8-K
false000104950200010495022023-11-012023-11-01

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 01, 2023

 

 

MKS INSTRUMENTS, INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

Massachusetts

000-23621

04-2277512

(State or Other Jurisdiction
of Incorporation)

(Commission File Number)

(IRS Employer
Identification No.)

 

 

 

 

 

2 Tech Drive

Suite 201

 

Andover, Massachusetts

 

01810

(Address of Principal Executive Offices)

 

(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: 978 645-5500

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class

 

Trading
Symbol(s)

 


Name of each exchange on which registered

Common Stock, no par value

 

MKSI

 

Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Item 2.02 Results of Operations and Financial Condition.

On November 1, 2023, MKS Instruments, Inc. announced its financial results for the quarter ended September 30, 2023. The full text of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.


The information in this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

 

99.1 Press Release dated November 1, 2023

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

MKS Instruments, Inc.

 

 

 

 

Date:

November 1, 2023

By:

/s/ Seth H. Bagshaw

 

 

 

Name: Seth H. Bagshaw
Title: Executive Vice President, Chief Financial Officer and Treasurer

 


EX-99.1

https://cdn.kscope.io/cf701755a301d6b4969ce92401a477a7-img23390321_0.jpg 

EXHIBIT 99.1

 

MKS Instruments Reports Third Quarter 2023 Financial Results

 

Revenue of $932 million, in-line with the midpoint of guidance
GAAP gross margin of 45.7% and Non-GAAP gross margin of 47.1%, above the high-end of guidance
GAAP operating margin of 12.6% and Non-GAAP operating margin of 21.8%, above the high-end of guidance
GAAP net income per diluted share of $0.58 and Non-GAAP net earnings per diluted share of $1.46, above the high-end of guidance
Operating cash flow of $160 million and free cash flow of $142 million

Andover, MA, November 1, 2023 -- MKS Instruments, Inc. (NASDAQ: MKSI), a global provider of enabling technologies that transform our world, today reported third quarter 2023 financial results.

“We executed well in delivering strong profitability in the third quarter, despite a muted demand environment across our end markets,” said John T.C. Lee, President and Chief Executive Officer.

Mr. Lee added, “We are actively engaged with customers across a broad range of technology inflections, and our unique capabilities to address next-generation device designs position us well to emerge from the current downturn in a stronger position with a stronger product portfolio.”

“We have a long history of managing our business through cycles, and the third quarter was no exception, as disciplined cost management along with favorable product mix enabled us to exceed the high-end of our guidance for Non-GAAP gross and operating margins in the third quarter,” said Seth H. Bagshaw, Executive Vice President and Chief Financial Officer. “In October, we successfully repriced our USD Term Loan B and made a voluntary prepayment of $100 million on our Term Loan A, demonstrating our commitment to optimizing our capital structure.”

Fourth Quarter 2023 Outlook

For the fourth quarter of 2023, the Company expects revenue of $840 million, plus or minus $40 million, Adjusted EBITDA of $185 million, plus or minus $20 million, and Non-GAAP net earnings per diluted share of $0.85, plus or minus $0.27.

 


Conference Call Details

A conference call with management will be held on Thursday, November 2, 2023 at 8:00 a.m. (Eastern Time). To participate in the call by phone, participants should visit the Investor Relations section of MKS’ website at investor.mks.com and click on Events & Presentations, where you will be able to register online and receive dial-in details. We encourage participants to register and dial in to the conference call at least 15 minutes before the start of the call to ensure a timely connection. A live and archived webcast and related presentation materials will be available on the Investor Relations section of the MKS website.

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 U.S. generally accepted accounting principles (“Non-GAAP financial measures”). These Non-GAAP financial measures should be viewed in addition to, and not as a substitute for, MKS’ reported results under U.S. generally accepted accounting principles (“GAAP”), 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.

