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Photronics, Inc.$11.73$.01.09%

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 Photronics Reports First Quarter Fiscal 2019 Results
   Thursday, February 21, 2019 6:00:00 AM ET
  • 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. (NASDAQ: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 .  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

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

Condensed Consolidated Statements of Income 
(in thousands, except per share amounts) 
    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 


Condensed Consolidated Balance Sheets 
(in thousands) 
    January 27, October 31, 
    2019 2018 
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 


Condensed Consolidated Statements of Cash Flows 
(in thousands) 
     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 




Source: Photronics, Inc.

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