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Photronics Reports Second Quarter Fiscal 2023 Results
Source: Nasdaq GlobeNewswire / 24 May 2023 05:00:00 America/Chicago
BROOKFIELD, Conn., May 24, 2023 (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 2023 ended April 30, 2023.
“We achieved record revenue in the second quarter with growth across IC and FPD as demand for our design-driven product remained high,” said Frank Lee, chief executive officer. “Mainstream IC demand remained robust across all regions, especially Asia and the US. FPD demand was driven primarily by AMOLED for advanced mobile displays as that technology continues to be adopted across new devices. Profit margins expanded on positive volume leverage, pricing, favorable mix, and tight control of cost. Cash generated from operating activities was very strong, enabling us to strengthen our balance sheet while also investing in organic growth. We are on pace for another great year in 2023 and to deliver on our long-term financial goals. I am confident that our team will continue to perform well to create value for our shareholders.”
Second Quarter Fiscal 2023 Results
- Revenue was $229.3 million up 9% sequentially and 12% year-over-year
- GAAP net income attributable to Photronics, Inc. shareholders was $39.9 million ($0.65 per diluted share), compared with $14.0 million ($0.23 per diluted share) in the first quarter of 2023 and $27.4 million ($0.45 per diluted share) in the second quarter 2022
- Non-GAAP net income attributable to Photronics, Inc. shareholders was $32.9 million ($0.54 per diluted share), compared with $24.4 million ($0.40 per diluted share) in the first quarter of 2023 and $23.1 million ($0.38 per diluted share) in the second quarter 2022
- IC revenue was $167.1 million, up 7% sequentially and 15% year-over-year
- FPD revenue was $62.3 million, up 14% sequentially and 6% more than same quarter last year
- Cash generated from operating activities was $82 million, and cash invested in growth through capital expenditures was $27 million
- Cash balance at the end of the quarter was $367.5 million with debt of $28 million, providing funds and available liquidity to support our growth investments
Third Quarter Fiscal 2023 Guidance
For the third quarter of fiscal 2023, Photronics expects revenue to be between $224 million and $234 million and non-GAAP net income attributable to Photronics, Inc. shareholders to be between $0.48 and $0.54 per diluted share.
Webcast
A webcast to discuss these results is scheduled for 8:30 a.m. Eastern time on Wednesday, May 24, 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 pages.
PHOTRONICS, INC. Condensed Consolidated Statements of Income (in thousands, except per share amounts) (Unaudited) Three Months Ended Six Months Ended April 30, January 29, May 1, April 30, May 1, 2023 2023 2022 2023 2022 Revenue $ 229,306 $ 211,090 $ 204,509 $ 440,397 $ 394,336 Cost of goods sold 140,904 135,013 134,289 275,918 264,253 Gross Profit 88,402 76,077 70,220 164,479 130,083 Operating Expenses: Selling, general and administrative 17,878 16,818 16,613 34,696 32,340 Research and development 3,479 3,302 4,206 6,781 10,145 Total Operating Expenses 21,357 20,120 20,819 41,477 42,485 Operating Income 67,045 55,957 49,401 123,002 87,598 Non-operating (loss) income, net 13,571 (14,425 ) 8,021 (854 ) 12,728 Income Before Income Tax Provision 80,616 41,532 57,422 122,148 100,326 Income tax provision 21,343 12,582 14,393 33,925 25,571 Net Income 59,273 28,950 43,029 88,223 74,755 Net income attributable to noncontrolling interests 19,344 14,964 15,597 34,308 24,259 Net income attributable to Photronics, Inc. shareholders $ 39,929 $ 13,986 $ 27,432 $ 53,915 $ 50,496 Earnings per share: Basic $ 0.65 $ 0.23 $ 0.45 $ 0.88 $ 0.84 Diluted $ 0.65 $ 0.23 $ 0.45 $ 0.88 $ 0.83 Weighted-average number of common shares outstanding: Basic 61,138 60,894 60,606 61,016 60,382 Diluted 61,507 61,470 61,145 61,489 61,041 PHOTRONICS, INC. Condensed Consolidated Balance Sheets (in thousands) (Unaudited) April 30, October 31, 2023 2022 Assets Current assets: Cash and cash equivalents $ 367,485 $ 