☒ |
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)
|
Registrant’s telephone number, including area code
|
(203) 775-9000
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
COMMON
|
PLAB
|
NASDAQ Global Select Market
|
PREFERRED STOCK PURCHASE RIGHTS
|
N/A
|
N/A
|
Large Accelerated Filer
|
☒
|
Accelerated Filer
|
☐
|
Non-Accelerated Filer
|
☐
|
Smaller Reporting Company
|
☐
|
Emerging growth company
|
☐
|
PART I.
|
FINANCIAL INFORMATION
|
|
|
|
|
Item 1.
|
4
|
|
|
|
|
|
4
|
|
|
|
|
|
5
|
|
|
|
|
|
6
|
|
|
|
|
|
7
|
|
|
|
|
|
8
|
|
|
|
|
|
9
|
|
|
|
|
Item 2.
|
22
|
|
|
|
|
Item 3.
|
29
|
|
|
|
|
Item 4.
|
29
|
|
|
|
|
|
|
|
PART II.
|
OTHER INFORMATION
|
|
|
|
|
Item 1A.
|
30
|
|
|
|
|
Item 2.
|
31
|
|
Item 5.
|
31
|
|
|
|
|
Item 6.
|
32
|
PART I. |
FINANCIAL INFORMATION
|
|
February 2,
2020
|
October 31,
2019
|
||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
218,309
|
$
|
206,530
|
||||
Accounts receivable, net of allowance of $1,295 in 2020 and $1,334 in 2019
|
141,720
|
134,454
|
||||||
Inventories
|
49,673
|
48,155
|
||||||
Other current assets
|
31,202
|
38,388
|
||||||
Total current assets
|
440,904
|
427,527
|
||||||
Property, plant and equipment, net
|
619,935
|
632,441
|
||||||
Intangible assets, net
|
6,847
|
7,870
|
||||||
Deferred income taxes
|
17,594
|
20,779
|
||||||
Other assets
|
40,180
|
30,048
|
||||||
Total assets
|
$
|
1,125,460
|
$
|
1,118,665
|
||||
LIABILITIES AND EQUITY
|
||||||||
Current liabilities:
|
||||||||
Short-term debt
|
$
|
9,975
|
$
|
8,731
|
||||
Current portion of long-term debt
|
7,959
|
2,142
|
||||||
Accounts payable
|
84,707
|
91,379
|
||||||
Accrued liabilities
|
55,013
|
49,702
|
||||||
Total current liabilities
|
157,654
|
151,954
|
||||||
Long-term debt
|
36,449
|
41,887
|
||||||
Other liabilities
|
18,556
|
13,732
|
||||||
Total liabilities
|
212,659
|
207,573
|
||||||
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, 66,144 shares issued and 65,228 outstanding at February 2, 2020 and 65,595 shares issued and outstanding at October 31, 2019
|
661
|
656
|
||||||
Additional paid-in capital
|
528,535
|
524,319
|
||||||
Retained earnings
|
264,222
|
253,922
|
||||||
Treasury stock, 916 shares at February 2, 2020
|
(11,000
|
)
|
-
|
|||||
Accumulated other comprehensive loss
|
(11,742
|
)
|
(9,005
|
)
|
||||
Total Photronics, Inc. shareholders’ equity
|
770,676
|
769,892
|
||||||
Noncontrolling interests
|
142,125
|
141,200
|
||||||
Total equity
|
912,801
|
911,092
|
||||||
Total liabilities and equity
|
$
|
1,125,460
|
$
|
1,118,665
|
|
Three Months Ended
|
|||||||
February 2,
2020
|
January 27,
2019
|
|||||||
Revenue
|
$
|
159,736
|
$
|
124,712
|
||||
Cost of goods sold
|
125,134
|
98,610
|
||||||
Gross profit
|
34,602
|
26,102
|
||||||
Operating expenses:
|
||||||||
Selling, general and administrative
|
14,219
|
13,792
|
||||||
Research and development
|
4,080
|
4,263
|
||||||
Total operating expenses
|
18,299
|
18,055
|
||||||
Operating income
|
16,303
|
8,047
|
||||||
Other income (expense):
|
||||||||
Interest income and other income (expense), net
