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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

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

Date of report (Date of earliest event reported)
May 24, 2023
  

PHOTRONICS, INC.
(Exact name of registrant as specified in its charter)
 
Connecticut
0-15451
06-0854886
(State or Other Jurisdiction of) Incorporation
(Commission File Number)
(IRS Employer Identification No.)
 
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)

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
PLAB
NASDAQ Global Select Market

Item 2.02.
Results of Operations and Financial Condition.
 
On May 24, 2023, Photronics, Inc. (the “Company”) issued a press release reporting second quarter fiscal 2023 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, 99.5, 99.6 and 99.7, 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.

On May 24, 2023, the Company will conduct a conference call during which certain unaudited, non-GAAP financial information related to the Company’s operations for the three months ended April 30, 2023 may be disclosed. This information is set forth in Exhibit 99.7.


Item 9.01.
Financial Statements and Exhibits.
 
(d)
Exhibits
 
Press Release May 24, 2023.
 
Condensed Consolidated Statements of Income.
 
Condensed Consolidated Balance Sheets.
 
Condensed Consolidated Statements of Cash Flows.
  99.5
Reconciliation of GAAP to non-GAAP Financial Information.
  99.6
Reconciliation of GAAP to non-GAAP Financial Information (cont.).
 
Photronics Q2 2023 Financial Results Conference Call May 24, 2023 slides.

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.
 
 
PHOTRONICS, INC.
 
(Registrant)
     
 
By:
/s/ Richelle E. Burr
 
Name:
Richelle E. Burr
 
Title:
Executive Vice President,
   
Chief Administrative Officer,
   
General Counsel and Secretary
Date:  May 24, 2023
    

 
Exhibit 99.1

For Further Information:
John P. Jordan
Executive Vice President & CFO
203.740.5671
jjordan@photronics.com

Photronics Reports Second Quarter Fiscal 2023 Results

BROOKFIELD, Conn. May 24, 2023 (GLOBE NEWSWIRE) — Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in photomask technologies and solutions, today reported financial results for its second quarter of fiscal year 2023 ended April 30, 2023.
 
“We achieved record revenue in the second quarter with growth across IC and FPD as demand for our design-driven product remained high,” said Frank Lee, chief executive officer. “Mainstream IC demand remained robust across all regions, especially Asia and the US. FPD demand was driven primarily by AMOLED for advanced mobile displays as that technology continues to be adopted across new devices. Profit margins expanded on positive volume leverage, pricing, favorable mix, and tight control of cost. Cash generated from operating activities was very strong, enabling us to strengthen our balance sheet while also investing in organic growth. We are on pace for another great year in 2023 and to deliver on our long-term financial goals. I am confident that our team will continue to perform well to create value for our shareholders.”

Second Quarter Fiscal 2023 Results

•
Revenue was $229.3 million up 9% sequentially and 12% year-over-year
•
GAAP net income attributable to Photronics, Inc. shareholders was $39.9 million ($0.65 per diluted share), compared with $14.0 million ($0.23 per diluted share) in the first quarter of 2023 and $27.4 million ($0.45 per diluted share) in the second quarter 2022
•
Non-GAAP net income attributable to Photronics, Inc. shareholders was $32.9 million ($0.54 per diluted share), compared with $24.4 million ($0.40 per diluted share) in the first quarter of 2023 and $23.1 million ($0.38 per diluted share) in the second quarter 2022
•
IC revenue was $167.1 million, up 7% sequentially and 15% year-over-year
•
FPD revenue was $62.3 million, up 14% sequentially and 6% more than same quarter last year
•
Cash generated from operating activities was $82 million, and cash invested in growth through capital expenditures was $27 million
•
Cash balance at the end of the quarter was $367.5 million with debt of $28 million, providing funds and available liquidity to support our growth investments

Third Quarter Fiscal 2023 Guidance

For the third quarter of fiscal 2023, Photronics expects revenue to be between $224 million and $234 million and non-GAAP net income attributable to Photronics, Inc. shareholders to be between $0.48 and $0.54 per diluted share.

