PHOTRONICS, INC.
|
||
(Exact name of registrant as specified in its charter)
|
Connecticut
|
0-15451
|
06-0854886
|
||
(State or other jurisdiction of incorporation)
|
(Commission File Number)
|
(IRS Employer Identification Number)
|
15 Secor Road, Brookfield, CT
|
06804
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
(Former name or former address, if changed since last report)
|
☐ | 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
|
Results of Operations and Financial Condition
|
Item 9.01
|
Financial Statements and Exhibits
|
Exhibits
|
|
Press Release dated August 18, 2016
|
|
Condensed Consolidated Statements of Income
|
|
Condensed Consolidated Balance Sheets
|
|
Condensed Consolidated Statements of Cash Flows
|
|
Reconciliation of GAAP to Non-GAAP Financial Information
|
|
Reconciliation of GAAP Net Income to Non-GAAP EBITDA
|
PHOTRONICS, INC.
|
||
(Registrant)
|
DATE: August 18, 2016
|
BY
|
/s/ Richelle E. Burr
|
Richelle E. Burr
|
||
Vice President, General Counsel
|
||
PHOTRONICS, INC.
|
Press Release
|
For Further Information:
R. Troy Dewar, CFA
Director, Investor Relations
(203) 740-5610
tdewar@photronics.com
|
• | Third quarter sales were $123.2 million, slightly higher sequentially and down 6% compared with last year |
• | Net income was $8.1 million ($0.12 per diluted share) |
• | FPD sales increased 14% year-over-year, high-end FPD sales were up 20% |
• | Net cash improved $99 million sequentially with payment received from former joint venture partner, providing additional financial strength and flexibility to fund growth |
• | Fourth quarter 2016 guidance: sales between $118 and $128 million; diluted EPS between $0.09 and $0.17 |
· | Net, non-recurring tax benefit related to the recognition of certain tax benefits in Taiwan in fiscal 2016 |
· | 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
|
Nine Months Ended
|
|||||||||||||||
July 31,
2016
|
August 2,
2015
|
July 31,
2016
|
August 2,
2015
|
|||||||||||||
Net sales
|
$
|
123,209
|
$
|
131,699
|
$
|
376,088
|
$
|
382,513
|
||||||||
Costs and expenses:
|
||||||||||||||||
Cost of sales
|
(91,759
|
)
|
(94,456
|
)
|
(277,915
|
)
|
(283,991
|
)
|
||||||||
Selling, general and administrative
|
(11,163
|
)
|
(12,430
|
)
|
(34,386
|
)
|
(36,795
|
)
|
||||||||
Research and development
|
(5,466
|
)
|
(6,253
|
)
|
(16,613
|
)
|
(16,743
|
)
|
||||||||
Operating income
|
14,821
|
18,560
|
47,174
|
44,984
|
||||||||||||
Gain on sale of investment
|
157
|
-
|
8,940
|
-
|
||||||||||||
Other income (expense), net
|
1,237
|
240
|
(872
|
)
|
(2,500
|
)
|
||||||||||
Income before income taxes
|
16,215
|
18,800
|
55,242
|
42,484
|
||||||||||||
Income tax provision
|
(4,762
|
)
|
(3,390
|
)
|
(6,136
|
)
|
(7,775
|
)
|
||||||||
Net income
|
11,453
|
15,410
|
49,106
|
34,709
|
||||||||||||
Net income attributable to noncontrolling interests
|
(3,365
|
)
|
(3,304
|
)
|
(8,162
|
)
|
(8,706
|
)
|
||||||||
Net income attributable to Photronics, Inc. shareholders
|
$
|
8,088
|
$
|
12,106
|
$
|
40,944
|
$
|
26,003
|
||||||||
Earnings per share:
|
||||||||||||||||
Basic
|
$
|
0.12
|
$
|
0.18
|
$
|
0.61
|
$
|
0.39
|
||||||||
Diluted
|
$
|
0.12
|
$
|
0.17
|
$
|
0.56
|
$
|
0.37
|
||||||||
Weighted-average number of common shares outstanding:
|
||||||||||||||||
Basic
|
67,953
|
66,454
|
67,377
|
66,250
|
||||||||||||
Diluted
|
74,317
|
78,569
|
76,990
|
78,300
|
July 31,
2016
|
November 1,
2015
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
291,669
|
$
|
205,867
|
||||
Accounts receivable
|
107,494
|
110,056
|
||||||
Inventories
|
24,615
|
24,157
|
||||||
Other current assets
|
17,643
|
24,034
|
||||||
Total current assets
|
441,421
|
364,114
|
||||||
Property, plant and equipment, net
|
522,192
|
547,284
|
||||||
Investment in joint venture
|
-
|
93,021
|
||||||
Intangible assets, net
|
20,950
|
24,616
|
||||||
Other assets
|
15,880
|
16,520
|
||||||
$
|
1,000,443
|
$
|
1,045,555
|
|||||
Liabilities and Equity
|
||||||||
Current liabilities:
|
