SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K/A

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the fiscal year ended December 31, 1999

[_] 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: 0-30130

ATMI, INC.
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(Exact name of registrant as specified in its charter)

Delaware 06-1481060
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(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)

7 Commerce Drive, Danbury, CT 06810
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(Address of principal executive offices) (Zip Code)

(203) 794-1100
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(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange
Title of each class on which registered
------------------- ---------------------
None Not Applicable

Securities registered under Section 12(g) of the Act:

Common Stock, $.01 par value
----------------------------
(Title of each class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___.
---

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [X].

The aggregate market value of the voting stock held by non-affiliates of the
registrant at March 24, 2000 was approximately $1,362,503,000 based on the
closing price of $53.875 per share.

The number of shares outstanding of the registrant's common stock as of March
24, 2000 was 28,059,902.

ATMI, INC.
Annual Report on Form 10-K
For the Fiscal Year Ended December 31, 1999

TABLE OF CONTENTS

Part I Page
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Item 1. Business................................................................................ 3
Item 2. Properties.............................................................................. 20
Item 3. Legal Proceedings....................................................................... 21
Item 4. Submission of Matters to a Vote of Security Holders..................................... 21

Part II
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Item 5. Market for Registrant's Common Equity and Related Stockholder Matters................... 22
Item 6. Selected Financial Data................................................................. 23
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations... 25
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.............................. 32
Item 8. Financial Statements and Supplementary Data............................................. 32
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.... 33

Part III
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Item 10. Directors and Executive Officers of the Registrant...................................... 33
Item 11. Executive Compensation.................................................................. 35
Item 12. Security Ownership of Certain Beneficial Owners and Management.......................... 38
Item 13. Certain Relationships and Related Transactions.......................................... 39

Part IV
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Item 14. Exhibits, Financial Statement Schedule, and Reports on Form 8-K......................... 40
Index to Consolidated Financial Statements and Financial Statement Schedule....................... F-1
Signatures........................................................................................ S-1

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PART I

Item 1. Business.

We are a leading supplier of materials, equipment and related services used
worldwide in the manufacture of semiconductor devices. We specifically target
the "front-end" semiconductor materials market. This market includes the
processes used to convert a bare silicon wafer into a fully functional wafer
that contains many copies of a semiconductor device or "chip". To complete the
manufacturing process, this functional wafer is taken through a "back-end"
manufacturing process that includes wafer dicing into chips, packaging and
testing. Our customers include most of the leading semiconductor manufacturers
in the world, including Intel, Taiwan Semiconductor, Hyundai, Texas Instruments
and IBM.

We have further refined our market focus to target only specialty materials
used in front-end semiconductor manufacture. These specialty materials are used
in eight key process steps that are used repetitively to add functionality to a
silicon wafer. In recent years, the semiconductor industry has grown worldwide
and front-end manufacturing processes have become increasingly complex,
resulting in rapidly changing requirements for semiconductor materials. We have
capitalized on the growth of the semiconductor industry in general, and front-
end processing in particular, through:

. a comprehensive research and development program that has provided a
stream of proprietary and patented products for this market;

. a strategy of delivering a complete materials solution to our customers
including materials, packaging, delivery systems, sensing and abatement;
and

. an aggressive mergers and acquisitions effort that has allowed us to
more rapidly move towards one-stop purchasing for our customers.

We have organized our operations along two business segments: ATMI Materials and
ATMI Technologies. ATMI Materials provides:

. a broad range of ultrahigh-purity semiconductor materials; and

. semiconductor materials packaging and delivery systems.

ATMI Technologies provides:

. sensors for the workplace and environment that detect materials as they
move through the workplace;

. point-of-use environmental equipment that abates materials; and

. specialty thin film deposition services that provide coated wafers
directly to our customers.

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We also conduct our venture activities and our government funded research and
development activities through ATMI Technologies.

Our business has evolved to consist of an equal mix of consumables and
services that track wafer starts, or the number of silicon wafers processed into
fully functional semiconductor devices, and equipment purchases, which generally
track the expansion of industry capacity. Consequently, we believe that our
overall business is less volatile than that of a typical semiconductor capital
equipment supplier. ATMI Materials and ATMI Technologies accounted for
approximately 49% and 51%, respectively, of our revenues in 1999, and
approximately 43% and 57%, respectively, of our revenues in both 1998 and 1997.

Over the last five years, we have achieved a leadership position by
providing a more complete line of products than our competitors through
innovation and acquisitions. We plan to continue our growth through product line
expansion in each of our existing market segments and to leverage our core
technology to create new high growth businesses.

Semiconductor Industry Background

The semiconductor industry has grown in recent years as the use of
semiconductor devices has proliferated in a wide variety of consumer and
industrial products, especially in computing, networking and communications
equipment. According to the Semiconductor Industry Association, the
semiconductor industry achieved worldwide sales in 1999 of $149 billion and is
estimated to achieve worldwide sales of over $200 billion in 2001. This increase
in demand for semiconductor devices has been fueled by the ability of
semiconductor manufacturers to deliver products with:

. consistently enhanced performance characteristics and functionality;

. improved reliability;

. increased memory capacity; and

. reduced size, weight, power consumption and cost.

These advances have been made possible by innovations in the fabrication
processes, equipment and the materials used in manufacturing advanced
semiconductor devices. At the same time, as the construction and management of
fabrication facilities has become more complex, semiconductor manufacturers have
sought to streamline their supplier relationships and reduce the number of
suppliers upon which they rely. In turn, this has driven significant
consolidation among the providers of semiconductor capital equipment and
materials and materials delivery systems.

Semiconductor devices are manufactured by repeating a complex series of
process steps on a wafer substrate, usually made of silicon. The primary process
steps include various kinds of materials deposition (physical vapor deposition,
chemical vapor deposition, electrochemical deposition, ion implant and spin-on),
etch, wafer preparation (chemical mechanical polishing) and patterning
(photolithography).

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During deposition processes, several layers of conducting, semiconducting
or insulating thin films are formed on a wafer. Precise and reliable control of
the deposition of these films is vital to the ultimate performance of an
individual device.

The most mature processes for thin film deposition and modification are
physical vapor deposition, also known as PVD or sputtering, ion implantation and
spin-on deposition. In PVD, which is used primarily for the deposition of
conducting or metal layers, a high energy beam is directed at a high purity
metal target which in turn causes the displacement of metal atoms that are
showered over the wafer coating it with a thin metallic film. Ion implantation
is a gas based process used principally to modify (or dope) semiconducting
layers with a high energy beam of material that is "implanted" into an existing
thin film. In spin-on deposition, a spinning wafer is treated with a solution of
materials and solvent. The solvent is vaporized leaving the material in place
which is usually further heat treated to form the desired thin film.

Chemical vapor deposition, or CVD, is a newer process used in the
deposition of semiconducting and insulating thin films. In the CVD process,
wafers are placed in a sophisticated reaction chamber, and a specially designed
gas or vaporized liquid material is introduced. Simultaneously, a form of
energy, such as heat or plasma, is added to the reactor to cause the
decomposition of the material being introduced. As a result of this
decomposition, a thin film of material is deposited on the surface of the wafer.
The advantages of CVD over PVD based processes include:

. the relative thinness of the films applied to the wafer;

. conformality (ability to coat evenly, especially in holes and trenches
designed into the device);

. purity; and

. the ability to coat large areas.

These advantages have led to rapid growth in sales of reactors and related
CVD process consumables and equipment. Consumables and related equipment include
the raw materials used in the CVD process and the delivery systems required to
transport the materials around a semiconductor plant and to a reactor.

An even more recently developed process called electrochemical deposition,
or ECD, is now growing rapidly as a result of the industry's desire to use
copper as the conducting layer in certain devices. In ECD, the wafer is
submerged in a bath of copper electroplating solution which, when appropriately
charged, deposits a thin film of copper on the wafer.

Etch is a process that selectively erodes away certain thin film materials.
It is carried out either "dry" with corrosive gases or "wet" with energized
liquids. Chemical mechanical polishing, or CMP, is used to prepare a wafer for
hotolithography. As wafers are processed, thin film thicknesses inevitably vary
across the surface of the wafer. Due to the fine line widths used in
photolithography, present day wafers need to be perfectly flat. CMP flattens the
processed wafer by polishing the wafer using a mechanical polishing pad and a
slurry, which is an abrasive solution

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containing solid materials and chemicals which selectively erodes away the
appropriate excess materials.

Photolithography is the process whereby patterns are developed on the wafer
surface. The process is begun by pinning a photosensitive material called a
"photoresist" or "resist" onto the wafer surface and shining light through a
patterned photomask to selectively harden the resist. The resist is then
developed by stripping or otherwise removing excess resist material and allowing
for the fabrication of the wafer's circuitry.

Materials and Delivery Systems

The market for semiconductor thin film materials has expanded with the
growth of the market for semiconductor devices. The design of new thin film
deposition materials and equipment to transport these materials around a
semiconductor plant has experienced ongoing innovation. This innovation has been
driven by the demand for expanding semiconductor device capabilities and
corresponding decreases in circuit dimensions. Safe and effective thin film
deposition requires dedicated systems designed to deliver and vaporize precursor
materials for deposition in reactors without contamination or inadvertent
release of toxic gases.

Because thin film materials are consumables, the market for these materials
and delivery systems generally tracks wafer starts, as opposed to the market for
equipment, which generally tracks investment in new plants. The thin film
materials market is also segmented into a wide variety of material types and
forms. For example, many thin film precursors are now sold as pressurized gases,
which allows for easy transport around a typical semiconductor manufacturing
plant. However, many of these gases are toxic and/or hazardous, leading to the
development of safer alternatives including the use of liquid or solid materials
and the adoption of gas handling technologies and delivery systems that minimize
the danger of a catastrophic release of toxic gas. We estimate that the total
annual market in 1999 for specialty thin film deposition, etch, CMP,
photolithography materials and delivery systems exceeded $3 billion.

Materials Packaging. Semiconductor materials have exceptional purity
requirements due to the extremely low tolerances for impurities and particulates
in semiconductor processing. Gases are in a form whereby particulates can be
readily managed. Liquids and solids, however, require special packaging to
minimize exposure to air and particulates.

Materials Sensing and Monitoring. Semiconductor gases pose unique toxicity
and environmental difficulties. As a result, the need for devices to sense and
warn personnel of leaks or possible catastrophic releases of these gases is
compelling. To that end, a market for toxic gas sensing devices and systems has
grown up in tandem with the semiconductor industry. Semiconductor fabs are now
outfitted with a high level of sensing technology to protect the workplace and
the environment. Furthermore, this technology is being integrated with factory
operations to prevent and/or minimize damage or productivity of the plant and
its personnel. We believe the market for this type of materials sensing
equipment exceeded $150 million in 1999.

Sensors are also required to monitor materials purity and concentration.
The ability to integrate sensors to control processing equipment is also
critical to the productivity of the high capital intensive semiconductor fabs.
So-called "in-process sensing" is growing rapidly with the increasing complexity
of semiconductor processing.

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Environmental Equipment

The use of gas and vapor based processes has led to the development of
environmental equipment designed to abate gaseous effluent. For example, less
than 40% of the materials entering a CVD reactor are deposited as a thin film.
The remainder of the source materials, and certain by-products, constitute an
effluent stream containing toxic and hazardous material that must be abated to
meet increasingly strict worldwide environmental, safety and health regulations.
Traditionally, abatement has been accomplished by the use of "whole plant"
environmental systems, which aggregate the effluents from an entire facility.
However, variations in the processes used and the drive for increased
productivity have led to the growth of point-of-use environmental systems in
which a single environmental unit is attached to a single reactor. This approach
provides for superior abatement because the system can be tuned to the unique
hazards of a particular effluent stream. In addition, point-of-use environmental
systems can improve plant productivity by reducing downtime associated with
servicing environmental systems. We believe the market for this type of
point-of-use environmental equipment exceeded $200 million in 1999.

Deposition Services

The demand for higher performance integrated circuits and discrete
semiconductor devices has driven the use of pitaxial wafers in a wide variety of
applications. Epitaxial, or "epi", wafers are wafers on which CVD thin films
have been deposited. A merchant market for epitaxial wafers, primarily silicon
epitaxial wafers, has in recent years developed due to the high degree of
expertise and significant capital expenditures required by epitaxy. According to
Dataquest Inc., this market was $2.0 billion in 1998. This market is subdivided
into "generic" wafers for high volume applications such as dynamic random access
memory, or DRAM, and "specialty" wafers for use in applications such as
automotive electronics and sensors, silicon-based low power telecommunications
circuits, analog power controls and robust application-specific integrated
circuits. We believe that specialty epi products accounted for approximately 15%
of the total epi wafer market or $300 million in 1998 and will constitute a
significant portion of the overall growth of the merchant market for epitaxial
wafers.

The continued drive for improved device performance and new applications
for integrated circuits has led to the development and commercialization of
alternative semiconductor technologies. A newer generation of devices has
emerged that uses epitaxial wafers made of III-V and wide bandgap materials, as
opposed to silicon, to achieve this improved performance. III-V semiconductors,
including gallium arsenide and indium phosphide, are finding increasing use in
wireless communication devices where high frequency performance is critical, in
optoelectronic devices where the electronic structure of the III-V
semiconductors allows energy-efficient light generation and in solar cells for
satellite applications where efficient generation of electricity is critical.
Wide bandgap semiconductors, such as silicon carbide and gallium nitride, offer
advantages in high power, optoelectronic and high temperature devices. We
believe the market for all wide bandgap materials for both electronic and
optoelectronic applications was $9.0 billion in 1999.

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ATMI's Strategy

Our objective is to establish and enhance leadership positions in each of
the market segments we serve. Our strategy consists of the following key
elements:

. We target high growth, high margin specialty markets that use our core
materials technologies and require products that are consumed in the
production process.

. We seek to provide full market-basket solutions, or "one-stop shopping",
through innovation and acquisitions in each of our target markets to
help our customers streamline supplier relationships.

. We provide added value through advanced packaging and dispensing
systems designed to meet the demands of users for greater levels of
purity, productivity, safety and environmental responsiveness.

. We leverage our technology leadership by investing extensively in
developing proprietary and patented materials and materials handling
technology which we use to commercialize new products to meet customer
requirements.

. We form strategic alliances, including joint development programs and
collaborative marketing efforts, to accelerate the introduction of our
products into markets that have manufacturing and/or distribution
barriers.

Businesses and Products

We conduct our operations through two primary business segments: ATMI
Materials and ATMI Technologies.

ATMI Materials

We believe ATMI Materials is one of the fastest growing suppliers of
ultrahigh purity semiconductor materials and related packaging and delivery
systems to the semiconductor industry. We have taken advantage of the changes in
the market for materials and delivery systems by:

. developing and commercializing a wide range of "front-end" semiconductor
materials;

. commercializing innovative bulk delivery systems which automatically
deliver materials of the highest purity and consistency to a process;

. developing innovative packaging systems that allow for the introduction
of low volatility liquids and solids to semiconductor processes;

. developing and commercializing patented low-pressure gas delivery
systems for safe handling and delivery of toxic and hazardous gases to
semiconductor process equipment; and

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. developing manufacturing processes to meet the critical purity and
integrity requirements of the microelectronics industry.

In meeting the needs of our customers, which include semiconductor device
manufacturers, chemical suppliers and OEMs located throughout the world, and
anticipating their future requirements, we seek:

. to offer the most complete line of consumable and delivery and packaging
system products;

. to offer the most consistent, highest purity materials available;

. to offer the most reliable, innovative equipment products;

. to improve the level of customer service, technical support and response
offered and to remain cost-effective to our customers;

. to meet customer needs for statistical quality and process control and
dock-to-stock programs; and

. to continue to meet the industry's needs for advanced materials required
for future generation devices.

Products and Services. ATMI Materials has four primary product lines, which
consist of liquid materials, liquid delivery systems, gas delivery systems and
advanced packaging and dispensing systems. ATMI Materials also provides services
relating to each of these product lines.

Liquid Materials. We produce a broad range of materials that are used in
making semiconductor devices. In addition to the widely used CVD precursors such
as TEOS and related dopants, we also sell thin film materials used in other
semiconductor manufacturing processes, including phosphorous and boron halides
used for doping by diffusion processing. We also manufacture and sell source
reagents that allow CVD of advanced materials, including titanium nitride,
platinum, copper, tantalum oxide, lead zirconate titanate, strontium bismuth
tantalate and barium strontium titanate thin films.

All of these thin films must be of very high purity in order to function
properly within the device, particularly with respect to unwanted metallic
contamination. We believe that our cleaning and container technology produces
the most consistent, highest purity chemicals in the industry and ensures their
quality as delivered into the reactor.

We also produce a wide range of liquid products for photoresist stripping,
edge bead removal, developing and cleaning. In addition, we recently entered the
rapidly growing market for CMP slurries. We now provide high performance oxide
polishing slurries, and we expect to introduce advanced metal slurries.

Liquid Delivery Systems. We design, manufacture and sell proprietary
continuous refill and delivery systems. These systems are designed to deliver
ultrahigh-purity thin film materials to the

-9-

CVD reactors under the desired physical conditions. Our delivery systems include
stainless steel ampules, stainless steel MINIBULK canisters, stainless steel
SKINNIBULK canisters, quartz bubblers, bulk chemical delivery cabinets, level
sensing systems, manual and continuous refill systems and other application-
specific equipment.

We believe that our continuous refill systems enhance the performance of
the process tools they support by eliminating process downtime resulting from
canister changes. Typically, process tools must cease operation when canister
changes are made to replenish source material. Our bulk refill systems allow
continuous delivery of source material. In addition to the elimination of the
downtime associated with canister changes, this configuration also minimizes the
atmospheric and moisture contamination that can occur during these change-outs.

Gas Delivery Systems (the SDS or Safe Delivery System). Our patented SDS
product line uses a standard gas cylinder containing an adsorbent material. The
cylinder is filled with gas under conditions such that the gas is adsorbed onto
the material, and the SDS cylinder is at sub-atmospheric pressure, minimizing
any potential leak of hazardous gas and allowing more gas to be introduced into
the cylinder than would be possible under traditional high pressure conditions.
Consequently, material delivery via SDS is safer and provides significantly
higher rates of productivity than traditional methods. Since most semiconductor
processes operate at reduced pressure and the gas can be desorbed or released
from the SDS under vacuum, it can be installed and operated like a conventional
high-pressure gas cylinder. These advantages have led major chip manufacturers
to adopt this technology.

To date, we have introduced products using the SDS technology to deliver
several gases, including arsine, phosphine, boron trifluoride, silicon
tetrafluoride and germanium tetrafluoride. Each is used to "dope" silicon wafers
using ion implant processes. All of these SDS products are available in
different size cylinders, and some have different adsorbents that allow for
additional gas capacity within a cylinder. These products are manufactured by
us, and for us by Matheson Gas Products, our exclusive distributor for SDS used
in ion implant applications.

We also believe that significant markets for SDS exist outside ion implant.
We are now commercializing SDS for CVD applications. We have also undertaken
extensive development efforts to identify new markets and products for the SDS
technology. We believe that certain etch gases used in the semiconductor
industry and certain gases normally delivered in bulk within the semiconductor
industry are possible candidates for the SDS process.

