Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in supplying
innovative imaging technology solutions for the global electronics
industry today reported fiscal 2011 first quarter results for the
period ended January 30, 2011.
Constantine (“Deno”) Macricostas, Photronics’ chairman and chief
executive officer commented, “We began fiscal year 2011 with very
strong financial performance, achieving record quarterly sales of
$120.8 million. As a result of robust demand for both IC and FPD
photomasks we grew revenue by 23% year over year and 10%
sequentially, even though the first quarter is typically seasonally
slow. On the bottom line, the strong leverage in our business model
resulted in EBITDA for the quarter of $42 million and EPS of $0.20
per diluted share.”
“We saw particular strength for high-end IC photomasks, which is
a testament to the success of our strategy to invest in
leading-edge IC capabilities,” continued Macricostas. “Our recent
installation of an FPD tool also paid dividends in the quarter as
FPD revenues increased significantly, especially at the high end.
Looking forward, we are excited by our prospects for growth in 2011
and will continue to make the necessary investments to grow our
position in the market.”
Sales for the first quarter were $120.8 million, an increase of
23% compared to $98.2 million for the first quarter of fiscal year
2010. Sales of semiconductor photomasks accounted for $88.8
million, or 73.5% of revenues during the first quarter of fiscal
2011, and sales of flat panel display (FPD) photomasks accounted
for $32.0 million, or 26.5% of revenues. GAAP net income
attributable to Photronics, Inc. for the first quarter of fiscal
year 2011 was $12.1 million, or $0.20 earnings per diluted share,
compared to $0.2 million, or $0.00 earnings per diluted share for
the first quarter of fiscal 2010.
Non-GAAP net income attributable to Photronics, Inc. for the
first quarter of 2011 was $12.2 million, or $0.20 earnings per
diluted share, compared to $0.6 million, or $0.01 per diluted
share, for the first quarter of 2010. The section below entitled
“Non-GAAP Financial Measures” provides a definition and information
about the use of non-GAAP financial measures in this press release
and the attached financial supplement reconciles non-GAAP financial
information with Photronics, Inc.’s financial results under
GAAP.
Non-GAAP Financial Measures
Non-GAAP net income attributable to Photronics, Inc. and
non-GAAP earnings per share are “non-GAAP financial measures,” as
such term is defined by the Securities and Exchange Commission, and
may differ from non-GAAP financial measures used by other
companies. Photronics, Inc. believes that non-GAAP net income
attributable to Photronics, Inc. and non-GAAP earnings per share
that exclude certain non-cash or non-recurring income or expense
items are useful for analysts and investors to evaluate Photronics,
Inc.’s future on-going performance because they enable a more
meaningful comparison of Photronics, Inc.’s projected earnings and
performance with its historical results from prior periods. These
non-GAAP metrics, in particular non-GAAP net income attributable to
Photronics, Inc. and non-GAAP earnings per share, are not intended
to represent funds available for Photronics, Inc.’s discretionary
use and are not intended to represent or be used as a substitute
for operating income, net income or cash flows from operations data
as measured under GAAP. The items excluded from these non-GAAP
metrics, but included in the calculation of their closest GAAP
equivalent, are significant components of consolidated statements
of operations and must be considered in performing a comprehensive
assessment of overall financial performance. Non-GAAP financial
information is adjusted for the following items:
- Impact of financing expenses related to
warrants are excluded because they do not affect cash earnings
- Consolidation and restructuring charges
are excluded because they are not a part of ongoing operations
The presentation of this financial information should not be
considered in isolation or as a substitute for the financial
information prepared and presented in accordance with generally
accepted accounting principles in the United States. The attached
financial supplement reconciles non-GAAP financial information with
Photronics, Inc.'s financial results under GAAP.
A conference call with investors and the media to discuss these
results is scheduled for 8:30 a.m. Eastern time on Wednesday,
February 16, 2011. The live dial-in number is (408) 774-4601. A
live webcast of the call also can be accessed by logging onto
Photronics’ web site at www.photronics.com
# # #
Photronics is a leading worldwide manufacturer of photomasks.
Photomasks are high precision quartz plates that contain
microscopic images of electronic circuits. A key element in the
manufacture of semiconductors and flat panel displays, photomasks
are used to transfer circuit patterns onto semiconductor wafers and
flat panel substrates during the fabrication of integrated
circuits, a variety of flat panel displays and, to a lesser extent,
other types of electrical and optical components. They are produced
in accordance with product designs provided by customers at
strategically located manufacturing facilities in Asia, Europe, and
North America. Additional information on the Company can be
accessed at www.photronics.com.
