☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware | 36-4324765 | |||||||
(State of Incorporation) | (I.R.S. Employer Identification No.) | |||||||
870 North Commons Drive | 60504 | |||||||
Aurora, Illinois
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(Zip Code) | |||||||
(Address of principal executive offices) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Common Stock, $0.001 par value | CCMP | The NASDAQ Stock Market LLC |
Large accelerated filer | x | Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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Page | |||||||||||
Name | Age | Present Position | Fiscal Year Appointed to Current Position |
Other Positions Held Between Fiscal 2017-20211
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||||||||||
David H. Li | 48 | President and Chief Executive Officer | 2015 | |||||||||||
Scott D. Beamer | 50 | Vice President and Chief Financial Officer | 2018 | Vice President and Chief Financial Officer, Stepan Company, 2013-2018 | ||||||||||
H. Carol Bernstein | 61 | Vice President, Secretary and General Counsel | 2000 | |||||||||||
Jeffrey M. Dysard | 48 | Vice President and President, Performance Materials | 2019 | General Manager of CMP Slurries, 2018-2019; General Manager of CMP Pads, 2016-2018 | ||||||||||
Colleen E. Mumford | 45 | Vice President, Communications and Marketing | 2020 | Corporate Relations Director, 2018-2019; Human Resources Director, 2015-2018 | ||||||||||
Eleanor K. Thorp | 47 | Vice President, Human Resources | 2018 | Head of Human Resources and Recruiting at Sephora Digital SEA, 2015-2018 | ||||||||||
Daniel D. Woodland | 51 | Vice President and President, Electronic Materials | 2019 | Vice President and Chief Marketing and Operations Officer, 2017-2019; Vice President of Marketing, 2015-2017 | ||||||||||
Jeanette A. Press | 46 | Corporate Controller and Principal Accounting Officer | 2020 | Vice President and Principal Accounting Officer, Univar Solutions, 2019-2020; Vice President and Principal Accounting Officer, USG Corporation, 2014-2019 |
Period |
Total Number of Shares Purchased
(in thousands) |
Average Price Paid Per Share |
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(in thousands) |
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
(in thousands) |
||||||||||||||||||||||
July 1 - 31, 2021 | 25 | $ | 144.12 | 25 | $ | 141,208 | ||||||||||||||||||||
August 1 - 31, 2021 | 612 | 125.13 | 612 | 64,558 | ||||||||||||||||||||||
September 1 - 30, 2021 | 185 | 133.19 | 185 | 39,975 | ||||||||||||||||||||||
Total | 822 | $ | 127.52 | 822 | $ | 39,975 |
9/16 | 12/16 | 3/17 | 6/17 | 9/17 | 12/17 | 3/18 | 6/18 | 9/18 | 12/18 | 3/19 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
CMC Materials, Inc. | $ | 100.00 | $ | 119.73 | $ | 145.60 | $ | 140.70 | $ | 152.73 | $ | 180.14 | $ | 205.83 | $ | 207.45 | $ | 198.98 | $ | 185.48 | $ | 218.61 | |||||||||||||||||||||||||||||||||||||||||||
NASDAQ Composite | 100.00 | 101.66 | 111.95 | 116.61 | 123.68 | 131.78 | 135.19 | 144.13 | 154.82 | 128.04 | 149.56 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
PHLX Semiconductor | 100.00 | 108.92 | 121.99 | 125.49 | 142.61 | 153.08 | 162.95 | 162.02 | 169.26 | 143.83 | 174.54 |
6/19 | 9/19 | 12/19 | 3/20 | 6/20 | 9/20 | 12/20 | 3/21 | 6/21 | 9/21 | ||||||||||||||||||||||||||||||||||||||||||||||||||
CMC Materials, Inc. | $ | 215.78 | $ | 276.80 | $ | 284.62 | $ | 226.19 | $ | 277.41 | $ | 283.91 | $ | 302.59 | $ | 354.52 | $ | 303.21 | $ | 247.88 | |||||||||||||||||||||||||||||||||||||||
NASDAQ Composite | 155.35 | 155.63 | 175.03 | 150.60 | 197.21 | 219.37 | 253.64 | 261.14 | 286.40 | 285.75 | |||||||||||||||||||||||||||||||||||||||||||||||||
PHLX Semiconductor | 183.58 | 197.01 | 234.81 | 192.66 | 255.79 | 288.62 | 360.82 | 404.53 | 434.39 | 424.30 |
Year Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | 2021 | 2020 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
Revenue | $ | 1,199,831 | 100.0 | % | $ | 1,116,270 | 100.0 | % | $ | 83,561 | 7.5 | % | ||||||||||||||||||||||||||||||||
Cost of sales | 701,662 | 58.5 | % | 627,669 | 56.2 | % | 73,993 | 11.8 | % | |||||||||||||||||||||||||||||||||||
Gross profit | 498,169 | 41.5 | % | 488,601 | 43.8 | % | 9,568 | 2.0 | % | |||||||||||||||||||||||||||||||||||
Research, development and technical | 54,195 | 4.5 | % | 52,311 | 4.7 | % | 1,884 | 3.6 | % | |||||||||||||||||||||||||||||||||||
Selling, general and administrative | 228,886 | 19.1 | % | 217,071 | 19.4 | % | 11,815 | 5.4 | % | |||||||||||||||||||||||||||||||||||
Impairment charges | 230,392 | 19.2 | % | 2,314 | 0.2 | % | 228,078 | 9856.4 | % | |||||||||||||||||||||||||||||||||||
Total operating expenses | 513,473 | 42.8 | % | 271,696 | 24.3 | % | 241,777 | 89.0 | % | |||||||||||||||||||||||||||||||||||
Operating (loss) income | (15,304) | (1.3) | % | 216,905 | 19.4 | % | (232,209) | (107.1) | % | |||||||||||||||||||||||||||||||||||
Interest expense, net | 38,360 | 3.2 | % | 41,840 | 3.7 | % | (3,480) | (8.3) | % | |||||||||||||||||||||||||||||||||||
Other expense, net | (1,130) | (0.1) | % | (1,718) | (0.2) | % | 588 | 34.2 | % | |||||||||||||||||||||||||||||||||||
(Loss) income before income taxes | (54,794) | (4.6) | % | 173,347 | 15.5 | % | (228,141) | (131.6) | % | |||||||||||||||||||||||||||||||||||
Provision for income taxes | 13,783 | 1.1 | % | 30,519 | 2.7 | % | (16,736) | (54.8) | % | |||||||||||||||||||||||||||||||||||
Net (loss) income | $ | (68,577) | (5.7) | % | $ | 142,828 | 12.8 | % | $ | (211,405) | (148.0) | % |
Year Ended September 30, | |||||||||||||||||||||||||||||
(In thousands) | 2021 | 2020 | $ Change | % Change | |||||||||||||||||||||||||
Segment Revenue: | |||||||||||||||||||||||||||||
Electronic Materials | $ | 984,712 | $ | 882,824 | $ | 101,888 | 11.5 | % | |||||||||||||||||||||
Performance Materials | 215,119 | 233,446 | (18,327) | (7.9) | % | ||||||||||||||||||||||||
Total Revenues | $ | 1,199,831 | $ | 1,116,270 | $ | 83,561 | 7.5 | % | |||||||||||||||||||||
Adjusted EBITDA: | |||||||||||||||||||||||||||||
Electronic Materials | $ | 323,827 | $ | 299,037 | $ | 24,790 | 8.3 | % | |||||||||||||||||||||
Performance Materials | 87,961 | 106,797 | (18,836) | (17.6) | % | ||||||||||||||||||||||||
Unallocated corporate expenses | (53,475) | (48,033) | (5,442) | (11.3) | % | ||||||||||||||||||||||||
Consolidated Adjusted EBITDA | $ | 358,313 | $ | 357,801 | $ | 512 | 0.1 | % | |||||||||||||||||||||
Adjusted EBITDA Margin: | |||||||||||||||||||||||||||||
Electronic Materials | 32.9 | % | 33.9 | % | -100 bpts | ||||||||||||||||||||||||
Performance Materials | 40.9 | % | 45.7 | % | -480 bpts |
Year Ended September 30, | |||||||||||||||||
(In thousands) | 2021 | 2020 | 2019 | ||||||||||||||
Net (loss) income | $ | (68,577) | $ | 142,828 | $ | 39,215 | |||||||||||
Interest expense, net | 38,360 | 41,840 | 43,335 | ||||||||||||||
Income taxes | 13,783 | 30,519 | 23,891 | ||||||||||||||
Depreciation and amortization | 132,170 | 127,737 | 98,592 | ||||||||||||||
EBITDA | 115,736 | 342,924 | 205,033 | ||||||||||||||
Acquisition and integration related expense | 10,115 | 10,852 | 34,709 | ||||||||||||||
Impairment charges | 230,392 | 2,314 | 67,372 | ||||||||||||||
Environmental accrual | 2,508 | — | — | ||||||||||||||
Cost related to KMG-Bernuth warehouse fire, net of insurance recovery | (1,050) | 1,083 | 9,905 | ||||||||||||||
Costs related to the Pandemic, net of grants received | 489 | 849 | — | ||||||||||||||
Charge for fair value write-up of acquired inventory sold | — | — | 14,869 | ||||||||||||||
