Cover
Cover - shares | 6 Months Ended | |
Mar. 31, 2021 | Apr. 30, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 000-30205 | |
Entity Registrant Name | CMC Materials, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 36-4324765 | |
Entity Address, Address Line One | 870 North Commons Drive | |
Entity Address, City or Town | Aurora | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60504 | |
City Area Code | 630 | |
Local Phone Number | 375-6631 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | CCMP | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 29,253,833 | |
Entity Central Index Key | 0001102934 | |
Current Fiscal Year End Date | --09-30 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||||
Revenue | $ 290,528 | $ 284,193 | $ 578,391 | $ 567,336 |
Cost of sales | 166,782 | 163,091 | 331,741 | 317,552 |
Gross profit | 123,746 | 121,102 | 246,650 | 249,784 |
Operating expenses: | ||||
Research, development and technical | 12,925 | 13,230 | 25,353 | 26,041 |
Selling, general and administrative | 58,538 | 56,209 | 114,458 | 110,648 |
Impairment charges | 208,221 | 0 | 215,568 | 0 |
Total operating expenses | 279,684 | 69,439 | 355,379 | 136,689 |
Operating (loss) income | (155,938) | 51,663 | (108,729) | 113,095 |
Interest expense | 9,508 | 10,753 | 19,116 | 22,673 |
Interest income | 13 | 143 | 36 | 458 |
Other (expense) income, net | (484) | (1,010) | 968 | (1,407) |
(Loss) income before income taxes | (165,917) | 40,043 | (126,841) | 89,473 |
(Benefit from) provision for income taxes | (16,109) | 7,144 | (8,563) | 18,025 |
Net (loss) income | $ (149,808) | $ 32,899 | $ (118,278) | $ 71,448 |
Basic earnings per share (in dollars per share) | $ (5.13) | $ 1.12 | $ (4.06) | $ 2.45 |
Diluted earnings per share (in dollars per share) | $ (5.13) | $ 1.11 | $ (4.06) | $ 2.41 |
Weighted average basic shares outstanding (in shares) | 29,210 | 29,287 | 29,164 | 29,183 |
Weighted average diluted shares outstanding (in shares) | 29,210 | 29,725 | 29,164 | 29,666 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (149,808) | $ 32,899 | $ (118,278) | $ 71,448 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustment | (13,815) | (19,725) | 7,810 | (3,874) |
Net unrealized gain (loss) on cash flow hedges | 17,816 | (17,307) | 15,430 | (13,048) |
Other comprehensive income (loss), net of tax | 4,001 | (37,032) | 23,240 | (16,922) |
Comprehensive (loss) income | $ (145,807) | $ (4,133) | $ (95,038) | $ 54,526 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 324,836 | $ 257,354 |
Accounts receivable, less allowance for credit losses of $567 at March 31, 2021 and $583 at September 30, 2020 | 146,238 | 134,023 |
Inventories | 161,771 | 159,134 |
Prepaid expenses and other current assets | 30,082 | 26,558 |
Total current assets | 662,927 | 577,069 |
Property, plant and equipment, net | 358,708 | 362,067 |
Goodwill | 510,624 | 718,647 |
Other intangible assets, net | 630,704 | 670,964 |
Deferred income taxes | 7,610 | 7,713 |
Other long-term assets | 55,373 | 40,007 |
Total assets | 2,225,946 | 2,376,467 |
Current liabilities: | ||
Accounts payable | 53,194 | 49,254 |
Current portion of long-term debt | 10,650 | 10,650 |
Accrued expenses, income taxes payable and other current liabilities | 123,508 | 121,442 |
Total current liabilities | 187,352 | 181,346 |
Long-term debt, net of current portion | 906,902 | 910,764 |
Deferred income taxes | 84,372 | 112,212 |
Other long-term liabilities | 88,491 | 97,832 |
Total liabilities | 1,267,117 | 1,302,154 |
Commitments and contingencies (Note 12) | ||
Stockholders’ equity: | ||
Common Stock Authorized: 200,000 shares, $0.001 par value; Issued: 40,187 shares at March 31, 2021, and 39,914 shares at September 30, 2020 | 40 | 40 |
Capital in excess of par value of common stock | 1,041,252 | 1,019,803 |
Retained earnings | 408,983 | 553,718 |
Accumulated other comprehensive income (loss) | 9,136 | (14,104) |
Treasury stock at cost, 10,938 shares at March 31, 2021, and 10,834 shares at September 30, 2020 | (500,582) | (485,144) |
Total stockholders’ equity | 958,829 | 1,074,313 |
Total liabilities and stockholders’ equity | $ 2,225,946 | $ 2,376,467 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 567 | $ 583 |
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) | 40,187,000 | 39,914,000 |
Treasury stock (in shares) | 10,938,000 | 10,834,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (118,278) | $ 71,448 |
Adjustments to reconcile Net (loss) income to net cash provided by operating activities: | ||
Impairment charges | 215,568 | 0 |
Depreciation and amortization | 64,180 | 64,192 |
Deferred income tax (benefit) | (32,771) | (7,117) |
Share-based compensation expense | 11,170 | 8,997 |
Amortization of terminated interest rate swap contract | 3,715 | 0 |
Amortization of debt issuance costs | 1,549 | 1,565 |
Non-cash foreign exchange (gain) loss | (1,392) | 325 |
Loss (gain) on disposal of assets | 560 | (69) |
Accretion on Asset Retirement Obligations | 293 | 255 |
Other | (1,933) | 1,144 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (12,352) | (6,386) |
Inventories | (1,423) | (13,103) |
Prepaid expenses and other assets | (16,137) | 5,020 |
Accounts payable | 5,261 | (1,102) |
Accrued expenses, income taxes payable and other liabilities | 5,498 | (12,830) |
Net cash provided by operating activities | 123,508 | 112,339 |
Cash flows from investing activities: | ||
Additions to property, plant and equipment | (21,119) | (59,192) |
Proceeds from the sale of assets | 363 | 1,587 |
Net cash used in investing activities | (20,756) | (57,605) |
Cash flows from financing activities: | ||
Dividends paid | (26,115) | (24,752) |
Proceeds from issuance of stock | 10,279 | 10,334 |
Repurchases of common stock under Share Repurchase Program | (10,002) | (16,414) |
Repurchases of common stock withheld for taxes | (5,436) | (3,099) |
Repayment of long-term debt | (5,325) | (17,988) |
Proceeds from revolving line of credit | 0 | 150,000 |
Other financing activities | (72) | (4) |
Net cash (used in) provided by financing activities | (36,671) | 98,077 |
Effect of exchange rate changes on cash | 1,401 | (604) |
Increase in cash and cash equivalents | 67,482 | 152,207 |
Cash and cash equivalents at beginning of period | 257,354 | 188,495 |
Cash and cash equivalents at end of period | 324,836 | 340,702 |
Supplemental Cash Flow Information: | ||
Purchases of property, plant and equipment in accrued liabilities and accounts payable at the end of the period | 4,180 | 13,841 |
Cash paid during the period for lease liabilities | 4,079 | 3,825 |
Right of use asset obtained in exchange for lease liabilities | $ 2,761 | $ 3,334 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Capital In Excess of Par | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss)Cumulative Effect, Period of Adoption, Adjustment | Treasury Stock |
Beginning balance, common stock (in shares) at Sep. 30, 2019 | 39,592,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock under stock plans (in shares) | 263,000 | |||||||
Ending balance, common stock (in shares) at Mar. 31, 2020 | 39,855,000 | |||||||
Balance at beginning of period at Sep. 30, 2019 | $ 40 | $ 988,980 | $ 461,501 | $ (23,238) | $ (446,906) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Share-based compensation expense | 8,997 | |||||||
Exercise of stock options | 7,648 | |||||||
Issuance of common stock under stock plans | 0 | |||||||
Issuance of common stock under Employee Stock Purchase Plan | 2,536 | |||||||
Issuance of restricted stock under Deposit Share Program | 150 | |||||||
Cumulative effect of accounting changes | $ 488 | $ (488) | ||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201802Member | |||||||
Net (loss) income | $ 71,448 | 71,448 | ||||||
Dividends | (25,311) | |||||||
Foreign currency translation adjustment | (3,874) | (3,874) | ||||||
Cash flow hedges | (13,048) | (13,048) | ||||||
Repurchases of common stock under Share Repurchase Program | (16,414) | |||||||
Repurchases of common stock - other | (3,099) | |||||||
Balance at end of period at Mar. 31, 2020 | $ 1,009,410 | $ 40 | 1,008,311 | 508,126 | (40,648) | $ (466,419) | ||
Beginning balance, treasure stock (in shares) at Sep. 30, 2019 | 10,491,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Repurchase of common stock under Share Repurchase Program (in shares) | 157,000 | |||||||
Repurchase of commons stock - other (in shares) | 25,000 | |||||||
Ending balance, treasury stock (in shares) at Mar. 31, 2020 | 10,673,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Dividends per share of common stock (in dollars per share) | $ 0.86 | |||||||
Beginning balance, common stock (in shares) at Dec. 31, 2019 | 39,719,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock under stock plans (in shares) | 136,000 | |||||||
Ending balance, common stock (in shares) at Mar. 31, 2020 | 39,855,000 | |||||||
Balance at beginning of period at Dec. 31, 2019 | $ 40 | 995,191 | 488,187 | (3,616) | $ (449,803) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Share-based compensation expense | 4,234 | |||||||
Exercise of stock options | 6,350 | |||||||
Issuance of common stock under stock plans | 0 | |||||||
Issuance of common stock under Employee Stock Purchase Plan | 2,536 | |||||||
Issuance of restricted stock under Deposit Share Program | 0 | |||||||
Cumulative effect of accounting changes | 0 | 0 | ||||||
Net (loss) income | $ 32,899 | 32,899 | ||||||
Dividends | (12,960) | |||||||
Foreign currency translation adjustment | (19,725) | (19,725) | ||||||
Cash flow hedges | (17,307) | (17,307) | ||||||
Repurchases of common stock under Share Repurchase Program | (16,414) | |||||||
Repurchases of common stock - other | (202) | |||||||
Balance at end of period at Mar. 31, 2020 | $ 1,009,410 | $ 40 | 1,008,311 | 508,126 | (40,648) | $ (466,419) | ||
Beginning balance, treasure stock (in shares) at Dec. 31, 2019 | 10,514,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Repurchase of common stock under Share Repurchase Program (in shares) | 157,000 | |||||||
Repurchase of commons stock - other (in shares) | 2,000 | |||||||
Ending balance, treasury stock (in shares) at Mar. 31, 2020 | 10,673,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Dividends per share of common stock (in dollars per share) | $ 0.44 | |||||||
Beginning balance, common stock (in shares) at Sep. 30, 2020 | 39,914,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock under stock plans (in shares) | 273,000 | |||||||
Ending balance, common stock (in shares) at Mar. 31, 2021 | 40,187,000 | |||||||