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 and other expense, goodwill and intangible asset impairments or other asset impairments, debt refinancing, prepayments of term loan principal, and the income tax effect of these items. These items are uncertain, depend on various factors, including, but not limited to, our acquisition of Atotech Limited (“Atotech”) in August 2022 (the “Atotech Acquisition”), the timing of ransomware remediation, and the interest rate and refinancing environment, and could have a material impact on GAAP reported results for the relevant period.

For further information regarding these Non-GAAP financial measures, 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)

 

 

 

 

 

 

 

 

 

 

Year to Date

 

 

Q3 2023

 

 

Q2 2023

 

 

Q3 2022

 

 

Q3 2023

 

 

Q3 2022

 

Net Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Semiconductor

$

367

 

 

$

440

 

 

$

535

 

 

$

1,117

 

 

$

1,538

 

Electronics and Packaging

 

243

 

 

 

225

 

 

 

166

 

 

 

691

 

 

 

275

 

Specialty Industrial

 

322

 

 

 

338

 

 

 

253

 

 

 

922

 

 

 

648

 

   Total net revenues

$

932

 

 

$

1,003

 

 

$

954

 

 

$

2,730

 

 

$

2,461

 

GAAP Financial Measures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

45.7

%

 

 

46.9

%

 

 

40.8

%

 

 

45.1

%

 

 

43.1

%

Operating margin

 

12.6

%

 

 

(169.1

%)

 

 

12.4

%

 

 

(57.8

%)

 

 

18.4

%

Net income (loss)

$

39

 

 

$

(1,769

)

 

$

6

 

 

$

(1,772

)

 

$

279

 

Diluted income (loss) per share

$

0.58

 

 

$

(26.47

)

 

$

0.09

 

 

$

(26.53

)

 

$

4.84

 

Non-GAAP Financial Measures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

47.1

%

 

 

46.9

%

 

 

44.9

%

 

 

45.6

%

 

 

44.7

%

Operating margin

 

21.8

%

 

 

22.6

%

 

 

25.1

%

 

 

19.3

%

 

 

24.9

%

Net earnings

$

98

 

 

$

88

 

 

$

167

 

 

$

218

 

 

$

464

 

Diluted earnings per share

$

1.46

 

 

$

1.32

 

 

$

2.74

 

 

$

3.25

 

 

$

8.05

 

 

Additional Financial Information

At September 30, 2023, the Company had $860 million in cash and short-term investments, $5.0 billion of secured term loan principal outstanding, and up to $500 million of additional borrowing capacity under a revolving credit facility, subject to certain leverage ratio requirements. During the third quarter of 2023, the Company paid a cash dividend of $15 million or $0.22 per diluted share.

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 MKS Instruments, Inc. (“MKS”, the “Company”, “our”, or “we”). These statements are only predictions based on current assumptions and expectations. Any statements that are not statements of historical fact (including statements containing the words “will,” “projects,” “intends,” “believes,” “plans,” “anticipates,” “expects,” “estimates,” “forecasts,” “continues” and similar expressions) should be considered to be forward-looking statements. Actual events or results may differ materially from those in the forward-looking statements set forth herein. Among the important factors that could cause actual events to differ materially from those in the forward-looking statements that we make are the need to generate sufficient cash flows to service and repay the substantial indebtedness we incurred in connection with the Atotech Acquisition; the terms of our existing credit facilities under which we incurred such debt; our entry into the chemicals technology business through the Atotech Acquisition, in which we do not have experience and which may expose us to significant additional


