News Release Details
Entegris Reports Results for Fiscal Fourth Quarter and Year
CHASKA, Minn.--(BUSINESS WIRE)--Oct. 12, 2005--Entegris, Inc. (Nasdaq:ENTG), a global leader in materials integrity management, today reported its financial results for the fiscal fourth quarter and year ended August 27, 2005. Reflecting the company's merger with Mykrolis Corporation on August 6, 2005, sales for the fourth quarter were $104.7 million, which included Mykrolis sales of $13.7 million for the three weeks from the date of the merger, and which compared to $86.9 million in the third quarter and $99.5 million in the fourth quarter a year ago.
Primarily reflecting the impact of the merger, the company in the fourth quarter reported a net loss of $7.9 million, or $0.09 per diluted share. EBITDA (a measure defined as earnings before interest, taxes, depreciation, and amortization) was negative $8.2 million, which included integration expense of $11.5 million, merger-related and other restructuring charges of $9.2 million, and stock-based compensation of $2.0 million.
For the fiscal year ended August 27, 2005, sales were $367.1 million, versus $346.8 million reported in the prior year. Net income was $9.4 million and earnings per diluted share were $0.12 versus $0.32 in the prior year. EBITDA for fiscal 2005 was $29.6 million, which included integration expense of $12.3 million, merger-related and other restructuring charges of $9.6 million, and stock-based compensation of $3.6 million.
Gideon Argov, Entegris' president and chief executive officer, said: "This is a period of transition for Entegris. Our reported results reflected a number of factors including costs and expenses associated with the merger, a stable business environment, and the residual impact of three unprofitable product lines recently designated for divestiture. Demand for our products was stable, reflecting continued high fab utilization rates at our customers and generally steady capital spending trends in the industry."
Argov added, "With the merger transaction completed, we are now executing the steps needed to grow the company and drive our future performance. We expect to have the integration process substantially completed by the middle of calendar 2006 and to have in place the majority of the annual merger-related cost savings of approximately $20 million.
"With a strong balance sheet, true global scale and scope, and a strategic focus as a leader in materials integrity management, we believe we have a solid platform to grow faster than the semiconductor market over the long-term and to maximize our profitability and build shareholder value," Argov concluded.
Outlook
For the first (November) fiscal quarter of 2006, the company expects sales from continuing operations to be $145 million to $155 million, versus $150 million in the August quarter on a comparable pro forma basis. EBITDA is anticipated to be in the range of $24 million to $29 million, before stock-based compensation, merger-related and other restructuring charges, and integration expenses.
Fourth-Quarter Results Conference Call Details
Entegris will hold a conference call to discuss its results for the fourth quarter on Wednesday, October 12, 2005, at 9:00 a.m. ET (6:00 a.m. PT). Participants should use passcode 3159842 and dial one of the following numbers: 800-289-0572 (for U.S. callers) or 913-981-5543 (for callers outside the U.S.). A replay of the call can be accessed at 888-203-1112 (passcode: 3159842). The conference call will also be webcast on the investor relations portion of the Entegris web site at www.entegris.com.
EBITDA Discussion
The financial results discussed in this release included references to a measure called "EBITDA," which is defined as earnings before interest, taxes, depreciation, and amortization. We believe this measure provides relevant and useful information to our investors since it best approximates the company's ongoing operating results and as such is one of the measures used by management to assess the company's financial results and cash flow. We intend to continue to use this measure in the future, particularly since mergers and acquisitions will be a key part of our strategy. EBITDA should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with accounting principles generally accepted in the U.S. EBITDA, as we have defined it, may not be comparable to similarly titled measures reported by other companies.
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. The actual results of Entegris could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (i) risks associated with the challenges of integration, restructuring, manufacturing transfers, and achieving anticipated synergies associated with the merger of Entegris with Mykrolis; (ii) adverse changes in general economic or market conditions; (iii) delays or reductions in semiconductor industry spending; (iv) the transition to new products, the uncertainty of customer acceptance of new product offerings, and rapid technological and market change; (v) insufficient, excess or obsolete inventory; (vi) competitive factors, including but not limited to pricing pressures; (vii) the risks described under the headings "Risks Relating to our Business and Industry," "Risks Related to our Separation from Millipore" and "Risks Related to Securities Markets and Ownership of Our Common Stock" in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations of the Mykrolis Corporation Annual Report on Form 10-K for the fiscal year ended December 31, 2004, and under Item 2, Management's Discussion and Analysis of Results of Operations and Financial Condition of the Mykrolis Corporation Form 10-Q reports for the first fiscal quarter of 2005; (viii) the risks described under the heading "Risk Factors" in Item 1, Business of the Entegris, Inc. Annual Report on Form 10-K for the fiscal year ended August 28, 2004; and (ix) 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.
About Entegris
Entegris is the global leader in materials integrity management -- purifying, protecting and transporting critical materials used in high technology products, processes and services. Entegris and Mykrolis completed their merger to create the new Entegris in August 2005. The merged company delivers technology, product and service solutions to 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, Japan, Malaysia, Singapore, South Korea and Taiwan. Additional information can be found at www.entegris.com.