Balance at beginning of period at Sep. 30, 2020 | $ 1,074,313 | $ 40 | 1,019,803 | 553,718 | (14,104) | $ (485,144) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Share-based compensation expense | 11,170 | |||||||
Exercise of stock options | 6,693 | |||||||
Issuance of common stock under stock plans | 0 | |||||||
Issuance of common stock under Employee Stock Purchase Plan | 3,371 | |||||||
Issuance of restricted stock under Deposit Share Program | 215 | |||||||
Cumulative effect of accounting changes | 0 | 0 | ||||||
Net (loss) income | (118,278) | (118,278) | ||||||
Dividends | (26,457) | |||||||
Foreign currency translation adjustment | 7,810 | 7,810 | ||||||
Cash flow hedges | 15,430 | 15,430 | ||||||
Repurchases of common stock under Share Repurchase Program | (10,002) | |||||||
Repurchases of common stock - other | (5,436) | |||||||
Balance at end of period at Mar. 31, 2021 | $ 958,829 | $ 40 | 1,041,252 | 408,983 | 9,136 | $ (500,582) | ||
Beginning balance, treasure stock (in shares) at Sep. 30, 2020 | 10,834,000 | 10,834,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Repurchase of common stock under Share Repurchase Program (in shares) | 67,000 | |||||||
Repurchase of commons stock - other (in shares) | 37,000 | |||||||
Ending balance, treasury stock (in shares) at Mar. 31, 2021 | 10,938,000 | 10,938,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Dividends per share of common stock (in dollars per share) | $ 0.90 | |||||||
Beginning balance, common stock (in shares) at Dec. 31, 2020 | 40,092,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock under stock plans (in shares) | 95,000 | |||||||
Ending balance, common stock (in shares) at Mar. 31, 2021 | 40,187,000 | |||||||
Balance at beginning of period at Dec. 31, 2020 | $ 40 | 1,030,677 | 572,441 | 5,135 | $ (499,565) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Share-based compensation expense | 5,319 | |||||||
Exercise of stock options | 5,256 | |||||||
Issuance of common stock under stock plans | 0 | |||||||
Issuance of common stock under Employee Stock Purchase Plan | 0 | |||||||
Issuance of restricted stock under Deposit Share Program | 0 | |||||||
Cumulative effect of accounting changes | $ 0 | $ 0 | ||||||
Net (loss) income | $ (149,808) | (149,808) | ||||||
Dividends | (13,650) | |||||||
Foreign currency translation adjustment | (13,815) | (13,815) | ||||||
Cash flow hedges | 17,816 | 17,816 | ||||||
Repurchases of common stock under Share Repurchase Program | (801) | |||||||
Repurchases of common stock - other | (216) | |||||||
Balance at end of period at Mar. 31, 2021 | $ 958,829 | $ 40 | $ 1,041,252 | $ 408,983 | $ 9,136 | $ (500,582) | ||
Beginning balance, treasure stock (in shares) at Dec. 31, 2020 | 10,931,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Repurchase of common stock under Share Repurchase Program (in shares) | 5,000 | |||||||
Repurchase of commons stock - other (in shares) | 2,000 | |||||||
Ending balance, treasury stock (in shares) at Mar. 31, 2021 | 10,938,000 | 10,938,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Dividends per share of common stock (in dollars per share) | $ 0.46 |
Background and Basis of Present
Background and Basis of Presentation | 6 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background and Basis of Presentation | BACKGROUND AND BASIS OF PRESENTATION CMC Materials, Inc. (“CMC”, “the Company”, “us”, “we”, or “our”) is a leading global supplier of consumable materials, primarily to semiconductor manufacturers. The Company's products play a critical role in the production of advanced semiconductor devices, helping to enable the manufacture of smaller, faster and more complex devices by its customers. We operate our business within two reportable segments: Electronic Materials and Performance Materials. The Electronic Materials segment consists of our chemical mechanical planarization (“CMP”) slurries business, CMP pads business, and electronic chemicals business. The Performance Materials segment consists of our pipeline and industrial materials (“PIM”) business, wood treatment business, and QED Technologies International, Inc. (“QED”) business. The unaudited Consolidated Financial Statements have been prepared by CMC pursuant to the rules of the Securities and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) for interim financial information. Accordingly, they do not include all the information and notes required by GAAP for complete financial statements. In the opinion of management, these unaudited Consolidated Financial Statements include all adjustments, consisting of normal recurring adjustments, necessary for the fair statement of CMC’s financial position, cash flows, and results of operations for the periods presented. The results may not be indicative of the results that may be expected for the fiscal year ending September 30, 2021. This Report on Form 10-Q should be read in conjunction with the Consolidated Financial Statements and related notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2020. The Consolidated Financial Statements include the accounts of CMC and its subsidiaries. All intercompany transactions and balances between the companies have been eliminated. In the Consolidated Statements of Cash Flows of this Report on Form 10-Q, the presentation for the Provision for credit losses and the presentation for Repurchases of common stock under Cash flows from financing activities has been updated for the six months ended March 31, 2020 to conform to the current presentation. The amounts for that fiscal year related to the Provision for credit losses is now presented under “Other” and common shares withheld for taxes and included in Repurchases of common stock previously, is now presented separately under “Repurchases of common stock withheld for taxes.” Use Of Estimates The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments, assumptions and estimates that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results may differ from these estimates under different assumptions or conditions. |
Summary Of Significant Accounti
Summary Of Significant Accounting Policies And Recent Accounting Pronouncements | 6 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary Of Significant Accounting Policies And Recent Accounting Pronouncements | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS Significant Accounting Policies and Estimates There have been no material changes made to the Company’s significant accounting policies disclosed in Note 2 of "Notes to the Consolidated Financial Statements" included in Item 8 of Part II of our Annual Report on Form 10-K for the fiscal year ended September 30, 2020. Recently Adopted Accounting Pronouncements Accounting Standards Update (“ASU”) No. 2016-13, “Measurement of Credit Losses on Financial Instruments” (Topic 326) and subsequent amendments, requires financial assets measured at amortized cost to be presented at the net amount expected to be collected using an allowance account and provides that credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. The Company adopted these standards effective October 1, 2020 using the modified retrospective approach, which did not impact our results of operations or financial condition. Upon adoption, no adjustment was made to retained earnings or the Allowance for credit losses at October 1, 2020. The Company is exposed to credit losses primarily through trade receivables for the sales of the Company’s products. The Company’s expected credit loss allowance for trade receivables is developed using historical credit loss experience and current and future economic and market conditions. The Company assesses credit risks for these trade receivables and groups them based on similar risk to determine the expected credit loss allowance. Due to the short-term nature of the Company’s trade receivables, the estimate of the expected credit loss allowance is mainly based on historical experience, accounts receivable balances, and the financial condition of customers. ASU No. 2018-13 “Fair Value Measurement” (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, provides specific guidance on various disclosure requirements in Topic 820, including removal, modification and addition to current disclosure requirements. The Company adopted this standard effective October 1, 2020, which did not have a material impact on our financial statement disclosures. ASU No. 2018-15 “Intangibles—Goodwill and Other—Internal-Use Software” (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, requires a customer in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset or expense related to the service contract. The Company adopted this standard effective October 1, 2020, which did not have a material impact on our results of operations or financial condition. Accounting Pronouncements Issued But Not Yet Adopted ASU No. 2019-12 “Income Taxes” (Topic 740): Simplifying the Accounting for Income Taxes, was issued to simplify Topic 740 through improving consistency and removing certain exceptions to general principles. ASU 2019-12 will be effective for us beginning October 1, 2021. We are currently evaluating the impact of implementing this standard on our financial statements. ASU No. 2020-04 "Reference Rate Reform” (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” provides optional guidance for accounting for contracts, hedging relationships, and other transactions affected by the reference rate reform, if certain criteria are met. The provisions of this standard are available for election through December 31, 2022. We are currently evaluating the impact of the reference rate reform on our contracts and the resulting impact of adopting this standard on our financial statements. |
Revenue From Contracts With Cus
