PHOTRONICS, INC.
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||
(Exact name of registrant as specified in its charter)
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Connecticut
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0-15451
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06-0854886
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification Number)
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15 Secor Road, Brookfield, CT
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06804
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(Address of Principal Executive Offices)
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(Zip Code)
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(Former name or former address, if changed since last report)
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☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02
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Results of Operations and Financial Condition
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Item 9.01.
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Financial Statements and Exhibits
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(d)
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Exhibits
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Press Release dated May 18, 2016
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|
Condensed Consolidated Statements of Income
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Condensed Consolidated Balance Sheets
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Condensed Consolidated Statements of Cash Flows
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Reconciliation of GAAP to Non-GAAP Financial Information
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Reconciliation of GAAP Net Income to Non-GAAP EBITDA
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PHOTRONICS, INC.
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(Registrant)
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DATE: May 18, 2016
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BY
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/s/ Richelle E. Burr
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Richelle E. Burr
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Vice President, General Counsel
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PHOTRONICS, INC.
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For Further Information:
R. Troy Dewar, CFA
Director, Investor Relations
(203) 740-5610
tdewar@photronics.com
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Press Release
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• | Second quarter sales were $122.9 million, down 3% compared with last year |
• | Net income of $11.9 million ($0.16 per diluted share) includes net, non-recurring tax benefit of $3.0 million ($0.03 per diluted share) |
• | FPD sales increased 36% year-over-year, with high-end FPD sales up 66%; investing $40 million through 2017 in additional FPD capacity and capability |
• | Reduced total debt $60 million and grew net cash $23 million sequentially, providing additional financial strength and flexibility to fund growth |
• | Third quarter 2016 guidance: sales between $118 and $128 million; diluted EPS between $0.10 and $0.18 |
· | Net, non-recurring tax benefit related to the recognition of certain tax benefits in Taiwan |
· | Non-recurring net gain on sale of investment in fiscal 2016 |
· | Financing expenses in fiscal 2015 related to the exchange of convertible senior notes |
Three Months Ended
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Six Months Ended
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|||||||||||||||
May 1,
2016
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May 3,
2015
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May 1,
2016
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May 3,
2015
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|||||||||||||
Net sales
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$
|
122,923
|
$
|
127,309
|
$
|
252,879
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$
|
250,814
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||||||||
Costs and expenses:
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||||||||||||||||
Cost of sales
|
(91,636
|
)
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(94,214
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)
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(186,156
|
)
|
(189,535
|
)
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||||||||
Selling, general and administrative
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(11,024
|
)
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(12,421
|
)
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(23,222
|
)
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(24,365
|
)
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||||||||
Research and development
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(5,447
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)
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(5,809
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)
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(11,148
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)
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(10,490
|
)
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||||||||
Operating income
|
14,816
|
14,865
|
32,353
|
26,424
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||||||||||||
Gain on sale of investment
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-
|
-
|
8,785
|
-
|
||||||||||||
Other expense, net
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(2,989
|
)
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(1,457
|
)
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(2,111
|
)
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(2,740
|
)
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||||||||
Income before income taxes
|
11,827
|
13,408
|
39,027
|
23,684
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||||||||||||
Income tax benefit (provision)
|
2,326
|
(1,252
|
)
|
(1,374
|
)
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(4,386
|
)
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|||||||||
Net income
|
14,153
|
12,156
|
37,653
|
19,298
|
||||||||||||
Net income attributable to noncontrolling interests
|
(2,299
|
)
|
(2,096
|
)
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(4,797
|
)
|
(5,401
|
)
|
||||||||
Net income attributable to Photronics, Inc. shareholders
|
$
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11,854
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$
|
10,060
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$
|
32,856
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$
|
13,897
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||||||||
Earnings per share:
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||||||||||||||||
Basic
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$
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0.18
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$
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0.15
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$
|
0.49
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$
|
0.21
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||||||||
Diluted
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$
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0.16
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$
|
0.14
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$
|
0.44
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$
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0.21
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||||||||
Weighted-average number of common shares outstanding:
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||||||||||||||||
Basic
|
67,372
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66,230
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67,090
|
66,148
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||||||||||||
Diluted
|
77,516
|
78,228
|
78,326
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72,624
