Photronics Reports First Quarter Fiscal 2023 Results
21 Février 2023 - 12:45AM
Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in photomask
technologies and solutions, today reported financial results for
its fiscal first quarter 2023 ended January 29, 2023.
“We made a great start to 2023 and grew revenue
sequentially, as both IC and FPD high-end businesses improved due
to ongoing design-driven demand,” said Frank Lee, chief executive
officer. “IC growth was driven by high-end demand from Asian
foundries; FPD benefited from increased G10.5+ demand and continued
strength in mobile displays.
“Profit margins were somewhat softer than the
previous quarter primarily due to less favorable mix and somewhat
lower customer premiums to accelerate delivery. Operating cash
generation continued strong, which enables us to continue investing
in organic growth and maintain a strong balance sheet to support
our strategy and help navigate economic uncertainty. I am proud of
the performance of the entire Photronics team.”
First Quarter 2023 Results
- Revenue was $211.1 million up 0.4%
sequentially and 11% year-over-year
- GAAP net income attributable to
Photronics, Inc. shareholders was $14.0 million ($0.23 per diluted
share), compared with $37.1 million ($0.60 per diluted share) in
the fourth quarter of 2022 and $23.1 million ($0.38 per diluted
share) in the first quarter 2022
- Non-GAAP net income attributable to
Photronics, Inc. shareholders was $24.4 million ($0.40 per diluted
share), compared with $31.2 million ($0.51 per diluted share) in
the fourth quarter of 2022 and $19.2 million ($0.32 per diluted
share) in the first quarter 2022
- IC revenue was $156.6 million, up
0.2% sequentially and 21% year-over-year
- FPD revenue was $54.5 million, up
1% sequentially and 9% less than same quarter last year
- Cash generated from operating
activities was $28 million, and cash invested in growth through
capital expenditures was $31 million
Second Quarter 2023
Guidance
For the second quarter of 2023, Photronics
expects revenue to be between $205 million and $215 million and net
income attributable to Photronics, Inc. shareholders to be between
$0.38 and $0.48 per diluted share.
Webcast
A webcast to discuss these results is scheduled
for 8:30 a.m. Eastern time on Wednesday, February 22, 2023. 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, 2022, the company had 1,828 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 at
www.photronics.com/riskfactors. 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 and non-GAAP earnings per share, Free Cash Flow,
LTM Free Cash Flow, 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 page.
PHOTRONICS,
INC. |
Condensed
Consolidated Statements of Income |
(in thousands,
except per share amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
January 29, |
|
October
31, |
|
January
30, |
|
|
|
|
|
|
2023 |
|
|
2022 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
$ |
211,090 |
|
|
$ |
210,266 |
|
$ |
189,827 |
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
|
135,013 |
|
|
|
129,997 |
|
|
129,964 |
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
|
|
76,077 |
|
|
|
80,269 |
|
|
59,863 |
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
16,818 |
|
|
|
15,683 |
|
|
15,727 |
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
3,302 |
|
|
|
4,045 |
|
|
5,939 |
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses |
|
|
20,120 |
|
|
|
19,728 |
|
|
21,666 |
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
55,957 |
|
|
|
60,541 |
|
|
38,197 |
|
|
|
|
|
|
|
|
|
|
|
Non-operating (loss) income, net |
|
(14,425 |
) |
|
|
10,797 |
|
|
4,707 |
|
|
|
|
|
|
|
|
|
|
|