Revenue From Contracts With Customers | 6 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue From Contracts With Customers | REVENUE FROM CONTRACTS WITH CUSTOMERS The Company disaggregates revenue by product area and segment as it best depicts the nature and amount of the Company’s revenue. See Note 16 of this Report on Form 10-Q for more information. The following table provides information about contract liability balances: Consolidated Balance Sheet Location March 31, 2021 September 30, 2020 Contract liabilities (current) Accrued expenses, income taxes payable and other current liabilities $ 6,660 $ 8,501 Contract liabilities (noncurrent) Other long-term liabilities 1,807 1,288 The amount of revenue recognized during the three and six months ended March 31, 2021 that was included in the opening current contract liability balances in our Performance Materials segment was $1,256 and $3,709, respectively, and $769 and $3,027 for the three and six months ended March 31, 2020, respectively. The amount of revenue recognized during the three and six months ended March 31, 2021 and 2020 that was included in our opening contract liability balances in our Electronic Materials segment was not material. The table below discloses (1) the aggregate amount of the transaction price allocated to performance obligations that are partially or wholly unsatisfied as of the end of the reporting period for contracts with an original duration of greater than one year and (2) when the Company expects to recognize this revenue. Less Than 1 Year 1-3 Years Total Revenue expected to be recognized on contract liability amounts as of March 31, 2021 $ 532 $ 1,807 $ 2,339 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS The Company is required to record certain assets and liabilities at fair value. The valuation methods used for determining the fair value of these financial instruments by hierarchy are as follows: Level 1 Cash and cash equivalents consist of various bank accounts used to support our operations and investments in institutional money-market funds that are traded in active markets. Other long-term investments represent the fair value of investments under our supplemental employee retirement plan ("SERP"). The fair value of the investments is determined through quoted market prices within actively traded markets. Level 2 Derivative financial instruments include foreign exchange contracts and an interest rate swap contract. The fair value of our derivative instruments is estimated using standard valuation models and market-based observable inputs over the contractual term, including one-month London Inter-bank Offered Rate ("LIBOR") based yield curves for the interest rate swap, and forward rates and/or the Overnight Index Swap curve for forward foreign exchange contracts, among others. Level 3 No level 3 financial instruments The following table presents financial instruments, other than debt, that we measure at fair value on a recurring basis. See Note 10 of this Report on Form 10-Q for a discussion of our debt. In instances where the inputs used to measure the fair value of an asset fall into more than one level of the hierarchy, we have classified it based on the lowest level input that is significant to the determination of the fair value. Level 1 Level 2 Level 3 Total Fair Value March 31, 2021 September 30, 2020 March 31, 2021 September 30, 2020 March 31, 2021 September 30, 2020 March 31, 2021 September 30, 2020 Assets: Cash and cash equivalents $ 324,836 $ 257,354 $ — $ — $ — $ — $ 324,836 $ 257,354 Other long-term investments 1,353 1,214 — — — — 1,353 1,214 Derivative financial instruments — — 16,480 27 — — 16,480 27 Liabilities: Derivative financial instruments — — 3,323 38,157 — — 3,323 38,157 |
Inventories
Inventories | 6 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES Inventories consisted of the following: March 31, 2021 September 30, 2020 Raw materials $ 67,026 $ 66,591 Work in process 17,479 15,148 Finished goods 77,266 77,395 Total $ 161,771 $ 159,134 |
Goodwill
Goodwill | 6 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | GOODWILL Goodwill activity for each of the Company’s reportable segments for the six months ended March 31, 2021: Electronic Materials Performance Materials Total Balance at September 30, 2020 $ 360,425 $ 358,222 $ 718,647 Foreign currency translation impact 2,375 1,904 4,279 Impairment — (212,302) (212,302) Balance at March 31, 2021 $ 362,800 $ 147,824 $ 510,624 During the second quarter, the Company recorded impairment charges related to the PIM and Wood treatment reporting units within the Performance Materials segment. Our PIM reporting unit continues to be adversely impacted by the COVID-19 Pandemic (“Pandemic”). During the second quarter, as a result of lower than anticipated recovery combined with a near-to-mid term increase in raw material cost for the PIM business, we determined that it is more likely than not that the fair value of the PIM reporting unit is below its carrying value, requiring the PIM reporting unit to be tested for impairment at March 31, 2021. Based on the results of the interim impairment test, the Company concluded that the carrying value of the PIM reporting unit exceeded the estimated fair value and recognized a non-cash, pre-tax goodwill impairment charge of $201,550 for the three months ended March 31, 2021. The remaining carrying value of the PIM reporting unit as of March 31, 2021 of $593,114 includes $118,564 of goodwill and $46,000 of indefinite lived intangible assets. The goodwill impairment charge is included in the Performance Materials segment and presented within Impairment charges and the related tax benefit of $23,539 for the three and six months ended March 31, 2021 is included in the (Benefit from) provision for income taxes in the Consolidated Statements of Income (Loss). In performing the impairment test, the estimated fair value of the PIM reporting unit, was determined based on an average of a discounted cash flow model and a market approach based on earnings before interest, taxes, and depreciation for a group of guideline comparable companies. Key assumptions in estimating the fair value of the reporting unit included projected future revenue and gross margin, a 10.75% discount rate and a terminal growth rate of 3%. The Company’s projections for revenue and gross margin are based on the Company’s multiyear forecast. Components of the discount rate are the cost of equity and the cost of debt, each of which requires judgment by management to estimate. The Company developed its cost of equity estimate based on perceived risks and predictability of future cash flows. As the inputs for testing, including estimates of future revenue and gross margin, are not generally observable in active markets, the Company considers such measurements to be Level 3 measurements in the fair value hierarchy. The reporting unit’s carrying value used in an impairment test represents the assignment of various assets and liabilities, excluding certain corporate assets and liabilities, such as cash, investments, and debt. The Company estimated the fair value of its indefinite-lived intangible tradename utilizing its best estimate of future cash flows and royalty rate assumptions as of the period ending March 31, 2021. Additionally, the Company recorded non-cash, pre-tax goodwill impairment charges of $6,671 and $10,752 for the three and six months ended March 31, 2021, related to the wood treatment asset group and reporting unit due to the planned closure of the facilities. See Note 7 of this Report on Form 10-Q for a discussion of the wood treatment impairment. |
Impairment - Wood Treatment
Impairment - Wood Treatment | 6 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Impairment - Wood Treatment | IMPAIRMENT - WOOD TREATMENTAs a result of our previously announced planned closure of the Company's wood treatment business’ facilities by approximately the end of calendar year 2021 and the finite remaining cash flow through the closure date, the Company concluded that it is more likely than not that the fair value of the wood treatment reporting unit is below its carrying value, requiring the wood treatment asset group and reporting unit to be tested for impairment. Impairment of Long-Lived Assets As a result of the previously announced planned facility closures by approximately the end of calendar year 2021, the Company adjusted the remaining useful lives such that they do not extend beyond such date. The Company tested the recoverability of its long-lived assets and determined the carrying amount of the assets exceeded the sum of the expected undiscounted future cash flows, and as a result, we compared the fair value of the wood treatment asset group, which was determined based on a discounted cash flow model, to its carrying value. We recognized a non-cash pre-tax impairment charge of $3,266 for the quarter ended December 31, 2020 resulting in no remaining carrying value of definite-lived intangible assets or Property, plant and equipment as of that date. Key assumptions in testing the assets for recoverability and development of the fair value of the asset group included projected future revenue and gross margin. As the inputs for testing recoverability, including estimates of future revenue and gross margin, are not generally observable in active markets, the Company considers such measurements to be Level 3 measurements in the fair value hierarchy. The duration of the future revenue and gross margin estimates are limited to the period through the closure date. Impairment of Goodwill The fair value of the wood treatment reporting unit, which was determined based on a discounted cash flow model, did not exceed the carrying value of the reporting unit. Key assumptions in our goodwill impairment test included projected future revenue and gross margin. As a result, the Company recorded non-cash, pre-tax impairment charges of $6,671 and $10,752 for the three and six months ended March 31, 2021, respectively. As the Company approaches the closure date of the facilities and there are finite estimated future cash flows, the carrying value of the wood treatment reporting unit will not be recoverable, resulting in future impairments of goodwill. The remaining carrying value of the wood treatment reporting unit as of March 31, 2021 includes $24.3 million of goodwill, which will be periodically impaired through the closure date, resulting in no fair value ascribed to the wood treatment business by the date of closure. The amount of the periodic impairments will vary depending on the timing of the remaining future cash flows of the business and carrying value of the reporting unit at each reporting period. Presentation of Impairment Charges The long-lived assets and goodwill impairment charges, both included in the Performance Materials segment, are presented within Impairment charges and the related tax benefit of $606 for the six months ended March 31, 2021 is included in the (Benefit from) provision for income taxes in the Consolidated Statements of Income (Loss). The impairment charges related to goodwill are not tax deductible, therefore there is no related tax benefit for the three months ended March 31, 2021. The impairment charges for wood treatment for the respective periods are as follows: Three Months Ended March 31, 2021 Six Months Ended March 31, 2021 Property, plant, and equipment, net $ — $ 91 Goodwill 6,671 10,752 Other intangible assets – Product technology — 583 Other intangible assets – Acquired patents and licenses — 173 Other intangible assets – Customer relationships, distribution rights, and other — 2,419 Total wood treatment impairment charges $ 6,671 $ 14,018 Additionally, the Company recorded a non-cash, pre-tax goodwill impairment charge of $201,550 for the three and six months period ended March 31, 2021, related to the PIM reporting unit. See Note 6 of this Report on Form 10-Q for a discussion of the PIM impairment. |
