10-QPeriod: Q1 FY2013

ENTEGRIS INC Quarterly Report for Q1 Ended Mar 30, 2013

Filed April 26, 2013For Securities:ENTG

Summary

Entegris, Inc. (ENTG) reported a year-over-year decrease in net sales for the first quarter of 2013, reaching $165.1 million compared to $175.4 million in the prior year period. This decline was primarily attributed to continued softness in semiconductor industry capital spending, despite some pockets of strength. The company experienced a lower gross profit margin of 40.7% compared to 43.5% in the prior year, impacted by the sales decrease and a less favorable sales mix. Net income for the quarter was $16.4 million, or $0.12 per diluted share, down from $17.9 million, or $0.13 per diluted share, in the same period last year. The company's operating segments showed mixed performance, with Contamination Control Solutions (CCS) experiencing a sales decline, while Microenvironments (ME) saw an increase. Specialty Materials (SMD) faced a sales decrease. Entegris maintained a strong liquidity position with $338.8 million in cash and cash equivalents and no outstanding debt. The company also completed a strategic acquisition of Jetalon Solutions, Inc. on April 1, 2013, to expand its fluid metrology product offerings.

Financial Highlights

42 data points
Beta

Revenue

$165.07M

40.7% Gross Margin

Net Income

$16.40M

9.9% Net Margin

EPS (Diluted)

$0.12

Total Assets

$805.85M

Cash & Equivalents

$338.85M

Free Cash Flow

-$8.71M

Financial Statements
Beta
Revenue$165.07M
Cost of Revenue$97.94M
Gross Profit$67.13M
R&D Expenses$12.17M
SG&A Expenses$32.42M
Operating Income$20.25M
Net Income$16.40M
EPS (Basic)$0.12
EPS (Diluted)$0.12
Shares Outstanding (Basic)139.03M
Shares Outstanding (Diluted)139.83M

Key Highlights

  • 1Net sales decreased by 6% year-over-year to $165.1 million for the three months ended March 30, 2013, primarily due to weakness in semiconductor capital spending.
  • 2Gross profit margin declined to 40.7% from 43.5% in the prior year, driven by lower sales and a less favorable product mix.
  • 3Net income for the quarter was $16.4 million ($0.12 per diluted share), a decrease from $17.9 million ($0.13 per diluted share) in the prior year period.
  • 4The Contamination Control Solutions (CCS) segment saw a 10% decrease in net sales, while Microenvironments (ME) increased sales by 8%.
  • 5Specialty Materials (SMD) segment net sales decreased by 11% year-over-year.
  • 6The company ended the quarter with $338.8 million in cash and cash equivalents and no outstanding debt, indicating a strong liquidity position.
  • 7Entegris acquired Jetalon Solutions, Inc. on April 1, 2013, for $13.4 million in cash plus contingent consideration, expanding its product portfolio in fluid metrology.

Frequently Asked Questions

The primary driver for the decrease in net sales was continued softness in semiconductor industry capital spending. While there were some areas of strength, weak demand and production levels in legacy fabs and for PC-related devices negatively impacted overall sales.

Performance was mixed across segments. Contamination Control Solutions (CCS) experienced a 10% decrease in net sales. Microenvironments (ME) saw an 8% increase in net sales, driven by higher sales of shipper and 300mm wafer process products. Specialty Materials (SMD) reported an 11% decrease in net sales, mainly due to lower demand for its high-margin specialty-coated products.

Entegris maintained a strong liquidity position with $338.8 million in cash and cash equivalents. Importantly, the company had no outstanding short-term or long-term debt as of March 30, 2013.

On April 1, 2013, Entegris acquired Jetalon Solutions, Inc., a California-based supplier of fluid metrology products. The acquisition involved $13.4 million in cash at closing and contingent consideration based on Jetalon's future performance. This acquisition is expected to expand Entegris's offerings in critical materials for the semiconductor industry.