EXHIBIT 99.1
Entegris Reports Third Quarter Results
Sales Increase 34 Percent Sequentially; Adjusted EBITDA Reaches $14.5 Million
BILLERICA, Mass., October 27, 2009 –Entegris, Inc. (Nasdaq: ENTG) today reported its financial results for the fiscal third quarter ended September 26, 2009.
The Company recorded third-quarter sales of $110.7 million and a net loss of $7.6 million, or $0.07 per share. These results included amortization of intangible assets of $4.7 million and restructuring charges of $2.4 million. The Company reported sales of $82.6 million in the second quarter ended June 27, 2009 and sales of $145.8 million in the third quarter a year ago.
For the first nine months of 2009, sales were $252.3 million, which compared to $442.0 million for the same period a year ago.
Gideon Argov, president and chief executive officer, said: “We saw continued positive trends through the third quarter in both the unit-driven and capital-driven sides of our business. Higher fab utilization at many of our semiconductor customers and capital spending in the industry to implement technology process transitions led to higher demand across our product lines. Business trends in our other markets such as data storage, flat panel display, and LED, were also positive.
“Even with third-quarter sales well below historical levels, we achieved an operating margin of 6 percent of sales, excluding the impact of amortization and restructuring expenses, and $14.5 million of adjusted EBITDA for the quarter. This reflected our improved cost structure, as well as our ability to effectively flex our manufacturing operations to meet the higher demand,” Argov said.
At the end of the third quarter, total bank debt was $91.6 million. This represented a decrease of $60.1 million from the $151.7 million in second quarter, largely as the result of a secondary equity offering in September, the proceeds of which were used exclusively to pay down debt. The Company’s third-quarter ending cash balance was $78.4 million.
Segment Information (table of results contained at the end of this release)
Contamination Control Solutions sales increased 38 percent sequentially from the second quarter of 2009, driven by demand for filtration products, chemical containers, and liquid dispense pumps.
Microenvironments product sales increased 24 percent sequentially from the second quarter of 2009. The growth reflected demand for shippers needed to support increased production in the semiconductor and data storage industries, as well as demand for wafer transport products.
Specialty Materials sales increased 42 percent sequentially from the second quarter of 2009. The increase was due to higher demand for semiconductor-related graphite and silicon carbide products and a partial recovery of demand for certain industrial products.
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Third-Quarter Results Conference Call Details
Entegris will hold a conference call to discuss its results for the third quarter on Tuesday, October 27, 2009, at 10:00 a.m. Eastern Time. Participants should dial 1-866-416-5346 (for domestic callers) or 1-913-312-0376 (for callers outside the U.S.). A replay of the call can be accessed at 1-719-457-0820 using passcode 8433843. A webcast of the call can also be accessed from the investor relations section of Entegris’ website atwww.entegris.com.
ABOUT ENTEGRIS
Entegris is a leading provider of a wide range of products for purifying, protecting and transporting critical materials used in processing and manufacturing in the semiconductor and other high-tech industries. Entegris is ISO 9001 certified and has manufacturing, customer service and/or research facilities in the United States, China, France, Germany, Israel, Japan, Malaysia, Singapore, South Korea and Taiwan. Additional information can be found atwww.entegris.com.
NON-GAAP INFORMATION
Adjusted EBITDA margin and non-GAAP operating margin, together with the related measures of Adjusted EBITDA and non-GAAP operating income, are considered “non-GAAP financial measures” under the rules and regulations of the SEC. These financial measures are provided as a complement to financial measures provided in accordance with GAAP. We provide non-GAAP financial measures in order to better assess and reflect operating performance. Management believes the non-GAAP measures help indicate our baseline performance before certain gains, losses or other charges that may not be indicative of our business or future outlook. We believe these non-GAAP measures will aid investors’ overall understanding of our results by providing a higher degree of transparency for certain expenses and providing a level of disclosure that will help investors understand how we plan and measure our business. The presentation of non-GAAP measures is not meant to be considered in isolation, as a substitute for, or superior to, financial measures or information provided in accordance with GAAP. The calculations of Adjusted EBITDA margin and non-GAAP operating margin are included elsewhere in this release.