Other Long-Term Assets
Other Long-Term Assets | 6 Months Ended |
Mar. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Long-Term Assets | OTHER LONG-TERM ASSETS March 31, 2021 September 30, 2020 Right of use asset $ 30,570 $ 30,999 Interest rate swap (See Note 11) 16,464 — Vendor contract assets 2,097 2,889 SERP investment 1,353 1,214 Prepaid unamortized debt issuance cost - revolver 451 537 Other long-term assets 4,438 4,368 Total $ 55,373 $ 40,007 |
Accrued Expenses, Income Taxes
Accrued Expenses, Income Taxes Payable And Other Current Liabilities | 6 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Accrued Expenses, Income Taxes Payable And Other Current Liabilities | ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES March 31, 2021 September 30, 2020 Accrued compensation $ 37,258 $ 46,465 Income taxes payable 16,724 16,216 Dividends payable 14,011 13,669 Asset retirement obligation 11,951 — Current portion of operating lease liability 6,999 6,513 Contract liabilities (current) 6,660 8,501 Current portion of terminated swap liability (See Note 11) 5,855 — Taxes, other than income taxes 5,720 5,044 Goods and services received, not yet invoiced 4,514 3,957 Interest rate swap liability (See Note 11) 2,976 11,992 Accrued interest 113 29 Other 10,727 9,056 Total $ 123,508 $ 121,442 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | DEBT March 31, 2021 September 30, 2020 Senior Secured Term Loan Facility, one-month LIBOR plus 2.00% $ 931,038 $ 936,363 Less: Unamortized debt issuance costs (13,486) (14,949) Total debt 917,552 921,414 Less: Current maturities and short-term debt (10,650) (10,650) Total long-term debt excluding current maturities $ 906,902 $ 910,764 The Company’s credit agreement (“Amended Credit Agreement”) includes a Senior Secured Term Loan Facility ("Term Loan Facility") and a revolving credit facility (“Revolving Credit Facility”). As of March 31, 2021, there was no borrowings outstanding under the Revolving Credit Facility and our available credit was $200,000, which includes our letter of credit sub-facility. At March 31, 2021 and September 30, 2020, the fair value of the Term Loan Facility, using level 2 inputs, approximated its carrying value as the loan bears a floating market rate of interest. As of March 31, 2021, scheduled principal repayments of the Term Loan Facility were as follows: Fiscal Year Principal Repayments Remainder of 2021 $ 5,325 2022 10,650 2023 10,650 2024 10,650 2025 10,650 Greater than 5 years 883,113 Total $ 931,038 |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | 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. Cash Flow Hedges - Interest Rate Swap Contract During the first quarter of fiscal 2021, the Company entered into a new interest rate swap agreement to extend the duration of its existing swap arrangement and to take advantage of lower interest rates. The existing interest rate swap, which was in a loss position of $35.3 million, was terminated, and the hedging relationship was de-designated. The liability for the terminated interest rate swap is not measured at fair value. The current and long-term portion of the liability for the terminated swap are recorded in Accrued expenses, income taxes payable and other current liabilities and Other long-term liabilities, respectively, on the Consolidated Balance Sheet and will be paid over the remaining term of the new swap. The loss amount for the terminated swap is included in Accumulated other comprehensive loss and will be amortized on a straight-lined basis into interest expense through January 31, 2024, the remaining term of the original swap. The new interest rate swap is a floating-to-fixed interest rate swap contract to hedge the variability in LIBOR-based interest payments on a portion of our outstanding variable rate debt. The notional amount is scheduled to decrease quarterly and will expire on January 29, 2027. The new interest rate swap was designated as a cash flow hedge based on certain quantitative and qualitative assessments and we have determined that the hedge is highly effective and qualifies for hedge accounting. Foreign Currency Contracts Not Designated as Hedges 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. These foreign exchange contracts do not qualify for hedge accounting. The notional amount of our derivative instruments are as follows: March 31, 2021 September 30, 2020 Derivatives designated as hedging instruments Interest rate swap contract - new agreement $ 558,405 $ — Interest rate swap contract - terminated agreement — 571,000 Derivatives not designated as hedging instruments Foreign exchange contracts to purchase U.S. dollars $ 5,988 $ 8,054 Foreign exchange contracts to sell U.S. dollars 30,450 25,105 The fair value of our derivative instruments included in the Consolidated Balance Sheets was as follows: Derivative Assets Derivative Liabilities Consolidated Balance Sheet Location March 31, 2021 September 30, 2020 March 31, 2021 September 30, 2020 Derivatives designated as hedging instruments Interest rate swap contract Other long-term assets $ 16,464 $ — $ — $ — Accrued expenses, income taxes payable and other current liabilities — — 2,976 11,992 Other long-term liabilities — — — 26,000 Derivatives not designated as hedging instruments Foreign exchange contracts Prepaid expenses and other current assets $ 16 $ 27 $ — $ — Accrued expenses, income taxes payable and other current liabilities — — 347 165 The following table summarizes the effect of our derivative instruments on our Consolidated Statements of Income (loss): Gain (Loss) Recognized in Statement of Income Three Months Ended March 31, Six Months Ended March 31, Consolidated Statement of Income Location 2021 2020 2021 2020 Derivatives designated as hedging instruments Interest rate swap contract Interest expense $ (809) $ (1,366) $ (3,254) $ (2,537) Terminated interest rate swap contract Interest expense (2,786) — (3,715) — Derivatives not designated as hedging instruments Foreign exchange contracts Other income (expense), net $ (759) $ (268) $ (637) $ (262) The following table summarizes the effect of our derivative instruments on Accumulated other comprehensive income (loss): Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) Three Months Ended March 31, Six Months Ended March 31, 2021 2020 2021 2020 Derivatives designated as hedging instruments Interest rate swap contract $ 19,361 $ (23,655) $ 12,912 $ (19,340) We expect approximately $14,120 to be reclassified from Accumulated other comprehensive income (loss) into Interest expense during the next twelve months related to our interest rate swap based on projected rates of the LIBOR forward curve as of March 31, 2021. This amount includes the amortization of the loss associated with the terminated swap arrangement. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES In 2019, a fire occurred at the warehouse of the wood treatment facility of our subsidiary KMG-Bernuth, Inc (“KMG-Bernuth”), in Tuscaloosa, Alabama, which processes pentachlorophenol (“penta”) for sale to customers in the U.S. and Canada. The warehouse fire, which we believe originated from non-hazardous waste materials temporarily stored in the warehouse for recycling purposes, caused no injuries. KMG-Bernuth commenced and completed cleanup with oversight from certain local, state and federal authorities. We recorded expense for the fire waste cleanup and disposal of affected inventory in Cost of sales. No expense was recorded during the six months ended March 31, 2021. We recorded $593 of expense during the six months ended March 31, 2020. Although we believe we have completed cleanup efforts related to the fire incident, there are potential other costs that cannot be reasonably estimated as of this time related to the fire incident due to the nature of federally-regulated penta-related requirements. In addition, we continue to work with our insurance carriers on possible recovery of losses and costs related to the fire incident. During the three and six months ended March 31, 2021, we received an insurance recovery of $1,076. At this point we cannot reasonably estimate whether we will receive any additional insurance recoveries, or if so, the amount of such recoveries. Separately, in connection with the acquisition of KMG Chemicals, Inc. (“Acquisition”), through KMG-Bernuth, we assumed a contingency related to the Star Lake Canal Superfund Site near Beaumont, Texas (“Star Lake”). In 2014, prior to the Acquisition, the United States Environmental Protection Agency (“EPA”) had notified KMG-Bernuth that the EPA considered it to be a potentially responsible party under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, in connection with Star Lake. The EPA has estimated that related remediation will cost approximately $22.0 million. KMG-Bernuth and seven other cooperating parties entered into an agreement with the EPA in September 2016 to complete a remedial design of the remediation actions for the site. Although KMG-Bernuth has not conceded liability with respect to Star Lake, a reserve in connection with the remediation was established, and as of March 31, 2021, the reserve remaining was $204. The remediation work will be performed under a separate future agreement. For more information, refer to Note 20 of “Notes to the Consolidated Financial Statements” included in Item 8 of Part II of our Annual Report on Form 10-K for the fiscal year ended September 30, 2020. Purchase Obligations |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Mar. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The table below summarizes the components of Accumulated other comprehensive income (loss), net of income tax expense (benefit): Three Months Ended March 31, Six Months Ended March 31, 2021 2020 2021 2020 Beginning Balance $ 5,135 $ (3,616) $ (14,104) $ (23,238) Foreign currency translation adjustment (13,763) (19,752) 7,780 (3,935) Income tax (expense) benefit (52) 27 30 61 Foreign currency translation adjustment, net of tax (13,815) (19,725) 7,810 (3,874) Unrealized gain loss on cash flow hedges: Change in fair value 19,361 (23,655) 12,912 (19,340) Reclassification adjustment into earnings 3,595 1,366 6,969 2,537 Income tax (expense) benefit (5,140) 4,982 (4,451) 3,755 Unrealized gain (loss) on cash flow hedges, net of tax 17,816 (17,307) 15,430 (13,048) Effect of the adoption of the stranded tax effect accounting standard — — — (497) Income tax benefit — — — 9 Effect of the adoption of the stranded tax effect accounting standard, net of tax — — — (488) Net Change 4,001 (37,032) 23,240 (17,410) Ending Balance $ 9,136 $ (40,648) $ 9,136 $ (40,648) During the first quarter of fiscal 2020, the Company adopted ASU No. 2018-02 regarding the reclassification of stranded tax effects resulting from the change in the U.S. federal corporate income tax rate under the Tax Cuts and Jobs Act (the “Tax Act”) and as a result, we reclassified $488 of stranded tax effects from Accumulated other comprehensive income to Retained earnings. |
