ENTG - Earnings call transcript Q3 2019

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Operator

Good day, everyone and welcome to Entegris' Third Quarter 2019 Earnings Release Call. Today's call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Bill Seymour, Entegris’ Vice President of Investor Relations. Please go ahead, sir.

Bill Seymour

Good morning, everyone. the for announced of third we XXXX. today, financial our results quarter Earlier

I remind the statements like comments we from and would Before begin, differ could to of and include materially forward-looking actual results number projected today some listeners statements. statements. a These in involve those risks uncertainties, forward-looking will our that

refer reports information to presentation. the annual report recent regarding our in most with the on these Additional information filed subsequent the risks that quarterly disclaimer contained SEC. the have and Please uncertainties are in we and slide

this to in as On call, financial we G. refer will SEC non-GAAP by also defined measures Regulation

in on can a page website Relations You release as our today's the reconciliation Investor well as table of find entegris.com. press at

are our Loy, Greg Bertrand and today CFO. CEO; Graves, our the On call

to I'll Bertrand. hand it over

Bertrand Loy

follow you, balance will open I performance, expectations we for see our the some discuss and We'll our the industry questions. on of line the for our year. more how guidance fourth then comments our Bill. Thank quarter. and will details environment on with the financial the results, for third quarter make Greg

Our our quarter will a that few performance below but with was things positives, third many also expectations. solid

This quarter positive nodes, in and logic sequentially side, Materials the Driving was advance Handling in and our Advanced new the was highlighted our growth solutions Microcontamination anticipated. third particularly performance sales in division. on strong in and as growth On as reported an top-line both grew by also that Control basis. organic momentum good we with foundry

also expected FOUPs, and for announced during execution patterns. sequentially reorganization. products the benefits driven said And and disciplined CapEx products were up QX the was the significantly had quarter evidenced the gas expense all quarter such in second we that of call driven our our control Good recently filters as sales In this by purifiers. gas resulted as in improved that

of XX% levels increase a profitability, sales, translated sequential with into reaching All adjusted of improved of XX%. which this EBITDA represented

for On gas This in the the on SCEM in operational of our believe expectations timing result businesses the quarter. performance We are specialty below behind our coatings business. issues us constraints largely the graphite and expect year and the other a shipments was of and supply hand, our to of high note. these our specialty end division SCEM was temporary the

was than quarter. lower Finally, for margin third gross the expected

this expect to We gross in shortly. provide QX margins Greg on more and improve will perspective

rates industry. foundry near Let to me demand, now the node cover positive favorable impact transitions. of new be key seasonal on normal view and utilization continue Logic and driven the by our solid, technology

relatively memory On the rates at wafer other hand, customers. in starts and remain low utilization the market, most

to segment. signals mixed the memory stabilizing, particularly and in in improving, market be cases persisted, some the whilst overall NAND However, appears

QX. did show I CapEx in solid. of improvement the our of In encouraging the market our industry addition, signs proud our to the unit am ability performance this year third these and very light some results the driven And Overall, implemented differentiated. softness. in significant changes quarter deliver the in that in team's organizational model of course, of resilient and continued demonstrates was midst we quarter highly performance is business during of our

help our materials customers In more and to relevant we the materials them positioned for crossroads targeted other never materials semiconductor factors of intensity the performance. defining intensity, and next currently of two Entegris transitions, levels will of As operates we are materials of know, words, technology reliability. the performance, achieve recent you better seeing And node purity the as in greater greater be been chip at have yields and the and generation purity.

a capital allocation key have have component Over largest product have the been historically been the billion technology To way our growth area us past we since and that more capital. end, of our Acquisitions DSC portfolio. to allocated of the microelectronics company of last six and semiconductor acquired applications. of a years, and $X Anow in our year, beginning broaden than we will the and division. capabilities a in which deposition month, other advanced for Hangzhou, and and we acquired life and is be MPD, part significantly filtration our sciences China Microcontamination Anow materials. located And enhanced of for

China. brings The and addition Entegris’ technology offerings also manufacturing of Anow portfolio, capabilities membrane new Entegris global but to filtration in not liquid with provides only

the Looking the in guidance of ahead quarter the fourth a for to environment. significant expectation quarter, our of strength is based and on the our the on industry business improvement fourth not

quarter, from adoption come which detail the of performance As process our of these the last we will shortly. drivers of driver more our the several benefits important of are driving Greg many to primary in discussed transitions, solutions. is discuss expected node

In closing, I our results the overall am pleased in quarter. third with

performance show recovery and we XXXX set starting we are quarter strong anticipated. is the going XXXX. to expect in into business up fourth the out Our with momentum well to close and we And

I the will turn call now to for results. Greg? Greg the financial

Greg Graves

Thank you, Bertrand.

