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Photronics Reports Second Quarter Fiscal 2024 Results

Wednesday, May 22, 2024 06:30 AM | GlobeNewswire via QuoteMedia

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Photronics Reports Second Quarter Fiscal 2024 Results

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

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


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