ENTEGRIS INC

Previous wording

The following discussion and analysis of the Company’s condensed consolidated financial condition and results of operations should be read along with the condensed consolidated financial statements and the accompanying notes thereto included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”). The information, except for historical information, contained in this discussion and analysis or set forth elsewhere in this Quarterly Report includes forward-looking statements that involve risks and uncertainties. You should review the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “Annual Report”) as well as in our other U.S. Securities and Exchange Commission (“SEC”) filings for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis or set forth elsewhere in this Quarterly Report. The Company assumes no obligation to publicly release the results of any revision or updates to these forward-looking statements to reflect future events or unanticipated occurrences.

Current wording

The following discussion and analysis of the Company’s condensed consolidated financial condition and results of operations should be read along with the condensed consolidated financial statements and the accompanying notes thereto included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”). The information, except for historical information, contained in this discussion and analysis or set forth elsewhere in this Quarterly Report includes forward-looking statements that involve risks and uncertainties. You should review the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “Annual Report”) as well as in our other U.S. Securities and Exchange Commission (“SEC”) filings for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis or set forth elsewhere in this Quarterly Report. The Company assumes no obligation to publicly release the results of any revisions or updates to these forward-looking statements to reflect future events or unanticipated occurrences.

Previous wording

Our business is organized and operated in three operating segments, which align with the key elements of the advanced semiconductor manufacturing ecosystem.

Current wording

Our business is organized and operated in three operating segments.

Previous wording

The military conflict between Israel and militant groups led by Hamas, the current conflict in the Red Sea and other tensions in the Middle East have caused uncertainty in the global markets, including, but not limited to, disruptions to shipping routes. Revenue relating to products manufactured from raw materials or components sourced from or through this region does not constitute a material portion of our business and historically we have not had significant revenue in this region. There continues to be uncertainty regarding the ultimate impact these conflicts will have on the global economy, supply chains, logistics, fuel prices, raw material pricing and our business.

Current wording

The military conflict between Israel and militant groups led by Hamas and other tensions and conflicts in the Middle East have caused uncertainty in the global markets, including, but not limited to, disruptions to shipping routes and risks of further escalations. Revenue relating to products manufactured from raw materials or components sourced from or through this region does not constitute a material portion of our business and historically we have not had significant revenue in this region. There continues to be uncertainty regarding the ultimate impact these conflicts may have on the global economy, supply chains, logistics, fuel prices, raw material pricing and our business.

Previous wording

Guaranty Agreement, dated as of November 6, 2018 (as amended and restated as of July 6, 2022 and as subsequently amended on each of March 10, 2023 and September 11, 2023, the “Existing Credit Agreement”), by and among the Company, as borrower, certain subsidiaries of the Company party thereto, as guarantors, the lenders party thereto, and Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent.

Current wording

On March 28, 2024, the Company and certain of its subsidiaries entered into Amendment No. 3 (the “Third Amendment”), with the lenders party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent, which amended the Credit and Guaranty Agreement, dated as of November 6, 2018 (as amended and restated as of July 6, 2022 and as subsequently amended on each of March 10, 2023 and September 11, 2023, the “Existing Credit Agreement”), by and among the Company, as borrower, certain subsidiaries of the Company party thereto, as guarantors, the lenders party thereto, and Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent. See Note 7 to our condensed consolidated financial statements for additional information.

Previous wording

On June 26, 2024, the Company and the U.S. Department of Commerce announced entry into a non-binding Preliminary Memorandum of Terms, which provides for up to $75 million in proposed direct funding to the Company under the CHIPS and Science Act. This funding would support the development of a facility in Colorado Springs, Colorado, which will support the Company’s AMH and MC divisions.

Current wording

On June 26, 2024, the Company and the U.S. Department of Commerce announced entry into a non-binding Preliminary Memorandum of Terms, which provides for up to $75 million in proposed direct funding to the Company under the CHIPS and Science Act of 2022. This funding would support the development of a facility in Colorado Springs, Colorado, which will support the Company’s AMH and MC divisions.

Previous wording

The critical accounting policies affected most significantly by estimates, assumptions and judgments used in the preparation of the Company’s condensed consolidated financial statements are described in Item 7 of our Annual Report for the year ended December 31, 2023, filed with the SEC on February 15, 2024. On an ongoing basis, the Company evaluates the critical accounting policies used to prepare its condensed consolidated financial statements, including, but not limited to, those related to business acquisitions. There have been no material changes in these critical accounting policies and estimates.

