Photronics Inc. (NASDAQ:PLAB) Q3 2019 Earnings Conference Call - Final Transcript

Aug 20, 2019 • 08:30 am ET


Photronics Inc. (NASDAQ:PLAB) Q3 2019 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen, and welcome to the Photronics Third Quarter Fiscal Year 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference, Mr. Troy Dewar. You may begin.

R. Troy Dewar

Thank you, Skyler. Good morning, everyone. Welcome to our review of Photronics 2019 third quarter financial results. Joining me this morning are Dr. Peter Kirlin, Chief Executive Officer; John Jordan, Senior Vice President and Chief Financial Officer; and Dr. Christopher Progler, Vice President, Chief Technology Officer and Strategic Planning.

The press release we issued earlier this morning along with the presentation material, which accompanies our remarks are available on the Investor Relations section of our webpage. Comments made by any participants on today's call may include forward-looking statements that include such words as anticipate, believe, estimate, expect, forecast. These forward-looking statements are based upon a number of risks, uncertainties and other factors that are difficult to predict. Actual results may differ materially from those expressed or implied and we assume no obligation to update any forward-looking information. During the course of our discussion, we will refer to certain non-GAAP financial metrics. These numbers are useful for analysts, investors, and management to evaluate our ongoing performance. A reconciliation of these metrics to GAAP financial results is provided in our presentation materials.

At this time, I will turn the call over to Peter.

Peter S. Kirlin

Thank you, Troy and good morning everyone. The press release we issued earlier today illustrates once again the ability of our entire organization to execute in the phase of an industry downturn that is now being reinforced by a geopolitical environment that has become increasingly uncertain.

Revenue grew 5% compared with the previous quarter and 1% compared with the same quarter last year, making this the eighth consecutive quarter of year-over-year revenue growth. FPD achieved record revenue as demand for AMOLED verticals remained strong. We benefited from additional production capacity from our new facility in Hefei, China. IC revenue improved sequentially on greater demand for mainstream nodes from Asian foundries while high-end IC was flat with growth in Taiwan offset by softness in China. Margins improved compared with the previous quarter because we controlled costs despite higher startup expenses. This enabled us to deliver earnings of $0.10 per share. In addition, our cash balance grew to $197 million, aided by strong operating cash flow, government incentives we received for our China investments and additional borrowings in China. Capex of $20 million was consistent with plan as we near completion of our initial China investment.

As we head into the end of our fiscal year, we're in a superb financial position. Year-to-date revenues are ahead of last year's record levels and our outlook for the fourth quarter puts us on pace to improve on last year's total. Our cash balance continues