- First quarter 2019 revenue was $124.7 million, up 1% year-over-year and down 14% sequentially
- Net income attributable to Photronics, Inc. shareholders was $5.3 million, or $0.08 per diluted share
- Cash balance was $232 million, with capital expenditures of $107 million as China investments peaked
- Repurchased 1.1 million shares for $10.7 million; cumulative repurchase of 3.7 million shares for $33.8 million since July 20181
- Second quarter 2019 guidance: revenue between $125 and $135 million with diluted EPS between $0.03 and $0.10
BROOKFIELD, Conn., Feb. 21, 2019 (GLOBE NEWSWIRE) -- Photronics, Inc. PLAB, a worldwide leader in supplying innovative imaging technology solutions for the global electronics industry, today reported financial results for its fiscal 2019 first quarter ended January 27, 2019.
First quarter revenue was $124.7 million, 1% better than the same quarter last year and 14% lower than the previous quarter. Integrated circuit (IC) revenue was $94.9 million, down 1% compared with last year and 14% sequentially. Flat panel display (FPD) revenue was $29.8 million, up 7% compared with last year and down 12% sequentially.
Net income attributable to Photronics, Inc. shareholders was $5.3 million ($0.08 per diluted share), compared with $5.9 million ($0.09 per diluted share) for the first quarter of 2018 and $12.5 million ($0.18 per diluted share) for the fourth quarter of 2018.
"First quarter revenue met our expectations as strong results in AMOLED displays in China were somewhat offset by anticipated impact of seasonal softness, macroeconomic headwinds, and six fewer days than the fourth quarter of 2018," said Peter Kirlin, chief executive officer. "We saw weaker demand in IC, for both high-end and mainstream, due to semiconductor industry macro headwinds and seasonal softness. For FPD, AMOLED demand was solid once again as new product development and introduction continues. Pressure from lower revenue and startup expenses in China resulted in overall gross and operating margin of 20.9% and 6.5%, respectively. Cash balance at the end of the quarter was $232 million as we invested $107 million in capital expenditures, primarily for China. Work on our new China facilities is progressing and we anticipate production to begin in Hefei during the second quarter."
Second Quarter 2019 Guidance
For the second quarter of 2019, Photronics expects revenue to be between $125 million and $135 million, and net income attributable to Photronics, Inc. shareholders to be between $0.03 and $0.10 per diluted share.
Conference Call
A conference call to discuss these results is scheduled for 8:30 a.m. Eastern time on Thursday, February 21, 2019. The call can be accessed by logging onto Photronics' web site 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' web site for instant replay access.
1. The October 2018 share repurchase program of $25 million has concluded.
About Photronics
Photronics is a leading worldwide manufacturer of photomasks. Photomasks are high precision quartz plates that contain microscopic images of electronic circuits. A key element in the manufacture of semiconductors and flat panel displays, photomasks are used to transfer circuit patterns onto semiconductor wafers and flat panel display substrates during the fabrication of integrated circuits, a variety of flat panel displays and, to a lesser extent, other types of electrical and optical components. They are produced in accordance with product designs provided by customers at strategically located manufacturing facilities in Asia, Europe, and North America. Additional information on the Company can be accessed at www.photronics.com
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements made by or on behalf of Photronics, Inc. and its subsidiaries (the Company). The forward-looking statements contained in this press release and other parts of Photronics' web site involve risks and uncertainties that may affect the Company's operations, markets, products, services, prices, and other factors. These risks and uncertainties include, but are not limited to, economic, competitive, legal, governmental, political, and technological factors as well as decisions we may make in the future regarding our business, capital structure and other matters. These forward-looking statements generally can be identified by phrases such as "believes", "expects", "anticipates", "plans", "projects", and similar expressions. Accordingly, there is no assurance that the Company's expectations will be realized. For a fuller discussion of the factors that may affect the Company's operations, see "Forward Looking Statements" in the Company's Quarterly and Annual Reports to the Securities and Exchange Commission on Forms 10-Q and 10-K. The Company assumes no obligation to provide revisions to any forward-looking statements.
