UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant To Section 13 Or 15(d) Of The Securities Exchange Act Of 1934
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Date of report (Date of earliest event reported)
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(Exact name of registrant as specified in its charter)
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(Incorporation State or Other Jurisdiction of)
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(Commission File Number)
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(IRS Employer Identification No.)
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(Address of principal executive offices)
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(Zip Code)
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Registrant's Telephone Number, including area code
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(Former name or former address, if changed since last report)
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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this
chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Item 2.02.
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Results of Operations and Financial Condition.
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On December 9, 2020, Photronics, Inc. (the “Company”) issued a press release reporting fourth quarter fiscal 2020 results.
A copy of the press release is furnished as Exhibit 99.1 to this report. The information contained in this Item 2.02 and the attached Exhibits 99.1,
99.2, 99.3, 99.4, and 99.5, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and shall not be incorporated by reference in any filing under the Securities Act of 1933 except as shall be expressly set
forth by specific reference in such filing.
Additionally, the Company will host an investor and analyst day on December 14, 2020. The event will be conducted virtually and feature updates from
management and a Q&A session.
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Item 9.01.
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Financial Statements and Exhibits.
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SIGNATURE
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.
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PHOTRONICS, INC.
(Registrant)
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By:
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/s/ Richelle E. Burr
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Name:
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Richelle E. Burr
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Title:
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Executive Vice President,
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| Chief Administrative Officer, | ||
| General Counsel and Secretary | ||
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Date: December 9, 2020
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Exhibit 99.1
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| For Further Information: | |
| R. Troy Dewar, CFA | |
| Vice President, Investor Relations | |
| (203) 740-5610 | |
| Press Release | tdewar@photronics.com |
Photronics Reports Full Year and Fourth Quarter Fiscal 2020 Results
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2020 revenue was a record $609.7 million, an increase of 11% compared with 2019 and the third consecutive year of record annual revenue
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Fourth quarter 2020 revenue was $149.3 million, down 5% sequentially and 4% year-over-year
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Net income attributable to Photronics, Inc. shareholders was $33.8 million, or $0.52 per diluted share, for the full year of 2020; and $6.5 million, or $0.10 per diluted share, for the fourth
quarter of 2020
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| • |
During the fourth quarter, cash provided by operating activities was $64.8 million, capex was $34.1 million, share repurchases were $17.5 million, and ending cash balance was $278.7 million
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First quarter 2021 guidance: revenue between $145 and $155 million with diluted EPS between $0.07 and $0.14
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BROOKFIELD, Conn. December 9, 2020 (GLOBE NEWSWIRE) — Photronics, Inc. (NASDAQ:PLAB), a worldwide leader
in photomask technologies and solutions, today reported financial results for its fiscal 2020 full year and fourth quarter ended October 31, 2020.
Full year revenue was a record $609.7 million, up 11% compared with 2019. IC revenue was $418.4 million, up 3% compared with last year; and FPD revenue was a record
$191.3 million, up 32% compared with last year.
Fourth quarter revenue was $149.3 million, down 5% compared with the previous quarter and 4% compared with the same quarter last year. Integrated circuit (IC) revenue
was $105.9 million, down 3% sequentially and 6% compared with the fourth quarter of last year. Flat panel display (FPD) revenue was $43.4 million, down 12% compared with last quarter and 1% compared with the same period last year.
Net income attributable to Photronics, Inc. shareholders was $33.8 million ($0.52 per diluted share) compared with $29.8 million ($0.44 per diluted share) in 2019;
fourth quarter net income was $6.5 million ($0.10 per diluted share), compared with $10.8 million ($0.17 per diluted share) for the third quarter of 2020 and $9.7 million ($0.15 per diluted share) for the fourth quarter of 2019.
"We achieved record annual revenue for the third consecutive year in 2020, overcoming tremendous global and regional challenges,” said Peter Kirlin, chief executive
officer. “Fourth quarter revenue declined 5% sequentially as typical seasonality was worsened by geopolitical factors and softness in some sectors. With the decrease in quarterly revenue, profit margins contracted due to the effect of operating
leverage on our income. We increased our cash balance while investing in organic growth and returning cash to our shareholders through share repurchases, ending 2020 in a strong financial position. Our expectations are
for another growth year in 2021, with high single-digit percent growth in revenue and an up-tick in operating profit similar to the 23% increase achieved in 2020.”
First Quarter 2021 Guidance
For the first quarter of 2021, Photronics expects revenue to be between $145 million and $155 million, and net income attributable to Photronics, Inc. shareholders to
be between $0.07 and $0.14 per diluted share.
Conference Call
A conference call to discuss these results is scheduled for 8:30 a.m. Eastern time on Wednesday, December 9, 2020. The call can be accessed by logging onto Photronics'
website at www.photronics.com. The live dial-in number is (877) 377-7095 or (408) 774-4601 outside of the United States and Canada. The call will be archived on Photronics’ website.
