☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Connecticut | 06-0854886 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
15 Secor Road, Brookfield, Connecticut | 06804 | |
(Address of principal executive offices) | (Zip Code) |
(203) 775-9000 |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
COMMON | PLAB | NASDAQ Global Select Market |
Large Accelerated Filer | ☒ | Accelerated Filer | ☐ | Non-Accelerated Filer | ☐ | Smaller Reporting Company |
☐ | ||||||
Emerging Growth company | ☐ |
3 | ||
4 | ||
PART I. | FINANCIAL INFORMATION | |
Item 1. | ||
8 | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II. | 34 | |
Item 1. | 34 | |
Item 1A. | ||
Item 2. | 34 | |
Item 6. |
AMOLED | Active-matrix organic light-emitting diode. A technology used in mobile devices. |
Application-specific IC | An integrated circuit customized for a particular use, rather than intended for general-purpose use |
ASC | Accounting Standards Codification |
ASP | Average Selling Price |
ASU | Accounting Standards Update |
Chip stacking | Placement of an integrated circuit on top of another integrated circuit, resulting in the reduction of the distance between the chips in a circuit board |
COVID-19 | Covid virus 2019, an infectious disease that was declared a pandemic by the World Health Organization in March 2020 |
DNP | Dai Nippon Printing Co., Ltd. |
EUV | A wafer lithography technology using the industry standard extreme ultraviolet (EUV) wavelength. EUV photomasks function by selectively reflecting or blocking light, in contrast to conventional photomasks which function by selectively transmitting or blocking light |
Exchange Act | The Securities Exchange Act of 1934 (as amended) |
FASB | Financial Accounting Standards Board |
Form 10-K | Annual Report on Form 10-K |
Form 10-Q | Quarterly Report on Form 10-Q |
FPDs | Flat-panel displays, or “displays” |
Generation | In reference to flat-panel displays, refers to the size range of the underlying substrate to which a photomask is applied. Higher generation (or “G”) numbers represent larger substrates |
High-end (photomasks) | For IC, photomasks that are 28nm or smaller; for FPD, AMOLED, G10.5+, and LTPS photomasks |
ICs | Integrated circuits, or semiconductors |
LIBOR | London Inter-Bank Offered Rate |
LTPS | Low-Temperature Poly Silicon, a polycrystalline silicon synthesized at relatively low temperatures; polycrystalline silicon in thin-film transistors (TFTs) are used in liquid-crystal display (LCD) flat panels and to drive organic light-emitting diode (OLED) displays |
MLA | Master Lease Agreement |
Optical proximity correction | A photolithography enhancement technique applied to compensate for the limitations of light to maintain the edge placement integrity of an original design, imaged onto a silicon wafer, for further processing to an etched pattern. |
PDMCX | Xiamen American Japan Photronics Mask Co., Ltd., a joint venture of Photronics and DNP |
Phase-shift photomasks | Photomasks that take advantage of the interference generated by phase differences to improve image resolution in photolithography |
Pure-play foundry | A company that does not produce a significant volume of IC products of its own design, but rather operates IC fabrication plants dedicated to producing ICs for other companies |
RMB | Chinese renminbi |
ROU (assets) | Right-of-use asset |
SEC | Securities and Exchange Commission |
Securities Act | The Securities Act of 1933 (as amended) |
Sputtering | The bombardment of a material with energetic particles to cause microscopic particles of the material to eject from its surface. |
U.S. GAAP | Accounting principles generally accepted in the United States of America |
Wafer | A wafer, or silicon wafer, is a thin slice of semiconductor material that, in the fabrication of microelectronics, serves as the substrate for microelectronic devices built in and upon the wafer |
January 28, 2018 | October 29, 2017 | |||||||||||||||
January 29, 2023 | October 31, 2022 | |||||||||||||||
ASSETS | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 348,560 | $ | 308,021 | $ | 334,792 | $ | 319,680 | ||||||||
Accounts receivable, net of allowance of $2,422 in 2018 and $2,319 in 2017 | 104,638 | 105,320 | ||||||||||||||
Short-term investments | 39,199 | 38,820 | ||||||||||||||
Accounts receivable, net of allowance of $1,116 in 2023 and $1,002 in 2022 | 220,692 | 198,147 | ||||||||||||||
Inventories | 26,997 | 23,703 | 52,796 | 50,753 | ||||||||||||
Other current assets | 12,162 | 12,080 | 53,337 | 37,252 | ||||||||||||
Total current assets | 492,357 | 449,124 | 700,816 | 644,652 | ||||||||||||
Property, plant and equipment, net | 548,307 | 535,197 | 710,927 | 643,873 | ||||||||||||
Intangible assets, net | 16,224 | 17,122 | ||||||||||||||
Deferred income taxes | 20,583 | 15,481 | 21,922 | 19,816 | ||||||||||||
Other assets | 3,985 | 3,870 | 8,015 | 7,489 | ||||||||||||
Total assets | $ | 1,081,456 | $ | 1,020,794 | $ | 1,441,680 | $ | 1,315,830 | ||||||||
LIABILITIES AND EQUITY | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Current portion of long-term borrowings | $ | 3,259 | $ | 4,639 | ||||||||||||
Current portion of long-term debt | $ | 6,541 | $ | 10,024 | ||||||||||||
Accounts payable | 54,973 | 50,834 | 84,818 | 79,566 | ||||||||||||
Accrued liabilities | 29,841 | 26,303 | 107,972 | 104,207 | ||||||||||||
Total current liabilities | 88,073 | 81,776 | 199,331 | 193,797 | ||||||||||||
Long-term borrowings | 57,366 | 57,337 | ||||||||||||||
Long-term debt | 27,323 | 32,310 | ||||||||||||||
