ccmp-20200805

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported):

Cabot Microelectronics Corporation

(Exact name of registrant as specified in its charter)

Delaware

000-30205

36-4324765

(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer Identification No.)


870 North Commons Drive, Aurora, Illinois						60504
(Address of principal executive offices)						(Zip Code)


(630) 375-6631
(Registrant’s telephone number, including area code)


Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


			☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


			☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


			☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


			☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	CCMP	NASDAQ

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On August 5, 2020, Cabot Microelectronics Corporation issued a press release entitled “Cabot Microelectronics Corporation Reports Higher Revenue and Diluted EPS Compared to the Prior Year,” and made available on the Company’s website a presentation entitled “Third Quarter of Fiscal 2020 Earnings Call, August 6, 2020,” copies of which are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and incorporated herein by reference. The press release and presentation contain financial and other information including that related to the Company’s third quarter of fiscal year 2020, which ended June 30, 2020.

This information contained in the press release and presentation attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and incorporated herein by reference is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed "filed" for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d)

Exhibits

The following exhibits are being furnished, not filed, herewith pursuant to Item 2.02 of Form 8-K:

99.1

Press release, dated August 5 , 2020, entitled “Cabot Microelectronics Corporation Reports Higher Revenue and Diluted EPS Compared to the Prior Year .”

99.2

Presentation entitled “Third Quarter of Fiscal 2020 Earnings Call, August 6 , 2020.”

104

Cover Page Interactive Data File - The Cover Page Interactive Data File does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CABOT MICROELECTRONICS CORPORATION

[Registrant]

Date: August 5, 2020

By:

/s/ SCOTT D. BEAMER

Scott D. Beamer

Vice President and Chief Financial Officer

[Principal Financial Officer]

Cabot Microelectronics Corporation Reports Higher Revenue and Diluted EPS Compared to the Prior Year

•Revenue of $274.7 Million, 1.0% Higher than Last Year Primarily Due to Growth in CMP Slurries and Wood Treatment

•Diluted EPS of $1.17, 82.8% Higher than Last Year; Adjusted Diluted EPS1 of $1.80, 13.2% Higher than Last Year

•Expecting Total Revenue for the Fourth Quarter of Fiscal 2020 to be Up Low Single Digits Sequentially

•Provides Full Year Fiscal 2020 Outlook

AURORA, IL, August 5, 2020 – Cabot Microelectronics Corporation (Nasdaq: CCMP), a leading global supplier of consumable materials to semiconductor manufacturers and pipeline companies, today reported financial results for its third quarter of fiscal 2020, which ended June 30, 2020.

Total company revenue increased 1.0% over the prior year driven by stronger demand for CMP slurries and CMP pads, as well as higher wood treatment business revenue, which more than offset lower revenue in pipeline performance products, primarily due to softer industry conditions. Net income for the quarter was $34.5 million. Adjusted EBITDA was $92.0 million in the quarter, up 7.3% compared with the prior year. Year to date, the company generated $204.1 million in cash flow from operations, and had $354.7 million of cash on hand and $1,076.0 million in total debt as of June 30, 2020, which includes the $150 million drawn from the company’s revolving credit facility in the second quarter.

“We are pleased with our results this quarter, which demonstrate the continued strength and resiliency of our businesses as well as our team’s ability to execute, despite the unprecedented business environment. I am proud of and thankful for the efforts and dedication of our employees globally, who continue to maintain our essential operations and support our customers despite these challenges,” said David Li, President and CEO of Cabot Microelectronics Corporation. “Although near-term outlook remains uncertain across our end markets, we see steady demand from our semiconductor customers as well as improving conditions in our pipeline performance business in the fourth quarter. We expect to continue to drive growth and best in class profitability by leveraging our positions in the most advanced and challenging technologies as well as our deep customer relationships.”

