8-K

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

Date of report (Date of earliest event reported)     December 6, 2010   

PHOTRONICS, INC.

(Exact name of registrant as specified in its charter)

Connecticut	0-15451	06-0854886
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification Number)

15 Secor Road, Brookfield, CT	06804
(Address of Principal Executive Offices)	(Zip Code)

Registrant's Telephone Number, including area code    (203) 775-9000  

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

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:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02	Results of Operations and Financial Condition
	On December 6, 2010, the Company issued a press release reporting fourth quarter and fiscal year 2010 results. A copy of the press release is attached to this 8-K.

Item 9.01.		Financial Statements and Exhibits
(d)	Exhibits
	99.1	Press Release dated December 6, 2010
	99.2	Condensed Consolidated Statements of Operations
	99.3	Condensed Consolidated Balance Sheets
	99.4	Condensed Consolidated Statements of Cash Flows
	99.5	Reconciliation of GAAP to Non-GAAP Financial Information

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.

PHOTRONICS, INC.

(Registrant)

DATE:	December 7, 2010	BY	/s/ Richelle E. Burr
			Richelle E. Burr
			Vice President, General Counsel

PHOTRONICS, INC.

EX-99.1

For Further Information:
Sean T. Smith
Senior Vice President
Chief Financial Officer
(203)775-9000
ssmith@photronics.com

Press Release

Photronics Reports Fourth Quarter and Fiscal Year 2010 Results

• Quarterly sales increase 16% year-over-year to $110 million; Annual sales up 18%
• EPS of $0.14 at mid-range of guidance on sales slightly below guidance
• High-end IC photomask sales increased sequentially, and up 121% for the year
• Working capital increased by $9 million sequentially
• Net cash increased $43 million year-over-year

BROOKFIELD, Connecticut December 6, 2010 -- 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 31, 2010.

Constantine (“Deno”) Macricostas, Photronics’ chairman and chief executive officer, commented, “Our 2010 financial results continue to demonstrate the success of our high-end growth strategy. Sales of advanced IC photomasks were steady throughout the fourth quarter, even as we experienced a pause in demand for mainstream products at the beginning of the period. Toward the latter part of the fourth quarter and into the first month of Q1 of fiscal 2011, orders for IC mainstream and FPD photomasks began to increase. As a result of soft demand in August and September, Q4 sales were slightly below our guidance. For this reason, we are particularly pleased that our focus on cost containment enabled us to report non-GAAP diluted EPS of $0.14, which was at the midpoint of our bottom-line guidance range. In addition, our bottom-line p erformance, coupled with our working capital management initiatives, resulted in an improved balance sheet as net cash increased by $43 million year-over-year."

“Going forward, we believe that the investments we have made in leading-edge capabilities position Photronics for significant high-end market share growth,” added Macricostas. “There are several specific opportunities at the advanced nodes, and we expect to see strong demand at the leading edge for both integrated circuits and flat panel displays at least through the first half of the 2011 fiscal year.”

Sales for the fourth quarter were $110.0 million, an increase of 16% compared with $94.7 million for the fourth quarter of fiscal year 2009. Sales of semiconductor photomasks were $85.3 million, or 78% of revenues, during the fourth quarter of fiscal 2010, and sales of flat panel display (FPD) photomasks were $24.7 million, or 22% of revenues. GAAP net income attributable to Photronics, Inc. for the fourth quarter of fiscal 2010 was $8.1 million, or $0.14 earnings per diluted share, compared with net income attributable to Photronics, Inc. of $1.2 million, or $0.11 loss per diluted share, for the fourth quarter of fiscal 2009. The diluted loss per share for the fourth quarter of fiscal 2009 reflects the assumed conversion of warrants to acquire 1.4 million shares originally issued in connect ion with the Company's May 2009 credit facility amendment as well as the associated assumed reversal of $6.5 million in mark-to-market gains which were recorded in other income.

1

Non-GAAP net income attributable to Photronics, Inc. for the fourth quarter of 2010 was $8.5 million, or $0.14 earnings per diluted share, compared with non-GAAP net loss attributable to Photronics, Inc. of $3.2 million, or $0.07 loss per diluted share, for the fourth quarter of 2009. 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.

