Cover
Cover - shares | 3 Months Ended | |
Dec. 31, 2021 | Jan. 31, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 000-30205 | |
Entity Registrant Name | CMC Materials, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 36-4324765 | |
Entity Address, Address Line One | 870 North Commons Drive | |
Entity Address, City or Town | Aurora | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60504 | |
City Area Code | 630 | |
Local Phone Number | 375-6631 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | CCMP | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 28,577,622 | |
Entity Central Index Key | 0001102934 | |
Current Fiscal Year End Date | --09-30 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
Revenue | $ 317,046 | $ 287,863 |
Cost of sales | 191,210 | 164,959 |
Gross profit | 125,836 | 122,904 |
Operating expenses: | ||
Research, development and technical | 13,328 | 12,428 |
Selling, general and administrative | 56,483 | 55,920 |
Impairment charges | 9,435 | 7,347 |
Entegris Transaction-related expenses | 6,050 | 0 |
Total operating expenses | 85,296 | 75,695 |
Operating income | 40,540 | 47,209 |
Interest expense, net | 9,743 | 9,585 |
Other (expense) income, net | (152) | 1,452 |
Income before income taxes | 30,645 | 39,076 |
Provision for income taxes | 3,217 | 7,546 |
Net income | $ 27,428 | $ 31,530 |
Basic earnings per share (in dollars per share) | $ 0.96 | $ 1.08 |
Diluted earnings per share (in dollars per share) | $ 0.95 | $ 1.07 |
Weighted average basic shares outstanding (in shares) | 28,451 | 29,123 |
Weighted average diluted shares outstanding (in shares) | 28,821 | 29,598 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 27,428 | $ 31,530 |
Other comprehensive income: | ||
Foreign currency translation adjustment | (2,629) | 21,543 |
Income tax benefit | 37 | 82 |
Total foreign currency translation adjustment, net of tax | (2,592) | 21,625 |
Unrealized gain (loss) on cash flow hedges: | ||
Change in fair value | 5,471 | (6,449) |
Reclassification adjustment into earnings | 3,577 | 3,374 |
Income tax (expense) benefit | (2,066) | 689 |
Total unrealized gain (loss) on cash flow hedges, net of tax | 6,982 | (2,386) |
Other comprehensive income, net of tax | 4,390 | 19,239 |
Comprehensive income | $ 31,818 | $ 50,769 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 200,023 | $ 185,979 |
Accounts receivable, less allowance for credit losses of $480 at December 31, 2021 and $527 at September 30, 2021 | 166,957 | 150,099 |
Inventories | 174,445 | 173,464 |
Prepaid expenses and other current assets | 32,387 | 25,439 |
Total current assets | 573,812 | 534,981 |
Property, plant and equipment, net | 351,602 | 354,771 |
Goodwill | 567,267 | 576,902 |
Other intangible assets, net | 605,601 | 625,434 |
Deferred income taxes | 6,467 | 6,813 |
Other long-term assets | 54,370 | 51,984 |
Total assets | 2,159,119 | 2,150,885 |
Current liabilities: | ||
Accounts payable | 59,478 | 52,748 |
Current portion of long-term debt | 13,313 | 13,313 |
Accrued expenses and other current liabilities | 121,263 | 139,797 |
Total current liabilities | 194,054 | 205,858 |
Long-term debt, net of current portion | 901,093 | 903,031 |
Deferred income taxes | 74,499 | 74,930 |
Other long-term liabilities | 86,653 | 88,129 |
Total liabilities | 1,256,299 | 1,271,948 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common Stock Authorized: 200,000 shares, $0.001 par value; Issued: 40,466 shares at December 31, 2021, and 40,221 shares at September 30, 2021 | 40 | 40 |
Capital in excess of par value of common stock | 1,072,076 | 1,052,869 |
Retained earnings | 446,193 | 431,968 |
Accumulated other comprehensive income | 9,181 | 4,791 |
Treasury stock at cost, 11,898 shares at December 31, 2021, and 11,795 shares at September 30, 2021 | (624,670) | (610,731) |
Total stockholders’ equity | 902,820 | 878,937 |
Total liabilities and stockholders’ equity | $ 2,159,119 | $ 2,150,885 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 480 | $ 527 |
Common stock, authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, issued (in shares) | 40,466,000 | 40,221,000 |
Treasury stock (in shares) | 11,898,000 | 11,795,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 27,428 | $ 31,530 |
Adjustments to reconcile Net income to net cash provided by operating activities: | ||
Depreciation and amortization | 32,702 | 31,891 |
Impairment charges | 9,435 | 7,347 |
Share-based compensation expense | 6,003 | 5,851 |
Amortization of terminated interest rate swap contract | 2,786 | 929 |
Deferred income tax benefit | (2,178) | (4,342) |
Amortization of debt issuance costs | 850 | 776 |
Non-cash foreign exchange gain | (598) | (867) |
Accretion on Asset Retirement Obligations | 150 | 146 |
Loss (gain) on disposal of assets | 22 | (65) |
Other | 384 | (945) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (17,467) | (3,989) |
Inventories | (1,294) | 4,023 |
Prepaid expenses and other assets | (9,096) | 2,290 |
Accounts payable | 9,326 | 1,190 |
Accrued expenses and other liabilities | (13,221) | (21,727) |
Net cash provided by operating activities | 45,232 | 54,038 |
Cash flows from investing activities: | ||
Additions to property, plant and equipment | (13,193) | (11,939) |
Proceeds from the sale of assets | 5 | 353 |
Net cash used in investing activities | (13,188) | (11,586) |
Cash flows from financing activities: | ||
Dividends paid | (13,375) | (13,260) |
Proceeds from issuance of stock | 13,204 | 5,023 |
Repurchases of common stock under Share Repurchase Program | (10,600) | (9,201) |
Repurchases of common stock withheld for taxes | (3,339) | (5,220) |
Repayment of long-term debt | (2,663) | (2,663) |
Other financing activities | (232) | (43) |
Net cash used in financing activities | (17,005) | (25,364) |
Effect of exchange rate changes on cash | (995) | 4,453 |
Increase in cash and cash equivalents | 14,044 | 21,541 |
Cash and cash equivalents at beginning of period | 185,979 | 257,354 |
Cash and cash equivalents at end of period | 200,023 | 278,895 |
Supplemental Cash Flow Information: | ||
Purchases of property, plant and equipment in accrued liabilities and accounts payable at the end of the period | 2,356 | 3,645 |
Cash paid during the period for lease liabilities | 1,844 | 1,997 |
Right of use asset obtained in exchange for lease liabilities | $ 82 | $ 454 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock: | Capital in Excess of Par: | Retained Earnings: | Accumulated Other Comprehensive Income (Loss): | Treasury Stock: |
Beginning balance, common stock (in shares) at Sep. 30, 2020 | 39,914 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock under stock plans (in shares) | 178 | |||||
Ending balance, common stock (in shares) at Dec. 31, 2020 | 40,092 | |||||
Balance at beginning of period at Sep. 30, 2020 | $ 40 | $ 1,019,803 | $ 553,718 | $ (14,104) | $ (485,144) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation expense | 5,851 | |||||
Exercise of stock options | 1,437 | |||||
Issuance of common stock under stock plans | 0 | |||||
Issuance of common stock under Employee Stock Purchase Plan | 3,371 | |||||
Issuance of restricted stock under Deposit Share Program | 215 | |||||
Net income | $ 31,530 | 31,530 | ||||
Dividends | (12,807) | |||||
Foreign currency translation adjustment | 21,625 | 21,625 | ||||
Cash flow hedges | (2,386) | (2,386) | ||||
Repurchases of common stock under Share Repurchase Program | (9,201) | |||||
Repurchases of common stock - other | (5,220) | |||||
