31, 2019(In thousands, except share and per share data)April 3, 2021December 31, 2020
ASSETSASSETSASSETS
Current assets:Current assets:Current assets:
Cash and cash equivalentsCash and cash equivalents$335,077  $351,911  Cash and cash equivalents$548,520 $580,893 
Trade accounts and notes receivable, net of allowance for doubtful accounts of $2,304 and $1,145277,796  234,409  
Trade accounts and notes receivable, net of allowance for doubtful accounts of $2,718 and $2,384Trade accounts and notes receivable, net of allowance for doubtful accounts of $2,718 and $2,384282,649 264,392 
Inventories, netInventories, net300,694  287,098  Inventories, net358,819 323,944 
Deferred tax charges and refundable income taxesDeferred tax charges and refundable income taxes25,650  24,552  Deferred tax charges and refundable income taxes20,227 21,136 
Other current assetsOther current assets27,089  34,427  Other current assets34,391 43,892 
Total current assetsTotal current assets966,306  932,397  Total current assets1,244,606 1,234,257 
Property, plant and equipment, net of accumulated depreciation of $540,013 and $522,424474,841  479,544  
Property, plant and equipment, net of accumulated depreciation of $592,146 and $574,257Property, plant and equipment, net of accumulated depreciation of $592,146 and $574,257542,605 525,367 
Other assets:Other assets:Other assets:
Right-of-use assetsRight-of-use assets50,058  50,160  Right-of-use assets48,057 45,924 
GoodwillGoodwill726,234�� 695,044  Goodwill747,518 748,037 
Intangible assets, net of accumulated amortization of $424,462 and $409,328355,815  333,952  
Intangible assets, net of accumulated amortization of $457,862 and $445,795Intangible assets, net of accumulated amortization of $457,862 and $445,795325,454 337,632 
Deferred tax assets and other noncurrent tax assetsDeferred tax assets and other noncurrent tax assets11,563  11,245  Deferred tax assets and other noncurrent tax assets14,684 14,519 
OtherOther13,748  13,744  Other10,615 11,960 
Total assetsTotal assets$2,598,565  $2,516,086  Total assets$2,933,539 $2,917,696 
LIABILITIES AND EQUITYLIABILITIES AND EQUITYLIABILITIES AND EQUITY
Current liabilities:Current liabilities:Current liabilities:
Long-term debt, current maturities$4,000  $4,000  
Accounts payableAccounts payable81,561  84,207  Accounts payable$93,045 $81,618 
Accrued payroll and related benefitsAccrued payroll and related benefits29,590  62,340  Accrued payroll and related benefits49,554 94,364 
Other accrued liabilitiesOther accrued liabilities60,857  87,778  Other accrued liabilities81,981 82,648 
Income taxes payableIncome taxes payable25,982  26,108  Income taxes payable41,691 43,996 
Total current liabilitiesTotal current liabilities201,990  264,433  Total current liabilities266,271 302,626 
Long-term debt, excluding current maturities, net of unamortized discount and debt issuance costs of $9,112 and $9,5161,074,888  932,484  
Long-term debt, excluding current maturities, net of unamortized discount and debt issuance costs of $8,814 and $9,217Long-term debt, excluding current maturities, net of unamortized discount and debt issuance costs of $8,814 and $9,2171,086,186 1,085,783 
Pension benefit obligations and other liabilitiesPension benefit obligations and other liabilities35,295  37,867  Pension benefit obligations and other liabilities36,663 36,457 
Deferred tax liabilities and other noncurrent tax liabilitiesDeferred tax liabilities and other noncurrent tax liabilities71,516  71,586  Deferred tax liabilities and other noncurrent tax liabilities73,133 73,606 
Long-term lease liabilityLong-term lease liability43,549  43,827  Long-term lease liability42,953 39,730 
Commitments and contingent liabilitiesCommitments and contingent liabilities—  —  Commitments and contingent liabilities
Equity:Equity:Equity:
Preferred stock, par value $.01; 5,000,000 shares authorized; none issued and outstanding as of March 28, 2020 and December 31, 2019—  —  
Common stock, par value $.01; 400,000,000 shares authorized; issued and outstanding shares as of March 28, 2020: 134,808,929 and 134,606,529, respectively; issued and outstanding shares as of December 31, 2019: 134,929,768 and 134,727,368, respectively1,348  1,349  
Treasury stock, at cost: 202,400 shares held as of March 28, 2020 and December 31, 2019(7,112) (7,112) 
Preferred stock, par value $.01; 5,000,000 shares authorized; NaN issued and outstanding as of April 3, 2021 and December 31, 2020Preferred stock, par value $.01; 5,000,000 shares authorized; NaN issued and outstanding as of April 3, 2021 and December 31, 2020
Common stock, par value $.01; 400,000,000 shares authorized; issued and outstanding shares as of April 3, 2021: 135,395,571 and 135,193,171, respectively; issued and outstanding shares as of December 31, 2020: 135,148,774 and 134,946,374, respectivelyCommon stock, par value $.01; 400,000,000 shares authorized; issued and outstanding shares as of April 3, 2021: 135,395,571 and 135,193,171, respectively; issued and outstanding shares as of December 31, 2020: 135,148,774 and 134,946,374, respectively1,354 1,351 
Treasury stock, at cost: 202,400 shares held as of April 3, 2021 and December 31, 2020Treasury stock, at cost: 202,400 shares held as of April 3, 2021 and December 31, 2020(7,112)(7,112)
Additional paid-in capitalAdditional paid-in capital833,159  842,784  Additional paid-in capital837,622 844,850 
Retained earningsRetained earnings390,542  366,127  Retained earnings637,574 577,833 
Accumulated other comprehensive lossAccumulated other comprehensive loss(46,610) (37,259) Accumulated other comprehensive loss(41,105)(37,428)
Total equityTotal equity1,171,327  1,165,889  Total equity1,428,333 1,379,494 
Total liabilities and equityTotal liabilities and equity$2,598,565  $2,516,086  Total liabilities and equity$2,933,539 $2,917,696 
See the accompanying notes to condensed consolidated financial statements.

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ENTEGRIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
Three months ended Three months ended
(In thousands, except per share data)(In thousands, except per share data)March 28, 2020March 30, 2019(In thousands, except per share data)April 3, 2021March 28, 2020
Net salesNet sales$412,327  $391,047  Net sales$512,844 $412,327 
Cost of salesCost of sales226,849  213,654  Cost of sales277,858 226,849 
Gross profitGross profit185,478  177,393  Gross profit234,986 185,478 
Selling, general and administrative expensesSelling, general and administrative expenses58,891  82,254  Selling, general and administrative expenses71,389 58,891 
Engineering, research and development expensesEngineering, research and development expenses29,632  28,991  Engineering, research and development expenses37,748 29,632 
Amortization of intangible assetsAmortization of intangible assets16,211  18,657  Amortization of intangible assets11,871 16,211 
Operating incomeOperating income80,744  47,491  Operating income113,978 80,744 
Interest expenseInterest expense10,559  10,884  Interest expense11,652 10,559 
Interest incomeInterest income(321) (1,225) Interest income(71)(321)
Other expense (income), net878  (248) 
Other expense, netOther expense, net4,330 878 
Income before income tax expenseIncome before income tax expense69,628  38,080  Income before income tax expense98,067 69,628 
Income tax expenseIncome tax expense8,622  5,422  Income tax expense13,391 8,622 
Net incomeNet income$61,006  $32,658  Net income$84,676 $61,006 
Basic net income per common share$0.45  $0.24  
Diluted net income per common share$0.45  $0.24  
Basic earnings per common shareBasic earnings per common share$0.63 $0.45 
Diluted earnings per common shareDiluted earnings per common share$0.62 $0.45 
Weighted shares outstanding:Weighted shares outstanding:Weighted shares outstanding:
BasicBasic134,745135,299Basic135,068134,745
DilutedDiluted136,369136,692Diluted136,502136,369
See the accompanying notes to condensed consolidated financial statements.

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ENTEGRIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
Three months ended Three months ended
(In thousands)(In thousands)March 28, 2020March 30, 2019(In thousands)April 3, 2021March 28, 2020
Net incomeNet income$61,006  $32,658  Net income$84,676 $61,006 
Other comprehensive loss, net of tax
Other comprehensive income (loss), net of taxOther comprehensive income (loss), net of tax
Foreign currency translation adjustmentsForeign currency translation adjustments(9,361) (2,787) Foreign currency translation adjustments(3,716)(9,361)
Pension liability adjustmentsPension liability adjustments10  24  Pension liability adjustments39 10 
Other comprehensive lossOther comprehensive loss(9,351) (2,763) Other comprehensive loss(3,677)(9,351)
Comprehensive incomeComprehensive income$51,655  $29,895  Comprehensive income$80,999 $51,655 
See the accompanying notes to condensed consolidated financial statements.

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ENTEGRIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
(In thousands)(In thousands)Common
shares
outstanding
Common
stock
Treasury sharesTreasury stockAdditional
paid-in
capital
Retained earnings
(deficit)
Foreign currency translation adjustmentsDefined benefit pension adjustmentsTotal(In thousands)Common
shares
outstanding
Common
stock
Treasury sharesTreasury stockAdditional
paid-in
capital
Retained earnings
Foreign currency translation adjustmentsDefined benefit pension adjustmentsTotal
Balance at December 31, 2018136,179  $1,362  (202) $(7,112) $837,658  $213,753  $(32,776) $(860) $1,012,025  
Balance at December 31, 2019Balance at December 31, 2019134,930 $1,349 (202)$(7,112)$842,784 $366,127 $(36,468)$(791)$1,165,889 
Shares issued under stock plansShares issued under stock plans572   —  —  (6,817) —  —  —  (6,812) Shares issued under stock plans483 — (10,894)(10,889)
Share-based compensation expenseShare-based compensation expense—  —  —  —  4,653  —  —  —  4,653  Share-based compensation expense— — 4,994 4,994 
Repurchase and retirement of common stockRepurchase and retirement of common stock(1,035) (10) —  —  (6,364) (23,413) —  —  (29,787) Repurchase and retirement of common stock(604)(6)— (3,740)(25,818)(29,564)
Dividends declared ($0.07 per share)—  —  —  —   (9,517) —  —  (9,510) 
Dividends declared ($0.08 per share)Dividends declared ($0.08 per share)— — 15 (10,773)(10,758)
Pension liability adjustmentPension liability adjustment—  —  —  —  —  —  —  24  24  Pension liability adjustment— — 10 10 
Foreign currency translationForeign currency translation—  —  —  —  —  —  (2,787) —  (2,787) Foreign currency translation— — (9,361)(9,361)
Net incomeNet income—  —  —  —  —  32,658  —  —  32,658  Net income— — 61,006 61,006 
Balance at March 30, 2019135,716  $1,357  (202) $(7,112) $829,137  $213,481  $(35,563) $(836) $1,000,464  
Balance at March 28, 2020Balance at March 28, 2020134,809 $1,348 (202)$(7,112)$833,159 $390,542 $(45,829)$(781)$1,171,327 

(In thousands)Common
shares
outstanding
Common
stock
Treasury sharesTreasury stockAdditional
paid-in
capital
Retained earnings
(deficit)
Foreign currency translation adjustmentsDefined benefit pension adjustmentsTotal
Balance at December 31, 2019134,930  $1,349  (202) $(7,112) $842,784  $366,127  $(36,468) $(791) $1,165,889  
Shares issued under stock plans483   —  —  (10,894) —  —  —  (10,889) 
Share-based compensation expense—  —  —  —  4,994  —  —  —  4,994  
Repurchase and retirement of common stock(604) (6) —  —  (3,740) (25,818) —  —  (29,564) 
Dividends declared ($0.08 per share)—  —  —  —  15  (10,773) —  —  (10,758) 
Pension liability adjustment—  —  —  —  —  —  —  10  10  
Foreign currency translation—  —  —  —  —  —  (9,361) —  (9,361) 
Net income—  —  —  —  —  61,006  —  —  61,006  
Balance at March 28, 2020134,809  $1,348  (202) $(7,112) $833,159  $390,542  $(45,829) $(781) $1,171,327  

(In thousands)Common
shares
outstanding
Common
stock
Treasury sharesTreasury stockAdditional
paid-in
capital
Retained earnings
Foreign currency translation adjustmentsDefined benefit pension adjustmentsTotal
Balance at December 31, 2020135,149 $1,351 (202)$(7,112)$844,850 $577,833 $(36,588)$(840)$1,379,494 
Shares issued under stock plans392 — (13,470)(13,466)
Share-based compensation expense— — 7,138 7,138 
Repurchase and retirement of common stock(145)(1)— (904)(14,095)(15,000)
Dividends declared ($0.08 per share)— — (10,840)(10,832)
Pension liability adjustment— — 39 39 
Foreign currency translation— — (3,716)(3,716)
Net income— — 84,676 84,676 
Balance at April 3, 2021135,396 $1,354 (202)$(7,112)$837,622 $637,574 $(40,304)$(801)$1,428,333 

See the accompanying notes to condensed consolidated financial statements.

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ENTEGRIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
Three months ended Three months ended
(In thousands)(In thousands)March 28, 2020March 30, 2019(In thousands)April 3, 2021March 28, 2020
Operating activities:Operating activities:Operating activities:
Net incomeNet income$61,006  $32,658  Net income$84,676 $61,006 
Adjustments to reconcile net income to net cash provided by operating activities:Adjustments to reconcile net income to net cash provided by operating activities:Adjustments to reconcile net income to net cash provided by operating activities:
DepreciationDepreciation20,648  16,721  Depreciation22,095 20,648 
AmortizationAmortization16,211  18,657  Amortization11,871 16,211 
Share-based compensation expenseShare-based compensation expense4,994  4,653  Share-based compensation expense7,138 4,994 
Provision for deferred income taxesProvision for deferred income taxes(64)  Provision for deferred income taxes1,581 (64)
Charge for excess and obsolete inventoryCharge for excess and obsolete inventory3,249 3,605 
OtherOther5,627  5,688  Other3,336 2,022 
Changes in operating assets and liabilities:Changes in operating assets and liabilities:Changes in operating assets and liabilities:
Trade accounts and notes receivableTrade accounts and notes receivable(43,995) (9,109) Trade accounts and notes receivable(21,564)(43,995)
InventoriesInventories(18,205) (2,131) Inventories(39,337)(18,205)
Accounts payable and accrued liabilitiesAccounts payable and accrued liabilities(38,020) (45,019) Accounts payable and accrued liabilities(28,591)(38,020)
Other current assetsOther current assets5,825  17,778  Other current assets9,400 5,825 
Income taxes payable and refundable income taxesIncome taxes payable and refundable income taxes(225) (42,873) Income taxes payable and refundable income taxes(3,588)(225)
OtherOther(2,399) 433  Other2,849 (2,399)
Net cash provided by (used in) operating activities11,403  (2,538) 
Net cash provided by operating activitiesNet cash provided by operating activities53,115 11,403 
Investing activities:Investing activities:Investing activities:
Acquisition of property, plant and equipmentAcquisition of property, plant and equipment(22,585) (34,465) Acquisition of property, plant and equipment(43,330)(22,585)
Acquisition of businesses, net of cash acquiredAcquisition of businesses, net of cash acquired(75,630) (49,789) Acquisition of businesses, net of cash acquired(75,630)
OtherOther 197  Other72 
Net cash used in investing activitiesNet cash used in investing activities(98,210) (84,057) Net cash used in investing activities(43,258)(98,210)
Financing activities:Financing activities:Financing activities:
Proceeds from short-term borrowings and long-term debt217,000  —  
Payments of long-term debt(75,000) (1,000) 
Proceeds from short-term borrowingsProceeds from short-term borrowings217,000 
Payments of short-term borrowingsPayments of short-term borrowings(75,000)
Payments for dividendsPayments for dividends(10,847) (9,470) Payments for dividends(10,908)(10,847)
Issuance of common stockIssuance of common stock551  917  Issuance of common stock1,572 551 
Repurchase of common stock(29,564) (35,321) 
Repurchase and retirement of common stockRepurchase and retirement of common stock(15,000)(29,564)
Taxes paid related to net share settlement of equity awardsTaxes paid related to net share settlement of equity awards(11,440) (7,727) Taxes paid related to net share settlement of equity awards(15,038)(11,440)
Deferred acquisition paymentsDeferred acquisition payments(16,125) —  Deferred acquisition payments(16,125)
OtherOther(2,890) (250) Other(1)(2,890)
Net cash provided by (used in) financing activities71,685  (52,851) 
Net cash (used in) provided by financing activitiesNet cash (used in) provided by financing activities(39,375)71,685 
Effect of exchange rate changes on cash and cash equivalentsEffect of exchange rate changes on cash and cash equivalents(1,712) (256) Effect of exchange rate changes on cash and cash equivalents(2,855)(1,712)
Decrease in cash and cash equivalentsDecrease in cash and cash equivalents(16,834) (139,702) Decrease in cash and cash equivalents(32,373)(16,834)
Cash and cash equivalents at beginning of periodCash and cash equivalents at beginning of period351,911  482,062  Cash and cash equivalents at beginning of period580,893 351,911 
Cash and cash equivalents at end of periodCash and cash equivalents at end of period$335,077  $342,360  Cash and cash equivalents at end of period$548,520 $335,077 