Entegris, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
ENTEGRIS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in thousands, except per share amounts)
Three months Twelve months
ended ended
------------------------------------
Aug. 27 Aug. 28 Aug. 27 Aug. 28
2005 2004 2005 2004
------------------------------------
Net sales $104,704 $ 99,494 $367,100 $346,764
Cost of sales 71,912 55,052 227,601 195,861
------------------------------------
Gross profit 32,792 44,442 139,499 150,903
Selling, general and
administrative expenses 42,799 26,262 115,089 96,176
Engineering, research and
development expenses 6,363 5,361 20,400 20,128
------------------------------------
Operating (loss) income (16,370) 12,819 4,010 34,599
Interest income, net (1,102) (165) (2,538) (283)
Other (income) expense, net (282) 216 (2,119) (1,035)
------------------------------------
(Loss) income before income taxes
and other items below (14,986) 12,768 8,667 35,917
Income tax (benefit) expense (7,145) 3,838 (973) 11,134
Equity in net loss (income) of
affiliates 90 (5) 247 13
------------------------------------
Net (loss) income $ (7,931)$ 8,935 $ 9,393 $ 24,770
====================================
(Loss) earnings per common share:
Basic: $ (0.09)$ 0.12 $ 0.12 $ 0.34
Diluted: $ (0.09)$ 0.12 $ 0.12 $ 0.32
Weighted shares outstanding:
Basic 88,432 73,304 77,137 72,957
Diluted 88,432 76,060 79,328 76,220
Entegris, Inc.
Reconciliation of EBITDA to GAAP Statements of Operations
(In thousands, except per share data)
(Amounts in thousands, except per share amounts)
Three months ended Twelve months ended
Aug. 27 Aug. 28 Aug. 27 Aug. 28
2005 2004 2005 2004
Net sales $104,704 $99,494 $367,100 $346,764
Cost of sales 71,912 55,052 227,601 195,861
--------------------------------------
Gross profit 32,792 44,442 139,499 150,903
Selling, general and
administrative expenses 42,799 26,262 115,089 96,176
Engineering, research and
development expenses 6,363 5,361 20,400 20,128
--------------------------------------
Operating (loss) income $(16,370) $12,819 $ 4,010 $ 34,599
Add: Depreciation 5,815 4,835 19,441 20,082
Add: Amortization (a) 2,355 1,505 6,173 5,410
--------------------------------------
EBITDA (b) $ (8,200) $19,159 $ 29,624 $ 60,091
Notes to Reconciliation of EBITDA to GAAP Statements of Operations:
a) Total amortization includes $1.1 million of amortization related
to the purchase accounting for the August 6, 2005 merger with
Mykrolis. The balance of total amortization relates to the pre-merger
amortization of intangibles, including patents and trademarks.
b) EBITDA is before stock-based compensation, merger-related and
other restructuring charges, and integration expense.
Table of stock-based compensation, merger-related and other
restructuring charges, and integration expense:
Three months ended Twelve months ended
Aug. 27 Aug. 28 Aug. 27 Aug. 28
2005 2004 2005 2004
Merger-related and other
restructuring (1) 9,169 --- 9,549 ---
Integration expense (2) 11,468 --- 12,265 ---
Stock-based compensation (3) 1,990 --- 3,582 ---
1) Merger-related and other restructuring includes $5.9 million
related to the write-up of Mykrolis inventory to fair market value as
required by purchase accounting. Also included are costs associated
with asset realignment and other restructuring programs unrelated to
the company's merger with Mykrolis to realign certain production
activities at the company's facilities in Chaska, Minnesota, Colorado
Springs, Colorado, Gilroy, California and Kulim, Malaysia. These costs
were $3.3 million in the fourth quarter of fiscal 2005 and $3.6
million for the fiscal year ending August 27, 2005.
2) Integration planning and execution expenses include severance
costs and consulting fees associated with the August 6, 2005 merger
with Mykrolis.
3) Stock-based compensation expense primarily relates to the
issuance of restricted stock, excluding amounts otherwise included in
integration expense.
Entegris, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
ENTEGRIS, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
August August
27, 2005 28, 2004
---------------------
ASSETS
Cash, cash equivalents and short-term
investments $ 279,657 $133,180
Accounts receivable 122,304 74,525
Inventories 91,798 45,186
Deferred tax assets 24,320 8,178
Other current assets and assets held for sale 27,476 3,546
---------------------
Total current assets 545,555 264,615
Property, plant and equipment, net 125,950 97,634
Investments 6,926 7,146
Intangible assets 479,963 95,040
Deferred tax asset - non-current 36,337 ---
Other assets 6,769 2,611
---------------------
Total assets $1,201,500 $467,046
=====================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current maturities of long-term debt $ 1,565 $ 1,492
Short-term debt 3,629 6,477
Accounts payable 29,607 15,768
Accrued liabilities 70,898 34,554
Income tax payable 34,694 5,604
---------------------
Total current liabilities 140,393 63,895
Long-term debt, less current maturities 22,148 18,898
Other non-current liabilities 15,550 1,024
Deferred tax liabilities --- 11,044
Shareholders' equity 1,023,409 372,185
---------------------
Total liabilities and shareholders' equity $1,201,500 $467,046
=====================
CONTACT: Entegris, Inc., Chaska
Investor Relations:
Steven Cantor, 978-436-6750
irelations@entegris.com
SOURCE: Entegris, Inc.