The Private Securities Litigation Reform Act of 1995 provides a
“safe harbor” for forward-looking statements made by or on behalf
of Photronics, Inc. and its subsidiaries (the Company). The
forward-looking statements contained in this press release and
other parts of Photronics’ web site involve risks and uncertainties
that may affect the Company’s operations, markets, products,
services, prices, and other factors. These risks and uncertainties
include, but are not limited to, economic, competitive, legal,
governmental, and technological factors. Accordingly, there is no
assurance that the Company’s expectations will be realized. For a
fuller discussion of the factors that may affect the Company's
operations, see "Forward Looking Statements" in the Company's
Quarterly and Annual Reports to the Securities and Exchange
Commission on Forms 10-Q and 10-K. The Company assumes no
obligation to provide revisions to any forward-looking
statements.
04-2011
PHOTRONICS, INC.
AND SUBSIDIARIES
Reconciliation of
GAAP to Non-GAAP Financial Information
(in thousands, except per share data) (Unaudited)
Three Months Ended January 30,
January 31, 2011 2010
Reconciliation of
GAAP to Non-GAAP Net Income
GAAP net income attributable to Photronics, Inc. $ 12,111 $
213
(a) Impact of warrants, net of tax 75 220
(b) Consolidation and restructuring charges, net of tax
- 193 Non-GAAP net income attributable to
Photronics, Inc. $ 12,186 $ 626 Weighted average number of
diluted shares outstanding 66,411 54,824
Earnings per diluted share GAAP $ 0.20 $ - Non-GAAP $
0.20 $ 0.01
(a) Represents financing expenses related
to warrants, which are recorded in other income (expense).
(b) Represents charges related to restructuring in China.
PHOTRONICS, INC.
AND SUBSIDIARIES
Condensed
Consolidated Statements of Operations
(in thousands, except per share amounts) (Unaudited)
Three Months Ended January 30,
January 31, 2011 2010 Net sales $
120,823 $ 98,197 Costs and expenses: Cost of sales
(90,229 ) (80,020 ) Selling, general and administrative
(10,713 ) (10,149 ) Research and development (3,771 ) (3,954
) Consolidation, restructuring and related charges -
(193 ) Operating income 16,110 3,881
Other income (expense), net 957 (2,453 )
Income before income taxes 17,067 1,428 Income tax
provision (3,483 ) (1,020 ) Net income 13,584
408 Net income attributable to noncontrolling interests
(1,473 ) (195 ) Net income attributable to
Photronics, Inc. $ 12,111 $ 213 Earnings per
share: Basic
$ 0.23 $
0.00 Diluted
$
0.20 $ 0.00
Weighted-average number of common shares outstanding: Basic
53,817 53,102
Diluted
66,411
54,824
PHOTRONICS, INC.
AND SUBSIDIARIES
Condensed
Consolidated Balance Sheets
(in thousands) (Unaudited)
January 30, October 31, 2011 2010
Assets
Current assets: Cash and cash equivalents $ 112,723 $ 98,945
Accounts receivable 80,672 82,951 Inventories 21,139 15,502 Other
current assets 8,296 8,404 Total current
assets 222,830 205,802 Property, plant and equipment, net
386,860 369,814 Investment in joint venture 65,773 61,127
Intangible assets, net 46,242 47,748 Other assets 18,844
19,388 $ 740,549 $ 703,879
Liabilities and
Equity
Current liabilities: Current portion of long-term borrowings
$ 12,009 $ 11,467 Accounts payable and accrued liabilities
129,304 107,762 Total current liabilities 141,313
119,229 Long-term borrowings 70,631 78,852 Deferred income
taxes and other liabilities 10,143 9,855 Equity
518,462 495,943 $ 740,549 $ 703,879
PHOTRONICS, INC.
AND SUBSIDIARIES
Condensed
Consolidated Statements of Cash Flows
(in thousands) (Unaudited)
Three Months Ended January 30, January 31,
2011 2010 Cash flows from operating
activities: Net income $ 13,584 $ 408 Adjustments to reconcile net
income to net cash provided by operating activities: Depreciation
and amortization 23,189 22,424 Changes in assets and liabilities
and other 4,882 (6,417 ) Net cash
provided by operating activities 41,655 16,415
Cash flows from investing activities: Purchases of
property, plant and equipment (19,120 ) (21,457 ) Investment in
joint venture (3,999 ) - Deposit on sale of facility - 4,190
Increase in restricted cash - (1,250 ) Proceeds from sales of
investments and other - 43 Net
cash used in investing activities (23,119 ) (18,474 )
Cash flows from financing activities: Repayments of
long-term borrowings (24,346 ) (7,250 ) Proceeds from long-term
borrowings 17,000 3,822 Proceeds from share-based payments
159 30 Net cash used in financing
activities (7,187 ) (3,398 ) Effect of
exchange rate changes on cash 2,429 1,319
Net increase (decrease) in cash and cash equivalents
13,778 (4,138 ) Cash and cash equivalents, beginning of period
98,945 88,539 Cash and
cash equivalents, end of period $ 112,723 $ 84,401
Supplemental disclosure of cash flow information: Change in
accrual for purchases of property, plant and equipment $ 13,273 $
(227 )
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