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Photronics Reports Second Quarter Fiscal 2024 Results

Photronics, Inc.
Photronics, Inc.

BROOKFIELD, Conn., May 22, 2024 (GLOBE NEWSWIRE) -- Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in photomask technologies and solutions, today reported financial results for its second quarter of fiscal year 2024 ended April 28, 2024.

“Second quarter revenue and gross margin were in line with the first quarter as positive seasonality trends were offset by business headwinds primarily related to temporary soft demand following the Chinese New Year holiday and the impact from earthquakes in Taiwan beginning in early April,” said Frank Lee, chief executive officer. “Order rates, which typically pause during Lunar New Year, have recovered at a slower rate than we typically observe. In addition, the recent earthquakes in Taiwan caused a loss of production across both IC and FPD, resulting in an approximately $3 million revenue impact. Despite these challenges, we maintained gross margin as the global Photronics team performed well, serving our customers by quickly and efficiently recovering from the disruptions. We achieved good earnings and cash generation, further strengthening our balance sheet and positioning us to continue investing in profitable growth. We are building momentum for solid performance in 2024 and beyond.”

Second Quarter Fiscal 2024 Results

  • Revenue was $217.0 million, down 5% year-over-year and up 0.3% sequentially

  • GAAP net income attributable to Photronics, Inc. shareholders was $36.3 million, or $0.58 per diluted share, compared with $39.9 million, or $0.65 per diluted share in the second quarter 2023 and $26.2 million, or $0.42 per diluted share in the first quarter of 2024

  • Non-GAAP net income attributable to Photronics, Inc. shareholders was $28.7 million, or $0.46 per diluted share, compared with $32.9 million, or $0.54 per diluted share in the second quarter 2023 and $29.9 million, or $0.48 per diluted share in the first quarter of 2024

  • IC revenue was $160.9 million, down 4% year-over-year and up 2% sequentially

  • FPD revenue was $56.1 million, down 10% from the same quarter last year and 5% sequentially

  • Cash generated from operating activities was $76.5 million, and cash invested in organic growth through capital expenditures was $20.0 million

  • Cash balance at the end of the quarter was $539.2 million, with $20.7 million in short-term investments and $21.8 million in debt

ADVERTISEMENT

Third Quarter Fiscal 2024 Guidance

For the third quarter of fiscal 2024, Photronics expects revenue to be between $221 million and $229 million and non-GAAP net income attributable to Photronics, Inc. shareholders to be between $0.53 and $0.59 per diluted share.

Webcast

A webcast to discuss these results is scheduled for 8:30 a.m. Eastern time on Wednesday, May 22, 2024. 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, 2023, the company had approximately 1,885 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 in our most recent SEC filings. 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, non-GAAP earnings per share, 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 pages.

 

PHOTRONICS, INC.

Condensed Consolidated Statements of Income

(in thousands, except per share amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

April 28,

 

January 28,

 

April 30,

 

April 28,

 

April 30,

 

2024

 

2024

 

2023

 

2024

 

2023

 

 

 

 

 

 

 

 

 

 

Revenue

$

217,000

 

 

$

216,334

 

 

$

229,306

 

 

$

433,334

 

 

$

440,397

 

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

137,749

 

 

 

137,079

 

 

 

140,904

 

 

 

274,828

 

 

 

275,918

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

79,251

 

 

 

79,255

 

 

 

88,402

 

 

 

158,506

 

 

 

164,479

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

18,996

 

 

 

18,321

 

 

 

17,878

 

 

 

37,317

 

 

 

34,696

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

4,292

 

 

 

3,445

 

 

 

3,479

 

 

 

7,736

 

 

 

6,781

 

 

 

 

 

 

 

 

 

 

 

Total Operating Expenses

 

23,288

 

 

 

21,766

 

 

 

21,357

 

 

 

45,053

 

 

 

41,477

 

 

 

 

 

 

 

 

 

 

 

