EXHIBIT 99.1
Entegris Reports Results for Fourth Quarter and Fiscal 2006
CHASKA (Minneapolis), Minn., February 13, 2006 –Entegris, Inc. (Nasdaq: ENTG), a global leader in materials integrity management, today reported its financial results for the fiscal fourth quarter and year ended December 31, 2006.
Fourth-quarter sales from continuing operations were $169.1 million, versus $171.3 million in the third quarter and up 15 percent from $147.1 million for the same period a year ago. GAAP net income was $16.1 million, or $0.12 per fully diluted share. This result includes total pretax stock-based compensation of $3.0 million, or $0.02 per fully diluted share after tax, of which $0.9 million was for integration-related stock-based compensation.
On a non-GAAP basis, fourth-quarter income from continuing operations was $21.1 million, or $0.16 per fully diluted share. The non-GAAP result is adjusted to exclude the after-tax effects of merger-related and other restructuring charges. On a pre-tax basis, the adjustments include restructuring charges of $0.6 million, integration expense of $0.6 million, merger-related amortization expense of $3.5 million, and integration-related stock-based compensation expense of $0.9 million. A reconciliation of GAAP to non-GAAP results is provided elsewhere in this release.
For the year ended December 31, 2006, sales from continuing operations totaled $678.7 million, versus $442.8 million for the prior year. GAAP net income was $63.5 million, or $0.46 per fully diluted share. On a non-GAAP basis, income from continuing operations for fiscal 2006 was $86.0 million, or $0.62 per fully diluted share.
Gideon Argov, president and chief executive officer, said: “While there were signs of softening in the industry, fourth-quarter sales remained firm and reflected strong sales of
our liquid systems. Earnings per share exceeded our guidance, as lower selling, general, and administrative expenses and a favorable tax rate offset a lower gross margin. The fourth-quarter gross margin was impacted by manufacturing inefficiencies identified after a comprehensive review of all our operations worldwide. With this review completed, we are confident we have aggressively addressed the causes of these inefficiencies.
“All in all, it was a solid year for Entegris,” said Argov. “Our strong balance sheet and cash flow allows us to continue to invest in technologies that address our semiconductor customers’ contamination control issues and meet their materials handling needs, which are critical to their successful transition to 65 and 45 nanometer processes.” The Company ended the quarter with cash, cash equivalents, and short-term investments of $275.0 million, up $46.5 million from the third quarter.
Outlook
For its first fiscal quarter ending March 31, 2007, the Company currently expects sales to be flat to down 5 percent sequentially, or approximately $161 million to $169 million. GAAP net income per diluted share is expected to range from $0.08 to $0.11. Non-GAAP net income is expected to range from approximately $15 million to $19 million, reflecting pretax adjustments for integration and restructuring charges of approximately $2.0 million, merger-related amortization expense of $3.5 million, and integration-related stock-based compensation expense of approximately $0.7 million. Non-GAAP net income per diluted share is expected to range from $0.11 to $0.14.
Fourth-Quarter Results Conference Call Details
Entegris will hold a conference call to discuss its results for the 2006 fourth quarter and full year on Tuesday, February 13, 2007, at 10:00 a.m. Eastern Time. Participants should dial 1-800-811-0667 (domestic callers) or 1-913-981-4901 (for callers outside the U.S.); all callers should use passcode 4783557. A replay of the call can be accessed at 1-719-457-0820 using the same passcode. The call will also be webcast on the investor relations portion of the Entegris website at www.entegris.com.
ABOUT ENTEGRIS
Entegris is the global leader in materials integrity management, delivering a wide range of products for purifying, protecting and transporting critical materials used in processing and manufacturing in semiconductor and other high tech industries. Entegris is ISO 9001 certified and has manufacturing, customer service and/or research facilities in the United States, China, France, Germany, Japan, Malaysia, Singapore, South Korea and Taiwan. Additional information can be found at www.entegris.com.
NON-GAAP INFORMATION
In addition to disclosing results that are determined in accordance with generally accepted accounting principles in the U.S. (GAAP), the Company also discloses non-GAAP results of operations that exclude certain expenses and charges. These non-GAAP results are provided as a complement to results provided in accordance with GAAP in order to provide investors with relevant and useful information about the Company’s ongoing operations. As such, non-GAAP information primarily excludes expenses and charges resulting from purchase accounting and integration activities associated with the Company’s August 2005 merger with Mykrolis Corporation. Earnings guidance for the quarter ending March 31, 2007 is disclosed on both a GAAP and a non-GAAP basis. A reconciliation of GAAP to non-GAAP financial information discussed in this release is contained in the attached exhibits and on the Company’s website at www.entegris.com.
