Photronics Reports Fourth Quarter and Fiscal Year 2012 Results

  Photronics Reports Fourth Quarter and Fiscal Year 2012 Results

  *Quarterly sales of $104.2 million; exceeds revised guidance of $102 - $103
    million
  *Quarterly Non-GAAP diluted EPS of $0.07; exceeds revised guidance of
    $0.03- $0.04
  *Quarterly Non-GAAP net income of $4.1 million
  *Quarterly Non-GAAP EBITDA of $28 million
  *Working capital increases $21 million sequentially to $233 million
  *Net cash increases $22 million sequentially to $41 million

Business Wire

BROOKFIELD, Conn. -- December 04, 2012

Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in supplying innovative
imaging technology solutions for the global electronics industry, today
reported financial results for the fourth quarter and fiscal year ended
October 28, 2012.

“Fourth quarter revenues reflect decreased demand for both integrated circuit
(IC) and flat panel display (FPD) photomasks during a challenging global
economic and electronics industry environment,” stated Constantine ("Deno")
Macricostas, Photronics' chairman and chief executive officer. “A universal
softness in new designs for both IC and FPD components impacted demand for
photomasks this quarter. Despite lower revenues, non-GAAP diluted earnings per
share was $0.07, exceeding our revised forecast of $0.03 to $0.04 per share.
Also, we continued to strengthen our balance sheet with improvements in net
cash and working capital during the quarter. Looking at the full year, while
overall sales were down, a 16% increase in high-end IC photomasks demonstrates
the continued success of our strategy and strength of our technology. We
believe our technology and market position coupled with favorable long term
trends in electronic devices will provide substantial opportunities for
Photronics when the market rebounds.”

Sales for the fourth quarter of fiscal 2012 were $104.2 million, compared with
$122.2 million for the fourth quarter of fiscal year 2011. Sales of
semiconductor photomasks were $83.9 million, or 81% of revenues, during the
fourth quarter of fiscal 2012, and sales of flat panel display (FPD)
photomasks were $20.3 million, or 19% of revenues. For the fourth quarter of
fiscal 2012, GAAP net income attributable to Photronics, Inc. was $3.8
million, or $0.06 earnings per diluted share, compared with $9.3 million, or
$0.14 earnings per diluted share, for the fourth quarter of fiscal 2011.
Non-GAAP net income attributable to Photronics, Inc. for the fourth quarter of
2012, excluding consolidation and restructuring charges of $0.2 million, was
$4.1 million, or $0.07 earnings per diluted share. Non-GAAP net income
attributable to Photronics, Inc. for the fourth quarter of 2011, excluding
$0.2 million impact of warrants, was $9.1 million, or $0.14 earnings per
diluted share.

Sales for the 2012 fiscal year were $450.4 million, compared with $512.0
million for the 2011 fiscal year. For the 2012 fiscal year, sales of
semiconductor photomasks were $350.1 million, or 78% of revenues, and sales of
FPD photomasks were $100.3 million, or 22% of revenues. GAAP net income
attributable to Photronics, Inc. for the 2012 fiscal year was $27.9 million,
or $0.44 earnings per diluted share, compared with GAAP net income of $16.2
million, or $0.28 earnings per diluted share, for the 2011 fiscal year.
Non-GAAP net income attributable to Photronics, Inc. for the 2012 fiscal year,
excluding consolidation and restructuring charges of $1.4 million and $0.1
million impact of warrants, was $29.2 million, or $0.46 earnings per diluted
share. Non-GAAP net income attributable to Photronics, Inc. for the 2011
fiscal year, excluding a $35.5 million debt extinguishment loss and $0.4
million impact of warrants, was $52.1 million, or $0.80 earnings per diluted
share.

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

Non-GAAP Financial Measures

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

  *Consolidation and restructuring charges in fiscal 2012 are excluded
    because they are not a part of ongoing operations.
  *Impact of warrants is excluded because it does not affect cash earnings.
  *Loss on extinguishment of debt in 2011 is excluded because it is not a
    part of ongoing operations.

