# EDGAR Filing Document

**Accession Number:** 0000810136
**File Stem:** 0001140361-23-001431
**Filing Date:** 2023-1
**Character Count:** 16286
**Document Hash:** f38d4c9e509fad2bfc19642e30ac9e4f
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001140361-23-001431.hdr.sgml**: 20230112

**ACCESSION NUMBER**: 0001140361-23-001431

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 41

**CONFORMED PERIOD OF REPORT**: 20230112

**ITEM INFORMATION**: Regulation FD Disclosure

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230112

**DATE AS OF CHANGE**: 20230112

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** PHOTRONICS INC
- **CENTRAL INDEX KEY:** 0000810136
- **STANDARD INDUSTRIAL CLASSIFICATION:** SEMICONDUCTORS & RELATED DEVICES [3674]
- **IRS NUMBER:** 060854886
- **STATE OF INCORPORATION:** CT
- **FISCAL YEAR END:** 1031

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-39063
- **FILM NUMBER:** 23525090

**BUSINESS ADDRESS:**
- **STREET 1:** 15 SECOR ROAD
- **STREET 2:** PO BOX 5226
- **CITY:** BROOKFIELD
- **STATE:** CT
- **ZIP:** 06804
- **BUSINESS PHONE:** 2037759000

**MAIL ADDRESS:**
- **STREET 1:** 15 SECOR ROAD
- **STREET 2:** P O BOX 5226
- **CITY:** BROOKFIELD
- **STATE:** CT
- **ZIP:** 06804

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** PHOTRONIC LABS INC
- **DATE OF NAME CHANGE:** 19900514

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### UNITED STATES

### SECURITIES AND EXCHANGE COMMISSION

#### Washington, D.C. 20549

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### FORM 8-K

#### CURRENT REPORT

#### Pursuant To Section 13 Or 15(d) Of The Securities Exchange Act Of 1934
![graphic](image01.jpg)

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| | |
|:---|:---|
| Date of report (Date of earliest event reported) | **January 12, 2023**<br>|

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| |
|:---|
| **PHOTRONICS, INC.**<br>|
| (Exact name of registrant as specified in its charter) |

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| | | |
|:---|:---|:---|
| **Connecticut**<br>| **0-15451**<br>| **06-0854886**<br>|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification Number) |

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| | |
|:---|:---|
| **15 Secor Road, Brookfield, CT** | **06804**<br>|
| (Address of Principal Executive Offices) | (Zip Code) |

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Registrant's Telephone Number, including area code <u>(203) 775-9000</u>

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

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:

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| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| COMMON STOCK, $0.01 par value per share<br>| PLAB<br>| NASDAQ Global Select Market<br>|

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| | |
|:---|:---|
| **<u>Item 7.01.</u>** | **<u>Regulation FD.</u>** |

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On January 12th, 2023, Photronics, Inc. (the "Company") will present at the 25<sup>th</sup> 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.

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| | |
|:---|:---|
| **<u>Item 9.01.</u>** | **<u>Financial Statements and Exhibits.</u>** |

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(d) Exhibits

[99.1](brhc10046572_ex99-1.htm) Presentation dated January 12, 2023

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#### 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.

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| | |
|:---|:---|
| **PHOTRONICS, INC.** | **PHOTRONICS, INC.** |
| (Registrant) | (Registrant) |
| By: | /s/ Richelle E. Burr |

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| | | |
|:---|:---|:---|
|  | Name: | Richelle E. Burr |
|  | Title: | Chief Administrative Officer |
| Date: January 12, 2023 |  |  |

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## Exhibit 99.1

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**Exhibit 99.1**<br>

**** 

<br> **![](brhc10046572_ex99-1slide1.jpg)

25th Annual Needham Growth Conference January 12, 2023 Global Merchant Photomask Leader

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![](brhc10046572_ex99-1slide2.jpg)

Safe Harbor Statement This presentation and some of our comments during this presentation may contain projections or other forward-looking statements such as statements regarding future events, our future financial performance, and/or the future performance of the industry. These statements are subject to predictions and contain risks and uncertainties. We refer you to the documents the Company files from time to time with the Securities and Exchange Commission. These documents contain and identify important factors that could cause the actual results for the Company to differ materially from those contained in our projections or forward-looking statements. Certain of these factors can be found at www.photronics.com/riskfactors. Although we believe that the expectations reflected in the forward-looking statements are reasonable, 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. 2

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![](brhc10046572_ex99-1slide3.jpg)

A Compelling Investment Thesis Delivering growth by leveraging core competencies \*Upper range of 2024 target model compared with 2022 Operating margins in the low-thirties Free cash flow above $250M China industry expansion(IC & FPD) Display technology inflections Resurgence of legacy foundry sector A GLOBAL LEADER in the merchant photomask industry INVESTMENT GROWTH strategy targeting EPS growth +35%\* TECHNOLOGY ALIGNED with secular growth trends 3

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![](brhc10046572_ex99-1slide4.jpg)

