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Cabot Microelectronics Reports Results for Second Fiscal Quarter 2003

Revenue Grew 8.6% This Quarter, Up 23.1% From a Year Ago

AURORA, Ill., Apr 24, 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 second fiscal quarter ended March 31, 2003.

Total revenue for the second fiscal quarter of 2003 was $62.2 million, up 8.6% on a sequential basis from $57.3 million in the prior quarter and up 23.1% from the second quarter a year ago. The majority of the increase from the prior quarter was due to higher sales volume in the Asia Pacific region, particularly Taiwan. On a product basis, the Company saw its most significant revenue growth this quarter from sales of its slurries for polishing copper, which represent the leading edge of CMP technology.

Gross profit in the second fiscal quarter of $30.4 million was up sequentially from $29.6 million. However, as a percentage of revenue, gross profit decreased from 51.7% last quarter to 48.9%. The percentage decline in gross profit resulted primarily from higher manufacturing costs incurred to meet increasing customer requirements for higher product quality and, to a lesser extent, new price arrangements in conjunction with certain broader strategic customer relationships. Gross profit in the year ago quarter was $25.3 million or 50.0% of revenue.

Operating expenses of $16.8 million, consisting of research and development (R&D), selling and marketing, and general and administrative expenses, were up sequentially by $1.2 million. The increase was mainly due to higher R&D spending on new product development. Operating expenses increased by $1.6 million from the year ago quarter, primarily due to increases in R&D efforts. The increase in R&D spending is consistent with the Company's strategy of investing to maintain its technology leadership.

Net income for the quarter was $9.1 million, compared to $9.3 million in the previous quarter and $7.0 million in the year ago quarter. Diluted earnings per share were $0.37 this quarter, compared to $0.38 in the previous quarter and $0.28 in the year ago quarter.

"We are pleased with our overall financial performance for the quarter in light of the continued difficult conditions in the semiconductor industry and global economy," stated Dr. Matthew Neville, Cabot Microelectronics, Chairman and CEO. "We continue to invest in R&D to maintain our technology leadership. In parallel with our historical technology focus, we are also increasing our emphasis on operations excellence in order to satisfy our customers' heightened performance requirements for our products to match their technology advances."

Conference Call

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 . For assistance, call 1-630-499-2600. This press release, as well as the script of the conference call, will be available in the Investor Relations section of the company's web site at .

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 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 10-Q for the quarter ended December 31, 2002, 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.

    (Unaudited and amounts in thousands, except per share amounts)

                                      Quarter Ended         Six Months Ended
                              March 31, Dec. 31, March 31, March 31, March 31,
                                 2003     2002     2002      2003      2002

    Revenue                    $62,201  $57,273  $50,520  $119,474  $101,524
    Cost of goods sold          31,786   27,665   25,262    59,451    49,008
      Gross profit              30,415   29,608   25,258    60,023    52,516

    Operating expenses:
      Research and development   9,609    8,635    6,429    18,244    13,376
      Selling and marketing      2,554    2,578    2,370     5,132     4,728
      General and
        administrative           4,595    4,368    5,397     8,963     9,281
      Litigation settlement          -        -    1,000         -     1,000
      Amortization of intangibles   85       85       91       170       181
        Total operating
          expenses              16,843   15,666   15,287    32,509    28,566
    Operating income            13,572   13,942    9,971    27,514    23,950
    Other income (expense), net     43       (5)    (151)       38      (468)
    Income before income taxes  13,615   13,937    9,820    27,552    23,482
    Provision for income taxes   4,561    4,669    2,869     9,230     7,514
      Net income                $9,054   $9,268   $6,951   $18,322   $15,968

    Basic earnings per share     $0.37    $0.38    $0.29     $0.75     $0.66

    Weighted average basic
     shares outstanding         24,346   24,300   24,140    24,325    24,119

    Diluted earnings per share   $0.37    $0.38    $0.28     $0.75     $0.65

    Weighted average diluted
     shares outstanding         24,593   24,579   24,583    24,589    24,558

    (Unaudited and amounts in thousands)

                                                  March 31,     September 30,
                                                     2003              2002

    Current assets:
      Cash and cash equivalents                     $87,886           $69,605
      Accounts receivable, net                       28,147            26,082
      Inventories, net                               22,869            21,959
      Other current assets                            6,391             5,637
        Total current assets                        145,293           123,283

    Property, plant and equipment, net              128,461           132,264
    Other long-term assets                            2,672             2,838
        Total assets                               $276,426          $258,385


    Current liabilities:
      Accounts payable                               $9,961           $11,748
      Capital lease obligations                       1,639             1,585
      Accrued expenses, income taxes
       payable and other current liabilities         16,957            17,238
        Total current liabilities                    28,557            30,571

    Long-term debt                                        -             3,500
    Capital lease obligations                         8,126             8,865
    Deferred income taxes and other long-
     term liabilities                                 2,820             1,943
        Total liabilities                            39,503            44,879

    Stockholders' equity                            236,923           213,506
        Total liabilities and
         stockholders' equity                      $276,426          $258,385

    Contact:  William S. Johnson
              Vice President and Chief Financial Officer
              Cabot Microelectronics Corporation

SOURCE Cabot Microelectronics Corp.

William S. Johnson, Vice President and Chief Financial Officer
of Cabot Microelectronics Corporation, +1-630-375-6631

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