mksi-10q_20210331.htm
false Q1 --12-31 0001049502 true true true true P3D P30D P30D P3M 0001049502 2021-01-01 2021-03-31 xbrli:shares 0001049502 2021-04-27 iso4217:USD 0001049502 2021-03-31 0001049502 2020-12-31 iso4217:USD xbrli:shares 0001049502 us-gaap:ProductMember 2021-01-01 2021-03-31 0001049502 us-gaap:ProductMember 2020-01-01 2020-03-31 0001049502 us-gaap:ServiceMember 2021-01-01 2021-03-31 0001049502 us-gaap:ServiceMember 2020-01-01 2020-03-31 0001049502 2020-01-01 2020-03-31 0001049502 us-gaap:CommonStockMember 2020-12-31 0001049502 us-gaap:AdditionalPaidInCapitalMember 2020-12-31 0001049502 us-gaap:RetainedEarningsMember 2020-12-31 0001049502 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2020-12-31 0001049502 us-gaap:CommonStockMember 2021-01-01 2021-03-31 0001049502 us-gaap:AdditionalPaidInCapitalMember 2021-01-01 2021-03-31 0001049502 us-gaap:RetainedEarningsMember 2021-01-01 2021-03-31 0001049502 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2021-01-01 2021-03-31 0001049502 us-gaap:CommonStockMember 2021-03-31 0001049502 us-gaap:AdditionalPaidInCapitalMember 2021-03-31 0001049502 us-gaap:RetainedEarningsMember 2021-03-31 0001049502 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2021-03-31 0001049502 us-gaap:CommonStockMember 2019-12-31 0001049502 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001049502 us-gaap:RetainedEarningsMember 2019-12-31 0001049502 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2019-12-31 0001049502 2019-12-31 0001049502 us-gaap:CommonStockMember 2020-01-01 2020-03-31 0001049502 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0001049502 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0001049502 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2020-01-01 2020-03-31 0001049502 us-gaap:CommonStockMember 2020-03-31 0001049502 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001049502 us-gaap:RetainedEarningsMember 2020-03-31 0001049502 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2020-03-31 0001049502 2020-03-31 0001049502 us-gaap:StockAppreciationRightsSARSMember 2021-01-01 2021-03-31 0001049502 us-gaap:AccountingStandardsUpdate201912Member 2021-03-31 0001049502 us-gaap:AccountingStandardsUpdate201409Member 2021-03-31 0001049502 us-gaap:AccountingStandardsUpdate201409Member 2020-12-31 0001049502 2021-01-01 0001049502 mksi:DeferredRevenueMember 2021-03-31 0001049502 mksi:DeferredRevenueMember 2021-01-01 0001049502 mksi:CustomerAdvancesMember 2021-03-31 0001049502 mksi:CustomerAdvancesMember 2021-01-01 0001049502 mksi:VacuumAndAnalysisSegmentMember us-gaap:ProductMember 2021-01-01 2021-03-31 0001049502 mksi:LightAndMotionSegmentMember us-gaap:ProductMember 2021-01-01 2021-03-31 0001049502 mksi:EquipmentAndSolutionsMember us-gaap:ProductMember 2021-01-01 2021-03-31 0001049502 mksi:VacuumAndAnalysisSegmentMember us-gaap:ServiceMember 2021-01-01 2021-03-31 0001049502 mksi:LightAndMotionSegmentMember us-gaap:ServiceMember 2021-01-01 2021-03-31 0001049502 mksi:EquipmentAndSolutionsMember us-gaap:ServiceMember 2021-01-01 2021-03-31 0001049502 mksi:VacuumAndAnalysisSegmentMember 2021-01-01 2021-03-31 0001049502 mksi:LightAndMotionSegmentMember 2021-01-01 2021-03-31 0001049502 mksi:EquipmentAndSolutionsMember 2021-01-01 2021-03-31 0001049502 us-gaap:ProductMember mksi:VacuumAndAnalysisSegmentMember 2020-01-01 2020-03-31 0001049502 us-gaap:ProductMember mksi:LightAndMotionSegmentMember 2020-01-01 2020-03-31 0001049502 us-gaap:ProductMember mksi:EquipmentAndSolutionsMember 2020-01-01 2020-03-31 0001049502 us-gaap:ServiceMember mksi:VacuumAndAnalysisSegmentMember 2020-01-01 2020-03-31 0001049502 us-gaap:ServiceMember mksi:LightAndMotionSegmentMember 2020-01-01 2020-03-31 0001049502 us-gaap:ServiceMember mksi:EquipmentAndSolutionsMember 2020-01-01 2020-03-31 0001049502 mksi:VacuumAndAnalysisSegmentMember 2020-01-01 2020-03-31 0001049502 mksi:LightAndMotionSegmentMember 2020-01-01 2020-03-31 0001049502 mksi:EquipmentAndSolutionsMember 2020-01-01 2020-03-31 0001049502 mksi:TimeDepositsAndCertificatesOfDepositMember 2021-03-31 0001049502 us-gaap:BankersAcceptanceMember 2021-03-31 0001049502 us-gaap:CommercialPaperMember 2021-03-31 0001049502 us-gaap:USTreasurySecuritiesMember 2021-03-31 0001049502 mksi:LongTermInvestmentsMember mksi:GroupInsuranceContractsMember 2021-03-31 0001049502 mksi:TimeDepositsAndCertificatesOfDepositMember 2020-12-31 0001049502 us-gaap:BankersAcceptanceMember 2020-12-31 0001049502 us-gaap:USTreasurySecuritiesMember 2020-12-31 0001049502 mksi:LongTermInvestmentsMember mksi:GroupInsuranceContractsMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member us-gaap:MoneyMarketFundsMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:CommercialPaperMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:USTreasurySecuritiesMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember mksi:TimeDepositsAndCertificatesOfDepositMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member mksi:TimeDepositsAndCertificatesOfDepositMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:BankersAcceptanceMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:BankersAcceptanceMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember mksi:GroupInsuranceContractsMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member mksi:GroupInsuranceContractsMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignExchangeForwardMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:ForeignExchangeForwardMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:InterestRateSwapMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:InterestRateSwapMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember mksi:IsraeliPensionAssetsMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member mksi:IsraeliPensionAssetsMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember mksi:MutualFundsAndExchangeTradedFundsMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member mksi:MutualFundsAndExchangeTradedFundsMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:OtherCurrentLiabilitiesMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:OtherCurrentLiabilitiesMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:OtherNoncurrentLiabilitiesMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:OtherNoncurrentLiabilitiesMember 2021-03-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member us-gaap:MoneyMarketFundsMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:CommercialPaperMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:USTreasurySecuritiesMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember mksi:TimeDepositsAndCertificatesOfDepositMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member mksi:TimeDepositsAndCertificatesOfDepositMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:BankersAcceptanceMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:BankersAcceptanceMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember mksi:GroupInsuranceContractsMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member mksi:GroupInsuranceContractsMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember mksi:IsraeliPensionAssetsMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member mksi:IsraeliPensionAssetsMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember mksi:MutualFundsAndExchangeTradedFundsMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member mksi:MutualFundsAndExchangeTradedFundsMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignExchangeForwardMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:ForeignExchangeForwardMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:InterestRateSwapMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:InterestRateSwapMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:OtherCurrentLiabilitiesMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:OtherCurrentLiabilitiesMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:OtherNoncurrentLiabilitiesMember 2020-12-31 0001049502 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:OtherNoncurrentLiabilitiesMember 2020-12-31 0001049502 us-gaap:ForeignExchangeForwardMember 2021-03-31 0001049502 us-gaap:ForeignExchangeForwardMember 2020-12-31 0001049502 us-gaap:ForeignExchangeForwardMember mksi:USDollarJapaneseYenMember 2021-03-31 0001049502 us-gaap:ForeignExchangeForwardMember mksi:USDollarKoreanWonMember 2021-03-31 0001049502 us-gaap:ForeignExchangeForwardMember mksi:USDollarEuroMember 2021-03-31 0001049502 us-gaap:ForeignExchangeForwardMember mksi:UsDollarUkPoundMember 2021-03-31 0001049502 us-gaap:ForeignExchangeForwardMember mksi:USDollarTaiwaneseDollarsMember 2021-03-31 0001049502 us-gaap:ForeignExchangeForwardMember mksi:USDollarJapaneseYenMember 2020-12-31 0001049502 us-gaap:ForeignExchangeForwardMember mksi:USDollarKoreanWonMember 2020-12-31 0001049502 us-gaap:ForeignExchangeForwardMember mksi:USDollarEuroMember 2020-12-31 0001049502 us-gaap:ForeignExchangeForwardMember mksi:UsDollarUkPoundMember 2020-12-31 0001049502 us-gaap:ForeignExchangeForwardMember mksi:USDollarTaiwaneseDollarsMember 2020-12-31 0001049502 mksi:SwapAgreementOneMember mksi:IncrementalTermLoanFacilityMember us-gaap:InterestRateSwapMember 2021-01-01 2021-03-31 0001049502 mksi:SwapAgreementTwoMember mksi:IncrementalTermLoanFacilityMember us-gaap:InterestRateSwapMember 2021-01-01 2021-03-31 0001049502 mksi:SwapAgreementThreeMember mksi:IncrementalTermLoanFacilityMember us-gaap:InterestRateSwapMember 2021-01-01 2021-03-31 xbrli:pure 0001049502 mksi:SwapAgreementOneMember