UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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(State or Other Jurisdiction of Incorporation)
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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)
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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:
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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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N/A
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Results of Operations and Financial Condition.
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On May 26, 2021, Photronics, Inc. issued a press release reporting second quarter fiscal 2021 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.
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Item 9.01.
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Financial Statements and
Exhibits.
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(d)
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Exhibits
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Press Release dated May 26, 2021.
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Condensed Consolidated Statements of Income.
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Condensed Consolidated Balance Sheets.
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Condensed Consolidated Statements of Cash Flows.
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Photronics Q2 2021 Financial Results Conference Call May 26, 2021 slides.
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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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Executive Vice President,
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Chief Administrative Officer,
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General Counsel and Secretary
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Date: May 26, 2021
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Exhibit 99.1
Press Release
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For Further Information:
R. Troy Dewar, CFA
Vice President, Investor Relations
(203) 740-5610
tdewar@photronics.com
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Photronics Reports Second Quarter Fiscal 2021 Results
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•
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Revenue was a record $159.8 million, up 5% sequentially and 12% year-over-year
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•
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Net income attributable to Photronics, Inc. shareholders was $10.5 million, or $0.17 per diluted share
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•
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Cash provided by operating activities was $31.9 million, capex was $56.0 million, share repurchases were $10.0 million, and ending cash balance was
$256.0 million
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•
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Third quarter 2021 guidance: revenue between $162 and $172 million with diluted EPS between $0.19 and $0.25
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BROOKFIELD, Conn. May 26, 2021 (GLOBE NEWSWIRE) — Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in photomask technologies and
solutions, today reported financial results for its fiscal 2021 second quarter ended May 2, 2021.
Second quarter revenue was $159.8 million, up 5% compared with the previous quarter and 12% compared with the same quarter last year. Integrated circuit (IC)
revenue was $112.0 million, up 7% sequentially and 16% compared with the second quarter of last year. Flat panel display (FPD) revenue was $47.8 million, up 1% compared with last quarter and 4% compared with the same period last year.
Net income attributable to Photronics, Inc. shareholders was $10.5 million, or $0.17 per diluted share, compared with $8.0 million, or $0.13 per diluted
share, for the first quarter of 2021 and $6.3 million, or $0.10 per diluted share, for the second quarter of 2020.
"We achieved record revenue in the quarter, with growth in both IC and FPD, demonstrating the strength and resiliency of our design-driven demand model,
supported by world-class capabilities and unmatched global presence,” said Peter Kirlin, chief executive officer. “Our customers are responding to growing demand for their products, as they innovate to meet more advanced specifications. This
creates an environment with strong design activity, driving mask demand across our business. As the largest merchant photomask manufacturer, we are well positioned to benefit from these trends. This ongoing market
strength gives us confidence in meeting our long-term financial objectives as well as support for continued investment to expand capacity in our operations. Gross and operating margins expanded to 24.6 % and 13.0 %, respectively; and we are
solidly executing our 2021 plan to outperform our market and increase operating profit by 23%.”
Third Quarter 2021 Guidance
For the third quarter of 2021, Photronics expects revenue to be between $162 million and $172 million, and net income attributable to Photronics, Inc.
shareholders to be between $0.19 and $0.25 per diluted share.
Conference Call
A conference call to discuss these results is scheduled for 8:30 a.m. Eastern time on Wednesday, May 26, 2021. 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.
