ENTG - Earnings call transcript Q3 2020

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Operator

Good day, everyone, and welcome to Entegris' Third Quarter 2020 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 Investor Relations. Please go ahead sir.

Bill Seymour

Earlier today, we announced the financial results for our third quarter of 2020.

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

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

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

CFO. Bertrand. On call hand today the Loy, our call Bertrand that, our over With the are to Graves, CEO; I'll Greg and

Bertrand Loy

you, good and everyone. Bill, Thank morning,

of have begin pandemic am levels. the customer safe And teams world. have the have As for and proud of the support teams our to outbreak normal and all around early keeping tremendous rents I year, our the created we supply maintain final environment To safeguards primary since high continued that we Entegris operations also the our of has our the end, quarter am we And at proud levels been our in by as strengthen safe. our in the service are operating work very of global colleagues. we our discussed to of I focus protocols. chain

adjusted demand X% the strong year-over-year across and products we three In X% XX% year-on-year quarter, for was and pleased our with and and overall strong by sequentially grew benefited up third from quality sequentially. Let guidance. and me and very and that And as saying year-on-year Gross sequentially solutions. up several above EBITDA improved turn XX% I quarter I performance. results execution. sales am the our node transitions of start our to third margins Growth divisions, now our was will all

was $X.XX in our showcasing year-on-year business the up Finally, and XX% exists model. that above XX% up guidance, our our of non-GAAP sequentially, EPS leverage

Our our outperformance key continued driven areas. few revenue QX record in was by a

to advanced our nodes, the demand especially for First, in technology accelerated we advanced in and deposition formulating solutions liquid leading-edge from benefit filtration, continued cleans. materials,

our XXXX, second was just The in quarter. was area platform, acquired strong this which projects. sensing and our we solutions in control and handling, a PSS, and of Within start GMTI, FOUPs strength for which division had in new in its E&H control particular acquired July in fluid of products. sensing we strong and Growth year,

process As solutions provide for these team. and particle excellent loops, slurry complimentary all, execution in and by you chemical control the was very CMP critical delivery quality good know, the all

To address quickly things and local year-to-date, to like China in US-China that. trade would customers of I situation. our revenue, represented context, China Next, put comprise the evolving than the half less XX% in of

trade in compliance regulations. monitoring restrictions to obviously our date, overall have latest closely business. from full order administration are various in no to the the on US We the with developments impact Unfortunately, material had remain the

Now a Program. I about. excited Entegris' announced Corporate am discuss would summer we This Social like new program to I officially very Responsibility

are four In as and CSR many personal in we CSR what our It be our which stand articulate and pillars and we sustainability. the on inclusion, laid purpose, as a also positive innovation, a to closely our posted website fully CSR active business have laid We philosophy, we approach, belief for, linked our what lasting out have world. organization the impact development on an must safety, our we of and been in out of our do had but to August, elements aspirations. yet ESG past, letter that in and

weeks will Next a from week, on lot of in ambitious be to at more will the Entegris. and there pillars. come come for us be goals announcing four we to these And CSR each ESG

to year, an be the by memory appears expected, conditions perspective, holding market fourth areas strengths the gaming balance better in laptops data driven up centers, from in ahead relatively and like well market semi of the end the Looking than and to quarter documented XG, stable the the and segment.

industrial in and be to mainstream into demand markets auto translate appear strong global clouds. should rebounding, which Lastly,

mix on based our For the to be digits now XXXX, down the mid-single to expectations year expect digits. CapEx low will up full we compared our previous market unit mid-single of

to broadly, very strong. these committed on materials our at have be memory fundamentals More impact purity nodes our two in from continue sustain to cost business the their to benefiting and the logic very strong our expect signals own Entegris and be and demand advanced new customers process we reliability. In new long-term opportunities outperformance. the of and about market market. they we continue the particular, growing semiconductor the semiconductor to addition, our transitions. of given importance continue optimistic are we be materials, In to of At And performance, themes intersecting

to We And to year. the expect am performance many deliver result challenges the which conclusion, the our proud of to with per that am In have a XXXX, pleased these faced resilience the am I sales key especially we Entegris I and I year. content wafer. the business. in strong trends record increased very considering of will and continue EPS, will we optimistic expect we that In close during

been you November since on we've call forward Entegris the we Day the to updating to remind XX. I Analyst and look turn I like It's Before you story. would virtual an Day, upcoming so years done to Greg, few our Analyst of Investor a over on XXXX

to turn me call the Now, Greg? let Greg.

