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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2006
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file Number: 1-16239
 ATMI, Inc.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    06-1481060(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)
 7 Commerce Drive, Danbury, CT
    
    06810(Address of principal executive offices)
    
    (Zip Code)
 
  Name of each exchangeTitle of each class
    
    on which registeredNone
    
    Not Applicable
   
 þ o
 o þ
 þ o
 o
  þ o o
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



ATMI, INC.
Annual Report on Form 10-K
For the Fiscal Year Ended December 31, 2006
 TABLE OF CONTENTS
 PagePart IItem 1.
    
    Business
    
    
    3Item 1A.
    
    Risk Factors
    
    
    13Item 1B.
    
    Unresolved Staff Comments
    
    
    17Item 2.
    
    Properties
    
    
    17Item 3.
    
    Legal Proceedings
    
    
    18Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    18Part IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
    
    
    18Item 6.
    
    Selected Financial Data
    
    
    20Item 7.
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    22Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    35Item 8.
    
    Financial Statements and Supplementary Data
    
    
    35Item 9.
    
    Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure
    
    
    35Item 9A.
    
    Controls and Procedures
    
    
    35Item 9B.
    
    Other Information
    
    
    36Part III
    
    
    
    
    37Part IVItem 15.
    
    Exhibits and Financial Statement Schedule
    
    
    37Signatures
    
    
    
    
    41Index to Consolidated Financial Statements and Financial Statement Schedule
    
    
    F-1EX-10.20: FORM OF EXECUTIVE MANAGEMENT RESTRICTED STOCK GRANT AGREEMENTEX-10.21: FORM OF EMPLOYEE NON-QUALIFIED STOCK OPTION AGREEMENTEX-10.23: FORM OF EMPLOYEE RESTRICTED STOCK GRANT AGREEMENTEX-10.24: FORM OF NON-EMPLOYEE DIRECTOR RESTRICTED STOCK GRANTEX-10.27: SECOND AMENDMENT TO AGREEMENT OF LEASEEX-10.28: THIRD AMENDMENT TO AGREEMENT OF LEASEEX-10.29: FORM OF NON-EMPLOYEE DIRECTORS NON-QUALIFIED STOCK OPTION AGREEMENTEX-21: SUBSIDIARIES OF ATMIEX-23: CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32: CERTIFICATION




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PART I
  
 Item 1. Business
   
    
    an extensive research and development program that has produced a stream of proprietary
and patented products for this market;
    
    a key customer focus, which has included providing applications development to offer
materials solutions for future generation technologies;
    
    a strategy of leveraging the combination of our performance materials and materials
handling portfolio to provide greater process efficiency value to our customers; and
    
    a selective partnership and collaboration effort that has allowed us to add
complementary technologies to our product portfolio more rapidly than through internal
development.
     3




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Semiconductor Industry Background
  
    
    consistently enhanced performance characteristics and functionality;
    
    improved reliability;
    
    reduced size, weight, power consumption and cost; and
    
    shorter product development cycles.
  Semiconductor Manufacturing Process
     4




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
    
    the relative thinness of the films applied to the wafer;
    
    conformality (ability to coat evenly, especially in holes and trenches designed into the device);
    
    purity; and
    
    the ability to coat large areas.
         5




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Flat Panel Industry Background
  
    
    consumer affordability through manufacturing and materials cost efficiencies;
    
    improved performance and reliability; and
    
    shorter product development cycles.
  Flat Panel Manufacturing Process
  ATMIs Strategy
  
    
    Focus development and application engineering initiatives with the leading
microelectronic manufacturers to provide next generation performance materials and process
solutions.
    
    Target high-growth, high-margin specialty markets that use ATMIs core materials
technologies and require products that are consumed in the production process.
    
    Add value through performance materials packaging, dispense, and process technologies
designed to meet the demands of users for greater levels of purity, productivity, safety,
and environmental responsiveness.
    
    Leverage ATMIs technology leadership by investing extensively in developing proprietary
and patented materials and process solutions, which the Company uses to commercialize new
offerings for customers.
    
    Form strategic alliances, including joint development programs and collaborative
marketing efforts, to accelerate the introduction of ATMIs products into markets that ATMI
does not currently serve.
 6




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Businesses and Products
  
    
    developing and commercializing a broad range of front-end semiconductor performance
materials;
    
    developing and commercializing sub-atmospheric pressure gas delivery systems for safe
handling and delivery of toxic and hazardous gases to semiconductor process equipment;
    
    developing and commercializing innovative high-purity materials packaging and dispensing
systems that allow for the introduction of low volatility liquids and solids to
semiconductor processes; and
    
    developing manufacturing processes to meet the critical purity and integrity
requirements of the microelectronic manufacturers.
  
    
    offer a complete line of performance materials, and related materials packaging,
dispense and process technologies;
    
    provide a high level of customer service and applications support in all global markets;
    
    meet customer needs for statistical quality and process control and dock-to-stock programs; and
    
    meet the industrys needs for advanced materials required for future generation devices.
 Products and Services .
  Gas Delivery Systems ®
 7




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 ® ® ®
  Surface Preparation.
 Copper Plating. ®
 Deposition. ®
  8




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Chemical Mechanical Planarization.
  ®
  ®
 ®
  , ,
 9




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Customers, Sales and Marketing
  Manufacturing
  Location
    
    Products
    
    Square FootageAnseong, South Korea
    
         liquid materials
    
    
    9,000Burnet, TX
    
          liquid materials and delivery systems
    
    
    75,000Bloomington, MN
    
          high-purity materials packaging systems
    
    
    68,000Danbury, CT
    
          gas delivery systems
    
    
    75,000      liquid materialsHoegaarden, Belgium
    
          high-purity materials packaging and   mixing systems
    
    
    71,000
  10




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Competition
   Research and Development
   Strategic Alliances
 
 11




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Backlog
  Patents and Proprietary Rights
    Environmental Regulation
  Employees
  Company Information
  12




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www.atmi.com Investor SEC Filing
  
 
 Item 1A. Risk Factors
 Cautionary Statements Regarding Future Results of Operations
  Cyclicality in the semiconductor market may adversely affect our performance.
  13




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Our margins may vary over time.
  Our business could be adversely affected if we cannot protect our proprietary technology or if
we infringe on the proprietary technology of others.
   We may have difficulty obtaining the resources or products we need for manufacturing or
assembling our products or operating other aspects of our business, which could adversely affect
our ability to meet demand for our products and may increase our costs.
  We face intense competition from a variety of sources, including larger companies.
  
    
    price;
    
    technical capabilities;
    
    quality; or
 14




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
    
    customer service.
 Our global manufacturing and sales activities subject us to risks associated with legal,
political, economic or other changes.
  Our results of operations could be adversely affected by natural events in the locations in
which we, our customers or our suppliers operate.
  The loss of or significant curtailment of purchases by any of our largest customers could
adversely affect our results of operations.
  Incorrect forecasts of customer demand could adversely affect our results of operations.
  Our results of operations could be adversely affected by changes in taxation.
  15




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We may have difficulty managing our growth and attracting and retaining highly skilled
scientific, technical, managerial and marketing personnel, which could adversely affect our
revenues and increase our operating expenses.
  Our revenues and earnings could be negatively affected if we cannot anticipate market trends,
enhance our existing products and processes, develop and commercialize new products and processes,
and identify and consummate strategic acquisitions.
  We face the risk of product liability claims.
  Our business is potentially subject to substantial liabilities for failure to comply with
environmental regulations.
   16




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Compliance with changing corporate governance regulations and public disclosures may result in
additional risks and exposures.
  
 Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
  Location
    
    Square Footage
    
    Lease / OwnAnseong, South Korea
    
    
    9,000
    
    
    OwnBloomington, MN
    
    
    68,000
    
    
    LeaseBurnet, TX
    
    
    75,000
    
    
    OwnChutung Town, Taiwan
    
    
    11,000
    
    
    LeaseDanbury, CT(1)
    
    
    31,000
    
    
    LeaseDanbury, CT
    
    
    75,000
    
    
    LeaseHoegaarden, Belgium
    
    
    71,000
    
    
    OwnHsin-chu, Taiwan
    
    
    40,000
    
    
    LeaseShanghai, China
    
    
    5,600
    
    
    LeaseSuwon-si, South Korea
    
    
    8,000
    
    
    LeaseTempe, AZ
    
    
    5,500
    
    
    LeaseTokyo, Japan
    
    
    6,000
    
    
    LeaseToyohashi, Japan
    
    
    13,000
    
    
    Lease
  
 (1)
    
    ATMIs corporate headquarters. 17




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Item 3. Legal Proceedings
      
 Item 4. Submission of Matters to a Vote of Security Holders
  
 PART II.
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
  18




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High
    
    
    LowFiscal year ended December 31, 20051st Quarter
    
    $
    28.24
    
    
    $
    20.532ndQuarter
    
    
    30.75
    
    
    
    21.953rd Quarter
    
    
    33.62
    
    
    
    28.584th Quarter
    
    
    32.06
    
    
    
    24.06Fiscal year ended December 31, 20061st Quarter
    
    $
    34.42
    
    
    $
    27.662ndQuarter
    
    
    33.05
    
    
    
    22.863rd Quarter
    
    
    30.60
    
    
    
    21.724th Quarter
    
    
    35.30
    
    
    
    28.31
     Total Number ofShares Purchased
    
    
    Maximum Dollaras Part of
    
    
    Value of Shares thatTotal Number
    
    
    Average
    
    
    Publicly
    
    
    May Yet Beof Shares
    
    
    Price Paid
    
    
    Announced
    
    
    Purchased Under thePeriod (1)
    
    Repurchased (2)
    
    
    per Share
    
    
    Programs (3)
    
    
    ProgramsOctober 1-31, 2006
    
    
    285,431
    
    
    $
    30.04
    
    
    
    285,431
    
    
    $
    136,779,000November 1-30, 2006
    
    
    189,000
    
    
    $
    32.49
    
    
    
