CCMP CMC Materials Inc

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 second quarter of fiscal 2008, which ended March 31. Total revenue during the second fiscal quarter was $94.5 million, which represents the fourth consecutive quarter of record revenue for the company. Revenue was 22.7 percent higher than the $77.0 million reported in the same quarter last year and 1.2 percent higher than $93.4 million last quarter. The revenue increase versus both prior periods primarily reflects strong demand for the company�s products, as well as strong industry conditions. Sales of slurry for tungsten and dielectric applications increased compared to the year ago quarter, as did revenue from the company�s engineered surface finishes and polishing pad businesses. Revenue from the company�s other business areas declined. The average selling price for the company�s slurry products sold in the second fiscal quarter was 2.8 percent higher than in the same quarter last year and 1.5 percent higher than in the previous quarter. Increases for both periods were mainly driven by a higher-priced product mix and foreign exchange rate effects. Gross profit, expressed as a percentage of revenue, was 44.7 percent this quarter, which was up from 43.9 percent in the same quarter a year ago and down from 47.9 percent last quarter. As expected and discussed at the company�s Annual Meeting of Stockholders on March 4, lower than optimal manufacturing yields in the growing polishing pad business lowered the gross profit percentage for the quarter. Excluding the adverse effect of the polishing pad business, gross profit as a percentage of revenue for the quarter would have been 3.6 percentage points higher. The year over year increase in gross profit was driven primarily by higher manufacturing capacity utilization on the increased level of sales. Partially offsetting the year over year increase, and contributing to the sequential decrease, were higher fixed manufacturing costs and lower pad manufacturing yields. Year to date, gross profit represents 46.3 percent of revenue, which is consistent with the company�s full fiscal year guidance range of 46 to 48 percent of revenue. Operating expenses, consisting of research, development and technical, selling and marketing, and general and administrative expenses, were $32.2 million in the second fiscal quarter. This is above the company�s quarterly guidance range of $27 to $30 million, and is consistent with comments provided by the company at its Annual Meeting. Operating expenses were $3.3 million higher than the $28.9 million reported in the same quarter a year ago, and $3.7 million higher than the $28.5 million reported in the previous quarter. The increase for both periods was driven primarily by higher staffing related costs and professional fees, including costs to enforce the company�s intellectual property. Absent the intellectual property enforcement costs, total operating expenses were within the quarterly operating expense guidance range. Reflecting the company�s strong revenue growth and higher operating expenses, net income for the quarter was $7.9 million, up 76.8 percent from the $4.5 million reported in the same quarter last year. Net income was down 34.9 percent from $12.2 million last quarter due to lower gross profit, including the adverse pad yield impact, and higher operating expenses, including the intellectual property enforcement costs. Diluted earnings per share were $0.34 this quarter, up from $0.19 in the second quarter of fiscal 2007 and down from $0.51 in the previous quarter. �Guided by our strategic initiatives of technology leadership, operations excellence and connecting with customers, we achieved another record revenue quarter, in what has historically been a seasonally soft period for the industry and our company. We are also excited about the rapid pace of growth in our polishing pad business, with revenue up nearly 85 percent from last quarter,� stated William Noglows, Chairman and CEO of Cabot Microelectronics. �Although our overall gross profit percentage this quarter was dampened by lower manufacturing yields in our pads business, which is in the early stages of its life cycle, we are improving the pad manufacturing process to build a robust and profitable new business for the company.� �Execution on our strategic initiatives also led to our achievement on March 18, of Intel�s prestigious Preferred Quality Supplier award for 2007. This represents the second consecutive year that we were recognized for our high product performance, consistent quality and excellent customer support from this important and strategic customer,� said Mr. Noglows. 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) 299-9086. Callers outside the U.S. can dial (617) 786-2903. The conference code for the call is 19213745. A replay will be available through May 22, 2008 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 the most advanced semiconductor devices, enabling the manufacture of smaller, faster and more complex devices by its customers. Since becoming an independent public company in 2000, the company has grown to approximately 800 employees on a global basis. The company's vision is to become the world leader in shaping, enabling and enhancing the performance of surfaces, so the company is leveraging its expertise in CMP slurry formulation, materials and polishing techniques developed for the semiconductor industry and applying it to demanding surface modification applications in other industries where shaping, enabling and enhancing the performance of surfaces is critical to success. For more information about Cabot Microelectronics Corporation, visit www.cabotcmp.com or contact Amy Ford, 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 or trends; growth of the markets in which the company participates; international events; 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, 2007 and in the company�s annual report on Form 10-K for the fiscal year ended September 30, 2007, 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 31,2008 December 31,2007 March 31,2007 March 31,2008 March 31,2007 � Revenue $ 94,488 $ 93,378 $ 76,987 $ 187,866 $ 158,803 � Cost of goods sold 52,212 48,605 43,188 100,817 85,689 � Gross profit 42,276 44,773 33,799 87,049 73,114 � Operating expenses: � Research, development & technical 12,432 11,421 13,481 23,853 25,728 � Selling & marketing 6,907 6,284 5,847 13,191 11,323 � General & administrative 12,856 10,839 9,537 23,695 18,962 � Total operating expenses 32,195 28,544 28,865 60,739 56,013 � Operating income 10,081 16,229 4,934 26,310 17,101 � Other income, net 1,689 1,635 1,260 3,324 2,434 � Income before income taxes 11,770 17,864 6,194 29,634 19,535 � Provision for income taxes 3,828 5,665 1,703 9,493 5,919 � Net income $ 7,942 $ 12,199 $ 4,491 $ 20,141 $ 13,616 � � Basic earnings per share $0.34 $0.51 $0.19 $0.86 $0.57 � Weighted average basic shares outstanding 23,402 23,716 23,708 23,555 23,774 � � Diluted earnings per share $0.34 $0.51 $0.19 $0.85 $0.57 � Weighted average diluted shares outstanding 23,416 23,768 23,718 23,587 23,777 CABOT MICROELECTRONICS CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited and amounts in thousands) � � March 31,2008 September 30,2007 ASSETS: � Current assets: Cash, cash equivalents and short-term investments $ 205,602 $ 212,472 Accounts receivable, net 46,538 52,302 Inventories, net 49,696 37,266 Other current assets 12,010 8,714 Total current assets 313,846 310,754 � Property, plant and equipment, net 124,202 118,454 Other long-term assets 29,416 25,921 Total assets $ 467,464 $ 455,129 � � LIABILITIES AND STOCKHOLDERS' EQUITY: � Current liabilities: Accounts payable $ 17,997 $ 15,859 Capital lease obligations 1,098 1,066 Accrued expenses, income taxes payable and other current liabilities 19,450 19,638 Total current liabilities 38,545 36,563 � Capital lease obligations 3,092 3,608 Other long-term liabilities 2,734 1,754 Total liabilities 44,371 41,925 � Stockholders' equity 423,093 413,204 Total liabilities and stockholders' equity $ 467,464 $ 455,129