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Cabot Microelectronics Reports Results for First Fiscal Quarter 2002

AURORA, Ill.--(BUSINESS WIRE)--Jan. 24, 2002--Cabot Microelectronics Corporation (Nasdaq: CCMP), the leading supplier of chemical mechanical planarization (CMP) polishing slurries to the semiconductor industry, today reported financial results for its first fiscal quarter ended December 31, 2001.

Revenue for the first fiscal quarter ended December 31, 2001 was $51.0 million, essentially flat on a sequential basis with revenue in the fourth fiscal quarter ended September 30, 2001. Compared to the record-breaking revenue level achieved in the first fiscal quarter a year ago, revenue was down 26% primarily as a result of the current semiconductor industry downturn and weak global economic conditions.

Gross profit margin in the quarter of 53.4% returned to the upper end of its range over the past year from the low rate of 50.8% experienced in the fiscal 2001 fourth quarter. Gross profit margin was

  • 52.5% in the year ago quarter. Operating expenses of $13.3 million were up sequentially $0.4 million or 3%, principally as a result of higher research and development spending consistent with the company's goal of maintaining its market technology leadership position. Operating expenses were down by $0.9 million, or 6% compared to the year ago quarter.

Operating income of $14.0 million rose sequentially by $0.7 million or almost 6% primarily as a result of the gross margin improvement, but was down when compared to a year ago by almost $8.0 million primarily due to the decline in revenue.

Net earnings of $9.0 million, $0.37 per diluted share, were down sequentially by $0.2 million, or 2%, from the fourth fiscal quarter of 2001 as the increase in operating income was offset by $0.3 million of non-recurring other expense and a sequentially higher effective income tax rate, as the first quarter estimated effective tax rate of 34% was higher than the 31.4% reported in the fourth fiscal quarter of 2001. When compared to the year ago quarter, net earnings were down $5.4 million, again due primarily to the lower level of revenue.

"Revenues have remained relatively flat over the last three quarters. This trend could be an indication that we and our customers may have hit the bottom of this cycle," stated Dr. Matthew Neville, Cabot Microelectronics' Chairman, President and CEO. "This quarter we continued to make progress in our customer-driven support initiatives, including the development of new and improved products to meet our customers' advancing technology needs. We believe we have made necessary strategic R&D and other investments during this industry downturn, while stringently managing all costs, enabling us to drive strong levels of profitability during this down cycle and positioning ourselves well for an upturn," concluded Neville.

Conference Call

Cabot Microelectronics' quarterly earnings conference call will be held today at 11:00 a.m. Central Time. The live conference call and a subsequent replay will be available via Webcast at or For assistance, call 1-630-499-2600.

About Cabot Microelectronics

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 or call 1-630-499-2600.

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, company and industry growth and trends, growth of this market, international events, 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 Relating to our Business" in Management's Discussion and Analysis in our Annual Report on Form 10K for the fiscal year ended September 30, 2001, filed with the SEC. Cabot Microelectronics Corporation assumes no obligation to update this forward-looking information.

                          (Tables to follow)

(Amounts in thousands, except per share amounts)

                                         Quarter Ended
                           Dec. 31,      Sept. 30,      Dec. 31,
                             2001           2001          2000
                          ------------  -------------  ------------

Revenue                      $ 51,004       $ 51,411      $ 68,616

Cost of goods sold             23,746         25,305        32,563
                          ------------  -------------  ------------

    Gross profit               27,258         26,106        36,053

Operating expenses:

  Research and development      6,947          6,297         6,538

  Selling and marketing         2,358          2,292         2,269

  General and administrative    3,884          4,106         5,147

  Amortization of goodwill 
    and other intangibles          90            179           179
                          ------------  -------------  ------------

    Total operating
     expenses                  13,279         12,874        14,133
                          ------------  -------------  ------------

Operating income               13,979         13,232        21,920

Other income (expense)           (317)           208           437
                          ------------  -------------  ------------

Income before income taxes     13,662         13,440        22,357

Provision for income taxes      4,645          4,217         7,918
                          ------------  -------------  ------------

    Net income                $ 9,017        $ 9,223      $ 14,439
                          ============  =============  ============

Basic net income per share      $0.37          $0.38         $0.61
                          ============  =============  ============

Weighted average basic
 shares outstanding            24,096         24,043        23,608
                          ============  =============  ============

Diluted net income per
 share                          $0.37          $0.38         $0.59
                          ============  =============  ============

Weighted average diluted
 shares outstanding            24,532         24,510        24,290
                          ============  =============  ============

(Unaudited and amounts in thousands)

                                           December 31,  September 30,
                                              2001           2001
                                          -------------  -------------

Current assets:
 Cash and cash equivalents                 $  58,374      $  47,677
 Accounts receivable, net                     19,899         26,735
 Inventories, net                             16,944         16,806
 Other current assets                          5,696          5,236
                                          -------------  -------------
    Total current assets                     100,913         96,454

Property, plant and equipment, net           111,189         97,426
Other long-term assets                         2,614          2,801
                                          -------------  -------------
    Total assets                           $ 214,716      $ 196,681
                                          =============  =============


Current liabilities:
 Accounts payable                          $  13,714      $  13,557
 Capital lease obligation                      1,221              -
 Accrued expenses, income taxes payable
   and other current liabilities              13,341         12,809
                                          -------------  -------------
    Total current liabilities                 28,276         26,366

Long-term debt                                 3,500          3,500
Capital lease obligation                       8,555              -
Deferred income taxes and other
  long-term liabilities                          565            528
                                          -------------  -------------
    Total liabilities                         40,896         30,394

Stockholders' equity                         173,820        166,287
                                          -------------  -------------
    Total liabilities and
      stockholders' equity                 $ 214,716      $ 196,681
                                          =============  =============


CONTACT: Cabot Microelectronics Corporation
Martin M. Ellen, 630/375-6631

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Aurora, IL 60504
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