    189,000
    
    
    $
    130,639,000December 1-31, 2006
    
    
    180,000
    
    
    $
    31.50
    
    
    
    180,000
    
    
    $
    124,969,000Total
    
    
    654,431
    
    
    $
    31.15
    
    
    
    654,431
    
    
    $
    124,969,000
 
 (1)
    
    There were no other repurchases of our equity securities by or on behalf of us or any
affiliated purchaser during the fiscal quarter ended December 31, 2006.(2)
    
    Share repurchases are shown on a trade-date basis. At December 31, 2006, $0.8 million
related to these share repurchases had not yet been paid by the Company because the settlement
dates were in January 2007.(3)
    
    In October 2005, the Companys Board of Directors approved a share repurchase program for up
to $75.0 million of ATMI common stock over the subsequent 12 months. In August 2006, the
Companys Board of Directors approved a second share repurchase program for an additional
$150.0 million. Share repurchases are made from time to time in open market transactions at
prevailing market prices or in privately negotiated transactions. Management determines the
timing and amount of purchases under the programs based upon market
conditions or other factors. The programs do not require the Company to purchase any specific
number or amount of shares and may be suspended or reinstated at any time at the Companys
discretion and without notice. 19




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Item 6. Selected Financial Data
  2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002Consolidated Statements of Operations:Revenues
    
    $
    325,913
    
    
    $
    281,754
    
    
    $
    246,291
    
    
    $
    171,634
    
    
    $
    136,975Cost of revenues
    
    
    162,530
    (1)
    
    
    140,251
    
    
    
    122,415
    
    
    
    89,902
    (5)
    
    
    68,424Gross profit
    
    
    163,383
    
    
    
    141,503
    
    
    
    123,876
    
    
    
    81,732
    
    
    
    68,551Operating expenses:Research and development
    
    
    26,217
    
    
    
    22,284
    
    
    
    19,577
    
    
    
    19,170
    (6)
    
    
    13,843Selling, general and administrative
    
    
    90,149
    
    
    
    78,810
    
    
    
    66,920
    
    
    
    54,145
    
    
    
    50,572Restructuring and other charges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,731
    (7)
    
    
    Total operating expenses
    
    
    116,366
    
    
    
    101,094
    
    
    
    86,497
    
    
    
    75,046
    
    
    
    64,415Operating income
    
    
    47,017
    
    
    
    40,409
    
    
    
    37,379
    
    
    
    6,686
    
    
    
    4,136Interest income (expense), net
    
    
    8,324
    
    
    
    5,407
    
    
    
    (3,442
    )
    
    
    (3,862
    )
    
    
    (1,803
    )Other income (expense), net
    
    
    515
    
    
    
    (432
    )
    
    
    (3,473
    )(4)
    
    
    (5,453
    )(8)
    
    
    390
    (11)Income (loss) before income taxes
    
    
    55,856
    
    
    
    45,384
    
    
    
    30,464
    
    
    
    (2,629
    )
    
    
    2,723Provision (benefit) for income taxes
    
    
    15,895
    (2)
    
    
    14,662
    
    
    
    10,358
    
    
    
    (4,617
    )(9)
    
    
    951Income from continuing operations
    
    
    39,961
    
    
    
    30,722
    
    
    
    20,106
    
    
    
    1,988
    
    
    
    1,772Income (loss) from operations of
discontinued operations, net of taxes
    
    
    
    
    
    
    
    
    
    
    3,313
    
    
    
    (11,907
    )(10)
    
    
    (32,493
    )(12)Gain on disposal of discontinued
operations, net of taxes
    
    
    
    
    
    
    
    
    
    
    8,083
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    39,961
    
    
    $
    30,722
    
    
    $
    31,502
    
    
    $
    (9,919
    )
    
    $
    (30,721
    )Diluted earnings (loss) per share:Earnings per share from continuing
operations
    
    $
    1.08
    
    
    $
    0.85
    
    
    $
    0.64
    
    
    $
    0.06
    
    
    $
    0.06Earnings (loss) per share from
operations of discontinued operations
    
    
    
    
    
    
    
    
    
    $
    0.10
    
    
    $
    (0.38
    )
    
    $
    (1.05
    )Earnings per share from gain on
disposal of discontinued operations
    
    
    
    
    
    
    
    
    
    $
    0.26
    
    
    
    
    
    
    
    Earnings (loss) per common share
    
    $
    1.08
    
    
    $
    0.85
    
    
    $
    1.00
    
    
    $
    (0.32
    )
    
    $
    (0.99
    )Weighted
average shares Outstanding assuming dilution
    
    
    36,859
    
    
    
    36,276
    
    
    
    31,650
    
    
    
    31,208
    
    
    
    30,997
 20




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2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002Consolidated Balance Sheet Data:Cash, cash equivalents and marketable
securities (13)
    
    $
    219,066
    
    
    $
    256,137
    
    
    $
    238,960
    
    
    $
    128,700
    
    
    $
    166,178Working capital
    
    
    281,362
    
    
    
    274,323
    
    
    
    190,874
    
    
    
    235,204
    
    
    
    276,717Total assets
    
    
    488,037
    
    
    
    499,836
    
    
    
    470,100
    
    
    
    414,442
    
    
    
    416,482Long-term obligations
    
    
    1,669
    
    
    
    3,460
    (3)
    
    
    118,255
    
    
    
    115,406
    
    
    
    115,346Total stockholders equity
    
    
    435,496
    
    
    
    452,720
    (3)
    
    
    298,098
    
    
    
    254,773
    
    
    
    256,390
  
 (1)
    
    Includes $1.4 million one-time recovery of value-added taxes in Japan related to 2005.(2)
    
    Includes a benefit of $1.7 million related to adjustment of our tax liabilities.(3)
    
    Includes effect of conversion of the Companys 5.25 percent convertible subordinated notes
due November 15, 2006 into 5,183,095 shares of common stock.(4)
    
    Includes a $4.5 million asset impairment charge related to the Companys strategic investment
portfolio.(5)
    
    Includes charges of $2.7 million to write down inventory balances in the liquid chemistries
and delivery equipment product lines.(6)
    
    Includes $0.7 million of in-process research and development expensed in connection with the
ESC, Inc. acquisition.(7)
    
    Represents a $2.4 million asset impairment charge related to the Companys former liquid
chemistries manufacturing facility, partially offset by a $0.7 million gain related to
sublease income from a former tenant in the Companys Danbury, Connecticut facility.(8)
    
    Includes $5.7 million of asset impairment charges related to the Companys strategic
investment portfolio.(9)
    
    Includes $3.0 million of tax benefit recognized as a result of a favorable U.S. Tax Court
judgment.(10)
    
    Includes a $2.6 million (net of $1.5 million tax benefit) charge for excess and obsolete
inventory.(11)
    
    Includes $1.0 million gain from the sale of available-for-sale securities, offset by a $0.4
million write-down of other available-for-sale securities.(12)
    
    Includes an asset impairment charge of $21.8 million (net of tax benefit of $12.8 million) to
recognize the impairment of assets in the Companys former gallium arsenide epitaxial services
business.(13)
    
    Includes non-current marketable securities of $14.4 million, $46.3 million, $105.8 million,
$9.7 million and $6.0 million at December 31, 2006, 2005, 2004, 2003 and 2002, respectively. 
 21




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Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Company Overview
    Critical Accounting Policies and Estimates
    Revenue
Recognition
 22




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Results of Operations
  December 31,2006
    
    
    2005
    
    
    2004Cost of revenues
    
    $
    910
    
    
    
    
    
    
    
    Research and development
    
    
    773
    
    
    
    
    
    
    
    Sales, general and administrative
    
    
    7,681
    
    
    $
    2,226
    
    
    $
    589Total equity based compensation expense
    
    
    9,364
    
    
    
    2,226
    
    
    
    589Benefit from income taxes
    
    
    3,137
    
    
    
    720
    
    
    
    204Net equity based compensation expense
    
    $
    6,227
    
    
    $
    1,506
    
    
    $
    385
 Year ended December 31, 2006 Compared to Year Ended December 31, 2005
 Overview
   December 31,2006
    
    
    2005
    
    
    % ChangeRevenues
    
    $
    325,913
    
    
    $
    281,754
    
    
    
    15.7
    %Cost of revenues
    
    
    162,530
    
    
    
    140,251
    
    
    
    15.9
    %Gross profit
    
    
    163,383
    
    
    
    141,503
    
    
    
    15.5
    %Gross margin percent
    
    
    50.1
    %
    
    
    50.2
    %
    
    
    (0.1
    %)Research and development
    
    
    26,217
    
    
    
    22,284
    
    
    
    17.6
    %R&D as a percent of revenues
    
    
    8.0
    %
    
    
    7.9
    %
    
    
    0.1
    %Sales, general and administrative
    
    
    90,149
    
    
    
    78,810
    
    
    
    14.4
    %SG&A as a percent of revenues
    
    
    27.7
    %
    
    
    28.0
    %
    
    
    (0.3
    %)Operating income
    
    
    47,017
    
    
    
    40,409
    
    
    
    16.4
    %Operating margin
    
    
    14.4
    %
    
    
    14.3
    %
    
    
    0.1
    %Effective tax rate
    
    
    28.5
    %
    
    
    32.3
    %
    
    
    (3.8
    %)Net income
    
    $
    39,961
    
    
    $
    30,722
    
    
    
    30.1
    %Diluted earnings per share
    
    $
    1.08
    
    
    $
    0.85
    
    
    
    27.1
    %
 Revenues
 27




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Gross Profit
 Research and Development Expenses
 Selling, General and Administrative Expenses
 Operating Income.
 Interest Income
 Interest Expense
 Impairment of Investments
 Other Income (loss), net
 Provision for Income Taxes
 28




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##### Table of Contents



Year ended December 31, 2005 Compared to Year Ended December 31, 2004
 Overview
   December 31,2005
    