Webcast

A webcast to discuss these results is scheduled for 8:30 a.m. Eastern time on Wednesday, May 24, 2023.  The call will be broadcast live and on-demand on the Events and Presentations link on the Photronics website. Analysts and investors who wish to participate in the Q&A portion of the call should click here. It is suggested that participants register fifteen minutes prior to the call's scheduled start time.

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, 2022, the company had 1,828 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” regarding our industry, our strategic position, and our financial and operating results.  These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results, performance or achievements to differ materially.  Please refer to the documents we file with the Securities and Exchange Commission. These documents contain and identify important factors that could cause our actual results to differ materially from those contained in these forward-looking statements. These certain factors can be found at www.photronics.com/riskfactors.  Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We are under no duty to update any of the forward-looking statements after the date of this release to conform these statements to actual results.

Non-GAAP Financial Measures

Non-GAAP Net Income attributable to Photronics, Inc. shareholders and non-GAAP earnings per share, Free Cash Flow, LTM Free Cash Flow, and Net Cash are "non-GAAP financial measures" as such term is defined by the Securities and Exchange Commission, and may differ from similarly named non-GAAP financial measures used by other companies. The attached financial supplement reconciles Photronics, Inc. financial results under GAAP to non-GAAP financial information. We believe these non-GAAP financial measures that exclude certain items are useful for analysts and investors to evaluate our future on-going performance because they enable a more meaningful comparison of our projected performance with our historical results. These non-GAAP metrics are not intended to represent funds available for our discretionary use and are not intended to represent, or be used as a substitute for, gross profit, operating income, net income, cash and cash equivalents, or cash flows from operations, as measured under GAAP. The items excluded from these non-GAAP metrics, but included in the calculation of their closest GAAP equivalent, are significant components of the condensed consolidated balance sheets and statement of cash flows and must be considered in performing a comprehensive assessment of overall financial performance. Please refer to the non-GAAP reconciliations on the following pages.
 

Exhibit 99.2

PHOTRONICS, INC.
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)

   
Three Months Ended
    
Six Months Ended
  
    
April 30,
2023
    
January 29,
2023
      
May 1,
2022
    
April 30,
2023
    
May 1,
2022
  
                               
Revenue
  
$
229,306
    
$
211,090
    
$
204,509
    
$
440,397
    
$
394,336
  
                                         
Cost of goods sold
    
140,904
      
135,013
      
134,289
      
275,918
      
264,253
  
                                         
Gross Profit
    
88,402
      
76,077
      
70,220
      
164,479
      
130,083
  
                                         
Operating Expenses:
                                        
                                         
Selling, general and administrative
    
17,878
      
16,818
      
16,613
      
34,696
      
32,340
  

                                       
Research and development
    
3,479
      
3,302
      
4,206
      
6,781
      
10,145
  

                                       
Total Operating Expenses
    
21,357
      
20,120
      
20,819
      
41,477
      
42,485
  

                                       
Operating Income
    
67,045
      
55,957
      
49,401
      
123,002
      
87,598
  

                                       
Non-operating (loss) income, net
    
13,571
      
(14,425
)
    
8,021
      
(854
)
    
12,728
  

                                       
Income Before Income Tax Provision
    
80,616
      
41,532
      
57,422
      
122,148
      
100,326
  

                                       
Income tax provision
    
21,343
      
12,582
      
14,393
      
33,925
      
25,571
  

                                       
Net Income
    
59,273
      
28,950
      
43,029
      
88,223
      
74,755
  

                                       
Net income attributable to noncontrolling interests
    
19,344
      
14,964
      
15,597
      
34,308
      
24,259
  
                                         
Net income attributable to Photronics, Inc. shareholders
  
$
39,929
    
$
13,986
    
$
27,432
    
$
53,915
    
$
50,496
  
                                         
Earnings per share:
                                        
                                         
Basic
  
$
0.65
    
$
0.23
    
$
0.45
    
$
0.88
    
$
0.84
  
 
                                        
