Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Oct. 31, 2019 | Dec. 13, 2019 | Apr. 28, 2019 | |
Cover [Abstract] | |||
Entity Registrant Name | PHOTRONICS INC | ||
Entity Central Index Key | 0000810136 | ||
Current Fiscal Year End Date | --10-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Shell Company | false | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Public Float | $ 617,084,612 | ||
Entity Common Stock, Shares Outstanding | 65,416,365 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Oct. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 0-15451 | ||
Entity Tax Identification Number | 06-0854886 | ||
Entity Incorporation, State or Country Code | CT | ||
Entity Address, Address Line One | 15 Secor Road | ||
Entity Address, City or Town | Brookfield | ||
Entity Address, State or Province | CT | ||
Entity Address, Postal Zip Code | 06804 | ||
City Area Code | 203 | ||
Local Phone Number | 775-9000 | ||
Title of 12(b) Security | COMMON | ||
Trading Symbol | PLAB | ||
Security Exchange Name | NASDAQ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Oct. 31, 2019 | Oct. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 206,530 | $ 329,277 |
Accounts receivable, net of allowance of $1,334 in 2019 and $1,526 in 2018 | 134,454 | 120,515 |
Inventories | 48,155 | 29,180 |
Other current assets | 38,388 | 23,759 |
Total current assets | 427,527 | 502,731 |
Property, plant and equipment, net | 632,441 | 571,781 |
Intangible assets, net | 7,870 | 12,368 |
Deferred income taxes | 20,779 | 18,109 |
Other assets | 30,048 | 5,020 |
Total assets | 1,118,665 | 1,110,009 |
Current liabilities: | ||
Short-term debt | 8,731 | 0 |
Current portion of long-term debt | 2,142 | 57,453 |
Accounts payable | 91,379 | 89,149 |
Accrued liabilities | 49,702 | 44,474 |
Total current liabilities | 151,954 | 191,076 |
Long-term debt | 41,887 | 0 |
Other liabilities | 13,732 | 14,364 |
Total liabilities | 207,573 | 205,440 |
Commitments and contingencies | ||
Equity: | ||
Preferred stock, $0.01 par value, 2,000 shares authorized, none issued and outstanding | 0 | 0 |
Common stock, $0.01 par value, 150,000 shares authorized, 65,595 shares issued and outstanding at October 31, 2019, and 69,700 shares issued and 67,142 outstanding at October 31, 2018 | 656 | 697 |
Additional paid-in capital | 524,319 | 555,606 |
Retained earnings | 253,922 | 231,445 |
Treasury stock, 0 shares at October 31, 2019 and 2,558 shares at October 31, 2018 | 0 | (23,111) |
Accumulated other comprehensive loss | (9,005) | (4,966) |
Total Photronics, Inc. shareholders' equity | 769,892 | 759,671 |
Noncontrolling interests | 141,200 | 144,898 |
Total equity | 911,092 | 904,569 |
Total liabilities and equity | $ 1,118,665 | $ 1,110,009 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Oct. 31, 2019 | Oct. 31, 2018 |
Current assets: | ||
Accounts receivable, allowance | $ 1,334 | $ 1,526 |
Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 2,000 | 2,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 150,000 | 150,000 |
Common stock, shares issued (in shares) | 65,595 | 69,700 |
Common stock, shares outstanding (in shares) | 65,595 | 67,142 |
Treasury stock, shares (in shares) | 0 | 2,558 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||||
Oct. 31, 2019 | Oct. 31, 2018 | Oct. 29, 2017 | |||
Consolidated Statements of Income [Abstract] | |||||
Revenue | $ 550,660 | [1] | $ 535,276 | [1] | $ 450,678 |
Cost of goods sold | 429,819 | 403,773 | 359,363 | ||
Gross profit | 120,841 | 131,503 | [1] | 91,315 | |
Operating expenses: | |||||
Selling, general and administrative | 52,326 | 51,395 | 43,585 | ||
Research and development | 16,394 | 14,481 | 15,862 | ||
Total operating expenses | 68,720 | 65,876 | 59,447 | ||
Operating income | 52,121 | 65,627 | 31,868 | ||
Other income (expense): | |||||
Interest income and other income (expense), net | 5 | 5,206 | (3,068) | ||
Interest expense | (1,425) | (2,262) | (2,235) | ||
Income before income tax provision | 50,701 | 68,571 | 26,565 | ||
Income tax provision | 10,210 | 7,335 | 5,276 | ||
Net income | 40,491 | 61,236 | [1] | 21,289 | |
Net income attributable to noncontrolling interests | 10,698 | 19,181 | 8,159 | ||
Net income attributable to Photronics, Inc. shareholders | $ 29,793 | $ 42,055 | [1] | $ 13,130 | |
Earnings per share: | |||||
Basic (in dollars per share) | $ 0.45 | $ 0.61 | [1] | $ 0.19 | |
Diluted (in dollars per share) | $ 0.44 | $ 0.59 | [1] | $ 0.19 | |
Weighted-average number of common shares outstanding: | |||||
Basic (in shares) | 66,347 | 68,829 | 68,436 | ||
Diluted (in shares) | 69,155 | 74,821 | 69,288 | ||
[1] | Includes $0.6 million gain on sale of assets. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | |||
Oct. 31, 2019 | Oct. 31, 2018 | Oct. 29, 2017 | ||
Consolidated Statements of Comprehensive Income [Abstract] | ||||
Net income | $ 40,491 | $ 61,236 | [1] | $ 21,289 |
Other comprehensive (loss) income, net of tax: | ||||
Foreign currency translation adjustments | (2,877) | (16,672) | 19,799 | |
Amortization of cash flow hedge | 0 | 48 | 129 | |
Other | (74) | 101 | 478 | |
Net other comprehensive (loss) income | (2,951) | (16,523) | 20,406 | |
Comprehensive income | 37,540 | 44,713 | 41,695 | |
Less: comprehensive income attributable to noncontrolling interests | 11,786 | 14,515 | 14,003 | |
Comprehensive income attributable to Photronics, Inc. shareholders | $ 25,754 | $ 30,198 | $ 27,692 | |
[1] | Includes $0.6 million gain on sale of assets. |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Non-Controlling Interests [Member] | Total | |
Balance at Oct. 30, 2016 | $ 681 | $ 541,093 | $ 176,260 | $ 0 | $ (7,671) | $ 115,111 | $ 825,474 | |
Beginning (in shares) at Oct. 30, 2016 | 68,080 | |||||||
Net income | $ 0 | 0 | 13,130 | 0 | 0 | 8,159 | 21,289 | |
Other comprehensive (loss) income | 0 | 0 | 0 | 0 | 14,562 | 5,844 | 20,406 | |
Sale of common stock through employee stock option and purchase plans | $ 5 | 2,877 | 0 | 0 | 0 | 0 | 2,882 | |
Sale of common stock through employee stock option and purchase plans (in shares) | 459 | |||||||
Restricted stock awards vesting and expense | $ 1 | 1,508 | 0 | 0 | 0 | 0 | 1,509 | |
Restricted stock awards vesting and expense (in shares) | 127 | |||||||
Share-based compensation expense | $ 0 | 2,118 | 0 | 0 | 0 | 0 | 2,118 | |
Dividends to noncontrolling interest | 0 | 0 | 0 | 0 | 0 | (8,383) | (8,383) | |
Balance at Oct. 29, 2017 | $ 687 | 547,596 | 189,390 | 0 | 6,891 | 120,731 | 865,295 | |
Balance (in shares) at Oct. 29, 2017 | 68,666 | |||||||
Net income | $ 0 | 0 | 42,055 | 0 | 0 | 19,181 | 61,236 | [1] |
Other comprehensive (loss) income | 0 | 0 | 0 | 0 | (11,857) | (4,666) | (16,523) | |
Sale of common stock through employee stock option and purchase plans | $ 9 | 4,683 | 0 | 0 | 0 | 0 | 4,692 | |
Sale of common stock through employee stock option and purchase plans (in shares) | 870 | |||||||
Restricted stock awards vesting and expense | $ 1 | 1,747 | 0 | 0 | 0 | 0 | 1,748 | |
Restricted stock awards vesting and expense (in shares) | 164 | |||||||
Share-based compensation expense | $ 0 | 1,432 | 0 | 0 | 0 | 0 | 1,432 | |
Contribution from noncontrolling interest | 0 | 148 | 0 | 0 | 0 | 17,848 | 17,996 | |
Dividends to noncontrolling interest | 0 | 0 | 0 | 0 | 0 | (8,196) | (8,196) | |
Purchases of treasury stock | $ 0 | 0 | 0 | (23,111) | 0 | 0 | $ (23,111) | |
Purchase of treasury stock (in shares) | 0 | 2,558 | ||||||
Balance at Oct. 31, 2018 | $ 697 | 555,606 | 231,445 | (23,111) | (4,966) | 144,898 | $ 904,569 | |
Balance (in shares) at Oct. 31, 2018 | 69,700 | |||||||
Balance at Oct. 29, 2017 | $ 687 | 547,596 | 189,390 | 0 | 6,891 | 120,731 | 865,295 | |
Beginning (in shares) at Oct. 29, 2017 | 68,666 | |||||||
Purchases of treasury stock | $ (44,807) | |||||||
Purchase of treasury stock (in shares) | 4,691 | |||||||
Balance at Oct. 31, 2019 | $ 656 | 524,319 | 253,922 | 0 | (9,005) | 141,200 | $ 911,092 | |
Balance (in shares) at Oct. 31, 2019 | 65,595 | |||||||
Cumulative effect of adoption of new accounting principle | ASU 2014-09 [Member] | $ 0 | 0 | 1,083 | 0 | 0 | 121 | 1,204 | |
Cumulative effect of adoption of new accounting principle | ASU 2016-16 [Member] | 0 | 0 | (1,130) | 0 | 0 | (3) | (1,133) | |
Balance at Oct. 31, 2018 | $ 697 | 555,606 | 231,445 | (23,111) | (4,966) | 144,898 | 904,569 | |
Beginning (in shares) at Oct. 31, 2018 | 69,700 | |||||||
Net income | $ 0 | 0 | 29,793 | 0 | 0 | 10,698 | 40,491 | |
Other comprehensive (loss) income | 0 | 0 | 0 | 0 | (4,039) | 1,088 | (2,951) | |
Sale of common stock through employee stock option and purchase plans | $ 4 | 2,524 | 0 | 0 | 0 | 0 | 2,528 | |
Sale of common stock through employee stock option and purchase plans (in shares) | 390 | |||||||
Restricted stock awards vesting and expense | $ 2 | 2,497 | 0 | 0 | 0 | 0 | 2,499 | |
Restricted stock awards vesting and expense (in shares) | 196 | |||||||
Share-based compensation expense | $ 0 | 1,183 | 0 | 0 | 0 | 0 | 1,183 | |
Contribution from noncontrolling interest | 0 | 0 | 0 | 0 | 0 | 29,394 | 29,394 | |
Dividends to noncontrolling interest | 0 | 0 | 0 | 0 | 0 | (44,939) | (44,939) | |
Repurchase of common stock by subsidiary | 0 | 0 | 0 | 0 | 0 | (57) | (57) | |
Purchases of treasury stock | $ 0 | 0 | 0 | (21,696) | 0 | 0 | $ (21,696) | |
Purchase of treasury stock (in shares) | 0 | 2,133 | ||||||
Retirement of treasury stock | $ (47) | (37,491) | (7,269) | 44,807 | 0 | 0 | $ 0 | |
Retirement of treasury stock (in shares) | (4,691) | |||||||
Balance at Oct. 31, 2019 | $ 656 | $ 524,319 | $ 253,922 | $ 0 | $ (9,005) | $ 141,200 | $ 911,092 | |
Balance (in shares) at Oct. 31, 2019 | 65,595 | |||||||
[1] | Includes $0.6 million gain on sale of assets. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |||||
Oct. 31, 2019 | Oct. 31, 2018 | Oct. 29, 2017 | ||||
Cash flows from operating activities: | ||||||
Net income | $ 40,491 | $ 61,236 | [1] | $ 21,289 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization of property, plant and equipment | 79,238 | 79,536 | 81,699 | |||
Amortization of intangible assets | 4,641 | 4,797 | 4,874 | |||
Share-based compensation | 3,680 | 3,180 | 3,627 | |||
Deferred income taxes | (3,662) | (273) | 1,633 | |||
Changes in assets, liabilities, and other: | ||||||
Accounts receivable | (12,321) | (18,553) | (9,625) | |||
Inventories | (23,088) | (6,162) | (602) | |||
Other current assets | (8,631) | (11,731) | 1,127 | |||
Accounts payable, accrued liabilities and other | (11,962) | 18,537 | (7,189) | |||
Net cash provided by operating activities | 68,386 | 130,567 | 96,833 | |||
Cash flows from investing activities: | ||||||
Purchases of property, plant and equipment | (178,375) | (92,585) | (91,965) | |||
Government incentives | 27,003 | 1,005 | 0 | |||
Purchases of intangible assets | (95) | (218) | (834) | |||
Proceeds from sales of investments | 0 | 0 | 167 | |||
Acquisition of business | 0 | 0 | (5,400) | |||
Other | 61 | 929 | [2] | 17 | [2] | |
Net cash used in investing activities | (151,406) | (90,869) | (98,015) | |||
Cash flows from financing activities: | ||||||
Proceeds from debt | 54,633 | 0 | 0 | |||
Contribution from noncontrolling interests | 29,394 | 17,996 | 0 | |||
Repayments of debt | (61,319) | (4,639) | (5,428) | |||
Dividends paid to noncontrolling interests | (45,050) | (8,166) | (8,298) | |||
Purchases of treasury stock | (21,696) | (23,111) | 0 | |||
Proceeds from share-based arrangements | 2,071 | 4,634 | 2,830 | |||
Other | (92) | (519) | (32) | |||
Net cash used in financing activities | (42,059) | (13,805) | (10,928) | |||
Effects of exchange rate changes on cash, cash equivalents, and restricted cash | 2,381 | (4,840) | [2] | 6,247 | [2] | |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (122,698) | 21,053 | [2] | (5,863) | [2] | |
Cash, cash equivalents, and restricted cash at beginning of year | 331,989 | [2] | 310,936 | [2] | 316,799 | |
Cash, cash equivalents, and restricted cash at end of year | 209,291 | 331,989 | [2] | 310,936 | [2] | |
Supplemental disclosure of non-cash information: | ||||||
Accrual for property, plant and equipment purchased during year | $ 13,671 | $ 29,602 | $ 2,767 | |||
[1] | Includes $0.6 million gain on sale of assets. | |||||
[2] | Amount has been modified to reflect the adoption of ASU 2016-18 (see Note 22). |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Oct. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Photronics, Inc. ("Photronics", "the Company", "we", “our”, or "us") is one of the world's leading manufacturers of photomasks, which are high-precision photographic quartz or glass plates containing microscopic images of electronic circuits. Photomasks are a key element in the manufacture of semiconductors and flat-panel displays ("FPDs"), and are used as masters to transfer circuit patterns onto semiconductor wafers and FPD substrates during the fabrication of integrated circuits ("ICs" or “semiconductors”) and a variety of FPDs and, to a lesser extent, other types of electrical and optical components. We currently have eleven manufacturing facilities, which are located in Taiwan ( 3 ), Korea, the United States ( 3 ), Europe ( 2 ), and two recently constructed facilities in China. Our FPD Facility in Hefei, China, commenced production in the second quarter of fiscal 2019 and our IC facility in Xiamen, China, commenced production in the third quarter of fiscal 2019. Consolidation The accompanying consolidated financial statements include the accounts of Photronics, Inc. , its wholly owned subsidiaries, and the majority-owned subsidiaries which it controls. All intercompany balances and transactions have been eliminated in consolidation. Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect amounts reported in them. Estimates are based on historical experience and on various assumptions that are believed to be reasonable under the circumstances. Our estimates are based on the facts and circumstances available at the time they are made. Actual results we report may differ from such estimates. We review these estimates periodically and reflect any effects of revisions in the period in which they are determined. Fiscal Year Commencing with our 2018 fiscal year, our fiscal year ends on October 31. In prior years, our fiscal years ended on the Sunday closest to October 31. Prior year results in this Form 10-K have not been restated to reflect year-end dates of October 31. Cash and Cash Equivalents Cash and cash equivalents include cash and highly liquid investments with an original maturity of three months or less The carrying values of cash equivalents approximate their fair values, due to the short-term maturities of these instruments. Accounts Receivable and Allowance for Doubtful Accounts We Inventories Inventories are stated at the lower of cost, determined under the first-in, first-out (“FIFO”) method, or net realizable value. Presented below are the components of inventory at the balance sheet dates: October 31 2019 October 31 2018 Raw materials $ 46,027 $ 25,110 Work in process 2,122 3,402 Finished goods 6 668 $ 48,155 $ 29,180 Property, Plant and Equipment Property, plant and equipment, except as explained below under “Impairment of Long-Lived Assets,” is stated at cost less accumulated depreciation and amortization. Repairs and maintenance, as well as renewals and replacements of a routine nature, are charged to operations as incurred, while those that improve, or extend the lives of, existing assets are capitalized. Upon sale or other disposition, the cost of the asset and its related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in earnings. Depreciation and amortization, essentially all of which are included in cost of goods sold, are computed using the straight-line method over the estimated useful lives of the related assets. Buildings and improvements are depreciated over 10 to 39 years, machinery and equipment over 5 to 15 years, and furniture, fixtures and office equipment over 3 to 5 years. Leasehold improvements are amortized over the life of the lease or the estimated useful life of the improvement, whichever is less. We employ judgment and assumptions when we establish estimated useful lives and depreciation periods, as well as when we periodically review property, plant and equipment for any potential impairment in carrying values, whenever events such as a significant industry downturn, plant closures, technological obsolescence, or other change in circumstances indicate that their carrying amounts may not be recoverable. Intangible Assets Intangible assets consist primarily of a technology license agreement and acquisition-related intangibles. These assets, except as explained below, are stated at fair value as of the date acquired, less accumulated amortization. Amortization is calculated based on the estimated useful lives of the assets, which range from 3 to 15 years, using the straight-line method or another method that more fairly represents the utilization of the assets. We periodically evaluate the remaining useful lives of our intangible assets to determine whether events or circumstances warrant a revision to the remaining periods of amortization. In the event that the estimate of an intangible asset’s remaining useful life has changed, the remaining carrying amount of the intangible asset is amortized prospectively over that revised remaining useful life. If it is determined that an intangible asset has an indefinite useful life, that intangible asset would be subject to impairment testing annually or whenever events or circumstances indicate that its carrying value may not, based on future undiscounted cash flows or market factors, be recoverable. An impairment loss, the recorded amount of which would be based on the fair value of the intangible asset at the measurement date, would be recorded in the period in which the impairment determination was made. Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determinations of recoverability are based upon our judgment and estimates of undiscounted future cash flows resulting from the use of the assets and their eventual disposition. Measurement of an impairment loss for long-lived assets that we expect to hold and use is based on the fair value of the assets determined using a market or income approach compared with the carrying value of the asset. The carrying values of assets determined to be impaired would be reduced to their estimated fair values. Restricted Cash Restricted cash in the amounts of $2.8 million and $2.7 million are included in “Other assets” on our October 31, 2019 and October 31, 2018, consolidated balance sheets, respectively. The restrictions on these amounts are primarily related to land lease agreements and customs requirements. Business Combinations When acquiring other businesses, or participating in mergers or joint ventures in which we are deemed to be the acquirer, we generally recognize identifiable assets acquired, liabilities assumed and any noncontrolling interests at their acquisition date fair values, separately from any goodwill that may be required to be recognized. Goodwill, when recognizable, would be measured as the excess amount of any consideration transferred, which is generally measured at fair value, over the acquisition date fair values of the identifiable assets acquired and liabilities assumed. Accounting for such transactions requires us to make significant assumptions and estimates and, although we believe any estimates and assumptions we make to be reasonable and appropriate at the time they are made, unanticipated events and circumstances may arise that affect their accuracy, which may cause actual results to differ from those we estimated. When required, we will adjust the values of the assets acquired and liabilities assumed against the acquisition gain or goodwill, as initially recorded, for a period of up to one year after the transaction. Costs incurred to effect a merger or acquisition, such as legal, accounting, valuation and other third-party costs, as well as internal general and administrative costs incurred are charged to expense in the periods incurred. Costs incurred to issue any debt and equity securities are recognized in accordance with other applicable generally accepted accounting principles. Investments in Joint Ventures The financial results of investments in joint ventures in which we have a controlling financial interest are included in our consolidated financial statements. Investments in joint ventures over which we have the ability to exercise significant influence and that, in general, are at least twenty percent owned are accounted for under the equity method. An impairment loss would be recognized whenever a decrease in the fair value of such an investment below its carrying amount is determined to be other than temporary. In judging "other than temporary," we would consider the length of time and the extent to which the fair value of the investment has been less than its carrying amount, the near-term and longer-term operating and financial prospects of the investee, and our longer-term intent of retaining our investment in the investee. Variable Interest Entities We account for the investments we make in certain legal entities in which equity investors do not have 1) sufficient equity at risk for the legal entity to finance its activities without additional subordinated financial support or, 2) as a group, the holders of the equity investment at risk do not have either the power, through voting or similar rights, to direct the activities of the legal entity that most significantly impact the entity’s economic performance or, 3) the obligation to absorb the expected losses of the legal entity or the right to receive expected residual returns of the legal entity as “variable interest entities”, or “VIEs”. We consolidate the results of any such entity in which we have determined that we have a controlling financial interest. We would have a “controlling financial interest” (and thus be considered the “primary beneficiary” of the entity) in such an entity when we have both the power to direct the activities that most significantly affect the VIE’s economic performance and the obligation to absorb the losses of, or right to receive the benefits from, the VIE that could be potentially significant to the VIE. On a quarterly basis, we reassess whether we have a controlling financial interest in any investments we have in these entities. We account for investments we make in VIEs in which we have determined that we do not have a controlling financial interest but have a significant influence over, and hold at least a twenty percent ownership interest in, using the equity method. Any such investment not meeting the parameters to be accounted for under the equity method would be accounted for using the cost method, unless the investment had a readily determinable fair value, at which value it would then be reported. Income Taxes The income tax provision is computed on the basis of the various tax jurisdictions' income or loss before income taxes. Deferred income taxes reflect the tax effects of differences between the carrying amounts of assets and liabilities for financial reporting purposes and their amounts used for income tax purposes, as well as the tax effects of net operating losses and tax credit carryforwards. We use judgment and make assumptions to determine if valuation allowances for deferred income tax assets are required, if their realization is not more likely than not, by considering future market growth, operating forecasts, future taxable income, and the mix of earnings among the tax jurisdictions in which we operate. Accordingly, income taxes charged against earnings may have been impacted by changes in the valuation allowances. We consider income taxes in each of the tax jurisdictions in which we operate in order to determine our effective income tax rate. Our current income tax expense is thus identified, and temporary differences resulting from differing treatments of items for tax and financial reporting purposes are assessed. These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets. We account for uncertain tax positions by recording a liability for unrecognized tax benefits resulting from uncertain tax positions taken, or expected to be taken, in our tax returns. We include any applicable interest and penalties related to uncertain tax positions in our income tax provision. Treasury Stock We record treasury stock purchases under the cost method, recording the entire cost of the acquired stock as treasury stock. Gains and losses on subsequent reissuances would be credited or charged to additional paid-in capital, and we would employ the average cost method (with average cost being determined separately for each share repurchase program), in the event that we subsequently reissue shares. Earnings Per Share Basic earnings per share ("EPS") is based on the weighted-average number of common shares outstanding for the period, excluding any dilutive common share equivalents. Diluted EPS reflects the potential dilution that could occur if certain share-based payment awards or financial instruments were exercised, earned or converted. Share-Based Compensation We recognize share-based compensation expense over the service period that the awards are expected to vest. Share-based compensation expense includes the estimated effects of forfeitures, which are adjusted over the requisite service period to the extent actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures are recognized in the period of change, and will impact the amount of expense to be recognized in future periods. Determining the appropriate option pricing model, calculating the grant date fair value of share-based awards and estimating forfeiture rates requires considerable judgment, including estimations of stock price volatility and the expected term of options granted. We use the Black-Scholes option pricing model to value employee stock options. We estimate stock price volatility based on daily averages of our common stock’s historical volatility over a term approximately equal to the estimated time period the grant will remain outstanding. The expected term of options and forfeiture rate assumptions are derived from historical data. Research and Development Research and development costs are expensed as incurred, and consist primarily of development efforts related to high-end process technologies for advanced subwavelength reticle solutions for IC and FPD photomask technologies. Foreign Currency Translation Our non-US subsidiaries maintain their accounts in their respective local currencies. Assets and liabilities of such subsidiaries are translated to U.S. dollars at year-end exchange rates. Income and expenses are translated at average rates of exchange prevailing during the year. Foreign currency translation adjustments are accumulated and reported in accumulated other comprehensive income, a component of equity. The effects of changes in exchange rates on foreign currency transactions, which are included in Interest income and other income (expense) net, were a net (loss)/gain of $(1.3 ) million, $0.4 million and $(5.2 ) million in fiscal years 2019, 2018 and 2017, respectively. Noncontrolling Interests Substantially all of Noncontrolling interests represents the minority shareholders' proportionate share in the equity of two of the Company's majority-owned subsidiaries: Photronics DNP Mask Corporation (“PDMC”) in Taiwan, and Xiamen American Japan Photronics Mask Co., Ltd ("PDMCX") in China, of which noncontrolling interests owned 49.99 % as of October 31, 2019 and October 31, 2018. In addition, noncontrolling shareholders owned approximately 0.2 % of PK Ltd. (“PKL”) in Korea as of October 31, 2019 and October 31, 2018. In November 2019, we acquired the remaining noncontrolling interests’ shares of PKL for approximately $0.6 million Derivative Instruments and Hedging Activities We record derivatives in the consolidated balance sheets as assets or liabilities, measured at fair value. We do not engage in derivative instruments for speculative purposes. Gains or losses resulting from changes in the values of derivatives are reflected in earnings, or as accumulated other comprehensive income or loss, a separate component of equity, depending on the use of the derivatives and whether they qualify for hedge accounting. In order to qualify for hedge accounting, among other criteria, a derivative must be a hedge of an interest rate, price, foreign currency exchange rate, or credit risk that is expected to be highly effective at the inception of the hedge, be highly effective in achieving offsetting changes in the fair value or cash flows of the hedged item during the term of the hedge and formally documented at the inception of the hedge. In general, the types of risks we would hedge are those related to the variability of future cash flows caused by movements in foreign currency exchange and interest rates. We would document our risk management strategy and hedge effectiveness at the inception of, and during the term of, each hedge. Revenue Recognition We adopted Accounting Standards Update 2014-09 and all subsequent amendments which are collectively codified in Accounting Standards Codification Topic 606 - “Revenue from Contracts with Customers” (“Topic 606”) - on November 1, 2018, under the modified retrospective transition method, only with respect to contracts that were not complete as of the date of adoption. This approach required prospective application of the guidance with a cumulative effect adjustment to retained earnings to reflect the impact of the adoption on contracts that were not complete as of the date of the adoption. In accordance with the modified retrospective transition method, the results of the prior year period presented have not been adjusted for the effects of Topic 606. Please see Note 7 for a detailed discussion of our revenue recognition and related accounting policies. Product Warranty Our photomasks are sold under warranties that generally range from one Government Grants We account for funds we receive from government grants by reducing the costs of the assets or expenses to which we apply the funds. Funds we receive that cannot be attributed to specific assets or expenses would be recognized as other income, and included in Interest income and other income (expense), net in the Consolidated Statements of Income. Funds we receive from government grants are classified in our Consolidated Statement of Cash Flows as either cash flows from operating activities or cash flows from investing activities, in accordance with how we expend the funds. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Oct. 31, 2019 | |
PROPERTY, PLANT AND EQUIPMENT [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | NOTE 2 - PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consists of the following: October 31, 2019 October 31, 2018 Land $ 12,085 $ 11,139 Buildings and improvements 172,340 124,771 Machinery and equipment 1,748,483 1,566,163 Leasehold improvements 19,921 19,577 Furniture, fixtures and office equipment 14,404 12,415 Construction in progress 28,135 128,649 1,995,368 1,862,714 Accumulated depreciation and amortization (1,362,927 ) (1,290,933 ) $ 632,441 $ 571,781 In January 2017, we entered into a noncash transaction with a customer which resulted in the acquisition of equipment with a fair value of approximately $6.7 million in fiscal year 2018. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Oct. 31, 2019 | |
INTANGIBLE ASSETS [Abstract] | |
INTANGIBLE ASSETS | NOTE 3 - INTANGIBLE ASSETS Amortization expense of the Company’s finite-lived intangible assets was $4.6 million, $4.8 million and $4.9 million in fiscal years 2019 2018 and 2017, respectively. Intangible assets consist of: As of October 31, 2019 Gross Amount Accumulated Amortization Net Amount Technology license agreement $ 59,616 $ (53,323 ) $ 6,293 Customer relationships 9,174 (8,186 ) 988 Software and other 6,537 (5,948 ) 589 $ 75,327 $ (67,457 ) $ 7,870 As of October 31, 2018 Technology license agreement $ 59,616 $ (49,349 ) $ 10,267 Customer relationships 9,147 (7,959 ) 1,188 Software and other 6,519 (5,606 ) 913 $ 75,282 $ (62,914 ) $ 12,368 The weighted-average amortization period of intangible assets acquired in fiscal year 2019, which is comprised of software, is three years. The weighted-average amortization period of intangible assets acquired in fiscal year 2018 was three years; these intangible assets were comprised of software. Intangible asset amortization over the next five years is estimated to be as follows: Fiscal Years: 2020 $ 4,589 2021 $ 2,721 2022 $ 125 2023 $ 123 2024 $ 123 |
PDMCX JOINT VENTURE
PDMCX JOINT VENTURE | 12 Months Ended |
Oct. 31, 2019 | |
PDMCX JOINT VENTURE [Abstract] | |
PDMCX JOINT VENTURE | NOTE 4 - PDMCX JOINT VENTURE In January 2018, Photronics, through its wholly-owned Singapore subsidiary (hereinafter, within this Note “we”, or “Photronics”), and Dai Nippon Printing Co., Ltd., through its wholly owned subsidiary “DNP Asia Pacific PTE, Ltd.” (hereinafter, within this Note “DNP”) entered into a joint venture under which DNP obtained a interest in our recently established IC business in Xiamen, China. gain or loss was recorded upon the formation of this joint venture. The total investment per the PDMCX operating agreement (“the Agreement”) is $160 million. As of October 31, 2019, Photronics and DNP had each contributed cash of approximately $48 million, and PDMCX obtained local financing of $34.5 million. The remaining $29 million investment will be funded, over the next several quarters, with additional local financing of $15 million and approximately $14 million of cash contributions from Photronics and DNP. Under the Agreement, DNP is afforded, under certain circumstances, the right to put its interest in PDMCX to Photronics. These circumstances include disputes regarding the strategic direction of PDMCX that may arise after the initial two-year twenty percent six three We recorded net losses from the operations of PDMCX of approximately $4.9 million and $0.7 million in fiscal 2019 and 2018, respectively. General creditors of PDMCX do not As required by the guidance in Topic 810 - “Consolidation” of the Accounting Codification Standards, we evaluated our involvement in PDMCX for the purpose of determining whether we should consolidate its results in our financial statements. The initial step of our evaluation was to determine whether PDMCX was a variable interest entity (“VIE”). Due to its lack of sufficient equity at risk to finance its activities without additional subordinated financial support, we determined that it is a VIE. Having made this determination, we then assessed whether we were the primary beneficiary of the VIE, and concluded that we were the primary beneficiary during the current and prior year reporting periods; thus, as required, the PDMCX financial results have been consolidated with Photronics, Inc. Our conclusion was based on the fact that we held a controlling financial interest in PDMCX (which resulted from our having the power to direct the activities that most significantly impacted its economic performance) and had both the obligation to absorb losses and the right to receive benefits that could potentially be significant to PDMCX. Our conclusions that we had the power to direct the activities that most significantly affected the economic performance of PDMCX during the current and prior year periods were based on our right to appoint the majority of its board of directors, which has, among others, the powers to manage the business (through its rights to appoint and evaluate PDMCX’s management), incur indebtedness, enter into agreements and commitments, and acquire and dispose of PDMCX’s assets. In addition, as a result of the 50.01 % variable interest we held during the current and prior year periods, we had the obligation to absorb losses, and the right to receive benefits, that could potentially be significant to PDMCX. The carrying amounts of PDMCX assets and liabilities included in our consolidated balance sheets are presented in the following table, together with our maximum exposures to loss related to these assets and liabilities. October 31, 2019 October 31, 2018 Classification Carrying Amount Photronics Interest Carrying Amount Photronics Interest Current assets $ 24,142 $ 12,074 $ 9,625 $ 4,813 Non-current assets 114,015 57,019 43,415 21,708 Total assets 138,157 69,093 53,040 26,521 Current liabilities 16,889 8,446 21,205 10,603 Non-current liabilities 42,094 21,051 20 10 Total liabilities 58,983 29,497 21,225 10,613 Net assets $ 79,174 $ 39,596 $ 31,815 $ 15,908 |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Oct. 31, 2019 | |
ACCRUED LIABILITIES [Abstract] | |
ACCRUED LIABILITIES | NOTE 5 - ACCRUED LIABILITIES Accrued liabilities consist of the following: October 31, 2019 October 31, 2018 Compensation related expenses $ 14,011 $ 15,359 Income taxes 13,227 10,369 Contract liabilities 11,542 7,834 Value added and other taxes 3,761 3,683 Professional fees 537 1,257 Other 6,624 5,972 $ 49,702 $ 44,474 |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Oct. 31, 2019 | |
LONG-TERM DEBT [Abstract] | |
LONG-TERM DEBT | NOTE 6 - LONG-TERM DEBT Long-term debt consists of the following: October 31, 2019 October 31, 2018 Project Loans $ 34,490 $ - Working Capital Loans (value added tax component) 9,539 - 3.25% convertible senior notes matured April 2019 - 57,453 44,029 57,453 Current portion of long-term debt (2,142 ) (57,453 ) Long-term debt $ 41,887 $ - At October 31, 2019, maturities of our long-term debt over the next five years and thereafter were as follows: 2020 $ 2,142 2021 8,304 2022 12,430 2023 3,441 2024 6,589 Thereafter 11,123 $ 44,029 As of October 31, 2019, the weighted-average interest rate of our short-term debt was . Interest payments were $ million, $ million, and $ million, in fiscal years 2019, 2018 and 2017, respectively. Project Loans In November 2018, PDMCX was approved for credit of $50 million, subject to certain limitations related to PDMCX registered capital at the time of the initial approval, pursuant to which PDMCX has and will enter into separate loan agreements (“the Project Loans”) for intermittent borrowings. The Project Loans, which are denominated in Chinese renminbi (RMB), are being used to finance certain capital expenditures in China. PDMCX granted liens on its land, building, and certain equipment as collateral for the Project Loans. As of October 31, 2019, PDMCX had borrowed 243.4 million RMB ($34.5 million) against this approval. Payments on these borrowings are due semi-annually through December 2025 ; the initial payment is scheduled for June 2020 . The table below presents, in U.S. dollars, the timing of future payments against the borrowings. Fiscal Year 2020 2021 2022 2023 2024 2025 2026 Principal payments $ 1,275 $ 6,377 $ 5,685 $ 3,441 $ 6,589 $ 6,305 $ 4,818 The interest rates on the Project Loans are based on the benchmark lending rate of the People’s Bank of China ( at October 31, 2019). Interest incurred on the loans will be reimbursed through incentives provided by the Xiamen Torch Hi-Tech Industrial Development Zone, which provide for such reimbursements up to a prescribed limit. Working Capital Loans In November 2018, PDMCX received approval for unsecured credit of $25.0 million, pursuant to which PDMCX may enter into separate loan agreements. Under this credit agreement (the “Working Capital Loans”), PDMCX can borrow up to 140.0 million RMB to pay value-added taxes (“VAT”), and up to 60.0 million RMB to fund operations; combined total borrowings are limited to $25.0 million. As of October 31, 2019, PDMCX had 67.3 million RMB ($9.5 million) outstanding against the approval to pay VAT. Payments on these borrowings are due semiannually, at an increasing rate, through January 2022 ; PDMCX made installment payments totaling $0.1 million during the year ended October 31, 2019. The table below presents, in U.S. dollars, the timing of future payments against these borrowings. Fiscal Year 2020 2021 2022 Principal payments $ 867 $ 1,927 $ 6,745 As of October 31, 2019, PDMCX had borrowed, in several transactions, 36.8 million RMB ($5.2 million) against the approval to fund operations, all of which was outstanding as of that date; repayments are due one year from the borrowing dates. In November 2019, PDMCX borrowed an additional 8.0 million RMB ($1.1 million) against this approval. The interest rates on borrowings to fund operations are approximately 4.6% and interest rates on borrowings to pay VAT are approximately 4.9%; both rates are based on the RMB Loan Prime Rate of the National Interbank Funding Center, plus spreads that range from 25.75 67.75 Equipment Loan Effective July 2019, the Company entered into a Master Lease Agreement (“MLA”) which enables us to request advance payments or other funds to finance equipment to be leased or purchased in the U.S. In connection with this MLA, we were approved for financing of $35 million for the purchase of a high-end lithography tool. In the fourth quarter of fiscal 2019, the financing entity, upon our request, made an advance payment of $3.5 million to the equipment vendor on our behalf. Interest on this borrowing is payable monthly at thirty-day LIBOR plus 1% (2.76% at October 31, 2019), and will continue to accrue until the borrowing is repaid or, as allowed under the MLA, we enter into a lease for the equipment. We intend to enter into a lease agreement for the related equipment in fiscal year 2020; as such, we have classified this borrowing as current debt. All borrowings under the MLA are secured by the equipment to be leased or purchased. 3.25% Convertible Senior Notes In January 2015, we privately exchanged $57.5 million in aggregate principal amount of our 3.25% convertible senior notes with a maturity date of April 1, 2016, for new 3.25% convertible senior notes with an aggregate principal amount of $57.5 million with a maturity date of April 1, 2019. The conversion rate of the new notes was the same as that of the exchanged notes, which were issued in March 2011 with a conversion rate of approximately 96 shares of common stock per $1,000 note principal, equivalent to a conversion price of $10.37 per share of common stock. In April 2019, the entire $57.5 million principal amount was repaid upon maturity. Credit Agreement In September 2018, we entered into a five-year amended and restated credit agreement (the "Credit Agreement”), which has a $50 million borrowing limit, with an expansion capacity to $100 million. The Credit Agreement is secured by substantially all of our assets located in the United States and common stock we own in certain foreign subsidiaries. The Credit Agreement includes minimum interest coverage ratio, total leverage ratio, and minimum unrestricted cash balance covenants (all of which we were in compliance with at October 31, 2019), and limits the amount of cash dividends, distributions, and redemptions we can pay on our common stock to an aggregate amount of $100 million in 2019 and $50 million annually thereafter. We had no |
REVENUE
REVENUE | 12 Months Ended |
Oct. 31, 2019 | |
REVENUE [Abstract] | |
REVENUE | NOTE 7 - REVENUE We adopted Accounting Standards Update 2014-09 and all subsequent amendments which are collectively codified in Accounting Standards Codification Topic 606 - “Revenue from Contracts with Customers” (“Topic 606”) - on November 1, 2018, under the modified retrospective transition method, only with respect to contracts that were not complete as of the date of adoption. This approach required prospective application of the guidance with a cumulative effect adjustment to retained earnings to reflect the impact of the adoption on contracts that were not complete as of the date of the adoption. In accordance with the modified retrospective transition method, the results of the prior year period presented have not been adjusted for the effects of Topic 606. Under Topic 606, we recognize revenue when, or as, control of a good or service transfers to a customer, in an amount that reflects the consideration to which we expect to be entitled in exchange for transferring those goods or services, whereas, prior to our adoption of Topic 606, we recognized revenue when we shipped to customers or, under some arrangements, when the customers received the goods. The following tables present the impacts of our adoption of Topic 606 on our consolidated balance sheet, and consolidated statements of income and cash flows for the year ended October 31, 2019. Consolidated Balance Sheet October 31, 2019 As Reported Adjustments Balance without Adoption of Topic 606 Assets Accounts receivable $ 134,454 $ (1,559 ) $ 132,895 Inventory 48,155 6,093 54,248 Other current assets 38,388 (7,595 ) 30,793 Deferred income taxes 20,779 90 20,869 Liabilities Accrued liabilities $ 49,702 $ (110 ) 49,592 Equity Photronics, Inc. shareholders’ equity $ 769,892 $ (1,976 ) $ 767,916 Noncontrolling interests 141,200 (885 ) 140,315 Consolidated Statement of Income Year Ended October 31, 2019 As Reported Adjustments Balance without Adoption of Topic 606 Revenue $ 550,660 $ (4,365 ) $ 546,295 Cost of goods sold 429,819 (2,256 ) 427,563 Gross profit 120,841 (2,109 ) 118,732 Provision for taxes 10,210 (379 ) 9,831 Net income 40,491 (1,730 ) 38,761 Noncontrolling interests 10,698 (749 ) 9,949 Income attributable to Photronics, Inc. shareholders $ 29,793 $ (981 ) $ 28,812 Consolidated Statement of Cash Flows Year Ended October 31, 2019 As Reported Adjustments Balance without Adoption of Topic 606 Net Income $ 40,491 $ (1,730 ) $ 38,761 Changes in operating accounts: Accounts receivable $ (12,321 ) $ 993 $ (11,328 ) Inventories (23,088 ) (2,503 ) (25,591 ) Other current assets (8,631 ) 3,166 (5,465 ) Accounts payable, accrued liabilities, and other (11,962 ) 74 (11,888 ) We account for an arrangement as a revenue contract when each party has approved and is committed to perform under the contract, the rights of the contracting parties regarding the goods or services to be transferred and the payment terms are identifiable, the arrangement has commercial substance, and collection of consideration is probable. Substantially all of our revenue comes from the sales of photomasks. We typically contract with our customers to sell sets of photomasks (referred to as “mask sets”), which are comprised of multiple layers, the predominance of which we invoice as they ship to customers. As the photomasks are manufactured to customer specifications, they have no alternative use to us and, as our contracts generally provide us with the right to payment for work completed to date, we recognize revenue as we perform, or “over time” on most of our contracts. We measure our performance to date using an input method, which is based on our estimated costs to complete the various manufacturing phases of a photomask. At the end of a reporting period, there will be a number of revenue contracts on which we have performed; for any such contracts that we are entitled to be compensated for our costs incurred plus a reasonable profit, we recognize revenue and a corresponding contract asset for such performance. We account for shipping and handling activities that we perform after a customer obtains control of a good as being activities to fulfill our promise to transfer the good to the customer, rather than as promised services, or performance obligations, under the contract. As stated above, photomasks are manufactured in accordance with proprietary designs provided by our customers; thus, they are individually unique. Due to their uniqueness and other factors, their transaction prices are individually established through negotiations with customers; consequently, our photomasks do not have standard or “list” prices. The transaction prices of the vast majority of our revenue contracts include only fixed amounts of consideration. In certain instances, such as when we offer a customer an early payment discount, an estimate of variable consideration would be included in the transaction price, but only to the extent that a significant reversal of revenue would not occur when the uncertainty related to the variability is resolved. Contract Assets, Contract Liabilities, and Accounts Receivable We recognize a contract asset when our performance under a contract precedes our receipt of consideration from a customer, or before payment is due, and our receipt of consideration is conditional upon factors other than the passage of time. Contract assets reflect our transfer of control to customers of photomasks that are in process or completed but not yet shipped. A receivable is recognized when we have an unconditional right to payment for our performance, which generally occurs when we ship the photomasks. Our contract assets primarily consist of a significant amount of our in-process production orders and fully manufactured photomasks which have not yet shipped, for which we have an enforceable right to collect consideration (including a reasonable profit) in the event the in-process orders are cancelled by customers. On an individual contract basis, we net contract assets with contract liabilities (deferred revenue) for financial reporting purposes. Our contract assets and liabilities are typically classified as current, as our production cycle and our lead times are both under one year. Contract assets of $7.6 million are included in “Other” current assets, and contract liabilities of $11.5 million are included in Accrued liabilities in our October 31, 2019 consolidated balance sheet. At November 1, 2018, our date of adoption of Topic 606, we had contract assets of $4.6 million and contract liabilities of $7.8 million. We did not We generally record our accounts receivable at their billed amounts. All outstanding past due customer invoices are reviewed during, and at the end of, every period for collectibility. To the extent we believe a loss on the collection of a customer invoice is probable, we record the loss and credit the allowance for doubtful accounts. In the event that an amount is determined to be uncollectible, we charge the allowance for doubtful accounts and eliminate the related receivable. Credit losses incurred on our accounts receivable during the year ended October 31, 2019, were immaterial. Our invoice terms generally range from net thirty ninety In instances when we are paid in advance of our performance, we record a contract liability and, as allowed under the practical expedient in Topic 606, recognize interest expense only if the period between when we receive payment from the customer and the date when we expect to be entitled to the payment is greater than one year. Historically, advance payments we’ve received from customers have not preceded the completion of our performance obligations by more than one year. Disaggregation of Revenue The following tables present our revenue for the year ended October 31, 2019, disaggregated by product type, geographic origin, and timing of recognition. Year Ended Revenue by Product Type October 31, 2019 IC High-end $ 156,418 Mainstream 249,773 Total IC $ 406,191 FPD High-end $ 98,832 Mainstream 45,637 Total FPD $ 144,469 $ 550,660 Revenue by Geographic Origin Taiwan $ 244,377 Korea 147,734 United States 105,045 Europe 32,585 China 19,010 All other Asia 1,909 $ 550,660 Revenue by Timing of Recognition Over time $ 497,942 At a point in time 52,718 $ 550,660 Contract Costs We pay commissions to third party sales agents for certain sales that they obtain for us. However, the bases of the commissions are the transaction prices of the sales, which are completed in less than one year; thus, no relationship is established with a customer that will result in future business. Therefore, we would not recognize any portion of these sales commissions as costs of obtaining a contract, nor do we currently foresee other circumstances under which we would recognize such assets. Remaining Performance Obligations As we are typically required to fulfill customer orders within a short time period, our backlog of orders is generally not in excess of one two two three Sales and Similar Taxes We report our revenue net of any sales or similar taxes we collect on behalf of governmental entities. Product Warranty Our photomasks are sold under warranties that generally range from one |
