Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jan. 31, 2021 | Feb. 22, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | PHOTRONICS, INC. | |
Entity Central Index Key | 0000810136 | |
Current Fiscal Year End Date | --10-31 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Jan. 31, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Document Transition Report | false | |
Entity File Number | 0-15451 | |
Entity Incorporation, State or Country Code | CT | |
Entity Tax Identification Number | 06-0854886 | |
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 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 63,384,764 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jan. 31, 2021 | Oct. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 278,539 | $ 278,665 |
Accounts receivable, net of allowance for credit losses of $1,348 in 2021 and $1,324 in 2020 | 139,708 | 134,470 |
Inventories | 56,407 | 57,269 |
Other current assets | 31,458 | 29,735 |
Total current assets | 506,112 | 500,139 |
Property, plant and equipment, net | 672,398 | 631,475 |
Intangible assets, net | 2,383 | 3,437 |
Deferred income taxes | 21,549 | 22,070 |
Other assets | 29,620 | 31,061 |
Total assets | 1,232,062 | 1,188,182 |
Current liabilities: | ||
Short-term debt | 0 | 4,708 |
Current portion of long-term debt | 21,641 | 8,970 |
Accounts payable | 70,870 | 75,378 |
Accrued liabilities | 53,020 | 53,883 |
Total current liabilities | 145,531 | 142,939 |
Long-term debt | 79,984 | 54,980 |
Other liabilities | 28,051 | 27,997 |
Total liabilities | 253,566 | 225,916 |
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, 63,506 shares issued and 62,284 outstanding at January 31, 2021, and 63,138 shares issued and outstanding at October 31, 2020 | 635 | 631 |
Additional paid-in capital | 508,974 | 507,336 |
Retained earnings | 287,073 | 279,037 |
Treasury stock, 1,222 shares at January 31, 2021 | (13,209) | 0 |
Accumulated other comprehensive income | 32,029 | 17,958 |
Total Photronics, Inc. shareholders' equity | 815,502 | 804,962 |
Noncontrolling interests | 162,994 | 157,304 |
Total equity | 978,496 | 962,266 |
Total liabilities and equity | $ 1,232,062 | $ 1,188,182 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Jan. 31, 2021 | Oct. 31, 2020 |
Current assets: | ||
Accounts receivable, allowance | $ 1,348 | $ 1,334 |
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) | 63,506 | 63,138 |
Common stock, shares outstanding (in shares) | 62,284 | 63,138 |
Treasury stock, shares (in shares) | 1,222 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Condensed Consolidated Statements of Income [Abstract] | ||
Revenue | $ 152,067 | $ 159,736 |
Cost of goods sold | 121,538 | 125,134 |
Gross profit | 30,529 | 34,602 |
Operating expenses: | ||
Selling, general and administrative | 14,053 | 14,219 |
Research and development | 4,710 | 4,080 |
Total operating expenses | 18,763 | 18,299 |
Operating income | 11,766 | 16,303 |
Other income (expense): | ||
Foreign currency transactions impact, net | 1,382 | 4,736 |
Interest income and other income, net | 121 | 759 |
Interest expense | (823) | (1,798) |
Income before income tax provision | 12,446 | 20,000 |
Income tax provision | 2,937 | 9,072 |
Net income | 9,509 | 10,928 |
Net income attributable to noncontrolling interests | 1,473 | 628 |
Net income attributable to Photronics, Inc. shareholders | $ 8,036 | $ 10,300 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.13 | $ 0.16 |
Diluted (in dollars per share) | $ 0.13 | $ 0.16 |
Weighted-average number of common shares outstanding: | ||
Basic (in shares) | 62,475 | 65,554 |
Diluted (in shares) | 63,005 | 66,449 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Condensed Consolidated Statements of Comprehensive Income [Abstract] | ||
Net income | $ 9,509 | $ 10,928 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments | 18,289 | (1,564) |
Other | (1) | 17 |
Net other comprehensive income (loss) | 18,288 | (1,547) |
Comprehensive income | 27,797 | 9,381 |
Less: comprehensive income attributable to noncontrolling interests | 5,690 | 1,818 |
Comprehensive income attributable to Photronics, Inc. shareholders | $ 22,107 | $ 7,563 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Condensed Consolidated Statements of Comprehensive Income [Abstract] | ||
Other comprehensive income (loss), tax | $ 0 | $ 0 |
Condensed Consolidated Statem_4
Condensed 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. 31, 2019 | $ 656 | $ 524,319 | $ 253,922 | $ 0 | $ (9,005) | $ 141,200 | $ 911,092 |
Balance (in shares) at Oct. 31, 2019 | 65,595 | ||||||
Net income | $ 0 | 0 | 10,300 | 0 | 0 | 628 | 10,928 |
Other comprehensive (loss) income | 0 | 0 | 0 | 0 | (2,737) | 1,190 | (1,547) |
Shares issued under equity plans | $ 5 | 2,605 | 0 | 0 | 0 | 0 | 2,610 |
Shares issued under equity plans (in shares) | 549 | ||||||
Share-based compensation | $ 0 | 1,356 | 0 | 0 | 0 | 0 | 1,356 |
Purchase of treasury stock | $ 0 | 0 | 0 | (11,000) | 0 | 0 | (11,000) |
Purchase of treasury stock (in shares) | 0 | ||||||
Repurchase of common stock of subsidiary | $ 0 | 255 | 0 | 0 | 0 | (893) | (638) |
Balance at Feb. 02, 2020 | $ 661 | 528,535 | 264,222 | (11,000) | (11,742) | 142,125 | 912,801 |
Balance (in shares) at Feb. 02, 2020 | 66,144 | ||||||
Balance at Oct. 31, 2020 | $ 631 | 507,336 | 279,037 | 0 | 17,958 | 157,304 | 962,266 |
Balance (in shares) at Oct. 31, 2020 | 63,138 | ||||||
Net income | $ 0 | 0 | 8,036 | 0 | 0 | 1,473 | 9,509 |
Other comprehensive (loss) income | 0 | 0 | 0 | 0 | 14,071 | 4,217 | 18,288 |
Shares issued under equity plans | $ 4 | 337 | 0 | 0 | 0 | 0 | 341 |
Shares issued under equity plans (in shares) | 368 | ||||||
Share-based compensation | $ 0 | 1,301 | 0 | 0 | 0 | 0 | 1,301 |
Purchase of treasury stock | $ 0 | 0 | 0 | (13,209) | 0 | 0 | (13,209) |
Purchase of treasury stock (in shares) | 0 | ||||||
Balance at Jan. 31, 2021 | $ 635 | $ 508,974 | $ 287,073 | $ (13,209) | $ 32,029 | $ 162,994 | $ 978,496 |
Balance (in shares) at Jan. 31, 2021 | 63,506 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 9,509 | $ 10,928 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 23,724 | 24,626 |
Share-based compensation | 1,301 | 1,356 |
Changes in assets and liabilities: | ||
Accounts receivable | (2,011) | (6,699) |
Inventories | 2,095 | (1,435) |
Other current assets | (824) | 4,724 |
Accounts payable, accrued liabilities, and other | (7,507) | (2,715) |
Net cash provided by operating activities | 26,287 | 30,785 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (17,532) | (13,807) |
Government incentives | 397 | 2,417 |
Other | (61) | (139) |
Net cash used in investing activities | (17,196) | (11,529) |
Cash flows from financing activities: | ||
Proceeds from debt | 6,205 | 1,140 |
Purchase of treasury stock | (13,209) | (11,000) |
Repayments of debt | (7,796) | (389) |
Proceeds from share-based arrangements | 765 | 2,886 |
Other | (315) | (248) |
Net cash used in financing activities | (14,350) | (7,611) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 5,195 | 149 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (64) | 11,794 |
Cash, cash equivalents, and restricted cash at beginning of period | 281,602 | 209,291 |
Cash, cash equivalents, and restricted cash at end of period | 281,538 | 221,085 |
Supplemental disclosure of non-cash information: | ||
Accrual for property, plant and equipment purchased during the period | $ 4,938 | $ 1,511 |
BASIS OF FINANCIAL STATEMENT PR
BASIS OF FINANCIAL STATEMENT PRESENTATION | 3 Months Ended |
Jan. 31, 2021 | |
BASIS OF FINANCIAL STATEMENT PRESENTATION [Abstract] | |
BASIS OF FINANCIAL STATEMENT PRESENTATION | NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION 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” or “displays”), and are used as masters to transfer circuit patterns onto semiconductor wafers and FPD substrates during the fabrication of integrated circuits (“ICs” or “semiconductors”), 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 accompanying unaudited condensed consolidated financial statements (“the financial statements”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of management, adjustments, all of which are of a normal recurring nature, considered necessary for a fair presentation have been included. The financial statements include the accounts of Photronics, its wholly owned subsidiaries, and the majority-owned subsidiaries which it controls. All intercompany balances and transactions have been eliminated in consolidation. 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. Subsequent actual results may differ from such estimates. We review these estimates periodically and reflect any effects of revisions in the period in which they are determined. Reclassified prior period amounts have been made to conform to the current period presentation, including the separation of Foreign currency transaction impact, net Interest income and other income, net Our business is typically impacted during the first, and sometimes the second, quarters of our fiscal year by the North American, European, and Asian holiday periods, as some customers reduce their development and buying activities during those periods. Operating results for the interim period are not necessarily indicative of the results that may be expected for the fiscal year ending October 31, 2021. For further information, refer to the consolidated financial statements, and notes thereto, included in our Annual Report on Form 10-K for the year ended October 31, 2020. |
CASH, CASH EQUIVALENTS AND REST
CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 3 Months Ended |
Jan. 31, 2021 | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH [Abstract] | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH | NOTE 2 - CASH, CASH EQUIVALENTS AND RESTRICTED CASH Cash and cash equivalents include cash and highly liquid investments with an original maturity of three months or less, readily convertible to known amounts of cash, and so near to their maturity that they present insignificant risk of changes in value because of changes in interest rates. The carrying values of cash equivalents approximate their fair values, due to the short-term maturities of these instruments. Restricted cash is included in Other assets The following table presents cash and cash equivalents as reported in our condensed consolidated balance sheets, as well as the sum of cash, cash equivalents and restricted cash as reported on our condensed consolidated statements of cash flows: January 31, 2021 October 31, 2020 Cash and cash equivalents $ 278,539 $ 278,665 Restricted Cash 2,999 2,937 $ 281,538 $ 281,602 |
INVENTORIES
INVENTORIES | 3 Months Ended |
Jan. 31, 2021 | |
INVENTORIES [Abstract] | |
INVENTORIES | NOTE 3 - INVENTORIES Inventories are stated at the lower of cost, determined under the first-in, first-out ("FIFO") method, or net realizable value. January 31, 2021 October 31, 2020 Raw materials $ 55,458 $ 56,389 Work in process 935 767 Finished goods 14 113 $ 56,407 $ 57,269 |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 3 Months Ended |
Jan. 31, 2021 | |
