Photronics, Inc. Net Income jumped on 220% and Revenue surged on 18.8%
12/12/2018 • About Photronics, Inc. (
$PLAB) • By InTwits
Photronics, Inc. reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Photronics, Inc. has high CAPEX intensity: 5 year average CAPEX/Revenue was 17.6%. At the same time it's a lot of higher than industry average of 8.7%.
- CAPEX is quite volatile: $9m in FY2018, $8m in FY2017, $6m in FY2016, $3m in FY2015, $5m in FY2014
- The company has business model with low profitability: ROIC is 7.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Photronics, Inc.'s Revenue jumped on 18.8%. Revenue growth showed acceleration in FY18Q4 - it increased 19.6% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.7 pp from 26.3% to 28.0% in FY2018.
Gross Margin increased on 4.3 pp from 20.3% to 24.6% in FY2018. SG&A as a % of Revenue showed almost no change in FY2018.
Net Income margin increased on 4.9 pp from 2.9% to 7.9% in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 Photronics, Inc. had CAPEX/Revenue of 17.3%. Photronics, Inc.'s CAPEX/Revenue decreased on 2.5 pp from 19.8% in FY2015 to 17.3% in FY2018. It's average level of CAPEX/Revenue for the last three years was 16.0%. The company invested a big chunk of EBITDA (61.7%) to CAPEX to secure its growth.
Return on investment
The company operates at low ROIC (7.0%) and ROE (5.9%). ROIC increased on 3.5 pp from 3.5% to 7.0% in FY2018. ROE increased on 4.1 pp from 1.8% to 5.9% in FY2018.
Leverage (Debt)
Debt level is -1.8x Net Debt / EBITDA and 0.4x Debt / EBITDA. Debt decreased on 7.3% while cash increased on 6.9%.
Photronics, Inc. has no short term refinancing risk: cash is higher than short term debt (573.1%).
Valuation and dividends
The company's trades at EV/EBITDA 2.4x and P/E 15.1x.
Management team
Peter S Kirlin is a the company's CEO. Peter S Kirlin is a founder and has spent 4 years with the company. The company's CFO John P Jordan has spent 1 year with the company.
Financial and operational results
FY ended 10/31/2018
Photronics, Inc. ($PLAB) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 455.5 | 524.2 | 483.5 | 450.7 | 535.3 | 18.8% |
| Gross Profit | 100.3 | 143.1 | 118.7 | 91.3 | 131.5 | 44.0% |
| SG&A | 49.6 | 49.0 | 44.6 | 43.6 | 51.4 | 17.9% |
| EBITDA | 108.9 | 147.9 | 130.1 | 118.4 | 150.0 | 26.6% |
| Net Income | 26.0 | 44.6 | 46.2 | 13.1 | 42.1 | 220.3% |
Balance Sheet
|
|---|
| Cash | 192.9 | 205.9 | 314.1 | 308.0 | 329.3 | 6.9% |
| Short Term Debt | 10.4 | 65.5 | 5.4 | 4.6 | 57.5 | 1,138.5% |
| Long Term Debt | 131.8 | 67.1 | 62.1 | 57.3 | 0.0 | -100.0% |
Cash flow
|
|---|
| Capex | 91.1 | 104.0 | 50.1 | 92.0 | 92.6 | 0.7% |
Ratios
|
|---|
| Revenue growth | 7.9% | 15.1% | -7.8% | -6.8% | 18.8% | |
| EBITDA growth | 5.1% | 35.8% | -12.1% | -9.0% | 26.6% | |
|
|---|
| Gross Margin | 22.0% | 27.3% | 24.6% | 20.3% | 24.6% | 4.3% |
| EBITDA Margin | 23.9% | 28.2% | 26.9% | 26.3% | 28.0% | 1.7% |
| SG&A, % of revenue | 10.9% | 9.3% | 9.2% | 9.7% | 9.6% | -0.1% |
| Net Income Margin | 5.7% | 8.5% | 9.6% | 2.9% | 7.9% | 4.9% |
| CAPEX, % of revenue | 20.0% | 19.8% | 10.4% | 20.4% | 17.3% | -3.1% |
|
|---|
| ROIC | 3.5% | 8.2% | 5.9% | 3.5% | 7.0% | 3.5% |
| ROE | 4.3% | 7.0% | 6.8% | 1.8% | 5.9% | 4.1% |
| Net Debt/EBITDA | -0.5x | -0.5x | -1.9x | -2.1x | -1.8x | 0.3x |
Photronics, Inc. ($PLAB) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 123 | 131 | 136 | 145 | | 12.4% | 20.8% | 22.2% | 19.6% |
| EBITDA | 34 | 37 | 40 | 38 | | 15.4% | 38.9% | 50.2% | 8.4% |
| Net Income | 6 | 11 | 13 | 12 | | 203.1% | 493.5% | 225.0% | 131.8% |
Balance Sheet
|
|---|
| Cash | 349 | 321 | 333 | 329 | | 5.7% | -7.1% | -2.3% | 6.9% |
| Short Term Debt | 3 | 59 | 58 | 57 | | -40.4% | 976.9% | 944.8% | 1,138.5% |
