SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended ...October 31, 1995...
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from................. to ................
Commission file number...0-15451...
...PHOTRONICS, INC....
(Exact name of registrant as specified in its charter)
...Connecticut... ...06-0854886...
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
...1061 East Indiantown Road, Jupiter, Florida... ..33477..
(Address of principal executive offices) (Zip Code)
...(407) 747-4163...
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of each exchange on which
Title of each class registered
______None______ _____________________
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
.....Common Stock, $0.01 par value per share.....
(Title of Class)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes ..X.. No .....
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained to the best of registrant's knowledge in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
As of December 29, 1995, 11,626,133 shares of the registrant's
Common Stock were outstanding. The aggregate market value of
registrant's voting stock held by non-affiliates of the registrant
as of December 29, 1995 was approximately $270,525,559.
DOCUMENTS INCORPORATED BY REFERENCE
Proxy Statement for the 1996 Annual Meeting Incorporated into Part
Annual Meeting of Shareholders III of this Form 10-K.
to be held on March 20, 1996.
PART I
ITEM 1. BUSINESS
General
Photronics, Inc. (the "Company") is a leading manufacturer of
photomasks, which are high precision photographic quartz plates
containing microscopic images of electronic circuits. Photomasks
are a key element in the manufacture of semiconductors and are used
as masters to transfer circuit patterns onto semiconductor wafers
during the fabrication of integrated circuits and, to a lesser
extent, other types of electrical components.
On December 1, 1994, the Company acquired assets held by Hoya
Micro Mask, Inc. ("Micro Mask"). The transaction included the
purchase of the land, building and assets of Micro Mask (other than
cash and receivables and the significant manufacturing systems
owned by Micro Mask, which were leased by the Company from Micro
Mask under a lease as discussed below) and represented a complete
state-of-the-art photomask manufacturing facility. Micro Mask was
an independent photomask manufacturer with manufacturing operations
located in Sunnyvale, California and had sales on a nationwide
basis as well as to overseas markets. The acquisition was financed
through available cash reserves and involved the payment of
approximately $7.2 million in cash at closing and the obligation to
pay $3.0 million and $1.8 million, without interest, six months and
four years after the closing, respectively. The lease for the
significant manufacturing systems has a term ranging from 44 to 62
months and includes the right to purchase at lease termination the
leased equipment at its then fair market value. The Company
continues to operate this facility in place.
On June 20, 1995, the Company acquired the assets of
Microphase Laboratories, Inc. ("Microphase"). The transaction
included the purchase of all of the manufacturing assets of
Microphase and an assignment of the lease for the premises
previously occupied by Microphase. Microphase was an independent
photomask manufacturer with manufacturing operations located in
Colorado Springs, Colorado. Microphase focused on the large area
mask market as well as supporting a limited range of traditional
integrated circuit mask customers. The acquisition was financed
through the issuance of 98,559 shares of the Company's common
stock. The Company continues to operate this facility in place.
On January 24, 1996, the Company acquired the photomask
manufacturing assets of Plessey Semiconductors Limited ("Plessey")
and became the photomask supplier to Plessey. The transaction
included the purchase of the photomask manufacturing assets of
Plessey and a lease to occupy the facilities previously utilized by
Plessey for manufacturing photomasks. The operations acquired
represent a modern photomask manufacturing operation which is
located in the Manchester, United Kingdom, region, which were
dedicated to supporting Plessey's requirements for photomasks. The
acquisition was financed through available cash reserves. The
Company will continue to operate this facility in place until it
can relocate it to a new facility to be constructed in the
Manchester area.
In March, 1995, the Company announced that it was establishing
a manufacturing operation in Singapore. Since that time, the
Company has leased a building to house these operations and
proceeded with necessary facility improvements, staffing and
equipment procurement to commence operations. It is expected that
the facility will be operational in the second quarter of fiscal
1996. At the same time, construction continues in Allen, Texas, on
a facility that will be used for relocation of the Company's Dallas
operations. It is expected that the Allen facility will begin
operations in the second half of fiscal 1996 and that the
relocation will be completed prior to fiscal year end.
In addition to its other efforts during 1995, the Company has
continued to focus on maintaining technological leadership at its
existing facilities. As a result, the Company has increased its
research and development activities and has continued to invest in
advanced manufacturing equipment to allow it to meet future
technological and volume demands.
The Company believes that its efforts have established it as
a leading independent photomask manufacturer on a global basis and
provided it with the facilities and expertise to continue to expand
its sales base.
The Company, through its wholly owned subsidiary Beta Squared
Inc. ("BETA"), sells and services wafer plasma etching systems and
engages in the sale of refurbished semiconductor manufacturing
equipment, engineering services and replacement parts and field
service for such equipment on a third-party basis.
The Company is a Connecticut corporation, organized in 1969.
Its principal executive offices are located at 1061 East Indiantown
Road, Jupiter, Florida, telephone (407) 747-4163.
Products and Services
The Company manufactures photomasks, which are primarily used
as masters to transfer circuit patterns onto semiconductor wafers.
The Company's photomasks are manufactured in accordance with
circuit designs provided on a confidential basis by its customers.
Each circuit design consists of a series of separate patterns, each
of which is imaged onto a different photomask. The resulting
series of photomasks is then used by the customer to successively
layer the patterns onto a semiconductor wafer. While advanced
photomasks generally have an indefinite life span and are not
customarily consumed by customers' manufacturing processes, the
demand for photomasks has increased with the growth in the number
of semiconductor designs as applications for semiconductors have
expanded and the use of application specific (or custom) integrated
circuits ("ASIC") has increased. Further, the increase in
complexity of integrated circuits has increased the number of
photomasks used in the manufacture of a single circuit.
The Company currently manufactures photomasks using electron
beam or laser-based technologies and, to a lesser degree, optical-
based technologies. A laser-based or electron beam system is
capable of producing the finer line resolution, tighter overlay and
larger die size for the larger and more complex circuits currently
being designed. Laser and electron beam generated photomasks can
be used with the most advanced processing techniques to produce
very large scale integrated circuit ("VLSI") devices. The Company
currently owns a number of CORE laser writing systems and MEBES
electron beam systems and has made commitments to purchase
additional advanced systems to maintain technological superiority.
The CORE laser-based systems and the MEBES electron beam systems
are the predominant lithography systems used for photomask
manufacture.
Compared to laser or electron beam generated photomasks, the
production of photomasks by the optical method is less expensive,
but also less precise. The optical method is traditionally used on
less complex and lower priced photomasks.
The first several levels of photomasks frequently are required
to be delivered by the Company within 24 hours of receiving a
customer's design. The ability to manufacture high quality
photomasks within short time periods is dependent upon efficient
manufacturing methods, high yields and high equipment reliability.
The Company believes it meets these requirements and has made
significant investments in manufacturing and data processing
systems and statistical process control methods to optimize the
manufacturing process and reduce cycle times.
Quality control is an integral part of the photomask
manufacturing process. Photomasks are manufactured in temperature,
humidity and particulate controlled cleanrooms because of the high
level of precision, quality and yields required. Each photomask is
inspected several times during the manufacturing process to ensure
compliance with customer specifications. The Company has made a
substantial investment in equipment to inspect and repair
photomasks and to ensure that customer specifications are met.
After inspection and any necessary repair, the Company utilizes
technological processes to clean the photomasks prior to shipment.
In addition to the manufacture of photomasks, the Company,
through Beta, manufactures, sells and services a wafer plasma
etching system used in the processing of semiconductor wafers. The
system was developed by Texas Instruments Incorporated ("Texas
Instruments") which licensed to BETA the right to manufacture and
sell the system. Beta also sells refurbished semiconductor
manufacturing equipment, engineering services and replacement parts
and field service for such equipment on a third-party basis. Such
activities represented less than 5% of the Company's sales during
fiscal 1995.
Research and Development
The Company has ongoing research and development programs
which are intended to improve continually the Company's level of
technology and manufacturing efficiency. Since 1994, the Company
has increased its commitment to research and development activities
and current efforts include phase-shift and optical proximity
correction photomasks for advanced semiconductor manufacturing.
The Company incurred expenses of $7.9 million (including a non-
recurring charge of $1.5 million), $4.7 million and $2.7 million
for research and development in 1995, 1994 and 1993, respectively.
The Company also leverages the investments in research and
development made by its equipment and material suppliers. While
the Company believes that it possesses valuable proprietary
information and has received licenses under certain patents, the
Company does not believe that patents are a material factor in the
photomask manufacturing business and it holds only one patent.
Materials and Supplies
Raw materials utilized by the Company generally include high
precision quartz plates, which are used as photomask blanks,
primarily obtained from Japanese suppliers (including Toppan
Printing Co., Ltd. ["Toppan"] and Hoya Corporation USA, the parent
of Micro Mask, ["Hoya"]), pellicles (which are protective
transparent cellulose membranes) and electronic grade chemicals
used in the manufacturing process. Such materials are generally
available from a number of suppliers and the Company is not
dependent on any one supplier for its raw materials. The Company
has established purchasing arrangements with each of Toppan and
Hoya and it is expected that the Company will purchase
substantially all of its photomask blanks from Toppan and Hoya so
long as their price, quality, delivery and service are competitive.