PROPERTY, PLANT AND EQUIPMENT, NET [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | NOTE 4 - PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment consists of the following: January 31, 2021 October 31, 2020 Land $ 12,653 $ 12,422 Buildings and improvements 182,540 179,162 Machinery and equipment 1,845,975 1,812,791 Leasehold improvements 21,587 21,157 Furniture, fixtures and office equipment 16,354 15,665 Construction in progress 113,282 70,915 2,192,391 2,112,112 Accumulated depreciation and amortization (1,519,993 ) (1,480,637 ) $ 672,398 $ 631,475 Depreciation and amortization expense for property, plant and equipment was $22.6 million for the three-month period ended January 31, 2021, and $23.5 million for the three-month period ended February 2, 2020, respectively. Right-of-use assets resulting from finance leases are included in above property, plant and equipment as follows: January 31, 2021 October 31, 2020 Construction in progress $ 35,560 $ - Less accumulated amortization - - $ 35,560 $ - |
PDMCX JOINT VENTURE
PDMCX JOINT VENTURE | 3 Months Ended |
Jan. 31, 2021 | |
PDMCX JOINT VENTURE [Abstract] | |
PDMCX JOINT VENTURE | NOTE 5 - PDMCX JOINT VENTURE In January 2018, Photronics, through its wholly owned Singapore subsidiary (hereinafter, within this Note “we”, “Photronics”, “us” or “our”), and Dai Nippon Printing Co., Ltd., through its wholly owned subsidiary “DNP Asia Pacific PTE, Ltd.” (“DNP”) entered into a joint venture under which DNP obtained a 49.99% interest in our IC business in Xiamen, China. The joint venture, known as “Xiamen American Japan Photronics Mask Co., Ltd.” (“PDMCX”), was established to develop and manufacture photomasks for leading-edge and advanced-generation semiconductors. We entered into this joint venture to enable us to compete more effectively for the merchant photomask business in China, and to benefit from the additional resources and investment that DNP provides to enable us to offer advanced-process technology to our customers. No gain or loss was recorded upon the formation of this joint venture. The total investment per the PDMCX operating agreement (“the Agreement”) is $ million. As of January 31, 2021, Photronics and DNP had each contributed cash of approximately $ million, and of approximately $ million; 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 term of the Agreement and cannot be resolved between the two parties. As of the date of issuance of these financial statements, DNP had not indicated its intention to exercise this right. In addition, both Photronics and DNP have the option to purchase, or put, their interest from, or to, the other party, should their ownership interest fall below twenty percent six three We recorded net losses from the operations of PDMCX of $ million, and General creditors of PDMCX do not have recourse to the assets of $ million. As required by the guidance in Topic 810 - “Consolidation” of the Accounting Standards 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 was 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. Our conclusion was based on the facts 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 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 reporting 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 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 condensed consolidated balance sheets are presented in the following table, together with our exposure to loss related to these assets and liabilities. January 31, 2021 October 31, 2020 Classification Carrying Amount Photronics Interest Carrying Amount Photronics Interest Current assets $ 43,753 $ 21,881 $ 56,095 $ 28,053 Non-current assets 144,069 72,049 141,097 70,562 Total assets 187,822 93,930 197,192 98,615 Current liabilities 29,545 14,776 31,922 15,964 Non-current liabilities 44,620 22,314 55,676 27,844 Total liabilities 74,165 37,090 87,598 43,808 Net assets $ 113,657 $ 56,840 $ 109,594 $ 54,807 |
DEBT
DEBT | 3 Months Ended |
Jan. 31, 2021 | |
DEBT [Abstract] | |
DEBT | NOTE 6 - DEBT Short-term debt was $0.0 million, and $4.7 million as of January 31, 2021 and October 31, 2020, respectively. The weighted-average interest rate on our short-term debt as of October 31, 2020 was 2.02%. The tables below provide information on our long-term debt. As of January 31, 2021 Xiamen Project Loans Xiamen Working Capital Loans Hefei Equipment Loan Finance Lease Total Principal due: Next 12 months $ 6,961 $ 8,861 $ - $ 5,819 $ 21,641 Months 13 – 24 $ 10,055 $ 990 $ 4,641 $ 5,445 $ 21,131 Months 25 – 36 10,055 3,465 1,701 5,509 20,730 Months 37 – 48 10,055 - - 18,787 28,842 Months 49 – 60 9,281 - - - 9,281 Thereafter - - - - - Long-term debt $ 39,446 $ 4,455 $ 6,342 $ 29,741 $ 79,984 Interest rate at balance sheet date 4.90 % 4.53% - 4.61 % 4.20 % 1.14 % Basis spread on interest rates 25.00 67.75 - 76.00 (45.00 ) N/A Interest rate reset Quarterly Monthly/Annually Annually N/A Maturity date December 2025 July 2023 September 2026 December 2024 Periodic payment amount Increases as loans mature Increases as loans mature Varies (1) Varies (3) Periodic payment frequency Semiannual, on individual loans Semiannual, on individual loans Semiannual (2) Monthly Loan collateral (carrying amount) $ 95,703 N/A $ 89,799 $ 35,560 (4) (1) (2) (3) (4) As of October 31, 2020 Xiamen Project Loans Xiamen Working Capital Loans Total Principal due: Next 12 months $ 6,705 $ 2,265 $ 8,970 Months 13 – 24 $ 7,334 $ 7,808 $ 15,142 Months 25 – 36 9,592 3,814 13,406 Months 37 – 48 9,789 - 9,789 Months 49 – 60 9,432 - 9,432 Thereafter 7,211 - 7,211 Long-term debt $ 43,358 $ 11,622 $ 54,980 Interest rate at balance sheet date 4.90 % 4.53% - 4.61 % Basis spread on interest rates 25.00 40.00 - 76.00 Loan collateral (carrying amount) $ 94,459 N/A Xiamen Project Loans In November 2018, PDMCX was approved for credit of 345 million RMB (approximately $53.4 million, at the balance sheet date), 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 RMB, are being used to finance certain capital expenditures for our Xiamen, China facility. PDMCX granted liens on its land use right, building, and certain equipment as collateral for the Project Loans. As of January 31, 2021, PDMCX had outstanding borrowings of 300.0 million RMB ($46.4 million) against this approval. The interest rates on the Project Loans are variable, and based on the RMB Loan Prime Rate of the National Interbank Funding Center. Interest incurred on the loans is eligible for reimbursement through incentives provided by the Xiamen Torch Hi-Tech Industrial Development Zone, which provide for such reimbursements up to a prescribed limit. Xiamen Working Capital Loans In November 2018, PDMCX was approved for revolving, unsecured credit of the equivalent of $25.0 million, pursuant to which PDMCX may enter into separate loan agreements with varying terms to maturity. 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 the equivalent of $25.0 million. As of January 31, 2021, PDMCX had 86.1 million RMB ($13.3 million) outstanding against the approval to pay VAT and outstanding borrowings against the approval to fund operations. The interest rates on the approval to pay VAT are variable, based on the RMB Loan Prime Rate of the National Interbank Funding Center. Interest incurred on the VAT loans are eligible for reimbursement through incentives provided by the Xiamen Torch Hi-Tech Industrial Development Zone, which provide for such reimbursements up to a prescribed limit. Hefei Equipment Loan In October 2020, our Hefei facility was approved to borrow 200 million RMB (approximately $30.9 million, at the balance sheet date) from the China Construction Bank Corporation. Loan proceeds have been, and will be, used to fund the purchases of two lithography tools at our facility in Hefei, China. As of January 31, 2021, we had 41.0 million RMB ($6.3 million) outstanding against this approval. The interest rate on the loan is variable and based on the RMB Loan Prime Rate of the National Interbank Funding Center. The borrowings are secured by the Hefei facility, its related land use right, and certain manufacturing equipment. The Hefei Equipment Loan has covenants and provisions, certain of which relate to the assets pledged as security for the loan, which we were not in compliance with at January 31, 2021. We obtained waivers from the lender for all instances of noncompliance, but are precluded from borrowing additional funds against this facility until our noncompliance with this provision has been cured. In addition, the loan includes covenants for the ratio of total liabilities to total assets and the ratio of current assets to current liabilities. Finance Lease In December 2020, under a Master Lease Agreement which we entered into effective July 2019, we entered into a $35.6 million lease for a high-end lithography tool. Upon entering into the lease, our prior $3.5 million short-term obligation to the lessor became a portion of this lease liability. See Note 8 for additional information on this lease. Corporate 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 covenants around minimum interest coverage ratio, total leverage ratio, and minimum unrestricted cash balance (all of which we were in compliance with at January 31, 2021), and limits the amount of cash dividends, distributions, and redemptions we can pay on our common stock to an aggregate annual amount of $50 million. We had no outstanding borrowings against the Credit Agreement at January 31, 2021, and $50 million was available for borrowing. The interest rate on the Credit Agreement (1.12% at January 31, 2021) is based on our total leverage ratio at LIBOR plus a spread, as defined in the Credit Agreement. |
REVENUE
REVENUE | 3 Months Ended |
Jan. 31, 2021 | |
REVENUE [Abstract] | |
