Company Overview - Photronics, Inc. is a leading worldwide manufacturer of photomasks for integrated circuits (IC) and flat panel displays (FPD) [2] - The company has been a trusted supplier for over 50 years, founded in 1969 [2] - Photronics operates 11 strategically located manufacturing facilities across Asia, Europe, and North America [2] Upcoming Event - Photronics is scheduled to present at the 27th Annual Needham Growth Conference on January 14, 2025, at 4:30 p.m. Eastern Time [1] - The event will take place at the Lotte NY Palace hotel in New York City [1] - The presentation will be accessible via a live and on-demand webcast on the company's website [1]

Company Performance - Photronics Q4 FY24 sales exceeded guidance driven by AI-linked IC demand and stable FPD growth [2] - The company plans $200M in CapEx for 2025, which may strengthen its regional market position [2] Expansion Strategy - Photronics is expanding its operations in both China and the US [2] Investment Approach - The investment style focuses on GARP/Value stocks, targeting high-quality businesses with strong moats and growth potential [3] - The strategy emphasizes fundamentals, seeking stocks trading at a discount to intrinsic value with a clear margin of safety [3] - The long-term approach (5-7 years) aims for wealth accumulation through compounding while prioritizing downside protection [3]

Core Viewpoint - Photronics (PLAB) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system reflects changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling actions that affect stock prices [4]. Company Performance and Analyst Sentiment - The recent upgrade for Photronics suggests an improvement in the company's underlying business, which is expected to drive the stock price higher [5][11]. - For the fiscal year ending October 2025, Photronics is projected to earn $2.30 per share, representing a 12.2% increase from the previous year, with a 4.5% rise in the Zacks Consensus Estimate over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Only the top 5% of Zacks-covered stocks receive a 'Strong Buy' rating, indicating superior earnings estimate revisions and potential for market-beating returns [9][10].

