ATMI, Inc.
ATMI has a packaging division based in Minnesota. They make packaging, or containers, for materials used LCD and Semiconductor chip manufacturing. Everything is manufactured in clean rooms. Recently they outsourced some production to South Korea (incidentally close to Samsung and LG, manufacturers of the majority of LCD production). They saved a ton of money on shipping costs by moving production closer to the client!
The building lease in Bloomington, Minnesota has about 2½ years left. Almost all of the Packaging upper management have quit or been fired in the past 3 years. There are some rumors that Minnesota will be closed just prior to the lease expiration. The engineering aspect has been growing in Toyohashi, Japan. Could this be to take up the burden of when Minnesota closes its doors?
Labor is cheap in Korea, and they probably have better workers than Minnesota. Most of the Minnesota production workers are temporary employees. With a few moves, there will be no need for Minnesota in the Packaging business unit.
How do you play ATMI? Lower costs and faster reaction to customer needs all sound good. But, this is a stock that has flat-lined with increasing revenue. Here is another CEO that should be included on Cramer’s Wall-of-Shame. Doug Neugold has been holding the company back, and a new CEO with the right skills could make this a terrific stock.
PEG = .98
Forward P/E = 153.61
EPS Growth = 21.6%
ATMI Reports Fourth Quarter and Full Year 2007 Financial Results - Feb 6, 2008