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)  
May 26, 2021

PHOTRONICS, INC.

(Exact name of registrant as specified in its charter)

Connecticut	0-15451	06-0854886
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

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

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

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

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

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

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

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

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

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

Emerging growth company ☐

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
COMMON STOCK, $0.01 par value per share	PLAB	NASDAQ Global Select Market
PREFERRED STOCK PURCHASE RIGHTS	N/A	N/A

Item 2.02. Results of Operations and Financial Condition.

On May 26, 2021, Photronics, Inc. issued a press release reporting second quarter fiscal 2021 results.

A copy of the press release is furnished as Exhibit 99.1 to this report.  The information contained in this Item 2.02 and the attached Exhibits 99.1, 99.2, 99.3, 99.4, and 99.5, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and shall not be incorporated by reference in any filing under the Securities Act of 1933 except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d)	Exhibits
	99.1	Press Release dated May 26, 2021.
	99.2	Condensed Consolidated Statements of Income.
	99.3	Condensed Consolidated Balance Sheets.
	99.4	Condensed Consolidated Statements of Cash Flows.
	99.5	Photronics Q2 2021 Financial Results Conference Call May 26, 2021 slides.

SIGNATURE

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

	PHOTRONICS, INC. (Registrant)
	By:	/s/ Richelle E. Burr
	Name:		Richelle E. Burr
	Title:		Executive Vice President,
			Chief Administrative Officer,
			General Counsel and Secretary
Date:  May 26, 2021

EX-99.1

Exhibit 99.1

Press Release For Further Information: R. Troy Dewar, CFA Vice President, Investor Relations (203) 740-5610 tdewar@photronics.com

Photronics Reports Second Quarter Fiscal 2021 Results

• Revenue was a record $159.8 million, up 5% sequentially and 12% year-over-year

• Net income attributable to Photronics, Inc. shareholders was $10.5 million, or $0.17 per diluted share

• Cash provided by operating activities was $31.9 million, capex was $56.0 million, share repurchases were $10.0 million, and ending cash balance was $256.0 million

• Third quarter 2021 guidance: revenue between $162 and $172 million with diluted EPS between $0.19 and $0.25

BROOKFIELD, Conn. May 26, 2021 (GLOBE NEWSWIRE) — Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in photomask technologies and solutions, today reported financial results for its fiscal 2021 second quarter ended May 2, 2021.

Second quarter revenue was $159.8 million, up 5% compared with the previous quarter and 12% compared with the same quarter last year. Integrated circuit (IC) revenue was $112.0 million, up 7% sequentially and 16% compared with the second quarter of last year. Flat panel display (FPD) revenue was $47.8 million, up 1% compared with last quarter and 4% compared with the same period last year.

Net income attributable to Photronics, Inc. shareholders was $10.5 million, or $0.17 per diluted share, compared with $8.0 million, or $0.13 per diluted share, for the first quarter of 2021 and $6.3 million, or $0.10 per diluted share, for the second quarter of 2020.

"We achieved record revenue in the quarter, with growth in both IC and FPD, demonstrating the strength and resiliency of our design-driven demand model, supported by world-class capabilities and unmatched global presence,” said Peter Kirlin, chief executive officer. “Our customers are responding to growing demand for their products, as they innovate to meet more advanced specifications. This creates an environment with strong design activity, driving mask demand across our business. As the largest merchant photomask manufacturer, we are well positioned to benefit from these trends. This ongoing market strength gives us confidence in meeting our long-term financial objectives as well as support for continued investment to expand capacity in our operations.  Gross and operating margins expanded to 24.6 % and 13.0 %, respectively; and we are solidly executing our 2021 plan to outperform our market and increase operating profit by 23%.”

Third Quarter 2021 Guidance

For the third quarter of 2021, Photronics expects revenue to be between $162 million and $172 million, and net income attributable to Photronics, Inc. shareholders to be between $0.19 and $0.25 per diluted share.

Conference Call

A conference call to discuss these results is scheduled for 8:30 a.m. Eastern time on Wednesday, May 26, 2021. The call can be accessed by logging onto Photronics' website at www.photronics.com.  The live dial-in number is (877) 377-7095 or (408) 774-4601 outside of the United States and Canada. The call will be archived on Photronics’ website.