Advanced Packaging and Delivery Systems. We manufacture three different
types of NOWPak container assemblies: "Bag-in-a-Bottle"; "Bag-in-a-Can"; and
"Bag-in-a-Drum". Each features a pre-cleaned collapsible inner liner, or "bag",
inside a rugged, high-density polyethylene or stainless steel overpack. The
standard liner film is made of olytetrafluoroethylene which allows virtually all
chemicals to be delivered to the manufacturing process in an unaltered state.
The empty inner liner is easily removed for waste consolidation, and the outer
shell is recyclable or returnable for insertion of a new replacement liner.

The largest market for NOWPak's packaging is materials for photoresists.
These materials are typically packaged in one liter through ten liter Bag-in-a-
Bottle containers. The NOWPak's market applications for photoresists used in the
manufacture of active matrix flat panel displays as well as for the
pharmaceutical, biotech and laboratory markets are typically in 18-20 liter Bag-
in-a-

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Bottle and Bag-in-a-Can containers. Additionally, applications have recently
expanded beyond photolithography chemicals in the semiconductor niche to include
ancillary chemicals, CMP slurries and process chemicals for which the new 200
liter Bag-in-a-Drum is well suited.

We also produce packages for high purity solids under the Newform brand
name. We make high-purity flexible Ultra Clean packaging for the semiconductor
and pharmaceutical industries. With our Newform products, we package critical
solids-sputter targets, wafer and disc shippers, cleanroom parts and container
overwraps. With the NOWPak liquid packaging system and Newform solids packaging,
we are addressing all facets of critical packaging for the microelectronics
market.

ATMI Technologies

We have taken advantage of our expertise in semiconductor materials
technology to build a comprehensive product portfolio around this core
technology. Effectively, ATMI Materials' business ends with the delivery of a
specialty material to a semiconductor industry process tool. Through its common
core technical understanding of these materials, ATMI Technologies delivers
products and services that allow its customers to manage materials flow through
the remainder of the semiconductor factory. ATMI Technologies addresses its
customers' needs by providing:

. sensing products that protect both the workplace and the environment;

. monitoring products for certain processes that ensure the quality of the
thin film product being produced;

. a full range of abatement products that remove potential environmental
threats from the process exhaust stream; and

. specialty thin film deposition services for those customers who do not
desire to perform this operation within their own facilities.

As a result of this strategy, we believe ATMI Technologies is the leading
supplier of sensing products, point-of-use abatement systems and specialty
epitaxial deposition services to the worldwide semiconductor industry. ATMI
Technologies also manages our ventures portfolio, which includes the Emosyn
smart card device product line and our optoelectronic materials activities,
until these ventures mature to market critical mass.

Products and Services. ATMI Technologies includes three primary product
lines and services, which consist of sensing products, point-of-use
semiconductor environmental equipment and deposition services.

Sensing Products. We provide life safety systems to the semiconductor
industry. Because the gases used in semiconductor manufacturing are so toxic,
manufacturers must install systems which protect employees from accidental
releases. We believe that we are now the only company offering a range of
technologies capable of detecting all of the gases used in semiconductor
manufacturing. Combined with our worldwide systems integration capabilities, we
are able to provide customers with a single contact for the design,
installation, commissioning and sustaining service on complete life safety
systems.

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Satellite series electrochemical sensors provide distributed sensors
located at each point requiring gas detection. Electrochemical sensors provide
cost effective and reliable detection of most gases used in semiconductor
fabrication. This sensor's self-check feature and auto-calibration feature
provide maximum reliability and ease of use and are the leading sensor
technology for acid gases in a fab.

ACM Air Composition Monitors allow the fab to determine the exact
composition of any gas that is emitted in the fab. This system allows the fab to
determine exactly the composition of unknown odors that fab personnel may
detect. It also is the only known detection device in the industry that can
measure NF3 without the need to decompose it into another species for detection.

TGM Toxic Gas Monitors use molecular emissions spectroscopy to measure and
speciate toxic gases. This system is the leading technology for sensing the very
toxic hydride gases used to dope semiconductor films.

H2M Hydrogen Monitors use a patented acoustical technology that measures
the time of flight of hydrogen in a enclosed tube. We believe this system is the
only system on the market that can detect hydrogen without interference from
other gases such as hydrocarbons. As a result, we believe this system is the
most reliable way to detect hydrogen.

Semi-Chem Fluid Process Monitors are unique liquid sensing devices that use
multiple liquid analysis technologies. These devices analyze the signals they
receive with complex algorithms and measure the precise assay of materials that
effect the overall yield of a device. We also provide a unique and high value
added liquid chemical analysis and control tool. We believe that we are a market
leader in the analysis and control of the active ingredients in CMP slurries. In
addition, we believe that we are well positioned to provide leading technology
to the semiconductor copper plating market through product development
activities with industry leaders.

Point-of-Use Semiconductor Environmental Equipment. We believe we are the
only provider of point-of-use environmental equipment offering all of the key
technologies for effluent gas abatement to the semiconductor industry: dry
chemical; liquid; and active oxidation. As a result of this broad product line,
we believe we are a global market leader in the manufacture and sale of
point-of-use semiconductor effluent abatement equipment. Our strategy is to row
our market share through the continued development and acquisition of new
semiconductor environmental products and services. We believe that this full
line of semiconductor environmental products, coupled with a comprehensive
service and sensing strategy, will allow for continued market penetration by
this business.

We have four primary environmental equipment product lines. Each of the
four major point-of-use products has cost of ownership advantages for
semiconductor customers in certain applications such as CVD, ion implant and
etch.

Novapure dry chemical scrubbers adsorb and concentrate hazardous effluent
through the use of consumable resins at rates many times that of conventional
effluent treatment methods. We believe that, through our patented adsorption
materials, we are a market leader for point-of-use semiconductor effluent dry
scrubbing throughout the world. This technology is typically used for ion
implant applications, in conjunction with our SDS product line. It is also used
for each and certain CVD applications.

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Vector wet scrubbers are designed for cost effective removal of acidic and
high particulate bearing gases commonly used in the wafer fabrication process.
Vector scrubbers recirculate scrubbing water, minimizing overall water use, and
are effective in removing high particulate effluent and, with its optional air-
oxidation inlet, pyrophoric gases. The Vector scrubber is typically used in
CVDand etch applications. It is the leading treatment system for multi-wafer
chamber CVD tools.

Guardian active oxidation scrubbers treat a variety of combustible
materials used in semiconductor processing. The Guardian product line is
designed for high reliability and very high flow rates of combustible gases
typically used in CVD and flat panel display applications.

Delatech CDO oxidation and water treatment scrubbers use a combination of
thermal oxidation and wet scrubbing to treat solid particulate and acid gas
applications in a single unit. This system can also be used to treat PFCs
(perfluorinated compounds believed to be responsible for global warming). This
system is the industry's leading treatment solution for single wafer chamber CVD
tools.

Deposition Services. In addition to deposition on patterned wafers, CVD
thin film processes are used to prepare bare wafers prior to the fabrication of
integrated circuits to provide the wafer surfaces with the desired uniformity of
electrical and physical properties. Such CVD thin film deposition is referred to
as epitaxial deposition, and these wafers when processed are referred to as
epitaxial, or "epi", wafers. The complexity, sensitivity, and capital intensive
nature of the CVD processes used for epitaxy have created a market for epitaxial
thin film deposition services, or contract manufacture of epi wafers using CVD
processes.

ATMI Technologies operates a service business providing specialty epitaxial
deposition services for silicon, III-V and wide bandgap wafers. Desired
electrical and physical properties of the epitaxial layers are specified by the
customer and developed in collaboration with us. The properties of the epitaxial
layers are selected to maximize the performance of the customer's integrated
circuit or device while maximizing yield and minimizing cost. Our fundamental
competitive advantages include the manufacture of high quality epitaxial layers
with high yield. In addition, we differentiate ourselves by offering quality
epitaxial deposition services with fast turnaround and in flexible volumes.

We believe that we are the only provider offering CVD thin film deposition
services for each of the key materials used in semiconductor devices today, and
that we are now a world leader in specialty epitaxial deposition services. Our
strategy is to maximize market share through the continued development and
acquisition of new semiconductor thin film products and services. A key element
of the business strategy is to work with the customer in the early stages of
product development to ensure that proven epitaxial processes are in place when
the decision is made to expand into manufacturing.

We provide commercial epitaxial deposition services for silicon and III-V
materials. III-V epitaxial wafers are finding increasing use in wireless
communications, satellites and optoelectronics for data and telecommunication
markets. Epitaxial services for wide bandgap semiconductors and several new
products in silicon and gallium arsenide are in development. We are currently
engaged in several collaborations to develop wide bandgap epitaxial wafers for
future

-13-

optoelectronic, sensor and power device products. Furthermore, we are developing
a silicon germanium epitaxial process for use in silicon-based heterojunction
devices for high speed communication and computation integrated circuits and a
ultrathin silicon on sapphire process for use in high frequency, low power
applications. We are also continuing development of epitaxial structures for
gallium arsenide-based electronics devices including heterojunction bipolar
transistors and high electron mobility transistors in collaboration with our
customers.

Ventures. We also maintain an active in-house venture program. The primary
goal of this program is to develop next-generation semiconductor materials
technology that is beyond the product development scope of our existing core
businesses. The research and development funding that we apply to this program
is enhanced through federal government contract or partner funding in nearly all
cases.

Smart Card Device Venture. We are currently developing and commercializing
integrated circuits for use in smart cards. Smart cards are credit card-like
devices that operate through a chip on the card as opposed to the more familiar
magnetic strip. The smart card is read through insertion into a "reader" that
clamps down on the device and simultaneously powers it up and performs a
multitude of operations. The smart card market is growing rapidly, especially in
Europe, in the mobile phone, health care and transportation industries. Long
term, we expect that smart cards will see wide use in secure internet
transactions.

We entered this market to leverage certain proprietary advanced non-
volatile materials technology. To facilitate the development of these
integrated circuits, we have entered into a strategic alliance with a subsidiary
of SMH Swatch, the largest watch maker in Switzerland, to design, develop,
manufacture and distribute these products. In November 1998, we also entered
into a strategic alliance with Xicor, Inc. that gives us the right to become
Xicor's exclusive sales channel for Xicor integrated circuit products targeting
smart card applications. We also hold an option to purchase this product line
beginning in 2001.

Our first smart card products are targeted at the fast-growing market for
micro-controller-based smart card IC's. The combination of our expertise in
non-volatile memory technology with SMH Swatch's expertise in ultra-low power
and radio frequency technology has enabled the launch of a device called
"Theseus" which provides high density, speed, power and memory partitioning.
Our approach to memory technology design provides a smart card solution that
significantly reduces the major problem of time-to-market for the card
manufacturers with no increase in device size. We are now working to specify
our products with smart card manufacturers, and in the fourth quarter of 1999,
we shipped our first commercial product.

Other Venture Activities - Optomaterials. We have oriented much of our
effort in the ventures program area towards the development of optoelectronic
materials, especially gallium nitride. We believe that our unique technology in
this area, in both substrate and epi layer manufacture, will allow us to enter
new rapidly growing markets as either a supplier of these materials or as a
partner in the development of advanced optoelectronic devices such as blue laser
diodes and high performance light emitting diodes.

-14-

Customers, Sales and Marketing

We sell and distribute our products worldwide, both directly and through
manufacturers' representatives. Many of our customers have relationships with
more than one of our segments or are acting as collaborators on our development
programs.

We distribute our materials and delivery system products to end-use
customers, chemical suppliers and equipment suppliers through our direct sales
force in North America, Europe and Taiwan, and through regional manufacturing
representatives in other parts of Asia. Additionally, our equipment product
lines are marketed and sold to semiconductor equipment OEMs, who in turn resell
to end users. NOWPak containers are generally sold to chemical suppliers. The
chemical companies then sell their high purity chemicals in NOWPak containers at
the request of end-users. Newform packaging products have historically been
sold directly to semiconductor and pharmaceutical companies, predominately in
Europe. We sell our SDS product into the ion implant market through an
exclusive distribution agreement with Matheson.

The businesses within ATMI Technologies distribute products both directly
and through various manufacturing representatives.

We distribute our point-of-use environmental equipment and life safety
monitoring equipment through manufacturers' representatives throughout the
world. Direct sales personnel serve as regional managers who coordinate the
representatives' activity within their respective regions. Additionally, we
market environmental equipment product lines directly to semiconductor end-user
facility managers to provide full-fab environmental and monitoring solutions as
well as installation and on-going service.

We market and sell our thin film deposition services and epitaxial wafers
primarily on a direct basis. In particular, silicon epi wafers and services are
sold directly throughout the world. Wide bandgap and III-V epitaxial wafers are
sold directly in North America and through distributors and agents in Europe and
Asia.

Substantially all of our sales are to customers in the worldwide
semiconductor industry. Our results of operations, therefore, are materially
dependent upon economic and business conditions in the semiconductor industry.
The semiconductor industry has historically experienced significant growth;
however, periods of reduced semiconductor unit demand and manufacturing
overcapacity could result in significantly reduced demand for semiconductor
materials, capital equipment and wafer processing services.

-15-

Manufacturing

The following table summarizes the location, products and size of our
various manufacturing facilities as of December 31, 1999.

Location Products Square Footage
---------------------------------------------------------------------------------------------------------

ATMI Materials Bloomington, MN . chemical containers 70,000
and dispensing systems
---------------------------------------------------------------------------------------------------------
Burnet, TX . liquid materials 30,000
---------------------------------------------------------------------------------------------------------
. delivery systems
---------------------------------------------------------------------------------------------------------
Carrollton, TX . liquid materials 30,000
---------------------------------------------------------------------------------------------------------
. delivery systems
---------------------------------------------------------------------------------------------------------
Danbury, CT* . liquid materials 72,000
---------------------------------------------------------------------------------------------------------
. delivery systems
---------------------------------------------------------------------------------------------------------
. SDS
---------------------------------------------------------------------------------------------------------
Anseong, South Korea . liquid materials 9,000
---------------------------------------------------------------------------------------------------------
Hoegaarden, Belgium . packaging products 30,000
---------------------------------------------------------------------------------------------------------
ATMI Technologies Buffalo Grove, IL . monitoring equipment 33,000
---------------------------------------------------------------------------------------------------------
Danbury, CT* . proprietary adsorbents 72,000
for gas treatment products
---------------------------------------------------------------------------------------------------------
. wide bandgap epitaxial wafers
---------------------------------------------------------------------------------------------------------
. high performance thin films
---------------------------------------------------------------------------------------------------------
Mesa, AZ . specialty silicon 33,000
epitaxial wafers
---------------------------------------------------------------------------------------------------------
Napa, CA . point-of-use 40,000
environmental equipment
---------------------------------------------------------------------------------------------------------
Phoenix, AZ . III-V epitaxial wafers 15,000
---------------------------------------------------------------------------------------------------------
San Jose, CA . point-of-use 45,000
environmental equipment
---------------------------------------------------------------------------------------------------------
Bonn, Germany . monitoring equipment 12,000
---------------------------------------------------------------------------------------------------------
Munich, Germany . monitoring equipment 30,000
---------------------------------------------------------------------------------------------------------
Seoul, South Korea . point-of-use 3,000
environmental equipment
---------------------------------------------------------------------------------------------------------

*Corporate Headquarters

-16-

Competition

ATMI Materials

Our primary competitors in semiconductor materials in the United States are
the Schumacher Division of Air Products Corporation and the Diffusion Systems
Division of Arch Chemical (in CVD precursors) and the EKC division of ChemFirst
Corporation and the ACT division of Ashland Chemical (in photolithography
ancillaries). We compete with these companies outside of the United States and
also with Yamanaka Hutech Corporation and Kojundo in Asia, and Merck in Europe.
There are a number of other smaller participants in these markets.

There are currently no direct competitors to our patented SDS product.
Several companies, however, provide gases in high-pressure containers that
compete with the process capability of SDS. There are numerous domestic and
foreign companies that offer products that compete with our packaging and
chemical dispensing system products. However, we believe that our ability to
compete in the markets for containers and dispensing systems is dependent
largely upon our patented NOWPak technology and our proven ability to
continually enhance and improve our products and technologies.

ATMI Technologies

Our competitors in effluent abatement include CS GmbH, Ebara, Japan
Pionics, and the Edwards Division of British Oxygen Corporation. Our primary
competitors in sensing products include MDA in the United States and Europe and
Riken in Japan.

We have different competitors in each of our primary deposition services
areas. In silicon epi, we compete with Moore Technologies, Reaction
Technologies and a number of specialty wafer manufacturers with their own epi
capabilities. In some product areas, we compete with the major silicon wafer
manufacturers including Wacker, Mitsubishi Silicon America and Sumitomo. In
III-V epi, we compete with Kopin, Epitaxial Products International, Emcore and a
number of other manufacturers.

Our Emosyn business is evolving as a commercial presence in a very large
smart card IC marketplace. Several large companies are also working to provide
semiconductor devices into that marketplace, including Phillips, Atmel and
Samsung.

Research and Development

Our research and development expenses consist of personnel and other direct
and indirect costs for internally funded project development. Our external
funding is almost exclusively from various agencies of the federal government.
We also participate in joint development efforts with certain semiconductor
manufacturers and semiconductor equipment OEMs. Total sums expended for
research and development for the years ended December 31, 1999, 1998 and 1997
were $23.1 million, $22.5 million and $22.2 million, respectively. Of those
amounts, $4.7 million, $5.9 million and $7.9 million, respectively, were
externally funded and are classified within cost of revenues on our
consolidated financial statements, and $18.4 million, $16.6 million and $14.3
million, respectively, were internally funded expenditures and are classified as
research and development expenses on our consolidated financial statements.
Total research and development

-17-

expenditures from internal and external funding represented 11.8%, 13.6% and
11.6% of our revenues in 1999, 1998 and 1997, respectively.

Strategic Alliances

We form strategic alliances, including joint development programs and
collaborative marketing efforts, to accelerate the introduction of our products
into markets that have manufacturing and/or distribution barriers. These
programs have led to significant technological advances, including the
development of proprietary advanced materials and semiconductor manufacturing
processes. Most of our strategic alliances are with leading semiconductor
manufacturers or OEMs, such as IBM, Lucent Technologies, Micron Technology,
Siemens and Texas Instruments, each of which has participated with us in
advanced materials development programs. These programs enhance our core
technology base, promote the introduction of targeted products and reduce our
need to make research and development and capital expenditures.

Backlog

Neither our liquid materials business, which conducts significant portions
of its business with open-ended, long-term supply contracts which do not specify
quantities, nor our specialty thin film deposition services business, which
generally operates with fast turnaround, maintain significant backlog. Also,
the SDS gas delivery source product, marketed through Matheson as an exclusive
distributor for the ion implant market, carries no backlog. Because orders
comprising our backlog may be canceled, and delivery schedules may be changed,
our backlog at any particular date may not be indicative of actual sales for any
succeeding period.

