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
![](photronics_8kx1x1.jpg)
Date
of report (Date of earliest event reported) |
February 17,
2015 |
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
February 17, 2015, the Company issued a press release reporting first quarter
2015 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
February 18, 2015, the Company will conduct a conference call during which
certain unaudited, non-GAAP financial information related to the Companys
operations for the three months ended February 1, 2015 will be disclosed. This
information is set forth in Exhibits 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 February 17,
2015 |
|
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
Non-GAAP 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: February 18, 2015 |
BY |
/s/ Richelle E. Burr |
|
|
Richelle E.
Burr |
|
|
Vice
President, General Counsel |
![](photronics_8kx4x1.jpg) Press
Release |
For Further
Information: Pete Broadbent Vice President, Investor
Relations & Marketing (203) 775-9000 pbroadbent@photronics.com |
Photronics Reports First Quarter Fiscal 2015 Results
● |
Quarterly sales of $123.5 million; within guidance of $121-126
million |
● |
Non-GAAP net income of $4.7 million |
● |
Non-GAAP EPS of $0.07; at high-end of guidance of $0.02 -
$0.07 |
● |
Quarterly high-end IC sales increase 8% sequentially to $36.4
million |
● |
Non-GAAP EBITDA of $34 million |
● |
Net Cash of $29 million |
● |
Agreed to exchange $57.5 million 3.25% convertible senior notes
with 2016 maturity date for 3.25% notes with 2019 maturity
date |
BROOKFIELD, Connecticut
February 17, 2015 Photronics, Inc. (Nasdaq:PLAB), a worldwide leader in
supplying innovative imaging technology solutions for the global electronics
industry, today reported financial results for the fiscal 2015 first quarter
ended February 1, 2015.
Constantine (Deno)
Macricostas, Photronics' chairman and chief executive officer commented, Our
first quarter results reflect renewed high-end demand across our logic, memory
and flat panel customers. Our mainstream semiconductor business also held up
well in what is normally a seasonally soft environment in the first quarter due
to the holiday period.
Earnings were at the high end
of our expectations due to solid cost controls across a number of
categories. Our operating cash flow continued to be strong. Over the
past year we have successfully managed to invest in deploying high-end equipment
to support our customers while continuing to strengthen our balance sheet and
provide financial flexibility for the future, concluded Macricostas.
Sales for the first quarter of
fiscal 2015 were $123.5 million, an increase of 22% compared with $101.5 million
for the first quarter of fiscal 2014. Sales of semiconductor photomasks were
$101.5 million, or 82% of revenues, during the first quarter of fiscal 2015, and
sales of flat panel display (FPD) photomasks were $22.0 million, or 18% of
revenues.
GAAP net income attributable
to Photronics, Inc. shareholders for the first quarter of fiscal 2015 was
$3.8 million, or $0.06 per diluted share, compared with GAAP net income
attributable to Photronics, Inc. shareholders of $2.0 million, or $0.03
per diluted share, for the first quarter of fiscal 2014. Non-GAAP net income
attributable to Photronics, Inc. shareholders for the first quarter of fiscal
2015, which excludes financing expenses of $0.9 million, was $4.7 million, or
$0.07 per diluted share. Non-GAAP net income attributable to Photronics,
Inc. shareholders for the first quarter of fiscal 2014, which excludes
acquisition transaction expenses of $0.4 million, was $2.4 million, or $0.4 per
diluted share.
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:
● |
Financing expenses in the first quarter of fiscal 2015 related to
the exchange of convertible senior notes are excluded because they are not
a part of ongoing operations. |
|
|
● |
Transaction expenses in the first quarter of fiscal 2014 related to
the joint venture, PDMC, in Taiwan, 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
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.
A conference call with
investors and the media to discuss these results is scheduled for 8:30 a.m.
Eastern time on Wednesday, February 18, 2015. 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 second 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.
