Document_and_Entity_Informatio
Document and Entity Information (USD $) | 6 Months Ended | ||
Mar. 31, 2014 | Apr. 30, 2014 | Mar. 31, 2013 | |
Document and Entity Information [Abstract] | ' | ' | ' |
Entity Registrant Name | 'CABOT MICROELECTRONICS CORP | ' | ' |
Entity Central Index Key | '0001102934 | ' | ' |
Current Fiscal Year End Date | '--09-30 | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $787,314,700 |
Entity Common Stock, Shares Outstanding | ' | 24,115,362 | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'Q2 | ' | ' |
Document Type | '10-Q | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Mar-14 | ' | ' |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
CONSOLIDATED STATEMENTS OF INCOME [Abstract] | ' | ' | ' | ' |
Revenue | $99,456 | $100,364 | $199,971 | $206,897 |
Cost of goods sold | 52,931 | 52,019 | 105,732 | 108,513 |
Gross profit | 46,525 | 48,345 | 94,239 | 98,384 |
Operating expenses: | ' | ' | ' | ' |
Research, development and technical | 14,364 | 15,073 | 28,935 | 30,389 |
Selling and marketing | 6,471 | 7,046 | 13,178 | 14,155 |
General and administrative | 11,076 | 12,287 | 21,802 | 23,241 |
Total operating expenses | 31,911 | 34,406 | 63,915 | 67,785 |
Operating income | 14,614 | 13,939 | 30,324 | 30,599 |
Interest expense | 843 | 872 | 1,715 | 1,825 |
Other income, net | 103 | 463 | 720 | 1,317 |
Income before income taxes | 13,874 | 13,530 | 29,329 | 30,091 |
Provision for income taxes | 3,779 | 4,110 | 7,926 | 10,968 |
Net income | $10,095 | $9,420 | $21,403 | $19,123 |
Basic earnings per share | $0.42 | $0.41 | $0.89 | $0.84 |
Weighted average basic shares outstanding | 23,981,506 | 22,973,631 | 23,775,049 | 22,914,133 |
Diluted earnings per share | $0.40 | $0.40 | $0.86 | $0.81 |
Weighted average diluted shares outstanding | 24,897,337 | 23,871,025 | 24,749,041 | 23,754,672 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | ' | ' | ' | ' |
Net income | $10,095 | $9,420 | $21,403 | $19,123 |
Other comprehensive income: | ' | ' | ' | ' |
Foreign currency translation adjustment | -452 | -7,055 | -5,212 | -11,751 |
Unrealized Gain on Investment | 0 | 0 | 151 | 0 |
Other comprehensive income (loss), net of tax | -452 | -7,055 | -5,061 | -11,751 |
Total comprehensive income | $9,643 | $2,365 | $16,342 | $7,372 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $239,147 | $226,029 |
Accounts receivable, less allowance for doubtful accounts of $1,385 at March 31, 2014, and $1,532 at September 30, 2013 | 53,133 | 54,640 |
Inventories | 71,574 | 63,786 |
Prepaid expenses and other current assets | 18,152 | 13,598 |
Deferred income taxes | 7,941 | 7,659 |
Total current assets | 389,947 | 365,712 |
Property, plant and equipment, net | 106,178 | 111,985 |
Goodwill | 43,114 | 44,306 |
Other intangible assets, net | 8,347 | 9,785 |
Deferred income taxes | 8,599 | 10,291 |
Other long-term assets | 10,332 | 12,427 |
Total assets | 566,517 | 554,506 |
Current liabilities: | ' | ' |
Accounts payable | 14,331 | 16,663 |
Current portion of long-term debt | 13,125 | 10,938 |
Accrued expenses, income taxes payable and other current liabilities | 24,191 | 39,899 |
Total current liabilities | 51,647 | 67,500 |
Long-term debt, net of current portion | 144,375 | 150,937 |
Deferred income taxes | 1,097 | 1,559 |
Other long-term liabilities | 9,075 | 7,433 |
Total liabilities | 206,194 | 227,429 |
Commitments and contingencies (Note 9) | ' | ' |
Stockholders' equity: | ' | ' |
Common Stock: Authorized: 200,000,000 shares, $0.001 par value; Issued: 31,648,158 shares at March 31, 2014, and 30,213,577 shares at September 30, 2013 | 32 | 30 |
Capital in excess of par value of common stock | 423,180 | 376,206 |
Retained earnings | 202,229 | 180,826 |
Accumulated other comprehensive income | 12,375 | 17,436 |
Treasury stock at cost, 7,567,385 shares at March 31, 2014, and 6,866,675 shares at September 30, 2013 | -277,493 | -247,421 |
Total stockholders' equity | 360,323 | 327,077 |
Total liabilities and stockholders' equity | $566,517 | $554,506 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2014 | Sep. 30, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Current assets | ' | ' |
Allowance for doubtful accounts | $1,385 | $1,532 |
Stockholders' equity | ' | ' |
Common stock: Authorized | 200,000,000 | 200,000,000 |
Common stock: par value | $0.00 | $0.00 |
Common stock: Issued | 31,648,158 | 30,213,577 |
Treasury stock at cost, shares | 7,567,385 | 6,866,675 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash flows from operating activities: | ' | ' |
Net income | $21,403 | $19,123 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 9,908 | 10,638 |
Provision for doubtful accounts | -219 | 36 |
Share-based compensation expense | 7,791 | 7,303 |
Deferred income tax expense | 1,437 | 4,061 |
Non-cash foreign exchange loss | 45 | 3,653 |
(Gain)/loss on disposal of property, plant and equipment | -38 | 44 |
Impairment of property, plant and equipment | 2,144 | 38 |
Other | -294 | -2,279 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 773 | -1,952 |
Inventories | -8,920 | -3,284 |
Prepaid expenses and other assets | -3,798 | -3,485 |
Accounts payable | -1,603 | -3,817 |
Accrued expenses, income taxes payable and other liabilities | -14,206 | 90 |
Net cash provided by operating activities | 14,423 | 30,169 |
Cash flows from investing activities: | ' | ' |
Additions to property, plant and equipment | -7,340 | -5,546 |
Proceeds from the sale of property, plant and equipment | 160 | 14 |
Proceeds from the sale of investments | 2,130 | 25 |
Other investing activities | 1,062 | 0 |
Net cash used in investing activities | -3,988 | -5,507 |
Cash flows from financing activities: | ' | ' |
Repayment of long-term debt | -4,375 | -4,375 |
Repurchases of common stock | -30,072 | -21,290 |
Net proceeds from issuance of stock | 35,908 | 13,159 |
Tax benefits associated with share-based compensation expense | 2,246 | 707 |
Principal payments under capital lease obligations | 0 | -21 |
Net cash provided by (used in) financing activities | 3,707 | -11,820 |
Effect of exchange rate changes on cash | -1,024 | -2,947 |
Increase in cash and cash equivalents | 13,118 | 9,895 |
Cash and cash equivalents at beginning of period | 226,029 | 178,459 |
Cash and cash equivalents at end of period | 239,147 | 188,354 |
Supplemental disclosure of non-cash investing and financing activities: | ' | ' |
Purchases of property, plant and equipment in accrued liabilities and accounts payable at the end of the period | 697 | 1,171 |
Issuance of restricted stock | $7,785 | $5,926 |
BACKGROUND_AND_BASIS_OF_PRESEN
BACKGROUND AND BASIS OF PRESENTATION | 6 Months Ended |
Mar. 31, 2014 | |
BACKGROUND AND BASIS OF PRESENTATION [Abstract] | ' |
BACKGROUND AND BASIS OF PRESENTATION | ' |
CABOT MICROELECTRONICS CORPORATION | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
(Unaudited and in thousands, except share and per share amounts) | |
1. BACKGROUND AND BASIS OF PRESENTATION | |
Cabot Microelectronics Corporation ("Cabot Microelectronics'', "the Company'', "us'', "we'' or "our'') supplies high-performance polishing slurries and pads used in the manufacture of advanced integrated circuit (IC) devices within the semiconductor industry, in a process called chemical mechanical planarization (CMP). CMP is a polishing process used by IC device manufacturers to planarize or flatten many of the multiple layers of material that are deposited upon silicon wafers in the production of advanced ICs. Our products play a critical role in the production of advanced IC devices, thereby enabling our customers to produce smaller, faster and more complex IC devices with fewer defects. We develop, produce and sell CMP slurries for polishing many of the conducting and insulating materials used in IC devices, and also for polishing the disk substrates and magnetic heads used in hard disk drives. We also develop, manufacture and sell CMP polishing pads, which are used in conjunction with slurries in the CMP process. We also pursue other demanding surface modification applications through our Engineered Surface Finishes (ESF) business where we believe we can leverage our expertise in CMP consumables for the semiconductor industry to develop products for demanding polishing applications in other industries. For additional information, refer to Part 1, Item 1, "Business", in our annual report on Form 10-K for the fiscal year ended September 30, 2013. | |
The unaudited consolidated financial statements have been prepared by Cabot Microelectronics Corporation pursuant to the rules of the Securities and Exchange Commission (SEC) and accounting principles generally accepted in the United States of America. In the opinion of management, these unaudited consolidated financial statements include all normal recurring adjustments necessary for the fair presentation of Cabot Microelectronics' financial position as of March 31, 2014, cash flows for the six months ended March 31, 2014, and March 31, 2013, and results of operations for the three and six months ended March 31, 2014, and March 31, 2013. The results of operations for the three and six months ended March 31, 2014 may not be indicative of results to be expected for future periods, including the fiscal year ending September 30, 2014. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in Cabot Microelectronics' annual report on Form 10-K for the fiscal year ended September 30, 2013. | |
The consolidated financial statements include the accounts of Cabot Microelectronics and its subsidiaries. All intercompany transactions and balances between the companies have been eliminated as of March 31, 2014. | |
Results of Operations | |
The results of operations for the six months ended March 31, 2014 include an asset impairment charge of $2,111 ($1,475 net of tax) related to certain manufacturing assets recorded in the quarter ended March 31, 2014. This asset impairment charge included in cost of goods sold reduced our gross profit percentage by 210 basis points during the second quarter of fiscal 2014 and by 100 basis points on a year-to-date basis. The impairment charge reduced diluted earnings per share by approximately $0.06 during both the second quarter of fiscal 2014 and on a year-to-date basis. | |
