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Photronics Reports Second Quarter Fiscal 2025 Results and Announces CEO Transition

1. Photronics CEO Dr. Frank Lee will retire; George Macricostas is new CEO. 2. Second quarter revenue of $211 million down 3% year-over-year. 3. Non-GAAP net income per share was $0.40, lower than previous quarters. 4. Photronics repurchased $72 million in stock, signaling confidence in business. 5. Third quarter revenue expected between $200 million and $208 million.

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FAQ

Why Bearish?

While stock buybacks indicate support, declining revenues and income are concerning. Historical examples of similar decreases often lead to bearish sentiment.

How important is it?

The leadership transition and financial decline significantly affect market perception. The immediate business outlook could further impact investor confidence.

Why Short Term?

Immediate effects on stock price likely due to current performance and leadership change. Past leadership transitions have influenced stock volatility in the tech sector.

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AMDINTCTSMMU
May 28, 2025 07:00 ET  | Source: Photronics, Inc. BROOKFIELD, Conn., May 28, 2025 (GLOBE NEWSWIRE) -- Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in photomask technologies and solutions, today reported financial results for its second quarter of fiscal year 2025 ended May 4, 2025 and also announced that Dr. Frank Lee has informed Photronics of his plans to retire in the next year or two. In order to prepare for this transition, effective immediately, Dr. Lee has stepped down from his role as CEO of Photronics, but will continue to focus on the company’s Asia operations and will remain Chairman and President of Photronics’ PDMC subsidiary in Taiwan, while also remaining on the Photronics Board of Directors. Mr. George Macricostas will immediately assume the role of Chief Executive Officer of Photronics, Inc. while remaining Chairman of the Board. “I would like to thank Frank for leading Photronics over the past three years as CEO,” said Mr. Macricostas. “For nearly twenty years he led and grew Photronics business in Asia including years of strong execution driving significant, profitable revenue growth. I look forward to working with Frank as he continues to manage the Asia operations until his retirement.” Commenting on the second-quarter performance, Dr. Lee said, “Our business in Asia continued to perform at a strong level and I am extremely proud of what we continue to accomplish. Node migration remains a positive driver of our IC business at both the high end and the higher end of mainstream. Strategically, we took an aggressive approach to return cash to our shareholders during the quarter, repurchasing $72 million of our stock as an endorsement of our long-term business model.” Second Quarter Fiscal 2025 Results Revenue was $211.0 million, down 3% year-over-year and 1% sequentially.GAAP Net income attributable to Photronics, Inc. shareholders was $8.9 million, or $0.15 per diluted share, compared with $36.3 million, or $0.58 per diluted share, in the second quarter of 2024 and $42.9 million, or $0.68 per diluted share, in the first quarter of 2025.Non-GAAP Net income attributable to Photronics, Inc. shareholders was $24.3 million, or $0.40 per diluted share, compared with $28.7 million, or $0.46 per diluted share in the second quarter of 2024 and $32.4 million, or $0.52 per diluted share, in the first quarter of 2025.IC revenue was $155.9 million, down 3% year-over-year and up 1% sequentially.FPD revenue was $55.1 million, down 2% from the same quarter last year and 5% sequentially.Cash generated from operating activities was $31.5 million, cash invested in organic growth through capital expenditures was $60.5 million, and cash returned to shareholders through share repurchases was $72.1 million.Cash, cash equivalents and short-term investments at the end of the quarter was $558.4 million. Third Quarter Fiscal 2025 Guidance For the third quarter of fiscal 2025, Photronics expects Revenue to be between $200 million and $208 million and non-GAAP Net income attributable to Photronics, Inc. shareholders to be between $0.35 and $0.41 per diluted share. Webcast A webcast to discuss these results is scheduled for 8:30 a.m. Eastern time on May 28, 2025. The call will be broadcast live and on-demand on the Events and Presentations link on the Photronics website. Analysts and investors who wish to participate in the Q&A portion of the call should click here. It is suggested that participants register fifteen minutes prior to the call's scheduled start time. About Photronics Photronics is a leading worldwide manufacturer of integrated circuit (IC) and flat panel display (FPD) photomasks. High precision quartz plates that contain microscopic images of electronic circuits, photomasks are a key element in the IC and FPD manufacturing process. Founded in 1969, Photronics has been a trusted photomask supplier for over 55 years. The company operates 11 strategically located manufacturing facilities in Asia, Europe, and North America. Additional information on the company can be accessed at www.photronics.com. Forward-Looking Statements Certain statements in this press release constitute “forward-looking statements” regarding our industry, our strategic position, and our financial and operating results. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results, performance or achievements to differ materially. Please refer to our Annual Report on Form 10-K for the fiscal year ended October 31, 2024 and other subsequent filings with the Securities and Exchange Commission. These documents contain and identify important factors that could cause our actual results to differ materially from those contained in these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We are under no duty to update any of the forward-looking statements after the date of this release to conform these statements to actual results. Non-GAAP Financial Measures Non-GAAP Net Income attributable to Photronics, Inc. shareholders and non-GAAP diluted earnings per share are "non-GAAP financial measures" as such term is defined by Regulation G of the Securities and Exchange Commission, and may differ from similarly named non-GAAP financial measures used by other companies. The attached financial supplement reconciles Photronics, Inc. financial results under GAAP to non-GAAP financial information. We believe these non-GAAP financial measures that exclude certain items are useful for analysts and investors to evaluate our on-going performance because they enable a more meaningful comparison of our projected performance with our historical results. These non-GAAP metrics are not a measure of consolidated operating results under U.S. GAAP and should not be considered as an alternative to Net income (loss), Net income (loss) per share, or any other measure of consolidated results under U.S. GAAP. The items excluded from these non-GAAP metrics, but included in the calculation of their closest GAAP equivalent, are significant components of the condensed consolidated statement of income and must be considered in performing a comprehensive assessment of overall financial performance. Please refer to the non-GAAP reconciliations below.   