mksi:IncrementalTermLoanFacilityMember us-gaap:InterestRateSwapMember 2021-03-31 0001049502 mksi:SwapAgreementTwoMember mksi:IncrementalTermLoanFacilityMember us-gaap:InterestRateSwapMember 2021-03-31 0001049502 mksi:SwapAgreementThreeMember mksi:IncrementalTermLoanFacilityMember us-gaap:InterestRateSwapMember 2021-03-31 0001049502 mksi:IncrementalTermLoanFacilityMember us-gaap:InterestRateSwapMember 2021-03-31 0001049502 mksi:SwapAgreementOneMember mksi:IncrementalTermLoanFacilityMember us-gaap:InterestRateSwapMember 2020-12-31 0001049502 mksi:SwapAgreementTwoMember mksi:IncrementalTermLoanFacilityMember us-gaap:InterestRateSwapMember 2020-12-31 0001049502 mksi:SwapAgreementThreeMember mksi:IncrementalTermLoanFacilityMember us-gaap:InterestRateSwapMember 2020-12-31 0001049502 mksi:IncrementalTermLoanFacilityMember us-gaap:InterestRateSwapMember 2020-12-31 0001049502 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:ForeignExchangeContractMember 2021-03-31 0001049502 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:InterestRateSwapMember 2021-03-31 0001049502 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:ForeignExchangeContractMember 2020-12-31 0001049502 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:InterestRateSwapMember 2020-12-31 0001049502 us-gaap:DesignatedAsHedgingInstrumentMember 2021-03-31 0001049502 us-gaap:DesignatedAsHedgingInstrumentMember 2020-12-31 0001049502 us-gaap:ForeignExchangeForwardMember us-gaap:OtherCurrentAssetsMember 2021-03-31 0001049502 us-gaap:ForeignExchangeForwardMember us-gaap:OtherCurrentLiabilitiesMember 2021-03-31 0001049502 us-gaap:ForeignExchangeForwardMember us-gaap:OtherCurrentLiabilitiesMember 2020-12-31 0001049502 us-gaap:InterestRateSwapMember us-gaap:OtherNoncurrentAssetsMember 2021-03-31 0001049502 us-gaap:InterestRateSwapMember us-gaap:OtherNoncurrentLiabilitiesMember 2020-12-31 0001049502 us-gaap:InterestRateSwapMember us-gaap:OtherNoncurrentLiabilitiesMember 2021-03-31 0001049502 us-gaap:CashFlowHedgingMember us-gaap:ForeignExchangeForwardMember 2021-01-01 2021-03-31 0001049502 us-gaap:CashFlowHedgingMember us-gaap:ForeignExchangeForwardMember 2020-01-01 2020-03-31 0001049502 us-gaap:ForeignExchangeForwardMember 2021-01-01 2021-03-31 0001049502 us-gaap:ForeignExchangeForwardMember 2020-01-01 2020-03-31 0001049502 srt:MinimumMember 2021-03-31 0001049502 srt:MaximumMember 2021-03-31 0001049502 2020-01-01 2020-12-31 0001049502 us-gaap:PatentedTechnologyMember 2021-03-31 0001049502 us-gaap:CustomerRelationshipsMember 2021-03-31 0001049502 mksi:PatentsTrademarksTradeNamesAndOtherMember 2021-03-31 0001049502 us-gaap:PatentedTechnologyMember 2021-01-01 2021-03-31 0001049502 us-gaap:CustomerRelationshipsMember 2021-01-01 2021-03-31 0001049502 mksi:PatentsTrademarksTradeNamesAndOtherMember 2021-01-01 2021-03-31 0001049502 us-gaap:PatentedTechnologyMember 2020-12-31 0001049502 us-gaap:CustomerRelationshipsMember 2020-12-31 0001049502 mksi:PatentsTrademarksTradeNamesAndOtherMember 2020-12-31 0001049502 us-gaap:PatentedTechnologyMember 2020-01-01 2020-12-31 0001049502 us-gaap:CustomerRelationshipsMember 2020-01-01 2020-12-31 0001049502 mksi:PatentsTrademarksTradeNamesAndOtherMember 2020-01-01 2020-12-31 0001049502 us-gaap:TrademarksAndTradeNamesMember 2021-03-31 0001049502 mksi:NewportCorporationMember mksi:TermLoanCreditAgreementMember us-gaap:SecuredDebtMember 2021-03-31 0001049502 mksi:NewportCorporationMember mksi:TermLoanCreditAgreementMember us-gaap:SecuredDebtMember 2021-01-01 2021-03-31 0001049502 mksi:NewportCorporationMember mksi:TermLoanCreditAgreementMember us-gaap:SecuredDebtMember mksi:FederalFundsRateMember 2021-01-01 2021-03-31 0001049502 mksi:NewportCorporationMember mksi:TermLoanCreditAgreementMember us-gaap:SecuredDebtMember mksi:AdjustedOneMonthLiborMember 2021-01-01 2021-03-31 0001049502 mksi:NewportCorporationMember mksi:TermLoanCreditAgreementMember us-gaap:SecuredDebtMember us-gaap:InterestRateFloorMember 2021-01-01 2021-03-31 0001049502 mksi:TermLoanCreditAgreementMember mksi:RepricingAmendmentMember us-gaap:LondonInterbankOfferedRateLIBORMember srt:MaximumMember 2021-01-01 2021-03-31 0001049502 mksi:TermLoanCreditAgreementMember mksi:RepricingAmendmentMember us-gaap:LondonInterbankOfferedRateLIBORMember srt:MinimumMember 2021-01-01 2021-03-31 0001049502 mksi:TermLoanCreditAgreementMember mksi:RepricingAmendmentMember mksi:LiborFloorRateMember 2021-01-01 2021-03-31 0001049502 mksi:TermLoanCreditAgreementMember mksi:IncrementalTermLoanFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2021-01-01 2021-03-31 0001049502 mksi:TermLoanCreditAgreementMember mksi:IncrementalTermLoanFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2020-01-01 2020-12-31 0001049502 mksi:TermLoanCreditAgreementMember