Other liabilities | 17,570 | 16,386 | 32,306 | 27,634 | ||||||||||||
Total liabilities | 163,009 | 155,499 | 258,960 | 253,741 | ||||||||||||
Commitments and contingencies | | |||||||||||||||
Equity: | ||||||||||||||||
Preferred stock, $0.01 par value, 2,000 shares authorized, none issued and outstanding | - | - | ||||||||||||||
Common stock, $0.01 par value, 150,000 shares authorized, 68,869 shares issued and outstanding at January 28, 2018 and 68,666 shares issued and outstanding at October 29, 2017 | 689 | 687 | ||||||||||||||
Preferred stock, $0.01 par value, 2,000 shares authorized, none issued and outstanding | - | - | ||||||||||||||
Common stock, $0.01 par value, 150,000 shares authorized, 61,102 shares issued and outstanding at January 29, 2023, and 60,791 shares issued and outstanding at October 31, 2022 | 611 | 608 | ||||||||||||||
Additional paid-in capital | 549,328 | 547,596 | 494,954 | 493,741 | ||||||||||||
Retained earnings | 195,288 | 189,390 | 449,620 | 435,634 | ||||||||||||
Accumulated other comprehensive income | 32,128 | 6,891 | ||||||||||||||
Total Photronics, Inc. shareholders' equity | 777,433 | 744,564 | ||||||||||||||
Accumulated other comprehensive loss | (24,420 | ) | (98,456 | ) | ||||||||||||
Total Photronics, Inc. shareholders’ equity | 920,765 | 831,527 | ||||||||||||||
Noncontrolling interests | 141,014 | 120,731 | 261,955 | 230,562 | ||||||||||||
Total equity | 918,447 | 865,295 | 1,182,720 | 1,062,089 | ||||||||||||
Total liabilities and equity | $ | 1,081,456 | $ | 1,020,794 | $ | 1,441,680 | $ | 1,315,830 |
Three Months Ended | Three Months Ended | |||||||||||||||
January 28, 2018 | January 29, 2017 | January 29, 2023 | January 30, 2022 | |||||||||||||
Revenue | $ | 123,446 | $ | 109,831 | $ | 211,090 | $ | 189,827 | ||||||||
Cost of goods sold | (95,784 | ) | (86,832 | ) | 135,013 | 129,964 | ||||||||||
Gross profit | 27,662 | 22,999 | 76,077 | 59,863 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling, general and administrative | (11,750 | ) | (10,871 | ) | ||||||||||||
Selling, general, and administrative | 16,818 | 15,727 | ||||||||||||||
Research and development | (4,104 | ) | (3,485 | ) | 3,302 | 5,939 | ||||||||||
Total operating expenses | (15,854 | ) | (14,356 | ) | 20,120 | 21,666 | ||||||||||
Operating income | 11,808 | 8,643 | 55,957 | 38,197 | ||||||||||||
Other income (expense): | ||||||||||||||||
Interest income and other income (expense) | (3,531 | ) | (1,524 | ) | ||||||||||||
Foreign currency transactions impact, net | (16,944 | ) | 5,268 | |||||||||||||
Interest income and other income, net | 2,584 | 334 | ||||||||||||||
Interest expense | (574 | ) | (559 | ) | (65 | ) | (895 | ) | ||||||||
Income before income tax provision | 41,532 | 42,904 | ||||||||||||||
Income before income taxes | 7,703 | 6,560 | ||||||||||||||
Income tax benefit (provision) | 1,778 | (2,050 | ) | |||||||||||||
Income tax provision | 12,582 | 11,178 | ||||||||||||||
Net income | 9,481 | 4,510 | 28,950 | 31,726 | ||||||||||||
Net income attributable to noncontrolling interests | (3,583 | ) | (2,564 | ) | 14,964 | 8,662 | ||||||||||
Net income attributable to Photronics, Inc. shareholders | $ | 5,898 | $ | 1,946 | $ | 13,986 | $ | 23,064 | ||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 0.09 | $ | 0.03 | $ | 0.23 | $ | 0.38 | ||||||||
Diluted | $ | 0.09 | $ | 0.03 | $ | 0.23 | $ | 0.38 | ||||||||
Weighted-average number of common shares outstanding: | ||||||||||||||||
Basic | 68,755 | 68,176 | 60,894 | 60,158 | ||||||||||||
Diluted | 69,372 | 69,169 | 61,470 | 60,936 |
Three Months Ended | Three Months Ended | |||||||||||||||
January 28, 2018 | January 29, 2017 | January 29, 2023 | January 30, 2022 | |||||||||||||
Net income | $ | 9,481 | $ | 4,510 | $ | 28,950 | $ | 31,726 | ||||||||
Other comprehensive income (loss), net of tax of $0: | ||||||||||||||||
Other comprehensive (loss) income, net of tax of $0: | ||||||||||||||||
Foreign currency translation adjustments | 30,087 | (634 | ) | 90,519 | (9,831 | ) | ||||||||||
Amortization of cash flow hedge | 32 | 32 | ||||||||||||||
Other | (32 | ) | - | (54 | ) | 37 | ||||||||||
Net other comprehensive income (loss ) | 30,087 | (602 | ) | |||||||||||||
Net other comprehensive (loss) income | 90,465 | (9,794 | ) | |||||||||||||
Comprehensive income | 39,568 | 3,908 | 119,415 | 21,932 | ||||||||||||
Less: comprehensive income attributable to noncontrolling interests | (8,433 | ) | (3,821 | ) | 31,393 | 8,874 | ||||||||||
Comprehensive income attributable to Photronics, Inc. shareholders | $ | 31,135 | $ | 87 | $ | 88,022 | $ | 13,058 |
Three Months Ended January 29, 2023 | ||||||||||||||||||||||||||||||||
Photronics, Inc. Shareholders | ||||||||||||||||||||||||||||||||
Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Non- controlling Interests | Total Equity | |||||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||
Balance at October 31, 2022 | 60,791 | $ | 608 | $ | 493,741 | $ | 435,634 | $ | - | $ | (98,456 | ) | $ | 230,562 | $ | 1,062,089 | ||||||||||||||||
Net income | - | - | - | 13,986 | - | - | 14,964 | 28,950 | ||||||||||||||||||||||||
Other comprehensive income | - | - | - | - | - | 74,036 | 16,429 | 90,465 | ||||||||||||||||||||||||
Shares issued under equity plans | 311 | 3 | (608 | ) | - | - | - | - | (605 | ) | ||||||||||||||||||||||
Share-based compensation expense | - | - | 1,821 | - | - | - | - | 1,821 | ||||||||||||||||||||||||
Balance at January 29, 2023 | 61,102 | $ | 611 | $ | 494,954 | $ | 449,620 | $ | - | $ | (24,420 | ) | $ | 261,955 | $ | 1,182,720 |
