Photronics, Inc. (PLAB) has reported a 71.78 percent plunge in profit for the quarter ended Oct. 30, 2016. The company has earned $5.26 million, or $0.08 a share in the quarter, compared with $18.62 million, or $0.25 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $3.42 million, or $0.05 a share compared with $18.62 million or $0.25 a share, a year ago.
Revenue during the quarter dropped 24.22 percent to $107.37 million from $141.69 million in the previous year period. Gross margin for the quarter contracted 1236 basis points over the previous year period to 19.12 percent. Total expenses were 95.06 percent of quarterly revenues, up from 80.77 percent for the same period last year. That has resulted in a contraction of 1429 basis points in operating margin to 4.94 percent.
Operating income for the quarter was $5.30 million, compared with $27.25 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $29.13 million compared with $50.42 million in the prior year period. At the same time, adjusted EBITDA margin contracted 845 basis points in the quarter to 27.13 percent from 35.58 percent in the last year period.
"Demand for our products fell during the quarter as many of our customers decreased new design activity, reducing the demand for new photomasks, especially at the high end," said Peter Kirlin, chief executive officer. "High end FPD remains soft as the industry transitions from LCD to OLED, temporarily reducing new design activity. High end IC memory is starting to see pricing recovery, driving new design activity but not yet impacting mask demand. High end IC logic, which can be volatile, was down this period. Net income fell due to the lower sales level, but we were able to offset some of the decline by reducing our operating expenses. Despite lower sales and net income, cash flow from operations was positive and we added to our already strong balance sheet. We are well positioned to invest in our growth initiatives for IC and FPD, while also evaluating strategic M&A opportunities."
For the first-quarter 2017, Photronics, Inc. projects revenue to be in the range of $104 million to $112 million. The company forecasts diluted earnings per share to be in the range of $0.01 to $0.06.
Operating cash flow declines
Photronics, Inc. has generated cash of $122.14 million from operating activities during the year, down 8.30 percent or $11.06 million, when compared with the last year.
Cash flow from investing activities was $52.29 million from investing activities during the year as against cash outgo of $104.30 million in the last year.
The company has spent $67.02 million cash to carry out financing activities during the year as against cash outgo of $7.10 million in the last year period.
Cash and cash equivalents stood at $314.07 million as on Oct. 30, 2016, up 52.56 percent or $108.21 million from $205.87 million on Nov. 01, 2015.
Debt comes down significantly
Photronics, Inc. has recorded a decline in total debt over the last one year. It stood at $67.57 million as on Oct. 30, 2016, down 49.05 percent or $65.05 million from $132.62 million on Nov. 01, 2015. Total debt was 6.84 percent of total assets as on Oct. 30, 2016, compared with 12.68 percent on Nov. 01, 2015. Debt to equity ratio was at 0.08 as on Oct. 30, 2016, down from 0.17 as on Nov. 01, 2015.
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