REVENUE | NOTE 7 - REVENUE 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. 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, 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 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 uncompleted revenue contracts on which we have performed; for any such contracts under which 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. We report our revenue net of any sales or similar taxes we collect on behalf of governmental entities. As stated above, photomasks are manufactured to customer specifications in accordance with their proprietary designs; 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 of photomasks that are in process or completed but not yet shipped to customers. 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. Contract assets of $ million are included in Other current assets , and contract liabilities of $ million and $ million are included in Accrued liabilities and Other liabilities , respectively, in our condensed consolidated balance sheet. Our condensed consolidated balance sheet includes contract assets of $ million, included in Other current assets, and contract liabilities of $ million and $ million are included in Accrued liabilities and Other liabilities, respectively. We did t impair any contract assets during the -month periods ended or , and we recognized $ million and $ million, respectively, of revenue from the settlement of contract liabilities that existed at the beginning of those -month periods. We generally record our accounts receivable at their billed amounts. All outstanding past due customer invoices are reviewed for collectibility during, and at the end of, every reporting period. 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 derecognize the related receivable. Credit losses incurred on our accounts receivable during the -month periods ended or , were immaterial. Our invoice terms generally range from net thirty to , depending on both the geographic market in which the transaction occurs and our payment agreements with specific customers. In the event that our evaluation of a customer’s business prospects and financial condition indicate that the customer presents a collectibility risk, we modify terms of sale, which may require payment in advance of performance. At the time of adoption, we elected the practical expedient allowed under ASC Topic “Revenue from Contracts with Customers” (“Topic ”) that permits us not to adjust a contract’s promised amount of consideration to reflect a financing component when the period between when we transfer control of goods or services to customers and when we are paid is year or less. 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 , 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 year. Historically, advance payments we’ve received from customers have generally not preceded the completion of our performance obligations by more than year. Disaggregation of Revenue The following tables present our revenue for the -month periods ended and , disaggregated by product type, geographic origin, and timing of recognition. Three Months Ended Revenue by Product Type January 31, 2021 February 2, 2020 IC High-end $ 36,780 $ 41,041 Mainstream 68,176 65,937 Total IC $ 104,956 $ 106,978 FPD High-end $ 34,645 $ 39,770 Mainstream 12,466 12,988 Total FPD $ 47,111 $ 52,758 $ 152,067 $ 159,736 Three Months Ended Revenue by Geographic Origin January 31, 2021 February 2, 2020 Taiwan $ 56,590 $ 66,114 Korea 38,783 40,736 United States 26,604 25,067 China 20,997 19,900 Europe 8,575 7,543 All other Asia 518 376 $ 152,067 $ 159,736 Three Months Ended Revenue by Timing of Recognition January 31, 2021 February 2, 2020 Over time $ 141,284 $ 137,696 At a point in time 10,783 22,040 $ 152,067 $ 159,736 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 weeks two three weeks Product Warranties Our photomasks are sold under warranties that generally range from one to twenty-four months . We warrant that our photomasks conform to customer specifications, and will typically repair, replace, or issue a refund for (at our option) any photomasks that fail to do so. The warranties do not represent separate performance obligations in our revenue contracts. Historically, customer claims under warranties have been immaterial. |
LEASES
LEASES | 3 Months Ended |
Jan. 31, 2021 | |
LEASES [Abstract] | |
LEASES | NOTE 8 - LEASES Our involvement in lease arrangements has typically been as a lessee. We determine if an agreement is or contains a lease on the date of the lease agreement or commitment, if earlier. Our evaluation considers whether the arrangement includes an identified asset and whether it affords us the right to control the asset. Our having the right to control the identified asset is determined by whether we are entitled to substantially all of its economic benefits and can direct its use. We recognize leases on our consolidated balance sheet when a lessor makes an asset underlying a lease having a term in excess of twelve months available for our use. The present value of lease payments over the term of the lease, which is determined using our incremental borrowing rate for collateralized loans at the commencement date of the lease, provides the basis for the initial measurement of right-of-use assets and their related lease liabilities. Variable lease payments, other than those that are dependent on an index or on a rate, are not included in the measurement of right-of-use (ROU) assets and their related lease liabilities. Lease terms will include extension periods if the lease agreement includes an option to extend the lease that we are reasonably certain to exercise. As allowed under ASC Topic 842 – “Leases” we have elected, for all classes of assets, the practical expedient to not separate lease components of a contract from nonlease components of a contract. In December 2020, we entered into a $ million finance lease for a high-end lithography tool. Monthly payments on the lease, which commenced in January 2021, increase from $ million after the first three months to $ million for the following nine months, followed by forty-eight monthly payments of $ million. lease term, . In February 2021 , we entered into a $ million finance lease for a high-end inspection tool. Monthly payments on the lease, which commenced in February 2021 , are $ million per month. . The following table provides information on operating and finance leases included in our consolidated balance sheets. Classification January 31, 2021 October 31 , 2020 ROU Assets – Operating Leases Other assets $ 7,517 $ 7,706 ROU Assets – Finance Leases Property, plant and equipment $ 35,560 $ - Lease Liabilities – Operating Leases Accrued liabilities $ 2,282 $ 2,175 Other liabilities 4,792 5,008 $ 7,074 $ 7,183 Lease Liabilities – Finance Leases Current portion of long-term debt $ 5,819 $ - Long-term debt 29,741 - $ 35,560 $ - The following table presents future lease payments under noncancelable operating and finance leases as of . Imputed interest represents the difference between undiscounted cash flows and discounted cash flows Operating Leases Finance Lease Remainder of fiscal year 2021 $ 1,814 $ 4,506 2022 2,306 6,054 2023 1,311 5,760 2024 783 5,760 2025 639 14,661 Thereafter 550 - Total lease payments 7,403 36,741 Imputed interest 329 1,181 Lease liabilities $ 7,074 $ 35,560 The following table presents lease costs for the three -month periods ended and Three Months Ended January 31, 2021 February 2, 2020 Operating lease costs $ 664 $ 1,178 Short-term lease costs $ 46 $ 122 Variable lease costs $ 144 $ - Interest on lease liabilities $ 35 $ - Amortization of ROU assets $ - $ - Presented below is other information related to our operating and finance leases. Three Months Ended Supplemental cash flows information: January 31, 2021 February 2, 2020 Operating cash flows used for operating leases $ 603 $ 1,885 Operating cash flows used for finance leases $ 35 $ - Financing cash flows used for finance leases $ - $ - ROU assets obtained in exchange for operating lease obligations $ 267 $ 282 ROU assets obtained in exchange for finance lease obligations $ 35,560 $ - As of January 31, 2021 October 31 , Classification Weighted-average remaining lease term (in years) Weighted-average discount rate Weighted-average remaining lease term (in years) Weighted-average discount rate Operating leases 3.9 2.37 % 4.1 2.37 % Finance lease 3.9 1.14 % - - |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Jan. 31, 2021 | |
SHARE-BASED COMPENSATION [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 9 - SHARE-BASED COMPENSATION In , 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), or a combination thereof. The maximum number of shares of common stock approved that may be issued under the Plan is 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. Total share-based compensation costs for the -month periods ended and , were $ and $ , respectively. share-based compensation cost was capitalized as part of an asset during the periods presented, and related income tax benefits were t material during those periods Restricted Stock We periodically grant restricted stock awards, the restrictions on which typically lapse over a service period of one Stock Options Option awards generally vest in one to , and have a contractual term. All incentive and non-qualified stock option grants must have an exercise price 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 are expected to remain outstanding. The risk-free rate of return for the estimated term of the option is based on the U.S. Treasury yield curve in effect at the date of grant There were no share options granted during the three -month period ended January 31, 2021 , or the three -month period ended February 2, 2020 . The Company received cash from option exercises of $ 0.7 million and $ 2.8 million for the three -month periods ended January 31, 2021 and February 2, 2020 , respectively. As of January 31, 2021 , the total unrecognized compensation cost related to unvested option awards was approximately $ 0.3 million . That cost is expected to be recognized over a weighted-average amortization period of 1.6 years . Information on outstanding and exercisable option awards as of January 31, 2021 is presented below. Options Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at January 31, 2021 1,524,777 $ 9.39 4.6 years $ 2,954 Exercisable at January 31, 2021 1,412,200 $ 9.40 4.3 years $ 2,747 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Jan. 31, 2021 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | NOTE 10 - INCOME TAXES We calculate our provision for income taxes at the end of each interim reporting period on the basis of an estimated annual effective tax rate adjusted for tax items that are discrete to each period. The effective tax rate of in the three-month period ended January 31, 2021 differs from the U.S. statutory rate of primarily due to the non-recognition of the tax benefit of losses that, in certain jurisdictions, have been offset by valuation allowances and non-U.S. pre-tax income being taxed at higher statutory rates in the non-U.S. jurisdictions that were partially offset by the benefits of investment credits in a foreign jurisdiction The effective tax rate of differs from the U.S. statutory rate of in the three-month period ended February 2, 2020, primarily due to the non-recognition of the tax benefit of losses that, in certain jurisdictions, have been offset by valuation allowances, and the establishment of a valuation allowance for a loss carryforward in a non-U.S. jurisdiction, which were partially offset by the benefit of a tax holiday and investment credits in certain foreign jurisdictions Valuation allowances, in jurisdictions with historic losses, eliminate the current tax benefit of losses in these jurisdictions where, based on the weight of information available to us, we determined that it is more likely than not that the tax benefits will not be realized. In the three-month period ended February 2, 2020, as a result of the reassessment of the aforementioned available information, we established a valuation allowance of against a non-U.S. based loss-carryforward deferred tax asset that is not more likely than not to be realized. Unrecognized tax benefits related to uncertain tax positions were $ million and $ million at January 31, 2021 and October 31, 2020, respectively, of which $ million and $ million, if recognized, would favorably impact the Company’s effective tax rate. Accrued interest and penalties related to unrecognized tax benefits was $ million at January 31, 2021 and October 31, 2020. 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 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. and major foreign or state jurisdictions for years prior to fiscal year 2015 We were granted a tax holiday in Taiwan that expired on . This tax holiday reduced foreign taxes by in the three-month period ended February 2, 2020; per share impact was immaterial . |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Jan. 31, 2021 | |