liabilities; the risk that we are unable to integrate the Atotech Acquisition successfully or realize the anticipated synergies, cost savings and other benefits of the Atotech Acquisition; the ongoing assessment of the ransomware incident we identified on February 3, 2023, including legal, reputational, financial and contractual risks resulting from the incident, and other risks related to cybersecurity, data privacy and intellectual property; competition from larger, more advanced or more established companies in our markets; the ability to successfully grow our business and the businesses of Atotech and Electro Scientific Industries, Inc., which we acquired in February 2019, and financial risks associated with those and potential future acquisitions, including goodwill and intangible asset impairments; manufacturing and sourcing risks, including those associated with limited and sole source suppliers and the impact and duration of supply chain disruptions, component shortages, and price increases; changes in global demand and the impact of COVID-19 or any other pandemic, including with respect to such supply chain disruptions, component shortages and price increases; risks associated with doing business internationally, including geopolitical conflicts, trade compliance, regulatory restrictions on our products, components or markets, particularly the semiconductor market, and unfavorable currency exchange and tax rate fluctuations, which risks become more significant as we grow our business internationally and in China specifically; conditions affecting the markets in which we operate, including fluctuations in capital spending in the semiconductor, electronics manufacturing and automotive industries, and fluctuations in sales to our major customers; disruptions or delays from third-party service providers upon which our operations may rely; the ability to anticipate and meet customer demand; the challenges, risks and costs involved with integrating or transitioning local and international operations of the companies we have acquired; risks associated with the attraction and retention of key personnel; potential fluctuations in quarterly results; dependence on new product development; rapid technological and market change; acquisition strategy; volatility of stock price; risks associated with chemical manufacturing and environmental regulation compliance; risks related to defective products; financial and legal risk management; and the other important factors described in MKS’ Annual Report on Form 10-K for the year ended December 31, 2022 and any subsequent Quarterly Reports on Form 10-Q, as filed with the U.S. Securities and Exchange Commission. MKS is under no obligation to, and expressly disclaims any obligation to, update or alter these forward-looking statements, whether as a result of new information, future events or otherwise after the date of this press release. Amounts reported in this press release are preliminary and subject to finalization prior to the filing of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023.

###

Company Contact:

David Ryzhik

Vice President, Investor Relations

Telephone: (978) 557-5180

Email: david.ryzhik@mksinst.com


MKS Instruments, Inc.

Unaudited Consolidated Statements of Operations

(In millions, except per share data)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

 

June 30,

 

 

September 30,

 

 

September 30,

 

 

September 30,

 

 

2023

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products

$

818

 

 

$

885

 

 

$

841

 

 

$

2,416

 

 

$

2,153

 

Services

 

114

 

 

 

118

 

 

 

113

 

 

 

314

 

 

 

308

 

Total net revenues

 

932

 

 

 

1,003

 

 

 

954

 

 

 

2,730

 

 

 

2,461

 

Cost of revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

446

 

 

 

470

 

 

 

506

 

 

 

1,326

 

 

 

1,243

 

Services

 

60

 

 

 

63

 

 

 

58

 

 

 

173

 

 

 

156

 

Total cost of revenues (exclusive of amortization shown separately below)

 

506

 

 

 

533

 

 

 

564

 

 

 

1,499

 

 

 

1,399

 

Gross profit

 

426

 

 

 

470

 

 

 

390

 

 

 

1,231

 

 

 

1,062

 

Research and development

 

71

 

 

 

75

 

 

 

63

 

 

 

218

 

 

 

168

 

Selling, general and administrative

 

167

 

 

 

172

 

 

 

126

 

 

 

514

 

 

 

319

 

Acquisition and integration costs

 

3

 

 

 

5

 

 

 

31

 

 

 

14

 

 

 

41

 

Restructuring

 

1

 

 

 

11

 

 

 

5

 

 

 

13

 

 

 

10

 

Amortization of intangible assets

 

68

 

 

 

76

 

 

 

47

 

 

 

225

 

 

 

77

 

Goodwill and intangible asset impairments

 

 

 

 

1,827

 

 

 

 

 

 

1,827

 

 

 

 

Gain on sale of long-lived assets

 

(2

)

 

 

 

 

 

 

 

 

(2

)

 

 

(7

)

Income (loss) from operations

 

118

 

 

 

(1,696

)

 

 

118

 

 

 

(1,578

)