About Photronics

Photronics is a leading worldwide manufacturer of integrated circuit (IC) and flat panel display (FPD) photomasks. High precision quartz plates that contain microscopic images of electronic circuits, photomasks are a key element in the IC and FPD manufacturing process. Founded in 1969, Photronics has been a trusted photomask supplier for over 50 years. As of October 31, 2020, the company had 1,728 employees. The company operates 11 strategically located manufacturing facilities in Asia, Europe, and North America. Additional information on the company can be accessed at www.photronics.com.

Forward-Looking Statements

Certain statements in this press release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements made by or on behalf of the company and its subsidiaries. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of Photronics to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans,” “may increase,” “may fluctuate,” “will,” “should,” “would,” “may” and “could” or similar words or expressions are generally forward-looking in nature and not historical facts. Any statements that refer to outlook, expectations or other characterizations of future events, circumstances or results are also forward-looking statements. Important risks, assumptions and other important factors that could cause future results to differ materially from those expressed in the forward-looking statements are specified in Photronics’ Annual and Quarterly filings with the Securities and Exchange Commission under headings such as “Forward-Looking Statements”, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in other filings and furnishings made by Photronics with the Securities and Exchange Commission from time to time. These risks and uncertainties include, but are not limited to, the current pandemic and future recurrences and other developments with respect thereto, governmental responses to the pandemic and related matters, changes in end markets resulting therefrom, changes in investment, tax, trade, exchange and other laws and regulations, compliance with local, State and Federal laws, rules and regulations including, but not limited to, import and export controls, tariffs and penalties, fines and violations related thereto, as well as economic, competitive, legal, governmental, political, monetary and fiscal policy, and technological factors and decisions we may make in the future regarding our business, capital structure and other matters. Photronics undertakes no obligation to release publicly any revisions to any forward-looking statements or, except as required to be disclosed in filings or furnishings with the Securities and Exchange Commission, to report events or to report the occurrence of unanticipated events. There is no assurance that Photronics’ expectations will be realized.

EX-99.2

Exhibit 99.2

PHOTRONICS, INC.

Condensed Consolidated Statements of Income

(in thousands, except per share amounts)

(Unaudited)

	Three Months Ended								Six Months Ended
	May 2, 2021			January 31, 2021		May 3, 2020			May 2, 2021			May 3, 2020
Revenue	$	159,763		$	152,067	$	142,774		$	311,830		$	302,510
Cost of goods sold		120,514			121,538		112,341			242,052			237,475
Gross profit		39,249			30,529		30,433			69,778			65,035
Operating Expenses:
Selling, general and administrative		14,067			14,053		13,267			28,120			27,486
Research and development		4,375			4,710		4,462			9,085			8,541
Total Operating Expenses		18,442			18,763		17,729			37,205			36,027
Operating income		20,807			11,766		12,704			32,573			29,008
Other income (expense), net		(772	)		680		(951	)		(92	)		2,745
Income before income tax provision		20,035			12,446		11,753			32,481			31,753
Income tax provision		3,714			2,937		3,781			6,651			12,853
Net income		16,321			9,509		7,972			25,830			18,900
Net income attributable to noncontrolling interests		5,795			1,473		1,688			7,268			2,316
Net income attributable to Photronics, Inc. shareholders	$	10,526		$	8,036	$	6,284		$	18,562		$	16,584
Earnings per share:
Basic	$	0.17		$	0.13	$	0.10		$	0.30		$	0.25
Diluted	$	0.17		$	0.13	$	0.10		$	0.30		$	0.25
Weighted-average number of common shares outstanding:
Basic		62,054			62,475		64,937			62,265			65,246
Diluted		62,568			63,005		65,417			62,786			65,933

EX-99.3

Exhibit 99.3

PHOTRONICS, INC.

