10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 1, 2015

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

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 incorporation or organization)	(IRS Employer Identification No.)

15 Secor Road, Brookfield, Connecticut	06804
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code (203) 775-9000

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 periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer," "accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer ☐ Accelerated Filer ☒ Non-Accelerated Filer ☐ Smaller Reporting Company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐  No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class	Outstanding at February 27, 2015
Common Stock, $0.01 par value	66,445,220 Shares

Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements made by or on behalf of Photronics, Inc. ("Photronics" or the "Company" or “we”). These statements are based on management's beliefs, as well as assumptions made by, and information currently available to, management. Forward-looking statements may be identified by words like "expect," "anticipate," "believe," "plan," "projects," “could,” “estimate,” “intend,” “may,” “will” and similar expressions, or the negative of such terms, or other comparable terminology. All forward-looking statements involve risks and uncertainties that are difficult to predict. In particular, any statement contained in this quarterly report on Form 10-Q or in other documents filed with the Securities and Exchange Commission, in press releases or in the Company's communications and discussions with investors and analysts in the normal course of business through meetings, phone calls, or conference calls regarding, among other things, the consummation and benefits of transactions and acquisitions, expectations with respect to future sales, financial performance, operating efficiencies, or product expansion, are subject to known and unknown risks, uncertainties, and contingencies, many of which are beyond the control of the Company. Various factors may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements expressed or implied by forward-looking statements. Factors that might affect forward-looking statements include, but are not limited to, overall economic and business conditions; economic and political conditions in international markets; the demand for the Company's products; competitive factors in the industries and geographic markets in which the Company competes; federal, state and international tax requirements (including tax rate changes, new tax laws and revised tax law interpretations); interest rate and other capital market conditions, including changes in the market price of the Company's securities; foreign currency exchange rate fluctuations; changes in technology; the timing, impact, and other uncertainties relating to transactions and acquisitions, divestitures and joint ventures as well as decisions the Company may make in the future regarding the Company’s business, capital and organizational structure and other matters; the seasonal and cyclical nature of the semiconductor and flat panel display industries; management changes; damage or destruction to the Company's facilities, or the facilities of its customers or suppliers, by natural disasters, labor strikes, political unrest, or terrorist activity; the ability of the Company to (i) place new equipment in service on a timely basis; (ii) obtain additional financing; (iii) achieve anticipated synergies and cost savings; (iv) fully utilize its tools; (v) achieve desired yields, pricing, product mix, and market acceptance of its products and (vi) obtain necessary export licenses. Any forward-looking statements should be considered in light of these factors. Accordingly, there is no assurance that the Company's expectations will be realized. The Company does not assume responsibility for the accuracy and completeness of the forward-looking statements and does not assume an obligation to provide revisions to any forward-looking statements, except as otherwise required by securities and other applicable laws.

2

PHOTRONICS, INC.

AND SUBSIDIARIES

INDEX

PART I.	FINANCIAL INFORMATION	Page
Item 1.	Condensed Consolidated Financial Statements
	Condensed Consolidated Balance Sheets at February 1, 2015 and November 2, 2014	4
	Condensed Consolidated Statements of Income for the Three Months Ended February 1, 2015 and February 2, 2014	5
	Condensed Consolidated Statements of Comprehensive Income for theThree Months Ended February 1, 2015 and February 2, 2014	6
	Condensed Consolidated Statements of Cash Flows for theThree Months Ended February 1, 2015 and February 2, 2014	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	23
Item 4.	Controls and Procedures	23
PART II.	OTHER INFORMATION
Item 1A.	Risk Factors	24
Item 6.	Exhibits	25

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PART I. FINANCIAL INFORMATION

Item 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

PHOTRONICS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except per share amounts)

(unaudited)

	February 1, 2015		November 2, 2014
ASSETS
Current assets:
Cash and cash equivalents	$	168,610	$	192,929
Accounts receivable, net of allowance of $3,406 in 2015and $3,078 in 2014		99,183		94,515
Inventories		23,786		22,478
Other current assets		28,924		26,570
Total current assets		320,503		336,492
Property, plant and equipment, net		593,020		550,069
Investment in joint venture		93,078		93,122
Intangible assets, net		29,203		30,294
Deferred income taxes		10,746		11,036
Other assets		6,327		8,170
Total assets	$	1,052,877	$	1,029,183
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term borrowings	$	10,457	$	10,381
Accounts payable		125,628		86,495
Accrued liabilities		40,865		42,241
Total current liabilities		176,950		139,117
Long-term borrowings		129,362		131,805
Other liabilities		18,520		18,767
Total liabilities		324,832		289,689
Commitments and contingencies
Equity:
Preferred stock, $0.01 par value, 2,000 shares authorized, none issued and outstanding		-		-
Common stock, $0.01 par value, 150,000 shares authorized, 66,209 shares issued and outstanding at February 1, 2015 and65,930 shares issued and outstanding at November 2, 2014		662		659
Additional paid-in capital		521,580		520,182
Retained earnings		89,272		85,435
Accumulated other comprehensive income		5,595		21,774
Total Photronics, Inc. shareholders' equity		617,109		628,050
Noncontrolling interests		110,936		111,444
Total equity		728,045		739,494
Total liabilities and equity	$	1,052,877	$	1,029,183

See accompanying notes to condensed consolidated financial statements.

4

PHOTRONICS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)

	Three Months Ended
	February 1, 2015			February 2, 2014
Net sales	$	123,505		$	101,542
Costs and expenses:
Cost of sales		(95,321	)		(78,660	)
Selling, general and administrative		(11,944	)		(12,278	)
Research and development		(4,681	)		(4,974	)
Operating income		11,559			5,630
Other income (expense):
Interest expense		(1,370	)		(1,984	)
Interest and other income (expense), net		87			1,111
Income before income tax provision		10,276			4,757
Income tax provision		(3,134	)		(2,716	)
Net income		7,142			2,041
Net income attributable to noncontrolling interests		(3,305	)		(48	)
Net income attributable to Photronics, Inc. shareholders	$	3,837		$	1,993
Earnings per share:
Basic	$	0.06		$	0.03
Diluted	$	0.06		$	0.03
Weighted-average number of common shares outstanding:
Basic		66,066			61,200
Diluted		67,020			62,136

See accompanying notes to condensed consolidated financial statements.

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PHOTRONICS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)

	Three Months Ended
	February 1, 2015			February 2, 2014
Net income	$	7,142		$	2,041
Other comprehensive income (loss), net of tax of $0:
Foreign currency translation adjustments		(20,074	)		(8,524	)
Amortization of cash flow hedge		32			32
Total other comprehensive loss, net of tax		(20,042	)		(8,492	)
Comprehensive loss		(12,900	)		(6,451	)
Less: comprehensive loss attributable to noncontrolling interests		558			32
Comprehensive loss attributable to Photronics, Inc. shareholders	$	(12,342	)	$	(6,419	)

See accompanying notes to condensed consolidated financial statements.

6

PHOTRONICS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Three Months Ended
	February 1, 2015			February 2, 2014
Cash flows from operating activities:
Net income	$	7,142		$	2,041
Adjustments to reconcile net incometo net cash provided by operating activities:
Depreciation and amortization		20,854			17,899
Changes in assets and liabilities:
Accounts receivable		(7,888	)		(40	)
Inventories		(1,998	)		(1,016	)
Other current assets		(4,544	)		(806	)
Accounts payable, accrued liabilities, and other		8,734			(3,881	)
Net cash provided by operating activities		22,300			14,197
Cash flows from investing activities:
Purchases of property, plant and equipment		(40,371	)		(12,184	)
Increase in restricted cash		-			(1,698	)
Other		43			67
Net cash used in investing activities		(40,328	)		(13,815	)
Cash flows from financing activities:
Repayments of long-term borrowings		(2,367	)		(23,554	)
Payments of deferred financing fees		-			(310	)
Proceeds from share-based arrangements		768			518
Net cash used in financing activities		(1,599	)		(23,346	)
Effect of exchange rate changes on cash and cash equivalents		(4,692	)		(3,423	)
Net decrease in cash and cash equivalents		(24,319	)		(26,387	)
Cash and cash equivalents at beginning of period		192,929			215,615
Cash and cash equivalents at end of period	$	168,610		$	189,228
Supplemental disclosure of non-cash information:
Accrual for property, plant and equipment purchased during the period	$	54,510		$	34,335

See accompanying notes to condensed consolidated financial statements.

7

PHOTRONICS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Three Months Ended February 1, 2015 and February 2, 2014

(unaudited)

(in thousands, except share amounts)

NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION

Photronics, Inc. and its subsidiaries ("Photronics" or “the Company") is one of the world's leading manufacturers 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 flat panel displays ("FPDs"), and are used as masters to transfer circuit patterns onto semiconductor wafers and flat panel substrates during the fabrication of integrated circuits ("ICs") and a variety of FPDs and, to a lesser extent, other types of electrical and optical components. The Company currently operates principally from nine manufacturing facilities, two of which are located in Europe, three in Taiwan, one in Korea, and three in the United States.

On April 4, 2014, DNP Photomask Technology Taiwan Co., Ltd. (“DPTT”), a wholly owned subsidiary of Dai Nippon Printing Co., Ltd. (“DNP”), merged into Photronics Semiconductor Mask Corporation (“PSMC”), a wholly owned subsidiary of Photronics. All of the assets and liabilities of DPTT existing prior to the merger were assumed by the renamed surviving entity of the merger, Photronics DNP Mask Corporation (“PDMC”). Photronics and DNP own 50.01 percent and 49.99 percent of PDMC, respectively.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. The Company is typically impacted during its first fiscal quarter by the North American and European holiday periods, as some customers reduce their effective workdays and orders during these periods. Additionally, the Company can be impacted during its first or second quarter by the Asian New Year holiday period, which may also reduce customer orders. Operating results for the interim period are not necessarily indicative of the results that may be expected for the fiscal year ending November 1, 2015. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended November 2, 2014.

NOTE 2 – ACQUISITION OF DNP PHOTOMASK TECHNOLOGY TAIWAN CO., LTD.

On April 4, 2014, DPTT merged into PSMC, the Company’s IC manufacturing subsidiary located in Taiwan, to form PDMC. Throughout this report the merger of DPTT into PSMC is referred to as the “DPTT Acquisition.” In connection with the DPTT Acquisition, the Company transferred consideration with a fair value of $98.3 million. The Company owns 50.01 percent of PDMC and includes its financial results in its consolidated financial statements, while DNP owns the remaining 49.99 percent of PDMC. The Company also has the ability to appoint the majority of the directors of PDMC, including the chairman of its board of directors, select its management responsible for implementing its policies and procedures, and establish its operating and capital decisions and policies. Photronics determined it has control of PDMC by virtue of its tie-breaking voting rights within PDMC’s Board of Directors, thereby giving it the power to direct the activities of PDMC that most significantly impact its economic performance, including its decision making authority in the ordinary course of business. The DPTT Acquisition was the result of the Company’s desire to combine the strengths in logic and memory photomask technologies of PSMC and DPTT in order to enhance its capability with customers in the region.

The DPTT Acquisition met the conditions of a business combination as defined by Accounting Standards Codification (“ASC”) 805 and, as such, is accounted for under ASC 805 using the acquisition method of accounting. ASC 805 defines the three elements of a business as Input, Process and Output. As a result of the DPTT Acquisition, Photronics acquired the machinery and equipment utilized in the processes to manufacture product, the building that houses the entire operation and the processes needed to manufacture the product, all previously owned by DPTT. The former DPTT employees hired by Photronics in connection with the acquisition brought with them the skills, experience and know-how necessary to provide the operational processes that, when applied to the acquired assets, represent processes being applied to inputs to create outputs. Having met all three elements of a business as defined in ASC 805, the Company determined that the DPTT Acquisition should be accounted for as a business combination.

8

The following table summarizes the provisional fair values of assets acquired and liabilities assumed of DPTT, the fair value of the noncontrolling interests and consideration for DPTT at the acquisition date. These provisional amounts could change as a result of the ultimate realization of the acquired net working capital.

Cash and cash equivalents	$	4,508
Accounts receivable (gross amount of $28,560, of which $500 is estimated    to be uncollectable)		28,060
Inventory		1,279
Deferred tax asset		9,787
Other current assets		11,517
Property, plant and equipment		95,431
Identifiable intangible assets		1,552
Other long-term assets		1,328
Accounts payable and accrued expenses		(32,410	)
Deferred tax liability		(3,042	)
Other long-term liabilities		(3,291	)
Total net assets acquired		114,719
Noncontrolling interests retained by DNP		57,348
		57,371
Consideration – 49.99% of fair value of PSMC		40,999
Gain on acquisition	$	16,372

In addition to recording the fair values of the net assets acquired, the Company also recorded a gain on acquisition of $16.4 million in the three month period ended May 4, 2014, in accordance with ASC 805 using the acquisition method of accounting. The gain on acquisition was primarily due to the difference between the market values of the acquired real estate and personal property exceeding the fair value of the consideration transferred. In addition, a deferred tax liability of $3.0 million was recorded in the opening balance sheet, which had the effect of reducing the gain on acquisition to $16.4 million. Prior to recording the gain, the Company reassessed whether it had correctly identified all of the assets acquired and all of the liabilities assumed. Additionally, the Company also reviewed the procedures used to measure the amounts of the identifiable assets acquired, liabilities assumed and consideration transferred.

The fair value of the first component of consideration represents 49.99 percent of the fair value of PSMC, and is based on recent prices paid by the Company to acquire outstanding shares of PSMC (prior to the acquisition). As a result of the merger, the Company acquired the net assets of DPTT having a fair value of $114.7 million, less noncontrolling interests of $57.3 million retained by DNP, and transferred consideration with a fair value of $41.0 million, resulting in a gain of $16.4 million. The fair value of the total consideration transferred as of the acquisition date was $98.3 million, comprised of the 49.99% noncontrolling interest in DPTT of $57.3 million, and 49.99% of the fair value of PSMC of $41.0 million (112.9 million shares, or 49.99% of the outstanding Common Stock of PSMC).

We estimated the $114.7 million fair value of DPTT as of the acquisition date by applying an income approach as our valuation technique. Our income approach followed a discounted cash flow method, which applied our best estimates of future cash flows and an estimated terminal value discounted to present value at a rate of return taking into account the relative risk of the cash flows. To confirm the reasonableness of the value derived from the income approach, we also analyzed the values of comparable companies which are publicly traded. The acquisition date fair value of the property, plant and equipment of DPTT was $95.4 million, which was determined by utilizing the cost and, to a lesser extent, the market approach, based on an in-use premise of value. Inputs utilized by the Company to determine fair values of DPTT’s property, plant and equipment included a cost approach, which was adjusted for depreciation and condition for equipment, and adjusted for depreciation and local market conditions for real property. The noncontrolling interest of DPTT was calculated using the 49.99% of its total fair value of $114.7 million. The Company also used a market approach to corroborate the enterprise value of DPTT. This fair value measurement is based on significant inputs that are not observable in the market and thus represents a fair value measurement categorized within Level 3 of the fair value hierarchy. Key assumptions include local and current construction replacement cost multipliers, amounts of ancillary replacement costs, physical deterioration, and economic and functional obsolescence to adjust the current replacement costs by, as well as the estimated economic lives of the assets.

