Photronics Reports Fiscal Year 2007 Results



    BROOKFIELD, CONN., December 4 /CNW/ - Photronics, Inc. (Nasdaq:  PLAB), a
worldwide leader in supplying innovative imaging technology solutions for the
global electronics industry, today reported fiscal 2007 fourth quarter and
fiscal year results for the period ended October 28, 2007.

    Sales for the quarter were $101.6 million, down 11.9%, compared to $115.3
million for the fourth quarter of 2006. Semiconductor photomasks accounted for
$80.3 million or 79.0% of revenues during the fourth quarter of fiscal 2007,
while sales of flat panel display (FPD) photomasks accounted for $21.3 million
or 21.0% of revenues. Net income for the fourth quarter of fiscal 2007
amounted to $0.4 million, or $0.01 per diluted share, compared to the prior
year's fourth quarter net income of $9.8 million, or $0.21 per diluted share.

    Sales for the 2007 fiscal year were $421.5 million, down 7.3% from the
$454.9 million reported in fiscal 2006. Semiconductor photomasks accounted for
$339.4 million or 80.5% of revenues during fiscal 2007, while sales of FPD
photomasks accounted for $82.1 million or 19.5%. Year-over-year, semiconductor
photomask revenues decreased 4.4%, while FPD photomask revenues decreased
17.8%. Net income for fiscal 2007 amounted to $24.5 million, or $0.56 per
diluted share, compared to the prior fiscal year's net income of $29.3
million, or $0.66 per diluted share.

    Michael J. Luttati, Chief Executive Officer, shared his views of the
Company's reported results. "2007 can best be described as a year of
transition for Photronics. While there were many external factors outside of
our control that influenced performance during the year, we were disappointed
with the year-end results. Despite this, we continue our intense focus on
implementing strategic actions necessary to position the Company for future
growth and believe our actions to be on target. All in all, we have
strengthened our position going forward and have set our sights on recording a
growth year in 2008."

    A conference call with investors and the media to discuss these results
can be accessed by logging onto Photronics' web site at www.photronics.com,
then clicking on the "Conference Calls" button at the top right corner of the
home page. The call is scheduled for 8:30 a.m. Eastern time on Wednesday,
December 5, 2007, and will be archived for instant replay access until the
Company reports its fiscal first quarter results after the market closes on
Wednesday, February 13, 2008. The dial-in number is (212) 231-2920.

    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 as discussed in filings
with the U. S. Securities and Exchange Commission (SEC). 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. The Company assumes no
obligation to provide revisions to any forward-looking statements.

    
                      PHOTRONICS, INC. AND SUBSIDIARIES
    ----------------------------------------------------------------------
                 Condensed Consolidated Statements of Income
    ----------------------------------------------------------------------
                   (in thousands, except per share amounts)

                                Three Months Ended        Year Ended
                               --------------------- ---------------------
                               October 28 October 29 October 28 October 29
                                  2007       2006       2007       2006
                               ---------- ---------- ---------- ----------

    Net sales                   $101,571   $115,297  $ 421,479  $ 454,875

    Costs and expenses:

       Cost of sales             (81,614)   (79,166)  (321,958)  (307,851)

       Selling, general and
        administrative           (14,585)   (15,777)   (61,507)   (62,215)

       Research and
        development               (4,015)    (4,353)   (17,300)   (27,337)

       Consolidation,
        restructuring, and
        related charges                -     (2,423)         -    (15,639)

    Gain on sale of facility           -          -      2,254          -
                               ---------- ---------- ---------- ----------

          Operating income         1,357     13,578     22,968     41,833

    Other income (expense), net      (96)      (739)       916      3,553
                               ---------- ---------- ---------- ----------

          Income before income
           taxes and minority
           interest                1,261     12,839     23,884     45,386

    Income tax (provision)
     benefit                        (784)    (1,139)     3,178    (10,462)
                               ---------- ---------- ---------- ----------

          Income before
           minority interest         477     11,700     27,062     34,924

    Minority interest               (115)    (1,881)    (2,539)    (5,592)
                               ---------- ---------- ---------- ----------

          Net income            $    362   $  9,819  $  24,523  $  29,332
                               ---------- ---------- ---------- ----------

    Earnings per share:
           Basic                $   0.01   $   0.24  $    0.59  $    0.71
                               ---------- ---------- ---------- ----------

           Diluted              $   0.01   $   0.21  $    0.56  $    0.66
                               ---------- ---------- ---------- ----------

