Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jan. 28, 2024 | Feb. 29, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Jan. 28, 2024 | |
Current Fiscal Year End Date | --10-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Document Transition Report | false | |
Entity File Number | 000-15451 | |
Entity Registrant Name | PHOTRONICS, INC. | |
Entity Central Index Key | 0000810136 | |
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 | 63,353,714 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jan. 28, 2024 | Oct. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 508,518 | $ 499,292 |
Short-term investments | 12,996 | 12,915 |
Accounts receivable, net of allowance of $1,090 in 2024 and $1,099 in 2023 | 203,607 | 194,927 |
Inventories | 50,680 | 49,963 |
Other current assets | 31,876 | 28,353 |
Total current assets | 807,677 | 785,450 |
Property, plant and equipment, net | 742,671 | 709,244 |
Deferred income taxes | 22,223 | 21,297 |
Other assets | 10,265 | 10,230 |
Total assets | 1,582,836 | 1,526,221 |
Current liabilities: | ||
Current portion of long-term debt | 20,771 | 6,621 |
Accounts payable | 86,925 | 84,024 |
Accrued liabilities | 77,593 | 94,578 |
Total current liabilities | 185,289 | 185,223 |
Long-term debt | 2,655 | 17,998 |
Other liabilities | 47,838 | 47,391 |
Total liabilities | 235,782 | 250,612 |
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, 61,746 shares issued and outstanding at January 28, 2024, and 61,310 shares issued and outstanding at October 31, 2023 | 617 | 613 |
Additional paid-in capital | 502,903 | 502,010 |
Retained earnings | 587,299 | 561,119 |
Accumulated other comprehensive loss | (67,863) | (88,734) |
Total Photronics, Inc. shareholders' equity | 1,022,956 | 975,008 |
Noncontrolling interests | 324,098 | 300,601 |
Total equity | 1,347,054 | 1,275,609 |
Total liabilities and equity | $ 1,582,836 | $ 1,526,221 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Jan. 28, 2024 | Oct. 31, 2023 |
Current assets: | ||
Accounts receivable, allowance | $ 1,090 | $ 1,099 |
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) | 61,746 | 61,310 |
Common stock, shares outstanding (in shares) | 61,746 | 61,310 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Jan. 28, 2024 | Jan. 29, 2023 | ||
Condensed Consolidated Statements of Income [Abstract] | |||
Revenue | [1] | $ 216,334 | $ 211,090 |
Cost of goods sold | 137,079 | 135,013 | |
Gross profit | 79,255 | 76,077 | |
Operating expenses: | |||
Selling, general and administrative | 18,321 | 16,818 | |
Research and development | 3,445 | 3,302 | |
Total operating expenses | 21,766 | 20,120 | |
Operating income | 57,489 | 55,957 | |
Other income (expense): | |||
Foreign currency transactions impact, net | (8,908) | (16,944) | |
Interest income and other income, net | 5,251 | 2,584 | |
Interest expense | (90) | (65) | |
Income before income tax provision | 53,742 | 41,532 | |
Income tax provision | 14,660 | 12,582 | |
Net income | 39,082 | 28,950 | |
Net income attributable to noncontrolling interests | 12,902 | 14,964 | |
Net income attributable to Photronics, Inc. shareholders | $ 26,180 | $ 13,986 | |
Earnings per share: | |||
Basic (in dollars per share) | $ 0.43 | $ 0.23 | |
Diluted (in dollars per share) | $ 0.42 | $ 0.23 | |
Weighted-average number of common shares outstanding: | |||
Basic (in shares) | 61,455 | 60,894 | |
Diluted (in shares) | 62,283 | 61,470 | |
[1]This table disaggregates revenue by the location in which it was earned. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 28, 2024 | Jan. 29, 2023 | |
Condensed Consolidated Statements of Comprehensive Income [Abstract] | ||
Net income | $ 39,082 | $ 28,950 |
Other comprehensive (loss) income, net of tax of $0: | ||
Foreign currency translation adjustments | 31,493 | 90,519 |
Other | (27) | (54) |
Net other comprehensive (loss) income | 31,466 | 90,465 |
Comprehensive income | 70,548 | 119,415 |
Less: comprehensive income attributable to noncontrolling interests | 23,497 | 31,393 |
Comprehensive income attributable to Photronics, Inc. shareholders | $ 47,051 | $ 88,022 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 28, 2024 | Jan. 29, 2023 | |
Condensed Consolidated Statements of Comprehensive Income [Abstract] | ||
Other comprehensive (loss) income, 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] | Accumulated Other Comprehensive Income (Loss) [Member] | Non-controlling Interests [Member] | Total |
