Please stand by. We are about to begin. Good day, everyone. And welcome to Entegris’s first quarter 2008 earnings release conference call. Today’s call is being recorded. At this time, for opening remarks and introductions I would like to turn the time over to Mr. Steven Cantor. Please go ahead, sir.

Thank you, and good morning. And thank you all for joining our call. Earlier today we released Entegris’s financial results for our first quarter ended March 29, 2008. You can access a copy of our press release on our website, www.entegris.com. Before we begin, I would like to remind listeners that our comments today will include some forward-looking statements. These statements involve a number of risks and uncertainties, and our actual results may differ materially. These risks and uncertainties are outlined in detail in this morning’s press release and in our most recent 10-K report, as well as in our other reports and filings with the SEC. As always, we encourage you to carefully read those reports and filings. As we indicated last quarter, in this quarterly call we will only be referring to GAAP results in our financial discussion. On the call today are Gideon Argov, President & CEO; Jean-Marc Pandraud, Chief Operating Officer; Greg Graves, Chief Financial Officer; and Peter Walcott, General Counsel. Gideon will now begin the call.

Thanks, Steve. Good morning, everyone. I will make some comments on our business trends and provide an update on a few ongoing initiatives. And Greg will then provide some details on the financials. Our results were well within the range we provided in February. We reported first quarter sales of $148 million, a decline of 8%, from relatively strong fourth quarter. EPS was 1 cent, which included the impact of a charge of about 2 cents per share related to cost-cutting measures we implemented in the first quarter. Capital spending in the semiconductor markets softened, as expected, in the first quarter, which impacted the roughly 80% of our business tied to a broad cross section of semiconductor makers, materials, suppliers, and OEMs. However, our unit-driven business model provided some cushion against the slowdown in industry spending. Our sales mix shifted as 64% of first quarter sales were from unit-driven products up from 61% in the fourth quarter. As for our main product lines, the lower capital spending trends did affect some sales of our contamination control solutions products such as liquid and gas systems. After a strong December quarter, attributable to the shipment of a large retrofit order, sales of our photochemical pumps declined in the first quarter. Given the large installed base of track tools, we are addressing additional retrofit opportunities for our newest pump, the IntelliGen Mini. Sales of liquid filters, which is the largest portion of our contamination control solutions product line, declined 5% from fourth quarter levels which had been boosted by year-end preventative maintenance change-outs. While demand for filtration products tends to be more stable than our equipment-driven and capital-driven products, sales of filters are somewhat affected by lower capital spending since a portion of these sales are tied to the installation of new tools.…

Thank you, Gideon. Good morning, everyone. Sales for the first quarter were 148.2 million, which was down 8% from the fourth quarter and down 7% from a year ago. Q1 sales benefited from the favorable impact of the weaker dollar. Net income in Q1, the first quarter in which we have reported only GAAP results, was 1.1 million or 1 cent per diluted share. I want to point out that these results included a $3.8 million charge for severance or roughly 2 cents per share on an after-tax basis, and 5.1 million or 4 cents per share of amortization expense. In light of market conditions, I believe we executed well during the quarter on a number of fronts. Despite the lower volume, gross margin for the first quarter was 41.5% of sales compared to 41.4% in Q4. ASPs and materials pricing were relatively stable. And we incurred approximately 500,000 in costs related to ongoing manufacturing transfers from the U.S. to Kulim, Malaysia. Total operating expenses of 58.9 million in Q1 included the 3.8 million charge and 5.1 million of amortization I just mentioned. It also included stock-based compensation of 1.9 million or 1 cent per diluted share. The result from a – the charge resulted a reduction of approximately 80 existing and budgeted non-manufacturing positions. Overall, headcount at the end of March was down 6% to 2,500 from 2,650 at year-end. These actions are on top of the cost-saving steps we took to close or transfer three smaller facilities that Gideon referred to. Current steps should yield annualized cost savings of about $12 million. SG&A in Q1 was 43.3 million, which was about even with Q4. ER&D was 10.5 million or 7% of sales, which was about 400,000 than Q4 reflecting our continued investment in new product development initiatives. Interest…

Thank you, sir. (Operator Instructions). And we’ll go first to Christopher Blansett of JP Morgan.