9

Identifiable intangible assets acquired were primarily customer relationships, which represent the fair value of relationships and agreements DPTT had in place at the date of the merger. The customer relationships had a fair value of $1.5 million at the acquisition date, determined by using the multi-period excess earnings method, and are amortized over a twelve year estimated useful life. The acquisition date fair value of the remainder of the identifiable assets acquired and liabilities assumed were equivalent to, or did not materially differ from, their carrying values

Acquisition costs related to the merger were $0.4 million for the three month period ended February 2, 2014 and are included in selling, general and administrative expense in the condensed consolidated statements of income.

NOTE 3 - CHANGES IN EQUITY

The following tables set forth the Company's consolidated changes in equity for the three months ended February 1, 2015 and February 2, 2014:

	Three Months Ended February 1, 2015
	Photronics, Inc. Shareholders
	Common Stock
	Shares		Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income			Non- conrolling Interests			Total Equity
Balance at November 2, 2014		65,930	$	659	$	520,182	$	85,435	$	21,774		$	111,444		$	739,494
Net income		-		-		-		3,837		-			3,305			7,142
Other comprehensive loss		-		-		-		-		(16,179	)		(3,863	)		(20,042
Sale of common stock through employee stock option and purchase plans		166		2		526		-		-			-			528
Restricted stock awards vesting and expense		113		1		272		-		-			-			273
Share-based compensation expense		-		-		600		-		-			50			650
Balance at February 1, 2015		66,209	$	662	$	521,580	$	89,272	$	5,595		$	110,936		$	728,045

	Three Months Ended February 2, 2014
	Photronics, Inc. Shareholders
	Common Stock
	Shares		Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income			Non- conrolling Interests			Total Equity
Balance at November 3, 2013		61,083	$	611	$	498,861	$	59,439	$	26,403		$	2,517		$	587,831
Net income		-		-		-		1,993		-			48			2,041
Other comprehensive loss		-		-		-		-		(8,412	)		(80	)		(8,492	)
Sale of common stock through employee stock option and purchase plans		130		1		408		-		-			-			409
Restricted stock awards vesting and expense		112		1		208		-		-			-			209
Share-based compensation expense		-		-		896		-		-			-			896
Redemption of common stock by subsidiary		-		-		36		-		(11	)		(1,715	)		(1,690	)
Balance at February 2, 2014		61,325	$	613	$	500,409	$	61,432	$	17,980		$	770		$	581,204

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NOTE 4 - PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following:

	February 1, 2015		November 2, 2014
Land	$	8,344	$	8,598
Buildings and improvements		122,839		124,787
Machinery and equipment		1,353,457		1,367,691
Leasehold improvements		19,476		20,165
Furniture, fixtures and office equipment		12,784		12,086
Construction in progress		131,225		81,351
		1,648,125		1,614,678
Less accumulated depreciation and amortization		1,055,105		1,064,609
	$	593,020	$	550,069

Equipment under capital leases are included in above property, plant and equipment as follows:

	February 1, 2015		November 2, 2014
Machinery and equipment	$	56,245	$	56,245
Less accumulated amortization		11,836		10,430
	$	44,409	$	45,815

Depreciation and amortization expense for property, plant and equipment was $19.2 million and $16.0 million for the three month periods ended February 1, 2015 and February 2, 2014, respectively.

NOTE 5 - JOINT VENTURE, TECHNOLOGY LICENSE AND OTHER AGREEMENTS WITH MICRON TECHNOLOGY, INC.

In May 2006, Photronics and Micron Technology, Inc. ("Micron") entered into the MP Mask joint venture (“MP Mask”), which develops and produces photomasks for leading-edge and advanced next generation semiconductors. At the time of the formation of the joint venture, the Company also entered into both an agreement to license photomask technology developed by Micron and certain supply agreements.

This joint venture is a variable interest entity ("VIE") (as that term is defined in the ASC) because all costs of the joint venture are passed on to the Company and Micron through purchase agreements they have entered into with the joint venture, and it is dependent upon the Company and Micron for any additional cash requirements. On a quarterly basis the Company reassesses whether its interest in MP Mask gives it a controlling financial interest in this VIE. The purpose of this quarterly reassessment is to identify the primary beneficiary (which is defined in the ASC as the entity that consolidates a VIE) of the VIE. As a result of the reassessment in the current quarter, the Company determined that Micron is still the primary beneficiary of the VIE, by virtue of its tie-breaking voting rights within MP Mask’s Board of Managers, thereby giving it the power to direct the activities of MP Mask that most significantly impact its economic performance, including its decision making authority in the ordinary course of business and its purchasing the majority of products produced by the VIE.

The Company has utilized MP Mask for both high-end IC photomask production and research and development purposes. MP Mask charges its variable interest holders based on their actual usage of its facility. MP Mask separately charges for any research and development activities it engages in at the requests of its owners. The Company recorded cost of sales of $1.3 million and $1.0 million during the three month periods ended February 1, 2015 and February 2, 2014, respectively, and research and development expenses of $0.2 million during the three month periodsended February 1, 2015 and February 2, 2014. As of February 1, 2015 and November 2, 2014, the Company owed MP Mask $4.1 million and $4.2 million, respectively, and had a receivable from Micron of $7.6 million and $6.8 million, respectively, both primarily related to the aforementioned supply agreements.

11

MP Mask is governed by a Board of Managers, appointed by Micron and the Company. Since MP Mask's inception, Micron, as a result of its majority ownership, has held majority voting power on the Board of Managers. The voting power held by each party is subject to change as ownership interests change. Under the MP Mask joint venture operating agreement, the Company may be required to make additional capital contributions to MP Mask up to the maximum amount defined in the operating agreement. However, should the Board of Managers determine that further additional funding is required, MP Mask shall pursue its own financing. If MP Mask is unable to obtain its own financing, it may request additional capital contributions from the Company. Should the Company choose not to make a requested contribution to MP Mask, its ownership percentage may be reduced.

The Company's investment in the VIE, which represents its maximum exposure to loss, was $93.1 million at February 1, 2015 and November 2, 2014. This amount is reported in the Company's condensed consolidated balance sheets as "Investment in joint venture". The Company recorded no income or loss from its investment in the three month periods ended February 1, 2015 and February 2, 2014. Income or loss from the VIE is included in "Interest and other income (expense), net" in the condensed consolidated statements of income.

NOTE 6 - LONG-TERM BORROWINGS

Long-term borrowings consist of the following:

	February 1, 2015		November 2, 2014
3.25% convertible senior notes due in April 2016	$	57,500	$	115,000
3.25% convertible senior notes due in April 2019		57,500		-
2.77% capital lease obligation payable through July 2018		19,211		20,481
3.09% capital lease obligation payable through March 2016		5,608		6,705
		139,819		142,186
Less current portion		10,457		10,381
	$	129,362	$	131,805

In January 2015 the Company privately exchanged $57.5 million in aggregate principal amount of its 3.25% convertible senior notes with a maturity date of April 1, 2016, for new 3.25% convertible senior notes with an aggregate principal amount of $57.5 million with a maturity date of April 1, 2019. The conversion rate of the new notes is the same as that of the exchanged notes, which were issued in March 2011 with a conversion rate of approximately 96 shares of common stock per $1,000 note principal, equivalent to a conversion price of $10.37 per share of common stock, and is subject to adjustment upon the occurrence of certain events, which are described in the indenture dated January 22, 2015.  Note holders may convert each $1,000 principal amount of notes at any time prior to the close of business on the second scheduled trading day immediately preceding April 1, 2019, and the Company is not required to redeem the notes prior to their maturity date. Interest on the notes accrues in arrears, and is paid semiannually through the notes’ maturity date.

The Company’s credit facility, which was last amended in August 2014, expires in December 2018, has a $50 million limit with an expansion capacity to $75 million, and is secured by substantially all of the Company’s assets located in the United States and common stock the Company owns in certain of its foreign subsidiaries. The credit facility is subject to a minimum interest coverage ratio, total leverage ratio and minimum unrestricted cash balance financial covenants, all of which the Company was in compliance with at February 1, 2015. The Company had no outstanding borrowings against the credit facility at February 1, 2015, and $50 million was available for borrowing. The interest rate on the credit facility (1.69% at February 1, 2015) is based on the Company’s total leverage ratio at LIBOR plus a spread, as defined in the credit facility.

In August 2013 a $26.4 million principal amount, five year capital lease commenced to fund the purchase of a high-end lithography tool. Payments under the capital lease, which bears interest at 2.77%, are $0.5 million per month through July 2018.  Under the terms of the lease agreement, the Company must maintain the equipment in good working order, and is subject to a cross default with cross acceleration provision related to certain nonfinancial covenants incorporated in its credit facility. As of February 1, 2015, the total amount payable through the end of the lease term was $20.2 million, of which $19.2 million represented principal and $1.0 million represented interest.

In April 2011 the Company entered into a five year, $21.2 million capital lease for manufacturing equipment. Payments under the lease, which bears interest at 3.09%, are $0.4 million per month through March 2016. The lease agreement provides that the Company must maintain the equipment in good working order, and includes a cross default with cross acceleration provision related to certain non-financial covenants incorporated in the Company's credit facility agreement. As of February 1, 2015, the total amount payable through the end of the lease term was $5.7 million, of which $5.6 million represented principal and $0.1 million represented interest.

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NOTE 7 - SHARE-BASED COMPENSATION

The Company has a share-based compensation plan ("Plan"), under which options, restricted stock, restricted stock units, stock appreciation rights, performance stock, performance units, and other awards based on, or related to, shares of the Company's common stock may be granted from shares authorized but unissued or shares previously issued and reacquired by the Company. The maximum number of shares of common stock approved by the Company’s shareholders to be issued under the Plan was increased from six million to nine million shares during fiscal 2014. Awards may be granted to officers, employees, directors, consultants, advisors, and independent contractors of the Company or its subsidiaries. In the event of a change in control (as defined in the Plan), the vesting of awards may be accelerated. The Plan, aspects of which are more fully described below, prohibits further awards from being issued under prior plans. The Company incurred total share-based compensation expenses of $0.9 million and $1.1 million for the three month periods ended February 1, 2015 and February 2, 2014, respectively. No share-based compensation cost was capitalized as part of an asset and no related income tax benefits were recorded during the fiscal years presented.

Stock Options

Option awards generally vest in one to four years, and have a ten-year contractual term. All incentive and non-qualified stock option grants have an exercise price no less than the market value of the underlying common stock on the date of grant. The grant date fair values of options are based on closing prices of the Company’s common stock on the dates of grant using the Black-Scholes option pricing model. Expected volatility is based on the historical volatility of the Company's stock. The Company uses historical option exercise behavior and employee termination data to estimate expected term, which represents the period of time that the options granted are expected to remain outstanding. The risk-free rate of return for the estimated term of the option is based on the U.S. Treasury yield curve in effect at the date of grant.

The weighted-average inputs and risk-free rate of return ranges used to calculate the grant date fair value of options issued during the three month periods ended February 1, 2015 and February 2, 2014, are presented in the following table.

	Three Months Ended
	February 1, 2015			February 2, 2014
Volatility		55.1	%		61.1	%
Risk free rate of return		1.6	%		1.4	%
Dividend yield		0.0	%		0.0	%
Expected term	4.7 years			4.6 years

Information on outstanding and exercisable option awards as of February 1, 2015, is presented below.

Options	Shares		WeightedAverageExercise Price		WeightedAverageRemainingContractual Life	AggregateIntrinsic Value
Outstanding at February 1, 2015		3,821,006	$	7.14	6.3 years	$	8,298
Exercisable at February 1, 2015		2,527,303	$	6.90	5.2 years	$	7,053

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There were 302,000 share options granted during the three month period ended February 1, 2015, with a weighted-average grant date fair value of $3.88 per share, and there were 612,500 share options granted during the three month period ended February 2, 2014, with a weighted-average grant date fair value of $4.45 per share. As of February 1, 2015, the total unrecognized compensation cost related to unvested option awards was approximately $4.4 million. That cost is expected to be recognized over a weighted-average amortization period of 2.5 years.

Restricted Stock

The Company periodically grants restricted stock awards. The restrictions on these awards typically lapse over a service period of one to four years. There were 111,334 restricted stock awards issued during the three month period ended February 1, 2015, with a weighted-average grant date fair value of $8.23 per share, and there were 111,667 restricted stock awards issued during the three month period ended February 2, 2014, with a weighted-average grant date fair value of $8.86 per share. As of February 1, 2015, the total compensation cost not yet recognized related to unvested restricted stock awards was approximately $1.5 million. That cost is expected to be recognized over a weighted-average amortization period of 2.2 years. As of February 1, 2015, there were 234,026 shares of restricted stock outstanding.

NOTE 8 - INCOME TAXES

The effective tax rate differs from the U.S. statutory rate of 35% in the three month periods ended February 1, 2015 and February 2, 2014, primarily due to earnings being taxed at lower statutory rates in foreign jurisdictions, combined with the benefit of various investment credits in a foreign jurisdiction. Valuation allowances in jurisdictions with historic losses eliminate the effective rate impact of these jurisdictions.

Unrecognized tax benefits related to uncertain tax positions were $5.2 million at February 1, 2015 and $5.1 million at November 2, 2014, of which $5.1 million and $5.0 million, respectively, would favorably impact the Company's effective tax rate if recognized. Accrued interest and penalties related to unrecognized tax benefits was $0.1 million at February 1, 2015 and November 2, 2014. As of February 1, 2015, the total amount of unrecognized tax benefits is not expected to significantly increase or decrease in the next twelve months.

PKLT, the Company's FPD manufacturing facility in Taiwan, has been accorded a tax holiday, which started in 2012 and expires in 2017. The PKLT tax holiday had no dollar or per share effect in the three month periods ended February 1, 2015 and February 2, 2014.  PDMC, as a result of the DPTT Acquisition, acquired an IC manufacturing facility in Taiwan that has been accorded a tax holiday which commenced in 2015 and expires in 2019. The Company realized a $0.1 million tax benefit from this tax holiday during the three month period ended February 1, 2015. The tax holiday had no per share effect in the three month periods ended February 1, 2015 and February 2, 2014.

NOTE 9 - EARNINGS PER SHARE

The calculation of basic and diluted earnings per share is presented below.

	Three Months Ended
	February 1, 2015		February 2, 2014
Net income attributable to Photronics, Inc. shareholders	$	3,837	$	1,993
Effect of dilutive securities		-		-
Earnings for diluted earnings per share	$	3,837	$	1,993
Weighted-average common shares computations:
Weighted-average common shares used for basic earnings per share		66,066		61,200
Effect of dilutive securities:
Share-based payment awards		954		936
Potentially dilutive common shares		954		936
Weighted-average common shares used for diluted earnings per share		67,020		62,136
Basic earnings per share	$	0.06	$	0.03
Diluted earnings per share	$	0.06	$	0.03

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The table below shows the outstanding weighted-average share-based payment awards that were excluded from the calculation of diluted earnings per share because their exercise price exceeded the average market value of the common shares for the period or, under application of the treasury stock method, they were otherwise determined to be anti-dilutive. The table also shows convertible notes that, if converted, would have been anti-dilutive.

	Three Months Ended
	February 1, 2015		February 2, 2014
Convertible notes		11,085		15,423
Share-based payment awards		1,587		2,158
Total potentially dilutive shares excluded		12,672		17,581

In the second quarter of fiscal year 2015, the Company awarded approximately 0.3 million share-based payment awards to its employees.