Balance at Oct. 31, 2022 | $ 608 | $ 493,741 | $ 435,634 | $ (98,456) | $ 230,562 | $ 1,062,089 |
Balance (in shares) at Oct. 31, 2022 | 60,791 | |||||
Net income | $ 0 | 0 | 13,986 | 0 | 14,964 | 28,950 |
Other comprehensive income | 0 | 0 | 0 | 74,036 | 16,429 | 90,465 |
Shares issued under equity plans | $ 3 | (608) | 0 | 0 | 0 | (605) |
Shares issued under equity plans (in shares) | 311 | |||||
Share-based compensation expense | $ 0 | 1,821 | 0 | 0 | 0 | 1,821 |
Balance at Jan. 29, 2023 | $ 611 | 494,954 | 449,620 | (24,420) | 261,955 | 1,182,720 |
Balance (in shares) at Jan. 29, 2023 | 61,102 | |||||
Balance at Oct. 31, 2023 | $ 613 | 502,010 | 561,119 | (88,734) | 300,601 | 1,275,609 |
Balance (in shares) at Oct. 31, 2023 | 61,310 | |||||
Net income | $ 0 | 0 | 26,180 | 0 | 12,902 | 39,082 |
Other comprehensive income | 0 | 0 | 0 | 20,871 | 10,595 | 31,466 |
Shares issued under equity plans | $ 4 | (1,680) | 0 | 0 | 0 | (1,676) |
Shares issued under equity plans (in shares) | 436 | |||||
Share-based compensation expense | $ 0 | 2,573 | 0 | 0 | 0 | 2,573 |
Balance at Jan. 28, 2024 | $ 617 | $ 502,903 | $ 587,299 | $ (67,863) | $ 324,098 | $ 1,347,054 |
Balance (in shares) at Jan. 28, 2024 | 61,746 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 28, 2024 | Jan. 29, 2023 | |
Cash flows from operating activities: | ||
Net income | $ 39,082 | $ 28,950 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 20,702 | 19,105 |
Share-based compensation | 2,573 | 1,821 |
Changes in assets and liabilities: | ||
Accounts receivable | (2,906) | (7,565) |
Inventories | 409 | 1,705 |
Other current assets | (2,844) | (13,060) |
Accounts payable, accrued liabilities, and other | (15,508) | (3,276) |
Net cash provided by operating activities | 41,508 | 27,680 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (43,314) | (31,097) |
Purchases of available-for-sale debt securities | (2,436) | 0 |
Proceeds from maturities of available-for-sale debt securities | 2,500 | 0 |
Government incentives | 1,091 | 1,014 |
Other | (56) | (87) |
Net cash used in investing activities | (42,215) | (30,170) |
Cash flows from financing activities: | ||
Repayments of debt | (1,194) | (9,218) |
Proceeds from share-based arrangements | 936 | 672 |
Net settlements of restricted stock awards | (2,613) | (1,168) |
Net cash used in financing activities | (2,871) | (9,714) |
Effects of exchange rate changes on cash, cash equivalents, and restricted cash | 13,026 | 27,499 |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 9,448 | 15,295 |
Cash, cash equivalents, and restricted cash at beginning of period | 501,867 | 322,409 |
Cash, cash equivalents, and restricted cash at end of period | 511,315 | 337,704 |
Less: Ending restricted cash | 2,797 | 2,912 |
Cash and cash equivalents at end of period | 508,518 | 334,792 |
Supplemental disclosure of non-cash information: | ||
Accruals for property, plant and equipment purchased during the period | $ 1,628 | $ 12,031 |
BASIS OF FINANCIAL STATEMENT PR
BASIS OF FINANCIAL STATEMENT PRESENTATION | 3 Months Ended |
Jan. 28, 2024 | |
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 ICs and FPDs and are used as masters to transfer circuit patterns onto semiconductor wafers and FPD substrates during the fabrication of ICs, a variety of FPDs and, to a lesser extent, other types of electrical and optical components. We operate 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 U.S. GAAP 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 U.S. GAAP 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. These financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Form 10-K for the fiscal year ended October 31, 2023, where we discuss and provide additional information about our accounting policies and the methods and assumptions used in our estimates. The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect amounts reported in them. Our estimates are based on historical experience and on various assumptions that we believe to be reasonable under the facts and circumstances 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. Our business is typically impacted during the first quarter of our fiscal year by the North American, European, and Asian holiday periods, as some customers reduce their development and buying activities during this period. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the fiscal year ending October 31, 2024. |
ACCOUNT RECEIVABLES
ACCOUNT RECEIVABLES | 3 Months Ended |
Jan. 28, 2024 | |
ACCOUNT RECEIVABLES [Abstract] | |