Investor and Analyst Day
Photronics will host an investor and analyst day on December 14, 2020. The event will be conducted virtually and feature updates from management and a Q&A session.
More information can be found on the Investors section of Photronics' website at www.photronics.com.
About Photronics
Photronics is a leading worldwide manufacturer of
integrated circuit (IC) and flat panel display (FPD) photomasks. High precision quartz plates that contain microscopic images of electronic circuits, photomasks are a key element in the
IC and FPD manufacturing process. Founded in 1969, Photronics has been a trusted photomask supplier for over 50 years. As of October 31, 2020, the company had 1,728 employees. The company operates 11 strategically located manufacturing facilities in Asia, Europe, and North America. Additional information on the company can be accessed at www.photronics.com.
Forward-Looking Statements
Certain statements in this press release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The
Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements made by or on behalf of the company and its subsidiaries. Such forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause actual results, performance or achievements of Photronics to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by,
followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans,” “may increase,” “may fluctuate,” “will,” “should,” “would,” “may” and “could” or similar words or expressions are
generally forward-looking in nature and not historical facts. Any statements that refer to outlook, expectations or other characterizations of future events, circumstances or results are also forward-looking statements. Important risks, assumptions
and other important factors that could cause future results to differ materially from those expressed in the forward-looking statements are specified in Photronics’ Annual and Quarterly filings with the Securities and Exchange Commission under
headings such as “Forward-Looking Statements”, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in other filings and furnishings made by Photronics with the Securities and Exchange
Commission from time to time. These risks and uncertainties include, but are not limited to, the current pandemic and future recurrences and other developments with respect thereto, governmental responses to the pandemic and related matters,
changes in end markets resulting therefrom, changes in investment, tax, trade, exchange and other laws and regulations, compliance with local, State and Federal laws, rules and regulations including, but not limited to, import and export controls,
tariffs and penalties, fines and violations related thereto, as well as economic, competitive, legal, governmental, political, monetary and fiscal policy, and technological factors and decisions we may make in the future regarding our business,
capital structure and other matters. Photronics undertakes no obligation to release publicly any revisions to any forward-looking statements or, except as required to be disclosed in filings or furnishings with the Securities and Exchange
Commission, to report events or to report the occurrence of unanticipated events. There is no assurance that Photronics’ expectations will be realized.
Exhibit 99.2
PHOTRONICS, INC.
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
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Three Months Ended
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Year Ended
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|||||||||||||||||||
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October 31,
2020
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August 2,
2020
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October 31,
2019
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October 31,
2020
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October 31,
2019
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Revenue
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$
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149,286
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$
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157,895
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$
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156,257
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$
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609,691
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$
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550,660
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Cost of goods sold
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117,401
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120,161
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118,098
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475,037
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429,819
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Gross profit
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31,885
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37,734
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38,159
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134,654
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120,841
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Operating Expenses:
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Selling, general and administrative
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12,790
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13,306
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12,140
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53,582
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52,326
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Research and development
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4,110
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4,492
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4,543
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17,144
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16,394
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Total Operating Expenses
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16,900
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17,798
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16,683
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70,726
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68,720
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Operating income
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14,985
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19,936
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21,476
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63,928
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52,121
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Other (expense) income, net
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(2,937
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)
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(2,135
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)
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(6,111
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)
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(2,327
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)
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(1,420
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)
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Income before income tax provision
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12,048
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17,801
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15,365
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61,601
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50,701
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Income tax provision
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3,469
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4,937
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2,327
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21,258
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10,210
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Net income
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8,579
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12,864
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13,038
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40,343
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40,491
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Net income attributable to noncontrolling interests
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2,119
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2,088
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3,338
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6,523
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10,698
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Net income attributable to Photronics, Inc. shareholders
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$
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6,460
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$
