Washington, D.C. 20549



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

Date of report (Date of earliest event reported)
December 14, 2020

(Exact name of registrant as specified in its charter)

(State or Other Jurisdiction of) Incorporation
(Commission File Number)
(IRS Employer Identification No.)

15 Secor Road, Brookfield, CT

(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)

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))

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:

Title of each class
Trading Symbol(s)
Name of each exchange on which registered
COMMON STOCK, $0.01 par value per share
NASDAQ Global Select Market

Item 7.01.
Regulation FD Disclosure.

The virtual analyst and investor day presentation included as Exhibit 99.1 to this report may be presented at meetings with investors, analysts, and others on December 14, 2020. A copy of the presentation will be posted on the Photronics, Inc. website.

The information in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed subject to the requirements of amended Item 10 of Regulation S-K, nor shall it be deemed incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing. The furnishing of this information hereby shall not be deemed an admission as to the materiality of any such information.

Item 9.01.
Financial Statements and Exhibits.

Photronics’ Virtual Analyst and Investor Day Presentation dated December 14, 2020.

/s/ Richelle E. Burr
Richelle E. Burr
Executive Vice President,
Chief Administrative Officer,
General Counsel and Secretary
Date:  December 14, 2020

Exhibit 99.1

 Virtual Analyst and Investor DayDecember 14, 2020  Global Merchant Photomask Leader 

 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.  12/14/2020  2 

 Overview & Strategy  Peter Kirlin, CEO 

 Today’s objectives  Present PLAB investment thesisReview progress since 2018 investor dayDescribe next growth phaseDemonstrate alignment with market trendsProvide long-term financial targetsAnswer your questions  12/14/2020  4 

 A Compelling Investment Thesis  Global leader in merchant photomask industryDelivering growth by leveraging core competenciesGrowing more quickly than the marketTechnology aligned with secular growth trendsChina industry expansion (IC & FPD) – Made in China 2025Display technology inflectionsInvestment growth strategy to double EPSTop-line growing at twice industry growth rateOperating leverage expands marginsIncreasing cash flow to fund growth and share repurchase  12/14/2020  5 

 Leading merchant with unmatched global presence  12/14/2020  6  ICFPDIC & FPD      Unmatched Global Footprint11 Strategically Located Manufacturing Facilities                          Sources: SEMI 2019 Photomask Characterization Study; internal estimates 

 Phases of Photronics revenue growth  12/14/2020  7  Phase I: 1969 – 1986Technology StartupOrganic GrowthMostly USPre-IPO  Phase II: 1986 – 2002 M&A GrowthMerchant ConsolidationGlobal Expansion  Phase III: 2003 – 2017Enter High-End MarketForm Strategic PartnershipsInvest in High-End CapabilityEstablish FPD PresenceImprove Balance Sheet  Phase IV: 2018 and Beyond Leverage China 1st Mover AdvantageExtend Technology LeadershipIncrease Market ShareStrategic Capital Allocation 

 Investment focus driving financial results  12/14/2020  8  535  551  610  +11% CAGR 

 Delivering on commitments    2018 Investor Day Commitment  Results  Growth  $630M revenues and $0.80 EPS  $610M and $0.52, impacted by COVID lockdowns & trade war  Market Position  China production to start H119  Hefei delivered; Xiamen plan modified    Enter G10.5+ market  Market leader    Grow market share  Delivered  Financial Strength  Cash / net cash equal to pre-investment  2017: cash = $308M; net cash = $246M2020: cash = $279M; net cash = $210M plus $79M in share repurchases since 2018    Improve ROIC  2017 = 1.4%2020 = 3.9%   12/14/2020  9 

 Growing China business  We have growing business in China34% of total revenue in 202023% of IC revenue58% of FPD revenueGrowing strong since 2017IC +67% CAGRFPD +71% CAGRLocal manufacturing accelerates growthCustomer contracts fosters sustainable resultsIC JV enables us to compete more effectively  12/14/2020  10  +69% CAGR 

 FPD nearly doubled over 3 years  Targeted high-end investmentsG10.5+AMOLED & LTPS for mobilePartner with largest panel makersRunway left for advance display growthMobile platformsAdvanced TVMini & Micro LED2021 investments aligned with market trends  12/14/2020  11  +24% CAGR 

 Evolving investment focus  2018 Strategic Targets  2020 Strategic Targets  G10.5+  Complete  AMOLED inflection point  Advanced display technologies: AMOLED for mobile; OLED for TV/IT; emerging Micro and Mini LED  China geographic expansion  Continues, driven by Made In China 2025 industrial policy and growing nationalism  12/14/2020  12 

 2021-2023 Targets  Double industry growth rates: 5-7%Expanding gross and operating margins, reaching high twenties and high teens, respectivelyMore than doubling EPS to well in excess of $1 / share  12/14/2020  13 

 Summary  We have sustained double digit growth in a very challenging environment over the past 3 yearsOur leadership position is expandingMoving forward our investment focus is narrowing to drive accretive growthWith a business model demonstrated to deliver increasing shareholder value  12/14/2020  14 