Key Financial Information for the Third Quarter of Fiscal 2020

•Revenue was $274.7 million, 1.0% higher than the revenue reported in the same quarter last year. Revenue was down 3.3% compared to the prior quarter primarily due to softer oil and gas industry conditions that negatively impacted revenue in pipeline performance products.

•Net income was $34.5 million, 82.9% higher than last year. Adjusted net income was $53.1 million, 13.3% higher compared to adjusted net income in the prior year. Adjusted net income benefited from higher revenue, lower operating expenses, and lower interest expense in the quarter compared to last year.

•Diluted earnings per share (EPS) was $1.17, 82.8% higher than last year. Adjusted diluted EPS was $1.80, 13.2% higher than adjusted EPS in the same quarter last year.

•Adjusted EBITDA was $92.0 million, up 7.3% compared to adjusted EBITDA in the same quarter last year. Adjusted EBITDA margin for the quarter was 33.5%, compared to adjusted EBITDA margin of 31.5% in the same quarter last year.

Electronic Materials – Revenue was $220.4 million for the quarter, 3.9% higher than revenue in the same quarter last year. Higher revenue for CMP slurries and CMP pads offset slightly lower revenue for electronic chemicals. Adjusted EBITDA was $76.9 million, or 34.9% of revenue.

Performance Materials – Revenue was $54.4 million for the quarter, 9.0% lower than revenue in the same quarter last year. The decrease was driven by lower demand for pipeline performance products, which more than offset higher revenue in the wood treatment and QED businesses. Adjusted EBITDA was $27.0 million, or 49.6% of revenue.

Guidance for the Fourth Quarter and Full Year of Fiscal 2020

With continued uncertainty as to the ongoing macroeconomic and industry impact of the COVID-19 pandemic, the company currently expects fiscal fourth quarter revenue to be up low single digits compared to the company’s revenue in the third quarter of fiscal 2020. Sequentially, Electronic Materials revenue is expected to be approximately flat to up low single digits and Performance Materials revenue is expected to be up low to mid single digits.

The company currently expects full fiscal year 2020 adjusted EBITDA to be between $357 million and $362 million.

Additional current expectations are provided on slide 8 in the related slide presentation.

[1] Refer to financial tables and “Use of Certain GAAP, non-GAAP Adjusted Financial Information” in the press release below for information about these non-GAAP financial measures and reconciliations of these non-GAAP measures to their most comparable GAAP measure.

RELATED SLIDE PRESENTATION

A slide presentation related to this press release will be available at ir.cabotcmp.com in the Quarterly Results section of the Investor Relations center at approximately the same time that this press release is issued.

Cabot Microelectronics Corporation’s quarterly earnings conference call will be held at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on Thursday, August 6. The conference call will be available via live webcast and replay from the company’s website, www.cabotcmp.com, or by phone at (833) 714-0937. Callers outside the U.S. may dial (778) 560-2685. The conference code for the call is 1775053. 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 a leading global supplier of consumable materials to semiconductor manufacturers and pipeline companies. The company’s products play a critical role in the production of advanced semiconductor devices, helping to enable the manufacture of smaller, faster and more complex devices by its customers. Cabot Microelectronics Corporation is also a leading provider of performance materials to pipeline operators. The company's mission is to create value by delivering high-performing and innovative solutions that solve its customers’ challenges. The company has approximately 2,000 employees globally. For more information about Cabot Microelectronics Corporation, visit www.cabotcmp.com, or contact Colleen Mumford, Vice President, Communications and Marketing, at 630-499-2600.