EARNINGS PER SHARE [Abstract] | |
EARNINGS PER SHARE | NOTE 11 - EARNINGS PER SHARE The calculation of basic and diluted earnings per share is presented below. Three Months Ended January 31, 2021 February 2, 2020 Net income attributable to Photronics, Inc. shareholders $ 8,036 $ 10,300 Effect of dilutive securities - - Earnings used for diluted earnings per share $ 8,036 $ 10,300 Weighted-average common shares computations: Weighted-average common shares used for basic earnings per share 62,475 65,554 Effect of dilutive securities: Share-based payment awards 530 895 Potentially dilutive common shares 530 895 Weighted-average common shares used for diluted earnings per share 63,005 66,449 Basic earnings per share $ 0.13 $ 0.16 Diluted earnings per share $ 0.13 $ 0.16 The table below illustrates 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 Three Months Ended January 31, 2021 February 2, 2020 Share-based payment awards 826 173 Total potentially dilutive shares excluded 826 173 |
CHANGES IN ACCUMULATED OTHER CO
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT | 3 Months Ended |
Jan. 31, 2021 | |
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT [Abstract] | |
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT | NOTE 12 - 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 three-month periods ended January 31, 2021 and February 2, 2020. Three Months Ended January 31, 2021 Foreign Currency Translation Adjustments Other Total Balance at October 31, 2020 $ 18,828 $ (870 ) $ 17,958 Other comprehensive (loss) income 18,289 (1 ) 18,288 Less: other comprehensive income attributable to noncontrolling interests 4,217 - 4,217 Balance at January 31, 2021 $ 32,900 $ (871 ) $ 32,029 Three Months Ended February 2, 2020 Foreign Currency Translation Adjustments Other Total Balance at October 31, 2019 $ (8,331 ) $ (674 ) $ (9,005 ) Other comprehensive (loss) income (1,564 ) 17 (1,547 ) Less: other comprehensive income attributable to noncontrolling interests 1,181 9 1,190 Balance at February 2, 2020 $ (11,076 ) $ (666 ) $ (11,742 ) |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Jan. 31, 2021 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 13 - 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 approximate their carrying values due to the variable nature of the underlying interest rates. We did not have any assets or liabilities measured at fair value, on a recurring or a nonrecurring basis, at January 31, 2021 or October 31, 2020. |
SHARE REPURCHASE PROGRAMS
SHARE REPURCHASE PROGRAMS | 3 Months Ended |
Jan. 31, 2021 | |
SHARE REPURCHASE PROGRAMS [Abstract] | |
SHARE REPURCHASE PROGRAMS | NOTE 14 - SHARE REPURCHASE PROGRAMS In September 2020 Three Months Ended January 31, 2021 From Inception Date of September 16, 2020 Number of shares repurchased 1,222 2,952 Cost of shares repurchased $ 13,209 $ 30,709 Average price paid per share $ 10.81 $ 10.40 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. This repurchase program was terminated in March of 2020. All of the shares repurchased under this program have been retired. The table below presents information on this repurchase program. Three Months Ended February 2, 2020 From Inception Date of September 25, 2019 Number of shares repurchased 916 1,911 Cost of shares repurchased $ 11,000 $ 22,000 Average price paid per share $ 12.01 $ 11.51 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Jan. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 15 - COMMITMENTS AND CONTINGENCIES As of January 31, 2021, the Company had commitments outstanding for capital expenditures of approximately $68.9 million , primarily for purchases of high-end equipment. The Company’s wholly owned subsidiary in South Korea has been involved in litigation regarding a 2016 informational tax filing for its non-South Korean bank accounts that was not timely made under a then recently issued presidential decree. A fine (based solely on the amount in such accounts) in the amount of $2.2 million was assessed against our subsidiary. Our subsidiary appealed the fine on the grounds that it was not required to make the tax filing, and such appeal was pursued up to the Supreme Court in South Korea. Under South Korean law, the tax authorities were entitled to pursue the matter in both civil and criminal courts simultaneously, with the proviso that any criminal fine imposed would act to dismiss any civil fine. The prosecutor recommended a fine of $0.03 million. The civil matter has subsequently been dismissed. Photronics was notified on March 12, 2020, that the Supreme Court rendered a decision against our subsidiary on the issue of whether our subsidiary was required to make the tax filing and remanded the case to the appellate court for determination of the fine. We are awaiting a trial date from the appellate court. Prior to the Supreme Court decision, our assessment was that the possibility of a fine was deemed remote, based on advice of local counsel and the subsequent judgments in the lower courts having been in our favor. Our estimate of the possible range of loss is $0.03 million to $2.2 million with the most likely amount being $0.03 million (based on the prosecutor’s recommendation). Accordingly, during the three-month period ended May 3, 2020, we accrued a contingent loss of $0.03 million. It is reasonably possible that the estimated loss will change in the near term. Our maximum exposure to loss in excess of amounts accrued is $2.17 million. The imposition of the fine will not have a material impact on our financial position or financial performance. We are subject to various other claims that arise in the ordinary course of business. We believe that our potential liability under such claims, individually or in the aggregate, will not have a material effect on the consolidated financial statements. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Jan. 31, 2021 | |
RECENT ACCOUNTING PRONOUNCEMENTS [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 16 - RECENT ACCOUNTING PRONOUNCEMENTS Accounting Standards Updates Adopted In June 2016, the 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 impairment methodology, found in current GAAP, with a methodology that reflects expected credit losses and 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 was effective for Photronics in its first quarter of fiscal year 2021. We adopted ASU 2016-13 on November 1, 2020; the effect of the adoption was immaterial. Accounting Standards Updates to be Adopted In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”, which provides optional expedients and exceptions to applying the guidance on contract modifications, hedge accounting, and other transactions, to simplify the accounting for transitioning from the London Interbank Offered Rate, and other interbank offered rates expected to be discontinued, to alternative reference rates. The guidance in this Update was effective upon its issuance; if elected, it is to be applied prospectively through December 31, 2022. We are currently evaluating the effect the potential adoption of this ASU will have on our consolidated financial statements. |
BASIS OF FINANCIAL STATEMENT _2
BASIS OF FINANCIAL STATEMENT PRESENTATION (Policies) | 3 Months Ended |
Jan. 31, 2021 | |
BASIS OF FINANCIAL STATEMENT PRESENTATION [Abstract] | |
Consolidation | The accompanying unaudited condensed consolidated financial statements (“the financial statements”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of management, adjustments, all of which are of a normal recurring nature, considered necessary for a fair presentation have been included. The financial statements include the accounts of Photronics, 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. Subsequent actual results may differ from such estimates. We review these estimates periodically and reflect any effects of revisions in the period in which they are determined. |
Reclassifications | Reclassified prior period amounts have been made to conform to the current period presentation, including the separation of Foreign currency transaction impact, net Interest income and other income, net |
CASH, CASH EQUIVALENTS AND RE_2
CASH, CASH EQUIVALENTS AND RESTRICTED CASH (Policies) | 3 Months Ended |
Jan. 31, 2021 | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH [Abstract] | |
Cash and Cash Equivalents | Cash and cash equivalents include cash and highly liquid investments with an original maturity of three months or less, readily convertible to known amounts of cash, and so near to their maturity that they present insignificant risk of changes in value because of changes in interest rates. The carrying values of cash equivalents approximate their fair values, due to the short-term maturities of these instruments. |
INVENTORIES (Policies)
INVENTORIES (Policies) | 3 Months Ended |
Jan. 31, 2021 | |
INVENTORIES [Abstract] | |
Inventories | Inventories are stated at the lower of cost, determined under the first-in, first-out ("FIFO") method, or net realizable value. |
PDMCX JOINT VENTURE (Policies)
PDMCX JOINT VENTURE (Policies) | 3 Months Ended |
Jan. 31, 2021 | |
PDMCX JOINT VENTURE [Abstract] | |
Variable Interest Entities | As required by the guidance in Topic 810 - “Consolidation” of the Accounting Standards 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 was 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. Our conclusion was based on the facts 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 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 reporting 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 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) | 3 Months Ended |
Jan. 31, 2021 | |
REVENUE [Abstract] | |
