UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
____________________________
FORM 8-K
CURRENT REPORT
Pursuant To Section 13 Or
15(d) Of The Securities Exchange Act Of 1934
Date of report (Date of earliest event
reported) |
December 8,
2014 |
PHOTRONICS,
INC. |
(Exact name of registrant as specified in
its charter) |
Connecticut |
|
0-15451 |
|
06-0854886 |
(State or other jurisdiction |
|
(Commission |
|
(IRS Employer |
of incorporation) |
|
File Number) |
|
Identification
Number) |
15 Secor Road,
Brookfield, CT |
|
06804 |
(Address of Principal Executive
Offices) |
|
(Zip
Code) |
Registrant's Telephone Number, including area code |
(203)
775-9000 |
|
(Former name or former address, if changed
since last report) |
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
¨ |
|
Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425) |
¨ |
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12) |
¨ |
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)) |
¨ |
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 |
|
Results of Operations and Financial
Condition |
On December 8, 2014, the
Company issued a press release reporting fourth quarter and fiscal year end
results. A copy of the press release is attached to this 8-K.
A copy of the press release is
furnished as Exhibit 99.1 to this report. The information contained in this Item
2.02 and the attached Exhibits 99.1, 99.2, 99.3, 99.4, 99.5, 99.6 and 99.7 shall
not be deemed filed for purposes of Section 18 of the Securities Exchange Act
of 1934 and shall not be incorporated by reference in any filing under the
Securities Act of 1933 except as shall be expressly set forth by specific
reference in such filing.
On December 9, 2014, the
Company will conduct a conference call during which certain unaudited, non-GAAP
financial information related to the Companys operations for the three months
and fiscal year ended November 2, 2014 will be disclosed. This information is
set forth in Exhibit 99.6 and 99.7.
EBITDA is a non-GAAP financial
measure that the Company defines pursuant to its credit agreement. The Company
believes that EBITDA is generally accepted as providing useful information
regarding the operational strength and performance of its business, including
the ability of the Company to pay interest, service debt and fund capital
expenditures. The Companys method for calculating EBITDA may not be comparable
to methods used by other companies but is the same method the Company uses for
calculating EBITDA under its credit facility.
Item 9.01. |
|
Financial Statements and
Exhibits |
(d) |
Exhibits |
|
99.1 |
|
Press
Release dated December 8, 2014 |
|
99.2 |
|
Condensed
Consolidated Statements of Income |
|
99.3 |
|
Condensed
Consolidated Balance Sheets |
|
99.4 |
|
Condensed
Consolidated Statements of Cash Flows |
|
99.5 |
|
Reconciliation of GAAP to Non-GAAP Financial
Information |
|
99.6 |
|
Reconciliation of GAAP Net Income to EBITDA |
|
99.7 |
|
Reconciliation of GAAP Operating Income to Non-GAAP Operating
Income. |
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned hereunto duly authorized.
PHOTRONICS,
INC. |
(Registrant) |
DATE: December 9, 2014 |
BY |
/s/
Richelle E.
Burr |
|
|
Richelle E. Burr |
|
|
Vice
President, General Counsel |
|
FOR FURTHER INFORMATION: Pete Broadbent Vice
President, Investor Relations & Marketing (203)
775-9000 pbroadbent@photronics.com |
Press Release |
|
PHOTRONICS REPORTS
FOURTH QUARTER
AND FISCAL
2014 RESULTS
- Quarterly
sales of $124.3 million
- Quarterly
GAAP and Non-GAAP diluted EPS of
$0.07; within guidance of $0.07 -
$0.11
- Quarterly
Non-GAAP EBITDA of $33 million
- Net cash of $51 million up $22 million
sequentially
BROOKFIELD, Conn. December 08, 2014
Photronics, Inc. (NASDAQ:PLAB), a
worldwide leader in
supplying innovative imaging technology
solutions for the global electronics
industry, today reported financial
results for the fourth quarter and fiscal year
ended November 2, 2014.
Constantine
("Deno") Macricostas, Photronics
chairman and chief executive officer,
commented: Fourth quarter
revenues were slightly lower than
previously anticipated due to slower
than expected ramps in advanced memory
nodes and a pause in 28nm demand
due to a refresh of the design pipeline at a foundry customer. Our market
position remains strong and our
qualifications are in place for these customers
and we expect the ramps to materialize and drive revenue growth in the
new fiscal year.
