ENTG - Earnings call transcript Q2 2018

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Operator

Good day ladies and gentlemen and welcome to the Entegris Second Quarter 2018 Earnings Call. Today's call is being recorded. At this time for opening remarks and introductions, I would like to turn the call over to Mr. Steve Cantor, Vice President of Corporate Relations. Please go ahead sir.

Steve Cantor

you joining thank call. and morning all our for Good for the quarter Earlier announced results our today we XXXX. financial second XX, ended June

can of Web You copy release a our on our site press entegris.com. access

defined today of with I in would the in These remind our forward-looking today's Before as we the SEC. find on to as call, non-GAAP the uncertainties Regulation On And will SEC a well site. we refer which like G. measures some number begin, this include in involve detail filings also a and listeners reports will to financial reconciliation that press as by and you can comments Web table our risks statements in outlined statements. are release

today Greg Bertrand CEO begin are will now and President Graves, call. Bertrand call Bertrand? and the Loy, On CFO. the

Bertrand Loy

details comments Thank our follow the half make of on XXXX. outlook the and third guidance second quarter. for quarter more our you, would will for Steve. and our he will second on I Greg provide financial results some performance with

another then achieved for open line and top-line questions. the performance. We will bottom-line We record

and During our our and our we sales divisions our year-over-year markets. strong by XX%. EPS EBITDA second adjusted growth sales three all We grew achieving grew growing than profits across XX% faster XX% non-GAAP quarter, outpacing by

the market continues PC devices. robust target. environment well strong beyond in platform. XXXX of original We and and QX we also overall, provider systems very reflected demand XX as gas bulk completed to contamination of production in levels And leading Industry the track acquisition the broaden purification control mobile of our SAES excess our of June to Pure Gas are adding semiconductor on a deliver to on micro industries

be the And of second and to trends were makers. we Against offset applications did demand, In logic fab there spending steady goal industrial some projects. memory uncertainty production automotive investments mostly of not in relations stemming push margin. While and continue in these makers did a and trade by outpacing continues the crosscurrents these industry. a favorable, substantial our foundry U.S.-China leading from we achieve by despite outs new positive. softer this quarter, were Growth to uniformly they industry

to chemistries complex consistency unique proposition, processed and as value comprehensive set our three the with engineered well all as unique quarter. saw our us the stems those materials and our grow customer platform of the achieve solutions model benefit of second to increasing We This of divisions. this our ability technology. materials. the semiconductor diversity of challenges markets and The is purity process enabling served Our of across Entegris and share the goal our the manufacturing around Entegris handling solve value is from increasingly the expand broad base help enabling available our and in breadth unmatched of to

leading and manufacturers. foundry somewhat our at mainstream materials products, logic specialty filtration and recorded and memory specialty edge strong muted, demand While our we semiconductor for gas revenue was

activity. solutions new related reflecting to ongoing build fluid handling and to grew projects OEM demand gas purification Our sales for fab sharply fab customers out and

Japan filtration OEMs. driven Our grew memory XX% was high digits grew and reflecting Growth double America sales as in to and which as makers North strong sales demand include respectively for customers. XX% XX% and containers materials was wafer well with the in reflecting OEM purity company, and chemical Korea and strong by sales growers from By shippers, geography solutions.

Asia. at Taiwan sales foundry in to QX, Europe reflecting increased at weakness experience lower manufacturers sales production but in in our Southeast mainstream fabs continued We boosted and

our even performance record sales across and portfolio. the nominations, we to were process in pleased more QX, about are continue we of wins achieve we excited additional While our with design

filtration solutions, nano generation We solutions for continue and as implications to Xx NX materials well NX for advanced gain and as for specialty for vertical nodes gas deposition next EUV. and acceptance market

To strategy broad allocation at process SPG gas and we EBITDA. that XXXX solutions approximately the global us unique of terms our half, that $XXX in of of solutions June has act point most cash the volumes of offering is very ever process synergized key the customer pleased Xx times to industry quality purity sales operating were to generated returning the outpace handle it and in solutions end cash the driver adjusted for internal Through highly complete where higher this balancing and base SPG provide semiconductor we when it to enters been fully significantly to to SPG the industry generated our revenue. gives greater acquisition level EBITDA and the enabling or used We for the the of million has our end-to-end need purification of spending. investments, to point enabled our from and strategic execution. or XX.X% our is $XXX faster our In of capital first continued record chamber. the capability at of Pure fab gas complete platform, gas on earnings of to leverage the acquisitions than significantly The us a to strength in complements flow cash grow secular the CapEx execute million on diversified is and shareholders accretive or set. achieving SAES Gas end,

