Photronics Reports Fourth Quarter and Fiscal Year 2012 Results *Quarterly sales of $104.2 million; exceeds revised guidance of $102 - $103 million *Quarterly Non-GAAP diluted EPS of $0.07; exceeds revised guidance of $0.03- $0.04 *Quarterly Non-GAAP net income of $4.1 million *Quarterly Non-GAAP EBITDA of $28 million *Working capital increases $21 million sequentially to $233 million *Net cash increases $22 million sequentially to $41 million Business Wire BROOKFIELD, Conn. -- December 04, 2012 Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in supplying innovative imaging technology solutions for the global electronics industry, today reported financial results for the fourth quarter and fiscal year ended October 28, 2012. “Fourth quarter revenues reflect decreased demand for both integrated circuit (IC) and flat panel display (FPD) photomasks during a challenging global economic and electronics industry environment,” stated Constantine ("Deno") Macricostas, Photronics' chairman and chief executive officer. “A universal softness in new designs for both IC and FPD components impacted demand for photomasks this quarter. Despite lower revenues, non-GAAP diluted earnings per share was $0.07, exceeding our revised forecast of $0.03 to $0.04 per share. Also, we continued to strengthen our balance sheet with improvements in net cash and working capital during the quarter. Looking at the full year, while overall sales were down, a 16% increase in high-end IC photomasks demonstrates the continued success of our strategy and strength of our technology. We believe our technology and market position coupled with favorable long term trends in electronic devices will provide substantial opportunities for Photronics when the market rebounds.” Sales for the fourth quarter of fiscal 2012 were $104.2 million, compared with $122.2 million for the fourth quarter of fiscal year 2011. Sales of semiconductor photomasks were $83.9 million, or 81% of revenues, during the fourth quarter of fiscal 2012, and sales of flat panel display (FPD) photomasks were $20.3 million, or 19% of revenues. For the fourth quarter of fiscal 2012, GAAP net income attributable to Photronics, Inc. was $3.8 million, or $0.06 earnings per diluted share, compared with $9.3 million, or $0.14 earnings per diluted share, for the fourth quarter of fiscal 2011. Non-GAAP net income attributable to Photronics, Inc. for the fourth quarter of 2012, excluding consolidation and restructuring charges of $0.2 million, was $4.1 million, or $0.07 earnings per diluted share. Non-GAAP net income attributable to Photronics, Inc. for the fourth quarter of 2011, excluding $0.2 million impact of warrants, was $9.1 million, or $0.14 earnings per diluted share. Sales for the 2012 fiscal year were $450.4 million, compared with $512.0 million for the 2011 fiscal year. For the 2012 fiscal year, sales of semiconductor photomasks were $350.1 million, or 78% of revenues, and sales of FPD photomasks were $100.3 million, or 22% of revenues. GAAP net income attributable to Photronics, Inc. for the 2012 fiscal year was $27.9 million, or $0.44 earnings per diluted share, compared with GAAP net income of $16.2 million, or $0.28 earnings per diluted share, for the 2011 fiscal year. Non-GAAP net income attributable to Photronics, Inc. for the 2012 fiscal year, excluding consolidation and restructuring charges of $1.4 million and $0.1 million impact of warrants, was $29.2 million, or $0.46 earnings per diluted share. Non-GAAP net income attributable to Photronics, Inc. for the 2011 fiscal year, excluding a $35.5 million debt extinguishment loss and $0.4 million impact of warrants, was $52.1 million, or $0.80 earnings per diluted share. The section below entitled "Non-GAAP Financial Measures" provides a definition and information about the use of non-GAAP financial measures in this press release, and the attached financial supplement reconciles non-GAAP financial information with Photronics, Inc.'s financial results under GAAP. Non-GAAP Financial Measures Non-GAAP net income attributable to Photronics, Inc. and non-GAAP earnings per share are “non-GAAP financial measures,” as such term is defined