Forward-Looking Statements
Certain information contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current management expectations only as of the date of this press release, and involve substantial risks and uncertainties that could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. Statements that include such words as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “may,” “will,” “should” or the negative thereof and similar expressions as they relate to Entegris or our management are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. These risks include, but are not limited to, fluctuations in the market price of Entegris’ stock, Entegris’ future operating results, other acquisition and investment opportunities available to Entegris, general business and market conditions and other factors. Additional information concerning these and other risk factors may be found in previous financial press releases issued by Entegris and Entegris’ periodic public filings with the Securities and Exchange Commission, including discussions appearing in Item 1A of our Annual Report on Form 10–K for the fiscal year ended December 31, 2008, as well as the matters described under the headings “Risks Relating to our Business and Industry,” “Risks
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Related to our Borrowings”, “Manufacturing Risks,” “International Risks,” and “Risks Related to Investing in Our Securities” in our current report on Form 8-K, dated September 2, 2009, together with the other matters and important factors disclosed previously and from time to time in the filings of Entegris with the U.S. Securities and Exchange Commission. Except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission, we undertake no obligation to update publicly any forward-looking statements contained herein.
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Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
| Three months ended | ||||||||||||
| September 26, 2009 | September 27, 2008 | June 27, 2009 | ||||||||||
Net sales | $ | 110,706 | $ | 145,789 | $ | 82,576 | ||||||
Cost of sales | 65,929 | 90,391 | 58,846 | |||||||||
Gross profit | 44,777 | 55,398 | 23,730 | |||||||||
Selling, general and administrative expenses | 29,175 | 35,373 | 25,685 | |||||||||
Engineering, research and development expenses | 8,575 | 10,284 | 7,843 | |||||||||
Amortization of intangible assets | 4,723 | 4,858 | 4,931 | |||||||||
Impairment of goodwill | — | 379,810 | — | |||||||||
Restructuring charges | 2,368 | 3,332 | 5,452 | |||||||||
Operating loss | (64 | ) | (378,259 | ) | (20,181 | ) | ||||||
Interest expense, net | 2,681 | 614 | 2,577 | |||||||||
Other expense, net | 4,114 | 947 | 1,537 | �� | ||||||||
Loss before income taxes | (6,859 | ) | (379,820 | ) | (24,295 | ) | ||||||
Income tax expense (benefit) | 623 | 12,897 | (2,252 | ) | ||||||||
Equity in net loss of affiliates | 132 | 195 | 449 | |||||||||
Loss from continuing operations | (7,614 | ) | (392,912 | ) | (22,492 | ) | ||||||
Loss from discontinued operations, net of taxes | — | (90 | ) | — | ||||||||
Net loss | (7,614 | ) | (393,002 | ) | (22,492 | ) | ||||||
Net loss attributable to the noncontrolling interest | 6 | — | — | |||||||||
Net loss attributable to the Company | $ | (7,608 | ) | $ | (393,002 | ) | $ | (22,492 | ) | |||
Basic loss per common share: | ||||||||||||
Continuing operations | ($0.07 | ) | $ | (3.51 | ) | ($0.20 | ) | |||||
Net loss per common share | ($0.07 | ) | $ | (3.52 | ) | ($0.20 | ) | |||||
Diluted loss per common share: | ||||||||||||
Continuing operations | ($0.07 | ) | $ | (3.51 | ) | ($0.20 | ) | |||||
Net loss per common share | ($0.07 | ) | $ | (3.52 | ) | ($0.20 | ) | |||||
Weighted average shares outstanding: | ||||||||||||
Basic | 115,023 | 111,796 | 112,694 | |||||||||
Diluted | 115,023 | 111,796 | 112,694 | |||||||||
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Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
| Nine months ended | ||||||||
| September 26, 2009 | September 27, 2008 | |||||||
Net sales | $ | 252,320 | $ | 441,963 | ||||
Cost of sales | 178,795 | 262,690 | ||||||
