Press Release

Photronics Reports Full Year and Fourth Quarter Fiscal 2020 Results

December 9, 2020 at 6:00 AM EST
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  • 2020 revenue was a record $609.7 million, an increase of 11% compared with 2019 and the third consecutive year of record annual revenue

  • Fourth quarter 2020 revenue was $149.3 million, down 5% sequentially and 4% year-over-year

  • Net income attributable to Photronics, Inc. shareholders was $33.8 million, or $0.52 per diluted share, for the full year of 2020; and $6.5 million, or $0.10 per diluted share, for the fourth quarter of 2020

  • During the fourth quarter, cash provided by operating activities was $64.8 million, capex was $34.1 million, share repurchases were $17.5 million, and ending cash balance was $278.7 million

  • First quarter 2021 guidance: revenue between $145 and $155 million with diluted EPS between $0.07 and $0.14

BROOKFIELD, Conn., Dec. 09, 2020 (GLOBE NEWSWIRE) -- Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in photomask technologies and solutions, today reported financial results for its fiscal 2020 full year and fourth quarter ended October 31, 2020.

Full year revenue was a record $609.7 million, up 11% compared with 2019. IC revenue was $418.4 million, up 3% compared with last year; and FPD revenue was a record $191.3 million, up 32% compared with last year.

Fourth quarter revenue was $149.3 million, down 5% compared with the previous quarter and 4% compared with the same quarter last year. Integrated circuit (IC) revenue was $105.9 million, down 3% sequentially and 6% compared with the fourth quarter of last year. Flat panel display (FPD) revenue was $43.4 million, down 12% compared with last quarter and 1% compared with the same period last year.

Net income attributable to Photronics, Inc. shareholders was $33.8 million ($0.52 per diluted share) compared with $29.8 million ($0.44 per diluted share) in 2019; fourth quarter net income was $6.5 million ($0.10 per diluted share), compared with $10.8 million ($0.17 per diluted share) for the third quarter of 2020 and $9.7 million ($0.15 per diluted share) for the fourth quarter of 2019.

"We achieved record annual revenue for the third consecutive year in 2020, overcoming tremendous global and regional challenges,” said Peter Kirlin, chief executive officer. “Fourth quarter revenue declined 5% sequentially as typical seasonality was worsened by geopolitical factors and softness in some sectors. With the decrease in quarterly revenue, profit margins contracted due to the effect of operating leverage on our income. We increased our cash balance while investing in organic growth and returning cash to our shareholders through share repurchases, ending 2020 in a strong financial position. Our expectations are for another growth year in 2021, with high single-digit percent growth in revenue and an up-tick in operating profit similar to the 23% increase achieved in 2020.”

First Quarter 2021 Guidance

For the first quarter of 2021, Photronics expects revenue to be between $145 million and $155 million, and net income attributable to Photronics, Inc. shareholders to be between $0.07 and $0.14 per diluted share.

Conference Call

A conference call to discuss these results is scheduled for 8:30 a.m. Eastern time on Wednesday, December 9, 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.

Investor and Analyst Day

Photronics will host an investor and analyst day on December 14, 2020. The event will be conducted virtually and feature updates from management and a Q&A session. More information can be found on the Investors section of Photronics' website at www.photronics.com.

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, 2020, the company had 1,728 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” 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 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, compliance with local, State and Federal laws, rules and regulations including, but not limited to, import and export controls, tariffs and penalties, fines and violations related thereto, 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   Year Ended
    October 31,     August 2,     October 31,     October 31,     October 31,  
    2020     2020     2019     2020     2019  
                               
Revenue   $        149,286     $        157,895     $        156,257     $        609,691     $        550,660  
                               
Cost of goods sold   117,401     120,161     118,098     475,037     429,819  
                               
Gross profit   31,885     37,734     38,159     134,654     120,841  
                               
Operating Expenses:                              
                               
Selling, general and administrative 12,790     13,306     12,140     53,582     52,326  
                               
