Photronics Reports Second Quarter Fiscal 2022 Results and Updates Long-Term Target Model
May 25 2022 - 6:00AM
Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in photomask
technologies and solutions, today reported financial results for
its fiscal 2022 second quarter ended May 1, 2022.
“Second quarter was another excellent quarter,
as strong end-market demand and higher pricing across both
mainstream and high-end IC products propelled us to our fifth
consecutive quarter of record revenue,” said Frank Lee, chief
executive officer. “As revenue grew, our operating leverage and
disciplined cost management expanded gross and operating margins to
36% and 25%, respectively. Our balance sheet continues to
strengthen and support our growth strategy of investing to align
our operations and technology to serve the strongest sectors of the
market. We expect favorable demand trends to continue for advanced
mobile displays, high-end logic devices and mainstream IC
applications as our customers release new designs and build out new
capacity.”
Second Quarter 2022 Results
- Revenue was $204.5 million, up 8%
sequentially and 28% year-over-year
- Net income attributable to
Photronics, Inc. shareholders was $29.8 million ($0.49 per diluted
share), up 29% over first quarter 2022 net income of $23.1 million
($0.38 per diluted share) and nearly triple the second quarter 2021
net income of $10.5 million ($0.17 per diluted share)
- Integrated circuit (IC) revenue in
the second quarter was $145.8 million, up 12% sequentially and 30%
compared with the second quarter of last year
- Flat panel display (FPD) revenue
was $58.7 million, down 2% from last quarter and up 23% over the
same period last year
Lee continued, “As I begin my tenure as CEO,
Photronics is in a very strong place with a strong global team,
leading technology, quality products, and growing market share. We
expect to continue to grow sequentially throughout 2022. In fact,
market dynamics and Photronics execution have again driven
profitability levels that propelled the Company well beyond the
projections in the target model we provided just last quarter.” Lee
concluded, “Significant indicators from the market and other
market participants are that these conditions will continue well
into the future. We have therefore included an updated target
model in the supplemental information issued in connection with our
conference call later today.”
Third Quarter 2022 Guidance
For the third quarter of 2022, Photronics
expects revenue to be between $205 million and $215 million, and
net income attributable to Photronics, Inc. shareholders to be
between $0.45 and $0.55 per diluted share.
Conference Call
A conference call to discuss these results is
scheduled for 8:30 a.m. Eastern time on Wednesday, May 25, 2022.
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 over 50 years. As of October 31,
2021, 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.
For Further Information: John P. Jordan
Executive Vice President & CFO 203.740.5671
jjordan@photronics.com
|
|
PHOTRONICS,
INC. |
Condensed
Consolidated Statements of Income |
(in thousands,
except per share amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
May
1, |
|
January
30, |
|
May
2, |
|
May
1, |
|
May
2, |
|
|
2022 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
204,509 |
|
$ |
189,827 |
|
$ |
159,763 |
|
|
$ |
394,336 |
|
$ |
311,830 |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
goods sold |
|
|
131,582 |
|
|
129,964 |
|
|
120,514 |
|
|
|
261,546 |
|
|
242,052 |
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
72,927 |
|
|
59,863 |
|
|
39,249 |
|
|
|
132,790 |
|
|
69,778 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
16,613 |
|
|
15,727 |
|
|
14,067 |
|
|
|
32,340 |
|
|
28,120 |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
4,206 |
|
|
5,939 |
|
|
4,375 |
|
|
|
10,145 |
|
|
9,085 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses |
|
|
20,819 |
|
|
21,666 |
|
|
18,442 |
|
|
|
42,485 |
|
|
37,205 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
52,108 |
|
|
38,197 |
|
|
20,807 |
|
|
|
90,305 |
|
|
32,573 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating income (expense), net |
|
8,021 |
|
|
4,707 |
|
|
(772 |
) |
|
|
12,728 |
|
|
(92 |
) |
|
|
|
|
|
|
|
|
|
|
|
Income Before Income Tax
Provision |
|
60,129 |
|
|
42,904 |
|
|
20,035 |
|
|
|
103,033 |
|
|