we the with this to sheet addition but proposition, price years very earnings preference and we value balance or for We've only the or been they year use businesses and add Systems the Concepts capabilities acquisitions. we earnings beyond. framework to will clear our and add this our PSS high-quality With want achieve powers per framework discipline, potential defining the shareholder we've create the our in about characteristics fluid of value to of also our capabilities very life will many significantly In for our bags. consistent in growth long-term and of and excess first summary, this in believe top-line Flex as to business which strong $X The now, we our Entegris. with to results bio-processing strong been of the our the sensing see do right new fits deployment, to half put years. share Concepts completed for including these in For for for additional focused contribute current add not businesses and on acquisition financial year our PSS will acquisitions augments Particle capital three another to innovative us pace SPG CMP Sizing Flex adds and year. acquisitions applications platform. sciences single emerging technologies

the half industry solutions, grow financial detail. are of the our addition year. current for Greg? I X and turn the completed positioned first including in trends now demand XXXX Given acquisitions the for to we approximately in will this call XX% to the of Greg

Greg Graves

Thank you, Bertrand.

half pleased for the first XXXX. our with are We results very of

First XX% share. half were the basis, a million XX% first sales half GAAP EPS of same non-GAAP increased over $XXX of $X.XX year $X.XX of prior the XXXX. per in up achieved and On EPS we period from

per $X.XX On $XXX X% X% and from of and diluted For a per million was sequentially. GAAP earnings a XX% $X.XX. basis, QX. non-GAAP the up up achieved from sales from up of grew XX% QX share earnings we second QX were last year share ago quarter of year

margins tailwinds quarter. to in quarter operating second in from one-time reflected of first gross and XXXX. at positively the sales $X.X These performance in graphite a mix benefit impacted by margin volume QX. gross XX.X% million were which compared XX.X% offset effects to favorable experienced higher and less and we non-GAAP Our fire production related facility from our a from The sales a insurance claim in downtime the by was the caused FX

total related to in consistent a to with of line with and be the we million $X.X total year. the $X million on expenses expenses next to synergies operating in Non-GAAP SPG the in million incurred at QX to of balance QX of $X were acquisition in be low of million included expense SPG to of model SPG. XX% realize of $XX.X $X.X end margin of With the GAAP approximately the $X be approximately by expect and gross QX; the to our XX% place including which our in end we will we expenses integration by and of SPG, regard in normalized expectations. basis expect million. end of XX% integration We transaction cost from million what operating place inclusive expect QX non-GAAP to levels XXXX costs of

expect integration increased Excluding higher from in of non-GAAP operating $XX million $XX $XX XXX include year amortization be quarter. SPG. ago. we QX of Non-GAAP points The to expenses operating million a million of the addition margin third operating expenses, the related expenses to XX.X% basis expense and

improvement reform lead a positions. better than slightly related rate GAAP tax the our in of tax credit tax foreign tax to than and Our rate QX. a was non-GAAP and an benefit also of for factors to $XXX This And discrete XX.X% full XX% QX tax Adjusted non-GAAP quarter for EBITDA rate in expected of expected reflects QX the and expectation of better or record XX%. XX%. year suggests our rate approximately tax of a revenue. XX% the was tax million These

QX from up division, from performance chemicals The driven our materials SCEM growth year were XX% or up of from and strong cleans. was for Adjusted SCEM ago the earlier. the engineered X% for to sales Turning and from million claim period and $XXX QX. last operating by quarterly mentioned performance I XX.X% in up specialty a by graphite insurance formulated same one-time coatings reflecting was margin QX and and benefit from the grew year

of QX the Excluding etch above QX. declined strength liquid $XXX XX.X% margin purifier of the R&D control operating spending. up claim, applications. negative from range. bulk from margin QX. X% reflected and SCEM and due last were and would quarter our The impact the Adjusted XX% new and MC in targeted of last growth benefit higher the year for for operating of been year for The from was sales QX micro or contamination clean decline FX and up to $X.X were insurance adjusted MC wet the million in from XX.X% solutions QX from million and photo from filters have still

