Photronics, Inc. CAPEX dropped on 60.3% while Revenue surged on 10.7%
12/09/2020 • About Photronics, Inc. (
$PLAB) • By InTwits
Photronics, Inc. reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- Photronics, Inc. has high CAPEX intensity: 5 year average CAPEX/Revenue was 18.4%. At the same time it's a lot of higher than industry average of 7.6%.
- CAPEX is quite volatile: $71m in FY2020, $178m in FY2019, $93m in FY2018, $92m in FY2017, $50m in FY2016
- The company has potentially unprofitable business model: ROIC is 6.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Photronics, Inc.'s Revenue jumped on 10.7%. Revenue growth showed slowdown in FY20Q4 - it was -4.5% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 37.4 pp from 13.2% to -24.2% in FY2020.
Gross Margin showed almost no change in FY2020. SG&A as a % of Revenue decreased slightly on 0.71 pp from 9.5% to 8.8% in FY2020. During FY2016-FY2020 SG&A as a % of Revenue topped in FY2017 at 9.7% and was declining since that time.
Net Income margin showed almost no change in FY2020.
Investments (CAPEX, working capital and M&A)
Photronics, Inc.'s CAPEX/Revenue was 11.6% in FY2020. CAPEX/Revenue decreased on 8.8 pp from 20.4% in FY2017 to 11.6% in FY2020. It's average level of CAPEX/Revenue for the last three years was 20.4%.
Return on investment
The company operates at low ROIC (6.5%) and ROE (4.3%). ROIC increased slightly on 1.0 pp from 5.5% to 6.5% in FY2020. ROE increased slightly on 0.51 pp from 3.8% to 4.3% in FY2020.
Leverage (Debt)
Debt level is -1.3x Net Debt / EBITDA and 0.4x Debt / EBITDA. Debt jumped on 30.1% while cash jumped on 34.9%.
Photronics, Inc. has no short term refinancing risk: cash is higher than short term debt (2,037.3%).
Valuation and dividends
Photronics, Inc.'s trades at EV/EBITDA 3.2x and P/E 21.2x.
Management team
Photronics, Inc.'s CEO is Peter S Kirlin. Peter S Kirlin has 5 years tenure with the company. The company's CFO John P Jordan has spent 3 years with the company.
Financial and operational results
FY ended 10/31/2020
Photronics, Inc. ($PLAB) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 483.5 | 450.7 | 535.3 | 550.7 | 609.7 | 10.7% |
| Gross Profit | 118.7 | 91.3 | 131.5 | 120.8 | 134.7 | 11.4% |
| SG&A | 44.6 | 43.6 | 51.4 | 52.3 | 53.6 | 2.4% |
| EBITDA | 130.1 | 118.4 | 150.0 | 136.0 | 157.7 | 16.0% |
| Net Income | 46.2 | 13.1 | 42.1 | 29.8 | 33.8 | 13.5% |
Balance Sheet
|
|---|
| Cash | 314.1 | 308.0 | 329.3 | 206.5 | 278.7 | 34.9% |
| Short Term Debt | 5.4 | 4.6 | 57.5 | 10.9 | 13.7 | 25.8% |
| Long Term Debt | 62.1 | 57.3 | 0.0 | 41.9 | 55.0 | 31.3% |
Cash flow
|
|---|
| Capex | 50.1 | 92.0 | 92.6 | 178.4 | 70.8 | -60.3% |
Ratios
|
|---|
| Revenue growth | -7.8% | -6.8% | 18.8% | 2.9% | 10.7% | |
| EBITDA growth | -12.1% | -9.0% | 26.6% | -9.3% | 16.0% | |
|
|---|
| Gross Margin | 24.6% | 20.3% | 24.6% | 21.9% | 22.1% | 0.1% |
| EBITDA Margin | 26.9% | 26.3% | 28.0% | 24.7% | 25.9% | 1.2% |
| SG&A, % of revenue | 9.2% | 9.7% | 9.6% | 9.5% | 8.8% | -0.7% |
| Net Income Margin | 9.6% | 2.9% | 7.9% | 5.4% | 5.5% | 0.1% |
| CAPEX, % of revenue | 10.4% | 20.4% | 17.3% | 32.4% | 11.6% | -20.8% |
|
|---|
| ROIC | 5.9% | 3.5% | 7.0% | 5.5% | 6.5% | 1.0% |
| ROE | 6.8% | 1.8% | 5.9% | 3.8% | 4.3% | 0.5% |
| Net Debt/EBITDA | -1.9x | -2.1x | -1.8x | -1.1x | -1.3x | -0.2x |
Photronics, Inc. ($PLAB) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 160 | 143 | 158 | 149 | | 28.1% | 8.5% | 14.3% | -4.5% |
| EBITDA | 42 | 37 | 44 | 44 | | 57.0% | 26.5% | 24.2% | -2.7% |
| Net Income | 10 | 6 | 11 | 6 | | 95.6% | -25.9% | 69.8% | -33.4% |
Balance Sheet
|
|---|
| Cash | 218 | 238 | 261 | 279 | | -6.1% | 42.3% | 32.1% | 34.9% |
| Short Term Debt | 20 | 19 | 17 | 14 | | -67.8% | 3,755.6% | 176.8% | 25.8% |
