Photronics: Record Fiscal Year Revenues

Record Revenues of $455 Million
Free Cash Flow of $22 million

Photronics, Inc., a worldwide leader in supplying innovative imaging technology solutions for the global electronics industry, today reported fiscal 2006 fourth quarter and fiscal year results for the period ended October 29, 2006.

Sales for the quarter were $115.3 million, up 3.1%, compared to $111.8 million for the fourth quarter of 2005. Semiconductor photomasks accounted for $90.5 million or 78.5% of revenues during the fourth quarter of fiscal 2006, while sales for flat panel display (FPD) photomasks accounted for $24.8 million or 21.5% of revenues. Net income for the fourth quarter of fiscal 2006 amounted to $9.8 million, or $0.21 per diluted share, compared to the prior year's fourth quarter net income of $8.7 million, or $0.19 per diluted share. Net income for the fourth quarter of 2006 included a charge of $2.4 million after tax, or $0.05 per diluted share in connection with the Company's previously disclosed restructuring of its operations in North America.

Sales for the 2006 fiscal year were $454.9 million, up 3.2% from the $440.8 million reported in fiscal 2005. Semiconductor photomasks accounted for $355.1 million or 78.1% of revenues during fiscal 2006, while sales for FPD photomasks accounted for $99.8 million or 21.9%. Year-over-year, semiconductor photomask revenues decreased 1.8%, while FPD photomask revenues increased 25.9%. Net income for fiscal 2006 amounted to $29.3 million, or $0.66 per diluted share, compared to the prior fiscal year's net income of $38.7 million, or $0.95 per diluted share. Net income for the 2006 fiscal year included a charge of $15.6 million after tax, or $0.31 per diluted share in connection with the Company's previously disclosed restructuring of its operations in North America.

Michael J. Luttati, Chief Executive Officer shared his views of the Company's reported results. "We are very pleased to have finished our fiscal year on a high note with solid performance in our fourth quarter. The entire Photronics team executed with clarity and purpose throughout fiscal 2006 to deliver positive results while undertaking a significant transformation of the Company. As we take measure of our many achievements, which include a third consecutive year of record revenues; sustained profitability; and a self funded capital investment program, it is important to frame them around three major initiatives.

First, our presence in the FPD mask market was meaningfully expanded as we capitalized on investments in our existing Korean fab and brought on-line our new fab in Taichung, Taiwan. Second, we reshaped the profile of our global manufacturing network as part of our strategy to shift capacity into the Asian and European markets where we could improve asset utilization. Finally, there is the joint venture with Micron Technology to form the MP Mask Technology Center, LLC. This joint venture represents a unique customer-supplier partnership, which will have a profound effect on Photronics' global business model in terms of accelerating our penetration into the market for sub-65 nanometer designs" - Photronics.