Entegris Reports Preliminary Fourth-Quarter 2003 Results
Thursday September 18, 4:06 pm ET
Sales to be on Target, Earnings of Two to Three Cents
CHASKA, Minn.--(BUSINESS WIRE)--Sept. 18, 2003--Entegris, Inc. (Nasdaq:ENTG - News), a leader in materials integrity management, today announced that it expects to report sales for the fourth fiscal quarter ended August 30, 2003 of approximately $71 million and per-share earnings of 2 to 3 cents. Sales met the Company's expectations, while earnings were lower than anticipated. The company expects to report full financial results on October 2, 2003, before 8:00 a.m. (EST).
"During the fourth quarter, we once again made progress in growing sales sequentially from third quarter 2003 in our new markets of services, life sciences and fuel cells," said Jim Dauwalter, Entegris' president and chief executive officer. "Semiconductor market sales increased slightly from the third quarter, while sales in our data storage market declined as anticipated. Increasing sales in our new markets is vital to our goal of expanding our materials integrity management leadership outside of the semiconductor and data storage markets. However, we are still in the investment stage in these new markets and are not currently generating margins comparable to our traditional markets."
Entegris said that lower than anticipated fourth-quarter earnings are primarily due to decreased gross profit margins, which are in the 33 to 35 percent range. The main factors in the margin decline are aggressive efforts to reduce inventory while establishing tighter inventory controls and build-to-order manufacturing processes. Other factors are higher than anticipated costs incurred due to the relocation of two small manufacturing facilities and increased resource requirements to meet customer expectations related to the recently acquired reticle carrier product line. Although to a lesser degree, product mix also impacted gross margins.
"Our efforts during the fourth quarter focused on generating sales, growing our new markets, maintaining our market leadership position in our traditional markets, operational efficiencies and aggressive asset management," said Dauwalter. "We successfully reduced inventory by about $7 million or more than 15 percent from the third quarter. While this hurts the fourth quarters' margin performance, it frees up cash." Dauwalter continued, "We are in the enviable position as a leader in materials integrity management in the markets we serve. In many product categories we are the number one supplier as is the case in the reticle carrier product line. With this leadership position comes the responsibility to adjust resources to meet the service level expectations of our customers, even when we are integrating acquired products. Entegris employees worked hard and achieved these objectives. While this quarter's financial performance was negatively affected, the long-term outlook for Entegris continues to improve," said Dauwalter.
Entegris expects to report an operating loss in the 2 to 3 percent range for the fourth quarter 2003. However, due to favorable tax benefits and other income, the company anticipates reporting a net profit of 2 to 3 cents per diluted share.
Outlook
"While we see positive indicators such as quote activity increasing, we are cautious about the actual placement of orders by our customers during the next quarter. Therefore, we expect first quarter 2004 sales to be slightly down from fourth quarter 2003 sales. We anticipate gross margins to be in the 40 percent range in the first quarter 2004, depending on sales mix," said Dauwalter. "We are excited about our materials integrity management leadership position in the microelectronics industry, our opportunities in new markets and the progress we've made in operational efficiencies. As industry conditions improve, we see great opportunity to leverage our infrastructure and to continue to expand our materials integrity management opportunities," concluded Dauwalter. |
