GlobeNewswire Inc | Aug 27, 2020 06:00AM EDT

August 27, 2020

-- Third quarter 2020 revenue was $157.9 million, up 11% sequentially and 14% year-over-year -- Net income attributable to Photronics, Inc. shareholders was $10.8 million, or $0.17 per diluted share -- Cash provided by operating activities was $16.9 million, resulting in a cash balance of $260.6 million -- Fourth quarter 2020 guidance: revenue between $148 and $158 million with diluted EPS between $0.12 and $0.19

BROOKFIELD, Conn., Aug. 27, 2020 (GLOBE NEWSWIRE) -- Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in photomask technologies and solutions, today reported financial results for its fiscal 2020 third quarter ended August 2, 2020.

Third quarter revenue was $157.9 million, 11% better than the previous quarter and 14% better than the same quarter last year. Integrated circuit (IC) revenue was $108.7 million, up 12% sequentially and 8% compared with the third quarter of last year. Flat panel display (FPD) revenue was $49.2 million, up 7% compared with last quarter and 30% compared with the same period last year.

Net income attributable to Photronics, Inc. shareholders was $10.8 million ($0.17 per diluted share), compared with $6.3 million ($0.10 per diluted share) for the second quarter of 2020 and $6.3 million ($0.10 per diluted share) for the third quarter of 2019.

"Customer demand improved this quarter, and we achieved double-digit revenue growth rates compared with last quarter and last year due to our diverse market position and technology leadership, said Peter Kirlin, chief executive officer. China demand recovered for both IC and FPD, with total revenue of product shipped to China increasing 10% compared with the previous quarter. From a market perspective, mainstream IC and high-end FPD were notable areas of strength. We were able to leverage the growth in revenues to expand profit margins, while also managing expenses, resulting in 12.6% operating margin and $0.17 earnings per diluted share. Our cash balance grew to $260.6 million, providing us with financial strength and flexibility as we look to continue our strategic growth investments. We are well placed to pursue attractive organic growth opportunities and expand our leadership position.

Fourth Quarter 2020 Guidance

For the fourth quarter of 2020, Photronics expects revenue to be between $148 million and $158 million, and net income attributable to Photronics, Inc. shareholders to be between $0.12 and $0.19 per diluted share.

Conference Call

A conference call to discuss these results is scheduled for 8:30 a.m. Eastern time on Thursday, August 27, 2020. The call can be accessed by logging onto Photronics' website 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 website.

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, 2019, the company had 1,775 employees. The company has 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 within the meaning of the Private Securities Litigation Reform Act of 1995. 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. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Photronics to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words believes, expects, anticipates, intends, projects, estimates, plans, may increase, may fluctuate, will, should, would, may and could or similar words or expressions are generally forward-looking in nature and not historical facts. Any statements that refer to outlook, expectations or other characterizations of future events, circumstances or results are also forward-looking statements. Important risks, assumptions and other important factors that could cause future results to differ materially from those expressed in the forward-looking statements are specified in Photronics Annual and Quarterly filings with the Securities and Exchange Commission under headings such as Forward-Looking Statements, Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations and in other filings and furnishings made by Photronics with the Securities and Exchange Commission from time to time. These risks and uncertainties include, but are not limited to, the current pandemic and future recurrences and other developments with respect thereto, governmental responses to the pandemic and related matters, changes in end markets resulting therefrom, changes in investment, tax, trade, exchange and other laws and regulations, as well as economic, competitive, legal, governmental, political, monetary and fiscal policy, and technological factors and decisions we may make in the future regarding our business, capital structure and other matters. Photronics undertakes no obligation to release publicly any revisions to any forward-looking statements or, except as required to be disclosed in filings or furnishings with the Securities and Exchange Commission, to report events or to report the occurrence of unanticipated events. There is no assurance that Photronics expectations will be realized.

