• Revenue of $100.4 Million Reflects Soft Industry Demand, as Expected
  
• GAAP Gross Profit Margin of 50.0 Percent of Revenue; Non-GAAP 51.6 Percent
• GAAP Earnings Per Share of 46 Cents; Non-GAAP 56 Cents
• NexPlanar Integration on Schedule
• As Previously Announced, Initiated Quarterly Cash Dividend Program and Increased Share Repurchase Authorization

AURORA, Ill., Jan. 28, 2016 (GLOBE NEWSWIRE) -- Cabot Microelectronics Corporation (Nasdaq:CCMP), the world’s leading supplier of chemical mechanical planarization (CMP) polishing slurries and a growing CMP pad supplier to the semiconductor industry, today reported financial results for its first quarter of fiscal 2016, which ended December 31, 2015.

During the first fiscal quarter, total revenue was $100.4 million, reflecting continued soft semiconductor industry demand, and including a partial quarter benefit of the company’s acquisition of NexPlanar Corporation, a supplier of advanced CMP pad solutions, which was completed on October 22, 2015.  The company achieved a gross profit margin of 50.0 percent of revenue in the first fiscal quarter; non-GAAP gross profit margin was 51.6 percent of revenue, excluding NexPlanar acquisition-related costs and amortization expense, which is 70 basis points higher than in the same quarter last year.  The company recorded diluted earnings per share of $0.46 for the first fiscal quarter; non-GAAP diluted earnings per share were $0.56, excluding the referenced costs related to the acquisition.  As of December 31, 2015, the company’s balance sheet reflected a cash balance of $218.1 million and $161.9 million of debt outstanding.

As announced on January 7, 2016, the company’s Board of Directors authorized the initiation of a dividend program under which the company intends to pay regular quarterly cash dividends on its common stock.  The company’s Board declared an initial quarterly cash dividend of $0.18 per share payable on or about April 15, 2016 to shareholders of record at the close of business on March 17, 2016.  The $0.18 dividend would represent an annualized amount of approximately $18 million.  The Board also authorized an increase in the company’s existing share repurchase program to $150 million, from the approximately $75 million that was available as of December 31, 2015.

“We are pleased with our solid start to fiscal 2016, within a soft semiconductor industry and challenging macro-economic environment, and including the impact of our recent acquisition of NexPlanar,” said David Li, President and CEO of Cabot Microelectronics.  “During the quarter, we made progress on a number of our strategic initiatives, including advancing the integration of NexPlanar into our CMP consumables business.  Customer reactions to our expanded pad product offering have been extremely positive, and we believe that this acquisition will accelerate growth in our pads product area and contribute to meaningful profitable growth for our company.  In addition, during the quarter we continued the transformation of our dielectrics slurry product portfolio.  We continue to broadly commercialize our new family of innovative dielectrics slurry products, which we believe offer our customers much higher performance through significantly lower defectivity, at a much lower cost.  We expect this dielectrics transformation will be another driver of profitable growth for our company over the next several years.”

Mr. Li continued, “Over the years, our strong cash flow has enabled us to execute our growth and investment strategies while also generating cash well in excess of our operational needs.  We are delighted to have recently announced the initiation of a quarterly dividend, coupled with an expanded share repurchase program.  Both of these demonstrate our confidence in our future cash generation capabilities as well as our continued commitment to distributing capital to shareholders.  This dividend initiation represents another element of our well balanced capital deployment strategy.”

Key Financial Information

Total first fiscal quarter revenue of $100.4 million represents a decrease of 10.3 percent compared to the same quarter last year.  Revenue from the company’s CMP pads grew 19.9 percent year-over-year, and includes a partial quarter benefit of $4.0 million from NexPlanar; revenue from all other major product areas decreased.  The decrease reflects continued softness in demand within the global semiconductor industry, continued soft demand for PCs, and competitive dynamics within dielectrics and data storage applications, all of which the company has previously disclosed.  Foreign exchange effects reduced revenue by $1.4 million, primarily due to the weaker Korean won and Japanese yen versus the U.S. dollar.

Gross profit, expressed as a percentage of revenue, was 50.0 percent this quarter, which includes $0.7 million of NexPlanar acquisition-related costs and $0.9 million of amortization expense.  Excluding these costs, non-GAAP gross profit was 51.6 percent of revenue, which is 70 basis points higher than the 50.9 percent of revenue reported in the same quarter a year ago.  Other factors impacting gross profit this quarter compared to last year include a higher valued product mix, lower logistics costs and costs related to raw material quality, partially offset by lower sales volume.  The company’s full fiscal year GAAP gross profit guidance range of 49 to 51 percent of revenue, including NexPlanar, remains unchanged.

Operating expenses, which include research, development and technical, selling and marketing, and general and administrative expenses, were $35.8 million in the first fiscal quarter, including $2.1 million of NexPlanar acquisition-related costs and $0.4 million of amortization expense.  Operating expenses were $1.4 million higher than the $34.4 million reported in the same quarter a year ago, reflecting costs related to the acquisition, partially offset by the absence of costs associated with certain executive officer transitions that occurred in the same quarter last year, and lower staffing related costs, including incentive compensation costs.  The company is lowering its full fiscal year guidance range for operating expenses to $141 million to $145 million, including NexPlanar; this is $2 million lower than the company’s prior guidance range of $143 million to $147 million.

Net income for the quarter was $11.3 million, or $13.9 million on a non-GAAP basis, excluding the referenced costs related to the NexPlanar acquisition, down from $19.9 million reported in the same quarter last year.  Net income was lower than in the same quarter last year, primarily due to lower revenue, and costs related to the acquisition.

Diluted earnings per share were $0.46 this quarter, or $0.56 on a non-GAAP basis, excluding the referenced costs related to the acquisition, compared to the record level of $0.80 reported in the first quarter of fiscal 2015.

During the first fiscal quarter, the company purchased $10.0 million of stock under its share repurchase program.  Over the last twelve years, the company has distributed approximately $695 million to its shareholders, approximately $345 million through share repurchases, and nearly $350 million in 2012 through a leveraged recapitalization with a special cash dividend.  The company’s key priorities of its balanced capital deployment strategy include funding organic growth opportunities, dividends, share repurchases, and acquisition opportunities in closely-related areas.

CONFERENCE CALL

Cabot Microelectronics Corporation’s quarterly earnings conference call will be held today at 9:00 a.m. Central Time.  The conference call will be available via live webcast and replay from the company’s website, www.cabotcmp.com, or by phone at (844) 825-4410.  Callers outside the U.S. can dial (973) 638-3236.  The conference code for the call is 15926250.  A transcript of the formal comments made during the conference call will also be available in the Investor Relations section of the company’s website.

USE OF NON-GAAP FINANCIAL INFORMATION

The company presented the following measures considered as non-GAAP by the U.S. Securities and Exchange Commission:  gross profit margin, net income and diluted earnings per share excluding the effects of NexPlanar acquisition-related costs and amortization expense.  The non-GAAP financial information provided in this press release is a supplement to, and not a substitute for, the company’s financial results presented in accordance with U.S. GAAP.  These non-GAAP financial measures are provided to enhance the investor's understanding about the company's ongoing operations.  Specifically, the company believes the NexPlanar acquisition-related costs and amortization expense are not indicative of its core operating results, and thus presents its gross profit margin, net income and diluted earnings per share excluding these costs.  The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for results prepared and presented in accordance with U.S. GAAP.  A reconciliation table of GAAP to non-GAAP financial measures, including gross profit percentage, net income and diluted earnings per share, is contained in this press release.