Balance at end of period at Dec. 31, 2020 | $ 1,108,728 | $ 40 | 1,030,677 | 572,441 | 5,135 | $ (499,565) |
Beginning balance, treasure stock (in shares) at Sep. 30, 2020 | 10,834 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Repurchase of common stock under Share Repurchase Program (in shares) | 62 | |||||
Repurchase of commons stock - other (in shares) | 35 | |||||
Ending balance, treasury stock (in shares) at Dec. 31, 2020 | 10,931 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Dividends per share of common stock (in dollars per share) | $ 0.44 | |||||
Beginning balance, common stock (in shares) at Sep. 30, 2021 | 40,221 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock under stock plans (in shares) | 245 | |||||
Ending balance, common stock (in shares) at Dec. 31, 2021 | 40,466 | |||||
Balance at beginning of period at Sep. 30, 2021 | $ 878,937 | $ 40 | 1,052,869 | 431,968 | 4,791 | $ (610,731) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation expense | 6,003 | |||||
Exercise of stock options | 9,493 | |||||
Issuance of common stock under stock plans | 0 | |||||
Issuance of common stock under Employee Stock Purchase Plan | 3,711 | |||||
Issuance of restricted stock under Deposit Share Program | 0 | |||||
Net income | 27,428 | 27,428 | ||||
Dividends | (13,203) | |||||
Foreign currency translation adjustment | (2,592) | (2,592) | ||||
Cash flow hedges | 6,982 | 6,982 | ||||
Repurchases of common stock under Share Repurchase Program | (10,600) | |||||
Repurchases of common stock - other | (3,339) | |||||
Balance at end of period at Dec. 31, 2021 | $ 902,820 | $ 40 | $ 1,072,076 | $ 446,193 | $ 9,181 | $ (624,670) |
Beginning balance, treasure stock (in shares) at Sep. 30, 2021 | 11,795 | 11,795 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Repurchase of common stock under Share Repurchase Program (in shares) | 79 | |||||
Repurchase of commons stock - other (in shares) | 24 | |||||
Ending balance, treasury stock (in shares) at Dec. 31, 2021 | 11,898 | 11,898 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Dividends per share of common stock (in dollars per share) | $ 0.46 |
Background and Basis of Present
Background and Basis of Presentation | 3 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background and Basis of Presentation | 1. BACKGROUND AND BASIS OF PRESENTATION CMC Materials, Inc. (“CMC”, “the Company”, “us”, “we”, or “our”) is a leading global supplier of consumable materials, primarily to semiconductor manufacturers. The Company's products play a critical role in the production of advanced semiconductor devices, helping to enable the manufacture of smaller, faster and more complex devices by its customers. On April 1, 2021 (“Acquisition Date”), the Company completed the acquisition of 100% of International Test Solutions, LLC (“ITS”) (“Acquisition”), which has expanded the Company’s portfolio of critical enabling solutions in the semiconductor manufacturing process. The Consolidated Financial Statements included in this Report on Form 10-Q include the financial results of ITS from the Acquisition Date. The Acquisition would not have materially affected the Company’s results of operations or financial position for the prior period presented. We operate our business within two reportable segments: Electronic Materials and Performance Materials. The Electronic Materials segment consists of our chemical mechanical planarization (“CMP”) slurries, CMP pads, electronic chemicals, and materials technologies businesses. The Performance Materials segment consists of our pipeline and industrial materials (“PIM”), wood treatment, and QED Technologies International, Inc. (“QED”) businesses. The unaudited Consolidated Financial Statements have been prepared by CMC pursuant to the rules of the Securities and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) for interim financial information. Accordingly, they do not include all the information and notes required by GAAP for complete financial statements. In the opinion of management, these unaudited Consolidated Financial Statements include all adjustments, consisting of normal recurring adjustments, necessary for the fair statement of CMC’s financial position, cash flows, and results of operations for the periods presented. The results may not be indicative of the results that may be expected for the fiscal year ending September 30, 2022. This Report on Form 10-Q should be read in conjunction with the Consolidated Financial Statements and related notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021. The Consolidated Financial Statements include the accounts of CMC and its subsidiaries. All intercompany transactions and balances between the companies have been eliminated. In the Consolidated Statements of Income of this Report on Form 10-Q, the presentation for Interest income has been changed for the three months ended December 31, 2020 to conform to the current presentation. The amounts for the three months ended December 31, 2020 related to Interest income are now presented under “Interest expense, net.” In the Consolidated Statements of Cash Flows of this Report on Form 10-Q, the presentation for amortization of terminated interest rate swap contract previously included in “Other” under Cash flows from operating activities is now presented separately under “Amortization of terminated interest rate swap contract” for the three months ended December 31, 2020 to conform to the current presentation. USE OF ESTIMATES The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments, assumptions and estimates that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Actual results may differ from these estimates under different assumptions or conditions. RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS ASU No. 2019-12 “Income Taxes” (Topic 740): Simplifying the Accounting for Income Taxes, was issued to simplify Topic 740 through improving consistency and removing certain exceptions to general principles. The Company adopted this standard effective October 1, 2021, which did not have a material impact on our results of operations or financial condition. ACCOUNTING PRONOUNCEMENTS ISSUED BUT NOT YET ADOPTED ASU No. 2020-04 “Reference Rate Reform” (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting, provides optional guidance for accounting for contracts, hedging relationships, and other transactions affected by the reference rate reform, if certain criteria are met. The provisions of this standard are available for election through December 31, 2022. We are currently evaluating the impact of the reference rate reform on our contracts and the resulting impact of adopting this standard on our financial statements. |
Merger Agreement
Merger Agreement | 3 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Merger Agreement | 2. MERGER AGREEMENT On December 14, 2021, the Company entered into an agreement and plan of merger (“Merger Agreement”) with Entegris, Inc. (“Entegris”) and Yosemite Merger Sub, Inc., a wholly owned subsidiary of Entegris (“Merger Sub”) under which Entegris will acquire the Company in a cash and stock transaction. The Merger Agreement provides that (1) Merger Sub will merge with and into the Company (the “ Merger |
Revenue From Contracts With Cus