Net costs related to restructuring of the wood treatment business | 123 | (221) | 1,530 | ||||||||||||||
Adjusted EBITDA | $ | 358,313 | $ | 357,801 | $ | 333,418 |
Year Ended September 30, | |||||||||||||||||
(In thousands) | 2021 | 2020 | 2019 | ||||||||||||||
Adjusted EBITDA: | |||||||||||||||||
Electronic Materials | $ | 323,827 | $ | 299,037 | $ | 294,902 | |||||||||||
Performance Materials | 87,961 | 106,797 | 91,372 | ||||||||||||||
Unallocated Corporate Expenses | (53,475) | (48,033) | (52,856) | ||||||||||||||
Consolidated Adjusted EBITDA | $ | 358,313 | $ | 357,801 | $ | 333,418 |
(In thousands) | Total | Current | Long-Term | ||||||||||||||
Debt (Note 13)
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$ | 928,375 | $ | 13,313 | $ | 915,062 | |||||||||||
Interest expense and fees | 112,786 | 21,260 | 91,526 | ||||||||||||||
Purchase obligations (material supply agreements) | 84,968 | 81,295 | 3,673 | ||||||||||||||
Future lease payments (Note 14)
|
32,681 | 8,031 | 24,650 | ||||||||||||||
Total contractual obligations | $ | 1,158,810 | $ | 123,899 | $ | 1,034,911 |
Page | ||||||||
Consolidated Financial Statements: | ||||||||
Financial Statement Schedule: | ||||||||
Year Ended September 30, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Revenue | $ | 1,199,831 | $ | 1,116,270 | $ | 1,037,696 | |||||||||||
Cost of sales | 701,662 | 627,669 | 595,043 | ||||||||||||||
Gross profit | 498,169 | 488,601 | 442,653 | ||||||||||||||
Operating expenses: | |||||||||||||||||
Research, development and technical | 54,195 | 52,311 | 51,707 | ||||||||||||||
Selling, general and administrative | 228,886 | 217,071 | 213,078 | ||||||||||||||
Impairment charges | 230,392 | 2,314 | 67,372 | ||||||||||||||
Total operating expenses | 513,473 | 271,696 | 332,157 | ||||||||||||||
Operating (loss) income | (15,304) | 216,905 | 110,496 | ||||||||||||||
Interest expense, net | 38,360 | 41,840 | 43,335 | ||||||||||||||
Other expense, net | (1,130) | (1,718) | (4,055) | ||||||||||||||
(Loss) income before income taxes | (54,794) | 173,347 | 63,106 | ||||||||||||||
Provision for income taxes | 13,783 | 30,519 | 23,891 | ||||||||||||||
Net (loss) income | $ | (68,577) | $ | 142,828 | $ | 39,215 | |||||||||||
Basic (loss) earnings per share | $ | (2.35) | $ | 4.90 | $ | 1.37 | |||||||||||
Diluted (loss) earnings per share | $ | (2.35) | $ | 4.83 | $ | 1.35 | |||||||||||
Weighted average basic shares outstanding | 29,126 | 29,136 | 28,571 | ||||||||||||||
Weighted average diluted shares outstanding | 29,126 | 29,580 | 29,094 |
Year Ended September 30, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Net (loss) income | $ | (68,577) | $ | 142,828 | $ | 39,215 | |||||||||||
Other comprehensive income (loss): | |||||||||||||||||
Foreign currency translation adjustment | 2,377 | 19,642 | (7,957) | ||||||||||||||
Income tax benefit (expense) | 140 | (356) | (591) | ||||||||||||||
Total foreign currency translation adjustment, net of tax | 2,517 | 19,286 | (8,548) | ||||||||||||||
Unrealized gain (loss) on cash flow hedges: | |||||||||||||||||
Change in fair value | 7,184 | (23,161) | (23,667) | ||||||||||||||
Reclassification adjustment into earnings | 14,122 | 9,360 | (524) | ||||||||||||||
Income tax (expense) benefit | (4,765) | 3,090 | 5,411 | ||||||||||||||
Total unrealized gain (loss) on cash flow hedges, net of tax | 16,541 | (10,711) | (18,780) | ||||||||||||||
Pension and other postretirement | (211) | 891 | (479) | ||||||||||||||
Income tax expense | 48 | 156 | 30 | ||||||||||||||
Total pension and other postretirement, net of tax | (163) | 1,047 | (449) | ||||||||||||||
Other comprehensive income (loss), net of tax | 18,895 | 9,622 | (27,777) | ||||||||||||||
Comprehensive (loss) income | $ | (49,682) | $ | 152,450 | $ | 11,438 |
September 30, | |||||||||||
2021 | 2020 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 185,979 | $ | 257,354 | |||||||
Accounts receivable, less allowance for credit losses of $527 at September 30, 2021, and $583 at September 30, 2020
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150,099 | 134,023 | |||||||||
Inventories | 173,464 | 159,134 | |||||||||
Prepaid expenses and other current assets | 25,439 | 26,558 | |||||||||
Total current assets | 534,981 | 577,069 | |||||||||
Property, plant and equipment, net | 354,771 | 362,067 | |||||||||
Goodwill | 576,902 | 718,647 | |||||||||
Other intangible assets, net | 625,434 | 670,964 | |||||||||
Deferred income taxes | 6,813 | 7,713 | |||||||||
Other long-term assets | 51,984 | 40,007 | |||||||||
Total assets | $ | 2,150,885 | $ | 2,376,467 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 52,748 | $ | 49,254 | |||||||
Current portion of long-term debt | 13,313 | 10,650 | |||||||||
Accrued expenses and other current liabilities | 139,797 | 121,442 | |||||||||
Total current liabilities | 205,858 | 181,346 | |||||||||
Long-term debt, net of current portion
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903,031 | 910,764 | |||||||||
Deferred income taxes | 74,930 | 112,212 | |||||||||
Other long-term liabilities | 88,129 | 97,832 | |||||||||
Total liabilities | 1,271,948 | 1,302,154 | |||||||||
Commitments and contingencies (Note 19)
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Stockholders’ equity: | |||||||||||
Common Stock Authorized: 200,000 shares, $0.001 par value; Issued: 40,221 shares at September 30, 2021 and 39,914 shares at September 30, 2020
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40 | 40 | |||||||||
Capital in excess of par value of common stock | 1,052,869 | 1,019,803 | |||||||||
Retained earnings | 431,968 | 553,718 | |||||||||
Accumulated other comprehensive income (loss) | 4,791 | (14,104) | |||||||||
Treasury stock at cost, 11,795 shares at September 30, 2021 and 10,834 shares at September 30, 2020
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(610,731) | (485,144) | |||||||||
Total stockholders’ equity | 878,937 | 1,074,313 | |||||||||
Total liabilities and stockholders’ equity | $ | 2,150,885 | $ | 2,376,467 |
Year Ended September 30, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||||
Net (loss) income | $ | (68,577) | $ | 142,828 | $ | 39,215 | |||||||||||
Adjustments to reconcile Net (loss) income to net cash provided by operating activities: | |||||||||||||||||
Impairment charges | 230,392 | 2,314 | 67,372 | ||||||||||||||
Depreciation and amortization | 132,170 | 127,737 | 98,592 | ||||||||||||||
Deferred income tax benefit | (41,347) | (11,267) | (27,150) | ||||||||||||||
Share-based compensation expense | 19,678 | 16,396 | 18,227 | ||||||||||||||
Amortization of terminated interest rate swap contract | 9,287 | — | — | ||||||||||||||
Amortization of debt issuance costs | 3,152 | 3,123 | 2,884 | ||||||||||||||
Loss (gain) on disposal of assets | 1,374 | (71) | (36) | ||||||||||||||
Non-cash foreign exchange loss (gain) | 406 | (266) | 839 | ||||||||||||||
Accretion and adjustment on Asset Retirement Obligations | 295 | 599 | 530 | ||||||||||||||
Non-cash charge on inventory step up of acquired inventory sold | — | — | 14,869 | ||||||||||||||
Other | (1,047) | (796) | (930) | ||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||
Accounts receivable | (13,429) | 13,075 | (6,156) | ||||||||||||||
Inventories | (13,023) | (12,337) | (20,993) | ||||||||||||||
Prepaid expenses and other assets | (6,576) | 8,645 | 6,830 | ||||||||||||||
Accounts payable | 3,586 | (2,861) | 1,163 | ||||||||||||||
Accrued expenses and other liabilities | 14,272 | 165 | (20,275) | ||||||||||||||
Net cash provided by operating activities | 270,613 | 287,284 | 174,981 | ||||||||||||||
