Jul 27, 2010

Entegris Reports Non-GAAP Earnings per Share of $0.16 in Second Quarter

Quarterly Sales of $168 Million Up 103 Percent From Prior Year and 4 Percent Sequentially

$28 Million of Cash From Operations Generated in Second Quarter

Credit Facility Balance Now Fully Repaid

BILLERICA, Mass., July 27, 2010 (GLOBE NEWSWIRE) -- Entegris, Inc. (Nasdaq:ENTG) today reported its financial results for the Company's second quarter ended July 3, 2010, marking the Company's fifth consecutive quarter of organic growth.

The Company recorded second-quarter sales of $167.6 million, an increase of 103 percent over the prior year, and four percent sequentially.   Net income was $18.4 million, or $0.14 per diluted share.   These results included amortization of intangible assets of $3.4 million. 

Non-GAAP earnings per share of $0.16 in the second quarter of 2010 compared to a loss per share of $0.16 in the second quarter a year ago and $0.15 per diluted share in the first quarter of 2010. A reconciliation table of GAAP to non-GAAP earnings (loss) per share is contained in this press release.

For the first half of fiscal 2010, sales were $328.1 million, up 132 percent from the first half of 2009. Non-GAAP earnings per diluted share for the first six months of 2010 were $0.30 versus a loss per share of $0.41 for the same period a year ago.

Gideon Argov, president and chief executive officer, said: "We continued to successfully implement our strategies for growth that capitalize on the strength and potential of our core semiconductor market as well as adjacent new market opportunities.  Our advanced contamination control and microenvironment solutions for the most demanding processes, including 32 nanometer and below, are getting good traction with customers and position us for additional share gains in the future. As a result of the steps we've taken thus far and the favorable business trends in the semiconductor and microelectronics markets, we expect the second half of the year will be stronger than the first half.       

"Our adjusted operating margin of 17.8 percent for the second quarter exceeded our target performance, and was substantially higher than operating returns we recorded previously at comparable revenue levels. The improvement in profitability is the result of the work done to streamline and revitalize operations over the last two years," Argov said.

"This operating performance has translated into strong cash flow and a solid balance sheet. We generated $28 million in cash from operations and $37 million of adjusted EBITDA in the second quarter.  We are on pace to generate more than $100 million of cash from operations and adjusted EBITDA in excess of $140 million for the year. This strong cash flow has enabled us to completely repay the balance on our credit facility in July, well ahead of schedule," Argov said.

Second-Quarter Results Conference Call Details

Entegris will hold a conference call to discuss its results for the second quarter on Tuesday, July 27, 2010, at 10:00 a.m. Eastern Time.  Participants should dial 1-888-364-3112 (domestic callers) or 1-719-325-2359 (for callers outside of the U.S.), referencing confirmation code #8846949. A live and on-demand webcast of the call can also be accessed from the investor relations section of Entegris' 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, Israel, Japan, Malaysia, Singapore, South Korea and Taiwan.  Additional information can be found at www.entegris.com.

The Entegris, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3700

Non-GAAP Information

The Company's consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (GAAP). Adjusted EBITDA and Adjusted Operating Income together with related measures thereof, and non-GAAP EPS, are considered "Non-GAAP financial measures" under the rules and regulations of the SEC. These financial measures are provided as a complement to financial measures provided in accordance with GAAP. We provide non-GAAP financial measures in order to better assess and reflect operating performance. Management believes the non-GAAP measures help indicate our baseline performance before certain gains, losses or other charges that may not be indicative of our business or future outlook. We believe these non-GAAP measures will aid investors' overall understanding of our results by providing a higher degree of transparency for certain expenses and providing a level of disclosure that will help investors understand how we plan and measure our business. The presentation of non-GAAP measures is not meant to be considered in isolation, as a substitute for, or superior to, financial measures or information provided in accordance with GAAP. The calculations of Adjusted EBITDA margin, Adjusted Operating Income, and non-GAAP EPS are included elsewhere in this release.

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," "Risks Related to our Borrowings", "Manufacturing Risks," "International Risks," and "Risks Related to Owning Our Securities" in Item 1A of our Annual Report on Form 10–K for the fiscal year ended December 31, 2009, 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
  Consolidated Statements of Operations
  (In thousands, except per share data)
  (Unaudited)
  
