UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM 8-K
CURRENT REPORT
Pursuant To Section 13 Or 15(d) Of The Securities Exchange Act Of 1934
Pursuant To Section 13 Or 15(d) Of The Securities Exchange Act Of 1934
Date of report (Date of earliest event
reported) May 18,
2010
| PHOTRONICS, INC. | ||
| (Exact name of registrant as specified in its charter) |
| Connecticut | 0-15451 | 06-0854886 | ||
| (State or other jurisdiction | (Commission | (IRS Employer | ||
| of incorporation) | File Number) | Identification Number) |
| 15 Secor Road, Brookfield, CT | 06804 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant's Telephone Number, including area code (203) 775-9000
| (Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
|
o
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
|
o
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
|
o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
|
o
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02 | Results of Operations and Financial Condition | |
| On May 18. 2010, the Company issued a press release reporting second quarter fiscal 2010 results. A copy of the press release is attached to this 8-K. |
| Item 9.01 | Financial Statements and Exhibits | |||
| (d) Exhibits | ||||
| 99.1 | Press Release dated May 18, 2010 | |||
| 99.2 | Reconciliation of GAAP to Pro Forma Financial Information | |||
| 99.3 | Condensed Consolidated Statements of Operations | |||
| 99.4 | Condensed Consolidated Balance Sheets | |||
| 99.5 | Condensed Consolidated Statements of Cash Flows | |||
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| PHOTRONICS, INC. |
| (Registrant) |
| DATE: | May 19, 2010 | BY | /s/ Richelle E. Burr | |||
| Richelle E. Burr | ||||||
| Vice President, General Counsel | ||||||
| PHOTRONICS, INC. | ||||||
|
Press
Release
|
FOR FURTHER INFORMATION:
Sean T. Smith Senior Vice President Chief Financial Officer (203)775-9000 ssmith@photronics.com |
May 18, 2010
PHOTRONICS REPORTS SECOND QUARTER FINANCIAL RESULTS
Second Quarter Highlights
- Sales of $105.1 million exceed guidance of $98 - $103 million
- Non-GAAP earnings per share of $0.09 exceed guidance of $0.01 - $0.05 per share
- High-end IC photomask sales increase 32% sequentially
- Net debt decreased by $18 million sequentially
- Shanghai, China facility sold for net proceeds of $12.9 million
BROOKFIELD, Connecticut May 18, 2010 --
Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in
supplying innovative imaging technology solutions for the global electronics
industry, today reported fiscal 2010 second quarter results for the period ended
May 2, 2010.
Sales for the second quarter were $105.1
million, an increase of 26% compared to $83.2 million for the second quarter of
fiscal year 2009. Sales of semiconductor photomasks were $84.0 million, or 80.0%
of revenues, during the second quarter of fiscal 2010, and sales of flat panel
display (FPD) photomasks were $21.1 million, or 20.0% of revenues. GAAP net
income attributable to Photronics, Inc. for the second quarter of fiscal year
2010 was $7.9 million, or $0.14 earnings per diluted share, compared to net loss
attributable to Photronics, Inc. of $10.1 million, or $0.24 loss per share, for
the second quarter of fiscal 2009.
Non-GAAP net income attributable to
Photronics, Inc. for the second quarter of 2010 was $4.7 million, or $0.09 per
diluted share, as compared to non-GAAP net loss attributable to Photronics, Inc.
of $8.7 million, or $0.21 loss per share, for the second quarter of 2009. The
section below entitled “Non-GAAP Financial Measures” provides a definition and information about the use of non-GAAP
financial measures in this press release, and the attached financial supplement
reconciles non-GAAP financial information with Photronics, Inc.’s financial
results under GAAP.
Sales for the first
six months of 2010 were $203.3 million, an increase of 19% compared to $171.3
million for the first half of fiscal 2009. Sales of semiconductor photomasks
were $158.5 million, or 78% of revenues for the first six months of 2010, and
sales of FPD photomasks were $44.8 million, or 22% of revenues. GAAP net income
attributable to Photronics, Inc. for the first six months of fiscal 2010 was
$8.1 million, or $0.15 earnings per diluted share, compared to the prior year's
first six months net loss of $20.3 million, or $0.49 loss per share. Non-GAAP
net income attributable to Photronics, Inc. for the first six months of fiscal
2010 was $5.3 million, or $0.10 earnings per diluted share, as compared to
non-GAAP net loss attributable to Photronics, Inc. for the first six months of
fiscal 2009 of $17.6 million, or $0.42 loss per share.
1
In the second quarter of fiscal 2010,
Photronics completed the sale of its former integrated circuit manufacturing
facility in Shanghai, China for net proceeds of $12.9 million, and realized a
net consolidation and restructuring gain of $5.0 million during the quarter. The
Company had previously announced the closure of the facility in July 2009.