    
    2004
    
    
    % ChangeRevenues
    
    $
    281,754
    
    
    $
    246,291
    
    
    
    14.4
    %Cost of revenues
    
    
    140,251
    
    
    
    122,415
    
    
    
    14.6
    %Gross profit
    
    
    141,503
    
    
    
    123,876
    
    
    
    14.2
    %Gross margin percent
    
    
    50.2
    %
    
    
    50.3
    %
    
    
    (0.1
    %)Research and development
    
    
    22,284
    
    
    
    19,577
    
    
    
    13.8
    %R&D as a percent of revenues
    
    
    7.9
    %
    
    
    7.9
    %
    
    
    Sales, general and administrative
    
    
    78,810
    
    
    
    66,920
    
    
    
    17.8
    %SG&A as a percent of revenues
    
    
    28.0
    %
    
    
    27.2
    %
    
    
    0.8
    %Operating income
    
    
    40,409
    
    
    
    37,379
    
    
    
    8.1
    %Operating margin
    
    
    14.3
    %
    
    
    15.2
    %
    
    
    (0.9
    %)Effective tax rate
    
    
    32.3
    %
    
    
    34.0
    %
    
    
    (1.7
    %)Income from continuing operations
    
    
    30,722
    
    
    
    20,106
    
    
    
    52.8
    %Income from operations of discontinued operations,
net of taxes
    
    
    
    
    
    
    3,313
    
    
    
    Gain on sale of discontinued operations, net of taxes
    
    
    
    
    
    
    8,083
    
    
    
    Net income
    
    $
    30,722
    
    
    $
    31,502
    
    
    
    (2.5
    %)Diluted earnings per share  continuing operations
    
    $
    0.85
    
    
    $
    0.64
    
    
    
    32.8
    %Diluted earnings per share
    
    $
    0.85
    
    
    $
    1.00
    
    
    
    (15.0
    %)
 Revenues
 Gross Profit
 29




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##### Table of Contents



Research and Development (R&D) Expenses
 Selling, General and Administrative (SG&A) Expenses
 Operating Income.
 Interest Income
 Interest Expense
 Impairment of Investments
 Other Income, net
 Provision for Income Taxes
 Income from Operations of Discontinued Operations
 Gain on Sales of Discontinued Operations
 30




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##### Table of Contents



Liquidity and Capital Resources
    31




---



##### Table of Contents



Years Ended December 31,2006
    
    2005Cash provided by (used for):Operating Activities
    
    $
    62,032
    
    
    $
    44,981Investing Activities
    
    
    52,411
    
    
    
    (55,520
    )Financing Activities
    
    
    (71,760
    )
    
    
    6,509Effects of exchange rate changes on cash
    
    
    (38
    )
    
    
    (1,414
    )
  
    
    Increase in net income of $9,239
    
    Increase in non-cash depreciation and amortization expense of $2,237
    
    Increase in non-cash equity based compensation expense of $7,138
    
    Increase in deferred income taxes of $6,525
    
    Decrease in cash used by operating or working capital accounts of $4,169 due
primarily to increase in cash generated from accounts payable, offset by increases
in cash used for accounts receivable and inventories (driven by the increase in
sales)
  
    
    Reduction in cash paid for acquisitions of cost-basis investments of $5,117
    
    Reduction in cash proceeds of $2,818 from sales of cost-basis investments
    
    Increase in cash proceeds of $104,798 due to sales and maturities of marketable
securities in excess of purchases
  
    
    Increase in treasury stock purchases of $76,915 under our share repurchase programs
    
    Decrease of $2,134 in proceeds from stock option exercises in 2006
  32




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##### Table of Contents



Payments Due by PeriodLess than 1Total
    
    Year
    
    1-3 Years
    
    4-5 Years
    
    ThereafterContractual obligations:Capital leases
    
    $
    221
    
    
    $
    48
    
    
    $
    95
    
    
    $
    78
    
    
    $
    Operating leases
    
    
    7,685
    
    
    
    3,715
    
    
    
    3,660
    
    
    
    310
    
    
    
    Purchase obligations:Inventory purchases
    
    
    2,238
    
    
    
    2,238
    
    
    
    
    
    
    
    
    
    
    
    Capital expenditures
    
    
    357
    
    
    
    357
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    435
    
    
    
    435
    
    
    
    
    
    
    
    
    
    
    
    Total purchase obligations
    
    
    3,030
    
    
    
    3,030
    
    
    
    
    
    
    
    
    
    
    
    Standby Letters of Credit
    
    
    914
    
    
    
    764
    
    
    
    
    
    
    
    150
    
    
    
    Other long-term liabilities
    
    
    354
    
    
    
    
    
    
    
    354
    
    
    
    
    
    
    
    Total debt, lease,
purchase and other
long-term liability
obligations
    
    $
    12,204
    
    
    $
    7,557
    
    
    $
    4,109
    
    
    $
    538
    
    
    $
    
     33




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##### Table of Contents



Cautionary Statements Under the Private Securities Litigation Reform Act of 1995
   34




---



##### Table of Contents



Item 7A. Quantitative and Qualitative Disclosures about Market Risk
       
 Item 8. Financial Statements and Supplementary Data
  
 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
   35




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##### Table of Contents



Internal ControlIntegrated
Framework.
  
 Item 9B. Other Information
  36




---



##### Table of Contents



PART III.
  
 PART IV
 
 Item 15. Exhibits and Financial Statement Schedule
   
     37




---



##### Table of Contents



Exhibit No.
    
    Description2.01
    
    Asset Purchase Agreement dated as of June 28, 2004 by and between International
Rectifier Corporation, IR Epi Service, Inc. and Advanced Technology Materials,
Inc. (Exhibit 2.1 to ATMIs Current Report on Form 8-K, filed on July 20, 2004).
(1) (4)3.01
    
    Restated Certificate of Incorporation dated as of July 30, 2005 (Exhibit 3 (i) to
ATMIs Current Report on Form 8-K, filed on August 3, 2005)). (1)3.02
    
    Amended and Restated Bylaws of ATMI dated July 30, 2005 (Exhibit 3 (ii) to ATMIs
Current Report on Form 8-K, filed on August 3, 2005). (1)4.01
    
    Specimen of ATMIs Common Stock Certificate (Exhibit 4.01 to the 1997 Form S-4
Registration Statement). (1)4.02
    
    Rights Agreement, dated as of October 13, 2000, between ATMI, Inc. and Fleet
National Bank, as Rights Agent (Exhibit 4.01 to ATMIs Current Report on Form 8-K,
filed on October 17, 2000). (1)4.03
    
    Registration Rights Agreement, dated November 13, 2001, among ATMI, Inc., Goldman,
Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, relating to
ATMIs 5.25% Convertible Subordinated Notes due 2006 (Exhibit 4.1 to ATMIs
Registration Statement on Form S-3, filed on January 7, 2002, Registration No.
333-76378 (the 2002 Form S-3 Registration Statement)). (1)4.04
    
    Indenture, dated November 13, 2001, between ATMI, Inc. and State Street Bank and
Trust Company, relating to the ATMIs 5.25% Convertible Subordinated Notes due
2006 (Exhibit 4.2 to the 2002 Form S-3 Registration Statement). (1)4.05
    
    Specimen Note for ATMIs 5.25% Convertible Subordinated Notes due 2006 (included
in pages 26 to 40 of the Indenture filed as Exhibit 4.2 to the 2002 Form S-3
Registration Statement). (1)10.01*
    
    Employment Agreement between Eugene G. Banucci, Ph.D. and ATMI, Inc. dated
September 19, 2005, effective as of January 1, 2005 (Exhibit 10.1 to ATMIs
Current Report on Form 8-K, filed on September 19, 2005). (1)10.02*
    
    Employment Agreement between Daniel P. Sharkey and ATMI, Inc. dated December 31,
2004 (Exhibit 10.1 to ATMIs Current Report on Form 8-K, filed on January 5,
2005). (1)10.03*
    
    Employment Agreement between Douglas A. Neugold and ATMI, Inc. dated December 31,
2004 (Exhibit 10.1 to ATMIs Current Report on Form 8-K/A, filed on January 5,
2005). (1)10.04
    
    Agreement of Lease between Melvyn J. Powers and Mary P. Powers d/b/a/ M&M Realty
and Advanced Technology Materials, Inc., dated December 23, 1994 (Exhibit 10.09 to
Advanced Technology Materials, Inc. Annual Report on Form 10-K/A for the year
ended December 31, 1994, File No. 0-22756). (1)
 38




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##### Table of Contents



Exhibit No.
    
