Photronics Reports First Quarter Results
First Quarter Highlights
- Sales of $98.2 million versus guidance of $91 - $96 million.
- Pro forma earnings per share of $0.01 versus guidance of $(0.08) - $(0.03) loss per share
- High-end IC photomask sales increased 22% sequentially
- High-end and FPD photomask sales increased 13% sequentially
BROOKFIELD, Conn.--(BUSINESS WIRE)--Photronics, Inc. (Nasdaq:PLAB - News), a worldwide leader in supplying innovative imaging technology solutions for the global electronics industry, today reported fiscal 2010 first quarter results for the period ended January 31, 2010.
Sales for the first quarter were $98.2 million, an increase of 12% compared to $88.0 million for the first quarter of fiscal year 2009. Sales of semiconductor photomasks accounted for $74.5 million, or 75.9% of revenues during the first quarter of fiscal 2010, and sales of flat panel display (FPD) photomasks accounted for $23.7 million, or 24.1% of revenues. GAAP net income attributable to Photronics, Inc. for the first quarter of fiscal year 2010 was $0.2 million, or $0.00 earnings per diluted share, compared to net loss attributable to Photronics, Inc. of $10.2 million, or $0.25 loss per share for the first quarter of fiscal 2009.
Pro forma net income attributable to Photronics, Inc. for the first quarter of 2010 was $0.6 million or $0.01 earnings per diluted share as compared to pro forma net loss attributable to Photronics, Inc. of $8.9 million or $0.21 loss per share for the first quarter of 2009. The section below entitled "Non-GAAP Financial Measures" provides a definition and information about the use of pro forma financial measures in this press release and the attached financial supplement reconciles pro forma financial information with Photronics, Inc.'s financial results under GAAP.
Constantine ("Deno") Macricostas, Photronics' chairman and chief executive officer commented, "First quarter sales improved sequentially in what is normally a slow period seasonally and marked the sixth consecutive quarterly increase of high-end integrated circuit photomask sales. Improvement in sales of both high-end flat panel display and integrated circuit photomasks confirms the continued success of our market penetration strategy," concluded Macricostas.
Non-GAAP Financial Measures
Pro forma net income (loss) attributable to Photronics, Inc. and pro forma earnings (loss) per share are "non-GAAP financial measures," as such term is defined by the Securities and Exchange Commission, and may differ from non-GAAP financial measures used by other companies. Photronics, Inc. believes that pro forma net income (loss) attributable to Photronics, Inc. and pro forma earnings (loss) per share that exclude certain non-cash or non-recurring income or expense items are useful for analysts and investors to evaluate Photronics, Inc.'s future on-going performance because they enable a more meaningful comparison of Photronics, Inc.'s projected earnings and performance with its historical results from prior periods. These pro forma metrics, in particular pro forma net income (loss) attributable to Photronics, Inc. and pro forma earnings (loss) per share, are not intended to represent funds available for Photronics, Inc.'s discretionary use and are not intended to represent or be used as a substitute for operating income (loss), net income (loss) or cash flows from operations data as measured under GAAP. The items excluded from these pro forma metrics, but included in the calculation of their closest GAAP equivalent, are significant components of consolidated statements of operations and must be considered in performing a comprehensive assessment of overall financial performance. Pro forma financial information is adjusted for the following items:
- Consolidation and restructuring charges are excluded because they are not a part of ongoing operations
- Impact of financing expenses related to warrants are excluded because they do not affect cash earnings
The presentation of this financial information should not be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles in the United States. The attached financial supplement reconciles pro forma financial information with Photronics, Inc.'s financial results under GAAP.
A conference call with investors and the media to discuss these results is scheduled for 8:30 a.m. Eastern time on Wednesday, February 17, 2010. The live dial-in number is 913-312-0651. The call can also be accessed by logging onto Photronics' web site at www.photronics.com.
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 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 as discussed in filings with the U. S. Securities and Exchange Commission (SEC). These risks and uncertainties include, but are not limited to, economic, competitive, legal, governmental, and technological factors. Accordingly, there is no assurance that the Company's expectations will be realized. The Company assumes no obligation to provide revisions to any forward-looking statements.
