Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2016 | Oct. 31, 2016 | Mar. 31, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | CABOT MICROELECTRONICS CORP | ||
Entity Central Index Key | 1,102,934 | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 955,537,100 | ||
Entity Common Stock, Shares Outstanding | 24,617,841 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Sep. 30, 2016 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
CONSOLIDATED STATEMENTS OF INCOME [Abstract] | |||||||||||
Revenue | $ 122,684 | $ 108,152 | $ 99,244 | $ 100,369 | $ 100,137 | $ 97,168 | $ 104,858 | $ 111,934 | $ 430,449 | $ 414,097 | $ 424,666 |
Cost of goods sold | 61,598 | 56,127 | 52,348 | 50,174 | 48,115 | 48,609 | 50,182 | 54,960 | 220,247 | 201,866 | 221,573 |
Gross profit | 61,086 | 52,025 | 46,896 | 50,195 | 52,022 | 48,559 | 54,676 | 56,974 | 210,202 | 212,231 | 203,093 |
Operating expenses: | |||||||||||
Research, development and technical | 15,842 | 12,928 | 14,934 | 14,828 | 14,856 | 14,773 | 15,131 | 15,018 | 58,532 | 59,778 | 59,354 |
Selling and marketing | 8,057 | 6,243 | 6,668 | 6,749 | 5,763 | 5,804 | 5,777 | 7,639 | 27,717 | 24,983 | 26,513 |
General and administrative | 11,454 | 10,738 | 12,990 | 14,263 | 13,553 | 12,830 | 14,296 | 11,751 | 49,445 | 52,430 | 45,418 |
Total operating expenses | 35,353 | 29,909 | 34,592 | 35,840 | 34,172 | 33,407 | 35,204 | 34,408 | 135,694 | 137,191 | 131,285 |
Operating income | 25,733 | 22,116 | 12,304 | 14,355 | 17,850 | 15,152 | 19,472 | 22,566 | 74,508 | 75,040 | 71,808 |
Interest expense | 1,187 | 1,178 | 1,191 | 1,167 | 1,494 | 1,065 | 1,059 | 906 | 4,723 | 4,524 | 3,354 |
Total other income, net | 257 | (246) | 452 | 190 | 116 | (160) | (332) | 1,057 | 653 | 681 | 140 |
Income before income taxes | 24,803 | 20,692 | 11,565 | 13,378 | 16,472 | 13,927 | 18,081 | 22,717 | 70,438 | 71,197 | 68,594 |
Provision for income taxes | 4,096 | 1,990 | 2,434 | 2,069 | 3,939 | 4,041 | 4,270 | 2,801 | 10,589 | 15,051 | 17,843 |
Net income | $ 20,707 | $ 18,702 | $ 9,131 | $ 11,309 | $ 12,533 | $ 9,886 | $ 13,811 | $ 19,916 | $ 59,849 | $ 56,146 | $ 50,751 |
Basic earnings per share (in dollars per share) | $ 0.85 | $ 0.78 | $ 0.38 | $ 0.46 | $ 0.51 | $ 0.40 | $ 0.57 | $ 0.83 | $ 2.47 | $ 2.32 | $ 2.12 |
Weighted-average basic shares outstanding (in shares) | 24,234,000 | 23,929,000 | 24,061,000 | 24,142,000 | 24,144,000 | 24,333,000 | 24,057,000 | 23,651,000 | 24,076,549 | 24,039,692 | 23,704,024 |
Diluted earnings per share (in dollars per share) | $ 0.83 | $ 0.76 | $ 0.37 | $ 0.46 | $ 0.50 | $ 0.39 | $ 0.55 | $ 0.80 | $ 2.43 | $ 2.26 | $ 2.04 |
Weighted-average diluted shares outstanding (in shares) | 24,678,000 | 24,325,000 | 24,408,000 | 24,549,000 | 24,583,000 | 24,813,000 | 24,693,000 | 24,486,000 | 24,476,993 | 24,631,815 | 24,610,908 |
Dividends per share (in dollars per share) | $ 0.18 | $ 0.18 | $ 0.18 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0.54 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | |||
Net income | $ 59,849 | $ 56,146 | $ 50,751 |
Other comprehensive income (loss), net of tax | |||
Foreign currency translation adjustments, net of tax | 15,996 | (14,126) | (8,136) |
Minimum pension liability adjustment | (434) | (318) | (196) |
Net unrealized loss on cash flow hedges | 84 | (901) | 0 |
Unrealized gain on investments | 0 | 0 | 151 |
Other comprehensive income (loss), net of tax | 15,646 | (15,345) | (8,181) |
Comprehensive income | $ 75,495 | $ 40,801 | $ 42,570 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 30, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 287,479 | $ 354,190 |
Accounts receivable, less allowance for doubtful accounts of $1,828 at September 30, 2016, and $1,224 at September 30, 2015 | 62,830 | 49,405 |
Inventories | 72,123 | 70,678 |
Prepaid expenses and other current assets | 14,659 | 12,840 |
Deferred income taxes | 0 | 7,395 |
Total current assets | 437,091 | 494,508 |
Property, plant and equipment, net | 106,496 | 93,743 |
Goodwill | 100,639 | 40,442 |
Other intangible assets, net | 50,476 | 4,565 |
Deferred income taxes | 20,747 | 12,212 |
Other long-term assets | 12,477 | 15,004 |
Total assets | 727,926 | 660,474 |
Current liabilities: | ||
Accounts payable | 16,834 | 15,448 |
Current portion of long-term debt | 7,656 | 8,750 |
Accrued expenses, income taxes payable and other current liabilities | 41,395 | 36,446 |
Total current liabilities | 65,885 | 60,644 |
Long-term debt, net of current portion | 147,657 | 155,313 |
Deferred income taxes | 75 | 76 |
Other long-term liabilities | 16,661 | 15,477 |
Total liabilities | 230,278 | 231,510 |
Commitments and contingencies (Note 18) | ||
Stockholders' equity: | ||
Common Stock: Authorized: 200,000,000 shares, $0.001 par value; Issued: 34,261,304 shares at September 30, 2016, and 33,489,181 shares at September 30, 2015 | 34 | 33 |
Capital in excess of par value of common stock | 530,840 | 495,673 |
Retained earnings | 330,776 | 284,088 |
Accumulated other comprehensive income (loss) | 9,556 | (6,090) |
Treasury stock at cost, 9,744,642 shares at September 30, 2016, and 9,041,678 shares at September 30, 2015 | (373,558) | (344,740) |
Total stockholders' equity | 497,648 | 428,964 |
Total liabilities and stockholders' equity | $ 727,926 | $ 660,474 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 30, 2015 |
Current assets: | ||
Allowance for doubtful accounts | $ 1,828 | $ 1,224 |
Stockholders' equity: | ||
Common stock: Authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock: par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock: Issued (in shares) | 34,261,304 | 33,489,181 |
Treasury stock at cost (in shares) | 9,744,642 | 9,041,678 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | |||
Net income | $ 59,849 | $ 56,146 | $ 50,751 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 26,031 | 18,719 | 19,941 |
Provision for doubtful accounts | 588 | (84) | (170) |
Share-based compensation expense | 13,787 | 16,445 | 14,042 |
Deferred income tax expense (benefit) | (1,757) | 869 | (700) |
Non-cash foreign exchange (gain)/loss | (1,144) | 1,391 | 943 |
(Gain)/Loss on disposal of property, plant and equipment | 103 | (28) | (51) |
Impairment of assets | 1,079 | 0 | 2,320 |
Other | 815 | (524) | (724) |
Changes in operating assets and liabilities, excluding amounts related to acquisition: | |||
Accounts receivable | (8,017) | 9,013 | (8,181) |
Inventories | 3,351 | (8,290) | (3,794) |
Prepaid expenses and other assets | 3,935 | (3,662) | 576 |
Accounts payable | (478) | 801 | (850) |
Accrued expenses, income taxes payable and other liabilities | (2,931) | 7,390 | (6,625) |
Net cash provided by operating activities | 95,211 | 98,186 | 67,478 |
Cash flows from investing activities: | |||
Additions to property, plant and equipment | (17,670) | (13,812) | (12,551) |
Proceeds from the sale of property, plant and equipment | 17 | 201 | 202 |
Proceeds from the sale of investments | 200 | 202 | 2,305 |
Other investing activities | 0 | 0 | 1,062 |
Acquisition of business, net of cash acquired | (126,976) | 0 | 0 |
Net cash used in investing activities | (144,429) | (13,409) | (8,982) |
Cash flows from financing activities: | |||
Issuance of long-term debt | 0 | 0 | 17,500 |
Repayment of long-term debt | (8,750) | (8,750) | (6,562) |
Repurchases of common stock | (28,818) | (42,247) | (55,072) |
Net proceeds from issuance of stock | 19,512 | 35,782 | 43,070 |
Debt issuance costs | 0 | 0 | (550) |
Dividends paid | (8,658) | 0 | 0 |
Tax benefits associated with share-based compensation expense | 2,305 | 6,207 | 2,806 |
Net cash provided by (used in) financing activities | (24,409) | (9,008) | 1,192 |
Effect of exchange rate changes on cash | 6,916 | (5,734) | (1,562) |
Increase (decrease) in cash | (66,711) | 70,035 | 58,126 |
Cash and cash equivalents at beginning of year | 354,190 | 284,155 | 226,029 |
Cash and cash equivalents at end of year | 287,479 | 354,190 | 284,155 |
Supplemental disclosure of cash flow information: | |||
Cash paid for income taxes | 7,246 | 8,543 | 18,041 |
Cash paid for interest | 4,307 | 4,107 | 3,355 |
Supplemental disclosure of non-cash investing and financing activities: | |||
Purchases of property, plant and equipment in accrued liabilities and accounts payable at the end of period | $ 1,005 | $ 1,503 | $ 1,267 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY - USD ($) $ in Thousands | Total | Common Stock [Member] | Capital in Excess Of Par [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income [Member] | Treasury Stock [Member] |
Balance, beginning of period at Sep. 30, 2013 | $ 323,442 | $ 30 | $ 376,206 | $ 177,191 | $ 17,436 | $ (247,421) |
Share-based compensation expense | 14,042 | 14,042 | ||||
Repurchases of common stock under share repurchase plans, at cost | (53,000) | (53,000) | ||||
Repurchases of common stock - other, at cost | (2,072) | (2,072) | ||||
Exercise of stock options | 40,248 | 2 | 40,246 | |||
Issuance of Cabot Microelectronics restricted stock under Deposit Share Plan | 210 | 210 | ||||
Issuance of Cabot Microelectronics stock under Employee Stock Purchase Plan | 2,612 | 2,612 | ||||
Tax benefits from share-based compensation plans | 3,950 | 3,950 | ||||
Net income | 50,751 | 50,751 | ||||
Net unrealized gain on marketable securities | 151 | 151 | ||||
Foreign currency translation adjustment, net of tax of $(1,597) | (8,136) | (8,136) | ||||
Minimum pension liability adjustment | (196) | (196) | ||||
Balance, end of period at Sep. 30, 2014 | 372,002 | 32 | 437,266 | 227,942 | 9,255 | (302,493) |
Share-based compensation expense | 16,445 | 16,445 | ||||
Repurchases of common stock under share repurchase plans, at cost | (40,026) | (40,026) | ||||
Repurchases of common stock - other, at cost | (2,221) | (2,221) | ||||
Exercise of stock options | 33,176 | 1 | 33,175 | |||
Issuance of Cabot Microelectronics restricted stock under Deposit Share Plan | 23 | 23 | ||||
Issuance of Cabot Microelectronics stock under Employee Stock Purchase Plan | 2,583 | 2,583 | ||||
Tax benefits from share-based compensation plans | 6,181 | 6,181 | ||||
Net income | 56,146 | 56,146 | ||||
Net unrealized gain on marketable securities | 0 | |||||
Foreign currency translation adjustment, net of tax of $(1,597) | (14,126) | (14,126) | ||||
Interest rate swaps | (901) | (901) | ||||
Minimum pension liability adjustment | (318) | (318) | ||||
Balance, end of period at Sep. 30, 2015 | 428,964 | 33 | 495,673 | 284,088 | (6,090) | (344,740) |
Share-based compensation expense | 13,787 | 13,787 | ||||
Repurchases of common stock under share repurchase plans, at cost | (25,980) | (25,980) | ||||
Repurchases of common stock - other, at cost | (2,838) | (2,838) | ||||
Exercise of stock options | 16,624 | 1 | 16,623 | |||
Issuance of Cabot Microelectronics restricted stock under Deposit Share Plan | 52 | 52 | ||||
Issuance of Cabot Microelectronics stock under Employee Stock Purchase Plan | 2,837 | 2,837 | ||||
Tax benefits from share-based compensation plans | 1,868 | 1,868 | ||||
Net income | 59,849 | 59,849 | ||||
Net unrealized gain on marketable securities | 0 | |||||
Foreign currency translation adjustment, net of tax of $(1,597) | 15,996 | 15,996 | ||||
Interest rate swaps | 84 | 84 | ||||
Minimum pension liability adjustment | (434) | (434) | ||||
Dividends paid | (13,161) | (13,161) | ||||
Balance, end of period at Sep. 30, 2016 | $ 497,648 | $ 34 | $ 530,840 | $ 330,776 | $ 9,556 | $ (373,558) |
BACKGROUND AND BASIS OF PRESENT
BACKGROUND AND BASIS OF PRESENTATION | 12 Months Ended |
Sep. 30, 2016 | |
BACKGROUND AND BASIS OF PRESENTATION [Abstract] | |
BACKGROUND AND BASIS OF PRESENTATION | 1. BACKGROUND AND BASIS OF PRESENTATION Cabot Microelectronics Corporation ("Cabot Microelectronics'', "the Company'', "us'', "we'', or "our'') supplies high-performance polishing slurries and pads used in the manufacture of advanced integrated circuit (IC) devices within the semiconductor industry, in a process called chemical mechanical planarization (CMP). CMP polishes surfaces at an atomic level, thereby helping to enable IC device manufacturers to produce smaller, faster and more complex IC devices with fewer defects. We develop, produce and sell CMP slurries for polishing many of the conducting and insulating materials used in IC devices, and also for polishing the disk substrates and magnetic heads used in hard disk drives. We develop, manufacture and sell CMP polishing pads, which are used in conjunction with slurries in the CMP process. We also develop and provide products for demanding surface modification applications in other industries through our Engineered Surface Finishes (ESF) business. The audited consolidated financial statements have been prepared by us pursuant to the rules of the Securities and Exchange Commission (SEC) and accounting principles generally accepted in the United States of America. We operate predominantly in one reportable segment - the development, manufacture, and sale of CMP consumables. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of Cabot Microelectronics and its subsidiaries. All intercompany transactions and balances between the companies have been eliminated as of September 30, 2016. USE OF ESTIMATES The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the amounts reported in the consolidated financial statements and accompanying notes. The accounting estimates that require management's most difficult and subjective judgments include, but are not limited to, those estimates related to bad debt expense, inventory valuation, valuation and classification of auction rate securities, impairment of long-lived assets and investments, business combinations, goodwill, other intangible assets, interest rate swaps, share-based compensation, income taxes and contingencies. We base our estimates on historical experience, current conditions and on various other assumptions that we believe are reasonable under the circumstances. However, future events are subject to change and estimates and judgments routinely require adjustment. Actual results may differ from these estimates under different assumptions or conditions. CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS We consider investments in all highly liquid financial instruments with original maturities of three months or less to be cash equivalents. Short-term investments include securities generally having maturities of 90 days to one year. We did not own any securities that were considered short-term as of September 30, 2016 or 2015. . See Note 4 for a more detailed discussion of other financial instruments. ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS Trade accounts receivable are recorded at the invoiced amount and do not bear interest. We maintain an allowance for doubtful accounts for estimated losses resulting from the potential inability of our customers to make required payments. Our allowance for doubtful accounts is based on historical collection experience, adjusted for any specific known conditions or circumstances such as customer bankruptcies and increased risk due to economic conditions. Uncollectible account balances are charged against the allowance when we believe that it is probable that the receivable will not be recovered. In the fourth quarter of fiscal 2016, we recorded $514 in bad debt expense for a customer in Europe that was placed into receivership. Accounts receivable, net of allowances for doubtful accounts, were $62,830 as of September 30, 2016 and $49,405 as of September 30, 2015. The increase in accounts receivable was primarily due to the Balance as of September 30, 2015 $ 1,224 Amounts charged to expense 588 Deductions and adjustments 16 Balance as of September 30, 2016 $ 1,828 CONCENTRATION OF CREDIT RISK Financial instruments that subject us to concentrations of credit risk consist principally of accounts receivable. We perform ongoing credit evaluations of our customers' financial conditions and generally do not require collateral to secure accounts receivable. Our exposure to credit risk associated with nonpayment is affected principally by conditions or occurrences within the semiconductor industry and global economy. With the exception of one customer bankruptcy in fiscal 2012 and the customer placed into receivership in fiscal 2016, we have not experienced significant losses relating to accounts receivable from individual customers or groups of customers. Customers who represented more than 10% of revenue are as follows: Year Ended September 30, 2016 2015 2014 Taiwan Semiconductor Manufacturing Co. (TSMC) 15% 18% 22% Samsung Group (Samsung) 15% 15% 14% TSMC accounted for 12.9% and 12.6% of net accounts receivable at September 30, 2016 and 2015, respectively. Samsung accounted for 8.3% and 9.7% of net accounts receivable at September 30, 2016 and 2015, respectively. FAIR VALUES OF FINANCIAL INSTRUMENTS The recorded amounts of cash, accounts receivable, and accounts payable approximate their fair values due to their short-term, highly liquid characteristics. See Note 4 for a more detailed discussion of the fair value of financial instruments. INVENTORIES Inventories are stated at the lower of cost, determined on the first-in, first-out (FIFO) basis, or market. Finished goods and work in process inventories include material, labor and manufacturing overhead costs. We regularly review and write down the value of inventory as required for estimated obsolescence or lack of marketability. An inventory reserve is maintained based upon a historical percentage of actual inventories written off and applied against inventory value at the end of the period, adjusted for known conditions and circumstances. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are recorded at cost. Depreciation is based on the following estimated useful lives of the assets using the straight-line method: Buildings 15-25 years Machinery and equipment 3-10 years Furniture and fixtures 5-10 years Information systems 3-5 years Expenditures for repairs and maintenance are charged to expense as incurred. Expenditures for major renewals and betterments are capitalized and depreciated over the remaining useful lives. As assets are retired or sold, the related cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations. We capitalize the costs related to the design and development of software used for internal purposes; however, these costs are not material. IMPAIRMENT OF LONG-LIVED ASSETS Reviews are regularly performed to determine whether facts and circumstances exist that indicate the carrying amount of assets may not be recoverable or the useful life is shorter than originally estimated. Asset recoverability assessment begins by comparing the projected undiscounted cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. If assets are determined to be recoverable, but their useful lives are shorter than originally estimated, the net book value of the asset is depreciated over the newly determined remaining useful life. See Note 6 for more information regarding impairment expense recorded in fiscal years 2016, 2015 and 2014. WARRANTY RESERVE We maintain a warranty reserve that reflects management's best estimate of the cost to replace product that does not meet our specifications and customers' performance requirements. The warranty reserve is based upon a historical product return rate, adjusted for any specific known conditions or circumstances. Adjustments to the warranty reserve are recorded in cost of goods sold. GOODWILL AND INTANGIBLE ASSETS We amortize intangible assets with finite lives over their estimated useful lives, which range from one to eleven years. Intangible assets with finite lives are reviewed for impairment using a process similar to that used to evaluate other long-lived assets. Goodwill and indefinite-lived intangible assets are not amortized and are tested annually in the fourth fiscal quarter, or more frequently if indicators of potential impairment exist, using a fair-value-based approach. The recoverability of goodwill is measured at the reporting unit level, which is defined as either an operating segment or one level below an operating segment, referred to as a component. A component is a reporting unit when the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of the component. Components may be combined into one reporting unit when they have similar economic characteristics. We have four reporting units, all of which have goodwill and intangible assets as of September 30, 2016. Goodwill impairment testing requires a comparison of the fair value of each reporting unit to the carrying value. If the carrying value exceeds fair value, then the fair value of the assets and liabilities for the reporting unit is used to determine the "implied" fair value of goodwill. The amount of the impairment is the difference between the carrying value and the implied fair value of goodwill. Accounting guidance provides an entity the option to assess the fair value of a reporting unit either using a qualitative analysis ("step zero") or a quantitative analysis ("step one"). In fiscal 2014, 2015 and 2016, we chose to use a step one analysis for goodwill impairment. Similarly, an entity has the option to use a step zero or step one approach to determine the recoverability of indefinite-lived intangible assets. In fiscal 2014, 2015 and 2016, we used a step one analysis to determine the recoverability of indefinite-lived intangible assets. As discussed in more detail in Note 3, we recorded $1,000 in impairment expense on an in-process technology asset during the fourth quarter of fiscal 2016. We determined that goodwill and the other intangible assets were not impaired as of September 30, 2016. FOREIGN CURRENCY TRANSLATION Certain operating activities in Asia and Europe are denominated in local currency, considered to be the functional currency. Assets and liabilities of these operations are translated using exchange rates in effect at the end of the year, and revenue and costs are translated using average exchange rates for the year. The related translation adjustments are reported in comprehensive income in stockholders' equity. FOREIGN EXCHANGE MANAGEMENT We transact business in various foreign currencies, primarily the Japanese yen, New Taiwan dollar and Korean won. Our exposure to foreign currency exchange risks has not been significant because a large portion of our business is denominated in U.S. dollars. However, there was a weakening of the Japanese yen against the U.S. dollar during fiscal years 2014 and 2015, which had some net positive impact on our gross margin percentage and our net income. Periodically, we enter into forward foreign exchange contracts in an effort to mitigate the risks associated with currency fluctuations on certain foreign currency balance sheet exposures. Our foreign exchange contracts do not qualify for hedge accounting under the accounting rules for derivative instruments. See Note 11 for a discussion of derivative financial instruments. INTERCOMPANY LOAN ACCOUNTING We maintain an intercompany loan agreement with our wholly-owned subsidiary, Nihon Cabot Microelectronics K.K. ("Nihon"), under which we provided funds to Nihon to finance the purchase of certain assets from our former Japanese branch at the time of the establishment of this subsidiary, for the purchase of land adjacent to our Geino, Japan, facility, for the construction of our Asia Pacific technology center, and for the purchase of a 300 millimeter polishing tool and related metrology equipment, all of which are part of Nihon, as well as for general business purposes. Since settlement of the note is expected in the foreseeable future, and our subsidiary has made timely payments on the loan, the loan is considered a foreign-currency transaction. Therefore the associated foreign exchange gains and losses are recognized as other income or expense rather than being deferred in the cumulative translation account in other comprehensive income. We also maintain an intercompany loan between two of our wholly-owned foreign subsidiaries, from Cabot Microelectronics Singapore Pte. Ltd. to Hanguk Cabot Microelectronics, LLC in South Korea. This loan provided funds for the construction and operation of our research, development and manufacturing facility in South Korea. This loan is also considered a foreign currency transaction and is accounted for in the same manner as our intercompany loan to Nihon. These intercompany loans are eliminated from our Consolidated Balance Sheet in consolidation. PURCHASE COMMITMENTS We have entered into unconditional purchase obligations, which include noncancelable purchase commitments and take-or-pay arrangements with suppliers. On an ongoing basis, we review our agreements and assess the likelihood of a shortfall in purchases and determine if it is necessary to record a liability. See Note 18 for additional discussion of purchase commitments. To date, we have not recorded such a liability. REVENUE RECOGNITION Revenue from CMP consumables products is recognized when title is transferred to the customer, assuming all revenue recognition criteria are met. Title transfer generally occurs upon shipment to the customer or when inventory held on consignment is consumed by the customer, subject to the terms and conditions of the particular customer arrangement. We have consignment agreements with a number of our customers that require, at a minimum, monthly consumption reports that enable us to record revenue and inventory usage in the appropriate period. Although the majority of our products are sold directly, we market some of our products through distributors in certain areas of the world. We recognize revenue upon shipment and when title is transferred to the distributor. We do not have any arrangements with distributors that include payment terms, rights of return, or rights of exchange outside the ordinary course of business, or any other significant matters that we believe would impact the timing of revenue recognition. Within our Engineered Surface Finishes (ESF) business, sales of equipment are recorded as revenue upon delivery and customer acceptance. Amounts allocated to installation and training are deferred until those services are provided and are not material. Revenues are reported net of any value-added tax or other such tax assessed by a governmental authority on our revenue-producing activities. SHIPPING AND HANDLING Costs related to shipping and handling are included in cost of goods sold. RESEARCH, DEVELOPMENT AND TECHNICAL Research, development and technical costs are expensed as incurred and consist primarily of staffing costs, materials and supplies, depreciation, utilities and other facilities costs. INCOME TAXES Current income taxes are determined based on estimated taxes payable or refundable on tax returns for the current year. Deferred income taxes are determined using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Provisions are made for both U.S. and any foreign deferred income tax liability or benefit. We assess whether our deferred tax assets will ultimately be realized and record an estimated valuation allowance on those deferred tax assets that may not be realized. We recognize the tax benefit of an uncertain tax position only if it is more likely than not that the tax position will be sustained by the taxing authorities, based on the technical merits of the position. In fiscal years 2014, 2015 and 2016 we elected to permanently reinvest the earnings of all of our foreign subsidiaries rather than repatriate the earnings to the U.S. See Note 17 for additional information on income taxes. INTEREST RATE SWAPS In fiscal 2015, we entered into floating-to-fixed