Income Taxes
Income Taxes | 6 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The U.S. enacted the Consolidated Appropriations Act (“CAA”) in December 2020 and the American Rescue Plan (“Rescue Plan”) in March 2021. Both the CAA and Rescue Plan extend certain provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and provide new Pandemic relief provisions. As with the CARES Act, the CAA and Rescue Plan did not have a material impact on our (Benefit for) provision for income taxes for the three and six months ended March 31, 2021. As a result of Impairment charges recorded during the quarter, the Company recorded an income tax benefit of $16,109 for the three months ended March 31, 2021, compared to income tax expense of $7,144 for the three months ended March 31, 2020. The Company recorded an income tax benefit of $8,563 for the six months ended March 31, 2021, compared to income tax expense of $18,025 for the six months ended March 31, 2020. The Company’s effective income tax rate was 9.7% and 6.8% for the three and six months ended March 31, 2021, respectively, compared to an effective tax rate of 17.8% and 20.1% for the three and six months ended March 31, 2020, respectively. The changes in our effective tax rate for the three and six months ended March 31, 2021 compared to the prior year is primarily due to the unfavorable impact of the impairment related to the PIM and wood treatment reporting units, partially offset by higher tax benefit related to foreign derived intangible income. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 6 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | EARNINGS (LOSS) PER SHARE Three Months Ended March 31, Six Months Ended March 31, 2021 2020 2021 2020 Numerator: Net (loss) income available to common shares $ (149,808) $ 32,899 $ (118,278) $ 71,448 Denominator: Weighted average common shares 29,210 29,287 29,164 29,183 Weighted average effect of dilutive securities — 438 — 483 Diluted weighted average common shares 29,210 29,725 29,164 29,666 (Loss) earnings per share: Basic $ (5.13) $ 1.12 $ (4.06) $ 2.45 Diluted $ (5.13) $ 1.11 $ (4.06) $ 2.41 For the three and six months ended March 31, 2021, no dilutive shares were calculated, as the dilutive shares in a net loss situation would be anti-dilutive. Shares excluded from the calculation of diluted earnings per share as their inclusion would have been anti-dilutive were as follows: Three Months Ended March 31, Six Months Ended March 31, 2021 2020 2021 2020 Outstanding stock options — 111 — 79 |
Segment Reporting
Segment Reporting | 6 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Reporting | SEGMENT REPORTING We identify our segments based on our management structure and the financial information used by our chief executive officer, who is our chief operating decision maker, to assess segment performance and allocate resources among our operating units. We have the following two reportable segments: Electronic Materials Electronic Materials includes products and solutions for the semiconductor industry and consists of our CMP slurries business, CMP pads business, and electronic chemicals business. Performance Materials Performance Materials consists of our PIM business, wood treatment business, and QED business. Our chief operating decision maker evaluates segment performance based upon revenue and segment adjusted EBITDA. Segment adjusted EBITDA is defined as earnings before interest, income taxes, depreciation and amortization, adjusted for certain items that affect comparability from period to period. These adjustments include acquisition and integration-related expenses, certain costs related to the KMG-Bernuth warehouse fire, net of insurance recovery, impairment charges, net restructuring charges related to the wood treatment business, and costs related to the Pandemic, net of grants received. We exclude these items from earnings when presenting our adjusted EBITDA measure because we believe they are not indicative of a segment's regular, ongoing operating performance. Adjusted EBITDA is also the basis of a performance metric for our fiscal 2021 Short-Term Incentive Program ("STIP"). In addition, our chief operating decision maker does not use assets by segment to evaluate performance or allocate resources, and therefore, we do not disclose assets by segment. The two segments operate independently and serve different markets and customers, as a result there are no sales between segments. Revenue from external customers by segment are as follows: Three Months Ended March 31, Six Months Ended March 31, 2021 2020 2021 2020 Segment Revenue: Electronic Materials: CMP Slurries $ 140,194 $ 119,822 $ 274,915 $ 242,148 Electronic Chemicals 80,098 78,497 160,104 156,079 CMP Pads 22,255 20,590 44,326 41,403 Total Electronic Materials 242,547 218,909 479,345 439,630 Performance Materials: PIM 25,987 44,480 51,894 89,621 Wood Treatment 15,546 14,974 32,869 25,648 QED 6,448 5,830 14,283 12,437 Total Performance Materials 47,981 65,284 99,046 127,706 Total $ 290,528 $ 284,193 $ 578,391 $ 567,336 Capital expenditures by segment are as follows: Three Months Ended March 31, Six Months Ended March 31, 2021 2020 2021 2020 Capital Expenditures: Electronic Materials $ 6,258 $ 5,094 $ 11,692 $ 13,579 Performance Materials 957 29,328 2,267 45,697 Corporate 2,500 3,555 5,975 5,067 Total $ 9,715 $ 37,977 $ 19,934 $ 64,343 Adjusted EBITDA by segment is as follows: Three Months Ended March 31, Six Months Ended March 31, 2021 2020 2021 2020 Net (loss) income $ (149,808) $ 32,899 $ (118,278) $ 71,448 Interest expense 9,508 10,753 19,116 22,673 Interest income (13) (143) (36) (458) Income taxes (16,109) 7,144 (8,563) 18,025 Depreciation and amortization 32,289 32,550 64,180 64,192 EBITDA (124,133) 83,203 (43,581) 175,880 Impairment charges 208,221 — 215,568 — Acquisition and integration-related expenses 2,167 2,285 4,536 5,050 Costs related to the Pandemic, net of grants received (421) 237 841 237 Net costs related to restructuring of the wood treatment business 46 — 72 — Costs related to KMG-Bernuth warehouse fire, net of insurance recovery (1,076) 206 (1,076) 598 Consolidated adjusted EBITDA $ 84,804 $ 85,931 $ 176,360 $ 181,765 Segment adjusted EBITDA: Electronic Materials $ 81,315 $ 69,603 $ 162,071 $ 150,807 Performance Materials 18,750 29,932 41,725 57,411 Unallocated corporate expenses (15,261) (13,604) (27,436) (26,453) Consolidated Adjusted EBITDA $ 84,804 $ 85,931 $ 176,360 $ 181,765 The unallocated portions of corporate functions, including finance, legal, human resources, information technology, and corporate development, are not directly attributable to a reportable segment. |
Subsequent Event
Subsequent Event | 6 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Event | SUBSEQUENT EVENTOn April 1, 2021, CMC completed its acquisition of 100% of International Test Solutions, LLC (“ITS”), for approximately $125.0 million in cash, subject to post-closing adjustments. The results of ITS will be included in the Consolidated Financial Statements from the date of acquisition and will be reported in the Company’s Electronic Materials segment. |
Summary Of Significant Accoun_2
Summary Of Significant Accounting Policies And Recent Accounting Pronouncements (Policies) | 6 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use Of Estimates The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments, assumptions and estimates that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results may differ from these estimates under different assumptions or conditions. |
Significant Accounting Policies and Estimates, Recently Adopted Accounting Pronouncements and Accounting Pronouncements Issues But Not Yet Adopted | Significant Accounting Policies and Estimates There have been no material changes made to the Company’s significant accounting policies disclosed in Note 2 of "Notes to the Consolidated Financial Statements" included in Item 8 of Part II of our Annual Report on Form 10-K for the fiscal year ended September 30, 2020. Recently Adopted Accounting Pronouncements Accounting Standards Update (“ASU”) No. 2016-13, “Measurement of Credit Losses on Financial Instruments” (Topic 326) and subsequent amendments, requires financial assets measured at amortized cost to be presented at the net amount expected to be collected using an allowance account and provides that credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. The Company adopted these standards effective October 1, 2020 using the modified retrospective approach, which did not impact our results of operations or financial condition. Upon adoption, no adjustment was made to retained earnings or the Allowance for credit losses at October 1, 2020. The Company is exposed to credit losses primarily through trade receivables for the sales of the Company’s products. The Company’s expected credit loss allowance for trade receivables is developed using historical credit loss experience and current and future economic and market conditions. The Company assesses credit risks for these trade receivables and groups them based on similar risk to determine the expected credit loss allowance. Due to the short-term nature of the Company’s trade receivables, the estimate of the expected credit loss allowance is mainly based on historical experience, accounts receivable balances, and the financial condition of customers. ASU No. 2018-13 “Fair Value Measurement” (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, provides specific guidance on various disclosure requirements in Topic 820, including removal, modification and addition to current disclosure requirements. The Company adopted this standard effective October 1, 2020, which did not have a material impact on our financial statement disclosures. ASU No. 2018-15 “Intangibles—Goodwill and Other—Internal-Use Software” (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, requires a customer in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset or expense related to the service contract. The Company adopted this standard effective October 1, 2020, which did not have a material impact on our results of operations or financial condition. Accounting Pronouncements Issued But Not Yet Adopted ASU No. 2019-12 “Income Taxes” (Topic 740): Simplifying the Accounting for Income Taxes, was issued to simplify Topic 740 through improving consistency and removing certain exceptions to general principles. ASU 2019-12 will be effective for us beginning October 1, 2021. We are currently evaluating the impact of implementing this standard on our financial statements. ASU No. 2020-04 "Reference Rate Reform” (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” provides optional guidance for accounting for contracts, hedging relationships, and other transactions affected by the reference rate reform, if certain criteria are met. The provisions of this standard are available for election through December 31, 2022. We are currently evaluating the impact of the reference rate reform on our contracts and the resulting impact of adopting this standard on our financial statements. |
