10-KPeriod: FY2015

ENTEGRIS INC Annual Report, Year Ended Dec 31, 2015

Filed February 29, 2016For Securities:ENTG

Summary

Entegris, Inc. (ENTG) reported strong revenue growth in 2015, reaching $1.08 billion, a 12% increase over the previous year. This growth was significantly boosted by the acquisition of ATMI, Inc. in April 2014. Excluding the ATMI acquisition's contribution, organic sales grew by 3%, driven by increased demand in the semiconductor industry, higher fab utilization, and improved capital spending. The company's strategic focus on yield-enhancing materials and solutions for advanced manufacturing processes in the semiconductor and other high-technology industries appears to be paying off. The company operates through two segments: Critical Materials Handling (CMH) and Electronic Materials (EM). Both segments showed growth, with CMH net sales increasing by 3% and EM net sales rising by 33%, largely due to the ATMI integration. Despite increased R&D spending and higher amortization costs from the acquisition, Entegris demonstrated improved profitability, with net income rising to $80.3 million in 2015, a significant jump from $7.9 million in 2014. The company's financial health appears robust, with ample cash flow from operations.

Financial Highlights

52 data points
Beta

Revenue

$1.08B

43.5% Gross Margin

Net Income

$80.30M

7.4% Net Margin

EPS (Diluted)

$0.57

Total Assets

$1.65B

Cash & Equivalents

$349.82M

Free Cash Flow

$48.94M

Financial Statements
Beta
Revenue$1.08B
Cost of Revenue$610.89M
Gross Profit$470.23M
R&D Expenses$105.90M
SG&A Expenses$198.91M
Operating Income$118.07M
Interest Expense$38.67M
Net Income$80.30M
EPS (Basic)$0.57
EPS (Diluted)$0.57
Shares Outstanding (Basic)140.35M
Shares Outstanding (Diluted)141.12M

Key Highlights

  • 1Revenue increased by 12% to $1.08 billion in 2015, largely driven by the acquisition of ATMI, Inc.
  • 2Organic sales growth was 3%, indicating underlying demand strength in the semiconductor market.
  • 3Net income saw a substantial increase to $80.3 million in 2015 from $7.9 million in 2014.
  • 4The company operates two key segments: Critical Materials Handling (CMH) and Electronic Materials (EM), both contributing to growth.
  • 5R&D expenses increased by 21% to $105.9 million, reflecting investment in new product development for advanced semiconductor applications.
  • 6Gross profit margin improved to 43.5% in 2015 from 39.2% in 2014, excluding certain acquisition-related charges.
  • 7The company maintains a strong balance sheet with $349.8 million in cash and cash equivalents at the end of 2015.

Frequently Asked Questions

The acquisition of ATMI, Inc. in April 2014 was a major driver of Entegris's financial performance in 2015. It contributed significantly to the 12% revenue growth, adding $120.3 million in incremental sales. While the acquisition also increased amortization expenses and necessitated significant integration efforts, it ultimately contributed to higher net income and expanded the company's product portfolio and market reach.

Entegris operates through two main segments: Critical Materials Handling (CMH) and Electronic Materials (EM). In 2015, CMH net sales grew 3% to $671.3 million, while EM net sales saw substantial growth of 33% to $409.8 million. This strong performance in EM was largely due to the inclusion of ATMI's sales, which are primarily unit-driven and fit well within Entegris's product offerings.

Entegris's strategy focuses on being a leading global provider of advanced materials and solutions for high-technology industries, particularly in semiconductors. They aim for technology leadership through continuous product development and collaboration with customers. R&D spending increased by 21% to $105.9 million in 2015, indicating a commitment to developing advanced products for next-generation semiconductor manufacturing processes, such as smaller nanometer devices and new materials, which is crucial for maintaining a competitive edge.

Key risks for Entegris include the cyclical nature of the semiconductor industry, leading to potential demand shifts and unpredictable revenue. Competition is intense, requiring continuous technological innovation. The company also faces risks related to its supply chain, potential product liability claims, intellectual property protection, and the complexities of international operations and foreign currency fluctuations. Additionally, significant debt from the ATMI acquisition presents financial risks.