PLAB 8-K
Photronics Inc (PLAB)
8-K
2022-08-30
For: 2022-08-30
View Original
Added on
April 07, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant To Section 13 Or 15(d) Of The Securities Exchange Act Of 1934
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Date of report (Date of earliest event reported)
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(Exact name of registrant as specified in its charter)
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(State or Other Jurisdiction of) Incorporation
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(Commission File Number)
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(IRS Employer Identification No.)
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(Address of principal executive offices)
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(Zip Code)
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Registrant's Telephone Number, including area code
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(
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this
chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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N/A
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N/A
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| Item 2.02. |
Results of Operations and Financial Condition.
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On August 30, 2022, Photronics, Inc. (the “Company”) issued a press release reporting third quarter fiscal 2022 results.
A copy of the press release is furnished as Exhibit 99.1 to this report. The information contained in this Item 2.02 and the attached Exhibits 99.1,
99.2, 99.3, 99.4, and 99.5, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and shall not be incorporated by reference in any filing under the Securities Act of 1933 except as shall be expressly set
forth by specific reference in such filing.
On August 30, 2022, the Company will conduct a conference call during which certain unaudited, non-GAAP financial information related to the Company’s
operations for the three months ended July 31, 2022 may be disclosed. This information is set forth in Exhibit 99.5.
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Financial Statements and Exhibits.
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Exhibits
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Press Release dated August 30, 2022.
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Condensed Consolidated Statements of Income.
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Condensed Consolidated Balance Sheets.
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Condensed Consolidated Statements of Cash Flows.
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Photronics Q3 2022 Financial Results Conference Call August 30, 2022 slides.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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PHOTRONICS, INC.
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(Registrant)
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By:
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/s/ Richelle E. Burr
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Name:
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Richelle E. Burr
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Title:
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Executive Vice President,
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Chief Administrative Officer,
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General Counsel and Secretary
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Date: August 30, 2022
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Exhibit 99.1
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For Further Information:
John P. Jordan
Executive Vice President & CFO
203.740.5671
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Press Release
Photronics Reports Third Quarter Fiscal 2022 Results
BROOKFIELD, Conn. August 30, 2022 (GLOBE NEWSWIRE) — Photronics, Inc.
(NASDAQ:PLAB), a worldwide leader in photomask technologies and solutions, today reported financial results for its fiscal 2022 third quarter ended July 31, 2022.
“We achieved our sixth consecutive quarter of record revenue due to strong end market demand, favorable pricing dynamics, and outstanding performance by the
entire organization,” said Frank Lee, chief executive officer. “Customers continue to place their trust in Photronics to support their technology roadmap by supplying the high-quality photomasks required for innovative designs that meet consumer
demand. We are expanding capacity and growing volumes while controlling costs and capitalizing on operating leverage to deliver higher margins. We are also taking pricing action where appropriate to capture the full value that we are delivering to
our customers. Our cash balance grew as we generated strong cash flow from operations, positioning us for continued investments in growth to expand our market-leading presence. I am proud of how the global Photronics team has responded as we look to
close out another record year.”
Third Quarter 2022 Results
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Revenue was $219.9 million, up 8% sequentially and 29% compared with the same period of last year
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Net income attributable to Photronics, Inc. shareholders was $31.2 million ($0.51 per diluted share), compared with $27.4 million ($0.45 per diluted share) in the second quarter of 2022 and
$17.1 million ($0.28 per diluted share) in the third quarter 2021
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Integrated circuit (IC) revenue was $161.3 million, up 11% sequentially and up 37% compared with the same period of last year
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Flat panel display (FPD) revenue was $58.7 million, flat sequentially and up 11% compared with the same period of last year
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Cash balance increased to $381 million with $93 million generated from operating activities and $12 million invested in growth through capital expenditures
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Fourth Quarter 2022 Guidance
For the fourth quarter of 2022, Photronics expects revenue to be between $205 million and $215 million and net income attributable to Photronics, Inc.
shareholders to be between $0.44 and $0.52 per diluted share.