interest rate swap agreements to hedge the variability in LIBOR-based interest payments on a portion of our outstanding variable rate debt. The fair value of our interest rate swaps is estimated using standard valuation models using market-based observable inputs over the contractual term, including one-month LIBOR-based yield curves, among others. We consider the risk of nonperformance, including counterparty credit risk, in the calculation of the fair value. We have designated these swap agreements as cash flow hedges pursuant to ASC 815, "Derivatives and Hedging". As cash flow hedges, unrealized gains are recognized as assets and unrealized losses are recognized as liabilities. Unrealized gains and losses are designated as effective or ineffective based on a comparison of the changes in fair value of the interest rate swaps and changes in fair value of the underlying exposures being hedged. The effective portion is recorded as a component of accumulated other comprehensive income or loss, while the ineffective portion is recorded as a component of interest expense. Changes in the method by which we pay interest from one-month LIBOR to another rate of interest could create ineffectiveness in the swaps, and result in amounts being reclassified from other comprehensive income into net income. Hedge effectiveness is tested quarterly to determine if hedge treatment is appropriate. SHARE-BASED COMPENSATION We record share-based compensation expense for all share-based awards, including stock option grants, restricted stock and restricted stock unit awards and employee stock purchase plan purchases. We calculate share-based compensation expense using the straight-line approach based on awards ultimately expected to vest, which requires the use of an estimated forfeiture rate. Our estimated forfeiture rate is primarily based on historical experience, but may be revised in future periods if actual forfeitures differ from the estimate. We use the Black-Scholes option-pricing model to estimate the grant date fair value of our stock options and employee stock purchase plan purchases. This model requires the input of highly subjective assumptions, including the price volatility of the underlying stock, the expected term of our stock options, expected dividend yield, and the risk-free interest rate. We estimate the expected volatility of our stock options based on a combination of our stock's historical volatility and the implied volatilities from actively-traded options on our stock. We calculate the expected term of our stock options using historical stock option exercise data, and we add a slight premium to this expected term for employees who meet the definition of retirement eligible pursuant to their grants during the contractual term of the grant. The expected dividend yield represents our annualized dividend in dollars divided by the stock price on the date of grant. The risk-free rate is derived from the U.S. Treasury yield curve in effect at the time of grant. The fair value of our restricted stock and restricted stock unit awards represents the closing price of our common stock on the date of award. For additional information regarding our share-based compensation plans, refer to Note 13. EARNINGS PER SHARE Basic earnings per share (EPS) is calculated by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the period, excluding the effects of unvested restricted stock awards with a right to receive non-forfeitable dividends, which are considered participating securities as prescribed by the two class method under ASC Topic 260, Earnings Per Share (ASC 260). Diluted EPS is calculated in a similar manner, but the weighted-average number of common shares outstanding during the period is increased to include the weighted-average dilutive effect of "in-the-money" stock options and unvested restricted stock shares using the treasury stock method. COMPREHENSIVE INCOME Comprehensive income primarily differs from net income due to foreign currency translation adjustments. EFFECTS OF RECENT ACCOUNTING PRONOUNCEMENTS In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers" (Topic 606), an updated standard on revenue recognition . In June 2014, the FASB issued ASU No. 2014-12, "Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target Could be Achieved after the Requisite Service Period" (Topic 718) . In January 2015, the FASB issued ASU No. 2015-01, "Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items" (Subtopic 225-20) . In February 2015, the FASB issued ASU No. 2015-02, "Amendments to the Consolidation Analysis" (Topic 810) . In April 2015, the FASB issued ASU No. 2015-03, "Simplifying the Presentation of Debt Issuance Costs" (Subtopic 835-30). The provisions of ASU 2015-03 require an entity to present the debt issuance costs related to a recognized debt liability in the balance sheet as a direct deduction to the carry amount of that debt liability. ASU 2015-03 will be effective for us beginning October 1, 2016. The implementation of this standard will require us to reclassify our debt issuance costs related to our term loan from their asset position on our balance sheet to a liability position as an offset to the carrying amount of our outstanding debt. We do not expect the implementation of this standard to have a material effect on our financial statements. In April 2015, the FASB issued ASU No. 2015-05, "Customer Accounting for Fees Paid in a Cloud Computing Arrangement" (Subtopic 350-40). ASU 2015-05 provides guidance to entities on accounting for entering into a cloud computing arrangement with and without a software license. If an arrangement includes a software license, then the purchaser should account for the software license element of the arrangement consistent with the treatment of other software licenses. If an arrangement does not include a software license, it should be treated as a service contract. ASU 2015-05 will be effective for us beginning October 1, 2016. We do not expect the implementation of this standard to have a material effect on our financial statements. In July 2015, the FASB issued ASU No, 2015-11, "Simplifying the Measurement of Inventory" (Topic 330). The provisions of ASU 2015-11 require an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 will be effective for us beginning October 1, 2017, but early adoption is permitted. We do not believe the adoption of this standard will have a material effect on our financial statements. In August 2015, the FASB issued ASU No. 2015-15, "Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements" (Subtopic 835-30). ASU 2015-15 provides guidance on the treatment of debt issuance cost related to line-of-credit arrangements based on comments provided by the SEC staff. The SEC staff stated that it would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance cost ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. ASU 2015-15 will be effective for us beginning October 1, 2016. We do not expect the implementation of this standard to have a material effect on our financial statements. In January 2016, the FASB issued ASU No. 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities" (Subtopic 825-10). The provision of ASU 2016-01 requires equity investments, other than those accounted for under the equity method of accounting or those that result in consolidation, to be measured at fair value with changes in fair value recognized in net income. ASU 2016-01 simplifies the impairment assessment of equity securities by permitting a qualitative assessment each reporting period, and makes changes to presentation and disclosure of certain classes of financial assets and liabilities. ASU 2016-01 will be effective for us beginning October 1, 2018, but early adoption is permitted. We are currently evaluating the impact of implementation of this standard on our financial statements. In February 2016, the FASB issued ASU No. 2016-02, "Leases" (Topic 842). The provisions of ASU 2016-02 require a dual approach for lessee accounting under which a lessee would recognize a right-of-use asset and a corresponding lease liability. Leases will be classified as either finance or operating leases. For finance leases, a lessee will recognize interest expense and amortization of the right-of-use asset, and for operating leases, the lessee will recognize a straight-line total lease expense. The guidance also requires qualitative and specific quantitative disclosures to supplement the amounts recorded in the financial statements, to afford better understanding of an entity's leasing activities, including any significant judgments and estimates. ASU 2016-02 will be effective for us beginning October 1, 2019, but early adoption is permitted. We are currently evaluating the impact of implementation of this standard on our financial statements. In March 2016, the FASB issued ASU No. 2016-05, "Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships" (Topic 815). The provisions of ASU 2016-05 provide clarification that a change in a counterparty of a derivative instrument that has been designated as a hedging instrument does not require dedesignation of that hedging relationship, provided that all other hedge accounting criteria is met. ASU 2016-05 will be effective for us beginning October 1, 2018, but early adoption is permitted. We do not believe the adoption of this standard will have a material effect on our financial statements. In March 2016, the FASB issued ASU No. 2016-07, "Simplifying the Transition to the Equity Method of Accounting" (Topic 323). The provisions of ASU 2016-07 require equity method investors to add the cost of acquiring additional interest in the investee to the current basis of the investor's previously held interest and adopt the equity method prospectively as of the date the investment qualifies for the equity method of accounting. ASU 2016-07 will be effective for us beginning October 1, 2018, but early adoption is permitted. We do not believe the adoption of this standard will have a material effect on our financial statements as we currently have no equity method investments. In March 2016, the FASB issued ASU No. 2016-09, "Improvements to Employee Share Based Payment Accounting" (Topic 718). The provisions of this standard involve several aspects of the accounting for share-based payments transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 will be effective for us beginning October 1, 2017, but early adoption is permitted. We are currently evaluating the impact of implementation of this standard on our financial statements. In June 2016, the FASB issued ASU No. 2016-13, "Measurement of Credit Losses on Financial Instruments" (Topic 326). The provisions of this standard require financial assets measured at amortized cost to be presented at the net amount expected to be collected. An allowance account would be established to present the net carrying value at the amount expect to be collected. ASU 2016-13 also provides that credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. ASU 2016-13 will be effective for us beginning October 1, 2020, but early adoption is permitted as of October 1, 2019. We are currently evaluating the impact of implementation of this standard on our financial statements. In August 2016, the FASB issued ASU No. 2016-15 "Classification of Certain Cash Receipts and Cash Payments" (Topic 230). The provisions of this standard provide guidance on the classification within the statement of cash flows of certain types of cash receipts and cash payments in an effort to eliminate diversity in practice. ASU 2016-15 will be effective for us beginning October 1, 2018, but early adoption is permitted. We do not believe the adoption of this standard will have a material effect on our financial statements as we currently do not have any of the cash receipts or payments discussed in this standard. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 12 Months Ended |
Sep. 30, 2016 | |
BUSINESS COMBINATION [Abstract] | |
BUSINESS COMBINATION | 3. BUSINESS COMBINATION On October 22, 2015, the Company completed the acquisition of 100% of the outstanding stock of NexPlanar Corporation (NexPlanar), which was a privately held, U.S. based company that specialized in the development, manufacture and sale of advanced CMP pad solutions for the semiconductor industry. We acquired NexPlanar to expand our polishing pad portfolio by adding a complementary pad technology for which we believe we can leverage our global infrastructure to better serve customers on a global basis, including offering performance-advantaged slurry and pad consumable sets. We paid a total of $ 126,976 , less cash acquired of $15,261 142,167 In addition, we paid $154 The following table summarizes the fair values of assets acquired and liabilities assumed as of the date of acquisition: Total purchase consideration $ 142,237 Cash $ 15,261 Accounts receivable 3,052 Inventories 2,768 Prepaid expenses and other current assets 1,712 Property, plant and equipment 6,901 Intangible assets 55,000 Deferred tax assets 20,509 Other long-term assets 1,458 Accounts payable (1,057 ) Accrued expenses and other current liabilities (1,472 ) Deferred tax liabilities (20,313 ) Total identifiable net assets 83,819 Goodwill 58,418 $ 142,237 The acquisition was accounted for using the acquisition method of accounting. Tangible and identifiable intangible assets acquired and liabilities assumed are recorded at fair value as of the acquisition date. We finalized the purchase price allocation during the fourth quarter of fiscal 2016. We believe that the information we used provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed. In September 2015, the FASB issued Accounting Standards Update No. 2015-16, "Simplifying the Accounting for Measurement Period Adjustments" (Topic 805) (ASU 2015-16). The provisions of ASU 2015-16 require an acquirer to recognize adjustments to provisional amounts identified during the measurement period in the reporting period in which the adjustments are determined. We elected the early adoption provision of this standard in the quarter ended March 31, 2016. During the quarter ended September 30, 2016, we reduced the total fair value of intangible assets acquired from $61,000 to $55,000 based on an improved understanding of the allocation of future expected cash flows amongst the various NexPlanar products at the date of acquisition. We recorded an additional $210 in amortization expense in the fourth quarter of fiscal 2016 related to the changes in fair value of intangible assets. We also reduced our deferred tax liability balance related to the intangible assets by $2,140, which decreased goodwill by the same amount. The fair values of identifiable assets and liabilities acquired were developed with the assistance of third party valuation firms. The fair value of acquired property, plant and equipment is valued at its "value-in-use" as there are no known plans to dispose of any assets. The fair value of acquired identifiable intangible assets was determined using the "income approach" on an individual asset basis. The key assumptions used in the calculation of the discounted cash flows include projected revenues, gross margin, operating expenses, and discount rate. The valuations and the underlying assumptions have been deemed reasonable by Company management. There are inherent uncertainties and management judgment required in these determinations. The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition: Preliminary Useful Fair Value Life Trade name $ 8,000 7 years Customer relationships 8,000 11 years Developed technology - product family A 32,000 7 years Developed technology - product family B 2,000 9 years In-process technology 5,000 Total intangible assets $ 55,000 The trade name represents the estimated fair value of the brand and name recognition associated with the marketing of NexPlanar's product offerings. Customer relationships represent the estimated fair value of the underlying relationships and agreements with NexPlanar customers. Developed technology represents the estimated fair value of NexPlanar's technology, processes and knowledge regarding its product offerings. In-process technology represents the fair value assigned to technology projects under development as of the acquisition date. The in-process technology assets are capitalized and accounted for as indefinite-lived intangible assets and will be subject to impairment testing until completion or abandonment of the projects. Upon successful completion of each project, we will make a determination of the appropriate useful life and the related amortization will be recorded as an expense over the estimated useful life based on the future expected cash flow stream. In the fourth quarter of fiscal 2016, we recorded impairment expense of $1,000 representing the entire fair value of one of the in-process technology assets as management determined revised expected future cash flows were insufficient to support the value of the asset. The intangible assets subject to amortization have a weighted average useful life of 7.7 years and are being amortized on a straight-line basis. The excess of purchase consideration over the preliminary fair value of net assets acquired was recorded as goodwill, and is not deductible for income tax purposes. The goodwill is primarily attributable to anticipated revenue growth from the combination of our and NexPlanar pad technologies, expected synergies from the combined operations, and the assembled workforce of NexPlanar. NexPlanar's results of operations have been included in our unaudited consolidated statements of income and comprehensive income from the date of acquisition. We incurred $816 in professional fees related to the acquisition, $526 of which were recorded as general and administrative expense during fiscal 2015, and $290 of which were recorded as general and administrative expense during fiscal 2016. As previously discussed, we recorded $154 in compensation expense, related to the cash settlement of certain unvested NexPlanar stock options. The following supplemental pro forma information summarizes the combined results of operations for Cabot Microelectronics and NexPlanar as if the acquisition had occurred on October 1, 2014. Year Ended September 30, 2016 2015 Revenues $ 431,856 $ 437,326 Net income 60,620 46,928 Earnings per share - basic 2.50 1.93 Earnings per share - diluted $ 2.46 $ 1.89 The historical financial information has been adjusted to give effect to pro forma adjustments, which consist of amortization expense associated with intangible assets, and the elimination of interest expense on NexPlanar debt repaid prior to the acquisition. The proforma amounts for the year ended September 30, 2016 exclude the impact of $154 in compensation expense related to unvested NexPlanar stock options settled in cash, and $403 for the step-up of inventory as these items are assumed to have occurred during the quarter ended December 31, 2014 had the acquisition been completed on October 1, 2014. The pro forma adjustments are based on information currently available. Therefore, the pro forma consolidated results are not necessarily indicative of what the consolidated results actually would have been had the acquisition been completed on October 1, 2014. The pro forma consolidated results do not purport to project future results of combined operations, nor do they reflect the expected realization of any revenue or cost synergies associated with the acquisition. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Sep. 30, 2016 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | 4. FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The FASB established a three-level hierarchy for disclosure based on the extent and level of judgment used to estimate fair value. Level 1 inputs consist of valuations based on quoted market prices in active markets for identical assets or liabilities. Level 2 inputs consist of valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in an inactive market, or other observable inputs. Level 3 inputs consist of valuations based on unobservable inputs that are supported by little or no market activity. The following table presents financial instruments, other than long-term debt, that we measured at fair value on a recurring basis at 2016 and 2015 September 30, 2016 Level 1 Level 2 Level 3 Total Fair Value Assets: Cash and cash equivalents $ 287,479 $ - $ - $ 287,479 Other long-term investments 1,028 - - 1,028 Derivative financial instruments - 28 - 28 Total assets $ 288,507 $ 28 $ - $ 288,535 Liabilities: Derivative financial instruments - 1,469 - 1,469 Total liabilities $ - $ 1,469 $ - $ 1,469 September 30, 2015 Level 1 Level 2 Level 3 Total Fair Value Assets: Cash and cash equivalents $ 354,190 $ - $ - $ 354,190 Other long-term investments 1,720 - - 1,720 Derivative financial instruments - 14 - 14 Total assets $ 355,910 $ 14 $ - $ 355,924 Liabilities: Derivative financial instruments - 1,406 - 1,406 Total liabilities $ - $ 1,406 $ - $ 1,406 Our 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. We invest exclusively in AAA-rated, prime institutional money market funds, comprised of high quality, short-term fixed income securities. Our other long-term investments represent the fair value of investments under the Cabot Microelectronics Supplemental Employee Retirement Plan (SERP), which is a nonqualified supplemental savings plan. The fair value of the investments is determined through quoted market prices within actively traded markets. Although the investments are allocated to individual participants and investment decisions are made solely by those participants, the SERP is a nonqualified plan. Consequently, the Company owns the assets and the related offsetting liability for disbursement until such time as a participant makes a qualifying withdrawal. The long-term asset was adjusted to $1,028 in the fourth quarter of fiscal 2016 to reflect its fair value as of September 30, 2016. Our derivative financial instruments include forward foreign exchange contracts and interest rate swaps. In fiscal 2015, we entered into floating-to-fixed interest rate swap agreements to hedge the variability in LIBOR-based interest payments on a portion of our outstanding variable rate debt. These interest rate swaps represent our primary use of derivative financial instruments. The fair value of our derivative instruments is estimated using standard valuation models using market-based observable inputs over the contractual term, including one-month LIBOR-based yield curves, among others. We consider the risk of nonperformance, including counterparty credit risk, in the calculation of the fair value of derivative financial instruments. See Note 11 for more information on our use of derivative financial instruments. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Sep. 30, 2016 | |
INVENTORIES [Abstract] | |
INVENTORIES | 5. INVENTORIES Inventories consisted of the following: September 30, 2016 2015 Raw materials $ 45,109 $ 42,603 Work in process 4,668 5,487 Finished goods 22,346 22,588 Total $ 72,123 $ 70,678 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Sep. 30, 2016 | |
PROPERTY, PLANT AND EQUIPMENT [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | 6. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following: September 30, 2016 2015 Land $ 18,636 $ 17,076 Buildings 100,084 92,720 Machinery and equipment 198,870 167,448 Furniture and fixtures 6,642 6,172 Information systems 29,573 28,528 Construction in progress 6,358 7,553 Total property, plant and equipment 360,163 319,497 Less: accumulated depreciation (253,667 ) (225,754 ) Net property, plant and equipment $ 106,496 $ 93,743 Depreciation expense was $16,915, $16,060 and $17,467 for the years ended September 30, 2016, 2015 and 2014, respectively. We did not record any impairment expense on property, plant and equipment in fiscal 2016 and 2015. In fiscal 2014, we recorded $2,320 in impairment expense primarily related to the decision to write-off certain manufacturing assets in foreign locations. Of this amount, $2,236 and $84 was included in cost of goods sold and selling and marketing expense, respectively. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Sep. 30, 2016 | |
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 7. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill was $100,639 and $40,442 as of September 30, 2016 and 2015, respectively. The increase in goodwill was due to $58,418 in goodwill related to the acquisition of NexPlanar and $1,779 in foreign exchange fluctuations of the New Taiwan dollar. The components of other intangible assets are as follows: September 30, 2016 September 30, 2015 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Other intangible assets subject to amortization: Product technology $ 42,194 $ 12,718 $ 8,053 $ 7,490 Acquired patents and licenses 8,270 8,155 8,270 7,845 Trade secrets and know-how 2,550 2,550 2,550 2,550 Customer relationships, distribution rights and other 27,900 12,205 11,392 9,005 Total other intangible assets subject to amortization 80,914 35,628 30,265 26,890 In-process technology 4,000 - Other indefinite-lived intangibles* 1,190 1,190 Total other intangible assets not subject to amortization 5,190 1,190 Total other intangible assets $ 86,104 $ 35,628 $ 31,455 $ 26,890 * Total other intangible assets not subject to amortization primarily consist of trade names. Amortization expense was $8,176, $2,346 and $2,474 for fiscal 2016, 2015 and 2014, respectively. Estimated future amortization expense of intangible assets as of September 30, 2016 for the five succeeding fiscal years is as follows: Fiscal Year Estimated Amortization Expense 2017 $ 7,780 2018 7,104 2019 6,675 2020 6,670 2021 6,664 Goodwill and indefinite-lived intangible assets are tested for impairment annually in the fourth quarter of our fiscal year or more frequently if indicators of potential impairment exist, using a fair-value-based approach. The recoverability of goodwill is measured at the reporting unit level, which is defined as either an operating segment or one level below an operating segment. An entity has the option to assess the fair value of a reporting unit either using a qualitative analysis ("step zero") or a quantitative analysis ("step one"). Similarly, an entity has the option to use a step zero or a step one approach to determine the recoverability of indefinite-lived intangible assets. In fiscal 2015 and 2016, we chose to use a step one analysis for both goodwill impairment and for indefinite-lived intangible asset impairment. We completed our annual impairment test during our fourth quarter of fiscal 2016. As discussed in Note 3, we recorded $1,000 of impairment expense on one of the in-process technology assets acquired in the NexPlanar acquisition during the fourth quarter of 2016 based on management's revised expected future cash flows for this asset. The impairment charge was included in research, development and technical expenses on our Consolidated Statement of Income. We concluded that no other impairment of goodwill or intangible assets was necessary. There have been no cumulative impairment charges recorded on the goodwill for any of our reporting units. |
OTHER LONG-TERM ASSETS
OTHER LONG-TERM ASSETS | 12 Months Ended |
Sep. 30, 2016 | |
OTHER LONG-TERM ASSETS [Abstract] | |
