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Entegris to close manufacturing facility

Posted: 06 Nov 2008     Print Version  Bookmark and Share

Keywords:manufacturing facility  lay off  operating expenses 

Fab automation tool specialist Entegris Inc. said it would close one manufacturing facility and lay off about 200 people after posting a GAAP net loss of Rs.2,058.50 crore ($411.4 million) for the quarter ended Sept. 27.

The net loss was largely due to a write-down of Rs.1,977.94 crore ($395.3 million) related to impairment of goodwill triggered by the decline in the company's market capitalisation, Entegris 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 per cent result in annual cost and tax savings of approximately Rs.30.02 crore to Rs.40.03 crore ($6 to $8 million) beginning in 2010, Entegris said. The company expects to incur charges of approximately Rs.75.05 crore ($15 million) related to the facility closure over the next four quarters.

Entegris posted sales for the quarter of Rs.729.53 crore ($145.8 million), down from Rs.759.55 crore ($151.8 million) for the same period of 2007 and Rs.740.04 crore ($147.9 million) from the second quarter this year.

The net loss of Rs.2,058.50 crore ($411.4 million), or Rs.184.13 ($3.68) per diluted share, compared to net income of Rs.42.03 crore ($8.4 million) for the same quarter a year ago and a net income of Rs.24.52 crore ($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 Rs.60.04 crore ($12 million) in annual cost savings and have thus far resulted in a restructuring charge of Rs.16.51 crore ($3.3 million) in the third quarter, the company said.

"We are using the slowdown in the economy and our industry to optimise our manufacturing operations and to streamline the company," said Gideon Argov, Entegris president and CEO, in a statement.

The Rs.1,977.94 crore ($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 Rs.31.02 crore ($6.2 million), Entegris said.

Poco Graphite, which was acquired on Aug. 11, contributed approximately Rs.50.04 crore ($10 million) to sales in the third quarter, Entegris said.

-Dylan McGrath
EE Times

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