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Cabot Microelectronics Reports Results for Fourth Fiscal Quarter 2001; Fiscal Year 2001 Revenue Up 26% and Full Year Net Income Up 42% Over Fiscal Year 2000

AURORA, Ill.--(BUSINESS WIRE)--Oct. 25, 2001--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 ended September 30, 2001.

Revenue for the quarter was $51.4 million, down 8.5% compared to the prior-year results on a pro forma(a) basis. On a sequential basis, fourth quarter revenue was essentially flat with the third quarter of this year. Net income was $9.2 million, down 14.4% from the prior-year pro forma results, but was up 4.1% sequentially. Diluted earnings per share were $0.38, compared to $0.44 in the prior-year fourth quarter pro forma results and $0.36 in the third quarter of this year.

For the fiscal year, revenues reached $227.2 million, an increase of 25.8% compared with pro forma revenues of $180.6 million last year. Net income for the fiscal year was $41.9 million, up 42.4% over last year on a pro forma basis and diluted earnings per share were $1.72, compared to $1.34 last year.

"Our fourth quarter results benefited from copper product revenues, which grew 56% sequentially from the third quarter and 2.5 times on a full year over year basis," stated Dr. Matthew Neville, Cabot Microelectronics' Chairman, President and CEO. "This demonstrates the continued technology advancements being made by our customers, through device feature shrinks and the adoption of copper wiring, notwithstanding the present severity of the semiconductor industry downturn. It also provides further evidence that leading edge technology chip activities appear to have been less impacted during this downturn than the industry as a whole. Our efforts at continuous product innovation during the quarter were not only evident in our copper results, but also in the market gains we experienced in the hard disk drive sector. These successes, coupled with tight control over discretionary costs, contributed to our 4% sequential quarterly earnings improvement.

"As we begin our new fiscal year, we are encouraged by the continued pace of technology advancement, which we expect to provide growth for our business over time. We remain more committed than ever to our customer-driven support initiatives, including developing new and improved products to support our customers' advancing technology needs, making all necessary strategic R&D and other investments, and stringently managing discretionary costs," concluded Neville.

(a)Pro Forma Reporting

To provide a consistent basis of comparison with current year results, prior year historical financial results are presented together with prior year results on a pro forma basis. 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. Pro forma adjustments also have been made to exclude certain one-time transactions associated with our separation from Cabot Corporation. These pro forma adjustments increased reported net income for the three months ended September 30, 2000 by $1.0 million while reducing reported net income for the fiscal year ended September 30, 2000 by $1.1 million. 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.

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 www.cabotcmp.com or www.streetfusion.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 anticipated 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, 2001, and our Annual Report on Form 10K for the fiscal year ended September 30, 2000, both filed with the SEC. Cabot Microelectronics Corporation assumes no obligation to update this forward-looking information.

(Tables to follow)

CABOT MICROELECTRONICS CORPORATION
PRO FORMA STATEMENTS OF INCOME
(Unaudited and in thousands, except per share amounts)

                                 Three Months        Twelve Months
                              Ended September 30   Ended September 30
                                2001      2000      2001      2000
                              --------- --------- --------- ---------

Revenue                        $ 51,411  $ 56,186  $227,192  $180,572

Cost of goods sold               25,305    27,182   108,419    90,478
                              --------- --------- --------- ---------
      Gross profit               26,106    29,004   118,773    90,094

Operating expenses:

   Research and development       6,297     5,244    25,805    19,762

   Selling and marketing          2,292     2,433     8,757     7,594

   General and administrative     4,106     5,114    21,054    16,219

   Amortization of goodwill 
    and other intangibles           179       180       718       718
                              --------- --------- --------- ---------
      Total operating 
       expenses                  12,874    12,971    56,334    44,293
                              --------- --------- --------- ---------
Operating income                 13,232    16,033    62,439    45,801

Other income (expense)              208         3     1,049      (499)
                              --------- --------- --------- ---------
Income before income taxes       13,440    16,036    63,488    45,302

Provision for income taxes        4,217     5,262    21,586    15,870
                              --------- --------- --------- ---------
      Net income               $  9,223  $ 10,774  $ 41,902  $ 29,432
                              ========= ========= ========= =========


Basic net income per share        $0.38     $0.46     $1.76     $1.39
                              ========= ========= ========= =========


Weighted average basic 
 shares outstanding              24,043    23,590    23,824    21,214
                              ========= ========= ========= =========


