UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

For the quarterly period ended June 30, 2004

For the transition period from                     to                    

Commission file Number: 1-16239

ATMI, Inc.

203-794-1100
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is an accelerated filer (as defined by Rule 12b-2 of the Act). Yes x No o

The number of shares outstanding of the registrant’s common stock as of August 2, 2004 was 31,368,169.

ATMI, INC.
Quarterly Report on Form 10-Q
For the Quarter Ended June 30, 2004

TABLE OF CONTENTS

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

ATMI, Inc.

See accompanying notes.

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ATMI, Inc.

See accompanying notes.

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ATMI, Inc.
Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data)

See accompanying notes.

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ATMI, Inc.

See accompanying notes.

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ATMI, Inc.

1. Basis of Presentation

     The accompanying unaudited consolidated interim financial statements of ATMI, Inc. (“ATMI” or the “Company”) have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X and do not include all of the financial information and disclosures required by GAAP in the United States.

     In the opinion of the management of ATMI, the financial information contained herein has been prepared on the same basis as the audited consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003 (the “Annual Report”), and includes adjustments (consisting of normal recurring adjustments) necessary to present fairly the unaudited quarterly results set forth herein. These unaudited consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2003 included in the Company’s Annual Report. The Company’s quarterly results have, in the past, been subject to fluctuation and, thus, the operating results for any quarter are not necessarily indicative of results for any future fiscal period.

     The consolidated balance sheet at December 31, 2003 has been derived from the audited financial statements at that date, but does not include all of the financial information and disclosures required by GAAP for complete financial statements.

     Certain prior year amounts have been reclassified to conform to the current year’s presentation.

2. Discontinued Operations

     In June 2004, the Company completed the sale of its semiconductor fabrication plant parts cleaning services business, “Fab Services,” for total proceeds of $6.8 million, including $4.9 million of cash, received on July 1, 2004 (included in other current assets in the June 30, 2004 consolidated balance sheet), and a note for the balance. Additional contingent consideration of up to $0.3 million may be received based on the achievement of certain operating targets. A gain of $0.2 million, net of taxes, was recognized on the sale of the Fab Services business.

     In May 2004, the Company completed the sale of its life safety sensors business for total proceeds of $11.0 million, including $0.5 million, which remains in escrow pending the outcome of a review and agreement of assets sold. A gain of $0.2 million, net of taxes, was recognized on the sale of the life safety sensors business.

     In March 2004, the Company completed the sale of its gallium nitride materials business for total proceeds of $10.3 million. A gain of $1.0 million, net of taxes, was recognized on the sale of the gallium nitride materials business.

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     The aggregate gains from the sales of the business units noted above are included in the accompanying statement of operations as a gain on disposal of discontinued operations, net of income taxes. Cash generated from the discontinued operations is recorded in the cash account on the continuing operations balance sheet.

     Revenues and losses from discontinued operations were as follows (in thousands):

     The assets and liabilities of the discontinued operations were as follows (in thousands):

(1) The balance at June 30, 2004 excludes approximately $1.6 million of assets transferred from discontinued operations to continuing operations.

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3. Inventories

     Inventories are comprised of the following (in thousands):

4. Other Intangibles

     Other intangibles consisted of the following (in thousands):

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5. Warranty Accrual

     ATMI’s equipment products are generally sold with a 12 to 24-month warranty period. Parts and labor are covered under the terms of the warranty agreement. The warranty provision is based on historical experience by product type. Changes in the warranty accrual during the first six months of 2004 were as follows (in thousands):

A warranty reserve of approximately $1.1 million related to discontinued operations is included in liabilities held for sale, but is not included in the table above.

6. Stock-Based Compensation

     The Company has several stock-based employee compensation plans, which are described more fully in the Annual Report. The Company accounts for these stock-based compensation plans under the recognition and measurement principles of Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,” and related Interpretations. ATMI has charged to expense approximately $0.06 million and $0.11 million of deferred compensation related to the issuance of restricted shares of ATMI common stock during the three and six-month periods ended June 30, 2004, respectively.

     The following table sets forth the effect on net income (loss) and income (loss) per share if the Company had applied the fair value recognition provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting For Stock-Based Compensation”, to stock-based employee compensation (in thousands, except per share data):

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7. Other Comprehensive Income (Loss)

     The components of other comprehensive income (loss) are as follows (in thousands):

8. Restructuring Charges

     The loss from discontinued operations for the six months ended June 30, 2003 includes a $1.2 million pre-tax charge for costs associated with a restructuring initiative to close a service facility in Colorado Springs, Colorado due to significantly reduced demand subsequent to the shutdown of a large customer facility in the area. The charge relates primarily to asset write offs and lease exit costs. Management expects to pay the remaining lease exit costs by September 2004.

