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):

February 6, 2019

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 February 6, 2019, Cabot Microelectronics Corporation issued a press release entitled “Cabot Microelectronics Corporation Reports Record Revenue for First Quarter of Fiscal 2019,” and made available on the Company’s website a presentation entitled “First Quarter of Fiscal 2019 Earnings Call, February 7, 2019,” 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 first quarter of fiscal 2019, which ended December 31, 2018.

This information contained in the press release and presentation attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and incorporated herein by reference 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 February 6, 2019, entitled “Cabot Microelectronics Corporation Reports Record Revenue for First Quarter of Fiscal 2019.”
	99.2Presentation entitled “First Quarter of Fiscal 2019 Earnings Call, February 7, 2019.”

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: February 6, 2019	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 February 6, 2019, entitled “Cabot Microelectronics Corporation Reports Record Revenue for First Quarter of Fiscal 2019.”
99.2	Presentation entitled “First Quarter of Fiscal 2019 Earnings Call, February 7, 2019.”

EX-99.1

EXHIBIT 99.1

PRESS RELEASE

CABOT MICROELECTRONICS CORPORATION REPORTS RECORD REVENUE FOR FIRST QUARTER OF FISCAL 2019

· Record Revenue of $221.8 Million, $81.8 Million or 58% Higher Than Last Year

· Seventh Consecutive Quarter of Sequential Revenue Increase in Cabot Microelectronics’ Legacy Business

· Record Revenue in CMP Slurries and Pads

· Net Income of $13.4 Million; Non-GAAP Net Income of $52.9 Million, $21.8 Million or 70% Higher Than Last Year¹

· Earnings Per Share of $0.48; Non-GAAP Earnings Per Share of $1.90, $0.71 or 60% Higher Than Last Year¹

· Adjusted EBITDA of $76.9 Million, $33.5 Million or 77% Higher Than Last Year¹

AURORA, IL, February 6, 2019 – Cabot Microelectronics Corporation (Nasdaq: CCMP), a leading global supplier of consumable materials to semiconductor manufacturers and pipeline operators, today reported financial results for its first quarter of fiscal 2019, which ended December 31, 2018.

Key Quarter Highlights

During the first fiscal quarter, the company delivered total revenue of $221.8 million, 58% higher than in the same quarter last year, and a record level for the company.  First quarter revenue was driven by the company’s acquisition of KMG Chemicals, Inc. (“KMG”), which closed on November 15, 2018, and growth across Cabot Microelectronics’ legacy businesses.  In the company’s chemical mechanical planarization (“CMP”) businesses, tungsten slurries and polishing pads had record revenue in the quarter.  Net Income was $13.4 million.  Adjusted EBITDA, which excludes acquisition and integration-related expenses, was $76.9 million for the quarter, an increase of $33.5 million, or 77%, compared to the same quarter last year.  Cash flow from operations was $13.7 million.  The company borrowed $1,065 millionin the quarter to finance the KMG acquisition and ended the quarter with $209 million cash on hand.

“We are excited to announce strong results for our first quarter, especially since this is the first time we are reporting performance as a combined company following our acquisition of KMG, which closed halfway through our fiscal 2019 first quarter,” said David Li, President and CEO of Cabot Microelectronics.  “We believe these results, along with the positive feedback from our customers and the progress we have made on our integration efforts, provide an indication of the earnings and cash flow generation capability of our company as we build the premier provider of critical materials globally.”

Key Financial Information for First Quarter of Fiscal 2019

· Revenue was $221.8 million, which is $81.8 million, or 58%, higher compared to the same quarter last year.  Results benefited from the KMG acquisition, which added $62.0 million to revenue in the approximately six weeks post-closing.  The company achieved record quarterly revenue in CMP slurries and pads.

· Net income for the quarter was $13.4 million, which is $16.5 million higher than the net loss reported in the same quarter last year, which was due to the adverse impact of the U.S. Tax Cuts and Jobs Act in fiscal 2018.  Acquisition and integration-related expenses negatively impacted net income this quarter.  Non-GAAP net income was $52.9 million, which is $21.8 million, or 70%, higher than the prior year.

· Diluted EPS was $0.48 this quarter, which is $0.60 higher than in the first quarter of fiscal 2018. On a non-GAAP basis, diluted EPS, which excludes the impact of the Tax Act and KMG acquisition and integration-related expenses, was $1.90, which is $0.71, or 60%, higher than the same quarter last year.

· Excluding acquisition and integration-related expenses, adjusted EBITDA was $76.9 million, which is $33.5 million, or 77% higher than in the prior year.  Adjusted EBITDA margin for the quarter was 34.7%, compared to 31.0% in the same quarter last year.  Adjusted EBITDA benefited from improved profitability in the company’s legacy businesses and the addition of the KMG businesses.

