Cabot Microelectronics Corporation Reports Results for Second Quarter of Fiscal 2010

Aurora, Illinois, UNITED STATES


  • Record Revenue of $98.6 Million
  • Gross Profit Margin of 50.2 Percent of Revenue
  • Earnings Per Share of 47 Cents
  • Strong Balance Sheet with $242 Million of Cash and No Debt

AURORA, Ill., April 22, 2010 (GLOBE NEWSWIRE) -- Cabot Microelectronics Corporation (Nasdaq:CCMP), the world's leading supplier of chemical mechanical planarization (CMP) polishing slurries and growing CMP pad supplier to the semiconductor industry, today reported financial results for its second quarter of fiscal 2010, which ended March 31.

The company reported a record level of quarterly revenue of $98.6 million for its second fiscal quarter, which represents an increase of 117.1 percent compared to the same quarter last year and an increase of 0.9 percent compared to the prior quarter on continued strong demand for the company's products. The company achieved a gross profit margin of 50.2 percent of revenue in the second fiscal quarter, diluted earnings per share of $0.47, and cash flow from operations of $20.4 million. The company's balance sheet reflects cash and cash equivalents of $241.7 million as of March 31, 2010, and no debt outstanding.

"We are delighted with our strong financial performance this quarter, including our record revenue achievement, in what has historically been a seasonally soft period for the industry and our company. We are particularly proud of our continued strong gross profit margin performance, which we believe reflects solid utilization of our manufacturing capacity, successful execution of productivity initiatives, integration of our Epoch acquisition and continued growth in our CMP pad business," said William Noglows, Chairman and CEO of Cabot Microelectronics. "Over the years, we have consistently executed on our strategies and key initiatives, including investments to increase our presence in Asia, optimize our supply chain, reduce variation in our products and develop a pipeline of CMP solutions that add value for our customers. In our view, the groundwork we have laid steadily over time is paying dividends during the current period of strong industry demand, and we look forward to continuing our strong momentum."

Key Financial Information

Total second fiscal quarter revenue of $98.6 million represents a 117.1 percent increase from the $45.4 million reported in the same quarter last year and a 0.9 percent increase from $97.7 million in the previous quarter. The increase in revenue from the same period last year primarily reflects significantly improved economic and industry conditions. Compared to the prior quarter, sales of CMP polishing pads and slurry for copper and dielectric applications increased, while revenue from the company's other business areas declined.

Gross profit, expressed as a percentage of revenue, was 50.2 percent this quarter, compared to 28.0 percent in the same quarter a year ago and 51.6 percent last quarter. Compared to the year ago quarter, gross profit percentage increased primarily due to increased utilization of the company's manufacturing capacity on significantly higher demand. The decrease in gross profit percentage versus the previous quarter was primarily due to the absence of a $1.6 million raw material supplier credit related to achieving a certain volume threshold, which benefited first fiscal quarter results. Year to date, gross profit represented 50.9 percent of revenue, which is slightly above the upper end of the company's full fiscal year guidance range of 46 to 50 percent of revenue.

Operating expenses, which include research, development and technical, selling and marketing, and general and administrative expenses, were $32.1 million in the second fiscal quarter, or $2.2 million higher than the $30.0 million reported in the same quarter a year ago, driven primarily by higher staffing related costs, travel expenses and professional fees, including costs to enforce the company's intellectual property. These cost increases were partially offset by the absence of certain specific cost items recorded in the second fiscal quarter of 2009, including a $1.5 million write-off of in-process research and development expense related to the company's acquisition of Epoch, a $1.1 million impairment related to certain research and development equipment and a $1.0 million increase in reserve for bad debt expense. Operating expenses were $2.0 million higher than the $30.1 million reported in the previous quarter, mostly due to increased staffing related costs and professional fees, including costs to enforce the company's intellectual property. Year to date, total operating expenses were $62.3 million and the company continues to expect its full year operating expenses to be in the range of $120 million to $125 million for fiscal 2010.

Net income for the quarter was $10.9 million, compared to a net loss of $10.1 million in the same quarter last year and net income of $13.1 million last quarter. The $2.2 million decrease from the prior quarter was primarily due to the absence of a raw material supplier credit and higher operating expenses. 

Diluted earnings per share were $0.47 this quarter, up from a diluted loss per share of $0.44 reported in the second quarter of fiscal 2009 and down from diluted earnings per share of $0.56 reported in the previous quarter.  

CONFERENCE CALL

Cabot Microelectronics Corporation's quarterly earnings conference call will be held today at 9:00 a.m. Central Time. The live conference call will be available via webcast from the company's website, www.cabotcmp.com, or by phone at (800) 573-4842. Callers outside the U.S. can dial (617) 224-4327. The conference code for the call is 19901661. A replay will be available through May 20, 2010 via webcast at www.cabotcmp.com. A transcript of the formal comments made during the conference call will also be available in the Investor Relations section of the company's website.