Sales and Marketing
The market for photomasks consists primarily of semiconductor
manufacturers and designers, both domestic and international,
including manufacturers that have the capability to manufacture
photomasks. Since the mid 1980's, in the United States there has
been a trend toward the divestiture or closing of captive photomask
manufacturing operations by semiconductor companies, and an
increase in purchasing of photomasks from independent photomask
manufacturers. These trends create a greater market opportunity
for the Company and the Company believes they are due to various
reasons including the increasing capital requirements and costs
related to these operations, the presence of a cost effective
source of supply from independent suppliers such as the Company and
a general desire by semiconductor manufacturers to focus on core
business matters.
The Company conducts its marketing activities through a staff
of full-time sales personnel and customer service representatives
who work closely with the Company's general management and
technical personnel. In addition to the sales personnel at the
Company's manufacturing facilities in Brookfield, Connecticut;
Milpitas and Sunnyvale, California; Colorado Springs, Colorado;
Dallas, Texas; Manchester, United Kingdom and Singapore, the
Company has sales offices in Carlsbad, California; Austin, Texas;
Raleigh, North Carolina and Beaverton, Oregon.
The Company has continually expanded its customer base.
However, as a result of the acquisition of the Dallas, Texas
operation in 1993, Texas Instruments has become a more significant
customer of the Company, representing approximately 32% of net
sales in 1995, and the loss of Texas Instruments or a significant
decrease in the amount of the purchases by Texas Instruments from
the Company could have a material adverse effect on the Company.
During 1995, no single customer other than Texas Instruments
accounted for more than 10% of the Company's net sales. The
Company's five largest customers, in the aggregate, accounted for
approximately 48% of net sales. In addition to Texas Instruments,
the Company's major customers include Micron Technology, Motorola
Corporation, National Semiconductor Corporation and VLSI
Technology, Inc. During the 1995 fiscal year, the Company sold its
products and services to approximately 225 customers.
The Company typically negotiates an established price for a
customer's orders based on the customer's specifications in order
to expedite the placement of individual purchase orders. Some of
these prices may remain in effect for up to one year. The Company
also negotiates prices, and occasionally enters into purchase
arrangements, based on the understanding that, so long as the
Company's performance is competitive, the Company will receive a
specified percentage of that customer's photomask requirements. As
part of the acquisition of the Dallas, Texas facility, the Company
assumed an agreement with Texas Instruments, which continues until
March 31, 2000 and provides that the Company is Texas Instruments's
principal photomask supplier so long as the Company's price,
quality, service and delivery are competitive. The agreement also
requires the Company to ensure that prices charged to Texas
Instruments are not less favorable than those otherwise extended by
the Company to other customers with similar specifications, volume,
delivery and other requirements.
In addition to sales to domestic customers, the Company has
been marketing its products in international markets. The Company
has increased its presence in the international markets through its
acquisition of a United Kingdom manufacturing facility and the
construction of a Singapore facility. The Company also has sub-
contract manufacturing arrangements in Taiwan and arrangements with
independent sales representatives in Korea. The Company considers
its presence in international markets important to attracting new
customers, to providing global solutions to its existing customers
and to service certain customer's manufacturing foundries outside
of the United States, principally in the Pacific Rim. Current
customers include companies in Taiwan, Singapore, the United
Kingdom, Canada, Germany, Japan, Switzerland, Italy and Australia.
Foreign and export sales accounted for approximately 11%, 13% and
8% of the Company's sales for the fiscal year ended October 31,
1995, 1994 and 1993, respectively.
Backlog
The first several levels of photomasks for a circuit are
sometimes required to be shipped within one day of receiving a
customer's design. Because of the short period between order and
shipment dates (typically from one day to two weeks) for the
principal portion of the Company's sales, the dollar amount of
current backlog is not considered to be a reliable indication of
future sales volume.
Competition
The photomask industry is highly competitive and most of the
Company's customers utilize more than one photomask supplier. The
Company's ability to compete depends primarily upon the consistency
of product quality and timeliness of delivery, as well as pricing,
technical capability and service. The Company also believes that
proximity to customers is an important factor in certain markets.
Certain competitors have considerably greater financial and other
resources than the Company. The Company believes that it is able
to compete effectively because of its dedication to customer
service, its investment in state-of-the-art photomask equipment and
its experienced technical employees.
There has been a decrease since the mid-1980's in the number
of independent manufacturers as a result of independents being
acquired or discontinuing operations. The Company believes that
entry into the market by a new independent manufacturer would
require a major investment of capital, a significant period of time
to establish a commercially viable operation and additional time to
attain meaningful market share and achieve profitability. In prior
years, competition and relatively flat demand led to pressure to
reduce prices which the Company believes contributed to the
decrease in the number of independent manufacturers. Although
independent photomask manufacturers have experienced increased
demand since late 1993, there can be no assurance that past trends
in pricing and demand will not re-emerge.
Based upon market information available to it, the Company
believes that it is one of the four largest independent
manufacturers in the world and the largest in the United States.
Competitors in the United States include DuPont Photomasks and
Align-Rite; and in the international market, Dai Nippon Printing,
Toppan, Hoya, DuPont, Taiwan Mask Corp., Innova, Compugraphics and
Anam S&T. In addition, some of the Company's customers possess
their own facilities for manufacturing photomasks and certain
manufacturers market their photomask manufacturing services to
outside customers as well as to their internal organization. The
Company competes for business with these and other companies'
internal facilities.
Employees
As of October 31, 1995, the Company employed a total of
approximately 684 persons on a full-time basis. The Company
believes that it offers competitive compensation and other benefits
and that its employee relations are good. Except for employees in
the United Kingdom, none of the Company's employees is represented
by a union.
ITEM 1A. EXECUTIVE OFFICERS OF REGISTRANT
The names of the executive officers of the Company are set
forth below, together with the positions held by each person in the
Company. All executive officers are elected annually by the Board
of Directors and serve until their successors are duly elected and
qualified.
SERVED AS AN
NAME AND AGE POSITION OFFICER SINCE
Constantine S. Macricostas, 60 Chairman of the 1974
Board,
Chief Executive
Officer and Director
Michael J. Yomazzo, 53 President, 1977
Chief Operating
Officer and Director
Jeffrey P. Moonan, 39 Senior Vice President, 1988
General Counsel and
Secretary
Robert J. Bollo, 51 Vice President/Finance 1994
and Chief Financial
Officer
The terms of certain financing for the Company specify that if
Mr. Macricostas ceases to maintain day-to-day control of the
Company, Mr. Yomazzo, or another acceptable replacement, must
assume such duties, otherwise the Company may be declared in
default.
For the past five years each of the executive officers of the
Company held the office shown, except as follows:
Constantine S. Macricostas served as President from 1974 until
November 1990. Mr. Macricostas also serves as a Director of Nutmeg
Federal Savings and Loan Association, of Colonial Data Technologies
Corp., a distributor of telecommunications equipment, and Orbit
Semiconductor, Inc., an integrated circuit manufacturer and
foundry.
Michael J. Yomazzo has been President and Chief Operating
Officer since January 1994. From November 1990 until January 1994,
he served as Executive Vice President and Chief Financial Officer.
Jeffrey P. Moonan has been Senior Vice President since January
1994 and General Counsel and Secretary since July 1988. From July
1989 until January 1994, he also served as Vice
President/Administration.
Robert J. Bollo has been Vice President/Finance and Chief
Financial Officer since November 1994. From August 1994 to
November 1994, he served as Director of Finance. From April 1992
to July 1994, he was a Principal of CFO Associates, Inc., a
financial management firm. Prior to April 1992, he was with
Kollmorgen Corporation, serving as a Vice President since January
1990 and Controller and Chief Accounting Officer since February
1985.
ITEM 2. DESCRIPTION OF PROPERTY
The Company's properties include buildings in which the
Company currently conducts manufacturing operations or is
constructing facilities for future manufacturing operations. The
Company's Sunnyvale, California operations, the new facilities
under construction in Allen, Texas, and one of the two buildings in
which it conducts its Brookfield manufacturing operations are owned
by the Company. The Milpitas, California; current Dallas, Texas;
Colorado and United Kingdom manufacturing facilities; the second of
the two buildings and adjacent property at the Brookfield,
Connecticut site and the building which will house the Singapore
manufacturing operations are leased. Lease terms range from less
than one (1) year for facilities from which the Company is planning
to relocate, to up to five (5) years with options to renew for
other facilities. In addition, the Company leases office space in
Jupiter, Florida; Austin, Texas; Carlsbad, California and Dallas,
Texas.
The Company believes it has made adequate arrangements for the
lease or ownership of its current manufacturing facilities and
continually evaluates opportunities for further expansion, both
domestically and internationally.
The leased properties in Brookfield, Connecticut, are leased
from entities controlled by Constantine S. Macricostas under fixed
lease rates which were determined by reference to fair market value
rates at the beginning of the respective lease term.
For the year ended October 31, 1995, the Company leased real
property at an aggregate annual rental of approximately $1.8
million and leased equipment at an aggregate annual rental of
approximately $3.1 million.
Other than new manufacturing facilities or systems which have
not yet been placed into service, the Company believes it
substantially utilized its facilities during the 1995 fiscal year.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal
proceedings, nor is the property of the Company subject to any such
proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders during
the fourth quarter of the Company's fiscal year ended October 31,
1995.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDERS MATTERS
The Common Stock of the Company is traded in the over-the-
counter market on the NASDAQ National Market System (NMS) under the
symbol PLAB. The table below shows the range of high and low sale
prices per share for each quarter for fiscal year 1995 and 1994,
respectively, as reported on the NASDAQ NMS System. All per share
prices have been adjusted for a three-for-two stock split effected
in March, 1995.