ACCOUNT RECEIVABLES | NOTE 2 - ACCOUNT RECEIVABLES The components of Accounts Receivable January 28, October 31, 2024 2023 Accounts Receivable $ 176,146 $ 171,433 Unbilled Receivable 28,551 24,593 Allowance for Credit Losses (1,090 ) (1,099 ) $ 203,607 $ 194,927 |
SHORT-TERM INVESTMENTS
SHORT-TERM INVESTMENTS | 3 Months Ended |
Jan. 28, 2024 | |
SHORT-TERM INVESTMENTS [Abstract] | |
SHORT-TERM INVESTMENTS | NOTE 3 - SHORT-TERM INVESTMENTS Short-term investments consist of U.S. government securities and are classified as available-for-sale. We classify available-for-sale securities on our consolidated balance sheet as follows: - Maturing within three months or less from the date of purchase Cash and cash equivalents - Maturing, as of the date of purchase, more than three months, but with remaining maturities of less than one year, from the balance sheet date Short-term investments - Maturing one year or more from the balance sheet date Long-term marketable investments As of January 28, 2024, all of our available-for-sale securities had, at their dates of purchase, remaining maturities of more than three months, but less than one year, and have been classified as Short-term investments. Available-for-sale debt investments are reported at fair value, with unrealized gains or losses (net of tax) reported in Accumulated other comprehensive income. The fair values of our available-for-sale securities are Level 1 measurements, based on quoted prices from active markets for identical assets. In the event of a sale of an available-for-sale debt investment, we would determine the cost of the investment sold at the specific individual security level and would include any gain or loss in Interest income and other income, net, where we also report periodic interest earned and the amortization (accretion) of discounts (premiums) related to these investments. The table below provides information on our available-for-sale debt securities. January 28, 2024 October 31, 2023 Amortized Cost Unrealized Gains Unrealized Losses Carrying Value Amortized Cost Unrealized Gains Unrealized Losses Carrying Value Government securities $ 12,994 $ 3 $ (1 ) $ 12,996 $ 12,913 $ 4 $ (2 ) $ 12,915 |
INVENTORIES
INVENTORIES | 3 Months Ended |
Jan. 28, 2024 | |
INVENTORIES [Abstract] | |
INVENTORIES | NOTE 4 - INVENTORIES Inventories are stated at the lower of cost, determined under the first-in, first-out (“FIFO”) method, or net realizable value. Inventories January 28, 2024 October 31, 2023 Raw materials $ 49,669 $ 48,948 Work in process 1,000 1,010 Finished goods 11 5 $ 50,680 $ 49,963 |
PROPERTY, PLANT, AND EQUIPMENT,
PROPERTY, PLANT, AND EQUIPMENT, NET | 3 Months Ended |
Jan. 28, 2024 | |
PROPERTY, PLANT, AND EQUIPMENT, NET [Abstract] | |
PROPERTY, PLANT, AND EQUIPMENT, NET | NOTE 5 - PROPERTY, PLANT, AND EQUIPMENT, NET Presented below are the components of Property, plant, and equipment, net January 28, 2024 October 31, 2023 Land $ 11,537 $ 11,378 Buildings and improvements 189,152 185,850 Machinery and equipment 1,968,318 1,922,041 Leasehold improvements 19,572 18,894 Furniture, fixtures, and office equipment 16,985 15,856 Construction in progress 84,356 55,434 2,289,920 2,209,453 Accumulated depreciation and amortization (1,547,249 ) (1,500,209 ) $ 742,671 $ 709,244 Information on ROU assets resulting from finance leases, at the balance sheet dates, is presented below. January 28, 2024 October 31, 2023 Machinery and equipment $ 42,817 $ 42,820 Accumulated amortization (8,351 ) (7,655 ) $ 34,466 $ 35,165 The following table presents depreciation expense (including the amortization of ROU assets) related to property, plant, and equipment incurred during the reporting periods Three Months Ended January 28, 2024 January 29, 2023 Depreciation Expense $ 20,605 $ 19,028 |
PDMCX JOINT VENTURE
PDMCX JOINT VENTURE | 3 Months Ended |
Jan. 28, 2024 | |
PDMCX JOINT VENTURE [Abstract] | |