Three Months Ended January 30, 2022 | ||||||||||||||||||||||||||||||||
Photronics, Inc. Shareholders | ||||||||||||||||||||||||||||||||
Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Non- controlling Interests | Total Equity | |||||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||
Balance at October 31, 2021 | 60,024 | $ | 600 | $ | 484,672 | $ | 317,849 | $ | - | $ | 20,571 | $ | 176,870 | $ | 1,000,562 | |||||||||||||||||
Net income | - | - | - | 23,064 | - | - | 8,662 | 31,726 | ||||||||||||||||||||||||
Other comprehensive (loss) income | - | - | - | - | - | (10,006 | ) | 212 | (9,794 | ) | ||||||||||||||||||||||
Shares issued under equity plans | 728 | 7 | 2,733 | - | - | - | - | 2,740 | ||||||||||||||||||||||||
Share-based compensation expense | - | - | 1,457 | - | - | - | - | 1,457 | ||||||||||||||||||||||||
Contribution from noncontrolling interest | - | - | - | - | - | - | 14,997 | 14,997 | ||||||||||||||||||||||||
Purchase of treasury stock | - | - | - | - | (2,522 | ) | - | - | (2,522 | ) | ||||||||||||||||||||||
Retirement of treasury stock | (188 | ) | (1 | ) | (1,520 | ) | (1,001 | ) | 2,522 | - | - | - | ||||||||||||||||||||
Balance at January 30, 2022 | 60,564 | $ | 606 | $ | 487,342 | $ | 339,912 | $ | - | $ | 10,565 | $ | 200,741 | $ | 1,039,166 |
Three Months Ended | Three Months Ended | |||||||||||||||
January 28, 2018 | January 29, 2017 | January 29, 2023 | January 30, 2022 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income | $ | 9,481 | $ | 4,510 | $ | 28,950 | $ | 31,726 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 22,363 | 20,896 | 19,105 | 20,810 | ||||||||||||
Share-based compensation | 1,821 | 1,457 | ||||||||||||||
Changes in assets and liabilities: | ||||||||||||||||
Accounts receivable | 4,692 | 6,799 | (7,565 | ) | 3,269 | |||||||||||
Inventories | (2,385 | ) | (1,199 | ) | 1,705 | (7,020 | ) | |||||||||
Other current assets | 432 | 1,659 | (13,060 | ) | (6,730 | ) | ||||||||||
Accounts payable, accrued liabilities, and other | (3,721 | ) | (1,126 | ) | (3,276 | ) | 15,618 | |||||||||
Net cash provided by operating activities | 30,862 | 31,539 | 27,680 | 59,130 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchases of property, plant and equipment | (10,995 | ) | (9,600 | ) | (31,097 | ) | (19,175 | ) | ||||||||
Acquisition of business | - | (5,400 | ) | |||||||||||||
Government incentives | 1,014 | - | ||||||||||||||
Other | (134 | ) | (396 | ) | (87 | ) | (43 | ) | ||||||||
Net cash used in investing activities | (11,129 | ) | (15,396 | ) | (30,170 | ) | (19,218 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||||
Repayments of long-term borrowings | (1,381 | ) | (1,343 | ) | ||||||||||||
Repayments of debt | (9,218 | ) | (15,192 | ) | ||||||||||||
Purchases of treasury stock | - | (2,522 | ) | |||||||||||||
Contribution from noncontrolling interest | 11,998 | - | - | 14,997 | ||||||||||||
Proceeds from share-based arrangements | 798 | 1,113 | 672 | 3,840 | ||||||||||||
Other | (261 | ) | (16 | ) | ||||||||||||
Net settlements of restricted stock awards | (1,168 | ) | (1,458 | ) | ||||||||||||
Net cash provided by (used in) financing activities | 11,154 | (246 | ) | |||||||||||||
Net cash used in financing activities | (9,714 | ) | (335 | ) | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 9,652 | (275 | ) | |||||||||||||
Effects of exchange rate changes on cash, cash equivalents, and restricted cash | 27,499 | (2,057 | ) | |||||||||||||
Net increase in cash and cash equivalents | 40,539 | 15,622 | ||||||||||||||
Cash and cash equivalents at beginning of period | 308,021 | 314,074 | ||||||||||||||
Net increase in cash, cash equivalents, and restricted cash | 15,295 | 37,520 | ||||||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 322,409 | 279,680 | ||||||||||||||
Cash, cash equivalents, and restricted cash at end of period | 337,704 | 317,200 | ||||||||||||||
Less: Ending restricted cash | 2,912 | 3,005 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 348,560 | $ | 329,696 | $ | 334,792 | $ | 314,195 | ||||||||
Supplemental disclosure information: | ||||||||||||||||
Supplemental disclosure of non-cash information: | ||||||||||||||||
Accrual for property, plant and equipment purchased during the period | $ | 1,544 | $ | 2,029 | ||||||||||||
Accruals for property, plant and equipment purchased during the period | $ | 12,031 | $ | 7,092 |
- | Maturing within three months or less from the date of purchase | Cash and cash equivalents |
- | Maturing, as of the date of purchase, more than three months, but with remaining maturities of less than one year, from the balance sheet date | Short-term investments |
- | Maturing one year or more from the balance sheet date | Long-term marketable investments |
Three Months Ended January 28, 2018 | ||||||||||||||||||||||||||||
Photronics, Inc. Shareholders | ||||||||||||||||||||||||||||
Common Stock | Accumulated | |||||||||||||||||||||||||||
Additional | Other | Non- | ||||||||||||||||||||||||||
Paid-in | Retained | Comprehensive | controlling | Total | ||||||||||||||||||||||||
Shares | Amount | Capital | Earnings | Income | Interests | Equity | ||||||||||||||||||||||
Balance at October 30, 2017 | 68,666 | $ | 687 | $ | 547,596 | $ | 189,390 | $ | 6,891 | $ | 120,731 | $ | 865,295 | |||||||||||||||
Net income | - | - | - | 5,898 | - | 3,583 | 9,481 | |||||||||||||||||||||
Other comprehensive income | - | - | - | - | 25,237 | 4,850 | 30,087 | |||||||||||||||||||||
Sale of common stock through employee stock option and purchase plans | 116 | 1 | 701 | - | - | - | 702 | |||||||||||||||||||||
