UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT PURSUANT

TO SECTIONS 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) February 12, 2009

 

 

ENTEGRIS, INC.

(Exact name of registrant as Specified in its Charter)

 

 

Delaware

(State or Other Jurisdiction of Incorporation or Organization)

 

000-30789		41-1941551
(Commission File Number)		(I.R.S. Employer Identification No.)

 

3500 Lyman Boulevard, Chaska, MN		55318
(Address of principal executive offices)		(Zip Code)

(952) 556-3131

(Registrant’s telephone number, including area code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 2.02.

Results of Operations and Financial Condition

On February 12, 2009, the registrant issued a press release to announce results for the fourth quarter of 2009, ended December 31, 2009. A copy of this press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

In accordance with General Instructions B.2 of Form 8-K, the information in this Item 2.02 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing. The information set forth herein will not be deemed an admission as to the materiality of any information required to be disclosed solely to satisfy the requirements of Regulation FD.

 

Item 9.01.

Financial Statements and Exhibits.

 

(d)

Exhibits

 

Exhibit 99.1		Press Release, dated February 12, 2009

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

		ENTEGRIS, INC.
Dated: February 12, 2009		By		/s/ Gregory B. Graves
				Gregory B. Graves,
				Executive Vice President & Chief Financial Officer

 

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Exhibit 99.1

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 (Minneapolis), Minn., February 12, 2009 – 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 our 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.

 

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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.

 

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Entegris, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

		Three months ended												Twelve months ended
		Dec. 31, 2008				Sept. 27, 2008				Dec. 31, 2007				Dec. 31, 2008				Dec. 31, 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

 

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Entegris, Inc. and Subsidiaries

GAAP to Non-GAAP Reconciliation of Statement of Operations

(In thousands, except per share data)

(Unaudited)

 

		Three months ended December 31, 2008												Twelve months ended December 31, 2008
		U.S. GAAP				Adjustments				Non- GAAP				U.S. GAAP				Adjustments				Non- GAAP
Net sales		$	112,736			$	—			$	112,736			$	554,699			$	—			$	554,699
Cost of sales(a)			80,291				(7,801	)			72,490				342,981				(13,519	)			329,462
Restructuring charges			203				—				203				203				—				203
Gross profit			32,242				7,801				40,043				211,515				13,519				225,034
Selling, general and administrative expenses (b)			31,731				(596	)			31,135				147,531				(596	)			146,935
Engineering, research and development expenses			8,939				—				8,939				40,086				—				40,086
Amortization of intangible assets			5,088				—				5,088				19,585				—				19,585
Impairment of goodwill (c)			93,989				(93,989	)			—				473,799				(473,799	)			—
Restructuring charges			7,091				—				7,091				10,423				—				10,423
Operating (loss) income			(114,596	)			102,386				(12,210	)			(479,909	)			487,914				8,005
Interest expense, net			336				—				336				1,018				—				1,018
Other expense, net (d)			13,663				(10,000	)			3,663				15,486				(11,102	)			4,384
(Loss) income before income taxes			(128,595	)			112,386				(16,209	)			(496,413	)			499,016				2,603
Income tax (benefit) expense (e)			3,473				(3,970	)			(497	)			19,785				(15,830	)			3,955
Equity in net loss of affiliates			234				—				234				283				—				283
(Loss) income from continuing operations			(132,302	)			116,356				(15,946	)			(516,481	)			514,846				(1,635	)
Income (loss) from discontinued operations, net of taxes			504				—				504				(521	)			—				(521	)
Net (loss) income		($	131,798	)		$	116,356			($	15,442	)		$	(517,002	)		$	514,846			$	(2,156	)
Basic (loss) income per common share:
Continuing operations		$	(1.18	)		$	1.04			$	(0.14	)		$	(4.58	)		$	4.57			$	(0.01	)
Discontinued operations		$	0.00				—			$	0.00			$	(0.00	)			—			$	(0.00	)
Net (loss) income per common share		$	(1.18	)		$	1.04			$	(0.14	)		$	(4.59	)		$	4.57			$	(0.02	)
Diluted (loss) income per common share:
Continuing operations		$	(1.18	)		$	1.04			$	(0.14	)		$	(4.58	)		$	4.57			$	(0.01	)
Discontinued operations		$	0.00				—			$	0.00			$	(0.00	)			—			$	(0.00	)
Net (loss) income per common share		$	(1.18	)		$	1.04			$	(0.14	)		$	(4.59	)		$	4.57			$	(0.02	)
Weighted average shares outstanding:
Basic			111,787				111,787				111,787				112,653				112,653				112,653
Diluted			111,787				111,787				111,787				112,653				112,653				112,653

 

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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.

 

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Entegris, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

		Dec. 31, 2008			Dec. 31, 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

 

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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

### END ###

 

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