Market Overview

Photronics Reports Second Quarter Fiscal 2020 Results

Share:
  • 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. (NASDAQ: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

Primary Logo

View Comments and Join the Discussion!
 
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com