Cash flows from investing activities: | |||||||||||||||||
Acquisition of a business, net of cash acquired | (126,877) | — | (1,182,187) | ||||||||||||||
Additions to property, plant and equipment | (42,103) | (125,839) | (55,972) | ||||||||||||||
Proceeds from the sale of assets | 2,620 | 1,587 | 1,224 | ||||||||||||||
Cash settlement of life insurance policy | — | — | 3,959 | ||||||||||||||
Net cash used in investing activities | (166,360) | (124,252) | (1,232,976) | ||||||||||||||
Cash flows from financing activities: | |||||||||||||||||
Repurchases of common stock under Share Repurchase Program | (120,027) | (35,009) | (10,002) | ||||||||||||||
Dividends paid | (53,015) | (50,383) | (46,324) | ||||||||||||||
Proceeds from issuance of stock | 13,388 | 14,427 | 17,210 | ||||||||||||||
Repayment of long-term debt | (7,988) | (23,313) | (105,326) | ||||||||||||||
Repurchases of common stock withheld for taxes | (5,560) | (3,229) | (4,718) | ||||||||||||||
Debt issuance costs | (1,898) | — | (18,745) | ||||||||||||||
Proceeds from issuance of long-term debt | — | — | 1,062,337 | ||||||||||||||
Proceeds from revolving line of credit | — | 150,000 | — | ||||||||||||||
Repayment on revolving line of credit | — | (150,000) | — | ||||||||||||||
Other financing activities | (236) | (149) | — | ||||||||||||||
Net cash (used in) provided by financing activities | (175,336) | (97,656) | 894,432 | ||||||||||||||
Effect of exchange rate changes on cash | (292) | 3,483 | (863) | ||||||||||||||
(Decrease) increase in cash and cash equivalents | (71,375) | 68,859 | (164,426) | ||||||||||||||
Cash and cash equivalents at beginning of year | 257,354 | 188,495 | 352,921 | ||||||||||||||
Cash and cash equivalents at end of year | $ | 185,979 | $ | 257,354 | $ | 188,495 | |||||||||||
Supplemental disclosure of cash flow information: | |||||||||||||||||
Cash paid for income taxes (net of refunds received) | $ | 39,389 | $ | 44,535 | $ | 35,432 | |||||||||||
Cash paid for interest | 28,920 | 45,281 | 39,181 | ||||||||||||||
Purchases of property, plant and equipment in accrued liabilities and accounts payable at the end of the period | 5,009 | 5,365 | 8,690 | ||||||||||||||
Equity consideration related to the acquisition of KMG Chemicals, Inc | — | — | 331,048 | ||||||||||||||
Cash paid during the period for lease liabilities | 8,274 | 7,554 | — | ||||||||||||||
Right of use asset obtained in exchange for lease liabilities | 3,600 | 7,435 | — |
Year Ended September 30, | |||||||||||||||||||||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||||||||||||||||||||
Shares | $ | Shares | $ | Shares | $ | ||||||||||||||||||||||||||||||
Common Stock | |||||||||||||||||||||||||||||||||||
Beginning balance | 39,914 | $ | 40 | 39,592 | $ | 40 | 35,862 | $ | 36 | ||||||||||||||||||||||||||
Exercise of stock options | 133 | — | 181 | — | 313 | 1 | |||||||||||||||||||||||||||||
Restricted stock | 123 | — | 95 | — | 131 | — | |||||||||||||||||||||||||||||
Common stock under Employee Stock Purchase Plan | 51 | — | 46 | — | 49 | — | |||||||||||||||||||||||||||||
Common stock in connection with acquisition of KMG Chemicals, Inc. | — | — | — | — | 3,237 | 3 | |||||||||||||||||||||||||||||
Ending balance | 40,221 | 40 | 39,914 | 40 | 39,592 | 40 | |||||||||||||||||||||||||||||
Capital in Excess of Par | |||||||||||||||||||||||||||||||||||
Beginning balance | 1,019,803 | 988,980 | 622,498 | ||||||||||||||||||||||||||||||||
Share-based compensation expense | 19,678 | 16,396 | 18,227 | ||||||||||||||||||||||||||||||||
Exercise of stock options | 7,151 | 9,491 | 13,194 | ||||||||||||||||||||||||||||||||
Issuance of common stock under Employee Stock Purchase Plan | 6,022 | 4,786 | 3,941 | ||||||||||||||||||||||||||||||||
Issuance of restricted stock under Deposit Share Program | 215 | 150 | 75 | ||||||||||||||||||||||||||||||||
Issuance of common stock in connection with acquisition of KMG Chemicals, Inc. | — | — | 331,045 | ||||||||||||||||||||||||||||||||
Ending balance | 1,052,869 | 1,019,803 | 988,980 | ||||||||||||||||||||||||||||||||
Retained Earnings | |||||||||||||||||||||||||||||||||||
Beginning balance | 553,718 | 461,501 | 471,673 | ||||||||||||||||||||||||||||||||
Cumulative effect of accounting changes1
|
— | 488 | (933) | ||||||||||||||||||||||||||||||||
Net (loss) income | (68,577) | 142,828 | 39,215 | ||||||||||||||||||||||||||||||||
Dividends | (53,173) | (51,099) | (48,454) | ||||||||||||||||||||||||||||||||
Ending balance | 431,968 | 553,718 | 461,501 | ||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||||||||||||||
Beginning balance | (14,104) | (23,238) | 4,539 | ||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | 2,517 | 19,286 | (8,548) | ||||||||||||||||||||||||||||||||
Cash flow hedges | 16,541 | (10,711) | (18,780) | ||||||||||||||||||||||||||||||||
Minimum pension liability adjustment | (163) | 1,047 | (449) | ||||||||||||||||||||||||||||||||
Cumulative effect of accounting changes1
|
— | (488) | — | ||||||||||||||||||||||||||||||||
Ending balance | 4,791 | (14,104) | (23,238) | ||||||||||||||||||||||||||||||||
Treasury Stock | |||||||||||||||||||||||||||||||||||
Beginning balance | 10,834 | (485,144) | 10,491 | (446,906) | 10,356 | (432,054) | |||||||||||||||||||||||||||||
Repurchases of common stock under Share Repurchase Program | 924 | (120,027) | 318 | (35,009) | 88 | (10,002) | |||||||||||||||||||||||||||||
Repurchases of common stock - other | 37 | (5,560) | 25 | (3,229) | 47 | (4,850) | |||||||||||||||||||||||||||||
Ending balance | 11,795 | (610,731) | 10,834 | (485,144) | 10,491 | (446,906) | |||||||||||||||||||||||||||||
Total Equity | $ | 878,937 | $ | 1,074,313 | $ | 980,377 | |||||||||||||||||||||||||||||
Dividends per share of common stock | $ | 1.82 | $ | 1.74 | $ | 1.66 |
2021 | 2020 | ||||||||||
Beginning Balance | $ | 583 | $ | 2,377 | |||||||
Amount of charge (benefit) to expense | 76 | (1,122) | |||||||||
Deductions and adjustments | (132) | (672) | |||||||||
Ending Balance at September 30 | $ | 527 | $ | 583 |
Year Ended September 30, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Intel | 13 | % | 15 | % | 14 | % | |||||||||||
Samsung Group | 11 | % | 11 | % | 11 | % | |||||||||||
Land improvements |
10-20 years
|
||||
Buildings |
15-30 years
|
||||
Machinery and equipment |
3-20 years
|
||||
Furniture and fixtures |
5-10 years
|
||||
Vehicles |
5-8 years
|
||||
Information systems |
3-5 years
|
||||
Assets under financing leases | The shorter of the term of the lease or estimated useful life |
Consolidated Balance Sheet Location | September 30, | ||||||||||||||||
2021 | 2020 | ||||||||||||||||
Contract liabilities (current) | Accrued expenses and other current liabilities | $ | 8,883 | $ | 8,501 | ||||||||||||
Contract liabilities (noncurrent) | Other long-term liabilities | 1,788 | 1,288 |
Less Than 1 Year | 1-3 Years | 3-5 Years | Total | ||||||||||||||||||||
Revenue expected to be recognized on contract liability amounts as of September 30, 2021
|
$ | 1,009 | $ | 1,057 | $ | 731 | $ | 2,797 |
Fair Value |
Estimated Useful Life
(years) |
Amortization Method | |||||||||||||||
Technology and know-how | $ | 25,400 | 10 | Straight-line | |||||||||||||
Customer relationships | 8,100 | 20 | Accelerated | ||||||||||||||
Trade name | 3,700 | 10 | Straight-line | ||||||||||||||
Total intangible assets | $ | 37,200 |
Level 1 |
Cash and cash equivalents consist of various bank accounts used to support our operations and investments in institutional money-market funds that are traded in active markets.