Constantine (“Deno”) Macricostas, Photronics’
chairman and chief executive officer, commented, “We exceeded our guidance range
for both sales and non-GAAP net income for the second quarter of fiscal 2010.
Second quarter sales improved 7% from the sequential first quarter of fiscal
2010 as a result of increased demand for integrated circuit photomasks for both
high-end and mainstream products. Our high-end IC growth of 161% in the second
quarter of fiscal 2010 compared to the second quarter last year, and 32%
sequentially, further validates our strategy to focus on this segment of the
market. Improved volume leverage coupled with our disciplined cost management
resulted in a significant sequential increase in non-GAAP net income from $0.6
million to $4.7 million. We are also pleased that as a result of our continued
focus on cash management, the proceeds from the sale of the Shanghai, China
facility and improved operations, our net debt decreased by $18 million during
the second quarter.”
Non-GAAP Financial Measures
Non-GAAP net income (loss)
attributable to Photronics, Inc. and non-GAAP 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 non-GAAP net income (loss)
attributable to Photronics, Inc. and non-GAAP 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 non-GAAP metrics, in particular non-GAAP net income (loss)
attributable to Photronics, Inc. and non-GAAP 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 non-GAAP 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. Non-GAAP financial
information is adjusted for the following items:
2
-
Consolidation and restructuring charges (credit) and impairment of long-lived assets are excluded because they are not a part of ongoing operations.
-
Deferred financing fees write-off is excluded because it is not a part of ongoing operations and was not anticipated when establishing forecast guidance for Q2-10.
-
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 non-GAAP 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,
May 19, 2010. The live dial-in number is 913-312-1450. 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.
11-2010
PLAB - E
3
PHOTRONICS, INC. AND
SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial Information
(in thousands, except per share data)
(Unaudited)
Reconciliation of GAAP to Non-GAAP Financial Information
(in thousands, except per share data)
(Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| May 2, | May 3, | May 2, | May 3, | |||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Reconciliation of GAAP to Non-GAAP Net Income (Loss) | ||||||||||||||||
| Attributable to Photronics, Inc. | ||||||||||||||||
| GAAP net income (loss) attributable to Photronics, Inc. | $ | 7,873 | $ | (10,072 | ) | $ | 8,086 | $ | (20,305 | ) | ||||||
| (a) Consolidation and restructuring charges (credit), | ||||||||||||||||
| and impairment of long-lived assets, net of tax | (5,029 | ) | 1,342 | (4,836 | ) | 2,677 | ||||||||||
| (b) Impact of warrants, net of tax | 860 | - | 1,080 | - | ||||||||||||
| (c) Deferred financing fees write off, net of tax | 1,011 | - | 1,011 | - | ||||||||||||
| Non-GAAP net income (loss) attributable to Photronics, Inc. | $ | 4,715 | $ | (8,730 | ) | $ | 5,341 | $ | (17,628 | ) | ||||||
| Weighted average number of diluted shares outstanding: | ||||||||||||||||
| GAAP | 65,780 | 41,775 | 54,291 | 41,749 | ||||||||||||
| Non-GAAP | 54,469 | 41,775 | 54,291 | 41,749 | ||||||||||||
| Earnings (loss) per diluted share: | ||||||||||||||||
| GAAP | $ | 0.14 | $ | (0.24 | ) | $ | 0.15 | $ | (0.49 | ) | ||||||
| Non-GAAP | $ | 0.09 | $ | (0.21 | ) | $ | 0.10 | $ | (0.42 | ) | ||||||
| (a) | Includes charges (credit) related to restructurings in China and United Kingdom and impairment of long-lived assets in the United Kingdom. | |
| (b) | Represents financing expenses related to warrants, which are recorded in other income (expense). | |
| (c) | As a result of an amendment to the revolving credit facility, represents write-off of deferred financing fees recorded in interest expense. | |
PHOTRONICS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| May 2, | May 3, | May 2, | May 3, | |||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Net sales | $ | 105,070 | $ | 83,232 | $ | 203,267 | $ | 171,275 | ||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of sales | (82,980 | ) | (71,792 | ) | (163,000 | ) | (149,275 | ) | ||||||||
