[Photronics Reports Third Quarter Fiscal 2025 Financial Results](index=1&type=section&id=Photronics%20Reports%20Third%20Quarter%20Fiscal%202025%20Financial%20Results) [Executive Summary and Outlook](index=1&type=section&id=Executive%20Summary%20and%20Outlook) Photronics exceeded Q3 FY2025 expectations, guiding Q4 revenue $201M-$209M and non-GAAP EPS $0.42-$0.48, focusing on efficiency and growth - Photronics delivered very good results in Q3 FY2025, with **revenue, profitability, and EPS ahead of expectations**[3](index=3&type=chunk) - Management focuses on **operational efficiency**, accelerating internal investment for **geographic revenue diversification**, and positioning for **sustained revenue and earnings growth**[3](index=3&type=chunk) Fourth Quarter Fiscal 2025 Guidance | Metric | Range | | :------------------------------------------------ | :------------------- | | Revenue | $201 million to $209 million | | Non-GAAP Net income attributable to Photronics, Inc. shareholders per diluted share | $0.42 to $0.48 | [Third Quarter Fiscal 2025 Key Financial Highlights](index=1&type=section&id=Third%20Quarter%20Fiscal%202025%20Key%20Financial%20Highlights) Photronics reported Q3 FY2025 revenue of $210.4M, GAAP net income $22.9M, non-GAAP $29.4M, with FPD growth offsetting IC decline Q3 FY2025 Key Financial Highlights | Metric | Q3 FY2025 | YoY Change | QoQ Change | | :------------------------------------------------ | :---------- | :--------- | :--------- | | Revenue | $210.4 million | -0.3% | -0.3% | | GAAP Net income attributable to Photronics, Inc. shareholders | $22.9 million | -33.5% | +157.3% | | GAAP Diluted EPS | $0.39 | -29.1% | +160.0% | | Non-GAAP Net income attributable to Photronics, Inc. shareholders | $29.4 million | -7.8% | +21.0% | | Non-GAAP Diluted EPS | $0.51 | 0.0% | +27.5% | | IC revenue | $147.8 million | -5% | -5% | | FPD revenue | $62.6 million | +14% | +14% | Q3 FY2025 Cash Flow and Capital Allocation | Metric | Amount | | :------------------------------------ | :------------- | | Cash, cash equivalents and short-term investments (end of quarter) | $575.8 million | | Cash generated from operating activities | $50.1 million | | Cash invested in organic growth (capital expenditures) | $24.8 million | | Cash returned to shareholders (share repurchases) | $20.7 million | - The Board of Directors approved a **$25.0 million increase** to the share repurchase authorization[7](index=7&type=chunk) [About Photronics](index=2&type=section&id=About%20Photronics) Photronics is a global leader in photomask technologies, manufacturing high-precision quartz plates for IC and FPD production - Photronics is a leading worldwide manufacturer of **integrated circuit (IC)** and **flat panel display (FPD) photomasks**[8](index=8&type=chunk) - Photomasks are high-precision quartz plates with microscopic electronic circuit images, crucial for **IC and FPD manufacturing**[8](index=8&type=chunk) - Founded in 1969, the company operates **11 manufacturing facilities** across Asia, Europe, and North America[8](index=8&type=chunk) [Financial Statements](index=3&type=section&id=Financial%20Statements) Photronics' unaudited condensed consolidated financial statements are presented, covering income, balance sheets, cash flows, and GAAP to non-GAAP reconciliation [Condensed Consolidated Statements of Income](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Condensed Consolidated Statements of Income (Three Months Ended) | Metric | August 3, 2025 | May 4, 2025 | July 28, 2024 | | :------------------------------------------ | :------------- | :---------- | :------------ | | Revenue | $210,394 thousand | $210,992 thousand | $210,984 thousand | | Cost of goods sold | $139,539 thousand | $133,086 thousand | $135,846 thousand | | Gross Profit | $70,855 thousand | $77,906 thousand | $75,138 thousand | | Gross margin % | 33.7% | 36.9% | 35.6% | | Operating Income | $48,161 thousand | $55,717 thousand | $52,148 thousand | | Operating Margin | 22.9% | 26.4% | 24.7% | | Net Income attributable to Photronics, Inc. shareholders | $22,891 thousand | $8,861 thousand | $34,388 thousand | | Diluted EPS | $0.39 | $0.15 | $0.55 | Condensed Consolidated Statements of Income (Nine Months Ended) | Metric | August 3, 2025 | July 28, 2024 | | :------------------------------------------ | :------------- | :------------ | | Revenue | $633,524 thousand | $644,318 thousand | | Cost of goods sold | $409,228 thousand | $410,674 thousand | | Gross Profit | $224,296 thousand | $233,644 thousand | | Gross margin % | 35.4% | 36.3% | | Operating Income | $156,054 thousand | $165,690 thousand | | Operating Margin | 24.6% | 25.7% | | Net Income attributable to Photronics, Inc. shareholders | $74,604 thousand | $96,819 thousand | | Diluted EPS | $1.23 | $1.55 | [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets | Metric | August 3, 2025 | October 31, 2024 | | :------------------------------------ | :------------- | :--------------- | | Total current assets | $872,236 thousand | $931,062 thousand | | Property, plant and equipment, net | $838,988 thousand | $745,257 thousand | | Total assets | $1,752,765 thousand | $1,712,059 thousand | | Total current liabilities | $174,925 thousand | $183,811 thousand | | Photronics, Inc. shareholders' equity | $1,125,551 thousand | $1,120,864 thousand | | Total equity | $1,538,000 thousand | $1,480,759 thousand | | Total liabilities and equity | $1,752,765 thousand | $1,712,059 thousand | - Cash and cash equivalents decreased from **$598,485 thousand** at October 31, 2024, to **$479,521 thousand** at August 3, 2025[14](index=14&type=chunk) - Short-term investments increased significantly from **$42,184 thousand** to **$96,277 thousand**[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (Nine Months Ended) | Metric | August 3, 2025 | July 28, 2024 | | :------------------------------------------ | :------------- | :------------ | | Net cash provided by operating activities | $159,974 thousand | $193,074 thousand | | Net cash used in investing activities | $(173,599) thousand | $(142,058) thousand | | Net cash used in financing activities | $(115,284) thousand | $(6,428) thousand | | Net (decrease) increase in cash, cash equivalents, and restricted cash | $(118,780) thousand | $38,134 thousand | | Cash, cash equivalents, and restricted cash, end of period | $482,463 thousand | $540,001 thousand | - Purchases of property, plant and equipment increased to **$120,588 thousand** for the nine months ended August 3, 2025, from **$87,733 thousand** in the prior year period[16](index=16&type=chunk) - Common stock repurchases significantly increased to **$97,422 thousand** for the nine months ended August 3, 2025, compared to none in the prior year period[16](index=16&type=chunk) [Non-GAAP Financial Measures Reconciliation](index=6&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) Non-GAAP Net Income and EPS Reconciliation (Three Months Ended) | Metric | August 3, 2025 | May 4, 2025 | July 28, 2024 | | :---------------------------------------------------------------- | :------------- | :---------- | :------------ | | GAAP Net income attributable to Photronics, Inc. shareholders | $22,891 thousand | $8,861 thousand | $34,388 thousand | | Non-GAAP Net income attributable to Photronics, Inc. shareholders | $29,356 thousand | $24,259 thousand | $31,915 thousand | | GAAP Diluted EPS attributable to Photronics, Inc. shareholders | $0.39 | $0.15 | $0.55 | | Non-GAAP Diluted EPS attributable to Photronics, Inc. shareholders | $0.51 | $0.40 | $0.51 | - Non-GAAP adjustments primarily include

Core Viewpoint - Photronics, Inc. reported strong financial results for the third quarter of fiscal year 2025, with revenue, profitability, and earnings per share exceeding expectations. The company aims to enhance operational efficiency and geographic revenue diversification for sustained growth [2][4]. Financial Performance - Revenue for the third quarter was $210.4 million, a decrease of 0.3% year-over-year and sequentially [8]. - GAAP net income attributable to shareholders was $22.9 million, or $0.39 per diluted share, compared to $34.4 million, or $0.55 per diluted share, in the same quarter of 2024 [8]. - Non-GAAP net income attributable to shareholders was $29.4 million, or $0.51 per diluted share, compared to $31.9 million, or $0.51 per diluted share, in the third quarter of 2024 [8]. - Integrated Circuit (IC) revenue was $147.8 million, down 5% year-over-year and sequentially, while Flat Panel Display (FPD) revenue was $62.6 million, up 14% year-over-year and sequentially [8]. Cash Flow and Investments - Cash, cash equivalents, and short-term investments at the end of the quarter totaled $575.8 million, with $396.8 million associated with joint ventures [8]. - Cash generated from operating activities was $50.1 million, with $24.8 million invested in organic growth through capital expenditures and $20.7 million returned to shareholders via share repurchases [8]. - The Board of Directors authorized an increase of $25 million to the share repurchase program [8]. Fourth Quarter Guidance - For the fourth quarter of fiscal 2025, Photronics expects revenue to be between $201 million and $209 million, and non-GAAP net income per diluted share to be between $0.42 and $0.48 [4]. Company Overview - Photronics is a leading manufacturer of photomasks for integrated circuits and flat panel displays, operating 11 manufacturing facilities across Asia, Europe, and North America [6].

Group 1 - The U.S. GDP grew 3% in Q2 2025, driven by a significant decline in imports after a record surge in Q1 2025, although tariff uncertainty remains a concern [2] - The artificial intelligence (AI) sector continues to attract substantial investments, with companies like Anthropic raising $5 billion, increasing its valuation from $62 billion to $170 billion [3] - Photronics (PLAB) is identified as an undervalued stock benefiting from AI-driven demand for photomasks, with a strong fundamental research backing its investment thesis [4][5] Group 2 - Photronics is positioned to profit from AI-driven growth in photomask demand due to advancements in chip technology, capacity expansions, and consumer electronics [5][6] - The global semiconductor manufacturing capacity is projected to grow at a compounded annual rate of 7% from 2024 to 2028, with semiconductor sales increasing by 20% year-over-year in May 2025 [7] - The long-term outlook for the semiconductor market indicates an 8% compounded annual growth rate from 2025 to 2034, driven by the demand for advanced chipmaking technologies [8][9] Group 3 - Photronics has increased its high-end photomask revenue from 30% in fiscal 2023 to 39% in the first half of fiscal 2025, indicating a shift towards higher-value products [12] - The company operates 11 production facilities globally, which minimizes tariff impacts and allows for efficient collaboration with customers [13][15] - Photronics has demonstrated strong financial performance, with revenue and core earnings growing at compounded annual rates of 6% and 25% since fiscal 2014, respectively [16] Group 4 - The company has generated $415 million in free cash flow from fiscal 2020 to fiscal 2Q25, representing 37% of its enterprise value, which supports its share repurchase program [19] - Photronics has a competitive edge in profitability, with a NOPAT margin of 19% and a return on invested capital (ROIC) of 12% in the trailing twelve months [17][21] - The company has repurchased $77 million in shares in the first half of fiscal 2025, with a potential repurchase yield of 1.8% based on current market capitalization [23] Group 5 - Photronics faces ongoing tariff uncertainty, particularly regarding its revenue from China, which accounted for 27% of its revenue in the first half of fiscal 2025 [24] - The company generated 36% of its revenue from three customers in fiscal 2024, indicating a concentration risk that could impact financial performance [27] - The current stock price implies a permanent decline in profits of 20%, despite the company's historical growth rates in NOPAT [29]

Core Viewpoint - Photronics, Inc. is set to announce its financial results for Q3 of fiscal 2025 on August 27, 2025, before market opening [1] Company Overview - Photronics is a leading global manufacturer of photomasks for integrated circuits (IC) and flat panel displays (FPD) [3] - The company has been a trusted supplier for over 56 years, having been founded in 1969 [3] - Photronics operates 11 strategically located manufacturing facilities across Asia, Europe, and North America [3] Upcoming Events - A public conference call will be held on the same day as the financial results announcement at 8:30 a.m. Eastern time [2] - During the call, management will address questions regarding financial performance, business conditions, and industry outlook, with some information potentially being disclosed for the first time [2] - The call will be available for live and on-demand streaming on the Photronics website [2]