Forward-Looking Statements
Certain information contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current management expectations only as of the date of this press release, which involve substantial risks and uncertainties that could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. Statements which are modified by words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “may,” “will,” “should” or the negative thereof and similar expressions as they relate to Entegris or our management are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. These risks include, but are not limited to, fluctuations in the market price of Entegris’ stock, future operating results of Entegris, other acquisition and investment opportunities available to Entegris, general business and market conditions and other factors. Additional information concerning these and other risk factors may be found in previous financial press releases issued by Entegris and Entegris’ periodic public filings with the Securities and Exchange Commission, including the discussion described under the headings “Risks Relating to our Business and Industry,” and “Risks Related to Securities Markets and Ownership of Our Securities” in Item 7 of our Annual Report on Form 10–K for the fiscal year ended August 27, 2005 .as well as other matters and important factors disclosed previously and from time to time in the filings of Entegris with the U.S. Securities and Exchange Commission. Except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission, we undertake no obligation to update publicly any forward-looking statements contained herein.
Entegris, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | | | | | |
| | | Three months ended | | | Twelve months ended | |
| | | Dec. 31,
2006 | | | Dec. 31,
2005 | | | Dec. 31, 2006 | | | Dec. 31, 2005 | |
Net sales | | $ | 169,081 | | | $ | 147,144 | | | $ | 678,706 | | | $ | 442,834 | |
| | | | |
Cost of sales(a) | | | 99,260 | | | | 95,172 | | | | 372,557 | | | | 281,569 | |
| | | | | | | | | | | | | | | | |
Gross profit | | | 69,821 | | | | 51,972 | | | | 306,149 | | | | 161,265 | |
| | | | |
Selling, general and administrative expenses(b) | | | 42,056 | | | | 59,295 | | | | 189,772 | | | | 157,583 | |
| | | | |
Engineering, research and development expenses | | | 9,595 | | | | 9,771 | | | | 38,830 | | | | 26,247 | |
| | | | | | | | | | | | | | | | |
Operating income (loss) | | | 18,170 | | | | (17,094 | ) | | | 77,547 | | | | (22,565 | ) |
| | | | |
Interest income, net | | | 2,439 | | | | 2,029 | | | | 9,205 | | | | 4,519 | |
| | | | |
Other (loss) income, net | | | (637 | ) | | | 155 | | | | 1,658 | | | | 2,138 | |
| | | | | | | | | | | | | | | | |
Income (loss) before income taxes | | | 19,972 | | | | (14,910 | ) | | | 88,410 | | | | (15,908 | ) |
| | | | |
Income tax expense (benefit) | | | 3,920 | | | | (7,440 | ) | | | 26,505 | | | | (10,941 | ) |
| | | | |
Equity in net (earnings) loss of affiliates | | | (243 | ) | | | (70 | ) | | | (531 | ) | | | 149 | |
| | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | | | 16,295 | | | | (7,400 | ) | | | 62,436 | | | | (5,116 | ) |
| | | | |
(Loss) income from discontinued operations, net of taxes | | | (196 | ) | | | (2,794 | ) | | | 1,030 | | | | (10,385 | ) |
| | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 16,099 | | | $ | (10,194 | ) | | $ | 63,466 | | | $ | (15,501 | ) |
| | | | | | | | | | | | | | | | |
Basic income (loss) per common share: | | | | | | | | | | | | | | | | |
| | | | |
Continuing operations: | | $ | 0.12 | | | $ | (0.05 | ) | | $ | 0.46 | | | $ | (0.05 | ) |
| | | | |
Discontinued operations | | | — | | | | (0.02 | ) | | | 0.01 | | | | (0.11 | ) |
| | | | |
Net income (loss) per common share | | $ | 0.12 | | | $ | (0.08 | ) | | $ | 0.47 | | | $ | (0.16 | ) |
| | | | |
Diluted income (loss) per common share: | | | | | | | | | | | | | | | | |
| | | | |
Continuing operations: | | $ | 0.12 | | | $ | (0.05 | ) | | $ | 0.45 | | | $ | (0.05 | ) |
| | | | |
Discontinued operations | | | — | | | | (0.02 | ) | | | 0.01 | | | | (0.11 | ) |
| | | | |
Net income (loss) per common share | | $ | 0.12 | | | $ | (0.08 | ) | | $ | 0.46 | | | $ | (0.16 | ) |
| | | | |
Weighted average shares outstanding: | | | | | | | | | | | | | | | | |
| | | | |
Basic | | | 130,594 | | | | 135,467 | | | | 135,116 | | | | 98,495 | |
| | | | |
Diluted | | | 134,024 | | | | 135,467 | | | | 138,492 | | | | 98,495 | |
| a) | Cost of sales for the three months ended December 31, 2006 include $0.3 million of merger-related and other restructuring charges, integration expenses, and integration-related stock-based compensation expense. Cost of sales for the twelve months ended December 31, 2006 include $2.5 million of merger-related and other restructuring charges, integration expenses, and integration-related stock-based compensation expense. |
| b) | Selling, general and administrative expenses for the three months and twelve months ended December 31, 2006 include $5.3 million and $31.1 million, respectively, of merger-related and other restructuring charges, integration expense, integration-related stock-based compensation expense, and merger-related amortization of intangibles. |
Entegris, Inc.