Restricted stock awards vesting and expense | 87 | 1 | 386 | - | - | - | 387 | |||||||||||||||||||||
Share-based compensation expense | - | - | 497 | - | - | - | 497 | |||||||||||||||||||||
Contribution from noncontrolling interest | - | - | 148 | - | - | 11,850 | 11,998 | |||||||||||||||||||||
Balance at January 28, 2018 | 68,869 | $ | 689 | $ | 549,328 | $ | 195,288 | $ | 32,128 | $ | 141,014 | $ | 918,447 |
Three Months Ended January 29, 2017 | ||||||||||||||||||||||||||||
Photronics, Inc. Shareholders | ||||||||||||||||||||||||||||
Common Stock | Accumulated | |||||||||||||||||||||||||||
Additional | Other | Non- | ||||||||||||||||||||||||||
Paid-in | Retained | Comprehensive | controlling | Total | ||||||||||||||||||||||||
Shares | Amount | Capital | Earnings | Loss | Interests | Equity | ||||||||||||||||||||||
Balance at October 31, 2016 | 68,080 | $ | 681 | $ | 541,093 | $ | 176,260 | $ | (7,671 | ) | $ | 115,111 | $ | 825,474 | ||||||||||||||
Net income | - | - | - | 1,946 | - | 2,564 | 4,510 | |||||||||||||||||||||
Other comprehensive (loss) income | - | - | - | - | (1,859 | ) | 1,257 | (602 | ) | |||||||||||||||||||
Sale of common stock through employee stock option and purchase plans | 175 | 1 | 1,087 | - | - | - | 1,088 | |||||||||||||||||||||
Restricted stock awards vesting and expense | 78 | 1 | 297 | - | - | - | 298 | |||||||||||||||||||||
Share-based compensation expense | - | - | 640 | - | - | - | 640 | |||||||||||||||||||||
Balance at January 29, 2017 | 68,333 | $ | 683 | $ | 543,117 | $ | 178,206 | $ | (9,530 | ) | $ | 118,932 | $ | 831,408 |
January 29, 2023 | October 31, 2022 | |||||||||||||||||||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Carrying Value | Amortized Cost | Unrealized Gains | Unrealized Losses | Carrying Value | |||||||||||||||||||||||||
Government securities | $ | 39,280 | $ | - | $ | (81 | ) | $ | 39,199 | $ | 38,911 | $ | - | $ | (91 | ) | $ | 38,820 |
January 28, 2018 | October 29, 2017 | January 29, 2023 | October 31, 2022 | |||||||||||||
Raw materials | $ | 51,160 | $ | 49,326 | ||||||||||||
Work in process | 1,593 | 1,408 | ||||||||||||||
Finished goods | 43 | 19 | ||||||||||||||
$ | 52,796 | $ | 50,753 | |||||||||||||
Finished goods | $ | 1,201 | $ | 664 | ||||||||||||
Work in process | 3,753 | 2,957 | ||||||||||||||
Raw materials | 22,043 | 20,082 | ||||||||||||||
$ | 26,997 | $ | 23,703 |
January 29, 2023 | October 31, 2022 | |||||||
Land | $ | 11,971 | $ | 11,134 | ||||
Buildings and improvements | 178,095 | 168,024 | ||||||
Machinery and equipment | 1,909,200 | 1,769,478 | ||||||
Leasehold improvements | 20,144 | 18,802 | ||||||
Furniture, fixtures, and office equipment | 15,526 | 14,355 | ||||||
Construction in progress | 115,190 | 90,846 | ||||||
2,250,126 | 2,072,639 | |||||||
Accumulated depreciation and amortization | (1,539,199 | ) | (1,428,766 | ) | ||||
$ | 710,927 | $ | 643,873 |
January 29, 2023 | October 31, 2022 | |||||||
Machinery and equipment | $ | 42,822 | $ | 42,760 | ||||
Accumulated amortization | (5,491 | ) | (4,784 | ) | ||||
$ | 37,331 | $ | 37,976 |
January 28, 2018 | October 29, 2017 | |||||||
Land | $ | 10,301 | $ | 9,959 | ||||
Buildings and improvements | 128,073 | 125,290 | ||||||
Machinery and equipment | 1,614,502 | 1,547,870 | ||||||
Leasehold improvements | 20,826 | 20,050 | ||||||
Furniture, fixtures and office equipment | 13,474 | 12,989 | ||||||
Construction in progress | 74,987 | 72,045 | ||||||
1,862,163 | 1,788,203 | |||||||
Accumulated depreciation and amortization | (1,313,856) | (1,253,006) | ||||||
$ | 548,307 | $ | 535,197 |
January 28, 2018 | October 29, 2017 | |||||||
Machinery and equipment | $ | 34,917 | $ | 34,917 | ||||
Accumulated amortization | (14,717 | ) | (13,843 | ) | ||||
$ | 20,200 | $ | 21,074 |
Three Months Ended | ||||||||
January 29, 2023 | January 30, 2022 | |||||||
Depreciation Expense | $ | 19,028 | $ | 20,723 |
Three Months Ended | ||||||||
January 29, 2023 | January 30, 2022 | |||||||
Net income from PDMCX | $ | 5,918 | $ | 1,877 |
January 29, 2023 | October 31, 2022 | |||||||||||||||
Classification | Carrying Amount | Photronics Interest | Carrying Amount | Photronics Interest | ||||||||||||
Current assets | $ | 119,928 | $ | 59,976 | $ | 127,542 | $ | 63,784 | ||||||||
Noncurrent assets | 150,365 | 75,198 | 119,392 | 59,708 | ||||||||||||
Total assets | 270,293 | 135,174 | 246,934 | 123,492 | ||||||||||||
Current liabilities | 52,302 | 26,156 | 51,274 | 25,643 | ||||||||||||
Noncurrent liabilities | 5,414 | 2,708 | 9,161 | 4,581 | ||||||||||||
Total liabilities | 57,716 | 28,864 | 60,435 | 30,224 | ||||||||||||
Net assets | $ | 212,577 | $ | 106,310 | $ | 186,499 | $ | 93,268 |
As of January 29, 2023 | Xiamen Project Loans | Finance Leases | Total | |||||||||
Principal due: | ||||||||||||
Next 12 months | $ | - | $ | 6,541 | $ | 6,541 | ||||||
Months 13 – 24 | $ | - | $ | 20,772 | $ | 20,772 | ||||||
Months 25 – 36 | 3,893 | 2,633 | 6,526 | |||||||||
Months 37 – 48 | - | 13 | 13 | |||||||||
Months 49 – 60 | - | 12 | 12 | |||||||||
Long-term debt | 3,893 | 23,430 | 27,323 | |||||||||
Total debt (4) | $ | 3,893 | $ | 29,971 | $ | 33,864 | ||||||
Interest rate at balance sheet date | 4.3 | % | N/A | |||||||||
Basis spread on interest rates | 0.00 | N/A | ||||||||||
Interest rate reset | Quarterly | N/A | ||||||||||
Maturity date | December 2025 | N/A | ||||||||||
Periodic payment amount | Varies as loans mature(1)(3) | Varies as leases mature | ||||||||||
Periodic payment frequency | Semiannual, on individual loans | Monthly | ||||||||||