See the accompanying notes to condensed consolidated financial statements.
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Supplemental Cash Flow InformationThree months ended
(unaudited)
(In thousands)March 28, 2020March 30, 2019
Non-cash transactions:
Deferred acquisition payments$1,451  $14,001  
Contingent consideration obligation$—  $686  
Equipment purchases in accounts payable$6,689  $7,486  
Dividends payable$89  $65  
Schedule of interest and income taxes paid:
Interest paid$15,296  $17,124  
Income taxes paid, net of refunds received$7,997  $47,770  
ENTEGRIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Unaudited)

Supplemental Cash Flow InformationThree months ended
(unaudited)
(In thousands)April 3, 2021March 28, 2020
Non-cash transactions:
Deferred acquisition payments$$1,451 
Equipment purchases in accounts payable8,249 6,689 
Changes in dividends payable76 89 
Schedule of interest and income taxes paid:
Interest paid13,515 15,296 
Income taxes paid, net of refunds received14,959 7,997 
See the accompanying notes to condensed consolidated financial statements.
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ENTEGRIS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations Entegris, Inc. (“Entegris”, “the Company”, “us”, “we”, or “our”) is a leading global developer, manufacturer and supplier of microcontamination control products, specialty chemicals and advanced materials handlingand process solutions for manufacturing processes in the semiconductor and other high-technology industries.
Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries. Intercompany profits, transactions and balances have been eliminated in consolidation.
Use of Estimates The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, particularly receivables, inventories, property, plant and equipment, right-of-use assets, goodwill, intangibles, accrued expenses, short-term and long-term lease liability, income taxes and related accounts, and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Basis of Presentation The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and contain all adjustments considered necessary, and are of a normal recurring nature, to present fairly the financial position as of March 28, 2020April 3, 2021 and December 31, 2019,2020, and the results of operations and comprehensive income for the three months ended April 3, 2021 and March 28, 2020, and March 30, 2019, the equity statements as of and for the three months ended April 3, 2021 and March 28, 2020, and March 30, 2019, and cash flows for the three months ended April 3, 2021 and March 28, 2020 and March 30, 2019.2020.
The condensed consolidated financial statements and accompanying notes are presented as permitted by Form 10-Q and do not contain certain information included in the Company’s annual consolidated financial statements and notes. The information included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis and consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2019.2020. The results of operations for the three months ended March 28, 2020April 3, 2021 are not necessarily indicative of the results to be expected for the full year.
Fair Value of Financial Instruments The carrying value of cash equivalents, accounts receivable, accounts payable, accrued payroll and related benefits, and other accrued liabilities approximates fair value due to the short maturity of those items. The fair value of long-term debt, including current maturities, was $1,014.8$1,115.2 million at March 28, 2020,April 3, 2021, compared to the carrying amount of long-term debt, including current maturities, of $1,078.9$1,086.2 million at March 28, 2020.April 3, 2021.
RecentRecently Adopted Accounting Pronouncements Adopted in 2020 In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities are required to use a new forward-looking “expected loss” model that replaces the current “incurred loss” model and generally will result in the earlier recognition of allowances for losses.
The Company adopted ASU No. 2016-13 on January 1, 2020, and there was no material effect on its condensed consolidated financial statements.
Recent Accounting Pronouncements
In December 2019, the FASB issued ASU No. 2019-12, “Simplifying the Accounting for Income Taxes” under ASC 740, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application. This guidance is effective for fiscal years beginning after December 15, 2021,2020, including interim periods within that fiscal year. Early adoption is permitted. The Company isadopted this new guidance in the processfirst quarter of evaluatingfiscal 2021. The adoption of ASU 2019-12 did not have a material impact on the impacts of this guidance on itscondensed consolidated financial statements and related disclosures.statements.
Recently Issued Accounting Pronouncements The Company currently has no material recent accounting pronouncements yet to be adopted.
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2. REVENUES
Revenue Recognition Revenue is measured based on consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer.
Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.
Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of goods sold.sales.
The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less.
When the Company receives consideration, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a sales contract, the Company records deferred revenue, which represents a contract liability. Such deferred revenue typically results from advance payments received on sales of the Company’s products. The Company makes the required disclosures with respect to deferred revenue below.
The Company does not disclose information about remaining performance obligations that have original expected durations of one year or less.
Nature of goods and services The following is a description of principal activities from which the Company generates its revenues. The Company has three reportable segments. For more detailed information about reportable segments, see note 910 to the condensed consolidated financial statements. For each of the three reportable segments, the recognition of revenue regarding the nature of goods and services provided by the segments are similar and described below. The Company recognizes revenue for product sales at a point in time following the transfer of control of such products to the customer, which generally occurs upon shipment or delivery, depending on the terms of the underlying contracts. For product sales contracts that contain multiple performance obligations, the Company allocates the transaction price to each performance obligation identified in the contract based on relative standalone selling prices, or estimates of such prices, and recognizes the related revenue as control of each individual product is transferred to the customer, in satisfaction of the corresponding performance obligations.
The Company generally recognizes revenue for sales of services when the Company has satisfied the performance obligation. The payment terms and revenue recognized is based on time and materials.
The Company also enters into arrangements to license its intellectual property. These arrangements typically permit the customer to use a specialized manufacturing process or patented technology and in return the Company receives a royalty fee. If applicable, theThe Company recognizes revenue for a sales-based or usage-based royalty promised in exchange for a license of intellectual property when the subsequent sale or usage occurs.
The Company offers certain customers cash discounts and volume rebates as sales incentives. The discounts and volume rebates are recorded as a reduction in sales at the time revenue is recognized in an amount estimated based on historical experience and contractual obligations. The Company periodically reviews the assumptions underlying its estimates of discounts and volume rebates and adjusts its revenues accordingly.
In addition, the Company offers free product rebates to certain customers. The Company utilizes an adjusted market approach to estimate the stand-alone selling price of the loyalty program and allocates a portion of the consideration received to the free product offering. The free product offering is redeemable upon future purchases of the Company’s products. The amount associated with free product rebates is recorded as deferred inrevenue on the balance sheet and is recognized as revenue when the free product is redeemed or when the likelihood of redemption is remote. The Company deemshas deemed that the amount is immaterial for disclosure.
The Company provides for the estimated costs of fulfilling ourits obligations under product warranties at the time the related revenue is recognized. The Company estimates the costs based on historical failure rates, projected repair costs, and knowledge of specific product failures (if any). The specific warranty terms and conditions vary depending upon the product sold and the country in which we do business, but generally include parts and labor over a period generally ranging from 90 days to one year. The Company regularly reevaluates its estimates to assess the adequacy of the recorded warranty liabilities and adjustadjusts the amounts as necessary.
The Company’s contracts are generally short-term in nature. Most contractscontracts’ terms do not exceed twelve months. Payment terms vary by the type and location of the Company’s customers and the products or services offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, the Company requires payment before the products or services are delivered to the customer. Those customers that prepay are represented by the contract liabilities below until the performance obligations are satisfied.
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The following table provides information about contract liabilities from contracts with customers. The contract liabilities are included in other accrued liabilities balance in the condensed consolidated balance sheet.
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(In thousands)(In thousands)March 28, 2020December 31, 2019(In thousands)April 3, 2021December 31, 2020
Contract liabilities - currentContract liabilities - current$10,610  $13,022  Contract liabilities - current$19,077 $13,852 
Significant changes in the contract liabilities balances during the period are as follows:
Three months ended
(In thousands)March 28, 2020April 3, 2021
Revenue recognized that was included in the contract liability balance at the beginning of the period$(7,596)(9,713)
Increases due to cash received, excluding amounts recognized as revenue during the period5,18414,938 

3. ACQUISITIONS
Global Measurement Technologies, Inc.
On July 10, 2020, the Company acquired Global Measurement Technologies, Inc. (“GMTI”), an analytical instrument provider for critical processes in semiconductor production, and its manufacturing partner Clean Room Plastics, Inc. GMTI reports into the Advanced Materials Handling segment of the Company. The acquisition was accounted for under the acquisition method of accounting, and GMTI’s results of operations are included in the Company’s condensed consolidated financial statements as of and since July 10, 2020. The acquisition does not constitute a material business combination.
The purchase price for GMTI includes cash consideration of $36.3 million, net of cash acquired, which was funded from the Company’s existing cash on hand.
The purchase price of GMTI exceeds the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed by $16.1 million. Cash flows used to determine the purchase price included strategic and synergistic benefits (investment value) specific to the Company, which resulted in a purchase price in excess of the fair value of identifiable net assets. This additional investment value resulted in goodwill, which is expected to be non-deductible for income tax purposes.
During the quarter ended September 26, 2020, the Company finalized its fair value determination of the assets acquired and the liabilities assumed. The following table summarizes the final allocation of the purchase price to the fair values assigned to the assets acquired and liabilities assumed at the date of the acquisition:
(In thousands):July 10, 2020
Trade accounts and note receivable, net$937 
Inventories, net1,079 
Identifiable intangible assets18,180 
Right-of-use assets337 
Accounts payable and accrued liabilities(28)
Short-term lease liability(150)
Long-term lease liability(187)
Net assets acquired20,168 
Goodwill16,099 
Total purchase price, net of cash acquired$36,267 
The Company recognized the following finite-lived intangible assets as part of the acquisition of GMTI:
(In thousands)AmountWeighted
average life in
years
Developed technology$3,570 6.5
Trademarks and trade names1,010 11.5
Customer relationships13,600 15.5
$18,180 13.5

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Sinmat
On January 10, 2020, the Company acquired Sinmat, a chemical mechanical polishing slurry manufacturer. Sinmat reports into the Specialty Chemicals and Engineered MaterialMaterials segment of the Company. The acquisition was accounted for under the acquisition method of accounting and theSinmat’s results of Sinmatoperations are included in the Company’s condensed consolidated financial statements as of and since January 10, 2020. Costs associated with the acquisition of Sinmat were $0.7 million for the three monthsyear ended March 28, 2020 and were expensed as incurred. These costs are included in the selling, general and administrative expenses in the Company’s condensed consolidated statement of operations. The acquisition does not constitute a material business combination.
The purchase price for Sinmat includes cash consideration of $76.2 million, or $75.6 million net of cash acquired, (subject to revision for certain adjustments), which was funded from the Company’s existing cash on hand.
The purchase price of Sinmat exceeds the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed by $31.8$31.7 million. Cash flows used to determine the purchase price included strategic and synergistic benefits (investment value) specific to the Company, which resulted in a purchase price in excess of the fair value of identifiable net assets. This additional investment value resulted in goodwill, which is expected to be non-deductible for income tax purposes.
During the quarter ended June 27, 2020, the Company finalized its fair value determination of the assets acquired and the liabilities assumed. The following table summarizes the provisional allocation of the purchase price to the fair values assigned to the assets acquired and liabilities assumed at the date of the acquisition date:
(In thousands):As of January 10, 2020
Trade accounts and note receivable, net$1,189 
Inventories, net1,010 
Other current assets
Property, plant and equipment63 
Identifiable intangible assets41,680 
Right-of-use assets1,712 
Accounts payable and accrued liabilities(58)
Short-term lease liability(150)
Long-term lease liability(1,562)
Net assets acquired43,892 
Goodwill31,751 
Total purchase price, net of cash acquired$75,643 
The Company recognized the following finite-lived intangible assets as part of the acquisition of Sinmat:
(In thousands)AmountWeighted
average life in
years
Developed technology$7,650  7.0
Trademarks and trade names130  1.3
Customer relationships33,900  15.0
$41,680  13.5
The final valuation of assets acquired and liabilities assumed is expected to be completed as soon as possible, but not later than one year from the acquisition date. The allocation of the purchase price to the assets acquired and the liabilities assumed is
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complete with the exception of the value allocated to income tax and intangible accounts. To the extent that the Company’s estimates require adjustment, the Company will modify the values.
Hangzhou Anow Microfiltration Co., Ltd.
On September 17, 2019, the Company acquired Hangzhou Anow Microfiltration Co., Ltd. (Anow), a filtration company for diverse industries including semiconductor, pharmaceutical, and medical. Anow reports into the Microcontamination Control segment of the Company. The acquisition was accounted for under the acquisition method of accounting and the results of Anow are included in the Company’s condensed consolidated financial statements as of and since September 17, 2019. The acquisition does not constitute a material business combination.
The purchase price for Anow is $72.8 million, net of cash acquired. The purchase price includes (1) cash consideration of $73.0 million, or $69.3 million net of cash acquired (subject to revision for certain adjustments), which was funded from the Company’s existing cash on hand, and (2) $3.5 million deferred payment due to the seller no earlier than September 18, 2021, at which time either the seller of the Company can exercise its option to receive or pay the deferred payment, respectively.
The purchase price of Anow exceeds the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed by $49.6 million. Cash flows used to determine the purchase price included strategic and synergistic benefits (investment value) specific to the Company, which resulted in a purchase price in excess of the fair value of identifiable net assets. This additional investment value resulted in goodwill, which is expected to be non-deductible for income tax purposes.
The following table summarizes the provisional allocationallocations of the purchase price to the fair values assigned to the assets acquired and liabilities assumed at the date of the acquisition date and as adjusted as of March 28, 2020:June 27, 2020, respectively:
(In thousands):As of September 17, 2019As of March 28, 2020
Trade accounts and note receivable, net$3,455  $3,455  
Inventories, net4,242  4,459  
Other current assets202  794  
Property, plant and equipment8,863  8,257  
Identifiable intangible assets42,179  16,439  
Right-of-use assets—  2,328  
Other noncurrent assets1,565  74  
Accounts payable and accrued liabilities(1,814) (5,022) 
Short-term lease liability—  (88) 
Long-term lease liability—  (107) 
Noncurrent deferred tax liabilities(10,890) (4,129) 
Other noncurrent liabilities—  (3,270) 
       Net assets acquired47,802  23,190  
Goodwill25,212  49,608  
Total purchase price, net of cash acquired$73,014  $72,798  
The change in the allocation of purchase price is due to the acquisition occurring near the quarter end date of September 29, 2019 which required an estimated allocation of values.
(In thousands):As of January 10, 2020As of June 27, 2020
Trade accounts and note receivable, net$1,189 $1,189 
Inventories, net1,010 1,010 
Other current assets
Property, plant and equipment63 63 
Identifiable intangible assets41,680 41,680 
Right-of-use assets1,712 1,712 
Deferred tax asset102 
Accounts payable and accrued liabilities(58)(58)
Short-term lease liability(150)(150)
Long-term lease liability(1,562)(1,562)
Net assets acquired43,892 43,994 
Goodwill31,751 31,651 
Total purchase price, net of cash acquired$75,643 $75,645 
The Company recognized the following finite-lived intangible assets as part of the acquisition of Anow:Sinmat:
(In thousands)(In thousands)AmountWeighted
average life in
years
(In thousands)AmountWeighted
average life in
years
Developed technologyDeveloped technology$6,764  6.8Developed technology$7,650 7.0
Trademarks and trade namesTrademarks and trade names2,019  7.3Trademarks and trade names130 1.3
Customer relationshipsCustomer relationships7,656  14.3Customer relationships33,900 15.0
$16,439  10.3$41,680 13.5
The final valuation of assets acquired and liabilities assumed is expected to be completed as soon as possible, but not later than one year from the acquisition date. The allocation of the purchase price to the assets acquired and the liabilities assumed is complete with the exception of the value allocated to income tax accounts. To the extent that the Company’s estimates require adjustment, the Company will modify the values.
MPD Chemicals
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On July 15, 2019, the Company acquired MPD Chemicals (MPD), a provider of advanced materials to the specialty chemical, technology, and life sciences industries. MPD reports into the Specialty Chemicals and Engineered Material segment of the Company. The acquisition was accounted for under the acquisition method of accounting and the results of MPD are included in the Company’s condensed consolidated financial statements as of and since July 15, 2019. The acquisition does not constitute a material business combination.
The purchase price for MPD is $162.4 million, net of cash acquired. The purchase price includes (1) cash consideration of $157.9 million (subject to revision for customary working capital adjustments), which was funded from the Company’s existing cash on hand, and (2) a fixed deferred payment of $5.0 million that is due on January 15, 2022, recorded at $4.5 million, which represents the fair value of this fixed deferred payment as of the acquisition date.
The fair value of the fixed deferred payment was determined by taking the present value of this fixed deferred payment based on the term and a discount factor. The fixed deferred payment is reflected in pension benefit obligations and other liabilities in the Company’s condensed consolidated balance sheets.
The purchase price of MPD exceeds the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed by $63.0 million. Cash flows used to determine the purchase price included strategic and synergistic benefits (investment value) specific to the Company, which resulted in a purchase price in excess of the fair value of identifiable net assets. This additional investment value resulted in goodwill, which is expected to be deductible for income tax purposes.
The following table summarizes the provisional allocation of the purchase price to the fair values assigned to the assets acquired and liabilities assumed at the date of the acquisition date and adjusted as of March 28, 2020:
(In thousands):As of July 15, 2019As of March 28, 2020
Trade accounts and note receivable, net$3,575  $3,575  
Inventories, net21,899  8,689  
Other current assets318  313  
Property, plant and equipment14,571  11,465  
Identifiable intangible assets74,900  79,390  
Right-of-use assets3,677  3,621  
Accounts payable and accrued liabilities(2,440) (2,153) 
Short-term lease liabilities(144) (88) 
Long-term lease liabilities(4,016) (4,016) 
Other noncurrent liabilities(1,416) (1,416) 
       Net assets acquired110,924  99,380  
Goodwill51,457  63,042  
Total purchase price, net of cash acquired$162,381  $162,422  

