Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x  No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained to the best of registrant's knowledge in definitive proxy or information statements incorporated by reference in Part III of the Form 10-K or any amendment to this Form 10-K.  o

As of December 31, 2002, 32,040,020 shares of the registrant's Common Stock were outstanding. The aggregate market value of registrant's voting stock held by non-affiliates of the registrant as of December 31, 2002 was approximately  $398,163,018.

Explanatory Note

     Pursuant to this Form 10-K/A, the registrant amends "Item 8. Consolidated Financial Statements and Supplementary Data" of Part I of its Annual Report on Form 10-K for the year ended November 3, 2002 to correct Note 10 - Employee Stock Purchase and Option Plans, to the Consolidated Financial Statements.  These changes, which are described in the following paragraph and Note 21, did not impact the registrant's consolidated balance sheets, statements of operations, shareholders' equity or cash flows, or earnings (loss) per share for any of the periods presented.

     The Company has revised certain pro-forma and other calculations computed in accordance with Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation."  These changes relate to the computations of pro-forma compensation expense and pro-forma net income (loss) per share for the years ended November 3, 2002 and October 31, 2001 and 2000 and the weighted average fair values of options granted.  Other than the changes indicated in Note 21, and the adjustment to the pro-forma amounts in Note 10, no other changes have been made to the registrant's Annual Report on Form 10-K for the year ended November 3, 2002.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEPENDENT AUDITORS' REPORT

Board of Directors and Shareholders
Photronics, Inc.
Brookfield, Connecticut

     We have audited the accompanying consolidated balance sheets of Photronics, Inc. and subsidiaries as of November 3, 2002 and October 31, 2001, and the related consolidated statements of operations, shareholders' equity, and cash flows for each of the three fiscal years ended November 3, 2002, October 31, 2001 and 2000. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

     We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Photronics, Inc. and subsidiaries as of November 3, 2002 and October 31, 2001, and the results of their operations and their cash flows for each of the three fiscal years ended November 3, 2002, October 31, 2001 and 2000 in conformity with accounting principles generally accepted in the United States of America.

     As discussed in Note 5 to the consolidated financial statements, the Company changed its method of accounting for goodwill and other intangible assets to conform to Statement of Financial Accounting Standards No. 142 "Goodwill and Other Intangible Assets."

     As discussed in Note 21, the Company has revised its Statement of Financial Accounting Standards No. 123 "Accounting for Stock-Based Compensation" pro-forma calculation disclosures.

DELOITTE & TOUCHE LLP
Hartford, Connecticut
December 6, 2002  (June 25, 2003 as to Note 21)

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NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation

     The accompanying consolidated financial statements include the accounts of Photronics, Inc. and its majority-owned subsidiaries ("Photronics" or the "Company"), in which the Company exercises control. All significant intercompany balances and transactions have been eliminated in consolidation.

Estimates and Assumptions

     The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect amounts reported in them. Actual results may differ from such estimates.

Derivative Investments and Hedging Activities

     The Company records derivatives on the balance sheet as assets or liabilities, measured at fair value. Gains or losses resulting from changes in the values of those derivatives are reported in the statement of operations or as accumulated other comprehensive income (loss), a separate component of shareholders' equity, depending on the use of the derivatives and whether they qualify for hedge accounting. In order to qualify for hedge accounting, the derivative must be highly effective in achieving offsetting changes in fair value or cash flows of the hedged items during the term of the hedge.

Fiscal Year

     The Company's fiscal year ends on the Sunday closest to October 31, and as a result, a 53-week year occurs every five to six years. Fiscal year 2002 includes 53 weeks. Fiscal years 2001 and 2000 include 52 weeks.

Cash and Cash Equivalents

     Cash and cash equivalents include cash and highly liquid investments purchased with an original maturity of three months or less. The carrying values approximate fair values based on the short maturity of these instruments.

Investments

     The Company's investments, comprised of equities and a fixed income bond fund, are classified as available-for-sale, and are carried at fair value. Investments available for current operations are classified in the consolidated balance sheets as current assets; investments held for long-term purposes are classified as non-current assets. Unrealized gains and losses, net of tax, are reported as other comprehensive income (loss) as a separate component of shareholders' equity. Gains and losses are included in income when realized, determined based on the disposition of specifically identified investments.

