Feb 12, 2009

Entegris Reports Fourth Quarter and Fiscal Year 2008 Results

Credit Agreement Amended in Light of Sharp Economic and Industry Slowdown; Cost Reductions Lower Quarterly Breakeven Further

CHASKA, Minn., Feb. 12, 2009 (GLOBE NEWSWIRE) -- Entegris, Inc. (Nasdaq:ENTG) today reported its financial results for the fiscal fourth quarter and year ended December 31, 2008.

The Company recorded fourth-quarter sales of $112.7 million and a net loss of $131.8 million, or $1.18 per share. The fourth-quarter results included a goodwill impairment charge of $94.0 million, additional cost of sales of $7.8 million related to inventory acquired in the acquisition of Poco Graphite, investment impairment charges of $10.6 million, and a deferred tax valuation adjustment of $12.5 million. On a non-GAAP basis, the loss from continuing operations was $15.9 million, or $0.14 per share, which included restructuring charges of $7.3 million.

Fiscal 2008 sales were $554.7 million. The GAAP net loss was $517.0 million, or $4.59 per diluted share. The fiscal 2008 results included goodwill impairment charges of $473.8 million, non-cash purchase accounting charges of $13.5 million, investment impairment charges of $11.7 million, and deferred tax valuation adjustments of $39.4 million. The fiscal 2008 net loss from continuing operations on a non-GAAP basis was $1.6 million, or $0.01 per diluted share, which included restructuring charges of $10.6 million.

Gideon Argov, president and chief executive officer, said: "The steep fourth-quarter decline in spending and production activity across the semiconductor industry was evident across our product lines. Even our unit-driven products, which are historically more stable during industry downturns, were adversely impacted by low fab utilization and output."

Argov continued: "To contend with this difficult environment, we have taken actions to reduce our targeted quarterly breakeven to less than $100 million on an EBITDA basis by the second half of 2009. To do this we have restructured the business to reduce our fixed costs by $28 million annually, supplemented by temporary cost reduction measures such as scheduled plant shutdowns and global salary reductions. We are confident these steps will enable us to effectively manage through a very challenging market environment, while ensuring our ability to sustain investments in critical engineering and development projects."

Greg Graves, chief financial officer, said: "In anticipation of the impact on our business of what may be a deep and extended downturn, we initiated a discussion with our bank group that resulted in a commitment letter to amend the terms of our revolving credit facility. Under the amended agreement, the primary loan covenant is a monthly cumulative EBITDA test that allows for losses over the next 12 months. In exchange for the flexibility this affords, we have reduced the size of the facility, shortened the maturity to November 2011, agreed to increase the interest rate on the borrowed funds, and granted a security interest in certain assets. We believe these amended terms, together with our year-end cash balance of $115 million, will provide the Company with ample liquidity to fund operations and necessary investments until our markets recover."

Fourth-Quarter Results Conference Call Details

Entegris will hold a conference call to discuss its results for the fourth quarter on Thursday, February 12, 2009, at 10:00 a.m. Eastern Time. Participants should dial 1-877-502-9276 (for domestic callers) or 1-913-905-1086 (for callers outside the U.S.). A replay of the call can be accessed at 1-719-457-0820 using passcode 6725476. 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, Inc. 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         Twelve months ended
               --------------------------------  ---------------------
                Dec. 31,    Sept. 27,  Dec. 31,   Dec. 31,    Dec. 31,
                  2008        2008       2007       2008        2007
               --------------------------------  ---------------------
 Net sales      $ 112,736   $ 145,789  $161,348   $ 554,699  $ 626,238

 Cost of sales     80,291      90,391    94,623     342,981    360,001
 Restructuring
  charges             203          --        --         203         --
               --------------------------------  ---------------------
   Gross
    profit         32,242      55,398    66,725     211,515    266,237

 Selling,
  general and
  administrative
  expenses         31,731      35,373    43,376     147,531    163,918
 Engineering,
  research and
  development
  expenses          8,939      10,284    10,105      40,086     39,727

 Amortization
  of intangible
  assets            5,088       4,858     5,172      19,585     18,874

 Impairment of
  goodwill         93,989     379,810        --     473,799         --

