Cabot Microelectronics Corporation (Nasdaq:CCMP), the world's
leading supplier of chemical mechanical planarization (CMP)
polishing slurries to the semiconductor industry, today reported
financial results for its first quarter of fiscal 2006, which ended
December 31, 2005. Total revenue for the first fiscal quarter was
$81.5 million, up 10.3% from $73.9 million in the prior quarter and
up 21.5% from $67.1 million in the first quarter a year ago. This
was the second consecutive quarter in which the company's revenue
grew by more than ten percent. Slurry revenues for copper, tungsten
and dielectric applications all increased sequentially. Average
selling price fell by 1.1% compared with the prior quarter,
primarily due to selected price reductions and the effect of the
weakening Japanese yen, partially offset by a higher-priced product
mix. Gross profit for the quarter was $38.4 million, up 11.0% from
$34.6 million in the prior quarter and up 14.4% from $33.6 million
in the same quarter a year ago. As a percentage of revenue, gross
profit was 47.2% this quarter compared with 46.9% reported for last
quarter and 50.1% in the same quarter last year. Gross profit
expressed as a percentage of revenue rose this quarter primarily
due to higher capacity utilization and lower fixed manufacturing
costs, partially offset by certain higher variable manufacturing
costs, including costs to resolve a quality issue related to a
dielectric product. Operating expenses of $25.1 million, consisting
of research and development, selling and marketing, and general and
administrative expense, increased by $1.1 million sequentially from
$24.0 million last quarter, and were $5.7 million higher than $19.4
million in the same quarter last year. The sequential increase in
operating expenses was primarily due to the commencement this
quarter, as required by accounting rules, of the inclusion of stock
option expense. The company recorded total stock option expense of
$2.4 million this quarter, of which $2.2 million was included in
operating expenses. This was partially offset by lower costs in
certain areas, including cleanroom materials and laboratory
supplies for research and development activities. Net income for
the quarter was $9.6 million, up 16.0% from $8.3 million last
quarter, despite the inclusion this quarter of stock option
expense. Net income in the same quarter last year was $9.8 million.
Diluted earnings per share were $0.39 this quarter, up from $0.34
in the previous quarter, even with the adverse impact of
approximately $0.07 of stock option expense. Earnings per share in
the first quarter of fiscal 2005 were $0.40. "We are pleased with
our strong revenue growth and profitability this quarter,
especially given the adverse impact of stock option expensing,"
stated William Noglows, Chairman and CEO of Cabot Microelectronics.
"This strong start to the fiscal year reflects an upturn in the
semiconductor industry, but we believe it also results from the
steps we've taken over the last two years to strengthen and grow
our core CMP business. We expect to continue executing our
strategic initiatives of technology leadership, operations
excellence and getting closer to our customers in the coming year.
We also plan to make further progress on our Engineered Surface
Finishes initiative to deliver revolutionary performance to
customers outside of our core CMP business by leveraging our
capability to modify surfaces at an atomic level." 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) 893-3008 with
access code 4017819; callers outside the U.S. can dial (706)
634-5531. A replay will be available through February 24, 2006 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 slurries used in semiconductor and data storage
manufacturing. The company's products play a critical role in the
production of advanced semiconductor devices, enabling its
customers to manufacture smaller, faster and more complex devices.
As the company continues investing in its core CMP business, it is
also looking beyond the semiconductor industry to pursue its vision
to "be the world leader in shaping, enabling and enhancing the
performance of surfaces". For more information about Cabot
Microelectronics Corporation visit www.cabotcmp.com or contact
Barbara A. Ven Horst, Director of Investor Relations at (630)
499-2600. 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 and trends, growth of the
markets in which the company participates, international events,
product performance, new product introductions, development of new
products, technologies and markets, the acquisition of or
investment in other entities, and the construction of new
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 "Risks Relating to Our Business" in
Managements' Discussion and Analysis in our Annual Report on Form
10-K for the fiscal year ended September 30, 2005, filed with the
SEC. Cabot Microelectronics Corporation assumes no obligation to
update this forward looking information. -0- *T CABOT
MICROELECTRONICS CORPORATION CONSOLIDATED STATEMENTS OF INCOME
(Unaudited and amounts in thousands, except per share amounts)
Quarter Ended ----------------------------------------- December
31, September 30, December 31, 2005 2005 2004 -------------
------------- ------------- Revenue $81,488 $73,861 $67,084 Cost of
goods sold 43,051 39,234 33,472 ------------- -------------
------------- Gross profit 38,437 34,627 33,612 Operating expenses:
Research and development 11,659 12,147 9,544 Selling and marketing
5,026 4,863 4,176 General and administrative 8,410 7,029 5,580
Amortization of intangibles 4 - 85 ------------- -------------
------------- Total operating expenses 25,099 24,039 19,385
------------- ------------- ------------- Operating income 13,338
10,588 14,227 Other income, net 716 833 487 -------------
------------- ------------- Income before income taxes 14,054
11,421 14,714 Provision for income taxes 4,483 3,169 4,885
------------- ------------- ------------- Net income $9,571 $8,252
$9,829 ============= ============= ============= Basic earnings per
share $0.39 $0.34 $0.40 ============= ============= =============
Weighted average basic shares outstanding 24,363 24,459 24,638
============= ============= ============= Diluted earnings per
share $0.39 $0.34 $0.40 ============= ============= =============
Weighted average diluted shares outstanding 24,363 24,460 24,721
============= ============= ============= Line items above include
the following amounts related to share-based compensation expense:
Cost of goods sold $150 $- $- Research and development 233 - -
Selling and marketing 245 - - General and administrative 1,762 - -
Provision for income taxes (762) - -
----------------------------------------- Net income $1,628 $- $-
============= ============= ============= CABOT MICROELECTRONICS
CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited and
amounts in thousands) December 31, September 30, 2005 2005
------------- ------------- ASSETS: Current assets: Cash, cash
equivalents, and short-term investments $178,710 $171,041 Accounts
receivable, net 42,486 36,759 Inventories, net 24,460 28,797 Other
current assets 7,610 9,210 ------------- ------------- Total
current assets 253,266 245,807 Property, plant and equipment, net
134,044 135,784 Other long-term assets 5,399 5,172 -------------
------------- Total assets $392,709 $386,763 =============
============= LIABILITIES AND STOCKHOLDERS' EQUITY: Current
liabilities: Accounts payable $16,565 $10,236 Capital lease
obligations 1,190 1,170 Accrued expenses, income taxes payable and
other current liabilities 18,667 24,216 ------------- -------------
Total current liabilities 36,422 35,622 Capital lease obligations
5,188 5,436 Deferred income taxes and other long-term liabilities
5,772 6,621 ------------- ------------- Total liabilities 47,382
47,679 Stockholders' equity 345,327 339,084 -------------
------------- Total liabilities and stockholders' equity $392,709
$386,763 ============= ============= *T
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