With respect to the comparative period for the six months ended March 31, 2013, as noted in our Form 10-Q for the quarter ended March 31, 2013, the results of operations included a foreign tax adjustment, which was recorded during the first quarter of 2013, to correct prior period amounts, which we determined to be immaterial to the prior periods to which it related. This adjustment reduced net income for the first six months of fiscal 2013 by $1,686 and diluted earnings per share by approximately $0.07. This adjustment related to the reversal of a deferred tax asset for cumulative net operating losses (NOLs) associated with our facility in South Korea since its opening in fiscal year 2011, as these NOLs are expected to be consumed during periods in which a tax holiday is in effect for this facility. | |
FAIR_VALUE_OF_FINANCIAL_INSTRU
FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | ' | ||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | ' | ||||||||||||||||
2. FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||||||
Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The FASB established a three-level hierarchy for disclosure based on the extent and level of judgment used to estimate fair value. Level 1 inputs consist of valuations based on quoted market prices in active markets for identical assets or liabilities. Level 2 inputs consist of valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in an inactive market, or other observable inputs. Level 3 inputs consist of valuations based on unobservable inputs that are supported by little or no market activity. | |||||||||||||||||
The following table presents financial instruments, other than long-term debt, that we measured at fair value on a recurring basis at March 31, 2014 and September 30, 2013. See Note 7 for a detailed discussion of our long-term debt. We have chosen to not measure any of our other financial instruments at fair value as we believe their carrying value approximates their fair value. We have classified the following assets in accordance with the fair value hierarchy set forth in the applicable standards. In instances where the inputs used to measure the fair value of an asset fall into more than one level of the hierarchy, we have classified them based on the lowest level input that is significant to the determination of the fair value. | |||||||||||||||||
31-Mar-14 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Fair Value | |||||||||||||||||
Cash and cash equivalents | $ | 239,147 | $ | - | $ | - | $ | 239,147 | |||||||||
Auction rate securities (ARS) | - | - | 6,070 | 6,070 | |||||||||||||
Other long-term investments | 1,639 | - | - | 1,639 | |||||||||||||
Total | $ | 240,786 | $ | - | $ | 6,070 | $ | 246,856 | |||||||||
30-Sep-13 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Fair Value | |||||||||||||||||
Cash and cash equivalents | $ | 226,029 | $ | - | $ | - | $ | 226,029 | |||||||||
Auction rate securities (ARS) | - | - | 7,966 | 7,966 | |||||||||||||
Other long-term investments | 1,375 | - | - | 1,375 | |||||||||||||
Total | $ | 227,404 | $ | - | $ | 7,966 | $ | 235,370 | |||||||||
Our cash and cash equivalents consist of various bank accounts used to support our operations and investments in institutional money-market funds which are traded in active markets. The ARS and other long-term investments are included in other long-term assets on our Consolidated Balance Sheet. The fair value of our long-term ARS is determined through two discounted cash flow analyses, one using a discount rate based on a market index comprised of tax exempt variable rate demand obligations and one using a discount rate based on the LIBOR swap curve, adding a risk factor to reflect current liquidity issues in the ARS market. Our other long-term investments represent the fair value of investments under the Cabot Microelectronics Supplemental Employee Retirement Plan (SERP), which is a nonqualified supplemental savings plan. The fair value of the investments is determined through quoted market prices within actively traded markets. Although the investments are allocated to individual participants and investment decisions are made solely by those participants, the SERP is a nonqualified plan. Consequently, the Company owns the assets and the related offsetting liability for disbursement until such time a participant makes a qualifying withdrawal. The long-term asset was adjusted to $1,639 in the second quarter of fiscal 2014 to reflect its fair value as of March 31, 2014. | |||||||||||||||||
We applied accounting standards regarding the classification and valuation of financial instruments to the valuation of our investment in ARS at March 31, 2014. Our ARS investments at March 31, 2014 consisted of two tax exempt municipal debt securities with a total par value of $6,070. The ARS market began to experience illiquidity in early 2008, and this illiquidity continues. Despite this lack of liquidity, there have been no defaults in payment of the underlying securities and interest income on these holdings continues to be received on scheduled interest payment dates. Our ARS, when purchased, were issued by A-rated municipalities. Although the credit ratings of both municipalities have been downgraded since our original investment, one of the ARS is credit enhanced with bond insurance, and the other, as discussed below in this footnote, has become an obligation of the bond insurer. Both ARS currently carry a credit rating of AA- by Standard & Poor's. | |||||||||||||||||
Since an active market for ARS does not currently exist, we classify these investments as held-to-maturity and we determine the fair value of these investments using a Level 3 discounted cash flow analysis and also consider other factors such as the reduced liquidity in the ARS market and nature of the insurance backing. Key inputs to our discounted cash flow model include projected cash flows from interest and principal payments and the weighted probabilities of improved liquidity or debt refinancing by the issuer. We also incorporate certain Level 2 market indices into the discounted cash flow analysis, including published rates such as the LIBOR rate, the LIBOR swap curve and a municipal swap index published by the Securities Industry and Financial Markets Association. The following table presents a reconciliation of the activity in fiscal 2014 for fair value measurements using level 3 inputs: | |||||||||||||||||
Balance as of October 1, 2013 | $ | 7,966 | |||||||||||||||
Net sales of ARS | (2,130 | ) | |||||||||||||||
Reversal of temporary impairment | 234 | ||||||||||||||||
Balance as of March 31, 2014 | $ | 6,070 | |||||||||||||||
Based on our fair value assessment, we determined that one ARS continued to be impaired as of September 30, 2013. In November 2011, the municipality that issued our impaired ARS filed for bankruptcy protection. As a result of the approval of the municipality's reorganization plan, and our voting elections, we received 65 % of the par value outstanding, or $2,113, during the quarter ended December 31, 2013, and we reversed the $234 temporary impairment that we previously recorded. We believe that this ARS is no longer impaired as of March 31, 2014 based on: (1) the successful monetization of $2,130 of the par value of the security in accordance with a bankruptcy plan during the six months ended March 31, 2014; (2) the fact that the bond insurer is now responsible for servicing all future interest and principal payments; (3) the fact that all interest payments have been received; and (4) our intention not to sell the security nor be required to sell the security until the value is collected in full, which may be at maturity. As of March 31, 2014, this security has a fair value equal to its par value of $1,120. We determined that the fair value of the other ARS was not impaired as of March 31, 2014. See Note 5 for more information on these investments. | |||||||||||||||||
INVENTORIES
INVENTORIES | 6 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
INVENTORIES [Abstract] | ' | ||||||||
INVENTORIES | ' | ||||||||
3. INVENTORIES | |||||||||
Inventories consisted of the following: | |||||||||
31-Mar-14 | 30-Sep-13 | ||||||||
Raw materials | $ | 42,331 | $ | 38,004 | |||||
Work in process | 4,285 | 5,001 | |||||||
Finished goods | 24,958 | 20,781 | |||||||
Total | $ | 71,574 | $ | 63,786 | |||||
The increase in raw material and finished goods inventory is primarily due to higher raw material costs incurred and greater volume levels of certain raw materials maintained in fiscal 2014 in conjunction with certain Company sourcing initiatives, as well as an inventory build in expectation of higher sales in the second half of fiscal 2014 compared to the first half. | |||||||||
GOODWILL_AND_OTHER_INTANGIBLE_
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | ' | ||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | ||||||||||||||||
4. GOODWILL AND OTHER INTANGIBLE ASSETS | |||||||||||||||||
Goodwill was $43,114 as of March 31, 2014, and $44,306 as of September 30, 2013. The decrease in goodwill was due to foreign exchange fluctuations of the New Taiwan dollar. | |||||||||||||||||
The components of other intangible assets are as follows: | |||||||||||||||||
31-Mar-14 | 30-Sep-13 | ||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying | Accumulated Amortization | ||||||||||||||
Amount | |||||||||||||||||
Other intangible assets subject to amortization: | |||||||||||||||||
Product technology | $ | 8,271 | $ | 6,269 | $ | 8,362 | $ | 5,853 | |||||||||
Acquired patents and licenses | 8,270 | 7,378 | 8,270 | 7,196 | |||||||||||||
Trade secrets and know-how | 2,550 | 2,550 | 2,550 | 2,550 | |||||||||||||
Distribution rights, customer lists and other | 12,169 | 7,906 | 12,496 | 7,484 | |||||||||||||