NOTE 10 - CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT

The following tables set forth thechanges in the Company's accumulated other comprehensive income by component (net of tax of $0)for the three month periods ended February 1, 2015 and February 2, 2014:

	Three Months Ended February 1, 2015
	Foreign Currency Translation Adjustments			Amortization of Cash Flow Hedge			Other			Total
Balance at November 2, 2014	$	22,651		$	(434	)	$	(443	)	$	21,774
Other comprehensive income (loss) before reclassifications		(20,106	)		-			32			(20,074	)
Amounts reclassified from other comprehensive income		-			32			-			32
Net current period other comprehensive income (loss)		(20,106	)		32			32			(20,042	)
Less: other comprehensive (income) loss attributable to noncontrolling interests		3,879			-			(16	)		3,863
Balance at February 1, 2015	$	6,424		$	(402	)	$	(427	)	$	5,595

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	Three Months Ended February 2, 2014
	Foreign Currency Translation Adjustments			Amortization of Cash Flow Hedge			Other			Total
Balance at November 3, 2013	$	27,797		$	(562	)	$	(832	)	$	26,403
Other comprehensive income (loss) before reclassifications		(8,551	)		-			27			(8,524	)
Amounts reclassified from other comprehensive income		-			32			-			32
Net current period other comprehensive income (loss)		(8,551	)		32			27			(8,492	)
Less: other comprehensive loss attributable to noncontrolling interests		80			-			-			80
Redemption of common stock of subsidiary		-			-			(11	)		(11	)
Balance at February 2, 2014	$	19,326		$	(530	)	$	(816	)	$	17,980

NOTE 11 - FAIR VALUE MEASUREMENTS

The accounting framework for determining fair value includes a hierarchy for ranking the quality and reliability of the information used to measure fair value, which enables the reader of the financial statements to assess the inputs used to develop those measurements. The fair value hierarchy consists of three tiers as follows: Level 1, defined as quoted market prices in active markets for identical securities; Level 2, defined as inputs other than Level 1 that are observable, either directly or indirectly; and Level 3, defined as unobservable inputs that are not corroborated by market data.

The Company did not have any assets or liabilities measured at fair value, on a recurring or a nonrecurring basis, at February 1, 2015 or November 2, 2014.

Fair Value of Other Financial Instruments

The fair values of the Company's cash and cash equivalents (Level 1 measurements), accounts receivable, accounts payable, and certain other current assets and current liabilities (Level 2 measurements) approximate their carrying value due to their short-term maturities. The fair value of the Company's convertible senior notes is a Level 2 measurement that is determined using recent bid prices. The table below presents the fair and carrying values of the Company's convertible senior notes at February 1, 2015 and November 2, 2014.

	February 1, 2015				November 2, 2014
	Fair Value		Carrying Value		Fair Value		Carrying Value
3.25% convertible senior notes due 2016	$	59,978	$	57,500	$	122,544	$	115,000
3.25% convertible senior notes due 2019	$	60,479	$	57,500	$	-	$	-

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NOTE 12 - SUBSIDIARY SHARE REPURCHASE

In January 2014 the Company increased its ownership percentage in PSMC (in 2014 PSMC’s name was changed to PDMC, see Note 2) from 98.63% to 100% at a cost of $1.7 million for the then remaining 3.0 million shares that were not owned by the Company.

The table below presents the effect of the change in the Company's ownership interest in PDMC on the Company's equity for the three month period ended February 2, 2014.

	Three Months Ended
	February 2, 2014
Net income attributable to Photronics, Inc. shareholders	$	1,993
Increase in Photronics, Inc.'s additional paid-in capital		36
Decrease in Photronics, Inc. shareholders’ accumulated other comprehensive income		(11	)
Change from net income attributable to Photronics, Inc. shareholders and transfer from noncontrolling interest	$	2,018

NOTE 13 - COMMITMENTS AND CONTINGENCIES

As of February 1, 2015, the Company had commitments outstanding for capital equipment expenditures of approximately $16 million.

The Company is subject to various claims that arise in the ordinary course of business. The Company believes such claims, individually or in the aggregate, will not have a material effect on its condensed consolidated financial statements.

NOTE 14 - RECENT ACCOUNTING PRONOUNCEMENTS

In May 2014 the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2014-09 – Revenue from Contracts with Customers, which will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of this ASU is that revenue should be recognized for the amount of consideration expected to be received for promised goods or services transferred to customers. This ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments, and assets recognized for costs incurred to obtain or fulfill a contract. This ASU will be effective for the Company in its first quarter of fiscal 2018. Early adoption is not permitted. The ASU allows for either full retrospective or modified retrospective adoption. The Company is evaluating the transition method that will be elected and the potential effects of the adoption of this ASU on its financial statements.

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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

Management's discussion and analysis ("MD&A") of the Company's financial condition, results of operations and outlook should be read in conjunction with its condensed consolidated financial statements and related notes. Various segments of this MD&A contain forward-looking statements, all of which are presented based on current expectations and may be adversely affected by uncertainties and risk factors (presented throughout this filing and in the Company's Annual Report on Form 10-K for the fiscal 2014 year), that may cause actual results to materially differ from these expectations.

The Company sells substantially all of its photomasks to semiconductor designers and manufacturers, and manufacturers of FPDs. Photomask technology is also being applied to the fabrication of other higher performance electronic products such as photonics, micro-electronic mechanical systems and certain nanotechnology applications. Thus, the Company's selling cycle is tightly interwoven with the development and release of new semiconductor designs and flat panel applications, particularly as it relates to the semiconductor industry's migration to more advanced design methodologies and fabrication processes. The Company believes that the demand for photomasks primarily depends on design activity rather than sales volumes from products manufactured using photomask technologies. Consequently, an increase in semiconductor or FPD sales does not necessarily result in a corresponding increase in photomask sales. However, the reduced use of customized ICs, reductions in design complexity, other changes in the technology or methods of manufacturing or designing semiconductors, or a slowdown in the introduction of new semiconductor or FPD designs could reduce demand for photomasks even if demand for semiconductors and FPDs increases. Advances in semiconductor, FPD and photomask design and semiconductor and FPD production methods could also reduce the demand for photomasks. Historically, the semiconductor industry has been volatile, with sharp periodic downturns and slowdowns. These downturns have been characterized by, among other things, diminished product demand, excess production capacity and accelerated erosion of selling prices.

The global semiconductor industry, including mobile displays, is driven by end markets which have been closely tied to consumer driven applications of high performance semiconductor devices including, but not limited to, mobile communications and computing solutions. The Company is typically required to fulfill its customer orders within a short period of time, sometimes within 24 hours. This results in the Company having a minimal level of backlog orders, typically one to two weeks for IC photomasks and two to three weeks for FPD photomasks. The Company cannot predict the timing of the industry's transition to volume production of next generation technology nodes or the timing of up and down cycles with precise accuracy, but believes that such transitions and cycles will continue into the future, beneficially and adversely affecting its business, financial condition and operating results as they occur. The Company believes its ability to remain successful in these environments is dependent upon achieving its goals of being a service and technology leader and efficient solutions supplier, which it believes should enable it to continually reinvest in its global infrastructure.

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Material Changes in Results of Operations

Three Months ended February 1, 2015 and February 2, 2014

The following table represents selected operating information expressed as a percentage of net sales.

	Three Months Ended
	February 1, 2015			February 2, 2014
Net sales		100.0	%		100.0	%
Cost of sales		(77.2	)		(77.5	)
Gross margin		22.8			22.5
Selling, general and administrative expenses		(9.6	)		(12.1	)
Research and development expenses		(3.8	)		(4.9	)
Operating income		9.4			5.5
Other income (expense), net		(1.1	)		(0.8	)
Income before income tax provision		8.3			4.7
Income tax provision		(2.5	)		(2.7	)
Net income		5.8			2.0
Net income attributable to noncontrolling interests		(2.7	)		-
Net income attributable to Photronics, Inc. shareholders		3.1	%		2.0	%

Note: All of the following tabular comparisons, unless otherwise indicated, are for the three months ended February 1, 2015 (Q1-15) and February 2, 2014 (Q1-14) in millions of dollars.

Net Sales

	Three Months Ended
	Q1-15		Q1-14		PercentChange
IC	$	101.5	$	76.2		33.1	%
FPD		22.0		25.3		(13.0	)%
Total net sales	$	123.5	$	101.5		21.6	%

Net sales for Q1-15 increased 21.6% to $123.5 million as compared to $101.5 million for Q1-14. The increase was primarily the result of increased high-end IC sales in Taiwan, which was partially offset by lower mainstream FPD sales. Revenues attributable to high-end products increased by $19.5 million to $51.7 million in Q1-15 as compared to $32.2 million in Q1-14. High-end photomask applications, which typically have higher ASPs, include mask sets for 45 nanometer and below for IC products, and G8 and above and active matrix organic light-emitting diode (AMOLED) display screen technologies for FPD products. By geographic area, net sales in Q1-15 as compared to Q1-14 increased (decreased)by $22.6 million or 77.5 % to $51.8 million in Taiwan,  $(1.2) million or 3.3 % to $35.6 million in Korea, $1.9 million or 7.4% to $27.0 million in the United States and $(1.3) million or 13.6% to $8.5 million in Europe.

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Gross Margin

	Three Months Ended
	Q1-15			Q1-14			PercentChange
Gross margin	$	28.2		$	22.9			23.2	%
Percentage of net sales		22.8	%		22.5	%

Gross margin percentage increased to 22.8% in Q1-15 as compared to 22.5% in Q1-14. This increase was primarily due to the favorable impact of increased high-end revenue. The Company operates in a high fixed cost environment and, to the extent that the Company's revenues and utilization increase or decrease, gross margin will generally be positively or negatively impacted.

Selling, General and Administrative Expenses

	Three Months Ended
	Q1-15			Q1-14			Percent Change
S,G&A expenses	$	11.9		$	12.3			(2.7	)%
Percentage of net sales		9.6	%		12.1	%

Selling, general and administrative expenses decreased $0.4 million to $11.9 million in Q1-15 as compared to $12.3 million in Q1-14. This decrease was primarily due to transaction expenses incurred in Q1-14 related to the acquisition of DPTT.

Research and Development

		Three Months Ended
		Q1-15			Q1-14		Percent Change
R&D expenses	$	4.7		$	5.0			(5.9	)%
Percentage of net sales		3.8	%		4.9	%

Research and development expenses consist primarily of global development efforts related to high-end process technologies for advanced sub-wavelength reticle solutions for IC technologies. Research and development expenses decreased $0.3 million in Q1-15, as compared to Q1-14, primarily due to decreased activities at advanced nanometer technology nodes for IC photomasks.

Other Income (Expense), net

	Three Months Ended
	Q1-15			Q1-14
Interest expense	$	(1.4	)	$	(2.0	)
Interest and other income (expense), net		0.1			1.1
Other income (expense), net	$	(1.3	)	$	(0.9	)

Interest expense decreased in Q1-15 as compared to Q1-14, due to less outstanding debt as a result of the conversion of $22.1 million of 5.50% convertible senior notes to the Company’s common stock in Q4-14. Interest and other income (expense), net decreased in Q1-15 as compared to Q1-14 primarily as a result of financing expenses related to the Company’s exchange of convertible debt in Q1-15.

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Provision for Income Taxes

	Three Months Ended
	Q1-15			Q1-14
Income tax provision	$	3.1		$	2.7
Effective income tax rate		30.5	%		57.1	%

The Company’s effective income tax rate is sensitive to the jurisdictional mix of earnings, due in part to the non-recognition of tax benefits on losses in jurisdictions with valuation allowances. The effective income tax rate decreased in Q1-15, as compared with Q1-14, which was primarily attributable to a lower percentage of income before income taxes generated in jurisdictions where the Company incurs losses without the recognition of tax benefits due to valuation allowances.

Net Income Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests was $3.3 million in Q1-15 as compared to a minor amount in Q1-14, primarily as a result of changes in the ownership structure of the Company’s IC manufacturing facility located in Taiwan. During the three month period ended May 4, 2014, the Company exchanged a 49.99% noncontrolling interest in this subsidiary in return for the net assets of an acquiree. See Notes 2 and 12 of the condensed consolidated financial statements for further information.

Liquidity and Capital Resources

The Company's working capital was $143.6 million at February 1, 2015, and $197.4 million at November 2, 2014. The decrease in working capital was primarily related to planned capital equipment purchases. Cash and cash equivalents were $168.6 million at February 1, 2015 and $192.9 million at November 2, 2014. Net cash provided by operating activities was $22.3 million for the three months ended February 1, 2015, as compared to $14.2 million for the three month period ended February 2, 2014, the increase primarily due to increased net income and larger increases in accounts payable and other current liabilities, which were partially offset by increased accounts receivable related to increased revenue. Net cash used in investing activities for the three months ended February 1, 2015, was $40.3 million, which was comprised primarily of capital expenditure payments. Net cash used in financing activities of $1.6 million for the three months ended February 1, 2015, was primarily comprised of repayments of long-term borrowings. The Company may use its cash available on hand for operations, capital expenditures, debt repayments, strategic opportunities, stock repurchases or other corporate uses, any of which may be material.

As of February 1, 2015 and November 2, 2014, the Company’s total cash and cash equivalents include $89.9 million and $105.9 million, respectively, held by its foreign subsidiaries. A repatriation of these funds to the U.S., in certain jurisdictions, may be subject to U.S. federal income taxes and local country withholding tax. The majority of earnings of the Company’s foreign subsidiaries are considered to be indefinitely reinvested. The Company’s foreign subsidiaries continue to grow through the reinvestment of earnings in additional manufacturing capacity and capability, particularly in the high-end IC and FPD areas.

In January 2015 the Company privately exchanged $57.5 million in aggregate principal amount of its 3.25% convertible senior notes with a maturity date of April 1, 2016, for new 3.25% convertible senior notes with an aggregate principal amount of $57.5 million with a maturity date of April 1, 2019. The conversion rate of the new notes is the same as that of the exchanged notes, which were issued in March 2011 with a conversion rate of approximately 96 shares of common stock per $1,000 note principal, equivalent to a conversion price of $10.37 per share of common stock, and is subject to adjustment upon the occurrence of certain events, which are described in the indenture dated January 22, 2015. Note holders may convert each $1,000 principal amount of notes at any time prior to the close of business on the second scheduled trading day immediately preceding April 1, 2019, and the Company is not required to redeem the notes prior to their maturity date. Interest on the notes accrues in arrears, and is paid semiannually through the notes’ maturity date.

In April 2014 the Company acquired DPTT, which was a non-cash transaction that resulted in the Company owning 50.01% and DNP owning 49.99% of PDMC, whose financial results are included in the Company’s consolidated financial statements. PDMC is expected to generate sufficient cash flows to fund its operating and capital requirements. See Note 2 of the consolidated financial statements for more information.

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The Company’s credit facility, which was last amended in August 2014, expires in December 2018, has a $50 million limit with an expansion capacity to $75 million, and is secured by substantially all of the Company’s assets located in the United States and common stock the Company owns in certain of its foreign subsidiaries. The credit facility is subject to a minimum interest coverage ratio, total leverage ratio and minimum unrestricted cash balance financial covenants, all of which the Company was in compliance with at February 1, 2015. The Company had no outstanding borrowings against the credit facility at February 1, 2015, and $50 million was available for borrowing. The interest rate on the credit facility (1.69% at February 1, 2015) is based on the Company’s total leverage ratio at LIBOR plus a spread, as defined in the credit facility.

In January 2014 the Company acquired all of the 3.0 million shares of PSMC that were then held by noncontrolling interests at a cost of $1.7 million.

