Photronics Reports Third Quarter Fiscal 2020 Results

Rhea-AI Summary

Photronics, Inc. reported a strong fiscal Q3 2020 performance, with revenue of $157.9 million, marking an 11% sequential increase and a 14% year-over-year rise. Net income for shareholders reached $10.8 million or $0.17 per diluted share. Notably, integrated circuit revenue grew to $108.7 million, up 12% sequentially, while flat panel display revenue hit $49.2 million, up 30% year-over-year. Looking ahead, the company anticipates Q4 revenue between $148 million and $158 million and diluted EPS between $0.12 and $0.19.

Positive

• Q3 revenue increased 11% sequentially and 14% year-over-year.
• Net income rose to $10.8 million, up from $6.3 million in Q2 2020.
• Integrated circuit revenue grew 12% sequentially and 8% year-over-year.
• Flat panel display revenue increased 30% year-over-year.

Negative

• None.

• Third quarter 2020 revenue was $157.9 million, up 11% sequentially and 14% year-over-year
• Net income attributable to Photronics, Inc. shareholders was $10.8 million, or $0.17 per diluted share
• Cash provided by operating activities was $16.9 million, resulting in a cash balance of $260.6 million
• Fourth quarter 2020 guidance: revenue between $148 and $158 million with diluted EPS between $0.12 and $0.19

BROOKFIELD, Conn., Aug. 27, 2020 (GLOBE NEWSWIRE) --  Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in photomask technologies and solutions, today reported financial results for its fiscal 2020 third quarter ended August 2, 2020.

Third quarter revenue was $157.9 million, 11% better than the previous quarter and 14% better than the same quarter last year. Integrated circuit (IC) revenue was $108.7 million, up 12% sequentially and 8% compared with the third quarter of last year. Flat panel display (FPD) revenue was $49.2 million, up 7% compared with last quarter and 30% compared with the same period last year.

Net income attributable to Photronics, Inc. shareholders was $10.8 million ($0.17 per diluted share), compared with $6.3 million ($0.10 per diluted share) for the second quarter of 2020 and $6.3 million ($0.10 per diluted share) for the third quarter of 2019.

"Customer demand improved this quarter, and we achieved double-digit revenue growth rates compared with last quarter and last year due to our diverse market position and technology leadership,” said Peter Kirlin, chief executive officer. “China demand recovered for both IC and FPD, with total revenue of product shipped to China increasing 10% compared with the previous quarter. From a market perspective, mainstream IC and high-end FPD were notable areas of strength. We were able to leverage the growth in revenues to expand profit margins, while also managing expenses, resulting in 12.6% operating margin and $0.17 earnings per diluted share. Our cash balance grew to $260.6 million, providing us with financial strength and flexibility as we look to continue our strategic growth investments. We are well placed to pursue attractive organic growth opportunities and expand our leadership position.”

Fourth Quarter 2020 Guidance

For the fourth quarter of 2020, Photronics expects revenue to be between $148 million and $158 million, and net income attributable to Photronics, Inc. shareholders to be between $0.12 and $0.19 per diluted share.

Conference Call

A conference call to discuss these results is scheduled for 8:30 a.m. Eastern time on Thursday, August 27, 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.

