Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CABOT MICROELECTRONICS CORP | |
Entity Central Index Key | 1,102,934 | |
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 Common Stock, Shares Outstanding | 25,682,590 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 |
UNAUDITED CONSOLIDATED STATEMEN
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME [Abstract] | ||||
Revenue | $ 142,978 | $ 119,184 | $ 282,957 | $ 242,438 |
Cost of goods sold | 67,933 | 59,153 | 133,898 | 120,902 |
Gross profit | 75,045 | 60,031 | 149,059 | 121,536 |
Operating expenses: | ||||
Research, development and technical | 13,368 | 14,090 | 25,519 | 27,486 |
Selling and marketing | 6,790 | 7,268 | 12,626 | 14,820 |
General and administrative | 17,799 | 14,699 | 36,714 | 27,195 |
Total operating expenses | 37,957 | 36,057 | 74,859 | 69,501 |
Operating income | 37,088 | 23,974 | 74,200 | 52,035 |
Interest expense | 1,158 | 1,135 | 2,290 | 2,285 |
Other income, net | 1,062 | 234 | 1,734 | 1,230 |
Income before income taxes | 36,992 | 23,073 | 73,644 | 50,980 |
Provision for income taxes | 7,255 | 4,793 | 46,990 | 10,469 |
Net income | $ 29,737 | $ 18,280 | $ 26,654 | $ 40,511 |
Basic earnings per share | $ 1.16 | $ 0.73 | $ 1.05 | $ 1.63 |
Weighted average basic shares outstanding (in shares) | 25,592,508 | 25,030,367 | 25,473,757 | 24,798,122 |
Diluted earnings per share | $ 1.14 | $ 0.71 | $ 1.02 | $ 1.60 |
Weighted average diluted shares outstanding (in shares) | 26,161,186 | 25,526,457 | 26,075,682 | 25,303,956 |
Dividends per share (in dollars per share) | $ 0.40 | $ 0.20 | $ 0.60 | $ 0.38 |
UNAUDITED CONSOLIDATED STATEME3
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | ||||
Net income | $ 29,737 | $ 18,280 | $ 26,654 | $ 40,511 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | 3,961 | 13,883 | 11,105 | (3,691) |
Unrealized gain on available-for-sale securities | 46 | 0 | 0 | 0 |
Net unrealized gain (loss) on cash flow hedges | (52) | 152 | 147 | 818 |
Other comprehensive income (loss), net of tax | 3,955 | 14,035 | 11,252 | (2,873) |
Comprehensive income | $ 33,692 | $ 32,315 | $ 37,906 | $ 37,638 |
UNAUDITED CONSOLIDATED BALANCE
UNAUDITED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2018 | Sep. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 461,434 | $ 397,890 |
Accounts receivable, less allowance for doubtful accounts of $1,817 at March 31, 2018, and $1,747 at September 30, 2017 | 70,086 | 64,793 |
Inventories | 76,813 | 71,873 |
Prepaid expenses and other current assets | 22,853 | 16,426 |
Total current assets | 631,186 | 550,982 |
Property, plant and equipment, net | 109,292 | 106,361 |
Goodwill | 102,915 | 101,932 |
Other intangible assets, net | 38,761 | 42,710 |
Deferred income taxes | 6,293 | 21,598 |
Other long-term assets | 10,526 | 10,517 |
Total assets | 898,973 | 834,100 |
Current liabilities: | ||
Accounts payable | 18,216 | 17,624 |
Current portion of long-term debt | 13,125 | 10,938 |
Accrued expenses, income taxes payable and other current liabilities | 62,492 | 62,651 |
Total current liabilities | 93,833 | 91,213 |
Long-term debt, net of current portion, less prepaid debt issuance cost of $315 at March 31, 2018, and $441 at September 30, 2017 | 124,373 | 132,997 |
Deferred income taxes | 65 | 63 |
Other long-term liabilities | 45,191 | 14,790 |
Total liabilities | 263,462 | 239,063 |
Commitments and contingencies (Note 10) | ||
Stockholders' equity: | ||
Common Stock: Authorized: 200,000,000 shares, $0.001 par value; Issued: 35,747,299 shares at March 31, 2018, and 35,230,742 shares at September 30, 2017 | 36 | 35 |
Capital in excess of par value of common stock | 609,104 | 580,938 |
Retained earnings | 408,992 | 397,881 |
Accumulated other comprehensive income | 15,201 | 3,949 |
Treasury stock at cost, 10,051,422 shares at March 31, 2018, and 9,948,190 shares at September 30, 2017 | (397,822) | (387,766) |
Total stockholders' equity | 635,511 | 595,037 |
Total liabilities and stockholders' equity | $ 898,973 | $ 834,100 |
UNAUDITED CONSOLIDATED BALANCE5
UNAUDITED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Sep. 30, 2017 |
Current assets | ||
Allowance for doubtful accounts | $ 1,817 | $ 1,747 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Long-term debt, prepaid debt issuance cost | $ 315 | $ 441 |
Stockholders' equity | ||
Common stock: authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock: par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock: issued (in shares) | 35,747,299 | 35,230,742 |
Treasury stock at cost, shares (in shares) | 10,051,422 | 9,948,190 |
UNAUDITED CONSOLIDATED STATEME6
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 26,654 | $ 40,511 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 13,123 | 13,214 |
Provision for doubtful accounts | 5 | (38) |
Share-based compensation expense | 10,082 | 6,465 |
Deemed repatriation transition tax | 24,641 | 0 |
Deferred income tax expense | 15,291 | 1,570 |
Tax benefit from share-based compensation plans | (6,021) | 0 |
Non-cash foreign exchange (gain) | (11) | (174) |
Loss (gain) on disposal of property, plant and equipment | 18 | (64) |
Realized loss on the sale of available-for-sale securities | 118 | 0 |
(Gain) on sale of assets | (956) | 0 |
Other | 2,140 | 207 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (4,370) | 1,449 |
Inventories | (3,771) | 723 |
Prepaid expenses and other assets | (5,503) | (2,310) |
Accounts payable | (407) | (4,418) |
Accrued expenses, income taxes payable and other liabilities | (3,899) | 774 |
Net cash provided by operating activities | 67,134 | 57,909 |
Cash flows from investing activities: | ||
Additions to property, plant and equipment | (8,804) | (11,677) |
Proceeds from the sale of property, plant and equipment | 0 | 90 |
Proceeds from the sale of assets | 2,999 | 0 |
Purchases of available-for-sale securities | (50,673) | 0 |
Proceeds from the sale and maturities of available-for-sale securities | 50,548 | 0 |
Net cash used in investing activities | (5,930) | (11,587) |
Cash flows from financing activities: | ||
Repayment of long-term debt | (6,563) | (4,375) |
Repurchases of common stock | (9,937) | (4,451) |
Net proceeds from issuance of stock | 18,089 | 24,802 |
Dividends paid | (10,228) | (8,926) |
Tax benefits associated with share-based compensation expense | 0 | 5,164 |
Net cash provided by (used in) financing activities | (8,639) | 12,214 |
Effect of exchange rate changes on cash | 10,979 | (2,332) |
Increase in cash and cash equivalents | 63,544 | 56,204 |
Cash and cash equivalents at beginning of period | 397,890 | 287,479 |
Cash and cash equivalents at end of period | 461,434 | 343,683 |
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 | $ 2,068 | $ 2,496 |
BACKGROUND AND BASIS OF PRESENT
BACKGROUND AND BASIS OF PRESENTATION | 6 Months Ended |
Mar. 31, 2018 | |
BACKGROUND AND BASIS OF PRESENTATION [Abstract] | |
BACKGROUND AND BASIS OF PRESENTATION | 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 polishes surfaces at an atomic level, thereby helping to enable IC device manufacturers 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. We develop, manufacture and sell CMP polishing pads, which are used in conjunction with slurries in the CMP process. We also develop and provide products for demanding surface modification applications in other industries through our Engineered Surface Finishes (ESF) business. 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, 2017. The unaudited Consolidated Financial Statements have been prepared by Cabot Microelectronics pursuant to the rules of the Securities and Exchange Commission (SEC) and accounting principles generally accepted in the United States of America (U.S. GAAP). In the opinion of management, these unaudited Consolidated Financial Statements include all adjustments, consisting of normal recurring adjustments, necessary for the fair statement of Cabot Microelectronics' financial position as of March 31, 2018, cash flows for the six months ended March 31, 2018 and March 31, 2017, and results of operations for the three and six months ended March 31, 2018 and March 31, 2017. The Consolidated Balance Sheets as of September 30, 2017 were derived from audited financial statements. The results of operations for the three and six months ended March 31, 2018 may not be indicative of results to be expected for future periods, including the fiscal year ending September 30, 2018. This Report on Form 10-Q does not contain all of the footnote disclosures from the annual financial statements and 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, 2017. 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, 2018 USE OF ESTIMATES The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments, assumptions and estimates that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. The accounting estimates that require management's most difficult and subjective judgments include, but are not limited to, those estimates related to bad debt expense, inventory valuation, valuation and classification of auction rate securities, impairment of long-lived assets and investments, business combinations, goodwill, other intangible assets, interest rate swaps, share-based compensation, income taxes and contingencies. We base our estimates on historical experience, current conditions and on various other assumptions that we believe are reasonable under the circumstances. However, future events are subject to change and estimates and judgments routinely require adjustment. Actual results may differ from these estimates under different assumptions or conditions. The results of operations for the quarter ended December 31, 2017 and six months ended March 31, 2018 include a correction to prior period amounts, which we determined to be immaterial to the prior periods to which they relate and are expected to be immaterial to our fiscal 2018 results. The adjustments, relating primarily to accumulated earnings taxes of a foreign operation, increased the income tax expense for the first quarter of fiscal 2018 by $2,071. Separately, in Note 14 of this Report on Form 10-Q, we discuss the effects of the Tax Cuts and Jobs Act ("Tax Act") on our financial statements. |
AVAILABLE FOR SALE SECURITIES
AVAILABLE FOR SALE SECURITIES | 6 Months Ended |
Mar. 31, 2018 | |
AVAILABLE FOR SALE SECURITIES [Abstract] | |
Marketable Securities [Table Text Block] | 2. AVAILABLE-FOR-SALE SECURITIES During the first quarter of fiscal 2018, the Company entered into a managed investment arrangement with a third party to invest in fixed income securities. These assets were classified as available-for-sale securities and were recorded at fair value. The balance of these securities as of December 31, 2017 was $48,272. Subsequent to the enactment of the Tax Act in the United States, the Company sold all of its non-U.S. available-for-sale securities prior to repatriating the funds to the U.S. The Company recognized a loss of $118 associated with the sale of these investments in the second quarter of fiscal 2018. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended |
Mar. 31, 2018 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3. 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 Financial Accounting Standards Board ("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, 2018 and September 30, 2017. See Note 8 for a detailed discussion of our long-term debt. We have classified the following assets and liabilities 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. March 31, 2018 Level 1 Level 2 Level 3 Total Fair Value Assets: Cash and cash equivalents $ 461,434 $ - $ - $ 461,434 Other long-term investments 1,071 - - 1,071 Derivative financial instruments - 517 - 517 Total assets $ 462,505 $ 517 $ - $ 463,022 Liabilities: Derivative financial instruments - 9,102 - 9,102 Total liabilities $ - $ 9,102 $ - $ 9,102 September 30, 2017 Level 1 Level 2 Level 3 Total Fair Value Assets: Cash and cash equivalents $ 397,890 $ - $ - $ 397,890 Other long-term investments 929 - - 929 Derivative financial instruments - 263 - 263 Total assets $ 398,819 $ 263 $ - $ 399,082 Liabilities: Derivative financial instruments - 1,881 - 1,881 Total liabilities $ - $ 1,881 $ - $ 1,881 Our cash and cash equivalents consist of various bank accounts used to support our operations and investments in institutional money-market funds that are traded in active markets. We are invested exclusively in AAA-rated, prime institutional money market funds, comprised of high quality, fixed income securities. 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 a participant makes a qualifying withdrawal. The long-term investment was adjusted to $ 1,071 Our derivative financial instruments include forward foreign exchange contracts and interest rate swaps. In the first quarter of fiscal 2015, we entered into floating-to-fixed interest rate swap agreements to hedge the variability in LIBOR-based interest payments on a portion of our outstanding variable rate debt. In the fourth quarter of fiscal 2017, we entered into forward foreign exchange contracts in an effort to protect our net investment in a foreign operation against potential adverse changes resulting from foreign currency fluctuation. The fair value of our derivative instruments is estimated using standard valuation models and market-based observable inputs over the contractual term, including one-month LIBOR-based yield curves for interest rate swaps, and forward rates and/or the Overnight Index Swap (OIS) curve for forward foreign exchange contracts, among others. We consider the risk of nonperformance, including counterparty credit risk, in the calculation of the fair value of derivative financial instruments. See Note 9 of this Report on Form 10-Q for more information on our use of derivative financial instruments. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Mar. 31, 2018 | |
INVENTORIES [Abstract] | |
INVENTORIES | 4. INVENTORIES Inventories consisted of the following: March 31, 2018 September 30, 2017 Raw materials $ 40,401 $ 36,415 Work in process 7,242 7,365 Finished goods 29,170 28,093 Total $ 76,813 $ 71,873 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Mar. 31, 2018 | |
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 5. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill was $102,915 as of March 31, 2018, and $101,932 as of September 30, 2017. The increase in goodwill was due to $1,678 in foreign exchange fluctuations of the New Taiwan dollar, partially offset by a $695 decrease related to the sale of certain ESF assets. As a result of this sale of assets in March 2018, we received net proceeds of $3,249, of which $250 is held in escrow, and recorded a preliminary gain of $956 in other income in the Consolidated Statements of Income. The components of other intangible assets are as follows: March 31, 2018 September 30, 2017 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Other intangible assets subject to amortization: Product technology $ 46,422 $ 20,284 $ 42,287 $ 17,604 Acquired patents and licenses 8,270 8,247 8,270 8,241 Trade secrets and know-how 2,550 2,550 2,550 2,550 Customer relationships, distribution rights and other 28,591 17,161 28,229 15,421 Total other intangible assets subject to amortization 85,833 48,242 81,336 43,816 Other intangible assets not subject to amortization: In-process technology - 4,000 Other indefinite-lived intangibles* 1,170 1,190 Total other intangible assets not subject to amortization 1,170 5,190 Total other intangible assets $ 87,003 $ 48,242 $ 86,526 $ 43,816 *Other indefinite-lived intangible assets not subject to amortization consist primarily of trade names. During the first quarter of fiscal 2018, development of our in-process technology was completed, and we reclassified $4,000 to product technology under other intangible assets subject to amortization. Amortization expense on our intangible assets was $1,963 and $3,936 for the three and six months ended March 31, 2018, respectively, and was $1,926 and $3,925 for the three and six months ended March 31, 2017, respectively. Estimated future amortization expense for the five succeeding fiscal years is as follows: Fiscal Year Estimated Amortization Expense Remainder of 2018 $ 3,558 2019 7,119 2020 7,115 2021 7,108 2022 7,108 In the first quarter of fiscal 2018, we adopted 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 quantitative 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 2017, we used a step one analysis for both goodwill impairment and indefinite-lived intangible asset impairment. We completed our annual impairment test during our fourth quarter of fiscal 2017 and concluded that no impairment existed. There were no indicators of potential impairment during the quarter ended March 31, 2018, so it was not necessary to perform an impairment review for goodwill and indefinite-lived intangible assets during the quarter. There have been no impairment charges recorded on the goodwill for any of our reporting units. |
OTHER LONG-TERM ASSETS
OTHER LONG-TERM ASSETS | 6 Months Ended |
Mar. 31, 2018 | |
OTHER LONG-TERM ASSETS [Abstract] | |
OTHER LONG-TERM ASSETS | 6. OTHER LONG-TERM ASSETS Other long-term assets consisted of the following: March 31, 2018 September 30, 2017 Auction rate securities (ARS) $ 5,319 $ 5,319 Long-term contract assets 2,071 2,115 Other long-term assets 2,065 2,154 Other long-term investments 1,071 929 Total $ 10,526 $ 10,517 Our ARS investments at March 31, 2018 consisted of two tax exempt municipal debt securities with a total par value of $5,319, both of which have maturities greater than ten years. The fair value of our ARS, determined using Level 2 fair value inputs, was $ 5,041 278 In the third quarter of fiscal 2015, we amended a supply agreement with an existing supplier. The amended agreement includes a fee of $4,500, of which we already have paid $3,000, which provides us the option to purchase certain raw materials beyond calendar 2016 through the expiration of the agreement in December 2019. This fee was recorded as a long-term asset at its present value and is being amortized into cost of goods sold on a straight-line basis through the expiration date of the agreement. See Note 10 for more information regarding this agreement. Other long-term assets are comprised of the long-term portion of prepaid unamortized debt costs, related to our Revolving Credit Facility, as well as miscellaneous deposits and prepayments on contracts extending beyond the next 12 months. As discussed in Note 3, we recorded a long-term asset and a corresponding long-term liability of $ 1,071 |
ACCRUED EXPENSES, INCOME TAXES
ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES | 6 Months Ended |
Mar. 31, 2018 | |
ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES [Abstract] | |
ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES | 7. ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES Accrued expenses, income taxes payable and other current liabilities consisted of the following: March 31, 2018 September 30, 2017 Accrued compensation $ 23,495 $ 35,332 Income taxes payable 13,062 9,717 Dividends payable 10,621 5,314 Goods and services received, not yet invoiced 3,570 2,172 Deferred revenue and customer advances 2,282 1,559 Warranty accrual 232 247 Taxes, other than income taxes 2,079 1,688 Current portion of long-term contract liability 1,500 1,500 Other accrued expenses 5,651 5,122 Total $ 62,492 $ 62,651 |
DEBT
DEBT | 6 Months Ended |
Mar. 31, 2018 | |
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 has never been drawn, 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." On June 27, 2014, we entered into an amendment (the "Amendment") to the Credit Agreement, which (i) increased term loan commitments by $17,500, from $157,500 to $175,000, the same level as the original amount under the Credit Agreement at its inception in 2012; (ii) increased the uncommitted accordion feature on the Revolving Credit Facility from $75,000 to $100,000; (iii) extended the expiration date of the Credit Facilities from February 13, 2017 to June 27, 2019; (iv) relaxed the consolidated leverage ratio financial covenant; and (v) revised certain pricing terms and other terms within the Credit Agreement. On June 27, 2014, we drew the $17,500 of increased term loan commitments, bringing the total outstanding commitments under the Term Loan to $175,000. The Term Loan was subsequently paid off in April 2018. See Note 18 of this Report on Form 10-Q for more information. Borrowings under the amended 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 current Applicable Rate for borrowings under the amended Credit Facilities is 1.50%, 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. As amended, the fee ranges from 0.20% to 0.30%, 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 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 certain of our existing and future direct and indirect domestic subsidiaries. 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 certain of its domestic subsidiaries. As of March 31, 2018 and September 30, 2017, unamortized debt issuance costs related to our Term Loan that are presented as a reduction of long-term debt were $315 and $441, respectively. Unamortized debt issuance costs related to our Revolving Credit Facility were not material. 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. These include a maximum consolidated leverage ratio of 2.75 to 1.00 and a minimum consolidated fixed charge coverage ratio of 1.25 to 1.00 for the period January 1, 2016 through the expiration of the Credit Agreement. As of March 31, 2018, our consolidated leverage ratio was 0.78 3.40 At March 31, 2018, the fair value of the Term Loan, using Level 2 inputs, approximated its carrying value of $137,813 as the loan bears a floating market rate of interest. As of March 31, 2018, $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, 2018, scheduled principal repayments of the Term Loan were as follows: Fiscal Year Principal Repayments Remainder of 2018 $ 4,375 2019 133,438 Total $ 137,813 |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 6 Months Ended |