Revenue From Contracts With Customers | 3 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue From Contracts With Customers | 3. REVENUE FROM CONTRACTS WITH CUSTOMERS The Company disaggregates revenue by product area and segment as it best depicts the nature and amount of the Company’s revenue. See Note 16 of this Report on Form 10-Q for more information. The following table provides information about contract liability balances: Consolidated Balance Sheet Location December 31, 2021 September 30, 2021 Contract liabilities (current) Accrued expenses and other current liabilities $ 12,517 $ 8,883 Contract liabilities (noncurrent) Other long-term liabilities 3,170 1,788 |
Severance and Exit Costs
Severance and Exit Costs | 3 Months Ended |
Dec. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Severance and Exit Costs | 4. SEVERANCE AND EXIT COSTS During the first quarter of fiscal 2022, the Company initiated a strategic cost optimization program (“Future Forward”) designed to implement structural changes to enhance operational efficiencies. Future Forward includes targeted position eliminations and other actions to reduce expenses. As a result of the Future Forward program, the Company recorded employee severance expenses of $2,979 for the three months ended December 31, 2021, related to unallocated corporate expenses, of which $969 is presented within Cost of sales and $2,010 is presented within Selling, general and administrative in the Consolidated Statements of Income. As of December 31, 2021, liabilities related to Future Forward of $2,572 were classified as current and presented within Accrued expenses and other current liabilities within the Consolidated Balance Sheets. Additional Future Forward initiatives may be implemented during fiscal 2022 that may result in additional expense or charges. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 5. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company is required to record certain assets and liabilities at fair value. The valuation methods used for determining the fair value of these financial instruments by hierarchy are as follows: Level 1 Cash and cash equivalents consist of various bank accounts used to support our operations and investments in institutional money-market funds that are traded in active markets. Other long-term investments represent the fair value of investments under our supplemental employee retirement plan (“SERP”). The fair value of the investments is determined through quoted market prices within actively traded markets. Level 2 Derivative financial instruments include foreign exchange contracts and an interest rate swap contract. The fair value of our derivative instruments is estimated using standard valuation models and market-based observable inputs over the contractual term, including one-month London Inter-bank Offered Rate (“LIBOR”) based yield curves for the interest rate swap, and forward rates and/or the Overnight Index Swap curve for forward foreign exchange contracts, among others. Level 3 No Level 3 financial instruments The following table presents financial instruments, other than debt, that we measure at fair value on a recurring basis. See Note 11 of this Report on Form 10-Q for a discussion of our debt. In instances where the inputs used to measure the fair value of an asset fall into more than one level of the hierarchy, we have classified it based on the lowest level input that is significant to the determination of the fair value. Level 1 Level 2 Level 3 Total Fair Value December 31, 2021 September 30, 2021 December 31, 2021 September 30, 2021 December 31, 2021 September 30, 2021 December 31, 2021 September 30, 2021 Assets: Cash and cash equivalents $ 200,023 $ 185,979 $ — $ — $ — $ — $ 200,023 $ 185,979 Other long-term investments 1,641 1,439 — — — — 1,641 1,439 Derivative financial instruments — — 16,764 12,335 — — 16,764 12,335 Total assets $ 201,664 $ 187,418 $ 16,764 $ 12,335 $ — $ — $ 218,428 $ 199,753 Liabilities: Derivative financial instruments — — 1,346 3,383 — — 1,346 3,383 Total liabilities $ — $ — $ 1,346 $ 3,383 $ — $ — $ 1,346 $ 3,383 |
Inventories
Inventories | 3 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | 6. INVENTORIES Inventories consisted of the following: December 31, 2021 September 30, 2021 Raw materials $ 70,718 $ 67,969 Work in process 17,134 17,358 Finished goods 86,593 88,137 Total $ 174,445 $ 173,464 |
Goodwill
Goodwill | 3 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | 7. GOODWILL Goodwill activity for each of the Company’s reportable segments for the three months ended December 31, 2021 is as follows: Electronic Materials Performance Materials Total Balance at September 30, 2021, net of accumulated impairment of $227,126 $ 444,233 $ 132,669 $ 576,902 Foreign currency translation impact (249) 49 (200) Impairment (See Note 8) — (9,435) (9,435) Balance at December 31, 2021, net of accumulated impairment of $236,561 $ 443,984 $ 123,283 $ 567,267 During the three months ended December 31, 2021 and 2020, the Company recorded goodwill impairment charges of $9,435 and $4,081, respectively, related to the wood treatment reporting unit within the performance materials segment, due to the previously announced planned closure of the wood treatment business. See Note 8 of this Report on Form 10-Q for a discussion of the wood treatment impairments. |
Wood Treatment
Wood Treatment | 3 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Wood Treatment | 8. WOOD TREATMENT As a result of our previously announced planned closure of the Company's wood treatment business and the finite remaining cash flow through the closure date, the Company concluded that it was more likely than not that the fair value of the wood treatment reporting unit was below its carrying value, requiring the wood treatment asset group and reporting unit to be tested for impairment. The Matamoros, Mexico facility ceased producing prior to December 31, 2021. As a result, the Company recorded a non-cash, pre-tax impairment charge of $9,435 for the three months ended December 31, 2021. The Company recorded long-lived asset and goodwill impairment charges of $7,347 for the three months ended December 31, 2020. There was no remaining carrying value of goodwill or long-lived assets for the wood treatment business as of December 31, 2021. The impairment charges, included in the Performance Materials segment, are presented within Impairment charges in the Consolidated Statements of Income for the three months ended December 31, 2021 and 2020. The goodwill impairment charge is not tax deductible, therefore there is no related tax benefit for the three months ended December 31, 2021 and 2020. |
Other Long-Term Assets
Other Long-Term Assets | 3 Months Ended |
Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Long-Term Assets | 9. OTHER LONG-TERM ASSETS December 31, 2021 September 30, 2021 Right of use assets $ 27,566 $ 29,302 Interest rate swap (See Note 12) 16,764 12,335 Prepaid unamortized debt issuance cost - revolver 2,277 2,201 SERP investments 1,641 1,439 Vendor contract assets 1,188 1,329 Other long-term assets 4,934 5,378 Total $ 54,370 $ 51,984 |
Accrued Expenses And Other Curr
Accrued Expenses And Other Current Liabilities | 3 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Accrued Expenses And Other Current Liabilities | 10. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES December 31, 2021 September 30, 2021 Accrued compensation $ 29,248 $ 47,360 Income taxes payable 17,268 16,836 Dividends payable 13,655 13,827 Contract liabilities (current) 12,517 8,883 Asset retirement obligation (current) 12,076 11,933 Current portion of operating lease liability 7,677 7,646 Taxes, other than income taxes 7,021 6,620 Current portion of terminated swap liability (See Note 12) 5,855 5,855 Goods and services received, not yet invoiced 4,534 3,866 Accrued interest 1,895 1,846 Interest rate swap liability (See Note 12) 1,161 2,995 Other 8,356 12,130 Total $ 121,263 $ 139,797 |