    Description10.05
    
    First Amendment to Agreement of Lease dated as of November 22, 2000 by and between
Commerce Park Realty, LLC and Advanced Technology Materials, Inc. (1)10.06
    
    Second Amendment to Agreement of Lease dated as of March 24, 2003 by and between
Commerce Park Realty, LLC and Advanced Technology Materials, Inc. (1)10.07*
    
    ATMIs 1995 Stock Plan (Exhibit to ATMIs Registration Statement on Form S-8, File
No. 33-93048). (1)10.08*
    
    ATMIs 1997 Stock Plan, dated October 10, 1997, (Exhibit 99.1 to ATMIs
Registration Statement on Form S-8, filed on April 6, 1998, File No. 333-49561).
(1)10.09*
    
    ATMIs 1998 Stock Plan, dated May 20, 1998 (Exhibit 99.1 to ATMIs Registration
Statement on Form S-8, filed on June 9, 1998, File No. 333-56349). (1)10.10
    
    Agreement of Lease between Seymour R. Powers, Leon Griss and Ruth Griss and
Advanced Technology Materials, Inc., dated November 24, 2000 (Exhibit 10.08 to
ATMIs Annual Report on Form 10-K for the year ended December 31, 2000, File No.
001-16239). (1)10.11*
    
    ATMIs 2000 Stock Plan, dated May 24, 2000 (Exhibit 99.01 to ATMIs Registration
Statement on Form S-8, dated September 20, 2000, File No. 333-46222). (1)10.13*
    
    ATMIs 2003 Stock Plan (as amended May 21, 2003) (Exhibit 4.6 to ATMIs
Registration Statement on Form S-8, filed on August 1, 2003, File No. 333-107591).
(1)10.14*
    
    ATMIs 1998 Employee Stock Purchase Plan, (as amended February 28, 2003)(Exhibit
4.7 to ATMIs Registration Statement on Form S-8, filed on August 1, 2003, File
No. 333-107591). (1)10.15
    
    Alliance Agreement dated as of May 16, 2003 by and between Advanced Technology
Materials, Inc. on its own behalf and on behalf of its Affiliates and Enthone,
Inc. (Exhibit 10.15 to ATMIs Annual Report on Form 10-K, filed on March 12, 2004)
(the 2003 Form 10-K). (1)(4)10.16
    
    Stock Purchase Agreement dated as of July 14, 2003 by and among Advanced
Technology Materials, Inc., Lente, LLC and the Persons listed on the signature
page thereto. (Exhibit 10.16 to the 2003 Form 10-K). (1)(4)10.17*
    
    Employment Agreement between Cynthia L. Shereda and ATMI, Inc. dated April 29,
2004 (Exhibit 10.01 to ATMIs Quarterly Report on Form 10-Q for the quarter ended
June 30, 2004, filed on August 5, 2004). (1)10.18*
    
    Amendment to Employment Agreement between Cynthia L. Shereda and ATMI, Inc. dated
December 31, 2004 (Exhibit 10.2 to ATMIs Current Report on Form 8-K, filed on
January 5, 2005). (1)10.19*
    
    Non-Employee Directors Deferred Compensation Program of ATMI, Inc. 1998 Stock
Plan. (1)10.20*
    
    Form of ATMI, Inc. Executive Management Restricted Stock Grant Agreement. (2)10.21*
    
    Form of ATMI, Inc. Employee Non-Qualified Stock Option Agreement. (2)10.22
    
    Agreement of Lease between West Real Estate and Management, Inc. and Advanced
Technology Materials, Inc., dated October 21, 2004 (Exhibit 10.23 to ATMIs Annual
Report on
 39




---



##### Table of Contents



Exhibit No.
    
    DescriptionForm 10-K, filed on March 14, 2005) (the 2004 Form 10-K). (1)10.23
    
    Form of ATMI, Inc. Employee Restricted Stock Grant Agreement  Non-Executive
Management. (2)10.24
    
    Form of ATMI, Inc. Non-Employee Director Restricted Stock Grant. (2)10.25
    
    First Amendment to Agreement of Lease dated as of March 24, 2003 by and between
Seymour R. Powers, Trustee, and Leon Griss and Advanced Technology Materials, Inc.
(1)10.26*
    
    ATMIs 1998 Employee Stock Purchase Plan (as amended effective February 28, 2003
and January 1, 2007)(Exhibit 99 to ATMIs Quarterly Report on Form 10-Q for the
quarter ended September 30, 2006, filed on October 25, 2006). (1)10.27
    
    Second Amendment to Agreement of Lease dated as of January 18, 2007 by and between
Seymour R. Powers, Trustee, and Carole Kolsky, Deborah A. Tauber and Stephen L.
Griss (as successors to Leon Griss and Ruth Griss) and Advanced Technology
Materials, Inc. (2)10.28
    
    Third Amendment to Agreement of Lease dated as of January 18, 2007 by and between
Commerce Park Realty, LLC and Advanced Technology Materials, Inc. (2)10.29
    
    Form of ATMI, Inc. Non-Employee Directors Non-Qualified Stock Option Agreement. (2)21
    
    Subsidiaries of ATMI (2)23
    
    Consent of Independent Registered Public Accounting Firm (2)31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule
15d-14(a) of the Securities Exchange Act, as amended. (2)31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule
15d-14(a) of the Securities Exchange Act, as amended. (2)32
    
    Certification of Chief Executive Officer and Chief Financial Officer Pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002. (3)
 
 *
    
    Management contract or compensatory plan arrangement.(1)
    
    Incorporated by reference.(2)
    
    Filed herewith.(3)
    
    Furnished herewith.(4)
    
    Portions omitted pursuant to a request for confidential treatment. 40




---



##### Table of Contents



SIGNATURES
 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
 ATMI, Inc.February 23, 2007By:
    
    /S/ Douglas A. NeugoldDouglas A. NeugoldPresident, Chief Executive Officer, andDirector
 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the capacities and on the
dates indicated.
 Signature
    
    Title
    
    Date/S/ Douglas A. Neugold
    
    President, Chief Executive Officer
    
    February 23, 2007Douglas A. Neugold
    
    and
Director (principal executive officer)/S/ Daniel P. Sharkey
    
    Executive Vice President, Chief Financial
    
    February 23 2007Daniel P. Sharkey
    
    Officer
and Treasurer (principal financial andaccounting officer)/S/ Eugene G. Banucci
    
    Chairman of the Board and Director
    
    February 23, 2007Eugene G. Banucci, Ph.D./S/ Mark A. Adley
    
    Director
    
    February 23, 2007Mark A. Adley/S/ Robert S. Hillas
    
    Director
    
    February 23, 2007Robert S. Hillas/S/ Stephen H. Mahle
    
    Director
    
    February 23, 2007Stephen H. Mahle/S/ C. Douglas Marsh
    
    Director
    
    February 23, 2007C. Douglas Marsh/S/ Frederick C. Flynn, Jr.
    
    Director
    
    February 23, 2007Frederick C. Flynn, Jr./S/ Cheryl L. Shavers
    
    Director
    
    February 23, 2007Cheryl L. Shavers, PhD.
 41




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##### Table of Contents



ATMI, INC.
 
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT
SCHEDULE
 PageReports of Independent Registered Public Accounting Firm
    
    
    F-2Audited Financial StatementsConsolidated Balance Sheets  December 31, 2006 and 2005
    
    
    F-4Consolidated Statements of Income for the years ended December 31, 2006, 2005, and 2004
    
    
    F-5Consolidated Statements of Stockholders Equity for the years ended December 31, 2004, 2005, and 2006
    
    
    F-6Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005, and 2004
    
    
    F-7Notes to Consolidated Financial Statements
    
    
    F-8Financial Statement ScheduleSchedule II  Valuation and Qualifying Accounts
    
    
    F-34
 F-1




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##### Table of Contents



F-2




---



##### Table of Contents



.
   
 F-3




---



##### Table of Contents



ATMI, INC.
 
 CONSOLIDATED BALANCE SHEETS
  December 31,2006
    
    
    2005ASSETSCurrent assets:Cash and cash equivalents
    
    $
    73,596
    
    
    $
    30,951Marketable securities, current portion
    
    
    131,091
    
    
    
    178,900Accounts receivable, net of allowances of $666 and $695, respectively
    
    
    55,867
    
    
    
    47,125Inventories, net
    
    
    47,339
    
    
    
    39,850Income taxes receivable
    
    
    3,500
    
    
    
    Deferred income taxes
    
    
    8,768
    
    
    
    8,875Prepaid expenses and other current assets
    
    
    12,073
    
    
    
    12,800Total current assets
    
    
    332,234
    
    
    
    318,501Property, plant and equipment, net
    
    
    92,719
    
    
    
    82,821Goodwill
    
    
    13,734
    
    
    
    13,681Other intangibles, net
    
    
    20,669
    
    
    
    24,088Marketable securities, less current portion
    
    
    14,379
    
    
    
    46,286Other long-term assets
    
    
    14,302
    
    
    
    14,459Total assets
    
    $
    488,037
    
    
    $
    499,836LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    20,144
    
    
    $
    11,910Accrued liabilities
    
    
    15,767
    
    
    
    21,246Accrued salaries and related benefits
    
    
    11,813
    
    
    
    8,423Income taxes payable
    
    
    1,186
    
    
    
    102Other current liabilities
    
    
    1,962
    
    
    
    1,975Total current liabilities
    
    
    50,872
    
    
    
    43,656Deferred income taxes, non-current
    
    
    1,165
    
    
    
    3,131Other long-term liabilities
    
    
    504
    
    
    
    329Commitments and contingencies (Notes 4, 6, 9 and 14)Stockholders equity:Preferred stock, par value $.01: 2,000 shares authorized; none issued
    
    
    
    
    
    
    Common stock, par value $.01: 100,000 shares authorized; 38,304 and 37,877
issued and 34,710 and 37,446 outstanding in 2006 and 2005, respectively
    
    
    383
    
    
    
    379Additional paid-in capital
    
    
    389,346
    
    
    
    367,393Deferred equity based compensation
    
    
    
    
    
    
    (5,506
    )Treasury stock at cost (3,594 shares in 2006 and 431 shares in 2005)
    
    
    (100,305
    )
    
    
    (12,118
    )Retained earnings
    
    
    140,434
    
    
    
    100,473Accumulated other comprehensive income
    
    
    5,638
    
    
    
    2,099Total stockholders equity
    
    
    435,496
    
    
    
    452,720Total liabilities and stockholders equity
    
    $
    488,037
    
    
    $
    499,836
  F-4




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##### Table of Contents



ATMI, INC.
 