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

A conference call with investors and the media to discuss these results is
scheduled for 8:30 a.m. Eastern Time on Wednesday, December 5, 2012. The call
can be accessed by logging onto Photronics' web site at www.photronics.com.
The live dial-in number is 408-774-4601. The call will be archived for instant
replay access until the Company reports its fiscal 2013 first quarter results.

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

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor”
for forward-looking statements made by or on behalf of Photronics, Inc. and
its subsidiaries (the Company). The forward-looking statements contained in
this press release and other parts of Photronics’ web site involve risks and
uncertainties that may affect the Company’s operations, markets, products,
services, prices, and other factors. These risks and uncertainties include,
but are not limited to, economic, competitive, legal, governmental, and
technological factors. Accordingly, there is no assurance that the Company’s
expectations will be realized. For a fuller discussion of the factors that may
affect the Company's operations, see "Forward Looking Statements" in the
Company's Quarterly and Annual Reports to the Securities and Exchange
Commission on Forms 10-Q and 10-K. The Company assumes no obligation to
provide revisions to any forward-looking statements.

15-2012

PLAB - E

                                                                             
                                                                             
PHOTRONICS, INC. AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial Information
(in thousands, except per share data)
(Unaudited)
                                                        
                       Three Months Ended            Year Ended
                       October      October          October        October
                       28,          30,              28,            30,
                       2012         2011             2012           2011
                                                                             
Reconciliation
of GAAP to
Non-GAAP Net
Income
Attributable
to Photronics,
Inc.
                                                                             
GAAP net
income
attributable           $ 3,833      $ 9,291          $ 27,868       $ 16,229
to Photronics,
Inc.
                                                                             
(a)
Consolidation
and                      246          -                1,428          -
restructuring
charges, net
of tax
                                                                             
(b) Impact of
warrants, net            -            (175   )         (94    )       424
of tax
                                                                             
(c) Debt
extinguishment
loss and net            -           -              -            35,486
interest
impact, net of
tax
                                                                             
Non-GAAP net
income
attributable           $ 4,079      $ 9,116         $ 29,202      $ 52,139
to Photronics,
Inc.
                                                                             
Reconciliation
of GAAP to
Non-GAAP Net
Income
Applicable to
Common
Shareholders
                                                                             
Weighted
average number
of diluted
shares
outstanding
                                                                             
GAAP                    61,052      76,259         76,464       58,458
                                                                             
Non-GAAP                61,052      76,082         76,445       71,940
                                                                             
Net income per
diluted share
                                                                             
GAAP                   $ 0.06       $ 0.14          $ 0.44        $ 0.28
                                                                             
Non-GAAP               $ 0.07       $ 0.14          $ 0.46        $ 0.80


(a) Represents consolidation and restructuring charges primarily related to
restructuring in Singapore

(b) Represents financing expenses related to warrants, which are recorded in
other expense, net.

(c) Represents extinguishment charges during the year ended October 30, 2011
related to the repurchase of $35.4 million of the Company's 5.50% convertible
senior notes due in October 2014, and net interest impact on convertible
transactions.


                                                                                         
                                                                                         
PHOTRONICS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
                                                                
                         Three Months Ended                Year Ended
                         October 28,     October 30,       October 28,      October 30,
                         2012            2011              2012             2011
                                                                                         
Net sales                $ 104,219       $ 122,159         $ 450,439        $ 512,020
                                                                                         
Costs and
expenses:
                                                                                         
Cost of sales              (79,922 )       (91,266 )         (338,519 )       (375,806 )
                                                                                         
Selling, general
and                        (11,396 )       (11,245 )         (46,706  )       (45,240  )
administrative
                                                                                         
Research and               (5,264  )       (4,269  )         (19,371  )       (15,507  )
development
                                                                                         
Consolidation,
restructuring             (246    )      -               (1,428   )      -        
and related
charges
                                                                                         
