Entegris Reports Fourth-Quarter Results and Record Sales Levels for Fiscal 2004; Announces Share Repurchase Program

Business Wire, Sept 30, 2004

CHASKA, Minn. -- Entegris, Inc. (Nasdaq:ENTG), the materials integrity management company, today reported results for its fiscal 2004 fourth quarter and year ended August 28, 2004. The company also announced that its board of directors has authorized a share repurchase program for up to $25 million of the company's outstanding common stock.

For fiscal 2004, Entegris reported record sales of $346.8 million, up 38 percent from fiscal 2003 sales of $251.1 million. Net income for the year was $24.8 million, or 32 cents per diluted share, compared with $1.3 million, or 2 cents per share, in fiscal 2003. This marks Entegris' 38th consecutive year of annual profitability. Also, the company ended the year with a record $133 million in cash and short-term investments, achieved by generating $48 million in cash from operations in fiscal 2004.

For the fiscal 2004 fourth quarter, Entegris reported sales of $99.5 million, up from $71.5 million in the fiscal 2003 fourth quarter and $98.6 million in the fiscal 2004 third quarter. Fourth-quarter 2004 net income was $8.9 million, or 12 cents per share, versus $2.3 million, or 3 cents per share, in the prior-year period and $9.2 million, or 12 cents per share, in the 2004 third quarter. Entegris generated $21 million in cash from operations during the fiscal 2004 fourth quarter.

Gross margin for the fiscal 2004 fourth quarter was 44.4 percent, versus 33.3 percent for the comparable year-ago period and 45.0 percent in the 2004 third quarter. Gross margin for the year was 43.5 percent compared to 39.3 percent in fiscal 2003.

Operating margin for the fiscal 2004 fourth quarter was 12.6 percent, versus an operating loss of 2.9 percent for the year-ago period and operating margin of 13.7 percent in the 2004 third quarter. For the year, the company reported an operating margin of 10.0 percent compared to an operating loss of 0.4 percent in fiscal 2003.

"As widely reported, market conditions in the semiconductor industry became more tenuous during the latter part of the fiscal 2004 fourth quarter," said Jim Dauwalter, Entegris' president and chief executive officer. "Even with the softening of market conditions, we reported fourth-quarter sales within our guidance range. Sales in our semiconductor market were sequentially flat with the third quarter. Our materials-consumption-driven product sales increased in the low single-digit percentage range. Wafer carrier products declined somewhat, offset by strong demand for our fluid handling solutions. Product mix across Entegris' multiple markets resulted in slightly lower operating margins in the 2004 fourth quarter compared to the 2004 third quarter.

"Fiscal 2004 was a very successful year for Entegris. We achieved many of our financial goals and strengthened the company's competitive position in our traditional markets while expanding our reach into adjacent materials integrity management markets," said Dauwalter.

"Leveraging our materials integrity management expertise into new but related areas will drive our future growth. In fiscal 2005 we will remain focused on further penetrating and improving the financial performance of our new markets, successfully managing our current and new product offerings, and increasing our operating efficiencies."

Share Repurchase Program

Entegris' board of directors has authorized a $25 million share repurchase program. Repurchases will be funded from the company's cash balance. Management believes this is a prudent use of cash. Under the program, shares may be bought at management's discretion from time to time, depending on market conditions, in open market transactions. The program may be suspended or terminated at Entegris' discretion. At present, the company has approximately 76.3 million shares of common stock outstanding and an aggregate market capitalization of approximately $600 million.

Outlook

"Currently semiconductor fab utilization rates remain high," Dauwalter said, "Consistent with general conditions in the semiconductor industry, we anticipate sales for our materials-consumption-driven products to remain relatively stable in the first quarter of fiscal 2005. Many OEM and sub-component suppliers to the semiconductor industry have recently announced weakness in the market, a trend confirmed by our customers. Therefore, we believe fiscal 2005 first quarter capital-spending will decline, particularly related to 200mm or smaller wafer size fabs. We expect sales for our other markets of data storage, life sciences, global services and fuel cell to be flat to slightly up, hinging on broad economic conditions. Based on current market conditions, we anticipate total Entegris sales to decline about 10 to 15 percent from the $99.4 million reported in the fiscal 2004 fourth quarter. Depending on sales levels and product mix, we expect operating margins of 8 to 10 percent and earnings per share of 6 to 8 cents.

"We remain confident in our ability to strengthen Entegris' market position in our traditional and new markets in fiscal 2005," concluded Dauwalter.