ATMI (ATMI) 10-Q 2007 Q3 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 September 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

     At September 30, 2007 there were 33,712,224 shares of common stock outstanding.

ATMI, INC.
Quarterly Report on Form 10-Q
For the Quarter Ended September 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 5.	Other Information		28
Item 6.	Exhibits		29
Signatures			30
Exhibits			31
EX-31.1: CERTIFICATION
EX-31.2: CERTIFICATION
EX-32: CERTIFICATIONS

2

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

ATMI, Inc.
Consolidated Balance Sheets
(in thousands, except per share data)

	September 30,			December 31,
	2007			2006
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	71,586		$	73,596
Marketable securities, current portion		143,104			131,091
Accounts receivable, net of allowances of $669 and $666, respectively		55,045			55,867
Inventories, net		48,378			47,339
Income taxes receivable		1,104			3,500
Deferred income taxes		6,949			8,768
Prepaid expenses and other current assets		16,318			12,073
Total current assets		342,484			332,234
Property, plant, and equipment, net		102,515			92,719
Goodwill		13,744			13,734
Other intangibles, net		18,143			20,669
Marketable securities, less current portion		—			14,379
Other long-term assets		15,446			14,302
Total assets	$	492,332		$	488,037
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	22,810		$	20,144
Accrued liabilities		13,362			15,767
Accrued salaries and related benefits		8,024			11,813
Income taxes payable		1,360			1,186
Other current liabilities		5,625			1,962
Total current liabilities		51,181			50,872
Deferred income taxes, non-current		244			1,165
Other long-term liabilities		3,700			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; 38,827 and 38,304 issued and 33,712 and 34,710 outstanding in 2007 and 2006, respectively		388			383
Additional paid-in capital		406,720			389,346
Treasury stock at cost, 5,115 and 3,594 shares in 2007 and 2006, respectively		(146,865	)		(100,305	)
Retained earnings		167,355			140,434
Accumulated other comprehensive income		9,609			5,638
Total stockholders’ equity		437,207			435,496
Total liabilities and stockholders’ equity	$	492,332		$	488,037

See accompanying notes.

3

ATMI, Inc.
Consolidated Statements of Income
(unaudited)
(in thousands, except per share data)

	Three Months Ended
	September 30,
	2007			2006
Revenues	$	91,131		$	82,124
Cost of revenues		45,158			40,216
Gross profit		45,973			41,908
Operating expenses:
Research and development		7,225			6,673
Selling, general and administrative		23,617			22,775
Total operating expenses		30,842			29,448
Operating income		15,131			12,460
Interest income		1,956			2,121
Other expense, net		(195	)		(32	)
Income before income taxes		16,892			14,549
Provision for income taxes		5,565			3,195
Net income	$	11,327			11,354
Earnings per common share — basic	$	0.33		$	0.32
Weighted average shares outstanding — basic		34,145			35,585
Earnings per common share — diluted	$	0.32		$	0.31
Weighted average shares outstanding — diluted		35,044			36,314

See accompanying notes.

4

ATMI, Inc.
Consolidated Statements of Income
(unaudited)
(in thousands, except per share data)

	Nine Months Ended
	September 30,
	2007			2006
Revenues	$	265,717		$	241,544
Cost of revenues		135,285			120,886
Gross profit		130,432			120,658
Operating expenses:
Research and development		21,769			19,030
Selling, general and administrative		74,407			67,882
Total operating expenses		96,176			86,912
Operating income		34,256			33,746
Interest income		5,765			6,409
Other income (expense), net		(197	)		290
Income before income taxes		39,824			40,445
Provision for income taxes		12,903			11,611
Net income	$	26,921		$	28,834
Earnings per common share — basic	$	0.78		$	0.79
Weighted average shares outstanding — basic		34,425			36,497
Earnings per common share — diluted	$	0.76		$	0.77
Weighted average shares outstanding — diluted		35,339			37,232

See accompanying notes.