Revenue | 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. 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, 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 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 uncompleted revenue contracts on which we have performed; for any such contracts under which 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. We report our revenue net of any sales or similar taxes we collect on behalf of governmental entities. As stated above, photomasks are manufactured to customer specifications in accordance with their proprietary designs; 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 of photomasks that are in process or completed but not yet shipped to customers. 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. Contract assets of $ million are included in Other current assets , and contract liabilities of $ million and $ million are included in Accrued liabilities and Other liabilities , respectively, in our condensed consolidated balance sheet. Our condensed consolidated balance sheet includes contract assets of $ million, included in Other current assets, and contract liabilities of $ million and $ million are included in Accrued liabilities and Other liabilities, respectively. We did t impair any contract assets during the -month periods ended or , and we recognized $ million and $ million, respectively, of revenue from the settlement of contract liabilities that existed at the beginning of those -month periods. We generally record our accounts receivable at their billed amounts. All outstanding past due customer invoices are reviewed for collectibility during, and at the end of, every reporting period. 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 derecognize the related receivable. Credit losses incurred on our accounts receivable during the -month periods ended or , were immaterial. Our invoice terms generally range from net thirty to , depending on both the geographic market in which the transaction occurs and our payment agreements with specific customers. In the event that our evaluation of a customer’s business prospects and financial condition indicate that the customer presents a collectibility risk, we modify terms of sale, which may require payment in advance of performance. At the time of adoption, we elected the practical expedient allowed under ASC Topic “Revenue from Contracts with Customers” (“Topic ”) that permits us not to adjust a contract’s promised amount of consideration to reflect a financing component when the period between when we transfer control of goods or services to customers and when we are paid is year or less. 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 , 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 year. Historically, advance payments we’ve received from customers have generally not preceded the completion of our performance obligations by more than 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 weeks two three weeks Product Warranties Our photomasks are sold under warranties that generally range from one to twenty-four months . We warrant that our photomasks conform to customer specifications, and will typically repair, replace, or issue a refund for (at our option) any photomasks that fail to do so. The warranties do not represent separate performance obligations in our revenue contracts. Historically, customer claims under warranties have been immaterial. |
LEASES (Policies)
LEASES (Policies) | 3 Months Ended |
Jan. 31, 2021 | |
LEASES [Abstract] | |
Leases | Our involvement in lease arrangements has typically been as a lessee. We determine if an agreement is or contains a lease on the date of the lease agreement or commitment, if earlier. Our evaluation considers whether the arrangement includes an identified asset and whether it affords us the right to control the asset. Our having the right to control the identified asset is determined by whether we are entitled to substantially all of its economic benefits and can direct its use. We recognize leases on our consolidated balance sheet when a lessor makes an asset underlying a lease having a term in excess of twelve months available for our use. The present value of lease payments over the term of the lease, which is determined using our incremental borrowing rate for collateralized loans at the commencement date of the lease, provides the basis for the initial measurement of right-of-use assets and their related lease liabilities. Variable lease payments, other than those that are dependent on an index or on a rate, are not included in the measurement of right-of-use (ROU) assets and their related lease liabilities. Lease terms will include extension periods if the lease agreement includes an option to extend the lease that we are reasonably certain to exercise. As allowed under ASC Topic 842 – “Leases” we have elected, for all classes of assets, the practical expedient to not separate lease components of a contract from nonlease components of a contract. |
SHARE-BASED COMPENSATION (Polic
SHARE-BASED COMPENSATION (Policies) | 3 Months Ended |
Jan. 31, 2021 | |
Employee Stock Option [Member] | |
Stock Options [Abstract] | |
Share-Based Compensation | Stock Options Option awards generally vest in one to , and have a contractual term. All incentive and non-qualified stock option grants must have an exercise price 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 are expected to remain outstanding. The risk-free rate of return for the estimated term of the option is based on the U.S. Treasury yield curve in effect at the date of grant |
Restricted Stock [Member] | |
Stock Options [Abstract] | |
Share-Based Compensation | Restricted Stock We periodically grant restricted stock awards, the restrictions on which typically lapse over a service period of one |
INCOME TAXES (Policies)
INCOME TAXES (Policies) | 3 Months Ended |
Jan. 31, 2021 | |
INCOME TAXES [Abstract] | |
Income Taxes | We calculate our provision for income taxes at the end of each interim reporting period on the basis of an estimated annual effective tax rate adjusted for tax items that are discrete to each period. Unrecognized tax benefits related to uncertain tax positions were $ million and $ million at January 31, 2021 and October 31, 2020, respectively, of which $ million and $ million, if recognized, would favorably impact the Company’s effective tax rate. Accrued interest and penalties related to unrecognized tax benefits was $ million at January 31, 2021 and October 31, 2020. 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 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. and major foreign or state jurisdictions for years prior to fiscal year 2015 |
FAIR VALUE MEASUREMENTS (Polici
FAIR VALUE MEASUREMENTS (Policies) | 3 Months Ended |
Jan. 31, 2021 | |
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) | 3 Months Ended |
Jan. 31, 2021 | |
RECENT ACCOUNTING PRONOUNCEMENTS [Abstract] | |
Recent Accounting Pronouncements | Accounting Standards Updates Adopted In June 2016, the 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 impairment methodology, found in current GAAP, with a methodology that reflects expected credit losses and 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 was effective for Photronics in its first quarter of fiscal year 2021. We adopted ASU 2016-13 on November 1, 2020; the effect of the adoption was immaterial. Accounting Standards Updates to be Adopted In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”, which provides optional expedients and exceptions to applying the guidance on contract modifications, hedge accounting, and other transactions, to simplify the accounting for transitioning from the London Interbank Offered Rate, and other interbank offered rates expected to be discontinued, to alternative reference rates. The guidance in this Update was effective upon its issuance; if elected, it is to be applied prospectively through December 31, 2022. We are currently evaluating the effect the potential adoption of this ASU will have on our consolidated financial statements. |
CASH, CASH EQUIVALENTS AND RE_3
CASH, CASH EQUIVALENTS AND RESTRICTED CASH (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH [Abstract] | |
Cash, Cash Equivalents and Restricted Cash | The following table presents cash and cash equivalents as reported in our condensed consolidated balance sheets, as well as the sum of cash, cash equivalents and restricted cash as reported on our condensed consolidated statements of cash flows: January 31, 2021 October 31, 2020 Cash and cash equivalents $ 278,539 $ 278,665 Restricted Cash 2,999 2,937 $ 281,538 $ 281,602 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
INVENTORIES [Abstract] | |
Inventories | Inventories are stated at the lower of cost, determined under the first-in, first-out ("FIFO") method, or net realizable value. January 31, 2021 October 31, 2020 Raw materials $ 55,458 $ 56,389 Work in process 935 767 Finished goods 14 113 $ 56,407 $ 57,269 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
PROPERTY, PLANT AND EQUIPMENT, NET [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment consists of the following: January 31, 2021 October 31, 2020 Land $ 12,653 $ 12,422 Buildings and improvements 182,540 179,162 Machinery and equipment 1,845,975 1,812,791 Leasehold improvements 21,587 21,157 Furniture, fixtures and office equipment 16,354 15,665 Construction in progress 113,282 70,915 2,192,391 2,112,112 Accumulated depreciation and amortization (1,519,993 ) (1,480,637 ) $ 672,398 $ 631,475 |
Finance Lease, Right-of-use Assets | Right-of-use assets resulting from finance leases are included in above property, plant and equipment as follows: January 31, 2021 October 31, 2020 Construction in progress $ 35,560 $ - Less accumulated amortization - - $ 35,560 $ - |
PDMCX JOINT VENTURE (Tables)
PDMCX JOINT VENTURE (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
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 condensed consolidated balance sheets are presented in the following table, together with our exposure to loss related to these assets and liabilities. January 31, 2021 October 31, 2020 Classification Carrying Amount Photronics Interest Carrying Amount Photronics Interest Current assets $ 43,753 $ 21,881 $ 56,095 $ 28,053 Non-current assets 144,069 72,049 141,097 70,562 Total assets 187,822 93,930 197,192 98,615 Current liabilities 29,545 14,776 31,922 15,964 Non-current liabilities 44,620 22,314 55,676 27,844 Total liabilities 74,165 37,090 87,598 43,808 Net assets $ 113,657 $ 56,840 $ 109,594 $ 54,807 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
DEBT [Abstract] | |
Long-term Debt | The tables below provide information on our long-term debt. As of January 31, 2021 Xiamen Project Loans Xiamen Working Capital Loans Hefei Equipment Loan Finance Lease Total Principal due: Next 12 months $ 6,961 $ 8,861 $ - $ 5,819 $ 21,641 Months 13 – 24 $ 10,055 $ 990 $ 4,641 $ 5,445 $ 21,131 Months 25 – 36 10,055 3,465 1,701 5,509 20,730 Months 37 – 48 10,055 - - 18,787 28,842 Months 49 – 60 9,281 - - - 9,281 Thereafter - - - - - Long-term debt $ 39,446 $ 4,455 $ 6,342 $ 29,741 $ 79,984 Interest rate at balance sheet date 4.90 % 4.53% - 4.61 % 4.20 % 1.14 % Basis spread on interest rates 25.00 67.75 - 76.00 (45.00 ) N/A Interest rate reset Quarterly Monthly/Annually Annually N/A Maturity date December 2025 July 2023 September 2026 December 2024 Periodic payment amount Increases as loans mature Increases as loans mature Varies (1) Varies (3) Periodic payment frequency Semiannual, on individual loans Semiannual, on individual loans Semiannual (2) Monthly Loan collateral (carrying amount) $ 95,703 N/A $ 89,799 $ 35,560 (4) (1) (2) (3) (4) As of October 31, 2020 Xiamen Project Loans Xiamen Working Capital Loans Total Principal due: Next 12 months $ 6,705 $ 2,265 $ 8,970 Months 13 – 24 $ 7,334 $ 7,808 $ 15,142 Months 25 – 36 9,592 3,814 13,406 Months 37 – 48 9,789 - 9,789 Months 49 – 60 9,432 - 9,432 Thereafter 7,211 - 7,211 Long-term debt $ 43,358 $ 11,622 $ 54,980 Interest rate at balance sheet date 4.90 % 4.53% - 4.61 % Basis spread on interest rates 25.00 40.00 - 76.00 Loan collateral (carrying amount) $ 94,459 N/A |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
REVENUE [Abstract] | |