USE OF CERTAIN GAAP AND NON-GAAP ADJUSTED FINANCIAL INFORMATION

The company presented the following measures considered as non-GAAP by the SEC: adjusted net income, adjusted diluted earnings per share, adjusted EBITDA, adjusted EBITDA margin, free cash flow, and net debt. Adjusted EBITDA margin is defined as adjusted EBITDA as a percentage of revenue. Adjusted EBITDA is defined as earnings before interest, income taxes, depreciation and amortization, adjusted for certain items that affect comparability from period to period. These adjustments include items related to the company’s acquisition of KMG Chemicals, Inc. (“KMG”) (“Acquisition”), such as expenses incurred to complete the Acquisition and related integration, costs of restructuring related to the wood treatment business and related adjustments in 2020, costs related to the KMG-Bernuth warehouse fire net of insurance recovery, costs incurred in 2020 related to the Pandemic net of grants received and, in 2019, impact of fair value adjustments to inventory acquired from KMG. The non-GAAP adjusted 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 impact of the adjustments related to the Acquisition, such as expenses incurred to complete the Acquisition and related integration, acquisition-related amortization expenses, costs of restructuring related to the wood treatment business and related adjustments in 2020, costs related to the KMG-Bernuth warehouse fire net of insurance recovery, costs incurred in 2020 related to the Pandemic net of grants received, the effects of Tax Cuts and Jobs Act in December 2017 in the United States (“Tax Act”) and the issued final regulations related to the Tax Act, and in 2019, impact of fair value adjustments to inventory acquired from KMG are not indicative of its core operating results and thus presents these certain metrics excluding these effects. The presentation of non-GAAP adjusted 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. Reconciliations of non-GAAP measures to their most comparable GAAP measures are included in the financial statements portion of this press release.

Adjusted EBITDA for the Electronic Materials and Performance Materials segments is presented in conformity with Accounting Standards Codification Topic 280, Segment Reporting. This measure is reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance. For these reasons, this measure is excluded from the definition of non-GAAP financial measures under the SEC Regulation G and Item 10(e) of Regulation S-K.

FORWARD LOOKING STATEMENTS

This press release contains forward-looking statements, which address a variety of subjects including, for example, future sales and operating results; growth or contraction, and trends in the industries and markets in which the company participates such as the semiconductor, and oil and gas, industries; the acquisition of, investment in, or collaboration with other entities, including the company’s acquisition of KMG, and the expected benefits and synergies of such acquisitions; divestment or disposition, or cessation of investment in certain, of the company’s businesses; new product introductions; development of new products, technologies and markets; product performance; the financial conditions of the company's customers; the competitive landscape that relates to the company’s business; the company's supply chain; natural disasters; various economic or political factors and international or national events, including related to global public health crises such as the COVID-19 pandemic, and the enactment of trade sanctions, tariffs, or other similar matters; the generation, protection and acquisition of intellectual property, and litigation related to such intellectual property or third party intellectual property; environmental, health and safety laws and regulations, and related compliance; the operation of facilities by Cabot Microelectronics; the company's management; foreign exchange fluctuation; the company's current or future tax rate, including the effects of the Tax Cuts and Jobs Act in the United States (“Tax Act”); cybersecurity threats; financing facilities and related debt, pay off or payment of principal and interest, and compliance with covenants and other terms; and, uses and investment of the company's cash balance, including dividends and share repurchases, which may be suspended, terminated or modified at any time for any reason by the company, based on a variety of factors. Statements that are not historical facts, including statements about Cabot Microelectronics’ beliefs, plans and expectations, are forward-looking statements. Such statements are based on current expectations of Cabot Microelectronics’ management and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. For information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to Cabot Microelectronics’ filings with the Securities and Exchange Commission (“SEC”), including the risk factors contained in Cabot Microelectronics’ Annual Report on Form 10-K for the fiscal year ended September 30, 2019 and its Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 to be filed by August 10, 2020. Except as required by law, Cabot Microelectronics undertakes no obligation to update forward-looking statements made by it to reflect new information, subsequent events or circumstances.