 Restructuring
  charges           7,091       3,332        --      10,423         --
               --------------------------------  ---------------------
   Operating
    (loss)
    income       (114,596)   (378,259)    8,072    (479,909)    43,718

 Interest
  expense
  (income), net       336         614       271       1,018     (5,245)

 Other
  expense
  (income), net    13,663         947    (1,659)     15,486     (7,656)
               --------------------------------  ---------------------
   (Loss)
    income
    before
    income
    taxes        (128,595)   (379,820)    9,460    (496,413)    56,619

 Income tax
  expense           3,473      12,897    (1,614)     19,785     10,356
 Equity in net
  loss
  (earnings)
  of affiliates       234         195       (85)        283        (93)
               --------------------------------  ---------------------
   (Loss)
    income
    from
    continuing
    operations   (132,302)   (392,912)   11,159    (516,481)    46,356
 Income (loss)
  from
  discontinued
  operations,
  net of taxes        504         (90)     (377)       (521)    (1,997)
               --------------------------------  ---------------------
   Net (loss)
    income      ($131,798)  ($393,002) $ 10,782   ($517,002) $  44,359
               ================================  =====================

 Basic (loss)
  income per
  common share:
   Continuing
    operations     ($1.18)     ($3.51)    $0.10      ($4.58)     $0.38
   Discontinued
    operations      $0.00      ($0.00)   ($0.00)     ($0.00)    ($0.02)
   Net (loss)
    income per
    common
    share          ($1.18)     ($3.52)    $0.09      ($4.59)     $0.36
 Diluted (loss)
  income per
  common share:
   Continuing
    operations     ($1.18)     ($3.51)    $0.10      ($4.58)     $0.37
   Discontinued
    operations      $0.00      ($0.00)    $0.00      ($0.00)    ($0.02)
   Net (loss)
    income per
    common
    share          ($1.18)     ($3.52)    $0.09      ($4.59)     $0.36
 Weighted
  average
  shares
  outstanding:

   Basic          111,787     111,796   114,475     112,653    122,557

   Diluted        111,787     111,796   115,819     112,653    124,940


      GAAP to Non-GAAP Reconciliation of Statement of Operations
                 (In thousands, except per share data)
                              (Unaudited)

                                            Three months ended
                                             December 31, 2008
                                    ---------------------------------
                                       U.S.                    Non-
                                       GAAP     Adjustments    GAAP
                                    ---------------------------------

 Net sales                           $ 112,736          $--  $112,736

 Cost of sales(a)                       80,291       (7,801)   72,490

 Restructuring charges                     203           --       203
                                    ---------------------------------
   Gross profit                         32,242        7,801    40,043

 Selling, general and
  administrative expenses (b)           31,731         (596)   31,135
 Engineering, research and
  development
  expenses                               8,939           --     8,939

 Amortization of intangible assets       5,088           --     5,088

 Impairment of goodwill (c)             93,989      (93,989)       --

 Restructuring charges                   7,091           --     7,091
                                    ---------------------------------
   Operating (loss) income            (114,596)     102,386   (12,210)


 Interest expense, net                     336           --       336

 Other expense, net (d)                 13,663      (10,000)    3,663
                                    ---------------------------------
   (Loss) income before income
   taxes                              (128,595)     112,386   (16,209)

 Income tax (benefit) expense (e)        3,473       (3,970)     (497)

 Equity in net loss of affiliates          234           --       234
                                    ---------------------------------
   (Loss) income from continuing      (132,302)     116,356   (15,946)
   operations
 Income (loss) from discontinued
 operations, net of taxes                  504           --       504
                                    ---------------------------------
   Net (loss) income                 ($131,798)   $ 116,356  ($15,442)
                                    =================================

 Basic (loss) income per common
  share:
   Continuing operations                ($1.18)       $1.04    ($0.14)
   Discontinued operations               $0.00           --     $0.00
   Net (loss) income per common
   share                                ($1.18)       $1.04    ($0.14)
 Diluted (loss) income per common
   share:
   Continuing operations                ($1.18)       $1.04    ($0.14)
   Discontinued operations               $0.00           --     $0.00
   Net (loss) income per common
  share                                 ($1.18)       $1.04    ($0.14)