| Selling, general and administrative | (10,870 | ) | (10,630 | ) | (21,018 | ) | (21,032 | ) | ||||||||
| Research and development | (3,601 | ) | (4,177 | ) | (7,556 | ) | (7,801 | ) | ||||||||
| Consolidation, restructuring and related (charges) credit | 5,029 | (406 | ) | 4,836 | (2,086 | ) | ||||||||||
| Impairment of long-lived assets | - | (1,458 | ) | - | (1,458 | ) | ||||||||||
| Operating income (loss) | 12,648 | (5,231 | ) | 16,529 | (10,377 | ) | ||||||||||
| Other expense, net | (2,183 | ) | (5,001 | ) | (4,636 | ) | (8,625 | ) | ||||||||
| Income (loss) before income taxes | 10,465 | (10,232 | ) | 11,893 | (19,002 | ) | ||||||||||
| Income tax (provision) benefit | (1,860 | ) | 76 | (2,880 | ) | (1,122 | ) | |||||||||
| Net income (loss) | 8,605 | (10,156 | ) | 9,013 | (20,124 | ) | ||||||||||
| Net (income) loss attributable to noncontrolling interests | (732 | ) | 84 | (927 | ) | (181 | ) | |||||||||
| Net income (loss) attributable to Photronics, Inc. | $ | 7,873 | $ | (10,072 | ) | $ | 8,086 | $ | (20,305 | ) | ||||||
| Earnings (loss) per share: | ||||||||||||||||
| Basic | $ | 0.15 | $ | (0.24 | ) | $ | 0.15 | $ | (0.49 | ) | ||||||
| Diluted | $ | 0.14 | $ | (0.24 | ) | $ | 0.15 | $ | (0.49 | ) | ||||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Basic | 53,405 | 41,775 | 53,253 | 41,749 | ||||||||||||
| Diluted | 65,780 | 41,775 | 54,291 | 41,749 | ||||||||||||
PHOTRONICS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
| May 2, | November 1, | |||||
| 2010 | 2009 | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 91,410 | $ | 88,539 | ||
| Accounts receivable | 81,247 | 66,920 | ||||
| Inventories | 15,861 | 14,826 | ||||
| Other current assets | 9,912 | 9,712 | ||||
| Total current assets | 198,430 | 179,997 | ||||
| Property, plant and equipment, net | 360,108 | 347,889 | ||||
| Investment in joint venture | 60,901 | 60,945 | ||||
| Intangible assets, net | 50,794 | 55,054 | ||||
| Other assets | 19,175 | 19,771 | ||||
| $ | 689,408 | $ | 663,656 | |||
| Liabilities and Equity | ||||||
| Current liabilities: | ||||||
| Current portion of long-term borrowings | $ | 11,364 | $ | 10,301 | ||
| Accounts payable and accrued liabilities | 94,017 | 80,154 | ||||
| Total current liabilities | 105,381 | 90,455 | ||||
| Long-term borrowings | 96,897 | 112,137 | ||||
| Deferred income taxes and other liabilities | 10,961 | 11,368 | ||||
| Equity | 476,169 | 449,696 | ||||
| $ | 689,408 | $ | 663,656 | |||
PHOTRONICS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
| Six Months Ended | |||||||
| May 2, | May 3, | ||||||
| 2010 | 2009 | ||||||
| Cash flows from operating activities: | |||||||
| Net income (loss) | $ | 9,013 | $ | (20,124 | ) | ||
| Adjustments to reconcile net income (loss) to net cash | |||||||
| provided by operating activities: | |||||||
| Depreciation and amortization | 45,863 | 42,027 | |||||
| Consolidation, restructuring, and related charges (credit) and impairment of long-lived assets | (5,059 | ) | 3,544 | ||||
| Changes in assets and liabilities and other | (16,054 | ) | 902 | ||||
| Net cash provided by operating activities | 33,763 | 26,349 | |||||
| Cash flows from investing activities: | |||||||
| Purchases of property, plant and equipment | (31,003 | ) | (20,375 | ) | |||
| Proceeds from sale of facility | 12,880 | - | |||||
| Increase in restricted cash | (1,250 | ) | - | ||||
| Distribution from joint venture | - | 5,000 | |||||
| Proceeds from sales of investments and other | 255 | 941 | |||||
| Net cash used in investing activities | (19,118 | ) | (14,434 | ) | |||
| Cash flows from financing activities: | |||||||
| Repayments of long-term borrowings | (40,302 | ) | (10,889 | ) | |||
| Proceeds from long-term borrowings | 26,622 | - | |||||
| Payments of deferred financing fees | (1,056 | ) | (2,249 | ) | |||
| Other | 71 | - | |||||
| Net cash used in financing activities | (14,665 | ) | (13,138 | ) | |||
| Effect of exchange rate changes on cash | 2,891 | (1,052 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | 2,871 | (2,275 | ) | ||||
| Cash and cash equivalents, beginning of period | 88,539 | 83,763 | |||||
| Cash and cash equivalents, end of period | $ | 91,410 | $ | 81,488 | |||
| Supplemental disclosure of cash flow information: | |||||||
| Change in accrual for purchases of property, plant and equipment | $ | 19,521 | $ | (14,542 | ) | ||