|
5,495
|
1,639
|
||||||
Interest expense
|
(1,798
|
)
|
(531
|
)
|
||||
Income before income taxes
|
20,000
|
9,155
|
||||||
Income tax provision
|
9,072
|
1,387
|
||||||
Net income
|
10,928
|
7,768
|
||||||
Net income attributable to noncontrolling interests
|
628
|
2,501
|
||||||
Net income attributable to Photronics, Inc. shareholders
|
$
|
10,300
|
$
|
5,267
|
||||
Earnings per share:
|
||||||||
Basic
|
$
|
0.16
|
$
|
0.08
|
||||
Diluted
|
$
|
0.16
|
$
|
0.08
|
||||
Weighted-average number of common shares outstanding:
|
||||||||
Basic
|
65,554
|
66,583
|
||||||
Diluted
|
66,449
|
67,047
|
|
Three Months Ended
|
|||||||
February 2,
2020
|
January 27,
2019
|
|||||||
Net income
|
$
|
10,928
|
$
|
7,768
|
||||
Other comprehensive (loss) income, net of tax of $:
|
||||||||
Foreign currency translation adjustments
|
(1,564
|
)
|
6,572
|
|||||
Other
|
17
|
19
|
||||||
Net other comprehensive (loss) income
|
(1,547
|
)
|
6,591
|
|||||
Comprehensive income
|
9,381
|
14,359
|
||||||
Less: comprehensive income attributable to noncontrolling interests
|
1,818
|
3,783
|
||||||
Comprehensive income attributable to Photronics, Inc. shareholders
|
$
|
7,563
|
$
|
10,576
|
|
Three Months Ended February 2, 2020
|
|||||||||||||||||||||||||||||||
Photronics, Inc. Shareholders
|
||||||||||||||||||||||||||||||||
Additional
Paid-in
Capital
|
Retained
Earnings
|
Treasury
Stock
|
Accumulated
Other
Comprehensive
Loss
|
Non-
controlling
Interests
|
Total
Equity
|
|||||||||||||||||||||||||||
Common Stock
|
||||||||||||||||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||||||||||||||
Balance at October 31, 2019
|
65,595
|
$
|
656
|
$
|
524,319
|
$
|
253,922
|
$
|
-
|
$
|
(9,005
|
)
|
$
|
141,200
|
$
|
911,092
|
||||||||||||||||
Net income
|
-
|
-
|
-
|
10,300
|
-
|
-
|
628
|
10,928
|
||||||||||||||||||||||||
Other comprehensive (loss) income
|
-
|
-
|
-
|
-
|
-
|
(2,737
|
)
|
1,190
|
(1,547
|
)
|
||||||||||||||||||||||
Sale of common stock through employee stock option and purchase plans
|
358
|
3
|
2,854
|
-
|
-
|
-
|
-
|
2,857
|
||||||||||||||||||||||||
Restricted stock awards vesting and expense
|
191
|
2
|
756
|
-
|
-
|
-
|
-
|
758
|
||||||||||||||||||||||||
Share-based compensation expense
|
-
|
-
|
351
|
-
|
-
|
-
|
-
|
351
|
||||||||||||||||||||||||
Purchase of treasury stock
|
-
|
-
|
-
|
-
|
(11,000
|
)
|
-
|
-
|
(11,000
|
)
|
||||||||||||||||||||||
Repurchase of common stock of subsidiary
|
-
|
-
|
255
|
-
|
-
|
-
|
(893
|
)
|
(638
|
)
|
||||||||||||||||||||||
Balance at February 2, 2020
|
66,144
|
$
|
661
|
$
|
528,535
|
$
|
264,222
|
$
|
(11,000
|
)
|
$
|
(11,742
|
)
|
$
|
142,125
|
$
|
912,801
|
|
Three Months Ended January 27, 2019
|
|||||||||||||||||||||||||||||||
Photronics, Inc. Shareholders
|
||||||||||||||||||||||||||||||||
Common Stock
|
Additional
Paid-in
|
Retained
|
Treasury
|
Accumulated
Other
Comprehensive
|
Non-
controlling
|
Total
|
||||||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Stock
|
(Loss) Income
|
Interests
|
Equity
|
|||||||||||||||||||||||||
Balance at October 31, 2018
