Nov 4, 2008

Entegris Reports Third Quarter Loss Due to Non-Cash Charges

Company Reports Non-GAAP Earnings of $0.06 From Continuing Operations

CHASKA, Minn., Nov 4, 2008 (GlobeNewswire via COMTEX News Network) -- Entegris, Inc. (Nasdaq:ENTG) today reported its financial results for the fiscal third quarter ended September 27, 2008:

* Sales of $145.8 million
* GAAP loss per share of $3.68 reflecting non-cash charges
* Non-GAAP EPS from continuing operations of $0.06
* Non-GAAP gross margin of 42 percent
* Cash from operations of $11.7 million

Entegris' third-quarter sales were $145.8 million, versus $151.8 million for the same period a year ago and $147.9 million for the second quarter of fiscal 2008. Poco Graphite, which was acquired on August 11, 2008, contributed approximately $10 million to sales in the third quarter.

The Company reported a third-quarter net loss of $411.4 million, or $3.68 per diluted share, which compared to net income of $8.4 million, or $0.07 per diluted share, for the same quarter a year ago. On a non-GAAP basis, third-quarter net income from continuing operations was $6.2 million, or $0.06 per diluted share.

The third-quarter results reflected the following non-cash charges:

* A write-down of $395.3 million, or $379.8 million net of tax, related to impairment of goodwill triggered by the decline in the Company's market capitalization. The write-down was made in accordance with the requirements of FASB Statements No. 142 "Goodwill and Other Intangible Assets." The write-down represents management's best estimate based on the facts and circumstances as of September 27, 2008 and may be revised in the fourth quarter. * Purchase accounting adjustments of $5.7 million to cost of sales, as a result of adjusting acquired Poco Graphite inventory to fair market value.

* A valuation allowance of $30.7 million for the Company's deferred tax assets.

Sales for the nine months ended September 27, 2008 were $442.0 million. The nine-month net loss was $403.5 million, or $3.57 per diluted share. Nine-month net income from continuing operations on a non-GAAP basis was $14.9 million, or $0.13 per diluted share.

Gideon Argov, president and chief executive officer, said: "The global economic turmoil has exacerbated the cyclical downturn in the semiconductor industry. Despite market conditions softening, we generated $11.7 million of cash from operations and achieved earnings of $0.06 per share from continuing operations on a non-GAAP basis due to stable margins and control of operating expenses. We completed the acquisition of Poco Graphite in the quarter which adds to our consumable product revenues, provides synergies with our existing customers, and represents further expansion into markets outside of the semiconductor industry."

As part of its long-term strategy to align manufacturing operations, the Company announced it will close the larger of its two manufacturing facilities in Chaska, Minnesota and will transfer production to its other existing facilities. This closure, which will impact approximately 200 jobs or approximately 7 percent of the Company's worldwide headcount, is expected to be completed in 2009 and to result in annual cost and tax savings of approximately $6 to $8 million beginning in 2010. The Company expects to incur charges of approximately $15 million related to the facility closure over the next four quarters.

In addition to the facility closure, the Company is taking steps to reduce its operating expenses which include the streamlining of its management structure. These actions are expected to yield in excess of $12 million in annual cost savings. Thus far, these steps have resulted in a restructuring charge of $3.3 million in the third quarter.

Argov continued: "We are using the slowdown in the economy and our industry to optimize our manufacturing operations and to streamline the Company. These measures will lower our break-even point further so that we can remain profitable on an operating basis during this turbulent period, and will position us for maximum operating leverage and improved profitability when our markets recover."

Third-Quarter Results Conference Call Details

Entegris will hold a conference call to discuss its results for the third quarter on Tuesday, November 4, 2008, at 10:00 a.m. Eastern Time. Participants should dial 1-866-409-1560 (for domestic callers) or 1-913-312-1300 (for callers outside the U.S.). A replay of the call can be accessed at 1-719-457-0820 using passcode 3654556. A webcast of the call can also be accessed from the investor relations section of Entegris' website at www.entegris.com.

Non-GAAP Information

In addition to reporting results that are determined in accordance with generally accepted accounting principles in the U.S. (GAAP), the Company also reports non-GAAP results of operations that exclude certain expenses and charges. These non-GAAP results are provided as a complement to results provided in accordance with GAAP in order to provide investors with relevant and useful information about the Company's ongoing operations. As such, non-GAAP information primarily excludes expenses and charges resulting from goodwill impairment under FASB Statement No. 142, a valuation allowance for deferred tax assets under FASB Statement No. 109, and purchase accounting adjustments related to inventory associated with the Company's August 2008 acquisition of Poco Graphite. A reconciliation of GAAP to non-GAAP financial information discussed in this release is contained in the attached exhibits and on the Company's website at www.entegris.com.

