Photronics, Inc. (NASDAQ:PLAB) Q1 2024 Earnings Call Transcript

Tom Diffely: Great. I appreciate it, Chris. And then last question for John. When you look at the capital spending of $140 million this year, how much of that is I guess, sponsored or do you have contracts to kind of guarantee a certain level of production if you’re going to spend that level of money?

John Jordan: Yes. So as we’ve discussed, over the last several years, Tom, for every major capital investment we get, we have — first of all, we have an investment analysis that supports at least our threshold IRR. And we drill down on the revenue line and those analyses to make sure that the revenues are just not numbers on an Excel spreadsheet. They’re supported by either customer commitments or pretty good assurances that, that business is going to be there, the request from customers for us to increase capacity and not promises, but assurances of future orders to support the investments. And of course, as you’ve seen, our ROIC from 2017 at about 1.5% has increased to 13% to 14% over the last several years. So that strategy of supporting the investments and making sure that we’ve got the revenues to support them has been effective in the total turnaround in our ROIC.

Tom Diffely: Great. Well, thank all three of you for your time today. And John, once again, congratulations.

John Jordan: Thanks, Tom. Thanks for coming and calling for the questions.

Tom Diffely: Thanks.

Operator: Thank you. And there are no further questions in the queue at this time. I will now turn the call over to Frank Lee for any closing comments.

Frank Lee: Thank you for joining us this morning. We are entering the second quarter from a strong position with demand growing across our markets and a solid financial position to support our growth investments. We have a great market position with leading share and technology. We expect to grow to continue growing market share and improving profit margins. I’m proud of our team’s performance and confident we are on the way to another new record year in 2024. Thank you.

Operator: Ladies and gentlemen, that concludes the conference call for today. We thank you for your participation and ask that you please disconnect your line at this time.