Total other intangible assets subject to amortization | 31,260 | 24,103 | 31,678 | 23,083 | |||||||||||||
Total other intangible assets not subject to amortization* | 1,190 | 1,190 | |||||||||||||||
Total other intangible assets | $ | 32,450 | $ | 24,103 | $ | 32,868 | $ | 23,083 | |||||||||
* Total other intangible assets not subject to amortization consist primarily of trade names. | |||||||||||||||||
Amortization expense on our other intangible assets was $613 and $1,269 for the three and six months ended March 31, 2014, respectively. Amortization expense on our other intangible assets was $658 and $1,319 for the three and six months ended March 31, 2013, respectively. Estimated future amortization expense for the five succeeding fiscal years is as follows: | |||||||||||||||||
Fiscal Year | Estimated Amortization Expense | ||||||||||||||||
Remainder of 2014 | $ | 1,195 | |||||||||||||||
2015 | 2,380 | ||||||||||||||||
2016 | 1,970 | ||||||||||||||||
2017 | 1,144 | ||||||||||||||||
2018 | 452 | ||||||||||||||||
Goodwill and indefinite-lived intangible assets are tested for impairment annually in the fourth quarter of the fiscal year or more frequently if indicators of potential impairment exist, using a fair-value-based approach. The recoverability of goodwill is measured at the reporting unit level, which is defined as either an operating segment or one level below an operating segment. An entity has the option to assess the fair value of a reporting unit either using a qualitative analysis ("step zero") or a discounted cash flow analysis ("step one"). Similarly, an entity has the option to use a step zero or a step one approach to determine the recoverability of indefinite-lived intangible assets. In fiscal 2012, we used a step zero approach to assess the fair value of our reporting units and the recoverability of indefinite-lived intangible assets. In fiscal 2013, we chose to refresh our step one analysis for both goodwill impairment and for indefinite-lived intangible asset impairment. Changes in economic and operating conditions that occur after the annual impairment analysis or an interim impairment analysis that impact these assumptions may result in future impairment charges. | |||||||||||||||||
We completed our annual impairment test during our fourth quarter of fiscal 2013 and concluded that no impairment existed. There were no indicators of potential impairment during the six months ended March 31, 2014, so it was not necessary to perform an impairment review for goodwill and indefinite-lived intangible assets during the first six months of fiscal year 2014. There have been no cumulative impairment charges recorded on the goodwill for any of our reporting units. | |||||||||||||||||
OTHER_LONGTERM_ASSETS
OTHER LONG-TERM ASSETS | 6 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
OTHER LONG-TERM ASSETS [Abstract] | ' | ||||||||
OTHER LONG-TERM ASSETS | ' | ||||||||
5. OTHER LONG-TERM ASSETS | |||||||||
Other long-term assets consisted of the following: | |||||||||
31-Mar-14 | 30-Sep-13 | ||||||||
Auction rate securities | $ | 6,070 | $ | 7,966 | |||||
Other long-term assets | 2,623 | 3,086 | |||||||
Other long-term investments | 1,639 | 1,375 | |||||||
Total | $ | 10,332 | $ | 12,427 | |||||
As discussed in Note 2 of this Form 10-Q, the two ARS that we owned as of March 31, 2014 are classified as long-term investments. One of the securities is credit enhanced with bond insurance and the other is now an obligation of the bond insurer, and all interest payments continue to be received on a timely basis. Although we believe these securities will ultimately be collected in full, we believe that it is not likely that we will be able to monetize the securities in our next business cycle (which for us is generally one year). As discussed in Note 2, we received 65 % of the par value outstanding of one of the ARS, or $2,113, during the quarter ended December 31, 2013, and we reversed the $234 pretax reduction ($151 net of tax) in fair value on that ARS that we first recognized in fiscal 2008. We believe this security is no longer impaired based on: (1) the successful monetization of 65% of the par value of the security in accordance with a bankruptcy plan during the quarter ended December 31, 2013; (2) the fact that the bond insurer is now responsible for servicing all future interest and principal payments; (3) the fact that all interest payments have been received; and (4) our intention not to sell the security nor be required to sell the security until the value is collected in full, which may be at maturity. | |||||||||
As discussed in Note 2 of this Form 10-Q, we recorded a long-term asset and a corresponding long-term liability of $1,639 representing the fair value of our SERP investments as of March 31, 2014. | |||||||||
ACCRUED_EXPENSES_INCOME_TAXES_
ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES | 6 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES [Abstract] | ' | ||||||||
ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES | ' | ||||||||
6. ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES | |||||||||
Accrued expenses, income taxes payable and other current liabilities consisted of the following: | |||||||||
31-Mar-14 | 30-Sep-13 | ||||||||
Accrued compensation | $ | 11,314 | $ | 24,601 | |||||
Goods and services received, not yet invoiced | 3,729 | 4,681 | |||||||
Deferred revenue and customer advances | 372 | 458 | |||||||
Warranty accrual | 250 | 324 | |||||||
Income taxes payable | 4,762 | 6,931 | |||||||
Taxes, other than income taxes | 1,416 | 951 | |||||||
Other | 2,348 | 1,953 | |||||||
Total | $ | 24,191 | $ | 39,899 | |||||
The decrease in accrued compensation was primarily due to the payment of our annual incentive bonus program earned in fiscal 2013, partially offset by six months of accrual under our annual incentive bonus program related to fiscal 2014. | |||||||||
DEBT
DEBT | 6 Months Ended | ||||
Mar. 31, 2014 | |||||
DEBT [Abstract] | ' | ||||
DEBT | ' | ||||
8. DEBT | |||||
On February 13, 2012, we entered into a credit agreement (the "Credit Agreement") among the Company, as Borrower, Bank of America, N.A., as administrative agent, swing line lender and an L/C issuer, Bank of America Merrill Lynch and J.P. Morgan Securities LLC, as joint lead arrangers and joint book managers, JPMorgan Chase Bank, N.A., as syndication agent, and Wells Fargo Bank, N.A. as documentation agent. The Credit Agreement provided us with a $175,000 term loan (the "Term Loan"), which we drew on February 27, 2012 to fund approximately half of the special cash dividend we paid to our stockholders on March 1, 2012, and a $100,000 revolving credit facility (the "Revolving Credit Facility"), which remains undrawn, with sub-limits for multicurrency borrowings, letters of credit and swing-line loans. The Term Loan and the Revolving Credit Facility are referred to as the "Credit Facilities." The Credit Agreement provides for an uncommitted accordion feature that allows us to request the existing lenders or, if necessary, third-party financial institutions to provide additional capacity in the Revolving Credit Facility, in an amount not to exceed $75,000. The Credit Facilities are scheduled to expire on February 13, 2017. | |||||
Borrowings under the Credit Facilities (other than in respect of swing-line loans) bear interest at a rate per annum equal to the "Applicable Rate" (as defined below) plus, at our option, either (1) a LIBOR rate determined by reference to the cost of funds for deposits in the relevant currency for the interest period relevant to such borrowing or (2) the "Base Rate", which is the highest of (x) the prime rate of Bank of America, N.A., (y) the federal funds rate plus 1/2 of 1.00% and (z) the one-month LIBOR rate plus 1.00%. The initial Applicable Rate for borrowings under the Credit Facilities was 1.75% with respect to LIBOR borrowings and 0.25% with respect to Base Rate borrowings, with such Applicable Rate subject to adjustment based on our consolidated leverage ratio. Swing-line loans bear interest at the Base Rate plus the Applicable Rate for Base Rate loans under the Revolving Credit Facility. In addition to paying interest on outstanding principal under the Credit Agreement, we pay a commitment fee to the lenders under the Revolving Credit Facility in respect of the unutilized commitments thereunder at a rate ranging from 0.25% to 0.35%, based on our consolidated leverage ratio. Interest expense and commitment fees are paid according to the relevant interest period and no less frequently than at the end of each calendar quarter. We paid $2,658 in customary arrangement fees, upfront fees and administration fees, of which $550 and $1,010 remains in prepaid expenses and other current assets and other long-term assets, respectively, on our Consolidated Balance Sheet as of March 31, 2014. We must also pay letter of credit fees as necessary. The Term Loan has periodic scheduled repayments; however, we may voluntarily prepay the Credit Facilities without premium or penalty, subject to customary "breakage" fees and reemployment costs in the case of LIBOR borrowings. All obligations under the Credit Agreement are guaranteed by each of our existing and future direct and indirect domestic subsidiaries (the "Guarantors"). The obligations under the Credit Agreement and guarantees of those obligations are secured, subject to certain exceptions, by first priority liens and security interests in the assets of the Company and its domestic subsidiaries. | |||||
The Credit Agreement contains covenants that restrict the ability of the Company and its subsidiaries to take certain actions, including, among other things and subject to certain significant exceptions: creating liens, incurring indebtedness, making investments, engaging in mergers, selling property, paying dividends or amending organizational documents. The Credit Agreement requires us to comply with certain financial ratio maintenance covenants, including a maximum consolidated leverage ratio of 2.75 to 1.00 through June 30, 2014 and a minimum consolidated fixed charge coverage ratio of 1.25 to 1.00. The maximum consolidated leverage ratio will decrease to 2.50 to 1.00 from July 1, 2014 through the termination of the Credit Agreement. As of March 31, 2014, our consolidated leverage ratio was 1.48 to 1.00 and our consolidated fixed charge coverage ratio was 4.18 to 1.00. The Credit Agreement also contains customary affirmative covenants and events of default. We believe we are in compliance with these covenants. | |||||