     The following table sets forth the activity in the restructuring accrual, which is included in accrued liabilities, as of June 30, 2004 (in thousands):

9. Commitments and Contingencies

On July 14, 2003, ATMI acquired all of the outstanding capital stock of ESC, Inc. (“ESC”) of Bethlehem, PA, for total proceeds of $16.4 million, net of cash acquired, plus a possible future payment of up to $27.0 million which is contingent on future product revenues through the end of 2005. Of the initial purchase price, $3.6 million remains in escrow in accordance with the purchase agreement in order to secure certain indemnity obligations of the sellers.

On July 11, 2003, ATMI’s subsidiary, Advanced Technology Materials, Inc., filed suit against Praxair, Inc., the parent company of Praxair Electronics, in the United States District Court for the Southern District of New York charging it with infringing two patents ATMI holds for certain gas storage and delivery systems. ATMI is seeking damages and an injunction against Praxair marketing its UpTime system. On December 22, 2003, Praxair, Inc. and Praxair

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Technology, Inc. filed suit against ATMI, Inc. and Advanced Technology Materials, Inc. in the United States District Court for the District of Delaware alleging infringement of three patents owned by Praxair Technology, Inc. related to gas storage and delivery systems. Praxair is seeking damages and an injunction against ATMI marketing its VAC system.

In addition, in the normal course of business, ATMI is involved in various proceedings and claims. Although the Company cannot determine the ultimate outcome of any of these legal proceedings at this time, management, including internal counsel, does not believe that the outcome of these proceedings, individually or in the aggregate, will have a material adverse effect on ATMI’s financial position or results of operations.

10. Subsequent Event

     On July 19, 2004, ATMI completed the sale of its epitaxial services business, which is included in discontinued operations, for total proceeds of $38.0 million, in cash, and a contingent future payment of $3.0 million upon the satisfaction of certain conditions. The Company anticipates recognizing a gain on the disposition of the epitaxial services business in the third quarter of 2004.

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Item 2.

Overview

     The descriptive analysis contained herein compares the financial results of the three months and six months ended June 30, 2004 (“Second Quarter-2004” and “Six Months-2004”, respectively) to the three months and six months ended June 30, 2003 (“Second Quarter-2003” and “Six Months-2003”, respectively).

     ATMI is a leading supplier of materials, materials delivery systems, and high-purity materials packaging products used worldwide in the manufacture of semiconductor devices. ATMI specifically targets the “front-end” semiconductor materials market. This market includes the processes used to convert a bare silicon wafer into a fully functional wafer that contains many copies of a semiconductor device or “chip.” To complete the manufacturing process, this functional wafer is taken through a “back-end” manufacturing process that includes wafer dicing into chips, packaging and testing. ATMI’s customers include many of the leading semiconductor manufacturers in the world.

     During 2003, ATMI announced its intention to exit its non-core businesses. During the first six months of 2004, the Company completed the sale of the following businesses: the gallium nitride materials business for proceeds of $10.3 million and a gain of $1.0 million, net of taxes; the life safety sensors business for proceeds of $11.0 million and a gain of $0.2 million, net of taxes; and the Fab Services business for proceeds of $6.8 million and a gain of $0.2 million, net of taxes. Additionally, ATMI announced the sale of the epitaxial services business for proceeds of $38.0 million and a possible future payment of $3.0 million, which closed on July 19, 2004. The Company intends to complete the sales of the remaining two non-core businesses (the Company’s environmental abatement equipment and smartcard device venture businesses) by the end of 2004.

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Results of Operations

The following table sets forth selected financial data as a percentage of total revenues for the periods indicated:

Revenues

     Revenues increased 52.5% to $61.0 million in the Second Quarter-2004 from $40.0 million in the Second Quarter-2003, primarily due to increased sales of SDS® and photoresist strip products, as well as strong volume sales increases in all other materials products as a result of the increase in wafer starts during this period. In addition, revenues from our high purity packaging business increased primarily as a result of the continued strong capital spending in the integrated circuits (“IC”) market as well as the continuing strength driven by increased production in the flat panel display market. Revenues increased approximately 20.0% in the Second Quarter-2004 as a result of the 2003 acquisitions of the ViaForm® and the ESC product lines, in May and July 2003, respectively.

