☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Connecticut | 06-0854886 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
15 Secor Road, Brookfield, Connecticut | 06804 | |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code | (203) 775-9000 |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
COMMON | PLAB | NASDAQ Global Select Market |
Large Accelerated Filer | ☒ | Accelerated Filer | ☐ | Non-Accelerated Filer | ☐ |
Smaller Reporting Company | ☐ | Emerging | ☐ |
3 | ||
4 | ||
PART I. | FINANCIAL INFORMATION | |
Item 1. | 5 | |
5 | ||
6 | ||
7 | ||
8 | ||
10 | ||
11 | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II. | OTHER INFORMATION | |
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 6. |
AMOLED | Active-matrix organic light-emitting diode. A technology used in mobile devices. | |
Application-specific IC | An integrated circuit customized for a particular use, rather than intended for general-purpose use | |
ASC | Accounting Standards Codification | |
ASP | Average Selling Price | |
ASU | Accounting Standards Update | |
Chip stacking | Placement of | |
COVID-19 | ||
DNP | Dai Nippon Printing Co., Ltd. | |
EUV | A wafer lithography technology using the industry standard extreme ultraviolet (EUV) wavelength. EUV photomasks function by selectively reflecting or blocking light, in contrast to conventional photomasks which function by selectively transmitting or blocking light | |
Exchange Act | The Securities Exchange Act of 1934 (as amended) | |
FASB | Financial Accounting Standards Board | |
Form 10-K | Annual Report on Form 10-K | |
Form 10-Q | Quarterly Report on Form 10-Q | |
FPDs | Flat-panel displays, or “displays” | |
Generation | In reference to | |
High-end (photomasks) | For IC, photomasks that are 28nm or smaller; for FPD, AMOLED, G10.5+, and LTPS photomasks | |
ICs | Integrated circuits, or semiconductors | |
LIBOR | London Inter-Bank Offered Rate | |
LTPS | Low-Temperature Poly Silicon, a polycrystalline silicon synthesized at relatively low temperatures; polycrystalline silicon in thin-film transistors (TFTs) are used in liquid-crystal display (LCD) flat panels and to drive organic light-emitting diode (OLED) displays | |
MLA | Master Lease Agreement | |
Optical proximity correction | A photolithography enhancement technique applied to compensate for the limitations of light to maintain the edge placement integrity of an original design, for further processing to an etched pattern. | |
PDMCX | Xiamen American Japan Photronics Mask Co., Ltd., a joint venture of Photronics and DNP | |
Phase-shift photomasks | Photomasks that take advantage of the interference generated by phase differences to improve image resolution in photolithography | |
Pure-play foundry | A company that does not produce a significant volume of IC products of its own design, but rather operates IC fabrication plants dedicated to producing ICs for other companies | |
RMB | Chinese renminbi | |
ROU (assets) | Right-of-use asset | |
SEC | Securities and Exchange Commission | |
Securities Act | The Securities Act of 1933 (as amended) | |
Sputtering | The bombardment of a material with energetic particles to cause microscopic particles of the material to eject from its surface. | |
U.S. GAAP | Accounting principles generally accepted in the United States of America | |
Wafer | A wafer, or silicon wafer, is a thin slice of semiconductor material that, in the fabrication of microelectronics, serves as the substrate for microelectronic devices built in and upon the wafer |
May 1, 2022 | October 31, 2021 | April 30, 2023 | October 31, 2022 | |||||||||||||
ASSETS | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 329,282 | $ | 276,670 | $ | 367,485 | $ | 319,680 | ||||||||
Accounts receivable, net of allowance of $1,107 in 2022 and $1,218 in 2021 | 190,259 | 174,447 | ||||||||||||||
Short-term investments | 45,431 | 38,820 | ||||||||||||||
Accounts receivable, net of allowance of $1,172 in 2023 and $1,002 in 2022 | 214,464 | 198,147 | ||||||||||||||
Inventories | 57,940 | 55,249 | 54,940 | 50,753 | ||||||||||||
Other current assets | 52,864 | 44,250 | 37,796 | 37,252 | ||||||||||||
Total current assets | 630,345 | 550,616 | 720,116 | 644,652 | ||||||||||||
Property, plant and equipment, net | 659,881 | 696,553 | 699,917 | 643,873 | ||||||||||||
Deferred income taxes | 23,731 | 24,353 | 19,302 | 19,816 | ||||||||||||
Other assets | 17,930 | 22,680 | 11,690 | 7,489 | ||||||||||||
Total assets | $ | 1,331,887 | $ | 1,294,202 | $ | 1,451,025 | $ | 1,315,830 | ||||||||
LIABILITIES AND EQUITY | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Current portion of long-term debt | $ | 12,410 | $ | 22,248 | $ | 7,017 | $ | 10,024 | ||||||||
Accounts payable | 78,341 | 81,534 | 92,672 | 79,566 | ||||||||||||
Accrued liabilities | 95,720 | 72,366 | 85,479 | 104,207 | ||||||||||||
Total current liabilities | 186,471 | 176,148 | 185,168 | 193,797 | ||||||||||||
Long-term debt | 70,138 | 89,446 | 21,322 | 32,310 | ||||||||||||
Other liabilities | 25,048 | 28,046 | 39,851 | 27,634 | ||||||||||||
Total liabilities | 246,341 | 253,741 | ||||||||||||||
Total liabilities | 281,657 | 293,640 | ||||||||||||||
Commitments and contingencies | 0 | 0 | | |||||||||||||
Equity: | ||||||||||||||||
Preferred stock, $0.01 par value, 2,000 shares authorized, NaN issued and outstanding | 0 | 0 | ||||||||||||||
Common stock, $0.01 par value, 150,000 shares authorized, 60,637 shares issued and outstanding at May 1, 2022, and 60,024 shares issued and outstanding at October 31, 2021 | 606 | 600 | ||||||||||||||
Preferred stock, $0.01 par value, 2,000 shares authorized, none issued and outstanding | - | - | ||||||||||||||
Common stock, $0.01 par value, 150,000 shares authorized, 61,185 shares issued and outstanding at April 30, 2023, and 60,791 shares issued and outstanding at October 31, 2022 | 612 | 608 | ||||||||||||||
Additional paid-in capital | 489,368 | 484,672 | 497,391 | 493,741 | ||||||||||||
Retained earnings | 367,344 | 317,849 | 489,549 | 435,634 | ||||||||||||
Accumulated other comprehensive (loss) income | (22,919 | ) | 20,571 | |||||||||||||
Accumulated other comprehensive loss | (59,505 | ) | (98,456 | ) | ||||||||||||
Total Photronics, Inc. shareholders’ equity | 834,399 | 823,692 | 928,047 | 831,527 | ||||||||||||
Noncontrolling interests | 215,831 | 176,870 | 276,637 | 230,562 | ||||||||||||
Total equity | 1,050,230 | 1,000,562 | 1,204,684 | 1,062,089 | ||||||||||||
Total liabilities and equity | $ | 1,331,887 | $ | 1,294,202 | $ | 1,451,025 | $ | 1,315,830 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||
May 1, 2022 | May 2, 2021 | May 1, 2022 | May 2, 2021 | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||
April 30, 2023 | May 1, 2022 | April 30, 2023 | May 1, 2022 | |||||||||||||||||||||||||||||
Revenue | $ | 204,509 | $ | 159,763 | $ | 394,336 | $ | 311,830 | $ | 229,306 | $ | 204,509 | $ | 440,397 | $ | 394,336 | ||||||||||||||||
Cost of goods sold | 134,289 | 120,514 | 264,253 | 242,052 | 140,904 | 134,289 | 275,918 | 264,253 | ||||||||||||||||||||||||
Gross profit | 70,220 | 39,249 | 130,083 | 69,778 | 88,402 | 70,220 | 164,479 | 130,083 | ||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||
Selling, general and administrative | 16,613 | 14,067 | 32,340 | 28,120 | ||||||||||||||||||||||||||||
Selling, general, and administrative | 17,878 | 16,613 | 34,696 | 32,340 | ||||||||||||||||||||||||||||
Research and development | 4,206 | 4,375 | 10,145 | 9,085 | 3,479 | 4,206 | 6,781 | 10,145 | ||||||||||||||||||||||||
Total operating expenses | 20,819 | 18,442 | 42,485 | 37,205 | 21,357 | 20,819 | 41,477 | 42,485 | ||||||||||||||||||||||||
Operating income | 49,401 | 20,807 | 87,598 | 32,573 | 67,045 | 49,401 | 123,002 | 87,598 | ||||||||||||||||||||||||
Non-operating income (expense): | ||||||||||||||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||
Foreign currency transactions impact, net | 7,844 | (2,055 | ) | 13,112 | (674 | ) | 10,718 | 7,844 | (6,226 | ) | 13,112 | |||||||||||||||||||||
Interest expense, net of subsidies | 15 | 1,246 | (880 | ) | 423 | |||||||||||||||||||||||||||
Interest income and other income and expense, net | 162 | 37 | 496 | 159 | ||||||||||||||||||||||||||||