Debt
Debt | 3 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | 11. DEBT December 31, 2021 September 30, 2021 Senior Secured Term Loan Facility, one-month LIBOR plus 2.00% $ 925,712 $ 928,375 Less: Unamortized debt issuance costs (11,306) (12,031) Total debt 914,406 916,344 Less: Current maturities and short-term debt (13,313) (13,313) Total long-term debt excluding current maturities $ 901,093 $ 903,031 The Company’s credit agreement as amended (“Amended Credit Agreement”) includes a Senior Secured Term Loan Facility (“Term Loan Facility”) and a revolving credit facility (“Revolving Credit Facility”). As of December 31, 2021, there were no borrowings outstanding under the Revolving Credit Facility and our available credit was $350,000, which includes our letter of credit sub-facility. At December 31, 2021 and September 30, 2021, the fair value of the Term Loan Facility, using level 2 inputs, approximated its carrying value as the loan bears a floating market rate of interest. As of December 31, 2021, scheduled principal repayments of the Term Loan Facility were: Fiscal Year Principal Repayments Remainder of 2022 $ 10,650 2023 10,650 2024 10,650 2025 10,650 2026 883,112 Total $ 925,712 |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | 12. DERIVATIVE FINANCIAL INSTRUMENTS We are exposed to various market risks, including risks associated with interest rates and foreign currency exchange rates. We enter into certain derivative transactions to mitigate the volatility associated with these exposures. CASH FLOW HEDGES - INTEREST RATE SWAP CONTRACT During the first quarter of fiscal 2021, the Company entered into a new interest rate swap agreement to extend the duration of its existing swap arrangement and to take advantage of lower interest rates. The existing interest rate swap, which was in a loss position of $35.3 million, was terminated, and the hedging relationship was de-designated. The liability for the terminated interest rate swap is not measured at fair value. The current and long-term portion of the liability for the terminated swap are recorded in Accrued expenses and other current liabilities and Other long-term liabilities, respectively, on the Consolidated Balance Sheet and will be paid over the remaining term of the new swap. The loss amount for the terminated swap is included in Accumulated other comprehensive income and will be amortized on a straight-lined basis into interest expense through January 31, 2024, the remaining term of the original swap. The new interest rate swap is a floating-to-fixed interest rate swap contract to hedge the variability in LIBOR-based interest payments on a portion of our outstanding variable rate debt. The notional amount is scheduled to decrease quarterly and will expire on January 29, 2027. The new interest rate swap was designated as a cash flow hedge based on certain quantitative and qualitative assessments and we have determined that the hedge is highly effective and qualifies for hedge accounting. FOREIGN CURRENCY CONTRACTS NOT DESIGNATED AS HEDGES We enter into forward foreign exchange contracts in an effort to mitigate the risks associated with currency fluctuations on certain foreign currency balance sheet exposures. These foreign exchange contracts do not qualify for hedge accounting. The notional amounts of our derivative instruments are as follows: December 31, 2021 September 30, 2021 Derivatives designated as hedging instruments: Interest rate swap contract - new agreement $ 553,613 $ 555,210 Derivatives not designated as hedging instruments: Foreign exchange contracts to purchase U.S. dollars $ 4,020 $ 4,225 Foreign exchange contracts to sell U.S. dollars 26,915 23,235 The fair values of our derivative instruments included in the Consolidated Balance Sheets are as follows: Derivative Assets Derivative Liabilities Consolidated Balance Sheet Location December 31, 2021 September 30, 2021 December 31, 2021 September 30, 2021 Derivatives designated as hedging instruments: Interest rate swap contract Other long-term assets $ 16,764 $ 12,335 $ — $ — Accrued expenses and other current liabilities — — 1,161 2,995 Other long-term liabilities — — — — Derivatives not designated as hedging instruments: Foreign exchange contracts Prepaid expenses and other current assets $ — $ — $ — $ — Accrued expenses and other current liabilities — — 185 388 The following table summarizes the effects of our derivative instruments on our Consolidated Statements of Income: (Loss) Gain Recognized in Statement of Income Consolidated Statement of Income Location Three Months Ended December 31, 2021 2020 Derivatives designated as hedging instruments: Interest rate swap contract Interest expense, net $ (791) $ (2,445) Terminated interest rate swap contract Interest expense, net (2,786) (929) Derivatives not designated as hedging instruments: Foreign exchange contracts Other (expense) income, net $ (712) $ 122 The following table summarizes the effects of our derivative instruments on Accumulated other comprehensive income: Amount of Gain (Loss) Recognized in Other Comprehensive Income Three Months Ended December 31, 2021 2020 Derivatives designated as hedging instruments: Interest rate swap contract $ 5,471 $ (6,449) We expect approximately $12,305 to be reclassified from Accumulated other comprehensive income into Interest expense, net during the next twelve months related to our interest rate swap based on projected rates of the LIBOR forward curve as of December 31, 2021. This amount includes the amortization of the loss associated with the terminated swap arrangement. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 13. COMMITMENTS AND CONTINGENCIES In connection with the acquisition of KMG, through our subsidiary KMG-Bernuth, Inc. (“KMG-Bernuth”), as of November 15, 2018, we assumed a contingency related to the Star Lake Canal Superfund Site near Beaumont, Texas (“Star Lake”). In 2014, prior to the acquisition of KMG, the United States Environmental Protection Agency (“EPA”) had notified KMG-Bernuth that the EPA considered it to be a potentially responsible party under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, in connection with Star Lake. Although KMG-Bernuth has not conceded liability with respect to Star Lake, and has asserted to the EPA and other parties its defenses to any liability, KMG-Bernuth and seven other cooperating parties entered into an agreement with the EPA in September 2016 to complete a remedial design of the remediation actions for the site and recorded a reserve at that time. As of December 31, 2021, the remaining reserve for the anticipated remediation was $2,711. Separately, in fiscal 2019, a fire, which involved non-hazardous waste materials and caused no injuries, occurred at a warehouse at the KMG-Bernuth wood treatment facility in Tuscaloosa, Alabama. Although we believe we have completed cleanup efforts related to the fire incident, there are potential other related costs that cannot be reasonably estimated as of this time due to the nature of federally-regulated requirements for the products produced there. In addition, we continue to work with our insurance carriers on possible recovery of losses and costs related to the fire incident. At this point we cannot reasonably estimate whether we will receive any additional insurance recoveries, or if so, the amount of such recoveries. PURCHASE OBLIGATIONS We have $11,030 of contractual commitments through December 2022 under an abrasive particle supply agreement and a contractual commitment of $11,486 to purchase non-water based carrier fluid. |
