Photronics Reports Second Quarter Fiscal 2018 Results
- Second quarter 2018 revenue was $130.8 million, up 6% sequentially and 21% year-over-year
- High-end IC revenue surged 83% year-over-year on strong demand from Asia foundries
- Net income attributable to Photronics, Inc. shareholders was $10.7 million ($0.15 per diluted share)
- Third quarter 2018 guidance: revenue between $128 and $136 million with diluted EPS between $0.12 and $0.18
BROOKFIELD, Conn., May 22, 2018 (GLOBE NEWSWIRE) -- Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in supplying innovative imaging technology solutions for the global electronics industry, today reported financial results for its fiscal 2018 second quarter ended April 29, 2018.
Second quarter revenue was $130.8 million, increases of 6% sequentially and 21% compared with the same quarter prior year. Integrated circuit (IC) revenue was $102.3 million, up 7% sequentially and 24% compared with last year. Flat panel display (FPD) revenue was $28.5 million, up 3% sequentially and 11% compared with last year.
Net income attributable to Photronics, Inc. shareholders was $10.7 million ($0.15 per diluted share), compared with $5.9 million ($0.09 per diluted share) for the first quarter of 2018 and $1.8 million ($0.03 per diluted share) for the second quarter of 2017.
"Performance strengthened again in the second quarter, continuing the sequential revenue growth of the past four quarters,” said Peter Kirlin, chief executive officer. “High-end IC was especially strong year-over-year, up 83%. Sequentially, IC continued to improve in both logic and memory, as customers, particularly Asia foundries, released new designs. High-end FPD was down slightly on soft AMOLED demand, but mainstream improved due to growth in LTPS LCD displays. Operating margin improved with the growth in revenue, although tempered slightly by higher operating expenses. Minority interest increased due to strong earnings from our Taiwan JV, and a foreign exchange gain contributed to the bottom line, resulting in net income of $10.7 million. We ended the quarter with a cash balance of $321 million, which will be very important as we anticipate a ramp of capital expenditures later this year for our new facilities in China.”
Third Quarter 2018 Guidance
For the third quarter of 2018, Photronics expects revenue to be between $128 million and $136 million, and net income attributable to Photronics, Inc. shareholders to be between $0.12 and $0.18 per diluted share.
Conference Call
A conference call to discuss these results is scheduled for 8:30 a.m. Eastern time on Tuesday, May 22, 2018. The call can be accessed by logging onto Photronics' web site 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’ web site for instant replay access.
About Photronics
Photronics is a leading worldwide manufacturer of photomasks. Photomasks are high precision quartz plates that contain microscopic images of electronic circuits. A key element in the manufacture of semiconductors and flat panel displays, photomasks are used to transfer circuit patterns onto semiconductor wafers and flat panel display substrates during the fabrication of integrated circuits, a variety of flat panel displays and, to a lesser extent, other types of electrical and optical components. They are produced in accordance with product designs provided by customers at strategically located manufacturing facilities in Asia, Europe, and North America. Additional information on the Company can be accessed at www.photronics.com
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements made by or on behalf of Photronics, Inc. and its subsidiaries (the Company). The forward-looking statements contained in this press release and other parts of Photronics’ web site involve risks and uncertainties that may affect the Company’s operations, markets, products, services, prices, and other factors. These risks and uncertainties include, but are not limited to, economic, competitive, legal, governmental, and technological factors as well as decisions we may make in the future regarding our business, capital structure and other matters. These forward-looking statements generally can be identified by phrases such as “believes”, “expects”, “anticipates”, “plans”, “projects”, and similar expressions. Accordingly, there is no assurance that the Company’s expectations will be realized. For a fuller discussion of the factors that may affect the Company's operations, see "Forward Looking Statements" in the Company's Quarterly and Annual Reports to the Securities and Exchange Commission on Forms 10-Q and 10-K. The Company assumes no obligation to provide revisions to any forward-looking statements.