|
May 1,
2016
|
November 1,
2015
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|||||||
Assets
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||||||||
Current assets:
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||||||||
Cash and cash equivalents
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$
|
193,978
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$
|
205,867
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||||
Accounts receivable
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104,330
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110,056
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||||||
Inventories
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24,510
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24,157
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||||||
Other current assets
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24,409
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24,034
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||||||
Total current assets
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347,227
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364,114
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||||||
Property, plant and equipment, net
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523,669
|
547,284
|
||||||
Investment in joint venture
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92,911
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93,021
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||||||
Intangible assets, net
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22,071
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24,616
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||||||
Other assets
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16,030
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16,520
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||||||
$
|
1,001,908
|
$
|
1,045,555
|
|||||
Liabilities and Equity
|
||||||||
Current liabilities:
|
||||||||
Current portion of long-term borrowings
|
$
|
5,806
|
$
|
65,495
|
||||
Accounts payable and accrued liabilities
|
108,311
|
127,197
|
||||||
Total current liabilities
|
114,117
|
192,692
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||||||
Long-term borrowings
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64,419
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67,120
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||||||
Other liabilities
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20,600
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23,677
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||||||
Photronics, Inc. shareholders' equity
|
693,284
|
646,555
|
||||||
Noncontrolling interests
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109,488
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115,511
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||||||
Total equity
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802,772
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762,066
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||||||
$
|
1,001,908
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$
|
1,045,555
|
Six Months Ended
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||||||||
May 1,
2016
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May 3,
2015
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|||||||
Cash flows from operating activities:
|
||||||||
Net income
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$
|
37,653
|
$
|
19,298
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
40,832
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40,318
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||||||
Gain on sale of investment
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(8,785
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)
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-
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|||||
Changes in assets and liabilities and other
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(4,561
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)
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(1,709
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)
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||||
Net cash provided by operating activities
|
65,139
|
57,907
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||||||
Cash flows from investing activities:
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||||||||
Purchases of property, plant and equipment
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(34,928
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)
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(67,935
|
)
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||||
Proceeds from sale of investments
|
8,785
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-
|
||||||
Other
|
193
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(218
|
)
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|||||
Net cash used in investing activities
|
(25,950
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)
|
(68,153
|
)
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||||
Cash flows from financing activities:
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||||||||
Repayments of long-term borrowings
|
(54,951
|
)
|
(4,751
|
)
|
||||
Proceeds from share-based arrangements
|
3,046
|
1,195
|
||||||
Other
|
(19
|
)
|
(76
|
)
|
||||
Net cash used in financing activities
|
(51,924
|
)
|
(3,632
|
)
|
||||
Effect of exchange rate changes on cash
|
846
|
(3,001
|
)
|
|||||
Net decrease in cash and cash equivalents
|
(11,889
|
)
|
(16,879
|
)
|
||||
Cash and cash equivalents, beginning of period
|
205,867
|
192,929
|
||||||
Cash and cash equivalents, end of period
|
$
|
193,978
|
$
|
176,050
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
May 1,
2016
|
May 3,
2015
|
May 1,
2016
|
May 3,
2015
|
|||||||||||||
Reconciliation of GAAP to Non-GAAP Net Income Attributable to Photronics, Inc. Shareholders
|
||||||||||||||||
GAAP net income attributable to Photronics, Inc. shareholders
|
$
|
11,854
|
$
|
10,060
|
$
|
32,856
|
$
|
13,897
|
||||||||
(a) Income tax benefit
|
(3,004
|
)
|
-
|
(3,004
|
)
|
-
|
||||||||||
(b) Gain on sale of investment, net of tax
|
-
|
-
|
(8,753
|
)
|
-
|
|||||||||||
(c) Financing expenses, net of tax
|
-
|
-
|
-
|
901
|
||||||||||||
Non-GAAP net income attributable to Photronics, Inc. shareholders
|
$
|
8,850
|
$
|
10,060
|
$
|
21,099
|
$
|
14,798
|
||||||||
Reconciliation of GAAP to Non-GAAP Net Income Applicable to Common Shareholders
|
||||||||||||||||
Weighted average number of diluted shares outstanding
|
||||||||||||||||
GAAP
|
77,516
|
78,228
|
78,326
|
72,624
|
||||||||||||
Non-GAAP
|
77,516
|
78,228
|
78,326
|
78,166
|
||||||||||||
Net income per diluted share
|
||||||||||||||||
GAAP
|
$
|
0.16
|
$
|
0.14
|
$
|
0.44
|
$
|
0.21
|
||||||||
Non-GAAP
|
$
|
0.13
|
$
|
0.14
|
$
|
0.29
|
$
|
0.22
|
(a) | Represents net, non-recurring tax benefit related to the recognition of certain tax benefits in Taiwan |
(b) | Represents gain on sale of investment in a foreign entity |
(c) | Represents financing expenses related to the exchange of $57.5 million of 3.25% convertible senior notes |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
May 1,
2016
|
May 3,
2015
|
May 1,
2016
|
May 3,
2015
|
|||||||||||||
GAAP Net Income (a)
|
$
|
14,153
|
$
|
12,156
|
$
|
37,653
|
$
|
19,298
|
||||||||
Add: interest expense
|
964
|
1,233
|
2,138
|
2,603
|
||||||||||||
Add (less): income tax expense (benefit)
|
(2,326
|
)
|
1,252
|
1,374
|
4,386
|
|||||||||||
Add: depreciation and amortization
|
20,073
|
19,293
|
40,530
|
39,900
|
||||||||||||
Add: special items (b)
|
976
|
912
|
1,873
|
2,738
|
||||||||||||
Non-GAAP EBITDA
|
$
|
33,840
|
$
|
34,846
|
$
|
83,568
|
$
|
68,925
|
(a) | Includes net income attributable to noncontrolling interests, and in the six months ended May 1, 2016 includes gain on sale of investment in a foreign entity |
(b) | Special items consist of stock compensation expense, and in the six months ended May 3, 2015 includes financing expenses in connection with the exchange of $57.5 million of 3.25% convertible senior notes |