 CONSOLIDATED STATEMENTS OF INCOME
  Year Ended December 31,2006
    
    
    2005
    
    
    2004Revenues
    
    $
    325,913
    
    
    $
    281,754
    
    
    $
    246,291Cost of revenues
    
    
    162,530
    
    
    
    140,251
    
    
    
    122,415Gross profit
    
    
    163,383
    
    
    
    141,503
    
    
    
    123,876Operating expenses:Research and development
    
    
    26,217
    
    
    
    22,284
    
    
    
    19,577Selling, general and administrative
    
    
    90,149
    
    
    
    78,810
    
    
    
    66,920Total operating expenses
    
    
    116,366
    
    
    
    101,094
    
    
    
    86,497Operating income
    
    
    47,017
    
    
    
    40,409
    
    
    
    37,379Interest income
    
    
    8,353
    
    
    
    7,269
    
    
    
    3,485Interest expense
    
    
    (29
    )
    
    
    (1,862
    )
    
    
    (6,927
    )Impairment of investments
    
    
    (260
    )
    
    
    (379
    )
    
    
    (4,471
    )Other income (loss), net
    
    
    775
    
    
    
    (53
    )
    
    
    998Income before income taxes
    
    
    55,856
    
    
    
    45,384
    
    
    
    30,464Provision for income taxes
    
    
    15,895
    
    
    
    14,662
    
    
    
    10,358Income from continuing operations
    
    
    39,961
    
    
    
    30,722
    
    
    
    20,106Income from operations of discontinued operations, net of
income tax provision of $1,784
    
    
    
    
    
    
    
    
    
    
    3,313Gain on sales of discontinued operations, net of income
tax provision of $4,352
    
    
    
    
    
    
    
    
    
    
    8,083Net income
    
    $
    39,961
    
    
    $
    30,722
    
    
    $
    31,502Basic earnings per share:Earnings per share from continuing operations
    
    $
    1.11
    
    
    $
    0.86
    
    
    $
    0.64Income per share from operations of discontinued
operations
    
    
    
    
    
    
    
    
    
    
    0.11Gain on sales of discontinued operations
    
    
    
    
    
    
    
    
    
    
    0.26Income per common share
    
    $
    1.11
    
    
    $
    0.86
    
    
    $
    1.01Weighted average shares outstanding
    
    
    36,083
    
    
    
    35,707
    
    
    
    31,247Diluted earnings per share:Earnings per share from operations of continuing operations
    
    $
    1.08
    
    
    $
    0.85
    
    
    $
    0.64Income per share from operations of discontinued
operations
    
    
    
    
    
    
    
    
    
    
    0.10Gain on sales of discontinued operations
    
    
    
    
    
    
    
    
    
    
    0.26Income per common share
    
    $
    1.08
    
    
    $
    0.85
    
    
    $
    1.00Weighted average shares outstanding
    
    
    36,859
    
    
    
    36,276
    
    
    
    31,650
  F-5




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##### Table of Contents



ATMI, INC.
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
  Deferred
    
    
    
    
    
    
    
    
    
    
    AccumulatedEquity
    
    
    
    
    
    
    
    
    
    
    OtherAdditional
    
    
    Based
    
    
    
    
    
    
    
    
    
    
    Comprehens-Common
    
    
    Paid-in
    
    
    Compen-
    
    
    Treasury
    
    
    Retained
    
    
    ive IncomeStock
    
    
    Capital
    
    
    sation.
    
    
    Stock
    
    
    Earnings
    
    
    (Loss)
    
    
    TotalBalance at December 31, 2003
    
    $
    310
    
    
    $
    213,314
    
    
    $
    
    
    
    $
    
    
    
    $
    38,249
    
    
    $
    2,900
    
    
    $
    254,773Issuance of 330 shares of common stock
pursuant to the exercise of employee
stock options
    
    
    3
    
    
    
    6,092
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,095Issuance of 115 shares of common stock
pursuant to the employee stock purchase
plan
    
    
    1
    
    
    
    2,253
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,254Equity based compensation
    
    
    
    
    
    
    216
    
    
    
    373
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    589Issuance of 60 shares of restricted stock
    
    
    1
    
    
    
    1,415
    
    
    
    (1,416
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Income tax benefits from equity based
compensation
    
    
    
    
    
    
    926
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    926Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,502
    
    
    
    
    
    
    
    31,502Reclassification adjustment for realized
gain on available-for-sale securities
sold (net of tax provision of $79)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (129
    )
    
    
    (129
    )Unrealized loss on available-for-sale
securities (net of tax benefit of $606)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (989
    )
    
    
    (989
    )Cumulative translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,077
    
    
    
    3,077Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,461Balance at December 31, 2004
    
    
    315
    
    
    
    224,216
    
    
    
    (1,043
    )
    
    
    
    
    
    
    69,751
    
    
    
    4,859
    
    
    
    298,098Issuance of 814 shares of common stock
pursuant to the exercise of employee
stock options
    
    
    8
    
    
    
    16,022
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,030Issuance of 83 shares of common stock
pursuant to the employee stock purchase
plan
    
    
    1
    
    
    
    1,731
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,732Issuance of 20 shares of common stock
pursuant to exercise of warrants
    
    
    
    
    
    
    235
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    235Issuance of 5,183 shares of common stock
pursuant to conversion of notes
    
    
    52
    
    
    
    115,980
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116,032Purchase of 431 treasury shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,118
    )
    
    
    
    
    
    
    
    
    
    
    (12,118
    )Issuance of 299 shares of restricted stock
    
    
    3
    
    
    
    6,686
    
    
    
    (6,689
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Equity based compensation
    
    
    
    
    
    
    
    
    
    
    2,226
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,226Income tax benefits from equity based
compensation
    
    
    
    
    
    
    2,523
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,523Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,722
    
    
    
    
    
    
    
    30,722Reclassification adjustment for realized
loss on available-for sale securities
sold (net of tax benefit of $66)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    113
    
    
    
    113Unrealized gain on available-for-sale
securities (net of tax provision of $31)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53
    
    
    
    53Cumulative translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,926
    )
    
    
    (2,926
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,962Balance at December 31, 2005
    
    
    379
    
    
    
    367,393
    
    
    
    (5,506
    )
    
    
    (12,118
    )
    
    
    100,473
    
    
    
    2,099
    
    
    
    452,720Issuance of 663 shares of common stock
pursuant to the exercise of employee
stock options
    
    
    6
    
    
    
    14,087
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,093Issuance of 85 shares of common stock
pursuant to the ESPP
    
    
    1
    
    
    
    1,770
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,771Purchase of 3,163 treasury shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (88,187
    )
    
    
    
    
    
    
    
    
    
    
    (88,187
    )Reclassification of deferred equity based
compensation
    
    
    
    
    
    
    (5,506
    )
    
    
    5,506
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Equity based compensation
    
    
    
    
    
    
    9,364
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,364Income tax benefits from equity based
compensation
    
    
    
    
    
    
    2,235
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,235Other
    
    
    (3
    )
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,961
    
    
    
    
    
    
    
    39,961Reclassification adjustment for realized
loss on available-for-sale securities
sold (net of tax benefit of $321)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    547
    
    
    
    547Unrealized gain on available-for-sale
securities (net of tax provision of $105)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    178
    
    
    
    178Cumulative translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,814
    
    
    
    2,814Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,500Balance at December 31, 2006
    
    $
    383
    
    
    $
    389,346
    
    
    
    
    
    
    ($
    100,305
    )
    
    $
    140,434
    
    
    $
    5,638
    
    
    $
    435,496
  F-6




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##### Table of Contents



ATMI, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
  Year Ended December 31,2006
    
    
    2005
    
    
    2004Operating activitiesNet income
    
    $
    39,961
    
    
    $
    30,722
    
    
    $
    31,502Less: income from discontinued operations
    
    
    
    
    
    
    
    
    
    
    11,396Income from continuing operations
    
    
    39,961
    
    
    
    30,722
    
    
    
    20,106Adjustments to reconcile income from continuing operations to cash provided by operating
activities from continuing operations:Depreciation and amortization
    
    
    20,764
    
    
    
    18,527
    
    
    
    17,250Provision for inventory obsolescence
    
    
    1,480
    
    
    
    405
    
    
    
    1,606Deferred income taxes
    
    
    (2,323
    )
    
    
    4,202
    
    
    
    4,130Income tax benefits from stock option exercises
    
    
    2,235
    
    
    
    2,523
    
    
    
    926Excess tax benefit from share-based arrangements
    
    
    (660
    )
    
    
    
    
    
    
    Stock compensation expense
    
    
    9,364
    
    
    
    2,226
    
    
    
    589Impairment of investments
    
    
    260
    
    
    
    379
    
    
    
    4,471Loss from equity method investee
    
    
    361
    
    
    
    310
    
    
    
    Other
    
    
    (222
    )
    
    
    (956
    )
    
    
    (385
    )Changes in operating assets and liabilities:Accounts receivable
    
    
    (7,980
    )
    
    
    (4,294
    )
    
    
    (5,266
    )Inventories
    
    
    (7,749
    )
    
    
    (2,766
    )
    
    
    (16,960
    )Other assets
    
    
    2,579
    
    
    
    4,153
    
    
    
    (9,908
    )Accounts payable
    
    
    8,095
    
    
    
    (5,026
    )
    
    
    4,431Accrued expenses
    
    
    (1,703
    )
    
    
    (4,450
    )
    
    
    11,891Income taxes
    
    
    (2,445
    )
    
    
    (30
    )
    
    
    (1,379
    )Other liabilities
    
    
    15
    
    
    
    (944
    )
    
    
    2,110Cash provided by operating activities of continuing operations
    
    
    62,032
    
    
    
    44,981
    
    
    
    33,612Cash used by operating activities of discontinued operations
    
    
    
    
    
    
    
    
    
    
    (8,220
    )Net cash provided by operating activities
    
    
    62,032
    
    
    
    44,981
    
    
    
    25,392Investing activitiesCapital expenditures
    
    
    (27,560
    )
    
    
    (28,460
    )
    
    
    (16,785
    )Proceeds from the sale of property, plant and equipment
    
    
    362
    
    
    
    428
    
    
    
    Acquisitions and other cost basis and equity basis investments
    
    
    (2,578
    )
    
    
    (7,695
    )
    
    
    (2,136
    )Proceeds from the sale of a cost-basis investment
    
    
    298
    
    
    
    3,116
    
    
    
    Purchases of marketable securities
    
    
    (179,901
    )
    
    
    (150,440
    )
    
