Cabot Microelectronics Corporation Reports Results for Fourth Quarter and Full Fiscal...

Cabot Microelectronics Corporation Reports Results for Fourth Quarter and Full Fiscal Year 2008

AURORA, Ill.--(Business Wire)--
Cabot Microelectronics Corporation (Nasdaq: CCMP):

-- Annual Revenue Growth of 11 Percent

-- Annual EPS Growth of 15 Percent

-- Annual Cash Flow from Operations of $71 million

Cabot Microelectronics Corporation (Nasdaq: CCMP), the world's
leading supplier of chemical mechanical planarization (CMP) polishing
slurries to the semiconductor industry, today reported financial
results for its fourth quarter and full fiscal year 2008, which ended
September 30.

Total revenue during the fourth fiscal quarter was $90.2 million,
net income was $8.2 million, and diluted earnings per share were
$0.36. For the full year, total revenue was $375.1 million, net income
was $38.3 million, and diluted earnings per share were $1.64. Cash
flow from operations for full fiscal 2008 was $70.8 million. Cash and
short term investments totaled $226.4 million as of September 30, 2008
and the company has no outstanding borrowings.

"We are pleased with the solid performance we achieved across the
company in fiscal 2008, particularly with our growing pads business
and the progress we made in each of our CMP slurry applications," said
William Noglows, Chairman and CEO of Cabot Microelectronics. "We
believe this year's growth, amid an uncertain economic environment, is
a tribute to our employees' continued diligent focus and successful
execution of our key initiatives of Technology Leadership, Operations
Excellence, and Connecting with Customers."

"We aim to continue the break-out momentum we achieved in fiscal
2008 in our pads business, which generated over $15 million in revenue
this year," continued Mr. Noglows. "We remain encouraged by the
continued strong customer pull for our pads and the progress we made
toward optimizing our pad manufacturing processes."

Key Financial Information

Fourth fiscal quarter total revenue of $90.2 million was
essentially equal to the same quarter last year and represents a 7.1
percent decrease from the $97.0 million reported last quarter. During
the quarter, the company began to experience some softening in orders
as key customers appeared to lower production in response to reduced
end-use demand. Revenue decreased sequentially for all business areas
except sales of polishing pads, which increased 21.0 percent from last
quarter.

Total revenue for the full fiscal year was $375.1 million, which
represents a 10.9 percent increase from the previous fiscal year. This
increase was driven by higher demand for the company's core CMP
consumables products for semiconductor applications, which included a
nearly $15 million increase in sales of polishing pads. Revenue for
the company's data storage and engineered surface finishes (ESF)
businesses declined from last year.

Gross profit, expressed as a percentage of revenue, was 46.6
percent this quarter, which was down from 49.1 percent in the same
quarter a year ago and 46.8 percent last quarter. Compared to the year
ago quarter, gross profit percentage decreased due to the effect of
foreign exchange rate changes, increased logistics costs associated
with higher energy prices, and higher fixed costs related to the
company's pads business; these effects were partially offset by a
higher valued product mix. Compared to the previous quarter, the
slight gross profit percentage decrease was primarily due to a lower
valued product mix and increased logistics costs, partially offset by
lower manufacturing costs.

Gross profit for the full fiscal year was 46.5 percent of revenue,
which is consistent with the company's full fiscal year guidance range
of 46 to 48 percent of revenue. Gross profit decreased from 47.3
percent of revenue reported in fiscal 2007 primarily due to higher
fixed manufacturing costs and lower manufacturing yields, both related
to the company's new pads business, as well as the effect of foreign
exchange rate changes. These effects were partially offset by a higher
valued product mix. Excluding the impact on the company's gross profit
associated with its emerging polishing pads business, gross profit
percentage would have been slightly higher in fiscal 2008 than in
fiscal 2007.

Operating expenses, which include research, development and
technical, selling and marketing, and general and administrative
expenses, were $31.7 million in the fourth fiscal quarter, which was
in line with the company's expectations. Operating expenses were $1.4
million higher than the $30.3 million reported in the same quarter a
year ago, driven primarily by increased expenses for clean room
materials and higher professional fees, including fees related to
intellectual property enforcement. Operating expenses were $0.8
million lower than the $32.5 million reported in the previous quarter,
mostly due to lower travel expenses and professional fees.

For the full year, operating expenses were $125.0 million, which
represents a 9.5 percent increase from the $114.2 million reported in
fiscal 2007. Nearly half of this increase was driven by higher costs
to enforce the company's intellectual property. In addition, the
company incurred higher staffing related costs and travel expenses,
which were partially offset by lower costs for materials used in its
clean room activities.

Net income for the quarter was $8.2 million, down from $10.2
million in the same quarter last year, primarily due to higher
manufacturing costs associated with the pads business and higher
operating expenses related to intellectual property enforcement. Net
income was down from $10.0 million in the previous quarter, mainly due
to lower revenue. Net income for the full fiscal year was $38.3
million, up 13.3 percent from $33.8 million in fiscal 2007.

Diluted earnings per share were $0.36 this quarter, down from
$0.43 reported in both the fourth quarter of 2007 and the third
quarter of fiscal 2008. Earnings per share for full fiscal year 2008
of $1.64 were up 15.3 percent from $1.42 in the previous fiscal year.