Inventories

     Inventories, principally raw materials, are stated at the lower of cost, determined under the first-in, first-out (FIFO) method, or market.

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Property, Plant and Equipment

     Property, plant and equipment is stated at cost less accumulated depreciation and amortization. Repairs and maintenance as well as renewals and replacements of a routine nature are charged to operations as incurred, while those which improve or extend the lives of existing assets are capitalized. Upon sale or other disposition, the cost of the asset and accumulated depreciation are eliminated from the accounts, and any resulting gain or loss is reflected in income.

     For financial reporting purposes, depreciation and amortization are computed on the straight-line method over the estimated useful lives of the related assets. Buildings and improvements are depreciated over 15 to 40 years, machinery and equipment over 3 to 10 years and furniture, fixtures and office equipment over 3 to 5 years. Leasehold improvements are amortized over the life of the lease or the estimated useful life of the improvement, whichever is less.

Intangible Assets

     Intangible assets consist primarily of goodwill and other acquisition-related intangibles, and software development costs. These assets are stated at fair value as of the date acquired less accumulated amortization. Amortization is calculated on a straight-line basis over an estimated useful life of 5 years for software development costs and, prior to November 1, 2001, 3 to 15 years for goodwill and acquisition-related assets (see Note 5). As a result of the adoption of SFAS No. 142, the future economic benefit of the carrying value of all intangible assets (see Note 5) is reviewed periodically and any diminution in useful life or impairment in value based on future anticipated undiscounted cash flows or market factors would be recorded in the period so determined.

Income Taxes

     The provision for income taxes is computed on the basis of consolidated financial statement income. Deferred income taxes reflect the tax effects of differences between the carrying amounts of assets and liabilities for financial reporting and the amounts used for income tax purposes.

Earnings Per Share

     Basic EPS is based on the weighted average number of common shares outstanding for the period, excluding any dilutive common share equivalents. Diluted EPS reflects the potential dilution that could occur if certain securities or other contracts to issue common stock were exercised or converted.

Stock-Based Compensation

     The Company records stock option awards in accordance with the provisions of Accounting Principles Board Opinion 25, "Accounting for Stock Issued to Employees."  The Company estimates the fair value of stock option awards in accordance with SFAS No. 123, "Accounting for Stock-Based Compensation," and discloses the resulting estimated compensation effect on net income on a pro forma basis.

Foreign Currency Translation

     The Company's foreign subsidiaries maintain their accounts in their respective local currencies. Assets and liabilities of such subsidiaries are translated to U.S. dollars at year-end exchange rates. Income and expenses are translated at average rates of exchange prevailing during the year. Foreign currency translation adjustments are accumulated and reported as other comprehensive income (loss) as a separate component of shareholders' equity. The effects of changes in exchange rates on foreign currency transactions are included in income.

Revenue Recognition

     The Company recognizes revenue upon shipment of goods to customers.

Reclassifications

     Certain prior year amounts have been reclassified to conform to the current year presentation.

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NOTE 2 - BUSINESS COMBINATIONS

Acquisition of PKL Ltd.

      In 2001, the Company completed the acquisition of a majority of the total share capital (approximately 51%) of PKL Ltd. ("PKL"), a photomask manufacturer based in Korea for approximately $56 million. In April of 2002, the Company acquired an additional 28% of PKL in exchange for 1,212,218 shares of Photronics common stock. The acquisition was accounted for as a purchase and accordingly goodwill in the aggregate of $69.4 million was recorded. The operating results of PKL have been included in the consolidated statements of operations from August 27, 2001, the date the Company acquired majority share.

     The following table presents unaudited consolidated pro forma information as if the initial acquisition of approximately 51% of PKL and the additional acquisition of approximately 28% of PKL had occurred as of the beginning of the periods presented:

     In management's opinion, these unaudited consolidated pro forma amounts are not necessarily indicative of what the actual combined results of operations might have been had the acquisitions of PKL stock occurred at the beginning of the periods presented.

