- Quarterly revenue of
$893 million , exceeding the high-end of guidance - Quarterly GAAP net loss of
$68 million and net loss per share of$1.02 , which includes goodwill and intangible asset impairments - Quarterly Non-GAAP net earnings per diluted share of
$1.17 and Adjusted EBITDA of$218 million , exceeding the high-end of guidance
“We closed the year on a solid note with revenue and Adjusted EBITDA exceeding the high-end of our guidance range,” said
“In 2023, we executed on all the levers under our control, including factory efficiency, operating expense management, lowering our tax rate, and proactive management of our debt, including successfully completing a repricing and allocating more than 80% of our free cash flow for debt paydown,” said
First Quarter 2024 Outlook
For the first quarter of 2024, the Company expects revenue of
Conference Call Details
A conference call with management will be held on
About MKS Instruments
MKS Instruments enables technologies that transform our world. We deliver foundational technology solutions to leading edge semiconductor manufacturing, electronics and packaging, and specialty industrial applications. We apply our broad science and engineering capabilities to create instruments, subsystems, systems, process control solutions and specialty chemicals technology that improve process performance, optimize productivity and enable unique innovations for many of the world's leading technology and industrial companies. Our solutions are critical to addressing the challenges of miniaturization and complexity in advanced device manufacturing by enabling increased power, speed, feature enhancement, and optimized connectivity. Our solutions are also critical to addressing ever-increasing performance requirements across a wide array of specialty industrial applications. Additional information can be found at www.mks.com.
Use of Non-GAAP Financial Results
This press release includes financial measures that are not in accordance with
MKS is not providing a quantitative reconciliation of forward-looking Non-GAAP net earnings per diluted share and Adjusted EBITDA to their most directly comparable GAAP financial measures because it is unable to estimate with reasonable certainty the ultimate timing or amount of certain significant items without unreasonable efforts. These items include, but are not limited to, acquisition and integration costs, amortization of intangible assets, ransomware remediation costs, restructuring expense, goodwill and intangible asset impairments, excess and obsolescence inventory charges, amortization of debt issuance costs, debt refinancing fee, loss on extinguishment of debt, and the income tax effect of these items. These items are uncertain, depend on various factors, including, but not limited to, our acquisition of
For further information regarding these Non-GAAP financial measures, including a change to how MKS defines Adjusted EBITDA, please refer to the tables presenting reconciliations of our Non-GAAP results to our GAAP results and the “Notes on Our Non-GAAP Financial Information” at the end of this press release.
Selected GAAP and Non-GAAP Financial Measures (In millions, except per share data) | |||||||||||||||||||
Quarter | Full Year | ||||||||||||||||||
Q4 2023 | Q3 2023 | Q4 2022 | 2023 | 2022 | |||||||||||||||
Net revenues | |||||||||||||||||||
Semiconductor | $ | 362 | $ | 367 | $ | 503 | $ | 1,479 | $ | 2,041 | |||||||||
226 | 243 | 266 | $ | 916 | $ | 541 | |||||||||||||