Research and development   4,110     4,492     4,543     17,144     16,394  
                               
Total Operating Expenses   16,900     17,798     16,683     70,726     68,720  
                               
Operating income   14,985     19,936     21,476     63,928     52,121  
                               
Other  (expense) income, net   (2,937 )   (2,135 )   (6,111 )   (2,327 )   (1,420 )
                               
Income before income tax provision 12,048     17,801     15,365     61,601     50,701  
                               
Income tax provision   3,469     4,937     2,327     21,258     10,210  
                               
Net income   8,579     12,864     13,038     40,343     40,491  
                               
Net income attributable to noncontrolling interests 2,119     2,088     3,338     6,523     10,698  
                               
Net income attributable to Photronics, Inc. shareholders $             6,460     $          10,776     $             9,700     $          33,820     $          29,793  
                               
Earnings per share:                              
                               
Basic   $                0.10     $                0.17     $                0.15     $                0.52     $                0.45  
                               
Diluted   $                0.10     $                0.17     $                0.15     $                0.52     $                0.44  
                               
Weighted-average number of common shares outstanding:                            
                               
Basic   64,193     64,780     66,230     64,866     66,347  
                               
Diluted   64,768     65,247     66,862     65,470     69,155  



PHOTRONICS, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
 
    October 31,     October 31,  
    2020     2019  
             
Assets            
             
Current assets:            
Cash and cash equivalents   $ 278,665     $ 206,530  
Accounts receivable   134,470     134,454  
Inventories   57,269     48,155  
Other current assets   29,735     38,388  
             
Total current assets   500,139     427,527  
             
Property, plant and equipment, net 631,475     632,441  
Intangible assets, net   3,437     7,870  
Other assets   53,131     50,827  
             
Total assets   $ 1,188,182     $ 1,118,665  
             
             
             
Liabilities and Equity            
             
Current liabilities:            
Debt   $ 13,678     $ 10,873  
Accounts payable and accrued liabilities 129,261     141,081  
             
Total current liabilities   142,939     151,954  
             
Long-term debt   54,980     41,887  
Other liabilities   27,997     13,732  
             
Photronics, Inc. shareholders' equity 804,962     769,892  
Noncontrolling interests   157,304     141,200  
Total equity   962,266     911,092  
             
Total liabilities and equity   $ 1,188,182     $ 1,118,665  



PHOTRONICS,  INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
             
    Year Ended
    October 31,     October 31,  
    2020     2019  
             
Cash flows from operating activities:            
Net income   $         40,343     $         40,491  
Adjustments to reconcile net income to net cash          
provided by operating activities:            
Depreciation and amortization   93,814     83,879  
Share-based compensation   4,927     3,680  
Changes in operating assets, liabilities and other 3,962     (59,664 )
             
Net cash provided by operating activities   143,046     68,386  
             
Cash flows from investing activities:            
Purchases of property, plant and equipment (70,815 )   (178,375 )
Government incentive   5,263     27,003  
Other   (159 )   (34 )
             
Net cash used in investing activities   (65,711 )   (151,406 )
             
Cash flows from financing activities:            
Proceeds from debt   20,340     54,633  
Contributions from noncontrolling interest 17,596     29,394  
Purchases of treasury stock   (34,394 )   (21,696 )
Dividends paid to noncontrolling interests (16,151 )   (45,050 )
Repayments of debt   (7,392 )   (61,319 )
Proceeds from share-based arrangements 4,239     2,071  
Other   (248 )   (92 )
             
Net cash used in financing activities   (16,010 )   (42,059 )
             
Effect of exchange rate changes on cash, cash equivalents, and restricted cash 10,986     2,381  
             
Net increase (decrease) in cash, cash equivalents, and restricted cash 72,311     (122,698 )
Cash, cash equivalents, and restricted cash, beginning of period 209,291     331,989  
             
Cash, cash equivalents, and restricted cash, end of period $       281,602     $       209,291  

 


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Source: Photronics, Inc.