News Release Details
Entegris Reports 2005 Third-Quarter Results; Unit-Driven Demand Continues to Be Strong Across Multiple Markets
CHASKA, Minn.--(BUSINESS WIRE)--June 16, 2005--Entegris, Inc. (Nasdaq:ENTG), the leader in materials integrity management, today reported results for its fiscal 2005 third quarter ended May 28, 2005. For the third quarter, sales totaled $87.1 million, up sequentially from second-quarter sales of $85.1 million. The company reported net income of $7.1 million, or 9 cents per diluted share, compared to $4.5 million, or 6 cents per diluted share, for the fiscal 2005 second quarter. Third-quarter earnings per diluted share surpassed Entegris' guidance of 7 cents to 8 cents per share. For the year-ago third quarter, sales totaled $98.6 million, with net income of $9.2 million, or 12 cents per diluted share.
Operating margin for the fiscal 2005 third quarter was 8.0 percent, up from 7.0 percent for the fiscal 2005 second quarter, and was driven by increased sales and lower selling, general and administrative expenses. Entegris generated about $20 million in cash from operations during the 2005 third quarter and now has $164 million in cash and short-term investments on hand.
As previously disclosed, during the fiscal 2005 third quarter Entegris received a distribution payment related to the company's ownership of 1.1 million shares of Nortem N.V. (formerly Metron Technology N.V.), which was acquired by Applied Materials. The related gain was $1.8 million pre-tax, or $1.1 million after-tax.
"We exceeded our guidance for the third quarter," said Jim Dauwalter, Entegris' chief executive officer. "We accomplished this while continuing to balance our administrative infrastructure, as well as strengthening our leadership position. Our broad product offering of materials integrity management solutions across multiple markets, combined with our primarily unit-driven product sales are key factors in moderating fluctuations in demand."
Sales by Market
Sales in Data Storage increased from the 2005 second quarter by about 36 percent, fueled by broad-based unit demand for disk media. Semiconductor market sales remained stable from the 2005 second to third quarter. Unit-driven sales for wafer shippers within the semiconductor market increased by about 10 percent, but were offset by declines in capital-spending-driven solutions. Demand for capital-spending-driven 300 mm wafer carrier products was strong, while wafer carrier sales to smaller wafer size fabs declined. In addition, demand for capital-spending-driven Fluid Handling solutions to OEM customers declined related to lower demand for semiconductor capital equipment. Sales to the Life Sciences and Fuel Cell markets increased from 2005 second-quarter results, while Services sales declined, primarily due to timing of customer acceptance of cleaning equipment.
Outlook
Continued Dauwalter, "The semiconductor market is emerging from a mild slowdown. Our unit-driven business remains solid, primarily related to overall fab utilization, while the capital equipment market is volatile and is still recovering from the industry slowdown. However, underlying industry fundamentals look promising. Demand for our Data Storage products remains strong, but we anticipate sales in our fourth quarter to decline slightly from third quarter levels during the historically weaker summer months. In our new markets of Services, Life Sciences and Fuel Cell, we anticipate sales to be flat to up sequentially."
For the fourth quarter of 2005, the company expects total sales to be flat sequentially with the third quarter, and earnings per share of 4 cents to 5 cents. This estimate includes about $3.0 million in pre-tax expenses, or about $1.9 million after-tax, related to the company's previously announced realignment plans. Entegris announced in a press release on May 3, 2005 that it is realigning production and administrative activities, to increase manufacturing efficiencies and asset utilization, while maintaining production capacity. Also included is a $1.1 million pre-tax gain, or $664 thousand after tax, related to the final cash distribution received by Entegris during the 2005 fourth quarter, in connection with Applied Materials' Metron acquisition.
On March 21, 2005, Entegris announced a definitive agreement to combine with Mykrolis in a merger of equals transaction. The company has received early termination of the waiting period under the Hart-Scott-Rodino Act and is working through the process to have its S-4 Registration Statement declared effective by the SEC. The company anticipates finalizing the merger during the 2005 third calendar quarter.
Balance Sheet/Cash Flow Statement
Cash, cash equivalents and short-term investments at the end of the fiscal 2005 third quarter increased by $14 million from the second quarter to $164 million, and the company generated approximately $20 million in cash from operations. Depreciation and amortization expense was approximately $5.9 million for the fiscal 2005 third quarter; capital expenditures for the same period totaled $6.8 million.
Third-Quarter Results Conference Call Details
Investors have the opportunity to listen to Entegris' third-quarter conference call today at 8:30 a.m. ET over the Internet at www.entegris.com or by dialing (877) 502-9272, conference code 4573442. For those who cannot listen to the live event, a replay will be available shortly after the call on the Entegris Web site or by dialing (888) 203-1112, conference code 4573442.