Hi, guys. Thanks. When you think about the cost reduction activities you are doing, how should we model in the gross margin line versus, maybe, the OpEx side?

Chris, when I think about it, approximately $3 million a quarter, 750,000 of that would be in the gross margin line, and the balance would be in the operating line.

Okay. So must of it is going to hit below the line? It’s going to benefit below the line?

Most of it will be below the line.

And then are these manufacturing areas going directly to Malaysia? Or are they potentially be rolled up into other sites around the U.S. to Japan?

The facility that we are closing in San Diego is going a variety of different places. Some portion of it is going to Malaysia. Some portion of it is going to other outsourcers.

Oh, so you are – okay, I see. And then on the other side, when you think about the kind of tone and feedback you are getting from your SemiCap equipment customers, are we still looking at potential mixed improvements toward units for the next – for the second quarter versus the OEM or capital spending side? And, I mean, what is their tone? What are you getting back from them?

Chris, this is Jean-Marc. I think you are hitting the right point here. The current 64, 36%, 64, you need to [inaudible 20:22] 36% capital-driven. If you look at it from a internal standpoint as a proxy for the industry, it is the worst in the whole world. The worst capital, I would say, revenue in the last six quarters. So I do believe that we have hit the bottom from a capital standpoint, at least for our business. And we should see an improvement from a standpoint. Because historically, 64, 36 is meaning a lot but a downturn situation, which we have experienced during the first quarter. So our model is very resistant with a downturn. The fact we have a large proportion of our revenue coming from unit-driven and consumables. But going forward, I believe we should see some better news on the capital side.

One last question. Were there any surprises during the quarter of strengths or weaknesses in any of your particular product lines that you weren’t expecting?

No. Most of the product line related to capital went down. I mean this was true for liquid system, this was true for some FOUPs. And but for the consumable revenue, we saw some good news related to unit-driven products. Liquid lens, however, which is a piece of capital, did well because it is addressing the 45 nanometer and [inaudible 21:43] transition. And we are still doing well in that area, because it interesting that top tier of the demanding applications.

I would add, Chris, that virtually all of the new products that we have coming out are in part or mainly addressing the advanced technology nodes, and particularly 45 nanometer. That is part of the reasons why we see our liquid lens doing well. That is part of the reason we see some of the other products, such as our advanced membrane technology, 20 nanometer Torrento, Claire Light [ph 22:20]. These are, frankly, all linked to advanced technology nodes.

All right. And then quick housekeeping, is that 3.8 restructuring charge pre- or post-tax?

That is pre-tax.

All right. Thank you, guys.

And we’ll take our next question from Brett Hodess of Merrill Lynch.

Good morning. First, when we look at the June quarter guidance right now, the operating expense, as you said, is going to drop about 60 million quarter-to-quarter. Is that correct, Greg?

Yeah. My comment was 6 million quarter-to-quarter in part because we have got that large charge in Q1 related to the restructuring. On a normalized basis, Brett, I mean as I look back at the last five quarters of OpEx, it is what I’ll call – which is what I referred to when I said normalized, we are about 3 million below that. So linking the guidance from – I look at this quarter, and I call it a 3-cent quarter, basically, I would say. We earned a penny; we had a 2-cent charge, so 3 cents. The midpoint of the guidance is 5 cents or 2 cents better, which is about the impact of $3 million in cost savings after tax on a per-share basis.

Got it. Okay. And then so if you look at the gross margin progression, as you make the moves that you have been talking about here, is it – assuming that the mix is about what it has been as we roll forward, when do we – at what point in time do we see the impact in gross margin do you think? Does the ticket start to [inaudible 24:05] orders from manufacturing?

[Inaudible 24:07] emerging picture. I mean we are doing, as you point out, four or five different things. I mean we have got the Kulim migration. We have got some outsourcing. We have got the facilities rationalization. We have got an increased focus on some of our costs around freight, logistics, duties, those areas. But those things combined, I would expect that we would start to see some strengthening in the gross margin in the later half of 2008 as volumes begin to pick up in Kulim, as we begin to wind down our facility in San Diego. And then at the same time, we do have – there are some moderate headwinds in our business. We do – we are impacted some by oil prices, since much of our raw input are resins. We do not – today, through the first quarter, we did not see any significant impact, but we would expect as we renew some contracts, there would be some modest impact there.

