Photronics Reports Second Quarter Fiscal 2020 Results - Photronics (NASDAQ:PLAB)

Second quarter 2020 revenue was $142.8 million, down 11% sequentially and up 9% year-over-year
Net income attributable to Photronics, Inc. shareholders was $6.3 million, or $0.10 per diluted share
Cash provided by operating activities was $30.5 million, resulting in a cash balance of $237.8 million
Third quarter 2020 guidance: revenue between $145 and $155 million with diluted EPS between $0.11 and $0.17

BROOKFIELD, Conn., May 27, 2020 (GLOBE NEWSWIRE) -- Photronics, Inc. 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, CFA
Vice President, Investor Relations
(203) 740-5610
tdewar@photronics.com

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