UNITED STATES
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
|
Date of report (Date of earliest event reported)
|
(Exact name of registrant as specified in its charter)
|
|
|
|
|
(State or Other Jurisdiction of)
Incorporation
|
(Commission File Number)
|
(IRS Employer Identification No.)
|
|
|
|
|
|
(Address of principal executive offices)
|
(Zip Code)
|
|
Registrant's Telephone Number, including area code
|
(
|
(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:
|
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))
|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this
chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
|
|
||
|
N/A
|
| Item 2.02. |
Results of Operations and Financial Condition.
|
On February 24, 2021, Photronics, Inc. issued a press release reporting first quarter fiscal 2021 results.
A copy of the press release is furnished as Exhibit 99.1 to this report. The information contained in this Item 2.02 and the attached Exhibits 99.1,
99.2, 99.3, 99.4, and 99.5, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and shall not be incorporated by reference in any filing under the Securities Act of 1933 except as shall be expressly set
forth by specific reference in such filing.
| Item 9.01. |
Financial Statements and Exhibits.
|
|
(d)
|
Exhibits
|
|
Press Release dated February 24, 2021.
|
| 99.2 |
Condensed Consolidated Statements of Income.
|
| 99.3 |
Condensed Consolidated Balance Sheets.
|
|
Condensed Consolidated Statements of Cash Flows.
|
|
Photronics Q1 2021 Financial Results Conference Call February 24, 2021 slides.
|
SIGNATURE
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)
|
|
|
By: |
/s/ Richelle E. Burr
|
|
Name:
|
Richelle E. Burr
|
|
|
Title:
|
Executive Vice President,
|
|
|
Chief Administrative Officer,
|
||
|
General Counsel and Secretary
|
||
|
Date: February 24, 2021
|
Exhibit 99.1
|
For Further Information:
R. Troy Dewar, CFA
Vice President, Investor Relations
(203) 740-5610
|
|
Press Release
|
tdewar@photronics.com
|
Photronics Reports First Quarter Fiscal 2021 Results
| • |
Revenue was $152.1 million, up 2% sequentially and down 5% year-over-year
|
| • |
Net income attributable to Photronics, Inc. shareholders was $8.0 million, or $0.13 per diluted share
|
| • |
Cash provided by operating activities was $26.3 million, capex was $17.5 million, share repurchases were $13.2 million, and ending cash balance was $278.5 million
|
| • |
Second quarter 2021 guidance: revenue between $153 and $162 million with diluted EPS between $0.14 and $0.20
|
BROOKFIELD, Conn. February 24, 2021 (GLOBE NEWSWIRE) — Photronics, Inc. (NASDAQ:PLAB), a worldwide leader
in photomask technologies and solutions, today reported financial results for its fiscal 2021 first quarter ended January 31, 2021.
First quarter revenue was $152.1 million, up 2% compared with the previous quarter and down 5% compared with the same quarter last year. Integrated circuit (IC)
revenue was $105.0 million, down 1% sequentially and 2% compared with the first quarter of last year. Flat panel display (FPD) revenue was $47.1 million, up 9% compared with last quarter and down 11% compared with the same period last year.
Net income attributable to Photronics, Inc. shareholders was $8.0 million, or $0.13 per diluted share, compared with $6.5 million, or $0.10 per diluted share, for the
fourth quarter of 2020 and $10.3 million, or $0.16 per diluted share, for the first quarter of 2020.
"We achieved sequential revenue growth in the first quarter, a period that is typically down seasonally, due to strong demand for mobile displays and a recovery in
memory,” said Peter Kirlin, chief executive officer. “Our diverse and broad industry exposure enabled us to perform well even as mask demand was somewhat muted in certain sectors as foundries responded to semiconductor shortages, limiting new
design activity. The outlook for mask demand in 2021 is positive as additional capacity is brought on line by our customers. Our financial position remains strong and we anticipate completing the next phase of our FPD
investment in the second half of fiscal 2021. We expect to grow 2021 revenue by high single-digit percent with an increase in operating profit similar to the 23% increase achieved in 2020.”