High Low
Fiscal Year Ended October 31, 1995:
Quarter Ended January 31, 1995 $20.50 $16.00
Quarter Ended April 30, 1995 24.50 19.50
Quarter Ended July 31, 1995 36.00 21.75
Quarter Ended October 31, 1995 40.48 25.50
Fiscal Year Ended October 31, 1994:
Quarter Ended January 31, 1994 $12.00 $ 9.00
Quarter Ended April 30, 1994 14.50 11.00
Quarter Ended July 31, 1994 14.67 10.83
Quarter Ended October 31, 1994 18.17 11.33
On December 29, 1995, the closing sale price for the Common
Stock as reported by NASDAQ was $26.75. Based on information
available to the Company, the Company believes it has approximately
6,400 beneficial shareholders.
The Company has not paid any cash dividend to date and, for
the foreseeable future, anticipates that earnings will continue to
be retained for use in its business.
ITEM 6. SELECTED FINANCIAL DATA
The following selected financial data is derived from the
Company's consolidated financial statements. The data should be
read in conjunction with the consolidated financial statements and
notes thereto and other financial information included elsewhere in
this Form 10-K.
Years Ended October 31,
======================================================================
1995 1994 1993 1992 1991
-------- ------- ------- ------- -------
(in thousands, except per share amounts)
OPERATING DATA:
Net sales $125,299 $80,696 $48,363 $41,305 $42,158
Costs and expenses:
Cost of sales 76,683 51,204 32,048 27,142 25,853
Selling, general and
administrative 17,127 10,517 6,580 5,746 4,986
Research and development 7,899 4,738 2,744 2,549 2,613
-------- ------- ------- ------- -------
Operating income 23,590 14,237 6,991 5,868 8,706
Gain on insurance settlements - - - - 1,479
Interest income 1,627 568 547 866 888
Interest expense (141) (75) (101) (102) (194)
Other income (expense), net 4,766 571 (1) 87 53
-------- ------- ------- ------- -------
Income before income taxes
and cumulative effect of
change in accounting for
income taxes 29,842 15,301 7,436 6,719 10,932
Provision for income taxes 11,210 5,202 2,528 2,352 4,155
-------- ------- ------- ------- -------
Income before cumulative effect
of change in accounting
for income taxes 18,632 10,099 4,908 4,367 6,777
Cumulative effect of change in
accounting for income taxes - 237 - - -
-------- ------- ------- ------- -------
Net income $ 18,632 $10,336 $ 4,908 $ 4,367 $ 6,777
======== ======= ======= ======= =======
Net income per share:
Income before cumulative effect
of change in accounting
for income taxes $1.66 $1.01 $0.59 $0.55 $0.89
Cumulative effect of change in
accounting for income taxes - .02 - - -
----- ----- ----- ----- -----
Net income $1.66 $1.03 $0.59 $0.55 $0.89
===== ===== ===== ===== =====
Weighted average number of
common shares outstanding 11,207 10,062 8,372 7,998 7,564
====== ====== ===== ===== =====
October 31,
====================================================================
1995 1994 1993 1992 1991
-------- ------- ------- ------- -------
BALANCE SHEET DATA:
Working capital $ 49,653 $32,329 $17,577 $20,771 $23,506
Property, plant and equipment 72,063 39,205 41,585 25,418 17,097
Total assets 174,218 98,346 74,441 52,026 47,850
Long-term debt 1,809 495 1,051 1,698 1,758
Shareholders' equity 134,045 80,402 62,626 44,011 39,384
Cash dividends declared per share - - - - -
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations for the
Years Ended October 31, 1995, 1994 and 1993
A significant portion of the material changes in each category
of the Company's results of operations for the fiscal years ended
October 31, 1995 and 1994, as compared to the respective prior
fiscal years is attributable to its recent acquisitions. The
Company acquired the photomask manufacturing operations and assets
of Hoya Micro Mask, Inc. ("Micro Mask") in Sunnyvale, California,
and Toppan Printronics (USA), Inc. in Dallas, Texas, on December 1,
1994 and on October 1, 1993, respectively. The operations acquired
represented full-service, state-of-the-art photomask manufacturing
facilities. Further, on June 20, 1995, the Company acquired the
manufacturing operations of Microphase Laboratories, Inc.
("Microphase") in Colorado Springs, Colorado. Except for a non-
recurring charge in fiscal 1995 to research and development
expenses (see Note 6 to the Consolidated Financial Statements), the
financial results of the new Colorado facility did not have a
material effect on the Company's results of operations or financial
position.
Net sales for fiscal 1995 increased 55.3% to $125.3 million
compared with net sales of $80.7 million in the prior fiscal year.
Approximately one-half of the increase is attributable to the
inclusion of the Company's new Sunnyvale facility, commencing
December 1, 1994. Furthermore, shipments to customers from
existing facilities increased due to stronger demand generally and
greater manufacturing capacity resulting from the implementation of
the Company's capacity expansion program. Net sales for fiscal
1994 represented an increase of 66.8% over fiscal 1993 sales of
$48.4 million. The increase in fiscal 1994 was principally due to
the first full year of sales by the Company's new Texas facility.
Additionally, the Company experienced stronger demand generally
throughout fiscal 1994 from its existing customer base as well as
higher foreign sales.
In fiscal 1995, cost of sales increased 49.8% to $76.7 million
compared to $51.2 million for the prior fiscal year. These
increases resulted principally from increases in sales volume,
including those resulting from the Micro Mask acquisition.
Staffing levels were increased to meet production demands and
higher employee incentive compensation expenses were incurred as a
result of the Company's performance. The addition of manufacturing
capacity resulted in increased equipment-related costs, including
maintenance and depreciation. However, as a percentage of net
sales, cost of sales decreased to 61.2% compared with 63.4% in
fiscal 1994. As a percentage of net sales, cost of sales also
decreased in fiscal 1994 to 63.4% from 66.3% in fiscal 1993. The
improvements each year were due primarily to the continued higher
capacity utilization and greater operating efficiencies afforded by
sales volume increases and a more favorable mix of more complex
photomasks. Cost of sales for fiscal 1994 increased 59.8% to $51.2
million compared to $32.0 million for fiscal 1993 principally as a
result of the increases in sales volume, including those resulting
from the new Texas facility. The Company anticipates that its
fixed operating costs will increase in connection with its
continuing capacity expansion. However, the Company expects to
match these higher costs with continued increases in revenues.
Selling, general and administrative expenses increased 62.9%
to $17.1 million in fiscal 1995 compared to $10.5 million in fiscal
1994. The increase was due largely to the inclusion of the
Company's Sunnyvale facility and higher employee incentive
compensation expense resulting from the Company's performance.
Moreover, increased staffing levels and other associated costs were
incurred in the latter part of 1994 and in 1995 to accomodate the
Company's business expansion. As a percentage of net sales,
selling, general and administrative expenses increased to 13.7% for
fiscal 1995 compared to 13.0% in the prior fiscal year. Selling,
general and administrative expenses in fiscal 1994 increased 59.8%
to $10.5 million compared to $6.6 million for fiscal 1993. The
increase was due to the Company's new Texas operations, as well as
a provision for higher employee incentive compensation expense as
a result of the Company's performance. In addition, the Company
had increases in staffing levels, coupled with general increases in
wages and other expenses. As a percentage of net sales, selling,
general and administrative expenses decreased to 13.0% for fiscal
1994 compared to 13.6% in fiscal 1993.
Research and development expenses for fiscal 1995 increased
66.7% to $7.9 million from $4.7 million for the prior fiscal year.
In connection with the Microphase acquisition, the Company recorded
a non-recurring charge of $1.5 million. This charge represented
amounts assigned to certain Microphase research and development
projects, principally for the manufacture of large area masks,
which were expensed upon acquisition. Excluding this non-recurring
charge, research and development expenses for fiscal 1995 increased
35.4% compared to fiscal 1994. These increases reflect the
expansion of the Company's research and development organization
and an increase in its development efforts which focused on new
photomask technologies such as phase shift and optical proximity
corrected photomasks. As a percentage of net sales, research and
development expenses, excluding the Microphase charge, declined to
5.1% for fiscal 1995 compared to 5.9% for the prior fiscal year
because of increased net sales. Research and development expenses
increased 72.7% to $4.7 million in fiscal 1994 compared to $2.7
million in fiscal 1993. Research and development expenses
increased slightly as a percentage of net sales to 5.9% in fiscal
1994 from 5.7% of net sales in fiscal 1993.
Interest income for fiscal 1995 increased to $1.6 million
compared with $568,000 in the prior fiscal year primarily due to
higher levels of funds available for investment. For fiscal 1995,
other income, net, increased to $4.8 million compared to $.6
million for the prior fiscal year principally due to the $5.1
million net gain from the sales of equity investments during fiscal
1995. Gains on the disposition of investments in fiscal 1994
totaled $831,000. There were no such gains in fiscal 1993.