Interest income and other income, net | 2,987 | 162 | 5,570 | 496 | ||||||||||||||||||||||||||||
Interest expense | (134 | ) | 15 | (198 | ) | (880 | ) | |||||||||||||||||||||||||
Income before income tax provision | 57,422 | 20,035 | 100,326 | 32,481 | 80,616 | 57,422 | 122,148 | 100,326 | ||||||||||||||||||||||||
Income tax provision | 14,393 | 3,714 | 25,571 | 6,651 | 21,343 | 14,393 | 33,925 | 25,571 | ||||||||||||||||||||||||
Net income | 43,029 | 16,321 | 74,755 | 25,830 | 59,273 | 43,029 | 88,223 | 74,755 | ||||||||||||||||||||||||
Net income attributable to noncontrolling interests | 15,597 | 5,795 | 24,259 | 7,268 | 19,344 | 15,597 | 34,308 | 24,259 | ||||||||||||||||||||||||
Net income attributable to Photronics, Inc. shareholders | $ | 27,432 | $ | 10,526 | $ | 50,496 | $ | 18,562 | $ | 39,929 | $ | 27,432 | $ | 53,915 | $ | 50,496 | ||||||||||||||||
Earnings per share: | ||||||||||||||||||||||||||||||||
Basic | $ | 0.45 | $ | 0.17 | $ | 0.84 | $ | 0.30 | $ | 0.65 | $ | 0.45 | $ | 0.88 | $ | 0.84 | ||||||||||||||||
Diluted | $ | 0.45 | $ | 0.17 | $ | 0.83 | $ | 0.30 | $ | 0.65 | $ | 0.45 | $ | 0.88 | $ | 0.83 | ||||||||||||||||
Weighted-average number of common shares outstanding: | ||||||||||||||||||||||||||||||||
Basic | 60,606 | 62,054 | 60,382 | 62,265 | 61,138 | 60,606 | 61,016 | 60,382 | ||||||||||||||||||||||||
Diluted | 61,145 | 62,568 | 61,041 | 62,786 | 61,507 | 61,145 | 61,489 | 61,041 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||
May 1, 2022 | May 2, 2021 | May 1, 2022 | May 2, 2021 | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||
April 30, 2023 | May 1, 2022 | April 30, 2023 | May 1, 2022 | |||||||||||||||||||||||||||||
Net income | $ | 43,029 | $ | 16,321 | $ | 74,755 | $ | 25,830 | $ | 59,273 | $ | 43,029 | $ | 88,223 | $ | 74,755 | ||||||||||||||||
Other comprehensive (loss) income, net of tax of $0: | ||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | (44,118 | ) | 3,778 | (53,949 | ) | 22,066 | (39,813 | ) | (44,118 | ) | 50,707 | (53,949 | ) | |||||||||||||||||||
Other | 129 | 21 | 166 | 21 | 66 | 129 | 11 | 166 | ||||||||||||||||||||||||
Net other comprehensive (loss) income | (43,989 | ) | 3,799 | (53,783 | ) | 22,087 | (39,747 | ) | (43,989 | ) | 50,718 | (53,783 | ) | |||||||||||||||||||
Comprehensive (loss) income | (960) | 20,120 | 20,972 | 47,917 | ||||||||||||||||||||||||||||
Comprehensive income (loss) | 19,526 | (960 | ) | 138,941 | 20,972 | |||||||||||||||||||||||||||
Less: comprehensive income attributable to noncontrolling interests | 5,092 | 6,431 | 13,966 | 12,121 | 14,682 | 5,092 | 46,075 | 13,966 | ||||||||||||||||||||||||
Comprehensive (loss) income attributable to Photronics, Inc. shareholders | $ | (6,052 | ) | $ | 13,689 | $ | 7,006 | $ | 35,796 | |||||||||||||||||||||||
Comprehensive income (loss) attributable to Photronics, Inc. shareholders | $ | 4,844 | $ | (6,052 | ) | $ | 92,866 | $ | 7,006 |
Three Months Ended May 1, 2022 | Three Months Ended April 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Photronics, Inc. Shareholders | Photronics, Inc. Shareholders | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Non- controlling Interests | Total Equity | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Non- controlling Interests | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 30, 2022 | 60,564 | $ | 606 | $ | 487,342 | $ | 339,912 | $ | 0 | $ | 10,565 | $ | 200,741 | $ | 1,039,166 | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 29, 2023 | 61,102 | $ | 611 | $ | 494,954 | $ | 449,620 | $ | - | $ | (24,420 | ) | $ | 261,955 | $ | 1,182,720 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net income | - | 0 | 0 | 27,432 | 0 | 0 | 15,597 | 43,029 | - | - | - | 39,929 | - | - | 19,344 | 59,273 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | - | 0 | 0 | 0 | 0 | (33,484 | ) | (10,505 | ) | (43,989 | ) | - | - | - | - | - | (35,085 | ) | (4,662 | ) | (39,747 | ) | ||||||||||||||||||||||||||||||||||||||||||
Shares issued under equity plans | 73 | 0 | 442 | 0 | 0 | 0 | 0 | 442 | 83 | 1 | 428 | - | - | - | - | 429 | ||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense | - | 0 | 1,584 | 0 | 0 | 0 | 0 | 1,584 | - | - | 2,009 | - | - | - | - | 2,009 | ||||||||||||||||||||||||||||||||||||||||||||||||
Contribution from noncontrolling interest | - | 0 | 0 | 0 | 0 | 0 | 9,998 | 9,998 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at May 1, 2022 | 60,637 | $ | 606 | $ | 489,368 | $ | 367,344 | $ | 0 | $ | (22,919 | ) | $ | 215,831 | $ | 1,050,230 | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at April 30, 2023 | 61,185 | $ | 612 | $ | 497,391 | $ | 489,549 | $ | - | $ | (59,505 | ) | $ | 276,637 | $ | 1,204,684 |
Three Months Ended May 2, 2021 | ||||||||||||||||||||||||||||||||
Photronics, Inc. Shareholders | ||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in | Retained | Treasury | Accumulated Other Comprehensive | Non- controlling | Total | ||||||||||||||||||||||||||
Shares | Amount | Capital | Earnings | Stock | Income | Interests | Equity | |||||||||||||||||||||||||
Balance at January 31, 2021 | 63,506 | $ | 635 | $ | 508,974 | $ | 287,073 | $ | (13,209 | ) | $ | 32,029 | $ | 162,994 | $ | 978,496 | ||||||||||||||||
Net income | - | 0 | 0 | 10,526 | 0 | 0 | 5,795 | 16,321 | ||||||||||||||||||||||||
Other comprehensive income | - | 0 | 0 | 0 | 0 | 3,163 | 636 | 3,799 | ||||||||||||||||||||||||
Shares issued under equity plans | 100 | 1 | 819 | 0 | 0 | 0 | 0 | 820 | ||||||||||||||||||||||||
Share-based compensation expense | - | 0 | 1,422 | 0 | 0 | 0 | 0 | 1,422 | ||||||||||||||||||||||||
Purchase of treasury stock | 0 | 0 | 0 | 0 | (10,041 | ) | 0 | 0 | (10,041 | ) | ||||||||||||||||||||||
Balance at May 2, 2021 | 63,606 | $ | 636 | $ | 511,215 | $ | 297,599 | $ | (23,250 | ) | $ | 35,192 | $ | 169,425 | $ | 990,817 |
Three Months Ended May 1, 2022 | ||||||||||||||||||||||||||||||||
Photronics, Inc. Shareholders | ||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in | Retained | Treasury | Accumulated Other Comprehensive | Non- controlling | Total | ||||||||||||||||||||||||||
Shares | Amount | Capital | Earnings | Stock | Income (Loss) | Interests | Equity | |||||||||||||||||||||||||
Balance at January 30, 2022 | 60,564 | $ | 606 | $ | 487,342 | $ | 339,912 | $ | - | $ | 10,565 | $ | 200,741 | $ | 1,039,166 | |||||||||||||||||
Net income | - | - | - | 27,432 | - | - | 15,597 | 43,029 | ||||||||||||||||||||||||
Other comprehensive loss | - | - | - | - | - | (33,484 | ) | (10,505 | ) | (43,989 | ) | |||||||||||||||||||||
Shares issued under equity plans | 73 | - | 442 | - | - | - | - | 442 | ||||||||||||||||||||||||
Share-based compensation expense | - | - | 1,584 | - | - | - | - | 1,584 | ||||||||||||||||||||||||
Contribution from noncontrolling interest | - | - | - | - | - | - | 9,998 | 9,998 | ||||||||||||||||||||||||
Balance at May 1, 2022 | 60,637 | $ | 606 | $ | 489,368 | $ | 367,344 | $ | - | $ | (22,919 | ) | $ | 215,831 | $ | 1,050,230 |
Six Months Ended May 1, 2022 | ||||||||||||||||||||||||||||||||
Photronics, Inc. Shareholders | ||||||||||||||||||||||||||||||||
Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Non- controlling Interests | Total Equity | |||||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||
Balance at October 31, 2021 | 60,024 | $ | 600 | $ | 484,672 | $ | 317,849 | $ | 0 | $ | 20,571 | $ | 176,870 | $ | 1,000,562 | |||||||||||||||||
Net income | - | 0 | 0 | 50,496 | 0 | 0 | 24,259 | 74,755 | ||||||||||||||||||||||||
Other comprehensive loss | - | 0 | 0 | 0 | 0 | (43,490 | ) | (10,293 | ) | (53,783 | ) | |||||||||||||||||||||
Shares issued under equity plans | 801 | 7 | 3,175 | 0 | 0 | 0 | 0 | 3,182 | ||||||||||||||||||||||||
Share-based compensation expense | - | 0 | 3,041 | 0 | 0 | 0 | 0 | 3,041 | ||||||||||||||||||||||||
Contribution from noncontrolling interest | - | 0 | 0 | 0 | 0 | 0 | 24,995 | 24,995 | ||||||||||||||||||||||||
Purchase of treasury stock | 0 | 0 | 0 | 0 | (2,522 | ) | 0 | 0 | (2,522 | ) | ||||||||||||||||||||||
Retirement of treasury stock | (188 | ) | (1 | ) | (1,520 | ) | (1,001 | ) | 2,522 | 0 | 0 | 0 | ||||||||||||||||||||