Webcast
A webcast to discuss these results is scheduled for 8:30 a.m. Eastern time on Tuesday, August 30, 2022. The event can be accessed through the Investors page
of Photronics' website (www.photronics.com) or directly at https://register.vevent.com/register/BI5f5ea35d921040438cfa995c228f1b08. The webcast 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 over 50 years. As of October 31, 2021, the company had 1,728 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.
09.22
Exhibit 99.2
PHOTRONICS, INC.
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
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Three Months Ended
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Nine Months Ended
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July 31,
2022
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May 1,
2022
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August 1,
2021
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July 31,
2022
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August 1,
2021
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Revenue
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$
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219,948
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$
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204,509
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$
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170,643
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$
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614,283
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$
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482,473
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Cost of goods sold
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136,085
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134,289
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125,318
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400,338
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367,370
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Gross Profit
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83,863
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70,220
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45,325
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213,945
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115,103
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Operating Expenses:
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Selling, general and administrative
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15,960
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16,613
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15,083
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48,306
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43,203
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Research and development
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4,151
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4,206
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5,305
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14,297
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14,390
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Total Operating Expenses
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20,111
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20,819
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20,388
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62,603
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57,593
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Other operating (loss) income, net
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(23
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)
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-
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3,525
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(17
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)
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3,525
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Operating Income
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63,729
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49,401
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28,462
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151,325
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61,035
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Non-operating income, net
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3,641
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8,021
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3,735
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16,370
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3,643
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Income Before Income Tax Provision
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67,370
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57,422
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32,197
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167,695
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64,678
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Income tax provision
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18,146
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14,393
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7,842
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43,717
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14,493
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Net Income
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49,224
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43,029
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24,355
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123,978
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50,185
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Net income attributable to noncontrolling interests
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17,994
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15,597
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7,279
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42,252
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14,547
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Net income attributable to Photronics, Inc. shareholders
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$
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31,230
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$
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27,432
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$
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17,076
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$
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81,726
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$
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35,638
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Earnings per share:
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Basic
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$
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0.51
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$
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0.45
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$
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0.28
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$
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1.35
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$
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0.58
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Diluted
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$
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0.51
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$
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0.45
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$
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0.28
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$
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1.34
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$
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0.57
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Weighted-average number of common shares outstanding:
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Basic
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60,701
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60,606
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60,884
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60,488
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61,804
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Diluted