and We AMH XX%. QX. MC to by QX of Handling XX% first to our ago. quarter well in XX% X% in offset operating $XXX performance margins XXXX. target sales and spending The long-term of Material QX sales XX% the part to for year year of XX% of and last are from favorable of from for margin mix. operating flow a million with for of Adjusted as the QX of XX.X% its QX reflected AMH components XX% handling within The in from grew from or margin less improve more higher was infrastructure XX% from projects sequentially. by the up QX declined fluid of be the $XX long-term slightly reflected decrease new expect $XX to product R&D primarily fab QX Advanced sequential and The from strength of PSS operations line for FX flow acquisition. quarter were in AMH operating cash impact improved million last revenue. trends grew Cash million range targeted the or year favorable as Free

as was balance debt long-term was June cash of Our XX $XXX $XXX total and million. million

mandatory We our CapEx use to repayments for capital $XX purchase year QX our full quarter million debt CapEx. million. and our domestic million spend repayments for our SPG the suspended million $XXX debt The we stock in liquidity. $XX with for approximately repurchases. QX during dividend have strategy CapEx in until have of quarterly million until consistent million for total we of was $XXX the and allocation with $XX Uses XXXX included Consistent expectations rebuild our $XXX and of of no cash we voluntary

to EPS $XXX non-GAAP addition Turning we $XXX $X.XX the SPG. we quarter we expect about levels, to consistent $X.XX to to million, these excited are our which for outlook QX, target we In SPG. million to a be are model. includes our of execution; sales per At share full with range revenue summary, of from our with expect pleased

our about We disciplined now and continue excited take we of will we allocation be balance our capital for Operator, finally XXXX the prospects beyond. and to with are questions.

Operator

Instructions] Thank Hari Please Toshiya [Operator you. first go question of Goldman today ahead. Our from comes Sachs.

Toshiya Hari

has how accretion all XXXX. literally past over revenue guide into my taking is Hi. guess for SPG, OpEx level first months? on I embedded the that of question. of but and of announced housekeeping what the you of Bertrand, QX realize the a one your your in Good morning is dynamics much I just and and thanks very view industry some more deal, we've given question. at changed seen couple this some of the

Bertrand Loy

Toshi, $XX of to from we the about second day mini-analyst we of question. turn But I for the year. recent question mentioned, during to SEMICON million revenue during the West, of can take first the million part part for our as half and of embedded the we second $XX SPG have the coming Greg

Greg Graves

And related to and to -- regard million question, SPG $X regard is between And change no our to OpEx model views and the with to in $X the accretion that. with your on million. accretion

talked then the something calendar think $X.XX $X.XX year. and in about to we $X.XX I $X.XX current to year next

Toshiya Hari

foundry negative fab Okay. and remarks of pulls the talked and in the you outs. And into the you see Bertrand side, weakness Got you about probably my pushes logic up, continue then in that to as prepared in it. and of some talked QX. some push follow the about edge on and saw your And leading quarter

those you do financials, those elaborate you be Thank how of additional kind If on it QX? to kind the points, is you. And of reverting when or see QX, contributing big your there helpful. more would is two in it was Any color can XXXX? positively and impact

Bertrand Loy

that in it So consistent experienced QX if we into going that the industry with we had quarter. the much expectations very the you about think environment was

level we muted in a capital that very what offset of we sector, in sector. spending So the by more was and the strong somewhat saw memory industry fabs. continued experienced mainstream And robust logic across was activity

be -- advanced for trends some back-end year. to of node tailwind that regard materials. type expect transitions that some hope product the filtration be will XXXX we and some will advanced segment of in to number meaningful the there providing We certainly More into with more the the specifically logic of going And our improve a lines.

you how going the we overall that's the what forward. quarter should and So think expect industry about environment in

Toshiya Hari

the And outs? fab push then

Bertrand Loy

full it we as in the that to expect think year, CapEx about I we again, the to what be mind industry have Well, comes for X%.

the that unit some but driven our down for certainly the in business, in what back and end providing our year we're guidance bearing So of the by offset the trying reflect CapEx balance QX year. be in will slow a on overall will business we're have of that and that really that's to strength the

Toshiya Hari

you Thank much. helpful. Very so

Operator

Thank move now you. Patrick go Please We ahead. Stifel. of to Ho

Patrick Ho

of on margin margin see from Thank a first basis? for you much. How the with Maybe pure additive do of being gas. gross very profile off much going that Greg terms as in you forward addition perspective gross the a

Greg Graves

Yes.

so were basis operating average, you and on below slightly and I Like margin. impact XX the are So this maybe having in approximately when to or in positive operating slightly has margins our Gross see forward. numbers kinds talk you quarter corporate look margin SPG to dilutive MC if of with operating our in you'll structure average the about the line SPG, at line corporate margin negative above really margins margins for business. guidance, are point slightly going gross our with that business of gross our said to

Patrick Ho

Great. there's right engineering adoption specialty pieces to of in key environment you and chemicals in of XXXX. the memory on of moving now. a for second the front. going trending see, do the terms lot And driver year That's memory obviously business on How into market maybe A your Bertrand materials follow-up the is the half and the helpful.