Mar. 31, 2018 | |
DERIVATIVE FINANCIAL INSTRUMENTS [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | 9. DERIVATIVE FINANCIAL INSTRUMENTS We are exposed to various market risks, including risks associated with interest rates and foreign currency exchange rates. We enter into certain derivative transactions to mitigate the volatility associated with these exposures. We have policies in place that define acceptable instrument types we may enter into and we have established controls to limit our market risk exposure. 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 Consolidated Balance Sheets at fair value on a gross basis. Cash Flow Hedges – Interest Rate Swap Agreements In the first quarter of fiscal 2015, we entered into floating-to-fixed interest rate swap agreements to hedge the variability in LIBOR-based interest payments on $86,406 of our outstanding variable rate debt. The notional amount of the swaps decreases each quarter by an amount in proportion to our scheduled quarterly principal payment of debt. The notional value of the swaps was $68,906 as of March 31, 2018, and the swaps are scheduled to expire on June 27, 2019. We have designated these swap agreements as cash flow hedges pursuant to ASC 815, "Derivatives and Hedging". As cash flow hedges, unrealized gains are recognized as assets and unrealized losses are recognized as liabilities. Unrealized gains and losses are designated as effective or ineffective based on a comparison of the changes in fair value of the interest rate swaps and changes in fair value of the underlying exposures being hedged. The effective portion is recorded as a component of accumulated other comprehensive income or loss, while the ineffective portion is recorded as a component of interest expense. Changes in the method by which we pay interest from one-month LIBOR to another rate of interest could create ineffectiveness in the swaps, and result in amounts being reclassified from other comprehensive income into net income. Hedge effectiveness is tested quarterly to determine if hedge treatment continues to be appropriate. The interest rate swap agreements were subsequently terminated in April 2018 in conjunction with the payoff of the Term Loan. See Note 18 of this Report on Form 10-Q for more information. Foreign Currency Contracts Not Designated as Hedges 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. These 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. As of March 31, 2018 and September 30, 2017, the notional amounts of the forward contracts we held to purchase U.S. dollars in exchange for foreign currencies were $6,980 and $8,176, respectively, and the notional amounts of forward contracts we held to sell U.S. dollars in exchange for foreign currencies were $22,095 and $24,295, respectively. Net Investment Hedge - Foreign Exchange Contracts In September 2017, we entered into two forward foreign exchange contracts in an effort to protect the net investment of our South Korean subsidiary against potential adverse changes resulting from currency fluctuations in the Korean won. We entered into forward contracts to sell Korean won and buy U.S. dollars, settling in September 2022. We have designated these forward contracts as an effective net investment hedge. The total notional amount under the contracts is 100 billion Korean won. For the quarter ended March 31, 2018, the change in the fair value of the forward contracts in the net investment hedge relationship of $2,966 was recorded in foreign currency translation adjustments within Consolidated Statements of Comprehensive Income. Amounts recognized in the Consolidated Statements of Comprehensive Income for our net investment hedge during the six months ended March 31, 2018 were as follows: Balance at September 30, 2017 $ 920 Loss on net investment hedge 7,338 Tax benefit (1,549 ) Balance at March 31, 2018 $ 6,709 In April 2018, we terminated the net investment hedge contracts. See Note 18 of this Report on Form 10-Q for more information. The fair value of our derivative instruments included in the Consolidated Balance Sheets, which was determined using Level 2 inputs, was as follows: Asset Derivatives Liability Derivatives Consolidated Balance Sheet Location March 31, 2018 September 30, 2017 March 31, 2018 September 30, 2017 Derivatives designated as hedging instruments Interest rate swap contracts Prepaid expenses and other current assets $ 411 $ - $ - $ - Other long-term assets $ 84 $ 117 $ - $ - Accrued expenses, income taxes payable and other current liabilities $ - $ - $ 211 $ 31 Foreign exchange contracts designated as net investment hedge Other long-term liabilities $ - $ - $ 8,780 $ 1,442 Derivatives not designated as hedging instruments Foreign exchange contracts Prepaid expenses and other current assets $ 22 $ 146 $ - $ - Accrued expenses, income taxes payable and other current liabilities $ - $ - $ 111 $ 408 The following table summarizes the effect of our derivative instruments on our Consolidated Statements of Income for the three and six months ended March 31, 2018 and 2017: Gain (Loss) Recognized in Statement of Income Three Months Ended Six Months Ended Statement of Income Location March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017 Derivatives not designated as hedging instruments Foreign exchange contracts Other income, net $ 887 $ 320 $ 78 $ (1,474 ) The interest rate swap agreements have been deemed to be effective since inception, so there has been no impact on our Consolidated Statements of Income. We recorded a $52 unrealized loss and a $148 unrealized gain, net of tax, in accumulated comprehensive income during the three and six months ended March 31, 2018, respectively, for these interest rate swaps. As of March 31, 2018, during the next 12 months, we expect approximately $413 to be reclassified from accumulated other comprehensive income into interest expense related to our interest rate swaps based on projected rates of the LIBOR forward curve as of March 31, 2018. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Mar. 31, 2018 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 10. 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 18 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, 2017, for additional information regarding commitments and contingencies. POSTRETIREMENT OBLIGATIONS IN FOREIGN JURISDICTIONS We have defined benefit plans covering employees in certain foreign jurisdictions as required by local law, 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 ten years are expected to be approximately $5,785. For more information regarding these plans, refer to Note 18 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, 2017. PURCHASE OBLIGATIONS Purchase obligations include 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 have been operating under a fumed silica supply agreement with Cabot Corporation, our former parent company which is not a related party, the current term of which runs through December 2019. This agreement provides us the option to purchase fumed silica, with no minimum purchase requirements as of 2017, for which . The $1,500 payment due in 2019 is included in accrued expenses on our Consolidated Balance Sheets. As of March 31, 2018, purchase obligations include $5,884 of contractual commitments related to our Cabot Corporation supply agreement for fumed silica. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 6 Months Ended |
Mar. 31, 2018 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 11. ACCUMULATED OTHER COMPREHENSIVE INCOME The table below summarizes the components of accumulated other comprehensive income (AOCI), net of tax provision/(benefit), as of March 31, 2018 and 2017: Foreign Currency Translation Cash Flow Hedges Pension and Other Postretirement Liabilities Total Balance at September 30, 2017 $ 5,239 $ 46 $ (1,336 ) $ 3,949 Foreign currency translation adjustment, net of tax of $(1,384) 11,105 - - 11,105 Unrealized gain (loss) on cash flow hedges: Change in fair value, net of tax of $57 - 165 - 165 Reclassification adjustment into earnings, net of tax of $(6) - (18 ) - (18 ) Balance at March 31, 2018 $ 16,344 $ 193 $ (1,336 ) $ 15,201 Foreign Currency Translation Cash Flow Hedges Pension and Other Postretirement Liabilities Total Balance at September 30, 2016 $ 11,985 $ (817 ) $ (1,612 ) $ 9,556 Foreign currency translation adjustment, net of tax of $(1,732) (3,691 ) - - (3,691 ) Unrealized gain (loss) on cash flow hedges: Change in fair value, net of tax of $576 - 1,026 - 1,026 Reclassification adjustment into earnings, net of tax of $(117) - (208 ) - (208 ) Balance at March 31, 2017 $ 8,294 $ 1 $ (1,612 ) $ 6,683 The before tax amounts reclassified from AOCI to net income during the six months ended March 31, 2018 and 2017, related to our cash flow hedges, were recorded as interest expense on our Consolidated Statements of Income. For the six months ended March 31, 2018, we recorded $11,105 in currency translation gains, net of tax, primarily due to exchange rate fluctuations in the Japanese yen and Korean won versus the U.S. dollar, that are included in other comprehensive income, including a net loss of $5,789 related to our net investment hedge. These gains and losses primarily relate to changes in the U.S. dollar value of assets and liabilities denominated in local currencies when these asset and liability amounts are translated at month-end exchange rates. |
SHARE-BASED COMPENSATION PLANS
SHARE-BASED COMPENSATION PLANS | 6 Months Ended |
Mar. 31, 2018 | |
SHARE-BASED COMPENSATION PLANS [Abstract] | |