As of February 1, 2015, the Company had capital equipment commitments outstanding of approximately $16 million. The Company believes that its currently available resources, together with its capacity for growth, and its access to equity and other financing sources, will be sufficient to satisfy its currently planned capital expenditures, as well as its anticipated working capital requirements for the next twelve months. However, the Company cannot assure that additional sources of financing would be available to the Company on commercially favorable terms should the Company's capital requirements exceed cash available from operations, existing cash, and cash available under its credit facility.

The Company's liquidity is highly dependent on its sales volume, cash conversion cycle, and the timing of its capital expenditures (which can vary significantly from period to period), as it operates in a high fixed cost environment. Depending on conditions in the semiconductor and FPD markets, the Company's cash flows from operations and current holdings of cash may not be adequate to meet its current and long-term needs for capital expenditures, operations and debt repayments. However, the Company believes its cash on hand, cash generated from its operations and cash committed under its credit facility will allow it to fund its operations through at least the next twelve months. Historically, in certain years, the Company has used external financing to fund these needs. Due to conditions in the credit markets, some financing instruments used by the Company in the past may not be currently available to it. The Company continues to evaluate further cost reduction initiatives. However, the Company cannot assure that additional sources of financing would be available to it on commercially favorable terms, should its cash requirements exceed cash available from operations, existing cash, and cash available under its credit facility.

Off-Balance Sheet Arrangements

Under the MP Mask joint venture operating agreement, in order to maintain its 49.99% ownership interest, the Company may be required to make additional capital contributions to the joint venture up to the maximum amount specified in the operating agreement. Cumulatively through February 1, 2015, the Company has contributed $32.5 million to the joint venture, and has received distributions from the joint venture totaling $10.0 million.

Under the PDMC joint venture operating agreement the shareholders of PDMC may be requested to make additional contributions to PDMC. In the event that PDMC requests additional capital from its shareholders, the Company may be required to make additional capital contributions to the joint venture in order to maintain its 50.01% ownership. The PDMC operating agreement limits the amount of contributions that may be requested during both PDMC’s first four years and during any individual year within those first four years.

The Company leases certain office facilities and equipment under operating leases that may require it to pay taxes, insurance and maintenance expenses related to the properties. Certain of these leases contain renewal or purchase options exercisable at the end of the lease terms.

Business Outlook

A majority of the Company's revenue growth is expected to continue to come from the Asian region, as customers increase their use of manufacturing foundries located outside of North America and Europe. Additional revenue growth is also anticipated in North America, as the Company expects to continue to benefit from advanced technology it may utilize under its technology license with Micron.

The Company continues to assess its global manufacturing strategy and monitor its market capitalization, sales volume and related cash flows from operations. This ongoing assessment could result in future facility closures, asset redeployments, additional impairments of intangible or long-lived assets, workforce reductions, or the addition of increased manufacturing facilities, all of which would be based on market conditions and customer requirements.

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Effect of Recent Accounting Pronouncements

In May 2014 the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2014-09 – Revenue from Contracts with Customers, which will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of this ASU is that revenue should be recognized for the amount of consideration expected to be received for promised goods or services transferred to customers. This ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments, and assets recognized for costs incurred to obtain or fulfill a contract. This ASU will be effective for the Company in its first quarter of fiscal 2018. Early adoption is not permitted. The ASU allows for either full retrospective or modified retrospective adoption. The Company is evaluating the transition method that will be elected and the potential effects of the adoption of this ASU on its financial statements.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency Exchange Rate Risk

The Company conducts business in several major international currencies through its worldwide operations and its financial performance may be affected by fluctuations in the exchange rates of these currencies. Changes in exchange rates can positively or negatively affect the Company's sales, operating margins, assets, liabilities, and equity. The functional currencies of the Company's Asian subsidiaries are the Korean won, the New Taiwan dollar, and the Singapore dollar. The functional currencies of the Company's European subsidiaries are the British pound and the euro.

The Company attempts to minimize its risk of foreign currency transaction losses by producing its products in the same country in which the products are sold (thereby generating revenues and incurring expenses in the same currency), and by managing its working capital. However, in some instances, the Company sells products in a currency other than the functional currency of the country where it was produced or purchases products in a currency that differs from the functional currency of the purchasing manufacturing facility. There can be no assurance that this approach will continue to be successful, especially in the event of a significant adverse movement in the value of any foreign currency against the U.S. dollar.

The Company's primary net foreign currency exposures as of February 1, 2015, included the Korean won, the Japanese yen, the New Taiwan dollar, the Singapore dollar, the British pound, and the euro. As of February 1, 2015, a 10% adverse movement in the value of these currencies against the U.S. dollar would have resulted in a net unrealized pre-tax loss of $3.1 million. The Company does not believe that a 10% change in the exchange rates of other non-U.S. dollar currencies would have a material effect on its consolidated financial position, results of operations, or cash flows.

Interest Rate Risk

At February 1, 2015, the Company did not have any variable rate borrowings. A 10% change in interest rates would not have had a material effect on the Company’s consolidated financial position, results of operations, or cash flows in the three month period ended February 1, 2015.

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company has established and currently maintains disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), designed to ensure that information required to be disclosed in its reports filed under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to management, including the Company's chief executive officer and chief financial officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

The Company's management, under the supervision and with the participation of the Company’s chief executive officer and chief financial officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation the Company’s chief executive officer and chief financial officer concluded that the Company’s disclosure controls and procedures were effective at a reasonable assurance level as of the end of the period covered by this report.

23

Changes in Internal Control over Financial Reporting

There was no change in the Company's internal control over financial reporting during the Company's first quarter of fiscal 2015 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II.   OTHER INFORMATION

Item 1A.   RISK FACTORS

There have been no material changes to risks relating to the Company's business as disclosed in Part 1, Item 1A of the Company's Form 10-K for the year ended November 2, 2014.

24

Item 6.	EXHIBITS
	(a)	Exhibits
		Exhibit Number	Description
		31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
		31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
		32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
		32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
		101.INS	XBRL Instance Document
		101.SCH	XBRL Taxonomy Extension Schema Document
		101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
		101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
		101.LAB	XBRL Taxonomy Extension Label Linkbase Document
		101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Photronics, Inc.
	(Registrant)
By:	/s/ SEAN T. SMITH
	Sean T. Smith
	Senior Vice President
	Chief Financial Officer
	(Duly Authorized Officer and
	Principal Financial Officer)

Date:  March 5, 2015

25

EX-31.1

EXHIBIT 31.1

I, Constantine S. Macricostas, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Photronics, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/  CONSTANTINE S. MACRICOSTAS

Constantine S. Macricostas

Chief Executive Officer

March 5, 2015

EX-31.2

EXHIBIT 31.2

I, Sean T. Smith, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Photronics, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/  SEAN T. SMITH

Sean T. Smith

Chief Financial Officer

March 5, 2015

EX-32.1

EXHIBIT 32.1

Section 1350 Certification of the Chief Executive Officer

I, Constantine S. Macricostas, Chief Executive Officer of Photronics, Inc. (the "Company"), certify, to my knowledge, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1) The Quarterly Report on Form 10-Q of the Company for the quarter ended February 1, 2015, (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

The foregoing certification is being furnished pursuant to 18 U.S.C. § 1350 and will not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

/s/  CONSTANTINE S. MACRICOSTAS

Constantine S. Macricostas

Chief Executive Officer

March 5, 2015

EX-32.2

EXHIBIT 32.2

Section 1350 Certification of the Chief Financial Officer

I, Sean T. Smith, Chief Financial Officer of Photronics, Inc. (the "Company"), certify, to my knowledge, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1) The Quarterly Report on Form 10-Q of the Company for the quarter ended February 1, 2015, (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

The foregoing certification is being furnished pursuant to 18 U.S.C. § 1350 and will not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

/s/  SEAN T. SMITH

Sean T. Smith

Chief Financial Officer

March 5, 2015

XML

JOINT VENTURE, TECHNOLOGY LICENSE AND OTHER AGREEMENTS WITH MICRON TECHNOLOGY, INC (Details) (USD $)	3 Months Ended
	Feb. 01, 2015	Feb. 02, 2014	Nov. 02, 2014
Related Party Transaction [Line Items]
Variable interest entity, methodology for determining whether entity is primary beneficiary	This joint venture is a variable interest entity ("VIE") (as that term is defined in the Accounting Standards Codification ("ASC")) because all costs of the joint venture are passed on to the Company and Micron through purchase agreements they have entered into with the joint venture, and it is dependent upon the Company and Micron for any additional cash requirements. On a quarterly basis the Company reassesses whether its interest in MP Mask gives it a controlling financial interest in this VIE. The purpose of this quarterly reassessment is to identify the primary beneficiary (which is defined in the ASC as the entity that consolidates a VIE) of the VIE. As a result of the reassessment in the current quarter, the Company determined that Micron is still the primary beneficiary of the VIE, by virtue of its tie-breaking voting rights within MP Mask’s Board of Managers, thereby giving it the power to direct the activities of MP Mask that most significantly impact its economic performance, including its decision making authority in the ordinary course of business and its purchasing the majority of products produced by the VIE.
Cost of sales	$ 95,321,000	$ 78,660,000
Research and development expenses	4,681,000	4,974,000
Amount owed to MP Mask	4,100,000		4,200,000
Amount receivable from Micron Technology, Inc.	99,183,000		94,515,000
Maximum exposure to loss from investment in VIE	93,100,000		93,100,000
Income (loss) from equity-method investee	0	0
Equity Method Investee [Member]
Related Party Transaction [Line Items]
Cost of sales	1,300,000	1,000,000
Research and development expenses	200,000	200,000
Co-venturer [Member]
Related Party Transaction [Line Items]
Amount receivable from Micron Technology, Inc.	$ 7,600,000		$ 6,800,000

XML

SUBSIDIARY SHARE REPURCHASE (Details) (USD $) Share data in Millions, unless otherwise specified	3 Months Ended		1 Months Ended
	Feb. 01, 2015	Feb. 02, 2014	Jan. 31, 2014	Nov. 03, 2013
Effect of the change in the entity's ownership interest in PSMC [Abstract]
Net income attributable to Photronics, Inc. shareholders	$ 3,837,000	$ 1,993,000
Increase (decrease) in Photronics, Inc.'s additional paid-in capital and accumulated other comprehensive income		(11,000)
Change from net income attributable to Photronics, Inc. shareholders and transfer from noncontrolling interest		2,018,000
Additional Paid-in Capital [Member]
Effect of the change in the entity's ownership interest in PSMC [Abstract]
Increase (decrease) in Photronics, Inc.'s additional paid-in capital and accumulated other comprehensive income		36,000
Accumulated Other Comprehensive Income [Member]
Effect of the change in the entity's ownership interest in PSMC [Abstract]
Increase (decrease) in Photronics, Inc.'s additional paid-in capital and accumulated other comprehensive income		(11,000)
PSMC [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Subsidiary shares acquired (in shares)			3.0
Payment to minority shareholders			$ 1,700,000
Ownership percentage in subsidiary (in hundredths)			100.00%	98.63%

XML

SUBSIDIARY SHARE REPURCHASE (Tables)

3 Months Ended

Feb. 01, 2015

SUBSIDIARY SHARE REPURCHASE [Abstract]

Effect of change in the entity's ownership interest in PSMC

The table below presents the effect of the change in the Company's ownership interest in PDMC on the Company's equity for the three month period ended February 2, 2014.

	Three Months Ended
	February 2, 2014
Net income attributable to Photronics, Inc. shareholders	$	1,993
Increase in Photronics, Inc.'s additional paid-in capital		36
Decrease in Photronics, Inc. shareholders’ accumulated other comprehensive income		(11	)
Change from net income attributable to Photronics, Inc. shareholders and transfer from noncontrolling interest	$	2,018

XML

ACQUISITION OF DNP PHOTOMASK TECHNOLOGY TAIWAN CO., LTD. (Tables)

3 Months Ended

Feb. 01, 2015

ACQUISITION OF DNP PHOTOMASK TECHNOLOGY TAIWAN CO., LTD. [Abstract]

Fair values of assets acquired and liabilities assumed

The following table summarizes the provisional fair values of assets acquired and liabilities assumed of DPTT, the fair value of the noncontrolling interests and consideration for DPTT at the acquisition date. These provisional amounts could change as a result of the ultimate realization of the acquired net working capital.

Cash and cash equivalents	$	4,508
Accounts receivable (gross amount of $28,560, of which $500 is estimated    to be uncollectable)		28,060
Inventory		1,279
Deferred tax asset		9,787
Other current assets		11,517
Property, plant and equipment		95,431
Identifiable intangible assets		1,552
Other long-term assets		1,328
Accounts payable and accrued expenses		(32,410	)
Deferred tax liability		(3,042	)
Other long-term liabilities		(3,291	)
Total net assets acquired		114,719
Noncontrolling interests retained by DNP		57,348
		57,371
Consideration – 49.99% of fair value of PSMC		40,999
Gain on acquisition	$	16,372

XML

INCOME TAXES (Details) (USD $)	3 Months Ended
	Feb. 01, 2015	Feb. 02, 2014	Nov. 02, 2014
INCOME TAXES [Abstract]
U.S. statutory rate (in hundredths)	35.00%	35.00%
Unrecognized tax benefits	$ 5,200,000		$ 5,100,000
Unrecognized tax benefits that would impact effective tax rate	5,100,000		5,000,000
Accrued interest and penalties related to unrecognized tax benefits	100,000		100,000
Income Tax Holiday [Line Items]
Dollar effect of income tax holiday	0	0
Income tax benefit (expenses)	(3,134,000)	(2,716,000)
Foreign Tax Authority [Member] | PDMC [Member]
Income Tax Holiday [Line Items]
Income tax holiday commencement date	Jan. 01, 2015
Income tax holiday termination date	October 31, 2019
Per share effect of income tax holiday (dollars per share)	$ 0	$ 0
Income tax benefit (expenses)	$ 100,000
Foreign Tax Authority [Member] | PKLT [Member]
Income Tax Holiday [Line Items]
Income tax holiday commencement date	Jan. 01, 2012
Income tax holiday termination date	October 31, 2017
Per share effect of income tax holiday (dollars per share)	$ 0	$ 0

XML

CHANGES IN EQUITY (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Feb. 01, 2015	Feb. 02, 2014
Beginning balance	$ 739,494	$ 587,831
Net income	7,142	2,041
Other comprehensive loss	(20,042)	(8,492)
Sale of common stock through employee stock option and purchase plans	528	409
Restricted stock awards vesting and expense	273	209
Share-based compensation expense	650	896
Redemption of common stock by subsidiary		(1,690)
Ending balance	728,045	581,204
Common Stock [Member]
Beginning balance	659	611
Beginning balance (in shares)	65,930	61,083
Net income	0	0
Other comprehensive loss	0	0
Sale of common stock through employee stock option and purchase plans	2	1
Sale of common stock through employee stock option and purchase plans (in shares)	166	130
Restricted stock awards vesting and expense	1	1
Restricted stock awards vesting and expense (in shares)	113	112
Share-based compensation expense	0	0
Redemption of common stock by subsidiary		0
Ending balance	662	613
Ending balance (in shares)	66,209	61,325
Additional Paid-in Capital [Member]
Beginning balance	520,182	498,861
Net income	0	0
Other comprehensive loss	0	0
Sale of common stock through employee stock option and purchase plans	526	408
Restricted stock awards vesting and expense	272	208
Share-based compensation expense	600	896
Redemption of common stock by subsidiary		36
Ending balance	521,580	500,409
Retained Earnings [Member]
Beginning balance	85,435	59,439
Net income	3,837	1,993
Other comprehensive loss	0	0
Sale of common stock through employee stock option and purchase plans	0	0
Restricted stock awards vesting and expense	0	0
Share-based compensation expense	0	0
Redemption of common stock by subsidiary		0
Ending balance	89,272	61,432
Accumulated Other Comprehensive Income [Member]
Beginning balance	21,774	26,403
Net income	0	0
Other comprehensive loss	(16,179)	(8,412)
Sale of common stock through employee stock option and purchase plans	0	0
Restricted stock awards vesting and expense	0	0
Share-based compensation expense	0	0
Redemption of common stock by subsidiary		(11)
Ending balance	5,595	17,980
Non-controlling Interests [Member]
Beginning balance	111,444	2,517
Net income	3,305	48
Other comprehensive loss	(3,863)	(80)
Sale of common stock through employee stock option and purchase plans	0	0
Restricted stock awards vesting and expense	0	0
Share-based compensation expense	50	0
Redemption of common stock by subsidiary		(1,715)
Ending balance	$ 110,936	$ 770

XML

COMMITMENTS AND CONTINGENCIES (Details) (USD $) In Millions, unless otherwise specified	Feb. 01, 2015
COMMITMENTS AND CONTINGENCIES [Abstract]
Outstanding commitments for capital expenditure	$ 16

XML

ACQUISITION OF DNP PHOTOMASK TECHNOLOGY TAIWAN CO., LTD.

