UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 or [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended November 24, 2001 Commission File Number 000-30789 ----------------- --------- ENTEGRIS, INC. -------------- (Exact name of registrant as specified in charter) Minnesota 41-1941551 ---------------------------------------------- --------------------- (State or other jurisdiction of incorporation) (IRS Employer ID No.) 3500 Lyman Boulevard, Chaska, Minnesota 55318 --------------------------------------------- (Address of Principal Executive Offices) Registrant's Telephone Number (952) 556-3131 -------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the latest practicable date. Class Outstanding at December 31, 2001 - ----------------------------- ------------------------------------- Common Stock, $0.01 Par Value 69,898,307
ENTEGRIS, INC., INC. AND SUBSIDIARIES FORM 10-Q TABLE OF CONTENTS FOR THE QUARTER ENDED NOVEMBER 24, 2001 Description Page ----------- ---- PART I - ------ Item 1. Unaudited Consolidated Financial Statements Consolidated Balance Sheets as of November 24, 2001 and August 25, 2001 3 Consolidated Statements of Operations for the Three Months Ended November 24, 2001 and November 25, 2000 4 Consolidated Statements of Cash Flows for the Three Months Ended November 24, 2001 and November 25, 2000 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Item 3. Quantitative and Qualitative Disclosures About Market Risk 12 PART II Other Information Item 6. Exhibits 13 2
Item 1. Financial Statements - ---------------------------- ENTEGRIS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands) (Unaudited) November 24, August 25, 2001 2001 ---------------- ---------------- ASSETS Current assets Cash and cash equivalents $ 65,572 $ 74,451 Short-term investments 47,539 36,628 Trade accounts receivable, net of allowance for doubtful accounts 34,046 36,303 Trade accounts receivable due from affiliates 2,369 7,171 Inventories 43,872 47,202 Deferred tax assets and refundable income taxes 9,446 10,424 Other current assets 4,735 7,858 ---------------- ---------------- Total current assets 207,579 220,037 ---------------- ---------------- Property, plant and equipment, net 102,563 109,131 Other assets Investments 11,469 12,295 Intangible assets, net of amortization 50,893 51,766 Other 3,285 2,449 ---------------- ---------------- Total assets $375,789 $395,678 ================ ================ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Current maturities of long-term debt $ 1,848 $ 2,238 Short-term borrowings 10,070 8,813 Accounts payable 10,405 16,572 Accrued liabilities 25,935 33,630 ---------------- ---------------- Total current liabilities 48,258 61,253 ---------------- ---------------- Long-term debt, less current maturities 13,541 13,101 Deferred tax liabilities 3,661 3,950 Minority interest in subsidiaries 4,814 5,067 Commitments and contingencies - - Shareholders' equity Common stock, $0.01 par value; 200,000,000 authorized; issued and outstanding shares: 69,767,615 and 69,729,821, respectively 698 697 Additional paid-in capital 121,479 121,449 Retained earnings 182,240 188,156 Accumulated other comprehensive income 1,098 2,005 ---------------- ---------------- Total shareholders' equity 305,515 312,307 ---------------- ---------------- Total liabilities and shareholders' equity $375,789 $395,678 ================ ================ See accompanying notes to consolidated financial statements. 3
ENTEGRIS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share data) (Unaudited) Three Months Ended --------------------------------------- November 24, November 25, 2001 2000 ----------------- ------------------ Sales to non-affiliates $40,502 $ 68,602 Sales to affiliates 5,350 34,037 ----------------- ------------------ Net sales 45,852 102,639 Cost of sales 30,657 50,087 ----------------- ------------------ Gross profit 15,195 52,552 Selling, general and administrative expenses 17,359 21,235 Nonrecurring charges 4,001 - Engineering, research and development expenses 4,312 3,533 ----------------- ------------------ Operating (loss) profit (10,477) 27,784 Interest income, net (451) (1,459) Other expense (income), net (289) 80 ----------------- ------------------ (Loss) income before income taxes and other items below (9,737) 29,163 Income tax (benefit) expense (3,700) 11,081 Equity in net income of affiliates - (738) Minority interest in subsidiaries' net (loss) income (121) 708 ----------------- ------------------ Net (loss) income $(5,916) $ 18,112 ================= ================== (Loss) earnings per common share: Basic $(0.08) $0.26 Diluted $(0.08) $0.25 Weighted shares outstanding: Basic 69,742 68,362 Diluted 69,742 72,838 See accompanying notes to consolidated financial statements. 4
