Photronics Reports Third Quarter Fiscal 2019 Results
August 20 2019 - 6:00AM
Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in photomask
technologies and solutions, today reported financial results for
its fiscal 2019 third quarter ended July 28, 2019.
Financial Results Summary |
$ Millions, except per share data |
Q319 |
Q219 |
Q318 |
Q/Q |
Y/Y |
Revenue |
138.1 |
131.6 |
136.4 |
5% |
1% |
Integrated circuit (IC) revenue |
100.2 |
98.6 |
107.2 |
2% |
(7%) |
Flat panel display (FPD) revenue |
37.9 |
33.0 |
29.1 |
15% |
30% |
Net income attributable to Photronics, Inc. shareholders |
6.3 |
8.5 |
13.0 |
(25%) |
(51%) |
Diluted earnings per share |
0.10 |
0.13 |
0.18 |
(0.03) |
(0.08) |
"We performed well during the third quarter of
2019, achieving record FPD revenue and delivering our eighth
consecutive quarter of year-over-year revenue growth,” said Peter
Kirlin, chief executive officer. “FPD revenue growth was driven by
continued strength in AMOLED display for mobile applications and
ramping shipments from our new China facility. IC revenue grew
sequentially due to improved demand from Asian foundries for
mainstream nodes. Gross and operating margins improved sequentially
as we were able to control costs despite China startup activity.
Our cash balance grew during the quarter, demonstrating our ability
to generate cash as we continue to invest in China. We are on pace
to have an outstanding year in 2019 and positioned to perform even
better in 2020 and beyond.”
Fourth Quarter 2019
Guidance
For the fourth quarter of 2019, Photronics
expects revenue to be between $143 million and $151 million, and
net income attributable to Photronics, Inc. shareholders to be
between $0.11 and $0.17 per diluted share.
Conference Call
A conference call to discuss these results is
scheduled for 8:30 a.m. Eastern time on Tuesday, August 20, 2019.
The call can be accessed by logging onto Photronics' website 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’ website for instant replay
access.
About Photronics
Photronics is a leading worldwide manufacturer
of integrated circuit (IC) and flat panel display (FPD) photomasks.
High precision quartz plates that contain microscopic images of
electronic circuits, photomasks are a key element in the IC and FPD
manufacturing process. Founded in 1969, Photronics has been a
trusted photomask supplier for 50 years. As of October 31, 2018,
the company had 1,575 employees across 11 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 the company and its subsidiaries. The
forward-looking statements contained in this press release 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. There is no assurance that the
company’s expectations will be realized. For additional information
please see the company’s quarterly and annual reports filed with
the Securities and Exchange Commission. The company assumes no
obligation to provide revisions to any forward-looking
statements.
For Further Information:R. Troy
Dewar, CFAVice President, Investor Relations(203)
740-5610tdewar@photronics.com
|
PHOTRONICS, INC. |
Condensed Consolidated Statements of Income |
(in thousands, except per share amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
July 28, |
|
April 28, |
|
July 29, |
|
July 28, |
|
July 29, |
|
|
2019 |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
138,112 |
|
|
$ |
131,580 |
|
$ |
136,391 |
|
$ |
394,404 |
|
$ |
390,616 |
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
107,542 |
|
|
|
105,570 |
|
|
100,794 |
|
|
311,721 |
|
|
294,538 |
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
30,570 |
|
|
|
26,010 |
|
|
35,597 |
|
|
82,683 |
|
|
96,078 |
|
|
|
|
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative |
|
13,124 |
|
|
|
13,269 |
|
|
12,504 |
|
|
40,186 |
|
|
37,891 |
|
|
|
|
|
|
|
|
|
|
Research and
development |
|
4,046 |
|
|
|
3,542 |
|
|
2,653 |
|
|
11,852 |
|
|
10,574 |
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses |
|
17,170 |
|
|
|
16,811 |
|
|
15,157 |
|
|
52,038 |
|
|
48,465 |
|
|
|
|
|
|
|
|
|
|
Operating
income |
|
13,400 |
|
|
|
9,199 |
|
|
20,440 |
|
|
30,645 |
|
|
47,613 |
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net |
|
(348 |
) |
|
|
3,931 |
|
|
1,411 |
|
|
4,692 |
|
|
637 |
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
13,052 |
|
|
|
13,130 |
|
|
21,851 |
|
|
35,337 |
|
|
48,250 |
|
|
|
|
|
|
|
|
|
|
Income tax provision |
|
3,218 |
|
|
|
3,278 |
|
|