Segment Results

As of the first quarter of fiscal 2019, Cabot Microelectronics is presenting results using two reportable segments: Electronic Materials and Performance Materials.  Electronic Materials includes products and solutions for the semiconductor industry and consists of Cabot Microelectronics’ legacy CMP slurries and polishing pads businesses as well as the recently-acquired KMG electronic chemicals business.  Performance Materials includes KMG’s legacy pipeline performance and wood treatment businesses, and Cabot Microelectronics’ legacy QED business.

Electronic Materials – Revenue was $190.6 million, which is $57.3 million, or 43%, higher than in the same quarter last year.  The KMG acquisition contributed $39.8 million in revenue to the segment results in the quarter.  CMP slurries and pads delivered record revenue for the quarter, with a 10% and 30% increase year-over-year, respectively.  Electronic Materials segment adjusted EBITDA was $74.8 million, or 39.3% of revenue.

Performance Materials – Revenue was $31.2 million for the quarter, which is $24.5 million higher than in the prior year’s quarter.  The increase in revenue was primarily driven by the KMG acquisition.  Performance Materials segment adjusted EBITDA was $13.1 million, or 41.9% of revenue.

Guidance Update

The company is providing revenue guidance for the second quarter of fiscal 2019 based on currently projected sequential changes compared to the company’s pro forma revenue for the first quarter of fiscal 2019, as reflected in the slide presentation that is being made available concurrent with this press release.  For the second quarter of fiscal 2019, the company currently expects total revenue to be down low single digits on a percentage basis, with Electronic Materials revenue expected to be down low single digits, and Performance Materials revenue expected to be up low single digits, on a percentage basis.

The company currently expects full fiscal year 2019 adjusted EBITDA to be between $325 million and $355 million.  Full fiscal year interest expense is expected to be in the range of $47 million to $50 million.  Additional current expectations are provided on slide 10 in the related slide presentation.

¹ Non-GAAP net income, adjusted EBITDA and non-GAAP diluted EPS are non-GAAP financial measures. See “Use of Certain GAAP and Non-GAAP Financial Information” below and reconciliations to the most comparable GAAP measures in the financial statements portion of this press release.

RELATED SLIDE PRESENTATION

A slide presentation related to this press release will be available at ir.cabotcmp.com in the Quarterly Results section of the Investor Relations center at approximately the same time that this press release is issued.

CONFERENCE CALL

Cabot Microelectronics Corporation’s quarterly earnings conference call will be held at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on Thursday, February 7.  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 8668739.  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 a leading global supplier of consumable materials to semiconductor manufacturers and pipeline operators.  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.  Cabot Microelectronics Corporation is also a leading provider of performance materials to pipeline operators and the industrial wood preservation industry.  The company's mission is to create value by delivering high-performing and innovative solutions that solve its customers’ challenges.  The company has approximately 1,900 employees globally.  For more information about Cabot Microelectronics Corporation, visit www.cabotcmp.com, or contact Colleen Mumford, Director of Investor Relations, at 630-499-2600.

USE OF CERTAIN GAAP AND NON-GAAP FINANCIAL INFORMATION

The company presented the following measures considered as non-GAAP by the U.S. Securities and Exchange Commission (SEC): adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), adjusted EBITDA margin, non-GAAP net income and non-GAAP diluted earnings per share.  All non-GAAP measures presented exclude the effect of the enactment of the Tax Cuts and Jobs Act in December 2017 in the United States (“tax act”), acquisition and integration costs related to the company’s November 2018 acquisition of KMG, and the 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 impact of the tax act, KMG acquisition and integration-related expenses and acquisition related 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.

The company has not quantitatively reconciled its guidance for adjusted EBITDA to its most comparable GAAP measure because the company does not provide specific guidance for the various reconciling items as certain items that impact this measure have not occurred, are out of the company’s control, or cannot be reasonably predicted.  Accordingly, a reconciliation to the nearest GAAP financial metric is not available without unreasonable effort.  Please note that the unavailable reconciling items could significantly impact the company’s results.

Adjusted EBITDA for the Electronic Materials and Performance Materials segments is presented in conformity with Accounting Standards Codification Topic 280, Segment Reporting. This measure is reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance. For these reasons, this measure is excluded from the definition of non-GAAP financial measures under the SEC Regulation G and Item 10(e) of Regulation S-K.