| Long Term Debt | 57 | 0 | 0 | 0 | | -5.2% | -100.0% | -100.0% | -100.0% |
Ratios
|
|---|
| Gross Margin | 22.4% | 25.1% | 26.1% | 24.5% | | 1.5% | 6.5% | 6.6% | 2.6% |
| EBITDA Margin | 27.7% | 28.6% | 29.7% | 26.2% | | 0.7% | 3.7% | 5.5% | -2.7% |
| Net Income Margin | 4.8% | 8.2% | 9.5% | 8.6% | | 3.0% | 6.5% | 5.9% | 4.2% |
Peers in Semiconductor Equipment
Below you can find Photronics, Inc. benchmarking vs. other companies in Semiconductor Equipment industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Atomera Incorporated ($ATOM) | | | | | 123.6% |
| ACM Research, Inc. ($ACMR) | | | -12.3% | 33.4% | 104.5% |
| SCI Engineered Materials Inc ($SCIA) | | -13.0% | -32.1% | 24.4% | 67.0% |
| Aehr Test Systems ($AEHR) | | -49.1% | 44.7% | 30.3% | 56.4% |
| SolarEdge Technologies, Inc. ($SEDG) | | 144.0% | 50.7% | 23.9% | 54.4% |
| |
|---|
| Median (37 companies) | | -2.0% | 7.8% | 24.7% | 14.0% |
|---|
| Photronics, Inc. ($PLAB) | | 15.1% | -7.8% | -6.8% | 18.8% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Xperi Corporation ($XPER) | 99.5% | 99.8% | 99.8% | 98.3% | 96.7% |
| KLA-Tencor Corporation ($KLAC) | 57.9% | 56.8% | 61.0% | 63.0% | 64.1% |
| Teradyne, Inc. ($TER) | 53.3% | 55.8% | 54.7% | 57.2% | 58.1% |
| Nova Measuring Instruments Ltd. ($NVMI) | 52.7% | 51.9% | 45.9% | 59.1% | 57.8% |
| Nanometrics Incorporated ($NANO) | 47.2% | 47.9% | 51.6% | 52.9% | 56.7% |
| |
|---|
| Median (38 companies) | 34.6% | 38.9% | 40.0% | 44.0% | 41.2% |
|---|
| Photronics, Inc. ($PLAB) | 22.0% | 27.3% | 24.6% | 20.3% | 24.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| KLA-Tencor Corporation ($KLAC) | 29.2% | 26.4% | 34.4% | 38.3% | 39.6% |
| DAQO New Energy Corp. ($DQ) | 32.9% | 31.6% | 43.3% | 49.1% | 36.1% |
| Xperi Corporation ($XPER) | 66.7% | 67.5% | 47.6% | 23.4% | 34.3% |
| Lam Research Corporation ($LRCX) | 21.1% | 20.3% | 23.2% | 27.6% | 32.0% |
| Cabot Microelectronics Corporation ($CCMP) | 21.6% | 22.6% | 23.4% | 27.2% | 31.5% |
| |
|---|
| Median (37 companies) | 6.8% | 9.8% | 11.4% | 16.0% | 16.2% |
|---|
| Photronics, Inc. ($PLAB) | 23.9% | 28.2% | 26.9% | 26.3% | 28.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Rubicon Technology, Inc. ($RBCN) | 15.0% | 4.0% | 3.6% | 0.0% | 58.8% |
| DAQO New Energy Corp. ($DQ) | 42.2% | 44.7% | 29.5% | 19.8% | 47.4% |
| AXT Inc ($AXTI) | 2.4% | 5.4% | 3.4% | 21.6% | 39.6% |
| STR Holdings Inc ($STRI) | 7.9% | 8.1% | 1.6% | 9.0% | 36.6% |
| PDF Solutions, Inc. ($PDFS) | 4.0% | 4.9% | 10.5% | 10.1% | 15.3% |
| |
|---|
| Median (37 companies) | 2.2% | 2.7% | 2.2% | 2.8% | 2.9% |
|---|
| Photronics, Inc. ($PLAB) | 20.0% | 19.8% | 10.4% | 20.4% | 17.3% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| KLA-Tencor Corporation ($KLAC) | 17.9% | 16.5% | 27.2% | 34.0% | 39.9% |
| Lam Research Corporation ($LRCX) | 10.7% | 10.9% | 11.8% | 18.7% | 33.9% |
| Versum Materials, Inc. ($VSM) | | 26.2% | 32.4% | 30.0% | 32.1% |
| Advanced Energy Industries, Inc. ($AEIS) | 8.8% | 30.2% | 41.2% | 45.7% | 31.3% |
| SolarEdge Technologies, Inc. ($SEDG) | -815.6% | 33.6% | 31.2% | 26.5% | 28.6% |
| |
|---|
| Median (39 companies) | 3.4% | 5.2% | 7.6% | 13.1% | 12.1% |
|---|
| Photronics, Inc. ($PLAB) | 3.5% | 8.2% | 5.9% | 3.5% | 7.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Xperi Corporation ($XPER) | -0.3x | -0.1x | 4.2x | 5.0x | 2.6x |
| Ultra Clean Holdings, Inc. ($UCTT) | -1.2x | 1.5x | 0.4x | -0.2x | 2.4x |
| Ichor Holdings ($ICHR) | 3.1x | 1.7x | -0.4x | 2.0x | 1.8x |
| Versum Materials, Inc. ($VSM) | -0.2x | -0.1x | 2.7x | 2.1x | 1.4x |
| DAQO New Energy Corp. ($DQ) | 4.6x | 4.3x | 2.3x | 0.9x | 1.2x |
| |
|---|
| Median (31 companies) | -1.2x | -1.3x | -1.2x | -0.7x | -1.0x |
|---|
| Photronics, Inc. ($PLAB) | -0.5x | -0.5x | -1.9x | -2.1x | -1.8x |
