UNITED
STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
FORM 8-K
CURRENT
REPORT
Pursuant To Section
13 Or 15(d) Of The Securities Exchange Act Of 1934
Date of report (Date of earliest event reported) December 2, 2015
PHOTRONICS, INC. |
(Exact name of registrant as specified in its charter) |
Connecticut | 0-15451 | 06-0854886 | ||
(State or other jurisdiction | (Commission | (IRS Employer | ||
of incorporation) | File Number) | Identification Number) |
15 Secor Road, Brookfield, CT | 06804 | |
(Address of Principal Executive Offices) | (Zip Code) |
Registrant's Telephone Number, including area code (203) 775-9000
(Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Item 2.02 Results of Operations and Financial Condition
On December 2, 2015, the Company issued a press release reporting fourth quarter fiscal 2015 results. A copy of the press release is attached to this 8-K.
A copy of the press release is furnished as Exhibit 99.1 to this report. The information contained in this Item 2.02 and the attached Exhibits 99.1, 99.2, 99.3, 99.4, 99.5 and 99.6 shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 and shall not be incorporated by reference in any filing under the Securities Act of 1933 except as shall be expressly set forth by specific reference in such filing.
On December 3, 2015, the Company will conduct a conference call during which certain unaudited, non-GAAP financial information related to the Companys operations for the three months ended November 1, 2015 will be disclosed. This information is set forth in Exhibit 99.5 and 99.6.
EBITDA is a non-GAAP financial measure that the Company defines pursuant to its credit agreement. The Company believes that EBITDA is generally accepted as providing useful information regarding the operational strength and performance of its business, including the ability of the Company to pay interest, service debt and fund capital expenditures. The Companys method for calculating EBITDA may not be comparable to methods used by other companies but is the same method the Company uses for calculating EBITDA under its credit facility.
Item 9.01. Financial Statements and Exhibits
99.1 |
Press Release dated December 2, 2015 | |||
99.2 |
Condensed Consolidated Statements of Income | |||
99.3 | Condensed Consolidated Balance Sheets | |||
99.4 | Condensed Consolidated Statements of Cash Flows | |||
99.5 |
Reconciliation of GAAP to Non-GAAP Financial Information | |||
99.6 | Reconciliation of GAAP Net Income to Non-GAAP EBITDA |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
PHOTRONICS, INC. |
(Registrant) |
DATE: December 3, 2015 | BY | /s/ Richelle E. Burr |
Richelle E. Burr | ||
Vice President, General Counsel |
PHOTRONICS, INC. |
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For Further
Information: |
Press Release |
Photronics Reports Fourth Quarter Fiscal 2015 Results
● |
Record quarterly
sales of $141.7 million, up 14% compared with last year and the sixth
consecutive quarter of year-over-year revenue growth
|
● |
Net income rose to
$18.6 million ($0.25 per diluted share) |
● |
Gross margin of 31.5% and operating margin of 19.2%, driven by high incremental margins |
● |
High-End IC and
FPD increased 49% and 48% Y/Y,
respectively |
● |
EBITDA of $50
million, up 54% from Q414 |
● |
Net cash of $73 million, up $23 million from 2014, providing financial strength and flexibility to fund growth |
BROOKFIELD, Connecticut December 2, 2015 Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in supplying innovative imaging technology solutions for the global electronics industry, today reported financial results for the fiscal 2015 fourth quarter and fiscal year ended November 1, 2015.
Fourth quarter sales were $141.7 million, a sequential increase of 8% and up 14% compared with last year. Sales of semiconductor photomasks were $111.5 million, up 12% compared with the fourth quarter of 2014, and sales of flat panel display (FPD) photomasks were $30.2 million, up 21% compared with last year. Net income attributable to Photronics, Inc. shareholders was $18.6 million, or $0.25 per diluted share, compared with $4.3 million, or $0.07 per diluted share, for the fourth quarter of 2014.
"We benefited from very strong demand for High End photomasks in both IC and FPD," stated Peter Kirlin, chief executive officer. "High-End memory and flat panel display have been strong all year, and those trends continued through the fourth quarter. High-End logic also contributed as customers introduced new designs at advanced nodes. Coupled with these strong demand drivers, we realized a high level of operating leverage, allowing us to deliver strong bottom line growth. Finally, our net cash position expanded to $73 million, providing additional flexibility as we look to invest in our future and increase shareholder value. Needless to say, Im very pleased with these results and the performance by everyone in the organization to achieve them."
Full Year Results
Sales for fiscal year 2015 were a record $524.2 million, growing 15% over fiscal year 2014. Sales of IC photomasks increased 19% while sales of FPD photomasks were up 1%. Non-GAAP net income attributable to Photronics, Inc. shareholders for fiscal 2015 was a record $45.5 million, or $0.64 per diluted share, compared with $12.1 million, or $0.19 per diluted share, in fiscal 2014.