About Entegris

Entegris is a leading provider of a wide range of products for purifying, protecting and transporting critical materials used in processing and manufacturing in the semiconductor and other high-tech industries. Entegris is ISO 9001 certified and has manufacturing, customer service and/or research facilities in the United States, China, France, Germany, India, Israel, Japan, Malaysia, Singapore, South Korea and Taiwan. Additional information can be found at www.entegris.com.

Forward-Looking Statements

Certain information contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current management expectations only as of the date of this press release, and involve substantial risks and uncertainties that could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. Statements that include such words as "anticipate," "believe," "estimate," "expect," "forecast," "may," "will," "should" or the negative thereof and similar expressions as they relate to Entegris or our management are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. These risks include, but are not limited to, fluctuations in the market price of Entegris' stock, Entegris' future operating results, other acquisition and investment opportunities available to Entegris, general business and market conditions and other factors. Additional information concerning these and other risk factors may be found in previous financial press releases issued by Entegris and Entegris' periodic public filings with the Securities and Exchange Commission, including discussions appearing under the headings "Risks Relating to our Business and Industry," "Manufacturing Risks," "International Risks," and "Risks Related to Securities Markets and Ownership of Our Securities" in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2007, as well as other matters and important factors disclosed previously and from time to time in the filings of Entegris with the U.S. Securities and Exchange Commission. Except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission, we undertake no obligation to update publicly any forward-looking statements contained herein.


                    Entegris, Inc. and Subsidiaries
            Condensed Consolidated Statements of Operations
                 (In thousands, except per share data)
                              (Unaudited)

                          Three months ended        Nine months ended
                     ----------------------------  ------------------
                     Sept. 27, June 28,  Sept. 29, Sept. 27, Sept. 29,
                       2008      2008      2007       2008     2007
                     ----------------------------  ------------------
 Net sales           $145,789  $147,947  $151,811  $441,963  $464,890
 Cost of sales         90,391    88,060    86,301   262,690   265,378
                     ----------------------------  ------------------
   Gross profit        55,398    59,887    65,510   179,273   199,512
 Selling, general
  and administrative
  expenses             35,373    37,105    39,267   115,800   120,542
 Engineering,
  research and
  development
  expenses             10,284    10,362     9,409    31,147    29,622
 Amortization of
  intangible assets     4,858     4,552     4,716    14,497    13,702
 Impairment of
  goodwill            395,261        --        --   395,261        --
 Restructuring
  charges               3,332        --        --     3,332        --
                     ----------------------------  ------------------
   Operating (loss)
    income           (393,710)    7,868    12,118  (380,764)   35,646
 Interest expense
  (income), net           614        81      (140)      682    (5,516)
 Other expense
  (income), net           947       249        53     1,823    (5,997)
                     ----------------------------  ------------------
   (Loss) income
    before income
    taxes            (395,271)    7,538    12,205  (383,269)   47,159
 Income tax expense    15,837     2,021     3,156    19,252    11,970
 Equity in net loss
  (earnings) of
  affiliates              195        (8)       96        49        (8)
                     ----------------------------  ------------------
   (Loss) income
    from continuing
    operations       (411,303)    5,525     8,953  (402,570)   35,197
 Loss from
  discontinued
  operations, net
  of taxes                (90)     (592)     (536)   (1,025)   (1,620)
                     ----------------------------  ------------------
   Net (loss)
    income          ($411,393) $  4,933  $  8,417 ($403,595) $ 33,577
                     ============================  ==================

 Basic (loss) income
  per common share:
   Continuing
    operations         ($3.68) $   0.05  $   0.08    ($3.56) $   0.28
   Discontinued
    operations         ($0.00)   ($0.01)   ($0.00)   ($0.01)   ($0.01)
   Net (loss) income
    per common share   ($3.68) $   0.04  $   0.07    ($3.57) $   0.27
 Diluted (loss)
  income per common
  share:
   Continuing
    operations         ($3.68) $   0.05  $   0.08    ($3.56) $   0.28
   Discontinued
    operations         ($0.00)   ($0.01)   ($0.00)   ($0.01)   ($0.01)
   Net (loss) income
    per common share   ($3.68) $   0.04  $   0.07    ($3.57) $   0.26