Second Quarter 2021 Guidance
For the second quarter of 2021, Photronics expects revenue to be between $153 million and $162 million, and net income attributable to Photronics, Inc. shareholders to
be between $0.14 and $0.20 per diluted share.
Conference Call
A conference call to discuss these results is scheduled for 8:30 a.m. Eastern time on Wednesday, February 24, 2021. 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.
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.
Exhibit 99.2
PHOTRONICS, INC.
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
|
Three Months Ended
|
||||||||||||
|
January 31,
2021
|
October 31,
2020
|
February 2,
2020
|
||||||||||
|
Revenue
|
$
|
152,067
|
$
|
149,286
|
$
|
159,736
|
||||||
|
Cost of goods sold
|
121,538
|
117,401
|
125,134
|
|||||||||
|
Gross profit
|
30,529
|
31,885
|
34,602
|
|||||||||
|
Operating Expenses:
|
||||||||||||
|
Selling, general and administrative
|
14,053
|
12,790
|
14,219
|
|||||||||
|
|
||||||||||||
|
Research and development
|
4,710
|
4,110
|
4,080
|
|||||||||
|
Total Operating Expenses
|
18,763
|
16,900
|
18,299
|
|||||||||
|
Operating income
|
11,766
|
14,985
|
16,303
|
|||||||||
|
Other income (expense), net
|
680
|
(2,937
|
)
|
3,697
|
||||||||
|
Income before income tax provision
|
12,446
|
12,048
|
20,000
|
|||||||||
|
Income tax provision
|
2,937
|
3,469
|
9,072
|
|||||||||
|
Net income
|
9,509
|
8,579
|
10,928
|
|||||||||
|
Net income attributable to noncontrolling interests
|
1,473
|
2,119
|
628
|
|||||||||
|
Net income attributable to Photronics, Inc. shareholders
|
$
|
8,036
|
$
|
6,460
|
$
|
10,300
|
||||||
|
Earnings per share:
|
||||||||||||
|
Basic
|
$
|
0.13
|
$
|
0.10
|
$
|
0.16
|
||||||
|
|
||||||||||||
|
Diluted
|
$
|
0.13
|
$
|
0.10
|
$
|
0.16
|
||||||
|
Weighted-average number of common shares outstanding:
|
||||||||||||
|
Basic
|
62,475
|
64,193
|
65,554
|
|||||||||
|
|
||||||||||||
|
Diluted
|
63,005
|
64,768
|
66,449
|
|||||||||
Exhibit 99.3
PHOTRONICS, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
|
January 31,
2021
|
October 31,
2020
|
|||||||
|
Assets
|
||||||||
|
Current assets:
|
||||||||
|
Cash and cash equivalents
|
$
|
278,539
|
$
|
278,665
|
||||
|
Accounts receivable
|
139,708
|
134,470
|
||||||
|
Inventories
|
56,407
|
57,269
|
||||||
|
Other current assets
|
31,458
|
29,735
|
||||||
|
Total current assets
|
506,112
|
500,139
|
||||||
|
Property, plant and equipment, net
|
672,398
|
631,475
|
||||||
|
Intangible assets, net
|
2,383
|
3,437
|
||||||
|
Other assets
|
51,169
|
53,131
|
||||||
|
Total assets
|
$
|
1,232,062
|
$
|
1,188,182
|
||||
|
Liabilities and Equity
|
||||||||
|
Current liabilities:
|
||||||||
|
Debt
|
$
|
21,641
|
$
|
13,678
|
||||
|
Accounts payable and accrued liabilities
|
123,890
|
129,261
|
||||||
|
Total current liabilities
|
145,531
|
142,939
|
||||||
|
Long-term debt
|
79,984
|
54,980
|
||||||
|
Other liabilities
|
28,051
|
27,997
|
||||||
|
Photronics, Inc. shareholders' equity
|
815,502
|
804,962
|
||||||
|
Noncontrolling interests
|
162,994
|
157,304
|
||||||
|
Total equity
|
978,496
|
962,266
|
||||||
|
Total liabilities and equity
|
$
|
1,232,062
|
$
|
1,188,182
|
||||
Exhibit 99.4
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
|
Three Months Ended
|
||||||||
|
January 31,
