EXHIBIT 99.1

•

2018 was another record year in revenue and GAAP and Non-GAAP EPS

•

Total revenue increased 8% in 2018, compared to 2017, to a record $2.1 billion

•

Revenue from advanced markets increased 14% to $931 million in 2018, compared to 2017

•

Semiconductor revenue increased 4% to $1.14 billion in 2018, compared to 2017

Q4

Full Year

2018

2017

2018

2017

Net revenues ($ millions)

$

461

$

512

$

2,075

$

1,916

Operating margin

20.4

%

23.4

%

23.8

%

21.2

%

Net income ($ millions)

$

72

$

78

$

393

$

339

Diluted EPS

$

1.32

$

1.41

$

7.14

$

6.16

Q4

Full Year

2018

2017

2018

2017

Net revenues ($ millions)

$

461

$

512

$

2,075

$

1,916

Operating margin

23.7

%

25.9

%

26.3

%

24.6

%

Net earnings ($ millions)

$

84

$

95

$

430

$

328

Diluted EPS

$

1.54

$

1.71

$

7.83

$

5.96

Three Months Ended

December 31,

December 31,

September 30,

2018

2017

2018

(Note 14)

Net revenues:

Products

$

402,271

$

458,155

$

426,255

Services

58,270

53,645

60,897

Total net revenues

460,541

511,800

487,152

Cost of revenues:

Products

221,766

243,384

219,311

Services

28,891

30,090

35,981

Total cost of revenues

250,657

273,474

255,292

Gross profit

209,884

238,326

231,860

Research and development

32,461

33,045

31,898

Selling, general and administrative

68,166

72,510

70,822

Acquisition and integration costs

4,245

634

36

Restructuring

193

1,324

1,364

Amortization of intangible assets

10,735

10,797

10,695

Income from operations

94,084

120,016

117,045

Interest income

1,698

1,125

1,516

Interest expense

3,871

7,989

3,719

Other expense, net

763

2,155

326

Income from operations before income taxes

91,148

110,997

114,516

Provision for income taxes

19,512

33,359

21,239

Net income

$

71,636

$

77,638

$

93,277

Net income per share:

Basic

$

1.33

$

1.43

$

1.71

Diluted

$

1.32

$

1.41

$

1.70

Cash dividends per common share

$

0.20

$

0.18

$

0.20

Weighted average shares outstanding:

Basic

54,005

54,318

54,476

Diluted

54,454

55,236

54,954

The following supplemental Non-GAAP earnings information is presented to aid in understanding MKS' operating results:

Net income

$

71,636

$

77,638

$

93,277

Adjustments:

Acquisition and integration costs (Note 1)

4,245

634

36

Amortization of debt issuance costs (Note 2)

711

3,983

682

Restructuring (Note 3)

193

1,324

1,364

Amortization of intangible assets

10,735

10,797

10,695

Windfall tax benefit on stock-based compensation (Note 4)

(202

)

(658

)

(287

)

Deferred tax adjustment (Note 5)

—

(24,546

)

—

Transition tax on accumulated foreign earnings (Note 6)

—

28,658

863

Tax adjustment related to the sale of a business (Note 7)

—

(12,131

)

—

Accrued tax on MKS subsidiary distributions (Note 8)

(2,277

)

14,000

(2,756

)

Tax cost on the inter-company sale of an asset (Note 9)

541

—

—

Pro-forma tax adjustments

(1,549

)

(5,083

)

(659

)

Non-GAAP net earnings (Note 10)

$

84,033

$

94,616

$

103,215

Non-GAAP net earnings per share (Note 10)

$

1.54

$

1.71

$

1.88

Weighted average shares outstanding

54,454

55,236

54,954

Income from operations

$

94,084

$

120,016

$

117,045

Adjustments:

Acquisition and integration costs (Note 1)

4,245

634

36

Restructuring (Note 3)

193

1,324

1,364

Amortization of intangible assets

10,735

10,797

10,695

Non-GAAP income from operations (Note 11)

$

109,257

$

132,771

$

129,140

Non-GAAP operating margin percentage (Note 11)

23.7

%

25.9

%

26.5

%

Interest expense

$

3,871

$

7,989

$

3,719

Amortization of debt issuance costs (Note 2)

