Good day everyone, and welcome to the Entegris First Quarter Earnings Release Conference Call. Today’s call is being recorded. At this time, for opening remarks and introductions, I’d like to turn the call over to Mr. Steve Cantor, Vice President of Corporate Relations. Mr. Cantor, please go ahead sir.

Good morning everyone and thank you for joining our call. Earlier today, we announced the financial results for our first quarter ended March 29, 2014. You can access a copy of our press release on our website, 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, which are outlined in detail in our reports and filings with the SEC. On this call, we will refer to non-GAAP financial measures as defined by the SEC in Regulation G. You can find the reconciliation table in today’s press release as well as on our website. In addition, I want to remind everyone that, we will be holding an Analyst Meeting on June 19th at our i2M Center for advanced membrane and codings manufacturing Massachusetts. You can contact me for more information and to register. On the call today are Bertrand Loy, President and CEO; and Greg Graves, Chief Financial Officer, and Bertrand will now begin the call.

Thank you, Steve. I will make some comments on the quarter’s results, and then Greg will provide detail on our financials and on our guidance for Q2. Our first quarter was in line with our expectations. Our revenue of $166 million was at the low end of our guidance. I’m pleased with our operating results for the quarter as we continue to maintain good operating and financial discipline. We executed well improving our gross margin, achieving our target margin and generating cash from operating consistent with our plans. For the past nine months, the industry environment have been mixed with pockets of strengthen in some segments offset by softer trend scenarios. The original revenue guidance for Q1 assumed a continuation of this mixed picture combined with a seasonally slower retrospect environment. Our customer demand through the quarter was consistent with this view, strength at some foundries contrasted with more muted production from most other industry participants. This was reflected in our unit-driven sales, which, in aggregate, were down 9% after a strong 19% growth in the fourth quarter. We also saw these uneven trends on the capital side of our business. Our CapEx-driven sales were down 14% sequentially as we experienced softening in demand from OEMs and facility projects. Sales to adjacent markets declined 6% as continued softness in display and data storage overshadowed some signs of life in LED and solar after several quarters of dormancy. Reflecting these trends, our mix for the quarter was 66% unit-driven and 34% capital-driven, shifting slightly to the unit side from Q4. Looking at our strategic initiatives and I am pleased with ongoing progress across a number of product platforms, including next generation liquid filters, new ramps and our advanced groups. These new products although result of our effort to deepen the collaborations…

Thank you, Bertrand. Good morning and thank you all for joining the call. Despite the lower sales in Q1, we executed well and achieved our target model. By region, sales to Asia, our largest region were down 10%. The higher sales in Taiwan were offset by lower sales in Korea. Sales to Japan were down 22%, North America declined 13%, while sales to European increased 3%. By division, sales for the Contamination Control division declined 15% sequentially to $105 million. The decline reflects weakness in component sales to OEMs and a slowdown in sales of advanced filtration products because a number of customers slowed their ramp at advanced nodes. Operating margins for the CCS division were 23.2% versus 24.6% in Q4. The decline in operating margin was a result of sustained investment in the R&D in spite of lower sales volume. Sales for the Microenvironment division decreased 6% sequentially to $43 million. ME’s operating margin of 18.3% was essentially flat with the 18.4% in Q4. Specialty Material sales were $17.7 million or up slightly. SMB’s operating margin improved to 10.8% from 5.7% in the fourth quarter. Excluding the one-time cost associated with the move of the codings operations, the i2M facility SMB’s operating margin would have been 13.5%. It’s best quarterly performance in the last two years. Gross margin improved to 43% from 42.6% as the impact the impact of lower volume was offset by favorable mix. Operating expenses for Q1 amounted to $50.5 million, down $2.9 million from Q4. This included $1.3 million of cost associated with the ATMI transaction. SG&A as a percentage of sales was 21% and R&D was 9.5%, reflecting our sustained investments in filtration and wafer handling products for the advanced nodes. Our GAAP tax rate was 23% in Q1. This is slightly lower than…

Thank you sir. (Operator Instructions). And for our first question we go to Vern Essi with Needham & Company.