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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Six Months Ended
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May 2,
2021 |
January 31,
2021 |
May 3,
2020 |
May 2,
2021 |
May 3,
2020 |
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Revenue
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$
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159,763
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$
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152,067
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$
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142,774
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$
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311,830
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$
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302,510
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Cost of goods sold
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120,514
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121,538
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112,341
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242,052
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237,475
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Gross profit
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39,249
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30,529
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30,433
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69,778
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65,035
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Operating Expenses:
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Selling, general and administrative
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14,067
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14,053
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13,267
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28,120
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27,486
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Research and development
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4,375
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4,710
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4,462
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9,085
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8,541
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Total Operating Expenses
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18,442
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18,763
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17,729
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37,205
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36,027
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Operating income
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20,807
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11,766
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12,704
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32,573
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29,008
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Other income (expense), net
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(772
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)
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680
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(951
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)
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(92
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)
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2,745
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Income before income tax provision
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20,035
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12,446
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11,753
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32,481
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31,753
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Income tax provision
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3,714
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2,937
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3,781
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6,651
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12,853
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Net income
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16,321
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9,509
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7,972
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25,830
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18,900
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Net income attributable to noncontrolling interests
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5,795
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1,473
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1,688
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7,268
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2,316
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Net income attributable to Photronics, Inc. shareholders
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$
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10,526
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$
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8,036
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$
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6,284
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$
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18,562
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$
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16,584
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Earnings per share:
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Basic
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$
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0.17
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$
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0.13
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$
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0.10
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$
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0.30
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$
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0.25
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Diluted
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$
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0.17
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$
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0.13
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$
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0.10
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$
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0.30
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$
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0.25
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Weighted-average number of common shares outstanding:
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Basic
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62,054
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62,475
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64,937
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62,265
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65,246
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Diluted
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62,568
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63,005
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65,417
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62,786
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65,933
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Exhibit 99.3
PHOTRONICS, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
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May 2,
2021 |
October 31,
2020 |
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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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255,965
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$
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278,665
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Accounts receivable
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143,923
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134,470
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Inventories
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56,384
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57,269
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Other current assets
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39,336
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29,735
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Total current assets
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495,608
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500,139
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Property, plant and equipment, net
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717,426
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631,475
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Intangible assets, net
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1,356
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3,437
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Other assets
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51,599
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53,131
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Total assets
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$
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1,265,989
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$
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1,188,182
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Liabilities and Equity
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Current liabilities:
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Debt
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$
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25,658
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$
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13,678
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Accounts payable and accrued liabilities
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133,629
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129,261
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Total current liabilities
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159,287
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142,939
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Long-term debt
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88,444
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54,980
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Other liabilities
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27,441
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27,997
