Vancouver, BC, August 6, 2020 – Photon Control Inc. (“Photon Control” or the “Company”) (TSX: PHO), a leading manufacturer of fiber optic measurement solutions to the semiconductor industry, is pleased to announce its financial results for the three and six months ended June 30, 2020.
Q2 2020 Highlights:
- Revenue of $16.1 million versus $7.1 million in Q219
- Earnings before finance income, accretion expense, income taxes, depreciation, amortization and foreign exchange gain or loss (“EBITDA”) of $5.9 million or 37% of revenue versus $1.2 million in Q219;
- Net income of $2.7 million versus $0.1 million in Q219;
- Cash and cash equivalents of $41.1 million at June 30, 2020 increased $7.7 million from December 2019;
- Announced the acquisition of Micronor and the strategic partnership with FiSens.
The Company’s revenues are chiefly derived from the semiconductor capital equipment sector, which is highly cyclical in nature. Second Quarter results continued to benefit from the recovery in memory and strong demand for Photon Control products from the leading equipment manufacturers.
Second Quarter and Half-Year 2020 Financial Results
Total revenue for Q220 increased from $7.1 million in Q219 to $16.1 million, and for the year-to-date period, revenue increased from $15.1 million in 2019 to $33.4 million in 2020. The increase to the Company’s revenue was a result of an improved wafer fabrication equipment spending environment and accelerated product shipments in response to the COVID-19 pandemic.
Gross profit for Q220 increased from $3.9 million in Q219 to $9.7 million, or 55% and 60% of revenue, respectively. For the year-to-date period, gross profit increased from $8.1 million in 2019 to $20.3 million in 2020, or 54% and 61% of revenue, respectively. The variability in gross profit is a function of numerous factors, including sales volume and product and customer mix.
Operating expenses for Q220 increased to $3.9 million from $3.7 million in Q219, and for the year-to-date period, operating expenses increased to $8.0 million from $7.1 million in 2019. The increase is due to focusing on new and existing markets and maintaining investments in new product development. Included within operating expenses for the six months are recoveries from previously expensed research and development costs of $0.38 million, as the Company continues to invest in product development.
Net income for Q220 was $2.7 million or $0.03 per share compared to $0.1 million or $0.00 per share for Q219. For the year-to-date period, net income was $9.3 million or $0.09 per share, compared to $0.2 million or $0.00 per share for 2019.
EBITDA1 for Q220 was $5.9 million or 37% of revenue, compared to $1.2 million or 17% of revenue in Q219. For the year-to-date period, EBITDA1 was $12.9 million or 39% of revenue, compared to $2.7 million or 18% of revenue in the 2019 comparable period.
As at June 30, 2020, cash and cash equivalents were $41.1 million, an increase of $7.7 million from $33.4 million as at December 31, 2019. The increase was primarily attributable to the Company’s strong financial performance in the year.
Order backlog, defined as the unfilled value of sales orders received or scheduled for fulfillment primarily in, but not limited to, the upcoming six-month period, was $29.7 million at June 30, 2020, compared to $30.9 million at March 31, 2020. The decrease in order backlog mainly relates to changes in near-term demand as customers built excess stock in response to COVID-19 in Q1.
“We have a positive outlook on continued strong demand for our technology and products,” said Nigel Hunton, Chief Executive Officer. “Our order backlog reflects that the semiconductor capital equipment market has been relatively resilient in light of the global pandemic. While our record year to date revenues have benefited from our ability to make progress outside of our traditional customer base it has also benefited from the accelerated product shipments in response to COVID19. Our expectation for Q3 2020 are revenues of between $13 to $15 million with a weakening trend into Q4 2020. Our margins year to date have benefited from our customer and product mix but we see these margin gains receding in the later half of the year. While there is much uncertainty, Photon Control will continue to prioritize the well-being of our colleagues and their families, serve our essential customers, and execute our growth strategy by selling into new markets. In the meantime, Photon Control is in a strong financial position and has sufficient liquidity to operate through this environment and continue to enhance shareholder value.”