     Revenues increased 51.9% to $117.0 million in the Six Months-2004 from $77.0 million in the Six Months-2003, primarily due to increased wafer starts driving increased sales of SDS® and photoresist strip products as well as all other materials products. Strength in capital spending in the IC market, volume increases in flat panel display production, and a recovery in dispenser sales also contributed to a significant increase in our high purity packaging business. Revenues increased approximately 20.0% in the Six Months-2004 as a result of the acquisitions of the ViaForm® and the ESC product lines, in May and July 2003, respectively.

Gross Profit

     Gross profit increased 51.4% to $30.7 million in the Second Quarter-2004 from $20.3 million in the Second Quarter-2003. Gross margin remained relatively flat between the Second Quarter-2004 and the Second Quarter-2003 at 50.3% and 50.7%, respectively. The increase in

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gross profit was a result of increased revenues and improved manufacturing efficiencies offset in part by product mix changes within the Company’s materials portfolio. The Second Quarter-2004 included a gain of $0.6 million related to a third party manufacturing agreement, offset by a $0.7 million charge related to excess and obsolete inventories.

     Gross profit increased 50.8% to $57.9 million in the Six Months-2004 from $38.4 million in the Six Months-2003. Gross margin remained relatively flat between the Six Months-2004 and in the Six Months-2003 at 49.5% and 49.9%, respectively. The increase in gross profit was a result of increased revenues and improved manufacturing efficiencies offset in part by product mix changes within our materials portfolio and additional costs incurred to ramp production and expedite shipments of our ST-250™ photoresist strip product to Asia in the first quarter of 2004 as a result of greater than expected demand. The Six Months-2004 included a gain of $0.6 million related to a third party manufacturing agreement, offset by a $0.7 million charge related to excess and obsolete inventories.

Research and Development Expenses

     Research and development expenses increased 12.1% to $4.8 million in the Second Quarter-2004 from $4.3 million in the Second Quarter-2003. This increase was mainly attributable to research and development efforts to support new product development in advanced interconnect and the SDS® product lines, with a specific focus on development of copper applications and the new SDS3 sub-atmospheric gas delivery system. As a percentage of revenues, research and development expenses decreased to 7.8% in the Second Quarter-2004 from 10.7% in the Second Quarter-2003, due to a significant increase in revenues, which is in line with the Company’s long-term target range.

     Research and development expenses increased 12.4% to $9.5 million in the Six Months-2004 from $8.5 million in the Six Months-2003. As noted above, the increase was mainly attributable to research and development efforts to support new product development in advanced interconnect and the SDS® product lines. As a percentage of revenues, research and development expenses decreased to 8.1% in the Six Months-2004 from 11.0% in the Six Months-2003.

Selling, General and Administrative Expenses

     Selling, general and administrative (“SG&A”) expenses increased 28.8% to $16.2 million in the Second Quarter-2004 from $12.6 million in the Second Quarter-2003, primarily related to the increased infrastructure costs related to the ESC and Enthone product lines acquired in 2003 (including amortization expense from intangibles related to the acquisition of the product lines), increased incentive costs based on the improved company performance, and costs associated with defending the Company’s patents. As a percentage of revenues, SG&A expenses decreased to 26.6% in the Second Quarter-2004 from 31.4% in the Second Quarter-2003.

     SG&A expenses increased 26.5% to $31.9 million in the Six Months-2004 from $25.2 million in the Six Months-2003, as a result of the factors noted above. As a percentage of revenues, SG&A expenses decreased to 27.3% in the Six Months-2004 from 32.7% in the Six Months-2003.

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Operating Income

     Operating income increased to $9.7 million in the Second Quarter-2004 from $3.4 million in the Second Quarter-2003, primarily as a result of increased wafer starts driving increased demand for advanced interconnect materials, SDS® and high purity packaging products, and the incremental contribution margin from the ViaForm® and ESC product lines, partially offset by the operating expense increases noted above.

     Operating income increased to $16.5 million in the Six Months-2004 from $4.7 million in the Six Months-2003. Similar to what was noted above in the quarterly explanation, increased wafer starts and increased new materials technology adoption drove increased demand for advanced interconnect materials, SDS® and high purity packaging products and the incremental contribution margin from the ViaForm® and ESC product lines, partially offset by the operating expense increases noted above.

