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
first quarter of fiscal 2010, which ended December 31, 2009.
The company reported a record level of quarterly revenue of
$97.7 million for its first fiscal quarter, which represents an
increase of 55.0 percent compared to the same quarter last year and
an increase of 1.2 percent compared to the prior quarter, on
continued strong demand for the company’s products, particularly
from manufacturers of memory devices. The company achieved a gross
profit margin of 51.6 percent of revenue in the first fiscal
quarter, diluted earnings per share of $0.56, which represents a
record when compared to historical results that are adjusted to
include share-based compensation expense, and cash flow from
operations of $27.2 million. The company’s balance sheet reflects a
balance of cash and cash equivalents of $224.8 million as of
December 31, 2009, and no debt outstanding.
“We are delighted with our outstanding financial performance
this quarter, which we believe reflects solid execution on our
strategies and key initiatives, combined with a continued strong
industry environment. This quarter represents the company’s third
successive quarter of solid financial results following the severe
downturn in the first half of fiscal 2009,” said William Noglows,
Chairman and CEO of Cabot Microelectronics. “With semiconductor
device inventories at relatively low levels and bullish outlooks
reported from a number of our customers, we are optimistic about
the continued strength of semiconductor device demand in calendar
2010. Additionally, we are commercializing innovative new products
that we believe will further build upon our positive momentum. In
recognition of our high-performance slurry and pad products and the
associated strong support we provide, we were honored once again to
receive a Supplier Excellence Award from Taiwan Semiconductor
Manufacturing Company, which we believe affirms our commitment to
close collaboration with our customers and paves the way for future
opportunities.”
Key Financial
Information
Total first fiscal quarter revenue of $97.7 million represents a
55.0 percent increase from the $63.0 million reported in the same
quarter last year and a 1.2 percent increase from $96.5 million
last quarter. The increase in revenue from the same period last
year primarily reflects significantly improved economic and
industry conditions, as well as contributions from Epoch Material
Co. Ltd., which the company acquired in February 2009. Compared to
the prior quarter, revenue increased across all business areas,
except CMP slurries for dielectric and copper applications.
Gross profit, expressed as a percentage of revenue, was 51.6
percent this quarter, compared to 45.6 percent in the same quarter
a year ago and 48.4 percent last quarter. Compared to the year ago
quarter, gross profit percentage increased primarily due to
increased utilization of the company’s manufacturing capacity on
significantly higher demand. The increase in gross profit
percentage versus the previous quarter was primarily due to a
higher valued product mix, as well as the benefit of a $1.6 million
raw material supplier credit related to achieving a certain volume
threshold.
From October 2006 through April 2009, the company had provided
full year gross profit margin guidance in the range of 46 to 48
percent of revenue. However, it suspended this guidance last April
due to the uncertainty in the global economic and industry
environments caused by the severe economic downturn. In light of
the stabilizing industry environment and resulting increased
visibility, the company now expects its gross profit margin to be
in the range of 46 to 50 percent of revenue for full fiscal year
2010. The increase in the upper level of the range reflects the
contribution of Epoch’s strong gross profit margins and associated
synergies, as well as improvement associated with higher pad
revenue. This guidance is for the full fiscal year and quarter to
quarter the company’s gross profit percentage may be above or below
this range.
Operating expenses, which include research, development and
technical, selling and marketing, and general and administrative
expenses, were $30.1 million in the first fiscal quarter, or $0.7
million higher than the $29.4 million reported in the same quarter
a year ago, driven primarily by higher staffing related costs,
partially offset by lower professional fees. Operating expenses
were $2.2 million higher than the $28.0 million reported in the
previous quarter, mostly due to increased staffing related costs.
The company continues to expect its full year operating expenses to
be in the range of $120 million to $125 million for fiscal
2010.
Net income for the quarter was $13.1 million, compared to $0.1
million in the same quarter last year and $12.2 million last
quarter, primarily due to the higher level of sales and gross
profit margin percentage, partially offset by higher operating
expenses.
Diluted earnings per share were $0.56 this quarter, which is the
second consecutive quarter of record earnings per share when
compared to historical results that are adjusted to include
share-based compensation expense. This is up from $0.01 reported in
the first quarter of fiscal 2009 and $0.52 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
live conference call will be available via webcast from the
company’s website, www.cabotcmp.com, or by phone at (888) 396-2386.
Callers outside the U.S. can dial (617) 847-8712. The conference
code for the call is 43991143. A replay will be available through
February 25, 2010 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
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 900 employees on a global basis. 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
annual report on Form 10-K for the fiscal year ended September 30,
2009, 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,
September 30, December 31, 2009 2009 2008
Revenue $ 97,672 $ 96,513 $ 63,017 Cost of goods sold
47,264 49,775 34,311 Gross
profit 50,408 46,738 28,706 Operating expenses:
Research, development & technical 12,581 12,514 12,114
Selling & marketing 6,322 5,798 5,973 General &
administrative 11,245 9,673 11,326
Total operating expenses 30,148 27,985
29,413 Operating income 20,260 18,753
(707 ) Other income (expense), net 61 (712 )
876 Income before income taxes 20,321 18,041
169 Provision for income taxes 7,197 5,871
53 Net income $ 13,124 $ 12,170
$ 116 Basic earnings per share $ 0.57 $ 0.53
$ 0.01 Weighted average basic shares
outstanding 23,167 23,137 23,020
Diluted earnings per share $ 0.56 $ 0.52 $
0.01 Weighted average diluted shares outstanding
23,294 23,248 23,026
CABOT MICROELECTRONICS CORPORATION CONSOLIDATED CONDENSED
BALANCE SHEETS (Unaudited and amounts in thousands)
December 31, September 30, 2009 2009 ASSETS: Current
assets: Cash, cash equivalents and short-term investments $ 224,810
$ 199,952 Accounts receivable, net 49,904 53,538 Inventories, net
43,970 44,940 Other current assets 17,959 18,422
Total current assets 336,643 316,852 Property, plant and
equipment, net 116,493 122,782 Other long-term assets 76,453
75,510 Total assets $ 529,589 $ 515,144
LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities:
Accounts payable $ 12,505 $ 15,182 Capital lease obligations 1,231
1,210 Accrued expenses and other current liabilities 26,079
23,144 Total current liabilities 39,815 39,536
Capital lease obligations 992 1,308 Other long-term liabilities
3,597 3,571 Total liabilities 44,404 44,415
Stockholders' equity 485,185 470,729 Total
liabilities and stockholders' equity $ 529,589 $ 515,144
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