QX year-over-year basis. per X% sequentially X% and organic up million reported share sales down with XX% up sequentially performance transaction. XX% the a reported an on on basis third sales terminated associated down were of a on solid. $X.XX, GAAP down X% organic Our on was an our were year guidance. approximately QX with Versum were line included quarter the X% ago as Compared down proceeds in basis. Sales earnings and $XXX QX to basis a diluted were were and

expected rate to $X.XX On of was discrete approximately QX. more to tax up a contributed and items in EPS year-over-year EPS basis non-GAAP up $X.XX related favorably X% sequentially, XX% non-GAAP

impact mix. unfavorable Non-GAAP improved than margin associated GAAP $X write-up and QX. of and gross approximately in costs by an from was restructuring inventory Moving gross included higher though million margins, the acquisitions expected, to gross primarily sequentially, the manufacturing XX.X% XX.X% recent Gross was modestly on with margin lower margin driven negative costs. and

approach GAAP GAAP driven costs QX, and associated integration higher in and primarily a assets, basis were total gross we on amortization XX% QX. XX% On of Anow approach margins the approximately transaction. in fees basis, operating MPD non-GAAP million $XXX by to of from margin included sales gross restructuring transaction expect expenses a costs, We volumes. to million a $XX intangible expect with

operating favorability by million. was approximately driven expenses $XX and Non-GAAP QX expense The cost impact initiative. primarily in announced reduction control effective were the the of

We operating non-GAAP to expect million the million $XX quarter. be expenses will $XX fourth in

the Last from aimed strategic of QX. announced quarter, customer increasing at savings realignment the realized we these amount changes We responsiveness. in our modest organizational

by at the of We be the expect the full million to end annual year. rate savings run $XX

and XX.X% of revenue. million was $XX or was income operating of non-GAAP GAAP million income QX $XX or operating revenue, XX.X%

for Our a X.X% related credits, GAAP rate benefit and third reform was included to tax R&D tax quarter guidance. discreet the $X updated and million

tax year XXXX rate XX%. to be full We approximately expect our GAAP

Our GAAP non-GAAP The non-GAAP was from rate. rate with rate the benefited to the tax items same XX%. discreet regard mentioned

year XX% We a $XXX XX% was XX%. rate be will revenue. of for would expect approximately the rate non-GAAP full QX million quarter approximately of our which tax approximately or imply Adjusted EBITDA

decline operating and up Turning business. The decline primarily was lower from and was primarily ago sales SCEM million a of our of mix. driven in by division. DSC sequentially. margin decline the capacity This QX to below product X% Chemicals our performance Adjusted utilization specialty partially acquisition. by positive and was by XX.X%. year $XXX Engineered materials driven down offset or for operating MPD expectations for the slightly were year-over-year Materials the unfavorable margin and SCEM the The was impact by at Specialty

the QX performance, we SCEM’s optimistic about Despite remain business.

in on systems. control. higher sequentially sales year-on-year margin MC and operating and last our by materials driven expect growth impact new During filtration quarter effective improvement business a of specialty and The from up in for of million XX.X%. a year, significant QX materials as for growth by expense the the was liquid year-over-year Microcontamination up we reported the Control photoresist both the the X% or were in see bulk strong an purification result gas and intensity fourth The for increase in materials to in nodes. in volume increase Adjusted deposition MC sales was quarter, was basis. driven increase organic X% and $XXX of

tools by softness nodes. of sequentially. by for The the decline to to driven million $XXX the the we AMH from measurement in of fourth continue, year, The of year-over-year sales we CapEx positive and or business. sizing down last filtration quarter, business sequential Advanced of FOUP sales acquired including Materials of Handling some sales was recovery process liquid enable increase was MC both in up driven strong will capital-driven same a last businesses, primarily AMH Moving sales in new QX driven expect momentum particle by of year. those X% was

