CMC Materials, Inc. (Nasdaq: CCMP), a global supplier of consumable materials primarily to semiconductor manufacturers, today reported financial results for its second quarter of fiscal 2021, which ended March 31, 2021.
“We are pleased to announce another quarter of record revenue driven by our continued technology leadership and execution, particularly in our Electronic Materials segment. We have completed the acquisition of International Test Solutions which we believe is a great addition to our Electronic Materials portfolio that expands our growth opportunities in critical consumables and services used in the semiconductor packaging and test areas,” said David Li, President and CEO of CMC Materials. “Looking ahead to our third fiscal quarter, we expect to again deliver sequential growth above this record quarter, across both segments.”
Key Highlights for the Second Quarter
The company’s revenue of $290.5 million, an increase of 2.2% compared to the same quarter last year, and another quarter of record revenue, was driven by continued robust demand in the company’s Electronic Materials segment, which represents more than 80% of the company’s revenue. In the company’s Performance Materials segment, pipeline and industrial materials (PIM) products showed continued stability sequentially, yet continues to be adversely impacted by the COVID-19 Pandemic (“Pandemic”). The ongoing impact of the Pandemic on the PIM business has resulted in the company recording a non-cash, pre-tax goodwill impairment charge of $201.5 million. In addition, the company recorded a $6.7 million charge for the wood treatment business related to the previously announced strategic decision to exit this business by approximately the end of calendar year 2021. These charges resulted in a quarterly net loss of $149.8 million compared to net income of $32.9 million in the prior year. Adjusted EBITDA1 was $84.8 million, compared to $85.9 million in the prior year. Year to date, the company generated $123.5 million in cash flow from operations, and $298.5 million in the last twelve months.
Key Financial Information for the Second Quarter
- Revenue was $290.5 million, 2.2% higher than the same quarter last year. Revenue was up 0.9% sequentially primarily due to higher revenue in CMP slurries and CMP pads.
- Net loss was $149.8 million compared to net income of $32.9 million last year. Adjusted net income1 was $50.7 million, 2.7% lower compared to the prior year, as higher revenue and lower interest expense was offset by higher costs.
- Loss per diluted share was $5.13. Adjusted diluted EPS1 was $1.71, 2.3% lower compared to the same quarter last year.
- Adjusted EBITDA1 was $84.8 million, down 1.3% compared to last year. Adjusted EBITDA margin1 for the quarter was 29.2%, compared to adjusted EBITDA margin of 30.2% in the same quarter last year.
1 Refer to financial tables and “Use of Certain GAAP, non-GAAP Adjusted Financial Information” below for information about these non-GAAP financial measures and reconciliations of these non-GAAP measures to their most comparable GAAP measure.
Electronic Materials – Revenue was $242.5 million for the quarter, 10.8% higher than revenue in the same quarter last year due to continued strength across all business units. Revenue was 2.4% higher sequentially. Adjusted EBITDA was $81.3 million, or 33.5% of revenue.
Performance Materials – Revenue was $48.0 million for the quarter, 26.5% lower than revenue in the same quarter last year, driven primarily by the impact of the pandemic on demand for PIM products. Revenue was 6.0% lower sequentially, mainly due to timing of sales in the QED and wood treatment businesses, while PIM demand remained stable. Adjusted EBITDA was $18.8 million, or 39.1% of revenue.
Current Financial Guidance
Sequentially, the company currently expects revenue in the third quarter of fiscal 2021 to be up mid to high single digits compared to revenue in the second quarter. Electronic Materials revenue is expected to be up mid single digits and Performance Materials revenue is expected to be up high single digits for the third fiscal quarter.
The company increased the full fiscal year 2021 expectation for its Adjusted EBITDA range to between $370 million and $390 million.
With respect to this guidance, and additional current expectations provided in the company’s related slide presentation and prepared commentary, the company notes the continued uncertainty as to the ongoing macroeconomic environment and the impact of the pandemic on the industries in which the company participates.