We consider orders for products shippable within six months of the backlog
date and fully executed and funded research contract awards as of the backlog
date as firm backlog. As of December 31, 1999, we had firm backlog of
approximately $25.2 million, consisting of approximately $22.4 million of
product orders and approximately $2.8 million of executed and funded research
contracts. This compares to a firm backlog level of approximately $16.4 million
as of December 31, 1998, which consisted of approximately $8.5 million of
product orders and approximately $7.9 million of executed and funded research
contracts. The increase in product backlog when comparing 1999 to 1998 was due
to the strengthening in the capital spending cycle in the semiconductor
industry, since EcoSys product lines normally constitute the majority of our
backlog.

Patents and Proprietary Rights

We have made a significant investment in securing intellectual property
protection for our technology and products. We protect our technology by, among
other things, filing patent applications for technology considered important to
the development of our business. We also rely upon trade secrets, unpatented
know-how, continuing technological innovation and the aggressive pursuit of
licensing opportunities to help develop and maintain our competitive position.

As of March 10, 2000, we had been awarded 172 United States patents and had
164 United States patent applications pending. Foreign counterparts of certain
of these applications have been filed, or may be filed at an appropriate time.
We decide on a case-by-case basis whether, and in what countries, we will file
counterparts of a United States patent application outside the United

-18-

States. Our United States patents expire between 2006 and 2019. We also hold 20
United States registered trademarks. We are actively using all United States
trademarks.

Our ability to compete effectively with other companies will depend, in
part, on our ability to maintain the proprietary nature of our technology.
Although we have been awarded, have filed applications for, or have been
licensed under numerous patents in the United States and other countries, there
can be no assurance concerning the degree of protection afforded by these
patents or the likelihood that pending patents will be issued.

We require all employees and most consultants, outside scientific
collaborators, sponsored researchers and other advisors to execute
confidentiality agreements upon the commencement of employment or consulting
relationships with us. These agreements provide that all confidential
information developed or made known to the individual during the course of the
individual's relationship with us is to be kept confidential and not disclosed
to third parties except in specific circumstances. All of our employees have
entered into agreements providing for the assignment of rights to inventions
made by them while employed by us.

Environmental Regulation

We use, generate and discharge toxic, volatile or otherwise hazardous
chemicals and wastes in our manufacturing, processing, and research and
development activities. As a result, we are subject to a variety of
governmental regulations related to the storage, use and disposal of these
materials. Our failure to comply with present or future laws could result in
fines or other liabilities being imposed on us, suspension of production or a
cessation of operations.

The various premises, particularly the premises in Danbury, Connecticut,
may have been contaminated prior to occupancy. We are not aware of any
environmental investigation or action by government agencies involving these
premises. However, under federal and state statutes and regulations, a
government agency may seek to recover its response costs and/or require future
remedial measures from both operators and owners of property where releases of
hazardous substances have occurred or are ongoing. The prior occupant of the
Danbury, Connecticut premises has agreed to indemnify us for remediation costs
in connection with any pre-existing, on-site contamination or environmental
condition. However, this indemnification may not prove adequate to cover any
liability imposed on us related to the environmental condition of the premises
or the cost of defending an environmental action, either of which could be
substantial.

Our activities may also result in our being subject to additional
regulation. Such regulations could require us to acquire significant additional
equipment or to incur other substantial expenses to comply with environmental
laws. Our failure to control the use of hazardous substances could subject us
to substantial financial liabilities.

Employees

As of December 31, 1999, we employed a total of 902 individuals, including
355 in sales and administration, 462 in operations and 85 in research and
development. Of these employees, 38 hold Ph.D. degrees and 21 hold other
advanced degrees in electrical engineering, materials science, chemistry,
physics or related fields. None of our employees are covered by collective
bargaining

-19-

agreements. We have not experienced any work stoppages, and consider our
relations with our employees to be strong.

Item 2. Properties.

Our headquarters are located in Danbury, Connecticut, where we lease a
72,000 square foot facility. We occupy this facility under a lease which
expires on August 31, 2005. We believe our existing facility is adequate and
suitable for our current and anticipated needs. We also lease 6,500 square feet
of office and warehouse space in Tsinchu, Taiwan and 1,500 square feet in
Whitney, UK.

Our liquid materials operations are located in Texas. We own approximately
six acres of property in Burnet, Texas, on which a 30,000 square foot
manufacturing facility is located. We also lease a 30,000 square foot
manufacturing facility in Carrollton, Texas, expiring in 2002 and 4,000 square
feet of office space in Austin, Texas, expiring in June 2000. We believe that
our liquid materials operations and manufacturing facilities with its potential
for expansion are adequate for the current and anticipated level of demand.

We also own approximately 1.4 acres and a 9,000 square foot manufacturing
facility in Anseong, South Korea.

Our advanced packaging and delivery systems operations are housed in a
70,000 square foot leased facility located in Bloomington, Minnesota, including
approximately 20,000 square feet of cleanroom manufacturing. The lease expires
in 2000, with two, three-year renewal options. Additionally, we own a 70,000
square foot facility on approximately 3.7 acres of land in Hoegaarden, Belgium
where advanced packaging products are manufactured. We believe these facilities
are adequate and suitable for our current and anticipated needs for these
product lines.

Our point-of-use environmental equipment and sensor products are
manufactured at various sites around the world. We lease 45,000 square feet of
facilities in San Jose, California, which lease expires in March 2003. We own
approximately 4 acres of property in Napa, California, on which a 24,000 square
foot manufacturing facility is located. Additionally we lease 29,500 square
feet in Buffalo Grove, Illinois, 30,000 square feet near Munich, Germany and
approximately 11,500 square feet in Bonn, Germany which house production of the
sensor product lines. These leases expire in June 2003, June 2002 and September
2003, respectively. Finally, we lease 3,000 square feet of manufacturing space
near Seoul, South Korea as well as approximately 2,500 square feet of office
space in Singapore. We believe these facilities are adequate and suitable for
our current and anticipated needs for our environmental equipment and sensor
product lines.

Our specialty thin film deposition services are headquartered in Mesa,
Arizona. Our Mesa facility measures 33,000 square feet, is expandable to 50,000
square feet and houses the specialty silicon epitaxial service business. We
also lease a 15,000 square foot facility in Phoenix, Arizona, where the III-V
epitaxial business is located, which lease expires August 2001. The wide
bandgap epitaxial business is housed in our corporate facility in Danbury,
Connecticut. We obtain certain of our manufacturing equipment by entering into
capital leases while other equipment is held subject to liens on the related
equipment securing notes payable. We believe these facilities are adequate and
suitable for our current and anticipated needs for our specialty thin film
deposition services.

-20-

Item 3. Legal Proceedings.

We have been notified by the Internal Revenue Service of an assessment of
$2.1 million for certain tax matters related to our Advanced Delivery and
Chemical Systems subsidiary. Although we believe that this assessment is
without merit and we intend to vigorously defend our position on these tax
matters, we cannot predict whether we will be successful in defending against
the assessment or the amount of any final assessment against us.

In December 1998, a former office employee (Cheryl Reed) of ADCS initiated
a legal proceeding against ADCS and us in the District Court for the 33rd
District in Burnet, Texas, alleging personal injuries to her minor child (then
unborn) allegedly resulting from her exposure to various chemicals while
employed by us. The plaintiffs have claimed damages of $25.0 million and
unspecified exemplary damages. We have denied the plaintiffs' legal allegations
and are vigorously defending this action. While we cannot predict the outcome
of this proceeding at this time, we believe it is without merit.

In addition, in the normal course of business, we are involved in various
lawsuits and claims. Although we cannot determine the ultimate outcome of any
of these legal proceedings at this time, management, including internal counsel,
does not believe that the outcome of these proceedings, individually or in the
aggregate, will have a material adverse effect on our financial position or
overall trends in results of operations.

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

No matter was submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the fiscal
year ended December 31, 1999.

-21-

PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.

Our common stock is traded on the Nasdaq National Market under the symbol
"ATMI". The following table sets forth for the periods indicated the high and
low sales prices for our common stock as reported on the Nasdaq National Market:

High Low
----- -----
Fiscal year ended December 31, 1998
First Quarter 31.19 20.00
Second Quarter 33.75 13.25
Third Quarter 20.00 10.88
Fourth Quarter 25.38 11.25

Fiscal year ended December 31, 1999
First Quarter 31.00 16.88
Second Quarter 30.00 18.25
Third Quarter 38.00 27.50
Fourth Quarter 38.00 20.81

As of March 10, 2000, we had approximately 267 holders of record of our
common stock.

We have never declared or paid any cash dividends on our capital stock. We
currently intend to retain any future earnings to finance future growth and do
not anticipate paying any cash dividends in the future. Certain financing
agreements of our subsidiaries contain limitations on the payment of dividends
without the lender's consent or in connection with a subsidiary's failure to
comply with various financial covenants.

The transfer agent and registrar for our common stock is Boston EquiServe,
L.P.

On November 24, 1999, we issued to the former shareholders of Newform,
N.V., a Belgium corporation, 550,000 shares of our common stock in connection
with our acquisition of Newform. On November 29, 1999, we issued to the former
shareholders of MST Analytics, Inc., 993,282 shares of our common stock in
connection with our acquisition of MST. In each case, the issued shares were
not registered under the Securities Act of 1933, as amended, in reliance on the
exemption from registration provided by Section 4(2) of that Act.

-22-

Item 6. Selected Financial Data.

The following selected consolidated statements of income for the years
ended December 31, 1999, 1998, 1997 and 1996 and the consolidated balance sheet
data as of December 31, 1999, 1998 and 1997 are derived from our audited
consolidated financial statements. The consolidated statement of income for the
year ended December 31, 1995 and balance sheet data as of December 31, 1996 and
1995 are derived from unaudited consolidated financial statements. The
unaudited consolidated financial statements include all adjustments, consisting
of normal recurring accruals, which we consider necessary for a fair
presentation of the financial position and the results of operations for these
periods. The data set forth below should be read in conjunction with the
consolidated financial statements and notes thereto and other financial
information included elsewhere in this Form 10-K.

Year Ended December 31,
-----------------------------------------------------------------------
1999 1998 1997 1996 1995
----- ---- ---- ---- ----
(in thousands, except per share data)

Consolidated Statement of Income Data:
Revenues..................................... $196,236 $165,106 $192,012 $ 154,390 $115,984
Cost of revenues............................. 92,970 83,419 92,561 73,673 56,780
-------- -------- -------- --------- --------
Gross profit................................. 103,266 81,687 99,451 80,717 59,204
Operating expenses:
Research and development.................. 18,359 16,630 14,336 12,314 7,892
Selling, general and administrative....... 60,305(1) 56,925 60,593 48,435 37,162
Merger costs and related expenses......... 9,914(2) 1,700(3) 9,000(4) 2,000(5) -
-------- -------- -------- --------- --------
Total operating expenses................ 88,578 75,255 83,929 62,749 45,054
-------- -------- -------- --------- --------
Operating income............................. 14,688 6,432 15,522 17,968 14,150
Interest income (expense), net............... 3,117 2,487 (877) (375) (338)
Other income (expense), net.................. 724 539 340 94 (474)
-------- -------- -------- --------- --------
Income before income taxes and
minority interest.......................... 18,529 9,458 14,985 17,687 13,338
Income taxes................................. 7,720 4,412 8,588 4,745 4,947
-------- -------- -------- --------- --------
Income before minority interest.............. 10,809 5,046 6,397 12,942 8,391
Minority interest............................ (263) (111) (2) 151 10
-------- -------- -------- --------- --------
Net income................................... $ 10,546 $ 4,935 $ 6,395 13,093(6) $ 8,401
======== ======== ======== ========= ========
Net income per share - assuming dilution..... $ 0.37 $ 0.18 $ 0.25 $ 0.54(6) $ 0.36
======== ======== ======== ========= ========
Weighted average shares outstanding -
assuming dilution.......................... 28,319 27,423 25,660 24,318 23,051

December 31,
-----------------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----

Consolidated Balance Sheet Data: (in thousands)
Cash, cash equivalents and marketable
securities................................ $ 92,174 $ 86,169 $ 32,903 $ 35,966 $ 38,256
Working capital.............................. 121,199 103,938 48,878 37,118 35,093
Total assets................................. 232,656 208,652 153,529 125,873 105,545
Long-term debt, less current portion......... 6,280 12,559 19,763 18,499 12,461
Minority interest............................ 1,109 846 595 545 535
Total stockholders' equity................... 174,805 152,720 83,303 66,049 54,661

___________________
(1) Includes $2.3 million for severance with several former executives within
ATMI Materials and ATMI Technologies.

-23-

(2) Represents $3.3 million incurred in connection with the completion of our
acquisitions of MST Analytics and Newform and $7.2 million incurred in
connection with our acquisitions of Delatech, ACSI and TeloSense, offset by
a reversal of $0.6 million for previously accrued merger related costs

(3) Represents costs incurred in connection with the completion of our
acquisition of NOW Technologies.

(4) Represents costs incurred in investigating, analyzing and completing our
acquisitions of ADCS and Lawrence Semiconductor Laboratories.

(5) Represents costs accrued in connection with patent litigation involving
Lawrence Semiconductor Laboratories (prior to our acquisition of that
company), which resulted in a settlement payment in May 1997.

(6) Net income and net income per share - assuming dilution in 1996 include the
effect of the treatment of our ADCS subsidiary as an S-Corporation for a
portion of 1996 (which was prior to our acquisition of ADCS). If ADCS had
been taxed as a C-Corporation for all of 1996, our net income and net income
per share - assuming dilution would have been approximately $11.6 million
and $0.48, respectively, for the year ended December 31, 1996.

-24-

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.

Overview

We have organized our operations along two business segments: ATMI
Materials and ATMI Technologies. ATMI Materials provides products that are used
in the semiconductor manufacturing process and related packaging and delivery
systems. ATMI Technologies provides products that sense and environmentally
control these materials while also providing specialized thin film deposition
services to semiconductor device manufacturers. ATMI Technologies also conducts
our venture and government funded research and development activities.

We have entered into eight mergers since 1997, each of which has been
accounted for as a pooling of interests. As a result, our consolidated
financial statements have been restated to reflect the results of these merged
companies.

Results of Operations

The following table sets forth selected financial data as a percentage of
total revenues for the periods indicated:

Year Ended December 31,
-----------------------------------------------------
1999 1998 1997
---- ---- ----

Revenues......................................... 100.0% 100.0% 100.0%
Cost of revenues................................. 47.4 50.5 48.2
----- ----- -----
Gross profit..................................... 52.6 49.5 51.8
Operating expenses:
Research and development................... 9.4 10.1 7.5
Selling, general and administrative........ 30.7 34.5 31.6
Merger costs and related expenses.......... 5.1 1.0 4.7
----- ----- -----
Total operating expenses......... 45.2 45.6 43.8
----- ----- -----
Operating income................................. 7.4 3.9 8.0
Interest income (expense), net................... 1.6 1.5 (0.5)
Other income, net................................ 0.4 0.3 0.2
----- ----- -----
Income before income taxes and
minority interest............................ 9.4 5.7 7.7
Income taxes..................................... 3.9 2.7 4.5
----- ----- -----
Income before minority interest.................. 5.5 3.0 3.2
Minority interest................................ (0.1) (0.1) 0.0
----- ----- -----
Net income....................................... 5.4% 2.9% 3.2%
===== ===== =====

-25-

Segment Data

During 1998, we adopted FASB Statement No. 131 "Disclosure About Segments
of an Enterprise and Related Information". We have two segments: ATMI
Materials and ATMI Technologies. The reportable segments are each managed
separately because they manufacture and distribute distinct products with
different production processes. We evaluate performance and allocate resources
based on operating profit or loss, not including interest and other income or
expense and income taxes. The accounting policies of the reportable segments
are the same as those described in the summary of significant accounting
policies in our consolidated financial statements. Intercompany sales are not
material among segments or operating divisions.

The following tables provide reported results for each of these segments:

Year Ended December 31,
-------------------------------
1999 1998 1997
---- ---- ----
(in thousands)

Revenues
- --------
ATMI Materials................. $ 96,711 $ 71,279 $ 83,060
ATMI Technologies.............. 99,525 93,827 108,952
-------- -------- --------

Consolidated revenues.......... $196,236 $165,106 $192,012
======== ======== ========

Operating Income
- ----------------
ATMI Materials................. $ 19,335 $ 11,373 $ 17,757
ATMI Technologies.............. 5,267 (3,241) 6,765
Merger costs and
related expenses............... (9,914) (1,700) (9,000)
-------- -------- --------

Consolidated operating income.. $ 14,688 $ 6,432 $ 15,522
======== ======== ========

Comparison of Years Ended December 31, 1999, 1998 and 1997

Revenues. Our revenues increased 18.9% to $196.2 million in 1999 from
$165.1 million in 1998, following a decrease of 14.0% in 1998 from $192.0
million in 1997. The 1999 increase in revenues was primarily attributable to
the semiconductor industry's recovery, particularly for consumable products, as
seen by ATMI Materials' 35.7% growth in revenue. ATMI Materials experienced
significant gains related to our SDS, NOW dispensing and packaging products and
liquid materials product lines in 1999 as compared to 1998. ATMI Technologies'
revenues for 1999 increased 6.1% from 1998 levels. Semiconductor manufacturing
capacity expansion began to rebound in the middle of 1999 leading to improved
sales of EcoSys environmental and sensing products and Epitronics thin film
deposition services.

Soft market conditions in 1998, evidenced by a decline in semiconductor
unit demand in the second and third quarters of 1998 and a significant reduction
in semiconductor equipment spending during most of 1998, were the primary causes
for the 14.0% revenue decline for both ATMI Materials and ATMI Technologies when
comparing 1998 with 1997. The decline in semiconductor unit demand during 1998
slowed sales of many of ATMI Materials' product offerings. Semiconductor
manufacturing capacity expansion substantially declined during 1998, which
caused a decrease in EcoSys and Epitronics product sales.

-26-

Gross Profit. Gross profit increased 26.4% to $103.3 million in 1999 from
$81.7 million in 1998. Gross margin increased to 52.6% in 1999 from 49.5% in
1998. This increase was due principally to margin growth related to
manufacturing efficiencies from increased sales and a shift in product mix
towards SDS, NOW dispensing and packaging systems and liquid materials product
lines. Gross profit decreased 17.9% to $81.7 million in 1998 from 99.5 million
in 1997. Gross margin decreased to 49.5% in 1998 from 51.8% in 1997, primarily
as a result of less efficient fixed cost absorption in connection with the
decrease in revenues experienced in 1998, particularly within the EcoSys,
Epitronics and NOW product lines. Volume declines within the photoresist
stripping product lines, driven by the softening semiconductor industry
conditions, also contributed to the reduction in gross margins in 1998.