The Company recognized the following finite-lived intangible assets as part of the acquisition of MPD:
(In thousands)AmountWeighted
average life in
years
Developed technology$12,750  11.0
Trademarks and trade names620  2.0
Customer relationships66,020  17.0
$79,390  16.0
The allocation of the purchase price to the assets acquired and liabilities assumed is complete with the exception of the value allocated to income tax accounts. To the extent that the Company’s estimates require adjustments, the Company will modify the value.
Digital Specialty Chemicals
On March 8, 2019, the Company acquired Digital Specialty Chemicals Limited (DSC), a Toronto, Canada-based provider of advanced materials to the specialty chemical, technology, and pharmaceutical industries. DSC reports into the Specialty Chemicals and Engineered Materials segment of the Company. The acquisition was accounted for under the acquisition method of accounting and the results of operations of DSC are included in the Company’s condensed consolidated financial statements as of and since March 8, 2019. Costs associated with the acquisitions of DSC were $2.1 million for the three months ended march 30, 2019 and were expensed as incurred. These costs were included in selling, general and administrative expense in the
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Company’s condensed consolidated statements of operations. The acquisition does not constitute a material business combination.
The purchase price for DSC is $64.1 million, net of cash acquired. The purchase price includes (1) cash consideration of $49.9 million, or $49.4 million net of cash acquired, which was funded from the Company’s existing cash on hand, (2) a fixed deferred payment of $16.1 million that is due on March 31, 2022, recorded at $14.0 million representing the fair value of this fixed deferred payment as of the acquisition date, and (3) an earnout-based contingent consideration of $0.7 million based on the operating performance of DSC for a twelve-month period ended March 31, 2021.
The fair value of the fixed deferred payment was determined by taking the present value of this fixed deferred payment based on the term and a discount factor. The fixed deferred payment is reflected in pension benefit obligations and other liabilities in the Company’s condensed consolidated balance sheets.
Upon closing the acquisition, the Company recorded a contingent consideration obligation of $0.7 million, which represents the fair value of the earnout-based contingent consideration. This amount was estimated based on a Black Scholes model. Subsequent changes in the fair value of this obligation will be recognized as adjustments to the contingent consideration obligation and reflected within the Company’s condensed consolidated statements of operations.
On December 3, 2019 the Company entered into a settlement agreement to accelerate the fixed deferred payment of $16.1 million to no later than March 8, 2020. This payment was made in the first quarter of 2020. The Company adjusted the fair value of the fixed deferred payment from its fair value to the full value resulting in an additional $1.6 million charge to interest expense in the fourth quarter of 2019 and the liability was adjusted from other long-term liabilities to other accrued liabilities in the condensed consolidated balance sheet as of December 31, 2019. In addition to the acceleration of the fixed deferred payment, it was determined that the earnout-based contingent consideration of $0.7 million will never become owed to the sellers under the original purchase agreement. The Company removed the liability and credited selling, general and administrative expensed in the fourth quarter of 2019.
The purchase price of DSC exceeds the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed by $36.5 million. Cash flows used to determine the purchase price included strategic and synergistic benefits (investment value) specific to the Company, which resulted in a purchase price in excess of the fair value of identifiable net assets. This additional investment value resulted in goodwill, which is expected to be non-deductible for income tax purposes.
The following table summarizes the final allocation of the purchase price to the fair values assigned to the assets acquired and liabilities assumed at the date of the acquisition and as adjusted as of December 31, 2019:
(In thousands):As of March 8, 2019As of December 31, 2019
Trade accounts and note receivable, net$1,840  $1,840  
Inventories, net5,523  4,307  
Other current assets1,389  1,437  
Property, plant and equipment16,791  16,654  
Identifiable intangible assets7,976  6,870  
Right-of-use assets79  79  
Deferred tax asset1,104  1,066  
Other noncurrent assets—  28  
Accounts payable and accrued liabilities(2,461) (2,861) 
Deferred tax liabilities(2,861) (1,802) 
Long-term lease liability(37) (37) 
       Net assets acquired29,343  27,581  
Goodwill35,133  36,540  
Total purchase price, net of cash acquired$64,476  $64,121  

During the year ended December 31, 2019, the Company finalized its fair value determination of the assets acquired and liabilities assumed. The valuation of the assets acquired and liabilities assumed was based on the information that was available as of the acquisition date, and the expectations and assumptions that have been deemed reasonable by the Company’s management.
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4. INVENTORIES
Inventories consist of the following:
 
(In thousands)(In thousands)March 28, 2020December 31, 2019(In thousands)April 3, 2021December 31, 2020
Raw materialsRaw materials$102,208  $92,849  Raw materials$124,799 $97,319 
Work-in processWork-in process38,476  30,856  Work-in process36,980 32,316 
Finished goodsFinished goods160,010  163,393  Finished goods197,040 194,309 
Total inventories, netTotal inventories, net$300,694  $287,098  Total inventories, net$358,819 $323,944 

5. GOODWILL AND INTANGIBLE ASSETS
Goodwill activity for each of the Company’s reportable segments that carry goodwill, Specialty Chemicals and Engineered Materials (“SCEM”), Microcontamination Control (“MC”) and Advanced Materials Handling (“AMH”), for each period was as follows:
(In thousands)Specialty Chemicals and Engineered MaterialsMicrocontamination ControlAdvanced Materials HandlingTotal
December 31, 2019$397,952  $240,021  $57,071  $695,044  
Addition due to acquisitions31,751  —  —  31,751  
Purchase accounting adjustments1,172  1,897  —  3,069  
Foreign currency translation(2,526) (1,104) —  (3,630) 
March 28, 2020$428,349  $240,814  $57,071  $726,234  
(In thousands)Specialty Chemicals and Engineered MaterialsMicrocontamination ControlAdvanced Materials HandlingTotal
December 31, 2020$427,713 $247,154 $73,170 $748,037 
Foreign currency translation(31)(488)(519)
April 3, 2021$427,682 $246,666 $73,170 $747,518 
Identifiable intangible assets at March 28, 2020April 3, 2021 and December 31, 20192020 consist of the following:
March 28, 2020
April 3, 2021April 3, 2021
(In thousands)(In thousands)Gross  carrying
Amount
Accumulated
amortization
Net  carrying
value
(In thousands)Gross  carrying
Amount
Accumulated
amortization
Net  carrying
value
Developed technologyDeveloped technology$279,158  $212,026  $67,132  Developed technology$283,228 $224,340 $58,888 
Trademarks and trade namesTrademarks and trade names28,942  16,753  12,189  Trademarks and trade names30,087 18,887 11,200 
Customer relationshipsCustomer relationships435,880  168,548  267,332  Customer relationships449,606 201,743 247,863 
OtherOther36,297  27,135  9,162  Other20,395 12,892 7,503 
$780,277  $424,462  $355,815  $783,316 $457,862 $325,454 

December 31, 2019
December 31, 2020December 31, 2020
(In thousands)(In thousands)Gross  carrying
amount
Accumulated
amortization
Net  carrying
value
(In thousands)Gross  carrying
amount
Accumulated
amortization
Net  carrying
value
Developed technologyDeveloped technology$272,334  $204,689  $67,645  Developed technology$283,272 $221,651 $61,621 
Trademarks and trade namesTrademarks and trade names29,106  16,326  12,780  Trademarks and trade names30,100 18,374 11,726 
Customer relationshipsCustomer relationships405,537  161,551  243,986  Customer relationships449,659 193,313 256,346 
OtherOther36,303  26,762  9,541  Other20,396 12,457 7,939 
$743,280  $409,328  $333,952  $783,427 $445,795 $337,632 
Future amortization expense during the remainder of 2020,2021, each of the nextsucceeding four years and thereafter relating to intangible assets currently recorded in the Company’s condensed consolidated balance sheets is estimated at March 28, 2020 to be the following:following at April 3, 2021:
(In thousands)(In thousands)Remaining 20202021202220232024ThereafterTotal(In thousands)Remaining 20212022202320242025ThereafterTotal
Future amortization expenseFuture amortization expense$36,983  47,004  46,234  45,545  31,735  148,314  $355,815  Future amortization expense$36,332 47,602 46,913 34,294 27,663 132,650 $325,454 


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6. EARNINGS PER COMMON SHARE
Basic earnings per common share (“EPS”) is calculated based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share is calculated based on the weighted average number of shares of common stock outstanding plus potentially dilutive shares of common stock outstanding during the period. The following table presents a reconciliation of the denominatorsshare amounts used in the computation of basic and diluted earnings per common share (EPS):share: 
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Three months ended Three months ended
(In thousands)(In thousands)March 28, 2020March 30, 2019(In thousands)April 3, 2021March 28, 2020
Basic—weighted common shares outstandingBasic—weighted common shares outstanding134,745  135,299  Basic—weighted common shares outstanding135,068 134,745 
Weighted common shares assumed upon exercise of stock options and vesting of restricted common stockWeighted common shares assumed upon exercise of stock options and vesting of restricted common stock1,624  1,393  Weighted common shares assumed upon exercise of stock options and vesting of restricted common stock1,434 1,624 
Diluted—weighted common shares and common shares equivalent outstandingDiluted—weighted common shares and common shares equivalent outstanding136,369  136,692  Diluted—weighted common shares and common shares equivalent outstanding136,502 136,369 
The Company excluded the following shares underlying stock-based awards from the calculations of diluted EPS because their inclusion would have been anti-dilutive for the three months ended April 3, 2021 and March 28, 2020 and March 30, 2019:2020:
Three months ended Three months ended
(In thousands)(In thousands)March 28, 2020March 30, 2019(In thousands)April 3, 2021March 28, 2020
Shares excluded from calculations of diluted EPSShares excluded from calculations of diluted EPS252  460  Shares excluded from calculations of diluted EPS140 252 

7. OTHER EXPENSE (INCOME), NET
Other expense (income), net for the three months ended March 28, 2020 and March 30, 2019 consists of the following:
 Three months ended
(In thousands)March 28, 2020March 30, 2019
Loss (gain) on foreign currency remeasurement640  (720) 
Other, net238  472  
Other expense (income), net$878  $(248) 

8. LEASES
As of March 28, 2020,April 3, 2021, the Company was obligated under operating lease agreements for certain sales offices and manufacturing facilities, manufacturing equipment, vehicles, information technology equipment and warehouse space. As of March 28, 2020, we doApril 3, 2021, the Company does not have material finance leases. Our leases have remaining lease terms of 1 year to 1413 years, some of which may include options to extend the lease for up to 6 years, and some of which may include options to terminate the leases within 1 year.
As of March 28,April 3, 2021 and December 31, 2020, the Company’s operating lease components with initial or remaining terms in excess of one year were classified on the condensed consolidated balance sheet and otheras follows, together with certain supplemental balance sheet information was as follows:information:
(In thousands, except lease term and discount rate)
(In thousands, except lease term and discount rate)
ClassificationMarch 28, 2020December 31, 2019
(In thousands, except lease term and discount rate)
ClassificationApril 3, 2021December 31, 2020
AssetsAssetsAssets
Right-of-use assetsRight-of-use assetsRight-of-use assets  $50,058  $50,160  Right-of-use assetsRight-of-use assets$48,057 $45,924 
LiabilitiesLiabilitiesLiabilities
Short-term lease liabilityShort-term lease liabilityOther accrued liabilities  10,172  10,025  Short-term lease liabilityOther accrued liabilities8,903 9,960 
Long-term lease liabilityLong-term lease liabilityLong-term lease liability  43,549  43,827  Long-term lease liabilityLong-term lease liability42,953 39,730 
Total lease liabilitiesTotal lease liabilities$53,721  $53,852  Total lease liabilities$51,856 $49,690 
Lease Term and Discount RateLease Term and Discount RateLease Term and Discount Rate
Weighted average remaining lease term (years)Weighted average remaining lease term (years)8.38.4Weighted average remaining lease term (years)8.77.9
Weighted average discount rateWeighted average discount rate4.9 %4.9 %Weighted average discount rate4.8 %5.0 %
Expense for leases less than 12 months for the three months ended April 3, 2021 and March 28, 2020 and March 30, 2019 were not material. The components of lease expense for the three months ended April 3, 2021 and March 28, 2020 and March 30, 2019 are as follows:
Three months endedThree months ended
(In thousands)
(In thousands)
March 28, 2020March 30, 2019
(In thousands)
April 3, 2021March 28, 2020
Operating lease costOperating lease cost$3,541  $3,020  Operating lease cost$3,399 $3,541 
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The Company combines the amortization of the Right-of-useright-of-use assets and the change in the operating lease liability in the same line item in the Statementcondensed consolidated statement of Cash Flows.cash flows. Other information related to the Company’s operating leases wasfor the three months ended April 3, 2021 and March 28, 2020 are as follows:
(In thousands)
(In thousands)
March 28, 2020March 30, 2019
(In thousands)
April 3, 2021March 28, 2020
Cash paid for amounts included in the measurement of lease liabilities:Cash paid for amounts included in the measurement of lease liabilities:Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from leasesOperating cash flows from leases$2,717  $2,595  Operating cash flows from leases$2,782 $2,717 
Right-of-use assets obtained in exchange for lease obligations:Right-of-use assets obtained in exchange for lease obligations:Right-of-use assets obtained in exchange for lease obligations:
Operating leasesOperating leases$912  $181  Operating leases$5,082 $912 
Future minimum lease payments for noncancellable operating leases as of March 28, 2020,April 3, 2021, were as follows:
(In thousands)(In thousands)Operating Leases(In thousands)Operating Leases
Remaining 2020$12,593  
202110,077  
Remaining 2021Remaining 2021$11,235 
202220226,834  20228,037 
202320236,092  20236,490 
202420245,113  20245,654 
202520255,181 
ThereafterThereafter27,281  Thereafter28,026 
TotalTotal$67,990  Total64,623 
Less: InterestLess: Interest14,269  Less: Interest12,767 
Present value of lease liabilitiesPresent value of lease liabilities$53,721  Present value of lease liabilities$51,856 

9.8. SEGMENT REPORTING
The Company’s financial segment reporting reflects an organizational alignment intended to leverage the Company’s unique portfolio of capabilities to create value for its customers by developing mission-critical solutions to maximize manufacturing yields and enable higher performance of devices. While these segments have separate products and technical know-how, they share common business systems and processes, technology centers, and strategic and technology roadmaps. The Company leverages its expertise from these three segments to create new and increasingly integrated solutions for its customers. The Company’s business is reported in the following segments:
Specialty Chemicals and Engineered Materials (SCEM):Materials: SCEM provides high-performance and high-purity process chemistries, gases and materials and safe and efficient delivery systems to support semiconductor and other advanced manufacturing processes.
Microcontamination Control (MC):Control: MC offers solutions to filter and purify critical liquid chemistries and gases used in semiconductor manufacturing processes and other high-technology industries.
Advanced Materials Handling (AMH):Handling: AMH develops solutions to monitor, protect, transport and deliver critical liquid chemistries, wafers, and other substrates for a broad set of applications in the semiconductor industry and other high-technology industries.
Summarized financial information for the Company’s reportable segments is shown in the following tables.
Three months ended Three months ended
(In thousands)(In thousands)March 28, 2020March 30, 2019(In thousands)April 3, 2021March 28, 2020
Net salesNet salesNet sales
SCEMSCEM$144,214  $124,470  SCEM$166,541 $144,214 
MCMC159,261  157,706  MC207,099 159,261 
AMHAMH116,137  116,064  AMH148,541 116,137 
Inter-segment eliminationInter-segment elimination(7,285) (7,193) Inter-segment elimination(9,337)(7,285)
Total net salesTotal net sales$412,327  $391,047  Total net sales$512,844 $412,327 