5

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

											Accumulated
											Other
			Additional								Comprehensive
	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 452 shares of common stock pursuant to the exercise of employee stock options and employee stock purchase plan shares		4		10,557			—			—		—		10,561
Purchase of 1,521 treasury shares		—		—			(46,560	)		—		—		(46,560	)
Equity-based compensation		—		5,837			—			—		—		5,837
Income tax benefits from equity-based compensation		—		981			—			—		—		981
Other		1		(1	)		—			—		—		—
Net income		—		—			—			26,921		—		26,921
Losses related to marketable securities sold reclassified into earnings from other comprehensive income net of $84 tax benefit		—		—			—			—		144		144
Change in fair value on available-for-sale securities net of deferred income tax of $923		—		—			—			—		1,571		1,571
Change in fair value of derivative financial instruments, net of deferred income taxes of $65		—		—			—			—		110		110
Cumulative translation adjustment		—		—			—			—		2,146		2,146
Comprehensive income		—		—			—			—		—		30,892
Balance at September 30, 2007	$	388	$	406,720			($146,865	)	$	167,355	$	9,609	$	437,207

See accompanying notes.

6

ATMI, Inc.

Consolidated Statements of Cash Flows
(unaudited)
(in thousands)

	Nine Months Ended
	September 30,
	2007			2006
Operating activities
Net income	$	26,921		$	28,834
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		16,341			15,429
Provision for inventory obsolescence		492			445
Deferred income taxes		(157	)		(2,370	)
Income tax benefit from share-based payment arrangements		981			1,156
Excess tax benefit from share-based payment arrangements		(669	)		(326	)
Equity-based compensation expense		5,837			7,871
Impairment of investments		—			260
Loss from equity-method investees		692			96
Other		383			154
Changes in operating assets and liabilities:
Accounts receivable		1,594			(8,766	)
Inventories		(137	)		(6,862	)
Other assets		(1,518	)		1,245
Accounts payable		1,566			5,877
Accrued expenses		(6,338	)		(2,853	)
Income taxes		2,540			(1,352	)
Other liabilities		6,672			230
Net cash provided by operating activities		55,200			39,068
Investing activities
Capital expenditures		(26,522	)		(18,965	)
Proceeds from the sale of property, plant and equipment		336			46
Cost-basis and equity-basis investments		(1,362	)		(2,578	)
Proceeds from the sale of a cost-basis investment		—			298
Purchases of marketable securities		(188,816	)		(139,846	)
Proceeds from sales or maturities of marketable securities		194,133			221,730
Net cash (used for) provided by investing activities		(22,231	)		60,685
Financing activities
Excess tax benefit from share-based payment arrangements		669			326
Purchases of treasury stock		(45,608	)		(67,144	)
Proceeds from exercise of stock options		10,560			8,244
Other		(49	)		(54	)
Net cash used for financing activities		(34,428	)		(58,628	)
Effects of exchange rate changes on cash and cash equivalents		(551	)		547
Net (decrease) increase in cash and cash equivalents		(2,010	)		41,672
Cash and cash equivalents, beginning of period		73,596			30,951
Cash and cash equivalents, end of period	$	71,586		$	72,623

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, which is 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				Nine Months Ended
	September 30,				September 30,
	2007		2006		2007		2006
Numerator:
Net income	$	11,327	$	11,354	$	26,921	$	28,834
Denominator:
Denominator for basic earnings per share — weighted average shares		34,145		35,585		34,425		36,497
Dilutive effect of employee stock options		505		499		559		534
Dilutive effect of restricted stock		394		230		355		201
Denominator for diluted earnings per common share — weighted average shares		35,044		36,314		35,339		37,232
Earnings per common share-basic	$	0.33	$	0.32	$	0.78	$	0.79
Earnings per common share-assuming dilution	$	0.32	$	0.31	$	0.76	$	0.77

     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				Nine Months Ended
	September 30,				September 30,
	2007		2006		2007		2006
Employee stock options		471		737		325		644