3 Months Ended

Feb. 01, 2015

ACQUISITION OF DNP PHOTOMASK TECHNOLOGY TAIWAN CO., LTD. [Abstract]

ACQUISITION OF DNP PHOTOMASK TECHNOLOGY TAIWAN CO., LTD.

NOTE 2 – ACQUISITION OF DNP PHOTOMASK TECHNOLOGY TAIWAN CO., LTD.

On April 4, 2014, DPTT merged into PSMC, the Company’s IC manufacturing subsidiary located in Taiwan, to form PDMC. Throughout this report the merger of DPTT into PSMC is referred to as the “DPTT Acquisition.” In connection with the DPTT Acquisition, the Company transferred consideration with a fair value of $98.3 million. The Company owns 50.01 percent of PDMC and includes its financial results in its consolidated financial statements, while DNP owns the remaining 49.99 percent of PDMC. The Company also has the ability to appoint the majority of the directors of PDMC, including the chairman of its board of directors, select its management responsible for implementing its policies and procedures, and establish its operating and capital decisions and policies. Photronics determined it has control of PDMC by virtue of its tie-breaking voting rights within PDMC’s Board of Directors, thereby giving it the power to direct the activities of PDMC that most significantly impact its economic performance, including its decision making authority in the ordinary course of business. The DPTT Acquisition was the result of the Company’s desire to combine the strengths in logic and memory photomask technologies of PSMC and DPTT in order to enhance its capability with customers in the region.

The DPTT Acquisition met the conditions of a business combination as defined by Accounting Standards Codification (“ASC”) 805 and, as such, is accounted for under ASC 805 using the acquisition method of accounting. ASC 805 defines the three elements of a business as Input, Process and Output. As a result of the DPTT Acquisition, Photronics acquired the machinery and equipment utilized in the processes to manufacture product, the building that houses the entire operation and the processes needed to manufacture the product, all previously owned by DPTT. The former DPTT employees hired by Photronics in connection with the acquisition brought with them the skills, experience and know-how necessary to provide the operational processes that, when applied to the acquired assets, represent processes being applied to inputs to create outputs. Having met all three elements of a business as defined in ASC 805, the Company determined that the DPTT Acquisition should be accounted for as a business combination.

The following table summarizes the provisional fair values of assets acquired and liabilities assumed of DPTT, the fair value of the noncontrolling interests and consideration for DPTT at the acquisition date. These provisional amounts could change as a result of the ultimate realization of the acquired net working capital.

Cash and cash equivalents	$	4,508
Accounts receivable (gross amount of $28,560, of which $500 is estimated    to be uncollectable)		28,060
Inventory		1,279
Deferred tax asset		9,787
Other current assets		11,517
Property, plant and equipment		95,431
Identifiable intangible assets		1,552
Other long-term assets		1,328
Accounts payable and accrued expenses		(32,410	)
Deferred tax liability		(3,042	)
Other long-term liabilities		(3,291	)
Total net assets acquired		114,719
Noncontrolling interests retained by DNP		57,348
		57,371
Consideration – 49.99% of fair value of PSMC		40,999
Gain on acquisition	$	16,372

In addition to recording the fair values of the net assets acquired, the Company also recorded a gain on acquisition of $16.4 million in the three month period ended May 4, 2014, in accordance with ASC 805 using the acquisition method of accounting. The gain on acquisition was primarily due to the difference between the market values of the acquired real estate and personal property exceeding the fair value of the consideration transferred. In addition, a deferred tax liability of $3.0 million was recorded in the opening balance sheet, which had the effect of reducing the gain on acquisition to $16.4 million. Prior to recording the gain, the Company reassessed whether it had correctly identified all of the assets acquired and all of the liabilities assumed. Additionally, the Company also reviewed the procedures used to measure the amounts of the identifiable assets acquired, liabilities assumed and consideration transferred.

The fair value of the first component of consideration represents 49.99 percent of the fair value of PSMC, and is based on recent prices paid by the Company to acquire outstanding shares of PSMC (prior to the acquisition). As a result of the merger, the Company acquired the net assets of DPTT having a fair value of $114.7 million, less noncontrolling interests of $57.3 million retained by DNP, and transferred consideration with a fair value of $41.0 million, resulting in a gain of $16.4 million. The fair value of the total consideration transferred as of the acquisition date was $98.3 million, comprised of the 49.99% noncontrolling interest in DPTT of $57.3 million, and 49.99% of the fair value of PSMC of $41.0 million (112.9 million shares, or 49.99% of the outstanding Common Stock of PSMC).

We estimated the $114.7 million fair value of DPTT as of the acquisition date by applying an income approach as our valuation technique. Our income approach followed a discounted cash flow method, which applied our best estimates of future cash flows and an estimated terminal value discounted to present value at a rate of return taking into account the relative risk of the cash flows. To confirm the reasonableness of the value derived from the income approach, we also analyzed the values of comparable companies which are publicly traded. The acquisition date fair value of the property, plant and equipment of DPTT was $95.4 million, which was determined by utilizing the cost and, to a lesser extent, the market approach, based on an in-use premise of value. Inputs utilized by the Company to determine fair values of DPTT’s property, plant and equipment included a cost approach, which was adjusted for depreciation and condition for equipment, and adjusted for depreciation and local market conditions for real property. The noncontrolling interest of DPTT was calculated using the 49.99% of its total fair value of $114.7 million. The Company also used a market approach to corroborate the enterprise value of DPTT. This fair value measurement is based on significant inputs that are not observable in the market and thus represents a fair value measurement categorized within Level 3 of the fair value hierarchy. Key assumptions include local and current construction replacement cost multipliers, amounts of ancillary replacement costs, physical deterioration, and economic and functional obsolescence to adjust the current replacement costs by, as well as the estimated economic lives of the assets.

Identifiable intangible assets acquired were primarily customer relationships, which represent the fair value of relationships and agreements DPTT had in place at the date of the merger. The customer relationships had a fair value of $1.5 million at the acquisition date, determined by using the multi-period excess earnings method, and are amortized over a twelve year estimated useful life. The acquisition date fair value of the remainder of the identifiable assets acquired and liabilities assumed were equivalent to, or did not materially differ from, their carrying values

Acquisition costs related to the merger were $0.4 million for the three month period ended February 2, 2014 and are included in selling, general and administrative expense in the condensed consolidated statements of income.

XML

EARNINGS PER SHARE (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		1 Months Ended
	Feb. 01, 2015	Feb. 02, 2014	Feb. 28, 2015
Calculation of basic and diluted earnings per share [Abstract]
Net income attributable to Photronics, Inc. shareholders	$ 3,837	$ 1,993
Effect of of dilutive securities	0	0
Earnings for diluted earnings per share	$ 3,837	$ 1,993
Weighted-average common shares computations [Abstract]
Weighted-average common shares used for basic earnings per share (in shares)	66,066	61,200
Effect of dilutive securities [Abstract]
Share-based payment awards (in shares)	954	936
Potentially dilutive common shares (in shares)	954	936
Weighted-average common shares used for diluted earnings per share (in shares)	67,020	62,136
Basic earnings per share (in dollars per share)	$ 0.06	$ 0.03
Diluted earnings per share (in dollars per share)	$ 0.06	$ 0.03
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive shares excluded (in shares)	12,672	17,581
Subsequent Event [Member]
Subsequent Event [Line Items]
Share-based payment awards issued after February 1, 2015 (in shares)			300
Convertible Notes [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive shares excluded (in shares)	11,085	15,423
Share-Based Payment Awards [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive shares excluded (in shares)	1,587	2,158

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SHARE-BASED COMPENSATION (Tables)

3 Months Ended

Feb. 01, 2015

SHARE-BASED COMPENSATION [Abstract]

Weighted-average inputs and risk-free rate of return ranges used to calculate the grant date fair value of options

The weighted-average inputs and risk-free rate of return ranges used to calculate the grant date fair value of options issued during the three month periods ended February 1, 2015 and February 2, 2014, are presented in the following table.

	Three Months Ended
	February 1, 2015			February 2, 2014
Volatility		55.1	%		61.1	%
Risk free rate of return		1.6	%		1.4	%
Dividend yield		0.0	%		0.0	%
Expected term	4.7 years			4.6 years

Information on outstanding and exercisable option awards

Information on outstanding and exercisable option awards as of February 1, 2015, is presented below.

Options	Shares		WeightedAverageExercise Price		WeightedAverageRemainingContractual Life	AggregateIntrinsic Value
Outstanding at February 1, 2015		3,821,006	$	7.14	6.3 years	$	8,298
Exercisable at February 1, 2015		2,527,303	$	6.90	5.2 years	$	7,053

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LONG-TERM BORROWINGS (Tables)

3 Months Ended

Feb. 01, 2015

LONG-TERM BORROWINGS [Abstract]

Long-term borrowings

Long-term borrowings consist of the following:

	February 1, 2015		November 2, 2014
3.25% convertible senior notes due in April 2016	$	57,500	$	115,000
3.25% convertible senior notes due in April 2019		57,500		-
2.77% capital lease obligation payable through July 2018		19,211		20,481
3.09% capital lease obligation payable through March 2016		5,608		6,705
		139,819		142,186
Less current portion		10,457		10,381
	$	129,362	$	131,805

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CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Feb. 01, 2015	Feb. 02, 2014
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT [Abstract]
Other comprehensive income, tax	$ 0	$ 0
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	21,774	26,403
Other comprehensive income (loss) before reclassifications	(20,074)	(8,524)
Amounts reclassified from other comprehensive income	32	32
Net current period other comprehensive income (loss)	(20,042)	(8,492)
Less: other comprehensive (income) loss attributable to noncontrolling interests	3,863	80
Redemption of common stock of subsidiary		(11)
Ending Balance	5,595	17,980
Foreign Currency Translation Adjustments [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	22,651	27,797
Other comprehensive income (loss) before reclassifications	(20,106)	(8,551)
Amounts reclassified from other comprehensive income	0	0
Net current period other comprehensive income (loss)	(20,106)	(8,551)
Less: other comprehensive (income) loss attributable to noncontrolling interests	3,879	80
Redemption of common stock of subsidiary		0
Ending Balance	6,424	19,326
Amortization of Cash Flow Hedges [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	(434)	(562)
Other comprehensive income (loss) before reclassifications	0	0
Amounts reclassified from other comprehensive income	32	32
Net current period other comprehensive income (loss)	32	32
Less: other comprehensive (income) loss attributable to noncontrolling interests	0	0
Redemption of common stock of subsidiary		0
Ending Balance	(402)	(530)
Other [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	(443)	(832)
Other comprehensive income (loss) before reclassifications	32	27
Amounts reclassified from other comprehensive income	0	0
Net current period other comprehensive income (loss)	32	27
Less: other comprehensive (income) loss attributable to noncontrolling interests	(16)	0
Redemption of common stock of subsidiary		(11)
Ending Balance	$ (427)	$ (816)

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EARNINGS PER SHARE (Tables)

3 Months Ended

Feb. 01, 2015

EARNINGS PER SHARE [Abstract]

Calculation of basic and diluted earnings per share

The calculation of basic and diluted earnings per share is presented below.

	Three Months Ended
	February 1, 2015		February 2, 2014
Net income attributable to Photronics, Inc. shareholders	$	3,837	$	1,993
Effect of dilutive securities		-		-
Earnings for diluted earnings per share	$	3,837	$	1,993
Weighted-average common shares computations:
Weighted-average common shares used for basic earnings per share		66,066		61,200
Effect of dilutive securities:
Share-based payment awards		954		936
Potentially dilutive common shares		954		936
Weighted-average common shares used for diluted earnings per share		67,020		62,136
Basic earnings per share	$	0.06	$	0.03
Diluted earnings per share	$	0.06	$	0.03

Outstanding securities excluded from the calculation of diluted earnings or loss per share

The table below shows the outstanding weighted-average share-based payment awards that were excluded from the calculation of diluted earnings per share because their exercise price exceeded the average market value of the common shares for the period or, under application of the treasury stock method, they were otherwise determined to be anti-dilutive. The table also shows convertible notes that, if converted, would have been anti-dilutive.

	Three Months Ended
	February 1, 2015		February 2, 2014
Convertible notes		11,085		15,423
Share-based payment awards		1,587		2,158
Total potentially dilutive shares excluded		12,672		17,581

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CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT (Tables)

3 Months Ended

Feb. 01, 2015

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT [Abstract]

Schedule changes in accumulated other comprehensive income by component

The following tables set forth thechanges in the Company's accumulated other comprehensive income by component (net of tax of $0)for the three month periods ended February 1, 2015 and February 2, 2014:

	Three Months Ended February 1, 2015
	Foreign Currency Translation Adjustments			Amortization of Cash Flow Hedge			Other			Total
Balance at November 2, 2014	$	22,651		$	(434	)	$	(443	)	$	21,774
Other comprehensive income (loss) before reclassifications		(20,106	)		-			32			(20,074	)
Amounts reclassified from other comprehensive income		-			32			-			32
Net current period other comprehensive income (loss)		(20,106	)		32			32			(20,042	)
Less: other comprehensive (income) loss attributable to noncontrolling interests		3,879			-			(16	)		3,863
Balance at February 1, 2015	$	6,424		$	(402	)	$	(427	)	$	5,595

	Three Months Ended February 2, 2014
	Foreign Currency Translation Adjustments			Amortization of Cash Flow Hedge			Other			Total
Balance at November 3, 2013	$	27,797		$	(562	)	$	(832	)	$	26,403
Other comprehensive income (loss) before reclassifications		(8,551	)		-			27			(8,524	)
Amounts reclassified from other comprehensive income		-			32			-			32
Net current period other comprehensive income (loss)		(8,551	)		32			27			(8,492	)
Less: other comprehensive loss attributable to noncontrolling interests		80			-			-			80
Redemption of common stock of subsidiary		-			-			(11	)		(11	)
Balance at February 2, 2014	$	19,326		$	(530	)	$	(816	)	$	17,980

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BASIS OF FINANCIAL STATEMENT PRESENTATION

3 Months Ended

Feb. 01, 2015

BASIS OF FINANCIAL STATEMENT PRESENTATION [Abstract]

BASIS OF FINANCIAL STATEMENT PRESENTATION

NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION

Photronics, Inc. and its subsidiaries ("Photronics" or “the Company") is one of the world's leading manufacturers 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 flat panel displays ("FPDs"), and are used as masters to transfer circuit patterns onto semiconductor wafers and flat panel substrates during the fabrication of integrated circuits ("ICs") and a variety of FPDs and, to a lesser extent, other types of electrical and optical components. The Company currently operates principally from nine manufacturing facilities, two of which are located in Europe, three in Taiwan, one in Korea, and three in the United States.