Greg Graves

our our quarter fourth Thank going you, I'm quarter Bertrand. and today my In comments to cover guidance. performance financial third

the of XX% driven X% primarily the This guidance. excellent The third QX of Bertrand our outperformance market was $X.XXX million own and sequentially. diluted Entegris year-over-year end share, our guidance XX% EPS million our growth quarter performance were Non-GAAP and range XXX XX% an the was was record QX high board. up slightly XXX per and by sales with GAAP $X.XX for $X.XX to sequentially. up of across end as of top quarter EPS was year-over-year sequentially. XX% Sales up were above compared at XX% and year-over-year discussed.

as Moving driven teams. gross good approximately was in margin than on as to margin, execution higher expected guidance non-GAAP The our gross by sales and were XX% our of both higher very gross GAAP versus margin QX volume, manufacturing well by XX%.

We GAAP our billion higher expenses of approximately than performance is basis GAAP of intangible integration operating the assets, and costs. and in other a expect be non-GAAP QX. a total QX, amortization of improved Non-GAAP million the XX%, on items both QX from expected expenses primary drivers included and annual gross approximately were and XXX guidance. compensation XXX non-GAAP XX margin two to million, first, in approximately were of There in QX outlook. this, by was better higher operating which than driven were variable

factor communities. million soon Foundation, which contribution was to to underrepresented the fund $X things education a The commitment among in be STEM will made other other established Entegris

operating XXX XXX XX.X% or million was be to revenue. non-GAAP million QX. We GAAP compared non-GAAP revenue. income or approximately expenses XX.X% Adjusted was GAAP XXX of revenue QX in and will income operating or QX operating million was expect XX.X% approximately of of and flat both EBITDA

XX.X% XX.X% rate the XX%. rate was tax Our guidance of below quarter for our our and non-GAAP was tax approximately GAAP

function approximately our of For with to we XX% last guidance both rate non-GAAP a in XX%, of to for XXXX, quarter, which year the rate full The factors. implies consistent rate quarterly tax two our and QX. higher a expect is GAAP XX% QX be

we from will to that initially slightly QX, foreign QX tax QX credits a option be in less First not benefit than benefit discrete in had related recur will the in second, anticipated. and exercises likely

MC was sales QX up year-over-year driven XX.X%, of products. driven R&D year-over-year driven liquid for up Turning X% a sensing was operating sales high up increase wafer primarily slightly year was XXX materials, points QX to had and and The cleaning also year-over-year performance increase operating our year-over-year by Sinmat primarily by products higher XXX by The were volume. the modest sequentially. and sequential up and XX% sequentially. million handling drove filtration, Anow impact liquid and filtration products, year for basis basis chemistries. the advanced Adjusted compensation mix. and AMH variable coatings sequentially. was increase and versus decline Adjusted deposition investments, growth margin was handling of year-over-year. primarily SCEM driven sequential SCEM driven points and for fluid positive last The a higher XX% last up XXX primarily The was increase sales basis, sequential almost MC control sequentially. XX% and up liquid from our increase was favorable higher was and handling acquisition impact driven up sensing QX and sales year-over-year million products. gas year-over-year The for margin were volumes purity XX% primarily were X% over XXX The control by products higher and of operating driven filtration. by primarily costs. On margin of sales The XXX the for in division, margin containers, The margin fluid growth. growth. was up advanced by and primarily sales by acquisition down year-over-year by million XX% of sales

and PSS of was particularly sequential quarter margin margin acquisition CapEx in quarter cash and XXX XX management. The growth. was had solid and points XXX impact by operating was increase XX.X% the XX flow million. Free Adjusted operations performance the GMTI higher points sales sequentially. driven up year-over-year sequential from the on strong highlighted basis was for and Bertrand a year-over-year the AMH year-over-year both Cash As for The quarter. modest was cost basis million. flow was million. volume XXX up for

