Photronics Reports Third Quarter Fiscal 2018 Results
August 22 2018 - 6:00AM
Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in supplying
innovative imaging technology solutions for the global electronics
industry, today reported financial results for its fiscal 2018
third quarter ended July 29, 2018.
Third quarter revenue was $136.4 million,
improving 22% compared with the same quarter last year and 4%
compared with the previous quarter. Integrated circuit (IC) revenue
was $107.2 million, up 26% compared with last year and 5%
sequentially. Flat panel display (FPD) revenue was $29.1 million,
up 10% compared with last year and 2% sequentially.
Net income attributable to Photronics, Inc.
shareholders was $13.0 million ($0.18 per diluted share), compared
with $4.0 million ($0.06 per diluted share) for the third quarter
of 2017 and $10.7 million ($0.15 per diluted share) for the second
quarter of 2018. Results for the third quarter of 2018 includes a
$2 million one-time tax benefit ($0.01 per diluted share).
"During the third quarter, demand remained
strong across nearly all our end markets, and we benefitted from
successfully repositioning the business to take advantage of
growing markets in China and demand from captives,” said Peter
Kirlin, chief executive officer. “High-end IC once again was the
primary contributor to growth, nearly doubling compared with last
year, up 94%. For FPD, sales of both AMOLED and LTPS LCD photomasks
increased, primarily for mobile applications. With the increase in
revenue, we expanded margins through operating leverage and cost
control, delivering 15% operating margin. In addition to strong
revenue and income growth, our cash balance increased to $333
million, demonstrating once again our ability to generate strong
cash from operations. Our balance sheet is very healthy as we
approach the peak of our China investment over the next two
quarters, and we have begun to return cash to our shareholders
through the initiation of a share repurchase program last quarter.
We have increased our momentum heading into the end of fiscal 2018,
and are now in an even stronger position to ramp our China
facilities in 2019.”
Fourth Quarter 2018
Guidance
For the fourth quarter of 2018, Photronics
expects revenue to be between $133 million and $141 million, and
net income attributable to Photronics, Inc. shareholders to be
between $0.14 and $0.19 per diluted share.
Conference Call
A conference call to discuss these results is
scheduled for 8:30 a.m. Eastern time on Wednesday, August 22, 2018.
The call can be accessed by logging onto Photronics' web site at
www.photronics.com. The live dial-in number is (877) 377-7095
or (408) 774-4601 outside of the United States and Canada. The call
will be archived on Photronics’ web site for instant replay
access.
About Photronics
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 display 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 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”, and
similar expressions. 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.
For Further Information:R. Troy
Dewar, CFADirector, Investor Relations(203)
740-5610tdewar@photronics.com
|
PHOTRONICS, INC. AND
SUBSIDIARIES |
Condensed Consolidated Statements of
Income |
(in thousands, except per share amounts) |
(Unaudited) |
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
July 29, |
|
April 29, |
|
July 30, |
|
July 29, |
|
July 30, |
|
2018 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
136,391 |
|
|
$ |
130,779 |
|
|
$ |
111,579 |
|
|
$ |
390,616 |
|
|
$ |
329,707 |
|
|
|
|
|
|
|
|
|
|
|
Cost of
goods sold |
|
(100,794 |
) |
|
|
(97,960 |
) |
|
|
(89,862 |
) |
|
|
(294,538 |
) |
|
|
(264,835 |
) |
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
35,597 |
|
|
|
32,819 |
|
|
|
21,717 |
|
|
|
96,078 |
|
|
|
64,872 |
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative |
|
(12,504 |
) |
|
|
(13,637 |
) |
|
|
(11,639 |
) |
|
|
(37,891 |
) |
|
|
(33,403 |
) |
|
|
|
|
|
|
|
|
|
|
Research
and development |
|
(2,653 |
) |
|
|
(3,817 |
) |
|
|
(4,812 |
) |
|
|
(10,574 |
) |
|
|
(12,023 |
) |
|
|
|
|
|
|
|
|
|
|
Total Operating
Expenses |
|
(15,157 |
) |
|
|
(17,454 |
) |
|
|
(16,451 |
) |
|
|
(48,465 |
) |
|
|
(45,426 |
) |
|
|
|
|
|
|
|
|
|
|
Operating
income |
|
20,440 |
|
|
|
15,365 |
|
|
|
5,266 |
|
|
|
47,613 |
|
|
|
19,446 |
|
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net |
|
1,411 |
|
|
|
3,332 |
|
|
|
(134 |
) |
|
|
637 |
|
|
|
(5,839 |
) |
|
|
|
|
|
|
|
|
|
|
Income
before income taxes |
|
21,851 |
|
|
|
18,697 |
|
|
|
5,132 |
|
|
|
48,250 |
|
|
|
13,607 |
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision |
|
(2,054 |
) |
|
|
(3,508 |
) |
|
|
(333 |
) |
|
|
(3,783 |
) |
|
|
(2,814 |
) |
|
|
|
|
|
|
|
|
|
|
Net
income |
|
19,797 |
|
|
|
15,189 |
|
|
|
4,799 |
|
|
|
44,467 |
|
|
|
10,793 |
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to noncontrolling interests |
|
(6,792 |
) |
|
|
(4,524 |
) |
|
|
(798 |
) |
|
|
(14,899 |
) |
|
|
(3,048 |
) |
|
|
|
|
|
|
|
|
|
|
Net income attributable
to Photronics, Inc. shareholders |
$ |
13,005 |
|
|
$ |
10,665 |
|
|
$ |
4,001 |
|
|
$ |
29,568 |
|
|
$ |
7,745 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.19 |
|
|
$ |
0.15 |
|
|
$ |
0.06 |
|
|
$ |
0.43 |
|
|
$ |
0.11 |
|
|
|
|
|
|
|
|
|
|
|
Diluted |
$ |
0.18 |
|
|
$ |
0.15 |
|
|
$ |
0.06 |
|
|
$ |
0.41 |
|
|
$ |
0.11 |
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number
of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
69,374 |
|
|
|
69,293 |
|
|
|
68,525 |
|
|
|
69,141 |
|
|
|
68,376 |
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
75,258 |
|
|
|
75,190 |
|
|
|
69,380 |
|
|
|
75,121 |
|
|
|
69,311 |
|
|
|
|
|
|
|
|
|
|
|
|
|
PHOTRONICS, INC. AND
SUBSIDIARIES |
|
Condensed Consolidated Balance
Sheets |
|
(in thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 29, |
|
October 29, |
|
|
|
|
|
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
332,739 |
|
$ |
308,021 |
|
|
Accounts receivable |
|
|
118,727 |
|
|
105,320 |
|
|
Inventories |
|
|
|
31,756 |
|
|
23,703 |
|
|
Other current assets |
|
|
21,698 |
|
|
12,080 |
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
504,920 |
|
|
449,124 |
|
|
|
|
|
|
|
|
|
|
|
Property,
plant and equipment, net |
|
546,688 |
|
|
535,197 |
|
|
Intangible
assets, net |
|
|
13,507 |
|
|
17,122 |
|
|
Other
assets |
|
|
|
22,897 |
|
|
19,351 |
|
|
|
|
|
|
|
|
|
|
|
Total
assets |
|
|
$ |
1,088,012 |
|
$ |
1,020,794 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
Current portion of long-term borrowings |
$ |
57,893 |
|
$ |
4,639 |
|
|
Accounts payable and accrued liabilities |
|
100,949 |
|
|
77,137 |
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
158,842 |
|
|
81,776 |
|
|
|
|
|
|
|
|
|
|
|
Long-term
borrowings |
|
|
- |
|
|
57,337 |
|
|
Other
liabilities |
|
|
|
15,657 |
|
|
16,386 |
|
|
|
|
|
|
|
|
|
|
|
Photronics,
Inc. shareholders' equity |
|
770,810 |
|
|
744,564 |
|
|
Noncontrolling interests |
|
|
142,703 |
|
|
120,731 |
|
|
Total equity |
|
|
|
913,513 |
|
|
865,295 |
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and equity |
|
$ |
1,088,012 |
|
$ |
1,020,794 |
|
|
|
|
|
|
|
|
|
|
|
|
|
PHOTRONICS,
INC.
AND
SUBSIDIARIES |
|
Condensed Consolidated Statements of Cash
Flows |
|
(in thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
|
|
|
July 29, |
|
July 30, |
|
|
|
|
|
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
Cash flows
from operating activities: |
|
|
|
|
|
Net income |
|
|
|
$ |
44,467 |
|
|
$ |
10,793 |
|
|
Adjustments to reconcile net income to net cash |
|
|
|
|
provided by operating activities: |
|
|
|
|
|
Depreciation and amortization |
|
|
64,485 |
|
|
|
64,081 |
|
|
Changes in operating assets, liabilities and other |
|
(21,995 |
) |
|
|
(1,085 |
) |
|
|
|
|
|
|
|
|
|
|
Net cash
provided by operating activities |
|
|
86,957 |
|
|
|
73,789 |
|
|
|
|
|
|
|
|
|
|
|
Cash flows
from investing activities: |
|
|
|
|
|
Purchases of property, plant and equipment |
|
(64,372 |
) |
|
|
(38,759 |
) |
|
Acquisition of business |
|
|
|
- |
|
|
|
(5,400 |
) |
|
Proceeds from sale of investments |
|
|
- |
|
|
|
167 |
|
|
Other |
|
|
|
|
|
453 |
|
|
|
(458 |
) |
|
|
|
|
|
|
|
|
|
|
Net cash
used in investing activities |
|
|
(63,919 |
) |
|
|
(44,450 |
) |
|
|
|
|
|
|
|
|
|
|
Cash flows
from financing activities: |
|
|
|
|
|
Repayments of long-term borrowings |
|
|
(4,170 |
) |
|
|
(4,057 |
) |
|
Dividends paid to noncontrolling interests |
|
(8,166 |
) |
|
|
(8,298 |
) |
|
Purchase of treasury stock |
|
|
|
(6,787 |
) |
|
|
- |
|
|
Contribution from noncontrolling interest |
|
17,996 |
|
|
|
- |
|
|
Proceeds from share-based arrangements |
|
4,028 |
|
|
|
2,529 |
|
|
Other |
|
|
|
|
|
(273 |
) |
|
|
(33 |
) |
|
|
|
|
|
|
|
|
|
|
Net cash
provided by (used in) financing activities |
|
2,628 |
|
|
|
(9,859 |
) |
|
|
|
|
|
|
|
|
|
|
Effect of
exchange rate changes on cash |
|
|
(948 |
) |
|
|
7,018 |
|
|
|
|
|
|
|
|
|
|
|
Net
increase in cash and cash equivalents |
|
|
24,718 |
|
|
|
26,498 |
|
|
Cash and
cash equivalents, beginning of period |
|
308,021 |
|
|
|
314,074 |
|
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents, end of period |
|
$ |
332,739 |
|
|
$ |
340,572 |
|
|
|
|
|
|
|
|
|
|
|
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