Interest and Other Expense, Net

     Interest and other expense, net, decreased to $0.9 million of expense in the Second Quarter-2004 from $3.4 million of expense in the Second Quarter-2003. This overall decrease primarily reflects a $2.2 million pre-tax asset impairment charge related to the Company’s strategic investment portfolio, which was recognized in the Second Quarter-2003. Due to the fixed interest rate on the convertible debt, interest expense was relatively flat in the Second Quarter-2004 compared to the Second Quarter-2003.

     Interest and other expense, net, decreased to $1.6 million of expense in the Six Months-2004 from $3.4 million of expense in the Six Months-2003. This overall decrease primarily reflects a $2.2 million pre-tax asset impairment charge in Second Quarter-2003 related to the Company’s strategic investment portfolio, partially offset by favorable currency exchange rates. Given the fixed interest rate on the convertible debt, interest expense was relatively flat in the Six Months-2004 compared to the Six Months-2003. Interest income decreased $0.8 million in the Six Months-2004 compared to the Six Months-2003, primarily as a result of lower cash balances in the first quarter of 2004 compared to the first quarter of 2003 due to cash having been used during the second half of 2003 to fund acquisition activities, coupled with lower overall yields on the Company’s cash and marketable securities portfolio in this same comparative period.

Income (Loss) from Operations of Discontinued Operations

     In the Second Quarter-2004, income from operations of discontinued operations, net of income taxes, was $1.7 million, compared to a loss, net of income taxes, of $2.9 million in the Second Quarter-2003. The difference was primarily attributable to the improved contribution margin realized on increased revenues for environmental abatement equipment and the thin-film deposition services driven by increased capital equipment spending and wafer start growth, combined with a favorable product ramp in the Company’s Emosyn smart card venture.

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     In the Six Months-2004, income from operations of discontinued operations, net of income taxes, was $2.8 million, compared to a loss, net of income taxes, of $5.4 million in the Six Months-2003 for the reasons noted above.

Gain on Disposal of Discontinued Operations

     In the Second Quarter-2004, a $0.3 million gain, net of income taxes, was recognized on the disposal of discontinued operations attributable to the sale of the Company’s life safety systems business and Fab Services business.

     In the Six Months-2004, a gain of $1.4 million, net of income taxes, was recognized on the disposal of discontinued operations. The gain was attributable to the sale of the Company’s gallium nitride materials business, life safety systems business and Fab Services business.

Provision (benefit) for Income Taxes

     Provision for income taxes increased to $3.0 million in the Second Quarter-2004 from a benefit of $0.1 million in the Second Quarter-2003, primarily due to higher taxable income. The effective tax rate for the Second Quarter-2004 was 34.0% while a tax benefit was recorded in the Second Quarter-2003, mainly as a result of a $2.2 million pre-tax asset impairment charge relating to the Company’s strategic investment portfolio, as well as to timing of recognition of certain deferred tax items.

     Provision for income taxes increased to $5.1 million in the Six Months-2004 from $0.3 million in the Six Months-2003, primarily due to higher taxable income. The effective tax rate for the Six Months-2004 and the Six Months-2003 was 34.4% and 21.5%, respectively, due primarily to the timing of recognition of certain deferred tax items. As of June 30, 2004, the Company had a net deferred tax asset on its balance sheet of $13.3 million, primarily due to temporary differences and net operating loss and tax credit carry forwards, which are anticipated to be used to offset future taxable income. The minimum amount of future taxable income that needs to be generated to realize the net deferred tax assets is approximately $39.0 million.

Diluted net Earnings (Loss) per Share

     In the Second Quarter-2004, diluted earnings per share was $0.25, which includes $0.06 per share from discontinued operations and a gain of $0.01 per share relating to the sale of the Company’s life safety systems business and Fab Services business. In the Second Quarter-2003, diluted net loss per share was $0.09, all of which was attributable to the discontinued operations. Diluted weighted average shares outstanding were approximately 31.7 million and 31.1 million for the Second Quarter-2004 and the Second Quarter-2003, respectively. The increase in diluted weighted average shares outstanding is primarily the result of the exercise of employee stock options and the issuance of employee stock purchase plan shares.

     In the Six Months-2004, diluted earnings per share was $0.44, which includes $0.09 per share from discontinued operations and a gain of $0.04 per share relating to the sale of the Company’s gallium nitride materials business, life safety systems business and fab services business. In the Six Months-2003, diluted net loss per share was $0.14, which included a loss of

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$0.17 per share from discontinued operations. Diluted weighted average shares outstanding were approximately 31.7 million and 31.0 million for the Six Months-2004 and the Six Months-2003, respectively. The increase in diluted weighted average shares outstanding is primarily the result of the exercise of employee stock options and the issuance of employee stock purchase plan shares.

