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Photronics Reports Third Quarter Fiscal 2012 Results

A conference call with investors and the media to discuss these results is scheduled for 8:30 a.m. Eastern time on Wednesday, August 15, 2012. The live dial-in number is (408) 774-4601. The call can also be accessed by logging onto Photronics' web site at www.photronics.com.

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.

12-2012

PLAB – E
 
 

PHOTRONICS, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Financial Information
(in thousands, except per share data)
(Unaudited)
                   
Three Months Ended Nine Months Ended
July 29, July 31, July 29, July 31,
2012 2011 2012 2011
 

Reconciliation of GAAP to Non-GAAP Net Income

Attributable to Photronics, Inc.
 
GAAP net income attributable to Photronics, Inc. $ 10,950 $ 11,265 $ 24,035 $ 6,938
 
(a) Debt extinguishment loss and net interest impact,
net of tax - 4,973 - 35,486
 
(b) Consolidation and restructuring charges, net of tax 7 - 1,182 -
 
(c) Impact of warrants, net of tax   -   (221 )   (94 )   599
 
Non-GAAP net income attributable to Photronics, Inc. $ 10,957 $ 16,017   $ 25,123   $ 43,023
 

Reconciliation of GAAP to Non-GAAP Net Income

Applicable to Common Shareholders
 
Weighted average number of diluted shares outstanding
 
GAAP   76,436   76,744     76,460     57,724
 
(d) Non-GAAP   76,436   76,692     76,435     70,559
 
Net income per diluted share
 
GAAP $ 0.16 $ 0.16   $ 0.37   $ 0.12
 
Non-GAAP $ 0.16 $ 0.23   $ 0.39   $ 0.66
 
(a) Represents extinguishment charges during the three and nine months ended July 31, 2011 related to the repurchase
of $5.0 million and $35.4 million, respectively, of the Company's 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 June 13, 2011 (0.4 million shares during the three months ended July 31, 2011
and 0.1 million shares during the nine months ended July 31, 2011), primarily related to the issuance of common stock
in exchange for $5.0 million of the Company's 5.5% convertible senior notes due in October 2014.
 
 

PHOTRONICS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
                   
 
Three Months Ended Nine Months Ended
July 29, July 31, July 29, July 31,
2012 2011 2012 2011
 
Net sales $ 116,616 $ 135,935 $ 346,220 $ 389,861
 
Costs and expenses:
 
Cost of sales (84,312 ) (97,695 ) (258,598 ) (284,540 )
 
Selling, general and administrative (11,784 ) (11,833 ) (35,311 ) (33,995 )
 
Research and development (5,221 ) (3,527 ) (14,106 ) (11,238 )
 
Consolidation, restructuring and related charges   (7 )   -     (1,182 )   -  
 
Operating income 15,292 22,880 37,023 60,088
 
Debt extinguishment loss - (4,973 ) - (35,259 )
 
Other expense, net   (767 )   (390 )   (2,143 )   (2,019 )
 
Income before income taxes 14,525 17,517 34,880 22,810
 
Income tax provision   (3,258 )   (4,895 )   (9,242 )   (11,637 )
 
Net income 11,267 12,622 25,638 11,173
 
Net income attributable to noncontrolling interests   (317 )   (1,357 )   (1,603 )   (4,235 )
 
Net income attributable to Photronics, Inc. $ 10,950   $ 11,265   $ 24,035   $ 6,938  
 
Earnings per share:
Basic $ 0.18   $ 0.19   $ 0.40   $ 0.12  
 
Diluted $ 0.16   $ 0.16   $ 0.37   $ 0.12  
 
Weighted average number of common shares
outstanding:
Basic   60,121     58,987     60,008     56,163  
 
Diluted   76,436     76,744     76,460     57,724  
 
 
 
 

PHOTRONICS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
                     
July 29, October 30,
2012 2011
 

Assets
 
Current assets:
Cash and cash equivalents $ 197,295 $ 189,928
Accounts receivable 82,522 85,540
Inventories 22,743 22,100
Other current assets   8,194   7,639
 
Total current assets 310,754 305,207
 
Property, plant and equipment, net 384,792 368,680
Investment in joint venture 93,271 79,984
Intangible assets, net 38,661 42,462
Other assets   20,212   21,521
 
$ 847,690 $ 817,854
 
 
 

Liabilities and Equity
 
Current liabilities:
Current portion of long-term borrowings $ 7,470 $ 5,583
Accounts payable and accrued liabilities   90,968   90,318
 
Total current liabilities 98,438 95,901
 
Long-term borrowings 170,989 152,577
Other liabilities 8,296 9,620
 
Equity   569,967   559,756
 
$ 847,690 $ 817,854
 
 
 
 

PHOTRONICS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
                     
Nine Months Ended
July 29, July 31,
2012 2011
 
 
Cash flows from operating activities:
Net income $ 25,638 $ 11,173
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 65,010 70,090
Debt extinguishment loss - 27,399
Consolidation, restructuring and related charges 262 -
Changes in assets and liabilities and other   16,614     (4,211 )
 
Net cash provided by operating activities   107,524     104,451  
 
Cash flows from investing activities:
Purchases of property, plant and equipment (92,009 ) (59,089 )
Investment in joint venture (13,397 ) (10,773 )
Other   (1,618 )   (250 )
 
Net cash used in investing activities   (107,024 )   (70,112 )
 
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 (3,646 ) (63,445 )
Repurchase of common stock by subsidiary (11,653 ) (3,294 )
Payments of deferred financing fees (198 ) (4,318 )
Proceeds from exercise of share based arrangements   517     694  
 
Net cash provided by financing activities   10,020     61,637  
 
Effect of exchange rate changes on cash   (3,153 )   7,924  
 
Net increase in cash and cash equivalents 7,367 103,900
Cash and cash equivalents, beginning of period   189,928     98,945  
 
 
Cash and cash equivalents, end of period $ 197,295   $ 202,845  
 
 

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