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. Steve Cantor, Entegris, VP of Corporate Relations . Gideon Argov, Entegris, President & CEO . Greg Graves, Entegris, CFO . Bertrand Loy, Entegris, COO . Brett Hodess, Bank of America, Analyst . Steve Schwartz, First Analysis, Analyst . Janaid Ahmad, Citigroup, Analyst
ENTG reported 4Q08 sales of $112.7m and non-GAAP loss of $15.4m or $0.14 per diluted share.
A. Key Data From Call 1. 4Q08 sales = $112.7m. 2. 4Q08 non-GAAP loss = $15.4m. 3. 4Q08 non-GAAP diluted EPS = $0.14. 4. 4Q08 non-GAAP GM = 35.5%. 5. 4Q08 non-GAAP OpEx (excluding amortization) = $40.1m. 6. Normal annual CapEx spend = roughly $30m. 7. 2008-end cash = $115m.
S1. Business Overview (G.A.) 1. Highlights: 1. Global economic slowdown has contributed to a steep and abrupt downturn in semiconductor and electronics markets. 2. Business has been adversely impacted in 4Q08. 1. Trends have thus far continued through Feb. 3. While Co. has historically experienced cyclical downturns in primarily semiconductor market, has never experienced level and degree of negative factors it is seeing today, virtually, an evaporation of CapEx coincided with historically low fab utilization rates. 2. Strategic Steps: 1. Accelerated steps to fundamentally restructure business, which will eliminate approx. $28m in annual fixed operating costs. 1. Many of these steps were initiated several months ago, well before global economic meltdown in Sept. 2. Steps have included organizational changes, which led to: 1. Elimination of several senior management level positions. 2. 15% approximate reduction in global headcount vs. a year ago. 3. In conjunction with these permanent cost reductions, consolidating manufacturing operations by closing largest manufacturing facility in US, which will provide additional savings when business recovers. 2. In Jan., implemented additional headcount reductions and a series of temporary cost saving measures including: 1. Work furloughs. 2. Global salary reductions. 3. Four-day workweeks. 4. Clampdown on all discretionary expenses. 3. In light of current business trends and near-term market uncertainty, restructured terms and covenants of revolving credit agreement to provide Co. with flexibility to contend with a sustained downturn. 4. While attention and focus is on taking necessary actions in short-term to maximize free cash flow and secure balance sheet, Co. is doing this in a way that balances key market and product development initiatives. 5. Over past qtr., even in difficult times, maintained leading market positions and increased share in some key areas such as 300 millimeter wafer shipping. 3. Contamination Control Business: 1. Achieved key qualifications of new products and sub-systems with OEM and device-maker customers in every area of business that will benefit ENTG when market recovers. 1. Qualifications include 5 and 10 nanometer advanced filtration products for photochemical and wet etch and clean applications, fluid delivery systems, photolithography track and stepper tools and gas purification systems for controlling airborne molecular contamination in critical areas of fab. 4. Microenvironments Business: 1. Sales of 300-millimeter wafer shippers increased more than three-fold in 2008, an indication Co. is taking share in that market. 2. Co. was recently named by a leading wafer grower as their primary vendor for 300-millimeter shippers. 3. In 2008, embarked on a diversification initiative to bring material science-based technologies to markets outside semiconductor industry. 5. Specialty Materials Business: 1. Includes Poco Graphite is addressing numerous growth opportunities for advanced graphite, silicon carbide, specialty coatings and performance polymer products built on proprietary carbon-nanotube technology. 1. Products offer growth in a variety of markets including medical, aerospace and specialty industrial.
S2. 4Q08 Financial Review (G.G.) 1. Current Breakeven …