Entegris to close plant, layoff 200 following loss

: Entegris to close plant, layoff 200 following loss Dylan McGrath EE Times (11/04/2008 9:59 AM EST) SAN FRANCISO—Fab automation tool specialist Entegris Inc. Tuesday (Nov. 4) said it would close one manufacturing facility and lay off about 200 people after posting a GAAP net loss of $411.4 million for the quarter ended Sept. 27. The net loss was largely due to a write-down of $395.3 million ($379.8 million net of tax) related to impairment of goodwill triggered by the decline in the company's market capitalization, Entegris (Chaska, Minn.) said. Entegris said it would close the larger of its two manufacturing facilities in Chaska next year and transfer production to its other existing facilities. This closure will reduce the company's headcount by about 7 percent result in annual cost and tax savings of approximately $6 to $8 million beginning in 2010, Entegris said. The company expects to incur charges of approximately $15 million related to the facility closure over the next four quarters. Entegris posted sales for the quarter of $145.8 million, down from $151.8 million for the same period of 2007 and $147.9 million from the second quarter this year. The net loss of $411.4 million, or $3.68 per diluted share, compared to net income of $8.4 million (7 cents per diluted share) for the same quarter a year ago and a net income of $4.9 million for the previous quarter. In addition to the facility closure, Entegris said it would take steps to reduce its operating expenses, including the streamlining of its management structure. These actions are expected to yield in excess of $12 million in annual cost savings and have thus far resulted in a restructuring charge of $3.3 million in the third quarter, the company said. "We are using the slowdown in the economy and our industry to optimize our manufacturing operations and to streamline the company," said Gideon Argov, Entegris president and CEO, in a statement. The $395.3 million write-down represents management's best estimate based on the facts and circumstances as of Sept. 27, and may be revised in the fourth quarter, the company said. On a non-GAAP basis, third-quarter net income from continuing operations was $6.2 million, or 6 cents per diluted share, Entegris said. Poco Graphite, which was acquired on Aug. 11, contributed approximately $10 million to sales in the third quarter, Entegris said.