| PHOTRONICS, INC. | ||||||||||||||||||||||
| Condensed Consolidated Statements of Income | ||||||||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||
| April 29, | January 28, | April 30, | April 29, | April 30, | ||||||||||||||||||
| 2018 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||
| Revenue | $ | 130,779 | $ | 123,446 | $ | 108,297 | $ | 254,225 | $ | 218,128 | ||||||||||||
| Cost of goods sold | (97,960 | ) | (95,784 | ) | (88,140 | ) | (193,744 | ) | (174,972 | ) | ||||||||||||
| Gross profit | 32,819 | 27,662 | 20,157 | 60,481 | 43,156 | |||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||
| Selling, general and administrative | (13,637 | ) | (11,750 | ) | (10,894 | ) | (25,387 | ) | (21,765 | ) | ||||||||||||
| Research and development | (3,817 | ) | (4,104 | ) | (3,726 | ) | (7,921 | ) | (7,211 | ) | ||||||||||||
| Total Operating Expenses | (17,454 | ) | (15,854 | ) | (14,620 | ) | (33,308 | ) | (28,976 | ) | ||||||||||||
| Operating income | 15,365 | 11,808 | 5,537 | 27,173 | 14,180 | |||||||||||||||||
| Other income (expense), net | 3,332 | (4,105 | ) | (3,622 | ) | (774 | ) | (5,705 | ) | |||||||||||||
| Income before income taxes | 18,697 | 7,703 | 1,915 | 26,399 | 8,475 | |||||||||||||||||
| Income tax (provision) benefit | (3,508 | ) | 1,778 | (431 | ) | (1,729 | ) | (2,481 | ) | |||||||||||||
| Net income | 15,189 | 9,481 | 1,484 | 24,670 | 5,994 | |||||||||||||||||
| Net income attributable to noncontrolling interests | (4,524 | ) | (3,583 | ) | 313 | (8,107 | ) | (2,251 | ) | |||||||||||||
| Net income attributable to Photronics, Inc. shareholders | $ | 10,665 | $ | 5,898 | $ | 1,797 | $ | 16,563 | $ | 3,743 | ||||||||||||
| Earnings per share: | ||||||||||||||||||||||
| Basic | $ | 0.15 | $ | 0.09 | $ | 0.03 | $ | 0.24 | $ | 0.05 | ||||||||||||
| Diluted | $ | 0.15 | $ | 0.09 | $ | 0.03 | $ | 0.23 | $ | 0.05 | ||||||||||||
| Weighted-average number of common shares outstanding: | ||||||||||||||||||||||
| Basic | 69,293 | 68,755 | 68,426 | 69,024 | 68,301 | |||||||||||||||||
| Diluted | 75,190 | 69,372 | 69,385 | 75,052 | 69,277 | |||||||||||||||||
| PHOTRONICS, INC. | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (in thousands) | ||||||||
| (Unaudited) | ||||||||
| April 29, | October 29, | |||||||
| 2018 | 2017 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 321,246 | $ | 308,021 | ||||
| Accounts receivable | 124,331 | 105,320 | ||||||
| Inventories | 31,936 | 23,703 | ||||||
| Other current assets | 22,786 | 12,080 | ||||||
| Total current assets | 500,299 | 449,124 | ||||||
| Property, plant and equipment, net | 563,313 | 535,197 | ||||||
| Intangible assets, net | 14,708 | 17,122 | ||||||
| Other assets | 23,961 | 19,351 | ||||||
| Total assets | $ | 1,102,281 | $ | 1,020,794 | ||||
| Liabilities and Equity | ||||||||
| Current liabilities: | ||||||||
| Current portion of long-term borrowings | $ | 59,263 | $ | 4,639 | ||||
| Accounts payable and accrued liabilities | 107,245 | 77,137 | ||||||
| Total current liabilities | 166,508 | 81,776 | ||||||
| Long-term borrowings | - | 57,337 | ||||||
| Other liabilities | 17,707 | 16,386 | ||||||
| Photronics, Inc. shareholders' equity | 783,380 | 744,564 | ||||||
| Noncontrolling interests | 134,686 | 120,731 | ||||||
| Total equity | 918,066 | 865,295 | ||||||
| Total liabilities and equity | $ | 1,102,281 | $ | 1,020,794 | ||||
| PHOTRONICS, INC. | |||||||||||
| Condensed Consolidated Statements of Cash Flows | |||||||||||
| (in thousands) | |||||||||||
| (Unaudited) | |||||||||||
| Six Months Ended | |||||||||||
| April 29, | April 30, | ||||||||||
| 2018 | 2017 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 24,670 | $ | 5,994 | |||||||
| Adjustments to reconcile net income to net cash | |||||||||||
| provided by operating activities: | |||||||||||
| Depreciation and amortization | 44,429 | 42,241 | |||||||||
| Changes in operating assets, liabilities and other | (31,191 | ) | (1,328 | ) | |||||||
| Net cash provided by operating activities | 37,908 | 46,907 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Purchases of property, plant and equipment | (44,129 | ) | (14,152 | ) | |||||||
| Acquisition of business | - | (5,400 | ) | ||||||||
| Proceeds from sale of investments | - | 167 | |||||||||
| Other | 436 | (462 | ) | ||||||||
| Net cash used in investing activities | (43,693 | ) | (19,847 | ) | |||||||
| Cash flows from financing activities: | |||||||||||
| Repayments of long-term borrowings | (2,771 | ) | (2,695 | ) | |||||||
| Contribution from noncontrolling interest | 11,998 | - | |||||||||
| Proceeds from share-based arrangements | 3,776 | 2,311 | |||||||||
| Other | (267 | ) | (23 | ) | |||||||
| Net cash provided by (used in) financing activities | 12,736 | (407 | ) | ||||||||
| Effect of exchange rate changes on cash | 6,274 | 4,997 | |||||||||
| Net increase in cash and cash equivalents | 13,225 | 31,650 | |||||||||
| Cash and cash equivalents, beginning of period | 308,021 | 314,074 | |||||||||
| Cash and cash equivalents, end of period | $ | 321,246 | $ | 345,724 | |||||||
For Further Information:
R. Troy Dewar, CFA
Director, Investor Relations
(203) 740-5610
tdewar@photronics.com