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Three months ended Three months ended
(In thousands)(In thousands)March 28, 2020March 30, 2019(In thousands)April 3, 2021March 28, 2020
Segment profitSegment profitSegment profit
SCEMSCEM$32,670  $24,431  SCEM$34,556 $32,670 
MCMC50,167  47,323  MC70,566 50,167 
AMHAMH20,632  22,367  AMH32,095 20,632 
Total segment profitTotal segment profit$103,469  $94,121  Total segment profit$137,217 $103,469 
The following table reconciles total segment profit to income before income taxes:tax expense:
Three months ended Three months ended
(In thousands)(In thousands)March 28, 2020March 30, 2019(In thousands)April 3, 2021March 28, 2020
Total segment profitTotal segment profit$103,469  $94,121  Total segment profit$137,217 $103,469 
Less:Less:Less:
Amortization of intangible assetsAmortization of intangible assets16,211  18,657  Amortization of intangible assets11,871 16,211 
Unallocated general and administrative expensesUnallocated general and administrative expenses6,514  27,973  Unallocated general and administrative expenses11,368 6,514 
Operating incomeOperating income80,744  47,491  Operating income113,978 80,744 
Interest expenseInterest expense10,559  10,884  Interest expense11,652 10,559 
Interest incomeInterest income(321) (1,225) Interest income(71)(321)
Other expense (income), net878  (248) 
Other expense, netOther expense, net4,330 878 
Income before income tax expenseIncome before income tax expense$69,628  $38,080  Income before income tax expense$98,067 $69,628 
In the following tables, revenue is disaggregated by customers’ country or region for the three months ended April 3, 2021 and March 28, 2020, and March 30, 2019, respectively.
Three months ended March 28, 2020Three months ended April 3, 2021
(In thousands)(In thousands)SCEM MCAMHInter-segmentTotal(In thousands)SCEM MCAMHInter-segmentTotal
North AmericaNorth America$49,064 $34,592 $45,465 $(9,337)$119,784 
TaiwanTaiwan$25,182  $42,483  $24,801  $—  $92,466  Taiwan28,679 44,830 27,806 101,315 
United States46,550  28,680  33,403  (7,285) 101,348  
ChinaChina20,662 41,689 20,577 82,928 
South KoreaSouth Korea20,129  20,122  15,161  —  55,412  South Korea25,170 28,011 18,905 72,086 
JapanJapan17,123  28,111  10,420  —  55,654  Japan22,480 36,723 12,005 71,208 
China15,510  18,197  11,639  —  45,346  
EuropeEurope8,608  13,488  12,548  —  34,644  Europe11,777 11,117 16,494 39,388 
Southeast AsiaSoutheast Asia11,112  8,180  8,165  —  27,457  Southeast Asia8,709 10,137 7,289 26,135 
$144,214  $159,261  $116,137  $(7,285) $412,327  $166,541 $207,099 $148,541 $(9,337)$512,844 

Three months ended March 30, 2019
(In thousands)SCEM MCAMHInter-segmentTotal
Taiwan$25,173  $38,490  $18,123  $—  $81,786  
United States32,738  27,582  38,546  (7,193) 91,673  
South Korea19,326  25,815  15,978  —  61,119  
Japan11,678  25,095  11,390  —  48,163  
China14,157  22,165  9,846  —  46,168  
Europe8,777  10,775  15,599  —  35,151  
Southeast Asia12,621  7,784  6,582  —  26,987  
$124,470  $157,706  $116,064  $(7,193) $391,047  

Three months ended March 28, 2020
(In thousands)SCEM MCAMHInter-segmentTotal
North America$46,550 $28,680 $33,403 $(7,285)$101,348 
Taiwan25,182 42,483 24,801 92,466 
China15,510 18,197 11,639 45,346 
South Korea20,129 20,122 15,161 55,412 
Japan17,123 28,111 10,420 55,654 
Europe8,608 13,488 12,548 34,644 
Southeast Asia11,112 8,180 8,165 27,457 
$144,214 $159,261 $116,137 $(7,285)$412,327 

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9. SUBSEQUENT EVENT
On April 16, 2021, the Company announced that it had priced its private offering of $400.0 million aggregate principal amount of 3.625% senior unsecured notes due 2029 (the “2029 Notes”). The 2029 Notes will be senior unsecured obligations of the Company and will be guaranteed by certain subsidiaries of the Company. The issuance of the 2029 Notes is expected to close on April 30, 2021, subject to customary closing conditions.
The Company expects the net proceeds of the offering to be approximately $394.0 million, after deducting estimated commissions and offering fees and expenses. The Company intends to use the net proceeds of the offering, together with cash on hand and approximately $75.0 million borrowed under the Company’s revolving credit facility (the “Revolving Facility”), to pay the redemption price for the redemption in full of the $550.0 million aggregate principal amount of 4.625% senior unsecured notes due 2026 that are currently outstanding. The redemption of the $550.0 million notes due 2026 is expected to result in a loss of $23.1 million on extinguishment of debt, which will be included in the Company’s condensed consolidated statement of operations.
In connection with the Company’s issuance of the 2029 Notes, the Company intends to amend the Revolving Facility to provide for lending commitments in an aggregate principal amount of up to $400.0 million and to extend the maturity to April 30, 2026. The Revolving Facility currently provides for lending commitments in an aggregate principal amount of up to $300.0 million, maturing on November 6, 2023.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of the Company’s condensed consolidated financial condition and results of operations should be read along with the condensed consolidated financial statements and the accompanying notes to the condensed consolidated financial statementsthereto included elsewhere in this Quarterly Report on Form 10-Q. The information, except for historical information, contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q includes forward-looking statements that involve risks and uncertainties. You should review the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 20192020 as well as in our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. The Company assumes no obligation to publicly release the results of any revision or updates to these forward-looking statements to reflect future events or unanticipated occurrences.
Overview
This overview is not a complete discussion of the Company’s financial condition, changes in financial condition andor results of operations; it is intended merely to facilitate an understanding of the most salient aspects of the Company’s financial condition and operating performance and to provide a context for the detailed discussion and analysis that followsfollows. The discussion and analysis must be read in its entirety in order to fully understand the Company’s financial condition and results of operations.
The Company is a leading global developer, manufacturersupplier of advanced materials and supplierprocess solutions for the semiconductor and other high-technology industries. Our mission is to help our customers improve their productivity, performance and technology by providing solutions for the most advanced manufacturing environments. We leverage our unique breadth of capabilities to create mission-critical microcontamination control products, specialty chemicals and advanced materials handling solutions for manufacturing processes in the semiconductor and other high-technology industries. We leverage our unique breadth of capabilities to create value for our customers by developing mission-critical solutions tothat maximize manufacturing yields, reduce manufacturing costs and enable higher device performance.performance for our customers.
Our technology portfolio includes advancedcustomized materials and high-purity chemistries, with optimized packaging and delivery systems and in-process filtration and purification solutions that ensure high-value liquid chemistries and gases are free from contaminants before use. Our standard and customized products and solutions enable the highest levels of purity and performance that are essential to the manufacture of semiconductors, flat panel displays, light emitting diodes, or LEDs, high-purity chemicals, solar cells,semiconductors. As our customers introduce more complex architectures and search for new materials with better electrical and structural properties to improve the performance of their devices, they rely on Entegris as a trusted partner to address these challenges. We understand these challenges and have solutions to address them, such as our advanced deposition materials, implant gases, formulated cleaning chemistries and selective etch chemistries. Our customers also require greater end-to-end materials purity and integrity in their manufacturing processes that, when combined with smaller dimensions and more complex architectures, can be challenging to achieve. To enable the use of new metals and the further miniaturization of chips, and to maximize yield and increase long-term device reliability, we provide products such as our advanced liquid and gas lasers, opticalfiltration and magnetic storage devices, and critical components for aerospace, glass manufacturing and biomedical applications. The majoritypurification products that help to selectively remove new classes of our products are consumed at various timescontaminants throughout the semiconductor supply chain. In addition, to ensure purity levels are maintained across the entire supply chain, from bulk manufacturing, process, with demand driven in part byto transportation to and delivery through a fab, to application onto the level of semiconductorwafer, we provide high-purity packaging and other manufacturing activity.materials handling products.
Our business is organized and operated in three operating segments, which align with the key elements of the advanced semiconductor manufacturing ecosystem. The Specialty Chemicals and Engineered Materials, or SCEM, segment provides high-performance and high-purity process chemistries, gases, and materials, and safe and efficient delivery systems, to support semiconductor and other advanced manufacturing processes. The Microcontamination Control, or MC, segment offers solutions to filter and purify critical liquid chemistries and gases used in semiconductor manufacturing processes and other high-technology industries. The Advanced Materials Handling, or AMH, segment develops solutions to monitor, protect, transport, and deliver critical liquid chemistries, wafers and other substrates for a broad set of applications in the semiconductor industry, life sciences and other high-technology industries. While these segments have separate products and technical know-how, they share common business systems and processes, technology centers, and strategic and technology roadmaps. We leverage our expertise from these three segmentsWith the technology, capabilities and complementary product portfolios from these segments, we believe we are uniquely positioned to collaborate across divisions to create new, co-optimized and increasingly integrated solutions for our customers. For example, our SCEM segment offers a highly selective nitride etch chemistry, our MC segment provides a liquid filter that is specifically matched to that formulation and our AMH segment ensures the integrity of the product as it is moved to and through the fab environment. See note 98 to the condensed consolidated financial statements for additional information on the Company’s three segments.
The Company’s fiscal year is the calendar period ending each December 31. The Company’s fiscal quarters consist of 13-week or 14-week periods that end on a Saturday. The Company’s fiscal quarters in 20202021 end March 28, 2020, June 27, 2020, September 26, 2020April 3, 2021, July 3, 2021, October 2, 2021 and December 31, 2020.2021. Unaudited information for the three months ended April 3, 2021 and March 28, 2020 and March 30, 2019 and the financial position as of March 28, 2020April 3, 2021 and December 31, 20192020 are included in this Quarterly Report on Form 10-Q.
Key operating factors Key factors, which management believes have the largest impact on the overall results of operations of the Company, include:
Level of sales Since a significant portion of the Company’s product costs (except for raw materials, purchased components and direct labor) are largely fixed in the short-to-medium term, an increase or decrease in sales affects gross profits and overall profitability significantly. Also, increases or decreases in sales and operating profitability
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affect certain costs such as incentive compensation and commissions, which are highly variable in nature. The Company’s sales are subject to the effects of industry cyclicality, technological change, substantial competition, pricing pressures and foreign currency fluctuations.
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Variable margin on sales The Company’s variable margin on sales is determined by selling prices and the costs of manufacturing and raw materials. This is affected by a number of factors, which include the Company’s sales mix, purchase prices of raw materialmaterials (especially polymers, membranes, stainless steel and purchased components), domestic and international competition, direct labor costs, and the efficiency of the Company’s production operations, among others.
Fixed cost structure The Company’s operations include a number of large fixed or semi-fixed cost components, which include salaries, indirect labor and benefits, facility costs, lease expenses, and depreciation and amortization. It is not possible to vary these costs easily in the short-term as volumes fluctuate. Accordingly, increases or decreases in sales volume can have a large effect on the usage and productivity of these cost components, resulting in a large impact on the Company’s profitability.
Impact of COVID-19 on our Business
A novel strain of coronavirus (COVID-19) was first identified in Wuhan, China in December 2019, and subsequently declared a pandemic by the World Health Organization.
Health and Safety
From the earliest signs of the outbreak, we have taken proactive, aggressive action to protect the health and safety of our employees, customers, partners and suppliers. We enacted rigorous safety measures in all of our sites, including implementing social distancing protocols, requiring working from home for those employees that do not need to be physically present on the manufacturing floor or in a lab to perform their work, suspending travel, implemented temperature checks at the entrances to our facilities, extensively and frequently disinfecting our workspaces and providing masks to those employees who must be physically present. We expect to continue to implement these measures until we determine that the COVID-19 pandemic is adequately contained for purposes of our business, and we may take further actions as government authorities require or recommend or as we determine to be in the best interests of our employees, customers, partners and suppliers.

Operations

As a result of the COVID-19 pandemic, governmental authorities have implemented and are continuing to implement numerous and constantly evolving measures to try to contain the virus, such as travel bans and restrictions, masking recommendations and mandates, limits on gatherings, quarantines, shelter-in-place orders and business shutdowns. In some cases, governmental re-opening plans have been delayed or reversed due to spikes in the number of infections in the local area. We continue to monitor the situation regarding the COVID-19 pandemic, which remains fluid and uncertain, and to proactively manage and adapt our responses in collaboration with our employees, customers and suppliers. However, we are unable to accurately predict the full impact that COVID-19 may have on our business, results of operations, financial condition, liquidity and cash flows, which will depend on future developments that are highly uncertain and cannot be predicted with accuracy, including, but not limited to, the duration and continued spread of the outbreak, its severity, potential additional waves of infection, the actions to mitigate the virus or its impact, the development, distribution, efficacy and acceptance of vaccines and how quickly and to what extent normal economic and operating conditions can resume.
Health and Safety
Commencing in the first quarter of 2020, we have taken, and continue to take, proactive, aggressive action to protect the health and safety of our employees, customers, partners and suppliers. We enacted rigorous safety measures, including social distancing protocols, encouraging employees who do not need to be physically present on the manufacturing floor or in a lab to perform their work to work from home, suspending non-essential travel, implementing temperature checks and other access controls at the entrances to our facilities, extensively and frequently disinfecting our workspaces and providing masks to employees who are physically present at our facilities. We expect to continue to implement these measures until the COVID-19 pandemic is adequately contained, and we may take further actions as government authorities require or recommend or as we determine to be in the best interests of our employees, customers, partners and suppliers. We expect that the pandemic may abate at different times in different regions, and accordingly our health and safety protocols may vary across regions.
Operations
We have important manufacturing operations in the U.S.,United States, Japan, Korea, China, Malaysia, and Taiwan, all of which have been affected by the outbreak and have taken measures to try to contain it. Measures providing for business shutdowns have generally excludeexcluded certain essential services, and those essential services have commonly includeincluded critical infrastructure and the businesses that support that critical infrastructure. While all of our facilities currently remain operational, these measures have impacted and may further impact our workforce and operations, as well as those of our customers, vendorssuppliers and suppliers.other third parties with which we do business. For example, in March 2020 the government of Malaysia has issued an order that significantly reducesreduced the number of employees who cancould be physically present to operate our Malaysian plant, which hastemporarily reduced the productivity of that plant. The government of Malaysia issued a similar order restricting movement throughout that country in January 2021. Our Malaysian plant is operating at normal capacity as of the date of this filing. In addition to reduced productivity, the constraints and limits imposed on our operations may slow or diminish our research and development activities and customer qualification activities with our customers. We alsoactivities. During 2020, we experienced brief interruptions in operations at our sites in Hangzhou, China, San Luis Obispo, California and Bedford, Massachusetts.Massachusetts and so far during 2021 we have experienced minor interruptions in operations at our site in San Luis Obispo, California and a brief construction delay to an expansion of our facility in Toronto, Canada. While governmental measures may be modified, extended or extended,reimposed, we expect that, absent a significant surge in infections in the relevant local area or within our workforce or those of our suppliers, our manufacturing and research and development facilities will remain operational, largely at or near fullnormal capacity. In connection with the COVID-19 pandemic, we have experienced limited absenteeism from those employees who are required to be on-site to perform their jobs, and wejobs. We do not currently expect that our operations will be materially adversely affected by significant absenteeism. In addition, we have incurred incremental employee compensation related to the COVID-19 pandemic. For example, since April
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2020, we have awarded certain of our employees who are required to physically report to a manufacturing facility in order to perform their jobs during the COVID-19 crisis with a special appreciation bonus for their efforts in sustaining our production continuity.
Supply