At March 31, 2014, the fair value of the Term Loan, using level 2 inputs, approximates its carrying value of $157,500 as the loan bears a floating market rate of interest. As of March 31, 2014, $13,125 of the debt outstanding is classified as short-term. | |||||
Principal repayments of the Term Loan are generally made on the last calendar day of each quarter if that day is considered to be a business day. As of March 31, 2014, scheduled principal repayments of the Term Loan were as follows: | |||||
Fiscal Year | Principal Repayments | ||||
Remainder of 2014 | $ | 6,563 | |||
2015 | 15,312 | ||||
2016 | 21,875 | ||||
2017 | 113,750 | ||||
Total | $ | 157,500 |
DERIVATIVE_FINANCIAL_INSTRUMEN
DERIVATIVE FINANCIAL INSTRUMENTS | 6 Months Ended | |||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS [Abstract] | ' | |||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS | ' | |||||||||||||||||
8. DERIVATIVE FINANCIAL INSTRUMENTS | ||||||||||||||||||
Periodically we enter into forward foreign exchange contracts in an effort to mitigate the risks associated with currency fluctuations on certain foreign currency balance sheet exposures. Our foreign exchange contracts do not qualify for hedge accounting; therefore, the gains and losses resulting from the impact of currency exchange rate movements on our forward foreign exchange contracts are recognized as other income or expense in the accompanying consolidated income statements in the period in which the exchange rates change. We do not use derivative financial instruments for trading or speculative purposes. In addition, all derivatives, whether designated in hedging relationships or not, are required to be recorded on the balance sheet at fair value. At March 31, 2014, we had forward foreign exchange contracts to sell Japanese yen and British pound for the purpose of hedging the risk associated with a net transactional exposure in those currencies. | ||||||||||||||||||
The fair value of our derivative instruments included in the Consolidated Balance Sheet, which was determined using level 2 inputs, was as follows: | ||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||
Balance Sheet Location | Fair Value at March 31, 2014 | Fair Value at September 30, 2013 | Fair Value at March 31, 2014 | Fair Value at September 30, 2013 | ||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||
Foreign exchange contracts | Prepaid expenses and other current assets | $ | 40 | $ | 60 | $ | 101 | $ | - | |||||||||
Accrued expenses and other current liabilities | $ | - | $ | - | $ | - | $ | - | ||||||||||
The following table summarizes the effect of our derivative instruments on our Consolidated Statement of Income for the three and six months ended March 31: | ||||||||||||||||||
Gain (Loss) Recognized in Statement of Income | ||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||
Statement of Income Location | 31-Mar-14 | 31-Mar-13 | 31-Mar-14 | 31-Mar-13 | ||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||
Foreign exchange contracts | Other income, net | $ | 55 | $ | 82 | $ | (337 | ) | $ | 323 |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended | ||||
Mar. 31, 2014 | |||||
COMMITMENTS AND CONTINGENCIES [Abstract] | ' | ||||
COMMITMENTS AND CONTINGENCIES | ' | ||||
9. COMMITMENTS AND CONTINGENCIES | |||||
LEGAL PROCEEDINGS | |||||
While we are not involved in any legal proceedings that we believe will have a material impact on our consolidated financial position, results of operations or cash flows, we periodically become a party to legal proceedings in the ordinary course of business. | |||||
Refer to Note 16 of "Notes to the Consolidated Financial Statements" in Item 8 of Part II of our annual report on Form 10-K for the fiscal year ended September 30, 2013, for additional information regarding commitments and contingencies. | |||||
PRODUCT WARRANTIES | |||||
We maintain a warranty reserve that reflects management's best estimate of the cost to replace product that does not meet our specifications and customers' performance requirements, and costs related to such replacement. The warranty reserve is based upon a historical product replacement rate, adjusted for any specific known conditions or circumstances. Additions and deductions to the warranty reserve are recorded in cost of goods sold. Our warranty reserve activity during the first six months of fiscal 2014 was as follows: | |||||
Balance as of September 30, 2013 | $ | 324 | |||
Reserve for product warranty during the reporting period | 360 | ||||
Settlement of warranty | (434 | ) | |||
Balance as of March 31, 2014 | $ | 250 | |||
PURCHASE OBLIGATIONS | |||||
Purchase obligations include our take-or-pay arrangements with suppliers, and purchase orders and other obligations entered into in the normal course of business regarding the purchase of goods and services. We operate under a fumed silica supply agreement with Cabot Corporation, our former parent Company, which is not a related party, which requires us to purchase certain minimum quantities of fumed silica each year of the agreement, and to pay a shortfall if we purchase less than the minimum. The agreement became effective as of January 1, 2013 and has an initial term of four years. Purchase obligations include $89,547 of contractual commitments related to our Cabot Corporation agreement for fumed silica. | |||||
POSTRETIREMENT OBLIGATIONS IN FOREIGN JURISDICTIONS | |||||
As required by local law, we have defined benefit plans covering employees in certain foreign jurisdictions, which are unfunded. Benefit costs, consisting primarily of service costs, are recorded as fringe benefit expense under cost of goods sold and operating expenses in our Consolidated Statements of Income. The projected benefit obligations and accumulated benefit obligations under all such unfunded plans are updated annually during the fourth quarter of the fiscal year. Benefit payments under all such unfunded plans to be paid over the next 10 years are expected to be immaterial. For more information regarding these plans, refer to Note 16 of "Notes to the Consolidated Financial Statements" included in Item 8 of Part II of our annual report on Form 10-K for the fiscal year ended September 30, 2013. | |||||
SHAREBASED_COMPENSATION_PLANS
SHARE-BASED COMPENSATION PLANS | 6 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
SHARE-BASED COMPENSATION PLANS [Abstract] | ' | ||||||||||||||||
SHARE-BASED COMPENSATION PLANS | ' | ||||||||||||||||
10. SHARE-BASED COMPENSATION PLANS | |||||||||||||||||
We issue share-based awards under the following programs: our Cabot Microelectronics Corporation 2012 Omnibus Incentive Plan (OIP), our Cabot Microelectronics Corporation 2007 Employee Stock Purchase Plan, as Amended and Restated January 1, 2010 (ESPP), and, pursuant to the OIP, our Directors' Deferred Compensation Plan, as amended September 23, 2008 (DDCP), and our 2001 Executive Officer Deposit Share Program (DSP). Prior to March 2012, when our stockholders approved the OIP, we issued share-based payments under our Second Amended and Restated Cabot Microelectronics Corporation 2000 Equity Incentive Plan, as amended and restated September 23, 2008 (EIP); our ESPP, and, pursuant to the EIP, the DDCP and DSP. For additional information regarding these programs, refer to Note 11 of "Notes to the Consolidated Financial Statements" included in Item 8 of Part II of our annual report on Form 10-K for the fiscal year ended September 30, 2013. Other than the ESPP, all share-based payments granted beginning March 6, 2012 are made from the OIP, and the EIP is no longer available for any awards. | |||||||||||||||||
We record share-based compensation expense for all share-based awards, including stock option grants, restricted stock and restricted stock unit awards and employee stock purchase plan purchases. We calculate share-based compensation expense using the straight-line approach based on awards ultimately expected to vest, which requires the use of an estimated forfeiture rate. Our estimated forfeiture rate is primarily based on historical experience, but may be revised in future periods if actual forfeitures differ from the estimate. We use the Black-Scholes option-pricing model to estimate the grant date fair value of our stock options and employee stock purchase plan purchases. This model requires the input of highly subjective assumptions, including the price volatility of the underlying stock, the expected term of our stock options and the risk-free interest rate. We estimate the expected volatility of our stock options based on a combination of our stock's historical volatility and the implied volatilities from actively-traded options on our stock. We calculate the expected term of our stock options using historical stock option exercise data, and we add a slight premium to this expected term for employees who meet the definition of retirement eligible pursuant to their grants during the contractual term of the grant. The risk-free rate is derived from the U.S. Treasury yield curve in effect at the time of grant. | |||||||||||||||||
Share-based compensation expense for the three and six months ended March 31, 2014, and 2013, was as follows: | |||||||||||||||||
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Cost of goods sold | $ | 449 | $ | 403 | $ | 929 | $ | 915 | |||||||||
Research, development and technical | 352 | 310 | 718 | 676 | |||||||||||||
Selling and marketing | 307 | 324 | 660 | 710 | |||||||||||||
General and administrative | 3,317 | 2,772 | 5,484 | 5,002 | |||||||||||||
