Photronics Reports Fourth Quarter Fiscal 2018 Results
December 12 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
fourth quarter ended October 31, 2018.
Fourth quarter revenue was a record $144.7
million, improving 20% compared with the same quarter last year and
6% compared with the previous quarter. Integrated circuit (IC)
revenue was $110.9 million, up 15% compared with last year and 3%
sequentially. Flat panel display (FPD) revenue was a record $33.8
million, up 36% compared with last year and 16% sequentially.
Net income attributable to Photronics, Inc.
shareholders was $12.5 million ($0.18 per diluted share), compared
with $5.4 million ($0.08 per diluted share) for the fourth quarter
of 2017 and $13.0 million ($0.18 per diluted share) for the third
quarter of 2018. Results for the third quarter of 2018 included a
$2 million one-time tax benefit ($0.01 per diluted share).
"We achieved record revenue during the fourth
quarter, with growth in both IC and FPD, as mask demand remained
strong and we continued to benefit from our successful
repositioning of the business,” said Peter Kirlin, chief executive
officer. “Record revenue in FPD was accomplished through growth in
high-end AMOLED, strong demand in Korea and solid demand in China.
Within IC, high-end memory increased sequentially while high-end
logic decreased as our customers experienced softening demand in
their end markets. While revenue increased, margins were slightly
down due to tool relocation expenses, startup costs in China, and
shifts in product mix. We believe all of these are temporary and
margins should improve as high-end IC strengthens and our China
startup is complete. Despite lower margins, we generated strong
cash from operations and were able to defer some capex payments
into the first quarter, maintaining a high cash balance. We are
well positioned heading into 2019 to ramp our China factories and
continue with the next phase of profitable growth.”
First Quarter 2019 Guidance
For the first quarter of 2019, Photronics
expects revenue to be between $120 million and $130 million, and
net income attributable to Photronics, Inc. shareholders to be
between $0.01 and $0.07 per diluted share.
Conference Call
A conference call to discuss these results is
scheduled for 8:30 a.m. Eastern time on Wednesday, December 12,
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, political, 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 |
|
Year Ended |
|
|
October 31, |
|
July 29, |
|
October 29, |
|
October 31, |
|
October 29, |
|
|
|
2018 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
144,660 |
|
|
$ |
136,391 |
|
|
$ |
120,971 |
|
|
$ |
535,276 |
|
|
$ |
450,678 |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
goods sold |
|
|
(109,236 |
) |
|
|
(100,794 |
) |
|
|
(94,529 |
) |
|
|
(403,773 |
) |
|
|
(359,363 |
) |
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
|
35,424 |
|
|
|
35,597 |
|
|
|
26,442 |
|
|
|
131,503 |
|
|
|
91,315 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
(13,504 |
) |
|
|
(12,504 |
) |
|
|
(10,182 |
) |
|
|
(51,395 |
) |
|
|
(43,585 |
) |
|
|
|
|
|
|
|
|
|
|
|
Research
and development |
|
|
(3,906 |
) |
|
|
(2,653 |
) |
|
|
(3,838 |
) |
|
|
(14,481 |
) |
|
|
(15,862 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total Operating
Expenses |
|
|
(17,410 |
) |
|
|
(15,157 |
) |
|
|
(14,020 |
) |
|
|
(65,876 |
) |
|
|
(59,447 |
) |
|
|
|
|
|
|
|
|
|
|
|
Operating
income |
|
|
18,014 |
|
|
|
20,440 |
|
|
|
12,422 |
|
|
|
65,627 |
|
|
|
31,868 |
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net |
|
|
2,307 |
|
|
|
1,411 |
|
|
|
536 |
|
|
|
2,944 |
|
|
|
(5,303 |
) |
|
|
|
|
|
|
|
|
|
|
|
Income
before income taxes |
|
|
20,321 |
|
|
|
21,851 |
|
|
|
12,958 |
|
|
|
68,571 |
|
|
|
26,565 |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision |
|
|
(3,552 |
) |
|
|
(2,054 |
) |
|
|
(2,462 |
) |
|
|
(7,335 |
) |
|
|
(5,276 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
|
16,769 |
|
|
|
19,797 |
|
|
|
10,496 |
|
|
|
61,236 |
|
|
|
21,289 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to noncontrolling interests |