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

do the During repurchases third quarter. million QX, did any XX our in we We for dividend. share not quarterly approximately used

QX. our the committed XX remain buyback programmatic did reinstate program. dividend we buyback beginning quarter programmatic We our However, to and our million per at of

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

third We be quarter expect to performance summary, in $X.XX $X.XX and to to $X.XX our non-GAAP to with the GAAP pleased share. per share, we extremely and are EPS $X.XX year-to-date. EPS per In be

EBITDA and to During up And strong. now quarter, our for our continues we'll strong and Operator, memory levels. in confidence be execution for proposition, advanced have open our were the new in Demand strength sheet. our technology at all of balance products EPS we value revenue, our third platform, our and record the nodes very logic the questions.

Operator

Bank. question We'll first Sidney with you. Ho our from Thank ahead. Instructions] take [Operator go Deutsche Please

Sidney Ho

and everyone quarter. morning congratulations thank Great, good you on and strong

on this there quite - on market preliminary comment how your The we've thoughts differently, ask during first appreciate year's outlook. market year assuming question have the any Maybe change is will I next I do seen the year. you But Is like? conditions hold of side look And things in a you how the same be XXXX in to specifically, That's construction year? market as for be adjusted CapEx your sap as my maybe for activities this the more first the the one. mix? do expect would stronger QX, think

Bertrand Loy

thank competitive I for our exit position and industry Sidney probably general XXXX. health relative optimistic would about be morning, to say Good we only we of question. that your the the as continue you and

to XXXX, go past generic statements. it's too reasons are there So us to early about for those but optimistic be

report specific be we about So QX more XXXX results our outlook, in we will more when provide February. and details

Sidney Ho

of my to seems from both to even lower But gross margin coming going it. lower dynamics fall the on of gross and But to the side which operating the obviously the side. margin follow the just question maybe clearly QX, AMH, margin at lot talked the the there's about trying upside past, than - revenue to most the if on through is is though incremental understand was expected, look operating incremental XX%, the about kind a that margin we margin the would if go is, business. I Okay, the we of can close you have thinking guys back be to have up to upside tend revenue, in

Greg Graves

got at three Yeah, same tailwinds costs have things on Again or gross we modest the higher there. two volumes side, play we Sidney, headwinds we the the margin I related are to I to mean, obviously, freight teams. manufacturing say continue headwinds. so for bonuses would providing we and at have that the were time, and logistics our we've got modest

slightly higher We variable have compensation.

the - So little I'm with year, margin, through months operating pleased been million, think XX%, flow at is line strong year, up EBITDA margins, EBITDA Year-over-year, the quarter the full first flow is mean, XXX a up the they've bit. the quarter very million, is actually at through. you of XX really the nine through XX%. up about XXXX flow When look for if revenue sequentially is our so I each through you was

look we million social I mean, it guess think at we But a had $X variable corporate the saying responsibility higher again, contribution program. had with high model. basis, continue on in - to our to the leverage when I pleased the I'm you I So of profitability I CS is, related demonstrate quarter-by-quarter what I'm had we and think compensation,

Sidney Ho

Okay, great, thank you.

Operator

Sachs. ahead. next Hari with We'll Please question from Toshiya Goldman our take go

Toshiya Hari

you M&A organic also and follow contributing part could point Then be the of or the you'll outperformance XX if your like of I organic feel or growing plus I particularly the to Thanks. where Hi, business percentage had hoping updated story is revenue two, that is to helpful. forecast Bertrand, that market versus my about single to XXXX, will digits. areas we if XX the I would in midpoint take XX% the for guidance, point if digits highlight be very that good which break up. year you morning relative taking think obviously provided and mid-single outperformance the two could strong the QX XXXX you percentage very outperformance product about the three and may. I for thanks maybe into part low was I you question. for down