ENTEGRIS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) Three months ended ------------------------------------- November 24, November 25, 2001 2000 ---------------- ---------------- OPERATING ACTIVITIES Net (loss) income $(5,916) $18,112 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 6,871 6,037 Asset impairment 2,300 750 Provision for doubtful accounts (194) 550 Provision for deferred income taxes (287) 4 Equity in net income of affiliates - (738) Loss on sale of property and equipment 265 44 Minority interest in subsidiaries' net (loss) income (121) 708 Changes in operating assets and liabilities: Trade accounts receivable 2,450 (2,973) Trade accounts receivable due from affiliates 4,802 (6,071) Inventories 3,330 (5,380) Accounts payable and accrued liabilities (13,862) (1,293) Other current assets 3,122 (788) Accrued income taxes and refundable income taxes 978 8,947 Other (458) (723) ---------------- ---------------- Net cash provided by operating activities 3,280 17,186 ---------------- ---------------- INVESTING ACTIVITIES Acquisition of property and equipment (2,632) (4,006) Purchases of intangible assets (135) (83) Proceeds from sales of property and equipment 236 117 Purchases of short-term investments (30,326) - Maturities of short-term investments 19,415 - Other 45 1,506 ---------------- ---------------- Net cash used in investing activities (13,397) (2,466) ---------------- ---------------- FINANCING ACTIVITIES Principal payments on short-term borrowings and long-term debt (3,462) (536) Proceeds from short-term borrowings and long-term debt 4,768 226 Issuance of common stock 32 212 Repurchase of common stock - (190) ----------------- ----------------- Net cash provided by (used in) financing activities 1,338 (288) ----------------- ----------------- Effect of exchange rate changes on cash and cash equivalents (100) (197) ----------------- ----------------- (Decrease) increase in cash and cash equivalents (8,879) 14,235 Cash and cash equivalents at beginning of period 74,451 102,973 ----------------- ----------------- Cash and cash equivalents at end of period $65,572 $117,208 ================= ================= See accompanying notes to consolidated financial statements. 5
ENTEGRIS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands) 1. Summary of Significant Accounting Policies ------------------------------------------ In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly, in conformity with accounting principles generally accepted in the United States of America, the financial position as of November 24, 2001 and August 25, 2001, the results of operations for the three months ended November 24, 2001 and November 25, 2000 and cash flows for the three months ended November 24, 2001 and November 25, 2000. Certain prior year amounts have been reclassified to conform to the current period presentation. The financial statements and notes are presented as permitted by Form 10-Q and do not contain certain information included in the Company's annual consolidated financial statements and notes. The information included in this Form 10-Q should be read in conjunction with Management's Discussion and Analysis and financial statements and notes thereto included in the Company's Form 10-K for the year ended August 25, 2001. The results of operations for the three months ended November 24, 2001 and November 25, 2000 are not necessarily indicative of the results to be expected for the full year. The Company's fiscal year ends on the last Saturday of August. In fiscal 2002, the Company's interim quarters end on November 24, 2001, March 2, 2002 and June 1, 2002. 2. (Loss) earnings per share ------------------------- The following table presents a reconciliation of the denominators used in the computation of basic and diluted (loss) earnings per share. Three Months Ended ---------------------------- November 24, November 25, 2001 2000 ------------ ------------ Basic (loss) earnings per share-weighted common shares outstanding 69,742,000 68,362,000 Weighted common shares assumed upon exercise of stock options - 4,476,000 ---------- ---------- Diluted (loss) earnings per share-weighted common shares and common shares equivalent outstanding 69,742,000 72,838,000 ========== ========== The effect of the inclusion of stock options in the first quarter of fiscal 2002 is anti-dilutive. 3. Inventories ----------- Inventories consist of the following (in thousands): November 24, 2001 August 25, 2001 ----------------- --------------- Raw materials $13,982 $15,167 Work-in process 1,695 1,451 Finished goods 27,597 29,971 Supplies 598 613 ------- ------- Total inventories $43,872 $47,202 ======= ======= 6
4. Comprehensive (Loss) Income --------------------------- For the quarters ended November 24, 2001 and November 25, 2000 net (loss) income, items of other comprehensive (loss) income and comprehensive (loss) income are as follows (in thousands): Quarter ended ---------------------------- November 24, November 25, 2001 2000 ------------ ------------ Net (loss) income $(5,916) $18,112 Items of other comprehensive (loss) income Foreign currency translation (376) (601) Unrealized loss in marketable securities (531) (343) ------- ------- Comprehensive (loss) income $(6,823) $17,168 ======= ======= 5. Recently Issued Accounting Pronouncements ----------------------------------------- In June 2001, the Financial Accounting Standards Board issued SFAS No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets. Major provisions of these statements are as follows: all business combinations must now use the purchase method of accounting, the pooling of interest method of accounting is now prohibited; intangible assets acquired in a business combination must be recorded separately from goodwill if they arise from contractual or other legal rights or are separable from the acquired entity and can be sold, transferred, licensed, rented or exchanged, either individually or as a part of a related contract, asset or liability; goodwill and intangible assets with indefinite lives are not amortized, but tested for impairment annually, except in certain circumstances, and whenever there is an impairment indicator; all acquired goodwill must be assigned to reporting units for purposes of impairment testing and segment reporting; upon adoption of SFAS 142, goodwill is no longer subject to amortization. The Company adopted SFAS No. 141 and SFAS No. 142 as of August 26, 2001. As required by SFAS 142, the Company is in the process of performing an impairment test on goodwill as of the adoption date. Thereafter, the Company will perform impairment tests annually and whenever events or circumstances occur indicating that goodwill or other intangible assets might be impaired. As of August 26, 2001, the Company is no longer amortizing goodwill. Goodwill amortization expense was $0.2 million net of income taxes for the quarter ended November 25, 2000. The Company estimates that goodwill amortization expense would have been approximately $0.6 million net of income taxes in the first quarter of fiscal 2002. The following table presents a reconciliation of net (loss) income and (loss) earnings per share adjusted for the exclusion of goodwill, net of income taxes (in thousands, except per share figures): Three months ended ---------------------------------------- November 24, November 25, November 27, Net income (loss): 2001 2000 1999 - ------------------ ------------ ------------ ------------ Reported net (loss) income $ (5,916) $18,112 $12,054 Add: Goodwill amortization, net of tax - 192 183 -------- ------- ------- Adjusted net (loss) income $ (5,916) $18,304 $12,237 ======== ======= ======= Three months ended ---------------------------------------- November 24, November 25, November 27, Basic (loss) earnings per share: 2001 2000 1999 - -------------------------------- ------------ ------------ ------------ Reported basic (loss) earnings per share $ (0.08) $0.26 $(0.56) Add: Goodwill amortization, net of tax - - - ------- ----- ------ Adjusted basic (loss) earnings per share $ (0.08) $0.26 $(0.56) ======= ===== ====== 7
Three months ended ---------------------------------------- November 24, November 25, November 27, Diluted (loss) earnings per share: 2001 2000 1999 - ---------------------------------- ------------ ------------ ------------ Reported basic (loss) earnings per share $ (0.08) $0.25 $(0.56) Add: Goodwill amortization, net of tax - - - ------- ----- ------ Adjusted diluted (loss) earnings per share $ (0.08) $0.25 $(0.56) ======= ===== ====== As of August 25, 2001, goodwill amounted to $20.1 million. There were no additions during the first quarter of fiscal 2002. Other intangible assets, which include patents and other identifiable intangible assets of $30.8 million as of November 24, 2001, are being amortized over their useful lives and are as follows (in thousands): As of November 24, 2001 ---------------------------------- Gross carrying Accumulated Amortized intangible assets: amount amortization - ------------------------------------ -------------- ------------ Patents $ 14,446 $ 2,197 Unpatented technology 9,844 461 Employment and noncompete agreements 6,211 264 Other 3,657 446 -------- ------- $ 34,158 $ 3,368 ======== ======= Aggregate amortization expense for the quarter ended November 24, 2001 amounted to $1.0 million. Estimated amortization expense for the fiscal years 2002 to 2006 is $3.8 million, $3.8 million, $3.7 million, $3.7 million and $3.6 million, respectively. In October 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. While SFAS No. 144 supersedes SFAS No.121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, it retains many of the fundamental provisions of that Statement. SFAS No. 144 becomes effective for fiscal years beginning after December 15, 2001. The Company is evaluating SFAS No. 144 to determine the impact on its financial condition and results of operations. 8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ----------------------------------------------------------- Quarter Ended November 24, 2001 Compared to Quarter Ended November 25, 2000 The following table compares quarterly results with year-ago results, as a percentage of sales, for each caption. Three Months Ended ---------------------------- November 24, November 25, 2001 2000 ------------ ------------ Net sales 100.0 100.0 Cost of sales 66.9 48.8 ----- ----- Gross profit 33.1 51.2 Selling, general and administrative expenses 37.9 20.7 Nonrecurring charges 8.7 - Engineering, research and development expenses 9.4 3.4 ----- ----- Operating (loss) profit (22.8) 27.1 Interest income net (1.0) (1.4) Other expense (income), net (0.6) 0.1 ----- ----- (Loss) income before income taxes and other items below (21.2) 28.4 Income tax (benefit) expense (8.1) 10.8 Equity in net earnings of affiliated companies 0.0 (0.7) Minority interest in subsidiaries' net (loss) income (0.3) 0.7 ----- ----- Net (loss) income (12.9) 17.6 ===== ===== Effective tax rate 38.0 38.0 Net sales. Net sales were $45.9 million in the first quarter of fiscal 2002, down 55% compared to $102.6 million in the first quarter of fiscal 2001. The sharp decline reflected the decrease in product sales associated with the severe downturn in the semiconductor industry, which began in the second half of fiscal 2001. Lower revenues were recorded in all geographic regions and across nearly all product lines. Sales for the Company's Fluid Handling Group which are closely tied to industry capital spending cycles, declined 76% from first quarter 2001. The Company's Microelectronics Group also saw a sales decline of 44% from one year ago. International sales accounted for approximately 51% of net sales in the first quarter of fiscal 2002 compared to 48% in the first quarter of fiscal 2001. While the business environment continues to be uncertain, the Company expects sales for the second quarter of fiscal 2002 to be about flat with first quarter fiscal 2002 levels Gross profit. Gross profit in the first quarter of fiscal 2002 dropped by $37.4 million to $15.2 million, a decrease of 71% from the $52.6 million reported in the first quarter of fiscal 2001. The gross margin for the fiscal 2002 first quarter declined to 33.1% compared to 51.2% a year ago. Gross margin and gross profit declines were reported by both domestic and international operations. The drops in fiscal 2002 figures were primarily caused by the lower sales levels noted above, which resulted in lower production levels. Partly offsetting the declines was the reversal of profit-sharing accruals of $0.4 million (of a Company total of $0.8 million, the remainder being included in selling, general and administrative, and engineering, research and development expenses) made earlier in calendar 2001while the Company generated net earnings. The first quarter of fiscal 2001 also included an asset impairment charge of $0.8 million mainly for asset write-offs of molds that were determined to have no future use. Selling, general and administrative expenses. Selling, general and administrative (SG&A) expenses decreased $3.8 million, or 18%, to $17.4 million in the first quarter of fiscal 2002 from $21.2 million in the first quarter of fiscal 2001. The decrease was due to the significantly lower 9
