Company Overview - Photronics, Inc. (NASDAQ: PLAB) is a manufacturer of photomasks used in integrated circuits and flat panel display manufacturing across the US, Asia, and Europe [1] - The company is initiated with a Strong Buy rating and a price target of $32 [1] Investment Thesis - The Strong Buy rating is based on above-consensus expectations for the company's performance [1] - Moretus Research emphasizes a structured framework to identify companies with durable business models and mispriced cash flow potential [1] - The research focuses on underappreciated companies undergoing structural changes or temporary dislocations, which can lead to asymmetric returns [1] Research Methodology - Moretus Research combines rigorous fundamental analysis with a judgment-driven process, avoiding noise and overly complex forecasting [1] - Valuation is based on sector-relevant multiples tailored to each company's business model and capital structure, emphasizing comparability and relevance [1] - The research aims to provide professional-grade insights and actionable valuation, raising the standard for independent investment research [1]

About Photronics BROOKFIELD, Conn., May 07, 2025 (GLOBE NEWSWIRE) -- Photronics, Inc. (Nasdaq:PLAB), a worldwide leader in photomask technologies and solutions, announced today its participation in the following upcoming financial conferences: Date: Thursday, May 29 Event: TD Cowen's 53 Annual Technology, Media & Telecom Conference Location: New York, NY Presentation Time: 10:15 a.m. ET Date: Tuesday, June 10 Event: D.A. Davidson's 1 Annual Technology & Consumer Conference Location: Nashville, TN Date: Wedn ...

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Revenue and Profitability - Revenue for Q1 FY25 was $212.1 million, a decrease of 4.7% compared to Q4 FY24 and a decrease of 1.9% compared to Q1 FY24, primarily due to seasonal softness and mainstream weakness in Asia and Europe [110]. - Gross profit for Q1 FY25 was $75.5 million, resulting in a gross margin of 35.6%, down from 37.0% in Q4 FY24, primarily due to a revenue decrease of 4.7% [113]. - Net income attributable to Photronics, Inc. shareholders was 20.2% in Q1 FY25, an increase from 15.3% in Q4 FY24 [104]. - Non-GAAP net income attributable to shareholders for Q1 FY25 was $32.4 million, compared to $29.9 million in Q1 FY24 [134]. Expenses - Selling, general, and administrative expenses were $19.1 million in Q1 FY25, a decrease from $21.0 million in Q4 FY24, attributed to lower compensation and professional fees [115]. - Research and development expenses decreased to $4.3 million in Q1 FY25 from $5.3 million in Q4 FY24, primarily due to reduced qualification activities in Asia [116]. Cash Flow and Investments - As of February 2, 2025, cash and cash equivalents totaled $642.2 million, an increase from $598.5 million on October 31, 2024 [122]. - Net cash provided by operating activities increased by $37.0 million in Q1 FY25, totaling $78.5 million compared to $41.5 million in Q1 FY24 [128]. - Net cash flows provided by investing activities improved by $49.0 million in Q1 FY25, driven by an additional maturity of short-term investments of $39.0 million [129]. - The company repurchased 195,079 shares for $4.6 million during Q1 FY25, with $95.4 million remaining under the share repurchase authorization [125]. Tax and Other Income - The effective income tax rate for Q1 FY25 was 24.5%, down from 26.6% in Q4 FY24, primarily due to changes in the jurisdictional mix of earnings [118]. - Other income increased to $25.0 million in Q1 FY25 from a loss of $1.0 million in Q4 FY24, driven by favorable foreign currency impacts [117]. Market Conditions and Future Outlook - The backlog for IC photomasks can expand to as long as two to three months due to demand exceeding supply capacity [100]. - The company anticipates continued transitions and cycles in the semiconductor industry, which will affect its business and financial condition [101]. - The company estimates capital expenditures for fiscal year 2025 to be approximately $200 million, primarily in Asia and the U.S. [124]. - The company plans to continue investing in its business and is ready to pursue mergers, acquisitions, or strategic partnerships if suitable opportunities arise [123]. Foreign Currency and Commitments - A 10% adverse movement in foreign currencies would have resulted in a net unrealized pre-tax loss of $62.7 million as of February 2, 2025 [141]. - Outstanding capital commitments as of February 2, 2025, were approximately $170.3 million, with accrued liabilities related to capital equipment purchases of approximately $13.9 million [124]. - The company has CNY 200 million (approximately $27.7 million) of borrowing capacity in China to support local operations [122].