Disaggregation of Revenue | The following tables present our revenue for the -month periods ended and , disaggregated by product type, geographic origin, and timing of recognition. Three Months Ended Revenue by Product Type January 31, 2021 February 2, 2020 IC High-end $ 36,780 $ 41,041 Mainstream 68,176 65,937 Total IC $ 104,956 $ 106,978 FPD High-end $ 34,645 $ 39,770 Mainstream 12,466 12,988 Total FPD $ 47,111 $ 52,758 $ 152,067 $ 159,736 Three Months Ended Revenue by Geographic Origin January 31, 2021 February 2, 2020 Taiwan $ 56,590 $ 66,114 Korea 38,783 40,736 United States 26,604 25,067 China 20,997 19,900 Europe 8,575 7,543 All other Asia 518 376 $ 152,067 $ 159,736 Three Months Ended Revenue by Timing of Recognition January 31, 2021 February 2, 2020 Over time $ 141,284 $ 137,696 At a point in time 10,783 22,040 $ 152,067 $ 159,736 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
LEASES [Abstract] | |
Information on Operating and Finance Leases Included in Consolidated Balance Sheets | The following table provides information on operating and finance leases included in our consolidated balance sheets. Classification January 31, 2021 October 31 , 2020 ROU Assets – Operating Leases Other assets $ 7,517 $ 7,706 ROU Assets – Finance Leases Property, plant and equipment $ 35,560 $ - Lease Liabilities – Operating Leases Accrued liabilities $ 2,282 $ 2,175 Other liabilities 4,792 5,008 $ 7,074 $ 7,183 Lease Liabilities – Finance Leases Current portion of long-term debt $ 5,819 $ - Long-term debt 29,741 - $ 35,560 $ - |
Future Lease Payments under Noncancelable Operating and Finance Leases | The following table presents future lease payments under noncancelable operating and finance leases as of . Imputed interest represents the difference between undiscounted cash flows and discounted cash flows Operating Leases Finance Lease Remainder of fiscal year 2021 $ 1,814 $ 4,506 2022 2,306 6,054 2023 1,311 5,760 2024 783 5,760 2025 639 14,661 Thereafter 550 - Total lease payments 7,403 36,741 Imputed interest 329 1,181 Lease liabilities $ 7,074 $ 35,560 |
Lease Costs | The following table presents lease costs for the three -month periods ended and Three Months Ended January 31, 2021 February 2, 2020 Operating lease costs $ 664 $ 1,178 Short-term lease costs $ 46 $ 122 Variable lease costs $ 144 $ - Interest on lease liabilities $ 35 $ - Amortization of ROU assets $ - $ - |
Supplemental Information Related to Leases | Presented below is other information related to our operating and finance leases. Three Months Ended Supplemental cash flows information: January 31, 2021 February 2, 2020 Operating cash flows used for operating leases $ 603 $ 1,885 Operating cash flows used for finance leases $ 35 $ - Financing cash flows used for finance leases $ - $ - ROU assets obtained in exchange for operating lease obligations $ 267 $ 282 ROU assets obtained in exchange for finance lease obligations $ 35,560 $ - |
Weighted-Average Lease Terms and Weighted-Average Discount Rates | As of January 31, 2021 October 31 , Classification Weighted-average remaining lease term (in years) Weighted-average discount rate Weighted-average remaining lease term (in years) Weighted-average discount rate Operating leases 3.9 2.37 % 4.1 2.37 % Finance lease 3.9 1.14 % - - |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
SHARE-BASED COMPENSATION [Abstract] | |
Information on Outstanding and Exercisable Option | Information on outstanding and exercisable option awards as of January 31, 2021 is presented below. Options Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at January 31, 2021 1,524,777 $ 9.39 4.6 years $ 2,954 Exercisable at January 31, 2021 1,412,200 $ 9.40 4.3 years $ 2,747 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
EARNINGS PER SHARE [Abstract] | |
Calculation of Basic and Diluted Earnings Per Share | The calculation of basic and diluted earnings per share is presented below. Three Months Ended January 31, 2021 February 2, 2020 Net income attributable to Photronics, Inc. shareholders $ 8,036 $ 10,300 Effect of dilutive securities - - Earnings used for diluted earnings per share $ 8,036 $ 10,300 Weighted-average common shares computations: Weighted-average common shares used for basic earnings per share 62,475 65,554 Effect of dilutive securities: Share-based payment awards 530 895 Potentially dilutive common shares 530 895 Weighted-average common shares used for diluted earnings per share 63,005 66,449 Basic earnings per share $ 0.13 $ 0.16 Diluted earnings per share $ 0.13 $ 0.16 |
Outstanding Securities Excluded from Calculation of Diluted Earnings or Loss Per Share | The table below illustrates 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 Three Months Ended January 31, 2021 February 2, 2020 Share-based payment awards 826 173 Total potentially dilutive shares excluded 826 173 |
CHANGES IN ACCUMULATED OTHER _2
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
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 three-month periods ended January 31, 2021 and February 2, 2020. Three Months Ended January 31, 2021 Foreign Currency Translation Adjustments Other Total Balance at October 31, 2020 $ 18,828 $ (870 ) $ 17,958 Other comprehensive (loss) income 18,289 (1 ) 18,288 Less: other comprehensive income attributable to noncontrolling interests 4,217 - 4,217 Balance at January 31, 2021 $ 32,900 $ (871 ) $ 32,029 Three Months Ended February 2, 2020 Foreign Currency Translation Adjustments Other Total Balance at October 31, 2019 $ (8,331 ) $ (674 ) $ (9,005 ) Other comprehensive (loss) income (1,564 ) 17 (1,547 ) Less: other comprehensive income attributable to noncontrolling interests 1,181 9 1,190 Balance at February 2, 2020 $ (11,076 ) $ (666 ) $ (11,742 ) |
SHARE REPURCHASE PROGRAMS (Tabl
SHARE REPURCHASE PROGRAMS (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
SHARE REPURCHASE PROGRAMS [Abstract] | |
Shares Repurchase Programs | In September 2020 Three Months Ended January 31, 2021 From Inception Date of September 16, 2020 Number of shares repurchased 1,222 2,952 Cost of shares repurchased $ 13,209 $ 30,709 Average price paid per share $ 10.81 $ 10.40 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. This repurchase program was terminated in March of 2020. All of the shares repurchased under this program have been retired. The table below presents information on this repurchase program. Three Months Ended February 2, 2020 From Inception Date of September 25, 2019 Number of shares repurchased 916 1,911 Cost of shares repurchased $ 11,000 $ 22,000 Average price paid per share $ 12.01 $ 11.51 |
BASIS OF FINANCIAL STATEMENT _3
BASIS OF FINANCIAL STATEMENT PRESENTATION (Details) | 3 Months Ended |
Jan. 31, 2021Facility | |
Manufacturing Facilities [Abstract] | |
Number of manufacturing facilities | 11 |
Taiwan [Member] | |
Manufacturing Facilities [Abstract] | |
Number of manufacturing facilities | 3 |
Korea [Member] | |
Manufacturing Facilities [Abstract] | |
Number of manufacturing facilities | 1 |
United States [Member] | |
Manufacturing Facilities [Abstract] | |
Number of manufacturing facilities | 3 |
Europe [Member] | |
Manufacturing Facilities [Abstract] | |
Number of manufacturing facilities | 2 |
China [Member] | |
Manufacturing Facilities [Abstract] | |
Number of manufacturing facilities | 2 |
CASH, CASH EQUIVALENTS AND RE_4
CASH, CASH EQUIVALENTS AND RESTRICTED CASH (Details) - USD ($) $ in Thousands | Jan. 31, 2021 | Oct. 31, 2020 | Feb. 02, 2020 | Oct. 31, 2019 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH [Abstract] | ||||
Cash and cash equivalents | $ 278,539 | $ 278,665 | ||
Restricted Cash | 2,999 | 2,937 | ||
Total cash, cash equivalents and restricted cash | $ 281,538 | $ 281,602 | $ 221,085 | $ 209,291 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jan. 31, 2021 | Oct. 31, 2020 |
INVENTORIES [Abstract] | ||
Raw materials | $ 55,458 | $ 56,389 |
Work in process | 935 | 767 |
Finished goods | 14 | 113 |
Inventory | $ 56,407 | $ 57,269 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 31, 2021 | Feb. 02, 2020 | Oct. 31, 2020 | |
Property, plant and equipment [Abstract] | |||
Property, plant and equipment, gross | $ 2,192,391 | $ 2,112,112 | |
Accumulated depreciation and amortization | (1,519,993) | (1,480,637) | |
Property, plant and equipment, net | 672,398 | 631,475 | |
Depreciation and amortization expense | 22,600 | $ 23,500 | |
Land [Member] | |||
Property, plant and equipment [Abstract] | |||
Property, plant and equipment, gross | 12,653 | 12,422 | |
Buildings and Improvements [Member] | |||
Property, plant and equipment [Abstract] | |||
Property, plant and equipment, gross | 182,540 | 179,162 | |
Machinery and Equipment [Member] | |||
Property, plant and equipment [Abstract] | |||
Property, plant and equipment, gross | 1,845,975 | 1,812,791 | |
Leasehold Improvements [Member] | |||
Property, plant and equipment [Abstract] | |||
Property, plant and equipment, gross | 21,587 | 21,157 | |
Furniture, Fixtures and Office Equipment [Member] | |||
Property, plant and equipment [Abstract] | |||
Property, plant and equipment, gross | 16,354 | 15,665 | |
Construction in Progress [Member] | |||
Property, plant and equipment [Abstract] | |||
Property, plant and equipment, gross | 113,282 | 70,915 | |
Finance lease, Right-of-use asset [Abstract] | |||
Finance lease, right-of-use asset, gross | 35,560 | 0 | |
Less accumulated amortization | 0 | 0 | |
Finance lease, right-of-use asset, net | $ 35,560 | $ 0 |
PDMCX JOINT VENTURE, VIE (Detai
PDMCX JOINT VENTURE, VIE (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2021 | Feb. 02, 2020 | |
PDMCX [Member] | |||
Variable Interest Entity [Abstract] | |||
Gain (loss) on consolidation | $ 0 | ||
Total committed investment | $ 160 | ||
Term from inception after which interest holder may put their interest in the VIE | 2 years | ||
Period before put or purchase option can be exercised | 6 months | ||
Operating (loss) | $ (0.1) | $ (3.7) | |
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] | Local Financing [Member] | |||
Variable Interest Entity [Abstract] | |||
Local financing | $ 50 | ||
PDMCX [Member] | Local Financing [Member] | Assets Pledged as Collateral [Member] | |||
Variable Interest Entity [Abstract] | |||
Collateral amount | $ 95.7 | ||
Photronics Interest [Member] | |||
Variable Interest Entity [Abstract] | |||
Ownership percentage | 50.01% | ||
Financial or other support, amount | $ 65 | ||
Maximum exposure to loss | 56.8 | ||
DNP [Member] | |||
Variable Interest Entity [Abstract] | |||
Ownership percentage | 49.99% | ||
Financial or other support, amount | $ 65 |
PDMCX JOINT VENTURE, Carrying A
PDMCX JOINT VENTURE, Carrying Amounts of Assets and Liabilities (Details) - USD ($) $ in Thousands | Jan. 31, 2021 | Oct. 31, 2020 |
Carrying amounts of assets and liabilities [Abstract] | ||
Current assets | $ 506,112 | $ 500,139 |
Total assets | 1,232,062 | 1,188,182 |
Current liabilities | 145,531 | 142,939 |
Total liabilities | 253,566 | 225,916 |
Carrying Amount [Member] | ||
Carrying amounts of assets and liabilities [Abstract] | ||
Current assets | 43,753 | 56,095 |
Noncurrent assets | 144,069 | 141,097 |
Total assets | 187,822 | 197,192 |