Loan collateral (carrying amount) | $ | 73,973 | $ | 37,331 | (2) |
(1) | During the three-month period ended January 29, 2023, we repaid 30.0 million RMB (approximately $4.4 million), of which, 6.0 million RMB was due to be paid in June 2025, and 24.0 million RMB was due to be paid in December 2025. |
(2) | Represents the carrying amount at the balance sheet date of the related ROU assets, in which the lessors have secured interests. |
(3) | In February 2023, we repaid the entire outstanding balance of 26.4 million RMB (approximately $3.9 million) shown in the table above. |
(4) | We are in compliance with all of our debt covenants as of January 29, 2023. |
As of October 31, 2022 | Xiamen Project Loans | Xiamen Working Capital Loans | Finance Leases | Total | ||||||||||||
Principal due: | ||||||||||||||||
Next 12 months | $ | - | $ | 3,512 | $ | 6,512 | $ | 10,024 | ||||||||
Months 13 – 24 | $ | - | $ | - | $ | 6,610 | $ | 6,610 | ||||||||
Months 25 – 36 | 1,098 | - | 17,961 | 19,059 | ||||||||||||
Months 37 – 48 | 6,641 | - | - | 6,641 | ||||||||||||
Long-term debt | $ | 7,739 | $ | - | $ | 24,571 | $ | 32,310 | ||||||||
Interest rate at balance sheet date | 4.30% - 4.45 | % | 4.46 | % | N/A | |||||||||||
Basis spread on interest rates | 0.00 | 76 | N/A | |||||||||||||
Interest rate reset | Quarterly | Monthly/Annually | N/A | |||||||||||||
Maturity date | December 2025 | July 2023 | N/A | |||||||||||||
Periodic payment amount | Varies as loans mature (1) | Increases as loans mature | Varies as leases mature | |||||||||||||
Periodic payment frequency | Semiannual, on individual loans | Semiannual, on individual loans | Monthly | |||||||||||||
Loan collateral (carrying amount) | $ | 70,705 | N/A | $ | 37,976 | (2) |
(1) | During the three-month period ended October 31, 2022, we repaid 81.0 million RMB (approximately $11.5 million) that had contractual maturity dates ranging from December 2023 through June 2025. |
(2) | Represents the carrying amount at the balance sheet date of the related ROU assets, in which the lessors have secured interests. |
Classification | Carrying Amount | Photronics Interest | ||||||
Current assets | $ | 13,864 | $ | 6,933 | ||||
Non-current assets | 12,403 | 6,203 | ||||||
Total assets | 26,267 | 13,136 | ||||||
Current liabilities | 3,038 | 1,519 | ||||||
Non-current liabilities | 16 | 8 | ||||||
Total liabilities | 3,054 | 1,527 | ||||||
Net assets | $ | 23,213 | $ | 11,609 |
January 28, 2018 | October 29, 2017 | |||||||
3.25% convertible senior notes due in April 2019 | $ | 57,366 | $ | 57,337 | ||||
2.77% capital lease obligation payable through July 2018 | 3,259 | 4,639 | ||||||
60,625 | 61,976 | |||||||
Current portion | (3,259 | ) | (4,639 | ) | ||||
$ | 57,366 | $ | 57,337 |
Classification | January 29, 2023 | October 31, 2022 | ||||||
Contract Assets | ||||||||
Other current assets | $ | 19,414 | $ | 15,752 | ||||
Contract Liabilities | ||||||||
Accrued liabilities | $ | 18,805 | $ | 18,872 | ||||
Other liabilities | 6,786 | 4,989 | ||||||
$ | 25,591 | $ | 23,861 |
Three Months Ended | ||||||||
| January 29, 2023 | January 30, 2022 | ||||||
Revenue recognized from beginning liability | $ | 7,638 | $ | 4,242 |
Three Months Ended | ||||||||
January 29, 2023 | January 30, 2022 | |||||||
Revenue by Product Type | ||||||||
IC | ||||||||
High-end | $ | 48,003 | $ | 46,534 | ||||
Mainstream | 108,586 | 83,227 | ||||||
Total IC | $ | 156,589 | $ | 129,761 | ||||
FPD | ||||||||
High-end | $ | 45,691 | $ | 46,276 | ||||
Mainstream | 8,810 | 13,790 | ||||||
Total FPD | $ | 54,501 | $ | 60,066 | ||||
$ | 211,090 | $ | 189,827 |
Three Months Ended | ||||||||
January 29, 2023 | January 30, 2022 | |||||||
Revenue by Geographic Origin* | ||||||||
Taiwan | $ | 75,569 | $ | 67,841 | ||||
China | 58,932 | 45,953 | ||||||
Korea | 37,832 | 39,515 | ||||||
United States | 29,881 | 27,176 | ||||||
Europe | 8,447 | 8,914 | ||||||
Other | 429 | 428 | ||||||
$ | 211,090 | $ | 189,827 |
Three Months Ended | ||||||||
Revenue by Timing of Recognition | January 29, 2023 | January 30, 2022 | ||||||
Over time | $ | 197,164 | $ | 170,264 | ||||
At a point in time | 13,926 | 19,563 | ||||||
$ | 211,090 | $ | 189,827 |
Three Months Ended | ||||||||
January 29, 2023 | January 30, 2022 | |||||||
Expense reported in: | ||||||||
Cost of goods sold | $ | 281 | $ | 143 | ||||
Selling, general, and administrative | 1,378 | 1,180 | ||||||
Research and development | 162 | 134 | ||||||
Total expense incurred | $ | 1,821 | $ | 1,457 | ||||
Expense by award type: | ||||||||
Restricted stock awards | $ | 1,764 | $ | 1,367 | ||||
Stock options | 1 | 38 | ||||||
Employee stock purchase plan | 56 | 52 | ||||||
Total expense incurred | $ | 1,821 | $ | 1,457 | ||||
Income tax benefits of share-based compensation | $ | 155 | $ | 84 | ||||
Share-based compensation cost capitalized | $ | - | $ | - |
Three Months Ended | ||||||||
January 29, 2023 | January 30, 2022 | |||||||
Number of shares granted in period | 786,500 | 535,400 | ||||||
Weighted-average grant-date fair value of awards (in dollars per share) | $ | 16.77 | $ | 19.28 | ||||
Compensation cost not yet recognized | $ | 18,526 | $ | 15,106 | ||||
Weighted-average amortization period for cost not yet recognized (in years) | 3.2 | 3.0 | ||||||
Shares outstanding at balance sheet date | 1,374,422 | 1,128,179 |
Three Months Ended | ||||||||
January 28, 2018 | January 29, 2017 | |||||||
Volatility | 31.6% | 32.2% | ||||||
Risk free rate of return | 2.2% | 1.9% | ||||||
Dividend yield | 0.0% | 0.0% | ||||||
Expected term | 5.0 years | 5.0 years |