FORWARD-LOOKING STATEMENTS
Certain information in this news release does not relate to historical financial information and may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including sales, earnings and expense expectations for the fourth quarter of fiscal 2005 and the expected closing of the merger with Mykrolis. Such statements are subject to certain risks and uncertainties that could cause the company's actual results in the future to differ materially from its historical results and those presently anticipated or projected.
Among these risks and uncertainties are general economic conditions, the cyclical nature of the semiconductor industry, the risks associated with the acceptance of new products and services, fluctuations in raw material pricing, the ability to expand into new markets while improving financial performance, and the ability of operations to respond to rapidly changing demand. The ability to close the merger in the 2005 third calendar quarter is subject to the timing of the SEC review process and the satisfaction of other closing conditions, including the affirmative vote of the parties' stockholders. Other factors that could cause the company's results to differ materially from those contained in its forward-looking statements are included in the Form 10K filed in November 2004 and other documents filed by the company with the Securities and Exchange Commission.
ABOUT ENTEGRIS
Entegris products and services protect and transport the critical materials enabling the world's leading technologies. As a leading materials integrity management company, Entegris provides products and services used in key technology industries including the semiconductor, data storage, chemical processing, biopharmaceutical, medical device and fuel cell. Entegris is ISO 9001 certified and has manufacturing or service facilities in the United States, France, Germany, Japan, Malaysia and Singapore. The company's advanced research laboratories are located in Minnesota and Colorado, USA. Directly and through distributors, Entegris provides customer support on six continents. Additional information can be found at: http://www.entegris.com
ENTEGRIS, INC. CONSOLIDATED STATEMENT OF OPERATIONS (Amounts in thousands, except per share amounts) Three months ended Nine months ended -------------------------- -------------------------- May 28, 2005 May 29, 2004 May 28, 2005 May 29, 2004 -------------------------- -------------------------- Net sales $87,075 $98,624 $262,753 $247,270 Cost of sales 51,837 54,324 155,721 140,809 -------------------------- -------------------------- Gross profit 35,238 44,300 107,032 106,461 Selling, general and administrative expenses 23,312 25,525 72,289 69,914 Engineering, research and development expenses 4,948 5,343 14,037 14,767 -------------------------- -------------------------- Operating income 6,978 13,432 20,706 21,780 Interest income, net (800) (12) (1,436) (118) Other income, net (1,877) (38) (1,511) (1,251) -------------------------- -------------------------- Income before income taxes and other items below 9,655 13,482 23,653 23,149 Income tax expense 2,473 4,285 6,172 7,296 Equity in net loss of affiliates 73 22 158 18 -------------------------- -------------------------- Net income $7,109 $9,175 $17,323 $15,835 ========================== ========================== Earnings per common share: Basic: $0.10 $0.13 $0.24 $0.22 Diluted: $0.09 $0.12 $0.23 $0.21 Weighted shares outstanding: Basic 73,505 73,102 73,371 72,841 Diluted 75,554 76,324 75,350 76,273 ENTEGRIS, INC. CONSOLIDATED BALANCE SHEETS (Amounts in thousands) May 28, 2005 August 28, 2004 -------------------------------- ASSETS Cash, cash equivalents and short-term investments $163,587 $133,180 Accounts receivable 65,567 74,525 Inventories 44,259 45,186 Deferred tax assets 9,619 8,178 Other current assets 3,158 3,546 -------------------------------- Total current assets 286,190 264,615 Property, plant and equipment 96,310 97,634 Investments 2,467 7,146 Intangible assets 93,082 95,040 Other assets 3,947 2,611 -------------------------------- Total assets $481,996 $467,046 ================================ LIABILITIES AND SHAREHOLDERS' EQUITY Current maturities of long-term debt $1,905 $1,492 Short-term debt - 6,477 Accounts payable 16,815 15,768 Accrued liabilities 33,470 35,578 Income tax payable 5,627 5,604 -------------------------------- Total current liabilities 57,817 64,919 Long-term debt, less current maturities 22,719 18,898 Deferred tax liabilities 11,070 11,044 Shareholders' equity 390,390 372,185 -------------------------------- Total liabilities and shareholders' equity $481,996 $467,046 ================================
CONTACT: Entegris, Inc., Chaska
Public Relations:
Bill Paterson, 952-556-4155
bill_paterson@entegris.com
or
Investor Relations
Heide Erickson, 952-556-8051
heide_erickson@entegris.com
SOURCE: Entegris, Inc.