mksi:IncrementalTermLoanFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2021-03-31 0001049502 mksi:TermLoanCreditAgreementMember mksi:IncrementalTermLoanFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2020-12-31 0001049502 mksi:ElectroScientificIndustriesIncMember mksi:IncrementalTermLoanFacilityMember mksi:DefinitiveMergerAgreementMember srt:MaximumMember 2019-02-01 2019-02-01 0001049502 mksi:ElectroScientificIndustriesIncMember mksi:IncrementalTermLoanFacilityMember mksi:DefinitiveMergerAgreementMember 2019-02-01 2019-02-01 0001049502 mksi:ElectroScientificIndustriesIncMember mksi:IncrementalTermLoanFacilityMember mksi:DefinitiveMergerAgreementMember 2019-02-01 0001049502 mksi:ElectroScientificIndustriesIncMember mksi:IncrementalTermLoanFacilityMember mksi:DefinitiveMergerAgreementMember us-gaap:BaseRateMember 2019-02-01 2019-02-01 0001049502 mksi:ElectroScientificIndustriesIncMember mksi:IncrementalTermLoanFacilityMember mksi:DefinitiveMergerAgreementMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-02-01 2019-02-01 0001049502 mksi:NewportCorporationMember mksi:TermLoanCreditAgreementMember mksi:IncrementalTermLoanFacilityMember 2021-03-31 0001049502 mksi:NewportCorporationMember mksi:TwoThousandNineteenTermLoanRefinancingFacilityMember us-gaap:SecuredDebtMember 2019-09-27 0001049502 mksi:NewportCorporationMember mksi:IncrementalTermLoanFacilityMember us-gaap:SecuredDebtMember 2019-09-27 2019-09-27 0001049502 mksi:NewportCorporationMember mksi:TwoThousandNineteenTermLoanRefinancingFacilityMember 2019-12-31 0001049502 mksi:NewportCorporationMember mksi:TwoThousandNineteenTermLoanRefinancingFacilityMember 2021-03-31 0001049502 mksi:NewportCorporationMember mksi:TwoThousandNineteenTermLoanRefinancingFacilityMember us-gaap:SecuredDebtMember 2021-03-31 0001049502 mksi:NewportCorporationMember us-gaap:SecuredDebtMember us-gaap:BaseRateMember 2021-01-01 2021-03-31 0001049502 mksi:NewportCorporationMember mksi:TwoThousandNineteenTermLoanRefinancingFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2021-01-01 2021-03-31 0001049502 mksi:NewportCorporationMember mksi:TwoThousandNineteenTermLoanRefinancingFacilityMember us-gaap:SecuredDebtMember 2021-01-01 2021-03-31 0001049502 mksi:NewportCorporationMember mksi:IncrementalTermLoanFacilityMember us-gaap:SecuredDebtMember 2021-01-01 2021-03-31 0001049502 mksi:NewportCorporationMember mksi:IncrementalTermLoanFacilityMember mksi:SecuredDebtRepricingAmendmentOneMember 2021-01-01 2021-03-31 0001049502 mksi:NewportCorporationMember mksi:IncrementalTermLoanFacilityMember mksi:SecuredDebtRepricingAmendmentOneMember 2021-03-31 0001049502 mksi:ElectroScientificIndustriesIncMember mksi:AssetBasedCreditAgreementMember us-gaap:RevolvingCreditFacilityMember 2021-03-31 0001049502 mksi:ElectroScientificIndustriesIncMember mksi:AssetBasedCreditAgreementMember us-gaap:SecuredDebtMember 2021-01-01 2021-03-31 0001049502 mksi:ElectroScientificIndustriesIncMember mksi:AssetBasedCreditAgreementMember us-gaap:SecuredDebtMember 2021-03-31 0001049502 mksi:ElectroScientificIndustriesIncMember mksi:AssetBasedCreditAgreementMember us-gaap:LetterOfCreditMember 2021-03-31 0001049502 mksi:NewportCorporationMember us-gaap:SecuredDebtMember mksi:AssetBasedCreditAgreementMember 2021-01-01 2021-03-31 0001049502 mksi:NewportCorporationMember us-gaap:SecuredDebtMember mksi:AdjustedOneMonthLiborMember mksi:AssetBasedCreditAgreementMember 2021-01-01 2021-03-31 0001049502 mksi:NewportCorporationMember us-gaap:SecuredDebtMember us-gaap:InterestRateFloorMember 2021-01-01 2021-03-31 0001049502 mksi:NewportCorporationMember us-gaap:SecuredDebtMember us-gaap:InterestRateFloorMember mksi:AssetBasedCreditAgreementMember 2021-01-01 2021-03-31 0001049502 mksi:NewportCorporationMember us-gaap:SecuredDebtMember mksi:FederalFundsRateMember mksi:AssetBasedCreditAgreementMember 2021-01-01 2021-03-31 0001049502 mksi:NewportCorporationMember us-gaap:SecuredDebtMember us-gaap:LondonInterbankOfferedRateLIBORMember mksi:AssetBasedCreditAgreementMember 2021-01-01 2021-03-31 0001049502 mksi:AssetBasedCreditAgreementMember 2021-01-01 2021-03-31 0001049502 mksi:AssetBasedCreditAgreementMember 2021-03-31 0001049502 us-gaap:RevolvingCreditFacilityMember mksi:AssetBasedCreditAgreementMember mksi:NewportCorporationMember 2021-01-01 2021-03-31 0001049502 srt:MaximumMember mksi:NewportCorporationMember us-gaap:SecuredDebtMember mksi:AssetBasedCreditAgreementMember 2021-01-01 2021-03-31 0001049502 srt:MinimumMember mksi:NewportCorporationMember us-gaap:SecuredDebtMember mksi:AssetBasedCreditAgreementMember 2021-01-01 2021-03-31 0001049502 srt:MinimumMember mksi:NewportCorporationMember us-gaap:SecuredDebtMember mksi:AssetBasedCreditAgreementMember 2021-03-31 0001049502 exch:JPBX us-gaap:RevolvingCreditFacilityMember 2021-01-01 