Photronics Reports Second Quarter Fiscal 2020 Results
May 27 2020 - 6:00AM
Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in photomask
technologies and solutions, today reported financial results for
its fiscal 2020 second quarter ended May 3, 2020.
Second quarter revenue was $142.8 million, 11%
lower than the previous quarter and 9% better than the same quarter
last year. Integrated circuit (IC) revenue was $96.8 million, down
9% sequentially and down 2% compared with the second quarter of
last year. Flat panel display (FPD) revenue was $45.9 million, down
13% compared with last quarter and up 39% compared with the same
period last year.
Net income attributable to Photronics, Inc.
shareholders was $6.3 million ($0.10 per diluted share), compared
with $10.3 million ($0.16 per diluted share) for the first quarter
of 2020 and $8.5 million ($0.13 per diluted share) for the second
quarter of 2019.
"Our entire organization performed well, working
hard to meet customer needs during an unprecedented period
characterized by supply chain challenges and growing uncertainty,”
said Peter Kirlin, chief executive officer. “Our business was soft
in China, due primarily to shelter-in-place directives that caused
some customers to push out orders, particularly for IC foundries
and high-end display panel production. As we ended the quarter,
most of these directives were lifted and demand began
strengthening. Our low-cost focus and strong balance sheet are
helping us to navigate the uncertainty. We remain focused on
compelling long-term growth opportunities and are committed to
investing to expand market share and maintain technology
leadership, primarily in mobile display applications, which we
anticipate will continue to grow.”
Third Quarter 2020 Guidance
For the third 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, May 27, 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 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 and 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, the current pandemic and future recurrences and other
developments with respect thereto, governmental responses to the
pandemic and related matters, changes in end markets resulting
therefrom, changes in investment, tax, trade, exchange and other
laws and regulations, as well as economic, competitive, legal,
governmental, political, monetary and fiscal policy, and
technological factors and 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 or, except as required
to be disclosed in filings or furnishings with the Securities and
Exchange Commission, 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 |
|
Six Months Ended |
|
May 3, |
|
February 2, |
|
April 28, |
|
May 3, |
|
April 28, |
|
2020 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
142,774 |
|
|
$ |
159,736 |
|
|
$ |
131,580 |
|
|
$ |
302,510 |
|
|
$ |
256,291 |
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
112,341 |
|
|
|
125,134 |
|
|
|
105,570 |
|
|
|
237,475 |
|
|
|
204,179 |
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
30,433 |
|
|
|
34,602 |
|
|
|
26,010 |
|
|
|
65,035 |
|
|
|
52,112 |
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
13,267 |
|
|
|
14,219 |
|
|
|
13,269 |
|
|
|
27,486 |
|
|
|
27,061 |
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
4,462 |
|
|
|
4,080 |
|
|
|
3,542 |
|
|
|
8,541 |
|
|
|
7,805 |
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses |
|
17,729 |
|
|
|
18,299 |
|
|
|
16,811 |
|
|
|
36,027 |
|
|
|
34,866 |
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
12,704 |
|
|
|
16,303 |
|
|
|
9,199 |
|
|
|
29,008 |
|
|
|
17,246 |
|
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net |
|
(951 |
) |
|
|
3,697 |
|
|
|
3,931 |
|
|
|
2,745 |
|
|
|
5,039 |
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
11,753 |
|
|
|
20,000 |
|
|
|
13,130 |
|
|
|
31,753 |
|
|
|
22,285 |
|
|
|
|
|
|
|
|
|
|
|
Income tax provision |
|
3,781 |
|
|
|
9,072 |
|
|
|
3,278 |
|
|
|
12,853 |
|
|
|
4,665 |
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
7,972 |
|
|
|
10,928 |
|
|
|
9,852 |
|
|
|
18,900 |
|
|
|
17,620 |