For fiscal 1995, the Company provided Federal and state income
taxes at an estimated combined effective annual tax rate of 37.6%
as compared to 34.0% in fiscal 1994 and fiscal 1993. The increase
in the Company's estimated tax rate primarily is the result of a
larger portion of income being subject to the 35% incremental
Federal income tax rate, and a greater portion of the Company's
income being generated in California. In 1994, the Company
recognized the cumulative effect of the adoption of SFAS 109,
"Accounting for Income Taxes," resulting in a benefit of $237,000,
or $0.02 per share.
Net income for fiscal 1995 amounted to $18.6 million, or $1.66
per common share, compared with $10.3 million, or $1.03 per share
in 1994 and $4.9 million or $.59 per share in 1993. Earnings per
share were based on 11.2 million weighted average shares
outstanding in 1995, compared with 10.1 million shares in 1994, and
8.4 million shares in 1993. All share and earnings per share
amounts have been adjusted for a three-for-two stock split effected
in March, 1995.
Liquidity and Capital Resources
The Company's cash, cash equivalents, and short-term
investments increased $24.2 million during fiscal 1995, largely as
a result of the $29.6 million of proceeds from the issuance of
1,500,000 new shares of common stock in a public equity offering
completed in fiscal 1995 and the $5.8 million of proceeds from the
sale of equity investments. These increases were offset by cash
expenditures of $10.5 million to fund the acquisition of Micro
Mask. Excluding the Micro Mask acquisition, the Company used cash
of $35.5 million for deposits on and purchases of property, plant
and equipment. Operating activities provided cash totaling $33.6
million, after utilizing approximately $2 million for initial
working capital at the Sunnyvale site, and sales of stock under
employee stock option and purchase plans provided additional cash
of approximately $2 million.
Accounts receivable increased to $17.9 million at October 31,
1995, from $10.2 million at October 31, 1994, principally as a
result of higher sales levels, particularly the additional sales by
the new Sunnyvale and Colorado operations. Inventory increased to
$6.4 million at October 31, 1995, from $2.5 million at October 31,
1994, primarily due to higher equipment inventory levels held by
the Company's wholly-owned subsidiary, Beta Squared, Inc., the
addition of the Sunnyvale and Colorado facilities and general
increases to accommodate escalating sales volume.
Other current assets increased to $3.4 million at October 31,
1995, from $2.1 million at October 31, 1994, primarily due to an
increase in the deferred income tax asset balance.
Property, plant and equipment increased to $72.1 million at
October 31, 1995, from $39.2 million at October 31, 1994, as a
result of fixed assets acquired in connection with the Micro Mask
and Microphase acquisitions aggregating $5.9 million, together with
construction in progress on the new Allen, Texas plant and deposits
on and purchases of other property, plant and equipment totaling
$35.5 million. These increases were offset by normal depreciation
expense totaling $8.7 million. Intangible assets increased to
$10.3 million at October 31, 1995, from $5.5 million at October 31,
1994, due to $5.8 million of intangible assets resulting from the
Micro Mask acquisition, offset by amortization totaling $1.0
million.
Investments increased to $12.3 million at October 31, 1995,
from $11.1 million at October 31, 1994, due to additional
unrealized gains recorded as a result of the increased fair value
of the Company's equity investments, net of dispositions, during
fiscal year 1995.
Accounts payable increased to $17.9 million at October 31,
1995, from $5.1 million at October 31, 1994, primarily due to
increased payables related to recent equipment purchases and
construction in progress at the Company's new facility in Texas,
higher levels of raw materials purchases due to growing production
needs, and the addition of the Sunnyvale and Colorado operations.
Accrued salaries and wages increased $3.2 million from October 31,
1994, largely as a result of provisions for incentive compensation
for fiscal 1995, an increase in provisions for vacation expense,
and the addition of the Sunnyvale and Colorado operations. Other
accrued liabilities increased $4.7 million with the inclusion of
the Sunnyvale and Colorado operations, higher accrued payroll taxes
and increases in expense levels generally . There were no
currently payable income taxes at October 31, 1995, since the
Company's fiscal 1995 tax estimates were adequate to discharge the
estimated current tax liability.
Long-term debt, less the current portion, increased $1.3
million as a result of a $1.4 million obligation (net of imputed
interest) incurred in connection with the Micro Mask acquisition
during fiscal 1995, offset by scheduled principal payments. The
current portion of long-term debt decreased $431,000 during fiscal
1995 as a result of a balloon payment and scheduled monthly
payments which became due. Deferred income taxes at October 31,
1995, increased $1.2 million from October 31, 1994, to $8.3 million
largely due to amounts provided on unrealized gains on investments.
The Company's commitments represent investments in additional
manufacturing capacity, as well as advanced equipment for research
and development of the next generation of high-end, more complex
photomasks. At October 31, 1995, the Company had commitments
outstanding for capital expenditures of approximately $38.4
million. Included in such commitments were $6.2 million related to
the construction in progress of the Company's new facility in
Texas, and $6.9 million related to cleanrooms and equipment for the
Company's new Singapore operations. Commitments for relocation of
the Company's current Texas operations and additional equipment for
Singapore and other operating locations are expected to be incurred
in fiscal 1996.
In March 1995, the Company entered into a new unsecured
revolving credit facility that provides for borrowings of up to $10
million per year in each of the following three years, subject to
a carryover in the second and third year of up to $3 million. Such
borrowings are convertible into term loans, payable in equal
quarterly installments over five years. The new facility provides
for essentially the same terms and conditions as the Company's
previous revolving credit agreement, including compliance with and
maintenance of certain financial covenants and ratios.
The Company will use its working capital, bank credit lines,
leasing arrangements and the net proceeds from its fiscal 1995
stock offering to finance its capital expenditures.The Company
believes that its currently available resources, together with its
capacity for substantial growth, are sufficient to satisfy its cash
requirements for the foreseeable future.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Independent Auditors'
Report............................................... 16
Consolidated Balance Sheet
at October 31, 1995 and 1994......................... 17 - 18
Consolidated Statement of Earnings for
the years ended October 31, 1995,
1994 and 1993........................................ 19
Consolidated Statement of Shareholders'
Equity for the years ended
October 31, 1995, 1994 and 1993..................... 20
Consolidated Statement of Cash Flows
for the years ended
October 31, 1995, 1994 and 1993..................... 21
Notes to Consolidated
Financial Statements................................ 22 - 31
Independent Auditors' Report
To the Board of Directors and Shareholders
Photronics, Inc.
Jupiter, Florida
We have audited the accompanying consolidated balance sheet of
Photronics, Inc. and its subsidiaries as of October 31, 1995 and
1994, and the related consolidated statements of earnings,
shareholders' equity and cash flows for each of the three years in
the period ended October 31, 1995. These financial statements are
the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present
fairly, in all material respects, the consolidated financial
position of Photronics, Inc. and its subsidiaries as of October 31,
1995 and 1994, and the results of their operations and their cash
flows for each of the three years in the period ended October 31,
1995 in conformity with generally accepted accounting principles.
As discussed in Note 1 to the consolidated financial statements, in
1994, the company changed its method of accounting for investments
and income taxes.
DELOITTE & TOUCHE LLP
Hartford, Connecticut
December 12, 1995
PHOTRONICS, INC. AND SUBSIDIARIES
Consolidated Balance Sheet
October 31, 1995 and 1994
(dollars in thousands)
Assets 1995 1994
====== ======== =======
Current assets:
Cash and cash equivalents $ 35,644 $25,092
Short-term investments 16,221 2,535
Accounts receivable (less allowance
for doubtful accounts of $195 in
1995 and $135 in 1994) 17,857 10,218
Inventories 6,357 2,469
Other current assets 3,380 2,140
-------- -------
Total current assets 79,459 42,454
Property, plant and equipment 72,063 39,205
Intangible assets (less accumulated
amortization of $2,156 in 1995
and $1,117 in 1994) 10,289 5,523
Investments 12,329 11,095
Other assets 78 69
-------- -------
$174,218 $98,346
======== =======
See accompanying notes to consolidated financial statements.
PHOTRONICS, INC. AND SUBSIDIARIES
Consolidated Balance Sheet
October 31, 1995 and 1994
(dollars in thousands, except per share amounts)
Liabilities and Shareholders' Equity 1995 1994
- ------------------------------------ -------- -------
Current liabilities:
Current portion of long-term debt $ 36 $ 467
Accounts payable 17,850 5,053
Accrued salaries and wages 5,810 2,615
Other accrued liabilities 6,110 1,423
Income taxes payable - 567
-------- -------
Total current liabilities 29,806 10,125
Long-term debt 1,809 495
Deferred income taxes 8,293 7,077
Other liabilities 265 247
-------- -------
Total liabilities 40,173 17,944
-------- -------
Commitments and contingencies
Shareholders' equity:
Preferred stock, $.01 par value,
2,000,000 shares authorized,
none issued and outstanding - -
Common stock, $.01 par value,
10,000,000 shares authorized in 1994,
20,000,000 shares authorized in 1995,
11,758,292 shares issued in 1995
and 6,659,929 shares issued in 1994 118 67
Additional paid-in capital 75,083 41,338
Retained earnings 52,970 34,338
Unrealized gains on investments 6,471 5,608
Treasury stock, 136,500 shares in 1995
and 91,000 shares in 1994 at cost (245) (245)
Deferred compensation on
restricted stock (352) (704)
-------- -------
Total shareholders' equity 134,045 80,402
-------- -------
$174,218 $98,346
======== =======
See accompanying notes to consolidated financial statements.
