Questions? +1 (202) 540-8337 Login
Trusted News Since 1995
A service for global professionals · Tuesday, April 24, 2018 · 443,675,724 Articles · 3+ Million Readers

Cabot Microelectronics Corporation Reports Strong Results for Third Quarter of Fiscal 2017

  • Record Revenue of $128.0 Million, 18.3 Percent Higher Than Last Year
  • GAAP Gross Profit Margin of 48.9 Percent of Revenue; Non-GAAP 49.8 Percent
  • GAAP Earnings Per Share of $0.77; Non-GAAP $0.81
  • Cash Flow From Operations of $32.1 Million

AURORA, Ill., July 27, 2017 (GLOBE NEWSWIRE) -- Cabot Microelectronics Corporation (Nasdaq:CCMP), the world’s leading supplier of chemical mechanical planarization (CMP) polishing slurries and second largest CMP pads supplier to the semiconductor industry, today reported financial results for its third quarter of fiscal 2017, which ended June 30, 2017.

Total revenue during the third fiscal quarter was $128.0 million, 18.3 percent higher than in the same quarter last year, and a record level for the company. This reflects significant revenue growth from its tungsten and dielectrics slurries, and polishing pads product areas; the company achieved its seventh consecutive quarter of record revenue in CMP pads. Gross profit margin was 48.9 percent of revenue; non-GAAP gross profit margin was 49.8 percent, excluding amortization expense related to the company’s October 2015 acquisition of NexPlanar Corporation. The company achieved diluted earnings per share of $0.77; non-GAAP diluted earnings per share were $0.81, excluding the amortization expense. Cash flow from operations was $32.1 million.

“We are pleased with our strong results this quarter, reflecting significant revenue growth compared to last year and a record level of revenue for our company, as well as continued strong profitability and cash flow,” said David Li, President and CEO of Cabot Microelectronics. “During the quarter, we experienced sustained robust demand for our tungsten, dielectrics and pad CMP solutions across a wide range of memory and logic applications, including 3D NAND and FinFET technologies. We believe our performance is evidence of our technology leadership, operational excellence, and close collaboration with our customers. Based on our results through nine months, we believe we are well-positioned to achieve record revenue and profit for full fiscal year 2017, driven by continued successful execution of our strategic initiatives, as well as expectations for continued strong semiconductor demand, based on general commentary from industry participants.”

Key Financial Information

The company achieved record revenue of $128.0 million in the third fiscal quarter, which represents an increase of 18.3 percent compared to the same quarter last year. The company achieved record quarterly revenue in its polishing pads product area, which grew 25.1 percent year-over-year; revenue from the company’s tungsten and dielectrics slurries grew 17.5 percent and 19.4 percent, respectively. Year to date revenue of $370.4 million is 20.3 percent higher than last year.

Gross profit for the quarter was 48.9 percent of revenue, compared to 48.1 percent reported in the same quarter a year ago. Gross profit this quarter includes $1.2 million of NexPlanar amortization expense; excluding this, non-GAAP gross profit was 49.8 percent of revenue. Factors impacting gross profit this quarter compared to last year include higher sales volume and a higher valued product mix, partially offset by higher fixed manufacturing costs, including higher incentive compensation expense. Year to date, gross profit was 49.7 percent of revenue, compared to 48.5 percent last year. Gross profit this year includes $3.6 million of amortization expense related to NexPlanar. Excluding this, non-GAAP gross profit for the first nine months of the fiscal year was 50.7 percent of revenue. The company currently expects its GAAP gross profit margin for the full fiscal year to be between 49 and 50 percent of revenue; its prior full year guidance range was 49 to 51 percent of revenue. This includes approximately 100 basis points of NexPlanar amortization expense.

Operating expenses, which include research, development and technical, selling and marketing, and general and administrative expenses, were $35.6 million in the third fiscal quarter, including $0.5 million of NexPlanar amortization expense. Operating expenses were $5.7 million higher than the $29.9 million reported in the same quarter a year ago, mainly due to higher staffing related expenses, primarily incentive compensation expense. Year to date, total operating expenses were $105.1 million, including $1.4 million of amortization expense related to NexPlanar. The company currently expects its GAAP operating expenses for the full fiscal year to be between $140 million and $142 million; the company’s prior guidance range was $137 million to $142 million. This includes approximately $2 million of NexPlanar amortization expense.

