PLAB Photronics Inc

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

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))

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Item 2.02

Results of Operations and Financial Condition

On December 8, 2014, the Company issued a press release reporting fourth quarter and fiscal year end results. A copy of the press release is attached to this 8-K.

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, 99.5, 99.6 and 99.7 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.

On December 9, 2014, the Company will conduct a conference call during which certain unaudited, non-GAAP financial information related to the Company’s operations for the three months and fiscal year ended November 2, 2014 will be disclosed. This information is set forth in Exhibit 99.6 and 99.7.

EBITDA is a non-GAAP financial measure that the Company defines pursuant to its credit agreement. The Company believes that EBITDA is generally accepted as providing useful information regarding the operational strength and performance of its business, including the ability of the Company to pay interest, service debt and fund capital expenditures. The Company’s method for calculating EBITDA may not be comparable to methods used by other companies but is the same method the Company uses for calculating EBITDA under its credit facility.

Item 9.01.

Financial Statements and Exhibits

(d)	Exhibits
	99.1		Press Release dated December 8, 2014
	99.2		Condensed Consolidated Statements of Income
	99.3		Condensed Consolidated Balance Sheets
	99.4		Condensed Consolidated Statements of Cash Flows
	99.5		Reconciliation of GAAP to Non-GAAP Financial Information
	99.6		Reconciliation of GAAP Net Income to EBITDA
	99.7		Reconciliation of GAAP Operating Income to Non-GAAP Operating Income.

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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.

DATE: December 9, 2014	BY	/s/ Richelle E. Burr
		Richelle E. Burr
		Vice President, General Counsel

PHOTRONICS, INC.

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	FOR FURTHER INFORMATION: Pete Broadbent Vice President, Investor Relations & Marketing (203) 775-9000 pbroadbent@photronics.com
Press Release

PHOTRONICS REPORTS FOURTH QUARTER
AND FISCAL 2014 RESULTS

• Quarterly sales of $124.3 million
   
• Quarterly GAAP and Non-GAAP diluted EPS of $0.07; within guidance of $0.07 - $0.11
   
• Quarterly Non-GAAP EBITDA of $33 million
   
• Net cash of $51 million up $22 million sequentially

BROOKFIELD, Conn. December 08, 2014 — 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 November 2, 2014.

Constantine ("Deno") Macricostas, Photronics’ chairman and chief executive officer, commented: “Fourth quarter revenues were slightly lower than previously anticipated due to slower than expected ramps in advanced memory nodes and a pause in 28nm demand due to a refresh of the design pipeline at a foundry customer. Our market position remains strong and our qualifications are in place for these customers and we expect the ramps to materialize and drive revenue growth in the new fiscal year.”

Sales for the fourth quarter of fiscal 2014 were $124.3 million, compared with $106.0 million for the fourth quarter of fiscal year 2013. Sales of semiconductor photomasks were $99.4 million, or 80% of revenues, during the fourth quarter of fiscal 2014, and sales of flat panel display (FPD) photomasks were $24.9 million, or 20% of revenues. For the fourth quarter of fiscal 2014, GAAP and Non-GAAP net income attributable to Photronics, Inc. shareholders was $4.3 million, or $0.07 per diluted share, compared with $4.8 million, or $0.08 per diluted share, for the fourth quarter of fiscal 2013. Non-GAAP net income attributable to Photronics, Inc. shareholders for the fourth quarter of 2013, excluding joint venture transaction expenses of $0.8 million, was $5.6 million, or $0.09 per diluted share.

Sales for the 2014 fiscal year were $455.5 million, compared with $422.2 million for the 2013 fiscal year. For the 2014 fiscal year, sales of semiconductor photomasks were $352.7 million, or 77% of revenues, and sales of FPD photomasks were $102.8 million, or 23% of revenues. GAAP net income attributable to Photronics, Inc. shareholders for the 2014 fiscal year was $26.0 million, or $0.41 per diluted share, compared with GAAP net income of $18.0 million, or $0.29 per diluted share, for the 2013 fiscal year. Non-GAAP net income attributable to Photronics, Inc. shareholders for the 2014 fiscal year, excluding the acquisition gain of $16.4 million and expenses related to the joint venture of $2.5 million, was $12.1 million, or $0.19 per diluted share. Non-GAAP net income attributable to Photronics, Inc. shareholders for the 2013 fiscal year, excluding $0.8 million in expenses related to the joint venture, was $18.7 million, or $0.30 per diluted share.