2021-03-31 0001049502 exch:JPBX us-gaap:RevolvingCreditFacilityMember 2021-03-31 0001049502 exch:JPBX us-gaap:RevolvingCreditFacilityMember 2020-12-31 0001049502 country:JP 2021-03-31 0001049502 country:JP 2020-12-31 0001049502 country:JP us-gaap:RevolvingCreditFacilityMember 2020-12-31 0001049502 mksi:TermLoanFacilityMember 2021-03-31 0001049502 mksi:TermLoanFacilityMember 2020-12-31 0001049502 mksi:TermLoanFacilityNetMember 2021-03-31 0001049502 mksi:TermLoanFacilityNetMember 2020-12-31 0001049502 us-gaap:OtherCurrentLiabilitiesMember 2021-03-31 0001049502 us-gaap:OtherCurrentLiabilitiesMember 2020-03-31 0001049502 us-gaap:OtherNoncurrentLiabilitiesMember 2021-03-31 0001049502 us-gaap:OtherNoncurrentLiabilitiesMember 2020-03-31 0001049502 us-gaap:RestrictedStockUnitsRSUMember 2021-01-01 2021-03-31 0001049502 us-gaap:RestrictedStockUnitsRSUMember 2020-01-01 2020-03-31 0001049502 us-gaap:CostOfSalesMember 2021-01-01 2021-03-31 0001049502 us-gaap:CostOfSalesMember 2020-01-01 2020-03-31 0001049502 us-gaap:ResearchAndDevelopmentExpenseMember 2021-01-01 2021-03-31 0001049502 us-gaap:ResearchAndDevelopmentExpenseMember 2020-01-01 2020-03-31 0001049502 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2021-01-01 2021-03-31 0001049502 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2020-01-01 2020-03-31 0001049502 mksi:AcquisitionAndIntegrationCostsMember 2020-01-01 2020-03-31 0001049502 us-gaap:RestrictedStockUnitsRSUMember mksi:StockIncentivePlanTwoThousandFourteenMember 2020-12-31 0001049502 mksi:SharesMember mksi:StockIncentivePlanTwoThousandFourteenMember 2021-01-01 2021-03-31 0001049502 us-gaap:RestrictedStockUnitsRSUMember mksi:StockIncentivePlanTwoThousandFourteenMember 2021-01-01 2021-03-31 0001049502 us-gaap:RestrictedStockUnitsRSUMember mksi:StockIncentivePlanTwoThousandFourteenMember 2021-03-31 0001049502 us-gaap:StockAppreciationRightsSARSMember mksi:StockIncentivePlanTwoThousandFourteenMember 2020-12-31 0001049502 us-gaap:StockAppreciationRightsSARSMember mksi:StockIncentivePlanTwoThousandFourteenMember 2021-01-01 2021-03-31 0001049502 us-gaap:StockAppreciationRightsSARSMember mksi:StockIncentivePlanTwoThousandFourteenMember 2021-03-31 0001049502 2011-07-25 0001049502 2011-07-24 2011-07-25 mksi:Segment 0001049502 us-gaap:OperatingSegmentsMember mksi:VacuumAndAnalysisSegmentMember 2021-03-31 0001049502 us-gaap:OperatingSegmentsMember mksi:LightAndMotionSegmentMember 2021-03-31 0001049502 us-gaap:OperatingSegmentsMember mksi:EquipmentAndSolutionsMember 2021-03-31 0001049502 mksi:CorporateReconcilingItemsAndEliminationsMember 2021-03-31 0001049502 us-gaap:OperatingSegmentsMember mksi:VacuumAndAnalysisSegmentMember 2020-12-31 0001049502 us-gaap:OperatingSegmentsMember mksi:LightAndMotionSegmentMember 2020-12-31 0001049502 us-gaap:OperatingSegmentsMember mksi:EquipmentAndSolutionsMember 2020-12-31 0001049502 mksi:CorporateReconcilingItemsAndEliminationsMember 2020-12-31 0001049502 us-gaap:MaterialReconcilingItemsMember 2021-03-31 0001049502 us-gaap:MaterialReconcilingItemsMember 2020-12-31 0001049502 country:US 2021-01-01 2021-03-31 0001049502 country:US 2020-01-01 2020-03-31 0001049502 country:KR 2021-01-01 2021-03-31 0001049502 country:KR 2020-01-01 2020-03-31 0001049502 country:CN 2021-01-01 2021-03-31 0001049502 country:CN 2020-01-01 2020-03-31 0001049502 country:TW 2021-01-01 2021-03-31 0001049502 country:TW 2020-01-01 2020-03-31 0001049502 country:JP 2021-01-01 2021-03-31 0001049502 country:JP 2020-01-01 2020-03-31 0001049502 mksi:OtherAsiaMember 2021-01-01 2021-03-31 0001049502 mksi:OtherAsiaMember 2020-01-01 2020-03-31 0001049502 srt:EuropeMember 2021-01-01 2021-03-31 0001049502 srt:EuropeMember 2020-01-01 2020-03-31 0001049502 country:US 2021-03-31 0001049502 country:US 2020-12-31 0001049502 srt:EuropeMember 2021-03-31 0001049502 srt:EuropeMember 2020-12-31 0001049502 srt:AsiaMember 2021-03-31 0001049502 srt:AsiaMember 2020-12-31 0001049502 mksi:VacuumAndAnalysisSegmentMember 2021-03-31 0001049502 mksi:VacuumAndAnalysisSegmentMember 2020-12-31 0001049502 mksi:LightAndMotionSegmentMember 2021-03-31 0001049502 mksi:LightAndMotionSegmentMember 2020-12-31 0001049502 mksi:EquipmentAndSolutionsMember 2021-03-31 0001049502 mksi:EquipmentAndSolutionsMember 2020-12-31 0001049502 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember mksi:CustomerOneMember 2021-01-01 2021-03-31 0001049502 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember mksi:CustomerOneMember 2020-01-01 2020-03-31 0001049502 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember mksi:CustomerTwoMember 2021-01-01 2021-03-31 0001049502 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember mksi:CustomerTwoMember 2020-01-01 2020-03-31 0001049502 mksi:NewportCorporationMember 2020-01-01 2020-03-31

