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Press Release

Cabot Microelectronics Corporation Reports Results for First Quarter of Fiscal 2012

  Revenue of $102.1 Million

  Gross Profit Margin of 48.3 Percent of Revenue

  EPS of 45 Cents, Including 7 Cent Adverse Effect from Fees Related to Proposed Leveraged Recapitalization

  New Capital Management Initiative Announced in December

AURORA, Ill., Jan. 26, 2012 (GLOBE NEWSWIRE) -- Cabot Microelectronics Corporation (Nasdaq:CCMP), the world's leading supplier of chemical mechanical planarization (CMP) polishing slurries and a growing CMP pad supplier to the semiconductor industry, today reported financial results for its first quarter of fiscal 2012, which ended December 31, 2011.

Total revenue during the first fiscal quarter was $102.1 million, which reflects a decrease of 10.6 percent compared to the same quarter last year and a decrease of 6.9 percent compared to the prior quarter primarily due to continued soft semiconductor industry demand. The company achieved a gross profit margin of 48.3 percent of revenue in the first fiscal quarter and diluted earnings per share of $0.45. Earnings per share for the quarter include an adverse impact of approximately $0.07 per share related to professional fees associated with the company's previously announced proposed leveraged recapitalization with a special cash dividend. The company's balance sheet reflects a cash balance of $293.6 million as of December 31, 2011.

"We begin fiscal 2012 with solid financial results despite continued softness within the industry," said William Noglows, Chairman and CEO of Cabot Microelectronics. "As we expect current industry conditions to persist in the near term, we are managing our business activities accordingly, as reflected by our profitability this quarter, and we will continue to focus on implementing our strategies to strengthen and grow our core CMP consumables business and advance our Engineered Surface Finishes business."

Mr. Noglows continued, "We believe our flexible business model, strong cash flow and global infrastructure assist us in weathering soft demand environments and excelling in stronger markets. As a result, we are able to return value to our shareholders, as demonstrated by the new capital management initiative we announced in December 2011. This initiative includes a proposed leveraged recapitalization of our company with a special cash dividend of $15 per share, or approximately $345 million in total, which we expect to pay during our second fiscal quarter, contingent upon arranging financing acceptable to us, as well as an increase to $150 million in authority under our share repurchase program. We intend to continue to pursue our growth and investment strategies, as we implement our new capital management initiative."

Key Financial Information

Total first fiscal quarter revenue of $102.1 million represents a 10.6 percent decrease from the $114.2 million reported in the same quarter last year and a 6.9 percent decrease from $109.7 million last quarter. The company believes that the decrease in revenue from the same quarter last year and the prior quarter primarily reflect soft demand within the global semiconductor industry.

Gross profit, expressed as a percentage of revenue, was 48.3 percent this quarter, which is slightly above the company's guidance range of 46 to 48 percent of revenue for the full fiscal year. This is lower than the 50.3 percent reported in the same quarter a year ago and higher than 46.4 percent last quarter. Compared to the year ago quarter, gross profit percentage decreased primarily due to lower production volumes and selective price reductions, partially offset by lower variable manufacturing costs. The increase in gross profit percentage versus the previous quarter was primarily due to lower variable and fixed manufacturing costs, and a higher valued product mix, partially offset by lower production volumes.

Operating expenses, which include research, development and technical, selling and marketing, and general and administrative expenses, were $34.0 million in the first fiscal quarter, including professional fees of approximately $2.4 million related to the company's new capital management initiative. Operating expenses were $1.0 million higher than the $33.0 million reported in the same quarter a year ago, driven primarily by the higher professional fees, partially offset by lower staffing related expenses. Operating expenses were $0.1 million lower than the $34.1 million reported in the previous quarter.

Net income for the quarter was $10.4 million, or 36.8 percent lower than the $16.5 million reported in the same quarter last year primarily due to soft demand within the global semiconductor industry and a lower gross profit margin. Compared to $9.3 million in the previous quarter, net income was up 12.1 percent due to a lower effective tax rate, higher gross profit margin and foreign exchange gains included in other income, partially offset by the adverse effect of lower revenue.