Research and Development Expenses. Research and development expenses
increased 10.4% to $18.4 million in 1999 from $16.6 million in 1998. Increased
efforts to expand SDS technology beyond ion implant applications into CVD, etch
and bulk gas delivery, and continued product development activities within ATMI
Materials and the Emosyn venture resulted in growth of the research and
development efforts. As a percentage of revenues, research and development
expenses decreased to 9.4% in 1999 from 10.1% in 1998. Research and development
expenses increased 16.0% to $16.6 million in 1998 from $14.3 million in 1997.
Similar to the increase in 1999, the 1998 increase was due to the development
efforts to extend the SDS technology beyond existing applications, as well as
the development of new chemical mechanical polishing materials and increased
research efforts to expand our sensing and monitoring product lines.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased 5.9% to $60.3 million in 1999 from $56.9
million in 1998. Despite decreases in expenses associated with decreased
administrative costs and cost savings resulting from the integration of recent
business acquisitions, expenses incurred related to the organization of our
Taiwanese subsidiary and the commencement of our enterprise system software
implementation caused selling, general and administrative expenses to increase
in 1999. Additionally, the 1999 expenses included $2.3 million in severance for
several former executives within ATMI Materials and ATMI Technologies. As a
percentage of revenues, these expenses decreased to 30.7% in 1999 from 34.5% in
1998. Selling, general and administrative expenses decreased 6.1% to $56.9
million in 1998 from $60.6 million in 1997. The 1998 decrease was primarily due
to a significant reduction in executive compensation paid to members of
management of certain acquired businesses (Delatech, ACSI and TeloSense) due to
weaker operating performance, a reduction of administrative costs resulting from
reductions in personnel and decreased commissions on lower product revenues.

Merger Costs and Related Expenses. The 1999 operating results included
merger and related costs of $9.9 million, including $3.3 million of professional
fees and transactions costs related to our November 1999 acquisitions of MST and
Newform and $2.8 million of investment banking, legal and accounting fees in
connection with the investigation, analysis and May 1999 closing of the
TeloSense, Delatech and ACSI transactions. The 1999 merger related costs
included a $0.6 million reversal of previously accrued merger costs for prior
acquisitions. The acquisition of Delatech also resulted in a $4.4 million asset
impairment charge during the second quarter of 1999 for inventory ($1.0 million)
and goodwill ($3.4 million) associated with an existing environmental equipment
product line which was determined to be impaired. The 1998 operating results
included merger related charges of $1.7 million incurred in completing the NOW
acquisition.

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Operating Income. Operating income, including the recognition of merger
related costs, increased 128.4% in 1999 to $14.7 million from $6.4 million in
1998 which was a 58.6% decrease from $15.5 million in 1997. ATMI Materials'
operating income for 1999 increased 70.0% to $19.3 million from $11.4 million in
1998. This increase reflected the gains made due to the improved market
conditions within the industry and increased market share penetration during
1999. The significant revenue increase in 1999 combined with stronger margins
and cost containment initiatives resulted in higher operating income within ATMI
Materials. ATMI Materials' operating income, as a percentage of revenues, was
20.0% and 16.0% for 1999 and 1998, respectively. ATMI Technologies' operating
income improved to $5.3 million in 1999 compared to a $3.2 million loss in 1998.
The profitability increase was attributable to the growth in both EcoSys and
Epitronics revenues, the attendant product margin improvements and a favorable
product mix shift along with an improvement in profitability of various contract
programs. Investments in research and product development within Emosyn and our
other ventures are reflected in ATMI Technologies' operating income. ATMI
Technologies' operating income, as a percentage of revenues, was 5.3% and (3.5)%
in 1999 and 1998, respectively.

ATMI Materials' operating income declined 36.0% to $11.4 million in fiscal
1998 from $17.8 million in 1997. The revenue decline in 1998 reduced gross
margins within ATMI Materials and, combined with an increase in research and
development spending, drove the operating income decline. ATMI Materials'
operating income, as a percentage revenues, was 21.4% in 1997. ATMI
Technologies' operating income declined to a loss of $3.2 million in fiscal 1998
compared to operating income of $6.8 million in 1997. These losses were
attributable to the severe decline in sales of EcoSys products, reduced
Epitronics operating results caused by revenue declines on a relatively fixed
cost base and an increase in research and development efforts focused on our
Emosyn business and other new business ventures.

Other Income, Net. Other income, net increased to approximately $3.8
million in 1999 from $3.0 million in 1998. The increase in 1999 related to a
significant increase in interest income due to increased cash levels on hand
throughout all of 1999 compared to only part of 1998. These increased cash
levels resulted from a public offering that was completed at the beginning of
the second quarter of 1998. Increased interest rate levels in 1999 also
resulted in increased interest income. Interest expense declined in 1999 due to
lower levels of debt outstanding at December 31, 1999 compared to December 31,
1998. Other income, net increased to $3.0 million in 1998 from a net expense of
$0.5 million in 1997 as a direct result of the increased cash and marketable
securities that resulted from our public offering in the first quarter of 1998.
Interest expense decreased 26.5% to $1.3 million in 1999 from $1.7 million in
1998, and decreased 34.0% in 1998 from $2.6 million in 1997. The 1999 decrease
related to the retirement of a significant debt balance related to the Delatech
acquisition as well as final payments on several equipment leases within
Epitronics. The 1998 decrease was due to a conversion of outstanding debt at
ACSI into equity in late 1997 and lower overall debt balances outstanding during
1998, as capital lease lines were paid down and certain high-interest rate debt
was retired.

Income Taxes. Income tax expense increased 75.0% to $7.7 million in 1999
from $4.4 million in 1998. Income tax expense decreased 48.6% to $4.4 million
in 1998 from $8.6 million in 1997. Our income tax expense related primarily to
United States federal, state and foreign tax liabilities, which were partially
offset by various foreign sales corporation benefits and research and
development credits. The 1999 effective tax rate was in line with statutory
rates at 42.3%. While no tax benefit was taken for a significant amount of
merger related costs in 1999, benefit

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was recognized based on changes in estimates regarding the realizability of net
operating loss and tax credit carryforwards of certain acquired companies. The
1998 effective tax rate of 47.2% was higher than statutory rates because no tax
benefit was taken for the $1.7 million of merger costs related to the NOW
acquisition, and no tax benefit was recognized for operating losses sustained by
ACSI in 1998. The significant 1997 effective tax rate of 57.3% was due in part
to the 1997 operating results including the $9.0 million for merger costs
related to the ADCS and Lawrence Semiconductor acquisitions for which no tax
benefit was taken.

Minority Interest. Minority interest represents the 30.0% interest held by
K.C. Tech Co., Ltd. in the operations of ADCS-Korea, a South Korean chusik
hoesa, which is a joint venture established to manufacture, sell and distribute
chemicals to the semiconductor and related industries in South Korea.

Net Income Excluding Transaction Related Costs and Other Expenses. Over
the last three years, we have used mergers and acquisitions to accelerate our
growth and broaden our product lines. As a result of this strategy, we have
incurred expenses to consummate these transactions and merge these acquired
businesses into existing operations. Excluding these merger costs and certain
severance charges related to reorganizing the business pursuant to these
acquisitions, net income from recurring operations would have been $19.3
million, or $0.68 per share-assuming dilution in 1999. This represents a 175.7%
increase over $7.0 million, or $0.26 per share-assuming dilution in 1998. On a
comparable basis, 1997 net income from recurring operations was $15.4 million,
or $0.60 per share-assuming dilution.

Liquidity and Capital Resources

To date, we have financed our activities through cash from operations, the
sale of equity, external research and development funding and various lease and
debt instruments. Our working capital increased to $121.2 million at December
31, 1999 from $103.9 million at December 31, 1998 and $48.9 million at December
31, 1997.

Net cash provided by operations was approximately $13.1 million during
1999, resulting primarily from improvements in working capital, as compared to
cash provided from operations of $13.3 million during 1998. The cash flow from
operations for 1999 related primarily to net income adjusted for non-cash
charges partially offset by the increase in working capital items, primarily
accounts receivable. In addition, the $9.9 million of merger costs and related
expenses in 1999, reduced the cash generated from operations by approximately
$4.3 million, as $4.4 million were non-cash charges and approximately $1.2
million remained unpaid at December 31, 1999. The improvement in working
capital for 1999 was primarily caused by a decrease in other assets and
increases in accounts payable, accrued expenses and other liabilities. The $1.7
million of merger costs and related expenses in the third quarter of 1998,
reduced the cash generated from operations by approximately $1.1 million, as
approximately $0.6 million remained unpaid at December 31, 1998. Net cash
provided by operations in 1997 was approximately $4.1 million. Additionally,
the $9.0 million of merger costs and related expenses in the fourth quarter of
1997, reduced the cash generated from operations by approximately $7.0 million,
as approximately $2.0 million remained unpaid at December 31, 1997.

Our investing activities included capital expenditures of $10.2 million,
$15.0 million, and $9.1 million in the years 1999, 1998 and 1997, respectively.
The 1999 expenditures were made

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primarily to support the growth experienced at several of our manufacturing
facilities. The 1998 expenditures primarily related to installation of
additional manufacturing capacity in Danbury, Connecticut, San Jose, California
and our two Texas facilities. The 1997 expenditures included both the
installation of SDS manufacturing capacity in the Danbury, Connecticut facility
and an increase in epitaxial capacity in Epitronics' Arizona facilities.

Among other investing activities, in 1998 we invested approximately $47.9
million raised primarily from a public offering of our common stock into
marketable securities for future working capital requirements and potential
merger and acquisition activities. In July 1997, prior to our acquisition of
MST, it used $5.6 million to purchase four businesses. In addition, we sold
$0.8 million in marketable securities in 1997.

Our financing activities included a March 1998 registered underwritten
public offering of 5,428,000 shares of our common stock. Of such shares, we
sold 2,257,000 shares and certain of our stockholders sold 3,171,000 shares. We
received net proceeds from the offering of approximately $62.4 million.

At December 31, 1999, we financed a significant portion of our capital
equipment purchases, particularly the silicon epitaxial capacity, through
capital leases with about $3.8 million of capital lease obligations outstanding.
During 1999 and 1998, we made payments on capital leases of approximately $2.5
million and $2.8 million, respectively. Financial institutions also provided
collateral-based loans for other equipment purchases. In 1999, we made $9.1
million of note payments and during 1998, we made payments on notes of
approximately $6.7 million, with the most significant payment being the
retirement of a mortgage on the Mesa, Arizona Epitronics facility. Our NOW
business has an industrial revenue bond arrangement outstanding in the amount of
$2.3 million, which was used for equipment and improvements at its manufacturing
facility and corporate office. At December 31, 1999, $13.2 million of loans,
bonds and financing remained outstanding. Our management believes that our debt
service obligations can be adequately satisfied by cash flows from operations.

We believe that our existing cash balances, marketable securities, existing
sources of liquidity and anticipated funds from operations will satisfy our
projected working capital and other cash requirements through at least the end
of 2000. However, we also believe the level of financing resources available to
us is an important competitive factor in our industry and we may seek additional
capital prior to the end of that period. Additionally, we consider, on a
continuing basis, potential acquisitions of technologies and businesses
complementary to our current business. There are no present agreements with
respect to any such acquisitions. However, any such transactions may affect our
future capital needs.

Operations Outside the United States

For the years ended December 31, 1999, 1998 and 1997, export sales outside
the United States, including Asia and Europe, accounted for 39.0%, 31.9%, and
30.0%, respectively, of our revenues. We anticipate that our sales outside the
United States will continue to account for a significant percentage of our
revenues. The November 1999 acquisitions of MST and Newform have increased our
European operations. In addition, we have a wholly-owned subsidiary in Taiwan
where we sell and service several of our product lines. We also have a wholly-
owned subsidiary in South Korea that manufactures and markets environmental
abatement equipment in

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South Korea and a joint venture agreement with K.C. Tech pursuant to which we
have a 70.0% interest in ADCS-Korea, a South Korean chusik hoesa, which
manufactures, sells and distributes thin film materials to the semiconductor and
related industries in South Korea.

Year 2000 Compliance

We formed an internal compliance team to evaluate our internal information
technology infrastructure and application systems and other non-IT
infrastructure systems to determine whether such systems would operate correctly
with regard to the import, export and processing of date information, including
correct handling of leap years, in connection with the change in the calendar
year from 1999 to 2000, and to evaluate the Year 2000 issue with respect to the
systems of third party partners and suppliers with which we have a material
relationship.

We completed an inventory analysis and risk assessment. As previously
planned and budgeted, we upgraded our core IT Systems to incorporate additional
desired features and functionality including Year 2000 compliant operators. We
completed the necessary upgrades to make the recently acquired businesses Year
2000 compliant by December 31, 1999. In connection with such upgrades, we
expect that our core IT Systems are Year 2000 compliant, and no significant
issues have arisen to date from the calendar change to January 2000. We do not
expect that any additional costs of addressing the Year 2000 issue will have a
material adverse impact on our financial position and results of operations or
cash flows.

We also completed a non-IT system inventory analysis and risk assessment.
As a result of the analysis, no remediation actions were required in order to be
Year 2000 compliant. We believe the number of non-IT systems is relatively
small and, therefore, do not expect that any additional costs of addressing the
Year 2000 issue for these systems will have a material adverse impact on our
operations or our financial position, results of operations or cash flows.

We completed a third party inventory and risk assessment and verified
material Year 2000 compliance of these systems by December 31, 1999. We believe
the number of material third party systems is relatively small. However, until
Year 2000 compliance of all third party systems if ascertained, the risk to our
operations and any additional costs relating to these systems is unknown. We
believe that any problems that might arise would involve third party systems
rather than our internal systems. We believe that majority of the risks
associated with Year 2000 non-compliance have been averted as the calendar
turned. Any further risk might be the partial shutdown of a supplier or
strategic partner and its inability to provide supplies and services to us on a
timely basis. We developed a contingency plan addressing potential issues,
ensuring that adequate levels of critical supplies used in our manufacturing
processes were on hand at the end of 1999.

We tested our products for Year 2000 compliance and determined that all of
our products currently available for sale have either successfully passed Year
2000 compliance testing or are not subject to Year 2000 compliance because such
products do not import, export or process date information in any manner.

We incurred approximately $600,000 relating to inventory analysis and risk
assessment of potential Year 2000 difficulties. The funds to cover the costs
incurred were derived from general operations. The costs primarily related to
desktop compliance and standardization to Year 2000

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compliance. These Year 2000 expenditures were within our planned organizational
budgets and included the costs of reviewing key operating systems. No IT Systems
projects were deferred because of problems associated with the Year 2000 Issue.

Forward-Looking Statements

The statements contained in this report which are not historical are
"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. Examples of forward-looking statements include, without limitation,
statements by us regarding financial projections, expectations for demand and
sales of new and existing products, market and technology opportunities,
business strategies, business opportunities, objectives of management for future
operations and semiconductor industry and market segment growth. In addition,
when used in this report, the words "anticipate," "plan," "believe," "estimate,"
"expect" and similar expressions as they relate to us or our management are
intended to identify forward-looking statements. All forward-looking statements
involve risks and uncertainties. Actual results may differ materially from
those discussed in, or implied by, the forward-looking statements as a result of
certain factors including, but not limited to, changes in the pattern of
semiconductor industry growth, the markets for or customer interest in our
products, product and market competition, delays or problems in the development
and commercialization of products and technological changes affecting our
competencies. The cautionary statements made in this report should be read as
being applicable to all related forward-looking statements wherever they appear
in this report.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate Risk

As of December 31, 1999, our cash included money market securities and
commercial paper. Due to the short duration of our investment portfolio, an
immediate 10% change in interest rates would not have a material effect on the
fair market value of our portfolio, therefore, we would not expect our operating
results or cash flows to be affected to any significant degree by the effect of
a sudden change in market interest rates on our securities portfolio.

Foreign Currency Exchange Risk

A substantial portion of our sales are denominated in U.S. dollars and, as
a result, we have relatively little exposure to foreign currency exchange risk
with respect to sales made. This exposure may change over time as business
practices evolve and could have a material adverse impact on our financial
results in the future. We do not use forward exchange contracts to hedge
exposures denominated in foreign currencies or any other derivative financial
instruments for trading or speculative purposes. The effect of an immediate 10%
change in exchange rates would not have a material impact on our future
operating results or cash flows.

Item 8. Financial Statements and Supplementary Data.

The Report of Independent Auditors, the consolidated financial statements
and the financial statement schedule that are listed in the Index to
Consolidated Financial Statements and Financial Statement Schedule are included
herein on pages F-1 through F-28.

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Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

There have been no changes in or disagreements with accountants required to
be reported herein.

Item 10. Directors and Executive Officers of the Registrant.

Name Age Position
- -------------------------------------- --- ---------------------------------------

Eugene G. Banucci, Ph.D............... 56 President, Chief Executive Officer and
Chairman of the Board and Director

Peter S. Kirlin, Ph.D................. 39 Executive Vice President - ATMI
Technologies

Douglas S. Neugold.................... 41 Executive Vice President - ATMI
Materials

Daniel P. Sharkey..................... 43 Vice President, Chief Financial Officer
and Treasurer

Mark A. Adley......................... 40 Director

Robert S. Hillas...................... 51 Director

Kam Law, Ph.D......................... 46 Director

Stephen H. Mahle...................... 54 Director

Stephen H. Siegele.................... 40 Director

Eugene G. Banucci, Ph.D., a founder of ATMI, has served as President, Chief
Executive Officer, Chairman of the Board and Director since 1986.

Peter S. Kirlin, Ph.D. has served as Executive Vice President of ATMI since
1995. From 1991 to 1995, Dr. Kirlin served as Vice President of
Microelectronics and General Manager of the former NovaMOS division of ATMI.
From 1988 to 1991, Dr. Kirlin served as Director of Superconductor Materials and
Electronics for ATMI.

Douglas A. Neugold has served as Executive Vice President of ATMI Materials
since February 1999. In January 1998, Mr. Neugold joined ATMI as Vice President
of the former NovaSource division and served as President of that division from
July 1998 to February 1999. Previously, Mr. Neugold served in a variety of
executive and managerial positions with the Electronic Materials Division of
Johnson Matthey, a specialty chemicals company. From 1995 to 1997, he served as
Vice President, and later as President of the Semiconductor Packages business,
and from 1993 to 1995, he served as Director of Asian Operations.

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Daniel P. Sharkey has served as Chief Financial Officer since joining ATMI
in 1990 and has served as Vice President and Treasurer since 1993.

Mark A. Adley has served as a director of ATMI since 1991. Since 1996, Mr.
Adley has been a Managing Director at Credit Suisse First Boston Corporation, an
investment banking firm, where he was a Director from 1994 to 1996.

Robert S. Hillas has served as a director of ATMI since 1987. Mr. Hillas
has been the President, Chief Executive Officer and Chairman of the Board of
Envirogen, Inc., an environmental systems and services company, since April
1998. From 1993 to April 1998, Mr. Hillas served as a Managing Director of E.M.
Warburg, Pincus & Co. LLC, an asset management firm. Mr. Hillas is also a
director of Transition Systems, Inc. and United States Filter Corporation.