 Weighted average shares outstanding:
   Basic                               111,787      111,787   111,787
   Diluted                             111,787      111,787   111,787


                                            Twelve months ended
                                              December 31, 2008
                                    ---------------------------------
                                       U.S.                    Non-
                                       GAAP     Adjustments    GAAP
                                    ---------------------------------
 Net sales                           $ 554,699     $     --  $554,699

 Cost of sales (a)                     342,981      (13,519)  329,462

 Restructuring charges                     203           --       203
                                    ---------------------------------
   Gross profit                        211,515       13,519   225,034
 Selling, general and
  administrative expenses (b)          147,531         (596)  146,935
 Engineering, research and
  development expenses                  40,086           --    40,086

 Amortization of intangible assets      19,585           --    19,585

 Impairment of goodwill (c)            473,799     (473,799)       --

 Restructuring charges                  10,423           --    10,423
                                    ---------------------------------
      Operating (loss) income         (479,909)     487,914     8,005


 Interest expense, net                   1,018           --     1,018

 Other expense, net (d)                 15,486      (11,102)    4,384
                                    ---------------------------------
   (Loss) income before income
    taxes                             (496,413)     499,016     2,603

 Income tax (benefit) expense (e)       19,785      (15,830)    3,955

 Equity in net loss of affiliates          283           --       283
                                    ---------------------------------
      (Loss) income from
        continuing operations         (516,481)     514,846    (1,635)
 Income (loss) from discontinued
 operations, net of taxes                 (521)          --      (521)
                                    ---------------------------------
      Net (loss) income              $(517,002)   $ 514,846  $ (2,156)
                                    =================================

 Basic (loss) income per common
  share:
   Continuing operations                ($4.58)       $4.57    ($0.01)
   Discontinued operations              ($0.00)          --    ($0.00)
   Net (loss) income per common
    share                               ($4.59)       $4.57    ($0.02)
 Diluted (loss) income per common
  share:
   Continuing operations                ($4.58)       $4.57    ($0.01)
   Discontinued operations              ($0.00)          --    ($0.00)
   Net (loss) income per common
    share                               ($4.59)       $4.57    ($0.02)

 Weighted average shares
  outstanding:
   Basic                               112,653      112,653   112,653
   Diluted                             112,653      112,653   112,653

 a) Cost of sales for the three months ended and year ended
    December 31, 2008 is adjusted for $7.8 million and $13.5 million,
    respectively, for the fair value mark-up of acquired inventory
    sold related to the POCO Graphite, Inc. acquisition.

 b) Selling, general, and administrative expense for both the three
    months ended and year ended December 31, 2008 is adjusted for
    $0.6 million, related to the write-off of a loan.

 c) Impairment of goodwill for the three months ended and year ended
    December 31, 2008 is adjusted for $94.0 million and $473.8 million

    of impairment charges, respectively, related to goodwill.

 d) Other expense, net for the three months ended and year ended
    December 31, 2008 is adjusted for $10.0 million and $11.1 million,
    respectively, for write-offs of equity investments.

 e) Income tax expense for the three months ended and year ended
    December 31, 2008 is adjusted for $12.5 million and $39.4,
    respectively, related to the increase in the deferred tax asset
    valuation allowance related to U.S. tax credit carryforwards,
    offset by adjustments of $8.5 million and $23.6 million,
    respectively, for the tax benefit associated with the impairment
    charges and write-offs noted in b), c) and d) above.



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

                                              Dec. 31,     Dec. 31,
                                                2008         2007
                                              --------    ----------
 ASSETS
 Cash, cash equivalents and short-term
  investments                                 $115,033    $  160,655
 Accounts receivable                            70,535       112,053
 Inventories                                   102,189        73,120
 Deferred tax assets, deferred tax charges
  and refundable income taxes                   13,337        23,238
 Other current assets and assets held for
  sale                                          10,710        13,555
                                              --------    ----------
   Total current assets                        311,804       382,621

 Property, plant and equipment, net            159,738       121,157

 Intangible assets and goodwill                 93,139       478,495
 Deferred tax asset - non-current               30,349        35,323
 Other assets                                   18,504        17,645
                                              --------    ----------
   Total assets                               $613,534    $1,035,241
                                              ========    ==========