|
69,700
|
$
|
697
|
$
|
555,606
|
$
|
231,445
|
$
|
(23,111
|
)
|
$
|
(4,966
|
)
|
$
|
144,898
|
$
|
904,569
|
|||||||||||||||
Adoption of ASU 2014-09
|
-
|
-
|
-
|
1,083
|
-
|
-
|
121
|
1,204
|
||||||||||||||||||||||||
Adoption of ASU 2016-16
|
-
|
-
|
-
|
(1,130
|
)
|
-
|
-
|
(3
|
)
|
(1,133
|
)
|
|||||||||||||||||||||
Net income
|
-
|
-
|
-
|
5,267
|
-
|
-
|
2,501
|
7,768
|
||||||||||||||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
-
|
-
|
5,309
|
1,282
|
6,591
|
||||||||||||||||||||||||
Sale of common stock through employee stock option and purchase plans
|
94
|
1
|
521
|
-
|
-
|
-
|
-
|
522
|
||||||||||||||||||||||||
Restricted stock awards vesting and expense
|
123
|
1
|
567
|
-
|
-
|
-
|
-
|
568
|
||||||||||||||||||||||||
Share-based compensation expense
|
-
|
-
|
494
|
-
|
-
|
-
|
-
|
494
|
||||||||||||||||||||||||
Contribution from noncontrolling interest
|
-
|
-
|
-
|
-
|
-
|
-
|
29,394
|
29,394
|
||||||||||||||||||||||||
Dividends to noncontrolling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
(26,102
|
)
|
(26,102
|
)
|
||||||||||||||||||||||
Repurchase of common stock of subsidiary
|
-
|
-
|
-
|
-
|
-
|
-
|
(9
|
)
|
(9
|
)
|
||||||||||||||||||||||
Purchase of treasury stock
|
-
|
-
|
-
|
-
|
(10,696
|
)
|
-
|
-
|
(10,696
|
)
|
||||||||||||||||||||||
Balance at January 27, 2019
|
69,917
|
$
|
699
|
$
|
557,188
|
$
|
236,665
|
$
|
(33,807
|
)
|
$
|
343
|
$
|
152,082
|
$
|
913,170
|
|
Three Months Ended
|
|||||||
February 2,
2020
|
January 27,
2019
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
10,928
|
$
|
7,768
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
24,626
|
18,781
|
||||||
Share-based compensation
|
1,356
|
1,062
|
||||||
Changes in assets and liabilities:
|
||||||||
Accounts receivable
|
(6,699
|
)
|
(9,333
|
)
|
||||
Inventories
|
(1,435
|
)
|
(2,313
|
)
|
||||
Other current assets
|
4,724
|
(22,082
|
)
|
|||||
Accounts payable, accrued liabilities, and other
|
(2,715
|
)
|
(13,169
|
)
|
||||
Net cash provided by (used in) operating activities
|
30,785
|
(19,286
|
)
|
|||||
Cash flows from investing activities:
|
||||||||
Purchases of property, plant and equipment
|
(13,807
|
)
|
(106,925
|
)
|
||||
Government incentives
|
2,417
|
5,029
|
||||||
Other
|
(139
|
)
|
19
|
|||||
Net cash used in investing activities
|
(11,529
|
)
|
(101,877
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Proceeds from debt
|
1,140
|
28,180
|
||||||
Purchase of treasury stock
|
(11,000
|
)
|
(10,696
|
)
|
||||
Repayments of debt
|
(389
|
)
|
-
|
|||||
Proceeds from share-based arrangements
|
2,886
|
650
|
||||||
Contribution from noncontrolling interest
|
-
|
29,394
|
||||||
Dividends paid to noncontrolling interest
|
-
|
(26,102
|
)
|
|||||
Other
|
(248
|
)
|
(45
|
)
|
||||
Net cash (used in) provided by financing activities
|
(7,611
|
)
|
21,381
|
|||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
149
|
2,961
|
||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
11,794
|
(96,821
|
)
|
|||||
Cash, cash equivalents, and restricted cash at beginning of period
|
209,291
|
331,989
|
||||||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
221,085
|
$
|
235,168
|
||||
Supplemental disclosure information:
|
||||||||
Accrual for property, plant and equipment purchased during the period
|
$
|
1,511
|
$
|
30,697
|
||||
Accrual for property, plant and equipment purchased with funds receivable from government incentives
|
$
|
-
|
$
|
11,799
|
|
February 2,
2020
|
October 31,
2019
|
||||||
Raw materials
|
$
|
46,090
|
$
|
46,027
|
||||
Work in process
|
2,981
|
2,122
|
||||||
Finished goods
|
602
|
6
|
||||||
$
|
49,673
|
$
|
48,155
|
|
February 2,
2020
|
October 31,
2019
|
||||||
Land
|
$
|
12,055
|
$
|
12,085
|
||||
Buildings and improvements
|
173,497
|
172,340
|
||||||
Machinery and equipment
|
1,759,785
|
1,748,483
|
||||||
Leasehold improvements
|
20,021
|
19,921
|
||||||
Furniture, fixtures and office equipment
|
14,304
|
14,404
|
||||||
Construction in progress
|
18,521
|
28,135
|
||||||
1,998,183
|
1,995,368
|
|||||||
Accumulated depreciation and amortization
|
(1,378,248
|
)
|
(1,362,927
|
)
|
||||
$
|
619,935
|
$
|
632,441
|
|
February 2, 2020
|
October 31, 2019
|
||||||||||||||
Classification
|
Carrying
Amount
|
Photronics
Interest
|
Carrying
Amount
|
Photronics
Interest
|
||||||||||||
Current assets
|
$
|
23,638
|
$
|
11,821
|
$
|
24,142
|
$
|
12,074
|
||||||||
Non-current assets
|
110,296
|
55,159
|
114,015
|
57,019
|
||||||||||||
Total assets
|
133,934
|
66,980
|
138,157
|
69,093
|
||||||||||||
Current liabilities
|
24,044
|
12,024
|
16,889
|
8,446
|
||||||||||||
Non-current liabilities
|
36,716
|
18,362
|
42,094
|
21,051
|
||||||||||||
Total liabilities
|
60,760
|
30,386
|
58,983
|
29,497
|
||||||||||||
Net assets
|
$
|
73,174
|
$
|
36,594
|
$
|
79,174
|
$
|
39,596
|
|
February 2,
2020
|
October 31,
2019
|
||||||
Project Loans
|
$
|
35,094
|
$
|
34,490
|
||||
Working Capital Loans (value added tax component)
|
9,314
|
9,539
|
||||||
44,408
|
44,029
|
|||||||
Current portion of long-term debt
|
(7,959
|
)
|
(2,142
|
)
|
||||
Long-term debt
|
$
|
36,449
|
$
|
41,887
|
2020 (remainder of)
|
$
|
1,788
|
||
2021
|
8,449
|
|||
2022
|
12,648
|
|||
2023
|
3,501
|
|||
2024
|
6,704
|
|||
Thereafter
|
11,318
|
|||
|
$
|
44,408
|
|
Fiscal Year
|
|||||||||||||||||||||||||||
2020
|
2021
|
2022
|
2023
|
2024
|
2025
|
2026
|
||||||||||||||||||||||
Principal payments
|
$
|
1,298
|
$
|
6,488
|
$
|
5,785
|
$
|
3,501
|
$
|
6,704
|
$
|
6,416
|
$
|
4,902
|
|
Fiscal Year
|
|||||||||||
2020
|
2021
|
2022
|
||||||||||
Principal payments
|
$
|
490
|
$
|
1,961
|
$
|
6,863
|
Revenue by Geographic Origin
|
||||||||
Taiwan
|
$
|
66,114
|
$
|
57,740
|
||||
Korea
|
40,736
|
35,237
|
||||||
United States
|
25,067
|
22,472
|
||||||
Europe
|
7,543
|
8,354
|
||||||
China
|
19,900
|
263
|
||||||
All other Asia
|
376
|
646
|
||||||
$
|
159,736
|
$
|
124,712
|
Revenue by Timing of Recognition
|
||||||||
Over time
|
$
|
137,696
|
$
|
120,845
|
||||
At a point in time
|
22,040
|
3,867
|
||||||
$
|
159,736
|
$
|
124,712
|
- |
Election not to recognize short-term leases on the balance sheet.
|
- |
Practical expedient to not separate lease and non-lease components in a contract.
|
- |
Practical expedient “package” for transitioning to the new guidance:
|
- |
Not reassessing whether any expired or existing contracts are, or contain, leases.
|
- |
Not reassessing lease classification for any existing or expired leases.
|
- |
Not reassessing initial direct costs for any existing leases.
|
|
Fiscal Year
|
|||||||||||||||||||||||||||||||||||
|
2020
|
2021
|
2022
|
2023
|
2024
|
Thereafter
|
Total Lease
Payments
|
Imputed
Interest*
|
Total
|
|||||||||||||||||||||||||||
Lease payments
|
$
|
1,521
|
$
|
1,767
|
$
|
1,652
|
$
|
770
|
$
|
438
|
$
|
386
|
$
|
6,534
|
$
|
(286
|
)
|
$
|
6,248
|
|
Three Months Ended
|
|||
Supplemental cash flows information:
|
February 2, 2020
|
|||
Operating cash flows from operating leases
|
$
|
1,885
|
||
ROU assets obtained in exchange for lease obligations
|
$
|
282
|
|
As of
|
|||
|
February 2, 2020
|
|||
|
||||
Weighted-average remaining lease term
|
3.9 years
|
|||
Weighted-average discount rate
|
2.38
|
%
|
2020
|
$
|
1,885
|
||
2021
|
1,613
|
|||
2022
|
1,535
|
|||
2023
|
742
|
|||
2024
|
424
|
|||
Thereafter
|
377
|
|||
$
|
6,576
|
|
Three Months Ended
|
|
|
January 27, 2019
|
|
|
|
|
Volatility
|
|
33.1%
|
|
|
|
Risk free rate of return
|
|
2.5-2.9%
|
|
|
|
Dividend yield
|
|
0.0%
|
|
|
|
Expected term
|
|
5.1 years
|
Options
|
Shares
|
Weighted-
Average
Exercise
Price
|
Weighted-
Average
Remaining
Contractual
Life
|
Aggregate
Intrinsic
Value
|
|||||||
Outstanding at February 2, 2020
|
1,795,989
|
$
|
9.17
|
5.4 years
|
$
|
6,492
|
|||||
Exercisable at February 2, 2020
|
1,487,661
|
$
|
9.07
|
4.8 years
|
$
|
5,518
|
|
Three Months Ended
|
|||||||
February 2,
2020
|
January 27,
2019
|
|||||||
Net income attributable to Photronics, Inc. shareholders
|
$
|
10,300
|
$
|
5,267
|
||||
Earnings used for diluted earnings per share
|
$
|
10,300
|
$
|
5,267
|
||||
Weighted-average common shares computations:
|
||||||||
Weighted-average common shares used for basic earnings per share
|
65,554
|
66,583
|
||||||
Effect of dilutive securities:
|
||||||||
Share-based payment awards
|
895
|
464
|
||||||
Potentially dilutive common shares
|
895
|
464
|
||||||
Weighted-average common shares used for diluted earnings per share
|
66,449
|
67,047
|
||||||
Basic earnings per share
|
$
|
0.16
|
$
|
0.08
|
||||
Diluted earnings per share
|
$
|
0.16
|
$
|
0.08
|
|
Three Months Ended
|
|||||||
February 2,
2020
|
January 27,
2019
|
|||||||
Share-based payment awards
|
173
|
1,063
|
||||||
Convertible notes
|
-
|
5,542
|
||||||
Total potentially dilutive shares excluded
|
173
|
6,605
|
|
Three Months Ended February 2, 2020
|
|||||||||||
Foreign Currency
Translation
Adjustments
|
Other
|
Total
|
||||||||||
Balance at November 1, 2019
|
$
|
(8,331
|
)
|
$
|
(674
|
)
|
$
|
(9,005
|
)
|
|||
Other comprehensive (loss) income
|
(1,564
|
)
|
17
|
(1,547
|
)
|
|||||||
Less: other comprehensive income attributable to noncontrolling interests
|
1,181
|
9
|
1,190
|
|||||||||
Balance at February 2, 2020
|
$
|
(11,076
|
)
|
$
|
(666
|
)
|
$
|
(11,742
|
)
|
|
Three Months Ended January 27, 2019
|
|||||||||||
Foreign Currency
Translation
Adjustments
|
Other
|
Total
|
||||||||||
Balance at November 1, 2018
|
$
|
(4,328
|
)
|
$
|
(638
|
)
|
$
|
(4,966
|
)
|
|||
Other comprehensive income
|
6,572
|
19
|
6,591
|
|||||||||
Less: other comprehensive income attributable to noncontrolling interests
|
1,273
|
9
|
1,282
|
|||||||||
Balance at January 27, 2019
|
$
|
971
|
$
|
(628
|
)
|
$
|
343
|
|
Three Months Ended
February 2, 2020
|
From Inception Date of
September 25, 2019
|
||||||
Number of shares repurchased
|
916
|
1,911
|
||||||
Cost of shares repurchased
|
$
|
11,000
|
$
|
22,000
|
||||
Average price paid per share
|
$
|
12.01
|
$
|
11.51
|
|
Three Months Ended
January 27, 2019
|
From Inception Date of
October 22, 2018
|
||||||
Number of shares repurchased
|
1,137
|
1,467
|
||||||
Cost of shares repurchased
|
$
|
10,694
|
$
|
13,807
|
||||
Average price paid per share
|
$
|
9.40
|
$
|
9.41
|
Three Months Ended
|
||||||||||||
February 2,
2020
|
October 31,
2019
|
January 27,
2019
|
||||||||||
Revenue
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||||
Cost of goods sold
|
78.3
|
75.6
|
79.1
|
|||||||||
Gross margin
|
21.7
|
24.4
|
20.9
|
|||||||||
Selling, general and administrative expenses
|
8.9
|
7.8
|
11.0
|
|||||||||
Research and development expenses
|
2.6
|
2.9
|
3.4
|
|||||||||
Operating income
|
10.2
|
13.7
|
6.5
|
|||||||||
Other income (expense), net
|
2.3
|
(3.9
|
)
|
0.8
|
||||||||
Income before income taxes
|
12.5
|
9.8
|
7.3
|
|||||||||
Income tax provision
|
5.7
|
1.5
|
1.1
|
|||||||||
Net income
|
6.8
|
8.3
|
6.2
|
|||||||||
Net income attributable to noncontrolling interests
|
0.4
|
2.1
|
2.0
|
|||||||||
Net income attributable to Photronics, Inc. shareholders
|
6.4
|
%
|
6.2
|
%
|
4.2
|
%
|
Q1 FY20 from Q4 FY19
|
Q1 FY20 from Q1 FY19
|
|||||||||||||||||||
Revenue in
Q1 FY20
|
Increase
(Decrease)
|
Percent
Change
|
Increase
(Decrease)
|
Percent
Change
|
||||||||||||||||
IC
|
||||||||||||||||||||
High-end
|
$
|
41.0
|
$
|
(3.9
|
)
|
(8.7
|
)%
|
$
|
6.5
|
18.7
|
%
|
|||||||||
Mainstream
|
65.9
|
(1.6
|
)
|
(2.4
|
)%
|
5.6
|
9.3
|
%
|
||||||||||||
Total IC
|
$
|
107.0
|
$
|
(5.6
|
)
|
(4.9
|
)%
|
$
|
12.1
|
12.8
|
%
|
|||||||||
FPD
|
||||||||||||||||||||
High-end
|
$
|
39.8
|
$
|
14.3
|
56.4
|
%
|
$
|
24.4
|
159.1
|
%
|
||||||||||
Mainstream
|
13.0
|
(5.3
|
)
|
(29.0
|
)%
|
(1.5
|
)
|
(10.3
|
)%
|
|||||||||||
Total FPD
|
$
|
52.8
|
$
|
9.0
|
20.7
|
%
|
$
|
22.9
|
76.9
|
%
|
||||||||||
Total Revenue
|
$
|
159.7
|
$
|
3.5
|
2.2
|
%
|
$
|
35.0
|
28.1
|
%
|
Q1 FY20 from Q4 FY19
|
Q1 FY20 from Q1 FY19
|
|||||||||||||||||||
Revenue in
Q1 FY20
|
Increase
(Decrease)
|
Percent
Change
|
Increase
(Decrease)
|
Percent
Change
|
||||||||||||||||
Taiwan
|
$
|
66.1
|
$
|
(2.8
|
)
|
(4.0
|
)%
|
