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
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Date of report (Date of earliest event reported)
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(Exact name of registrant as specified in its charter)
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(State or Other Jurisdiction of) Incorporation
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(Commission File Number)
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(IRS Employer Identification No.)
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(Address of principal executive offices)
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(Zip Code)
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Registrant's Telephone Number, including area code
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(
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(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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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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:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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| Item 2.02. |
Results of Operations and Financial Condition.
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| Item 7.01. |
Regulation FD Disclosure.
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On February 20, 2023, Photronics, Inc. (the “Company”) issued a press release reporting first quarter fiscal 2023 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,
99.5 and 99.6, 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.
On February 22, 2023, the Company will conduct a conference call during which certain unaudited, non-GAAP financial information related to the Company’s operations
for the three months ended January 29, 2023 may be disclosed. This information is set forth in Exhibit 99.6.
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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 February 20, 2023.
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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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Photronics Q1 2023 Financial Results Conference Call February 22, 2023 slides.
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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.
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PHOTRONICS, INC.
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(Registrant)
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By:
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/s/ Richelle E. Burr
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Name:
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Richelle E. Burr
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Title:
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Executive Vice President,
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Chief Administrative Officer,
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General Counsel and Secretary
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Date: February 21, 2023
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Exhibit 99.1
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For Further Information:
John P. Jordan
Executive Vice President & CFO
203.740.5671
jjordan@photronics.com
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Photronics Reports First Quarter Fiscal 2023 Results
BROOKFIELD, Conn. February 20, 2023 (GLOBE NEWSWIRE) — Photronics, Inc. (NASDAQ:PLAB), a worldwide
leader in photomask technologies and solutions, today reported financial results for its fiscal first quarter 2023 ended January 29, 2023.
“We made a great start to 2023 and grew revenue sequentially, as both IC and FPD high-end businesses improved due to ongoing
design-driven demand,” said Frank Lee, chief executive officer. “IC growth was driven by high-end demand from Asian foundries; FPD benefited from increased G10.5+ demand and continued strength in mobile displays.
“Profit margins were somewhat softer than the previous quarter primarily due to less favorable mix and somewhat lower customer
premiums to accelerate delivery. Operating cash generation continued strong, which enables us to continue investing in organic growth and maintain a strong balance sheet to support our strategy and help navigate economic uncertainty. I am proud of
the performance of the entire Photronics team.”
First Quarter 2023 Results
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Revenue was $211.1 million up 0.4% sequentially and 11% year-over-year
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GAAP net income attributable to Photronics, Inc. shareholders was $14.0 million ($0.23 per diluted share), compared with $37.1 million ($0.60 per diluted share) in the fourth quarter of 2022 and $23.1 million ($0.38 per diluted share) in
the first quarter 2022
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Non-GAAP net income attributable to Photronics, Inc. shareholders was $24.4 million ($0.40 per diluted share), compared with $31.2 million ($0.51 per diluted share) in the fourth quarter of 2022 and $19.2 million ($0.32 per diluted share)
in the first quarter 2022
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IC revenue was $156.6 million, up 0.2% sequentially and 21% year-over-year
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FPD revenue was $54.5 million, up 1% sequentially and 9% less than same quarter last year
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Cash generated from operating activities was $28 million, and cash invested in growth through capital expenditures was $31 million
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Second Quarter 2023 Guidance
For the second quarter of 2023, Photronics expects revenue to be between $205 million and $215 million and net income attributable to Photronics,
Inc. shareholders to be between $0.38 and $0.48 per diluted share.
Webcast
A webcast to discuss these results is scheduled for 8:30 a.m. Eastern time on Wednesday, February 22, 2023. The call will be broadcast live and on-demand on the Events and Presentations link on the Photronics website. Analysts and investors who wish to participate in the Q&A portion of the call
should click here. It is suggested that participants register fifteen minutes prior to the call's scheduled start time.
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, 2022, the company had 1,828 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” regarding our industry, our strategic
position, and our financial and operating results. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results, performance or achievements to differ materially. Please refer to the documents
we file with the Securities and Exchange Commission. These documents contain and identify important factors that could cause our actual results to differ materially from those contained in these forward-looking statements. These certain factors can
be found at www.photronics.com/riskfactors. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We are
under no duty to update any of the forward-looking statements after the date of this release to conform these statements to actual results.