Revenue From Contracts With C_2
Revenue From Contracts With Customers (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Reconciliation of Contract Liability Balances | The following table provides information about contract liability balances: Consolidated Balance Sheet Location March 31, 2021 September 30, 2020 Contract liabilities (current) Accrued expenses, income taxes payable and other current liabilities $ 6,660 $ 8,501 Contract liabilities (noncurrent) Other long-term liabilities 1,807 1,288 |
Transaction Price Allocated to Remaining Performance Obligation | The table below discloses (1) the aggregate amount of the transaction price allocated to performance obligations that are partially or wholly unsatisfied as of the end of the reporting period for contracts with an original duration of greater than one year and (2) when the Company expects to recognize this revenue. Less Than 1 Year 1-3 Years Total Revenue expected to be recognized on contract liability amounts as of March 31, 2021 $ 532 $ 1,807 $ 2,339 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | The following table presents financial instruments, other than debt, that we measure at fair value on a recurring basis. See Note 10 of this Report on Form 10-Q for a discussion of our debt. In instances where the inputs used to measure the fair value of an asset fall into more than one level of the hierarchy, we have classified it based on the lowest level input that is significant to the determination of the fair value. Level 1 Level 2 Level 3 Total Fair Value March 31, 2021 September 30, 2020 March 31, 2021 September 30, 2020 March 31, 2021 September 30, 2020 March 31, 2021 September 30, 2020 Assets: Cash and cash equivalents $ 324,836 $ 257,354 $ — $ — $ — $ — $ 324,836 $ 257,354 Other long-term investments 1,353 1,214 — — — — 1,353 1,214 Derivative financial instruments — — 16,480 27 — — 16,480 27 Liabilities: Derivative financial instruments — — 3,323 38,157 — — 3,323 38,157 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following: March 31, 2021 September 30, 2020 Raw materials $ 67,026 $ 66,591 Work in process 17,479 15,148 Finished goods 77,266 77,395 Total $ 161,771 $ 159,134 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill Activity | Goodwill activity for each of the Company’s reportable segments for the six months ended March 31, 2021: Electronic Materials Performance Materials Total Balance at September 30, 2020 $ 360,425 $ 358,222 $ 718,647 Foreign currency translation impact 2,375 1,904 4,279 Impairment — (212,302) (212,302) Balance at March 31, 2021 $ 362,800 $ 147,824 $ 510,624 |
Impairment - Wood Treatment (Ta
Impairment - Wood Treatment (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Long-lived Asset Impairment | The impairment charges for wood treatment for the respective periods are as follows: Three Months Ended March 31, 2021 Six Months Ended March 31, 2021 Property, plant, and equipment, net $ — $ 91 Goodwill 6,671 10,752 Other intangible assets – Product technology — 583 Other intangible assets – Acquired patents and licenses — 173 Other intangible assets – Customer relationships, distribution rights, and other — 2,419 Total wood treatment impairment charges $ 6,671 $ 14,018 |
Other Long-Term Assets (Tables)
Other Long-Term Assets (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Long-term Assets | March 31, 2021 September 30, 2020 Right of use asset $ 30,570 $ 30,999 Interest rate swap (See Note 11) 16,464 — Vendor contract assets 2,097 2,889 SERP investment 1,353 1,214 Prepaid unamortized debt issuance cost - revolver 451 537 Other long-term assets 4,438 4,368 Total $ 55,373 $ 40,007 |
Accrued Expenses, Income Taxe_2
Accrued Expenses, Income Taxes Payable And Other Current Liabilities (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Accrued Expenses, Income Taxes Payable and Other Current Liabilities | March 31, 2021 September 30, 2020 Accrued compensation $ 37,258 $ 46,465 Income taxes payable 16,724 16,216 Dividends payable 14,011 13,669 Asset retirement obligation 11,951 — Current portion of operating lease liability 6,999 6,513 Contract liabilities (current) 6,660 8,501 Current portion of terminated swap liability (See Note 11) 5,855 — Taxes, other than income taxes 5,720 5,044 Goods and services received, not yet invoiced 4,514 3,957 Interest rate swap liability (See Note 11) 2,976 11,992 Accrued interest 113 29 Other 10,727 9,056 Total $ 123,508 $ 121,442 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Total Debt | March 31, 2021 September 30, 2020 Senior Secured Term Loan Facility, one-month LIBOR plus 2.00% $ 931,038 $ 936,363 Less: Unamortized debt issuance costs (13,486) (14,949) Total debt 917,552 921,414 Less: Current maturities and short-term debt (10,650) (10,650) Total long-term debt excluding current maturities $ 906,902 $ 910,764 |
Schedule of Principal Repayments of Debt | As of March 31, 2021, scheduled principal repayments of the Term Loan Facility were as follows: Fiscal Year Principal Repayments Remainder of 2021 $ 5,325 2022 10,650 2023 10,650 2024 10,650 2025 10,650 Greater than 5 years 883,113 Total $ 931,038 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The notional amount of our derivative instruments are as follows: March 31, 2021 September 30, 2020 Derivatives designated as hedging instruments Interest rate swap contract - new agreement $ 558,405 $ — Interest rate swap contract - terminated agreement — 571,000 Derivatives not designated as hedging instruments Foreign exchange contracts to purchase U.S. dollars $ 5,988 $ 8,054 Foreign exchange contracts to sell U.S. dollars 30,450 25,105 |
Schedule of Derivative Instruments In The Consolidated Balance Sheets | The fair value of our derivative instruments included in the Consolidated Balance Sheets was as follows: Derivative Assets Derivative Liabilities Consolidated Balance Sheet Location March 31, 2021 September 30, 2020 March 31, 2021 September 30, 2020 Derivatives designated as hedging instruments Interest rate swap contract Other long-term assets $ 16,464 $ — $ — $ — Accrued expenses, income taxes payable and other current liabilities — — 2,976 11,992 Other long-term liabilities — — — 26,000 Derivatives not designated as hedging instruments Foreign exchange contracts Prepaid expenses and other current assets $ 16 $ 27 $ — $ — Accrued expenses, income taxes payable and other current liabilities — — 347 165 |
Schedule of Derivative Instruments on Consolidated Statements of Income | The following table summarizes the effect of our derivative instruments on our Consolidated Statements of Income (loss): Gain (Loss) Recognized in Statement of Income Three Months Ended March 31, Six Months Ended March 31, Consolidated Statement of Income Location 2021 2020 2021 2020 Derivatives designated as hedging instruments Interest rate swap contract Interest expense $ (809) $ (1,366) $ (3,254) $ (2,537) Terminated interest rate swap contract Interest expense (2,786) — (3,715) — Derivatives not designated as hedging instruments Foreign exchange contracts Other income (expense), net $ (759) $ (268) $ (637) $ (262) The following table summarizes the effect of our derivative instruments on Accumulated other comprehensive income (loss): Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) Three Months Ended March 31, Six Months Ended March 31, 2021 2020 2021 2020 Derivatives designated as hedging instruments Interest rate swap contract $ 19,361 $ (23,655) $ 12,912 $ (19,340) |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | The table below summarizes the components of Accumulated other comprehensive income (loss), net of income tax expense (benefit): Three Months Ended March 31, Six Months Ended March 31, 2021 2020 2021 2020 Beginning Balance $ 5,135 $ (3,616) $ (14,104) $ (23,238) Foreign currency translation adjustment (13,763) (19,752) 7,780 (3,935) Income tax (expense) benefit (52) 27 30 61 Foreign currency translation adjustment, net of tax (13,815) (19,725) 7,810 (3,874) Unrealized gain loss on cash flow hedges: Change in fair value 19,361 (23,655) 12,912 (19,340) Reclassification adjustment into earnings 3,595 1,366 6,969 2,537 Income tax (expense) benefit (5,140) 4,982 (4,451) 3,755 Unrealized gain (loss) on cash flow hedges, net of tax 17,816 (17,307) 15,430 (13,048) Effect of the adoption of the stranded tax effect accounting standard — — — (497) Income tax benefit — — — 9 Effect of the adoption of the stranded tax effect accounting standard, net of tax — — — (488) Net Change 4,001 (37,032) 23,240 (17,410) Ending Balance $ 9,136 $ (40,648) $ 9,136 $ (40,648) |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | Three Months Ended March 31, Six Months Ended March 31, 2021 2020 2021 2020 Numerator: Net (loss) income available to common shares $ (149,808) $ 32,899 $ (118,278) $ 71,448 Denominator: Weighted average common shares 29,210 29,287 29,164 29,183 Weighted average effect of dilutive securities — 438 — 483 Diluted weighted average common shares 29,210 29,725 29,164 29,666 (Loss) earnings per share: Basic $ (5.13) $ 1.12 $ (4.06) $ 2.45 Diluted $ (5.13) $ 1.11 $ (4.06) $ 2.41 |