Income Taxes
Income Taxes | 3 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 14. INCOME TAXES The Company recorded income tax expense of $3,217 for the three months ended December 31, 2021, compared to $7,546 for the three months ended December 31, 2020. The Company’s effective income tax rate was 10.5% for the three months ended December 31, 2021 compared to 19.3% for the three months ended December 31, 2020. The change in our effective tax rate for the three months ended December 31, 2021 compared to the prior year is primarily attributable to a higher tax benefit related to share-based compensation and a lower unfavorable impact from the non-deductible goodwill impairment charges related to wood treatment. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 15. EARNINGS PER SHARE Three Months Ended December 31, 2021 2020 Numerator: Net income available to common shares $ 27,428 $ 31,530 Denominator: Weighted average common shares 28,451 29,123 Weighted average effect of dilutive securities 370 475 Diluted weighted average common shares 28,821 29,598 Earnings per share: Basic $ 0.96 $ 1.08 Diluted $ 0.95 $ 1.07 Shares excluded from the calculation of Diluted earnings per share as their inclusion would have been anti-dilutive under the treasury stock method are as follows: Three Months Ended December 31, 2021 2020 Outstanding stock options 132 15 |
Segment Reporting
Segment Reporting | 3 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Reporting | 16. SEGMENT REPORTING We identify our segments based on our management structure and the financial information used by our chief executive officer, who is our chief operating decision maker, to assess segment performance and allocate resources among our operating units. We have the following two reportable segments: ELECTRONIC MATERIALS Electronic Materials includes products and solutions for the semiconductor industry and consists of our CMP slurries, CMP pads, electronic chemicals, and materials technologies businesses. PERFORMANCE MATERIALS Performance Materials consists of our PIM, wood treatment, and QED businesses. Our chief operating decision maker evaluates segment performance based upon revenue and segment adjusted EBITDA. Segment adjusted EBITDA is defined as earnings before interest, income taxes, depreciation and amortization, adjusted for certain items that affect comparability from period to period. These adjustments include acquisition and integration-related expenses, impairment charges, net restructuring charges related to the wood treatment business, costs related to the Pandemic, net of grants received, Future Forward-related expenses, and Entegris Transaction-related expenses. We exclude these items from earnings when presenting adjusted EBITDA because we believe they are not indicative of a segment’s regular, ongoing operating performance. Adjusted EBITDA is also a performance metric for our fiscal 2022 Short-Term Incentive Program (“STIP”). In addition, our chief operating decision maker does not use assets by segment to evaluate performance or allocate resources, and therefore, we do not disclose assets by segment. The two segments operate independently and serve different markets and customers, as a result there are no sales between segments. Revenue from external customers by segment are as follows: Three Months Ended December 31, 2021 2020 Electronic Materials: CMP slurries $ 146,141 $ 134,721 Electronic chemicals 91,139 80,006 CMP pads 24,039 22,071 Materials technologies 6,332 — Total Electronic Materials 267,651 236,798 Performance Materials: PIM 26,635 25,907 Wood treatment 14,958 17,323 QED 7,802 7,835 Total Performance Materials 49,395 51,065 Total $ 317,046 $ 287,863 Capital expenditures by segment are as follows: Three Months Ended December 31, 2021 2020 Electronic Materials $ 7,136 $ 5,434 Performance Materials 1,610 1,310 Corporate 1,794 3,475 Total $ 10,540 $ 10,219 Adjusted EBITDA by segment is as follows: Three Months Ended December 31, 2021 2020 Net income $ 27,428 $ 31,530 Interest expense, net 9,743 9,585 Income taxes 3,217 7,546 Depreciation and amortization 32,702 31,891 EBITDA 73,090 80,552 Impairment charges 9,435 7,347 Entegris Transaction-related expenses 6,050 — Future Forward-related expenses 2,979 — Acquisition and integration-related expenses 307 2,369 Net costs related to restructuring of the wood treatment business 26 26 Costs related to the Pandemic, net of grants received — 1,262 Consolidated adjusted EBITDA $ 91,887 $ 91,556 Segment adjusted EBITDA: Electronic Materials $ 88,082 $ 80,756 Performance Materials 15,001 22,975 Unallocated corporate expenses (11,196) (12,175) Consolidated adjusted EBITDA $ 91,887 $ 91,556 The unallocated portions of corporate functions, including finance, legal, human resources, information technology, and corporate development, are not directly attributable to a reportable segment. |
Background and Basis of Prese_2
Background and Basis of Presentation (Policies) | 3 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates | USE OF ESTIMATES The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments, assumptions and estimates that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Actual results may differ from these estimates under different assumptions or conditions. |
Recently Adopted Accounting Pronouncements and Accounting Pronouncements Issues But Not Yet Adopted | RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS ASU No. 2019-12 “Income Taxes” (Topic 740): Simplifying the Accounting for Income Taxes, was issued to simplify Topic 740 through improving consistency and removing certain exceptions to general principles. The Company adopted this standard effective October 1, 2021, which did not have a material impact on our results of operations or financial condition. ACCOUNTING PRONOUNCEMENTS ISSUED BUT NOT YET ADOPTED ASU No. 2020-04 “Reference Rate Reform” (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting, provides optional guidance for accounting for contracts, hedging relationships, and other transactions affected by the reference rate reform, if certain criteria are met. The provisions of this standard are available for election through December 31, 2022. We are currently evaluating the impact of the reference rate reform on our contracts and the resulting impact of adopting this standard on our financial statements. |
Revenue From Contracts With C_2
