Photronics Reports Full Year and Fourth Quarter Fiscal 2020 Results
December 09 2020 - 6:00AM
Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in photomask
technologies and solutions, today reported financial results for
its fiscal 2020 full year and fourth quarter ended October 31,
2020.
Full year revenue was a record $609.7 million,
up 11% compared with 2019. IC revenue was $418.4 million, up 3%
compared with last year; and FPD revenue was a record $191.3
million, up 32% compared with last year.
Fourth quarter revenue was $149.3 million, down
5% compared with the previous quarter and 4% compared with the same
quarter last year. Integrated circuit (IC) revenue was $105.9
million, down 3% sequentially and 6% compared with the fourth
quarter of last year. Flat panel display (FPD) revenue was $43.4
million, down 12% compared with last quarter and 1% compared with
the same period last year.
Net income attributable to Photronics, Inc.
shareholders was $33.8 million ($0.52 per diluted share) compared
with $29.8 million ($0.44 per diluted share) in 2019; fourth
quarter net income was $6.5 million ($0.10 per diluted share),
compared with $10.8 million ($0.17 per diluted share) for the third
quarter of 2020 and $9.7 million ($0.15 per diluted share) for the
fourth quarter of 2019.
"We achieved record annual revenue for the third
consecutive year in 2020, overcoming tremendous global and regional
challenges,” said Peter Kirlin, chief executive officer. “Fourth
quarter revenue declined 5% sequentially as typical seasonality was
worsened by geopolitical factors and softness in some sectors. With
the decrease in quarterly revenue, profit margins contracted due to
the effect of operating leverage on our income. We increased our
cash balance while investing in organic growth and returning cash
to our shareholders through share repurchases, ending 2020 in a
strong financial position. Our expectations are for another growth
year in 2021, with high single-digit percent growth in revenue and
an up-tick in operating profit similar to the 23% increase achieved
in 2020.”
First Quarter
2021
Guidance
For the first quarter of 2021, Photronics
expects revenue to be between $145 million and $155 million, and
net income attributable to Photronics, Inc. shareholders to be
between $0.07 and $0.14 per diluted share.
Conference Call
A conference call to discuss these results is
scheduled for 8:30 a.m. Eastern time on Wednesday, December 9,
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.
Investor and Analyst Day
Photronics will host an investor and analyst day
on December 14, 2020. The event will be conducted virtually and
feature updates from management and a Q&A session. More
information can be found on the Investors section of Photronics'
website at www.photronics.com.
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 over 50 years. As of October 31,
2020, the company had 1,728 employees. The company operates 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
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, compliance with local, State and Federal
laws, rules and regulations including, but not limited to, import
and export controls, tariffs and penalties, fines and violations
related thereto, 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 |
|
Year Ended |
|
|
October 31, |
|
|
August 2, |
|
|
October 31, |
|
|
October 31, |
|
|
October 31, |
|
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
149,286 |
|
|
$ |
157,895 |
|
|
$ |
156,257 |
|
|
$ |
609,691 |
|
|
$ |
550,660 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
117,401 |
|
|
120,161 |
|
|
118,098 |
|
|
475,037 |
|
|
429,819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
31,885 |
|
|
37,734 |
|
|
38,159 |
|
|
134,654 |
|
|
120,841 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
12,790 |
|
|
13,306 |
|
|
12,140 |
|
|
53,582 |
|
|
52,326 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
4,110 |
|
|
4,492 |
|
|
4,543 |
|
|
17,144 |
|
|
16,394 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses |
|
16,900 |
|
|
17,798 |
|
|
16,683 |
|
|
70,726 |
|
|
68,720 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
14,985 |
|
|
19,936 |
|
|
21,476 |
|
|
63,928 |
|
|
52,121 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (expense) income,
net |
|
(2,937 |
) |
|
(2,135 |
) |
|
(6,111 |
) |
|
(2,327 |
) |
|
(1,420 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income tax provision |