OPERATING LEASES
OPERATING LEASES | 12 Months Ended |
Oct. 31, 2019 | |
OPERATING LEASES [Abstract] | |
OPERATING LEASES | NOTE 8 - OPERATING LEASES We lease various real estate and equipment under non-cancelable operating leases, for which rent expense was $3.0 million, $2.9 million, and $3.0 million in fiscal 2019, 2018, and 2017, respectively. At October 31, 2019, future minimum lease payments under non-cancelable operating leases with initial terms in excess of one year were as follows: 2020 $ 1,885 2021 1,613 2022 1,535 2023 742 2024 424 Thereafter 377 $ 6,576 We adopted ASU 2016-02 and all subsequent amendments, collectively codified in ASC Topic 842 “Leases” (“Topic 842”), on November 1, 2019. The guidance requires modified retrospective adoption, either at the beginning of the earliest period presented or at the beginning of the period of adoption; we have elected to apply the guidance at the beginning of the period of adoption. See Note 22 for further information on our adoption of Topic 842. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Oct. 31, 2019 | |
SHARE-BASED COMPENSATION [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 9 – SHARE-BASED COMPENSATION In March 2016, shareholders approved a new equity incentive compensation plan (“the Plan”), under which incentive stock options, non-qualified stock options, stock grants, stock-based awards, restricted stock, restricted stock units, stock appreciation rights, performance units, performance stock, and other stock or cash awards may be granted. Shares to be issued under the Plan may be authorized and unissued shares, issued shares that have been reacquired by us (in the open-market or in private transactions), shares held in the treasury, or a combination thereof. The maximum number of shares of common stock approved that may be issued under the Plan is four million shares. Awards may be granted to officers, employees, directors, consultants, advisors, and independent contractors of Photronics or its subsidiaries. In the event of a change in control (as defined in the Plan), the vesting of awards may be accelerated. The Plan, aspects of which are more fully described below, prohibits further awards from being issued under prior plans. We incurred total share-based compensation expenses of $3.7 million, $3.2 million, and $3.6 million in fiscal years 2019, 2018, and 2017, respectively. No share-based compensation cost was capitalized as part of an asset and no related income tax benefits were recorded during the fiscal years presented. Stock Options Option awards generally vest in one to four years, and have a ten-year contractual term. All incentive and non-qualified stock option grants must have an exercise price no less than the market value of the underlying common stock on the date of grant. The grant-date fair values of options are based on closing prices of our common stock on the dates of grant and are calculated using the Black-Scholes option pricing model. Expected volatility is based on the historical volatility of our common stock. We use historical option exercise behavior and employee termination data to estimate expected term, which represents the period of time that options granted are expected to remain outstanding. The risk-free rate of return for the estimated term of an option is based on the U.S. Treasury yield curve in effect at the date of grant. The weighted-average inputs and risk-free rate of return ranges used to calculate the grant date fair value of options issued during fiscal years 2019, 2018 and 2017 are presented in the following table: Year Ended October 31, 2019 October 31, 2018 October 29, 2017 Expected volatility 33.1% 31.7% 32.2% Risk-free rate of return 2.5 - 2.9% 2.2 - 2.8% 1.9 - 2.0% Dividend yield 0.0% 0.0% 0.0% Expected term 5.1 years 5.0 years 5.0 years The table below presents a summary of stock options activity during fiscal year 2019 and information on stock options outstanding at October 31, 2019. Options Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life Aggregate Intrinsic Value Outstanding at October 31, 2018 2,423,560 $ 8.68 Granted 132,000 $ 9.77 Exercised (322,010 ) $ 6.43 Cancelled and forfeited (62,783 ) $ 11.47 Outstanding at October 31, 2019 2,170,767 $ 9.00 5.4 years $ 6,206 Exercisable at October 31, 2019 1,615,225 $ 8.61 4.6 years $ 5,242 Vested and expected to vest as of October 31, 2019 2,095,804 $ 8.95 5.3 years $ 6,096 The weighted-average grant date fair value of options granted during fiscal years 2019, 2018 and 2017 were $3.31, $2.76 and $3.59, respectively. The total intrinsic value of options exercised during fiscal years 2019, 2018 and 2017 was $1.3 million, $2.5 million and $1.9 million, respectively. We received cash from option exercises of $2.1 million, $4.3 million and $2.4 million in fiscal years 2019, 2018 and 2017, respectively. As of October 31, 2019, the total unrecognized compensation cost of unvested option awards was approximately $0.9 million. That cost is expected to be recognized over a weighted-average amortization period of 2.1 years. Restricted Stock We periodically grant restricted stock awards, the restrictions on which typically lapse over a service period of one four A summary of restricted stock award activity during fiscal year 2019 and the status of our outstanding restricted stock awards as of October 31, 2019, is presented below: Restricted Stock Shares Weighted-Average Fair Value at Grant Date Outstanding at October 31, 2018 419,297 $ 9.58 Granted 435,000 $ 9.80 Vested (195,684 ) $ 9.65 Cancelled (18,500 ) $ 9.82 Outstanding at October 31, 2019 640,113 $ 9.70 Expected to vest as of October 31, 2019 594,771 $ 9.69 Employee Stock Purchase Plan Our Employee Stock Purchase Plan (“ESPP”) permits employees to purchase Photronics, Inc. common shares at 85% of the lower of the closing market price at the commencement or ending date of the Plan year (which is approximately one year). We recognize the ESPP expense during that same period. As of October 31, 2019, the maximum number of shares of common stock approved by our shareholders to be purchased under the ESPP was 1.85 million shares, of which approximately 1.5 million shares had been issued through October 31, 2019; No shares were subject to outstanding subscriptions as of October 31, 2019. |
EMPLOYEE RETIREMENT PLANS
EMPLOYEE RETIREMENT PLANS | 12 Months Ended |
Oct. 31, 2019 | |
EMPLOYEE RETIREMENT PLANS [Abstract] | |
EMPLOYEE RETIREMENT PLANS | NOTE 10 - EMPLOYEE RETIREMENT PLANS We maintain a 401(k) Savings and Profit Sharing Plan (“401(k) Plan”) which covers all full and certain part time U.S. employees who have completed three |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Oct. 31, 2019 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | NOTE 11 - INCOME TAXES Income before the income tax provisions consists of the following: Year Ended October 31, 2019 October 31, 2018 October 29, 2017 United States $ (8,379 ) $ (9,859 ) $ (11,544 ) Foreign 59,080 78,430 38,109 $ 50,701 $ 68,571 $ 26,565 The income tax provisions consist of the following: Year Ended October 31, 2019 October 31, 2018 October 29, 2017 Current: Federal $ (3,916 ) $ (30 ) $ 173 State 11 - (4 ) Foreign 17,777 11,584 3,474 Deferred: Federal 3,673 (3,673 ) - State 10 (24 ) 15 Foreign (7,345 ) (522 ) 1,618 Total $ 10,210 $ 7,335 $ 5,276 The income tax provisions differ from the amount computed by applying the statutory U.S. federal income tax rate to income before income taxes as a result of the following: Year Ended October 31, 2019 October 31, 2018 October 29, 2017 U.S. federal income tax at statutory rate $ 10,647 $ 16,059 $ 9,298 Changes in valuation allowances 2,673 4,554 (3,632 ) Foreign tax rate differentials 218 (2,078 ) (5,230 ) Tax credits (1,268 ) (1,530 ) (1,925 ) Uncertain tax positions, including reserves, settlements and resolutions 134 (1,791 ) (932 ) Employee stock option 232 (1,433 ) 512 Income tax holiday (2,234 ) (2,648 ) (743 ) Tax reform - (3,736 ) - Distributions from foreign subsidiaries - - 6,471 Tax on foreign subsidiary earnings - - 1,712 Other, net (192 ) (62 ) (255 ) $ 10,210 $ 7,335 $ 5,276 Effective tax rate 20.1 % 10.7 % 19.8 % The fiscal year 2019 effective tax rate differs from the U.S. statutory rate of 21% due to the recognition of a benefit related to previously unrecognized tax positions, loss jurisdiction pre-tax losses being benefited at higher statutory rates than pre-tax income in income jurisdictions was taxed, changes in deferred tax asset valuation allowance, The fiscal year 2018 effective tax rate differs from the U.S. federal blended rate of The fiscal year 2017 effective tax rate differs from the U.S. statutory rate of 35% primarily due to earnings being taxed at lower statutory rates in foreign jurisdictions, changes in deferred tax asset valuation allowances, including the reversals noted below, together with the benefit of various investment credits in a foreign jurisdiction. We were granted two five 2017 2019 On December 22, 2017, the U.S. Tax Cuts and Jobs Act (the “Act”), was signed into law, enacting significant changes to the United States Internal Revenue Code of 1986, as amended. • The Act repealed the corporate alternative minimum tax (“AMT”) for tax years beginning after December 31, 2017, and provided that existing AMT credit carryforwards are fully refundable. We recognized a $3.9 million benefit on AMT credit carryforwards that we previously determined were not more likely than not going to be realized and reversed the previously recorded valuation allowance. • As of January 1, 2018, the Act reduced the corporate income tax rate from a maximum 35% to a flat 21%, requiring us to revalue our deferred tax assets and liabilities utilizing the rate applicable to the period when a temporary difference will reverse. Our net deferred tax asset is fully offset by a valuation allowance, and the revaluation of the deferred tax assets and liabilities resulted in a net-zero impact for the period. • The Act imposed a transition tax for a one-time deemed repatriation of the accumulated earnings of foreign subsidiaries. The entire amount of transition tax was fully offset by tax credits (including carryforwards) that resulted in a provisional net-zero impact on the period. On January 18, 2018, the Taiwan Legislature Yuan approved amendments to the Income Tax Act, enacting an increase in the corporate tax rate from 17% to 20%, which required us to revalue our deferred tax assets and liabilities utilizing the rate applicable to the period when a temporary difference will reverse. Accordingly, a net benefit of is reflected in our tax provision in fiscal year 2018. The net deferred income tax assets consist of the following: As of October 31, 2019 October 31, 2018 Deferred income tax assets Net operating losses $ 32,229 $ 30,805 Reserves not currently deductible 5,013 4,703 Tax credit carryforwards 9,164 9,159 Share-based compensation 860 767 Alternative minimum tax credits - 3,673 Other 434 1,210 47,700 50,317 Valuation allowances (27,032 ) (24,383 ) 20,668 25,934 Deferred income tax liabilities: Property, plant and equipment (251 ) (8,020 ) Other - (448 ) (251 ) (8,468 ) Net deferred income tax assets $ 20,417 $ 17,466 Reported as: Deferred income tax assets $ 20,779 $ 18,109 Deferred income tax liabilities (362 ) (643 ) $ 20,417 $ 17,466 We have established a valuation allowance for a portion of our deferred tax assets because we believe, based on the weight of all available evidence, that it is more likely than not that a portion of our net operating loss carryforwards will expire prior to utilization. In fiscal year 2019, the valuation allowance $ million $ million, credit utilizations of $ million, changes in the deferred tax liability of $ million, $ million from the adoption of ASU 2016-09 related to stock compensation, $ million from the corporate tax rate reduction, and other impacts of $ million. Due to the Act, as of fiscal year end 2018, U.S. deferred taxes were no longer provided on the undistributed earnings of non-U.S. subsidiaries. Our policy to indefinitely reinvest these earnings in non-U.S. operations remains unchanged for the purpose of determining deferred tax liabilities for U.S. state and foreign withholding taxes. Therefore, should we elect in the future to repatriate the remaining foreign earnings deemed to be indefinitely reinvested, we may incur additional state and withholding tax expense on those foreign earnings, the amount of which is not practicable to compute. The following tables present our available operating loss and credit carryforwards as of October 31, 2019, and their related expiration periods: Operating Loss Carryforwards Amount Expiration Periods Federal $ 85,949 2028 State 206,513 2019 2039 Foreign 9,177 2022 2029 Tax Credit Carryforwards Amount Expiration Period Federal research and development $ 4,522 2019 2039 State 5,870 2020 2029 In September 2019, we entered into a Section 382 Rights Agreement with Computershare Trust Company, N.A., a federally chartered trust company, as rights agent. The purpose of the Rights Agreement is to deter trading of our common stock that would result in a change in control (as defined in Internal Revenue Control Section 382), thereby preserving our future ability to use our historical federal net operating losses and other Tax Attributes (as defined in the Rights Agreement). In connection with our entry into the Rights Agreement, our board of directors declared a dividend of one preferred stock purchase right, payable on or about October 1, 2019, for each share of common stock, par value $0.01 per share, of the Company’s outstanding on September 30, 2019, to the stockholders of record on that date. A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, is as follows: Year Ended October 31, 2019 October 31, 2018 October 29, 2017 Balance at beginning of year $ 1,775 $ 3,384 $ 4,606 Additions (reductions) for tax positions in prior years (466 ) (44 ) 207 Additions based on current year tax positions 1,286 498 323 Settlements (204 ) (56 ) (922 ) Lapses of statutes of limitations (633 ) (2,007 ) (830 ) Balance at end of year $ 1,758 $ 1,775 $ 3,384 As of October 31, 2019, October 31, 2018 and October 29, 2017, the balance of unrecognized tax benefits, which are included in Other liabilities, includes $ 1.9 million, $ 1.9 million, and $ 3.4 million, respectively, that, if recognized, would impact the effective tax rates. Included in each of these amounts were interest and penalties of $ 0.2 million, $ 0.1 million, and $ 0.1 million, at the end of fiscal year 2019, 2018, and 2017, respectively. We include any applicable interest and penalties related to uncertain tax positions in our income tax provision. The amounts reflected in the table above include settlements of non-U.S. audits. Although the timing of the expirations of statutes of limitations may be uncertain, as they can be dependent upon the settlement of tax audits, the Company believes that the amount of uncertain tax positions (including accrued interest and penalties, and net of tax benefits) that may be resolved over the next twelve months is immaterial. Resolution of these uncertain tax positions may result from either or both the lapses of statutes of limitations and tax settlements. The Company is no longer subject to tax authority examinations in the U.S., major foreign, or state tax jurisdictions for years prior to fiscal year 2014. Income tax payments were $ million, $ million and $ million in fiscal years 2019, 2018 and 2017, respectively. Cash received as refunds of income taxes paid in prior years amounted to $ million and $ million in Adoption of New Accounting Standard In the first quarter of 2019, the Company adopted Accounting Standards Update No. 2016-16 – “Intra-Entity Transfers Other Than Inventory”, which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. In connection therewith, we recorded a transition adjustment of $1.1 million that reduced prepaid income taxes (included in Other current assets in the consolidated balance sheets) against beginning retained earnings. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Oct. 31, 2019 | |
EARNINGS PER SHARE [Abstract] | |
EARNINGS PER SHARE | NOTE 12 - EARNINGS PER SHARE The calculation of basic and diluted earnings per share is presented as follows: Year Ended October 31, 2019 October 31, 2018 October 29, 2017 Net income attributable to Photronics, Inc. shareholders $ 29,793 $ 42,055 $ 13,130 Effect of dilutive securities: Interest expense on convertible notes, net of related tax effects 845 1,999 - Earnings for diluted earnings per share $ 30,638 $ 44,054 $ 13,130 Weighted-average common shares computations: Weighted-average common shares used for basic earnings per share 66,347 68,829 68,436 Effect of dilutive securities: Convertible notes 2,360 5,542 - Share-based payment awards 448 450 852 Potentially dilutive common shares 2,808 5,992 852 Weighted-average common shares used for diluted earnings per share 69,155 74,821 69,288 Basic earnings per share $ 0.45 $ 0.61 $ 0.19 Diluted earnings per share $ 0.44 $ 0.59 $ 0.19 The table below shows the outstanding weighted-average share-based payment awards that were excluded from the calculation of diluted earnings per share because their exercise price exceeded the average market value of the common shares for the period or, under application of the treasury stock method, they were otherwise determined to be antidilutive. The table also shows convertible notes that, if converted, would have been antidilutive. Year Ended October 31, 2019 October 31, 2018 October 29, 2017 Share based payment awards 1,250 1,627 1,308 Convertible notes - - 5,542 Total potentially dilutive shares excluded 1,250 1,627 6,850 Subsequent to October 31, 2019, we repurchased 0.9 million shares of our common stock. See Note 19 for information on our share repurchase programs. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Oct. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 13 - COMMITMENTS AND CONTINGENCIES As of October 31, 2019, we had outstanding purchase commitments of $ million, $ million of which was for As of October 31, 2019, we had recorded liabilities for the purchase of equipment of $ million. We are subject to various claims that arise in the ordinary course of business. We believe such claims, individually and in the aggregate, will not have a material effect on our consolidated financial statements. |
GEOGRAPHIC AND SIGNIFICANT CUST
GEOGRAPHIC AND SIGNIFICANT CUSTOMER INFORMATION | 12 Months Ended |
Oct. 31, 2019 | |
GEOGRAPHIC AND SIGNIFICANT CUSTOMER INFORMATION [Abstract] | |
GEOGRAPHIC AND SIGNIFICANT CUSTOMER INFORMATION | NOTE 14 - GEOGRAPHIC AND SIGNIFICANT CUSTOMER INFORMATION We operate as a single operating segment as a manufacturer of photomasks, which are high precision quartz or glass plates containing microscopic images of electronic circuits for use in the fabrication of IC’s and FPDs. Our 2019, 2018 and 2017 revenue by geographic origin and by IC and FPD products are presented below. Year Ended October 31, 2019 October 31, 2018 October 29, 2017 Net revenue Taiwan $ 244,377 $ 237,039 $ 187,818 Korea 147,734 147,066 122,165 United States 105,045 112,648 102,040 Europe 32,585 35,540 36,081 China 19,010 1,157 168 All other Asia 1,909 1,826 2,406 $ 550,660 $ 535,276 $ 450,678 IC $ 406,191 $ 416,064 $ 350,260 FPD 144,469 119,212 100,418 $ 550,660 $ 535,276 $ 450,678 Our 2019, 2018, and 2017 long-lived assets by geographic area are presented below. As of October 31, 2019 October 31, 2018 October 29, 2017 Long-lived assets China $ 232,394 $ 102,985 $ 8,273 Taiwan 146,467 177,626 186,192 United States 130,935 156,948 180,095 Korea 117,755 127,764 147,265 Europe 4,890 6,458 13,372 $ 632,441 $ 571,781 $ 535,197 One customer accounted for 16% of our revenue in fiscal years 2019, 2018 and 2017, respectively, and another customer accounted for 15%, 15% and 16% of our revenue in fiscal years 2019, 2018 and 2017, respectively. |
CHANGES IN ACCUMULATED OTHER CO
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT | 12 Months Ended |
Oct. 31, 2019 | |
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT [Abstract] | |
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT | NOTE 15 - CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT The following tables set forth the changes in our accumulated other comprehensive income by component (net of tax of $ 0 ) for the years ended October 31, 2019 and October 31, 2018: Year Ended October 31, 2019 Foreign Currency Translation Adjustments Other Total Balance at October 31, 2018 $ (4,328 ) $ (638 ) $ (4,966 ) Other comprehensive loss (2,877 ) (74 ) (2,951 ) Less: other comprehensive income (loss) attributable to noncontrolling interests 1,126 (38 ) 1,088 Balance at October 31, 2019 $ (8,331 ) $ (674 ) $ (9,005 ) Year Ended October 31, 2018 Foreign Currency Translation Adjustments Amortization of Cash Flow Hedge Other Total Balance at October 29, 2017 $ 7,627 $ (48 ) $ (688 ) $ 6,891 Other comprehensive income before reclassifications (16,672 ) - 101 (16,571 ) Amounts reclassified from other accumulated comprehensive income - 48 - 48 Net current period other comprehensive income (16,672 ) 48 101 (16,523 ) Less: other comprehensive (loss) income attributable to noncontrolling interests (4,717 ) - 51 (4,666 ) Balance at October 31, 2018 $ (4,328 ) $ - $ (638 ) $ (4,966 ) Amortization of the cash flow hedge is included in cost of goods sold in the 2018 and 2017 consolidated statements of income. |
CONCENTRATIONS OF CREDIT RISK
CONCENTRATIONS OF CREDIT RISK | 12 Months Ended |
Oct. 31, 2019 | |
CONCENTRATIONS OF CREDIT RISK [Abstract] | |