Revenue From Contracts With Customers (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Reconciliation of Contract Liability Balances | The following table provides information about contract liability balances: Consolidated Balance Sheet Location December 31, 2021 September 30, 2021 Contract liabilities (current) Accrued expenses and other current liabilities $ 12,517 $ 8,883 Contract liabilities (noncurrent) Other long-term liabilities 3,170 1,788 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | The following table presents financial instruments, other than debt, that we measure at fair value on a recurring basis. See Note 11 of this Report on Form 10-Q for a discussion of our debt. In instances where the inputs used to measure the fair value of an asset fall into more than one level of the hierarchy, we have classified it based on the lowest level input that is significant to the determination of the fair value. Level 1 Level 2 Level 3 Total Fair Value December 31, 2021 September 30, 2021 December 31, 2021 September 30, 2021 December 31, 2021 September 30, 2021 December 31, 2021 September 30, 2021 Assets: Cash and cash equivalents $ 200,023 $ 185,979 $ — $ — $ — $ — $ 200,023 $ 185,979 Other long-term investments 1,641 1,439 — — — — 1,641 1,439 Derivative financial instruments — — 16,764 12,335 — — 16,764 12,335 Total assets $ 201,664 $ 187,418 $ 16,764 $ 12,335 $ — $ — $ 218,428 $ 199,753 Liabilities: Derivative financial instruments — — 1,346 3,383 — — 1,346 3,383 Total liabilities $ — $ — $ 1,346 $ 3,383 $ — $ — $ 1,346 $ 3,383 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following: December 31, 2021 September 30, 2021 Raw materials $ 70,718 $ 67,969 Work in process 17,134 17,358 Finished goods 86,593 88,137 Total $ 174,445 $ 173,464 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill Activity | Goodwill activity for each of the Company’s reportable segments for the three months ended December 31, 2021 is as follows: Electronic Materials Performance Materials Total Balance at September 30, 2021, net of accumulated impairment of $227,126 $ 444,233 $ 132,669 $ 576,902 Foreign currency translation impact (249) 49 (200) Impairment (See Note 8) — (9,435) (9,435) Balance at December 31, 2021, net of accumulated impairment of $236,561 $ 443,984 $ 123,283 $ 567,267 |
Other Long-Term Assets (Tables)
Other Long-Term Assets (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Long-term Assets | December 31, 2021 September 30, 2021 Right of use assets $ 27,566 $ 29,302 Interest rate swap (See Note 12) 16,764 12,335 Prepaid unamortized debt issuance cost - revolver 2,277 2,201 SERP investments 1,641 1,439 Vendor contract assets 1,188 1,329 Other long-term assets 4,934 5,378 Total $ 54,370 $ 51,984 |
Accrued Expenses And Other Cu_2
Accrued Expenses And Other Current Liabilities (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Accrued Expenses And Other Current Liabilities | December 31, 2021 September 30, 2021 Accrued compensation $ 29,248 $ 47,360 Income taxes payable 17,268 16,836 Dividends payable 13,655 13,827 Contract liabilities (current) 12,517 8,883 Asset retirement obligation (current) 12,076 11,933 Current portion of operating lease liability 7,677 7,646 Taxes, other than income taxes 7,021 6,620 Current portion of terminated swap liability (See Note 12) 5,855 5,855 Goods and services received, not yet invoiced 4,534 3,866 Accrued interest 1,895 1,846 Interest rate swap liability (See Note 12) 1,161 2,995 Other 8,356 12,130 Total $ 121,263 $ 139,797 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Total Debt | December 31, 2021 September 30, 2021 Senior Secured Term Loan Facility, one-month LIBOR plus 2.00% $ 925,712 $ 928,375 Less: Unamortized debt issuance costs (11,306) (12,031) Total debt 914,406 916,344 Less: Current maturities and short-term debt (13,313) (13,313) Total long-term debt excluding current maturities $ 901,093 $ 903,031 |
Schedule of Principal Repayments of Debt | As of December 31, 2021, scheduled principal repayments of the Term Loan Facility were: Fiscal Year Principal Repayments Remainder of 2022 $ 10,650 2023 10,650 2024 10,650 2025 10,650 2026 883,112 Total $ 925,712 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The notional amounts of our derivative instruments are as follows: December 31, 2021 September 30, 2021 Derivatives designated as hedging instruments: Interest rate swap contract - new agreement $ 553,613 $ 555,210 Derivatives not designated as hedging instruments: Foreign exchange contracts to purchase U.S. dollars $ 4,020 $ 4,225 Foreign exchange contracts to sell U.S. dollars 26,915 23,235 |
Schedule of Derivative Instruments in the Consolidated Balance Sheets | The fair values of our derivative instruments included in the Consolidated Balance Sheets are as follows: Derivative Assets Derivative Liabilities Consolidated Balance Sheet Location December 31, 2021 September 30, 2021 December 31, 2021 September 30, 2021 Derivatives designated as hedging instruments: Interest rate swap contract Other long-term assets $ 16,764 $ 12,335 $ — $ — Accrued expenses and other current liabilities — — 1,161 2,995 Other long-term liabilities — — — — Derivatives not designated as hedging instruments: Foreign exchange contracts Prepaid expenses and other current assets $ — $ — $ — $ — Accrued expenses and other current liabilities — — 185 388 |
Schedule of Derivative Instruments on Consolidated Statements of Income | The following table summarizes the effects of our derivative instruments on our Consolidated Statements of Income: (Loss) Gain Recognized in Statement of Income Consolidated Statement of Income Location Three Months Ended December 31, 2021 2020 Derivatives designated as hedging instruments: Interest rate swap contract Interest expense, net $ (791) $ (2,445) Terminated interest rate swap contract Interest expense, net (2,786) (929) Derivatives not designated as hedging instruments: Foreign exchange contracts Other (expense) income, net $ (712) $ 122 The following table summarizes the effects of our derivative instruments on Accumulated other comprehensive income: Amount of Gain (Loss) Recognized in Other Comprehensive Income Three Months Ended December 31, 2021 2020 Derivatives designated as hedging instruments: Interest rate swap contract $ 5,471 $ (6,449) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | Three Months Ended December 31, 2021 2020 Numerator: Net income available to common shares $ 27,428 $ 31,530 Denominator: Weighted average common shares 28,451 29,123 Weighted average effect of dilutive securities 370 475 Diluted weighted average common shares 28,821 29,598 Earnings per share: Basic $ 0.96 $ 1.08 Diluted $ 0.95 $ 1.07 |
Schedule of Shares Exclude From Calculation of Diluted Earnings Per Share | Shares excluded from the calculation of Diluted earnings per share as their inclusion would have been anti-dilutive under the treasury stock method are as follows: Three Months Ended December 31, 2021 2020 Outstanding stock options 132 15 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Revenue | Revenue from external customers by segment are as follows: Three Months Ended December 31, 2021 2020 Electronic Materials: CMP slurries $ 146,141 $ 134,721 Electronic chemicals 91,139 80,006 CMP pads 24,039 22,071 Materials technologies 6,332 — Total Electronic Materials 267,651 236,798 Performance Materials: PIM 26,635 25,907 Wood treatment 14,958 17,323 QED 7,802 7,835 Total Performance Materials 49,395 51,065 Total $ 317,046 $ 287,863 |
Schedule of Capital Expenditures by Segment | Capital expenditures by segment are as follows: Three Months Ended December 31, 2021 2020 Electronic Materials $ 7,136 $ 5,434 Performance Materials 1,610 1,310 Corporate 1,794 3,475 Total $ 10,540 $ 10,219 |