The slightly million taxes, reflects $XX third was control. fee. quarter XXX primarily approximately by basis from million negative. capital the levels, primarily the Adjusted lower XX.X%, expense was flow down and $XX was operations operating sequential The year-over-year, cash cash and flow to margin QX. higher margins of was related free well Versum of AMH improvement higher termination from effective payment the as as in points the but AMH up for working driven for Cash volume flow

CapEx quarter Third million. $XX

and packaging business. We product to technical continue and support to improved our XXXX liquid capabilities introductions, expect to new of growth million spend approximately CapEx $XXX in in filtration

of XXX,XXX our average we used $XX for for During price $XX approximately for QX, and we approximately share. million shares dividend repurchased million $XX quarterly an per

$XXX million. expect we outlook sales to our to range from to Turning million QX, $XXX for

GAAP in QX to we share. expect and summary, and $X.XX muted non-GAAP to be better to expect In EPS QX. improved per EPS share, performance to despite delivered results a to $X.XX per We environment industry $X.XX even $X.XX deliver be in

now questions. will we take Operator,

Operator

first Sachs. [Operator from Toshiya our Instructions]. Hari We'll now take from Goldman question

Toshiya Hari

on guide had QX two, and your one on broadly. M&A other the I

or a the of above X% you're reminder, I then how to baseline? is In Just the when guiding guide of component, new think node And organic this seasonality. is QX significantly kind guide, about within the How typical as of talked revenue organic, much QX up Bertrand contributes growth. the the in is little a obviously that embedded about much bit at is the terms of But beyond think of anything QX sequentially is midpoint, and one-time which modeling or organic? M&A? we it X% there 'XX transitions you QX

into And of you QX part about the to mix sequential higher talked of Greg, or first it? question, is Is gross then QX. normalizing improvement the in two costs manufacturing terms being abating issue more essentially an margins. there kind that or those second in and of

Bertrand Loy

Good morning, Toshiya.

the let of Greg margin answer gross and will question with then your start the question. me I part Let first

expect we logic in the the And up combination to So industry, of actually to to get guidance, memory sequentially And an we industry wafer at represents of expect there, to sequentially, X.X% the nice growth. the the the that a -- I'm you that modestly sorry, you sequentially. and industry it's sequential as way we expect sequential first, starts look see if the down uptick have QX and assumptions go back midpoint the pretty related of the in around result spending. see rebound a CapEx or mid-teens to modestly we enjoy a that

that's blend a up the overall of backdrop, which is X% So industry sequentially.

basis So that to Anow. add X points coming from about

the we company So expect Chinese a $X contribute them acquired to QX. Anow in bit and filtration QX, we in million, million is that more $X than about

So, the organic platforms. liquid the a of organic deposition come And coatings, specialty point will excess that growth XXX growth and really rest from implies strong graphite the is performance materials, basis filtration, market. then in

logic of as and are really advanced in which to you node linked, most So advanced memory. mentioned, transitions

your of I new momentum. is I'm of question, in as that of we transitions. momentum lot timing would are both a not So you of into node part going it well XXXX like but new second forecast, run sure magnitude that our rate We those necessarily the know still terms as those node hard well, normal? the expect those transitions transitions of the as to

QX for on QX, turn the So, question future. it now. And the in momentum gross the mic think for I on like Greg to again, answer bodes let's the We just margin. I will focus well to

Greg Graves

Yes.

Okay.

function inefficiencies. and guidance to slightly manufacturing couple things. One, margin, was being gross a mix talked regard QX and some of short with of So we that our a about

manufacturing QX, move twofold, really improved into and improvement the we improvement much efficiencies. largely change in As mix. but we don't is The expect is volume

Toshiya Hari

was you then But preferred unique perhaps on Bertrand, history my the touched guys next question elaborate what your have that if synergies that, the briefly of revenue you the second the company becoming kind Anow with in the when as and model M&A the you M&A. like? potential Clearly the that, you And M&A it think about Anow your Thank years? remarks. look comfortable on combination you acquisition over can you on with kind touch about on years? of a long-term sustainability couple of if the growth the you. is pipeline then And bigger of of next percentage over you M&A across going related are your How seems forward? businesses couple can to of and

