Attached files
| file | filename |
|---|---|
| 8-K - CMC 8-K FILED 04-26-18 - CMC Materials, Inc. | cmc8kfiled042618.htm |
| EX-99.1 - EXHIBIT 99.1 - CMC Materials, Inc. | exhibit99_1.htm |
1 Second Quarter Fiscal 2018 Earnings Call April 26, 2018
Safe Harbor Statement 2 The information contained in and discussed during this presentation may include “forward-looking statements” within the meaning of federal securities regulations. These forward-looking statements involve a number of risks, uncertainties, and other factors, including those described 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. Cabot Microelectronics Corporation assumes no obligation to update this forward-looking information.
2018 Second Quarter Highlights 3 Record Revenue of $143M; exceeded prior year by $24M, or 20%In-line with general expectations stated in previous quarterDriven by continued strong industry demand, particularly in memoryRecord Net Income of $29.7M; exceeded prior year by $11.5M, or 63%Approximately 21% of revenueRecord EPS of $1.14; exceeded prior year by $0.43, or 61%Recent Announcements:Update to Capital Deployment Program Doubled regular quarterly cash dividend to $0.40 per shareIntention to distribute 50% or more of prior fiscal year free cash flow to shareholders on an ongoing basisCompleted significant repatriation of overseas cash and paid off term loan of $138MCollaboration with Fujimi Incorporated for the development of certain advanced IC CMP solutions Demonstrated performance versus long term financial goals of growth faster than the industry and margin expansion Note: Data represented by rounded values throughout this presentation
4 2018 Q2* 2017 Q2* % Change from Prior Year* Comments Total Revenue $143M $119M 20% Continued execution of our strategic initiatives and global semiconductor industry demand Tungsten Slurries $60M $52M 17% Strong demand in memory and logic applications Dielectrics Slurries $35M $28M 24% Winning more business with our higher performing, lower cost, and higher profitability products Polishing Pads $21M $17M 23% Broad product portfolio and unique product attributes Other Metals Slurries $17M $15M 15% Metals slurry products other than tungsten Engineered Surface Finishes/Other $10M $8M 32% Includes QED Technologies Revenue Overview * Data represented by rounded values
5 GAAP Results* Non-GAAP Results* Comments on Results 2018 Q2 2017 Q2 2018 Q2 2017 Q2 Revenue $143.0M $119.2M Record Revenue Gross Profit, % of revenue 52.5% 50.4% 53.4% 51.4% Driven by increased volume combined with high-value product mix Updated full year GAAP gross profit margin guidance range to 51-53% of revenue Operating Income, % of revenue 25.9% 20.1% 27.2% 21.5% Record Net IncomeIncreases reflect operating leverage driven by revenue growth, combined with ongoing attention to controlling costs Net Income $29.7M $18.3M $31.3 M $19.3M Diluted EPS $1.14 $0.71 $1.19 $0.76 Financial Details * Data represented by rounded values
Balance Sheet and Cash Flow 6 Cash and Investments balance of $461M, increase of $36M over prior quarterTotal Debt of $137.5M Paid off the remaining outstanding Term Loan in AprilOperating Cash Flow was $36.5MCapital Expenditures were $4.6MFree Cash Flow1 was $31.9M 1 Free cash flow is operating cash flow less capital expenditures
7 Capital Deployment Program 100% increase over the prior regular quarterly cash dividend paid of $0.20 per shareRepresents $40M annually Ongoing through a combination of cash dividends and share repurchasesRepresents at least $60M in FY 2018 based on FY 2017 FCF of $120M Expect to save $4M interest expense annually Return Value to ShareholdersSince becoming a public company in 2000, Cabot Microelectronics has distributed approximately $760 million to shareholders through a combination of cash dividends and share repurchases Doubled regular quarterly cash dividend to $0.40 Intention to distribute at least 50 percent of prior fiscal year free cash flow (FCF) to shareholders Completed significant repatriation of overseas cash and paid off term loan of $138M
8 Sustained, strong financial performanceRevenue of $143.0M increased by approximately $24M, or 20.0%, from last year, driven by growth across all product areasNet Income of $29.7M increased by approximately $11.5M, or 63%, from last yearBenefited from revenue growth, margin expansion and continued operating expense disciplineRevenue increased by $24M while Operating Income increased by $13M, compared with prior year This implies 54% operating leverage on the incremental revenueOur expectations are for continuing firm near-term industry demand, sustained gross margin performance, and disciplined management of operating costs Q3 expectation is for a low to mid single digit sequential increase in revenue for IC CMP consumables Closing Remarks
AppendixUpdate on Certain Expectations 9 Quarter Guidance Full Year Guidance Q3FY2018 Previous Communication Current Communication Revenue(IC CMP Consumables) Expect low to mid single digit sequential increase over Q2 Gross Profit Margin (GAAP Basis) 50%-52% 51%-53% Operating Expense (GAAP Basis) $145-$150M $148-$153M Tax Rate 21%-24%(For Q2-Q4) 21%-24%(For Q3-Q4) Capital Spending $18-$22M $18-$22M
Thank you for your interest in Cabot Microelectronics Corporation For additional information, please contact: Colleen MumfordInvestor Relations Director(630) 499-2600 10