Balance at May 1, 2022 | 60,637 | $ | 606 | $ | 489,368 | $ | 367,344 | $ | 0 | $ | (22,919 | ) | $ | 215,831 | $ | 1,050,230 |
Six Months Ended April 30, 2023 | ||||||||||||||||||||||||||||||||
Photronics, Inc. Shareholders | ||||||||||||||||||||||||||||||||
Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Non- controlling Interests | Total Equity | |||||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||
Balance at October 31, 2022 | 60,791 | $ | 608 | $ | 493,741 | $ | 435,634 | $ | - | $ | (98,456 | ) | $ | 230,562 | $ | 1,062,089 | ||||||||||||||||
Net income | - | - | - | 53,915 | - | - | 34,308 | 88,223 | ||||||||||||||||||||||||
Other comprehensive Income | - | - | - | - | - | 38,951 | 11,767 | 50,718 | ||||||||||||||||||||||||
Shares issued under equity plans | 394 | 4 | (180 | ) | - | - | - | - | (176 | ) | ||||||||||||||||||||||
Share-based compensation expense | - | - | 3,830 | - | - | - | - | 3,830 | ||||||||||||||||||||||||
Balance at April 30, 2023 | 61,185 | $ | 612 | $ | 497,391 | $ | 489,549 | $ | - | $ | (59,505 | ) | $ | 276,637 | $ | 1,204,684 |
Six Months Ended May 2, 2021 | Six Months Ended May 1, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Photronics, Inc. Shareholders | Photronics, Inc. Shareholders | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in | Retained | Treasury | Accumulated Other Comprehensive | Non- controlling | Total | Common Stock | Additional Paid-in | Retained | Treasury | Accumulated Other Comprehensive | Non- controlling | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Capital | Earnings | Stock | Income | Interests | Equity | Shares | Amount | Capital | Earnings | Stock | Income (Loss) | Interests | Equity | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance at October 31, 2020 | 63,138 | $ | 631 | $ | 507,336 | $ | 279,037 | $ | 0 | $ | 17,958 | $ | 157,304 | $ | 962,266 | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance at October 31, 2021 | 60,024 | $ | 600 | $ | 484,672 | $ | 317,849 | $ | - | $ | 20,571 | $ | 176,870 | $ | 1,000,562 | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income | - | 0 | 0 | 18,562 | 0 | 0 | 7,268 | 25,830 | - | - | - | 50,496 | - | - | 24,259 | 74,755 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | - | 0 | 0 | 0 | 0 | 17,234 | 4,853 | 22,087 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | - | - | - | - | - | (43,490 | ) | (10,293 | ) | (53,783 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued under equity plans | 468 | 5 | 1,156 | 0 | 0 | 0 | 0 | 1,161 | 801 | 7 | 3,175 | - | - | - | - | 3,182 | ||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense | - | 0 | 2,723 | 0 | 0 | 0 | 0 | 2,723 | - | - | 3,041 | - | - | - | - | 3,041 | ||||||||||||||||||||||||||||||||||||||||||||||||
Contribution from noncontrolling interest | - | - | - | - | - | - | 24,995 | 24,995 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | - | 0 | 0 | 0 | (23,250 | ) | 0 | 0 | (23,250 | ) | - | - | - | - | (2,522 | ) | - | - | (2,522 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Retirement of treasury stock | (188 | ) | (1 | ) | (1,520 | ) | (1,001 | ) | 2,522 | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at May 2, 2021 | 63,606 | $ | 636 | $ | 511,215 | $ | 297,599 | $ | (23,250 | ) | $ | 35,192 | $ | 169,425 | $ | 990,817 | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at May 1, 2022 | 60,637 | $ | 606 | $ | 489,368 | $ | 367,344 | $ | - | $ | (22,919 | ) | $ | 215,831 | $ | 1,050,230 |
Six Months Ended | Six Months Ended | |||||||||||||||
May 1, 2022 | May 2, 2021 | April 30, 2023 | May 1, 2022 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income | $ | 74,755 | $ | 25,830 | $ | 88,223 | $ | 74,755 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 41,405 | 47,121 | 39,085 | 41,405 | ||||||||||||
Share-based compensation | 3,041 | 2,723 | 3,830 | 3,041 | ||||||||||||
Changes in assets and liabilities: | ||||||||||||||||
Accounts receivable | (25,122 | ) | (5,655 | ) | (5,952 | ) | (25,122 | ) | ||||||||
Inventories | (5,081 | ) | 2,266 | (1,905 | ) | (5,081 | ) | |||||||||
Other current assets | (10,858 | ) | (8,591 | ) | 1,382 | (10,858 | ) | |||||||||
Accounts payable, accrued liabilities, and other | 25,149 | (5,475 | ) | (14,986 | ) | 25,149 | ||||||||||
Net cash provided by operating activities | 103,289 | 58,219 | 109,677 | 103,289 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchases of property, plant and equipment | (34,809 | ) | (73,516 | ) | (57,728 | ) | (34,809 | ) | ||||||||
Purchases of available-for-sale debt securities | (9,837 | ) | - | |||||||||||||
Proceeds from maturities of available-for-sale debt securities | 4,000 | - | ||||||||||||||
Government incentives | 1,394 | 5,775 | 1,393 | 1,394 | ||||||||||||
Other | (199 | ) | (157 | ) | (88 | ) | (199 | ) | ||||||||
Net cash used in investing activities | (33,614 | ) | (67,898 | ) | (62,260 | ) | (33,614 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||||
Repayments of debt | (27,571 | ) | (8,636 | ) | (14,720 | ) | (27,571 | ) | ||||||||
Purchases of treasury stock | (2,522 | ) | (23,250 | ) | - | (2,522 | ) | |||||||||
Contribution from noncontrolling interest | 24,995 | 0 | - | 24,995 | ||||||||||||
Proceeds from share-based arrangements | 4,384 | 1,180 | 730 | 4,384 | ||||||||||||
Proceeds from long-term debt | 0 | 12,439 | ||||||||||||||
Net settlements of restricted stock awards | (1,452 | ) | (371 | ) | (1,252 | ) | (1,452 | ) | ||||||||
Net cash used in financing activities | (2,166 | ) | (18,638 | ) | (15,242 | ) | (2,166 | ) | ||||||||
Effects of exchange rate changes on cash, cash equivalents, and restricted cash | (14,917 | ) | 5,686 | 15,621 | (14,917 | ) | ||||||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash | 52,592 | (22,631 | ) | |||||||||||||
Net increase in cash, cash equivalents, and restricted cash | 47,796 | 52,592 | ||||||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 279,680 | 281,602 | 322,409 | 279,680 | ||||||||||||
Cash, cash equivalents, and restricted cash at end of period | 332,272 | 258,971 | 370,205 | 332,272 | ||||||||||||
Less: Ending restricted cash | 2,990 | 3,006 | 2,720 | 2,990 | ||||||||||||
Cash and cash equivalents at end of period | $ | 329,282 | $ | 255,965 | $ | 367,485 | $ | 329,282 | ||||||||
Supplemental disclosures of non-cash information: | ||||||||||||||||
Supplemental disclosure of non-cash information: | ||||||||||||||||
Accruals for property, plant and equipment purchased during the period | $ | 5,737 | $ | 20,533 | $ | 14,420 | $ | 5,737 |
- | Maturing within three months or less from the date of purchase | Cash and cash equivalents |
- | Maturing, as of the date of purchase, more than three months, but with remaining maturities of less than one year, from the balance sheet date | Short-term investments |
- | Maturing one year or more from the balance sheet date | Long-term marketable investments |
April 30, 2023 | October 31, 2022 | |||||||||||||||||||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Carrying Value | Amortized Cost | Unrealized Gains | Unrealized Losses | Carrying Value | |||||||||||||||||||||||||
Government securities | $ | 45,492 | $ | - | $ | (61 | ) | $ | 45,431 | $ | 38,911 | $ | - | $ | (91 | ) | $ | 38,820 |
May 1, 2022 | October 31, 2021 | |||||||||||||||
April 30, 2023 | October 31, 2022 | |||||||||||||||
Raw materials | $ | 54,501 | $ | 54,019 | $ | 53,642 | $ | 49,326 | ||||||||
Work in process | 3,398 | 1,121 | 1,203 | 1,408 | ||||||||||||
Finished goods | 41 | 109 | 95 | 19 | ||||||||||||
$ | 54,940 | $ | 50,753 | |||||||||||||
$ | 57,940 | $ | 55,249 |
May 1, 2022 | October 31, 2021 | |||||||||||||||
April 30, 2023 | October 31, 2022 | |||||||||||||||
Land | $ | 11,927 | $ | 12,442 | $ | 11,620 | $ | 11,134 | ||||||||
Buildings and improvements | 176,559 | 181,922 | 190,134 | 168,024 | ||||||||||||
Machinery and equipment | 1,873,926 | 1,961,474 | 1,884,235 | 1,769,478 | ||||||||||||
Leasehold improvements | 20,540 | 21,751 | 19,835 | 18,802 | ||||||||||||
Furniture, fixtures and office equipment | 15,210 | 15,534 | ||||||||||||||
Furniture, fixtures, and office equipment | 15,523 | 14,355 | ||||||||||||||
Construction in progress | 49,714 | 35,009 | 91,204 | 90,846 | ||||||||||||