Thank you very much. I was wondering if Bertrand if you could go over the CCS business and how you see that progressing through 2014 obviously in a little bit of slump here. Is there any optimism out there on new spend in the area or do you sort of this being in somewhat of the flattish trend line?

Hello, Vern. This is Bertrand. Yes, I am going to try to breakdown my answer in different pieces here. But, just maybe reflecting a little bit on some of the trends that we experienced in our CCS business in Q1, we saw certainly some slow wafer starts in Q1, which is early November and the seasonal trend that we were expecting and that we’ve reflected in our guidance for the quarter. But then, we also saw a slowing down in the quarter for new facility projects and new tool built and that negatively impacted our component and sub-system sales. So as we fast forward into Q2, I’d say that, we would expect an improvement in terms of wafer starts. Yet we’ve remained relatively cautious in terms of new OEM built plans and we have some, I would say, limited expectations in terms of short-term recovery for a component and sub-system business. I would limit my forecast to Q2, given the lack of forward visibility that we have at this point in time.

Okay. Fair enough and thanks for the answer there. And then Greg just a question on SG&A and I appreciate all the progress on the debt side. In terms of I guess a lot of the synergies is going to come out to that end. And I’m wondering just internally relative to your top-line, I know there is probably some one-time, I think you said a $1.5 million of one-time cost due to the ATMI situation. But, were there any other costs that hit in the first quarter that we wouldn’t see going forward? It seem like you came in just a little bit higher than would have expected on that revenue line.

The only other unusual cost in the OpEx during Q1 would have been we had about $800,000 of cost related to the transition into our new i2M facility here in Burlington. And so, we’ll still some portion of that in Q2. But for instance, the move for the SMB business is entirely behind us at this point and that was about $400,000. But in general, I think you should expect them in at, our guidance for the OpEx for the next quarter is 50 to 51, so really pretty consistent with where we were in Q1.

Okay. All right. Thanks, Greg.

And we go next to Patrick Ho with Stifel Nicolaus.

Thank you very much. Maybe first off in terms of the outlook for the June quarter. You mentioned that, wafer start business begins to pick up on a seasonal basis. Can you just give us a little bit of color on the type of percentages you’re expecting from both the units versus the CapEx side of things? Is it going to be a sharp jump on the unit side whereas CapEx continues to decline?

Hi, Patrick. So, if you think about the assumptions behind our guidance for Q2, we are currently modeling a 10% sequential growth for wafer starts and assuming a 10% decline in CapEx. Obviously, all of those numbers will be very much customer-specific, but that’s the overall assumptions that we’re using for Q2.

Right. That’s helpful. A question for Greg in terms of gross margins. They held up pretty well in the first quarter, but as you move to the i2M facility, are there any duplicate cost that are going to linger for let’s say the next a couple of quarters before I think you mentioned by Q4 everything will be completed? What’s the potential impact from I guess discontinued transition over the next few quarters?

What I would say is Q1 of 2014 would be the peak quarter from a drag on the P&L perspective. Which is we’re now – we are now out of the specialty – the coating business is out of their duplicative facility. They’ve incurred their moving cost, so they are operating in that business. We do have duplicative cost related to our membrane manufacturing operation and we’ll have that really through 2015. So, I guess those are already reflected in the P&L and in the gross margins. So, the drag from that transition, it was – Q1 was really the peak quarter.

Great, thank you very much.

And for our next question we go to Avinash Kant with D.A. Davidson & Company.

Good morning Bertrand and Greg. Two questions. The first one is that, you talked about the lower rates now that you have. Have you done any math or any kind of you know some rough expectations that you can give that post ATMI acquisition, what kind of interest expenses that we are looking at on a quarterly basis?