We have not yet experienced any significant impacts or interruptions to our supply chain as a result of the COVID-19 pandemic. However, certain of our suppliers have faced difficulties maintaining operations in light of government-ordered restrictions, shelter-in-place mandates and shelter-in-place mandates.outbreaks of infection within their workforces. As the pandemic continues, our suppliers may face challenges in maintaining their level of supply as a result of these or other factors. For example, as a result of the COVID-19 pandemic, during the first half of 2020, one of our critical valve suppliers was shut down and was unable to supply us with valves for certain of our gas purification products. In this instance we were able to procure this critical part from a second, pre-qualified source. Although we regularly monitor the financial health of companies in our supply chain, financial hardship on our suppliers or sub-suppliers caused by the COVID-19 pandemic could cause a disruption in our ability to obtain raw materials or components required to manufacture our products and thus require us to increase our safety stocks of certain raw materials or components, adversely affecting our operations. To mitigate the risk of any potential supply interruptions from the COVID-19 pandemic, during 2020 and into 2021, we chose to increase certain inventory levels, during the quarter.causing us to hold more inventory than we might have otherwise maintained. We may decide to take similar actions going forward.forward, which may result in increased charges for excess or obsolete inventory, which would have the effect of reducing our profitability. Additionally, restrictions or disruptions of transportation, such as reduced availability of air transport, port closures and increased border controls or closures, have started to resultresulted, in certain instances, in higher costs and delays, both on obtaining raw materials and shipping finished goods to customers, whichcustomers. If these restrictions and disruptions continue, they could harm our profitability, make our products less competitive or cause our customers to seek alternative suppliers.
Demand
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The outbreakWhile the COVID-19 pandemic has significantly increasedcaused economic and demand uncertainty. Whileuncertainty, during the first quarter of 2021 we have seencontinued to see strong demand from leading-edge customers associated with end-uses in servers and other data center applications, weapplications. We believe that a portion of recent bookingsthe orders that we received in the first quarter of orders2021 may be attributable tohave been a result of customers increasing their inventory to reduce their exposure to risks of future supply disruptions due to COVID-19 or global logistics constraints, which could be an offset to future demand for our products. We have seen weaknessproducts in some mainstream fabs associated with the slowdown in sales of automotive, aerospace, mobile phone, and other applications. Across our three divisions, certain customers impacted by governmental reactions to COVID-19 pushed out product deliveries and acceptance inspections during the first quarter of 2020. These sales that have been delayed are expected to be recorded in our second quarter.future. We anticipate that the current outbreak or continued spread of COVID-19pandemic will cause acontinue to contribute to global economic slowdown, and it is possible that ituncertainty, which could cause a global recession. In the event of a recession,ultimately harm demand for our products would decline and our business would be adversely effected.products.
Liquidity
Although there is uncertainty related toregarding the anticipated impact of the recent COVID-19 outbreakpandemic on our future results, we believe our business model, our current cash reserves and the recent steps we have taken to strengthen our balance sheet such as drawing down a portion of our Revolving Facility, leave us well-positioned to manage our business through this crisis as we expect it continues to unfold. We have taken recent steps to strengthen our balance sheet. In April 2021, we announced and priced a private offering of $400 million aggregate principal amount of 3.625% senior unsecured notes due 2029, or the 2029 Notes. We plan to use the proceeds of the offering, together with cash on hand and approximately $75 million borrowed under our senior secured revolving facility due 2023, or the Revolving Facility, to pay the redemption price in full of the $550 million aggregate principal amount of 4.625% senior unsecured notes due 2026 that are currently outstanding, or the 2026 Notes, and to pay certain fees and expenses related to the offering. In addition, on April 30, 2020, we issued $400 million aggregate principal amount of 4.375% senior unsecured notes due April 15, 2028. We used a portion of the net proceeds of the offering to repay approximately $142 million of borrowings under the Revolving Facility, representing the entire aggregate principal amount outstanding thereunder. We also used a portion of the net proceeds of the offering to repay approximately $251 million of outstanding borrowings under our senior secured term loan facility, or the Term Loan Facility.
We have reviewed numerous potential scenarios in connection with the impact of COVID-19 on the global economy and the semiconductor industry. Based on our analysis, we believe our existing balances of domestic cash and cash equivalents, which totaled $171.9 million as of April 3, 2021, and our currently anticipated operating cash flows, after taking into account the anticipated issuance of the 2029 Notes and the use of net proceeds, cash on hand and borrowings to fund the redemption of the 2026 Notes, will be sufficient to meet our cash needs arising in the ordinary course of business for the next twelve months.
We continue to monitor the rapidly evolving situation and guidance from international and domestic authorities, including federal, state and local public health authorities, and may take additional actions based on their recommendations.recommendations and requirements or as we otherwise see fit to protect the health and safety of our employees, customers, partners and suppliers. In these circumstances, there may be developments outside our control requiring us to adjust our operating plan. As such, given the dynamic nature of this situation, we cannot reasonably estimate the impacts ofthat COVID-19 may have on our financial condition, results of operations or cash flows in the future. In addition, see Part II—See Item 1A, “Risk Factors,” included hereinin our Annual Report on Form 10-K for updates to our risk factorsthe year ended December 31, 2020 for additional information regarding risks associated with the COVID-19 pandemic.pandemic, including under the caption “The COVID-19 pandemic and ensuing governmental responses could materially adversely affect our financial condition and results of operations.”
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Overall Summary of Financial Results
For the three months ended March 28, 2020,April 3, 2021, net sales increased 5%24% to $412.3$512.8 million, compared to $391.0$412.3 million for the three months ended March 30, 2019. Included in28, 2020. Total net sales increased primarily as a result of strong industry conditions, several node transitions and strong overall demand for the quarterlyCompany’s products and solutions. Net sales for the three months ended March 28, 2020 were netApril 3, 2021 included sales primarily associatedof $3.2 million from acquired businesses of $15.4 million and unfavorablefavorable foreign currency translation effects of $0.3$5.4 million. The increase in revenue resulted from revenue attributable from acquired businesses and increased customer demand from the semiconductor market compared to the year-ago quarter.
Sales were down $14.7 million, or 3% on a sequential basis over sales of $427.0 million in the fourth quarter of 2019, including unfavorable foreign currency translation effects of $0.1 million and sales attributable to acquired businesses of $2.0 million. The decrease in revenue resulted primarily from decreased customer demand from the semiconductor market compared to the previous quarter.
Reflecting the net sales increase, the Company’s gross profit for the three months ended March 28, 2020April 3, 2021 increased to $185.5$235.0 million, up from $177.4 million for the three months ended March 30, 2019. The Company experienced a 45.0% gross margin for the three months ended March 28, 2020, compared to 45.4% in the comparable year-ago period.
The Company’s selling, general and administrative (SG&A) expenses decreased by $23.4$185.5 million for the three months ended March 28, 20202020. The Company experienced a 45.8% gross margin for the three months ended April 3, 2021, compared to 45.0% in the comparable year-ago period. The gross profit and gross margin increases reflect higher factory utilization associated with higher sales levels and a favorable sales mix.
The Company’s selling, general and administrative, or SG&A, expense increased by $12.5 million for the three months ended April 3, 2021 compared to the year-ago quarter, mainly due to a $20.6 million reduction in dealhigher employee costs resulting from increased headcount, benefits and integration costs which in the year-ago quarter included deal costs associated with the terminated Versum transaction and integration expense activity associated with other acquisitions.merit increases.
As a result of the aforementioned factors, the Company reported net income of $61.0$84.7 million, or $0.45$0.62 per diluted share, for the quarter ended March 28, 2020,April 3, 2021, compared to net income of $32.7$61.0 million, or $0.24$0.45 per diluted share, a year ago.
On January 10, 2020,April 16, 2021, the Company acquired Sinmat, a chemical mechanical polishing (CMP) slurry manufacturer. Sinmat reports intoannounced that it had priced its private offering of the Specialty Chemicals2029 Notes. The 2029 Notes will be senior unsecured obligations of the Company and Engineered Material segmentwill be guaranteed by certain subsidiaries of the Company. The total purchase priceissuance of the acquisition was $75.6 million, net of cash acquired. The transaction2029 Notes is described in further detail in note 3expected to the Company’s condensed consolidated financial statements.close on April 30, 2021, subject to customary closing conditions.
Cash and cash equivalents were $335.1$548.5 million at March 28, 2020,April 3, 2021, compared with cash and cash equivalents of $351.9$580.9 million at December 31, 2019.2020. The Company had outstanding long-term debt (excluding current maturities) of $1,078.9$1,086.2 million at March 28, 2020,April 3, 2021, compared to $936.5$1,085.8 million at December 31, 2019.2020.
Critical Accounting Policies
Management’s discussion and analysis of financial condition and results of operations are based upon the Company’s condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these condensed consolidated financial statements requires the Company to
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make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.
The critical accounting policies affected most significantly by estimates, assumptions and judgments used in the preparation of the Company’s condensed consolidated financial statements are described in Item 7 of its Annual Report on Form 10-K for the year ended December 31, 20192020, filed with the Securities and Exchange Commission.Commission on February 5, 2021. On an ongoing basis, the Company evaluates the critical accounting policies used to prepare its condensed consolidated financial statements, including, but not limited to, those related to impairment of long-lived assets, goodwill, income taxes and business acquisitions. There have been no material changes in these aforementioned critical accounting policies.
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Three Months Ended March 28, 2020April 3, 2021 Compared to Three Months Ended March 30, 2019 and Three Months Ended December 31, 201928, 2020
The following table compares operating results for the three months ended April 3, 2021 and March 28, 2020 with results for the three months ended March 30, 2019 and three months ended December 31, 2019 both in dollars and as a percentage of net sales, for each caption.
Three months ended Three months ended
(Dollars in thousands)(Dollars in thousands)March 28, 2020March 30, 2019December 31, 2019(Dollars in thousands)April 3, 2021March 28, 2020
Net salesNet sales$412,327  100.0 %$391,047  100.0 %$426,998  100.0 %Net sales$512,844 100.0 %$412,327 100.0 %
Cost of salesCost of sales226,849  55.0  213,654  54.6  229,362  53.7  Cost of sales277,858 54.2 226,849 55.0 
Gross profitGross profit185,478  45.0  177,393  45.4  197,636  46.3  Gross profit234,986 45.8 185,478 45.0 
Selling, general and administrative expensesSelling, general and administrative expenses58,891  14.3  82,254  21.0  67,171  15.7  Selling, general and administrative expenses71,389 13.9 58,891 14.3 
Engineering, research and development expensesEngineering, research and development expenses29,632  7.2  28,991  7.4  30,352  7.1  Engineering, research and development expenses37,748 7.4 29,632 7.2 
Amortization of intangible assetsAmortization of intangible assets16,211  3.9  18,657  4.8  16,028  3.8  Amortization of intangible assets11,871 2.3 16,211 3.9 
Operating incomeOperating income80,744  19.6  47,491  12.1  84,085  19.7  Operating income113,978 22.2 80,744 19.6 
Interest expenseInterest expense10,559  2.6  10,884  2.8  13,375  3.1  Interest expense11,652 2.3 10,559 2.6 
Interest incomeInterest income(321) (0.1) (1,225) (0.3) (632) (0.1) Interest income(71)— (321)(0.1)
Other expense (income), net878  0.2  (248) (0.1) 248  0.1  
Other expense, netOther expense, net4,330 0.8 878 0.2 
Income before income taxesIncome before income taxes69,628  16.9  38,080  9.7  71,094  16.6  Income before income taxes98,067 19.1 69,628 16.9 
Income tax expenseIncome tax expense8,622  2.1  5,422  1.4  13,656  3.2  Income tax expense13,391 2.6 8,622 2.1 
Net incomeNet income$61,006  14.8 %$32,658  8.4 %$57,438  13.5 %Net income$84,676 16.5 %$61,006 14.8 %
Net sales For the three months ended March 28, 2020,April 3, 2021, net sales increased by 5%24% to $412.3$512.8 million, compared to $391.0$412.3 million for the three months ended March 30, 2019.28, 2020. An analysis of the factors underlying the increase in net sales is presented in the following table:
(In thousands)
Net sales in the quarter ended March 30, 201928, 2020$391,047412,327 
Increase, net associated with acquired businesses and divestitures15,380 
Increase associated with volume, pricing and mix6,20991,865 
DecreaseIncrease associated with effect of foreign currency translation(309)5,411 
Increase associated with acquired businesses3,241 
Net sales in the quarter ended March 28, 2020April 3, 2021$412,327512,844 
The Company’s sales increase was primarily duebenefited from strong industry conditions, several node transitions and strong overall demand for the Company’s products and solutions compared to the year-ago quarter. Total net sales also reflected net sales associated with the Company’s recent acquisitions of $15.4$3.2 million offset by unfavorableand favorable foreign currency translation effects of $0.3$5.4 million. Sales also increased from an increased customer demand from the semiconductor market compared to the year-ago quarter.
Sales percentage onOn a geographic basis, sales percentage by customers’ country or region for the three months ended April 3, 2021 and March 28, 2020 and March 30, 2019 and the percentage increase (decrease) in sales for the three months ended March 28, 2020April 3, 2021 compared to the sales for the three months ended March 30, 201928, 2020 were as follows:
Three months ended
April 3, 2021March 28, 2020Percentage increase (decrease) in sales
North America23 %25 %18 %
Taiwan20 %22 %10 %
China16 %11 %83 %
South Korea14 %13 %30 %
Japan14 %13 %28 %
Europe%%14 %
Southeast Asia%%(5 %)
The increase in sales to customers in North America, Taiwan, South Korea, Japan and China was primarily driven by a general increase in demand for products in all three of the Company’s segments. The increase in sales from Europe primarily relates to higher sales of Advanced Materials Handling products. The decrease in sales from Southeast Asia primarily relates to lower demand for products from our SCEM segment.
Gross profit The Company’s gross profit increased 27% for the three months ended April 3, 2021 to $235.0 million, compared to $185.5 million for the three months ended March 28, 2020. The Company experienced a 45.8% gross margin rate for the
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Three months ended
March 28, 2020March 30, 2019Percentage increase (decrease) in sales
Taiwan22 %21 %13 %
North America25 %23 %11 %
South Korea13 %16 %(9)%
Japan13 %12 %16 %
China11 %12 %(2)%
Europe%%(1)%
Southeast Asia%%%
The increase in sales for Taiwan was primarily driven by demand for our Advanced Materials Handling products. The increase in sales for North America was primarily driven by sales from recent acquisitions. The increase in sales from Japan was primarily driven by demand for our Specialty Chemicals and Engineered Materials products. The decrease in sales from South Korea is due to decline in demand for our Microcontamination Control products.
Sales were down $14.7 million, or 3% on a sequential basis over sales of $427.0 million for the fourth quarter of 2019, including unfavorable foreign currency translation effects of $0.1 million and sales associated attributable to an acquired business of $2.0 million. The decrease in revenue resulted from decreased customer demand from the semiconductor market compared to the previous quarter.
Gross profit The Company’s gross profit increased 5% for the three months ended March 28, 2020 to $185.5 million,April 3, 2021, compared to $177.4 million for the three months ended March 30, 2019. The Company experienced a 45.0% gross margin rate for the three months ended March 28, 2020, compared to 45.4% in the comparable year-ago period. The gross profit increase reflects the increase in sales, and the gross margin decrease reflects lower-than-expected volumes. The gross profit and gross margin figures include an incremental cost of sales charge of $0.4 million and $2.2 million, respectively,increases reflect higher factory utilization associated with the sale of inventory acquired in recent business acquisitions for the three months ended March 28, 2020higher sales levels and March 30, 2019. Based in part on the potential impact of the COVID-19 pandemic and ensuing governmental responses on production, productivity and increased freight expenses, we anticipate that our gross margin rate will decline slightly in the second quarter of 2020.a favorable sales mix.
Selling, general and administrative expenses (SG&A)SG&A expenses were $58.9$71.4 million forin the three months ended March 28, 2020, down $23.4April 3, 2021, compared to $58.9 million or 28%, fromin the comparable three-month period a year earlier.year-ago period. An analysis of the factors underlying the decreasechange in SG&A expenses is presented in the following table:
(In thousands)
Selling, general and administrative expenses in the quarter ended March 30, 2019$82,254 
Deal and transaction costs(17,705)
Integration costs(2,872)
Employee costs(3,371)
Travel costs(734)
Professional fees812 
Other increases, net507 
Selling, general and administrative expenses in the quarter ended March 28, 2020$58,891 
Employee costs12,687 
Integration costs1,996 
Deal and transaction costs(1,431)
Other decreases, net(754)
Selling, general and administrative expenses in the quarter ended April 3, 2021$71,389 
The deal and transactions costs were $17.7 million lower in the three months ended March 28, 2020 compared to the three month ended March 30, 2019, mainly due to the deal costs associated with the terminated merger of the Versum transaction.
Engineering, research and development expenses The Company’s engineering, research and development, (ER&D)or ER&D, efforts focus on the support or extension of current product lines and the development of new products and manufacturing technologies. ER&D expenses were $29.6$37.7 million in the three months ended March 28, 2020April 3, 2021 compared to $29.0$29.6 million in the year-ago period. An analysis of the factors underlying the increase in ER&D is presented in the following table:
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(In thousands)
Engineering, research and development expenses in the quarter ended March 30, 2019$28,991 
Depreciation costs653 
Employee costs(209)
Other decreases, net197 
Engineering, research and development expenses in the quarter ended March 28, 2020$29,632 
Employee costs5,640 
Project materials1,835 
Other increases, net641 
Engineering, research and development expenses in the quarter ended April 3, 2021$37,748 
Amortization expenses Amortization of intangible assets was $16.2$11.9 million in the three months ended March 28, 2020April 3, 2021, compared to $18.7$16.2 million for the three months ended March 30, 2019.28, 2020. The decrease primarily reflects the elimination of amortization expense of $4.3$5.0 million for an identifiable backlog intangible assetassets acquired in the Saes Pure Gas business (SPG) acquisitionacquisitions that became fully amortized in the second quarter of 2019,previous periods, partially offset by additional amortization expense of $2.6$0.5 million associated with recent acquisitions.
Interest income Interest income was $0.3 million in the three months ended March 28, 2020, compared to $1.2 million in the three months ended March 30, 2019. The decrease in interest income for the three months ended March 28, 2020 compared to the previous year period was due to lower average cash levels earning a lower interest rate.
Interest expense Interest expense includes interest associated with debt outstanding and the amortization of debt issuance costs associated with such borrowings. Interest expense was $11.7 million in the three months ended April 3, 2021, compared to $10.6 million in the three months ended March 28, 20202020. The increase primarily reflects higher average debt levels.
Interest income Interest income was $0.1 million in the three months ended April 3, 2021, compared to $10.9$0.3 million in the three months ended March 30, 2019.28, 2020. The decrease primarily reflects lower average interest rates on the senior secured term loan facility, partially offset by higher average debt levels on the revolving facility.rates.
Other expense, (income), net Other expense, net was $4.3 million in the three months ended April 3, 2021 and consisted mainly of foreign currency transaction losses of $4.3 million. Other expense, net was $0.9 million in the three months ended March 28, 2020 and consisted mainly of foreign currency transaction losses of $0.6 million. Other income, net was $0.2 million in the three months ended March 30, 2019 and consisted mainly of foreign currency transaction gains of $0.7 million, partially offset by $0.4 million charges of third-party costs associated with the amendment of the credit agreement.
Income tax expense Income tax expense was $13.4 million in the three months ended April 3, 2021, compared to income tax expense of $8.6 million in the three months ended March 28, 2020, compared to income tax expense of $5.4 million in the three months ended March 30, 2019.respectively. The Company’s year-to-date effective tax rate at April 3, 2021 was 12.4% in 2020,13.7%, compared to 14.2% in 2019. 12.4% at March 28, 2020.
The year-to-date income tax expense infor the three months ended April 3, 2021 and March 28, 2020 and 2019 includesinclude discrete benefits of $5.0$7.5 million and $2.8$5.0 million, respectively, recorded in connection with share-based compensation. The decreaseincrease in the effective tax rate from 20192020 to 20202021 primarily relates to decreased accrued withholding taxes due to a portionvaluation allowance on federal foreign tax credits generated in 2021 of the Company’s foreign earnings being permanently reinvested in 2020 and an increase in the federal research and development credit.$1.4 million.
Net income Due to the factors noted above, the Company recorded net income of $84.7 million, or $0.62 per diluted share, in the three-month period ended April 3, 2021, compared to net income of $61.0 million, or $0.45 per diluted share, in the three-month periodthree months ended March 28, 2020, compared to net income of $32.7 million, or $0.24 per diluted share, in the three-month period ended March 30, 2019.2020. In the three-month periodthree months ended March 28, 2020,April 3, 2021, net income, as a percentage of net sales, increased to 14.8%16.5% from 8.4%14.8% in the year-ago period.
Non-GAAP Financial Measures The Company’s condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States, (GAAP).or GAAP. The Company also utilizes certain non-GAAP financial measures as a complement to financial measures provided in accordance with GAAP in order to better assess and reflect trends affecting the Company’s business and results of operations. See the section “Non-GAAP Information” included
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below in this section for additional detail, including the definition of certain non-GAAP financial measures and the reconciliation of these non-GAAP measures to the Company’s GAAP measures.
The Company’s principal non-GAAP financial measures are Adjusted EBITDA and Adjusted Operating Income, together with related measures thereof, and non-GAAP Earnings Per Share.
Adjusted EBITDA increased 10.5%25% to $150.1 million in the three months ended April 3, 2021, compared to $120.3 million in the three-month periodthree months ended March 28, 2020, compared to $108.9 million in the three-month period ended March 30, 2019.2020. In the three month-periodmonths ended March 28, 2020,April 3, 2021, Adjusted EBITDA, as a percentage of net sales, increasedwas flat at 29% compared to 29.2% from 27.8% in the year-ago period.
Adjusted Operating Income increased 8.1%29% to $128.0 million in the three months ended April 3, 2021, compared to $99.6 million in the three-month periodthree months ended March 28, 2020, compared to $92.2 million in the three-month period ended March 30, 2019.2020. Adjusted Operating Income, as a percentage of net sales, increased to 24.2%25% from 23.6%24% in the year-ago period.
Non-GAAP Earnings Per Share wasincreased 27% to $0.70 in the three months ended April 3, 2021, compared to $0.55 in the three-month periodthree months ended March 28, 2020, compared2020.
The increases in adjusted EBITDA, adjusted operating income and non-GAAP earnings per share are generally attributable to $0.50the increases in the three-month period ended March 30, 2019.sales and gross profit.
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Segment Analysis
The Company reports its financial performance based on three reporting segments. The following is a discussion of the results of operations of these three business segments. See note 98 to the condensed consolidated financial statements for additional information on the Company’s three segments.
The following table presents selected net sales and segment profit data for the Company’s three reportable segments, along with unallocated general and administrative expenses, for the three months ended April 3, 2021 and March 28, 2020 and March 30, 2019.2020.
Three months ended Three months ended
(In thousands)(In thousands)March 28, 2020March 30, 2019(In thousands)April 3, 2021March 28, 2020
Specialty Chemicals and Engineered MaterialsSpecialty Chemicals and Engineered MaterialsSpecialty Chemicals and Engineered Materials
Net salesNet sales$144,214  $124,470  Net sales$166,541 $144,214 
Segment profitSegment profit32,670  24,431  Segment profit34,556 32,670 
Microcontamination ControlMicrocontamination ControlMicrocontamination Control
Net salesNet sales$159,261  $157,706  Net sales$207,099 $159,261 
Segment profitSegment profit50,167  47,323  Segment profit70,566 50,167 
Advanced Materials HandlingAdvanced Materials HandlingAdvanced Materials Handling
Net salesNet sales$116,137  $116,064  Net sales$148,541 $116,137 
Segment profitSegment profit20,632  22,367  Segment profit32,095 20,632 
Unallocated general and administrative expensesUnallocated general and administrative expenses$11,368 $6,514 
Specialty Chemicals and Engineered Materials (SCEM)
For the first quarter of 2020,2021, SCEM net sales increased to $144.2$166.5 million, compared to $124.5$144.2 million in the comparable period last year. The sales increase was due to increased sales of advanced deposition materials, cleaning chemistries, specialty gases and additional sales of $12.4 million attributable to the acquisitions of DSC in the first quarter of 2019, MPD in the third quarter of 2019 and Sinmat in the first quarter of 2020.advanced coatings. SCEM reported a segment profit of $32.7$34.6 million in the first quarter of 2020,2021, up 34%6% from $24.4$32.7 million in the year-ago period. The segment profit increase was primarily due to higher gross profit related to the increased sales volume, partially offset by a 5%17% increase in operating expenses, primarily due to recent acquisitions.higher compensation costs.