Kam Law, Ph.D has served as a director of ATMI since April 1999. Dr. Law
has been the Senior Vice President of Applied Komatsu Technology, a flat panel
display manufacturing equipment supplier, since October 1998. From April 1998
to October 1998, Dr. Law served as General Manager of the Global Product
Organization at AKT and from 1997 to April 1998, he served as Executive Managing
Director and General Manager - CVD Products at AKT. From 1994 to 1997, Dr. Law
served as Senior Director of AKT.

Stephen H. Mahle has served as a director of ATMI since 1996. Mr. Mahle
has been Senior Vice President of Medtronic, Inc., a medical device
manufacturer, and President of its cardiac rhythm management business since
January 1998. From 1995 to 1997, he was President of the Brady Pacing Business,
a division of Medtronic. From 1989 to 1995, Mr. Mahle served as Vice President
and General Manager of the Brady Pacing Business.

Stephen H. Siegele has served as a director of ATMI since October 1997. He
served as Vice Chairman of ATMI's board of directors from February 1999 to
December 1999 and served as President of ATMI's former ADCS division from
October 1997 until December 1999. Mr. Siegele served as the President and Chief
Executive Officer of ADCS from February 1994 until October 1997, when it was
acquired by ATMI. From 1988 to 1994, Mr. Siegele served as Vice President of
the ADCS Group.

Executive officers serve at the discretion of the Board of Directors. There
are no family relationships among any of the executive officers or directors.

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Item 11. Executive Compensation.

Summary Compensation

The following table sets forth certain information regarding the compensation
we paid for the years ended December 31, 1999, 1998 and 1997 to our Chief
Executive Officer and each of the other four most highly compensated executive
officers in 1999 for services in all capacities to us.

Summary Compensation Table

Long Term
Compensation
--------------
Awards
--------------
Annual Compensation Securities All Other
------------------------
Underlying Compen-
Name and Principal Position Year Salary ($) Bonus ($) Options (#) sation ($)(1)
- --------------------------- ---- --------- --------- -------------- --------------

Eugene G. Banucci....................... 1999 295,978 240,000 50,000 9,047
President, Chief Executive Officer 1998 241,091 -- 60,000 5,346
and Chairman of the Board 1997 210,000 125,000 25,000 3,769

Stephen H. Siegele (2).................. 1999 400,052 - 25,000 -
President - ADCS, Vice Chairman 1998 300,000 - - 4,667
of the Board 1997 89,000 - - -

Douglas J. Neugold (3).................. 1999 197,517 120,000 30,000 -
Executive Vice President 1998 186,364 33,333 39,000 100,283

Peter S. Kirlin......................... 1999 197,517 140,000 35,000 1,471
Executive Vice President 1998 164,792 - 30,000 2,975
1997 150,000 50,000 20,000 2,700

Daniel P. Sharkey....................... 1999 167,932 100,000 30,000 1,300
Vice President, Chief Financial 1998 160,083 - 30,000 2,273
Officer and Treasurer 1997 130,000 50,000 15,000 1,903

__________________
(1) Represents premiums paid for life insurance and long-term disability
policies of which we are not the beneficiary and flexible spending
contributions toward health care costs not covered by our plans. In the
case of Mr. Neugold, it also represents payments for relocation expenses.
(2) Mr. Siegele joined the Company on October 13, 1997 in connection with the
Company's acquisition of ADCS. Mr. Siegele's employment with us ended on
December 31, 1999.
(3) Mr. Neugold joined the Company on January 22, 1998. The 1998 bonus amount
represents a one-time payment upon joining the Company.

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Option Grants

The following table sets forth certain information with respect to stock
options granted to the executive officers listed in the Summary Compensation
Table during the year ended December 31, 1999.

Option Grants In Last Fiscal Year

Potential
Individual Grants Realizable Value at
-------------------------------------------------------------------
Number of % of Total Assumed Annual
Securities Options Rates of Stock
Underlying Granted to Exercise Price Appreciation
Options Employees Price Expiration for Option Term (2)
----------------------
Name Granted(#)(1) in 1999 ($/sh) Date 5% ($) 10% ($)
- ---------------------- ------------- ----------- --------- ----------- -------- ---------

Eugene G. Banucci..... 50,000 4.4% 25.25 1/1/09 793,979 2,012,100
Stephen H. Siegele.... 25,000 2.2% 25.25 1/1/09 396,990 1,006,050
Douglas J. Neugold.... 30,000 2.7% 25.25 1/1/09 476,388 1,207,260
Peter S. Kirlin....... 35,000 3.1% 25.25 1/1/09 555,786 1,408,470
Daniel P. Sharkey..... 30,000 2.7% 25.25 1/1/09 476,388 1,207,260

_______________
(1) Options granted vest ratably over five years on each of the first five
anniversary dates of the grant date.
(2) The dollar amounts under these columns are the result of calculations
assuming 5% and 10% growth rates as set by the Securities and Exchange
Commission and, therefore, are not intended to forecast future price
appreciation, if any, of the Company's Common Stock.

Stock Option Exercises and Fiscal Year-End Option Values

The following table sets forth information concerning option holdings as of
December 31, 1999 with respect to the executive officers listed in the Summary
Compensation Table.

Aggregated Option Exercises In Last Fiscal Year
and Fiscal Year-End Option Values

Shares Number of Securities Value of Unexercised
Acquired Underlying Unexercised In-the-Money Options
on Value Options at FY-End (#) at FY-End ($)(1)
------------------------------ ------------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ----------------------- ----------- ----------- ----------- ------------- ----------- -------------

Eugene G. Banucci... 4,500 84,656 144,875 120,000 3,967,530 1,214,875
Stephen H. Siegele.. - - - 25,000 - 195,313
Douglas J. Neugold.. - - 7,800 61,200 84,338 571,725
Peter S. Kirlin..... 10,737 333,235 66,341 76,000 1,677,517 791,875
Daniel P. Sharkey... 20,000 676,200 79,875 66,000 2,180,034 658,500

__________________
(1) Based on the fair market value of our common stock as of December 31, 1999
($33.0625) minus the exercise price of the options.

Employment Agreements

We entered into employment agreements with Eugene G. Banucci, Daniel P.
Sharkey and Stephen H. Siegele, effective October 10, 1997. Pursuant to the
agreements, Dr. Banucci will act as President, Chief Executive Officer and
Chairman of the Board of ATMI, Mr. Sharkey will act as

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Vice President, Chief Financial Officer and Treasurer of ATMI, and Mr. Siegele
acted as President of the ADCS division of ATMI, for annual salaries of
$210,000, $130,000 and $400,000, respectively. Salaries are subject to increase
from time to time to take into account appropriate cost of living adjustments
and general compensation increases based on performance, in the discretion of
the board of directors. Each employee will also be eligible to receive
additional compensation, including awards of performance bonuses at levels
commensurate with our other employees of equivalent position and grants of
employee stock options, in each case in the discretion of the compensation
committee of the board of directors.

The employment agreements expire on the earliest to occur of (i) the death
of the employee, (ii) the termination of the agreements due to the incapacity of
the employee, (iii) the termination of the agreements by us with or without
cause, or (iv) the termination of the agreements by the employee for just cause.
Under the terms of the agreements, if we terminate the employee without cause,
or if the employee terminates the agreement for just cause, we will pay the
employee his annual base salary then in effect for a period of 18 months after
termination in the case of Dr. Banucci and Mr. Siegele, and for a period of nine
months after termination in the case of Mr. Sharkey. We will also provide the
employee during such period with medical, dental, life and disability insurance
benefits on the same basis we would have provided the employee during such
period had he continued to be an employee.

The employment agreements restrict each employee from competing with us
during the term of the agreement and for a period of the later of October 10,
2002 or 36 months after the termination of employment in the case of Dr. Banucci
and Mr. Siegele, or 24 months after the termination of employment in the case of
Mr. Sharkey. In the event we should seek to enforce such non-competition
provisions in a court, a court may, in exercising its discretionary authority,
determine not to enforce, or to limit enforcement of, such provisions against an
employee.

The employment agreements for Dr. Banucci and Mr. Sharkey also provide that
any termination associated with a change in control of ATMI (including
resignation by the employee for just cause such as a significant decrease in the
employee's duties or authority) would result in the acceleration of options
outstanding (and as may be subsequently granted) to them; provided that such
acceleration of vesting shall not occur if and to the extent that (i) our
independent accountant has advised the board of directors that such acceleration
could prohibit the accounting treatment of the transaction which is a change in
control as a pooling of interests under Accounting Principles Board Opinion No.
16 (or any successor opinion) and (ii) the board of directors intends to treat
such transaction as a pooling of interests, in which case options would continue
to vest as permitted within the terms of the applicable stock plans. In
addition, Dr. Banucci and Mr. Sharkey would be entitled to any bonuses under any
bonus plans then in effect as if fully earned. Benefits payable under the
agreements upon a change in control may subject the employee to an excise tax as
"excess parachute payments" under Section 280G of the Internal Revenue Code. We
will reimburse the employee for all excise taxes paid, but the reimbursement
will constitute an excess parachute payment and will be subject to further
excise tax. Such further excise tax will trigger further reimbursement by us.
We will not be allowed to take a deduction for federal income tax purposes for
the excess parachute payments.

In December 1999, we entered into a separation agreement with Stephen H.
Siegele in connection with his termination of employment effective December 31,
1999. Pursuant to the

-37-

terms of this agreement, we have agreed to pay Mr. Siegele $800,000 during
fiscal 2000 and to transfer ownership of Mr. Siegele's company-owned automobile
to him.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

The following table sets forth certain information known to us regarding
the beneficial ownership of our common stock as of March 24, 2000, by: (i) each
person known by us to own beneficially more than five percent of the outstanding
common stock; (ii) each director and nominee for director; (iii) each executive
officer named in the Summary Compensation Table; and (iv) all directors and
executive officers as a group. Except as otherwise indicated, all shares are
owned directly. Except as indicated by footnote, and subject to community
property laws where applicable, the persons named in the table have sole voting
and investment power with respect to all shares of common stock shown as
beneficially owned by them.

Name and Address of Beneficial Owner Shares Beneficially Owned Percent of Class
------------------------------------ ------------------------- ----------------

Stephen H. Siegele (1)........................... 2,525,534 9.0%
6805 Capital of Texas Highway
Suite 330
Austin, Texas 78731
J. P. Morgan & Co. Incorporated (2).............. 1,414,800 5.0%
60 Wall Street
New York, New York 10260
Eugene G. Banucci (3)............................ 378,353 1.3%
Daniel P. Sharkey (4)............................ 106,093 *
Robert S. Hillas (5)............................. 50,977 *
Mark A. Adley (6)................................ 36,000 *
Peter S. Kirlin (7).............................. 31,000 *
Douglas J. Neugold (8)........................... 22,275 *
Stephen H. Mahle (9)............................. 20,100 *
Kam Law (10)..................................... 10,000 *
All directors and executive
officers as a group (9 persons) (11)............. 3,180,332 11.2%

____________
* Less than 1% of the outstanding common stock.
(1) Includes 5,000 shares issuable upon exercise of options that are
exercisable with 60 days of March 24, 2000.
(2) Based on information provided in Schedule 13G filed with the Securities and
Exchange Commission on February 10, 2000. Such schedule indicates that
J.P. Morgan & Co. Incorporated has sole voting power with respect to
1,021,800 shares and sole dispositive power with respect to all 1,414,800
shares.
(3) Includes 171,875 shares issuable upon exercise of options that are
exercisable within 60 days of March 24, 2000 and 9,335 shares either owned
or issuable upon exercise of options within 60 days of March 24, 2000 by
Dr. Banucci's spouse. Dr. Banucci disclaims beneficial ownership of the
shares held by his spouse.
(4) Includes 94,875 shares issuable upon exercise of options that are
exercisable within 60 days of March 24, 2000
(5) Includes 20,000 shares issuable upon exercise of options that are
exercisable within 60 days of March 24, 2000.
(6) Includes 33,000 shares issuable upon exercise of options that are
exercisable within 60 days of March 24, 2000.
(7) Consists entirely of shares issuable upon exercise of options that are
exercisable within 60 days of March 24, 2000. Does not include 2,433 shares
owned by irrevocable trusts for the benefit of Dr. Kirlin's child.
(8) Includes 21,600 shares issuable upon exercise of options that are
exercisable within 60 days of March 24, 2000.
(9) Includes 19,500 shares issuable upon exercise of options that are
exercisable with 60 days of March 24, 2000.

-38-

(10) Consists entirely of shares issuable upon exercise of options that are
exercisable within 60 days of March 24, 2000.
(11) Includes 410,512 shares issuable to executive officers, directors and their
spouses pursuant to options that are exercisable within 60 days of March
24, 2000.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our executive officers and
directors and persons who beneficially own more than ten percent of our common
stock to file reports of ownership and changes in ownership with the Securities
and Exchange Commission and to furnish us with copies of all such forms they
file. Based solely on our review of the copies of such forms received by us, or
written representations from certain reporting persons, we believe that during
the fiscal year ended December 31, 1999, all such reports were timely filed.

Item 13. Certain Relationships and Related Transactions.

Between March 1997 and April 1998, we loaned Peter S. Kirlin an aggregate
of $155,000 in exchange for Dr. Kirlin's promissory notes bearing interest at 6%
per annum. In December 1997, Dr. Kirlin prepaid an aggregate of $23,120 due
under the notes. On June 30, 1998, we consolidated all separate notes into one
promissory note in the principal amount of $131,880 bearing interest at 6% per
annum and due and payable on June 30, 1999. On July 31, 1999, Dr. Kirlin paid
us $147,104, representing all principal and interest due under the note.

-39-

PART IV

Item 14. Exhibits, Financial Statement Schedule, and Reports on Form 8-K.

(a) (1) and (2) Financial Statements and Schedule

The report of independent auditors, consolidated financial statements and
financial statement schedule listed in the Index to Consolidated Financial
Statements and Financial Statement Schedule on page F-1 hereof are filed as part
of this report, commencing on page F-5 hereof.

All other financial statement schedules not listed in the Index are omitted
as the required information is not applicable or the information is given in the
financial statements or related notes.

(a) (3) Exhibits

Exhibit No. Description
----------- ----------------------------------------------------------

2.01 Agreement and Plan of Merger dated as of May 31, 1999 by
and among Advanced Chemical Systems International, Inc.,
ATMI, Inc. and Strip Acquisition Corp. (Exhibit 2.1 to
Current Report on Form 8-K/A dated May 31, 1999, File No.
0-30130) (1)

2.02(a) Agreement and Plan of Merger dated as of May 31, 1999 by
and among Delatech Incorporated, ATMI, Inc. and Napa
Acquisition Corp. and certain shareholders of Delatech
Incorporated. (Exhibit 2.2 to Current Report on Form 8-K/A
dated May 31, 1999, File No. 0-30130) (1)

2.03 Agreement and Plan of Merger dated as of November 29, 1999
by and among ATMI, Inc., Fog Acquisition Corporation, MST
Analytics, Inc. and the Controlling Stockholders of MST
Analytics, Inc. as identified therein. (Exhibit 2.1 to
Current Report on Form 8-K/A dated November 29, 1999, File
No. 0-30130) (1)

3.01(a) Certificate of Incorporation of the Registrant (Exhibit
3.01 to the ATMI's Registration Statement on Form S-4,
filed September 10, 1997, Registration No. 333-35323 (the
"1997 Form S-4 Registration Statement")). (1)

3.01(b) Certificate of Amendment to Certificate of Incorporation
(Exhibit 4.1(b)to the ATMI's Post-Effective Amendment No. 1
to Registration Statement on Form S-8, filed October 10,
1997, Registration No. 33-77060). (1)

3.01(c) Certificate of Amendment to Certificate of Incorporation
(Exhibit 3.01(c) to the ATMI's Registration Statement on
Form S-4, Registration No. 333-51333). (1)

-40-

3.02 Bylaws of ATMI (Exhibit 3.02 to the 1997 Form S-4
Registration Statement). (1)

4.01 Specimen of the ATMI's Common Stock Certificate (Exhibit
4.01 to the 1997 Form S-4 Registration Statement). (1)

10.01 Employment Agreement between Eugene G. Banucci, Ph.D. and
Advanced Technology Materials, Inc. dated October 10, 1997
(Exhibit 10.01 to ATMI's Registration Statement on Form S-
1, Registration No. 333-46609 (the "Form S-1 Registration
Statement")). (1)

10.02 Employment Agreement between Daniel P. Sharkey and Advanced
Technology Materials, Inc. dated October 10, 1997 (Exhibit
10.02 to the Form S-1 Registration Statement). (1)

10.03 Agreement of Lease between Melvyn J. Powers and Mary P.
Powers d/b/a/ M&M Realty and Advanced Technology Materials,
Inc. dated December 23, 1994 (Exhibit 10.09 to Advanced
Technology Materials, Inc. Annual Report on Form 10-K/A for
the year ended December 31, 1994, File No. 0-22756 ("1994
Form 10-K/A")). (1)

10.04(a) Lease Agreement between Montague Oaks Associates Phase III
and ATMI EcoSys Corporation dated February 7, 1995 (Exhibit
10.10 to 1994 Form 10-K/A). (1)

10.04(b) First Amendment to Lease between Montague Oaks Associates
Phase III and ATMI EcoSys Corporation dated September 30,
1997 (Exhibit 10.08(b) to the Form S-1 Registration
Statement). (1)

10.05 Lease Agreement between Montague Oaks Associates Phase I &
II and ATMI EcoSys Corporation dated September 30,
1997(Exhibit 10.09 to the Form S-1 Registration Statement).
(1)

21.01 Subsidiaries of ATMI (Exhibit 21.01 to Form S-1
Registration Statement). (1)

23.01 Consent of Ernst & Young LLP. (2)

23.02 Consent of Deloitte & Touche LLP. (2)

23.03 Consent of Arthur Andersen LLP (2)

23.04 Consent of Rath, Anders, Dr. Wanner and Partner (2)

27.01 Financial data schedule. (3)

-41-

______________________________
(1) Incorporated by reference.
(2) Filed herewith.

(3) Previously filed.

(b) Reports on Form 8-K

On December 14, 1999, the Company filed a Current Report on Form 8-K dated
November 29, 1999 reporting in Item 2 thereof the acquisitions of MST and
Newform. On January 28, 2000, the Company filed a Current Report on Form 8-K/A
dated November 29, 1999, 1999 to include supplemental selected financial data,
management's discussion and analysis of financial condition and results of
operations and supplemental consolidated financial statements of ATMI (in each
case, as restated to reflect the acquisitions of MST and Newform).

-42-

ATMI, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL
STATEMENT SCHEDULE

Page
----

Report of Ernst & Young LLP................................................... F-2
Report of Deloitte & Touche, LLP.............................................. F-3
Report of Arthur Andersen LLP................................................. F-4
Reports of Rath, Anders, Dr. Wanner and Partner (GbR)......................... F-5

Audited Financial Statements and Schedule

Consolidated Balance Sheets - December 31, 1999 and 1998...................... F-7
Consolidated Statements of Income for the years ended December 31, 1999,
1998, and 1997........................................................... F-8
Consolidated Statements of Stockholders' Equity for the years ended
December 31, 1997, 1998, and 1999........................................ F-9
Consolidated Statements of Cash Flows for the years ended December 31, 1999,
1998, and 1997........................................................... F-10
Notes to Consolidated Financial Statements.................................... F-11
Schedule II - Valuation and Qualifying Accounts............................... F-28

F-1

Report of Independent Auditors

The Board of Directors and Stockholders of ATMI, Inc.