On April 4, 2014, DNP Photomask Technology Taiwan Co., Ltd. (“DPTT”), a wholly owned subsidiary of Dai Nippon Printing Co., Ltd. (“DNP”), merged into Photronics Semiconductor Mask Corporation (“PSMC”), a wholly owned subsidiary of Photronics. All of the assets and liabilities of DPTT existing prior to the merger were assumed by the renamed surviving entity of the merger, Photronics DNP Mask Corporation (“PDMC”). Photronics and DNP own 50.01 percent and 49.99 percent of PDMC, respectively.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. The Company is typically impacted during its first fiscal quarter by the North American and European holiday periods, as some customers reduce their effective workdays and orders during these periods. Additionally, the Company can be impacted during its first or second quarter by the Asian New Year holiday period, which may also reduce customer orders. Operating results for the interim period are not necessarily indicative of the results that may be expected for the fiscal year ending November 1, 2015. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended November 2, 2014.

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FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Feb. 01, 2015

FAIR VALUE MEASUREMENTS [Abstract]

Fair and carrying values of convertible senior notes

The fair values of the Company's cash and cash equivalents (Level 1 measurements), accounts receivable, accounts payable, and certain other current assets and current liabilities (Level 2 measurements) approximate their carrying value due to their short-term maturities. The fair value of the Company's convertible senior notes is a Level 2 measurement that is determined using recent bid prices. The table below presents the fair and carrying values of the Company's convertible senior notes at February 1, 2015 and November 2, 2014.

	February 1, 2015				November 2, 2014
	Fair Value		Carrying Value		Fair Value		Carrying Value
3.25% convertible senior notes due 2016	$	59,978	$	57,500	$	122,544	$	115,000
3.25% convertible senior notes due 2019	$	60,479	$	57,500	$	-	$	-

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LONG-TERM BORROWINGS (Details) (USD $)	1 Months Ended	3 Months Ended	1 Months Ended
	Aug. 31, 2014	Feb. 01, 2015	Jan. 31, 2015	Aug. 25, 2013	Apr. 30, 2011	Nov. 02, 2014
Long-term borrowings [Abstract]
Long-term debt and capital lease obligations		$ 139,819,000				$ 142,186,000
Less current portion		10,457,000				10,381,000
Long-term debt and capital lease obligations non current		129,362,000				131,805,000
Credit Facility [Member]
Long-term borrowings [Abstract]
Maturity date of debt	Dec. 31, 2018	Dec. 31, 2018
Available borrowing capacity	50,000,000	50,000,000
Maximum borrowing capacity	75,000,000	75,000,000
Amount outstanding under credit facility		0
Current borrowing capacity		50,000,000
Variable interest rate (in hundredths)		1.69%
3.25% convertible senior notes due on April 1, 2016 [Member]
Long-term borrowings [Abstract]
Long-term debt and capital lease obligations		57,500,000				115,000,000
Interest rate percentage (in hundredths)		3.25%
Maturity date of debt		Apr. 01, 2016
3.25 convertible senior notes due on April 2019 [Member]
Long-term borrowings [Abstract]
Long-term debt and capital lease obligations		57,500,000				0
Interest rate percentage (in hundredths)		3.25%
Maturity date of debt		Apr. 01, 2019
Number of shares each note is convertible to (in shares)			96
Face amount of each note converted			1,000
Conversion price per share (in dollars per share)			$ 10.37
2.77% capital lease obligation payable through July 2018 [Member]
Long-term borrowings [Abstract]
Long-term debt and capital lease obligations		19,211,000				20,481,000
Interest rate percentage (in hundredths)		2.77%
Maturity date of debt		Jul. 31, 2018
Original face amount of debt				26,400,000
Repayment period of debt				5 years
Periodic payments				500,000
Frequency of periodic payment				per month
Amount payable through the end of lease term		20,200,000
Interest included in lease payments		1,000,000
3.09% capital lease obligation payable through March 2016 [Member]
Long-term borrowings [Abstract]
Long-term debt and capital lease obligations		5,608,000				6,705,000
Interest rate percentage (in hundredths)		3.09%
Maturity date of debt		Mar. 30, 2016
Original face amount of debt					21,200,000
Repayment period of debt					5 years
Periodic payments					400,000
Frequency of periodic payment					per month
Amount payable through the end of lease term		5,700,000
Interest included in lease payments		$ 100,000

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Condensed Consolidated Balance Sheets (unaudited) (USD $) In Thousands, unless otherwise specified	Feb. 01, 2015	Nov. 02, 2014
Current assets:
Cash and cash equivalents	$ 168,610	$ 192,929
Accounts receivable, net of allowance of $3,406 in 2015 and $3,078 in 2014	99,183	94,515
Inventories	23,786	22,478
Other current assets	28,924	26,570
Total current assets	320,503	336,492
Property, plant and equipment, net	593,020	550,069
Investment in joint venture	93,078	93,122
Intangible assets, net	29,203	30,294
Deferred income taxes	10,746	11,036
Other assets	6,327	8,170
Total assets	1,052,877	1,029,183
Current liabilities:
Current portion of long-term borrowings	10,457	10,381
Accounts payable	125,628	86,495
Accrued liabilities	40,865	42,241
Total current liabilities	176,950	139,117
Long-term borrowings	129,362	131,805
Other liabilities	18,520	18,767
Total liabilities	324,832	289,689
Commitments and contingencies
Equity:
Preferred stock, $0.01 par value, 2,000 shares authorized, none issued and outstanding	0	0
Common stock, $0.01 par value, 150,000 shares authorized, 66,209 shares issued and outstanding at February 1, 2015 and 65,930 shares issued and outstanding at November 2, 2014	662	659
Additional paid-in capital	521,580	520,182
Retained earnings	89,272	85,435
Accumulated other comprehensive income	5,595	21,774
Total Photronics, Inc. shareholders' equity	617,109	628,050
Noncontrolling interests	110,936	111,444
Total equity	728,045	739,494
Total liabilities and equity	$ 1,052,877	$ 1,029,183

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FAIR VALUE MEASUREMENTS (Details) (USD $) In Thousands, unless otherwise specified	Feb. 01, 2015	Nov. 02, 2014
Fair Value Assets And Liabilities Measured On Recurring and Nonrecurring Basis [Line Items]
Total assets	$ 0	$ 0
Total liabilities	0	0
Fair Value [Member] | 3.25% convertible senior notes due 2016 [Member]
Fair and carrying values of the Company's convertible senior notes [Abstract]
Convertible senior notes	59,978	122,544
Fair Value [Member] | 3.25% convertible senior notes due 2019 [Member]
Fair and carrying values of the Company's convertible senior notes [Abstract]
Convertible senior notes	60,479	0
Carrying Value [Member] | 3.25% convertible senior notes due 2016 [Member]
Fair and carrying values of the Company's convertible senior notes [Abstract]
Convertible senior notes	57,500	115,000
Carrying Value [Member] | 3.25% convertible senior notes due 2019 [Member]
Fair and carrying values of the Company's convertible senior notes [Abstract]
Convertible senior notes	$ 57,500	$ 0

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Condensed Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Feb. 01, 2015	Feb. 02, 2014
Condensed Consolidated Statements of Comprehensive Income (unaudited) [Abstract]
Other comprehensive income, tax	$ 0	$ 0

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ACQUISITION OF DNP PHOTOMASK TECHNOLOGY TAIWAN CO., LTD. (Details) (USD $) In Millions, unless otherwise specified	0 Months Ended	3 Months Ended
	Apr. 04, 2014	Feb. 01, 2015	Feb. 02, 2014
Business Acquisition [Line Items]
Date of acquisition		Apr. 04, 2014
Consideration transferred	$ 98.3
Ownership percentage in PDMC (in hundredths)		50.01%
Acquisition costs related to the merger included in selling, general and administrative expense			$ 0.4
DNP [Member]
Business Acquisition [Line Items]
Ownership percentage of noncontrolling interests (in hundredths)		49.99%
PSMC [Member]
Business Acquisition [Line Items]
Number of shares transferred to noncontrolling interests (in shares)		112.9
Customer Relationships [Member]
Business Acquisition [Line Items]
Estimated amortization period		12 years

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ACQUISITION OF DNP PHOTOMASK TECHNOLOGY TAIWAN CO., LTD. (Policies)

3 Months Ended

Feb. 01, 2015

ACQUISITION OF DNP PHOTOMASK TECHNOLOGY TAIWAN CO., LTD. [Abstract]

Business Combinations

The DPTT Acquisition met the conditions of a business combination as defined by Accounting Standards Codification (“ASC”) 805 and, as such, is accounted for under ASC 805 using the acquisition method of accounting. ASC 805 defines the three elements of a business as Input, Process and Output. As a result of the DPTT Acquisition, Photronics acquired the machinery and equipment utilized in the processes to manufacture product, the building that houses the entire operation and the processes needed to manufacture the product, all previously owned by DPTT. The former DPTT employees hired by Photronics in connection with the acquisition brought with them the skills, experience and know-how necessary to provide the operational processes that, when applied to the acquired assets, represent processes being applied to inputs to create outputs. Having met all three elements of a business as defined in ASC 805, the Company determined that the DPTT Acquisition should be accounted for as a business combination.

In addition to recording the fair values of the net assets acquired, the Company also recorded a gain on acquisition of $16.4 million in the three month period ended May 4, 2014, in accordance with ASC 805 using the acquisition method of accounting. The gain on acquisition was primarily due to the difference between the market values of the acquired real estate and personal property exceeding the fair value of the consideration transferred. In addition, a deferred tax liability of $3.0 million was recorded in the opening balance sheet, which had the effect of reducing the gain on acquisition to $16.4 million. Prior to recording the gain, the Company reassessed whether it had correctly identified all of the assets acquired and all of the liabilities assumed. Additionally, the Company also reviewed the procedures used to measure the amounts of the identifiable assets acquired, liabilities assumed and consideration transferred.

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ACQUISITION OF DNP PHOTOMASK TECHNOLOGY TAIWAN CO., LTD., Fair Values of Assets Acquired and Liabilities Assumed (Details) (USD $) In Thousands, unless otherwise specified	0 Months Ended
	Apr. 04, 2014
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract]
Cash and cash equivalents	$ 4,508
Accounts receivable (gross amount of $28,560, of which $500 is estimated to be uncollectable)	28,060
Inventory	1,279
Deferred tax asset	9,787
Other current assets	11,517
Property, plant and equipment	95,431
Identifiable intangible assets	1,552
Other long-term assets	1,328
Accounts payable and accrued expenses	(32,410)
Deferred tax liability	(3,042)
Other long-term liabilities	(3,291)
Total net assets acquired	114,719
Noncontrolling interests retained by DNP	57,348
Total net assets acquired less noncontrolling interests	57,371
Consideration - 49.99% of fair value of PSMC	40,999
Gain on acquisition	16,372
Accounts receivable gross amount	28,560
Accounts receivable estimated to be uncollectable	$ 500

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RECENT ACCOUNTING PRONOUNCEMENTS (Policies)

3 Months Ended

Feb. 01, 2015

RECENT ACCOUNTING PRONOUNCEMENTS [Abstract]

Recent Accounting Pronouncements

In May 2014 the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2014-09 – Revenue from Contracts with Customers, which will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of this ASU is that revenue should be recognized for the amount of consideration expected to be received for promised goods or services transferred to customers. This ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments, and assets recognized for costs incurred to obtain or fulfill a contract. This ASU will be effective for the Company in its first quarter of fiscal 2018. Early adoption is not permitted. The ASU allows for either full retrospective or modified retrospective adoption. The Company is evaluating the transition method that will be elected and the potential effects of the adoption of this ASU on its financial statements.

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Condensed Consolidated Statements of Cash Flows (unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Feb. 01, 2015	Feb. 02, 2014
Cash flows from operating activities:
Net income	$ 7,142	$ 2,041
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	20,854	17,899
Changes in assets and liabilities:
Accounts receivable	(7,888)	(40)
Inventories	(1,998)	(1,016)
Other current assets	(4,544)	(806)
Accounts payable, accrued liabilities, and other	8,734	(3,881)
Net cash provided by operating activities	22,300	14,197
Cash flows from investing activities:
Purchases of property, plant and equipment	(40,371)	(12,184)
Increase in restricted cash	0	(1,698)
Other	43	67
Net cash used in investing activities	(40,328)	(13,815)
Cash flows from financing activities:
Repayments of long-term borrowings	(2,367)	(23,554)
Payments of deferred financing fees	0	(310)
Proceeds from share-based arrangements	768	518
Net cash used in financing activities	(1,599)	(23,346)
Effect of exchange rate changes on cash and cash equivalents	(4,692)	(3,423)
Net decrease in cash and cash equivalents	(24,319)	(26,387)
Cash and cash equivalents at beginning of period	192,929	215,615
Cash and cash equivalents at end of period	168,610	189,228
Supplemental disclosure of noncash information:
Accrual for property, plant and equipment purchased during the period	$ 54,510	$ 34,335

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Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Feb. 01, 2015	Nov. 02, 2014
Current assets:
Accounts receivable, allowance	$ 3,406	$ 3,078
Equity:
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	2,000	2,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	150,000	150,000
Common stock, shares issued (in shares)	66,209	65,930
Common stock, shares outstanding (in shares)	66,209	65,930

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CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT

3 Months Ended

Feb. 01, 2015

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT [Abstract]

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT

NOTE 10 - CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT

The following tables set forth thechanges in the Company's accumulated other comprehensive income by component (net of tax of $0)for the three month periods ended February 1, 2015 and February 2, 2014:

	Three Months Ended February 1, 2015
	Foreign Currency Translation Adjustments			Amortization of Cash Flow Hedge			Other			Total
Balance at November 2, 2014	$	22,651		$	(434	)	$	(443	)	$	21,774
Other comprehensive income (loss) before reclassifications		(20,106	)		-			32			(20,074	)
Amounts reclassified from other comprehensive income		-			32			-			32
Net current period other comprehensive income (loss)		(20,106	)		32			32			(20,042	)
Less: other comprehensive (income) loss attributable to noncontrolling interests		3,879			-			(16	)		3,863
Balance at February 1, 2015	$	6,424		$	(402	)	$	(427	)	$	5,595

	Three Months Ended February 2, 2014
	Foreign Currency Translation Adjustments			Amortization of Cash Flow Hedge			Other			Total
Balance at November 3, 2013	$	27,797		$	(562	)	$	(832	)	$	26,403
Other comprehensive income (loss) before reclassifications		(8,551	)		-			27			(8,524	)
Amounts reclassified from other comprehensive income		-			32			-			32
Net current period other comprehensive income (loss)		(8,551	)		32			27			(8,492	)
Less: other comprehensive loss attributable to noncontrolling interests		80			-			-			80
Redemption of common stock of subsidiary		-			-			(11	)		(11	)
Balance at February 2, 2014	$	19,326		$	(530	)	$	(816	)	$	17,980

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Document and Entity Information	3 Months Ended
	Feb. 01, 2015	Feb. 27, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	PHOTRONICS INC
Entity Central Index Key	0000810136
Current Fiscal Year End Date	--11-01
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		66,445,220
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Feb. 01, 2015

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FAIR VALUE MEASUREMENTS

3 Months Ended

Feb. 01, 2015

FAIR VALUE MEASUREMENTS [Abstract]

FAIR VALUE MEASUREMENTS

NOTE 11 - FAIR VALUE MEASUREMENTS

The accounting framework for determining fair value includes a hierarchy for ranking the quality and reliability of the information used to measure fair value, which enables the reader of the financial statements to assess the inputs used to develop those measurements. The fair value hierarchy consists of three tiers as follows: Level 1, defined as quoted market prices in active markets for identical securities; Level 2, defined as inputs other than Level 1 that are observable, either directly or indirectly; and Level 3, defined as unobservable inputs that are not corroborated by market data.