2,147,876 | 2,228,132 | 2,212,551 | 2,072,639 | |||||||||||||
Accumulated depreciation and amortization | (1,487,995 | ) | (1,531,579 | ) | (1,512,634 | ) | (1,428,766 | ) | ||||||||
$ | 699,917 | $ | 643,873 | |||||||||||||
$ | 659,881 | $ | 696,553 |
May 1, 2022 | October 31, 2021 | |||||||||||||||
April 30, 2023 | October 31, 2022 | |||||||||||||||
Machinery and equipment | $ | 42,760 | $ | 42,760 | $ | 42,817 | $ | 42,760 | ||||||||
Accumulated amortization | (3,355 | ) | (1,933 | ) | (6,206 | ) | (4,784 | ) | ||||||||
$ | 36,611 | $ | 37,976 | |||||||||||||
$ | 39,405 | $ | 40,827 |
Three Months Ended | Six Months Ended | |||||||||||||||
May 1, 2022 | May 2, 2021 | May 1, 2022 | May 2, 2021 | |||||||||||||
Depreciation and amortization expense | $ | 20,506 | $ | 22,271 | $ | 41,229 | $ | 44,857 |
Three Months Ended | Six Months Ended | |||||||||||||||
April 30, 2023 | May 1, 2022 | April 30, 2023 | May 1, 2022 | |||||||||||||
Depreciation Expense | $ | 19,880 | $ | 20,506 | $ | 38,908 | $ | 41,229 |
Three Months Ended | Six Months Ended | |||||||||||||||
May 1, 2022 | May 2, 2021 | May 1, 2022 | May 2, 2021 | |||||||||||||
Net income from PDMCX | $ | 4,895 | $ | 2,256 | $ | 6,772 | $ | 2,194 |
Three Months Ended | Six Months Ended | |||||||||||||||
April 30, 2023 | May 1, 2022 | April 30, 2023 | May 1, 2022 | |||||||||||||
Net income from PDMCX | $ | 6,652 | $ | 4,895 | $ | 12,569 | $ | 6,772 |
May 1, 2022 | October 31, 2021 | April 30, 2023 | October 31, 2022 | |||||||||||||||||||||||||||||
Classification | Carrying Amount | Photronics Interest | Carrying Amount | Photronics Interest | Carrying Amount | Photronics Interest | Carrying Amount | Photronics Interest | ||||||||||||||||||||||||
Current assets | $ | 117,292 | $ | 58,658 | $ | 59,745 | $ | 29,879 | $ | 128,626 | $ | 64,326 | $ | 127,542 | $ | 63,784 | ||||||||||||||||
Noncurrent assets | 134,914 | 67,469 | 137,799 | 68,913 | 145,471 | 72,750 | 119,392 | 59,708 | ||||||||||||||||||||||||
Total assets | 252,206 | 126,127 | 197,544 | 98,792 | 274,097 | 137,076 | 246,934 | 123,492 | ||||||||||||||||||||||||
Current liabilities | 37,439 | 18,723 | 26,559 | 13,282 | 50,925 | 25,468 | 51,274 | 25,643 | ||||||||||||||||||||||||
Noncurrent liabilities | 29,613 | 14,809 | 42,917 | 21,463 | 1,484 | 742 | 9,161 | 4,581 | ||||||||||||||||||||||||
Total liabilities | 67,052 | 33,532 | 69,476 | 34,745 | 52,409 | 26,210 | 60,435 | 30,224 | ||||||||||||||||||||||||
Net assets | $ | 185,154 | $ | 92,595 | $ | 128,068 | $ | 64,047 | $ | 221,688 | $ | 110,866 | $ | 186,499 | $ | 93,268 |
As of April 30, 2023 | Xiamen Project Loans | Finance Leases | Total | |||||||||
Principal due: | ||||||||||||
Next 12 months | $ | - | $ | 7,017 | $ | 7,017 | ||||||
Months 13 – 24 | $ | - | $ | 21,290 | $ | 21,290 | ||||||
Months 25 – 36 | - | 12 | 12 | |||||||||
Months 37 – 48 | - | 12 | 12 | |||||||||
Months 49 – 60 | - | 8 | 8 | |||||||||
Long-term debt | - | 21,322 | 21,322 | |||||||||
Total debt | $ | - | $ | 28,339 | $ | 28,339 | ||||||
Interest rate at balance sheet date | N/A | % | N/A | |||||||||
Basis spread on interest rates | 0.00 | N/A | ||||||||||
Interest rate reset | Quarterly | N/A | ||||||||||
Maturity date | December 2025 | N/A | ||||||||||
Periodic payment amount | Varies as loans mature(1) | Varies as leases mature | ||||||||||
Periodic payment frequency | Semiannual, on individual loans | Monthly | ||||||||||
Loan collateral (carrying amount) | $ | N/A | $ | 36,611 | (2) |
(1) | During the three-month period ended April 30, 2023, we repaid the entire balance of 26.4 million RMB (approximately $3.9 million) remaining on the loan, of which, 2.0 million RMB was due to be paid in June 2025 and 24.4 million RMB was due to be paid in December 2025. |
(2) | Represents the carrying amount at the balance sheet date of the related ROU assets, in which the lessors have secured interests. |
As of October 31, 2022 | Xiamen Project Loans | Xiamen Working Capital Loans | Finance Leases | Total | ||||||||||||
Principal due: | ||||||||||||||||
Next 12 months | $ | - | $ | 3,512 | $ | 6,512 | $ | 10,024 | ||||||||
Months 13 – 24 | $ | - | $ | - | $ | 6,610 | $ | 6,610 | ||||||||
Months 25 – 36 | 1,098 | - | 17,961 | 19,059 | ||||||||||||
Months 37 – 48 | 6,641 | - | - | 6,641 | ||||||||||||
Long-term debt | $ | 7,739 | $ | - | $ | 24,571 | $ | 32,310 | ||||||||
Interest rate at balance sheet date | 4.30% - 4.45 | % | 4.46 | % | N/A | |||||||||||
Basis spread on interest rates | 0.00 | 76 | N/A | |||||||||||||
Interest rate reset | Quarterly | Monthly/Annually | N/A | |||||||||||||
Maturity date | December 2025 | July 2023 | N/A | |||||||||||||
Periodic payment amount | Varies as loans mature (1) | Increases as loans mature | Varies as leases mature | |||||||||||||
Periodic payment frequency | Semiannual, on individual loans | Semiannual, on individual loans | Monthly | |||||||||||||
Loan collateral (carrying amount) | $ | 70,705 | N/A | $ | 37,976 | (2) |
As of May 1, 2022 | Xiamen Project Loans | Xiamen Working Capital Loans | Hefei Equipment Loan | Finance Leases | Total | |||||||||||||||
Principal due: | ||||||||||||||||||||
Next 12 months | $ | 0 | $ | 969 | $ | 4,540 | $ | 6,901 | $ | 12,410 | ||||||||||
Months 13 – 24 | $ | 6,266 | $ | 3,390 | $ | 4,540 | $ | 6,560 | $ | 20,756 | ||||||||||
Months 25 – 36 | 9,837 | 0 | 7,567 | 21,279 | 38,683 | |||||||||||||||
Months 37 – 48 | 9,080 | 0 | 1,619 | 0 | 10,699 | |||||||||||||||
Long-term debt | $ | 25,183 | $ | 3,390 | $ | 13,726 | $ | 27,839 | $ | 70,138 | ||||||||||
Total debt | $ | 25,183 | $ | 4,359 | $ | 18,266 | $ | 34,740 | $ | 82,548 | ||||||||||
Interest rate at balance sheet date | 4.60 | % | 4.61 | % | 4.20 | % | (3) | |||||||||||||
Basis spread on interest rates | 0.00 | 76.00 | (45.00 | ) | N/A | |||||||||||||||
Interest rate reset | Quarterly | Monthly/Annually | Annually | N/A | ||||||||||||||||
Maturity date | December 2025 | July 2023 | September 2025 | (3) | ||||||||||||||||
Periodic payment amount | Varies as loans mature | Increases as loans mature | Varies (1) | (3) | ||||||||||||||||
Periodic payment frequency | Semiannual, on individual loans | Semiannual, on individual loans | Semiannual(2) | Monthly | ||||||||||||||||
Loan collateral (carrying amount) | $ | 82,920 | N/A | $ | 81,024 | $ | 39,405 | (4) |
(1) | During the three-month period ended October 31, 2022, we repaid 81.0 million RMB (approximately $11.5 million) that had contractual maturity dates ranging from December 2023 through June 2025. |
(2) | Represents the carrying amount at the balance sheet date of the related ROU assets, in which the lessors have secured interests. |
As of October 31, 2021 | Xiamen Project Loans | Xiamen Working Capital Loans | Hefei Equipment Loan | Finance Leases | Total | |||||||||||||||
Principal due: | ||||||||||||||||||||
Next 12 months | $ | 2,068 | $ | 8,197 | $ | 4,694 | $ | 7,289 | $ | 22,248 | ||||||||||
Months 13 – 24 | $ | 10,071 | $ | 4,005 | $ | 4,693 | $ | 6,512 | $ | 25,281 | ||||||||||
Months 25 – 36 | 10,278 | 0 | 6,257 | 6,610 | 23,145 | |||||||||||||||
Months 37 – 48 | 9,902 | 0 | 5,585 | 17,961 | 33,448 | |||||||||||||||
Months 49 – 60 | 7,572 | 0 | 0 | 0 | 7,572 | |||||||||||||||
Long-term debt | $ | 37,823 | $ | 4,005 | $ | 16,535 | $ | 31,083 | $ | 89,446 | ||||||||||
Total | $ | 39,891 | $ | 12,202 | $ | 21,229 | $ | 38,372 | $ | 111,694 | ||||||||||
Interest rate at balance sheet date | 4.65 | % | 4.53% - 4.61 | % | 4.20 | % | (3) | |||||||||||||
Basis spread on interest rates | 0.00 | 67.75 - 76.00 | (45.00 | ) | N/A | |||||||||||||||
Interest rate reset | Quarterly | Monthly/Annually | Annually | N/A | ||||||||||||||||
Maturity date | December 2025 | July 2023 | September 2025 | (3) | ||||||||||||||||
Periodic payment amount | Varies as loans mature | Increases as loans mature | Varies(1) | (3) | ||||||||||||||||
Periodic payment frequency | Semiannual, on individual loans | Semiannual, on individual loans | Semiannual(2) | Monthly | ||||||||||||||||
Loan collateral (carrying amount) | $ | 90,096 | N/A | $ | 86,487 | $ | 40,826 | (4) |
Classification | May 1, 2022 | October 31, 2021 | April 30, 2023 | October 31, 2022 | ||||||||||||
Contract assets | ||||||||||||||||
Contract Assets | ||||||||||||||||
