Photronics Reports Full Year and Fourth Quarter Fiscal 2022 Results

Photronics, Inc.

BROOKFIELD, Conn., Dec. 13, 2022 (GLOBE NEWSWIRE) -- Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in photomask technologies and solutions, today reported financial results for its fiscal 2022 full year and fourth quarter ended October 31, 2022.

“We posted a solid finish to a great year, achieving record revenue for the fifth consecutive year as demand for our design-driven products remained strong and our entire team performed well,” said Frank Lee, chief executive officer. “In the quarter, IC was soft, primarily due to lower high-end logic demand from foundries in Asia. High-end FPD also declined as panel makers of premium smart phones are focused on producing new products and have temporarily slowed design activity. Profit margins were flat sequentially as positive pricing and cost management offset the impact from lower volumes. We generated strong cash from operations, allowing us to invest in organic growth and reduce debt, strengthening our balance sheet and positioning us to support our growth strategy as well as helping us to navigate economic uncertainty. The global Photronics team performed well in 2022, and we believe we will continue to achieve our goals in 2023 and beyond.”

Full Year 2022 Results

• Revenue of $824.5 million was up 24% over the previous year and was the fifth consecutive year of record revenue

• Net income attributable to Photronics, Inc. shareholders was $118.8 million ($1.94 per diluted share), compared with $55.4 million ($0.89 per diluted share) in 2021

• Integrated circuit (IC) revenue was $593.0 million, up 29%

• Flat panel display (FPD) revenue was $231.5 million, up 14%

• Cash and short-term investments increased to $359 million, with $275 million generated from operating activities and $112 million invested in growth through capital expenditures
  

Fourth Quarter 2022 Results

• Revenue was $210.3 million, down 4% sequentially and up 16% compared with the same period of last year

• Net income attributable to Photronics, Inc. shareholders was $37.1 million ($0.60 per diluted share), compared with $31.2 million ($0.51 per diluted share) in the third quarter of 2022 and $19.8 million ($0.33 per diluted share) in the fourth quarter 2021

• IC revenue was $156.2 million, down 3% sequentially and up 25% compared with the same period of last year

• FPD revenue was $54.1 million, down 8% sequentially and down 3% compared with the same period of last year

• Cash generated from operating activities was $79 million and cash invested in growth through capital expenditures was $66 million
  

First Quarter 2023 Guidance

For the first quarter of 2023, Photronics expects revenue to be between $203 million and $213 million and net income attributable to Photronics, Inc. shareholders to be between $0.40 and $0.48 per diluted share.

Webcast

A webcast to discuss these results is scheduled for 8:30 a.m. Eastern time on Tuesday, December 13, 2022. The webcast will be broadcast live and on-demand on the Events and Presentations link on the Photronics website or click here. 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, 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.

PHOTRONICS, INC.
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
				Three Months Ended										Year Ended
				October 31,			July 31,				October 31,			October 31,				October 31,
				2022			2022				2021			2022				2021
Revenue				$	210,266		$	219,948			$	181,288		$	824,549			$	663,761
Cost of goods sold					129,997			136,085				129,347			530,336				496,717
Gross Profit					80,269			83,863				51,941			294,213				167,044
Operating Expenses:
Selling, general and administrative					15,683			15,960				14,322			63,989				57,525
Research and development					4,045			4,151				4,100			18,341				18,490
Total Operating Expenses					19,728			20,111				18,422			82,330				76,015
Other operating (loss) income, net					-			(23	)			-			(17	)			3,525
Operating Income					60,541			63,729				33,519			211,866				94,554
Non-operating income, net					10,797			3,641				3,809			27,167				7,452
Income Before Income Tax Provision					71,338			67,370				37,328			239,033				102,006
Income tax provision					16,074			18,146				8,697			59,791				23,190
Net Income					55,264			49,224				28,631			179,242				78,816
Net income attributable to noncontrolling interests					18,204			17,994				8,820			60,456				23,367
Net income attributable to Photronics, Inc. shareholders				$	37,060		$	31,230			$	19,811		$	118,786			$	55,449
Earnings per share:
Basic				$	0.61		$	0.51			$	0.33		$	1.96			$	0.90
Diluted				$	0.60		$	0.51			$	0.33		$	1.94			$	0.89
Weighted-average number of common shares outstanding:
Basic					60,773			60,701				60,216			60,559				61,407
Diluted					61,374			61,299				60,908			61,189				61,999

PHOTRONICS, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
				October 31,			October 31,
				2022			2021
Assets
Current assets:
Cash and cash equivalents				$	319,680		$	276,670
Short-term investments					38,820			-
Accounts receivable					198,147			174,447
Inventories					50,753			55,249
Other current assets					37,252			44,250
Total current assets					644,652			550,616
Property, plant and equipment, net					643,873			696,553
Other assets					27,305			47,033
Total assets				$	1,315,830		$	1,294,202
Liabilities and Equity
Current liabilities:
Current portion of long-term debt				$	10,024		$	22,248
Accounts payable and accrued liabilities					183,773			153,900
Total current liabilities					193,797			176,148
Long-term debt					32,310			89,446
Other liabilities					27,634			28,046
Photronics, Inc. shareholders' equity					831,527			823,692
Noncontrolling interests					230,562			176,870
Total equity					1,062,089			1,000,562
Total liabilities and equity				$	1,315,830		$	1,294,202

PHOTRONICS, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
					Year Ended
					October 31,				October 31,
					2022				2021
Cash flows from operating activities:
Net income					$	179,242			$	78,816
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization						80,330				90,396
Share-based compensation						6,308				5,348
Changes in operating assets, liabilities and other						9,307				(23,788	)
Net cash provided by operating activities						275,187				150,772
Cash flows from investing activities:
Purchases of property, plant and equipment						(112,338	)			(109,099	)
Purchases of available-for-sale debt securities						(38,854	)			-
Government incentives						3,615				5,775
Other						(180	)			(170	)
Net cash used in investing activities						(147,757	)			(103,494	)
Cash flows from financing activities:
Repayments of debt						(65,440	)			(20,352	)
Purchases of treasury stock						(2,522	)			(48,249	)
Contributions from noncontrolling interest						24,995				-
Dividends paid to noncontrolling interests						-				(9,597	)
Proceeds from share-based arrangements						5,749				3,874
Proceeds from long-term debt						-				20,858
Net settlements of restricted stock awards						(1,471	)			(437	)
Net cash used in financing activities						(38,689	)			(53,903	)
Effects of exchange rate changes on cash, cash equivalents, and restricted cash						(46,012	)			4,703
Net increase (decrease) in cash, cash equivalents, and restricted cash						42,729				(1,922	)
Cash, cash equivalents, and restricted cash, beginning of period						279,680				281,602
Cash, cash equivalents, and restricted cash, end of period					$	322,409			$	279,680

For Further Information:
John P. Jordan
Executive Vice President & CFO
203.740.5671
jjordan@photronics.com