SHARE-BASED COMPENSATION PLANS | 12. We issue share-based awards under the following programs: our Cabot Microelectronics Corporation 2012 Omnibus Incentive Plan, as amended effective March 7, 2017 (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). In March 2017, our stockholders reapproved the material terms of performance-based awards under the OIP for purposes of complying with Section 162(m) of the Internal Revenue Code of 1986, as amended. Prior to March 2012, when our stockholders first 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 13 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, 2017. Other than the ESPP, all share-based payments granted beginning March 6, 2012 are made from the OIP, and since then, the EIP no longer has been available for any awards. We record share-based compensation expense for all share-based awards, including stock option grants, and restricted stock, restricted stock unit and performance share unit ("PSU") 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, expected dividend yield 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 for stock option grants made prior to December 2017, we have added a slight premium to this expected term for employees who meet the definition of retirement-eligible pursuant to their stock option grants during the contractual term of the grant. As of December 2017, the provisions of new stock option grants and restricted stock unit awards state that except in certain circumstances including termination for cause, once an employee meets the retirement eligibility requirements, any remaining unvested share-based awards will continue to vest regardless of termination of service. Consequently, the requisite service period for the award is satisfied upon retirement eligibility. Therefore, for those employees who have met the retirement eligibility at the grant date, we now record the total share-based compensation expense upon award; for those employees who will meet the retirement eligibility during the four-year vesting period, we now record the share-based compensation expense over the period from the grant date through the date of retirement eligibility, rather than over the four-year vesting period stated in the award agreement. The expected dividend yield represents our annualized dividend in dollars divided by the stock price on the date of grant. The risk-free interest rate is derived from the U.S. Treasury yield curve in effect at the time of grant. The PSUs that have been awarded may be subject to downward or upward adjustment depending on the total shareholder return achieved by the Company during the particular performance period related to the PSUs, relative to the total shareholder return of the S&P SmallCap 600 Index. We use a third-party service provider to estimate the fair value of the PSUs at grant date by using a Monte Carlo simulation model. This model simulates the stock price movements of the Company and Index constituents using certain assumptions, including the stock price of our company and Index constituents, the risk-free interest rate and stock price volatility. In December 2017, we announced the appointment of Scott D. Beamer as our Vice President and Chief Financial Officer, effective as of January 15, 2018, and the intention of William S. Johnson, the Company's then current Executive Vice President and Chief Financial Officer, to retire. Upon the effective date of Mr. Beamer's appointment, Mr. Johnson resigned as our Vice President and Chief Financial Officer, and now is performing transition responsibilities in a senior advisor role until his retirement date in January 2019 (the "Retirement Date"). Mr. Johnson's currently outstanding non-qualified stock option, restricted stock, and restricted stock unit awards under the OIP remain outstanding in accordance with their terms, which include that he will forfeit any unvested awards as of the Retirement Date. Applying the guidance in ASC 718 "Compensation — Stock Compensation", we recorded $1,744 of related share-based compensation expense in the three months ended December 31, 2017. In the first quarter of fiscal 2018, we adopted ASU No. 2016-09, "Improvements to Employee Share Based Payment Accounting" (Topic 718) (ASU 2016-09) prospectively. The provisions of this standard relate to aspects of the accounting for share-based payments transactions, including income tax consequences, classification of awards as either equity or liabilities, classification of excess tax benefits on the Consolidated Statements of Cash Flows and earnings per share calculations. Upon adoption, we recorded a tax benefit of $2,806 in our Consolidated Statements of Income. The net loss, including the impact of the tax benefits, was used to calculate our basic loss per share under the new guidance. In addition, we have elected to continue to estimate forfeitures under ASC 718 pursuant to the adoption of ASU 2016-09. Share-based compensation expense for the three and six months ended March 31, 2018 and 2017, was as follows: Three Months Ended March 31, Six Months Ended March 31, 2018 2017 2018 2017 Cost of goods sold $ 567 $ 552 $ 1,354 $ 1,093 Research, development and technical 516 459 1,046 878 Selling and marketing 329 347 671 686 General and administrative 2,872 2,194 7,011 3,808 Total share-based compensation expense 4,284 3,552 10,082 6,465 Tax benefit (1,022 ) (1,220 ) (2,249 ) (2,167 ) Total share-based compensation expense, net of tax $ 3,262 $ 2,332 $ 7,833 $ 4,298 For additional information regarding the estimation of fair value, refer to Note 13 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, 2017. |
OTHER INCOME, NET
OTHER INCOME, NET | 6 Months Ended |
Mar. 31, 2018 | |
OTHER INCOME, NET [Abstract] | |
OTHER INCOME, NET | 13. OTHER INCOME, NET Other income, net, consisted of the following: Three Months Ended March 31, Six Months Ended March 31, 2018 2017 2018 2017 Interest income $ 1,156 $ 516 $ 2,107 $ 937 Other income (expense) (94 ) (282 ) (373 ) 293 Total other income, net $ 1,062 $ 234 $ 1,734 $ 1,230 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Mar. 31, 2018 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | 14. INCOME TAXES The Tax Act, enacted on December 22, 2017, includes broad and complex changes to the U.S. tax code, including but not limited to: (1) reducing the U.S. federal corporate income tax rate to 21.0% effective January 1, 2018; and (2) requiring a one-time transition tax on certain un-repatriated earnings of foreign subsidiaries that is payable over eight years. For fiscal 2018, we will record our income tax provision using a blended U.S. statutory tax rate of 24.5%, which is based on a proration of the applicable tax rates before and after the Tax Act. The U.S. statutory tax rate of 21.0% will apply for fiscal 2019 and beyond. As a result of the Tax Act, the SEC staff issued accounting guidance which provides up to a one-year measurement period during which a company may complete its accounting for the impacts of the Tax Act (SAB 118). To the extent that a company's accounting for certain income tax effects of the Tax Act is incomplete but for which the company is able to determine a reasonable estimate, it must record a provisional estimate in its financial statements. If a company cannot determine a provisional estimate to be included in its financial statements, it should continue to apply the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. In connection with our initial analysis of the impact of the Tax Act, we recorded provisional discrete tax expense of $32,880 in the quarter ended December 31, 2017. In the quarter ended March 31, 2018, we recorded an additional $212 for a change in estimated withholding taxes and the re-measurement of U.S. deferred tax assets and liabilities. For various reasons that are discussed more fully below, we have not completed our accounting for the income tax effects of certain elements of the Tax Act, but we have recorded the following provisional estimates. Deemed Repatriation Transition Tax Reduction of U.S. Federal Corporate Tax Rate The Company is also analyzing other provisions of the Tax Act to determine their impact on the Company's effective tax rate in fiscal year 2018 or in the future, including the following: Global Intangible Low Taxed Income (GILTI): Base Erosion and Anti-Abuse Tax (BEAT): Foreign Derived Intangible Income (FDII): The Company previously operated under a tax holiday in South Korea in fiscal years 2013 through 2017 in conjunction with our investment in research, development and manufacturing facilities there, but are no longer under such as of fiscal 2018. This arrangement allowed for a tax at 50% of the local statutory rate in effect for fiscal years 2016 and 2017, following a 0% tax rate in fiscal years 2013, 2014 and 2015. This tax holiday reduced our income tax provision by approximately $1,915 and increased our diluted earnings per share by approximately $0.08 during the six months ended March 31, 2017. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Mar. 31, 2018 | |
EARNINGS PER SHARE [Abstract] | |
EARNINGS PER SHARE | 15. 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 that have a right to receive non-forfeitable dividends, which are considered participating securities as prescribed by the two-class method under ASC 260 "Earnings per Share". 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. Pursuant to the adoption of ASU 2016-09 in the first quarter of fiscal 2018, the tax benefits associated with share-based compensation plans were recorded as a tax benefit in our Consolidated Statements of Income. The number of shares that would be repurchased with the proceeds from the tax benefits was excluded from the diluted weighted average shares outstanding using treasury stock method under the new guidance. 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, 2018 2017 2018 2017 Numerator: Net Income $ 29,737 $ 18,280 $ 26,654 40,511 Less: income attributable to participating securities (30 ) (48 ) (34 ) (146 ) Earnings available to common shares $ 29,707 $ 18,232 $ 26,620 40,365 Denominator: Weighted average common shares 25,592,508 25,030,367 25,473,757 24,798,122 (Denominator for basic calculation) Weighted average effect of dilutive securities: Share-based compensation 568,678 496,090 601,925 505,834 Diluted weighted average common shares 26,161,186 25,526,457 26,075,682 25,303,956 (Denominator for diluted calculation) Earnings per share: Basic $ 1.16 $ 0.73 $ 1.05 1.63 Diluted $ 1.14 $ 0.71 $ 1.02 1.60 Approximately 0.1 million shares for both the three and six months ended March 31, 2018 and 0.4 million shares for both the three and six months ended March 31, 2017, attributable to outstanding stock options were excluded from the calculation of diluted earnings per share. |
FINANCIAL INFORMATION BY INDUST
FINANCIAL INFORMATION BY INDUSTRY SEGMENT AND PRODUCT LINE | 6 Months Ended |
Mar. 31, 2018 | |
FINANCIAL INFORMATION BY INDUSTRY SEGMENT AND PRODUCT LINE [Abstract] | |
FINANCIAL INFORMATION BY INDUSTRY SEGMENT AND PRODUCT LINE | 16. FINANCIAL INFORMATION BY INDUSTRY SEGMENT AND PRODUCT LINE We operate predominantly in one reportable segment, as defined under ASC 280 "Segment Reporting" – the development, manufacture, and sale of CMP consumables. Revenue generated by product line for the three and six months ended March 31, 2018 and 2017, was as follows: Three Months Ended March 31, Six Months Ended March 31, Revenue: 2018 2017 2018 2017 Tungsten slurries $ 60,428 $ 51,835 $ 123,305 $ 107,136 Dielectric slurries 34,529 27,843 66,261 57,125 Polishing pads 21,016 17,139 39,895 33,348 Other metals slurries 16,884 14,670 33,352 30,450 ESF and other 10,121 7,697 20,144 14,379 Total revenue $ 142,978 $ 119,184 $ 282,957 $ 242,438 |
NEW ACCOUNTING PRONOUNCEMENTS
NEW ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Mar. 31, 2018 | |
NEW ACCOUNTING PRONOUNCEMENTS [Abstract] | |