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61,299
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61,145
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61,515
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61,127
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62,362
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Exhibit 99.3
PHOTRONICS, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
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July 31,
2022
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October 31,
2021
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Assets
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Current assets:
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Cash and cash equivalents
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$
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380,833
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$
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276,670
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Accounts receivable
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206,495
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174,447
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Inventories
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50,313
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55,249
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Other current assets
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40,414
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44,250
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Total current assets
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678,055
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550,616
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Property, plant and equipment, net
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640,805
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696,553
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Other assets
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30,737
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47,033
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Total assets
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$
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1,349,597
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$
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1,294,202
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Liabilities and Equity
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Current liabilities:
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Current portion of long-term debt
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$
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10,727
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$
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22,248
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Accounts payable and accrued liabilities
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186,387
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153,900
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Total current liabilities
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197,114
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176,148
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Long-term debt
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46,589
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89,446
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Other liabilities
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25,936
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28,046
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Photronics, Inc. shareholders' equity
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850,318
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823,692
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Noncontrolling interests
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229,640
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176,870
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Total equity
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1,079,958
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1,000,562
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Total liabilities and equity
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$
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1,349,597
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$
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1,294,202
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Exhibit 99.4
PHOTRONICS, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
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Nine Months Ended
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July 31,
2022
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August 1,
2021
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Cash flows from operating activities:
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Net income
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$
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123,978
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$
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50,185
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Adjustments to reconcile net income to net cash
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provided by operating activities:
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Depreciation and amortization
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61,210
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69,305
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Share-based compensation
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4,623
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4,034
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Changes in operating assets, liabilities and other
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6,110
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(10,428
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)
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Net cash provided by operating activities
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195,921
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113,096
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Cash flows from investing activities:
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||||||||
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Purchases of property, plant and equipment
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(46,337
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)
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(92,301
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)
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||||
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Government incentives
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1,394
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5,775
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Other
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(179
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)
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(170
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)
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Net cash used in investing activities
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(45,122
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)
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(86,696
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)
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Cash flows from financing activities:
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||||||||
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Repayments of debt
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(51,917
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)
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(13,311
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)
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||||
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Purchases of treasury stock
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(2,522
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)
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(35,750
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)
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||||
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Contributions from noncontrolling interest
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24,995
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-