CONCENTRATIONS OF CREDIT RISK | NOTE 16 – CONCENTRATIONS OF CREDIT RISK Financial instruments that potentially subject us to credit risk principally consist of trade accounts receivables and short-term cash investments. We sell our products primarily to semiconductor and FPD manufacturers in Asia, North America, and Europe. We believe that the concentration of credit risk in our trade receivables is substantially mitigated by our ongoing credit evaluation process and relatively short collection terms. We do not generally require collateral from customers. We establish an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. Our cash and cash equivalents are deposited in several financial institutions, including institutions located within all of the countries in which we manufacture photomasks. Portions of deposits in some of these institutions may exceed the amount of insurance available for such deposits at these institutions. As these deposits are generally redeemable upon demand and are held by high quality, reputable institutions, we consider them to bear minimal credit risk. We further mitigate credit risks related to our cash and cash equivalents by spreading such risk among a number of institutions. As of October 31, 2019, one of our customers accounted for 17% of our net accounts receivable. As of October 31, 2018, two of our customers individually accounted for 20% and 10% of our net accounts receivable. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Oct. 31, 2019 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 17 - RELATED PARTY TRANSACTIONS On January 20, 2018, Photronics, Inc. entered into a four-year consulting agreement with DEMA Associates, LLC, for $0.4 million per year. Two members of our board of directors, including the chairman, and a member of the chairman’s immediate family, are members of DEMA Associates, LLC. We incurred expenses for services provided by this entity of $0.4 million and $0.3 million in fiscal years 2019 and 2018, respectively. In July 2016, we entered into a contract for information technology services with a parent entity for which members of our board of directors served as the executive chairman of the board and a director of a wholly owned subsidiary of that entity. In fiscal year 2018, we incurred expenses for services provided by the parent entity of $ million during the period in which our board members served on the board of directors of this entity and, in fiscal year 2017, we incurred expenses of $ million with the parent entity. An officer of our company is related to an individual in a position of authority at one of our largest customers. We recorded revenue from this customer of $87.0 million, $78.4 million and $73.6 million, in fiscal years 2019, 2018 and 2017, respectively. As of October 31, 2019 and October 31, 2018, we had accounts receivable of $22.2 million and $23.5 million, respectively, from this customer. We purchase photomask blanks from an entity of which a former officer of ours is a significant shareholder. The Company purchased $4.5 million of photomask blanks from this entity during the period in 2017 when the former officer was employed by us. We believe that the terms of our transactions with the related parties described above were negotiated at arm’s length and were no less favorable to us than terms we could have obtained from unrelated third parties. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Oct. 31, 2019 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 18 - FAIR VALUE MEASUREMENTS The accounting framework for determining fair value includes a hierarchy for ranking the quality and reliability of the information used to measure fair value, which enables the reader of the financial statements to assess the inputs used to develop those measurements. The fair value hierarchy consists of three tiers as follows: Level 1, defined as quoted market prices (unadjusted) in active markets for identical securities; Level 2, defined as inputs other than Level 1 that are observable, either directly or indirectly; and Level 3, defined as unobservable inputs that are not corroborated by market data. The fair values of our cash and cash equivalents (Level 1 measurements), accounts receivable, accounts payable, and certain other current assets and current liabilities (Level 2 measurements) approximate their carrying values due to their short-term maturities. The fair values of our variable rate debt instruments are a Level 2 measurement and approximates their carrying values due to the variable nature of the underlying interest rates. The fair values of our convertible senior notes is a Level 2 measurement, as it was determined using inputs that were either observable market data, or could be derived from, or corroborated with, observable market data. These inputs included our stock price and interest rates offered on debt issued by entities with credit ratings similar to ours. We did not have any assets or liabilities measured at fair value, on a recurring or a nonrecurring basis, at October 31, 2019 or October 31, 2018. Fair Value of Financial Instruments Not Recorded at Fair Value The fair value of our convertible senior notes was a Level 2 measurement, as it was determined using inputs that were either observable market data or could be derived from or corroborated with observable market data. These inputs included our stock price and interest rates offered on debt issued by entities with credit ratings similar to ours. The table below presents the fair and carrying values of our convertible senior notes at October 31, 2018. October 31, 2018 Fair Value Carrying Value 3.25% convertible senior notes matured 2019 $ 62,094 $ 57,453 |
SHARE REPURCHASE PROGRAMS
SHARE REPURCHASE PROGRAMS | 12 Months Ended |
Oct. 31, 2019 | |
SHARE REPURCHASE PROGRAMS [Abstract] | |
SHARE REPURCHASE PROGRAMS | NOTE 19 – SHARE REPURCHASE PROGRAMS In August 2019, the Company’s board of directors authorized the repurchase of up to $100 million of its common stock, pursuant to a repurchase plan under Rule 10b5-1 of the Securities Act of 1933 (as amended). In October 2018, the Company’s board of directors authorized the repurchase of up to $25 million of its common stock, to have been executed in open-market transactions or in accordance with a repurchase plan under Rule 10b5-1 of the Securities Act of 1933 (as amended). The share repurchase program commenced on October 22, 2018, and was terminated on February 1, 2019. In July 2018, the Company’s Board of Directors authorized the repurchase of up to $20 million of its common stock, to have been executed in open-market transactions or in accordance with a repurchase plan under Rule 10b5-1 of the Securities Act of 1933 (as amended). The share repurchase program commenced on July 10, 2018, and was completed in October 2018 All of the shares purchased under the above repurchase programs were retired in fiscal year 2019. The Table below presents information on the repurchase programs. Fiscal Year 2019 Purchases Fiscal Year 2018 Purchases Total Purchases Under Programs Number of shares repurchased 2,133 2,558 4,691 Cost of shares repurchased $ 21,696 $ 23,111 $ 44,807 Average price paid per share $ 10.17 $ 9.04 $ 9.55 |
SUBSIDIARY DIVIDEND
SUBSIDIARY DIVIDEND | 12 Months Ended |
Oct. 31, 2019 | |
SUBSIDIARY DIVIDEND [Abstract] | |
SUBSIDIARY DIVIDEND | NOTE 20 SUBSIDIARY DIVIDEND In fiscal years 2019 and 2018, PDMC, the Company’s majority owned subsidiary in Taiwan, paid dividends of which 49.99%, or approximately $45.1 and $8.2 million, respectively, were paid to noncontrolling interests. |
QUARTERLY RESULTS OF OPERATIONS
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | 12 Months Ended |
Oct. 31, 2019 | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) [Abstract] | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | NOTE 21 QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) The following table sets forth certain unaudited quarterly financial data: First Second Third Fourth Year Fiscal 2019: Revenue $ 124,712 $ 131,580 $ 138,112 $ 156,256 $ 550,660 Gross profit 26,102 26,010 30,570 38,159 120,841 Net income 7,768 9,852 9,834 13,037 40,491 Net income attributable to Photronics, Inc. shareholders 5,267 8,479 6,347 9,700 29,793 Earnings per share: Basic $ 0.08 $ 0.13 $ 0.10 $ 0.15 $ 0.45 Diluted $ 0.08 $ 0.13 $ 0.10 $ 0.15 $ 0.44 First Second Third Fourth Year Fiscal 2018: (a) (a) Revenue $ 123,446 $ 130,779 $ 136,391 $ 144,660 $ 535,276 Gross profit 27,662 32,819 35,597 35,425 131,503 Net income 9,481 15,189 19,797 16,769 61,236 Net income attributable to Photronics, Inc. shareholders 5,898 10,665 13,005 12,487 42,055 Earnings per share: Basic $ 0.09 $ 0.15 $ 0.19 $ 0.18 $ 0.61 Diluted $ 0.09 $ 0.15 $ 0.18 $ 0.18 $ 0.59 (a) Includes $0.6 million gain on sale of assets. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 12 Months Ended |
Oct. 31, 2019 | |
RECENT ACCOUNTING PRONOUNCEMENTS [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 22 - RECENT ACCOUNTING PRONOUNCEMENTS Accounting Standards Updates to be Implemented In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13 “Measurement of Credit Losses”, the main objective of which is to provide more useful information about expected credit losses on financial instruments and other commitments of an entity to extend credit. In support of this objective, the ASU replaces the incurred loss model, found in current GAAP, with an expected credit loss model; the new model requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This ASU requires a cumulative-effect adjustment as of the beginning of the first reporting period in which the guidance is adopted. ASU 2016-13 is effective for Photronics, Inc. in its first quarter of fiscal year 2021, with early adoption permitted. We are currently evaluating the effect that this ASU will have on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842)”, which requires lessees to recognize right-of-use assets and corresponding liabilities for all leases with an initial term in excess of twelve months. We adopted ASU 2016-02 and all subsequent amendments, collectively codified in Topic 842, on November 1, 2019. The guidance requires modified retrospective adoption, either at the beginning of the earliest period presented or at the beginning of the period of adoption. We elected to apply the guidance at the beginning of the period of adoption, and recorded right-of-use (ROU) leased assets of approximately $6.7 million, and corresponding lease liabilities, which were discounted at our incremental borrowing rates. The guidance allows a number of elections and practical expedients, of which we have elected to employ the following: - Election not to recognize short-term leases on the balance sheet. - Practical expedient to not separate lease and non-lease components in a contract. - Practical expedient “package” for transitioning to the new guidance: * Not reassessing whether any expired or existing contracts are or contain leases. * Not reassessing lease classification for any existing or expired leases. * Not reassessing initial direct costs for any existing leases. We do not expect our adoption of Topic 842 to affect our cash flows or our ability to comply with covenants under our credit agreements. Accounting Standards Updates Implemented In November 2016, the FASB issued ASU 2016-18 “Restricted Cash”, which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 was effective for Photronics, Inc. in its first quarter of fiscal year 2019 and was applied on a retrospective transition basis. Our adoption of this Update did not materially impact our cash flows statement. In October 2016, the FASB issued ASU 2016-16 “Intra-Entity Transfers of Assets Other Than Inventory”, which eliminates the exception of recognizing, at the time of transfer, current and deferred income taxes for intra-entity asset transfers other than inventory. ASU 2016-16 was effective for us in our first quarter of fiscal year 2019 and applied on a modified retrospective transition basis. Please see Note 11 for a discussion of the effects of adopting this guidance. In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers”, which superseded nearly all then existing revenue recognition guidance under accounting principles generally accepted in the United States. The core principle of this ASU is that revenue should be recognized for the amount of consideration expected to be received for promised goods or services transferred to customers. This ASU also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments, and assets recognized for costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued ASU 2015-14 which deferred the effective date of ASU 2014-09 by one year and allowed entities to early adopt, but no earlier than the original effective date. This update allowed for either full retrospective or modified retrospective adoption. In April 2016, the FASB issued ASU 2016-10 “Identifying Performance Obligations and Licensing” which amended guidance previously issued on these matters in ASU 2014-09. The effective date and transition requirements of ASU 2016-10 were the same as those for ASU 2014-09. We adopted the new revenue and related guidance on November 1, 2018, using the modified retrospective approach, under which we increased our accounts receivable by $0.6 million, recognized contract assets of $4.6 million, reduced our inventories balance by $3.7 million, and recorded an accrual for income taxes of $0.3 million. The recognition of, and adjustments to, these items were reflected in increases to our retained earnings and noncontrolling interest balances of $1.1 million and $0.1 million, respectively. The most significant impact of the new guidance on our financial statements is its requirement for us to recognize revenue as we manufacture products for which, in the event that the customer cancels the contract, we are entitled to reasonable compensation for work we have completed prior to cancellation. Prior to our adoption of Topic 606, we recognized revenue when we shipped to customers or, under some arrangements, when the customers received the goods. The guidance allows for a number of accounting policy elections and practical expedients. In addition to our above-mentioned election to use the modified retrospective application method for adopting the guidance, those we have employed that are most significant to us are summarized below. Shipping and handling activities performed after control of a good is transferred to a customer We have elected to treat shipping and handling activities that occur after control of a good is transferred to a customer as activities to fulfill our promise to transfer goods to the customer. Thus, such activities will not be considered to be separate performance obligations under contracts with our customers. Non-recognition of financing component when we transfer goods to a customer and the period between when we transfer and when we are paid will be less than one year We have elected the practical expedient that allows for the non-recognition, as a component of a customer contract, of a financing component when the period between when we transfer a good and when we are paid will be less than one year. Exclusion of sales and similar taxes collected from customers in the transaction price Consistent with our practice before adoption of the new guidance, we will not recognize sales and similar taxes we collect from customers as revenue. Use of an “input method” to measure our progress towards the transfer of control of performance obligations to customers As, in our judgment, an input method based on our efforts to satisfy our performance obligations will best serve to depict the transfer of control of our performance obligations to our customers, we have adopted an accounting policy to employ that method. Our decision was based primarily on the facts that our photomasks are not physically transferred to customers until they are complete, and that we can employ our input-based cost accumulation systems and methods to measure our progress towards the transfer of control of our performance obligations to customers. Non-disclosure of the transaction prices of unsatisfied or partially satisfied performance obligations For contracts that have an original expected duration of one year or less, we have elected the practical expedient that allows us not to disclose the aggregate transaction prices of unsatisfied or partially satisfied performance obligations that exist at the end of a reporting period. |
Schedule II-Valuation and Quali
Schedule II-Valuation and Qualifying Accounts | 12 Months Ended |
Oct. 31, 2019 | |
Schedule II-Valuation and Qualifying Accounts [Abstract] | |
Schedule II-Valuation and Qualifying Accounts | Valuation and Qualifying Accounts for the Years Ended October 31, 2019, October 31, 2018 and October 29, 2017 (in $ thousands) Balance at Beginning of Year Charged to Costs and Expenses Deductions Balance at End of Year Allowance for Doubtful Accounts Year-ended October 31, 2019 $ 1,526 $ (18 ) $ (174 )(a) $ 1,334 Year-ended October 31, 2018 $ 2,319 $ (809 ) $ 16 (a) $ 1,526 Year ended October 29, 2017 $ 3,901 $ (1,600 )(b) $ 18 (a) $ 2,319 _________________ (a) Uncollectible accounts written off, net, and impact of foreign currency translation. (b) Reversal of valuation allowance. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Oct. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Consolidation | Consolidation The accompanying consolidated financial statements include the accounts of Photronics, Inc. , its wholly owned subsidiaries, and the majority-owned subsidiaries which it controls. All intercompany balances and transactions have been eliminated in consolidation. |
Estimates and Assumptions | Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect amounts reported in them. Estimates are based on historical experience and on various assumptions that are believed to be reasonable under the circumstances. Our estimates are based on the facts and circumstances available at the time they are made. Actual results we report may differ from such estimates. We review these estimates periodically and reflect any effects of revisions in the period in which they are determined. |
Fiscal Year | Fiscal Year Commencing with our 2018 fiscal year, our fiscal year ends on October 31. In prior years, our fiscal years ended on the Sunday closest to October 31. Prior year results in this Form 10-K have not been restated to reflect year-end dates of October 31. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash and highly liquid investments with an original maturity of three months or less The carrying values of cash equivalents approximate their fair values, due to the short-term maturities of these instruments. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts We |
Inventories | Inventories Inventories are stated at the lower of cost, determined under the first-in, first-out (“FIFO”) method, or net realizable value. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment, except as explained below under “Impairment of Long-Lived Assets,” is stated at cost less accumulated depreciation and amortization. Repairs and maintenance, as well as renewals and replacements of a routine nature, are charged to operations as incurred, while those that improve, or extend the lives of, existing assets are capitalized. Upon sale or other disposition, the cost of the asset and its related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in earnings. Depreciation and amortization, essentially all of which are included in cost of goods sold, are computed using the straight-line method over the estimated useful lives of the related assets. Buildings and improvements are depreciated over 10 to 39 years, machinery and equipment over 5 to 15 years, and furniture, fixtures and office equipment over 3 to 5 years. Leasehold improvements are amortized over the life of the lease or the estimated useful life of the improvement, whichever is less. We employ judgment and assumptions when we establish estimated useful lives and depreciation periods, as well as when we periodically review property, plant and equipment for any potential impairment in carrying values, whenever events such as a significant industry downturn, plant closures, technological obsolescence, or other change in circumstances indicate that their carrying amounts may not be recoverable. |
Intangible Assets | Intangible Assets Intangible assets consist primarily of a technology license agreement and acquisition-related intangibles. These assets, except as explained below, are stated at fair value as of the date acquired, less accumulated amortization. Amortization is calculated based on the estimated useful lives of the assets, which range from 3 to 15 years, using the straight-line method or another method that more fairly represents the utilization of the assets. We periodically evaluate the remaining useful lives of our intangible assets to determine whether events or circumstances warrant a revision to the remaining periods of amortization. In the event that the estimate of an intangible asset’s remaining useful life has changed, the remaining carrying amount of the intangible asset is amortized prospectively over that revised remaining useful life. If it is determined that an intangible asset has an indefinite useful life, that intangible asset would be subject to impairment testing annually or whenever events or circumstances indicate that its carrying value may not, based on future undiscounted cash flows or market factors, be recoverable. An impairment loss, the recorded amount of which would be based on the fair value of the intangible asset at the measurement date, would be recorded in the period in which the impairment determination was made. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determinations of recoverability are based upon our judgment and estimates of undiscounted future cash flows resulting from the use of the assets and their eventual disposition. Measurement of an impairment loss for long-lived assets that we expect to hold and use is based on the fair value of the assets determined using a market or income approach compared with the carrying value of the asset. The carrying values of assets determined to be impaired would be reduced to their estimated fair values. |
Restricted Cash | Restricted Cash Restricted cash in the amounts of $2.8 million and $2.7 million are included in “Other assets” on our October 31, 2019 and October 31, 2018, consolidated balance sheets, respectively. The restrictions on these amounts are primarily related to land lease agreements and customs requirements. |
Business Combinations | Business Combinations When acquiring other businesses, or participating in mergers or joint ventures in which we are deemed to be the acquirer, we generally recognize identifiable assets acquired, liabilities assumed and any noncontrolling interests at their acquisition date fair values, separately from any goodwill that may be required to be recognized. Goodwill, when recognizable, would be measured as the excess amount of any consideration transferred, which is generally measured at fair value, over the acquisition date fair values of the identifiable assets acquired and liabilities assumed. Accounting for such transactions requires us to make significant assumptions and estimates and, although we believe any estimates and assumptions we make to be reasonable and appropriate at the time they are made, unanticipated events and circumstances may arise that affect their accuracy, which may cause actual results to differ from those we estimated. When required, we will adjust the values of the assets acquired and liabilities assumed against the acquisition gain or goodwill, as initially recorded, for a period of up to one year after the transaction. Costs incurred to effect a merger or acquisition, such as legal, accounting, valuation and other third-party costs, as well as internal general and administrative costs incurred are charged to expense in the periods incurred. Costs incurred to issue any debt and equity securities are recognized in accordance with other applicable generally accepted accounting principles. |
Investments in Joint Ventures | Investments in Joint Ventures The financial results of investments in joint ventures in which we have a controlling financial interest are included in our consolidated financial statements. Investments in joint ventures over which we have the ability to exercise significant influence and that, in general, are at least twenty percent owned are accounted for under the equity method. An impairment loss would be recognized whenever a decrease in the fair value of such an investment below its carrying amount is determined to be other than temporary. In judging "other than temporary," we would consider the length of time and the extent to which the fair value of the investment has been less than its carrying amount, the near-term and longer-term operating and financial prospects of the investee, and our longer-term intent of retaining our investment in the investee. |
Variable Interest Entities | Variable Interest Entities We account for the investments we make in certain legal entities in which equity investors do not have 1) sufficient equity at risk for the legal entity to finance its activities without additional subordinated financial support or, 2) as a group, the holders of the equity investment at risk do not have either the power, through voting or similar rights, to direct the activities of the legal entity that most significantly impact the entity’s economic performance or, 3) the obligation to absorb the expected losses of the legal entity or the right to receive expected residual returns of the legal entity as “variable interest entities”, or “VIEs”. We consolidate the results of any such entity in which we have determined that we have a controlling financial interest. We would have a “controlling financial interest” (and thus be considered the “primary beneficiary” of the entity) in such an entity when we have both the power to direct the activities that most significantly affect the VIE’s economic performance and the obligation to absorb the losses of, or right to receive the benefits from, the VIE that could be potentially significant to the VIE. On a quarterly basis, we reassess whether we have a controlling financial interest in any investments we have in these entities. We account for investments we make in VIEs in which we have determined that we do not have a controlling financial interest but have a significant influence over, and hold at least a twenty percent ownership interest in, using the equity method. Any such investment not meeting the parameters to be accounted for under the equity method would be accounted for using the cost method, unless the investment had a readily determinable fair value, at which value it would then be reported. |
Income Taxes | Income Taxes The income tax provision is computed on the basis of the various tax jurisdictions' income or loss before income taxes. Deferred income taxes reflect the tax effects of differences between the carrying amounts of assets and liabilities for financial reporting purposes and their amounts used for income tax purposes, as well as the tax effects of net operating losses and tax credit carryforwards. We use judgment and make assumptions to determine if valuation allowances for deferred income tax assets are required, if their realization is not more likely than not, by considering future market growth, operating forecasts, future taxable income, and the mix of earnings among the tax jurisdictions in which we operate. Accordingly, income taxes charged against earnings may have been impacted by changes in the valuation allowances. We consider income taxes in each of the tax jurisdictions in which we operate in order to determine our effective income tax rate. Our current income tax expense is thus identified, and temporary differences resulting from differing treatments of items for tax and financial reporting purposes are assessed. These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets. We account for uncertain tax positions by recording a liability for unrecognized tax benefits resulting from uncertain tax positions taken, or expected to be taken, in our tax returns. We include any applicable interest and penalties related to uncertain tax positions in our income tax provision. |