2,054 |
|
|
7,883 |
|
|
3,783 |
|
|
|
|
|
|
|
|
|
|
Net income |
|
9,834 |
|
|
|
9,852 |
|
|
19,797 |
|
|
27,454 |
|
|
44,467 |
|
|
|
|
|
|
|
|
|
|
Net income attributable to
noncontrolling interests |
|
3,487 |
|
|
|
1,373 |
|
|
6,792 |
|
|
7,361 |
|
|
14,899 |
|
|
|
|
|
|
|
|
|
|
Net income attributable to
Photronics, Inc. shareholders |
$ |
6,347 |
|
|
$ |
8,479 |
|
$ |
13,005 |
|
$ |
20,093 |
|
$ |
29,568 |
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.10 |
|
|
$ |
0.13 |
|
$ |
0.19 |
|
$ |
0.30 |
|
$ |
0.43 |
|
|
|
|
|
|
|
|
|
|
Diluted |
$ |
0.10 |
|
|
$ |
0.13 |
|
$ |
0.18 |
|
$ |
0.30 |
|
$ |
0.41 |
|
|
|
|
|
|
|
|
|
|
Weighted-average number of
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
66,313 |
|
|
|
66,261 |
|
|
69,374 |
|
|
66,386 |
|
|
69,141 |
|
|
|
|
|
|
|
|
|
|
Diluted |
|
66,570 |
|
|
|
70,597 |
|
|
75,258 |
|
|
69,919 |
|
|
75,121 |
|
|
|
|
|
|
|
|
|
|
PHOTRONICS, INC. |
|
Condensed Consolidated Balance Sheets |
|
(in thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
July 28, |
|
October 31, |
|
|
2019 |
|
2018 |
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash
equivalents |
$ |
197,243 |
|
$ |
329,277 |
|
Accounts
receivable |
|
134,369 |
|
|
120,515 |
|
Inventories |
|
39,982 |
|
|
29,180 |
|
Other current
assets |
|
48,873 |
|
|
23,759 |
|
|
|
|
|
|
Total
current assets |
|
420,467 |
|
|
502,731 |
|
|
|
|
|
|
Property, plant and equipment,
net |
|
636,743 |
|
|
571,781 |
|
Intangible assets, net |
|
9,013 |
|
|
12,368 |
|
Other assets |
|
47,972 |
|
|
23,129 |
|
|
|
|
|
|
Total assets |
$ |
1,114,195 |
|
$ |
1,110,009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
Debt |
$ |
6,100 |
|
$ |
57,453 |
|
Accounts payable and
accrued liabilities |
|
153,174 |
|
|
133,623 |
|
|
|
|
|
|
Total
current liabilities |
|
159,274 |
|
|
191,076 |
|
|
|
|
|
|
Long-term debt |
|
43,015 |
|
|
- |
|
Other liabilities |
|
11,568 |
|
|
14,364 |
|
|
|
|
|
|
Photronics, Inc. shareholders'
equity |
|
763,394 |
|
|
759,671 |
|
Noncontrolling interests |
|
136,944 |
|
|
144,898 |
|
Total
equity |
|
900,338 |
|
|
904,569 |
|
|
|
|
|
|
Total liabilities and
equity |
$ |
1,114,195 |
|
$ |
1,110,009 |
|
|
|
|
|
|
PHOTRONICS,
INC. |
|
Condensed Consolidated Statements of Cash
Flows |
|
(in thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
|
|
|
July 28, |
|
July 29, |
|
|
|
|
|
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities: |
|
|
|
|
|
Net
income |
|
|
|
$ |
27,454 |
|
|
$ |
44,467 |
|
|
Adjustments
to reconcile net income to net cash |
|
|
|
|
provided by
operating activities: |
|
|
|
|
|
Depreciation and amortization |
|
|
60,387 |
|
|
|
64,485 |
|
|
Changes in operating assets, liabilities and other |
|
(64,337 |
) |
|
|
(21,995 |
) |
|
|
|
|
|
|
|
|
|
|
Net cash provided
by operating activities |
|
|
23,504 |
|
|
|
86,957 |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
Purchases
of property, plant and equipment |
|
(160,149 |
) |
|
|
(64,372 |
) |
|
Government
incentive |
|
|
|
17,694 |
|
|
|
- |
|
|
Other |
|
|
|
|
|
(24 |
) |
|
|
313 |
|
* |
|
|
|
|
|
|
|
|
|
Net cash used in
investing activities |
|
|
(142,479 |
) |
|
|
(64,059 |
) |
* |
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
Proceeds
from debt |
|
|
|
53,227 |
|
|
|
- |
|
|
Contribution from noncontrolling interest |
|
29,394 |
|
|
|
17,997 |
|
|
Repayments
of debt |
|
|
|
(61,319 |
) |
|
|
(4,170 |
) |
|
Dividends
paid to noncontrolling interests |
|
(26,102 |
) |
|
|
(8,166 |
) |
|
Purchase of
treasury stock |
|
|
|
(10,696 |
) |
|
|
(6,787 |
) |
|
Proceeds
from share-based arrangements |
|
1,314 |
|
|
|
4,028 |
|
|
Other |
|
|
|
|
|
(92 |
) |
|
|
(274 |
) |
|
|
|
|
|
|
|
|
|
|
Net cash (used in)
provided by financing activities |
|
(14,274 |
) |
|
|
2,628 |
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash, cash equivalents, and restricted
cash |
|
1,206 |
|
|
|
(975 |
) |
* |
|
|
|
|
|
|
|
|
|
Net (decrease)
increase in cash, cash equivalents, and restricted cash |
|
(132,043 |
) |
|
|
24,551 |
|
* |
Cash, cash
equivalents, and restricted cash, beginning of period |
|
331,989 |
|
* |
|
310,936 |
|
* |
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents, and restricted cash, end of period |
$ |
199,946 |
|
|
$ |
335,487 |
|
* |
|
|
|
|
|
|
|
|
|
* Amount has been
modified to reflect the adoption of ASU 2016-18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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