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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

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FORM 8-K

 

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CURRENT REPORT

Pursuant To Section 13 OR 15(d) Of The Securities Exchange Act Of 1934

Date of report (Date of earliest event reported) December 5, 2006

 

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PHOTRONICS, INC.

(Exact name of registrant as specified in its charter)

 

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Connecticut		0-15451		06-0854886
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification Number)

 

15 Secor Road, Brookfield, CT		06804
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, including area code (203) 775-9000

 

(Former name or former address, if changed since last report)

 

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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Item 2.02.		Results of Operations and Financial Condition
		On December 5, 2006, the Company issued a press release reporting fiscal fourth quarter 2006 and fiscal year results for the period ended October 29, 2006. A copy of the press release is attached to this 8-K.
Item 9.01.		Financial Statements and Exhibits
(d) Exhibits
99.1		Press Release dated December 5, 2006.
99.2		Slides #1 and #2 provided for conference call.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

DATE December 6, 2005						BY		/s/ Sean T. Smith
								Sean T. Smith
								Senior Vice President and Chief Financial Officer

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PHOTRONICS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(in thousands, except per share amounts)

 

		Three Months Ended								Year Ended
		October 29 2006				October 30 2005				October 29 2006				October 30 2005
Net sales		$	115,297			$	111,793			$	454,875			$	440,770
Costs and expenses:
Cost of sales			79,166				76,660				307,851				295,649
Selling, general and administrative			15,777				14,293				62,215				54,295
Research and development			4,353				8,350				27,337				32,152
Consolidation, restructuring and related charges			2,423				—				15,639				—
Operating income			13,578				12,490				41,833				58,674
Other income (expense), net			(739	)			(200	)			3,553				(3,329	)
Income before income taxes and minority interest			12,839				12,290				45,386				55,345
Income tax provision			1,139				2,010				10,462				10,058
Income before minority interest			11,700				10,280				34,924				45,287
Minority interest			(1,881	)			(1,541	)			(5,592	)			(6,634	)
Net income		$	9,819			$	8,739			$	29,332			$	38,653
Earnings per share:
Basic		$	0.24			$	0.21			$	0.71			$	1.09
Diluted		$	0.21			$	0.19			$	0.66			$	0.95
Weighted average number of common shares outstanding:
Basic			41,442				41,263				41,369				35,519
Diluted			51,179				51,066				51,072				45,256

 

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PHOTRONICS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands)

 

		October 29 2006			October 30 2005
Assets
Current assets:
Cash, cash equivalents and short-term investments of $69,899 in 2006 and $90,600 in 2005		$	199,324		$	286,649
Accounts receivable			84,299			70,006
Inventories			19,209			20,536
Other current assets			16,055			7,144
Total current assets			318,887			384,335
Property, plant and equipment, net			443,637			412,429
Goodwill			138,534			136,334
Investment in joint venture			64,365			—
Other intangibles, net			70,939			—
Other assets			9,321			12,631
		$	1,045,683		$	945,729
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of long-term debt		$	86,903		$	4,813
Accounts payable			53,907			42,923
Other accrued liabilities			50,386			36,042
Total current liabilities			191,196			83,778
Long-term debt			170,288			238,949
Deferred income taxes and other liabilities			23,920			15,310
Minority interest			45,997			45,817
Shareholders’ equity			614,282			561,875
		$	1,045,683		$	945,729

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PHOTRONICS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(in thousands)

 

		Year Ended
		October 29 2006				October 30 2005
Cash flows from operating activities:
Net income		$	29,332			$	38,653
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			89,090				86,022
Restructuring and related charges			15,639				—
Changes in assets and liabilities and other			(17,862	)			17,892
Net cash provided by operating activities			116,199				142,567
Cash flows from investing activities:
Purchases of property, plant and equipment			(94,646	)			(121,354	)
Purchases of short-term investments			(82,582	)			(94,550	)
Proceeds from sales of short-term investments and other			104,962				88,629
Investment in joint venture, technology and supply agreements			(120,505	)			—
Acquisition of additional interest in PK Ltd.			(8,432	)			(58,248	)
Net cash used in investing activities			(201,203	)			(185,523	)
Cash flows from financing activities:
Proceeds from (repayment of) long-term debt			11,737				(72,117	)
Proceeds from issuance of common stock			1,809				170,667
Net cash provided by financing activities			13,546				98,550
Effect of exchange rate changes on cash flows			4,834				(1,845	)
Net increase (decrease) in cash and cash equivalents			(66,624	)			53,749
Cash and cash equivalents, beginning of period			196,049				142,300
Cash and cash equivalents, end of period		$	129,425			$	196,049
Supplemental disclosure of cash flow information:
Change in accrual for purchases of property, plant and equipment		$	18,692			$	(19,834	)

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PHOTRONICS, INC.

EXHIBIT INDEX

 

Exhibit No.		Subject Matter
99.1		Press Release dated December 5, 2006.
99.2		Slides #1 and #2 provided for conference call.

Exhibit 99.1

 

Press Release		FOR FURTHER INFORMATION: Michael W. McCarthy Vice President – Corporate Communications Photronics, Inc. (203)775-9000 mmccarthy@brk.photronics.com

FOR IMMEDIATE RELEASE

Tuesday, December 5, 2006

PHOTRONICS ANNOUNCES RECORD FISCAL YEAR REVENUES

Fourth Quarter Results Exceed Revenue and Earnings Guidance

Fiscal Year 2006 Highlights

 

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Record Revenues of $455 Million

 

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Free Cash Flow of $22 million

BROOKFIELD, Connecticut December 5, 2006 — Photronics, Inc. (Nasdaq:PLAB), a worldwide leader in supplying innovative imaging technology solutions for the global electronics industry, today reported fiscal 2006 fourth quarter and fiscal year results for the period ended October 29, 2006.