Financial Performance - Total revenue for the year ended October 31, 2024, was $866,946, a decrease of 2% from $892,076 in 2023 [252]. - Gross profit for 2024 was $315,946, down from $336,162 in 2023, reflecting a gross margin of approximately 36.4% [252]. - Operating income decreased to $221,518 in 2024 from $253,050 in 2023, indicating a decline of about 12.5% [252]. - Net income attributable to Photronics, Inc. shareholders was $130,688 for 2024, compared to $125,485 in 2023, representing an increase of 2% [252]. - Comprehensive income for 2024 was $192,397, down from $205,246 in 2023, indicating a decrease of approximately 6.5% [255]. - Net income for the year ending October 31, 2024, was $183,848, a decrease from $199,634 in 2023, representing a decline of about 8% [260]. - Cash flows from operating activities provided $261,444 in 2024, down from $302,176 in 2023, indicating a decrease of approximately 13.5% [260]. - The company reported share-based compensation expense of $13,890 for 2024, an increase from $8,001 in 2023, marking a rise of about 73.6% [260]. - Total expenses incurred for the year ended October 31, 2024, were $13,890 million, a significant increase from $8,001 million in 2023, representing a 73.6% year-over-year growth [370]. Assets and Liabilities - Total current assets increased to $931,062 in 2024, up from $785,450 in 2023, marking a growth of approximately 18.5% [247]. - Total liabilities decreased to $231,300 in 2024 from $250,612 in 2023, a reduction of about 7.7% [247]. - Cash and cash equivalents rose to $598,485 in 2024, compared to $499,292 in 2023, reflecting an increase of approximately 19.9% [247]. - Property, plant, and equipment, net increased to $745.3 million as of October 31, 2024, from $709.2 million as of October 31, 2023, reflecting a growth of 5.1% [324]. - The total inventory as of October 31, 2024, was $56.5 million, an increase of 13.1% from $50.0 million as of October 31, 2023 [322]. - The allowance for credit losses was $1.1 million as of October 31, 2024, compared to $1.1 million as of October 31, 2023, indicating stability in credit risk management [316]. Research and Development - Research and development expenses increased to $16,576 in 2024 from $13,654 in 2023, a rise of about 21.5% [252]. - Research and development expenses were $16.6 million, $13.7 million, and $18.3 million for the years ended October 31, 2024, 2023, and 2022, respectively, indicating a year-over-year increase of 21.2% from 2023 to 2024 [300]. Foreign Currency and Risk Management - The primary net foreign currency exposures include the South Korean won, Japanese yen, New Taiwan dollar, Chinese renminbi, Singapore dollar, British pound sterling, and euro [225]. - The increase in foreign currency rate change risk is primarily due to increased net exposures of the New Taiwan dollar and South Korean won against the U.S. dollar [225]. - The company does not believe that a 10% change in the exchange rates of other non-U.S. dollar currencies would have had a material effect on its consolidated financial statements as of October 31, 2024 [225]. - The company engages in transactions in multiple currencies, which may affect reported revenue and operating income due to exchange rate fluctuations [223]. - The company does not enter into derivatives for speculative purposes, focusing instead on mitigating exposure to foreign currency fluctuations [224]. Customer Concentration - As of October 31, 2024, Customer A accounted for 19.2% of the net accounts receivable, a decrease from 21% in the previous year [415]. - Customer B's share of net accounts receivable increased to 14.6% from 10% year-over-year [415]. - For the revenue attributable to customers, Customer A represented 15% in the reporting period ending October 31, 2024, compared to 14% in 2022 [417]. - Customer B's revenue contribution rose to 12% from 10% year-over-year [417]. - Customer C's revenue share decreased to 9% from 13% in the previous year [417]. - The company monitors customer concentration in both accounts receivable and revenue to manage financial risk effectively [414]. - The company maintains a strategy of diversifying its customer base to reduce dependency on major clients [414]. Tax and Deferred Income - The income tax provision for the year ended October 31, 2024, was $63,567 million, a decrease from $70,312 million in 2023 [385]. - The company's income before income tax provisions was $247,415 million for the year ended October 31, 2024, compared to $269,946 million in 2023 [382]. - As of October 31, 2024, the net deferred income tax assets increased to $22,590 million from $21,062 million in the previous year, reflecting a valuation allowance decrease due to expected realizable tax benefits [389]. - The balance of unrecognized tax benefits increased to $14,720 million as of October 31, 2024, from $8,908 million in the previous year, including interest and penalties [395]. - The company established a valuation allowance for deferred tax assets, which decreased in 2024 due to management's assessment of realizable tax benefits [389]. Investments and Capital Expenditures - The company invested $130,942 in property, plant, and equipment in 2024, slightly down from $131,295 in 2023 [260]. - The company has unrecognized commitments totaling $74,046 million for the fiscal year 2025, primarily for property, plant, and equipment acquisitions [407]. - The company plans to exercise early buyout options for finance leases during the first half of 2025, which includes a $7.2 million inspection tool and a $35.5 million lithography tool [341][342]. Share-Based Compensation - The company granted 865,050 restricted stock awards in 2024, with a weighted-average grant-date fair value of $29.50 per share, compared to 791,925 awards in 2023 at $16.84 [373]. - The total intrinsic value of options exercised in 2024 was $2,981 million, an increase from $1,654 million in 2023 [378]. - The company recognized $1.2 million of incremental stock-based compensation due to the accelerated vesting of restricted stock awards for departing executives [370]. - Share-based compensation expenses increased in 2024, reflecting the company's ongoing commitment to incentivizing its workforce [368].

BROOKFIELD, Conn., Dec. 18, 2024 (GLOBE NEWSWIRE) -- Photronics, Inc. (Nasdaq: PLAB), a worldwide leader in photomask technologies and solutions, announced today the appointment of David Garcia to the company’s Board of Directors on December 12, 2024. This election expands Board membership to nine members, seven of whom are independent. Mr. Garcia is currently a strategic advisor and previously spent approximately 30 years practicing law, most recently at Holland & Hart after starting his career at Wilson S ...

