Photronics Reports First Quarter Fiscal 2020 Results
March 04 2020 - 6:00AM
Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in photomask
technologies and solutions, today reported financial results for
its fiscal 2020 first quarter ended February 2, 2020.
First quarter revenue was a record $159.7
million, 2% better than the previous quarter and 28% better than
the same quarter last year. Integrated circuit (IC) revenue was
$107.0 million, down 5% sequentially and up 13% compared with the
first quarter of last year. Flat panel display (FPD) revenue of
$52.8 million was also a record, up 21% compared with last quarter
and 77% compared with the same period last year.
Net income attributable to Photronics, Inc.
shareholders was $10.3 million ($0.16 per diluted share), compared
with $9.7 million ($0.15 per diluted share) for the fourth quarter
of 2019 and $5.3 million ($0.08 per diluted share) for the first
quarter of 2019.
"We continued to perform well in the first
quarter, achieving record revenues for the second consecutive
quarter, as design activity remained high and we were able to
extend our FPD leadership by bringing more capacity to the market,”
said Peter Kirlin, chief executive officer. “IC revenues were up
year-over-year, but down sequentially due to seasonal softness. An
uptick in operating expenses associated with ramping our two new
facilities drove operating margins below fourth quarter levels.
Below the operating line, a foreign exchange gain and other
one-time effects resulted in earnings of $0.16 per share. We
generated $30.8 million cash flow from operating activities,
resulting in a cash position of $218.3 million. Despite potential
short-term impact that may result from the coronavirus, we are
optimistic that our long-term goals for 2020 are still on track. We
continue to develop investment plans to drive further profitable
growth across our operations.”
Second Quarter 2020
Guidance
For the second quarter of 2020, Photronics
expects revenue to be between $145 million and $155 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 Wednesday, March 4, 2020.
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.
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, 2019,
the company had 1,775 employees. The company has 11 strategically
located manufacturing facilities in Asia, Europe, and North
America. Additional information on the company can be accessed at
www.photronics.com.
Forward-Looking Statements
Certain statements in this press release
constitute “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. 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. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of Photronics to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Statements preceded by, followed by or that otherwise
include the words “believes,” “expects,” “anticipates,” “intends,”
“projects,” “estimates,” “plans,” “may increase,” “may fluctuate,”
“will,” “should,” “would,” “may” and “could” or similar words or
expressions are generally forward-looking in nature and not
historical facts. Any statements that refer to outlook,
expectations or other characterizations of future events,
circumstances or results, including all statements related to the
operation or effects of the Section 382 Rights Plan and to the use
of NOLs to offset future taxable income, are also forward-looking
statements. Important risks, assumptions and other important
factors that could cause future results to differ materially from
those expressed in the forward-looking statements are specified in
Photronics’ Annual and Quarterly filings with the Securities
Exchange Commission under headings such as “Forward-Looking
Statements”, “Risk Factors” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and in
other filings and furnishings made by Photronics with the
Securities and Exchange Commission from time to time. 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. Photronics
undertakes no obligation to release publicly any revisions to any
forward-looking statements, to report events or to report the
occurrence of unanticipated events. There is no assurance that
Photronics’ expectations will be realized.