Sales for the quarter were $115.3 million, up 3.1%, compared to $111.8 million for the fourth quarter of 2005. Semiconductor photomasks accounted for $90.5 million or 78.5% of revenues during the fourth quarter of fiscal 2006, while sales for flat panel display (FPD) photomasks accounted for $24.8 million or 21.5% of revenues. Net income for the fourth quarter of fiscal 2006 amounted to $9.8 million, or $0.21 per diluted share, compared to the prior year’s fourth quarter net income of $8.7 million, or $0.19 per diluted share. Net income for the fourth quarter of 2006 included a charge of $2.4 million after tax, or $0.05 per diluted share in connection with the Company’s previously disclosed restructuring of its operations in North America.

Sales for the 2006 fiscal year were $454.9 million, up 3.2% from the $440.8 million reported in fiscal 2005. Semiconductor photomasks accounted for $355.1 million or 78.1% of revenues during fiscal 2006, while sales for FPD photomasks accounted for $99.8 million or 21.9%. Year-over-year, semiconductor photomask revenues decreased 1.8%, while FPD photomask revenues increased 25.9%. Net income for fiscal 2006 amounted to $29.3 million, or $0.66 per diluted share, compared to the prior fiscal year’s net income of $38.7 million, or $0.95 per diluted share. Net income for the 2006 fiscal year included a charge of $15.6 million after tax, or $0.31 per diluted share in connection with the Company’s previously disclosed restructuring of its operations in North America.

Michael J. Luttati, Chief Executive Officer shared his views of the Company’s reported results. “We are very pleased to have finished our fiscal year on a high note with solid performance in our fourth quarter. The entire Photronics team executed with clarity and purpose throughout fiscal 2006 to deliver positive results while undertaking a significant transformation of the Company. As we take measure of our many achievements, which include a third consecutive year of record revenues; sustained profitability; and a self funded capital investment

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Photronics, Inc. 15 Secor Road • Brookfield, Connecticut 06804 • (203)775-9000 • www.photronics.com

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PHOTRONICS ANNOUNCES RECORD FISCAL YEAR REVENUES		PAGE TWO

program, it is important to frame them around three major initiatives. First, our presence in the FPD mask market was meaningfully expanded as we capitalized on investments in our existing Korean fab and brought on-line our new fab in Taichung, Taiwan. Second, we reshaped the profile of our global manufacturing network as part of our strategy to shift capacity into the Asian and European markets where we could improve asset utilization. Finally, there is the joint venture with Micron Technology to form the MP Mask Technology Center, LLC. This joint venture represents a unique customer-supplier partnership, which will have a profound effect on Photronics’ global business model in terms of accelerating our penetration into the market for sub-65 nanometer designs.”

A conference call with investors and the media to discuss these results can be accessed by logging onto Photronics’ web site at www.photronics.com, then clicking on the “Conference Calls” button in the top right corner of the home page. The call is scheduled for 8:30 a.m. Eastern Time on Wednesday, December 6^th and will be archived for instant replay access until the Company reports its fiscal first quarter results after the market closes on Tuesday, February 13, 2007. The live call dial-in number is (212)676-5290.

# # #

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.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Certain statements in this release are considered “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All forward looking statements involve risks and uncertainties. In particular, any statement contained in this release regarding the consummation and benefits of future acquisitions, expectations with respect to the joint venture, the planned fabrication facility, future sales, financial performance, operating efficiencies and product expansion, are subject to known and unknown risks, uncertainties and contingencies, many of which are beyond the control of the Company. These factors may cause actual results, performance or achievements to differ materially from anticipated results, performances or achievements. Factors that might affect such forward looking statements include, but are not limited to, overall economic and business conditions; the demand and receipt of orders for the Company’s products; competitive factors in the industries and geographic markets in which the Company competes; changes in federal, state and foreign tax requirements (including tax rate changes, new tax laws and revised tax law interpretations); the Company’s ability to place new equipment in service on a timely basis; interest rate fluctuations and other capital market conditions, including foreign currency rate fluctuations; economic and political conditions in international markets; the ability to obtain a new bank facility or other financings; the ability to achieve anticipated synergies and other cost savings in connection with acquisitions and productivity programs; uncertainties with respect to the integration and management of a new joint venture, delays in the construction and equipping of the planned fabrication facility, the ability to transfer licensed applications to other applications, the timing, impact and other uncertainties of future acquisitions and investments; the seasonal and cyclical nature of the semiconductor industry; the availability of capital; management changes; damage or destruction to our facilities by natural disasters, labor strikes, political unrest or terrorist activity; the ability to fully utilize its tools; the ability of the Company to receive desired yields, pricing, product mix, and market acceptance of its products; changes in technology; and other risks and uncertainties set forth in the Company’s SEC filings from time to time. Any forward-looking statements should be considered in light of these factors. The Company assumes no obligation to update the information in this release.

06-31

Photronics, Inc. 15 Secor Road • Brookfield, Connecticut 06804 • (203)775-9000 • www.photronics.com

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