Press Release

Photronics Reports Third Quarter Fiscal 2024 Results and Share Repurchase Authorization

August 29, 2024 at 6:30 AM EDT

BROOKFIELD, Conn., Aug. 29, 2024 (GLOBE NEWSWIRE) -- Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in photomask technologies and solutions, today reported financial results for its third quarter of fiscal year 2024 ended July 28, 2024.

“Market softness in some segments during the quarter impacted photomask demand, reducing both IC and FPD revenue,” said Frank Lee, chief executive officer. “The photomask demand recovery that started to take shape early in the third quarter slowed during the period due to select regional and end-use customer order patterns. This was combined with broader customer focus on rising semiconductor channel inventory that limited chip design activity through the quarter. In response, we tuned our mix and sales strategy, allowing us to optimize margins despite lower demand. Megatrends such as AI, supply chain regionalization, and edge computing are driving secular photomask value and demand, supporting our optimistic view of the long-term global photomask industry outlook. Our leadership position gives us confidence we can drive future margins while at the same time execute smart investment and deployment strategies that can deliver top line growth and shareholder value.”

Third Quarter Fiscal 2024 Results

  • Revenue was $211.0 million, down 6% year-over-year and 3% sequentially.
  • GAAP Net income attributable to Photronics, Inc. shareholders was $34.4 million, or $0.55 per diluted share, compared with $27.0 million, or $0.44 per diluted share in the third quarter of 2023 and $36.3 million, or $0.58 per diluted share in the second quarter of 2024.
  • Non-GAAP Net income attributable to Photronics, Inc. shareholders was $32.0 million, or $0.51 per diluted share, compared with $31.6 million, or $0.51 per diluted share in the third quarter of 2023 and $28.7 million, or $0.46 per diluted share in the second quarter of 2024.
  • IC revenue was $155.9 million, down 4% year-over-year and 3% sequentially.
  • FPD revenue was $55.1 million, down 10% from the same quarter last year and 2% sequentially.
  • Cash generated from operating activities was $75.1 million, and cash invested in organic growth through capital expenditures was $24.4 million.
  • Cash and Short-term investments at the end of the quarter were $606.4 million, and Debt was $20.1 million.

Share Repurchase

In addition, the Board of Directors has authorized an increase of the Company’s existing share repurchase program from the $31.7 million remaining up to a total of $100 million of its common stock. Any purchases will occur pursuant to a repurchase plan under SEC Rule 10b5-1.

“This announcement is a testament to our ability to generate strong cash flows and maintain a solid balance sheet over various economic conditions,” continued Dr. Lee. “We are taking this step to demonstrate our commitment to enhancing shareholder returns by returning cash to our shareholders and investing in the value we see in our equity.”

This authorization does not obligate the Company to repurchase any dollar amount or number of shares of common stock. The repurchase program may be suspended or discontinued at any time.

Fourth Quarter Fiscal 2024 Guidance

For the fourth quarter of fiscal 2024, Photronics expects Revenue to be between $213 million and $221 million and non-GAAP Net income attributable to Photronics, Inc. shareholders to be between $0.48 and $0.54 per diluted share.

Webcast

A webcast to discuss these results is scheduled for 8:30 a.m. Eastern time on Thursday, August 29, 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 and non-GAAP earnings per share are "non-GAAP financial measures" as such term is defined by Regulation G of 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 a measure of consolidated operating results under U.S. GAAP and should not be considered as an alternative to Net income (loss), Net income (loss) per share, or any other measure of consolidated results under U.S. 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 statement of income and must be considered in performing a comprehensive assessment of overall financial performance. Please refer to the non-GAAP reconciliations below.  


PHOTRONICS, INC.
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
         
         
    Three Months Ended   Nine Months Ended
    July 28,   April 28,   July 30,   July 28,   July 30,
    2024   2024   2023
  2024   2023
                     
Revenue   $ 210,984   $ 217,000   $ 224,206     $ 644,318   $ 664,603  
                     
Cost of goods sold     135,846     137,749     137,405       410,674     413,323  
                     
Gross Profit     75,138     79,251     86,801       233,644     251,280  
                     
Operating Expenses:                    
                     
Selling, general and administrative   19,436     18,996     18,032       56,753     52,728  
                     
Research and development     3,555     4,292     3,505       11,291     10,287  
                     
Total Operating Expenses     22,991     23,288     21,537       68,044     63,015  
                     
Other operating gain     1     89     -       90     -  
                     
Operating Income     52,148     56,052     65,264       165,690     188,265  
                     
Non-operating (loss) income, net   10,145     20,534     (911 )     26,931     (1,764 )
                     
Income Before Income Tax Provision   62,293     76,586     64,353       192,621     186,501  
                     