12,048 |
|
|
17,801 |
|
|
15,365 |
|
|
61,601 |
|
|
50,701 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision |
|
3,469 |
|
|
4,937 |
|
|
2,327 |
|
|
21,258 |
|
|
10,210 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
8,579 |
|
|
12,864 |
|
|
13,038 |
|
|
40,343 |
|
|
40,491 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to noncontrolling interests |
2,119 |
|
|
2,088 |
|
|
3,338 |
|
|
6,523 |
|
|
10,698 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Photronics, Inc. shareholders |
$ |
6,460 |
|
|
$ |
10,776 |
|
|
$ |
9,700 |
|
|
$ |
33,820 |
|
|
$ |
29,793 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.10 |
|
|
$ |
0.17 |
|
|
$ |
0.15 |
|
|
$ |
0.52 |
|
|
$ |
0.45 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
0.10 |
|
|
$ |
0.17 |
|
|
$ |
0.15 |
|
|
$ |
0.52 |
|
|
$ |
0.44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
64,193 |
|
|
64,780 |
|
|
66,230 |
|
|
64,866 |
|
|
66,347 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
64,768 |
|
|
65,247 |
|
|
66,862 |
|
|
65,470 |
|
|
69,155 |
|
PHOTRONICS, INC. |
Condensed Consolidated Balance Sheets |
(in thousands) |
(Unaudited) |
|
|
|
October 31, |
|
|
October 31, |
|
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
278,665 |
|
|
$ |
206,530 |
|
Accounts receivable |
|
134,470 |
|
|
134,454 |
|
Inventories |
|
57,269 |
|
|
48,155 |
|
Other current assets |
|
29,735 |
|
|
38,388 |
|
|
|
|
|
|
|
|
Total current assets |
|
500,139 |
|
|
427,527 |
|
|
|
|
|
|
|
|
Property, plant
and equipment, net |
631,475 |
|
|
632,441 |
|
Intangible assets, net |
|
3,437 |
|
|
7,870 |
|
Other assets |
|
53,131 |
|
|
50,827 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,188,182 |
|
|
$ |
1,118,665 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Debt |
|
$ |
13,678 |
|
|
$ |
10,873 |
|
Accounts payable and accrued liabilities |
129,261 |
|
|
141,081 |
|
|
|
|
|
|
|
|
Total current liabilities |
|
142,939 |
|
|
151,954 |
|
|
|
|
|
|
|
|
Long-term debt |
|
54,980 |
|
|
41,887 |
|
Other liabilities |
|
27,997 |
|
|
13,732 |
|
|
|
|
|
|
|
|
Photronics, Inc.
shareholders' equity |
804,962 |
|
|
769,892 |
|
Noncontrolling interests |
|
157,304 |
|
|
141,200 |
|
Total equity |
|
962,266 |
|
|
911,092 |
|
|
|
|
|
|
|
|
Total liabilities and
equity |
|
$ |
1,188,182 |
|
|
$ |
1,118,665 |
|
PHOTRONICS, INC. |
Condensed Consolidated Statements of Cash
Flows |
(in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Year Ended |
|
|
October 31, |
|
|
October 31, |
|
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
Cash flows from operating
activities: |
|
|
|
|
|
|
Net income |
|
$ |
40,343 |
|
|
$ |
40,491 |
|
Adjustments to reconcile net income to net cash |
|
|
|
|
|
provided by operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
93,814 |
|
|
83,879 |
|
Share-based compensation |
|
4,927 |
|
|
3,680 |
|
Changes in operating assets, liabilities and other |
3,962 |
|
|
(59,664 |
) |
|
|
|
|
|
|
|
Net cash provided by operating
activities |
|
143,046 |
|
|
68,386 |
|
|
|
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
|
|
|
Purchases of property, plant and equipment |
(70,815 |
) |
|
(178,375 |
) |
Government incentive |
|
5,263 |
|
|
27,003 |
|
Other |
|
(159 |
) |
|
(34 |
) |
|
|
|
|
|
|
|
Net cash used in investing
activities |
|
(65,711 |
) |
|
(151,406 |
) |
|
|
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
|
|
Proceeds from debt |
|
20,340 |
|
|
54,633 |
|
Contributions from noncontrolling interest |
17,596 |
|
|
29,394 |
|
Purchases of treasury stock |
|
(34,394 |
) |
|
(21,696 |
) |
Dividends paid to noncontrolling interests |
(16,151 |
) |
|
(45,050 |
) |
Repayments of debt |
|
(7,392 |
) |
|
(61,319 |
) |
Proceeds from share-based arrangements |
4,239 |
|
|
2,071 |
|
Other |
|
(248 |
) |
|
(92 |
) |
|
|
|
|
|
|
|
Net cash used in financing
activities |
|
(16,010 |
) |
|
(42,059 |
) |
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash, cash equivalents, and restricted cash |
10,986 |
|
|
2,381 |
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash, cash equivalents, and restricted cash |
72,311 |
|
|
(122,698 |
) |
Cash, cash
equivalents, and restricted cash, beginning of period |
209,291 |
|
|
331,989 |
|
|
|
|
|
|
|
|
Cash, cash
equivalents, and restricted cash, end of period |
$ |
281,602 |
|
|
$ |
209,291 |
|
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