Revenue during the quarter dropped 15.49 percent to $109.83 million from $129.96 million in the previous year period. Gross margin for the quarter contracted 633 basis points over the previous year period to 20.94 percent. Total expenses were 92.13 percent of quarterly revenues, up from 86.50 percent for the same period last year. That has resulted in a contraction of 563 basis points in operating margin to 7.87 percent.

Operating income for the quarter was $8.64 million, compared with $17.54 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $28.95 million compared with $49.73 million in the prior year period. At the same time, adjusted EBITDA margin contracted 1191 basis points in the quarter to 26.36 percent from 38.27 percent in the last year period.

"We achieved improved sales compared with the fourth quarter of 2016 as an increase in IC sales was partially offset by lower FPD demand," said Peter Kirlin, chief executive officer. "IC sales were up, despite seasonal headwinds. FPD was lower as growth in high-end was more than offset by a decline in mainstream as customers focused on supporting current production, which limited new product releases. With the top line improvement, we achieved higher operating income and cash from operations through continued cost management and financial discipline. Progress continues on our two strategic investments this year, with ground breaking scheduled to take place for our China IC facility by the end of February, and we expect to receive new FPD tools soon, with the installation to begin in the third quarter."

For the second-quarter, Photronics expects revenue to be in the range of $105 million to $115 million. The company projects diluted earnings per share to be in the range of $0.01 to $0.07 for the second-quarter.

The company has spent $15.40 million cash to meet investing activities during the quarter as against cash outgo of $12.56 million in the last year period.

The company has spent $0.25 million cash to carry out financing activities during the quarter as against cash outgo of $0.37 million in the last year period.

Cash and cash equivalents stood at $329.70 million as on Jan. 29, 2017, up 42.45 percent or $98.25 million from $231.44 million on Jan. 31, 2016.

Working capital increases sharply
Photronics Inc has recorded an increase in the working capital over the last year. It stood at $375.20 million as at Jan. 29, 2017, up 81.59 percent or $168.59 million from $206.62 million on Jan. 31, 2016. Current ratio was at 5.98 as on Jan. 29, 2017, up from 2.24 on Jan. 31, 2016.

Cash conversion cycle (CCC) has decreased to 15 days for the quarter from 24 days for the last year period. Days sales outstanding went up to 81 days for the quarter compared with 74 days for the same period last year.

Days inventory outstanding has decreased to 12 days for the quarter compared with 22 days for the previous year period. At the same time, days payable outstanding went up to 78 days for the quarter from 72 for the same period last year.