Other current assets | $ | 13,815 | $ | 9,859 | $ | 21,385 | $ | 15,752 | ||||||||
Contract liabilities | ||||||||||||||||
Contract Liabilities | ||||||||||||||||
Accrued liabilities | $ | 25,613 | $ | 14,717 | $ | 19,224 | $ | 18,872 | ||||||||
Other liabilities | 5,204 | 5,197 | 13,189 | 4,989 | ||||||||||||
$ | 30,817 | $ | 19,914 | $ | 32,413 | $ | 23,861 |
Three Months Ended | Six Months Ended | |||||||||||||||
May 1, 2022 | May 2, 2021 | May 1, 2022 | May 2, 2021 | |||||||||||||
Revenue recognized from beginning liability | $ | 11,460 | $ | 1,333 | $ | 7,278 | $ | 3,829 |
Three Months Ended | Six Months Ended | |||||||||||||||
April 30, 2023 | May 1, 2022 | April 30, 2023 | May 1, 2022 | |||||||||||||
Revenue recognized from beginning liability | $ | 11,228 | $ | 11,460 | $ | 7,875 | $ | 7,278 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||
May 1, 2022 | May 2, 2021 | May 1, 2022 | May 2, 2021 | |||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||
Revenue by Product Type | April 30, 2023 | May 1, 2022 | April 30, 2023 | May 1, 2022 | ||||||||||||||||||||||||||||
IC | ||||||||||||||||||||||||||||||||
High-end | $ | 51,362 | $ | 41,259 | $ | 97,896 | $ | 78,039 | $ | 43,920 | $ | 51,362 | $ | 91,923 | $ | 98,285 | ||||||||||||||||
Mainstream | 94,437 | 70,732 | 177,664 | 138,908 | 123,134 | 94,437 | 231,720 | 177,275 | ||||||||||||||||||||||||
Total IC | $ | 145,799 | $ | 111,991 | $ | 275,560 | $ | 216,947 | $ | 167,054 | $ | 145,799 | $ | 323,643 | $ | 275,560 | ||||||||||||||||
FPD | ||||||||||||||||||||||||||||||||
High-end | $ | 46,610 | $ | 39,401 | $ | 92,886 | $ | 74,046 | $ | 51,888 | $ | 46,610 | $ | 97,579 | $ | 92,886 | ||||||||||||||||
Mainstream | 12,100 | 8,371 | 25,890 | 20,837 | 10,364 | 12,100 | 19,175 | 25,890 | ||||||||||||||||||||||||
Total FPD | $ | 58,710 | $ | 47,772 | $ | 118,776 | $ | 94,883 | $ | 62,252 | $ | 58,710 | $ | 116,754 | $ | 118,776 | ||||||||||||||||
$ | 204,509 | $ | 159,763 | $ | 394,336 | $ | 311,830 | $ | 229,306 | $ | 204,509 | $ | 440,397 | $ | 394,336 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||
May 1, 2022 | May 2, 2021 | May 1, 2022 | May 2, 2021 | |||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||
Revenue by Geographic Origin* | April 30, 2023 | May 1, 2022 | April 30, 2023 | May 1, 2022 | ||||||||||||||||||||||||||||
Taiwan | $ | 69,852 | $ | 59,002 | $ | 137,693 | $ | 115,592 | $ | 80,448 | $ | 69,852 | $ | 156,017 | $ | 137,693 | ||||||||||||||||
China | 53,691 | 23,730 | 99,645 | 44,727 | 65,215 | 53,691 | 124,148 | 99,645 | ||||||||||||||||||||||||
Korea | 40,769 | 40,239 | 80,283 | 79,022 | 41,372 | 40,769 | 79,204 | 80,283 | ||||||||||||||||||||||||
United States | 30,335 | 27,150 | 57,511 | 53,754 | 32,495 | 30,335 | 62,377 | 57,511 | ||||||||||||||||||||||||
Europe | 9,506 | 9,256 | 18,420 | 17,832 | 9,276 | 9,506 | 17,722 | 18,420 | ||||||||||||||||||||||||
Other | 356 | 386 | 784 | 903 | 500 | 356 | 929 | 784 | ||||||||||||||||||||||||
$ | 204,509 | $ | 159,763 | $ | 394,336 | $ | 311,830 | $ | 229,306 | $ | 204,509 | $ | 440,397 | $ | 394,336 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||
May 1, 2022 | May 2, 2021 | May 1, 2022 | May 2, 2021 | |||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||
Revenue by Timing of Recognition | April 30, 2023 | May 1, 2022 | April 30, 2023 | May 1, 2022 | ||||||||||||||||||||||||||||
Over time | $ | 192,770 | $ | 144,697 | $ | 363,034 | $ | 285,982 | $ | 215,376 | $ | 192,770 | $ | 412,541 | $ | 363,034 | ||||||||||||||||
At a point in time | 11,739 | 15,066 | 31,302 | 25,848 | 13,930 | 11,739 | 27,856 | 31,302 | ||||||||||||||||||||||||
$ | 204,509 | $ | 159,763 | $ | 394,336 | $ | 311,830 | $ | 229,306 | $ | 204,509 | $ | 440,397 | $ | 394,336 |
Classification | May 1, 2022 | October 31, 2021 | ||||||
ROU Assets – Operating Leases | ||||||||
Other assets | $ | 4,191 | $ | 5,581 | ||||
ROU Assets – Finance Leases | ||||||||
Property, plant and equipment, net | $ | 39,405 | $ | 40,827 | ||||
Lease Liabilities – Operating Leases | ||||||||
Accrued liabilities | $ | 1,850 | $ | 2,273 | ||||
Other liabilities | 2,280 | 3,246 | ||||||
$ | 4,130 | $ | 5,519 | |||||
Lease Liabilities – Finance Leases | ||||||||
Current portion of long-term debt | $ | 6,901 | $ | 7,289 | ||||
Long-term debt | 27,839 | 31,083 | ||||||
$ | 34,740 | $ | 38,372 |
Operating Leases | Finance Leases | |||||||
Remainder of fiscal year 2022 | $ | 1,092 | $ | 3,947 | ||||
2023 | 1,297 | 6,938 | ||||||
2024 | 773 | 6,938 | ||||||
2025 | 608 | 18,013 | ||||||
2026 | 373 | 0 | ||||||
Thereafter | 144 | 0 | ||||||
Total lease payments | 4,287 | 35,836 | ||||||
Imputed interest | (157 | ) | (1,096 | ) | ||||
Lease liabilities | $ | 4,130 | $ | 34,740 |
Three Months Ended | Six Months Ended | |||||||||||||||
May 1, 2022 | May 2, 2021 | May 1, 2022 | May 2, 2021 | |||||||||||||
Operating lease costs | $ | 569 | $ | 724 | $ | 1,158 | $ | 1,389 | ||||||||
Short-term lease costs | $ | 142 | $ | 39 | $ | 263 | $ | 86 | ||||||||
Variable lease costs | $ | 153 | $ | 157 | $ | 276 | $ | 301 | ||||||||
Interest on finance lease liabilities | $ | 92 | $ | 166 | $ | 230 | $ | 201 | ||||||||
Amortization of ROU assets | $ | 711 | $ | 455 | $ | 1,421 | $ | 455 |
May 1, 2022 | October 31, 2021 | |||||||||||||||
Classification | Weighted-average remaining lease term (in years) | Weighted-average discount rate | Weighted-average remaining lease term (in years) | Weighted-average discount rate | ||||||||||||
Operating leases | 3.3 | 2.4 | % | 3.5 | 2.4 | % | ||||||||||
Finance leases | 2.7 | 1.5 | % | 3.3 | 1.5 | % |
Three Months Ended | Six Months Ended | |||||||||||||||
May 1, 2022 | May 2, 2021 | May 1, 2022 | May 2, 2021 | |||||||||||||
Operating cash flows used for operating leases | $ | 589 | $ | 627 | $ | 1,150 | $ | 1,229 | ||||||||
Operating cash flows used for finance leases | $ | 134 | $ | 166 | $ | 277 | $ | 201 | ||||||||
Financing cash flows used for finance leases | $ | 1,601 | $ | 864 | $ | 3,632 | $ | 864 | ||||||||
ROU assets obtained in exchange for operating lease obligations | $ | 1 | $ | 99 | $ | 32 | $ | 367 | ||||||||
ROU assets obtained in exchange for finance lease obligations | $ | 0 | $ | 7,200 | $ | 0 | $ | 42,672 |
Three Months Ended | Six Months Ended | |||||||||||||||
April 30, 2023 | May 1, 2022 | April 30, 2023 | May 1, 2022 | |||||||||||||
Expense reported in: | ||||||||||||||||
Cost of goods sold | $ | 288 | $ | 182 | $ | 570 | $ | 324 | ||||||||
Selling, general, and administrative | 1,531 | 1,243 | 2,908 | 2,424 | ||||||||||||
Research and development | 190 | 159 | 352 | 293 | ||||||||||||
Total expense incurred | $ | 2,009 | $ | 1,584 | $ | 3,830 | $ | 3,041 | ||||||||
Expense by award type: | ||||||||||||||||
Restricted stock awards | $ | 1,974 | $ | 1,316 | $ | 3,738 | $ | 2,683 | ||||||||
Stock options | - | 221 | 1 | 259 | ||||||||||||
Employee stock purchase plan | 35 | 47 | 91 | 99 | ||||||||||||
Total expense incurred | $ | 2,009 | $ | 1,584 | $ | 3,830 | $ | 3,041 | ||||||||
Income tax benefits of share-based compensation | $ | 207 | $ | 104 | $ | 361 | $ | 188 | ||||||||
Share-based compensation cost capitalized | $ | - | $ | - | $ | - | $ | - |
Three Months Ended | Six Months Ended | |||||||||||||||
May 1, 2022 | May 2, 2021 | May 1, 2022 | May 2, 2021 | |||||||||||||
Expense reported in: | ||||||||||||||||
Cost of goods sold | $ | 182 | $ | 97 | $ | 324 | $ | 208 | ||||||||
Selling, general and administrative | 1,243 | 1,207 | 2,424 | 2,304 | ||||||||||||
Research and development | 159 | 118 | 293 | 211 | ||||||||||||
Total expense incurred | $ | 1,584 | $ | 1,422 | $ | 3,041 | $ | 2,723 | ||||||||
Expense by award type: | ||||||||||||||||
Restricted stock awards | $ | 1,316 | $ | 1,313 | $ | 2,683 | $ | 2,484 | ||||||||
Stock options | 221 | 54 | 259 | 138 | ||||||||||||
ESPP | 47 | 55 | 99 | 101 | ||||||||||||
Total expense incurred | $ | 1,584 | $ | 1,422 | $ | 3,041 | $ | 2,723 | ||||||||
Income tax benefits of share-based compensation | $ | 104 | $ | 62 | $ | 188 | $ | 108 | ||||||||
Share-based compensation cost capitalized | $ | 0 | $ | 0 | $ | 0 | $ | 0 |
Three Months Ended | Six Months Ended | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||