We have audited the consolidated balance sheets of ATMI, Inc. as of
December 31, 1999 and 1998, and the related consolidated statements of income,
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1999. Our audits also included the financial statement
schedule listed in the Index at Item 14(a). These consolidated financial
statements are the responsibility of the management of ATMI, Inc. Our
responsibility is to express an opinion on these consolidated financial
statements and schedule based on our audits. We did not audit the December 31,
1998 financial statements or Valuation and Qualifying Accounts Schedule Data of
MST Analytics, Inc. ("MST"), a wholly-owned subsidiary, which statements reflect
total assets and total revenues constituting 6% and 12%, respectively, of the
related consolidated totals at and for the year ended December 31, 1998. Nor did
we audit the March 31, 1998 financial statements of NOW Technologies, Inc.
("NOW"), a wholly owned subsidiary, which statements reflect total revenues
constituting 8% of the related consolidated totals for the year ended March 31,
1998 (which was combined with the accounts of ATMI, Inc. for the year ended
December 31, 1997). Those statements were audited by other auditors whose
reports have been furnished to us, and our opinion, insofar as it relates to
data included for MST and NOW, for the periods indicated, is based solely on the
reports of such other auditors.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits and the reports of the other
auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the reports of other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the consolidated financial position of ATMI, Inc. at December
31, 1999 and 1998, and the consolidated results of its operations and its cash
flows for each of the three years in the period ended December 31, 1999 in
conformity with accounting principles generally accepted in the United States.
Also, in our opinion, the related consolidated financial statement schedule,
when considered in relation to the basic consolidated financial statements taken
as a whole, presents fairly in all material respects the information set forth
therein.

ERNST & YOUNG LLP

Stamford, Connecticut
February 7, 2000

F-2

INDEPENDENT AUDITORS REPORT

Board of Directors
NOW Technologies, Inc. and Subsidiaries
Bloomington, Minnesota

We have audited the consolidated statements of income, stockholders' equity
and cash flows (not presented herein) of NOW Technologies, Inc. and Subsidiaries
(the Company) for the year ended March 31, 1998. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in
all material respects, the results of the Company's operations and its cash
flows for the year ended March 31, 1998, in conformity with generally accepted
accounting principles.

DELOITTE & TOUCHE, LLP
Minneapolis, Minnesota
May 1, 1998

F-3

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of MST Analytics, Inc.

We have audited the consolidated balance sheet of MST ANALYTICS, INC. (a
Delaware corporation) AND SUBSIDIARIES as of December 31, 1998, and the related
consolidated statements of operations, stockholders' equity and cash flows for
the year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit. We did not audit the financial
statements of MST Micro-Sensor-Technologies GmbH, Hohenschaftlarn and Sensoric
Gesellschaft fur angewandte Elektrochemie mbh & Co. KG, Hohenschaftlarn, wholly
and majority-owned subsidiaries, respectively, which statements reflect total
assets and total revenues of 55% and 47%, respectively, of the related
consolidated totals. Those statements were audited by other auditors whose
report has been furnished to us, and our opinion, insofar as it relates to the
amounts included for those entities, is solely based on the report of the other
auditors.

In our opinion, based on our audit and the report of other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of MST Analytics, Inc. and
Subsidiaries as of December 31, 1998, and the results of their operations and
their cash flows for the year then ended, in conformity with generally accepted
accounting principles.

Arthur Andersen LLP
Chicago, Illinois
May 28, 1999

F-4

OPINION

MST Micro-Sensor-Technologie GmbH Hohenschaftlarn, Germany

We have conducted a full audit of MST Micro-Sensor-Technologie GmbH,
Hohenschaftlarn, (in the following called "MST" or "Company"), expressed in
Deutsche Mark (DM), as of December 31, 1998.

(1) These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

(2) We have conducted our audit in accordance with generally accepted auditing
standards in the United States. These standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

(3) The reporting package does not present all disclosures required under US-
GAAP, e.g. no cash flow statement and no tax rationalization form have been
prepared.

(4) On the basis of our audit we certify that the documents attached to this
clearance have been issued in compliance with the methods and principles
accepted by US-GAAP.

Munich, January 22, 1999
Rath, Anders, Dr. Wanner & Partner

Dipl.-Kfm. Kabisch Dipl.-Kfm. Metzler
Vereidigter Buchprufer Wirtschaftsprufer

F-5

OPINION

Sensoric Gesellschaft fur angewandte
Elektrochemie mbh Co. KG
Hohenschaftlarn

We have conducted a full audit of Sensoric Gesellschaft fur angewandte
Elektrochemie mbh & Co. KG, Hohenschaftlarn, (in the following called "Sensoric"
or "Company"), expressed in Deutsche Mark (DM), as of December 31, 1998.

(1) These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

(3) The reporting package does not present all disclosures required under US-
GAAP, e.g. no cash flow statement and no tax rationalization form have been
prepared.

(4) On the basis of our audit we certify that the documents attached to this
clearance have been issued in compliance with the methods and principles
accepted by US-GAAP.

Munich, January 22, 1999
Rath, Anders, Dr. Wanner & Partner

Dipl.-Kfm. Kabisch Dipl.-Kfm. Metzler
Vereidigter Buchprufer Wirtschaftsprufer

F-6

ATMI, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

December 31,
-----------------------------------
1999 1998
---------------- -----------------

ASSETS
Current assets:
Cash and cash equivalents (Note 1)............................................ $ 31,619 $ 21,618
Marketable securities (Notes 1 and 2)......................................... 60,555 64,551
Accounts receivable, net of allowance for doubtful accounts
of $1,366 in 1999, and $959 in 1998 (Note 3)................................ 41,989 25,708
Inventories (Notes 1 and 4)................................................... 21,733 19,216
Deferred income taxes (Note 8)................................................ 5,277 2,756
Other......................................................................... 6,256 7,717
---------- ----------
Total current assets..................................................... 167,429 141,566
Property, plant and equipment, net (Notes 1 and 5)............................. 54,675 54,683
Deferred income taxes (Note 8)................................................. 2,090 48
Goodwill and other long-term assets, net (Notes 1 and 11)...................... 8,462 12,355
---------- ----------
$232,656 $208,652
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.............................................................. $ 10,971 $ 9,287
Accrued liabilities........................................................... 10,146 9,976
Accrued salaries and related benefits......................................... 9,185 3,547
Loans, notes and bonds payable, current portion (Note 6)...................... 4,964 9,396
Capital lease obligations, current portion (Note 7)........................... 1,936 2,493
Income taxes payable (Note 8)................................................. 4,592 1,972
Deferred income taxes (Note 8)................................................ 4,436 957
---------- ----------
Total current liabilities................................................ 46,230 37,628
Loans, notes and bonds payable, less current portion (Note 6).................. 4,448 8,813
Capital lease obligations, less current portion (Note 7)....................... 1,832 3,746
Deferred income taxes (Note 8)................................................. 3,754 4,611
Other long-term liabilities.................................................... 478 288

Minority interest.............................................................. 1,109 846

Stockholders' equity (Note 10):
Preferred stock, par value $.01: 2,000 shares authorized;
none issued and outstanding................................................. - -
Common stock, par value $.01: 50,000 shares authorized;
issued 27,774 in 1999, and 27,484 in 1998................................... 278 275
Additional paid-in capital.................................................... 122,536 118,516
Retained earnings............................................................. 45,465 35,082
Accumulated other comprehensive income (loss)................................. 6,526 (1,153)
---------- ----------
Total stockholders' equity............................................... 174,805 152,720
---------- ----------
$232,656 $208,652
========== ==========

See accompanying notes.

F-7

ATMI, INC.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

Year Ended December 31,
--------------------------------------------------
1999 1998 1997
---------------- --------------- ---------------

Revenues (Notes 1 and 15)......................................... $196,236 $165,106 $192,012
Cost of revenues.................................................. 92,970 83,419 92,561
------------ ------------ -------------
Gross profit...................................................... 103,266 81,687 99,451
Operating expenses:
Research and development (Note 1).......................... 18,359 16,630 14,336
Selling, general and administrative (Note 13).............. 60,305 56,925 60,593
Merger costs and related expenses (Note 11)................ 9,914 1,700 9,000
------------- ------------- -------------
88,578 75,255 83,929
------------- ------------- -------------
Operating income.................................................. 14,688 6,432 15,522
Interest income................................................... 4,384 4,210 1,732
Interest expense (Note 6)......................................... (1,267) (1,723) (2,609)
Other income, net................................................. 724 539 340
------------- ------------- -------------
Income before taxes and minority interest......................... 18,529 9,458 14,985
Income taxes (Note 8)............................................. 7,720 4,412 8,588
------------- ------------- -------------
Income before minority interest................................... 10,809 5,046 6,397
Minority interest................................................. (263) (111) (2)
------------- ------------- -------------
Net income (Note 15).............................................. $ 10,546 $ 4,935 $ 6,395
============= ============= =============
Net income per share--basic (Notes 1 and 10)...................... $ $0.40 $0.19 $ 0.27
============= ============= =============
Net income per share--assuming dilution (Notes 1 and 10).......... $ 0.37 $0.18 $0.25
============= ============= =============

Weighted average shares outstanding--basic (Notes 1 and 10)...... 26,440 25,645 23,617
============= ============= =============

Weighted average shares outstanding--assuming dilution
(Notes 1 and 10)................................................ 28,319 27,423 25,660
============= ============= =============

See accompanying notes.

F-8

ATMI, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands)

Accumulated
-----------
Additional Other
---------- -----
Common Paid-in Retained Comprehensive
------ ------- -------- -------------
Stock Capital Earnings Income Total
----- ------- -------- ------ --------

Balance at December 31, 1996....................... $239 $ 41,438 $24,450 $ (78) $ 66,049
Issuance of 83 common shares pursuant
to the exercise of employee stock options......... -- 454 -- -- 454
Issuance of 151 common shares pursuant
to the exercise of warrants....................... 2 1,688 -- -- 1,690
Issuance of common shares to pooled entity......... 10 4,284 -- -- 4,294
Issuance of common and preferred shares by
pooled entity..................................... -- 5,046 -- -- 5,046
Distributions to stockholders...................... -- -- (199) -- (199)
Compensation for the issuance of common shares..... -- 272 -- -- 272
Tax benefit related to nonqualified stock options.. -- 678 -- -- 678
Net income......................................... 6,395 6,395
Cumulative translation adjustment.................. -- -- -- (1,376) (1,376)
--------
Comprehensive income............................... 5,019

---------------------------------------------------------------
Balance at December 31, 1997....................... 251 53,860 30,646 (1,454) 83,303
---------------------------------------------------------------
Issuance of 159 common shares pursuant
to the exercise of employee stock options......... 1 782 -- -- 783
Sale of 2,257 common shares, net of issuance
costs of $4,161................................... 23 62,403 -- -- 62,426

Compensation for the issuance of common shares..... -- 372 -- -- 372
Tax benefit related to nonqualified stock options.. -- 1,099 -- -- 1,099
Distributions to stockholders...................... -- -- (397) -- (397)
Adjustment to reflect change in pooled entity --
fiscal year....................................... -- (102) -- (102)
Net income......................................... -- -- 4,935 -- 4,935
Unrealized loss on available-for-sale securities
(net of tax benefit of $281)...................... -- -- -- (500) (500)
Cumulative translation adjustment.................. -- -- -- 801 801
--------
Comprehensive income............................... 5,236

---------------------------------------------------------------
Balance at December 31, 1998....................... 275 118,516 35,082 (1,153) 152,720
---------------------------------------------------------------
Issuance of 204 common shares pursuant
to the exercise of employee stock options......... 2 1,046 -- -- 1,048
Issuance of 20 common shares pursuant
to the exercise of warrants....................... -- 222 -- -- 222
Issuance of 64 common shares pursuant
to the employee stock purchase plan............... 1 952 -- -- 953
Compensation for the issuance of common shares..... -- 426 -- 426
Tax benefit related to nonqualified stock options.. -- 1,374 -- -- 1,374
Adjustment to reflect change in pooled entity --
fiscal year....................................... -- (163) -- (163)
Net income......................................... -- -- 10,546 -- 10,546
Unrealized gain on available-for-sale securities
(net of tax provision of $4,141).................. -- -- -- 7,860 7,860
Cumulative translation adjustment.................. -- -- -- (181) (181)
--------
Comprehensive income............................... 18,225

---------------------------------------------------------------
Balance at December 31, 1999....................... $278 $122,536 $45,465 $ 6,526 $174,805
-----------------------------------------------------------------

See accompanying notes.

F-9

ATMI, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except per share data)

Year Ended December 31,
------------------------------
1999 1998 1997
-------- -------- --------

Operating activities
Net income....................................................................... $ 10,546 $ 4,935 $ 6,395
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization................................................... 10,868 9,900 7,957
Write-down of goodwill.......................................................... 3,386 - -
Stock option compensation....................................................... 426 372 272
Effect of change of fiscal year of pooled entity................................ (163) (102) -
Provision for bad debt.......................................................... 587 399 1,251
Deferred income taxes........................................................... (6,677) (1,891) 2,369
Tax benefit of nonqualified stock options....................................... 1,374 1,099 678
Minority interest in net earnings of subsidiaries............................... 263 111 2
Changes in operating assets and liabilities
(Increase) decrease in accounts receivable..................................... (16,868) 10,667 (11,624)
(Increase) in inventory........................................................ (2,517) (796) (4,085)
(Increase) decrease in other assets............................................ 1,330 (4,394) (2,990)
Increase (decrease) in accounts payable........................................ 1,684 (1,187) (628)
Increase (decrease) in accrued expenses........................................ 5,808 (5,156) 4,055
Increase (decrease) in other liabilities....................................... 3,017 (672) 473
-------- -------- --------
Total adjustments.......................................................... 2,518 8,350 (2,270)
-------- -------- --------
Net cash provided by operating activities.................................. 13,064 13,285 4,125
-------- -------- --------
Investing activities
Capital expenditures............................................................. (10,222) (15,023) (9,084)
Long-term investment............................................................. - - (250)
Sale (purchase) of marketable securities, net.................................... 16,278 (47,871) 777
Payments for acquisitions........................................................ - - (5,551)
Proceeds from sale of assets..................................................... - 199 -
-------- -------- --------
Net cash provided (used) by investing activities........................... 6,056 (62,695) (14,108)
-------- -------- --------
Financing activities
Borrowings from loans, notes, and bonds payable.................................. 303 2,232 4,630
Payments on loans, notes, and bonds payable...................................... (9,100) (6,747) (4,411)
Distribution to stockholders..................................................... - (397) (199)
Payments on capital lease obligations............................................ (2,471) (2,831) (3,125)
Proceeds from sale of common stock, net.......................................... - 62,426 -
Proceeds from sale of common and preferred stock by pooled entities.............. - - 8,549
Investment by minority stockholder............................................... - - 251
Proceeds from exercise of stock options and warrants............................. 2,223 783 2,144
-------- -------- --------
Net cash provided (used) by financing activities........................... (9,045) 55,466 7,839
-------- -------- --------
Effects of exchange rate changes on cash......................................... (74) 120 (142)
-------- -------- --------
Net increase (decrease) in cash and cash equivalents............................. 10,001 6,176 (2,286)
Cash and cash equivalents, beginning of year..................................... 21,618 15,442 17,728
-------- -------- --------
Cash and cash equivalents, end of year........................................... $ 31,619 $ 21,618 $ 15,442
======== ======== ========
Disclosure of noncash financing activities
Conversion of note payable to preferred stock by pooled entity................... - - $ 685
======== ======== ========

See accompanying notes.

F-10

ATMI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of ATMI, Inc.
and its majority-owned subsidiaries, after elimination of intercompany accounts
and transactions.

Certain amounts have been reclassified to conform to current year
presentation.

Company's Activities

ATMI, Inc. together with its subsidiaries (the ''Company'') is a leading
supplier of materials, equipment and related services used in the manufacture of
semiconductor devices. The Company targets specialty materials used in front-end
semiconductor manufacture. The Company provides:

. a broad range of ultrahigh-purity semiconductor materials;
. semiconductor materials packaging and delivery systems;
. sensors for the workplace and environment that detect materials as
they move through the workplace;
. point-of-use environmental equipment that abates materials; and
. specialty thin film deposition services that provide coated wafers
directly to customers.

Revenue Recognition

Revenues are recognized upon the shipment of goods.

Use of Estimates

The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results may differ from those
estimates.

Research and Development

Research and development costs, including materials, labor, and overhead
related to self-funded projects, are expensed as incurred.

Marketable Securities and Investments

Highly liquid investments with maturities of three months or less, when
purchased, are classified as cash and cash equivalents. Investments with
maturities greater than three months are classified as marketable securities.

In connection with the Company's strategic alliances and research and
development activities, it has acquired equity securities of certain of its
alliance partners.

F-11

ATMI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

1. Summary of Significant Accounting Policies (continued)

The Company accounts for investments in accordance with SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity Securities." The
Company's policy, except for its equity investments in alliance partners, is to
protect the value of its investments portfolio and to minimize principal risk by
earning returns based on current interest rates. All of the Company's marketable
securities are classified as available-for-sale as of the balance sheet date and
are reported at fair value, based on quoted market prices, with unrealized gains
and losses recorded in accumulated other comprehensive income, net of tax. The
cost of securities sold is based on the specific identification method. Interest
on these securities is accrued and included in interest income.

Management determines the classification of marketable debt securities at
the time of purchase and reevaluates such designation as of each balance sheet
date.

Inventories

Inventories are stated at the lower of cost or market using the first-in,
first-out (FIFO) method.

Property, Plant and Equipment

Property and equipment is stated at cost. Depreciation and amortization of
property, plant and equipment is computed using the straight-line method over
the estimated useful lives of the assets, which vary from three to thirty-five
years.

Foreign Currency Translation

Adjustments relating to the translation of foreign currency to U.S. dollars
are reported as a separate component of accumulated other comprehensive income.
Gains or losses resulting from foreign currency transactions are included in
other income (expense) and have been immaterial.

Taxes

The Company accounts for income taxes in accordance with the liability
method. Under this method, deferred tax assets and liabilities are determined
based upon differences between financial reporting and the tax basis of assets
and liabilities and are measured using the enacted tax rates and laws that are
expected to be in effect when the differences are expected to reverse.

Fair Values of Financial Instruments

The Company's financial instruments include cash and cash equivalents,
marketable securities, accounts receivable, and debt. Marketable securities are
accounted for at fair value. All other financial instruments are accounted for
on an historical cost basis which, due to the nature of these instruments,
approximates fair value at the balance sheet dates.