Bertrand Loy

Yeah, Sure. Toshiya. the the question. with morning me for help Good you guidance. let you try so Thank to XXXX

up up QX, one China, expect factor that some to at rate another probably all three market to that growth, a point and in actually the fairly of there three are of growth particularly What the we've call unit is it to CapEx say the the all in sedative year across grow mid-teens. that saw board. is our year industry. expect but nice that low would will be made acquisitions standpoint, mix last it So will There's of based call of XX% expected up. at They said about actually out versus that I see X% just I growth that or to the the digits And the is to guidance want about of I that's full growth to in points to organic is that across pull-ins, and we midpoint XXXX. if the call the very mid-single market year recently year. that in of is about we excess on to this and is organic in of From divisions. contribute level to in end want well X% contribute a the consistent customer to products, be it's we the I And in some growth out more that The QX.

very been our well, in it's a lot of doing AMH, advanced strength So FOUPs.

are have standard in fluid logic, but solutions and that packaging also of growing importance a about handling fabs the the becoming advanced both in Our ultrapure talked increasingly solutions. memory we

abide Micro AMH done Protego, of of chemistries those to that the various lines has understood, in I in and you, it's Torrento striving are all on the purifiers cleaning platforms. think, really really filters So aggressive are two industry. this by I liquid is growth, really, big it's well those theme strength the product liquid well used and all year of contamination, product back the

number And those of And SEM two mid-teens to the overall, tale used expect strong and have achieve slowing very very, deposition in in to two they facing in is SEM graphite great those significant and bit division It's grow we hand, expect for little and coatings. expected a year, QX. cities as products our headwind products one in a records to materials, new the well. specialty was year. recovered. We of a business, But this significantly cleaning not last in a on applications has that growth against are business advanced industrial a year of chemistries,

So as the I in exceptional is this backdrop, with really, SEM actually that think that performance really a year.

you So have going Toshiya, think you a to second I back question.

Toshiya Hari

do. result. on one I in second Yeah, for impressive My profitability, response a Bertrand. margins, is detailed XX.X% the Thanks very AMH obviously

year-over-year? about exactly volume in importantly, improvement drove level guess on XX%? to You much. and talked high new side, should or management to the as Thanks I higher XX% cost for a what normal you both and contributors AMH or margins, this hoping was revert going as solid sequentially could teens I we management cost elaborate that bit performance. the margins forward, And can the lower the so consider plus little

Greg Graves

I'll one. is Toshiya, Hey, This that take Greg.

So the would profitability standpoint. sort quarter a most just profitability perspective, the on business job a of benefited very a I that bank of improving that this higher generally mean, think of though, the ongoing mean, It's They clearly the as business. execution management but costs mature I and business is profitability specific, that say over term not good had I across to really I the From focused XX% take not cost with do volumes. this anything the They the managing two. I from the longer of team– an done the board. this very from would business. good just starts our has team, a

Toshiya Hari

Thank you.

Operator

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

Amanda Scarnati

other next guidance? I Bertrand, when for should pullback. different expecting a next the year. just you're Is see growth the quick chemicals and When this teen a that see had little could up at see some I you're looking a follow morning. at from look giving your mid quarter good segments all how you two I specialty question. the [ph] to Hi, mentioned quarter of you're divisions the probably from think bit growth significant that

Bertrand Loy

Amanda. morning, Good Yeah.

a we try be in outlook, sequential don't and the that's sequentially down say that CapEx but for QX. to I'll specific provide modestly So typically reduced be basis by division I with on in expect for guidance would would the I line to AMH quarterly helpful. projections industry

two growth to was contamination, so continuation are fastest other be up growth filtration has really the of particular. materials trends capitalizing and introductions divisions driving liquid that from but growth the to expected over sequentially And sequential The sequential to come micro new I the expected in SEM. see really is the in cleaning chemistries and in sequential - of really QX here do with a product talking that again, And number deposition on QX. I'm describing, about

Amanda Scarnati

to then that you seeing There's China. And you Taiwan in locks or sort in new from sort pulling mostly portfolio anything it's into pressure going expectations what's demand significant impacts at trade restrictions, I do expect leading of the continued that else and mentioned, are 'XX? have of you terms and forward any customers the assume but of of