Company Overview - Photronics, Inc. is a leading worldwide manufacturer of integrated circuit (IC) and flat panel display (FPD) photomasks, which are essential in the manufacturing process of ICs and FPDs [2] - The company has been a trusted photomask supplier for over 56 years, having been founded in 1969 [2] - Photronics operates 11 strategically located manufacturing facilities across Asia, Europe, and North America [2] Upcoming Investor Conferences - Photronics will participate in the Oppenheimer's 28th Annual Technology, Internet, & Communications Conference on August 13, 2025, which will be held virtually [1] - The company is also scheduled to attend TD Cowen's 53rd Technology Growth Cap Summit in New York, NY, on September 4, 2025 [1] - Additionally, Photronics will take part in the Singular Research Investor Conference in New York, NY, on September 10, 2025 [1]

Core Insights - Photronics, Inc. has installed a new multi-beam tool in its Boise, Idaho facility, enhancing its technological leadership in photomask technologies [1][2] - This installation represents the first multi-beam writer in production for the merchant market in the U.S., supporting both U.S. Government Trusted and commercial advanced photomask applications [2] - The multi-beam tool is designed to improve writing speed and performance for U.S. built merchant photomask products, enabling faster time to market and enhanced IC performance for customers [2] Company Overview - Photronics is a leading manufacturer of integrated circuit (IC) and flat panel display (FPD) photomasks, essential for the manufacturing process of ICs and FPDs [3] - The company has been a trusted supplier for over 56 years and operates 11 manufacturing facilities strategically located in Asia, Europe, and North America [3]

Core Points - Photronics, Inc. received the Outstanding Contribution award from Visionox, highlighting its dedication to customer excellence in photomask technologies [1][2] - Visionox recognizes Photronics for its premier economic value and customer support, particularly in delivery, quality, and local service [2] Company Overview - Photronics is a leading manufacturer of integrated circuit (IC) and flat panel display (FPD) photomasks, essential for the manufacturing process of ICs and FPDs [2] - The company has been a trusted supplier for over 56 years and operates 11 manufacturing facilities strategically located in Asia, Europe, and North America [2]

Summary of Photronics (PLAB) FY Conference Call - June 11, 2025 Company Overview - **Company**: Photronics, Inc. - **Ticker**: PLAB - **Industry**: Semiconductor and Display Technology - **Business Units**: - Integrated Circuit (IC) - 75% of revenue - Flat Panel Display (FPD) - 25% of revenue - **Geographic Presence**: 11 clean room facilities globally (6 in Asia, 3 in the U.S., 2 in Europe) [3][19] Core Business Insights - **High-End Market Focus**: - IC high-end segment includes 14nm, 22nm, and 28nm technologies, with 38% of IC revenue from high-end products [4][5] - FPD high-end segment constitutes approximately 85% of total display revenue [4] - **Photomask Production**: - Critical for semiconductor manufacturing, requiring multiple layers (e.g., 70 layers for 14nm designs) [8] - Major customers include UMC (15% of revenue) and Samsung (10% of revenue) [7] Revenue Growth and Market Dynamics - **Revenue Growth Drivers**: - Joint ventures in Taiwan (2014) and China (2019) significantly boosted revenue, with China exposure rising from 3% in 2019 to 28% in 2024 [12] - Supply chain disruptions during COVID-19 led to increased pricing power and improved gross margins from 23-24% in 2020 to 37% in 2024 [13] - **Market Position**: - Photronics and Topan dominate the merchant photomask market, holding approximately 95% of the U.S. market [20][28] - Anticipated growth in outsourcing from captive operations as TSMC and others expand in the U.S. [23] Financial Performance - **Recent Financials**: - Gross margins reported at 36.9% for the recent