Inventories, Net

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

	September 30,			December 31,
	2007			2006
Raw materials	$	15,480		$	13,727
Work in process		896			1,926
Finished goods		34,044			34,039
Gross inventories		50,420			49,692
Excess and obsolescence reserve		(2,042	)		(2,353	)
Inventories, net	$	48,378		$	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 has not been, and 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 was 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 September 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 $29.8 million of undistributed earnings from non-U.S. operations as of September 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 September 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 September 30, 2007	$	13,744	$	27,531		$	5,969		$	33,500
Accumulated Amortization		—		(10,748	)		(4,609	)		(15,357	)
Balance as of September 30, 2007	$	13,744	$	16,783		$	1,360		$	18,143

     Changes in carrying amounts of Goodwill and Other intangibles for the nine months ended September 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		—		(1,865	)		(638	)		(2,503	)
Other, including foreign currency translation		10		(39	)		16			(23	)
Balance at September 30, 2007	$	13,744	$	16,783		$	1,360		$	18,143

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 statements of income (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2007		2006		2007		2006
Cost of revenues	$	118	$	248	$	257	$	742
Research and development		138		205		387		615
Selling, general and administrative		1,320		2,055		5,193		6,514
Total equity-based compensation expense		1,576		2,508		5,837		7,871
Benefit from income taxes		552		855		1,979		2,684
Net equity-based compensation expense	$	1,024	$	1,653	$	3,858	$	5,187

     The decrease in equity-based compensation for the three and nine-month periods ended September 30, 2007 compared to the comparable 2006 periods 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 September 30, 2007 (in thousands):

			# of
	# of Shares		Shares
Stock Plan	Approved		Available
1997 Stock Plan (1) (4)		900		26
1998 Stock Plan (1)		2,000		488
2000 Stock Plan (2)		2,000		304
2003 Stock Plan (2)		3,000		1,403
Employee Stock Purchase Plan (3)		1,000		305
Totals		8,900		2,526

(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).
(4)	This Plan terminated on October 10, 2007.

     The Company issued 440,472 and 253,944 shares of common stock as a result of exercises by employees under its employee stock option plans in the first nine 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 nine months of 2007 and 2006, respectively. The company issued 244,782 and 216,130 shares of restricted stock, with only a time-based vesting requirement, in the first nine months of 2007 and 2006, respectively. The Company repurchased 1,521,291 shares of common stock in the first nine 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				Nine Months Ended
	September 30,				September 30,
	2007		2006		2007		2006
Net income	$	11,327	$	11,354	$	26,921	$	28,834
Cumulative translation adjustment		1,646		423		2,146		2,316
Change in fair value of available-for-sale securities, net of deferred income taxes of $369, $105, $923 and $63		628		179		1,571		107
Change in fair value of derivative financial instruments, net of deferred income taxes of $65		110		—		110		—
Losses related to marketable securities sold reclassified into earnings from other comprehensive income, net of $32, $118, $84 and $230 tax benefit (1)		55		201		144		392
Comprehensive income	$	13,766	$	12,157	$	30,892	$	31,649

(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.

     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 in September 2007, ATMI was awarded damages from Praxair for violation of that injunction. Due to the inherent uncertainty of the ultimate resolution of the suit, this award has not been recorded in the financial statements. 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 third quarter of 2007, ATMI recognized a $0.7 million liability associated with increased customs expense on imported goods from the U.S. to an overseas affiliate, which has been classified on the consolidated balance sheet under the caption accrued liabilities.

     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. Included in “other long-term liabilities” at June 30, 2007 and September 30, 2007 is $0.2 million representing the fair value of the guarantee. As of September 30, 2007, Anji has not yet drawn down any amounts against the line of credit secured by the letter of credit.

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Item 2.

