Press Release

• Quarterly sales of $124.3 million
• Quarterly GAAP and Non-GAAP diluted EPS of $0.07; within guidance of $0.07 - $0.11
• Quarterly Non-GAAP EBITDA of $33 million
• Net cash of $51 million up $22 million sequentially

BROOKFIELD, Conn.--(BUSINESS WIRE)-- Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in supplying innovative imaging technology solutions for the global electronics industry, today reported financial results for the fourth quarter and fiscal year ended November 2, 2014.

Constantine ("Deno") Macricostas, Photronics' chairman and chief executive officer, commented: "Fourth quarter revenues were slightly lower than previously anticipated due to slower than expected ramps in advanced memory nodes and a pause in 28nm demand due to a refresh of the design pipeline at a foundry customer. Our market position remains strong and our qualifications are in place for these customers and we expect the ramps to materialize and drive revenue growth in the new fiscal year."

Sales for the fourth quarter of fiscal 2014 were $124.3 million, compared with $106.0 million for the fourth quarter of fiscal year 2013. Sales of semiconductor photomasks were $99.4 million, or 80% of revenues, during the fourth quarter of fiscal 2014, and sales of flat panel display (FPD) photomasks were $24.9 million, or 20% of revenues. For the fourth quarter of fiscal 2014, GAAP and Non-GAAP net income attributable to Photronics, Inc. shareholders was $4.3 million, or $0.07 per diluted share, compared with $4.8 million, or $0.08 per diluted share, for the fourth quarter of fiscal 2013. Non-GAAP net income attributable to Photronics, Inc. shareholders for the fourth quarter of 2013, excluding joint venture transaction expenses of $0.8 million, was $5.6 million, or $0.09 per diluted share.

Sales for the 2014 fiscal year were $455.5 million, compared with $422.2 million for the 2013 fiscal year. For the 2014 fiscal year, sales of semiconductor photomasks were $352.7 million, or 77% of revenues, and sales of FPD photomasks were $102.8 million, or 23% of revenues. GAAP net income attributable to Photronics, Inc. shareholders for the 2014 fiscal year was $26.0 million, or $0.41 per diluted share, compared with GAAP net income of $18.0 million, or $0.29 per diluted share, for the 2013 fiscal year. Non-GAAP net income attributable to Photronics, Inc. shareholders for the 2014 fiscal year, excluding the acquisition gain of $16.4 million and expenses related to the joint venture of $2.5 million, was $12.1 million, or $0.19 per diluted share. Non-GAAP net income attributable to Photronics, Inc. shareholders for the 2013 fiscal year, excluding $0.8 million in expenses related to the joint venture, was $18.7 million, or $0.30 per diluted share.

The section below entitled "Non-GAAP Financial Measures" provides a definition and information about the use of non-GAAP financial measures in this press release, and the attached financial supplement reconciles non-GAAP financial information with Photronics, Inc.'s financial results under GAAP.

Non-GAAP Financial Measures

Non-GAAP net income attributable to Photronics, Inc. shareholders and non-GAAP earnings per share are "non-GAAP financial measures," as such term is defined by the Securities and Exchange Commission, and may differ from non-GAAP financial measures used by other companies. Photronics, Inc. believes that non-GAAP net income attributable to Photronics, Inc. shareholders and non-GAAP earnings per share that exclude certain non-cash or non-recurring income or expense items are useful for analysts and investors to evaluate Photronics, Inc.'s future on-going performance because they enable a more meaningful comparison of Photronics, Inc.'s projected earnings and performance with its historical results of prior periods. These non-GAAP metrics, in particular non-GAAP net income attributable to Photronics, Inc. shareholders and non-GAAP earnings per share are not intended to represent funds available for Photronics, Inc.'s discretionary use and are not intended to represent, or be used as a substitute for, operating income, net income or cash flows from operations data 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 consolidated statements of operations and must be considered in performing a comprehensive assessment of overall financial performance. Non-GAAP financial information is adjusted for the following items:

• Non-cash acquisition gain and transaction expenses related to the joint venture, PDMC, in Taiwan are excluded because they are not a part of ongoing operations.

The presentation of this financial information should not be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States. The attached financial supplement reconciles non-GAAP financial information with Photronics, Inc.'s financial results under GAAP.

A conference call with investors and the media to discuss these results is scheduled for 8:30 a.m. Eastern time on Tuesday, December 9, 2014. The live dial-in number is (408) 774-4601. The call can also be accessed by logging onto Photronics' web site at www.photronics.com. The call will be archived for instant replay access until the Company reports its fiscal 2015 first quarter results.

Photronics is a leading worldwide manufacturer of photomasks. Photomasks are high precision quartz plates that contain microscopic images of electronic circuits. A key element in the manufacture of semiconductors and flat panel displays, photomasks are used to transfer circuit patterns onto semiconductor wafers and flat panel substrates during the fabrication of integrated circuits, a variety of flat panel displays and, to a lesser extent, other types of electrical and optical components. They are produced in accordance with product designs provided by customers at strategically located manufacturing facilities in Asia, Europe, and North America. Additional information on the Company can be accessed at www.photronics.com

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements made by or on behalf of Photronics, Inc. and its subsidiaries (the Company). The forward-looking statements contained in this press release and other parts of Photronics' web site involve risks and uncertainties that may affect the Company's operations, markets, products, services, prices, and other factors. These risks and uncertainties include, but are not limited to, economic, competitive, legal, governmental, and technological factors as well as decisions we may make in the future regarding our business, capital structure and other matters. These forward-looking statements generally can be identified by phrases such as "believes", "expects", "anticipates", "plans", "projects", "could", "estimate", "intend", "may", "will" and similar expressions. Accordingly, there is no assurance that the Company's expectations will be realized. For a fuller discussion of the factors that may affect the Company's operations, see "Forward Looking Statements" in the Company's Quarterly and Annual Reports to the Securities and Exchange Commission on Forms 10-Q and 10-K. The Company assumes no obligation to provide revisions to any forward-looking statements.