Schedule of Segment Adjusted EBITDA | Adjusted EBITDA by segment is as follows: Three Months Ended December 31, 2021 2020 Net income $ 27,428 $ 31,530 Interest expense, net 9,743 9,585 Income taxes 3,217 7,546 Depreciation and amortization 32,702 31,891 EBITDA 73,090 80,552 Impairment charges 9,435 7,347 Entegris Transaction-related expenses 6,050 — Future Forward-related expenses 2,979 — Acquisition and integration-related expenses 307 2,369 Net costs related to restructuring of the wood treatment business 26 26 Costs related to the Pandemic, net of grants received — 1,262 Consolidated adjusted EBITDA $ 91,887 $ 91,556 Segment adjusted EBITDA: Electronic Materials $ 88,082 $ 80,756 Performance Materials 15,001 22,975 Unallocated corporate expenses (11,196) (12,175) Consolidated adjusted EBITDA $ 91,887 $ 91,556 |
Background and Basis of Prese_3
Background and Basis of Presentation (Details) - segment | 3 Months Ended | |
Dec. 31, 2021 | Apr. 01, 2021 | |
Business Acquisition [Line Items] | ||
Number of reportable segments | 2 | |
ITS | ||
Business Acquisition [Line Items] | ||
Acquisition of ITS | 100.00% |
Merger Agreement (Details)
Merger Agreement (Details) - Entegris, Inc. $ / shares in Units, $ in Millions | Dec. 14, 2021USD ($)$ / sharesshares |
Asset Acquisition, Contingent Consideration [Line Items] | |
Cash per share (in dollars per share) | $ / shares | $ 133 |
Right to receive shares (in shares) | shares | 0.4506 |
Contract termination fees | $ | $ 187 |
Revenue From Contracts With C_3
Revenue From Contracts With Customers - Reconciliation of Contract Balances (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 |
Contract with Customer, Liability [Abstract] | ||
Contract liabilities (current) | $ 12,517 | $ 8,883 |
Contract liabilities (noncurrent) | $ 3,170 | $ 1,788 |
Severance and Exit Costs (Detai
Severance and Exit Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 26 | $ 26 |
Restructuring current liability | 2,572 | |
Employee Severance | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 2,979 | |
Employee Severance | Cost of Sales | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 969 | |
Employee Severance | Selling, General and Administrative Expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 2,010 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 |
Assets: | ||
Derivative financial instruments | $ 16,764 | $ 12,335 |
Recurring | ||
Assets: | ||
Cash and cash equivalents | 200,023 | 185,979 |
Other long-term investments | 1,641 | 1,439 |
Derivative financial instruments | 16,764 | 12,335 |
Total assets | 218,428 | 199,753 |
Liabilities: | ||
Derivative financial instruments | 1,346 | 3,383 |
Total liabilities | 1,346 | 3,383 |
Recurring | Level 1 | ||
Assets: | ||
Cash and cash equivalents | 200,023 | 185,979 |
Other long-term investments | 1,641 | 1,439 |
Derivative financial instruments | 0 | 0 |
Total assets | 201,664 | 187,418 |
Liabilities: | ||
Derivative financial instruments | 0 | 0 |
Total liabilities | 0 | 0 |
Recurring | Level 2 | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Other long-term investments | 0 | 0 |
Derivative financial instruments | 16,764 | 12,335 |
Total assets | 16,764 | 12,335 |
Liabilities: | ||
Derivative financial instruments | 1,346 | 3,383 |
Total liabilities | 1,346 | 3,383 |
Recurring | Level 3 | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Other long-term investments | 0 | 0 |
Derivative financial instruments | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Derivative financial instruments | 0 | 0 |
Total liabilities | $ 0 | $ 0 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 |
Inventory, Net, Items Net of Reserve Alternative [Abstract] | ||
Raw materials | $ 70,718 | $ 67,969 |
Work in process | 17,134 | 17,358 |
Finished goods | 86,593 | 88,137 |
Total | $ 174,445 | $ 173,464 |
Goodwill - Goodwill Rollforward
Goodwill - Goodwill Rollforward (Details) - USD ($) | 3 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Jul. 01, 2021 | |
Goodwill [Line Items] | ||||
Accumulated impairment amounts | $ 236,561,000 | $ 227,126,000 | ||
Goodwill [Roll Forward] | ||||
Goodwill, beginning balance | 576,902,000 | |||
Foreign currency translation impact | (200,000) | |||
Impairment | (9,435,000) | |||
Goodwill, ending balance | 567,267,000 | |||
Wood treatment | ||||
Goodwill [Roll Forward] | ||||
Impairment | (9,435,000) | $ (4,081,000) | ||
Goodwill, ending balance | 0 | |||
PIM Reporting Unit | ||||
Goodwill [Roll Forward] | ||||
Fair value in excess of carrying value, percent | 5.00% | |||
Electronic Materials | ||||
Goodwill [Roll Forward] | ||||
Goodwill, beginning balance | 444,233,000 | |||
Foreign currency translation impact | (249,000) | |||
Impairment | 0 | |||
Goodwill, ending balance | 443,984,000 | |||
Performance Materials | ||||
Goodwill [Roll Forward] | ||||
Goodwill, beginning balance | 132,669,000 | |||
Foreign currency translation impact | 49,000 | |||
Impairment | (9,435,000) | |||
Goodwill, ending balance | $ 123,283,000 |
Wood Treatment - Narrative (Det
Wood Treatment - Narrative (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | |
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Goodwill impairment loss | $ 9,435,000 | ||
Goodwill | 567,267,000 | $ 576,902,000 | |
Income taxes | 3,217,000 | $ 7,546,000 | |
Wood treatment | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Goodwill impairment loss | 9,435,000 | 4,081,000 | |
Goodwill | 0 | ||
Goodwill and long lived asset impairment charges | 7,347,000 | ||
Income taxes | $ 0 | $ 0 |
Other Long-Term Assets (Details
Other Long-Term Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 |
Other long-term assets [Abstract] | ||
Right of use assets | $ 27,566 | $ 29,302 |
Interest rate swap | 16,764 | 12,335 |
Prepaid unamortized debt issuance cost - revolver | 2,277 | 2,201 |
SERP investments | 1,641 | 1,439 |
Vendor contract assets | 1,188 | 1,329 |
Other long-term assets | 4,934 | 5,378 |
Total | $ 54,370 | $ 51,984 |
Accrued Expenses And Other Cu_3
Accrued Expenses And Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 |
Payables and Accruals [Abstract] | ||
Accrued compensation | $ 29,248 | $ 47,360 |
Income taxes payable | 17,268 | 16,836 |
Dividends payable | 13,655 | 13,827 |
Contract liabilities (current) | 12,517 | 8,883 |
Asset retirement obligation (current) | 12,076 | 11,933 |
Current portion of operating lease liability | 7,677 | 7,646 |
Taxes, other than income taxes | 7,021 | 6,620 |
Current portion of terminated swap liability | 5,855 | 5,855 |
Goods and services received, not yet invoiced | 4,534 | 3,866 |
Accrued interest | 1,895 | 1,846 |
Interest rate swap liability | 1,161 | 2,995 |
Other | 8,356 | 12,130 |
Total | $ 121,263 | $ 139,797 |
Debt - Total Debt (Details)
Debt - Total Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Sep. 30, 2021 | |
Debt Instrument [Line Items] | ||
Less: Unamortized debt issuance costs | $ (11,306) | $ (12,031) |
Total | 914,406 | 916,344 |
Less: Current maturities and short-term debt | (13,313) | (13,313) |
Long-term debt, net of current portion | 901,093 | 903,031 |
Senior secured term loan facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 925,712 | $ 928,375 |
Senior secured term loan facility | LIBOR | Credit Agreement | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.00% |
Debt - Narrative (Details)
Debt - Narrative (Details) - Revolving credit facility - Line of credit | Dec. 31, 2021USD ($) |
Debt Instrument [Line Items] | |
Revolving Credit Facility, outstanding | $ 0 |
Amended Credit Agreement | |
Debt Instrument [Line Items] | |
Available credit remaining | $ 350,000,000 |
Debt - Principal Repayments (De
Debt - Principal Repayments (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 |
Principal Repayments | ||
Total | $ 914,406 | $ 916,344 |
Term loan facility | ||
Principal Repayments | ||
