EX-99.1 2 exhibit99_1.htm EXHIBIT 99.1 exhibit99_1.htm
Exhibit 99.1


 

CABOT MICROELECTRONICS CORPORATION REPORTS RESULTS
FOR FOURTH QUARTER AND FULL FISCAL YEAR 2007
 
        §  Record Quarterly Revenue of $90.4 Million
        §  Record Annual Revenue of $338.2 Million
        §  Quarterly Gross Profit Percentage Increase of 140 Basis Points
        §  Annual Gross Profit Percentage Increase of 80 Basis Points


AURORA, IL, October 25, 2007 – Cabot Microelectronics Corporation (Nasdaq:  CCMP), the world’s leading supplier of chemical mechanical planarization (CMP) polishing slurries to the semiconductor industry, today reported financial results for its fourth fiscal quarter and full fiscal year 2007, which ended September 30.

Total revenue during the fourth fiscal quarter reached $90.4 million and is the highest quarterly revenue in the company’s history, building on the previous record of $89.0 million achieved in the prior quarter.  Total CMP revenue was 5.3 percent higher than the prior quarter, and sequential revenue increases were recorded in each of the company’s CMP application areas.  Sales of slurry for tungsten applications reached a second consecutive quarter of record revenue.  Total revenue this quarter was 3.9 percent higher than the $87.0 million in revenue reported in the same quarter last year.

Revenue for the full fiscal year was a record $338.2 million, which was $17.4 million, or 5.4 percent higher than revenue for the previous fiscal year.  Full year revenue reflects the addition of the QED business, acquired in July of 2006, as well as relatively soft semiconductor industry demand for the company’s CMP products in the first half of the fiscal year followed by a stronger environment in the second half of the year.

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The average selling price for the company’s slurry products sold in the fourth quarter was slightly higher than in the prior quarter.  For the full year, the average selling price increased by 1.6 percent, mostly attributable to a higher-priced product mix.

Gross profit as a percentage of revenue was 49.1 percent this quarter, up from 47.7 percent in the prior quarter and 44.4 percent in the year ago quarter.  The increase in gross profit percentage compared to both periods was largely driven by higher manufacturing capacity utilization.  Also contributing to the increase over the prior year was the absence of the $1.1 million write-off of production assets in the fourth quarter of fiscal 2006 associated with retrofitting a building for the company’s pad business.  Gross profit for the full fiscal year was 47.3 percent of revenue, compared to 46.5 percent in the previous year, representing the first annual increase in gross profit percentage in the company’s history.

Operating expenses, consisting of research, development and technical, selling and marketing, and general and administrative expenses were $30.3 million in the fourth quarter.  This was $2.4 million higher than the $27.9 million reported last quarter, primarily due to higher accruals for the company’s annual cash bonus program and higher professional fees, partially offset by lower costs for clean room materials in the company’s research and development activities.  Operating expenses this quarter were $2.1 million higher than in the same quarter last year, driven by higher accruals for the company’s annual cash bonus program and higher professional fees.  These increases were partially offset by the absence of $1.8 million of one-time write-offs in research and development incurred in the fourth quarter of fiscal 2006.

For the full year, operating expenses were $114.2 million, which represents a 9.2 percent increase from $104.6 million reported in fiscal 2006.  The increase was primarily due to operating expenses associated with the acquired QED business and higher professional fees.

Net income for the quarter was $10.2 million, up from $10.1 million last quarter and $8.2 million in the year ago quarter.  Net income for the full fiscal year was $33.8 million, up 2.7 percent from $32.9 million in fiscal 2006.

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Diluted earnings per share were $0.43 this quarter, up from $0.42 in the previous quarter and $0.34 in the fourth quarter of fiscal 2006.  Earnings per share for full fiscal year 2007 of $1.42 were up 4.7 percent from $1.36 for the previous fiscal year.

“We are proud of our accomplishments this quarter, as well as for the entire fiscal year.  Guided by our strategic initiatives of technology leadership, operations excellence and connecting with customers, we achieved our second consecutive year of record revenue, despite operating in a soft industry environment during the first half of the year.  Simultaneously, we increased our annual gross profit percentage for the first time in our company’s history, which we believe demonstrates our ability to grow profitably in spite of competitive pressures, increasing customer performance requirements, and industry cycles,” stated William Noglows, Chairman and CEO of Cabot Microelectronics.

 “We are also energized by the progress made in our company’s growth initiatives.  First, our Engineered Surface Finishes (ESF) business had an outstanding year.  Our ESF acquisitions have performed better than expected, our internal efforts have started yielding commercial sales for applications outside of the semiconductor industry, and our strong balance sheet and cash flow give us the flexibility to continue investing in this area.  Second, with our new CMP pad manufacturing capacity on line and nine customer adoptions across a variety of applications, technology nodes and polishing tools, we believe that we are well positioned for stronger performance in our pad business in the coming year.  On the whole, I am encouraged by our achievements this year and look forward to another successful year in 2008.”

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) 362-4832.  Callers outside the U.S. can dial (617) 597-5364.  The conference code for the call is 78233676.  A replay will be available through November 22, 2007 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.

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ABOUT CABOT MICROELECTRONICS CORPORATION
Cabot Microelectronics Corporation, headquartered in Aurora, Illinois, is the world's leading supplier of CMP slurries used in semiconductor and data storage manufacturing. 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 750 employees. 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 or trends; growth of the markets in which the company participates; international events; 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; and the construction of new or refurbishment of existing 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 June 30, 2007 and in the company’s annual report on Form 10-K for the fiscal year ended September 30, 2006, both filed with the SEC. Cabot Microelectronics assumes no obligation to update this forward-looking information.  


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CABOT MICROELECTRONICS CORPORATION
                          
CONSOLIDATED STATEMENTS OF INCOME
                              
(Unaudited and amounts in thousands, except per share amounts)
                    
                               
                               
   
Quarter Ended   
    
Twelve Months Ended
  
   
September 30,
 2007
    
June 30,
 2007
    
September 30,
2006
    
September 30,
2007
    
September 30,
2006
  
                               
Revenue
   $
90,379
     $
89,023
     $
86,982
     $
338,205
     $
320,795
  
                                         
Cost of goods sold
    
45,983
      
46,552
      
48,328
      
178,224
      
171,758
  
                                         
Gross profit
    
44,396
      
42,471
      
38,654
      
159,981
      
149,037
  
                                         
Operating expenses:
                                        
                                         
Research, development & technical
    
12,209
      
12,033
      
13,030
      
49,970
      
48,070
  
                                         
Selling & marketing
    
6,518
      
6,469
      
5,528
      
24,310
      
21,115
  
                                         
General & administrative
    
11,584
      
9,387
      
8,556
      
39,933
      
34,319
  
                                         
Purchased in-process research & development
    
-
      
-
      
1,120
      
-
      
1,120
  
                                         
Total operating expenses
    
30,311
      
27,889
      
28,234
      
114,213
      
104,624
  
                                         
Operating income
    
14,085
      
14,582
      
10,420
      
45,768
      
44,413
  
                                         
Other income (expense), net
    
1,320
       (148 )    
1,541
      
3,606
      
4,111
  
                                         
Income before income taxes
    
15,405
      
14,434
      
11,961
      
49,374
      
48,524
  
                                         
Provision for income taxes
    
5,246
      
4,373
      
3,803
      
15,538
      
15,576
  
                                         
Net income
   $
10,159
     $
10,061
     $
8,158
     $
33,836
     $
32,948
  
                                         
                                         
Basic earnings per share
   $
0.43
     $
0.43
     $
0.34
     $
1.42
     $
1.36
  
                                         
Weighted average basic shares outstanding
    
23,783
      
23,662
      
24,087
      
23,748
      
24,228
  
                                         
                                         
Diluted earnings per share
   $
0.43
     $
0.42
     $
0.34
     $
1.42
     $
1.36
  
                                         
Weighted average diluted shares outstanding
    
23,847
      
23,687
      
24,087
      
23,754
      
24,228
  
                                         

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CABOT MICROELECTRONICS CORPORATION
          
CONSOLIDATED CONDENSED BALANCE SHEETS
          
(Unaudited and amounts in thousands)
            
                       
               
September 30,
 2007
    
September 30,
2006
       
ASSETS:
              
                       
Current assets:
                
 
Cash, cash equivalents and short-term investments  
  
$
212,472
  
$
165,930
 
Accounts receivable, net
      
52,302
    
            48,028
 
Inventories, net
        
37,266
    
            40,326
 
Other current assets
      
8,714
    
             7,221
   
Total current assets
      
310,754
    
261,505
                       
Property, plant and equipment, net
    
118,454
    
          130,176
Other long-term assets
      
25,921
    
            20,452
   
Total assets
       $
455,129
   $
 412,133
                       
                       
   
LIABILITIES AND STOCKHOLDERS' EQUITY:
          
                       
Current liabilities:
                
 
Accounts payable
       $
15,859
   $
 15,104
 
Capital lease obligations
      
1,066
    
             1,254
 
Accrued expenses, income taxes payable and other current liabilities 
    
19,638
    
            22,475
   
Total current liabilities
      
36,563
    
38,833
                       
Capital lease obligations
      
3,608
    
             4,420
Other long-term liabilities
      
1,754
    
             1,109
   
Total liabilities
        
41,925
    
            44,362
                       
Stockholders' equity
        
413,204
    
          367,771
   
Total liabilities and stockholders' equity
 $
455,129
   $
     412,133

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