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 2009, which ended March 31. These results
are consistent with those provided in the company�s press release
of April 14, 2009.
Total revenue during the second fiscal quarter was $45.4
million, which reflects the adverse affect of the ongoing global
recession. This represents a 52.0 percent decline from the same
quarter last year and a 28.0 percent decrease compared to the prior
quarter. The unprecedented low demand for the company�s products
led to significant underutilization of the company�s manufacturing
capacity, resulting in gross profit of 28 percent of revenue and a
net loss of $10.1 million for the quarter. Despite the challenging
environment, the company generated positive cash flow from
operations for the second fiscal quarter and for the fiscal year to
date. Reflecting the company�s $66 million payment for the
acquisition of Epoch Material Co., Ltd (Epoch) in February 2009,
its cash balance totaled $159.0 million as of March 31, 2009 and
the company has no outstanding debt.
�The negative impact of the global economy continued to affect
our results this quarter, as the cost savings we achieved across
our business were more than offset by the steep decline in demand
for our products. However, we are encouraged by recent signs of an
upturn in our business. Demand for our products increased markedly
in March from the record lows of January and February, and orders
to date in April are significantly higher than in the same period
in March. In response, most of our manufacturing operations have
recently returned to normal work schedules from the shortened
schedules we implemented earlier this year,� said William Noglows,
Chairman and CEO of Cabot Microelectronics. �Despite experiencing
the toughest economic and industry environments in our company�s
history, our strong business model of relatively high margin
products and limited capital intensity enabled us to generate
positive cash flow from operations in both the second fiscal
quarter and for the first half of the fiscal year. We believe our
business model, coupled with our strong balance sheet, has allowed
us to withstand the current economic downturn while continuing to
execute on strategic opportunities aimed at positioning the company
for continued long-term success. For example, during the quarter we
closed on our acquisition of Epoch and also completed installation
of our on-site pad finishing capability at TSMC.�
Key Financial
Information
Total second fiscal quarter revenue of $45.4 million represents
a 52.0 percent decrease from the $94.5 million reported in the same
quarter last year and a 28.0 percent decrease from $63.0 million in
the prior quarter. The overall decrease in revenue primarily
reflects the adverse impact of the global economic recession on
demand for electronics, a correction of excess semiconductor device
inventories and traditional seasonal weakness. Quarterly revenue
for each of the company�s business areas declined both
year-over-year and sequentially, with the exception of revenue from
its data storage slurry products, which increased significantly
from the prior quarter.
Gross profit, expressed as a percentage of revenue, was 28.0
percent this quarter, compared to 44.7 percent in the same quarter
a year ago and 45.6 percent in the prior quarter. The significantly
lower gross profit percentage this quarter resulted primarily from
unprecedented underutilization of the company�s manufacturing
capacity. Year to date, gross profit represented 38.2 percent of
revenue. As stated in the company�s press release on April 14, the
company no longer expects to achieve gross profit within its
previous full year guidance range of 46 to 48 percent of revenue
for fiscal year 2009.
Operating expenses, which include research, development and
technical, selling and marketing, and general and administrative
expenses, were $30.0 million, and were adversely affected by the
following specific, pre-tax expenses:
- A $1.5 million write-off of
in-process research and development expenses related to the
company�s acquisition of Epoch, subject to finalization of purchase
accounting;
- A $1.1 million impairment
related to certain research and development equipment; and,
- A $1.0 million increase in
reserve for bad debt expense due to the impact of adverse global
economic conditions on customer collections.
Excluding these specific items, operating expenses would have
been $26.4 million in the second fiscal quarter. This compares to
$32.2 million reported in the same quarter a year ago and $29.4
million in the previous quarter. On this basis, the decline from
both previous periods was primarily driven by lower staffing
related costs, professional fees and travel expenses.
The company expects its full year operating expenses to be in
the range of $115 million to $120 million for fiscal 2009. This
guidance range includes the specific items described above and
reflects actions the company has taken this fiscal year to improve
its operating effectiveness. In addition, it includes Epoch�s
operating expenses and related synergies of the combined
organization, which were excluded from the company�s previous
guidance range for operating expenses.