For Further Information:
R. Troy Dewar, CFA
Vice President, Investor Relations
(203) 740-5610
tdewar@photronics.com
| PHOTRONICS, INC. | ||||||||||||
| Condensed Consolidated Statements of Income | ||||||||||||
| (in thousands, except per share amounts) | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended | ||||||||||||
| January 27, | October 31, | January 28, | ||||||||||
| 2019 | 2018 | 2018 | ||||||||||
| Revenue | $ | 124,712 | $ | 144,660 | $ | 123,446 | ||||||
| Cost of goods sold | 98,610 | 109,236 | 95,784 | |||||||||
| Gross profit | 26,102 | 35,424 | 27,662 | |||||||||
| Operating Expenses: | ||||||||||||
| Selling, general and administrative | 13,792 | 13,504 | 11,750 | |||||||||
| Research and development | 4,263 | 3,906 | 4,104 | |||||||||
| Total Operating Expenses | 18,055 | 17,410 | 15,854 | |||||||||
| Operating income | 8,047 | 18,014 | 11,808 | |||||||||
| Other income (expense), net | 1,108 | 2,307 | (4,105) | |||||||||
| Income before income taxes | 9,155 | 20,321 | 7,703 | |||||||||
| Income tax (provision) benefit | (1,387) | (3,552) | 1,778 | |||||||||
| Net income | 7,768 | 16,769 | 9,481 | |||||||||
| Net income attributable to noncontrolling interests | 2,501 | 4,282 | 3,583 | |||||||||
| Net income attributable to Photronics, Inc. shareholders | $ | 5,267 | $ | 12,487 | $ | 5,898 | ||||||
| Earnings per share: | ||||||||||||
| Basic | $ | 0.08 | $ | 0.18 | $ | 0.09 | ||||||
| Diluted | $ | 0.08 | $ | 0.18 | $ | 0.09 | ||||||
| Weighted-average number of common shares outstanding: | ||||||||||||
| Basic | 66,583 | 67,894 | 68,755 | |||||||||
| Diluted | 67,047 | 73,921 | 69,372 | |||||||||
| PHOTRONICS, INC. | |||||||||
| Condensed Consolidated Balance Sheets | |||||||||
| (in thousands) | |||||||||
| (Unaudited) | |||||||||
| January 27, | October 31, | ||||||||
| 2019 | 2018 | ||||||||
| Assets | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 232,448 | $ | 329,277 | |||||
| Accounts receivable | 131,066 | 120,515 | |||||||
| Inventories | 27,874 | 29,180 | |||||||
| Other current assets | 61,618 | 23,759 | |||||||
| Total current assets | 453,006 | 502,731 | |||||||
| Property, plant and equipment, net | 656,873 | 571,781 | |||||||
| Intangible assets, net | 11,272 | 12,368 | |||||||
| Other assets | 24,743 | 23,129 | |||||||
| Total assets | $ | 1,145,894 | $ 1,110,009 | ||||||
| Liabilities and Equity | |||||||||
| Current liabilities: | |||||||||
| Current portion of long-term debt | $ | 61,647 | $ | 57,453 | |||||
| Accounts payable and accrued liabilities | 132,880 | 133,623 | |||||||
| Total current liabilities | 194,527 | 191,076 | |||||||
| Long-term debt | 24,484 | - | |||||||
| Other liabilities | 13,713 | 14,364 | |||||||
| Photronics, Inc. shareholders' equity | 761,088 | 759,671 | |||||||
| Noncontrolling interests | 152,082 | 144,898 | |||||||
| Total equity | 913,170 | 904,569 | |||||||
| Total liabilities and equity | $ | 1,145,894 | $ | 1,110,009 | |||||
| PHOTRONICS, INC. | ||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||
| (in thousands) | ||||||||||
| (Unaudited) | ||||||||||
| Three Months Ended | ||||||||||
| January 27, | January 28, | |||||||||
| 2019 | 2018 | |||||||||
| Cash flows from operating activities: | ||||||||||
| Net income | $ | 7,768 | $ | 9,481 | ||||||
| Adjustments to reconcile net income to net cash | ||||||||||
| provided by operating activities: | ||||||||||
| Depreciation and amortization | 18,781 | 22,363 | ||||||||
| Changes in operating assets, liabilities and other | (45,835) | (982) | ||||||||
| Net cash (used in) provided by operating activities | (19,286) | 30,862 | ||||||||
| Cash flows from investing activities: | ||||||||||
| Purchases of property, plant and equipment | (106,925) | (10,995) | ||||||||
| Government incentive | 5,029 | - | ||||||||
| Other | 19 | (145) | ||||||||
| Net cash used in investing activities | (101,877) | (11,140) | ||||||||
| Cash flows from financing activities: | ||||||||||
| Contribution from noncontrolling interest | 29,394 | 11,998 | ||||||||
| Proceeds from long-term debt | 28,180 | - | ||||||||
| Repayments of long-term debt | - | (1,381) | ||||||||
| Dividends paid to noncontrolling interests | (26,102) | - | ||||||||
| Purchase of treasury stock | (10,696) | - | ||||||||
| Proceeds from share-based arrangements | 650 | 798 | ||||||||
| Other | (45) | (261) | ||||||||
| Net cash provided by financing activities | 21,381 | 11,154 | ||||||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 2,961 | 9,767 | ||||||||
| Net (decrease) increase in cash, cash equivalents, and restricted cash | (96,821) | 40,643 | ||||||||
| Cash, cash equivalents, and restricted cash, beginning of period | 331,989 | 310,936 | ||||||||
| Cash, cash equivalents, and restricted cash, end of period | $ | 235,168 | $ | 351,579 | ||||||
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