by the Securities and Exchange Commission, and may differ from non-GAAP financial measures used by other companies. Photronics, Inc. believes that non-GAAP net income attributable to Photronics, Inc. and non-GAAP earnings per share that exclude certain non-cash or non-recurring income or expense items are useful for analysts and investors to evaluate Photronics, Inc.’s future on-going performance because they enable a more meaningful comparison of Photronics, Inc.’s projected earnings and performance with its historical results of prior periods. These non-GAAP metrics, in particular non-GAAP net income attributable to Photronics, Inc. and non-GAAP earnings per share are not intended to represent funds available for Photronics, Inc.’s discretionary use and are not intended to represent, or be used as a substitute for, operating income, net income or cash flows from operations data 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 consolidated statements of operations and must be considered in performing a comprehensive assessment of overall financial performance. Non-GAAP financial information is adjusted for the following items: *Consolidation and restructuring charges in fiscal 2012 are excluded because they are not a part of ongoing operations. *Impact of warrants is excluded because it does not affect cash earnings. *Loss on extinguishment of debt in 2011 is excluded because it is not a part of ongoing operations. The presentation of this financial information should not be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States. The attached financial supplement reconciles non-GAAP financial information with Photronics, Inc.'s financial results under GAAP. A conference call with investors and the media to discuss these results is scheduled for 8:30 a.m. Eastern Time on Wednesday, December 5, 2012. The call can be accessed by logging onto Photronics' web site at www.photronics.com. The live dial-in number is 408-774-4601. The call will be archived for instant replay access until the Company reports its fiscal 2013 first quarter results. Photronics is a leading worldwide manufacturer of photomasks. Photomasks are high precision quartz plates that contain microscopic images of electronic circuits. A key element in the manufacture of semiconductors and flat panel displays, photomasks are used to transfer circuit patterns onto semiconductor wafers and flat panel substrates during the fabrication of integrated circuits, a variety of flat panel displays and, to a lesser extent, other types of electrical and optical components. They are produced in accordance with product designs provided by customers at 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 Photronics, Inc. and its subsidiaries (the Company). The forward-looking statements contained in this press release and other parts of Photronics’ web site 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, and technological factors. Accordingly, there is no assurance that the Company’s expectations will be realized. For a fuller discussion of the factors that may affect the Company's operations, see "Forward Looking Statements" in the Company's Quarterly and Annual Reports to the Securities and Exchange Commission on Forms 10-Q and 10-K. The Company assumes no obligation to provide revisions to any forward-looking statements. 15-2012 PLAB - E PHOTRONICS, INC. AND SUBSIDIARIES Reconciliation of GAAP to Non-GAAP Financial Information (in thousands, except per share data) (Unaudited) Three Months Ended Year Ended October October October October 28, 30, 28, 30, 2012 2011 2012 2011 Reconciliation of GAAP to Non-GAAP Net Income Attributable to Photronics, Inc. GAAP net income attributable $ 3,833 $ 9,291 $ 27,868 $ 16,229 to Photronics, Inc. (a) Consolidation and 246 - 1,428 - restructuring charges, net of tax (b) Impact of warrants, net - (175 ) (94 ) 424 of tax (c) Debt extinguishment loss and net - - - 35,486 interest impact, net of tax Non-GAAP net income attributable $ 4,079 $ 9,116 $ 29,202 $ 52,139 to Photronics, Inc. Reconciliation of GAAP to Non-GAAP Net Income Applicable to Common Shareholders Weighted average number of diluted shares outstanding GAAP 