Photronics Reports Full Year and Fourth Quarter Fiscal 2020 Results

Rhea-AI Summary

Photronics, Inc. (NASDAQ:PLAB) reported a record annual revenue of $609.7 million for 2020, an 11% increase from 2019. The fourth quarter revenue was $149.3 million, reflecting a 5% decline sequentially and 4% year-over-year. Net income for 2020 was $33.8 million ($0.52 per diluted share), while the fourth quarter net income was $6.5 million ($0.10 per diluted share). For Q1 2021, Photronics anticipates revenue between $145 million and $155 million with diluted EPS guidance of $0.07 to $0.14.

Positive

• Record annual revenue of $609.7 million, up 11% year-over-year.
• IC revenue was $418.4 million, up 3% compared to last year.
• FPD revenue reached a record $191.3 million, up 32% year-over-year.
• Increased cash balance of $278.7 million and invested in organic growth.
• Positive guidance for Q1 2021 with revenue expected between $145 million and $155 million.

Negative

• Fourth quarter revenue decreased by 5% sequentially and 4% year-over-year.
• Q4 IC revenue dropped 3% sequentially and 6% year-over-year.
• Q4 FPD revenue declined 12% sequentially and was down 1% year-over-year.
• Net income in Q4 2020 fell to $6.5 million from $10.8 million in Q3 2020.

• 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

 

FAQ

What were Photronics' total revenues for 2020?

Photronics reported total revenues of $609.7 million for the year 2020.

How did Photronics' fourth quarter revenue perform compared to the previous quarter?

In the fourth quarter of 2020, Photronics' revenue was $149.3 million, down 5% sequentially.

What is the earnings guidance for Photronics in the first quarter of 2021?

For Q1 2021, Photronics expects revenue between $145 million and $155 million.

What was the net income for Photronics in the fourth quarter of 2020?

Photronics reported a net income of $6.5 million or $0.10 per diluted share for Q4 2020.

How did operating income change for Photronics in Q4 2020?

Operating income for Photronics decreased due to lower revenue and profit margins in Q4 2020.