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

FORM 10-Q

(MARK ONE)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2021

or

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                         to                        

Commission file number 0-23621

MKS INSTRUMENTS, INC.

(Exact name of registrant as specified in its charter)

 

Massachusetts

04-2277512

(State or other jurisdiction

(I.R.S. Employer

of incorporation or organization)

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

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:  (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act:

 

Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

 

 

 

Non-accelerated filer

 

  

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

 

 

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.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

As of April 27, 2021, the registrant had 55,356,545 shares of common stock outstanding.

 

 

 

 

 


 

MKS INSTRUMENTS, INC.

FORM 10-Q

INDEX

 

PART I. FINANCIAL INFORMATION

 

 

ITEM 1.

FINANCIAL STATEMENTS (Unaudited).

3

 

 

 

 

 

 

Condensed Consolidated Balance Sheets – March 31, 2021 and December 31, 2020

3

 

 

 

Condensed Consolidated Statements of Operations and Comprehensive Income – Three months ended March 31, 2021 and 2020

4

 

 

 

Condensed Consolidated Statements of Stockholders’ Equity – Three months ended March 31, 2021 and 2020

5

 

 

 

Condensed Consolidated Statements of Cash Flows – Three months ended March 31, 2021 and 2020

6

 

 

 

Notes to Unaudited Condensed Consolidated Financial Statements

7

 

 

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

28

 

 

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

39

 

 

ITEM 4.

CONTROLS AND PROCEDURES.

39

 

PART II. OTHER INFORMATION

 

 

ITEM 1.

LEGAL PROCEEDINGS.

40

 

 

ITEM 1A.

RISK FACTORS.

40

 

 

 

 

 

ITEM 6.

EXHIBITS.

41

 

 

 

 

SIGNATURES

42

 

 

2


 

PART I.  FINANCIAL INFORMATION

 

ITEM 1.

FINANCIAL STATEMENTS.

MKS INSTRUMENTS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share data)

(Unaudited)

 

ASSETS

 

March 31, 2021

 

 

December 31, 2020

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

699.8

 

 

$

608.3

 

Short-term investments

 

 

209.7

 

 

 

227.7

 

Trade accounts receivable, net of allowance for doubtful accounts of $2.2 and $2.0 at March 31, 2021 and December 31, 2020, respectively

 

 

420.8

 

 

 

392.7

 

Inventories

 

 

515.2

 

 

 

501.4

 

Other current assets

 

 

77.0

 

 

 

74.3

 

Total current assets

 

 

1,922.5

 

 

 

1,804.4

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

297.0

 

 

 

284.3

 

Right-of-use asset

 

 

182.7

 

 

 

184.4

 

Goodwill

 

 

1,062.1

 

 

 

1,066.4

 

Intangible assets, net

 

 

498.4

 

 

 

512.2

 

Long-term investments

 

 

6.5

 

 

 

6.5

 

Other assets

 

 

48.7

 

 

 

45.6

 

Total assets

 

$

4,017.9

 

 

$

3,903.8

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Short-term debt

 

$

9.3

 

 

$

14.5

 

Accounts payable

 

 

146.7

 

 

 

110.6

 

Accrued compensation

 

 

76.3

 

 

 

117.9

 

Income taxes payable

 

 

19.9

 

 

 

18.3

 

Lease liability

 

 

13.8

 

 

 

15.8

 

Deferred revenue and customer advances

 

 

35.4

 

 

 

31.2

 

Other current liabilities

 

 

70.5

 

 

 

65.6

 

Total current liabilities

 

 

371.9

 

 

 

373.9

 

 

 

 

 

 

 

 

 

 

Long-term debt, net

 

 

813.3

 

 

 

815.0

 

Non-current deferred taxes

 

 

71.2

 

 

 

59.2

 

Non-current accrued compensation

 

 

47.4

 

 

 

49.5

 

Non-current lease liability

 

 

191.7

 

 

 

187.4

 

Other non-current liabilities

 

 

53.4

 

 

 

57.9

 

Total liabilities

 

 

1,548.9

 

 

 

1,542.9

 

Commitments and contingencies (Note 18)

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred Stock, $0.01 par value per share, 2,000,000 shares authorized; none issued and outstanding

 

 

 

 

 

 

Common Stock, no par value, 200,000,000 shares authorized; 55,257,268 and 55,196,501 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

 

 

0.1

 

 

 

0.1

 

Additional paid-in capital

 

 

877.9

 

 

 

873.2

 

Retained earnings

 

 

1,598.5

 

 

 

1,487.3

 

Accumulated other comprehensive (loss) income

 

 

(7.5

)

 

 

0.3

 

Total stockholders’ equity

 

 

2,469.0

 

 

 

2,360.9

 

Total liabilities and stockholders’ equity

 

$

4,017.9

 

 

$

3,903.8

 

 

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

3


 

MKS INSTRUMENTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME

(in millions, except per share data)

(Unaudited)

 

 