Financial Performance (FQ1 2025) - Revenue was $212.1 million, a decrease of 2% year-over-year and 5% quarter-over-quarter[5] - Operating margin was 24.6%, a decrease of 200 basis points year-over-year and 50 basis points quarter-over-quarter[5] - Diluted EPS was $0.68, an increase of 62% year-over-year and 26% quarter-over-quarter[5] - Non-GAAP Diluted EPS was $0.52, an increase of 8% year-over-year and a decrease of 12% quarter-over-quarter[5] - Operating cash flow was $78.5 million, an increase of 89% year-over-year and 15% quarter-over-quarter[5] - Cash and short-term investments totaled $642.2 million, an increase of 23% year-over-year and 0% quarter-over-quarter[5] Revenue by Product Line (FQ1 2025) - IC High-End revenue was $60.1 million, a decrease of 1% year-over-year and 0% quarter-over-quarter[9] - IC Mainstream revenue was $93.9 million, a decrease of 3% year-over-year and 9% quarter-over-quarter[9] - FPD High-End revenue was $49.7 million, a decrease of 2% year-over-year and an increase of 3% quarter-over-quarter[10] - FPD Mainstream revenue was $8.5 million, an increase of 5% year-over-year and a decrease of 19% quarter-over-quarter[10] Guidance (FQ2 2025) - Revenue is expected to be between $208 million and $216 million[14] - Operating margin is expected to be between 23% and 25%[14] - Diluted non-GAAP EPS is expected to be between $0.44 and $0.50[14] - Full-year Capex is expected to be approximately $200 million[14]

Photronics, Inc. (NASDAQ:PLAB) Q1 2025 Earnings Conference Call February 26, 2025 8:30 AM ET Company Participants Ted Moreau - Vice President of Investor Relations Frank Lee - Chief Executive Officer Eric Rivera - Chief Financial Officer Chris Progler - Chief Technology Officer Conference Call Participants Thomas Diffely - D.A. Davidson Gowshi Sriharan - Singular Research Operator And hello, and welcome to Photronics fiscal first quarter 2025 financial results conference call. At this time, all participants ...

Financial Data and Key Metrics Changes - The company achieved first quarter sales of $212 million, in line with expectations and normal seasonal trends [8] - Diluted GAAP EPS attributable to Photronics shareholders was $0.68, while non-GAAP EPS was $0.52, above the high end of guidance [21][22] - Total revenue declined 5% sequentially, with IC revenue down 6% quarter over quarter to $154 million [17] - Operating margin was 25%, at the high end of guidance, while gross margins declined slightly to 36% due to lower sales volumes [20] Business Line Data and Key Metrics Changes - Within the IC segment, mainstream revenue declined 9% year over year, reflecting overall semiconductor industry softness, while high-end IC showed strength, particularly in the 14 to 22 nanometer geometry ranges [9][18] - FPD revenue remained stable at $58 million, with the company maintaining its market leadership due to technological superiority [19][20] - The high-end business represented 39% of ASPs in Q1 2025, up from 36% in FY 2024 [18] Market Data and Key Metrics Changes - The IC market experienced a 2% year-over-year decline, primarily due to weakness in Asia and Europe [9] - The FPD market saw slight declines year over year, but demand from customers in China remained strong [10] Company Strategy and Development Direction - The company is focusing on high-end segments to improve blended ASPs and leverage competitive strengths [30] - Investments are being made in regional capacity close to customer locations to mitigate potential tariff impacts [14] - The company plans to spend $200 million in CapEx in 2025, focusing on capacity, capability, and end-of-life tool initiatives [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the outlook for 2025 due to current market conditions and limited visibility [27] - The AI landscape is seen as a long-term growth driver, with expectations for increased photomask demand from AI-related applications [12][63] - The automotive and industrial sectors remain weak, with no significant signs of recovery [68] Other Important Information - The company generated $78 million in operating cash flow, representing 37% of total revenue [22] - Total cash at the end of the quarter was $642 million, with a modest $3 million of debt remaining [25] Q&A Session Summary Question: Why is the guidance flat quarter over quarter? - Management indicated weakness in the low-end mainstream business, particularly from 6-inch wafer fabs, impacting revenue outlook [30] Question: How is the supply-demand equation in mainstream? - Pricing remains firm, but the overall market size appears smaller due to weakness in automotive and industrial applications [34] Question: Is there increased competition from local Chinese suppliers? - Yes, there is increased competition, but the company is focusing on middle and high-end segments to maintain stable ASPs [36] Question: What challenges were faced in scaling up to Gen 8.6% AMOLED screens? - Challenges included scaling specifications and integrating advanced mask technologies onto larger substrates [38] Question: What is the current mindset on buybacks versus acquisitions? - The company remains cautious but has a war chest for potential M&A opportunities while also considering share repurchases [46] Question: How is the demand for 22 and 28 nanometer nodes trending? - There is positive traction from AI-driven business, particularly in support chips for the AI ecosystem [62] Question: What are the top risks for 2025? - The top risks identified are macroeconomic conditions and geopolitical tensions [80]