Non-GAAP Financial Measures
Non-GAAP net income attributable to Photronics, Inc. shareholders 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. The attached financial supplement reconciles non-GAAP financial information with Photronics, Inc.'s financial results under GAAP. Photronics, Inc. believes that non-GAAP net income attributable to Photronics, Inc. shareholders 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. shareholders 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:
● |
Financing expenses in
fiscal 2015 related to the exchange of convertible senior notes are
excluded because they are not a
part of ongoing operations. |
● |
Non-cash acquisition gain and transaction expenses in fiscal 2014 related to the joint venture, PDMC, in Taiwan are excluded because they are not 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.
Conference Call
A conference call with investors and the media to discuss these results is scheduled for 8:30 a.m. Eastern Time on Thursday, December 3, 2015. 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 on Photronics web site for instant replay access.
# # #
About Photronics
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 Companys 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 as well as decisions we may make in the future regarding our business, capital structure and other matters. These forward-looking statements generally can be identified by phrases such as believes, expects, anticipates, plans, projects, and similar expressions. Accordingly, there is no assurance that the Companys 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.
18-2015
PHOTRONICS, INC. AND
SUBSIDIARIES
Condensed Consolidated Statements of
Income
(in thousands,
except per share amounts)
Three Months Ended | Year Ended | |||||||||||||||
November 1, | November 2, | November 1, | November 2, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Net sales | $ | 141,692 | $ | 124,251 | $ | 524,206 | $ | 455,527 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of sales | (97,078 | ) | (97,626 | ) | (381,070 | ) | (355,181 | ) | ||||||||
Selling, general and administrative | (12,189 | ) | (11,547 | ) | (48,983 | ) | (49,638 | ) | ||||||||
Research and development | (5,177 | ) | (5,801 | ) | (21,920 | ) | (21,913 | ) | ||||||||
Operating income | 27,248 | 9,277 | 72,233 | 28,795 | ||||||||||||
Gain on acquisition | - | - | - | 16,372 | ||||||||||||
Other income (expense), net | 308 | (574 | ) | (2,193 | ) | (3,837 | ) | |||||||||
Income before income taxes | 27,556 | 8,703 | 70,040 | 41,330 | ||||||||||||
Income tax provision | (5,406 | ) | (2,004 | ) | (13,181 | ) | (9,295 | ) | ||||||||
Net income | 22,150 | 6,699 | 56,859 | 32,035 | ||||||||||||
Net income attributable to noncontrolling interests | (3,527 | ) | (2,422 | ) | (12,234 | ) | (6,039 | ) | ||||||||
Net income attributable to Photronics, Inc. shareholders | $ | 18,623 | $ | 4,277 | $ | 44,625 | $ | 25,996 | ||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 0.28 | $ | 0.07 | $ | 0.67 | $ | 0.42 | ||||||||
Diluted | $ | 0.25 | $ | 0.07 | $ | 0.63 | $ | 0.41 | ||||||||
Weighted-average number of common shares outstanding: | ||||||||||||||||
Basic | 66,575 | 63,106 | 66,331 | 61,779 | ||||||||||||
Diluted | 78,631 | 64,085 | 78,383 | 66,679 |
PHOTRONICS, INC. AND
SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
November 1, | November 2, | |||||
2015 | 2014 | |||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 205,867 | $ | 192,929 | ||
Accounts receivable | 110,056 | 94,515 | ||||
Inventories | 24,157 | 22,478 | ||||
Other current assets | 24,034 | 26,570 | ||||
Total current assets | 364,114 | 336,492 | ||||
Property, plant and equipment, net | 547,284 | 550,069 | ||||
Investment in joint venture | 93,021 | 93,122 | ||||
Intangible assets, net | 24,616 | 30,294 | ||||
Other assets | 16,520 | 19,206 | ||||
$ | 1,045,555 | $ | 1,029,183 | |||
Liabilities and Equity | ||||||
Current liabilities: | ||||||
Current portion of long-term borrowings | $ | 65,495 | $ | 10,381 | ||
Accounts payable and accrued liabilities | 127,197 | 128,736 | ||||
Total current liabilities | 192,692 | 139,117 | ||||
Long-term borrowings | 67,120 | 131,805 | ||||
Other liabilities | 23,677 | 18,767 | ||||
Photronics, Inc. shareholders' equity | 646,555 | 628,050 | ||||
Noncontrolling interests | 115,511 | 111,444 | ||||
Total equity | 762,066 | 739,494 | ||||
$ | 1,045,555 | $ | 1,029,183 |