OTHER LONG-TERM ASSETS | 8. OTHER LONG-TERM ASSETS Other long-term assets consisted of the following: September 30, 2016 2015 Auction rate securities (ARS) $ 5,494 $ 5,694 Long-term contract asset 3,055 3,995 Other long-term assets 2,900 3,595 Other long-term investments 1,028 1,720 Total $ 12,477 $ 15,004 We classify our ARS investments as held-to-maturity and have recorded them at cost. Our ARS investments at September 30, 2016 consisted of two tax exempt municipal debt securities with a total par value of $5,494, both of which have maturities greater than ten years. The ARS market began to experience illiquidity in early 2008, and this illiquidity continues. Despite this lack of liquidity, there have been no defaults in payment of the underlying securities and interest income on these holdings continues to be received on scheduled interest payment dates. Our ARS, when purchased, were issued by A-rated municipalities. Although the credit ratings of both municipalities have been downgraded since our original investment, one of the ARS is credit enhanced with bond insurance, and the other has become an obligation of the bond insurer. Both ARS currently carry a credit rating of AA- by Standard & Poor's. The fair value of our ARS, determined using level 2 fair value inputs, was $5,066 as of September 30, 2016. We have classified our ARS as held-to-maturity based on our intention and ability to hold the securities until maturity. We believe the gross unrecognized loss of $428 is due to the illiquidity in the ARS market, rather than to credit loss. Although we believe these securities will ultimately be collected in full, we believe that it is not likely that we will be able to monetize the securities in our next business cycle (which for us is generally one year). We will continue to monitor our ARS for impairment indicators, which may require us to record an impairment charge that is deemed other-than-temporary. In the third quarter of fiscal 2015, we amended a supply contract with an existing supplier. The amended agreement includes a fee of $4,500, which provides us the option to purchase certain raw materials beyond calendar 2016. This fee was recorded as a long-term asset at its present value and is being amortized into cost of goods sold on a straight-line basis through December 31, 2019, the expiration date of the agreement. See Note 18 for more information regarding this contract. Other long-term assets are comprised of the long-term portion of prepaid unamortized debt costs as well as miscellaneous deposits and prepayments on contracts extending beyond the next 12 months. As discussed in Note 4, we recorded a long-term asset and a corresponding long-term liability of $1,028 representing the fair value of our SERP investments as of September 30, 2016. |
ACCRUED EXPENSES, INCOME TAXES
ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Sep. 30, 2016 | |
ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES [Abstract] | |
ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES | 9. ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES Accrued expenses, income taxes payable and other current liabilities consisted of the following: September 30, 2016 2015 Accrued compensation $ 17,856 $ 23,793 Dividends payable 4,502 - Goods and services received, not yet invoiced 2,648 1,830 Deferred revenue and customer advances 782 538 Warranty accrual 243 209 Income taxes payable 7,878 4,276 Taxes, other than income taxes 775 975 Current portion of long-term contract liability 1,500 - Other 5,211 4,825 Total $ 41,395 $ 36,446 The dividends payable reflected in the table are excluded from the financing activities in the Consolidated Statement of Cash Flows as they were not paid as of September 30, 2016. |
DEBT
DEBT | 12 Months Ended |
Sep. 30, 2016 | |
DEBT [Abstract] | |
DEBT | 10. DEBT On February 13, 2012, we entered into a credit agreement (the "Credit Agreement") among the Company, as Borrower, Bank of America, N.A., as administrative agent, swing line lender and an L/C issuer, Bank of America Merrill Lynch and J.P. Morgan Securities LLC, as joint lead arrangers and joint book managers, JPMorgan Chase Bank, N.A., as syndication agent, and Wells Fargo Bank, N.A. as documentation agent. The Credit Agreement provided us with a $175,000 term loan (the "Term Loan"), which we drew on February 27, 2012 to fund approximately half of the special cash dividend we paid to our stockholders on March 1, 2012, and a $100,000 revolving credit facility (the "Revolving Credit Facility"), which has never been drawn, with sub-limits for multicurrency borrowings, letters of credit and swing-line loans. The Term Loan and the Revolving Credit Facility are referred to as the "Credit Facilities." On June 27, 2014, we entered into an amendment (the "Amendment") to the Credit Agreement, which (i) increased term loan commitments by $17,500, from $157,500 to $175,000, the same level as the original amount under the Credit Agreement at its inception in 2012; (ii) increased the uncommitted accordion feature on the Revolving Credit Facility from $75,000 to $100,000; (iii) extended the expiration date of the Credit Facilities from February 13, 2017 to June 27, 2019; (iv) relaxed the consolidated leverage ratio financial covenant; and (v) revised certain pricing terms and other terms within the Credit Agreement. On June 27, 2014, we drew the $17,500 of increased term loan commitments, bringing the total outstanding commitments under the Term Loan to $175,000. Borrowings under the amended Credit Facilities (other than in respect of swing-line loans) bear interest at a rate per annum equal to the "Applicable Rate" (as defined below) plus, at our option, either (1) a LIBOR rate determined by reference to the cost of funds for deposits in the relevant currency for the interest period relevant to such borrowing or (2) the "Base Rate", which is the highest of (x) the prime rate of Bank of America, N.A., (y) the federal funds rate plus 1/2 of 1.00% and (z) the one-month LIBOR rate plus 1.00%. The current Applicable Rate for borrowings under the Credit Facilities is 1.50%, as amended, with respect to LIBOR borrowings and 0.25% with respect to Base Rate borrowings, with such Applicable Rate subject to adjustment based on our consolidated leverage ratio. Swing-line loans bear interest at the Base Rate plus the Applicable Rate for Base Rate loans under the Revolving Credit Facility. In addition to paying interest on outstanding principal under the Credit Agreement, we pay a commitment fee to the lenders under the Revolving Credit Facility in respect of the unutilized commitments thereunder. As amended, the fee ranges from 0.20% to 0.30%, based on our consolidated leverage ratio. Interest expense and commitment fees are paid according to the relevant interest period and no less frequently than at the end of each calendar quarter. We paid $2,658 in arrangement fees, upfront fees and administration fees in February 2012 and we paid an additional $550 in upfront fees and arrangement fees in June 2014, of which $410 remains in prepaid expenses and other current assets and $684 remains in other long-term assets on our Consolidated Balance Sheet as of September 30, 2016. We also pay letter of credit fees as necessary. The Term Loan has periodic scheduled repayments; however, we may voluntarily prepay the Credit Facilities without premium or penalty, subject to customary "breakage" fees and reemployment costs in the case of LIBOR borrowings. All obligations under the Credit Agreement are guaranteed by certain of our existing and future direct and indirect domestic subsidiaries. The obligations under the Credit Agreement and guarantees of those obligations are secured, subject to certain exceptions, by first priority liens and security interests in the assets of the Company and certain of its domestic subsidiaries. In fiscal 2015, we entered into interest rate swap agreements that have the economic effect of converting fifty percent of our variable rate debt into fixed rate debt at a weighted average fixed rate of 1.50% plus the Applicable Rate defined above. See Notes 4 and 11 for additional information on the interest rate swap agreements. The Credit Agreement contains covenants that restrict the ability of the Company and its subsidiaries to take certain actions, including, among other things and subject to certain significant exceptions: creating liens, incurring indebtedness, making investments, engaging in mergers, selling property, paying dividends or amending organizational documents. The Credit Agreement requires us to comply with certain financial ratio maintenance covenants. These include a maximum consolidated leverage ratio of 2.75 to 1.00 and a minimum consolidated fixed charge coverage ratio of 1.25 to 1.00 for the period January 1, 2016 through the expiration of the Credit Agreement. As of September 30, 2016, our consolidated leverage ratio was 1.31 to 1.00 and our consolidated fixed charge coverage ratio was 3.76 to 1.00. The Credit Agreement also contains customary affirmative covenants and events of default. We believe we are in compliance with these covenants. At September 30, 2016, the fair value of the Term Loan, using level 2 inputs, approximates its carrying value of $155,313 as the loan bears a floating market rate of interest. As of September 30, 2016, $7,656 of the debt outstanding is classified as short-term. Principal repayments of the Term Loan are generally made on the last calendar day of each quarter if that day is considered to be a business day. As of September 30, 2016, scheduled principal repayments of the Term Loan were as follows: Fiscal Year Principal Repayments 2017 $ 7,656 2018 14,219 2019 133,438 Total $ 155,313 |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 12 Months Ended |
Sep. 30, 2016 | |
DERIVATIVE FINANCIAL INSTRUMENTS [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | 11. DERIVATIVE FINANCIAL INSTRUMENTS We are exposed to various market risks, including risks associated with interest rates and foreign currency exchange rates. We enter into certain derivative transactions to mitigate the volatility associated with these exposures. We have policies in place that define acceptable instrument types we may enter into and we have established controls to limit our market risk exposure. We do not use derivative financial instruments for trading or speculative purposes. In addition, all derivatives, whether designated in hedging relationships or not, are required to be recorded on the balance sheet at fair value on a gross basis. Cash Flow Hedges – Interest Rate Swap Agreements In fiscal 2015, we entered into floating-to-fixed interest rate swap agreements to hedge the variability in LIBOR-based interest payments on $86,406 of our outstanding variable rate debt. The notional amount of the swaps decreases each quarter by an amount in proportion to our scheduled quarterly principal payment of debt. The notional value of the swaps was $77,656 as of September 30, 2016, and the swaps are scheduled to expire on June 27, 2019. We have designated these swap agreements as cash flow hedges pursuant to ASC 815, "Derivatives and Hedging". As cash flow hedges, unrealized gains are recognized as assets and unrealized losses are recognized as liabilities. Unrealized gains and losses are designated as effective or ineffective based on a comparison of the changes in fair value of the interest rate swaps and changes in fair value of the underlying exposures being hedged. The effective portion is recorded as a component of accumulated other comprehensive income or loss, while the ineffective portion is recorded as a component of interest expense. Changes in the method by which we pay interest from one-month LIBOR to another rate of interest could create ineffectiveness in the swaps, and result in amounts being reclassified from other comprehensive income into net income. Hedge effectiveness is tested quarterly to determine if hedge treatment continues to be appropriate. Foreign Currency Contracts Not Designated as Hedges Periodically we enter into forward foreign exchange contracts in an effort to mitigate the risks associated with currency fluctuations on certain foreign currency balance sheet exposures. Our foreign exchange contracts do not qualify for hedge accounting; therefore, the gains and losses resulting from the impact of currency exchange rate movements on our forward foreign exchange contracts are recognized as other income or expense in the accompanying consolidated income statements in the period in which the exchange rates change. As of September 30, 2016 and September 30, 2015, respectively, the notional amounts of the forward contracts we held to purchase U.S. dollars in exchange for other international currencies were $8,858 and $1,034, respectively, and the notional amounts of forward contracts we held to sell U.S. dollars in exchange for other international currencies were $15,635 and $18,690, respectively. The fair value of our derivative instruments included in the Consolidated Balance Sheet, which was determined using level 2 inputs, was as follows: Asset Derivatives Liability Derivatives Balance Sheet Location Fair value at September 30, 2016 Fair Value at September 30, 2015 Fair Value at September 30, 2016 Fair Value at September 30, 2015 Derivatives designated as hedging instruments Interest rate swap contracts Other noncurrent assets $ - $ - $ - $ - . Accrued expenses and other current liabilities $ - $ - $ 612 $ 885 Other long-term liabilities $ - $ - $ 655 $ 513 Derivatives not designated as hedging instruments Foreign exchange contracts Prepaid expenses and other current assets $ 28 $ 14 $ - $ - Accrued expenses and other current liabilities $ - $ - $ 202 $ 8 The following table summarizes the effect of our derivative instrument on our Consolidated Statement of Income for the fiscal years ended September 30, 2016, 2015 and 2014: Gain (Loss) Recognized in Statement of Income Fiscal Year Ended Derivatives not designated as hedging instruments Statement of Income Location September 30, 2016 September 30, 2015 September 30, 2014 Foreign exchange contracts Other income (expense), net $ 676 $ (1,674 ) $ (1,289 ) The interest rate swap agreements have been deemed to be effective since inception, so there has been no impact on our Consolidated Statement of Income. We recorded a $84 unrealized gain, net of tax, in accumulated comprehensive income during the year ended September 30, 2016 for these interest rate swaps. During the next 12 months, we expect approximately $626 to be reclassified from accumulated other comprehensive income into interest expense related to our interest rate swaps based on projected rates of the LIBOR forward curve as of September 30, 2016. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 12 Months Ended |
Sep. 30, 2016 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | 12. ACCUMULATED OTHER COMPREHENSIVE INCOME The table below summarizes the components of accumulated other comprehensive income (loss) (AOCI), net of tax provision/(benefit), for the years ended September 30, 2016, 2015, and 2014. Foreign Currency Translation Cash Flow Hedges Pension and Other Postretirement Liabilities Marketable Securities Total Balance at September 30, 2013 $ 18,251 $ - $ (664 ) $ (151 ) $ 17,436 Foreign currency translation adjustment, net of tax of $(1,597) (8,136 ) - - - (8,136 ) Unrealized gain (loss) on marketable securities, net of tax of $0 - - - 151 151 Change in pension and other postretirement, net of tax of $0 - - (196 ) - (196 ) Balance at September 30, 2014 10,115 - (860 ) - 9,255 Foreign currency translation adjustment, net of tax of $(1,731) (14,126 ) - - - (14,126 ) Unrealized gain (loss) on cash flow hedges: Change in fair value, net of tax of tax of $(833) - (1,511 ) - - (1,511 ) Reclassification adjustment into earnings, net of tax of $336 - 610 - - 610 Change in pension and other postretirement, net of tax of $0 - - (318 ) - (318 ) Balance at September 30, 2015 (4,011 ) (901 ) (1,178 ) - (6,090 ) Foreign currency translation adjustment, net of tax of $1,854 15,996 0 - - 15,996 Unrealized gain (loss) on cash flow hedges: Change in fair value, net of tax of tax of $(274) - (499 ) - - (499 ) Reclassification adjustment into earnings, net of tax of $321 - 583 - - 583 Change in pension and other postretirement, net of tax of $(584) - - (434 ) - (434 ) Balance at September 30, 2016 $ 11,985 $ (817 ) $ (1,612 ) $ - $ 9,556 The before tax amount reclassified from OCI to net income in fiscal 2016, related to our cash flow hedges, was recorded as interest expense on our Consolidated Statement of Income. Amounts reclassified from OCI to net income, related to pension liabilities, were not material in fiscal years 2016, 2015 and 2014. |
SHARE-BASED COMPENSATION PLANS
SHARE-BASED COMPENSATION PLANS | 12 Months Ended |
Sep. 30, 2016 | |
SHARE-BASED COMPENSATION PLANS [Abstract] | |
SHARE-BASED COMPENSATION PLANS | 13. SHARE-BASED COMPENSATION PLANS EQUITY INCENTIVE PLAN AND OMNIBUS INCENTIVE PLAN In March 2004, our stockholders approved our Second Amended and Restated Cabot Microelectronics Corporation 2000 Equity Incentive Plan (the "EIP"), as amended and restated September 23, 2008. On March 6, 2012, our stockholders approved the 2012 Omnibus Incentive Plan (the "OIP"), which is the successor plan to the EIP. As of such time, all share-based awards have been made from the OIP, and the EIP is no longer available for any awards. The OIP is administered by the Compensation Committee of the Board of Directors and is intended to provide management with the flexibility to attract, retain and reward our employees, directors, consultants and advisors. The OIP allows for the granting of six Non-qualified stock options issued under the OIP, as they were under the EIP, are generally time-based and provide for a ten-year term, with options generally vesting equally over a four-year period, with first vesting on the first anniversary of the award date. Non-qualified stock options granted to non-employee directors on an annual basis vest 100% on the first anniversary of the award date. Under the OIP, as under the EIP, employees may also be granted ISOs to purchase common stock at not less than the fair value on the date of the grant. Prior to fiscal 2016, no ISOs had been granted under either plan. In the first quarter of fiscal 2016, we substituted certain NexPlanar ISOs with Cabot Microelectronics Corporation ISOs, preserving the intrinsic value, including the original vesting periods, of the original awards. Compensation expense related to our stock option awards was $6,767, $7,173 and $6,947 in fiscal 2016, 2015 and 2014, respectively. For additional information on our accounting for share-based compensation, see Note 2. Under the OIP, as under the EIP, employees and non-employees may be awarded shares of restricted stock or restricted stock units, which generally vest over a four-year period, with first vesting on the anniversary of the grant date. Restricted stock units granted to non-employee directors on an annual basis vest 100% on the first anniversary of the award date. In general, shares of restricted stock and restricted stock units may not be sold, assigned, transferred, pledged, disposed of or otherwise encumbered. Holders of restricted stock, and restricted stock units, if specified in the award agreements, have all the rights of stockholders, including voting and dividend rights, subject to the above restrictions, although the holders of restricted stock units awarded prior to fiscal 2016 do not have such rights. Holders of restricted stock units awarded in fiscal 2016 have dividend equivalent rights pursuant to the terms of the OIP and respective award agreements. Restricted shares under the OIP, as under the EIP, also may be purchased and placed "on deposit" by executive officers pursuant to the 2001 Deposit Share Program. Shares purchased under this Deposit Share Program receive a 50% match in restricted shares ("Award Shares"). These Award Shares vest at the end of a three-year period, and are subject to forfeiture upon early withdrawal of the deposit shares. Compensation expense related to our restricted stock and restricted stock unit awards and restricted shares matched at 50% pursuant to the Deposit Share Program was $6,369, $8,491 and $6,320 for fiscal 2016, 2015 and 2014, respectively. EMPLOYEE STOCK PURCHASE PLAN In March 2008, our stockholders approved our 2007 Cabot Microelectronics Employee Stock Purchase Plan (the "ESPP"), which amended the ESPP for the primary purpose of increasing the authorized shares of common stock to be purchased under the ESPP from 475,000 designated shares to 975,000 shares. As of September 30, 2016, a total of 505,151 shares are available for purchase under the ESPP. The ESPP allows all full-time, and certain part-time, employees of our Company and its subsidiaries to purchase shares of our common stock through payroll deductions. Employees can elect to have up to 10% of their annual earnings withheld to purchase our stock, subject to a maximum number of shares that a participant may purchase and a maximum dollar expenditure in any six-month offering period, and certain other criteria. The provisions of the ESPP allow shares to be purchased at a price no less than the lower of 85% of the closing price at the beginning or end of each semi-annual stock purchase period. A total of 77,437, 65,735, and 81,700 shares were issued under the ESPP during fiscal 2016, 2015 and 2014, respectively. Compensation expense related to the ESPP was $763, $686 and $680 in fiscal 2016, 2015 and 2014, respectively. DIRECTORS' DEFERRED COMPENSATION PLAN The Directors' Deferred Compensation Plan (DDCP), as amended and restated September 23, 2008, became effective in March 2001 and applies only to our non-employee directors. The cumulative number of shares deferred under the plan was 16,641 and 63,979 as of September 30, 2016 and 2015, respectively. Compensation expense related to the DDCP was $42, $95, and $95 for each of fiscal 2016, 2015 and 2014, respectively. ACCOUNTING FOR SHARE-BASED COMPENSATION We record share-based compensation expense for all share-based awards, including stock option grants, restricted stock and restricted stock unit awards and employee stock purchase plan purchases. We calculate share-based compensation expense using the straight-line approach based on awards ultimately expected to vest, which requires the use of an estimated forfeiture rate. Our estimated forfeiture rate is primarily based on historical experience, but may be revised in future periods if actual forfeitures differ from the estimate. We use the Black-Scholes option-pricing model to estimate the grant date fair value of our stock options and employee stock purchase plan purchases. This model requires the input of highly subjective assumptions, including the price volatility of the underlying stock, the expected term of our stock options, expected dividend yield and the risk-free interest rate. We estimate the expected volatility of our stock options based on a combination of our stock's historical volatility and the implied volatilities from actively-traded options on our stock. We calculate the expected term of our stock options using historical stock option exercise data, and we add a slight premium to this expected term for employees who meet the definition of retirement-eligible pursuant to their grants during the contractual term of the grant. The expected dividend yield represents our annualized dividend in dollars divided by the stock price on the date of grant. The risk-free interest rate is derived from the U.S. Treasury yield curve in effect at the time of grant. The fair value of our share-based awards, as shown below, was estimated using the Black-Scholes model with the following weighted-average assumptions, excluding the effect of our leveraged recapitalization: Year Ended September 30, 2016 2015 2014 Stock Options Weighted-average grant date fair value $ 14.47 $ 16.99 $ 15.78 Expected term (in years) 6.56 6.30 6.40 Expected volatility 26 % 33 % 32 % Risk-free rate of return 1.9 % 1.9 % 1.9 % Dividend yield 0.3 % - - Year Ended September 30, 2016 2015 2014 ESPP Weighted-average grant date fair value $ 9.57 $ 10.17 $ 9.11 Expected term (in years) 0.50 0.50 0.50 Expected volatility 24 % 24 % 25 % Risk-free rate of return 0.4 % 0.1 % 0.1 % Dividend yield 0.5 % - - The Black-Scholes model is primarily used in estimating the fair value of short-lived exchange traded options that have no vesting restrictions and are fully transferable. Because employee stock options and ESPP purchases have certain characteristics that are significantly different from traded options, and because changes in the subjective assumptions can materially affect the estimated value, our use of the Black-Scholes model for estimating the fair value of stock options and ESPP purchases may not provide an accurate measure. Although the value of our stock options and ESPP purchases are determined in accordance with applicable accounting standards using an option-pricing model, those values may not be indicative of the fair values observed in a willing buyer/willing seller market transaction. The fair value of our restricted stock and restricted stock unit awards represents the closing price of our common stock on the date of award. Share-based compensation expense related to restricted stock and restricted stock unit awards is recorded net of expected forfeitures. SHARE-BASED COMPENSATION EXPENSE Total share-based compensation expense for the years ended September 30, 2016, 2015 and 2014, is as follows: Year Ended September 30, Income statement classifications: 2016 2015 2014 Cost of goods sold $ 2,105 $ 1,912 $ 1,866 Research, development and technical 1,633 1,596 1,475 Selling and marketing 1,618 1,075 1,298 General and administrative 8,585 11,862 9,403 Tax benefit (4,341 ) (5,511 ) (4,722 ) Total share-based compensation expense, net of tax $ 9,600 $ 10,934 $ 9,320 As discussed in Note 3, we recorded $154 in share-based compensation expense related to certain unvested NexPlanar ISOs settled in cash at the acquisition date. The $154 represents the portion of the fair value of the original awards related to the post-acquisition period had these awards not been settled in cash at the acquisition date. U.S. GAAP prescribes that the portion of fair value of equity awards related to pre-acquisition service periods represents purchase consideration, including equity awards vesting immediately upon a change-in-control, and the portion of fair value related to post-acquisition service periods represents compensation expense. Since the post-acquisition service requirement was eliminated through the cash settlement, the $154 in compensation expense was recorded immediately following the acquisition date. We accelerated the vesting on the substitute ISO awards made to certain individuals based on the terms of their employment agreements and recorded $492 of share-based compensation expense related to this acceleration. The total $646 of acquisition-related compensation is included in the table above as general and administrative expense. Our non-employee directors received annual equity awards in March 2016, pursuant to the OIP. The award agreements provide for immediate vesting of the award at the time of termination of service for any reason other than by reason of Cause, Death, Disability or a Change in Control, as defined in the OIP, if at such time the non-employee director has completed an equivalent of at least two full terms as a director of the Company, as defined in the Company's bylaws. Five of the Company's non-employee directors had completed at least two full terms of service as of the date of the March 2016 award. Consequently, the requisite service period for the award has already been satisfied and we recorded the fair value of $879 of the awards to these five directors to share-based compensation expense in the fiscal quarter ended March 31, 2016 rather than recording that expense over the one-year vesting period stated in the award agreement, as is done for the other non-employee directors who received an annual equity award in March 2016. As discussed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2015, in conjunction with an executive officer transition, all unvested stock options and restricted stock held by our former President and Chief Executive Officer, who remains the Chairman of our Board of Directors in a non-executive capacity, vested in full on December 31, 2015, in accordance with the terms of his employment letter with the Company dated December 12, 2014. We applied the accounting guidance under Accounting Standards Codification (ASC) Topic 718 "Stock Compensation" to determine the additional share-based compensation expense to be recorded as part of the modification of the outstanding equity. The original fair value of his unvested equity totaling $5,033 was recorded ratably between the date of modification and December 31, 2015, rather than recording the expense over the original vesting period. STOCK OPTION ACTIVITY A summary of stock option activity under the EIP and OIP as of September 30, 2016, and changes during fiscal 2016 are presented below: Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at September 30, 2015 2,159,793 $ 33.90 Granted 540,469 38.56 Exercised (606,562 ) 27.41 Forfeited or canceled (41,148 ) 37.49 Outstanding at September 30, 2016 2,052,552 $ 36.97 6.8 $ 32,711 Exercisable at September 30, 2016 1,156,454 $ 33.17 5.5 $ 22,826 Expected to vest after September 30, 2016 884,474 $ 41.86 8.4 $ 9,772 The aggregate intrinsic value in the table above represents the total pretax intrinsic value (i.e., for all in-the-money stock options, the difference between our closing stock price of $52.91 per share on the last trading day of fiscal 2016 and the exercise price, multiplied by the number of shares) that would have been received by the option holders had all option holders exercised their options on the last trading day of fiscal 2016. The total intrinsic value of options exercised was $12,317, $31,546 and 21,647 for fiscal 2016, 2015 and 2014, respectively. The total cash received from options exercised was $16,623, $33,177 and $40,248 for fiscal 2016, 2015 and 2014, respectively. The actual tax benefit realized for the tax deductions from options exercised was $4,076, $10,569 and $7,611 for fiscal 2016, 2015 and 2014, respectively. The total fair value of stock options vested during fiscal years 2016, 2015 and 2014 was $7,880, $7,005 and $6,645, respectively. As of September 30, 2016, there was $10,039 of total unrecognized share-based compensation expense related to unvested stock options granted under the EIP and OIP. That cost is expected to be recognized over a weighted-average period of 2.1 years. RESTRICTED STOCK AND RESTRICTED STOCK UNITS A summary of the status of the restricted stock awards and restricted stock unit awards outstanding that were granted under the EIP and OIP as of September 30, 2016, and changes during fiscal 2016, are presented below: Restricted Stock Awards and Units Weighted Average Grant Date Fair Value Nonvested at September 30, 2015 382,496 $ 43.05 Granted 225,244 41.81 Vested (256,550 ) 41.86 Forfeited (10,730 ) 42.98 Nonvested at September 30, 2016 340,460 $ 43.13 The total fair value of restricted stock awards and restricted stock units vested during fiscal years 2016, 2015 and 2014 was $10,740, $7,222 and $5,916, respectively. As of September 30, 2016, there was $11,175 of total unrecognized share-based compensation expense related to unvested restricted stock awards and restricted stock units under the EIP and OIP. That cost is expected to be recognized over a weighted-average period of 2.4 years. |
SAVINGS PLAN
SAVINGS PLAN | 12 Months Ended |
Sep. 30, 2016 | |
SAVINGS PLAN [Abstract] | |
SAVINGS PLAN | 14. SAVINGS PLAN Effective in May 2000, we adopted the Cabot Microelectronics Corporation 401(k) Plan (the "401(k) Plan"), which is a qualified defined contribution plan, covering all eligible U.S. employees meeting certain minimum age and eligibility requirements, as defined by the 401(k) Plan. Participants may make elective contributions of up to 60% of their eligible compensation. All amounts contributed by participants and earnings on these contributions are fully vested at all times. The 401(k) Plan provides for matching and fixed non-elective contributions by the Company. Under the 401(k) Plan, the Company will match 100% of the first four percent of the participant's eligible compensation and 50% of the next two percent of the participant's eligible compensation that is contributed, subject to limitations required by government regulations. Under the 401(k) Plan, all U.S. employees, even those who do not contribute to the 401(k) Plan, receive a contribution by the Company in an amount equal to four percent of eligible compensation, and thus are participants in the 401(k) Plan. Participants are 100% vested in all Company contributions at all times. The Company's expense for the 401(k) Plan totaled $4,624, $4,111 and $4,547 for the fiscal years ended September 30, 2016, 2015 and 2014, respectively. |
OTHER INCOME (EXPENSE), NET
OTHER INCOME (EXPENSE), NET | 12 Months Ended |
Sep. 30, 2016 | |
OTHER INCOME, NET [Abstract] | |
OTHER INCOME (EXPENSE), NET | 15. OTHER INCOME, NET Other income, net, consisted of the following: Year Ended September 30, 2016 2015 2014 Interest income $ 949 $ 365 $ 194 Other income (expense) (296 ) 316 (54 ) Total other income, net $ 653 $ 681 $ 140 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Sep. 30, 2016 | |
STOCKHOLDERS EQUITY [Abstract] | |
STOCKHOLDERS EQUITY | 16. STOCKHOLDERS' EQUITY The following is a summary of our capital stock activity over the past three years: Number of Shares Common Stock Treasury Stock September 30, 2013 30,213,577 6,866,675 Exercise of stock options 1,449,002 Restricted stock under EIP and OIP, net of forfeitures 176,026 Restricted stock under Deposit Share Plan, net of forfeitures 7,296 Common stock under ESPP 81,700 Repurchases of common stock under share repurchase plans 1,229,494 Repurchases of common stock – other 46,518 September 30, 2014 31,927,601 8,142,687 Exercise of stock options 1,324,646 Restricted stock under EIP and OIP, net of forfeitures 172,010 Restricted stock under Deposit Share Plan, net of forfeitures (811) Common stock under ESPP 65,735 Repurchases of common stock under share repurchase plans 851,245 Repurchases of common stock – other 47,746 September 30, 2015 33,489,181 9,041,678 Exercise of stock options 606,562 Restricted stock under EIP and OIP, net of forfeitures 86,277 Restricted stock under Deposit Share Plan, net of forfeitures 1,847 Common stock under ESPP 77,437 Repurchases of common stock under share repurchase plans 636,839 Repurchases of common stock – other 66,125 September 30, 2016 34,261,304 9,744,642 COMMON STOCK Each share of common stock, including those awarded as restricted stock, but not restricted stock units, entitles the holder to one vote on all matters submitted to a vote of Cabot Microelectronics' stockholders. Common stockholders are entitled to receive ratably the dividends, if any, as may be declared by the Board of Directors. Holders of restricted stock units awarded in fiscal 2016 are entitled to dividend equivalents, which are paid to the holder upon the vesting of the restricted stock units. The number of authorized shares of common stock is 200,000,000 shares. SHARE REPURCHASES In January 2016, our Board of Directors authorized an increase in the amount available under our share repurchase program from $75,000 to $150,000. Under this program, we repurchased 636,839 shares for $25,980 during fiscal 2016, 851,245 shares for $40,026 during fiscal 2015, and 1,229,494 shares for $53,000 during fiscal 2014. As of September 30, 2016, $134,028 remains available under our share repurchase program. To date, we have funded share repurchases under our share repurchase program from our existing cash balance, and anticipate we will continue to do so. The program, which became effective on the authorization date, may be suspended or terminated at any time, at the Company's discretion. For additional information on share repurchases, see Part II, Item 5, "Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities" and the section titled "Liquidity and Capital Resources" in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Form 10-K. Separate from this share repurchase program, a total of 66,125, 47,746 and 46,518 shares were purchased during fiscal 2016, 2015 and 2014, respectively, pursuant to the terms of our EIP and OIP as shares withheld from award recipients to cover payroll taxes on the vesting of shares of restricted stock granted under the EIP and OIP. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2016 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | 17. INCOME TAXES Income before income taxes was as follows: Year Ended September 30, 2016 2015 2014 Domestic $ 7,130 $ 15,305 $ 14,358 Foreign 63,308 55,892 54,236 Total $ 70,438 $ 71,197 $ 68,594 Taxes on income consisted of the following: Year Ended September 30, 2016 2015 2014 U.S. federal and state: Current $ 609 $ 6,496 $ 8,978 Deferred (1,465 ) 1,791 488 Total $ (856 ) $ 8,287 $ 9,466 Foreign: Current $ 11,737 $ 7,686 $ 9,565 Deferred (292 ) (922 ) (1,188 ) Total 11,445 6,764 8,377 Total U.S. and foreign $ 10,589 $ 15,051 $ 17,843 The provision for income taxes at our effective tax rate differed from the statutory rate as follows: Year Ended September 30, 2016 2015 2014 Federal statutory rate 35.0% 35.0% 35.0% U.S. benefits from research and experimentation activities (3.5) (2.2) (0.6) State taxes, net of federal effect (0.1) 0.6 0.8 Foreign income at other than U.S. rates (16.9) (21.4) (9.4) Executive compensation 0.0 0.6 0.4 Share-based compensation 0.7 0.1 0.1 Adjustment of prior amounts 0.0 1.4 0.1 Taiwan Restructuring 0.0 7.2 0.0 Domestic production deduction (1.3) (1.3) (0.3) Other, net 1.1 1.1 (0.1) Provision for income taxes 15.0% 21.1% 26.0% In fiscal years 2014, 2015, and 2016, we elected to permanently reinvest the historical earnings of all of our foreign subsidiaries. We have not provided for deferred taxes on approximately $188,899 of undistributed earnings of such subsidiaries. These earnings could become subject to additional income tax if they are remitted as dividends to the U.S. parent company, loaned to the U.S. parent company, or upon sale of subsidiary stock. Should we decided to repatriate these undistributed foreign earnings, we would need to record a deferred tax liability of approximately $37,000 related to earnings. The decrease in the effective tax rate during fiscal 2016 was primarily due to the absence of income taxes incurred in fiscal 2015 related to the restructuring of our operations in Taiwan, the reinstatement of the research and experimentation tax credit in December 2015, and the benefit of $928 related to domestic production deductions. This was partially offset by a change in the mix of earnings among various jurisdictions in which we operate, including a scheduled reduction in the benefit available under our tax holiday in South Korea from 100% to 50% of the statutory tax rate in effect in South Korea. The results of operations for the fiscal year ended September 30, 2015 included tax adjustments to correct prior period amounts, which we determined to be immaterial to the prior periods to which they related. These adjustments, relating to the tax treatment of intercompany activities between certain of our foreign and U.S. operations, were recorded in fiscal 2015 and reduced full year net income by $868 and diluted earnings per share by approximately $0.04. The Company is currently operating under a tax holiday in South Korea in conjunction with our investment in research, development and manufacturing facilities there. This arrangement allows for a tax at 50% of the statutory rate in effect in South Korea for fiscal years 2016 and 2017, following a 0% tax rate in fiscal years 2013, 2014, and 2015, and. This tax holiday reduced our fiscal 2016, 2015, and 2014 income tax provision by approximately $3,771, $5,446 and $3,770, respectively. This tax holiday increased our fiscal 2016, 2015, and 2014 diluted earnings per share by approximately $0.15, $0.22, and $0.15, respectively. In November 2015, the FASB issued ASU No. 2015-17, "Balance Sheet Classification of Deferred Taxes" (Topic 740). The provisions of ASU 2015-17 require that deferred tax assets and liabilities be classified as noncurrent in a classified statement of financial position. We elected the early adoption provision of this standard in the quarter ended December 31, 2015, and have prospectively classified all deferred tax assets and liabilities as noncurrent on our consolidated balance sheet in accordance with this standard. We have not retrospectively adjusted the deferred tax balances as of September 30, 2015. The accounting guidance regarding uncertainty in income taxes prescribes a threshold for the financial statement recognition and measurement of tax positions taken or expected to be taken on a tax return. Under these standards, we may recognize the tax benefit of an uncertain tax position only if it is more likely than not that the tax position will be sustained by the taxing authorities, based on the technical merits of the position. The following table presents the changes in the balance of gross unrecognized tax benefits during the last three fiscal years: Balance September 30, 2013 $ 758 Additions for tax positions relating to the current fiscal year 59 Additions for tax positions relating to prior fiscal years 125 Settlements with taxing authorities (207 ) Lapse of statute of limitations (34 ) Balance September 30, 2014 701 Additions for tax positions relating to the current fiscal year 194 Additions for tax positions relating to prior fiscal years 1,400 Settlements with taxing authorities (522 ) Lapse of statute of limitations - Balance September 30, 2015 1,773 Additions for tax positions relating to the current fiscal year 364 Additions for tax positions relating to prior fiscal years 200 Settlements with taxing authorities (248 ) Lapse of statute of limitations - Balance September 30, 2016 $ 2,089 The entire balance of unrecognized tax benefits shown above as of September 30, 2016 and 2015, would affect our effective tax rate if recognized. We recognize interest and penalties related to uncertain tax positions as income tax expense in our financial statements. Interest accrued on our Consolidated Balance Sheet was $65 and $47 at September 30, 2016 and 2015, respectively, and any interest and penalties charged to expense in fiscal years 2016, 2015 and 2014 was not material. At September 30, 2016, the tax periods open to examination by the U.S. federal government included fiscal years 2013 through 2016. We believe the tax periods open to examination by U.S. state and local governments include fiscal years 2012 through 2016 and the tax periods open to examination by foreign jurisdictions include fiscal years 2012 through 2016. We do not anticipate a significant change to the total amount of unrecognized tax benefits within the next 12 months. Significant components of net deferred tax assets and liabilities were as follows: September 30, 2016 2015 Deferred tax assets: Employee benefits $ 4,612 $ 4,061 Inventory 3,117 3,271 Bad debt reserve 615 391 Share-based compensation expense 8,262 9,863 Credit and other carryforwards 25,596 556 Depreciation and amortization - 1,263 Other 1,487 3,599 Valuation allowance (3,022 ) (3,079 ) Total deferred tax assets $ 40,667 $ 19,925 Deferred tax liabilities: Depreciation and amortization $ 17,374 $ - Translation adjustment 2,079 55 Other 542 339 Total deferred tax liabilities $ 19,995 $ 394 As of September 30, 2016, the Company had foreign, federal and state net operating loss carryforwards (NOLs) of $4,736, $43,913 and $35,910, respectively, which will expire over the period between in fiscal year 2017 and fiscal year 2036, for which we have recorded a $2,014 gross valuation allowance, all of which was attributable to foreign NOLs. . The majority of the federal and state NOLs are attributable to the NexPlanar acquisition. As of September 30, 2016, the Company had $2,151 in state tax credit carryforwards, for which we have recorded a $2,084 gross valuation allowance. As of September 30, 2016, the Company had a capital loss carryforward of $2,795, for which we have recorded a full valuation allowance. As of September 30, 2016, the Company had foreign and federal tax credit carryforwards of $2,442 and 2,471, respectively, which will expire beginning in fiscal years 2027 through 2037. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Sep. 30, 2016 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 18. COMMITMENTS AND CONTINGENCIES LEGAL PROCEEDINGS While we are not involved in any legal proceedings that we believe will have a material impact on our consolidated financial position, results of operations or cash flows, we periodically become a party to legal proceedings in the ordinary course of business. PRODUCT WARRANTIES We maintain a warranty reserve that reflects management's best estimate of the cost to replace product that does not meet our specifications and customers' performance requirements, and costs related to such replacement. The warranty reserve is based upon a historical product replacement rate, adjusted for any specific known conditions or circumstances. Additions and deductions to the warranty reserve are recorded in cost of goods sold. Our warranty reserve requirements changed during fiscal 2016 as follows: Balance as of September 30, 2015 $ 209 Reserve for product warranty during the reporting period 595 Settlement of warranty (561 ) Balance as of September 30, 2016 $ 243 INDEMNIFICATION In the normal course of business, we are a party to a variety of agreements pursuant to which we may be obligated to indemnify the other party with respect to certain matters. Generally, these obligations arise in the context of agreements entered into by us, under which we customarily agree to hold the other party harmless against losses arising from items such as a breach of certain representations and covenants including title to assets sold, certain intellectual property rights and certain environmental matters. These terms are common in the industries in which we conduct business. In each of these circumstances, payment by us is subject to certain monetary and other limitations and is conditioned on the other party making an adverse claim pursuant to the procedures specified in the particular agreement, which typically allow us to challenge the other party's claims. We evaluate estimated losses for such indemnifications under the accounting standards related to contingencies and guarantees. We consider such factors as the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. To date, we have not experienced material costs as a result of such obligations and, as of September 30, 2016, have not recorded any liabilities related to such indemnifications in our financial statements as we do not believe the likelihood of such obligations is probable. LEASE COMMITMENTS We lease certain vehicles, warehouse facilities, office space, machinery and equipment under cancelable and noncancelable leases, all of which expire within five years from September 30, 2016, and may be renewed by us. Rent expense under such arrangements during fiscal 2016, 2015 and 2014 totaled $2,765, $2,195 and $2,425, respectively. Future minimum rental commitments under noncancelable leases as of September 30, 2016 are as follows: Fiscal Year Operating 2017 $ 2,441 2018 1,637 2019 1,440 2020 1,006 2021 719 Thereafter 2,845 $ 10,088 PURCHASE OBLIGATIONS Purchase obligations include our take-or-pay arrangements with suppliers, and purchase orders and other obligations entered into in the normal course of business regarding the purchase of goods and services. We have been operating under a fumed silica supply agreement with Cabot Corporation, our former parent company which is not a related party, the current term of which runs through December 31, 2019. This agreement required us to purchase certain minimum quantities of fumed silica each year of the agreement, and to pay a shortfall if we purchased less than the minimum, and provides us the option to purchase fumed silica for the remaining term of the agreement beyond calendar year 2016, for which we will pay a fee of $1,500 in each of calendar years 2017, 2018, 2019. The present value of this fee is was $4,380 as of September 30, 2016. The first payment of $1,500 is included in accrued expenses and the remaining $2,880 is included in other long-term liabilities on our Consolidated Balance Sheet. As of September 30, 2016, purchase obligations include $7,933 of contractual commitments related to our Cabot Corporation supply agreement for fumed silica. POSTRETIREMENT OBLIGATIONS IN FOREIGN JURISDICTIONS We have unfunded defined benefit plans covering employees in certain foreign jurisdictions as required by local law. Our plans in Japan, which represent the majority of our pension liability for such plans, had projected benefit obligations of $7,091 and $5,197 as of September 30, 2016 and 2015, respectively, and an accumulated benefit obligation of $5,827 and $3,941 as of September 30, 2016 and 2015, respectively. Key assumptions used in the actuarial measurement of the Japan pension liability include weighted average discount rates of 0.25% and 1.25% at September 30, 2016 and 2015, respectively, and an expected rate of compensation increase of 2.00% at both September 30, 2016 and 2015. Total future Japan pension costs included in accumulated other comprehensive income are $1,667 and $1,076 at September 30, 2016 and 2015, respectively. Our plans in Korea had defined benefit obligations of $1,822 and $1,155 as of September 30, 2016 and 2015. Key assumptions used in the actuarial measurement of the Korea pension liability include weighted average discount rates of 3.00% and 4.00% at September 30, 2016 and 2015, respectively, and an expected rate of compensation increase of 5.00% and 4.50% at September 30, 2016 and 2015. Total future Korea pension costs included in accumulated other comprehensive income are $530 and $102 at September 30, 2016 and 2015, respectively. Benefit costs for the combined plans were $1,024, $962 and $652 in fiscal years 2016, 2015 and 2014, respectively, consisting primarily of service costs, are recorded as fringe benefit expense under cost of goods sold and operating expenses in our Consolidated Statement of Income. Estimated future benefit payments are as follows: Fiscal Year Amount 2017 $ 407 2018 335 2019 373 2020 628 2021 459 2022 to 2026 $ 3,888 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Sep. 30, 2016 | |
EARNINGS PER SHARE [Abstract] | |
EARNINGS PER SHARE | 19. EARNINGS PER SHARE Basic earnings per share (EPS) is calculated by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the period, excluding the effects of unvested restricted stock awards with a right to receive non-forfeitable dividends, which are considered participating securities as prescribed by the two-class method under ASC 260. Diluted EPS is calculated in a similar manner, but the weighted-average number of common shares outstanding during the period is increased to include the weighted-average dilutive effect of "in-the-money" stock options and unvested restricted stock shares using the treasury stock method. The standards of accounting for earnings per share require companies to provide a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations. Basic and diluted earnings per share were calculated as follows: Year Ended September 30, 2016 2015 2014 Numerator: Net income $ 59,849 $ 56,146 $ 50,751 Less: income attributable to participating securities (361 ) (483 ) (442 ) Net income available to common shareholders $ 59,488 $ 55,663 $ 50,309 Denominator: Weighted-average common shares 24,076,549 24,039,692 23,704,024 (Denominator for basic calculation) Weighted-average effect of dilutive securities: Share-based compensation 400,444 592,123 906,884 Diluted weighted-average common shares 24,476,993 24,631,815 24,610,908 (Denominator for diluted calculation) Earnings per share: Basic $ 2.47 $ 2.32 $ 2.12 Diluted $ 2.43 $ 2.26 $ 2.04 For the twelve months ended September 30, 2016, 2015, and 2014, approximately 1.1 million, 0.7 million and 0.5 million shares, respectively, attributable to outstanding stock options were excluded from the calculation of diluted earnings per share because the exercise price of the options was greater than the average market price of our common stock and, therefore, their inclusion would have been anti-dilutive. |
FINANCIAL INFORMATION BY INDUST
FINANCIAL INFORMATION BY INDUSTRY SEGMENT, GEOGRAPHIC AREA AND PRODUCT LINE | 12 Months Ended |
Sep. 30, 2016 | |
FINANCIAL INFORMATION BY INDUSTRY SEGMENT, GEOGRAPHIC AREA AND PRODUCT LINE [Abstract] | |
FINANCIAL INFORMATION BY INDUSTRY SEGMENT, GEOGRAPHIC AREA AND PRODUCT LINE | 20. FINANCIAL INFORMATION BY INDUSTRY SEGMENT, GEOGRAPHIC AREA AND PRODUCT LINE We operate predominantly in one industry segment – the development, manufacture, and sale of CMP consumables. Revenues are attributed to the United States and foreign regions based upon the customer location and not the geographic location from which our products were shipped. Financial information by geographic area was as follows: Year Ended September 30, 2016 2015 2014 Revenue: United States $ 62,400 $ 55,989 $ 51,036 Asia 336,312 328,669 347,669 Europe 31,737 29,439 25,961 Total $ 430,449 $ 414,097 $ 424,666 Property, plant and equipment, net: United States $ 50,595 $ 43,239 $ 44,585 Asia 55,893 50,504 56,236 Europe 8 - - Total $ 106,496 $ 93,743 $ 100,821 The following table shows revenue from sales to customers in foreign countries that accounted for more than ten percent of our total revenue in fiscal 2016, 2015 and 2014: Year Ended September 30, 2016 2015 2014 Revenue: Taiwan $ 122,671 $ 124,460 $ 138,049 South Korea 76,082 70,608 71,420 China 59,239 49,350 45,200 The following table shows net property, plant and equipment in foreign countries that accounted for more than ten percent of our total net property, plant and equipment in fiscal 2016, 2015 and 2014: Year Ended September 30, 2016 2015 2014 Property, plant and equipment, net: Japan $ 26,268 $ 22,572 $ 27,110 Taiwan 17,949 17,419 16,675 South Korea 11,135 9,658 11,564 The following table shows revenue generated by product area in fiscal 2016, 2015 and 2014: Year Ended September 30, 2016 2015 2014 Revenue: Tungsten slurries $ 185,365 $ 178,770 $ 162,148 Dielectric slurries 99,141 96,386 118,079 Other Metals slurries 63,960 71,640 76,605 Polishing pads 52,067 32,048 33,824 Engineered Surface Finishes 22,369 21,534 16,160 Data storage slurries 7,547 13,719 17,850 Total $ 430,449 $ 414,097 $ 424,666 |
SELECTED QUARTERLY OPERATING RE
SELECTED QUARTERLY OPERATING RESULTS | 12 Months Ended |
Sep. 30, 2016 | |
SELECTED QUARTERLY OPERATING RESULTS [Abstract] | |