  Three months ended
  July 3, 2010April 3, 2010June 27, 2009
Net sales $167,575 $160,511 $82,576
Cost of sales 90,448 87,360 58,846
  Gross profit 77,127 73,151 23,730
Selling, general and administrative expenses 36,592 35,782 25,685
Engineering, research and development expenses 10,736 10,820 7,843
Amortization of intangible assets 3,364 4,272 4,931
Restructuring charges -- -- 5,452
  Operating income (loss) 26,435 22,277 (20,181)
Interest expense, net 1,662 1,206 2,577
Other expense (income), net 711 (293) 1,537
  Income (loss) before income taxes 24,062 21,364 (24,295)
Income tax expense (benefit) 5,393 4,809 (2,252)
Equity in net (earnings) loss of affiliates (77) (191) 449
  Net income (loss)  18,746 16,746 (22,492)
Net income attributable to noncontrolling interest 361 196 --
  Net income (loss) attributable to Entegris, Inc. $18,385 $16,550 $(22,492)
     
Amounts attributable to Entegris, Inc.:  
Basic net income (loss) per common share: $0.14 $0.13 $(0.20)
Diluted net income (loss) per common share: $0.14 $0.12 $(0.20)
    
Weighted average shares outstanding:   
  Basic 131,568 130,954 112,694
  Diluted 132,870 132,783 112,694
  
  Entegris, Inc. and Subsidiaries
  Condensed Consolidated Statements of Operations
  (In thousands, except per share data)
  (Unaudited)
  
  Six months ended
  July 3, 2010June 27, 2009
Net sales $328,086 $141,614
Cost of sales 177,808 108,801
Amortization of acquired inventory fair value step-up -- 4,065
  Gross profit 150,278 28,748
Selling, general and administrative expenses 72,374 55,406
Engineering, research and development expenses 21,556 16,747
Amortization of intangible assets 7,636 9,912
Restructuring charges -- 10,086
  Operating income (loss)  48,712 (63,403)
Interest expense, net 2,868 4,425
Other expense (income), net 418 (3,686)
  Income (loss) before income taxes 45,426 (64,142)
Income tax expense (benefit) 10,202 (4,850)
Equity in net (earnings) loss of affiliates (268) 945
  Net income (loss) 35,492 (60,237)
Net income attributable to noncontrolling interest 557 --
  Net income (loss) attributable to Entegris, Inc. $34,935 $(60,237)
    
Amounts attributable to Entegris, Inc.: 
Basic net income (loss) per common share: $0.27 $(0.54)
Diluted net income (loss) per common share: $0.26 $(0.54)
    
Weighted average shares outstanding:  
  Basic 131,261 112,521
  Diluted 132,827 112,521
   
Entegris, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands)
(Unaudited)
   
 July 3, 2010December 31, 2009
ASSETS  
Cash and cash equivalents  $75,313 $68,700
Accounts receivable, net 116,742 91,122
Inventories 90,554 83,233
Deferred tax assets, deferred tax charges and refundable income taxes 12,272 11,085
Other current assets and assets held for sale 13,083 13,318
 Total current assets 307,964 267,458
   
Property, plant and equipment, net 130,361 135,431
   
Intangible assets 70,373 78,470
Deferred tax assets – non-current 10,120 9,670
Other assets 12,592 13,643
 Total assets $531,410 $504,672
   
LIABILITIES AND EQUITY 
Current maturities of long-term debt $5,886 $11,257
Short-term borrowings -- 8,039
Accounts payable 29,008 23,553
Accrued liabilities 45,562 29,832
Income tax payable and deferred tax liabilities 9,896 1,229
 Total current liabilities 90,352 73,910
   
Long-term debt, less current maturities 20,406 52,492
Other liabilities 28,503 28,613
Equity 392,149 349,657
Total liabilities and equity $531,410 $504,672
     
Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
     
 Three months endedSix months ended
 July 3, 2010June 27, 2009July 3, 2010June 27, 2009
Operating activities:    
Net income (loss)  18,746 (22,492) 35,492 (60,237)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
    
Depreciation  7,166 7,903 13,890 16,173
Amortization 3,364 4,931 7,636 9,912
Stock-based compensation expense 1,888 2,369 3,682 4,179
Charge for fair value mark-up of acquired inventory  --  -- 4,065
Other 2,890 (2,140) 554 2,787
Changes in operating assets and liabilities    
Trade accounts receivable and notes receivable (13,362) (6,381) (25,974) 9,786
Inventories (1,559) 9,855 (6,594) 11,450
Accounts payable and accrued liabilities 4,568 (1,595) 17,644 (4,429)
Income taxes payable and refundable income taxes 1,090 9,692 6,448 3,840
Other 2,998 1,070 3,034 (3,858)
Net cash provided by (used in) operating activities 27,789 3,212 55,812 (6,332)
Investing activities:    
Acquisition of property and equipment (4,054) (2,459) (7,657) (10,399)
Other 3,986 186 4,012 236
Net cash used in investing activities (68) (2,273) (3,645) (10,163)
Financing activities:    
Payments on short-term borrowings and long-term debt  (96,428) (139,018) (230,143) (306,951)
Proceeds from short-term and long-term borrowings 71,070 125,000 184,358 296,510
Issuance of common stock 875 -- 1,657 570
Payments for debt issuance costs (148) (36) (148) (3,500)
Other 20 -- 20 --
Net cash used in financing activities (24,611) (14,054) (44,256) (13,371)
Effect of exchange rate changes on cash  (1,050) 1,731 (1,298) (1,101)
Increase (decrease) in cash and cash equivalents 2,060 (11,384) 6,613 (30,967)
Cash and cash equivalents at beginning of period 73,253 95,450 68,700 115,033
Cash and cash equivalents at end of period 75,313 84,066 75,313 84,066
      
