UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

For the quarterly period ended March 31, 2005

For the transition period from __________ to __________

Commission file Number: 1-16239

ATMI, Inc.

203-794-1100

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

The number of shares outstanding of the registrant’s common stock as of May 4 , 2005 was 37,147,883

ATMI, INC.
Quarterly Report on Form 10-Q
For the Quarter Ended March 31, 2005

TABLE OF CONTENTS

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PART I — FINANCIAL INFORMATION

ATMI, Inc.

See accompanying notes.

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ATMI, Inc.

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 Form 10-K, 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 December 31, 2004 audited consolidated financial statements and notes thereto included in the Company’s Form 10-K. 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, 2004 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 2004, the Company significantly reduced its exposure to the capital equipment cycles of the semiconductor industry by selling the following non-core product lines: environmental abatement equipment, materials sensing and monitoring equipment, epitaxial services, outsourced parts cleaning and tool maintenance services, our smartcard device venture and gallium nitride materials. In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, the Company accounted for these product lines as discontinued operations. The operating results for these product lines, and the gain on sale of the gallium nitride materials product line, which was sold in the three month period ended March 31, 2004, are shown as discontinued operations in the consolidated statement of income for the three-month period ended March 31, 2004.

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Revenues and income from discontinued operations were as follows for the three months ended March 31, 2004 (in thousands):

3. Inventories

     Inventories are comprised of the following (in thousands):

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4. Goodwill and Other Intangibles

     Goodwill and Other intangibles consisted of the following at March 31, 2005 and 2004 (in thousands):

     Changes in carrying amounts of Goodwill and Other intangibles for the three months ended March 31, 2005 were as follows (in thousands):

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 three months of 2005 were as follows (in thousands):

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6. Earnings Per Share

     The following table presents the computation of basic and diluted earnings per share from continuing operations (in thousands, except per share data):

     The following have been excluded from the calculation of weighted average shares outstanding—assuming dilution because their impact is antidilutive (in thousands):

     The Company issued 204,250 shares of common stock as a result of exercises by employees under its employee stock option plans during the first quarter-2005. The Company issued 183,123 shares of common stock as a result of exercises by employees under the employee stock option plans during the first quarter-2004.

7. Stock-Based Compensation

     The Company has several stock-based employee compensation plans, which are described more fully in ATMI’s December 31, 2004 Annual Report on Form 10-K. 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.

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     In January 2005, the Company awarded 275,498 shares of restricted common stock to key executives and non-employee directors. The grant date fair value of the restricted stock issued was $21.87 per share. The restrictions on sale of 102,641 of the shares awarded in January 2005 lapse 33.3% on each of the three subsequent anniversary dates of the grant. The restrictions on sale of the remaining 172,857 shares awarded in January 2005 lapse as follows: 50% on the third anniversary date of grant and 25% on each of the fourth and fifth anniversary dates of grant. Upon issuance of the restricted shares, unearned compensation equivalent to the market value of ATMI, Inc. common stock at the date of grant of approximately $6.0 million was recorded as deferred compensation in stockholders’ equity and is being charged to expense over the appropriate vesting periods of the awards.

     In the first quarter of 2004, the Company awarded 50,494 shares of restricted common stock to key executives and non-employee directors. The weighted-average grant date fair value of the restricted stock issued in the first quarter of 2004 was $23.40 per share. The restrictions on sale of the awards lapse as follows: 50% on the third anniversary date of grant and 25% on each of the fourth and fifth anniversary dates of grant. Upon issuance of the restricted shares, unearned compensation equivalent to the market value of ATMI, Inc. common stock at the date of grant of approximately $1.2 million was recorded as deferred compensation in stockholders’ equity and is being charged to expense over the vesting period.

     ATMI recognized approximately $0.6 and $0.1 million of stock-based compensation expense during the three months ended March 31, 2005 and 2004.

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

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8. Other Comprehensive Income

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