32,481 |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision |
|
|
14,689 |
|
|
11,178 |
|
|
3,714 |
|
|
|
25,867 |
|
|
6,651 |
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
|
45,440 |
|
|
31,726 |
|
|
16,321 |
|
|
|
77,166 |
|
|
25,830 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to noncontrolling interests |
|
15,597 |
|
|
8,662 |
|
|
5,795 |
|
|
|
24,259 |
|
|
7,268 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Photronics, Inc. shareholders |
$ |
29,843 |
|
$ |
23,064 |
|
$ |
10,526 |
|
|
$ |
52,907 |
|
$ |
18,562 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.49 |
|
$ |
0.38 |
|
$ |
0.17 |
|
|
$ |
0.88 |
|
$ |
0.30 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
0.49 |
|
$ |
0.38 |
|
$ |
0.17 |
|
|
$ |
0.87 |
|
$ |
0.30 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
60,606 |
|
|
60,158 |
|
|
62,054 |
|
|
|
60,382 |
|
|
62,265 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
61,145 |
|
|
60,936 |
|
|
62,568 |
|
|
|
61,041 |
|
|
62,786 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PHOTRONICS,
INC. |
Condensed
Consolidated Balance Sheets |
(in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
May
1, |
|
October
31, |
|
|
|
2022 |
|
2021 |
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
329,282 |
|
$ |
276,670 |
|
Accounts receivable |
|
|
190,259 |
|
|
174,447 |
|
Inventories |
|
|
58,437 |
|
|
55,249 |
|
Other current assets |
|
|
52,864 |
|
|
44,250 |
|
|
|
|
|
|
|
Total current assets |
|
|
630,842 |
|
|
550,616 |
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
659,881 |
|
|
696,553 |
|
Other
assets |
|
|
41,661 |
|
|
47,033 |
|
|
|
|
|
|
|
Total
assets |
|
$ |
1,332,384 |
|
$ |
1,294,202 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Current portion of long-term debt |
|
$ |
12,410 |
|
$ |
22,248 |
|
Accounts payable and accrued liabilities |
|
172,205 |
|
|
153,900 |
|
|
|
|
|
|
|
Total current liabilities |
|
|
184,615 |
|
|
176,148 |
|
|
|
|
|
|
|
Long-term
debt |
|
|
70,138 |
|
|
89,446 |
|
Other
liabilities |
|
|
25,048 |
|
|
28,046 |
|
|
|
|
|
|
|
Photronics, Inc. shareholders' equity |
|
836,752 |
|
|
823,692 |
|
Noncontrolling interests |
|
|
215,831 |
|
|
176,870 |
|
Total equity |
|
|
1,052,583 |
|
|
1,000,562 |
|
|
|
|
|
|
|
Total
liabilities and equity |
|
$ |
1,332,384 |
|
$ |
1,294,202 |
|
|
|
|
|
|
|
|
|
|
|
|
|
PHOTRONICS,
INC. |
|
Condensed
Consolidated Statements of Cash Flows |
|
(in thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
|
|
|
May
1, |
|
May
2, |
|
|
|
|
|
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
|
Net income |
|
|
|
$ |
77,166 |
|
|
$ |
25,830 |
|
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
Depreciation
and amortization |
|
|
41,405 |
|
|
|
47,121 |
|
|
Share-based
compensation |
|
|
3,041 |
|
|
|
2,723 |
|
|
Changes in
operating assets, liabilities and other |
|
(18,323 |
) |
|
|
(17,455 |
) |
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
103,289 |
|
|
|
58,219 |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
Purchases of property,
plant and equipment |
|
(34,809 |
) |
|
|
(73,516 |
) |
|
Government
incentives |
|
|
|
1,394 |
|
|
|
5,775 |
|
|
Other |
|
|
|
|
|
(199 |
) |
|
|
(157 |
) |
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(33,614 |
) |
|
|
(67,898 |
) |
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
Repayments of debt |
|
|
|
(27,571 |
) |
|
|
(8,636 |
) |
|
Purchases of treasury
stock |
|
|
(2,522 |
) |
|
|
(23,250 |
) |
|
Contribution from
noncontrolling interest |
|
24,995 |
|
|
|
- |
|
|
Proceeds from share-based
arrangements |
|
4,384 |
|
|
|
1,180 |
|
|
Proceeds from long-term
debt |
|
|
- |
|
|
|
12,439 |
|
|
Net settlements of
restricted stock awards |
|
(1,452 |
) |
|
|
(371 |
) |
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities |
|
|
(2,166 |
) |
|
|
(18,638 |
) |
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash, cash equivalents, and
restricted cash |
|
(14,917 |
) |
|
|
5,686 |
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash, cash equivalents, and restricted
cash |
|
52,592 |
|
|
|
(22,631 |
) |
|
Cash, cash equivalents, and restricted cash, beginning of
period |
|
279,680 |
|
|
|
281,602 |
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents, and restricted cash, end of period |
$ |
332,272 |
|
|
$ |
258,971 |
|
|
|
|
|
|
|
|
|
|
|
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