Non-GAAP Financial Measures
Non-GAAP Net Income attributable to Photronics, Inc. shareholders and non-GAAP
earnings per share, Free Cash Flow, LTM Free Cash Flow, and Net Cash are "non-GAAP financial measures" as such term is defined by the Securities and Exchange Commission, and may differ from similarly named non-GAAP financial measures used by other
companies. The attached financial supplement reconciles Photronics, Inc. financial results under GAAP to non-GAAP financial information. We believe these non-GAAP financial measures that exclude certain items are useful for analysts and investors
to evaluate our future on-going performance because they enable a more meaningful comparison of our projected performance with our historical results. These non-GAAP metrics are
not intended to represent funds available for our discretionary use and are not intended to represent, or be used as a substitute for, gross profit, operating income, net income, cash and cash equivalents, or cash flows from operations, 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 the condensed consolidated balance sheets and statement of cash flows and must be considered
in performing a comprehensive assessment of overall financial performance. Please refer to the non-GAAP reconciliations on the following page.
Exhibit 99.2
PHOTRONICS, INC.
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
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Three Months Ended
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January 29,
2023
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October 31,
2022
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January 30,
2022
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Revenue
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$
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211,090
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$
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210,266
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$
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189,827
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Cost of goods sold
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135,013
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129,997
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129,964
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Gross Profit
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76,077
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80,269
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59,863
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Operating Expenses:
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Selling, general and administrative
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16,818
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15,683
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15,727
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Research and development
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3,302
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4,045
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5,939
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Total Operating Expenses
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20,120
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19,728
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21,666
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Operating Income
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55,957
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60,541
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38,197
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Non-operating (loss) income, net
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(14,425
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)
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10,797
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4,707
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Income Before Income Tax Provision
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41,532
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71,338
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42,904
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Income tax provision
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12,582
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16,074
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11,178
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Net Income
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28,950
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55,264
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31,726
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Net income attributable to noncontrolling interests
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14,964
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18,204
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8,662
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Net income attributable to Photronics, Inc. shareholders
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$
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13,986
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$
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37,060
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$
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23,064
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Earnings per share:
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Basic
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$
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0.23
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$
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0.61
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$
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0.38
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Diluted
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$
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0.23
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$
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0.60
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$
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0.38
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||||||
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Weighted-average number of common shares outstanding:
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Basic
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60,894
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60,773
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60,158
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Diluted
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61,470
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61,374
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60,936
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Exhibit 99.3
PHOTRONICS, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
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January 29,
2023
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October 31,
2022
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Assets
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Current assets:
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Cash and cash equivalents
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$
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334,792
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$
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319,680
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Short-term investments
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39,199
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38,820
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Accounts receivable
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220,692
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198,147
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Inventories
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52,796
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50,753
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Other current assets
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53,337
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37,252
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Total current assets
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700,816
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644,652
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Property, plant and equipment, net
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710,927
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643,873
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Other assets
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29,937
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27,305
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Total assets
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$
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1,441,680
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$
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1,315,830
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Liabilities and Equity
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Current liabilities:
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Current portion of long-term debt
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$
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6,541
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$
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10,024
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Accounts payable and accrued liabilities
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192,790
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183,773
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Total current liabilities
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199,331
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193,797
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Long-term debt
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27,323
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32,310
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Other liabilities
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32,306
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27,634
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Photronics, Inc. shareholders' equity
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920,765
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831,527
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Noncontrolling interests
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261,955
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230,562
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Total equity
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1,182,720
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1,062,089
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Total liabilities and equity
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$
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1,441,680
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$
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1,315,830
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Exhibit 99.4
PHOTRONICS, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
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Three Months Ended
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||||||||
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January 29,
2023
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January 30,
2022
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|||||||
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Cash flows from operating activities:
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Net income
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$
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28,950
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$
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31,726
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Adjustments to reconcile net income to net cash provided by operating activities:
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Depreciation and amortization
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19,105
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20,810
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Share-based compensation
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1,821
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1,457
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Changes in operating assets, liabilities and other
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(22,196
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)
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5,137
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|||||
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Net cash provided by operating activities
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27,680
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59,130
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||||||
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Cash flows from investing activities:
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Purchases of property, plant and equipment
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(31,097
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)
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(19,175
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)
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||||
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Government incentives
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1,014
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-
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||||||
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Other
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(87
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)
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(43
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)
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Net cash used in investing activities
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(30,170
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)
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(19,218
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)
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Cash flows from financing activities:
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Repayments of debt
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(9,218
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)
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(15,192
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)
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Purchases of treasury stock
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-
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(2,522
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)
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|||||
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Contributions from noncontrolling interest
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-
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14,997
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||||||
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Proceeds from share-based arrangements
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672
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3,840
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||||||
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Net settlements of restricted stock awards
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(1,168
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)
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(1,458
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)
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||||
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Net cash used in financing activities
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(9,714
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)
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(335
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)
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Effects of exchange rate changes on cash, cash equivalents, and restricted cash
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27,499
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(2,057
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)
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Net increase in cash, cash equivalents, and restricted cash
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15,295
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37,520
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||||||
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Cash, cash equivalents, and restricted cash, beginning of period
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322,409
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279,680
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Cash, cash equivalents, and restricted cash, end of period
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$
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337,704
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$
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317,200
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Exhibit 99.5
PHOTRONICS, INC.
