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Cabot Microelectronics Corporation Reports Results for First Quarter of Fiscal 2014



Cabot Microelectronics Corporation Reports Results for First Quarter of Fiscal
2014

  * Revenue of $100.5 Million, Primarily Reflects Soft Industry Demand and
    Traditional Seasonality
  * Gross Profit Margin of 47.5 Percent; Full Year Guidance Remains Unchanged
    at 48 to 50 Percent of Revenue
  * Earnings Per Share of 45 Cents

AURORA, Ill., Jan. 23, 2014 (GLOBE NEWSWIRE) -- Cabot Microelectronics
Corporation (Nasdaq:CCMP), the world's leading supplier of chemical mechanical
planarization (CMP) polishing slurries and a growing CMP pad supplier to the
semiconductor industry, today reported financial results for its first quarter
of fiscal 2014, which ended December 31, 2013.

Total revenue during the first fiscal quarter was $100.5 million, which
reflects decreases of 5.6 percent compared to the same quarter last year, and
13.5 percent compared to the record revenue reported in the prior quarter, on
softer semiconductor industry demand, including traditional seasonal weakness
that the company typically has experienced in its first fiscal quarter.
Revenues were also adversely impacted by customary fluctuations in the
company's QED Technologies business, primarily capital equipment oriented,
which also recorded record revenue in the prior quarter. Despite these
headwinds, the company achieved a gross profit margin of 47.5 percent of
revenue in the first fiscal quarter, improving its gross profit margin by 50
basis points compared to the prior year. As a result, the company recorded
diluted earnings per share of $0.45 for the first fiscal quarter. The
company's balance sheet reflects a cash balance of $246.5 million and $159.7
million of debt outstanding as of December 31, 2013.

"We believe our financial results provide a solid start to our fiscal year,
despite the soft industry demand, including traditional seasonal weakness,
that we referenced last October when we reported results for our previous
fiscal quarter. Even within this environment, we were able to improve our
gross margin and control costs compared to the same quarter last year, on
lower revenue," said William Noglows, Chairman and CEO of Cabot
Microelectronics. "Looking forward, we expect strengthening in overall
semiconductor industry demand during the fiscal year, based on recent public
statements from a number of industry analysts and some of our strategic
customers, as well as past trends within similar demand environments. Industry
reports generally indicate that holiday sales of technology products were
solid, most IC inventories have returned to normal levels and fab utilization
rates now appear to be improving. In addition, certain industry analysts are
forecasting modest growth in 2014 for the PC market, a shift from the
contraction that has beset this industry over the previous two years. Having
successfully navigated periods of both strong and soft industry demand
environments, we believe the continued successful execution of our strategic
initiatives positions us well as we work to deliver another year of solid
business performance."

Key Financial Information

Total first fiscal quarter revenue of $100.5 million represents a 5.6 percent
decrease from the $106.5 million reported in the same quarter last year and a
13.5 percent decrease from the record level of $116.3 million reported last
quarter. Compared to the same quarter last year, the company believes the
decrease in revenue primarily reflects softer demand due to lower utilization
at some fabs, and the continued soft demand for PCs. Compared to the previous
quarter, the company believes the decrease in revenue primarily reflects soft
demand within the global semiconductor industry that the company began to
experience late last fiscal year, including traditional seasonal weakness that
the company typically has experienced in its first fiscal quarter, and soft
demand for the company's QED products.

Gross profit, expressed as a percentage of revenue, was 47.5 percent this
quarter. This is higher than the 47.0 percent reported in the same quarter a
year ago and lower than 50.9 percent last quarter. Compared to the year ago
quarter, gross profit percentage increased primarily due to benefits
associated with a weaker Japanese yen versus the U.S. dollar and higher
manufacturing yields, partially offset by lower sales volume and higher
variable manufacturing costs, including higher raw material costs. The
decrease in gross profit percentage versus the previous quarter was primarily
due to lower sales volume and higher variable manufacturing costs, including
higher raw material costs, partially offset by lower fixed manufacturing
costs, including incentive compensation costs. The company's full fiscal year
guidance range of 48 to 50 percent of revenue remains unchanged.