The company’s effective tax rate for the third fiscal quarter was 22.4 percent, compared to 9.6 percent in the same quarter last year. The increase is primarily related to changes in the jurisdictional mix of the company’s earnings, and a tax benefit recognized in the same quarter last year. Year to date, the effective tax rate was 21.1 percent. The company currently expects its effective tax rate for the full fiscal year to be within the range of 21 to 22 percent. Previously, the company had estimated 19 to 22 percent for the full fiscal year.

Net income for the quarter was $19.9 million, or $21.0 million on a non-GAAP basis, excluding amortization expense related to NexPlanar. Net income was 6.6 percent higher than the $18.7 million reported in the same quarter last year. The increase was primarily due to higher revenue and a higher gross profit margin, partially offset by higher operating expenses and a higher tax rate. Year to date, net income was $60.4 million, or $63.7 million on a non-GAAP basis, excluding the referenced amortization expense. This is 54.4 percent higher than the $39.1 million reported last year.

Diluted earnings per share were $0.77 this quarter, or $0.81 on a non-GAAP basis, excluding the amortization expense related to NexPlanar, compared to $0.76 reported in the third quarter of fiscal 2016. Year to date, diluted earnings per share were $2.37, or $2.49 on a non-GAAP basis, excluding the amortization expense. This is 49.1 percent higher than the $1.59 reported last year.

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 (844) 825-4410. Callers outside the U.S. can dial (973) 638-3236. The conference code for the call is 44617329. 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.

USE OF NON-GAAP FINANCIAL INFORMATION
The company presented the following measures considered as non-GAAP by the U.S. Securities and Exchange Commission: gross profit margin, net income and diluted earnings per share, excluding the effects of amortization expense related to its October 2015 acquisition of NexPlanar Corporation. The non-GAAP financial information provided in this press release is a supplement to, and not a substitute for, the company’s financial results presented in accordance with U.S. GAAP. These non-GAAP financial measures are provided to enhance the investor's understanding about the company's ongoing operations. Specifically, the company believes the NexPlanar amortization expense is not indicative of its core operating results, and thus presents its gross profit margin, net income and diluted earnings per share excluding this expense. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for results prepared and presented in accordance with U.S. GAAP. A reconciliation table of GAAP to non-GAAP financial measures, including gross profit percentage, net income and diluted earnings per share, is contained in this press release.

ABOUT CABOT MICROELECTRONICS CORPORATION
Cabot Microelectronics Corporation, headquartered in Aurora, Illinois, is the world's leading supplier of CMP polishing slurries and second largest CMP pads supplier to the semiconductor industry. The company’s products play a critical role in the production of advanced semiconductor devices, helping to enable the manufacture of smaller, faster and more complex devices by its customers. The company's mission is to create value by delivering high-performing and innovative solutions that solve its customers’ challenges. The company has approximately 1,150 employees on a global basis. For more information about Cabot Microelectronics Corporation, visit www.cabotcmp.com or contact Trisha Tuntland, 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; growth or contraction, and trends in the industry and markets in which the company participates; the company’s management; various economic or political factors and international or national events; regulatory or legislative activity; 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 company’s supply chain; the financial conditions of the company’s customers; natural disasters; the acquisition of, investment in, or collaboration with other entities; uses and investment of the company’s cash balance, including dividends and share repurchases, which may be suspended, terminated or modified at any time for any reason, based on a variety of factors; financing facilities and related debt, payment of principal and interest, and compliance with covenants and other terms; the company’s capital structure; the company’s current or future tax rate; and the 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 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 March 31, 2017 and in the company’s annual report on Form 10-K for the fiscal year ended September 30, 2016, both filed with the SEC. Cabot Microelectronics assumes no obligation to update this forward-looking information.

/EIN News/ --  


CABOT MICROELECTRONICS CORPORATION        
CONSOLIDATED STATEMENTS OF INCOME      
(Unaudited and amounts in thousands, except per share amounts)      
         
         
  Quarter Ended Nine Months Ended
  June 30,   March 31,   June 30,   June 30,   June 30,
   2017     2017    2016     2017    2016
   
Revenue $ 127,957     $ 119,184   $ 108,152     $ 370,395   $ 307,765
           
Cost of goods sold   65,414       59,153     56,127       186,316     158,649
           
Gross profit   62,543       60,031     52,025       184,079     149,116
           
Operating expenses:          
           
Research, development & technical   14,333       14,090     12,928       41,819     42,690
           
Selling & marketing   7,346       7,268     6,243       22,166     19,660
           
General & administrative   13,953       14,699     10,738       41,148     37,991
           