Bertrand Loy

growth as I very you of acquisitions and believe certainly our Toshiya And believe the effective acquirers remains pipeline strategy. mentioned, in been So many in M&A I ways. major part that is we've actionable rich past. a our

with certain years. for It of then a think When a words, competing add membrane it know is types to other we we've time have in Anow long in has And have and discussion to comes DSC, list we with company to QX. in So I would Anow, number XXXX in MPD Entegris. well. of a supplier midsized this to of opportunities to XXXX been that the of long small been we and already been Anow deals

China this we filtration expands access Entegris. non-Chinese what that going only already only Anow help technology, and brings expand the strength we their to but it on us at about technical the a acquisition have capitalize also to Chinese is greatly complementary market, expand not not expand but and that market like membrane and of their global And access capabilities on the reach help So portfolio also that's scale. in

very the are to to So our excited we new Entegris welcome colleagues team.

mid-XXs would a We This a business. grow high And bit CAGR to expectations to come. that little this the expect less have $XX in basis years that the a generates on for million today annually. business for we than is business

Operator

Sidney We'll Ho from Deutsche now question our from take next Bank.

Sidney Ho

Taiwan it's want given to question. implied as QX the especially as the previous with some But not of last your just there's X% I guidance much follow guidance to I quarter know pretty from X% you is good. supply expected I mentioned large there's think SCEM. a customers, in QX I quarter offset wonder ago? what compared was constrained from just if here as you any I upside and think that to

Bertrand Loy

no, I we is guiding Sidney, what are with think to what describing. much been we So consistent very have

you stated XXX in in would by that line suggest. outpacing very to and really industry performance, QX what the are at with year the the full midpoint much objective look put points that XXX And you XXXX. context of that's guidance in If that the of broader I we think the of basis

So no, we good. feel

the about success for that is customers. guidance we the QX that And the full good of about feel We the of a with think of long-term industry that market frankly, to of and feel we're I number advanced XXX products year. logic the this points. we our said, engagement think level outpacing XXX good I As of the new and ahead introduced by I for objectives basis stated in advanced well year providing our memory

Sidney Ho

you think What year both last My guess the is, X%. I we do MSI follow-up be next for to any are what quarter this should to that for the that MSI of and for thoughts year, X% expected I attention moving now, side And preliminary MSI be to? are you industry CapEx down things? your parts to and have on paying the thoughts

Bertrand Loy

year And were last for spoke And CapEx that's So we I in think MSI down basis we that a is year think to low-teens down and full MSI projecting what about XXXX. now time guidance the expect our XXXX. XXXX. X% into in mid-single-digits, I full be on behind down we expect right we really for

early too It's quantify our to on views us for XXXX.

certainly us But around early and too around you to positive more guidance in industry for think give tone I you lot -- now, capital spending the there's that a XXXX. for production think I optimism levels. right a more it's

Sidney Ho

is down what being from before? low-teens thought CapEx an improvement the clear, be you to just And

Bertrand Loy

Yes.

Operator

go from comes line your next Patrick is open. now Please from Our question Ho Stifle. ahead

Patrick Ho

as to an that used? materials from Bertrand, do terms moves XD both maybe content your see above? the and well Electronic NAND in XXX the layers the how a you increase layers NAND as first opportunity for goes you as of business, and in is I additional to Chemicals guess potentially opportunities from opportunity big question layers, a new as Materials How perspective, picture Specialty do being see industry

Bertrand Loy

the That deposition of process after wafers certainly various and one of us, steps. attractive new the for terms in also deposition in between the both in remains opportunities of most but ways of terms materials, steps CMP cleaning

think many that we years. teams last several So SCEM for busy very roadmap to opportunities have I for position us our of makers the technology advanced been doing portfolio the our have memory on and

that of produce then wafers more see we should top-line an the and XXX as platform. see in layers, acceleration XX SCEM So you

Patrick Ho

perspective also on and in at my and materials a such follow-up do the ahead, there's from materials advanced those it also a how being as perspective? front, lot opportunities maybe that How the opportunities new question, both you logic processes. been looking there's logic changes from as from at terms also lot Materials see previously, a a you new foundry picture advanced of manufacturing manufacturing where in content hasn't look more are and the that do more the used And big used front where cobalt.