Acquisition of PSMC

     Effective June 20, 2000, the Company acquired a majority of the total share capital of Precision Semiconductor Mask Corporation ("PSMC"), a photomask manufacturer based in Taiwan, for approximately $63.4 million. The acquisition was accounted for as a purchase. Accordingly, a portion of the purchase price has been allocated to assets acquired and liabilities assumed based upon estimated fair value at the date of acquisition, while the balance of $31.2 million was recorded as goodwill. The operating results of PSMC have been included in the consolidated statement of operations from the date of acquisition.

     Unaudited consolidated information as if the acquisition of PSMC had occurred as of the beginning of the fiscal year ended October 31, 2000 follows: net sales - $343,248; net income - $6,508; and diluted earnings per share - $0.22. In management's opinion, these unaudited consolidated pro forma amounts are not necessarily indicative of what the actual combined results of operations might have been if the acquisition of PSMC had been effective at the beginning of the fiscal year ended October 31, 2000.

Align-Rite Merger

     On June 7, 2000, Photronics completed its merger with Align-Rite International, Inc. ("Align-Rite"). Under the terms of the merger agreement, each of the 4,731,232 shares of common stock of Align-Rite issued and outstanding as of June 7, 2000 was converted into 0.85 shares of common stock of Photronics. Cash was paid in lieu of the issuance of any fractional shares of Photronics that would otherwise have been issued. Any stock options to acquire Align-Rite common stock that had not been exercised as of June 7, 2000 became fully vested options to acquire Photronics common stock in accordance with the merger agreement. The merger constituted a tax-free reorganization and has been accounted for as a pooling-of-interests. Accordingly, the consolidated financial statements for the year ended October 31, 2000 and the accompanying notes thereto reflect the Company's financial position, results of operations and cash flows as if Align-Rite had been a wholly owned subsidiary of Photronics for the entire fiscal year.

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     The Company recorded a pre-tax charge of approximately $5.5 million for transaction costs incurred in connection with the merger. Such costs consisted primarily of fees for investment bankers, attorneys, accountants, financial printing and other related charges.

NOTE 3 - INVESTMENTS

     Short-term investments at November 3, 2002 consist of available-for-sale fixed income and equity securities; there were no short-term investments at October 31, 2001. Long-term investments ($2,554 at November 3, 2002 and $6,658 at October 31, 2001) included in "Other Assets" primarily consist of available-for-sale equity securities, where fair values were determined based upon quoted market prices. For investments with no quoted market price, the estimated fair value is based upon the financial condition and the operating results and projections of the investee and is considered to approximate cost. Unrealized gains on investments were determined as follows:

NOTE 4 - PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following:

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NOTE 5 - INTANGIBLE ASSETS

     Effective November 1, 2001 the Company adopted SFAS No. 142, "Goodwill and Other Intangible Assets."  This standard changed the accounting for goodwill and intangible assets with an indefinite life whereby such assets are no longer amortized; however, the standard does require evaluation for impairment and a corresponding writedown, if appropriate. SFAS No. 142 requires an initial evaluation of goodwill and impairment upon adoption and annual evaluations thereafter. The initial evaluation was performed as of November 1, 2001 and a subsequent evaluation was performed in fiscal year 2002 resulting in no impairment in the value of the Company's goodwill.

     Comparative information as if goodwill had not been amortized follows (in thousands, except per share information):

     Goodwill at November 3, 2002 and October 31, 2001 amounted to approximately $115.9 million and $85.1 million, respectively. Other intangible assets, which continue to be amortized, consist of software development costs and a non-compete agreement. The balance of other intangible assets consists of a gross carrying amount of $13,054 at November 3, 2002 and $12,984 at October 31, 2001, less accumulated amortization of $7,702 and $4,911 at November 3, 2002 and October 31, 2001, respectively.

     Amortization expense of other intangible assets for each of the fiscal years ended November 3, 2002 and October 31, 2001 was approximately $2.8 million. Estimated annual amortization expense of other intangible assets is expected to be $2,799 in 2003 and $2,553 in 2004.