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to
noncontrolling interests |
|
1,688 |
|
|
|
628 |
|
|
|
1,373 |
|
|
|
2,316 |
|
|
|
3,874 |
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to
Photronics, Inc. shareholders |
$ |
6,284 |
|
|
$ |
10,300 |
|
|
$ |
8,479 |
|
|
$ |
16,584 |
|
|
$ |
13,746 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.10 |
|
|
$ |
0.16 |
|
|
$ |
0.13 |
|
|
$ |
0.25 |
|
|
$ |
0.21 |
|
|
|
|
|
|
|
|
|
|
|
Diluted |
$ |
0.10 |
|
|
$ |
0.16 |
|
|
$ |
0.13 |
|
|
$ |
0.25 |
|
|
$ |
0.20 |
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
64,937 |
|
|
|
65,554 |
|
|
|
66,261 |
|
|
|
65,246 |
|
|
|
66,422 |
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
65,417 |
|
|
|
66,449 |
|
|
|
70,597 |
|
|
|
65,933 |
|
|
|
71,593 |
|
PHOTRONICS, INC. |
Condensed Consolidated Balance Sheets |
(in thousands) |
(Unaudited) |
|
|
|
|
|
|
May 3, |
|
October 31, |
|
2020 |
|
2019 |
|
|
|
|
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
237,790 |
|
$ |
206,530 |
Accounts receivable |
|
135,035 |
|
|
134,454 |
Inventories |
|
56,968 |
|
|
48,155 |
Other current assets |
|
42,478 |
|
|
38,388 |
|
|
|
|
Total current assets |
|
472,271 |
|
|
427,527 |
|
|
|
|
Property, plant and equipment,
net |
|
604,545 |
|
|
632,441 |
Intangible assets, net |
|
5,690 |
|
|
7,870 |
Other assets |
|
51,382 |
|
|
50,827 |
|
|
|
|
Total assets |
$ |
1,133,888 |
|
$ |
1,118,665 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
Debt |
$ |
17,671 |
|
$ |
10,873 |
Accounts payable and accrued liabilities |
|
135,701 |
|
|
141,081 |
|
|
|
|
Total current liabilities |
|
153,372 |
|
|
151,954 |
|
|
|
|
Long-term debt |
|
35,783 |
|
|
41,887 |
Other liabilities |
|
23,075 |
|
|
13,732 |
|
|
|
|
Photronics, Inc. shareholders'
equity |
|
769,191 |
|
|
769,892 |
Noncontrolling interests |
|
152,467 |
|
|
141,200 |
Total equity |
|
921,658 |
|
|
911,092 |
|
|
|
|
Total liabilities and
equity |
$ |
1,133,888 |
|
$ |
1,118,665 |
PHOTRONICS, INC. |
Condensed Consolidated Statements of Cash
Flows |
(in thousands) |
(Unaudited) |
|
|
|
|
|
Six Months Ended |
|
May 3, |
|
April 28, |
|
2020 |
|
2019 |
|
|
|
|
Cash flows from operating
activities: |
|
|
|
Net income |
$ |
18,900 |
|
|
$ |
17,620 |
|
Adjustments to reconcile net income to net cash |
|
|
|
provided by operating activities: |
|
|
|
Depreciation and amortization |
|
47,896 |
|
|
|
38,515 |
|
Share-based compensation |
|
2,576 |
|
|
|
1,962 |
|
Changes in operating assets, liabilities and other |
|
(8,049 |
) |
|
|
(60,384 |
) |
|
|
|
|
Net cash provided by (used in)
operating activities |
|
61,323 |
|
|
|
(2,287 |
) |
|
|
|
|
Cash flows from investing
activities: |
|
|
|
Purchases of property, plant and equipment |
|
(30,127 |
) |
|
|
(140,436 |
) |
Government incentive |
|
5,260 |
|
|
|
5,698 |
|
Other |
|
(139 |
) |
|
|
(23 |
) |
|
|
|
|
Net cash used in investing
activities |
|
(25,006 |
) |
|
|
(134,761 |
) |
|
|
|
|
Cash flows from financing
activities: |
|
|
|
Proceeds from long-term debt |
|
1,140 |
|
|
|
39,633 |
|
Contribution from noncontrolling interest |
|
7,600 |
|
|
|
29,394 |
|
Purchase of treasury stock |
|
(16,894 |
) |
|
|
(10,696 |
) |
Repayments of long-term debt |
|
(389 |
) |
|
|
(61,220 |
) |
Proceeds from share-based arrangements |
|
3,423 |
|
|
|
1,033 |
|
Dividends paid to noncontrolling interests |
|
- |
|
|
|
(26,102 |
) |
Other |
|
(251 |
) |
|
|
(45 |
) |
|
|
|
|
Net cash used in financing
activities |
|
(5,371 |
) |
|
|
(28,003 |
) |
|
|
|
|
Effect of exchange rate
changes on cash, cash equivalents, and restricted cash |
|
475 |
|
|
|
2,843 |
|
|
|
|
|
Net increase (decrease) in
cash, cash equivalents, and restricted cash |
|
31,421 |
|
|
|
(162,208 |
) |
Cash, cash equivalents, and
restricted cash, beginning of period |
|
209,291 |
|
|
|
331,989 |
|
|
|
|
|
Cash, cash equivalents, and
restricted cash, end of period |
$ |
240,712 |
|
|
$ |
169,781 |
|
For Further Information:R. Troy Dewar, CFAVice
President, Investor Relations(203)
740-5610tdewar@photronics.com
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