Schedule of Shares Exclude From Calculation of Diluted Earnings Per Share | Shares excluded from the calculation of diluted earnings per share as their inclusion would have been anti-dilutive were as follows: Three Months Ended March 31, Six Months Ended March 31, 2021 2020 2021 2020 Outstanding stock options — 111 — 79 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Revenue | Revenue from external customers by segment are as follows: Three Months Ended March 31, Six Months Ended March 31, 2021 2020 2021 2020 Segment Revenue: Electronic Materials: CMP Slurries $ 140,194 $ 119,822 $ 274,915 $ 242,148 Electronic Chemicals 80,098 78,497 160,104 156,079 CMP Pads 22,255 20,590 44,326 41,403 Total Electronic Materials 242,547 218,909 479,345 439,630 Performance Materials: PIM 25,987 44,480 51,894 89,621 Wood Treatment 15,546 14,974 32,869 25,648 QED 6,448 5,830 14,283 12,437 Total Performance Materials 47,981 65,284 99,046 127,706 Total $ 290,528 $ 284,193 $ 578,391 $ 567,336 |
Schedule of Capital Expenditures by Segment | Capital expenditures by segment are as follows: Three Months Ended March 31, Six Months Ended March 31, 2021 2020 2021 2020 Capital Expenditures: Electronic Materials $ 6,258 $ 5,094 $ 11,692 $ 13,579 Performance Materials 957 29,328 2,267 45,697 Corporate 2,500 3,555 5,975 5,067 Total $ 9,715 $ 37,977 $ 19,934 $ 64,343 |
Schedule of Segment Adjusted EBITDA | Adjusted EBITDA by segment is as follows: Three Months Ended March 31, Six Months Ended March 31, 2021 2020 2021 2020 Net (loss) income $ (149,808) $ 32,899 $ (118,278) $ 71,448 Interest expense 9,508 10,753 19,116 22,673 Interest income (13) (143) (36) (458) Income taxes (16,109) 7,144 (8,563) 18,025 Depreciation and amortization 32,289 32,550 64,180 64,192 EBITDA (124,133) 83,203 (43,581) 175,880 Impairment charges 208,221 — 215,568 — Acquisition and integration-related expenses 2,167 2,285 4,536 5,050 Costs related to the Pandemic, net of grants received (421) 237 841 237 Net costs related to restructuring of the wood treatment business 46 — 72 — Costs related to KMG-Bernuth warehouse fire, net of insurance recovery (1,076) 206 (1,076) 598 Consolidated adjusted EBITDA $ 84,804 $ 85,931 $ 176,360 $ 181,765 Segment adjusted EBITDA: Electronic Materials $ 81,315 $ 69,603 $ 162,071 $ 150,807 Performance Materials 18,750 29,932 41,725 57,411 Unallocated corporate expenses (15,261) (13,604) (27,436) (26,453) Consolidated Adjusted EBITDA $ 84,804 $ 85,931 $ 176,360 $ 181,765 |
Background and Basis of Prese_2
Background and Basis of Presentation (Details) | 6 Months Ended |
Mar. 31, 2021segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
Revenue From Contracts With C_3
Revenue From Contracts With Customers - Reconciliation of Contract Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Sep. 30, 2020 | |
Contract with Customer, Liability [Abstract] | |||||
Contract liabilities (current) | $ 6,660 | $ 6,660 | $ 8,501 | ||
Contract liabilities (noncurrent) | 1,807 | 1,807 | $ 1,288 | ||
Change in Contract with Customer, Liability [Abstract] | |||||
Revenue recognized in contract liability | $ 1,256 | $ 769 | $ 3,709 | $ 3,027 |
Revenue From Contracts With C_4
Revenue From Contracts With Customers - Transaction Price Allocated to Remaining Performance Obligations (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized on contract liability amounts as of end of period | $ 2,339 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized on contract liability amounts as of end of period | $ 532 |
Revenue, Performance Obligation [Abstract] | |
Revenue expected to be recognized on contract liability, satisfaction period | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized on contract liability amounts as of end of period | $ 1,807 |
Revenue, Performance Obligation [Abstract] | |
Revenue expected to be recognized on contract liability, satisfaction period | 2 years |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 |
Assets: | ||
Derivative financial instruments | $ 16,464 | $ 0 |
Recurring | ||
Assets: | ||
Cash and cash equivalents | 324,836 | 257,354 |
Other long-term investments | 1,353 | 1,214 |
Derivative financial instruments | 16,480 | 27 |
Liabilities: | ||
Derivative financial instruments | 3,323 | 38,157 |
Recurring | Level 1 | ||
Assets: | ||
Cash and cash equivalents | 324,836 | 257,354 |
Other long-term investments | 1,353 | 1,214 |
Derivative financial instruments | 0 | 0 |
Liabilities: | ||
Derivative financial instruments | 0 | 0 |
Recurring | Level 2 | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Other long-term investments | 0 | 0 |
Derivative financial instruments | 16,480 | 27 |
Liabilities: | ||
Derivative financial instruments | 3,323 | 38,157 |
Recurring | Level 3 | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Other long-term investments | 0 | 0 |
Derivative financial instruments | 0 | 0 |
Liabilities: | ||
Derivative financial instruments | $ 0 | $ 0 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 |
Inventory, Net, Items Net of Reserve Alternative [Abstract] | ||
Raw materials | $ 67,026 | $ 66,591 |
Work in process | 17,479 | 15,148 |
Finished goods | 77,266 | 77,395 |
Total | $ 161,771 | $ 159,134 |
Goodwill - Goodwill Rollforward
Goodwill - Goodwill Rollforward (Details) $ in Thousands | 6 Months Ended |
Mar. 31, 2021USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 718,647 |
Foreign currency translation impact | 4,279 |
Impairment | (212,302) |
Goodwill, ending balance | 510,624 |
Electronic Materials | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 360,425 |
Foreign currency translation impact | 2,375 |
Impairment | 0 |
Goodwill, ending balance | 362,800 |
Performance Materials | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 358,222 |
Foreign currency translation impact | 1,904 |
Impairment | (212,302) |
Goodwill, ending balance | $ 147,824 |
Goodwill - Narrative (Details)
Goodwill - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | |
Goodwill [Line Items] | ||||||
Goodwill impairment loss | $ 212,302 | |||||
Goodwill, impairment loss | $ 510,624 | 510,624 | $ 718,647 | |||
Tax benefit | $ 16,109 | $ (7,144) | $ 8,563 | $ (18,025) | ||
Discount rate | ||||||
Goodwill [Line Items] | ||||||
Fair value estimate, measurement inputs | 10.75% | 10.75% | ||||
Growth rate | ||||||
Goodwill [Line Items] | ||||||
Fair value estimate, measurement inputs | 3.00% | 3.00% | ||||
Wood Treatment | ||||||
Goodwill [Line Items] | ||||||
Goodwill impairment loss | $ 6,671 | $ 10,752 | ||||
Intangible assets | $ 0 | |||||
Goodwill, impairment loss | 24,300 | 24,300 | ||||
Tax benefit | 606 | |||||
Performance Materials | ||||||
Goodwill [Line Items] | ||||||
Goodwill impairment loss | 212,302 | |||||
Goodwill, impairment loss | 147,824 | 147,824 | $ 358,222 | |||
Performance Materials | PIM | ||||||
Goodwill [Line Items] | ||||||
Goodwill impairment loss | 201,550 | |||||
Intangible assets | 593,114 | 593,114 | ||||
Goodwill, impairment loss | 118,564 | 118,564 | ||||
Other intangible assets not subject to amortization | 46,000 | 46,000 | ||||
Tax benefit | $ 23,539 | $ 23,539 |
Impairment - Wood Treatment - N
Impairment - Wood Treatment - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Sep. 30, 2020 | |
Impaired Long-Lived Assets Held and Used [Line Items] | ||||||
Impairment charges | $ 215,568 | $ 0 | ||||
Goodwill impairment loss | 212,302 | |||||
Goodwill | $ 510,624 | 510,624 | $ 718,647 | |||
Tax benefit | 16,109 | $ (7,144) | 8,563 | $ (18,025) | ||
Performance Materials | ||||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||||
Goodwill impairment loss | 212,302 | |||||
Goodwill | 147,824 | 147,824 | $ 358,222 | |||
PIM | Performance Materials | ||||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||||
Intangible assets | 593,114 | 593,114 | ||||
Goodwill impairment loss | 201,550 | |||||
Goodwill | 118,564 | 118,564 | ||||
Tax benefit | 23,539 | 23,539 | ||||
Wood Treatment | ||||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||||
Impairment charges | $ 3,266 | |||||
Intangible assets | $ 0 | |||||
Goodwill impairment loss | 6,671 | 10,752 | ||||
Goodwill | $ 24,300 | 24,300 | ||||
Tax benefit | $ 606 |
Impairment - Wood Treatment - L
Impairment - Wood Treatment - Long-lived Asset Impairment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Impaired Long-Lived Assets Held and Used [Line Items] | |||||
Impairment of property, plant and equipment | $ 215,568 | $ 0 | |||
Goodwill | 212,302 | ||||
Total wood treatment impairment charges | $ 208,221 | $ 0 | 215,568 | $ 0 | |
Wood Treatment | |||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||
Impairment of property, plant and equipment | $ 3,266 | ||||
Goodwill | 6,671 | 10,752 | |||
Total wood treatment impairment charges | 6,671 | 14,018 | |||
Wood Treatment | Product technology | |||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||
Other intangible assets | 0 | 583 | |||
Wood Treatment | Acquired patents and licenses | |||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||
Other intangible assets | 0 | 173 | |||
Wood Treatment | Customer relationships, distribution rights, and other | |||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||
Other intangible assets | 0 | 2,419 | |||
Property, Plant and Equipment | Wood Treatment | |||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||
Impairment of property, plant and equipment | $ 0 | $ 91 |
Other Long-Term Assets (Details
Other Long-Term Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 |
Other long-term assets [Abstract] | ||
Right of use asset | $ 30,570 | $ 30,999 |
Interest rate swap (See Note 11) | 16,464 | 0 |
Vendor contract assets | 2,097 | 2,889 |
SERP investment | 1,353 | 1,214 |
Prepaid unamortized debt issuance cost - revolver | 451 | 537 |
Other long-term assets | 4,438 | 4,368 |
Total | $ 55,373 | $ 40,007 |
Accrued Expenses, Income Taxe_3
Accrued Expenses, Income Taxes Payable And Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 |
Payables and Accruals [Abstract] | ||
Accrued compensation | $ 37,258 | $ 46,465 |
Income taxes payable | 16,724 | 16,216 |
Dividends payable | 14,011 | 13,669 |
Asset retirement obligation | 11,951 | 0 |
Current portion of operating lease liability | 6,999 | 6,513 |
Contract liabilities (current) | 6,660 | 8,501 |
Current portion of terminated swap liability (See Note 11) | 5,855 | 0 |
Taxes, other than income taxes | 5,720 | 5,044 |
Goods and services received, not yet invoiced | 4,514 | 3,957 |
Interest rate swap liability (See Note 11) | 2,976 | 11,992 |
Accrued interest | 113 | 29 |
Other | 10,727 | 9,056 |
Total | $ 123,508 | $ 121,442 |
Debt - Total Debt (Details)
Debt - Total Debt (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2021 | Sep. 30, 2020 | |
Debt Instrument [Line Items] | ||
Less: Unamortized debt issuance costs | $ (13,486) | $ (14,949) |
Total | 917,552 | 921,414 |
Less: Current maturities and short-term debt | (10,650) | (10,650) |
Long-term debt, net of current portion | 906,902 | 910,764 |
Senior secured term loan facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 931,038 | $ 936,363 |
