PLAB - Earnings call 1 2024 | Photronics, Inc.

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Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to Photronics First Quarter Fiscal 2021 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded today, Wednesday, February 21, 2024. I would now like to turn the conference over to Richelle Burr, Chief Administrative Officer. ahead. go Please

Richelle Burr

Good Photronics Lilian. Welcome our to Thank XXXX morning, First of fiscal Quarter review you, everyone. Results.

Investor our available Technology Joining the accompany me Officer; John Eric Chief Executive press Chief Controller. with Accounting we our Lee, web our on Officer; Officer remarks Relations by Jordan, participants other or statements Rivera, our based any Officer; and believe, are today's words our this obligation morning together section Chris issued implied, that predict. that to are Progler, earlier factors presentation Frank expressed morning, information. Chief the view. material and any Financial may estimate, of on are no to The Corporate include anticipate, update made statements and Chief call release forward-looking our this upon may are materially difficult a our forward-looking as from results in those These and and Actual include number expect, of forward-looking differ assume and forecast, we uncertainties such risks, page. Comments

GAAP reconciliation provided of I these the At will to refer financial over non-GAAP Frank. evaluate certain call and are to we performance. time, analysts, These discussion, in numbers ongoing our A During presentation to metrics. useful to management is will metrics for our financial this course results investors of materials. turn the

KangJyh Lee

the ] down morning, in seasonal offset IC sectors. quarter, and and We year operation sales with the expected first the due revenue were us were gross increasing over improve by achieved good quarter quarter. both last demand Richelle, everyone. weaker Earnings quarter, confidence giving second increase days growth quarter. X softer mainstream leverage trends of during in the that our FPD as IC Compared and first both and than Thank with Demand higher to fourth [ being year soft you, the and sales FPD. Demand sales run and fewer margins. and revenue during improved improved the growth compared with rate high-end we for both last partially will month drove was in

[indiscernible] to margin our were with sales and margins quarter-over-quarter fall. deliver even Our fourth Once team gross lower with solid has expenses control quarter. compared comparison, again, to done cost

to The our share basis on first growth quarter $X.XX quarter $X.XX the were mass Operation flow plans. a us comments a overall improved share per like demand balance from now GAAP non-GAAP support to earnings on of some and and allowing sheet our on further I offer last cash market strengthen first -- to the year, per environment. basis. will market

earlier, for stated both start was I FPD. the quarter soft first As of at and IC demand mass

orders improved X. on in the quarter see which ahead Demand including through we Year, February New started spike Chinese of UUS

the saw holiday break, What following we improve type for QX. trends early Asia we While do industry the to still high-end XX businesses. expect see, is nanometers growing I as move driving a Chinese performance. to to XX memory, in is a from The to demand we no demand. prior New in customer In out and in trend our Year migration seeing demand in recovery continue seeing trend they are

demand Tier seeing is well. applications. are X now trends typically They providers with exposure memory high-value encouraging Our as

outlook industry display For soft. as our our remains business overall even everyday, go our got

futures quarter SK second have display and makers relationships presence achieve greater help are large and in our their for With and the advantage momentum the As have as our keeps second benefits continually high-quality panel displays, to share. of we provide demand This [indiscernible] them expect a advanced competitive goal. the mask revenue during market futures great innovating technology spread -- with for grow can in new leader us with new a we quarter. first more panel-maker gain that a new AMOLED premium strong are the as [indiscernible] market have mask. The smartphone high we to half to

As next increase and about strong to increase the to investments. I'm presence year, flow the cash will of growth, phase our fiscal to second continue the transition position to controlling of to expecting and an rest believe photomask leading demand margins global happens, perform our focused We to industry during growth will support in relations costs third on increasing us we this the optimistic quarters. remain technology, to well. should customer semiconductor

time, his an public during John, call Before since great to retirement. XXXX wish the member through especially John behalf helped I Photonics been entire Jan joining time Jan retirement. to us partner the On me floor our yours. He CEO. to on entire upcoming geographic the has as tremendous been expansion. over I my him team in of in growth over review of and well is and organization, a congratulations important to would like turning has QX results, executive