711

3,983

682

Non-GAAP interest expense

$

3,160

$

4,006

$

3,037

Net income

$

71,636

$

77,638

$

93,277

Interest expense, net

2,173

6,864

2,203

Provision for income taxes

19,512

33,359

21,239

Depreciation

9,212

9,208

8,834

Amortization

10,735

10,797

10,695

EBITDA (Note 12)

$

113,268

$

137,866

$

136,248

Stock-based compensation

5,257

4,544

5,213

Acquisition and integration costs (Note 1)

4,245

634

36

Restructuring (Note 3)

193

1,324

1,364

Other adjustments

—

839

—

Adjusted EBITDA (Note 13)

$

122,963

$

145,207

$

142,861

Note 1: During the fourth quarter of 2018 we incurred acquisition costs related to the announced acquisition of Electro Scientific Industries, Inc. which is expected to close on February 1, 2019. We recorded acquisition and integration costs related to the Newport Corporation acquisition, which closed during the second quarter of 2016, during the three months ended September 30, 2018 and December 31, 2017.

Note 2: We recorded additional interest expense related to the amortization of debt issuance costs affiliated with our Term Loan Credit Agreement and ABL Facility.

Note 3: We recorded restructuring charges during the three months ended December 31, 2018 and September 30, 2018, which consisted primarily of severance costs related to an organization-wide reduction in workforce. We recorded restructuring costs during the three months ended December 31, 2017, primarily related to the consolidation of two manufacturing plants.

Note 4: We recorded windfall tax benefits on the vesting of stock-based compensation.

Note 5: We recorded a deferred tax adjustment, which also includes the reversal of a tax accrual on a French dividend, related to U.S. tax reform legislation during the three months ended December 31, 2017.

Note 6: We recorded and adjusted the transition tax on accumulated foreign earnings related to the 2017 Tax Cut and Jobs Act.

Note 7: We recorded a tax adjustment resulting from the 2017 Tax Cut and Jobs Act, related to the sale of our Data Analytics Solutions business during the three months ended December 31, 2017.

Note 8: We recorded and adjusted tax accruals related to distributions of MKS subsidiaries.

Note 9: We recorded taxes on the inter-company sale of an asset during the three months ended December 31, 2018.

Note 10: The Non-GAAP net earnings and Non-GAAP net earnings per share amounts exclude acquisition and integration costs, amortization of debt issuance costs, restructuring costs, amortization of intangible assets, a windfall tax benefit related to stock compensation expense, accrued taxes on subsidiary distributions, a deferred tax adjustment, transition tax on accumulated foreign earnings, a tax adjustment related to the sale of a business, tax cost on the inter-company sale of an asset and the related tax effect of these adjustments to reflect the expected full year effective tax rate in the related period.

Note 11: The Non-GAAP income from operations and Non-GAAP operating margin percentages exclude acquisition and integration costs, restructuring costs and amortization of intangible assets.

Note 12: EBITDA excludes net interest, income taxes, depreciation and amortization of intangible assets.

Note 13: Adjusted EBITDA excludes stock-based compensation, acquisition and integration costs, restructuring costs and other adjustments as defined in our Term Loan Credit Agreement.

Note 14: We historically recorded the revenue and related cost of revenue for our spare parts within Products in our Statement of Operations for the Vacuum and Analysis Division. We have now determined that these items are better reflected within Services in our Statement of Operations and have revised the presentation of our previously issued financial statements as shown below:

Three Months Ended December 31, 2017

As previously

reported

Adjustment

As revised

Net revenues:

Products

$

463,851

$

(5,696

)

$

458,155

Services

47,949

5,696

53,645

Total net revenues

511,800

—

511,800

Cost of revenues:

Cost of products

242,008

1,376

243,384

Cost of services

31,466

(1,376

)

30,090

Total cost of revenues

$

273,474

$

—

$

273,474

Twelve Months Ended

December 31,

2018

2017 (Note 21)

Net revenues:

Products

$

1,835,202

$

1,701,301

Services

239,906

214,676

Total net revenues

2,075,108

1,915,977

Cost of revenues:

Products

969,288

906,369

Services

126,344

118,157

Total cost of revenues

1,095,632

1,024,526

Gross profit

979,476

891,451

Research and development

135,720

132,555

Selling, general and administrative

298,118

290,056

Acquisition and integration costs

3,113

5,332

Restructuring

3,567

3,920

Environmental costs

1,000

—

Asset impairment

—

6,719

Fees and expenses related to repricing of term loan

378

492

Amortization of intangible assets

43,521

45,743

Income from operations

494,059

406,634

Interest income

5,775

3,021

Interest expense

16,942

30,990

Gain on sale of business

—

74,856

Other expense, net

1,942

5,896

Income from operations before income taxes

480,950

447,625

Provision for income taxes

88,054

108,493

Net income

$

392,896

$

339,132

Net income per share:

Basic

$

7.22

$

6.26

Diluted

$

7.14

$

6.16

Cash dividends per common share

$

0.78

$

0.71

Weighted average shares outstanding:

Basic

54,406

54,137

Diluted

54,992

55,074

The following supplemental Non-GAAP earnings information is presented to aid in understanding MKS' operating results:

Net income

$

392,896

$

339,132

Adjustments:

Acquisition and integration costs (Note 1)

3,113

5,332

Expenses related to sale of a business (Note 2)

—

859

Excess and obsolete inventory charge (Note 3)

—

1,160

Fees and expenses related to repricing of term loan (Note 4)

378

492

Amortization of debt issuance costs (Note 5)

3,884

9,405

Restructuring (Note 6)

3,567

3,920

Environmental costs (Note 7)

1,000

—

Asset impairment (Note 8)

—

6,719

Gain on sale of business (Note 9)

—

(74,856

)

Amortization of intangible assets

43,521

45,743

Windfall tax benefit on stock-based compensation (Note 10)

(8,277

)

(11,071

)

Accrued tax on MKS subsidiary distributions (Note 11)

(5,033

)

14,000

Tax adjustment related to the sale of a business (Note 12)

—

2,876

Deferred tax adjustment (Note 13)

878

(24,546

)

Transition tax on accumulated foreign earnings (Note 14)

(1,464

)

28,658

Tax cost on the inter-company sale of an asset (Note 15)

541

—

Pro-forma tax adjustments

(4,655

)

(19,639

)

Non-GAAP net earnings (Note 16)

$

430,349

$

328,184

Non-GAAP net earnings per share (Note 16)

$

7.83

$

5.96

Weighted average shares outstanding

54,992

55,074

Income from operations

$

494,059

$

406,634

Adjustments:

Acquisition and integration costs (Note 1)

3,113

5,332

Expenses related to sale of a business (Note 2)

—

859

Excess and obsolete inventory charge (Note 3)

—

1,160

Fees and expenses related to repricing of term loan (Note 4)

378

492

Restructuring (Note 6)

3,567

3,920

Environmental costs (Note 7)

1,000

—

Asset impairment (Note 8)

—

6,719

Amortization of intangible assets

43,521

45,743

Non-GAAP income from operations (Note 17)

$

545,638

$

470,859

Non-GAAP operating margin percentage (Note 17)

26.3

%

24.6

%

Gross profit

$

979,476

$

891,451

Excess and obsolete inventory charge (Note 3)

—

1,160

Non-GAAP gross profit (Note 18)

$

979,476

$

892,611

Non-GAAP gross profit percentage (Note 18)

47.2

%

46.6

%

Interest expense

$

16,942

$

30,990

Amortization of debt issuance costs (Note 5)

3,884

9,405

Non-GAAP interest expense

$

13,058

$

21,585

Net Income

$

392,896

$

339,132

Interest expense, net

11,167

27,969

Provision for income taxes

88,054

108,493

Depreciation

36,332

36,813

Amortization

43,521

45,743

EBITDA (Note 19)

$

571,970

$

558,150

Stock-based compensation

27,262

24,378

Acquisition and integration costs (Note 1)

3,113

5,332

Expenses related to sale of a business (Note 2)

—

859

Excess and obsolete inventory charge (Note 3)

—

1,160

Fees and expenses related to repricing of term loan (Note 4)

378

492

Restructuring (Note 6)

3,567

3,920

Environmental costs (Note 7)

1,000

—

Asset impairment (Note 8)

—

6,719

Gain on sale of business (Note 9)

—

(74,856

)

Other adjustments

772

3,244

Adjusted EBITDA (Note 20)

$

608,062

$

529,398

Note 1:  Acquisition and integration costs for the twelve months ended December 31, 2018 include acquisition costs of $4.2 million related to the announced acquisition of Electro Scientific Industries, Inc. which is expected to close on February 1, 2019. In addition, we reversed a severance accrual of $1.1 million related to our 2016 acquisition of Newport Corporation. For the twelve months ended December 31, 2017, we recorded integration costs related to our acquisition of Newport Corporation.