PHOTRONICS, INC. AND SUBSIDIARIES
Consolidated Statement of Earnings
Years Ended October 31, 1995, 1994 and 1993
(in thousands, except per share amounts)
1995 1994 1993
-------- ------- -------
Net sales $125,299 $80,696 $48,363
Costs and expenses:
Cost of sales 76,683 51,204 32,048
Selling, general and administrative 17,127 10,517 6,580
Research and development 7,899 4,738 2,744
-------- ------- -------
Operating income 23,590 14,237 6,991
Interest income 1,627 568 547
Interest expense (141) (75) (101)
Other income (expense), net 4,766 571 (1)
-------- ------- -------
Income before income taxes and
cumulative effect of change in
accounting for income taxes 29,842 15,301 7,436
Provision for income taxes 11,210 5,202 2,528
-------- ------- -------
Income before cumulative effect of
change in accounting for income taxes 18,632 10,099 4,908
Cumulative effect of change in
accounting for income taxes - 237 -
-------- ------- -------
Net income $ 18,632 $10,336 $ 4,908
======== ======= =======
Net income per common share:
Income before cumulative effect of
change in accounting for income taxes $1.66 $1.01 $0.59
Cumulative effect of change in
accounting for income taxes - 0.02 -
----- ----- -----
Net income $1.66 $1.03 $0.59
===== ===== =====
Weighted average number of common
shares outstanding 11,207 10,062 8,372
====== ====== =====
See accompanying notes to consolidated financial statements.
PHOTRONICS, INC. AND SUBSIDIARIES
Consolidated Statement of Shareholders' Equity
Years Ended October 31, 1995, 1994 and 1993
(in thousands)
Deferred
Compensa-
Common Stock Additional Unrealized tion on Total
--------------- Paid-In Retained Gains on Treasury Restricted Shareholders'
Shares Amount Capital Earnings Investments Stock Stock Equity
------ ------ ------- -------- ----------- -------- ---------- ------------
Balance at
November 1, 1992 5,381 $ 54 $25,108 $19,094 $ - $(245) $ - $ 44,011
Net income - - - 4,908 - - - 4,908
Issuance of common stock
related to acquisition 1,060 11 13,398 - - - - 13,409
Sale of common stock through
employee stock option and
purchase plans 43 - 298 - - - - 298
------ ---- ------- ------- ------ ----- ------ --------
Balance at
October 31, 1993 6,484 65 38,804 24,002 - (245) - 62,626
Net income - - - 10,336 - - - 10,336
Sale of common stock through
employee stock option and
purchase plans 124 1 1,478 - - - - 1,479
Restricted stock awards 52 1 1,056 - - - (1,057) -
Amortization of
restricted stock to
compensation expense - - - - - - 353 353
Cumulative effect of
change in accounting
for investments - - - - 5,608 - - 5,608
----- ---- ------- ------- ------ ----- ------ --------
Balance at
October 31, 1994 6,660 67 41,338 34,338 5,608 (245) (704) 80,402
Net income - - - 18,632 - - - 18,632
Sale of common stock in
connection with public
offering 1,500 15 29,336 - - - - 29,351
Issuance of common stock
related to acquisition 98 1 2,399 - - - - 2,400
Sale of common stock through
warrants and employee stock
option and purchase plans 170 2 2,043 - - - - 2,045
Amortization of
restricted stock to
compensation expense - - - - - - 352 352
Unrealized gain on
investments - - - - 863 - - 863
Three-for-two stock split 3,330 33 (33) - - - - -
----- ---- ------- ------- ------ ----- ------ --------
Balance at
October 31, 1995 11,758 $118 $75,083 $52,970 $6,471 $(245) $ (352) $134,045
====== ==== ======= ======= ====== ===== ====== ========
See accompanying notes to consolidated financial statements.
PHOTRONICS, INC. AND SUBSIDIARIES
Consolidated Statement of Cash Flows
Years Ended October 31, 1995, 1994 and 1993
(dollars in thousands)
1995 1994 1993
------- ------- -------
Cash flows from operating activities:
Net income $18,632 $10,336 $ 4,908
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization of
property, plant and equipment 8,747 7,953 5,538
Amortization of intangible assets 1,039 694 102
Gain on disposition of investments (5,110) (831) -
Deferred income taxes (842) 847 339
Cumulative effect of change in
accounting for income taxes - (237) -
Research and development expense
from acquisition 1,484 - -
Other 377 403 355
Changes in assets and liabilities,
net of effects of acquisitions:
Accounts receivable (7,639) (372) (4,911)
Inventories (2,922) 437 (292)
Other current assets 199 (533) 374
Accounts payable and accrued liabilities 20,154 1,738 4,081
Income taxes payable (567) 567 -
------- ------- -------
Net cash provided by operating activities 33,552 21,002 10,494
------- ------- -------
Cash flows from investing activities:
Acquisitions of photomask operations (10,536) - (5,308)
Deposits on and purchases of property,
plant and equipment (35,547) (6,187) (10,168)
Proceeds from sale of property, plant and equipment 118 23 322
Net change in short-term investments (13,686) 961 3,535
Proceeds from sale of investments 5,750 615 -
Other (28) (292) 25
------- ------- -------
Net cash used in investing activities (53,929) (4,880) (11,594)
------- ------- --------
Cash flows from financing activities:
Repayment of long-term debt (467) (735) (644)
Proceeds from issuance of common stock 31,396 1,479 298
------- ------- -------
Net cash provided by (used in) financing activities 30,929 744 (346)
------- ------- -------
Net increase (decrease) in cash and cash equivalents 10,552 16,866 (1,446)
Cash and cash equivalents at beginning of year 25,092 8,226 9,672
------- ------- -------
Cash and cash equivalents at end of year $35,644 $25,092 $ 8,226
======= ======= =======
See accompanying notes to consolidated financial statements.
PHOTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Years ended October 31, 1995, 1994 and 1993
(dollars in thousands, except per share amounts)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Consolidation
The accompanying consolidated financial statements include the accounts of
Photronics, Inc. and its subsidiaries. All significant intercompany
balances and transactions have been eliminated. Certain amounts in the
consolidated financial statements for periods prior to October 31, 1995
have been reclassified to conform to the current presentation.
Cash and Cash Equivalents
Cash and cash equivalents include cash and highly liquid investments
purchased with an original maturity of three months or less. The carrying
values approximate fair value based on the short maturity of the
instruments.
Investments
The Company's debt and equity investments available for sale are carried at
fair value. Prior to 1994, such investments were carried at cost. Short-
term investments include a diversified portfolio of high quality marketable
securities which will be liquidated as needed to meet the Company's current
cash requirements. All other investments are classified as non-current
assets. Unrealized gains and losses, net of tax, are reported as a
separate component of Shareholders' Equity. Gains and losses are included
in income when realized, determined based on the disposition of
specifically identified investments.
Inventories
Inventories, principally raw materials, are stated at the lower of cost,
determined under the first-in, first-out (FIFO) method, or market.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost less accumulated
depreciation. Repairs and maintenance as well as renewals and replacements
of a routine nature are charged to operations as incurred, while those
which improve or extend the lives of existing assets are capitalized. Upon
sale or other disposition, the cost of the asset and accumulated
depreciation are eliminated from the accounts, and any resulting gain or
loss is reflected in income.
For financial reporting purposes, depreciation and amortization are
computed on the straight-line method over the estimated useful lives of the
related assets. Buildings and improvements are depreciated over 15 to 30
years, machinery and equipment over 3 to 10 years and furniture, fixtures
and office equipment over 3 to 5 years. Leasehold improvements
are amortized over the life of the lease or the estimated useful life of
the improvement, whichever is less. For income tax purposes, depreciation
is computed using various accelerated methods and, in some cases,
different useful lives than those used for financial reporting.
Intangible Assets
Goodwill represents the excess of cost over fair value of assets acquired
and is being amortized on a straight-line basis over fifteen to twenty
years. Costs allocated to sales, non-compete and technology agreements
arising from business acquisitions and other intangible assets are being
amortized on a straight-line basis over the respective agreement periods
which range from three to ten years. The future economic benefit of the
carrying value of intangible assets is reviewed periodically and any
dimunition in useful life or impairment in value based on future
anticipated cash flows would be recorded in the period so determined.
Income Taxes
The provision for income taxes is computed on the basis of consolidated
financial statement income. Deferred income taxes reflect the tax effects
of differences between the carrying amounts of assets and liabilities for
financial reporting and the amounts used for income tax purposes. The
Company adopted Statement of Financial Accounting Standards No. 109 (SFAS
109), "Accounting for Income Taxes," effective November 1, 1993. The
cumulative effect of adopting SFAS 109 was an increase in income of $237,
or $0.02 per share, for fiscal year 1994.
Net Income Per Common Share
Net income per common and common equivalent share is calculated using the
weighted average number of common and common equivalent shares outstanding
during each year. When dilutive, stock options and stock purchase warrants
are included as common equivalent shares using the treasury stock method.
NOTE 2 - INVESTMENTS
Short-term investments consist principally of municipal bonds, commercial
paper, and money market and bond funds. The estimated fair value of short-
term investments, based upon current yields of like securities,
approximates cost, resulting in no significant unrealized gains or losses.
