Press Release

Photronics Reports Second Quarter Fiscal 2024 Results

May 22, 2024 at 6:30 AM EDT
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BROOKFIELD, Conn., May 22, 2024 (GLOBE NEWSWIRE) -- Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in photomask technologies and solutions, today reported financial results for its second quarter of fiscal year 2024 ended April 28, 2024.

“Second quarter revenue and gross margin were in line with the first quarter as positive seasonality trends were offset by business headwinds primarily related to temporary soft demand following the Chinese New Year holiday and the impact from earthquakes in Taiwan beginning in early April,” said Frank Lee, chief executive officer. “Order rates, which typically pause during Lunar New Year, have recovered at a slower rate than we typically observe. In addition, the recent earthquakes in Taiwan caused a loss of production across both IC and FPD, resulting in an approximately $3 million revenue impact. Despite these challenges, we maintained gross margin as the global Photronics team performed well, serving our customers by quickly and efficiently recovering from the disruptions. We achieved good earnings and cash generation, further strengthening our balance sheet and positioning us to continue investing in profitable growth. We are building momentum for solid performance in 2024 and beyond.”

Second Quarter Fiscal 2024 Results

  • Revenue was $217.0 million, down 5% year-over-year and up 0.3% sequentially
  • GAAP net income attributable to Photronics, Inc. shareholders was $36.3 million, or $0.58 per diluted share, compared with $39.9 million, or $0.65 per diluted share in the second quarter 2023 and $26.2 million, or $0.42 per diluted share in the first quarter of 2024
  • Non-GAAP net income attributable to Photronics, Inc. shareholders was $28.7 million, or $0.46 per diluted share, compared with $32.9 million, or $0.54 per diluted share in the second quarter 2023 and $29.9 million, or $0.48 per diluted share in the first quarter of 2024
  • IC revenue was $160.9 million, down 4% year-over-year and up 2% sequentially
  • FPD revenue was $56.1 million, down 10% from the same quarter last year and 5% sequentially
  • Cash generated from operating activities was $76.5 million, and cash invested in organic growth through capital expenditures was $20.0 million
  • Cash balance at the end of the quarter was $539.2 million, with $20.7 million in short-term investments and $21.8 million in debt

Third Quarter Fiscal 2024 Guidance

For the third quarter of fiscal 2024, Photronics expects revenue to be between $221 million and $229 million and non-GAAP net income attributable to Photronics, Inc. shareholders to be between $0.53 and $0.59 per diluted share.

Webcast

A webcast to discuss these results is scheduled for 8:30 a.m. Eastern time on Wednesday, May 22, 2024. The call will be broadcast live and on-demand on the Events and Presentations link on the Photronics website. Analysts and investors who wish to participate in the Q&A portion of the call should click here. It is suggested that participants register fifteen minutes prior to the call's scheduled start time.

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 over 50 years.  As of October 31, 2023, the company had approximately 1,885 employees. The company operates 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” regarding our industry, our strategic position, and our financial and operating results. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results, performance or achievements to differ materially. Please refer to the documents we file with the Securities and Exchange Commission. These documents contain and identify important factors that could cause our actual results to differ materially from those contained in these forward-looking statements. These certain factors can be found in our most recent SEC filings. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We are under no duty to update any of the forward-looking statements after the date of this release to conform these statements to actual results.

Non-GAAP Financial Measures

Non-GAAP Net Income attributable to Photronics, Inc. shareholders, non-GAAP earnings per share, and Net Cash are "non-GAAP financial measures" as such term is defined by the Securities and Exchange Commission, and may differ from similarly named non-GAAP financial measures used by other companies. The attached financial supplement reconciles Photronics, Inc. financial results under GAAP to non-GAAP financial information. We believe these non-GAAP financial measures that exclude certain items are useful for analysts and investors to evaluate our future on-going performance because they enable a more meaningful comparison of our projected performance with our historical results. These non-GAAP metrics are not intended to represent funds available for our discretionary use and are not intended to represent, or be used as a substitute for, gross profit, operating income, net income, cash and cash equivalents, or cash flows from operations, as measured under GAAP. The items excluded from these non-GAAP metrics, but included in the calculation of their closest GAAP equivalent, are significant components of the condensed consolidated balance sheets and statement of cash flows and must be considered in performing a comprehensive assessment of overall financial performance. Please refer to the non-GAAP reconciliations on the following pages.

 
PHOTRONICS, INC. 
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
         
         
  Three Months Ended   Six Months Ended
  April 28,   January 28,   April 30,   April 28,   April 30,
  2024
   2024   2023
   2024
   2023
                   
Revenue $ 217,000     $ 216,334     $ 229,306     $ 433,334     $ 440,397  
                   
Cost of goods sold   137,749       137,079       140,904       274,828       275,918  
                   
Gross Profit   79,251       79,255       88,402       158,506       164,479  
                   
Operating Expenses:                  
                   
Selling, general and administrative   18,996       18,321       17,878       37,317       34,696  
                   
Research and development   4,292       3,445       3,479       7,736       6,781  
                   
Total Operating Expenses   23,288       21,766       21,357       45,053       41,477  
                   
Other operating gain   89       -       -       89       -  
                   
Operating Income   56,052       57,489       67,045       113,542       123,002  
                   
Non-operating (loss) income, net   20,534       (3,747 )     13,571       16,786       (854 )
                   