May 1, 2022 | May 2, 2021 | May 1, 2022 | May 2, 2021 | April 30, 2023 | May 1, 2022 | April 30, 2023 | May 1, 2022 | |||||||||||||||||||||||||
Number of shares granted in period | 0 | 15,000 | 535,400 | 556,200 | - | - | 786,500 | 535,400 | ||||||||||||||||||||||||
Weighted-average grant-date fair value of awards (in dollars per share) | $ | 0 | $ | 12.65 | $ | 19.28 | $ | 11.17 | $ | - | $ | - | $ | 16.77 | $ | 19.28 | ||||||||||||||||
Compensation cost not yet recognized | $ | 10,779 | $ | 9,762 | $ | 10,779 | $ | 9,762 | $ | 16,419 | $ | 10,779 | $ | 16,419 | $ | 10,779 | ||||||||||||||||
Weighted-average amortization period for cost not yet recognized (in years) | 2.8 | 2.9 | 2.8 | 2.9 | 3.0 | 2.8 | 3.0 | 2.8 | ||||||||||||||||||||||||
Shares outstanding at balance sheet date | 891,429 | 1,022,327 | 891,429 | 1,022,327 | 1,328,572 | 891,429 | 1,328,572 | 891,429 |
Three Months Ended | Six Months Ended | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||
May 1, 2022 | May 2, 2021 | May 1, 2022 | May 2, 2021 | April 30, 2023 | May 1, 2022 | April 30, 2023 | May 1, 2022 | |||||||||||||||||||||||||
Number of options granted in period | 0 | 0 | 0 | 0 | - | - | - | - | ||||||||||||||||||||||||
Cash received from option exercised | $ | 438 | $ | 309 | $ | 4,149 | $ | 967 | ||||||||||||||||||||||||
Cash received from options exercised | $ | 20 | $ | 438 | $ | 583 | $ | 4,149 | ||||||||||||||||||||||||
Compensation cost not yet recognized | $ | 52 | $ | 232 | $ | 52 | $ | 232 | $ | - | $ | 52 | $ | - | $ | 52 | ||||||||||||||||
Weighted-average amortization period for cost not yet recognized (in years) | 0.7 | 1.4 | 0.7 | 1.4 | - | 0.7 | - | 0.7 |
Options | Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (in years) | Aggregate Intrinsic Value | |||||||
Outstanding at May 1, 2022 | 718,213 | $ | 9.90 | 3.5 | $ | 3,657 | |||||
Exercisable at May 1, 2022 | 693,987 | $ | 9.90 | 3.4 | $ | 3,531 |
Options | Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (in years) | Aggregate Intrinsic Value | ||||||||||||
Outstanding and exercisable at April 30, 2023 | 526,926 | $ | 10.11 | 2.99 | $ | 2,293 |
Reporting Period | U.S. Statutory Tax Rates | Photronics Effective Tax Rates | Primary Reasons for Differences | |||
Three months ended April 30, 2023 | 21.0% | 26.5% | Non-recognition of the tax benefit of losses that, in certain jurisdictions, have been offset by valuation allowances, non-U.S. pre-tax income being taxed at higher statutory rates in the non-U.S. jurisdictions, and the establishment of uncertain tax positions in non-U.S. jurisdictions. | |||
Three months ended May 1, 2022 | 21.0% | 25.1% | Non-recognition of the tax benefit of losses that, in certain jurisdictions, have been offset by valuation allowances, non-U.S. pre-tax income being taxed at higher statutory rates in the non-U.S. jurisdictions, and the establishment of uncertain tax positions in non-U.S. jurisdictions. | |||
Six months ended April 30, 2023 | 21.0% | 27.8% | Non-recognition of the tax benefit of losses that, in certain jurisdictions, have been offset by valuation allowances, non-U.S. pre-tax income being taxed at higher statutory rates in the non-U.S. jurisdictions, and the establishment of uncertain tax positions in non-U.S. jurisdictions. | |||
Six months ended May 1, 2022 | 21.0% | 25.5% | Non-recognition of the tax benefit of losses that, in certain jurisdictions, have been offset by valuation allowances, non-U.S. pre-tax income being taxed at higher statutory rates in the non-U.S. jurisdictions, and the establishment of uncertain tax positions in non-U.S. jurisdictions. |
May 1, 2022 | October 31, 2021 | |||||||||||||||
April 30, 2023 | October 31, 2022 | |||||||||||||||
Unrecognized tax benefits related to uncertain tax positions | $ | 4,629 | $ | 3,757 | $ | 7,128 | $ | 5,599 | ||||||||
Unrecognized tax benefits that, if recognized, would impact the effective tax rate | $ | 4,629 | $ | 3,757 | $ | 7,128 | $ | 5,599 | ||||||||
Accrued interest and penalties related to uncertain tax positions | $ | 357 | $ | 223 | $ | 549 | $ | 395 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||
May 1, 2022 | May 2, 2021 | May 1, 2022 | May 2, 2021 | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||
April 30, 2023 | May 1, 2022 | April 30, 2023 | May 1, 2022 | |||||||||||||||||||||||||||||
Net income attributable to Photronics, Inc. shareholders | $ | 27,432 | $ | 10,526 | $ | 50,496 | $ | 18,562 | $ | 39,929 | $ | 27,432 | $ | 53,915 | $ | 50,496 | ||||||||||||||||
Effect of dilutive securities | 0 | 0 | 0 | 0 | - | - | - | - | ||||||||||||||||||||||||
Earnings used for diluted earnings per share | $ | 27,432 | $ | 10,526 | $ | 50,496 | $ | 18,562 | $ | 39,929 | $ | 27,432 | $ | 53,915 | $ | 50,496 | ||||||||||||||||
Weighted-average common shares computations: | ||||||||||||||||||||||||||||||||
Weighted-average common shares used for basic earnings per share | 60,606 | 62,054 | 60,382 | 62,265 | 61,138 | 60,606 | 61,016 | 60,382 | ||||||||||||||||||||||||
Effect of dilutive securities: | ||||||||||||||||||||||||||||||||
Share-based payment awards | 539 | 514 | 659 | 521 | 369 | 539 | 473 | 659 | ||||||||||||||||||||||||
Potentially dilutive common shares | 539 | 514 | 659 | 521 | 369 | 539 | 473 | 659 | ||||||||||||||||||||||||
Weighted-average common shares used for diluted earnings per share | 61,145 | 62,568 | 61,041 | 62,786 | 61,507 | 61,145 | 61,489 | 61,041 | ||||||||||||||||||||||||
Basic earnings per share | $ | 0.45 | $ | 0.17 | $ | 0.84 | $ | 0.30 | $ | 0.65 | $ | 0.45 | $ | 0.88 | $ | 0.84 | ||||||||||||||||
Diluted earnings per share | $ | 0.45 | $ | 0.17 | $ | 0.83 | $ | 0.30 | $ | 0.65 | $ | 0.45 | $ | 0.88 | $ | 0.83 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||
May 1, 2022 | May 2, 2021 | May 1, 2022 | May 2, 2021 | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||
April 30, 2023 | May 1, 2022 | April 30, 2023 | May 1, 2022 | |||||||||||||||||||||||||||||
Share-based payment awards | 427 | 293 | 626 | 559 | 267 | 427 | 535 | 626 | ||||||||||||||||||||||||
Total potentially dilutive shares excluded | 427 | 293 | 626 | 559 | 267 | 427 | 535 | 626 |
Three Months Ended May 1, 2022 | ||||||||||||
Foreign Currency Translation Adjustments | Other | Total | ||||||||||
Balance at January 30, 2022 | $ | 11,451 | $ | (886 | ) | $ | 10,565 | |||||
Other comprehensive (loss) income | (44,118 | ) | 129 | (43,989 | ) | |||||||
Less: other comprehensive (loss) income attributable to noncontrolling interests | (10,570 | ) | 65 | (10,505 | ) | |||||||
Balance at May 1, 2022 | $ | (22,097 | ) | $ | (822 | ) | $ | (22,919 | ) |
Three Months Ended April 30, 2023 | ||||||||||||
Foreign Currency Translation Adjustments | Other | Total | ||||||||||
Balance at January 29, 2023 | $ | (23,737 | ) | $ | (683 | ) | $ | (24,420 | ) | |||
Other comprehensive (loss) income | (39,813 | ) | 66 | (39,747 | ) | |||||||
Less: Other comprehensive (loss) income attributable to noncontrolling interests | (4,760 | ) | 98 | (4,662 | ) | |||||||
Balance at April 30, 2023 | $ | (58,790 | ) | $ | (715 | ) | $ | (59,505 | ) |
Three Months Ended May 2, 2021 | ||||||||||||
Foreign Currency Translation Adjustments | Other | Total | ||||||||||
Balance at January 31, 2021 | $ | 32,900 | $ | (871 | ) | $ | 32,029 | |||||
Other comprehensive income | 3,778 | 21 | 3,799 | |||||||||
Less: other comprehensive income attributable to noncontrolling interests | 626 | 10 | 636 | |||||||||
Balance at May 2, 2021 | $ | 36,052 | $ | (860 | ) | $ | 35,192 |
Three Months Ended May 1, 2022 | ||||||||||||
Foreign Currency Translation Adjustments | Other | Total | ||||||||||
Balance at January 30, 2022 | $ | 11,451 | $ | (886 | ) | $ | 10,565 | |||||
Other comprehensive (loss) income | (44,118 | ) | 129 | (43,989 | ) | |||||||
Less: Other comprehensive (loss) income attributable to noncontrolling interests | (10,570 | ) | 65 | (10,505 | ) | |||||||
Balance at May 1, 2022 | $ | (22,097 | ) | $ | (822 | ) | $ | (22,919 | ) |
Six Months Ended May 1, 2022 | ||||||||||||
Foreign Currency Translation Adjustments | Other | Total | ||||||||||
Balance at October 31, 2021 | $ | 21,476 | $ | (905 | ) | $ | 20,571 | |||||