Income Before Income Tax Provision |
|
41,532 |
|
|
|
71,338 |
|
|
42,904 |
|
|
|
|
|
|
|
|
|
|
|
Income tax provision |
|
|
|
12,582 |
|
|
|
16,074 |
|
|
11,178 |
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
|
|
|
28,950 |
|
|
|
55,264 |
|
|
31,726 |
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to noncontrolling interests |
|
14,964 |
|
|
|
18,204 |
|
|
8,662 |
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Photronics, Inc. shareholders |
$ |
13,986 |
|
|
$ |
37,060 |
|
$ |
23,064 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
$ |
0.23 |
|
|
$ |
0.61 |
|
$ |
0.38 |
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
|
$ |
0.23 |
|
|
$ |
0.60 |
|
$ |
0.38 |
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
60,894 |
|
|
|
60,773 |
|
|
60,158 |
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
|
|
61,470 |
|
|
|
61,374 |
|
|
60,936 |
|
|
|
|
|
|
|
|
|
|
|
PHOTRONICS,
INC. |
Condensed
Consolidated Balance Sheets |
(in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
January
29, |
|
October
31, |
|
|
|
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
334,792 |
|
$ |
319,680 |
|
Short-term investments |
|
|
39,199 |
|
|
38,820 |
|
Accounts receivable |
|
|
220,692 |
|
|
198,147 |
|
Inventories |
|
|
|
52,796 |
|
|
50,753 |
|
Other current assets |
|
|
53,337 |
|
|
37,252 |
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
700,816 |
|
|
644,652 |
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
710,927 |
|
|
643,873 |
|
Other assets |
|
|
|
29,937 |
|
|
27,305 |
|
|
|
|
|
|
|
|
|
Total assets |
|
|
$ |
1,441,680 |
|
$ |
1,315,830 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Current portion of long-term debt |
$ |
6,541 |
|
$ |
10,024 |
|
Accounts payable and accrued liabilities |
|
192,790 |
|
|
183,773 |
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
199,331 |
|
|
193,797 |
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
|
27,323 |
|
|
32,310 |
|
Other liabilities |
|
|
|
32,306 |
|
|
27,634 |
|
|
|
|
|
|
|
|
|
Photronics, Inc. shareholders' equity |
|
920,765 |
|
|
831,527 |
|
Noncontrolling interests |
|
|
261,955 |
|
|
230,562 |
|
Total equity |
|
|
|
1,182,720 |
|
|
1,062,089 |
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
1,441,680 |
|
$ |
1,315,830 |
|
|
|
|
|
|
|
|
|
PHOTRONICS,
INC. |
Condensed
Consolidated Statements of Cash Flows |
(in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
January
29, |
|
January
30, |
|
|
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
Net income |
|
|
|
$ |
28,950 |
|
|
$ |
31,726 |
|
Adjustments to reconcile net income to net cash |
|
|
|
provided by operating activities: |
|
|
|
|
Depreciation and amortization |
|
|
19,105 |
|
|
|
20,810 |
|
Share-based compensation |
|
|
1,821 |
|
|
|
1,457 |
|
Changes in operating assets, liabilities and other |
|
(22,196 |
) |
|
|
5,137 |
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
27,680 |
|
|
|
59,130 |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
Purchases of property, plant and equipment |
|
(31,097 |
) |
|
|
(19,175 |
) |
Government incentives |
|
|
|
1,014 |
|
|
|
- |
|
Other |
|
|
|
|
|
(87 |
) |
|
|
(43 |
) |
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(30,170 |
) |
|
|
(19,218 |
) |
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
Repayments of debt |
|
|
|
(9,218 |
) |
|
|
(15,192 |
) |
Purchases of treasury stock |
|
|
- |
|
|
|
(2,522 |
) |
Contributions from noncontrolling interest |
|
- |
|
|
|
14,997 |
|
Proceeds from share-based arrangements |
|
672 |
|
|
|
3,840 |
|
Net settlements of restricted stock awards |
|
(1,168 |
) |
|
|
(1,458 |
) |
|
|
|
|
|
|
|
|
Net cash used in financing activities |
|
|
(9,714 |