Total share-based compensation expense | 4,425 | 3,809 | 7,791 | 7,303 | |||||||||||||
Tax benefit | (1,593 | ) | (1,345 | ) | (2,685 | ) | (2,531 | ) | |||||||||
Total share-based compensation expense, net of tax | $ | 2,832 | $ | 2,464 | $ | 5,106 | $ | 4,772 | |||||||||
Our non-employee directors received annual equity awards in March 2014, pursuant to the OIP. The award agreements provide for immediate vesting of the award at the time of termination of service for any reason other than by reason of Cause, Death, Disability or a Change in Control, as defined in the OIP, if at such time the non-employee director has completed an equivalent of at least two full terms as a director of the Company, as defined in the Company's bylaws. Seven of the Company's non-employee directors had completed at least two full terms of service as of the date of the March 2014 award. Consequently, the requisite service period for the award has already been satisfied and we recorded the fair value of $1,325 of the awards to these seven directors to share-based compensation expense in the fiscal quarter ended March 31, 2014 rather than recording that expense over the one-year vesting period stated in the award agreement, as is done for the other non-employee director. | |||||||||||||||||
For additional information regarding the estimation of fair value, refer to Note 11 of "Notes to the Consolidated Financial Statements" included in Item 8 of Part II of our annual report on Form 10-K for the fiscal year ended September 30, 2013. | |||||||||||||||||
OTHER_INCOME_EXPENSE_NET
OTHER INCOME (EXPENSE), NET | 6 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
OTHER INCOME (EXPENSE), NET [Abstract] | ' | ||||||||||||||||
OTHER INCOME (EXPENSE), NET | ' | ||||||||||||||||
12. OTHER INCOME, NET | |||||||||||||||||
Other income, net, consisted of the following: | |||||||||||||||||
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Interest income | $ | 21 | $ | 33 | $ | 79 | $ | 78 | |||||||||
Other income (expense) | 82 | 430 | 641 | 1,239 | |||||||||||||
Total other income, net | $ | 103 | $ | 463 | $ | 720 | $ | 1,317 | |||||||||
Other income (expense) primarily represents the gains and losses recorded on transactions denominated in foreign currencies. The decrease in other income was primarily due to the impact of foreign currency fluctuations on monetary assets and liabilities denominated in currencies other than the functional currency, net of the gains and losses incurred on forward foreign exchange contracts discussed in Note 8 of this Form 10-Q. | |||||||||||||||||
INCOME_TAXES
INCOME TAXES | 6 Months Ended |
Mar. 31, 2014 | |
INCOME TAXES [Abstract] | ' |
INCOME TAXES | ' |
12. INCOME TAXES | |
Our effective income tax rate was 27.2 % and 27.0 % for the three and six months ended March 31, 2014 compared to a 30.4 % and 36.4 % effective income tax rate for the three and six months ended March 31, 2013. The decrease in the effective tax rate during the first six months of fiscal 2014 was primarily due to lower income tax expense on foreign earnings resulting from our election to permanently reinvest the earnings of our foreign subsidiaries, the absence of a $1,686 foreign tax adjustment, as discussed in Note 1 under the heading "Results of Operations", recorded in the first quarter of fiscal 2013, and the absence of a $1,015 valuation allowance on a deferred tax asset related to a former equity investment recorded in the second quarter of fiscal 2013. The Company was awarded a tax holiday in South Korea in conjunction with our investment in research, development and manufacturing facilities there. Subject to certain conditions, which we believe we have met, this arrangement allows for a 0 % tax rate in fiscal years 2013, 2014 and 2015, and a tax at 50 % of the local statutory rate in effect for fiscal years 2016 and 2017. This tax holiday reduced our income tax provision by approximately $1,643 in the first six months of fiscal 2014. | |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 6 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
EARNINGS PER SHARE [Abstract] | ' | ||||||||||||||||
EARNINGS PER SHARE | ' | ||||||||||||||||
13. EARNINGS PER SHARE | |||||||||||||||||
Basic earnings per share (EPS) is calculated by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the period, excluding the effects of unvested restricted stock awards with a right to receive non-forfeitable dividends, which are considered participating securities as prescribed by the two-class method under ASC 260. Diluted EPS is calculated in a similar manner, but the weighted-average number of common shares outstanding during the period is increased to include the weighted-average dilutive effect of "in-the-money" stock options and unvested restricted stock shares using the treasury stock method. | |||||||||||||||||
The standards of accounting for earnings per share require companies to provide a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations. Basic and diluted earnings per share were calculated as follows: | |||||||||||||||||
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Numerator: | |||||||||||||||||
Net income | $ | 10,095 | $ | 9,420 | $ | 21,403 | $ | 19,123 | |||||||||
Less: income attributable to participating securities | (133 | ) | - | (203 | ) | - | |||||||||||
Earnings available to common shares | $ | 9,962 | $ | 9,420 | $ | 21,200 | $ | 19,123 | |||||||||
Denominator: | |||||||||||||||||
Weighted average common shares | 23,981,506 | 22,973,631 | 23,775,049 | 22,914,133 | |||||||||||||
(Denominator for basic calculation) | |||||||||||||||||
Weighted average effect of dilutive securities: | |||||||||||||||||
Share-based compensation | 915,831 | 897,394 | 973,992 | 840,539 | |||||||||||||
Diluted weighted average common shares | 24,897,337 | 23,871,025 | 24,749,041 | 23,754,672 | |||||||||||||
(Denominator for diluted calculation) | |||||||||||||||||
Earnings per share: | |||||||||||||||||
Basic | $ | 0.42 | $ | 0.41 | $ | 0.89 | $ | 0.84 | |||||||||
Diluted | $ | 0.4 | $ | 0.4 | $ | 0.86 | $ | 0.81 | |||||||||
For the three months ended March 31, 2014 and 2013, approximately 0.5 million and 1.5 million shares, respectively, attributable to outstanding stock options were excluded from the calculation of diluted earnings per share because the exercise price of the options was greater than the average market price of our common stock and, therefore, their inclusion would have been anti-dilutive. | |||||||||||||||||
For the six months ended March 31, 2014 and 2013, approximately 0.5 million and 2.0 million shares, respectively, attributable to outstanding stock options were excluded from the calculation of diluted earnings per share because the exercise price of the options was greater than the average market price of our common stock and, therefore, their inclusion would have been anti-dilutive. | |||||||||||||||||
FINANCIAL_INFORMATION_BY_INDUS
FINANCIAL INFORMATION BY INDUSTRY SEGMENT, GEOGRAPHIC AREA AND PRODUCT LINE | 6 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
FINANCIAL INFORMATION BY INDUSTRY SEGMENT, GEOGRAPHIC AREA AND PRODUCT LINE [Abstract] | ' | ||||||||||||||||
FINANCIAL INFORMATION BY INDUSTRY SEGMENT, GEOGRAPHIC AREA AND PRODUCT LINE | ' | ||||||||||||||||
14. FINANCIAL INFORMATION BY INDUSTRY SEGMENT AND PRODUCT LINE | |||||||||||||||||
We operate predominantly in one industry segment – the development, manufacture, and sale of CMP consumables. | |||||||||||||||||
Revenue generated by product line for the three and six months ended March 31, 2014, and 2013, was as follows: | |||||||||||||||||
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||
Revenue: | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Tungsten slurries | $ | 37,559 | $ | 36,819 | $ | 74,928 | $ | 77,525 | |||||||||
Dielectric slurries | 29,121 | 29,734 | 59,067 | 60,092 | |||||||||||||
Other Metals slurries | 17,336 | 17,057 | 35,141 | 35,041 | |||||||||||||
Polishing pads | 7,760 | 7,402 | 15,170 | 15,866 | |||||||||||||
Data storage slurries | 4,486 | 5,424 | 9,468 | 10,486 | |||||||||||||
Engineered Surface Finishes | 3,194 | 3,928 | 6,197 | 7,887 | |||||||||||||
Total revenue | $ | 99,456 | $ | 100,364 | $ | 199,971 | $ | 206,897 | |||||||||
In past years, we have referred to "Other Metals slurries" as "Copper slurries", which included slurries for polishing copper, barrier and aluminum. To more accurately reflect changes within this product family, and in particular, growth in revenue for polishing aluminum, we now refer to this product family as "Other Metals slurries". |
NEW_ACCOUNTING_PRONOUNCEMENTS
NEW ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Mar. 31, 2014 | |
NEW ACCOUNTING PRONOUNCEMENTS [Abstract] | ' |
NEW ACCOUNTING PRONOUNCEMENTS | ' |
15. NEW ACCOUNTING PRONOUNCEMENTS | |
In July 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-11, "Income Taxes (Topic 740) – Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists" (ASU 2013-11). The provisions of ASU 2013-11 require an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward when the related deferred tax asset is available to be utilized. ASU 2013-11 is effective for us beginning October 1, 2014. We do not expect the adoption of ASU 2013-11 will have a material impact on our financial statements. | |
FAIR_VALUE_OF_FINANCIAL_INSTRU1
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | ' | ||||||||||||||||
Schedule of Fair Value of Financial Instruments | ' | ||||||||||||||||
The following table presents financial instruments, other than long-term debt, that we measured at fair value on a recurring basis at March 31, 2014 and September 30, 2013. See Note 7 for a detailed discussion of our long-term debt. We have chosen to not measure any of our other financial instruments at fair value as we believe their carrying value approximates their fair value. We have classified the following assets in accordance with the fair value hierarchy set forth in the applicable standards. In instances where the inputs used to measure the fair value of an asset fall into more than one level of the hierarchy, we have classified them based on the lowest level input that is significant to the determination of the fair value. | |||||||||||||||||