Current wording

The critical accounting policies affected most significantly by estimates, assumptions and judgments used in the preparation of the Company’s condensed consolidated financial statements are described in Item 7 of our Annual Report. On an ongoing basis, the Company evaluates the critical accounting policies used to prepare its condensed consolidated financial statements, including, but not limited to, those related to business acquisitions. There have been no material changes in these critical accounting policies and estimates.

Previous wording

Three and Six Months Ended June 29, 2024 Compared to Three and Six Months Ended July 1, 2023

Current wording

Three and Nine Months Ended September 28, 2024 Compared to Three and Nine Months Ended September 30, 2023

Previous wording

The following table compares operating results for the three and six months ended June 29, 2024 and July 1, 2023, both in dollars and as a percentage of net sales, for each caption.

Current wording

The following table compares operating results for the three and nine months ended September 28, 2024 and September 30, 2023, both in dollars and as a percentage of net sales, for each caption.

Previous wording

Net sales For the three months ended June 29, 2024, net sales decreased by 9.8% to $812.7 million, compared to $901.0 million for the three months ended July 1, 2023. An analysis of the factors underlying the decrease in net sales is presented in the following table:

Current wording

Net sales For the three months ended September 28, 2024, net sales decreased by 9.1% to $807.7 million, compared to $888.2 million for the three months ended September 30, 2023. An analysis of the factors underlying the decrease in net sales is presented in the following table:

Previous wording

As described in the table above, the decrease in net sales was primarily attributable to (i) the absence of sales totaling $135.2 million associated with divested businesses and (ii) a reduction of $9.8 million of sales attributable to unfavorable foreign currency translations, primarily related to the weakening of the Japanese yen relative to the U.S. dollar compared to the quarter ended July 1, 2023. These sales declines were partially offset by $56.6 million of sales due to increased semiconductor market demand.

Current wording

As described in the table above, the decrease in net sales was primarily attributable to (i) the absence of sales totaling $132.3 million associated with divested businesses and (ii) a reduction of $1.3 million of sales attributable to unfavorable foreign currency translations, primarily related to the weakening of the Japanese yen relative to the U.S. dollar compared to the quarter ended September 30, 2023. These sales declines were partially offset by $53.0 million of sales due to increased semiconductor market demand.

Previous wording

The decreases in sales to customers in North America primarily relate to the absence of sales from divested businesses. The increase in sales to customers in Taiwan primarily relates to increased demand of our MC products. The increase in sales to customers in China primarily relates to increased demand for products from each of our segments. The decrease in sales to customers in South Korea primarily relates to decreased demand of our AMH and MS products. The decrease in sales to customers in Japan primarily relates to decreased demand of our MC products. The decreases in sales to customers in Europe primarily relate to the absence of sales from divested businesses and lower sales demand for products of our AMH products. The decrease in sales to customers in Southeast Asia primarily relates to the absence of sales from divested businesses.

Current wording

The decreases in sales to customers in North America primarily relate to the absence of sales from divested businesses. The increase in sales to customers in Taiwan primarily relates to increased demand of our MC and AMH products. The increase in sales to customers in China primarily relates to increased demand of our MS and AMH products. The increase in sales to customers in South Korea primarily relates to increased demand of our MS and MC products, partially offset by decreased demand of our AMH products. The decrease in sales to customers in Japan primarily relates to decreased demand of our MC products, partially offset by increased demand of our MS products. The decreases in sales to customers in Europe primarily relate to the absence of sales from divested businesses. The decrease in sales to customers in Southeast Asia primarily relates to the absence of sales from divested businesses.

Previous wording

Net sales for the six months ended June 29, 2024 were $1,583.7 million, compared to $1,823.4 million for the six months ended July 1, 2023. An analysis of the factors underlying the decrease in net sales is presented in the following table:

Current wording

Net sales for the nine months ended September 28, 2024 were $2,391.4 million, compared to $2,711.6 million for the nine months ended September 30, 2023. An analysis of the factors underlying the decrease in net sales is presented in the following table:

Previous wording

As described in the table above, the decrease in net sales was primarily attributable to (i) the absence of sales totaling $255.1 million associated with divested businesses and (ii) a reduction of $18.1 million of sales attributable to unfavorable foreign currency translation effects, primarily due to the weakening of the Japanese yen relative to the U.S. dollar compared to the six-month period ended July 1, 2023. These sales were partially offset by $33.5 million of sales due to increased semiconductor market demand.