Sales for the
fourth quarter of fiscal 2014 were
$124.3 million, compared with
$106.0 million for the fourth
quarter of fiscal year 2013. Sales of
semiconductor photomasks were
$99.4 million, or 80% of revenues,
during the fourth quarter of fiscal 2014, and
sales of flat panel display (FPD) photomasks
were $24.9 million, or 20% of
revenues. For the fourth quarter of fiscal
2014, GAAP and Non-GAAP net
income attributable to Photronics, Inc. shareholders
was $4.3 million, or $0.07 per diluted
share, compared with $4.8 million, or $0.08
per diluted share, for the fourth quarter of
fiscal 2013. Non-GAAP net income
attributable to Photronics, Inc.
shareholders for the fourth quarter of 2013,
excluding joint venture transaction
expenses of $0.8 million, was
$5.6 million, or $0.09 per diluted
share.
Sales for the
2014 fiscal year were $455.5 million, compared
with $422.2 million for the 2013 fiscal year.
For the 2014 fiscal year, sales of semiconductor photomasks were $352.7 million, or 77% of revenues, and sales of FPD
photomasks were $102.8 million, or 23% of
revenues. GAAP net income attributable to Photronics, Inc. shareholders for the
2014 fiscal year was $26.0 million, or $0.41
per diluted share, compared with
GAAP net income of $18.0 million, or $0.29 per diluted share, for the 2013 fiscal
year. Non-GAAP net income attributable to Photronics, Inc. shareholders for the
2014 fiscal year, excluding the acquisition gain of $16.4 million and expenses
related to the joint venture of $2.5 million, was $12.1 million, or $0.19 per
diluted share. Non-GAAP net income attributable to Photronics,
Inc. shareholders for the 2013 fiscal year, excluding $0.8 million in expenses
related to the joint venture, was $18.7 million, or $0.30 per diluted share.
1
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.
shareholders 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. shareholders 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 of prior
periods. These non-GAAP metrics, in particular non-GAAP net income attributable
to Photronics, Inc. shareholders 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 the 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:
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
accounting principles generally accepted in the United States. The attached
financial supplement reconciles non-GAAP financial information with Photronics,
Inc.'s financial results under GAAP.
2
A conference call with
investors and the media to discuss these results is scheduled for 8:30 a.m.
Eastern time on Tuesday, December 9, 2014. The live dial-in number is (408)
774-4601. The call can also be accessed by logging onto Photronics' web
site at www.photronics.com. The
call will be archived for instant replay access until the Company reports its
fiscal 2015 first quarter results.
# # #
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 Companys 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 as well as
decisions we may make in the future regarding our business, capital structure
and other matters. These forward-looking statements generally can be identified
by phrases such as believes, expects, anticipates, plans, projects,
could, estimate, intend, may, will and similar expressions.
Accordingly, there is no assurance that the Companys 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.
11-2014
PLAB E
3
PHOTRONICS, INC. AND
SUBSIDIARIES
Condensed Consolidated Statements of
Income
(in thousands,
except per share amounts)
|
|
Three Months
Ended |
|
Year
Ended |
|
|
November 2, |
|
November 3, |
|
November 2, |
|
November 3, |
|
|
2014 |
|
2013 |
|
2014 |
|
2013 |
Net sales |
|
$
|
124,251 |
|
|
$
|
106,009 |
|
|
$
|
455,527 |
|
|
$
|
422,180 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales |
|
|
(97,626 |
) |
|
|
(79,334 |
) |
|
|
(355,181 |
) |
|
|
(322,540 |
) |
Selling, general and
administrative |
|
|
(11,547 |
) |
|
|
(12,928 |
) |
|
|
(49,638 |
) |
|
|
(48,213 |
) |
Research and development |
|
|
(5,801 |
) |
|
|
(6,378 |
) |
|
|
(21,913 |
) |
|
|
(20,758 |
) |
Operating income |
|
|
9,277 |
|
|
|
7,369 |
|
|
|
28,795 |
|
|
|
30,669 |
|
Gain on acquisition |
|
|
- |
|
|
|
- |
|
|
|
16,372 |
|
|
|
- |
|
Other expense, net |
|
|
(574 |
) |
|
|
(1,384 |
) |
|
|
(3,837 |
) |
|
|
(3,864 |
) |
Income before income taxes |
|
|
8,703 |
|
|
|
5,985 |
|
|
|
41,330 |
|
|
|
26,805 |
|
Income tax provision |
|
|
(2,004 |
) |
|
|
(1,072 |
) |
|
|
(9,295 |
) |
|
|
(7,229 |
) |
Net income |
|
|
6,699 |
|
|
|
4,913 |
|
|
|
32,035 |
|
|
|
19,576 |
|
Net
income attributable to noncontrolling interests |
|
|
(2,422 |
) |
|
|
(73 |
) |
|
|
(6,039 |
) |
|
|
(1,610 |
) |
Net income attributable to Photronics, Inc.