PDMCX JOINT VENTURE | NOTE 6 - PDMCX JOINT VENTURE In January 2018, Photronics, Inc., through its wholly owned Singapore subsidiary (hereinafter, within this Note “we”, “Photronics”, “us”, or “our”), and DNP, through its wholly owned subsidiary “DNP Asia Pacific PTE, Ltd.”, entered into a joint venture under which DNP obtained a 49.99% interest in our IC business in Xiamen, China. The joint venture, which we refer to as “PDMCX”, was established to develop and manufacture photomasks for 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. In 2020, in combination with local financing obtained by PDMCX, Photronics and DNP fulfilled their investment obligations under the PDMCX operating agreement ( “ 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 20.0% for a period of more than six three The following table presents net income we recorded from the operations of PDMCX during the reporting periods. Three Months Ended January 28, 2024 January 29, 2023 Net income from PDMCX $ 6,463 $ 5,918 As required by the guidance in Topic 810 - “Consolidation” of the 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 following table presents the carrying amounts of PDMCX assets and liabilities included in our condensed consolidated balance sheets. General creditors of PDMCX do not have recourse to the assets of Photronics (other than the net assets of PDMCX); therefore, our maximum exposure to loss from PDMCX is our interest in the carrying amount of the net assets of the joint venture. January 28, 2024 October 31, 2023 Classification Carrying Amount Photronics Interest Carrying Amount Photronics Interest Current assets $ 143,250 $ 71,639 $ 135,960 $ 67,994 Noncurrent assets 150,077 75,054 136,334 68,181 Total assets 293,327 146,693 272,294 136,175 Current liabilities 36,661 18,334 36,305 18,156 Noncurrent liabilities 1,929 965 1,873 937 Total liabilities 38,590 19,299 38,178 19,093 Net assets $ 254,737 $ 127,394 $ 234,116 $ 117,082 |
DEBT
DEBT | 3 Months Ended |
Jan. 28, 2024 | |
DEBT [Abstract] | |
DEBT | NOTE 7 - DEBT As of January 28, 2024, the Current portion of long-term debt and the Long-term debt balances were comprised of finance leases as described below: As of January 28, 2024 Finance Leases Principal due: Next 12 months $ 20,771 Months 13 – 24 $ 2,632 Months 25 – 36 12 Months 37 – 48 11 Months 49 – 60 - Long-term debt 2,655 Total debt $ 23,426 Interest rate at balance sheet date N/A Basis spread on interest rates N/A Interest rate reset N/A Maturity date N/A Periodic payment amount Varies as Lease mature Periodic payment frequency Monthly Loan collateral (carrying amount) $ 34,466 (1) (1) Represents the carrying amount at the balance sheet date of the related ROU assets, in which the lessors have secured interests. The table below provides information on our long-term debt as of October 31, 2023. As of October 31, 2023 Finance Leases Principal due: Next 12 months $ 6,621 Months 13 – 24 $ 17,972 Months 25 – 36 12 Months 37 – 48 13 Months 49 – 60 1 Long-term debt 17,998 Total debt $ 24,619 Interest rate at balance sheet date N/A Basis spread on interest rates N/A Interest rate reset N/A Maturity date N/A Periodic payment amount Varies as Lease mature Periodic payment frequency Monthly Loan collateral (carrying amount) $ 35,165 (1) (1) Represents the carrying amount at the balance sheet date of the related ROU assets, in which the lessors have secured interests. Finance Leases In February 2021, we entered into a five-year $7.2 million finance lease for a high-end inspection tool. Monthly payments on the lease, which commenced in February 2021, are $0.1 million per month. Upon the payment of the fiftieth monthly payment and prior to payment of the fifty-first monthly payment, we may exercise an early buyout option to purchase the tool for $2.4 million. If we do not exercise the early buyout option, then at the end of the five-year lease term, the lease shall continue to renew on a month-to-month basis at the same rental terms; at our option, after the original term or any renewal periods, we may return the tool, elect to extend the lease, or purchase the tool at its fair market value. Since we are reasonably certain that we will exercise the early buyout option, our lease liability reflects such exercise and we have classified the lease as a finance lease. The interest rate implicit in the lease is 1.08%. In December 2020, we entered into a five-year $35.5 million finance lease for a high-end lithography tool. Monthly payments on the lease, which commenced in January 2021, increased from $0.04 million during the first three months to $0.6 million for the following nine months, followed by forty-eight monthly payments of $0.5 million. As of the due date of the forty-eighth monthly payment, we may exercise an early buyout option to purchase the tool for $14.1 million. If we do not exercise the early buyout option, then at the end of the five-year lease term, at our option, we may return the tool, elect to extend the lease term for a period and a lease payment to be agreed with lessor at the time, or