GAAP to Non-GAAP Reconciliation of Statement of Operations
For the Three Months Ended December 31, 2006
(In thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | |
| | | U.S. GAAP | | | Adjustments | | | Non-GAAP | |
Net sales | | $ | 169,081 | | | $ | — | | | $ | 169,081 | |
| | | |
Cost of sales(a) | | | 99,260 | | | | (342 | ) | | | 98,918 | |
| | | | | | | | | | | | |
Gross Profit | | | 69,821 | | | | 342 | | | | 70,163 | |
| | | |
Selling, general and administrative expenses(b) | | | 42,056 | | | | (5,297 | ) | | | 36,759 | |
| | | |
Engineering, research and development expenses | | | 9,595 | | | | — | | | | 9,595 | |
| | | | | | | | | | | | |
Operating income | | | 18,170 | | | | 5,639 | | | | 23,809 | |
| | | |
Interest income, net | | | 2,439 | | | | — | | | | 2,439 | |
| | | |
Other (loss), net | | | (637 | ) | | | — | | | | (637 | ) |
| | | | | | | | | | | | |
Income before income taxes | | | 19,972 | | | | 5,639 | | | | 25,611 | |
| | | |
Income tax expense | | | 3,920 | | | | 851 | | | | 4,771 | |
| | | |
Equity in net earnings of affiliates | | | (243 | ) | | | — | | | | (243 | ) |
| | | | | | | | | | | | |
Income from continuing operations | | | 16,295 | | | | 4,788 | | | | 21,083 | |
| | | |
Loss from discontinued operations, net of taxes | | | 196 | | | | — | | | | 196 | |
| | | | | | | | | | | | |
Net income | | $ | 16,099 | | | $ | 4,788 | | | | 20,887 | |
| | | | | | | | | | | | |
Basic income per common share: | | | | | | | | | | | | |
| | | |
Continuing operations: | | $ | 0.12 | | | $ | 0.04 | | | $ | 0.16 | |
| | | |
Discontinued operations | | | — | | | | — | | | | — | |
| | | |
Net income per common share | | $ | 0.12 | | | $ | 0.04 | | | $ | 0.16 | |
| | | |
Diluted income per common share: | | | | | | | | | | | | |
| | | |
Continuing operations: | | $ | 0.12 | | | $ | 0.04 | | | $ | 0.16 | |
| | | |
Discontinued operations | | | — | | | | — | | | | — | |
| | | |
Net income per common share | | $ | 0.12 | | | $ | 0.04 | | | $ | 0.16 | |
| | | |
Weighted average shares outstanding: | | | | | | | | | | | | |
| | | |
Basic | | | 130,594 | | | | | | | | 130,594 | |
| | | |
Diluted | | | 134,024 | | | | | | | | 134,024 | |
| a) | Non-GAAP cost of sales for the three months ended December 31, 2006 is adjusted for $0.3 million of merger-related and other restructuring charges, integration expenses, and integration-related stock-based compensation expense. |
| b) | Non-GAAP selling, general and administrative expenses for the three months ended December 31, 2006 are adjusted for $0.4 million of merger-related and other restructuring charges, $0.6 million of integration expense, $0.8 million of integration-related stock-based compensation expense, and $3.5 million of merger-related amortization of intangibles. |
Entegris, Inc.