The Company did not have any assets or liabilities measured at fair value, on a recurring or a nonrecurring basis, at February 1, 2015 or November 2, 2014.

Fair Value of Other Financial Instruments

The fair values of the Company's cash and cash equivalents (Level 1 measurements), accounts receivable, accounts payable, and certain other current assets and current liabilities (Level 2 measurements) approximate their carrying value due to their short-term maturities. The fair value of the Company's convertible senior notes is a Level 2 measurement that is determined using recent bid prices. The table below presents the fair and carrying values of the Company's convertible senior notes at February 1, 2015 and November 2, 2014.

	February 1, 2015				November 2, 2014
	Fair Value		Carrying Value		Fair Value		Carrying Value
3.25% convertible senior notes due 2016	$	59,978	$	57,500	$	122,544	$	115,000
3.25% convertible senior notes due 2019	$	60,479	$	57,500	$	-	$	-

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Condensed Consolidated Statements of Income (unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Feb. 01, 2015	Feb. 02, 2014
Condensed Consolidated Statements of Income (unaudited) [Abstract]
Net sales	$ 123,505	$ 101,542
Cost and expenses:
Cost of sales	(95,321)	(78,660)
Selling, general and administrative	(11,944)	(12,278)
Research and development	(4,681)	(4,974)
Operating income	11,559	5,630
Other income (expense):
Interest expense	(1,370)	(1,984)
Interest and other income (expense), net	87	1,111
Income before income tax provision	10,276	4,757
Income tax provision	(3,134)	(2,716)
Net income	7,142	2,041
Net income attributable to noncontrolling interests	(3,305)	(48)
Net income attributable to Photronics, Inc. shareholders	$ 3,837	$ 1,993
Earnings per share:
Basic (in dollars per share)	$ 0.06	$ 0.03
Diluted (in dollars per share)	$ 0.06	$ 0.03
Weighted-average number of common shares outstanding:
Basic (in shares)	66,066	61,200
Diluted (in shares)	67,020	62,136

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JOINT VENTURE, TECHNOLOGY LICENSE AND OTHER AGREEMENTS WITH MICRON TECHNOLOGY, INC

3 Months Ended

Feb. 01, 2015

JOINT VENTURE, TECHNOLOGY LICENSE AND OTHER AGREEMENTS WITH MICRON TECHNOLOGY, INC. [Abstract]

JOINT VENTURE, TECHNOLOGY LICENSE AND OTHER AGREEMENTS WITH MICRON TECHNOLOGY, INC.

NOTE 5 - JOINT VENTURE, TECHNOLOGY LICENSE AND OTHER AGREEMENTS WITH MICRON TECHNOLOGY, INC.

In May 2006, Photronics and Micron Technology, Inc. ("Micron") entered into the MP Mask joint venture (“MP Mask”), which develops and produces photomasks for leading-edge and advanced next generation semiconductors. At the time of the formation of the joint venture, the Company also entered into both an agreement to license photomask technology developed by Micron and certain supply agreements.

This joint venture is a variable interest entity ("VIE") (as that term is defined in the ASC) because all costs of the joint venture are passed on to the Company and Micron through purchase agreements they have entered into with the joint venture, and it is dependent upon the Company and Micron for any additional cash requirements. On a quarterly basis the Company reassesses whether its interest in MP Mask gives it a controlling financial interest in this VIE. The purpose of this quarterly reassessment is to identify the primary beneficiary (which is defined in the ASC as the entity that consolidates a VIE) of the VIE. As a result of the reassessment in the current quarter, the Company determined that Micron is still the primary beneficiary of the VIE, by virtue of its tie-breaking voting rights within MP Mask’s Board of Managers, thereby giving it the power to direct the activities of MP Mask that most significantly impact its economic performance, including its decision making authority in the ordinary course of business and its purchasing the majority of products produced by the VIE.

The Company has utilized MP Mask for both high-end IC photomask production and research and development purposes. MP Mask charges its variable interest holders based on their actual usage of its facility. MP Mask separately charges for any research and development activities it engages in at the requests of its owners. The Company recorded cost of sales of $1.3 million and $1.0 million during the three month periods ended February 1, 2015 and February 2, 2014, respectively, and research and development expenses of $0.2 million during the three month periodsended February 1, 2015 and February 2, 2014. As of February 1, 2015 and November 2, 2014, the Company owed MP Mask $4.1 million and $4.2 million, respectively, and had a receivable from Micron of $7.6 million and $6.8 million, respectively, both primarily related to the aforementioned supply agreements.

MP Mask is governed by a Board of Managers, appointed by Micron and the Company. Since MP Mask's inception, Micron, as a result of its majority ownership, has held majority voting power on the Board of Managers. The voting power held by each party is subject to change as ownership interests change. Under the MP Mask joint venture operating agreement, the Company may be required to make additional capital contributions to MP Mask up to the maximum amount defined in the operating agreement. However, should the Board of Managers determine that further additional funding is required, MP Mask shall pursue its own financing. If MP Mask is unable to obtain its own financing, it may request additional capital contributions from the Company. Should the Company choose not to make a requested contribution to MP Mask, its ownership percentage may be reduced.

The Company's investment in the VIE, which represents its maximum exposure to loss, was $93.1 million at February 1, 2015 and November 2, 2014. This amount is reported in the Company's condensed consolidated balance sheets as "Investment in joint venture". The Company recorded no income or loss from its investment in the three month periods ended February 1, 2015 and February 2, 2014. Income or loss from the VIE is included in "Interest and other income (expense), net" in the condensed consolidated statements of income.

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PROPERTY, PLANT AND EQUIPMENT

3 Months Ended

Feb. 01, 2015

PROPERTY, PLANT AND EQUIPMENT [Abstract]

PROPERTY, PLANT AND EQUIPMENT

NOTE 4 - PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following:

	February 1, 2015		November 2, 2014
Land	$	8,344	$	8,598
Buildings and improvements		122,839		124,787
Machinery and equipment		1,353,457		1,367,691
Leasehold improvements		19,476		20,165
Furniture, fixtures and office equipment		12,784		12,086
Construction in progress		131,225		81,351
		1,648,125		1,614,678
Less accumulated depreciation and amortization		1,055,105		1,064,609
	$	593,020	$	550,069

Equipment under capital leases are included in above property, plant and equipment as follows:

	February 1, 2015		November 2, 2014
Machinery and equipment	$	56,245	$	56,245
Less accumulated amortization		11,836		10,430
	$	44,409	$	45,815

Depreciation and amortization expense for property, plant and equipment was $19.2 million and $16.0 million for the three month periods ended February 1, 2015 and February 2, 2014, respectively.

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SHARE-BASED COMPENSATION (Policies)

3 Months Ended

Feb. 01, 2015

SHARE-BASED COMPENSATION [Abstract]

Share-based compensation accounting policy

Option awards generally vest in one to four years, and have a ten-year contractual term. All incentive and non-qualified stock option grants have an exercise price no less than the market value of the underlying common stock on the date of grant. The grant date fair values of options are based on closing prices of the Company’s common stock on the dates of grant using the Black-Scholes option pricing model. Expected volatility is based on the historical volatility of the Company's stock. The Company uses historical option exercise behavior and employee termination data to estimate expected term, which represents the period of time that the options granted are expected to remain outstanding. The risk-free rate of return for the estimated term of the option is based on the U.S. Treasury yield curve in effect at the date of grant.

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SUBSIDIARY SHARE REPURCHASE

3 Months Ended

Feb. 01, 2015

SUBSIDIARY SHARE REPURCHASE [Abstract]

SUBSIDIARY SHARE REPURCHASE

NOTE 12 - SUBSIDIARY SHARE REPURCHASE

In January 2014 the Company increased its ownership percentage in PSMC (in 2014 PSMC’s name was changed to PDMC, see Note 2) from 98.63% to 100% at a cost of $1.7 million for the then remaining 3.0 million shares that were not owned by the Company.

The table below presents the effect of the change in the Company's ownership interest in PDMC on the Company's equity for the three month period ended February 2, 2014.

	Three Months Ended
	February 2, 2014
Net income attributable to Photronics, Inc. shareholders	$	1,993
Increase in Photronics, Inc.'s additional paid-in capital		36
Decrease in Photronics, Inc. shareholders’ accumulated other comprehensive income		(11	)
Change from net income attributable to Photronics, Inc. shareholders and transfer from noncontrolling interest	$	2,018

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INCOME TAXES

3 Months Ended

Feb. 01, 2015

INCOME TAXES [Abstract]

INCOME TAXES

NOTE 8 - INCOME TAXES

The effective tax rate differs from the U.S. statutory rate of 35% in the three month periods ended February 1, 2015 and February 2, 2014, primarily due to earnings being taxed at lower statutory rates in foreign jurisdictions, combined with the benefit of various investment credits in a foreign jurisdiction. Valuation allowances in jurisdictions with historic losses eliminate the effective rate impact of these jurisdictions.

Unrecognized tax benefits related to uncertain tax positions were $5.2 million at February 1, 2015 and $5.1 million at November 2, 2014, of which $5.1 million and $5.0 million, respectively, would favorably impact the Company's effective tax rate if recognized. Accrued interest and penalties related to unrecognized tax benefits was $0.1 million at February 1, 2015 and November 2, 2014. As of February 1, 2015, the total amount of unrecognized tax benefits is not expected to significantly increase or decrease in the next twelve months.

PKLT, the Company's FPD manufacturing facility in Taiwan, has been accorded a tax holiday, which started in 2012 and expires in 2017. The PKLT tax holiday had no dollar or per share effect in the three month periods ended February 1, 2015 and February 2, 2014.  PDMC, as a result of the DPTT Acquisition, acquired an IC manufacturing facility in Taiwan that has been accorded a tax holiday which commenced in 2015 and expires in 2019. The Company realized a $0.1 million tax benefit from this tax holiday during the three month period ended February 1, 2015. The tax holiday had no per share effect in the three month periods ended February 1, 2015 and February 2, 2014.

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LONG-TERM BORROWINGS

3 Months Ended

Feb. 01, 2015

LONG-TERM BORROWINGS [Abstract]

LONG-TERM BORROWINGS

NOTE 6 - LONG-TERM BORROWINGS

Long-term borrowings consist of the following:

	February 1, 2015		November 2, 2014
3.25% convertible senior notes due in April 2016	$	57,500	$	115,000
3.25% convertible senior notes due in April 2019		57,500		-
2.77% capital lease obligation payable through July 2018		19,211		20,481
3.09% capital lease obligation payable through March 2016		5,608		6,705
		139,819		142,186
Less current portion		10,457		10,381
	$	129,362	$	131,805

In January 2015 the Company privately exchanged $57.5 million in aggregate principal amount of its 3.25% convertible senior notes with a maturity date of April 1, 2016, for new 3.25% convertible senior notes with an aggregate principal amount of $57.5 million with a maturity date of April 1, 2019. The conversion rate of the new notes is the same as that of the exchanged notes, which were issued in March 2011 with a conversion rate of approximately 96 shares of common stock per $1,000 note principal, equivalent to a conversion price of $10.37 per share of common stock, and is subject to adjustment upon the occurrence of certain events, which are described in the indenture dated January 22, 2015.  Note holders may convert each $1,000 principal amount of notes at any time prior to the close of business on the second scheduled trading day immediately preceding April 1, 2019, and the Company is not required to redeem the notes prior to their maturity date. Interest on the notes accrues in arrears, and is paid semiannually through the notes’ maturity date.

The Company’s credit facility, which was last amended in August 2014, expires in December 2018, has a $50 million limit with an expansion capacity to $75 million, and is secured by substantially all of the Company’s assets located in the United States and common stock the Company owns in certain of its foreign subsidiaries. The credit facility is subject to a minimum interest coverage ratio, total leverage ratio and minimum unrestricted cash balance financial covenants, all of which the Company was in compliance with at February 1, 2015. The Company had no outstanding borrowings against the credit facility at February 1, 2015, and $50 million was available for borrowing. The interest rate on the credit facility (1.69% at February 1, 2015) is based on the Company’s total leverage ratio at LIBOR plus a spread, as defined in the credit facility.

In August 2013 a $26.4 million principal amount, five year capital lease commenced to fund the purchase of a high-end lithography tool. Payments under the capital lease, which bears interest at 2.77%, are $0.5 million per month through July 2018.  Under the terms of the lease agreement, the Company must maintain the equipment in good working order, and is subject to a cross default with cross acceleration provision related to certain nonfinancial covenants incorporated in its credit facility. As of February 1, 2015, the total amount payable through the end of the lease term was $20.2 million, of which $19.2 million represented principal and $1.0 million represented interest.

In April 2011 the Company entered into a five year, $21.2 million capital lease for manufacturing equipment. Payments under the lease, which bears interest at 3.09%, are $0.4 million per month through March 2016. The lease agreement provides that the Company must maintain the equipment in good working order, and includes a cross default with cross acceleration provision related to certain non-financial covenants incorporated in the Company's credit facility agreement. As of February 1, 2015, the total amount payable through the end of the lease term was $5.7 million, of which $5.6 million represented principal and $0.1 million represented interest.

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SHARE-BASED COMPENSATION

3 Months Ended

Feb. 01, 2015

SHARE-BASED COMPENSATION [Abstract]

SHARE-BASED COMPENSATION

NOTE 7 - SHARE-BASED COMPENSATION

The Company has a share-based compensation plan ("Plan"), under which options, restricted stock, restricted stock units, stock appreciation rights, performance stock, performance units, and other awards based on, or related to, shares of the Company's common stock may be granted from shares authorized but unissued or shares previously issued and reacquired by the Company. The maximum number of shares of common stock approved by the Company’s shareholders to be issued under the Plan was increased from six million to nine million shares during fiscal 2014. Awards may be granted to officers, employees, directors, consultants, advisors, and independent contractors of the Company or its subsidiaries. In the event of a change in control (as defined in the Plan), the vesting of awards may be accelerated. The Plan, aspects of which are more fully described below, prohibits further awards from being issued under prior plans. The Company incurred total share-based compensation expenses of $0.9 million and $1.1 million for the three month periods ended February 1, 2015 and February 2, 2014, respectively. No share-based compensation cost was capitalized as part of an asset and no related income tax benefits were recorded during the fiscal years presented.

Stock Options

Option awards generally vest in one to four years, and have a ten-year contractual term. All incentive and non-qualified stock option grants have an exercise price no less than the market value of the underlying common stock on the date of grant. The grant date fair values of options are based on closing prices of the Company’s common stock on the dates of grant using the Black-Scholes option pricing model. Expected volatility is based on the historical volatility of the Company's stock. The Company uses historical option exercise behavior and employee termination data to estimate expected term, which represents the period of time that the options granted are expected to remain outstanding. The risk-free rate of return for the estimated term of the option is based on the U.S. Treasury yield curve in effect at the date of grant.