    Weighted average number of
     common shares
      outstanding:
           Basic                  41,611     41,442     41,539     41,369
                               ---------- ---------- ---------- ----------

           Diluted                41,624     51,179     51,282     51,072
                               ---------- ---------- ---------- ----------
    

    
                      PHOTRONICS, INC. AND SUBSIDIARIES
    ----------------------------------------------------------------------
                    Condensed Consolidated Balance Sheets
    ----------------------------------------------------------------------
                                (in thousands)



                                                     October 28 October 29
                                                        2007       2006
                                                     ---------- ----------

                        Assets
    ----------------------------------------------

    Current assets:
       Cash, cash equivalents and short-term
          investments of $5,657 in 2007 and $69,899
           in 2006                                   $  151,706 $  199,324
       Accounts receivable                               68,248     84,299
       Inventories                                       17,716     19,209
       Other current assets                               9,315     16,055
                                                     ---------- ----------

          Total current assets                          246,985    318,887

    Property, plant and equipment, net                  531,578    443,637
    Goodwill                                            138,534    138,534
    Investment in joint venture                          67,900     64,365
    Other intangibles, net                               68,835     71,763
    Other assets                                          5,948      8,497
                                                     ---------- ----------

                                                     $1,059,780 $1,045,683
                                                     ---------- ----------



    Liabilities and Shareholders' Equity
    -----------------------------------------------

    Current liabilities:
       Current portion of long-term debt             $    4,482 $   86,903
       Accounts payable and accrued liabilities         145,897    104,293
                                                     ---------- ----------

          Total current liabilities                     150,379    191,196

    Long-term debt                                      191,253    170,288
    Deferred income taxes and other liabilities          14,399     23,920
    Minority interest                                    49,465     45,997

    Shareholders' equity                                654,284    614,282
                                                     ---------- ----------

                                                     $1,059,780 $1,045,683
                                                     ---------- ----------
    

    
                      PHOTRONICS, INC. AND SUBSIDIARIES
    ----------------------------------------------------------------------
               Condensed Consolidated Statements of Cash Flows
    ----------------------------------------------------------------------
                                (in thousands)


                                                           Year Ended
                                                      --------------------
                                                      October   October 29
                                                          28
                                                        2007       2006
                                                      --------- ----------


    Cash flows from operating activities:
         Net income                                   $ 24,523  $  29,332
         Adjustments to reconcile net income to net
          cash
          provided by operating activities:
             Depreciation and amortization              98,018     90,678
             Gain on sale of facility                   (2,254)         -
             Minority interest in income of
              consolidated subsidiaries                  2,539      5,592
             Consolidation, restructuring and related
              charges                                        -     15,639
             Changes in assets and liabilities and
              other                                     11,867    (25,042)
                                                      --------- ----------

    Net cash provided by operating activities          134,693    116,199
                                                      --------- ----------

    Cash flows from investing activities:
           Purchases of property, plant and equipment  (94,132)   (94,646)
           Purchases of short-term investments and
            other                                       (3,100)   (82,582)
           Proceeds from sales of investments and
            other                                       66,304    104,962
           Proceeds from sale of facility and other      5,784          -
           Investment in joint venture, technology
            and supply agreements                       (3,499)  (120,505)
           Acquisition of additional interest in PK
            Ltd.                                             -     (8,432)
                                                      --------- ----------

    Net cash used in investing activities              (28,643)  (201,203)
                                                      --------- ----------

    Cash flows from financing activities:
           Repayments of long-term debt and other      (94,587)    (8,566)
           Proceeds from long-term debt                  4,303     20,303
           Proceeds from issuance of common stock          988      1,809
           Other                                        (1,575)         -
                                                      --------- ----------

    Net cash (used in) provided by financing
     activities                                        (90,871)    13,546
                                                      --------- ----------

    Effect of exchange rate changes on cash              1,445      4,834
                                                      --------- ----------

    Net increase (decrease) in cash and cash
     equivalents                                        16,624    (66,624)
    Cash and cash equivalents, beginning of period     129,425    196,049
                                                      --------- ----------


    Cash and cash equivalents, end of period          $146,049  $ 129,425
                                                      --------- ----------

    Supplemental disclosure of cash flow information:
      Change in accrual for purchases of property,
       plant and equipment                            $ 51,582  $  18,692
      Capital lease obligation for purchases of
       property, plant and
                equipment                             $ 19,912  $       -
    




For further information:

For further information: Photronics, Inc. Sean T. Smith, 203-775-9000
SVP - CFO ssmith@photronics.com

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