 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current maturities of long-term debt         $ 13,166    $    9,310
 Short-term borrowings                              --        17,802
 Accounts payable                               21,782        24,260
 Accrued liabilities                            42,456        61,884
 Income tax payable                              1,605        12,493
                                              --------    ----------
   Total current liabilities                    79,009       125,749

 Long-term debt, less current maturities       150,516        20,373
 Other liabilities                              47,839        36,810
 Shareholders' equity                          336,170       852,309
                                              --------    ----------
   Total liabilities and shareholders'
    equity                                    $613,534    $1,035,241
                                              ========    ==========


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

                          Quarter ended Dec. 31    Year ended Dec. 31
 ---------------------------------------------------------------------
                              2008       2007      2008        2007
 ---------------------------------------------------------------------
 Operating activities:
 Net (loss) income          ($131,798) $ 10,782   ($517,002) $  44,359
 Adjustments to reconcile
  net income to net cash
  provided by operating
  activities:
   (Income) loss from
    discontinued
    operations                   (504)      377         521      1,997
   Depreciation                 7,982     6,010      26,758     24,902
   Amortization                 5,088     5,172      19,585     18,874
   Stock-based
    compensation expense        1,466     1,891       7,024     10,344
   Impairment of goodwill      93,989       235     473,799        235
   Impairment of equity
    investments                10,596        --      11,698         --
   Deferred tax valuation
    allowance                  12,501        --      39,425         --
   Provision for deferred
    taxes                      (8,824)  (21,661)    (23,595)   (20,434)
   Charge for fair value
    mark-up of acquired
    inventory                   7,801       100      13,519        836
   Other                        2,149     5,840       2,305     (2,808)
   Changes in operating
    assets and liabilities,
    excluding effects of
    acquisitions:
     Trade accounts
      receivable and notes
      receivable               39,186    (5,988)     53,355     20,054
     Inventories               (1,310)    8,992       1,922     24,061
     Accounts payable and
      accrued liabilities     (20,117)    7,235     (29,840)    (2,935)
     Income taxes payable
      and refundable
      income taxes             (2,827)   15,930     (25,057)    14,682
     Other                      8,054    (2,087)     10,741      2,150
 ---------------------------------------------------------------------
  Net cash provided by
   operating activities        23,432    32,828      65,158    132,017
 ---------------------------------------------------------------------
 Investing activities:
 Acquisition of property
  and equipment                (7,793)   (5,484)    (26,987)   (26,919)
 Acquisition of
  businesses, net of cash
  acquired                       (879)   (3,067)   (162,852)   (44,911)
 Purchases of equity
  investments                      --        --     (10,982)    (6,126)
 Maturities of short-term
  investments, net of
  purchases                        --        --          --    121,093
 Other                           (129)    4,004         900      7,663
 ---------------------------------------------------------------------
 Net cash (used in)
  provided by investing
  activities                   (8,801)   (4,547)   (199,921)    50,800
 ---------------------------------------------------------------------
 Financing activities:
 Payments on short-term
  borrowings and long-term
  debt                        (16,301)  (60,800)    (64,707)   (88,115)
 Proceeds from short-term
  and long-term borrowings     40,811    69,063     173,811    131,063
 Repurchase and retirement
  of common stock                  --    (4,100)    (28,895)  (256,109)
 Issuance of common stock           9     1,140       3,097     29,856
 Other                             (3)   (2,401)       (625)       244
 ---------------------------------------------------------------------
 Net cash provided by
  (used in) financing
  activities                   24,516     2,902      82,681   (183,061)
 ---------------------------------------------------------------------
 Net cash (used in)
  provided by discontinued
  operations                     (433)    2,313         (41)     1,237
 ---------------------------------------------------------------------
 Effect of exchange rate
  changes on cash               2,358     1,286       6,501      4,856
 ---------------------------------------------------------------------
 Increase (decrease) in
  cash and cash
  equivalents                  41,072    34,782     (45,622)     5,849
 Cash and cash equivalents
  at beginning of period       73,961   125,873     160,655    154,806
 ---------------------------------------------------------------------
 Cash and cash equivalents
  at end of period          $ 115,033  $160,655   $ 115,033  $ 160,655
 =====================================================================

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