Financial Data and Key Metrics Changes - The company achieved second quarter sales of $211 million, which was in the middle of the guidance range, representing a 3% year-over-year decline [7][16] - Non-GAAP diluted EPS was reported at $0.40, while diluted GAAP EPS attributable to shareholders was $0.15 [20] - Gross margin was 37%, in line with the quarterly average over the past three years, and operating margin improved to 26%, above guidance [19][20] Business Line Data and Key Metrics Changes - Integrated Circuit (IC) revenue was $156 million, down 3% year-over-year, with high-end revenue increasing 2% year-over-year, representing 38% of IC revenue [16][19] - Flat Panel Display (FPD) revenue was $55 million, declining 2% year-over-year, with seasonal demand expected to uplift later in the quarter [18][19] Market Data and Key Metrics Changes - Revenue from IC joint ventures in China and Taiwan remained healthy, while revenue from the U.S. declined sequentially due to lower-end design node weakness [19] - The company noted a broad-based weakness in mainstream markets, particularly in Europe, which is heavily reliant on automotive and industrial microcontrollers [30] Company Strategy and Development Direction - The company is focusing on capacity expansion in the U.S. to support reshoring semiconductor production and is strategically positioned to benefit from the transition to higher-end nodes [8][11] - The management emphasized the importance of geographic footprint as a strategic asset to mitigate tariff costs and support global customers [12][19] Management Comments on Operating Environment and Future Outlook - Management expressed caution regarding near-term demand due to macroeconomic uncertainties and tariff dynamics, expecting third quarter revenue to be in the range of $200 million to $208 million [23][47] - The company remains optimistic about the long-term health and growth potential, as indicated by the $72 million spent on share repurchases [22][48] Other Important Information - The CEO announced retirement after three years, with George Makrokastas appointed as the new CEO, focusing on operational execution and profitable growth [12][14] - The company plans to spend $200 million in CapEx for fiscal 2025, with a focus on capacity, capability, and end-of-life tool initiatives [21] Q&A Session Summary Question: Insights on mainstream business and supply-demand dynamics - Management noted that the mainstream market remains weak due to low wafer fab utilization among aged fab customers, particularly in power, industrial, and consumer sectors [25][26] Question: Weakness in Asia and its impact - The weakness is not confined to Asia; it is broad-based, with Europe showing significant weakness due to its reliance on automotive and industrial applications [30] Question: Year-over-year earnings impact - The largest impact on earnings year-over-year is attributed to pricing pressures in the mainstream market, although product mix strategies are being employed to mitigate this [32][33] Question: Priorities for the new CEO - The new CEO indicated a focus on cost structure, driving revenue, and gaining market share, emphasizing an orderly transition rather than a wholesale change [39][40] Question: Capacity expansion versus regionalization - The company will evaluate opportunities in the U.S. while balancing growth in Asia, particularly in response to geopolitical issues and reshoring efforts [46] Question: Share repurchase strategy - The company will remain opportunistic with the existing share repurchase authorization and will consider future expansions based on investment opportunities [48]

Core Viewpoint - Photronics, Inc. reported its second-quarter fiscal 2025 financial results, revealing a decline in revenue and net income, while announcing a leadership transition with Dr. Frank Lee stepping down as CEO and Mr. George Macricostas taking over the role [1][2][8]. Financial Performance - Revenue for the second quarter was $211.0 million, a decrease of 3% year-over-year and 1% sequentially [8]. - GAAP net income attributable to Photronics, Inc. shareholders was $8.9 million, or $0.15 per diluted share, compared to $36.3 million, or $0.58 per diluted share, in the second quarter of 2024 [8]. - Non-GAAP net income attributable to Photronics, Inc. shareholders was $24.3 million, or $0.40 per diluted share, down from $28.7 million, or $0.46 per diluted share, in the same quarter last year [8][19]. - Integrated Circuit (IC) revenue was $155.9 million, down 3% year-over-year but up 1% sequentially [8]. - Flat Panel Display (FPD) revenue was $55.1 million, down 2% year-over-year and 5% sequentially [8]. Cash Flow and Shareholder Returns - Cash generated from operating activities was $31.5 million, with $60.5 million invested in organic growth through capital expenditures [8]. - The company returned $72 million to shareholders through stock repurchases during the quarter [2][8]. - Cash, cash equivalents, and short-term investments at the end of the quarter totaled $558.4 million [8]. Guidance for Future Performance - For the third quarter of fiscal 2025, Photronics expects revenue to be between $200 million and $208 million, with non-GAAP net income attributable to shareholders projected to be between $0.35 and $0.41 per diluted share [4]. Leadership Transition - Dr. Frank Lee will continue to manage the company's Asia operations and remain Chairman and President of Photronics' PDMC subsidiary in Taiwan [1][2]. - Mr. George Macricostas has assumed the role of Chief Executive Officer while remaining Chairman of the Board [1][2]. Company Overview - Photronics is a leading manufacturer of photomasks for integrated circuits and flat panel displays, operating 11 manufacturing facilities across Asia, Europe, and North America [6].

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 ...