Photronics Reports Full Year and Fourth Quarter Fiscal 2023 Results
December 13 2023 - 6:30AM
Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in photomask
technologies and solutions, today reported financial results for
its full year and fourth quarter of fiscal year 2023 ended October
31, 2023.
“We delivered our sixth consecutive year of
record revenue with growth in fourth quarter amidst a prolonged
industry downturn,” said Frank Lee, chief executive officer.
“Fourth quarter and full year revenue increased 8% year-over-year,
and fourth quarter increased 1% sequentially. Both IC and FPD
increased, as demand for our design-driven products remained
strong. Operating expenses were lower sequentially, partially
offsetting lower gross profit, resulting in operating margins of
28.5% for the fourth quarter and 28.4% for the year. Strong cash
generation and our disciplined strategy of investing in growth
strengthened the balance sheet while positioning us for sustained
solid performance. I am proud of our team’s performance and look
forward to even greater achievements as we execute our strategy in
the year to come.”
Full Year Fiscal 2023
Results
- Revenue was $892.1 million, up 8%
over the previous year – the sixth consecutive year of record
revenue
- GAAP net income attributable to
Photronics, Inc. shareholders was $125.5 million, or $2.03 per
diluted share, compared with $118.8 million, or $1.94 per diluted
share in 2022
- Non-GAAP net income attributable to
Photronics, Inc. shareholders was $126.0 million, or $2.04 per
diluted share, compared with $101.7 million, or $1.66 per diluted
share in 2022
- IC revenue was $651.3 million, up
10%
- FPD revenue was $240.8 million, up
4%
- Cash generated from operating
activities was $302.2 million, and cash invested in organic growth
through capital expenditures was $131.3 million
Fourth Quarter Fiscal 2023
Results
- Revenue was $227.5 million, up 8%
year-over-year and 1% sequentially
- GAAP net income attributable to
Photronics, Inc. shareholders was $44.6 million, or $0.72 per
diluted share, compared with $37.1 million, or $0.60 per diluted
share in the fourth quarter 2022 and $27.0 million, or $0.44 per
diluted share in the third quarter of 2023
- Non-GAAP net income attributable to
Photronics, Inc. shareholders was $37.2 million, or $0.60 per
diluted share, compared with $31.2 million, or $0.51 per diluted
share in the fourth quarter 2022 and $31.6 million, or $0.51 per
diluted share in the third quarter of 2023
- IC revenue was $164.5 million, up
5% year-over-year and 1% sequentially
- FPD revenue was a record at $63.0
million, up 17% from the same quarter last year and 3%
sequentially
- Cash generated from operating
activities was $106.6 million, and cash invested in organic growth
through capital expenditures was $52.5 million
- Cash balance at the end of the
quarter was $499.3 million, with $12.9 million in short-term
investments and $24.6 million in debt
First Quarter Fiscal 2024
Guidance
For the first quarter of fiscal 2024, Photronics
expects revenue to be between $217 million and $225 million and
non-GAAP net income attributable to Photronics, Inc. shareholders
to be between $0.45 and $0.53 per diluted share.
Webcast
A webcast to discuss these results is scheduled
for 8:30 a.m. Eastern time on Wednesday, December 13, 2023. The
call will be broadcast live and on-demand on the Events and
Presentations link on the Photronics website. Analysts and
investors who wish to participate in the Q&A portion of the
call should click here. It is suggested that participants register
fifteen minutes prior to the call's scheduled start time.
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, 2022, the company had 1,828 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” regarding our industry, our
strategic position, and our financial and operating results. These
forward-looking statements are subject to a number of risks and
uncertainties that could cause actual results, performance or
achievements to differ materially. Please refer to the documents we
file with the Securities and Exchange Commission. These documents
contain and identify important factors that could cause our actual
results to differ materially from those contained in these
forward-looking statements. These certain factors can be found at
www.photronics.com/riskfactors. Although we believe that the
expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity,
performance, or achievements. We are under no duty to update any of
the forward-looking statements after the date of this release to
conform these statements to actual results.
Non-GAAP Financial Measures
Non-GAAP Net Income attributable to Photronics,
Inc. shareholders and non-GAAP earnings per share, Free Cash Flow,
and Net Cash are "non-GAAP financial measures" as such term is
defined by the Securities and Exchange Commission and may differ
from similarly named non-GAAP financial measures used by other
companies. The attached financial supplement reconciles Photronics,
Inc. financial results under GAAP to non-GAAP financial
information. We believe these non-GAAP financial measures that
exclude certain items are useful for analysts and investors to
evaluate our future on-going performance because they enable a more
meaningful comparison of our projected performance with our
historical results. These non-GAAP metrics are not intended to
represent funds available for our discretionary use and are not
intended to represent, or be used as a substitute for, gross
profit, operating income, net income, cash and cash equivalents, or
cash flows from operations, as measured under GAAP. The items
excluded from these non-GAAP metrics, but included in the
calculation of their closest GAAP equivalent, are significant
components of the condensed consolidated balance sheets and
statement of cash flows and must be considered in performing a
comprehensive assessment of overall financial performance. Please
refer to the non-GAAP reconciliations on the following pages.
For Further Information:John P.
JordanExecutive Vice President &
CFO203.740.5671jjordan@photronics.com
|
|
|
|
PHOTRONICS, INC. |
Condensed Consolidated Statements of Income |
(in thousands, except per share amounts) |
(Unaudited) |
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
October 31, |
|
July 30, |
|
October 31, |
|
October 31, |
|
October 31, |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
227,473 |
|
|
$ |
224,206 |
|
|
$ |
210,266 |
|
|
$ |
892,076 |
|
|
$ |
824,549 |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
142,591 |
|
|
|
137,405 |
|
|
|
129,997 |
|
|
|
555,914 |
|
|
|
530,336 |
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
84,882 |
|
|
|
86,801 |
|
|
|
80,269 |
|
|
|
336,162 |
|
|
|
294,213 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
16,731 |
|
|
|
18,032 |
|
|
|
15,683 |
|
|
|
69,458 |
|
|
|
63,989 |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
3,367 |
|
|
|
3,505 |
|
|
|
4,045 |
|
|
|
13,654 |
|
|
|
18,341 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses |
|
|
20,098 |
|
|
|
21,537 |
|
|
|
19,728 |
|
|
|
83,112 |
|
|
|
82,330 |
|
|
|
|
|
|
|
|
|
|
|
|
Other operating loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(17 |
) |
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
64,784 |
|
|
|
65,264 |
|
|
|
60,541 |
|
|
|
253,050 |
|
|
|
211,866 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating (loss) income, net |
|
18,660 |
|
|
|
(911 |
) |
|
|
10,797 |
|
|
|
16,896 |
|
|
|
27,167 |
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Income Tax Provision |
|
83,444 |
|
|
|
64,353 |
|
|
|
71,338 |
|
|
|
269,946 |
|
|
|
239,033 |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision |
|
|
20,288 |
|
|
|
16,098 |
|
|
|
16,074 |
|
|
|
70,312 |
|
|
|
59,791 |
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
|
63,156 |
|
|
|
48,255 |
|
|
|
55,264 |
|
|
|
199,634 |
|
|
|
179,242 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to noncontrolling interests |
|
18,545 |
|
|
|
21,296 |
|
|
|
18,204 |
|
|
|
74,149 |
|
|
|
60,456 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Photronics, Inc. shareholders |
|
$ |
44,611 |
|
|
$ |
26,959 |
|
|
$ |
37,060 |
|
|
$ |
125,485 |
|
|
$ |
118,786 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.73 |
|
|
$ |
0.44 |
|
|
$ |
0.61 |
|
|
$ |
2.05 |
|
|
$ |
1.96 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
0.72 |
|
|
$ |
0.44 |
|
|
$ |
0.60 |
|
|
$ |
2.03 |
|
|
$ |
1.94 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
61,290 |
|
|
|
61,233 |
|
|
|
60,773 |
|
|
|
61,139 |
|
|
|
60,559 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
62,067 |
|
|
|
61,974 |
|
|
|
61,374 |
|
|
|
61,755 |
|
|
|
61,189 |
|
|
|
|
|
|
|
|
|
|
|
|
PHOTRONICS, INC. |
Condensed Consolidated Balance Sheets |
(in thousands) |
(Unaudited) |
|
|
|
October 31, |
|
October 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
499,292 |
|
|
$ |
319,680 |
|
Short-term investments |
|
|
12,915 |
|
|
|
38,820 |
|
Accounts receivable |
|
|
194,927 |
|
|
|
198,147 |
|
Inventories |
|
|
49,963 |
|
|
|
50,753 |
|
Other current assets |
|
|
28,353 |
|
|
|
37,252 |
|
|
|
|
|
|
Total current assets |
|
|
785,450 |
|
|
|
644,652 |
|
|
|
|
|
|
Property, plant and equipment, net |
|
709,244 |
|
|
|
643,873 |
|
Other assets |
|
|
31,527 |
|
|
|
27,305 |
|
|
|
|
|
|
Total assets |
|
$ |
1,526,221 |
|
|
$ |
1,315,830 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
Current portion of long-term debt |
$ |
6,621 |
|
|
$ |
10,024 |
|
Accounts payable and accrued liabilities |
|
178,602 |
|
|
|
183,773 |
|
|
|
|
|
|
Total current liabilities |
|
|
185,223 |
|
|
|
193,797 |
|
|
|
|
|
|
Long-term debt |
|
|
17,998 |
|
|
|
32,310 |
|
Other liabilities |
|
|
47,391 |
|
|
|
27,634 |
|
|
|
|
|
|
Photronics, Inc. shareholders' equity |
|
975,008 |
|
|
|
831,527 |
|
Noncontrolling interests |
|
|
300,601 |
|
|
|
230,562 |
|
Total equity |
|
|
1,275,609 |
|
|
|
1,062,089 |
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
1,526,221 |
|
|
$ |
1,315,830 |
|
|
|
|
|
|
PHOTRONICS, INC. |
Condensed Consolidated Statements of Cash
Flows |
(in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
Year Ended |
|
|
October 31, |
|
October 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
Net income |
|
$ |
199,634 |
|
|
$ |
179,242 |
|
Adjustments to reconcile net income to net cash |
|
|
|
provided by operating activities: |
|
|
|
|
Depreciation and amortization |
|
|
80,835 |
|
|
|
80,330 |
|
Share-based compensation |
|
|
8,001 |
|
|
|
6,308 |
|
Changes in operating assets, liabilities and other |
|
13,706 |
|
|
|
9,307 |
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
302,176 |
|
|
|
275,187 |
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
Purchases of property, plant and equipment |
|
(131,295 |
) |
|
|
(112,338 |
) |
Purchases of available-for-sale debt securities |
|
(20,192 |
) |
|
|
(38,854 |
) |
Proceeds from maturity of available-for-sale debt securities |
|
47,537 |
|
|
|
- |
|
Government incentives |
|
|
2,522 |
|
|
|
3,615 |
|
Other |
|
|
(117 |
) |
|
|
(180 |
) |
|
|
|
|
|
Net cash used in investing activities |
|
|
(101,545 |
) |
|
|
(147,757 |
) |
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
Repayments of debt |
|
|
(18,439 |
) |
|
|
(65,440 |
) |
Purchases of treasury stock |
|
|
- |
|
|
|
(2,522 |
) |
Contributions from noncontrolling interest |
|
- |
|
|
|
24,995 |
|
Proceeds from share-based arrangements |
|
1,248 |
|
|
|
5,749 |
|
Net settlements of restricted stock awards |
|
(1,302 |
) |
|
|
(1,471 |
) |
|
|
|
|
|
Net cash used in financing activities |
|
|
(18,493 |
) |
|
|
(38,689 |
) |
|
|
|
|
|
Effects of exchange rate changes on cash, cash equivalents, and
restricted cash |
|
(2,680 |
) |
|
|
(46,012 |
) |
|
|
|
|
|
Net increase in cash, cash equivalents, and restricted cash |
|
179,458 |
|
|
|
42,729 |
|
Cash, cash equivalents, and restricted cash, beginning of
period |
|
322,409 |
|
|
|
279,680 |
|
|
|
|
|
|
Cash, cash equivalents, and restricted cash, end of period |
$ |
501,867 |
|
|
$ |
322,409 |
|
|
|
|
|
|
PHOTRONICS, INC. |
Reconciliation of GAAP to Non-GAAP Financial
Information |
(in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months ended |
|
Year ended |
|
October 31, |
|
July 30, |
|
October 31, |
|
October 31, |
|
October 31, |
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Reconciliation of GAAP to Non-GAAP Non-operating (loss)
Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Non-operating (loss) income, net |
$ |
18,660 |
|
|
$ |
(911 |
) |
|
$ |
10,797 |
|
|
$ |
16,896 |
|
|
$ |
27,167 |
|
FX (gain) loss |
|
(13,234 |
) |
|
|
4,543 |
|
|
|
(10,369 |
) |
|
|
(2,466 |
) |
|
|
(27,344 |
) |
Non-GAAP Non-operating (loss) income, net |
$ |
5,426 |
|
|
$ |
3,632 |
|
|
$ |
428 |
|
|
$ |
14,430 |
|
|
$ |
(177 |
) |
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Income tax
provision: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Income tax provision |
$ |
20,288 |
|
|
$ |
16,098 |
|
$ |
- |
$ |
16,074 |
|
|
$ |
70,312 |
|
|
$ |
59,791 |
|
Estimated tax effects of FX (gain) loss |
|
3,437 |
|
|
|
(1,193 |
) |
|
- |
|
2,522 |
|
|
|
317 |
|
|
|
5,933 |
|
Non-GAAP Income tax provision |
$ |
16,851 |
|
|
$ |
17,291 |
|
|
$ |
13,552 |
|
|
$ |
69,995 |
|
|
$ |
53,858 |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Noncontrolling
interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Noncontrolling interests |
$ |
18,545 |
|
|
$ |
21,296 |
|
|
$ |
18,204 |
|
|
$ |
74,149 |
|
|
$ |
60,456 |
|
Estimated noncontrolling interest effects of above |
|
2,431 |
|
|
|
1,328 |
|
|
|
1,990 |
|
|
|
2,676 |
|
|
|
4,275 |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Noncontrolling interests |
$ |
16,114 |
|
|
$ |
19,968 |
|
|
$ |
16,214 |
|
|
$ |
71,473 |
|
|
$ |
56,181 |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Net
Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net Income |
$ |
44,611 |
|
|
$ |
26,959 |
|
|
$ |
37,060 |
|
|
$ |
125,485 |
|
|
$ |
118,786 |
|
FX (gain) loss |
|
(13,234 |
) |
|
|
4,543 |
|
|
|
(10,369 |
) |
|
|
(2,466 |
) |
|
|
(27,344 |
) |
Estimated tax effects of above |
|
3,437 |
|
|
|
(1,193 |
) |
|
|
2,522 |
|
|
|
317 |
|
|
|
5,933 |
|
Estimated noncontrolling interest effects of above |
|
2,431 |
|
|
|
1,328 |
|
|
|
1,990 |
|
|
|
2,676 |
|
|
|
4,275 |
|
Non-GAAP Net Income |
$ |
37,245 |
|
|
$ |
31,637 |
|
|
$ |
31,203 |
|
|
$ |
126,012 |
|
|
$ |
101,650 |
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common shares outstanding -
Diluted |
|
62,067 |
|
|
|
61,974 |
|
|
|
61,374 |
|
|
|
61,755 |
|
|
|
61,189 |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP EPS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings per share |
$ |
0.72 |
|
|
$ |
0.44 |
|
|
$ |
0.60 |
|
|
$ |
2.03 |
|
|
$ |
1.94 |
|
Effects of the above adjustments |
$ |
(0.12 |
) |
|
$ |
0.07 |
|
|
$ |
(0.09 |
) |
|
$ |
0.01 |
|
|
$ |
(0.28 |
) |
Non-GAAP diluted earnings per share |
$ |
0.60 |
|
|
$ |
0.51 |
|
|
$ |
0.51 |
|
|
$ |
2.04 |
|
|
$ |
1.66 |
|
|
|
|
|
|
|
|
|
|
|
PHOTRONICS, INC. |
Reconciliation of GAAP to Non-GAAP Financial Information
(cont.) |
(in thousands) |
(Unaudited) |
|
|
|
|
Reconciliation of Net cash provided by operating activities
to Free Cash Flow |
|
|
|
Year ended |
|
|
|
October 31, |
|
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
GAAP Net cash provided by operating activities |
$ |
302,176 |
|
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
(131,295 |
) |
|
|
|
|
|
|
Free Cash Flow |
$ |
170,881 |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Cash and cash equivalents to Net
Cash: |
|
|
|
|
As of |
|
October 31, |
|
October 31, |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
Cash and cash equivalents |
$ |
499,292 |
|
|
$ |
319,680 |
|
|
|
|
|
Current portion of Long-term debt |
|
(6,621 |
) |
|
|
(10,024 |
) |
|
|
|
|
Long-term Debt |
|
(17,998 |
) |
|
|
(32,310 |
) |
|
|
|
|
Net Cash |
$ |
474,673 |
|
|
$ |
277,346 |
|
|
|
|
|
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