||||||||
Current portion of long-term borrowings
|
$
|
5,846
|
$
|
65,495
|
||||
Accounts payable and accrued liabilities
|
91,210
|
127,197
|
||||||
Total current liabilities
|
97,056
|
192,692
|
||||||
Long-term borrowings
|
63,054
|
67,120
|
||||||
Other liabilities
|
20,952
|
23,677
|
||||||
Photronics, Inc. shareholders' equity
|
706,310
|
646,555
|
||||||
Noncontrolling interests
|
113,071
|
115,511
|
||||||
Total equity
|
819,381
|
762,066
|
||||||
$
|
1,000,443
|
$
|
1,045,555
|
Nine Months Ended
|
||||||||
July 31,
2016
|
August 2,
2015
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
49,106
|
$
|
34,709
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
60,471
|
61,465
|
||||||
Gain on sale of investment
|
(8,940
|
)
|
-
|
|||||
Changes in assets and liabilities and other
|
(9,250
|
)
|
(4,347
|
)
|
||||
Net cash provided by operating activities
|
91,387
|
91,827
|
||||||
Cash flows from investing activities:
|
||||||||
Purchases of property, plant and equipment
|
(44,828
|
)
|
(80,107
|
)
|
||||
Proceeds from sale of investments
|
101,853
|
-
|
||||||
Other
|
584
|
(283
|
)
|
|||||
Net cash provided by (used in) investing activities
|
57,609
|
(80,390
|
)
|
|||||
Cash flows from financing activities:
|
||||||||
Repayments of long-term borrowings
|
(56,276
|
)
|
(7,152
|
)
|
||||
Proceeds from share-based arrangements
|
3,172
|
2,375
|
||||||
Dividends paid to noncontrolling interests
|
(11,890
|
)
|
-
|
|||||
Other
|
(19
|
)
|
(171
|
)
|
||||
Net cash used in financing activities
|
(65,013
|
)
|
(4,948
|
)
|
||||
Effect of exchange rate changes on cash
|
1,819
|
(7,856
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
85,802
|
(1,367
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
205,867
|
192,929
|
||||||
Cash and cash equivalents, end of period
|
$
|
291,669
|
$
|
191,562
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
July 31,
2016
|
August 2,
2015
|
July 31,
2016
|
August 2,
2015
|
|||||||||||||
Reconciliation of GAAP to Non-GAAP Net Income Attributable to Photronics, Inc. Shareholders
|
||||||||||||||||
GAAP net income attributable to Photronics, Inc. shareholders
|
$
|
8,088
|
$
|
12,106
|
$
|
40,944
|
$
|
26,003
|
||||||||
(a) Income tax benefit
|
-
|
-
|
(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
|
$
|
8,088
|
$
|
12,106
|
$
|
29,187
|
$
|
26,904
|
||||||||
Reconciliation of GAAP to Non-GAAP Net Income Applicable to Common Shareholders
|
||||||||||||||||
Weighted average number of diluted shares outstanding
|
||||||||||||||||
GAAP
|
74,317
|
78,569
|
76,990
|
78,300
|
||||||||||||
|
||||||||||||||||
Non-GAAP
|
74,317
|
78,569
|
76,990
|
78,300
|
||||||||||||
Net income per diluted share
|
||||||||||||||||
GAAP
|
$
|
0.12
|
$
|
0.17
|
$
|
0.56
|
$
|
0.37
|
||||||||
Non-GAAP
|
$
|
0.12
|
$
|
0.17
|
$
|
0.41
|
$
|
0.39
|
(a)
|
Represents one-time tax benefit primarily related to the recognition of prior period tax benefits and other tax positions no longer deemed necessary 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
|
Nine Months Ended
|
|||||||||||||||
July 31,
2016
|
August 2,
2015
|
July 31,
2016
|
August 2,
2015
|
|||||||||||||
GAAP Net Income (a)
|
$
|
11,453
|
$
|
15,410
|
$
|
49,106
|
$
|
34,709
|
||||||||
Add: interest expense
|
612
|
1,209
|
2,750
|
3,812
|
||||||||||||
Add: income tax expense
|
4,762
|
3,390
|
6,136
|
7,775
|
||||||||||||
Add: depreciation and amortization
|
19,572
|
20,976
|
60,102
|
60,876
|
||||||||||||
Add: special items (b)
|
975
|
947
|
2,848
|
3,685
|
||||||||||||
Non-GAAP EBITDA
|
$
|
37,374
|
$
|
41,932
|
$
|
120,942
|
$
|
110,857
|
(a)
|
Includes net income attributable to noncontrolling interests, and in the nine months ended July 31, 2016 includes gain on sale of investment in a foreign entity
|
(b)
|
Special items consist of stock compensation expense, and in the nine months ended August 2, 2015 includes financing expenses in connection with the exchange of $57.5 million of 3.25% convertible senior notes
|