Total revenue during the fourth fiscal quarter was $96.5 million, which represents an increase of 7.1 percent compared to the same quarter last year and an increase of 11.6 percent compared to the prior quarter, on continued strong demand for the company's products, particularly from manufacturers of logic devices. The company achieved a gross profit margin of 48.4 percent of revenue in the fourth fiscal quarter, diluted earnings per share of $0.52, which represents a record when compared to historical results adjusted to include share-based compensation expense, and cash flow from operations of $28.5 million. For the full fiscal year, total revenue was $291.4 million, gross profit margin was 44.1 percent, diluted earnings per share were $0.48 and cash flow from operations was $44.7 million. The company's balance sheet reflects a cash balance of $200.0 million and no debt outstanding as of September 30, 2009.

"We are pleased to end this challenging fiscal year with such strong quarterly results. In addition, we are encouraged by the progress we have made this year on our strategic initiatives, which from our perspective positions us well to emerge from the economic downturn with stronger competitive standing within our core CMP consumables business. Despite the adverse operating environment in fiscal 2009, we increased our CMP pad revenue by 17 percent, strengthened our CMP slurry business with the acquisition of Epoch, and achieved over $12 million in operating expense savings, without compromising our operations, quality or intellectual capital," said William Noglows, Chairman and CEO of Cabot Microelectronics. "Our flexible business model, solid balance sheet, and experienced management team enabled us to successfully manage our business during the significant decline in demand for our products in the first half of our fiscal year, as well as through the extraordinary growth we experienced in the second half of the year."

Mr. Noglows continued, "In fiscal 2010, we plan to continue to execute on our primary strategy to strengthen and grow our core CMP consumables business by leveraging our CMP expertise and global infrastructure to better serve our customers. While we remain cautious regarding near term industry demand given the current mixed economic signals and our limited visibility, we are optimistic about the long-term growth prospects for our company, as electronics become more and more integral to daily life on a global basis."

Key Financial Information

Total fourth fiscal quarter revenue of $96.5 million represents a 7.1 percent increase from the $90.2 million reported in the same quarter last year and an 11.6 percent increase from $86.4 million in the prior quarter. The increase in revenue from the same quarter last year primarily reflects contributions from the company's acquisition of Epoch in February 2009. Excluding the revenue contribution from Epoch, the company's quarterly sales were approximately even with the same period last year. Compared to the prior quarter, revenue increased across all business areas, led by sales to manufacturers of logic devices.

Total revenue for the full fiscal year was $291.4 million, which represents a 22.3 percent decrease from fiscal year 2008. Despite the adverse impact of the global recession on the company's slurry products for semiconductor applications and its engineered surface finishes (ESF) business, revenue for the company's CMP polishing pads, as well as its slurry products for data storage applications increased from the prior year.

Gross profit, expressed as a percentage of revenue, was 48.4 percent this quarter, compared to 46.6 percent in both the same quarter a year ago and in the prior quarter. Compared to the year ago quarter, gross profit percentage increased primarily due to increased utilization of the company's manufacturing capacity, improved manufacturing yields and lower logistics costs, partially offset by a lower valued product mix. The increase in gross profit percentage versus the third fiscal quarter was primarily due to increased utilization of the company's manufacturing capacity.

Gross profit for the full fiscal year was 44.1 percent of revenue, compared to 46.5 percent of revenue in fiscal 2008. The decrease in gross profit percentage was primarily due to decreased utilization of the company's manufacturing capacity, as a result of the impact of the severe economic downturn in the first half of the year.

Operating expenses, which include research, development and technical, selling and marketing, and general and administrative expenses, were $28.0 million in the fourth fiscal quarter, representing a $3.8 million, or 11.8 percent, decrease from $31.7 million in the same quarter a year ago. The decrease was primarily driven by lower staffing related costs, decreased professional fees, which include costs to enforce the company's intellectual property, and lower travel expenses. These cost savings were partially offset by incremental costs related to Epoch. Operating expenses were $2.9 million higher than the $25.1 million reported in the previous quarter, mostly due to higher staffing related costs, professional fees and expenses for clean room materials.

For the full year, total operating expenses were $112.4 million, which represents a $12.6 million, or 10.1 percent, decrease from the $125.0 million reported in fiscal 2008, as the company implemented focused cost reduction initiatives. The decrease was driven primarily by lower staffing related costs, professional fees and travel expenses.