ATMI (ATMI) 10-Q 2007 Q2 Quarterly report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2007

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to                    

Commission file Number: 1-16239

ATMI, Inc.

(Exact name of registrant as specified in its charter)

Delaware	06-1481060
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
7 Commerce Drive, Danbury, CT	06810
(Address of principal executive offices)	(Zip Code)

203-794-1100

(Registrant’s telephone number, including area code)

     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. Yesþ      Noo

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filerþ      Accelerated filero      Non-accelerated filero

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yeso      Noþ

     The number of shares outstanding of the registrant’s common stock as of July 18, 2007 was 34,350,641.

ATMI, INC.
Quarterly Report on Form 10-Q
For the Quarter Ended June 30, 2007

TABLE OF CONTENTS

		Page
Part I — Financial Information
Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets		3
	Consolidated Statements of Income		4
	Consolidated Statements of Stockholders’ Equity		6
	Consolidated Statements of Cash Flows		7
	Notes to Consolidated Interim Financial Statements (Unaudited)		8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		16
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		24
Item 4.	Controls and Procedures		26
Part II – Other Information
Item 1.	Legal Proceedings		27
Item 1A.	Risk Factors		28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		28
Item 4.	Submission of Matters to a Vote of Security Holders		28
Item 5.	Other Information		29
Item 6.	Exhibits		30
Signatures			31
Exhibits			32
EX-31.1: CERTIFICATION
EX-31.2: CERTIFICATION
EX-32: CERTIFICATION

2

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

ATMI, Inc.

Consolidated Balance Sheets

(in thousands, except per share data)

	June 30,			December 31,
	2007			2006
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	63,217		$	73,596
Marketable securities, current portion		150,540			131,091
Accounts receivable, net of allowances of $666 and $666, respectively		60,004			55,867
Inventories, net		46,209			47,339
Income taxes receivable		1,104			3,500
Deferred income taxes		8,348			8,768
Prepaid expenses and other current assets		15,151			12,073
Total current assets		344,573			332,234
Property, plant, and equipment, net		95,111			92,719
Goodwill		13,738			13,734
Other intangibles, net		18,921			20,669
Marketable securities, less current portion		7,065			14,379
Other long-term assets		15,791			14,302
Total assets	$	495,199		$	488,037
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	20,751		$	20,144
Accrued liabilities		14,640			15,767
Accrued salaries and related benefits		7,411			11,813
Income taxes payable		1,704			1,186
Other current liabilities		4,470			1,962
Total current liabilities		48,976			50,872
Deferred income taxes, non-current		448			1,165
Other long-term liabilities		3,426			504
Commitments and contingencies (Note 5)
Stockholders’ equity:
Preferred stock, par value $.01 per share: 2,000 shares authorized; none issued		—			—
Common stock, par value $.01 per share: 100,000 shares authorized; 38,693 and 38,304 issued and 34,383 and 34,710 outstanding in 2007 and 2006, respectively		387			383
Additional paid-in capital		401,622			389,346
Treasury stock at cost, 4,310 and 3,594 shares in 2007 and 2006, respectively		(122,858	)		(100,305	)
Retained earnings		156,028			140,434
Accumulated other comprehensive income		7,170			5,638
Total stockholders’ equity		442,349			435,496
Total liabilities and stockholders’ equity	$	495,199		$	488,037

See accompanying notes.

3

ATMI, Inc.

Consolidated Statements of Income

(unaudited)

(in thousands, except per share data)

	Three Months Ended
	June 30,
	2007			2006
Revenues	$	92,432		$	82,484
Cost of revenues		47,247			40,542
Gross profit		45,185			41,942
Operating expenses:
Research and development		7,298			6,228
Selling, general and administrative		26,238			23,065
Total operating expenses		33,536			29,293
Operating income		11,649			12,649
Interest income		1,963			2,158
Other income (expense), net		(47	)		82
Income before income taxes		13,565			14,889
Provision for income taxes		4,294			4,839
Net income	$	9,271		$	10,050
Earnings per common share — basic	$	0.27		$	0.27
Weighted average shares outstanding — basic		34,455			36,762
Earnings per common share — diluted	$	0.26		$	0.27
Weighted average shares outstanding — diluted		35,369			37,502

See accompanying notes.

4

ATMI, Inc.

Consolidated Statements of Income

(unaudited)

(in thousands, except per share data)

	Six Months Ended
	June 30,
	2007			2006
Revenues	$	174,586		$	159,420
Cost of revenues		90,127			80,670
Gross profit		84,459			78,750
Operating expenses:
Research and development		14,544			12,357
Selling, general and administrative		50,790			45,107
Total operating expenses		65,334			57,464
Operating income		19,125			21,286
Interest income		3,809			4,288
Other income (expense), net		(2	)		322
Income before income taxes		22,932			25,896
Provision for income taxes		7,338			8,416
Net income	$	15,594		$	17,480
Earnings per common share — basic	$	0.45		$	0.47
Weighted average shares outstanding — basic		34,562			36,929
Earnings per common share — diluted	$	0.44		$	0.46
Weighted average shares outstanding — diluted		35,486			37,669

See accompanying notes.

5

ATMI, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited)
(in thousands)

											Accumulated
											Other
											Comprehens
			Additional								-ive
	Common		Paid-in			Treasury			Retained		Income
	Stock		Capital			Stock			Earnings		(Loss)		Total
Balance at December 31, 2006	$	383	$	389,346			($100,305	)	$	140,434	$	5,638	$	435,496
Issuance of 317 shares of common stock pursuant to the exercise of employee stock options and employee stock purchase plan shares		3		7,389			—			—		—		7,392
Purchase of 716 treasury shares		—		—			(22,553	)		—		—		(22,553	)
Equity-based compensation		—		4,261			—			—		—		4,261
Income tax benefits from equity-based compensation		—		627			—			—		—		627
Other		1		(1	)		—			—		—		—
Net income		—		—			—			15,594		—		15,594
Reclassification adjustment for realized loss on available-for-sale securities sold (net of tax benefit of $52)		—		—			—			—		89		89
Unrealized gain on available-for-sale securities (net of tax provision of $554)		—		—			—			—		943		943
Cumulative translation adjustment		—		—			—			—		500		500
Comprehensive income		—		—			—			—		—		17,126
Balance at June 30, 2007	$	387	$	401,622			($122,858	)	$	156,028	$	7,170	$	442,349

See accompanying notes.