shareholders |
|
$ |
4,277 |
|
|
$ |
4,840 |
|
|
$ |
25,996 |
|
|
$ |
17,966 |
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.07 |
|
|
$ |
0.08 |
|
|
$ |
0.42 |
|
|
$ |
0.30 |
|
Diluted |
|
$ |
0.07 |
|
|
$ |
0.08 |
|
|
$ |
0.41 |
|
|
$ |
0.29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
63,106 |
|
|
|
61,058 |
|
|
|
61,779 |
|
|
|
60,644 |
|
Diluted |
|
|
64,085 |
|
|
|
61,962 |
|
|
|
66,679 |
|
|
|
61,599 |
|
PHOTRONICS, INC. AND
SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
|
November 2, |
|
November 3, |
|
2014 |
|
2013 |
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and
cash equivalents |
$
|
192,929 |
|
$
|
215,615 |
Accounts
receivable |
|
94,515 |
|
|
73,357 |
Inventories |
|
22,478 |
|
|
18,849 |
Other
current assets |
|
26,570 |
|
|
10,645 |
|
Total current assets |
|
336,492 |
|
|
318,466 |
|
Property, plant and equipment, net |
|
550,069 |
|
|
422,740 |
Investment in joint venture |
|
93,122 |
|
|
93,124 |
Intangible assets, net |
|
30,294 |
|
|
34,080 |
Other assets |
|
19,206 |
|
|
17,519 |
|
|
$ |
1,029,183 |
|
$ |
885,929 |
|
Liabilities and
Equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Current
portion of long-term borrowings |
$ |
10,381 |
|
$ |
11,818 |
Accounts
payable and accrued liabilities |
|
128,736 |
|
|
92,769 |
|
Total current liabilities |
|
139,117 |
|
|
104,587 |
|
Long-term borrowings |
|
131,805 |
|
|
182,203 |
Other liabilities |
|
18,767 |
|
|
11,308 |
|
Photronics, Inc. shareholders' equity |
|
628,050 |
|
|
585,314 |
Noncontrolling interests |
|
111,444 |
|
|
2,517 |
Total equity |
|
739,494 |
|
|
587,831 |
|
|
$ |
1,029,183 |
|
$ |
885,929 |
PHOTRONICS, INC. AND
SUBSIDIARIES
Condensed Consolidated Statements of Cash
Flows
(in
thousands)
|
Year
Ended |
|
November 2, |
|
November 3, |
|
2014 |
|
2013 |
Cash
flows from operating activities: |
|
|
|
|
|
|
|
Net income |
$ |
32,035 |
|
|
$ |
19,576 |
|
Adjustments to reconcile
net income to net cash |
|
|
|
|
|
|
|
provided by operating
activities: |
|
|
|
|
|
|
|
Gain on acquisition |
|
(16,372 |
) |
|
|
- |
|
Depreciation and amortization |
|
80,136 |
|
|
|
72,942 |
|
Changes in assets and liabilities and other |
|
562 |
|
|
|
6,883 |
|
|
Net
cash provided by operating activities |
|
96,361 |
|
|
|
99,401 |
|
|
Cash
flows from investing activities: |
|
|
|
|
|
|
|
Purchases of property,
plant and equipment |
|
(91,085 |
) |
|
|
(63,792 |
) |
Cash from
acquisition |
|
4,508 |
|
|
|
- |
|
Other |
|
(908 |
) |
|
|
(2,445 |
) |
|
Net
cash used in investing activities |
|
(87,485 |
) |
|
|
(66,237 |
) |
|
Cash
flows from financing activities: |
|
|
|
|
|
|
|
Repayments of long-term
borrowings |
|
(29,782 |
) |
|
|
(8,314 |
) |
Purchase of common stock
of subsidiary |
|
- |
|
|
|
(32,374 |
) |
Payment of deferred
financing fees |
|
(346 |
) |
|
|
(40 |
) |
Proceeds from
share-based arrangements |
|
1,298 |
|
|
|
884 |
|
Other |
|
(711 |
) |
|
|
- |
|
|
Net
cash used in financing activities |
|
(29,541 |
) |
|
|
(39,844 |
) |
|
Effect of exchange rate changes on cash |
|
(2,021 |
) |
|
|
4,252 |
|
|
Net
decrease in cash and cash equivalents |
|
(22,686 |
) |
|
|
(2,428 |
) |
Cash
and cash equivalents, beginning of period |
|
215,615 |
|
|
|
218,043 |
|
|
Cash
and cash equivalents, end of period |
$ |
192,929 |
|
|
$ |
215,615 |
|
|
Noncash net assets from acquisition |
$ |
110,211 |
|
|
$ |
- |
|
PHOTRONICS, INC. AND
SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial
Information
(in thousands,
except per share data)
(Unaudited)
|
Three Months
Ended |
|
Year
Ended |
|
November 2, |
|
November 3, |
|
November 2, |
|
November 3, |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
Reconciliation of GAAP to Non-GAAP Net
Income |
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to Photronics, Inc.
Shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
net income attributable to Photronics, Inc. shareholders |
$ |
4,277 |
|
$ |
4,840 |
|
$ |
25,996 |
|
|
$ |
17,966 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Gain on acquisition, net of tax |
|
- |
|
|
- |
|
|
(16,372 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) Acquisition
transaction expenses, net of tax |
|
- |
|
|
773 |
|
|
2,455 |
|
|
|
773 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income attributable to
Photronics, Inc. shareholders |
$ |
4,277 |
|
$ |
5,613 |
|
$ |
12,079 |
|
|
$ |
18,739 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Net Income |
|
|
|
|
|
|
|
|
|
|
|
|
Applicable to
Common Shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of diluted shares
outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
64,085 |
|
|
61,962 |
|
|
66,679 |
|
|
|
61,599 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
|
64,085 |
|
|
61,962 |
|
|
62,734 |
|
|
|
61,599 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income per diluted share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
$ |
0.07 |
|
$ |
0.08 |
|
$ |
0.41 |
|
|
$ |
0.29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
$ |
0.07 |
|
$ |
0.09 |
|
$ |
0.19 |
|
|
$ |
0.30 |
(a) |
|
Represents
gain on acquisition of DNP Photomask Technology Taiwan Co., Ltd (DPTT), a
wholly-owned subsidiary of Dai Nippon Printing Co., Ltd |
|
(b) |
|
Represents
transaction expenses in connection with the acquisition of
DPTT. |
PHOTRONICS, INC. AND
SUBSIDIARIES
Non-GAAP Financial Measure
Reconciliation of GAAP Net Income
to EBITDA
(in
thousands)
(Unaudited)
|
Three Months
Ended |
|
Year
Ended |
|
November 2, |
|
November 3, |
|
November 2, |
|
November 3, |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
GAAP Net Income (a) |
$
|
6,699 |
|
$
|
4,913 |
|
$
|
32,035 |
|
|
$
|
19,576 |
|
Add:
interest expense |
|
1,638 |
|
|
2,051 |
|
|
7,247 |
|
|
|
7,756 |
Add:
income tax expense |
|
2,004 |
|
|
1,072 |
|
|
9,295 |
|
|
|
7,229 |
Add:
depreciation and amortization |
|
21,421 |
|
|
17,453 |
|
|
78,685 |
|
|
|
71,408 |
Add
(less): special items (b) |
|
941 |
|
|
1,156 |
|
|
(9,846 |
) |
|
|
3,974 |
EBITDA |
$ |
32,703 |
|
$ |
26,645 |
|
$ |
117,416 |
|
|
$ |
109,943 |
(a) |
|
Includes
net income attributable to noncontrolling interests. |
|
(b) |
|
Special
items consist of stock compensation expense, and in 2014 noncash gain on
acquisition of DNP Photomask Technology Taiwan, Co., Ltd., a wholly-owned
subsidiary of Dai Nippon Printing Co., Ltd., and related acquisition
transaction expenses. |
PHOTRONICS, INC. AND
SUBSIDIARIES
Non-GAAP Financial
Measure
Reconciliation of GAAP Operating Income to Non-GAAP
Operating Income
(in
thousands)
(Unaudited)
|
|
Three Months
Ended |
|
Year
Ended |
|
|
November 2, |
|
November 3, |
|
November 2, |
|
November 3, |
|
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
|
$ |
|
% |
|
$ |
|
% |
|
$ |
|
% |
|
$ |
|
% |
|
|
|
|
|
(b) |
|
|
|
|
(b) |
|
|
|
|
(b) |
|
|
|
|
(b) |
GAAP Operating Income |
|
$ |
9,277 |
|
7.5 |
% |
|
$ |
7,369 |
|
7.0 |
% |
|
$ |
28,795 |
|
6.3 |
% |
|
$ |
30,669 |
|
7.3 |
% |
(a) Acquisition transaction
expenses |
|
|
|
|
|
|
|
|
773 |
|
0.7 |
|
|
|
2,455 |
|
0.6 |
|
|
|
773 |
|
0.1 |
|
|
Non-GAAP Operating Income |
|
$ |
9,277 |
|
7.5 |
% |
|
$ |
8,142 |
|
7.7 |
% |
|
$ |
31,250 |
|
6.9 |
% |
|
$ |
31,442 |
|
7.4 |
% |
(a) |
|
Represents
transaction expenses in connection with the acquisition of DNP Photomask
Technology Taiwan Co., Ltd., a wholly-owned subsidiary of Dai Nippon
Printing Co., Ltd. |
|
(b) |
|
Represents
percentage of net sales. |
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