    
    (210,746
    )Proceeds from sales or maturities of marketable securities
    
    
    261,790
    
    
    
    127,531
    
    
    
    109,880Other
    
    
    
    
    
    
    
    
    
    
    150Cash used by investing activities of continuing operations
    
    
    52,411
    
    
    
    (55,520
    )
    
    
    (119,637
    )Cash provided by investing activities of discontinued operations
    
    
    
    
    
    
    
    
    
    
    94,776Net cash provided (used) by investing activities
    
    
    52,411
    
    
    
    (55,520
    )
    
    
    (24,861
    )Financing activitiesPayments on loans, notes payable, and capital lease obligations
    
    
    (92
    )
    
    
    (212
    )
    
    
    (1,033
    )Purchases of treasury stock
    
    
    (88,191
    )
    
    
    (11,276
    )
    
    
    Proceeds from exercise of stock options, warrants, and employee stock purchase plan shares
    
    
    15,863
    
    
    
    17,997
    
    
    
    8,349Excess tax benefit from share-based payment arrangements
    
    
    660
    
    
    
    
    
    
    
    Net cash provided by financing activities of continuing operations
    
    
    (71,760
    )
    
    
    6,509
    
    
    
    7,316Effects of exchange rate changes on cash and cash equivalents
    
    
    (38
    )
    
    
    (1,414
    )
    
    
    3,077Increase (decrease) in cash and cash equivalents from continuing operations
    
    
    42,645
    
    
    
    (5,444
    )
    
    
    (75,632
    )Increase in cash and cash equivalents from discontinued operations
    
    
    
    
    
    
    
    
    
    
    86,556Net increase (decrease) in cash and cash equivalents
    
    
    42,645
    
    
    
    (5,444
    )
    
    
    10,924Cash and cash equivalents, beginning of year
    
    
    30,951
    
    
    
    36,395
    
    
    
    25,471Cash and cash equivalents, end of year
    
    $
    73,596
    
    
    $
    30,951
    
    
    $
    36,395SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Non-cash conversion of subordinated notes to equity
    
    $
    
    
    
    $
    115,000
    
    
    $
    Non-cash conversion of unamortized debt issuance costs to equity
    
    $
    
    
    
    $
    (1,333
    )
    
    $
    Non-cash conversion of unpaid interest accrual to equity relating to subordinated notes
    
    $
    
    
    
    $
    2,365
    
    
    $
    Cash interest paid
    
    $
    29
    
    
    $
    34
    
    
    $
    6,131Cash income taxes paid
    
    $
    18,830
    
    
    $
    7,852
    
    
    $
    7,230
  F-7




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##### Table of Contents



ATMI, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. Organization and Summary of Significant Accounting Policies
         F-8




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##### Table of Contents



ATMI, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 1. Organization and Summary of Significant Accounting Policies (continued)
  Revenue Recognition
       F-9




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##### Table of Contents



ATMI, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 1. Organization and Summary of Significant Accounting Policies (continued)
          F-10




---



##### Table of Contents



ATMI, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 1. Organization and Summary of Significant Accounting Policies (continued)
         F-11




---



##### Table of Contents



ATMI, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 1. Organization and Summary of Significant Accounting Policies (continued)
         F-12




---



##### Table of Contents



ATMI, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 1. Organization and Summary of Significant Accounting Policies (continued)
       F-13




---



##### Table of Contents



ATMI, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 1. Organization and Summary of Significant Accounting Policies (continued)
      F-14




---



##### Table of Contents



ATMI, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 1. Organization and Summary of Significant Accounting Policies (continued)
  Year Ended December 31,2005
    
    
    2004Net income, as reported
    
    $
    30,722
    
    
    $
    31,502Add: Total stock-based employee
compensation expense included in
reported net income, net of tax effect
    
    
    1,506
    
    
    
    385Deduct: Total stock-based employee
compensation expense determined under
fair value based method for all awards,
net of tax effect
    
    
    (7,580
    )
    
    
    (8,404
    )Pro forma net income
    
    $
    24,648
    
    
    $
    23,483Income (loss) per share:Basic-as reported
    
    $
    0.86
    
    
    $
    1.01Basic-pro forma
    
    $
    0.69
    
    
    $
    0.75Diluted-as reported
    
    $
    0.85
    
    
    $
    1.00Diluted-pro forma
    
    $
    0.68
    
    
    $
    0.74
      F-15




---



##### Table of Contents



ATMI, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 1. Organization and Summary of Significant Accounting Policies (continued)
   2. Discontinued Operations
          F-16




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##### Table of Contents



ATMI, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 2. Discontinued Operations (continued)
  2004Revenues
    
    $
    83,868Pre-tax income from discontinued operations (1)
    
    $
    17,532Income from operations of discontinued operations,
net of income taxes
    
    $
    3,313Gain on sales of discontinued operations
net of income taxes
    
    $
    8,083
 
 (1)
    
    A gain on sales of discontinued operations of $12.4 million is included in the 2004
results of operations. F-17




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##### Table of Contents



ATMI, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 3. Marketable Securities
  2006
    
    
    2005Gross
    
    
    
    
    
    
    
    
    
    
    GrossUnrealized
    
    
    Estimated
    
    
    
    
    
    
    Unrealized
    
    
    EstimatedCost
    
    
    Gain (Loss)
    
    
    Fair Value
    
    
    Cost
    
    
    Gain (Loss)
    
    
    Fair ValueSecurities in unrealized gain
position:Common stock
    
    $
    971
    
    
    $
    2,227
    
    
    $
    3,198
    
    
    $
    629
    
    
    $
    2,419
    
    
    $
    3,048Government debt
Obligations
    
    
    5,874
    
    
    
    5
    
    
    
    5,879
    
    
    
    
    
    
    
    
    
    
    
    GS (1) debt obligations
    
    
    3,000
    
    
    
    1
    
    
    
    3,001
    
    
    
    
    
    
    
    
    
    
    
    Subtotal
    
    
    9,845
    
    
    
    2,233
    
    
    
    12,078
    
    
    
    629
    
    
    
    2,419
    
    
    
    3,048Securities in unrealized loss
position:Corporate debt obligations
    
    
    26,460
    
    
    
    (153
    )
    
    
    26,307
    
    
    
    110,233
    
    
    
    (889
    )
    
    
    109,344Government debt
Obligations
    
    
    16,924
    
    
    
    (20
    )
    
    
    16,904
    
    
    
    
    
    
    
    
    
    
    
    GS (1) debt obligations
    
    
    27,375
    
    
    
    (157
    )
    
    
    27,218
    
    
    
    57,379
    
    
    
    (769
    )
    
    
    56,610Subtotal
    
    
    70,759
    
    
    
    (330
    )
    
    
    70,429
    
    
    
    167,612
    
    
    
    (1,658
    )
    
    
    165,954Securities at par:Corporate debt obligations
    
    
    10,003
    
    
    
    
    
    
    
    10,003
    
    
    
    26,234
    
    
    
    
    
    
    
    26,234Government debt
Obligations
    
    
    52,960
    
    
    
    
    
    
    
    52,960
    
    
    
    29,950
    
    
    
    
    
    
    
    29,950Subtotal
    
    
    62,963
    
    
    
    
    
    
    
    62,963
    
    
    
    56,184
    
    
    
    
    
    
    
    56,184Total marketable securities
    
    $
    143,567
    
    
    $
    1,903
    
    
    $
    145,470
    
    
    $
    224,425
    
    
    $
    761
    
    
    $
    225,186
 
 (1)
    
    Government Sponsored  EstimatedCost
    
    
    Fair ValueDue in one year or less
    
    $
    120,331
    
    
    $
    120,026Due between one and two years
    
    
    22,265
    
    
    
    22,246142,596
    
    
    
    142,272Common stock
    
    
    971
    
    
    
    3,198$
    143,567
    
    
    $
    145,470
 F-18




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##### Table of Contents



ATMI, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 3. Marketable Securities (continued)
  Less Than 12 Months
    
    12 Months or Greater
    
    TotalUnrealized
    
    
    
    
    
    Unrealized
    
    
    
    
    
    UnrealizedFair Value
    
    Losses
    
    Fair Value
    
    Losses
    
    Fair Value
    
    LossesCorporate debt obligations (1)
    
    $
    2,000
    
    
    
    ($3
    )
    
    $
    24,307
    
    
    
    ($150
    )
    
    $
    26,307
    
    
    
    ($153
    )Government debt obligations (1)
    
    
    16,904
    
    
    
    (19
    )
    
    
    
    
    
    
    
    
    
    
    16,904
    
    
    
    (19
    )GS debt obligations (1)
    
    
    4,985
    
    
    
    (15
    )
    
    
    22,232
    
    
    
    (143
    )
    
    
    27,217
    
    
    
    (158
    )Total
    
    $
    23,889
    
    
    
    ($37
    )
    
    $
    46,539
    
    
    
    ($293
    )
    
    $
    70,428
    
    
    
    ($330
    )
 
 (1)
    
    The unrealized losses on the Companys investments in corporate debt, government debt
obligations, and government sponsored debt obligations were caused by general market interest
rate increases. At December 31, 2006, 31 of the Companys investments are in an unrealized
loss position. The contractual terms of those investments do not permit the issuers to settle
the securities at a price less than the amortized cost of the investment. Because the Company
has the ability and intent to hold those investments until a recovery of fair value, which may
be maturity, the Company does not consider the impairment of those investments to be
other-than-temporary at December 31, 2006. 4. Inventories
  2006
    
    
    2005Raw materials
    
    $
    13,727
    
    
    $
    9,192Work in process
    
    
    1,926
    
    
    
    2,392Finished goods
    
    
    34,039
    
    
    
    30,34049,692
    
    
    
    41,924Excess and obsolescence reserve
    
    
    (2,353
    )
    