NEW ACCOUNTING PRONOUNCEMENTS | 17. NEW ACCOUNTING PRONOUNCEMENTS In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers" (Topic 606), an updated standard on revenue recognition . In July 2015, the FASB issued ASU No, 2015-11, "Simplifying the Measurement of Inventory" (Topic 330). The provisions of ASU 2015-11 require an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. We adopted ASU 2015-11 effective October 1, 2017, and this pronouncement had no material effect on our financial statements. In February 2016, the FASB issued ASU No. 2016-02, "Leases" (Topic 842). The provisions of ASU 2016-02 require a dual approach for lessee accounting under which a lessee would recognize a right-of-use asset and a corresponding lease liability. Leases will be classified as either finance or operating leases. For finance leases, a lessee will recognize interest expense and amortization of the right-of-use asset, and for operating leases, the lessee will recognize a straight-line total lease expense. The guidance also requires qualitative and specific quantitative disclosures to supplement the amounts recorded in the financial statements, to afford better understanding of an entity's leasing activities, including any significant judgments and estimates. ASU 2016-02 will be effective for us beginning October 1, 2019, but early adoption is permitted. We are currently evaluating the impact of implementation of this standard on our financial statements. In March 2016, the FASB issued ASU No. 2016-05, "Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships" (Topic 815). The provisions of ASU 2016-05 provide clarification that a change in a counterparty of a derivative instrument that has been designated as a hedging instrument does not require dedesignation of that hedging relationship, provided that all other hedge accounting criteria is met. ASU 2016-05 will be effective for us beginning October 1, 2018, but early adoption is permitted. We do not believe the adoption of this standard will have a material effect on our financial statements. In March 2016, the FASB issued ASU No. 2016-07, "Simplifying the Transition to the Equity Method of Accounting" (Topic 323). The provisions of ASU 2016-07 require equity method investors to add the cost of acquiring additional interest in the investee to the current basis of the investor's previously held interest and adopt the equity method prospectively as of the date the investment qualifies for the equity method of accounting. ASU 2016-07 will be effective for us beginning October 1, 2018, but early adoption is permitted. We do not believe the adoption of this standard will have a material effect on our financial statements as we currently have no equity method investments. In June 2016, the FASB issued ASU No. 2016-13, "Measurement of Credit Losses on Financial Instruments" (Topic 326). The provisions of this standard require financial assets measured at amortized cost to be presented at the net amount expected to be collected. An allowance account would be established to present the net carrying value at the amount expected to be collected. ASU 2016-13 also provides that credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. ASU 2016-13 will be effective for us beginning October 1, 2020, but early adoption is permitted as of October 1, 2019. We are currently evaluating the impact of implementation of this standard on our financial statements. In August 2016, the FASB issued ASU No. 2016-15 "Classification of Certain Cash Receipts and Cash Payments" (Topic 230). The provisions of this standard provide guidance on the classification within the Consolidated Statements of Cash Flows of certain types of cash receipts and cash payments in an effort to eliminate diversity in practice. ASU 2016-15 will be effective for us beginning October 1, 2018, but early adoption is permitted. We do not believe the adoption of this standard will have a material effect on our financial statements as we currently do not have any of the cash receipts or payments discussed in this standard. In October 2016, the FASB issued ASU No. 2016-16 "Intra-Entity Transfers of Assets Other Than Inventory" (Topic 740). The provisions of this standard provide guidance on recognition of taxes related to intra-entity transfer of assets other than inventory when the transfer occurs. ASU 2016-16 will be effective for us beginning October 1, 2018, but early adoption is permitted. We are currently evaluating the impact of implementation of this standard on our financial statements. In October 2016, the FASB issued ASU No. 2016-17 "Interest Held through Related Parties That Are under Common Control" (Topic 810). The provisions of this standard provide further guidance related to ASU 2015-02, and provide guidance on consolidation in relation to VIEs and related parties. We adopted ASU 2016-17 effective October 1, 2017, and this pronouncement had no material effect on our financial statements as we currently have no interest in any entities that may be considered VIE. In January 2017, the FASB issued ASU No. 2017-01 "Clarifying the Definition of a Business" (Topic 805). The provisions of this standard provide guidance to determine whether the acquisition or sale of a set of assets or activities constitutes a business. The standard requires that an integrated set of assets and activities include an input and a substantive process that together contribute to the ability to create output. We adopted ASU 2017-01 effective October 1, 2017, and this pronouncement had no material effect on our financial statements. In January 2017, the FASB issued ASU No. 2017-04 "Simplifying the Test for Goodwill Impairment" (Topic 350). The provisions of this standard eliminate Step 2 from the goodwill impairment test, which required an entity to determine the fair value of its assets and liabilities at the impairment testing date of its goodwill and compare it to its carrying amount to determine a possible impairment loss. Goodwill impairment testing will now be done by comparing the fair value of a reporting unit and its carrying amount. We adopted ASU 2017-04 effective October 1, 2017 and we will apply the new guidance in our annual test for goodwill impairment in the fourth quarter of fiscal 2018. In March 2017, the FASB issued ASU No. 2017-07 "Improving the Presentation of Net Period Pension Cost and Net Period Postretirement Benefit Cost" (Topic 715). The provisions of ASU 2017-07 provided specific guidance on the presentation of the components of net benefit cost. ASU 2017-07 will be effective for us beginning October 1, 2018. We are currently evaluating the impact of implementation of this standard on our financial statements. In May 2017, the FASB issued ASU No. 2017-09 "Scope of Modification Accounting" (Topic 718). The provisions of ASU 2017-09 provide specific guidance about which changes to the term or conditions of a share-based payment require an entity to apply modification accounting. ASU 2017-09 will be effective for us beginning October 1, 2018. We are currently evaluating the impact of implementation of this standard on our financial statements. In August 2017, the FASB issued ASU No. 2017-12 "Derivatives and Hedging" (Topic 815). The provisions of this standard amend the hedge accounting model in ASC 815 to expand an entity's ability to hedge nonfinancial and financial risk components, reduce complexity in fair value hedges of interest rate risk, eliminate the requirement to separately measure and report hedge ineffectiveness, and generally require the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The guidance also eases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. ASU 2017-12 will be effective for us beginning October 1, 2019, but early adoption is permitted. We are currently evaluating the impact of implementation of this standard on our financial statements. In February 2018, the FASB issued ASU No. 2018-02 "Income Statement – Reporting Comprehensive Income (Topic 220)". The amendments in this standard allow a company to reclassify the stranded tax effects resulting from the Tax Act from accumulated other comprehensive income to retained earnings. ASU 2018-02 will be effective for us beginning October 1, 2019, but early adoption is permitted. We are currently evaluating the impact of implementation of this standard on our financial statements. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 6 Months Ended |
Mar. 31, 2018 | |
Subsequent Event [Abstract] | |
Subsequent Event [Text Block] | 18. SUBSEQUENT EVENTS The enactment of the Tax Act in the United States in December 2017 facilitated the Company's intention to repatriate a substantial amount of its non-U.S. cash and available-for-sale securities, and utilize a portion of this cash to payoff its existing Term Loan. In accordance with this, in April 2018, the Company paid off the remaining outstanding Term Loan principal balance of $ pursuant to the Credit Agreement. There was no penalty upon the Company's prepayment of the Term Loan. As a result of this early extinguishment of the Term Loan, we will expense the remaining immaterial amount of unamortized debt issuance cost in the quarter ending June 30, 2018. In conjunction with the payoff the term loan, we terminated the related interest rate swaps, and the immaterial gain will be reclassified from accumulated other comprehensive income into other income in the Consolidated Statements of Income. In addition, in anticipation of the cash repatriation described above, the Company terminated its foreign exchange contracts in April 2018, which were used to protect the net investment of our South Korean subsidiary against potential adverse changes resulting from currency fluctuations in the Korean Won. Due to the continued appreciation of the Korean Won, we will recognize an additional loss of $690, net of tax, on our net investment hedge in the quarter ending June 30, 2018, which will be recorded in |
BACKGROUND AND BASIS OF PRESE25
BACKGROUND AND BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Mar. 31, 2018 | |
BACKGROUND AND BASIS OF PRESENTATION [Abstract] | |
Use of Estimates, Policy [Policy Text Block] | USE OF ESTIMATES The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments, assumptions and estimates that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. The accounting estimates that require management's most difficult and subjective judgments include, but are not limited to, those estimates related to bad debt expense, inventory valuation, valuation and classification of auction rate securities, impairment of long-lived assets and investments, business combinations, goodwill, other intangible assets, interest rate swaps, share-based compensation, income taxes and contingencies. We base our estimates on historical experience, current conditions and on various other assumptions that we believe are reasonable under the circumstances. However, future events are subject to change and estimates and judgments routinely require adjustment. Actual results may differ from these estimates under different assumptions or conditions. |
FAIR VALUE OF FINANCIAL INSTR26
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | |
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, 2018 and September 30, 2017. See Note 8 for a detailed discussion of our long-term debt. We have classified the following assets and liabilities 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. March 31, 2018 Level 1 Level 2 Level 3 Total Fair Value Assets: Cash and cash equivalents $ 461,434 $ - $ - $ 461,434 Other long-term investments 1,071 - - 1,071 Derivative financial instruments - 517 - 517 Total assets $ 462,505 $ 517 $ - $ 463,022 Liabilities: Derivative financial instruments - 9,102 - 9,102 Total liabilities $ - $ 9,102 $ - $ 9,102 September 30, 2017 Level 1 Level 2 Level 3 Total Fair Value Assets: Cash and cash equivalents $ 397,890 $ - $ - $ 397,890 Other long-term investments 929 - - 929 Derivative financial instruments - 263 - 263 Total assets $ 398,819 $ 263 $ - $ 399,082 Liabilities: Derivative financial instruments - 1,881 - 1,881 Total liabilities $ - $ 1,881 $ - $ 1,881 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
INVENTORIES [Abstract] | |
Inventories | Inventories consisted of the following: March 31, 2018 September 30, 2017 Raw materials $ 40,401 $ 36,415 Work in process 7,242 7,365 Finished goods 29,170 28,093 Total $ 76,813 $ 71,873 |
GOODWILL AND OTHER INTANGIBLE28
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | |
Components of Other Intangible Assets | The components of other intangible assets are as follows: March 31, 2018 September 30, 2017 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Other intangible assets subject to amortization: Product technology $ 46,422 $ 20,284 $ 42,287 $ 17,604 Acquired patents and licenses 8,270 8,247 8,270 8,241 Trade secrets and know-how 2,550 2,550 2,550 2,550 Customer relationships, distribution rights and other 28,591 17,161 28,229 15,421 Total other intangible assets subject to amortization 85,833 48,242 81,336 43,816 Other intangible assets not subject to amortization: In-process technology - 4,000 Other indefinite-lived intangibles* 1,170 1,190 Total other intangible assets not subject to amortization 1,170 5,190 Total other intangible assets $ 87,003 $ 48,242 $ 86,526 $ 43,816 |
Estimated Future Amortization Expense for the Succeeding Five Fiscal Years | Amortization expense on our intangible assets was $1,963 and $3,936 for the three and six months ended March 31, 2018, respectively, and was $1,926 and $3,925 for the three and six months ended March 31, 2017, respectively. Estimated future amortization expense for the five succeeding fiscal years is as follows: Fiscal Year Estimated Amortization Expense Remainder of 2018 $ 3,558 2019 7,119 2020 7,115 2021 7,108 2022 7,108 |
OTHER LONG-TERM ASSETS (Tables)
OTHER LONG-TERM ASSETS (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
OTHER LONG-TERM ASSETS [Abstract] | |
Other Long Term Assets | Other long-term assets consisted of the following: March 31, 2018 September 30, 2017 Auction rate securities (ARS) $ 5,319 $ 5,319 Long-term contract assets 2,071 2,115 Other long-term assets 2,065 2,154 Other long-term investments 1,071 929 Total $ 10,526 $ 10,517 |
ACCRUED EXPENSES, INCOME TAXE30
ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES [Abstract] | |
Accrued Expenses, Income Taxes Payable and Other Current Liabilities | Accrued expenses, income taxes payable and other current liabilities consisted of the following: March 31, 2018 September 30, 2017 Accrued compensation $ 23,495 $ 35,332 Income taxes payable 13,062 9,717 Dividends payable 10,621 5,314 Goods and services received, not yet invoiced 3,570 2,172 Deferred revenue and customer advances 2,282 1,559 Warranty accrual 232 247 Taxes, other than income taxes 2,079 1,688 Current portion of long-term contract liability 1,500 1,500 Other accrued expenses 5,651 5,122 Total $ 62,492 $ 62,651 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
DEBT [Abstract] | |
Scheduled Principal Repayments of the Term Loan | 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, 2018, scheduled principal repayments of the Term Loan were as follows: Fiscal Year Principal Repayments Remainder of 2018 $ 4,375 2019 133,438 Total $ 137,813 |
DERIVATIVE FINANCIAL INSTRUME32
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
DERIVATIVE FINANCIAL INSTRUMENTS [Abstract] | |
Schedule of Net Investment Hedges in Accumulated Other Comprehensive Income (Loss) [Table Text Block] | Amounts recognized in the Consolidated Statements of Comprehensive Income for our net investment hedge during the six months ended March 31, 2018 were as follows: Balance at September 30, 2017 $ 920 Loss on net investment hedge 7,338 Tax benefit (1,549 ) Balance at March 31, 2018 $ 6,709 |
FV of Derivative Instruments in the Consolidated Balance Sheet | The fair value of our derivative instruments included in the Consolidated Balance Sheets, which was determined using Level 2 inputs, was as follows: Asset Derivatives Liability Derivatives Consolidated Balance Sheet Location March 31, 2018 September 30, 2017 March 31, 2018 September 30, 2017 Derivatives designated as hedging instruments Interest rate swap contracts Prepaid expenses and other current assets $ 411 $ - $ - $ - Other long-term assets $ 84 $ 117 $ - $ - Accrued expenses, income taxes payable and other current liabilities $ - $ - $ 211 $ 31 Foreign exchange contracts designated as net investment hedge Other long-term liabilities $ - $ - $ 8,780 $ 1,442 Derivatives not designated as hedging instruments Foreign exchange contracts Prepaid expenses and other current assets $ 22 $ 146 $ - $ - Accrued expenses, income taxes payable and other current liabilities $ - $ - $ 111 $ 408 |
Effect of Derivative Instruments on the Consolidated Statement of Income | The following table summarizes the effect of our derivative instruments on our Consolidated Statements of Income for the three and six months ended March 31, 2018 and 2017: Gain (Loss) Recognized in Statement of Income Three Months Ended Six Months Ended Statement of Income Location March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017 Derivatives not designated as hedging instruments Foreign exchange contracts Other income, net $ 887 $ 320 $ 78 $ (1,474 ) |
ACCUMULATED OTHER COMPREHENSI33
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | The table below summarizes the components of accumulated other comprehensive income (AOCI), net of tax provision/(benefit), as of March 31, 2018 and 2017: Foreign Currency Translation Cash Flow Hedges Pension and Other Postretirement Liabilities Total Balance at September 30, 2017 $ 5,239 $ 46 $ (1,336 ) $ 3,949 Foreign currency translation adjustment, net of tax of $(1,384) 11,105 - - 11,105 Unrealized gain (loss) on cash flow hedges: Change in fair value, net of tax of $57 - 165 - 165 Reclassification adjustment into earnings, net of tax of $(6) - (18 ) - (18 ) Balance at March 31, 2018 $ 16,344 $ 193 $ (1,336 ) $ 15,201 Foreign Currency Translation Cash Flow Hedges Pension and Other Postretirement Liabilities Total Balance at September 30, 2016 $ 11,985 $ (817 ) $ (1,612 ) $ 9,556 Foreign currency translation adjustment, net of tax of $(1,732) (3,691 ) - - (3,691 ) Unrealized gain (loss) on cash flow hedges: Change in fair value, net of tax of $576 - 1,026 - 1,026 Reclassification adjustment into earnings, net of tax of $(117) - (208 ) - (208 ) Balance at March 31, 2017 $ 8,294 $ 1 $ (1,612 ) $ 6,683 |
SHARE-BASED COMPENSATION PLANS
SHARE-BASED COMPENSATION PLANS (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
SHARE-BASED COMPENSATION PLANS [Abstract] | |
Share Based Compensation Expense | Share-based compensation expense for the three and six months ended March 31, 2018 and 2017, was as follows: Three Months Ended March 31, Six Months Ended March 31, 2018 2017 2018 2017 Cost of goods sold $ 567 $ 552 $ 1,354 $ 1,093 Research, development and technical 516 459 1,046 878 Selling and marketing 329 347 671 686 General and administrative 2,872 2,194 7,011 3,808 Total share-based compensation expense 4,284 3,552 10,082 6,465 Tax benefit (1,022 ) (1,220 ) (2,249 ) (2,167 ) Total share-based compensation expense, net of tax $ 3,262 $ 2,332 $ 7,833 $ 4,298 For additional information regarding the estimation of fair value, refer to Note 13 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, 2017. |
OTHER INCOME, NET (Tables)
OTHER INCOME, NET (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
OTHER INCOME, NET [Abstract] | |
Other Income, Net | Other income, net, consisted of the following: Three Months Ended March 31, Six Months Ended March 31, 2018 2017 2018 2017 Interest income $ 1,156 $ 516 $ 2,107 $ 937 Other income (expense) (94 ) (282 ) (373 ) 293 Total other income, net $ 1,062 $ 234 $ 1,734 $ 1,230 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
EARNINGS PER SHARE [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | 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, 2018 2017 2018 2017 Numerator: Net Income $ 29,737 $ 18,280 $ 26,654 40,511 Less: income attributable to participating securities (30 ) (48 ) (34 ) (146 ) Earnings available to common shares $ 29,707 $ 18,232 $ 26,620 40,365 Denominator: Weighted average common shares 25,592,508 25,030,367 25,473,757 24,798,122 (Denominator for basic calculation) Weighted average effect of dilutive securities: Share-based compensation 568,678 496,090 601,925 505,834 Diluted weighted average common shares 26,161,186 25,526,457 26,075,682 25,303,956 (Denominator for diluted calculation) Earnings per share: Basic $ 1.16 $ 0.73 $ 1.05 1.63 Diluted $ 1.14 $ 0.71 $ 1.02 1.60 |
FINANCIAL INFORMATION BY INDU37
FINANCIAL INFORMATION BY INDUSTRY SEGMENT AND PRODUCT LINE (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
FINANCIAL INFORMATION BY INDUSTRY SEGMENT AND PRODUCT LINE [Abstract] | |
Revenue Generated by Product Line | Revenue generated by product line for the three and six months ended March 31, 2018 and 2017, was as follows: Three Months Ended March 31, Six Months Ended March 31, Revenue: 2018 2017 2018 2017 Tungsten slurries $ 60,428 $ 51,835 $ 123,305 $ 107,136 Dielectric slurries 34,529 27,843 66,261 57,125 Polishing pads 21,016 17,139 39,895 33,348 Other metals slurries 16,884 14,670 33,352 30,450 ESF and other 10,121 7,697 20,144 14,379 Total revenue $ 142,978 $ 119,184 $ 282,957 $ 242,438 |
BACKGROUND AND BASIS OF PRESE38
BACKGROUND AND BASIS OF PRESENTATION (Details) | 3 Months Ended |
Mar. 31, 2018 | |
BACKGROUND AND BASIS OF PRESENTATION [Abstract] | |
Immaterial Error Correction | The results of operations for the quarter ended December 31, 2017 and six months ended March 31, 2018 include a correction to prior period amounts, which we determined to be immaterial to the prior periods to which they relate and are expected to be immaterial to our fiscal 2018 results. The adjustments, relating primarily to accumulated earnings taxes of a foreign operation, increased the income tax expense for the first quarter of fiscal 2018 by $2,071. |
AVAILABLE FOR SALE SECURITIES-
AVAILABLE FOR SALE SECURITIES- Part1 (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
AVAILABLE FOR SALE SECURITIES [Abstract] | ||
Available-For-Sale Securities | $ 48,272 | |
Available-for-sale Securities, Gross Realized Gain (Loss) | $ (118) |