Net loss for the quarter was $10.1 million, down from net income
of $7.9 million in the same quarter last year and $0.1 million in
the prior quarter, primarily due to the significantly lower level
of revenue and accompanying lower gross profit percentage, both
driven by the global economic downturn.
Diluted loss per share was $0.44 this quarter, down from diluted
earnings per share of $0.34 reported in the second quarter of
fiscal 2008 and $0.01 reported in the previous quarter. The adverse
specific operating expenses described above accounted for
approximately 10 cents of the diluted loss per share for the
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 (866) 730-5765.
Callers outside the U.S. can dial (857) 350-1589. The conference
code for the call is 18663419. A replay will be available through
May 21, 2009 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 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 newly acquired 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.
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.
�
CABOT MICROELECTRONICS CORPORATION CONSOLIDATED
STATEMENTS OF INCOME (LOSS) (Unaudited and amounts in
thousands, except per share amounts) � � � � � � � � Quarter Ended
Six Months Ended March 31, December 31, March 31, March 31, March
31, 2009 2008 2008 2009 2008 � Revenue $ 45,399 $ 63,017 $ 94,488 $
108,416 $ 187,866 � Cost of goods sold � 32,689 � � 34,311 � �
52,212 � 67,000 � � 100,817 � Gross profit 12,710 28,706 42,276
41,416 87,049 � Operating expenses: � Research, development &
technical 12,621 12,114 12,432 24,735 23,853 � Selling &
marketing 5,261 5,973 6,907 11,234 13,191 � General &
administrative 10,590 11,326 12,856 21,916 23,695 � Purchased
in-process research and development � 1,500 � � - � � - � 1,500 � �
- � Total operating expenses � 29,972 � � 29,413 � � 32,195 �
59,385 � � 60,739 � Operating income (loss) (17,262 ) (707 ) 10,081
(17,969 ) 26,310 � Other income, net � 477 � � 876 � � 1,689 �
1,353 � � 3,324 � Income (loss) before income taxes (16,785 ) 169
11,770 (16,616 ) 29,634 � Provision (benefit) for income taxes �
(6,672 ) � 53 � � 3,828 � (6,619 ) � 9,493 � Net income (loss) $
(10,113 ) $ 116 � $ 7,942 $ (9,997 ) $ 20,141 � � Basic earnings
(loss) per share � ($0.44 ) $ 0.01 � $ 0.34 � ($0.43 ) $ 0.86 �
Weighted average basic shares outstanding � 23,107 � � 23,020 � �
23,402 � 23,053 � � 23,555 � � Diluted earnings (loss) per share �
($0.44 ) $ 0.01 � $ 0.34 � ($0.43 ) $ 0.85 � Weighted average
diluted shares outstanding � 23,107 � � 23,026 � � 23,416 � 23,053
� � 23,587 � � � � �
CABOT MICROELECTRONICS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited and amounts
in thousands) � March 31, September 30, 2009 2008 ASSETS: � Current
assets: Cash, cash equivalents and short-term investments $ 158,971
$ 226,417 Accounts receivable, net 28,327 41,630 Inventories, net
52,764 47,466 Other current assets � 20,157 � 15,079 Total current
assets 260,219 330,592 � Property, plant and equipment, net 125,788
115,843 Other long-term assets � 84,989 � 31,002 Total assets $
470,996 $ 477,437 � � LIABILITIES AND STOCKHOLDERS' EQUITY: �
Current liabilities: Accounts payable $ 9,312 $ 13,885 Capital
lease obligations 1,169 1,129 Accrued expenses, income taxes
payable and other current liabilities � 12,535 � 22,787 Total
current liabilities 23,016 37,801 � Capital lease obligations 1,923
2,518 Other long-term liabilities � 9,992 � 2,885 Total liabilities
34,931 43,204 � Stockholders' equity � 436,065 � 434,233 Total
liabilities and stockholders' equity $ 470,996 $ 477,437
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