Market Overview

Photronics Reports First Quarter Fiscal 2020 Results

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  • First quarter 2020 revenue of $159.7 million was a record, up 2% sequentially and 28% year-over-year
  • Net income attributable to Photronics, Inc. shareholders was $10.3 million, or $0.16 per diluted share
  • Cash provided by operating activities was $30.8 million, resulting in a cash balance of $218.3 million
  • 0.9 million shares were repurchased for $11.0 million
  • Second quarter 2020 guidance: revenue between $145 and $155 million with diluted EPS between $0.11 and $0.17

BROOKFIELD, Conn., March 04, 2020 (GLOBE NEWSWIRE) -- Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in photomask technologies and solutions, today reported financial results for its fiscal 2020 first quarter ended February 2, 2020.

First quarter revenue was a record $159.7 million, 2% better than the previous quarter and 28% better than the same quarter last year. Integrated circuit (IC) revenue was $107.0 million, down 5% sequentially and up 13% compared with the first quarter of last year. Flat panel display (FPD) revenue of $52.8 million was also a record, up 21% compared with last quarter and 77% compared with the same period last year.

Net income attributable to Photronics, Inc. shareholders was $10.3 million ($0.16 per diluted share), compared with $9.7 million ($0.15 per diluted share) for the fourth quarter of 2019 and $5.3 million ($0.08 per diluted share) for the first quarter of 2019.

"We continued to perform well in the first quarter, achieving record revenues for the second consecutive quarter, as design activity remained high and we were able to extend our FPD leadership by bringing more capacity to the market," said Peter Kirlin, chief executive officer. "IC revenues were up year-over-year, but down sequentially due to seasonal softness. An uptick in operating expenses associated with ramping our two new facilities drove operating margins below fourth quarter levels. Below the operating line, a foreign exchange gain and other one-time effects resulted in earnings of $0.16 per share. We generated $30.8 million cash flow from operating activities, resulting in a cash position of $218.3 million. Despite potential short-term impact that may result from the coronavirus, we are optimistic that our long-term goals for 2020 are still on track. We continue to develop investment plans to drive further profitable growth across our operations."

Second Quarter 2020 Guidance

For the second 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, March 4, 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, including all statements related to the operation or effects of the Section 382 Rights Plan and to the use of NOLs to offset future taxable income, 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 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, 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. Photronics undertakes no obligation to release publicly any revisions to any forward-looking statements, 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  
        February 2,   October 31,   January 27,  
          2020     2019       2019  
                   
Revenue       $ 159,736   $ 156,257     $ 124,712  
                   
Cost of goods sold       125,134     118,098       98,610  
                   
Gross profit         34,602     38,159       26,102  
                   
Operating Expenses:                
                   
Selling, general and administrative   14,219     12,140       13,792  
                   
Research and development     4,080     4,543       4,263  
                   
Total Operating Expenses     18,299     16,683       18,055  
                   
Operating income       16,303     21,476       8,047  
                   
Other income (expense), net     3,697     (6,111 )     1,108  
                   
Income before income taxes     20,000     15,365       9,155  
                   
Income tax provision       9,072     2,327       1,387  
                   
Net income         10,928     13,038       7,768  
                   
Net income attributable to noncontrolling interests   628     3,338       2,501  
                   
Net income attributable to Photronics, Inc. shareholders $ 10,300   $ 9,700     $ 5,267  
                   
Earnings per share:                
                   
Basic       $ 0.16   $ 0.15     $ 0.08  
                           
                           
                   
Diluted       $ 0.16   $ 0.15     $ 0.08  
                           
                           
                   
Weighted-average number of common shares outstanding:            
                   
Basic         65,554     66,230       66,583  
                           
                           
                   
Diluted         66,449     66,862       67,047  
                           
                           
                   



PHOTRONICS, INC.  
Condensed Consolidated Balance Sheets  
(in thousands)  
(Unaudited)  
               
        February 2,   October 31,  
        2020   2019  
               
Assets              
               
Current assets:            
Cash and cash equivalents   $ 218,309   $ 206,530  
Accounts receivable     141,720     134,454  
Inventories       49,673     48,155  
Other current assets     31,202     38,388  
               
Total current assets     440,904     427,527  
               
Property, plant and equipment, net   619,935     632,441  
Intangible assets, net     6,847     7,870  
Other assets       57,774     50,827  
               
Total assets     $ 1,125,460   $ 1,118,665  
               
               
               
Liabilities and Equity          
               
Current liabilities:            
Debt       $ 17,934   $ 10,873  
Accounts payable and accrued liabilities   139,720     141,081  
               
Total current liabilities     157,654     151,954  
               
Long-term debt       36,449     41,887  
Other liabilities       18,556     13,732  
               
Photronics, Inc. shareholders' equity   770,676     769,892  
Noncontrolling interests     142,125     141,200  
Total equity       912,801     911,092  
               
Total liabilities and equity   $ 1,125,460   $ 1,118,665  
               



PHOTRONICS, INC.  
Condensed Consolidated Statements of Cash Flows  
(in thousands)  
(Unaudited)  
                 
          Three Months Ended  
          February 2,   January 27,  
            2020       2019    
                 
Cash flows from operating activities:          
Net income       $ 10,928     $ 7,768    
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization     24,626       18,781    
Share-based compensation     1,356       1,062    
Changes in operating assets, liabilities and other   (6,125 )     (46,897 )  
                 
Net cash provided by (used in) operating activities   30,785       (19,286 )  
                 
Cash flows from investing activities:          
Purchases of property, plant and equipment   (13,807 )     (106,925 )  
Government incentive       2,417       5,029    
Other           (139 )     19    
                 
Net cash used in investing activities     (11,529 )     (101,877 )  
                 
Cash flows from financing activities:          
Proceeds from long-term debt     1,140       28,180    
Purchase of treasury stock     (11,000 )     (10,696 )  
Repayments of long-term debt     (389 )     -    
Proceeds from share-based arrangements   2,886       650    
Contribution from noncontrolling interest   -       29,394    
Dividends paid to noncontrolling interests   -       (26,102 )  
Other           (248 )     (45 )  
                 
Net cash (used in) provided by financing activities   (7,611 )     21,381    
                 
Effect of exchange rate changes on cash, cash equivalents, and restricted cash   149       2,961    
                 
Net increase (decrease) in cash, cash equivalents, and restricted cash   11,794       (96,821 )  
Cash, cash equivalents, and restricted cash, beginning of period   209,291       331,989    
                 
Cash, cash equivalents, and restricted cash, end of period $ 221,085     $ 235,168    
                 
                 

For Further Information:
R. Troy Dewar, CFA
Vice President, Investor Relations
(203) 740-5610
tdewar@photronics.com

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