305 | 322 | 316 | $ | 1,227 | $ | 964 | |||||||||||||
Total net revenues | $ | 893 | $ | 932 | $ | 1,085 | $ | 3,622 | $ | 3,547 | |||||||||
GAAP Financial Measures | |||||||||||||||||||
Gross margin | 46.0 | % | 45.7 | % | 44.7 | % | 45.3 | % | 43.6 | % | |||||||||
Operating margin | 2.7 | % | 12.6 | % | 15.0 | % | (42.9 | %) | 17.4 | % | |||||||||
Net (loss) income | $ | (68 | ) | $ | 39 | $ | 54 | $ | (1,841 | ) | $ | 333 | |||||||
Diluted (loss) income per share | $ | (1.02 | ) | $ | 0.58 | 0.81 | $ | (27.54 | ) | $ | 5.56 | ||||||||
Non-GAAP Financial Measures | |||||||||||||||||||
Gross margin | 46.0 | % | 47.1 | % | 45.9 | % | 45.7 | % | 45.1 | % | |||||||||
Operating margin | 20.3 | % | 21.8 | % | 23.6 | % | 19.5 | % | 24.5 | % | |||||||||
Net earnings | $ | 78 | $ | 98 | $ | 133 | $ | 297 | $ | 597 | |||||||||
Diluted earnings per share | $ | 1.17 | $ | 1.46 | $ | 2.00 | $ | 4.43 | $ | 9.97 | |||||||||
Additional Financial Information
At
In
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 regarding the future financial performance, business prospects and growth of
Company Contact:
Vice President, Investor Relations
Telephone: (978) 557-5180
Email: david.ryzhik@mksinst.com
Unaudited Consolidated Statements of Operations | |||||||||||||||||||
(In millions, except per share data) | |||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
Net revenues: | |||||||||||||||||||
Products | $ | 785 | $ | 818 | $ | 965 | $ | 3,200 | $ | 3,119 | |||||||||
Services | 108 | 114 | 120 | 422 | 428 | ||||||||||||||
Total net revenues | 893 | 932 | 1,085 | 3,622 | 3,547 | ||||||||||||||
Cost of revenues: | |||||||||||||||||||
Products | 423 | 446 | 531 | 1,748 | 1,774 | ||||||||||||||
Services | 59 | 60 | 69 | 232 | 226 | ||||||||||||||
Total cost of revenues | 482 | 506 | 600 | 1,980 | 2,000 | ||||||||||||||
Gross profit | 411 | 426 | 485 | 1,642 | 1,547 | ||||||||||||||
Research and development | 70 | 71 | 73 | 288 | 241 | ||||||||||||||
Selling, general and administrative | 160 | 167 | 168 | 675 | 488 | ||||||||||||||
Acquisition and integration costs | 3 | 3 | 11 | 16 | 52 | ||||||||||||||
Restructuring | 7 | 1 | 1 | 20 | 10 | ||||||||||||||
Fees and expenses related to the repricing of Term Loan Facility | 2 | — | — | 2 | — | ||||||||||||||
Amortization of intangible assets | 70 | 68 | 69 | 295 | 146 | ||||||||||||||
75 | — | — | 1,902 | — | |||||||||||||||
Gain on sale of long-lived assets | — | (2 | ) | — | (2 | ) | (7 | ) | |||||||||||
Income (loss) from operations | 24 | 118 | 163 | (1,554 | ) | 617 | |||||||||||||
Interest income | (7 | ) | (4 | ) | (2 | ) | (17 | ) | (4 | ) | |||||||||
Interest expense | 90 | 93 | 85 | 356 | 177 | ||||||||||||||
Loss on extinguishment of debt | 8 | — | — | 8 | — | ||||||||||||||
Other expense, net | 12 | 7 | 15 | 27 | 11 | ||||||||||||||
(Loss) income before income taxes | (79 | ) | 22 | 65 | (1,928 | ) | 433 | ||||||||||||
(Benefit) provision for income taxes | (11 | ) | (17 | ) | 11 | (87 | ) | 100 | |||||||||||
Net (loss) income | $ | (68 | ) | $ | 39 | $ | 54 | $ | (1,841 | ) | $ | 333 | |||||||
Net (loss) income per share: | |||||||||||||||||||
Basic | $ | (1.02 | ) | $ | 0.59 | $ | 0.81 | $ | (27.54 | ) | $ | 5.57 | |||||||
Diluted | $ | (1.02 | ) | $ | 0.58 | $ | 0.81 | $ | (27.54 | ) | $ | 5.56 | |||||||
Cash dividends per common share | $ | 0.22 | $ | 0.22 | $ | 0.22 | $ | 0.88 | $ | 0.88 | |||||||||
Weighted average shares outstanding: | |||||||||||||||||||
Basic | 66.9 | 66.9 | 66.6 | 66.8 | 59.7 | ||||||||||||||
