Cabot Microelectronics Corp. (CCMP, Financial) filed Quarterly Report for the period ended 2009-06-30.
Cabot Microelectronics Corp. is a leading supplier of slurries used in chemical mechanical planarization a polishing process used in the manufacturing of integrated circuit devices. Chemical mechanical planarization is an important part of the integrated circuit device manufacturing process because it helps manufacturers make smaller faster and more complex integrated circuit devices. Chemical mechanical planarization slurries are liquids containing abrasives and chemicals that facilitate and enhance the mechanical planarization polishing process. Cabot Microelectronics Corp. has a market cap of $784.5 million; its shares were traded at around $33.51 with a P/E ratio of 104.7 and P/S ratio of 2.1.
Total cost of goods sold was $113.1 million for the nine months ended June 30, 2009, which represented a decrease of 25.8%, or $39.3 million, from the nine months ended June 30, 2008. Of this decrease, $53.0 million was due to decreased sales volume due to the global economic recession, $8.6 million was due to lower fixed manufacturing costs and $4.5 million was due to higher manufacturing yields in our CMP slurry and pad production. These cost decreases were partially offset by a $12.8 million increase due to a higher-cost product mix, $12.0 million cost increase due to lower utilization of our manufacturing capacity on the decreased level of sales and a $2.7 million increase due to the effect of foreign exchange rate changes.
Total research, development and technical expenses were $35.6 million for the nine months ended June 30, 2009, which represented a decrease of 2.6%, or $0.9 million, from the nine months ended June 30, 2008. The decrease was primarily related to $1.7 million in lower staffing-related costs, $0.4 million in lower depreciation expense and $0.3 million in lower travel-related costs. These cost decreases were partially offset by $1.1 million in pre-tax impairments recorded during our second quarter of fiscal 2009 on certain research and development equipment in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” and $0.4 million in higher expenses for laboratory supplies.
Selling and marketing expenses were $16.4 million for the nine months ended June 30, 2009, which represented a decrease of 19.3%, or $3.9 million, from the nine months ended June 30, 2008. The decrease was primarily due to $2.0 million in lower staffing-related costs, $0.8 million in lower travel-related costs, $0.3 million in lower professional fees and $0.3 million in lower advertising and trade show costs.
In the first nine months of fiscal 2009, cash flows used in investing activities were $67.5 million representing $60.5 million used for our acquisition of Epoch, net of $6.2 million in cash acquired, and $7.0 million in purchases of property, plant and equipment. In the first nine months of fiscal 2008, cash flows provided by investing activities were $121.9 million. We had net sales of short-term investments of $137.4 million as we liquidated a majority of our ARS during the quarter ended March 31, 2008. This cash inflow was partially offset by $15.5 million in cash used for purchases of property, plant and equipment, primarily for the purchase and installation of a 300-millimeter polishing tool and related metrology equipment at our Asia Pacific technology center and building improvements and equipment to enhance our pad production capabilities. We estimate that our total capital expenditures in fiscal 2009 will be approximately $10 million.
In the first nine months of fiscal 2009, cash flows used in financing activities were $0.1 million, representing $0.8 million in principal payments on capital leases and $0.3 million in repurchases of common stock pursuant to the terms of our Second Amended and Restated Cabot Microelectronics Corporation 2000 Equity Incentive Plan for shares withheld to cover payroll taxes on the vesting of restricted stock granted under the Equity Incentive Plan, partially offset by $1.1 million received from the issuance of common stock under our Equity Incentive Plan and Cabot Microelectronics Corporation 2007 Employee Stock Purchase Plan. We did not repurchase any shares under our share repurchase program during the first nine months of fiscal 2009. In the first nine months of fiscal 2008, cash flows used in financing activities were $33.3 million, primarily as a result of $34.0 million in repurchases of common stock under our share repurchase program. In January 2008, our Board of Directors authorized a share repurchase program for up to $75.0 million of our outstanding common stock. Share repurchases are made from time to time, depending on market conditions, at management s discretion. As of June 30, 2009, we have $50.0 million remaining on this share repurchase program. We fund share purchases under this program from our available cash balance. We view this program as a flexible and effective means to return cash to stockholders.
Read the The complete ReportCCMP is in the portfolios of John Hussman of Hussman Economtrics Advisors, Inc., HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC.
Cabot Microelectronics Corp. is a leading supplier of slurries used in chemical mechanical planarization a polishing process used in the manufacturing of integrated circuit devices. Chemical mechanical planarization is an important part of the integrated circuit device manufacturing process because it helps manufacturers make smaller faster and more complex integrated circuit devices. Chemical mechanical planarization slurries are liquids containing abrasives and chemicals that facilitate and enhance the mechanical planarization polishing process. Cabot Microelectronics Corp. has a market cap of $784.5 million; its shares were traded at around $33.51 with a P/E ratio of 104.7 and P/S ratio of 2.1.