Bertrand Loy

think all very, those opportunities that are exciting. of I again, very

well that of think think with I that We of turning internally, to Waiting positioned and those a we the semiconductor by support and adoption cobalt, I on and those materials. the to are those investments memory, have that new approaching of industry, few logic both point. made consciously be others. broadly have the really been focused in think of materials and materials, And MPD acquisition DSC the that I adopted we we for some lithium all are

form, Entegris challenges. of some And very to leveraging of our comes will we've a I materials. solutions, way think be materials of the capabilities by unique solid that develop able at the number been that those is with Many really a palletize And the to wafer unique solid on metal develop also materials the those the the solid but can delivery in considerably three gas divisions made the outlet. deposited system and purify that be a onto very before to

unique have business we approach various units very in So that the have our that portfolio. the system is of all that of capabilities leveraging we

cannot think I we those the in are chips that of positioned to we case. again, So the the very the for support introduction well new just metals and advanced to or be adoption wait

Patrick Ho

of semiconductor because me And how R&D lumpy lot of, I in comfortable related need you for R&D those from of process, a a terms these? and up manufacturing changes the of final timing two elevate these Is feel spending. R&D the you see just But in I can to have projects. Greg term? to today? do inflections you the question given know of questions be with Or to kind keep longer R&D there with guess, percentages do very certain

Greg Graves

I in intent But but you're need mean, targeted increases that's accurate. and with haul we R&D over line now, spend light this point, increase revenue really little time. long spending were X% is we But the our that a in the Our that is the to over Patrick at increase in recent will bit quarter. intent to that revenue. most of of our

Operator

We'll now take our Capital Chris Loop Markets. next question from from Kapsch

Chris Kapsch

morning. So I'm juggling this some conference calls

dramatic out improvement this and up nanometers was guess XG. were So starting on they're and with apologize I -- the -- you've about about about TSMC's to talked all But curiosity pretty yield everybody referring already. saw is how nanometers. are X there and touched you at my about being that CapEx ramp pundits you’ve that that news if TSMC's obviously, X increase, impressed take Bertrand you've already But

way the terms and record in to is of now the most just any you of think achieve that either X my as you've and a transitions for node timing that there's process to to if the terms up of And TSMC is, would in chipset? or to to question way opportunity ramps wins So content segments frame Entegris of per on -- there which been transition. it able from nanometer benefit

Bertrand Loy

magnitude would customer in I performance But about done that of at opportunities, only that will of proxy chemistries. have our the of we specific talk the that new drive I island. customers for good look opportunities the new on the never adoption that. itself is and at won't certain I for the say we think have think lot Chris, a Taiwan, we need you a if So the new architectures materials

level our render all the greater of security also actually of will and for increasingly technology We require value all that proposition leaders. important

really I long-term is This our are well is by really think we positioned. the commitment industry what XXX to behind to XXX points. So outpace basis

aside that and been AMH any of believe there why commitment customer the make SCEM, are advanced those because putting exciting bold even industry to nodes, to outpace number willing it So very consistently is a would reason that at the filtration I we in consideration, again, specific opportunities in that. in leave we've and

Operator

David C.L. Silver from Our next question comes King. from

David Silver

few rapid pleasant points Thank say, or and of from suppliers the and next erosion revenues for cut might some been forecast declines between And were in TSMC. of years? mentioned. is given a or CapEx, memory in perspective around I TSMC. other quarters, also that foundry, on legacy some question -- pleasant a the wondering, period, and you tailwind preface you. your this business of have had that the regarding adoption little you've your to bit. jump But remarks broaden have a just versus transitions I'll what follow-up And demand I'd nodes there two let's over the divergence believe is my node surprise I comments the take for between course, some comments industry, chip last data like maybe or I'm diminution makers, maybe or and earnings you by apologizing, others last And to from their could we've I'm to one IoT wondering, has key maybe instance, heard node of a the the a whom directional be So logic? there coming more sharp the was if from away? during the this whom also a IDMs divergence

Bertrand Loy

is a I year say difficult way industry question was that has the choppy. XXXX probably The to been navigate. would the So to answer

uneven the on we see fab, playing in performance could yo-yo some are them very CapEx is You edge very was you with and production that actually And mainstream many I muted activity XXXX. high that of some level of I this mentioned throughout different across segments some trends proud the in and think our of industry think year. leading why really of levels

think our I the to the stability resilience that and we've still of challenging able in a of platform what been business very again business model, environment demonstrate our is relative in XXXX.

