Cabot Microelectronics Reports Results for Third Quarter of Fiscal 2005.AURORA Aurora, cities, United States Aurora (ərôr`ə, ô–). 1 City (1990 pop. 222,103), Adams and Arapahoe counties, N central Colo., a growing suburb on the east side of Denver; inc. 1903. , Ill. -- Cabot Microelectronics microelectronics, branch of electronic technology devoted to the design and development of extremely small electronic devices that consume very little electric power. Corporation (Nasdaq:CCMP CCMP Comprehensive Conservation and Management Plan CCMP Counter-Mode/CBC-Mac Protocol (IEEE 802.11I encryption algorithm) CCMP Capacitively Coupled Microwave Plasma CCMP Coalition of Concerned Medical Professionals ), the leading supplier of chemical mechanical planarization (CMP CMP (cytidine monophosphate): see cytosine. (1) (CMP Media LLC, Manhasset, NY, www.cmp.com) Part of United Business Media, CMP is a leading integrated media company that offers a wide variety of publications and services in the information ) polishing slurries to the semiconductor industry, today reported financial results for its third quarter of fiscal 2005, which ended June June: see month. 30, 2005. Total revenue for the third fiscal quarter was $65.0 million, up 0.8% from $64.5 million in the prior quarter and down 15.5% from $76.9 million in the third quarter a year ago. Combined revenue from the company's products for tungsten tungsten (tŭng`stən) [Swed.,=heavy stone], metallic chemical element; symbol W; at. no. 74; at. wt. 183.85; m.p. about 3,410°C;; b.p. 5,660°C;; sp. gr. 19.3 at 20°C;; valence +2, +3, +4, +5, or +6. and dielectric dielectric (dī'ĭlĕk`trĭk), material that does not conduct electricity readily, i.e., an insulator (see insulation). A good dielectric should also have other properties: It must resist breakdown under high voltages; it should not polishing applications increased sequentially by 3.7%, and revenue from its data storage slurry slurry, n a thin mixture of insoluble material floating in liquid. slurry solids in suspension. Used as a method of feeding pigs—slurry is pumped through fixed lines and delivered to troughs by hoses equipped with gasoline pump fittings. products increased slightly. Revenue from products for copper polishing applications decreased by 9.0% compared to the prior quarter, due to lower sales to the company's largest customer, a distributor in Taiwan Taiwan (tī`wän`), Portuguese Formosa, officially Republic of China, island nation (2005 est. pop. 22,894,000), 13,885 sq mi (35,961 sq km), in the Pacific Ocean, separated from the mainland of S China by the 100-mi-wide (161-km) Taiwan and China. The company attributes this mainly to a reduction of CMP slurry inventory by the distributor; sales of the company's copper slurries to its other customers increased in aggregate by 6.0% sequentially. The company's average selling price The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. fell by 2.8% this quarter compared to the prior quarter, primarily due to selected price reductions, along with the effect of Japanese yen “Yen” redirects here. For the other use, see Yen (disambiguation). “JPY” redirects here. For the Australian singer with the same moniker, see John Paul Young. to U.S. dollar exchange rate fluctuations. Gross profit for the quarter was $31.2 million, up 4.8% from $29.8 million in the prior quarter and down 20.0% from $39.0 million in the year ago quarter. As a percentage of revenue, gross profit represented 48.0% this quarter, up from 46.2% last quarter and down from 50.7% in the same quarter last year. Gross profit as a percentage of revenue improved this quarter largely due to a higher valued product mix, partially offset by selected price reductions. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. of $20.6 million, consisting of research and development, selling and marketing, and general and administrative expenses, decreased by $0.8 million sequentially from $21.4 million last quarter, and were $0.5 million lower than the $21.1 million reported in the same quarter last year. The sequential decrease was primarily related to lower staffing costs, including lower accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. for the company's annual bonus plan, partially offset by higher costs for cleanroom supplies in research and development and higher professional fees, including costs of the company's Sarbanes Oxley Section 404 compliance efforts. Net income for the quarter was $8.3 million, up 37.7% from the $6.1 million reported last quarter and down 31.9% from $12.2 million in the same quarter last year. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were $0.34 this quarter, compared to $0.25 in the previous quarter and $0.49 in the year ago quarter. "We believe that our results this quarter reflect a likely "bottoming" of the semiconductor industry downcycle that has affected portions of the industry recently, and which has negatively impacted our results thus far in fiscal 2005," stated William P. Noglows, Cabot Microelectronics' Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "However, we are encouraged by industry forecasts for a recovery in the second half of the calendar year. We are pleased with the progress we made last quarter in implementing our strategy of getting closer to our customers. We earned supplier quality awards from three important customers, and executed long term supply arrangements with two more customers. In addition, we have extended our Six Sigma Not to be confused with Sigma 6. Six Sigma is a set of practices originally developed by Motorola to systematically improve processes by eliminating defects.[1] A defect is defined as nonconformity of a product or service to its specifications. program, which previously had focused on internal improvement activities, to now incorporate joint projects with customers to improve quality and consistency in their manufacturing processes as well. We believe that these accomplishments are evidence of the enhanced trust and confidence we are building with many of our strategic customers. We are also focusing increasing energy on identifying and capturing growth opportunities that leverage our CMP technology CMP Technology (formerly CMP Media) is a business-to-business multimedia company that provides information and integrated marketing services to technology professionals worldwide. from the semiconductor industry into other technically demanding applications that are synergistic synergistic /syn·er·gis·tic/ (sin?er-jis´tik) 1. acting together. 