purchase the tool for its then-fair market value, as determined by the lessor. Since we are reasonably certain that we will exercise the early buyout option, our lease liability reflects such exercise and we have classified the lease as a finance lease. The interest rate implicit in the lease is 1.58%. The lease agreement incorporates the covenants included in our Credit Agreement, as defined below (expired in September 2023), which are detailed below, and includes a cross-default provision for any agreement or instrument with an outstanding, committed balance greater than $5.0 million in which we are the indebted party. Corporate Credit Agreement In September 2018, we entered into a five-year amended and restated credit agreement (the “Credit Agreement”), which had a $50 million borrowing limit, with an expansion capacity to $100 million. The Credit Agreement was secured by substantially all of our assets located in the United States and common stock we own in certain subsidiaries. The Credit Agreement was subject to covenants around minimum interest coverage ratio, total leverage ratio, and minimum unrestricted cash balance (all of which we were in compliance with at the termination of the agreement in September 2023), and limited the amount of cash dividends, distributions, and redemptions we could pay on our common stock to an aggregate annual amount of $50 million. The Credit Agreement expired, and was not renewed as of October 31, 2023. There were no outstanding borrowings against the Credit Agreement at its expiration. Xiamen Working Capital Loans In November 2018, PDMCX obtained approval 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. This facility is subject to annual reviews and extensions, with the most recent extension set to expire in July 2024 . The interest rates are variable, based on the RMB Loan Prime Rate of the National Interbank Funding Center. Interest incurred on the loans was eligible for reimbursement through incentives provided by the Xiamen Torch Hi-Tech Industrial Development Zone, which provided for such reimbursements up to a prescribed limit and duration. |
REVENUE
REVENUE | 3 Months Ended |
Jan. 28, 2024 | |
REVENUE [Abstract] | |
REVENUE | NOTE 8 - 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 are 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 government 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 was 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. We did no t identify impairment indicators for any outstanding contract assets during the -month periods ended or . The following table provides information about our contract balances at the balance sheet dates. Classification January 28, 2024 October 31, 2023 Contract Assets Other current assets $ 12,376 $ 10,984 Contract Liabilities Accrued liabilities $ 8,968 $ 9,965 Other liabilities 11,820 12,454 $ 20,788 $ 22,419 The following table presents revenue recognized from contract liabilities that existed at the beginning of the reporting periods. Three Months Ended January 28, 2024 January 29, 2023 Revenue recognized from beginning liability $ 5,507 $ 7,638 We generally record our accounts receivable at their billed amounts. All outstanding past due customer invoices are reviewed for collectability 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 an allowance for credit losses. In the event that an amount is determined to be uncollectible, we charge the allowance for credit losses and derecognize the related receivable. We did not incur any credit losses on our accounts receivable during the three-month periods ended January 28, 2024 or 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 collectability 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 have 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 January 28, 2024 January 29, 2023 Revenue by Product Type IC High-end $ 60,875 $ 48,003 Mainstream 96,714 108,586 Total IC $ 157,589 $ 156,589 FPD High-end $ 50,616 $ 45,691 Mainstream 8,129 8,810 Total FPD $ 58,745 $ 54,501 $ 216,334 $ 211,090 Three Months Ended January 28, 2024 January 29 2023 Revenue by Geographic Origin* Taiwan $ 74,965 $ 75,569 China 58,137 58,932 Korea 40,335 37,832 United States 32,733 29,881 Europe 9,705 8,447 Other 459 429 $ 216,334 $ 211,090 * This table disaggregates revenue by the location in which it was earned. Three Months Ended Revenue by Timing of Recognition January 28, 2024 January 29 2023 Over time $ 203,527 $ 197,164 At a point in time 12,807 13,926 $ 216,334 $ 211,090 Contract Costs We pay commissions to third-party sales agents for certain sales they procure on our behalf. 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 do 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 contract obtainment costs as assets. Remaining Performance Obligations As we are typically required to fulfill customer orders within a short period of time, our backlog of orders has historically been two three weeks one two weeks ’ two 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 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. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Jan. 28, 2024 | |