NOTE 6 - ACCRUED LIABILITIES

Accrued liabilities consist of the following:

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NOTE 7 - LONG-TERM DEBT

Long-term debt consists of the following:

     Long-term debt matures as follows: 2003 - $10,649; 2004 - $67,441; 2005 - $26,476; 2006 - $1,196 and 2007 - $201,672. The fair value of long-term debt not yet substantively extinguished is estimated based on the current rates offered to the Company and is not significantly different from the carrying value, except that the fair value of the 6% and the 4.75% Convertible subordinated notes, based upon the most recently reported trade as of November 3, 2002, amounted to $57,986 and $156,750, respectively.

     On December 12, 2001 the Company sold $200 million of 4.75% convertible subordinated notes due 2006 in a private offering pursuant to SEC Rule 144A. These notes are convertible into the Company's common stock at a conversion price of $37.00 per share. Net proceeds from the issuance amounted to approximately $193.2 million. Concurrent with the issuance of the Notes, on December 12, 2001 the Company repaid all of the outstanding borrowings under its former revolving credit agreement which amounted to $57.7 million and terminated the agreement.

     The $100 million notional amount of the 4.75% convertible notes which have been effectively converted to a variable rate under an interest rate swap contract are stated at an amount equal to the sum of its principal amount plus $1,672 representing the change in the fair value of the debt obligation attributable to the interest rate risk being hedged. This fair value adjustment has been calculated using a discounted cash flow methodology (see Note 14).

     In July 2002, the Company entered into a credit agreement with a group of financial institutions that provides for a three-year, revolving credit facility with an aggregate commitment of $100 million. The credit facility allows for borrowings in various currencies and includes a provision which allows for an increase in aggregate commitments up to $125 million upon the conversion of at least 50% of the Company's $103 million, 6% convertible subordinated notes due June 1, 2004. The interest rate is based on the terms of the agreement and will vary based on currencies borrowed and market conditions. The effective interest rate for fiscal 2002 was approximately 7%. Currently the facility fee is 0.4% of total aggregate commitments. As of November 3, 2002, $89.4 million was available under the facility. The Company is subject to compliance with and maintenance of certain financial and other covenants, and matters set forth in the agreement, including a limitation on cash dividends available for payment to shareholders. The credit facility is secured by a pledge of the Company's stock in certain of its subsidiaries.

     Committed credit available under the revolving credit facility provides management with the ability to refinance a portion of its debt on a long-term basis. At November 3, 2002, $12.1 million in outstanding foreign borrowings due in the course of the next year were classified as long-term debt based on the Company's ability and intent to refinance these borrowings on a long-term basis utilizing the credit available under the revolving credit facility.

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     In the fourth quarter of fiscal 2002, the Company repurchased $41.2 million of its 6% convertible notes for total consideration of $38.2 million. The Company recorded a gain on the repurchase of those notes of $2.6 million, net of the write off of deferred financing fees associated with the portion of 6% convertible notes that were repurchased. In 2002 the Company adopted SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections."  SFAS No. 145 rescinds certain guidance for reporting extinguishments of debt and provides guidance to determine if the transactions are part of recurring operations or if they meet the criteria for classification as an extraordinary item. The Company has classified the gain in other income.

     The unsecured and secured notes payable are obligations of non-wholly owned subsidiaries and are not guaranteed by the Company. Unsecured notes payable consist primarily of working capital loans with interest rates ranging from approximately 6.3% to 6.5%. Secured notes payable consist primarily of collateralized equipment loans with interest rates ranging from approximately 2.5% to 6.7% and are due in monthly installments through May 2006.

     Interest payments were $15,749, $11,006 and $11,724 in 2002, 2001 and 2000, respectively.

NOTE 8 - EARNINGS PER SHARE

     A reconciliation of basic and diluted EPS as follows:

     The effect of the potential conversion of notes into 7.6 million shares of common stock would be anti-dilutive for all years presented. If the assumed conversion of convertible subordinated notes and stock options had been dilutive, the incremental additional shares outstanding would have been 8,849 in 2002, 4,453 in 2001 and 3,700 in 2000.