Diluted | 66.9 | 67.1 | 66.7 | 66.8 | 59.9 | ||||||||||||||
Unaudited Consolidated Balance Sheets | |||||||
(In millions) | |||||||
2023 | 2022 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 875 | $ | 909 | |||
Short-term investments | — | 1 | |||||
Trade accounts receivable, net | 603 | 720 | |||||
Inventories | 991 | 977 | |||||
Other current assets | 304 | 187 | |||||
Total current assets | 2,773 | 2,794 | |||||
Property, plant and equipment, net | 784 | 800 | |||||
Right-of-use assets | 225 | 234 | |||||
2,554 | 4,308 | ||||||
Intangible assets, net | 2,619 | 3,173 | |||||
Other assets | 241 | 186 | |||||
Total assets | $ | 9,196 | $ | 11,495 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Short-term debt | $ | 93 | $ | 93 | |||
Accounts payable | 327 | 426 | |||||
Other current liabilities | 506 | 433 | |||||
Total current liabilities | 926 | 952 | |||||
Long-term debt, net | 4,696 | 4,834 | |||||
Non-current deferred taxes | 640 | 783 | |||||
Non-current accrued compensation | 151 | 138 | |||||
Non-current lease liability | 205 | 215 | |||||
Other non-current liabilities | 106 | 90 | |||||
Total liabilities | 6,724 | 7,012 | |||||
Stockholders' equity: | |||||||
Common stock | — | — | |||||
Additional paid-in capital | 2,195 | 2,142 | |||||
Retained earnings | 373 | 2,272 | |||||
Accumulated other comprehensive (loss) income | (96 | ) | 69 | ||||
Total stockholders' equity | 2,472 | 4,483 | |||||
Total liabilities and stockholders' equity | $ | 9,196 | $ | 11,495 | |||
Unaudited Consolidated Statements of Cash Flows | |||||||||||||||||||
(In millions) | |||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||
Net (loss) income | $ | (68 | ) | $ | 39 | $ | 54 | $ | (1,841 | ) | $ | 333 | |||||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||||||||||
Depreciation and amortization | 95 | 93 | 96 | 397 | 216 | ||||||||||||||
Amortization of inventory step-up to fair value | — | — | 13 | — | 52 | ||||||||||||||
75 | — | — | 1,902 | — | |||||||||||||||
Unrealized loss on derivatives not designated as hedging instruments | 10 | 3 | 7 | 32 | 13 | ||||||||||||||
Amortization of debt issuance costs and original issue discount | 10 | 8 | 10 | 33 | 56 | ||||||||||||||
Loss on extinguishment of debt | 8 | — | — | 8 | — | ||||||||||||||
Gain on sale of long-lived assets | — | (2 | ) | — | (2 | ) | (7 | ) | |||||||||||
Stock-based compensation | 11 | 13 | 13 | 54 | 45 | ||||||||||||||
Provision for excess and obsolete inventory | 10 | 24 | 11 | 64 | 21 | ||||||||||||||
Deferred income taxes | (61 | ) | (53 | ) | (50 | ) | (234 | ) | (46 | ) | |||||||||
Other | — | 3 | — | 5 | 3 | ||||||||||||||
Changes in operating assets and liabilities, net of acquired assets and liabilities | 90 | 32 | 30 | (99 | ) | (157 | ) | ||||||||||||
Net cash provided by operating activities | 180 | 160 | 184 | 319 | 529 | ||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||
Acquisition of business, net of cash acquired | — | — | — | — | (4,473 | ) | |||||||||||||
Purchases of investments | — | — | — | — | (1 | ) | |||||||||||||
Maturities of investments | — | — | — | — | 77 | ||||||||||||||
Proceeds from sale of long-lived assets | — | 2 | 1 | 3 | 9 | ||||||||||||||
Purchases of property, plant and equipment | (34 | ) | (18 | ) | (54 | ) | (87 | ) | (164 | ) | |||||||||
Net cash used in investing activities | (34 | ) | (16 | ) | (53 | ) | (84 | ) | (4,552 | ) | |||||||||
Cash flows from financing activities: | |||||||||||||||||||