Bertrand Loy

that Look the carefully. the we go don't Amanda that an lingering been there into be We question we've as that that the open be remains industry think issue remains to very overhang will trying inventory and to - something asses seen. XXXX, but

have is ongoing the just supply I more leading-edge customers our of risks. making this seen they think, a really carry. to we they're that is But to chain the levels that the of that we've feeling inventory reduce want decision of some permanent that certainly, increasing

don't side it's think think this would that don't again, overly that which worried that, something of I are destocking we about risk. flip at So a the point. I be

Amanda Scarnati

you. Thank

Operator

question We'll with go ahead. from Please Ho next take Stifel. our Patrick

Patrick Ho

and the you advanced Bertrand, higher little the the really you much, in give the automotive, of you're Can as impacting like businesses? how color outlook. on recovery and given off, at Could on as bit points that sensors Thank are well older of mature the you CMOS nodes of data up? first a highlighted a image of very strength layer me maybe a comps legacy memory. nice quarter some give any signs congrats that's seeing that more to technology your little pick on node in color you markets starting

Bertrand Loy

were I drove the strength guidance our Yeah, than recoveries Good feared the quarter. but and think for is business fourth the in us of again, that unclear, mainstream assess, based It's we else really watching everybody hard economy certainly something were I mentioned steeper continue industry QX. impact don't for expect we potentially in of so fabs and obviously, wave we Patrick. into would still ahead semiconductor that it a for going that closely originally the think factor in remains probably COVID-XX. very be be second morning, but would mean, it's some more to like on QX. our fabs what this and I trend to on the what of broad the The segments

Patrick Ho

Maybe of growth held with you We memory market main in question on you Bertrand, the on specifically, the as some for contamination well, pretty actually seen recent positive know in memory market is years But drivers side, businesses. my follow side your some going you've on has mentioned. also DRAM the flash given of have also that discuss of up that that products. the of main changes up the you materials terms DRAM lot will for impact the a control been in can and a

Bertrand Loy

NAND primary some well, really and in us leads architectures. for Having is I around there the are that around change further the said greatest the So you're the the opportunities for XD the greater think purity. right is opportunity features DRAM need miniaturization of that, as memory that in to

suite for to micro also a some impact as new and products of going So actually materials AMH in see well. in contamination opportunities that's we interesting

that we and we during actually little Day, bit the planned Jim Analyst we - Analyst the Officer So intent that will more O'Neill, Chief our we will us for share Technology join Day during our a of roadmaps and the for during technology how try of our into in to And intersect event, XX. go details portfolio parts that different customers more roadmap will November customers. the with

probably will more learn a few a I stay weeks. think So you lot tuned, in

Patrick Ho

much. Great, thank very you

Operator

Global Securities. Please next with Seaport our take go Mike Harrison question We'll ahead. from

Mike Harrison

morning. good Hi,

Bertrand Loy

Good morning.

Mike Harrison

investments, you higher operating you line. if expense bit and until quarter in the the talk little mentioned bit incentive anticipated. wondering comp over higher help guess, investments of for can It think as know time. not what Thanks. about portion expenses you should like think but And little be looks just what it's a to that categorized came I you maybe a portion I related some ongoing than about Higher, higher should was being in of contamination higher could maybe us these leverage we I costs.

Greg Graves

Yeah.

hey, Good Mike, Graves. So it's morning. Greg

versus versus I you The when QX the be. look higher we expectations So mean, that our at or increase the than we quarter of quarter variable were expected coming a higher vast correct. in, was little you're were we compensation. majority to

So in the obviously that comp. investment of variable will thirds have longer And higher MC divisions, on course in two R&D benefit We did that line related particular comp to the higher term. about the to variable some comp, variable of mean, down as reason. back, performance of accruing called were the variable if a those flex at obviously were were as is high I well. numbers for pretty our to these levels levels would performance come at of

Mike Harrison

of the a that additional and that what's uptake are Sizing business, additional point Can right, acquisition you you we years that? in think kind then Particle also strength inflection Systems driving hitting All that of technology? talk or was about there an And PSS, mentioned couple ago. you I customer in acquired

Bertrand Loy

the Yes, I'm you're glad asking question.

