10-KPeriod: FY2009

ENTEGRIS INC Annual Report, Year Ended Dec 31, 2009

Filed February 26, 2010For Securities:ENTG

Summary

Entegris, Inc. (ENTG) operates as a global developer, manufacturer, and supplier of products and materials crucial for the semiconductor and other high-technology industries, focusing on maintaining purity and integrity of critical materials. The company serves diverse sectors including flat panel displays, high-purity chemicals, solar cells, and biomedical applications. For the fiscal year ended December 31, 2009, Entegris faced significant headwinds due to the severe downturn in the semiconductor industry, resulting in a 28% decrease in net sales compared to 2008. The company reported a net loss of $57.8 million, largely impacted by lower sales volumes, reduced factory utilization, and restructuring charges. Despite these challenges, Entegris maintained its market share and saw a sequential improvement in sales starting from the second quarter of 2009, driven by its unit-driven consumable products. The company's strategy focuses on a comprehensive product offering, diversified revenue streams (balancing unit-driven consumables with capital expense-driven products), technology leadership, strong customer relationships, and a global presence. Entegris is positioned to benefit from the ongoing technological advancements in semiconductor manufacturing, such as shrinking device geometries and the adoption of new materials, which necessitate advanced purity, protection, and transport solutions.

Financial Highlights

34 data points
Beta

Revenue

$398.64M

34.6% Gross Margin

Net Income

-$57.72M

-14.5% Net Margin

EPS (Diluted)

$-0.49

Total Assets

$504.67M

Cash & Equivalents

$68.70M

Free Cash Flow

-$8.97M

Financial Statements
Beta
Revenue$398.64M
Cost of Revenue$260.83M
Gross Profit$137.81M
R&D Expenses$35.04M
SG&A Expenses$117.00M
Operating Income-$48.93M
Interest Expense$9.44M
Net Income-$57.72M
EPS (Basic)$-0.49
EPS (Diluted)$-0.49
Shares Outstanding (Basic)117.32M
Shares Outstanding (Diluted)117.32M

Key Highlights

  • 1Net sales decreased by 28% to $398.6 million in 2009 compared to $554.7 million in 2008, primarily due to the semiconductor industry downturn.
  • 2The company reported a net loss of $57.8 million for 2009, compared to a significant net loss of $517.0 million in 2008, which included a substantial goodwill impairment charge.
  • 3Gross margin declined to 34.6% in 2009 from 38.1% in 2008, impacted by lower sales volumes, reduced factory utilization, and unfavorable product mix.
  • 4The company experienced a sequential sales improvement starting in Q2 2009, indicating a potential recovery from the industry trough experienced in Q1 2009.
  • 5Unit-driven and consumable products represented 70% of net sales in 2009, an increase from 65% in 2008, highlighting a shift towards more stable revenue streams.
  • 6Entegris reported $68.7 million in cash and cash equivalents at December 31, 2009, a decrease from $115.0 million at the end of 2008, reflecting debt reduction efforts and operating conditions.
  • 7The acquisition of Poco Graphite in August 2008 contributed to mitigating the overall sales decline in 2009, although its specialty materials segment also faced below-capacity production costs.

Frequently Asked Questions

Entegris' financial performance in 2009 was primarily driven by the severe downturn in the global semiconductor industry, which began in late 2008. This led to a significant decrease in net sales and, consequently, lower gross profits and a net loss for the year. The company also incurred restructuring charges related to business realignments and responded to industry conditions.

In 2009, there was a notable shift in Entegris' product mix, with unit-driven and consumable products accounting for 70% of net sales, up from 65% in 2008. This indicates a greater reliance on these products, which are consumed during manufacturing processes, compared to capital expense-driven products needed for capacity expansion. This shift was partly a response to lower capital spending by semiconductor manufacturers.

Entegris aims to be a leading provider of solutions for purifying, protecting, and transporting critical materials. Its strategy involves maintaining a comprehensive and diverse product offering, diversifying its revenue stream, focusing on technology leadership, nurturing strong customer relationships, and expanding its global presence. The company seeks to leverage its expertise across semiconductor and other high-technology industries to mitigate the impact of cyclicality in any single market.

Key financial challenges in 2009 included a sharp decline in net sales due to industry-wide conditions, leading to lower gross margins and factory underutilization. The company also faced pressure on its cash position, with a decrease in cash and cash equivalents, and had to manage its debt obligations under a newly amended credit agreement. Significant restructuring charges also impacted profitability.