2021
|
February 2,
2020
|
|||||||
|
Cash flows from operating activities:
|
||||||||
|
Net income
|
$
|
9,509
|
$
|
10,928
|
||||
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
|
Depreciation and amortization
|
23,724
|
24,626
|
||||||
|
Share-based compensation
|
1,301
|
1,356
|
||||||
|
Changes in operating assets, liabilities and other
|
(8,247
|
)
|
(6,125
|
)
|
||||
|
Net cash provided by operating activities
|
26,287
|
30,785
|
||||||
|
Cash flows from investing activities:
|
||||||||
|
Purchases of property, plant and equipment
|
(17,532
|
)
|
(13,807
|
)
|
||||
|
Government incentives
|
397
|
2,417
|
||||||
|
Other
|
(61
|
)
|
(139
|
)
|
||||
|
Net cash used in investing activities
|
(17,196
|
)
|
(11,529
|
)
|
||||
|
Cash flows from financing activities:
|
||||||||
|
Proceeds from long-term debt
|
6,205
|
1,140
|
||||||
|
Purchase of treasury stock
|
(13,209
|
)
|
(11,000
|
)
|
||||
|
Repayments of debt
|
(7,796
|
)
|
(389
|
)
|
||||
|
Proceeds from share-based arrangements
|
765
|
2,886
|
||||||
|
Other
|
(315
|
)
|
(248
|
)
|
||||
|
Net cash used in financing activities
|
(14,350
|
)
|
(7,611
|
)
|
||||
|
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
5,195
|
149
|
||||||
|
Net (decrease) increase in cash, cash equivalents, and restrcited cash
|
(64
|
)
|
11,794
|
|||||
|
Cash, cash equivalents, and restricted cash, beginning of period
|
281,602
|
209,291
|
||||||
|
Cash, cash equivalents, and restricted cash, end of period
|
$
|
281,538
|
$
|
221,085
|
||||
Exhibit 99.5
Q1 2021 Financial Results Conference CallFebruary 24, 2021 Photronics, Inc.
Safe Harbor Statement This presentation and some of our comments may contain projections or other
forward-looking statements regarding future events, our future financial performance and/or the future performance of the industry. These statements are predictions, and contain risks and uncertainties. Actual events or results may differ
materially from those presented. These statements include words like “anticipate”, “believe”, “estimate”, “expect”, “forecast”, “may”, “plan”, “project”, “in our view” or the negative thereto. We cannot guarantee the accuracy of any forecasts
or estimates, and we are not obligated to update any forward-looking statements if our expectations change. If you would like more information on the risks involved in forward-looking statements, please see the documents we file from time to
time with the Securities and Exchange Commission. 2/24/2021 2
Q1 2021 Summary Revenue was $152.1M, up 2% Q/Q and down 5% Y/YSequential FPD growth offsets lower IC
demandRevenue to China was down 3% Q/Q primarily due to soft high-end logic demandNet income attributable to Photronics, Inc. shareholders of $8.0M ($0.13/share)Cash balance $279M$26M generated from operating activity$18M invested in
capex$13M returned to investors through share repurchasesNext phase of FPD capacity investment on track for tool delivery in 2021 2/24/2021 3 Strategic investments driving long-term, profitable growth
Income Statement Summary $M (except EPS) Q121 Q420 Q/Q Q120 Y/Y Revenue $ 152.1 $ 149.3 2% $
159.7 (5%) Gross Profit $ 30.5 $ 31.9 (4%) $ 34.6 (12%) Gross Margin 20.1% 21.4% (130 bps) 21.7% (160 bps) Operating Income $ 11.8 $ 15.0 (21%) $ 16.3 (28%) Operating Margin 7.7% 10.0% (230 bps) 10.2% (250 bps) Other