Management’s Discussion and Analysis of Financial
Condition and Results of Operations
Three and Nine Months Ended September 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 third quarter of fiscal 2007, ATMI’s revenues grew by 11.0 percent compared to the third quarter of 2006. Our gross margin decreased to 50.4 percent in the third quarter of 2007 from 51.0 percent in the third quarter of 2006, primarily driven by mix and a $0.7 million charge associated with increased customs expenses. Research and development expenses (“R&D”) increased 8.3 percent in the third quarter of 2007 compared to the third quarter of 2006. As a percent of revenues, R&D decreased slightly to 7.9 percent in the third quarter of 2007 from 8.1 percent in the third quarter of 2006. Selling, general and administrative expenses (“SG&A”) increased by 3.7 percent in the third quarter of 2007 vs. the third quarter of 2006. As a percent of revenues, SG&A decreased to 25.9 percent in the third quarter of 2007 compared to 27.7 percent in the same period a year ago. Net income for the quarter was flat at $11.3 million ($0.32 per diluted share) compared to $11.4 million ($0.31 per diluted share) in the third quarter of 2006. Third quarter 2006 net income included recognition of a tax benefit of $1.7 million ($0.04 per diluted share).

     In the first nine months of fiscal 2007, ATMI’s revenues grew by 10.0 percent compared to the same nine month period of 2006. Our gross margin decreased slightly to 49.1 percent in the first nine months of 2007 compared to 50.0 percent in the first nine months of 2006. R&D increased 14.4 percent in the first nine months of 2007 compared to the first nine months of 2006. As a percent of revenues, R&D increased to 8.2 percent in the first nine months of 2007 compared to 7.9 percent in the first nine months of 2006. SG&A increased 9.6 percent in the first nine months of 2007 compared to the first nine months of 2006. As a percent of revenues, SG&A decreased slightly to 28.0 percent from 28.1 percent in the first nine months of 2006. A $1.1 million legal fee (associated with a contingent fee arrangement) recognized in the second quarter of 2007 caused SG&A to increase 0.4 percent of revenues in the first nine months of 2007. Net income for the first nine months of 2007 decreased 6.6 percent to $26.9 million ($0.76 per diluted share) compared to $28.8 million ($0.77 per diluted share) in the first nine months of 2006. The results in the first nine months of 2006 included recognition of a tax benefit of $1.7 million ($0.04 per diluted share).

     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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Revenues

	2007		2006		% Change
Quarter ended September 30,	$	91,131	$	82,124		11.0	%
Nine Months Ended September 30,	$	265,717	$	241,544		10.0	%

     Revenues increased 11.0 percent to $91.1 million in the third quarter of 2007 from $82.1 million in the third quarter of 2006. Sales in our wafer-start driven high performance materials and materials delivery product lines increased in the third quarter of 2007 compared to the third quarter of 2006, due primarily to growth in wafer starts during this period. Sales in our materials packaging product lines increased in the third quarter of 2007 compared to the same period of 2006, primarily because of stronger demand in the Asian flat panel display market.

     Revenues increased 10.0 percent to $265.7 million in the first nine months of 2007 from $241.5 million in the first nine months of 2006. Sales in our wafer-start driven high performance materials and materials delivery product lines increased in the first nine months of 2007 compared to the first nine months of 2006, due primarily to growth in wafer starts during this period. Sales in our materials packaging product lines decreased in the first nine months of 2007 compared to the same period of 2006, primarily because of softer demand in the flat panel display market in the first half of 2007, conversion from an Asia distributor to a direct sales relationship with several customers, 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.

Gross Profit

	2007					2006
	Amount		% of Sales			Amount		% of Sales
Quarter ended September 30	$	45,973		50.4	%	$	41,908		51.0	%
Nine Months Ended September 30	$	130,432		49.1	%	$	120,658		50.0	%

     Gross profit increased 9.7 percent to $46.0 million in the third quarter of 2007 from $41.9 million in the third quarter of 2006. Our gross margin percentage decreased during this time period from 51.0 percent in 2006 to 50.4 percent in 2007. The decrease in gross margin is primarily attributable to mix and a $0.7 million charge associated with increased customs expense on imported goods from the U.S. to an overseas affiliate.