31-Mar-14 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Fair Value | |||||||||||||||||
Cash and cash equivalents | $ | 239,147 | $ | - | $ | - | $ | 239,147 | |||||||||
Auction rate securities (ARS) | - | - | 6,070 | 6,070 | |||||||||||||
Other long-term investments | 1,639 | - | - | 1,639 | |||||||||||||
Total | $ | 240,786 | $ | - | $ | 6,070 | $ | 246,856 | |||||||||
30-Sep-13 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Fair Value | |||||||||||||||||
Cash and cash equivalents | $ | 226,029 | $ | - | $ | - | $ | 226,029 | |||||||||
Auction rate securities (ARS) | - | - | 7,966 | 7,966 | |||||||||||||
Other long-term investments | 1,375 | - | - | 1,375 | |||||||||||||
Total | $ | 227,404 | $ | - | $ | 7,966 | $ | 235,370 | |||||||||
Schedule of Auction Rate Securities (ARS) Activity | ' | ||||||||||||||||
Since an active market for ARS does not currently exist, we classify these investments as held-to-maturity and we determine the fair value of these investments using a Level 3 discounted cash flow analysis and also consider other factors such as the reduced liquidity in the ARS market and nature of the insurance backing. Key inputs to our discounted cash flow model include projected cash flows from interest and principal payments and the weighted probabilities of improved liquidity or debt refinancing by the issuer. We also incorporate certain Level 2 market indices into the discounted cash flow analysis, including published rates such as the LIBOR rate, the LIBOR swap curve and a municipal swap index published by the Securities Industry and Financial Markets Association. The following table presents a reconciliation of the activity in fiscal 2014 for fair value measurements using level 3 inputs: | |||||||||||||||||
Balance as of October 1, 2013 | $ | 7,966 | |||||||||||||||
Net sales of ARS | (2,130 | ) | |||||||||||||||
Reversal of temporary impairment | 234 | ||||||||||||||||
Balance as of March 31, 2014 | $ | 6,070 |
INVENTORIES_Tables
INVENTORIES (Tables) | 6 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
INVENTORIES [Abstract] | ' | ||||||||
Schedule of inventories | ' | ||||||||
Inventories consisted of the following: | |||||||||
31-Mar-14 | 30-Sep-13 | ||||||||
Raw materials | $ | 42,331 | $ | 38,004 | |||||
Work in process | 4,285 | 5,001 | |||||||
Finished goods | 24,958 | 20,781 | |||||||
Total | $ | 71,574 | $ | 63,786 | |||||
GOODWILL_AND_OTHER_INTANGIBLE_1
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | ' | ||||||||||||||||
Components of other intangible assets | ' | ||||||||||||||||
The components of other intangible assets are as follows: | |||||||||||||||||
31-Mar-14 | 30-Sep-13 | ||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying | Accumulated Amortization | ||||||||||||||
Amount | |||||||||||||||||
Other intangible assets subject to amortization: | |||||||||||||||||
Product technology | $ | 8,271 | $ | 6,269 | $ | 8,362 | $ | 5,853 | |||||||||
Acquired patents and licenses | 8,270 | 7,378 | 8,270 | 7,196 | |||||||||||||
Trade secrets and know-how | 2,550 | 2,550 | 2,550 | 2,550 | |||||||||||||
Distribution rights, customer lists and other | 12,169 | 7,906 | 12,496 | 7,484 | |||||||||||||
Total other intangible assets subject to amortization | 31,260 | 24,103 | 31,678 | 23,083 | |||||||||||||
Total other intangible assets not subject to amortization* | 1,190 | 1,190 | |||||||||||||||
Total other intangible assets | $ | 32,450 | $ | 24,103 | $ | 32,868 | $ | 23,083 | |||||||||
* Total other intangible assets not subject to amortization consist primarily of trade names. | |||||||||||||||||
Estimated future amortization expense for the succeeding five fiscal years | ' | ||||||||||||||||
Amortization expense on our other intangible assets was $613 and $1,269 for the three and six months ended March 31, 2014, respectively. Amortization expense on our other intangible assets was $658 and $1,319 for the three and six months ended March 31, 2013, respectively. Estimated future amortization expense for the five succeeding fiscal years is as follows: | |||||||||||||||||
Fiscal Year | Estimated Amortization Expense | ||||||||||||||||
Remainder of 2014 | $ | 1,195 | |||||||||||||||
2015 | 2,380 | ||||||||||||||||
2016 | 1,970 | ||||||||||||||||
2017 | 1,144 | ||||||||||||||||
2018 | 452 |
OTHER_LONGTERM_ASSETS_Tables
OTHER LONG-TERM ASSETS (Tables) | 6 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
OTHER LONG-TERM ASSETS [Abstract] | ' | ||||||||
Schedule of other long term assets | ' | ||||||||
Other long-term assets consisted of the following: | |||||||||
31-Mar-14 | 30-Sep-13 | ||||||||
Auction rate securities | $ | 6,070 | $ | 7,966 | |||||
Other long-term assets | 2,623 | 3,086 | |||||||
Other long-term investments | 1,639 | 1,375 | |||||||
Total | $ | 10,332 | $ | 12,427 |
ACCRUED_EXPENSES_INCOME_TAXES_1
ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES (Tables) | 6 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES [Abstract] | ' | ||||||||
Schedule of accrued expenses, income taxes payable and other current liabilities | ' | ||||||||
Accrued expenses, income taxes payable and other current liabilities consisted of the following: | |||||||||
31-Mar-14 | 30-Sep-13 | ||||||||
Accrued compensation | $ | 11,314 | $ | 24,601 | |||||
Goods and services received, not yet invoiced | 3,729 | 4,681 | |||||||
Deferred revenue and customer advances | 372 | 458 | |||||||
Warranty accrual | 250 | 324 | |||||||
Income taxes payable | 4,762 | 6,931 | |||||||
Taxes, other than income taxes | 1,416 | 951 | |||||||
Other | 2,348 | 1,953 | |||||||
Total | $ | 24,191 | $ | 39,899 |
DEBT_Tables
DEBT (Tables) | 6 Months Ended | ||||
Mar. 31, 2014 | |||||
DEBT [Abstract] | ' | ||||
Schedule of Maturities of Long-term Debt | ' | ||||
Principal repayments of the Term Loan are generally made on the last calendar day of each quarter if that day is considered to be a business day. As of March 31, 2014, scheduled principal repayments of the Term Loan were as follows: | |||||
Fiscal Year | Principal Repayments | ||||
Remainder of 2014 | $ | 6,563 | |||
2015 | 15,312 | ||||
2016 | 21,875 | ||||
2017 | 113,750 | ||||
Total | $ | 157,500 |
DERIVATIVE_FINANCIAL_INSTRUMEN1
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended | |||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS [Abstract] | ' | |||||||||||||||||
Schedule of Fair Value of Derivative Instruments in the Consolidated Balance Sheet | ' | |||||||||||||||||
The fair value of our derivative instruments included in the Consolidated Balance Sheet, which was determined using level 2 inputs, was as follows: | ||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||
Balance Sheet Location | Fair Value at March 31, 2014 | Fair Value at September 30, 2013 | Fair Value at March 31, 2014 | Fair Value at September 30, 2013 | ||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||
Foreign exchange contracts | Prepaid expenses and other current assets | $ | 40 | $ | 60 | $ | 101 | $ | - | |||||||||
Accrued expenses and other current liabilities | $ | - | $ | - | $ | - | $ | - | ||||||||||
Schedule of the Effect of Derivative Instruments on the Consolidated Statement of Income | ' | |||||||||||||||||
The following table summarizes the effect of our derivative instruments on our Consolidated Statement of Income for the three and six months ended March 31: | ||||||||||||||||||
Gain (Loss) Recognized in Statement of Income | ||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||
Statement of Income Location | 31-Mar-14 | 31-Mar-13 | 31-Mar-14 | 31-Mar-13 | ||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||
Foreign exchange contracts | Other income, net | $ | 55 | $ | 82 | $ | (337 | ) | $ | 323 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended | ||||
Mar. 31, 2014 | |||||
COMMITMENTS AND CONTINGENCIES [Abstract] | ' | ||||
Schedule of product warranty reserve activity | ' | ||||
We maintain a warranty reserve that reflects management's best estimate of the cost to replace product that does not meet our specifications and customers' performance requirements, and costs related to such replacement. The warranty reserve is based upon a historical product replacement rate, adjusted for any specific known conditions or circumstances. Additions and deductions to the warranty reserve are recorded in cost of goods sold. Our warranty reserve activity during the first six months of fiscal 2014 was as follows: | |||||
Balance as of September 30, 2013 | $ | 324 | |||
Reserve for product warranty during the reporting period | 360 | ||||
Settlement of warranty | (434 | ) | |||
Balance as of March 31, 2014 | $ | 250 | |||
SHAREBASED_COMPENSATION_PLANS_
SHARE-BASED COMPENSATION PLANS (Tables) | 6 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
SHARE-BASED COMPENSATION PLANS [Abstract] | ' | ||||||||||||||||
Share based compensation expense | ' | ||||||||||||||||
Share-based compensation expense for the three and six months ended March 31, 2014, and 2013, was as follows: | |||||||||||||||||
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Cost of goods sold | $ | 449 | $ | 403 | $ | 929 | $ | 915 | |||||||||
Research, development and technical | 352 | 310 | 718 | 676 | |||||||||||||
Selling and marketing | 307 | 324 | 660 | 710 | |||||||||||||
General and administrative | 3,317 | 2,772 | 5,484 | 5,002 | |||||||||||||
Total share-based compensation expense | 4,425 | 3,809 | 7,791 | 7,303 | |||||||||||||
Tax benefit | (1,593 | ) | (1,345 | ) | (2,685 | ) | (2,531 | ) | |||||||||
Total share-based compensation expense, net of tax | $ | 2,832 | $ | 2,464 | $ | 5,106 | $ | 4,772 |
OTHER_INCOME_EXPENSE_NET_Table
OTHER INCOME (EXPENSE), NET (Tables) | 6 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
OTHER INCOME (EXPENSE), NET [Abstract] | ' | ||||||||||||||||
Other income (expense), net | ' | ||||||||||||||||