DRAM in and the seeing of NAND we're pulls and both some Given pushes today?

Bertrand Loy

Yes, Patrick.

DRAM very, Entegris So very service to NAND fertile it both has benefited a expansion divisions. for three continue advanced for and and ground all market be

remember ago, we ahead that very of XX% And memory compared of frankly our the revenue momentum and the into if in about be of of memory a I about to also through so first the that a want business. momentum growth of And has that of us. year to think advanced third just contributed a you year, revenue. opportunities in new contribution XXXX. are still significant of to expect the filtration year segment and of our our a for particular the about lot carry balance So material advanced the you half to

very, as So reasons comes memory there optimistic a segment that are to be it I Entegris. of for to very lot think the

Patrick Ho

Thank very Great. much. you

Bertrand Loy

you. Thank

Operator

you. Thank

Our from ahead. go and next Edwin Needham Company. from Mok question comes Please

Edwin Mok

Hi. Good morning guys.

cut-off, come this are how So But if expect a your guys asked year? the earnings so of when acquisition that, you in you sorry of $X.XX, you question talk about share, much said [indiscernible] my on the those from line your half SPG, second And revenue also -- till I someone I did to got apologize. $X.XX think and you $X.XX to the targets? expect acquired in accretion you $X.XX

Bertrand Loy

will Edwin the first I turn question So the maybe annual take the to in I But, we take can half EPS. for your context and Entegris. guidance for then question the on will Greg of

So us expect and about that. XX% we to they are XXXX in be four beyond for rate annual the components growth

The and CapEx to this XXXX. year about and MSI first in one we is, baseline grow the industry X% at expect both

the that's first So component.

second to by the basis industry about points. XXX is outpace our The component commitment

expect little component approximately foreign to point. addition year. point third a then, less this come is basis the And pickup some XXX of will a from positive of we and PSS SAES -- The exchange than bit

those and about how impact that's acquisitions annual in think guidance. XXXX how So think you about should of you overall the the should two

Edwin Mok

earnings that's Greg accretion can't like it extremely any thoughts break down that. helpful, side? Actually on Great. And the

Greg Graves

Yes.

guidance. points $X.XX on mean gross you On XX operating basis we I earnings think average the however than previous margin in to said slightly said XXXX, I that's question, maybe margin off, higher side, embedded you've we to accretion talked $X.XX operating PSS our accretive cut essentially in And to gotten margins. the dilutive corporate

Bertrand Loy

add also respect is to coming end should the top-line I year. to that our maybe the of revenue Edwin, off cut was in SPG the no change back line on with from really your if there expectations maybe the And

expectation is million So the to revenue $XX about the back in end of the $XX of year. million

Edwin Mok

then, Okay, question the contamination. helpful. term been I've extremely level great. longer trying on cover a high That's And to

from a to heard positive is, what may more people little customer Why trends actually called this have contamination, to understand historically And some trend see lean to maybe and to saying that of be right? -- for we've control? So could driving obviously process contamination really controls the I'm I we the is guys contamination ash] demand cost start talk trying focus that increase upstream. you bit my what demand [ph] tend [train for filtration guys. try cost fuel guess have that why change that not Can a on you adding a the about [indiscernible] they for that should that? ash more they increased than drive actually

Bertrand Loy

Right.