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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. shareholders 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. shareholders 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. shareholders 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:

• Non-cash acquisition gain and transaction expenses related to the joint venture, PDMC, in Taiwan are excluded because they are 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.

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A conference call with investors and the media to discuss these results is scheduled for 8:30 a.m. Eastern time on Tuesday, December 9, 2014. The live dial-in number is (408) 774-4601. The call can also be accessed by logging onto Photronics' web site at www.photronics.com. The call will be archived for instant replay access until the Company reports its fiscal 2015 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 as well as decisions we may make in the future regarding our business, capital structure and other matters. These forward-looking statements generally can be identified by phrases such as “believes”, “expects”, “anticipates”, “plans”, “projects”, “could”, “estimate”, “intend”, “may”, “will” and similar expressions. 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.

11-2014

PLAB – E

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

		Three Months Ended								Year Ended
		November 2,				November 3,				November 2,				November 3,
		2014				2013				2014				2013
Net sales		$	124,251			$	106,009			$	455,527			$	422,180
Costs and expenses:
Cost of sales			(97,626	)			(79,334	)			(355,181	)			(322,540	)
Selling, general and administrative			(11,547	)			(12,928	)			(49,638	)			(48,213	)
Research and development			(5,801	)			(6,378	)			(21,913	)			(20,758	)
Operating income			9,277				7,369				28,795				30,669
Gain on acquisition			-				-				16,372				-
Other expense, net			(574	)			(1,384	)			(3,837	)			(3,864	)
Income before income taxes			8,703				5,985				41,330				26,805
Income tax provision			(2,004	)			(1,072	)			(9,295	)			(7,229	)
Net income			6,699				4,913				32,035				19,576
Net income attributable to noncontrolling interests			(2,422	)			(73	)			(6,039	)			(1,610	)
Net income attributable to Photronics, Inc. shareholders		$	4,277			$	4,840			$	25,996			$	17,966
Earnings per share:
Basic		$	0.07			$	0.08			$	0.42			$	0.30
Diluted		$	0.07			$	0.08			$	0.41			$	0.29
Weighted-average number of common shares outstanding:
Basic			63,106				61,058				61,779				60,644
Diluted			64,085				61,962				66,679				61,599

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

	November 2,			November 3,
	2014			2013
Assets
Current assets:
Cash and cash equivalents	$	192,929		$	215,615
Accounts receivable		94,515			73,357
Inventories		22,478			18,849
Other current assets		26,570			10,645
Total current assets		336,492			318,466
Property, plant and equipment, net		550,069			422,740
Investment in joint venture		93,122			93,124
Intangible assets, net		30,294			34,080
Other assets		19,206			17,519
	$	1,029,183		$	885,929
Liabilities and Equity
Current liabilities:
Current portion of long-term borrowings	$	10,381		$	11,818
Accounts payable and accrued liabilities		128,736			92,769
Total current liabilities		139,117			104,587
Long-term borrowings		131,805			182,203
Other liabilities		18,767			11,308
Photronics, Inc. shareholders' equity		628,050			585,314
Noncontrolling interests		111,444			2,517
Total equity		739,494			587,831
	$	1,029,183		$	885,929

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

	Year Ended
	November 2,				November 3,
	2014				2013
Cash flows from operating activities:
Net income	$	32,035			$	19,576
Adjustments to reconcile net income to net cash
provided by operating activities:
Gain on acquisition		(16,372	)			-
Depreciation and amortization		80,136				72,942
Changes in assets and liabilities and other		562				6,883
Net cash provided by operating activities		96,361				99,401
Cash flows from investing activities:
Purchases of property, plant and equipment		(91,085	)			(63,792	)
Cash from acquisition		4,508				-
Other		(908	)			(2,445	)
Net cash used in investing activities		(87,485	)			(66,237	)
Cash flows from financing activities:
Repayments of long-term borrowings		(29,782	)			(8,314	)
Purchase of common stock of subsidiary		-				(32,374	)
Payment of deferred financing fees		(346	)			(40	)
Proceeds from share-based arrangements		1,298				884
Other		(711	)			-
Net cash used in financing activities		(29,541	)			(39,844	)
Effect of exchange rate changes on cash		(2,021	)			4,252
Net decrease in cash and cash equivalents		(22,686	)			(2,428	)
Cash and cash equivalents, beginning of period		215,615				218,043
Cash and cash equivalents, end of period	$	192,929			$	215,615
Noncash net assets from acquisition	$	110,211			$	-