$
|
8.4
|
14.5
|
%
|
|||||||||
Korea
|
40.7
|
3.4
|
9.1
|
%
|
5.5
|
15.6
|
%
|
|||||||||||||
United States
|
25.1
|
(5.4
|
)
|
(17.7
|
)%
|
2.6
|
11.5
|
%
|
||||||||||||
Europe
|
7.5
|
(0.3
|
)
|
(4.0
|
)%
|
(0.8
|
)
|
(9.7
|
)%
|
|||||||||||
China
|
19.9
|
8.6
|
75.8
|
%
|
19.6
|
7,467.7
|
%
|
|||||||||||||
Other
|
0.4
|
0.0
|
(1.1
|
)%
|
(0.3
|
)
|
(41.8
|
)%
|
||||||||||||
$
|
159.7
|
$
|
3.5
|
2.2
|
%
|
$
|
35.0
|
28.1
|
%
|
Three Months Ended
|
||||||||||||||||||||
Q1 FY20
|
Q4 FY19
|
Percent
Change
|
Q1 FY19
|
Percent
Change
|
||||||||||||||||
Gross profit
|
$
|
34.6
|
$
|
38.2
|
(9.3
|
)%
|
$
|
26.1
|
32.6
|
%
|
||||||||||
Gross margin
|
21.7
|
%
|
24.4
|
%
|
20.9
|
%
|
Three Months Ended
|
||||||||||||
Q1 FY20
|
Q4 FY19
|
Q1 FY19
|
||||||||||
Interest income and other income (expense), net
|
$
|
5.5
|
$
|
(5.9
|
)
|
$
|
1.6
|
|||||
Interest expense
|
(1.8
|
)
|
(0.2
|
)
|
(0.5
|
)
|
||||||
Other income (expense)
|
$
|
3.7
|
$
|
(6.1
|
)
|
$
|
1.1
|
|||||
Three Months Ended
|
||||||||||||
Q1 FY20
|
Q4 FY19
|
Q1 FY19
|
||||||||||
Income tax provision
|
$
|
9.1
|
$
|
2.3
|
$
|
(1.4
|
)
|
|||||
Effective income tax rate
|
45.4
|
%
|
15.1
|
%
|
15.2
|
%
|
|
Total Number of
Shares Purchased
(in millions)
|
Average Price
Paid
Per share
|
Total Number of Shares
Purchased as Part of
Publicly Announced
Program (in millions)
|
Dollar Value of
Shares That May
Yet Be Purchased
(in millions)
|
||||||||||||
Period
|
||||||||||||||||
September 19, 2019 – October 31, 2019
|
1.0
|
$
|
11.05
|
1.0
|
$
|
89.0
|
||||||||||
November 1, 2019 – December 2, 2019
|
0.9
|
$
|
12.01
|
0.9
|
$
|
78.0
|
||||||||||
Total
|
1.9
|
$
|
11.51
|
1.9
|
|
Total Number of
Shares Purchased
(in millions)
|
Average Price
Paid
Per share
|
Total Number of Shares
Purchased as Part of
Publicly Announced
Program (in millions)
|
Dollar Value of
Shares That May
Yet Be Purchased
(in millions)
|
||||||||||||
Period
|
||||||||||||||||
October 12, 2018 – October 31, 2018
|
0.3
|
$
|
9.45
|
0.3
|
$
|
21.9
|
||||||||||
November 1, 2018 – November 25, 2018
|
0.2
|
$
|
9.49
|
0.2
|
$
|
20.1
|
||||||||||
November 26, 2018 – December 23, 2018
|
0.7
|
$
|
9.38
|
0.7
|
$
|
13.4
|
||||||||||
December 24, 2018 – January 27, 2019
|
0.2
|
$
|
9.41
|
0.2
|
$
|
11.2
|
*
|
|||||||||
Total
|
1.4
|
$
|
9.41
|
1.4
|
|
Incorporated by Reference
|
||||||
Exhibit
Number
|
Description
|
Form
|
File Number
|
Exhibit
|
Filing Date
|
Filed or
Furnished
Herewith
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
X
|
||||||
Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of 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
|
||||||
Employment Agreement dated March 9, 2020, between Photronics Dai Nippon Mask Corporation and Frank Lee.
|
X
|
||||||
Amendment dated March 9, 2020, between DEMA Associates, LLC and Photronics, Inc.
|
X
|
||||||
101.INS
|
XBRL Instance Document
|
X
|
|||||
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
X
|
|||||