Senior secured term loan facility | LIBOR | Credit Agreement | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.00% |
Debt - Narrative (Details)
Debt - Narrative (Details) - Revolving credit facility - Line of credit $ in Thousands | Mar. 31, 2021USD ($) |
Credit Agreement | |
Debt Instrument [Line Items] | |
Borrowings outstanding | $ 0 |
Amended Credit Agreement | |
Debt Instrument [Line Items] | |
Available credit remaining | $ 200,000 |
Debt - Principal Repayments (De
Debt - Principal Repayments (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 |
Principal Repayments | ||
Total | $ 917,552 | $ 921,414 |
Term loan facility | ||
Principal Repayments | ||
Remainder of 2021 | 5,325 | |
2022 | 10,650 | |
2023 | 10,650 | |
2024 | 10,650 | |
2025 | 10,650 | |
Greater than 5 years | 883,113 | |
Total | $ 931,038 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Mar. 31, 2021 | Mar. 31, 2021 | |
Derivative Instruments [Abstract] | ||
Gain (loss) reclassified from accumulated other comprehensive income into interest expense, estimated time to transfer | 12 months | |
Interest rate swap contract | ||
Derivative Instruments [Abstract] | ||
Interest rate swap, in loss position | $ 35,300 | |
Reclassified from accumulated other comprehensive income into interest expense | $ 14,120 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Notional Amounts (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 |
Interest rate swap contract | ||
Derivative [Line Items] | ||
Derivative notional amount | $ 558,405 | $ 571,000 |
Foreign exchange contracts | Buy | ||
Derivative [Line Items] | ||
Derivative notional amount | 5,988 | 8,054 |
Foreign exchange contracts | Sell | ||
Derivative [Line Items] | ||
Derivative notional amount | $ 30,450 | $ 25,105 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Fair Value of Derivative Instruments in the Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 |
Derivatives designated as hedging instruments | Interest rate swap contract | Other long-term assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | $ 16,464 | $ 0 |
Derivative Liabilities | 0 | 0 |
Derivatives designated as hedging instruments | Interest rate swap contract | Accrued expenses, income taxes payable and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Derivative Liabilities | 2,976 | 11,992 |
Derivatives designated as hedging instruments | Interest rate swap contract | Other long-term liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Derivative Liabilities | 0 | 26,000 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Accrued expenses, income taxes payable and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Derivative Liabilities | 347 | 165 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 16 | 27 |
Derivative Liabilities | $ 0 | $ 0 |
Derivative Financial Instrume_6
Derivative Financial Instruments - Effect of Derivative Instruments on the Consolidated Statement of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Derivatives designated as hedging instruments | Interest rate swap contract | Interest expense | ||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Gain (Loss) Recognized in Statement of Income | $ (809) | $ (1,366) | $ (3,254) | $ (2,537) |
Derivatives designated as hedging instruments | Terminated interest rate swap contract | Interest expense | ||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Gain (Loss) Recognized in Statement of Income | (2,786) | 0 | (3,715) | 0 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Other income (expense), net | ||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Gain (Loss) Recognized in Statement of Income | $ (759) | $ (268) | $ (637) | $ (262) |
Derivative Financial Instrume_7
Derivative Financial Instruments - Effect of Derivative Instruments on Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Interest rate swap contract | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) | $ 19,361 | $ (23,655) | $ 12,912 | $ (19,340) |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2016USD ($) | Mar. 31, 2021USD ($) | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2017party | |
Environmental Exit Cost [Line Items] | |||||
Insurance recoveries to date | $ 1,076 | $ 1,076 | |||
Abrasive particle supply agreement | |||||
Environmental Exit Cost [Line Items] | |||||
Purchase obligation | 13,820 | 13,820 | |||
KMG-Bernuth | |||||
Environmental Exit Cost [Line Items] | |||||
Remediation expense recognized | 0 | $ 593 | |||
Estimated remediation cost | $ 22,000 | ||||
Number of other parties in agreement | party | 7 | ||||
Estimated reserve, remaining | $ 204 | $ 204 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | $ 1,074,313 | |||
Other comprehensive income (loss), net of tax | $ 4,001 | $ (37,032) | 23,240 | $ (16,922) |
Net Change | 4,001 | (37,032) | 23,240 | (17,410) |
Balance at end of period | 958,829 | 1,009,410 | 958,829 | 1,009,410 |
Cumulative Effect, Period of Adoption, Adjustment | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Foreign currency translation adjustment | 0 | 0 | 0 | (497) |
Income tax (expense) benefit | 0 | 0 | 0 | 9 |
Other comprehensive income (loss), net of tax | 0 | 0 | 0 | (488) |
Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 5,135 | (3,616) | (14,104) | (23,238) |
Balance at end of period | 9,136 | (40,648) | 9,136 | (40,648) |
Accumulated foreign currency adjustments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Foreign currency translation adjustment | (13,763) | (19,752) | 7,780 | (3,935) |
Income tax (expense) benefit | (52) | 27 | 30 | 61 |
Other comprehensive income (loss), net of tax | (13,815) | (19,725) | 7,810 | (3,874) |
Interest rate swap contract | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Income tax (expense) benefit | (5,140) | 4,982 | (4,451) | 3,755 |
Other comprehensive income (loss), net of tax | 17,816 | (17,307) | 15,430 | (13,048) |
Change in fair value | 19,361 | (23,655) | 12,912 | (19,340) |
Reclassification adjustment into earnings | $ 3,595 | $ 1,366 | $ 6,969 | $ 2,537 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 9.70% | 17.80% | 6.80% | 20.10% |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Numerator: | ||||
Net (loss) income available to common shares | $ (149,808) | $ 32,899 | $ (118,278) | $ 71,448 |
Denominator: | ||||
Weighted average common shares (in shares) | 29,210 | 29,287 | 29,164 | 29,183 |
Weighted average effect of dilutive securities | ||||
Weighted average effect of dilutive securities (in shares) | 0 | 438 | 0 | 483 |
Diluted weighted average common shares (in shares) | 29,210 | 29,725 | 29,164 | 29,666 |
(Loss) earnings per share: | ||||
Basic (in dollars per share) | $ (5.13) | $ 1.12 | $ (4.06) | $ 2.45 |
Diluted (in dollars per share) | $ (5.13) | $ 1.11 | $ (4.06) | $ 2.41 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Outstanding stock options (in shares) | 0 | 111 | 0 | 79 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) | 6 Months Ended |
Mar. 31, 2021segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Reporting - Revenue fro
Segment Reporting - Revenue from External Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 290,528 | $ 284,193 | $ 578,391 | $ 567,336 |
Electronic Materials | Operating segment | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 242,547 | 218,909 | 479,345 | 439,630 |
Electronic Materials | CMP Slurries | Operating segment | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 140,194 | 119,822 | 274,915 | 242,148 |
Electronic Materials | Electronic Chemicals | Operating segment | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 80,098 | 78,497 | 160,104 | 156,079 |
Electronic Materials | CMP Pads | Operating segment | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 22,255 | 20,590 | 44,326 | 41,403 |
Performance Materials | Operating segment | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 47,981 | 65,284 | 99,046 | 127,706 |
Performance Materials | PIM | Operating segment | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 25,987 | 44,480 | 51,894 | 89,621 |
Performance Materials | Wood Treatment | Operating segment | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 15,546 | 14,974 | 32,869 | 25,648 |
Performance Materials | QED | Operating segment | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 6,448 | $ 5,830 | $ 14,283 | $ 12,437 |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation from Segment Adjusted EBITDA (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting Information [Line Items] | ||||
Net (loss) income | $ (149,808) | $ 32,899 | $ (118,278) | $ 71,448 |
Interest expense | 9,508 | 10,753 | 19,116 | 22,673 |
Interest income | (13) | (143) | (36) | (458) |
Income taxes | (16,109) | 7,144 | (8,563) | 18,025 |
Depreciation and amortization | 32,289 | 32,550 | 64,180 | 64,192 |
EBITDA | (124,133) | 83,203 | (43,581) | 175,880 |
Impairment charges | 208,221 | 0 | 215,568 | 0 |
Acquisition and integration-related expenses | 2,167 | 2,285 | 4,536 | 5,050 |
Costs related to the Pandemic, net of grants received | (421) | 237 | 841 | 237 |
Net costs related to restructuring of the wood treatment business | 46 | 0 | 72 | 0 |
Costs related to KMG-Bernuth warehouse fire, net of insurance recovery | (1,076) | 206 | (1,076) | 598 |
Consolidated adjusted EBITDA | 84,804 | 85,931 | 176,360 | 181,765 |
Operating segment | Electronic Materials | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated adjusted EBITDA | 81,315 | 69,603 | 162,071 | 150,807 |
Operating segment | Performance Materials | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated adjusted EBITDA | 18,750 | 29,932 | 41,725 | 57,411 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Unallocated corporate expenses | $ (15,261) | $ (13,604) | $ (27,436) | $ (26,453) |
Segment Reporting - Capital Exp
Segment Reporting - Capital Expenditures (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting Information [Line Items] | ||||
Capital expenditures | $ 9,715 | $ 37,977 | $ 19,934 | $ 64,343 |
Operating segment | Electronic Materials | ||||
Segment Reporting Information [Line Items] | ||||
Capital expenditures | 6,258 | 5,094 | 11,692 | 13,579 |
Operating segment | Performance Materials | ||||
Segment Reporting Information [Line Items] | ||||
Capital expenditures | 957 | 29,328 | 2,267 | 45,697 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Capital expenditures | $ 2,500 | $ 3,555 | $ 5,975 | $ 5,067 |
Subsequent Event (Details)
Subsequent Event (Details) - International Test Solutions, Inc. - Subsequent Event - USD ($) $ in Thousands | Apr. 01, 2021 | Apr. 30, 2021 |
Subsequent Event [Line Items] | ||
Acquisition of ITS | 100.00% | |
Cash consideration paid | $ 125,000 |