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- Second quarter 2019 revenue was $131.6 million, up 6% sequentially and 1% year-over-year
- Net income attributable to Photronics, Inc. shareholders was $8.5 million, or $0.13 per diluted share
- Cash balance was $167.1 million, with capital expenditures of $33.5 million primarily to fund China investments
- Repaid $57.5 million convertible security, reducing total debt and eliminating 5.5 million potentially dilutive shares
- Celebrated grand opening of new Xiamen and Hefei facilities in China
- Shipped first G10.5+ photomask, marking entry into new, growing market
- Third quarter 2019 guidance: revenue between $132 and $142 million with diluted EPS between $0.05 and $0.14
BROOKFIELD, Conn., May22, 2019(GLOBE NEWSWIRE) --Photronics, Inc.(NASDAQ: PLAB ), a worldwide leader in photomask technologies and solutions, today reported financial results for its fiscal 2019 second quarter ended April 28, 2019.
Second quarter revenue was $131.6 million, 6% better than the previous quarter and 1% better than the same quarter last year. Integrated circuit (IC) revenue was $98.6 million, up 4% sequentially and down 4% compared with the second quarter of last year. Flat panel display (FPD) revenue was $33.0 million, up 11% compared with last quarter and 16% compared with the same period last year.
Net income attributable to Photronics, Inc. shareholders was $8.5 million ($0.13 per diluted share), compared with $5.3 million ($0.08 per diluted share) for the first quarter of 2019 and $10.7 million ($0.15 per diluted share) for the second quarter of 2018.
"We performed well in the second quarter despite a challenging industry environment, delivering sequential growth in IC and strong sequential and year-over-year growth in FPD,' said Peter Kirlin, chief executive officer. 'The double-digit FPD growth resulted from a strong market for masks for mobile displays, including AMOLED and LTPS LCD, with a contribution from our first shipment of a G10.5+ photomask. In IC, we achieved sequential growth with the anticipated recovery in high-end memory. Startup activity in China impacted operating profit, resulting in operating margin of 7.0%. Cash at the end of the quarter was $167.1 million after repayment of $57.5 million in convertible debt, which eliminated 5.5 million potentially dilutive shares, and $33.5 million in capital expenditures, primarily in China. Besides solid financial results, we celebrated the grand opening of our new Xiamen and Hefei facilities in China. We are excited to serve our customers in mainland China with locally produced reticles. With these milestones, we are on track to meet our 2020 targets of $630 million revenue and $0.80 earnings per share.'
Third Quarter 2019 Guidance
For the third quarter of 2019, Photronics expects revenue to be between $132 million and $142 million, and net income attributable to Photronics, Inc. shareholders to be between $0.05 and $0.14 per diluted share.
Conference Call
A conference call to discuss these results is scheduled for 8:30 a.m. Eastern time on Wednesday, May 22, 2019. The call can be accessed by logging onto Photronics' website atwww.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 for instant replay access.
About Photronics
Photronicsis 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, 2018, the company had 1,575 employees across 11 strategically locatedmanufacturing facilitiesin Asia, Europe, and North America. Additional information on the Company can be accessed atwww.photronics.com .
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. The forward-looking statements contained in this press release 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, political, 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. There is no assurance that the company's expectations will be realized. For additional information please see the company's quarterly and annual reports filed with the Securities and Exchange Commission. 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 28, January 27, April 29, April 28, April 29,
2019 2019 2018 2019 2018
Revenue $ 131,580 $ 124,712 $ 130,779 $ 256,291 $ 254,225
Cost of goods sold 105,570 98,610 97,960 204,179 193,744
Gross profit 26,010 26,102 32,819 52,112 60,481
Operating Expenses:
Selling, general and administrative 13,269 13,792 13,637 27,061 25,387
Research and development 3,542 4,263 3,817 7,805 7,921
Total Operating Expenses 16,811 18,055 17,454 34,866 33,308
Operating income 9,199 8,047 15,365 17,246 27,173
Other income (expense), net 3,931 1,108 3,332 5,039 (774 )
Income before income taxes 13,130 9,155 18,697 22,285 26,399
Income tax provision 3,278 1,387 3,508 4,665 1,729
Net income 9,852 7,768 15,189 17,620 24,670
Net income attributable to noncontrolling interests 1,373 2,501 4,524 3,874 8,107
Net income attributable to Photronics, Inc. shareholders $ 8,479 $ 5,267 $ 10,665 $ 13,746 $ 16,563
Earnings per share:
Basic $ 0.13 $ 0.08 $ 0.15 $ 0.21 $ 0.24
Diluted $ 0.13 $ 0.08 $ 0.15 $ 0.20 $ 0.23
Weighted-average number of common shares outstanding:
Basic 66,261 66,583 69,293 66,422 69,024
Diluted 70,597 67,047 75,190 71,593 75,052
PHOTRONICS, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
April 28, October 31,
2019 2018
Assets
Current assets:
Cash and cash equivalents $ 167,066 $ 329,277
Accounts receivable 123,371 120,515
Inventories 34,696 29,180
Other current assets 76,555 23,759
Total current assets 401,688 502,731
Property, plant and equipment, net 654,357 571,781
Intangible assets, net 10,182 12,368
Other assets 19,011 23,129
Total assets $ 1,085,238 $ 1,110,009
Liabilities and Equity
Current liabilities:
Current portion of long-term debt $ 505 $ 57,453
Accounts payable and accrued liabilities 138,779 133,623
Total current liabilities 139,284 191,076
Long-term debt 35,921 -
Other liabilities 11,705 14,364
Photronics, Inc. shareholders' equity 763,568 759,671
Noncontrolling interests 134,760 144,898
Total equity 898,328 904,569
Total liabilities and equity $ 1,085,238 $ 1,110,009
PHOTRONICS, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Six Months Ended
April 28, April 29,
2019 2018
Cash flows from operating activities:
Net income $ 17,620 $ 24,670
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 38,515 44,429
Changes in operating assets, liabilities and other (58,422 ) (31,191 )
Net cash (used in) provided by operating activities (2,287 ) 37,908
Cash flows from investing activities:
Purchases of property, plant and equipment (140,436 ) (44,129 )
Government incentive 5,698 -
Other (23 ) 296 *
Net cash used in investing activities (134,761 ) (43,833 ) *
Cash flows from financing activities:
Proceeds from debt 39,633 -
Contribution from noncontrolling interest 29,394 11,998
Repayments of debt (61,220 ) (2,771 )
Dividends paid to noncontrolling interests (26,102 ) -
Purchase of treasury stock (10,696 ) -
Proceeds from share-based arrangements 1,033 3,776
Other (45 ) (267 )
Net cash (used in) provided by financing activities (28,003 ) 12,736
Effect of exchange rate changes on cash, cash equivalents, and restricted cash 2,843 6,330 *
Net (decrease) increase in cash, cash equivalents, and restricted cash (162,208 ) 13,141 *
Cash, cash equivalents, and restricted cash, beginning of period 331,989 * 310,936 *
Cash, cash equivalents, and restricted cash, end of period $ 169,781 $ 324,077 *
* Amount has been modified to reflect the adoption of ASU 2016-18
For Further Information:
R. Troy Dewar, CFA
Vice President, Investor Relations
(203) 740-5610
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