Other long-term investments represent the fair value of investments under our supplemental employee retirement plan (“SERP”). The fair value of the investments is determined through quoted market prices within actively traded markets.
|
|||||||
Level 2 |
Derivative financial instruments include foreign exchange contracts and an interest rate swap contract. The fair value of our derivative instruments is estimated using standard valuation models and market-based observable inputs over the contractual term, including one-month LIBOR based yield curves for the interest rate swap, and forward rates and/or the Overnight Index Swap curve for forward foreign exchange contracts, among others.
|
|||||||
Level 3 | No Level 3 financial instruments |
Level 1 | Level 2 | Level 3 |
Total
Fair Value |
||||||||||||||||||||||||||||||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 185,979 | $ | 257,354 | $ | — | $ | — | $ | — | $ | — | $ | 185,979 | $ | 257,354 | |||||||||||||||||||||||||||||||
Other long-term investments | 1,439 | 1,214 | — | — | — | — | 1,439 | 1,214 | |||||||||||||||||||||||||||||||||||||||
Derivative financial instruments | — | — | 12,335 | 27 | — | — | 12,335 | 27 | |||||||||||||||||||||||||||||||||||||||
Total assets | $ | 187,418 | $ | 258,568 | $ | 12,335 | $ | 27 | $ | — | $ | — | $ | 199,753 | $ | 258,595 | |||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||
Derivative financial instruments | $ | — | $ | — | $ | 3,383 | $ | 38,157 | $ | — | $ | — | $ | 3,383 | $ | 38,157 | |||||||||||||||||||||||||||||||
Total liabilities | $ | — | $ | — | $ | 3,383 | $ | 38,157 | $ | — | $ | — | $ | 3,383 | $ | 38,157 |
September 30, | |||||||||||
2021 | 2020 | ||||||||||
Raw materials | $ | 67,969 | $ | 66,591 | |||||||
Work in process | 17,358 | 15,148 | |||||||||
Finished goods | 88,137 | 77,395 | |||||||||
Total | $ | 173,464 | $ | 159,134 |
September 30, | |||||||||||
2021 | 2020 | ||||||||||
Land and land improvements | $ | 37,421 | $ | 36,775 | |||||||
Buildings | 195,252 | 166,907 | |||||||||
Machinery and equipment | 352,014 | 280,432 | |||||||||
Vehicles | 20,075 | 18,719 | |||||||||
Furniture and fixtures | 10,045 | 9,865 | |||||||||
Information systems | 66,723 | 56,573 | |||||||||
Finance leases | 2,442 | 2,514 | |||||||||
Construction in progress | 43,542 | 123,441 | |||||||||
Total property, plant and equipment | 727,514 | 695,226 | |||||||||
Less: accumulated depreciation | (372,743) | (333,159) | |||||||||
Net property, plant and equipment | $ | 354,771 | $ | 362,067 |
2021 | 2020 | ||||||||||
Beginning Balance | $ | 11,759 | $ | 12,675 | |||||||
Purchase accounting in connection with the KMG Acquisition | — | (860) | |||||||||
Liabilities Settled | (21) | — | |||||||||
Accretion of discount | 585 | 599 | |||||||||
Estimate revision | (290) | (655) | |||||||||
Ending Balance at September 30 | $ | 12,033 | $ | 11,759 |
Electronic Materials | Performance Materials | Total | |||||||||||||||
Balance at September 30, 20191
|
$ | 352,797 | $ | 357,274 | $ | 710,071 | |||||||||||
Foreign currency translation impact | 7,628 | (257) | 7,371 | ||||||||||||||
Other | — | 1,205 | 1,205 | ||||||||||||||
Balance at September 30, 20201
|
360,425 | 358,222 | 718,647 | ||||||||||||||
Foreign currency translation impact | 1,848 | 1,573 | 3,421 | ||||||||||||||
Additions due to acquisitions (See Note 4)
|
81,960 | — | 81,960 | ||||||||||||||
Impairment | — | (227,126) | (227,126) | ||||||||||||||
Balance at September 30, 2021 | $ | 444,233 | $ | 132,669 | $ | 576,902 |
September 30, 2021 | September 30, 2020 | ||||||||||||||||||||||||||||||||||
Gross Carrying
Amount |
Accumulated
Amortization |
Net |
Gross Carrying
Amount |
Accumulated
Amortization |
Net | ||||||||||||||||||||||||||||||
Other intangible assets subject to amortization: | |||||||||||||||||||||||||||||||||||
Customer relationships, trade names, and distribution rights | $ | 701,849 | $ | 207,606 | $ | 494,243 | $ | 690,716 | $ | 140,037 | $ | 550,679 | |||||||||||||||||||||||
Product technology, trade secrets and know-how | 147,270 | 63,249 | 84,021 | 122,135 | 49,228 | 72,907 | |||||||||||||||||||||||||||||
Acquired patents and licenses | 8,748 | 8,748 | — | 8,921 | 8,713 | 208 | |||||||||||||||||||||||||||||
Total other intangible assets subject to amortization | 857,867 | 279,603 | 578,264 | 821,772 | 197,978 | 623,794 | |||||||||||||||||||||||||||||
Other intangible assets not subject to amortization: | |||||||||||||||||||||||||||||||||||
Other indefinite-lived intangibles1
|
47,170 | — | 47,170 | 47,170 | — | 47,170 | |||||||||||||||||||||||||||||
Total other intangible assets not subject to amortization | 47,170 | — | 47,170 | 47,170 | — | 47,170 | |||||||||||||||||||||||||||||
Total other intangible assets | $ | 905,037 | $ | 279,603 | $ | 625,434 | $ | 868,942 | $ | 197,978 | $ | 670,964 |
Gross Carrying Amount | |||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2020 |
Additions1
|
Impairment2
|
FX and Other | Balance at September 30, 2021 | Accumulated Amortization | Net at September 30, 2021 | |||||||||||||||||||||||||||||||||||
Other intangible assets subject to amortization: | |||||||||||||||||||||||||||||||||||||||||
Customer relationships, trade names, and distribution rights | $ | 690,716 | $ | 11,800 | $ | (2,419) | $ | 1,752 | $ | 701,849 | $ | 207,606 | $ | 494,243 | |||||||||||||||||||||||||||
Product technology, trade secrets and know-how | 122,135 | 25,400 | (583) | 318 | 147,270 | 63,249 | 84,021 | ||||||||||||||||||||||||||||||||||
Acquired patents and licenses | 8,921 | — | (173) | — | 8,748 | 8,748 | — | ||||||||||||||||||||||||||||||||||
Total other intangible assets subject to amortization | 821,772 | 37,200 | (3,175) | 2,070 | 857,867 | 279,603 | 578,264 | ||||||||||||||||||||||||||||||||||
Other intangible assets not subject to amortization: | |||||||||||||||||||||||||||||||||||||||||
Other indefinite-lived intangibles
|
47,170 | — | — | — | 47,170 | — | 47,170 | ||||||||||||||||||||||||||||||||||
Total other intangible assets not subject to amortization | 47,170 | — | — | — | 47,170 | — | 47,170 | ||||||||||||||||||||||||||||||||||
Total other intangible assets | $ | 868,942 | $ | 37,200 | $ | (3,175) | $ | 2,070 | $ | 905,037 | $ | 279,603 | $ | 625,434 |
Fiscal Year |
Estimated
Amortization Expense |
|||||||
2022 | $ | 78,566 | ||||||
2023 | 66,716 | |||||||
2024 | 59,440 | |||||||
2025 | 54,251 | |||||||
2026 | 49,568 |
Year Ended September 30, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Long-lived asset impairment charges: | |||||||||||||||||
