EXHIBIT 99.1
CABOT MICROELECTRONICS REPORTS
RESULTS FOR FOURTH FISCAL QUARTER AND FISCAL YEAR 2004,
AND ANNOUNCES ASIA PACIFIC TECHNOLOGY CENTER
AURORA, IL, October 28, 2004 -- Cabot Microelectronics Corporation (Nasdaq:
CCMP), the leading supplier of chemical mechanical planarization (CMP) polishing
slurries to the semiconductor industry, today reported financial results for its
fourth fiscal quarter and fiscal year ended September 30, 2004. The company also
announced that it has begun the design of a new technology center to be
constructed in the Asia Pacific region.
Total revenue for the fourth fiscal quarter of 2004 was $82.7 million, up 7.5%
from $76.9 million in the prior quarter and up 21.8% from $67.9 million in the
fourth quarter a year ago. For the second consecutive quarter, the company
reported record quarterly revenue. The company experienced sequential revenue
increases this quarter in all of its slurry application areas. Average selling
price was essentially unchanged from the previous quarter, as a higher valued
product mix offset the impact of selected price reductions.
Gross profit for the quarter was $40.2 million, up 3.1% from the $39.0 million
reported last quarter and up 16.8% from $34.4 million in the year ago quarter.
As a percentage of revenue, gross profit was 48.6% this quarter compared to
50.7% reported for last quarter. Gross profit this quarter was adversely
affected by the impact of selected price reductions and higher costs, including
transition costs associated with the termination of a polishing pad distribution
agreement, as well as lower yields this quarter in the company's manufacturing
operations. Gross profit for the year ago quarter was 50.7% of revenue.
Operating expenses of $20.7 million, consisting of research and development,
selling and marketing, and general and administrative expenses, decreased by
$0.4 million sequentially from $21.1 million last quarter, and were $0.2 million
higher than $20.5 million in the year ago quarter.
Net income for the quarter was $13.2 million, up 7.5% from $12.2 million last
quarter, and up 36.5% from $9.6 million in the same quarter last year. Diluted
earnings per share were $0.53 this quarter, compared to $0.49 in the previous
quarter and $0.39 in the year ago quarter. The weighted average number of shares
outstanding on a diluted basis was 24.8 million this quarter compared to 24.9
million in the prior quarter, primarily reflecting the company's repurchase of
approximately 240 thousand shares for $8 million under its share repurchase
program that was announced in July, 2004. The share repurchase program is
authorized for up to $25 million.
Revenue for fiscal year 2004 was $309.4 million, up 23.0% from the $251.7
million reported for fiscal year 2003. Diluted earnings per share in fiscal 2004
were $1.88, which represents a record for the company, up 22.9% from the $1.53
reported in fiscal 2003. The increase in earnings per share in fiscal 2004
reverses the year-over-year decrease in earnings per share experienced in the
prior two fiscal years.
The company's new Asia Pacific technology center will be constructed adjacent to
its existing manufacturing facility in Geino, Japan. The new 18,000 sq. ft
(1,672 sq. meters) facility will provide polishing, metrology, and product
development capabilities. The technology center, which is the company's first
development facility outside of the United States, is being designed to include
a clean room, development and applications laboratories, a pilot plant and
office space. The facility is scheduled to open during the third fiscal quarter
of 2005.
"We are proud of our strong financial performance this quarter and for the
entire fiscal year," stated William P. Noglows, Chairman and CEO. "The
achievement of our second consecutive quarter of record revenue as well as our
record earnings per share for the fiscal year are notable accomplishments. The
company's performance this year demonstrates our ability to continue to grow
profitably despite increasing competitive pressures, increasing demands on
product quality, and through industry cycles. We are also excited about the
progress we have made throughout the year on three strategic initiatives --
technology leadership, operations excellence and getting closer to customers --
that we believe will help provide for our continued success and leadership in
CMP slurries. For example, the construction of our new technology center in
Japan reflects the importance of the Asia Pacific market to our business and
underscores our commitment both to continuing to invest in our technology
infrastructure to maintain our technology leadership, and to becoming even more
responsive to the needs of our customers. Further, in pursuit of operations
excellence, we have successfully launched a company-wide six-sigma program aimed
at increasing productivity and managing costs. We believe that these
initiatives, along with the breadth and depth of our business, which is focused
on providing comprehensive CMP solutions for both leading edge logic and memory
applications, will continue to provide a solid base from which to grow in the
coming year, despite the current uncertainty in the semiconductor industry."
CONFERENCE CALL
Cabot Microelectronics' quarterly earnings conference call will be held today at
9:00 a.m. Central Time. The live conference call will be available to all
interested parties via webcast from the company's website, www.cabotcmp.com, or
by phone at (800) 893-3008. Callers outside the U.S. can dial (706) 634-5531.