bonus and charitable contribution accruals, which are largely based on company profitability. SG&A costs, as a percent of net sales, increased to 37.9% from 20.7%. Nonrecurring charges. The first quarter of 2002 includes a nonrecurring charge of $4.0 million in connection with the closures of the Company's Chanhassen, MN and one of its Chaska, MN plants. The charge included $1.5 million in termination costs related to a workforce reduction of 230 employees and $2.3 million for estimated losses for asset impairment. Engineering, research and development expenses. Engineering, research and development expenses were $4.3 million in the first quarter of fiscal 2002, up 18% compared to $3.5 million in the first quarter of fiscal 2001. Engineering, research and development costs, as a percent of net sales, increased to 9.4% from 3.4% reflecting both higher ER&D expenditures and lower net sales. Interest income, net. Net interest income of $0.5 million in the first quarter of fiscal 2002 compared $1.5 million in the year-ago period. The change reflects the lower rates of interest on marketable securities and a shift in the mix of investments to tax exempt securities. Other expense (income), net. Other income was $0.3 million in the first quarter of fiscal 2002 compared to other expense of $80 thousand in the first quarter a year ago. The change mainly reflects the foreign currency gains associated with forward foreign currency contracts. Income tax (benefit) expense. An income tax benefit of $3.7 million in the first quarter of fiscal 2002 compared to income tax expense of $11.1 million reported a year earlier, reflected the Company's pre-tax operating results. The effective tax rate was 38% in the first quarter of both fiscal 2002 and fiscal 2001. Equity in net income of affiliates. Equity in the net income of affiliates was zero in the first quarter of fiscal 2002 compared to $0.7 million in the first quarter a year earlier. This reflects the change in accounting for the Company's investment in Metron, which was recorded under the equity method of accounting through the second quarter of fiscal 2001 at which time the Company began accounting for its remaining investment as an available-for-sale security, as our ownership percentage was reduced. Net (loss) income. The Company recorded a net loss of $5.9 million, or $0.08 per diluted share, in the first quarter of fiscal 2002, compared to net income of $18.1 million, or $0.25 per diluted share, in the year-ago period. Liquidity and Capital Resources Operating activities. Cash flow provided by operating activities totaled $3.3 million in the first quarter of fiscal 2002. Noncash charges, such as depreciation and amortization of $6.9 million, as well as decreases in inventory of $3.3 million and in accounts receivable of $7.3 million were partly offset by the Company's net loss and a $13.9 reduction in payable and accruals. Working capital at November 24, 2001 stood at $159.3 million, including $113.1 million in cash, cash equivalents and short-term investments. Investing activities. Cash flow used in investing activities totaled $13.4 million in the first quarter of fiscal 2002. Acquisition of property and equipment totaled $2.6 million and included additions of manufacturing equipment and the upgrading and integration of information systems. The Company expects capital expenditures of approximately $25 to $30 million during fiscal 2002, consisting mainly of spending on manufacturing equipment and information systems. The company had purchases, net of maturities of short-term investments of $10.9 million during the quarter. Financing activities. Cash provided by financing activities totaled $1.3 million during the first quarter of fiscal 2002. The company made scheduled payments $3.5 million on borrowings, while proceeds from short-term borrowings were $4.8 million. 10
As of November 24, 2001, our sources of available funds comprised $113.1 million in cash, cash equivalents, short-term investments plus various credit facilities. We have unsecured revolving commitments with two commercial banks with aggregate borrowing capacity of $30 million, with no borrowings outstanding at November 24, 2001. We also have lines of credit, equivalent to an aggregate of approximately $9.2 million with six international banks, which provide for borrowings of the European Euro, Malaysian ringgits and Japanese yen for our overseas subsidiaries. Borrowings outstanding on these lines of credit were $4.1 million at November 24, 2001. The company also owed $5.9 million in other short-term bank borrowings not subject to formal credit agreements. At November 24, 2001, the Company's shareholders' equity stood at $305.5 million. Book value per share was $4.38, down from $4.48 per share at the end of fiscal 2001. The quarter's net loss accounted for the decrease. The company believes its cash and cash equivalents, cash flow from operations and available credit facilities will be sufficient to meet our working capital and investment requirements for the next twelve months. However, future growth, including potential acquisitions, may require additional funding, and from time to time the Company may need to raise capital through additional equity or debt financing. Recently Issued Accounting Pronouncements In June 2001, the Financial Accounting Standards