Diluted
  
$
0.65
    
$
0.23
    
$
0.45
    
$
0.88
    
$
0.83
  
                                         
Weighted-average number of common shares outstanding:
                                        
                                         
Basic
    
61,138
      
60,894
      
60,606
      
61,016
      
60,382
  
 
                                        
Diluted
    
61,507
      
61,470
      
61,145
      
61,489
      
61,041
  


Exhibit 99.3

PHOTRONICS, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)

   
April 30,
2023
    
October 31,
2022
  
             
Assets
            
             
Current assets:
            
Cash and cash equivalents
  
$
367,485
    
$
319,680
  
Short-term investments
    
45,431
      
38,820
  
Accounts receivable
    
214,464
      
198,147
  
Inventories
    
54,940
      
50,753
  
Other current assets
    
37,796
      
37,252
  
                 
Total current assets
    
720,116
      
644,652
  
                 
Property, plant and equipment, net
    
699,917
      
643,873
  
Other assets
    
30,992
      
27,305
  
                 
Total assets
  
$
1,451,025
    
$
1,315,830
  
                 
                 
                 
Liabilities and Equity
                
                 
Current liabilities:
                
Current portion of long-term debt
  
$
7,017
    
$
10,024
  
Accounts payable and accrued liabilities
    
178,151
      
183,773
  
                 
Total current liabilities
    
185,168
      
193,797
  
                 
Long-term debt
    
21,322
      
32,310
  
Other liabilities
    
39,851
      
27,634
  
                 
Photronics, Inc. shareholders' equity
    
928,047
      
831,527
  
Noncontrolling interests
    
276,637
      
230,562
  
Total equity
    
1,204,684
      
1,062,089
  
                 
Total liabilities and equity
  
$
1,451,025
    
$
1,315,830
  



 
Exhibit 99.4

PHOTRONICS,  INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)

   
Six Months Ended
  
     
April 30,
2023
      
May 1,
2022
   
             
Cash flows from operating activities:
            
Net income
  
$
88,223
    
$
74,755
  
Adjustments to reconcile net income to net cash provided by operating activities:
                
Depreciation and amortization
    
39,085
      
41,405
  
Share-based compensation
    
3,830
      
3,041
  
Changes in operating assets, liabilities and other
    
(21,461
)
    
(15,912
)
 
                
Net cash provided by operating activities
    
109,677
      
103,289
  
 
                
Cash flows from investing activities:
                
Purchases of property, plant and equipment
    
(57,728
)
    
(34,809
)
Purchases of available-for-sale debt securities
    
(9,837
)
    
0
  
Proceeds from maturity of available-for-sale debt securities
    
4,000
      
0
  
Government incentives
    
1,393
      
1,394
  
Other
    
(88
)
    
(199
)
 
                
Net cash used in investing activities
    
(62,260
)
    
(33,614
)
 
                
Cash flows from financing activities:
                
Repayments of debt
    
(14,720
)
    
(27,571
)
Purchases of treasury stock
    
-
      
(2,522
)
Contributions from noncontrolling interest
    
-
      
24,995
  
Proceeds from share-based arrangements
    
730
      
4,384
  
Net settlements of restricted stock awards
    
(1,252
)
    
(1,452
)
 
                
Net cash used in financing activities
    
(15,242
)
    
(2,166
)
 
                
Effects of exchange rate changes on cash, cash equivalents, and restricted cash
    
15,621
      
(14,917
)
 
                
Net increase in cash, cash equivalents, and restricted cash
    
47,796
      
52,592
  
Cash, cash equivalents, and restricted cash, beginning of period
    
322,409
      
279,680
  
 
                
Cash, cash equivalents, and restricted cash, end of period
  
$
370,205
    
$
332,272
  


Exhibit 99.5

PHOTRONICS, INC.
Reconciliation of GAAP to Non-GAAP Financial Information
(in thousands)
(Unaudited)

   
Three Months ended
    
Six Months ended
  
 
 
   
April 30,
2023
      
January 29,
2023
      
May 1,
2022
      
April 30,
2023
      
May 1,
2022
   
 
                              