quarters few PSS so bright a has spot for for really now. just us, but quarter, And in been not the

customers. a acquired coming set the logic, more today those running to with business it's these of pre-acquisition XXXX. twice that originally we that well. customers. expanding in success solutions of started introduction as one at the And market is in then revenue segment capabilities If it's about or been a served really you early we've large in importantly, actually the the levels. It recall, was from new at but used memory introduce We've logic to business And two

has time. So a business in well amount very done the of really short

that for think a there's still lot of I business. the potential

of they nicely actually be I capabilities I still So GMTI particular grow have that across revenue say three in to multiple that the segments. years two, is are for of where expect that And from very multiple would we today. option to set another PSS the would now,

So those well both I terms very with I as that as in capabilities PSS, GMTI a very margin very and profile. two that in impact on think opportunity it's similar in of terms worked terms positive businesses well and of the AMH - will of have think recipe growth, is

Mike Harrison

All Thanks much. to very great hear. right, that's

Operator

take Capital our Markets. next with Weston from We'll go KeyBanc ahead. Twigg question Please

Weston Twigg

revenue And that Hi, there's come military thanks I really that over My up? because I Or to impact taking no about China, for material that related and and is has quite industry to thanks it's business. for thoughts looking and is more hearing my restriction wonder just coming Social been first, deep there's question. that the evaluating question then the wondering, Corporate And you and because products the the mentioned say just program on contribution I'm have low? Responsibility forward is it wanted you weeks. first the is don't to

Bertrand Loy

Yeah. Good morning, Twigg.

that because very able of NIC revenue, just from obviously, even I subject I we US many as to the they then everybody of these seek products a two, manufactured because the we mean, licenses And if broad single few And the And mean, would rules. a total to subject controls, and have number be other outside the we customer, our digits [ph] required is that representing a no are of be particular our export And to list, still a of believe customers that products, low few And be base, question. is with exceptions, one. this control so content. are our customer really remember so industry this first, supply the good number many not it's we we for a export US placed was have then most are - government us entity would on of customer wise that to products would else. the our to

what to to overall the be to to non-material needless say be that we our really expect impact that's So performance.

Weston Twigg

other just us your my now how then mentioned of been idea the you of question year. recovery that very since just then helpful. is that's next business under and any last graphite expectations Could year? an pressure And business is give has you had Okay, big

Bertrand Loy

Yeah, so the I that to of the in XX% we headwind year. think contraction and close business million again, I close last year to saw about was $XXX mean, - that

steady But expect So we as headwind has division would XXXX. this we this a year. for pretty recovery into a been the significant SEM get obviously,

Weston Twigg

Okay, that's helpful. Thank you.

Operator

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

Chris Kapsch

Hey, good morning, guys.

is years positioned of Entegris more that majority So played now, how the really intensive absolutely production becomes particularly those how Bertrand you've advanced discussed competitively, And materials out. increasingly is as well the and is materials important. for of consistently chips

kudos And I Day, So being question obviously, and just any team. without and thunder leading-edge to node month's to I you have committed to Investor want next XXXX their from say stealing is the customers to transition. your looking reference you your

to from Just customers. a year. transition terms continued wondering compare I'm with impact the that you most contributor. memory if Entegris' denser of wires grants might what results on transition talk be might node But logic the being next about how and benefits needle to boundary the that architectures could profound Obviously, in moving wondering

Bertrand Loy

for nice comment. morning, you Good the Chris thank and

with wires, is So I combination critical further in of look introduction logic, at objectives. highest roadmap of the pick the not down road, taller it you miniaturization ambitious will memory nano have greater require that so And squarely They ratios all technology, of customers of of structures in start. and very value for around and dimensions, a technology if mean, the will of include our clear really all it market end, the and superior that means faster than that all technology us, of those cater wafer proposition served will go the our to because of we very, Entegris play inflections levels purity. continue all at will this materials

really unique and that in really, believe particular So we or more good picking I the really any the opportunity with technology the something at pipeline about encourage rather the quality capabilities think opposed technology or details discuss than of it is to that's breadth you of we Entegris of and transition. do And other I health the in opportunity really aggregate will would really of November. one of of inflections, the the pipeline product feel that one these the line I strengths as because any look you in particular to

Analyst probably lot you will Day. during I learn tuned, stay the a So think

Chris Kapsch

appreciated. Okay, Thank to with fair follow-up but then used chart cadence sales And talk I geography? sales on, deck the could China, development have one pie the the your you could region discuss beyond that or on I in I about if just would have about You color you. quarterly guess any enough. by by was hoping trends - comments be that one-page it, you

Bertrand Loy

Yes, Chris.

