10-QPeriod: Q3 FY2002

ENTEGRIS INC Quarterly Report for Q3 Ended Nov 30, 2002

Filed January 14, 2003For Securities:ENTG

Summary

Entegris, Inc. reported a net loss of $5.64 million for the three months ended November 30, 2002, a slight improvement from the $5.92 million net loss in the same period last year. Despite the continued net loss, net sales increased by 17% year-over-year to $53.72 million, driven primarily by a strong rebound in the semiconductor market. The company also saw a significant improvement in gross margin, which rose to 40.7% from 33.1% in the prior year, attributed to higher sales volumes and successful cost reduction initiatives. However, the company recognized a substantial impairment charge of $4.5 million related to its investment in Metron Technology N.V., impacting overall profitability. Operationally, Entegris is managing its resources by generating positive cash flow from operations ($6.38 million) and maintaining a solid liquidity position with $120.8 million in cash, cash equivalents, and short-term investments. The company anticipates capital expenditures of approximately $25 million for fiscal year 2003, primarily for manufacturing equipment and information systems. Management believes its current resources and credit facilities are sufficient for the next 12 months, but acknowledges the potential need for future financing for growth initiatives.

Key Highlights

  • 1Net sales increased 17% year-over-year to $53.72 million for the quarter ended November 30, 2002.
  • 2Gross profit margin improved significantly to 40.7% from 33.1% in the prior year's quarter.
  • 3The company recorded a $4.5 million impairment loss on its investment in Metron Technology N.V.
  • 4Operating loss improved to $2.93 million from $10.48 million in the prior year's quarter.
  • 5Cash flow from operating activities was positive at $6.38 million.
  • 6Entegris plans capital expenditures of approximately $25 million for fiscal year 2003.
  • 7Total assets decreased slightly to $385.79 million from $390.26 million.

Frequently Asked Questions

The increase in net sales was primarily driven by a rebound in the semiconductor market, which accounted for 79% of the company's sales and saw a 27% increase year-over-year. Sales in wafer shippers, test/assembly/packaging products, and microenvironments showed the largest improvements.

Entegris recorded a $4.5 million impairment loss due to an other-than-temporary decline in the fair value of its investment in Metron Technology N.V. This charge significantly impacted the 'Other expense (income), net' line item and contributed to the overall net loss for the quarter. The carrying value of the investment was reduced to $3.1 million.

The company generated $6.38 million in cash flow from operations. As of November 30, 2002, Entegris had $120.8 million in cash, cash equivalents, and short-term investments, along with available credit facilities totaling approximately $33 million ($20 million revolving credit and $13 million in international lines). Management believes these resources are sufficient for the next 12 months.

Entegris expects capital expenditures of approximately $25 million for fiscal year 2003. These expenditures are primarily planned for manufacturing equipment, tooling, and information systems.