Diluted net income per share      $0.38     $0.44     $1.72     $1.34
                              ========= ========= ========= =========
Weighted average diluted 
 shares outstanding              24,510    24,353    24,327    21,888
                              ========= ========= ========= =========

    Notes to Unaudited Pro Forma Statements of Income:

    a.  Certain amounts in the prior fiscal year have been
        reclassified to conform with the current year presentation.

    b.  Pro forma results reflect the revenue and cost of goods sold
        which would have resulted had our dispersion services
        agreement and fumed metal oxide supply agreement with Cabot
        Corporation been in effect for the periods presented. Pro
        forma results also include interest expense which would have
        been incurred on the borrowings necessary to finance a
        dividend to Cabot Corporation and exclude a one-time charge of
        $2,113 related to stock options granted to non-Cabot
        Microelectronics employees and a one-time charge of $1,642 for
        the accelerated vesting of Cabot Microelectronics' employee
        incentive compensation and benefits at the time of the
        spin-off from Cabot Corporation.



CABOT MICROELECTRONICS CORPORATION
STATEMENTS OF INCOME
(Amounts in thousands, except per share amounts)


                                 Three Months        Twelve Months
                              Ended September 30   Ended September 30
                                2001      2000      2001      2000
                              --------- --------- --------- ---------
                                  (unaudited)

Revenue                        $ 51,411  $ 56,186  $227,192  $181,156

Cost of goods sold               25,305    27,182   108,419    86,290
                              --------- --------- --------- ---------
      Gross profit               26,106    29,004   118,773    94,866

Operating expenses:

   Research and development       6,297     5,244    25,805    19,762

   Selling and marketing          2,292     2,433     8,757     7,594

   General and administrative     4,106     6,756    21,054    19,974

   Amortization of goodwill 
    and other intangibles           179       180       718       718
                              --------- --------- --------- ---------
      Total operating 
       expenses                  12,874    14,613    56,334    48,048
                              --------- --------- --------- ---------
Operating income                 13,232    14,391    62,439    46,818

Other income (expense)              208         3     1,049       130
                              --------- --------- --------- ---------
Income before income taxes       13,440    14,394    63,488    46,948

Provision for income taxes        4,217     4,646    21,586    16,446
                              --------- --------- --------- ---------
      Net income               $  9,223  $  9,748  $ 41,902  $ 30,502
                              ========= ========= ========= =========

Basic net income per share        $0.38     $0.41     $1.76     $1.44
                              ========= ========= ========= =========
Weighted average basic 
 shares outstanding              24,043    23,590    23,824    21,214
                              ========= ========= ========= =========

Diluted net income per share      $0.38     $0.40     $1.72     $1.39
                              ========= ========= ========= =========
Weighted average diluted 
 shares outstanding              24,510    24,353    24,327    21,888
                              ========= ========= ========= =========

     Note to Statements of Income:

        Certain amounts in the prior fiscal year have been
        reclassified to conform with the current year presentation.


CABOT MICROELECTRONICS CORPORATION
CONDENSED BALANCE SHEETS
(Amounts in thousands)

                                     September 30,   September 30,
                                         2001            2000
                                     -------------   -------------

                             ASSETS:

Current assets:
     Cash and cash equivalents           $  47,677       $   9,971
     Accounts receivable, net               26,735          30,595
     Inventories, net                       16,806          14,014
     Other current assets                    5,236           4,473
                                     -------------   -------------
         Total current assets               96,454          59,053

Property, plant and equipment, net          97,426          71,873
Other long-term assets                       2,801           5,180
                                     -------------   -------------
         Total assets                    $ 196,681       $ 136,106
                                     =============   =============


         LIABILITIES AND STOCKHOLDERS' EQUITY:

Current liabilities:
     Accounts payable                    $  13,557       $  11,646
     Accrued expenses and other 
      current liabilities                   12,809          12,554
                                     -------------   -------------
         Total current liabilities          26,366          24,200

Long-term debt                               3,500           3,500
Deferred income taxes and other 
 long-term liabilities                         528             844
                                     -------------   -------------
         Total liabilities                  30,394          28,544

Stockholders' equity                       166,287         107,562
                                     -------------   -------------
         Total liabilities and 
          stockholders' equity           $ 196,681       $ 136,106
                                     =============   =============

--30--as/cgo*

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


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