Photronics, Inc. · NASDAQ:PLAB
Photronics — SG Cowen Technology Conference 2003
28 slides from Photronics's conference presentation, Sep 3, 2003
Slide 1: SG Cowen Technology Conference
SG Cowen Technology Conference Wednesday, September 3, 2003
Slide 2: Safe Harbor Statement
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Except for historical information, the matters discussed in this presentation that may be considered forward-looking statements may be subject to certain risks and uncertainties that could cause the actual results to d
Slide 3: Corporate Overview
Corporate Overview
Slide 4: Technology Leaders Face a Rapidly Changing Landscape
Technology Leaders Face a Rapidly Changing Landscape ¾ Faster rates of end market change Shorter Consolidation Product Life ¾ Alliances & relationships Cycles increase strategic advantage Changing Business ¾ Customer loyalty & Global Industry Landscape Lower diversification key to Cost Maturing Stru
Slide 5: Photronics' Core Values Define Success
Photronics’ Core Values Define Success Co gy o st n ol c h T e y ilit Sp xib ee d e Fl
Slide 6: Technical Diversity and Investment
Technical Diversity and Investment Research and Development R&D Expense % of Sales $35 9.0% $30 8.0% 7.0% $25 6.0% $20 5.0% $15 4.0% 3.0% $10 2.0% $5 1.0% $0 0.0% 1998 1999 2000 2001 2002 PLAB FY03 YTD vs. Semiconductor WW IC Rankings 02 Other Flat Panel Region PLAB Electronic Display Markets Custom
Slide 7: Speed and Flexibility
Speed and Flexibility Pacing Industry and Regional Dynamics SIA Total Semiconductor Forecast NA Europe Japan AsiaPac 90000 80000 Flash $ in Millions 70000 57%/Year 60000 DRAM 50000 47%/Year 40000 LSI ASIC 30000 47%/Year 20000 2003 2004 2005 2006 INTEL MPU 42%/Year Shifting Sands Projected Fab Capaci
Slide 8: Efficiency…The Value Equation
Efficiency…The Value Equation Innovative & Cost Effective Solutions Customer Interface Automation Mask PilotTM CyberMaskTM Extending Extending Optical Lithography Phase Shift & OPC Masks Technology Simulation Modeling Localized Manufacturing Globalization Advanced Global R/D Strategic Expansion Stre
Slide 9: Global Overview
Global Overview Regional Highlights
Slide 10: Global Shift in Demand
Global Shift in Demand Global Sales Mix Region Global2001 2000 Sales Mix2002 Q3:03 NA 72% 64% 50% 41% Region 2000 2001 2002 Q1:03 Europe Domestic 18% 70% 17% 69% 16% 47% 16% 40% Asia 10% 19% 34% 43%
Slide 11: Asian Business Environment
Asian Business Environment ¾Foundries dominate Asian landscape ¾130nm production release • Focus is on improving 130nm yields • There is a pipeline of designs processed on MPW sets that have not yet become production orders ¾ 90nm test chips beginning to ramp ¾ IDM’s continue pursuing fablite and fa
Slide 12: European Business Environment
European Business Environment ¾Regional economic pressures abating ¾Flat market in 2003, share gains drive growth ¾3 of World’s Top 10 IDMs committed to Europe ¾ Partnerships at Leading Edge • Crolles II - a $5.7bn investment shared between ST, Philips and Motorola
Slide 13: North America Business Environment
North America Business Environment ¾Business model is shifting as an increasing number of IDM’s pursue a fablite and/or fabless strategy ¾Pricing environment is stable • Today, Photronics is pursuing opportunities to increase prices, even among certain mature technology customers ¾ Leverage technolo
Slide 14: Technology Update
Technology Update
Slide 15: A Focused Approach to Tech Leadership
A Focused Approach to Tech Leadership M ar ke b al ent lo tD G lopm el riv ve od en e D M Tech Leadership Fo o gy s te cuse ol ip ch d c hn r s h no co Te rtne lo re gy Pa
Slide 16: Positioned to take advantage...
Positioned to take advantage... Photronics brings efficiency to design & fabrication of high performance IC’s by leading the Integration of the Lithography Plane Proven track record of increasing the pace of development being applied to 90nm and 65nm nodes Have the most extensive global leading-edge
Slide 17: Financial Highlights
Financial Highlights
Slide 18: Photronics Financial Highlights
Photronics Financial Highlights ¾Benefit from technology driven demand ¾Multiple sources of margin leverage • Improving mix shift & stable pricing • Global presence ¾Increased global market share ¾Improved liquidity ¾Strategically scaled infrastructure
Slide 19: Net Sales ($M)
5 Year Revenue Growth $500 $378.0 $387.0 $400 $331.2 Net Sales ($M) $269.3 $277.4 $300 $200 $100 $0 1998 1999 2000 2001 2002
Slide 20: Quarterly Revenue & High-End Mix
Quarterly Revenue & High-End Mix $120.0 35% 30% $100.0 25% $80.0 20% $60.0 15% $40.0 10% $20.0 5% $0.0 0% Jan-01 Apr-01 Jul-01 Oct-01 Jan-02 Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Aug-03 Quarterly Revenue $M % High End
Slide 21: Operating Income
Operating Income (Recent Quarters) (excludes consolidation and restructuring charges) $20 $17.1 $16.0 $15 Operating Income $9.6 $10 $7.5 $6.8 $7.0 $5.2 $5.3 $5 $0.4 -$4.4 $0.6 $0 1 -01 1 l-0 1 -0 02 03 03 03 2 -0 - 02 2 n t l-0 r n Ja u c t-0 n- r- g- Ap Ja r- J Ju O Ap Au Ja Ap Oc
Slide 22: Improving Liquidity
Improving Liquidity Solid Financial Position $ millions November 3, August 3, 2002 2003 Cash and Short Term Investments $129 $211 Working Capital $142 $246 Current Ratio 2.3:1 4.2:1 Total Assets $832 $852 Long Term Debt $297 $380 Equity $339 $297
Slide 23: Cash Flow Highlights
Cash Flow Highlights $ millions Fiscal Year First Nine Ended 2002 Months 2003 Operations $ 136 $ 42 Acquisitions of Photomask Operations – – Capital Expenditures (126) (35) Free Cash Flow $10 $7 Net Issuance of Convertible Debt 193 145 Net Repayment of Debt (115) (73) Other, Net (6) 2 Increase (Decr
Slide 24: Short-Term Financial Goals
Short-Term Financial Goals Increase shareholder value Generate free cash flow Maximize liquidity De-lever balance sheet Improve gross and operating margins Increase high-end mix Sustainable profitability
Slide 25: Long-Term Financial Goals
Long-Term Financial Goals Free Cash flow 25mn Debt-to-Equity 25% Return on Assets 10% Operating Margin 20%+ Gross Margin 40%+ Annual Revenue Growth 10%-15%
Slide 26: Summary
Summary
Slide 27: Meeting Today's Market Demands
Meeting Today’s Market Demands Flexible Global Integrating Shareholder the Value Lithography Customer Responsive Plane Loyalty Connected (Automated)
Slide 28: SG Cowen Technology Conference
SG Cowen Technology Conference Wednesday, September 3, 2003