quarter, with operating expenses around 10% of revenue [33] - Strong cash flow generation, with a cash balance of $558 million, 57% linked to joint ventures [36] - **Capital Expenditures**: - Typically 15% of revenue, with elevated spending planned for 2025 due to U.S. investments [16][39] Competitive Landscape - **China Market Dynamics**: - New entrants in China, supported by government initiatives, struggle to compete at higher technology nodes due to restrictions on technology transfer [30] - Photronics maintains a competitive edge in high-end nodes, with expectations of a 3-5 year lead over new Chinese competitors [31] - **Display Technology**: - Introduction of next-generation moled display technology expected to enhance product offerings in laptops and foldable devices [35][60] Strategic Outlook - **U.S. Market Growth**: - Optimism regarding reshoring of semiconductor production in the U.S., with significant growth potential anticipated by 2027-2028 [50] - **Long-Term Agreements**: - Entered into multi-year sales agreements with key customers to ensure pricing stability and supply continuity [56] Additional Insights - **Operational Execution**: - Emphasis on geographic presence, quality, and response time as key factors for success [24][25] - **Market Trends**: - Design starts are critical for demand, with less correlation to wafer starts [32][45] This summary encapsulates the key points from the Photronics FY conference call, highlighting the company's strategic positioning, market dynamics, financial performance, and future outlook.

[Front Matter](index=1&type=section&id=Front%20Matter) [Glossary of Terms and Acronyms](index=4&type=section&id=Glossary%20of%20Terms%20and%20Acronyms) This section defines key technical and financial acronyms and terms like AMOLED, FPD, and IC, distinguishing between high-end and mainstream photomasks - High-end IC photomasks are defined as those servicing nodes at **28nm or smaller**[14](index=14&type=chunk) - High-end FPD photomasks are defined as **AMOLED, G10.5+, and LTPS** photomasks[14](index=14&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section cautions that forward-looking statements are subject to risks and uncertainties, advising readers to refer to Form 10-K risk factors - The company's forward-looking statements are qualified by risk factors provided in the **Form 10-K** for the year ended October 31, 2024, and this **Form 10-Q**[17](index=17&type=chunk) - The company does not undertake any obligation to update forward-looking statements to reflect subsequent events or circumstances[17](index=17&type=chunk) [PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents unaudited condensed consolidated financial statements, highlighting decreased cash, a significant net income drop due to foreign currency, and share repurchases [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets slightly decreased to **$1.703 billion** as of May 4, 2025, with cash and equivalents down, while total equity increased Condensed Consolidated Balance Sheet Highlights (in thousands of USD) | Account | May 4, 2025 | October 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $530,708 | $598,485 | | Total current assets | $855,806 | $931,062 | | Total assets | $1,703,032 | $1,712,059 | | **Liabilities & Equity** | | | | Total current liabilities | $166,783 | $183,811 | | Total liabilities | $206,263 | $231,300 | | Total equity | $1,496,769 | $1,480,759 | [Condensed Consolidated Statements of Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Revenue for Q2 FY25 was **$211.0 million**, with net income significantly impacted by a **$31.1 million** foreign currency loss Three Months Ended Financial Performance (in thousands of USD, except EPS) | Metric | May 4, 2025 | April 28, 2024 | | :--- | :--- | :--- | | Revenue | $210,992 | $217,000 | | Gross Profit | $77,906 | $79,251 | | Operating Income | $55,717 | $56,052 | | Foreign currency transactions impact, net | $(31,111) | $14,766 | | Net income attributable to Photronics, Inc. | $8,861 | $36,251 | | Diluted EPS | $0.15 | $0.58 | Six Months Ended Financial Performance (in thousands of USD, except EPS) | Metric | May 4, 2025 | April 28, 2024 | | :--- | :--- | :--- | | Revenue | $423,130 | $433,334 | | Gross Profit | $153,441 | $158,506 | | Operating Income | $107,894 | $113,542 | | Net income attributable to Photronics, Inc. | $51,712 | $62,431 | | Diluted EPS | $0.84 | $1.00 | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operations was **$109.9 million** for the six months ended May 4, 2025, with significant cash used for stock repurchases Six Months Ended Cash Flow Summary (in thousands of USD) | Cash Flow Activity | May 4, 2025 | April 28, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $109,919 | $117,994 | | Net cash used in investing activities | $(80,847) | $(114,704) | | Net cash used in financing activities | $(95,072) | $(4,727) | | Net decrease in cash | $(67,697) | $(5,276) | - The company repurchased **$76.7 million** of its common stock in the first six months of fiscal 2025, a significant use of cash in financing activities[31](index=31&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, revenue recognition, the PDMCX joint venture, debt, share-based compensation, and the share repurchase program - The company is a leading manufacturer of photomasks, a key element in the production of Integrated Circuits (ICs) and Flat Panel Displays (FPDs), operating eleven manufacturing facilities worldwide[33](index=33&type=chunk) - The company's China IC business operates through a joint venture (PDMCX) with DNP, in which Photronics holds a **50.01%** interest, with its results consolidated in Photronics' financial statements[53](index=53&type=chunk)[57](index=57&type=chunk) - The company recognizes the majority of its revenue over time, as photomasks are manufactured to customer specifications with no alternative use[64](index=64&type=chunk) - In Q2 FY25, the company began granting restricted stock units (RSUs) in addition to its historical restricted stock awards (RSAs)[84](index=84&type=chunk) - The company repurchased **3.8 million** shares for **$76.7 million** in the first six months of fiscal 2025, with **$23.3 million** remaining available under the share repurchase authorization as of May 4, 2025[101](index=101&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 FY25 financial results, noting a **2.8%** revenue decrease, net income impact from foreign currency loss, and active share repurchases [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Q2 FY25 revenue decreased to **$211.0 million** year-over-year, with gross margin improving but net income significantly impacted by foreign currency loss Revenue by Product Type - Q2 FY25 vs. Prior Periods (in millions of USD) | Product Type | Q2 FY25 Revenue | Change vs Q1 FY25 | % Change | Change vs Q2 FY24 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total IC** | **$155.9** | **$1.9** | **1.2%** | **$(5.0)** | **(3.1)%** | | High-end IC | $59.3 | $(0.8) | (1.3)% | $1.3 | 2.2% | | Mainstream IC | $96.6 | $2.7 | 2.9% | $(6.3) | (6.1)% | | **Total FPD** | **$55.1** | **$(3.0)** | **(5.3)%** | **$(1.0)** | **(1.7)%** | | High-end FPD | $43.6 | $(6.1) | (12.2)% | $(4.4) | (9.1)% | | Mainstream FPD | $11.5 | $3.1 | 35.3% | $3.4 | 42.1% | | **Total Revenue** | **$211.0** | **$(1.1)** | **(0.5)%** | **$(6.0)** | **(2.8)%** | - Gross margin increased by **40 basis points** YoY in Q2 FY25, primarily due to decreased labor, benefits, and material costs, offsetting lower revenue[120](index=120&type=chunk) - Other income (expense) was significantly impacted by foreign currency fluctuations, swinging from a **$20.5 million** income in Q2 FY24 to a **$25.8 million** expense in Q2 FY25, mainly due to unfavorable movements of the New Taiwan dollar and South Korean won against the U.S. dollar[126](index=126&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains **$530.7 million** in cash, plans **$200 million** in FY225 capital expenditures, and actively repurchases shares - As of May 4, 2025, cash and cash equivalents were **$530.7 million**, with **$431.9 million** held by foreign subsidiaries[132](index=132&type=chunk) - Estimated capital expenditures for fiscal year 2025 are approximately **$200 million**, targeted towards increasing operating capability and efficiency in Asia and the U.S[134](index=134&type=chunk) - The company repurchased **3.8 million** shares for **$76.7 million** during the six months ended May 4, 2025, with **$23.3 