Revenue for the fourth fiscal quarter ended September 30, 2002 was $65.3 million, up 26.9% from the fourth quarter a year ago. Net income for the quarter of $11.5 million, or $0.47 per diluted share, was up 24.1% from the fourth quarter a year ago. Compared to the near record level of revenue achieved in the third fiscal quarter of 2002, fourth quarter 2002 revenue was down 4.6%, as a result of reduced sales volumes of 8% while average selling prices increased 3.5%. This average selling price increase was primarily due to product mix.
Fourth quarter copper revenue increased 12.2% sequentially as the Company benefited from the semiconductor industry's continued ramp of this technology, while overall softening of demand in the semiconductor and data storage industries contributed to sequential revenue declines in the Company's other product lines.
Gross margins in the fourth fiscal quarter of 51.1% were slightly ahead of the 50.8% in the year ago fourth quarter, although down from the 53.0% earned in the third fiscal quarter of 2002. Included in the current fourth quarter's cost of goods sold is a $0.6 million final payment under a royalty obligation and $1.1 million of sequentially higher inventory-related expenses, mostly for the write-off of certain experimental, qualification and other products.
Operating expenses of $16.6 million were down sequentially by $0.4 million but were up $3.7 million from the year ago fourth quarter. Included in operating expenses are research and development expenses of $10.1 million in the 2002 fourth quarter, which increased by $3.8 million from the fourth quarter a year ago. This increase is primarily due to the higher level of R&D activity enabled by the Company's mid year opening of its new state-of-the-art class 1 clean room and R&D facility.
For the 2002 fiscal year, revenues were $235.2 million, up 3.5% from fiscal 2001. Net income of $40.7 million in fiscal 2002 was down 2.9% from fiscal 2001. Earnings per diluted share in fiscal 2002 were $1.66 compared to $1.72 in fiscal 2001. Net income and diluted earnings per share in fiscal 2002 were reduced by $0.7 million and $0.02, respectively, resulting from the settlement of certain patent litigation in the second fiscal quarter of 2002.
"I am pleased with our financial results and accomplishments this year given the overall difficult economic environment and its impact on the semiconductor industry," stated Dr. Matthew Neville, Cabot Microelectronics Chairman, President and CEO. "We were able to benefit from the industry's continued adoption of copper technology. Our copper product revenues for the fiscal year increased 115% over fiscal 2001. Unfortunately, in the last month of our fourth quarter, some of the strengthening in our product revenues which had occurred earlier in the spring and summer did not hold, and it also now appears we are entering fiscal 2003 with customers decreasing their level of demand for our products from these earlier levels. However, as a result of our many product development activities this year and the investments we've made that have furthered our research and development capabilities, I believe that we are well positioned to benefit from an industry recovery when it occurs.
"I am also pleased with a milestone reached in the fourth quarter in our pad program, through a distribution agreement we entered into with Freudenberg Nonwovens Limited, an existing pad supplier to the industry. Freudenberg's current products meet the needs of certain of the industry's existing pad applications, and we bring a strong channel to market for these products. We currently expect to have revenues from this program in 2003.
"In addition, we believe our position in the marketplace is strong. We have maintained our dedicated focus to meeting the technology needs of our customers and believe we have supported those initiatives with appropriate investments. For these reasons, we are optimistic about fiscal 2003," concluded Neville.
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 or www.ccbn.com. 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 www.cabotcmp.com 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 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 10Q for the quarter ended June 30, 2002 and our Annual Report on Form 10K for the fiscal year ended September 30, 2001, both filed with the SEC. Cabot Microelectronics Corporation assumes no obligation to update this forward- looking information.
CABOT MICROELECTRONICS CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands, except per share amounts) Quarter Ended (unaudited) Twelve Months Ended Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30, 2002 2002 2001 2002 2001 Revenue $65,264 $68,377 $51,411 $235,165 $227,192 Cost of goods sold 31,946 32,113 25,305 113,067 108,419 Gross profit 33,318 36,264 26,106 122,098 118,773 Operating expenses: Research and development 10,102 10,190 6,297 33,668 25,805 Selling and marketing 2,469 2,470 2,292 9,667 8,757 General and administrative 3,917 4,260 4,106 17,458 21,054 Litigation settlement - - - 1,000 - Amortization of goodwill and other intangibles 74 90 179 345 718 Total operating expenses 16,562 17,010 12,874 62,138 56,334 Operating income 16,756 19,254 13,232 59,960 62,439 Other income (expense), net 71 1,160 208 763 1,049 Income before income taxes 16,827 20,414 13,440 60,723 63,488 Provision for income taxes 5,377 7,147 4,217 20,038 21,586 Net income $11,450 $13,267 $9,223 $40,685 $41,902 Basic earnings per share $0.47 $0.55 $0.38 $1.68 $1.76 Weighted average basic shares outstanding 24,231 24,193 24,043 24,160 23,824 Diluted earnings per share $0.47 $0.54 $0.38 $1.66 $1.72 Weighted average diluted shares outstanding 24,501 24,521 24,510 24,565 24,327 CABOT MICROELECTRONICS CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (Amounts in thousands) September 30, September 30, 2002 2001 ASSETS: Current assets: Cash and cash equivalents $69,605 $47,677 Accounts receivable, net 26,082 26,735 Inventories, net 21,959 16,806 Other current assets 5,637 5,236 Total current assets 123,283 96,454 Property, plant and equipment, net 132,264 97,426 Other long-term assets 2,838 2,801 Total assets $258,385 $196,681 LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable $11,748 $13,557 Capital lease obligation 1,585 - Accrued expenses, income taxes payable and other current liabilities 17,238 12,809 Total current liabilities 30,571 26,366 Long-term debt 3,500 3,500 Capital lease obligation 8,865 - Deferred income taxes and other long- term liabilities 1,943 528 Total liabilities 44,879 30,394 Stockholders' equity 213,506 166,287 Total liabilities and stockholders' equity $258,385 $196,681CONTACT: Martin M. Ellen, Vice President and Chief Financial Officer of Cabot Microelectronics Corporation, 630-375-6631.
SOURCE Cabot Microelectronics Corp.
CONTACT: Martin M. Ellen, Vice President and Chief Financial Officer of Cabot Microelectronics Corporation, +1-630-375-6631 URL: http://www.cabotcmp.com http://www.prnewswire.com
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