Current wording

As described in the table above, the decrease in net sales was primarily attributable to (i) the absence of sales totaling $387.4 million associated with divested businesses and (ii) a reduction of $19.4 million of sales attributable to unfavorable foreign currency translation effects, primarily due to the weakening of the Japanese yen relative to the U.S. dollar compared to the nine-month period ended September 30, 2023. These sales were partially offset by $86.6 million of sales due to increased semiconductor market demand.

Previous wording

On a geographic basis, sales percentage by customers’ country or region for the six months ended June 29, 2024 and July 1, 2023 and the percentage increase (decrease) in sales for the six months ended June 29, 2024 compared to the sales for the six months ended July 1, 2023 were as follows:

Current wording

On a geographic basis, sales percentage by customers’ country or region for the nine months ended September 28, 2024 and September 30, 2023 and the percentage increase (decrease) in sales for the nine months ended September 28, 2024 compared to the sales for the nine months ended September 30, 2023 were as follows:

Previous wording

The decreases in sales to customers in North America primarily relate to the absence of sales from divested businesses. The increase in sales to customers in Taiwan primarily relates to increased demand of our MC products. The increase in sales to customers in China primarily relates to increased demand for products from each of our segments. The decrease in sales to customers in South Korea primarily relates to decreased demand of our AMH and MS products. The decrease in sales to customers in Japan primarily relates to decreased demand of our MC products. The decrease in sales to customers in Europe primarily relate to the absence of sales from divested businesses and lower sales demand of our AMH products. The decrease in sales to customers in Southeast Asia primarily relates to the absence of sales from divested businesses.

Current wording

The decreases in sales to customers in North America primarily relate to the absence of sales from divested businesses. The increase in sales to customers in Taiwan primarily relates to increased demand of our MC products. The increase in sales to customers in China primarily relates to increased demand for products from each of our segments. The decrease in sales to customers in South Korea primarily relates to decreased demand of our AMH and MS products. The decrease in sales to customers in Japan primarily relates to decreased demand of our MC products. The decrease in sales to customers in Europe primarily relates to the absence of sales from divested businesses and lower sales demand of our AMH products. The decrease in sales to customers in Southeast Asia primarily relates to the absence of sales from divested businesses, partially offset by increased demand of our MS products.

Previous wording

Gross margin increased by 3.6 percentage points for the three months ended June 29, 2024, compared to the same period in the prior year. Gross margin increased primarily due to positive impact of the divested businesses and improved plant utilization.

Current wording

Gross margin increased by 4.7 percentage points for the three months ended September 28, 2024, compared to the same period in the prior year. Gross margin increased primarily due to positive impact of the divested businesses and improved plant performance.

Previous wording

Gross margin increased by 2.8 percentage points for the six months ended June 29, 2024, compared to the same period in the prior year. Gross margin increased primarily due to positive impact of the divested businesses and improved plant utilization.

Current wording

Gross margin increased by 3.5 percentage points for the nine months ended September 28, 2024, compared to the same period in the prior year. Gross margin increased primarily due to positive impact of the divested businesses and improved plant performance.

Previous wording

Selling, general and administrative expenses Selling, general and administrative (“SG&A”) expenses were $116.3 million in the three months ended June 29, 2024, compared to $145.6 million in the year-ago period. The factors underlying the change in SG&A expenses are presented in the following table:

Current wording

Selling, general and administrative expenses Selling, general and administrative (“SG&A”) expenses were $108.5 million in the three months ended September 28, 2024, compared to $116.1 million in the year-ago period. The factors underlying the change in SG&A expenses are presented in the following table:

Previous wording

SG&A expenses were $228.5 million in the six months ended June 29, 2024, compared to $315.5 million in the year-ago period. The factors underlying the change in SG&A expenses are presented in the following table:

Current wording

SG&A expenses were $337.0 million in the nine months ended September 28, 2024, compared to $431.5 million in the year-ago period. The factors underlying the change in SG&A expenses are presented in the following table:

Previous wording

Engineering, research and development expenses The Company’s engineering, research and development (“ER&D”) efforts focus on the support or extension of current product lines and the development of new products and manufacturing technologies. ER&D expenses were $81.9 million in the three months ended June 29, 2024 compared to $71.0 million in the year-ago period. The factors underlying ER&D expenses are presented in the following table:

Current wording

Engineering, research and development expenses The Company’s engineering, research and development (“ER&D”) efforts focus on the support or extension of current product lines and the development of new products and manufacturing technologies. ER&D expenses were $80.9 million in the three months ended September 28, 2024 compared to $66.8 million in the year-ago period. The factors underlying ER&D expenses are presented in the following table:

Previous wording

ER&D expenses were at $153.8 million in the six months ended June 29, 2024 compared to $142.9 million in the year-ago period. The factors underlying ER&D expenses are presented in the following table:

Current wording

ER&D expenses were at $234.7 million in the nine months ended September 28, 2024 compared to $209.7 million in the year-ago period. The factors underlying ER&D expenses are presented in the following table:

Previous wording

Amortization expenses Amortization of intangible assets was $47.5 million in the three months ended June 29, 2024, compared to $54.7 million for the three months ended July 1, 2023. The decrease primarily reflects the absence of amortization for certain identifiable intangible assets acquired in previous acquisitions that became fully amortized and the intangibles disposed of as part of the Electronic Chemicals (“EC”) disposition.

Current wording

Amortization expenses Amortization of intangible assets was $46.2 million in the three months ended September 28, 2024, compared to $51.2 million for the three months ended September 30, 2023. The decrease primarily reflects the absence of amortization for certain identifiable intangible assets acquired in previous acquisitions that became fully amortized.

Previous wording

Amortization of intangible assets was $97.7 million in the six months ended June 29, 2024, compared to $112.3 million for the six months ended July 1, 2023. The decrease primarily reflects the absence of amortization for certain identifiable intangible assets acquired in previous acquisitions that became fully amortized and the intangibles disposed of as part of the EC disposition.

Current wording

Amortization of intangible assets was $143.9 million in the nine months ended September 28, 2024, compared to $163.5 million for the nine months ended September 30, 2023. The decrease primarily reflects the absence of amortization for certain identifiable intangible assets acquired in previous acquisitions that became fully amortized and the intangible assets disposed of as part of the EC disposition.

Previous wording

Goodwill impairment The Company recorded a goodwill impairment charge of none and $88.9 million in the three and six months ended July 1, 2023, respectively. See Note 3 to our condensed consolidated financial statements for further discussion.

Current wording

Goodwill impairment The Company recorded a goodwill impairment charge of $15.9 million and $104.8 million in the three and nine months ended September 30, 2023, respectively. See Note 3 to our condensed consolidated financial statements for further discussion.

Previous wording

Gain on termination of alliance agreement On June 5, 2023, the Company announced the termination of an alliance agreement between the Company and MacDermid Enthone. The Company recognized a pre-tax gain, net of $154.8 million in the three and six months ended July 1, 2023.

Current wording

Gain on termination of alliance agreement On June 5, 2023, the Company announced the termination of an alliance agreement between the Company and MacDermid Enthone. The Company recognized a pre-tax gain, net of $154.8 million in the nine months ended September 30, 2023.

Previous wording

Interest expense Interest expense includes interest associated with debt outstanding and the amortization of debt issuance costs and original issuance discounts associated with such borrowings. Interest expense was $53.7 million in the three months ended June 29, 2024, compared to $80.9 million in the three months ended July 1, 2023. The decrease primarily reflects lower interest expense related to lower average debt balances for the period due to repayments on the Company’s outstanding debt.

Current wording

Interest expense Interest expense includes interest associated with debt outstanding and the amortization of debt issuance costs and original issuance discounts associated with such borrowings. Interest expense was $51.7 million in the three months ended September 28, 2024, compared to $77.8 million in the three months ended September 30, 2023. The decrease primarily reflects lower interest expense related to lower average debt balances for the period due to repayments on the Company’s outstanding debt.

Previous wording

Interest expense was $111.1 million in the six months ended June 29, 2024, compared to $167.1 million in the six months ended July 1, 2023. The decrease primarily reflects lower interest expense related to lower average debt balances for the period due to repayments on the Company’s outstanding debt.