Mr. Noglows commented further, "Given the worldwide financial
situation and its expected impact on consumer and business spending,
it appears that fiscal 2009 will bring a challenging economic and
industry environment. However, we believe our significant CMP
infrastructure and scale, combined with our low capital intensity and
solid balance sheet, make us a strong player in the CMP consumables
industry, and well positioned for continued success through industry
cycles. In fiscal 2009, we plan to continue to execute our strategy,
invest in the growth areas of our business, and actively manage costs,
while capitalizing on the unique opportunities that may arise in a
soft industry environment to enhance our competitive position."

CONFERENCE CALL

Cabot Microelectronics Corporation's quarterly earnings conference
call will be held today at 9:00 a.m. Central Time. The live conference
call will be available via webcast from the company's website,
www.cabotcmp.com, or by phone at (866) 362-4666. Callers outside the
U.S. can dial (617) 597-5313. The conference code for the call is
95391804. A replay will be available through November 20, 2008 via
webcast at www.cabotcmp.com. 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.

ABOUT CABOT MICROELECTRONICS CORPORATION

Cabot Microelectronics Corporation, headquartered in Aurora,
Illinois, is the world's leading supplier of CMP slurries used in
semiconductor and data storage manufacturing. The company's CMP slurry
and pad 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. Since becoming an
independent public company in 2000, the company has grown to
approximately 800 employees on a global basis. The company is also
leveraging its expertise in CMP slurry formulation, materials and
polishing techniques developed for the semiconductor industry and
applying it to demanding surface modification applications where
shaping, enabling and enhancing the performance of surfaces is
critical to success. For more information about Cabot Microelectronics
Corporation, visit www.cabotcmp.com or contact Amy Ford, 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 or trends; growth of the markets in which the company
participates; international events or various macroeconomic factors;
product performance; the generation, protection and acquisition of
intellectual property, and litigation related to such intellectual
property; new product introductions; development of new products,
technologies and markets; the acquisition of or investment in other
entities; uses and investment of the company's cash balance; and the
construction of facilities by Cabot Microelectronics Corporation.
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 "Risk Factors" in the company's quarterly report on
Form 10-Q for the quarter ended June 30, 2008 and in the company's
annual report on Form 10-K for the fiscal year ended September 30,
2007, both filed with the SEC. Cabot Microelectronics assumes no
obligation to update this forward-looking information.

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CABOT MICROELECTRONICS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited and amounts in thousands, except per share amounts)

Quarter Ended Twelve Months Ended
--------------------------- -------------------
September June September September September
30, 30, 30, 30, 30,
2008 2008 2007 2008 2007
--------- ------- --------- --------- ---------

Revenue $90,156 $97,047 $90,379 $375,069 $338,205

Cost of goods sold 48,141 51,638 45,983 200,596 178,224
--------- ------- --------- --------- ---------

Gross
profit 42,015 45,409 44,396 174,473 159,981

Operating expenses:

Research,
development &
technical 12,572 12,730 12,209 49,155 49,970

Selling &
marketing 7,914 7,176 6,518 28,281 24,310

General &
administrative 11,258 12,642 11,584 47,595 39,933
--------- ------- --------- --------- ---------

Total
operating
expenses 31,744 32,548 30,311 125,031 114,213
--------- ------- --------- --------- ---------

Operating income 10,271 12,861 14,085 49,442 45,768

Other income, net 885 1,239 1,320 5,448 3,606
--------- ------- --------- --------- ---------

Income before income
taxes 11,156 14,100 15,405 54,890 49,374

Provision for income
taxes 2,939 4,120 5,246 16,552 15,538
--------- ------- --------- --------- ---------

Net income $8,217 $9,980 $10,159 $38,338 $33,836
========= ======= ========= ========= =========

Basic earnings per
share $0.36 $0.43 $0.43 $1.64 $1.42
========= ======= ========= ========= =========

Weighted average
basic shares
outstanding 23,023 23,132 23,783 23,315 23,748
========= ======= ========= ========= =========

Diluted earnings per
share $0.36 $0.43 $0.43 $1.64 $1.42
========= ======= ========= ========= =========

Weighted average
diluted shares
outstanding 23,085 23,163 23,847 23,348 23,754
========= ======= ========= ========= =========

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CABOT MICROELECTRONICS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited and amounts in thousands)

September 30, September 30,
2008 2007
------------- -------------
ASSETS:

Current assets:
Cash, cash equivalents and short-term
investments $226,417 $212,472
Accounts receivable, net 41,630 52,302
Inventories, net 47,466 37,266
Other current assets 15,079 8,714
------------- -------------
Total current assets 330,592 310,754

Property, plant and equipment, net 115,843 118,454
Other long-term assets 31,002 25,921
------------- -------------
Total assets $477,437 $455,129
============= =============

LIABILITIES AND STOCKHOLDERS' EQUITY:

Current liabilities:
Accounts payable $13,885 $15,859
Capital lease obligations 1,129 1,066
Accrued expenses, income taxes payable
and other current liabilities 22,787 19,638
------------- -------------
Total current liabilities 37,801 36,563

Capital lease obligations 2,518 3,608
Other long-term liabilities 2,885 1,754
------------- -------------
Total liabilities 43,204 41,925

Stockholders' equity 434,233 413,204
------------- -------------
Total liabilities and
stockholders' equity $477,437 $455,129
============= =============
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Cabot Microelectronics Corporation
Amy Ford, Director of Investor Relations
(630) 499-2600

Copyright Business Wire 2008