Total operating expenses   35,632       36,057     29,909       105,133     100,341
           
Operating income   26,911       23,974     22,116       78,946     48,775
           
Interest expense   1,117       1,135     1,178       3,402     3,536
           
Other income (expense), net   (115 )     234     (246 )     1,115     396
           
Income before income taxes   25,679       23,073     20,692       76,659     45,635
           
Provision for income taxes   5,740       4,793     1,990       16,209     6,493
           
Net income $ 19,939     $ 18,280   $ 18,702     $ 60,450   $ 39,142
           
           
           
Income available to common shareholders $ 19,887     $ 18,232   $ 18,592     $ 60,259   $ 38,882
           
           
Basic earnings per share $ 0.79     $ 0.73   $ 0.78     $ 2.42   $ 1.62
           
Weighted average basic shares outstanding   25,228       25,031     23,929       24,941     24,023
           
Diluted earnings per share $ 0.77     $ 0.71   $ 0.76     $ 2.37   $ 1.59
           
Weighted average diluted shares outstanding   25,721       25,526     24,325       25,450     24,403

 

CABOT MICROELECTRONICS CORPORATION      
CONSOLIDATED CONDENSED BALANCE SHEETS      
(Unaudited and amounts in thousands)      
       
    June 30,     September 30,
    2017   2016
ASSETS:      
       
Current assets:      
Cash and cash equivalents   $ 363,902   $ 287,479
Accounts receivable, net     66,338     62,830
Inventories, net     70,759     72,123
Other current assets     16,803     14,398
Total current assets     517,802     436,830
       
Property, plant and equipment, net     106,162     106,496
Other long-term assets     177,310     183,904
Total assets   $ 801,274   $ 727,230
       
       
LIABILITIES AND STOCKHOLDERS' EQUITY:      
       
Current liabilities:      
Accounts payable   $ 15,958   $ 16,834
Current portion of long-term debt     9,844     7,656
Accrued expenses, income taxes payable and other current liabilities                     49,295     41,395
Total current liabilities     75,097     65,885
       
Long-term debt, net of current portion     137,309     146,961
Other long-term liabilities     13,846     16,736
Total liabilities     226,252     229,582
       
Stockholders' equity     575,022     497,648
Total liabilities and stockholders' equity   $ 801,274   $ 727,230

 

CABOT MICROELECTRONICS CORPORATION          
U.S. GAAP to Non-GAAP Reconciliation            
Gross Profit as a Percentage of Revenue, Net Income and Diluted Earnings Per Share      
(Unaudited and amounts in thousands, except per share and percentage amounts)      
             
The following presents reconciliation of the Non-GAAP financial measures included in the Cabot    
Microelectronics Corporation press release dated July 27, 2017.        
             
             
  Three Months Ended June 30, 2017 Nine Months Ended June 30, 2017
             
  U.S. GAAP Adjustments Non-GAAP U.S. GAAP Adjustments Non-GAAP
Gross profit $ 62,543   $ 1,199 $ 63,742   $ 184,079   $ 3,595 $ 187,674  
Gross profit as a percentage of revenue (1)   48.9 %     49.8 %   49.7 %     50.7 %
             
             
Net income (2) $ 19,939   $ 1,067 $ 21,006   $ 60,450   $ 3,202 $ 63,652  
             
             
Diluted earnings per share (3) $ 0.77   $ 0.04 $ 0.81   $ 2.37   $ 0.12 $ 2.49  
             
(1) Non-GAAP gross profit as a percentage of revenue for the three months ended June 30, 2017 excludes $1,199 of NexPlanar amortization expense.
     Non-GAAP gross profit as a percentage of revenue for the nine months ended June 30, 2017 excludes $3,595 of NexPlanar amortization expense.
             
(2) Non-GAAP net income for the three months ended June 30, 2017 excludes the item mentioned above in (1) plus $467 of NexPlanar amortization
     expense recorded in operating expenses.  These adjustments are partially offset by a $599 related increase in the provision for income taxes.
     Non-GAAP net income for the nine months ended June 30, 2017 excludes the item mentioned above in (1) plus $1,403 of NexPlanar amortization
     expense recorded in operating expenses.  These adjustments are partially offset by a $1,796 related increase in the provision for income taxes.
             
(3) Non-GAAP diluted earnings per share is calculated based upon Non-GAAP net income.      

 

Trisha Tuntland
                    Director of Investor Relations 
                    630-499-2600

Primary Logo

Powered by EIN News