Current liabilities | 29,545 | 31,922 |
Noncurrent liabilities | 44,620 | 55,676 |
Total liabilities | 74,165 | 87,598 |
Net assets | 113,657 | 109,594 |
Photronics Interest [Member] | ||
Carrying amounts of assets and liabilities [Abstract] | ||
Current assets | 21,881 | 28,053 |
Noncurrent assets | 72,049 | 70,562 |
Total assets | 93,930 | 98,615 |
Current liabilities | 14,776 | 15,964 |
Noncurrent liabilities | 22,314 | 27,844 |
Total liabilities | 37,090 | 43,808 |
Net assets | $ 56,840 | $ 54,807 |
DEBT (Details)
DEBT (Details) $ in Thousands, ¥ in Millions | 3 Months Ended | 12 Months Ended | |||
Jan. 31, 2021USD ($)Tool | Oct. 31, 2020USD ($) | Jan. 31, 2021CNY (¥)Tool | Dec. 31, 2020USD ($) | ||
Debt Instruments [Abstract] | |||||
Short-term debt | $ 0 | $ 4,708 | |||
Weighted-average interest rate of short -term debt | 2.02% | ||||
Long Term Debt Maturing In Year One [Abstract] | |||||
Next 12 months | 21,641 | $ 8,970 | |||
Long-term Debt [Abstract] | |||||
Months 13 - 24 | 21,131 | 15,142 | |||
Months 25 - 36 | 20,730 | 13,406 | |||
Months 37 - 48 | 28,842 | 9,789 | |||
Months 49 - 60 | 9,281 | 9,432 | |||
Thereafter | 0 | 7,211 | |||
Long-term debt | $ 79,984 | 54,980 | |||
Percent of repayment on approved loan principal in each first five semiannual loan repayments | 7.50% | 7.50% | |||
Percent of repayment on approved loan principal in each last five semiannual loan repayments | 12.50% | 12.50% | |||
Finance lease amount | $ 35,560 | 0 | |||
Xiamen Project Loans [Member] | |||||
Long Term Debt Maturing In Year One [Abstract] | |||||
Next 12 months | 6,961 | 6,705 | |||
Long-term Debt [Abstract] | |||||
Months 13 - 24 | 10,055 | 7,334 | |||
Months 25 - 36 | 10,055 | 9,592 | |||
Months 37 - 48 | 10,055 | 9,789 | |||
Months 49 - 60 | 9,281 | 9,432 | |||
Thereafter | 0 | 7,211 | |||
Long-term debt | $ 39,446 | $ 43,358 | |||
Interest rate at balance sheet date | 4.90% | 4.90% | |||
Basis spread on interest rates | 0.25% | 0.25% | |||
Maturity date | Dec. 31, 2025 | ||||
Periodic payment amount | Increases as loans mature | ||||
Periodic payment frequency | Semiannual, on individual loans | ||||
Loan collateral (carrying amount) | $ 95,703 | $ 94,459 | |||
Maximum borrowing capacity | 53,400 | ¥ 345 | |||
Amount outstanding | 46,400 | 300 | |||
Xiamen Working Capital Loans [Member] | |||||
Long Term Debt Maturing In Year One [Abstract] | |||||
Next 12 months | 8,861 | 2,265 | |||
Long-term Debt [Abstract] | |||||
Months 13 - 24 | 990 | 7,808 | |||
Months 25 - 36 | 3,465 | 3,814 | |||
Months 37 - 48 | 0 | 0 | |||
Months 49 - 60 | 0 | 0 | |||
Thereafter | 0 | 0 | |||
Long-term debt | $ 4,455 | $ 11,622 | |||
Maturity date | Jul. 31, 2023 | ||||
Periodic payment amount | Increases as loans mature | ||||
Periodic payment frequency | Semiannual, on individual loans | ||||
Maximum borrowing capacity | $ 25,000 | ||||
Xiamen Working Capital Loans [Member] | Minimum [Member] | |||||
Long-term Debt [Abstract] | |||||
Interest rate at balance sheet date | 4.53% | 4.53% | |||
Basis spread on interest rates | 0.6775% | 0.40% | |||
Xiamen Working Capital Loans [Member] | Maximum [Member] | |||||
Long-term Debt [Abstract] | |||||
Interest rate at balance sheet date | 4.61% | 4.61% | |||
Basis spread on interest rates | 0.76% | 0.76% | |||
Xiamen Working Capital Loans (value added tax component) [Member] | |||||
Long-term Debt [Abstract] | |||||
Maximum borrowing capacity | ¥ | 140 | ||||
Amount outstanding under credit facility | $ 13,300 | 86.1 | |||
Xiamen Working Capital Loans, Fund Operations [Member] | |||||
Long-term Debt [Abstract] | |||||
Maximum borrowing capacity | ¥ | 60 | ||||
Amount outstanding | ¥ | 0 | ||||
Hefei Equipment Loan [Member] | |||||
Long Term Debt Maturing In Year One [Abstract] | |||||
Next 12 months | 0 | ||||
Long-term Debt [Abstract] | |||||
Months 13 - 24 | 4,641 | ||||
Months 25 - 36 | 1,701 | ||||
Months 37 - 48 | 0 | ||||
Months 49 - 60 | 0 | ||||
Thereafter | 0 | ||||
Long-term debt | $ 6,342 | ||||
Interest rate at balance sheet date | 4.20% | ||||
Basis spread on interest rates | (0.45%) | ||||
Maturity date | Sep. 30, 2026 | ||||
Periodic payment amount | [1] | Varies | |||
Periodic payment frequency | [2] | Semiannual | |||
Loan collateral (carrying amount) | $ 89,799 | ||||
Maximum borrowing capacity | $ 30,900 | 200 | |||
Amount outstanding | ¥ | ¥ 41 | ||||
Number of lithography tools to be purchased | Tool | 2 | 2 | |||
Finance Lease [Member] | |||||
Long Term Debt Maturing In Year One [Abstract] | |||||
Next 12 months | $ 5,819 | ||||
Long-term Debt [Abstract] | |||||
Months 13 - 24 | 5,445 | ||||
Months 25 - 36 | 5,509 | ||||
Months 37 - 48 | 18,787 | ||||
Months 49 - 60 | 0 | ||||
Thereafter | 0 | ||||
Long-term debt | $ 29,741 | ||||
Contractual interest rate | 1.14% | 1.14% | |||
Maturity date | Dec. 31, 2024 | ||||
Periodic payment amount | [3] | Varies | |||
Periodic payment frequency | Monthly | ||||
Loan collateral (carrying amount) | [4] | $ 35,560 | |||
Finance lease amount | $ 35,600 | ||||
Short-term obligation | $ 3,500 | ||||
Amended and Restated Credit Agreement [Member] | |||||
Long-term Debt [Abstract] | |||||
Maximum borrowing capacity | 100,000 | ||||
Amount outstanding under credit facility | $ 0 | ||||
Term of loan | 5 years | ||||
Current borrowing capacity | $ 50,000 | ||||
Cash limit for dividends, distributions and redemption on equity | 50,000 | ||||
Available borrowing capacity | $ 50,000 | ||||
Effective interest rate | 1.12% | 1.12% | |||
[1] | First five loan repayments will each be for 7.5 percent of the approved 200 million RMB loan principal; last five installments will each be for 12.5 percent of the approved loan principal. | ||||
[2] | Semiannual repayments commence in March 2022. | ||||
[3] | See Note 8 for periodic payment amounts. | ||||
[4] | Amount represents the carrying amount of the related right-of-use asset, in which the lessor has a secured interest. |
REVENUE, Contract Assets, Liabi
REVENUE, Contract Assets, Liabilities and Accounts Receivable (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 31, 2021 | Feb. 02, 2020 | Oct. 31, 2020 | |
Contract with Customer, Asset and Liability [Abstract] | |||
Contract assets | $ 6,800 | $ 6,300 | |
Contract liabilities current | 7,500 | 8,000 | |
Contract liabilities non-current | 5,300 | $ 5,200 | |
Impairment loss on contract assets | 0 | $ 0 | |
Change in Contract with Customer, Liability [Abstract] | |||
Revenue from settlement of contract liabilities | $ 2,500 | $ 1,200 | |
Minimum [Member] | |||
Revenue, Performance Obligation [Abstract] | |||
Product invoice term | 30 days | ||
Product warranty period | 1 month | ||
Maximum [Member] | |||
Revenue, Performance Obligation [Abstract] | |||
Product invoice term | 90 days | ||
Product warranty period | 24 months | ||
IC [Member] | Minimum [Member] | |||
Backlog of Orders [Abstract] | |||
Customer order, expected satisfaction period | 7 days | ||
IC [Member] | Maximum [Member] | |||
Backlog of Orders [Abstract] | |||
Customer order, expected satisfaction period | 14 days | ||
FPD [Member] | Minimum [Member] | |||
Backlog of Orders [Abstract] | |||
Customer order, expected satisfaction period | 14 days | ||
FPD [Member] | Maximum [Member] | |||
Backlog of Orders [Abstract] | |||
Customer order, expected satisfaction period | 21 days |
REVENUE, Disaggregation of Reve
REVENUE, Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Disaggregation of Revenue [Abstract] | ||
Revenue | $ 152,067 | $ 159,736 |
IC [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 104,956 | 106,978 |
High-end [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 36,780 | 41,041 |
Mainstream [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 68,176 | 65,937 |
FPD [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 47,111 | 52,758 |
High-end [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 34,645 | 39,770 |
Mainstream [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 12,466 | 12,988 |
Taiwan [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 56,590 | 66,114 |
Korea [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 38,783 | 40,736 |
United States [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 26,604 | 25,067 |
China [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 20,997 | 19,900 |
Europe [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 8,575 | 7,543 |
All Other Asia [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 518 | 376 |
Over Time [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 141,284 | 137,696 |
At a Point in Time [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | $ 10,783 | $ 22,040 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Feb. 28, 2021 | Jan. 31, 2021 | Oct. 31, 2020 | |
Finance Leases [Abstract] | |||
Finance lease contract term | 5 years | ||
Finance lease amount | $ 35,560 | $ 0 | |
Finance lease, remaining lease term | 5 years | ||
Percent of original cost owed upon early buy-out | 39.84% | ||
Finance lease interest implicit rate | 1.14% | ||
Subsequent Event [Member] | |||
Finance Leases [Abstract] | |||
Finance lease contract term | 5 years | ||
Finance lease amount | $ 7,200 | ||
Finance lease monthly payments | $ 100 | ||
Percent of original cost owed upon early buy-out | 33.68464% | ||
Finance lease interest implicit rate | 1.09% | ||
First Three Months [Member] | |||
Finance Leases [Abstract] | |||
Finance lease monthly payments | $ 40 | ||
Following Nine Months [Member] | |||
Finance Leases [Abstract] | |||
Finance lease monthly payments | 600 | ||
Forty Eight Months [Member] | |||
Finance Leases [Abstract] | |||
Finance lease monthly payments | $ 500 |
LEASES, Information on Operatin
LEASES, Information on Operating and Finance Leases included on Balance Sheet (Details) - USD ($) $ in Thousands | Jan. 31, 2021 | Oct. 31, 2020 |
Operating and Finance Leases included in Consolidated Balance Sheets [Abstract] | ||
Lease Liabilities - Operating Leases | $ 7,074 | $ 7,183 |
Lease Liabilities - Finance Leases | 35,560 | 0 |
Other Assets [Member] | ||
Operating and Finance Leases included in Consolidated Balance Sheets [Abstract] | ||
ROU Assets - Operating Leases | $ 7,517 | $ 7,706 |
us-gaap_OtherAssetsNoncurrent | us-gaap:OperatingLeaseRightOfUseAssetStatementOfFinancialPositionExtensibleList | us-gaap:OperatingLeaseRightOfUseAssetStatementOfFinancialPositionExtensibleList |
Property, Plant and Equipment [Member] | ||
Operating and Finance Leases included in Consolidated Balance Sheets [Abstract] | ||
Finance lease, right-of-use asset, net | $ 35,560 | $ 0 |
us-gaap_PropertyPlantAndEquipmentNet | us-gaap:FinanceLeaseRightOfUseAssetStatementOfFinancialPositionExtensibleList | us-gaap:FinanceLeaseRightOfUseAssetStatementOfFinancialPositionExtensibleList |
Accrued Liabilities [Member] | ||
Operating and Finance Leases included in Consolidated Balance Sheets [Abstract] | ||
Lease Liabilities - Operating Leases | $ 2,282 | $ 2,175 |
us-gaap_OtherLiabilitiesNoncurrent | us-gaap:OperatingLeaseLiabilityStatementOfFinancialPositionExtensibleList | us-gaap:OperatingLeaseLiabilityStatementOfFinancialPositionExtensibleList |
Other Liabilities [Member] | ||
Operating and Finance Leases included in Consolidated Balance Sheets [Abstract] | ||
