Photronics Inc. (NASDAQ:PLAB) Q2 2022 Earnings Conference Call May 25, 2022 8:30 AM ET

Company Participants

Frank Lee - Chief Executive Officer

John Jordan - Executive Vice President, Chief Financial Officer

Chris Progler - Chief Technology Officer

Conference Call Participants

Patrick Ho - Stifel

Hans Chung - DA Davidson

Gus Richard - Northland

Operator

Good day and thank you for standing by. Welcome to the Photronics Q2 fiscal year 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question and answer session. As a reminder, this conference is being recorded Wednesday, May 25, 2022.

I would now like to turn the conference over to John Jordan, Executive Vice President and CFO. You may begin.

John Jordan

Thank you Tanya. Good morning everyone. Welcome to our review of Photronics fiscal 2022 second quarter results. Joining me this morning are Frank Lee, our recently appointed Chief Executive Officer; Chris Progler, our Chief Technology Officer; and Eric Rivera, our Corporate Controller and Chief Accounting Officer.

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, or in our view. 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.

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

Frank Lee

Thank you John, and good morning everyone. I would like to begin this morning by stating how honored I am to be with you today as the new CEO of Photronics. Since joining the company in 2006, I have helped create and lead our operation and strategy in Asia, including the formation of two joint ventures with Dai Nippon Printing Company and also the recent geographic expansion of our operations into China.

Turning to the financial results, we once again delivered record revenue in the second quarter, improving 8% sequentially. Our strong end market demand, the further price realization across the IC segment, and also the continuous production ramping up of our Xiamen and Hefei operations. In addition to the top line growth, we expand our gross and operation margins. Gross margin was 36% and operation margin 25%. The end result was EPS of $0.49. Cash generation was also strong as we ended the year with $247 million in net cash, which positions us to continue investing in profitable growth opportunities. As CEO, I fully commit to continue our organic growth strategy, the revenue growth and the margin expansion, and also we’ll keep exploring additional growth initiatives.