For those who cannot listen to the live broadcast, a replay will be available
through November, 18, 2004, by calling (800) 642-1687 or (706) 645-9291, and
using access code 1609499, or via webcast at www.cabotcmp.com. A transcript of
the formal comments made during the conference call will be available in the
Investor Relations section of the company's website.
ABOUT CABOT MICROELECTRONICS
Cabot Microelectronics Corporation, headquartered in Aurora, Illinois, is the
leading supplier of CMP slurries for polishing various materials used in
semiconductor manufacturing processes. The company's products play a critical
role in the production of the most advanced semiconductor devices, enabling the
manufacture of smaller, faster and more complex devices by its customers. For
more information about Cabot Microelectronics Corporation, visit
www.cabotcmp.com or contact Mr. David H. Li, Director of Investor Relations, at
(630) 499-2600.
SAFE HARBOR STATEMENT
This news release may include statements that constitute "forward-looking
statements" within the meaning of federal securities regulations. These
forward-looking statements include statements related to future sales and
operating results, company and industry growth and trends, growth of the markets
in which the company participates, international events, product performance,
new product introductions, development of new products and technologies, and the
construction of new facilities by Cabot Microelectronics. These forward-looking
statements involve a number
of risks, uncertainties, and other factors, including those described from time
to time in Cabot Microelectronics' filings with the Securities and Exchange
Commission (SEC), that could cause actual results to differ materially from
those described by these forward-looking statements. In particular, see "Risks
Relating to Our Business" in Management's Discussion and Analysis in our
quarterly report on Form 10-Q for the quarter ended June 30, 2004, and our
Annual Report on Form 10-K for the fiscal year ended September 30, 2003, both
filed with the SEC. Cabot Microelectronics Corporation assumes no obligation to
update this forward-looking information.
CABOT MICROELECTRONICS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited and amounts in thousands, except per share amounts)
Quarter Ended Twelve Months Ended
----------------------------------------- -------------------------
Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
2004 2004 2003 2004 2003
--------- --------- --------- --------- ---------
Revenue $ 82,714 $ 76,925 $ 67,903 $ 309,433 $ 251,665
Cost of goods sold 42,498 37,915 33,458 156,805 124,269
--------- --------- --------- --------- ---------
Gross profit 40,216 39,010 34,445 152,628 127,396
Operating expenses:
Research and development 10,979 11,158 12,469 44,003 41,516
Selling and marketing 3,844 4,235 3,338 16,225 11,221
General and administrative 5,819 5,659 4,607 22,351 18,225
Amortization of intangibles 85 85 85 340 340
--------- --------- --------- --------- ---------
Total operating expenses 20,727 21,137 20,499 82,919 71,302
--------- --------- --------- --------- ---------
Operating income 19,489 17,873 13,946 69,709 56,094
Other income (expense), net 117 72 (111) 139 (27)
--------- --------- --------- --------- ---------
Income before income taxes 19,606 17,945 13,835 69,848 56,067
Provision for income taxes 6,439 5,699 4,186 23,120 18,334
--------- --------- --------- --------- ---------
Net income $ 13,167 $ 12,246 $ 9,649 $ 46,728 $ 37,733
========= ========= ========= ========= =========
Basic earnings per share $ 0.53 $ 0.49 $ 0.39 $ 1.89 $ 1.55
========= ========= ========= ========= =========
Weighted average basic shares outstanding 24,689 24,818 24,591 24,750 24,401
========= ========= ========= ========= =========
Diluted earnings per share $ 0.53 $ 0.49 $ 0.39 $ 1.88 $ 1.53
========= ========= ========= ========= =========
Weighted average diluted shares outstanding 24,783 24,912 25,049 24,882 24,665
========= ========= ========= ========= =========
CABOT MICROELECTRONICS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited and amounts in thousands)
September 30, September 30,
2004 2003
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ASSETS:
Current assets:
Cash and cash equivalents $ 157,318 $ 111,318
Accounts receivable, net 41,347 37,564
Inventories, net 24,474 23,814
Other current assets 6,542 6,416
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Total current assets 229,681 179,112
Property, plant and equipment, net 127,794 133,695
Other long-term assets 5,816 2,810
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Total assets $ 363,291 $ 315,617
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LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 13,080 $ 12,521
Capital lease obligations 1,272 1,716
Accrued expenses, income taxes payable and other current liabilities 18,023 14,679
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Total current liabilities 32,375 28,916
Capital lease obligations 6,385 7,452
Deferred income taxes and other long-term liabilities 8,909 7,476
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Total liabilities 47,669 43,844
Stockholders' equity 315,622 271,773
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Total liabilities and stockholders' equity $ 363,291 $ 315,617
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