05-2010
PLAB - E
PHOTRONICS, INC. AND SUBSIDIARIES | |||||||||||
Condensed Consolidated Statements of Operations | |||||||||||
| (in thousands, except per share amounts) | |||||||||||
| (Unaudited) | |||||||||||
| Three Months Ended | |||||||||||
| January 31, | February 1, | ||||||||||
| 2010 | 2009 | ||||||||||
| Net sales | $ | 98,197 | $ | 88,042 | |||||||
| Costs and expenses: | |||||||||||
| Cost of sales | (80,020 | ) | (77,483 | ) | |||||||
| Selling, general and administrative | (10,149 | ) | (10,402 | ) | |||||||
| Research and development | (3,954 | ) | (3,624 | ) | |||||||
| Consolidation, restructuring and related charges | (193 | ) | (1,680 | ) | |||||||
| Operating income (loss) | 3,881 | (5,147 | ) | ||||||||
| Other income (expense), net | (2,453 | ) | (3,623 | ) | |||||||
| Income (loss) before income taxes | 1,428 | (8,770 | ) | ||||||||
| Income tax provision | (1,020 | ) | (1,197 | ) | |||||||
| Net income (loss) | 408 | (9,967 | ) | ||||||||
| Net income attributable to noncontrolling interests | (195 | ) | (266 | ) | |||||||
| Net income (loss) attributable to Photronics, Inc. | $ | 213 | $ | (10,233 | ) | ||||||
| Earnings (loss) per share: | |||||||||||
| Basic | $ | 0.00 | $ | (0.25 | ) | ||||||
| Diluted | $ | 0.00 | $ | (0.25 | ) | ||||||
| Weighted average number of common shares | |||||||||||
| outstanding: | |||||||||||
| Basic | 53,102 | 41,723 | |||||||||
| Diluted | 54,824 | 41,723 | |||||||||
PHOTRONICS, INC. AND SUBSIDIARIES | |||||||||
Condensed Consolidated Balance Sheets | |||||||||
| (in thousands) | |||||||||
| (Unaudited) | |||||||||
| January 31, | November 1, | ||||||||
| 2010 | 2009 | ||||||||
Assets | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 84,401 | $ | 88,539 | |||||
| Accounts receivable | 72,860 | 66,920 | |||||||
| Inventories | 15,806 | 14,826 | |||||||
| Other current assets | 11,407 | 9,712 | |||||||
| Total current assets | 184,474 | 179,997 | |||||||
| Property, plant and equipment, net | 354,401 | 347,889 | |||||||
| Investment in joint venture | 60,923 | 60,945 | |||||||
| Intangibles, net | 53,510 | 55,054 | |||||||
| Other assets | 19,149 | 19,771 | |||||||
| $ | 672,457 | $ | 663,656 | ||||||
Liabilities and Equity | |||||||||
| Current liabilities: | |||||||||
| Current portion of long-term borrowings | $ | 11,376 | $ | 10,301 | |||||
| Accounts payable and accrued liabilities | 84,414 | 80,154 | |||||||
| Total current liabilities | 95,790 | 90,455 | |||||||
| Long-term borrowings | 107,548 | 112,137 | |||||||
| Deferred income taxes and other liabilities | 10,680 | 11,368 | |||||||
| Equity | 458,439 | 449,696 | |||||||
| $ | 672,457 | $ | 663,656 | ||||||
PHOTRONICS, INC. AND SUBSIDIARIES | |||||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||||
| (in thousands) | |||||||||||
| (Unaudited) | |||||||||||
| Three Months Ended | |||||||||||
| January 31, | February 1, | ||||||||||
| 2010 | 2009 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income (loss) | $ | 408 | $ | (9,967 | ) | ||||||
| Adjustments to reconcile net income (loss) to net cash | |||||||||||
| provided by operating activities: | |||||||||||
| Depreciation and amortization | 22,424 | 21,725 | |||||||||
| Consolidation, restructuring and related charges | - | 1,680 | |||||||||
| Changes in assets and liabilities and other | (6,417 | ) | (5,449 | ) | |||||||
| Net cash provided by operating activities | 16,415 | 7,989 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Purchases of property, plant and equipment | (21,457 | ) | (12,789 | ) | |||||||
| Deposit on sale of facility | 4,190 | - | |||||||||
| Increase in restricted cash | (1,250 | ) | - | ||||||||
| Proceeds from sales of investments and other | 43 | 858 | |||||||||
| Net cash used in investing activities | (18,474 | ) | (11,931 | ) | |||||||
| Cash flows from financing activities: | |||||||||||
| Repayments of long-term borrowings | (7,250 | ) | (3,607 | ) | |||||||
| Proceeds from customer advance | 3,822 | - | |||||||||
| Payments of deferred financing fees | - | (1,913 | ) | ||||||||
| Other | 30 | - | |||||||||
| Net cash used in financing activities | (3,398 | ) | (5,520 | ) | |||||||
| Effect of exchange rate changes on cash | 1,319 | (2,792 | ) | ||||||||
| Net decrease in cash and cash equivalents | (4,138 | ) | (12,254 | ) | |||||||
| Cash and cash equivalents, beginning of period | 88,539 | 83,763 | |||||||||
| Cash and cash equivalents, end of period | $ | 84,401 | $ | 71,509 | |||||||
| Supplemental disclosure of cash flow information: | |||||||||||
| Change in accrual for purchases of property, plant and equipment | $ | (227 | ) | $ | (11,204 | ) | |||||
PHOTRONICS, INC. AND SUBSIDIARIES | ||||||
Reconciliation of GAAP to Pro Forma Financial Information | ||||||
| (in thousands, except per share data) | ||||||
| (Unaudited) | ||||||
| Three Months Ended | ||||||
| January 31, | February 1, | |||||
| 2010 | 2009 | |||||
Reconciliation of GAAP to Pro Forma Net Income (Loss) | ||||||
| GAAP net income (loss) attributable to Photronics, Inc. | $ | 213 | $ | (10,233 | ) | |
| (a) Consolidation and restructuring charges, net of tax | 193 | 1,335 | ||||
| (b) Impact of warrants, net of tax | 220 | - | ||||
| Pro forma net income (loss) attributable to Photronics, Inc. | $ | 626 | $ | (8,898 | ) | |
| Weighted average number of diluted shares outstanding | 54,824 | 41,723 | ||||
| Earnings (loss) per diluted share | ||||||
| GAAP | $ | - | $ | (0.25 | ) | |
| Pro forma | $ | 0.01 | $ | (0.21 | ) | |
| (a) Includes charges related to restructurings in China and United Kingdom. | ||||||
| (b) Represents financing expenses related to warrants, which are recorded in other income (expense). | ||||||
Contact:
Photronics, Inc.
Sean T. Smith, 203-775-9000
Senior Vice President
Chief Financial Officer
ssmith@photronics.com