Sure. As long as LIBOR stays based below 75 basis points, you know we don’t repay, assuming all the debt stays outstanding, the annual interest cost to be about $38 million.

$38 million.

So, that’s call $9.5 million a quarter.

Okay, perfect. And then in terms of cost synergy that you have talked about $30 million, could you give us some breakdown of that $30 million where is that coming on and based on what you have seen thus far where do you think could go? Whether this is conservative or not or what do you think at this point?

It really Patrick, it falls into call it three broad buckets. One is sort of I’ll it duplicative corporate cost, which is – will go from two senior management teams to one senior management team, eliminate a Board of Directors, eliminate a D&O policy, goes from two audits to one audit. I mean, that’s the first bucket. The second bucket is what I would call infrastructure or back-end operations so finance, IT, HR, general kind of corporate organizations. And then the last area would be, as we look to, would be what I call steeled operations and that’s going from two sales offices in Taiwan to one in Taiwan, same thing in all the different countries in Asia, one global account manager for the major key accounts. And so, those are the three broad buckets.

Okay, perfect. Thank you so much.

(Operator Instructions). And we go next to Ben Pang with Northland Capital Markets.

Thanks for taking my questions. Just first a clarification on the guidance for 2Q. Is your assumption at the high-end of your guidance that, I guess the project part of the business comes back?

Ben, no, I would say that, right now we have relatively low expectations in terms of our OEM business and facility related business. I think that, what really move or would move our revenue from the low-end to the high-end of the guidance really has more to do with the timing of the ramp of some of the new fabs, which should benefit our new products and in particular some of the newer generation liquid filters that we’ve been developing. So, it’s really more of a – I’m sorry Ben, did you have a question?

Yes. The second part of the question is, if you look at the non-semi business, that’s kind of trended in the same band for a while now, what’s the expectation there I guess for the rest of the year? You commented that the LED and the solar are improving but some of the other display are weaker. What does that look like? I mean, I presume for the rest of the year.

So, I would say that, the overall ratio should be about the same. So, we would expect the non-semi business to be still about 25% to 26% of total revenues. If you look back historically, we continue to look at these businesses as a portfolio opportunities and there really we have seen conditions where all of those markets actually performed well at the same time. So again, I think it’s really more of the buffer if you want. Having said that, again as we pointed in our preliminary remarks, we have seen interesting developments in some of those emerging markets such as LED, solar and even life sciences. So we hope that, we’re going to continue to see those trends and that those markets overtime will become more important to our overall business.

Thank you very much.

And we’ll go next to Jairam Nathan with Sidoti.

Hi. Thanks for taking my question. I just wanted to dig out a little more on your comments about strength in Taiwan and offset by the weakness in the Korea and the other regions. You also indicated that the 28 nanometer was one of the reasons why the numbers were stronger and is the shift to 20 nanometer not as beneficial for you as the 28 nanometer has been?

So the answer to that question is, yes. We continue to be where it was which had all of these nodes and has all of those larger customers’ positions – have more advanced process technology nodes we will benefit from that. And as I said earlier, the real question for us is the timing of the transition. And much like you, we are very eager to see them continue to seek to the very aggressive transition timeframe. And so, that’s really what we expect to see later on in the year and we certainly expect to benefit from those trends later on in the year.

And given the comment there you said in early client that we can take on what do you expect on the unit side for the full year?

We typically do not provide annual guidance, but given the fact that, as part of the financing of the acquisition of the ATMI, we volunteer views around the overall annual industry projections. I will probably make an exception today and just remind everyone that, we are actually optimistic about 2014. We expect the year to be an up year. But I would also remind you that, our expectations going into the year were probably more measured than some of the more aggressive views in the industry. So internally, we are counting on wafer start to grow between 2% and 3% so low single-digit and we are expecting CapEx to be growing in the low teens. And as of right now, I would say that, we still believe that, this outlook and these assumptions are reasonable.

Okay, and last question on the Specialty Material side and increase in revenue. Is there specific that drove that sequentially?