Operating income           7,391           15,379            44,415           75,467
                                                                                         
Debt
extinguishment             -               -                 -                (35,259  )
loss
                                                                                         
Other expense,            (1,623  )      (2,290  )        (3,767   )      (4,309   )
net
                                                                                         
Income before              5,768           13,089            40,648           35,899
income taxes
                                                                                         
Income tax                (1,551  )      (4,054  )        (10,793  )      (15,691  )
provision
                                                                                         
Net income                 4,217           9,035             29,855           20,208
                                                                                         
Net (income)
loss
attributable to           (384    )      256             (1,987   )      (3,979   )
noncontrolling
interests
                                                                                         
Net income
attributable to          $ 3,833        $ 9,291          $ 27,868        $ 16,229   
Photronics, Inc.
                                                                                         
Earnings per
share:
Basic                    $ 0.06         $ 0.16           $ 0.46          $ 0.28     
                                                                                         
Diluted                  $ 0.06         $ 0.14           $ 0.44          $ 0.28     
                                                                                         
Weighted-average
number of common
shares
outstanding:
Basic                     60,196        59,629          60,055         57,030   
                                                                                         
Diluted                   61,052        76,259          76,464         58,458   

                                                                             
                                                                             
PHOTRONICS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
                                                       
                                               October 28,       October 30,
                                               2012              2011
                                                                             
Assets
                                                                             
Current assets:
Cash and cash equivalents                      $  218,043        $  189,928
Accounts receivable                               75,685            85,540
Inventories                                       17,702            22,100
Other current assets                             8,364            7,639
                                                                             
Total current assets                              319,794           305,207
                                                                             
Property, plant and equipment, net                380,808           368,680
Investment in joint venture                       93,252            79,984
Intangible assets, net                            37,384            42,462
Other assets                                     19,356           21,521
                                                                             
                                               $  850,594        $  817,854
                                                                             
Liabilities and Equity
                                                                             
Current liabilities:
Current portion of long-term                   $  7,781          $  5,583
borrowings
Accounts payable and accrued                     79,092           90,318
liabilities
                                                                             
Total current liabilities                         86,873            95,901
                                                                             
Long-term borrowings                              168,956           152,577
Other liabilities                                 8,764             9,620
                                                                             
Equity                                           586,001          559,756
                                                                             
                                               $  850,594        $  817,854

                                                                             
                                                                             
PHOTRONICS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
                                                      
                                           Year Ended
                                           October 28,          October 30,
                                           2012                 2011
                                                                             
Cash flows from operating
activities:
Net income                                 $ 29,855             $ 20,208
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization                85,209               93,460
Debt extinguishment loss                     -                    27,399
Consolidation, restructuring and             262                  -
related charges
Changes in assets and                       17,223             (4,514   )
liabilities and other
                                                                             
Net cash provided by operating              132,549            136,553  
activities
                                                                             
Cash flows from investing
activities:
Purchases of property, plant and             (96,978  )           (82,121  )
equipment
Investment in joint venture                  (13,397  )           (18,271  )
Other                                       (1,568   )          (345     )
                                                                             
Net cash used in investing                  (111,943 )          (100,737 )
activities
                                                                             
Cash flows from financing
activities:
Proceeds from long-term                      25,000               17,000
borrowings
Proceeds from issuance of                    -                    115,000
convertible debt
Repurchase of common stock of                (15,598  )           (9,878   )
subsidiary
Repayments of long-term                      (5,293   )           (64,107  )
borrowings
Payments of deferred financing               (198     )           (4,318   )
fees
Proceeds from exercise of                   653                828      
share-based arrangements
                                                                             
Net cash provided by financing              4,564              54,525   
activities
                                                                             
Effect of exchange rate changes             2,945              642      
on cash
                                                                             
Net increase in cash and cash                28,115               90,983
equivalents
Cash and cash equivalents,                  189,928            98,945   
beginning of year
                                                                             
Cash and cash equivalents, end             $ 218,043           $ 189,928  
of year

Contact:

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