income (expense) $ 0.7 ($ 2.9) $ 3.6 $ 3.7 ($ 3.0) Income tax provision $ 2.9 $ 3.5 ($ 0.5) $ 9.1 ($ 6.1) Minority interest $ 1.5 $ 2.1 ($ 0.6) $ 0.6 $ 0.8 Net Income* $ 8.0 $ 6.5 24% $ 10.3 (22%) Diluted EPS* $
0.13 $ 0.10 $ 0.03 $ 0.16 ($ 0.03) Days in quarter 92 90 2 94 (2) Gross margin lower due to unfavorable product mixOther income / (expense) primarily due to FX gain / (loss)Minority interest includes IC JVs in Taiwan and
China 2/24/2021 4 *Net income attributable to Photronics, Inc. shareholders
$M Q121 Q420 Q/Q Q120 Y/Y High-End* $ 36.8 $ 38.2 (4%) $ 41.0 (10%) Mainstream $ 68.2 $
67.8 1% $ 65.9 3% Total $ 105.0 $ 105.9 (1%) $ 107.0 (2%) IC Photomask Revenue 2/24/2021 5 Memory recovery and mainstream growth offset by soft high-end logic demandChina revenue down 5% Q/Q and 2% Y/Y; represents 24% of IC
revenueOutlookSome sectors benefiting from remote work and educationMainstream demand strongIndustry responding to chip shortageMacro risk from trade policies and shelter-in-place mandates *28nm and smaller Total may differ due to rounding
FPD Photomask Revenue 2/24/2021 6 High-end improved Q/Q on strong AMOLEDStrong LCD market causes
panel makers to run current products, limiting new design activityChina revenue down 1% Q/Q and 27% Y/Y; represents 51% of FPD revenueOutlookDynamic market environmentSmartphone recovery should continue as supply chain adjusts to Huawei
banTechnology development drives demand for higher-value masks *≥G10.5, AMOLED and LTPS $M Q121 Q420 Q/Q Q120 Y/Y High-End* $ 34.6 $ 31.3 11% $ 39.8 (13%) Mainstream $ 12.5 $ 12.1 3% $ 13.0 (4%) Total $ 47.1 $
43.4 9% $ 52.8 (11%) Total may differ due to rounding
Select Financial Data $M Q121 Q420 Q120 Cash $ 279 $ 279 $ 218 Debt $ 98 $ 69 $ 54 Net
Cash* $ 180 $ 210 $ 164 Operating Cash Flow $ 26 $ 65 $ 31 Capital Expenditures $ 18 $ 34 $ 14 Government Incentives for Capital Equipment $ 0.4 - $ 2 Share repurchase $ 13 $ 18 $ 11 Debt is US equipment lease and local
China loansExpect 2021 capex to be ~$100M; completing initial China IC investment and next phase of FPD investmentTotal share repurchases of $31M under current $100M authorizationBalance sheet able to fund investments, share repurchases, and
strategic M&A opportunities 2/24/2021 7 *Net cash defined as cash and cash equivalents less long-term borrowings (including current portion), as reported in accordance with GAAP
Q221 Guidance Revenue ($M) $153 - $162 Operating Margin 8% - 12% Taxes ($M) $3 - $4 EPS $0.14
- $0.20 Diluted Shares (M) ~63 Positive industry demand trendsRemote work and learningMade in China 2025Advanced display technologiesOutlook clouded by geopolitical uncertaintyShelter-in-place mandatesUS/China trade policiesWe remain
focused on expanding margins and improving cash flows 2/24/2021 8
For Additional Information:R. Troy Dewar, CFAVice President, Investor
Relations203.740.5610tdewar@photronics.com Thank you for your interest!
Appendix
Total Revenue 2/24/2021 11 IC FPD Total may differ due to rounding
IC Photomask Revenue 2/24/2021 12 Mainstream High-End High-End: 28nm and smaller; total may
differ due to rounding
FPD Photomask Revenue 2/24/2021 13 Mainstream High-End High-End: ≥G10.5, AMOLED and LTPS;
total may differ due to rounding