Current wording

Interest expense was $162.7 million in the nine months ended September 28, 2024, compared to $244.9 million in the nine months ended September 30, 2023. The decrease primarily reflects lower interest expense related to lower average debt balances for the period due to repayments on the Company’s outstanding debt.

Previous wording

Other expense, net Other expense, net was $3.0 million in the three months ended June 29, 2024 and consisted mainly of foreign currency transaction losses of $2.7 million and a loss of extinguishment of debt of $0.8 million associated with debt prepayments on the senior secured term loan facility. Other expense, net was $7.7 million in the three months ended July 1, 2023 and consisted mainly of a loss of extinguishment of debt of $4.5 million associated with the repayments on the Company’s bridge credit facility and senior secured term loan facility and foreign currency transaction losses of $3.9 million.

Current wording

Other (income) expense, net Other income, net was $0.2 million in the three months ended September 28, 2024 and consisted mainly of foreign currency transaction gains of $2.1 million, partially offset by other expenses of $1.9 million. Other expense, net was $10.2 million in the three months ended September 30, 2023 and consisted mainly of a loss of extinguishment of debt of $4.5 million associated with the repayments on the senior secured term loan facility and foreign currency transaction losses of $4.9 million.

Previous wording

Other expense, net was $17.3 million in the six months ended June 29, 2024 and consisted mainly of a loss of extinguishment and modification of debt of $12.3 million associated with debt prepayments and the Third Amendment (see Note 7 to the Company’s condensed consolidated financial statements) and foreign currency transaction losses of $4.3 million. Other expense, net was $3.1 million in the six months ended July 1, 2023 and consisted mainly of loss of extinguishment and modification of debt of $8.4 million associated with the repayments on the Company’s bridge credit facility and senior secured term loan facility and the amendment of the Company’s Existing Credit Agreement and foreign currency transaction losses of

Current wording

Other expense, net was $17.1 million in the nine months ended September 28, 2024 and consisted mainly of a loss of extinguishment and modification of debt of $12.3 million associated with debt prepayments and the Third Amendment (see Note 7 to the Company’s condensed consolidated financial statements), foreign currency transaction losses of $2.2 million and other expenses of $2.5 million. Other expense, net was $13.3 million in the nine months ended September 30, 2023 and consisted mainly of loss of extinguishment and modification of debt of $12.9 million associated with the repayments on the Company’s bridge credit facility and senior secured term loan facility and the amendment of the Company’s Existing Credit Agreement and foreign currency transaction losses of $11.2 million, partially offset by net proceeds received of $10.9 million resulting from the termination of the definitive agreement with Infineum.

Previous wording

Income tax expense Income tax expense was $6.7 million and $10.1 million in the three and six months ended June 29, 2024, respectively, compared to income tax (benefit) expense of $(16.5) million and $5.0 million in the three and six months ended July 1, 2023, respectively. The Company’s effective income tax rate was 9.0% and 8.2% for the three and six months ended June 29, 2024, respectively, compared to (9.1)% and 4.3% for the three and six months ended July 1, 2023, respectively.

Current wording

Income tax expense Income tax expense was $8.2 million and $18.3 million in the three and nine months ended September 28, 2024, respectively, compared to income tax (benefit) expense of $(2.1) million and $2.9 million in the three and nine months ended September 30, 2023, respectively. The Company’s effective income tax rate was 9.5% and 8.7% for the three and nine months ended September 28, 2024, respectively, compared to (6.8)% and 2.0% for the three and nine months ended September 30, 2023, respectively.

Previous wording

The changes in the effective tax rate for the three and six months ended June 29, 2024 compared to the prior year primarily relate to discrete divestiture activity recorded during the quarter ended July 1, 2023 and the integration of the CMC Materials acquisition. The year-to-date income tax expense in 2024 and 2023 includes a discrete benefit of $3.1 million and discrete expense of $0.3 million, respectively, recorded in connection with share-based compensation.

Current wording

The changes in the effective tax rate for the three and nine months ended September 28, 2024 compared to the prior year primarily relate to discrete divestiture activity recorded during the three and nine months ended September 30, 2023 and the integration of the CMC Materials acquisition.