FAIR VALUE OF FINANCIAL INSTR40
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Assets [Abstract] | |||
Available-For-Sale Securities | $ 48,272 | ||
Recurring [Member] | |||
Assets [Abstract] | |||
Cash and cash equivalents | $ 461,434 | $ 397,890 | |
Other long-term investments | 1,071 | 929 | |
Derivative financial instruments | 517 | 263 | |
Total assets | 463,022 | 399,082 | |
Liabilities [Abstract] | |||
Derivative financial instruments | 9,102 | 1,881 | |
Total liabilities | 9,102 | 1,881 | |
Recurring [Member] | Level 1 [Member] | |||
Assets [Abstract] | |||
Cash and cash equivalents | 461,434 | 397,890 | |
Other long-term investments | 1,071 | 929 | |
Derivative financial instruments | 0 | 0 | |
Total assets | 462,505 | 398,819 | |
Liabilities [Abstract] | |||
Derivative financial instruments | 0 | 0 | |
Total liabilities | 0 | 0 | |
Recurring [Member] | Level 2 [Member] | |||
Assets [Abstract] | |||
Cash and cash equivalents | 0 | 0 | |
Other long-term investments | 0 | 0 | |
Derivative financial instruments | 517 | 263 | |
Total assets | 517 | 263 | |
Liabilities [Abstract] | |||
Derivative financial instruments | 9,102 | 1,881 | |
Total liabilities | 9,102 | 1,881 | |
Recurring [Member] | Level 3 [Member] | |||
Assets [Abstract] | |||
Cash and cash equivalents | 0 | 0 | |
Other long-term investments | 0 | 0 | |
Derivative financial instruments | 0 | 0 | |
Total assets | 0 | 0 | |
Liabilities [Abstract] | |||
Derivative financial instruments | 0 | 0 | |
Total liabilities | $ 0 | $ 0 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Sep. 30, 2017 |
INVENTORIES [Abstract] | ||
Raw materials | $ 40,401 | $ 36,415 |
Work in process | 7,242 | 7,365 |
Finished goods | 29,170 | 28,093 |
Total | $ 76,813 | $ 71,873 |
GOODWILL AND OTHER INTANGIBLE42
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Sep. 30, 2017 | ||
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | ||||||
Goodwill | $ 102,915 | $ 102,915 | $ 101,932 | |||
Foreign exchange fluctuation | 1,678 | |||||
Decrease due to sale of surface finishes | (695) | |||||
Product Information [Line Items] | ||||||
Proceeds from Sales of Assets, Investing Activities | 2,999 | $ 0 | ||||
Gain (Loss) on Disposition of Assets | (956) | 0 | ||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Total other intangible assets subject to amortization, gross carrying amount | 85,833 | 85,833 | 81,336 | |||
Accumulated amortization | 48,242 | 48,242 | 43,816 | |||
Indefinite-lived Intangible Assets [Line Items] | ||||||
Total other intangible assets not subject to amortization | 1,170 | 1,170 | 5,190 | |||
Total other intangible assets, gross carrying amount | 87,003 | 87,003 | 86,526 | |||
Other intangible assets [Abstract] | ||||||
Amortization expense | 1,963 | $ 1,926 | 3,936 | $ 3,925 | ||
Estimated future amortization expense [Abstract] | ||||||
Remainder of 2018 | 3,558 | 3,558 | ||||
2,019 | 7,119 | 7,119 | ||||
2,020 | 7,115 | 7,115 | ||||
2,021 | 7,108 | 7,108 | ||||
2,022 | 7,108 | 7,108 | ||||
Engineered Surface Finishes [Member] | ||||||
Product Information [Line Items] | ||||||
Proceeds from Sales of Assets, Investing Activities | 3,249 | |||||
Escrow Deposits Related to Property Sales | 250 | |||||
Gain (Loss) on Disposition of Assets | 956 | |||||
In-process Technology [Member] | ||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||
Total other intangible assets not subject to amortization | 0 | 0 | 4,000 | |||
Other Indefinite-lived Intangibles [Member] | ||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||
Total other intangible assets not subject to amortization | [1] | 1,170 | 1,170 | 1,190 | ||
Product Technology [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Total other intangible assets subject to amortization, gross carrying amount | 46,422 | 46,422 | 42,287 | |||
Accumulated amortization | 20,284 | 20,284 | 17,604 | |||
Acquired Patents and Licenses [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Total other intangible assets subject to amortization, gross carrying amount | 8,270 | 8,270 | 8,270 | |||
Accumulated amortization | 8,247 | 8,247 | 8,241 | |||
Trade Secrets and Know-how [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Total other intangible assets subject to amortization, gross carrying amount | 2,550 | 2,550 | 2,550 | |||
Accumulated amortization | 2,550 | 2,550 | 2,550 | |||
Customer Relationships, Distribution Rights and Other | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Total other intangible assets subject to amortization, gross carrying amount | 28,591 | 28,591 | 28,229 | |||
Accumulated amortization | $ 17,161 | $ 17,161 | $ 15,421 | |||
[1] | Other indefinite-lived intangible assets not subject to amortization consist primarily of trade names. |
OTHER LONG-TERM ASSETS (Details
OTHER LONG-TERM ASSETS (Details) $ in Thousands | 6 Months Ended | ||
Mar. 31, 2018USD ($)Security | Sep. 30, 2017USD ($) | Jun. 30, 2015USD ($) | |
Other long-term assets [Abstract] | |||
Auction rate securities (ARS) | $ 5,319 | $ 5,319 | |
Long-term contract asset | 2,071 | 2,115 | |
Other long-term assets | 2,065 | 2,154 | |
Other long-term investments | 1,071 | 929 | |
Total | $ 10,526 | $ 10,517 | |
Number of tax exempt municipal debt securities | Security | 2 | ||
Minimum maturity period of municipal debt securities | 10 years | ||
Fair value of auction rate securities | $ 5,041 | ||
Gross unrecognized loss of ARS | 278 | ||
Long-term contract asset face amount | $ 4,500 | ||
Amount of Long-Term Contract Asset Paid | 3,000 | ||
Long-term liability, SERP investments | $ 1,071 |
ACCRUED EXPENSES, INCOME TAXE44
ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Sep. 30, 2017 |
ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES [Abstract] | ||
Accrued compensation | $ 23,495 | $ 35,332 |
Income taxes payable | 13,062 | 9,717 |
Dividends payable | 10,621 | 5,314 |
Goods and services received, not yet invoiced | 3,570 | 2,172 |
Deferred revenue and customer advances | 2,282 | 1,559 |
Warranty accrual | 232 | 247 |
Taxes, other than income taxes | 2,079 | 1,688 |
Current portion of long-term contract liability | 1,500 | 1,500 |
Other accrued expenses | 5,651 | 5,122 |
Total | $ 62,492 | $ 62,651 |
DEBT (Details)
DEBT (Details) - USD ($) $ in Thousands | Jun. 27, 2014 | Jun. 26, 2014 | Mar. 31, 2018 | Sep. 30, 2017 | Feb. 13, 2012 |
Debt Instrument [Line Items] | |||||
Long-term debt, prepaid debt issuance cost | $ 315 | $ 441 | |||
Current portion of long-term debt | $ 13,125 | 10,938 | |||
Credit Agreement [Member] | Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, borrowing capacity | $ 75,000 | ||||
Maturity date of credit facility | Feb. 13, 2017 | ||||
Credit Agreement [Member] | Term Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Face amount of debt | $ 157,500 | $ 175,000 | |||
Amended Credit Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate description | Borrowings under the amended 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 current Applicable Rate for borrowings under the amended Credit Facilities is 1.50%, 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. | ||||
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. These include a maximum consolidated leverage ratio of 2.75 to 1.00 and a minimum consolidated fixed charge coverage ratio of 1.25 to 1.00 for the period January 1, 2016 through the expiration of the Credit Agreement. As of June 30, 2017, our consolidated leverage ratio was 0.78 to 1.00 and our consolidated fixed charge coverage ratio was 3.40 to 1.00. The Credit Agreement also contains customary affirmative covenants and events of default. We believe we are in compliance with these covenants. | ||||
Amended Credit Agreement [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Consolidated fixed charge coverage ratio | 1.25 | ||||
Amended Credit Agreement [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Consolidated leverage ratio | 2.75 | ||||
Amended Credit Agreement [Member] | Federal Funds Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.50% | ||||
Amended Credit Agreement [Member] | LIBOR [Member] | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.00% | ||||
Current applicable rate | 1.50% | ||||
Amended Credit Agreement [Member] | Base Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Current applicable rate | 0.25% | ||||
Amended Credit Agreement [Member] | Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, borrowing capacity | $ 100,000 | ||||
Maturity date of credit facility | Jun. 27, 2019 | ||||
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. As amended, the fee ranges from 0.20% to 0.30%, based on our consolidated leverage ratio. | ||||
Amended Credit Agreement [Member] | Revolving Credit Facility [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Commitment fee percentage | 0.20% | ||||
Amended Credit Agreement [Member] | Revolving Credit Facility [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Commitment fee percentage | 0.30% | ||||
Amended Credit Agreement [Member] | Term Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Increase in loan commitments | $ 17,500 | ||||
Amount drawn from increase in loan commitments | 17,500 | ||||
Term loan commitments outstanding | $ 175,000 | ||||
Long-term debt, prepaid debt issuance cost | $ 315 | $ 441 | |||
Fair value of debt | 137,813 | ||||
Current portion of long-term debt | 13,125 | ||||
Long-term Debt, by Maturity [Abstract] | |||||
Remainder of 2018 | 4,375 | ||||
2,019 | 133,438 | ||||
Long Term Debt | $ 137,813 |
DERIVATIVE FINANCIAL INSTRUME46
DERIVATIVE FINANCIAL INSTRUMENTS (Details) ₩ in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2018USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2017KRW (₩) | Dec. 31, 2014USD ($) | |
Derivative [Line Items] | |||||
Derivative Instruments in Hedges, at Fair Value, Net | $ 2,966 | $ 2,966 | |||
Interest Rate Swap [Member] | |||||
Derivative [Line Items] | |||||
Outstanding variable rate debt | $ 86,406 | ||||
Derivative notional amount | 68,906 | $ 68,906 | |||
Derivatives expiration date | Jun. 27, 2019 | ||||
Unrealized gain/(loss) | (52) | $ 148 | |||
Reclassified from accumulated other comprehensive income into interest expense | $ 413 | ||||
Reclassification period | 12 months | ||||
Foreign Exchange Contract [Member] | Buy [Member] | |||||
Derivative [Line Items] | |||||
Derivative notional amount | 6,980 | $ 6,980 | $ 8,176 | ||
Foreign Exchange Contract [Member] | Sell [Member] | |||||
Derivative [Line Items] | |||||
Derivative notional amount | $ 22,095 | $ 22,095 | $ 24,295 | ||
Net Investment Hedging [Member] | |||||
Derivative [Line Items] | |||||
Derivative notional amount | ₩ | ₩ 100,000,000 |
DERIVATIVE FINANCIAL INSTRUME47
DERIVATIVE FINANCIAL INSTRUMENTS, Schedule of Net Investment Hedges in Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2018 | Sep. 30, 2017 | |
DERIVATIVE FINANCIAL INSTRUMENTS [Abstract] | ||
Derivatives used in Net Investment Hedge, Net of Tax | $ 6,709 | $ 920 |
Loss on net investment hedge | 7,338 | |