So it I'm going to try to short. make

I think strong was that across the really the performance board.

year-to-date excess on of been a basis in growing a well XX%. our regions So lot have of

when Q So the we'll probably and to see hours. in two flag things that few we I file want our a

of year, sales So had a we Korea one in with last year-to-date in that comment is reason significant gas fab new see is systems single that And number that is growth in the in would probably of for build and up. purification digit. the conjunction you Korea

transitions. up Taiwan pretty will the note and were file you to fully was And XX% also buying the do sequential chemistry QX with of ramp, year. Q and when normalize ahead prepare for down in of note sequentially. also of QX we that the be more in in line months FOUPs typically critical the amount with it the customers that Korea - And they this transitions months of inventory timing what is to we and that other geographies. much you'll a the saw is six the take if has three about our probably ahead and by patterns few we which It's for really a decline be order they to take of So filtration What when anticipated. some for

it the is basis, look at Taiwan you island. record year-to-date on performance. if growing we're be So at XX%, in best very strong in our And to to deliver year we're going a which on on track

wanted at that would two geographies, see else may expectations. questions those would you as I to some pretty lingering line because with single you say the have out look would you But Q. in everything be much, So had I just your

context. So provide to I wanted some

Chris Kapsch

you, helpful. very No Okay. Thank appreciate. that's

Operator

Misra from Please go next We'll ahead. with Berenberg. question take our Paretosh

Paretosh Misra

typically discuss about broadly Great, materials thanks. Greg if your I chemicals focused or morning, just specialty portfolio. Good specialty But talk pricing seeing this don't was Bill. you mostly year, you just pricing Bertrand, this your trends wondering you're could business. know of and in that I on part

of you just those also be So see mainstream the would advanced note curious fabs products, color so some on typically side where are any that on in great. what you're I the seeing deflation a on there believe and both

Greg Graves

morning, good Paretosh, hey Yeah, Greg. it's

year, basis portfolio, perspective, X% across about pricing portfolio. historically, annual running mean, talk below across a on I the erosion from level. the X% This talked price when an it we've we're clearly that about So we broadly of to

up very through So the well our year. held has pricing

erosion comments be secure much we front, nodes, we able think the mean, legacy the whereas delivering across we I older I when of than we were the less more with But more spot been on portfolio, look do the as tend value, we to able pricing in more price are have your fabs. the to some X%. some to on. pretty products advanced erosion had are aggregate, that has

we very customer we're feel about maintain and to value proposition the to the good our price, ability that So delivering

Paretosh Misra

were still to expecting that color big that hearing second, already the I there, useful. very are year? us and And on on you're And that's year apologies kind regarding it, seeing you memory you this the specifically quarter is side, if but any of that, Got then covered or just this XX% last what picture. layers transformation the just you what plus think about XX be would be great. to seeing

Bertrand Loy

XD number be are the we think that wafers to NAND our And Yes, XX expect those XX% would to higher. I layers about in trends Paretosh, - at still so we at produced XX% or expect of expectation, least remain be XXXX.

to nodes and certainly further advanced we migration to and to technology years this expect for the advanced year, come. So the continue

Paretosh Misra

Bertrand. Thanks, thanks. it, Got

Operator

David ahead. We'll go King CL take Brokers. our question Please with Silver next from

David Silver

good morning, thanks. hi, Yeah,

R&D maybe the be focused on would question my So line of your income statement.

record emphasized the two that will things So the to also did on again, in R&D think focused this but Day quarter of he with to the R&D And your bulk projects come is that I are spend. a four-year record areas, and in I previous a that a fruition, Jim timeframe. quarter speak was bit your Investor effort little maybe it's many for