PHOTRONICS, INC. AND
SUBSIDIARIES
Condensed Consolidated Statements of
Income
(in thousands,
except per share amounts)
(Unaudited)
|
|
Three Months
Ended |
|
|
February 1, |
|
February 2, |
|
|
2015 |
|
2014 |
Net sales |
|
$ |
123,505 |
|
|
$ |
101,542 |
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
(95,321 |
) |
|
|
(78,660 |
) |
|
|
|
|
|
|
|
|
|
Selling, general and
administrative |
|
|
(11,944 |
) |
|
|
(12,278 |
) |
|
|
|
|
|
|
|
|
|
Research and
development |
|
|
(4,681 |
) |
|
|
(4,974 |
) |
|
|
|
|
|
|
|
|
|
Operating
income |
|
|
11,559 |
|
|
|
5,630 |
|
|
|
|
|
|
|
|
|
|
Other expense, net |
|
|
(1,283 |
) |
|
|
(873 |
) |
|
|
|
|
|
|
|
|
|
Income
before income taxes |
|
|
10,276 |
|
|
|
4,757 |
|
|
|
|
|
|
|
|
|
|
Income tax provision |
|
|
(3,134 |
) |
|
|
(2,716 |
) |
|
|
|
|
|
|
|
|
|
Net
income |
|
|
7,142 |
|
|
|
2,041 |
|
|
|
|
|
|
|
|
|
|
Net income attributable to noncontrolling
interests |
|
|
(3,305 |
) |
|
|
(48 |
) |
|
|
|
|
|
|
|
|
|
Net
income attributable to Photronics, Inc. shareholders |
|
$ |
3,837 |
|
|
$ |
1,993 |
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.06 |
|
|
$ |
0.03 |
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
0.06 |
|
|
$ |
0.03 |
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
66,066 |
|
|
|
61,200 |
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
67,020 |
|
|
|
62,136 |
|
PHOTRONICS, INC. AND
SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
|
|
February 1, |
|
November 2, |
|
|
2015 |
|
2014 |
Assets |
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
168,610 |
|
$
|
192,929 |
Accounts
receivable |
|
|
99,183 |
|
|
94,515 |
Inventories |
|
|
23,786 |
|
|
22,478 |
Other
current assets |
|
|
28,924 |
|
|
26,570 |
|
Total
current assets |
|
|
320,503 |
|
|
336,492 |
|
Property,
plant and equipment, net |
|
|
593,020 |
|
|
550,069 |
Investment
in joint venture |
|
|
93,078 |
|
|
93,122 |
Intangible
assets, net |
|
|
29,203 |
|
|
30,294 |
Other
assets |
|
|
17,073 |
|
|
19,206 |
|
|
|
$ |
1,052,877 |
|
$ |
1,029,183 |
|
Liabilities and
Equity |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Current
portion of long-term borrowings |
|
$ |
10,457 |
|
$ |
10,381 |
Accounts
payable and accrued liabilities |
|
|
166,493 |
|
|
128,736 |
|
Total
current liabilities |
|
|
176,950 |
|
|
139,117 |
|
Long-term
borrowings |
|
|
129,362 |
|
|
131,805 |
Other
liabilities |
|
|
18,520 |
|
|
18,767 |
|
Photronics,
Inc. shareholders' equity |
|
|
617,109 |
|
|
628,050 |
Noncontrolling interests |
|
|
110,936 |
|
|
111,444 |
Total
equity |
|
|
728,045 |
|
|
739,494 |
|
|
|
$ |
1,052,877 |
|
$ |
1,029,183 |
PHOTRONICS, INC. AND
SUBSIDIARIES
Condensed Consolidated Statements of Cash
Flows
(in
thousands)
(Unaudited)
|
|
Three Months
Ended |
|
|
February 1, |
|
February 2, |
|
|
2015 |
|
2014 |
Cash flows
from operating activities: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
7,142 |
|
|
$ |
2,041 |
|
Adjustments to reconcile
net income to net cash |
|
|
|
|
|
|
|
|
provided
by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
20,854 |
|
|
|
17,899 |
|
Changes
in assets and liabilities and other |
|
|
(5,696 |
) |
|
|
(5,743 |
) |
|
Net cash provided by operating
activities |
|
|
22,300 |
|
|
|
14,197 |
|
|
Cash flows
from investing activities: |
|
|
|
|
|
|
|
|
Purchases
of property, plant and equipment |
|
|
(40,371 |
) |
|
|
(12,184 |
) |
Increase
in restricted cash |
|
|
- |
|
|
|
(1,698 |
) |
Other |
|
|
43 |
|
|
|
67 |
|
|
Net cash
used in investing activities |
|
|
(40,328 |
) |
|
|
(13,815 |
) |
|
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