Gross profit | 73,525 | 179,273 | ||||||
Selling, general and administrative expenses | 84,581 | 115,800 | ||||||
Engineering, research and development expenses | 25,322 | 31,147 | ||||||
Amortization of intangible assets | 14,635 | 14,497 | ||||||
Impairment of goodwill | — | 379,810 | ||||||
Restructuring charges | 12,454 | 3,332 | ||||||
Operating loss | (63,467 | ) | (365,313 | ) | ||||
Interest expense, net | 7,105 | 682 | ||||||
Other expense, net | 429 | 1,823 | ||||||
Loss before income taxes | (71,001 | ) | (367,818 | ) | ||||
Income tax (benefit) expense | (4,226 | ) | 16,312 | |||||
Equity in net loss of affiliates | 1,076 | 49 | ||||||
Loss from continuing operations | (67,851 | ) | (384,179 | ) | ||||
Loss from discontinued operations, net of taxes | — | (1,025 | ) | |||||
Net loss | (67,851 | ) | (385,204 | ) | ||||
Net loss attributable to the noncontrolling interest | 6 | — | ||||||
Net loss attributable to the Company | $ | (67,845 | ) | $ | (385,204 | ) | ||
Basic loss per common share: | ||||||||
Continuing operations | $ | (0.60 | ) | $ | (3.40 | ) | ||
Discontinued operations | — | $ | (0.01 | ) | ||||
Net loss per common share | $ | (0.60 | ) | $ | (3.41 | ) | ||
Diluted loss per common share: | ||||||||
Continuing operations | $ | (0.60 | ) | $ | (3.40 | ) | ||
Discontinued operations | — | $ | (0.01 | ) | ||||
Net loss per common share | $ | (0.60 | ) | $ | (3.41 | ) | ||
Weighted average shares outstanding: | ||||||||
Basic | 113,355 | 112,942 | ||||||
Diluted | 113,355 | 112,942 | ||||||
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Entegris, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
| September 26, 2009 | December 31, 2008 | |||||
ASSETS | ||||||
Cash and cash equivalents | $ | 78,376 | $ | 115,033 | ||
Accounts receivable | 80,062 | 70,535 | ||||
Inventories | 84,116 | 102,189 | ||||
Deferred tax assets, deferred tax charges and refundable income taxes | 11,001 | 14,661 | ||||
Other current assets and assets held for sale | 6,615 | 10,710 | ||||
Total current assets | 260,170 | 313,128 | ||||
Property, plant and equipment, net | 146,726 | 159,738 | ||||
Intangible assets | 82,788 | 93,139 | ||||
Deferred tax assets – non-current | 12,126 | 13,315 | ||||
Other assets | 16,219 | 18,504 | ||||
Total assets | $ | 518,029 | $ | 597,824 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
Current maturities of long-term debt | 11,464 | $ | 13,166 | |||
Short-term borrowings | 7,001 | — | ||||
Accounts payable | 27,044 | 21,782 | ||||
Accrued liabilities | 29,475 | 36,971 | ||||
Income tax payable and deferred tax liabilities | 5,694 | 7,437 | ||||
Total current liabilities | 80,678 | 79,356 | ||||
Long-term debt, less current maturities | 73,135 | 150,516 | ||||
Other liabilities | 26,172 | 31,782 | ||||
Shareholders’ equity | 338,044 | 336,170 | ||||
Total liabilities and shareholders’ equity | $ | 518,029 | $ | 597,824 | ||
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Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Three months ended | Nine months ended | |||||||||||||||
| September 26, 2009 | September 27, 2008 | September 26, 2009 | September 27, 2008 | |||||||||||||
Operating activities: | ||||||||||||||||
Net loss | $ | (7,614 | ) | $ | (393,002 | ) | $ | (67,851 | ) | $ | (385,204 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||||
Loss from discontinued operations | — | 90 | — | 1,025 | ||||||||||||
Depreciation | 7,456 | 6,476 | 23,628 | 18,776 | ||||||||||||
Amortization | 4,723 | 4,858 | 14,635 | 14,497 | ||||||||||||
Stock-based compensation expense | 2,120 | 1,335 | 6,299 | 5,558 | ||||||||||||
Charge for fair value mark-up of acquired inventory | 51 | 5,718 | 4,116 | 5,718 | ||||||||||||
Impairment of goodwill | — | 379,810 | — | 379,810 | ||||||||||||
Other | 1,662 | 13,076 | 3,659 | 17,527 | ||||||||||||
Changes in operating assets and liabilities, excluding effects of acquisitions: | ||||||||||||||||
Trade accounts receivable and notes receivable | (17,271 | ) | 6,039 | (7,486 | ) | 14,169 | ||||||||||
Inventories | (735 | ) | (539 | ) | 10,715 | (884 | ) | |||||||||
Accounts payable and accrued liabilities | 6,211 | (5,632 | ) | 1,783 | (9,723 | ) | ||||||||||