FORWARD LOOKING STATEMENTS

This press release contains forward-looking statements, which address a variety of subjects including, for example, future sales and operating results; the acquisition of, investment in, or collaboration with other entities, including the company’s acquisition of KMG Chemicals, Inc. (“”KMG”), and the expected benefits and synergies of such acquisition and the capital structure of the combined company; 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; 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; 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 the tax act in the U.S.; the operation of facilities by Cabot Microelectronics; Statements that are not historical facts, including statements about Cabot Microelectronics’ beliefs, plans and expectations, are forward-looking statements. Such statements are based on current expectations of Cabot Microelectronics’ management and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. For information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to Cabot Microelectronics’ filings with the Securities and Exchange Commission (“SEC”), including the risk factors contained in Cabot Microelectronics’ Annual Report on Form 10-K and its Quarterly Report on Form 10-Q for the quarter ended December 31, 2018, which will be filed by February 11, 2019.  Except as required by law, Cabot Microelectronics undertakes no obligation to update forward-looking statements made by it to reflect new information, subsequent events or circumstances.

                                                                                                         Contact:

                                                                                                        Colleen Mumford

                                                                                                       Director of Investor Relations

                                                                                                      Cabot Microelectronics Corporation

                                                                                                           (630) 499-2600

CABOT MICROELECTRONICS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited and amounts in thousands, except per share amounts)
	Quarter Ended
	December 31, 2018			September 30, 2018			December 31, 2017
Revenue	$	221,778		$	156,729		$	139,979
Cost of sales		122,445			72,383			65,965
Gross profit		99,333			84,346			74,014
Operating expenses:
Research, development & technical		14,040			13,372			12,151
Selling, general & administrative		61,128			26,986			24,751
Total operating expenses		75,168			40,358			36,902
Operating income		24,165			43,988			37,112
Interest expense		6,890			102			1,132
Interest income		1,019			1,161			951
Other income (expense), net		(1,411	)		(24	)		(279	)
Income before income taxes		16,883			45,023			36,652
Provision for income taxes		3,440			(3,195	)		39,735
Net income (loss)	$	13,443		$	48,218		$	(3,083	)
Basic earnings (loss) per share	$	0.50		$	1.89		$	(0.12	)
Weighted average basic shares outstanding		27,157			25,520			25,326
Diluted earnings (loss) per share	$	0.48		$	1.84		$	(0.12	)
Weighted average diluted shares outstanding		27,762			26,213			25,326

CABOT MICROELECTRONICS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited and amounts in thousands)
	December 31, 2018		September 30, 2018
ASSETS:
Current assets:
Cash and cash equivalents	$	208,880	$	352,921
Accounts receivable, net		138,580		75,886
Inventories, net		138,377		71,926
Other current assets		39,310		22,048
Total current assets		525,147		522,781
Property, plant and equipment, net		262,447		111,403
Other long-term assets		1,593,134		146,789
Total assets	$	2,380,728	$	780,973
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable	$	54,012	$	18,171
Current portion of long-term debt		7,627		-
Accrued expenses, income taxes payable and other current liabilities		100,400		82,983
Total current liabilities		162,039		101,154
Long-term debt, net of current portion		1,037,203		-
Other long-term liabilities		173,319		13,127
Total liabilities		1,372,561		114,281
Stockholders' equity		1,008,167		666,692
Total liabilities and stockholders' equity	$	2,380,728	$	780,973

CABOT MICROELECTRONICS CORPORATION
U.S. GAAP to Non-GAAP Reconciliation
(Unaudited and amounts in thousands, except per share and percentage amounts)
	Quarter Ended
	December 31, 2018			December 31, 2017
Reconciliation of GAAP Net income to Non-GAAP Net income
GAAP Net income (loss)	$	13,443		$	(3,083	)
Amortization of acquisition-related intangibles		9,355			1,703
Charge for fair value write-up of acquired inventory sold		10,261			-
Acquisition and integration-related expenses		27,294			-
Impact of U.S. Tax Cuts and Jobs Act (Tax Act)		(259	)		32,880
Tax effect on adjustments to net income		(7,244	)		(440	)
Non-GAAP Net income	$	52,850		$	31,060
Reconciliation of GAAP Diluted EPS to Non-GAAP Diluted EPS
GAAP Diluted earnings per share	$	0.48		$	(0.12	)
Effect of adjustments to net income		1.42			1.31
Non-GAAP Diluted earnings per share	$	1.90		$	1.19
Reconciliation of GAAP Net income to Non-GAAP Adjusted EBITDA
Net income (loss)	$	13,443		$	(3,083	)
Interest expense		6,890			1,132
Interest income		(1,019	)		(951	)
Income taxes		3,440			39,735
Depreciation & amortization		16,541			6,500
EBITDA*	$	39,295		$	43,333
Acquisition and integration-related expenses		27,294			-
Charge for fair value write-up of acquired inventory sold		10,261			-
Adjusted EBITDA**	$	76,850		$	43,333
Adjusted EBITDA margin		34.7	%		31.0	%
Reconciliation of adjusted EBITDA by segment to Income before taxes
Segment adjusted EBITDA:
Electronic Materials	$	74,825		$	52,897
Performance Materials		13,067			1,288
Unallocated corporate expenses		(11,042	)		(10,852	)
Interest income		1,019			951
Interest expense		(6,890	)		(1,132	)
Depreciation and amortization		(16,541	)		(6,500	)
Charge for fair value write-up of acquired inventory sold		(10,261	)		-
Acquisition and integration-related expenses		(27,294	)		-
Income before income taxes	$	16,883		$	36,652
* EBITDA represents earnings before interest, taxes, depreciation and amortization
** Adjusted EBITDA is calculated by excluding items from EBITDA that are believed to be infrequent or not indicative of the company's continuing operating performance.