Reconciliation of GAAP to Non-GAAP Net Income:
                              
 
                              
GAAP Net Income
  
$
39,929
    
$
13,986
    
$
27,432
    
$
53,915
    
$
50,496
  
FX (gain) loss
    
(10,718
)
    
16,944
      
(7,844
)
    
6,226
      
(13,112
)
Estimated tax effects of above
    
2,823
      
(4,506
)
    
1,947
      
(1,683
)
    
3,284
  
Estimated noncontrolling interest effects of above
    
901
      
(2,060
)
    
1,543
      
(1,159
)
    
1,639
  
Non-GAAP Net Income
  
$
32,935
    
$
24,364
    
$
23,078
    
$
57,299
    
$
42,307
  
 
                                        
Weighted-average number of common shares outstanding - Diluted
    
61,507
      
61,470
      
61,145
      
61,489
      
61,041
  
 
                                        
Reconciliation of GAAP to Non-GAAP EPS:
                                        
 
                                        
GAAP diluted earnings per share
  
$
0.65
    
$
0.23
    
$
0.45
    
$
0.88
    
$
0.83
  
Effects of the above adjustments
  
$
(0.11
)
  
$
0.17
    
$
(0.07
)
  
$
0.05
    
$
(0.14
)
Non-GAAP diluted earnings per share
  
$
0.54
    
$
0.40
    
$
0.38
    
$
0.93
    
$
0.69
  


Exhibit 99.6

PHOTRONICS, INC.
Reconciliation of GAAP to Non-GAAP Financial Information (cont.)
(in thousands)
(Unaudited)

Reconciliation of Net cash provided by operating activities to Free Cash Flow

   
Six Months ended
    
Year ended
        
  
   
April 30,
2023
      
October 31,
2022
      
October 31,
2021
      
Target Model
Two-year Horizon
   
 
                        
 
                        
GAAP Net cash provided by operating activities
  
$
109,677
    
$
275,187
    
$
150,772
    
$
350,000 - 400,000
  
 
                                
Purchases of property, plant and equipment
    
(57,728
)
    
(112,338
)
    
(109,099
)
    
(100,000
)
 
                                
Free Cash Flow
  
$
51,949
    
$
162,849
    
$
41,673
    
$
250,000 - 300,000
  

Reconciliation of Free Cash flow to LTM Free Cash Flow:

   
Free Cash Flow
  
       
Six Months ended April 30, 2023
  
$
51,949
  
 
        
Year-ended October 31, 2022
    
162,849
  
 
        
Six Months ended May 1, 2022
    
(68,480
)
 
        
LTM April 30, 2023
  
$
146,318
  

Reconciliation of  Cash and cash equivalents  to Net Cash:
 
         
As of
        
     
April 30,
2023
      
October 31,
2022
      
May 1,
2022
   
                   
Cash and  cash equivalents
  
$
367,485
    
$
319,680
    
$
329,282
  
 
                        
Current portion of Long-term debt
    
(7,017
)
    
(10,024
)
    
(12,410
)
 
                        
Long-term Debt
    
(21,322
)
    
(32,310
)
    
(70,138
)
 
                        
Net Cash
  
$
339,146
    
$
277,346
    
$
246,734
  


Exhibit 99.7

 Q2 2023 Financial Results Conference Call  May 24, 2023  Photronics, Inc. 
 
 Safe Harbor Statement  This presentation and some of our comments during this presentation 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. We refer you to the documents the Company files from time to time with the Securities and Exchange Commission. These documents contain and identify important factors that could cause the actual results for the Company to differ materially from those contained in our projections or forward-looking statements. These certain factors can be found at www.photronics.com/riskfactors. Although we believe that the expectations reflected in the forward-looking statements are reasonable, 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.  5/24/2023  2 
 