Short-term investments at October 31, 1995, mature by their terms, as
follows:
Due within one year $ 6,520
Due after one year, but within three years 3,484
Due after three years 6,217
-------
$16,221
=======
Other investments consist of equity securities of publicly traded
technology companies. The fair value of such investments is based upon
quoted market prices. The Company is a supplier to one of the investee
companies. Unrealized gains on investments were determined as follows:
October 31,
---------------------
1995 1994
------- -------
Fair value $12,329 $11,095
Cost 1,075 1,342
------- -------
11,254 9,753
Income tax effect 4,783 4,145
------- -------
Net unrealized gains $ 6,471 $ 5,608
======= =======
NOTE 3 - PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of the following:
October 31,
--------------------
1995 1994
------- -------
Land $ 2,200 $ 900
Buildings and improvements 13,305 5,253
Machinery and equipment 89,269 59,803
Leasehold improvements 7,213 4,743
Furniture, fixtures and office equipment 993 924
------- -------
112,980 71,623
Less accumulated depreciation and
amortization (40,917) (32,418)
------- -------
Property, plant and equipment $72,063 $39,205
======= =======
NOTE 4 - LONG-TERM DEBT
Long-term debt consists of the following:
October 31,
------ ------
1995 1994
------ ------
Acquisition indebtedness payable
December 1, 1998, net of interest
of $450 imputed at 7.45% $1,350 $ -
Industrial development bonds secured by
equipment, payable in December 1994,
with interest at 70% of prime rate
(7.75% at October 31, 1994) - 434
Industrial development mortgage note,
secured by building, with interest at
6.58%, payable through November 2005 495 528
------ ----
1,845 962
Less current portion 36 467
------ ----
Long-term debt $1,809 $495
====== ====
The industrial development bonds were issued through the Connecticut
Development Authority and the proceeds were used for the purchase of
equipment. Under the terms of the agreements, a portion of the Company's
property, plant and equipment was pledged as collateral and the Company was
subject to certain financial covenants including maintaining certain
financial ratios. The bonds were also guaranteed by a significant
shareholder of the Company.
Long-term debt matures as follows: 1997 - $38; 1998 - $41; 1999 - $1,394;
2000 - $46; years after 2000 - $290. The fair value of long-term debt not
yet substantively extinguished is estimated based on the current rates
offered to the Company and is not significantly different from carrying
value.
In March 1995, the Company entered into an unsecured revolving credit
facility that provides for borrowings of up to $10 million per year in each
of the following three years, subject to a carryover in the second and
third year of up to the lesser of $3 million and the amount of borrowing
capacity not used in the prior years. The Company is charged a commitment
fee on the average unused amount of the available credit and is subject to
compliance with and maintenance of certain financial covenants and ratios.
At October 31, 1995, the Company had not borrowed any amounts under this
agreement.
Cash paid for interest was $38, $75 and $101 in 1995, 1994 and 1993,
respectively.
NOTE 5 - SHAREHOLDERS' EQUITY
In January 1995, the Company's Board of Directors authorized a three-for-
two stock split effected in the form of a stock dividend payable to
shareholders of record as of March 20, 1995. The stock split resulted in
the issuance of 3.3 million additional shares of common stock. All
applicable share and per share amounts reflected in the financial
statements have been restated to reflect the stock split. On March 16,
1995, the shareholders approved an amendment to the Company's Certificate
of Incorporation increasing the number of common shares, $0.01 par value,
which the Company is authorized to issue from 10 million to 20 million
shares.
In connection with a public offering, in April and May 1995, the Company
issued 1,500,000 new shares of common stock at a price of $21.00 per share
($19.85 per share after underwriting discounts), 40,000 shares of common
stock due to the exercise of stock options at prices ranging from $1.83 to
$3.17 per share and 7,500 additional shares of common stock resulting from
the exercise of a warrant at $5.24 per share. The proceeds, net of costs
of the issue, amounted to $29.6 million.
In June 1995, the Company issued 98,559 shares of common stock in
connection with the acquisition of Microphase Laboratories, Inc., and in
October 1993, the Company issued 1,590,000 shares of common stock as part
of the acquisition price for the assets and operations of Toppan
Printronics (USA), Inc. (see Note 6).
NOTE 6 - ACQUISITIONS
Hoya Micro Mask, Inc.
In December 1994, the Company acquired certain assets held by Hoya Micro
Mask, Inc. ("Micro Mask"), an independent photomask manufacturer with
manufacturing operations located in Sunnyvale, California. The transaction
included the purchase of the land, buildings, inventory and certain assets
other than cash and receivables. In addition, significant manufacturing
systems owned by Micro Mask were leased by the Company from Micro Mask.
The acquisition was financed through the payment of approximately $10.2
million in cash and the obligation to pay $1.8 million, without interest,
four years after the closing. The operating lease of the significant
manufacturing systems has a term ranging from 44 to 62 months and includes
the right to purchase the systems at fair market value at the end of the
lease. The acquisition was accounted for as a purchase and, accordingly,
the acquisition price was allocated to property, plant and equipment as
well as certain intangible assets based on relative fair value. The excess
of purchase price over the fair value of assets acquired is being amortized
over 20 years. The consolidated statement of earnings includes the results
of Micro Mask's operations from December 1, 1994, the effective date of the
acquisition. The consolidated results of the Company's operations on a
proforma basis (unaudited) for the year ended October 31, 1994, as though
the purchase had been made as of the beginning of the year, would have
reflected sales of approximately $106 million and net income of
approximately $11 million, or $1.10 per common share.
Microphase Laboratories, Inc.
In June 1995, the Company acquired the manufacturing operations and assets,
exclusive of cash and accounts receivable, of Microphase Laboratories, Inc.
("Microphase"), an independent photomask manufacturer located in Colorado
Springs, Colorado, in exchange for 98,559 shares of common stock of the
Company valued at $2.4 million. The acquisition was accounted for as a
purchase. Of the total purchase price, $1.5 million was allocated to
Microphase's research and development projects and, accordingly, was
charged to research and development expenses. The consolidated statement
of earnings includes the results of the Microphase operations beginning
June 20, 1995, the effective date of the acquisition. Such results were
not material to the Company.
Toppan Printronics (USA), Inc.
In October 1993, the Company acquired the photomask manufacturing
operations and assets of Toppan Printronics (USA), Inc. ("TPI") located in
Dallas, Texas. The Company financed the acquisition through the issuance
of 1,590,000 shares of common stock of the Company valued at $13.4 million
and the payment of $4.7 million in cash, and incurred $0.7 million in
expenses. Under the terms of the agreement, the Company is required to pay
TPI annual commissions of from 1% to 2.5% of sales over $3 million to Texas
Instruments Incorporated, over a ten-year period. Such commissions
amounted to $0.5 million in 1995 and $0.3 million in 1994. The acquisition
was accounted for as a purchase and, accordingly, the acquisition price was
allocated to property, plant and equipment as well as certain intangible
assets based on relative fair value. The excess of purchase price over the
fair value of assets acquired is being amortized over 15 years. The
consolidated statement of earnings includes the results of the former TPI
operations from October 1, 1993, the effective date of the acquisition.
The consolidated results of the Company's operations on a proforma basis
(unaudited) for the year ended October 31, 1993 as though the purchase had
been made as of the beginning of the year would have reflected sales of
approximately $72.0 million and net income of approximately $6.3 million,
or $0.64 per common share.
The proforma results of operations are not necessarily indicative of the
actual operating results that would have occurred had the transactions been
consummated at the beginning of the year, or of the future combined
operating results.
NOTE 7 - INCOME TAXES
The provision for income taxes consists of the following:
1995 1994 1993
------- ------ ------
Current:
Federal $10,234 $3,722 $1,877
State 1,818 633 312
------- ------ ------
12,052 4,355 2,189
------- ------ ------
Deferred:
Federal (617) 832 275
State (225) 15 64
------- ------ ------
(842) 847 339
------- ------ ------
$11,210 $5,202 $2,528
======= ====== ======
The provision for income taxes differs from the amount computed by applying
the statutory U.S. Federal income tax rate to income before taxes as a
result of the following:
1995 1994 1993
------- ------ ------
U.S. Federal income tax at
statutory rate $10,445 $5,255 $2,528
State income taxes, net of
Federal benefit 1,035 428 245
Tax benefits of tax
exempt income (389) (168) (141)
Other, net 119 (313) (104)
------- ------ ------
$11,210 $5,202 $2,528
======= ====== ======
The Company's net deferred tax liability consists of the following:
October 31, November 1,
1995 1994
----------- -----------
Deferred income tax liabilities:
Property, plant and equipment $3,761 $3,072
Investments 4,783 4,145
Other 31 38
------ ------
Total deferred tax liability 8,575 7,255
------ ------
Deferred income tax assets:
Reserves not currently deductible 1,528 445
Other 643 203
------ ------
Total deferred tax asset 2,171 648
------ ------
Net deferred tax liability $6,404 $6,607
====== ======
Cash paid for income taxes was $11.6 million, $3.7 million and $2.2 million
in 1995, 1994 and 1993, respectively.
NOTE 8 - EMPLOYEE STOCK PURCHASE AND OPTION PLANS
In March 1994, the shareholders approved the adoption of the 1994 Stock
Option Plan which includes provisions allowing for the award of qualified
and non-qualified stock options and the granting of restricted stock
awards. A total of 450,000 shares of common stock may be issued pursuant
to options or restricted stock awards granted under the Plan. Restricted
stock awards do not require the payment of any cash consideration by the
recipient, but shares subject to an award may be forfeited unless
conditions specified in the grant are satisfied.