Treasury Stock | Treasury Stock We record treasury stock purchases under the cost method, recording the entire cost of the acquired stock as treasury stock. Gains and losses on subsequent reissuances would be credited or charged to additional paid-in capital, and we would employ the average cost method (with average cost being determined separately for each share repurchase program), in the event that we subsequently reissue shares. |
Earnings Per Share | Earnings Per Share Basic earnings per share ("EPS") is based on the weighted-average number of common shares outstanding for the period, excluding any dilutive common share equivalents. Diluted EPS reflects the potential dilution that could occur if certain share-based payment awards or financial instruments were exercised, earned or converted. |
Share-Based Compensation | Share-Based Compensation We recognize share-based compensation expense over the service period that the awards are expected to vest. Share-based compensation expense includes the estimated effects of forfeitures, which are adjusted over the requisite service period to the extent actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures are recognized in the period of change, and will impact the amount of expense to be recognized in future periods. Determining the appropriate option pricing model, calculating the grant date fair value of share-based awards and estimating forfeiture rates requires considerable judgment, including estimations of stock price volatility and the expected term of options granted. We use the Black-Scholes option pricing model to value employee stock options. We estimate stock price volatility based on daily averages of our common stock’s historical volatility over a term approximately equal to the estimated time period the grant will remain outstanding. The expected term of options and forfeiture rate assumptions are derived from historical data. |
Research and Development | Research and Development Research and development costs are expensed as incurred, and consist primarily of development efforts related to high-end process technologies for advanced subwavelength reticle solutions for IC and FPD photomask technologies. |
Foreign Currency Translation | Foreign Currency Translation Our non-US subsidiaries maintain their accounts in their respective local currencies. Assets and liabilities of such subsidiaries are translated to U.S. dollars at year-end exchange rates. Income and expenses are translated at average rates of exchange prevailing during the year. Foreign currency translation adjustments are accumulated and reported in accumulated other comprehensive income, a component of equity. The effects of changes in exchange rates on foreign currency transactions, which are included in Interest income and other income (expense) net, were a net (loss)/gain of $(1.3 ) million, $0.4 million and $(5.2 ) million in fiscal years 2019, 2018 and 2017, respectively. |
Noncontrolling Interests | Noncontrolling Interests Substantially all of Noncontrolling interests represents the minority shareholders' proportionate share in the equity of two of the Company's majority-owned subsidiaries: Photronics DNP Mask Corporation (“PDMC”) in Taiwan, and Xiamen American Japan Photronics Mask Co., Ltd ("PDMCX") in China, of which noncontrolling interests owned 49.99 % as of October 31, 2019 and October 31, 2018. In addition, noncontrolling shareholders owned approximately 0.2 % of PK Ltd. (“PKL”) in Korea as of October 31, 2019 and October 31, 2018. In November 2019, we acquired the remaining noncontrolling interests’ shares of PKL for approximately $0.6 million |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities We record derivatives in the consolidated balance sheets as assets or liabilities, measured at fair value. We do not engage in derivative instruments for speculative purposes. Gains or losses resulting from changes in the values of derivatives are reflected in earnings, or as accumulated other comprehensive income or loss, a separate component of equity, depending on the use of the derivatives and whether they qualify for hedge accounting. In order to qualify for hedge accounting, among other criteria, a derivative must be a hedge of an interest rate, price, foreign currency exchange rate, or credit risk that is expected to be highly effective at the inception of the hedge, be highly effective in achieving offsetting changes in the fair value or cash flows of the hedged item during the term of the hedge and formally documented at the inception of the hedge. In general, the types of risks we would hedge are those related to the variability of future cash flows caused by movements in foreign currency exchange and interest rates. We would document our risk management strategy and hedge effectiveness at the inception of, and during the term of, each hedge. |
Revenue Recognition | Revenue Recognition We adopted Accounting Standards Update 2014-09 and all subsequent amendments which are collectively codified in Accounting Standards Codification Topic 606 - “Revenue from Contracts with Customers” (“Topic 606”) - on November 1, 2018, under the modified retrospective transition method, only with respect to contracts that were not complete as of the date of adoption. This approach required prospective application of the guidance with a cumulative effect adjustment to retained earnings to reflect the impact of the adoption on contracts that were not complete as of the date of the adoption. In accordance with the modified retrospective transition method, the results of the prior year period presented have not been adjusted for the effects of Topic 606. Please see Note 7 for a detailed discussion of our revenue recognition and related accounting policies. |
Product Warranty | Product Warranty Our photomasks are sold under warranties that generally range from one |
Government Grants | Government Grants We account for funds we receive from government grants by reducing the costs of the assets or expenses to which we apply the funds. Funds we receive that cannot be attributed to specific assets or expenses would be recognized as other income, and included in Interest income and other income (expense), net in the Consolidated Statements of Income. Funds we receive from government grants are classified in our Consolidated Statement of Cash Flows as either cash flows from operating activities or cash flows from investing activities, in accordance with how we expend the funds. |
PDMCX JOINT VENTURE (Policies)
PDMCX JOINT VENTURE (Policies) | 12 Months Ended |
Oct. 31, 2019 | |
PDMCX JOINT VENTURE [Abstract] | |
Variable Interest Entities | As required by the guidance in Topic 810 - “Consolidation” of the Accounting Codification Standards, we evaluated our involvement in PDMCX for the purpose of determining whether we should consolidate its results in our financial statements. The initial step of our evaluation was to determine whether PDMCX was a variable interest entity (“VIE”). Due to its lack of sufficient equity at risk to finance its activities without additional subordinated financial support, we determined that it is a VIE. Having made this determination, we then assessed whether we were the primary beneficiary of the VIE, and concluded that we were the primary beneficiary during the current and prior year reporting periods; thus, as required, the PDMCX financial results have been consolidated with Photronics, Inc. Our conclusion was based on the fact that we held a controlling financial interest in PDMCX (which resulted from our having the power to direct the activities that most significantly impacted its economic performance) and had both the obligation to absorb losses and the right to receive benefits that could potentially be significant to PDMCX. Our conclusions that we had the power to direct the activities that most significantly affected the economic performance of PDMCX during the current and prior year periods were based on our right to appoint the majority of its board of directors, which has, among others, the powers to manage the business (through its rights to appoint and evaluate PDMCX’s management), incur indebtedness, enter into agreements and commitments, and acquire and dispose of PDMCX’s assets. In addition, as a result of the 50.01 % variable interest we held during the current and prior year periods, we had the obligation to absorb losses, and the right to receive benefits, that could potentially be significant to PDMCX. |
REVENUE (Policies)
REVENUE (Policies) | 12 Months Ended |
Oct. 31, 2019 | |
REVENUE [Abstract] | |
Revenue | We adopted Accounting Standards Update 2014-09 and all subsequent amendments which are collectively codified in Accounting Standards Codification Topic 606 - “Revenue from Contracts with Customers” (“Topic 606”) - on November 1, 2018, under the modified retrospective transition method, only with respect to contracts that were not complete as of the date of adoption. This approach required prospective application of the guidance with a cumulative effect adjustment to retained earnings to reflect the impact of the adoption on contracts that were not complete as of the date of the adoption. In accordance with the modified retrospective transition method, the results of the prior year period presented have not been adjusted for the effects of Topic 606. Under Topic 606, we recognize revenue when, or as, control of a good or service transfers to a customer, in an amount that reflects the consideration to which we expect to be entitled in exchange for transferring those goods or services, whereas, prior to our adoption of Topic 606, we recognized revenue when we shipped to customers or, under some arrangements, when the customers received the goods. The following tables present the impacts of our adoption of Topic 606 on our consolidated balance sheet, and consolidated statements of income and cash flows for the year ended October 31, 2019. We account for an arrangement as a revenue contract when each party has approved and is committed to perform under the contract, the rights of the contracting parties regarding the goods or services to be transferred and the payment terms are identifiable, the arrangement has commercial substance, and collection of consideration is probable. Substantially all of our revenue comes from the sales of photomasks. We typically contract with our customers to sell sets of photomasks (referred to as “mask sets”), which are comprised of multiple layers, the predominance of which we invoice as they ship to customers. As the photomasks are manufactured to customer specifications, they have no alternative use to us and, as our contracts generally provide us with the right to payment for work completed to date, we recognize revenue as we perform, or “over time” on most of our contracts. We measure our performance to date using an input method, which is based on our estimated costs to complete the various manufacturing phases of a photomask. At the end of a reporting period, there will be a number of revenue contracts on which we have performed; for any such contracts that we are entitled to be compensated for our costs incurred plus a reasonable profit, we recognize revenue and a corresponding contract asset for such performance. We account for shipping and handling activities that we perform after a customer obtains control of a good as being activities to fulfill our promise to transfer the good to the customer, rather than as promised services, or performance obligations, under the contract. As stated above, photomasks are manufactured in accordance with proprietary designs provided by our customers; thus, they are individually unique. Due to their uniqueness and other factors, their transaction prices are individually established through negotiations with customers; consequently, our photomasks do not have standard or “list” prices. The transaction prices of the vast majority of our revenue contracts include only fixed amounts of consideration. In certain instances, such as when we offer a customer an early payment discount, an estimate of variable consideration would be included in the transaction price, but only to the extent that a significant reversal of revenue would not occur when the uncertainty related to the variability is resolved. Contract Assets, Contract Liabilities, and Accounts Receivable We recognize a contract asset when our performance under a contract precedes our receipt of consideration from a customer, or before payment is due, and our receipt of consideration is conditional upon factors other than the passage of time. Contract assets reflect our transfer of control to customers of photomasks that are in process or completed but not yet shipped. A receivable is recognized when we have an unconditional right to payment for our performance, which generally occurs when we ship the photomasks. Our contract assets primarily consist of a significant amount of our in-process production orders and fully manufactured photomasks which have not yet shipped, for which we have an enforceable right to collect consideration (including a reasonable profit) in the event the in-process orders are cancelled by customers. On an individual contract basis, we net contract assets with contract liabilities (deferred revenue) for financial reporting purposes. Our contract assets and liabilities are typically classified as current, as our production cycle and our lead times are both under one year. Contract assets of $7.6 million are included in “Other” current assets, and contract liabilities of $11.5 million are included in Accrued liabilities in our October 31, 2019 consolidated balance sheet. At November 1, 2018, our date of adoption of Topic 606, we had contract assets of $4.6 million and contract liabilities of $7.8 million. We did not We generally record our accounts receivable at their billed amounts. All outstanding past due customer invoices are reviewed during, and at the end of, every period for collectibility. To the extent we believe a loss on the collection of a customer invoice is probable, we record the loss and credit the allowance for doubtful accounts. In the event that an amount is determined to be uncollectible, we charge the allowance for doubtful accounts and eliminate the related receivable. Credit losses incurred on our accounts receivable during the year ended October 31, 2019, were immaterial. Our invoice terms generally range from net thirty ninety In instances when we are paid in advance of our performance, we record a contract liability and, as allowed under the practical expedient in Topic 606, recognize interest expense only if the period between when we receive payment from the customer and the date when we expect to be entitled to the payment is greater than one year. Historically, advance payments we’ve received from customers have not preceded the completion of our performance obligations by more than one year. Contract Costs We pay commissions to third party sales agents for certain sales that they obtain for us. However, the bases of the commissions are the transaction prices of the sales, which are completed in less than one year; thus, no relationship is established with a customer that will result in future business. Therefore, we would not recognize any portion of these sales commissions as costs of obtaining a contract, nor do we currently foresee other circumstances under which we would recognize such assets. Remaining Performance Obligations As we are typically required to fulfill customer orders within a short time period, our backlog of orders is generally not in excess of one two two three Sales and Similar Taxes We report our revenue net of any sales or similar taxes we collect on behalf of governmental entities. Product Warranty Our photomasks are sold under warranties that generally range from one |
SHARE-BASED COMPENSATION (Polic
SHARE-BASED COMPENSATION (Policies) | 12 Months Ended |
Oct. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock Options Accounting Policy | Share-Based Compensation We recognize share-based compensation expense over the service period that the awards are expected to vest. Share-based compensation expense includes the estimated effects of forfeitures, which are adjusted over the requisite service period to the extent actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures are recognized in the period of change, and will impact the amount of expense to be recognized in future periods. Determining the appropriate option pricing model, calculating the grant date fair value of share-based awards and estimating forfeiture rates requires considerable judgment, including estimations of stock price volatility and the expected term of options granted. We use the Black-Scholes option pricing model to value employee stock options. We estimate stock price volatility based on daily averages of our common stock’s historical volatility over a term approximately equal to the estimated time period the grant will remain outstanding. The expected term of options and forfeiture rate assumptions are derived from historical data. |
Employee Stock Option [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock Options Accounting Policy | Option awards generally vest in one to four years, and have a ten-year contractual term. All incentive and non-qualified stock option grants must have an exercise price no less than the market value of the underlying common stock on the date of grant. The grant-date fair values of options are based on closing prices of our common stock on the dates of grant and are calculated using the Black-Scholes option pricing model. Expected volatility is based on the historical volatility of our common stock. We use historical option exercise behavior and employee termination data to estimate expected term, which represents the period of time that options granted are expected to remain outstanding. The risk-free rate of return for the estimated term of an option is based on the U.S. Treasury yield curve in effect at the date of grant. |
INCOME TAXES (Policies)
INCOME TAXES (Policies) | 12 Months Ended |
Oct. 31, 2019 | |
INCOME TAXES [Abstract] | |
Unremitted Earnings in Foreign Investment | Due to the Act, as of fiscal year end 2018, U.S. deferred taxes were no longer provided on the undistributed earnings of non-U.S. subsidiaries. Our policy to indefinitely reinvest these earnings in non-U.S. operations remains unchanged for the purpose of determining deferred tax liabilities for U.S. state and foreign withholding taxes. Therefore, should we elect in the future to repatriate the remaining foreign earnings deemed to be indefinitely reinvested, we may incur additional state and withholding tax expense on those foreign earnings, the amount of which is not practicable to compute. |
Interest and Penalties Related to Uncertain Tax Positions | As of October 31, 2019, October 31, 2018 and October 29, 2017, the balance of unrecognized tax benefits, which are included in Other liabilities, includes $ 1.9 million, $ 1.9 million, and $ 3.4 million, respectively, that, if recognized, would impact the effective tax rates. Included in each of these amounts were interest and penalties of $ 0.2 million, $ 0.1 million, and $ 0.1 million, at the end of fiscal year 2019, 2018, and 2017, respectively. We include any applicable interest and penalties related to uncertain tax positions in our income tax provision. The amounts reflected in the table above include settlements of non-U.S. audits. Although the timing of the expirations of statutes of limitations may be uncertain, as they can be dependent upon the settlement of tax audits, the Company believes that the amount of uncertain tax positions (including accrued interest and penalties, and net of tax benefits) that may be resolved over the next twelve months is immaterial. Resolution of these uncertain tax positions may result from either or both the lapses of statutes of limitations and tax settlements. The Company is no longer subject to tax authority examinations in the U.S., major foreign, or state tax jurisdictions for years prior to fiscal year 2014. |
FAIR VALUE MEASUREMENTS (Polici
FAIR VALUE MEASUREMENTS (Policies) | 12 Months Ended |
Oct. 31, 2019 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
Fair Value Financial Instruments | The accounting framework for determining fair value includes a hierarchy for ranking the quality and reliability of the information used to measure fair value, which enables the reader of the financial statements to assess the inputs used to develop those measurements. The fair value hierarchy consists of three tiers as follows: Level 1, defined as quoted market prices (unadjusted) in active markets for identical securities; Level 2, defined as inputs other than Level 1 that are observable, either directly or indirectly; and Level 3, defined as unobservable inputs that are not corroborated by market data. |
RECENT ACCOUNTING PRONOUNCEME_2
RECENT ACCOUNTING PRONOUNCEMENTS (Policies) | 12 Months Ended |
Oct. 31, 2019 | |
RECENT ACCOUNTING PRONOUNCEMENTS [Abstract] | |