 

Three Months Ended

March 31,

 

 

 

2021

 

 

2020

 

Net revenues:

 

 

 

 

 

 

 

 

Products

 

$

605.0

 

 

$

461.2

 

Services

 

 

88.9

 

 

 

74.5

 

Total net revenues

 

 

693.9

 

 

 

535.7

 

Cost of revenues:

 

 

 

 

 

 

 

 

Cost of products

 

 

322.6

 

 

 

256.1

 

Cost of services

 

 

49.2

 

 

 

40.0

 

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

 

 

371.8

 

 

 

296.1

 

Gross profit

 

 

322.1

 

 

 

239.6

 

Research and development

 

 

47.2

 

 

 

42.4

 

Selling, general and administrative

 

 

95.9

 

 

 

87.2

 

Acquisition and integration costs

 

 

6.2

 

 

 

2.2

 

Restructuring and other

 

 

4.9

 

 

 

0.4

 

Amortization of intangible assets

 

 

12.4

 

 

 

16.3

 

Asset impairment

 

 

 

 

 

1.2

 

Income from operations

 

 

155.5

 

 

 

89.9

 

Interest income

 

 

0.2

 

 

 

0.7

 

Interest expense

 

 

6.4

 

 

 

8.9

 

Other expense, net

 

 

1.1

 

 

 

0.4

 

Income before income taxes

 

 

148.2

 

 

 

81.3

 

Provision for income taxes

 

 

25.9

 

 

 

12.2

 

Net income

 

$

122.3

 

 

$

69.1

 

Other comprehensive income, net of tax:

 

 

 

 

 

 

 

 

Changes in value of financial instruments designated as hedges

 

$

11.0

 

 

$

(6.0

)

Foreign currency translation adjustments

 

 

(18.8

)

 

 

(11.2

)

Unrecognized pension (loss) gain

 

 

(0.4

)

 

 

0.1

 

Unrealized gain on investments

 

 

0.4

 

 

 

0.1

 

Total comprehensive income

 

$

114.5

 

 

$

52.1

 

Net income per share:

 

 

 

 

 

 

 

 

Basic

 

$

2.21

 

 

$

1.26

 

Diluted

 

$

2.20

 

 

$

1.25

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

55.3

 

 

 

54.9

 

Diluted

 

 

55.6

 

 

 

55.2

 

 

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

4


 

MKS INSTRUMENTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions, except share and per share data)

(Unaudited)

 

 

 

Common Stock

 

 

Additional

 

 

 

 

 

 

Accumulated

Other

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Paid-In

Capital

 

 

Retained Earnings

 

 

Comprehensive

Income/(Loss)

 

 

Stockholders’

Equity

 

Balance at December 31, 2020

 

 

55,196,501

 

 

$

0.1

 

 

$

873.2

 

 

$

1,487.3

 

 

$

0.3

 

 

$

2,360.9

 

Net issuance under stock-based plans

 

 

60,767

 

 

 

 

 

 

 

(5.3

)

 

 

 

 

 

 

 

 

 

 

(5.3

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

10.0

 

 

 

 

 

 

 

 

 

 

 

10.0

 

Cash dividend ($0.20 per common share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(11.1

)

 

 

 

 

 

 

(11.1

)

Comprehensive income (net of tax):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

122.3

 

 

 

 

 

 

 

122.3

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7.8

)

 

 

(7.8

)

Balance at March 31, 2021

 

 

55,257,268

 

 

$

0.1

 

 

$

877.9

 

 

$

1,598.5

 

 

$

(7.5

)

 

$

2,469.0

 

 

 

 

Common Stock

 

 

Additional

 

 

 

 

 

 

Accumulated

Other

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Paid-In

Capital

 

 

Retained Earnings

 

 

Comprehensive

Loss

 

 

Stockholders’

Equity

 

Balance at December 31, 2019

 

 

54,596,183

 

 

$

0.1

 

 

$

864.3

 

 

$

1,181.2

 

 

$

(22.3

)

 

$

2,023.3

 

Net issuance under stock-based plans

 

 

276,800

 

 

 

 

 

 

 

(20.4

)

 

 

 

 

 

 

 

 

 

 

(20.4

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

8.5

 

 

 

 

 

 

 

 

 

 

 

8.5

 

Cash dividend ($0.20 per common share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(11.0

)

 

 

 

 

 

 

(11.0

)

Comprehensive income (net of tax):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

69.1

 

 

 

 

 

 

 

69.1

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(17.0

)

 

 

(17.0

)

Balance at March 31, 2020

 

 

54,872,983

 

 

$

0.1

 

 

$

852.4

 

 

$

1,239.3

 

 

$

(39.3

)

 

$

2,052.5

 

 

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

5


 

MKS INSTRUMENTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2021

 

 

2020

 

Cash flows provided by operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

122.3

 

 

$

69.1

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

23.8

 

 

 

28.4

 

Amortization of debt issuance costs, original issue discount, and soft call premium

 

 

0.5

 

 

 

1.1

 

Stock-based compensation

 

 

10.0

 

 

 

8.5

 

Provision for excess and obsolete inventory

 

 

4.9

 

 

 

6.2

 

Provision for doubtful accounts

 

 

(0.3

)

 

 

0.2

 

Deferred income taxes

 

 

9.5

 

 

 

0.6

 

Asset impairment

 

 

 

 

 

1.2

 

Other

 

 

0.1

 

 

 

(0.1

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Trade accounts receivable

 

 

(33.1

)

 