Income Before Income Tax Provision   76,586       53,742       80,616       130,328       122,148  
                   
Income tax provision   20,214       14,660       21,343       34,874       33,925  
                   
Net Income   56,372       39,082       59,273       95,454       88,223  
                   
Net income attributable to noncontrolling interests   20,121       12,902       19,344       33,023       34,308  
                   
Net income attributable to Photronics, Inc. shareholders $ 36,251     $ 26,180     $ 39,929     $ 62,431     $ 53,915  
                   
Earnings per share:                  
                   
Basic $ 0.59     $ 0.43     $ 0.65     $ 1.01     $ 0.88  
                   
Diluted $ 0.58     $ 0.42     $ 0.65     $ 1.00     $ 0.88  
                   
Weighted-average number of common shares outstanding:                  
                   
Basic   61,771       61,455       61,138       61,613       61,016  
                   
Diluted   62,409       62,283       61,507       62,346       61,489  
                   


PHOTRONICS, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
 
       
  April 28,   October 31,
  2024   2023
       
Assets      
       
Current assets:      
Cash and cash equivalents $ 539,160     $ 499,292  
Short-term investments   20,732       12,915  
Accounts receivable   197,523       194,927  
Inventories   54,257       49,963  
Other current assets   32,461       28,353  
       
Total current assets   844,133       785,450  
       
Property, plant and equipment, net   729,489       709,244  
Other assets   29,831       31,527  
       
Total assets $ 1,603,453     $ 1,526,221  
       
       
       
Liabilities and Equity      
       
Current liabilities:      
Current portion of long-term debt $ 19,318     $ 6,621  
Accounts payable and accrued liabilities   176,249       178,602  
       
Total current liabilities   195,567       185,223  
       
Long-term debt   2,456       17,998  
Other liabilities   37,401       47,391  
       
Photronics, Inc. shareholders' equity   1,034,857       975,008  
Noncontrolling interests   333,172       300,601  
Total equity   1,368,029       1,275,609  
       
Total liabilities and equity $ 1,603,453     $ 1,526,221  
       


PHOTRONICS, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
       
       
  Six Months Ended
  April 28,   April 30,
  2024   2023
       
Cash flows from operating activities:      
Net income $ 95,454     $ 88,223  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization   41,487       39,085  
Share-based compensation   6,499       3,830  
Changes in operating assets, liabilities and other   (25,446 )     (21,461 )
       
Net cash provided by operating activities   117,994       109,677  
       
Cash flows from investing activities:      
Purchases of property, plant and equipment   (63,311 )     (57,728 )
Purchases of available-for-sale debt securities   (16,551 )     (9,837 )
Proceeds from maturities of available-for-sale debt securities   9,000       4,000  
Government incentives   1,419       1,393  
Other   (6 )     (88 )
       
Net cash used in investing activities   (69,449 )     (62,260 )
       
Cash flows from financing activities:      
Repayments of debt   (2,844 )     (14,720 )
Proceeds from share-based arrangements   1,055       730  
Net settlements of restricted stock awards   (2,938 )     (1,252 )
       
Net cash used in financing activities   (4,727 )     (15,242 )
       
Effects of exchange rate changes on cash, cash equivalents, and restricted cash   (3,839 )     15,621  
       
Net increase in cash, cash equivalents, and restricted cash   39,979       47,796  
Cash, cash equivalents, and restricted cash, beginning of period   501,867       322,409  
       
Cash, cash equivalents, and restricted cash, end of period $ 541,846     $ 370,205  
       


PHOTRONICS, INC.
Reconciliation of GAAP to Non-GAAP Financial Information
(in thousands)
(Unaudited)
           
           
  Three Months ended
  April 28,   January 28,   April 30,
  2024   2024   2023
           
Reconciliation of GAAP to Non-GAAP Net Income:          
           
GAAP Net Income $ 36,251     $ 26,180     $ 39,929  
FX (gain) loss   (14,766 )     8,909       (10,718 )
Estimated tax effects of above   3,743       (2,244 )     2,823  
Estimated noncontrolling interest effects of above   3,489       (2,939 )     901  
Non-GAAP Net Income $ 28,717     $ 29,906     $ 32,935  
           
Weighted-average number of common shares outstanding - Diluted   62,409       62,283       61,507  
           
Reconciliation of GAAP to Non-GAAP EPS:          
           
GAAP diluted earnings per share $ 0.58     $ 0.42     $ 0.65  
Effects of the above adjustments $ (0.12 )   $ 0.06     $ (0.11 )
Non-GAAP diluted earnings per share $ 0.46     $ 0.48     $ 0.54  
           


PHOTRONICS, INC.
Reconciliation of GAAP to Non-GAAP Financial Information (cont.)
(in thousands)
(Unaudited)
           
           
Reconciliation of Cash and cash equivalents to Net Cash:          
  As of
  April 28,   October 31,   April 30,
  2024   2023   2023
           
Cash and cash equivalents $ 539,160     $ 499,292     $ 367,485  
           
Current portion of Long-term debt   (19,318 )     (6,621 )     (7,017 )
           
Long-term Debt   (2,456 )     (17,998 )     (21,322 )
           
Net Cash $ 517,386     $ 474,673     $ 339,146  
           

For Further Information:
Eric Rivera
Vice President & Interim CFO
203.740.5283
erivera@photronics.com


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Source: Photronics, Inc.