Vice President, Communications and Marketing

Cabot Microelectronics Corporation

CABOT MICROELECTRONICS CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited and amounts in thousands, except per share amounts)


	Quarter Ended										Nine Months Ended
	June 30, 2020		March 31, 2020		June 30, 2019		June 30, 2020		June 30, 2019
Revenue	$	274,727	$	284,193	$	271,882	$	842,063	$	759,051
Cost of sales	152,973		163,091		156,492		470,525		429,508
Gross profit	121,754		121,102		115,390		371,538		329,543

Operating expenses:

Research, development and technical	12,165		13,230		12,191		38,206		39,009
Selling, general and administrative	51,847		56,209		50,959		162,495		162,415

Total operating expenses	64,012		69,439		63,150		200,701		201,424

Operating income	57,742		51,663		52,240		170,837		128,119
Interest expense	10,406		10,753		12,757		33,079		32,978
Interest income	131		143		417		589		2,004
Other income (expense), net	(201)		(1,010)		(472)		(1,608)		(2,897)

Income before income taxes	47,266		40,043		39,428		136,739		94,248
Provision for income taxes	12,741		7,144		20,550		30,766		34,790
Net income	$	34,525	$	32,899	$	18,878	$	105,973	$	59,458

Basic earnings per share	$	1.19	$	1.12	$	0.65	$	3.63	$	2.09

Diluted earnings per share	$	1.17	$	1.11	$	0.64	$	3.58	$	2.06

Weighted average basic shares outstanding	29,079		29,287		29,064		29,157		28,399

Weighted average diluted shares outstanding	29,456		29,725		29,568		29,603		28,924

CABOT MICROELECTRONICS CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited and amounts in thousands)


	June 30, 2020		September 30, 2019
ASSETS:

Current assets:
Cash and cash equivalents	$	354,708	$	188,495
Accounts receivable, net	137,736		146,113
Inventories	161,805		145,278
Prepaid expenses and other current assets	24,623		28,670
Total current assets	678,872		508,556

Property, plant and equipment, net	356,022		276,818
Other long-term assets	1,450,479		1,476,392
Total assets	$	2,485,373	$	2,261,766

LIABILITIES AND STOCKHOLDERS' EQUITY:

Current liabilities:
Accounts payable	$	50,211	$	54,529
Short-term debt	150,000		—
Current portion of long-term debt	13,313		13,313
Accrued expenses, income taxes payable and other current liabilities	126,399		103,618
Total current liabilities	339,923		171,460

Long-term debt, net of current portion	912,691		928,463
Other long-term liabilities	207,725		181,466
Total liabilities	1,460,339		1,281,389

Stockholders' equity	1,025,034		980,377
Total liabilities and stockholders' equity	$	2,485,373	$	2,261,766

CABOT MICROELECTRONICS CORPORATION

Unaudited Reconciliation of Certain GAAP Financial Measures to Certain Non-GAAP Financial Measures

(Unaudited and amounts in thousands, except per share and percentage amounts)


Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income
	Three Months Ended
	June 30, 2020		June 30, 2019
GAAP Net income	$	34,525	$	18,878

Amortization of acquisition related intangibles	20,786		16,923
Acquisition and integration-related expenses	2,735		2,910
Costs related to KMG-Bernuth warehouse fire, net of insurance recovery	622		4,450
Net costs related to restructuring of wood treatment business¹	(293)		—
Costs related to COVID -19 (Pandemic), net of grants received	112		—
Charges for fair value write-up of acquired inventory sold	—		42
U.S. tax reform	18		9,128
Tax effect on adjustments to net income²	(5,356)		(5,431)
Adjusted Net income	$	53,149	$	46,900

¹ Represents adjustments to previously recorded severance liability related to the wood treatment business.
²Tax effect on the adjustments was calculated using the U.S. Federal and state blended tax rate for the respective periods as the related adjustments are mainly U.S. driven.


