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MKS Instruments first quarter 2023 results show hints of recovery

04 May 2023

Announces that its global operations are “restored” following February, 2023, ransomware attack.

MKS Instruments, the industrial equipment provider that owns major photonics brands including Spectra-Physics lasers, Newport, and ESI among others, has this week reported its first quarter 2023 financial results. Quarter highlights included: total revenue of $794 million; a GAAP net loss per diluted share of $0.64; non-GAAP net earnings per diluted share of $0.48; operating cash flow of $37 million, and free cash flow of $20 million.

In March, 2023, the company announced that February’s ransomware attack would hit sales in the opening quarter of 2023 “by around $200 million”. In fact, this week’s newly-released figures reflect an almost $300 million drop between Q4, 2022 and Q1, 2023 – with the latest quarter’s total net revenues sliding to $794 million from $1,085 million.

However the Q1, 2023 total revenues were up $52 million on the prior year’s equivalent quarter, driven by stronger revenues from electronics and packaging, and speciality industrial divisions, more than offsetting a slump in semiconductor revenues.

‘On track for Q2 recovery’

“We have restored our global operations following the ransomware incident we identified in February and are on track to meet our commitment to substantially recover revenue by the end of the second quarter,” commented John T.C. Lee, President and CEO. “Thanks to the dedication, hard work, and ingenuity of our 10,000-plus employees, we are a stronger and more resilient company today than we have ever been.”

Lee added, “Amid macro and end market-driven softness entering the second quarter, we are making excellent progress integrating Atotech [acquired in July, 2021], which positions MKS to capitalize on a number of attractive long-term opportunities with our portfolio of foundational solutions across the semiconductor, electronics and packaging, and specialty industrial markets.”

“We executed well in ramping factory utilization as we emerged from the ransomware incident, which, combined with prudent cost control, allowed us to deliver positive free cash flow in the first quarter, despite the unusual challenges we faced,” said Seth H. Bagshaw, Executive Vice President and CFO.

Bagshaw added, “Moving forward, we are focused on resuming strong free cash flow generation, realizing acquisition synergies and executing our disciplined strategy of de-levering our balance sheet.”

Second quarter 2023 outlook

The company says it is expecting for the second quarter of 2023, “revenue of $980 million (+/- $50 million); adjusted pre-tax earnings (EBITDA) of $223 million (+/-$27 million); and non-GAAP net earnings per diluted share of $1.13 (+/- $0.29).

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