Photronics Reports Strong Second Quarter Fiscal 2012 Results

09-2012

PLAB – E

PHOTRONICS, INC. AND SUBSIDIARIES
Reconciliation of GAAP to non-GAAP Financial Information
(in thousands)
(Unaudited)
				Three Months Ended								Six Months Ended
				April 29,				May 1,				April 29,				May 1,
				2012				2011				2012				2011
Reconciliation of GAAP to Non-GAAP Net Income (Loss) Attributable to Photronics, Inc.
GAAP net income (loss) attributable to Photronics, Inc.				$	8,818			$	(16,438	)		$	13,086			$	(4,327	)
(a)		Debt extinguishment loss and net interest impact, net of tax			-				30,513				-				30,513
(b)		Consolidation and restructuring charges, net of tax			58				-				1,176				-
(c)		Impact of warrants, net of tax			-				745				(94	)			820
Non-GAAP net income attributable to Photronics, Inc.				$	8,876			$	14,820			$	14,168			$	27,006
Reconciliation of GAAP to Non-GAAP Net Income (Loss) Applicable to Common Shareholders
Weighted average number of diluted shares outstanding
		GAAP			76,590				55,685				76,472				54,751
(d)		Non-GAAP			76,590				67,047				76,435				66,634
Net income (loss) per diluted share
		GAAP		$	0.14			$	(0.30	)		$	0.21			$	(0.08	)
		Non-GAAP		$	0.14			$	0.24			$	0.23			$	0.44
(a)		Represents 2011 extinguishment charge related to the repurchase of $30.4 million of our 5.50% convertible senior notes due in October 2014, and net interest impact on convertible transactions.
(b)		Represents consolidation and restructuring charges primarily related to restructuring in Singapore.
(c)		Represents financing expenses related to warrants, which are recorded in other income (expense).
(d)		Excludes the 2011 impact of shares issued on March 29, 2011 (1.7 million shares during the three months ended May 1, 2011 and 0.8 million shares during the six months ended May 1, 2011), primarily related to the issuance of common stock in exchange for $30.4 million of our 5.5% convertible senior notes due in October 2014.

PHOTRONICS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
		Three Months Ended								Six Months Ended
		April 29,				May 1,				April 29,				May 1,
		2012				2011				2012				2011
Net sales		$	117,451			$	133,103			$	229,605			$	253,926
Costs and expenses:
Cost of sales			(87,590	)			(96,617	)			(174,286	)			(186,845	)
Selling, general and administrative			(12,201	)			(11,448	)			(23,526	)			(22,162	)
Research and development			(4,441	)			(3,940	)			(8,885	)			(7,711	)
Consolidation, restructuring and related charges			(58	)			-				(1,176	)			-
Operating income			13,161				21,098				21,732				37,208
Debt extinguishment loss			-				(30,286	)			-				(30,286	)
Other expense, net			(968	)			(2,585	)			(1,377	)			(1,629	)
Income (loss) before income taxes			12,193				(11,773	)			20,355				5,293
Income tax provision			(2,663	)			(3,260	)			(5,984	)			(6,742	)
Net income (loss)			9,530				(15,033	)			14,371				(1,449	)
Net income attributable to noncontrolling interests			(712	)			(1,405	)			(1,285	)			(2,878	)
Net income (loss) attributable to Photronics, Inc.		$	8,818			$	(16,438	)		$	13,086			$	(4,327	)
Earnings (loss) per share:
Basic		$	0.15			$	(0.30	)		$	0.22			$	(0.08	)
Diluted		$	0.14			$	(0.30	)		$	0.21			$	(0.08	)
Weighted average number of common shares outstanding:
Basic			60,086				55,685				59,952				54,751
Diluted			76,590				55,685				76,472				54,751

PHOTRONICS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
		April 29,				October 30,
		2012				2011
Assets
Current assets:
Cash and cash equivalents		$	191,960			$	189,928
Accounts receivable			89,123				85,540
Inventories			20,453				22,100
Other current assets			8,359				7,639
Total current assets			309,895				305,207
Property, plant and equipment, net			382,800				368,680
Investment in joint venture			85,831				79,984
Intangible assets, net			39,918				42,462
Other assets			20,803				21,521
		$	839,247			$	817,854
Liabilities and Equity
Current liabilities:
Current portion of long-term borrowings		$	7,874			$	5,583
Accounts payable and accrued liabilities			81,394				90,318
Total current liabilities			89,268				95,901
Long-term borrowings			172,312				152,577
Other liabilities			8,789				9,620
Equity			568,878				559,756
		$	839,247			$	817,854

PHOTRONICS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
		Six Months Ended
		April 29,				May 1,
		2012				2011
Cash flows from operating activities:
Net income (loss)		$	14,371			$	(1,449	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization			44,135				46,467
Consolidation, restructuring, and related charges			262				-
Debt extinguishment loss			-				23,504
Changes in assets and liabilities and other			3,631				(4,532	)
Net cash provided by operating activities			62,399				63,990
Cash flows from investing activities:
Purchases of property, plant and equipment			(67,626	)			(39,254	)
Investment in joint venture			(5,899	)			(8,498	)
Other			(1,600	)			(250	)
Net cash used in investing activities			(75,125	)			(48,002	)
Cash flows from financing activities:
Proceeds from long-term borrowings			25,000				17,000
Proceeds from issuance of convertible debt			-				115,000
Repayments of long-term borrowings			(2,343	)			(60,303	)
Payments of deferred financing fees			(198	)			(4,145	)
Repurchase of common stock by subsidiary			(7,577	)			(3,294	)
Proceeds from exercise of share-based arrangements			431				356
Net cash provided by financing activities			15,313				64,614
Effect of exchange rate changes on cash			(555	)			6,565
Net increase in cash and cash equivalents			2,032				87,167
Cash and cash equivalents, beginning of period			189,928				98,945
Cash and cash equivalents, end of period		$	191,960			$	186,112

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