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 50 years. As of October 31, 2019, the company had 1,775 employees. The company has 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 the 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, 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												Nine Months Ended
				August 2,				May 3,				July 28,				August 2,			July 28,
					2020				2020				2019				2020			2019
Revenue				$	157,895			$	142,774			$	138,112			$	460,405		$	394,404
Cost of goods sold					120,161				112,341				107,542				357,636			311,721
Gross profit					37,734				30,433				30,570				102,769			82,683
Operating Expenses:
Selling, general and administrative					13,306				13,267				13,124				40,792			40,186
Research and development					4,492				4,462				4,046				13,034			11,852
Total Operating Expenses					17,798				17,729				17,170				53,826			52,038
Operating income					19,936				12,704				13,400				48,943			30,645
Other (expense) income, net					(2,135	)			(951	)			(348	)			610			4,692
Income before income taxes					17,801				11,753				13,052				49,553			35,337
Income tax provision					4,937				3,781				3,218				17,789			7,883
Net income					12,864				7,972				9,834				31,764			27,454
Net income attributable to noncontrolling interests					2,088				1,688				3,487				4,404			7,361
Net income attributable to Photronics, Inc. shareholders				$	10,776			$	6,284			$	6,347			$	27,360		$	20,093
Earnings per share:
Basic				$	0.17			$	0.10			$	0.10			$	0.42		$	0.30
Diluted				$	0.17			$	0.10			$	0.10			$	0.42		$	0.30
Weighted-average number of common shares outstanding:
Basic					64,780				64,937				66,313				65,090			66,386
Diluted					65,247				65,417				66,570				65,704			69,919

PHOTRONICS, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
				August 2,			October 31,
					2020			2019
Assets
Current assets:
Cash and cash equivalents				$	260,597		$	206,530
Accounts receivable					146,843			134,454
Inventories					54,733			48,155
Other current assets					48,468			38,388
Total current assets					510,641			427,527
Property, plant and equipment, net					623,247			632,441
Intangible assets, net					4,535			7,870
Other assets					57,419			50,827
Total assets				$	1,195,842		$	1,118,665
Liabilities and Equity
Current liabilities:
Debt				$	14,683		$	10,873
Accounts payable and accrued liabilities					160,626			141,081
Total current liabilities					175,309			151,954
Long-term debt					38,183			41,887
Other liabilities					25,665			13,732
Photronics, Inc. shareholders' equity					790,242			769,892
Noncontrolling interests					166,443			141,200
Total equity					956,685			911,092
Total liabilities and equity				$	1,195,842		$	1,118,665

PHOTRONICS, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
					Nine Months Ended
					August 2,				July 28,
						2020				2019
Cash flows from operating activities:
Net income					$	31,764			$	27,454
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization						71,120				60,387
Share-based compensation						3,773				2,871
Changes in operating assets, liabilities and other						(28,393	)			(67,208	)
Net cash provided by operating activities						78,264				23,504
Cash flows from investing activities:
Purchases of property, plant and equipment						(36,693	)			(160,149	)
Government incentive						5,263				17,694
Other						(139	)			(24	)
Net cash used in investing activities						(31,569	)			(142,479	)
Cash flows from financing activities:
Proceeds from long-term debt						5,699				53,227
Contribution from noncontrolling interest						17,596				29,394
Purchase of treasury stock						(16,894	)			(10,696	)
Repayments of debt						(5,929	)			(61,319	)
Proceeds from share-based arrangements						3,869				1,314
Dividends paid to noncontrolling interests						-				(26,102	)
Other						(248	)			(92	)
Net cash provided by (used in) financing activities						4,093				(14,274	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash						3,486				1,206
Net increase (decrease) in cash, cash equivalents, and restricted cash						54,274				(132,043	)
Cash, cash equivalents, and restricted cash, beginning of period						209,291				331,989
Cash, cash equivalents, and restricted cash, end of period					$	263,565			$	199,946

For Further Information:
R. Troy Dewar, CFA
Vice President, Investor Relations
(203) 740-5610
tdewar@photronics.com 

FAQ

What was Photronics, Inc. revenue for Q3 2020?

Photronics reported revenue of $157.9 million for Q3 2020.

What was the net income for Photronics in Q3 2020?

Net income attributable to Photronics shareholders was $10.8 million, or $0.17 per diluted share.

What are the revenue projections for Photronics in Q4 2020?

Photronics expects Q4 2020 revenue to be between $148 million and $158 million.

How much did Photronics' cash balance grow in Q3 2020?

The cash balance increased to $260.6 million.

What was the operating margin for Photronics in Q3 2020?

Photronics achieved an operating margin of 12.6% in Q3 2020.