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Photronics, Inc. shareholders' equity
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821,392
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804,962
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||||||
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Noncontrolling interests
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169,425
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157,304
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||||||
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Total equity
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990,817
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962,266
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Total liabilities and equity
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$
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1,265,989
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$
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1,188,182
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||||
Exhibit 99.4
PHOTRONICS, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
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Six Months Ended
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||||||||
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May 2,
2021 |
May 3,
2020 |
|||||||
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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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25,830
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$
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18,900
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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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47,121
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47,896
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||||||
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Share-based compensation
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2,723
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2,576
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||||||
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Changes in operating assets, liabilities and other
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(17,455
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)
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(8,049
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)
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||||
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Net cash provided by operating activities
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58,219
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61,323
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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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(73,516
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)
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(30,127
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)
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||||
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Government incentives
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5,775
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5,260
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||||||
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Other
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(157
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)
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(139
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)
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||||
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Net cash used in investing activities
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(67,898
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)
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(25,006
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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 long-term debt
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12,439
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1,140
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||||||
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Contribution from noncontrolling interest
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-
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7,600
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||||||
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Purchase of treasury stock
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(23,250
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)
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(16,894
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)
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||||
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Repayments of debt
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(8,636
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)
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(389
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)
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||||
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Proceeds from share-based arrangements
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1,180
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3,423
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||||||
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Other
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(371
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)
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(251
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)
|
||||
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Net cash used in financing activities
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(18,638
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)
|
(5,371
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)
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||||
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Effect of exchange rate changes on cash, cash equivalents, and restricted cash
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5,686
|
475
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||||||
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Net (decrease) increase in cash, cash equivalents, and restrcited cash
|
(22,631
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)
|
31,421
|
|||||
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Cash, cash equivalents, and restricted cash, beginning of period
|
281,602
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209,291
|
||||||
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Cash, cash equivalents, and restricted cash, end of period
|
$
|
258,971
|
$
|
240,712
|
||||
Exhibit 99.5
Q2 2021 Financial Results Conference CallMay 26, 2021 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. 5/26/2021 2
Q2 2021 Summary Revenue was a record $159.8M, up 5% Q/Q and 12% Y/YGrowth achieved in both IC and
FPD on strong design-driven demandRevenue to China was up 16% Q/Q and 23% Y/YNet income attributable to Photronics, Inc. shareholders of $10.5M ($0.17/share)Cash balance $256M$32M generated from operating activity$56M invested in capex$10M
returned to investors through share repurchasesNext phase of FPD capacity investment on track for tool delivery in 2021Investing to expand mainstream IC capacity 5/26/2021 3 Strategic investments driving long-term, profitable growth
Income Statement Summary $M (except EPS) Q221 Q121 Q/Q Q220 Y/Y Revenue $ 159.8 $
152.1 5% $ 142.8 12% Gross Profit $ 39.2 $ 30.5 29% $ 30.4 29% Gross Margin 24.6% 20.1% 450 bps 21.3% 330 bps Operating Income $ 20.8 $ 11.8 77% $ 12.7 64% Operating Margin 13.0% 7.7% 530 bps 8.9% 410 bps Other
income (expense) ($ 0.8) $ 0.7 ($ 1.5) ($ 1.0) $ 0.2 Income tax provision $ 3.7 $ 2.9 $ 0.8 $ 3.8 ($ 0.1) Minority interest $ 5.8 $ 1.5 $ 4.3 $ 1.7 $ 4.1 Net Income* $ 10.5 $ 8.0 31% $ 6.3 68% Diluted EPS* $ 0.17 $
0.13 $ 0.04 $ 0.10 $ 0.07 Days in quarter 91 92 (1) 91 - Margin improved with higher revenue and better mainstream IC ASPIncremental margins >110% Q/QOther income / (expense) primarily due to FX gain / (loss); Q221 includes China
interest expense subsidyMinority interest from IC JVs in Taiwan and China 5/26/2021 4 *Net income attributable to Photronics, Inc. shareholders
$M Q221 Q121 Q/Q Q220 Y/Y High-End* $ 41.3 $ 36.8 12% $ 38.3 8% Mainstream $ 70.7 $
68.2 4% $ 58.6 21% Total $ 112.0 $ 105.0 7% $ 96.8 16% IC Photomask Revenue 5/26/2021 5 High-end growth driven by logic recovery, especially in Taiwan & ChinaMainstream grew on positive demand trends and higher ASPChina
revenue +23% Q/Q and +53% Y/Y; represents 28% of IC revenueOutlookContinued strength from remote work and educationMainstream demand strong, with positive pricingContinued macro risk from trade policies and shelter-in-place mandates *28nm
and smaller Total may differ due to rounding
FPD Photomask Revenue 5/26/2021 6 High-end improved on strong LTPS & AMOLED demand for mobile
displaysMainstream down as capacity was sold out to meet high-end demandChina revenue +8% Q/Q and -1% Y/Y; represents 53% of FPD revenueOutlookDynamic market environmentMobile demand strength expected to continueCapacity expansions coming
with new tool installationsTechnology development drives demand for higher-value masks *≥G10.5, AMOLED and LTPS $M Q221 Q121 Q/Q Q220 Y/Y High-End* $ 39.4 $ 34.6 14% $ 31.8 24% Mainstream $ 8.4 $ 12.5 (33%) $
14.1 (41%) Total $ 47.8 $ 47.1 1% $ 45.9 4% Total may differ due to rounding
Select Financial Data $M Q121 Q121 Q220 Cash $ 256 $ 279 $ 238 Debt $ 114 $ 98 $ 53 Net
Cash* $ 142 $ 180 $ 184 Operating Cash Flow $ 32 $ 26 $ 31 Capital Expenditures $ 56 $ 18 $ 16 Government Incentives for Capital Equipment $ 5 $ 0.4 $ 3 Share repurchase $ 10 $ 13 $ 6 Debt is US equipment lease and local
China loansExpect 2021 capex to be ~$120MCompleting initial China IC investmentNext phase of FPD investmentMainstream IC capacity expansionTotal share repurchases of $41M under current $100M plan (Sep 2020)Balance sheet able to fund
investments, share repurchases, and strategic M&A opportunities 5/26/2021 7 *Net cash defined as cash and cash equivalents less long-term borrowings (including current portion), as reported in accordance with GAAP
Q321 Guidance Revenue ($M) $162 - $172 Operating Margin 13% - 16% Taxes ($M) $4 -
$6 EPS $0.19 - $0.25 Diluted Shares (M) ~62 Positive industry demand trendsRemote work and learningMade in China 2025Advanced display technologiesOutlook clouded by geopolitical uncertaintyShelter-in-place mandatesUS/China trade
policiesWe remain focused on expanding margins and improving cash flows 5/26/2021 8
For Additional Information:R. Troy Dewar, CFAVice President, Investor
Relations203.740.5610tdewar@photronics.com Thank you for your interest!
Appendix
Total Revenue 5/26/2021 11 IC FPD Total may differ due to rounding
IC Photomask Revenue 5/26/2021 12 Mainstream High-End High-End: 28nm and smaller; total may
differ due to rounding
FPD Photomask Revenue 5/26/2021 13 Mainstream High-End High-End: ≥G10.5, AMOLED and LTPS;
total may differ due to rounding