 

 

454

 

Interest income

 

(4

)

 

 

(4

)

 

 

(1

)

 

 

(10

)

 

 

(2

)

Interest expense

 

93

 

 

 

88

 

 

 

80

 

 

 

266

 

 

 

93

 

Other expense (income), net

 

7

 

 

 

11

 

 

 

(1

)

 

 

14

 

 

 

(4

)

Income (loss) before income taxes

 

22

 

 

 

(1,791

)

 

 

40

 

 

 

(1,848

)

 

 

367

 

(Benefit) provision for income taxes

 

(17

)

 

 

(22

)

 

 

34

 

 

 

(76

)

 

 

88

 

Net income (loss)

$

39

 

 

$

(1,769

)

 

$

6

 

 

$

(1,772

)

 

$

279

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.59

 

 

$

(26.47

)

 

$

0.09

 

 

$

(26.53

)

 

$

4.85

 

Diluted

$

0.58

 

 

$

(26.47

)

 

$

0.09

 

 

$

(26.53

)

 

$

4.84

 

Cash dividend per common share

$

0.22

 

 

$

0.22

 

 

$

0.22

 

 

$

0.66

 

 

$

0.66

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

66.9

 

 

 

66.8

 

 

 

61.0

 

 

 

66.8

 

 

 

57.4

 

Diluted

 

67.1

 

 

 

66.8

 

 

 

61.1

 

 

 

66.8

 

 

 

57.6

 

 


MKS Instruments, Inc.

Unaudited Consolidated Balance Sheet

(In millions)

 

 

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

859

 

 

$

909

 

Short-term investments

 

 

1

 

 

 

1

 

Accounts receivable, net

 

 

618

 

 

 

720

 

Inventories

 

 

1,009

 

 

 

977

 

Other current assets

 

 

288

 

 

187

 

Total current assets

 

 

2,775

 

 

 

2,794

 

Property, plant and equipment, net

 

 

761

 

 

 

800

 

Right-of-use assets, net

 

 

227

 

 

 

234

 

Goodwill

 

 

2,540

 

 

 

4,308

 

Intangible assets, net

 

 

2,614

 

 

 

3,173

 

Other assets

 

 

223

 

 

 

186

 

Total assets

 

$

9,140

 

 

$

11,495

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Short-term debt

 

$

87

 

 

$

93

 

Accounts payable

 

 

309

 

 

 

426

 

Other current liabilities

 

 

442

 

 

 

433

 

Total current liabilities

 

 

838

 

 

 

952

 

Long-term debt, net

 

 

4,787

 

 

 

4,834

 

Non-current deferred taxes

 

 

595

 

 

 

783

 

Non-current accrued compensation

 

 

139

 

 

 

138

 

Non-current lease liabilities

 

 

208

 

 

 

215

 

Other liabilities

 

 

97

 

 

 

90

 

Total liabilities

 

 

6,664

 

 

 

7,012

 

Stockholders' equity

 

 

 

 

 

 

Common stock

 

 

 

 

 

 

Additional paid-in capital

 

 

2,180

 

 

 

2,142

 

Retained earnings

 

 

455

 

 

 

2,272

 

Accumulated other comprehensive (loss) income

 

 

(159

)

 

 

69

 

Total stockholders' equity

 

 

2,476

 

 

 

4,483

 

Total liabilities and stockholders' equity

 

$

9,140

 

 

$

11,495

 

 


MKS Instruments, Inc.