EX-99.2

 February 7, 2019    First Quarter of Fiscal 2019Earnings Call 

 2    Safe Harbor Statement  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. 

 First Quarter Highlights  3  Revenue of $222M; exceeded prior year by $82M, or 58%Driven by acquisition of KMG Chemicals, Inc. (“KMG”), and continued growth across IC CMP businessesKMG acquisition added $62M to revenue in approximately six weeks post-closing Record revenue in Cabot Microelectronics’ legacy business; 7th consecutive quarter of sequential increaseIC CMP consumables sales increased 3% sequentially, in line with expectationsRecord quarterly revenue in tungsten slurries and polishing padsStrong growth in memory and advanced logic applicationsNet Income of $13M; exceeded prior year by $17M Non-GAAP Net Income of $53M, up $22M, or 70%, and represents 24% of revenueDiluted EPS of $0.48; exceeded prior year by $0.60Non-GAAP Diluted EPS of $1.90, up $0.71, or 60% Adjusted EBITDA of $77M, up $34M, or 77%, and represents 35% of revenue  *Data represented by rounded valuesReference Appendix for GAAP to Non-GAAP reconciliation 

     GAAP Results*    Non-GAAP Results*      Comments on Results      2019 Q1  2018 Q1  2019 Q1  2018 Q1      Revenue    $221.8M  $140.0M        Record Revenue in the last 7 quarters, including 7th consecutive quarter of sequential increase in Cabot Microelectronics’ legacy business  Net Income (Loss)    $13.4M  ($3.1M)**  $52.9M  $31.1M    Increases reflect operating leverage driven by the addition of KMG and organic growth  Diluted EPS    $0.48  ($0.12)**  $1.90  $1.19      Adjusted EBITDA        $76.9M  $43.3M    Adjusted EBITDA, which excludes acquisition and integration-related expenses, increased $34M year-over-year  Adjusted EBITDA Margin        34.7%  31.0%      Financial Details  4    *Data represented by rounded values**Includes adverse impact of the U.S. Tax Cut and Jobs ActReference Appendix for GAAP to Non-GAAP reconciliation   

 New Reporting Segments    Legacy Cabot Microelectronics BusinessAcquired KMG Business        5 

 Segment and Business Revenue  6        As Reported      **Pro Forma            2019 Q1*  2018 Q1*    2019 Q1*  2018 Q1*    Total Revenue      $222M  $140M    $284M  $253M    Electronic Materials      $191M  $133M    $231M  $207M      CMP Slurries    $126M  $114M    $126M  $114M      CMP Pads    $25M  $19M    $25M  $19M      Electronic Chemicals    $40M  -    $80M  $74M    Performance Materials       $31M  $7M    $53M  $45M    *Data represented by rounded values **Pro Forma data represents calculations as if KMG results were included in total company results for the full quarter of each period represented  Quarter HighlightsCMP Slurries posted growth across all product lines Growth in CMP Pads continues to be driven by customer adoptionElectronic Chemicals benefited from increasing industry demandPerformance Materials grew 17% on a pro forma basis, primarily driven by pipeline performance business 

 Segment Financial Details  7      2019 Q1*  2018 Q1*  Electronic Materials Revenue    $191M  $133M  Adjusted EBITDA     $75M  ---  Adjusted EBITDA Margin    39.3%  ----  Performance Materials Revenue    $31M  $7M  Adjusted EBITDA     $13M  ---  Adjusted EBITDA Margin    41.9%  ---  *Data represented by rounded valuesAdjusted EBITDA for the Electronic Materials and Performance Materials segments is presented in conformity with Accounting Standards Codification Topic 280, Segment Reporting. This measure is reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance. For these reasons, this measure is excluded from the definition of non-GAAP financial measures under the SEC’s Regulation G and Item 10(e) of Regulation S-K.  