) |
|
|
(335 |
) |
|
|
|
|
|
|
|
|
Effects of exchange rate changes on cash, cash equivalents, and
restricted cash |
|
27,499 |
|
|
|
(2,057 |
) |
|
|
|
|
|
|
|
|
Net increase in cash, cash equivalents, and restricted cash |
|
15,295 |
|
|
|
37,520 |
|
Cash, cash equivalents, and restricted cash, beginning of
period |
|
322,409 |
|
|
|
279,680 |
|
|
|
|
|
|
|
|
|
Cash, cash equivalents, and restricted cash, end of period |
$ |
337,704 |
|
|
$ |
317,200 |
|
|
|
|
|
|
|
|
|
PHOTRONICS,
INC. |
Reconciliation of GAAP to Non-GAAP Financial
Information |
(in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months ended |
|
|
January
29, |
|
October
31, |
|
January
30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Net
Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net
Income |
$ |
13,986 |
|
|
$ |
37,060 |
|
|
$ |
23,064 |
|
|
FX (gain) loss |
|
16,944 |
|
|
|
(10,369 |
) |
|
|
(5,268 |
) |
|
Estimated tax effects of above |
|
(4,506 |
) |
|
|
2,522 |
|
|
|
1,337 |
|
|
Estimated noncontrolling interest effects of above |
|
(2,060 |
) |
|
|
1,990 |
|
|
|
96 |
|
|
Non-GAAP Net
Income |
$ |
24,364 |
|
|
$ |
31,203 |
|
|
$ |
19,229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common shares outstanding -
Diluted |
|
61,470 |
|
|
|
61,374 |
|
|
|
60,936 |
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP EPS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted
earnings per share |
$ |
0.23 |
|
|
$ |
0.60 |
|
|
$ |
0.38 |
|
|
Effects of the above adjustments |
$ |
0.17 |
|
|
$ |
(0.10 |
) |
|
$ |
(0.06 |
) |
|
Non-GAAP
diluted earnings per share |
$ |
0.40 |
|
|
$ |
0.51 |
|
|
$ |
0.32 |
|
|
Note: Totals may differ due to rounding.
PHOTRONICS,
INC. |
|
Reconciliation of GAAP to Non-GAAP Financial Information
(cont.) |
|
(in thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
Reconciliation of Net cash provided by operating activities
to Free Cash Flow |
|
|
|
|
|
Three Months ended |
Year ended |
|
|
January
29, |
|
October
31, |
|
October
31, |
|
Target
Model |
|
|
2023 |
|
|
|
2022 |
|
|
|
2021 |
|
|
Two-year Horizon |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net cash provided by operating activities |
$ |
27,680 |
|
|
$ |
275,187 |
|
|
$ |
150,772 |
|
|
$ |
350,000 - 400,000 |
|
Purchases of property, plant and equipment |
|
(31,097 |
) |
|
|
(112,338 |
) |
|
|
(109,099 |
) |
|
|
(100,000 |
) |
Government
Incentives |
|
1,014 |
|
|
|
3,615 |
|
|
|
5,775 |
|
|
|
- |
|
Free Cash
Flow |
$ |
(2,403 |
) |
|
$ |
166,464 |
|
|
$ |
47,448 |
|
|
$ |
250,000 - 300,000 |
|
|
|
|
|
|
|
|
|
Reconciliation of Free Cash flow to LTM Free Cash
Flow: |
|
|
|
|
|
|
|
Free Cash Flow |
|
|
|
|
|
|
Three Months
ended January 29, 2023 |
$ |
(2,403 |
) |
|
|
|
|
|
|
Year-ended
October 31, 2022 |
|
166,464 |
|
|
|
|
|
|
|
Three Months
ended January 30, 2022 |
|
(39,955 |
) |
|
|
|
|
|
|
LTM January
29, 2023 |
$ |
124,106 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Cash and cash equivalents to Net
Cash: |
|
|
|
|
|
|
|
|
|
As of |
|
|
|
|
|
January
29, |
|
October
31, |
|
January
30, |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
Cash and
cash equivalents |
$ |
334,792 |
|
|
$ |
319,680 |
|
|
$ |
314,195 |
|
|
|
Short-term
investments |
|
39,199 |
|
|
|
38,820 |
|
|
|
- |
|
|
|
Current
portion of Long-term debt |
|
(6,541 |
) |
|
|
(10,024 |
) |
|
|
(18,307 |
) |
|
|
Long-term
Debt |
|
(27,323 |
) |
|
|
(32,310 |
) |
|
|
(78,540 |
) |
|
|
Net
Cash |
$ |
340,127 |
|
|
$ |
316,166 |
|
|
$ |
217,348 |
|
|
|
|
|
|
|
|
|
|
|
For Further Information:John P. JordanExecutive
Vice President & CFO203.740.5671jjordan@photronics.com
Photronics (NASDAQ:PLAB)
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