million** remaining under the share repurchase authorization[135](index=135&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces significant foreign currency exchange rate risk, with a hypothetical **10%** adverse movement resulting in a **$71.3 million** pre-tax loss - The company's primary net foreign currency exposures as of May 4, 2025, were to the South Korean won, Japanese yen, New Taiwan dollar, and Chinese yuan[149](index=149&type=chunk) - A hypothetical **10%** adverse movement in the value of currencies different from the functional currencies would have resulted in a net unrealized pre-tax loss of **$71.3 million** as of May 4, 2025[149](index=149&type=chunk) - Interest rate risk was not material as of the balance sheet date because there were no variable rate borrowings outstanding[150](index=150&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[152](index=152&type=chunk) - No material changes were made to the company's internal control over financial reporting during the second fiscal quarter of 2025[153](index=153&type=chunk) [PART II. OTHER INFORMATION](index=35&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors from the 2024 Form 10-K, except for a new risk concerning tariffs and global trade policies - A new risk factor was added concerning tariffs and global trade policies[155](index=155&type=chunk) - New tariffs announced in Q2 FY25 on imports from China, Taiwan, South Korea, Japan, and the EU could increase costs, reduce demand, and negatively affect customer purchasing behavior[156](index=156&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **3.6 million** shares in Q2 FY25, with **$23.3 million** remaining under the current authorization Issuer Purchases of Equity Securities (Q2 FY25) | Period | Total Number of Shares Purchased | Average Price Paid Per share | Dollar Value of Shares That May Yet Be Purchased (in millions of USD) | | :--- | :--- | :--- | :--- | | February 3, 2025 – March 2, 2025 | - | $ - | $95.4 | | March 3, 2025 – March 30, 2025 | 2,262,912 | $21.09 | $47.6 | | March 31, 2025 – May 4, 2025 | 1,352,287 | $17.99 | $23.3 | | **Total** | **3,615,199** | | | - In August 2024, the Board of Directors increased the share repurchase program authorization to **$100 million**[157](index=157&type=chunk) [Item 5. Other Information](index=36&type=section&id=Item%205.%20Other%20Information) No Rule 10b5-1 trading plans were adopted or terminated, and the company entered into indemnification agreements with directors - On June 9, 2025, the Company entered into customary indemnification agreements with each of its directors, requiring the company to provide indemnification and advance expense payments under certain circumstances[163](index=163&type=chunk) - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the quarter ended May 4, 2025[162](index=162&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including indemnification agreements, CEO/CFO certifications, and XBRL data - Key exhibits filed include the Form of Director Indemnification Agreement (10.1), CEO/CFO certifications (31.1, 31.2, 32.1, 32.2), and Inline XBRL documents[165](index=165&type=chunk) [Signatures](index=38&type=section&id=SIGNATURES) The Form 10-Q was signed by Eric Rivera, EVP and CFO, on June 11, 2025 - The Form 10-Q was signed by Eric Rivera, EVP and CFO, on June 11, 2025[167](index=167&type=chunk)

Core Viewpoint - Pomerantz LLP is investigating potential securities fraud or unlawful business practices involving Photronics, Inc. and its officers or directors [1] Financial Performance - On May 28, 2025, Photronics reported second-quarter revenue of $210.99 million, a 2.8% year-over-year decline, missing consensus estimates by $1.01 million [3] - The company reported non-GAAP earnings per share of $0.40, which was $0.08 below consensus estimates [3] - Photronics provided third-quarter revenue guidance of $200 million to $208 million, compared to consensus estimates of $220 million [3] Management Changes - Dr. Frank Lee resigned from his position as Chief Executive Officer of Photronics, effective immediately [3] Market Reaction - Following the financial results announcement, Photronics' stock price fell by $3.12 per share, or 15.55%, closing at $16.94 per share on May 28, 2025 [4]