Cabot Microelectronics Corporation Provides Update on Second Fiscal Quarter Financial Performance
April 14 2009 - 8:15PM
Business Wire
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, announced today that the global economic
environment continued to adversely affect the company�s financial
results in its second fiscal quarter, which ended March 31, 2009.
Consistent with the overall industry, the company�s revenue
declined significantly in its second fiscal quarter, reflecting the
impact of the global economic recession on demand for electronics,
a correction of excess semiconductor device inventories, and
traditional seasonal weakness. The company expects to report
revenue for its second fiscal quarter in the range of $45 million
to $46 million, or approximately 52 percent lower than in the same
quarter last year, and 28 percent lower than in the prior
quarter.
The unprecedented low demand for the company�s products resulted
in significant underutilization of the company�s manufacturing
capacity, which materially adversely affected quarterly gross
profit. Consequently, the company expects to report gross profit of
around 28 percent of revenue for the second fiscal quarter, and
approximately 38 percent of revenue for the fiscal year to date.
Based on the company�s performance for the first half of the fiscal
year, it no longer expects to achieve gross profit within what had
been its full year guidance range of 46 to 48 percent of revenue
for fiscal 2009.
In addition, the company also expects to report the following
pre-tax, non-recurring expenses; these non-cash items adversely
impacted operating expenses for the second fiscal quarter:
- $1.5 million write-off of
in-process research and development expenses related to its
February 2009 acquisition of Epoch Material Co., Ltd (Epoch), as
required by purchase accounting rules;
- $1.1 million impairment related
to certain research and development equipment; and,
- $1.0 million increase in reserve
for bad debt expense due to of the impact of adverse global
economic conditions on customer collections.
Commenting on results for the quarter, William Noglows, Chairman
and CEO of Cabot Microelectronics Corporation, stated, �The
continued unprecedented economic and industry weakness in January
and February resulted in the lowest quarterly financial results in
the history of our company. While we acted quickly to reduce
expenses, the deceleration of demand for our products outpaced the
cost savings we achieved during the quarter. However, even during
these challenging times, the company generated positive cash flow
from operations for the second fiscal quarter and for the fiscal
year to date. In addition, we are encouraged by trends we see today
in the market. March revenue showed a marked increase from the low
level of January and February, and April orders to date are
significantly higher than in the same period in March. To meet this
increase in demand, most of our manufacturing operations have
recently returned to normal work schedules in contrast to the
shortened schedules we implemented at the beginning of the calendar
year. We are hopeful that the March quarter marked the bottom of
this cycle and that we will begin to benefit from improved economic
and industry conditions in the near future.�
Financial results for the second quarter of fiscal 2009 have not
yet been finalized. Therefore, information regarding this period is
subject to change, and actual results for the quarter may differ
from these preliminary results. The company will release full
financial results for its second fiscal quarter on April 23, and
will host a conference call at 9:00 a.m. Central Time. The
conference call will be available via webcast from
www.cabotcmp.com, or by phone at (866) 730-5765. Callers outside
the U.S. can dial (857) 350-1589. The conference code for the call
is 18663419.
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 and data storage
industries. 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 900 employees on a global
basis, including employees of its Epoch subsidiary. 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, 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,
2008 and in the company's annual report on Form 10-K for the fiscal
year ended September 30, 2008, both filed with the SEC. Cabot
Microelectronics assumes no obligation to update this
forward-looking information.
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