Reconciliation of GAAP Diluted Earnings Per Share to Non-GAAP Adjusted Diluted Earnings Per Share
	Three Months Ended
	June 30, 2020		June 30, 2019
GAAP Diluted earnings per share	$	1.17	$	0.64
Adjustments (net of tax)³ :
Amortization of acquisition related intangibles	0.55		0.44
Acquisition and integration-related expenses	0.07		0.08
Costs related to KMG-Bernuth warehouse fire, net of insurance recovery	0.02		0.12
Net costs related to restructuring of wood treatment business¹	(0.01)		—
U. S tax reform	—		0.31
Adjusted Diluted earnings per share	$	1.80	$	1.59

³ Tax effect on the adjustments was calculated using the U.S. Federal and state blended tax rate for the respective periods as the related adjustments are mainly U.S. driven.


Reconciliation of GAAP Revenue to Non-GAAP Adjusted Gross Profit and Gross Margin
	Three Months Ended
	June 30, 2020						June 30, 2019
GAAP revenue	$	274,727			$	271,882
Cost of sales	152,973				156,492
Gross profit and gross margin	$	121,754	44.3	%	$	115,390	42.4	%
Adjustments:
Amortization of acquisition related intangibles	3,347				3,469
Costs related to KMG-Bernuth warehouse fire, net of insurance recovery	622				4,200
Net costs related to restructuring of wood treatment business¹	(293)				—
Costs related to the Pandemic, net of grants received	198				—
Charges for fair value write-up of acquired inventory sold	—				42
Adjusted gross profit and gross margin	$	125,628	45.7	%	$	123,101	45.3	%



Reconciliation of GAAP Operating expenses to Non-GAAP Adjusted Operating expenses
	Three Months Ended
	June 30, 2020		June 30, 2019

GAAP Research, development and technical	$	12,165	$	12,191
GAAP Selling, general, and administrative	51,847		50,959
Operating expenses	$	64,012	$	63,150
Adjustments⁴ :
Amortization of acquisition related intangibles	(17,439)		(13,454)
Acquisition and integration-related expenses	(2,735)		(2,910)
Costs related to KMG-Bernuth warehouse fire, net of insurance recovery	—		(250)
Costs related to the Pandemic, net of grants received	86		—
Adjusted operating expenses	$	43,924	$	46,536

⁴All the adjustments are related to the Selling, general and administrative expenses.


Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA and EBITDA Margin

	Three Months Ended
	June 30, 2020						June 30, 2019
GAAP net income	$	34,525			$	18,878
Interest expense	10,406				12,757
Interest income	(131)				(417)
Provision for income taxes	12,741				20,550
Depreciation & amortization	31,324				26,587
EBITDA and EBITDA margin⁵	$	88,865	32.3	%	$	78,355	28.8	%
Adjustments (pre-tax):
Acquisition and integration-related expenses	2,735				2,910
Costs related to KMG-Bernuth warehouse fire, net of insurance recovery	622				4,450
Net costs related to restructuring of wood treatment business¹	(293)				—
Costs related to the Pandemic, net of grants received	112				—
Charges for fair value write-up of acquired inventory sold	—				42
Adjusted EBITDA and EBITDA margin⁶	$	92,041	33.5	%	$	85,757	31.5	%

⁵ EBITDA represents earnings before interest, taxes, depreciation and amortization.

⁶ Adjusted EBITDA is calculated by excluding items from EBITDA that are believed to be infrequent or not indicative of the company's continuing operating performance.


Fiscal Year 2020 Guidance Reconciliation ⁷

	Fiscal Year 2020		Fiscal Year 2020
	Low		High
Net income	$	134,000	$	138,100
Interest expense, net⁸	43,500		43,500
Provision for income taxes⁸	38,000		38,900
Depreciation⁸	42,500		42,500
Amortization	90,000		90,000
EBITDA (Consolidated)	$	348,000	$	353,000
Acquisition and integration-related expenses	7,800		7,800
Costs related to KMG-Bernuth warehouse fire, net of insurance recovery	1,200		1,200
Net costs related to restructuring of wood treatment business¹	(300)		(300)
Costs related to the Pandemic, net of grants received	300		300
Adjusted EBITDA Guidance (Consolidated)	$	357,000	$	362,000

⁷ This is a reconciliation of our indicated full year net income to our adjusted EBITDA. The amounts above may not reflect certain future charges costs and/or gains that are inherently difficult to predict and estimate due to their unknown timing, effect and/or significance, including impairment charges associated with the anticipated closure of our wood treatment business.
⁸ Amounts represent the mid-point of the current financial guidance provided on August 5, 2020.