6

ATMI, Inc.

Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

	Six Months Ended
	June 30,
	2007			2006
Operating activities
Net income	$	15,594		$	17,480
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		10,891			10,089
Provision for inventory obsolescence		361			496
Deferred income taxes		(930	)		(1,475	)
Income tax benefit from share-based payment arrangements		627			872
Excess tax benefit from share-based payment arrangements		(412	)		(326	)
Equity-based compensation expense		4,261			5,363
Loss from equity-method investees		319			41
Other		13			(89	)
Changes in operating assets and liabilities:
Accounts receivable		(4,131	)		(6,498	)
Inventories		1,504			(6,891	)
Other assets		(891	)		1,700
Accounts payable		876			3,679
Accrued expenses		(5,560	)		(3,307	)
Income taxes		2,907			(1,761	)
Other liabilities		5,438			(599	)
Net cash provided by operating activities		30,867			18,774
Investing activities
Capital expenditures		(13,742	)		(12,343	)
Equity-method investment		(1,362	)		—
Proceeds from the sale of cost-basis investments		—			297
Purchases of marketable securities		(131,718	)		(113,264	)
Proceeds from sales or maturities of marketable securities		121,287			158,394
Net cash (used for) provided by investing activities		(25,535	)		33,084
Financing activities
Excess tax benefit from share-based payment arrangements		412			326
Purchases of treasury stock		(22,872	)		(28,858	)
Proceeds from exercise of stock options		7,392			6,586
Other		(37	)		(32	)
Net cash used for financing activities		(15,105	)		(21,978	)
Effects of exchange rate changes on cash and cash equivalents		(606	)		831
Net (decrease) increase in cash and cash equivalents		(10,379	)		30,711
Cash and cash equivalents, beginning of period		73,596			30,951
Cash and cash equivalents, end of period	$	63,217		$	61,662

See accompanying notes.

7

ATMI, Inc.

Notes To Consolidated Interim Financial Statements

(unaudited)

1. Description of Business

     ATMI (the “Company”, “ATMI”, or “we”) believes it is a leading supplier of high performance materials, materials packaging and materials delivery systems used worldwide in the manufacture of microelectronic devices. ATMI targets both semiconductor and flat panel display manufacturers, whose products form the foundation of microelectronics technology rapidly proliferating through the information technology, automotive, communication and consumer products industries. The market for microelectronics devices is growing and continually changing, which drives demand for new products and technologies at lower cost. ATMI’s objective is to meet the demands of microelectronic manufacturers with solutions that maximize the efficiency of their manufacturing processes and minimize the time to ramp new processes and deliver new products. ATMI’s customers include many of the leading semiconductor and flat-panel display manufacturers in the world who target leading edge technologies.

2. Significant Accounting Policies and Other Information

Basis of Presentation

     The accompanying unaudited consolidated interim financial statements of ATMI have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X and do not include all of the financial information and disclosures required by GAAP in the United States.

     The accounts of ATMI and all of its subsidiaries are included in the unaudited consolidated interim financial statements. All significant intercompany accounts and transactions are eliminated in consolidation.

     In the opinion of the management of ATMI, the financial information contained herein has been prepared on the same basis as the audited consolidated financial statements contained in the Company’s Annual Report on Form 10-K, and includes adjustments (consisting of normal recurring adjustments) necessary to present fairly the unaudited quarterly results set forth herein. These unaudited consolidated interim financial statements should be read in conjunction with the December 31, 2006 audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K. The Company’s quarterly results are subject to fluctuation and, thus, the operating results for any quarter are not necessarily indicative of results to be expected for any future fiscal period.

     The consolidated Balance Sheet at December 31, 2006 has been derived from the audited financial statements at that date, but does not include all of the financial information and disclosures required by GAAP for complete financial statements.

8

Earnings Per Share

     The following computation reconciles the differences between the basic and diluted earnings per share presentations (in thousands, except per share data):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2007		2006		2007		2006
Numerator:
Net income	$	9,271	$	10,050	$	15,594	$	17,480
Denominator:
Denominator for basic earnings per share — weighted average shares		34,455		36,762		34,562		36,929
Dilutive effect of employee stock options		558		524		587		552
Dilutive effect of restricted stock		356		216		337		188
Denominator for diluted earnings per common share — weighted average shares		35,369		37,502		35,486		37,669
Earnings per common share-basic	$	0.27	$	0.27	$	0.45	$	0.47
Earnings per common share-assuming dilution	$	0.26	$	0.27	$	0.44	$	0.46

     The following potential common shares have been excluded from the calculation of weighted average shares outstanding, because their effect was considered to be antidilutive (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2007		2006		2007		2006
Employee stock options		333		687		325		551

Inventories, Net

     Inventories, net, are comprised of the following (in thousands):

	June 30,			December 31,
	2007			2006
Raw materials	$	12,883		$	13,727
Work in process		2,036			1,926
Finished goods		33,713			34,039
Gross inventories		48,632			49,692
Excess and obsolescence reserve		(2,423	)		(2,353	)
Inventories, net	$	46,209		$	47,339

Prepaid Expenses and Other Current Assets

     In June 2007, a fire at a contract manufacturer in Taiwan destroyed approximately $1.8 million of ATMI’s assets, including property, plant and equipment with a net book value of $1.6 million and inventories with a book value of $0.2 million. ATMI expects to be fully reimbursed

9

by its insurance carrier for these losses and as such, has recorded a receivable for this amount, which has been classified on the consolidated balance sheet under the caption prepaid expenses and other current assets, representing our current estimate of our insurance recovery. ATMI has supplied its customers in this region from its U.S. manufacturing operations, and expects to continue to supply its customers in this region from its U.S. manufacturing operations. Accordingly, our business is not expected to be materially impacted by the loss of these assets.

Income Taxes

     ATMI adopted the provisions of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement No. 109” (“FIN 48”) at the beginning of 2007. Adoption of FIN 48 on January 1, 2007 did not result in a cumulative effect adjustment to retained earnings. At January 1, 2007, we had $8.2 million of unrecognized tax benefits on the balance sheet, which, if recognized, would favorably affect the effective income tax rate in future periods.