Note 2: We recorded legal and consulting expenses during the twelve months ended December 31, 2017 related to the sale of a business, which was completed in April 2017.

Note 3: We recorded excess and obsolete inventory charges in cost of sales during the twelve months ended December 31, 2017, related to the discontinuation of a product line in connection with the consolidation of two manufacturing sites.

Note 4: We recorded fees and expenses during the twelve months ended December 31, 2018 and 2017 related to repricings of our Term Loan Credit Agreement.

Note 5: We recorded additional interest expense related to the amortization of debt issuance costs affiliated with our Term Loan Credit Agreement and ABL Facility.

Note 6: We recorded restructuring costs during the twelve months ended December 31, 2018, which were primarily comprised of severance costs related to a worldwide reduction in workforce in the third quarter, transferring a portion of our U.S. shared accounting functions to a third party as well as the consolidation of certain shared accounting functions in Asia. We recorded restructuring costs during the twelve months ended December 31, 2017, primarily related to the restructuring of one of our international facilities and the consolidation of sales offices.

Note 7: We recorded environmental costs during the twelve months ended December 31, 2018, related to an Environmental Protection Agency-designated Superfund site, which was acquired as part of our acquisition of Newport Corporation.

Note 8: We recorded an asset impairment charge, primarily related to the write-off of goodwill and intangible assets, during the twelve months ended December 31, 2017, in connection with the consolidation of two manufacturing plants.

Note 9: We recorded a gain during the twelve months ended December 31, 2017, related to the sale of our Data Analytics Solutions business.

Note 10: We recorded windfall tax benefits on the vesting of stock-based compensation.

Note 11: We recorded and adjusted tax accruals related to distributions of MKS subsidiaries.

Note 12: We recorded taxes related to the sale of our Data Analytics Solutions business during the twelve months ended December 31, 2017.

Note 13: As a result of tax reform, we recorded an adjustment to deferred taxes and reversed taxes previously accrued on a dividend from a foreign subsidiary in December 2017. The deferred tax effect of tax reform was further adjusted in Q1 2018 after additional analysis.

Note 14: During the twelve months ended December 31, 2017, we recorded a transition tax on accumulated foreign earnings related to the 2017 Tax Cut and Jobs Act. During the twelve months ended December 31, 2018, we adjusted the transition tax on accumulated foreign earnings that was recorded in 2017.

Note 15: We recorded taxes on the inter-company sale of an asset during the twelve months ended December 31, 2018.

Note 16: The Non-GAAP net earnings and Non-GAAP net earnings per share amounts exclude acquisition and integration costs, expenses related to the sale of a business, an excess and obsolete inventory charge, fees and expenses related to the repricing of the Term Loan Credit Agreement, amortization of debt issuance costs, restructuring costs, environmental costs, an asset impairment charge, a gain on the sale of a business, amortization of intangible assets, accrued taxes on subsidiary distributions, a windfall tax benefit related to stock compensation expense, taxes related to the sale of a business, a deferred tax adjustment, transition tax on accumulated foreign earnings, tax costs on the inter-company sale of an asset and the related tax effect of these adjustments to reflect the expected full year effective tax rate in the related period.

Note 17: The Non-GAAP income from operations and Non-GAAP operating margin percentages exclude acquisition and integration costs, expenses related to the sale of a business, an excess and obsolete inventory charge, fees and expenses related to the repricing of the Term Loan Credit Agreement, restructuring costs, environmental costs, an asset impairment charge and amortization of intangible assets.

Note 18: The Non-GAAP gross profit amounts and Non-GAAP gross profit percentages exclude an excess and obsolete inventory charge related to the discontinuation of a product line.

Note 19: EBITDA excludes net interest, income taxes, depreciation and amortization of intangible assets.

Note 20: Adjusted EBITDA excludes stock-based compensation, acquisition and integration costs, expenses related to the sale of a business, an excess and obsolete inventory charge, fees and expenses related to the repricing of the Term Loan Credit Agreement, restructuring costs, environmental costs, an asset impairment charge, a gain on the sale of a business and other adjustments as defined in our Term Loan Credit Agreement.