Operating expenses, which include research, development and technical, selling
and marketing, and general and administrative expenses, were $32.0 million in
the first fiscal quarter, or $1.4 million less than the $33.4 million reported
in the same quarter a year ago, primarily due to lower clean room materials
expense and depreciation expense. Operating expenses were $3.5 million lower
than the $35.5 million reported in the previous quarter, primarily due to
lower staffing related costs, including incentive compensation costs.

Net income for the quarter was $11.3 million, up from $9.7 million reported in
the same quarter last year and down from $16.8 million in the prior quarter.
Compared to the same quarter last year, net income was higher primarily due to
lower tax expense on the company's foreign earnings resulting from its
election to permanently reinvest the earnings of certain foreign
subsidiaries. The first quarter of fiscal 2013 also included an adverse
foreign tax adjustment that reduced net income by $1.7 million. Compared to
the prior quarter, net income was down mainly due to lower revenue and a lower
gross profit margin, partially offset by lower operating expenses.

Diluted earnings per share were $0.45 this quarter, up from $0.41 reported in
the first quarter of fiscal 2013 and down from $0.69 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 conference call will be available
via live webcast and replay from the company's website, www.cabotcmp.com, or
by phone at (877) 280-4960. Callers outside the U.S. can dial (857)
244-7317. The conference code for the call is 13089896. 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 a 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 1,050 employees on a
global basis. For more information about Cabot Microelectronics Corporation,
visit www.cabotcmp.com or contact Trisha Tuntland, Manager 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, regulatory or legislative activity, 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; natural disasters; the acquisition of or investment in other
entities; uses and investment of the company's cash balance; financing
facilities and related debt, payment of principal and interest, and compliance
with covenants and other terms; the company's capital structure; and the
construction and operation 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, 2013, 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,
                                       2013         2013          2012
                                                                   
Revenue                                 $ 100,515    $ 116,266     $ 106,533
                                                                   
Cost of goods sold                     52,801       57,143        56,494
                                                                   
Gross profit                           47,714       59,123        50,039
                                                                   
Operating expenses:                                                
                                                                   
Research, development & technical      14,571       15,835        15,316
                                                                   
Selling & marketing                    6,707        7,360         7,109
                                                                   
General & administrative               10,726       12,270        10,954
                                                                   
Total operating expenses               32,004       35,465        33,379
                                                                   
Operating income                       15,710       23,658        16,660
                                                                   
Interest expense                       872          911           953
                                                                   
Other income (expense), net            617          (173)         854
                                                                   
Income before income taxes             15,455       22,574        16,561
                                                                   
Provision for income taxes             4,147        5,805         6,858
                                                                   
Net income                              $ 11,308     $ 16,769      $ 9,703
                                                                   
Basic earnings per share               $0.47        $0.72         $0.42
                                                                   
Weighted average basic shares          23,590       23,041        22,845
outstanding 
                                                                   
Diluted earnings per share             $0.45        $0.69         $0.41
                                                                   
Weighted average diluted shares        24,623       23,994        23,658
outstanding 

 
 
CABOT MICROELECTRONICS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited and amounts in thousands)
                                                                  
                                                    December 31, September 30,
                                                    2013         2013
ASSETS:                                                           
                                                                  
Current assets:                                                   
Cash and cash equivalents                            $ 246,463    $ 226,029
Accounts receivable, net                             52,078       54,640
Inventories, net                                     66,118       63,786
Other current assets                                 32,077       21,257
Total current assets                                396,736      365,712
                                                                  
Property, plant and equipment, net                   109,514      111,985
Other long-term assets                               69,475       76,809
Total assets                                         $ 575,725    $ 554,506
                                                                  
                                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY:                             
                                                                  
Current liabilities:                                              
Accounts payable                                     $ 15,825     $ 16,663
Current portion of long-term debt                    12,031       10,938
Accrued expenses, income taxes payable and other     28,503       39,899
current liabilities
Total current liabilities                           56,359       67,500
                                                                  
Long-term debt, net of current portion               147,657      150,937
Other long-term liabilities                          9,103        8,992
Total liabilities                                    213,119      227,429
                                                                  
Stockholders' equity                                 362,606      327,077
Total liabilities and stockholders' equity           $ 575,725    $ 554,506

CONTACT: Trisha Tuntland
         Manager, Investor Relations
         (630) 499-2600

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