Entegris, Inc.

Good day, everyone, and welcome to Antegri's third quarter 2021 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, Antegri's VP Investor Relations. Please go ahead, sir.

Good morning, everyone. Earlier today, we announced the financial results for our third quarter of 2021. Before we begin, I would like to remind listeners that our comments today will include some forward-looking statements. These statements involve a number of risks and uncertainties, and actual results could differ materially from those projected in the forward-looking statements. Additional information regarding these risks and uncertainties is contained in our most recent annual report and subsequent quarterly reports that we have filed with the SEC. Please refer to the information on the disclaimer slide in the presentation. On this call, we will also refer to non-GAAP financial measures as defined by the SEC and Regulation G. You can find a reconciliation table in today's news release, as well as on our IR page of our website at integris.com. On the call today are Bertrand Lois, our CEO, and Greg Graves, our CFO. With that, I'll hand the call over to Bertrand.

Thank you, Bill, and good morning to all. In the third quarter, we continued to deliver on our growth strategy. In spite of a very dynamic supply chain environment, I am proud that we've been able to deliver 23% organic sales growth year-to-date. During the third quarter, sales grew 20% year-on-year and 1% sequentially. Our growth year-on-year was strong across all three divisions as we benefited from robust industry growth and record demand for our products and solutions. Lower operating expenses did offset the decline in gross margins, and this resulted in 30% EBITDA margins in line with expectations up over 20% year-on-year and up slightly sequentially. Non-GAAP EPS was up 37% year-over-year and 8% sequentially. Let me now provide more color on our operating performance. From a product standpoint, we continued to benefit from strong demand for both our unit-driven products and CAPEX-driven solutions. Within the unit-driven products, Growth has been especially strong in strategic areas, such as liquid filtration, up 21% year-to-date, and in advanced deposition materials, up 26% year-to-date. In addition, we recorded another strong quarter of revenue for our RMS high purity bags, which are used for the bulk transportation of COVID-19 vaccines worldwide. As I just mentioned, the supply chain environment across the industry continues to be very dynamic. On balance, our teams executed well, keeping our factories running at full utilization even in regions that experienced government-mandated shutdowns. We have also addressed some of the key capacity bottlenecks we discussed in the last few quarters, including adding production headcount and moving many of our operations to a 24-7 work schedule. However, our operations were impacted by a few nagging supply chain issues which have been pervasive across the industry. The two most significant areas of constraint during the quarter were availability of raw materials and freight. These constraints negatively impacted growth margin and prevented us from getting key materials in and in some cases from shipping finished products out of our factories in a timely fashion. We expect some of these challenges to linger and we have taken this into account in our fourth quarter guidance. Having said all that, demand for our products and solutions continues to be at a record level. and we continue to have a high degree of conviction in the positive secular growth of the semiconductor market, driven by accelerated digitalization, 5G, and high-performance computing, to name just a few. In addition, the pace of node transitions for both logic and memory has accelerated, and device architectures are becoming much more complex. This is great news for Integris because the unique set of capabilities we have built around processed materials and materials purity will be the key enablers of these new chip architectures. And this will translate into a rapidly expanding Integris content per wafer. Looking at the full year, we are reaffirming our revenue guidance of up 21 to 22%. We also expect EPS to be in line with our target model and expect full-year 2021 non-GAAP EPS to exceed $3.30 per share, which, as we referenced last quarter, is starting to approach the 2023 EPS target of greater than $3.55 per share. which we communicated in our Analyst Day last year. Before I turn the call to Greg, I would like to highlight a couple of additional items. Last week, we published our first Corporate Social Responsibility Annual Report. This report highlights our CSR strategy, the ambitious goals we set for 2030, and the progress we have made to date. Establishing our CSR program has allowed us to more fully embed these efforts into both our business strategy and in our operations, which enhances our ability to measure our progress and the impact of our efforts. Going forward, we expect to provide annual updates, and we look forward to your feedback as we continue this important journey. Next, I would like to ask you to please hold your calendars for a virtual analyst meeting on December 1st. We would not necessarily do an analyst meeting every year. However, given the growth we are delivering in 2021, the three-year financial model we provided last year needs updating. In addition, we look forward to highlighting our strategy to sustain attractive growth rates for the years to come. Finally, I want to take a moment to thank our customers for the trust and confidence they place in Integris, and once again, thank the Integris teams around the world for their incredible work and resourcefulness. Now, let me turn the call to Greg.