 Weighted average
  shares outstanding:
   Basic              111,796   112,870   114,333   112,942   125,251
   Diluted            111,796   113,581   116,415   112,942   127,980


                    Entegris, Inc. and Subsidiaries
      GAAP to Non-GAAP Reconciliation of Statement of Operations
                 (In thousands, except per share data)
                              (Unaudited)

                 Three months ended            Nine months ended
                 September 27, 2008            September 27, 2008
            ----------------------------  ----------------------------
              U.S.     Adjust-              U.S.     Adjust-
              GAAP     ments    Non-GAAP    GAAP     ments    Non-GAAP
            ----------------------------  ----------------------------
 Net sales  $145,789  $     --  $145,789  $441,963  $     --  $441,963
 Cost of
  sales(a)    90,391    (5,718)   84,673   262,690    (5,718)  256,972
            ----------------------------  ----------------------------
   Gross
    profit    55,398     5,718    61,116    179,273    5,718   184,991
 Selling,
  general
  and admin-
  istrative
  expenses    35,373        --    35,373   115,800        --   115,800
 Engineering,
  research
  and
  development
  expenses    10,284        --    10,284    31,147        --    31,147
 Amortiza-
  tion of
  intangible
  assets       4,858        --     4,858    14,497        --    14,497
 Impairment
  of good-
  will (b)   395,261  (395,261)       --   395,261  (395,261)       --
 Restructur-
  ing charges  3,332        --     3,332     3,332        --     3,332
            ----------------------------  ----------------------------
   Operating
    (loss)
    income  (393,710)  400,979     7,269  (380,764)  400,979    20,215
 Interest
  expense,
  net            614        --       614       682        --       682
 Other
  expense,
  net            947        --       947     1,823        --     1,823
            ----------------------------  ----------------------------
   (Loss)
    income
    before
    income
    taxes   (395,271)  400,979     5,708  (383,269)  400,979    17,710
 Income tax
  (benefit)
  expense
  (c)         15,837   (16,498)     (661)   19,252   (16,498)    2,754
 Equity in
  net loss
  of affil-
  iates          195        --       195        49        --        49
            ----------------------------  ----------------------------
   (Loss)
    income
    from
    contin-
    uing
    opera-
    tions   (411,303)  417,477     6,174  (402,570)  417,477    14,907
 Loss from
  discontinued
  operations,
  net of
  taxes          (90)       --       (90)   (1,025)       --    (1,025)
            ----------------------------  ----------------------------
   Net (loss)
    income ($411,393) $417,477  $  6,084 ($403,595) $417,477  $ 13,882
            ============================  ============================
 Basic (loss)
  income per
  common
  share:
   Continuing
    opera-
    tions     ($3.68) $   3.73  $   0.06    ($3.56) $   3.70  $   0.13
   Discontinued
    opera-
    tions     ($0.00) $   0.00    ($0.00)   ($0.01) $   0.00    ($0.01)
   Net (loss)
    income
    per
    common
    share     ($3.68) $   3.73  $   0.05    ($3.57) $   3.70  $   0.12
 Diluted
  (loss)
  income per
  common
  share:
   Continuing
    opera-
    tions     ($3.68) $   3.73  $   0.06    ($3.56) $   3.70  $   0.13
   Discontinued
    opera-
    tions     ($0.00) $   0.00    ($0.00)   ($0.01) $   0.00    ($0.01)
   Net (loss)
    income
    per
    common
    share     ($3.68) $   3.73  $   0.05    ($3.57) $   3.70  $   0.12

 Weighted
  average
  shares
  outstand-
  ing:
   Basic     111,796   111,796   111,796   112,942   112,942   112,942
   Diluted   111,796   111,796   111,993   112,942   112,942   113,510

 (a) Non-GAAP cost of sales for the three months ended
     September 27, 2008 is adjusted for $5.7 million charge for fair
     value mark-up of acquired inventory sold related to the POCO
     Graphite, Inc. acquisition.
 (b) Non-GAAP impairment of goodwill for the three months ended
     September 27, 2008 is adjusted for $395.3 million of impairment
     charges related to goodwill.
 (c) Non-GAAP Income tax expense for the three months ended
     September 27, 2008 is adjusted for $31.9 million primarily
     related to the increase in the valuation allowance related to
     the U.S. tax credit carryforwards, offset by an adjustment of
     $15.5 million for the tax benefit associated with the goodwill
     impairment charges as noted in (b) above.