11-2014

PLAB - E

PHOTRONICS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
							Three Months Ended														Year Ended
							November 2,							November 3,							November 2,							November 3,
							2014							2013							2014							2013
Net sales							$		124,251					$		106,009					$		455,527					$		422,180
Costs and expenses:
Cost of sales									(97,626	)						(79,334	)						(355,181	)						(322,540	)
Selling, general and administrative									(11,547	)						(12,928	)						(49,638	)						(48,213	)
Research and development									(5,801	)						(6,378	)						(21,913	)						(20,758	)
Operating income									9,277							7,369							28,795							30,669
Gain on acquisition									-							-							16,372							-
Other expense, net									(574	)						(1,384	)						(3,837	)						(3,864	)
Income before income taxes									8,703							5,985							41,330							26,805
Income tax provision									(2,004	)						(1,072	)						(9,295	)						(7,229	)
Net income									6,699							4,913							32,035							19,576
Net income attributable to noncontrolling interests									(2,422	)						(73	)						(6,039	)						(1,610	)
Net income attributable to Photronics, Inc. shareholders							$		4,277					$		4,840					$		25,996					$		17,966
Earnings per share:
Basic							$		0.07					$		0.08					$		0.42					$		0.30
Diluted							$		0.07					$		0.08					$		0.41					$		0.29
Weighted-average number of common shares outstanding:
Basic									63,106							61,058							61,779							60,644
Diluted									64,085							61,962							66,679							61,599

PHOTRONICS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
							November 2,						November 3,
							2014						2013
Assets
Current assets:
Cash and cash equivalents							$		192,929				$		215,615
Accounts receivable									94,515						73,357
Inventories									22,478						18,849
Other current assets									26,570						10,645
Total current assets									336,492						318,466
Property, plant and equipment, net									550,069						422,740
Investment in joint venture									93,122						93,124
Intangible assets, net									30,294						34,080
Other assets									19,206						17,519
							$		1,029,183				$		885,929
Liabilities and Equity
Current liabilities:
Current portion of long-term borrowings							$		10,381				$		11,818
Accounts payable and accrued liabilities									128,736						92,769
Total current liabilities									139,117						104,587
Long-term borrowings									131,805						182,203
Other liabilities									18,767						11,308
Photronics, Inc. shareholders' equity									628,050						585,314
Noncontrolling interests									111,444						2,517
Total equity									739,494						587,831
							$		1,029,183				$		885,929

PHOTRONICS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
								Year Ended
								November 2,						November 3,
								2014						2013
Cash flows from operating activities:
Net income								$		32,035				$		19,576
Adjustments to reconcile net income to net cash
provided by operating activities:
Gain on acquisition										(16,372)						-
Depreciation and amortization										80,136						72,942
Changes in assets and liabilities and other										562						6,883
Net cash provided by operating activities										96,361						99,401
Cash flows from investing activities:
Purchases of property, plant and equipment										(91,085)						(63,792)
Cash from acquisition										4,508						-
Other										(908)						(2,445)
Net cash used in investing activities										(87,485)						(66,237)
Cash flows from financing activities:
Repayments of long-term borrowings										(29,782)						(8,314)
Purchase of common stock of subsidiary										-						(32,374)
Payment of deferred financing fees										(346)						(40)
Proceeds from share-based arrangements										1,298						884
Other										(711)						-
Net cash used in financing activities										(29,541)						(39,844)
Effect of exchange rate changes on cash										(2,021)						4,252
Net decrease in cash and cash equivalents										(22,686)						(2,428)
Cash and cash equivalents, beginning of period										215,615						218,043
Cash and cash equivalents, end of period								$		192,929				$		215,615
Noncash net assets from acquisition								$		110,211				$		-

PHOTRONICS, INC. AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial Information
(in thousands, except per share data)
(Unaudited)
				Three Months Ended													Year Ended
				November 2,							November 3,						November 2,							November 3,
				2014							2013						2014							2013
Reconciliation of GAAP to Non-GAAP Net Income
Attributable to Photronics, Inc. Shareholders
GAAP net income attributable to Photronics, Inc. shareholders				$		4,277					$		4,840				$		25,996					$		17,966
(a) Gain on acquisition, net of tax						-							-						(16,372)							-
(b) Acquisition transaction expenses, net of tax						-							773						2,455							773
Non-GAAP net income attributable to Photronics, Inc. shareholders				$		4,277					$		5,613				$		12,079					$		18,739
Reconciliation of GAAP to Non-GAAP Net Income
Applicable to Common Shareholders
Weighted average number of diluted shares outstanding
GAAP						64,085							61,962						66,679							61,599
Non-GAAP						64,085							61,962						62,734							61,599
Net income per diluted share
GAAP				$		0.07					$		0.08				$		0.41					$		0.29
Non-GAAP				$		0.07					$		0.09				$		0.19					$		0.30

(a)		Represents gain on acquisition of DNP Photomask Technology Taiwan Co., Ltd (DPTT), a wholly-owned subsidiary of Dai Nippon Printing Co., Ltd.
(b)		Represents transaction expenses in connection with the acquisition of DPTT

Photronics, Inc.
Pete Broadbent, 203-775-9000
Vice President, Investor Relations & Marketing
pbroadbent@photronics.com

Source: Photronics, Inc.

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