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Photronics Reports First Quarter Fiscal 2018 Results

BROOKFIELD, CT--(Marketwired - February 14, 2018) -

  • First quarter 2018 revenue was $123.4 million, up 2% sequentially and 12% year-over-year
  • Net income attributable to Photronics, Inc. shareholders was $5.9 million ($0.09 per diluted share)
  • Balance sheet strengthened as cash balance increased $40.5 million to $348.6 million
  • Second quarter 2018 guidance: revenue between $120 and $128 million with diluted EPS between $0.04 and $0.09

Photronics, Inc. (PLAB), a worldwide leader in supplying innovative imaging technology solutions for the global electronics industry, today reported financial results for its fiscal 2018 first quarter ended January 28, 2018.

First quarter revenue was $123.4 million, increases of 2% sequentially and 12% compared with same quarter prior year. Integrated circuit (IC) revenue was $95.7 million, essentially flat sequentially and up 11% compared with last year. Flat panel display (FPD) revenue was $27.8 million, up 11% sequentially and 19% compared with last year.

Net income attributable to Photronics, Inc. shareholders was $5.9 million ($0.09 per diluted share), compared with $5.4 million ($0.08 per diluted share) for the fourth quarter of 2017 and $1.9 million ($0.03 per diluted share) for the first quarter of 2017.

"We achieved another quarter of solid revenue growth, despite seasonal headwinds, due to continued strength in high-end IC demand, and overall improvement in FPD," said Peter Kirlin, chief executive officer. "High-end IC improved primarily due to logic demand from Asia foundry customers, where tape-out activity remains robust. FPD demand for new LCD panels was strong as customers released new designs to improve factory utilization. Operating expenses were slightly higher sequentially as adjustments recognized in the previous quarter did not recur; operating margin was 9.6% compared with 10.3% in the previous quarter. Below the operating income line, a foreign exchange loss of $2.7 million, net of tax and non-controlling interest, and tax benefits of $4.2 million resulted in net income of $5.9 million. Our balance sheet strengthened during the quarter, with cash balance growing to $348.6 million on strong operating cash flow and the initial contribution from our partner for the PDMCX joint venture in China."

Second Quarter 2018 Guidance

Kirlin continued, "For the second quarter of 2018, we expect revenue to be between $120 million and $128 million, and net income attributable to Photronics, Inc. shareholders to be between $0.04 and $0.09 per diluted share."

Conference Call

A conference call to discuss these results is scheduled for 8:30 a.m. Eastern time on Wednesday, February 14, 2018. 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.

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, 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.

   
   
PHOTRONICS, INC. AND SUBSIDIARIES  
Condensed Consolidated Statements of Income  
(in thousands, except per share amounts)  
(Unaudited)  
   
   
    Three Months Ended  
    January 28,     October 29,     January 29,  
    2018     2017     2017  
                         
Revenue   $ 123,446     $ 120,971     $ 109,831  
                         
Cost of goods sold     (95,784 )     (94,529 )     (86,832 )
                         
    Gross profit     27,662       26,442       22,999  
                         
Operating Expenses:                        
                         
  Selling, general and administrative     (11,750 )     (10,182 )     (10,871 )
                         
  Research and development     (4,104 )     (3,838 )     (3,485 )
                         
Total Operating Expenses     (15,854 )     (14,020 )     (14,356 )
                         
    Operating income     11,808       12,422       8,643  
                         
Other (expense) income, net     (4,105 )     536       (2,083 )
                         
    Income before income taxes     7,703       12,958       6,560  
                         
Income tax benefit (provision)     1,778       (2,462 )     (2,050 )
                         
    Net income     9,481       10,496       4,510  
                         
Net income attributable to noncontrolling interests     (3,583 )     (5,110 )     (2,564 )
                         
Net income attributable to Photronics, Inc. shareholders   $ 5,898     $ 5,386     $ 1,946  
                         
Earnings per share:                        
                         
    Basic   $ 0.09     $ 0.08     $ 0.03  
                         
    Diluted   $ 0.09     $ 0.08     $ 0.03  
                         
Weighted-average number of common shares outstanding:                        
                         
    Basic     68,755       68,615       68,176  
                         
    Diluted     69,372       69,218       69,169  
                             
 
 
PHOTRONICS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
 
         
    January 28,   October 29,
    2018   2017
             
Assets            
             
Current assets:            
  Cash and cash equivalents   $ 348,560   $ 308,021
  Accounts receivable     104,638     105,320
  Inventories     26,997     23,703
  Other current assets     12,162     12,080
               
    Total current assets     492,357     449,124
             
Property, plant and equipment, net     548,307     535,197
Intangible assets, net     16,224     17,122
Other assets     24,568     19,351
             
Total assets   $ 1,081,456   $ 1,020,794
             
             
             
Liabilities and Equity            
             
Current liabilities:            
  Current portion of long-term borrowings   $ 3,259   $ 4,639
  Accounts payable and accrued liabilities     84,814     77,137
               
    Total current liabilities     88,073     81,776
             
Long-term borrowings     57,366     57,337
Other liabilities     17,570     16,386
             
Photronics, Inc. shareholders' equity     777,433     744,564
Noncontrolling interests     141,014     120,731
    Total equity     918,447     865,295
             
Total liabilities and equity   $ 1,081,456   $ 1,020,794
             
   
   
PHOTRONICS, INC. AND SUBSIDIARIES  
Condensed Consolidated Statements of Cash Flows  
(in thousands)  
(Unaudited)  
             
             
    Three Months Ended  
    January 28,     January 29,  
    2018     2017  
                 
Cash flows from operating activities:                
  Net income   $ 9,481     $ 4,510  
  Adjustments to reconcile net income to net cash provided by operating activities:                
    Depreciation and amortization     22,363       20,896  
    Changes in operating assets, liabilities and other     (982 )     6,133  
                 
Net cash provided by operating activities     30,862       31,539  
                 
Cash flows from investing activities:                
    Purchases of property, plant and equipment     (10,995 )     (9,600 )
    Acquisition of business     -       (5,400 )
    Other     (134 )     (396 )
                 
Net cash used in investing activities     (11,129 )     (15,396 )
                 
Cash flows from financing activities:                
    Repayments of long-term borrowings     (1,381 )     (1,343 )
    Contribution from noncontrolling interest     11,998       -  
    Proceeds from share-based arrangements     798       1,113  
    Other     (261 )     (16 )
                 
Net cash provided by (used in) financing activities     11,154       (246 )
                 
Effect of exchange rate changes on cash     9,652       (275 )
                 
Net increase in cash and cash equivalents     40,539       15,622  
Cash and cash equivalents, beginning of period     308,021       314,074  
                 
Cash and cash equivalents, end of period   $ 348,560     $ 329,696