Press Release

• Quarterly sales of $101.5 million; meets revised guidance of $101.5 million
• Non-GAAP net income of $2.4 million
• Non-GAAP EPS of $0.04; within revised guidance of $0.03 - $0.04
• Quarterly high-end IC sales increase 7% sequentially to $16.6 million
• EBITDA of $25.7 million
• Net Cash of $18.8 million

BROOKFIELD, Conn.--(BUSINESS WIRE)-- Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in supplying innovative imaging technology solutions for the global electronics industry, today reported financial results for the fiscal 2014 first quarter ended February 2, 2014.

Constantine ("Deno") Macricostas, Photronics' chairman and chief executive officer commented, "We met our revised guidance for the first quarter, reporting $101.5 million in sales and $0.04 in non-GAAP EPS. As we discussed previously, first-quarter semiconductor revenue, which is traditionally soft due to customer seasonal shutdowns, was affected by a slower-than-expected post-holiday recovery at our mainstream business in the U.S. and Europe, the absence of an expected pre-Lunar New Year pull-in in Taiwan, and a delayed ramp in our high-end memory. Flat panel display (FPD) photomask sales in the first quarter were stable and had volume similar to last year. Our Korean IC business rebounded positively both sequentially and compared with a year ago."

"We are well positioned to capitalize on high-end opportunities and deliver increased revenue and profitability as the market turns in our favor. We have a significant technology advantage, our financial position is solid and we are strengthening our strategic customer relationships," concluded Macricostas.

Sales for the first quarter of fiscal 2014 were $101.5 million, an increase of 2% compared with $99.8 million for the first quarter of fiscal 2013. Sales of semiconductor photomasks were $76.2 million, or 75% of revenues, during the first quarter of fiscal 2014, and sales of flat panel display (FPD) photomasks were $25.3 million, or 25% of revenues.

GAAP net income attributable to Photronics, Inc. for the first quarter of fiscal 2014 was $2.0 million, or $0.03 per diluted share, compared with GAAP net income attributable to Photronics, Inc. of $2.3 million, or $0.04 per diluted share, for the first quarter of fiscal 2013. Non-GAAP net income attributable to Photronics, Inc. shareholders for the first quarter of fiscal 2014, which excludes pending joint venture transaction expenses of $0.4 million, was $2.4 million, or $0.04 per diluted share.

The section below entitled "Non-GAAP Financial Measures" provides a definition and information about the use of non-GAAP financial measures in this press release, and the attached financial supplement reconciles non-GAAP financial information with Photronics, Inc.'s financial results under GAAP.

Non-GAAP Financial Measures

Non-GAAP net income attributable to Photronics, Inc. shareholders and non-GAAP earnings per share are "non-GAAP financial measures," as such term is defined by the Securities and Exchange Commission, and may differ from non-GAAP financial measures used by other companies. Photronics, Inc. believes that non-GAAP net income attributable to Photronics, Inc. shareholders and non-GAAP earnings per share that exclude certain non-cash or non-recurring income or expense items are useful for analysts and investors to evaluate Photronics, Inc.'s future on-going performance because they enable a more meaningful comparison of Photronics, Inc.'s projected earnings and performance with its historical results of prior periods. These non-GAAP metrics, in particular non-GAAP net income attributable to Photronics, Inc. shareholders and non-GAAP earnings per share are not intended to represent funds available for Photronics, Inc.'s discretionary use and are not intended to represent, or be used as a substitute for, operating income, net income or cash flows from operations data as measured under GAAP. The items excluded from these non-GAAP metrics, but included in the calculation of their closest GAAP equivalent, are significant components of the consolidated statements of operations and must be considered in performing a comprehensive assessment of overall financial performance. Non-GAAP financial information is adjusted for the following item:

• Transaction expenses in the first quarter of fiscal 2014 related to the pending joint venture are excluded because they are not a part of ongoing operations.

The presentation of this financial information should not be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States. The attached financial supplement reconciles non-GAAP financial information with Photronics, Inc.'s financial results under GAAP.

A conference call with investors and the media to discuss these results is scheduled for 8:30 a.m. Eastern time on Wednesday, February 19, 2014. The live dial-in number is (408) 774-4601. The call can also be accessed by logging onto Photronics' web site at www.photronics.com. The call will be archived for instant replay access until the Company reports its fiscal 2014 second quarter results.

Photronics is a leading worldwide manufacturer of photomasks. Photomasks are high precision quartz plates that contain microscopic images of electronic circuits. A key element in the manufacture of semiconductors and flat panel displays, photomasks are used to transfer circuit patterns onto semiconductor wafers and flat panel substrates during the fabrication of integrated circuits, a variety of flat panel displays and, to a lesser extent, other types of electrical and optical components. They are produced in accordance with product designs provided by customers at strategically located manufacturing facilities in Asia, Europe, and North America. Additional information on the Company can be accessed at www.photronics.com.

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements made by or on behalf of Photronics, Inc. and its subsidiaries (the Company). The forward-looking statements contained in this press release and other parts of Photronics' web site involve risks and uncertainties that may affect the Company's operations, markets, products, services, prices, and other factors. These risks and uncertainties include, but are not limited to, economic, competitive, legal, governmental, and technological factors as well as decisions we may make in the future regarding our business, capital structure and other matters. Accordingly, there is no assurance that the Company's expectations will be realized. For a fuller discussion of the factors that may affect the Company's operations, see "Forward Looking Statements" in the Company's Quarterly and Annual Reports to the Securities and Exchange Commission on Forms 10-Q and 10-K. The Company assumes no obligation to provide revisions to any forward-looking statements.

04-2013

PLAB - E

PHOTRONICS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
		Three Months Ended
		February 2,				January 27,
		2014				2013
Net sales		$	101,542			$	99,839
Costs and expenses:
Cost of sales			(78,660	)			(78,741	)
Selling, general and administrative			(12,278	)			(11,067	)
Research and development			(4,974	)			(4,839	)
Operating income			5,630				5,192
Other expense, net			(873	)			(591	)
Income before income taxes			4,757				4,601
Income tax provision			(2,716	)			(1,742	)
Net income			2,041				2,859
Net income attributable to noncontrolling interests			(48	)			(536	)
Net income attributable to Photronics, Inc. shareholders		$	1,993			$	2,323
Earnings per share:
Basic		$	0.03			$	0.04
Diluted		$	0.03			$	0.04
Weighted-average number of common shares outstanding:
Basic			61,200				60,277
Diluted			62,136				61,095

PHOTRONICS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
		February 2,			November 3,
		2014			2013
Assets
Current assets:
Cash and cash equivalents		$	189,228		$	215,615
Accounts receivable			72,046			73,357
Inventories			19,566			18,849
Other current assets			11,273			10,645
Total current assets			292,113			318,466
Property, plant and equipment, net			434,201			422,740
Investment in joint venture			93,104			93,124
Intangible assets, net			32,634			34,080
Other assets			18,716			17,519
		$	870,768		$	885,929
Liabilities and Equity
Current liabilities:
Current portion of long-term borrowings		$	9,387		$	11,818
Accounts payable and accrued liabilities			105,856			92,769
Total current liabilities			115,243			104,587
Long-term borrowings			161,080			182,203
Other liabilities			13,241			11,308
Equity			581,204			587,831
		$	870,768		$	885,929

PHOTRONICS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
		Three Months Ended
		February 2,				January 27,
		2014				2013
Cash flows from operating activities:
Net income		$	2,041			$	2,859
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization			17,899				19,157
Changes in assets and liabilities and other			(5,743	)			(3,351	)
Net cash provided by operating activities			14,197				18,665
Cash flows from investing activities:
Purchases of property, plant and equipment			(12,184	)			(15,539	)
Increase in restricted cash			(1,698	)			-
Other			67				(1,043	)
Net cash used in investing activities			(13,815	)			(16,582	)
Cash flows from financing activities:
Repayments of long-term borrowings			(23,554	)			(1,655	)
Purchase of common stock of subsidiary			-				(4,190	)
Payment of deferred financing fees			(310	)			-
Proceeds from share-based arrangements			518				203
Net cash used in financing activities			(23,346	)			(5,642	)
Effect of exchange rate changes on cash			(3,423	)			3,287
Net decrease in cash and cash equivalents			(26,387	)			(272	)
Cash and cash equivalents, beginning of period			215,615				218,043
Cash and cash equivalents, end of period		$	189,228			$	217,771

PHOTRONICS, INC. AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial Information
(in thousands, except per share data)
(Unaudited)
		Three Months Ended
		February 2,			January 27,
		2014			2013
Reconciliation of GAAP to Non-GAAP Net Income
Attributable to Photronics, Inc. Shareholders
GAAP net income attributable to Photronics, Inc. shareholders		$	1,993		$	2,323
(a) Joint venture transaction expenses, net of tax			437			-
Non-GAAP net income attributable to Photronics, Inc. shareholders		$	2,430		$	2,323
Reconciliation of GAAP to Non-GAAP Net Income
Applicable to Common Shareholders
Weighted average number of diluted shares outstanding
GAAP			62,136			61,095
Non-GAAP			62,136			61,095
Net income per diluted share
GAAP		$	0.03		$	0.04
Non-GAAP		$	0.04		$	0.04

(a)

Represents transaction expenses in connection with the pending joint venture with DNP Photomask Technology Taiwan Co., Ltd., a wholly-owned subsidiary of Dai Nippon Printing Co., Ltd.

Photronics, Inc.
Pete Broadbent, 203-775-9000
Vice President, Investor Relations & Marketing
pbroadbent@photronics.com

Source: Photronics, Inc.

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