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PHOTRONICS, INC. AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial Information
(in thousands, except per share data)
(Unaudited)

	Three Months Ended						Year Ended
	November 2,			November 3,			November 2,				November 3,
	2014			2013			2014				2013
Reconciliation of GAAP to Non-GAAP Net Income
Attributable to Photronics, Inc. Shareholders
GAAP net income attributable to Photronics, Inc. shareholders	$	4,277		$	4,840		$	25,996			$	17,966
(a) Gain on acquisition, net of tax		-			-			(16,372	)			-
(b) Acquisition transaction expenses, net of tax		-			773			2,455				773
Non-GAAP net income attributable to Photronics, Inc. shareholders	$	4,277		$	5,613		$	12,079			$	18,739
Reconciliation of GAAP to Non-GAAP Net Income
Applicable to Common Shareholders
Weighted average number of diluted shares outstanding
GAAP		64,085			61,962			66,679				61,599
Non-GAAP		64,085			61,962			62,734				61,599
Net income per diluted share
GAAP	$	0.07		$	0.08		$	0.41			$	0.29
Non-GAAP	$	0.07		$	0.09		$	0.19			$	0.30

(a)		Represents gain on acquisition of DNP Photomask Technology Taiwan Co., Ltd (DPTT), a wholly-owned subsidiary of Dai Nippon Printing Co., Ltd
(b)		Represents transaction expenses in connection with the acquisition of DPTT.

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PHOTRONICS, INC. AND SUBSIDIARIES
Non-GAAP Financial Measure
Reconciliation of GAAP Net Income to EBITDA
(in thousands)
(Unaudited)

	Three Months Ended						Year Ended
	November 2,			November 3,			November 2,				November 3,
	2014			2013			2014				2013
GAAP Net Income (a)	$	6,699		$	4,913		$	32,035			$	19,576
Add: interest expense		1,638			2,051			7,247				7,756
Add: income tax expense		2,004			1,072			9,295				7,229
Add: depreciation and amortization		21,421			17,453			78,685				71,408
Add (less): special items (b)		941			1,156			(9,846	)			3,974
EBITDA	$	32,703		$	26,645		$	117,416			$	109,943

(a)		Includes net income attributable to noncontrolling interests.
(b)		Special items consist of stock compensation expense, and in 2014 noncash gain on acquisition of DNP Photomask Technology Taiwan, Co., Ltd., a wholly-owned subsidiary of Dai Nippon Printing Co., Ltd., and related acquisition transaction expenses.

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PHOTRONICS, INC. AND SUBSIDIARIES
Non-GAAP Financial Measure
Reconciliation of GAAP Operating Income to Non-GAAP Operating Income
(in thousands)
(Unaudited)

		Three Months Ended												Year Ended
		November 2,						November 3,						November 2,						November 3,
		2014						2013						2014						2013
		$			%			$			%			$			%			$			%
					(b)						(b)						(b)						(b)
GAAP Operating Income		$	9,277		7.5	%		$	7,369		7.0	%		$	28,795		6.3	%		$	30,669		7.3	%
(a) Acquisition transaction expenses			—		—				773		0.7				2,455		0.6				773		0.1
Non-GAAP Operating Income		$	9,277		7.5	%		$	8,142		7.7	%		$	31,250		6.9	%		$	31,442		7.4	%

(a)		Represents transaction expenses in connection with the acquisition of DNP Photomask Technology Taiwan Co., Ltd., a wholly-owned subsidiary of Dai Nippon Printing Co., Ltd.
(b)		Represents percentage of net sales.

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