Photronics, Inc. · NASDAQ:PLAB
Photronics — Credit Suisse First Boston Semiconductor Conference 2003
31 slides from Photronics's conference presentation, Dec 2, 2003
Slide 1: Credit Suisse First Boston Semiconductor Conference
Credit Suisse First Boston Semiconductor Conference December 2, 2003 – Phoenix, Arizona
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: 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 8: Global Overview
Global Overview Regional Highlights
Slide 9: 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 10: 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 11: 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 12: 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 13: Technology Update
Technology Update
Slide 14: 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 15: 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 16: It All Started Here
It All Started Here 157 nm? O EUV? Deep sub-wavelength . 0.045 Defined as CD < wave / 2 0 O 0.032 Best Guess 2003 Circa 2000 Exposure tools cannot keep up with performance demands
Slide 17: Design, Mask, and Wafer Result for 65 nm minimum feature size
Design, Mask, and Wafer Result for 65 nm minimum feature size Design Reticle Wafer
Slide 18: Equipment is Not Enough
Equipment is Not Enough Mask Yield vs. Learning Cycle 95% 99% 100% 100% 90% 80% 96% 99% Yield (%) 80% 90% 60% 50% 75% 180 nm Empirical Yield 40% 50% 90 nm Empirical Yield 20% 25% 0% 0 1 2 3 4 5 6 7 Cycles of Learning It is all about cycles of learning
Slide 19: Measure/Inspect/Repair
Motivation for ILP Design Mask Wafer Logical Physical Mask Mask Data Mask Wafer Design Design Synthesis Preparation (MDP) Manufacturing Manufacturing RTL and System Design Inspection File Creation Measure/Inspect/Repair Layout and Verification Design Rule Checks Optical Rules Check Fill: Litho/Etch/
Slide 20: Financial Highlights
Financial Highlights
Slide 21: 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 22: 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 23: 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 24: 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 25: 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 26: Cash Flow Highlights
Cash Flow Highlights $ millions Fiscal Year First Nine Ended 2002 Months 2003 Operations $ 136 $ 42 – – 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 (Decrease) in Cash and Investments $94 $81
Slide 27: 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 28: 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 29: Summary
Summary
Slide 30: Meeting Today's Market Demands
Meeting Today’s Market Demands Flexible Global Integrating Shareholder the Value Lithography Customer Responsive Plane Loyalty Connected (Automated)
Slide 31: Credit Suisse First Boston Semiconductor Conference
Credit Suisse First Boston Semiconductor Conference December 2, 2003 – Phoenix, Arizona
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