Summary
Entegris, Inc. (ENTG) reported its second-quarter 2014 financial results, marked by a significant acquisition and a shift to a net loss. The company completed the acquisition of ATMI, Inc. on April 30, 2014, for approximately $1.1 billion, funded through a combination of existing cash and new debt. This acquisition substantially increased total assets, goodwill, and intangible assets. While net sales saw a substantial increase, driven by the inclusion of ATMI's revenue, the company reported a net loss of $14.7 million for the quarter, compared to a net income of $19.8 million in the prior year period. The increased operating expenses, particularly selling, general, and administrative (SG&A) costs, largely due to merger-related expenses and the integration of ATMI, along with a significant increase in interest expense from new debt, contributed to the net loss. Despite the reported net loss, the company's financial statements reflect substantial changes in asset and liability structure due to the acquisition, including a significant increase in long-term debt and goodwill. Investors should monitor the integration progress and the impact of the increased leverage on future financial performance.
Financial Highlights
51 data points| Revenue | $251.58M |
| Cost of Revenue | $162.91M |
| Gross Profit | $88.67M |
| R&D Expenses | $21.58M |
| SG&A Expenses | $82.35M |
| Operating Income | -$23.37M |
| Interest Expense | $12.54M |
| Net Income | -$14.67M |
| EPS (Basic) | $-0.11 |
| EPS (Diluted) | $-0.11 |
| Shares Outstanding (Basic) | 139.24M |
| Shares Outstanding (Diluted) | 139.24M |
Key Highlights
- 1The company completed the acquisition of ATMI, Inc. on April 30, 2014, for approximately $1.1 billion, which significantly impacted the balance sheet with increased assets and liabilities.
- 2For the three months ended June 28, 2014, Entegris reported a net loss of $14.7 million ($0.11 per diluted share), a significant decrease from a net income of $19.8 million ($0.14 per diluted share) in the same period last year.
- 3Net sales for the quarter increased by 42% to $251.6 million, primarily driven by the inclusion of ATMI's sales of $60.2 million.
- 4Gross profit margin decreased to 35.2% from 43.7% in the prior year, largely due to a $24.3 million charge related to the fair value write-up of acquired ATMI inventory sold.
- 5Selling, General, and Administrative (SG&A) expenses more than doubled to $82.3 million, primarily due to ATMI-related expenses, merger costs, and integration activities.
- 6Interest expense increased significantly to $12.5 million from nominal amounts in the prior year, due to new debt incurred to finance the ATMI acquisition.
- 7The company reported $813.1 million in long-term debt, excluding current maturities, as of June 28, 2014, compared to no long-term debt at December 31, 2013.