The Company has adopted a series of other stock option plans under which
incentive and non-qualified stock options for a total of 1,350,000 shares
of the Company's common stock may be granted to employees and directors.
All plans provide that the exercise price may not be less than the fair
market value of the common stock at the date the options are granted and
limit the maximum term of options granted to a range of from five to ten
years.
The following table summarizes stock option activity under the plans:
Stock Options Exercise Prices
------------- ---------------
Balance at November 1, 1992 856,332 $ 1.83-6.17
Granted 155,400 7.50-8.67
Exercised (39,015) 1.83-6.17
Cancelled (8,475) 2.50-6.17
-------
Balance at October 31, 1993 964,242 1.83-8.67
Granted 249,150 10.17-14.83
Exercised (166,017) 1.83-8.67
Cancelled (124,613) 6.17-13.42
-------
Balance at October 31, 1994 922,762 1.83-14.83
Granted 241,640 18.67-27.38
Exercised (145,274) 1.83-13.42
Cancelled (39,940) 6.17-24.00
-------
Balance at October 31, 1995 979,188 $ 1.83-27.38
=======
At October 31, 1995, 75,762 shares were available for grant and 462,458
shares were exercisable.
In 1994, restricted stock awards representing a total of 78,750 shares were
awarded to certain key employees. The market value of the grant amounted
to $1.1 million at the date of grant and was charged to "Deferred
Compensation on Restricted Stock", a component of Shareholders' Equity.
Such amount is amortized as compensation expense over the three-year period
during which the shares under these awards are subject to forfeiture.
During 1995, 26,250 of these shares were vested.
In 1992, the shareholders approved the Company's adoption of an Employee
Stock Purchase Plan (Purchase Plan), under which 300,000 shares of common
stock are reserved for issuance. The Purchase Plan enables eligible
employees to subscribe, through payroll deductions, to purchase shares of
the Company's common stock at a purchase price equal to 85% of the lower of
the fair market value on the commencement date of the offering and the last
day of the payroll payment period. At October 31, 1995, 62,271 shares had
been issued and 33,647 shares were subject to outstanding subscriptions
under the Purchase Plan.
NOTE 9 - EMPLOYEE BENEFIT PLANS
The Company maintains a 401(k) Savings and Profit-Sharing Plan (the "Plan")
which covers all employees who have completed six months of service and are
eighteen years of age or older. Under the terms of the Plan, an employee
may contribute up to 15% of their compensation which will be matched by the
Company at 50% of the employee's contributions which are not in excess of
4% of the employee's compensation. Employee and employer contributions
vest fully upon contribution. Employer contributions amounted to $0.5
million, $0.3 million and $0.2 million in 1995, 1994 and 1993,
respectively.
The Company maintains a cafeteria plan to provide eligible employees with
the option to receive non-taxable medical, dental, disability and life
insurance benefits. The cafeteria plan is offered to all active full-time
employees and their qualifying dependents. The Company's contribution
amounted to $1.4 million in 1995, $1.2 million in 1994 and $0.9 million in
1993.
NOTE 10 - LEASES
The Company leases various real estate and equipment under non-cancelable
operating leases. Rental expense under such leases amounted to $4.9
million in 1995, $2.0 million in 1994 and $1.0 million in 1993. Included
in such amounts were $0.1 million in each year to affiliated entities,
which are owned, in part, by a significant shareholder of the Company.
Future minimum lease payments under non-cancelable operating leases with
initial or remaining terms in excess of one year amounted to $14.2 million
at October 31, 1995, as follows:
1996.....$3,924 1999...........$1,885
1997..... 3,756 2000........... 859
1998..... 3,309 Thereafter..... 509
Included in such future lease payments are amounts to affiliated entities
of $0.1 million in each year from 1996 to 2000, and $0.3 million in years
thereafter.
NOTE 11 - COMMITMENTS AND CONTINGENCIES
The Company and a significant shareholder have jointly guaranteed a loan
totaling approximately $0.6 million as of October 31, 1995, on certain real
estate which is being leased by the Company. The Company is subject to
certain financial covenants in connection with the guarantee.
As of October 31, 1995, the Company had capital expenditure purchase
commitments outstanding of approximately $38.4 million.
Financial instruments that potentially subject the Company to credit risk
consist principally of trade receivables and temporary cash investments.
The Company sells its products primarily to manufacturers in the
semiconductor and computer industries in North America, Europe and Asia.
Sales to customers in California accounted for 37%, 36% and 50% of the
Company's total net sales in 1995, 1994 and 1993, respectively. Foreign
and export sales accounted for approximately 11% of sales in 1995, 13% in
1994 and 8% in 1993. The Company's largest single customer represented
approximately 32% of total net sales in 1995, 36% in 1994 and 10% in 1993.
The Company believes that the concentration of credit risk in its trade
receivables is substantially mitigated by the Company's ongoing credit
evaluation process and relatively short collection terms. The Company does
not generally require collateral from customers. The Company establishes
an allowance for doubtful accounts based upon factors surrounding the
credit risk of specific customers, historical trends and other information.
Historically, the Company has not incurred any significant credit related
losses.
NOTE 12 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The following table sets forth certain unaudited quarterly financial data:
First Second Third Fourth Year
------- ------- ------- ------- --------
1995:
Net sales $26,176 $30,037 $32,854 $36,232 $125,299
Gross profit 9,759 11,615 12,839 14,403 48,616
Net income $ 3,267 $ 3,820 $ 6,460 $ 5,085 $ 18,632
Net income
per share(b) $ 0.32 $ 0.36 $ 0.54 $ 0.42 $ 1.66
1994:
Net sales $18,857 $18,641 $21,313 $21,885 $80,696
Gross profit 6,332 6,464 8,217 8,479 29,492
Net income $ 2,274(a) $ 2,110 $ 2,765 $ 3,187 $10,336(a)
Net income
per share(b) $ 0.23(a) $ 0.21 $ 0.27 $ 0.31 $ 1.03(a)
- -----
(a) Includes $237 ($0.02 per share) resulting from the cumulative effect
of adoption of Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes".
(b) Quarterly per share data may not equal the annual amounts due to
changes in weighted average shares and share equivalents
outstanding.
- -----
NOTE 13 - SUBSEQUENT EVENT
On January 24, 1996, the Company acquired the photomask manufacturing
operations and assets of Plessey Semiconductors Limited (Plessey) located
in Oldham, United Kingdom, for approximately $5.0 million in cash. In
connection with the transaction, the Company leased back the facilities
from Plessey previously utilized by them for the manufacture of photomasks.
It is the Company's intention to relocate the operation to an independent
facility in the Manchester, UK, area in approximately one year. The
acquisition will be accounted for as a purchase and, accordingly, the
acquisition price will be allocated to property and equipment based on
relative fair value. The results of the Plessey acquisition are not
expected to be material to the Company.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
There were no disagreements on any accounting and financial disclosure
matters between the Company and its independent certified public
accountants for which a Form 8-K was required to be filed during the 24
months ended October 31, 1995 or for the period from October 31, 1995 to
the date hereof.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information as to Directors required by Item 401 and 405 of
Regulation S-K is incorporated by reference to the Company's definitive
proxy statement (the "Definitive Proxy Statement") which will be filed with
the Securities and Exchange Commission pursuant to Regulation 14A within
120 days after the end of the fiscal year covered by this Form 10-K. The
information as to Executive Officers is included in Part I, Item 1a of this
report, "Executive Officers".
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 402 of Regulation S-K is incorporated
by reference to the Definitive Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information required by Item 403 of Regulation S-K is incorporated
by reference to the Definitive Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by Item 404 of Regulation S-K is incorporated
by reference to the Definitive Proxy Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K
(A) The following documents are filed as part of this report:
1) Financial Statements:
Independent Auditors' Report
Consolidated Balance Sheet at October 31, 1995 and 1994
Consolidated Statement of Earnings for the years
ended October 31, 1995, 1994 and 1993
Consolidated Statement of Shareholders' Equity for the
years ended October 31, 1995, 1994 and 1993
Consolidated Statement of Cash Flows for the years
ended October 31, 1995, 1994 and 1993
Notes to Consolidated Financial Statements
2) Financial Statement Schedules:
Schedules for which provision is made in Regulation S-X of the
Securities and Exchange Commission are not required under the
related instructions or are inapplicable and, therefore, have
been omitted.
3) Exhibits: See Table of Exhibits, page 36.
(B) Reports on Form 8-K
No report on Form 8-K was filed by the Company during the fourth
quarter of the Company's fiscal year ended October 31, 1995.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
PHOTRONICS, INC.
(Registrant)
By:___CONSTANTINE S. MACRICOSTAS___ ___January 25, 1996___
Constantine S. Macricostas
Chairman of the Board,
Chief Executive Officer
and Director
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
By:___CONSTANTINE S. MACRICOSTAS___ ___January 25, 1996___
Constantine S. Macricostas
Chairman of the Board,
Chief Executive Officer
and Director
By:___MICHAEL J. YOMAZZO___ ___January 25, 1996___
Michael J. Yomazzo
President and Director
By:___ROBERT J. BOLLO___ ___January 25, 1996___
Robert J. Bollo
Vice President/Finance
Chief Financial Officer
By:___WALTER M. FIEDEROWICZ___ ___January 25, 1996___
Walter M. Fiederowicz
Director
By:___JOSEPH A. FIORITA, JR.___ ___January 25, 1996___
Joseph A. Fiorita, Jr.