Three Months Ended | ||||||||
January 29, 2023 | January 30, 2022 | |||||||
Number of options granted in period | - | - | ||||||
Cash received from option exercised | $ | 563 | $ | 3,714 | ||||
Compensation cost not yet recognized | $ | - | $ | 71 | ||||
Weighted-average amortization period for cost not yet recognized (in years) | - | 1.0 |
Options | Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life | Aggregate Intrinsic Value | |||||||||
Outstanding at January 28, 2018 | 3,304,820 | $ | 7.98 | 5.1 years | $ | 4,468 | |||||||
Exercisable at January 28, 2018 | 2,421,655 | $ | 7.19 | 3.8 years | $ | 4,441 |
Options | Shares | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Life (in years) | Aggregate Intrinsic Value | ||||||||||||
Outstanding and exercisable at January 29, 2023 | 528,551 | $ | 10.11 | 3.28 | $ | 4,605 |
Reporting Period | U.S. Statutory Tax Rates | Photronics Effective Tax Rates | Primary Reasons for Differences | ||||
Three months ended January 29, 2023 | 21.0% | 30.3% | Non-recognition of the tax benefit of losses that, in certain jurisdictions, have been offset by valuation allowances; non-U.S. pre-tax income being taxed at higher statutory rates in non-U.S. jurisdictions; and the establishment of uncertain tax positions in non-U.S. jurisdictions. | ||||
Three months ended January 30, 2022 | 21.0% | 26.1% | Non-recognition of the tax benefit of losses that, in certain jurisdictions, have been offset by valuation allowances; non-U.S. pre-tax income being taxed at higher statutory rates in non-U.S. jurisdictions; and the establishment of uncertain tax positions in non-U.S. jurisdictions. |
January 29, 2023 | October 31, 2022 | |||||||
Unrecognized tax benefits related to uncertain tax positions | $ | 6,318 | $ | 5,599 | ||||
Unrecognized tax benefits that, if recognized, would impact the effective tax rate | $ | 6,318 | $ | 5,599 | ||||
Accrued interest and penalties related to uncertain tax positions | $ | 467 | $ | 395 |
Three Months Ended | Three Months Ended | |||||||||||||||
January 28, 2018 | January 29, 2017 | January 29, 2023 | January 30, 2022 | |||||||||||||
Net income attributable to Photronics, Inc. shareholders | $ | 5,898 | $ | 1,946 | $ | 13,986 | $ | 23,064 | ||||||||
Effect of dilutive securities | - | - | - | - | ||||||||||||
Earnings used for diluted earnings per share | $ | 5,898 | $ | 1,946 | $ | 13,986 | $ | 23,064 | ||||||||
Weighted-average common shares computations: | ||||||||||||||||
Weighted-average common shares used for basic earnings per share | 68,755 | 68,176 | 60,894 | 60,158 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Share-based payment awards | 617 | 993 | 576 | 778 | ||||||||||||
Potentially dilutive common shares | 617 | 993 | 576 | 778 | ||||||||||||
Weighted-average common shares used for diluted earnings per share | 69,372 | 69,169 | 61,470 | 60,936 | ||||||||||||
Basic earnings per share | $ | 0.09 | $ | 0.03 | $ | 0.23 | $ | 0.38 | ||||||||
Diluted earnings per share | $ | 0.09 | $ | 0.03 | $ | 0.23 | $ | 0.38 |
Three Months Ended | ||||||||
January 29, 2023 | January 30, 2022 | |||||||
Share-based payment awards | 268 | 165 | ||||||
Total potentially dilutive shares excluded | 268 | 165 |
Three Months Ended | ||||||||
January 28, 2018 | January 29, 2017 | |||||||
Convertible notes | 5,542 | - | ||||||
Share-based payment awards | 1,583 | 993 | ||||||
Total potentially dilutive shares excluded | 7,125 | 993 |
Three Months Ended January 28, 2018 | ||||||||||||||||
Foreign Currency Translation Adjustments | Amortization of Cash Flow Hedge | Other | Total | |||||||||||||
Balance at October 30, 2017 | $ | 7,627 | $ | (48 | ) | $ | (688 | ) | $ | 6,891 | ||||||
Other comprehensive income (loss) before reclassifications | 30,087 | - | (32 | ) | 30,055 | |||||||||||
Amounts reclassified from other comprehensive income | - | 32 | - | 32 | ||||||||||||
Net current period other comprehensive income (loss) | 30,087 | 32 | (32 | ) | 30,087 | |||||||||||
Less: other comprehensive (income)loss attributable to noncontrolling interests | (4,866 | ) | - | 16 | (4,850 | ) | ||||||||||
Balance at January 28, 2018 | $ | 32,848 | $ | (16 | ) | $ | (704 | ) | $ | 32,128 |
Three Months Ended January 29, 2023 | ||||||||||||
Foreign Currency Translation Adjustments | Other | Total | ||||||||||
Balance at October 31, 2022 | $ | (97,790 | ) | $ | (666 | ) | $ | (98,456 | ) | |||
Other comprehensive (loss) income | 90,519 | (54 | ) | 90,465 | ||||||||
Less: Other comprehensive loss (income) attributable to noncontrolling interests | 16,466 | (37 | ) | 16,429 | ||||||||
Balance at January 29, 2023 | $ | (23,737 | ) | $ | (683 | ) | $ | (24,420 | ) |
Three Months Ended January 29, 2017 | ||||||||||||||||
Foreign Currency Translation Adjustments | Amortization of Cash Flow Hedge | Other | Total | |||||||||||||
Balance at October 31, 2016 | $ | (6,567 | ) | $ | (177 | ) | $ | (927 | ) | $ | (7,671 | ) | ||||
Other comprehensive income (loss) before reclassifications | (614 | ) | - | (20 | ) | (634 | ) | |||||||||
Amounts reclassified from other comprehensive income | - | 32 | - | 32 | ||||||||||||
Net current period other comprehensive income (loss) | (614 | ) | 32 | (20 | ) | (602 | ) | |||||||||
Less: other comprehensive (income)loss attributable to noncontrolling interests | (1,267 | ) | - | 10 | (1,257 | ) | ||||||||||
Balance at January 29, 2017 | $ | (8,448 | ) | $ | (145 | ) | $ | (937 | ) | $ | (9,530 | ) |
Three Months Ended January 30, 2022 | ||||||||||||
Foreign Currency Translation Adjustments | Other | Total | ||||||||||