Income tax provision     14,124     20,214     16,098       48,998     50,023  
                     
Net Income     48,169     56,372     48,255       143,623     136,478  
                     
Net income attributable to noncontrolling interests   13,781     20,121     21,296       46,804     55,604  
                     
Net income attributable to Photronics, Inc. shareholders $ 34,388   $ 36,251   $ 26,959     $ 96,819   $ 80,874  
                     
Earnings per share:                    
                     
Basic   $ 0.56   $ 0.59   $ 0.44     $ 1.57   $ 1.32  
                     
Diluted   $ 0.55   $ 0.58   $ 0.44     $ 1.55   $ 1.31  
                     
Weighted-average number of common shares outstanding:                  
                     
Basic     61,815     61,771     61,233       61,681     61,089  
                     
Diluted     62,414     62,409     61,974       62,369     61,650  
                     


PHOTRONICS, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
 
           
    July 28,   October 31,  
    2024   2023  
           
Assets          
           
Current assets:          
Cash and cash equivalents   $ 537,331   $ 499,292  
Short-term investments     69,046     12,915  
Accounts receivable     199,926     194,927  
Inventories     55,472     49,963  
Other current assets     30,865     28,353  
           
Total current assets     892,640     785,450  
           
Property, plant and equipment, net   722,638     709,244  
Other assets     29,823     31,527  
           
Total assets   $ 1,645,101   $ 1,526,221  
           
           
           
Liabilities and Equity          
           
Current liabilities:          
Current portion of long-term debt $ 20,090   $ 6,621  
Accounts payable and accrued liabilities   171,036     178,602  
           
Total current liabilities     191,126     185,223  
           
Long-term debt     28     17,998  
Other liabilities     40,518     47,391  
           
Equity:          
Photronics, Inc. shareholders' equity   1,067,994     975,008  
Noncontrolling interests     345,435     300,601  
Total equity     1,413,429     1,275,609  
           
Total liabilities and equity   $ 1,645,101   $ 1,526,221  
           


PHOTRONICS, INC.  
Condensed Consolidated Statements of Cash Flows  
(in thousands)  
(Unaudited)  
           
           
    Nine Months Ended  
    July 28,   July 30,  
    2024
  2023
 
           
Cash flows from operating activities:          
Net income   $ 143,623     $ 136,478    
Adjustments to reconcile net income to net cash        
provided by operating activities:          
Depreciation and amortization     61,613       59,523    
Share-based compensation     9,841       5,874    
Changes in operating assets, liabilities and other   (22,003 )     (6,319 )  
           
Net cash provided by operating activities     193,074       195,556    
           
Cash flows from investing activities:          
Purchases of property, plant and equipment   (87,733 )     (78,813 )  
Purchases of short-term investments     (100,558 )     (9,837 )  
Proceeds from maturities of short-term investments   44,696       22,500    
Government incentives     1,541       2,033    
Other     (4 )     (116 )  
           
Net cash used in investing activities     (142,058 )     (64,233 )  
           
Cash flows from financing activities:          
Repayments of debt     (4,500 )     (16,351 )  
Proceeds from share-based arrangements   1,074       1,241    
Net settlements of restricted stock awards   (3,002 )     (1,292 )  
           
Net cash used in financing activities     (6,428 )     (16,402 )  
           
Effects of exchange rate changes on cash, cash equivalents, and restricted cash   (6,454 )     13,813    
           
Net increase in cash, cash equivalents, and restricted cash   38,134       128,734    
Cash, cash equivalents, and restricted cash, beginning of period   501,867       322,409    
           
Cash, cash equivalents, and restricted cash, end of period $ 540,001     $ 451,143    
           


PHOTRONICS, INC.
Reconciliation of GAAP Net income attributable to Photronics, Inc. shareholders to Non-GAAP Net income
(in thousands)
(Unaudited)
             
             
  Three Months ended
  July 28,   April 28,   July 30,  
  2024
  2024
  2023
 
             
             
GAAP Net income attributable to Photronics, Inc. shareholders $ 34,388     $ 36,251     $ 26,959    
FX (gain) loss   (4,068 )     (14,766 )     4,543    
Estimated tax effects of FX (gain) loss   914       3,743       (1,193 )  
Estimated noncontrolling interest effects of above   681       3,489       1,328    
Non-GAAP Net income attributable to Photronics, Inc. shareholders $ 31,915     $ 28,717     $ 31,637    
             
Weighted-average number of common shares outstanding - Diluted   62,414       62,409       61,974    
             
             
GAAP Diluted earnings per share $ 0.55     $ 0.58     $ 0.44    
Effects of non-GAAP adjustments above   (0.04 )     (0.12 )     0.07    
Non-GAAP Diluted earnings per share $ 0.51     $ 0.46     $ 0.51    
             

For Further Information:
Eric Rivera
Chief Financial Officer
203.740.5301
investorrelations@photronics.com


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Source: Photronics, Inc.