 Balance Sheet and Cash Flow  8  Incurred $1.065B in debt to finance KMG acquisitionHave converted approximately 70% of our variable rate debt to fixed rateCash balance of $209M as of December 31, 2018Operating Cash Flow was $14MCapital Expenditures were $8MContinued appropriate de-leveraging of the balance sheet remains a priority  *Data represented by rounded values 

 Closing Remarks  9  Revenue of $222M increased by approximately $82M, or 58%, from last yearDriven by additional revenues from the acquired KMG businesses and growth across all Cabot Microelectronics’ legacy businessesRecord revenue in the last 7 quarters, including 7th consecutive quarter of sequential increase in Cabot Microelectronics’ legacy businessIn line with expectationsNet Income of $13M; Non-GAAP Net Income of $53M increased by approximately $22M, or 70%, from last yearActivities taken through December 2018 to achieve the synergies expected to deliver $13M annually on a run-rate basisOn track to meet our goal of $25M of synergies on a run-rate basis at the end of the second year following the transaction   *Data represented by rounded values  

 10  Current Financial Guidance  *Based on sequential changes compared to first quarter of fiscal 2019 pro forma revenue as shown on slide 6**Excludes approximately $60 million in amortization of intangibles related to acquisitions***Excludes tax impact from acquisitions-related expenses      2019 Q2  FY2019  Segment   Electronic Materials Revenue  Down low single digit %*       Performance Materials Revenue  Up low single digit %*            Total Company   Revenue  Down low single digit %*       Adjusted EBITDA    $325M-$355M     Depreciation and Amortization**     $35M-$45M     Interest Expense   $13M-$14M  $47M-$50M     Tax Rate***    23%-26%     Capital Spending    $60M-$70M 

     Appendix 

 12  Reconciliation of GAAP Net Income to Non-GAAP Net Income(in millions)    Quarter Ended      December 31, 2018  December 31, 2017  GAAP Net Income (loss)  $13.4  ($3.1)  Amortization of acquisition-related intangibles  $9.4  $1.7   Charge for fair value write-up of acquired inventory sold  $10.3     Acquisition and integration-related expenses  $27.3    Impact of U.S. Tax Cuts and Jobs Act (Tax Act)   ($0.3)  $32.9  Tax effect on adjustments to net income  ($7.2)  ($0.4)  Non-GAAP Net Income   $52.9  $31.1 

 13  Reconciliation of GAAP Diluted EPS to Non-GAAP Diluted EPS    Quarter Ended      December 31, 2018  December 31, 2017  GAAP Diluted Earnings per Share  $0.48  ($0.12)  Effect of adjustments to net income  $1.42  $1.31  Non-GAAP Diluted Earnings per Share   $1.90  $1.19 

 14  Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA(in millions)    Quarter Ended      December 31, 2018  December 31, 2017  Net Income (Loss)  $13.4  ($3.1)  Interest expense  $6.9  $1.1  Interest income  ($1.0)  ($1.0)  Income taxes  $3.4   $39.8  Depreciation & amortization  $16.5  $6.5  EBITDA*   $39.3   $43.3  Acquisition and integration-related expenses  $27.3    Charge for fair value write-up of acquired inventory sold  $10.3    Adjusted EBITDA**   $76.9   $43.3   Adjusted EBITDA margin   34.7%  31.0%  *EBITDA represents earnings before interest, taxes, depreciation and amortization** Adjusted EBITDA is calculated by excluding items from EBITDA that are believed to be infrequent or not indicative of the company's continuing operating performance. 

 15  Reconciliation of Adjusted EBITDA by Segment to Income Before Taxes(in millions)    Quarter Ended      December 31, 2018  December 31, 2017  Segment Adjusted EBITDA*      Electronic Materials   $74.8    $52.9  Performance Materials  $13.1   $1.3   Unallocated corporate expenses  ($11.0)  ($10.9)  Interest income  $1.0   $1.0  Interest expense  ($6.9)  ($1.1)  Depreciation and amortization  ($16.5)  ($6.5)  Charge for fair value write-up of acquired inventory sold  ($10.3)     Acquisition and integration-related expenses  ($27.3)     Income before income taxes    $16.9    $36.7   * Represents earnings before interest, taxes, depreciation and amortization and also adjusted for acquisition and integration-related expenses and charge for fair value write-up of acquired inventory sold. 

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