PHOTRONICS, INC. AND
SUBSIDIARIES
Condensed Consolidated Statements of Cash
Flows
(in
thousands)
Year Ended | ||||||||
November 1, | November 2, | |||||||
2015 | 2014 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 56,859 | $ | 32,035 | ||||
Adjustments to reconcile net income to net cash | ||||||||
provided by operating activities: | ||||||||
Depreciation and amortization | 82,413 | 80,136 | ||||||
Gain on acquisition | - | (16,372 | ) | |||||
Changes in assets and liabilities and other | (6,077 | ) | 562 | |||||
Net cash provided by operating activities | 133,195 | 96,361 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property, plant and equipment | (104,033 | ) | (91,085 | ) | ||||
Cash from acquisition | - | 4,508 | ||||||
Other | (272 | ) | (908 | ) | ||||
Net cash used in investing activities | (104,305 | ) | (87,485 | ) | ||||
Cash flows from financing activities: | ||||||||
Repayments of long-term borrowings | (9,571 | ) | (29,782 | ) | ||||
Payment of deferred financing fees | - | (346 | ) | |||||
Proceeds from share-based arrangements | 2,651 | 1,298 | ||||||
Other | (179 | ) | (711 | ) | ||||
Net cash used in financing activities | (7,099 | ) | (29,541 | ) | ||||
Effect of exchange rate changes on cash | (8,853 | ) | (2,021 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 12,938 | (22,686 | ) | |||||
Cash and cash equivalents, beginning of period | 192,929 | 215,615 | ||||||
Cash and cash equivalents, end of period | $ | 205,867 | $ | 192,929 | ||||
Noncash net assets from acquisition | $ | - | $ | 110,211 |
PHOTRONICS, INC. AND
SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial
Information
(in thousands,
except per share data)
(Unaudited)
Three Months Ended | Year Ended | ||||||||||||
November 1, | November 2, | November 1, | November 2, | ||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||
Reconciliation of GAAP to Non-GAAP Net Income | |||||||||||||
Attributable to Photronics, Inc. Shareholders | |||||||||||||
GAAP net income attributable to Photronics, Inc. shareholders | $ | 18,623 | $ | 4,277 | $ | 44,625 | $ | 25,996 | |||||
(a) Financing expenses, net of tax | - | - | 901 | - | |||||||||
(b) Gain on acquisition, net of tax | - | - | - | (16,372 | ) | ||||||||
(c) Acquisition transaction expenses, net of tax | - | - | - | 2,455 | |||||||||
Non-GAAP net income attributable to Photronics, Inc. shareholders | $ | 18,623 | $ | 4,277 | $ | 45,526 | $ | 12,079 | |||||
Reconciliation of GAAP to Non-GAAP Net Income | |||||||||||||
Applicable to Common Shareholders | |||||||||||||
Weighted average number of diluted shares outstanding | |||||||||||||
GAAP | 78,631 | 64,085 | 78,383 | 66,679 | |||||||||
Non-GAAP | 78,631 | 64,085 | 78,383 | 62,734 | |||||||||
Net income per diluted share | |||||||||||||
GAAP | $ | 0.25 | $ | 0.07 | $ | 0.63 | $ | 0.41 | |||||
Non-GAAP | $ | 0.25 | $ | 0.07 | $ | 0.64 | $ | 0.19 |
(a) | Represents financing expenses related to the exchange of $57.5 million of 3.25% convertible senior notes, recorded in other expense, net |
(b) | Represents gain on acquisition of DNP Photomask Technology Taiwan Co., Ltd (DPTT), a wholly-owned subsidiary of Dai Nippon Printing Co., Ltd. |
(c) | Represents transaction expenses in connection with the acquisition of DPTT |
PHOTRONICS, INC. AND
SUBSIDIARIES
Non-GAAP Financial Measure
Reconciliation of GAAP Net Income to Non-GAAP
EBITDA
(in thousands)
(Unaudited)
Three Months Ended | Year Ended | ||||||||||||
November 1, | November 2, | November 1, | November 2, | ||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||
GAAP Net Income (a) | $ | 22,150 | $ | 6,699 | $ | 56,859 | $ | 32,035 | |||||
Add: interest expense | 1,178 | 1,638 | 4,991 | 7,247 | |||||||||
Add: income tax expense | 5,406 | 2,004 | 13,181 | 9,295 | |||||||||
Add: depreciation and amortization | 20,777 | 21,421 | 81,653 | 78,685 | |||||||||
Add (less): special items (b) | 905 | 941 | 4,590 | (9,846 | ) | ||||||||
Non-GAAP EBITDA | $ | 50,416 | $ | 32,703 | $ | 161,274 | $ | 117,416 |
(a) | Includes net income attributable to noncontrolling interests. |
(b) | Special items consist of stock compensation expense, and in 2015 financing expenses in connection with the exchange of $57.5 million of 3.25% convertible senior notes, and in 2014 noncash gain on acquisition of DNP Photomask Technology Taiwan, Co., Ltd., a wholly-owned subsidiary of Dai Nippon Printing Co., Ltd., and related acquisition transaction expenses. |