Reconciliation of GAAP to Non-GAAP Financial Information
(in thousands)
(Unaudited)
|
Three Months ended
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January 29,
2023
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October 31,
2022
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January 30,
2022
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Reconciliation of GAAP to Non-GAAP Net Income:
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GAAP Net Income
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$
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13,986
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$
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37,060
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$
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23,064
|
||||||
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FX (gain) loss
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16,944
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(10,369
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)
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(5,268
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)
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|||||||
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Estimated tax effects of above
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(4,506
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)
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2,522
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1,337
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||||||||
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Estimated noncontrolling interest effects of above
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(2,060
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)
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1,990
|
96
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||||||||
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Non-GAAP Net Income
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$
|
24,364
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$
|
31,203
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$
|
19,229
|
||||||
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Weighted-average number of common shares outstanding - Diluted
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61,470
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61,374
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60,936
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|||||||||
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Reconciliation of GAAP to Non-GAAP EPS:
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GAAP diluted earnings per share
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$
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0.23
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$
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0.60
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$
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0.38
|
||||||
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Effects of the above adjustments
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$
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0.17
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$
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(0.10
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)
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$
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(0.06
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)
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||||
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Non-GAAP diluted earnings per share
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$
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0.40
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$
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0.51
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$
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0.32
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Note: Totals may differ due to rounding.
PHOTRONICS, INC.
Reconciliation of GAAP to Non-GAAP Financial Information (cont.)
(in thousands)
(Unaudited)
|
Reconciliation of Net cash provided by operating activities to Free Cash Flow
|
||||||||||||||||
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Three Months ended
|
Year ended
|
|||||||||||||||
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January 29,
2023
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October 31,
2022
|
October 31,
2021
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Target Model
Two-year Horizon
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|||||||||||||
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GAAP Net cash provided by operating activities
|
$
|
27,680
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$
|
275,187
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$
|
150,772
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$
|
350,000 - 400,000
|
||||||||
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Purchases of property, plant and equipment
|
(31,097
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)
|
(112,338
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)
|
(109,099
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)
|
(100,000
|
)
|
||||||||
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Government Incentives
|
1,014
|
3,615
|
5,775
|
-
|
||||||||||||
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Free Cash Flow
|
$
|
(2,403
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)
|
$
|
166,464
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$
|
47,448
|
$
|
250,000 - 300,000
|
|||||||
|
Reconciliation of Free Cash flow to LTM Free Cash Flow:
|
||||
|
Free Cash Flow
|
||||
|
Three Months ended January 29, 2023
|
$
|
(2,403
|
)
|
|
|
Year-ended October 31, 2022
|
166,464
|
|||
|
Three Months ended January 30, 2022
|
(39,955
|
)
|
||
|
LTM January 29, 2023
|
$
|
124,106
|
||
|
Reconciliation of Cash and cash equivalents to Net Cash:
|
||||||||||||
|
As of
|
||||||||||||
|
January 29,
2023
|
October 31,
2022
|
January 30,
2022
|
||||||||||
|
Cash and cash equivalents
|
$
|
334,792
|
$
|
319,680
|
$
|
314,195
|
||||||
|
Short-term investments
|
39,199
|
38,820
|
-
|
|||||||||
|
Current portion of Long-term debt
|
(6,541
|
)
|
(10,024
|
)
|
(18,307
|
)
|
||||||
|
Long-term Debt
|
(27,323
|
)
|
(32,310
|
)
|
(78,540
|
)
|
||||||
|
Net Cash
|
$
|
340,127
|
$
|
316,166
|
$
|
217,348
|
||||||
Exhibit 99.6