John Jordan

for Frank, more you, my projects. forward to kind and spending those am Thank with favorite I some words. retirement time and family looking

staff well-defined and Photronics and well investment help staff. The the a to Controller, execution will our assume both leaving, I and the a believe their we case, organization. I'm strategy position. role success. their Treasurer in met will have targeted CFOs challenging success. and demanding an consistent leadership role of who of excellent team finance is cohesiveness confident our the Eric, the in our The challenge support CFO any the of as Board In company's CFO Although strong that continued that commitment and and I'm Corporate international company as ensure interim of and our and with is supportive

million was than last $XXX.X X% Now first results. Revenue X% less quarter. quarter up year-over-year turning to and

slowly but momentum mentioned, recover. gained to quarter market end Frank began our seem As first demand as

combining seasonally all for quarter, quarter X Slower The decrease. seasonal demand the and of first decrease quarter fiscal first sequential quarter the exacerbated fewer is year. the the there typically the in at slowest than beginning our the days were previous

demand to technology demand lower gives revenue quarter-over-quarter, higher resulting in were support share, an alluded led and year-over-year by related the the strong to than effect revenue our lower AMOLED high customers' increase QX's as the the products to to customers' resulting in decline to sequentially. nodes. The than slightly consistent investments and our QX Asia, higher and XX.X%, growth maps in mobile QX income Gross compared operating income last displays income applications, somewhat million working from regionalization. generated to in slightly $XX.X logic high-end flow, lower $XXX.X higher year FPD margin both expense. lower the and seasonal last was operating Mainstream market cash was to mainstream strong continue stronger $X.XX as to to Net softness directions. Operating and for start First to drivers it compensation primarily capacity was revenue in with was per revenue million, related demand outgrow The level. $X.XX improved technology U.S. long-term before. we quarter Adjusted earnings. We leader, million which they on support improvement margin X% makers softness. The the confidence revenue migration attributable in diluted the improved panel diluted we expenses release foundry year high-end last innovative Asia higher quarter was was and expand changes or and an IC ability us revenue High-end XX% part in remain in in effective We was per road up management. employee lower year-over-year X% of was in down market as more loss, this to leverage very used $XX.X advanced operating and due gain FPD $XX.X or intact High-end million increase revenue remain the from supply due year-over-year X% to year share. $XX.X quarter chain from although normal was sequentially on of X% higher net net in for million record capital XX.X%. share. nonoperating FPD slow with the

growth CapEx were Our million investments quarter. for the in $XX.X

of high-end million, million, million debt mainstream with fund will liquidity growth. investments investments in both providing to organic IC primarily in quarter CapEx demand. We address and of balance at for of ended $XX us to Our the cash and guidance ample $XXX.X anticipated million the $XX.X with a year $XXX short-term remain

backlog Before I'll remind guidance, typically for demand I only our that and to difficult weeks provide uneven is is predict. X you X our as inherently to our products is always and of limited visibility some

segment Additionally, high. impact as of the mask sets And high-end low quarterly a this business a significant orders can grows, number for earnings. revenue and have on of relatively the our ASPs high-end are

first across $XXX of quarter million. second by those revenue quarter Given solid the our million built during continue that demand we the the to drivers QX expect $XXX into believe markets. momentum long-term We to driven range be will caveats, in

percentage slow we environment Based estimate diluted And current into pricing the by the After per earnings the XXs on gross has around demand $X.XX quarter. Our the QX, range in start share our and to the second in of XX% midpoint gross high revenue stabilized margin QX. those -- to margin better expectations level. anticipate range at than guidance mid-XXs we for our margin the somewhat we're quarter second per non-GAAP to a be encouraged the strengthening the and operating model, share. during $X.XX of for to year, quarter mid- in

sequential with the in your performance these the our of over second improvement continued team questions. through quarter continuation the provide the call growth will operator anticipate XXXX. along of We the and to to trends, turn now I for global

Operator

Instructions] [Operator

coming D.A. Tom question from a the with Diffely of Now line Davidson.

Thomas Diffely

mainstream seasonality, you mainstream, just little with of And pricing, just if how your First here working guess you focused wish terms playing you, the you of then hopefully a I been just a of of I the could. ask to in about on like I'd and supply-demand, out health bit back and up John, see pleasure and on kind that business all, the it's well retirement.

KangJyh Lee

and the Yes. are low, market in market. pricing, Taiwan In they mainstream in there the -- into the sector, newcomers some season still of especially mainstream. terms And China some are in the

compensation However, outside we of in don't and this see China impact the mainstream new area business Taiwan. in

on are some the pricing, area. the China impact pressure -- there in So mainstream great

business XX-nanometer. our migrating XX been -- to has However, main and XX

So the in business bigger operation portion. Asia portion not our mainstream a of are in

has in in mix mentoring increase of terms the price branded product overall ASP. So offset pressure

Thomas Diffely

Okay.

nice kind have or the nice few a are because then years, Or ramp-up look or you? And At the the quarters, we a few you in And had it feels a nice first pricing? are stable March history the last when you look the had the margins this then in got in it when pricing there seemed is So of kind in you saturated. the like if from over back the stable you like industry, supply it little going demand? mainstream at in kind margins. constraints of mainstream at pricing, for where pretty we area the decline a seasonal next yearly of feels to point,