Condensed Consolidated Balance Sheets

(in thousands)

(Unaudited)

	May 2, 2021		October 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	255,965	$	278,665
Accounts receivable		143,923		134,470
Inventories		56,384		57,269
Other current assets		39,336		29,735
Total current assets		495,608		500,139
Property, plant and equipment, net		717,426		631,475
Intangible assets, net		1,356		3,437
Other assets		51,599		53,131
Total assets	$	1,265,989	$	1,188,182
Liabilities and Equity
Current liabilities:
Debt	$	25,658	$	13,678
Accounts payable and accrued liabilities		133,629		129,261
Total current liabilities		159,287		142,939
Long-term debt		88,444		54,980
Other liabilities		27,441		27,997
Photronics, Inc. shareholders' equity		821,392		804,962
Noncontrolling interests		169,425		157,304
Total equity		990,817		962,266
Total liabilities and equity	$	1,265,989	$	1,188,182

EX-99.4

Exhibit 99.4

PHOTRONICS,  INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	Six Months Ended
	May 2, 2021			May 3, 2020
Cash flows from operating activities:
Net income	$	25,830		$	18,900
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		47,121			47,896
Share-based compensation		2,723			2,576
Changes in operating assets, liabilities and other		(17,455	)		(8,049	)
Net cash provided by operating activities		58,219			61,323
Cash flows from investing activities:
Purchases of property, plant and equipment		(73,516	)		(30,127	)
Government incentives		5,775			5,260
Other		(157	)		(139	)
Net cash used in investing activities		(67,898	)		(25,006	)
Cash flows from financing activities:
Proceeds from long-term debt		12,439			1,140
Contribution from noncontrolling interest		-			7,600
Purchase of treasury stock		(23,250	)		(16,894	)
Repayments of debt		(8,636	)		(389	)
Proceeds from share-based arrangements		1,180			3,423
Other		(371	)		(251	)
Net cash used in financing activities		(18,638	)		(5,371	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		5,686			475
Net (decrease) increase in cash, cash equivalents, and restrcited cash		(22,631	)		31,421
Cash, cash equivalents, and restricted cash, beginning of period		281,602			209,291
Cash, cash equivalents, and restricted cash, end of period	$	258,971		$	240,712

EX-99.5

Exhibit 99.5

 Q2 2021 Financial Results Conference CallMay 26, 2021  Photronics, Inc. 

 Safe Harbor Statement  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”, “plan”, “project”, “in our view” 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.  5/26/2021  2 

 Q2 2021 Summary  Revenue was a record $159.8M, up 5% Q/Q and 12% Y/YGrowth achieved in both IC and FPD on strong design-driven demandRevenue to China was up 16% Q/Q and 23% Y/YNet income attributable to Photronics, Inc. shareholders of $10.5M ($0.17/share)Cash balance $256M$32M generated from operating activity$56M invested in capex$10M returned to investors through share repurchasesNext phase of FPD capacity investment on track for tool delivery in 2021Investing to expand mainstream IC capacity  5/26/2021  3  Strategic investments driving long-term, profitable growth 

 Income Statement Summary  $M (except EPS)  Q221  Q121  Q/Q  Q220  Y/Y  Revenue  $ 159.8  $ 152.1  5%  $ 142.8  12%  Gross Profit  $ 39.2  $ 30.5  29%  $ 30.4  29%  Gross Margin  24.6%  20.1%  450 bps  21.3%  330 bps  Operating Income  $ 20.8  $ 11.8  77%  $ 12.7  64%  Operating Margin  13.0%  7.7%  530 bps  8.9%  410 bps  Other income (expense)  ($ 0.8)  $ 0.7  ($ 1.5)  ($ 1.0)  $ 0.2  Income tax provision  $ 3.7  $ 2.9  $ 0.8  $ 3.8  ($ 0.1)  Minority interest  $ 5.8  $ 1.5  $ 4.3  $ 1.7  $ 4.1  Net Income*  $ 10.5  $ 8.0  31%  $ 6.3  68%  Diluted EPS*  $ 0.17  $ 0.13  $ 0.04  $ 0.10  $ 0.07  Days in quarter  91  92  (1)  91  -  Margin improved with higher revenue and better mainstream IC ASPIncremental margins >110% Q/QOther income / (expense) primarily due to FX gain / (loss); Q221 includes China interest expense subsidyMinority interest from IC JVs in Taiwan and China  5/26/2021  4  *Net income attributable to Photronics, Inc. shareholders 