BROOKFIELD, Conn., Dec. 12, 2024 (GLOBE NEWSWIRE) -- Photronics, Inc. (Nasdaq:PLAB), a worldwide leader in photomask technologies and solutions, announced today its participation in the 13th Annual NYC Summit investor conference being held Tuesday, December 17, 2024 at Mastro’s Steakhouse in New York City. Management will host small group investor meetings. Attendance at the NYC Summit is by invitation and is available solely to accredited investors and publishing research analysts. Please contact Co-Chair ...

Financial Data and Key Metrics Changes - The company reported Q4 sales of $223 million, exceeding the high end of guidance, representing a 5% sequential increase [7][17] - Full-year sales for 2024 totaled $867 million, slightly below the record set in 2023, marking the second-highest sales in company history [8] - Q4 net income was $34 million, contributing to a full-year recurring income of $131 million, which indicates strong cash flow [11][12] - Gross margin for Q4 remained flat year-over-year at 37%, while operating margins were strong at 25% [20][21] - The total cash and short-term investments increased by $128 million to $641 million, a 25% year-over-year growth [12][24] Business Line Data and Key Metrics Changes - IC revenue increased by 5% quarter-over-quarter, driven by a 21% surge in high-end sales, while mainstream demand saw a slight reduction [17][18] - FPD revenue improved by 7% sequentially, with strong mainstream growth, although high-end demand remained flat [19] - The strongest demand by node was for 22-28 nanometers and sub-14 nanometers, including specialty EUV business [18] Market Data and Key Metrics Changes - Demand for IC masks turned positive, particularly for high-end designs in Asia and the US, driven by VisionEdge AI chips [8][9] - The FPD mask demand is influenced by new designs and larger display sizes, particularly G10.5%+ panels [10] Company Strategy and Development Direction - The company plans to invest $200 million in CapEx for 2025, focusing on expanding IC capacity in the US and accommodating regionalization trends [13][23] - The company aims to leverage its competitive advantages and maintain its market-leading position in the photomask industry [15][28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the photomask industry's growth trajectory, driven by regionalization, AI, and advanced semiconductor designs [41][43] - The company anticipates first-quarter revenue to be in the range of $208 million to $216 million, accounting for typical seasonality [27] Other Important Information - The company authorized an increase in share repurchase from $32 million to $100 million as part of its capital allocation strategy [25][26] - Total debt decreased by 27%, with $18 million remaining, expected to be paid off at maturity [24][25] Q&A Session Summary Question: Increase in operating expenses - Operating expenses increased due to higher SG&A and R&D costs, with approximately half of the increase being non-recurring [34] Question: Details on R&D spending - R&D spending was driven by a robust pipeline of new projects, including a 7nm node optical project and EUV high-NA program [35][36] Question: CapEx for 2025 - Most of the $200 million CapEx is earmarked for new capacity, focusing on the US market, with expansions within existing sites [38] Question: Industry growth outlook - Management is optimistic about the photomask industry's growth, driven by regionalization and AI applications [41][43]

