8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

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

Date of report (Date of earliest event reported) January 16, 2019

PHOTRONICS, INC.

 (Exact name of registrant as specified in its charter)

Connecticut	0-15451	06-0854886
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

15 Secor Road, Brookfield, CT	06804
(Address of Principal Executive Offices)	(Zip Code)

Registrant's Telephone Number, including area code (203) 775-9000

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

□ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

□ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

□ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

□ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2)

Emerging growth company          □

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □

Item 7.01 Regulation FD

On January 16, 2019, Photronics, Inc. (the “Company”) will present at the 21^st Annual Needham Growth Conference. The presentation to be used during the event is attached as Exhibit 99.1 to this Form 8-K. The presentation will also be available via webcast. Interested parties may register for the webcast through the Investors section of the Company’s website at www.photronics.com.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

99.1 Presentation January 16, 2019.

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 hereunto duly authorized.

PHOTRONICS, INC.

(Registrant)

DATE: January 16, 2019	BY	/s/ Richelle E. Burr
		Richelle E. Burr
		Vice President, General Counsel
PHOTRONICS, INC.

EXHIBIT INDEX

Exhibit Number	Description
99.1	Presentation January 16, 2019.

EX-99.1

Exhibit 99.1

 Photronics, Inc.Global Leader in the Merchant Photomask Industry  21st Annual Needham Growth ConferenceJanuary 16, 2019 

 Safe Harbor Statement  2  This presentation and some of our comments may contain projections or other forward-looking statements regarding future events, our future financial performance, and/or the future performance of the industry. These statements are predictions, and contain risks and uncertainties. Actual events or results may differ materially from those presented. These statements include words like “anticipate”, “believe”, “estimate”, “expect”, “forecast”, “may”, “should”, “plan”, “project” or the negative thereto. We cannot guarantee the accuracy of any forecasts or estimates, and we are not obligated to update any forward-looking statements if our expectations change. If you would like more information on the risks involved in forward-looking statements, please see the documents we file from time to time with the Securities and Exchange Commission, specifically our most recent Form 10K and Form 10Q.Non-GAAP Financial MeasuresThis presentation and some of our comments may reference non-GAAP financial measures. These non-GAAP financial measures exclude certain income or expense items, and are consistent with another way management internally analyzes our results of operations. Non-GAAP information should be considered to be a supplement to, and not a substitute for, financial statements prepared in accordance with GAAP. Please see the “Reconciliation of GAAP to Non-GAAP Financial Information” in this presentation. 

 Global leader in merchant photomask industryDelivering growth by leveraging core competencies: Operational Excellence, Low Cost Producer, Technology Leadership, Customer IntimacyInvesting aggressively to exploit secular growth opportunitiesChina industry expansion – Made in China 2025Technology inflection from LCD to AMOLEDExplosion of G10.5+ panel capacityOn track for 2020 target: $630M revenue & $0.80 EPSStrategic investments bring top-line growthOperating leverage creates margin expansionShare repurchase reverses dilutionAdditional upside from potential M&A  A Compelling Investment Thesis  3 

 Largest merchant photomask manufacturerUnmatched global footprintInvesting to exploit market disruptions with reciprocal customer commitments Strong balance sheet to fund growth  Photronics at a Glance  4 

 Photomasks are Critical to Electronic Manufacturing  5  ComponentDesign  End User  Manufacturing Process  Photomask 

 Cost controlSupply chain optimization  Low Cost Producer  Flexible deliveryHigh yields  Operational Excellence  Trusted partnerWafer yield enhancement  Customer Intimacy  Process know-howAdvanced PoR  Technology Leader  Core Competencies Underpin Sustainable Growth  6 

 Repositioned the CompanyChinaTotal TAM ~$700M by 2022Region with strongest growth potentialSupported by new manufacturing facilities in 2019IC CaptiveApproximately $2.4B TAMWe are seen as trusted partnerCommitments strengthen sustainabilityHigh-end revenue growthHigh value and high growthSupports China & captive initiatives  Delivering on Growth Commitments  7  +131%  +85%  +42% 

 Technology as a Tool to Support Business Growth  8  High-End39%  Mainstream61%  High-End64%  Mainstream36%  Growth Investment Cycle 

 Repositioning the companyImproving high-end revenue  China investmentsFPD technology inflections  Strategic photomask partnershipsAdjacent market M&A  Driving Sustainable, Profitable Growth  9  Short term (6-12 months)  Medium term (12-36 months)  Long term (36+ months)  Implemented  Ongoing  Future 

 We already have growing business in China19% of total revenue in 201813% of IC revenue39% of FPD revenueGrowing strong since 2015IC +51% CAGRFPD +67% CAGRManufacturing presence in China aims to accelerate growthCustomer contracts will help quickly ramp facilitiesInvestment incentives reduce risk and improve returnsIC JV enables us to compete more effectively  Developing and Growing China Business  10  +57% CAGR 

   IC  FPD  Location  Xiamen  Hefei  Investment Amount  $160M  $160M  Cleanroom Size  ~2,500 m2  ~4,500 m2  Ownership Structure  Majority-owned (50.01%) JV  Wholly-owned  Technology  High-end, mainstream, logic, memory  Up to G10.5+, AMOLED  Production Start  First half of 2019  First half of 2019  Incremental Revenue  $150M (total for both operations)    Investing in China Operations  11  PLAB well positioned for these investmentsGlobal merchant market and technology leaderStrong footprint in AsiaBalance sheet to support investment  Customer commitments totaling ~$300M over next three yearsEnables Hefei facility to operate profitablyEnables Xiamen facility to achieve breakeven 