Proceeds from borrowings | 214 | — | 3 | 216 | 5,237 | ||||||||||||||
Payments of borrowings | (336 | ) | (22 | ) | (127 | ) | (403 | ) | (962 | ) | |||||||||
Payments of deferred financing fees | (9 | ) | — | — | (9 | ) | (249 | ) | |||||||||||
Dividend payments | (15 | ) | (15 | ) | (15 | ) | (59 | ) | (52 | ) | |||||||||
Net proceeds (payments) related to employee stock awards | 4 | (1 | ) | 4 | (1 | ) | (1 | ) | |||||||||||
Other financing activities | (1 | ) | (1 | ) | (2 | ) | (3 | ) | (2 | ) | |||||||||
Net cash (used in) provided by financing activities | (143 | ) | (39 | ) | (137 | ) | (259 | ) | 3,971 | ||||||||||
Effect of exchange rate changes on cash and cash equivalents | 13 | (3 | ) | 31 | (10 | ) | (5 | ) | |||||||||||
Increase (decrease) in cash and cash equivalents | 16 | 102 | 25 | (34 | ) | (57 | ) | ||||||||||||
Cash and cash equivalents at beginning of period | 859 | 757 | 884 | 909 | 966 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 875 | $ | 859 | 909 | $ | 875 | $ | 909 | ||||||||||
The following supplemental Non-GAAP earnings information is presented to aid in understanding MKS’ operating results: | |||||||||||||||||||
Schedule Reconciling Selected Non-GAAP Financial Measures | |||||||||||||||||||
(In millions, except per share data) | |||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
Net (loss) income | $ | (68 | ) | $ | 39 | $ | 54 | $ | (1,841 | ) | $ | 333 | |||||||
Excess and obsolete charge from discontinued product line (Note 1) | — | 13 | — | 13 | — | ||||||||||||||
Acquisition inventory step-up (Note 2) | — | — | 13 | — | 52 | ||||||||||||||
Acquisition and integration costs (Note 3) | 3 | 3 | 11 | 16 | 52 | ||||||||||||||
Restructuring (Note 4) | 7 | 1 | 1 | 20 | 10 | ||||||||||||||
Amortization of intangible assets | 70 | 68 | 69 | 295 | 146 | ||||||||||||||
75 | — | — | 1,902 | — | |||||||||||||||
Gain on sale of long-lived assets (Note 6) | — | (2 | ) | — | (2 | ) | (7 | ) | |||||||||||
Amortization of debt issuance costs (Note 7) | 7 | 6 | 7 | 24 | 51 | ||||||||||||||
Fees and expenses related to repricing of Term Loan Facility (Note 8) | 2 | — | — | 2 | — | ||||||||||||||
Ransomware incident (Note 9) | 1 | 2 | — | 15 | — | ||||||||||||||
Loss on debt extinguishment (Note 10) | 8 | — | — | 8 | — | ||||||||||||||
Currency hedge gain (Note 11) | — | — | — | — | (5 | ) | |||||||||||||
Reversal of indefinite reinvestment assertion (Note 12) | — | — | — | — | 30 | ||||||||||||||
Tax effect of Non-GAAP adjustments (Note 13) | (26 | ) | (32 | ) | (22 | ) | (156 | ) | (65 | ) | |||||||||
Non-GAAP net earnings | $ | 78 | $ | 98 | $ | 133 | $ | 297 | $ | 597 | |||||||||
Non-GAAP net earnings per diluted share | $ | 1.17 | $ | 1.46 | $ | 2.00 | $ | 4.43 | $ | 9.97 | |||||||||
Weighted average diluted shares outstanding | 67.1 | 67.1 | 66.7 | 67.0 | 59.9 | ||||||||||||||
Net cash provided by operating activities | $ | 180 | $ | 160 | $ | 184 | $ | 319 | $ | 529 | |||||||||
Purchases of property, plant and equipment | (34 | ) | (18 | ) | (54 | ) | (87 | ) | (164 | ) | |||||||||
Free cash flow | $ | 146 | $ | 142 | $ | 130 | $ | 232 | $ | 365 | |||||||||
Schedule Reconciling Selected Non-GAAP Financial Measures | |||||||||||||||||||
(In millions) | |||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
Gross profit | $ | 411 | $ | 426 | $ | 485 | $ | 1,642 | $ | 1,547 | |||||||||
Gross margin | 46.0 | % | 45.7 | % | 44.7 | % | 45.3 | % | 43.6 | % | |||||||||