Other operating gain

 

89

 

 

 

-

 

 

 

-

 

 

 

89

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

56,052

 

 

 

57,489

 

 

 

67,045

 

 

 

113,542

 

 

 

123,002

 

 

 

 

 

 

 

 

 

 

 

Non-operating (loss) income, net

 

20,534

 

 

 

(3,747

)

 

 

13,571

 

 

 

16,786

 

 

 

(854

)

 

 

 

 

 

 

 

 

 

 

Income Before Income Tax Provision

 

76,586

 

 

 

53,742

 

 

 

80,616

 

 

 

130,328

 

 

 

122,148

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

20,214

 

 

 

14,660

 

 

 

21,343

 

 

 

34,874

 

 

 

33,925

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

56,372

 

 

 

39,082

 

 

 

59,273

 

 

 

95,454

 

 

 

88,223

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to noncontrolling interests

 

20,121

 

 

 

12,902

 

 

 

19,344

 

 

 

33,023

 

 

 

34,308

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Photronics, Inc. shareholders

$

36,251

 

 

$

26,180

 

 

$

39,929

 

 

$

62,431

 

 

$

53,915

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.59

 

 

$

0.43

 

 

$

0.65

 

 

$

1.01

 

 

$

0.88

 

 

 

 

 

 

 

 

 

 

 

Diluted

$

0.58

 

 

$

0.42

 

 

$

0.65

 

 

$

1.00

 

 

$

0.88

 

 

 

 

 

 

 

 

 

 

 

Weighted-average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

61,771

 

 

 

61,455

 

 

 

61,138

 

 

 

61,613

 

 

 

61,016

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

62,409

 

 

 

62,283

 

 

 

61,507

 

 

 

62,346

 

 

 

61,489

 

 

 

 

 

 

 

 

 

 

 


PHOTRONICS, INC.

Condensed Consolidated Balance Sheets

(in thousands)

(Unaudited)

 

 

 

 

 

 

April 28,

 

October 31,

 

2024

 

2023

 

 

 

 

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

539,160

 

 

$

499,292

 

Short-term investments

 

20,732

 

 

 

12,915

 

Accounts receivable

 

197,523

 

 

 

194,927

 

Inventories

 

54,257

 

 

 

49,963

 

Other current assets

 

32,461

 

 

 

28,353

 

 

 

 

 

Total current assets

 

844,133

 

 

 

785,450

 

 

 

 

 

Property, plant and equipment, net

 

729,489

 

 

 

709,244

 

Other assets

 

29,831

 

 

 

31,527

 

 

 

 

 

Total assets

$

1,603,453

 

 

$

1,526,221

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

Current portion of long-term debt

$

19,318

 

 

$

6,621

 

Accounts payable and accrued liabilities

 

176,249

 

 

 

178,602

 

 

 

 

 

Total current liabilities

 

195,567

 

 

 

185,223

 

 

 

 

 

Long-term debt

 

2,456

 

 

 

17,998

 

Other liabilities

 

37,401

 

 

 

47,391

 

 

 

 

 

Photronics, Inc. shareholders' equity

 

1,034,857

 

 

 

975,008

 

Noncontrolling interests

 

333,172

 

 

 

300,601

 

Total equity

 

1,368,029

 

 

 

1,275,609

 

 

 

 

 

Total liabilities and equity

$

1,603,453

 

 

$

1,526,221

 

 

 

 

 


PHOTRONICS, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

Six Months Ended

 

April 28,

 

April 30,

 

2024

 

2023

 

 

 

 

Cash flows from operating activities:

 

 

 

Net income

$

95,454

 

 

$

88,223

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

41,487

 

 

 

39,085

 

Share-based compensation

 

6,499

 

 

 

3,830

 

Changes in operating assets, liabilities and other

 

(25,446

)

 

 

(21,461

)

 

 

 

 

Net cash provided by operating activities

 

117,994

 

 

 

109,677

 