Leading merchant with unmatched global presence IC FPD IC & FPD Unmatched Global Footprint 11 Strategically Located Manufacturing Facilities Sources: SEMI 2021 Photomask Characterization Study; internal estimates 4

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![](brhc10046572_ex99-1slide5.jpg)

Investment Strategy Revenue Growth Win lion's share of the impressive growth in TAM for China IC and FPD Supplement capacity with point tool investments and targeted expansions Capitalize on technology leadership in AMOLED to continue improving mix Leverage global footprint to exploit growth in "legacy foundry" business Margin Expansion Sustaining pricing strength in high-end and mainstream IC Optimizing asset tool set to match end-market demand Increasing benefit from operating leverage Explore Strategic Partnerships

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![](brhc10046572_ex99-1slide6.jpg)

Investment strategy is working 29% operating margin during H2 2022 5th consecutive year of record revenue 6

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![](brhc10046572_ex99-1slide7.jpg)

Delivering on Updated Target Model \*Free Cash Flow is a non-GAAP term; see reconciliation included in this presentation 7 $M (except EPS) 2020 2021 2022 Illustrative FY 24 Target Model Revenue $610 $664 $825 $900 $950 $975 Gross Margin 22% 25% 36% 38-40% 40-42% 42-43% Operating Margin 10% 14% 26% 28-30% 30-32% 32-33% Operating Cash Flow $143 $151 $275 $350-375 $365-380 $375-400 Free Cash Flow\* $77 $47 $166 $250-275 $235-280 $275-300 Diluted EPS $0.52 $0.89 $1.94 $2.35-2.45 $2.50-2.55 $2.60-2.65

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![](brhc10046572_ex99-1slide8.jpg)

"Made in China 2025" driving growth Source: Internal Estimates Forecast falling short of policy goals More investment needed to meet targets May 2022 We're aligned with fastest growing sectors: AMOLED / LTPS & G10.5+ 8

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![](brhc10046572_ex99-1slide9.jpg)

Technology leadership improves FPD business mix Investments aligned with secular growth trends AMOLED & LTPS for mobile New OLED TV technologies G10.5+ Partners with largest panel makers Runway left for advanced display growth Mobile platforms Advanced TV Mini & Micro LED +18% CAGR High-End: +37% CAGR 9

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![](brhc10046572_ex99-1slide10.jpg)

Growth in Legacy Foundry = Dynamic Mainstream Mask Market Demand continues to exceed supply Delivery times expanded from legacy levels Industry cannot add capacity cost effectively Rebirth of the ASIC mask market Moore's law economics no longer working for much of the logic market Mask to silicon revenue of 3% in mainstream vs 1% for over-all semiconductor market Pricing leverage Double digit increases implemented in Taiwan and China Pricing environment improved globally. 10

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![](brhc10046572_ex99-1slide11.jpg)

Financial Discipline Improves Shareholder Value Targeted investments drive top-line growth in excess of market Operating leverage and cost reductions expand margins Target operating margins low-thirties Target incremental margins 50% Strong cash flow generation fortifies balance sheet Capital deployment priorities to improve ROIC

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![](brhc10046572_ex99-1slide12.jpg)

Net income attributable to Photronics, Inc. shareholders of $37.1M ($0.60/share) Investing in mainstream IC capacity to capitalize on market growth trends IC: -3% Q/Q, +25% Y/Y FPD: -8% Q/Q, -3% Y/Y To China: +8% Q/Q; +39% Y/Y Committed to driving long-term, profitable growth through strategic investments $79M generated from operating activity $66M invested in capex $42M total long-term debt; reduced debt $69M Y/Y Cash balance $320M Revenue was $210.3M -4%Q/Q +16%Y/Y 12/13/2022 12 Q4 2022 Summary $39M S-T Investments

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![](brhc10046572_ex99-1slide13.jpg)

Fifth consecutive year of record revenue, as customers continue to trust us for their photomask needs Gross and operating margins in target model range during second half of 2022 Net income attributable to Photronics, Inc. shareholders of $118.8M ($1.94/share) IC: +29% FPD: +14% To China: +55% 5th consecutive year of record revenue, demonstrating effectiveness of investment strategy $275M generated from operating activity $112M invested in capex $166M in free cash flow\* Cash balance $320M Revenue was a record $824.5M +24% 12/13/2022 13 2022 Summary \*Free Cash Flow is a non-GAAP term; see reconciliation included in this presentation $39M S-T Investments

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![](brhc10046572_ex99-1slide14.jpg)