Excess and obsolete charge from discontinued product line (Note 1) | — | 13 | — | 13 | — | ||||||||||||||
Acquisition inventory step-up (Note 2) | — | — | 13 | — | 52 | ||||||||||||||
Non-GAAP gross profit | $ | 411 | $ | 439 | $ | 498 | $ | 1,655 | $ | 1,599 | |||||||||
Non-GAAP gross margin | 46.0 | % | 47.1 | % | 45.9 | % | 45.7 | % | 45.1 | % | |||||||||
Operating expenses | $ | 387 | $ | 308 | $ | 322 | $ | 3,196 | $ | 930 | |||||||||
Acquisition and integration costs (Note 3) | 3 | 3 | 11 | 16 | 52 | ||||||||||||||
Restructuring (Note 4) | 7 | 1 | 1 | 20 | 10 | ||||||||||||||
Amortization of intangible assets | 70 | 68 | 69 | 295 | 146 | ||||||||||||||
75 | — | — | 1,902 | — | |||||||||||||||
Gain on sale of long-lived assets (Note 6) | — | (2 | ) | — | (2 | ) | (7 | ) | |||||||||||
Fees and expenses related to repricing of Term Loan Facility (Note 8) | 2 | — | — | 2 | — | ||||||||||||||
Ransomware incident (Note 9) | 1 | 2 | — | 15 | — | ||||||||||||||
Non-GAAP operating expenses | $ | 229 | $ | 236 | $ | 242 | $ | 948 | $ | 729 | |||||||||
Income (loss) from operations | $ | 24 | $ | 118 | $ | 163 | $ | (1,554 | ) | $ | 617 | ||||||||
Operating margin | 2.7 | % | 12.6 | % | 15.0 | % | (42.9 | %) | 17.4 | % | |||||||||
Excess and obsolete charge from discontinued product line (Note 1) | — | 13 | — | 13 | — | ||||||||||||||
Acquisition inventory step-up (Note 2) | — | — | 13 | — | 52 | ||||||||||||||
Acquisition and integration costs (Note 3) | 3 | 3 | 11 | 16 | 52 | ||||||||||||||
Restructuring (Note 4) | 7 | 1 | 1 | 20 | 10 | ||||||||||||||
Amortization of intangible assets | 70 | 68 | 69 | 295 | 146 | ||||||||||||||
75 | — | — | 1,902 | — | |||||||||||||||
Gain on sale of long-lived assets (Note 6) | — | (2 | ) | — | (2 | ) | (7 | ) | |||||||||||
Fees and expenses related to repricing of Term Loan Facility (Note 8) | 2 | — | — | 2 | — | ||||||||||||||
Ransomware incident (Note 9) | 1 | 2 | — | 15 | — | ||||||||||||||
Non-GAAP income from operations | $ | 182 | $ | 203 | $ | 257 | $ | 707 | $ | 870 | |||||||||
Non-GAAP operating margin | 20.3 | % | 21.8 | % | 23.6 | % | 19.5 | % | 24.5 | % | |||||||||
Interest expense, net | $ | 83 | $ | 89 | $ | 83 | $ | 339 | $ | 173 | |||||||||
Amortization of debt issuance costs (Note 7) | 7 | 6 | 7 | 24 | 51 | ||||||||||||||
Non-GAAP interest expense, net | $ | 76 | $ | 83 | $ | 75 | $ | 315 | $ | 122 | |||||||||
Net (loss) income | $ | (68 | ) | $ | 39 | $ | 54 | $ | (1,841 | ) | $ | 333 | |||||||
Interest expense, net | 83 | 89 | 83 | 339 | 173 | ||||||||||||||
Other expense, net (Note 14) | 12 | 7 | 15 | 27 | 11 | ||||||||||||||
(Benefit) provision for income taxes | (11 | ) | (17 | ) | 11 | (87 | ) | 100 | |||||||||||
Depreciation | 25 | 25 | 27 | 102 | 70 | ||||||||||||||
Amortization | 70 | 68 | 69 | 295 | 146 | ||||||||||||||
Excess and obsolete charge from discontinued product line (Note 1) | — | 13 | — | 13 | — | ||||||||||||||
Stock-based compensation | 11 | 13 | 13 | 54 | 45 | ||||||||||||||
Acquisition inventory step-up (Note 2) | — | — | 13 | — | 52 | ||||||||||||||
Acquisition and integration costs (Note 3) | 3 | 3 | 11 | 16 | 52 | ||||||||||||||
Restructuring (Note 4) | 7 | 1 | 1 | 20 | 10 | ||||||||||||||
75 | — | — | 1,902 | — | |||||||||||||||
Gain on sale of long-lived assets (Note 6) | — | (2 | ) | — | (2 | ) | (7 | ) | |||||||||||
Fees and expenses related to repricing of Term Loan Facility (Note 8) | 2 | — | — | 2 | — | ||||||||||||||
Ransomware incident (Note 9) | 1 | 2 | — | 15 | — | ||||||||||||||
Loss on debt extinguishment (Note 10) | 8 | 8 | |||||||||||||||||
Currency hedge gain (Note 11) | — | — | — | — | (5 | ) | |||||||||||||
Adjusted EBITDA (Note 14) | $ | 218 | $ | 241 | $ | 297 | $ | 863 | $ | 980 | |||||||||
Adjusted EBITDA margin | 24.4 | % | 25.8 | % | 27.4 | % | 23.8 | % | 27.6 | % | |||||||||
Reconciliation of GAAP Income Tax Rate to Non-GAAP Income Tax Rate | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||||||
(Loss) Income Before | (Benefit) Provision | Effective | Income Before | Provision | Effective | ||||||||||||||||
Income Taxes | for Income Taxes | Tax Rate | Income Taxes | for Income Taxes | Tax Rate | ||||||||||||||||
GAAP | $ | (79 | ) | $ | (11 | ) | 14.2 | % | $ | 65 | $ | 11 | 17.1 | % | |||||||
Excess and obsolete charge from discontinued product line (Note 1) | — | — | — | — | |||||||||||||||||
Acquisition inventory step-up (Note 2) | — | — | 13 | — | |||||||||||||||||
Acquisition and integration costs (Note 3) | 3 | — | 11 | — | |||||||||||||||||
Restructuring (Note 4) | 7 | — | 1 | — | |||||||||||||||||
Amortization of intangible assets | 70 | — | 69 | — | |||||||||||||||||
75 | — | — | — | ||||||||||||||||||
Gain on sale of long-lived assets (Note 6) | — | — | — | — | |||||||||||||||||
Amortization of debt issuance costs (Note 7) | 7 | — | 7 | — | |||||||||||||||||
Fees and expenses related to repricing of Term Loan Facility (Note 8) | 2 | — | — | — | |||||||||||||||||
Ransomware incident (Note 9) | 1 | — | — | — | |||||||||||||||||
Loss on debt extinguishment (Note 10) | 8 | — | — | — | |||||||||||||||||
Currency hedge gain (Note 11) | — | — | — | — | |||||||||||||||||
Tax effect of Non-GAAP adjustments (Note 13) | — | 26 | — | 22 | |||||||||||||||||
Non-GAAP | $ | 94 | $ | 15 | 15.6 | % | $ | 166 | $ | 33 | 19.9 | % | |||||||||
Three Months Ended | |||||||||||||||||||||
Income Before | (Benefit) Provision | Effective | |||||||||||||||||||
Income Taxes | for Income Taxes | Tax Rate | |||||||||||||||||||
GAAP | $ | 22 | $ | (17 | ) | (75.3 | %) | ||||||||||||||
Excess and obsolete charge from discontinued product line (Note 1) | 13 | — | |||||||||||||||||||
Acquisition and integration costs (Note 3) | 3 | — | |||||||||||||||||||
Restructuring (Note 4) | 1 | — | |||||||||||||||||||
Amortization of intangible assets | 68 | — | |||||||||||||||||||
Gain on sale of long-lived assets (Note 6) | (2 | ) | |||||||||||||||||||
Amortization of debt issuance costs (Note 7) | 6 | — | |||||||||||||||||||
Ransomware incident (Note 9) | 2 | ||||||||||||||||||||
Tax effect of Non-GAAP adjustments (Note 13) | — | 32 | |||||||||||||||||||
Non-GAAP | $ | 114 | $ | 16 | 14.2 | % | |||||||||||||||
Twelve Months Ended | Twelve Months Ended | ||||||||||||||||||||
(Loss) Income Before | (Benefit) Provision | Effective | Income Before | Provision | Effective | ||||||||||||||||
Income Taxes | for Income Taxes | Tax Rate | Income Taxes | for Income Taxes | Tax Rate | ||||||||||||||||
GAAP | $ | (1,928 | ) | $ | (87 | ) | 4.5 | % | $ | 433 | $ | 100 | 23.1 | % | |||||||
Excess and obsolete charge from discontinued product line (Note 1) | 13 | — | — | — | |||||||||||||||||
Acquisition inventory step-up (Note 2) | — | — | 52 | — | |||||||||||||||||
Acquisition and integration costs (Note 3) | 16 | — | 52 | — | |||||||||||||||||
Restructuring (Note 4) | 20 | — | 10 | — | |||||||||||||||||
Amortization of intangible assets | 295 | — | 146 | — | |||||||||||||||||
1,902 | — | — | — | ||||||||||||||||||
Gain on sale of long-lived assets (Note 6) | (2 | ) | — | (7 | ) | — | |||||||||||||||
Amortization of debt issuance costs (Note 7) | 24 | — | 51 | — | |||||||||||||||||
Fees and expenses related to repricing of Term Loan Facility (Note 8) | 2 | — | — | — | |||||||||||||||||
Ransomware incident (Note 9) | 15 | — | — | — | |||||||||||||||||
Loss on debt extinguishment (Note 10) | 8 | — | — | — | |||||||||||||||||
Currency hedge gain (Note 11) | — | — | (5 | ) | — | ||||||||||||||||
Reversal of indefinite reinvestment assertion (Note 12) | — | — | — | (30 | ) | ||||||||||||||||
Tax effect of Non-GAAP adjustments (Note 13) | — | 156 | — | 65 | |||||||||||||||||
Non-GAAP | $ | 366 | $ | 69 | 18.9 | % | $ | 731 | $ | 134 | 18.4 | % | |||||||||
Notes on Our Non-GAAP Financial Information
Non-GAAP financial measures adjust GAAP financial measures for the items listed below. These Non-GAAP financial measures should be viewed in addition to, and not as a substitute for, MKS’ reported GAAP results, and may be different from Non-GAAP financial measures used by other companies. In addition, these Non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. MKS management believes the presentation of these Non-GAAP financial measures is useful to investors for comparing prior periods and analyzing ongoing business trends and operating results. Totals presented may not sum and percentages may not recalculate using figures presented due to rounding.
Note 1: We recorded an excess and obsolescence inventory charge related to a product line that is being discontinued.
Note 2: Costs of revenues included the amortization from the step-up of inventory to fair value as a result of the Atotech Acquisition.
Note 3: Acquisition and integration costs primarily related to the Atotech Acquisition.
Note 4: Restructuring costs during the three and twelve months ended
Note 5: During the three months ended
Note 6: We recorded a gain on the sale of a minority interest investment in a private company.
Note 7: We recorded additional interest expense related to the amortization of debt issuance costs associated with our term loan facility.
Note 8: We recorded fees and expenses related to the repricing of the USD term loan B under our term loan facility.
Note 9: We recorded costs, net of recoveries, associated with the ransomware incident we identified on
Note 10: We recorded a charge to write-off deferred financing fees and original issue discount costs related to the repricing of the USD term loan B under our term loan facility.
Note 11: We realized a gain from a euro currency contract used to hedge our financing in connection with the Atotech Acquisition. The contract expired on
Note 12: We no longer intend to indefinitely reinvest earnings of our foreign subsidiaries after the Atotech Acquisition. Additional income tax expense was recorded to reflect an estimate of withholding taxes that would be due on repatriation of prior period earnings.
Note 13: Non-GAAP adjustments are tax effected at applicable statutory rates resulting in a difference between the GAAP and Non-GAAP tax rates.
Note 14: In the fourth quarter of 2023, we modified our definition of Adjusted EBITDA to exclude other expense, net from this Non-GAAP measure. Other expense, net primarily relates to changes in foreign exchange rates. We believe this change enhances investor insight into our operational performance. We have applied this modified definition of Adjusted EBITDA to all periods presented.
Source:
2024 GlobeNewswire, Inc., source