PHOTRONICS, INC.Condensed Consolidated Statements of Income(in thousands, except per share amounts)(Unaudited) Three Months Ended Nine Months Ended August 2, May 3, July 28, August 2, July 28, 2020 2020 2019 2020 2019 Revenue $ 157,895 $ 142,774 $ 138,112 $ 460,405 $ 394,404 Cost of 120,161 112,341 107,542 357,636 311,721goods sold Gross 37,734 30,433 30,570 102,769 82,683profit Operating Expenses: Selling, generaland 13,306 13,267 13,124 40,792 40,186administrative Research and 4,492 4,462 4,046 13,034 11,852development TotalOperating 17,798 17,729 17,170 53,826 52,038Expenses Operating 19,936 12,704 13,400 48,943 30,645income Other(expense) (2,135 ) (951 ) (348 ) 610 4,692income, net Income before 17,801 11,753 13,052 49,553 35,337income taxes Income tax 4,937 3,781 3,218 17,789 7,883provision Net 12,864 7,972 9,834 31,764 27,454income Net incomeattributable to 2,088 1,688 3,487 4,404 7,361noncontrollinginterests Net incomeattributable to $ 10,776 $ 6,284 $ 6,347 $ 27,360 $ 20,093Photronics, Inc.shareholders Earnings per share: Basic $ 0.17 $ 0.10 $ 0.10 $ 0.42 $ 0.30 Diluted $ 0.17 $ 0.10 $ 0.10 $ 0.42 $ 0.30 Weighted-averagenumber of common sharesoutstanding: Basic 64,780 64,937 66,313 65,090 66,386 Diluted 65,247 65,417 66,570 65,704 69,919

PHOTRONICS, INC. Condensed Consolidated Balance Sheets (in thousands) (Unaudited) August 2, October 31, 2020 2019 Assets Current assets: Cash and cash equivalents $ 260,597 $ 206,530 Accounts receivable 146,843 134,454 Inventories 54,733 48,155 Other current assets 48,468 38,388 Total current assets 510,641 427,527 Property, plant and equipment, net 623,247 632,441 Intangible assets, net 4,535 7,870 Other assets 57,419 50,827 Total assets $ 1,195,842 $ 1,118,665 Liabilities and Equity Current liabilities: Debt $ 14,683 $ 10,873 Accounts payable and accrued liabilities 160,626 141,081 Total current liabilities 175,309 151,954 Long-term debt 38,183 41,887 Other liabilities 25,665 13,732 Photronics, Inc. shareholders' equity 790,242 769,892 Noncontrolling interests 166,443 141,200 Total equity 956,685 911,092 Total liabilities and equity $ 1,195,842 $ 1,118,665

PHOTRONICS, INC.Condensed Consolidated Statements of Cash Flows(in thousands)(Unaudited) Nine Months Ended August 2, July 28, 2020 2019 Cash flows from operating activities:Net income $ 31,764 $ 27,454 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 71,120 60,387 Share-based compensation 3,773 2,871 Changes in operating assets, liabilities and (28,393 ) (67,208 )other Net cash provided by operating 78,264 23,504 activities Cash flows from investing activities:Purchases of property, plant and equipment (36,693 ) (160,149 )Government incentive 5,263 17,694 Other (139 ) (24 ) Net cash used in investing (31,569 ) (142,479 )activities Cash flows from financing activities:Proceeds from long-term debt 5,699 53,227 Contribution from noncontrolling interest 17,596 29,394 Purchase of treasury stock (16,894 ) (10,696 )Repayments of debt (5,929 ) (61,319 )Proceeds from share-based arrangements 3,869 1,314 Dividends paid to noncontrolling interests - (26,102 )Other (248 ) (92 ) Net cash provided by (used in) financing 4,093 (14,274 )activities Effect of exchange rate changes on cash, cash 3,486 1,206 equivalents, and restricted cash Net increase (decrease) in cash, cash 54,274 (132,043 )equivalents, and restricted cashCash, cash equivalents, and restricted cash, 209,291 331,989 beginning of period Cash, cash equivalents, and restricted cash, $ 263,565 $ 199,946 end of period

For Further Information:R. Troy Dewar, CFAVice President, Investor Relations(203) 740-5610tdewar@photronics.com