Recent Accounting Pronouncements | Accounting Standards Updates to be Implemented In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13 “Measurement of Credit Losses”, the main objective of which is to provide more useful information about expected credit losses on financial instruments and other commitments of an entity to extend credit. In support of this objective, the ASU replaces the incurred loss model, found in current GAAP, with an expected credit loss model; the new model requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This ASU requires a cumulative-effect adjustment as of the beginning of the first reporting period in which the guidance is adopted. ASU 2016-13 is effective for Photronics, Inc. in its first quarter of fiscal year 2021, with early adoption permitted. We are currently evaluating the effect that this ASU will have on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842)”, which requires lessees to recognize right-of-use assets and corresponding liabilities for all leases with an initial term in excess of twelve months. We adopted ASU 2016-02 and all subsequent amendments, collectively codified in Topic 842, on November 1, 2019. The guidance requires modified retrospective adoption, either at the beginning of the earliest period presented or at the beginning of the period of adoption. We elected to apply the guidance at the beginning of the period of adoption, and recorded right-of-use (ROU) leased assets of approximately $6.7 million, and corresponding lease liabilities, which were discounted at our incremental borrowing rates. The guidance allows a number of elections and practical expedients, of which we have elected to employ the following: - Election not to recognize short-term leases on the balance sheet. - Practical expedient to not separate lease and non-lease components in a contract. - Practical expedient “package” for transitioning to the new guidance: * Not reassessing whether any expired or existing contracts are or contain leases. * Not reassessing lease classification for any existing or expired leases. * Not reassessing initial direct costs for any existing leases. We do not expect our adoption of Topic 842 to affect our cash flows or our ability to comply with covenants under our credit agreements. Accounting Standards Updates Implemented In November 2016, the FASB issued ASU 2016-18 “Restricted Cash”, which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 was effective for Photronics, Inc. in its first quarter of fiscal year 2019 and was applied on a retrospective transition basis. Our adoption of this Update did not materially impact our cash flows statement. In October 2016, the FASB issued ASU 2016-16 “Intra-Entity Transfers of Assets Other Than Inventory”, which eliminates the exception of recognizing, at the time of transfer, current and deferred income taxes for intra-entity asset transfers other than inventory. ASU 2016-16 was effective for us in our first quarter of fiscal year 2019 and applied on a modified retrospective transition basis. Please see Note 11 for a discussion of the effects of adopting this guidance. In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers”, which superseded nearly all then existing revenue recognition guidance under accounting principles generally accepted in the United States. The core principle of this ASU is that revenue should be recognized for the amount of consideration expected to be received for promised goods or services transferred to customers. This ASU also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments, and assets recognized for costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued ASU 2015-14 which deferred the effective date of ASU 2014-09 by one year and allowed entities to early adopt, but no earlier than the original effective date. This update allowed for either full retrospective or modified retrospective adoption. In April 2016, the FASB issued ASU 2016-10 “Identifying Performance Obligations and Licensing” which amended guidance previously issued on these matters in ASU 2014-09. The effective date and transition requirements of ASU 2016-10 were the same as those for ASU 2014-09. We adopted the new revenue and related guidance on November 1, 2018, using the modified retrospective approach, under which we increased our accounts receivable by $0.6 million, recognized contract assets of $4.6 million, reduced our inventories balance by $3.7 million, and recorded an accrual for income taxes of $0.3 million. The recognition of, and adjustments to, these items were reflected in increases to our retained earnings and noncontrolling interest balances of $1.1 million and $0.1 million, respectively. The most significant impact of the new guidance on our financial statements is its requirement for us to recognize revenue as we manufacture products for which, in the event that the customer cancels the contract, we are entitled to reasonable compensation for work we have completed prior to cancellation. Prior to our adoption of Topic 606, we recognized revenue when we shipped to customers or, under some arrangements, when the customers received the goods. The guidance allows for a number of accounting policy elections and practical expedients. In addition to our above-mentioned election to use the modified retrospective application method for adopting the guidance, those we have employed that are most significant to us are summarized below. Shipping and handling activities performed after control of a good is transferred to a customer We have elected to treat shipping and handling activities that occur after control of a good is transferred to a customer as activities to fulfill our promise to transfer goods to the customer. Thus, such activities will not be considered to be separate performance obligations under contracts with our customers. Non-recognition of financing component when we transfer goods to a customer and the period between when we transfer and when we are paid will be less than one year We have elected the practical expedient that allows for the non-recognition, as a component of a customer contract, of a financing component when the period between when we transfer a good and when we are paid will be less than one year. Exclusion of sales and similar taxes collected from customers in the transaction price Consistent with our practice before adoption of the new guidance, we will not recognize sales and similar taxes we collect from customers as revenue. Use of an “input method” to measure our progress towards the transfer of control of performance obligations to customers As, in our judgment, an input method based on our efforts to satisfy our performance obligations will best serve to depict the transfer of control of our performance obligations to our customers, we have adopted an accounting policy to employ that method. Our decision was based primarily on the facts that our photomasks are not physically transferred to customers until they are complete, and that we can employ our input-based cost accumulation systems and methods to measure our progress towards the transfer of control of our performance obligations to customers. Non-disclosure of the transaction prices of unsatisfied or partially satisfied performance obligations For contracts that have an original expected duration of one year or less, we have elected the practical expedient that allows us not to disclose the aggregate transaction prices of unsatisfied or partially satisfied performance obligations that exist at the end of a reporting period. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Inventories | Inventories are stated at the lower of cost, determined under the first-in, first-out (“FIFO”) method, or net realizable value. Presented below are the components of inventory at the balance sheet dates: October 31 2019 October 31 2018 Raw materials $ 46,027 $ 25,110 Work in process 2,122 3,402 Finished goods 6 668 $ 48,155 $ 29,180 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
PROPERTY, PLANT AND EQUIPMENT [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment consists of the following: October 31, 2019 October 31, 2018 Land $ 12,085 $ 11,139 Buildings and improvements 172,340 124,771 Machinery and equipment 1,748,483 1,566,163 Leasehold improvements 19,921 19,577 Furniture, fixtures and office equipment 14,404 12,415 Construction in progress 28,135 128,649 1,995,368 1,862,714 Accumulated depreciation and amortization (1,362,927 ) (1,290,933 ) $ 632,441 $ 571,781 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
INTANGIBLE ASSETS [Abstract] | |
Intangible Assets | Intangible assets consist of: As of October 31, 2019 Gross Amount Accumulated Amortization Net Amount Technology license agreement $ 59,616 $ (53,323 ) $ 6,293 Customer relationships 9,174 (8,186 ) 988 Software and other 6,537 (5,948 ) 589 $ 75,327 $ (67,457 ) $ 7,870 As of October 31, 2018 Technology license agreement $ 59,616 $ (49,349 ) $ 10,267 Customer relationships 9,147 (7,959 ) 1,188 Software and other 6,519 (5,606 ) 913 $ 75,282 $ (62,914 ) $ 12,368 |
Intangible Asset Amortization Over the Next Five Years | Intangible asset amortization over the next five years is estimated to be as follows: Fiscal Years: 2020 $ 4,589 2021 $ 2,721 2022 $ 125 2023 $ 123 2024 $ 123 |
PDMCX JOINT VENTURE (Tables)
PDMCX JOINT VENTURE (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
PDMCX JOINT VENTURE [Abstract] | |
Carrying Amounts and Exposure to Loss Related to Assets and Liabilities | The carrying amounts of PDMCX assets and liabilities included in our consolidated balance sheets are presented in the following table, together with our maximum exposures to loss related to these assets and liabilities. October 31, 2019 October 31, 2018 Classification Carrying Amount Photronics Interest Carrying Amount Photronics Interest Current assets $ 24,142 $ 12,074 $ 9,625 $ 4,813 Non-current assets 114,015 57,019 43,415 21,708 Total assets 138,157 69,093 53,040 26,521 Current liabilities 16,889 8,446 21,205 10,603 Non-current liabilities 42,094 21,051 20 10 Total liabilities 58,983 29,497 21,225 10,613 Net assets $ 79,174 $ 39,596 $ 31,815 $ 15,908 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
ACCRUED LIABILITIES [Abstract] | |
Accrued Liabilities | Accrued liabilities consist of the following: October 31, 2019 October 31, 2018 Compensation related expenses $ 14,011 $ 15,359 Income taxes 13,227 10,369 Contract liabilities 11,542 7,834 Value added and other taxes 3,761 3,683 Professional fees 537 1,257 Other 6,624 5,972 $ 49,702 $ 44,474 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
LONG-TERM DEBT [Abstract] | |
Long-Term Debt | Long-term debt consists of the following: October 31, 2019 October 31, 2018 Project Loans $ 34,490 $ - Working Capital Loans (value added tax component) 9,539 - 3.25% convertible senior notes matured April 2019 - 57,453 44,029 57,453 Current portion of long-term debt (2,142 ) (57,453 ) Long-term debt $ 41,887 $ - |
Debt Instrument [Line Items] | |
Maturities of Long-term Debt | At October 31, 2019, maturities of our long-term debt over the next five years and thereafter were as follows: 2020 $ 2,142 2021 8,304 2022 12,430 2023 3,441 2024 6,589 Thereafter 11,123 $ 44,029 |
Project Loans [Member] | |
Debt Instrument [Line Items] | |
Maturities of Long-term Debt | In November 2018, PDMCX was approved for credit of $50 million, subject to certain limitations related to PDMCX registered capital at the time of the initial approval, pursuant to which PDMCX has and will enter into separate loan agreements (“the Project Loans”) for intermittent borrowings. The Project Loans, which are denominated in Chinese renminbi (RMB), are being used to finance certain capital expenditures in China. PDMCX granted liens on its land, building, and certain equipment as collateral for the Project Loans. As of October 31, 2019, PDMCX had borrowed 243.4 million RMB ($34.5 million) against this approval. Payments on these borrowings are due semi-annually through December 2025 ; the initial payment is scheduled for June 2020 . The table below presents, in U.S. dollars, the timing of future payments against the borrowings. Fiscal Year 2020 2021 2022 2023 2024 2025 2026 Principal payments $ 1,275 $ 6,377 $ 5,685 $ 3,441 $ 6,589 $ 6,305 $ 4,818 |
Working Capital Loans [Member] | |
Debt Instrument [Line Items] | |
Maturities of Long-term Debt | In November 2018, PDMCX received approval for unsecured credit of $25.0 million, pursuant to which PDMCX may enter into separate loan agreements. Under this credit agreement (the “Working Capital Loans”), PDMCX can borrow up to 140.0 million RMB to pay value-added taxes (“VAT”), and up to 60.0 million RMB to fund operations; combined total borrowings are limited to $25.0 million. As of October 31, 2019, PDMCX had 67.3 million RMB ($9.5 million) outstanding against the approval to pay VAT. Payments on these borrowings are due semiannually, at an increasing rate, through January 2022 ; PDMCX made installment payments totaling $0.1 million during the year ended October 31, 2019. The table below presents, in U.S. dollars, the timing of future payments against these borrowings. Fiscal Year 2020 2021 2022 Principal payments $ 867 $ 1,927 $ 6,745 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
REVENUE [Abstract] | |
Impacts of Adoption of Condensed Consolidated Balance Sheet, Condensed Consolidated Statements of Income and Cash Flows | The following tables present the impacts of our adoption of Topic 606 on our consolidated balance sheet, and consolidated statements of income and cash flows for the year ended October 31, 2019. Consolidated Balance Sheet October 31, 2019 As Reported Adjustments Balance without Adoption of Topic 606 Assets Accounts receivable $ 134,454 $ (1,559 ) $ 132,895 Inventory 48,155 6,093 54,248 Other current assets 38,388 (7,595 ) 30,793 Deferred income taxes 20,779 90 20,869 Liabilities Accrued liabilities $ 49,702 $ (110 ) 49,592 Equity Photronics, Inc. shareholders’ equity $ 769,892 $ (1,976 ) $ 767,916 Noncontrolling interests 141,200 (885 ) 140,315 Consolidated Statement of Income Year Ended October 31, 2019 As Reported Adjustments Balance without Adoption of Topic 606 Revenue $ 550,660 $ (4,365 ) $ 546,295 Cost of goods sold 429,819 (2,256 ) 427,563 Gross profit 120,841 (2,109 ) 118,732 Provision for taxes 10,210 (379 ) 9,831 Net income 40,491 (1,730 ) 38,761 Noncontrolling interests 10,698 (749 ) 9,949 Income attributable to Photronics, Inc. shareholders $ 29,793 $ (981 ) $ 28,812 Consolidated Statement of Cash Flows Year Ended October 31, 2019 As Reported Adjustments Balance without Adoption of Topic 606 Net Income $ 40,491 $ (1,730 ) $ 38,761 Changes in operating accounts: Accounts receivable $ (12,321 ) $ 993 $ (11,328 ) Inventories (23,088 ) (2,503 ) (25,591 ) Other current assets (8,631 ) 3,166 (5,465 ) Accounts payable, accrued liabilities, and other (11,962 ) 74 (11,888 ) |
Disaggregation of Revenue | The following tables present our revenue for the year ended October 31, 2019, disaggregated by product type, geographic origin, and timing of recognition. Year Ended Revenue by Product Type October 31, 2019 IC High-end $ 156,418 Mainstream 249,773 Total IC $ 406,191 FPD High-end $ 98,832 Mainstream 45,637 Total FPD $ 144,469 $ 550,660 Revenue by Geographic Origin Taiwan $ 244,377 Korea 147,734 United States 105,045 Europe 32,585 China 19,010 All other Asia 1,909 $ 550,660 Revenue by Timing of Recognition Over time $ 497,942 At a point in time 52,718 $ 550,660 |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
OPERATING LEASES [Abstract] | |
Future Minimum Lease Payments Under Non-cancelable Operating Leases | At October 31, 2019, future minimum lease payments under non-cancelable operating leases with initial terms in excess of one year were as follows: 2020 $ 1,885 2021 1,613 2022 1,535 2023 742 2024 424 Thereafter 377 $ 6,576 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
SHARE-BASED COMPENSATION [Abstract] | |
Assumptions Used to Calculate Weighted-Average Grant Date Fair Value of Options | The weighted-average inputs and risk-free rate of return ranges used to calculate the grant date fair value of options issued during fiscal years 2019, 2018 and 2017 are presented in the following table: Year Ended October 31, 2019 October 31, 2018 October 29, 2017 Expected volatility 33.1% 31.7% 32.2% Risk-free rate of return 2.5 - 2.9% 2.2 - 2.8% 1.9 - 2.0% Dividend yield 0.0% 0.0% 0.0% Expected term 5.1 years 5.0 years 5.0 years A summary of restricted stock award activity during fiscal year 2019 and the status of our outstanding restricted stock awards as of October 31, 2019, is presented below: Restricted Stock Shares Weighted-Average Fair Value at Grant Date Outstanding at October 31, 2018 419,297 $ 9.58 Granted 435,000 $ 9.80 Vested (195,684 ) $ 9.65 Cancelled (18,500 ) $ 9.82 Outstanding at October 31, 2019 640,113 $ 9.70 Expected to vest as of October 31, 2019 594,771 $ 9.69 |
Summary of Stock Options Activity | The table below presents a summary of stock options activity during fiscal year 2019 and information on stock options outstanding at October 31, 2019. Options Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life Aggregate Intrinsic Value Outstanding at October 31, 2018 2,423,560 $ 8.68 Granted 132,000 $ 9.77 Exercised (322,010 ) $ 6.43 Cancelled and forfeited (62,783 ) $ 11.47 Outstanding at October 31, 2019 2,170,767 $ 9.00 5.4 years $ 6,206 Exercisable at October 31, 2019 1,615,225 $ 8.61 4.6 years $ 5,242 Vested and expected to vest as of October 31, 2019 2,095,804 $ 8.95 5.3 years $ 6,096 |
Summary of Restricted Stock Awards Activity | A summary of restricted stock award activity during fiscal year 2019 and the status of our outstanding restricted stock awards as of October 31, 2019, is presented below: Restricted Stock Shares Weighted-Average Fair Value at Grant Date Outstanding at October 31, 2018 419,297 $ 9.58 Granted 435,000 $ 9.80 Vested (195,684 ) $ 9.65 Cancelled (18,500 ) $ 9.82 Outstanding at October 31, 2019 640,113 $ 9.70 Expected to vest as of October 31, 2019 594,771 $ 9.69 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
INCOME TAXES [Abstract] | |
Income Before Income Tax Provision for Domestic and Foreign | Income before the income tax provisions consists of the following: Year Ended October 31, 2019 October 31, 2018 October 29, 2017 United States $ (8,379 ) $ (9,859 ) $ (11,544 ) Foreign 59,080 78,430 38,109 $ 50,701 $ 68,571 $ 26,565 |
Income Tax Provision | The income tax provisions consist of the following: Year Ended October 31, 2019 October 31, 2018 October 29, 2017 Current: Federal $ (3,916 ) $ (30 ) $ 173 State 11 - (4 ) Foreign 17,777 11,584 3,474 Deferred: Federal 3,673 (3,673 ) - State 10 (24 ) 15 Foreign (7,345 ) (522 ) 1,618 Total $ 10,210 $ 7,335 $ 5,276 |
Income Tax Rate Reconciliation | The income tax provisions differ from the amount computed by applying the statutory U.S. federal income tax rate to income before income taxes as a result of the following: Year Ended October 31, 2019 October 31, 2018 October 29, 2017 U.S. federal income tax at statutory rate $ 10,647 $ 16,059 $ 9,298 Changes in valuation allowances 2,673 4,554 (3,632 ) Foreign tax rate differentials 218 (2,078 ) (5,230 ) Tax credits (1,268 ) (1,530 ) (1,925 ) Uncertain tax positions, including reserves, settlements and resolutions 134 (1,791 ) (932 ) Employee stock option 232 (1,433 ) 512 Income tax holiday (2,234 ) (2,648 ) (743 ) Tax reform - (3,736 ) - Distributions from foreign subsidiaries - - 6,471 Tax on foreign subsidiary earnings - - 1,712 Other, net (192 ) (62 ) (255 ) $ 10,210 $ 7,335 $ 5,276 Effective tax rate 20.1 % 10.7 % 19.8 % |
Net Deferred Income Tax Assets | The net deferred income tax assets consist of the following: As of October 31, 2019 October 31, 2018 Deferred income tax assets Net operating losses $ 32,229 $ 30,805 Reserves not currently deductible 5,013 4,703 Tax credit carryforwards 9,164 9,159 Share-based compensation 860 767 Alternative minimum tax credits - 3,673 Other 434 1,210 47,700 50,317 Valuation allowances (27,032 ) (24,383 ) 20,668 25,934 Deferred income tax liabilities: Property, plant and equipment (251 ) (8,020 ) Other - (448 ) (251 ) (8,468 ) Net deferred income tax assets $ 20,417 $ 17,466 Reported as: Deferred income tax assets $ 20,779 $ 18,109 Deferred income tax liabilities (362 ) (643 ) $ 20,417 $ 17,466 |
Operating Loss Carryforwards | The following tables present our available operating loss and credit carryforwards as of October 31, 2019, and their related expiration periods: Operating Loss Carryforwards Amount Expiration Periods Federal $ 85,949 2028 State 206,513 2019 2039 Foreign 9,177 2022 2029 |
Tax Credit Carryforwards | Tax Credit Carryforwards Amount Expiration Period Federal research and development $ 4,522 2019 2039 State 5,870 2020 2029 |
Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits, Excluding Interest and Penalties | A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, is as follows: Year Ended October 31, 2019 October 31, 2018 October 29, 2017 Balance at beginning of year $ 1,775 $ 3,384 $ 4,606 Additions (reductions) for tax positions in prior years (466 ) (44 ) 207 Additions based on current year tax positions 1,286 498 323 Settlements (204 ) (56 ) (922 ) Lapses of statutes of limitations (633 ) (2,007 ) (830 ) Balance at end of year $ 1,758 $ 1,775 $ 3,384 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
EARNINGS PER SHARE [Abstract] | |
Calculation of Basic and Diluted Earnings Per Share | The calculation of basic and diluted earnings per share is presented as follows: Year Ended October 31, 2019 October 31, 2018 October 29, 2017 Net income attributable to Photronics, Inc. shareholders $ 29,793 $ 42,055 $ 13,130 Effect of dilutive securities: Interest expense on convertible notes, net of related tax effects 845 1,999 - Earnings for diluted earnings per share $ 30,638 $ 44,054 $ 13,130 Weighted-average common shares computations: Weighted-average common shares used for basic earnings per share 66,347 68,829 68,436 Effect of dilutive securities: Convertible notes 2,360 5,542 - Share-based payment awards 448 450 852 Potentially dilutive common shares 2,808 5,992 852 Weighted-average common shares used for diluted earnings per share 69,155 74,821 69,288 Basic earnings per share $ 0.45 $ 0.61 $ 0.19 Diluted earnings per share $ 0.44 $ 0.59 $ 0.19 |
Outstanding Securities Excluded from Calculation of Diluted Earnings or Loss Per Share | The table below shows the outstanding weighted-average share-based payment awards that were excluded from the calculation of diluted earnings per share because their exercise price exceeded the average market value of the common shares for the period or, under application of the treasury stock method, they were otherwise determined to be antidilutive. The table also shows convertible notes that, if converted, would have been antidilutive. Year Ended October 31, 2019 October 31, 2018 October 29, 2017 Share based payment awards 1,250 1,627 1,308 Convertible notes - - 5,542 Total potentially dilutive shares excluded 1,250 1,627 6,850 |
GEOGRAPHIC AND SIGNIFICANT CU_2
GEOGRAPHIC AND SIGNIFICANT CUSTOMER INFORMATION (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
GEOGRAPHIC AND SIGNIFICANT CUSTOMER INFORMATION [Abstract] | |
Geographic Information | Our 2019, 2018 and 2017 revenue by geographic origin and by IC and FPD products are presented below. Year Ended October 31, 2019 October 31, 2018 October 29, 2017 Net revenue Taiwan $ 244,377 $ 237,039 $ 187,818 Korea 147,734 147,066 122,165 United States 105,045 112,648 102,040 Europe 32,585 35,540 36,081 China 19,010 1,157 168 All other Asia 1,909 1,826 2,406 $ 550,660 $ 535,276 $ 450,678 IC $ 406,191 $ 416,064 $ 350,260 FPD 144,469 119,212 100,418 $ 550,660 $ 535,276 $ 450,678 Our 2019, 2018, and 2017 long-lived assets by geographic area are presented below. As of October 31, 2019 October 31, 2018 October 29, 2017 Long-lived assets China $ 232,394 $ 102,985 $ 8,273 Taiwan 146,467 177,626 186,192 United States 130,935 156,948 180,095 Korea 117,755 127,764 147,265 Europe 4,890 6,458 13,372 $ 632,441 $ 571,781 $ 535,197 |
CHANGES IN ACCUMULATED OTHER _2
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT [Abstract] | |
Changes in Accumulated Other Comprehensive Income by Component | The following tables set forth the changes in our accumulated other comprehensive income by component (net of tax of $ 0 ) for the years ended October 31, 2019 and October 31, 2018: Year Ended October 31, 2019 Foreign Currency Translation Adjustments Other Total Balance at October 31, 2018 $ (4,328 ) $ (638 ) $ (4,966 ) Other comprehensive loss (2,877 ) (74 ) (2,951 ) Less: other comprehensive income (loss) attributable to noncontrolling interests 1,126 (38 ) 1,088 Balance at October 31, 2019 $ (8,331 ) $ (674 ) $ (9,005 ) Year Ended October 31, 2018 Foreign Currency Translation Adjustments Amortization of Cash Flow Hedge Other Total Balance at October 29, 2017 $ 7,627 $ (48 ) $ (688 ) $ 6,891 Other comprehensive income before reclassifications (16,672 ) - 101 (16,571 ) Amounts reclassified from other accumulated comprehensive income - 48 - 48 Net current period other comprehensive income (16,672 ) 48 101 (16,523 ) Less: other comprehensive (loss) income attributable to noncontrolling interests (4,717 ) - 51 (4,666 ) Balance at October 31, 2018 $ (4,328 ) $ - $ (638 ) $ (4,966 ) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
Fair Value and Carrying Amount of Convertible Senior Notes | The fair value of our convertible senior notes was a Level 2 measurement, as it was determined using inputs that were either observable market data or could be derived from or corroborated with observable market data. These inputs included our stock price and interest rates offered on debt issued by entities with credit ratings similar to ours. The table below presents the fair and carrying values of our convertible senior notes at October 31, 2018. October 31, 2018 Fair Value Carrying Value 3.25% convertible senior notes matured 2019 $ 62,094 $ 57,453 |
SHARE REPURCHASE PROGRAMS (Tabl
SHARE REPURCHASE PROGRAMS (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
SHARE REPURCHASE PROGRAMS [Abstract] | |
Shares Repurchase Programs | All of the shares purchased under the above repurchase programs were retired in fiscal year 2019. The Table below presents information on the repurchase programs. Fiscal Year 2019 Purchases Fiscal Year 2018 Purchases Total Purchases Under Programs Number of shares repurchased 2,133 2,558 4,691 Cost of shares repurchased $ 21,696 $ 23,111 $ 44,807 Average price paid per share $ 10.17 $ 9.04 $ 9.55 |
QUARTERLY RESULTS OF OPERATIO_2
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) [Abstract] | |
Quarterly Financial Data | The following table sets forth certain unaudited quarterly financial data: First Second Third Fourth Year Fiscal 2019: Revenue $ 124,712 $ 131,580 $ 138,112 $ 156,256 $ 550,660 Gross profit 26,102 26,010 30,570 38,159 120,841 Net income 7,768 9,852 9,834 13,037 40,491 Net income attributable to Photronics, Inc. shareholders 5,267 8,479 6,347 9,700 29,793 Earnings per share: Basic $ 0.08 $ 0.13 $ 0.10 $ 0.15 $ 0.45 Diluted $ 0.08 $ 0.13 $ 0.10 $ 0.15 $ 0.44 First Second Third Fourth Year Fiscal 2018: (a) (a) Revenue $ 123,446 $ 130,779 $ 136,391 $ 144,660 $ 535,276 Gross profit 27,662 32,819 35,597 35,425 131,503 Net income 9,481 15,189 19,797 16,769 61,236 Net income attributable to Photronics, Inc. shareholders 5,898 10,665 13,005 12,487 42,055 Earnings per share: Basic $ 0.09 $ 0.15 $ 0.19 $ 0.18 $ 0.61 Diluted $ 0.09 $ 0.15 $ 0.18 $ 0.18 $ 0.59 (a) Includes $0.6 million gain on sale of assets. |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2019USD ($) | Oct. 31, 2019USD ($)FacilitySubsidiary | Oct. 31, 2018USD ($) | Oct. 29, 2017USD ($) | |
Manufacturing Facilities [Abstract] | ||||
Number of manufacturing facilities | Facility | 11 | |||
Inventories [Abstract] | ||||
Raw materials | $ 46,027 | $ 25,110 | ||
Work in process | 2,122 | 3,402 | ||
Finished goods | 6 | 668 | ||
Inventory | 48,155 | 29,180 | ||
Restricted Cash [Abstract] | ||||
Restricted cash | 2,800 | 2,700 | ||
Foreign Currency Translation [Abstract] | ||||
Foreign currency transaction (loss) gain | $ (1,300) | $ 400 | $ (5,200) | |
Noncontrolling Interests [Abstract] | ||||
Majority owned subsidiaries with significant noncontrolling interests | Subsidiary | 2 | |||
Minimum [Member] | ||||
Intangible Assets [Abstract] | ||||
Estimated useful lives | 3 years | |||
Product Warranty [Abstract] | ||||
Period of warranty | 1 month | |||
Maximum [Member] | ||||
Intangible Assets [Abstract] | ||||
Estimated useful lives | 15 years | |||
Product Warranty [Abstract] | ||||
Period of warranty | 24 months | |||
Buildings and Improvements [Member] | Minimum [Member] | ||||
Property, Plant and Equipment [Abstract] | ||||
Estimated useful lives | 10 years | |||
Buildings and Improvements [Member] | Maximum [Member] | ||||
Property, Plant and Equipment [Abstract] | ||||
Estimated useful lives | 39 years | |||
Machinery and Equipment [Member] | Minimum [Member] | ||||
Property, Plant and Equipment [Abstract] | ||||
Estimated useful lives | 5 years | |||
