EXHIBIT 99.1
PRESS RELEASE
Contact:
Trisha Tuntland
Director of Investor Relations
Cabot Microelectronics Corporation
(630) 499-2600
CABOT MICROELECTRONICS CORPORATION REPORTS RESULTS
FOR SECOND QUARTER OF FISCAL 2016
| · | Revenue of $99.2 Million Reflects Continued Soft Semiconductor Industry Demand, as Expected |
| · | GAAP Gross Profit Margin of 47.3 Percent of Revenue; Non-GAAP 48.4 Percent; Full Year GAAP Guidance Remains Unchanged at 49 to 51 Percent |
| · | GAAP Earnings Per Share of 37 Cents; Non-GAAP 41 Cents |
| · | Cash Flow From Operations of $25.4 Million; $15 Million of Share Repurchases |
AURORA, IL, April 28, 2016 – Cabot Microelectronics Corporation (Nasdaq: CCMP), the world's leading supplier of chemical mechanical planarization (CMP) polishing slurries and a growing CMP pad supplier to the semiconductor industry, today reported financial results for its second quarter of fiscal 2016, which ended March 31, 2016.
During the second fiscal quarter, total revenue was $99.2 million, reflecting continued soft semiconductor industry demand. Gross profit margin was 47.3 percent of revenue; non-GAAP gross profit margin was 48.4 percent of revenue, excluding amortization expense related to the company's acquisition of NexPlanar Corporation. The company recorded diluted earnings per share of $0.37 for the second fiscal quarter; non-GAAP diluted earnings per share were $0.41, excluding the NexPlanar amortization expense. Cash flow from operations was $25.4 million. During the quarter, the company purchased $15.0 million of stock under its share repurchase program. As of March 31, 2016, the company's balance sheet reflected a cash balance of $226.4 million and $159.7 million of debt outstanding. On April 15, the company paid its first regular quarterly cash dividend of $0.18 per share, or approximately $4.4 million in aggregate.
"This quarter we made significant progress on a number of strategic initiatives, although our financial results reflect continued soft semiconductor industry demand, consistent with my comments during our annual meeting on March 8," said David Li, President and CEO of Cabot Microelectronics. "During the quarter we won new business in CMP slurries, pads, and slurry-and-pad consumable sets. In particular, we advanced customer adoption of our new, high-performing colloidal silica-based dielectrics slurries. In pads, we continued the successful integration of our NexPlanar acquisition and are leveraging combined capabilities to speed customer adoption. We have qualified NexPlanar pads for a number of opportunities in less than six months – far shorter than our previous experience of generally 18 months or longer. Furthermore, in March we earned Intel's most prestigious award for suppliers, the Supplier Continuous Quality Improvement Award, for the fourth consecutive year, for our performance in 2015. We are proud of this repeated recognition, and also of the awards we have received from other customers over the years; we believe these awards are evidence of our ongoing ability to successfully deliver innovative, high-quality, high-performing, and reliable CMP solutions."
Mr. Li continued, "Looking ahead, we continue to expect stronger semiconductor industry demand in the second half of our fiscal year, and through the first month of our third fiscal quarter orders for our CMP products have notably strengthened. With our continued focus on executing our strategic initiatives, strengthening and growing our current business, and building our pipeline of new business opportunities, we are confident that we are well positioned to deliver profitable growth for our company, particularly with improving near term demand conditions, and in light of longer term industry trends."
Key Financial Information
Total second fiscal quarter revenue of $99.2 million represents a decrease of 5.4 percent compared to the same quarter last year, reflecting continued softness in demand within the global semiconductor industry, continued soft demand for PCs, and competitive dynamics within data storage applications, all of which the company has previously disclosed. Revenue from the company's CMP pads grew 35.1 percent year-over-year, and includes $5.4 million from NexPlanar. Foreign exchange effects reduced revenue by $1.1 million, primarily due to the weaker Korean won versus the U.S. dollar. Revenue for the first half of the fiscal year totaled $199.6 million, which is 7.9 percent lower than last year. The decrease reflects similar factors as in the second fiscal quarter, as well as competitive dynamics in certain dielectrics applications previously disclosed. Year to date revenue includes a $2.5 million adverse impact associated with foreign exchange rate changes, primarily the weaker Korean won and Japanese yen.
The company's full fiscal year GAAP gross profit guidance range of 49 to 51 percent of revenue, including NexPlanar, remains unchanged. Gross profit for the quarter was 47.3 percent, including $1.1 million of NexPlanar amortization expense. Excluding this amortization expense, non-GAAP gross profit was 48.4 percent of revenue, compared to 52.1 percent of revenue reported in the same quarter a year ago. Other factors impacting gross profit this quarter compared to last year include lower sales volume and higher fixed manufacturing costs, including NexPlanar costs, partially offset by lower incentive compensation costs. Year to date, gross profit was 48.6 percent of revenue, which includes $0.7 million of acquisition-related costs and $2.0 million of amortization expense related to NexPlanar. Excluding these costs, non-GAAP gross profit for the first half of the fiscal year was 50.0 percent of revenue, compared to 51.5 percent last year.