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||||||
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Proceeds from share-based arrangements
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5,505
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2,251
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||||||
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Proceeds from long-term debt
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-
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20,858
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||||||
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Net settlements of restricted stock awards
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(1,463
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)
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(403
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)
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||||
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Net cash used in financing activities
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(25,402
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)
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(26,355
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)
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||||
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Effects of exchange rate changes on cash, cash equivalents, and restricted cash
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(21,308
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)
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4,602
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|||||
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Net increase in cash, cash equivalents, and restricted cash
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104,089
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4,647
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||||||
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Cash, cash equivalents, and restricted cash, beginning of period
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279,680
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281,602
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||||||
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Cash, cash equivalents, and restricted cash, end of period
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$
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383,769
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$
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286,249
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Exhibit 99.5
Q3 2022 Financial Results Conference Call August 30, 2022 Photronics, Inc.
Safe Harbor Statement This presentation and some of our comments during this presentation may contain
projections or other forward-looking statements regarding future events, our future financial performance, and/or the future performance of the industry. These statements are predictions, and contain risks and uncertainties. We refer you to the
documents the Company files from time to time with the Securities and Exchange Commission. These documents contain and identify important factors that could cause the actual results for the Company to differ materially from those contained in
our projections or 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 the
accuracy of any forecasts or estimates, and we are not obligated to update any forward-looking statements if our expectations change. 8/30/2022 2
Net income attributable to Photronics, Inc. shareholders of $31.2M ($0.51/share) Investing in mainstream
IC capacity to capitalize on market growth trends IC: +11% Q/Q, +37% Y/Y FPD: Flat Q/Q, +11% Y/Y To China: +13% Q/Q; +63% Y/Y Committed to driving long-term, profitable growth through strategic investments $93M generated from operating
activity $12M invested in capex $57M total long-term debt; reduced $54M YTD Cash balance $381M Revenue was a record $219.9M up 8%Q/Q up 29%Y/Y 8/30/2022 3 Q3 2022 Summary
Investment Strategy Revenue Growth Win lion’s share of the impressive growth in TAM for China IC and
FPD Supplement capacity with point tool investments and targeted expansions Capitalize on technology leadership in AMOLED to continue improving mix Leverage global footprint to exploit growth in “legacy foundry” business Margin
Expansion Sustainable pricing strength in high-end and mainstream IC Optimize asset tool set to match end-market demand Increasing benefit from operating leverage Explore Strategic Partnerships Targeting partnerships that extend market
leadership position 8/30/2022 4
Delivering on Updated Target Model $M (except EPS) 2020 2021 Q3 2022 LTM Illustrative 2-Year Target
Model (Updated 5/25/2022) Revenue $610 $664 $796 $900 $950 $975 Gross Margin 22% 25% 33% 38-40% 40-42% 42-43% Operating Margin 10% 14% 23% 28-30% 30-32% 32-33% Operating Cash
Flow $143 $151 $234 $350-375 $365-380 $375-400 Free Cash Flow* $77 $47 $172 $250-275 $235-280 $275-300 Diluted EPS $0.52 $0.89 $1.67 $2.35-2.45 $2.50-2.55 $2.60-2.65 8/30/2022 5 *Free Cash Flow is a non-GAAP term; see
reconciliation included in this presentation
Income Statement Summary $M (except EPS) Q322 Q222 Q/Q Q321 Y/Y Revenue $ 219.9 $ 204.5 8% $
170.6 29% Gross Profit $ 83.9 $ 70.2 19% $ 45.3 85% Gross Margin 38.1% 34.3% 380 bps 26.6% 1,150 bps Operating Income $ 63.7 $ 49.4 29% $ 28.5 124% Operating Margin 29.0% 24.2% 480 bps 16.7% 1,230 bps Non-operating
income $ 3.6 $ 8.0 ($ 4.4) $ 3.7 ($ 0.1) Income tax provision $ 18.1 $ 14.4 $ 3.7 $ 7.8 $ 10.3 Minority interest $ 18.0 $ 15.6 $ 2.4 $ 7.3 $ 10.7 Net income* $ 31.2 $ 27.4 14% $ 17.1 83% Diluted EPS* $ 0.51 $ 0.45 $
0.06 $ 0.28 $ 0.23 Days in quarter 91 91 - 91 - Margins improved on operating leverage, disciplined cost management, and IC price realization Non-operating income primarily consists of unrealized FX gain Minority interest from strong
net income of IC JVs in Taiwan and China 8/30/2022 6 *Net income attributable to Photronics, Inc. shareholders
$M Q322 Q222 Q/Q Q321 Y/Y High-End* $ 52.7 $ 51.4 3% $ 42.4 24% Mainstream $ 108.6 $
94.4 15% $ 75.4 44% Total $ 161.3 $ 145.8 11% $ 117.8 37% IC Photomask Revenue 8/30/2022 High-end growth driven by strong demand in Asia and US and better pricing Continued mainstream growth from chip proliferation in consumer
products, IoT, 5G, and Crypto supporting higher ASPs Outlook Continued strength from remote work and education Regionalization driving investments for global chip capacity Expanding ASPs on positive supply/demand balance *28nm and
smaller Total may differ due to rounding 7
FPD Photomask Revenue 8/30/2022 Strong high-end demand for mobile AMOLED displays and G10.5+ for
ultra-large screen TVs Mainstream production lower as we prioritized higher-margin high-end demand Outlook Mobile demand strength should continue Technology development drives demand for higher-value masks *≥G10.5, AMOLED and
LTPS $M Q322 Q222 Q/Q Q321 Y/Y High-End* $ 50.7 $ 46.6 9% $ 40.6 25% Mainstream $ 8.0 $ 12.1 (34%) $ 12.2 (34%) Total $ 58.7 $ 58.7 - $ 52.9 11% Total may differ due to rounding 8
Select Financial Data $M Q322 Q222 Q321 Cash $ 381 $ 329 $ 283 Debt $ 57 $ 83 $ 118 Net
Cash* $ 324 $ 247 $ 165 Operating Cash Flow $ 93 $ 44 $ 55 Capital Expenditures $ 12 $ 16 $ 19 Share repurchase - - $ 13 Debt primarily comprised of US equipment leases and local China loans; reduced debt $54M YTD Capex mostly
mainstream IC capacity & facility expansion Balance sheet able to fund investments, share repurchases, and strategic M&A opportunities Total share repurchases of $68M under current (Sep 2020) $100M authorization 8/30/2022 *Net cash
defined is a non-GAAP term; see reconciliation included in this presentation 9
Q4 2022 Guidance Revenue ($M) $205 - $215 Operating Margin 25% - 29% Taxes ($M) $12 - $15 Diluted
EPS $0.44 - $0.52 Diluted Shares (M) ~61 Full-year Capex (M) ~$100 Incorporation of chips in IoT, 5G, Crypto and consumer products Remote work and learning Advanced display technologies Growing nationalism spurs regional investments
in capacity Outlook clouded by geopolitical uncertainty, rising inflation and supply chain challenges Driving margin expansion and cash flows to achieve long-term target model 8/30/2022 10
For Additional Information: Please contact John P. Jordan Executive Vice President &
CFO 203.740.5671 [email protected] Thank you for your interest!
Appendix
Total Revenue 8/30/2022 13 IC FPD Total may differ due to rounding
IC Photomask Revenue 8/30/2022 14 Mainstream High-End High-End: 28nm and smaller; total may differ
due to rounding
FPD Photomask Revenue 8/30/2022 15 Mainstream High-End High-End: ≥G10.5, AMOLED and LTPS; total may
differ due to rounding
Non-GAAP Financial Measures 8/30/2022 16
Non-GAAP Financial Measures 8/30/2022 17