     Our continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense. We had $0.6 million accrued for interest (net) and $0 accrued for penalties at December 31, 2006, which is included as a component of the $8.2 million unrecognized tax benefit noted above.

     We are currently under audit by the Internal Revenue Service for the 2004 and 2005 tax years. It is reasonably possible that the examination phase of the audit for these years may conclude in the next 12 months, and that the related unrecognized tax benefits for tax positions taken regarding previously filed tax returns may change from those recorded as liabilities for uncertain tax positions in our financial statements at January 1, 2007 and June 30, 2007. However, based on the status of the examination it is not possible to estimate the effect of any amount of such change to previously recorded uncertain tax positions.

     We have not provided for U.S. federal income and foreign withholding taxes on approximately $28.0 million of undistributed earnings from non-U.S. operations as of June 30, 2007, because such earnings are intended to be reinvested indefinitely outside of the United States.

10

Goodwill and Other Intangibles, Net

     Goodwill and Other intangibles, net, consisted of the following at June 30, 2007 and December 31, 2006 (in thousands):

			Patents &						Total Other
	Goodwill		Trademarks			Other			Intangibles
Gross amount as of December 31, 2006	$	13,734	$	27,570		$	5,969		$	33,539
Accumulated Amortization		—		(8,883	)		(3,987	)		(12,870	)
Balance as of December 31, 2006	$	13,734	$	18,687		$	1,982		$	20,669
Gross Amount as of June 30, 2007	$	13,738	$	27,525		$	5,970		$	33,495
Accumulated Amortization		—		(10,122	)		(4,452	)		(14,574	)
Balance as of June 30, 2007	$	13,738	$	17,403		$	1,518		$	18,921

     Changes in carrying amounts of Goodwill and Other intangibles for the six months ended June 30, 2007 were as follows (in thousands):

			Patents &						Total Other
	Goodwill		Trademarks			Other			Intangibles
Balance at December 31, 2006	$	13,734	$	18,687		$	1,982		$	20,669
Amortization		—		(1,239	)		(483	)		(1,722	)
Other, including foreign currency translation		4		(45	)		19			(26	)
Balance at June 30, 2007	$	13,738	$	17,403		$	1,518		$	18,921

11

Recently Issued Accounting Pronouncements

     In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities—Including an Amendment of FASB Statement No. 115.” This Standard allows entities to voluntarily choose, at specified election dates, to measure many financial assets and financial liabilities (as well as certain nonfinancial instruments that are similar to financial instruments) at fair value. The election is made on an instrument-by-instrument basis and is irrevocable. If the fair value option is elected for an instrument, the Statement specifies that all subsequent changes in fair value for that instrument shall be reported in earnings. SFAS No. 159 is effective for ATMI beginning on January 1, 2008. We do not expect that adoption of this new Standard will have a material effect on our financial position or results of operations.

     In June 2007, the FASB Emerging Issues Task Force (“EITF”) published Issue No. 07-3, “Accounting for Nonrefundable Advance Payments for Goods or Services to Be Used in Future Research and Development Activities.” The EITF reached a consensus that these payments made by an entity to third parties should be deferred and capitalized. Such amounts should be recognized as an expense as the related goods are delivered or the related services are performed. Entities should report the effects of applying this Issue as a change in accounting principle through a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption. EITF Issue No. 07-3 is effective for ATMI beginning on January 1, 2008. Earlier application is not permitted. We do not expect that adoption of this new Standard will have a material effect on our financial position or results of operations.

3. Equity-Based Compensation

     The following table shows the effect of compensation cost arising from equity-based payment arrangements recognized in the consolidated income statements (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2007		2006		2007		2006
Cost of revenues	$	187	$	211	$	139	$	494
Research and development		207		183		249		410
Selling, general and administrative		2,006		2,196		3,873		4,459
Total equity-based compensation expense		2,400		2,590		4,261		5,363
Benefit from income taxes		772		883		1,427		1,829
Net equity-based compensation expense	$	1,628	$	1,707	$	2,834	$	3,534

     The decrease in the first half of 2007 equity-based compensation expense, compared to the first half of 2006, is primarily attributable to true-ups associated with actual forfeitures and a resulting change in the forfeiture rate assumptions for future periods.

     There was no equity-based compensation cost that was capitalized.

12

Summary of Plans

     The following table shows the number of shares approved by shareholders for each equity-based compensation plan and the number of shares that remain available for equity awards at June 30, 2007 (in thousands):

	# of Shares		Shares
Stock Plan	Approved		Available
1997 Stock Plan (1)		900		18
1998 Stock Plan (1)		2,000		485
2000 Stock Plan (2)		2,000		301
2003 Stock Plan (2)		3,000		1,358
Employee Stock Purchase Plan (3)		1,000		305
Totals		8,900		2,467

(1)	Exercise prices for ISOs granted under this plan may not be less than 100 percent of the fair market value for the Company’s common stock on the date of grant. Exercise prices for non-qualified stock options granted under this plan may not be less than 50 percent of the fair market value for the Company’s common stock on the date of grant.
(2)	Exercise prices for ISOs and non-qualified stock options granted under this plan may not be less than 100 percent of the fair market value for the Company’s common stock on the date of grant.
(3)	Effective January 1, 2007, this plan was amended such that employees may purchase shares at 95 percent of the closing price on the day previous to the last day of each six-month offering period. Beginning January 1, 2007 this plan is no longer considered to be compensatory, as defined by SFAS No. 123(R).

     The Company issued 305,148 and 253,944 shares of common stock as a result of exercises by employees under its employee stock option plans in the first six months of 2007 and 2006, respectively. The Company issued 11,522 and 48,478 shares of common stock as a result of purchases by employees under the employee stock purchase plan in the first six months of 2007 and 2006, respectively. The company issued 233,282 and 216,130 shares of restricted stock, with only a time-based vesting requirement, in the first six months of 2007 and 2006, respectively. The Company repurchased 715,487 shares of common stock in the first six months of 2007.

     In the first quarter of 2007, the Company issued 92,041 shares of restricted stock to executive officers that include a performance-based vesting component as well as a time-based vesting component, as more fully described in the Company’s 2006 proxy statement. This change was made to ensure long-term incentive grants more closely align senior management compensation with the Company’s achievement of longer-term financial objectives that enhance stockholder value and to afford the executive officers the opportunity to earn higher awards for outstanding performance.