2. enhancing the effect of another force or agent. syn·er·gis·tic adj. 1. to our core CMP slurry business. For example, we are actively pursuing a variety of surface modification applications where our technical ability to shape, enable and enhance the performance of surfaces at an atomic level can add value either through improved productivity or improved ultimate performance. We believe our strong balance sheet and cash flow provide us with the flexibility to both acquire business positions in a number of these areas as well as grow and develop organically, as appropriate to create value for our business and our customers." CONFERENCE CALL Cabot Microelectronics' quarterly earnings conference call will be held today at 9:00 a.m. Central Time. The live conference call will be available to all interested parties via webcast from the company's website, www.cabotcmp.com, or by phone at (800) 893-3008. Callers outside the U.S. can dial (706) 634-5531. For those who cannot listen to the live broadcast, a replay will be available through August 18, 2005 by calling (800) 642-1687 or (706) 645-9291, and using access code 4381279, or via webcast at www.cabotcmp.com. A transcript A generic term for any kind of copy, particularly an official or certified representation of the record of what took place in a court during a trial or other legal proceeding. A transcript of record of the formal comments made during the conference call will be available in the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the company's website. ABOUT CABOT MICROELECTRONICS Cabot Microelectronics Corporation, headquartered in Aurora, Illinois Aurora is the largest city in Kane County, Illinois. The city also lies within DuPage, Will and Kendall counties. As reported in the 2000 U.S. census, the city was home to 142,990 people, while the city's estimated 2006 population is 170,617. , is the leading supplier of CMP slurries for polishing various materials used in semiconductor manufacturing processes. 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. For more information about Cabot Microelectronics Corporation visit www.cabotcmp.com or contact Investor Relations at (630) 499-2600. SAFE HARBOR Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. STATEMENT This news release may include statements that constitute "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of federal securities regulations. These forward-looking statements include statements related to future sales and operating results, company and industry growth and trends, growth of the markets in which the company participates, international events, product performance, new product introductions, development of new products, technologies and markets, the acquisition of or investment in other entities, and the construction of new facilities by Cabot Microelectronics. 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 "Risks Relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Our Business" in Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial in our quarterly report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended March 31, 2005, and our Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended September 30, 2004, both filed with the SEC. Cabot Microelectronics Corporation 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 Nine Months Ended
----------------------------- -------------------
June 30, March 31, June 30, June 30, June 30,
2005 2005 2004 2005 2004
--------- --------- --------- --------- ---------
Revenue $65,037 $64,502 $76,925 $196,623 $226,719
Cost of goods sold 33,843 34,733 37,915 102,048 114,307
--------- --------- --------- --------- ---------
Gross profit 31,194 29,769 39,010 94,575 112,412
Operating expenses:
Research and
development 10,462 10,857 11,158 30,863 33,024
Selling and
marketing 3,938 4,012 4,235 12,126 12,381
General and
administrative 6,106 6,457 5,659 18,143 16,532
Amortization of
intangibles 85 85 85 255 255
--------- --------- --------- --------- ---------
Total operating
expenses 20,591 21,411 21,137 61,387 62,192
--------- --------- --------- --------- ---------
Operating income 10,603 8,358 17,873 33,188 50,220
Other income, net 969 458 72 1,914 22
--------- --------- --------- --------- ---------
Income before income
taxes 11,572 8,816 17,945 35,102 50,242
Provision for income
taxes 3,234 2,762 5,699 10,881 16,681
--------- --------- --------- --------- ---------
Net income $8,338 $6,054 $12,246 $24,221 $33,561
========= ========= ========= ========= =========
Basic earnings per
share $0.34 $0.25 $0.49 $0.98 $1.35
========= ========= ========= ========= =========
Weighted average
basic shares
outstanding 24,609 24,642 24,818 24,611 24,775
========= ========= ========= ========= =========
Diluted earnings per
share $0.34 $0.25 $0.49 $0.98 $1.35
========= ========= ========= ========= =========
Weighted average
diluted shares
outstanding 24,610 24,685 24,912 24,660 24,919
========= ========= ========= ========= =========
CABOT MICROELECTRONICS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited and amounts in thousands)
June 30, September 30,
2005 2004
------------- -------------
ASSETS:
Current assets:
Cash, cash equivalents and short-term
investments $165,702 $157,318
Accounts receivable, net 31,952 41,347
Inventories, net 32,702 24,474
Other current assets 10,910 6,542
------------- -------------
Total current assets 241,266 229,681
Property, plant and equipment, net 126,363 127,794
Other long-term assets 5,240 5,816
------------- -------------
Total assets $372,869 $363,291
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current
liabilities:
Accounts payable $8,612 $13,080
Capital lease obligations 1,150 1,272
Accrued expenses, income taxes payable
and other current liabilities 13,541 18,023
------------- -------------
Total current liabilities 23,303 32,375
Capital lease obligations 5,679 6,385
Deferred income taxes and other long-term
liabilities 9,615 8,909
------------- -------------
Total liabilities 38,597 47,669
Stockholders' equity 334,272 315,622
------------- -------------
Total liabilities and stockholders'
equity $372,869 $363,291
============= =============
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