10-QPeriod: Q3 FY2001

ENTEGRIS INC Quarterly Report for Q3 Ended Nov 24, 2001

Filed January 8, 2002For Securities:ENTG

Summary

Entegris Inc. (ENTG) reported a significant revenue decline in the first quarter of fiscal year 2002 compared to the prior year, largely attributable to the severe downturn in the semiconductor industry. Net sales fell by 55% year-over-year, impacting gross profit margins, which decreased from 51.2% to 33.1%. The company incurred a net loss of $5.9 million, or $0.08 per diluted share, a stark contrast to the $18.1 million profit in the same period last year. This performance was also affected by nonrecurring charges of $4.0 million related to plant closures and workforce reductions. Despite the challenging revenue environment, Entegris maintained a solid liquidity position with $113.1 million in cash, cash equivalents, and short-term investments. The company also has access to $30 million in unsecured revolving credit facilities. Management anticipates capital expenditures of $25-$30 million for fiscal year 2002, primarily for manufacturing equipment and information systems. While the current business environment remains uncertain, Entegris expects second-quarter sales to be flat compared to the first quarter, indicating a potential stabilization.

Key Highlights

  • 1Net sales decreased by 55% to $45.9 million in Q1 FY2002 compared to $102.6 million in Q1 FY2001, driven by the semiconductor industry downturn.
  • 2Gross profit margin significantly declined to 33.1% from 51.2% year-over-year, due to lower sales volumes and production levels.
  • 3The company reported a net loss of $5.9 million ($0.08 per diluted share) in Q1 FY2002, a reversal from a net income of $18.1 million ($0.25 per diluted share) in Q1 FY2001.
  • 4Nonrecurring charges of $4.0 million were recognized in Q1 FY2002 related to plant closures and workforce reductions.
  • 5Cash, cash equivalents, and short-term investments totaled $113.1 million as of November 24, 2001, providing strong liquidity.
  • 6The company adopted SFAS No. 141 and SFAS No. 142, ceasing goodwill amortization and implementing purchase accounting for business combinations.
  • 7Capital expenditures are projected to be between $25-$30 million for fiscal year 2002.

Frequently Asked Questions

The primary driver for the substantial decrease in revenue and profitability was the severe downturn experienced in the semiconductor industry, which began in the second half of fiscal year 2001. This industry-wide slowdown directly impacted Entegris's product sales across all regions and product lines.

Despite the net loss, Entegris maintained a strong liquidity position. As of November 24, 2001, the company held $113.1 million in cash, cash equivalents, and short-term investments. Additionally, Entegris has access to $30 million in unsecured revolving credit facilities and other lines of credit, which management believes will be sufficient to meet its working capital and investment requirements for the next twelve months.

The adoption of SFAS No. 141 (Business Combinations) and SFAS No. 142 (Goodwill and Other Intangible Assets) means Entegris no longer amortizes goodwill. Instead, goodwill will be tested annually for impairment. This change impacts how business combinations are accounted for, requiring the use of the purchase method and separate recognition of identifiable intangible assets. Goodwill amortization expense, which was $0.2 million in Q1 FY2000, is no longer recognized.

The company expects sales for the second quarter of fiscal year 2002 to be approximately flat compared to the first quarter. While the business environment remains uncertain due to the ongoing semiconductor industry downturn, this outlook suggests a potential stabilization of revenue trends.