10-KPeriod: FY2013

ENTEGRIS INC Annual Report, Year Ended Dec 31, 2013

Filed February 20, 2014For Securities:ENTG

Summary

Entegris, Inc. (ENTG) operates as a global developer, manufacturer, and supplier of critical products and materials for the microelectronics and other high-technology industries, with a significant focus on semiconductor manufacturing. The company's diverse portfolio of approximately 17,000 products is designed to maintain purity and integrity of materials used in complex manufacturing processes. These products are categorized as either unit-driven/consumable (accounting for about two-thirds of sales) or capital expense-driven, catering to both ongoing manufacturing needs and capacity expansion. For the fiscal year ending December 31, 2013, Entegris reported net sales of $693.5 million, a slight decrease from the prior year, impacted by continued softness in semiconductor industry spending and foreign currency fluctuations. Despite this, the company demonstrated resilience with stable gross margins and improved net income compared to 2012. Entegris strategically balances its revenue streams, invests significantly in R&D to maintain technological leadership, and leverages its global presence and strong customer relationships to navigate the cyclical nature of its industry. The company is also actively pursuing strategic acquisitions, such as the pending acquisition of ATMI, Inc., to enhance its product offerings and market position.

Financial Statements
Beta

Key Highlights

  • 1Entegris' core business revolves around supplying products and materials crucial for maintaining purity and integrity in semiconductor and other high-technology manufacturing processes.
  • 2The company offers a broad product portfolio, with unit-driven/consumable products representing approximately two-thirds of its net sales, providing a recurring revenue stream.
  • 3In fiscal year 2013, net sales were $693.5 million, showing a slight decrease from 2012, largely due to industry-wide softness in semiconductor spending and unfavorable foreign currency translation effects.
  • 4Despite sales softness, Entegris reported an increase in net income to $74.5 million in 2013, up from $68.8 million in 2012, with diluted earnings per share at $0.53.
  • 5The company maintains a strong financial position with $384.4 million in cash, cash equivalents, and short-term investments as of December 31, 2013, and no outstanding long-term debt.
  • 6Entegris is focused on technological leadership, investing in R&D to support next-generation semiconductor applications and emerging wafer sizes (e.g., 450mm).
  • 7A significant development is the announced acquisition of ATMI, Inc. for approximately $1.2 billion, expected to close in Q2 2014, aimed at expanding its offerings in high-performance materials and delivery systems.

Frequently Asked Questions

Entegris develops, manufactures, and supplies products and materials for purifying, protecting, and transporting critical materials used in semiconductor and other high-technology manufacturing. Their customers include integrated circuit device manufacturers, semiconductor equipment OEMs, gas and chemical manufacturers, and manufacturers of flat panel displays, LEDs, and other advanced technologies. Major customers cited include Micron Technology, Samsung Electronics, Taiwan Semiconductor Manufacturing Co., Applied Materials, ASML, Lam Research, and Tokyo Electron.

Entegris diversifies its revenue stream by balancing sales of unit-driven consumable products (which are more stable and tied to manufacturing activity) with capital expense-driven products (tied to capacity expansion). The company also leverages its global presence and serves multiple high-technology industries to mitigate exposure to any single market's cyclicality.

In 2013, Entegris reported net sales of $693.5 million, a 3% decrease from 2012, primarily due to continued softness in semiconductor industry spending and unfavorable foreign currency translation. Despite lower sales, net income increased to $74.5 million, and the company maintained strong gross margins. Key drivers for the year included softness in leading-edge fabs, restrained capital spending, and a favorable shift in geographic sales mix towards Europe and Asia Pacific, partially offset by declines in North America and Japan.

The pending acquisition of ATMI, Inc. for approximately $1.2 billion is a significant strategic move to expand Entegris' capabilities in high-performance materials, materials packaging, and delivery systems for microelectronics manufacturing. ATMI's business, excluding its Life Sciences segment, generated approximately $361 million in sales for 2013. This acquisition is expected to enhance Entegris' market position and product offerings upon its anticipated closure in the second quarter of 2014.