 

(42.5

)

Inventories

 

 

(24.1

)

 

 

(20.3

)

Other current and non-current assets

 

 

6.3

 

 

 

10.1

 

Accounts payable

 

 

36.8

 

 

 

22.7

 

Accrued compensation

 

 

(41.9

)

 

 

(19.3

)

Income taxes payable

 

 

0.3

 

 

 

1.0

 

Other current and non-current liabilities

 

 

11.8

 

 

 

8.0

 

Net cash provided by operating activities

 

 

126.9

 

 

 

74.9

 

 

 

 

 

 

 

 

 

 

Cash flows (used in) provided by investing activities:

 

 

 

 

 

 

 

 

Purchases of investments

 

 

(185.7

)

 

 

(30.2

)

Maturities of investments

 

 

95.3

 

 

 

49.5

 

Sales of investments

 

 

107.7

 

 

 

28.7

 

Purchases of property, plant and equipment

 

 

(26.5

)

 

 

(10.0

)

Net cash (used in) provided by investing activities

 

 

(9.2

)

 

 

38.0

 

 

 

 

 

 

 

 

 

 

Cash flows used in financing activities:

 

 

 

 

 

 

 

 

Net proceeds from borrowings

 

 

0.5

 

 

 

12.1

 

Payments on short-term borrowings

 

 

(5.4

)

 

 

(9.9

)

Payments on long-term borrowings

 

 

(2.2

)

 

 

(52.3

)

Dividend payments

 

 

(11.1

)

 

 

(11.0

)

Net payments related to employee stock awards

 

 

(5.3

)

 

 

(20.4

)

Net cash used in financing activities

 

 

(23.5

)

 

 

(81.5

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(2.7

)

 

 

(4.0

)

Increase in cash and cash equivalents

 

 

91.5

 

 

 

27.4

 

Cash and cash equivalents at beginning of period

 

 

608.3

 

 

 

414.6

 

Cash and cash equivalents at end of period

 

$

699.8

 

 

$

442.0

 

 

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

 

 

6


MKS INSTRUMENTS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

 

1)

Basis of Presentation

The terms “MKS” and the “Company” refer to MKS Instruments, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The interim financial data as of March 31, 2021, and for the three months ended March 31, 2021 are unaudited; however, in the opinion of MKS, the interim data includes all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. The condensed consolidated balance sheet presented as of December 31, 2020 has been derived from the consolidated audited financial statements as of that date. The unaudited condensed consolidated financial statements presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by United States generally accepted accounting principles (“U.S. GAAP”). The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the MKS Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission on February 23, 2021.

The preparation of these unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, inventory valuation, warranty costs, stock-based compensation, intangible assets, goodwill, other long-lived assets and other acquisition expenses and income taxes. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

2)

Recently Issued or Adopted Accounting Pronouncements

 

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This standard provides temporary optional expedients and exceptions to accounting guidance on contract modifications and hedge accounting to ease entities’ financial reporting burdens as the market transitions from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The standard was effective upon issuance and generally can be applied through December 31, 2022. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform (Topic 848): Scope.” The amendments in this update clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. Amendments in this update to the expedients and exceptions in Topic 848 capture the incremental consequences of the scope clarification and tailor the existing guidance to derivative instruments affected by the discounting transition. The amendments in this update do not apply to contract modifications made after December 31, 2022, new hedging relationships entered into after December 31, 2022, and existing hedging relationships evaluated for effectiveness in periods after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that apply certain optional expedients in which the accounting effects are recorded through the end of the hedging relationship (including periods after December 31, 2022). The Company is in the process of evaluating the requirements of this standard and has not yet determined the impact of adoption on its consolidated financial statements.

 

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740).” This standard simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application and simplify U.S. GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This standard is effective for annual periods, and interim periods within those fiscal years, beginning after December 15, 2020. The Company adopted this ASU during the first quarter of 2021 and the adoption of this ASU did not have a material impact on its financial position, results of operations and cash flows.

 

3)

Revenue from Contracts with Customers

Contract assets as of March 31, 2021 and December 31, 2020 were $3.5 and $3.7, respectively, and are included in other current assets.  

7


MKS INSTRUMENTS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

 

A rollforward of the Company’s deferred revenue and customer advances is as follows:

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

March 31, 2021

 

 

March 31, 2020

 

Beginning balance, January 1(1)

 

$

36.7

 

 

$

24.8

 

Additions to deferred revenue and customer advances

 

 

25.5

 

 

 

17.7

 

Amount of deferred revenue and customer advances recognized in income

 

 

(22.3

)

 

 

(17.1

)

Ending balance, March 31(2)

 

$

39.9

 

 

$

25.4

 

 

 

(1)

Beginning deferred revenue and customer advances as of January 1, 2021 included $18.4 of current deferred revenue, $5.5 of long-term deferred revenue and $12.8 of current customer advances.

 

(2)

Ending deferred revenue and customer advances as of March 31, 2021 included $17.3 of current deferred revenue, $4.5 of long-term deferred revenue and $18.1 of current customer advances.

Disaggregation of Revenue

The following table summarizes revenue from contracts with customers:

 

 

 

Three Months Ended March 31, 2021

 

 

 

Vacuum &

Analysis

 

 

Light &

Motion

 

 

Equipment &

Solutions

 

 

Total

 

Net revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

379.2

 

 

$

165.0

 

 

$

60.8

 

 

$

605.0

 

Services

 

 

56.6

 

 

 

17.0

 

 

 

15.3