Photronics Reports Third Quarter Fiscal 2019 Results

• Third quarter 2019 revenue was $138.1 million, up 5% sequentially and 1% year-over-year
• Net income attributable to Photronics, Inc. shareholders was $6.3 million, or $0.10 per diluted share
• Strong cash generation increased cash to $197 million, even as investments in China expansion continue
• Fourth quarter 2019 guidance: revenue between $143 and $151 million with diluted EPS between $0.11 and $0.17

BROOKFIELD, Conn., Aug. 20, 2019 (GLOBE NEWSWIRE) -- Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in photomask technologies and solutions, today reported financial results for its fiscal 2019 third quarter ended July 28, 2019.

Financial Results Summary
$ Millions, except per share data	Q319	Q219	Q318	Q/Q	Y/Y
Revenue	138.1	131.6	136.4	5%	1%
Integrated circuit (IC) revenue	100.2	98.6	107.2	2%	(7%)
Flat panel display (FPD) revenue	37.9	33.0	29.1	15%	30%
Net income attributable to Photronics, Inc. shareholders	6.3	8.5	13.0	(25%)	(51%)
Diluted earnings per share	0.10	0.13	0.18	(0.03)	(0.08)

"We performed well during the third quarter of 2019, achieving record FPD revenue and delivering our eighth consecutive quarter of year-over-year revenue growth,” said Peter Kirlin, chief executive officer. “FPD revenue growth was driven by continued strength in AMOLED display for mobile applications and ramping shipments from our new China facility. IC revenue grew sequentially due to improved demand from Asian foundries for mainstream nodes. Gross and operating margins improved sequentially as we were able to control costs despite China startup activity. Our cash balance grew during the quarter, demonstrating our ability to generate cash as we continue to invest in China. We are on pace to have an outstanding year in 2019 and positioned to perform even better in 2020 and beyond.”

Fourth Quarter 2019 Guidance

For the fourth quarter of 2019, Photronics expects revenue to be between $143 million and $151 million, and net income attributable to Photronics, Inc. shareholders to be between $0.11 and $0.17 per diluted share.

Conference Call

A conference call to discuss these results is scheduled for 8:30 a.m. Eastern time on Tuesday, August 20, 2019. The call can be accessed by logging onto Photronics' website at www.photronics.com.  The live dial-in number is [phone] or [phone] outside of the United States and Canada. The call will be archived on Photronics’ website for instant replay access.

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 50 years. As of October 31, 2018, the company had 1,575 employees across 11 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 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.

For Further Information:
R. Troy Dewar, CFA
Vice President, Investor Relations
[phone]
[e-mail]

PHOTRONICS, INC.
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
	Three Months Ended										Nine Months Ended
	July 28,				April 28,			July 29,			July 28,			July 29,
		2019			2019			2018			2019			2018
Revenue	$	138,112			$	131,580		$	136,391		$	394,404		$	390,616
Cost of goods sold		107,542				105,570			100,794			311,721			294,538
Gross profit		30,570				26,010			35,597			82,683			96,078
Operating Expenses:
Selling, general and administrative		13,124				13,269			12,504			40,186			37,891
Research and development		4,046				3,542			2,653			11,852			10,574
Total Operating Expenses		17,170				16,811			15,157			52,038			48,465
Operating income		13,400				9,199			20,440			30,645			47,613
Other income (expense), net		(348	)			3,931			1,411			4,692			637
Income before income taxes		13,052				13,130			21,851			35,337			48,250
Income tax provision		3,218				3,278			2,054			7,883			3,783
Net income		9,834				9,852			19,797			27,454			44,467
Net income attributable to noncontrolling interests		3,487				1,373			6,792			7,361			14,899
Net income attributable to Photronics, Inc. shareholders	$	6,347			$	8,479		$	13,005		$	20,093		$	29,568
Earnings per share:
Basic	$	0.10			$	0.13		$	0.19		$	0.30		$	0.43
Diluted	$	0.10			$	0.13		$	0.18		$	0.30		$	0.41
Weighted-average number of common shares outstanding:
Basic		66,313				66,261			69,374			66,386			69,141
Diluted		66,570				70,597			75,258			69,919			75,121

 

PHOTRONICS, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
	July 28,			October 31,
	2019			2018
Assets
Current assets:
Cash and cash equivalents	$	197,243		$	329,277
Accounts receivable		134,369			120,515
Inventories		39,982			29,180
Other current assets		48,873			23,759
Total current assets		420,467			502,731
Property, plant and equipment, net		636,743			571,781
Intangible assets, net		9,013			12,368
Other assets		47,972			23,129
Total assets	$	1,114,195		$	1,110,009
Liabilities and Equity
Current liabilities:
Debt	$	6,100		$	57,453
Accounts payable and accrued liabilities		153,174			133,623
Total current liabilities		159,274			191,076
Long-term debt		43,015			-
Other liabilities		11,568			14,364
Photronics, Inc. shareholders' equity		763,394			759,671
Noncontrolling interests		136,944			144,898
Total equity		900,338			904,569
Total liabilities and equity	$	1,114,195		$	1,110,009

 

PHOTRONICS,  INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
					Nine Months Ended
					July 28,				July 29,
					2019				2018
Cash flows from operating activities:
Net income					$	27,454			$	44,467
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization						60,387				64,485
Changes in operating assets, liabilities and other						(64,337	)			(21,995	)
Net cash provided by operating activities						23,504				86,957
Cash flows from investing activities:
Purchases of property, plant and equipment						(160,149	)			(64,372	)
Government incentive						17,694				-
Other						(24	)			313		*
Net cash used in investing activities						(142,479	)			(64,059	)	*
Cash flows from financing activities:
Proceeds from debt						53,227				-
Contribution from noncontrolling interest						29,394				17,997
Repayments of debt						(61,319	)			(4,170	)
Dividends paid to noncontrolling interests						(26,102	)			(8,166	)
Purchase of treasury stock						(10,696	)			(6,787	)
Proceeds from share-based arrangements						1,314				4,028
Other						(92	)			(274	)
Net cash (used in) provided by financing activities						(14,274	)			2,628
Effect of exchange rate changes on cash, cash equivalents, and restricted cash						1,206				(975	)	*
Net (decrease) increase in cash, cash equivalents, and restricted cash						(132,043	)			24,551		*
Cash, cash equivalents, and restricted cash, beginning of period						331,989		*		310,936		*
Cash, cash equivalents, and restricted cash, end of period					$	199,946			$	335,487		*
* Amount has been modified to reflect the adoption of ASU 2016-18