 $M  Q221  Q121  Q/Q  Q220  Y/Y  High-End*  $ 41.3  $ 36.8  12%  $ 38.3  8%  Mainstream  $ 70.7  $ 68.2  4%  $ 58.6  21%  Total  $ 112.0  $ 105.0  7%  $ 96.8  16%  IC Photomask Revenue  5/26/2021  5  High-end growth driven by logic recovery, especially in Taiwan & ChinaMainstream grew on positive demand trends and higher ASPChina revenue +23% Q/Q and +53% Y/Y; represents 28% of IC revenueOutlookContinued strength from remote work and educationMainstream demand strong, with positive pricingContinued macro risk from trade policies and shelter-in-place mandates  *28nm and smaller  Total may differ due to rounding 

 FPD Photomask Revenue  5/26/2021  6  High-end improved on strong LTPS & AMOLED demand for mobile displaysMainstream down as capacity was sold out to meet high-end demandChina revenue +8% Q/Q and -1% Y/Y; represents 53% of FPD revenueOutlookDynamic market environmentMobile demand strength expected to continueCapacity expansions coming with new tool installationsTechnology development drives demand for higher-value masks  *≥G10.5, AMOLED and LTPS  $M  Q221  Q121  Q/Q  Q220  Y/Y  High-End*  $ 39.4  $ 34.6  14%  $ 31.8  24%  Mainstream  $ 8.4  $ 12.5  (33%)  $ 14.1  (41%)  Total  $ 47.8  $ 47.1  1%  $ 45.9  4%  Total may differ due to rounding 

 Select Financial Data  $M  Q121  Q121  Q220  Cash  $ 256  $ 279  $ 238  Debt  $ 114  $ 98  $ 53  Net Cash*  $ 142  $ 180  $ 184  Operating Cash Flow  $ 32  $ 26  $ 31  Capital Expenditures  $ 56  $ 18  $ 16  Government Incentives for Capital Equipment  $ 5  $ 0.4  $ 3  Share repurchase  $ 10  $ 13  $ 6  Debt is US equipment lease and local China loansExpect 2021 capex to be ~$120MCompleting initial China IC investmentNext phase of FPD investmentMainstream IC capacity expansionTotal share repurchases of $41M under current $100M plan (Sep 2020)Balance sheet able to fund investments, share repurchases, and strategic M&A opportunities  5/26/2021  7  *Net cash defined as cash and cash equivalents less long-term borrowings (including current portion), as reported in accordance with GAAP 

 Q321 Guidance   Revenue ($M)  $162 - $172  Operating Margin  13% - 16%  Taxes ($M)  $4 - $6  EPS  $0.19 - $0.25  Diluted Shares (M)  ~62  Positive industry demand trendsRemote work and learningMade in China 2025Advanced display technologiesOutlook clouded by geopolitical uncertaintyShelter-in-place mandatesUS/China trade policiesWe remain focused on expanding margins and improving cash flows  5/26/2021  8 

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

 Appendix   

 Total Revenue  5/26/2021  11      IC  FPD  Total may differ due to rounding 

 IC Photomask Revenue  5/26/2021  12      Mainstream  High-End  High-End: 28nm and smaller; total may differ due to rounding 

 FPD Photomask Revenue  5/26/2021  13      Mainstream  High-End  High-End: ≥G10.5, AMOLED and LTPS; total may differ due to rounding 

XML

Document and Entity Information	May 26, 2021
Entity Listings [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 26, 2021
Entity Registrant Name	PHOTRONICS, INC.
Entity Incorporation, State or Country Code	CT
Entity File Number	000-15451
Entity Tax Identification Number	06-0854886
Entity Address, Address Line One	15 Secor Road
Entity Address, City or Town	Brookfield
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06804
City Area Code	203
Local Phone Number	775-9000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0000810136
Common Stock [Member]
Entity Listings [Line Items]
Title of 12(b) Security	COMMON STOCK, $0.01 par value per share
Trading Symbol	PLAB
Security Exchange Name	NASDAQ
PREFERRED STOCK PURCHASE RIGHTS [Member]
Entity Listings [Line Items]
Title of 12(b) Security	PREFERRED STOCK PURCHASE RIGHTS
Trading Symbol	N/A