Remainder of 2022 | 10,650 | |
2023 | 10,650 | |
2024 | 10,650 | |
2025 | 10,650 | |
2026 | 883,112 | |
Total | $ 925,712 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Narrative (Details) - Interest rate swap contract - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Derivative Instruments [Abstract] | ||
Interest rate swap, in loss position | $ 35,300 | |
Reclassified from accumulated other comprehensive income into interest expense | $ 12,305 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Notional Amounts (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 |
Interest rate swap contract | Derivatives designated as hedging instruments: | ||
Derivative [Line Items] | ||
Derivative notional amount | $ 553,613 | $ 555,210 |
Foreign exchange contracts | Buy | Derivatives not designated as hedging instruments: | ||
Derivative [Line Items] | ||
Derivative notional amount | 4,020 | 4,225 |
Foreign exchange contracts | Sell | Derivatives not designated as hedging instruments: | ||
Derivative [Line Items] | ||
Derivative notional amount | $ 26,915 | $ 23,235 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Fair Value of Derivative Instruments in the Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 |
Derivatives designated as hedging instruments: | Interest rate swap contract | Other long-term assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | $ 16,764 | $ 12,335 |
Derivative Liabilities | 0 | 0 |
Derivatives designated as hedging instruments: | Interest rate swap contract | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Derivative Liabilities | 1,161 | 2,995 |
Derivatives designated as hedging instruments: | Interest rate swap contract | Other long-term liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Derivative Liabilities | 0 | 0 |
Derivatives not designated as hedging instruments: | Foreign exchange contracts | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Derivative Liabilities | 185 | 388 |
Derivatives not designated as hedging instruments: | Foreign exchange contracts | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Derivative Liabilities | $ 0 | $ 0 |
Derivative Financial Instrume_6
Derivative Financial Instruments - Effect of Derivative Instruments on the Consolidated Statement of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Derivatives designated as hedging instruments: | Interest rate swap contract | Interest expense, net | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
(Loss) Gain Recognized in Statement of Income | $ (791) | $ (2,445) |
Derivatives designated as hedging instruments: | Terminated interest rate swap contract | Interest expense, net | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
(Loss) Gain Recognized in Statement of Income | (2,786) | (929) |
Derivatives not designated as hedging instruments: | Foreign exchange contracts | Other (expense) income, net | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
(Loss) Gain Recognized in Statement of Income | $ (712) | $ 122 |
Derivative Financial Instrume_7
Derivative Financial Instruments - Effect of Derivative Instruments on Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Amount of Gain (Loss) Recognized in Other Comprehensive Income | $ 5,471 | $ (6,449) |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Abrasive particle supply agreement | |
Environmental Exit Cost [Line Items] | |
Purchase obligation | $ 11,030 |
Non-water Based Carrier Fluid | |
Environmental Exit Cost [Line Items] | |
Purchase obligation | 11,486 |
KMG-Bernuth | |
Environmental Exit Cost [Line Items] | |
Estimated reserve, remaining | $ 2,711 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 3,217 | $ 7,546 |
Effective tax rate | 10.50% | 19.30% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | ||
Net income available to common shares | $ 27,428 | $ 31,530 |
Denominator: | ||
Weighted average common shares (in shares) | 28,451 | 29,123 |
Weighted average effect of dilutive securities | ||
Weighted average effect of dilutive securities (in shares) | 370 | 475 |
Diluted weighted average common shares (in shares) | 28,821 | 29,598 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.96 | $ 1.08 |
Diluted (in dollars per share) | $ 0.95 | $ 1.07 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Outstanding stock options (in shares) | 132 | 15 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) | 3 Months Ended |
Dec. 31, 2021segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Reporting - Revenue fro
Segment Reporting - Revenue from External Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 317,046 | $ 287,863 |
Electronic Materials | Operating segment | ||
Segment Reporting Information [Line Items] | ||
Revenue | 267,651 | 236,798 |
Electronic Materials | CMP slurries | Operating segment | ||
Segment Reporting Information [Line Items] | ||
Revenue | 146,141 | 134,721 |
Electronic Materials | Electronic chemicals | Operating segment | ||
Segment Reporting Information [Line Items] | ||
Revenue | 91,139 | 80,006 |
Electronic Materials | CMP pads | Operating segment | ||
Segment Reporting Information [Line Items] | ||
Revenue | 24,039 | 22,071 |
Electronic Materials | Materials technologies | Operating segment | ||
Segment Reporting Information [Line Items] | ||
Revenue | 6,332 | 0 |
Performance Materials | Operating segment | ||
Segment Reporting Information [Line Items] | ||
Revenue | 49,395 | 51,065 |
Performance Materials | PIM | Operating segment | ||
Segment Reporting Information [Line Items] | ||
Revenue | 26,635 | 25,907 |
Performance Materials | Wood treatment | Operating segment | ||
Segment Reporting Information [Line Items] | ||
Revenue | 14,958 | 17,323 |
Performance Materials | QED | Operating segment | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 7,802 | $ 7,835 |
Segment Reporting - Capital Exp
Segment Reporting - Capital Expenditures (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Capital expenditures | $ 10,540 | $ 10,219 |
Operating segment | Electronic Materials | ||
Segment Reporting Information [Line Items] | ||
Capital expenditures | 7,136 | 5,434 |
Operating segment | Performance Materials | ||
Segment Reporting Information [Line Items] | ||
Capital expenditures | 1,610 | 1,310 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Capital expenditures | $ 1,794 | $ 3,475 |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation from Segment Adjusted EBITDA (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Net income | $ 27,428 | $ 31,530 |
Interest expense, net | 9,743 | 9,585 |
Income taxes | 3,217 | 7,546 |
Depreciation and amortization | 32,702 | 31,891 |
EBITDA | 73,090 | 80,552 |
Impairment charges | 9,435 | 7,347 |
Entegris Transaction-related expenses | 6,050 | 0 |
Net costs related to restructuring | 26 | 26 |
Acquisition and integration-related expenses | 307 | 2,369 |
Costs related to the Pandemic, net of grants received | 0 | 1,262 |
Consolidated adjusted EBITDA | 91,887 | 91,556 |
Future Forward Program | ||
Segment Reporting Information [Line Items] | ||
Net costs related to restructuring | 2,979 | 0 |
Operating segment | Electronic Materials | ||
Segment Reporting Information [Line Items] | ||
Consolidated adjusted EBITDA | 88,082 | 80,756 |
Operating segment | Performance Materials | ||
Segment Reporting Information [Line Items] | ||
Consolidated adjusted EBITDA | 15,001 | 22,975 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Unallocated corporate expenses | $ (11,196) | $ (12,175) |