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10,776
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$
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9,700
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$
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33,820
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$
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29,793
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Earnings per share:
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Basic
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$
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0.10
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$
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0.17
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$
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0.15
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$
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0.52
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$
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0.45
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Diluted
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$
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0.10
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$
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0.17
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$
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0.15
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$
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0.52
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$
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0.44
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Weighted-average number of common shares outstanding:
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||||||||||||||||||||
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Basic
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64,193
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64,780
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66,230
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64,866
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66,347
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Diluted
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64,768
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65,247
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66,862
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65,470
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69,155
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Exhibit 99.3
PHOTRONICS, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
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October 31,
2020
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October 31,
2019
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Assets
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Current assets:
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Cash and cash equivalents
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$
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278,665
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$
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206,530
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||||
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Accounts receivable
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134,470
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134,454
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Inventories
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57,269 |
48,155 | ||||||
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Other current assets
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29,735
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38,388
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Total current assets
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500,139
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427,527
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Property, plant and equipment, net
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631,475
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632,441
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Intangible assets, net
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3,437
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7,870
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Other assets
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53,131 |
50,827 |
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Total assets
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$ | 1,188,182 | $ | 1,118,665 | ||||
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Liabilities and Equity
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Current liabilities:
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Debt
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$ | 13,678 | $ | 10,873 | ||||
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Accounts payable and accrued liabilities
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129,261
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141,081
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Total current liabilities
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142,939
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151,954
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Long-term debt
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54,980 |
41,887 |
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Other liabilities
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27,997 |
13,732 |
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Photronics, Inc. shareholders' equity
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804,962
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769,892
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||||||
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Noncontrolling interests
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157,304
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141,200
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||||||
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Total equity
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962,266 | 911,092 |
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Total liabilities and equity
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$
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1,188,182
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$
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1,118,665
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Exhibit 99.4
PHOTRONICS, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
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Year Ended
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||||||||
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October 31,
2020
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October 31,
2019
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|||||||
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Cash flows from operating activities:
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||||||||
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Net income
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$
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40,343
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$
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40,491
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||||
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Adjustments to reconcile net income to net cash provided by operating activities:
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||||||||
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Depreciation and amortization
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93,814
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83,879
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||||||
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Share-based compensation
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4,927
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3,680
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||||||
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Changes in operating assets, liabilities and other
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3,962
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(59,664
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)
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|||||
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Net cash provided by operating activities
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143,046
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68,386
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||||||
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Cash flows from investing activities:
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||||||||
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Purchases of property, plant and equipment
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(70,815