Liquidity and Capital Resources

     The Company finances its activities principally through cash from operations and the sale of equity. In addition, the Company expects to realize proceeds from the sale of its two remaining discontinued operations, the environmental abatement equipment and smartcard device venture businesses, held for sale in 2004. All of the assets and liabilities associated with the discontinued operations are classified as held for sale in the consolidated balance sheets. The Company’s working capital increased to $265.2 million at June 30, 2004 from $244.9 million at December 31, 2003 as a result of an increase in receivables associated with the proceeds of the sale of the Fab Services business.

     Net cash provided by operating activities of continuing operations increased to $9.3 million for the Six Months-2004 from $0.6 million for the Six Months-2003 primarily as a result of increased operating earnings of the business. Increases in the net working capital accounts associated with increases in inventories for the Company’s copper-based materials products in Asia and liquid packaging products in Japan, increases in accounts receivable, and changes in other net working capital accounts were largely offset by non-cash expenses during the period. Net cash used by operating activities of discontinued operations was approximately $0.2 million and $5.1 million for the Six Months-2004 and Six Months-2003, respectively.

     Net cash used by investing activities of continuing operations was approximately $20.8 million and $19.4 million for the Six Months-2004 and Six Months-2003, respectively. Capital expenditures were $7.3 million and $8.8 million for the Six Months-2004 and Six Months-2003, respectively. The Company invested $2.1 million during the Six Months-2004 to purchase equity in an entity that is a developer of next generation implant materials. The Company had net investments of $11.4 million and net proceeds from the sale of investments of $9.4 million, during the Six Months-2004 and Six Months-2003, respectively. This activity included purchases and sales of marketable securities, consisting mainly of short-term corporate and municipal debt obligations. Net cash provided by investing activities of discontinued operations was approximately $20.8 million for the Six Months-2004, as a result of the proceeds received from the sale of the Company’s gallium nitride materials business and life safety systems business.

     Net cash provided by financing activities of continuing operations was approximately $5.3 million and $2.1 million for the Six Months-2004 and Six Months-2003, respectively, largely as a result of net proceeds received from the exercise of stock options and employee stock purchase plan of $5.7 million and $2.3 million, respectively.

     ATMI believes that the Company’s existing cash and cash equivalents and marketable securities balances, existing sources of liquidity, available lines of credit and anticipated proceeds from disposal of assets and liabilities held for sale will satisfy the Company’s projected working capital and other cash requirements through at least the end of 2004. However,

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management also believes the level of financing available to ATMI is an important competitive factor in its industry, and management may seek additional resources prior to the end of that period. Additionally, management considers, on a continuing basis, potential acquisitions of strategic technologies and businesses complementary to ATMI’s current business. There are no present definitive agreements with respect to any such acquisitions. However, any such transactions may affect ATMI’s future capital needs. The Company’s current undertaking to exit non-core businesses and reduce its exposure to the cyclical capital equipment spending environment may generate additional sources of liquidity and also affect its future capital needs.

Forward-Looking Statements

     This document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may be identified by words such as “anticipate,” “plan,” “believe,” “seek,” “estimate,” “expect,” “could,” “will” and words of similar meanings and include, without limitation, statements about the expected future business and financial performance of ATMI such as financial projections, expectations for demand and sales of new and existing products, market and technology opportunities, business strategies, business opportunities, objectives of management for future operations and semiconductor industry and market segment growth. Forward-looking statements are based on management’s current expectations and assumptions, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially from these expectations and assumptions due to changes in global political, economic, business, competitive, market regulatory and other factors. ATMI undertakes no obligation to update publicly or review any forward-looking statements, whether as a result of new information, future developments or otherwise.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate Risk

     As of June 30, 2004, the Company’s cash and cash equivalents and marketable securities included money market securities, corporate and municipal bond obligations and commercial paper. As of June 30, 2004, an increase of 100 basis points in interest rates would reduce the fair value of our marketable securities portfolio by approximately $0.7 million. Conversely, a similar reduction in interest rates would increase the fair value of our marketable securities portfolio by approximately $0.7 million.

