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Photronics, Inc.$10.36$.131.27%

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 Photronics Reports First Quarter Fiscal 2020 Results
   Wednesday, March 04, 2020 6:00:00 AM ET
  • 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 .  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 .

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.

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

Condensed Consolidated Balance Sheets 
(in thousands) 
    February 2, October 31, 
    2020 2019 
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 

Condensed Consolidated Statements of Cash Flows 
(in thousands) 
     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


Source: Photronics, Inc.

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