Lease Liabilities - Operating Leases | $ 4,792 | $ 5,008 |
us-gaap_OtherLiabilitiesNoncurrent | us-gaap:OperatingLeaseLiabilityStatementOfFinancialPositionExtensibleList | us-gaap:OperatingLeaseLiabilityStatementOfFinancialPositionExtensibleList |
Current Portion of Long-Term Debt [Member] | ||
Operating and Finance Leases included in Consolidated Balance Sheets [Abstract] | ||
Lease Liabilities - Finance Leases | $ 5,819 | $ 0 |
us-gaap_LongTermDebtNoncurrent | us-gaap:FinanceLeaseLiabilityStatementOfFinancialPositionExtensibleList | us-gaap:FinanceLeaseLiabilityStatementOfFinancialPositionExtensibleList |
Long-term Debt [Member] | ||
Operating and Finance Leases included in Consolidated Balance Sheets [Abstract] | ||
Lease Liabilities - Finance Leases | $ 29,741 | $ 0 |
us-gaap_LongTermDebtNoncurrent | us-gaap:FinanceLeaseLiabilityStatementOfFinancialPositionExtensibleList | us-gaap:FinanceLeaseLiabilityStatementOfFinancialPositionExtensibleList |
LEASES, Future Lease Payments U
LEASES, Future Lease Payments Under Noncancelable Operating and Finance Leases (Details) - USD ($) $ in Thousands | Jan. 31, 2021 | Oct. 31, 2020 |
Future Lease Payments Under Noncancelable Operating Leases [Abstract] | ||
Remainder of fiscal year 2021 | $ 1,814 | |
2022 | 2,306 | |
2023 | 1,311 | |
2024 | 783 | |
2025 | 639 | |
Thereafter | 550 | |
Total Lease Payments | 7,403 | |
Imputed interest | 329 | |
Operating lease liabilities | 7,074 | $ 7,183 |
Future Lease Payments Under Noncancelable Finance Leases [Abstract] | ||
Remainder of fiscal year 2021 | 4,506 | |
2022 | 6,054 | |
2023 | 5,760 | |
2024 | 5,760 | |
2025 | 14,661 | |
Thereafter | 0 | |
Total lease payments | 36,741 | |
Imputed interest | 1,181 | |
Finance lease liabilities | $ 35,560 | $ 0 |
LEASES, Lease Cost (Details)
LEASES, Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Lease, Cost [Abstract] | ||
Operating lease costs | $ 664 | $ 1,178 |
Short-term lease costs | 46 | 122 |
Variable lease costs | 144 | 0 |
Interest on lease liabilities | 35 | 0 |
Amortization of ROU assets | $ 0 | $ 0 |
LEASES, Operating and Finance L
LEASES, Operating and Finance Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 31, 2021 | Feb. 02, 2020 | Oct. 31, 2020 | |
Supplemental Cash Flows Information: [Abstract] | |||
Operating cash flows used for operating leases | $ 603 | $ 1,885 | |
Operating cash flows used for finance leases | 35 | 0 | |
Financing cash flows used for finance leases | 0 | 0 | |
ROU assets obtained in exchange for operating lease obligations | 267 | 282 | |
ROU assets obtained in exchange for finance lease obligations | $ 35,560 | $ 0 | |
Weighted Average Lease Terms, Discount Rates [Abstract] | |||
Operating leases, Weighted-average remaining lease term | 3 years 10 months 24 days | 4 years 1 month 6 days | |
Operating leases, Weighted-average discount rate | 2.37% | 2.37% | |
Finance lease, Weighted-average remaining lease term | 3 years 10 months 24 days | 0 years | |
Finance lease, Weighted-average discount rate | 1.14% | 0.00% |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
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 | $ 1,300 | $ 1,400 |
Share-based compensation cost capitalized | 0 | 0 |
Income tax benefits realized from stock option exercises | $ 0 | $ 0 |
Restricted Stock [Member] | ||
Restricted Stock [Abstract] | ||
Restricted stock awards granted (in shares) | 541,200 | 522,000 |
Weighted average grant date fair value of restricted stock awards (in dollars per share) | $ 11.13 | $ 15.26 |
Compensation cost not yet recognized related to unvested restricted stock awards | $ 10,600 | |
Number of shares of restricted stock outstanding (in shares) | 1,059,001 | |
Additional disclosures [Abstract] | ||
Period for recognition of compensation cost not yet recognized | 3 years | |
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 | |
Stock Options [Member] | ||
Share-based Compensation [Abstract] | ||
Cash received from option exercises | $ 700 | $ 2,800 |
Contractual term | 10 years | |
Additional disclosures [Abstract] | ||
Share options granted (in shares) | 0 | 0 |
Unrecognized compensation cost related to unvested option awards | $ 300 | |
Period for recognition of compensation cost not yet recognized | 1 year 7 months 6 days | |
Outstanding and exercisable option awards [Roll Forward] | ||
Outstanding at end of period (in shares) | 1,524,777 | |
Exercisable at end of period (in shares) | 1,412,200 | |
Weighted-Average Exercise Price [Abstract] | ||
Outstanding at end of period (in dollars per share) | $ 9.39 | |
Exercisable at end of period (in dollars per share) | $ 9.40 | |
Weighted-Average Remaining Contractual Life [Abstract] | ||
Outstanding at end of period | 4 years 7 months 6 days | |
Exercisable at end of period | 4 years 3 months 18 days | |
Aggregate Intrinsic Value [Abstract] | ||
Outstanding at end of period | $ 2,954 | |
Exercisable at end of period | $ 2,747 | |
Stock Options [Member] | Minimum [Member] | ||
Share-based Compensation [Abstract] | ||
Award vesting period | 1 year | |
Stock Options [Member] | Maximum [Member] | ||
Share-based Compensation [Abstract] | ||
Award vesting period | 4 years |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jan. 31, 2021 | Feb. 02, 2020 | Oct. 31, 2020 | |
Effective Income and Statutory Tax Rate [Abstract] | |||
Effective tax rate | 23.60% | 45.40% | |
U.S. statutory rate | 21.00% | 21.00% | |
Tax Credit Carryforward [Abstract] | |||
Change in valuation allowance | $ 2.1 | ||
Unrecognized Tax Benefits [Abstract] | |||
Unrecognized tax benefits | $ 2.6 | $ 2.7 | |
Income Tax Uncertainties [Abstract] | |||
Unrecognized tax benefits that would impact effective tax rate | 1.9 | 2 | |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued [Abstract] | |||
Accrued interest and penalties related to unrecognized tax benefits | $ 0.1 | $ 0.1 | |
Income Tax Examination [Abstract] | |||
Earliest open tax year | 2015 | ||
Taiwan Agency of the Ministry of Finance [Member] | |||
Income Tax Holiday [Abstract] | |||
Term of tax year holidays | 5 years | ||
Income tax holiday termination date | December 31, 2019 | ||
Dollar effect of income tax holiday | $ 0.1 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Calculation of basic and diluted earnings per share [Abstract] | ||
Net income attributable to Photronics, Inc. shareholders | $ 8,036 | $ 10,300 |
Effect of dilutive securities | 0 | 0 |
Earnings used for diluted earnings per share | $ 8,036 | $ 10,300 |
Weighted-average common shares computations [Abstract] | ||
Weighted-average common shares used for basic earnings per share (in shares) | 62,475 | 65,554 |
Effect of dilutive securities [Abstract] | ||
Share-based payment awards (in shares) | 530 | 895 |
Potentially dilutive common shares (in shares) | 530 | 895 |
Weighted-average common shares used for diluted earnings per share (in shares) | 63,005 | 66,449 |
Basic earnings per share (in dollars per share) | $ 0.13 | $ 0.16 |
Diluted earnings per share (in dollars per share) | $ 0.13 | $ 0.16 |
Antidilutive Securities [Abstract] | ||
Total potentially dilutive shares excluded (in shares) | 826 | 173 |
Share-based Payment Awards [Member] | ||
Antidilutive Securities [Abstract] | ||
Total potentially dilutive shares excluded (in shares) | 826 | 173 |
CHANGES IN ACCUMULATED OTHER _3
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
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 | 804,962 | |
Ending Balance | 815,502 | |
Accumulated Other Comprehensive Income [Member] | ||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||
Beginning Balance | 17,958 | (9,005) |
Ending Balance | 32,029 | (11,742) |
Foreign Currency Translation Adjustments [Member] | ||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||
Beginning Balance | 18,828 | (8,331) |
Ending Balance | 32,900 | (11,076) |
Other [Member] | ||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||
Beginning Balance | (870) | (674) |
Ending Balance | (871) | (666) |
AOCI Including Portion Attributable to Noncontrolling Interest [Member] | ||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||
Other comprehensive (loss) income | 18,288 | (1,547) |
Foreign Currency Translation Adjustments [Member] | ||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||
Other comprehensive (loss) income | 18,289 | (1,564) |
Other [Member] | ||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||
Other comprehensive (loss) income | (1) | 17 |
AOCI Attributable to Noncontrolling Interest [Member] | ||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||
Less: other comprehensive income attributable to noncontrolling interests | 4,217 | 1,190 |
Foreign Currency Translation Adjustments [Member] | ||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||
Less: other comprehensive income attributable to noncontrolling interests | 4,217 | 1,181 |
Other [Member] | ||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||
Less: other comprehensive income attributable to noncontrolling interests | $ 0 | $ 9 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Jan. 31, 2021 | Oct. 31, 2020 |
Fair Value, Assets and Liability [Abstract] | ||
Total assets | $ 0 | $ 0 |
Total liabilities | $ 0 | $ 0 |
SHARE REPURCHASE PROGRAMS (Deta
SHARE REPURCHASE PROGRAMS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Oct. 31, 2019 | Jan. 31, 2021 | Feb. 02, 2020 | Feb. 02, 2020 | Jan. 31, 2021 | Sep. 30, 2020 | Aug. 31, 2019 |
Shares Repurchase Programs and Preferred Stock Purchase Rights [Abstract] | |||||||
Cost of shares repurchased | $ 13,209 | $ 11,000 | |||||
September 2020 Announced Program [Member] | |||||||
Shares Repurchase Programs and Preferred Stock Purchase Rights [Abstract] | |||||||
Stock repurchased authorized amount | $ 100,000 | ||||||
Stock repurchase program - commencement date | Sep. 16, 2020 | ||||||
Number of shares repurchased (in shares) | 1,222 | 2,952 | |||||
Cost of shares repurchased | $ 13,209 | $ 30,709 | |||||
Average price paid per share (in dollars per share) | $ 10.81 | $ 10.40 | |||||
Shares repurchased and retired (in shares) | 1,700 | ||||||
August 2019 Announced Program [Member] | |||||||
Shares Repurchase Programs and Preferred Stock Purchase Rights [Abstract] | |||||||
Stock repurchased authorized amount | $ 100,000 | ||||||
Number of shares repurchased (in shares) | 916 | 1,911 | |||||
Cost of shares repurchased | $ 11,000 | $ 22,000 | |||||
Average price paid per share (in dollars per share) | $ 12.01 | $ 11.51 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2021 | May 03, 2020 | |
Commitment and Contingencies [Abstract] | ||
Outstanding commitments for capital expenditure | $ 68,900 | |
Subsidiary [Member] | ||
Commitment and Contingencies [Abstract] | ||
Loss contingency damages sought | 2,200 | |
Fine amount recommended by prosecutor | 30 | |
Contingent loss accrued | $ 30 | |
Subsidiary [Member] | Maximum [Member] | ||
Commitment and Contingencies [Abstract] | ||
Estimated range of contingent loss | 2,200 | |
Contingent loss not accrued | 2,170 | |
Subsidiary [Member] | Minimum [Member] | ||
Commitment and Contingencies [Abstract] | ||
Estimated range of contingent loss | $ 30 |