So yield, spend just the first reliability. device of a topic but give to only to will simple important we are the a very to try I they the purity but the thing not on lot really and is and answer, increasingly remember the -- could time Edwin you device performance is that to

As I focus there's of a the even purity. memory and levels logic, the think trailing greater now industry various edge result, segments greater achieve to across a fabs of much

you So to keep first mind. thing need that's in the that

purity chemical increasingly sub-suppliers. and the add sub-fab, a new the supply The with very, chain the other opportunity us thing and ecosystem filtration that of mind even purity, thinking reaching start to points providing you those need higher with to levels levels to achieve much of earlier not number but keep fab about manufacturers in just is bulk high very of or the in that's needs the in to with

which filters, being solutions So ecosystem advanced the think proliferation of now use past, filtration to replacement also about points filters. filtration adoption increases much those in more of frequency better and drives but of the than the of the the asked

reach growing your of last about think question? in of so And high still of was importance about levels it's about really answer the seen this that very Does those we've you purity. all the pace. growing in year micro at XX% those trends. contamination, very, That's when the function really growth same at So complexity the year to a that It's purity.

Edwin Mok

Yes.

and that think I MC that's you that? and the coming if the good decline I you [prepared] last expected may. to question any that [ph] taking declined in such think I this in helpful. what Are margin the drove recover quarters. said quarter steps in One guys margin actually around Greg,

Greg Graves

I in kind would of say or any nothing restructuring actions anything. of specific terms

they tailwind currency business largest that about of the were think you in If the beneficiary QX.

business the in that tailwind It's didn't So, beneficiary repeat they business. obviously the currency you largest our QX. were if fastest that think about QX in growing of

spike costs so are R&D QX. R&D repeat And projects some up in we to don't investing in we related significantly and QX a saw that we in to expect in

said closer QX in improve like move as little expect XX in then bit to And that I we target we'd range. see should to improvement and be by So incremental QX XX into QX to it target. back that we

Edwin Mok

all Thank I you. great. That's Okay, have.

Operator

-- Thank a from ahead. you. Deutsche Ho take Sidney We Please Bank. of now go open question

Sidney Ho

Thanks questions a on for my and on busy the M&A front. in half in quarter very congratulate taking result good the first

the but on in What question quarter. I better AMH a X% the different strong? CapEx upside definition side, CapEx than should third about understand expected. down I reason the the first the was standard, half I in in second is quite that it and may than QX first growth in quarter was that or the a AMH three half how third quarter-over-quarter. driving with that industry That's knowing really of The is think have was -- slowing we be bit your up little

Bertrand Loy

Yes.

for So Sidney, really, so year yes indeed, strong another this AMH. be proving really XXXX to is

around industry has Lots lot of a that really that seeing become in for of parts new fabs are We opportunities the built world. standard group are our of many action the we being said tied times. is the as is what the CapEx. for that year-to-date. This a This that's have many all business the to of driving advanced fabs industry the and really performance is is platform

industry to -- market CapEx down expect this result in of year. with business And very, But number a that generate year been able back a as basis. bit expect in the across a pleased year a of end a record would the gains sequential this we come very we've product this share on in we the to the little to So of contraction and division. lines that overall division have again expected

Sidney Ho

great. That's

Greg Graves

The business other PSS well, thing as is a business, AMH point of well. there is are of part -- I'd beneficiary the out certainly they that

is that it a smaller for basis. so it a a but not acquisition, because is relatively revenues tailwind And is their huge driver on year-over-year

Sidney Ho

Got I'm Thanks. is it. OpEx that slightly OpEx Great. impressed My is a on though of follow-up the only side, actually in with even full quarter quite question QX up your very SPG.

the I think of Greg in you mentioned drives million, business to per quarter half that level. $X million and beyond should about longer think there term or year. organic any think to we only percentage how revenue of about Maybe percentage is the of that. growth? it to the a it revenue it OpEx is QX better a increase $X margin clarify Is as But that will or offset second from QX

Greg Graves

said, we over number -- But, think That to that SG&A we're period first mean what spend we in move we mean safe talked focused mean that SG&A year time balance intently a QX. pretty that's obviously and that of want. with like long I slower growing control number probably as and well. expect the in at portion general tightly. to we of I the I to goal we type the as QX that G&A XX I of about all, our a XX for you operating forward. a number leverage rate than as sales of I of -- Well, mean always is regard a the get But about on our clearly

grow talked an the X% that under of As it of clearly relates we to OpEx, would recent I I -- to to we mean just sort were sales. under we've X%. spend X% just R&D quarter to and running closer our overall rate most are like mean R&D target about goal, we

Sidney Ho

to in give Okay. how as trade sales And is weeks is much assess global a of Maybe color I what considered you. China, portion from squeeze in multinationals. I China last coming question of rising rapidly more only the given this growing this the Chinese asked was on edge local is How leading in for you little is there, China partnerships ago. this much hoping there? how if your one I I know versus tensions can revenue versus risk through say and can But lagging so edge question. a geography manufacturers us are two to

Bertrand Loy

level for growth. I don't this very important really you available Sidney where indeed is It would have a about detail But seen significant is overall revenue. we've also what is So, of that This I very of call. region a represents China our XX% tell market.