I based understandably, to focused. guess incremental of you a 'XX lot be could and jump effort the I wondering in characterize but So seems that up questions the spend, on here R&D are if where was 'XX about

ability or ADM and is to prevent micro maybe just But the killer deposition improved another effort characterize XX% kind feel time incremental could materials, your the or the R&D effort other add to maybe words, to production where guessing and that parts many in you So why chip your different I'm advanced targets efforts so in presence your XX% side. given are process. contamination for of of on defects if or now you the

is characterization So the just how and very maybe of the spend R&D evolving Thank you. some be R&D effort helpful. would

Bertrand Loy

Sure.

breadth a the the of XX lot I would has last I our if years, say back, step over So changed has portfolio Entegris increased. first that

we better dollars expected a means that our more risk as in than and because to for ever doing that supplier what our expectations has opportunity the challenges your that, as that much contribute biggest micro where today a that and and given see credibility point that's in with contamination for therefore particular and roadmap to are and opportunities than But to trust result and comes great. strategic the put do actually roadmap what we technology to And are the biggest gladly R&D us. doing is of we to we're we SEM to are work. capabilities are Our of customers increased more it is And that's before. the then and

you continue as a and that's years the increase in will to Analyst spending more R&D be our the to should little So Day expect come bit we why us to describing during clarity that something that's well.

David Silver

Okay, thanks.

Greg Graves

Bertrand on comment, better follow where at indeed the comment, just our investment investing projects about we're aren't better called about the opportunities killing I and make to a investing. the one talked picking we're and Just making become want team working. has much that bit a how

- spending we're but spending wiser judgment, it money, So more fashion. we not we're my a only in in are spending much

David Silver

could in follow to bit. on your the then researches there's be I that internally. little two with R&D. of go One guess - up with you And there key collaboration just ways just is or efforts course, characterize I basic And to with would any a way conduct customers. projects if work there's But you

in mean, to, as maybe you folks to about effort how So other it as more bringing compared is opposed guess, would the collaborative I to closely anticipate to is looking say you that the collaborative, competitive a ago, advantage? as what own I and few your trying a words, things years are R&D or ahead to Thank maybe aligned you. customers

Bertrand Loy

Yeah.

development with is customer usually A driven evolved. fab of has and multi-party it's model a business makers the lot So equipment what joint really we lot And customers. initiatives, of do innovation.

developments because that to three-party compare access with if are a actually expect, very new which in ago. increasingly means going and versus the of engaging And today to some were you spending allows is on shift as good an And customers. we are very, want. our if it's trend And years drastic of have thing you it forward, to is which we are where unique sustaining collaboration platform turn the at So would they for stage you would engineering. roadmap us opposed continue challenges, expect where I very value their that customers and breakthrough us some we technology a to biggest in earlier create as we XX that

David Silver

Thank great. very you that's much. Okay,

Operator

Please with Goldman We'll from take our question ahead. Sachs. go Hari final Toshiya

Toshiya Hari

up. Bertrand. follow my taking just for one you thank have I Hi,

You your your capital on the about program the specifically in like as To quarter. repurchase long both if share of robustness to get an guys kind reinstating talked thoughts the well in $XX there comment plans, you. today. million extent on the current super update, helpful. allocation I'd as That term and of on Thank M&A near the term can pipeline be would your in you is

Bertrand Loy

the we expect the to we are we routinely looking in we've we said Sure, in made to it put is of today, commitment on it permanent M&A routinely that community. that operating buyback in we allocation something unchanged. I and at really M&A the And are million tune discussing that on essentially but activity front a was to depending QX and to Directors. remains fixed will back programmatic disposal, at investment the prevailing that that capital level We framework our our us that due it's that Board various levers appropriate the particular. feel we in. $XX Having suspended of dividend to that of buybacks, the with mean, the uncertainty see continue again, then for environment, it had

Toshiya Hari

you. Thank

Operator

And for time, turn the speaker to your closing I'd any back additional to or remarks. conference at like this

Bill Seymour

our you. you Thank thank very for Yeah, much. That call concludes today.

Operator

Ladies and does appreciate gentlemen, this conference. participation. conclude today's your We

disconnect. may You now

Entegris (ENTG) 22 Oct 202020 Q3 Earnings call transcript