                    Entegris, Inc. and Subsidiaries
                 Condensed Consolidated Balance Sheets
                            (In thousands)
                              (Unaudited)

                                              Sept. 27,     Dec. 31,
                                                2008          2007
                                             ----------    ----------
 ASSETS
 Cash, cash equivalents and short-term
  investments                                $   73,961    $  160,655
 Accounts receivable                            107,928       112,053
 Inventories                                    107,899        73,120
 Deferred tax assets, deferred tax charges
  and refundable income taxes                    28,731        23,238
 Other current assets and assets held for sale   13,436        13,555
                                             ----------    ----------
   Total current assets                         331,955       382,621

 Property, plant and equipment, net             154,043       121,157

 Intangible assets and goodwill                 176,690       478,495
 Deferred tax asset - non-current                32,214        35,323
 Other assets                                    27,329        17,645
                                             ----------    ----------
   Total assets                              $  722,231    $1,035,241
                                             ==========    ==========

 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current maturities of long-term debt        $   11,562    $    9,310
 Short-term borrowings                            4,728        17,802
 Accounts payable                                28,254        24,260
 Accrued liabilities                             55,334        61,884
 Income tax payable                               4,123        12,493
                                             ----------    ----------
   Total current liabilities                    104,001       125,749

 Long-term debt, less current maturities        118,742        20,373
 Other liabilities                               63,281        36,810
 Shareholders' equity                           436,207       852,309
                                             ----------    ----------
   Total liabilities and shareholders'
    equity                                   $  722,231    $1,035,241
                                             ==========    ==========


                    Entegris, Inc. and Subsidiaries
            Condensed Consolidated Statements of Cash Flows
                            (In thousands)
                              (Unaudited)

                                                  Three months ended
 ---------------------------------------------------------------------
                                                 Sept. 27,   Sept. 29,
                                                   2008        2007
 ---------------------------------------------------------------------
 Operating activities:
 Net (loss) income                              ($411,393)   $  8,417
 Adjustments to reconcile net income to net
  cash provided by operating activities:
   Loss from discontinued operations                   90         536
   Depreciation                                     6,476       6,351
   Amortization                                     4,858       4,716
   Deferred tax valuation allowance                30,660          --
   Provision for deferred taxes                   (15,524)         --
   Share-based compensation expense                 1,335       2,700
   Impairment of goodwill assets                  395,261          --
   Charge for fair market value mark-up of
    acquired inventory                              5,718         736
   Other                                              848        (680)
   Changes in operating assets and liabilities,
    excluding effects of acquisitions:
     Trade accounts receivable and notes
      receivable                                    6,039       1,940
     Inventories                                     (464)      2,122
     Accounts payable and accrued liabilities      (5,632)        917
     Income taxes payable                         (10,051)     (2,205)
     Other                                          3,524        (416)
 ---------------------------------------------------------------------
 Net cash provided by operating activities         11,745      25,134
 ---------------------------------------------------------------------
 Investing activities:
 Acquisition of property and equipment             (7,399)     (6,253)
 Acquisition of businesses                       (161,973)    (41,844)
 Other                                                110      (2,136)
 ---------------------------------------------------------------------
 Net cash used in investing activities           (169,262)    (50,233)
 ---------------------------------------------------------------------
 Financing activities:
 Principal payments on short-term borrowings
  and long-term debt                              (29,108)    (27,127)
 Proceeds from short-term and long-term
  borrowings                                      133,000      37,000
 Issuance of common stock                             902       1,401
 Repurchase and retirement of common stock         (4,492)       (605)
 Other                                                 --         420
 ---------------------------------------------------------------------
 Net cash provided by financing activities        100,302      11,089
 ---------------------------------------------------------------------
 Net cash used in discontinued operations              (2)       (784)
 ---------------------------------------------------------------------
 Effect of exchange rate changes on cash and
  cash equivalents                                 (1,230)      4,132
 ---------------------------------------------------------------------
     Decrease in cash and cash equivalents        (58,447)    (10,662)
 Cash and cash equivalents at beginning of
  period                                          132,408     136,535
 ---------------------------------------------------------------------
 Cash and cash equivalents at end of period      $ 73,961    $125,873
 =====================================================================



SOURCE: Entegris, Inc.

Entegris, Inc.
Steve Cantor, VP of Corporate Relations
978-436-6750
irelations@entegris.com