KangJyh Lee

XXXX pricing I the 'XX. mentioned went up in and Actually,

So price mention, mainstream especially of before. has even stabilized, little we XX-nanometer in adjust adjust right area moment, to are this market not the growing. are the however, now, still pricing they are the in But much trying because we at high higher the end than been the and bit price a of

So lot our need of adjust mainstream. have price to our capacity. And consumed that no a further we in

pricing forward, keep mainstream going So stable. will our we

course, charge disappear. moment this at Of the premium

mentioned, the product mix. ASP, which I we as However, on the basically on depending branded focusing are

Thomas Diffely

sounds Okay. good. It's No, it encouraging.

that about you how some or Moving still seeing what your flat in Is you? OLED for advance. helped GXX.X strength that I'm range? over to talked the fairly and the light fairly you soft curious, business, are panel

KangJyh Lee

more very remain on focusing very, low. Most are and still light. GXX.X product total It's of the cap very customers

in terms GXX.X. on profit are -- overall, So beneficial if production is output product and of instead actually, margin we and AMOLED more the focusing of

Thomas Diffely

was I impacts Okay. many look on displays, LEDs as the as if did have -- at question market? how but you And I'm not a Great. Prag for start photomask that to micro Chris the line, -- sure panel the flat

Christopher Progler

the those the photomask let many There's advanced layer, a that's many impact the except on or more a or for those level. LEDs LEDs so take transistor transistor TFTs the switching advantage market say, in big backlight. sophisticated you just of Let's more not

photomask advanced at although it's thanks sophisticated LEDs not many to really many formation intensive. the is layer, of LEDs So driving, a and I think, more the switching

to to products control integrate photomask it to started be few than in relatively prototype to harder that steps. little or off seeing actually, microLEDs, fairly those of requirements For phase, build production relatively patterning we're proving of a a technology is and to initially micro What They're simple patterning be in a those dense most LEDs. are set early anticipated.

means positive LED applications think a I if it's tremendous drives for displays, by a making. display any it on as think especially a for be a trend micro photomask, I trend game-changer good not should it's for more So viewed trend, but the side mask driver, or positive

Thomas Diffely

I line, regular been And for right. part any call business But any space on on curious on at have EUV? update what you and All activity with all going know that since if consortiums. you you've you? there's of in the we some that's I

Christopher Progler

Yes.

and So I think pilot masks toes base are dip like work expanded and to There their 'XX in a EUV EUV starting in couple with things on water 'XX or the more that. companies using modestly. of customer that are we

yields for the one a might running So under few customer demonstrations with We're EUV. masks on compare masks versus be to EUV we see expanding. with optical memory the flows customer doing base

least strike few we customer little starting we'll is so a been it which us the our primary what far base one to fruitful expand consistent interaction relationship very EUV, been industry. to about talk on of takeup think in The and at strong, a at liberty did that has So OEM. That calls. this call, maybe OEM to and the for new not bit. up it's a And customer who about products I more as next we're as the nodes, is then but business advanced with been say part over has the business the have far on strongest an their

Thomas Diffely

last guarantee John. level is guess, When of do have contracts for capital then production spending million I much you're money? look how of if And Chris. year, that level a question or of spend you this it, of the appreciate I at of Great. certain going $XXX that to you to kind sponsored

John Jordan

Yes.

several have IRR. we major discussed, numbers So revenue as we at investment years, analyses we make our threshold an are an -- every those capital supports of sure drill the least we spreadsheet. the the first last on on down over investment that for Tom, get, all, have Excel we've not analysis and line revenues And just to

of or seen, request either XX% increase increased going assurances the from to future business over to the and orders as support by to supported to customer years. not for that at be about promises, good investments. that, course, ROIC pretty is of capacity from They're commitments customers but there, to you've last our several XX% assurances has us And the XXXX X.X%

in investments revenues that strategy So sure of making them supporting the support been in to and that the effective we've our total turnaround has the ROIC. got

Operator

further And for turn will this queue closing call there the comments. at are to time. now no Frank I questions in any over the

KangJyh Lee

this us joining for you morning. Thank

support solid position the investments. strong markets entering are from to across We with demand a a and second growing our financial position our quarter growth

We and have a with great share market leading position technology.

to on improving We profit of share expect the confident and Thank are growing and way we year in to XXXX. to market you. margins. performance new another team's our proud grow continue I'm record

Operator

Ladies and at disconnect call thank your today. you you please this ask your We that that and participation lines for concludes time. for conference the gentlemen,

Photronics (PLAB) 21 Feb 242024 Q1 Earnings call transcript