Microcontamination Control (MC)
For the first quarter of 2020,2021, MC net sales increased to $159.3$207.1 million, compared to $157.7$159.3 million in the comparable period last year. The sales increase was mainly due to improved sales from liquid filtration and gas filtration products and additional sales of $3.0 million attributable to the acquisition of Anow in the third quarter of 2019, partially offset by weakened sales from gas purification products. MC reported a segment profit of $50.2$70.6 million in the first quarter of 2020,2021, up 6%41% from $47.3$50.2 million in the year-ago period. The segment profit improvement was primarily due to higher gross profit related to the increased sales volume and favorable product mix, partially offset by a decrease24% increase in operating expenses of 1%.due to higher compensation costs.
Advanced Materials Handling (AMH)
For the first quarter of 2020,2021, AMH net sales were flat at $116.1increased to $148.5 million, compared to $116.1 million in the comparable period last year. The sales increase was mainly due to improved sales from all major semi-related product platforms, sales of our Aramus high purity bags, as well as additional sales of $2.7 million attributable to the acquisition of Global Measurement
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Technologies, Inc., or GMTI, in the third quarter of 2020. AMH reported a segment profit of $20.6$32.1 million in the first quarter of 2020, down 8%2021, up 56% from $22.4$20.6 million in the year-ago period. The segment profit decreaseincrease was primarily due to lower gross profit related tohigher sales volume and favorable product mix, and volume, partially offset by a 9% decrease16% increase in operating expenses primarily due to lower spending and restructuring initiatives from the previous year.higher compensation costs.
Unallocated general and administrative expenses
Unallocated general and administrative expenses totaled $6.5$11.4 million in the first quarter of 2020,2021, compared to $28.0$6.5 million in the comparable period last year. The $21.5$4.9 million decreaseincrease mainly reflects a $20.6$5.1 million decreaseincrease in deal and transaction costs and integration costs referenced in the discussion of SG&A above.employee costs.
Liquidity and Capital Resources
We consider the following when assessing our liquidity and capital resources:
In thousandsIn thousandsMarch 28, 2020December 31, 2019In thousandsApril 3, 2021December 31, 2020
Cash and cash equivalentsCash and cash equivalents$335,077  $351,911  Cash and cash equivalents$548,520 $580,893 
Working capitalWorking capital764,316  667,964  Working capital978,335 931,631 
Total debtTotal debt1,078,888  936,484  Total debt1,086,186 1,085,783 
The Company has historically financed its operations and capital requirements through cash flow from its operating activities, long-term loans, lease financing and borrowings under domestic and international short-term lines of credit. Although thereOn April 16, 2021, we agreed to sell $400 million of our 2029 Notes. The sale of the 2029 Notes is
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uncertaintythe offering, together with cash on hand and approximately $75 million borrowed under the Revolving Facility, to pay the redemption price for the redemption in full of the 2026 Notes and to pay certain fees and expenses related to the anticipatedoffering. The redemption of the 2026 Notes is conditioned on the Company’s receipt of $400 million of proceeds from a new offering of unsecured notes, such as the 2029 Notes.
Although there is uncertainty regarding the impact of the recent COVID-19 outbreakpandemic on the Company’s future results, we believe our business model and our current cash reserves and the recent steps we have taken to strengthen our balance sheet, such as drawing down a significant portion of our Revolving Facility, will help us to manage our business through this crisis as we expect it continues to unfold.We have reviewed numerous potential scenarios in connection with the impact of COVID-19 on the global economy and the semiconductor industry.Based on our analysis, we believe our existing balances of domestic cash and cash equivalents and our currently anticipated operating cash flows, after taking into account the anticipated issuance of the 2029 Notes and the use of net proceeds, cash on hand and borrowings to fund the redemption of the 2026 Notes, will be sufficient to meet our cash needs arising in the ordinary course of business for the next twelve months. Asmonths and for the opportunity arises, welonger term.
We may seek to take advantage of opportunities to raise additional capital through additional debt financing or through public or private sales of securities.If in the future our available liquidity is not sufficient to meet the Company’s operating and debt service obligations as they come due, management would need to pursue alternative arrangements through additional equity or debt financing in order to meet the Company’s cash requirements. There can be no assurance that any such financing would be available on commercially acceptable terms, or at all. To date, in fiscal 2020,2021, we have not experienced difficulty accessing the capital and credit markets;markets as evidenced by our recent announcement of our $400 million note offering; however, future volatility in the capital and credit markets may increase costs associated with issuing debt instruments or affect our ability to access those markets. In addition, it is possible that our ability to access the capital and credit markets could be limited at a time when we would like, or need, to do so, which could have an adverse impact on our ability to refinance maturing debt and/or react to changing economic and business conditions.
In summary, our cash flows for each period were as follows:
Three months endedThree months ended
(in thousands)(in thousands)March 28, 2020March 30, 2019(in thousands)April 3, 2021March 28, 2020
Net cash provided by (used in) operating activities$11,403  $(2,538) 
Net cash provided by operating activitiesNet cash provided by operating activities$53,115 $11,403 
Net cash used in investing activitiesNet cash used in investing activities(98,210) (84,057) Net cash used in investing activities(43,258)(98,210)
Net cash provided by (used in) financing activities71,685  (52,851) 
Net cash (used in) provided by financing activitiesNet cash (used in) provided by financing activities(39,375)71,685 
Decrease in cash and cash equivalentsDecrease in cash and cash equivalents$(16,834) $(139,702) Decrease in cash and cash equivalents(32,373)(16,834)
Operating activities
Cash provided by operating activities is net income adjusted for certain non-cash items and changes in assets and liabilities. Cash flows provided by operating activities totaled $53.1 million in the three months ended April 3, 2021, compared to $11.4 million in the three months ended March 28, 2020 compared to cash flows used in operating activities of $2.5 million in the three months ended March 30, 2019.2020. The increase in cash provided by operating activities was primarily due to higher net income and changesa lower net change in working capital and other assets and liabilities. The net change in
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working capital and other assets and liabilities resulted in a decrease to cash provided by (used in) operations of $80.8 million for the three months ended April 3, 2021 compared to a decrease of $97.0 million for the three months ended March 28, 2020 compared to a decrease of $80.9 million for the three months ended March 30, 2019.2020.
Changes in working capital and other assets and liabilities for the three months ended March 28, 2020April 3, 2021 were driven primarily by increases in inventories, accounts receivable and inventories, partially offset by a decreaseaccounts payable and decreases in income taxes payable.accrued liabilities. The change for accounts receivable was primarily due to the Company's quarter closing date occurring several days prior to the endtiming of the calendar month, the period during which receivable collections are typically heavy, particularly for the Company's Asia operations as compared to the three months ended March 30, 2019.collections. The change for inventory is due towas driven by an increase in raw material purchases to provide a buffer related to any potential supply chain issues related to COVID-19.business activity. The change relatedfor accounts payable and accrued liabilities was primarily driven by a higher accounts payables due to incomes taxes reflects lower income taxtiming of payments and higher accrued bonuses in 2021, partially offset by a higher payment of the three-month period ended March 28, 2020 compared to the three-month period March 30, 2019.previous year incentive compensation.
Investing activities Cash flows used in investing activities totaled $43.3 million in the three months ended April 3, 2021, compared to $98.2 million in the three-month periodthree months ended March 28, 2020 compared to cash flows used in investing activities of $84.1 million in the three-month period ended March 30, 2019.2020. The change was due to lowerless cash paid for acquisitions andof businesses, partially offset by higher cash paid for acquisition of property, plant and equipment.
Acquisition of property, plant and equipment totaled $43.3 million in the three months ended April 3, 2021, which primarily reflected investments in equipment and tooling, compared to $22.6 million in the three-month periodthree months ended March 28, 2020, which primarily reflected investments in equipment and tooling compared to $34.5 million intooling.
In the three-month periodthree months ended March 30, 2019, which primarily reflected investment in equipment and tooling.
On January 10,28, 2020, the Company acquired Sinmat, a CMP slurry manufacturer. Sinmat reports into the Specialty Chemicals and Engineered Material segment of the Company.Sinmat. The cash used to acquire Sinmat for the three-month periodthree months ended March 28, 2020 was $75.6 million, net of cash acquired. The transaction is described in further detail in note 3 to the Company’s condensed consolidated financial statements.
In the three-month period ended March 30, 2019, the Company acquired Digital Specialty Chemicals Limited (DSC), which provides advanced materials to the specialty chemical, technology and pharmaceutical industries. The cash used to acquire DSC for the three-month period ended March 30, 2019 was $49.8 million, net of cash acquired. The transaction is described in further detail in note 3 to the Company’s condensed consolidated financial statements.
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As of March 28, 2020,April 3, 2021, the Company expects its full-year capital expenditures in 20202021 to be approximately $120.0 million.$225.0 million for growth capacity investments and the initial phase of the previously announced investment in our new facility in Taiwan. As of March 28, 2020,April 3, 2021, the Company had outstanding capital purchase obligations of $32.3$55.5 million for the construction or purchase of plant and equipment not yet recorded in the Company’s condensed consolidated financial statements as the Company had not yet received the related goods or property.property as of such date.
Financing activities Cash flows provided byused in financing activities totaled $39.4 million during the three months ended April 3, 2021, compared to $71.7 million during the three-month periodthree months ended March 28, 2020 compared to cash flows used in financing activities of $52.9 million during the three-month period ended March 30, 2019.2020. The change was primarily due to absence of net long-termshort-term debt activity which wasduring the three months ended April 3, 2021, compared to a net source of cash of $142.0 million in the three-month period ended March 28, 2020 compared to a use of cash of $1.0 million in the comparable period in 20192020, and a $5.8$3.6 million decreaseincrease in cash used to pay taxes for net share settlements of repurchasesequity awards, offset in part by the absence of common stock, partially offset by a $16.1 million deferred acquisition payment in the three-month period ended March 28, 2020 related to our DSC acquisition. In Marchacquisition of Digital Specialty Chemicals in 2020 and a decrease of $14.6 million in repurchases of the Company suspended its share repurchase program.Company’s common stock.
Our total dividend payments were $10.9 million in the three-month periodthree months ended April 3, 2021, compared to $10.8 million in the three months ended March 28, 2020 compared to $9.5 million in three-month period ended March 30, 2019.2020. We have paid a cash dividend in each of the past 1014 quarters. On April 15, 2020,14, 2021, the Board declared a quarterly cash dividend of $0.08 per share of common stock, payable on May 20, 202019, 2021 to stockholders of record on April 29, 2020.28, 2021.
Other Liquidity and Capital Resources Considerations
The Company’s Term Loan Facility has a principal amount of $396 million outstanding that matures on November 6, 2025 and
bears bore interest rate at a 3.61%rate per annum of 2.1% at March 28, 2020.April 3, 2021. As of April 3, 2021, the aggregate principal amount outstanding under the Term Loan Facility was $145.0 million.
The Company’s Revolving Facility has a senior secured revolving commitment facilityprovides for lending commitments in an aggregate principal amount of $300up to $300.0 million,
maturing on November 6, 2023. The Revolving Facility bears interest at a rate per annum equal to, at the Company’s
option, either a base rate (such as prime rate) or LIBOR plus, in each case, an applicable margin. In connection with our issuance of the 2029 Notes, we intend to amend the Revolving Facility to provide for lending commitments in an aggregate principal amount of up to $400.0 million and to extend the maturity to April 30, 2026. At March 28, 2020, $142.0 million isApril 3, 2021, there was no balance outstanding under the Revolving Facility and we had undrawn outstanding letters of credit of $0.2 million.
We have $550As of April 3, 2021, we had $550.0 million aggregate principal amount of 4.625%2026 Notes and $400.0 million aggregate principal amount of 4.375% senior unsecured notes due February 10, 2026April 15, 2028 outstanding.
Through March 28, 2020,April 3, 2021, the Company was in compliance with all applicable financial covenants included in the terms of
under its credit facilities.
The Company also has linesa line of credit with two banksone bank that provideprovides for borrowings of Japanese yen for the Company’s Japanese subsidiary, equivalent to an aggregate of approximately $11.1$9.0 million. There were no outstanding borrowings under these linesthis line of credit at March 28, 2020.April 3, 2021.
As of March 28, 2020,April 3, 2021, the Company’s sources of available funds were its cash and cash equivalents of $335.1$548.5 million,
funds available under the Revolving Facility and international credit facilities and cash flow generated from operations. As of
March 28, 2020, April 3, 2021, the amount of cash and cash equivalents held in certain of our foreign operations totaled approximately
$201.5 $376.6 million. If we repatriate such funds, we will be required to pay income taxes in certain U.S. states and applicable foreign withholding taxes
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on those amounts during the period when such repatriation occurs. We have accrued taxes for the tax effect of repatriating the funds to the U.S. After March 28, 2020, to further increase domestic liquidity the Company repatriated approximately $38.0 million in cash from foreign jurisdictions back to the U.S.United States.
Off-Balance Sheet Arrangements
As of March 28, 2020,April 3, 2021, we did not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.
Contractual Obligations
There have been no significant changes to the contractual obligations reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, except for long-term debt. Long-term debt increased an additional $142 million during the quarter for borrowings on our Revolving Facility due 2023.2020.
Recently adopted accounting pronouncements Refer to note 1 to the Company’s condensed consolidated financial statements for a discussion of recently adopted accounting pronouncements recently adopted.pronouncements.
Recently issued accounting pronouncements Refer to note 1 to the Company’s condensed consolidated financial statements for a discussion of accounting pronouncements recently issued but not yet adopted.adopted accounting pronouncements.
Non-GAAP Information The Company’s condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (GAAP).GAAP.
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The Company also providesutilizes certain non-GAAP financial measures as a complement to financial measures provided in accordance with GAAP in order to better assess and reflect trends affecting the Company’s business and results of operations. These non-GAAP financial measures include Adjusted EBITDA and Adjusted Operating Income, together with related measures thereof, and non-GAAP Earnings Per Share, (EPS), as well as certain other supplemental non-GAAP financial measures included in the discussion of the Company’s financial results.
Adjusted EBITDA, a non-GAAP financial measure, is defined by the Company as net income before, as applicable, (1) income tax expense, (2) interest expense, (3) interest income, (4) other (income) expense, (income), net, (5) charge for fair value write-up of acquired inventory sold, (6) deal and transaction costs, (7) integration costs, (8) severance and restructuring costs, (9) amortization of intangible assets and (10) depreciation. Adjusted Operating Income, another non-GAAP financial measure, is defined by the Company as Adjusted EBITDA exclusive of the depreciation addback noted above. The Company also utilizes non-GAAP financial measures whereby Adjusted EBITDA and Adjusted Operating Income are each divided by the Company’s net sales to derive Adjusted EBITDA Margin and Adjusted Operating Margin, respectively.
Non-GAAP EPS, a non-GAAP financial measure, is defined by the Company as net income before, as applicable, (1) charge for fair value write-up of acquired inventory sold, (2) deal and transaction costs, (3) integration costs, (4) severance and restructuring costs, (5) loss on debt extinguishment, (6) amortization of intangible assets, (7) tax effect of legal entity restructuring and (6)(8) the tax effect of thosethe foregoing adjustments to net income, stated on a per share basis.
The Company provides supplemental non-GAAP financial measures to help management and investors to better understand its business and believes these measures provide investors and analysts additional and meaningful information for the assessment of the Company’s ongoing results. Management also uses these non-GAAP measures to assist in the evaluation of the performance of itsthe Company’s business segments and to make operating decisions.
Management believes the Company’s non-GAAP measures help indicate the Company’s baseline performance before certain gains, losses or other charges that may not be indicative of the Company’s business or future outlook and offer a useful view of business performance in that the measures provide a more consistent means of comparing performance. The Company believes the non-GAAP measures aid investors’ overall understanding of the Company’s results by providing a higher degree of transparency for such items and providing a level of disclosure that will help investors understand how management plans, measures and evaluates the Company’s business performance. Management believes that the inclusion of non-GAAP measures provides greater consistency in its financial reporting and facilitates investors’ understanding of the Company’s historical operating trends by providing an additional basis for comparisons to prior periods.
Management uses Adjusted EBITDA and Adjusted Operating Income to assist it in evaluations of the Company’s operating performance by excluding items that management does not consider as relevant in the results of its ongoing operations. Internally, these non-GAAP measures are used by management for planning and forecasting purposes, including the preparation of internal budgets; for allocating resources to enhance financial performance; for evaluating the effectiveness of operational strategies; and for evaluating the Company’s capacity to fund capital expenditures, secure financing and expand its business.
In addition, and as a consequence of the importance of these non-GAAP financial measures in managing its business, the Company’s Board of Directors uses non-GAAP financial measures in the evaluation process to determine management compensation.
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The Company believes that certain analysts and investors use Adjusted EBITDA, Adjusted Operating Income and non-GAAP EPS as supplemental measures to evaluate the overall operating performance of firms in the Company’s industry. Additionally, lenders or potential lenders use Adjusted EBITDA measures to evaluate the Company’s creditworthiness.
The presentation of non-GAAP financial measures is not meant to be considered in isolation, as a substitute for, or superior to, financial measures or information provided in accordance with GAAP. Management strongly encourages investors to review the Company’s condensed consolidated financial statements in their entirety and to not rely on any single financial measure.
Management notes that the use of non-GAAP measures has limitations:limitations, including but not limited to:
First, non-GAAP financial measures are not standardized. Accordingly, the methodology used to produce the Company’s non-GAAP financial measures is not computed under GAAP and may differ notably from the methodology used by other companies. For example, the Company’s non-GAAP measure of Adjusted EBITDA may not be directly comparable to EBITDA or an adjusted EBITDA measure reported by other companies.
Second, the Company’s non-GAAP financial measures exclude items such as amortization and depreciation that are recurring. Amortization of intangibles and depreciation have been, and will continue to be for the foreseeable future, a significant recurring expense with an impact upon the Company’s results of operations, notwithstanding the lack of immediate impact upon cash flows.
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Third, there is no assurance that the Company will not have future charges for fair value write-up of acquired inventory, restructuring activities, deal costs, integration costs, or similar items and, therefore, may need to record additional charges (or credits) associated with such items, including the tax effects thereon. The exclusion of these items in the Company’s non-GAAP measures should not be construed as an implication that these costs are unusual, infrequent or non-recurring.
Management considers these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures and evaluating these non-GAAP financial measures together with their most directly comparable financial measures calculated in accordance with GAAP. The calculations of Adjusted EBITDA, Adjusted Operating Income, and non-GAAP EPS, and reconciliations between these financial measures and their most directly comparable GAAP equivalents, are presented below in the accompanying tables.
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Reconciliation of GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA
Three months endedThree months ended
(In thousands)(In thousands)March 28, 2020March 30, 2019(In thousands)April 3, 2021March 28, 2020
Net salesNet sales$412,327  $391,047  Net sales$512,844 $412,327 
Net incomeNet income$61,006  $32,658  Net income$84,676 $61,006 
Net income - as a % of net salesNet income - as a % of net sales16.5 %14.8 %
Adjustments to net incomeAdjustments to net incomeAdjustments to net income
Income tax expenseIncome tax expense8,622  5,422  Income tax expense13,391 8,622 
Interest expenseInterest expense10,559  10,884  Interest expense11,652 10,559 
Interest incomeInterest income(321) (1,225) Interest income(71)(321)
Other expense (income), net878  (248) 
Other expense, netOther expense, net4,330 878 
GAAP – Operating incomeGAAP – Operating income80,744  47,491  GAAP – Operating income113,978 80,744 
Operating margin -as a % of net salesOperating margin -as a % of net sales22.2 %19.6 %
Charge for fair value write-up of acquired inventory soldCharge for fair value write-up of acquired inventory sold361  2,155  Charge for fair value write-up of acquired inventory sold— 361 
Deal and transaction costsDeal and transaction costs1,431  19,136  Deal and transaction costs— 1,431 
Integration costsIntegration costs48  2,920  Integration costs2,044 48 
Severance and restructuring costsSeverance and restructuring costs843  1,821  Severance and restructuring costs143 843 
Amortization of intangible assetsAmortization of intangible assets16,211  18,657  Amortization of intangible assets11,871 16,211 
Adjusted operating incomeAdjusted operating income99,638  92,180  Adjusted operating income128,036 99,638 
Adjusted operating margin - as a % of net salesAdjusted operating margin - as a % of net sales25.0 %24.2 %
DepreciationDepreciation20,648  16,721  Depreciation22,095 20,648 
Adjusted EBITDAAdjusted EBITDA$120,286  $108,901  Adjusted EBITDA$150,131 $120,286 
Net income - as a % of net sales14.8 %8.4 %
Adjusted operating income – as a % of net sales24.2 %23.6 %
Adjusted EBITDA – as a % of net salesAdjusted EBITDA – as a % of net sales29.2 %27.8 %Adjusted EBITDA – as a % of net sales29.3 %29.2 %
Reconciliation of GAAP Net Income and Earnings per Share to Non-GAAP Net Income and Earnings per Share
Three months endedThree months ended
(In thousands, except per share data)(In thousands, except per share data)March 28, 2020March 30, 2019(In thousands, except per share data)April 3, 2021March 28, 2020
Net incomeNet income$61,006  $32,658  Net income$84,676 $61,006 
Adjustments to net incomeAdjustments to net incomeAdjustments to net income
Charge for fair value write-up of acquired inventory soldCharge for fair value write-up of acquired inventory sold361  2,155  Charge for fair value write-up of acquired inventory sold— 361 
Deal and transaction costsDeal and transaction costs1,431  19,547  Deal and transaction costs— 1,431 
Integration costsIntegration costs48  2,920  Integration costs2,044 48 
Severance and restructuring costsSeverance and restructuring costs843  1,821  Severance and restructuring costs143 843 
Amortization of intangible assetsAmortization of intangible assets16,211  18,657  Amortization of intangible assets11,871 16,211 
Tax effect of adjustments to net income and certain discrete tax items1
Tax effect of adjustments to net income and certain discrete tax items1
(4,329) (9,864) 
Tax effect of adjustments to net income and certain discrete tax items1
(3,221)(4,329)
Non-GAAP net incomeNon-GAAP net income$75,571  $67,894  Non-GAAP net income$95,513 $75,571 
Diluted earnings per common shareDiluted earnings per common share$0.45  $0.24  Diluted earnings per common share$0.62 $0.45 
Effect of adjustments to net incomeEffect of adjustments to net income0.11  0.26  Effect of adjustments to net income0.08 0.11 
Diluted non-GAAP earnings per common shareDiluted non-GAAP earnings per common share$0.55  $0.50  Diluted non-GAAP earnings per common share$0.70 $0.55 
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1The tax effect of pre-tax adjustments to net income was calculated using the applicable marginal tax rate for each respective year.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company’s principal financial market risks are sensitivities to interest rates and foreign currency exchange rates. The Company’s interest-bearing cash equivalents and senior secured financing obligations are subject to interest rate fluctuations. The Company’s cash equivalents are instruments with maturities of three months or less. A 100 basis point change in interest rates would potentially increase or decrease annual net income by approximately $3.1 million and $1.5 million annually.for the quarter ended April 3, 2021 and March 28, 2020.
The cash flows and results of operations of the Company’s foreign-based operations are subject to fluctuations in foreign exchange rates. We have sales denominated in the South Korean Won, New Taiwan Dollar, Chinese Renmibi,Renminbi, Canadian Dollar, Malaysian Ringgit, Singapore Dollar, Euro, Israeli Shekel and the Japanese Yen. Approximately 23.5% and 22.8% of the Company’s 2021 and 2020 sales for the quarters ended April 3, 2021 and March 28, 2020, respectively, are denominated in these currencies.currencies, respectively. Financial results therefore will be affected by changes in currency exchange rates. If all foreign currencies were to seehad experienced a 10% reduction versus the U.S. dollar during the three months ended April 3, 2021 and March 28, 2020, revenue for the quarters would behave been negatively impacted by approximately $12.5 million and $9.4 million.million, respectively.
The Company occasionally uses derivative financial instruments to manage the foreign currency exchange rate risks associated with its foreign-based operations. At March 28, 2020,April 3, 2021, the Company had no net exposure to any foreign currency forward contracts.
Item 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures.
The Company’s management, including the Chief Executive Officer, (CEO)or CEO, and Chief Financial Officer, (CFO),or CFO, has conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, (the 1934or the Exchange Act)) as of March 28, 2020.April 3, 2021. The term “disclosure controls and procedures” means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the companyCompany in the reports that it files or submits under the 1934Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the companyCompany in the reports that it files or submits under the 1934Exchange Act is accumulated and communicated to the company’sCompany’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on management’s evaluation (with the participation of the Company’s CEO and CFO), as of March 28, 2020,April 3, 2021, the Company’s CEO and CFO have concluded that the disclosure controls and procedures used by the Company were effective to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the 1934Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
(b) Changes in internal control over financial reporting.
There has been no change in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the 1934Exchange Act) identified in connection with the foregoing evaluation of disclosure controls and procedures that occurred during the most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
The Company acquired MPD Chemicals (MPD), Hangzhou Anow Microfiltration Co., Ltd. (Anow) and SinmatGMTI on July 15, 2019, September 17, 2019 and January 10, 2020, respectively. None of MPD, Anow and Sinmat2020. GMTI is not significant to the Company’s financial statements. The Company is continuing to integrate MPD, Anow and SinmatGMTI into the Company’s internal control over financial reporting, and the foregoing evaluation of the effectiveness of the Company’s disclosure controls and procedures does not include an assessment of those disclosure controls and procedures of MPD, Anow and SinmatGMTI that are subsumed by internal control over financial reporting.reporting.