Machinery and Equipment [Member] | Maximum [Member] | ||||
Property, Plant and Equipment [Abstract] | ||||
Estimated useful lives | 15 years | |||
Furniture, Fixtures and Office Equipment [Member] | Minimum [Member] | ||||
Property, Plant and Equipment [Abstract] | ||||
Estimated useful lives | 3 years | |||
Furniture, Fixtures and Office Equipment [Member] | Maximum [Member] | ||||
Property, Plant and Equipment [Abstract] | ||||
Estimated useful lives | 5 years | |||
PDMC [Member] | ||||
Noncontrolling Interests [Abstract] | ||||
Ownership percentage of noncontrolling interests | 49.99% | 49.99% | ||
PDMCX [Member] | ||||
Noncontrolling Interests [Abstract] | ||||
Ownership percentage of noncontrolling interests | 49.99% | 49.99% | ||
PK Ltd [Member] | ||||
Noncontrolling Interests [Abstract] | ||||
Ownership percentage of noncontrolling interests | 0.20% | 0.20% | ||
PK Ltd [Member] | Subsequent Event [Member] | ||||
Noncontrolling Interests [Abstract] | ||||
Acquired remaining noncontrolling interests shares | $ 600 | |||
Taiwan [Member] | ||||
Manufacturing Facilities [Abstract] | ||||
Number of manufacturing facilities | Facility | 3 | |||
Korea [Member] | ||||
Manufacturing Facilities [Abstract] | ||||
Number of manufacturing facilities | Facility | 1 | |||
United States [Member] | ||||
Manufacturing Facilities [Abstract] | ||||
Number of manufacturing facilities | Facility | 3 | |||
Europe [Member] | ||||
Manufacturing Facilities [Abstract] | ||||
Number of manufacturing facilities | Facility | 2 | |||
China [Member] | ||||
Manufacturing Facilities [Abstract] | ||||
Number of manufacturing facilities | Facility | 2 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2018 | Oct. 31, 2019 | Oct. 29, 2017 | |
Property, plant and equipment [Abstract] | |||
Property, plant and equipment, gross | $ 1,862,714 | $ 1,995,368 | |
Accumulated depreciation and amortization | (1,290,933) | (1,362,927) | |
Property, plant and equipment, net | 571,781 | 632,441 | $ 535,197 |
Equipment acquired in exchange for product | 6,700 | ||
Land [Member] | |||
Property, plant and equipment [Abstract] | |||
Property, plant and equipment, gross | 11,139 | 12,085 | |
Buildings and Improvements [Member] | |||
Property, plant and equipment [Abstract] | |||
Property, plant and equipment, gross | 124,771 | 172,340 | |
Machinery and Equipment [Member] | |||
Property, plant and equipment [Abstract] | |||
Property, plant and equipment, gross | 1,566,163 | 1,748,483 | |
Leasehold Improvements [Member] | |||
Property, plant and equipment [Abstract] | |||
Property, plant and equipment, gross | 19,577 | 19,921 | |
Furniture, Fixtures and Office Equipment [Member] | |||
Property, plant and equipment [Abstract] | |||
Property, plant and equipment, gross | 12,415 | 14,404 | |
Construction in Progress [Member] | |||
Property, plant and equipment [Abstract] | |||
Property, plant and equipment, gross | $ 128,649 | $ 28,135 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2019 | Oct. 31, 2018 | Oct. 29, 2017 | |
Intangible Asset [Abstract] | |||
Amortization of intangible assets | $ 4,641 | $ 4,797 | $ 4,874 |
Intangible assets, net [Abstract] | |||
Gross Amount | 75,327 | 75,282 | |
Accumulated Amortization | (67,457) | (62,914) | |
Net Amount | 7,870 | 12,368 | |
Intangible asset amortization over the next five years [Abstract] | |||
2020 | 4,589 | ||
2021 | 2,721 | ||
2022 | 125 | ||
2023 | 123 | ||
2024 | 123 | ||
Technology License Agreement [Member] | |||
Intangible assets, net [Abstract] | |||
Gross Amount | 59,616 | 59,616 | |
Accumulated Amortization | (53,323) | (49,349) | |
Net Amount | 6,293 | 10,267 | |
Customer Relationships [Member] | |||
Intangible assets, net [Abstract] | |||
Gross Amount | 9,174 | 9,147 | |
Accumulated Amortization | (8,186) | (7,959) | |
Net Amount | 988 | 1,188 | |
Software and Other [Member] | |||
Intangible assets, net [Abstract] | |||
Gross Amount | 6,537 | 6,519 | |
Accumulated Amortization | (5,948) | (5,606) | |
Net Amount | $ 589 | $ 913 | |
Weighted-average amortization period for intangible assets acquired during the year | 3 years | 3 years |
PDMCX JOINT VENTURE (Details)
PDMCX JOINT VENTURE (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Variable Interest Entity [Abstract] | ||
Consolidation liabilities, recourse | $ 0 | |
PDMCX [Member] | ||
Variable Interest Entity [Abstract] | ||
Gain (loss) on consolidation | 0 | |
Total committed investment | 160 | |
Local financing | $ 34.5 | |
Initial term of agreement | 2 years | |
Period before put or purchase option can be exercised | 6 months | |
Operating (loss) | $ 4.9 | $ 0.7 |
PDMCX [Member] | Minimum [Member] | ||
Variable Interest Entity [Abstract] | ||
Ownership percentage | 20.00% | |
PDMCX [Member] | Maximum [Member] | ||
Variable Interest Entity [Abstract] | ||
Number of business days for obtaining required approvals and clearance for exiting party | 3 days | |
PDMCX [Member] | Total Support Remaining [Member] | ||
Variable Interest Entity [Abstract] | ||
Financial or other support, amount | $ 29 | |
PDMCX [Member] | Cash [Member] | Total Support Remaining [Member] | ||
Variable Interest Entity [Abstract] | ||
Financial or other support, amount | 14 | |
PDMCX [Member] | Local Financing [Member] | ||
Variable Interest Entity [Abstract] | ||
Local financing | $ 15 | |
Photronics Interest [Member] | ||
Variable Interest Entity [Abstract] | ||
Ownership percentage | 50.01% | |
Financial or other support, amount | $ 48 | |
Maximum exposure to loss | $ 39.6 | |
DNP [Member] | ||
Variable Interest Entity [Abstract] | ||
Ownership percentage | 49.99% | |
Financial or other support, amount | $ 48 |
PDMCX JOINT VENTURE, Carrying A
PDMCX JOINT VENTURE, Carrying Amounts of Assets and Liabilities (Details) - USD ($) $ in Thousands | Oct. 31, 2019 | Oct. 31, 2018 |
Carrying amounts of assets and liabilities [Abstract] | ||
Current assets | $ 427,527 | $ 502,731 |
Total assets | 1,118,665 | 1,110,009 |
Current liabilities | 151,954 | 191,076 |
Total liabilities | 207,573 | 205,440 |
Carrying Amount [Member] | ||
Carrying amounts of assets and liabilities [Abstract] | ||
Current assets | 24,142 | 9,625 |
Non-current assets | 114,015 | 43,415 |
Total assets | 138,157 | 53,040 |
Current liabilities | 16,889 | 21,205 |
Non-current liabilities | 42,094 | 20 |
Total liabilities | 58,983 | 21,225 |
Net assets | 79,174 | 31,815 |
Photronics Interest [Member] | ||
Carrying amounts of assets and liabilities [Abstract] | ||
Current assets | 12,074 | 4,813 |
Non-current assets | 57,019 | 21,708 |
Total assets | 69,093 | 26,521 |
Current liabilities | 8,446 | 10,603 |
Non-current liabilities | 21,051 | 10 |
Total liabilities | 29,497 | 10,613 |
Net assets | $ 39,596 | $ 15,908 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Oct. 31, 2019 | Oct. 31, 2018 |
ACCRUED LIABILITIES [Abstract] | ||
Compensation related expenses | $ 14,011 | $ 15,359 |
Income taxes | 13,227 | 10,369 |
Contract liabilities | 11,542 | 7,834 |
Value added and other taxes | 3,761 | 3,683 |
Professional fees | 537 | 1,257 |
Other | 6,624 | 5,972 |
Accrued liabilities | $ 49,702 | $ 44,474 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) $ / shares in Units, ¥ in Millions | Aug. 25, 2019USD ($) | Nov. 30, 2019USD ($) | Nov. 30, 2019CNY (¥) | Jul. 28, 2019USD ($) | Apr. 30, 2019USD ($) | Apr. 30, 2016USD ($)shares$ / shares | Jan. 31, 2015USD ($)shares$ / shares | Oct. 31, 2019USD ($) | Oct. 31, 2019CNY (¥) | Oct. 31, 2018USD ($) | Oct. 29, 2017USD ($) | Oct. 31, 2019CNY (¥) | Mar. 31, 2011USD ($) |
Long-term debt [Abstract] | |||||||||||||
Long-term debt | $ 44,029,000 | $ 57,453,000 | |||||||||||
Current portion of long-term debt | (2,142,000) | (57,453,000) | |||||||||||
Long-term debt | $ 41,887,000 | 0 | |||||||||||
Weighted-average interest rate of short -term debt | 3.84% | 3.84% | |||||||||||
Interest payments | $ 2,600,000 | 1,900,000 | $ 2,100,000 | ||||||||||
Repayments of debt | 61,319,000 | 4,639,000 | 5,428,000 | ||||||||||
Proceeds from debt | 54,633,000 | 0 | $ 0 | ||||||||||
Maturities of Long-term Debt [Abstract] | |||||||||||||
2020 | 2,142,000 | ||||||||||||
2021 | 8,304,000 | ||||||||||||
2022 | 12,430,000 | ||||||||||||
2023 | 3,441,000 | ||||||||||||
2024 | 6,589,000 | ||||||||||||
2025 | $ 11,123,000 | ||||||||||||
Master Lease Agreement [Member] | |||||||||||||
Long-term debt [Abstract] | |||||||||||||
Maximum borrowing capacity | $ 35,000,000 | ||||||||||||
Proceeds from debt | $ 3,500,000 | ||||||||||||
Master Lease Agreement [Member] | LIBOR [Member] | |||||||||||||
Long-term debt [Abstract] | |||||||||||||
Basis spread on variable rate | 1.00% | ||||||||||||
Term of variable rate | 30 days | ||||||||||||
Effective interest rate | 2.76% | 2.76% | |||||||||||
Project Loans [Member] | |||||||||||||
Long-term debt [Abstract] | |||||||||||||
Long-term debt | $ 34,490,000 | 0 | |||||||||||
Interest rate percentage | 4.90% | 4.90% | |||||||||||
Maturity date of debt | Dec. 31, 2025 | Dec. 31, 2025 | |||||||||||
Maximum borrowing capacity | $ 50,000,000 | ||||||||||||
Proceeds from credit facility | $ 34,500,000 | ¥ 243.4 | |||||||||||
Date of first required payment | Jun. 30, 2020 | Jun. 30, 2020 | |||||||||||
Maturities of Long-term Debt [Abstract] | |||||||||||||
2020 | $ 1,275,000 | ||||||||||||
2021 | 6,377,000 | ||||||||||||
2022 | 5,685,000 | ||||||||||||
2023 | 3,441,000 | ||||||||||||
2024 | 6,589,000 | ||||||||||||
2025 | 6,305,000 | ||||||||||||
2026 | $ 4,818,000 | ||||||||||||
Working Capital Loans [Member] | |||||||||||||
Long-term debt [Abstract] | |||||||||||||
Maturity date of debt | Jan. 31, 2022 | Jan. 31, 2022 | |||||||||||
Maximum borrowing capacity | $ 25,000,000 | ||||||||||||
Maturities of Long-term Debt [Abstract] | |||||||||||||
2020 | 867,000 | ||||||||||||
2021 | 1,927,000 | ||||||||||||
2022 | $ 6,745,000 | ||||||||||||
Working Capital Loans [Member] | Minimum [Member] | |||||||||||||
Long-term debt [Abstract] | |||||||||||||
Basis spread on variable rate | 0.2575% | 0.2575% | |||||||||||
Working Capital Loans [Member] | Maximum [Member] | |||||||||||||
Long-term debt [Abstract] | |||||||||||||
Basis spread on variable rate | 0.6775% | 0.6775% | |||||||||||
Working Capital Loans (value added tax component) [Member] | |||||||||||||
Long-term debt [Abstract] | |||||||||||||
Long-term debt | $ 9,539,000 | 0 | |||||||||||
Interest rate percentage | 4.90% | 4.90% | |||||||||||
Maximum borrowing capacity | ¥ | ¥ 140 | ||||||||||||
Repayments of debt | $ 100,000 | ||||||||||||
Amount outstanding under credit facility | $ 9,500,000 | ¥ 67.3 | |||||||||||
Working Capital Loans, Fund Operations [Member] | |||||||||||||
Long-term debt [Abstract] | |||||||||||||
Interest rate percentage | 4.60% | 4.60% | |||||||||||
Maximum borrowing capacity | ¥ | ¥ 60 | ||||||||||||
Proceeds from credit facility | $ 5,200,000 | ¥ 36.8 | |||||||||||
Term of loan | 1 year | 1 year | |||||||||||
Working Capital Loans, Fund Operations [Member] | Subsequent Event [Member] | |||||||||||||
Long-term debt [Abstract] | |||||||||||||
Proceeds from credit facility | $ 1,100,000 | ¥ 8 | |||||||||||
3.25% Convertible Senior Notes Matured April 2019 [Member] | |||||||||||||
Long-term debt [Abstract] | |||||||||||||
Long-term debt | $ 0 | $ 57,453,000 | |||||||||||
Interest rate percentage | 3.25% | 3.25% | |||||||||||
Maturity date of debt | Apr. 1, 2019 | Apr. 1, 2019 | |||||||||||
Repayments of debt | $ 57,500,000 | ||||||||||||
Face amount of debt | $ 57,500,000 | ||||||||||||
Number of shares each note is convertible to (in shares) | shares | 96 | ||||||||||||
Face amount of each note converted | $ 1,000 | ||||||||||||
Conversion price per share (in dollars per share) | $ / shares | $ 10.37 | ||||||||||||
3.25% Convertible Senior Notes due in April 2016 [Member] | |||||||||||||
Long-term debt [Abstract] | |||||||||||||
Interest rate percentage | 3.25% | ||||||||||||
Maturity date of debt | Apr. 1, 2016 | ||||||||||||
Face amount of debt | $ 57,500,000 | ||||||||||||
Number of shares each note is convertible to (in shares) | shares | 96 | ||||||||||||
Face amount of each note converted | $ 1,000 | ||||||||||||
Conversion price per share (in dollars per share) | $ / shares | $ 10.37 | ||||||||||||
Amended and Restated Credit Agreement [Member] | |||||||||||||
Long-term debt [Abstract] | |||||||||||||
Maximum borrowing capacity | $ 100,000,000 | ||||||||||||
Term of loan | 5 years | 5 years | |||||||||||
Current borrowing capacity | $ 50,000,000 | ||||||||||||
Cash limit for dividends, distributions and redemption on equity | 100,000,000 | ||||||||||||
Cash limit for dividends, distributions and redemption on equity, annually thereafter | 50,000,000 | ||||||||||||
Amount outstanding under credit facility | 0 | ||||||||||||
Available borrowing capacity | $ 50,000,000 | ||||||||||||
Effective interest rate | 2.78% | 2.78% |
REVENUE, Impact of Adoption on
REVENUE, Impact of Adoption on Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Oct. 31, 2019 | Oct. 31, 2018 |
Assets [Abstract] | ||
Accounts receivable | $ 134,454 | $ 120,515 |
Inventory | 48,155 | 29,180 |
Other current assets | 38,388 | 23,759 |
Deferred income taxes | 20,779 | 18,109 |
Liabilities [Abstract] | ||
Accrued liabilities | 49,702 | 44,474 |
Equity [Abstract] | ||
Photronics, Inc. shareholders' equity | 769,892 | 759,671 |
Noncontrolling interests | 141,200 | 144,898 |
Adjustments [Member] | ASU 2014-09 [Member] | ||
Assets [Abstract] | ||
Accounts receivable | (1,559) | 600 |
Inventory | 6,093 | (3,700) |
Other current assets | (7,595) | |
Deferred income taxes | 90 | |
Liabilities [Abstract] | ||
Accrued liabilities | (110) | |
Equity [Abstract] | ||
Photronics, Inc. shareholders' equity | (1,976) | |
Noncontrolling interests | (885) | $ 100 |
Balance without Adoption of Topic 606 [Member] | ASU 2014-09 [Member] | ||
Assets [Abstract] | ||
Accounts receivable | 132,895 | |
Inventory | 54,248 | |
Other current assets | 30,793 | |
Deferred income taxes | 20,869 | |
Liabilities [Abstract] | ||
Accrued liabilities | 49,592 | |
Equity [Abstract] | ||
Photronics, Inc. shareholders' equity | 767,916 | |
Noncontrolling interests | $ 140,315 |
REVENUE, Impact of Adoption o_2
REVENUE, Impact of Adoption on Statement of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Oct. 31, 2019 | Jul. 28, 2019 | Apr. 28, 2019 | Jan. 27, 2019 | Oct. 31, 2018 | Jul. 29, 2018 | Apr. 29, 2018 | [1] | Jan. 28, 2018 | Oct. 31, 2019 | Oct. 31, 2018 | Oct. 29, 2017 | |||
Income Statement [Abstract] | ||||||||||||||
Revenue | $ 156,256 | $ 138,112 | $ 131,580 | $ 124,712 | $ 144,660 | $ 136,391 | $ 130,779 | $ 123,446 | $ 550,660 | [1] | $ 535,276 | [1] | $ 450,678 | |
Cost of goods sold | 429,819 | 403,773 | 359,363 | |||||||||||
Gross profit | 38,159 | 30,570 | 26,010 | 26,102 | 35,425 | 35,597 | 32,819 | 27,662 | 120,841 | 131,503 | [1] | 91,315 | ||
Provision for taxes | 10,210 | 7,335 | 5,276 | |||||||||||
Net income | 13,037 | 9,834 | 9,852 | 7,768 | 16,769 | 19,797 | 15,189 | 9,481 | 40,491 | 61,236 | [1] | 21,289 | ||
Noncontrolling interests | 10,698 | 19,181 | 8,159 | |||||||||||
Net income attributable to Photronics, Inc. shareholders | $ 9,700 | $ 6,347 | $ 8,479 | $ 5,267 | $ 12,487 | $ 13,005 | $ 10,665 | $ 5,898 | 29,793 | $ 42,055 | [1] | $ 13,130 | ||
Adjustments [Member] | ASU 2014-09 [Member] | ||||||||||||||
Income Statement [Abstract] | ||||||||||||||
Revenue | (4,365) | |||||||||||||
Cost of goods sold | (2,256) | |||||||||||||
Gross profit | (2,109) | |||||||||||||
Provision for taxes | (379) | |||||||||||||
Net income | (1,730) | |||||||||||||
Noncontrolling interests | (749) | |||||||||||||
Net income attributable to Photronics, Inc. shareholders | (981) | |||||||||||||
Balance without Adoption of Topic 606 [Member] | ASU 2014-09 [Member] | ||||||||||||||
Income Statement [Abstract] | ||||||||||||||
Revenue | 546,295 | |||||||||||||
Cost of goods sold | 427,563 | |||||||||||||
Gross profit | 118,732 | |||||||||||||
Provision for taxes | 9,831 | |||||||||||||
Net income | 38,761 | |||||||||||||
Noncontrolling interests | 9,949 | |||||||||||||
Net income attributable to Photronics, Inc. shareholders | $ 28,812 | |||||||||||||
[1] | Includes $0.6 million gain on sale of assets. |
REVENUE, Impact of Adoption o_3
REVENUE, Impact of Adoption on Statement of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Oct. 31, 2019 | Jul. 28, 2019 | Apr. 28, 2019 | Jan. 27, 2019 | Oct. 31, 2018 | Jul. 29, 2018 | Apr. 29, 2018 | [1] | Jan. 28, 2018 | Oct. 31, 2019 | Oct. 31, 2018 | Oct. 29, 2017 | ||
Statement of Cash Flows [Abstract] | |||||||||||||
Net income | $ 13,037 | $ 9,834 | $ 9,852 | $ 7,768 | $ 16,769 | $ 19,797 | $ 15,189 | $ 9,481 | $ 40,491 | $ 61,236 | [1] | $ 21,289 | |
Changes in operating accounts: | |||||||||||||
Accounts receivable | (12,321) | (18,553) | (9,625) | ||||||||||
Inventories | (23,088) | (6,162) | (602) | ||||||||||
Other current assets | (8,631) | (11,731) | 1,127 | ||||||||||
Accounts payable, accrued liabilities, and other | (11,962) | $ 18,537 | $ (7,189) | ||||||||||
Adjustments [Member] | ASU 2014-09 [Member] | |||||||||||||
Statement of Cash Flows [Abstract] | |||||||||||||
Net income | (1,730) | ||||||||||||
Changes in operating accounts: | |||||||||||||
Accounts receivable | 993 | ||||||||||||
Inventories | (2,503) | ||||||||||||
Other current assets | 3,166 | ||||||||||||
Accounts payable, accrued liabilities, and other | 74 | ||||||||||||
Balance without Adoption of Topic 606 [Member] | ASU 2014-09 [Member] | |||||||||||||
Statement of Cash Flows [Abstract] | |||||||||||||
Net income | 38,761 | ||||||||||||
Changes in operating accounts: | |||||||||||||
Accounts receivable | (11,328) | ||||||||||||
Inventories | (25,591) | ||||||||||||
Other current assets | (5,465) | ||||||||||||
Accounts payable, accrued liabilities, and other | $ (11,888) | ||||||||||||
[1] | Includes $0.6 million gain on sale of assets. |
REVENUE, Contract Assets, Liabi
REVENUE, Contract Assets, Liabilities and Accounts Receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Contract with Customer, Asset and Liability [Abstract] | ||
Contract assets | $ 7,600 | |
Contract liabilities | 11,542 | $ 7,834 |
Impairment loss on contract assets | 0 | |
Change in Contract with Customer, Liability [Abstract] | ||
Revenue from settlement of contract liabilities | $ 1,300 | |
Minimum [Member] | ||
Change in Contract with Customer, Liability [Abstract] | ||
Product invoice term | 30 days | |
Product Warranty [Abstract] | ||
Product warranty period | 1 month | |
Maximum [Member] | ||
Change in Contract with Customer, Liability [Abstract] | ||
Product invoice term | 90 days | |
Product Warranty [Abstract] | ||
Product warranty period | 24 months | |
IC [Member] | Minimum [Member] | ||
Remaining Performance Obligations [Abstract] | ||
Customer order, expected satisfaction period | 7 days | |
IC [Member] | Maximum [Member] | ||
Remaining Performance Obligations [Abstract] | ||
Customer order, expected satisfaction period | 14 days | |
FPD [Member] | Minimum [Member] | ||
Remaining Performance Obligations [Abstract] | ||
Customer order, expected satisfaction period | 14 days | |
FPD [Member] | Maximum [Member] | ||
Remaining Performance Obligations [Abstract] | ||
Customer order, expected satisfaction period | 21 days | |
ASU 2014-09 [Member] | ||
Contract with Customer, Asset and Liability [Abstract] | ||
Contract assets | 4,600 | |
Contract liabilities | $ 7,800 |
REVENUE, Disaggregation of Reve
REVENUE, Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Oct. 31, 2019 | Jul. 28, 2019 | Apr. 28, 2019 | Jan. 27, 2019 | Oct. 31, 2018 | Jul. 29, 2018 | Apr. 29, 2018 | [1] | Jan. 28, 2018 | Oct. 31, 2019 | Oct. 31, 2018 | Oct. 29, 2017 | |||
Disaggregation of Revenue [Abstract] | ||||||||||||||
Revenue | $ 156,256 | $ 138,112 | $ 131,580 | $ 124,712 | $ 144,660 | $ 136,391 | $ 130,779 | $ 123,446 | $ 550,660 | [1] | $ 535,276 | [1] | $ 450,678 | |
Over Time [Member] | ||||||||||||||
Disaggregation of Revenue [Abstract] | ||||||||||||||
Revenue | 497,942 | |||||||||||||
At a Point in Time [Member] | ||||||||||||||
Disaggregation of Revenue [Abstract] | ||||||||||||||
Revenue | 52,718 | |||||||||||||
Taiwan [Member] | ||||||||||||||
Disaggregation of Revenue [Abstract] | ||||||||||||||
Revenue | 244,377 | 237,039 | 187,818 | |||||||||||
Korea [Member] | ||||||||||||||
Disaggregation of Revenue [Abstract] | ||||||||||||||
Revenue | 147,734 | 147,066 | 122,165 | |||||||||||
United States [Member] | ||||||||||||||
Disaggregation of Revenue [Abstract] | ||||||||||||||
Revenue | 105,045 | 112,648 | 102,040 | |||||||||||
Europe [Member] | ||||||||||||||
Disaggregation of Revenue [Abstract] | ||||||||||||||
Revenue | 32,585 | 35,540 | 36,081 | |||||||||||
China [Member] | ||||||||||||||
Disaggregation of Revenue [Abstract] | ||||||||||||||
Revenue | 19,010 | 1,157 | 168 | |||||||||||
All Other Asia [Member] | ||||||||||||||
Disaggregation of Revenue [Abstract] | ||||||||||||||
Revenue | 1,909 | 1,826 | 2,406 | |||||||||||
IC [Member] | ||||||||||||||
Disaggregation of Revenue [Abstract] | ||||||||||||||
Revenue | 406,191 | 416,064 | 350,260 | |||||||||||
High-end [Member] | ||||||||||||||
Disaggregation of Revenue [Abstract] | ||||||||||||||
Revenue | 156,418 | |||||||||||||
Mainstream [Member] | ||||||||||||||
Disaggregation of Revenue [Abstract] | ||||||||||||||
Revenue | 249,773 | |||||||||||||
FPD [Member] | ||||||||||||||
Disaggregation of Revenue [Abstract] | ||||||||||||||
Revenue | 144,469 | $ 119,212 | $ 100,418 | |||||||||||
High-end [Member] | ||||||||||||||
Disaggregation of Revenue [Abstract] | ||||||||||||||
Revenue | 98,832 | |||||||||||||
Mainstream [Member] | ||||||||||||||
Disaggregation of Revenue [Abstract] | ||||||||||||||
Revenue | $ 45,637 | |||||||||||||
[1] | Includes $0.6 million gain on sale of assets. |
OPERATING LEASES (Details)
OPERATING LEASES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2019 | Oct. 31, 2018 | Oct. 29, 2017 | |
OPERATING LEASES [Abstract] | |||
Rent expense under operating leases | $ 3,000 | $ 2,900 | $ 3,000 |
Future minimum lease payments under non-cancelable operating leases [Abstract] | |||
2020 | 1,885 | ||
2021 | 1,613 | ||
2022 | 1,535 | ||
2023 | 742 | ||
2024 | 424 | ||
Thereafter | 377 | ||
Total future minimum payments due | $ 6,576 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Oct. 31, 2019 | Oct. 31, 2018 | Oct. 29, 2017 | |
Share-based Compensation [Abstract] | |||
Maximum number of shares of common stock that may be issued (in shares) | 4,000,000 | ||
Share-based compensation expense incurred | $ 3,700 | $ 3,200 | $ 3,600 |
Share-based compensation cost capitalized | 0 | 0 | 0 |
Income tax benefits realized from stock option exercises | $ 0 | $ 0 | $ 0 |
Stock Options [Member] | |||
Share-based Compensation [Abstract] | |||
Contractual term | 10 years | ||
Weighted-average inputs and risk-free rate of return ranges used to calculate the grant date fair value of options [Abstract] | |||
Expected volatility | 33.10% | 31.70% | 32.20% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Expected term | 5 years 1 month 6 days | 5 years | 5 years |
Outstanding and exercisable option awards [Roll Forward] | |||
Outstanding at beginning of period (in shares) | 2,423,560 | ||
Granted (in shares) | 132,000 | ||
Exercised (in shares) | (322,010) | ||
Cancelled and forfeited (in shares) | (62,783) | ||
Outstanding at end of period (in shares) | 2,170,767 | 2,423,560 | |
Exercisable at end of period (in shares) | 1,615,225 | ||
Vested and expected to vest (in shares) | 2,095,804 | ||
Weighted-Average Exercise Price [Abstract] | |||
Outstanding at beginning of period (in dollars per share) | $ 8.68 | ||
Granted (in dollars per share) | 9.77 | ||
Exercised (in dollars per share) | 6.43 | ||
Cancelled and forfeited (in dollars per share) | 11.47 | ||
Outstanding at end of period (in dollars per share) | 9 | $ 8.68 | |
Exercisable at end of period (in dollars per share) | 8.61 | ||
Vested and expected to vest (in dollars per share) | $ 8.95 | ||
Weighted-Average Remaining Contractual Life [Abstract] | |||
Outstanding at end of period | 5 years 4 months 24 days | ||
Exercisable at end of period | 4 years 7 months 6 days | ||
Vested and expected to vest | 5 years 3 months 18 days | ||
Aggregate Intrinsic Value [Abstract] | |||
Outstanding at end of period | $ 6,206 | ||
Exercisable at end of period | 5,242 | ||
Vested and expected to vest | $ 6,096 | ||
Additional disclosures [Abstract] | |||
Weighted-average grant date fair value of options granted (in dollars per share) | $ 3.31 | $ 2.76 | $ 3.59 |
Total intrinsic value of options exercised | $ 1,300 | $ 2,500 | $ 1,900 |
Cash received from options exercises | 2,100 | $ 4,300 | $ 2,400 |
Unrecognized compensation cost related to unvested option awards | $ 900 | ||
Period for recognition of compensation cost not yet recognized | 2 years 1 month 6 days | ||
Stock Options [Member] | Minimum [Member] | |||
Share-based Compensation [Abstract] | |||
Award vesting period | 1 year | ||
Weighted-average inputs and risk-free rate of return ranges used to calculate the grant date fair value of options [Abstract] | |||
Risk-free rate of return | 2.50% | 2.20% | 1.90% |
Stock Options [Member] | Maximum [Member] | |||
Share-based Compensation [Abstract] | |||
Award vesting period | 4 years | ||
Weighted-average inputs and risk-free rate of return ranges used to calculate the grant date fair value of options [Abstract] | |||
Risk-free rate of return | 2.90% | 2.80% | 2.00% |
Restricted Stock [Member] | |||