Other income, net, consisted of the following: | |||||||||||||||||
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Interest income | $ | 21 | $ | 33 | $ | 79 | $ | 78 | |||||||||
Other income (expense) | 82 | 430 | 641 | 1,239 | |||||||||||||
Total other income, net | $ | 103 | $ | 463 | $ | 720 | $ | 1,317 |
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 6 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
EARNINGS PER SHARE [Abstract] | ' | ||||||||||||||||
Earnings Per Share | ' | ||||||||||||||||
The standards of accounting for earnings per share require companies to provide a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations. Basic and diluted earnings per share were calculated as follows: | |||||||||||||||||
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Numerator: | |||||||||||||||||
Net income | $ | 10,095 | $ | 9,420 | $ | 21,403 | $ | 19,123 | |||||||||
Less: income attributable to participating securities | (133 | ) | - | (203 | ) | - | |||||||||||
Earnings available to common shares | $ | 9,962 | $ | 9,420 | $ | 21,200 | $ | 19,123 | |||||||||
Denominator: | |||||||||||||||||
Weighted average common shares | 23,981,506 | 22,973,631 | 23,775,049 | 22,914,133 | |||||||||||||
(Denominator for basic calculation) | |||||||||||||||||
Weighted average effect of dilutive securities: | |||||||||||||||||
Share-based compensation | 915,831 | 897,394 | 973,992 | 840,539 | |||||||||||||
Diluted weighted average common shares | 24,897,337 | 23,871,025 | 24,749,041 | 23,754,672 | |||||||||||||
(Denominator for diluted calculation) | |||||||||||||||||
Earnings per share: | |||||||||||||||||
Basic | $ | 0.42 | $ | 0.41 | $ | 0.89 | $ | 0.84 | |||||||||
Diluted | $ | 0.4 | $ | 0.4 | $ | 0.86 | $ | 0.81 |
FINANCIAL_INFORMATION_BY_INDUS1
FINANCIAL INFORMATION BY INDUSTRY SEGMENT, GEOGRAPHIC AREA AND PRODUCT LINE (Tables) | 6 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
FINANCIAL INFORMATION BY INDUSTRY SEGMENT, GEOGRAPHIC AREA AND PRODUCT LINE [Abstract] | ' | ||||||||||||||||
Schedule of revenue by product line | ' | ||||||||||||||||
Revenue generated by product line for the three and six months ended March 31, 2014, and 2013, was as follows: | |||||||||||||||||
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||
Revenue: | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Tungsten slurries | $ | 37,559 | $ | 36,819 | $ | 74,928 | $ | 77,525 | |||||||||
Dielectric slurries | 29,121 | 29,734 | 59,067 | 60,092 | |||||||||||||
Other Metals slurries | 17,336 | 17,057 | 35,141 | 35,041 | |||||||||||||
Polishing pads | 7,760 | 7,402 | 15,170 | 15,866 | |||||||||||||
Data storage slurries | 4,486 | 5,424 | 9,468 | 10,486 | |||||||||||||
Engineered Surface Finishes | 3,194 | 3,928 | 6,197 | 7,887 | |||||||||||||
Total revenue | $ | 99,456 | $ | 100,364 | $ | 199,971 | $ | 206,897 |
BACKGROUND_AND_BASIS_OF_PRESEN1
BACKGROUND AND BASIS OF PRESENTATION (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2012 | Mar. 31, 2014 | Mar. 31, 2013 |
BACKGROUND AND BASIS OF PRESENTATION [Abstract] | ' | ' | ' | ' |
Foreign income tax adjustment | ' | $1,686 | ' | $1,686 |
Diluted earnings per share effect of foreign income tax adjustment | ' | ' | ' | $0.07 |
Production Related Impairments or Charges, Total | 2,111 | ' | ' | ' |
Asset impairment charge to cost of goods sold, net of tax | $1,475 | ' | ' | ' |
Basis point reduction in gross profit percentage as a result of an asset impairment charge | 210 | ' | 100 | ' |
Diluted earnings per share effect of asset impairment charge | $0.06 | ' | $0.06 | ' |
FAIR_VALUE_OF_FINANCIAL_INSTRU2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) (USD $) | 3 Months Ended | 6 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Mar. 31, 2014 |
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | ' | ' |
Other long-term investments, Supplemental Employee Retirement Plan (SERP) | ' | $1,639 |
Corresponding SERP liability | ' | 1,639 |
Number of tax exempt municipal debt securities | ' | 2 |
Auction rate securities (ARS) par value | ' | 6,070 |
Fair value of formerly impaired security | ' | 1,120 |
Par value of formerly impaired security | ' | 1,120 |
Percentage of par value received from auction rate security settlement | 65.00% | ' |
Monetized par value of impaired security | $2,113 | $2,130 |
FAIR_VALUE_OF_FINANCIAL_INSTRU3
FAIR VALUE OF FINANCIAL INSTRUMENTS, Schedule of Fair Value of Financial Instruments (Details) (Fair Value, Measurements, Recurring [Member], USD $) | Mar. 31, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Cash and cash equivalents | $239,147 | $226,029 |
Auction rate securities (ARS) | 6,070 | 7,966 |
Other long-term investments | 1,639 | 1,375 |
Total | 246,856 | 235,370 |
Level 1 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Cash and cash equivalents | 239,147 | 226,029 |
Auction rate securities (ARS) | 0 | 0 |
Other long-term investments | 1,639 | 1,375 |
Total | 240,786 | 227,404 |
Level 2 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Cash and cash equivalents | 0 | 0 |
Auction rate securities (ARS) | 0 | 0 |
Other long-term investments | 0 | 0 |
Total | 0 | 0 |
Level 3 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Cash and cash equivalents | 0 | 0 |
Auction rate securities (ARS) | 6,070 | 7,966 |
Other long-term investments | 0 | 0 |
Total | $6,070 | $7,966 |
FAIR_VALUE_OF_FINANCIAL_INSTRU4
FAIR VALUE OF FINANCIAL INSTRUMENTS, Schedule of Auction Rate Securities (ARS) Activity (Details) (USD $) | 3 Months Ended | 6 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Mar. 31, 2014 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' |
Balance as of October 1, 2013 | $7,966 | $7,966 |
Net sales of ARS | ' | -2,130 |
Reversal of temporary impairment | 234 | 234 |
Balance as of March 31, 2014 | ' | $6,070 |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Mar. 31, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
INVENTORIES [Abstract] | ' | ' |
Raw materials | $42,331 | $38,004 |
Work in process | 4,285 | 5,001 |
Finished goods | 24,958 | 20,781 |
Total | $71,574 | $63,786 |
GOODWILL_AND_OTHER_INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Sep. 30, 2013 |
Goodwill [Roll Forward] | ' | ' | ' | ' | ' |
Beginning Balance | ' | ' | $44,306 | ' | ' |
Ending Balance | 43,114 | ' | 43,114 | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' |
Gross Carrying Amount subject to amortization | 31,260 | ' | 31,260 | ' | 31,678 |
Accumulated Amortization | 24,103 | ' | 24,103 | ' | 23,083 |
Other intangible assets [Abstract] | ' | ' | ' | ' | ' |
Amortization expense | 613 | 658 | 1,269 | 1,319 | ' |
Indefinite-lived Intangible Assets by Major Class [Line Items] | ' | ' | ' | ' | ' |
Gross Carrying Amount not subject to amortization | 1,190 | ' | 1,190 | ' | 1,190 |
Estimated future amortization expense [Abstract] | ' | ' | ' | ' | ' |
Remainder of 2014 | 1,195 | ' | 1,195 | ' | ' |
2015 | 2,380 | ' | 2,380 | ' | ' |
2016 | 1,970 | ' | 1,970 | ' | ' |
2017 | 1,144 | ' | 1,144 | ' | ' |
2018 | 452 | ' | 452 | ' | ' |
Total other intangible assets, gross carrying amount | 32,450 | ' | 32,450 | ' | 32,868 |
Product Technology [Member] | ' | ' | ' | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' |
Gross Carrying Amount subject to amortization | 8,271 | ' | 8,271 | ' | 8,362 |
Accumulated Amortization | 6,269 | ' | 6,269 | ' | 5,853 |
Acquired Patents and Licenses [Member] | ' | ' | ' | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' |
Gross Carrying Amount subject to amortization | 8,270 | ' | 8,270 | ' | 8,270 |
Accumulated Amortization | 7,378 | ' | 7,378 | ' | 7,196 |
Trade Secrets [Member] | ' | ' | ' | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' |
Gross Carrying Amount subject to amortization | 2,550 | ' | 2,550 | ' | 2,550 |
Accumulated Amortization | 2,550 | ' | 2,550 | ' | 2,550 |
Distribution Rights, Customer relationships, and Other [Member] | ' | ' | ' | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' |
Gross Carrying Amount subject to amortization | 12,169 | ' | 12,169 | ' | 12,496 |
Accumulated Amortization | $7,906 | ' | $7,906 | ' | $7,484 |
OTHER_LONGTERM_ASSETS_Details
OTHER LONG-TERM ASSETS (Details) (USD $) | 3 Months Ended | 6 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Mar. 31, 2014 | Sep. 30, 2013 |
OTHER LONG-TERM ASSETS [Abstract] | ' | ' | ' |
Auction rate securities | ' | $6,070 | $7,966 |
Other long-term assets | ' | 2,623 | 3,086 |
Other long-term investments | ' | 1,639 | 1,375 |
Total | ' | 10,332 | 12,427 |
Number of Auction rate securities | ' | 2 | ' |
Monetization of Auction Rate Securities | 2,113 | ' | ' |
Percentage of par value received from auction rate security settlement | 65.00% | ' | ' |
Reversal of temporary impairment | 234 | 234 | ' |
Reversal of temporary impairment net of tax | 151 | ' | ' |
Long-term liability, SERP investments | ' | $1,639 | ' |
ACCRUED_EXPENSES_INCOME_TAXES_2
ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES (Details) (USD $) | Mar. 31, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES [Abstract] | ' | ' |
Accrued compensation | $11,314 | $24,601 |
Goods and services received, not yet invoiced | 3,729 | 4,681 |
Deferred revenue and customer advances | 372 | 458 |
Warranty accrual | 250 | 324 |
Income taxes payable | 4,762 | 6,931 |
Taxes, other than income taxes | 1,416 | 951 |
Other | 2,348 | 1,953 |
Total | $24,191 | $39,899 |
DEBT_Details
DEBT (Details) (USD $) | 6 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Sep. 30, 2013 |
DEBT [Abstract] | ' | ' | ' |
Debt Instrument, Face Amount | $175,000 | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Debt Instrument, Maturity Date | 13-Feb-17 | ' | ' |
Debt issuance costs | ' | 2,658 | ' |
Debt issuance costs, current | 550 | ' | ' |
Debt issuance costs, noncurrent | 1,010 | ' | ' |