PHOTRONICS, INC.Condensed Consolidated Statements of Income(in thousands, except per share amounts)(Unaudited)         Three Months Ended Six Months Ended    May 4, February 2, April 28, May 4, April 28,     2025   2025   2024   2025   2024              Revenue   $210,992  $212,138  $217,000  $423,130  $433,334              Cost of goods sold   133,086   136,603   137,749   269,689   274,828              Gross Profit    77,906   75,535   79,251   153,441   158,506 Gross margin %   36.9%   35.6%   36.5%   36.3%   36.6%              Operating Expenses:                        Selling, general and administrative 18,099   19,101   18,996   37,201   37,317              Research and development  4,090   4,257   4,292   8,346   7,736              Total Operating Expenses  22,189   23,358   23,288   45,547   45,053              Other operating gain   -   -   89   -   89              Operating Income   55,717   52,177   56,052   107,894   113,542 Operating Margin   26.4%   24.6%   25.8%   25.5%   26.2%              Non-operating (loss) income, net (25,786)  24,981   20,534   (805)  16,786              Income Before Income Tax Provision 29,931   77,158   76,586   107,089   130,328              Income tax provision   5,714   18,901   20,214   24,615   34,874              Net Income    24,217   58,257   56,372   82,474   95,454              Net income attributable to noncontrolling interests 15,356   15,406   20,121   30,762   33,023              Net income attributable to Photronics, Inc. shareholders$8,861  $42,851  $36,251  $51,712  $62,431              Earnings per share attributed to Photronics, Inc. shareholders:                     Basic   $0.15  $0.69  $0.59  $0.84  $1.01                        Diluted   $0.15  $0.68  $0.58  $0.84  $1.00              Weighted-average number of common shares outstanding:                      Basic    60,793   62,093   61,771   61,443   61,613                        Diluted    60,974   62,661   62,409   61,817   62,346                         PHOTRONICS, INC.Condensed Consolidated Balance Sheets(in thousands)(Unaudited)             May 4, October 31,     2025 2024         Assets               Current assets:      Cash and cash equivalents $530,708 $598,485 Short-term investments  27,699  42,184 Accounts receivable  195,977  200,830 Inventories   61,201  56,527 Other current assets  40,221  33,036         Total current assets  855,806  931,062         Property, plant and equipment, net 807,558  745,257 Other assets   39,668  35,740         Total assets  $1,703,032 $1,712,059                         Liabilities and Equity             Current liabilities:      Current portion of long-term debt$11 $17,972 Accounts payable and accrued liabilities 166,772  165,839         Total current liabilities  166,783  183,811         Long-term debt   19  25 Other liabilities   39,461  47,464         Equity:       Photronics, Inc. shareholders' equity 1,100,920  1,120,864 Noncontrolling interests  395,849  359,895 Total equity   1,496,769  1,480,759         Total liabilities and equity $1,703,032 $1,712,059          PHOTRONICS, INC.Condensed Consolidated Statements of Cash Flows(in thousands)(Unaudited)                     Six Months Ended     May 4, April 28,      2025   2024         Cash flows from operating activities:    Net income   $82,474  $95,454 Adjustments to reconcile net income to net cash   provided by operating activities:    Depreciation and amortization  40,386   41,487 Share-based compensation  6,710   6,499 Changes in operating assets, liabilities and other (19,651)  (25,446)        Net cash provided by operating activities  109,919   117,994         Cash flows from investing activities:    Purchases of property, plant and equipment (95,749)  (63,311)Purchases of short-term investments  (27,689)  (66,040)Proceeds from maturities of short-term investments 41,482   13,234 Government incentives   1,166   1,419 Other     (57)  (6)        Net cash used in investing activities  (80,847)  (114,704)        Cash flows from financing activities:    Repayments of debt   (17,966)  (2,844)Common stock repurchases  (76,682)  - Proceeds from share-based arrangements 1,583   1,055 Net settlements of restricted stock awards (2,007)  (2,938)        Net cash used in financing activities  (95,072)  (4,727)        Effects of exchange rate changes on cash, cash equivalents, and restricted cash (1,697)  (3,839)        Net decrease in cash, cash equivalents, and restricted cash (67,697)  (5,276)Cash, cash equivalents, and restricted cash, beginning of period 601,243   501,867         Cash, cash equivalents, and restricted cash, end of period$533,546  $496,591                  PHOTRONICS, INC.Reconciliation of GAAP Net income and Earnings per Share attributable to Photronics, Inc. shareholders to Non-GAAP Net income and Earnings per Share attributable to Photronics, Inc. shareholders(in thousands, except per share amounts)(Unaudited)       Three Months ended May 4, February 2, April 28,  2025   2025   2024             GAAP Net income attributable to Photronics, Inc. shareholders$8,861  $42,851  $36,251 FX (gain) loss 31,111   (18,443)  (14,766)Estimated tax effects of FX (gain) loss (8,337)  5,152   3,743 Estimated noncontrolling interest effects of above (7,376)  2,823   3,489 Non-GAAP Net income attributable to Photronics, Inc. shareholders$24,259  $32,383  $28,717       Weighted-average number of common shares outstanding - Diluted 60,974   62,661   62,409             GAAP Diluted earnings per share attributable to Photronics, Inc. shareholders$0.15  $0.68  $0.58 Effects of non-GAAP adjustments above 0.25   (0.16)  (0.12)Non-GAAP Diluted earnings per share attributable to Photronics, Inc. shareholders$0.40  $0.52  $0.46        For Further Information:Ted MoreauVP, Investor Relations469.395.8175tmoreau@photronics.com 

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