F-12

ATMI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

1. Summary of Significant Accounting Policies (continued)

Long-Lived Assets

The Company reviews on a periodic basis the value of its long-lived assets
to determine whether an impairment exists. In connection with the acquisition of
Delatech, the Company recorded a charge of $3.4 million associated with the
impairment of goodwill related to an existing EcoSys product line (see Note 11).
This charge was based on the estimate of future cash flows on a discounted basis
compared with the carrying value of the goodwill. Goodwill of $3.7 million and
$7.8 million at December 31, 1999 and 1998 is amortized over periods of ten to
twenty years and is stated net of accumulated amortization of $2.2 million and
$1.5 million at December 31, 1999 and 1998, respectively.

Stock Based Compensation

The Company accounts for employee stock compensation plans in accordance
with Accounting Principle Board (APB) Opinion No. 25, "Accounting for Stock
Issued to Employees." Under APB No. 25, compensation cost is the excess, if any,
of the quoted market price of the Company's common stock at the grant date over
the amount the employee must pay to acquire the common stock. The Company has
elected to continue to account for its employee stock compensation plans under
APB No. 25. Pro forma disclosures of net income, net income per share-basic and
net income per share- assuming dilution, as if the fair value based method of
accounting had been applied, are presented in Note 10.

Per Share Data

Basic and diluted earnings per share are calculated in accordance with FASB
Statement No. 128, "Earnings Per Share".

Recent Accounting Pronouncements

In December 1999, the SEC issued Staff Accounting Bulletin ("SAB") 101,
"Revenue Recognition," which provides guidance on the recognition, presentation,
and disclosure of revenue in financial statements filed with the SEC. SAB 101
outlines the basic criteria that must be met to recognize revenue and provides
guidance for disclosure related to revenue recognition policies. At this time,
the Company is still assessing the impact of SAB 101 on its financial position
and results of operations.

2. Marketable Securities

Marketable securities are comprised of the following at December 31, 1999
(in thousands):

Gross
--------------
Unrealized Fair
-------------- --------------
Cost Gain Value
-------------- -------------- --------------

Corporate obligations .................. $36,887 $ -- $36,887
U.S. Government obligations............. 3,969 -- 3,969
Certificates of deposit................. 6,011 -- 6,011
--------------------------------------------------------
Total debt securities 46,867 -- 46,867
Common stock............................ 2,187 11,501 13,688
--------------------------------------------------------
Total marketable securities $49,054 $11,501 $60,555
========================================================

F-13

ATMI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

2. Marketable Securities (continued)

Marketable securities are comprised of the following at December 31, 1998
(in thousands):

Gross
--------------
Unrealized Fair
------------- ------------
Cost Loss Value
------------- ------------- ------------

Corporate obligations............... $49,563 $ -- $49,563
U.S. Government obligations......... 8,695 -- 8,695
Certificates of deposit............. 4,887 -- 4,887
-------------------------------------------------
Total debt securities 63,145 -- 63,145
Common stock........................ 2,187 (781) 1,406
------------------------------------------------
Total marketable securities $65,332 $(781) $64,551
================================================

All of the Company's marketable debt securities have maturities of less
than two years.

3. Accounts Receivable

Credit is extended to commercial customers based on an evaluation of their
financial condition, and collateral is not generally required. The evaluation of
financial condition is performed to reduce the risk of loss. The Company has not
experienced any material losses due to uncollectible accounts receivable.
Certain transactions with foreign customers are supported by letters of credit.
The Company maintains an allowance for doubtful accounts at a level that
management believes is sufficient to cover potential credit losses.

Amounts due from various agencies of the U.S. Government were approximately
$2.7 million and $2.1 million at December 31, 1999 and 1998, respectively.

4. Inventories

Inventories are comprised of the following (in thousands):

December 31,
--------------------------------
1999 1998
-------------- ----------------

Raw materials .......................... $16,088 $14,335
Work in process ........................ 3,059 2,392
Finished goods ......................... 4,115 4,350
-------------------------------
23,262 21,077
Obsolescence reserve (1,529) (1,861)
-------------------------------
$21,733 $19,216
===============================

F-14

ATMI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

5. Property, Plant and Equipment

Property, plant and equipment is comprised of the following (in thousands):

December 31,
-----------------------------------
1999 1998
----------------- ----------------

Land ..................................... $ 2,738 $ 1,944
Buildings ................................ 9,875 10,522
Machinery and equipment .................. 70,691 63,624
Furniture and fixtures ................... 6,839 5,657
Leasehold improvements ................... 9,287 8,094
------------------------------------
99,430 89,841
Accumulated depreciation and
amortization.............................. (44,755) (35,158)
------------------------------------
$ 54,675 $ 54,683
====================================

Depreciation expense for the years ended December 31, 1999, 1998 and 1997,
was $10.2 million, $9.1 million and $7.4 million, respectively.

6. Loans, Notes and Bonds Payable

Loans, notes and bonds payable consist of the following (in thousands):

December 31,
--------------------------------
1999 1998
--------------- ---------------

Note payable bearing interest at 8.25%, due in three annual
installments beginning January 1, 1999 .............................. $ 1,333 $ 2,000
Term loans with Connecticut state agency, bearing interest ranging
between 5%-5.75%, due between January 2000 and June 2002 ............ 1,490 2,212
Credit lines with commercial banks, bearing interest ranging between
6.50%-8.75% available through February 2000 ......................... 940 2,376
Notes payable primarily with commercial banks and leasing companies,
bearing interest ranging between 2.5%-6.0%, due between April 1998
and September 2008................................................... 3,349 7,466
Mortgages payable, bearing interest at 8.63%, due November 2016 ...... -- 1,455
City of Bloomington, Minnesota Industrial Revenue Bond, interest
rate is variable (4.2% and 4.4% at December 31, 1999 and 1998),
quarterly payments of $0.1 million, due September 2005 .............. 2,300 2,700
------- -------
9,412 18,209
Less current portion ................................................. (4,964) (9,396)
------- -------
$ 4,448 $ 8,813
======= =======

F-15

ATMI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

6. Loans, Notes and Bonds Payable (continued)

The approximate aggregate debt maturities are as follows as of December 31,
1999 (in thousands):

2000 $ 3,064
2001 2,735
2002 1,800
2003 672
2004 522
Thereafter 619
---------
$ 9,412
=========

The balance of loans and notes payable at December 31, 1999 and 1998,
respectively include amounts due in foreign currencies as follows: Belgian
Francs 64,046,000 and 68,499,000 ($1,595,000 and $1,994,000) and Deutschmarks
4,486,000 and 7,498,000 ($2,305,000 and $4,502,000).

The term loans are collateralized by various equipment, leasehold
improvements and renovations in the Company's Connecticut facility. The
mortgages are collateralized by the building at the Company's Napa, California
facility. The majority of the Company's notes payable are secured by the related
real property or equipment. The Company's credit lines are secured by
substantially all the assets of certain of the Company's subsidiaries and have
available borrowing capacity approximating $1.8 million at December 31, 1999.
The Company is in compliance with the credit line and notes payable covenants.

The bondholders may tender the City of Bloomington, Minnesota bonds at any
time for the principal amount plus accrued interest. As a result, they have been
classified as a current liability. The Company has the option to convert the
bonds to a fixed rate provided all bonds can be remarketed at the fixed rate.
The first fixed rate optional redemption date would be July 1 of the year that
is halfway between the conversion date and July 1, 2005. If redeemed, the
Company must pay 102% and 101% of bond principal in the first and second years
following the first fixed rate optional redemption date, respectively. Prior to
conversion to a fixed rate, the Company has the option to redeem the bonds
without premium.

Interest paid was $1.3 million, $2.3 million, and $2.8 million, for the
years ended December 31, 1999, 1998, and 1997, respectively.

Certain of the Company's subsidiaries' financing agreements contain
limitations or prohibitions on the payment of dividends without the lender's
consent or in conjunction with the subsidiary's failure to comply with various
financial covenants. The Company has never declared or paid cash dividends on
its capital stock. The Company does not anticipate paying any cash dividends in
the foreseeable future.

F-16

ATMI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

7. Leases

The Company is obligated under capital leases for certain machinery and
equipment that expire at various dates during the next five years. The gross
amount of machinery and equipment under the capital leases and the related
accumulated depreciation were as follows (in thousands):

December 31,
-------------------------
1999 1998
---------- ----------
Machinery and equipment............ $ 10,380 $ 12,269
Accumulated depreciation........... (3,173) (3,109)
--------- ---------
$ 7,207 $ 9,160
========= =========

The following is a schedule of future minimum lease payments for capital
leases as of December 31, 1999 (in thousands):

2000 ........................................ $ 2,175
2001 ........................................ 1,560
2002 ........................................ 365
--------
Total lease payments ........................... 4,100
Less amount representing interest .............. (332)
--------
Present value of net capital lease payments...... 3,768
Less current portion ........................... (1,936)
--------
Long-term portion .............................. $ 1,832
========

The Company leases office and manufacturing facilities, and certain
manufacturing equipment under several operating leases expiring between 2000 and
2005. Rental expense was $4.7 million, $5.0 million, and $4.6 million, for the
years ended December 31, 1999, 1998 and 1997, respectively.

The following is a schedule of future minimum lease payments for operating
leases as of December 31, 1999 (in thousands):

Operating
-------------
Leases
-------------

2000 ..................................... $ 3,393
2001 ..................................... 2,495
2002 ..................................... 1,703
2003 ..................................... 994
2004 ..................................... 878
Thereafter ............................... 594
-------------
Total minimum lease payments .................. $ 10,057
=============

F-17

ATMI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

8. Income Taxes

Pretax income was taxed in the following jurisdictions (in thousands):

Year Ended December 31,
-----------------------------------------------
1999 1998 1997
--------------- -------------- --------------

Domestic ........................... $15,672 $5,989 $13,677
Foreign ........................... 2,594 3,358 1,306
------- ------ -------
Total pretax income ................ $18,266 $9,347 $14,983
======= ====== =======

Significant components of the provision for income taxes for the periods
presented are as follows (in thousands):

December 31,
-------------------------------------------------
1999 1998 1997
---------------- --------------- --------------

Current:
Federal ....................... $11,811 $ 4,539 $5,305
State ......................... 1,635 1,116 740
Foreign ....................... 951 648 174
------- ------- ------
Total current ............................ 14,397 6,303 6,219
------- ------- ------
Deferred:
Federal ....................... (5,901) (1,816) 1,896
State ......................... (746) (536) 321
Foreign ....................... (30) 461 152
------- ------- ------
Total deferred ........................... (6,677) (1,891) 2,369
------- ------- ------
$ 7,720 $ 4,412 $8,588
======= ======= ======

Significant components of the Company's deferred tax assets and liabilities
are as follows (in thousands):

December 31,
--------------------------
1999 1998
---------- ----------

Deferred tax assets:
Accrued liabilities ................................... $ 3,565 $ 1,234
Inventory reserves .................................... 1,713 1,183
Net operating loss and tax credit carryforwards ........ 1,823 2,045
Other, net ............................................. 266 496
------------------------
7,367 4,958
Valuation allowance ............................................ - (2,154)
------------------------
7,367 2,804
Deferred tax liabilities:
Depreciation and amortization .......................... (3,736) (4,614)
Unrealized gain on marketable securities ............... (4,141) -
Other, net ............................................. (313) (954)
-------------------------
(8,190) (5,568)
-------------------------
Net deferred tax liabilities ................................... $ (823) $(2,764)
=========================

The valuation allowance was eliminated as a result of changes in estimates
regarding the realizability of net operating loss and tax credit carryforwards
of certain acquired companies.

F-18

ATMI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

8. Income Taxes (continued)

As of December 31, 1999, the Company has federal net operating loss
carryforwards of $4.6 million attributable to certain acquired companies and tax
credit carryforwards of $0.2 million. The net operating loss and tax credit
carryforwards will expire at various dates beginning in 2007 through 2019, if
not utilized. Utilization of the net operating losses and credits may be subject
to a substantial annual limitation due to the "change in ownership" provisions
of the Internal Revenue Code of 1986 and similar state provisions.

Income taxes paid for the years ended December 31, 1999, 1998, and 1997
were $9.2 million, $9.4 million and $6.1 million, respectively.

The reconciliation of income tax computed at the U.S. federal statutory tax
rate to the Company's tax expense is (in thousands):

For the Year Ended December 31,
--------------------------------------------
1999 1998 1997
------------ -------------- --------------

U.S. statutory rate ........................... $ 6,393 $3,178 $5,094
State income taxes ............................. 657 266 662
Foreign income taxes ........................... (162) 228 (24)
Effect of nondeductible acquisition expenses ... 1,851 599 3,548
Net operating loss carryforward utilization .... -- -- (296)
Foreign sales corporation benefit .............. (773) (324) --
Reversal of valuation allowance ................ (2,154) 855 (954)
Tax liabilities accrued ........................ 1,511 -- --
Other, net ..................................... 397 (390) 558
------------------------------------------
$ 7,720 $4,412 $8,588
==========================================

South Korea has granted the Company a five year full income tax exemption,
which expires in 2003, and an additional three year 50% exemption, which expires
in 2006. The effect of the tax exemption was to reduce income tax expense by
$0.2 million and $0.1 million for the years ended December 31, 1999 and 1998,
respectively.

The former securityholders of the ADCS Group have agreed to indemnify the
Company against losses arising out of certain tax matters. As security for these
tax matters, the former securityholders of the ADCS Group have delivered 700,000
shares of the Company's common stock which they received into escrow (see Note
11). While the possible exposures are difficult to quantify, the Company
believes that, regardless of the probability that liabilities arise, the
potential exposures range from $0 to $22 million depending on the tax matter.
Although the former securityholders of the ADCS Group have agreed to indemnify
the Company against losses arising out of such tax matters, any assessments, if
ultimately determined against the Company, would result in a charge to the
Company's results of operations. During the second quarter 1999, the Company was
notified by the Internal Revenue Service of an assessment of $2.1 million for
certain tax matters. The Company believes that such assessment is without merit
and intends to vigorously defend its position in these tax matters.

F-19

ATMI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

9. Profit Sharing Plan

The Company maintains a 401(k) profit sharing plan (the "Plan") covering
substantially all of its employees and is subject to the provisions of the
Employee Retirement Income Security Act of 1974. The Company's matching
contributions are discretionary by plan year and were $0.4 million, $0.1 million
and $0.1 million for 1999, 1998 and 1997, respectively.

10. Stockholders' Equity

In March 1998, the Company completed a registered underwritten public
offering of 5,428,000 shares, including over-allotments, of common stock at
$29.50 per share. Net proceeds to the Company of $62.4 million were from
2,257,291 shares sold by the Company while 3,170,709 shares were sold by certain
stockholders. Costs of the offering, including underwriting commissions, were
$4.2 million.

Stock Plans

The Company has certain stock plans, which provide for the granting of up
to 4,515,833 nonqualified stock options, incentive stock options ("ISOs"), stock
appreciation rights and restricted stock awards to employees, directors and
consultants of the Company.

Under the terms of these stock plans, nonqualified options granted may not
be at a price of less than 50% of the fair market value of the common stock, and
ISOs granted may not be at a price of less than 100% of fair market value of the
common stock on the date of grant. All grants have been made at fair market
value under the plans. Options are generally exercisable commencing one year
after the date of grant at the rate of 20% per annum on a cumulative basis.
Nonqualified options expire up to ten years from the date of grant, and ISOs
expire five to ten years from the date of grant.

Number of Option Price
-------- ------------
Shares Per Share
------ ---------

Options outstanding at December 31, 1996 958,216 $ 0.28 - $17.63
Granted............................................ 1,023,506 $ 2.10 - $40.13
Canceled........................................... (348,250) $ 0.53 - $40.13
Exercised.......................................... (82,520) $ 0.28 - $13.50
--------- ---------------
Options outstanding at December 31, 1997 1,550,952 $ 0.28 - $29.38
Granted............................................ 752,440 $14.00 - $33.00
Canceled........................................... (110,130) $ 5.63 - $33.00
Exercised.......................................... (158,918) $ 0.28 - $17.63
--------- ---------------
Options outstanding at December 31, 1998 2,034,344 $ 0.28 - $33.00
Granted............................................ 1,148,954 $19.19 - $37.38
Canceled........................................... (134,658) $ 5.63 - $27.00
Exercised.......................................... (204,085) $ 0.28 - $29.38
--------- ---------------
Options outstanding at December 31, 1999 2,844,555 $ 0.44 - $37.38
========= ===============

At December 31, 1999 options for 1,017,946 shares were exercisable and
options for 805,667 shares were available for grant. Exercise prices for 282,340
options outstanding ranged from $0.44-$4.04; for 376,638 options outstanding
ranged from $5.63-$10.00; for 449,808 options outstanding ranged from $10.13-
$20.00; and for 956,820 options outstanding ranged from $20.88- $24.25 and for
778,949 options ranged from $24.38-$37.38 as of December 31, 1999.

F-20

ATMI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

10. Stockholders' Equity (continued)

The weighted average exercise price and remaining contractual life of
options outstanding at December 31, 1999 was $18.94 and 7.8 years, respectively.

As a result of the NOW and MST mergers in 1998 and 1999, respectively (see
Note 11), stock options of NOW and MST were converted into 205,089 and 123,016
of ATMI stock options. NOW stock options were converted into ATMI stock options
at historical prices ranging from $4.04 to $8.90 and MST stock options were
converted into ATMI stock options at historical prices ranging from $2.10 to
$15.74.

If compensation expense for the Company's plans had been determined for all
stock option grants based on the fair value at the grant dates for awards under
those plans, consistent with the method described in SFAS No. 123, the Company's
net income, net income per share-basic and net income per share-assuming
dilution would have been reduced to the pro forma amounts indicated below (in
thousands, except per share data):

Pro forma
---------
1999 1998 1997
---- ---- ----

Net income................................. $6,948 $2,984 $5,556
Net income per share--basic................ $ 0.26 $ 0.12 $ 0.24
Net income per share--assuming dilution.... $ 0.25 $ 0.11 $ 0.22

The fair value of each option grant, for pro forma disclosure purposes, was
estimated on the date of grant using the Black-Scholes option pricing model with
the following weighted average assumptions:

1999 1998 1997
---- ---- ----

Expected dividend yield..................... None None None
Risk free interest rate..................... 5.80% 5.50% 6.00%
Expected volatility .615 .628 .560
Expected life of options.................... 7.5 years 7.5 years 7.5 years

The weighted average fair value of non-canceled stock options granted in
1999, 1998 and 1997 was $17.18, $14.74 and $17.04, respectively.

Employee Stock Purchase Plan

The Employee Stock Purchase Plan ("ESPP Plan") was approved in May 1998 and
enables all employees to subscribe at six month intervals to purchase shares of
common stock at the lower of 85% of the fair market value of the shares on the
first day or last day of each six month period. A maximum of 500,000 shares is
authorized for subscription. At December 31, 1999, 64,000 shares have been
issued under the ESPP Plan, and no such shares were issued in 1998.