Reconciliation of Cash Flow From Operations to Free Cash Flow

	Nine months ended
	June 30, 2020		June 30, 2019
Net cash provided by operating activities	$	204,083	$	117,045
Less: Capital expenditures	107,015		32,691
Free cash flow	$	97,068	$	84,354

Net cash used in investing activities	$	(105,428)	$	(1,209,708)

Net cash provided by financing activities	$	67,201	$	908,678


Reconciliation of GAAP Debt to Net Debt

	June 30, 2020		September 30, 2019
Total short-term and long-term debt	$	1,076,004	$	941,776
Less: Cash and cash equivalents	354,708		188,495
Total net debt	$	721,296	$	753,281

Safe Harbor Statement 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. 2 ©2020 Cabot Microelectronics Corporation

Third Quarter Highlights › To date, no significant impact on operations from COVID-19 pandemic • All global manufacturing facilities continue to operate, and we have met all customer orders • The health and well-being of our employees continues to be our highest priority › Revenue of $275M, up 1% versus prior year • Electronic Materials revenue increased 4% due to growth in CMP slurries and CMP pads as a result of solid demand from foundry and logic customers • Performance Materials revenue decreased 9% due to lower revenue in pipeline performance products given softer oil and gas industry conditions, which more than offset higher revenue in wood treatment › Revenue was down 3% sequentially • Slightly higher revenue in Electronic Materials due to growth in CMP pads • Performance Materials revenue was lower due to softer demand conditions in pipeline performance products › Net income was $34.5M, or $1.17 per diluted share, 83% higher than last year; adjusted net income1 was $53.1M, or $1.80 per diluted share, 13% higher than last year › Adjusted EBITDA1 of $92M, up 7% versus prior year, and represents 33.5% of revenue Data reflects rounded values 1Refer to the company’s third quarter fiscal 2020 press release for information about these non-GAAP financial measures and reconciliations of these non-GAAP measures to their most comparable GAAP measure 3 ©2020 Cabot Microelectronics Corporation

Financial Details Reported Adjusted Results1 Comments on Adjusted Results 2020 Q3 2019 Q3 2020 Q3 2019 Q3 Higher revenue in Electronic Materials more Revenue $274.7M $271.9M $274.7M $271.9M than offset lower revenue in Performance Materials (+) Increase in CMP slurries revenue Gross Margin 44.3% 42.4% 45.7% 45.3% (+) Higher selling prices in wood treatment (-) Lower volumes in pipeline performance Net Income $34.5M $18.9M $53.1M $46.9M (+) Lower selling, general and administrative expenses (+) Lower interest expense Diluted EPS $1.17 $0.64 $1.80 $1.59 EBITDA1 $88.9M $78.4M $92.0M $85.8M EBITDA Margin1 32.3% 28.8% 33.5% 31.5% Data reflects rounded values 1Refer to the Company’s third quarter fiscal 2020 press release for information about these non-GAAP financial measures and reconciliations of these non-GAAP measures to their most comparable GAAP measure 4 ©2020 Cabot Microelectronics Corporation