ABOUT CABOT MICROELECTRONICS CORPORATION

Cabot Microelectronics Corporation, headquartered in Aurora, Illinois, is the world's leading supplier of CMP polishing slurries and growing CMP pad supplier to the semiconductor industry. The company's products play a critical role in the production of advanced semiconductor devices, enabling the manufacture of smaller, faster and more complex devices by its customers. The company's mission is to create value by developing reliable and innovative solutions, through close customer collaboration, that solve today's challenges and help enable tomorrow's technology. Since becoming an independent public company in 2000, the company has grown to approximately 900 employees on a global basis. For more information about Cabot Microelectronics Corporation, visit www.cabotcmp.com or contact Amy Ford, Director of Investor Relations at (630) 499-2600.

The Cabot Microelectronics Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6902

SAFE HARBOR STATEMENT

This news release may include statements that constitute "forward looking statements" within the meaning of federal securities regulations. These forward-looking statements include statements related to: future sales and operating results; company and industry growth, contraction or trends; growth or contraction of the markets in which the company participates; international events or various economic factors; product performance; the generation, protection and acquisition of intellectual property, and litigation related to such intellectual property; new product introductions; development of new products, technologies and markets; the acquisition of or investment in other entities; uses and investment of the company's cash balance; and the construction of facilities by Cabot Microelectronics Corporation. These forward-looking statements involve a number of risks, uncertainties, and other factors, including those described from time to time in Cabot Microelectronics' filings with the Securities and Exchange Commission (SEC), that could cause actual results to differ materially from those described by these forward-looking statements.  In particular, see "Risk Factors" in the company's quarterly report on Form 10-Q for the quarter ended December 31, 2009 and in the company's annual report on Form 10-K for the fiscal year ended September 30, 2009, both filed with the SEC. Cabot Microelectronics assumes no obligation to update this forward-looking information.

CABOT MICROELECTRONICS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited and amounts in thousands, except per share amounts)
           
           
  Quarter Ended Six Months Ended
  March 31, December 31, March 31, March 31, March 31,
  2010 2009 2009 2010 2009
           
Revenue  $ 98,556  $ 97,672  $ 45,399  $ 196,228  $ 108,416
           
Cost of goods sold   49,091  47,264  32,689  96,355  67,000
           
Gross profit  49,465  50,408  12,710  99,873  41,416
           
Operating expenses:          
           
Research, development & technical   12,908  12,581  12,621  25,489  24,735
           
Selling & marketing   6,530  6,322  5,261  12,852  11,234
           
General & administrative   12,699  11,245  10,590  23,944  21,916
           
Purchased in-process research and development  --  --  1,500  --  1,500
           
Total operating expenses  32,137  30,148  29,972  62,285  59,385
           
Operating income (loss)  17,328  20,260  (17,262)  37,588  (17,969)
           
Other income (expense), net  (440)  61  477  (379)  1,353
           
Income (loss) before income taxes  16,888  20,321  (16,785)  37,209  (16,616)
           
Provision (benefit) for income taxes   5,941  7,197  (6,672)  13,138  (6,619)
           
Net income (loss)  $ 10,947  $ 13,124  $ (10,113)  $ 24,071  $ (9,997)
           
           
Basic earnings (loss) per share  $0.47 $0.57 ($0.44) $1.04 ($0.43)
           
Weighted average basic shares outstanding  23,263 23,167 23,107 23,205 23,053
           
           
Diluted earnings (loss) per share  $0.47 $0.56 ($0.44) $1.03 ($0.43)
           
Weighted average diluted shares outstanding  23,485 23,294 23,107 23,367 23,053
 
CABOT MICROELECTRONICS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited and amounts in thousands)
     
  March 31, September 30,
  2010 2009
ASSETS:    
     
Current assets:    
Cash, cash equivalents and short-term investments  $ 241,715  $ 199,952
Accounts receivable, net   54,828  53,538
Inventories, net  47,323  44,940
Other current assets  18,866  18,422
Total current assets 362,732 316,852
     
Property, plant and equipment, net  115,480  122,782
Other long-term assets  75,607  75,510
Total assets  $ 553,819  $ 515,144
     
     
LIABILITIES AND STOCKHOLDERS' EQUITY:    
     
Current liabilities:    
Accounts payable  $ 16,538  $ 15,182
Capital lease obligations  1,252  1,210
Accrued expenses and other current liabilities  31,028  23,144
Total current liabilities 48,818 39,536
     
Capital lease obligations  671  1,308
Other long-term liabilities  3,711  3,571
Total liabilities  53,200  44,415
     
Stockholders' equity  500,619  470,729
Total liabilities and stockholders' equity  $ 553,819  $ 515,144


        

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