I was doing a little math the other day around ATMI's claim to be a growth company. I'm sure Neugold is breathing a sigh of relief that the recession took the spotlight off of his inability to deliver growth the last year + (on top of every year since he's run the company), but sooner or later he'll bring the kool-aid back out.

Assuming as the industry recovers they get back to around $350M in revenue and they still say they're going to grow at 2x wafer starts, I was wondering if that is even possible. When starts were growing at about 7-8%, ATMI's target was roughly 15%, or about $53M on that level of revenue. Giving them the benefit of the doubt that half of that is from organic growth (but a 1:1 organic growth rate with wafer starts isn't really true), they'd have to grow $26M or so in that specific year from new products, or new business. As far as I can remember, I've only heard about their new products being delayed, not about them taking off. Also, considering they are third or fourth tier on the technologies they do sell, I can't imagine the market leaders sitting by and letting these guys take their share.

Also, huge (incorrect) assumption on the organic revenue growing 1:1 with wafer starts. No matter what, sometimes customers get price decreases (ever heard of computer prices going up?), customers optimize their raw material usage downward to leverage the profitability on their own expansion, fabs close, etc.

What's the conclusion? This isn't a growth company. It is impossible - the analysts that have seen through this crap for years have always been right on. Doesn't take a genius to figure out that a low level technology player in a maturing market isn't going to grow at 2X the rate of market expansion. So, what has ATMI been doing with their balance sheet during the last several years of unprecedented expansion in their market? Of course, we do have to give Neugold credit for one thing - destroying shareholder value.