Segment and Business Revenue 2020 Q3 2019 Q3 Total Revenue $275M $272M Electronic Materials $220M $212M CMP slurries $118M $109M CMP pads $24M $23M Electronic chemicals $79M $80M Performance Materials $54M $60M Quarter Highlights: • CMP slurries benefited from solid demand from foundry and logic customers, which drove strong growth in tungsten and dielectrics slurries • CMP pads revenue benefited from improved demand and increases in customer inventory • Electronic chemicals revenue was driven by leading technologies, but offset by lower demand from legacy applications • Performance Materials revenue was negatively impacted by oil and gas industry softness and lower demand for pipeline performance products, partially offset by revenue growth in wood treatment Data reflects rounded values 5 ©2020 Cabot Microelectronics Corporation

Segment Financial Details 2020 Q3 2019 Q3 Electronic Materials Revenue $220M $212M Adjusted EBITDA1,2 $77M $71M Adjusted EBITDA Margin1,2 35% 33% Performance Materials Revenue $54M $60M Adjusted EBITDA1,2 $27M $27M Adjusted EBITDA Margin1,2 50% 46% Year over year comparisons impacted by updated methodology for assigning corporate allocations as more of the corporate costs moved directly into the segments in fiscal 2020 to better reflect the true costs within the businesses. Data reflects rounded values 1Adjusted EBITDA for the Electronic Materials and Performance Materials segments is presented in conformity with Accounting Standards Codification Topic 280, Segment Reporting. This measure is reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance. For these reasons, this measure is excluded from the definition of non-GAAP financial measures under the SEC’s Regulation G and Item 10(e) of Regulation S-K 2 Refer to the company’s third quarter fiscal 2020 press release for information about these non-GAAP financial measures and reconciliations of these non-GAAP measures to their most comparable GAAP measure 6 ©2020 Cabot Microelectronics Corporation

Balance Sheet and Cash Flow as of June 30, 2020 Total Liquidity $450 › Strong cash position and liquidity $400 • Cash balance $355M $350 • $50M available on revolving credit facility $300 • Total liquidity $405M $250 › YTD operating cash flow $204M $200 $ millions › YTD uses of cash $150 • Capital expenditures $107M $100 • Dividends $38M • Debt prepayment $18M $50 • Share repurchases $38M $0 1,3 Q3 FY18 Q3 FY19 Q3 FY20 › YTD free cash flow $97M Cash and cash equivalents KMG acquisition Available revolving credit facility › Total debt of $1,076M • Net Debt2,3 $721M After Q3 FY18, $120M of cash was used for KMG acquisition • 2.0x Net Debt/EBITDA Data reflects rounded values 1Free cash flow is a non-GAAP measure and is calculated as GAAP operating cash flow less capital expenditures 2Nebt debt is a non-GAAP measure and is calculated as our balance outstanding under our Revolving Credit Facility plus current and long-term debt, less cash and cash equivalents. 3 Refer to the company’s third quarter fiscal 2020 press release for information about these non-GAAP financial measures and the Appendix to this presentation for reconciliations of these non-GAAP measures to their most comparable GAAP measure 7 ©2020 Cabot Microelectronics Corporation

Current Financial Guidance 2020 Q4 FY2020 Approximately flat to up low Electronic Materials Revenue single digits1 Segment Performance Materials Revenue Up low to mid single digits1 Revenue Up low single digits1 Adjusted EBITDA2 $357M-$362M Depreciation and Amortization3 $40M-$45M Total Company Interest Expense $10M-$11M $43M-$44M Tax Rate4 21%-23% Capital Expenditures ~$130M *Data reflects rounded values **Guidance is based on company’s current estimations, and the ongoing volatile nature of COVID-19 and its impact on the economy and industries in which the company participates, as well as uncertainty in the oil and gas sector, could cause different outcomes 1Based on sequential changes compared to third quarter of fiscal 2020 2Refer to the Appendix of this presentation for a reconciliation of this non-GAAP guidance to the most comparable GAAP measure 3Excludes approximately $90 million in amortization of intangibles related to acquisitions tax impact from acquisition-related expenses 4Excludes tax impact from acquisition-related expenses 8 ©2020 Cabot Microelectronics Corporation