Property, plant, and equipment, net | $ | 91 | $ | 450 | $ | 4,063 | |||||||||||
Other intangible assets, net | 3,175 | 1,864 | 63,309 | ||||||||||||||
Total wood treatment long-lived asset impairment charges | 3,266 | 2,314 | 67,372 | ||||||||||||||
Goodwill | 25,576 | — | — | ||||||||||||||
Total wood treatment impairment charges | $ | 28,842 | $ | 2,314 | $ | 67,372 |
September 30, | |||||||||||
2021 | 2020 | ||||||||||
Right of use assets | $ | 29,302 | $ | 30,999 | |||||||
Interest rate swap (See Note 15)
|
12,335 | — | |||||||||
Prepaid unamortized debt issuance cost - revolver | 2,201 | 537 | |||||||||
SERP investments | 1,439 | 1,214 | |||||||||
Vendor contract assets | 1,329 | 2,889 | |||||||||
Other long-term assets | 5,378 | 4,368 | |||||||||
Total | $ | 51,984 | $ | 40,007 |
September 30, | |||||||||||
2021 | 2020 | ||||||||||
Accrued compensation | $ | 47,360 | $ | 46,465 | |||||||
Income taxes payable | 16,836 | 16,216 | |||||||||
Dividends payable | 13,827 | 13,669 | |||||||||
ARO (current) | 11,933 | — | |||||||||
Contract liabilities (current) | 8,883 | 8,501 | |||||||||
Current portion of operating lease liability | 7,646 | 6,513 | |||||||||
Taxes, other than income taxes | 6,620 | 5,044 | |||||||||
Current portion of terminated swap liability (See Note 15)
|
5,855 | — | |||||||||
Goods and services received, not yet invoiced | 3,866 | 3,957 | |||||||||
Interest rate swap liability | 2,995 | 11,992 | |||||||||
Accrued interest | 1,846 | 29 | |||||||||
Other | 12,130 | 9,056 | |||||||||
Total | $ | 139,797 | $ | 121,442 |
September 30, | |||||||||||
2021 | 2020 | ||||||||||
Senior Secured Term Loan Facility, one-month LIBOR plus 2.00%
|
$ | 928,375 | $ | 936,363 | |||||||
Less: Unamortized debt issuance costs | (12,031) | (14,949) | |||||||||
Total debt | 916,344 | 921,414 | |||||||||
Less: Current maturities and short-term debt | (13,313) | (10,650) | |||||||||
Total long-term debt excluding current maturities | $ | 903,031 | $ | 910,764 |
Fiscal Year | Principal Repayments | |||||||
2022 | $ | 13,313 | ||||||
2023 | 10,650 | |||||||
2024 | 10,650 | |||||||
2025 | 10,650 | |||||||
2026 | 883,112 | |||||||
$ | 928,375 |
Year Ended September 30, | ||||||||||||||||||||
Lease Components | 2021 | 2020 | ||||||||||||||||||
Operating lease cost | $ | 8,329 | $ | 7,871 | ||||||||||||||||
Variable and short-term costs | 1,324 | 1,637 | ||||||||||||||||||
Total lease cost | $ | 9,653 | $ | 9,508 |
Consolidated Balance Sheet Location | September 30, | |||||||||||||||||||
Lease Components | 2021 | 2020 | ||||||||||||||||||
Lease right-of-use assets | Other long-term assets | $ | 29,302 | $ | 30,999 | |||||||||||||||
Lease liabilities - current | Accrued expenses and other current liabilities | $ | 7,646 | $ | 6,513 | |||||||||||||||
Lease liabilities - non-current | Other long-term liabilities | 23,089 | 25,967 | |||||||||||||||||
Total lease liabilities | $ | 30,735 | $ | 32,480 | ||||||||||||||||
Weighted-average remaining lease term (in years) | 6 years | 7 years | ||||||||||||||||||
Weighted-average discount rate | 2.55 | % | 3.06 | % |
Fiscal Year | Amount | |||||||
2022 | $ | 8,031 | ||||||
2023 | 6,791 | |||||||
2024 | 4,816 | |||||||
2025 | 3,706 | |||||||
2026 | 3,205 | |||||||
2026 and future years | 6,132 | |||||||
Total future lease payments | 32,681 | |||||||
Less: Imputed interest | 1,946 | |||||||
Operating lease liability | 30,735 | |||||||
September 30, | ||||||||||||||
2021 | 2020 | |||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||
Interest rate swap contract - new agreement | $ | 555,210 | $ | — | ||||||||||
Interest rate swap contract - terminated agreement | — | 571,000 | ||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||
Foreign exchange contracts to purchase U.S. dollars | $ | 4,225 | $ | 8,054 | ||||||||||
Foreign exchange contracts to sell U.S. dollars | 23,235 | 25,105 |
Consolidated Balance Sheets Location | Derivative Assets | Derivative Liabilities | |||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||
Derivatives designated as hedging instruments | |||||||||||||||||||||||||||||
Interest rate swap contract | Other long-term assets | $ | 12,335 | $ | — | $ | — | $ | — | ||||||||||||||||||||
Accrued expenses and other current liabilities | — | — | 2,995 | 11,992 | |||||||||||||||||||||||||
Other long-term liabilities | — | — | — | 26,000 | |||||||||||||||||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||||||||||||
Foreign exchange contracts | Prepaid expenses and other current assets | $ | — | $ | 27 | $ | — | $ | — | ||||||||||||||||||||
Accrued expenses and other current liabilities | — | — | 388 | 165 |
Consolidated Statements of (Loss) Income Location | (Loss) Gain Recognized in Consolidated Statements of (Loss) Income | ||||||||||||||||||||||
Year Ended September 30, | |||||||||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||||||||
Derivatives designated as hedging instruments | |||||||||||||||||||||||
Interest rate swap contract | Interest expense, net | $ | (4,835) | $ | (9,360) | $ | 524 | ||||||||||||||||
Terminated interest rate swap contract | Interest expense, net | (9,287) | — | — | |||||||||||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||||||
Foreign exchange contracts | Other expense, net | $ | (794) | $ | (222) | $ | 28 |
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) | ||||||||||||||||||||
Year Ended September 30, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||||||||
Interest rate swap contract | $ | 7,184 | $ | (23,161) | $ | (23,667) |
Year Ended September 30, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Weighted-average grant date fair value | $ | 51.92 | $ | 39.68 | $ | 27.34 | |||||||||||
Expected term (in years) | 6.74 | 6.96 | 6.86 | ||||||||||||||
Expected volatility | 40 | % | 32 | % | 26 | % | |||||||||||
Risk-free rate of return | 0.7 | % | 1.6 | % | 2.8 | % | |||||||||||
Dividend yield | 1.2 | % | 1.3 | % | 1.6 | % |
Stock Options | Weighted Average Exercise Price |
Weighted Average Remaining Contractual Term
(in years) |
Aggregate Intrinsic Value
(in thousands) |
||||||||||||||||||||
Outstanding at September 30, 2020 | 807 | $ | 75.87 | ||||||||||||||||||||
Granted | 113 | 147.67 | |||||||||||||||||||||
Exercised | (132) | 54.34 | |||||||||||||||||||||
Forfeited or canceled | (9) | 107.33 | |||||||||||||||||||||
Outstanding at September 30, 2021 | 779 | 89.61 | 6.0 | $ | 29,654 | ||||||||||||||||||