Board issued SFAS No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets. Major provisions of these statements are as follows: all business combinations must now use the purchase method of accounting, the pooling of interest method of accounting is now prohibited; intangible assets acquired in a business combination must be recorded separately from goodwill if they arise from contractual or other legal rights or are separable from the acquired entity and can be sold, transferred, licensed, rented or exchanged, either individually or as a part of a related contract, asset or liability; goodwill and intangible assets with indefinite lives are not amortized, but tested for impairment annually, except in certain circumstances, and whenever there is an impairment indicator; all acquired goodwill must be assigned to reporting units for purposes of impairment testing and segment reporting; upon adoption of SFAS 142, goodwill is no longer subject to amortization. The Company adopted the provisions of these statements as of August 26, 2001. As required by SFAS 142, the Company is in the process of performing an impairment test on goodwill as of the adoption date. Thereafter, the Company will perform impairment tests annually and whenever events or circumstances occur indicating that goodwill or other intangible assets might be impaired. As of August 26, 2001, the Company is no longer amortizing goodwill. Goodwill amortization expense was $0.2 million net of income taxes for the quarter ended November 25, 2000. The Company estimates that goodwill amortization expense would have been approximately $0.6 million net of income taxes in the first quarter of fiscal 2002. As of August 25, 2001, goodwill amounted to $20.3 million. There were no additions during the first quarter of fiscal 2002. Other intangible assets, which include patents and other identifiable intangible assets of $30.6 million as of November 24, 2001, are being amortized over their useful lives. In October 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. While SFAS No. 144 supersedes SFAS No.121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, it retains many of the fundamental provisions of that Statement. SFAS No. 144 becomes effective for fiscal years beginning after December 15, 2001. The Company is evaluating SFAS No. 144 to determine the impact on its financial condition and results of operations. 11
Cautionary Statements This report contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may include forward-looking statements which reflect the Company's current views with respect to future events and financial performance. The words "believe," "expect," "anticipate," "intends," "estimate," "forecast," "project," "should" and similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All forecasts and projections in this document are "forward-looking statements," and are based on management's current expectations of the Company's near-term results, based on current information available pertaining to the Company, including the risk factors identified in the Company's Annual Report on Form 10-K for the fiscal year ended August 25, 2001. Item 3: Quantitative and Qualitative Disclosures About Market Risk - ------------------------------------------------------------------ Entegris's principal market risks are sensitivities to interest rates and foreign currency exchange rates. The Company's current exposure to interest rate fluctuations is not significant. Most of its outstanding debt at November 24, 2001 carried fixed rates of interest. All of the Company's cash equivalents and short-term investments are debt instruments with remaining maturities of 12 months or less. The Company uses derivative financial instruments to manage foreign currency exchange rate risk associated with the sale of products from the United States when such sales are denominated in currencies other than the U.S. dollar. The cash flows and earnings of foreign-based operations are also subject to fluctuations in foreign exchange rates. A hypothetical 10% change in the foreign currency exchange rates would potentially increase or decrease net income by approximately $1 million. 12
PART II OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K - ---------------------------------------- (a) Exhibits: None 13
CONFORMED COPY SIGNATURES 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. Date: January 8, 2002 /s/ James E. Dauwalter ------------------------------------- James E. Dauwalter President and Chief Executive Officer Date: January 8, 2002 /s/ John D. Villas ------------------------------------- John D. Villas Executive Vice President and Chief Financial Officer 14