|
(4,282 |
) |
|
|
(6,792 |
) |
|
|
(5,110 |
) |
|
|
(19,181 |
) |
|
|
(8,159 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Photronics, Inc. shareholders |
$ |
12,487 |
|
|
$ |
13,005 |
|
|
$ |
5,386 |
|
|
$ |
42,055 |
|
|
$ |
13,130 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.18 |
|
|
$ |
0.19 |
|
|
$ |
0.08 |
|
|
$ |
0.61 |
|
|
$ |
0.19 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
0.18 |
|
|
$ |
0.18 |
|
|
$ |
0.08 |
|
|
$ |
0.59 |
|
|
$ |
0.19 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
67,894 |
|
|
|
69,374 |
|
|
|
68,615 |
|
|
|
68,829 |
|
|
|
68,436 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
73,921 |
|
|
|
75,258 |
|
|
|
69,218 |
|
|
|
74,821 |
|
|
|
69,288 |
|
|
|
|
|
|
|
|
|
|
|
|
|
PHOTRONICS, INC. AND SUBSIDIARIES |
Condensed Consolidated Balance
Sheets |
(in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
October 31, |
|
|
October 29, |
|
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
329,277 |
|
|
$ |
308,021 |
|
Accounts
receivable |
|
|
120,515 |
|
|
|
105,320 |
|
Inventories |
|
|
29,180 |
|
|
|
23,703 |
|
Other
current assets |
|
|
23,759 |
|
|
|
12,080 |
|
|
|
|
|
|
|
|
Total
current assets |
|
|
502,731 |
|
|
|
449,124 |
|
|
|
|
|
|
|
|
Property,
plant and equipment, net |
|
571,781 |
|
|
|
535,197 |
|
Intangible assets,
net |
|
|
12,368 |
|
|
|
17,122 |
|
Other assets |
|
|
23,129 |
|
|
|
19,351 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,110,009 |
|
|
$ |
1,020,794 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Current portion of long-term debt |
$ |
57,453 |
|
|
$ |
4,639 |
|
Accounts payable and accrued liabilities |
|
133,623 |
|
|
|
77,137 |
|
|
|
|
|
|
|
|
Total
current liabilities |
|
|
191,076 |
|
|
|
81,776 |
|
|
|
|
|
|
|
|
Long-term debt |
|
|
- |
|
|
|
57,337 |
|
Other liabilities |
|
|
14,364 |
|
|
|
16,386 |
|
|
|
|
|
|
|
|
Photronics,
Inc. shareholders' equity |
|
759,671 |
|
|
|
744,564 |
|
Noncontrolling
interests |
|
|
144,898 |
|
|
|
120,731 |
|
Total
equity |
|
|
904,569 |
|
|
|
865,295 |
|
|
|
|
|
|
|
|
Total liabilities and
equity |
|
$ |
1,110,009 |
|
|
$ |
1,020,794 |
|
|
|
PHOTRONICS,
INC.
AND
SUBSIDIARIES |
Condensed Consolidated Statements of Cash
Flows |
(in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
Year Ended |
|
|
October 31, |
|
October 29, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
Cash flows from
operating activities: |
|
|
|
|
Net
income |
|
$ |
61,236 |
|
|
$ |
21,289 |
|
Adjustments to reconcile net income to net cash provided
by operating activities: |
|
|
|
Depreciation and amortization |
|
|
84,333 |
|
|
|
86,573 |
|
Changes in operating assets, liabilities and other |
|
(15,002 |
) |
|
|
(11,029 |
) |
|
|
|
|
|
Net cash provided by
operating activities |
|
|
130,567 |
|
|
|
96,833 |
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
Purchases of property, plant and equipment |
|
(92,585 |
) |
|
|
(91,965 |
) |
Acquisition of business |
|
|
- |
|
|
|
(5,400 |
) |
Proceeds
from sale of investments |
|
|
- |
|
|
|
167 |
|
Other |
|
|
1,856 |
|
|
|
(868 |
) |
|
|
|
|
|
Net cash used in
investing activities |
|
|
(90,729 |
) |
|
|
(98,066 |
) |
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
Repayments of long-term debt |
|
|
(4,639 |
) |
|
|
(5,428 |
) |
Dividends paid to noncontrolling interests |
|
(8,166 |
) |
|
|
(8,298 |
) |
Purchase
of treasury stock |
|
|
(23,111 |
) |
|
|
- |
|
Contribution from noncontrolling interest |
|
17,996 |
|
|
|
- |
|
Proceeds from share-based arrangements |
|
4,634 |
|
|
|
2,830 |
|
Other |
|
|
(519 |
) |
|
|
(32 |
) |
|
|
|
|
|
Net cash used in
financing activities |
|
|
(13,805 |
) |
|
|
(10,928 |
) |
|
|
|
|
|
Effect of exchange rate
changes on cash |
|
|
(4,777 |
) |
|
|
6,108 |
|
|
|
|
|
|
Net
increase (decrease) in cash and cash equivalents |
|
21,256 |
|
|
|
(6,053 |
) |
Cash and
cash equivalents, beginning of period |
|
308,021 |
|
|
|
314,074 |
|
|
|
|
|
|
Cash and cash
equivalents, end of period |
|
$ |
329,277 |
|
|
$ |
308,021 |
|
|
|
|
|
|
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