10-QPeriod: Q3 FY2004

ENTEGRIS INC Quarterly Report for Q3 Ended Nov 27, 2004

Filed January 6, 2005For Securities:ENTG

Summary

Entegris, Inc. reported strong year-over-year growth for the quarter ended November 27, 2004, with net sales increasing by 32% to $90.6 million, primarily driven by a robust performance in the semiconductor market. This growth reflects improved industry and global economic conditions. Despite the significant top-line improvement, net income for the quarter was $5.7 million ($0.08 per diluted share), a substantial increase from $1.6 million ($0.02 per diluted share) in the prior year's comparable quarter. The company also saw a notable increase in operating income, indicating good operational leverage. However, the company cautioned about a sequential decline in sales, down 9% from the previous quarter, signaling a potential softening of demand, particularly in some capital-spending-driven semiconductor product lines. Management anticipates further sequential sales decreases of 8% to 14% for the second quarter of fiscal 2005, citing continued market uncertainty. Despite this cautious outlook, the company's balance sheet remains solid, with substantial cash and short-term investments, and it announced a new $25 million share repurchase program, signaling confidence in its financial position and a commitment to returning value to shareholders.

Key Highlights

  • 1Net sales surged 32% year-over-year to $90.6 million, driven by a 45% increase in the semiconductor market.
  • 2Net income increased significantly to $5.7 million ($0.08/share) from $1.6 million ($0.02/share) in the prior year's quarter.
  • 3Gross profit margin improved to 40.8% from 40.1% year-over-year, though slightly below expectations due to unfavorable product mix and cost absorption issues.
  • 4The company announced a new $25 million share repurchase program, indicating a positive outlook on cash flow and shareholder value.
  • 5While year-over-year performance was strong, sales declined sequentially by 9% from the prior quarter, with a forecast for a further 8-14% decrease in the next quarter.
  • 6The company has a solid liquidity position with $139.4 million in cash, cash equivalents, and short-term investments at quarter-end.
  • 7Entegris' investment in Nortem N.V. (formerly Metron Technology N.V.) is nearing completion of a sale to Applied Materials, Inc., expected to result in a pre-tax gain of approximately $2.8 million in fiscal 2005.

Frequently Asked Questions

The primary driver of Entegris' revenue growth was a significant 45% increase in sales within the semiconductor market, which accounted for 81% of total net sales. This was fueled by improved industry and global economic conditions.

Entegris anticipates sales to decrease by 8% to 14% in the second quarter of fiscal 2005 compared to the first quarter. This forecast is based on a current assessment of activity levels in the semiconductor industry and incoming order rates, which suggest a softening of demand, particularly for some capital-spending-driven product lines.

The company maintains a strong liquidity position with $139.4 million in cash, cash equivalents, and short-term investments. Additionally, Entegris announced a new $25 million share repurchase program, indicating management's confidence in its financial health and its commitment to enhancing shareholder value.

Yes, Entegris' investment in Nortem N.V. (formerly Metron Technology N.V.) is in the process of being sold to Applied Materials, Inc. This transaction is expected to be completed, with Entegris anticipating a pre-tax gain of approximately $2.8 million related to the liquidation of this investment in fiscal year 2005.