So, again, as that for memory bodes well ahead where about think those the drivers And for advanced hopefully lot mentioned, logic technology excited of advanced I most the I us on roadmap there better makers. be and of of a us years that are what's turn of reasons positive. to

David Silver

a question maybe follow-up regarding earlier then -- M&A the I'd pipeline. on believe to And just like I your quick

pipeline remain So also noted just I'm that the materials. pipeline of rich. deposition to a as couple in opportunities? you your point remains the the your has niche already strategy that you've materials wondering, company mentioned And made Or Thank house? of you. deposition is a support does in this acquisitions advanced And explore at what's priority to advanced efforts develop you

Bertrand Loy

to filtration, capital have and consistent add last of go areas high-treated see over would would to. very you that we want packaging materials, has several highlighted allocation consistently if very transparent framework and our years been as portfolio where back, So our and highlighted we you the

to we where I reasons materials into you add think of there we I'm And that generated. continue that comes hope pleased I to we're about years, pretty that actually mentioned, could results where materials, us and And invest very over areas it us. be are but to and that reflection believe as choice to deposition at last of there’s values the created of should to two when expect the think completed types think actually various certainly the looking successful become one at to that we the to pipeline companies. that's that can acquisitions interest that of pipeline. I behind of and growth with we've other I So that acquiring integrating we've and a the is be been I talked

Operator

from Amanda question Citi. next Our comes Scarnati from

Amanda Scarnati

Just talking of capacity. sort about

still new and just earlier online it expectation $X you to are the with is coming $X quarter. to regard how fully million committed anything capacity next in add was talk that that to seeing already revenue about or mentioned ramping this this different You'd quarter up? million earlier And Can with year, capacity you that? is

Bertrand Loy

Amanda, at had this is online Yes, capacity in of start-up weeks to and setbacks the operational a good faced couple bring expect is were actually that we The late. division this we question. come that that SCEM capacity to within point. expecting QX. And our next we the this in some in issues, one we're of And QX online

So access QX. we didn't have to that in capacity

We expect to recover from that in QX.

Amanda Scarnati

sort of third there recover of is to received the it million $X at is Or have spent an max kind a of quarter? that, would that And so you ramped in some capacity? still when or that have in quarter up, about fully is would opportunity

Bertrand Loy

Yes.

then quarter, is in be that you're to expect the some have capacity I that indeed. benefit right. full million and recover X I’d online on the probably the of to closer of expect but X quarter, to be a Given where X we that are we say in business able full QX million X we million to Once million should and would I’d to

Amanda Scarnati

quarters? you over starting can your to lagging changed of that's new what couple edge you last sort leading then leading Are see And just to us more edge versus percentage activity edge? how the customers? of remind any as the of sales And from coming

Bertrand Loy

number new mean in memory 'XX. than revenue year, in a has is I coming be I back simply about from roughly. But I levels beyond. that XX% inflection products a to the we're think fact It XXXX was very advanced down that track we we what of this contribute don't 'XX seeing at We expect this in lower look and -- precisely. bit to little the about would and the activity that reflection a is bit and new XX% point really come products that think

Operator

Keating Our next Blake from Securities. comes question Seaport Global from

Blake Keating

Harrison. on Keating Mike Blake is This for

You kind visibility recovery your next see such quarters? because you orders. into can four three getting quarter of a commented turning Is uneven better last over that more that expect that visibility was still Or forecasts the we to should recovery? improving were spend

Bertrand Loy

we was of that we in business, really And represents of visibility good -- done context our that a part platform. that XX% our of So actually I which total business. on pretty about the CapEx our comment believe have

Blake Keating

on the another and on level kind question capabilities? then integration being also, And able it there the touched you're acquisitions? maybe or some already. excited But additional then in could capabilities the Can going And is world process on through there are currently leverage you that your you where in M&A. about? how And of update acquisitions regions you are confidence to improve us of pipeline these still

Bertrand Loy

question. That's good a

PSS, you in at platforms year, that doing both record QX. So Pure of those generated completed last those acquisitions the we of quarters look well. and so both Actually Gas are if SAES acquisitions extremely

own a would actually with do integration the the we performance DSC pleased businesses. And innings our very DSC, early lot of and of in capability. integrate integration. were those lot and of MPD of MPD very MPD a have the to -- very, So how of there's with still that

the So integration that completed will plan by that's an XXXX. be of middle

keeping the eye we on focused little that. a early too for very obviously it's bit frankly us are very But very, are to on a teams So that. and comment close

or of our So regional the maybe strengthen the regions. capability your footprint to through desire question around and certain part in M&A our footprint second

Anow So a is perfect I example of think that.

a investing lot obviously. in We have been China,

new in option we another partnerships. our year. We China in investment customers. us in tech support products just option in earlier really -- Entegris center an other have and in We on only for around manufacturing but invested Shanghai announced new is sales Anow offices, not later of this And potentially types a local are local is to that filters,

are And excited the so one that’s why very many actually reasons about of we Anow.