We are growing strong at XXXX. year-to-date in about coming in years XXXX very XX% couple of growth and very, that's from a and

level fab So doing investment really strong well strong really, this very we activity. new this certainly leveraging have been new of in fabs and capacity, but also

describing evolving to that you're to very matter. very going are again -- an the right now. of tensions We're as trade are stay So that very, close we

We we to risks. be not but those ready we would some to our are if to steps isolate overly of -- business, see again, And risk concerned. appropriate to take try

the regional that frankly concerned resilient momentum different that business a the much any depending And have very and in I of also of answer number across that but We're think I segments, customer. Entegris on number we're and momentum are So industry. model pleased the I really to markets. the greater able we geographies Entegris been other with given very and that conclude actually China say probably is that pleased with exposure seeing a very think of this that not what would seeing maybe I'm in makes we we've to my again very that's gain customer a level want very, not today, in to unique way across I

on any depending We not We're given any are given not depending customer segment. market. on

Sidney Ho

much. you Thank very That's great.

Operator

of We [Operator line Kapsch from you. go ahead. Instructions] question Kapsch, Loop Mr. Capital Chris Markets. Please now Thank a take your is open.

Chris Kapsch

relative My a being Yes. expectations and had if And demand at called at out foundry comments SC, think in softness customers. growth that I you the foundry up specialty on Taiwan node Taiwan. least the customers chemicals and business. record have guess the foundry XX you muted bit -- the around the do focuses in sort and in with those like a But to foundry there I that of process sounds look with question little disproportionate key and ramp wins it and specifically logic seems given you lot logic nanometer and or Intel logic key the and X like and both with

Maybe And growth you that as into of is half segment. phenomena? what or in driving. of to XXXX referred you what's a those expect transitions for you no wondering of more have second in the something it the the a that magnitude Bertrand visibility Just timing recovery the

Bertrand Loy

I SCM Chris, mean, certainly that so my the was actually suggested very of previous something with So, apologize I'm far this I any first different. pleased comment year performance if that, not and say intended.

they've at estimate X% growing to if year-to-date X% about XX.X%. the what And to stock the about If with in look range. SCM probably you at we think been you year-to-date, growth it's be

with be and what big transitions think which I NAND, market, than that, to I said Similarly, number large be the the production really XXXX XXXX. think expect and faster case materialize, and in we other to that's case would of Xx there upside I be for at beyond. an when the will of for which SCM XXXX think those levels I see will vertical the and I experiencing in so very growing expect would Xx business driver greater the Having performance. significantly really pleased a So is SCM node

see much I so I wafers at and SCM the good. more stronger produced we more complex architectures very is also logic So nodes new think in-memory. And will being those and think far become it performance as

Chris Kapsch

complex That's deeper, an for But the vertical to in those know also of all of of architecture content I something just players benefit the terms I And do you architectures? you by architectures you'll steps Thanks. that sort Do mean, have benefit. per of to Xx stacks greater consumable layers more process appreciate I one more number transition record of just it. that Xx, get referred processing their nature demand helpful. of and that there's follow-up have get that NAND in terms with to. greater outsized those about capita, as will you

Bertrand Loy

you're to be in two the as benefits material framing way So question your the will we refer and you're There that correct Chris. intensity.

positioned on technology world that will and very roadmap those more of more more the [indiscernible] those very are comes addition and as new first for and is structures around NAND layers, for mere for said high a narrow importantly very we edge of of steps calling fertile And the the I all a really different process materialize in but well the us the beyond. ways ground of introduction to fencing just players is materials, those very because and different and The XXXX opportunity materials deep structures. of number Entegris are from a in opportunities

So tomorrow. narrative is for that long memory a very to comments it need to don't I I that us in relates our again, segment know my I to control question go the opportunities in types contamination importance in around of limited product SCM to fabs. memory a that similar important grow today would that advanced I lines continue because micro expect the was and to impact to

opportunity I think that you understand as well.

again for important be board segment divisions very So a across and will us the across forward. going memory