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PART II
OTHER INFORMATION
Item 1. Legal Proceedings
As of March 28, 2020,April 3, 2021, the Company is subject to various claims, legal actions, and complaints arising in the ordinary course of business. The Company believes the final outcome of these matters will not have a material adverse effect on its condensed consolidated financial statements. The Company expenses legal costs as incurred.
Item 1A. Risk Factors
This section augments and updates certain risk factors disclosed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2019 (the “Annual Report”). The following risk factors supersede the corresponding risks described in the Annual Report and should be read together with the other risk factors disclosed in the Annual Report. In addition to the other information in this Quarterly Report on Form 10-Q, all of these risk factors should be carefully considered in evaluating us and our common stock. Any of these risks, many of which are beyond our control, could materially and adversely affect our financial condition, results of operations or cash flows, or cause our actual results to differ materially from those projected in any forward-looking statements. We may also face other risks and uncertainties that are not presently known, are not currently believed to be material, or are not identified below because they are common to all businesses. Past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. For more information, see “Cautionary Statements” at the beginning of this Quarterly Report on Form 10-Q.
Risks Related to Our Business and Industry
The COVID-19 pandemic and ensuing governmental responses could materially adversely affect our financial condition and results of operations.
As a result of the COVID-19 pandemic, governmental authorities have implemented and are continuing to implement numerous and constantly evolving measures to try to contain the virus, such as travel bans and restrictions, limits on gatherings, quarantines, shelter-in-place orders, and business shutdowns. We have important manufacturing operations in the U.S., Japan, Korea, China, Malaysia, and Taiwan, all of which have been affected by the outbreak and have taken measures to try to contain it. Measures providing for business shutdowns generally exclude certain essential services, and those essential services commonly include critical infrastructure and the businesses that support that critical infrastructure. While all of our facilities currently remain operational, these measures have impacted and may further impact our workforce and operations, as well as those of our customers, vendors and suppliers. For example, the government of Malaysia has issued an order that significantly reduces the number of employees who can be physically present to operate our Malaysian plant, which has reduced the productivity of that plant. In addition to reduced productivity, the constraints and limits imposed on our operations may slow or diminish our research and development activities and qualification activities with our customers.Although many governmental measures have had specific expiration dates, some of those measures have already been extended more than once; as a result, there is considerable uncertainty regarding the duration of such measures and potential future measures.Restrictions on our manufacturing, support operations or workforce, or similar limitations for our vendors and suppliers, could limit our ability to meet customer demand and could have a material adverse effect on our financial condition and results of operations.Furthermore, restrictions or disruptions of transportation, such as reduced availability of air transport, port closures and increased border controls or closures, have started to result in higher costs and delays, which could harm our profitability, make our products less competitive, or cause our customers to seek alternative suppliers.
The outbreak has significantly increased economic and demand uncertainty. We anticipate that the current outbreak or continued spread of COVID-19 will cause an economic slowdown, and it is possible that it could cause a global recession.
In response to these developments, we have modified our business practices, including restricting employee travel, modifying employee work locations, implementing social distancing and enhanced sanitary measures in our facilities, and cancelling attendance at events and conferences. Many of our suppliers, vendors and service providers have made similar modifications. The resources available to employees working remotely may not enable them to maintain the same level of productivity and efficiency, and these and other employees may face additional demands on their time, such as increased responsibilities resulting from school closures or the illness of family members. While we have experienced only limited absenteeism from those employees who are required to be on-site to perform their jobs, absenteeism may increase in the future and may harm our productivity.Further, our increased reliance on remote access to our information systems increases our exposure to potential cybersecurity breaches. We may take further actions as government authorities require or recommend or as we determine to be in the best interests of our employees, customers, partners and suppliers. There is no certainty that such measures will be sufficient to mitigate the risks posed by the virus, in which case our employees may become sick, our ability to perform critical functions could be harmed, and we may be unable to respond to the needs of our global business.The resumption of normal business operations after such interruptions may be delayed or constrained by lingering effects of COVID-19 on our suppliers, third-party service providers, and/or customers.
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The degree to which COVID-19 impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus and address its impact, and how quickly and to what extent normal economic and operating conditions can resume.Furthermore, the COVID-19 pandemic makes it more difficult for us to forecast demand and provide guidance for the remainder of 2020. Accordingly, any guidance we provide is likely to be less reliable than usual, and actual results are more likely to differ from any such guidance.In light of the foregoing, investors are urged to put the guidance in context and not to place undue reliance on it.
Anticipated declines in the semiconductor industry and worldwide economic conditions, at least in the short term, are likely to cause demand for our products to decrease and to adversely affect our business.
We anticipate declines in industry and worldwide economic conditions at least in the short term, and these declines are likely to adversely affect our business for a period of time. We expect that the COVID-19 pandemic will cause an economic slowdown, and it is possible that it could cause a global recession or other adverse economic conditions across the world. In the event of a recession or other downturn in the worldwide economy, demand for our products would decline and our business would be adversely effected.Our revenue is primarily dependent upon demand from semiconductor manufacturers, which is largely driven by the current and anticipated demand for electronic products that utilize semiconductors. Despite recent increases in demand for semiconductors in applications such as smartphones, cloud computing, the Internet of Things, and artificial intelligence, the semiconductor industry has historically been, and is likely to continue to be, highly cyclical with periodic significant downturns, resulting in significantly decreased demand for products such as ours. We have previously experienced significant revenue deterioration and operating losses due to severe downturns in the semiconductor industry, which often occur suddenly. The semiconductor industry is also affected by seasonal shifts in demand. Although we currently anticipate an economic downturn in the near term as a result of the COVID-19 pandemic, we are unable to predict its duration or severity, nor are we able to predict the timing, duration or severity of any future downturns in the semiconductor industry. As a result, we could underperform the market or our peers.
During downturns and periods of soft demand, our revenue is reduced, and we typically experience greater pricing pressure and shifts in product and customer mix, which often adversely affect our gross margin and net income. Even moderate seasonality can cause our operating results to fluctuate significantly from one period to the next. Uncertain and volatile economic, political, public health or business conditions in any of our key sales regions can cause or exacerbate negative trends in business and consumer spending and have historically impacted customer demand for our products. These conditions can cause material adverse changes in our results of operations and financial condition, including:
a decline in demand for our products, which, given our limited backlog, will have an immediate impact on our revenues;
an increase in reserves for accounts receivable due to our customers’ inability to pay us;
lower utilization of our manufacturing facilities, which could lead to lower margins;
an increase in write-offs for excess or obsolete inventory that we cannot sell;
potential impairment charges relating to goodwill, intangible assets, manufacturing equipment or other long-lived assets, to the extent that any downturn indicates that the carrying amount of the asset may not be recoverable;
greater challenges in forecasting operating results, making business decisions, and identifying and prioritizing business risks; and
additional cost reduction efforts, including additional restructuring activities, which may adversely affect our ability to capitalize on opportunities.
We anticipate that the COVID-19 pandemic will likely cause us to experience at least some of these adverse changes, but we cannot predict the degree to which they will occur. They may be more severe than we currently expect; for example, recent bookings of orders may be attributable to customers increasing their inventory to reduce their exposure to risks of future supply disruptions, which could be an offset to future demand for our products. Furthermore, to remain competitive, we must maintain a satisfactory level of engineering, research and development, invest in our infrastructure and maintain the ability to respond to any increases in demand and, as a result, a lower volume of sales can have a large and disproportionate impact on our profitability.
Our revenues and operating results are variable.
Our revenues and operating results may fluctuate significantly from quarter to quarter or year to year due to a number of factors, many of which are outside our control. We manage our expenses based in part on our expectations of future revenues. Because some of our expenses are relatively fixed in the short term, a change in the timing of revenue or the amount of profit we generate from a small number of transactions can unfavorably affect operating results in a particular period. Factors that may cause our financial results to fluctuate unpredictably include:
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economic conditions in the semiconductor industry or in the other industries we serve;
the impact of the COVID-19 pandemic on the global economy, the semiconductor industry, our manufacturing capabilities or our supply chain;
the size and timing of customer orders;
consolidation of our customers could impact their purchasing decisions and negatively affect our revenues;
procurement shortages;
the failure of our suppliers or outsource providers to perform their obligations;
manufacturing difficulties;
additional expenses we would expect to incur in our efforts to respond promptly to any supply shortages, manufacturing difficulties or other vendor problems;
decisions to increase or accelerate our purchasing of raw materials, components or other supplies in an effort to mitigate supply risk;
customer cancellations of or delays in shipments, installations or customer acceptances or, alternatively, acceleration of orders from customers to increase their inventory;
our customers’ rate of replacement of our consumable products;
changes in average selling prices, customer mix, and product mix;
our ability to develop, introduce, and market new, enhanced, and competitive products in a timely manner;
our competitors’ introduction of new products;
legal or technical challenges to our products or technologies;
disruptions in transportation, communication, demand, information technology, or supply, including strikes, acts of God, wars, terrorist activities, and natural or man-made disasters;
legal, tax, accounting, or regulatory changes (including changes in import/export regulations and tariffs) or changes in the interpretation or enforcement of existing requirements;
changes in our estimated tax rate; and
foreign currency exchange rate fluctuations.
The COVID-19 pandemic is likely to exacerbate the adverse impact of many of these factors on our revenues and results of operations, at least in the short term.
We depend on single and limited source suppliers and an interruption in our ordinary sources of supply could affect our ability to manufacture our products and have an adverse effect on our results of operations.
We rely on single or limited source suppliers for raw materials, such as plastic polymers, filtration membranes, petroleum coke and other materials, which are critical to the manufacturing of our products. If we were to lose any one of these sources, it could be difficult for us to find an alternative supplier and we would need to qualify this new source through our customers’ rigorous qualification processes. Although we seek to reduce our dependence on sole and limited source suppliers, the partial or complete loss of any of these sources could interrupt our manufacturing operations and result in a material adverse effect on our results of operations. At times, we have experienced a limited supply of certain raw materials, which has resulted in delays, lost revenue, increased costs and risks associated with qualifying products made from such new raw materials with our customers. Events such as an industry-wide increase in demand for, or the discontinuation of, raw materials used in our products could harm our ability to acquire sufficient quantities and our manufacturing operations may be interrupted. For example, in 2019, we experienced a disruption in the supply of certain ceramic material for use in our coatings business in our SCEM division when the supplier was unable to produce these materials at the required specifications. In response, we worked collaboratively with the supplier to determine the root cause and to solve the manufacturing issue, reestablishing the supply of these materials. Although we were able to reestablish our supply of this raw material, we may be unable to do so in the future or with other raw materials, in which case raw materials shortages may adversely affect our operations. Additionally, our suppliers may not have the capacity to meet increases in our demand for raw materials, in turn, making it difficult for us to meet demand from our customers. Furthermore, prices for our raw materials can vary widely. While we have long-term arrangements with certain key suppliers that fix our price for the purchase of certain raw materials, if the cost of our raw materials increases and we are unable to correspondingly increase the sales price of our products or find other cost savings, our profit margins will decline.
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Although we have not yet experienced any significant impacts or interruptions to our supply chain as a result of the COVID-19 pandemic, there is no assurance that they will not occur in the future.Certain of our suppliers have faced difficulties maintaining operations in light of government-ordered restrictions and shelter-in-place mandates.If our suppliers or sub-suppliers are unable to maintain their operations or restrictions become more severe, we may encounter difficulties obtaining raw materials, which may cause us to fail to meet customer demand or require us to pay higher prices for these materials, either of which could harm our business and profitability.For example, one of our critical valve suppliers was shut down and was unable to supply us with valves for our gas purification products.Although in this instance we were able to procure this critical part from a second, pre-qualified source, we may be unable to find alternative sources of supply in the future and may therefore be adversely affected by supply interruptions resulting from the COVID-19 pandemic. Additionally, an economic slowdown caused by the COVID-19 pandemic could harm the financial health of our suppliers and sub-suppliers.Although we regularly monitor the financial health of companies in our supply chain, financial hardship on our suppliers or sub-suppliers could cause a disruption in our ability to obtain raw materials or components required to manufacture our products, adversely affecting our operations or require us to alter our payment terms with certain suppliers, including prepaying for raw materials, which could put downward pressure on our cash flow.
We are exposed to the risks of operating a global business as a significant amount of our sales and manufacturing activity occur outside the United States.
Sales to customers outside the United States accounted for approximately 75%, 76%, 78% and 79% of our net sales in the three months ended March 28, 2020 and in 2019, 2018 and 2017, respectively. We anticipate that international sales will continue to account for a majority of our net sales. In addition, a number of our key domestic customers derive a significant portion of their revenues from sales in international markets. We also manufacture a significant portion of our products outside the United States and are dependent on international suppliers for many of our parts and raw materials. We intend to continue to pursue opportunities in both sales and manufacturing internationally. Our international operations are subject to a number of risks and potential costs that could adversely affect our revenue and profitability, including:
border closures, travel bans, entry limitations or inspections, and other restrictions on the international movement of goods, including actions to limit the export of goods in order to secure a domestic supply in light of actual or anticipated global shortages, as well as the potential exercise of governmental power to requisition or prioritize the production of specified goods or to commandeer facilities in the public interest, such as in the effort to combat the COVID-19 pandemic, any of which could adversely affect our ability to obtain supplies and delivery our products to customers;
government actions, laws, rules, regulations and policies, such as “trade wars,” tariffs, sanctions or other changes in international trade requirements that affect our business and that of our customers and suppliers, any of which could impose additional costs on our operations and limit our ability to operate our business;
challenges in hiring and integrating workers in different countries;
challenges in managing a diverse workforce with different experience levels, languages, cultures, customs, business practices and worker expectations, along with differing employment practices and labor issues;
challenges of maintaining appropriate business processes, procedures and internal controls and complying with legal, environmental, health and safety, anti-bribery, anti-corruption and other regulatory requirements that vary by jurisdiction, including new and evolving requirements for social distancing and other measures to minimize the spread of COVID-19;
challenges in developing relationships with local customers, suppliers and governments;
fluctuating pricing and availability of raw materials and supply chain interruptions or slowdowns, including as a result of difficulties, financial or otherwise, faced by segments of the transportation industry;
public health crises, such as the COVID-19 pandemic;
expense and complexity of complying with U.S. and foreign import and export regulations, including the ability to obtain required import and export licenses;
fluctuations in interest rates and currency exchange rates, including the relative strength or weakness of the U.S. dollar against foreign currencies that are important to our business, including Japanese yen, euro, Taiwanese dollar, Korean won, Chinese yuan, Singapore dollar or Malaysian ringgit, which could cause our sales and profitability to decline;
liability for foreign taxes assessed at rates higher than those applicable to our domestic operations;
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customer or government efforts to encourage operations and sourcing in a particular country, such as Korea and China, including efforts to develop and grow local competitors, requiring local manufacturing, and providing special incentives to government-backed local customers to buy from local competitors, even if their products are inferior to ours; and
political and economic instability and uncertainty, which may result in severely diminished liquidity and credit availability, rating downgrades of sovereign debt, declining valuation of certain investments, declines in consumer confidence, declines in economic growth, and increased volatility in unemployment rates.
In the past, these factors have disrupted our operations and increased our costs, and we expect that these factors will continue to do so in the future.
Risks Related to Owning our Common Stock
The price of our common stock has been volatile in the past and may be volatile in the future.
The price of our common stock has been volatile in the past and may be volatile in the future. In 2019, the closing price of our stock on The NASDAQ Global Select Market, or NASDAQ, ranged from a low of $27.43 to a high of $51.21, and from January 1, 2020 to April 9, 2020, it ranged from a low of $39.03 to a high of $58.47. The price of our common stock may show greater volatility in the future, particularly in light of the significant increase in volatility in the stock market in general as a result of the impact of the COVID-19 pandemic and ensuing governmental actions. The trading price of our common stock is subject to significant volatility in response to numerous factors, many of which are beyond our control or may be unrelated to our operating results, and which may adversely affect the market price of our common stock, including the following:
any decision we make to modify, qualify, withdraw or cease providing any guidance regarding our anticipated financial results for future periods, as well as potential decreased confidence in any guidance we do provide;
the failure to meet the published expectations of securities analysts, which in the future may vary more significantly from our actual results;
changes in financial estimates by securities analysts;
press releases or announcements by, or changes in market values of, comparable companies;
volatility in the markets for high-technology stocks, general stock market price and volume fluctuations, which are particularly common among securities of high-technology companies;
stock market price and volume fluctuations attributable to inconsistent trading volume levels;
the public perception of equity values of publicly traded companies;
fluctuations in our results of operations; and
the other risks and uncertainties described in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K or our other filings with the SEC.
Fluctuations in our results could cause our stock price to decline significantly. We believe that period-to-period comparisons of our results of operations may not be meaningful, and you should not rely upon them as indicators of our future performance. Future decreases in our stock price may adversely impact our ability to raise sufficient additional capital in the future, if needed.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Issuer Purchases of Equity Securities
The following table provides information concerning shares of the Company’s Common Stock $0.01 par value purchased during the three months ended March 28, 2020.
Period