Additional disclosures [Abstract] | |||
Period for recognition of compensation cost not yet recognized | 2 years 7 months 6 days | ||
Total fair value of awards for which restrictions lapsed | $ 1,900 | $ 1,400 | $ 1,200 |
Compensation cost not yet recognized related to share based payment awards other than options | $ 4,300 | ||
Shares [Rollforward] | |||
Outstanding at beginning of period (in shares) | 419,297 | ||
Granted (in shares) | 435,000 | 290,000 | 317,750 |
Vested (in shares) | (195,684) | ||
Cancelled (in shares) | (18,500) | ||
Outstanding at end of period (in shares) | 640,113 | 419,297 | |
Expected to vest (in shares) | 594,771 | ||
Weighted-Average Fair Value at Grant Date [Abstract] | |||
Outstanding at beginning of period (in dollars per share) | $ 9.58 | ||
Granted (in dollars per share) | 9.80 | $ 8.62 | $ 10.94 |
Vested (in dollars per share) | 9.65 | ||
Cancelled (in dollars per share) | 9.82 | ||
Outstanding at end of period (in dollars per share) | 9.70 | $ 9.58 | |
Expected to vest (in dollars per share) | $ 9.69 | ||
Restricted Stock [Member] | Minimum [Member] | |||
Share-based Compensation [Abstract] | |||
Award vesting period | 1 year | ||
Restricted Stock [Member] | Maximum [Member] | |||
Share-based Compensation [Abstract] | |||
Award vesting period | 4 years | ||
Employee Stock Purchase Plan [Member] | |||
Share-based Compensation [Abstract] | |||
Maximum number of shares of common stock that may be issued (in shares) | 1,850,000 | ||
Award vesting period | 1 year | ||
Shares [Rollforward] | |||
Outstanding at end of period (in shares) | 0 | ||
Weighted-Average Fair Value at Grant Date [Abstract] | |||
Percent of market price that participants pay for shares subscribed | 85.00% | ||
Total shares issued since inception (in shares) | 1,500,000 |
EMPLOYEE RETIREMENT PLANS (Deta
EMPLOYEE RETIREMENT PLANS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2019 | Oct. 31, 2018 | Oct. 29, 2017 | |
EMPLOYEE RETIREMENT PLANS [Abstract] | |||
Number of months of service completed to come under retirement plan | 3 months | ||
Minimum age of employees to come under retirement plan | 18 years | ||
Percentage of salary that can be contributed by the employee | 50.00% | ||
Maximum percentage of employees' contributions that Company will match | 50.00% | ||
Maximum percentage of employees' gross pay that Company will match | 4.00% | ||
Company's contribution to defined contribution retirement plans | $ 0.7 | $ 0.7 | $ 0.6 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Oct. 31, 2019 | Oct. 31, 2018 | Oct. 29, 2017 | |
Components of income before income tax provision [Abstract] | |||
United States | $ (8,379) | $ (9,859) | $ (11,544) |
Foreign | 59,080 | 78,430 | 38,109 |
Income before income tax provision | 50,701 | 68,571 | 26,565 |
Current [Abstract] | |||
Federal | (3,916) | (30) | 173 |
State | 11 | 0 | (4) |
Foreign | 17,777 | 11,584 | 3,474 |
Deferred [Abstract] | |||
Federal | 3,673 | (3,673) | 0 |
State | 10 | (24) | 15 |
Foreign | (7,345) | (522) | 1,618 |
Income Tax Expense, Total | 10,210 | 7,335 | 5,276 |
Income tax provision reconciliation [Abstract] | |||
U.S. federal income tax at statutory rate | 10,647 | 16,059 | 9,298 |
Changes in valuation allowances | 2,673 | 4,554 | (3,632) |
Foreign tax rate differentials | 218 | (2,078) | (5,230) |
Tax credits | (1,268) | (1,530) | (1,925) |
Uncertain tax positions, including reserves, settlements and resolutions | 134 | (1,791) | (932) |
Employee stock option | 232 | (1,433) | 512 |
Income tax holiday | (2,234) | (2,648) | (743) |
Tax reform | 0 | (3,736) | 0 |
Distributions from foreign subsidiaries | 0 | 0 | 6,471 |
Tax on foreign subsidiary earnings | 0 | 0 | 1,712 |
Other, net | (192) | (62) | (255) |
Income Tax Expense, Total | $ 10,210 | $ 7,335 | $ 5,276 |
Effective tax rate | 20.10% | 10.70% | 19.80% |
U.S. statutory rate | 21.00% | 23.42% | 35.00% |
Income Tax Holiday [Abstract] | |||
Term of tax year holidays | 5 years | ||
Dollar effect of income tax holiday | $ 2,200 | $ 2,600 | $ 700 |
Per share effect of income tax holiday (in dollars per share) | $ 0.02 | $ 0.035 | |
Deferred income tax assets [Abstract] | |||
Net operating losses | $ 32,229 | $ 30,805 | |
Reserves not currently deductible | 5,013 | 4,703 | |
Tax credit carryforwards | 9,164 | 9,159 | |
Share-based compensation | 860 | 767 | |
Alternative minimum tax credits | 0 | 3,673 | |
Other | 434 | 1,210 | |
Deferred tax assets | 47,700 | 50,317 | |
Valuation allowances | (27,032) | (24,383) | |
Deferred tax assets net of valuation allowance | 20,668 | 25,934 | |
Deferred income tax liabilities [Abstract] | |||
Property, plant and equipment | (251) | (8,020) | |
Other | 0 | (448) | |
Deferred income taxes liabilities | (251) | (8,468) | |
Net deferred income tax assets | 20,417 | 17,466 | |
Reported as [Abstract] | |||
Deferred income tax assets | 20,779 | 18,109 | |
Deferred income tax liabilities | (362) | (643) | |
Net deferred income tax assets | $ 20,417 | 17,466 | |
Taiwan Agency of the Ministry of Finance [Member] | |||
Foreign Tax [Abstract] | |||
Foreign statutory rate | 20.00% | 17.00% | |
Foreign income tax expense (benefit) | $ (200) | ||
Federal Alternate Minimum [Member] | |||
Foreign Tax [Abstract] | |||
Change in valuation allowance | $ 3,900 | ||
Foreign [Member] | Minimum [Member] | |||
Income Tax Holiday [Abstract] | |||
Income tax holiday termination date | October 31, 2017 | ||
Foreign [Member] | Maximum [Member] | |||
Income Tax Holiday [Abstract] | |||
Income tax holiday termination date | December 31, 2019 |
INCOME TAXES, UNRECOGNIZED TAX
INCOME TAXES, UNRECOGNIZED TAX BENEFITS AND CARRYFORWARDS (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Oct. 31, 2019 | Oct. 31, 2018 | Oct. 29, 2017 | |
Valuation Allowance [Abstract] | ||||
Valuation allowance change - AMT credits | $ (3,900) | |||
Valuation allowance change - NOL Utilization | (1,800) | |||
Valuation allowance change - Credit Utilizations | (1,300) | |||
Valuation allowance change - change in deferred tax liability | 2,800 | |||
Valuation allowance change - adoption of ASU 2016-09 | 1,800 | |||
Valuation allowance change - corporate tax rate reduction | 1,600 | |||
Valuation allowance change - impact of other factors | $ (400) | |||
Rights Agreement [Abstract] | ||||
Dividend declared, preferred stock for each share of common stock outstanding (in shares) | 1 | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |
Unrecognized Tax Benefits [Abstract] | ||||
Balance at beginning of year | $ 1,775 | $ 3,384 | $ 4,606 | |
Additions for tax positions in prior years | 207 | |||
Reductions for tax positions in prior years | (466) | (44) | ||
Additions based on current year tax positions | 1,286 | 498 | 323 | |
Settlements | (204) | (56) | (922) | |
Lapses of statutes of limitations | (633) | (2,007) | (830) | |
Balance at end of year | 1,758 | 1,775 | 3,384 | |
Income Tax Uncertainties [Abstract] | ||||
Accrued interest and penalties related to unrecognized tax benefits | 200 | 100 | 100 | |
Income taxes, additional disclosures [Abstract] | ||||
Income taxes paid | 15,900 | 6,100 | 9,300 | |
Cash received for refunds of income taxes | 1,100 | 100 | ||
ASU 2016-16 [Member] | ||||
Adoption of New Accounting Standard [Abstract] | ||||
Cumulative effect of adoption of new accounting principle | (1,133) | |||
Recorded in Other Liabilities [Member] | ||||
Income Tax Uncertainties [Abstract] | ||||
Unrecognized tax benefits that would impact effective tax rate | 1,900 | $ 1,900 | $ 3,400 | |
Federal Research and Development [Member] | ||||
Tax Credit Carryforward [Abstract] | ||||
Tax credit carryforward amount | $ 4,522 | |||
Federal Research and Development [Member] | Minimum [Member] | ||||
Tax Credit Carryforward [Abstract] | ||||
Expiration period | Oct. 31, 2019 | |||
Federal Research and Development [Member] | Maximum [Member] | ||||
Tax Credit Carryforward [Abstract] | ||||
Expiration period | Oct. 31, 2039 | |||
State [Member] | ||||
Tax Credit Carryforward [Abstract] | ||||
Tax credit carryforward amount | $ 5,870 | |||
State [Member] | Minimum [Member] | ||||
Tax Credit Carryforward [Abstract] | ||||
Expiration period | Oct. 31, 2020 | |||
State [Member] | Maximum [Member] | ||||
Tax Credit Carryforward [Abstract] | ||||
Expiration period | Oct. 31, 2029 | |||
Federal [Member] | ||||
Operating Loss Carryforward [Abstract] | ||||
Operating loss carryforwards amount | $ 85,949 | |||
Federal [Member] | Minimum [Member] | ||||
Operating Loss Carryforward [Abstract] | ||||
Expiration periods | Oct. 31, 2028 | |||
State [Member] | ||||
Operating Loss Carryforward [Abstract] | ||||
Operating loss carryforwards amount | $ 206,513 | |||
State [Member] | Minimum [Member] | ||||
Operating Loss Carryforward [Abstract] | ||||
Expiration periods | Oct. 31, 2019 | |||
State [Member] | Maximum [Member] | ||||
Operating Loss Carryforward [Abstract] | ||||
Expiration periods | Oct. 31, 2039 | |||
Foreign [Member] | ||||
Operating Loss Carryforward [Abstract] | ||||
Operating loss carryforwards amount | $ 9,177 | |||
Foreign [Member] | Minimum [Member] | ||||
Operating Loss Carryforward [Abstract] | ||||
Expiration periods | Oct. 31, 2022 | |||
Foreign [Member] | Maximum [Member] | ||||
Operating Loss Carryforward [Abstract] | ||||
Expiration periods | Oct. 31, 2029 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | 24 Months Ended | |||||||||||
Nov. 27, 2019 | Oct. 31, 2019 | Jul. 28, 2019 | Apr. 28, 2019 | Jan. 27, 2019 | Oct. 31, 2018 | Jul. 29, 2018 | Apr. 29, 2018 | [1] | Jan. 28, 2018 | Oct. 31, 2019 | Oct. 31, 2018 | Oct. 29, 2017 | Oct. 31, 2019 | ||
Calculation of basic and diluted earnings per share [Abstract] | |||||||||||||||
Net income attributable to Photronics, Inc. shareholders | $ 9,700 | $ 6,347 | $ 8,479 | $ 5,267 | $ 12,487 | $ 13,005 | $ 10,665 | $ 5,898 | $ 29,793 | $ 42,055 | [1] | $ 13,130 | |||
Effect of dilutive securities [Abstract] | |||||||||||||||
Interest expense on convertible notes, net of tax | 845 | 1,999 | 0 | ||||||||||||
Earnings used for diluted earnings per share | $ 30,638 | $ 44,054 | $ 13,130 | ||||||||||||
Weighted-average common shares computations [Abstract] | |||||||||||||||
Weighted-average common shares used for basic earnings per share (in shares) | 66,347 | 68,829 | 68,436 | ||||||||||||
Effect of dilutive securities [Abstract] | |||||||||||||||
Convertible notes (in shares) | 2,360 | 5,542 | 0 | ||||||||||||
Share-based payment awards (in shares) | 448 | 450 | 852 | ||||||||||||
Potentially dilutive common shares (in shares) | 2,808 | 5,992 | 852 | ||||||||||||
Weighted-average common shares used for diluted earnings per share (in shares) | 69,155 | 74,821 | 69,288 | ||||||||||||
Basic earnings per share (in dollars per share) | $ 0.15 | $ 0.10 | $ 0.13 | $ 0.08 | $ 0.18 | $ 0.19 | $ 0.15 | $ 0.09 | $ 0.45 | $ 0.61 | [1] | $ 0.19 | |||
Diluted earnings per share (in dollars per share) | $ 0.15 | $ 0.10 | $ 0.13 | $ 0.08 | $ 0.18 | $ 0.18 | $ 0.15 | $ 0.09 | $ 0.44 | $ 0.59 | [1] | $ 0.19 | |||
Antidilutive Securities [Abstract] | |||||||||||||||
Total potentially dilutive shares excluded (in shares) | 1,250 | 1,627 | 6,850 | ||||||||||||
Repurchased common stock (in shares) | 2,133 | 2,558 | 4,691 | ||||||||||||
Subsequent Event [Member] | |||||||||||||||
Antidilutive Securities [Abstract] | |||||||||||||||
Repurchased common stock (in shares) | 900 | ||||||||||||||
Share based Payment Awards [Member] | |||||||||||||||
Antidilutive Securities [Abstract] | |||||||||||||||
Total potentially dilutive shares excluded (in shares) | 1,250 | 1,627 | 1,308 | ||||||||||||
Convertible Notes [Member] | |||||||||||||||
Antidilutive Securities [Abstract] | |||||||||||||||
Total potentially dilutive shares excluded (in shares) | 0 | 0 | 5,542 | ||||||||||||
[1] | Includes $0.6 million gain on sale of assets. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Oct. 31, 2019USD ($) |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
Outstanding purchase commitments | $ 130.3 |
Purchase commitments related to capital equipment | 111.8 |
Future capital lease | 30.8 |
Purchase commitments | $ 17.2 |
GEOGRAPHIC AND SIGNIFICANT CU_3
GEOGRAPHIC AND SIGNIFICANT CUSTOMER INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Oct. 31, 2019 | Jul. 28, 2019 | Apr. 28, 2019 | Jan. 27, 2019 | Oct. 31, 2018 | Jul. 29, 2018 | Apr. 29, 2018 | [1] | Jan. 28, 2018 | Oct. 31, 2019 | Oct. 31, 2018 | Oct. 29, 2017 | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Revenue | $ 156,256 | $ 138,112 | $ 131,580 | $ 124,712 | $ 144,660 | $ 136,391 | $ 130,779 | $ 123,446 | $ 550,660 | [1] | $ 535,276 | [1] | $ 450,678 | |
Long-lived assets | 632,441 | 571,781 | 632,441 | 571,781 | 535,197 | |||||||||
Customer One [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Revenue | 87,000 | 78,400 | 73,600 | |||||||||||
IC [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Revenue | 406,191 | 416,064 | 350,260 | |||||||||||
FPD [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Revenue | 144,469 | 119,212 | 100,418 | |||||||||||
Taiwan [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Revenue | 244,377 | 237,039 | 187,818 | |||||||||||
Long-lived assets | 146,467 | 177,626 | 146,467 | 177,626 | 186,192 | |||||||||
Korea [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Revenue | 147,734 | 147,066 | 122,165 | |||||||||||
Long-lived assets | 117,755 | 127,764 | 117,755 | 127,764 | 147,265 | |||||||||
United States [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Revenue | 105,045 | 112,648 | 102,040 | |||||||||||
Long-lived assets | 130,935 | 156,948 | 130,935 | 156,948 | 180,095 | |||||||||
Europe [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Revenue | 32,585 | 35,540 | 36,081 | |||||||||||
Long-lived assets | 4,890 | 6,458 | 4,890 | 6,458 | 13,372 | |||||||||
China [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Revenue | 19,010 | 1,157 | 168 | |||||||||||
Long-lived assets | $ 232,394 | $ 102,985 | 232,394 | 102,985 | 8,273 | |||||||||
All Other Asia [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Revenue | $ 1,909 | $ 1,826 | $ 2,406 | |||||||||||
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Customer One [Member] | ||||||||||||||
Customer Account [Abstract] | ||||||||||||||
Percent of net sales accounted for by significant customer | 16.00% | 16.00% | 16.00% | |||||||||||
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Customer Two [Member] | ||||||||||||||
Customer Account [Abstract] | ||||||||||||||
Percent of net sales accounted for by significant customer | 15.00% | 15.00% | 16.00% | |||||||||||
[1] | Includes $0.6 million gain on sale of assets. |
CHANGES IN ACCUMULATED OTHER _3
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2019 | Oct. 31, 2018 | Oct. 29, 2017 | |
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT [Abstract] | |||
Other comprehensive income, tax | $ 0 | $ 0 | |
Changes in Accumulated Other Comprehensive Income [Roll Forward] | |||
Beginning Balance | 759,671 | ||
Net other comprehensive (loss) income | (2,951) | (16,523) | $ 20,406 |
Ending Balance | 769,892 | 759,671 | |
Accumulated Other Comprehensive Income (Loss) [Member] | |||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | |||
Beginning Balance | (4,966) | 6,891 | |
Net other comprehensive (loss) income | (4,039) | (11,857) | 14,562 |
Ending Balance | (9,005) | (4,966) | 6,891 |
Foreign Currency Translation Adjustments [Member] | |||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | |||
Beginning Balance | (4,328) | 7,627 | |
Ending Balance | (8,331) | (4,328) | 7,627 |
Amortization of Cash Flow Hedge [Member] | |||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | |||
Beginning Balance | 0 | (48) | |
Ending Balance | 0 | (48) | |
Other [Member] | |||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | |||
Beginning Balance | (638) | (688) | |
Ending Balance | (674) | (638) | $ (688) |
AOCI Including Portion Attributable to Noncontrolling Interest [Member] | |||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | |||
Other comprehensive income (loss) before reclassifications | (2,951) | (16,571) | |
Amounts reclassified from other comprehensive income | 48 | ||
Net other comprehensive (loss) income | (16,523) | ||
Foreign Currency Translation Adjustments [Member] | |||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | |||
Other comprehensive income (loss) before reclassifications | (2,877) | (16,672) | |
Amounts reclassified from other comprehensive income | 0 | ||
Net other comprehensive (loss) income | (16,672) | ||
Amortization of Cash Flows Hedge [Member] | |||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | |||
Other comprehensive income (loss) before reclassifications | 0 | ||
Amounts reclassified from other comprehensive income | 48 | ||
Net other comprehensive (loss) income | 48 | ||
Other [Member] | |||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | |||
Other comprehensive income (loss) before reclassifications | (74) | 101 | |
Amounts reclassified from other comprehensive income | 0 | ||
Net other comprehensive (loss) income | 101 | ||
AOCI Attributable to Noncontrolling Interest [Member] | |||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | |||
Less: other comprehensive (loss) income attributable to noncontrolling interests | 1,088 | (4,666) | |
Foreign Currency Translation Adjustments [Member] | |||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | |||
Less: other comprehensive (loss) income attributable to noncontrolling interests | 1,126 | (4,717) | |
Amortization of Cash Flows Hedge [Member] | |||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | |||
Less: other comprehensive (loss) income attributable to noncontrolling interests | 0 | ||
Other [Member] | |||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | |||
Less: other comprehensive (loss) income attributable to noncontrolling interests | $ (38) | $ 51 |
CONCENTRATIONS OF CREDIT RISK (
CONCENTRATIONS OF CREDIT RISK (Details) - Customer | 12 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Customer Account [Abstract] | ||
Number of customers concentration risk in accounts receivable | 1 | 2 |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Customer One [Member] | ||
Customer Account [Abstract] | ||
Customer's percentage of net accounts receivable | 17.00% | 20.00% |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Customer Two [Member] | ||
Customer Account [Abstract] | ||
Customer's percentage of net accounts receivable | 10.00% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Oct. 31, 2019 | Jul. 28, 2019 | Apr. 28, 2019 | Jan. 27, 2019 | Oct. 31, 2018 | Jul. 29, 2018 | Apr. 29, 2018 | [1] | Jan. 28, 2018 | Oct. 31, 2019 | Oct. 31, 2018 | Oct. 29, 2017 | |||
Related Party Agreement [Abstract] | ||||||||||||||
Revenue | $ 156,256 | $ 138,112 | $ 131,580 | $ 124,712 | $ 144,660 | $ 136,391 | $ 130,779 | $ 123,446 | $ 550,660 | [1] | $ 535,276 | [1] | $ 450,678 | |
Accounts receivable | 134,454 | 120,515 | 134,454 | 120,515 | ||||||||||
Customer One [Member] | ||||||||||||||
Related Party Agreement [Abstract] | ||||||||||||||
Revenue | 87,000 | 78,400 | 73,600 | |||||||||||
Accounts receivable | $ 22,200 | $ 23,500 | $ 22,200 | 23,500 | ||||||||||
DEMA Associates, LLC [Member] | ||||||||||||||
Related Party Agreement [Abstract] | ||||||||||||||
Consulting agreement period | 4 years | |||||||||||||
Annual cost of consulting contract | $ 400 | |||||||||||||
Expenses incurred for goods or services provided by related party during the period | $ 400 | 300 | ||||||||||||
Information Technology Services Provider [Member] | ||||||||||||||
Related Party Agreement [Abstract] | ||||||||||||||
Expenses incurred for goods or services provided by related party during the period | $ 100 | 500 | ||||||||||||
Photomask Blank Supplier [Member] | ||||||||||||||
Related Party Agreement [Abstract] | ||||||||||||||
Expenses incurred for goods or services provided by related party during the period | $ 4,500 | |||||||||||||
[1] | Includes $0.6 million gain on sale of assets. |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Fair Value, Assets and Liability [Abstract] | ||
Total assets | $ 0 | $ 0 |
Total liabilities | $ 0 | $ 0 |
3.25% Convertible Senior Notes Matured 2019 [Member] | ||
Fair and carrying values of the Company's convertible senior notes [Abstract] | ||
Interest rate percentage | 3.25% | 3.25% |
Maturity date of debt | Apr. 1, 2019 | Apr. 1, 2019 |
Fair Value [Member] | 3.25% Convertible Senior Notes Matured 2019 [Member] | ||
Fair and carrying values of the Company's convertible senior notes [Abstract] | ||
Convertible senior notes | $ 62,094 | |
Carrying Value [Member] | 3.25% Convertible Senior Notes Matured 2019 [Member] | ||
Fair and carrying values of the Company's convertible senior notes [Abstract] | ||
Convertible senior notes | $ 57,453 |
SHARE REPURCHASE PROGRAMS (Deta
SHARE REPURCHASE PROGRAMS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | 24 Months Ended | ||
Oct. 31, 2019 | Oct. 31, 2018 | Oct. 31, 2019 | Jul. 31, 2018 | |
Shares Repurchase Programs and Preferred Stock Purchase Rights [Abstract] | ||||
Number of shares repurchased (in shares) | 2,133 | 2,558 | 4,691 | |
Cost of shares repurchased | $ 21,696 | $ 23,111 | $ 44,807 | |
Average price paid per share (in dollars per share) | $ 10.17 | $ 9.04 | $ 9.55 | |
August 2019 Announced Program [Member] | ||||
Shares Repurchase Programs and Preferred Stock Purchase Rights [Abstract] | ||||
Stock repurchased authorized amount | $ 100,000 | $ 100,000 | ||
July 2018 Announced Program [Member] | ||||
Shares Repurchase Programs and Preferred Stock Purchase Rights [Abstract] | ||||
Stock repurchased authorized amount | $ 20,000 | |||
Stock repurchase program - commencement date | Jul. 10, 2018 | |||
Stock repurchase program - expiration date | Oct. 31, 2018 | |||
October 2018 Announced Program [Member] | ||||
Shares Repurchase Programs and Preferred Stock Purchase Rights [Abstract] | ||||
Stock repurchased authorized amount | $ 25,000 | |||
Stock repurchase program - commencement date | Oct. 22, 2018 | |||
Stock repurchase program - expiration date | Feb. 1, 2019 |
SUBSIDIARY DIVIDEND (Details)
SUBSIDIARY DIVIDEND (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2019 | Oct. 31, 2018 | Oct. 29, 2017 | |
Noncontrolling Interest [Abstract] | |||
Dividend paid to noncontrolling interest | $ 45,050 | $ 8,166 | $ 8,298 |
PDMC [Member] | |||
Noncontrolling Interest [Abstract] | |||
Ownership percentage of noncontrolling interests | 49.99% | 49.99% | |
Dividend paid to noncontrolling interest | $ 45,100 | $ 8,200 |
QUARTERLY RESULTS OF OPERATIO_3
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Oct. 31, 2019 | Jul. 28, 2019 | Apr. 28, 2019 | Jan. 27, 2019 | Oct. 31, 2018 | Jul. 29, 2018 | Apr. 29, 2018 | Jan. 28, 2018 | Oct. 31, 2019 | Oct. 31, 2018 | Oct. 29, 2017 | ||||
Selected Quarterly Financial Data (Unaudited) [Abstract] | ||||||||||||||
Revenue | $ 156,256 | $ 138,112 | $ 131,580 | $ 124,712 | $ 144,660 | $ 136,391 | $ 130,779 | [1] | $ 123,446 | $ 550,660 | [1] | $ 535,276 | [1] | $ 450,678 |
Gross profit | 38,159 | 30,570 | 26,010 | 26,102 | 35,425 | 35,597 | 32,819 | [1] | 27,662 | 120,841 | 131,503 | [1] | 91,315 | |
Net income | 13,037 | 9,834 | 9,852 | 7,768 | 16,769 | 19,797 | 15,189 | [1] | 9,481 | 40,491 | 61,236 | [1] | 21,289 | |
Net income attributable to Photronics, Inc. shareholders | $ 9,700 | $ 6,347 | $ 8,479 | $ 5,267 | $ 12,487 | $ 13,005 | $ 10,665 | [1] | $ 5,898 | $ 29,793 | $ 42,055 | [1] | $ 13,130 | |
Earnings per share [Abstract] | ||||||||||||||
Basic (in dollars per share) | $ 0.15 | $ 0.10 | $ 0.13 | $ 0.08 | $ 0.18 | $ 0.19 | $ 0.15 | [1] | $ 0.09 | $ 0.45 | $ 0.61 | [1] | $ 0.19 | |
Diluted (in dollars per share) | $ 0.15 | $ 0.10 | $ 0.13 | $ 0.08 | $ 0.18 | $ 0.18 | $ 0.15 | [1] | $ 0.09 | $ 0.44 | $ 0.59 | [1] | $ 0.19 | |
Gain on sale of assets | $ 600 | $ 600 | ||||||||||||
[1] | Includes $0.6 million gain on sale of assets. |
RECENT ACCOUNTING PRONOUNCEME_3
RECENT ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Thousands | Oct. 31, 2019 | Oct. 31, 2018 |
Contract with Customer, Asset and Liability [Abstract] | ||
Accounts receivable | $ 134,454 | $ 120,515 |
Inventories | 48,155 | 29,180 |
Accrual for income taxes | 13,227 | 10,369 |
Retained earnings | 253,922 | 231,445 |
Noncontrolling interests | 141,200 | 144,898 |
ASU 2016-02 [Member] | ||
Accounting Standards Updates to be Implemented [Abstract] | ||
Right-of-use leased assets | 6,700 | |
Lease liabilities | 6,700 | |
Adjustments [Member] | ASU 2014-09 [Member] | ||
Contract with Customer, Asset and Liability [Abstract] | ||
Accounts receivable | (1,559) | 600 |
Contract asset | 4,600 | |
Inventories | 6,093 | (3,700) |
Accrual for income taxes | (300) | |
Retained earnings | 1,100 | |
Noncontrolling interests | $ (885) | $ 100 |
Schedule II-Valuation and Qua_2
Schedule II-Valuation and Qualifying Accounts (Details) - Allowance for Doubtful Accounts [Member] - USD ($) $ in Thousands | 12 Months Ended | ||||
Oct. 31, 2019 | Oct. 31, 2018 | Oct. 29, 2017 | |||
Movement in Valuation Allowance and Qualifying Accounts [Roll Forward] | |||||
Balance at Beginning of Year | $ 1,526 | $ 2,319 | $ 3,901 | ||
Charged to costs and expenses | (18) | (809) | (1,600) | [1] | |
Deductions | [2] | (174) | 16 | 18 | |
Balance at End of Year | $ 1,334 | $ 1,526 | $ 2,319 | ||
[1] | Reversal of valuation allowance. | ||||
[2] | Uncollectible accounts written off, net, and impact of foreign currency translation. |