Balance at October 31, 2021 | $ | 21,476 | $ | (905 | ) | $ | 20,571 | |||||
Other comprehensive (loss) income | (9,831 | ) | 37 | (9,794 | ) | |||||||
Less: Other comprehensive loss (income) attributable to noncontrolling interests | 194 | 18 | 212 | |||||||||
Balance at January 30, 2022 | $ | 11,451 | $ | (886 | ) | $ | 10,565 |
January 28, 2018 | October 29, 2017 | |||||||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | |||||||||||||
3.25% convertible senior notes due 2019 | $ | 64,486 | $ | 57,366 | $ | 67,396 | $ | 57,337 |
Three Months Ended | ||||||||
January 29, 2023 | January 30, 2022 | |||||||
Number of shares repurchased | - | 188 | ||||||
Cost of shares repurchased | $ | - | $ | 2,522 | ||||
Average price paid per share | $ | - | $ | 13.43 |
Three Months Ended | Three Months Ended | |||||||||||||||||||||||
January 28, 2018 | October 29, 2017 | January 29, 2017 | January 29, | October 31, | January 30, | |||||||||||||||||||
2023 | 2022 | 2022 | ||||||||||||||||||||||
Revenue | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||
Cost of goods sold | (77.6 | ) | (78.1 | ) | (79.1 | ) | 64.0 | 61.8 | 68.5 | |||||||||||||||
Gross profit | 36.0 | 38.2 | 31.5 | |||||||||||||||||||||
Gross profit | 22.4 | 21.9 | 20.9 | |||||||||||||||||||||
Selling, general and administrative expenses | (9.5 | ) | (8.4 | ) | (9.9 | ) | ||||||||||||||||||
Research and development expenses | (3.3 | ) | (3.2 | ) | (3.1 | ) | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Selling, general, and administrative | 8.0 | 7.5 | 8.3 | |||||||||||||||||||||
Research and development | 1.6 | 1.9 | 3.1 | |||||||||||||||||||||
Operating income | 26.5 | 28.8 | 20.1 | |||||||||||||||||||||
Operating income | 9.6 | 10.3 | 7.9 | |||||||||||||||||||||
Other income (expense), net | (3.4 | ) | 0.4 | (1.9 | ) | |||||||||||||||||||
Non-operating income (expense), net | (6.8 | ) | 5.1 | 2.5 | ||||||||||||||||||||
Income before income taxes | 6.2 | 10.7 | 6.0 | |||||||||||||||||||||
Income tax benefit (provision) | 1.5 | (2.0 | ) | (1.9 | ) | |||||||||||||||||||
Income before income tax provision | 19.7 | 33.9 | 22.6 | |||||||||||||||||||||
Income tax provision | 6.0 | 7.6 | 5.9 | |||||||||||||||||||||
Net income | 7.7 | 8.7 | 4.1 | 13.7 | 26.3 | 16.7 | ||||||||||||||||||
Net income attributable to noncontrolling interests | (2.9 | ) | (4.2 | ) | (2.3 | ) | 7.1 | 8.7 | 4.6 | |||||||||||||||
Net income attributable to Photronics, Inc. shareholders | 4.8 | % | 4.5 | % | 1.8 | % | 6.6 | % | 17.6 | % | 12.2 | % |
Q1 FY18 FROM Q4 FY17 | Q1 FY18 FROM Q1 FY17 | |||||||||||||||||||||||
Revenue in Q1 FY18 | Percent Change | Increase (Decrease) | Revenue in Q1 FY18 | Percent Change | Increase (Decrease) | |||||||||||||||||||
IC | ||||||||||||||||||||||||
High-end | $ | 33.4 | 9.6 | % | $ | 2.9 | $ | 33.4 | 50.6 | % | $ | 11.2 | ||||||||||||
Mainstream | 62.3 | (5.0 | %) | (3.3 | ) | 62.3 | (3.0 | %) | (1.9 | ) | ||||||||||||||
Total | $ | 95.7 | (0.4 | %) | $ | (0.4 | ) | $ | 95.7 | 10.7 | % | $ | 9.3 | |||||||||||
FPD | ||||||||||||||||||||||||
High-end | $ | 18.7 | 9.6 | % | $ | 1.7 | $ | 18.7 | 8.9 | % | $ | 1.5 | ||||||||||||
Mainstream | 9.0 | 15.4 | % | 1.2 | 9.0 | 45.3 | % | 2.8 | ||||||||||||||||
Total | $ | 27.7 | 11.4 | % | $ | 2.9 | $ | 27.7 | 18.5 | % | $ | 4.3 | ||||||||||||
Total Revenue | $ | 123.4 | 2.0 | % | $ | 2.5 | $ | 123.4 | 12.4 | % | $ | 13.6 |
Q1 FY23 compared with Q4 FY22 | Q1 FY23 compared with Q1 FY22 | |||||||||||||||||||
Revenue in | Increase | Percent | Increase | Percent | ||||||||||||||||
Q1 FY23 | (Decrease) | Change | (Decrease) | Change | ||||||||||||||||
IC | ||||||||||||||||||||
High-end * | $ | 48.0 | $ | 3.6 | 8.2 | % | $ | 1.1 | 2.3 | % | ||||||||||
Mainstream | 108.6 | (3.3 | ) | (2.9 | )% | 25.7 | 31.1 | % | ||||||||||||
Total IC | $ | 156.6 | $ | 0.3 | 0.2 | % | $ | 26.8 | 20.7 | % | ||||||||||
FPD | ||||||||||||||||||||
High-end * | $ | 45.7 | $ | 2.3 | 5.3 | % | $ | (0.6 | ) | (1.3 | )% | |||||||||
Mainstream | 8.8 | (1.8 | ) | (17.2 | )% | (5.0 | ) | (36.1 | )% | |||||||||||
Total FPD | $ | 54.5 | $ | 0.5 | 0.8 | % | $ | (5.6 | ) | (9.3 | )% | |||||||||
Total Revenue | $ | 211.1 | $ | 0.8 | 0.4 | % | $ | 21.2 | 11.2 | % |
Q1 FY23 compared with Q4 FY22 | Q1 FY23 compared with Q1 FY22 | |||||||||||||||||||
Revenue in | Increase | Percent | Increase | Percent | ||||||||||||||||
Q1 FY23 | (Decrease) | Change | (Decrease) | Change | ||||||||||||||||
Taiwan | $ | 75.6 | $ | (0.7 | ) | (0.9 | )% | $ | 7.7 | 11.4 | % | |||||||||
China | 58.9 | 6.5 | 12.4 | % | 13.0 | 28.2 | % | |||||||||||||
Korea | 37.8 | (0.2 | ) | (0.3 | )% | (1.7 | ) | (4.3 | )% | |||||||||||
United States | 29.9 | (4.1 | ) | (12.1 | )% | 2.7 | 10.0 | % | ||||||||||||
Europe | 8.4 | (0.6 | ) | (6.7 | )% | (0.5 | ) | (5.2 | )% | |||||||||||
Other | 0.5 | (0.1 | ) | (21.4 | )% | - | 0.2 | % | ||||||||||||
$ | 211.1 | $ | 0.8 | 0.4 | % | $ | 21.2 | 11.2 | % |
Q1 FY18 FROM Q4 FY17 | Q1 FY18 FROM Q1 FY17 | |||||||||||||||||||||||
Revenue in Q1 FY18 | Percent Change | Increase (Decrease) | Revenue in Q1 FY18 | Percent Change | Increase (Decrease) | |||||||||||||||||||
Taiwan | $ | 56.5 | 2.7 | % | $ | 1.5 | $ | 56.5 | 21.6 | % | $ | 10.0 | ||||||||||||
Korea | 33.0 | 14.0 | % | 4.0 | 33.0 | 8.9 | % | 2.7 | ||||||||||||||||
United States | 25.0 | (5.5 | )% | (1.5 | ) | 25.0 | 5.9 | % | 1.4 | |||||||||||||||
Europe | 8.5 | (12.8 | )% | (1.2 | ) | 8.5 | (2.8 | )% | (0.2 | ) | ||||||||||||||
Other | 0.4 | (48.7 | )% | (0.4 | ) | 0.4 | (44.8 | )% | (0.3 | ) | ||||||||||||||
$ | 123.4 | 2.0 | % | $ | 2.4 | $ | 123.4 | 12.4 | % | $ | 13.6 |
