First quarter revenue up 97% year over year
Net income up 206% year over year
AURORA, IL, January 29, 2001 -- Cabot Microelectronics Corporation (Nasdaq: CCMP), the leading supplier of chemical mechanical planarization (CMP) polishing slurries to the semiconductor industry, today reported operating results for its first fiscal quarter ended December 31, 2000.
Compared to the prior-year pro forma* amounts, revenues for the quarter increased 97% to $68.6 million. Net income for the quarter increased 206% over the prior year to $14.4 million and diluted earnings per share grew to $0.59.
"Our record first quarter results exceeded our estimates and were primarily driven by two factors. First, most of our IC (integrated circuit) device manufacturing customers, who had been capacity-constrained in our third and fourth quarters, brought on more capacity for advanced IC's sooner than we had anticipated. As a result, demand for our high performance polishing slurries increased significantly, and our organization efficiently responded. Second, during the quarter our revenue growth outpaced the increase in costs," said Matthew Neville, Cabot Microelectronics Corporation's president and CEO. "Our record performance demonstrates the importance of CMP as an essential part of the production of leading edge IC devices, and our ability to meet our customers' needs."
During the quarter, Cabot Microelectronics benefited from revenue growth across all applications and regions. Gross profit was 52.5% of revenue, slightly higher than a year ago due to an improved product mix and increased plant utilization, but in line with recent quarters. "We have continued to invest in the selling, technical and administrative areas, resulting in a 46% increase over the prior year. We have leveraged these investments into a higher rate of sales growth, thereby resulting in net income increasing to 21% of revenue," stated Neville.
"We remain confident about our growth prospects for our 2001 fiscal year. The outlook for CMP and the production of advanced IC devices remains strong overall. Last year was a record year for IC unit production, and particularly strong in the last quarter due to new capacity additions during that period. We believe the slowing economy in the last quarter resulted in some increased inventory for certain end market applications. We expect this to have a short-term effect as this inventory is reduced to normal levels. In spite of this anticipated short-term effect, we are raising our expectations slightly for year over year performance. We anticipate revenue growth in excess of 50% and earnings between 16% and 18% of revenue, due to slightly higher growth and slightly lower costs for the overall year," stated Neville.
"CMP, which is critical to the manufacture of advanced IC devices, is the fastest growing sector and the least impacted by cyclical behavior of the semiconductor industry. Our customers continue to move toward smaller feature sizes, more layers, and larger wafers, and are ramping new materials, such as copper damascene. All of these advances drive the use of more CMP consumables. To anticipate and support our customers' rapidly growing needs in these areas, we will continue to invest in capacity and research and development," concluded Neville.
To provide a consistent basis of comparison, prior year financial results are presented on a pro forma basis. Certain pro forma adjustments have been made to present the results as they would have occurred if certain agreements entered into in connection with our separation from Cabot Corporation had been in place throughout the prior year. Cabot Microelectronics Corporation operated as the Microelectronics Materials Division of Cabot Corporation prior to its initial public offering on April 4, 2000. The spin-off of Cabot Microelectronics Corporation from Cabot Corporation was completed on September 29, 2000. See the notes to the statements of income for a list of adjustments.
Cabot Microelectronics' quarterly earnings conference call will be held today at 12:00 p.m. Central Time. The live conference call and a subsequent replay will be available via Webcast at www.cabotcmp.com or www.streetfusion.com. For assistance, call 1-630-499-2600.
Cabot Microelectronics Corp., headquartered in Aurora, Ill., is the leading supplier of CMP slurries for polishing various materials used in semiconductor manufacturing processes. These products enable IC manufacturers to make smaller, faster and more complex devices and improve their production processes. For more information on Cabot Microelectronics, visit www.cabotcmp.com or call 1-630-499-2600.
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, growth of this market, new product introductions and development of new products and technologies 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 the actual results to differ materially from those anticipated by these forward-looking statements. In particular, see "Risks Related to our Business" in Management's Discussion and Analysis in our annual report on Form 10K for the fiscal year ended September 30, 2000 filed with the SEC. Cabot Microelectronics Corporation assumes no obligation to update this forward-looking information.