SELECTED QUARTERLY OPERATING RESULTS | SELECTED QUARTERLY OPERATING RESULTS The following table presents our unaudited financial information for the eight quarterly periods ended September 30, 2016. This unaudited financial information has been prepared in accordance with accounting principles generally accepted in the United States of America, applied on a basis consistent with the annual audited financial statements and in the opinion of management, include all necessary adjustments, which consist only of normal recurring adjustments necessary to present fairly the financial results for the periods. The results for any quarter are not necessarily indicative of results for any future period. CABOT MICROELECTRONICS CORPORATION (Unaudited and in thousands, except per share amounts) Sept. 30, 2016 June 30, 2016 March 31, 2016 Dec. 31, 2015 Sept. 30, 2015 June 30, 2015 March 31, 2015 Dec. 31, 2014 Revenue $ 122,684 $ 108,152 $ 99,244 $ 100,369 $ 100,137 $ 97,168 $ 104,858 $ 111,934 Cost of goods sold 61,598 56,127 52,348 50,174 48,115 48,609 50,182 54,960 Gross profit 61,086 52,025 46,896 50,195 52,022 48,559 54,676 56,974 Operating expenses: Research, development and technical 15,842 12,928 14,934 14,828 14,856 14,773 15,131 15,018 Selling and marketing 8,057 6,243 6,668 6,749 5,763 5,804 5,777 7,639 General and administrative 11,454 10,738 12,990 14,263 13,553 12,830 14,296 11,751 Total operating expenses 35,353 29,909 34,592 35,840 34,172 33,407 35,204 34,408 Operating income 25,733 22,116 12,304 14,355 17,850 15,152 19,472 22,566 Interest expense 1,187 1,178 1,191 1,167 1,494 1,065 1,059 906 Other income (expense), net 257 (246 ) 452 190 116 (160 ) (332 ) 1,057 Income before income taxes 24,803 20,692 11,565 13,378 16,472 13,927 18,081 22,717 Provision for income taxes 4,096 1,990 2,434 2,069 3,939 4,041 4,270 2,801 Net income $ 20,707 $ 18,702 $ 9,131 $ 11,309 $ 12,533 $ 9,886 $ 13,811 $ 19,916 Basic earnings per share $ 0.85 $ 0.78 $ 0.38 $ 0.46 $ 0.51 $ 0.40 $ 0.57 $ 0.83 Weighted average basic shares outstanding 24,234 23,929 24,061 24,142 24,144 24,333 24,057 23,651 Diluted earnings per share $ 0.83 $ 0.76 $ 0.37 $ 0.46 $ 0.50 $ 0.39 $ 0.55 $ 0.80 Weighted average diluted shares outstanding 24,678 24,325 24,408 24,549 24,583 24,813 24,693 24,486 Dividends per share $ 0.18 $ 0.18 $ 0.18 $ - $ - $ - $ - $ - |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Sep. 30, 2016 | |
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS [Abstract] | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | The following table sets forth activities in our allowance for doubtful accounts: Allowance For Doubtful Accounts Balance At Beginning of Year Amounts Charged To Expenses Deductions and Adjustments Balance At End Of Year Year ended: September 30, 2016 $ 1,224 $ 588 $ 16 $ 1,828 September 30, 2015 1,392 (84 ) (84 ) 1,224 September 30, 2014 1,532 (170 ) 30 1,392 We maintain a warranty reserve that reflects management's best estimate of the cost to replace product that does not meet our specifications and customers' performance requirements, and costs related to such replacement. The warranty reserve is based upon a historical product replacement rate, adjusted for any specific known conditions or circumstances. Additions and deductions to the warranty reserve are recorded in cost of goods sold. Charges to expenses and deductions, shown below, represent the net change required to maintain an appropriate reserve. Warranty Reserves Balance At Beginning of Year Reserve For Product Warranty During the Reporting Period Adjustments To Pre-existing Warranty Reserve Settlement of Warranty Balance At End Of Year Year ended: September 30, 2016 $ 209 $ 595 $ - $ (561 ) $ 243 September 30, 2015 246 608 - (645 ) 209 September 30, 2014 324 760 - (838 ) 246 We have provided a valuation allowance on certain deferred tax assets. The following table sets forth activities in our valuation allowance: Valuation Allowance Balance At Beginning of Year Amounts Charged To Expenses Deductions and Adjustments Balance At End Of Year Year ended: September 30, 2016 $ 3,079 $ - $ (57 ) $ 3,022 September 30, 2015 2,912 167 - 3,079 September 30, 2014 2,288 624 - 2,912 |
SUMMARY OF SIGNIFICANT ACCOUN30
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
PRINCIPLES OF CONSOLIDATION | PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of Cabot Microelectronics and its subsidiaries. All intercompany transactions and balances between the companies have been eliminated as of September 30, 2016. |
USE OF ESTIMATES | USE OF ESTIMATES The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the amounts reported in the consolidated financial statements and accompanying notes. The accounting estimates that require management's most difficult and subjective judgments include, but are not limited to, those estimates related to bad debt expense, inventory valuation, valuation and classification of auction rate securities, impairment of long-lived assets and investments, business combinations, goodwill, other intangible assets, interest rate swaps, share-based compensation, income taxes and contingencies. We base our estimates on historical experience, current conditions and on various other assumptions that we believe are reasonable under the circumstances. However, future events are subject to change and estimates and judgments routinely require adjustment. Actual results may differ from these estimates under different assumptions or conditions. |
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS We consider investments in all highly liquid financial instruments with original maturities of three months or less to be cash equivalents. Short-term investments include securities generally having maturities of 90 days to one year. We did not own any securities that were considered short-term as of September 30, 2016 or 2015. . See Note 4 for a more detailed discussion of other financial instruments. |
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS Trade accounts receivable are recorded at the invoiced amount and do not bear interest. We maintain an allowance for doubtful accounts for estimated losses resulting from the potential inability of our customers to make required payments. Our allowance for doubtful accounts is based on historical collection experience, adjusted for any specific known conditions or circumstances such as customer bankruptcies and increased risk due to economic conditions. Uncollectible account balances are charged against the allowance when we believe that it is probable that the receivable will not be recovered. In the fourth quarter of fiscal 2016, we recorded $514 in bad debt expense for a customer in Europe that was placed into receivership. Accounts receivable, net of allowances for doubtful accounts, were $62,830 as of September 30, 2016 and $49,405 as of September 30, 2015. The increase in accounts receivable was primarily due to the Balance as of September 30, 2015 $ 1,224 Amounts charged to expense 588 Deductions and adjustments 16 Balance as of September 30, 2016 $ 1,828 |
CONCENTRATION OF CREDIT RISK | CONCENTRATION OF CREDIT RISK Financial instruments that subject us to concentrations of credit risk consist principally of accounts receivable. We perform ongoing credit evaluations of our customers' financial conditions and generally do not require collateral to secure accounts receivable. Our exposure to credit risk associated with nonpayment is affected principally by conditions or occurrences within the semiconductor industry and global economy. With the exception of one customer bankruptcy in fiscal 2012 and the customer placed into receivership in fiscal 2016, we have not experienced significant losses relating to accounts receivable from individual customers or groups of customers. Customers who represented more than 10% of revenue are as follows: Year Ended September 30, 2016 2015 2014 Taiwan Semiconductor Manufacturing Co. (TSMC) 15% 18% 22% Samsung Group (Samsung) 15% 15% 14% TSMC accounted for 12.9% and 12.6% of net accounts receivable at September 30, 2016 and 2015, respectively. Samsung accounted for 8.3% and 9.7% of net accounts receivable at September 30, 2016 and 2015, respectively. |
FAIR VALUES OF FINANCIAL INSTRUMENTS | FAIR VALUES OF FINANCIAL INSTRUMENTS The recorded amounts of cash, accounts receivable, and accounts payable approximate their fair values due to their short-term, highly liquid characteristics. See Note 4 for a more detailed discussion of the fair value of financial instruments. |
INVENTORIES | INVENTORIES Inventories are stated at the lower of cost, determined on the first-in, first-out (FIFO) basis, or market. Finished goods and work in process inventories include material, labor and manufacturing overhead costs. We regularly review and write down the value of inventory as required for estimated obsolescence or lack of marketability. An inventory reserve is maintained based upon a historical percentage of actual inventories written off and applied against inventory value at the end of the period, adjusted for known conditions and circumstances. |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are recorded at cost. Depreciation is based on the following estimated useful lives of the assets using the straight-line method: Buildings 15-25 years Machinery and equipment 3-10 years Furniture and fixtures 5-10 years Information systems 3-5 years Expenditures for repairs and maintenance are charged to expense as incurred. Expenditures for major renewals and betterments are capitalized and depreciated over the remaining useful lives. As assets are retired or sold, the related cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations. We capitalize the costs related to the design and development of software used for internal purposes; however, these costs are not material. |
IMPAIRMENT OF LONG-LIVED ASSETS | IMPAIRMENT OF LONG-LIVED ASSETS Reviews are regularly performed to determine whether facts and circumstances exist that indicate the carrying amount of assets may not be recoverable or the useful life is shorter than originally estimated. Asset recoverability assessment begins by comparing the projected undiscounted cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. If assets are determined to be recoverable, but their useful lives are shorter than originally estimated, the net book value of the asset is depreciated over the newly determined remaining useful life. See Note 6 for more information regarding impairment expense recorded in fiscal years 2016, 2015 and 2014. |
WARRANTY RESERVE | WARRANTY RESERVE We maintain a warranty reserve that reflects management's best estimate of the cost to replace product that does not meet our specifications and customers' performance requirements. The warranty reserve is based upon a historical product return rate, adjusted for any specific known conditions or circumstances. Adjustments to the warranty reserve are recorded in cost of goods sold. |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS We amortize intangible assets with finite lives over their estimated useful lives, which range from one to eleven years. Intangible assets with finite lives are reviewed for impairment using a process similar to that used to evaluate other long-lived assets. Goodwill and indefinite-lived intangible assets are not amortized and are tested annually in the fourth fiscal quarter, or more frequently if indicators of potential impairment exist, using a fair-value-based approach. The recoverability of goodwill is measured at the reporting unit level, which is defined as either an operating segment or one level below an operating segment, referred to as a component. A component is a reporting unit when the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of the component. Components may be combined into one reporting unit when they have similar economic characteristics. We have four reporting units, all of which have goodwill and intangible assets as of September 30, 2016. Goodwill impairment testing requires a comparison of the fair value of each reporting unit to the carrying value. If the carrying value exceeds fair value, then the fair value of the assets and liabilities for the reporting unit is used to determine the "implied" fair value of goodwill. The amount of the impairment is the difference between the carrying value and the implied fair value of goodwill. Accounting guidance provides an entity the option to assess the fair value of a reporting unit either using a qualitative analysis ("step zero") or a quantitative analysis ("step one"). In fiscal 2014, 2015 and 2016, we chose to use a step one analysis for goodwill impairment. Similarly, an entity has the option to use a step zero or step one approach to determine the recoverability of indefinite-lived intangible assets. In fiscal 2014, 2015 and 2016, we used a step one analysis to determine the recoverability of indefinite-lived intangible assets. As discussed in more detail in Note 3, we recorded $1,000 in impairment expense on an in-process technology asset during the fourth quarter of fiscal 2016. We determined that goodwill and the other intangible assets were not impaired as of September 30, 2016. |
FOREIGN CURRENCY TRANSLATION | FOREIGN CURRENCY TRANSLATION Certain operating activities in Asia and Europe are denominated in local currency, considered to be the functional currency. Assets and liabilities of these operations are translated using exchange rates in effect at the end of the year, and revenue and costs are translated using average exchange rates for the year. The related translation adjustments are reported in comprehensive income in stockholders' equity. |
FOREIGN EXCHANGE MANAGEMENT | FOREIGN EXCHANGE MANAGEMENT We transact business in various foreign currencies, primarily the Japanese yen, New Taiwan dollar and Korean won. Our exposure to foreign currency exchange risks has not been significant because a large portion of our business is denominated in U.S. dollars. However, there was a weakening of the Japanese yen against the U.S. dollar during fiscal years 2014 and 2015, which had some net positive impact on our gross margin percentage and our net income. Periodically, we enter into forward foreign exchange contracts in an effort to mitigate the risks associated with currency fluctuations on certain foreign currency balance sheet exposures. Our foreign exchange contracts do not qualify for hedge accounting under the accounting rules for derivative instruments. See Note 11 for a discussion of derivative financial instruments. |
INTERCOMPANY LOAN ACCOUNTING | INTERCOMPANY LOAN ACCOUNTING We maintain an intercompany loan agreement with our wholly-owned subsidiary, Nihon Cabot Microelectronics K.K. ("Nihon"), under which we provided funds to Nihon to finance the purchase of certain assets from our former Japanese branch at the time of the establishment of this subsidiary, for the purchase of land adjacent to our Geino, Japan, facility, for the construction of our Asia Pacific technology center, and for the purchase of a 300 millimeter polishing tool and related metrology equipment, all of which are part of Nihon, as well as for general business purposes. Since settlement of the note is expected in the foreseeable future, and our subsidiary has made timely payments on the loan, the loan is considered a foreign-currency transaction. Therefore the associated foreign exchange gains and losses are recognized as other income or expense rather than being deferred in the cumulative translation account in other comprehensive income. We also maintain an intercompany loan between two of our wholly-owned foreign subsidiaries, from Cabot Microelectronics Singapore Pte. Ltd. to Hanguk Cabot Microelectronics, LLC in South Korea. This loan provided funds for the construction and operation of our research, development and manufacturing facility in South Korea. This loan is also considered a foreign currency transaction and is accounted for in the same manner as our intercompany loan to Nihon. These intercompany loans are eliminated from our Consolidated Balance Sheet in consolidation. |
PURCHASE COMMITMENTS | PURCHASE COMMITMENTS We have entered into unconditional purchase obligations, which include noncancelable purchase commitments and take-or-pay arrangements with suppliers. On an ongoing basis, we review our agreements and assess the likelihood of a shortfall in purchases and determine if it is necessary to record a liability. See Note 18 for additional discussion of purchase commitments. To date, we have not recorded such a liability. |
REVENUE RECOGNITION | REVENUE RECOGNITION Revenue from CMP consumables products is recognized when title is transferred to the customer, assuming all revenue recognition criteria are met. Title transfer generally occurs upon shipment to the customer or when inventory held on consignment is consumed by the customer, subject to the terms and conditions of the particular customer arrangement. We have consignment agreements with a number of our customers that require, at a minimum, monthly consumption reports that enable us to record revenue and inventory usage in the appropriate period. Although the majority of our products are sold directly, we market some of our products through distributors in certain areas of the world. We recognize revenue upon shipment and when title is transferred to the distributor. We do not have any arrangements with distributors that include payment terms, rights of return, or rights of exchange outside the ordinary course of business, or any other significant matters that we believe would impact the timing of revenue recognition. Within our Engineered Surface Finishes (ESF) business, sales of equipment are recorded as revenue upon delivery and customer acceptance. Amounts allocated to installation and training are deferred until those services are provided and are not material. Revenues are reported net of any value-added tax or other such tax assessed by a governmental authority on our revenue-producing activities. |
SHIPPING AND HANDLING | SHIPPING AND HANDLING Costs related to shipping and handling are included in cost of goods sold. |
RESEARCH, DEVELOPMENT AND TECHNICAL | RESEARCH, DEVELOPMENT AND TECHNICAL Research, development and technical costs are expensed as incurred and consist primarily of staffing costs, materials and supplies, depreciation, utilities and other facilities costs. |
INCOME TAXES | INCOME TAXES Current income taxes are determined based on estimated taxes payable or refundable on tax returns for the current year. Deferred income taxes are determined using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Provisions are made for both U.S. and any foreign deferred income tax liability or benefit. We assess whether our deferred tax assets will ultimately be realized and record an estimated valuation allowance on those deferred tax assets that may not be realized. We recognize the tax benefit of an uncertain tax position only if it is more likely than not that the tax position will be sustained by the taxing authorities, based on the technical merits of the position. In fiscal years 2014, 2015 and 2016 we elected to permanently reinvest the earnings of all of our foreign subsidiaries rather than repatriate the earnings to the U.S. See Note 17 for additional information on income taxes. |
INTEREST RATE SWAPS | INTEREST RATE SWAPS In fiscal 2015, we entered into floating-to-fixed interest rate swap agreements to hedge the variability in LIBOR-based interest payments on a portion of our outstanding variable rate debt. The fair value of our interest rate swaps is estimated using standard valuation models using market-based observable inputs over the contractual term, including one-month LIBOR-based yield curves, among others. We consider the risk of nonperformance, including counterparty credit risk, in the calculation of the fair value. We have designated these swap agreements as cash flow hedges pursuant to ASC 815, "Derivatives and Hedging". As cash flow hedges, unrealized gains are recognized as assets and unrealized losses are recognized as liabilities. Unrealized gains and losses are designated as effective or ineffective based on a comparison of the changes in fair value of the interest rate swaps and changes in fair value of the underlying exposures being hedged. The effective portion is recorded as a component of accumulated other comprehensive income or loss, while the ineffective portion is recorded as a component of interest expense. Changes in the method by which we pay interest from one-month LIBOR to another rate of interest could create ineffectiveness in the swaps, and result in amounts being reclassified from other comprehensive income into net income. Hedge effectiveness is tested quarterly to determine if hedge treatment is appropriate. |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION We record share-based compensation expense for all share-based awards, including stock option grants, restricted stock and restricted stock unit awards and employee stock purchase plan purchases. We calculate share-based compensation expense using the straight-line approach based on awards ultimately expected to vest, which requires the use of an estimated forfeiture rate. Our estimated forfeiture rate is primarily based on historical experience, but may be revised in future periods if actual forfeitures differ from the estimate. We use the Black-Scholes option-pricing model to estimate the grant date fair value of our stock options and employee stock purchase plan purchases. This model requires the input of highly subjective assumptions, including the price volatility of the underlying stock, the expected term of our stock options, expected dividend yield, and the risk-free interest rate. We estimate the expected volatility of our stock options based on a combination of our stock's historical volatility and the implied volatilities from actively-traded options on our stock. We calculate the expected term of our stock options using historical stock option exercise data, and we add a slight premium to this expected term for employees who meet the definition of retirement eligible pursuant to their grants during the contractual term of the grant. The expected dividend yield represents our annualized dividend in dollars divided by the stock price on the date of grant. The risk-free rate is derived from the U.S. Treasury yield curve in effect at the time of grant. The fair value of our restricted stock and restricted stock unit awards represents the closing price of our common stock on the date of award. For additional information regarding our share-based compensation plans, refer to Note 13. |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share (EPS) is calculated by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the period, excluding the effects of unvested restricted stock awards with a right to receive non-forfeitable dividends, which are considered participating securities as prescribed by the two class method under ASC Topic 260, Earnings Per Share (ASC 260). Diluted EPS is calculated in a similar manner, but the weighted-average number of common shares outstanding during the period is increased to include the weighted-average dilutive effect of "in-the-money" stock options and unvested restricted stock shares using the treasury stock method. |
COMPREHENSIVE INCOME | COMPREHENSIVE INCOME Comprehensive income primarily differs from net income due to foreign currency translation adjustments. |
EFFECTS OF RECENT ACCOUNTING PRONOUNCEMENTS | EFFECTS OF RECENT ACCOUNTING PRONOUNCEMENTS In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers" (Topic 606), an updated standard on revenue recognition . In June 2014, the FASB issued ASU No. 2014-12, "Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target Could be Achieved after the Requisite Service Period" (Topic 718) . In January 2015, the FASB issued ASU No. 2015-01, "Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items" (Subtopic 225-20) . In February 2015, the FASB issued ASU No. 2015-02, "Amendments to the Consolidation Analysis" (Topic 810) . In April 2015, the FASB issued ASU No. 2015-03, "Simplifying the Presentation of Debt Issuance Costs" (Subtopic 835-30). The provisions of ASU 2015-03 require an entity to present the debt issuance costs related to a recognized debt liability in the balance sheet as a direct deduction to the carry amount of that debt liability. ASU 2015-03 will be effective for us beginning October 1, 2016. The implementation of this standard will require us to reclassify our debt issuance costs related to our term loan from their asset position on our balance sheet to a liability position as an offset to the carrying amount of our outstanding debt. We do not expect the implementation of this standard to have a material effect on our financial statements. In April 2015, the FASB issued ASU No. 2015-05, "Customer Accounting for Fees Paid in a Cloud Computing Arrangement" (Subtopic 350-40). ASU 2015-05 provides guidance to entities on accounting for entering into a cloud computing arrangement with and without a software license. If an arrangement includes a software license, then the purchaser should account for the software license element of the arrangement consistent with the treatment of other software licenses. If an arrangement does not include a software license, it should be treated as a service contract. ASU 2015-05 will be effective for us beginning October 1, 2016. We do not expect the implementation of this standard to have a material effect on our financial statements. In July 2015, the FASB issued ASU No, 2015-11, "Simplifying the Measurement of Inventory" (Topic 330). The provisions of ASU 2015-11 require an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 will be effective for us beginning October 1, 2017, but early adoption is permitted. We do not believe the adoption of this standard will have a material effect on our financial statements. In August 2015, the FASB issued ASU No. 2015-15, "Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements" (Subtopic 835-30). ASU 2015-15 provides guidance on the treatment of debt issuance cost related to line-of-credit arrangements based on comments provided by the SEC staff. The SEC staff stated that it would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance cost ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. ASU 2015-15 will be effective for us beginning October 1, 2016. We do not expect the implementation of this standard to have a material effect on our financial statements. In January 2016, the FASB issued ASU No. 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities" (Subtopic 825-10). The provision of ASU 2016-01 requires equity investments, other than those accounted for under the equity method of accounting or those that result in consolidation, to be measured at fair value with changes in fair value recognized in net income. ASU 2016-01 simplifies the impairment assessment of equity securities by permitting a qualitative assessment each reporting period, and makes changes to presentation and disclosure of certain classes of financial assets and liabilities. ASU 2016-01 will be effective for us beginning October 1, 2018, but early adoption is permitted. We are currently evaluating the impact of implementation of this standard on our financial statements. In February 2016, the FASB issued ASU No. 2016-02, "Leases" (Topic 842). The provisions of ASU 2016-02 require a dual approach for lessee accounting under which a lessee would recognize a right-of-use asset and a corresponding lease liability. Leases will be classified as either finance or operating leases. For finance leases, a lessee will recognize interest expense and amortization of the right-of-use asset, and for operating leases, the lessee will recognize a straight-line total lease expense. The guidance also requires qualitative and specific quantitative disclosures to supplement the amounts recorded in the financial statements, to afford better understanding of an entity's leasing activities, including any significant judgments and estimates. ASU 2016-02 will be effective for us beginning October 1, 2019, but early adoption is permitted. We are currently evaluating the impact of implementation of this standard on our financial statements. In March 2016, the FASB issued ASU No. 2016-05, "Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships" (Topic 815). The provisions of ASU 2016-05 provide clarification that a change in a counterparty of a derivative instrument that has been designated as a hedging instrument does not require dedesignation of that hedging relationship, provided that all other hedge accounting criteria is met. ASU 2016-05 will be effective for us beginning October 1, 2018, but early adoption is permitted. We do not believe the adoption of this standard will have a material effect on our financial statements. In March 2016, the FASB issued ASU No. 2016-07, "Simplifying the Transition to the Equity Method of Accounting" (Topic 323). The provisions of ASU 2016-07 require equity method investors to add the cost of acquiring additional interest in the investee to the current basis of the investor's previously held interest and adopt the equity method prospectively as of the date the investment qualifies for the equity method of accounting. ASU 2016-07 will be effective for us beginning October 1, 2018, but early adoption is permitted. We do not believe the adoption of this standard will have a material effect on our financial statements as we currently have no equity method investments. In March 2016, the FASB issued ASU No. 2016-09, "Improvements to Employee Share Based Payment Accounting" (Topic 718). The provisions of this standard involve several aspects of the accounting for share-based payments transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 will be effective for us beginning October 1, 2017, but early adoption is permitted. We are currently evaluating the impact of implementation of this standard on our financial statements. In June 2016, the FASB issued ASU No. 2016-13, "Measurement of Credit Losses on Financial Instruments" (Topic 326). The provisions of this standard require financial assets measured at amortized cost to be presented at the net amount expected to be collected. An allowance account would be established to present the net carrying value at the amount expect to be collected. ASU 2016-13 also provides that credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. ASU 2016-13 will be effective for us beginning October 1, 2020, but early adoption is permitted as of October 1, 2019. We are currently evaluating the impact of implementation of this standard on our financial statements. In August 2016, the FASB issued ASU No. 2016-15 "Classification of Certain Cash Receipts and Cash Payments" (Topic 230). The provisions of this standard provide guidance on the classification within the statement of cash flows of certain types of cash receipts and cash payments in an effort to eliminate diversity in practice. ASU 2016-15 will be effective for us beginning October 1, 2018, but early adoption is permitted. We do not believe the adoption of this standard will have a material effect on our financial statements as we currently do not have any of the cash receipts or payments discussed in this standard. |
