Schedule Reconciling Selected Non-GAAP Financial Measures(In millions) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2024 2024 2023 2024 2023 GAAP and Non-GAAP gross profit$419 $415 $470 $834 $806 GAAP and Non-GAAP gross margin 47.3% 47.8% 46.9% 47.5% 44.8%Operating expenses$292 $309 $2,166 $601 $2,502 Acquisition and integration costs (Note 1) 2 1 5 3 11 Restructuring and other (Note 2) 2 3 11 5 12 Amortization of intangible assets 61 62 76 123 157 Goodwill and intangible asset impairments (Note 3) — — 1,827 — 1,827 Fees and expenses related to amendments to the Term Loan Facility (Note 5) — 3 — 3 — Ransomware incident (Note 6) — — 4 — 11 Non-GAAP operating expenses$227 $240 $243 $467 $484 Income (loss) from operations$127 $106 $(1,696) $233 $(1,696)Operating margin 14.4% 12.2% (169.1%) 13.3% (94.3%)Acquisition and integration costs (Note 1) 2 1 5 3 11 Restructuring and other (Note 2) 2 3 11 5 12 Amortization of intangible assets 61 62 76 123 157 Goodwill and intangible asset impairments (Note 3) — — 1,827 — 1,827 Fees and expenses related to amendments to the Term Loan Facility (Note 5) — 3 — 3 — Ransomware incident (Note 6) — — 4 — 11 Non-GAAP income from operations$192 $175 $227 $367 $322 Non-GAAP operating margin 21.7% 20.2% 22.6% 21.0% 17.9%Interest expense, net$74 $81 $84 $155 $166 Amortization of debt issuance costs (Note 4) 5 6 5 11 11 Non-GAAP interest expense, net$69 $75 $79 $144 $155 Net income (loss)$23 $15 $(1,769) $37 $(1,812)Interest expense, net 74 81 84 155 166 Other (income) expense, net (Note 10) (7) (3) 11 (10) 9 (Benefit) provision for income taxes (1) 4 (22) 4 (59)Depreciation 25 26 25 52 51 Amortization of intangible assets 61 62 76 123 157 Stock-based compensation 11 15 13 26 31 Acquisition and integration costs (Note 1) 2 1 5 3 11 Restructuring and other (Note 2) 2 3 11 5 12 Goodwill and intangible asset impairments (Note 3) — — 1,827 — 1,827 Fees and expenses related to amendments to the Term Loan Facility (Note 5) — 3 — 3 — Ransomware incident (Note 6) — — 4 — 11 Loss on extinguishment of debt (Note 7) 38 9 — 47 — Adjusted EBITDA (Note 10)$228 $217 $265 $445 $404 Adjusted EBITDA margin 25.7% 25.0% 26.4% 25.4% 22.5% MKS Instruments, Inc.
Schedule Reconciling Selected Non-GAAP Financial Measures(In millions, except per share data) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2024 2024 2023 2024 2023 Net income (loss)$23 $15 $(1,769) $37 $(1,812)Acquisition and integration costs (Note 1) 2 1 5 3 11 Restructuring and other (Note 2) 2 3 11 5 12 Amortization of intangible assets 61 62 76 123 157 Goodwill and intangible asset impairments (Note 3) — — 1,827 — 1,827 Amortization of debt issuance costs (Note 4) 5 6 5 11 11 Fees and expenses related to amendments to the Term Loan Facility (Note 5) — 3 — 3 — Ransomware incident (Note 6) — — 4 — 11 Loss on extinguishment of debt (Note 7) 38 9 — 47 — Foreign tax rate adjustment (Note 8) — — — — (2)Tax effect of Non-GAAP adjustments (Note 9) (28) (20) (71) (46) (95)Non-GAAP net earnings$103 $79 $88 $183 $120 Non-GAAP net earnings per diluted share$1.53 $1.18 $1.32 $2.71 $1.80 Weighted average diluted shares outstanding 67.5 67.4 67.0 67.5 66.9 Net cash provided by (used in) operating activities$122 $67 $(59) $189 $(22)Purchases of property, plant and equipment (26) (18) (18) (45) (35)Free cash flow$96 $49 $(77) $144 $(57) MKS Instruments, Inc.
Among the important factors that could cause actual events to differ materially from those in the forward-looking statements that we make are the level and terms of our substantial indebtedness; our entry into the chemicals technology business through the Atotech Acquisition, 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; legal, reputational, financial and contractual risks resulting from the ransomware incident we identified in February 2023, 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, including through growth of the Atotech business and growth of the Electro Scientific Industries, Inc.business, 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; the impact of a pandemic or other widespread health crisis; risks associated with doing business internationally, including geopolitical conflicts, such as the conflict in the Middle East, 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 global 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 under the heading "Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023 and any subsequent Quarterly Reports on Form 10-Q, each as filed with the U.S.
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