Second quarter revenue up 43% year over year
Second quarter net income up 91% year over year
AURORA, IL, April 26, 2001 - Cabot Microelectronics Corporation (Nasdaq: CCMP), the leading supplier of chemical mechanical planarization (CMP) polishing slurries to the semiconductor industry, today reported results for its second fiscal quarter ended March 31, 2001.
Revenue for the quarter was $55.7 million, up 43%, compared to the prior-year results on a pro forma* basis. Net income was $9.4 million, up 91%, and diluted earnings per share were $0.39, up 86%, compared to prior-year pro forma results. Included in second quarter results is a $0.6 million reduction in cost of goods sold resulting from certain favorable inventory adjustments, which increased net income by $0.4 million ($0.02 per diluted share) in the quarter. Second quarter results also include a $0.9 million non-cash charge included in administrative expenses related to a stock option agreement, which decreased net income by $0.6 million ($0.02 per diluted share).
For the six-month fiscal period, revenues reached $124.3 million, an increase of 68% compared with pro forma revenues of $73.8 million in the same period last year. Net income for the six-month period was $23.8 million, up 147% and diluted earnings per share of $0.98 were up 139%, over the same period last year on a pro forma basis.
"Our strong growth year over year in both revenue and earnings demonstrates the fundamental value and essential nature of CMP in advanced IC device manufacturing, and the continued penetration of advanced technology like copper, feature shrinks and 300 mm," stated Dr. Matthew Neville, Cabot Microelectronics' Chairman and CEO. "However, as we indicated on March 12th, the significant inventory build of IC chips over the last several quarters and the weakening demand in most of the end market applications for electronic systems, compounded by the overall economic slowdown, has led to a rapid decline in semiconductor capacity utilization, capital spending and wafer starts, which has appeared most pronounced at semiconductor foundry manufacturers. The rapid and sudden decline in wafer starts of even the leading edge IC products has impacted our business. As a result, second quarter revenue was down 18.8% from our exceptionally strong 2001 first quarter, when we achieved record quarterly revenue of $68.6 million and net income of $14.4 million.
"Furthermore, we are unable to predict when the current industry situation will improve. Thus, it now does not appear likely that we will achieve our previous guidance for fiscal 2001 revenue growth of 50% or more, which was based on the assumptions we made earlier in the year about the rate of the burn off to normal levels of our customers' end market chip inventory and the overall economy. In response to the soft conditions we are experiencing, we have implemented more stringent spending controls and have postponed certain capacity-related capital investments. During this period, we will continue executing our strategies designed to enhance our market and technology leadership position so that we are able to emerge from this industry downturn with an even more compelling customer value proposition.
"We remain confident about our long-term growth prospects, in spite of the current challenges. The industry is continuing to invest in more advanced IC device manufacturing technology which involves smaller feature sizes, more layers, new materials and new processes. CMP is a critical value enhancer for our customers as they adopt these leading edge technologies. We also see potential growth of our customer base in pad, as well as rigid disk and magnetic head polishing technologies. Importantly, we continue to invest in all necessary research and development activities to maintain and enhance our industry technology leadership position," concluded Neville.
*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. These pro forma adjustments reduced reported net income for the three and six month periods ended March 31, 2000 by $1.3 million and $2.3 million, respectively. 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 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 Corporation
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.
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, 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 quarterly report on Form 10Q for the quarter ended December 31, 2000, 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.