 Delivering Technology to the Market  Chris Progler, CTO 

 Photomasks help enable the connected world  Golden age of design and integration as differentiatorsGlobal dynamics enhance mask value: technology, yield, cost, speed, security, trustIncreasing barriers to entryLeadership through partnership: Process of Record, Long-Term Purchase Agreement, Joint Development ProjectsMarket pushing more technology into masks: customization, design activityMulti-node supply and demand trends favorableFocused and opportunity driven investments: region, customer, technology  12/14/2020  16  Mask Enables Robust Design  Market Win for Customer 

 Photomask opportunity transcends lithography design nodes  LegacyCostCapacity Continuity  High-EndChip enablementDesign integrationNew fab ramp  12/14/2020  17  Mid-RangeTime to marketDesign flexibilityYield 

 High-tech photomask demand drivers  ICEUV – mask and litho tech still maturing, consumes heavy writing resourceMask complexity and count needed for advanced designsSoC trends – multi-function customization alongside SoC disaggregationCloud to edge computing migration and design activityFPDMask carrying more of lithography loadAMOLED migrating down from premium smartphonesTV display innovation: lighting, size, resolution, compensationsGaming, remote work and learning driving demand  12/14/2020  18 

 Speed of design turns takes center stage across the landscapeAdvanced mask complexity, level count and yieldCapacity constraints at mid and legacy nodesTechnologies that enable our photomask velocityCustomer collaboration tools to streamline process developmentHigh yielding, self-correcting and efficient mask processesRapid mask tuning connected to device and panel performanceProcess fan out and nanometer scale harmonization for tech localizationTechnology investments for IC are targeted at delivering world class mask velocityWe are developing technology to transform the speed at which first time right photomasks can be delivered to customers  Photomask velocity: A key differentiator      12/14/2020  19 

 Technology as a tool to support our business growth  12/14/2020  Growth Investment Cycle  +12% CAGR  20 

 How has China’s strategy energized served markets for growth?  Domestic investments add local capacity to win share and support national agendaForeign competition must improve product innovation to sustain advantage and shareIntegrated circuits and displays elevated to center stage in economic and security landscapePhotomasks stand at crossroad of design and manufacturing enablementExamples:70% of LCD and 50% of AMOLED capacity to China by 2021Advanced TV shipments to double by 2024. Mask count per advanced TV on path to doubling.Foundry capital spending increased >35% in 2020  12/14/2020  21 

 “Made in China 2025” driving growth  12/14/2020  22  Source: Internal Estimates   

 Summary  Photomasks are enabling technology for IC and display in the connected worldKey tech inflections driving growthChina investment and global share goals in IC and FPD: LCD to mobile pivot, multi-node IC design activitySweet spot mid-range IC nodes to support pervasive chip implementation. Capacity constraints.Leaders continue innovation driving advanced mask complexity and outsourcingIC and display take center stage for global economic and security independenceOur investment strategy is aligned with these market trendsWe develop focused processes and products to enhance customer yield and time to marketWe are the leading trusted partner in the marketplace  12/14/2020  23  Customer 

 Financial Model & Outlook  John Jordan, CFO 

 2020 Summary  Several revenue records establishedRevenue of $609.7MFPD revenue of $191.3MChina revenue of $207.5M (IC = $97.1M; FPD = $110.5M)Operating income improved 23% Y/YGenerated $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 year  12/14/2020  25 

 Illustrative Target Model    2018  2019  2020  Illustrative Target Model3-Year Horizon      Revenue  $535  $551  $610  $7005% CAGR  $7256% CAGR  $7507% CAGR  Gross Margin  25%  22%  22%  24-26%  26-28%  27-29%  Operating Margin  12%  9%  10%  13-15%  15-17%  17-19%  Operating Cash Flow  $131  $68  $143  $150-160  $160-170  $175-185  Free Cash Flow  $39  ($83)  $77  $80-90  $90-100  $100-110  EPS  $0.59  $0.44  $0.52  $1.00-1.05  $1.15-1.25  $1.25-1.35  12/14/2020  26 

 Clear capital deployment priorities  Fund organic growthGeographic expansion into ChinaInvestments to maintain technical leadershipCapacity expansion when reciprocated by customer commitmentFinancial discipline to improve ROICExplore strategic M&APhotomask industry – IC & FPDAdjacencies to increase revenue diversificationShare repurchaseRepurchased 7.9M shares ($79M) since 2018Redeemed $115M in convertible debt since 2016, eliminating 10.3M potentially dilutive shares  27  -27%  12/14/2020 

 Financial discipline improves shareholder value  Targeted investments drive top-line growth in excess of marketOperating leverage and cost reductions expand marginsTarget operating margins mid- to high-teensTarget incremental margins 50%Strong cash flow generation fortifies balance sheetCapital deployment priorities to improve ROIC  12/14/2020  28 

 Summary  Recent performance on upward trendGrowing more quickly than marketsMargin expansion creates earnings powerStrong cash flow generationStrategic use of cash to fund growth and enhance shareholder returns  12/14/2020  29 

 A Compelling Investment Thesis  Global leader in merchant photomask industryDelivering growth by leveraging core competenciesGrowing more quickly than the marketTechnology aligned with secular growth trendsChina industry expansion (IC & FPD) – Made in China 2025Display technology inflectionsInvestment growth strategy to double EPSTop-line growing at twice industry growth rateOperating leverage expands marginsIncreasing cash flow to fund growth and share repurchase  12/14/2020  30 


 For Additional Information:R. Troy Dewar, CFAVice President, Investor Relations203.740.5610tdewar@photronics.com   Thank you for your interest!