Photronics (PLAB) Q1 2025 Earnings Call February 26, 2025 08:30 AM ET Company Participants Ted Moreau - VP - Investor RelationsFrank Lee - Chief Executive OfficerEric Rivera - CFOTom Diffely - Director Of Institutional ResearchChristopher Progler - Executive Vice President, Chief Technology Officer, Strategic Planning Conference Call Participants Gowshi Sriharan - Analyst Operator Hello, and welcome to Photronics' Fiscal First Quarter twenty twenty five Financial Results Conference Call. At this time, all p ...

Financial Performance - Revenue for Q1 Fiscal 2025 was $212.1 million, down 2% year-over-year and 5% sequentially[6]. - GAAP Net income attributable to Photronics, Inc. shareholders was $42.9 million, or $0.68 per diluted share, compared to $26.2 million, or $0.42 per diluted share, in Q1 2024[6]. - Non-GAAP Net income attributable to Photronics, Inc. shareholders was $32.4 million, or $0.52 per diluted share, compared to $29.9 million, or $0.48 per diluted share in Q1 2024[6]. - Integrated Circuits (IC) revenue was $154.0 million, down 2% year-over-year and 6% sequentially[6]. - Flat Panel Display (FPD) revenue was $58.1 million, down 1% year-over-year and 1% sequentially[6]. Cash Flow and Investments - Cash generated from operating activities was $78.5 million, with $35.2 million invested in organic growth through capital expenditures[6]. - Cash at the end of the quarter was $642.2 million, with total debt of $2.7 million[6]. Future Outlook - For Q2 Fiscal 2025, revenue is expected to be between $208 million and $216 million, with non-GAAP Net income per diluted share projected between $0.44 and $0.50[5]. - The company remains cautious about 2025 while managing costs and optimizing product mix to deliver margins[3]. Operational Overview - Photronics operates 11 manufacturing facilities globally, strategically located in Asia, Europe, and North America[8].

Core Viewpoint - Photronics, Inc. reported its financial results for the first quarter of fiscal year 2025, indicating a slight decline in revenue but an increase in net income compared to the previous year [1][8]. Financial Performance - Revenue for the first quarter was $212.1 million, down 2% year-over-year and 5% sequentially [8]. - GAAP net income attributable to Photronics, Inc. shareholders was $42.9 million, or $0.68 per diluted share, compared to $26.2 million, or $0.42 per diluted share, in the first quarter of 2024 [8]. - Non-GAAP net income attributable to Photronics, Inc. shareholders was $32.4 million, or $0.52 per diluted share, compared to $29.9 million, or $0.48 per diluted share in the first quarter of 2024 [8]. - Integrated Circuits (IC) revenue was $154.0 million, down 2% year-over-year and 6% sequentially, while Flat Panel Display (FPD) revenue was $58.1 million, down 1% from the same quarter last year and 1% sequentially [8]. Market Insights - The company observed favorable demand for high-end products in the IC and FPD markets, particularly for photomasks supporting node migration and memory [2]. - The most mature mainstream masks were affected by general market softness, leading to a cautious outlook for 2025 [2]. Guidance - For the second quarter of fiscal 2025, Photronics expects revenue to be between $208 million and $216 million, with non-GAAP net income attributable to shareholders projected to be between $0.44 and $0.50 per diluted share [4]. Cash Flow and Investments - Cash generated from operating activities was $78.5 million, with $35.2 million invested in organic growth through capital expenditures [8]. - Cash returned to shareholders through share repurchases amounted to $4.6 million, and cash at the end of the quarter was $642.2 million [8]. Company Overview - Photronics is a leading manufacturer of photomasks for integrated circuits and flat panel displays, operating 11 manufacturing facilities globally [6].