SUMMARY OF SIGNIFICANT ACCOUN31
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Schedule of Allowance for Doubtful Accounts | Accounts receivable, net of allowances for doubtful accounts, were $62,830 as of September 30, 2016 and $49,405 as of September 30, 2015. The increase in accounts receivable was primarily due to the Balance as of September 30, 2015 $ 1,224 Amounts charged to expense 588 Deductions and adjustments 16 Balance as of September 30, 2016 $ 1,828 |
Schedule of Customers Representing More than Ten Percent of Total Revenue | Customers who represented more than 10% of revenue are as follows: Year Ended September 30, 2016 2015 2014 Taiwan Semiconductor Manufacturing Co. (TSMC) 15% 18% 22% Samsung Group (Samsung) 15% 15% 14% |
Schedule of Property, Plant and Equipment Useful Lives | Property, plant and equipment are recorded at cost. Depreciation is based on the following estimated useful lives of the assets using the straight-line method: Buildings 15-25 years Machinery and equipment 3-10 years Furniture and fixtures 5-10 years Information systems 3-5 years |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
BUSINESS COMBINATION [Abstract] | |
Preliminary Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the fair values of assets acquired and liabilities assumed as of the date of acquisition: Total purchase consideration $ 142,237 Cash $ 15,261 Accounts receivable 3,052 Inventories 2,768 Prepaid expenses and other current assets 1,712 Property, plant and equipment 6,901 Intangible assets 55,000 Deferred tax assets 20,509 Other long-term assets 1,458 Accounts payable (1,057 ) Accrued expenses and other current liabilities (1,472 ) Deferred tax liabilities (20,313 ) Total identifiable net assets 83,819 Goodwill 58,418 $ 142,237 |
Components of Identifiable Intangible Assets | The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition: Preliminary Useful Fair Value Life Trade name $ 8,000 7 years Customer relationships 8,000 11 years Developed technology - product family A 32,000 7 years Developed technology - product family B 2,000 9 years In-process technology 5,000 Total intangible assets $ 55,000 |
Pro Forma Combined Results of Operations | The following supplemental pro forma information summarizes the combined results of operations for Cabot Microelectronics and NexPlanar as if the acquisition had occurred on October 1, 2014. Year Ended September 30, 2016 2015 Revenues $ 431,856 $ 437,326 Net income 60,620 46,928 Earnings per share - basic 2.50 1.93 Earnings per share - diluted $ 2.46 $ 1.89 |
FAIR VALUE OF FINANCIAL INSTR33
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | |
Schedule of Fair Value of Financial Instruments | The following table presents financial instruments, other than long-term debt, that we measured at fair value on a recurring basis at 2016 and 2015 September 30, 2016 Level 1 Level 2 Level 3 Total Fair Value Assets: Cash and cash equivalents $ 287,479 $ - $ - $ 287,479 Other long-term investments 1,028 - - 1,028 Derivative financial instruments - 28 - 28 Total assets $ 288,507 $ 28 $ - $ 288,535 Liabilities: Derivative financial instruments - 1,469 - 1,469 Total liabilities $ - $ 1,469 $ - $ 1,469 September 30, 2015 Level 1 Level 2 Level 3 Total Fair Value Assets: Cash and cash equivalents $ 354,190 $ - $ - $ 354,190 Other long-term investments 1,720 - - 1,720 Derivative financial instruments - 14 - 14 Total assets $ 355,910 $ 14 $ - $ 355,924 Liabilities: Derivative financial instruments - 1,406 - 1,406 Total liabilities $ - $ 1,406 $ - $ 1,406 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
INVENTORIES [Abstract] | |
Schedule of Inventories | Inventories consisted of the following: September 30, 2016 2015 Raw materials $ 45,109 $ 42,603 Work in process 4,668 5,487 Finished goods 22,346 22,588 Total $ 72,123 $ 70,678 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
PROPERTY, PLANT AND EQUIPMENT [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment consisted of the following: September 30, 2016 2015 Land $ 18,636 $ 17,076 Buildings 100,084 92,720 Machinery and equipment 198,870 167,448 Furniture and fixtures 6,642 6,172 Information systems 29,573 28,528 Construction in progress 6,358 7,553 Total property, plant and equipment 360,163 319,497 Less: accumulated depreciation (253,667 ) (225,754 ) Net property, plant and equipment $ 106,496 $ 93,743 |
GOODWILL AND OTHER INTANGIBLE36
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | |
Components of Other Intangible Assets | The components of other intangible assets are as follows: September 30, 2016 September 30, 2015 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Other intangible assets subject to amortization: Product technology $ 42,194 $ 12,718 $ 8,053 $ 7,490 Acquired patents and licenses 8,270 8,155 8,270 7,845 Trade secrets and know-how 2,550 2,550 2,550 2,550 Customer relationships, distribution rights and other 27,900 12,205 11,392 9,005 Total other intangible assets subject to amortization 80,914 35,628 30,265 26,890 In-process technology 4,000 - Other indefinite-lived intangibles* 1,190 1,190 Total other intangible assets not subject to amortization 5,190 1,190 Total other intangible assets $ 86,104 $ 35,628 $ 31,455 $ 26,890 * Total other intangible assets not subject to amortization primarily consist of trade names. |
Estimated Future Amortization Expense for the Succeeding Five Fiscal Years | Amortization expense was $8,176, $2,346 and $2,474 for fiscal 2016, 2015 and 2014, respectively. Estimated future amortization expense of intangible assets as of September 30, 2016 for the five succeeding fiscal years is as follows: Fiscal Year Estimated Amortization Expense 2017 $ 7,780 2018 7,104 2019 6,675 2020 6,670 2021 6,664 |
OTHER LONG-TERM ASSETS (Tables)
OTHER LONG-TERM ASSETS (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
OTHER LONG-TERM ASSETS [Abstract] | |
Schedule of Other Long-Term Assets | Other long-term assets consisted of the following: September 30, 2016 2015 Auction rate securities (ARS) $ 5,494 $ 5,694 Long-term contract asset 3,055 3,995 Other long-term assets 2,900 3,595 Other long-term investments 1,028 1,720 Total $ 12,477 $ 15,004 |
ACCRUED EXPENSES, INCOME TAXE38
ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES [Abstract] | |
Schedule of Accrued Expenses, Income Taxes Payable and Other Current Liabilities | Accrued expenses, income taxes payable and other current liabilities consisted of the following: September 30, 2016 2015 Accrued compensation $ 17,856 $ 23,793 Dividends payable 4,502 - Goods and services received, not yet invoiced 2,648 1,830 Deferred revenue and customer advances 782 538 Warranty accrual 243 209 Income taxes payable 7,878 4,276 Taxes, other than income taxes 775 975 Current portion of long-term contract liability 1,500 - Other 5,211 4,825 Total $ 41,395 $ 36,446 The dividends payable reflected in the table are excluded from the financing activities in the Consolidated Statement of Cash Flows as they were not paid as of September 30, 2016. |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
DEBT [Abstract] | |
Schedule of Maturities of Long-Term Debt | Principal repayments of the Term Loan are generally made on the last calendar day of each quarter if that day is considered to be a business day. As of September 30, 2016, scheduled principal repayments of the Term Loan were as follows: Fiscal Year Principal Repayments 2017 $ 7,656 2018 14,219 2019 133,438 Total $ 155,313 |
DERIVATIVE FINANCIAL INSTRUME40
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
DERIVATIVE FINANCIAL INSTRUMENTS [Abstract] | |
Schedule of Fair Value of Derivative Instruments in the Consolidated Balance Sheet | The fair value of our derivative instruments included in the Consolidated Balance Sheet, which was determined using level 2 inputs, was as follows: Asset Derivatives Liability Derivatives Balance Sheet Location Fair value at September 30, 2016 Fair Value at September 30, 2015 Fair Value at September 30, 2016 Fair Value at September 30, 2015 Derivatives designated as hedging instruments Interest rate swap contracts Other noncurrent assets $ - $ - $ - $ - . Accrued expenses and other current liabilities $ - $ - $ 612 $ 885 Other long-term liabilities $ - $ - $ 655 $ 513 Derivatives not designated as hedging instruments Foreign exchange contracts Prepaid expenses and other current assets $ 28 $ 14 $ - $ - Accrued expenses and other current liabilities $ - $ - $ 202 $ 8 |
Schedule of the Effect of Derivative Instruments on the Consolidated Statement of Income | The following table summarizes the effect of our derivative instrument on our Consolidated Statement of Income for the fiscal years ended September 30, 2016, 2015 and 2014: Gain (Loss) Recognized in Statement of Income Fiscal Year Ended Derivatives not designated as hedging instruments Statement of Income Location September 30, 2016 September 30, 2015 September 30, 2014 Foreign exchange contracts Other income (expense), net $ 676 $ (1,674 ) $ (1,289 ) |
ACCUMULATED OTHER COMPREHENSI41
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The table below summarizes the components of accumulated other comprehensive income (loss) (AOCI), net of tax provision/(benefit), for the years ended September 30, 2016, 2015, and 2014. Foreign Currency Translation Cash Flow Hedges Pension and Other Postretirement Liabilities Marketable Securities Total Balance at September 30, 2013 $ 18,251 $ - $ (664 ) $ (151 ) $ 17,436 Foreign currency translation adjustment, net of tax of $(1,597) (8,136 ) - - - (8,136 ) Unrealized gain (loss) on marketable securities, net of tax of $0 - - - 151 151 Change in pension and other postretirement, net of tax of $0 - - (196 ) - (196 ) Balance at September 30, 2014 10,115 - (860 ) - 9,255 Foreign currency translation adjustment, net of tax of $(1,731) (14,126 ) - - - (14,126 ) Unrealized gain (loss) on cash flow hedges: Change in fair value, net of tax of tax of $(833) - (1,511 ) - - (1,511 ) Reclassification adjustment into earnings, net of tax of $336 - 610 - - 610 Change in pension and other postretirement, net of tax of $0 - - (318 ) - (318 ) Balance at September 30, 2015 (4,011 ) (901 ) (1,178 ) - (6,090 ) Foreign currency translation adjustment, net of tax of $1,854 15,996 0 - - 15,996 Unrealized gain (loss) on cash flow hedges: Change in fair value, net of tax of tax of $(274) - (499 ) - - (499 ) Reclassification adjustment into earnings, net of tax of $321 - 583 - - 583 Change in pension and other postretirement, net of tax of $(584) - - (434 ) - (434 ) Balance at September 30, 2016 $ 11,985 $ (817 ) $ (1,612 ) $ - $ 9,556 |
SHARE-BASED COMPENSATION PLANS
SHARE-BASED COMPENSATION PLANS (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
SHARE-BASED COMPENSATION PLANS [Abstract] | |
Schedule of Fair Value Assumptions and Methodology | The fair value of our share-based awards, as shown below, was estimated using the Black-Scholes model with the following weighted-average assumptions, excluding the effect of our leveraged recapitalization: Year Ended September 30, 2016 2015 2014 Stock Options Weighted-average grant date fair value $ 14.47 $ 16.99 $ 15.78 Expected term (in years) 6.56 6.30 6.40 Expected volatility 26 % 33 % 32 % Risk-free rate of return 1.9 % 1.9 % 1.9 % Dividend yield 0.3 % - - Year Ended September 30, 2016 2015 2014 ESPP Weighted-average grant date fair value $ 9.57 $ 10.17 $ 9.11 Expected term (in years) 0.50 0.50 0.50 Expected volatility 24 % 24 % 25 % Risk-free rate of return 0.4 % 0.1 % 0.1 % Dividend yield 0.5 % - - |
Share Based Compensation Expense | Total share-based compensation expense for the years ended September 30, 2016, 2015 and 2014, is as follows: Year Ended September 30, Income statement classifications: 2016 2015 2014 Cost of goods sold $ 2,105 $ 1,912 $ 1,866 Research, development and technical 1,633 1,596 1,475 Selling and marketing 1,618 1,075 1,298 General and administrative 8,585 11,862 9,403 Tax benefit (4,341 ) (5,511 ) (4,722 ) Total share-based compensation expense, net of tax $ 9,600 $ 10,934 $ 9,320 |
Summary of Stock Option Activity | STOCK OPTION ACTIVITY A summary of stock option activity under the EIP and OIP as of September 30, 2016, and changes during fiscal 2016 are presented below: Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at September 30, 2015 2,159,793 $ 33.90 Granted 540,469 38.56 Exercised (606,562 ) 27.41 Forfeited or canceled (41,148 ) 37.49 Outstanding at September 30, 2016 2,052,552 $ 36.97 6.8 $ 32,711 Exercisable at September 30, 2016 1,156,454 $ 33.17 5.5 $ 22,826 Expected to vest after September 30, 2016 884,474 $ 41.86 8.4 $ 9,772 |
Summary of Restricted Stock Awards and Restricted Stock Unit Awards | A summary of the status of the restricted stock awards and restricted stock unit awards outstanding that were granted under the EIP and OIP as of September 30, 2016, and changes during fiscal 2016, are presented below: Restricted Stock Awards and Units Weighted Average Grant Date Fair Value Nonvested at September 30, 2015 382,496 $ 43.05 Granted 225,244 41.81 Vested (256,550 ) 41.86 Forfeited (10,730 ) 42.98 Nonvested at September 30, 2016 340,460 $ 43.13 |
OTHER INCOME (EXPENSE), NET (Ta
OTHER INCOME (EXPENSE), NET (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
OTHER INCOME, NET [Abstract] | |
Other Income (Expense), Net | Other income, net, consisted of the following: Year Ended September 30, 2016 2015 2014 Interest income $ 949 $ 365 $ 194 Other income (expense) (296 ) 316 (54 ) Total other income, net $ 653 $ 681 $ 140 |
STOCKHOLDERS EQUITY (Tables)
STOCKHOLDERS EQUITY (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
STOCKHOLDERS EQUITY [Abstract] | |
Summary of Capital Stock Activity | The following is a summary of our capital stock activity over the past three years: Number of Shares Common Stock Treasury Stock September 30, 2013 30,213,577 6,866,675 Exercise of stock options 1,449,002 Restricted stock under EIP and OIP, net of forfeitures 176,026 Restricted stock under Deposit Share Plan, net of forfeitures 7,296 Common stock under ESPP 81,700 Repurchases of common stock under share repurchase plans 1,229,494 Repurchases of common stock – other 46,518 September 30, 2014 31,927,601 8,142,687 Exercise of stock options 1,324,646 Restricted stock under EIP and OIP, net of forfeitures 172,010 Restricted stock under Deposit Share Plan, net of forfeitures (811) Common stock under ESPP 65,735 Repurchases of common stock under share repurchase plans 851,245 Repurchases of common stock – other 47,746 September 30, 2015 33,489,181 9,041,678 Exercise of stock options 606,562 Restricted stock under EIP and OIP, net of forfeitures 86,277 Restricted stock under Deposit Share Plan, net of forfeitures 1,847 Common stock under ESPP 77,437 Repurchases of common stock under share repurchase plans 636,839 Repurchases of common stock – other 66,125 September 30, 2016 34,261,304 9,744,642 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
INCOME TAXES [Abstract] | |
Schedule of Income Before Income Taxes | Income before income taxes was as follows: Year Ended September 30, 2016 2015 2014 Domestic $ 7,130 $ 15,305 $ 14,358 Foreign 63,308 55,892 54,236 Total $ 70,438 $ 71,197 $ 68,594 |
Schedule of Taxes on Income by Jurisdiction | Taxes on income consisted of the following: Year Ended September 30, 2016 2015 2014 U.S. federal and state: Current $ 609 $ 6,496 $ 8,978 Deferred (1,465 ) 1,791 488 Total $ (856 ) $ 8,287 $ 9,466 Foreign: Current $ 11,737 $ 7,686 $ 9,565 Deferred (292 ) (922 ) (1,188 ) Total 11,445 6,764 8,377 Total U.S. and foreign $ 10,589 $ 15,051 $ 17,843 |
Income Tax Rate Reconciliation | The provision for income taxes at our effective tax rate differed from the statutory rate as follows: Year Ended September 30, 2016 2015 2014 Federal statutory rate 35.0% 35.0% 35.0% U.S. benefits from research and experimentation activities (3.5) (2.2) (0.6) State taxes, net of federal effect (0.1) 0.6 0.8 Foreign income at other than U.S. rates (16.9) (21.4) (9.4) Executive compensation 0.0 0.6 0.4 Share-based compensation 0.7 0.1 0.1 Adjustment of prior amounts 0.0 1.4 0.1 Taiwan Restructuring 0.0 7.2 0.0 Domestic production deduction (1.3) (1.3) (0.3) Other, net 1.1 1.1 (0.1) Provision for income taxes 15.0% 21.1% 26.0% |
Reconciliation of Gross Unrecognized Tax Benefits | The following table presents the changes in the balance of gross unrecognized tax benefits during the last three fiscal years: Balance September 30, 2013 $ 758 Additions for tax positions relating to the current fiscal year 59 Additions for tax positions relating to prior fiscal years 125 Settlements with taxing authorities (207 ) Lapse of statute of limitations (34 ) Balance September 30, 2014 701 Additions for tax positions relating to the current fiscal year 194 Additions for tax positions relating to prior fiscal years 1,400 Settlements with taxing authorities (522 ) Lapse of statute of limitations - Balance September 30, 2015 1,773 Additions for tax positions relating to the current fiscal year 364 Additions for tax positions relating to prior fiscal years 200 Settlements with taxing authorities (248 ) Lapse of statute of limitations - Balance September 30, 2016 $ 2,089 |
Schedule of Significant Components of Deferred Income Tax | Significant components of net deferred tax assets and liabilities were as follows: September 30, 2016 2015 Deferred tax assets: Employee benefits $ 4,612 $ 4,061 Inventory 3,117 3,271 Bad debt reserve 615 391 Share-based compensation expense 8,262 9,863 Credit and other carryforwards 25,596 556 Depreciation and amortization - 1,263 Other 1,487 3,599 Valuation allowance (3,022 ) (3,079 ) Total deferred tax assets $ 40,667 $ 19,925 Deferred tax liabilities: Depreciation and amortization $ 17,374 $ - Translation adjustment 2,079 55 Other 542 339 Total deferred tax liabilities $ 19,995 $ 394 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
Schedule of Product Warranty Reserve Activity | We maintain a warranty reserve that reflects management's best estimate of the cost to replace product that does not meet our specifications and customers' performance requirements, and costs related to such replacement. The warranty reserve is based upon a historical product replacement rate, adjusted for any specific known conditions or circumstances. Additions and deductions to the warranty reserve are recorded in cost of goods sold. Our warranty reserve requirements changed during fiscal 2016 as follows: Balance as of September 30, 2015 $ 209 Reserve for product warranty during the reporting period 595 Settlement of warranty (561 ) Balance as of September 30, 2016 $ 243 |
Future Minimum Rental Commitments Under Noncancelable Leases | Future minimum rental commitments under noncancelable leases as of September 30, 2016 are as follows: Fiscal Year Operating 2017 $ 2,441 2018 1,637 2019 1,440 2020 1,006 2021 719 Thereafter 2,845 $ 10,088 |
Estimated Future Benefit Payments | Benefit costs for the combined plans were $1,024, $962 and $652 in fiscal years 2016, 2015 and 2014, respectively, consisting primarily of service costs, are recorded as fringe benefit expense under cost of goods sold and operating expenses in our Consolidated Statement of Income. Estimated future benefit payments are as follows: Fiscal Year Amount 2017 $ 407 2018 335 2019 373 2020 628 2021 459 2022 to 2026 $ 3,888 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
EARNINGS PER SHARE [Abstract] | |
Earnings Per Share | The standards of accounting for earnings per share require companies to provide a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations. Basic and diluted earnings per share were calculated as follows: Year Ended September 30, 2016 2015 2014 Numerator: Net income $ 59,849 $ 56,146 $ 50,751 Less: income attributable to participating securities (361 ) (483 ) (442 ) Net income available to common shareholders $ 59,488 $ 55,663 $ 50,309 Denominator: Weighted-average common shares 24,076,549 24,039,692 23,704,024 (Denominator for basic calculation) Weighted-average effect of dilutive securities: Share-based compensation 400,444 592,123 906,884 Diluted weighted-average common shares 24,476,993 24,631,815 24,610,908 (Denominator for diluted calculation) Earnings per share: Basic $ 2.47 $ 2.32 $ 2.12 Diluted $ 2.43 $ 2.26 $ 2.04 |
FINANCIAL INFORMATION BY INDU48
FINANCIAL INFORMATION BY INDUSTRY SEGMENT, GEOGRAPHIC AREA AND PRODUCT LINE (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
FINANCIAL INFORMATION BY INDUSTRY SEGMENT, GEOGRAPHIC AREA AND PRODUCT LINE [Abstract] | |
Revenue and Net Property, Plant and Equipment by Customer Location | We operate predominantly in one industry segment – the development, manufacture, and sale of CMP consumables. Revenues are attributed to the United States and foreign regions based upon the customer location and not the geographic location from which our products were shipped. Financial information by geographic area was as follows: Year Ended September 30, 2016 2015 2014 Revenue: United States $ 62,400 $ 55,989 $ 51,036 Asia 336,312 328,669 347,669 Europe 31,737 29,439 25,961 Total $ 430,449 $ 414,097 $ 424,666 Property, plant and equipment, net: United States $ 50,595 $ 43,239 $ 44,585 Asia 55,893 50,504 56,236 Europe 8 - - Total $ 106,496 $ 93,743 $ 100,821 |
Revenue by Country Greater than Ten Percent of Total Revenue | The following table shows revenue from sales to customers in foreign countries that accounted for more than ten percent of our total revenue in fiscal 2016, 2015 and 2014: Year Ended September 30, 2016 2015 2014 Revenue: Taiwan $ 122,671 $ 124,460 $ 138,049 South Korea 76,082 70,608 71,420 China 59,239 49,350 45,200 |
Net Property, Plant and Equipment in Foreign Countries Greater than Ten Percent of Total Net Property, Plant and Equipment | The following table shows net property, plant and equipment in foreign countries that accounted for more than ten percent of our total net property, plant and equipment in fiscal 2016, 2015 and 2014: Year Ended September 30, 2016 2015 2014 Property, plant and equipment, net: Japan $ 26,268 $ 22,572 $ 27,110 Taiwan 17,949 17,419 16,675 South Korea 11,135 9,658 11,564 |
Schedule of Revenue by Product Line | The following table shows revenue generated by product area in fiscal 2016, 2015 and 2014: Year Ended September 30, 2016 2015 2014 Revenue: Tungsten slurries $ 185,365 $ 178,770 $ 162,148 Dielectric slurries 99,141 96,386 118,079 Other Metals slurries 63,960 71,640 76,605 Polishing pads 52,067 32,048 33,824 Engineered Surface Finishes 22,369 21,534 16,160 Data storage slurries 7,547 13,719 17,850 Total $ 430,449 $ 414,097 $ 424,666 |
SELECTED QUARTERLY OPERATING 49
SELECTED QUARTERLY OPERATING RESULTS (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
SELECTED QUARTERLY OPERATING RESULTS [Abstract] | |
Selected Quarterly Operating Results | SELECTED QUARTERLY OPERATING RESULTS The following table presents our unaudited financial information for the eight quarterly periods ended September 30, 2016. This unaudited financial information has been prepared in accordance with accounting principles generally accepted in the United States of America, applied on a basis consistent with the annual audited financial statements and in the opinion of management, include all necessary adjustments, which consist only of normal recurring adjustments necessary to present fairly the financial results for the periods. The results for any quarter are not necessarily indicative of results for any future period. CABOT MICROELECTRONICS CORPORATION (Unaudited and in thousands, except per share amounts) Sept. 30, 2016 June 30, 2016 March 31, 2016 Dec. 31, 2015 Sept. 30, 2015 June 30, 2015 March 31, 2015 Dec. 31, 2014 Revenue $ 122,684 $ 108,152 $ 99,244 $ 100,369 $ 100,137 $ 97,168 $ 104,858 $ 111,934 Cost of goods sold 61,598 56,127 52,348 50,174 48,115 48,609 50,182 54,960 Gross profit 61,086 52,025 46,896 50,195 52,022 48,559 54,676 56,974 Operating expenses: Research, development and technical 15,842 12,928 14,934 14,828 14,856 14,773 15,131 15,018 Selling and marketing 8,057 6,243 6,668 6,749 5,763 5,804 5,777 7,639 General and administrative 11,454 10,738 12,990 14,263 13,553 12,830 14,296 11,751 Total operating expenses 35,353 29,909 34,592 35,840 34,172 33,407 35,204 34,408 Operating income 25,733 22,116 12,304 14,355 17,850 15,152 19,472 22,566 Interest expense 1,187 1,178 1,191 1,167 1,494 1,065 1,059 906 Other income (expense), net 257 (246 ) 452 190 116 (160 ) (332 ) 1,057 Income before income taxes 24,803 20,692 11,565 13,378 16,472 13,927 18,081 22,717 Provision for income taxes 4,096 1,990 2,434 2,069 3,939 4,041 4,270 2,801 Net income $ 20,707 $ 18,702 $ 9,131 $ 11,309 $ 12,533 $ 9,886 $ 13,811 $ 19,916 Basic earnings per share $ 0.85 $ 0.78 $ 0.38 $ 0.46 $ 0.51 $ 0.40 $ 0.57 $ 0.83 Weighted average basic shares outstanding 24,234 23,929 24,061 24,142 24,144 24,333 24,057 23,651 Diluted earnings per share $ 0.83 $ 0.76 $ 0.37 $ 0.46 $ 0.50 $ 0.39 $ 0.55 $ 0.80 Weighted average diluted shares outstanding 24,678 24,325 24,408 24,549 24,583 24,813 24,693 24,486 Dividends per share $ 0.18 $ 0.18 $ 0.18 $ - $ - $ - $ - $ - |