Reconciliation of Selected GAAP Financial Data to Adjusted Financial Data Three Months Ended June 30, 2020 June 30, 2019 (in thousands, except percentage and per share data) Reported gross profit $121,754 $115,390 Reported gross margin 44.3% 42.4% Adjustments(1) 3,874 7,711 Adjusted gross profit $125,628 $123,101 Adjusted gross margin 45.7% 45.3% Operating expenses $64,012 $63,150 Adjustments(1) ($20,008) ($16,614) Adjusted operating expenses $43,924 $46,536 Reported net income $34,525 $18,878 Adjustments(1) 18,624 28,022 Adjusted net income $53,149 $46,900 Reported diluted earnings per share $1.17 $0.64 Adjustments(1) 0.63 0.95 Adjusted diluted earnings per share $1.80 $1.59 EBITDA $88,865 $78,355 Adjustments(1) 3,176 7,402 Adjusted EBITDA $92,041 $85,757 1Primarily reflects the elimination of certain items that affect comparability from period to period, specifically related to the KMG Acquisition, such as expenses incurred to complete the Acquisition and related integration, acquisition-related amortization expenses, costs related to the KMG-Bernuth warehouse fire net of insurance recovery, the effects of 2017 Tax Cuts and Jobs Act, costs of restructuring related to the wood treatment business and related adjustments in 2020, costs incurred in 2020 related to the Pandemic net of grants received, and in 2019, the impact of fair value adjustments to inventory acquired 10 ©2020 Cabot Microelectronics Corporation

Reconciliations of Cash Flow From Operations to Free Cash Flow and GAAP Debt to Net Debt Nine months ending (in thousands) June 30, 2020 June 30, 2019 Net cash provided by operating activities $204,083 $117,045 Less: Capital expenditures 107,015 32,691 Free cash flow $97,068 $84,354 Net cash used in investing activities ($105,428) ($1,209,708) Net cash provided by financing activities $67,201 $908,678 (in thousands) June 30, 2020 June 30, 2019 Total short-term and long-term debt $1,076,004 $941,776 Less: Cash and cash equivalents 354,708 188,495 Total net debt $721,296 $753,281 11 ©2020 Cabot Microelectronics Corporation

Reconciliation of Fiscal Year 2020 Adjusted EBITDA Guidance Fiscal Year 2020 Fiscal Year 2020 (in thousands) Low End High End Net Income $134,000 $138,100 Interest expense, net1 43,500 43,500 Provision for income taxes1 38,000 38,900 Depreciation1 42,500 42,500 Amortization1 90,000 90,000 EBITDA (Consolidated) $348,000 $353,000 Acquisition and integration-related expenses 7,800 7,800 Costs related to KMG-Bernuth warehouse fire, net of insurance recovery 1,200 1,200 Net costs related to restructuring of wood treatment business (300) (300) Costs related to the Pandemic, net of grants received 300 300 Adjusted EBITDA Guidance (Consolidated) $357,000 $362,000 Above is a reconciliation of our indicated full year net income to our adjusted EBITDA. The amounts above may not reflect certain future charges costs and/or gains that are inherently difficult to predict and estimate due to their unknown timing, effect and/or significance, including impairment charges associated with the anticipated closure of our wood treatment business. 1Amounts represent the mid-point of the current financial guidance provided on slide 8 of this presentation 12 ©2020 Cabot Microelectronics Corporation

Cover	Aug. 05, 2020
Cover [Abstract]
Document Type	8-K
Document Period End Date	Aug. 05, 2020
Entity Registrant Name	Cabot Microelectronics Corporation
Entity Incorporation, State or Country Code	DE
Entity File Number	000-30205
Entity Tax Identification Number	36-4324765
Entity Central Index Key	0001102934
Amendment Flag	false
Entity Address, Address Line One	870 North Commons Drive
Entity Address, City or Town	Aurora
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60504
City Area Code	630
Local Phone Number	375-6631
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	CCMP
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false