AURORA, Ill., Oct 23, 2003 /PRNewswire-FirstCall via COMTEX/ -- 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 fourth fiscal quarter and for the year ended September 30, 2003.
Total revenue for the fourth fiscal quarter of 2003 was $67.9 million, up 5.6% on a sequential basis from $64.3 million in the prior quarter and up 4.0% from $65.3 million in the fourth quarter a year ago. The sequential increase is principally due to the absence of the $3.7 million adverse revenue impact the Company experienced in the prior quarter as it transitioned from a distributor to direct sales in Europe and Southeast Asia.
Overall revenue from the sale of slurries for polishing IC devices remained stable. However, after two consecutive quarters of double digit growth in revenue from the sale of slurry for polishing copper interconnects, this quarter saw a 7.9 % decrease from the record level last quarter. The decrease is primarily due to yield and efficiency gains captured by key customers in their manufacturing processes that reduced their slurry consumption, as well as a draw down of slurry inventory by several customers. Revenue from the sale of slurries for polishing tungsten and oxide, combined, increased sequentially by 10.4%.
Gross profit of $34.4 million in the fourth fiscal quarter was up sequentially from $32.9 million. During the quarter the Company recorded a $2.0 million charge related to the minimum purchase obligation of a raw material supply agreement for a polishing pad technology that was previously under development but is no longer being pursued. This supply obligation is associated with an older technology, unrelated to the Company's current pad strategy. As a percentage of revenue, gross profit of 50.7% was lower than last quarter's 51.2% as the effects of the minimum purchase obligation charge more than offset the positive effects of lower manufacturing costs and an improved product mix. Gross profit in the year ago quarter was $33.3 million, which represented 51.1% of revenue.
Operating expenses of $20.5 million, consisting of research and development (R&D), selling and marketing, and general and administrative expenses, were up sequentially $2.2 million, and were $3.9 million higher than the year ago quarter. These increases were mainly due to higher R&D spending on new product development, which is consistent with the Company's strategy of investing to maintain its technology leadership. Increased staffing, technology license agreement costs and higher development lab expenses contributed to the increase in R&D spending. Selling and marketing costs increased to strengthen our customer support.
Net income for the quarter was $9.6 million, compared to $9.8 million in the previous quarter and $11.5 million in the year ago quarter. Diluted earnings per share were $0.39 this quarter, compared to $0.40 in the previous quarter and $0.47 in the year ago quarter. Included in net income and diluted earnings per share in the quarter was a charge of $1.3 million, net of taxes, or $0.05 per share, related to the minimum purchase obligation.
For the 2003 fiscal year, revenues were $251.7 million, up 7.0% from fiscal 2002. Net income of $37.7 million in fiscal 2003 was down 7.3% from fiscal 2002. Diluted earnings per share in fiscal 2003 were $1.53 compared to $1.66 in fiscal 2002.
"We are pleased we were able to grow revenue again this year despite the difficult semiconductor industry environment," stated Dr. Matthew Neville, Cabot Microelectronics' Chairman and CEO. "We remain optimistic about the compelling growth drivers for CMP. As a result of our continued investments in R&D, operations excellence and customer support initiatives, we believe we are well positioned for the future in this challenging and competitive industry."
Cabot Microelectronics' quarterly earnings conference call will be held today at 9:00 a.m. Central Time. The live conference call and a subsequent replay will be available via webcast at www.cabotcmp.com. Access to the live call is also available by phone at 800-923-0061, access code 7436284. Callers outside of the U.S. can dial 706-634-5545. For assistance, call 630-499-2600. This press release, as well as the transcript of the formal comments made during the conference call, will be available in the Investor Relations section of the company's web site at www.cabotcmp.com.
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 manufacturers of integrated circuits to make smaller, faster and more complex devices and improve their production processes. For more information about Cabot Microelectronics, visit www.cabotcmp.com or call 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 described by these forward-looking statements. In particular, see "Risks Relating to Our Business" in Management's Discussion and Analysis in our quarterly report on Form 10-Q for the quarter ended June 30, 2003, and our Annual Report on Form 10-K for the fiscal year ended September 30, 2002, both filed with the SEC. Cabot Microelectronics Corporation assumes no obligation to update this forward- looking information.
Contact: William S. Johnson Vice President and Chief Financial Officer Cabot Microelectronics Corporation 630/375-6631 CABOT MICROELECTRONICS CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited and amounts in thousands, except per share amounts) Quarter Ended Twelve Months Ended Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30, 2003 2003 2002 2003 2002 Revenue $67,903 $64,288 $65,264 $251,665 $235,165 Cost of goods sold 33,458 31,360 31,946 124,269 113,067 Gross profit 34,445 32,928 33,318 127,396 122,098 Operating expenses: Research and development 12,469 10,803 10,102 41,516 33,668 Selling and marketing 3,338 2,751 2,469 11,221 9,667 General and administrative 4,607 4,655 3,917 18,225 17,458 Litigation settlement - - - - 1,000 Amortization of intangibles 85 85 74 340 345 Total operating expenses 20,499 18,294 16,562 71,302 62,138 Operating income 13,946 14,634 16,756 56,094 59,960 Other income (expense), net (111) 46 71 (27) 763 Income before income taxes 13,835 14,680 16,827 56,067 60,723 Provision for income taxes 4,186 4,918 5,377 18,334 20,038 Net income $9,649 $9,762 $11,450 $37,733 $40,685 Basic earnings per share $0.39 $0.40 $0.47 $1.55 $1.68 Weighted average basic shares outstanding 24,591 24,389 24,231 24,401 24,160 Diluted earnings per share $0.39 $0.40 $0.47 $1.53 $1.66 Weighted average diluted shares outstanding 25,049 24,639 24,501 24,665 24,565 CABOT MICROELECTRONICS CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited and amounts in thousands) September 30, September 30, 2003 2002 ASSETS: Current assets: Cash and cash equivalents $111,318 $69,605 Accounts receivable, net 37,564 26,082 Inventories, net 22,906 21,959 Other current assets 6,416 5,637 Total current assets 178,204 123,283 Property, plant and equipment, net 133,695 132,264 Other long-term assets 2,810 2,838 Total assets $314,709 $258,385 LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable $12,521 $11,748 Capital lease obligations 1,716 1,585 Accrued expenses, income taxes payable and other current liabilities 14,679 17,238 Total current liabilities 28,916 30,571 Long-term debt - 3,500 Capital lease obligations 7,452 8,865 Deferred income taxes and other long-term liabilities 7,476 1,943 Total liabilities 43,844 44,879 Stockholders' equity 270,865 213,506 Total liabilities and stockholders' equity $314,709 $258,385
SOURCE Cabot Microelectronics Corp.
William S. Johnson, Vice President and Chief Financial Officer of Cabot Microelectronics Corporation, +1-630-375-6631