13

4. Comprehensive Income

     The components of comprehensive income are as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2007		2006		2007		2006
Net income	$	9,271	$	10,050	$	15,594	$	17,480
Cumulative translation adjustment		512		1,024		500		1,893
Unrealized gain (loss) on available-for-sale securities (net of tax provision (benefit) of $493 and $554 in 2007 and $130 and $(42) in 2006)		840		221		943		(72	)
Reclassification adjustment for realized losses on securities sold (net of tax benefit of $35 and $52 in 2007 and $85 and $112 in 2006) (1)		60		144		89		191
Comprehensive income	$	10,683	$	11,439	$	17,126	$	19,492

(1) Determined based on the specific identification method.

5. Commitments and Contingencies

     In July 2003, a subsidiary of ATMI filed suit against Praxair, Inc., the parent company of Praxair Electronics, in the United States District Court for the Southern District of New York, charging it with infringing two patents ATMI holds for certain gas storage and delivery systems. In April 2006, the New York District Court granted Praxair’s request for summary judgment that all asserted claims of ATMI’s two VAC patents are invalid, and that decision was upheld on appeal in April 2007.

     In December 2003, Praxair, Inc. and Praxair Technology, Inc. filed suit against ATMI, Inc. and Advanced Technology Materials, Inc. in the United States District Court for the District of Delaware alleging infringement of three patents owned by Praxair Technology, Inc. related to certain gas storage and delivery systems. Praxair is seeking damages and an injunction against ATMI marketing its VAC system. In 2005, the Delaware District Court invalidated one patent by summary judgment. In June 2007, the Delaware District Court held that the two remaining Praxair patents were unenforceable due to inequitable conduct. In July 2007, Praxair filed a notice of its intent to appeal. ATMI intends to continue to pursue a vigorous defense against Praxair’s claims. This positive outcome has triggered ATMI’s payment obligation pursuant to a limited contingent fee arrangement with certain outside counsel. As a result, the Company recognized $1.1 million of expense in the second quarter of 2007, which has been recorded in selling, general and administrative expenses.

     In 2005, a subsidiary of ATMI filed suit against Praxair, Inc. and Praxair GmbH in Dusseldorf, Germany, charging infringement of a patent ATMI holds for certain gas storage and delivery systems. Since the third quarter of 2006, a preliminary injunction against Praxair selling or supplying its UpTime system in Germany was in effect. In March 2007, ATMI voluntarily withdrew the preliminary injunction in view of customer concerns, among other considerations. The main infringement action in Germany is proceeding.

14

     In August 2006, a subsidiary of ATMI filed suit in Belgium against Praxair, Inc. and Belgian affiliates of Praxair, Inc. charging infringement of a patent ATMI holds for certain gas storage and delivery systems. A preliminary injunction is in place against the public marketing of the UpTime system worldwide and ATMI is seeking damages from Praxair for violation of that injunction. In addition, a preliminary injunction is in place against Praxair’s supply of UpTime in several European countries. The main infringement action in Belgium is proceeding.

     ATMI is, from time to time, subject to various legal actions, governmental audits, and proceedings relating to various matters incidental to its business including product liability and environmental claims. While the outcome of such matters cannot be predicted with certainty, in the opinion of management, after reviewing such matters and consulting with ATMI’s counsel and considering any applicable insurance or indemnifications, any liability which may ultimately be incurred, including the Praxair litigations, is not expected to materially affect ATMI’s consolidated financial position, cash flows or results of operations.

          During the first quarter of 2007, ATMI entered into a pledge agreement with Anji Microelectronics Co., Ltd. (“Anji”), a variable interest entity that ATMI accounts for using the equity method of accounting, for the issuance of a 3-year standby letter of credit up to $3.1 million in order to assist Anji in securing bank financing. The standby letter of credit was issued during the second quarter of 2007 and has been secured by Anji’s assets and additional equity interests in Anji’s operating subsidiaries. As a result of issuing the standby letter of credit, we recognized a $0.2 million liability, classified within the caption, “other long-term liabilities” on our consolidated balance sheet, which represents the fair value of the guarantee. As of June 30, 2007, Anji has not drawn down any amounts against the line of credit secured by the letter of credit.

15

Item 2.

Management’s Discussion and Analysis of Financial
Condition and Results of Operations
Three and Six Months Ended June 30, 2007 as Compared to 2006

Cautionary Statements Under the Private Securities Litigation Reform Act of 1995

     Disclosures included in this Form 10-Q contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may be identified by words such as “anticipate,” “plan,” “believe,” “seek,” “estimate,” “expect,” “could,” and words of similar meanings and include, without limitation, statements about the expected future business and financial performance of ATMI such as financial projections, expectations for demand and sales of new and existing products, research and development programs, market and technology opportunities, international trends, business strategies, business opportunities, objectives of management for future operations, microelectronics industry (including wafer start) growth, and trends in the markets in which the Company participates.

     Forward-looking statements are based on management’s current expectations and assumptions, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. These forward-looking statements are only present expectations as at the time of the filing of this Quarterly Report. Actual events or results may differ materially. Factors that could cause such a difference include:

• cyclicality in the microelectronics market;

• variation in profit margin performance caused by decreases in shipment volume, reductions in, or obsolescence of, inventory, inefficiencies in production facilities and shifts in product mix;

• availability of supply from a single or limited number of suppliers or upon suppliers in a single country;

• intensely competitive markets for advanced microelectronics materials, materials packaging and materials delivery systems;

• changes in export controls and other laws or policies, as well as the general political and economic conditions, exchange rate fluctuations, security risks, health conditions and possible disruptions in transportation networks, of the various countries in which we operate;

• potential natural or man-made disasters in locations where we, our customers, or our suppliers operate;

• loss, or significant curtailment, of purchases by one or more of our largest customers;

• inability to meet customer demand from quarter to quarter, causing us to incur expedited shipping costs or hold excess or obsolete inventory;

• taxation and audit by taxing authorities in eight different countries;

• intense competition in the microelectronics industry for highly skilled scientific, technical, managerial and marketing personnel;

• inability to continue to anticipate rapidly changing technologies and market trends, to enhance our existing products and processes, to develop and commercialize new products

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	and processes, and to expand through selected acquisitions of technologies or businesses or other strategic alliances;
•	inability to protect our competitive position via our patents, patent applications, and licensed technology in the United States and other countries; restrictions on our ability to make and sell our products as a result of competitors’ patents; costly and time-consuming patent litigation;
•	risk of product liability claims beyond existing insurance coverage levels resulting from the manufacture and sale of our products, which include thin film and other toxic materials;
•	governmental regulations related to the storage, use, and disposal of certain toxic or otherwise hazardous chemicals in our manufacturing, processing and research and development activities, as well as potential exposure for pre-existing contamination of our facilities, which may not be covered completely by existing indemnification arrangements; and
•	uncertainty regarding compliance matters and higher costs resulting from changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, and new regulations from the SEC.