Photon Control will hold a conference call today (August 6, 2020) at 11:00 am Eastern time (8:00 am Pacific time) to discuss these results. The call will be hosted by Nigel Hunton, Chief Executive Officer, and Damian Towns, Chief Financial Officer, followed by a question and answer period.
Financial Statements and Management’s Discussion and Analysis
This news release should be read in conjunction with the Company’s condensed interim financial statements and related notes, and management’s discussion and analysis for the three and six months ended June 30, 2020, copies can be found at www.sedar.com.
About Photon Control Inc.
Photon Control Inc. designs, manufactures and distributes a wide range of optical sensors and systems to measure temperature and position. These products improve performance and enable innovation for our customers and are used in the semiconductor and other high-technology industries. Photon Control Inc.’s high-quality products provide industry-leading accuracy, reliability and quality in the most extreme conditions and are backed by a team of experts providing a variety of on-site and remote services including custom design, installation, training and support. The Company is headquartered in an ISO 9001:2015 manufacturing facility in Vancouver, BC, has manufacturing, sales and engineering offices in California and a sales distribution network around the globe. Photon Control Inc. is listed on TSX, trading under the symbol “PHO”. Additional information about the company can be found at
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This news release contains “forward-looking statements” within the meaning of applicable Canadian securities legislation. These statements generally can be identified by use of forward-looking words such as “may”, “will”, “could”, “would”, “should”, “might”, “expect”, “estimate”, “anticipate”, “intend”, “consider”, “believe”, “plan”, “project”, “assume”, “strategy”, “goals”, “objectives”, “potential”, “possible”, “confident” or “continue” or the negative thereof or similar variations. Such forward-looking statements concern the business and anticipated financial performance of the Company and include, without limitation, the Company’s growth outlook.
These forward-looking statements are based on certain factors and assumptions, including, without limitation: the Company’s ability to develop, manufacture and sell new products that meet the needs of its customers and gain commercial acceptance; the Company’s ability to continue to sell its products in line with expected quantity, price and delivery times; the Company’s ability to attract new business; continued and future demand for the Company’s products; continued sales to the Company’s major customers; the Company’s operations not being adversely affected by supply, operating, cyber security, litigation or regulatory risks; the Company’s ability to react to the cyclical nature of the semiconductor industry; the Company’s ability to enhance revenue diversification and open new market opportunities; and, the Company’s expectations regarding market risk, including interest rate changes, tax changes and foreign currency fluctuations.
Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation: uncertainties relating to the market for the Company’s products and maintaining a stable level of orders; fluctuations in revenue as a result of volatility in the markets and product mix; risks relating to the Company’s present reliance on its major customers for the majority of its sales; risks relating to the Company’s reliance on the financial health of and timing of cycles in the semiconductor industry; risks relating to the development of competing technologies and the possibility of increased competition; the effect of slow growth in the United States, the Company’s principal market, as well as other economies and other economic trends and conditions in the markets that the Company and its customers serve; risks associated with the spread of the COVID-19 virus; risks associated with the adverse impact of climate change; risks associated with technical difficulties or delays in product introductions, improvements, implementation; uncertainties in product pricing or other initiatives of the Company and its competitors; uncertainties in factors that may result in a reduction in capital expenditures and/or delayed buying decisions affecting demand for the Company’s products; risks relating to currency fluctuations, particularly between the Canadian and United States dollars; risks in pursuing additional development projects to support existing customers or pursue other business opportunities; and such other risks as are identified in the Company’s Annual Information Form and other disclosure documents filed on SEDAR at www.sedar.com.
The foregoing assumptions, risks and uncertainties are not exhaustive of the items that may affect our forward-looking statements. Should underlying assumptions prove to be incorrect or one or more of these risks and uncertainties materialize, actual results may vary materially from those described in the forward-looking statements. The Company’s forward-looking statements are based on beliefs, expectations and opinions of management on the date the statements are made.
For the reasons set forth above, readers should not place undue reliance on forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statements included herein if these beliefs, estimates and opinions or other circumstances should change, except as otherwise required by applicable law.
 See “Non-GAAP Performance Measures” in the MD&A