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NOTE 9 - INCOME TAXES

     The provision (benefit) for income taxes consists of the following:

     The provision (benefit) for income taxes differs from the amount computed by applying the statutory U.S. Federal income tax rate to income (loss) before taxes as a result of the following:

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     The net deferred income tax liability consists of the following:

     Cash paid for income taxes amounted to $0.8 million, $2.0 million and $0.9 million in 2002, 2001 and 2000 respectively. Cash received for refunds of income taxes paid in prior years amounted to $13.5 million in 2002 and $4.1 million in 2000.

     As of November 3, 2002, the Company had a federal net operating loss carryforward of $17.2 million; $5.0 million expires in 2020 and $12.2 million expires in 2022. The Company expects to fully utilize these carryforwards, thus a deferred tax asset has been established.

     The Company established a valuation reserve against various state net operating loss carryovers because the possibility exists that these net operating loss carryovers may expire prior to their utilization.

     As of November 3, 2002, the Company has $3.2 million of alternative minimum tax credit carryforwards that are available to offset future federal taxes payable. The Company also has a $0.9 million general business credit carryforward available as a tax credit until year 2019 when, if still unused, will convert into a tax deduction.

     As of November 3, 2002, deferred income taxes approximating $35.7 million were not provided on undistributed earnings of certain foreign subsidiaries because such undistributed earnings are expected to be reinvested indefinitely overseas.

     Deferred tax benefits from the exercise of non qualified stock options recorded as an increase to additional paid-in capital amounted to $1.8 million and $1.0 million in 2002 and 2001, respectively.

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NOTE 10 - EMPLOYEE STOCK PURCHASE AND OPTION PLANS

     In 2000, the shareholders approved the adoption of the 2000 Stock Option Plan which includes provisions allowing for the award of qualified and non-qualified stock options and the granting of restricted stock awards. A total of 2.5 million shares of common stock may be issued pursuant to options or restricted stock awards granted under the Plan. Restricted stock awards do not require the payment of any cash consideration by the recipient, but shares subject to an award may be forfeited unless conditions specified in the grant are satisfied.

     The Company has previously adopted other stock option plans under which incentive and non-qualified stock options and restricted stock awards may be granted. All plans provide that the exercise price may not be less than the fair market value of the common stock at the date the options are granted and limit the term of options granted to a maximum of ten years.

     The following table summarizes stock option activity for each of the three years ended November 3, 2002, October 31, 2001 and 2000 under the plans:

     The following table summarizes information concerning currently outstanding and exercisable options as of November 3, 2002:

  At November 3, 2002, 1,475,564 shares were available for grant and 1,242,804 shares were exercisable at a weighted average exercise price of $16.87.

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     The Company has not recognized compensation expense in connection with stock option grants under the plans.  However, had compensation expense been determined based on the fair value of the options on the grant dates, the Company's pro-forma net (loss) income and earnings (loss) per share would have been increased (decreased) by approximately $(4.1) million, or $(0.13) per diluted share in 2002, by approximately $(3.2) million, or $(0.11) per diluted share in 2001, and by approximately $(2.7) million, or $(0.09) per diluted share in 2000.  The weighted average fair value of options granted was $11.46 per share in 2002, $9.02 per share in 2001 and $12.26 per share in 2000.  Fair value is estimated based on the Black-Scholes option-pricing model with the following weighted average assumptions: dividend yield of 0%; expected volatility of 70.9% in 2002, 75.2% in 2001 and 68.8% in 2000; and risk-free interest rates of 3.0% in 2002, 6.0% in 2001, and 7.5% in 2000. See Note 21.

     The Company maintains and Employee Stock Purchase Plan ("Purchase Plan"), under which 600,000 shares of common stock were reserved for issuance.  The Purchase Plan enables eligible employees to subscribe, through payroll deductions, to purchase shares of the Company's common stock at a purchase price equal to 85% of the lower of the fair market value on the commencement date of the offering and the last day of the payroll payment period.  At November 3, 2002, 205,652 shares had been issued and 83,353 shares were subject to outstanding subscriptions under the Purchase Plan.