Highlight of Business Operations:
Operating expenses were $25.1 million in our third quarter of fiscal 2009, compared to $32.5 million in the third quarter of fiscal 2008 and $30.0 million in the previous fiscal quarter. The decrease in operating expenses in the third quarter of fiscal 2009 from the comparable period of fiscal 2008 was primarily due to lower staffing related costs and decreased professional fees, including costs to enforce our intellectual property. The decrease in operating expenses from the prior quarter was primarily due to the absence of $3.6 million of specific, pre-tax expenses recorded in our second fiscal quarter, including a $1.5 million write-off of in-process research and development expenses related our acquisition of Epoch Material Co., Ltd. (Epoch), a $1.1 million impairment of certain research and development equipment, and a $1.0 million increase in our reserve for bad debt expense due to the impact of the global economic conditions on customer collections. To a lesser extent, the decrease in operating expenses from the prior quarter was due to lower staffing-related costs and lower professional fees. The reduction in operating expenses was also positively impacted by our ongoing cost reduction actions that we implemented during the first half of fiscal 2009. We currently expect operating expenses will be at the low end of our previous guidance range of $115 million to $120 million for full year fiscal 2009, including the operating expenses of Epoch.Total cost of goods sold was $113.1 million for the nine months ended June 30, 2009, which represented a decrease of 25.8%, or $39.3 million, from the nine months ended June 30, 2008. Of this decrease, $53.0 million was due to decreased sales volume due to the global economic recession, $8.6 million was due to lower fixed manufacturing costs and $4.5 million was due to higher manufacturing yields in our CMP slurry and pad production. These cost decreases were partially offset by a $12.8 million increase due to a higher-cost product mix, $12.0 million cost increase due to lower utilization of our manufacturing capacity on the decreased level of sales and a $2.7 million increase due to the effect of foreign exchange rate changes.
Total research, development and technical expenses were $35.6 million for the nine months ended June 30, 2009, which represented a decrease of 2.6%, or $0.9 million, from the nine months ended June 30, 2008. The decrease was primarily related to $1.7 million in lower staffing-related costs, $0.4 million in lower depreciation expense and $0.3 million in lower travel-related costs. These cost decreases were partially offset by $1.1 million in pre-tax impairments recorded during our second quarter of fiscal 2009 on certain research and development equipment in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” and $0.4 million in higher expenses for laboratory supplies.
Selling and marketing expenses were $16.4 million for the nine months ended June 30, 2009, which represented a decrease of 19.3%, or $3.9 million, from the nine months ended June 30, 2008. The decrease was primarily due to $2.0 million in lower staffing-related costs, $0.8 million in lower travel-related costs, $0.3 million in lower professional fees and $0.3 million in lower advertising and trade show costs.
In the first nine months of fiscal 2009, cash flows used in investing activities were $67.5 million representing $60.5 million used for our acquisition of Epoch, net of $6.2 million in cash acquired, and $7.0 million in purchases of property, plant and equipment. In the first nine months of fiscal 2008, cash flows provided by investing activities were $121.9 million. We had net sales of short-term investments of $137.4 million as we liquidated a majority of our ARS during the quarter ended March 31, 2008. This cash inflow was partially offset by $15.5 million in cash used for purchases of property, plant and equipment, primarily for the purchase and installation of a 300-millimeter polishing tool and related metrology equipment at our Asia Pacific technology center and building improvements and equipment to enhance our pad production capabilities. We estimate that our total capital expenditures in fiscal 2009 will be approximately $10 million.
In the first nine months of fiscal 2009, cash flows used in financing activities were $0.1 million, representing $0.8 million in principal payments on capital leases and $0.3 million in repurchases of common stock pursuant to the terms of our Second Amended and Restated Cabot Microelectronics Corporation 2000 Equity Incentive Plan for shares withheld to cover payroll taxes on the vesting of restricted stock granted under the Equity Incentive Plan, partially offset by $1.1 million received from the issuance of common stock under our Equity Incentive Plan and Cabot Microelectronics Corporation 2007 Employee Stock Purchase Plan. We did not repurchase any shares under our share repurchase program during the first nine months of fiscal 2009. In the first nine months of fiscal 2008, cash flows used in financing activities were $33.3 million, primarily as a result of $34.0 million in repurchases of common stock under our share repurchase program. In January 2008, our Board of Directors authorized a share repurchase program for up to $75.0 million of our outstanding common stock. Share repurchases are made from time to time, depending on market conditions, at management s discretion. As of June 30, 2009, we have $50.0 million remaining on this share repurchase program. We fund share purchases under this program from our available cash balance. We view this program as a flexible and effective means to return cash to stockholders.
Read the The complete ReportCCMP is in the portfolios of John Hussman of Hussman Economtrics Advisors, Inc., HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC.