GAAP to Non-GAAP Reconciliation of Statement of Operations
For the Twelve Months Ended December 31, 2006
(In thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | |
| | | U.S. GAAP | | | Adjustments | | | Non-GAAP | |
Net sales | | $ | 678,706 | | | $ | — | | | $ | 678,706 | |
| | | |
Cost of sales(a) | | | 372,557 | | | | (2,506 | ) | | | 370,051 | |
| | | | | | | | | | | | |
Gross profit | | | 306,149 | | | | 2,506 | | | | 308,655 | |
| | | |
Selling, general and administrative expenses(b) | | | 189,772 | | | | (31,121 | ) | | | 158,651 | |
| | | |
Engineering, research and development expenses | | | 38,830 | | | | — | | | | 38,830 | |
| | | | | | | | | | | | |
Operating income | | | 77,547 | | | | 33,627 | | | | 111,174 | |
| | | |
Interest income, net | | | 9,205 | | | | — | | | | 9,205 | |
| | | |
Other income, net | | | 1,658 | | | | — | | | | 1,658 | |
| | | | | | | | | | | | |
Income before income taxes | | | 88,410 | | | | 33,627 | | | | 122,037 | |
| | | |
Income tax expense | | | 26,505 | | | | 10,089 | | | | 36,594 | |
| | | |
Equity in net earnings of affiliates | | | (531 | ) | | | — | | | | (531 | ) |
| | | | | | | | | | | | |
Income from continuing operations | | | 62,436 | | | | 23,538 | | | | 85,974 | |
| | | |
Income from discontinued operations, net of taxes | | | 1,030 | | | | — | | | | 1,030 | |
| | | | | | | | | | | | |
Net income | | $ | 63,466 | | | $ | 23,538 | | | $ | 87,004 | |
| | | | | | | | | | | | |
Basic income per common share: | | | | | | | | | | | | |
| | | |
Continuing operations: | | $ | 0.46 | | | $ | 0.18 | | | $ | 0.64 | |
| | | |
Discontinued operations | | | 0.01 | | | | — | | | | 0.01 | |
| | | |
Net income per common share | | $ | 0.47 | | | $ | 0.17 | | | $ | 0.64 | |
| | | |
Diluted income per common share: | | | | | | | | | | | | |
| | | |
Continuing operations: | | $ | 0.45 | | | $ | 0.17 | | | $ | 0.62 | |
| | | |
Discontinued operations | | | 0.01 | | | | — | | | | 0.01 | |
| | | |
Net income per common share | | $ | 0.46 | | | $ | 0.17 | | | $ | 0.63 | |
| | | |
Weighted average shares outstanding: | | | | | | | | | | | | |
| | | |
Basic | | | 135,116 | | | | | | | | 135,116 | |
| | | |
Diluted | | | 138,492 | | | | | | | | 138,492 | |
| a) | Non-GAAP cost of sales for the twelve months ended December 31, 2006 is adjusted for $3.2 million of merger-related and other restructuring charges, integration expenses, and integration-related stock-based compensation expense offset by a $0.7 million gain on the sale of a facility. |
| b) | Non-GAAP selling, general and administrative expenses for the twelve months ended December 31, 2006 are adjusted for $4.2 million of merger-related and other restructuring charges, $7.8 million of integration expense, $5.1 million of integration-related stock-based compensation expense, and $14.0 million of merger-related amortization of intangibles. |
Entegris, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
| | | | | | |
| | | December 31,
2006 | | December 31,
2005 |
| ASSETS | | | | | | |
| | |
Cash, cash equivalents and short-term investments | | $ | 274,974 | | $ | 274,403 |
| | |
Accounts receivable | | | 128,960 | | | 110,146 |
| | |
Inventories | | | 94,697 | | | 69,535 |
| | |
Deferred tax assets | | | 41,750 | | | 26,078 |
| | |
Other current assets and assets held for sale | | | 10,777 | | | 25,290 |
| | | | | | |
| | |
Total current assets | | | 551,158 | | | 505,452 |
Property, plant and equipment, net | | | 120,254 | | | 120,323 |
| | |
Intangible assets | | | 467,674 | | | 493,544 |
| | |
Deferred tax asset – non-current | | | — | | | 10,614 |
| | |
Other assets | | | 11,745 | | | 12,301 |
| | | | | | |
Total assets | | $ | 1,150,831 | | $ | 1,142,234 |
| | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | |
| | |
Current maturities of long-term debt | | $ | 401 | | $ | 797 |
| | |
Short-term debt | | | — | | | 2,290 |
| | |
Accounts payable | | | 25,202 | | | 33,585 |
| | |
Accrued liabilities | | | 57,049 | | | 58,570 |
| | |
Income tax payable | | | 16,926 | | | 15,775 |
| | | | | | |
Total current liabilities | | | 99,578 | | | 111,017 |
| | |
Long-term debt, less current maturities | | | 2,995 | | | 3,383 |
| | |
Other liabilities | | | 32,278 | | | 15,015 |
| | |
Shareholders’ equity | | | 1,015,980 | | | 1,012,819 |
| | | | | | |
Total liabilities and shareholders’ equity | | $ | 1,150,831 | | $ | 1,142,234 |
| | | | | | |