NOTE 11 - EMPLOYEE BENEFIT PLANS

     The Company maintains a 401(k) Savings and Profit-Sharing Plan (the "Plan") which covers all domestic employees who have completed six months of service and are eighteen years of age or older. Under the terms of the Plan, employees may contribute up to 25% of their compensation, subject to certain maximum amounts, which will be matched by the Company at 50% of the employee's contributions, which are not in excess of 4% of the employee's compensation. Employee and employer contributions vest fully upon contribution. Employer contributions amounted to $0.7 million in 2002, $0.9 million in 2001 and  $0.9 million in 2000.

     The Company maintains a cafeteria plan to provide eligible domestic employees with the option to receive non-taxable medical, dental, disability and life insurance benefits. The cafeteria plan is offered to all active full-time domestic employees and their qualifying dependents. The Company's contribution amounted to $5.5 million in 2002, $5.7 million in 2001 and $5.4 million in 2000.

     The Company's foreign subsidiaries maintain benefit plans for their employees, which vary by country. The obligations and cost of these plans are not significant to the Company.

NOTE 12 - LEASES

     The Company leases various real estate and equipment under non-cancelable operating leases. Rental expense under such leases amounted to $2.6 million in 2002, $1.6 million in 2001 and $2.2 million in 2000.

     Future minimum lease payments (excluding costs associated with facilities closed under restructuring plans) under non-cancelable operating leases with initial or remaining terms in excess of one year at November 3, 2002 follow:

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NOTE 13 - COMMITMENTS AND CONTINGENCIES

     At November 3, 2002 the Company had capital expenditure purchase commitments outstanding of approximately $30 million.

     Financial instruments that potentially subject the Company to credit risk consist principally of trade receivables and temporary cash investments. The Company sells its products primarily to manufacturers in the semiconductor and computer industries in North America, Europe and Asia. The Company believes that the concentration of credit risk in its trade receivables is substantially mitigated by the Company's ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. Historically, the Company has not incurred any significant credit-related losses.

NOTE 14 - DERIVATIVE INSTRUMENTS, HEDGING INSTRUMENTS AND HEDGING ACTIVITY

     On October 22, 2002, the Company entered into an interest rate swap contract, which effectively converted $100 million of its 4.75% fixed rate convertible notes to a variable rate. Under the contract, payments are made on a LIBOR based variable rate (2.98% at November 3, 2002).

     The interest rate swap contract is used to adjust the proportion of total debt that is subject to fixed interest rates. This contract is considered to be a hedge against changes in the fair value of the Company's fixed rate debt obligation. Accordingly, the interest rate swap contract is stated at fair value in the Company's consolidated balance sheet and the related portion of fixed rate debt being hedged is stated at an amount equal to the sum of its principal amount plus an adjustment representing the change in fair value of the debt obligation attributable to the interest rate risk being hedged. In addition, changes during any accounting period in the fair value of the interest rate swap contract, as well as offsetting changes in the adjusted carrying value of the related portion of fixed rate debt being hedged, are recognized as adjustments to interest expense in the Company's consolidated statement of operations. The net effect of this interest rate swap contract on the Company's statement of operations is that the interest expense portion of fixed rate debt being hedged is generally recorded based on variable rates.

     At November 3, 2002 the interest rate swap contract was recorded as an asset of $1.6 million in the Company's consolidated balance sheet. The fair value adjustment for the related portion of fixed rate debt being hedged increased the $100 million carrying amount of such debt by approximately $1.7 million (See Note 7). These fair values have been calculated using a discounted cash flow methodology. The net gain or loss on the ineffective portion of the interest rate swap contract was not material to the Company's consolidated statement of operations.

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NOTE 15 - SEGMENT INFORMATION

     The Company operates in a single industry segment as a manufacturer of photomasks, which are high precision quartz plates containing microscopic images of electronic circuits for use in the fabrication of semiconductors. In addition to its manufacturing facilities in the United States, the Company currently has operations in the United Kingdom, Germany, Switzerland, Singapore, Taiwan, and Korea. The Company's 2002, 2001 and 2000 net sales, operating income (loss) and identifiable assets by geographic area were as follows: