8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported):

April 26, 2018

Cabot Microelectronics Corporation

(Exact name of registrant as specified in its charter)

Delaware	000-30205	36-4324765
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

870 North Commons Drive, Aurora, Illinois	60504
(Address of principal executive offices)	(Zip Code)

(630) 375-6631

(Registrant's telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company                    ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02Results of Operations and Financial Condition.

On April 26, 2018, Cabot Microelectronics Corporation issued a press release entitled "Cabot Microelectronics Corporation Reports Record Revenue, Record Net Income, and Record EPS for Second Quarter of Fiscal 2018" and made available on the Company's website a presentation entitled "Second Quarter Fiscal 2018 Earnings Call," copies of which are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and incorporated herein by reference.  The press release and presentation contain financial and other information including that related to the Company's second fiscal quarter ended March 31, 2018.

This information is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed "filed" for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01Financial Statements and Exhibits.

(d)	Exhibits
	The following exhibits are being furnished, not filed, herewith pursuant to Item 2.02 of Form 8-K:
	99.1Press release, dated April 26, 2018, entitled "Cabot Microelectronics Corporation Reports Record Revenue, Record Net Income, and Record EPS for Second Quarter of Fiscal 2018."
	99.2Presentation, dated April 26, 2018, entitled "Second Quarter Fiscal 2018 Earnings Call."

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		CABOT MICROELECTRONICS CORPORATION
		[Registrant]
Date: April 26, 2018	By:	/s/ SCOTT D. BEAMER
		Scott D. Beamer
		Vice President and Chief Financial Officer
		[Principal Financial Officer]

INDEX TO EXHIBITS

Exhibit Number	Title
99.1	Press release, dated April 26, 2018, entitled "Cabot Microelectronics Corporation Reports Record Revenue, Record Net Income, and Record EPS for Second Quarter of Fiscal 2018."
99.2	Presentation, dated April 26, 2018, entitled "Second Quarter Fiscal 2018 Earnings Call."

EX-99.1

EXHIBIT 99.1

PRESS RELEASE

CABOT MICROELECTRONICS CORPORATION REPORTS RECORD REVENUE, RECORD NET INCOME, AND RECORD EPS FOR SECOND QUARTER OF FISCAL 2018

· Record Revenue of $143.0 Million, $23.8 Million or 20.0% Higher Than Last Year

· Gross Profit Margin of 52.5%; Non-GAAP Gross Profit Margin of 53.4%; Annual Gross Profit Margin Guidance Range Raised

· Record Net Income of $29.7 Million, $11.5 Million or 62.7% Higher Than Last Year; Non-GAAP Net Income of $31.3 Million

· Record Earnings Per Share of $1.14; $0.43 or 60.6% Higher Than Last Year; Non-GAAP Earnings Per Share of $1.19

AURORA, IL, April 26, 2018 – Cabot Microelectronics Corporation (Nasdaq: CCMP), the world's leading supplier of chemical mechanical planarization (CMP) polishing slurries and second largest CMP pad supplier to the semiconductor industry, today reported financial results for its second quarter of fiscal 2018, which ended March 31, 2018.

Key Quarter Highlights

During the second fiscal quarter, the company delivered total revenue of $143.0 million, which is 20.0% higher than in the same quarter last year and is a record level for the company. Second quarter revenue was driven by growth across all product areas compared to last year, primarily in tungsten slurries, dielectrics slurries, and CMP pads. Net income for the quarter was a record $29.7 million, which is $11.5 million, or 62.7%, higher than the same quarter last year.  Diluted earnings per share (EPS) was a record $1.14, which is $0.43, or 60.6%, higher than in the same quarter last year.  Cash flow from operations was $36.5 million. As of March 31, 2018, the company had $461.4 million of cash and $137.5 million of debt on its balance sheet. In April, the company paid off its remaining outstanding Term Loan.

"Our second quarter results represent continued strong financial performance with record revenue for the fourth consecutive quarter, as well as record net income and EPS for our company" said David Li, President and CEO of Cabot Microelectronics.  "These results were supported by strong semiconductor industry demand, primarily in memory, as well as our sustained focus on executing our strategic initiatives. Looking ahead, we believe we remain well-positioned for continued profitable growth, benefiting from the ongoing ramp of 3D NAND and FinFET technologies, and our ability to deliver innovative, high-quality CMP solutions to our customers worldwide." 

Key Financial Information – Second Fiscal Quarter

Revenue was $143.0 million, which is $23.8 million, or 20.0%, higher compared to the same quarter last year. The company achieved record quarterly revenue in dielectrics slurries and pads, which grew 24.0% and 22.6% year-over-year, respectively.  Revenue from tungsten slurries grew 16.6% year-over-year.

Gross profit margin for the quarter was 52.5%, compared to 50.4% reported in the same quarter a year ago. Gross profit margin this quarter included $1.3 million of NexPlanar amortization expense. Excluding this, non-GAAP gross profit margin was 53.4%. Gross profit margin this quarter benefited from higher sales volume and a high-value product mix, partially offset by higher fixed manufacturing costs, including higher incentive compensation expense.

Operating expenses, which include research, development and technical, selling and marketing, and general and administrative expenses, were $38.0 million in the second fiscal quarter. Operating expenses were $1.9 million higher than the same quarter a year ago, primarily due to higher incentive compensation and annual merit increases.

Net income for the quarter was $29.7 million, which is $11.5 million, or 62.7%, higher than in the same quarter last year. Net income increased primarily due to higher revenue and a higher gross profit margin, partially offset by higher operating expenses. Non-GAAP net income was $31.3 million, which is $11.9 million, or 61.6%, higher than the prior year.

Diluted EPS was $1.14 this quarter, which is $0.43, or 60.6%, higher than in the second quarter of fiscal 2017. On a non-GAAP basis, diluted EPS was $1.19, which is $0.43, or 56.6%, higher than last year.

Key Financial Information – Year to Date

· Revenue for the first half of the fiscal year was $283.0 million, which is $40.5 million, or 16.7%, higher than last year.

· Gross profit margin was 52.7% of revenue, compared to 50.1% last year. Non-GAAP gross profit margin for the first half of the fiscal year, excluding the NexPlanar amortization expense, was 53.6%.

· Total operating expenses were $74.9 million, which is $5.4 million higher than the prior year. Operating expenses include approximately $0.9 million of the referenced amortization expense.

· Net income was $26.7 million, which is $13.9 million, or 34.2%, lower than the same period last year.  Net income includes the one-time impact of the enactment of the U.S. Tax Cuts and Jobs Act ("tax reform"), and the referenced amortization expense.  Non-GAAP net income was $62.3 million, which is $19.7 million, or 46.1%, higher than the same period last year.

· Diluted EPS was $1.02, which is $0.58, or 36.3%, lower than the same period last year, and includes the impact of tax reform.  Year to date, non-GAAP diluted EPS was $2.39, which is $0.71, or 42.3%, higher than last year.

Guidance Update and Capital Deployment Details

The company now expects its GAAP gross profit margin for the full fiscal year to be between 51% and 53%, an increase from the company's prior full year guidance range of 50% to 52%. This includes approximately 100 basis points of NexPlanar amortization expense.

The company now expects GAAP operating expenses for the full fiscal year to be between $148 million and $153 million, an increase from the company's prior full year guidance range of $145 to $150 million. This includes approximately $1.9 million of NexPlanar amortization expense.

As announced in March 2018, the company's Board of Directors declared a quarterly cash dividend of $0.40 per share on the company's common stock, representing an increase of 100% over the previous quarterly cash dividend. The dividend will be payable on or about April 30, 2018 to shareholders of record at the close of business on March 23, 2018. The $0.40 dividend would represent an annualized rate of $1.60 per share, or approximately $40 million in aggregate, and equivalent to approximately 33% of the company's 2017 fiscal year free cash flow¹.

¹ Free cash flow is operating cash flow less capital expenditures.

RELATED SLIDES

Slides related to this press release are available at www.cabotcmp.com under the Investor Relations center as of approximately the same time that this press release is issued.

CONFERENCE CALL

Cabot Microelectronics Corporation's quarterly earnings conference call will be held today at 10:00 a.m. Eastern Time (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. may dial (973) 638-3236. The conference code for the call is 3685768. 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 one-time effects of the enactment of the Tax Cuts and Jobs Act in December 2017 in the United States ("tax reform"), and 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 one-time impact of tax reform and NexPlanar amortization expenses are not indicative of its core operating results, and thus presents these certain metrics excluding these effects. 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 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 Colleen Mumford, 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, including related to the enactment of trade sanctions, tariffs, or other similar matters; regulatory or legislative activity, including the enactment of the Tax Cuts and Jobs Act ("tax reform") in December 2017 in the United States; product performance; the generation, protection and acquisition of intellectual property, and litigation related to such intellectual property or third party 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 by the company, based on a variety of factors; financing facilities and related debt, pay off or 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, including the effects of tax reform in the U.S.; 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 December 31, 2017 and in the company's annual report on Form 10-K for the fiscal year ended September 30, 2017, both 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							Six Months Ended
	March 31, 2018		December 31, 2017			March 31, 2017		March 31, 2018		March 31, 2017
Revenue	$	142,978	$	139,979		$	119,184	$	282,957	$	242,438
Cost of goods sold		67,933		65,965			59,153		133,898		120,902
Gross profit		75,045		74,014			60,031		149,059		121,536
Operating expenses:
Research, development & technical		13,368		12,151			14,090		25,519		27,486
Selling & marketing		6,790		5,836			7,268		12,626		14,820
General & administrative		17,799		18,915			14,699		36,714		27,195
Total operating expenses		37,957		36,902			36,057		74,859		69,501
Operating income		37,088		37,112			23,974		74,200		52,035
Interest expense		1,158		1,132			1,135		2,290		2,285
Other income, net		1,062		672			234		1,734		1,230
Income before income taxes		36,992		36,652			23,073		73,644		50,980
Provision for income taxes		7,255		39,735			4,793		46,990		10,469
Net income (loss)	$	29,737	$	(3,083	)	$	18,280	$	26,654	$	40,511
Income (loss) available to common shareholders	$	29,707	$	(3,072	)	$	18,232	$	26,621	$	40,365
Basic earnings (loss) per share	$	1.16	$	(0.12	)	$	0.73	$	1.05	$	1.63
Weighted average basic shares outstanding		25,593		25,326			25,031		25,474		24,798
Diluted earnings (loss) per share	$	1.14	$	(0.12	)	$	0.71	$	1.02	$	1.60
Weighted average diluted shares outstanding		26,161		25,326			25,526		26,076		25,304

CABOT MICROELECTRONICS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited and amounts in thousands)
	March 31, 2018		September 30, 2017
ASSETS:
Current assets:
Cash and cash equivalents	$	461,434	$	397,890
Accounts receivable, net		70,086		64,793
Inventories, net		76,813		71,873
Other current assets		22,853		16,426
Total current assets		631,186		550,982
Property, plant and equipment, net		109,292		106,361
Other long-term assets		158,495		176,757
Total assets	$	898,973	$	834,100
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable	$	18,216	$	17,624
Current portion of long-term debt		13,125		10,938
Accrued expenses, income taxes payable and other current liabilities		62,492		62,651
Total current liabilities		93,833		91,213
Long-term debt, net of current portion		124,373		132,997
Other long-term liabilities		45,256		14,853
Total liabilities		263,462		239,063
Stockholders' equity		635,511		595,037
Total liabilities and stockholders' equity	$	898,973	$	834,100

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 April 26, 2018.
	Three Months Ended March 31, 2018								Six Months Ended March 31, 2018
	U.S. GAAP			Adjustments		Non-GAAP			U.S. GAAP			Adjustments		Non-GAAP
Gross profit	$	75,045		$	1,309	$	76,354		$	149,059		$	2,545	$	151,604
Gross profit as a percentage of revenue (1)		52.5	%				53.4	%		52.7	%				53.6	%
Operating Income		37,088			1,777		38,865			74,200			3,480		77,680
Operating Income as a percentage of revenue (2)		25.9	%				27.2	%		26.2	%				27.5	%
Net income (3)	$	29,737		$	1,529	$	31,266		$	26,654		$	35,672	$	62,326
Diluted earnings per share (4)	$	1.14		$	0.05	$	1.19		$	1.02		$	1.37	$	2.39

(1)	Non-GAAP gross profit as a percentage of revenue for the three months ended March 31, 2018 excludes $1,309 of NexPlanar amortization expense.
	Non-GAAP gross profit as a percentage of revenue for the six months ended March 31, 2018 excludes $2,545 of NexPlanar amortization expense.

(2)	Non-GAAP operating income for the three months ended March 31, 2018 excludes the item mentioned above in (1) plus $468 of NexPlanar amortization expense recorded in operating expenses.
	Non-GAAP operating income for the six months ended March 31, 2018 excludes the item mentioned above in (1) plus $935 of NexPlanar amortization expense recorded in operating expenses.

(3)

Non-GAAP net income for the three months ended March 31, 2018 excludes the items mentioned above in (1) and (2) plus $212 for a change in estimated withholding taxes and re-measurement of U.S. deferred tax assets and liabilities recorded in the first quarter of fiscal 2018 related to U.S. Tax Cuts and Jobs Act (Tax Act) enacted on December 22, 2017. These adjustments are partially offset by a $460 increase in the provision for income taxes related to excluding NexPlanar amortization.

Non-GAAP net income for the six months ended March 31, 2018 excludes the items mentioned above in (1) and (2) plus $33,092 of one-time tax expense due to Tax Act. These adjustments are partially offset by a $900 increase in the provision for income taxes related to excluding NexPlanar amortization.

(4) Non-GAAP diluted earnings per share is calculated based upon Non-GAAP net income. The one-time impact of the Tax Act reduced diluted earnings per share by $0.01 and $1.27 for the three and six months ended March 31, 2018, respectively.

EX-99.2

 1  Second Quarter Fiscal 2018 Earnings Call   April 26, 2018 

 Safe Harbor Statement  2  The information contained in and discussed during this presentation may include “forward-looking statements” within the meaning of federal securities regulations. These forward-looking statements involve a number of risks, uncertainties, and other factors, including those described 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. Cabot Microelectronics Corporation assumes no obligation to update this forward-looking information. 

 2018 Second Quarter Highlights  3  Record Revenue of $143M; exceeded prior year by $24M, or 20%In-line with general expectations stated in previous quarterDriven by continued strong industry demand, particularly in memoryRecord Net Income of $29.7M; exceeded prior year by $11.5M, or 63%Approximately 21% of revenueRecord EPS of $1.14; exceeded prior year by $0.43, or 61%Recent Announcements:Update to Capital Deployment Program Doubled regular quarterly cash dividend to $0.40 per shareIntention to distribute 50% or more of prior fiscal year free cash flow to shareholders on an ongoing basisCompleted significant repatriation of overseas cash and paid off term loan of $138MCollaboration with Fujimi Incorporated for the development of certain advanced IC CMP solutions  Demonstrated performance versus long term financial goals of growth faster than the industry and margin expansion  Note: Data represented by rounded values throughout this presentation 

 4        2018 Q2*  2017 Q2*  % Change from Prior Year*    Comments  Total Revenue      $143M  $119M    20%  Continued execution of our strategic initiatives and global semiconductor industry demand    Tungsten Slurries    $60M  $52M    17%  Strong demand in memory and logic applications    Dielectrics Slurries    $35M  $28M    24%  Winning more business with our higher performing, lower cost, and higher profitability products    Polishing Pads    $21M  $17M    23%  Broad product portfolio and unique product attributes    Other Metals Slurries    $17M  $15M    15%  Metals slurry products other than tungsten    Engineered Surface Finishes/Other    $10M  $8M    32%  Includes QED Technologies    Revenue Overview            * Data represented by rounded values  

 5      GAAP Results*    Non-GAAP Results*      Comments on Results      2018 Q2  2017 Q2  2018 Q2  2017 Q2      Revenue    $143.0M  $119.2M        Record Revenue  Gross Profit, % of revenue    52.5%  50.4%  53.4%  51.4%    Driven by increased volume combined with high-value product mix Updated full year GAAP gross profit margin guidance range to 51-53% of revenue  Operating Income, % of revenue    25.9%  20.1%  27.2%  21.5%    Record Net IncomeIncreases reflect operating leverage driven by revenue growth, combined with ongoing attention to controlling costs  Net Income    $29.7M  $18.3M  $31.3 M  $19.3M      Diluted EPS    $1.14  $0.71  $1.19  $0.76        Financial Details            * Data represented by rounded values  

 Balance Sheet and Cash Flow  6  Cash and Investments balance of $461M, increase of $36M over prior quarterTotal Debt of $137.5M Paid off the remaining outstanding Term Loan in AprilOperating Cash Flow was $36.5MCapital Expenditures were $4.6MFree Cash Flow1 was $31.9M 1 Free cash flow is operating cash flow less capital expenditures 

 7  Capital Deployment Program  100% increase over the prior regular quarterly cash dividend paid of $0.20 per shareRepresents $40M annually  Ongoing through a combination of cash dividends and share repurchasesRepresents at least $60M in FY 2018 based on FY 2017 FCF of $120M  Expect to save $4M interest expense annually  Return Value to ShareholdersSince becoming a public company in 2000, Cabot Microelectronics has distributed approximately $760 million to shareholders through a combination of cash dividends and share repurchases      Doubled regular quarterly cash dividend to $0.40  Intention to distribute at least 50 percent of prior fiscal year free cash flow (FCF) to shareholders  Completed significant repatriation of overseas cash and paid off term loan of $138M 

 8  Sustained, strong financial performanceRevenue of $143.0M increased by approximately $24M, or 20.0%, from last year, driven by growth across all product areasNet Income of $29.7M increased by approximately $11.5M, or 63%, from last yearBenefited from revenue growth, margin expansion and continued operating expense disciplineRevenue increased by $24M while Operating Income increased by $13M, compared with prior year This implies 54% operating leverage on the incremental revenueOur expectations are for continuing firm near-term industry demand, sustained gross margin performance, and disciplined management of operating costs Q3 expectation is for a low to mid single digit sequential increase in revenue for IC CMP consumables  Closing Remarks 

 AppendixUpdate on Certain Expectations  9      Quarter Guidance  Full Year Guidance      Q3FY2018  Previous Communication  Current Communication  Revenue(IC CMP Consumables)  Expect low to mid single digit sequential increase over Q2      Gross Profit Margin (GAAP Basis)    50%-52%  51%-53%   Operating Expense (GAAP Basis)    $145-$150M  $148-$153M  Tax Rate    21%-24%(For Q2-Q4)  21%-24%(For Q3-Q4)  Capital Spending    $18-$22M  $18-$22M 

 Thank you for your interest in Cabot Microelectronics Corporation  For additional information, please contact:  Colleen MumfordInvestor Relations Director(630) 499-2600  10