Operator

Misra Paretosh Next question Berenberg. comes from from

Paretosh Misra

driven months your three like versus book-to-bill what business, looked ratio In CapEx the ago? is it how

Bertrand Loy

greater still So than X.

we And visibility of well. again, to well I so, part that fair a on that do expect business And of pretty mean, as QX have business. in we the amount

Paretosh Misra

a -- QX, then Anow, this you from the provided like revenue so it's you EBIT that any or But in expectations have second in -- that? did question. acquisition more And housekeeping the Hangzhou

Bertrand Loy

$XX basis I just in the the profile of and few that mid profitability on we're revenue on that that expecting of just to XX% short is a next CAGR grow didn't earlier comment We business. current mentioned the years. business the million over

Paretosh Misra

And Got apologies that. one, it, for and and…. last missing

Bertrand Loy

okay. It’s

Paretosh Misra

all the come cost in one flagged answered Sorry that expectation your million you that in is in of earnings But that incorporated if next the call, already, some you've that previous too. or might completely QX savings $XX in year?

Greg Graves

we're Yes. What we'll is by saying full end QX of that. see of benefit the the

was our was look of we of result than the you parts but -- savings. saw enter QX some at a in as as that OpEx, those we in QX, cost at So be slightly run QX. see part additional expected, rate better will of We'll full that

Operator

Company. and Krish from Sankar comes question Cowen from next Our

Krish Sankar

or CapEx it’s kind your been more China-based color your two I'm have also so million spending be had look $XXX Chinese in-line would was just at on a any to lot, And -- of a with quite was I $XXX grown haven't helpful? I China under follow-up. that so curious Bertrand, of revenues the it I if so. revenues last compared China versus the them. why million year-to-date has impression year-to-date, about about I

Bertrand Loy

good 'XX that year-to-date year at result a which given Yes, so look the if in than China you the is up business I China last lower of basis, our was year. actually it's fact CapEx significantly in X% this a on level think

business was of and you were to was it a and geopolitical our be up. very AMH context a performance the customer-specific There for SCEM Microcontamination our down our if basis, at context overall, and up, industry -- pretty China. business sequentially good But couple look situations China, feel our business on sequential in of given activity about in in level XXXX. the the we So

Krish Sankar

recover. Clearly on is question and the final selling defer customers? memory gross gross a and lot point memory some margin. Bertrand. margin helpful, between profile to future, at spending Does now right foundry then That’s will foundry your And in

Greg Graves

have I is margin unit-driven a really customer mean difference there's in a the nor say our I really would driven products margin not are average, category, much below categories all relatively relates of in corporate we margins groups, some products. the difference it CapEx obviously. there well products two similar. specific in that are any the that as corporate average, above to But and between between Actually are really our

Operator

Our Hari Toshiya Goldman final Sachs. from follow-up question a is from

Toshiya Hari

nicely. was the for up much taking your follow-up. so Bertrand, America North business Thanks

I year-to-date. up XX% think

third the leading teens. in to in think or the logic the the key you. it, of if high on at M&A? driver kind look a quarter perhaps I was at mid just to it transition node up edge more I there Thank sort you there of was Was think the year-over-year

Bertrand Loy

so -- Yes, right.

components. inclusion as in MPD So basis, that's so well And One leading indirectly revenue. manufacturers edge function edge supplying leading of many America organic fabs, in of business. But with growth North on those an edge. Microcontamination indeed as significant then leading the well, chemical in there’s is a very opportunities of as all couple nodes of opportunities related our to some

So -- of very said, North to strength you on pleasing sequentially but a and the see very, year-to-date basis. America as

Bill Seymour

our question, final Thank very much. you operator. That's

Operator

call. This for participation. concludes today's Thank your you

now may You disconnect.

Entegris (ENTG) 24 Oct 192019 Q3 Earnings call transcript