The weighted-average inputs and risk-free rate of return ranges used to calculate the grant date fair value of options issued during the three month periods ended February 1, 2015 and February 2, 2014, are presented in the following table.

	Three Months Ended
	February 1, 2015			February 2, 2014
Volatility		55.1	%		61.1	%
Risk free rate of return		1.6	%		1.4	%
Dividend yield		0.0	%		0.0	%
Expected term	4.7 years			4.6 years

Information on outstanding and exercisable option awards as of February 1, 2015, is presented below.

Options	Shares		WeightedAverageExercise Price		WeightedAverageRemainingContractual Life	AggregateIntrinsic Value
Outstanding at February 1, 2015		3,821,006	$	7.14	6.3 years	$	8,298
Exercisable at February 1, 2015		2,527,303	$	6.90	5.2 years	$	7,053

There were 302,000 share options granted during the three month period ended February 1, 2015, with a weighted-average grant date fair value of $3.88 per share, and there were 612,500 share options granted during the three month period ended February 2, 2014, with a weighted-average grant date fair value of $4.45 per share. As of February 1, 2015, the total unrecognized compensation cost related to unvested option awards was approximately $4.4 million. That cost is expected to be recognized over a weighted-average amortization period of 2.5 years.

Restricted Stock

The Company periodically grants restricted stock awards. The restrictions on these awards typically lapse over a service period of one to four years. There were 111,334 restricted stock awards issued during the three month period ended February 1, 2015, with a weighted-average grant date fair value of $8.23 per share, and there were 111,667 restricted stock awards issued during the three month period ended February 2, 2014, with a weighted-average grant date fair value of $8.86 per share. As of February 1, 2015, the total compensation cost not yet recognized related to unvested restricted stock awards was approximately $1.5 million. That cost is expected to be recognized over a weighted-average amortization period of 2.2 years. As of February 1, 2015, there were 234,026 shares of restricted stock outstanding.

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EARNINGS PER SHARE

3 Months Ended

Feb. 01, 2015

EARNINGS PER SHARE [Abstract]

EARNINGS PER SHARE

NOTE 9 - EARNINGS PER SHARE

The calculation of basic and diluted earnings per share is presented below.

	Three Months Ended
	February 1, 2015		February 2, 2014
Net income attributable to Photronics, Inc. shareholders	$	3,837	$	1,993
Effect of dilutive securities		-		-
Earnings for diluted earnings per share	$	3,837	$	1,993
Weighted-average common shares computations:
Weighted-average common shares used for basic earnings per share		66,066		61,200
Effect of dilutive securities:
Share-based payment awards		954		936
Potentially dilutive common shares		954		936
Weighted-average common shares used for diluted earnings per share		67,020		62,136
Basic earnings per share	$	0.06	$	0.03
Diluted earnings per share	$	0.06	$	0.03

The table below shows the outstanding weighted-average share-based payment awards that were excluded from the calculation of diluted earnings per share because their exercise price exceeded the average market value of the common shares for the period or, under application of the treasury stock method, they were otherwise determined to be anti-dilutive. The table also shows convertible notes that, if converted, would have been anti-dilutive.

	Three Months Ended
	February 1, 2015		February 2, 2014
Convertible notes		11,085		15,423
Share-based payment awards		1,587		2,158
Total potentially dilutive shares excluded		12,672		17,581

In the second quarter of fiscal year 2015, the Company awarded approximately 0.3 million share-based payment awards to its employees.

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BASIS OF FINANCIAL STATEMENT PRESENTATION (Details)	3 Months Ended
	Feb. 01, 2015 Facility
BASIS OF FINANCIAL STATEMENT PRESENTATION [Abstract]
Effective date of acquisition	Apr. 04, 2014
Ownership percentage in PDMC (in hundredths)	50.01%
Manufacturing Facilities By Geographical Region [Line Items]
Number of manufacturing facilities	9
DNP [Member]
Manufacturing Facilities By Geographical Region [Line Items]
Ownership percentage of noncontrolling interests (in hundredths)	49.99%
Europe [Member]
Manufacturing Facilities By Geographical Region [Line Items]
Number of manufacturing facilities	2
Taiwan [Member]
Manufacturing Facilities By Geographical Region [Line Items]
Number of manufacturing facilities	3
Korea [Member]
Manufacturing Facilities By Geographical Region [Line Items]
Number of manufacturing facilities	1
United States [Member]
Manufacturing Facilities By Geographical Region [Line Items]
Number of manufacturing facilities	3

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RECENT ACCOUNTING PRONOUNCEMENTS

3 Months Ended

Feb. 01, 2015

RECENT ACCOUNTING PRONOUNCEMENTS [Abstract]

RECENT ACCOUNTING PRONOUNCEMENTS

NOTE 14 - RECENT ACCOUNTING PRONOUNCEMENTS

In May 2014 the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2014-09 – Revenue from Contracts with Customers, which will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of this ASU is that revenue should be recognized for the amount of consideration expected to be received for promised goods or services transferred to customers. This ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments, and assets recognized for costs incurred to obtain or fulfill a contract. This ASU will be effective for the Company in its first quarter of fiscal 2018. Early adoption is not permitted. The ASU allows for either full retrospective or modified retrospective adoption. The Company is evaluating the transition method that will be elected and the potential effects of the adoption of this ASU on its financial statements.

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CHANGES IN EQUITY (Tables)

3 Months Ended

Feb. 01, 2015

CHANGES IN EQUITY [Abstract]

Consolidated changes in equity

The following tables set forth the Company's consolidated changes in equity for the three months ended February 1, 2015 and February 2, 2014:

	Three Months Ended February 1, 2015
	Photronics, Inc. Shareholders
	Common Stock
	Shares		Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income			Non- conrolling Interests			Total Equity
Balance at November 2, 2014		65,930	$	659	$	520,182	$	85,435	$	21,774		$	111,444		$	739,494
Net income		-		-		-		3,837		-			3,305			7,142
Other comprehensive loss		-		-		-		-		(16,179	)		(3,863	)		(20,042
Sale of common stock through employee stock option and purchase plans		166		2		526		-		-			-			528
Restricted stock awards vesting and expense		113		1		272		-		-			-			273
Share-based compensation expense		-		-		600		-		-			50			650
Balance at February 1, 2015		66,209	$	662	$	521,580	$	89,272	$	5,595		$	110,936		$	728,045

	Three Months Ended February 2, 2014
	Photronics, Inc. Shareholders
	Common Stock
	Shares		Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income			Non- conrolling Interests			Total Equity
Balance at November 3, 2013		61,083	$	611	$	498,861	$	59,439	$	26,403		$	2,517		$	587,831
Net income		-		-		-		1,993		-			48			2,041
Other comprehensive loss		-		-		-		-		(8,412	)		(80	)		(8,492	)
Sale of common stock through employee stock option and purchase plans		130		1		408		-		-			-			409
Restricted stock awards vesting and expense		112		1		208		-		-			-			209
Share-based compensation expense		-		-		896		-		-			-			896
Redemption of common stock by subsidiary		-		-		36		-		(11	)		(1,715	)		(1,690	)
Balance at February 2, 2014		61,325	$	613	$	500,409	$	61,432	$	17,980		$	770		$	581,204

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SHARE-BASED COMPENSATION (Details) (USD $)	3 Months Ended
	Feb. 01, 2015	Feb. 02, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Date and terms of plan modification	The Company has a share-based compensation plan ("Plan"), under which options, restricted stock, restricted stock units, stock appreciation rights, performance stock, performance units, and other awards based on, or related to, shares of the Company's common stock may be granted from shares authorized but unissued or shares previously issued and reacquired by the Company.
Maximum number of shares of common stock that may be issued (in shares)	9,000,000	6,000,000
Share-based compensation costs incurred	$ 900,000	$ 1,100,000
Share-based compensation cost capitalized	0	0
Income tax benefits realized from stock option exercises	0	0
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Contractual term	10 years
Period for recognition of compensation cost not yet recognized	2 years 6 months
Weighted-average inputs and risk-free rate of return ranges used to calculate the grant date fair value of options [Abstract]
Volatility (in hundredths)	55.10%	61.10%
Risk free rate of return (in hundredths)	1.60%	1.40%
Dividend yield (in hundredths)	0.00%	0.00%
Expected term	4 years 8 months 12 days	4 years 7 months 6 days
Shares [Abstract]
Outstanding at end of period (in shares)	3,821,006
Exercisable at end of period (in shares)	2,527,303
Share options granted (in shares)	302,000	612,500
Weighted Average Exercise Price [Abstract]
Weighted average exercise price, Outstanding at end of period (in dollar per share)	$ 7.14
Weighted average exercise price, Exercisable at end of period (in dollar per share)	$ 6.90
Stock options, additional disclosures [Abstract]
Weighted average remaining contractual life, Outstanding at end of period	6 years 3 months 18 days
Weighted average remaining contractual life, Exercisable at end of period	5 years 2 months 12 days
Aggregate intrinsic value, Outstanding at end of period	8,298,000
Aggregate intrinsic value, Exercisable at end of period	7,053,000
Weighted-average grant date fair value of options granted (in dollar per share)	$ 3.88	$ 4.45
Unrecognized compensation cost related to unvested option awards	4,400,000
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Period for recognition of compensation cost not yet recognized	2 years 2 months 12 days
Nonvested shares [Abstract]
Restricted stock awards granted (in shares)	111,334	111,667
Weighted average grant date fair value of restricted stock awards (in dollar per share)	$ 8.23	$ 8.86
Compensation cost not yet recognized related to unvested restricted stock awards	$ 1,500,000
Number of shares of restricted stock outstanding (in shares)	234,026
Minimum [Member] | Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	1 year
Minimum [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	1 year
Maximum [Member] | Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	4 years
Maximum [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	4 years

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Condensed Consolidated Statements of Comprehensive Income (unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Feb. 01, 2015	Feb. 02, 2014
Condensed Consolidated Statements of Comprehensive Income (unaudited) [Abstract]
Net income	$ 7,142	$ 2,041
Other comprehensive income (loss), net of tax of $0:
Foreign currency translation adjustments	(20,074)	(8,524)
Amortization of cash flow hedge	32	32
Total other comprehensive loss, net of tax	(20,042)	(8,492)
Comprehensive loss	(12,900)	(6,451)
Less: comprehensive loss attributable to noncontrolling interests	558	32
Comprehensive loss attributable to Photronics, Inc. shareholders	$ (12,342)	$ (6,419)

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CHANGES IN EQUITY

3 Months Ended

Feb. 01, 2015

CHANGES IN EQUITY [Abstract]

CHANGES IN EQUITY

NOTE 3 - CHANGES IN EQUITY

The following tables set forth the Company's consolidated changes in equity for the three months ended February 1, 2015 and February 2, 2014:

	Three Months Ended February 1, 2015
	Photronics, Inc. Shareholders
	Common Stock
	Shares		Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income			Non- conrolling Interests			Total Equity
Balance at November 2, 2014		65,930	$	659	$	520,182	$	85,435	$	21,774		$	111,444		$	739,494
Net income		-		-		-		3,837		-			3,305			7,142
Other comprehensive loss		-		-		-		-		(16,179	)		(3,863	)		(20,042
Sale of common stock through employee stock option and purchase plans		166		2		526		-		-			-			528
Restricted stock awards vesting and expense		113		1		272		-		-			-			273
Share-based compensation expense		-		-		600		-		-			50			650
Balance at February 1, 2015		66,209	$	662	$	521,580	$	89,272	$	5,595		$	110,936		$	728,045

	Three Months Ended February 2, 2014
	Photronics, Inc. Shareholders
	Common Stock
	Shares		Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income			Non- conrolling Interests			Total Equity
Balance at November 3, 2013		61,083	$	611	$	498,861	$	59,439	$	26,403		$	2,517		$	587,831
Net income		-		-		-		1,993		-			48			2,041
Other comprehensive loss		-		-		-		-		(8,412	)		(80	)		(8,492	)
Sale of common stock through employee stock option and purchase plans		130		1		408		-		-			-			409
Restricted stock awards vesting and expense		112		1		208		-		-			-			209
Share-based compensation expense		-		-		896		-		-			-			896
Redemption of common stock by subsidiary		-		-		36		-		(11	)		(1,715	)		(1,690	)
Balance at February 2, 2014		61,325	$	613	$	500,409	$	61,432	$	17,980		$	770		$	581,204

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PROPERTY, PLANT AND EQUIPMENT (Tables)

3 Months Ended

Feb. 01, 2015

PROPERTY, PLANT AND EQUIPMENT [Abstract]

Property, plant and equipment

Property, plant and equipment consists of the following:

	February 1, 2015		November 2, 2014
Land	$	8,344	$	8,598
Buildings and improvements		122,839		124,787
Machinery and equipment		1,353,457		1,367,691
Leasehold improvements		19,476		20,165
Furniture, fixtures and office equipment		12,784		12,086
Construction in progress		131,225		81,351
		1,648,125		1,614,678
Less accumulated depreciation and amortization		1,055,105		1,064,609
	$	593,020	$	550,069

Equipment under capital leases included in property, plant and equipment

Equipment under capital leases are included in above property, plant and equipment as follows:

	February 1, 2015		November 2, 2014
Machinery and equipment	$	56,245	$	56,245
Less accumulated amortization		11,836		10,430
	$	44,409	$	45,815

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PROPERTY, PLANT AND EQUIPMENT (Details) (USD $)	3 Months Ended
	Feb. 01, 2015	Feb. 02, 2014	Nov. 02, 2014
Property, plant and equipment [Abstract]
Property, plant and equipment, gross	$ 1,648,125,000		$ 1,614,678,000
Less accumulated depreciation and amortization	1,055,105,000		1,064,609,000
Property, plant and equipment, net	593,020,000		550,069,000
Equipment under capital leases included in property, plant and equipment [Abstract]
Capital leased assets, gross	56,245,000		56,245,000
Less accumulated amortization	11,836,000		10,430,000
Capital leased assets, net	44,409,000		45,815,000
Depreciation and amortization expense	19,200,000	16,000,000
Land [Member]
Property, plant and equipment [Abstract]
Property, plant and equipment, gross	8,344,000		8,598,000
Buildings and improvements [Member]
Property, plant and equipment [Abstract]
Property, plant and equipment, gross	122,839,000		124,787,000
Machinery and equipment [Member]
Property, plant and equipment [Abstract]
Property, plant and equipment, gross	1,353,457,000		1,367,691,000
Leasehold improvements [Member]
Property, plant and equipment [Abstract]
Property, plant and equipment, gross	19,476,000		20,165,000
Furniture, fixtures and office equipment [Member]
Property, plant and equipment [Abstract]
Property, plant and equipment, gross	12,784,000		12,086,000
Construction in progress [Member]
Property, plant and equipment [Abstract]
Property, plant and equipment, gross	$ 131,225,000		$ 81,351,000

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Feb. 01, 2015

COMMITMENTS AND CONTINGENCIES [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 13 - COMMITMENTS AND CONTINGENCIES

As of February 1, 2015, the Company had commitments outstanding for capital equipment expenditures of approximately $16 million.

The Company is subject to various claims that arise in the ordinary course of business. The Company believes such claims, individually or in the aggregate, will not have a material effect on its condensed consolidated financial statements.