Income taxes payable and refundable income taxes | (1,803 | ) | (10,008 | ) | 2,037 | (22,230 | ) | |||||||||
Other | 4,406 | 3,524 | 1,340 | 2,687 | ||||||||||||
Net cash (used in) provided by operating activities | (794 | ) | 11,745 | (7,125 | ) | 41,726 | ||||||||||
Investing activities: | ||||||||||||||||
Acquisition of property and equipment | (1,122 | ) | (7,399 | ) | (11,521 | ) | (19,194 | ) | ||||||||
Acquisition of businesses, net of cash acquired | 493 | (161,973 | ) | 493 | (161,973 | ) | ||||||||||
Purchase of equity investment | — | — | — | (10,982 | ) | |||||||||||
Other | 2,315 | 110 | 2,550 | 1,029 | ||||||||||||
Net cash provided by (used in) investing activities | 1,686 | (169,262 | ) | (8,478 | ) | (191,120 | ) | |||||||||
Financing activities: | ||||||||||||||||
Payments on short-term borrowings and long-term debt | (221,164 | ) | (29,108 | ) | (528,116 | ) | (48,406 | ) | ||||||||
Proceeds from short-term and long-term borrowings | 156,212 | 133,000 | 452,722 | 133,000 | ||||||||||||
Repurchase and retirement of common stock | — | (4,492 | ) | — | (28,895 | ) | ||||||||||
Proceeds from stock offering | 56,687 | — | 56,687 | — | ||||||||||||
Issuance of common stock | 490 | 902 | 1,061 | 3,088 | ||||||||||||
Payments for debt issuance costs | (138 | ) | — | (3,638 | ) | (622 | ) | |||||||||
Net cash (used in) provided by financing activities | (7,913 | ) | 100,302 | (21,284 | ) | 58,165 | ||||||||||
Net cash (used in) provided by discontinued operations | — | (2 | ) | — | 392 | |||||||||||
Effect of exchange rate changes on cash | 1,331 | (1,230 | ) | 230 | 4,143 | |||||||||||
Decrease in cash and cash equivalents | (5,690 | ) | (58,447 | ) | (36,657 | ) | (86,694 | ) | ||||||||
Cash and cash equivalents at beginning of period | 84,066 | 132,408 | 115,033 | 160,655 | ||||||||||||
Cash and cash equivalents at end of period | $ | 78,376 | $ | 73,961 | $ | 78,376 | $ | 73,961 | ||||||||
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Entegris, Inc. and Subsidiaries
Segment Information
(In thousands)
(Unaudited)
| Three Months Ended | ||||||||||||
Net sales | September 26, 2009 | September 27, 2008 | June 27, 2009 | |||||||||
Contamination Control Solutions | $ | 65,649 | $ | 85,806 | $ | 47,541 | ||||||
Microenvironments | 32,445 | 47,630 | 26,176 | |||||||||
Specialty Materials | 12,612 | 12,353 | 8,859 | |||||||||
Total net sales | $ | 110,706 | $ | 145,789 | $ | 82,576 | ||||||
| Three Months Ended | ||||||||||||
Segment profit (loss) | September 26, 2009 | September 27, 2008 | June 27, 2009 | |||||||||
Contamination Control Solutions | $ | 12,261 | $ | 20,911 | $ | 3,181 | ||||||
Microenvironments | 5,186 | 6,855 | (155 | ) | ||||||||
Specialty Materials | 1,369 | 3,832 | (1,047 | ) | ||||||||
Total segment profit | $ | 18,816 | $ | 31,598 | $ | 1,979 | ||||||
Amortization of intangibles, impairment of goodwill, and restructuring charges | (7,091 | ) | (388,000 | ) | (10,383 | ) | ||||||
Unallocated expenses | (11,789 | ) | (21,857 | ) | (11,777 | ) | ||||||
Total operating loss | $ | (64 | ) | $ | (378,259 | ) | $ | (20,181 | ) | |||
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Entegris, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Operating Income (Loss) and Adjusted EBITDA
(In thousands)
(Unaudited)
| Three Months Ended | ||||||||||||
| September 26, 2009 | September 27, 2008 | June 27, 2009 | ||||||||||
Net sales | $ | 110,706 | $ | 145,789 | $ | 82,576 | ||||||
GAAP – Operating loss | $ | (64 | ) | $ | (378,259 | ) | $ | (20,181 | ) | |||
Restructuring costs | 2,368 | 3,332 | 5,452 | |||||||||
Impairment of goodwill | — | 379,810 | — | |||||||||
Amortization of intangible assets | 4,723 | 4,858 | 4,931 | |||||||||
Non-GAAP operating income (loss) | 7,027 | 9,741 | (9,798 | ) | ||||||||
Depreciation | 7,456 | 6,476 | 7,903 | |||||||||
Adjusted EBITDA | $ | 14,483 | $ | 16,217 | $ | (1,895 | ) | |||||
Non-GAAP operating margin | 6.3 | % | 6.7 | % | (11.9 | %) | ||||||
Adjusted EBITDA – as a % of net sales | 13.1 | % | 11.1 | % | (2.3 | %) | ||||||
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