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
X
|
|||||
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
X
|
|||||
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
X
|
|||||
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
X
|
Photronics, Inc.
(Registrant)
|
|||||
By:
|
/s/ JOHN P. JORDAN
|
By:
|
/s/ ERIC RIVERA
|
||
JOHN P. JORDAN
|
ERIC RIVERA
|
||||
Senior Vice President
|
Vice President, Corporate Controller
|
||||
Chief Financial Officer
|
(Principal Accounting Officer)
|
||||
(Principal Financial Officer)
|
|||||
Date: March 11, 2020
|
Date: March 11, 2020
|
THE COMPANY
|
By:
|
/s/ Peter Kirlin
|
Name: Peter Kirlin
|
EXECUTIVE
|
/s/
|
Frank Lee
|
Name: Frank Lee
|
Name Date
|
Witness Date
|
PHOTRONICS, INC.
|
DEMA ASSOCIATES, LLC
|
|
By:
|
/s/ Richelle E. Burr |
By:
|
/s/ Constantine S. Macricostas
|
Richelle E. Burr
|
Constantine S. Macricostas
|
|
EVP, Chief Administrative Officer & General Counsel
|
President
|
EXHIBIT 31.1
|
|||
I, Peter S. Kirlin, certify that:
|
|||
1.
|
I have reviewed this quarterly report on Form 10-Q of Photronics, Inc.
|
||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
|
||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
|
||
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
||
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
||
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
||
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
||
d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter
(the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
||
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
||
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
||
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial
reporting.
|
/s/ PETER S. KIRLIN
|
|
Peter S. Kirlin
Chief Executive Officer March 11, 2020 |
EXHIBIT 31.2
|
|||
I, John P. Jordan, certify that:
|
|||
1.
|
I have reviewed this quarterly report on Form 10-Q of Photronics, Inc.
|
||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
|
||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
|
||
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
||
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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||
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter
(the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the registrant's ability to record, process, summarize and report financial information; and
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||
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial
reporting.
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/s/ JOHN P. JORDAN
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John P. Jordan
Chief Financial Officer March 11, 2020 |
/s/ PETER S. KIRLIN
|
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Peter S. Kirlin
Chief Executive Officer March 11, 2020 |
/s/ JOHN P. JORDAN
|
|
John P. Jordan
Chief Financial Officer March 11, 2020 |