Unaudited Consolidated Statements of Cash Flows

(In millions)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

 

June 30,

 

 

September 30,

 

 

September 30,

 

 

September 30,

 

 

2023

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

39

 

 

$

(1,769

)

 

$

6

 

 

$

(1,772

)

 

$

279

 

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

93

 

 

 

101

 

 

 

64

 

 

 

301

 

 

 

120

 

Amortization of inventory step-up adjustment to fair value

 

 

 

 

 

 

 

39

 

 

 

 

 

 

39

 

Goodwill and intangible asset impairments

 

 

 

 

1,827

 

 

 

 

 

 

1,827

 

 

 

 

Unrealized loss (gain) on derivatives not designated as hedging instruments

 

3

 

 

 

6

 

 

 

(1

)

 

 

23

 

 

 

6

 

Amortization of debt issuance costs and original issue discounts

 

8

 

 

 

7

 

 

 

46

 

 

 

23

 

 

 

46

 

Gain on sale of long-lived assets

 

(2

)

 

 

 

 

 

 

 

 

(2

)

 

 

(7

)

Stock-based compensation

 

13

 

 

 

13

 

 

 

10

 

 

 

43

 

 

 

31

 

Provision for excess and obsolete inventory

 

24

 

 

 

12

 

 

 

3

 

 

 

54

 

 

 

10

 

Deferred income taxes

 

(53

)

 

 

(109

)

 

 

6

 

 

 

(173

)

 

 

4

 

Other

 

3

 

 

 

1

 

 

 

1

 

 

 

4

 

 

 

3

 

Changes in operating assets and liabilities, net of acquired assets and liabilities

 

32

 

 

 

(148

)

 

 

25

 

 

 

(190

)

 

 

(186

)

Net cash provided by (used in) operating activities

 

160

 

 

 

(59

)

 

 

199

 

 

138

 

 

345

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition of business, net of cash acquired

 

 

 

 

 

 

 

(4,473

)

 

 

 

 

 

(4,473

)

Purchases of investments

 

 

 

 

 

 

 

 

 

 

 

 

 

(1

)

Maturities of investments

 

 

 

 

 

 

 

 

 

 

 

 

 

76

 

Proceeds from sale of long-lived assets

 

2

 

 

 

 

 

 

 

 

 

3

 

 

 

7

 

Purchases of property, plant and equipment

 

(18

)

 

 

(18

)

 

 

(26

)

 

 

(53

)

 

 

(109

)

Net cash used in investing activities

 

(16

)

 

 

(18

)

 

 

(4,499

)

 

(50

)

 

(4,500

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from borrowings

 

 

 

 

 

 

 

4,979

 

 

 

1

 

 

 

4,985

 

Payments of borrowings

 

(22

)

 

 

(22

)

 

 

(826

)

 

 

(67

)

 

 

(835

)

Dividend payments

 

(15

)

 

 

(15

)

 

 

(13

)

 

 

(44

)

 

 

(37

)

Net (payments) proceeds related to employee stock awards

 

(1

)

 

 

1

 

 

 

 

 

 

(5

)

 

 

(5

)

Other financing activities

 

(1

)

 

 

1

 

 

 

 

 

 

(1

)

 

 

 

Net cash (used in) provided by financing activities

 

(39

)

 

 

(35

)

 

 

4,140

 

 

 

(116

)

 

 

4,108

 

Effect of exchange rate changes on cash and cash equivalents

 

(3

)

 

 

(11

)

 

 

(21

)

 

 

(22

)

 

 

(35

)

Increase (decrease) in cash and cash equivalents

 

102

 

 

 

(123

)

 

(181

)

 

(50

)

 

(82

)

Cash and cash equivalents at beginning of period

 

757

 

 

 

880

 

 

 

1,065

 

 

 

909

 

 

 

966

 

Cash and cash equivalents at end of period

$

859

 

 

$

757

 

 

$

884

 

 

$

859

 

 

$

884

 

 

 


The following supplemental Non-GAAP earnings information is presented to aid in understanding MKS’ operating results:

MKS Instruments, Inc.