 Committed to driving long-term, profitable growth through strategic investments  5/24/2023  3  Q2 2023 Summary  Strong demand trends across markets and regions as design activity remains high  Net income* was $39.9M ($0.65/share); non-GAAP was $32.9M ($0.54/share)  Investing in mainstream IC capacity to capitalize on market growth trends  IC: +7% Q/Q, +15% Y/Y  FPD: +14% Q/Q, +6% Y/Y  Revenue was a record  $229.3M  +9%Q/Q  +12%Y/Y  $82M generated from operating activity  $27M invested in capex  $28M total debt  Cash balance  $367M  $45M  Short-term investments  *Net income attributable to Photronics, Inc. shareholders 
 
 CEO: First Year Observations  Photronics wins with…  A dedicated team laser focused on customer service  Leading edge technology and process know-how to deliver top-quality photomasks  Great market position as the leading photomask merchant  Strong balance sheet to fund growth  that creates differentiatingCore Competencies  5/24/2023  4  Operational Excellence  Commercial Excellence  Technology Leader  Core Values 
 
 Clear Strategy for Sustainable, Long-Term Profitable Growth  5/24/2023  5  Revenue Growth  Win lion’s share of the growth in TAM for IC and FPD  Supplement capacity with point tool investments and targeted expansions  Capitalize on technology leadership in AMOLED to continue improving mix  Leverage global footprint to exploit expansion of “legacy foundry” business  Margin Expansion  Improved pricing environment in high-end and mainstream IC   Optimizing asset tool set to match end-market demand  Increasing benefit from operating leverage  Explore Strategic Partnerships  Long-term Purchase Agreements  Joint-ventures and strategic alliances 
 
 Delivering on Updated Target Model  $M (except EPS)  2021  2022  Q2 2023 LTM  Illustrative FY 24 Target Model   Revenue  $664  $825  $871  $900  $950  $975  Gross Margin  25%  36%  38%  38-40%  40-42%  42-43%  Operating Margin  14%  26%  28%  28-30%  30-32%  32-33%  Operating Cash Flow  $151  $275  $282  $350-375  $365-380  $375-400  Free Cash Flow*  $42  $163  $146  $250-275  $235-280  $275-300  Diluted EPS  $0.89  $1.94  $1.99  $2.35-2.45  $2.50-2.55  $2.60-2.65  5/24/2023  6  *Free Cash Flow is a non-GAAP term; see reconciliation included in this presentation 
 
 Income Statement Summary  GAAP  Non-GAAP1  $M (except EPS)  Q223  Q123  Q222  Q223  Q123  Q222  Revenue   229.3   211.1  204.5  Gross Profit   88.4   76.1  70.2  Gross Margin  38.6%  36.0%  34.3%  Operating Income   67.0   56.0   49.4  Operating Margin  29.2%  26.5%  24.2%  Non-operating income   13.6  (14.4)   8.0  2.9  2.5  0.2  Income tax provision   21.3   12.6   14.4  18.5  17.1  12.5  Minority interest   19.3   15.0   15.6  18.4  17.0  14.1  Net income2   39.9   14.0   27.4  32.9  24.4  23.1  Diluted EPS2   0.65   0.23   0.45  0.54  0.40  0.38  Days in quarter  91  90  91  5/24/2023  7  1See reconciliation included in this presentation 2Net income attributable to Photronics, Inc. shareholders  Margins improved due to volume leverage, sustained better pricing, and improved mix  GAAP Non-operating income primarily consists of unrealized FX gain/loss  Q2 benefitted from a $28M FX tailwind Q/Q  Non-GAAP presentation removes effect of FX gain/loss  Minority interest reflects strong net income of IC JVs in Taiwan and China 
 
 $M  Q223  Q123  Q/Q  Q222  Y/Y  High-End*  $ 43.9  $ 48.0  (9%)  $ 51.4  (14%)  Mainstream  $ 123.1  $ 108.6  13%  $ 94.4  30%  Total  $ 167.1  $ 156.6  7%  $145.8  15%  IC Photomask Revenue  5/24/2023  High-end decreased on lower foundry/logic demand in Asia  Mainstream demand resumed at a high level during the quarter  Outlook  New designs by customers to gain market share and support technology roadmap contributed to improved high-end orders toward end of the quarter  Regionalization driving investments for global chip capacity  ASPs continue to expand, reflecting the demand/supply balance  *28nm and smaller  Note: Totals may differ due to rounding  8 
 
