- Record Revenue of
$150.4 Million, $22.5 Millionor 18% Higher Than Last Year
- Gross Margin of 53.6%; Non-GAAP Gross Margin of 54.5%
- Record Net Income of
$35.2 Million, $15.2 Millionor 76% Higher Than Last Year; Non-GAAP Net Income of $36.0 Million
- Record Earnings Per Share of
$1.34, $0.57or 74% Higher Than Last Year; Non-GAAP Earnings Per Share of $1.37
Key Quarter Highlights
During the third fiscal quarter, the company delivered total revenue of
“We are proud of our accomplishments which include our fifth consecutive quarter of record revenue as well as record net income and EPS for our company this quarter,” said
Key Financial Information – Third Fiscal Quarter
- Revenue was
$150.4 million, which is $22.5 million, or 18%, higher compared to the same quarter last year. The company achieved record quarterly revenue in tungsten and dielectric slurries, which grew 18% and 21% year-over-year, respectively. Revenue in pads grew 19% year-over-year.
- Gross margin for the quarter was 53.6%, compared to 48.9% reported in the same quarter a year ago. Gross margin this quarter included
$1.3 millionof NexPlanar amortization expense. Excluding this, non-GAAP gross margin was 54.5%. Gross margin this quarter benefited from higher sales volume and a higher value product mix, partially offset by higher fixed manufacturing costs, including higher staffing related expense.
- Operating expenses, which include research, development and technical, selling and marketing, and general and administrative expenses, were
$38.8 millionin the third fiscal quarter. Operating expenses were $3.1 millionhigher than the same quarter a year ago, primarily due to higher staffing related expenses and professional fees.
- Net income for the quarter was
$35.2 million, which is $15.2 million, or 76%, higher than in the same quarter last year. Net income increased primarily due to higher revenue and higher gross margin, partially offset by higher operating expenses. Non-GAAP net income was $36.0 million, which is $15.0 million, or 71%, higher than the prior year.
- Diluted EPS was
$1.34this quarter, which is $0.57, or 74%, higher than in the third quarter of fiscal 2017. On a non-GAAP basis, diluted EPS was $1.37, which is $0.56, or 69%, higher than last year.
Key Financial Information – Fiscal Year 2018 to Date
- Revenue was
$433.4 million, which is $63.0 million, or 17%, higher than for the same period last year.
- Gross margin was 53.0% of revenue, compared to 49.7% last year. Non-GAAP gross margin for the first three quarters of the fiscal year, excluding the NexPlanar amortization expense, was 53.9%.
- Total operating expenses were
$113.6 million, which is $8.5 millionhigher than for the same period in the prior year. Operating expenses include approximately $1.4 millionof the above-referenced amortization expense.
- Net income was
$61.8 million, which is $1.4 million, or 2%, higher than for the same period last year. Net income includes the negative impact of the enactment of the U.S. Tax Cuts and Jobs Act (“tax act”), and the referenced amortization expense. Non-GAAP net income was $98.3 million, which is $34.7 million, or 54%, higher than for the same period last year.
- Diluted EPS was
$2.35, which is $0.02, or 1%, lower than for the same period last year, and includes the negative impact of the tax act. Non-GAAP diluted EPS was $3.74, which is $1.25, or 50%, higher than for the same period last year.
Guidance Update and Capital Deployment Details
The company currently expects a low single digit revenue increase for IC CMP consumables in the fourth fiscal quarter of 2018 compared to the prior quarter.
The company now expects its GAAP gross margin for the full fiscal year to be between 52% and 53%. This includes approximately 100 basis points of NexPlanar amortization expense.
Full fiscal year GAAP operating expenses are expected to be between
Additional current expectations are provided in the appendix section of the company’s related slide presentation referenced below.
As announced on
RELATED SLIDE PRESENTATION
A slide presentation related to this press release is 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.