F-21

ATMI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

10. Stockholders' Equity (continued)

Earnings Per Share

The following table presents the computation of basic and diluted earnings
per share (in thousands, except per share data):

1999 1998 1997
---- ---- ----

Numerator:
Net income................................... $10,546 $ 4,935 $ 6,395
=========================================
Denominator:
Denominator for basic earnings per share-
Weighted-average shares.................... 26,440 25,645 23,617
Dilutive effect of contingent shares
related to acquisitions subject to escrow
arrangements............................... 1,149 1,289 1,289
Dilutive effect of employee stock options.... 730 489 754
-----------------------------------------
Denominator for diluted earnings per share... 28,319 27,423 25,660
=========================================
Net income per share--basic..................... $ 0.40 $ 0.19 $ 0.27
=========================================
Net income per share--assuming dilution......... $ 0.37 $ 0.18 $ 0.25
=========================================

Options to purchase 18,900, 720,520 and 16,000 shares of common stock,
outstanding as of December 31, 1999, 1998 and 1997, respectively, were not
included in the computation of diluted earnings per share because their exercise
prices were greater than the average market price of the common shares and,
therefore, their inclusion would be antidilutive.

11. Mergers and Acquisitions

The Company has consummated eight mergers since 1997 each of which has been
accounted for as a pooling of interests. The entities acquired and share
consideration exchanged were as follows:

Shares Held in
Escrow December
Company Year Shares Issued 31, 1999
- ----------------------------------------------------------------------------------------------------

TeloSense Corporation 1999 232,000 -
Advanced Chemical Systems International, Inc. 1999 1,202,000 61,000
Delatech Incorporated 1999 2,347,000 234,000
NewForm N.V. 1999 550,000 55,000
MST Analytics, Inc. 1999 993,000 99,000
NOW Technologies, Inc. 1998 1,594,000 -
ADCS Group (Note 8) 1997 5,469,000 700,000
Lawrence Semiconductor Laboratories, Inc. 1997 3,671,000 -

The former securityholders of the aforementioned entities have agreed to
indemnify the Company from and against certain losses arising out of breaches of
representations and warranties made by the respective securityholders. As
security for these obligations, the former securityholders agreed to escrow a
certain specified amount of the merger consideration. These

F-22

ATMI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

11. Mergers and Acquisitions (continued)

shares will be released from escrow in accordance with the terms of the
respective merger agreements.

The Company has reduced retained earnings by $163,000 and $102,000 in 1999
and 1998, respectively, to adjust retained earnings for the different fiscal
year ends of certain of the acquired entities.

In connection with the investigation, analysis and closings of the
aforementioned transactions, the Company recorded merger costs and related
expenses of $10.5 million, $1.7 million and $9.0 million in 1999, 1998, and
1997, respectively. During 1999, the Company reversed approximately $0.6 million
of merger costs accrued in prior years. Included within merger costs and related
expenses in 1999 is a charge of $4.4 million related to the Delatech acquisition
to recognize the impaired value of certain inventory ($1 million) and goodwill
($3.4 million) associated with an existing environmental equipment product line.
These charges were based on the estimate of future cash flows on a discounted
basis compared with the carrying value of these assets.

For the years ended December 31, 1998 and 1997, prior to the acquisitions,
revenues and net income of acquired companies included in the financial
statements are as follows (in thousands):

Revenues: 1998 1997
--------- -------------------------

ATMI............................ $97,874 $101,877
TeloSense, ACSI and Delatech.... $42,994 $ 62,043
NewForm and MST................. $24,238 $ 13,237
NOW............................. - $ 14,855

Net Income (Loss): 1998 1997
------------------ -------------------------
ATMI............................ $ 6,465 $ 4,421
TeloSense, ACSI and Delatech.... $(2,024) $ 1,228
NewForm and MST................. $ 494 $ (762)
NOW............................. - $ 1,508

On July 15, 1997, MST acquired 100% of the outstanding capital stock of
four operating companies (i) Environmental Monitoring Technology S.A., a Swiss
holding company which owns 100% of the stock of MST Measurement Systems, Inc.;
(ii) Micro-Sensor Technologie GmbH; (iii) FPM Analytics, Inc. and (iv) Sensoric
GmbH ("four operating companies"). The aggregate purchase price for the four
operating companies was $18.8 million which was composed of cash of $5.6
million, the issuance of stock, and a two-year promissory note of $0.1 million.

F-23

ATMI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

11. Mergers and Acquisitions (continued)

The acquisition was accounted for as a purchase and, accordingly, the
operating results of the four operating companies have been included in the
Company's consolidated financial statements since the date of acquisition (July
15, 1997). The excess of the aggregate purchase price over the fair market value
of the net assets acquired of $4.4 million is being amortized over 10 years. The
following unaudited pro forma consolidated results of operations for the year
ended December 31, 1997 assume that the acquisition of the four operating
companies occurred as of January 1, 1997 (in thousands, except per share data):

1997
--------
Net revenues $200,256
Income before taxes and minority interest $ 15,485
Net income $ 6,893
Net income per share assuming dilution $ 0.27

12. Comprehensive Income

During 1998, the Company adopted FASB Statement No. 130, "Reporting
Comprehensive Income." Statement No. 130 requires the reporting of comprehensive
income in addition to net income from operations. Comprehensive income is a more
inclusive financial reporting methodology that includes disclosure of certain
financial information that historically has not been recognized in the
calculation of net income.

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

Currency Unrealized Gain
-------- ---------------
Translation (Loss) on
----------- --------
Adjustments Available-for- Total
----------- -------------- -----
Sale Securities
---------------

Balance at December 31, 1996.......................... $ (78) $ -- $ (78)
Cumulative translation adjustment..................... (1,376) -- (1,376)
-----------------------------------------------
Balance at December 31, 1997.......................... (1,454) -- (1,454)
-----------------------------------------------
Unrealized loss on available-for-sale securities (net
of tax benefit of $281).............................. -- (500) (500)
Cumulative translation adjustment..................... 801 -- 801
-----------------------------------------------
Balance at December 31, 1998.......................... (653) (500) (1,153)
-----------------------------------------------
Unrealized gain on available-for-sale securities (net
of tax provision of $4,141).......................... -- 7,860 7,860
Cumulative translation adjustment..................... (181) -- (181)
-----------------------------------------------
Balance at December 31, 1999.......................... $ (834) $7,360 $ 6,526
-----------------------------------------------

13. Severance Charge

During the fourth quarter of 1999, the Company terminated the employment of
four executive officers within its Materials division and one executive officer
within its Technologies division and recorded a charge of $2.3 million,
reflected in selling, general, and administrative expenses in the Company's 1999
results of operations. As of December 31, 1999, there were no payments charged
against this liability. Payments for this liability will be made in 2000.

F-24

ATMI, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

14. Commitments and Contingencies

On May 15, 1997, LSL settled patent infringement litigation with an
equipment manufacturer, related to equipment used by LSL that was purchased from
another manufacturer. Under the terms of the related settlement agreement, LSL
paid the manufacturer $2.0 million during 1997 and agreed to purchase reactors
from the manufacturer assuming LSL's business conditions justify such purchases.
LSL had purchased a reactor at an approximate fair market value of $2.5 million
during the year ended December 31, 1997.

In December 1998, a former office employee initiated a legal proceeding
against the Company alleging personal injuries to her minor child (then unborn)
allegedly resulting from her exposure to various chemicals while employed by the
Company. The plaintiffs have claimed damages of $25.0 million and unspecified
exemplary damages. The Company has denied the plaintiffs' legal allegations and
is vigorously defending this action. While the Company cannot predict the
outcome of this proceeding at this time, the Company believes it is without
merit.

In the normal course of business, the Company is involved in various
lawsuits and claims. Although the ultimate outcome of any of these legal
proceedings cannot be determined at this time, management, including internal
counsel, does not believe that the outcome of these proceedings, individually or
in the aggregate, will have a material adverse effect on the Company's financial
position or results of operations.

15. Segment and Geographic Data

During 1998, the Company adopted FASB Statement No. 131 "Disclosure About
Segments of an Enterprise and Related Information". The Company has two
segments: ATMI Materials and ATMI Technologies. The reportable segments are
each managed separately because they manufacture and distribute distinct
products with different production processes. The Company evaluates performance
and allocate resources based on operating profit or loss, not including interest
and other income or expense and income taxes. Intercompany sales are not
material among segments or operating divisions. The general corporate assets
primarily include cash and marketable securities, goodwill and other long-lived
assets.

The following tables provide reported results for each of these segments
(in thousands):

For the year ended December 31,
------------------------------
1999 1998 1997
---------------------------------------------

Revenues
- --------
ATMI Materials.......................................... $ 96,711 $ 71,279 $ 83,060
ATMI Technologies....................................... 99,525 93,827 108,952
-----------------------------------------------

Consolidated revenues................................... $196,236 $165,106 $192,012
===============================================

1999 1998 1997
-----------------------------------------------
Operating Income (Loss)
- -----------------------
ATMI Materials.......................................... $ 19,335 $ 11,373 $ 17,757
ATMI Technologies....................................... 5,267 (3,241) 6,765
Merger costs and related expenses....................... (9,914) (1,700) (9,000)
-----------------------------------------------

Consolidated operating income........................... $ 14,688 $ 6,432 $ 15,522
===============================================

F-25

1999 1998 1997
-------------------------------------------

Consolidated Net Income
- -----------------------
Operating income from reportable segments......................... $ 14,688 $ 6,432 $ 15,522
Other profit or (loss)............................................ 3,578 2,915 (539)
Income tax provision.............................................. (7,720) (4,412) (8,588)
-------------------------------------------

Consolidated net income........................................... $ 10,546 $ 4,935 $ 6,395
===========================================

At December 31,
--------------
1999 1998
-----------------------------------
Identifiable Assets
- -------------------
ATMI Materials....................................................... $ 60,717 $ 45,166
ATMI Technologies.................................................... 78,747 73,321
General corporate assets............................................. 93,192 90,165
-----------------------------------

Total consolidated assets............................................ $232,656 $208,652
===================================

The Company's geographic data for the years ended December 31, 1999, 1998
and 1997 are as follows:

United Europe and
In Thousands States Pacific Rim Other Eliminations Total
- ------------------------------------------------------------------------------------------------------------

December 31, 1999
Total revenues $119,716 $54,563 $23,586 $(1,629) $196,236
Long-lived assets $ 56,224 $ 1,589 $ 638 $ - $ 58,451

December 31, 1998
Total revenues $112,445 $34,451 $20,779 $(2,569) $165,106
Long-lived assets $ 60,457 $ 1,373 $ 653 $ - $ 62,483

December 31, 1997
Total revenues $136,453 $42,829 $14,572 $(1,842) $192,012
Long-lived assets $ 54,473 $ 1,734 $ 498 $ - $ 56,705

Revenues are attributed to countries based on the location of the customer.
No one specific country within the Pacific Rim or Europe accounted for greater
than 10% of consolidated revenues in 1999, 1998 and 1997. Revenues and net
income of the foreign subsidiaries is not material to the consolidated
operations of the Company for each of the three years in the period ended
December 31, 1999. The Company utilized one vendor to manufacture and distribute
product that accounted for approximately 14%, 10% and 7% of revenues in 1999,
1998 and 1997, respectively.

F-26

Quarterly Results of Operations (unaudited)
(In Thousands, except per share amounts)

Quarter Year
------------------------------------------------ ----
1999 First Second Third Fourth 1999
- ---- ----- ------ ----- ------ ----

Revenues............................ $37,240 $49,323 $52,055 $57,618 $196,236
Gross profit........................ $18,999 $26,563 $26,973 $30,731 $103,266
Net income (loss)................... $ 1,479 $ (819) (a) $ 6,132 $ 3,754 (b) $ 10,546
Net income (loss) per share--basic.. $ 0.06 $ (0.03) $ 0.23 $ 0.14 $ 0.40
Net income (loss) per
share--assuming dilution.......... $ 0.05 $ (0.03) $ 0.22 $ 0.13 $ 0.37

Quarter Year
------------------------------------------------ ----
1998 First Second Third Fourth 1998
- ---- ----- ------ ----- ------ ----
Revenues............................ $52,047 $44,446 $35,161 $ 33,452 $165,106
Gross profit........................ $28,528 $21,294 $14,907 $ 16,958 $ 81,687
Net income (loss)................... $ 5,747 $ 1,496 $(2,348) (c) $ 40 $ 4,935
Net income (loss) per share--basic.. $ 0.24 $ 0.07 $ (0.09) (c) $ 0.00 $ 0.19
Net income (loss) per
share--assuming dilution.......... $ 0.22 $ 0.05 $ (0.09) (c) $ 0.00 $ 0.18

(a) Includes merger costs and related expenses of $7.2 million incurred in the
ACSI, Delatech, and TeloSense acquisitions.

(b) Includes merger costs and related expenses of $3.3 million incurred in
completing the MST Analytics and NewForm N.V. acquisitions, and a charge of
$2.3 million of severance for five executive officers of the Material and
Technologies segments.

(c) Includes merger costs and related expenses of $1.7 million incurred in
completing the NOW acquisition, and a severance charge of $0.4 million for
severance for employees. The severance was completed by December 31, 1998.

F-27

Schedule II

ATMI, INC.
VALUATION AND QUALIFYING ACCOUNTS
(In Thousands)

Balance at Balance at
---------- ----------
Beginning Charged to End
--------- ---------- ---
Year Ended of Period Cost/Expense Deductions of Period
- ---------- --------- ------------ ---------- ---------
December 31, 1999

Allowance for doubtful accounts...... $ 959 $ 587 $ 180 (a) $1,366
Obsolescence reserve................. 1,861 1,143 1,475 (b) 1,529
Severance accrual.................... 0 2,300 0 2,300

December 31, 1998
Allowance for doubtful accounts...... $1,487 $ 399 $ 927 (a) $ 959
Obsolescence reserve................. 1,737 1,365 1,241 (b) 1,861
Severance accrual.................... 0 402 402 (c) 0

December 31, 1997
Allowance for doubtful accounts...... $ 682 $1,251 $ 446 (a) $1,487
Obsolescence reserve................. 952 1,608 823 (b) 1,737

(a) Reflects write offs of bad debts.
(b) Reflects disposals of obsolete inventory.
(c) Reflects payments made during 1998.

F-28

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.
----------

March 28, 2000

By: /s/ Eugene G. Banucci
----------------------
Eugene G. Banucci, Ph.D.,
President, Chief Executive
Officer, Chairman of the Board
and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

Signature Title Date
- --------- ----- ----
President, Chief Executive
Officer, Chairman of the Board
/s/ Eugene G. Banucci and Director (principal executive officer) 3/28/00
- ------------------------ -------
Eugene G. Banucci, Ph.D.
Vice President, Chief Financial
Officer and Treasurer (principal financial
/s/ Daniel P. Sharkey and accounting officer) 3/28/00
- ------------------------ -------
Daniel P. Sharkey

/s/ Mark A. Adley Director 3/28/00
- ------------------------ -------
Mark A. Adley

/s/ Robert S. Hillas Director 3/28/00
- ------------------------ -------
Robert S. Hillas

/s/ Stephen H. Mahle Director 3/28/00
- ------------------------ -------
Stephen H. Mahle

/s/ Kam Law Director 3/28/00
- ------------------------ -------
Kam Law

/s/ Stephen H. Siegele Director 3/28/00
- ------------------------ -------
Stephen H. Siegele

S-1

Exhibit Index

Exhibit No. Description
- ----------- -----------------------------------------------------------------

2.01 Agreement and Plan of Merger dated as of May 31, 1999 by and
among Advanced Chemical Systems International, Inc., ATMI, Inc.
and Strip Acquisition Corp. (Exhibit 2.1 to Current Report on
Form 8-K/A dated May 31, 1999, File No. 0-30130) (1)

2.02(a) Agreement and Plan of Merger dated as of May 31, 1999 by and
among Delatech Incorporated, ATMI, Inc. and Napa Acquisition
Corp. and certain shareholders of Delatech Incorporated. (Exhibit
2.2 to Current Report on Form 8-K/A dated May 31, 1999, File No.
0-30130) (1)

2.03 Agreement and Plan of Merger dated as of November 29, 1999 by and
among ATMI, Inc., Fog Acquisition Corporation, MST Analytics,
Inc. and the Controlling Stockholders of MST Analytics, Inc. as
identified therein. (Exhibit 2.1 to Current Report on Form 8-K/A
dated November 29, 1999, File No. 0-30130) (1)

3.01(a) Certificate of Incorporation of the Registrant (Exhibit 3.01 to
the ATMI's Registration Statement on Form S-4, filed September
10, 1997, Registration No. 333-35323 (the "1997 Form S-4
Registration Statement")). (1)

3.01(b) Certificate of Amendment to Certificate of Incorporation (Exhibit
4.1(b) to the ATMI's Post-Effective Amendment No. 1 to
Registration Statement on Form S-8, filed October 10, 1997,
Registration No. 33-77060). (1)

3.01(c) Certificate of Amendment to Certificate of Incorporation (Exhibit
3.01(c) to the ATMI's Registration Statement on Form S-4,
Registration No. 333-51333). (1)

3.02 Bylaws of ATMI (Exhibit 3.02 to the 1997 Form S-4 Registration
Statement). (1)

4.01 Specimen of the ATMI's Common Stock Certificate (Exhibit 4.01 to
the 1997 Form S-4 Registration Statement). (1)

E-1

10.01 Employment Agreement between Eugene G. Banucci, Ph.D. and Advanced
Technology Materials, Inc. dated October 10, 1997 (Exhibit 10.01
to ATMI's Registration Statement on Form S-1, Registration No.
333-46609 (the "Form S-1 Registration Statement")). (1)

10.02 Employment Agreement between Daniel P. Sharkey and Advanced
Technology Materials, Inc. dated October 10, 1997 (Exhibit 10.02
to the Form S-1 Registration Statement). (1)

10.03 Agreement of Lease between Melvyn J. Powers and Mary P. Powers
d/b/a/ M&M Realty and Advanced Technology Materials, Inc. dated
December 23, 1994 (Exhibit 10.09to Advanced Technology Materials,
Inc. Annual Report on Form 10-K/A for the year ended December 31,
1994, File No. 0-22756 ("1994 Form 10-K/A")). (1)

10.04(a) Lease Agreement between Montague Oaks Associates Phase III and
ATMI EcoSys Corporation dated February 7, 1995 (Exhibit 10.10 to
1994 Form 10-K/A). (1)

10.04(b) First Amendment to Lease between Montague Oaks Associates Phase
III and ATMI EcoSys Corporation dated September 30, 1997 (Exhibit
10.08(b) to the Form S-1 Registration Statement). (1)

10.05 Lease Agreement between Montague Oaks Associates Phase I & II and
ATMI EcoSys Corporation dated September 30, 1997(Exhibit 10.09 to
the Form S-1 Registration Statement). (1)

21.01 Subsidiaries of ATMI (Exhibit 21.01 to Form S-1 Registration
Statement). (1)

23.01 Consent of Ernst & Young LLP. (2)

23.02 Consent of Deloitte & Touche LLP. (2)

23.03 Consent of Arthur Andersen LLP (2)

23.04 Consent of Rath, Anders, Dr. Wanner and Partner (2)

27.01 Financial data schedule (3)

___________________
(1) Incorporated by reference.
(2) Filed herewith.
(3) Previously filed.

E-2