Director
By:___MASAHIRO FUJII___ ___January 16, 1996___
Masahiro Fujii
Director
95\10-K.1/p
TABLE OF EXHIBITS
3.1 Certificate of Incorporation. (1)
3.2 By-Laws, as amended. (1)
3.3 Amendment to Certificate of Incorporation, dated March 16,
1990. (4)
3.4 Amendment to Certificate of Incorporation, dated March 16,
1995. (13)
4.1 Form of Stock Certificate. (1)
10.1 Loan Agreement, dated August 10, 1984, among the Company, Fairfield
Associates, and the Connecticut Development Authority. (1)
10.2 Indenture of Trust, dated August 10, 1984, between the Connecticut
Development Authority and Citytrust. (1)
10.3 Security Agreement, dated August 10, 1984, between the Company and
the Connecticut Development Authority, with assignment to
Citytrust, as Trustee. (1)
10.4 Lease Agreement, dated August 10, 1984, between the Company and
Fairfield Associates. (1)
10.5 Guaranty Agreement, dated August 10, 1984, by the Company and
Constantine Macricostas to Citytrust, as Trustee. (1)
10.6 Assumption Agreement between the Company, MC2 and the Connecticut
Development Authority, dated October 15, 1992, and related Note,
Mortgage and Collateral Assignment of Leases and amendments
thereto. (7)
10.7 Assumption Agreement, Third Amendment to Loan Agreement and
Amendment to Guaranty Photronic Labs Incorporated Project - 1984
Series, dated August 28, 1992, by and among Photronics California,
Inc., Photronics Financial Services, Inc., Photronics Investment
Services, Inc., Photronics Texas, Inc., the Company, Constantine
Macricostas, the Connecticut Development Authority, The Chase
Manhattan Bank of Connecticut, N.A. and Fairfield Associates. (7)
10.8 The Company's 1986 Amended and Restated Incentive Stock Option
Plan. (2) +
10.9 Amendment #1 to the Company's 1986 Amended and Restated Incentive
Stock Option Plan. (4) +
10.10 The Company's 1986 Non-Qualified Stock Option Plan, as amended.
(3) +
10.11 The Company's 1988 Non-Qualified Stock Option Plan. (11) +
10.12 Amendment #1 to the Company's 1988 Non-Qualified Stock Option Plan.
(4) +
10.13 Lease, dated January 30, 1987, between the Company and Geomax. (1)
10.14 Addendums to Lease dated January 30, 1987, between the Company and
Geomax. (11)
10.15 Lease, dated June 30, 1988, and addendums thereto between the
Company and Geomax. (11)
10.16 Lease, dated May 8, 1992, between the Company and Geomax. (8)
10.17 Amendment to Security Agreements, dated October 31, 1988, by and
among the Company, Citytrust, Constantine S. Macricostas and Mayo
Associates. (11)
10.18 Amendment to Loan Agreements between the Company and the
Connecticut Development Authority, dated as of June 8, 1990. (4)
10.19 Second Amendment to Loan Agreement dated as of December 20, 1991 by
and among the Company, the Connecticut Development Authority and
The Chase Manhattan Bank of Connecticut, N.A. (5).
10.20 Form of severance agreement between the Company and each of Messrs.
Macricostas, Yomazzo and Moonan. (11) +
10.21 Lease dated as of November 1, 1989 between the Company, MC3, Inc.
and Alpha-Omega Associates. (11)
10.22 Consulting Agreement, dated June 1, 1992, between Joseph Fiorita
and the Company. (7) +
10.23 The Company's 1992 Stock Option Plan. (6) +
10.24 The Company's 1992 Employee Stock Purchase Plan. (6)
10.25 The Company's 1994 Employee Stock Option Plan. (9) +
10.26 Overall Agreement for Strategic Alliance, dated September 13, 1993,
by an among Toppan Printing Co., Ltd. ("Toppan"), Toppan
Printronics (USA), Inc. ("TPI") and Toppan Electronics (USA), Inc.
("TEI") and the Company. (8)
10.27 Asset Purchase Agreement, dated September 13, 1993, by and among
the Company, Toppan and TPI. (8)
10.28 Stock Purchase Agreement, dated September 13, 1993, by and between
the Company and Toppan. (8)
10.29 Technology Transfer Agreement, dated October 1, 1993, by and among
the Company, Toppan and TPI. (8)
10.30 Purchase Agreement by and among Toppan, TPI and Texas Instruments
Incorporated ("TI"), dated March 31, 1990, amendments thereto and
related assignment to the Company dated October 1, 1993. (8)
10.31 Asset Purchase Agreement, dated October 26, 1994, by and among the
Company, Hoya Micro Mask, Inc. ("Micro Mask") and Hoya Corporation
USA ("Hoya"). (10)
10.32 Equipment Lease Agreement, dated December 1, 1994, by and between
the Company and Micro Mask. (10)
10.33 Agreement of Sale and Purchase, dated October 26, 1994, by and
between Photronics California, Inc. and Micro Mask. (10)
10.34 Continuing Guaranty of the Company, dated December 1, 1994. (10)
10.35 Continuing Guaranty of Hoya, dated December 1, 1994. (10)
10.36 Form of Agreement regarding Life Insurance between the Company and
each of Messrs Macricostas, Yomazzo and Moonan. (12) +
10.37 Revolving Credit and Term Loan Agreement between the Company and
Chemical Bank, dated as of March 1, 1995. (13)
21 List of Subsidiaries. *
23 Consent of Deloitte & Touche LLP. *
____________________
* Filed herewith.
+ Represents a management contract or compensatory plan or
arrangement required to be filed as an exhibit to this form
pursuant to item 14(c) of this report.
- --------------------
(1) Filed as an exhibit to the Company's Registration Statement on Form
S-1, File Number 33-11694, which was declared effective by the
Commission on March 10, 1987, and incorporated herein by reference.
(2) Filed as an exhibit to the Company's Registration Statement on Form
S-8, File Number 33-17405, which was declared effective on October
13, 1987, and incorporated herein by reference.
(3) Filed as an exhibit to the Company's Registration Statement on Form
S-8, File Number 33-17530, which was declared effective on October
19, 1987, and incorporated herein by reference.
(4) Filed as an exhibit to the Company's Registration Statement on Form
S-2, File Number 33-34772 which was declared effective by the
Commission on June 22, 1990, and incorporated herein by reference.
(5) Filed as an exhibit to the Company's Annual Report on Form 10-K for
the fiscal year ended October 31, 1991 and incorporated herein by
reference.
(6) Filed as an exhibit to the Company's Registration Statement on Form
S-8, File Number 33-47446, which was filed on April 24, 1992, and
incorporated herein by reference.
(7) Filed as an exhibit to the Company's Annual Report on Form 10-K for
the fiscal year ended October 31, 1992, and incorporated herein by
reference.
(8) Filed as an exhibit to the Company's Current Report on Form 8-K,
dated October 8, 1993, and incorporated herein by reference.
(9) Filed as an exhibit to the Company's Registration Statement on Form
S-8, File Number 33-78102, which was filed on April 22, 1994, and
incorporated herein by reference.
(10) Filed as an exhibit to the Company's Current Report on Form 8-K,
dated December 6, 1994, and incorporated herein by reference.
(11) Filed as an exhibit to the Company's Annual Report on Form 10-K for
the fiscal year ended October 31, 1993, and incorporated herein by
reference.
(12) Filed as an exhibit to the Company's Quarterly Report on Form 10-Q
for the quarter ended July 31, 1995, and incorporated herein by
reference.
(13) Filed as an exhibit to the Company's Current Report on Form 8-K,
dated March 24, 1995, and incorporated herein by reference.
INDEX TO EXHIBITS
PAGE
----
21 List of Subsidiaries................................41
23 Consent of Deloitte & Touche LLP....................42
Exhibit 21
LIST OF SUBSIDIARIES
State or Jurisdiction
Name of Incorporation
Photronics International
Engineering, Inc. Virgin Islands
Photronics California, Inc. California
Photronics Texas, Inc. Texas
Photronics Financial Services, Inc. Florida
Photronics Investment Services, Inc. Nevada
Photronics-Toppan Texas, Inc. Texas
Beta Squared, Inc. Connecticut
PLI Management Corp. Florida
Photronics Singapore Pte Ltd. Singapore
Photronics (UK) Limited England
Photronics Connecticut, Inc. Connecticut
Photronics Colorado, Inc. Colorado
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration
Statements Nos. 33-17405, 33-17530, 33-28118, 33-47446 and 33-78102
of Photronics, Inc. on Form S-8 of our report dated December 12,
1995 appearing in this Annual Report on Form 10-K of Photronics,
Inc. for the year ended October 31, 1995.
DELOITTE & TOUCHE LLP
Hartford, Connecticut
January 25, 1996
5
1,000
12-MOS
OCT-31-1995
OCT-31-1995
35,644
9,596
16,221
195
6,357
79,459
112,981
40,918
174,218
29,806
1,806
0
0
118
133,927
174,218
125,299
125,299
76,683
76,683
0
60
141
29,842
11,210
18,632
0
0
0
18,632
1.66
0