Schedule Reconciling Selected Non-GAAP Financial Measures

(In millions, except per share data)

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

 

June 30,

 

 

September 30,

 

 

September 30,

 

 

September 30,

 

 

2023

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net income (loss)

$

39

 

 

$

(1,769

)

 

$

6

 

 

$

(1,772

)

 

$

279

 

Excess and obsolete charge from discontinued product line (Note 1)

 

13

 

 

 

 

 

 

 

 

 

13

 

 

 

 

Acquisition inventory step-up (Note 2)

 

 

 

 

 

 

 

39

 

 

 

 

 

 

39

 

Acquisition and integration costs (Note 3)

 

3

 

 

 

5

 

 

 

31

 

 

 

14

 

 

 

41

 

Restructuring (Note 4)

 

1

 

 

 

11

 

 

 

5

 

 

 

13

 

 

 

10

 

Amortization of intangible assets

 

68

 

 

 

76

 

 

 

47

 

 

 

225

 

 

 

77

 

Goodwill and intangible asset impairments (Note 5)

 

 

 

 

1,827

 

 

 

 

 

 

1,827

 

 

 

 

Gain on sale of long-lived assets (Note 6)

 

(2

)

 

 

 

 

 

 

 

 

(2

)

 

 

(7

)

Amortization of debt issuance costs (Note 7)

 

6

 

 

 

5

 

 

 

43

 

 

 

17

 

 

 

43

 

Ransomware incident (Note 8)

 

2

 

 

 

4

 

 

 

 

 

 

14

 

 

 

 

Currency hedge gain (Note 9)

 

 

 

 

 

 

 

 

 

 

 

 

 

(5

)

Reversal of indefinite reinvestment assertion (Note 10)

 

 

 

 

 

 

 

30

 

 

 

 

 

 

30

 

Tax effect of Non-GAAP adjustments (Note 11)

 

(32

)

 

 

(72

)

 

 

(34

)

 

 

(131

)

 

 

(43

)

Non-GAAP net earnings

$

98

 

 

$

88

 

 

$

167

 

 

$

218

 

 

$

464

 

Non-GAAP net earnings per diluted share

$

1.46

 

 

$

1.32

 

 

$

2.74

 

 

$

3.25

 

 

$

8.05

 

Weighted average diluted shares outstanding

 

67.1

 

 

 

67.0

 

 

 

61.1

 

 

 

66.8

 

 

 

57.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

$

160

 

 

$

(59

)

 

$

199

 

 

$

138

 

 

$

345

 

Purchases of property, plant and equipment

 

(18

)

 

 

(18

)

 

 

(26

)

 

 

(53

)

 

 

(109

)

Free cash flow

$

142

 

 

$

(77

)

 

$

173

 

 

$

85

 

 

$

236

 

 

 


MKS Instruments, Inc.

Schedule Reconciling Selected Non-GAAP Financial Measures

(In millions)

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

 

June 30,

 

 

September 30,

 

 

September 30,

 

 

September 30,

 

 

2023

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Gross profit

$

426

 

 

$

470

 

 

$

390

 

 

$

1,231

 

 

$

1,062

 

GAAP gross margin

 

45.7

%

 

 

46.9

%

 

 

40.8

%

 

 

45.1

%

 

 

43.1

%

Excess and obsolete charge from discontinued product line (Note 1)

 

13

 

 

 

 

 

 

 

 

 

13

 

 

 

 

Acquisition inventory step-up (Note 2)

 

 

 

 

 

 

 

39

 

 

 

 

 

 

39

 

Non-GAAP gross profit

$

439

 

 

$

470

 

 

$

429

 

 

$

1,244

 

 

$

1,101

 

Non-GAAP gross margin

 

47.1

%

 

 

46.9

%

 

 

44.9

%

 

 

45.6

%

 

 

44.7

%

Operating expenses

$

308

 

 

$

2,166

 

 

$

272

 

 

$

2,809

 

 

$

608

 

Acquisition and integration costs (Note 3)

 

3

 

 

 

5

 

 

 

31

 

 

 

14

 

 

 

41

 

Restructuring (Note 4)

 

1

 

 

 

11

 

 

 

5

 

 

 

13