BACKGROUND AND BASIS OF PRESE50
BACKGROUND AND BASIS OF PRESENTATION (Details) | 12 Months Ended |
Sep. 30, 2016Segment | |
BACKGROUND AND BASIS OF PRESENTATION [Abstract] | |
Number of reportable segments | 1 |
SUMMARY OF SIGNIFICANT ACCOUN51
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2016USD ($)mm | Sep. 30, 2016USD ($)Segmentmm | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | |
ACCOUNTS RECEIVABLE [Abstract] | ||||
Provision for Doubtful Accounts | $ 514 | $ 588 | $ (84) | $ (170) |
Accounts receivable, less allowance for doubtful accounts | $ 62,830 | 62,830 | 49,405 | |
Increase in accounts receivable due to increase in revenue, percentage | 22.50% | |||
Allowance for doubtful accounts [Roll Forward] | ||||
Balance, beginning of period | 1,224 | |||
Amounts charged to expense | $ 514 | 588 | (84) | $ (170) |
Deductions and adjustments | 16 | |||
Balance, end of period | $ 1,828 | $ 1,828 | $ 1,224 | |
Goodwill and Intangible Assets [Abstract] | ||||
Total number of reporting units | Segment | 4 | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||||
Intangibles impairment Expense | $ 1,000 | |||
Intercompany Loan Accounting [Abstract] | ||||
Size of polishing tool | mm | 300 | 300 | ||
Minimum [Member] | ||||
Goodwill and Intangible Assets [Abstract] | ||||
Finite-Lived Intangible Asset, Useful Life | 1 year | |||
Maximum [Member] | ||||
Goodwill and Intangible Assets [Abstract] | ||||
Finite-Lived Intangible Asset, Useful Life | 11 years | |||
Buildings [Member] | Minimum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 15 years | |||
Buildings [Member] | Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 25 years | |||
Machinery and Equipment [Member] | Minimum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 3 years | |||
Machinery and Equipment [Member] | Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 10 years | |||
Furniture and fixtures [Member] | Minimum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 5 years | |||
Furniture and fixtures [Member] | Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 10 years | |||
Information Systems [Member] | Minimum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 3 years | |||
Information Systems [Member] | Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 5 years | |||
Accounts Receivable [Member] | Taiwan Semiconductor Manufacturing Co. (TSMC) [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of net accounts receivable concentration | 12.90% | 12.90% | 12.60% | |
Accounts Receivable [Member] | Samsung Group (Samsung) [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of net accounts receivable concentration | 8.30% | 8.30% | 9.70% | |
Revenue [Member] | Taiwan Semiconductor Manufacturing Co. (TSMC) [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration of credit risk by customer | 15.00% | 18.00% | 22.00% | |
Revenue [Member] | Samsung Group (Samsung) [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration of credit risk by customer | 15.00% | 15.00% | 14.00% |
BUSINESS COMBINATION (Details)
BUSINESS COMBINATION (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 22, 2015 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 |
Business Acquisition [Line Items] | |||||||||||||
Acquisition of business, net of cash acquired | $ 126,976 | $ 0 | $ 0 | ||||||||||
Share-based compensation expense | 13,787 | 16,445 | 14,042 | ||||||||||
Revenue | $ 122,684 | $ 108,152 | $ 99,244 | $ 100,369 | $ 100,137 | $ 97,168 | $ 104,858 | $ 111,934 | 430,449 | 414,097 | 424,666 | ||
Net income (loss) | 20,707 | $ 18,702 | 9,131 | 11,309 | 12,533 | $ 9,886 | $ 13,811 | $ 19,916 | 59,849 | 56,146 | $ 50,751 | ||
Fair values of assets acquired and liabilities assumed [Abstract] | |||||||||||||
Goodwill | 100,639 | 40,442 | 100,639 | 40,442 | |||||||||
Intangibles impairment Expense | 1,000 | ||||||||||||
NexPlanar [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Percentage of voting interests acquired | 100.00% | ||||||||||||
Acquisition of business, net of cash acquired | $ 126,976 | ||||||||||||
Cash Acquired from Acquisition | 15,261 | ||||||||||||
Purchase price | 142,167 | ||||||||||||
Share-based compensation expense | 154 | ||||||||||||
Purchase price adjustment | $ 70 | ||||||||||||
Revenue | 23,492 | ||||||||||||
Net income (loss) | (7,795) | ||||||||||||
Fair values of assets acquired and liabilities assumed [Abstract] | |||||||||||||
Total purchase consideration | 142,237 | ||||||||||||
Cash | 15,261 | ||||||||||||
Accounts receivable | 3,052 | ||||||||||||
Inventories | 2,768 | ||||||||||||
Prepaid expenses and other current assets | 1,712 | ||||||||||||
Property, plant and equipment | 6,901 | ||||||||||||
Intangible assets | 55,000 | ||||||||||||
Deferred tax assets | 20,509 | ||||||||||||
Other long-term assets | 1,458 | ||||||||||||
Accounts payable | (1,057) | ||||||||||||
Accrued expenses and other current liabilities | (1,472) | ||||||||||||
Deferred tax liabilities | (20,313) | ||||||||||||
Total identifiable net assets | 83,819 | ||||||||||||
Goodwill | $ 58,418 | ||||||||||||
Transaction and acquisition-related expenses | $ 816 | ||||||||||||
Intangibles impairment Expense | $ 1,000 | ||||||||||||
Weighted average useful life | 7 years 8 months 12 days | ||||||||||||
Business acquisition, pro forma information [Abstract] | |||||||||||||
Revenues | 431,856 | 437,326 | |||||||||||
Net income | $ 60,620 | $ 46,928 | |||||||||||
Earnings per share - basic (in dollars per share) | $ 2.50 | $ 1.93 | |||||||||||
Earnings per share - diluted (in dollars per share) | $ 2.46 | $ 1.89 | |||||||||||
Inventory adjustments | $ 403 | ||||||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||||||||
Preliminary fair value | 55,000 | ||||||||||||
NexPlanar [Member] | General and Administrative Expense [Member] | |||||||||||||
Fair values of assets acquired and liabilities assumed [Abstract] | |||||||||||||
Transaction and acquisition-related expenses | $ 290 | $ 526 | |||||||||||
NexPlanar [Member] | Trade Name [Member] | |||||||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||||||||
Preliminary fair value | $ 8,000 | ||||||||||||
Useful life | 7 years | ||||||||||||
NexPlanar [Member] | Customer Relationships [Member] | |||||||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||||||||
Preliminary fair value | $ 8,000 | ||||||||||||
Useful life | 11 years | ||||||||||||
NexPlanar [Member] | Developed Technology - Product Family A [Member] | |||||||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||||||||
Preliminary fair value | $ 32,000 | ||||||||||||
Useful life | 7 years | ||||||||||||
NexPlanar [Member] | Developed Technology - Product Family B [Member] | |||||||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||||||||
Preliminary fair value | $ 2,000 | ||||||||||||
Useful life | 9 years | ||||||||||||
NexPlanar [Member] | In-process Technology [Member] | |||||||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||||||||
Preliminary fair value | $ 5,000 |
BUSINESS COMBINATION, ASU 2015-
BUSINESS COMBINATION, ASU 2015-16 (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Amortization expense | $ 210 | $ 8,176 | $ 2,346 | $ 2,474 |
Decrease in deferred income taxes | (2,140) | |||
ASU 2015-16 [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Intangible assets | 55,000 | 55,000 | ||
ASU 2015-16 [Member] | Previously Reported [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Intangible assets | $ 61,000 | $ 61,000 |
FAIR VALUE OF FINANCIAL INSTR54
FAIR VALUE OF FINANCIAL INSTRUMENTS, Schedule of Fair Value of Financial Instruments (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 30, 2015 |
Assets, Fair Value Disclosure [Abstract] | ||
Cash and cash equivalents | $ 287,479 | $ 354,190 |
Other long-term investments | 1,028 | 1,720 |
Derivative financial instruments | 28 | 14 |
Total Assets | 288,535 | 355,924 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative financial instruments | 1,469 | 1,406 |
Total liabilities | 1,469 | 1,406 |
Level 1 [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Cash and cash equivalents | 287,479 | 354,190 |
Other long-term investments | 1,028 | 1,720 |
Derivative financial instruments | 0 | 0 |
Total Assets | 288,507 | 355,910 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative financial instruments | 0 | 0 |
Total liabilities | 0 | 0 |
Level 2 [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Cash and cash equivalents | 0 | 0 |
Other long-term investments | 0 | 0 |
Derivative financial instruments | 28 | 14 |
Total Assets | 28 | 14 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative financial instruments | 1,469 | 1,406 |
Total liabilities | 1,469 | 1,406 |
Level 3 [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Cash and cash equivalents | 0 | 0 |
Other long-term investments | 0 | 0 |
Derivative financial instruments | 0 | 0 |
Total Assets | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative financial instruments | 0 | 0 |
Total liabilities | $ 0 | $ 0 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 30, 2015 |
INVENTORIES [Abstract] | ||
Raw materials | $ 45,109 | $ 42,603 |
Work in process | 4,668 | 5,487 |
Finished goods | 22,346 | 22,588 |
Total | $ 72,123 | $ 70,678 |
PROPERTY, PLANT AND EQUIPMENT56
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment | $ 360,163 | $ 319,497 | |
Less: accumulated depreciation and amortization of assets under capital leases | (253,667) | (225,754) | |
Net property, plant and equipment | 106,496 | 93,743 | $ 100,821 |
Depreciation expense, including amortization of assets recorded under capital leases | 16,915 | 16,060 | 17,467 |
Impairment expense | 2,320 | ||
Impairment expense, cost of goods sold | 2,236 | ||
Impairment expense, selling and marketing | $ 84 | ||
Land [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment | 18,636 | 17,076 | |
Buildings [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment | 100,084 | 92,720 | |
Machinery and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment | 198,870 | 167,448 | |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment | 6,642 | 6,172 | |
Information Systems [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment | 29,573 | 28,528 | |
Construction in Progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment | $ 6,358 | $ 7,553 |
GOODWILL AND OTHER INTANGIBLE57
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Goodwill [Roll Forward] | ||||
Goodwill | $ 100,639 | $ 100,639 | $ 40,442 | |
Goodwill, Acquired During Period | 58,418 | |||
Goodwill, Foreign Currency Translation Gain (Loss) | 1,779 | |||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross carrying amount subject to amortization | 80,914 | 80,914 | 30,265 | |
Accumulated Amortization | 35,628 | 35,628 | 26,890 | |
Indefinite-lived Intangible Assets by Major Class [Line Items] | ||||
Total other intangible assets not subject to amortization | 5,190 | 5,190 | 1,190 | |
Total other intangible assets | 86,104 | 86,104 | 31,455 | |
Other intangible assets [Abstract] | ||||
Amortization expense | 210 | 8,176 | 2,346 | $ 2,474 |
Estimated future amortization expense [Abstract] | ||||
2,017 | 7,780 | 7,780 | ||
2,018 | 7,104 | 7,104 | ||
2,019 | 6,675 | 6,675 | ||
2,020 | 6,670 | 6,670 | ||
2,021 | 6,664 | 6,664 | ||
Impairment expense | 1,000 | |||
In-process Technology [Member] | ||||
Indefinite-lived Intangible Assets by Major Class [Line Items] | ||||
Other indefinite-lived intangible assets | 4,000 | 4,000 | 0 | |
Other Indefinite-lived Intangibles [Member] | ||||
Indefinite-lived Intangible Assets by Major Class [Line Items] | ||||
Other indefinite-lived intangible assets | 1,190 | 1,190 | 1,190 | |
Product Technology [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross carrying amount subject to amortization | 42,194 | 42,194 | 8,053 | |
Accumulated Amortization | 12,718 | 12,718 | 7,490 | |
Acquired Patents and Licenses [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross carrying amount subject to amortization | 8,270 | 8,270 | 8,270 | |
Accumulated Amortization | 8,155 | 8,155 | 7,845 | |
Trade Secrets and Know How [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross carrying amount subject to amortization | 2,550 | 2,550 | 2,550 | |
Accumulated Amortization | 2,550 | 2,550 | 2,550 | |
Customer relationships, distribution rights and Other [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross carrying amount subject to amortization | 27,900 | 27,900 | 11,392 | |
Accumulated Amortization | $ 12,205 | $ 12,205 | $ 9,005 |
OTHER LONG-TERM ASSETS (Details
OTHER LONG-TERM ASSETS (Details) $ in Thousands | 12 Months Ended | |
Sep. 30, 2016USD ($)Security | Sep. 30, 2015USD ($) | |
OTHER LONG-TERM ASSETS [Abstract] | ||
Auction rate securities (ARS) | $ 5,494 | $ 5,694 |
Long-term contract asset | 3,055 | 3,995 |
Other long-term assets | 2,900 | 3,595 |
Other long-term investments | 1,028 | 1,720 |
Total | $ 12,477 | $ 15,004 |
Number of auction rate securities | Security | 2 | |
Minimum maturity period of auction rate securities (ARS) | 10 years | |
Fair value of auction rate securities | $ 5,066 | |
Gross unrecognized loss of ARS | 428 | |
Long-term liability, SERP investments | 1,028 | |
Long-term contract asset face amount | $ 4,500 |
ACCRUED EXPENSES, INCOME TAXE59
ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 30, 2015 |
ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES [Abstract] | ||
Accrued compensation | $ 17,856 | $ 23,793 |
Dividends Payable | 4,502 | 0 |
Goods and services received, not yet invoiced | 2,648 | 1,830 |
Deferred revenue and customer advances | 782 | 538 |
Warranty accrual | 243 | 209 |
Income taxes payable | 7,878 | 4,276 |
Taxes, other than income taxes | 775 | 975 |
Current Portion Long Term Contract Liability | 1,500 | 0 |
Other | 5,211 | 4,825 |
Total | $ 41,395 | $ 36,446 |
DEBT (Details)
DEBT (Details) - USD ($) $ in Thousands | Jun. 27, 2014 | Jun. 26, 2014 | Feb. 29, 2012 | Jun. 30, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | Feb. 13, 2012 |
Debt Instrument [Line Items] | ||||||||
Amount drawn from increase in loan commitments | $ 0 | $ 0 | $ 17,500 | |||||
Debt issuance costs | 0 | 0 | $ 550 | |||||
Current portion of long-term debt | 7,656 | $ 8,750 | ||||||
Credit Agreement [Member] | Revolving Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, borrowing capacity | $ 100,000 | |||||||
Maturity date of credit facility | Jun. 27, 2019 | |||||||
Credit Agreement [Member] | Term Loan [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount of debt | $ 157,500 | $ 175,000 | ||||||
Debt issuance costs | $ 2,658 | |||||||
Fair value of debt | $ 155,313 | |||||||
Amendment [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate description | Borrowings under the amended Credit Facilities (other than in respect of swing-line loans) bear interest at a rate per annum equal to the “Applicable Rate” (as defined below) plus, at our option, either (1) a LIBOR rate determined by reference to the cost of funds for deposits in the relevant currency for the interest period relevant to such borrowing or (2) the “Base Rate”, which is the highest of (x) the prime rate of Bank of America, N.A., (y) the federal funds rate plus 1/2 of 1.00% and (z) the one-month LIBOR rate plus 1.00%. The current Applicable Rate for borrowings under the Credit Facilities is 1.50%, as amended, with respect to LIBOR borrowings and 0.25% with respect to Base Rate borrowings, with such Applicable Rate subject to adjustment based on our consolidated leverage ratio. Swing-line loans bear interest at the Base Rate plus the Applicable Rate for Base Rate loans under the Revolving Credit Facility. | |||||||
Debt issuance costs | $ 550 | |||||||
Debt issuance costs, current | $ 410 | |||||||
Debt issuance costs, noncurrent | $ 684 | |||||||
Weighted average fixed rate | 1.50% | |||||||
Percentage of variable rate debt converted into fixed debt rate | 50.00% | |||||||
Covenant terms | The Credit Agreement contains covenants that restrict the ability of the Company and its subsidiaries to take certain actions, including, among other things and subject to certain significant exceptions: creating liens, incurring indebtedness, making investments, engaging in mergers, selling property, paying dividends or amending organizational documents. The Credit Agreement requires us to comply with certain financial ratio maintenance covenants. These include a maximum consolidated leverage ratio of 2.75 to 1.00 and a minimum consolidated fixed charge coverage ratio of 1.25 to 1.00 for the period January 1, 2016 through the expiration of the Credit Agreement. As of September 30, 2016, our consolidated leverage ratio was 1.31 to 1.00 and our consolidated fixed charge coverage ratio was 3.76 to 1.00. The Credit Agreement also contains customary affirmative covenants and events of default. We believe we are in compliance with these covenants. | |||||||
Consolidated leverage ratio | 1.31 | |||||||
Consolidated fixed charge coverage ratio | 3.76 | |||||||
Amendment [Member] | Minimum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Consolidated fixed charge coverage ratio | 1.25 | |||||||
Amendment [Member] | Maximum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Consolidated leverage ratio | 2.75 | |||||||
Amendment [Member] | Federal Funds Rate [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.50% | |||||||
Amendment [Member] | LIBOR [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1.00% | |||||||
Current applicable rate | 1.50% | |||||||
Amendment [Member] | Base Rate [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Current applicable rate | 0.25% | |||||||
Amendment [Member] | Revolving Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, borrowing capacity | $ 75,000 | |||||||
Maturity date of credit facility | Feb. 13, 2017 | |||||||
Interest rate description | In addition to paying interest on outstanding principal under the Credit Agreement, we pay a commitment fee to the lenders under the Revolving Credit Facility in respect of the unutilized commitments thereunder. As amended, the fee ranges from 0.20% to 0.30%, based on our consolidated leverage ratio. | |||||||
Amendment [Member] | Revolving Credit Facility [Member] | Minimum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Commitment fee percentage | 0.20% | |||||||
Amendment [Member] | Revolving Credit Facility [Member] | Maximum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Commitment fee percentage | 0.30% | |||||||
Amendment [Member] | Term Loan [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount of debt | $ 175,000 | |||||||
Increase in loan commitments | 17,500 | |||||||
Amount drawn from increase in loan commitments | $ 17,500 | |||||||
Long-term Debt, by Maturity [Abstract] | ||||||||
2,017 | $ 7,656 | |||||||
2,018 | 14,219 | |||||||
2,019 | 133,438 | |||||||
Long Term Debt | $ 155,313 |
DERIVATIVE FINANCIAL INSTRUME61
DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2014 | |
Derivative [Line Items] | |||
Unrealized Gain | $ 84 | ||
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimated Net Amount to be Transferred | $ 626 | ||
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimate of Time to Transfer | 12 months | ||
Foreign Exchange Contract [Member] | Buy [Member] | |||
Derivative [Line Items] | |||
Derivative, Notional Amount | $ 8,858 | $ 1,034 | |
Foreign Exchange Contract [Member] | Sell [Member] | |||
Derivative [Line Items] | |||
Derivative, Notional Amount | 15,635 | $ 18,690 | |
Interest Rate Swap [Member] | |||
Derivative [Line Items] | |||
Outstanding variable rate debt | $ 86,406 | ||
Interest Rate Swap [Member] | Buy [Member] | |||
Derivative [Line Items] | |||
Derivative, Notional Amount | $ 77,656 |
DERIVATIVE FINANCIAL INSTRUME62
DERIVATIVE FINANCIAL INSTRUMENTS, Schedule of Fair Value of Derivative Instruments in the Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 30, 2015 |
Foreign Exchange Contract [Member] | Prepaid Expenses and Other Current Assets [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of foreign exchange contract asset derivatives | $ 28 | $ 14 |
Fair value of foreign exchange contract liability derivatives | 0 | 0 |
Foreign Exchange Contract [Member] | Accrued Expenses and Other Current Liabilities [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of foreign exchange contract asset derivatives | 0 | 0 |
Fair value of foreign exchange contract liability derivatives | 202 | 8 |
Interest Rate Swap [Member] | Accrued Expenses and Other Current Liabilities [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of foreign exchange contract asset derivatives | 0 | 0 |
Fair value of foreign exchange contract liability derivatives | 612 | 885 |
Interest Rate Swap [Member] | Other Noncurrent Assets [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of foreign exchange contract asset derivatives | 0 | 0 |
Fair value of foreign exchange contract liability derivatives | 0 | 0 |
Interest Rate Swap [Member] | Other Long-term Liabilities [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of foreign exchange contract asset derivatives | 0 | 0 |
Fair value of foreign exchange contract liability derivatives | $ 655 | $ 513 |
DERIVATIVE FINANCIAL INSTRUME63
DERIVATIVE FINANCIAL INSTRUMENTS, Schedule of the Effect of Derivative Instruments on the Consolidated Statement of Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Foreign Exchange Contract [Member] | Other Income (Expense), Net [Member] | Not Designated as Hedging Instrument [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) recognized in statement of income | $ 676 | $ (1,674) | $ (1,289) |
ACCUMULATED OTHER COMPREHENSI64
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance, beginning of period | $ 428,964 | $ 372,002 | $ 323,442 |
Foreign currency translation adjustments, net of tax | 15,996 | (14,126) | (8,136) |
Net unrealized gain on marketable securities | 0 | 0 | 151 |
Change in fair value, net of tax | (499) | (1,511) | |
Reclassifications adjustment into earnings, net of tax | 583 | 610 | |
Change in pension and other posteretirement, net of tax | (434) | (318) | (196) |
Balance, end of period | 497,648 | 428,964 | 372,002 |
Other Comprehensive Income (Loss), Tax [Abstract] | |||
Foreign currency translation adjustment, tax | 1,854 | (1,731) | (1,597) |
Change in pension and other postretirement, tax | (584) | 0 | 0 |
Change in fair value, tax | (274) | (833) | 0 |
Reclassification adjustment into earnings, tax | 321 | 336 | 0 |
AOCI Attributable to Parent [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance, beginning of period | (6,090) | 9,255 | 17,436 |
Foreign currency translation adjustments, net of tax | 15,996 | (14,126) | (8,136) |
Net unrealized gain on marketable securities | 151 | ||
Change in pension and other posteretirement, net of tax | (434) | (318) | (196) |
Balance, end of period | 9,556 | (6,090) | 9,255 |
Foreign Currency Translation Adjustment [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance, beginning of period | (4,011) | 10,115 | 18,251 |
Foreign currency translation adjustments, net of tax | 15,996 | (14,126) | (8,136) |
Net unrealized gain on marketable securities | 0 | ||
Change in fair value, net of tax | 0 | 0 | |
Reclassifications adjustment into earnings, net of tax | 0 | 0 | |
Change in pension and other posteretirement, net of tax | 0 | 0 | 0 |
Balance, end of period | 11,985 | (4,011) | 10,115 |
Unrealized Gain (Loss) on Cash Flow Hedges [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance, beginning of period | (901) | 0 | 0 |
Foreign currency translation adjustments, net of tax | 0 | 0 | 0 |
Net unrealized gain on marketable securities | 0 | ||
Change in fair value, net of tax | (499) | (1,511) | |
Reclassifications adjustment into earnings, net of tax | 583 | 610 | |
Change in pension and other posteretirement, net of tax | 0 | 0 | 0 |
Balance, end of period | (817) | (901) | 0 |
Pension and Other Postretirement Liabilities [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance, beginning of period | (1,178) | (860) | (664) |
Foreign currency translation adjustments, net of tax | 0 | 0 | |
Net unrealized gain on marketable securities | 0 | ||
Change in fair value, net of tax | 0 | 0 | |
Reclassifications adjustment into earnings, net of tax | 0 | 0 | |
Change in pension and other posteretirement, net of tax | (434) | (318) | (196) |
Balance, end of period | (1,612) | (1,178) | (860) |
Unrealized Gain (Loss) on Marketable Securities [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance, beginning of period | 0 | 0 | (151) |
Foreign currency translation adjustments, net of tax | 0 | 0 | 0 |
Net unrealized gain on marketable securities | 151 | ||
Change in fair value, net of tax | 0 | 0 | |
Reclassifications adjustment into earnings, net of tax | 0 | 0 | |
Change in pension and other posteretirement, net of tax | 0 | 0 | 0 |
Balance, end of period | $ 0 | $ 0 | $ 0 |
SHARE-BASED COMPENSATION PLAN65
SHARE-BASED COMPENSATION PLANS (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Mar. 31, 2016USD ($)Employee | Sep. 30, 2016USD ($)Awards$ / sharesshares | Sep. 30, 2015USD ($)$ / sharesshares | Sep. 30, 2014USD ($)$ / sharesshares | Dec. 31, 2014USD ($) | Mar. 31, 2008shares | Feb. 29, 2008shares | |
Omnibus Incentive Plan [Abstract] | |||||||
Number of equity incentive awards | Awards | 6 | ||||||
Number of shares authorized for issuance (in shares) | shares | 4,934,444 | ||||||
Number of shares authorized under newly issued plan (in shares) | shares | 2,901,360 | ||||||
Number of shares available under previously existing plan (in shares) | shares | 2,033,084 | ||||||
Share based compensation expense | $ 13,787 | $ 16,445 | $ 14,042 | ||||
Employee stock purchase plan [Abstract] | |||||||
Number of shares issued, employee stock ownership plan (in shares) | shares | 77,437 | 65,735 | 81,700 | ||||
Stock Options Activity [Roll Forward] | |||||||
Exercised (in shares) | shares | (606,562) | (1,324,646) | (1,449,002) | ||||
Weighted Average Grant Date Fair Value [Roll Forward] | |||||||
Share-based compensation expense | $ 13,787 | $ 16,445 | $ 14,042 | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||||
Stock based compensation - tax benefit | (4,341) | (5,511) | (4,722) | ||||
Total share-based compensation expense, net of tax | 9,600 | 10,934 | 9,320 | ||||
Fair Value of Unvested Equity | $ 5,033 | ||||||
Cost of Goods Sold [Member] | |||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||||
Stock based compensation expense | 2,105 | 1,912 | 1,866 | ||||
Research, Development and technical [Member] | |||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||||
Stock based compensation expense | 1,633 | 1,596 | 1,475 | ||||
Selling and Marketing [Member] | |||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||||
Stock based compensation expense | 1,618 | 1,075 | 1,298 | ||||
General and Administrative Expense [Member] | |||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||||
Stock based compensation expense | 8,585 | $ 11,862 | 9,403 | ||||