Okay. And then the other question I had was how much – do you have a feel of breakout for the semiconductor split versus the other microelectronics areas? You mentioned that you are going after some new microelectronics areas beyond data storage and semi. And could you – is that like flat-panel display? And can you give us some color on how some of those new areas are shaping up?

Yes, Brian, this is Jean-Marc. Our business is about 80% in the semi business and about 20%, also, including flat-panel display. And, yes, this is true that a decrease in the non-semi business was a little bit less in the first quarter than it was in the semi business. The semi business has been mostly driven by bad news on the capital side. Capital was down 14%, and the unit-driven was only down by 4% in the first quarter. So we do expand in some ancillary businesses with most of our revenue coming from filter revenue in the consumer electronic business.

Very good. Thank you.

And we’ll go next to Jim Covello with Goldman Sachs.

Good morning, guys. Thanks so much. Two quick questions. Within the unit-driven businesses, can you remind us of the breakdown between logic memory and foundry exposure?

We are heavily exposed to logic. And I wouldn’t break that down on a precise percentage. It tends to vary quarter by quarter. But we tell – we tend to sell, as you know, to a very broad section of, frankly, everybody in the business, all IDMs, so certainly the majority of our business is in the logic area, but we have a fair amount of exposure, as you would expect, also to the foundries, where some of our largest customers. And we also have some exposure to memory. So we tend to be a good proxy, in that sense, I guess, for what happens in the world of IDMs and foundries. Jean-Marc?

Yes. I would agree. And if you look at the business a little bit different way by segmenting the FABs versus the OEM on the growers, we have seen a negative impact in the first quarter from the FAB mainly and the logic memory. Memory, it was really not good, but logic was also down, in fact, more than the, I would say, grower business or even the equipment business. And this is [inaudible 27:65] in the first quarter, in fact. I do expect, also, the capitalization, which was in the 80% - 80 to 85% maximum in the first quarter was at the lowest point. And according to the market that I will have, this capitalization should increase during this coming quarter and the rest of the year. So we hit, really, a low point for the capitalization in the first quarter of 2008.

Jim, this is Steve Cantor. I just want to add to that, that our liquid filtration products are most leveraged to the complexity of the process and device. So the more metal layers there are in the device, you tend to use more liquid filters. So that, at least in terms of exposure, gives us more exposure to the foundries and the logic makers.

Okay. And then just one follow-up then, within the unit-driven businesses, are you comfortable with your share situation and the overall share situation in the market, especially in Asia?

Yes, I would say that we are traditionally to enjoy, and we continue to enjoy, a very good position in filtration business. I mean we have a launch of a product like Torrento 20 nanometer. And we have next generation coming in play as well. Traditionally, it is just as we presented and Japan included as well, where 80% of revenue is coming from Asia and Japan [inaudible 29:28] area where we have a solid market share position here. And the customer intimacy, working at a doorstep of our customers, makes us secure, some very solid revenue from a situation standpoint.

I would add to that, we obviously review that on a very careful basis, literally, product by product and customer by customer. And that share is driven by a number of factors. But the most important one is being able to work with the customers on their technology roadmap, which we do, I think, fairly well, because a lot of that demand is coming from the IDM. We tend to work with them very closely. And I think that helps us keep that share over time.

Great. Well, thank you so much. I appreciate it.

(Operator Instructions). We’ll go next to Timothy Arcuri with Citi.

Hi, guys. Can you break out the $3.8 million charge between R&D, SG&A, and also costs?

Of the $3.8 million, it all goes through the operate – SG&A on the P&L. In terms of where did we reduce headcount? It was predominantly in the operating expense line and to a lesser extent in the cost-to-sales line.

Okay. So just so I am clear, so that $3.8 million charge is pre-tax? And that was all in the SG&A line?

Correct.

Okay. Secondly, Gideon, you had said last call, when I had asked you about new products, you had said that you thought that the new product revenue this year would be between 25 and $50 million. And I am wondering, did you get any revenue this quarter from those new products? Or is that all left on the come [ph 31:27] later on this year?

