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Photronics Reports Third Quarter Fiscal 2020 Results

Photronics, Inc.
·8 min read
  • Third quarter 2020 revenue was $157.9 million, up 11% sequentially and 14% year-over-year

  • Net income attributable to Photronics, Inc. shareholders was $10.8 million, or $0.17 per diluted share

  • Cash provided by operating activities was $16.9 million, resulting in a cash balance of $260.6 million

  • Fourth quarter 2020 guidance: revenue between $148 and $158 million with diluted EPS between $0.12 and $0.19

BROOKFIELD, Conn., Aug. 27, 2020 (GLOBE NEWSWIRE) -- Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in photomask technologies and solutions, today reported financial results for its fiscal 2020 third quarter ended August 2, 2020.

Third quarter revenue was $157.9 million, 11% better than the previous quarter and 14% better than the same quarter last year. Integrated circuit (IC) revenue was $108.7 million, up 12% sequentially and 8% compared with the third quarter of last year. Flat panel display (FPD) revenue was $49.2 million, up 7% compared with last quarter and 30% compared with the same period last year.

Net income attributable to Photronics, Inc. shareholders was $10.8 million ($0.17 per diluted share), compared with $6.3 million ($0.10 per diluted share) for the second quarter of 2020 and $6.3 million ($0.10 per diluted share) for the third quarter of 2019.

"Customer demand improved this quarter, and we achieved double-digit revenue growth rates compared with last quarter and last year due to our diverse market position and technology leadership,” said Peter Kirlin, chief executive officer. “China demand recovered for both IC and FPD, with total revenue of product shipped to China increasing 10% compared with the previous quarter. From a market perspective, mainstream IC and high-end FPD were notable areas of strength. We were able to leverage the growth in revenues to expand profit margins, while also managing expenses, resulting in 12.6% operating margin and $0.17 earnings per diluted share. Our cash balance grew to $260.6 million, providing us with financial strength and flexibility as we look to continue our strategic growth investments. We are well placed to pursue attractive organic growth opportunities and expand our leadership position.”

Fourth Quarter 2020 Guidance

For the fourth quarter of 2020, Photronics expects revenue to be between $148 million and $158 million, and net income attributable to Photronics, Inc. shareholders to be between $0.12 and $0.19 per diluted share.

Conference Call

A conference call to discuss these results is scheduled for 8:30 a.m. Eastern time on Thursday, August 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

Nine Months Ended

August 2,

May 3,

July 28,

August 2,

July 28,

2020

2020

2019

2020

2019

Revenue

$

157,895

$

142,774

$

138,112

$

460,405

$

394,404

Cost of goods sold

120,161

112,341

107,542

357,636

311,721

Gross profit

37,734

30,433

30,570

102,769

82,683

Operating Expenses:

Selling, general and administrative

13,306

13,267

13,124

40,792

40,186

Research and development

4,492

4,462

4,046

13,034

11,852

Total Operating Expenses

17,798

17,729

17,170

53,826

52,038

Operating income

19,936

12,704

13,400

48,943

30,645

Other (expense) income, net

(2,135

)

(951

)

(348

)

610

4,692

Income before income taxes

17,801

11,753

13,052

49,553

35,337

Income tax provision

4,937

3,781

3,218

17,789

7,883

Net income

12,864

7,972

9,834

31,764

27,454

Net income attributable to noncontrolling interests

2,088

1,688

3,487

4,404

7,361

Net income attributable to Photronics, Inc. shareholders

$

10,776

$

6,284

$

6,347

$

27,360

$

20,093

Earnings per share:

Basic

$

0.17

$

0.10

$

0.10

$

0.42

$

0.30

Diluted

$

0.17

$

0.10

$

0.10

$

0.42

$

0.30

Weighted-average number of common shares outstanding:

Basic

64,780

64,937

66,313

65,090

66,386

Diluted

65,247

65,417

66,570

65,704

69,919



PHOTRONICS, INC.

Condensed Consolidated Balance Sheets

(in thousands)

(Unaudited)

August 2,

October 31,

2020

2019

Assets

Current assets:

Cash and cash equivalents

$

260,597

$

206,530

Accounts receivable

146,843

134,454

Inventories

54,733

48,155

Other current assets

48,468

38,388

Total current assets

510,641

427,527

Property, plant and equipment, net

623,247

632,441

Intangible assets, net

4,535

7,870

Other assets

57,419

50,827

Total assets

$

1,195,842

$

1,118,665

Liabilities and Equity

Current liabilities:

Debt

$

14,683

$

10,873

Accounts payable and accrued liabilities

160,626

141,081

Total current liabilities

175,309

151,954

Long-term debt

38,183

41,887

Other liabilities

25,665

13,732

Photronics, Inc. shareholders' equity

790,242

769,892

Noncontrolling interests

166,443

141,200

Total equity

956,685

911,092

Total liabilities and equity

$

1,195,842

$

1,118,665



PHOTRONICS, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

Nine Months Ended

August 2,

July 28,

2020

2019

Cash flows from operating activities:

Net income

$

31,764

$

27,454

Adjustments to reconcile net income to net cash

provided by operating activities:

Depreciation and amortization

71,120

60,387

Share-based compensation

3,773

2,871

Changes in operating assets, liabilities and other

(28,393

)

(67,208

)

Net cash provided by operating activities

78,264

23,504

Cash flows from investing activities:

Purchases of property, plant and equipment

(36,693

)

(160,149

)

Government incentive

5,263

17,694

Other

(139

)

(24

)

Net cash used in investing activities

(31,569

)

(142,479

)

Cash flows from financing activities:

Proceeds from long-term debt

5,699

53,227

Contribution from noncontrolling interest

17,596

29,394

Purchase of treasury stock

(16,894

)

(10,696

)

Repayments of debt

(5,929

)

(61,319

)

Proceeds from share-based arrangements

3,869

1,314

Dividends paid to noncontrolling interests

-

(26,102

)

Other

(248

)

(92

)

Net cash provided by (used in) financing activities

4,093

(14,274

)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

3,486

1,206

Net increase (decrease) in cash, cash equivalents, and restricted cash

54,274

(132,043

)

Cash, cash equivalents, and restricted cash, beginning of period

209,291

331,989

Cash, cash equivalents, and restricted cash, end of period

$

263,565

$

199,946

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