Line of Credit Facility, Covenant Terms | 'The Credit Agreement contains covenants that restrict the ability of the Company and its subsidiaries to take certain actions, including, among other things and subject to certain significant exceptions: creating liens, incurring indebtedness, making investments, engaging in mergers, selling property, paying dividends or amending organizational documents. The Credit Agreement requires us to comply with certain financial ratio maintenance covenants, including a maximum consolidated leverage ratio of 2.75 to 1.00 through June 30, 2014 and a minimum consolidated fixed charge coverage ratio of 1.25 to 1.00. The maximum consolidated leverage ratio will decrease to 2.50 to 1.00 from July 1, 2014 through the termination of the Credit Agreement. As of March 31, 2014, our consolidated leverage ratio was 1.48 to 1.00 and our consolidated fixed charge coverage ratio was 4.18 to 1.00. The Credit Agreement also contains customary affirmative covenants and events of default. We believe we are in compliance with these covenants. | ' | ' |
Long-term Debt, by Maturity [Abstract] | ' | ' | ' |
Remainder of 2014 | 6,563 | ' | ' |
2015 | 15,312 | ' | ' |
2016 | 21,875 | ' | ' |
2017 | 113,750 | ' | ' |
Long Term Debt | 157,500 | ' | ' |
Current portion of long-term debt | 13,125 | ' | 10,938 |
Repayment of long-term debt | -4,375 | -4,375 | ' |
Revolving Credit Facility [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Line of credit facility, borrowing capacity | 100,000 | ' | ' |
Line of Credit Facility, Additional Borrowing Capacity | 75,000 | ' | ' |
Line of Credit Facility, Interest Rate Description | 'In addition to paying interest on outstanding principal under the Credit Agreement, we pay a commitment fee to the lenders under the Revolving Credit Facility in respect of the unutilized commitments thereunder at a rate ranging from 0.25% to 0.35%, based on our consolidated leverage ratio. | ' | ' |
Line of Credit Facility Unused Capacity Commitment Fee Percentage Minimum | 0.25% | ' | ' |
Line of Credit Facility Unused Capacity Commitment Fee Percentage Maximum | 0.35% | ' | ' |
Term Loan [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Line of Credit Facility, Interest Rate Description | 'Borrowings under the Credit Facilities (other than in respect of swing-line loans) bear interest at a rate per annum equal to the "Applicable Rate" (as defined below) plus, at our option, either (1) a LIBOR rate determined by reference to the cost of funds for deposits in the relevant currency for the interest period relevant to such borrowing or (2) the "Base Rate", which is the highest of (x) the prime rate of Bank of America, N.A., (y) the federal funds rate plus 1/2 of 1.00% and (z) the one-month LIBOR rate plus 1.00%. The initial Applicable Rate for borrowings under the Credit Facilities was 1.75% with respect to LIBOR borrowings and 0.25% with respect to Base Rate borrowings, with such Applicable Rate subject to adjustment based on our consolidated leverage ratio. Swing-line loans bear interest at the Base Rate plus the Applicable Rate for Base Rate loans under the Revolving Credit Facility. | ' | ' |
Debt instrument, fair value | $157,500 | ' | ' |
DERIVATIVE_FINANCIAL_INSTRUMEN2
DERIVATIVE FINANCIAL INSTRUMENTS, Schedule of Fair Value of Derivative Instruments in the Consolidated Balance Sheet (Details) (Foreign Exchange Contract [Member], Not Designated as Hedging Instrument [Member], USD $) | Mar. 31, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Prepaid Expenses and Other Current Assets [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Fair value of foreign exchange contract asset derivatives | $40 | $60 |
Fair value of foreign exchange contract liability derivatives | 101 | 0 |
Accrued Expenses and Other Current Liabilities [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Fair value of foreign exchange contract asset derivatives | 0 | 0 |
Fair value of foreign exchange contract liability derivatives | $0 | $0 |
DERIVATIVE_FINANCIAL_INSTRUMEN3
DERIVATIVE FINANCIAL INSTRUMENTS, Schedule of the Effect of Derivative Instruments on the Consolidated Statement of Income (Details) (Foreign Exchange Contract [Member], Other Income (Expense), Net [Member], Not Designated as Hedging Instrument [Member], USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Foreign Exchange Contract [Member] | Other Income (Expense), Net [Member] | Not Designated as Hedging Instrument [Member] | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Gain (loss) recognized in statement of income | $55 | $82 | ($337) | $323 |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 6 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Sep. 30, 2013 |
Movement in standard product warranty accrual [Roll Forward] | ' | ' |
Balance as of September 30, 2013 | $324 | ' |
Reserve for product warranty during the reporting period | 360 | ' |
Settlement of warranty | -434 | ' |
Balance as of March 31, 2014 | 250 | 324 |
Purchase obligations [Abstract] | ' | ' |
Contract term | ' | '4 years |
Contractual commitments for fumed silica and fumed alumina under purchase obligations | $89,547 | ' |
SHAREBASED_COMPENSATION_PLANS_1
SHARE-BASED COMPENSATION PLANS (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Omnibus Incentive Plan [Abstract] | ' | ' | ' | ' |
Share based compensation expense | ' | ' | $7,791 | $7,303 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Stock based compensation expense | 4,425 | 3,809 | 7,791 | 7,303 |
Stock based compensation - tax benefit | -1,593 | -1,345 | -2,685 | -2,531 |
Total share-based compensation expense, net of tax | 2,832 | 2,464 | 5,106 | 4,772 |
Number of non-employee directors who have completed two full terms of service | 7 | ' | 7 | ' |
Fair value of awards for completing minimum full terms of service | 1,325 | ' | ' | ' |
Cost of Goods Sold [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Stock based compensation expense | 449 | 403 | 929 | 915 |
Research, Development and technical [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Stock based compensation expense | 352 | 310 | 718 | 676 |
Selling and Marketing [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Stock based compensation expense | 307 | 324 | 660 | 710 |
General and Administrative [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Stock based compensation expense | $3,317 | $2,772 | $5,484 | $5,002 |
OTHER_INCOME_EXPENSE_NET_Detai
OTHER INCOME (EXPENSE), NET (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Other Income (Expense) Net [Line Items] | ' | ' | ' | ' |
Total other income (expense), net | $103 | $463 | $720 | $1,317 |
Interest Income [Member] | ' | ' | ' | ' |
Other Income (Expense) Net [Line Items] | ' | ' | ' | ' |
Total other income (expense), net | 21 | 33 | 79 | 78 |
Other Income (Expense) Net [Member] | ' | ' | ' | ' |
Other Income (Expense) Net [Line Items] | ' | ' | ' | ' |
Total other income (expense), net | $82 | $430 | $641 | $1,239 |
INCOME_TAXES_1_Details
INCOME TAXES (1) (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2014 | Mar. 31, 2013 |
Income (loss) from continuing operations before income taxes [Abstract] | ' | ' | ' | ' | ' |
Total | $13,874 | $13,530 | ' | $29,329 | $30,091 |
Total U.S. and foreign | 3,779 | 4,110 | ' | 7,926 | 10,968 |
Effective income tax rate reconciliation [Abstract] | ' | ' | ' | ' | ' |
Provision for income taxes (in hundredths) | 27.20% | 30.40% | ' | 27.00% | 36.40% |
Foreign income tax adjustment | ' | ' | 1,686 | ' | 1,686 |
Valuation allowance on former equity investment | ' | 1,015 | ' | ' | ' |
Tax holiday rate percentage | 0.00% | ' | ' | 0.00% | ' |
Percentage of local statutory rate in effect for 2016 and 2017 | 50.00% | ' | ' | 50.00% | ' |
Income Tax Holiday, Aggregate Dollar Amount | ' | ' | ' | $1,643 | ' |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
EARNINGS PER SHARE [Abstract] | ' | ' | ' | ' |
Net income | $10,095 | $9,420 | $21,403 | $19,123 |
Undistributed Earnings Allocated to Participating Securities | -133 | 0 | -203 | 0 |
Earnings available to common shares | $9,962 | $9,420 | $21,200 | $19,123 |
Denominator: | ' | ' | ' | ' |
Weighted average common shares (Denominator for basic calculation, in shares) | 23,981,506 | 22,973,631 | 23,775,049 | 22,914,133 |
Weighted average effect of dilutive securities: | ' | ' | ' | ' |
Share-based compensation (in shares) | 915,831 | 897,394 | 973,992 | 840,539 |
Diluted weighted average common shares (Denominator for diluted calculation, in shares) | 24,897,337 | 23,871,025 | 24,749,041 | 23,754,672 |
Earnings per share: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.42 | $0.41 | $0.89 | $0.84 |
Diluted (in dollars per share) | $0.40 | $0.40 | $0.86 | $0.81 |
Outstanding stock options excluded from diluted earnings (in shares) | 500,000 | 1,500,000 | 500,000 | 2,000,000 |
FINANCIAL_INFORMATION_BY_INDUS2
FINANCIAL INFORMATION BY INDUSTRY SEGMENT, GEOGRAPHIC AREA AND PRODUCT LINE (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Sep. 30, 2013 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' |
Revenue | $99,456 | $100,364 | $199,971 | $206,897 | ' |
Property, plant and equipment, net | $106,178 | ' | $106,178 | ' | $111,985 |
FINANCIAL_INFORMATION_BY_INDUS3
FINANCIAL INFORMATION BY INDUSTRY SEGMENT, GEOGRAPHIC AREA AND PRODUCT LINE, SEGMENT REPORTING INFORMATION BY PRODUCT TYPE (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Revenue | $99,456 | $100,364 | $199,971 | $206,897 |
Tungsten slurry [Member] | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Revenue | 37,559 | 36,819 | 74,928 | 77,525 |
Dielectric slurry [Member] | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Revenue | 29,121 | 29,734 | 59,067 | 60,092 |
Other Metals slurries [Member] | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Revenue | 17,336 | 17,057 | 35,141 | 35,041 |
Polishing pads [Member] | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Revenue | 7,760 | 7,402 | 15,170 | 15,866 |
Data storage slurry [Member] | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Revenue | 4,486 | 5,424 | 9,468 | 10,486 |
Engineered Surface Finishes [Member] | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Revenue | $3,194 | $3,928 | $6,197 | $7,887 |