Exercisable at September 30, 2021 | 510 | $ | 69.52 | 4.9 | $ | 27,763 | |||||||||||||||||
Expected to vest at September 30, 2021 | 269 | $ | 127.60 | 8.1 | $ | 1,891 |
Year Ended September 30, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Intrinsic value of options exercised | $ | 14,640 | $ | 19,077 | $ | 20,711 | |||||||||||
Cash received from exercise of options | 7,190 | 9,350 | 13,193 | ||||||||||||||
Tax benefit from exercise of options | 2,848 | 3,629 | 4,449 | ||||||||||||||
Fair value of options vested | 3,892 | 3,765 | 4,506 |
Restricted Stock Awards and Units1
|
Weighted Average Grant Date Fair Value | ||||||||||
Nonvested at September 30, 2020 | 257 | $ | 104.83 | ||||||||
Granted2
|
101 | 141.70 | |||||||||
Vested | (117) | 95.82 | |||||||||
Forfeited | (8) | 118.64 | |||||||||
Nonvested at September 30, 2021 | 233 | 126.61 |
Year Ended September 30, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Weighted average grant date fair value | $ | 126.61 | $ | 104.83 | $ | 87.36 | |||||||||||
Total fair value of restricted stock awards and units vested | $ | 11,702 | $ | 7,481 | $ | 11,060 |
Year Ended September 30, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Cost of sales | $ | 2,970 | $ | 2,863 | $ | 2,727 | |||||||||||
Research, development and technical | 1,739 | 2,090 | 2,150 | ||||||||||||||
Selling, general and administrative | 14,969 | 11,443 | 13,350 | ||||||||||||||
Tax benefit | (3,755) | (3,162) | (3,767) | ||||||||||||||
Total share-based compensation expense, net of tax | $ | 15,923 | $ | 13,234 | $ | 14,460 |
Year Ended September 30, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Stock Options | $ | 4,722 | $ | 4,406 | $ | 4,267 | |||||||||||
Restricted stock awards and restricted stock units | 8,754 | 8,259 | 11,400 | ||||||||||||||
Performance share units | 3,662 | 1,957 | 1,279 | ||||||||||||||
ESPP | 2,540 | 1,774 | 1,281 |
September 30, | ||||||||||||||
2021 | 2020 | |||||||||||||
Projected benefit obligation | $ | 12,176 | $ | 11,627 | ||||||||||
Accumulated benefit obligation | 9,006 | 8,680 | ||||||||||||
Pension cost included in Accumulated other comprehensive income (loss), net of tax | (927) | (764) | ||||||||||||
Weighted average discount rate | 1.32 | % | 1.32 | % | ||||||||||
Weighted average rate of increases in future compensation levels | 2.96 | % | 3.01 | % |
Fiscal Year | Amount | |||||||
2022 | $ | 446 | ||||||
2023 | 570 | |||||||
2024 | 568 | |||||||
2025 | 1,077 | |||||||
2026 | 842 | |||||||
2027 to 2031 | 5,190 |
Year Ended September 30, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Domestic | $ | (129,814) | $ | 94,002 | $ | (45,364) | |||||||||||
Foreign | 75,020 | 79,345 | 108,470 | ||||||||||||||
Total | $ | (54,794) | $ | 173,347 | $ | 63,106 |
Year Ended September 30, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
U.S. federal and state: | |||||||||||||||||
Current | $ | 29,712 | $ | 20,733 | $ | 23,461 | |||||||||||
Deferred | (39,609) | (7,048) | (23,182) | ||||||||||||||
Total | (9,897) | 13,685 | 279 | ||||||||||||||
Foreign: | |||||||||||||||||
Current | 25,417 | 21,053 | 27,580 | ||||||||||||||
Deferred | (1,737) | (4,219) | (3,968) | ||||||||||||||
Total | 23,680 | 16,834 | 23,612 | ||||||||||||||
Total U.S. and foreign | $ | 13,783 | $ | 30,519 | $ | 23,891 |
Balance September 30, 2018 | $ | 1,434 | |||
Additions for tax positions relating to the current fiscal year | 271 | ||||
Additions for tax positions relating to prior fiscal years | 9,839 | ||||
Balance September 30, 2019 | 11,544 | ||||
Additions for tax positions relating to the current fiscal year | 4,691 | ||||
Additions for tax positions relating to prior fiscal years | 140 | ||||
Reduction for tax positions relating to prior fiscal years | (1,337) | ||||
Balance September 30, 2020 | 15,038 | ||||
Additions for tax positions relating to the current fiscal year | 5,288 | ||||
Additions for tax positions relating to prior fiscal years | 2,162 | ||||
Reduction for tax positions relating to prior fiscal years | (113) | ||||
Balance September 30, 2021 | $ | 22,375 |
September 30, | |||||||||||
2021 | 2020 | ||||||||||
Deferred tax assets: | |||||||||||
Employee benefits | $ | 7,877 | $ | 8,920 | |||||||
Inventory | 6,469 | 4,657 | |||||||||
Accrued expenses | 3,121 | 2,615 | |||||||||
Share-based compensation expense | 5,686 | 5,709 | |||||||||
Credit and other carryforwards | 9,647 | 5,803 | |||||||||
Lease obligations | 6,858 | — | |||||||||
Interest rate swap | 3,732 | 8,506 | |||||||||
Other | 579 | 1,238 | |||||||||
Valuation allowance | (2,880) | (2,948) | |||||||||
Total deferred tax assets | $ | 41,089 | $ | 34,500 | |||||||
Deferred tax liabilities: | |||||||||||
Depreciation and amortization | $ | 94,425 | $ | 131,237 | |||||||
Lease right-of-use assets | 6,689 | — | |||||||||
Withholding on transition taxes | 4,696 | 4,156 | |||||||||
Other | 3,396 | 3,606 | |||||||||
Total deferred tax liabilities | $ | 109,206 | $ | 138,999 |
Year Ended September 30, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Numerator: | |||||||||||||||||
Net (loss) income available to common shares | $ | (68,577) | $ | 142,828 | $ | 39,215 | |||||||||||
Denominator: | |||||||||||||||||
Weighted average common shares | 29,126 | 29,136 | 28,571 | ||||||||||||||
Weighted average effect of dilutive securities | — | 444 | 523 | ||||||||||||||
Diluted weighted average common shares | 29,126 | 29,580 | 29,094 | ||||||||||||||
(Loss) earnings per share: | |||||||||||||||||
Basic | $ | (2.35) | $ | 4.90 | $ | 1.37 | |||||||||||
Diluted | $ | (2.35) | $ | 4.83 | $ | 1.35 |
Year Ended September 30, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Outstanding stock options | 25 | 102 | 196 |
Year Ended September 30, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Segment Revenue: | |||||||||||||||||
Electronic Materials: | |||||||||||||||||
CMP slurries | $ | 546,959 | $ | 480,617 | $ | 460,053 | |||||||||||
Electronic chemicals | 330,761 | 316,253 | 278,413 | ||||||||||||||
CMP pads | 95,335 | 85,954 | 94,585 | ||||||||||||||
Materials technologies | 11,657 | — | — | ||||||||||||||
Total Electronic Materials | $ | 984,712 | $ | 882,824 | $ | 833,051 | |||||||||||
Performance Materials: | |||||||||||||||||
PIM | $ | 106,810 | $ | 141,503 | $ | 140,553 | |||||||||||
Wood treatment | 73,188 | 62,655 | 31,898 | ||||||||||||||
QED | 35,121 | 29,288 | 32,194 | ||||||||||||||
Total Performance Materials | $ | 215,119 | $ | 233,446 | $ | 204,645 | |||||||||||