Financial Performance - Full year fiscal 2024 revenue was $866.9 million, down 3% from the previous year[4] - GAAP net income for fiscal 2024 was $130.7 million, or $2.09 per diluted share, compared to $125.5 million, or $2.03 per diluted share in 2023[4] - Fourth quarter revenue was $222.6 million, down 2% year-over-year but up 6% sequentially[5] - Integrated Circuits (IC) revenue for fiscal 2024 was $638.1 million, down 2%, while Flat Panel Displays (FPD) revenue was $228.8 million, down 5%[4] - Non-GAAP net income for the fourth quarter was $37.1 million, or $0.59 per diluted share, compared to $37.2 million, or $0.60 per diluted share in the same quarter last year[5] - Net income for the year ended October 31, 2024, was $183,848 thousand, a decrease of 7.9% compared to $199,634 thousand in the previous year[15] - Non-GAAP net income attributable to Photronics, Inc. shareholders for the year ended October 31, 2024, was $127,590 thousand, slightly up from $126,012 thousand in the previous year[17] - GAAP diluted earnings per share for the year ended October 31, 2024, was $2.09, compared to $2.03 in the previous year, indicating an increase of 2.9%[17] Cash Flow and Investments - Cash generated from operating activities in the fourth quarter was $68.4 million, with $43.2 million invested in organic growth through capital expenditures[5] - Net cash provided by operating activities was $261,444 thousand, down from $302,176 thousand, reflecting a decline of 13.5%[15] - Cash and cash equivalents at the end of the period increased to $601,243 thousand, compared to $501,867 thousand at the end of the previous year, marking a rise of 19.8%[15] - Cash and short-term investments at the end of the fourth quarter were $640.7 million, with debt at $18.0 million[5] Assets and Liabilities - Total current assets increased to $931,062 thousand in October 2024, up from $785,450 thousand in October 2023, representing a growth of 18.5%[13] - Total assets reached $1,712,059 thousand as of October 31, 2024, an increase of 12.2% from $1,526,221 thousand in October 2023[13] - Current liabilities decreased marginally to $183,811 thousand from $185,223 thousand, a reduction of 0.8%[13] - Long-term debt remained relatively stable at $25 thousand, compared to $17,998 thousand in the previous year, indicating a significant reduction in long-term liabilities[13] Future Outlook - For the first quarter of fiscal 2025, the company expects revenue to be between $208 million and $216 million[6] - The company is optimistic about demand trends continuing into 2025, driven by megatrends such as AI and supply chain regionalization[3] Operational Overview - The company operates 11 manufacturing facilities across Asia, Europe, and North America, employing approximately 1,878 people[8] - The weighted-average number of common shares outstanding on a diluted basis was 62,391 for the year ended October 31, 2024, compared to 61,755 in the previous year[17]

| --- | --- | --- | --- | --- | |--------------------------------------------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | Q4 2024 Financial Results Conference Call | | | | | | December 11, 2024 | | | | | PHOTRONICS, INC. Safe Harbor Statement 2 This presentation and some of our comments during this presentation may contain projections or other forward-looking statements regarding future events, our future financial performance, and/or the future performance of the industry. These ...

Core Viewpoint - Photronics, Inc. reported a decline in revenue for fiscal year 2024 but showed sequential growth in the fourth quarter, driven by strong demand in Integrated Circuits (IC) and Flat Panel Displays (FPD) [2][3][4]. Full Year Fiscal 2024 Results - Total revenue for fiscal year 2024 was $866.9 million, a decrease of 3% from the previous year [3]. - GAAP net income attributable to shareholders was $130.7 million, or $2.09 per diluted share, compared to $125.5 million, or $2.03 per diluted share in 2023 [3]. - Non-GAAP net income attributable to shareholders was $127.6 million, or $2.05 per diluted share, compared to $126.0 million, or $2.04 per diluted share in 2023 [3]. - IC revenue was $638.1 million, down 2%, while FPD revenue was $228.8 million, down 5% [3]. - Cash generated from operating activities was $261.4 million, with $130.9 million invested in organic growth through capital expenditures [3]. Fourth Quarter Fiscal 2024 Results - Revenue for the fourth quarter was $222.6 million, down 2% year-over-year but up 6% sequentially [4]. - GAAP net income attributable to shareholders was $33.9 million, or $0.54 per diluted share, compared to $44.6 million, or $0.72 per diluted share in the fourth quarter of 2023 [4]. - Non-GAAP net income attributable to shareholders was $37.1 million, or $0.59 per diluted share, compared to $37.2 million, or $0.60 per diluted share in the fourth quarter of 2023 [4]. - IC revenue was $163.7 million, down 1% year-over-year but up 5% sequentially, while FPD revenue was $58.9 million, down 7% year-over-year but up 7% sequentially [4]. - Cash generated from operating activities was $68.4 million, with $43.2 million invested in organic growth through capital expenditures [4]. First Quarter Fiscal 2025 Guidance - For the first quarter of fiscal 2025, Photronics expects revenue to be between $208 million and $216 million, and non-GAAP net income attributable to shareholders to be between $0.43 and $0.49 per diluted share [5]. Company Overview - Photronics is a leading manufacturer of photomasks for integrated circuits and flat panel displays, with over 50 years of experience in the industry [7][8]. - As of October 31, 2024, the company employed approximately 1,878 people and operated 11 manufacturing facilities across Asia, Europe, and North America [8].