Cabot Microelectronics Corporation’s quarterly earnings conference call will be held at
USE OF NON-GAAP FINANCIAL INFORMATION
The company presented the following measures considered as non-GAAP by the
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 act”) in
Director of Investor Relations
|CABOT MICROELECTRONICS CORPORATION|
|CONSOLIDATED STATEMENTS OF INCOME|
|(Unaudited and amounts in thousands, except per share amounts)|
|Quarter Ended||Nine Months Ended|
|June 30, 2018||March 31, 2018||June 30, 2017||June 30, 2018||June 30, 2017|
|Revenue||$ 150,437||$ 142,978||$ 127,957||$ 433,394||$ 370,395|
|Cost of goods sold||69,737||67,933||65,414||203,635||186,316|
|Research, development & technical||13,059||13,368||14,333||38,578||41,819|
|Selling & marketing||6,207||6,790||7,346||18,833||22,166|
|General & administrative||19,504||17,799||13,953||56,218||41,148|
|Total operating expenses||38,770||37,957||35,632||113,629||105,133|
|Other income, net||1,627||1,062||(115||)||3,361||1,115|
|Income before income taxes||43,044||36,992||25,679||116,688||76,659|
|Provision for income taxes||7,873||7,255||5,740||54,863||16,209|
|Net income||$ 35,171||$ 29,737||$ 19,939||$ 61,825||$ 60,450|
|Income available to common shareholders||$ 35,137||$ 29,707||$ 19,887||$ 61,752||$ 60,259|
|Basic earnings per share||$ 1.37||$ 1.16||$ 0.79||$2.42||$ 2.42|
|Weighted average basic shares outstanding||25,612||25,593||25,228||25,479||24,941|
|Diluted earnings per share||$ 1.34||$ 1.14||$ 0.77||$2.35||$ 2.37|
|Weighted average diluted shares outstanding||26,319||26,161||25,721||26,222||25,450|
|CABOT MICROELECTRONICS CORPORATION|
|CONSOLIDATED CONDENSED BALANCE SHEETS|
|(Unaudited and amounts in thousands)|
|June 30, 2018||September 30, 2017|
|Cash and cash equivalents||$ 186,124||$ 397,890|
|Short-term available-for-sale securities||124,455||-|
|Accounts receivable, net||74,017||64,793|
|Other current assets||29,008||16,426|
|Total current assets||490,906||550,982|
|Property, plant and equipment, net||108,569||106,361|
|Other long-term assets||160,007||176,757|
|Total assets||$ 759,482||$ 834,100|
|LIABILITIES AND STOCKHOLDERS' EQUITY:|
|Accounts payable||$ 18,290||$ 17,624|
|Current portion of long-term debt||-||10,938|
|Accrued expenses, income taxes payable and other current liabilities||72,009||62,651|
|Total current liabilities||90,299||91,213|
|Long-term debt, net of current portion||-||132,997|
|Other long-term liabilities||35,002||14,853|
|Total liabilities and stockholders' equity||$ 759,482||$ 834,100|
|U.S. GAAP to Non-GAAP Reconciliation
|(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 25, 2018.|
|Three Months Ended June 30, 2018||Nine Months Ended June 30, 2018|
|U.S. GAAP||Adjustments||Non-GAAP||U.S. GAAP||Adjustments||Non-GAAP|
|Gross profit (1)||$ 80,700||$ 1,310||$ 82,010||$ 229,759||$ 3,855||$ 233,614|
|Operating income (2)||41,930||1,777||43,707||116,130||5,257||121,387|
|Operating margin **||27.9%||29.1%||26.8%||28.0%|
|Net income (3)||$ 35,171||$ 806||$ 35,977||$ 61,825||$ 36,478||$ 98,303|
|Diluted earnings per share (4)||$ 1.34||$ 0.03||$ 1.37||$ 2.35||$ 1.39||$ 3.74|
|(1)||Non-GAAP gross profit for the three months ended June 30, 2018 excludes $1,310 of NexPlanar amortization expense.|
|Non-GAAP gross profit for the nine months ended June 30, 2018 excludes $3,855 of NexPlanar amortization expense.|
|(2)||Non-GAAP operating income for the three months ended June 30, 2018 excludes the item mentioned above in (1) plus $467 of NexPlanar amortization expense recorded in operating expenses.|
|Non-GAAP operating income for the nine months ended June 30, 2018 excludes the item mentioned above in (1) plus $1,402 of NexPlanar amortization expense recorded in operating expenses.|
|(3)||Non-GAAP net income for the three months ended June 30, 2018 excludes the items mentioned above in (1) and (2). These adjustments are partially offset by a $511 change in estimated withholding taxes and re-measurement of U.S. deferred tax assets and liabilities recorded in the first half of fiscal 2018 related to U.S. Tax Cuts and Jobs Act (Tax Act) enacted on December 22, 2017, and a $460 increase in the provision for income taxes related to excluding NexPlanar amortization.|
|Non-GAAP net income for the nine months ended June 30, 2018 excludes the items mentioned above in (1) and (2) plus $32,581 of tax expense due to Tax Act. These adjustments are partially offset by a $1,360 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 impact of the Tax Act increased diluted earnings per share by $0.02 for the three months ended June 30, 2018, and reduced diluted earnings per share by $1.24 for the nine months ended June 30, 2018.|
|*||Gross margin represents gross profit as a percentage of revenue.|
|**||Operating margin represents operating income as a percentage of revenue.|