Photronics, Inc. · NASDAQ:PLAB
Photronics — Wachovia Securities 2004 Convertible Securities Conference
30 slides from Photronics's conference presentation, Mar 1, 2004
Slide 1: Wachovia Securities 2004 Convertible Securities Conference
Wachovia Securities 2004 Convertible Securities Conference Monday, March 1, 2004
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 “d
Slide 4: Technology Leaders Face a Rapidly Changing Landscape
Technology Leaders Face a Rapidly Changing Landscape Ø Faster rates of end market change Shorter Consolidation Product Life Ø Alliances & relationships Cycles increase strategic advantage Changing Business Ø 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 st logy no ech T ility Sp eed xib e Fl
Slide 6: Technical Diversity and Investment
Technical Diversity and Investment Semiconductor PLAB FY04 YTD vs. WW IC Rankings 03 Nanotechnology Applications Flat Panel Display Region PLAB Global Customers Markets WW 2 of Top 3 Photonics Thin Film NA 2 of Top 3 Head Europe 2 of Top 3 Asia-Pac 2 of Top 3 Company Sites Under Construction Source:
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 2003 NA 72% 64% 50% 41% Region 2000 2001 2002 Q1:03 Domestic Europe 70% 18% 69% 17% 47% 16% 40% 17% Asia 10% 19% 34% 42%
Slide 10: Asian Business Environment
Asian Business Environment ØFoundries dominate Asian landscape Ø130nm 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 Ø 90nm test chips beginning to ramp Ø IDM’s continue pursuing fablite and fa
Slide 11: European Business Environment
European Business Environment ØCycle of under investment is turning ØOutlook for communications driven products improving Ø3 of World’s Top 10 IDMs committed to Europe Ø 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 ØBusiness model is increasingly shifting to a fablite and/or fabless strategy ØPricing environment is stable ØLeverage regionally strong technology position with process driven IDMs – Service is the differentiator!!
Slide 13: Technology Update
Technology Update —e 1:
Slide 14: A Focused Approach to Tech Leadership
A Focused Approach to Tech Leadership M ar al nt ke b o e t Dr ive Gl opm l n vel ode De M Tech Leadership Fo gy c lo tec used no ips hn co ech ersh olo re T rtn 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% Yield (%) 80% 96% 99% 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: Financial Highlights
Financial Highlights a | 1:
Slide 20: Photronics Financial Highlights
Photronics Financial Highlights ØBenefit from technology driven demand ØMultiple sources of margin leverage • Improving mix shift & stable pricing • Global presence ØIncreased global market share ØImproved liquidity ØStrategically scaled infrastructure
Slide 21: 5 Year Revenue
5 Year Revenue $378.0 $386.9 $400.0 $331.2 $348.9 $350.0 $277.4 $300.0 $250.0 $200.0 $150.0 $100.0 $50.0 $0.0 1999 2000 2001 2002 2003
Slide 22: Quarterly Revenue & High-End Mix
Quarterly Revenue & High-End Mix $120.0 35% $100.0 30% 25% $80.0 20% $60.0 15% $40.0 10% $20.0 5% $0.0 0% Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Quarterly Revenue $M % High End
Slide 23: Operating Income (Recent Quarters)
Operating Income (Recent Quarters) (excludes consolidation and restructuring charges) $10 $8 Operating Income $6 $M $4 $2 $0 r-02 -02 t-02 -03 r-03 y-0 3 t-03 -04 Ap Jul Oc Jan Ap Jul Oc Jan
Slide 24: Improving Liquidity
Improving Liquidity Solid Financial Position $ millions February 1, November 2, 2004 2003 Cash and Short Term Investments $236 $232 Working Capital $276 $259 Current Ratio 4.9:1 4.2:1 Total Assets $870 $866 Long Term Debt $368 $368 Equity $320 $308
Slide 25: Cash Flow Highlights
Cash Flow Highlights $ millions Q1-FY 04 Fiscal Year February 1, 2004 Ended 2003 Operations $ 15 $83 Capital Expenditures (11) (47) Free Cash Flow 4 36 Purchase of Short-term Investments (91) - Net Issuance of Convertible Debt - 145 Net Repayment of Debt (2) (87) Other, Net 2 6 Increase (Decrease) i
Slide 26: 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 27: Long-Term Financial Goals
Long-Term Financial Goals Free Cash flow $50mn Debt-to-Equity 25% Return on Assets 10% Operating Margin 20%+ Gross Margin 40%+ Annual Revenue Growth 10%-15%
Slide 28: Summary
Summary “d
Slide 29: Meeting Today's Market Demands
Meeting Today’s Market Demands Flexible Global Integrating Shareholder the Value Lithography Customer Responsive Plane Loyalty Connected (Automated)
Slide 30: Wachovia Securities 2004 Convertible Securities Conference
Wachovia Securities 2004 Convertible Securities Conference Monday, March 1, 2004
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