Other comprehensive (loss) income | (53,949 | ) | 166 | (53,783 | ) | |||||||
Less: other comprehensive (loss) income attributable to noncontrolling interests | (10,376 | ) | 83 | (10,293 | ) | |||||||
Balance at May 1, 2022 | $ | (22,097 | ) | $ | (822 | ) | $ | (22,919 | ) |
Six Months Ended April 30, 2023 | ||||||||||||
Foreign Currency Translation Adjustments | Other | Total | ||||||||||
Balance at October 31, 2022 | $ | (97,790 | ) | $ | (666 | ) | $ | (98,456 | ) | |||
Other comprehensive income | 50,707 | 11 | 50,718 | |||||||||
Less: Other comprehensive income attributable to noncontrolling interests | 11,707 | 60 | 11,767 | |||||||||
Balance at April 30, 2023 | $ | (58,790 | ) | $ | (715 | ) | $ | (59,505 | ) |
Six Months Ended May 2, 2021 | ||||||||||||
Foreign Currency Translation Adjustments | Other | Total | ||||||||||
Balance at October 31, 2020 | $ | 18,828 | $ | (870 | ) | $ | 17,958 | |||||
Other comprehensive income | 22,066 | 21 | 22,087 | |||||||||
Less: other comprehensive income attributable to noncontrolling interests | 4,842 | 11 | 4,853 | |||||||||
Balance at May 2, 2021 | $ | 36,052 | $ | (860 | ) | $ | 35,192 |
Six Months Ended May 1, 2022 | ||||||||||||
Foreign Currency Translation Adjustments | Other | Total | ||||||||||
Balance at October 31, 2021 | $ | 21,476 | $ | (905 | ) | $ | 20,571 | |||||
Other comprehensive (loss) income | (53,949 | ) | 166 | (53,783 | ) | |||||||
Less: Other comprehensive (loss) income attributable to noncontrolling interests | (10,376 | ) | 83 | (10,293 | ) | |||||||
Balance at May 1, 2022 | $ | (22,097 | ) | $ | (822 | ) | $ | (22,919 | ) |
Three Months Ended | Six Months Ended | |||||||||||||||
May 1, 2022 | May 2, 2021 | May 1, 2022 | May 2, 2021 | |||||||||||||
Number of shares repurchased | 0 | 797 | 188 | 2,019 | ||||||||||||
Cost of shares repurchased | $ | 0 | $ | 10,041 | $ | 2,522 | $ | 23,250 | ||||||||
Average price paid per share | $ | 0 | $ | 12.59 | $ | 13.43 | $ | 11.51 |
Three Months Ended | Six Months Ended | |||||||||||||||
April 30, 2023 | May 1, 2022 | April 30, 2023 | May 1, 2022 | |||||||||||||
Number of shares repurchased | - | - | - | 188 | ||||||||||||
Cost of shares repurchased | $ | - | $ | - | $ | - | $ | 2,522 | ||||||||
Average price paid per share | $ | - | $ | - | $ | - | $ | 13.43 |
Item 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||||
May 1, 2022 | January 30, 2022 | May 2, 2021 | May 1, 2022 | May 2, 2021 | April 30, | January 29, | May 1, | April 30, | May 1, | |||||||||||||||||||||||||||||||
2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||
Revenue | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Cost of goods sold | 65.7 | 68.5 | 75.4 | 67.0 | 77.6 | 61.4 | 64.0 | 65.7 | 62.7 | 67.0 | ||||||||||||||||||||||||||||||
Gross profit | 38.6 | 36.0 | 34.3 | 37.3 | 33.0 | |||||||||||||||||||||||||||||||||||
Gross profit | 34.3 | 31.5 | 24.6 | 33.0 | 22.4 | |||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | 8.1 | 8.3 | 8.8 | 8.2 | 9.0 | |||||||||||||||||||||||||||||||||||
Research and development expenses | 2.1 | 3.1 | 2.7 | 2.6 | 2.9 | |||||||||||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||||||||||
Selling, general, and administrative | 7.8 | 8.0 | 8.1 | 7.9 | 8.2 | |||||||||||||||||||||||||||||||||||
Research and development | 1.5 | 1.6 | 2.1 | 1.5 | 2.6 | |||||||||||||||||||||||||||||||||||
Operating income | 29.2 | 26.5 | 24.2 | 27.9 | 22.2 | |||||||||||||||||||||||||||||||||||
Operating income | 24.2 | 20.1 | 13.0 | 22.2 | 10.4 | |||||||||||||||||||||||||||||||||||
Non-operating income (expense), net | 3.9 | 2.5 | (0.5 | ) | 3.2 | - | ||||||||||||||||||||||||||||||||||
Other operating expense, net | 5.9 | (6.8 | ) | 3.9 | (0.2 | ) | 3.2 | |||||||||||||||||||||||||||||||||
Income before income tax provision | 28.1 | 22.6 | 12.5 | 25.4 | 10.4 | 35.2 | 19.7 | 28.1 | 27.7 | 25.4 | ||||||||||||||||||||||||||||||
Income tax provision | 7.0 | 5.9 | 2.3 | 6.5 | 2.1 | 9.3 | 6.0 | 7.0 | 7.7 | 6.5 | ||||||||||||||||||||||||||||||
Net income | 21.0 | 16.7 | 10.2 | 19.0 | 8.3 | 25.8 | 13.7 | 21.0 | 20.0 | 19.0 | ||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interests | 7.6 | 4.6 | 3.6 | 6.2 | 2.3 | 8.4 | 7.1 | 7.6 | 7.8 | 6.2 | ||||||||||||||||||||||||||||||
Net income attributable to Photronics, Inc. shareholders | 13.4 | % | 12.2 | % | 6.6 | % | 12.8 | % | 6.0 | % | 17.4 | % | 6.6 | % | 13.4 | % | 12.2 | % | 12.8 | % | ||||||||||||||||||||
Q2 FY22 from Q1 FY22 | Q2 FY22 from Q2 FY21 | YTD FY22 from YTD FY21 | ||||||||||||||||||||||||||||||
Revenue in Q2 FY22 | Increase (Decrease) | Percent Change | Increase (Decrease) | Percent Change | Revenue in YTD FY22 | Increase (Decrease) | Percent Change | |||||||||||||||||||||||||
IC | ||||||||||||||||||||||||||||||||
High-end * | $ | 51.4 | $ | 4.8 | 10.4 | % | $ | 10.1 | 24.5 | % | $ | 97.9 | $ | 19.9 | 25.4 | % | ||||||||||||||||
Mainstream | 94.4 | 11.2 | 13.5 | % | 23.7 | 33.5 | % | 177.7 | 38.8 | 27.9 | % | |||||||||||||||||||||
Total IC | $ | 145.8 | $ | 16.0 | 12.4 | % | $ | 33.8 | 30.2 | % | $ | 275.6 | $ | 58.6 | 27.0 | % | ||||||||||||||||
FPD | ||||||||||||||||||||||||||||||||
High-end * | $ | 46.6 | $ | 0.3 | 0.7 | % | $ | 7.2 | 18.3 | % | $ | 92.9 | $ | 18.8 | 25.4 | % | ||||||||||||||||
Mainstream | 12.1 | (1.7 | ) | (12.3 | )% | 3.7 | 44.6 | % | 25.9 | 5.1 | 24.2 | % | ||||||||||||||||||||
Total FPD | $ | 58.7 | $ | (1.4 | ) | (2.3 | )% | $ | 10.9 | 22.9 | % | $ | 118.8 | $ | 23.9 | 25.2 | % | |||||||||||||||
Total Revenue | $ | 204.5 | $ | 14.7 | 7.7 | % | $ | 44.7 | 28.0 | % | $ | 394.3 | $ | 82.5 | 26.5 | % | ||||||||||||||||
Q2 FY23 compared with Q1 FY23 | Q2 FY23 compared with Q2 FY22 | YTD FY23 compared with YTD FY22 | ||||||||||||||||||||||||||||||
Revenue in | Increase | Percent | Increase | Percent | Revenue in | Increase | Percent | |||||||||||||||||||||||||
Q2 FY23 | (Decrease) | Change | (Decrease) | Change | YTD FY23 | (Decrease) | Change | |||||||||||||||||||||||||
IC | ||||||||||||||||||||||||||||||||
High-end* | $ | 43.9 | $ | (4.1 | ) | (8.5 | )% | $ | (7.4 | ) | (14.5 | )% | $ | 91.9 | $ | (6.3 | ) | (6.5 | )% | |||||||||||||
Mainstream | 123.1 | 14.5 | 13.4 | % | 28.7 | 30.4 | % | 231.7 | 54.4 | 30.7 | % | |||||||||||||||||||||
Total IC | $ | 167.0 | $ | 10.4 | 6.7 | % | $ | 21.3 | 14.6 | % | 323.6 | $ | 48.1 | 17.4 | % | |||||||||||||||||
FPD | ||||||||||||||||||||||||||||||||
High-end* | $ | 51.9 | $ | 6.2 | 13.6 | % | $ | 5.2 | 11.3 | % | 97.6 | $ | 4.7 | 5.1 | % | |||||||||||||||||
Mainstream | 10.4 | 1.6 | 17.6 | % | (1.7 | ) | (14.3 | )% | 19.2 | (6.7 | ) | (25.9 | )% | |||||||||||||||||||
Total FPD | $ | 62.3 | $ | 7.8 | 14.2 | % | $ | 3.5 | 6.0 | % | 116.8 | $ | (2.0 | ) | (1.7 | )% | ||||||||||||||||
Total Revenue | $ | 229.3 | $ | 18.2 | 8.6 | % | $ | 24.8 | 12.1 | % | 440.4 | $ | 46.1 | 11.7 | % |
Q2 FY22 from Q1 FY22 | Q2 FY22 from Q2 FY21 | YTD FY22 from YTD FY21 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Q2 FY23 compared with Q1 FY23 | Q2 FY23 compared with Q2 FY22 | YTD FY23 from YTD22 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue in Q2 FY22 | Increase (Decrease) | Percent Change | Increase (Decrease) | Percent Change | Revenue in YTD FY22 | Increase (Decrease) | Percent Change | Revenue in | Increase | Percent | Increase | Percent | Revenue in | Increase | Percent | |||||||||||||||||||||||||||||||||||||||||||||||||
Q2 FY23 | (Decrease) | Change | (Decrease) | Change | YTD FY23 | (Decrease) | Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Taiwan | $ | 69.9 | $ | 2.0 | 3.0 | % | $ | 10.8 | 18.4 | % | $ | 137.7 | $ | 22.1 | 19.1 | % | $ | 80.4 | $ | 4.9 | 6.5 | % | $ | 10.6 | 15.2 | % | $ | 156.0 | $ | 18.3 | 13.3 | % | ||||||||||||||||||||||||||||||||
China | 53.7 | 7.7 | 16.8 | % | 30.0 | 126.3 | % | 99.6 | 54.9 | 122.8 | % | 65.2 | 6.3 | 10.7 | % | 11.5 | 21.5 | % | 124.1 | 24.5 | 24.6 | % | ||||||||||||||||||||||||||||||||||||||||||
Korea | 40.8 | 1.3 | 3.2 | % | 0.5 | 1.3 | % | 80.3 | 1.3 | 1.6 | % | 41.4 | 3.5 | 9.4 | % | 0.6 | 1.5 | % | 79.2 | (1.1 | ) | (1.3 | )% | |||||||||||||||||||||||||||||||||||||||||
United States | 30.3 | 3.2 | 11.6 | % | 3.2 | 11.7 | % | 57.5 | 3.8 | 7.0 | % | 32.5 | 2.6 | 8.7 | % | 2.2 | 7.1 | % | 62.4 | 4.9 | 8.5 | % | ||||||||||||||||||||||||||||||||||||||||||