Nothing terribly specific. I mean, they had a stronger quarter of Poco Graphite, but in general it was – Flows that resulted in a little bit of overall strength.

Remember that, this business is less dependent on the semiconductor industry than most of our all divisions and we saw there very nice momentum in some broader industrial applications.

Okay. Thank you.

And we go next to Jason Ursaner with CJS Securities.

Good morning.

Hi, Jason.

First, a question on the Microenvironment segment. Wondering if you can maybe breakdown the quarter 300 millimeter FOUP shipper versus some of the legacy diameter products. Margins were down a little, so just wondering if it was normal manufacturing leverage or more of a product mix there.

The revenue was down about 6% and the operating margin was relatively flat. So, the performance of the business given the revenue was about what we would have expected.

And in terms of the overall trends by product, I would say that, we continue to do extremely well on our 300 millimeter FOUP platform and continue to win the vast majority of the opportunities at the advanced nodes. I think that business however was in modest decline sequentially and that’s really more of a function of the product mix. As you may know, you may remember from prior presentations, our FOUP platform comprises very different foam factors and utilizes different types of materials and the AHP as a result can vary quite a bit from one in our product flavor to the next. So, I would just say that, our factories remained fully-loaded in the quarter and what you’re seeing is really more of a function of the mix than anything else.

Okay. And longer-term there, maybe just an update on 450. Generally what’s kind of the industry feel towards, that seems to being pushed out a bit. Just wondering where you’re out there from your perspective?

Well, I would still say that, we still remain confident that the economics around the 450 migration are compelling and ultimately this transition is a necessity for the industry. I think as it’s always the case in any wafer size transition, the timing is going to be very fluid. We knew that going in. We made a strategic decision to invest early as we wanted to establish the brand and establish our capability across the ecosystem in a resounding way. That’s what we’ve done. I think we are really well-positioned, but it’s true that at this point in time, I think that the adoption of 450 is probably going be delayed to hopefully in 2017 or 2018. But, I think we are ideally positioned to benefit from this transition when it happens.

Does the timing matter much from a competitive standpoint though? Is there IP once it gets set does that, there is still an opportunity for that change or in terms of laying the groundwork early, it’s kind of set for whenever it happens?

Yes. I mean, again, I think we feel that, we are very well-positioned today. It’s clear that, any delay in the adoption will provide an opportunity for our competitors to catch up. So, it is on us to make sure that we continue to engage and we continue to modify and tune our platform in such a way that, we maintain the leadership position that we believe we are having today.

Okay, and there has been a number of announcements recently related to green recycling electronics, any update on the evolved platform that ATMI has and obviously it’s a fairly unique process. So, I’m wondering maybe if you could talk a little bit about what Entegris might bring to that process and maybe your long-term expectations for it and how maybe it grow from a side business to a core contributor over the next couple of years?

It’s a great question. And I would say that, as we mentioned during the call in January, we are very excited about the promises of this platform. The technology is very exciting. I think the team managing this business is very dedicated and very driven and I believe that, this technology is really just entering the commercialization stage. And again, everything seems to be very promising. So, this technology clearly belongs in the overall portfolio of capabilities of Entegris going forward. I think that a broader platform would hopefully be an asset to this technology and to the team as it will a lowest to secure funding and secure support to the team and to the technology as again as we engage into the commercialization phase. I would say that, as we complete the integration of the ATMI and as we become one company, I think that, the time will be a right for us to start spending maybe more time characterizing all of those opportunities that we’re excited about.

Okay, great. I appreciate all the details. Best of luck in Q2.

Thank you.

And with that ladies and gentlemen, we have no further questions on our roster. Therefore Mr. Loy, I will turn the conference back over to you for any closing remarks.

Well, thank you all for joining our call today and we look forward to seeing many of you I hope during our Analyst Day in New England on June, 19th. Thank you. Bye-bye.

And ladies and gentlemen, this will conclude today’s conference. Thank you for your participation.