NexPlanar [Member] | |||||||
Omnibus Incentive Plan [Abstract] | |||||||
Share based compensation expense | 154 | ||||||
Weighted Average Grant Date Fair Value [Roll Forward] | |||||||
Share-based compensation expense | 154 | ||||||
Accelerated share-based compensation expense | 492 | ||||||
NexPlanar [Member] | General and Administrative Expense [Member] | |||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||||
Stock based compensation expense | $ 646 | ||||||
Director [Member] | |||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||||
Number of non-employee directors who have completed two full terms of service | Employee | 5 | ||||||
Fair value of awards for completing minimum full terms of service | $ 879 | ||||||
Vesting period | 1 year | ||||||
Director [Member] | Directors' Deferred Compensation Plan [Member] | |||||||
Directors' deferred compensation plan [Abstract] | |||||||
Cumulative number of shares deferred (in shares) | shares | 16,641 | 63,979 | |||||
Share based compensation expense | $ 42 | $ 95 | 95 | ||||
Stock Options [Member] | |||||||
Omnibus Incentive Plan [Abstract] | |||||||
Stock based compensation, contractual term | 10 years | ||||||
Stock based compensation, vesting period | 4 years | ||||||
Amount vested in first year for non employee directors (in hundredths) | 100.00% | ||||||
Share based compensation expense | $ 6,767 | $ 7,173 | $ 6,947 | ||||
Share based compensation arrangements, Fair value assumptions and methodology [Abstract] | |||||||
Weighted-average grant date fair value (in dollars per share) | $ / shares | $ 14.47 | $ 16.99 | $ 15.78 | ||||
Expected term (in years) | 6 years 6 months 22 days | 6 years 3 months 18 days | 6 years 4 months 24 days | ||||
Expected volatility (in hundredths) | 26.00% | 33.00% | 32.00% | ||||
Risk-free rate of return (in hundredths) | 1.90% | 1.90% | 1.90% | ||||
Dividend yield (in hundredths) | 0.30% | 0.00% | 0.00% | ||||
Stock Options Activity [Roll Forward] | |||||||
Outstanding, beginning of period (in shares) | shares | 2,159,793 | ||||||
Granted (in shares) | shares | 540,469 | ||||||
Exercised (in shares) | shares | (606,562) | ||||||
Forfeited or canceled (in shares) | shares | (41,148) | ||||||
Outstanding, end of period (in shares) | shares | 2,052,552 | 2,159,793 | |||||
Exercisable, end of period ( in shares) | shares | 1,156,454 | ||||||
Expected to vest, end of period (in shares) | shares | 884,474 | ||||||
Weighted Average Exercise Price [Roll Forward] | |||||||
Weighted average exercise price, outstanding, beginning of period (in dollars per share) | $ / shares | $ 33.90 | ||||||
Weighted average exercise price, granted (in dollars per share) | $ / shares | 38.56 | ||||||
Weighted average exercise price, exercised (in dollars per share) | $ / shares | 27.41 | ||||||
Weighted average exercise price, forfeited or canceled (in dollars per share) | $ / shares | 37.49 | ||||||
Weighted average exercise price, outstanding, end of period (in dollars per share) | $ / shares | 36.97 | $ 33.90 | |||||
Weighted average exercise price, exercisable, end of period (in dollars per share) | $ / shares | 33.17 | ||||||
Weighted average exercise price, expected to vest, end of period (in dollars per share) | $ / shares | $ 41.86 | ||||||
Additional Disclosures [Abstract] | |||||||
Weighted average remaining contractual term, outstanding, end of period (in years) | 6 years 9 months 18 days | ||||||
Weighted average remaining contractual term, exercisable, end of period (in years) | 5 years 6 months | ||||||
Weighted average remaining contractual term, expected to vest, end of period (in years) | 8 years 4 months 24 days | ||||||
Aggregate intrinsic value, outstanding, end of period | $ 32,711 | ||||||
Aggregate intrinsic value, exercisable, end of period | 22,826 | ||||||
Aggregate intrinsic value, expected to vest, end of period | $ 9,772 | ||||||
Closing stock price (in dollars per share) | $ / shares | $ 52.91 | ||||||
Total intrinsic value of options exercised | $ 12,317 | $ 31,546 | $ 21,647 | ||||
Cash received from options exercised | 16,623 | 33,177 | 40,248 | ||||
Actual tax benefit realized for the tax deductions from options exercised | 4,076 | 10,569 | 7,611 | ||||
Total fair value of stock options vested | 7,880 | 7,005 | 6,645 | ||||
Total unrecognized share-based compensation expense | $ 10,039 | ||||||
Compensation cost, weighted-average period for recognition (in years) | 2 years 1 month 6 days | ||||||
Weighted Average Grant Date Fair Value [Roll Forward] | |||||||
Share-based compensation expense | $ 6,767 | 7,173 | 6,947 | ||||
Restricted Stock [Member] | |||||||
Omnibus Incentive Plan [Abstract] | |||||||
Stock based compensation, vesting period | 4 years | ||||||
Amount vested in first year for non employee directors (in hundredths) | 100.00% | ||||||
Share based compensation expense | $ 6,369 | $ 8,491 | 6,320 | ||||
Additional Disclosures [Abstract] | |||||||
Total unrecognized share-based compensation expense | $ 11,175 | ||||||
Compensation cost, weighted-average period for recognition (in years) | 2 years 4 months 24 days | ||||||
Restricted stock and restricted stock awards units [Roll Forward] | |||||||
Restricted stocks awards and units, nonvested, beginning of period (in shares) | shares | 382,496 | ||||||
Restricted stocks awards and units, granted (in shares) | shares | 225,244 | ||||||
Restricted stocks awards and units, vested (in shares) | shares | (256,550) | ||||||
Restricted stocks awards and units, forfeited (in shares) | shares | (10,730) | ||||||
Restricted stocks awards and units, nonvested, end of period (in shares) | shares | 340,460 | 382,496 | |||||
Weighted Average Grant Date Fair Value [Roll Forward] | |||||||
Weighted average grant date fair value, nonvested, beginning of period (in dollars per share) | $ / shares | $ 43.05 | ||||||
Weighted average grant date fair value, granted (in dollars per share) | $ / shares | 41.81 | ||||||
Weighted average grant date fair value, vested (in dollars per share) | $ / shares | 41.86 | ||||||
Weighted average grant date fair value, forfeited (in dollars per share) | $ / shares | 42.98 | ||||||
Weighted average grant date fair value, nonvested, end of period (in dollars per share) | $ / shares | $ 43.13 | $ 43.05 | |||||
Total fair values of restricted stock awards and restricted stock units vested | $ 10,740 | $ 7,222 | 5,916 | ||||
Share-based compensation expense | $ 6,369 | 8,491 | 6,320 | ||||
Other than Options or SARs [Member] | |||||||
Omnibus Incentive Plan [Abstract] | |||||||
Number of shares authorized other than options or SARS (in shares) | shares | 2,030,952 | ||||||
Incentive Stock Options [Member] | |||||||
Omnibus Incentive Plan [Abstract] | |||||||
Number of shares authorized for incentive stock options (in shares) | shares | 2,538,690 | ||||||
Deposit Share Plan [Member] | |||||||
Omnibus Incentive Plan [Abstract] | |||||||
Stock based compensation, vesting period | 3 years | ||||||
Deposit share plan match in restricted shares (in hundredths) | 50.00% | ||||||
Employee Stock Purchase Plan [Member] | |||||||
Omnibus Incentive Plan [Abstract] | |||||||
Number of shares authorized for issuance (in shares) | shares | 505,151 | 975,000 | 475,000 | ||||
Share based compensation expense | $ 763 | $ 686 | $ 680 | ||||
Employee stock purchase plan [Abstract] | |||||||
Percentage annual earnings withheld to purchase stock, maximum (in hundredths) | 10.00% | ||||||
Maximum discounted stock purchase price (in hundredths) | 85.00% | ||||||
Number of shares issued, employee stock ownership plan (in shares) | shares | 77,437 | 65,735 | 81,700 | ||||
Share based compensation arrangements, Fair value assumptions and methodology [Abstract] | |||||||
Weighted-average grant date fair value - ESPP (in dollars per share) | $ / shares | $ 9.57 | $ 10.17 | $ 9.11 | ||||
Expected term (in years) | 6 months | 6 months | 6 months | ||||
Expected volatility (in hundredths) | 24.00% | 24.00% | 25.00% | ||||
Risk-free rate of return (in hundredths) | 0.40% | 0.10% | 0.10% | ||||
Dividend yield (in hundredths) | 0.50% | 0.00% | 0.00% | ||||
Weighted Average Grant Date Fair Value [Roll Forward] | |||||||
Share-based compensation expense | $ 763 | $ 686 | $ 680 |
SAVINGS PLAN (Details)
SAVINGS PLAN (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
SAVINGS PLAN [Abstract] | |||
Maximum participants' contributions as a percentage of their eligible compensation | 60.00% | ||
Company's matching contribution on participants' first four percent contribution | 100.00% | ||
Company's matching contribution on participants' contributions over four percent | 50.00% | ||
Percentage of participant's contribution subject to company's one hundred percent matching contribution | 4.00% | ||
Percentage of participant's contribution subject to company's fifty percent matching contribution | 2.00% | ||
401(k) Plan expense | $ 4,624 | $ 4,111 | $ 4,547 |
Percentage of company's contribution vested at the time of contribution | 100.00% |
OTHER INCOME (EXPENSE), NET (De
OTHER INCOME (EXPENSE), NET (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
OTHER INCOME, NET [Abstract] | |||||||||||
Interest income | $ 949 | $ 365 | $ 194 | ||||||||
Other income (expense) | (296) | 316 | (54) | ||||||||
Total other income, net | $ 257 | $ (246) | $ 452 | $ 190 | $ 116 | $ (160) | $ (332) | $ 1,057 | $ 653 | $ 681 | $ 140 |
STOCKHOLDERS EQUITY (Details)
STOCKHOLDERS EQUITY (Details) $ in Thousands | 12 Months Ended | |||
Sep. 30, 2016USD ($)Voteshares | Sep. 30, 2015USD ($)shares | Sep. 30, 2014USD ($)shares | Jan. 07, 2016USD ($) | |
Capital Stock Activity [Rollforward] | ||||
Beginning Balance (in shares) | 33,489,181 | 31,927,601 | 30,213,577 | |
Exercise of stock options (in shares) | 606,562 | 1,324,646 | 1,449,002 | |
Restricted stock under EIP, net of forfeitures (in shares) | 86,277 | 172,010 | 176,026 | |
Restricted stock under Deposit Share Plan, net of forfeitures (in shares) | 1,847 | (811) | 7,296 | |
Common stock under ESPP (in shares) | 77,437 | 65,735 | 81,700 | |
Ending Balance (in shares) | 34,261,304 | 33,489,181 | 31,927,601 | |
Treasury Stock [Abstract] | ||||
Beginning Balance (in shares) | 9,041,678 | 8,142,687 | 6,866,675 | |
Repurchases of common stock under share repurchase plans (in shares) | 636,839 | 851,245 | 1,229,494 | |
Repurchases of common stock - other (in shares) | 66,125 | 47,746 | 46,518 | |
Ending Balance (in shares) | 9,744,642 | 9,041,678 | 8,142,687 | |
Number of votes each common stockholder is entitled to on matter submitted to a vote of stockholders | Vote | 1 | |||
Number of authorized shares of common stock (in shares) | 200,000,000 | 200,000,000 | ||
Share repurchase program, value of shares remaining to be repurchased | $ | $ 134,028 | |||
Cost of shares repurchased | $ | 25,980 | $ 40,026 | $ 53,000 | |
Share Repurchase Program [Member] | ||||
Treasury Stock [Abstract] | ||||
Share repurchase program, value of shares authorized to be repurchased | $ | $ 150,000 | |||
Prior Repurchase Program [Member] | ||||
Treasury Stock [Abstract] | ||||
Share repurchase program, value of shares authorized to be repurchased | $ | $ 75,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Before Income Taxes [Abstract] | |||||||||||
Domestic | $ 7,130 | $ 15,305 | $ 14,358 | ||||||||
Foreign | 63,308 | 55,892 | 54,236 | ||||||||
Income before income taxes | $ 24,803 | $ 20,692 | $ 11,565 | $ 13,378 | $ 16,472 | $ 13,927 | $ 18,081 | $ 22,717 | 70,438 | 71,197 | 68,594 |
U.S. federal and state [Abstract] | |||||||||||
Current | 609 | 6,496 | 8,978 | ||||||||
Deferred | (1,465) | 1,791 | 488 | ||||||||
Total | (856) | 8,287 | 9,466 | ||||||||
Foreign [Abstract] | |||||||||||
Current | 11,737 | 7,686 | 9,565 | ||||||||
Deferred | (292) | (922) | (1,188) | ||||||||
Total | 11,445 | 6,764 | 8,377 | ||||||||
Total U.S. and foreign | 4,096 | $ 1,990 | $ 2,434 | 2,069 | 3,939 | $ 4,041 | $ 4,270 | 2,801 | $ 10,589 | $ 15,051 | $ 17,843 |
Effective income tax rate reconciliation [Abstract] | |||||||||||
Federal statutory rate | 35.00% | 35.00% | 35.00% | ||||||||
U.S. benefits from research and experimentation activities | (3.50%) | (2.20%) | (0.60%) | ||||||||
State taxes, net of federal effect | (0.10%) | 0.60% | 0.80% | ||||||||
Foreign income at other than U.S. rates | (16.90%) | (21.40%) | (9.40%) | ||||||||
Executive compensation | 0.00% | 0.60% | 0.40% | ||||||||
Share-based compensation | 0.70% | 0.10% | 0.10% | ||||||||
Adjustment of prior amounts | 0.00% | 1.40% | 0.10% | ||||||||
Taiwan Restructuring | 0.00% | 7.20% | 0.00% | ||||||||
Domestic production deduction | (1.30%) | (1.30%) | (0.30%) | ||||||||
Other, net | 1.10% | 1.10% | (0.10%) | ||||||||
Provision for income taxes | 15.00% | 21.10% | 26.00% | ||||||||
Undistributed earnings of foreign subsidiaries | 188,899 | $ 188,899 | |||||||||
Deferred Tax Liability Not Recognized, Amount of Unrecognized Deferred Tax Liability, Undistributed Earnings of Foreign Subsidiaries | 37,000 | 37,000 | |||||||||
Effective Income Tax Rate Reconciliation, Deduction, Qualified Production Activity, Amount | 928 | ||||||||||
Reconciliation of gross unrecognized tax benefits [Roll Forward] | |||||||||||
Beginning balance | $ 1,773 | $ 701 | 1,773 | $ 701 | $ 758 | ||||||
Additions for tax positions relating to the current fiscal year | 364 | 194 | 59 | ||||||||
Additions for tax positions relating to prior fiscal years | 200 | 1,400 | 125 | ||||||||
Settlements with taxing authorities | (248) | (522) | (207) | ||||||||
Lapse of statute of limitations | 0 | 0 | (34) | ||||||||
Ending balance | 2,089 | 1,773 | 2,089 | 1,773 | $ 701 | ||||||
Accrued interest and penalties on uncertain tax positions | 65 | 47 | 65 | 47 | |||||||
Deferred tax assets [Abstract] | |||||||||||
Employee benefits | 4,612 | 4,061 | 4,612 | 4,061 | |||||||
Inventory | 3,117 | 3,271 | 3,117 | 3,271 | |||||||
Bad debt reserve | 615 | 391 | 615 | 391 | |||||||
Deferred Tax share-based compensation expense | 8,262 | 9,863 | 8,262 | 9,863 | |||||||
Credit and other carryforwards | 25,596 | 556 | 25,596 | 556 | |||||||
Depreciation and amortization | 0 | 1,263 | 0 | 1,263 | |||||||
Other | 1,487 | 3,599 | 1,487 | 3,599 | |||||||
Valuation allowance | (3,022) | (3,079) | (3,022) | (3,079) | |||||||
Total deferred tax assets | 40,667 | 19,925 | 40,667 | 19,925 | |||||||
Deferred tax liabilities [Abstract] | |||||||||||
Depreciation and amortization | 17,374 | 0 | 17,374 | 0 | |||||||
Translation adjustment | 2,079 | 55 | 2,079 | 55 | |||||||
Other | 542 | 339 | 542 | 339 | |||||||
Total deferred tax liabilities | $ 19,995 | $ 394 | $ 19,995 | 394 | |||||||
Carryforwards [Line Items] | |||||||||||
Operating loss carryforwards expiration dates | fiscal year 2017 and fiscal year 2036 | ||||||||||
Tax credit carryforward expiration dates | fiscal years 2027 through 2037 | ||||||||||
Foreign income tax adjustment | $ 868 | ||||||||||
Diluted earnings per share effect of foreign income tax adjustment (in dollars per share) | $ 0.04 | ||||||||||
Tax holiday rate percentage | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | ||||||
Percentage of local statutory rate in effect for 2016 | 50.00% | 50.00% | |||||||||
Percentage of local statutory rate in effect for 2017 | 50.00% | 50.00% | |||||||||
Approximate tax provision reduction as a result in the tax holiday | $ 3,771 | $ 5,446 | $ 3,770 | ||||||||
Tax Holiday approximate diluted earning per share benefit (in dollars per share) | $ 0.15 | $ 0.22 | $ 0.15 | ||||||||
Capital Loss Carryforward [Member] | |||||||||||
Carryforwards [Line Items] | |||||||||||
Tax credit carryforward, amount | $ 2,795 | $ 2,795 | |||||||||
Tax credit carryforward, valuation allowance | 2,795 | $ 2,795 | |||||||||
Internal Revenue Service (IRS) [Member] | |||||||||||
Income Tax Examination [Line Items] | |||||||||||
Tax periods open to examination by taxing authorities | fiscal years 2013 through 2016 | ||||||||||
Carryforwards [Line Items] | |||||||||||
Net operating loss carryforwards | 43,913 | $ 43,913 | |||||||||
Tax credit carryforward, amount | 2,471 | $ 2,471 | |||||||||
State and Local Jurisdiction [Member] | |||||||||||
Income Tax Examination [Line Items] | |||||||||||
Tax periods open to examination by taxing authorities | fiscal years 2012 through 2016 | ||||||||||
Carryforwards [Line Items] | |||||||||||
Net operating loss carryforwards | 35,910 | $ 35,910 | |||||||||
Tax credit carryforward, amount | 2,151 | 2,151 | |||||||||
Tax credit carryforward, valuation allowance | 2,084 | $ 2,084 | |||||||||
Foreign Country [Member] | |||||||||||
Income Tax Examination [Line Items] | |||||||||||
Tax periods open to examination by taxing authorities | fiscal years 2012 through 2016 | ||||||||||
Carryforwards [Line Items] | |||||||||||
Net operating loss carryforwards | 4,736 | $ 4,736 | |||||||||
Operating loss carryforwards, valuation allowance | 2,014 | 2,014 | |||||||||
Tax credit carryforward, amount | $ 2,442 | $ 2,442 |
COMMITMENTS AND CONTINGENCIES70
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Movement in standard product warranty accrual [Roll Forward] | |||
Balance as of beginning of period | $ 209 | ||
Reserve for product warranty during the reporting period | 595 | ||
Settlement of warranty | (561) | ||
Balance as of end of period | $ 243 | $ 209 | |
Lease commitments [Abstract] | |||
Expiration of cancelable and noncancelable leases, maximum | 5 years | ||
Rent expense under operating leases | $ 2,765 | 2,195 | $ 2,425 |
Operating leases, future minimum payments due: | |||
2,017 | 2,441 | ||
2,018 | 1,637 | ||
2,019 | 1,440 | ||
2,020 | 1,006 | ||
2,021 | 719 | ||
Thereafter | 2,845 | ||
Operating leases, total | 10,088 | ||
Purchase obligations [Abstract] | |||
Purchase obligation, due in 2017 | 1,500 | ||
Purchase obligation, due in 2018 | 1,500 | ||
Purchase obligation, due in 2019 | 1,500 | ||
Purchase obligation | 4,380 | ||
Current Portion Long Term Contract Liability | 1,500 | 0 | |
Long Term Contract Liability | 2,880 | ||
Contractual obligation | 7,933 | ||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Net Periodic Benefit Cost | 1,024 | 962 | $ 652 |
Defined Benefit Plan, Expected Future Benefit Payments, Fiscal Year Maturity [Abstract] | |||
2,017 | 407 | ||
2,018 | 335 | ||
2,019 | 373 | ||
2,020 | 628 | ||
2,021 | 459 | ||
2022 to 2026 | 3,888 | ||
Foreign Postretirement Benefit Plans, Defined Benefit [Member] | Japan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Projected benefit obligation | 7,091 | 5,197 | |
Accumulated benefit obligation | $ 5,827 | $ 3,941 | |
Weighted average discount rate | 0.25% | 1.25% | |
Expected rate of compensation increase | 2.00% | 2.00% | |
Pension costs in accumulated other comprehensive income | $ 1,667 | $ 1,076 | |
Foreign Postretirement Benefit Plans, Defined Benefit [Member] | South Korea [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit obligation | $ 1,822 | $ 1,155 | |
Weighted average discount rate | 3.00% | 4.00% | |
Expected rate of compensation increase | 5.00% | 4.50% | |
Pension costs in accumulated other comprehensive income | $ 530 | $ 102 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Numerator [Abstract] | |||||||||||
Net income | $ 20,707 | $ 18,702 | $ 9,131 | $ 11,309 | $ 12,533 | $ 9,886 | $ 13,811 | $ 19,916 | $ 59,849 | $ 56,146 | $ 50,751 |
Less: income attributable to participating securities | (361) | (483) | (442) | ||||||||
Net income available to common shareholders | $ 59,488 | $ 55,663 | $ 50,309 | ||||||||
Denominator[Abstract] | |||||||||||
Weighted-average common shares (Denominator for basic calculation, in shares) | 24,234,000 | 23,929,000 | 24,061,000 | 24,142,000 | 24,144,000 | 24,333,000 | 24,057,000 | 23,651,000 | 24,076,549 | 24,039,692 | 23,704,024 |
Weighted-average effect of dilutive securities [Abstract] | |||||||||||
Share-based compensation (in shares) | 400,444 | 592,123 | 906,884 | ||||||||
Diluted-weighted average common shares (Denominator for diluted calculation, in shares) | 24,678,000 | 24,325,000 | 24,408,000 | 24,549,000 | 24,583,000 | 24,813,000 | 24,693,000 | 24,486,000 | 24,476,993 | 24,631,815 | 24,610,908 |
Earnings per share [Abstract] | |||||||||||
Basic (in dollars per share) | $ 0.85 | $ 0.78 | $ 0.38 | $ 0.46 | $ 0.51 | $ 0.40 | $ 0.57 | $ 0.83 | $ 2.47 | $ 2.32 | $ 2.12 |
Diluted (in dollars per share) | $ 0.83 | $ 0.76 | $ 0.37 | $ 0.46 | $ 0.50 | $ 0.39 | $ 0.55 | $ 0.80 | $ 2.43 | $ 2.26 | $ 2.04 |
Stock Options [Member] | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Outstanding stock options excluded from diluted earnings (in shares) | 1,100,000 | 700,000 | 500,000 |
FINANCIAL INFORMATION BY INDU72
FINANCIAL INFORMATION BY INDUSTRY SEGMENT, GEOGRAPHIC AREA AND PRODUCT LINE (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2016USD ($)Segment | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | |
FINANCIAL INFORMATION BY INDUSTRY SEGMENT, GEOGRAPHIC AREA AND PRODUCT LINE [Abstract] | |||||||||||
Number of segment | Segment | 1 | ||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | $ 122,684 | $ 108,152 | $ 99,244 | $ 100,369 | $ 100,137 | $ 97,168 | $ 104,858 | $ 111,934 | $ 430,449 | $ 414,097 | $ 424,666 |
Property, plant and equipment, net | 106,496 | 93,743 | 106,496 | 93,743 | 100,821 | ||||||
United States [Member] | Reportable Geographical Components [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 62,400 | 55,989 | 51,036 | ||||||||
Property, plant and equipment, net | 50,595 | 43,239 | 50,595 | 43,239 | 44,585 | ||||||
Asia [Member] | Reportable Geographical Components [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 336,312 | 328,669 | 347,669 | ||||||||
Property, plant and equipment, net | 55,893 | 50,504 | 55,893 | 50,504 | 56,236 | ||||||
Europe [Member] | Reportable Geographical Components [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 31,737 | 29,439 | 25,961 | ||||||||
Property, plant and equipment, net | $ 8 | $ 0 | $ 8 | $ 0 | $ 0 |
FINANCIAL INFORMATION BY INDU73
FINANCIAL INFORMATION BY INDUSTRY SEGMENT, GEOGRAPHIC AREA AND PRODUCT LINE, REVENUE BY MAJOR CUSTOMERS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Taiwan [Member] | |||
Revenue, Major Customer [Line Items] | |||
Revenue | $ 122,671 | $ 124,460 | $ 138,049 |
South Korea [Member] | |||
Revenue, Major Customer [Line Items] | |||
Revenue | 76,082 | 70,608 | 71,420 |
China [Member] | |||
Revenue, Major Customer [Line Items] | |||
Revenue | $ 59,239 | $ 49,350 | $ 45,200 |
FINANCIAL INFORMATION BY INDU74
FINANCIAL INFORMATION BY INDUSTRY SEGMENT, GEOGRAPHIC AREA AND PRODUCT LINE, LONG-LIVED ASSETS BY MAJOR CUSTOMERS (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 |
Japan [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Property, plant and equipment, net | $ 26,268 | $ 22,572 | $ 27,110 |
Taiwan [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Property, plant and equipment, net | 17,949 | 17,419 | 16,675 |
South Korea [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Property, plant and equipment, net | $ 11,135 | $ 9,658 | $ 11,564 |
FINANCIAL INFORMATION BY INDU75
FINANCIAL INFORMATION BY INDUSTRY SEGMENT, GEOGRAPHIC AREA AND PRODUCT LINE, SEGMENT REPORTING INFORMATION BY PRODUCT TYPE (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenue from External Customer [Line Items] | |||||||||||
Revenue | $ 122,684 | $ 108,152 | $ 99,244 | $ 100,369 | $ 100,137 | $ 97,168 | $ 104,858 | $ 111,934 | $ 430,449 | $ 414,097 | $ 424,666 |
Tungsten Slurries [Member] | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 185,365 | 178,770 | 162,148 | ||||||||
Dielectric Slurries [Member] | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 99,141 | 96,386 | 118,079 | ||||||||
Other Metals Slurries [Member] | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 63,960 | 71,640 | 76,605 | ||||||||
Polishing Pads [Member] | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 52,067 | 32,048 | 33,824 | ||||||||
Engineered Surface Finishes [Member] | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 22,369 | 21,534 | 16,160 | ||||||||
Data Storage Slurries [Member] | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | $ 7,547 | $ 13,719 | $ 17,850 |
SELECTED QUARTERLY OPERATING 76
SELECTED QUARTERLY OPERATING RESULTS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
SELECTED QUARTERLY OPERATING RESULTS [Abstract] | |||||||||||
Revenue | $ 122,684 | $ 108,152 | $ 99,244 | $ 100,369 | $ 100,137 | $ 97,168 | $ 104,858 | $ 111,934 | $ 430,449 | $ 414,097 | $ 424,666 |
Cost of goods sold | 61,598 | 56,127 | 52,348 | 50,174 | 48,115 | 48,609 | 50,182 | 54,960 | 220,247 | 201,866 | 221,573 |
Gross profit | 61,086 | 52,025 | 46,896 | 50,195 | 52,022 | 48,559 | 54,676 | 56,974 | 210,202 | 212,231 | 203,093 |
Operating expenses: | |||||||||||
Research, development and technical | 15,842 | 12,928 | 14,934 | 14,828 | 14,856 | 14,773 | 15,131 | 15,018 | 58,532 | 59,778 | 59,354 |
Selling and marketing | 8,057 | 6,243 | 6,668 | 6,749 | 5,763 | 5,804 | 5,777 | 7,639 | 27,717 | 24,983 | 26,513 |
General and administrative | 11,454 | 10,738 | 12,990 | 14,263 | 13,553 | 12,830 | 14,296 | 11,751 | 49,445 | 52,430 | 45,418 |
Total operating expenses | 35,353 | 29,909 | 34,592 | 35,840 | 34,172 | 33,407 | 35,204 | 34,408 | 135,694 | 137,191 | 131,285 |
Operating income | 25,733 | 22,116 | 12,304 | 14,355 | 17,850 | 15,152 | 19,472 | 22,566 | 74,508 | 75,040 | 71,808 |
Interest expense | 1,187 | 1,178 | 1,191 | 1,167 | 1,494 | 1,065 | 1,059 | 906 | 4,723 | 4,524 | 3,354 |
Other income (expense), net | 257 | (246) | 452 | 190 | 116 | (160) | (332) | 1,057 | 653 | 681 | 140 |
Income before income taxes | 24,803 | 20,692 | 11,565 | 13,378 | 16,472 | 13,927 | 18,081 | 22,717 | 70,438 | 71,197 | 68,594 |
Provision for income taxes | 4,096 | 1,990 | 2,434 | 2,069 | 3,939 | 4,041 | 4,270 | 2,801 | 10,589 | 15,051 | 17,843 |
Net income | $ 20,707 | $ 18,702 | $ 9,131 | $ 11,309 | $ 12,533 | $ 9,886 | $ 13,811 | $ 19,916 | $ 59,849 | $ 56,146 | $ 50,751 |
Basic earnings per share (in dollars per share) | $ 0.85 | $ 0.78 | $ 0.38 | $ 0.46 | $ 0.51 | $ 0.40 | $ 0.57 | $ 0.83 | $ 2.47 | $ 2.32 | $ 2.12 |
Weighted average basic shares outstanding (in shares) | 24,234,000 | 23,929,000 | 24,061,000 | 24,142,000 | 24,144,000 | 24,333,000 | 24,057,000 | 23,651,000 | 24,076,549 | 24,039,692 | 23,704,024 |
Diluted earnings per share (in dollars per share) | $ 0.83 | $ 0.76 | $ 0.37 | $ 0.46 | $ 0.50 | $ 0.39 | $ 0.55 | $ 0.80 | $ 2.43 | $ 2.26 | $ 2.04 |
Weighted average diluted shares outstanding (in shares) | 24,678,000 | 24,325,000 | 24,408,000 | 24,549,000 | 24,583,000 | 24,813,000 | 24,693,000 | 24,486,000 | 24,476,993 | 24,631,815 | 24,610,908 |
Dividends per share | $ 0.18 | $ 0.18 | $ 0.18 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0.54 | $ 0 | $ 0 |
SCHEDULE II-VALUATION AND QUALI
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Allowance for Doubtful Accounts [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of year | $ 1,224 | $ 1,392 | $ 1,532 |
Amounts charged to expenses | 588 | (84) | (170) |
Deductions and adjustments | 16 | (84) | 30 |
Balance at end of year | 1,828 | 1,224 | 1,392 |
Warranty Reserves [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of year | 209 | 246 | 324 |
Amounts charged to expenses | 595 | 608 | 760 |
Adjustments to pre-existing warranty reserve | 0 | 0 | 0 |
Settlement of warranty | (561) | (645) | (838) |
Balance at end of year | 243 | 209 | 246 |
Valuation Allowance [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of year | 3,079 | 2,912 | 2,288 |
Amounts charged to expenses | 0 | 167 | 624 |
Deductions and adjustments | (57) | 0 | 0 |
Balance at end of year | $ 3,022 | $ 3,079 | $ 2,912 |