Previous wording

Net income Due to the factors noted above, the Company recorded net income of $67.7 million, or $0.45 per diluted share, in the three months ended June 29, 2024, compared to net income of $197.6 million, or $1.31 per diluted share, in the three months ended July 1, 2023.

Current wording

Net income Due to the factors noted above, the Company recorded net income of $77.6 million, or $0.51 per diluted share, in the three months ended September 28, 2024, compared to net income of $33.2 million, or $0.22 per diluted share, in the three months ended September 30, 2023.

Previous wording

In the six months ended June 29, 2024, the Company recorded netincome of$113.0 million, or $0.74 per diluted share, compared to net income of $109.5 million, or $0.73 per diluted share, in the six months ended July 1, 2023.

Current wording

In the nine months ended September 28, 2024, the Company recorded net income of $190.5 million, or $1.26 per diluted share, compared to net income of $142.7 million, or $0.95 per diluted share, in the nine months ended September 30, 2023.

Previous wording

The decrease in Adjusted EBITDA and Adjusted Operating Income for the three months ended June 29, 2024 compared to the year-ago period is generally attributable to the decreases in sales and higher operating expenses. The decrease in Adjusted EBITDA and Adjusted Operating Income for the six months ended June 29, 2024 compared to the year-ago period is generally attributable to the decreases in sales and higher ER&D expenses, partially offset by lower SG&A expenses. The increase in Non-GAAP EPS for the three months ended June 29, 2024 compared to the year-ago period is primarily attributable to lower interest expense, partially offset by decrease in sales and higher operating expenses. The increase in Non-GAAP EPS for the six months ended June 29, 2024 compared to the year-ago period is primarily attributable to lower interest expense and SG&A expenses, partially offset by a decrease in sales and higher ER&D expenses.

Current wording

The decrease in Adjusted Operating Income and Adjusted EBITDA for the three months ended September 28, 2024 compared to the year-ago period is generally attributable to higher ER&D expenses. The decrease in Adjusted Operating Income and Adjusted EBITDA for the nine months ended September 28, 2024 compared to the year-ago period is generally attributable to the decreases in sales and higher ER&D expenses, partially offset by lower SG&A expenses. The increase in Non-GAAP EPS for the three months ended September 28, 2024 compared to the year-ago period is primarily attributable to lower interest expense, partially offset by higher ER&D expenses. The increase in Non-GAAP EPS for the nine months ended September 28, 2024 compared to the year-ago period is primarily attributable to lower interest expense and SG&A expenses, partially offset by a decrease in sales and higher ER&D expenses.

Previous wording

The Company reports its financial performance based on three reporting segments. The following is a discussion of the results of operations of these three business segments. See Note 13 to the condensed consolidated financial statements for additional information on the Company’s three segments.

Current wording

The Company currently reports its financial performance based on three reporting segments. The following is a discussion of the results of operations of these three business segments. See Note 13 to the condensed consolidated financial statements for additional information on the Company’s three segments.

Previous wording

The following table presents selected net sales and segment profit data for the Company’s three reportable segments, along with unallocated general and administrative expenses, for the three and six months ended June 29, 2024 and July 1, 2023.

Current wording

The following table presents selected net sales and segment profit data for the Company’s three reportable segments, along with unallocated general and administrative expenses, for the three and nine months ended September 28, 2024 and September 30, 2023.

Previous wording

For the second quarter of 2024, MS net sales decreased to $342.3 million, down 22% compared to $440.6 million in the comparable period last year. The sales decrease was driven primarily by the absence of $135.2 million in sales associated with divested businesses included in the prior year sales, partially offset by increased sales from CMP slurries and pads products. MS reported a segment profit of $70.3 million in the second quarter of 2024, down 67% from $215.7 million segment profit in the year-ago period. The segment profit decrease was primarily associated with the absence of a $154.8 million gain resulting from the termination of the alliance agreement with MacDermid Enthone, partially offset by the absence of $14.9 million loss on sale of business and held-for-sale assets in the year-ago period, partially offset by improved plant performance and volume leverage.