 

 

 

 

Cash flows from investing activities:

 

 

 

Purchases of property, plant and equipment

 

(63,311

)

 

 

(57,728

)

Purchases of available-for-sale debt securities

 

(16,551

)

 

 

(9,837

)

Proceeds from maturities of available-for-sale debt securities

 

9,000

 

 

 

4,000

 

Government incentives

 

1,419

 

 

 

1,393

 

Other

 

(6

)

 

 

(88

)

 

 

 

 

Net cash used in investing activities

 

(69,449

)

 

 

(62,260

)

 

 

 

 

Cash flows from financing activities:

 

 

 

Repayments of debt

 

(2,844

)

 

 

(14,720

)

Proceeds from share-based arrangements

 

1,055

 

 

 

730

 

Net settlements of restricted stock awards

 

(2,938

)

 

 

(1,252

)

 

 

 

 

Net cash used in financing activities

 

(4,727

)

 

 

(15,242

)

 

 

 

 

Effects of exchange rate changes on cash, cash equivalents, and restricted cash

 

(3,839

)

 

 

15,621

 

 

 

 

 

Net increase in cash, cash equivalents, and restricted cash

 

39,979

 

 

 

47,796

 

Cash, cash equivalents, and restricted cash, beginning of period

 

501,867

 

 

 

322,409

 

 

 

 

 

Cash, cash equivalents, and restricted cash, end of period

$

541,846

 

 

$

370,205

 

 

 

 

 


PHOTRONICS, INC.

Reconciliation of GAAP to Non-GAAP Financial Information

(in thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months ended

 

April 28,

 

January 28,

 

April 30,

 

2024

 

2024

 

2023

 

 

 

 

 

 

Reconciliation of GAAP to Non-GAAP Net Income:

 

 

 

 

 

 

 

 

 

 

 

GAAP Net Income

$

36,251

 

 

$

26,180

 

 

$

39,929

 

FX (gain) loss

 

(14,766

)

 

 

8,909

 

 

 

(10,718

)

Estimated tax effects of above

 

3,743

 

 

 

(2,244

)

 

 

2,823

 

Estimated noncontrolling interest effects of above

 

3,489

 

 

 

(2,939

)

 

 

901

 

Non-GAAP Net Income

$

28,717

 

 

$

29,906

 

 

$

32,935

 

 

 

 

 

 

 

Weighted-average number of common shares outstanding - Diluted

 

62,409

 

 

 

62,283

 

 

 

61,507

 

 

 

 

 

 

 

Reconciliation of GAAP to Non-GAAP EPS:

 

 

 

 

 

 

 

 

 

 

 

GAAP diluted earnings per share

$

0.58

 

 

$

0.42

 

 

$

0.65

 

Effects of the above adjustments

$

(0.12

)

 

$

0.06

 

 

$

(0.11

)

Non-GAAP diluted earnings per share

$

0.46

 

 

$

0.48

 

 

$

0.54

 

 

 

 

 

 

 


PHOTRONICS, INC.

Reconciliation of GAAP to Non-GAAP Financial Information (cont.)

(in thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Cash and cash equivalents to Net Cash:

 

 

 

 

 

 

As of

 

April 28,

 

October 31,

 

April 30,

 

2024

 

2023

 

2023

 

 

 

 

 

 

Cash and cash equivalents

$

539,160

 

 

$

499,292

 

 

$

367,485

 

 

 

 

 

 

 

Current portion of Long-term debt

 

(19,318

)

 

 

(6,621

)

 

 

(7,017

)

 

 

 

 

 

 

Long-term Debt

 

(2,456

)

 

 

(17,998

)

 

 

(21,322

)

 

 

 

 

 

 

Net Cash

$

517,386

 

 

$

474,673

 

 

$

339,146

 

 

 

 

 

 

 

For Further Information:
Eric Rivera
Vice President & Interim CFO
203.740.5283
erivera@photronics.com