| Long Term Debt | 41 | 40 | 44 | 55 | | 66.8% | 11.0% | 1.2% | 31.3% |
Ratios
|
|---|
| Gross Margin | 21.7% | 21.3% | 23.9% | 21.4% | | 0.7% | 1.5% | 1.8% | -3.1% |
| EBITDA Margin | 26.4% | 25.6% | 27.8% | 29.3% | | 4.9% | 3.7% | 2.2% | 0.5% |
| Net Income Margin | 6.4% | 4.4% | 6.8% | 4.3% | | 2.2% | -2.0% | 2.2% | -1.9% |
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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Xperi Corporation ($XPER) | - | 44.0% | 8.7% | -31.0% | 218.5% |
| DAQO New Energy Corp. ($DQ) | - | 41.1% | -6.7% | 16.0% | 93.0% |
| Advanced Energy Industries, Inc. ($AEIS) | - | 38.7% | 7.1% | 9.7% | 79.5% |
| Ichor Holdings ($ICHR) | - | 61.7% | 25.6% | -24.6% | 47.3% |
| ACM Research, Inc. ($ACMR) | - | 33.4% | 104.5% | 44.1% | 45.7% |
| |
|---|
| Median (27 companies) | 5.0% | 24.7% | 14.0% | -2.8% | 16.9% |
|---|
| Photronics, Inc. ($PLAB) | - | -6.8% | 18.8% | 2.9% | 10.7% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Xperi Corporation ($XPER) | 99.8% | 98.3% | 96.7% | 97.0% | 91.2% |
| PDF Solutions, Inc. ($PDFS) | 58.6% | 53.4% | 50.1% | 60.9% | 58.2% |
| Teradyne, Inc. ($TER) | 54.7% | 57.2% | 58.1% | 58.4% | 57.2% |
| Nova Measuring Instruments Ltd. ($NVMI) | 45.9% | 59.1% | 57.8% | 54.2% | 56.8% |
| Kulicke and Soffa Industries, Inc. ($KLIC) | 45.7% | 47.2% | 46.1% | 47.1% | 47.8% |
| |
|---|
| Median (27 companies) | 40.0% | 44.0% | 41.2% | 40.5% | 42.7% |
|---|
| Photronics, Inc. ($PLAB) | 24.6% | 20.3% | 24.6% | 21.9% | 22.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Xperi Corporation ($XPER) | 47.6% | 23.4% | 34.3% | 16.4% | 40.8% |
| DAQO New Energy Corp. ($DQ) | 43.3% | 49.1% | 36.1% | 27.1% | 38.0% |
| Teradyne, Inc. ($TER) | 3.4% | 29.6% | 27.9% | 30.3% | 33.8% |
| Cabot Microelectronics Corporation ($CCMP) | 23.4% | 27.2% | 31.5% | 20.1% | 31.6% |
| Entegris, Inc. ($ENTG) | 21.7% | 25.6% | 27.1% | 24.7% | 29.3% |
| |
|---|
| Median (25 companies) | 11.4% | 16.0% | 16.2% | 11.9% | 15.4% |
|---|
| Photronics, Inc. ($PLAB) | 26.9% | 26.3% | 28.0% | 24.7% | 25.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| DAQO New Energy Corp. ($DQ) | 29.5% | 19.8% | 47.4% | 79.7% | 17.5% |
| Cabot Microelectronics Corporation ($CCMP) | 4.1% | 4.2% | 3.6% | 5.4% | 11.3% |
| Amkor Technology, Inc. ($AMKR) | 16.5% | 13.1% | 12.7% | 11.7% | 10.9% |
| ACM Research, Inc. ($ACMR) | 2.9% | 1.8% | 2.5% | 0.9% | 9.5% |
| SolarEdge Technologies, Inc. ($SEDG) | 4.3% | 3.5% | 4.1% | 5.1% | 8.7% |
| |
|---|
| Median (24 companies) | 2.2% | 2.8% | 2.9% | 3.2% | 3.3% |
|---|
| Photronics, Inc. ($PLAB) | 10.4% | 20.4% | 17.3% | 32.4% | 11.6% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Teradyne, Inc. ($TER) | -2.9% | 23.8% | 22.6% | 29.2% | 40.3% |
| DAQO New Energy Corp. ($DQ) | 12.7% | 23.2% | 12.2% | 5.6% | 18.5% |
| Entegris, Inc. ($ENTG) | 10.3% | 14.7% | 15.4% | 11.3% | 16.4% |
| Advanced Energy Industries, Inc. ($AEIS) | 41.2% | 45.7% | 31.3% | 6.9% | 15.5% |
| Ultra Clean Holdings, Inc. ($UCTT) | 7.8% | 27.5% | 10.5% | 4.1% | 14.8% |
| |
|---|
| Median (27 companies) | 7.6% | 13.1% | 12.1% | 5.6% | 10.5% |
|---|
| Photronics, Inc. ($PLAB) | 5.9% | 3.5% | 7.0% | 5.5% | 6.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Veeco Instruments Inc. ($VECO) | - | - | - | 577.2x | 3.4x |
| Cohu, Inc. ($COHU) | -6.0x | -2.7x | - | 10.1x | 2.9x |
| Xperi Corporation ($XPER) | 4.2x | 5.0x | 2.6x | 6.1x | 2.1x |
| Cabot Microelectronics Corporation ($CCMP) | -1.3x | -1.8x | -1.9x | 3.6x | 2.0x |
| Entegris, Inc. ($ENTG) | 0.7x | 0.1x | 1.1x | 1.6x | 1.0x |
| |
|---|
| Median (23 companies) | -1.2x | -0.7x | -1.0x | -0.4x | -0.3x |
|---|
| Photronics, Inc. ($PLAB) | -1.9x | -2.1x | -1.8x | -1.1x | -1.3x |
