Company Continues to Reduce Operating Costs
Minimal, If Any Revenue Impact
Photronics, Inc. (Nasdaq:PLAB), a worldwide leader in supplying
innovative imaging technology solutions for the global electronics
industry, today announced that it is closing its integrated circuit
photomask manufacturing facility in Shanghai, China. The closure is
consistent with Photronics strategy to reduce costs and lower its
operational breakeven point.
In connection with the announced closure, Photronics expects to record
an after tax charge of approximately $10 million to $14 million in
fiscal 2009. Approximately 90% of the total charges will be attributed
to non-cash items. The Company also estimates that 75 employees will be
affected by the closure. Due to the ability to service customers from
other Photronics’ locations, the Company expects minimal, if any revenue
impact.
"While we remain extremely optimistic in our ability to continue growing
our business within Asia, the integrated circuit mask market in China is
not materializing as we had hoped," explained Constantine S.
Macricostas, Photronics' chairman and chief executive officer.
"Unfortunately China’s photomask market remains relatively small and we
do not foresee a viable path to profitability within an acceptable
timeframe. To retain our cost competitiveness we must align our
manufacturing capacity with end-market demand," concluded Mr.
Macricostas.
After the closure, Photronics will have nine global manufacturing
facilities with four located within Asia. The remaining Asian locations
include Korea, Singapore, and two sites in Taiwan. Once completed the
Company expects to realize annual savings ranging from $4 to $5 million.
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 as discussed in filings with the U. S. Securities and Exchange
Commission (SEC). 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. The Company assumes no
obligation to provide revisions to any forward-looking statements.
12-2009
For Further Information:
Photronics, Inc.
Scott J.
Gish, 203-775-9000
Vice President
Corporate Communications
sgish@photronics.com