Total | $ | 1,199,831 | $ | 1,116,270 | $ | 1,037,696 |
Year Ended September 30, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Capital Expenditures: | |||||||||||||||||
Electronic Materials | $ | 28,272 | $ | 26,536 | $ | 40,166 | |||||||||||
Performance Materials | 4,094 | 84,634 | 16,367 | ||||||||||||||
Corporate | 9,381 | 11,344 | 5,663 | ||||||||||||||
Total | $ | 41,747 | $ | 122,514 | $ | 62,196 |
Year Ended September 30, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Net (loss) income | $ | (68,577) | $ | 142,828 | $ | 39,215 | |||||||||||
Interest expense, net | 38,360 | 41,840 | 43,335 | ||||||||||||||
Income taxes | 13,783 | 30,519 | 23,891 | ||||||||||||||
Depreciation and amortization | 132,170 | 127,737 | 98,592 | ||||||||||||||
EBITDA | 115,736 | 342,924 | 205,033 | ||||||||||||||
Impairment charges | 230,392 | 2,314 | 67,372 | ||||||||||||||
Acquisition and integration-related expense | 10,115 | 10,852 | 34,709 | ||||||||||||||
Environmental accrual | 2,508 | — | — | ||||||||||||||
Costs related to KMG-Bernuth warehouse fire, net of insurance recovery | (1,050) | 1,083 | 9,905 | ||||||||||||||
Costs related to the Pandemic, net of grants received | 489 | 849 | — | ||||||||||||||
Charge for fair value write-up of acquired inventory sold | — | — | 14,869 | ||||||||||||||
Net costs related to restructuring of the wood treatment business | 123 | (221) | 1,530 | ||||||||||||||
Consolidated adjusted EBITDA | $ | 358,313 | $ | 357,801 | $ | 333,418 | |||||||||||
Segment adjusted EBITDA: | |||||||||||||||||
Electronic Materials | $ | 323,827 | $ | 299,037 | $ | 294,902 | |||||||||||
Performance Materials | 87,961 | 106,797 | 91,372 | ||||||||||||||
Unallocated corporate expenses | (53,475) | (48,033) | (52,856) | ||||||||||||||
Consolidated adjusted EBITDA | $ | 358,313 | $ | 357,801 | $ | 333,418 |
Year Ended September 30, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Revenue: | |||||||||||||||||
North America | $ | 405,426 | $ | 399,993 | $ | 372,247 | |||||||||||
Asia | 631,904 | 546,866 | 515,833 | ||||||||||||||
Europe, Middle East, and Africa | 161,861 | 169,099 | 149,305 | ||||||||||||||
South America | 640 | 312 | 311 | ||||||||||||||
Total | $ | 1,199,831 | $ | 1,116,270 | $ | 1,037,696 | |||||||||||
Property, plant and equipment, net1:
|
|||||||||||||||||
North America | $ | 246,413 | $ | 250,895 | $ | 133,682 | |||||||||||
Asia | 63,242 | 66,872 | 68,823 | ||||||||||||||
Europe | 45,116 | 44,300 | 74,313 | ||||||||||||||
Total | $ | 354,771 | $ | 362,067 | $ | 276,818 |
Year Ended September 30, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Revenue: | |||||||||||||||||
China | $ | 157,876 | $ | 113,570 | * | ||||||||||||
South Korea | 143,737 | 127,972 | 135,844 | ||||||||||||||
Taiwan | 138,852 | 133,059 | 125,895 |
Allowance For Credit Losses | Balance At Beginning of Year | Amount of Charge (Benefit) To Expenses | Deductions and Adjustments | Balance At End of Year | |||||||||||||||||||
Year ended: | |||||||||||||||||||||||
September 30, 2021 | $ | 583 | $ | 76 | $ | (132) | $ | 527 | |||||||||||||||
September 30, 2020 | 2,377 | (1,122) | (672) | 583 | |||||||||||||||||||
September 30, 2019 | 1,900 | 432 | 45 | 2,377 |
Valuation Allowance | Balance At Beginning of Year | Amounts Charged To Expenses | Deductions and Adjustments | Balance At End of Year | |||||||||||||||||||
Year ended: | |||||||||||||||||||||||
September 30, 2021 | $ | 2,948 | $ | 472 | $ | (540) | $ | 2,880 | |||||||||||||||
September 30, 2020 | 2,565 | 658 | (275) | 2,948 | |||||||||||||||||||
September 30, 2019 | 133 | 2,432 | — | 2,565 |
Plan category | (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights | (b) Weighted-average exercise price of outstanding options, warrants and rights | (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||||||||||
Equity compensation plans approved by security holders (1) | 1,010,486 | (2) | $ | 89.61 | (2) | 2,361,281 | (3) | |||||||||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||||||||||
Total | 1,010,486 | (2) | $ | 89.61 | (2) | 2,361,281 | (3) |
1. | Financial Statements: | ||||
Report of Independent Registered Public Accounting Firm | |||||
Consolidated Statements of (Loss) Income for the years ended September 30, 2021, 2020 and 2019
|
|||||
Consolidated Statements of Comprehensive (Loss) Income for the years ended September 30, 2021, 2020 and 2019
|
|||||
Consolidated Balance Sheets at September 30, 2021 and 2020
|
|||||
Consolidated Statements of Cash Flows for the years ended September 30, 2021, 2020 and 2019
|
|||||
Consolidated Statements of Changes in Stockholders’ Equity for the years ended September 30, 2021, 2020 and 2019
|
|||||
Notes to the Consolidated Financial Statements | |||||
2. |
Financial Statement Schedule: Schedule II – Valuation and Qualifying Accounts for the years ended September 30, 2021, 2020 and 2019
|
||||
3. | Exhibits - The following exhibits are filed as part of, or incorporated by reference into, this Report on Form 10-K: |
Exhibit No. | Description | Filed as an exhibit to, and incorporated by reference from | ||||||||||||||||||||||||
Form | File No. | Filing Date | ||||||||||||||||||||||||
2.1 | 8-K | 000-30205 | August 17, 2018 | |||||||||||||||||||||||
3.2 | 8-K | 000-30205 | October 1, 2020 | |||||||||||||||||||||||
3.3 | 8-K | 000-30205 | October 1, 2020 | |||||||||||||||||||||||
4.1 | 10-K | 000-30205 | November 17, 2020 | |||||||||||||||||||||||
4.2 | 10-K | 000-30205 | November 17, 2020 | |||||||||||||||||||||||
10.1 | 10-K | 000-30205 | November 17, 2020 | |||||||||||||||||||||||
10.2 | 10-K | 000-30205 | November 25, 2008 | |||||||||||||||||||||||
10.3 | 10-Q | 000-30205 | May 6, 2021 | |||||||||||||||||||||||
10.4 | ||||||||||||||||||||||||||
10.5 | 10-K | 000-30205 | November 25, 2008 | |||||||||||||||||||||||
10.6 | 10-K | 000-30205 | November 17, 2020 | |||||||||||||||||||||||
10.7 | 10-K | 000-30205 | November 25, 2008 | |||||||||||||||||||||||
10.8 | 10-K | 000-30205 | November 17, 2020 |
10.9 | 10-Q | 000-30205 | February 8, 2013 | |||||||||||||||||||||||
10.10 | 10-Q | 000-30205 | August 8, 2012 | |||||||||||||||||||||||
10.11 | 10-Q | 000-30205 | February 8, 2016 | |||||||||||||||||||||||
10.12 | 10-Q | 000-30205 | February 7, 2018 | |||||||||||||||||||||||
10.13 | 10-Q | 000-30205 | February 7, 2018 | |||||||||||||||||||||||
10.14 | 10-Q | 000-30205 | February 7, 2018 | |||||||||||||||||||||||
10.15 | ||||||||||||||||||||||||||
10.16 | 10-Q | 000-30205 | May 6, 2021 | |||||||||||||||||||||||
