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].

Core Viewpoint - Photronics (PLAB) is expected to report its first-quarter fiscal 2025 results on February 26, with anticipated revenues between $208 million and $216 million and non-GAAP earnings between 43 cents and 19 cents [1][2]. Group 1: Financial Performance Expectations - For the upcoming quarter, PLAB's performance is likely to benefit from strong sales in the Integrated Circuit (IC) and Flat Panel Display (FPD) segments, with a notable 21% increase in high-end IC mask sales in the previous quarter [2][3]. - The demand for high-end photomasks is expected to be driven by growth in nodes such as 22-28 nanometers and sub-14 nanometers, particularly in the specialty Extreme Ultraviolet business [4]. - The FPD segment is also projected to see strong demand due to the increased adoption of AMOLED and LTPS display technologies, which require advanced photomasks [4][5]. Group 2: Market Dynamics and Challenges - Despite the anticipated growth, PLAB's first-quarter performance may be negatively impacted by seasonal factors, including the Chinese New Year slowdown and reduced demand for advanced mobile displays [5]. - Year-to-date, PLAB shares have declined by 7.6%, underperforming the Zacks Computer & Technology sector, which has seen a return of 0.9% [6]. - The company has outperformed peers such as Hoya and Dai Nippon Printing, which have experienced larger declines of 16.8% and 13.6%, respectively, as well as the Semiconductor Equipment - Photomasks industry peer Fujifilm, which has seen a 23.6% drop [7]. Group 3: Investment Outlook - Despite strong sales in high-end IC and growth in the FPD segment, PLAB faces challenges from sluggish semiconductor industry trends, geopolitical uncertainties, and macroeconomic headwinds that may affect financial performance [8]. - Currently, Photronics holds a Zacks Rank 3 (Hold), suggesting that investors should wait for a more favorable time to accumulate the stock [9].

Core Viewpoint - Photronics, Inc. is set to announce its financial results for the first quarter of fiscal 2025 on February 26, 2025, before market opening [1] Company Overview - Photronics is a leading global manufacturer of photomasks for integrated circuits (IC) and flat panel displays (FPD), utilizing high precision quartz plates that contain microscopic images of electronic circuits [3] - The company has been a trusted supplier for over 55 years and operates 11 strategically located manufacturing facilities across Asia, Europe, and North America [3] Upcoming Events - A public conference call will be held on the same day as the financial results announcement at 8:30 a.m. Eastern time, where management will address questions regarding financial performance, business conditions, and industry outlook [2] - The call will be broadcast live and available on-demand on the Photronics website, with registration suggested 15 minutes prior to the start time for those wishing to participate in the Q&A [2]

Core Viewpoint - Photronics (PLAB) is currently trading at a significant discount, with a Value Score of A, and a forward 12-month Price/Earnings ratio of 10.6X, which is lower than its median of 11.53X and the sector average of 26.99X [1][2]. Group 1: Financial Performance and Guidance - PLAB's shares have declined 17.5% over the trailing 12 months, underperforming the broader sector's appreciation of 29.5% [5]. - For Q1 fiscal 2025, PLAB expects revenues between $208 million and $216 million, with an operating margin of 23% to 25% and earnings between 43 cents and 49 cents per share [8]. - The Zacks Consensus Estimate for fiscal 2025 earnings is $2.30 per share, reflecting a 4.5% increase over the past 60 days and a 12.2% year-over-year growth [9]. Group 2: Market Trends and Demand - Despite sluggish semiconductor industry trends, the demand for PLAB's chips in AI, IoT, 5G, and consumer products is expected to improve in 2025 [2]. - The increasing demand for high-end chips supporting AI is anticipated to drive growth for PLAB, particularly in complex advanced leading-edge nodes [11]. - PLAB has seen improved demand for high-end integrated circuits (ICs) in Q4 fiscal 2024, primarily driven by high-end designs in Asia [12]. Group 3: Strategic Developments - PLAB is expanding its footprint in China with new facilities, capitalizing on the region's growth in semiconductor and display production [14]. - The company plans to invest $200 million in 2025 to expand U.S. IC manufacturing capacity, supported by improved liquidity with cash and short-term investments totaling $640.7 million [16]. - PLAB has returned $130 million to shareholders since 2018, with $100 million remaining under the current share repurchase authorization [17]. Group 4: Conclusion - Photronics is positioned for growth with an expanding global presence and strong market share, making it attractive for investors due to its undervaluation [18].

Core Viewpoint - Photronics, Inc. has appointed George Macricostas as Executive Chairman, effective January 6, 2025, marking a significant leadership transition within the company [1][2]. Company Leadership - George Macricostas has over 30 years of experience in technical and management roles, having been on the Photronics Board since 2002 and previously serving as Chairman of the Compensation Committee [2]. - With this appointment, David Garcia will succeed Macricostas in his committee roles, and both George and Constantine Macricostas will no longer be considered independent directors, leaving a Board of Directors of nine members, six of whom are independent [2]. Background of George Macricostas - George Macricostas was the Founder, Chairman, and CEO of RagingWire Data Centers, guiding the company through a two-stage sale to NTT of Japan in 2014 and 2018 [3]. - He previously held a senior vice president position at Photronics, overseeing the company's IT infrastructure [3]. Company Overview - Photronics is a leading manufacturer of photomasks for integrated circuits (IC) and flat panel displays (FPD), with over 50 years of experience in the industry [5]. - The company operates 11 manufacturing facilities strategically located in Asia, Europe, and North America [5].

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].