 Reducing Risk of China Investment  12 

 Mobile devices moving from LCD to AMOLEDSuperior visual characteristicsLower power consumptionEnables flexible formatPreferred for VR/AR devicesIncreases mask complexityMore mask layers per setTighter specs on each layerExtending technology leadership with P-800 in KoreaOnly firm with this advanced mask writerProduces highest resolution AMOLED masksCompetitive advantage vs. all merchants and captives  Leveraging Technology Leadership for Mobile Display AMOLED Adoption  13  Source: Internal Estimates  AMOLED remains preferred technology for mobile applications 

     65”    65”    65”    65”    65”    65”    65”    65”  95%  G10.5+  Improved Glass Efficiency for Ultra-Large Screen TV  14  2940 mm x 3370 mm  2200 mm x 2500 mm  1950 mm x 2250 mm  1500 mm x 1850 mm      75”    75”    75”    75”    75”    75”  94%      65”    65”    65”  64%      75”    75”  73%      65”    65”  88% 

 China represents fastest growing display region64 fabs in production, under construction or being plannedLargest display producer (Korea 2nd)Photomask opportunities in China are attractiveWide range of display technology, including AMOLED & G10.5+No merchant photomask producer with high-end experienceNo G10.5+ photomask producer  “Made in China 2025” Driving Growth in FPD Market  15  +17% CAGR  Source: Internal Estimates  G10.5+ CAGR +62% 

 64 China Display Fabs in Production by 2022  16  Image from https://commons.wikimedia.org/wiki/File:China-equirect.png        LCD (7)AMOLED (15)G10.5+ (7)                                                            Photronics LocationsFPD KoreaFPD HefeiFPD Taiwan                                                                      LCD (25)AMOLED (9)G10.5+ (1)      New (29)  Existing (35)     

 China represents fastest growing semiconductor regionGrowing domestic producersInvestments by multi-nationalsMore investment needed to meet national targets2022 forecast is 17%China government target is 40% by 2020, 70% by 2025Photomask opportunities in China are attractiveWide range of nodes in logic and memoryNo strong domestic merchant mask producer  “Made in China 2025” Driving Growth in IC Market  17 

 23 New China 12” IC Fabs  18  Image from https://commons.wikimedia.org/wiki/File:China-equirect.png                                                Photronics LocationsIC KoreaIC XiamenIC TaiwanIC Boise (not shown)      Logic (17)Memory (6)  Innotron (M)  Nexchip (L)  YMTC (M)  Samsung (M)  AOS (L)  Unigroup (L)  GF (L)  SMIC (L)  Intel (M)  SMIC (L)  Cansemi (L)  JHICC (M)  USC (L)  Silan (L)  Sien IC (L)  HidM (L)  AMS (L)  TSMC (L)  HH Group (L)  Unigroup (M)  SMIC (L)  SMIC (L)  HLIC (L) 

 Top line growth combined with continued focus on driving costs outDisciplined focus on investments to improve ROICMaintain strong balance sheet while returning cash to shareholdersLaunched two buy-back programs in FY18Financial stability through economic downturnFlexibility to invest in other growth opportunities (organic or M&A)  Strategic Priorities to Improve Shareholder Value  19 

 Powerful operating leverage: target 50%Strong operating cash flow generatorPositive free cash flow every fiscal year since 2009Solid balance sheet  Solid Financial Fundamentals  20 

 Key Success Factors“Made in China 2025” – new facilitiesFPD technology inflectionsRepositioning the companyNode migration (logic & memory)Growing business with captive producersIC JV’s in China and TaiwanStable mainstream businessCross-site collaboration to serve global customers  On Our Way to 2020 Target  21 

 Fund organic growthGeographic expansion into ChinaTechnical investments to maintain leadership positionExplore strategic M&APhotomask industry – IC & FPDAdjacencies to increase revenue diversificationDebt repaymentConverts mature in April 2019Established $75M loan agreements in ChinaShare repurchase Repurchased $23M of $45M net authorization in 2018Reduced outstanding shares by 2.6M  Clear Capital Deployment Priorities  22  *Net cash defined as cash and cash equivalents less long-term borrowings (including current portion) 

 Clear path to accelerate profitable growthPrudent stewardship of balance sheetFinancial model to grow income faster than revenueOn track to achieve financial targetsRevenue $630M & EPS $0.80 by 2020Operating margin > 15%Minimum $100M net cashImprove ROIC – no projects accepted below hurdle rate  Financial Summary  23 

 Global leader in merchant photomask industryDelivering growth by leveraging core competencies: Operational Excellence, Low Cost Producer, Technology Leadership, Customer IntimacyInvesting aggressively to exploit secular growth opportunitiesChina industry expansion – Made in China 2025Technology inflection from LCD to AMOLEDExplosion of G10.5+ panel capacityOn track for 2020 target: $630M revenue & $0.80 EPSStrategic investments bring top-line growthOperating leverage creates margin expansionShare repurchase reverses dilutionAdditional upside from potential M&A  A Compelling Investment Thesis  24 

 Thank you for your interest!  For Additional Information:R. Troy Dewar, CFAVice President, Investor Relations203.740.5610tdewar@photronics.com