Europe | 9.5 | 0.6 | 6.6 | % | 0.2 | 2.7 | % | 18.4 | 0.6 | 3.3 | % | 9.3 | 0.8 | 9.8 | % | (0.2 | ) | (2.4 | )% | 17.8 | (0.6 | ) | (3.8 | )% | ||||||||||||||||||||||||||||||||||||||||
Other | 0.4 | (0.1 | ) | (16.7 | )% | 0.0 | (7.7 | )% | 0.8 | (0.1 | ) | (13.2 | )% | 0.5 | 0.1 | 16.8 | % | 0.1 | 40.4 | % | 0.9 | 0.1 | 18.5 | % | ||||||||||||||||||||||||||||||||||||||||
$ | 229.3 | $ | 18.2 | 8.6 | % | $ | 24.8 | 12.1 | % | $ | 440.4 | $ | 46.1 | 11.7 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
Total Revenue | $ | 204.5 | $ | 14.7 | 7.7 | % | $ | 44.7 | 28.0 | % | $ | 394.3 | $ | 82.5 | 26.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Q2 FY22 | Q1 FY22 | Percent Change | Q2 FY21 | Percent Change | YTD FY22 | YTD FY21 | Percent Change | |||||||||||||||||||||||||
Gross profit | $ | 70.2 | $ | 59.9 | 17.3 | % | $ | 39.2 | 78.9 | % | $ | 130.1 | $ | 69.8 | 86.4 | % | ||||||||||||||||
Gross margin | 34.3 | % | 31.5 | % | 24.6 | % | 33.0 | % | 22.4 | % |
Percent | Percent | Percent | ||||||||||||||||||||||||||||||
Q2 FY23 | Q1 FY23 | Change | Q2 FY22 | Change | YTD FY23 | YTD FY22 | Change | |||||||||||||||||||||||||
Gross profit | $ | 88.4 | $ | 76.1 | 16.2 | % | $ | 70.2 | 25.9 | % | 164.5 | 130.1 | 26.4 | % | ||||||||||||||||||
Gross margin | 38.6 | % | 36.0 | % | 34.3 | % | 37.3 | % | 33.0 | % |
Q2 FY22 | Q1 FY22 | Q2 FY21 | YTD FY22 | YTD FY21 | ||||||||||||||||||||||||||||||||||||
Q2 FY23 | Q1 FY23 | Q2 FY22 | YTD FY23 | YTD FY22 | ||||||||||||||||||||||||||||||||||||
Foreign currency transactions impact, net | $ | 7.8 | $ | 5.3 | $ | (2.1 | ) | $ | 13.1 | $ | (0.7 | ) | $ | 10.7 | $ | (16.9 | ) | $ | 7.8 | $ | (6.2 | ) | $ | 13.1 | ||||||||||||||||
Interest expense, net | - | (0.9 | ) | 1.2 | (0.9 | ) | 0.4 | (0.1 | ) | (0.1 | ) | - | (0.2 | ) | (0.9 | ) | ||||||||||||||||||||||||
Interest income and other income (expense), net | 0.2 | 0.3 | - | 0.5 | 0.2 | 3.0 | 2.6 | 0.2 | 5.6 | 0.5 | ||||||||||||||||||||||||||||||
Non-operating income (expense), net | $ | 8.0 | $ | 4.7 | $ | (0.8 | ) | $ | 12.7 | $ | (0.1 | ) | $ | 13.6 | $ | (14.4 | ) | $ | 8.0 | $ | (0.8 | ) | $ | 12.7 | ||||||||||||||||
Q2 FY22 | Q1 FY22 | Q2 FY21 | YTD FY22 | YTD FY21 | ||||||||||||||||||||||||||||||||||||
Q2 FY23 | Q1 FY23 | Q2 FY22 | YTD FY23 | YTD FY22 | ||||||||||||||||||||||||||||||||||||
Income tax provision | $ | 14.4 | $ | 11.2 | $ | 3.7 | $ | 25.6 | $ | 6.7 | $ | 21.3 | $ | 12.6 | $ | 14.4 | $ | 33.9 | $ | 25.6 | ||||||||||||||||||||
Effective income tax rate | 25.1 | % | 26.1 | % | 18.5 | % | 25.5 | % | 20.5 | % | 26.5 | % | 30.3 | % | 25.1 | % | 27.8 | % | 25.5 | % |
YTD FY22 | YTD FY21 | |||||||||||||||
YTD FY23 | YTD FY22 | |||||||||||||||
Net cash provided by operating activities | $ | 103.3 | $ | 58.2 | $ | 109.7 | $ | 103.3 | ||||||||
Net cash used in investing activities | $ | (33.6 | ) | $ | (67.9 | ) | $ | (62.3 | ) | $ | (33.6 | ) | ||||
Net cash used in financing activities | $ | (2.2 | ) | $ | (18.6 | ) | $ | (15.2 | ) | $ | (2.2 | ) |
Three Months ended | Six Months ended | |||||||||||||||||||
April 30, | January 29, | May 1, | April 30, | May 1, | ||||||||||||||||
2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||
Reconciliation of GAAP to Non-GAAP Net Income: | ||||||||||||||||||||
GAAP Net Income | $ | 39,929 | $ | 13,986 | $ | 27,432 | $ | 53,915 | $ | 50,496 | ||||||||||
FX (gain) loss | (10,718 | ) | 16,944 | (7,844 | ) | 6,226 | (13,112 | ) | ||||||||||||
Estimated tax effects of above | 2,823 | (4,506 | ) | 1,947 | (1,683 | ) | 3,284 | |||||||||||||
Estimated noncontrolling interest effects of above | 901 | (2,060 | ) | 1,543 | (1,159 | ) | 1,639 | |||||||||||||
Non-GAAP Net Income | $ | 32,935 | $ | 24,364 | $ | 23,078 | $ | 57,299 | $ | 42,307 | ||||||||||
Weighted-average number of common shares outstanding - Diluted | 61,507 | 61,470 | 61,145 | 61,489 | 61,041 | |||||||||||||||
Reconciliation of GAAP to Non-GAAP EPS: | ||||||||||||||||||||
GAAP diluted earnings per share | $ | 0.65 | $ | 0.23 | $ | 0.45 | $ | 0.88 | $ | 0.83 | ||||||||||
Effects of the above adjustments | $ | (0.11 | ) | $ | 0.17 | $ | (0.07 | ) | $ | 0.05 | $ | (0.14 | ) | |||||||
Non-GAAP diluted earnings per share | $ | 0.54 | $ | 0.40 | $ | 0.38 | $ | 0.93 | $ | 0.69 |
YTD FY22 | YTD FY21 | |||||||||||||||
YTD FY23 | YTD FY22 | |||||||||||||||
Free Cash Flow | ||||||||||||||||
Net cash provided by operating activities | $ | 103.3 | $ | 58.2 | $ | 109.7 | $ | 103.3 | ||||||||
Purchases of property, plant and equipment | (34.8 | ) | (73.5 | ) | ||||||||||||
Government incentives | 1.4 | 5.8 | ||||||||||||||
Purchases of property, plant, and equipment | (57.7 | ) | (34.8 | ) | ||||||||||||
Free cash flow | $ | 69.9 | $ | (9.5 | ) | $ | 52.0 | $ | 68.5 |
Q2 FY23 | Q2 FY22 | |||||||
LTM Free Cash Flow | ||||||||
First six months of the respective fiscal year | $ | 52.0 | $ | 68.5 | ||||
Prior fiscal year | 162.8 | 41.8 | ||||||
First six months of the prior year | (68.5 | ) | 15.3 | |||||
LTM free cash flow | $ | 146.3 | $ | 125.6 |
Q2 FY22 | Q2 FY21 | |||||||
LTM Free Cash Flow | ||||||||
First six months of the respective fiscal year | $ | 69.9 | $ | (9.5 | ) | |||
October fiscal year end | 47.4 | 77.5 | ||||||
First six months of the prior year | 9.5 | (36.5 | ) | |||||
LTM free cash flow | $ | 126.8 | $ | 31.5 |
As of | ||||||||||||||||
As of | ||||||||||||||||
May 1, 2022 | October 31, 2021 | April 30, | October 31, | |||||||||||||
2023 | 2022 | |||||||||||||||
Net Cash | ||||||||||||||||
Cash and cash equivalents | $ | 329.3 | $ | 276.7 | $ | 367.5 | $ | 319.7 | ||||||||
Current portion of Long-term debt | (12.4 | ) | (22.2 | ) | (7.0 | ) | (10.0 | ) | ||||||||
Long-term debt | (70.1 | ) | (89.4 | ) | (21.3 | ) | (32.3 | ) | ||||||||
Net cash | $ | 246.7 | $ | 165.0 | $ | 339.1 | $ | 277.3 |
Item 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Item 1. | LEGAL PROCEEDINGS |
Item 1A. | RISK FACTORS |
Item 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Total Number of Shares Purchased (in millions) | Average Price Paid Per share | Total Number of Shares Purchased as Part of Publicly Announced Program (in millions) | Dollar Value of Shares That May Yet Be Purchased (in millions) | |||||||||||||
Period | ||||||||||||||||
January 31, 2022 – February 27, 2022 | 0.0 | $ | 0.00 | 0.0 | $ | 31.7 | ||||||||||
February 28, 2022 – March 27, 2022 | 0.0 | $ | 0.00 | 0.0 | $ | 31.7 | ||||||||||
March 28, 2022 – May 1, 2022 | 0.0 | $ | 0.00 | 0.0 | $ | 31.7 | ||||||||||
Total | 0.0 | 0.0 |
Total Number of Shares Purchased | Average Price Paid Per share | Total Number of Shares Purchased as Part of Publicly Announced Program | Dollar Value of Shares That May Yet Be Purchased (in millions) | |||||||||||||
January 30, 2023 – February 26, 2023 | 0 | $ | 0.00 | 0 | $ | 31.7 | ||||||||||
February 27, 2023 – March 26, 2023 | 2,297 | $ | 17.39 | 0 | $ | 31.7 | ||||||||||
March 27, 2023 – April 30, 2023 | 2,627 | $ | 16.58 | 0 | $ | 31.7 | ||||||||||
Total | 4,924 | 0 |
Item 6. | EXHIBITS |
Incorporated by Reference | Filed or Furnished Herewith | |||||||||
Exhibit Number | Description | Form | Exhibit | Filing Date | ||||||
10.41 | Photronics, Inc. 2016 Equity Incentive Compensation Plan As Amended March 16, 2023 | 8-K | 10.1 | 3/21/2023 | ||||||
Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | X | |||||||||
Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | X | |||||||||
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | X | |||||||||
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | X | |||||||||
101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | X | ||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | X | ||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X | ||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||||||
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | X |
Photronics, Inc. | |||||
(Registrant) | |||||
By: | /s/ JOHN P. JORDAN | By: | /s/ ERIC RIVERA | ||
JOHN P. JORDAN | ERIC RIVERA | ||||
Executive Vice President, | Vice President, | ||||
Chief Financial Officer | Corporate Controller | ||||
(Principal Financial Officer) | (Principal Accounting Officer) | ||||
Date:June 7, 2023 | Date: June |