61,052 76,259 76,464 58,458 Non-GAAP 61,052 76,082 76,445 71,940 Net income per diluted share GAAP $ 0.06 $ 0.14 $ 0.44 $ 0.28 Non-GAAP $ 0.07 $ 0.14 $ 0.46 $ 0.80 (a) Represents consolidation and restructuring charges primarily related to restructuring in Singapore (b) Represents financing expenses related to warrants, which are recorded in other expense, net. (c) Represents extinguishment charges during the year ended October 30, 2011 related to the repurchase of $35.4 million of the Company's 5.50% convertible senior notes due in October 2014, and net interest impact on convertible transactions. PHOTRONICS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Income (in thousands, except per share amounts) Three Months Ended Year Ended October 28, October 30, October 28, October 30, 2012 2011 2012 2011 Net sales $ 104,219 $ 122,159 $ 450,439 $ 512,020 Costs and expenses: Cost of sales (79,922 ) (91,266 ) (338,519 ) (375,806 ) Selling, general and (11,396 ) (11,245 ) (46,706 ) (45,240 ) administrative Research and (5,264 ) (4,269 ) (19,371 ) (15,507 ) development Consolidation, restructuring (246 ) - (1,428 ) - and related charges Operating income 7,391 15,379 44,415 75,467 Debt extinguishment - - - (35,259 ) loss Other expense, (1,623 ) (2,290 ) (3,767 ) (4,309 ) net Income before 5,768 13,089 40,648 35,899 income taxes Income tax (1,551 ) (4,054 ) (10,793 ) (15,691 ) provision Net income 4,217 9,035 29,855 20,208 Net (income) loss attributable to (384 ) 256 (1,987 ) (3,979 ) noncontrolling interests Net income attributable to $ 3,833 $ 9,291 $ 27,868 $ 16,229 Photronics, Inc. Earnings per share: Basic $ 0.06 $ 0.16 $ 0.46 $ 0.28 Diluted $ 0.06 $ 0.14 $ 0.44 $ 0.28 Weighted-average number of common shares outstanding: Basic 60,196 59,629 60,055 57,030 Diluted 61,052 76,259 76,464 58,458 PHOTRONICS, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (in thousands) October 28, October 30, 2012 2011 Assets Current assets: Cash and cash equivalents $ 218,043 $ 189,928 Accounts receivable 75,685 85,540 Inventories 17,702 22,100 Other current assets 8,364 7,639 Total current assets 319,794 305,207 Property, plant and equipment, net 380,808 368,680 Investment in joint venture 93,252 79,984 Intangible assets, net 37,384 42,462 Other assets 19,356 21,521 $ 850,594 $ 817,854 Liabilities and Equity Current liabilities: Current portion of long-term $ 7,781 $ 5,583 borrowings Accounts payable and accrued 79,092 90,318 liabilities Total current liabilities 86,873 95,901 Long-term borrowings 168,956 152,577 Other liabilities 8,764 9,620 Equity 586,001 559,756 $ 850,594 $ 817,854 PHOTRONICS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (in thousands) Year Ended October 28, October 30, 2012 2011 Cash flows from operating activities: Net income $ 29,855 $ 20,208 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 85,209 93,460 Debt extinguishment loss - 27,399 Consolidation, restructuring and 262 - related charges Changes in assets and 17,223 (4,514 ) liabilities and other Net cash provided by operating 132,549 136,553 activities Cash flows from investing activities: Purchases of property, plant and (96,978 ) (82,121 ) equipment Investment in joint venture (13,397 ) (18,271 ) Other (1,568 ) (345 ) Net cash used in investing (111,943 ) (100,737 ) activities Cash flows from financing activities: Proceeds from long-term 25,000 17,000 borrowings Proceeds from issuance of - 115,000 convertible debt Repurchase of common stock of (15,598 ) (9,878 ) subsidiary Repayments of long-term (5,293 ) (64,107 ) borrowings Payments of deferred financing (198 ) (4,318 ) fees Proceeds from exercise of 653 828 share-based arrangements Net cash provided by financing 4,564 54,525 activities Effect of exchange rate changes 2,945 642 on cash Net increase in cash and cash 28,115 90,983 equivalents Cash and cash equivalents, 189,928 98,945 beginning of year Cash and cash equivalents, end $ 218,043 $ 189,928 of year Contact: Photronics, Inc. Pete Broadbent, 203-775-9000 Vice President, Investor Relations & Marketing email@example.com
Photronics Reports Fourth Quarter and Fiscal Year 2012 Results
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