Sales for the 2010 fiscal year increased 18% to $425.6 million compared with $361.4 million for the 2009 fiscal year. Sales of semiconductor photomasks were $329.8 million, or 77% of revenues for the 2010 fiscal year, and sales of FPD photomasks were $95.8 million, or 23% of revenues. GAAP net income attributable to Photronics, Inc. for the 2010 fiscal year was $23.9 million, or $0.43 earnings per diluted share, compared with the prior year's net loss of $41.9 million, or $0.97 loss per diluted share. Non-GAAP net income attributable to Photronics, Inc. for the 2010 fiscal year was $21.2 million, or $0.38 earnings per diluted share, compared with non-GAAP net loss attributable to Photronics, Inc. for the 2009 fiscal year of $26.2 million, or $0.63 loss per diluted share.

Non-GAAP Financial Measures

Non-GAAP net income (loss) attributable to Photronics, Inc. and non-GAAP earnings (loss) 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 (loss) attributable to Photronics, Inc. and non-GAAP earnings (loss) 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 its projected earnings and performance with its historical results from prior periods. These non-GAAP metrics, in particular non-GAAP net income (loss) attributable to Photronics, Inc. and non-GAAP earnings (loss) per s hare, 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 (loss), net income (loss) or cash flows from operations 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:

2

• Consolidation and restructuring charges (credits) are excluded because they are not a part of ongoing operations.
   
• Gain on sale of facility is excluded because it is not a part of ongoing operations.
   
• Deferred financing fees write-off net of interest savings, is excluded because it is not a part of ongoing operations and was not anticipated when establishing forecast guidance.
   
• Impact of financing expenses related to warrants is excluded because it does not affect cash earnings.
   
• Impairment of long-lived assets is excluded because it does not affect cash earnings and 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 Tuesday, December 7, 2010. 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.

#  #  #

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 fa cilities 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 t o any forward-looking statements.

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EX-99.2

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

	Three Months Ended						Year Ended
	October 31,			November 1,			October 31,			November 1,
	2010			2009			2010			2009
Net sales	$	110,036		$	94,677		$	425,554		$	361,353
Costs and expenses:
Cost of sales		(84,760	)		(77,660	)		(333,739	)		(304,282	)
Selling, general and administrative		(10,300	)		(10,166	)		(42,387	)		(41,162	)
Research and development		(3,949	)		(3,768	)		(14,932	)		(15,423	)
Consolidation, restructuring and related (charges) credits		168			(811	)		4,979			(13,557	)
Impairment of long-lived assets		-			-			-			(1,458	)
Gain on sale of facility		-			2,034			-			2,034
Operating income (loss)		11,195			4,306			39,475			(12,495	)
Other expense, net		(1,052	)		(1,765	)		(6,922	)		(24,609	)
Income (loss) before income taxes		10,143			2,541			32,553			(37,104	)
Income tax provision		(1,682	)		(1,398	)		(7,471	)		(4,323	)
Net income (loss)		8,461			1,143			25,082			(41,427	)
Net (income) loss attributable to noncontrolling interests		(317	)		98			(1,160	)		(483	)
Net income (loss) attributable to Photronics, Inc.	$	8,144		$	1,241		$	23,922		$	(41,910	)
Earnings (loss) per share:
Basic	$	0.15		$	0.03		$	0.45		$	(0.97	)
Diluted	$	0.14		$	(0.11	)	$	0.43		$	(0.97	)
Weighted-average number of common shares outstanding
Basic		53,710			47,522			53,433			43,210
Diluted		66,145			48,907			65,803			43,210

EX-99.3

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

	October 31,		November 1,
	2010		2009
Assets
Current assets:
Cash and cash equivalents	$	98,945	$	88,539
Accounts receivable		82,951		66,920
Inventories		15,502		14,826
Other current assets		8,404		9,712
Total current assets		205,802		179,997
Property, plant and equipment, net		369,814		347,889
Investment in joint venture		61,127		60,945
Intangible assets, net		47,748		55,054
Other assets		19,388		19,771
	$	703,879	$	663,656
Liabilities and Equity
Current liabilities:
Current portion of long-term borrowings	$	11,467	$	10,301
Accounts payable and accrued liabilities		107,762		80,154
Total current liabilities		119,229		90,455
Long-term borrowings		78,852		112,137
Deferred income taxes and other liabilities		9,855		11,368
Equity		495,943		449,696
	$	703,879	$	663,656