SHARE-BASED COMPENSATION [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 9 - SHARE-BASED COMPENSATION In March 2016, shareholders approved our current 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 was four million shares. On March 16, 2023, at its annual meeting of shareholders, the shareholders of Photronics, Inc., approved amendments to the Plan to increase the number of shares available for issuance by an additional one million shares, thereby increasing the shares available for issuance under the Plan from four million to five million. 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. The table below presents information on our share-based compensation expenses for the three-month periods ended January 28, 2024, and January 29, 2023. Three Months Ended January 28, 2024 January 29, 2023 Expense reported in: Cost of goods sold $ 595 $ 281 Selling, general, and administrative 1,749 1,378 Research and development 229 162 Total expense incurred $ 2,573 $ 1,821 Expense by award type: Restricted stock awards $ 2,573 $ 1,764 Stock options - 1 Employee stock purchase plan - 56 Total expense incurred $ 2,573 $ 1,821 Income tax benefits of share-based compensation $ 99 $ 155 Share-based compensation cost capitalized $ - $ - Restricted Stock Awards We periodically grant restricted stock awards, the restrictions on which typically lapse over a service period of one to four years . The fair value of the awards is determined on the date of grant, based on the closing price of our common stock. The table below presents information on our restricted stock awards for the three-month periods ended January 28, 2024, and January 29, 2023. Three Months Ended January 28, 2024 January 29, 2023 Number of shares granted in period 825,050 786,500 Weighted-average grant-date fair value of awards (in dollars per share) $ 29.77 $ 16.77 Compensation cost not yet recognized $ 31,426 $ 18,526 Weighted-average amortization period for cost not yet recognized (in years) 3.3 3.2 Shares outstanding at balance sheet date 1,634,315 1,374,422 Stock Options Option awards generally vest in one The table below presents information on our stock options for the three-month periods ended January 28, 2024, and January 29, 2023. Three Months Ended January 28, 2024 January 29, 2023 Number of options granted in period - - Cash received from options exercised $ 936 $ 563 Compensation cost not yet recognized $ - $ - Weighted-average amortization period for cost not yet recognized (in years) - - Information on outstanding and exercisable option awards as of January 28, 2024 is presented below. Options Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding and exercisable at January 28, 2024 375,525 $ 10.31 2.59 $ 7,448 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Jan. 28, 2024 | |
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 table below sets forth the primary reasons that our effective income tax rates differed from the U.S. statutory tax rates in effect during the three-month periods ended January 28, 2024, and January 29, 2023. Reporting Period U.S. Statutory Tax Rates Photronics Effective Tax Rates Primary Reasons for Differences Three months ended January 28, 2024 21.0% 27.3% Non-recognition of the tax benefit of losses that, in certain jurisdictions, have been offset by valuation allowances; non-U.S. pre-tax income being taxed at higher statutory rates in non-U.S. jurisdictions; and the establishment of uncertain tax positions in non-U.S. jurisdictions. Three months ended January 29, 2023 21.0% 30.3% Non-recognition of the tax benefit of losses that, in certain jurisdictions, have been offset by valuation allowances; non-U.S. pre-tax income being taxed at higher statutory rates in non-U.S. jurisdictions; and the establishment of uncertain tax positions in non-U.S. jurisdictions. Uncertain