Chris Kapsch

for color. additional Thanks the

Operator

you. Amanda We of Citi. Please ahead. Scarnati now to go Thank move

Amanda Scarnati

taking Hi. the Thanks for question.

on if other on And the potential a as nanometer? -- that is What's then, over ends Entegris compassing the about of talk if like UV node than jumping X would just the XX the transition, with materials how the node can impact to cobalt? How the on nanometer Just impact and being the of well? addition new there the up you your nanometer growth addition logic that more to X side potential? side

Bertrand Loy

going asking. to thank I'm for you Yes.

well on nodes. question of are very they all actually event of We those It's positioned will volumes. more reach very high a when

I As ready, we specifically, EUV only it the are just are looking to supporting ready. not but And we are really insertions. to we forward relates say would EUV

new developed to end. We of a number have solutions that

we we've few years of name I but point for bulk say continuously resist. EUV the I filtration but a solutions described think them, improving and our of would over only have to was if a that that use been I few

would scanner. I used the that a the a also the lot there be acquisition vertical the very standard. would around of gases will large We because is timing become developed path hopefully perfect say SAES have of industry also of of quantities that

all and of other shares. for words our create in will Entegris increase stand applications those our opportunities many So to increase

Amanda Scarnati

know on expectations. us with can that there's remind you then, if they're us, remind China, touched you've toward but the just JVs surprises tracking the bit And you how you your any I Can earlier, this a JVs? little seen you just in that have

Greg Graves

really they specialty So sort arrangements. more with they're gas. we of one to regard JVs, have actually Amanda contract manufacturing not But we -- are

got with got a there we've who kiosk that those helping China. we've for is So us us. And then, and is in cylinders partner a distributing partner manufacturing refilling

part both of both They supply are sort are in the line SCM expectations. chain and they those plays of business. are our with So tracking

Amanda Scarnati

concerns concerns surprises as And the then, any there war or well? no of with IP trade

Greg Graves

IP And in I no. into mean we're both No, transferring meaningful cases, China. not any

Amanda Scarnati

you. Thank had. I all That's

Operator

now follow-up Thank for Goldman you. We go to Hari a Sachs of Toshiya question.

Toshiya Hari

CapEx numbers? Bertrand, that so that of the much and year about your acquisition down year-over-year guidance, exclude start When half was your the embed think business, follow-up. second driven you in it for when side full embedding think the what taking revenue take Is business sort businesses fair half wafer Thanks you're second of midpoint up driven half Thanks. the to fair start second up in range. I your XX% implied X%, of kind say if you wafer the description Yes. I driven is in you your a SPG. X% CapEx and of to of the revenue the the

Greg Graves

the And and expect to to versus think up first X%. is range we business you half, mid think And to CapEx QX the if contract to we last digit exactly at forma expected specifically single the second we flat it you When the expect year. our That's be about in look them pro to to you said, wafer Yes. X% to to in range high up CapEx to about versus half assigned Toshiya. X% as a starts be modestly. way grow at X% expect

point line the performance very of basis in with to So industry. excess X again, much in XXX that

Toshiya Hari

Great. Greg. for is And Okay. one, this this

that long going in been Is sticking be coming tax be your in term your rate guidance, XX% to below yet Thank you're of tax rates tax still could near forward. lower or rate to place the you. still guide. Your right did the term and kind coming you think

Greg Graves

Yes.

in mean we the the becoming assets on and about of But rate around some It's the if revalue QX, we some more that XX% discrete general, much items year say in core mean tax quarter range. change liabilities to of So, think came currency. -- was from talking the difficult 'XX, the with to I'll I candid talked to about law rate. of -- year tax of variation and 'XX. we and in would we of the based to talked full and QX. about in rate have predict I that more full year a the every should but XX% as 'XX about 'XX are I we except be benefit not full of out we a

Toshiya Hari

Thank it. Got you.

Operator

back over additional We'd remarks. call Mr. turn you. closing now Cantor any the Steve to or Thank for like to

Steve Cantor

at do presenting Before the August to Growth be want Industrial Semi KeyBanc Jefferies the concluding in and Conference the that note Needham management will Conferences. Conference, I

you'd that call great thank for to you day. the and again like on can like if you more information those, So I'd With email me. a have joining

Operator

will for Thank you you. conference your that today's gentlemen and Thank participation. conclude Ladies call.

disconnect. now may You

Entegris (ENTG) 26 Jul 182018 Q2 Earnings call transcript