Diluted earnings per share were $0.45 this quarter, including an adverse impact of approximately $0.07 as a result of professional fees related to the company's new capital management initiative. This is down from $0.71 reported in the first quarter of fiscal 2011 and up from $0.40 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 conference call will be available via live webcast and replay from the company's website, www.cabotcmp.com, or by phone at (866) 788-0540. Callers outside the U.S. can dial (857) 350-1678. The conference code for the call is 14154096. 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 a 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 1,000 employees on a global basis. For more information about Cabot Microelectronics Corporation, visit www.cabotcmp.com or contact Trisha Tuntland, Manager 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: whether the conditions to the proposed recapitalization transaction, including the declaration and payment of the special cash dividend, will be satisfied, including whether the company will obtain debt financing under terms and conditions acceptable to the company; whether the recapitalization transaction will occur on the terms described in the company's filings or at all, and the timing of any such recapitalization transaction; 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, regulatory or legislative activity, 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; natural disasters; the acquisition of or investment in other entities; uses and investment of the company's cash balance; financing facilities and related availability and terms; the company's capital structure; and the construction and operation 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 annual report on Form 10-K for the fiscal year ended September 30, 2011, 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
                                                      December 31,
    2011     September 30,
    2011     December 31,
    2010
                                                                                                                             
                                           Revenue               $ 102,122                $ 109,731               $ 114,205
                                                                                                                             
                              Cost of goods sold                    52,843                    58,814                   56,774
                                                                                                                             
                                     Gross profit                   49,279                    50,917                   57,431
                                                                                                                             
                               Operating expenses:                                                                            
                                                                                                                             
              Research, development & technical                    13,755                    14,687                   13,856
                                                                                                                             
                            Selling & marketing                     7,336                     7,702                    7,480
                                                                                                                             
                       General & administrative                    12,901                    11,677                   11,676
                                                                                                                             
                         Total operating expenses                   33,992                    34,066                   33,012
                                                                                                                             
                                  Operating income                   15,287                    16,851                   24,419
                                                                                                                             
                       Other income (expense), net                       65                     (873)                    (935)
                                                                                                                             
                        Income before income taxes                   15,352                    15,978                   23,484
                                                                                                                             
                      Provision for income taxes                     4,937                     6,689                    6,992
                                                                                                                             
                                       Net income                $ 10,415                  $ 9,289                $ 16,492
                                                                                                                             
                                                                                                                             
                        Basic earnings per share                     $ 0.46                     $ 0.41                    $ 0.73
                                                                                                                             
       Weighted average basic shares outstanding                     22,508                     22,816                    22,710
                                                                                                                             
                      Diluted earnings per share                     $ 0.45                     $ 0.40                    $ 0.71
                                                                                                                             
     Weighted average diluted shares outstanding                     22,926                     23,191                    23,131
                                                    
                                                                                                          
                                                                         CABOT MICROELECTRONICS CORPORATION
                                                                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                                                       (Unaudited and amounts in thousands)
                                                                                                          
                                                                                                        
                                                          December 31,
    2011     September 30,
    2011
                                               ASSETS:                                                   
                                                                                                        
                                       Current assets:                                                   
                            Cash and cash equivalents               $ 293,628                $ 302,546
                           Accounts receivable, net                    50,432                    52,747
                                     Inventories, net                   57,747                    56,128
                                 Other current assets                   13,704                    18,984
                                 Total current assets                   415,511                    430,405
                                                                                                        
                    Property, plant and equipment, net                  129,783                   130,791
                                Other long-term assets                   67,978                    67,033
                                         Total assets               $ 613,272                $ 628,229
                                                                                                        
                                                                                                        
                 LIABILITIES AND STOCKHOLDERS' EQUITY:                                                   
                                                                                                        
                                  Current liabilities:                                                   
                                     Accounts payable                $ 19,434                 $ 22,436
                            Capital lease obligations                        9                        10
       Accrued expenses and other current liabilities                   19,499                    33,104
                            Total current liabilities                    38,942                     55,550
                                                                                                        
     Capital lease obligations, net of current portion                       --                         2
                           Other long-term liabilities                    6,757                     6,323
                                    Total liabilities                   45,699                    61,875
                                                                                                        
                                  Stockholders' equity                  567,573                   566,354
           Total liabilities and stockholders' equity               $ 613,272                $ 628,229
CONTACT: Trisha Tuntland
         Manager, Investor Relations
         (630)499-2600

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Cabot Microelectronics Corporation