(a)
Total Number of Shares Purchased(1)


(b)
Average Price Paid per Share

(c)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(d)
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
January 1, 2020 - February 1, 2020105,000  $53.55  105,000  $95,718,888  
February 2, 2020 - February 29, 202087,000  $55.87  87,000  $122,965,213  
March 1, 2020 - March 28, 2020411,514  $46.37  411,514  $103,884,865  
Total603,514  $48.99  603,514  $103,884,865  

(1)On February 5,December 14, 2020, the Company’s Board of Directors authorized a repurchase program, effective February 16, 2020,
2021, covering the repurchase of up to an aggregate of $125 million of the Company’s common stock during a period of twelve months, in open
market transactions and in accordance with one or more pre-arranged stock trading plans to be established in accordance with
Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.Act. This repurchase program replaced the
existing previous repurchase program, which was originally approved in February 20182020 and amended in November 2018, which expired pursuant to its terms on February 15, 2020.2021. The previous program had substantially the same terms.
Period




(a)
Total Number of Shares Purchased


(b)
Average Price Paid per Share

(c)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(d)
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
January 1, 2021 - February 6, 202155,600$102.6555,600$83,177,579
February 7, 2021 - March 6, 202141,800$102.5741,800$121,792,050
March 7, 2021 - April 3, 202147,624$105.1047,624$116,786,872
Total145,024$103.43145,024$116,786,872
The Company issues common stock awards under its equity incentive plans. In the condensed consolidated financial statements, the Company treats shares of common stock withheld for tax purposes on behalf of its employees in connection with the vesting or exercise of the awards as common stock repurchases because they reduce the number of shares that would have been issued upon vesting or exercise. These withheld shares of common stock are not considered common stock repurchases under the Company’s authorized common stock repurchase plan and accordingly are not included in the common stock repurchase totals in the preceding table.plan.
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Item 6. Exhibits
EXHIBIT INDEX

A.The following exhibits are incorporated by reference:
Reg. S-K Item 601(b) ReferenceDocument Incorporated Referenced Document on file with the Commission 
(10)Exhibit 10.1 to Entegris, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2019
(10)Exhibit 10.2 to Entegris, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2019
(10)Exhibit 10.3 to Entegris, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2019
(10)Exhibit 10.4 to Entegris, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2019
 * A management contract or compensatory plan 

B.The Company hereby files as exhibits to this Quarterly Report on Form 10-Q the following documents:
Reg. S-K Item 601(b) Reference Exhibit No.   Document Filed Herewith  
(10) 10.1  
(10) 10.2  
(10) 10.3  
(31) 31.1  
(31) 31.2  
(32) 32.1  
(101) 101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
(101) 101.SCHXBRL Taxonomy Extension Schema Document
(101) 101.CALXBRL Taxonomy Extension Calculation Linkbase Document
(101) 101.DEFXBRL Taxonomy Extension Definition Linkbase Document
(101) 101.LABXBRL Taxonomy Extension Label Linkbase Document
(101) 101.PREXBRL Taxonomy Extension Presentation Linkbase Document
 * A management contract or compensatory plan  

Reg. S-K Item 601(b) ReferenceExhibit No.Document Filed Herewith
(31)31.1
(31)31.2
(32)32.1
(101)101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
(101)101.SCHXBRL Taxonomy Extension Schema Document
(101)101.CALXBRL Taxonomy Extension Calculation Linkbase Document
(101)101.DEFXBRL Taxonomy Extension Definition Linkbase Document
(101)101.LABXBRL Taxonomy Extension Label Linkbase Document
(101)101.PREXBRL Taxonomy Extension Presentation Linkbase Document
(104)104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
 * A management contract or compensatory plan

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
ENTEGRIS, INC.
Date: April 21, 202027, 2021/s/ Gregory B. Graves
Gregory B. Graves
Executive Vice President and Chief Financial
Officer (on behalf of the registrant and as
principal financial officer)

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