319,680 Short-term investments 45,431 38,820 Accounts receivable 214,464 198,147 Inventories 54,940 50,753 Other current assets 37,796 37,252 Total current assets 720,116 644,652 Property, plant and equipment, net 699,917 643,873 Other assets 30,992 27,305 Total assets $ 1,451,025 $ 1,315,830 Liabilities and Equity Current liabilities: Current portion of long-term debt $ 7,017 $ 10,024 Accounts payable and accrued liabilities 178,151 183,773 Total current liabilities 185,168 193,797 Long-term debt 21,322 32,310 Other liabilities 39,851 27,634 Photronics, Inc. shareholders' equity 928,047 831,527 Noncontrolling interests 276,637 230,562 Total equity 1,204,684 1,062,089 Total liabilities and equity $ 1,451,025 $ 1,315,830 PHOTRONICS, INC. Condensed Consolidated Statements of Cash Flows (in thousands) (Unaudited) Six Months Ended April 30, May 1, 2023 2022 Cash flows from operating activities: Net income $ 88,223 $ 74,755 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 39,085 41,405 Share-based compensation 3,830 3,041 Changes in operating assets, liabilities and other (21,461 ) (15,912 ) Net cash provided by operating activities 109,677 103,289 Cash flows from investing activities: Purchases of property, plant and equipment (57,728 ) (34,809 ) Purchases of available-for-sale debt securities (9,837 ) 0 Proceeds from maturity of available-for-sale debt securities 4,000 0 Government incentives 1,393 1,394 Other (88 ) (199 ) Net cash used in investing activities (62,260 ) (33,614 ) Cash flows from financing activities: Repayments of debt (14,720 ) (27,571 ) Purchases of treasury stock - (2,522 ) Contributions from noncontrolling interest - 24,995 Proceeds from share-based arrangements 730 4,384 Net settlements of restricted stock awards (1,252 ) (1,452 ) Net cash used in financing activities (15,242 ) (2,166 ) Effects of exchange rate changes on cash, cash equivalents, and restricted cash 15,621 (14,917 ) Net increase in cash, cash equivalents, and restricted cash 47,796 52,592 Cash, cash equivalents, and restricted cash, beginning of period 322,409 279,680 Cash, cash equivalents, and restricted cash, end of period $ 370,205 $ 332,272 PHOTRONICS, INC. Reconciliation of GAAP to Non-GAAP Financial Information (in thousands) (Unaudited) Three Months ended Six Months ended April 30, January 29, May 1, April 30, May 1, 2023 2023 2022 2023 2022 Reconciliation of GAAP to Non-GAAP Net Income: GAAP Net Income $ 39,929 $ 13,986 $ 27,432 $ 53,915 $ 50,496 FX (gain) loss (10,718 ) 16,944 (7,844 ) 6,226 (13,112 ) Estimated tax effects of above 2,823 (4,506 ) 1,947 (1,683 ) 3,284 Estimated noncontrolling interest effects of above 901 (2,060 ) 1,543 (1,159 ) 1,639 Non-GAAP Net Income $ 32,935 $ 24,364 $ 23,078 $ 57,299 $ 42,307 Weighted-average number of common shares outstanding - Diluted 61,507 61,470 61,145 61,489 61,041 Reconciliation of GAAP to Non-GAAP EPS: GAAP diluted earnings per share $ 0.65 $ 0.23 $ 0.45 $ 0.88 $ 0.83 Effects of the above adjustments $ (0.11 ) $ 0.17 $ (0.07 ) $ 0.05 $ (0.14 ) Non-GAAP diluted earnings per share $ 0.54 $ 0.40 $ 0.38 $ 0.93 $ 0.69 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 Six Months ended Year ended April 30, October 31, October 31, Target Model 2023 2022 2021 Two-year Horizon GAAP Net cash provided by operating activities $ 109,677 $ 275,187 $ 150,772 $ 350,000 - 400,000 Purchases of property, plant and equipment (57,728 ) (112,338 ) (109,099 ) (100,000 ) Free Cash Flow $ 51,949 $ 162,849 $ 41,673 $ 250,000 - 300,000 Reconciliation of Free Cash flow to LTM Free Cash Flow: Free Cash Flow Six Months ended April 30, 2023 $ 51,949 Year-ended October 31, 2022 162,849 Six Months ended May 1, 2022 (68,480 ) LTM April 30, 2023 $ 146,318 Reconciliation of Cash and cash equivalents to Net Cash: As of April 30, October 31, May 1, 2023 2022 2022 Cash and cash equivalents $ 367,485 $ 319,680 $ 329,282 Current portion of Long-term debt (7,017 ) (10,024 ) (12,410 ) Long-term Debt (21,322 ) (32,310 ) (70,138 ) Net Cash $ 339,146 $ 277,346 $ 246,734 For Further Information:
John P. Jordan
Executive Vice President & CFO
203.740.5671
jjordan@photronics.com