     As of June 30, 2004, the Company had $115.0 million of fixed rate, long-term convertible notes outstanding. Interest rate changes and changes in the value of the Company’s common stock would likely result in changes in the market value of these notes. The fair value of these notes was approximately $152.4 million at June 30, 2004. The Company performs a sensitivity analysis on its fixed rate long-term convertible debt to assess the risk of changes in fair value. The model to determine interest rate sensitivity assumes a hypothetical 100 basis point shift in interest rates, while keeping the price of ATMI’s common stock constant. At June 30, 2004, assuming a 100 basis point increase in interest rates, the fair value of the notes would decrease by $0.4 million. Conversely, a 100 basis point decrease in interest rates at June 30, 2004 would increase the fair value of the notes by $0.6 million. The model to determine equity price sensitivity assumes a hypothetical 10% change in the price of our common stock, while

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keeping the interest rate constant. At June 30, 2004, assuming a 10% increase in the price of ATMI’s common stock, the fair value of the notes would increase by $10.8 million. Conversely, a 10% decrease in the price of ATMI’s common stock would result in the fair value of the notes decreasing by $9.3 million.

Foreign Currency Exchange Risk

     A substantial portion of the Company’s sales are denominated in U.S. dollars and, as a result, the Company has relatively minimal exposure to foreign currency exchange risk with respect to sales made. This exposure may change over time as business practices evolve and could have a material impact on the Company’s financial results in the future. The Company currently utilizes forward exchange contracts to hedge certain Japanese Yen exposures, but does not use any other derivative financial instruments for trading or speculative purposes. At June 30, 2004, ATMI had $3.0 million notional amount of foreign exchange contracts, which are being used to hedge recorded foreign denominated assets. Holding other variables constant, if there were a 10% adverse change in foreign exchange rates for the Japanese Yen, the fair market value of the contracts outstanding at June 30, 2004 would decrease by approximately $0.4 million. The effect of an immediate 10% change in other foreign exchange rates would not be expected to have a material impact on the Company’s future operating results or cash flows.

Changes in Market Risk

     There have been no material quantitative changes in market risk exposure between the fiscal period ended December 31, 2003 and June 30, 2004.

Item 4. Controls and Procedures

     The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of June 30, 2004. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2004. There were no changes in the Company’s internal control over financial reporting during the second quarter of 2004 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II- OTHER INFORMATION

Item 1. Legal Proceedings

     In the normal course of business, ATMI is involved in various proceedings and claims. Although the Company cannot determine the ultimate outcome of any of these legal proceedings at this time, management, including internal counsel, does not believe that the outcome of these proceedings, individually or in the aggregate, will have a material adverse effect on ATMI’s financial position or results of operations.

Item 4. Submission of Matters to a Vote of Security Holders

     On May 25, 2004 the Company held its 2004 Annual Meeting of Stockholders at which the following actions were approved: two Class I directors were elected for a term expiring at the Annual Meeting of Stockholders in 2007, and the appointment of Ernst & Young LLP as the Company’s independent auditors for the fiscal year ending December 31, 2004 was ratified.

     The table below represents the votes tabulated for the election of the two Class I directors:

     The table below represents the votes tabulated for the ratification of Ernst & Young LLP as the Company’s independent auditors for the fiscal year ending December 31, 2004:

Item 5. Other Information

     On July 19, 2004, ATMI completed the sale of its epitaxial services business for total proceeds of $38.0 million, in cash, and a possible future payment of $3.0 million upon the satisfaction of certain conditions. The Company anticipates recognizing a gain on the disposition of this business in the third quarter of 2004.

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Item 6. Exhibits and Reports on Form 8-K

(a)

Exhibits

	10.1		Employment Agreement dated April 29, 2004 by and between ATMI, Inc. and Cynthia L. Shereda.
	31.1		Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2		Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32		Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

	(b)		Reports on Form 8-K:
			During the second quarter of 2004, ATMI filed the following current reports on Form 8-K:

	1.		Current Report on Form 8-K dated April 21, 2004 (filed on April 23, 2004); Items 7 and 12 (attaching a press release announcing the Company’s financial results for the three months ended March 31, 2004).
	2.		Current Report on Form 8-K dated May 7, 2004 (filed on May 7, 2004); Items 5 and 7 (attaching a press release announcing the sale of the Company’s life safety sensors business to City Technology Ltd., part of the First Technologies Group of Companies).
	3.		Current Report on Form 8-K dated June 29, 2004 (filed on July 1, 2004); Items 5 and 7 (attaching a press release announcing that the Company entered into a definitive agreement to sell its specialty silicon epitaxial services business to International Rectifier Corporation.)

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SIGNATURES

     Pursuant to the requirements 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.

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