10.17 | 10-Q | 000-30205 | May 6, 2021 | |||||||||||||||||||||||
10.18 | 10-Q | 000-30205 | August 5, 2021 | |||||||||||||||||||||||
10.19 | ||||||||||||||||||||||||||
10.20 | 10-Q | 000-30205 | February 6, 2015 | |||||||||||||||||||||||
10.21 | ||||||||||||||||||||||||||
10.22 | 10-Q | 000-30205 | February 4, 2021 | |||||||||||||||||||||||
10.23 | 8-K | 000-30205 | December 24, 2019 | |||||||||||||||||||||||
10.24 | 8-K | 000-30205 | July 6, 2021 | |||||||||||||||||||||||
21.1 | ||||||||||||||||||||||||||
23.1 | ||||||||||||||||||||||||||
24.1 | ||||||||||||||||||||||||||
31.1 | ||||||||||||||||||||||||||
31.2 |
CMC MATERIALS, INC. | ||||||||
Date: November 12, 2021 | /s/ DAVID H. LI | |||||||
David H. Li
President and Chief Executive Officer [Principal Executive Officer] |
||||||||
Date: November 12, 2021 | /s/ SCOTT D BEAMER | |||||||
Scott D. Beamer
Vice President and Chief Financial Officer [Principal Financial Officer] |
||||||||
Date: November 12, 2021 | /s/ JEANETTE A. PRESS | |||||||
Jeanette A. Press
Corporate Controller [Principal Accounting Officer] |
||||||||
Date: November 12, 2021 | /s/ WILLIAM P. NOGLOWS* | |||||||
William P. Noglows
Chairman of the Board [Director] |
||||||||
Date: November 12, 2021 | /s/ DAVID H. LI | |||||||
David H. Li
President and Chief Executive Officer [Director] |
||||||||
Date: November 12, 2021 | /s/ RICHARD S. HILL* | |||||||
Richard S. Hill
[Director] |
||||||||
Date: November 12, 2021 | /s/ BARBARA A. KLEIN* | |||||||
Barbara A. Klein
[Director] |
||||||||
Date: November 12, 2021 | /s/ PAUL J. REILLY* | |||||||
Paul J. Reilly
[Director] |
||||||||
Date: November 12, 2021 | /s/ ANNE K. ROBY* | |||||||
Anne K. Roby
[Director] |
||||||||
Date: November 12, 2021 | /s/ SUSAN M. WHITNEY* | |||||||
Susan M. Whitney
[Director] |
||||||||
Date: November 12, 2021 | /s/ GEOFFREY WILD* | |||||||
Geoffrey Wild
[Director] |
PARTICIPANT | CMC MATERIALS, INC. | |||||||
___________________________ | By: _________________________________________ | |||||||
Title: ________________________ |
Participant Name/
ID Number
|
Type of Award | Number of Shares of Restricted Stock Awarded | Fair Market Value of Shares of Restricted Stock on Award Date | ||||||||
[Name]
[xxx-xx-xxxx]
|
Restricted Stock
|
_[calculated from Elected Bonus Amount and FMV]_ Deposit Shares
_[50% of D.S.]_ Award Shares
|
$[FMV/closing price on 12/y/2[z]
|
||||||||
Award Date | Dates Restrictions on Shares Lapse | Award Number | |||||||||
December [y], 202[z]
|
Deposit Shares:
December [y], 202[z]
Award Shares:
December [y], 202[z+3]
|
[xxxxx]
|
CMC MATERIALS, INC. | |||||
[signature] | |||||
[name] | |||||
President and Chief Executive Officer |
PARTICIPANT
|
Type of Award
|
Number of Shares of Restricted Stock Awarded
|
Fair Market Value of Restricted Shares on Award Date
|
Participant ID Number
|
||||||||||
[Name]
|
Restricted Stock |
_[calculated from Elected Bonus Amount and FMV]_ Deposit Shares
_[50% of D.S.]_ Award Shares
|
[FMV on 12/[y]/[z]] | |||||||||||
Award Date | Dates Restrictions on Shares Lapse | Award Number | ||||||||||||
December[y], 202[z] |
Deposit Shares:
December [y], 202[z]
Award Shares:
December [y], 202[z+3]
|
Print Name: ________________________________ | |||||
Sign Name: ________________________________ | |||||
Dated: ____________________________________ |
Subsidiaries | Location | |||||||||||||
CMC Materials Global Corporation | Delaware, U.S. | |||||||||||||
NexPlanar Corporation | Delaware, U.S. | |||||||||||||
QED Technologies International, Inc. | Delaware, U.S. | |||||||||||||
CMC Materials Japan KK | Japan | |||||||||||||
CMC Materials KK | Japan | |||||||||||||
CMC Materials B.V. | Netherlands | |||||||||||||
CMC Materials Asia Pte. Ltd. | Singapore | |||||||||||||
CMC Materials Korea, LLC | South Korea | |||||||||||||
CMC Materials Taiwan Co., Ltd. | Taiwan | |||||||||||||
Shanghai Cabot Microelectronics Co. Ltd. | China | |||||||||||||
CMC Materials KMG Corporation | Texas, U.S. | |||||||||||||
KMG-Bernuth, Inc. | Delaware, U.S. | |||||||||||||
KMG de Mexico SA de CV | Mexico | |||||||||||||
CMC Materials EC, Inc. | Texas, U.S. | |||||||||||||
CMC Materials Italia SrL | Italy | |||||||||||||
CMC Materials Luxembourg Holdings S.a.r.l. | Luxembourg | |||||||||||||
CMC Materials France SAS | France | |||||||||||||
CMC Materials UPC SAS | France | |||||||||||||
CMC Materials EC Pte. Ltd. | Singapore | |||||||||||||
CMC Materials Singapore Pte. Ltd. | Singapore | |||||||||||||
CMC Materials SDN BHD | Malaysia | |||||||||||||
CMC Materials UK Limited | United Kingdom | |||||||||||||
CMC Materials UPC Limited | United Kingdom | |||||||||||||
CMC Materials Sealweld Canada, Inc. | British Columbia, Canada | |||||||||||||
KMG Val-Tex, LLC | Texas, U.S. | |||||||||||||
Sealweld Corporation (2003), Inc. | Nevada, U.S. | |||||||||||||
Sealweld (USA), Inc. | Texas, U.S. | |||||||||||||
KMG-Flowchem, Inc. | Delaware, U.S. | |||||||||||||
Flowchem LLC | Delaware, U.S. | |||||||||||||
FLX Inc. | Texas, U.S. | |||||||||||||
International Test Solutions, LLC | Delaware, U.S. | |||||||||||||
International Test Solutions Korea Limited | South Korea | |||||||||||||
International Development Test Co., Ltd. | Taiwan | |||||||||||||
Suzhou Meice Test Technology Co., Ltd. | China |
SIGNATURE | TITLE | Date | ||||||||||||
/s/ William P. Noglows | Chairman of the Board | November 12, 2021 | ||||||||||||
William P. Noglows | ||||||||||||||
/s/ David H. Li | President and Chief | November 12, 2021 | ||||||||||||
David H. Li | Executive Officer | |||||||||||||
/s/ Richard S. Hill | Director | November 12, 2021 | ||||||||||||
Richard S. Hill | ||||||||||||||
/s/ Barbara A. Klein | Director | November 12, 2021 | ||||||||||||
Barbara A. Klein | ||||||||||||||
/s/ Paul J. Reilly | Director | November 12, 2021 | ||||||||||||
Paul J. Reilly | ||||||||||||||
/s/ Anne K. Roby | Director | November 12, 2021 | ||||||||||||
Anne K. Roby | ||||||||||||||
/s/ Susan M. Whitney | Director | November 12, 2021 | ||||||||||||
Susan M. Whitney | ||||||||||||||
/s/ Geoffrey Wild | Director | November 12, 2021 | ||||||||||||
Geoffrey Wild |
Date: November 12, 2021 | /s/ DAVID H. LI | |||||||
David H. Li
Chief Executive Officer |
Date: November 12, 2021 | /s/ SCOTT D. BEAMER | |||||||
Scott D. Beamer
Chief Financial Officer |
Date: November 12, 2021 | /s/ DAVID H. LI | |||||||
David H. Li
Chief Executive Officer |
||||||||
Date: November 12, 2021 | /s/ SCOTT D. BEAMER | |||||||
Scott D. Beamer
Chief Financial Officer |