Photronics(PLAB) - 2025 Q1 - Quarterly Report

Revenue and Profitability - Revenue for Q1 FY25 was $212.1 million, a decrease of 4.7$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$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].