These risks and uncertainties are described in more detail in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006, and other of our filings with the Securities and Exchange Commission (SEC) and in materials incorporated by reference in these filings. These cautionary statements are not meant to be an exhaustive discussion of risks that apply to companies like ATMI with broad international operations. Like other companies, we are susceptible to macroeconomic downturns in the United States or abroad that may affect the general economic climate and our performance and the performance of our customers. Similarly, the price of our common stock is subject to volatility due to fluctuations in general market conditions, differences in our results of operations from estimates and projections generated by the investment community, and other factors beyond our control. ATMI undertakes no obligation to update publicly or review any forward-looking statements, whether as a result of new information, future developments or otherwise.

Company Overview

     ATMI believes it is a leading supplier of high performance materials, materials packaging and materials delivery systems used worldwide in the manufacture of microelectronic devices. ATMI targets both semiconductor and flat panel display manufacturers, whose products form the foundation of microelectronics technology rapidly proliferating through the information technology, automotive, communication and consumer products industries. The market for microelectronics devices is growing and continually changing, which drives demand for new products and technologies at lower cost. ATMI’s objective is to meet the demands of microelectronic manufacturers with solutions that maximize the efficiency of their manufacturing processes and minimize the time to ramp new processes and deliver new products. ATMI’s customers include many of the leading semiconductor and flat-panel display manufacturers in the world who target leading edge technologies.

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Results of Operations

Executive Summary

     During the second quarter of fiscal 2007, ATMI’s revenues grew by 12.1 percent compared to the second quarter of 2006. Our gross margin decreased to 48.9 percent in the second quarter of 2007 from 50.8 percent in the second quarter of 2006. Research and development expenses (“R&D”) increased 17.2 percent in the second quarter of 2007 compared to the second quarter of 2006. As a percent of revenues, R&D increased slightly to 7.9 percent in the second quarter of 2007 from 7.6 percent in the second quarter of 2006. Selling, general and administrative expenses (“SG&A”) increased by 13.8 percent in the second quarter of 2007 vs. the second quarter of 2006. Second quarter 2007 SG&A includes a $1.1 million contingent legal fee as a result of a favorable outcome to ATMI in the Delaware patent infringement suit brought by Praxair. As a percent of revenues, SG&A increased slightly to 28.4 percent in the second quarter of 2007 compared to 28.0 percent in the same period a year ago. Excluding the contingent legal fee, SG&A was 27.2 percent of revenues in the second quarter of 2007. Net income for the quarter decreased 7.8 percent to $9.3 million ($0.26 per diluted share) compared to $10.1 million ($0.27 per diluted share) in the second quarter of 2006.

     In the first six months of fiscal 2007, ATMI’s revenues grew by 9.5 percent compared to the same six month period of 2006. Our gross margin decreased to 48.4 percent in the first six months of 2007 compared to 49.4 percent in the first six months of 2006. R&D increased 17.7 percent in the first half of 2007 compared to the first half of 2006. As a percent of revenues, R&D increased to 8.3 percent in the first half of 2007 compared to 7.8 percent in the first half of 2006. SG&A increased 12.6 percent in the first six months of 2007 compared to the first six months of 2006. As a percent of revenues, SG&A increased to 29.1 percent from 28.3 percent in the first six months of 2006. Excluding the contingent legal fee discussed above, SG&A was 28.5 percent of revenues in the first half of 2007. Net income for the first half of 2007 decreased 10.8 percent to $15.6 million ($0.44 per diluted share) compared to $17.5 million ($0.46 per diluted share) in the first half of 2006.

     Going forward, business and market uncertainties may affect results. See “Cautionary Statements Under the Private Securities Litigation Reform Act of 1995” above and Management’s Discussion and Analysis in our Annual Report on Form 10-K for the fiscal year ended December 31, 2006 for a full discussion of the key factors which affect our business and operating results.

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     The following table shows the effect of compensation cost arising from equity-based payment arrangements on the consolidated statements of income (in thousands):

	Three Months				Six Months
	Ended				Ended
	June 30,				June 30,
	2007		2006		2007		2006
Cost of revenues	$	187	$	211	$	139	$	494
Research and development		207		183		249		410
Selling, general and administrative		2,006		2,196		3,873		4,459
Total equity-based compensation expense		2,400		2,590		4,261		5,363
Benefit from income taxes		772		883		1,427		1,829
Net equity-based compensation expense	$	1,628	$	1,707	$	2,834	$	3,534

Revenues

	2007		2006		% Change
Quarter ended June 30,	$	92,432	$	82,484		12.1	%
Six Months Ended June 30,	$	174,586	$	159,420		9.5	%

     Revenues increased 12.1 percent to $92.4 million in the second quarter of 2007 from $82.5 million in the second quarter of 2006. Sales in our wafer-start driven high performance materials and materials delivery product lines increased 13.7 percent in the second quarter of 2007 compared to the second quarter of 2006, due primarily to growth in wafer starts during this period. Sales in our materials packaging product lines decreased 4.3 percent in the second quarter of 2007 compared to the same period of 2006, primarily because of softer demand in the flat panel display market and a lingering effect in the quarter related to the manufacturing defect discussed in our March 31, 2007 Form 10-Q.