Tax Positions Although the timing of reversal of uncertain tax positions may be uncertain, as they can be dependent upon the settlement of tax audits, we believe 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. We are no longer subject to tax authority examinations in the U.S., major foreign, or state tax jurisdictions for years prior to fiscal year 2018 The table below presents information on our unrecognized tax benefits as of the balance sheet dates. January 28, 2024 October 31, 2023 Unrecognized tax benefits related to uncertain tax positions $ 9,744 $ 8,908 Unrecognized tax benefits that, if recognized, would impact the effective tax rate $ 9,744 $ 8,908 Accrued interest and penalties related to uncertain tax positions $ 688 $ 576 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Jan. 28, 2024 | |
EARNINGS PER SHARE [Abstract] | |
EARNINGS PER SHARE | NOTE 11 - EARNINGS PER SHARE The calculations of basic and diluted earnings per share are presented below. Three Months Ended January 28, 2024 January 29, 2023 Net income attributable to Photronics, Inc. shareholders $ 26,180 $ 13,986 Effect of dilutive securities - - Earnings used for diluted earnings per share $ 26,180 $ 13,986 Weighted-average common shares computations: Weighted-average common shares used for basic earnings per share 61,455 60,894 Effect of dilutive securities: Share-based payment awards 828 576 Potentially dilutive common shares 828 576 Weighted-average common shares used for diluted earnings per share 62,283 61,470 Basic earnings per share $ 0.43 $ 0.23 Diluted earnings per share $ 0.42 $ 0.23 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 28, 2024 January 29, 2023 Share-based payment awards 241 268 Total potentially dilutive shares excluded 241 268 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Jan. 28, 2024 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 12 - COMMITMENTS AND CONTINGENCIES As of January 28, 2024 In May 2022, we were informed of a customs audit in one of our China operations. We estimated a contingency ranging from $2.2 million to $3.7 million, which included unpaid additional customs duties and related interest and penalties for the previous three years (the period under audit). In the three-month period ended May 1, 2022, we recorded a contingent loss of $2.2 million, as we believed this was the most likely outcome. The $2.2 million amount was recorded with a charge to Cost of goods sold in the condensed consolidated statements of income and Accrued liabilities in the condensed consolidated balance sheets. In November 2022, upon settlement of the audit, we reversed $1.0 million of the accrual. 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 our consolidated financial statements. |
CHANGES IN ACCUMULATED OTHER CO
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME BY COMPONENT | 3 Months Ended |
Jan. 28, 2024 | |
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME BY COMPONENT [Abstract] | |
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME BY COMPONENT | NOTE 13 - CHANGES IN ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME BY COMPONENT The following tables set forth the changes in our accumulated other comprehensive (loss) income by component (net of tax of $0) for the three-month periods ended January 28, 2024, and January 29, 2023. Three Months Ended January 28, 2024 Foreign Currency Translation Adjustments Other Total Balance at October 31, 2023 $ (88,044 ) $ (690 ) $ (88,734 ) Other comprehensive (loss) income 31,493 (27 ) 31,466 Other comprehensive (loss) income attributable to noncontrolling interests (10,609 ) 14 (10,595 ) Balance at January 28, 2024 $ (67,160 ) $ (703 ) $ (67,863 ) Three Months Ended January 29, 2023 Foreign Currency Translation Adjustments Other Total Balance at October 31, 2022 $ (97,790 ) $ (666 ) $ (98,456 ) Other comprehensive (loss) income 90,519 (54 ) 90,465 Other comprehensive (loss) income attributable to noncontrolling interests (16,466 ) 37 (16,429 ) Balance at January 29, 2023 $ (23,737 ) $ (683 ) $ (24,420 ) |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Jan. 28, 2024 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 14 - 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 certain 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 Short-term investments are Level 1 measurements. (Please refer to “Investments” within Note 3 for additional fair value information on our Short-term investments.) The fair values of certain cash equivalents are Level 2 measurements that are provided by independent third-party pricing services or other independent entities, which may use matrix pricing, valuation models, or other methods which utilize observable market data. The fair values of our variable-rate debt instruments are Level 2 measurements and approximate their carrying values due to the variable nature of their underlying interest rates. Other than our Short-term investments, we did not have any assets or liabilities measured at fair value, on a recurring or a nonrecurring basis, at January 28, 2024 |