Three Months Ended | ||||||||||||||||||||||||||||||||||||||||
Q1 FY18 | Q4 FY17 | Percent Change | Q1 FY17 | Percent Change | Percent | Percent | ||||||||||||||||||||||||||||||||||
Q1 FY23 | Q4 FY22 | Change | Q1 FY22 | Change | ||||||||||||||||||||||||||||||||||||
Gross profit | $ | 27.7 | $ | 26.4 | 4.6 | % | $ | 23.0 | 20.3 | % | $ | 76.1 | $ | 80.3 | (5.2 | )% | $ | 59.9 | 27.1 | % | ||||||||||||||||||||
Gross margin | 22.4 | % | 21.9 | % | 20.9 | % | 36.0 | % | 38.2 | % | 31.5 | % |
Q1 FY23 | Q4 FY22 | Q1 FY22 | ||||||||||
Foreign currency transactions impact, net | $ | (16.9 | ) | $ | 10.4 | $ | 5.3 | |||||
Interest expense, net | (0.1 | ) | (0.4 | ) | (0.9 | ) | ||||||
Interest income and other income (expense), net | 2.6 | 0.8 | 0.3 | |||||||||
Non-operating income (expense), net | (14.4 | ) | 10.8 | 4.7 |
Three Months Ended | ||||||||||||
Q1 FY18 | Q4 FY17 | Q1 FY17 | ||||||||||
Interest income and other income (expense), net | $ | (3.5 | ) | $ | 1.1 | $ | (1.5 | ) | ||||
Interest expense | (0.6 | ) | (0.6 | ) | (0.6 | ) | ||||||
Other income (expense), net | $ | (4.1 | ) | $ | 0.5 | $ | (2.1 | ) |
Three Months Ended | Q1 FY23 | Q4 FY22 | Q1 FY22 | |||||||||||||||||||||
Q1 FY18 | Q4 FY17 | Q1 FY17 | ||||||||||||||||||||||
Income tax benefit (provision) | $ | 1.8 | $ | (2.5 | ) | $ | (2.1 | ) | ||||||||||||||||
Income tax provision | $ | 12.6 | $ | 16.1 | $ | 11.2 | ||||||||||||||||||
Effective income tax rate | (23.1 | )% | 19.0 | % | 31.3 | % | 30.3 | % | 22.5 | % | 26.1 | % |
Q1 FY23 | Q1 FY22 | |||||||
Net cash provided by operating activities | $ | 27.7 | $ | 59.1 | ||||
Net cash used in investing activities | $ | (30.2 | ) | $ | (19.2 | ) | ||
Net cash used in financing activities | $ | (9.7 | ) | $ | (0.3 | ) |
Q1 FY23 | Q4 FY22 | Q1 FY22 | ||||||||||
Reconciliation of GAAP to Non-GAAP Net Income: | ||||||||||||
GAAP Net Income attributable to Photronics, Inc. shareholders | $ | 14.0 | $ | 37.1 | $ | 23.1 | ||||||
FX (gain) loss | 16.9 | (10.4 | ) | (5.3 | ) | |||||||
Estimated tax effects of above | (4.5 | ) | 2.5 | 1.3 | ||||||||
Estimated noncontrolling interest effects of above | (2.1 | ) | 2.0 | 0.1 | ||||||||
Non-GAAP Net Income attributable to Photronics, Inc. shareholders | $ | 24.4 | $ | 31.2 | $ | 19.2 | ||||||
Weighted-average number of common shares outstanding - Diluted | 61,470 | 61,374 | 60,936 | |||||||||
Reconciliation of GAAP to Non-GAAP EPS: | ||||||||||||
GAAP diluted earnings per share | $ | 0.23 | $ | 0.60 | $ | 0.38 | ||||||
Effects of the above adjustments | $ | 0.17 | $ | (0.10 | ) | $ | (0.06 | ) | ||||
Non-GAAP diluted earnings per share | $ | 0.40 | $ | 0.51 | $ | 0.32 |
Q1 FY23 | Q1 FY22 | |||||||
Free Cash Flow | ||||||||
Net cash provided by operating activities | $ | 27.7 | $ | 59.1 | ||||
Purchases of property, plant, and equipment | (31.1 | ) | (19.2 | ) | ||||
Government incentives | 1.0 | - | ||||||
Free cash flow | $ | (2.4 | ) | $ | 39.9 |
Q1 FY23 | Q1 FY22 | |||||||
LTM Free Cash Flow | ||||||||
First three months of the respective fiscal year | $ | (2.4 | ) | $ | 40.0 | |||
Prior fiscal year | 166.5 | 47.4 | ||||||
First three months of the prior year | (40.0 | ) | (9.2 | ) | ||||
LTM free cash flow | $ | 124.1 | $ | 78.2 |
As of | ||||||||
January 29, | October 31, | |||||||
2023 | 2022 | |||||||
Net Cash | ||||||||
Cash and cash equivalents | $ | 334.8 | $ | 319.7 | ||||
Short-term investments | 39.2 | 38.9 | ||||||
Current portion of Long-term debt | (6.5 | ) | (10.0 | ) | ||||
Long-term debt | (27.3 | ) | (32.3 | ) | ||||
Net cash | $ | 340.2 | $ | 316.2 |
Item 1. | LEGAL PROCEEDINGS |
Item 1A. | RISK FACTORS |
Item 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Total Number of Shares Purchased | Average Price Paid Per share | Total Number of Shares Purchased as Part of Publicly Announced Program | Dollar Value of Shares That May Yet Be Purchased (in millions) | |||||||||||||
November 1, 2022 – November 27, 2022 | 0 | $ | 0.00 | 0 | $ | 31.7 | ||||||||||
November 28, 2022 – December 25, 2022 | 0 | $ | 0.00 | 0 | $ | 31.7 | ||||||||||
December 26, 2022 – January 29, 2023 | 69,587 | $ | 16.79 | 0 | $ | 31.7 | ||||||||||
Total | 69,587 | 0 |
EXHIBITS |
Incorporated by Reference | |||||||
Exhibit Number | Description | Form | File | Exhibit | Filing Date | Filed or Furnished Herewith | |
Form Restricted Stock Award Agreement | X | ||||||
Form Incentive Stock Option Award Agreement | X | ||||||
Form Non-Qualified Stock Award Agreement | X | ||||||
Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the the Sarbanes-Oxley Act of 2002. | X | ||||||
Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the the Sarbanes-Oxley Act of 2002. | X | ||||||
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | X | ||||||
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | X | ||||||
101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | X | |||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | X | |||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | |||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | |||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X | |||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | |||||
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | X |
Photronics, Inc. | |||||
(Registrant) | |||||
By: | /s/ JOHN P. JORDAN | By: | /s/ ERIC RIVERA | ||
JOHN P. JORDAN | ERIC RIVERA | ||||
Vice President, | |||||
Chief Financial Officer | |||||
(Principal Financial Officer) | (Principal Accounting Officer) | ||||
Date: March 9, 2023 | Date: March 9, 2023 |