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)
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(178,375
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)
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||||
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Government incentive
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5,263
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27,003
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||||||
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Other
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(159
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)
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(34
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)
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||||
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Net cash used in investing activities
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(65,711
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)
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(151,406
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)
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||||
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Cash flows from financing activities:
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||||||||
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Proceeds from debt
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20,340
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54,633
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||||||
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Contributions from noncontrolling interest
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17,596
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29,394
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||||||
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Purchases of treasury stock
|
(34,394
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)
|
(21,696
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)
|
||||
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Dividends paid to noncontrolling interests
|
(16,151
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)
|
(45,050
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)
|
||||
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Repayments of debt
|
(7,392
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)
|
(61,319
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)
|
||||
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Proceeds from share-based arrangements
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4,239
|
2,071
|
||||||
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Other
|
(248
|
)
|
(92
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)
|
||||
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Net cash used in financing activities
|
(16,010
|
)
|
(42,059
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)
|
||||
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Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
10,986
|
2,381
|
||||||
|
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
72,311
|
(122,698
|
)
|
|||||
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Cash, cash equivalents, and restricted cash, beginning of period
|
209,291
|
331,989
|
||||||
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Cash, cash equivalents, and restricted cash, end of period
|
$
|
281,602
|
$
|
209,291
|
||||
Exhibit 99.5
Q4 2020 Financial Results Conference CallDecember 9, 2020 Photronics, Inc.
Safe Harbor Statement This presentation and some of our comments may contain projections or other
forward-looking statements regarding future events, our future financial performance and/or the future performance of the industry. These statements are predictions, and contain risks and uncertainties. Actual events or results may differ
materially from those presented. These statements include words like “anticipate”, “believe”, “estimate”, “expect”, “forecast”, “may”, “plan”, “project”, “in our view” or the negative thereto. We cannot guarantee the accuracy of any forecasts
or estimates, and we are not obligated to update any forward-looking statements if our expectations change. If you would like more information on the risks involved in forward-looking statements, please see the documents we file from time to
time with the Securities and Exchange Commission. 12/8/2020 2
Please Join Us Photronics’ 2020 Investor and Analyst Day (Virtual)December 14, 202010:00 AM ETDetails
available on “Investors” section of our website: www.photronics.com 12/8/2020 3
2020 Summary Revenue was $609.7M; up 11%3rd consecutive year of record revenueFPD revenue was record
$191.3M, up 32%Revenue of product shipped to China was a record, improving 40%Operating income improved 23%Generated $143M in cash from operating activities, invested $71M in capex, and returned $34M in cash to shareholdersChina facilities
contributed $79M in revenue with operating loss of $2M; Hefei was profitable for the year2021 expectationsRevenue up high single-digit percentOperating income Y/Y growth similar to 2020 12/8/2020 4
Q4 2020 Summary Revenue was $149.3M, down 5% Q/Q and 4% Y/YDemand lower across IC and FPD Revenue to
China was flat Q/Q, down 2% Y/Y; IC achieved record China revenue; FPD was down on Huawei-related disruptionsNet income attributable to Photronics, Inc. shareholders of $6.5M ($0.10/share)Cash balance grew to $279M$65M generated from operating
activity$34M invested in capex$18M returned to investors through share repurchasesChina facilities contributed $21M in revenue and $1M in operating profitNext phase of FPD capacity investment on track for tool delivery in
2021 12/8/2020 5 Strategic investments driving long-term, profitable growth
Income Statement Summary $M (except EPS) Q420 Q320 Q/Q Q419 Y/Y Revenue $ 149.3 $ 157.9 (5%) $
156.3 (4%) Gross Profit $ 31.9 $ 37.7 (16%) $ 38.2 (16%) Gross Margin 21.4% 23.9% (250 bps) 24.4% (300 bps) Operating Income $ 15.0 $ 19.9 (25%) $ 21.5 (30%) Operating Margin 10.0% 12.6% (260 bps) 13.7% (370 bps) Other
income (expense) ($ 2.9) ($ 2.1) ($ 0.8) ($ 6.1) $ 3.2 Income tax provision $ 3.5 $ 4.9 ($ 1.5) $ 2.3 $ 1.1 Minority interest $ 2.1 $ 2.1 - $ 3.3 ($ 1.2) Net Income* $ 6.5 $ 10.8 (40%) $ 9.7 (33%) Diluted EPS* $ 0.10 $
0.17 ($ 0.07) $ 0.15 ($ 0.05) Days in quarter 90 91 (1) 91 (1) Gross and operating margin down on lower revenue (operating leverage)China operations contributed $1M to operating incomeOther income / (expense) primarily due to FX gain
/ (loss)Minority interest includes IC JVs in Taiwan and China 12/8/2020 6 *Net income attributable to Photronics, Inc. shareholders
$M Q420 Q320 Q/Q Q419 Y/Y High-End* $ 38.2 $ 38.7 (1%) $ 45.0 (15%) Mainstream $ 67.8 $
70.0 (3%) $ 67.6 - Total $ 105.9 $ 108.7 (3%) $ 112.5 (6%) IC Photomask Revenue 12/8/2020 7 Improvement at some logic foundries in US and Asia; memory demand softRecord China revenue in Q420Up 14% Q/Q and 6% Y/YRepresents 25% of
Q420 IC revenueOutlookSome sectors benefiting from remote work and educationTrade uncertainty remains post US electionPotential headwinds if governments escalate shelter-in-place mandates *28nm and smaller Total may differ due to rounding
FPD Photomask Revenue 12/8/2020 8 High-end down Q/Q on lower AMOLED (Huawei) and G10.5+Strong LCD
market causes panel makers to run current product, limiting new design activityChina revenue Down 12% Q/Q and 10% Y/YRepresents 56% of Q420 FPD revenueOutlookDynamic market environmentRecovery underway as supply chain adjusts to Huawei
restrictions *≥G10.5, AMOLED and LTPS $M Q420 Q320 Q/Q Q419 Y/Y High-End* $ 31.3 $ 36.7 (15%) $ 25.4 23% Mainstream $ 12.1 $ 12.6 (4%) $ 18.3 (34%) Total $ 43.4 $ 49.2 (12%) $ 43.7 (1%) Total may differ due to
rounding
Select Financial Data $M Q420 Q320 Q419 Cash $ 279 $ 261 $ 207 Debt $ 69 $ 53 $ 53 Net
Cash* $ 210 $ 208 $ 154 Operating Cash Flow $ 65 $ 17 $ 45 Capital Expenditures $ 34 $ 7 $ 18 Government Incentives for Capital Equipment - - $ 9 Share repurchase $ 18 - $ 11 Debt is mostly local China borrowing to finance
fixed assets, working capital and VAT2020 capex was $71M; expect 2021 capex to be ~$100MBalance sheet able to fund investments, share repurchases, and strategic M&A opportunities 12/8/2020 9 *Net cash defined as cash and cash equivalents
less long-term borrowings (including current portion), as reported in accordance with GAAP
Q121 Guidance Revenue ($M) $145 - $155 Operating Margin 8% - 12% Taxes ($M) $4 - $5 EPS $0.07 -
$0.14 Diluted Shares (M) ~64.5 Positive industry demand trends due to remote work and learning offset by typical seasonalityOutlook clouded by geopolitical uncertaintyCoronavirus reactionUS/China trade policiesWe remain focused on expanding
margins and improving cash flows 12/8/2020 10
For Additional Information:R. Troy Dewar, CFAVice President, Investor
Relations203.740.5610tdewar@photronics.com Thank you for your interest!
Appendix
Total Revenue 12/8/2020 13 IC FPD Total may differ due to rounding
IC Photomask Revenue 12/8/2020 14 Mainstream High-End High-End: 28nm and smaller; total may
differ due to rounding
FPD Photomask Revenue 12/8/2020 15 Mainstream High-End High-End: ≥G10.5, AMOLED and LTPS; total
may differ due to rounding