ENTG - Earnings call transcript Q4 2019

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Operator

Good day everyone and welcome to Entegris Fourth 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, Vice President of Investors Relations. Please go ahead, sir.

Bill Seymour

Good morning, everyone. the for announced of fourth 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 call, information defined Regulation G. to and presentation. the annual report recent regarding our in most with the on these Additional information also measures SEC On filed subsequent the risks to that quarterly disclaimer contained SEC. the as have and financial the non-GAAP Please we uncertainties are in refer we and by slide will this

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

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

to turn Day, May the it, New out recently the sent call I York. XX XXXX Before and in our over see didn't place case on we've will take for Investor save you a in Bertrand, date which Analyst

event We and be the near details out sending the registration information future. will in

With Bertrand. that call hand I'll to the over

Bertrand Loy

you, Thank Bill.

for the on some quarter. going with and fourth year our comments provide on first open make our see questions. details line into more our we quarter full for our We'll and and will I XXXX. guidance on Greg follow view how things performance will results the financial then

X% pleased X% record as quarter really largely sequentially with performance played the in The grew sales, expected; year-on-year. am I EPS. resulted strong and sales we quarter, and in fourth our EBITDA which out

in of by advanced nodes, technology materials by division grew SCEM XX% Our applications. for driven growth was deposition logic specialty and materials sales sequentially; predominantly

margins also MC control EBITDA effective Our The our sales EPS growth significantly in into sales grew new were and quarter. nodes. the gross up translated improved expense margins, sequentially, and and all benefiting from profitability into X% sales division

record market the achieved by outperformed were organic XXXX, an the full which in estimate we X%, at XXX X% on down the basis of sales, organic points broader down Sales was up year. for market basis basis we Looking an on we year the means X%. and XXXX

was our solutions investments by environment, profit large organic in am importance results. part advanced areas increasing driven leading-edge during strong wins filtration maintained in that customers, to challenging including traction deposition XXXX industry of in I outperformance strong and of continued a despite our significant materials. This position and delivering R&D particularly pleased liquid our we while our

the summer. And Another organizational customers, Best highlight our make at has realignment XXXX, in XXXX very us Supplier fully to finally, demonstration responsive in in Award provide was the Entegris a won leaner, as our value now customers. put more we we of agile the are proud will been place more of implemented that a we and This and reorganization the Samsung.

the differentiated our Our the of model. our unit-driven especially showcased XXXX, market and business challenging end very teams' execution performance in of highly a in strength resilient face

materials intensity greater greater be of are factors primary the and the nodes, of performance. generation defining transition seeing next to purity, in As materials we semiconductor new now will the

and Entegris crossroads intensity the materials you at materials As purity. squarely know, of operates

yields the positioned or believe to to targeted other and been achieve In words have we never customers of help reliability. levels we better them our more performance, relevant chip

share SAM to reliability the number brings significant fabs. The expand an give of applications. in and eliminate fact, customers market and in full attribute us a fast become growing of our applications Entegris to of impact a solutions long-term mainstream latent positively a automotive products. their has In will reliability chip mainstream effect suite opportunity our help

shareholders. allocation year During value additional capital decisions creation our to for our led the

investments of of approximately key area capital of in the and $XXX been and internal than more $XXX allocation Acquisitions allocated R&D CapEx $XXX have we We investments acquisitions. in to and XXXX shareholders During $XXX you million been invested to of for as returned component largest our historically a which us million included million growth. have $XXX million capital million. of know,

alone last years numbers. reported million and acquisitions basis XXXX $XXX on to to approximately contributed In a completed sales versus the our in $X.XX incremental EPS non-GAAP XXXX two an

tuck-in to Acquisitions set, have areas solution the filtration. we also been materials did our the broaden that XX of and months. last targeted in four a particularly acquisitions end, in To way

company was The which acquired make first parts silicon early in MPD of fast-growing slurries market, a we CMP China were filtration located and serve different in which for two carbide Anow, third DSC the globally January and portfolio materials the and of advanced Process of Solutions. markets including infrastructure. vehicles the our expertise brings electric and some the gallium specialty to serving addition us communications XG nitride CMP Sinmat of broad significant end and importantly technical slurries fastest-growing Sinmat substrates,

are applications to high-growth types perfect and of accretive, a technology The value the differentiated want in unit-driven, Entegris the high-quality, serving in years two businesses to we acquisition examples of platform; we broader made markets. add the past

will cultivate of Going to pipeline continue our forward, we acquisition targets.

market XXXX, Looking industry the like on completely be and very while to would some we provide not environment perspective and expected our utilization healthy. it in to At solid how throughout increasingly normal, are foundry, In high year rates to level, see and the the the a positive. I back memory ahead business. looks trends believe logic market, very impacting are the we to

on very impact we both In see positive which positive and technology XXXX, Entegris. addition, logic node expect also have continued in memory in transitions impact to of would a

business, own be Looking expect year. at record another XXXX to our we

to for X% our to XXXX growth X% from unpack the of XX% math rate in that and like to just to annual expect range I XX% growth sales would We you.

share, total top outperform grow we units on of greater are this is On approximately be expect To X%. by expected CapEx-driven XXX stands to and the start, and purity we our to and intensity based targeting mix the ecosystem. to outperformance throughout requirements our approximately driven as by on of and market to market our capitalize in increase points XXX this the industry we an materials basis market SAM

that In add will basis the to acquisitions XXXX. points in addition, expect have to already XXX we made approximately our XXX growth we

sum this XX% all translates our guidance you to for up if XXXX. So it growth to X%

continue of full of than to to EPS, run XXXX non-GAAP terms greater in and EPS In excess XXXX $X.XX. achieve a in we $X.XX into non-GAAP of expect EPS this exit translates rate year

XXXX. our In unit-driven the record model am results conclusion, XXXX. and I optimistic in resilience very very And pleased of am prospects in business about our our I with

I customers they Entegris. our Before in turning to for and confidence thank to want Greg, over the place trust

teams provide privilege thank direct for is success lead an very world and result such am dedication the customers honor their day. I want of to a around great what exceptional and have relentless team. efforts. to the the their the also proud Entegris of every they our of I quality and accomplished service Entegris is a we

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

Greg Graves

you, Bertrand. Thank

and excellent of sequentially. The QX sequentially. EPS down fourth in On were XX% quarter were $X.XX guidance. basis, a quarter an million EPS up $X.XX of share, XX% XX% line per year-over-year diluted and sequentially. Sales was our year-over-year for $XXX up Entegris. and QX up with sales up up year-over-year GAAP XX% was was non-GAAP X% X%

line Both mix. basis non-GAAP was margin expectations, basis volumes points improved QX. on driven gross with margin gross GAAP primarily our points to up gross XXX margins and margins. and were sequentially and non-GAAP sequentially, by Moving GAAP improved gross In higher XXX XX.X% in

We QX. expect gross margin a both to non-GAAP basis on XX% in approximately be GAAP and

and included a QX expenses and million, were were in of $XXX high costs. deal amortization expenses from $XX million total guidance. integration operating the million costs approximately in slightly operating assets, above our Non-GAAP of GAAP $XX approximately of end QX intangible

$XXX and or $XX operating be million QX a income income non-GAAP $XX operating expenses $XXX $XX million XX.X% at of operating operating or GAAP and expenses in to XX.X% be million revenue. the revenue was $XXX expect was GAAP million first to We record will million million of non-GAAP quarter. to

and for was Our rate approximately non-GAAP XX% was XX%. tax the rate full year our tax GAAP

XX%. non-GAAP million quarter modeling $XXX For XXXX, XX% or revenue, our basis year. has a which was lowest XXX record It's both approximately the and purposes up of approximately we also be rate typically tax first the for was points, expect noting the year-over-year. sequentially worth the of XX% Adjusted GAAP tax quarter to at to rate in both EBITDA and

sales benefit impact and from million SCEM Turning $XXX MPD XX% by for driven QX division. primarily into DSC of and new of we advanced very strong. continue the The to year-over-year deposition materials, positive by our nodes from sales the performance acquisition. were increase was the as to

and materials materials. call, significant to gas primarily sequentially. third expected quarter said SCEM's growth quarter improvement This and we in in fourth advanced driven On rebound business deposition a a substantial in businesses by we the in SCEM in grew specialty XX% the was addition our specialty

operating sequentially. The expected for operating improved higher points and XX.X% was increase almost by and SCEM basis driven in mix. margin volume margin primarily Adjusted was was as XXX up

primarily QX filtration. sales sequential the up sequentially. increase were was in for and sales in growth MC X% of strong X% liquid last year-over-year from million in by The $XXX year quarter up driven

of business In was for in addition, filtration pressure a much under we saw continued gas XXXX. QX, which is improvement in CapEx-driven

mix. was Sales by XX.X%. margin Adjusted and acquisition, in closed Anow the The margin was which year-over-year the quarter by significant for improvement September. impacted were MC fourth positively primarily in operating also improved sequential driven

year last sequentially. for million This and $XXX was wafer flat a sales QX products. of handling were The and more products. handling sales other up sales in than X% offset driven decline increase from fluid primarily AMH of FOUPs by year-over-year increase

control. is continue industry for by We modestly which year. expense division our primarily was downturn effective driven last trends in was CapEx-driven margin impacted operating Adjusted XX.X%, year-over-year, up by see AMH, most AMH to improving most the

expect new flow to Cash cash product the $XXX Free volumes introductions. higher We $XXX million. and from through margins year improve for operations AMH XXXX flow was was operating million. on

reminder included the after transaction costs contributed transaction Versum As cash million. which taxes and $XX a fee, termination approximately XXXX flow

collections cash inventory CapEx expected, primarily receivable driven improved the QX million. levels. timing in included cash flow As during by quarter of from of $XX Uses lower significantly and of QX,

million year we CapEx. in For the full invested $XXX

related spend introductions in new to well CapEx in as expansion. XXXX $XXX support ongoing to investments expect as product our We approximately to million capacity

with million dividend we for repurchased and Consistent quarterly used $XX for we capital XXX,XXX approximately over strategy, $XX million. our our allocation QX, shares during

$XX of an price repurchased per For at XXXX share. $X.X shares all million we average of

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

EPS We per be for of a in demonstrated model. and In our year share. $X.XX the our market EPS to $X.XX $X.XX Entegris an excellent was XXXX and per of resilience expect to summary, the $X.XX challenging to GAAP share context to be non-GAAP performance really especially

environment driven to outgrow SAM we in positioned we well constructive our XXXX, into market share. market more see as both industry the are increases Going the again once and by and

in our confidence us gives prospects for All XXXX. this of

Operator, we'll questions. now take

Operator

will We Instructions] question ahead. our [Operator first of Patrick Stifel. Ho go Please from now take

Patrick Ho

a SCEM XXXX? I see maybe guess Bertrand the where for you and first memory. by Can areas foundry, in some new strength color be your where you capitalize industry off, transitions for moving terms but in give some talked QX, XXXX you there. only XXXX new and in logic seeing may little of business XXXX not of pieces the of you, about outlook driven and we're the the in can deposition In in or the some growth particularly both you of advanced in guess of opportunities upon bit in on products I

Bertrand Loy

you good Patrick. question. Yes, the for morning, Thank

engagements three the made really years from control that to benefit offer positioned lot over we materials last memory value contamination two, know, advanced as you nodes uniquely for well have we foundries, - proposition in that on not have new all in as after indeed are in believe because we we that. So customer XXXX, solutions, of of of but a many in future advanced years the we to is our progress centered, enabling and that as the just

means materials. So for that that I deposition expect really our significant outperformance would

significant So outperformance our new I would for expect etching solutions.

and and we've objectives our number of also course, the and aggressive have photoresist of for the to that we applications. specialty last in liquid and introducing for very clean continue XX bulk filtration a new some very been coating months both and in applications have in point-of-use etch solutions for for developing market aggressive platforms, wet We objectives

map in have that makes I we the the I of instead breadth So portfolio, the truly that can fact many road will is platform and Entegris any that singling we offer think solutions the product product the particular think out outperforming that industry what frankly unique to industry significantly. expect we lines of be our that

Patrick Ho

and And my question. maybe Greg follow-up

how environment, supply a guess chain, given recently, small had to some long the manage and this that management that working integrate been starts for get you you these able the have to strengthen I capital the on turns do How it around acquisitions same through manage past? the you But in and both acquisitions build time, do particularly year? the downcycles. and the to you've sure been been as able you You guys do make you've that have upcycles in

Greg Graves

Okay.

take I'll for us. big components I'll about really. two So that. talk

First every year for at mean, us year-end runs job think very good of XX all, accounts we've was done I receivable days. a about I there.

days. DSOs in do good you a continue customers. had some so to acquired by the tend We companies acquired The a little to cases, DSOs longer, did of with bias there bit SAES greater when see them for couple to our be a even instance, we jumped that job we've Asian a

particularly but China, is - the we're mean to we're our and with on the a uncertainty the balancing industry, reducing our time same MRP to that combined got major around the inventory cautious. improvement I initiative globe I around in the at side, inventory year a be see where inventory, systems the say given we've would one real On expect the management going we be in this act hand, to going giving expectations our focused

to Our potentially about the inventory. have sure if this through just year we we is the constraints aggressive. supply to year chain is aggressive reduce be goal too it some long-term are not given could We're

Operator

Please Sachs. ahead. Toshiya will now We Hari Goldman Instructions] our question of go next from [Operator take

Toshiya Hari

this, you're about kind your talked the how potentially within and total the wafer can I you be talk growing to you. OEMs side the CapEx, in would equipment then about versus are market can mortar, side and opposed of infrastructure the missed of that of to And see XXXX as sorry X% market but about helpful. likely if differentiate you bricks what if Bertrand, thinking you CapEx your WFE side market. Thank between the

Bertrand Loy

Thank with primary MSI so business. let me the driver Yes. Toshiya, it's start still our since for

you XX% revenue as the activity. is of fab So know, driven our and by really

comes normal X% that our assumption that's about When for of XX% exposure total MSI that, that really means of So believe CapEx, is so to we it to for is growth MSI. but revenue something annual rate and XXXX CapEx, most is of as revenue. tied is you is tied XX% know of construction approximately construction, our only really to about fab tied our is fab new and WFE which revenue, total our to to that XX%

assumption year-over-year. that not the So, annual growing total please much in expect the for we or projects industry indeed faster keep about have we mind fab than will at do But the be same likely WFE CapEx grow very we CapEx X%. at recognize and to when our new X% time

Toshiya Hari

and next Thank earnings. your Obviously in without over you, deliver on the can sales you've that Bertrand in pipeline talking like million have enough or is XX% years. a roughly quick over contributed repeat and replicate years. your Thanks. made result pipeline, you towards next specifics also acquisitions robust of that three as follow-up, the the two think the that couple mentioned Do of some you to M&A years few that feel prepared past over kind to you $XXX of remarks the in you

Bertrand Loy

But $XXX so incremental results, million clarify XX%, XXXX results. answer the time effective not time in Yes, mean, is and integrator as broader to we reported the value very versus what accretion XXXX revenue to the shareholders. XXXX an reported we can a again for we at the $X.XX approximately our just of said so then both beginning, acquired long-term in that and compared maybe acquirer, let $X.XX you me we of significant XXXX create demonstrated and we that customers platforms your have have that good I believe Yes, question. are our the

find served expand that that more that we healthy we targets a and I Sinmat opportunity of recently reasonable is and hope company an will can acquired gives our DSC, market. give a which potential have just to would say MPD, us we Anow pipeline like us acquisition opportunities and that

that and acquisitions to was deals small X be or So relates complete yes, I X to that able pointing have growth think already I to hope would find XXXX. to the of to to I executed we'll in mid that points additional the we growth other size

Operator

We will Ho now go from take our Sidney next Bank. ahead. question of Please Deutsche

Sidney Ho

the for details the of Well, we first think that and thank what certain How the and XXXX spike do going the that I quarter taking you market kind for of the guidance, itself QX XXXX you saw appreciate terms the on both in to you a progression revenue are in is of guidance what assuming all like for very much to of the like the look in Entegris. the XXXX to X% we My relate for Will and my in for see questions. both guidance of year question behind impact is guidance. coronavirus? XX%.

Bertrand Loy

coronavirus impact So be impossible start on say we precisely. let industry would the based I quantify what to the question. to closely. our with do to to supply the that But that obviously we impact obviously on the will not nearly our know very is we today, on me virus that customers operations the full basis continue monitor on year to believe or and material our will a chain,

bottom did risk But the I a will longer guidance and relax our admit of shutdown. account to into little just potential bit QX that the we take of

for we something our that consideration that's took into So QX guidance.

of performance to Entegris. back risk be quantify steady full in have basis every a quarter of full first to to material But it your will try of year we every, that's going because performance expect a things. part and Then the that think don't improvement a our question, we year to not on we decided two the to function impact going

to advanced more and first year about I'm fabs also see also of year half is second we And thinking of the than industry both for node the DRAM significant over advanced The but us. year will first the why transitions years expect part that in specifically memory then of be number stronger mainstream particular. the a and to number half strengthen reason foundry the segments a expect would end here the of that's back of the in in I and

Sidney Ho

your I somewhat Within China, at to Korea, sense. if going of back strong. maybe down revenue the you multinationals and makes make geography. that the about quite in and - China any of that and look surprising lot May Taiwan strong, that's very QX, terms of bit a a dynamics to different. be China, acquisitions kind was the see by can a little comp is talk Thanks. the between domestic bit

Bertrand Loy

Yes.

and correct, we to Shanghai and China posted pleased business a of with AMH was across opening if strong microcontamination you're obviously. that that's make opportunities say for is manufacturers, revenues very us market, and divisions strong I'm QX in in we XX% performance of reasons market, continue of strong and very domestic China center the So all performance both tech the really record comes earlier for that semiconductor today But announced XXXX. We investments. growth significant performance new in one the anything, so Chinese a from to lot very important a in

helped our significant food platform, benefited handling purification of we QX system. that fab comes product fluid lines projects obviously performance new really our our helped number so why reason sequentially that in The a from and the was gas and

a plus So year but plus full in XX% very growth actually you remains strong, see that's sequential in still the China. China, basis on X% reason that can why

the end enjoyed came number equipped three sequential QX. mega - behind purification Korean customers very enjoyed decline fluid in fact of solutions, some The the - systems gas of Korean strong But we to our fabs. in is new the Korea year, of an we handling quarters in those a for projects in demand first and story that several as our

So that's sequential really contraction, in what's behind QX. that contraction

the perform the in evaluated to well unit-driven a more that we for count really point - really and Korea memory. of would the fact that's Korea architectures did the is molecules SCEM advanced success of in I and layer that that new said introduced business higher which or Having on reflection being even a with

Sidney Ho

If I in more. can squeeze one

leverage profitability the CMP acquisition a that wafer to size growth potential. today, where it of of broader help at that to go Regarding and Thanks. a is semiconductor looking understand going business the you that of Also, Sinmat, where business market. the and bigger that picture can the us can market is maybe the you

Greg Graves

hard So in very or We years. the would and that's believe if you less developing today and like carbide really market and than expect segment that to to our is X is ultra significantly. that million. nitride market the be specialty grow particular - few silicon for Sinmat materials gallium I next focus will slurries mean, years. market more that X I this to over Today $XX next probably double going

of ahead lot us. a So growth of

objectives, independent So run it only enough that help that we also platform very what stay of be comes reason of has fairly can think are not really really the The on platform that in one Asia. and board our do integration Entegris. in but do Singh, that chosen is the you to the to of and rest when team intend we we Dr. the his really when U.S. from about successful fortunate want we is that to him to founders,

by to enhance invest to global the value proposition. also that by continuing really network, quality their their So to continue is goal systems distribution growth just processes and our to but to access enable in manufacturing giving Sinmat

So we are excited. very

think and that will plus next great be we great the XX% for technology, business few team I believe annually growing years. at it's a

Operator

Misra from question next go of Please now ahead. Paretosh will We Berenberg. our take

Paretosh Misra

changes cetera? are how you you maybe perhaps can On implications contrast in and year they in in XXXX, big mix, you're XXXX node for seeing of when how last side, from of et what the terms the provide different also that versus demand are terms any

Bertrand Loy

Yes.

will what very is demanding many So memory layer more to more all be semiconductor manufacturers transitioning that the in property we to more deposited be the to first which nodes lead thinner actually the really the and we in on bring deposition the excited nodes. adoption and materials of that with solutions see can to aspect new challenging those can expect films of again architecture. introduction actually will are electrical And new makes more that of etching relying reason are better accounts, ratio

So of again opportunities we've now to working for number that number those been our many and XXXX. of a we of that opportunities new for on believe come fruition years a in SCEM division will

Paretosh Misra

Interesting. any And going major we that seeing, your then versus any on cost follow-up as that of? structure be aware changes up a that are year costs last you're should this year

Greg Graves

delivered No, mean we not QX. strong margins think particular. in in gross I I

model and continue year XXXX there to the margins for assumes gross a is Our progression margin improve. that through

we we Bertrand target which of more million - little QX, all and also expect creep few as all of potentially bit that but to EPS but a OpEx, Our and in consistent paradigm happens above the be QX, said a consistent that's move dollars our to which that said, up with we'd the will up that's sort new model. QX an into with guidance be be $X.XX

Operator

of our from question Chris next Please Loop Capital. ahead. go take now Kapsch We'll

Chris Kapsch

the, if you I guess I that improving curious out memory I'm prospects transition associated back. the two nodes. benefit the is could with just a as advanced market as things the point couple like utilization of appreciate enthusiastic your on to and demand profile, rate is just comments coming one there the

advanced as more curious, complex to architecture? as the one XXXX. to which or per up market with - wafer you more are the excited memory associated there's those the if per also Just some And is more dye look frame and it's way about the with your any layers transitions to you of nodes content

Bertrand Loy

the tell Yes, not the actually would tricky comment more first question quantification always that level most saying will for We answer wafers significant publicly. really I that to I'm that's architectures. customers do transitions by know of we we a something the that's new at that about you customer on of produced pretty what but is wafer But simply ultimately our some and can node would this are for why that be those the excited at is do. I because part

wins will those we for number time that growth on some that have and compound excess So on over us architectures of sustain years. scored help the that of sales rates

Chris Kapsch

in it it transitions the was fact in through helped XXXX year-over-year. at to level But pretty in is then both transitions transitions that maybe from strong benefit since think influencing contribute the How that both a second And the Curious I that do more - node progress fourth node sequential was, of you quarter. you'd quarter, half and the margin have and the foundry see out node those as called expectation in we margins advanced transitions well was function sequentially logic through you as progress as memory. XXXX? your impressive

Bertrand Loy

of the gross margin in really QX. I two-fold. mean, was improvement so on all Yes, first the

had particular was we having where all, had volume product underutilized the business our big then mean, had we of a had in SCEM within obviously we to the margin and improvement volume better that those about and in contributors I and being we better areas QX. we had in so quite frankly better talked mix two First bit previously were capacity

As as combination throughout filtration some expect nodes improve year new of point well. we have through within the etch, work deposition, also volumes a but margin year the you to to as of - regard products obviously with the mean, will we good the structures I out liquid

Operator

question Please of our now David next will We go from Silver CL ahead. King. take

David Silver

couple of a questions for So for Bertrand question and had I a then Greg.

with I I thoughts. fourth some microcontamination, But quarter I fairly a like say sequential say opposed of part, customers, but fabs results trying a new but in leading-edge of broad-brush think the with fourth SCEM, in at up answered production something correct start-up of ramp to in been results pickup to kind here flattish painting kind Would when there would nodes be integrate unit. is I capital-intensive pickup has in that. was as the AMH question and at sequential or the the first the that this increases price nice So of to more nice your your reflects let's just look or the quarter

major words Intel Taiwan in of had utilization Thank results. Is about Semi fair the term seeing some of for talked they track might and utilization other at what for And rising your in you. maybe that near reflection the So your newest a we're their chips. customers?

Bertrand Loy

Yes, David.

as a think fewer call, fab about context quarter the AMH. on primary I business I one and correct. handling early mean, you are, reason new is I the flat effect in we is different the sequentially AMH was of should it that the you flat sequentially. on that's So you're The reasons why projects really, had and think fluid why saw mentioned, in our dampening a

it up both future those continue comes QXs, also going up quarters in function think SCEM microcontamination QX; being XX%, more produced record momentum we advanced both and had And to nodes microcontamination to more that's of in had expect but a the in wafers SCEM that's X% exceptional When both memory. foundry, years. to that XXXX logic, in frankly, in and I the at and really

David Silver

ask I a about question EUV. I did to want guess

ready. when ago two not but or year a to EUV will quite compared maybe anticipated be So

maybe the firmly think kind business? just at a the and first you puts in versus the the pretty and I Well, growth take early your How established the or how leading-edge of now, you throughout are that forecast for and in think changes fabs you it's about Could advantage the what's of your your services? your positioned potential much industry. the of products positives signs all, talk transition been of required Thanks. EUV-related to strategy. takes

Bertrand Loy

and more enabling but that's be sure and increasingly new the have I EUV dreams architectures year about will and this will an mean to for semiconductor importantly, industry. would allow X be to continue architectures what us shrink about as wonderful to etching would materials, will in So beyond vulnerable broadly I'm complex go X-nanometer new technology really I contaminations. precise wonderful is stated requiring short those be and a chemistries old industry going we more because say and to it that's order to that is and

proposition industry ideally on of solutions to road value advance for to continue will the Entegris, map. the about think you if positioned we develop And the to the required be

they So what around the products and have excited EUV like some or But mask down a mentioned most few indirect the we supply have - opportunities we direct and are are have scanner. about opportunities management so have we and Pod really we others, even specific chain. around up the

solutions purity of those And across become the will drive and filtration, will for that mean the much usage materials broad and requirements that ecosystem. is pure stringent requirements chemistries the what for I a array and more packaging advanced need more by

come I leader as opportunities So the are that as in think will of pure packaging ultra a contamination control, we adoption leader positioned all capitalize new of with those a solutions, in to on ideally EUV.

David Silver

out consolidator maybe that January. of now or the a broader a XXXX strategy there. of on flexibility two internal move generating financial you and or Sinmat capability And question Thanks of as structural a the kind for long-term execute your cash was as of a a the the - internally. across to record might you I But rates. my about look your Is you statement opinion also the in to is year had or for at cash maybe interest outspent then number your was a talked has a Greg, a in XXXX Bertrand you guess lot. cash the to continue it when the year generated outspend to maybe add look measures. - flow being next structure in more time you of the cash was I of generation timing But might that kind kind of current for where year make related at favorable did deal it I industry flow

Greg Graves

at we'll our options. we looking constantly which what at around our I for market like said, not are is market in looking level So I extremely would said debt to say - is somewhere strong options. rating think BB as particular, I The implies somewhere we're but well right do what assessing Well, - we're now. options. constantly I'm of maintaining we our like constantly strong anything saying is on X.X the an that max ongoing leverage leverage mean I level a committed we're basis times.

Operator

question from Scarnati Amanda our ahead. take now We'll from Citi. Please next go

Amanda Scarnati

the you product that XXXX anything sort throughout of lines of if being on these revenue are look at specific new flow year, confidence product metrics growth. a mentioned your see that of couple Is quantifiable terms Last to customers. can we quantify to in in or existing that year there the met can you in introductions or horizon that order had you gave

Bertrand Loy

product years we don't lines a little certain have to chose several any a $XX million in color amount that would are more very that product that product to the mean so topline ago we new material that million or we give true the to around that to realized than have really quickly performance a past. fact more recent really line it's bit that I given line but $XX Yes, very, year we

product We have single not any platform. to elected out

we ourselves That's May. may in our Analyst choose how and to as differently that's Day something we do question asking are to certainly thinking that a about start we structure

may little stay around that's So the during details Day do intend Analyst more to tuned certain something again that but today. we have lines product a not bit we

Amanda Scarnati

to slow in sort would towards a that you you and looking of to major mentioned And case, if Are of are be a be that were the portfolio something going of activity. sort be comfortable sort the looking what of more pipeline could leverage deal? net would would piecing you and or with larger Versum sort transformative lost acquisitions for that be for healthy given may a together of the just that you terms smaller of, pipeline, be up product acquisition then opportunities

Bertrand Loy

focused mid-size we really for been a small nurturing are many the on pipeline persons actionable mean to business to two years. a now they also So is most team the have transactions many, are actually development those I transactions. we've that three and that are this of and

team. the remains that that primary focus So of

Greg Graves

to leverage around transformational push view of a And number would maintain comfortable be transaction, it. will relates a willing I rating and how if increase, for the consistent X.X kind leverage, it's up we've from pretty Amanda we think we that been structure as of our that's temporary that it can we into we're current the current area X.XX

Operator

take ahead. go Company. from question Krish Sankar Please We'll last of & our now Cowen

Krish Sankar

you Bertrand last had guys thanks year. for growth good X% the color pretty China the of and on

customer Just will one unit-driven a China of from CapEx plan? question from ramp an how that this are the that, coming this unit-deal mainly seeing is sales the strong given the domestic or side year on aggressive evolve driven sales of at or your least you has memory business possibly

Bertrand Loy

growth, in - Yes. a I for sorry, Thank we driven. answer, if our annual in enough was growth asking sequential for you over not obviously was QX years you have at that first clear China, mostly past that question, but describing clarifying XX% the I QX and and over was of what my rate QX the overall growth look four unit compounded is really

SCEM. of So chemistries all all really as again, product and particular in unit-driven filtration materials and across a performance and performance in divisions number and great in products well is which new across platforms mostly great microcontamination, as

Krish Sankar

biggest then competitors for final who the And is question today? is the Sinmat

Bertrand Loy

materials. competitors, has abrasive of some be Sinmat number of the it traditional So of suppliers would a

Operator

Ladies now you for you. call. today's disconnect. and may this you gentlemen, your participation, Thank concludes Thank

Entegris (ENTG) 4 Feb 202019 Q4 Earnings call transcript