EX-99.4

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

	Year Ended
	October 31,			November 1,
	2010			2009
Cash flows from operating activities:
Net income (loss)	$	25,082		$	(41,427	)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization		90,300			90,474
Gain on sale of facility		-			(2,034	)
Consolidation, restructuring, and related charges (credits) and impairments of long-lived assets		(5,059	)		11,972
Changes in assets and liabilities and other		(14,404	)		9,163
Net cash provided by operating activities		95,919			68,148
Cash flows from investing activities:
Purchases of property, plant and equipment		(71,381	)		(34,995	)
Proceeds from sale of facility		12,880			4,321
Distribution from joint venture		-			5,000
Proceeds from sales of investments and other		289			996
Net cash used in investing activities		(58,212	)		(24,678	)
Cash flows from financing activities:
Repayments of long-term borrowings		(72,932	)		(161,841	)
Proceeds from long-term borrowings		41,680			28,112
Net proceeds from convertible debt and common stock offerings		-			97,961
Payments of deferred financing fees and other		(1,204	)		(4,734	)
Net cash used in financing activities		(32,456	)		(40,502	)
Effect of exchange rate changes on cash		5,155			1,808
Net increase in cash and cash equivalents		10,406			4,776
Cash and cash equivalents, beginning of year		88,539			83,763
Cash and cash equivalents, end of year	$	98,945		$	88,539
Supplemental disclosure of cash flow information:
Changes in accrual for purchases of property, plant and equipment	$	28,717		$	(13,551	)
Change in capital lease obligation for purchases of property, plant and
equipment	$	-		$	(28,244	)
Common stock warrants issuance	$	-		$	5,320

EX-99.5

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 31,			November 1,			October 31,			November 1,
	2010			2009			2010			2009
Reconciliation of GAAP to Non-GAAP Net Income (Loss)
Attributable to Photronics, Inc.
GAAP net income (loss) attributable to Photronics, Inc.	$	8,144		$	1,241		$	23,922		$	(41,910	)
(a) Consolidation and restructure charges (credits), net of tax		(168	)		626			(4,979	)		12,913
(b) Gain on sale of facility, net of tax		-			(1,474	)		-			(1,474	)
(c) Deferred financing fees write-off, net of interest savings,
net of tax		-			2,942			1,011			2,942
(d) Impact of warrants, net of tax		554			(6,544	)		1,246			304
(e) Impairment of long-lived assets, net of tax		-			-			-			1,050
Non-GAAP net income (loss) attributable to Photronics, Inc.	$	8,530		$	(3,209	)	$	21,200		$	(26,175	)
Weighted-average number of diluted shares outstanding:
GAAP		66,145			48,907			65,803			43,210
(f) Adjustment to exclude equivalent shares issued
September 16, 2009		-			(5,603	)		-			(1,401	)
Non-GAAP		66,145			43,304			65,803			41,809
Earnings (loss) per diluted share:
GAAP	$	0.14		$	(0.11	)	$	0.43		$	(0.97	)
Non-GAAP	$	0.14		$	(0.07	)	$	0.38		$	(0.63	)

(a)	Includes charges related to restructurings in China and United Kingdom.
(b)	Represents net gain recognized on sale of Manchester, United Kingdom facility.
(c)	Represents write-off of deferred financing fees recorded in interest expense as a result of an amendment to the revolving credit facility and reduced debt, offset in 2009 by reduced interest expense that resulted from debt repayment with the proceeds of the common stock and senior unsecured debt issuance.
(d)	Represents market value impact of outstanding warrants, and in 2009 the clawback of warrants, recorded in other income (expense).
(e)	Represents long-lived assets impairment charge, net of tax.
(f)	Adjustment to reflect the excluded impact on weighted-average shares outstanding during quarter and year in 2009 of the equivalent shares issued on September 16, 2009.