     Revenues increased 9.5 percent to $174.6 million in the first six months of 2007 from $159.4 million in the first six months of 2006. Sales in our wafer-start driven high performance materials and materials delivery product lines increased 13.6 percent in the first half of 2007 compared to the first half of 2006, due primarily to growth in wafer starts during this period. Sales in our materials packaging product lines decreased 12.8 percent in the first half of 2007 compared to the same period of 2006, primarily because of softer demand in the flat panel display market and the effect of a manufacturing defect that became apparent under certain use conditions by certain customers during the first quarter of 2007, which was subsequently resolved in the second quarter of 2007.

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Gross Profit

	2007					2006
	Amount		% of Sales			Amount		% of Sales
Quarter ended June 30	$	45,185		48.9	%	$	41,942		50.8	%
Six Months Ended June 30	$	84,459		48.4	%	$	78,750		49.4	%

     Gross profit increased 7.7 percent to $45.2 million in the second quarter of 2007 from $41.9 million in the second quarter of 2006. Our gross margin percentage decreased during this time period from 50.8 percent in 2006 to 48.9 percent in 2007. This decrease is due primarily to lower revenue volumes in our materials packaging product lines due to softness in the flat panel display market and also due to the effects of a manufacturing defect that was discovered in a materials packaging product line during the first quarter of 2007. The Company recognized an additional $0.3 million of product warranty costs in the second quarter of 2007 related to this product defect.

     Gross profit increased 7.2 percent to $84.5 million in the first six months of 2007 from $78.8 million in the first six months of 2006. Our gross margin percentage decreased during this time period from 49.4 percent in 2006 to 48.4 percent in 2007, which was due primarily to lower revenue volumes in our materials packaging product lines due to softness in the flat panel display market and also due to the manufacturing defect discussed above. The Company recognized $0.6 million of product warranty costs in the first half of 2007 as a result of the product defect.

Research and Development Expenses

	2007					2006
	Amount		% of Sales			Amount		% of Sales
Quarter ended June 30	$	7,298		7.9	%	$	6,228		7.6	%
Six Months Ended June 30	$	14,544		8.3	%	$	12,357		7.8	%

     R&D increased 17.2 percent to $7.3 million in the second quarter of 2007 from $6.2 million in the second quarter of 2006. The increase in R&D spending was primarily attributable to spending associated with the development of new products such as RegenSi and AutoClean.

     R&D expenses increased 17.7 percent to $14.5 million in the first six months of 2007 from $12.4 million in the first six months of 2006. The increase in R&D spending was primarily attributable to collaborative research activities with a strategic investment partner related to cleans chemistries and the development of new products such as RegenSi and AutoClean. R&D as a percent of revenues in 2007 is in line with our long-term spending targets and reflects our continued focus on the development of new products and technologies.

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Selling, General and Administrative Expenses

	2007					2006
	Amount		% of Sales			Amount		% of Sales
Quarter ended June 30	$	26,238		28.4	%	$	23,065		28.0	%
Six Months Ended June 30	$	50,790		29.1	%	$	45,107		28.3	%

     SG&A increased 13.8 percent to $26.2 million in the second quarter of 2007 from $23.1 million in the second quarter of 2006. SG&A was 28.4 percent of revenues in the second quarter of 2007 vs. 28.0 percent of revenues in the second quarter of 2006. SG&A has grown primarily due to increased employee-related costs (e.g., salaries, fringe benefits, travel, etc.) to support our longer-term growth strategy, litigation costs, and depreciation on facilities. The second quarter of 2007 includes a $1.1 million contingent legal fee as a result of a favorable outcome in the Delaware patent infringement suit brought by Praxair. Excluding the contingent legal fee, SG&A was 27.2 percent of revenues in the second quarter of 2007.

     SG&A increased 12.6 percent to $50.8 million in the first six months of 2007 from $45.1 million in the first six months of 2006. SG&A was 29.1 percent of revenues in the first six months of 2007 vs. 28.3 percent of revenues in the same 2006 period. Despite a $0.7 million reduction in equity-based compensation expense due to true ups associated with forfeitures and a resulting change in the forfeiture rate estimates for future periods, SG&A has grown in the first half of 2007 compared to 2006 primarily due to increased employee-related costs (e.g., salaries, fringe benefits, travel, etc.), litigation costs, and depreciation on facilities. Excluding the contingent legal fee discussed above, SG&A was 28.5 percent of revenues in the second quarter of 2007.

Operating Income

	2007					2006
	Amount		% of Sales			Amount		% of Sales
Quarter ended June 30	$	11,649		12.6	%	$	12,649		15.3	%
Six Months Ended June 30	$	19,125		11.0	%	$	21,286		13.4	%

     Operating income decreased to $11.6 million in the second quarter of 2007 (representing 12.6 percent of revenues) from $12.6 million in the second quarter of 2006 (representing 15.3 percent of revenues). Operating income decreased to $19.1 million in the first six months of 2007 (representing 11.0 percent of revenues) from $21.3 million in the first six months of 2006 (representing 13.4 percent of revenues). These changes are from a variety of factors, as noted above.

Interest Income

     Interest income decreased to $2.0 million in the second quarter of 2007 from $2.2 million in the second quarter of 2006 and decreased to $3.8 million in the first six months of 2007 from $4.3 million in the first six months of 2006. The decreases are primarily due to lower invested cash and marketable securities balances resulting from cash used to repurchase shares of the Company’s common stock and a shift to tax-exempt securities.

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Provision for Income Taxes

	Effective Rate
	2007			2006
Quarter ended June 30		31.7	%		32.5	%
Six Months Ended June 30		32.0	%		32.5	%

     Overall, our effective income tax rates are affected by the change in the mix of income attributed to the various countries in which we do business and changes in the levels of tax-exempt interest income. In 2006 our effective tax rate was also affected by extra-territorial income (“ETI”) exclusion benefits. As of June 30, 2007, the Company had a net deferred tax asset on the balance sheet of $8.0 million, primarily due to temporary differences, state tax credit carry forwards, and state net operating loss carry forwards.

Liquidity and Capital Resources

     We assess liquidity in terms of our ability to generate cash to fund our operating and investing activities. Of particular importance to the management of liquidity are cash flows generated by operating activities, cash used for capital expenditures, cash used to repurchase common stock, and cash generated from the sale of common stock.

     We manage our worldwide cash requirements considering the cost effectiveness of the funds available from the many subsidiaries through which we conduct our business. We believe that our existing cash and cash equivalents and marketable securities positions at this time are sufficient to meet current and anticipated requirements for the foreseeable future. We do not rely on debt or off-balance sheet financing arrangements for our liquidity needs.