    
    (2,074
    )Inventories, net
    
    $
    47,339
    
    
    $
    39,850
  5. Derivative Instruments
  F-19




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##### Table of Contents



ATMI, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 6. Property, Plant and Equipment, Net
  December 31,2006
    
    
    2005Land
    
    $
    1,236
    
    
    $
    1,196Buildings
    
    
    23,452
    
    
    
    22,289Machinery and equipment
    
    
    114,284
    
    
    
    107,285Furniture and fixtures
    
    
    2,915
    
    
    
    3,877Leasehold improvements
    
    
    15,816
    
    
    
    17,563Construction in progress
    
    
    9,003
    
    
    
    7,525166,706
    
    
    
    159,735Accumulated depreciation and amortization
    
    
    (73,987
    )
    
    
    (76,914
    )$
    92,719
    
    
    $
    82,821
    F-20




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##### Table of Contents



ATMI, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 7. Goodwill and Other Intangibles
  Debt Issuance
    
    
    Patents &
    
    
    
    
    
    
    Total OtherGoodwill
    
    
    
    Costs
    
    
    Trademarks
    
    
    Other
    
    
    IntangiblesBalance at January 1, 2004
    
    $
    12,097
    
    
    
    $
    1,557
    
    
    $
    23,695
    
    
    $
    3,927
    
    
    $
    29,179Acquisitions
    
    
    1,568
    (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization
    
    
    
    
    
    
    
    (224
    )
    
    
    (2,513
    )
    
    
    (988
    )
    
    
    (3,725
    )Reclassification to equity upon conversion
    
    
    
    
    
    
    
    (1,333
    )
    
    
    
    
    
    
    
    
    
    
    (1,333
    )Other, including foreign currency translation
    
    
    16
    
    
    
    
    
    
    
    
    (9
    )
    
    
    (24
    )
    
    
    (33
    )Balance at December 31, 2005
    
    $
    13,681
    
    
    
    $
    
    
    
    $
    21,173
    
    
    $
    2,915
    
    
    $
    24,088Amortization
    
    
    
    
    
    
    
    
    
    
    
    (2,526
    )
    
    
    (903
    )
    
    
    (3,429
    )Other, including foreign currency translation
    
    
    53
    
    
    
    
    
    
    
    
    40
    
    
    
    (30
    )
    
    
    10Balance at December 31, 2006
    
    $
    13,734
    
    
    
    $
    
    
    
    $
    18,687
    
    
    $
    1,982
    
    
    $
    20,669
 
 (1)
    
    Represents additional purchase price paid to former shareholders of ESC, Inc. as a
result of earn out targets being met.  Patents &
    
    
    
    
    
    
    Total OtherGoodwill
    
    
    
    Trademarks
    
    
    Other
    
    
    IntangiblesGross Amount as of December 31, 2005
    
    $
    13,681
    
    
    
    $
    27,530
    
    
    $
    6,076
    
    
    $
    33,606Accumulated Amortization
    
    
    
    
    
    
    
    (6,357
    )
    
    
    (3,161
    )
    
    
    (9,518
    )Balance as of December 31, 2005
    
    $
    13,681
    
    
    
    $
    21,173
    
    
    $
    2,915
    
    
    $
    24,088Gross Amount as of December 31, 2006
    
    $
    13,734
    
    
    
    $
    27,570
    
    
    $
    5,969
    
    
    $
    33,539Accumulated Amortization
    
    
    
    
    
    
    
    (8,883
    )
    
    
    (3,987
    )
    
    
    (12,870
    )Balance as of December 31, 2006
    
    $
    13,734
    
    
    
    $
    18,687
    
    
    $
    1,982
    
    
    $
    20,669
 F-21




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##### Table of Contents



ATMI, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 7. Goodwill and Other Intangibles (continued)
  Year
    
    Amount2007
    
    $
    3,2462008
    
    
    2,9342009
    
    
    2,9302010
    
    
    2,3162011
    
    
    1,431Thereafter
    
    
    7,812Total
    
    $
    20,669
 8. Notes Payable
   F-22




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##### Table of Contents



ATMI, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 9. Leases
   OperatingLeases2007
    
    $
    3,7152008
    
    
    2,4402009
    
    
    1,2202010
    
    
    3082011
    
    
    2Thereafter
    
    
    Total minimum lease payments
    
    $
    7,685
 10. Income Taxes
  Year Ended December 31,2006
    
    
    2005
    
    
    2004Domestic
    
    $
    48,763
    
    
    $
    41,127
    
    
    $
    27,497Foreign
    
    
    7,093
    
    
    
    4,257
    
    
    
    2,967Total pre-tax income
    
    $
    55,856
    
    
    $
    45,384
    
    
    $
    30,464
 F-23




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##### Table of Contents



ATMI, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 10. Income Taxes (continued)
  December 31,2006
    
    
    2005
    
    
    2004Current:Federal
    
    $
    15,080
    
    
    $
    7,529
    
    
    $
    4,864State
    
    
    1,410
    
    
    
    948
    
    
    
    173Foreign
    
    
    1,727
    
    
    
    1,937
    
    
    
    1,231Total current
    
    
    18,217
    
    
    
    10,414
    
    
    
    6,268Deferred:Federal
    
    
    (1,896
    )
    
    
    4,600
    
    
    
    3,485State
    
    
    (382
    )
    
    
    (93
    )
    
    
    541Foreign
    
    
    (44
    )
    
    
    (259
    )
    
    
    64Total deferred
    
    
    (2,322
    )
    
    
    4,248
    
    
    
    4,090$
    15,895
    
    
    $
    14,662
    
    
    $
    10,358
  December 31,2006
    
    
    2005Deferred tax assets:Accrued liabilities
    
    $
    4,791
    
    
    $
    5,176Inventory adjustments
    
    
    5,975
    
    
    
    5,600Net operating loss and tax credit carryforwards
    
    
    2,040
    
    
    
    2,390Equity based compensation
    
    
    3,626
    
    
    
    952Other, net
    
    
    36
    
    
    
    16,468
    
    
    
    14,118Valuation allowance
    
    
    (416
    )
    
    
    (591
    )16,052
    
    
    
    13,527Deferred tax liabilities:Depreciation and amortization
    
    
    (7,746
    )
    
    
    (7,494
    )Unrealized gain on marketable securities
    
    
    (703
    )
    
    
    (279
    )Other, net
    
    
    
    
    
    
    (10
    )(8,449
    )
    
    
    (7,783
    )Net deferred tax assets
    
    $
    7,603
    
    
    $
    5,744
   F-24




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##### Table of Contents



ATMI, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 10. Income Taxes (continued)
  For the Year Ended December 31,2006
    
    
    2005
    
    
    2004U.S. statutory rate
    
    $
    19,550
    
    
    $
    15,884
    
    
    $
    10,662State income taxes
    
    
    668
    
    
    
    555
    
    
    
    658Foreign income taxes
    
    
    (722
    )
    
    
    65
    
    
    
    343Tax Exempt Income
    
    
    (949
    )
    
    
    (11
    )
    
    
    (115
    )ETI benefit
    
    
    (1,040
    )
    
    
    (1,637
    )
    
    
    (904
    )Change in valuation allowance of deferred tax assets
    
    
    (20
    )
    
    
    (56
    )
    
    
    (384
    )Adjustment to tax liabilities
    
    
    (1,716
    )
    
    
    
    
    
    
    Other, net
    
    
    124
    
    
    
    (138
    )
    
    
    98$
    15,895
    
    
    $
    14,662
    
    
    $
    10,358
   11. Profit Sharing Plan
  F-25




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##### Table of Contents



ATMI, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 12. Stockholders Equity
  2006
    
    
    2005
    
    
    2004Cost of revenues
    
    $
    910
    
    
    $
    
    
    
    $
    Research and development
    
    
    773
    
    
    
    
    
    
    
    Selling, general and administrative
    
    
    7,681
    
    
    
    2,226
    
    
    
    589Total equity based compensation expense
    
    
    9,364
    
    
    
    2,226
    
    
    
    589Income tax benefit
    
    
    3,137
    
    
    
    720
    
    
    
    204Net equity based compensation expense
    
    $
    6,227
    
    
    $
    1,506
    
    
    $
    385
     # of# of Shares
    
    
    SharesStock Plan
    
    Approved
    
    
    Available1997 Stock Plan (1)
    
    
    900
    
    
    
    1041998 Stock Plan (1)
    
    
    2,000
    
    
    
    4762000 Stock Plan (2)
    
    
    2,000
    
    
    
    2742003 Stock Plan (2)
    
    
    3,000
    
    
    
    1,611Employee Stock Purchase Plan (3)
    
    
    1,000
    
    
    
    316Totals
    
    
    8,900
    
    
    
    2,781
 
 (1)
    
    Exercise prices for ISOs granted under this plan may not be less than 100 percent of
the fair market value for the Companys common stock on the date of grant. Exercise prices
for non-qualified stock options granted under this plan may not be less than 50 percent of the
fair market value for the Companys common stock on the date of grant.(2)
    
    Exercise prices for ISOs and non-qualified stock options granted under this plan may
not be less than 100 percent of the fair market value for the Companys common stock on the
date of grant.(3)
    
    This plan enables all employees to subscribe at six-month intervals to purchase shares
of common stock at the lower of 85 percent of the closing price of the shares on the day
previous to the first day or the last day of each six-month period and is a compensatory plan,
as defined by SFAS No. 123(R). Effective January 1, 2007, this plan has been amended such
that employees may purchase shares at 95 percent of the closing price on the day previous to
the last day of each six-month offering period. Beginning January 1, 2007 this plan is no
longer considered to be compensatory, as defined by SFAS No. 123(R). F-26




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##### Table of Contents



ATMI, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 12. Stockholders Equity (continued)
     2006
    
    2005
    
    2004Stock option grants:Risk free interest rate
    
    
    4.70
    %
    
    
    3.90
    %
    
    
    3.50
    %Expected term, in years
    
    
    6.25
    
    
    
    5.10
    
    
    