     Gross profit increased 8.1 percent to $130.4 million in the first nine months of 2007 from $120.7 million in the first nine months of 2006. Our gross margin percentage decreased during this time period from 50.0 percent in 2006 to 49.1 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 in the first six months of 2007 and also due to a manufacturing defect in this product line discovered in the first quarter of 2007 that was subsequently resolved.

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Research and Development Expenses

	2007					2006
	Amount		% of Sales			Amount		% of Sales
Quarter Ended September 30	$	7,225		7.9	%	$	6,673		8.1	%
Nine Months Ended September 30	$	21,769		8.2	%	$	19,030		7.9	%

     R&D increased 8.3 percent to $7.2 million in the third quarter of 2007 from $6.7 million in the third quarter of 2006. The increase in R&D spending was primarily attributable to spending associated with the development of high-performance materials, including advanced formulations of RegenSi and AutoClean.

     R&D expenses increased 14.4 percent to $21.8 million in the first nine months of 2007 from $19.0 million in the first nine 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.

Selling, General and Administrative Expenses

	2007					2006
	Amount		% of Sales			Amount		% of Sales
Quarter Ended September 30	$	23,617		25.9	%	$	22,775		27.7	%
Nine Months Ended September 30	$	74,407		28.0	%	$	67,882		28.1	%

     SG&A increased 3.7 percent to $23.6 million in the third quarter of 2007 from $22.8 million in the third quarter of 2006, but was 25.9 percent of revenues in the third quarter of 2007 vs. 27.7 percent of revenues in the third quarter of 2006, and was below the 11.0% growth in revenues. The decrease in SG&A as a percentage of revenues is due to management focus on reducing overall spending levels within the Company, offset by inflation-based increases in some of our structural costs (e.g., salaries, fringe benefits, etc.) and increased depreciation on facilities.

     SG&A increased 9.6 percent to $74.4 million in the first nine months of 2007 from $67.9 million in the first nine months of 2006, which was slightly below the 10.0% growth rate of revenues. SG&A, as a percentage of revenues, was relatively flat at 28.0 percent in the first nine months of 2007 compared to 28.1 percent in the same 2006 period. Despite a $0.9 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 nine months 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. A $1.1 million legal fee (associated with a contingent fee arrangement) recognized in the second quarter of 2007 caused SG&A to increase 0.4 percent of revenues in the first nine months of 2007.

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Operating Income

	2007					2006
	Amount		% of Sales			Amount		% of Sales
Quarter Ended September 30	$	15,131		16.6	%	$	12,460		15.2	%
Nine Months Ended September 30	$	34,256		12.9	%	$	33,746		14.0	%

     Operating income increased 21.4% to $15.1 million in the third quarter of 2007 (representing 16.6 percent of revenues) from $12.5 million in the third quarter of 2006 (representing 15.2 percent of revenues). Operating income increased to $34.3 million in the first nine months of 2007 (representing 12.9 percent of revenues) from $33.7 million in the first nine months of 2006 (representing 14.0 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 third quarter of 2007 from $2.1 million in the third quarter of 2006 and decreased to $5.8 million in the first nine months of 2007 from $6.4 million in the first nine 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 lower-yielding tax-exempt securities.

Provision for Income Taxes

	Effective Rate
	2007			2006
Quarter Ended September 30		32.9	%		22.0	%
Nine Months Ended September 30		32.4	%		28.7	%

     In the third quarter of 2006, due to a change in facts and circumstances, we recognized approximately $1.7 million in tax benefits. The effective tax rates in 2007 are more representative of our longer-term expected rates. 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 September 30, 2007, the Company had a net deferred tax asset on the balance sheet of $6.7 million, primarily due to temporary differences (book vs. tax), 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 through exercises of employee stock options.