 FPD Photomask Revenue  5/24/2023  High-end grew as mobile display sustained high AMOLED demand  Mainstream expanded with additional write capacity.  Outlook  Technology development drives demand for higher-value masks  Mobile demand is expected continue strong with rollout of new designs  *≥G10.5, AMOLED and LTPS Note: Totals may differ due to rounding.  $M  Q223  Q123  Q/Q  Q222  Y/Y  High-End*  $ 51.9  $ 45.7  14%  $ 46.6  11%  Mainstream  $ 10.4  $ 8.8  18%  $ 12.1  (14%)  Total  $ 62.3  $ 54.5  14%  $ 58.7  6%  9 
 
 Select Financial Data  $M  Q223  Q123  Q222  Cash  $ 367  $ 335  $ 329  Short-term Investments  $ 45  $ 39  -  Debt  $ 28  $ 34  $ 83  Net Cash*  $ 339  $ 301  $ 247  Operating Cash Flow  $ 82  $ 28  $ 44  Capital Expenditures  $ 27  $ 31  $ 16  Continued strong operating cash flow from income generation and working capital management  Debt primarily comprised of US equipment leases  Capex targets growth in IC capacity & facility expansion  Balance sheet resilient to economic contraction and able to fund investments, share repurchases, and strategic opportunities  5/24/2023  10  *Net cash defined is a non-GAAP term; see reconciliation included in this presentation 
 
 Q3 2023 Guidance   Revenue ($M)  $224 - $234  Operating Margin  28% - 30%  Taxes ($M)  $15 - $17  Diluted non-GAAP EPS  $0.48 - $0.54  Diluted Shares (M)  ~61  Full-year Capex (M)  ~$130  Incorporation of chips in IoT, 5G, Crypto and consumer products   New designs to capture market share  Advanced display technologies  Outlook clouded by geopolitical uncertainty, macro-economic headwinds and supply chain challenges  Driving margin expansion and cash flows to achieve long-term target model  5/24/2023  11 
 
 For Additional Information:  Please contact  John P. Jordan  Executive Vice President & CFO  203.740.5671  jjordan@photronics.com   Thank you for your interest! 
 
 Appendix 
 
 Total Revenue ($M)  5/24/2023  14  IC  FPD  Total may differ due to rounding 
 
 IC Photomask Revenue ($M)  5/24/2023  15  Mainstream  High-End  High-End: 28nm and smaller; Total may differ due to rounding 
 
 FPD Photomask Revenue ($M)  5/24/2023  16  Mainstream  High-End  High-End: ≥G10.5, AMOLED and LTPS; Total may differ due to rounding 
 
 Non-GAAP Financial Measures  Non-GAAP Net Income attributable to Photronics, Inc. shareholders and non-GAAP earnings per share, Free Cash Flow, LTM Free Cash Flow, and Net Cash are "non-GAAP financial measures" as such term is defined by the Securities and Exchange Commission, and may differ from similarly named non-GAAP financial measures used by other companies. The attached financial supplement reconciles Photronics, Inc. financial results under GAAP to non-GAAP financial information. We believe these non-GAAP financial measures that exclude certain items are useful for analysts and investors to evaluate our future on-going performance because they enable a more meaningful comparison of our projected performance with our historical results. These non-GAAP metrics are not intended to represent funds available for our discretionary use and are not intended to represent, or be used as a substitute for, gross profit, operating income, net income, cash and cash equivalents, or cash flows from operations, as measured under GAAP. The items excluded from these non-GAAP metrics, but included in the calculation of their closest GAAP equivalent, are significant components of the condensed consolidated balance sheets and statement of cash flows and must be considered in performing a comprehensive assessment of overall financial performance. Please refer to the non-GAAP reconciliations on the following pages.   5/24/2023  17 
 
 Non-GAAP Financial Measures  5/24/2023  18 
 
 Non-GAAP Financial Measures  5/24/2023  19