Press Release

Photronics Reports Third Quarter Fiscal 2020 Results

August 27, 2020 at 6:00 AM EDT
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  • 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 


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Source: Photronics, Inc.