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     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, and our future operating cash flows will be sufficient to meet our future operating cash needs for the foreseeable future. Further, our ability to obtain debt or equity financing provides additional potential sources of liquidity should they be required.

     We continue to invest in R&D 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 and to drive efficiencies throughout the organization. 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 September 30, 2007, $78.1 million remains available for repurchases under the programs.

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

	Nine Months Ended
	September 30,
	2007			2006
Cash provided by (used for):
Operating Activities	$	55,200		$	39,068
Investing Activities		(22,231	)		60,685
Financing Activities		(34,428	)		(58,628	)
Effects of exchange rate changes on cash		(551	)		547

     Net cash provided by operating activities increased by $16,132 due primarily to:

• Increase in cash provided by changes in accounts receivable of $10,360, due to increased focus on reduction of days’ sales outstanding in Asia and also due to timing of collections.

• Decrease in cash used by changes in inventories of $6,725 as a result of the Company’s focus on better supply chain utilization

• Increase in cash used by accrued expenses of $3,485

• Increase in cash provided by other operating or working capital accounts of $3,260

     Net cash used by investing activities increased by $82,916 due primarily to:

• Decrease in cash proceeds from sales and maturities of marketable securities in excess of cash used to purchase marketable securities of $76,567

• Increase in capital spending of $7,557 due primarily to the purchase of high-throughput combinatorial research tools used in our R&D activities

• Decrease in cash paid for cost-basis and equity-basis investments of $1,216

     Net cash used for financing activities decreased by $24,200 due primarily to:

• Decrease in share repurchases of $21,536

• Increase of $2,316 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. Included in “other long-term liabilities” at June 30, 2007 and September 30, 2007 is $0.2 million representing the fair value of the guarantee.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

     Interest Rate Risk.As of September 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 September 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 $0.3 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 $0.4 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 Company’s revenues for the nine-month period ended September 30, 2007 were denominated in Japanese Yen (“JPY”), but a majority of the product is sourced in U.S. dollars. Management periodically reviews the Company’s exposure to currency fluctuations. This exposure may

24

change over time as business practices evolve and could have a material impact on the Company’s financial results in the future. We utilize forward foreign exchange contracts to hedge specific exposures relating to intercompany payments and anticipated, but not yet committed, intercompany sales (primarily parent company export sales to subsidiaries at pre-established U.S. dollar prices). The terms of the forward foreign exchange contracts are generally matched to the underlying transaction being hedged, and are typically under one year.

Because such contracts are directly associated with identified transactions, they are an effective hedge against fluctuations in the value of the foreign currency underlying the transaction. All of our foreign exchange contracts are accounted for at fair value based on readily available market price quotations. We generally do not hedge overseas sales denominated in foreign currencies or translation exposures. Further, we do not enter into financial instruments for speculation or trading purposes.

At September 30, 2007, ATMI had $15.6 million notional amount of foreign exchange contracts, which are being used to hedge recorded foreign denominated assets, all 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 September 30, 2007 would decrease by approximately $1.6 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 September 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 third quarter of fiscal 2007 that 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.

     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, in September 2007, ATMI was awarded damages from Praxair for violation of that injunction. Due to the inherent uncertainty of the ultimate resolution of the suit, this award has not been recorded in the financial statements. 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 September 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
July 2007		117,398	$	31.19		117,398	$	98,481,000
August 2007		389,486	$	29.18		389,486	$	87,114,000
September 2007		298,920	$	30.04		298,920	$	78,135,000
Total		805,804	$	29.79		805,804	$	78,135,000

(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 September 30, 2007.
(2)	Share repurchases are shown on a trade-date basis. At September 30, 2007, $1.8 million related to these share repurchases had not yet been paid by the Company because the settlement dates were in October 2007.
(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 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.

October 24, 2007

By	/s/ Douglas A. Neugold
	Douglas A. Neugold
	President and Chief Executive Officer
By	/s/ Timothy C. Carlson
	Timothy C. Carlson
	Executive Vice President, Chief Financial Officer and Treasurer

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