    4.50Expected volatility
    
    
    32.4
    %
    
    
    68.3
    %
    
    
    67.1
    %Dividend yield
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
   F-27




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##### Table of Contents



ATMI, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 12. Stockholders Equity (continued)
   Average
    
    
    Average
    
    
    AggregateNumber of
    
    
    Exercise
    
    
    Remaining
    
    
    IntrinsicOptions
    
    
    Price
    
    
    Life
    
    
    ValueOutstanding at December 31, 2005
    
    
    3,556
    
    
    $
    24.02Granted
    
    
    214
    
    
    $
    28.88Exercised
    
    
    (663
    )
    
    $
    21.27Forfeited
    
    
    (346
    )
    
    $
    24.96Outstanding at December 31, 2006
    
    
    2,761
    
    
    $
    24.95
    
    
    
    5.2
    
    
    $
    18,150Exercisable at December 31, 2006
    
    
    1,792
    
    
    $
    25.70
    
    
    
    4.0
    
    
    $
    11,395
    AverageNumber
    
    Grantof
    
    Date FairShares
    
    ValueNonvested at December 31, 2005
    
    
    359
    
    
    $
    22.54Granted
    
    
    260
    
    
    $
    29.23Vested
    
    
    (34
    )
    
    $
    21.87Forfeited
    
    
    (26
    )
    
    $
    24.71Nonvested at December 31, 2006
    
    
    559
    
    
    $
    25.59
  F-28




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##### Table of Contents



ATMI, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 12. Stockholders Equity (continued)
    2006
    
    
    2005
    
    
    2004Numerator:Income from continuing operations
    
    $
    39,961
    
    
    $
    30,722
    
    
    $
    20,106Denominator:Denominator for basic earnings per share-Weighted-average shares
    
    
    36,083
    
    
    
    35,707
    
    
    
    31,247Dilutive effect of employee stock options
    
    
    559
    
    
    
    462
    
    
    
    370Dilutive effect of restricted stock
    
    
    217
    
    
    
    99
    
    
    
    23Dilutive effect of warrants
    
    
    
    
    
    
    8
    
    
    
    10Denominator for diluted earnings per share
    
    
    36,859
    
    
    
    36,276
    
    
    
    31,650Earnings per share from continuing
operations  basic
    
    $
    1.11
    
    
    $
    0.86
    
    
    $
    0.64Earnings per share from continuing
operations  assuming dilution
    
    $
    1.08
    
    
    $
    0.85
    
    
    $
    0.64
  2006
    
    
    2005
    
    
    2004Employee stock options
    
    
    404
    
    
    
    532
    
    
    
    1,921Shares issuable upon conversion of the 5.25%
convertible subordinated notes due November
15, 2006
    
    
    
    
    
    
    
    
    
    
    5,183Total
    
    
    404
    
    
    
    532
    
    
    
    7,104
 F-29




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##### Table of Contents



ATMI, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 12. Stockholders Equity (continued)
     F-30




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##### Table of Contents



ATMI, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 13. Accumulated Other Comprehensive Income
  UnrealizedCurrency
    
    
    Gain (Loss) onTranslation
    
    
    Available-for-Adjustments
    
    
    Sale Securities
    
    
    TotalBalance at January 1, 2004
    
    $
    1,468
    
    
    $
    1,432
    
    
    $
    2,900Reclassification adjustment for realized gain on available-for-sale
securities sold (net of tax provision of $79) (1)
    
    
    
    
    
    
    (129
    )
    
    
    (129
    )Unrealized loss on available-for-sale securities (net of tax benefit of $606)
    
    
    
    
    
    
    (989
    )
    
    
    (989
    )Cumulative translation adjustment
    
    
    3,077
    
    
    
    
    
    
    
    3,077Balance at December 31, 2004
    
    
    4,545
    
    
    
    314
    
    
    
    4,859Reclassification adjustment for realized loss on available-for-sale
securities sold (net of tax benefit of $66) (1)
    
    
    
    
    
    
    113
    
    
    
    113Unrealized gain on available-for-sale securities (net of tax provision of $31)
    
    
    
    
    
    
    53
    
    
    
    53Cumulative translation adjustment
    
    
    (2,926
    )
    
    
    
    
    
    
    (2,926
    )Balance at December 31, 2005
    
    
    1,619
    
    
    
    480
    
    
    
    2,099Reclassification adjustment for realized loss on available-for-sale securities
sold (net of tax benefit of $321) (1)
    
    
    
    
    
    
    547
    
    
    
    547Unrealized gain on available-for-sale securities (net of tax provision of $105)
    
    
    
    
    
    
    178
    
    
    
    178Cumulative translation adjustment
    
    
    2,814
    
    
    
    
    
    
    
    2,814Balance at December 31, 2006
    
    $
    4,433
    
    
    $
    1,205
    
    
    $
    5,638
 
 (1)
    
    Determined based on the specific identification method. 14. Commitments and Contingencies
     F-31




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##### Table of Contents



ATMI, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 14. Commitments and Contingencies (continued)
    15. Geographic Data
  Other
    
    Europe and(In thousands)
    
    U.S.
    
    Taiwan
    
    Japan
    
    South Korea
    
    Pacific Rim
    
    Other
    
    TotalDecember 31, 2006Revenues
    
    $
    103,921
    
    
    $
    67,451
    
    
    $
    46,924
    
    
    $
    36,427
    
    
    $
    37,794
    
    
    $
    33,396
    
    
    $
    325,913Long-lived assets
    
    
    127,657
    
    
    
    4,436
    
    
    
    1,167
    
    
    
    2,774
    
    
    
    99
    
    
    
    5,291
    
    
    
    141,424December 31, 2005Revenues
    
    $
    92,744
    
    
    $
    64,714
    
    
    $
    43,077
    
    
    $
    27,314
    
    
    $
    24,928
    
    
    $
    28,977
    
    
    $
    281,754Long-lived assets
    
    
    127,616
    
    
    
    376
    
    
    
    882
    
    
    
    2,531
    
    
    
    101
    
    
    
    3,543
    
    
    
    135,049December 31, 2004Revenues
    
    $
    86,365
    
    
    $
    54,781
    
    
    $
    40,122
    
    
    $
    18,204
    
    
    $
    21,439
    
    
    $
    25,380
    
    
    $
    246,291Long-lived assets
    
    
    111,349
    
    
    
    467
    
    
    
    917
    
    
    
    2,494
    
    
    
    147
    
    
    
    3,828
    
    
    
    119,202
  F-32




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##### Table of Contents



ATMI, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 16. Quarterly Results of Operations (Unaudited)
  Quarter2006
    
    First
    
    
    Second
    
    
    Third
    
    
    FourthRevenues
    
    $
    76,936
    
    
    $
    82,484
    
    
    $
    82,124
    
    
    $
    84,369Gross profit
    
    
    36,808
    
    
    
    41,942
    
    
    
    41,908
    
    
    
    42,725
    (a)Operating income
    
    
    8,637
    
    
    
    12,649
    
    
    
    12,460
    
    
    
    13,271Net income
    
    $
    7,430
    
    
    $
    10,050
    
    
    $
    11,354
    (b)
    
    $
    11,127Basic income per common share:Net income per common share
    
    $
    0.20
    
    
    $
    0.27
    
    
    $
    0.32
    
    
    $
    0.32Diluted income per common share:Net income per common share
    
    $
    0.20
    
    
    $
    0.27
    
    
    $
    0.31
    
    
    $
    0.312005Revenues
    
    $
    66,097
    
    
    $
    69,269
    
    
    $
    69,736
    
    
    $
    76,652Gross profit
    
    
    34,184
    
    
    
    34,812
    
    
    
    35,141
    
    
    
    37,366Operating income
    
    
    9,466
    
    
    
    10,595
    
    
    
    10,244
    
    
    
    10,104Net income
    
    $
    6,051
    
    
    $
    7,967
    
    
    $
    8,253
    
    
    $
    8,451Basic income per common share:Net income per common share
    
    $
    0.19
    
    
    $
    0.22
    
    
    $
    0.22
    
    
    $
    0.23Diluted income per common share:Net income per common share
    
    $
    0.19
    
    
    $
    0.22
    
    
    $
    0.22
    
    
    $
    0.22
 
 (a)
    
    Includes a $1.4 million gain from a VAT recovery in Japan.(b)
    
    Includes recognition of $1.7 million tax benefit for
adjustment of our tax liabilities as a result of changes in facts and
circumstances. F-33




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##### Table of Contents



Schedule II
 ATMI, INC.
VALUATION AND QUALIFYING ACCOUNTS
 Balance at
    
    
    
    
    
    
    
    
    
    
    Balance atBeginning
    
    
    Charged to
    
    
    
    
    
    
    EndYear Ended
    
    of Period
    
    
    Cost/Expense
    
    
    Deductions
    
    
    of PeriodDecember 31, 2006Allowance for bad debts and returns
    
    $
    695
    
    
    $
    
    
    
    $
    (29
    ) (a)
    
    $
    666Reserve for excess and obsolete
inventories
    
    
    2,074
    
    
    
    1,480
    
    
    
    (1,201
    ) (b)
    
    
    2,353December 31, 2005Allowance for bad debts and returns
    
    $
    701
    
    
    $
    
    
    
    $
    (6
    ) (a)
    
    $
    695Reserve for excess and obsolete
inventories
    
    
    2,796
    
    
    
    405
    
    
    
    (1,127
    ) (b)
    
    
    2,074December 31, 2004Allowance for bad debts and returns
    
    $
    694
    
    
    $
    25
    
    
    $
    (18
    ) (a)
    
    $
    701Reserve for excess and obsolete
inventories
    
    
    3,877
    
    
    
    1,606
    
    
    
    (2,687
    ) (b)
    
    
    2,796
 Notes:
    
    (a) Reflects uncollectible accounts written off, net of recoveries, foreign currency
translation adjustments, and other reductions to the reserve.
  F-34