No. I’ll let Jean-Marc talk in a second. But the – I mean the short answer to your question is I – let us just say that if the number you took away was 25 million, that is a low number, because we expect that number to be higher than 25 million. And, I mean, I am sitting here looking at a sheet, which is pretty detailed, Tim. And so we have revenues from these new products. And we feel pretty good about the trajectory. First of all, on a specific basis, we did highlight in the call that the FOSB product, we are actually on track to do what we said we were going to do with that product. Actually, our – the number of qualifications we have there is ahead of schedule, I would say, frankly. But the same holds true in a number of other new products. And let me ask Jean-Marc to comment on those. The number is higher than 25, Tim. Go ahead, Jean-Marc.

Yes. This is correct. Twenty-five, we probably our number, but we consider fourth quarter, Tim. And so we are ramping nicely. I mean, I am never happy with the revenue coming from new products. I would like to have a higher speed there. But the recession hits us a little bit there. But we are doing in these new products. I mean we mentioned liquid lens. We mentioned the FOSB. We are also catching up in both revenue [inaudible 32:49] Spectra business right now. And I do expect that by the end of the year I will be on target for the new products impact. That should be expressed in several percent of a top line from a total contributions standpoint.

Okay. I guess I am wondering, just from a specific timing perspective, whether there was any – I am just looking at ’07 revenue, and I am taking what I think what will happen to the consumables business, what I think will happen to the capital business. And I am just trying to tack on top of that new product revenue that largely will not cannibalize current revenue. And so I am wondering how much of that defined 25 to $50 million number has been recognized so far as revenue this year, or if it’s all on the come during the back half of the year. Because if it is, that suggests that there should be a reasonably nice whip in revenue in coming Q3 and Q4.

This is correct. And if you would – I am probably, today, I am not 25% of my expected revenue for the year, because quarters are not that linear and we have a ramp. But I am only lacking a couple of percent versus with the trend line, if you want.

Another way to think about it, Tim, is – and you know this very well. When the industry is at a relatively low period, it is the best time, obviously, to get qualified on a new platform or to get qualified on a new node, even though you don’t see the revenue until a capacity ramps. Because until that happens, obviously, customers are not in a position where they actually are going to implement much of that, because they have the capacity they need. Now that’s particularly true, as we all know, on the memory side today, but is true more generally, so having qualified and being qualified on a number of these new products will translate particularly well to new revenues when we have some tailwind in terms of the market. That is correct.

Okay. And I guess just last thing for me. Jean-Marc, even if I take your equipment revenue, and I assume that it is flat, even, in June, which it is probably down a smidge, but let us just say it is flat. You take industry wafer starts, which sound like they are down quite a bit in Q2, your revenue per wafer start in the consumables business actually is up quite a bit in Q2 as it was up quite a bit in Q1. So I am wondering, is there some – because it seems like your revenue per wafer kept on going down through most of ’06 and ’07. And there has been some reversal lately. And I am wondering, is that due to a particular product ramp? Or is there some kind of secular – is 45 nanometer now kind of catching hold such that there is leverage again to your revenue per wafer number?

This is correct. I mean, first, we don’t have a kind of systematic link to – in terms of revenue, per wafer is not as mechanic as we would like to think. But you are right. The product we launched nine months ago, [inaudible 36:06] last year, the Torrento, taking higher speed. And we had better news, in fact, in the last quarters coming from those filter-based revenue. And we are starting to get the benefit of that. Your comment on the equipment business as well is interesting. Because some of the equipment we sell, especially in the immersion lithography applications, are in fact downsell [ph 36:29] resistant, because we are still shipping new scanners. I mean, we are not shipping, but our customers – our OEM customers are shipping new scanners. And they do need some immersion lithography systems to go along with, so we benefit from that. In addition to that, the initiative that we are looking at in Asia on the [inaudible 36:51] electronics are purely incremental. Those business, we are not looking at them one year ago, and now we are generating some internal revenue. We have dedicated salespeople organized around those new markets. And we are thinking of the [inaudible 37:03] right now.

Okay. Thanks guys.

And we have no further questions at this time. Mr. Argov, I will turn the call back over to you for any additional or closing remarks.

Okay. Thank you very much for participating in our call. We look forward to updating you in the future.

And that does conclude today’s conference call. Thank you for your participation. And you may disconnect at this time.