Repayments
of long-term borrowings |
|
|
(2,367 |
) |
|
|
(23,554 |
) |
Payment
of deferred financing fees |
|
|
- |
|
|
|
(310 |
) |
Proceeds
from share-based arrangements |
|
|
768 |
|
|
|
518 |
|
|
Net cash used in financing
activities |
|
|
(1,599 |
) |
|
|
(23,346 |
) |
|
Effect of
exchange rate changes on cash |
|
|
(4,692 |
) |
|
|
(3,423 |
) |
|
Net decrease in cash and cash
equivalents |
|
|
(24,319 |
) |
|
|
(26,387 |
) |
Cash and
cash equivalents, beginning of period |
|
|
192,929 |
|
|
|
215,615 |
|
|
Cash and cash equivalents, end of
period |
|
$ |
168,610 |
|
|
$ |
189,228 |
|
PHOTRONICS, INC. AND
SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial
Information
(in thousands,
except per share data)
(Unaudited)
|
|
Three Months
Ended |
|
|
February 1, |
|
February 2, |
|
|
2015 |
|
2014 |
Reconciliation of GAAP
to Non-GAAP Net Income |
|
|
|
|
|
|
Attributable
to Photronics, Inc. Shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
income attributable to Photronics, Inc. shareholders |
|
$ |
3,837 |
|
$ |
1,993 |
|
|
|
|
|
|
|
(a)
Financing expenses, net of tax |
|
|
901 |
|
|
- |
|
|
|
|
|
|
|
(b)
Acquisition transaction expenses, net of
tax |
|
|
- |
|
|
437 |
|
|
|
|
|
|
|
Non-GAAP net
income attributable to Photronics, Inc. shareholders |
|
$ |
4,738 |
|
$ |
2,430 |
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Net
Income |
|
|
|
|
|
|
Applicable
to Common Shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of diluted shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
|
67,020 |
|
|
62,136 |
|
|
|
|
|
|
|
Non-GAAP |
|
|
67,020 |
|
|
62,136 |
|
|
|
|
|
|
|
Net income
per diluted share |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
$ |
0.06 |
|
$ |
0.03 |
|
|
|
|
|
|
|
Non-GAAP |
|
$ |
0.07 |
|
$ |
0.04 |
(a) |
Represents financing
expenses related to the exchange of $57.5 million of 3.25% convertible
senior notes, recorded in other expense, net |
(b) |
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. |
PHOTRONICS, INC. AND
SUBSIDIARIES
Non-GAAP Financial Measure
Reconciliation of GAAP Net income to Non-GAAP EBITDA
(in
thousands)
(Unaudited)
|
|
Three Months Ended |
|
|
February
1, |
|
February
2, |
|
|
2015 |
|
2014 |
GAAP Net income (a) |
|
$ |
7,142 |
|
$ |
2,041 |
|
Add: interest expense |
|
|
1,370 |
|
|
1,984 |
Add: income tax
expense |
|
|
3,134 |
|
|
2,716 |
Add: depreciation and amortization |
|
|
20,607 |
|
|
17,422 |
Add: special items
(b) |
|
|
1,826 |
|
|
1,542 |
Non-GAAP
EBITDA |
|
$ |
34,079 |
|
$ |
25,705 |
(a) |
|
Includes net income attributable
to noncontrolling interests. |
|
(b) |
|
Special items consist of stock
compensation expense, and in 2015 finance expenses in connection with the
exchange of $57.5 million 3.25% convertible senior notes, and in 2014
transaction expenses in connection with the acquisition of DNP Photomask
Technology Taiwan, Co., Ltd., a wholly-owned subsidiary of Dai Nippon
Printing Co., Ltd. |
PHOTRONICS, INC. AND
SUBSIDIARIES
Non-GAAP Financial Measure
Reconciliation of GAAP Operating Income to
Non-GAAP Operating Income
(in thousands)
(Unaudited)
|
Three Months
Ended |
|
February 1, |
|
February 2, |
|
2015 |
|
2014 |
|
$ |
|
% |
|
$ |
|
% |
|
|
|
|
(a) |
|
|
|
|
(a) |
GAAP Operating
Income |
$ |
11,559 |
|
9.4 |
% |
|
$ |
5,630 |
|
5.6 |
% |
(b)
Acquisition transaction expenses |
|
|
|
|
|
|
|
437 |
|
0.4 |
|
Non-GAAP Operating
Income |
$
|
11,559 |
|
9.4 |
% |
|
$
|
6,067 |
|
6.0 |
% |
(a) |
|
Represents percentage
of net sales |
|
(b) |
|
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. |
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