Derivatives used in Net Investment Hedge, Tax Expense (Benefit) | $ (1,549) |
DERIVATIVE FINANCIAL INSTRUME48
DERIVATIVE FINANCIAL INSTRUMENTS, Fair Value of Derivative Instruments in the Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Sep. 30, 2017 |
Other Long-term Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of foreign exchange contract asset derivatives | $ 0 | |
Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Other Noncurrent Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of foreign exchange contract asset derivatives | 84 | $ 117 |
Fair value of foreign exchange contract liability derivatives | 0 | 0 |
Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | 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 | 211 | 31 |
Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Other Long-term Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of foreign exchange contract liability derivatives | 0 | |
Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Prepaid Expenses and Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of foreign exchange contract asset derivatives | 411 | 0 |
Fair value of foreign exchange contract liability derivatives | 0 | 0 |
Designated as Hedging Instrument [Member] | Net Investment Hedging [Member] | Other Long-term Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of foreign exchange contract asset derivatives | 0 | |
Fair value of foreign exchange contract liability derivatives | 8,780 | 1,442 |
Not Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | 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 | 111 | 408 |
Not Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | Prepaid Expenses and Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of foreign exchange contract asset derivatives | 22 | 146 |
Fair value of foreign exchange contract liability derivatives | $ 0 | $ 0 |
DERIVATIVE FINANCIAL INSTRUME49
DERIVATIVE FINANCIAL INSTRUMENTS, Effect of Derivative Instruments on the Consolidated Statement of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Not Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | Other income (expense), net [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Other income (loss), net | $ 887 | $ 320 | $ 78 | $ (1,474) |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Sep. 30, 2017 | |
Postretirement Obligations in Foreign Jurisdictions [Abstract] | ||
Expected term for benefit payments of all unfunded plans | 10 years | |
2018 to 2027 | $ 5,785 | |
Purchase obligations [Abstract] | ||
Purchase obligation payment, paid in 2017 and 2018 | 1,500 | |
Purchase obligation, due in 2019 | 1,500 | |
Current portion of long-term contract liability | 1,500 | $ 1,500 |
Contractual obligation | $ 5,884 |
ACCUMULATED OTHER COMPREHENSI51
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Net loss on investment hedge | $ (5,789) | |||
Components of Accumulated Comprehensive Income (Loss) [Roll Forward] | ||||
Balance, beginning of period | 595,037 | |||
Foreign currency translation adjustments, net of tax | $ 3,961 | $ 13,883 | 11,105 | $ (3,691) |
Available-for-sale securities adjustments, net of tax | 46 | 0 | 0 | 0 |
Change in fair value, net of tax | 165 | 1,026 | ||
Reclassification adjustment into earnings, net of tax | (18) | (208) | ||
Balance, end of period | 635,511 | 635,511 | ||
Other Comprehensive Income (Loss), Tax [Abstract] | ||||
Foreign currency translation adjustment, tax | (1,384) | (1,732) | ||
Change in fair value, tax | 57 | 576 | ||
Reclassification adjustment into earnings, tax | (6) | (117) | ||
Change in pension and other postretirement liabilities, tax | 0 | 0 | ||
Accumulated Other Comprehensive Income (Loss) [Member] | ||||
Components of Accumulated Comprehensive Income (Loss) [Roll Forward] | ||||
Balance, beginning of period | 3,949 | 9,556 | ||
Balance, end of period | 15,201 | 6,683 | 15,201 | 6,683 |
Foreign Currency Translation Adjustment [Member] | ||||
Components of Accumulated Comprehensive Income (Loss) [Roll Forward] | ||||
Balance, beginning of period | 5,239 | 11,985 | ||
Foreign currency translation adjustments, net of tax | 11,105 | (3,691) | ||
Balance, end of period | 16,344 | 8,294 | 16,344 | 8,294 |
Cash Flow Hedges [Member] | ||||
Components of Accumulated Comprehensive Income (Loss) [Roll Forward] | ||||
Balance, beginning of period | 46 | (817) | ||
Change in fair value, net of tax | 165 | 1,026 | ||
Reclassification adjustment into earnings, net of tax | (18) | (208) | ||
Balance, end of period | 193 | 1 | 193 | 1 |
Pension and Other Postretirement Liabilities [Member] | ||||
Components of Accumulated Comprehensive Income (Loss) [Roll Forward] | ||||
Balance, beginning of period | (1,336) | (1,612) | ||
Balance, end of period | (1,336) | $ (1,612) | (1,336) | $ (1,612) |
Available-For-Sale Securities | ||||
Components of Accumulated Comprehensive Income (Loss) [Roll Forward] | ||||
Balance, end of period | $ 0 | $ 0 |
SHARE-BASED COMPENSATION PLAN52
SHARE-BASED COMPENSATION PLANS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Total share-based compensation expense | $ 4,284 | $ 3,552 | $ 10,082 | $ 6,465 | |
Tax benefit | (1,022) | (1,220) | (2,249) | (2,167) | |
Total share-based compensation expense, net of tax | 3,262 | 2,332 | 7,833 | 4,298 | |
Share-based Compensation | 10,082 | 6,465 | |||
Excess Tax Benefit from Share-based Compensation, Operating Activities | $ (2,806) | (6,021) | 0 | ||
Cost of Goods Sold [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Total share-based compensation expense | 567 | 552 | 1,354 | 1,093 | |
Research, Development and Technical [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Total share-based compensation expense | 516 | 459 | 1,046 | 878 | |
Selling and Marketing [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Total share-based compensation expense | 329 | 347 | 671 | 686 | |
General and Administrative Expense [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Total share-based compensation expense | $ 2,872 | $ 2,194 | $ 7,011 | $ 3,808 | |
Stock Option and Restricted Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Vesting period of awards | 4 years | ||||
Stock Option and Restricted Stock [Member] | Executive Vice President and Chief Financial Officer [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Share-based Compensation | $ 1,744 |
OTHER INCOME, NET (Details)
OTHER INCOME, NET (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
OTHER INCOME, NET [Abstract] | ||||
Interest income | $ 1,156 | $ 516 | $ 2,107 | $ 937 |
Other income (expense) | (94) | (282) | (373) | 293 |
Total other income (expense), net | $ 1,062 | $ 234 | $ 1,734 | $ 1,230 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2018 | |
Income Tax Disclosure [Line Items] | |||||||
Effective income tax rate | 19.60% | 20.80% | 63.80% | 20.50% | |||
Transition tax on un-repatriated earnings of foreign subsidiaries payment period | 8 years | ||||||
Provisional discrete tax expense | $ 212 | $ 32,880 | |||||
Transition tax for accumulated foreign earnings, Income tax expense | $ 24,641 | $ 0 | |||||
Transition tax for accumulated foreign earnings, Liability, Noncurrent | $ 22,450 | 22,450 | |||||
Provisional non-US withholding taxes | 6,683 | ||||||
Discrete non-cash expense, change in tax rate | $ 1,767 | ||||||
Minimum [Member] | |||||||
Income Tax Disclosure [Line Items] | |||||||
Effective income tax rate | 24.00% | ||||||
Maximum [Member] | |||||||
Income Tax Disclosure [Line Items] | |||||||
Effective income tax rate | 27.00% | ||||||
Forecast [Member] | |||||||
Income Tax Disclosure [Line Items] | |||||||
Federal statutory tax rate | 21.00% | 24.50% | |||||
Forecast [Member] | Minimum [Member] | |||||||
Income Tax Disclosure [Line Items] | |||||||
Effective income tax rate | 21.00% | ||||||
Forecast [Member] | Maximum [Member] | |||||||
Income Tax Disclosure [Line Items] | |||||||
Effective income tax rate | 24.00% | ||||||
Foreign Country [Member] | South Korea [Member] | |||||||
Income Tax Holiday [Line Items] | |||||||
Percentage of local statutory rate in effect for 2017 | 50.00% | ||||||
Percentage of local statutory rate in effect for 2016 | 50.00% | ||||||
Percentage applicable on federal statutory tax rate - 2015 | 0.00% | ||||||
Percentage applicable on federal statutory tax rate - 2014 | 0.00% | ||||||
Percentage applicable on federal statutory tax rate - 2013 | 0.00% | ||||||
Income tax provision reduction as a result of the tax holiday | $ 1,915 | ||||||
Tax Holiday approximate diluted earning per share benefit (in dollars per share) | $ 0.08 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Numerator [Abstract] | ||||
Net income (loss) | $ 29,737 | $ 18,280 | $ 26,654 | $ 40,511 |
Less: income attributable to participating securities | (30) | (48) | (34) | (146) |
Earnings available to common shares | $ 29,707 | $ 18,232 | $ 26,620 | $ 40,365 |
Denominator [Abstract] | ||||
Weighted average common shares (Denominator for basic calculation) (in shares) | 25,592,508 | 25,030,367 | 25,473,757 | 24,798,122 |
Weighted average effect of dilutive securities [Abstract] | ||||
Share-based compensation (in shares) | 568,678 | 496,090 | 601,925 | 505,834 |
Diluted weighted average common shares (Denominator for diluted calculation) (in shares) | 26,161,186 | 25,526,457 | 26,075,682 | 25,303,956 |
Earnings per share [Abstract] | ||||
Basic (in dollars per share) | $ 1.16 | $ 0.73 | $ 1.05 | $ 1.63 |
Diluted (in dollars per share) | $ 1.14 | $ 0.71 | $ 1.02 | $ 1.60 |
Stock Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Outstanding stock options excluded from diluted earnings (in shares) | 100,000 | 400,000 | 100,000 | 400,000 |
FINANCIAL INFORMATION BY INDU56
FINANCIAL INFORMATION BY INDUSTRY SEGMENT AND PRODUCT LINE (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2018USD ($)Segment | Mar. 31, 2017USD ($) | |
FINANCIAL INFORMATION BY INDUSTRY SEGMENT AND PRODUCT LINE [Abstract] | ||||
Number of segments | Segment | 1 | |||
Revenue from External Customer [Line Items] | ||||
Revenue | $ 142,978 | $ 119,184 | $ 282,957 | $ 242,438 |
Tungsten Slurries [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 60,428 | 51,835 | 123,305 | 107,136 |
Dielectric Slurries [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 34,529 | 27,843 | 66,261 | 57,125 |
Polishing Pads [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 21,016 | 17,139 | 39,895 | 33,348 |
Other Metals Slurries [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 16,884 | 14,670 | 33,352 | 30,450 |
Engineered Surface Finishes and other [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | $ 10,121 | $ 7,697 | $ 20,144 | $ 14,379 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) - USD ($) $ in Thousands | Apr. 06, 2018 | Mar. 31, 2018 |
Subsequent Event [Line Items] | ||
Loss on termination of net investment hedge | $ (5,789) | |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Debt Instrument, Fair Value Disclosure | $ 137,813 | |
Loss on termination of net investment hedge | $ (690) |