Note 21: We historically recorded the revenue and related cost of revenue for our spare parts within Products in our Statement of Operations for the Vacuum and Analysis Division. We have now determined that these items are better reflected within Services in our Statement of Operations and have revised the presentation of our previously issued financial statements as shown below:

Twelve Months Ended December 31, 2017

As previously reported

Adjustment

As revised

Net revenues:

Products

$

1,723,433

$

(22,132

)

$

1,701,301

Services

192,544

22,132

214,676

Total net revenues

1,915,977

—

1,915,977

Cost of revenues:

Cost of products

901,546

4,823

906,369

Cost of services

122,980

(4,823

)

118,157

Total cost of revenues

$

1,024,526

$

—

$

1,024,526

December 31,

December 31,

2018

2017

ASSETS

Cash and cash equivalents, including restricted cash

$

644,345

$

333,887

Short-term investments

73,826

209,434

Trade accounts receivable, net

295,454

300,308

Inventories

384,689

339,081

Other current assets

65,790

53,543

Total current assets

1,464,104

1,236,253

Property, plant and equipment, net

194,367

171,782

Goodwill

586,996

591,047

Intangible assets, net

319,807

366,398

Long-term investments

10,290

10,655

Other assets

38,682

37,883

Total assets

$

2,614,246

$

2,414,018

LIABILITIES AND STOCKHOLDERS' EQUITY

Short-term debt

$

3,986

$

2,972

Accounts payable

83,825

82,518

Accrued compensation

82,350

96,147

Income taxes payable

16,358

21,398

Deferred revenue

8,134

12,842

Other current liabilities

68,632

73,945

Total current liabilities

263,285

289,822

Long-term debt, net

343,842

389,993

Non-current deferred taxes

48,223

61,571

Non-current accrued compensation

55,598

51,700

Other liabilities

30,111

32,025

Total liabilities

741,059

825,111

Stockholders' equity:

Common stock

113

113

Additional paid-in capital

793,932

789,644

Retained earnings

1,084,797

795,698

Accumulated other comprehensive income

(5,655

)

3,452

Total stockholders' equity

1,873,187

1,588,907

Total liabilities and stockholders' equity

$

2,614,246

$

2,414,018

Three Months Ended

December 31,

December 31,

September 30,

2018

2017

2018

Cash flows from operating activities:

Net income

$

71,636

$

77,638

$

93,277

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

Depreciation and amortization

19,947

20,006

19,529

Amortization of debt issuance costs and original issue discount

934

4,314

897

Stock-based compensation

5,257

4,544

5,213

Provision for excess and obsolete inventory

6,749

4,864

5,283

Provision for doubtful accounts

576

175

263

Deferred income taxes

(13,249

)

(11,472

)

(4,695

)

Other

2,118

(8

)

71

Changes in operating assets and liabilities

41,490

(19,275

)

(23,882

)

Net cash provided by operating activities

135,458

80,786

95,956

Cash flows from investing activities:

Purchases of investments

(39,824

)

(30,545

)

(64,958

)

Sales of investments

139,674

9,993

4,505

Maturities of investments

46,410

40,563

44,605

Purchases of property, plant and equipment

(26,056

)

(13,430

)

(15,067

)

Other

—

66

—

Net cash provided by (used in) investing activities

120,204

6,647

(30,915

)

Cash flows from financing activities:

Payments of short-term borrowings

(9,299

)

(16,434

)

(29,803

)

Proceeds from short and long-term borrowings

7,045

15,393

23,635

Payments of long-term borrowings

—

(50,000

)

(2

)

Repurchase of common stock

—

—

(75,000

)

Dividend payments

(10,797

)

(9,775

)

(10,858

)

Net proceeds (payments) related to employee stock awards

2,537

2,503

(589

)

Net cash used in financing activities

(10,514

)

(58,313

)

(92,617

)

Effect of exchange rate changes on cash and cash equivalents

(653

)

(1,327

)

(5

)

Increase (decrease) in cash and cash equivalents and restricted cash

244,495

27,793

(27,581

)

Cash and cash equivalents, including restricted cash at beginning of period

399,850

306,094

427,431

Cash and cash equivalents, including restricted cash at end of period

$

644,345

$

333,887

$

399,850

Three Months Ended December 31, 2018

Three Months Ended September 30, 2018

Income Before

Provision (benefit)

Effective

Income Before

Provision (benefit)

Effective

Income Taxes

for Income Taxes

Tax Rate

Income Taxes

for Income Taxes

Tax Rate

GAAP

$

91,148

$

19,512

21.4

%

$

114,516

$

21,239

18.5

%

Adjustments:

Acquisition and integration costs (Note 1)

4,245