Income Statement Summary - Quarter $M (except EPS) Q422 Q322 Q/Q Q421 Y/Y Revenue $210.3 $219.9 (4%) $181.3 16% Gross Profit $80.3 $83.9 (4%) $51.9 55% Gross Margin 38.2% 38.1% 10 bps 28.7% 950 bps Operating Income $60.5 $63.7 (5%) $33.5 81% Operating Margin 28.8% 29.0% (20 bps) 18.5% 1,030 bps Non-operating income $10.8 $3.6 $7.2 $3.8 $7.0 Income tax provision $16.1 $18.1 ($2.0) $8.7 $7.4 Minority interest $18.2 $18.0 $0.2 $8.8 $9.4 Net income\* $37.1 $31.2 19% $19.8 87% Diluted EPS\* $0.60 $0.51 $0.09 $0.33 $0.27 Days in quarter 92 91 1 91 1 Margins essentially flat Q/Q as cost management and IC price realization offset impact of lower revenue Non-operating income primarily consists of unrealized FX gain Minority interest from strong net income of IC JVs in Taiwan and China 12/13/2022 14 \*Net income attributable to Photronics, Inc. shareholders

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![](brhc10046572_ex99-1slide15.jpg)

Income Statement Summary – Full Year Margins continued improving through the year driven by improved demand profile and pricing environment combined with strong cost control Non-operating income primarily consists of unrealized FX gain Minority interest from strong net income of IC JVs in Taiwan and China 12/13/2022 15 \*Net income attributable to Photronics, Inc. shareholders

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![](brhc10046572_ex99-1slide16.jpg)

$M Q422 Q322 Q/Q Q421 Y/Y High-End\* $44.3 $52.7 (16%) $42.6 4% Mainstream $111.9 $108.6 3% $82.9 35% Total $156.2 $161.3 (3%) $125.4 25% IC Photomask Revenue 12/13/2022 High-end declined Q/Q on lower foundry/logic demand in Asia Continued mainstream growth from chip proliferation in consumer products, IoT, 5G, and Crypto supporting higher ASPs Outlook New designs by customers to gain market share and support technology roadmap Regionalization driving investments for global chip capacity Expanding ASPs on positive supply/demand balance \*28nm and smaller Total may differ due to rounding 16

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![](brhc10046572_ex99-1slide17.jpg)

FPD Photomask Revenue 12/13/2022 Lower Q/Q high-end demand for mobile displays and G10.5+ for ultra-large screen TVs Mainstream increased sequentially as we filled capacity from high-end decline Outlook Mobile demand should recover with rollout of new designs Technology development drives demand for higher-value masks \*≥G10.5, AMOLED and LTPS $M Q422 Q322 Q/Q Q421 Y/Y High-End\* $43.4 $50.7 (14%) $41.0 6% Mainstream $10.6 $8.0 33% $14.9 (28%) Total $54.1 $58.7 (8%) $55.8 (3%) Total may differ due to rounding 17

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![](brhc10046572_ex99-1slide18.jpg)

Select Financial Data Cash includes cash equivalents and long-term investments Debt primarily comprised of US equipment leases and local China loans; reduced debt $69M in 2022 Full-year capex (net of gov't subsidies) mostly mainstream IC capacity & facility expansion Balance sheet able to fund investments, share repurchases, and strategic M&A opportunities Total share repurchases of $68M under current (Sep 2020) $100M authorization 12/13/2022 \*Net cash defined is a non-GAAP term; see reconciliation included in this presentation 18

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![](brhc10046572_ex99-1slide19.jpg)

Summary 2022 was 5th consecutive year of record revenue, growing 13% CAGR over that period Our leadership position is expanding – growing more quickly than markets With a business model demonstrated to deliver increasing shareholder value Margin expansion creates earnings power Strong cash flow generation Strategic use of cash to fund growth and enhance shareholder returns Moving forward, investment focus is to drive accretive growth

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![](brhc10046572_ex99-1slide20.jpg)

A Compelling Investment Thesis Delivering growth by leveraging core competencies \*Upper range of 2024 target model compared with 2022 Operating margins in the low-thirties Free cash flow above $250M China industry expansion(IC & FPD) Display technology inflections Resurgence of legacy foundry sector A GLOBAL LEADER in the merchant photomask industry INVESTMENT GROWTH strategy targeting EPS growth +35%\* TECHNOLOGY ALIGNED with secular growth trends 20

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![](brhc10046572_ex99-1slide21.jpg)

For Additional Information: John P. Jordan Executive Vice President & CFO 203.740.5671 jjordan@photronics.com Thank you for your interest!

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![](brhc10046572_ex99-1slide22.jpg)

Appendix

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![](brhc10046572_ex99-1slide23.jpg)

Total Revenue 12/13/2022 23 IC FPD Total may differ due to rounding

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![](brhc10046572_ex99-1slide24.jpg)

IC Photomask Revenue 12/13/2022 24 Mainstream High-End High-End: 28nm and smaller; total may differ due to rounding

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![](brhc10046572_ex99-1slide25.jpg)

FPD Photomask Revenue 12/13/2022 25 Mainstream High-End High-End: ≥G10.5, AMOLED and LTPS; total may differ due to rounding

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![](brhc10046572_ex99-1slide26.jpg)

Non-GAAP Financial Measures 12/13/2022 26

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![](brhc10046572_ex99-1slide27.jpg)

Non-GAAP Financial Measures 12/13/2022 27**

**** <br> **** 

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