PHOTRONICS,
INC. |
|
Condensed
Consolidated Statements of Income |
|
(in thousands,
except per share amounts) |
|
(Unaudited) |
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
February
2, |
|
October
31, |
|
January
27, |
|
|
|
|
|
|
2020 |
|
|
2019 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
$ |
159,736 |
|
$ |
156,257 |
|
|
$ |
124,712 |
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
|
125,134 |
|
|
118,098 |
|
|
|
98,610 |
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
|
|
34,602 |
|
|
38,159 |
|
|
|
26,102 |
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
14,219 |
|
|
12,140 |
|
|
|
13,792 |
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
4,080 |
|
|
4,543 |
|
|
|
4,263 |
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses |
|
|
18,299 |
|
|
16,683 |
|
|
|
18,055 |
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
|
16,303 |
|
|
21,476 |
|
|
|
8,047 |
|
|
|
|
|
|
|
|
|
|
|
Other income (expense), net |
|
|
3,697 |
|
|
(6,111 |
) |
|
|
1,108 |
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
20,000 |
|
|
15,365 |
|
|
|
9,155 |
|
|
|
|
|
|
|
|
|
|
|
Income tax provision |
|
|
|
9,072 |
|
|
2,327 |
|
|
|
1,387 |
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
10,928 |
|
|
13,038 |
|
|
|
7,768 |
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to noncontrolling interests |
|
628 |
|
|
3,338 |
|
|
|
2,501 |
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Photronics, Inc. shareholders |
$ |
10,300 |
|
$ |
9,700 |
|
|
$ |
5,267 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
$ |
0.16 |
|
$ |
0.15 |
|
|
$ |
0.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
|
$ |
0.16 |
|
$ |
0.15 |
|
|
$ |
0.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
65,554 |
|
|
66,230 |
|
|
|
66,583 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
|
|
66,449 |
|
|
66,862 |
|
|
|
67,047 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PHOTRONICS,
INC. |
|
Condensed
Consolidated Balance Sheets |
|
(in thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
February
2, |
|
October
31, |
|
|
|
|
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
218,309 |
|
$ |
206,530 |
|
Accounts receivable |
|
|
141,720 |
|
|
134,454 |
|
Inventories |
|
|
|
49,673 |
|
|
48,155 |
|
Other current assets |
|
|
31,202 |
|
|
38,388 |
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
440,904 |
|
|
427,527 |
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
619,935 |
|
|
632,441 |
|
Intangible assets, net |
|
|
6,847 |
|
|
7,870 |
|
Other assets |
|
|
|
57,774 |
|
|
50,827 |
|
|
|
|
|
|
|
|
|
Total assets |
|
|
$ |
1,125,460 |
|
$ |
1,118,665 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Debt |
|
|
|
$ |
17,934 |
|
$ |
10,873 |
|
Accounts payable and accrued liabilities |
|
139,720 |
|
|
141,081 |
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
157,654 |
|
|
151,954 |
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
|
36,449 |
|
|
41,887 |
|
Other liabilities |
|
|
|
18,556 |
|
|
13,732 |
|
|
|
|
|
|
|
|
|
Photronics, Inc. shareholders' equity |
|
770,676 |
|
|
769,892 |
|
Noncontrolling interests |
|
|
142,125 |
|
|
141,200 |
|
Total equity |
|
|
|
912,801 |
|
|
911,092 |
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
1,125,460 |
|
$ |
1,118,665 |
|
|
|
|
|
|
|
|
|
PHOTRONICS,
INC. |
|
Condensed
Consolidated Statements of Cash Flows |
|
(in thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
February 2, |
|
January 27, |
|
|
|
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
|
Net income |
|
|
|
$ |
10,928 |
|
|
$ |
7,768 |
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
Depreciation and amortization |
|
|
24,626 |
|
|
|
18,781 |
|
|
Share-based compensation |
|
|
1,356 |
|
|
|
1,062 |
|
|
Changes in operating assets, liabilities and other |
|
(6,125 |
) |
|
|
(46,897 |
) |
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities |
|
30,785 |
|
|
|
(19,286 |
) |
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
Purchases of property, plant and equipment |
|
(13,807 |
) |
|
|
(106,925 |
) |
|
Government incentive |
|
|
|
2,417 |
|
|
|
5,029 |
|
|
Other |
|
|
|
|
|
(139 |
) |
|
|
19 |
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(11,529 |
) |
|
|
(101,877 |
) |
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
Proceeds from long-term debt |
|
|
1,140 |
|
|
|
28,180 |
|
|
Purchase of treasury stock |
|
|
(11,000 |
) |
|
|
(10,696 |
) |
|
Repayments of long-term debt |
|
|
(389 |
) |
|
|
- |
|
|
Proceeds from share-based arrangements |
|
2,886 |
|
|
|
650 |
|
|
Contribution from noncontrolling interest |
|
- |
|
|
|
29,394 |
|
|
Dividends paid to noncontrolling interests |
|
- |
|
|
|
(26,102 |
) |
|
Other |
|
|
|
|
|
(248 |
) |
|
|
(45 |
) |
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by financing activities |
|
(7,611 |
) |
|
|
21,381 |
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash, cash equivalents, and
restricted cash |
|
149 |
|
|
|
2,961 |
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash, cash equivalents, and restricted
cash |
|
11,794 |
|
|
|
(96,821 |
) |
|
Cash, cash equivalents, and restricted cash, beginning of
period |
|
209,291 |
|
|
|
331,989 |
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents, and restricted cash, end of period |
$ |
221,085 |
|
|
$ |
235,168 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For Further Information:R. Troy
Dewar, CFAVice President, Investor Relations(203)
740-5610tdewar@photronics.com
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