Operating expenses, which include research, development and technical, selling and marketing, and general and administrative expenses, were $34.6 million in the second fiscal quarter, including $0.5 million of NexPlanar amortization expense. Operating expenses were $0.6 million lower than the $35.2 million reported in the same quarter a year ago, primarily due to lower staffing related costs, including incentive compensation costs, and the absence of costs associated with last year's CEO transition, partially offset by NexPlanar staffing costs. Year to date, total operating expenses were $70.4 million, which includes $2.1 million of NexPlanar acquisition-related costs and $0.8 million of amortization expense. The company is lowering its full fiscal year guidance range for operating expenses to $139 million to $143 million, including NexPlanar; this is $2 million lower than the company's prior guidance range of $141 million to $145 million.
Net income for the quarter was $9.1 million, or $10.2 million on a non-GAAP basis, excluding NexPlanar amortization expense, down from $13.8 million reported in the same quarter last year. Net income was lower than in the same quarter last year primarily due to lower revenue and a lower gross profit margin. Year to date, net income was $20.4 million, or $24.1 million on a non-GAAP basis, excluding the referenced costs related to the NexPlanar acquisition, down from $33.7 million reported last year.
Diluted earnings per share were $0.37 this quarter, or $0.41 on a non-GAAP basis, excluding amortization expense related to the acquisition, compared to $0.55 reported in the second quarter of fiscal 2015. Year to date, diluted earnings per share were $0.83, or $0.98 on a non-GAAP basis, compared to $1.36 last year.
CONFERENCE CALL
Cabot Microelectronics Corporation's quarterly earnings conference call will be held today at 9:00 a.m. Central Time. The conference call will be available via live webcast and replay from the company's website, www.cabotcmp.com, or by phone at (844) 825-4410. Callers outside the U.S. can dial (973) 638-3236. The conference code for the call is 82779243. A transcript of the formal comments made during the conference call will also be available in the Investor Relations section of the company's website.
USE OF NON-GAAP FINANCIAL INFORMATION
The company presented the following measures considered as non-GAAP by the U.S. Securities and Exchange Commission: gross profit margin, net income and diluted earnings per share excluding the effects of NexPlanar acquisition-related costs and amortization expense. The non-GAAP financial information provided in this press release is a supplement to, and not a substitute for, the company's financial results presented in accordance with U.S. GAAP. These non-GAAP financial measures are provided to enhance the investor's understanding about the company's ongoing operations. Specifically, the company believes the NexPlanar acquisition-related costs and amortization expense are not indicative of its core operating results, and thus presents its gross profit margin, net income and diluted earnings per share excluding these costs. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for results prepared and presented in accordance with U.S. GAAP. A reconciliation table of GAAP to non-GAAP financial measures, including gross profit percentage, net income and diluted earnings per share, is contained in this press release.
ABOUT CABOT MICROELECTRONICS
Cabot Microelectronics Corporation, headquartered in Aurora, Illinois, is the world's leading supplier of CMP polishing slurries and a growing CMP pad supplier to the semiconductor industry. The company's products play a critical role in the production of advanced semiconductor devices, enabling the manufacture of smaller, faster and more complex devices by its customers. The company's mission is to create value by developing reliable and innovative solutions, through close customer collaboration, that solve today's challenges and help enable tomorrow's technology. The company has approximately 1,100 employees on a global basis. For more information about Cabot Microelectronics Corporation, visit www.cabotcmp.com or contact Trisha Tuntland, Director of Investor Relations at 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; growth or contraction, and trends in the industry and markets in which the company participates; the company's management; various economic factors and international events; regulatory or legislative activity; product performance; the generation, protection and acquisition of intellectual property, and litigation related to such intellectual property; new product introductions; development of new products, technologies and markets; the company's supply chain; natural disasters; the acquisition of or investment in other entities; uses and investment of the company's cash balance, including dividends and share repurchases, which may be suspended, terminated or modified at any time for any reason, based on a variety of factors; financing facilities and related debt, payment of principal and interest, and compliance with covenants and other terms; the company's capital structure; the company's current or future tax rate; and the operation of facilities by Cabot Microelectronics Corporation. 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 SEC, that could cause actual results to differ materially from those described by these forward-looking statements. In particular, see "Risk Factors" in the company's quarterly report on Form 10-Q for the quarter ended December 31, 2015 and in the company's annual report on Form 10-K for the fiscal year ended September 30, 2015, both filed with the SEC. Cabot Microelectronics assumes no obligation to update this forward-looking information.
