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Entegris Reports Third-Quarter Results
Thursday June 17, 7:00 am ET
Year-over-Year Third Quarter Revenue Increases 40 Percent to $99 Million
Earnings Increase From 5 Cents to 12 Cents Per Diluted Share
CHASKA, Minn.--(BUSINESS WIRE)--June 17, 2004--Entegris, Inc. (Nasdaq:ENTG - News), the materials integrity management company, today reported results for its fiscal 2004 third quarter ended May 29, 2004. Sales totaled $98.6 million, a 40 percent increase from the company's fiscal 2003 third-quarter sales of $70.7 million, and up 23 percent from $80.0 million for the second fiscal quarter of 2004. The company reported net income of $9.2 million, or 12 cents per diluted share, compared to net income of $4.0 million, or 5 cents per diluted share, for the fiscal 2003 third quarter. Fiscal 2004 second-quarter net income was $5.0 million, or 7 cents per share. Entegris generated $11.1 million in cash from operations during the fiscal 2004 third quarter.
Increasing sales from the 2004 second quarter to the third quarter and year-ago period were primarily due to stronger-than-anticipated sales to the semiconductor market, both for consumable materials and capital-spending driven product lines.
Gross margin for the fiscal 2004 third quarter was 45.0 percent, versus 43.1 percent for the year-ago comparable period. On a sequential, quarter-over-quarter basis, gross margin improved by 1.5 percentage points from 43.5 percent in the fiscal 2004 second quarter. The company increased production to respond to the higher-than-anticipated increase in customer demand.
Selling, general and administrative expenses for the third quarter totaled $25.5 million, an increase of $2.2 million from the fiscal 2004 second quarter. This increase was principally related to accruals for performance-based commissions and incentives, due to higher sales and profitability levels.
Operating margin for the fiscal 2004 third quarter was 13.7 percent, versus 7.8 percent for the year-ago period. On a sequential basis, Entegris' operating margin improved by 5.5 percentage points from fiscal 2004 second-quarter operating margins of 8.2 percent.
"This was another exciting quarter for Entegris with very robust performance in the semiconductor market," said Jim Dauwalter, Entegris' president and chief executive officer. "Compared to last year's third quarter, Entegris' corporate-wide sales increased by 40 percent this quarter. That's significant and reflects our leadership position in the semiconductor market and our ability to respond to customers' increasing demands. We are participating in this growth with all of our major product lines and, in most cases we believe that Entegris' semiconductor market sales are growing faster than market drivers indicate.
"I'm also proud of how the organization responded to meeting rising demand during the quarter. Our worldwide manufacturing employees have worked hard to inject continuous improvements into the company's manufacturing processes and we believe we will continue to see benefits. Our short-term successes are very important. We are achieving gross margins similar to those during the peak of the last semiconductor cycle in our core markets of semiconductor and data storage, even though our sales are still below historic peak levels. At the same time, we continue to focus on developing Entegris' long-term opportunities. Our diversification into the new markets of Life Sciences and Fuel Cell, and the expansion of our service offering, are important to Entegris' long-term success."
Outlook
"Market conditions in the semiconductor industry remain encouraging," said Dauwalter. "We don't expect any significant change over the next few quarters. For our fiscal fourth quarter, we expect sales to remain at third-quarter levels, with a possible increase of up to five percent. We anticipate operating income to improve if sales increase."
Balance Sheet/Cash Flow Statement Discussion
Cash, cash equivalents and short-term investments at the end of the fiscal 2004 third quarter totaled $120 million. The company generated $11.1 million in cash from operations during the quarter. Short- and long-term debt was $27.7 million. Inventories increased from the 2004 second quarter by $2.6 million to $46.9 million, almost entirely related to work-in-process and raw material inventory as the company expanded production to meet rising customer demand. Inventory turns increased to 4.8 in the third quarter from 4.3 during the 2004 second quarter. Accounts receivable totaled $73.1 million, up $10.1 million from the 2004 second quarter, primarily because of sales acceleration as the quarter progressed.
THIRD-QUARTER RESULTS CONFERENCE CALL DETAILS
Investors have the opportunity to listen to Entegris' third-quarter results today at 8:30 a.m. ET over the Internet at entegris.com. Go to the company's Web site at least 15 minutes early to register, download and install the necessary audio software. |