     We continue to invest in research and development to provide future sources of revenue through the development of new products, as well as through additional uses for existing products. We consider R&D and the development of new products and technologies an integral part of our growth strategy and a core competence of the Company. Likewise, we continue to make capital expenditures in order to expand and modernize manufacturing facilities around the globe. Additionally, management considers, on a continuing basis, potential acquisitions of strategic technologies and businesses complementary to the Company’s current business.

     The Company’s Board of Directors has approved two share repurchase programs for purchases up to a total of $225.0 million of ATMI common stock. Share repurchases are made from time to time in open market transactions at prevailing market prices or in privately negotiated transactions. Management determines the timing and amount of purchases under the programs based upon market conditions or other factors. The programs do not require the Company to purchase any specific number or amount of shares and may be suspended or reinstated at any time at the Company’s discretion and without notice. As of June 30, 2007, $102.9 million remains available for purchase under the programs.

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     A summary of our Cash Flows follows (in thousands):

	Six Months Ended
	June 30,
	2007			2006
Cash provided by (used for):
Operating Activities	$	30,867		$	18,774
Investing Activities		(25,535	)		33,084
Financing Activities		(15,105	)		(21,978	)
Effects of exchange rate changes on cash		(606	)		831

     Net cash provided by operating activities increased by $12,093 due primarily to:

• Increase in cash provided by changes in inventories of $8,395 as a result of the Company’s focus on better supply chain utilization

• Increase in cash provided by other operating or working capital accounts of $5,425

• Decrease in non-cash equity based compensation expense of $1,102

• Increase in non-cash depreciation and amortization expense of $802

     Net cash used by investing activities increased by $58,619 due primarily to:

• Increase in cash used to purchase marketable securities of $55,561 in excess of proceeds from sales and maturities of marketable securities

• Increase in capital spending of $1,399 due primarily to timing

• Increase in cash paid for acquisitions of equity-basis investments of $1,362

     Net cash used for financing activities decreased by $6,873 due primarily to:

• Decrease in treasury stock purchases of $5,986

• Increase of $805 in proceeds from stock option exercises in 2007

Critical Accounting Estimates

     Except for income taxes, there have been no material changes from the methodology applied by management for critical accounting estimates previously disclosed in ATMI’s most recent Annual Report on Form 10-K. The methodology applied to management’s estimate for income taxes has changed due to the adoption of a new accounting pronouncement as described below.

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Income Taxes

     In July 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement No. 109” (“FIN 48”), which became effective for ATMI beginning in 2007. FIN 48 addressed the determination of how tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under FIN 48, the Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. The impact of the Company’s reassessment of its tax positions in accordance with FIN 48 did not have a material effect on the results of operations, financial condition or liquidity.

     For additional information regarding the adoption of FIN 48, see Note 2 under the heading, “Income Taxes.” For further discussion of the Company’s critical accounting estimates related to income taxes, see the 2006 Annual Report on Form 10-K.

Off-Balance Sheet Arrangements and Contractual Obligations

     The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on its financial condition, changes in financial condition, results of operations, liquidity, or capital resources.

     During the second quarter of 2007, ATMI issued a $3.1 million standby letter of credit on behalf of Anji Microelectronics Co., Ltd. (“Anji”), a variable interest entity that ATMI accounts for using the equity method of accounting, in order to assist Anji in securing bank financing. The standby letter of credit is secured by Anji’s assets and additional equity interests in Anji’s operating subsidiaries. The standby letter of credit was issued during the second quarter of 2007 and has been secured by Anji’s assets and additional equity interests in Anji’s operating subsidiaries. As a result of issuing the standby letter of credit, we recognized a $0.2 million liability, classified within the caption, “other long-term liabilities” on our consolidated balance sheet, which represents the fair value of the guarantee.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

     Interest Rate Risk.As of June 30, 2007, the Company’s cash and cash equivalents and marketable securities included money market securities, corporate and municipal bond obligations and commercial paper. As of June 30, 2007, an increase of 100 basis points in interest rates would reduce the fair value of the Company’s marketable securities portfolio by approximately $0.4 million. Conversely, a reduction of 100 basis points in interest rates would increase the fair value of the Company’s marketable securities portfolio by approximately $0.6 million.

     Foreign Currency Exchange Risk.A substantial portion of the Company’s sales are denominated in U.S. dollars and as a result, the Company has relatively minimal exposure to foreign currency exchange risk with respect to sales made. Approximately 9 percent of the

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Company’s revenues for the six-month period ended June 30, 2007 were denominated in Japanese Yen (“JPY”), but the product is sourced in U.S. dollars. Management periodically reviews the Company’s exposure to currency fluctuations. This exposure may change over time as business practices evolve and could have a material impact on the Company’s financial results in the future. The Company currently utilizes forward exchange contracts to hedge certain currency exposures, but does not use any other derivative financial instruments for trading or speculative purposes. At June 30, 2007, ATMI had $13.1 million notional amount of foreign exchange contracts, which are being used to hedge recorded foreign denominated assets, $11.1 million of which will be settled in JPY. Holding other variables constant, if there were a 10 percent adverse change in foreign exchange rates for the JPY, the fair market value of the JPY contracts outstanding at June 30, 2007 would decrease by approximately $1.2 million (but would be expected to be fully offset by foreign exchange gains on the amounts being hedged). The effect of an immediate 10 percent change in other foreign exchange rates would not be expected to have a material impact on the Company’s future operating results or cash flows.

     Changes in Market Risk. There have been no material quantitative changes in market risk exposure between December 31, 2006 and June 30, 2007.

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Item 4. Controls and Procedures

     Our management, with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Form 10-Q. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon our evaluation, our CEO and CFO concluded that, as of the end of the period covered by this Form 10-Q, our disclosure controls and procedures are effective in that they provide reasonable assurance that the information we are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

     We routinely review our internal control over financial reporting and from time to time make changes intended to enhance the effectiveness of our internal control over financial reporting. There have been no changes to our internal control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act during the second quarter of fiscal 2007 that we believe materially affected, or will be reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

     In July 2003, a subsidiary of ATMI filed suit against Praxair, Inc., the parent company of Praxair Electronics, in the United States District Court for the Southern District of New York, charging it with infringing two patents ATMI holds for certain gas storage and delivery systems. In April 2006, the New York District Court granted Praxair’s request for summary judgment that all asserted claims of ATMI’s two VAC patents are invalid, and that decision was upheld on appeal in April 2007.