Current wording

For the third quarter of 2024, MS net sales decreased to $346.6 million, down 20% compared to $435.5 million in the comparable period last year. The sales decrease was driven primarily by the absence of $132.3 million in sales associated with divested businesses included in the prior year sales, partially offset by increased sales from polishing solution products. MS reported a segment profit of $71.7 million in the third quarter of 2024, up 26% from $57.0 million segment profit in the year-ago period. The segment profit increase was primarily associated with the absence of a goodwill impairment charge of $15.9 million related to the EC reporting unit in the year-ago period (see Note 3 to our condensed consolidated financial statements for further discussion).

Previous wording

For the six months ended June 29, 2024, MS net sales decreased to $692.4 million, down 22% compared to $889.0 million in the comparable period last year. The sales decrease was driven primarily by the absence of $255.1 million in sales associated with divested businesses included in the prior year sales, partially offset by increased sales from CMP slurries and pads products. MS reported a segment profit of $137.4 million for the six months ended June 29, 2024, a decrease of 26.2% from $186.2 million segment profit in the year-ago period. The segment profit decrease was primarily associated with the absence of a $154.8 million gain resulting from the termination of the alliance agreement with MacDermid Enthone in the year-ago period and a $13.0 million long-lived asset impairment charge in the first quarter of 2024, partially offset with the absence of a goodwill impairment charge of $88.9 million related to the EC reporting unit in the year-ago period, the absence of $28.6 million loss on sale of business and held-for-sale in the year-ago period, and $4.3 million gain associated with sale of the PIM business, partially offset by improved plant performance and volume leverage.

Current wording

For the nine months ended September 28, 2024, MS net sales decreased to $1,039.0 million, down 22% compared to $1,324.5 million in the comparable period last year. The sales decrease was driven primarily by the absence of $387.4 million in sales associated with divested businesses included in the prior year sales, partially offset by increased sales from polishing solution products. MS reported a segment profit of $209.1 million for the nine months ended September 28, 2024, a decrease of 14.0% from $243.2 million segment profit in the year-ago period. The segment profit decrease was primarily associated with (1) the absence of a $154.8 million gain resulting from the termination of the alliance agreement with MacDermid Enthone in the year-ago period and (2) a $13.0 million long-lived asset impairment charge in the first quarter of 2024 related to the long-lived assets of a small, industrial specialty chemicals business, partially offset with (3) the absence of a goodwill impairment charge of $104.8 million related to the EC reporting unit in the year-ago period, (4) the absence of $28.6 million loss on sale of business and held-for-sale in the year-ago period, (5) the absence of $7.6 million related to restructuring charges, (6) $4.3 million gain associated with sale of the PIM business, and (7) improved plant performance and volume leverage.

Previous wording

For the second quarter of 2024, MC net sales increased to $293.8 million, up 4% compared to $283.6 million in the comparable period last year. The sales increase was mainly due to increased sales primarily from gas purification products. MC reported a segment profit of $93.7 million in the second quarter of 2024, down 7% from $100.7 million in the year-ago period. The segment profit decrease was primarily due to higher ER&D costs and increased costs associated with the ramp up of our new facility in Taiwan.

Current wording

For the third quarter of 2024, MC net sales increased to $287.0 million compared to $286.2 million in the comparable period last year. The sales increase was mainly due to increased sales primarily from gas purification products, partially offset by lower sales of our liquid filtration products. MC reported a segment profit of $96.7 million in the third quarter of 2024, down 4% from $101.1 million in the year-ago period. The segment profit decrease was primarily due to higher ER&D costs and increased costs associated with the ramp up of our new facility in Taiwan.

Previous wording

For the six months ended June 29, 2024, MC net sales increased to $561.6 million, up 2% compared to $552.9 million in the comparable period last year. The sales increase was mainly due to increased sales primarily from gas purification products. MC reported a segment profit of $180.3 million in the six months ended June 29, 2024, down 8% from $196.7 million in the year-ago period. The segment profit decrease was primarily due to higher ER&D costs and increased costs associated with the ramp up of our new facility in Taiwan.

Current wording

For the nine months ended September 28, 2024, MC net sales increased to $848.6 million, up 1% compared to $839.1 million in the comparable period last year. The sales increase was mainly due to increased sales primarily from gas purification products, partially offset by lower sales of our liquid filtration and gas filtration products. MC reported a segment profit of $277.0 million in the nine months ended September 28, 2024, down 7% from $297.8 million in the year-ago period. The segment profit decrease was primarily due to higher ER&D costs and increased costs associated with the ramp up of our new facility in Taiwan.