Entegris, Inc. and Subsidiaries
Segment Information
(In thousands)
(Unaudited)
      
 Three Months EndedSix Months Ended
Net salesJuly 3, 2010April 3, 2010June 27, 2009July 3, 2010June 27, 2009
Contamination Control Solutions $103,660 $100,742 $47,541 $204,403 $81,828
Microenvironments 47,388 41,927 26,176 89,315 40,858
Specialty Materials 16,527 17,842 8,859 34,368 18,928
 Total net sales $167,575 $160,511 $82,576 $328,086 $141,614
      
      
 Three Months EndedSix Months Ended
Segment profit (loss)July 3, 2010April 3, 2010June 27, 2009July 3, 2010June 27, 2009
Contamination Control Solutions $28,614 $28,234 $2,830 $56,848 $(5,841)
Microenvironments 12,165 8,980 (273) 21,145 (10,468)
Specialty Materials 2,061 2,342 (1,047) 4,403 (430)
Total segment profit (loss) 42,840 39,556 1,510 82,396 (16,739)
Amortization of intangibles, amortization of fair value mark-up of acquired inventory sold and restructuring charges (3,364) (4,272) (10,383) (7,636) (24,063)
Unallocated expenses (13,041) (13,007) (11,308) (26,048) (22,601)
 Total operating income (loss) $26,435 $22,277 $(20,181) $48,712 $(63,403)
      
Entegris, Inc. and Subsidiaries
Reconciliation of GAAP to Adjusted Operating Income (Loss) and Adjusted EBITDA
(In thousands)
(Unaudited)
      
 Three Months EndedSix Months Ended
 July 3, 2010April 3, 2010June 27, 2009July 3, 2010June 27, 2009
Net sales $167,575 $160,511 $82,576 $328,086 $141,614
GAAP – Operating income (loss) $26,435 $22,277 $(20,181) $48,712 $(63,403)
Restructuring charges -- -- 5,452 -- 10,086
 Charge for fair value mark-up of acquired inventory sold -- -- -- -- 4,065
Amortization of intangible assets 3,364 4,272 4,931 7,636 9,912
Adjusted operating income (loss)  29,799 26,549 (9,798) 56,348 (39,340)
Depreciation 7,166 6,724 7,903 13,890 16,173
Adjusted EBITDA $36,965 $33,273 $(1,895) $70,238 $(23,167)
      
Adjusted operating margin 17.8% 16.5% (11.9)% 17.2% (27.8)%
Adjusted EBITDA – as a % of net sales 22.1% 20.7% (2.3)% 21.4% (16.4)%
      
Entegris, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Earnings (Loss) per Share
(In thousands)
(Unaudited)
      
 Three Months EndedSix Months Ended
 July 3, 2010April 3, 2010June 27, 2009July 3, 2010June 27, 2009
GAAP net income (loss) attributable to the Company $18,385 $16,550 $(22,492) $34,935 $(60,237)
Adjustments to net income (loss) attributable to the Company:     
Amortization of intangible assets 3,364 4,272 4,931 7,636 9,912
 Charge for fair value mark-up of acquired inventory sold -- -- -- -- 4,065
Accelerated write-off of debt issuance costs 890 -- -- 890 343
Gain on sale of equity investment (392) -- -- (392) --
Tax effect of adjustments to net income (loss) attributable to the Company (1,428) (1,567) -- (2,995) --
Non-GAAP net income (loss) attributable to the Company $20,819 $19,255 $(17,561) $40,074 $(45,917)
      
Diluted earnings (loss) per common share attributable to the Company: $0.14 $0.12 $(0.20) $0.26 $(0.54)
Effect of adjustments to net income (loss) attributable to the Company 0.02 0.02 0.04 0.04 0.13
Diluted non-GAAP earnings (loss) per common share attributable to the Company: $0.16 $0.15 $(0.16) $0.30 $(0.41)
CONTACT: Entegris, Inc.
         Steve Cantor, VP of Corporate Relations
         978-436-6750
         irelations@entegris.com

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