     In December 2003, Praxair, Inc. and Praxair Technology, Inc. filed suit against ATMI, Inc. and Advanced Technology Materials, Inc. in the United States District Court for the District of Delaware alleging infringement of three patents owned by Praxair Technology, Inc. related to certain gas storage and delivery systems. Praxair is seeking damages and an injunction against ATMI marketing its VAC system. In 2005, the Delaware District Court invalidated one patent by summary judgment. In June 2007, the Delaware District Court held that the two remaining Praxair patents were unenforceable due to inequitable conduct. In July 2007, Praxair filed a notice of their intent to appeal. ATMI intends to continue to pursue a vigorous defense against Praxair’s claims. This positive outcome has triggered ATMI’s payment obligation pursuant to a limited contingent fee arrangement with certain outside counsel. As a result, the Company recognized $1.1 million of expense in the second quarter of 2007 in selling, general and administrative expenses.

     In 2005, a subsidiary of ATMI filed suit against Praxair, Inc. and Praxair GmbH in Dusseldorf, Germany, charging infringement of a patent ATMI holds for certain gas storage and delivery systems. Since the third quarter of 2006, a preliminary injunction against Praxair selling or supplying its UpTime system in Germany was in effect. In March 2007, ATMI voluntarily withdrew the preliminary injunction in view of customer concerns, among other considerations. The main infringement action in Germany is proceeding.

     In August 2006, a subsidiary of ATMI filed suit in Belgium against Praxair, Inc. and Belgian affiliates of Praxair, Inc. charging infringement of a patent ATMI holds for certain gas storage and delivery systems. A preliminary injunction is in place against the public marketing of the UpTime system worldwide and ATMI is seeking damages from Praxair for violation of that injunction. In addition, a preliminary injunction is in place against Praxair’s supply of UpTime in several European countries. The main infringement action in Belgium is proceeding.

     ATMI is, from time to time, subject to various legal actions, governmental audits, and proceedings relating to various matters incidental to its business including product liability and environmental claims. While the outcome of such matters cannot be predicted with certainty, in the opinion of management, after reviewing such matters and consulting with ATMI’s counsel and considering any applicable insurance or indemnifications, any liability which may ultimately be incurred, including the Praxair litigations, is not expected to materially affect ATMI’s consolidated financial position, cash flows or results of operations.

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Item 1A. Risk Factors

     There have been no material changes to our Risk Factors, which are described in more detail in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006, and other of our filings with the Securities and Exchange Commission and in materials incorporated by reference in these filings. See “Cautionary Statements Under the Private Securities Litigation Reform Act of 1995” within this document.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

     Purchases of Equity Securities — The following table lists all repurchases (both open market and private transactions) during the three months ended June 30, 2007 of any of our securities registered under Section 12 of the Exchange Act, by or on behalf of us, or any affiliated purchaser.

					Total Number		Maximum
					of Shares		Dollar Value of
					Purchased as		Shares that May
					Part of		Yet Be
	Total Number of		Average		Publicly		Purchased
	Shares		Price Paid		Announced		Under the
Period (1)	Repurchased (2)		per Share		Programs (3)		Programs
April 1-30, 2007		100,400	$	31.05		100,400	$	110,720,000
May 1-31, 2007		134,488	$	30.65		132,899	$	106,598,000
June 1-30, 2007		118,813	$	30.82		118,813	$	102,936,000
Total		353,701	$	30.82		352,112	$	102,936,000

(1)	There were no other repurchases of our equity securities by or on behalf of us or any affiliated purchaser during the fiscal quarter ended June 30, 2007.
(2)	Share repurchases are shown on a trade-date basis. At June 30, 2007, $0.5 million related to these share repurchases had not yet been paid by the Company because the settlement dates were in July 2007. Includes 1,589 shares repurchased during May 2007, in open-market transactions, to satisfy employee minimum tax withholding obligations on vesting of restricted stock.
(3)	In October 2005, the Company’s Board of Directors approved a share repurchase program for up to $75.0 million of ATMI common stock, which was completed on January 9, 2007. In August 2006, the Company’s Board of Directors approved a second share repurchase program for an additional $150.0 million. Share repurchases are made from time to time in open market transactions at prevailing market prices or in privately negotiated transactions. Management determines the timing and amount of purchases under the programs based upon market conditions or other factors. The programs do not require the Company to purchase any specific number or amount of shares and may be suspended or reinstated at any time at the Company’s discretion and without notice.

Item 4. Submission of Matters to a Vote of Security Holders

     We held our annual meeting of stockholders on May 22, 2007. As of April 16, 2007, the record date for the meeting, 35,267,266 shares of ATMI common stock were outstanding. A quorum consisting of 33,207,300 shares of common stock were present or represented at the meeting. The following actions were approved at the meeting: (1) three Class I directors were elected for a term expiring at the annual meeting of stockholders in 2010; and (2) the

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appointment of Ernst & Young LLP as the Company’s Independent Registered Public Accounting Firm for the fiscal year ending December 31, 2007 was ratified.

     The table below represents the votes tabulated for the election of the three Class I directors:

Director	In Favor		Withheld
Robert S. Hillas		32,334,930		872,370
Frederick C. Flynn, Jr.		32,963,460		243,840
Cheryl C. Shavers		33,071,298		136,002

     The table below represents the votes tabulated for the ratification of Ernst & Young LLP as the Company’s Independent Registered Public Accounting Firm for the fiscal year ending December 31, 2007:

Votes For	Votes Against	Abstentions
33,169,967	31,713	5,260

Item 5. Other Information

     None.

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Item 6. Exhibits

     (a) Exhibits

31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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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.

	ATMI, Inc.
July 25, 2007
	By	/s/ Douglas A. Neugold
		Douglas A. Neugold
		President and Chief Executive Officer
	By	/s/ Daniel P. Sharkey
		Daniel P. Sharkey
		Executive Vice President, Chief Financial
		Officer and Treasurer (Chief Accounting Officer)

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