Entegris Inc. Reports Operating Results (10-Q)

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May 07, 2009
Entegris Inc. (ENTG, Financial) filed Quarterly Report for the period ended 2009-03-28.

Entegris is a leading provider of materials management solutions to themicroelectronics industry including in particular the semiconductormanufacturing and disk manufacturing markets. The company's materials management solutions for the semiconductor industry assure the integrity of materials as they are handled stored processed and transported throughout the semiconductor manufacturing process. These solutions enable customers to protect their investment in work-in-process and finished devices. Entegris Inc. has a market cap of $235.9 million; its shares were traded at around $2.08 with and P/S ratio of 0.4. Entegris Inc. had an annual average earning growth of 111.8% over the past 5 years.

Highlight of Business Operations:

For the three months ended March 28, 2009 (2009), net sales decreased by $89.2 million, or 60%, to $59.0 million compared to the three months ended March 29, 2008 (2008), primarily reflecting the severe downturn in both the capital and unit-driven segments of the semiconductor industry that began during the second half of 2008. The sales decline included an unfavorable foreign currency translation effect of $2.3 million related to the year-over-year weakening of most international currencies versus the U.S. dollar. The first quarter sales decline was mitigated by the inclusion of sales of $9.2 million from POCO, which was acquired in August 2008.

During the three months ended March 28, 2009, the Companys operation activities used cash flow of $9.5 million. Cash and cash equivalents were approximately $95.5 million at March 28, 2009 compared with $115.0 million at December 31, 2008. On March 2, 2009, the Company amended and restated its credit facility, replacing the Companys previous $230 million revolving credit facility with a new $150 million revolving credit facility maturing November 1, 2011 (Also see Note 7 to the Companys condensed consolidated financial statements).

realization of its assets have become unfavorable. The Company had U.S. net deferred tax asset positions of $49.8 million and $42.3 million as of March 28, 2009 and December 31, 2008, respectively, which were composed of temporary differences and various credit carryforwards. Management has concluded that it is not more likely than not that the Company will realize the net deferred tax assets. Accordingly, the Company maintained valuation allowances of $49.6 million and $42.1 million as of March 28, 2009 and December 31, 2008, respectively, with respect to U.S. deferred tax assets.

The Company had net non-U.S. deferred tax asset positions before valuation allowance of $16.8 million and $12.5 million as of March 28, 2009 and December 31, 2008, respectively. At those dates, management determined that based upon the available evidence, a valuation allowance was required against non-U.S. deferred tax assets in certain tax jurisdictions. Accordingly, the Company maintained valuation allowances of $0.9 million and $0.6 million as of March 28, 2009 and December 31, 2008, respectively, with respect to certain non-U.S. deferred tax assets. For other non-U.S. jurisdictions, principally Japan, management believes that it is more likely than not that the net deferred tax assets will be realized as management expects sufficient future earnings in those jurisdictions.

The year-over-year decrease in SG&A costs includes compensation-related reductions of $9.6 million, travel expense of $0.9 million and professional fees expense of $0.7 million, along with a foreign currency translation effect of $0.5 million. SG&A expenses in the first quarter of 2008 included $3.8 million of severance-related costs associated with personnel terminations associated with operational streamlining efforts.

Net loss The Company recorded a net loss of $37.7 million, or $0.34 per diluted share, in the three-month period ended March 28, 2009 compared to net income of $2.9 million, or $0.02 per diluted share, in the three-month period ended March 29, 2008. The net loss from continuing operations for the three-month period were $37.7 million, or $0.34 per diluted share, compared to net income of $3.2 million, or $0.03 per diluted share, in the year ago period.

Read the The complete ReportENTG is in the portfolios of Arnold Schneider of Schneider Capital Management, Robert Olstein of Olstein Financial Alert Fund, PRIMECAP Management.