SHARE REPURCHASE PROGRAMS
SHARE REPURCHASE PROGRAMS | 3 Months Ended |
Jan. 28, 2024 | |
SHARE REPURCHASE PROGRAMS [Abstract] | |
SHARE REPURCHASE PROGRAMS | NOTE 15 - SHARE REPURCHASE PROGRAMS In September 2020, 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. The most recent 10b5-1 plan expired on September 15, 2022, and has not been renewed. Share repurchases under this authorization commenced on September 16, 2020. The repurchase authorization by the Board of Directors has no expiration date, does not obligate us to acquire any common stock, and is subject to market conditions. There have been no shares repurchased for the three-month periods ended January 28, 2024, and January 29, 2023. As of January 28, 2024 |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Jan. 28, 2024 | |
RECENT ACCOUNTING PRONOUNCEMENTS [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 16 - RECENT ACCOUNTING PRONOUNCEMENTS Accounting Standards Updates to be Adopted In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this update related to the rate reconciliation and income taxes paid disclosures to improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. The amendments allow investors to better assess, in their capital allocation decisions, how an entity’s worldwide operations and related tax risks and tax planning and operational opportunities affect its income tax rate and prospects for future cash flows. The guidance in this update will be effective for Photronics in its fiscal year 2026 Form 10-K, with early application of the amendments allowed. We are currently evaluating the effect the adoption of this ASU may have on our disclosures. In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance in this update is effective for Photronics in its fiscal year 2025 Form 10-K, with early adoption permitted. We are currently evaluating the effect the adoption of this ASU may have on our disclosures. |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jan. 28, 2024 shares | |
Insider Trading Arrangements [Line Items] | |
Material Terms of Trading Arrangement | On January 11, 2024, Lucien Bouchard, our Vice President of Global Sales and Global Sales Engineering, adopted a Rule 10b5-1 trading arrangement, (the “Plan”) providing for the sale of an aggregate of up to 9,000 shares of our common stock granted to Mr. Bouchard under our compensation program. The Plan is intended to satisfy the affirmative defense in Rule 10b5-1(c). The first date that sales of any shares are permitted to be sold under the Plan was February 12, 2024 |
Name | Lucien Bouchard |
Title | Vice President |
Rule 10b5-1 Arrangement Adopted | true |
Non-Rule 10b5-1 Arrangement Adopted | false |
Adoption Date | January 11, 2024 |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Arrangement Duration | 32 days |
Aggregate Available | 9,000 |
BASIS OF FINANCIAL STATEMENT _2
BASIS OF FINANCIAL STATEMENT PRESENTATION (Policies) | 3 Months Ended |
Jan. 28, 2024 | |
BASIS OF FINANCIAL STATEMENT PRESENTATION [Abstract] | |
Consolidation | The accompanying unaudited condensed consolidated financial statements (“the financial statements”) have been prepared in accordance with U.S. GAAP 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 U.S. GAAP 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. These financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Form 10-K for the fiscal year ended October 31, 2023, where we discuss and provide additional information about our accounting policies and the methods and assumptions used in our estimates. |
Estimates and Assumptions | The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect amounts reported in them. Our estimates are based on historical experience and on various assumptions that we believe to be reasonable under the facts and circumstances 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. |
INVENTORIES (Policies)
INVENTORIES (Policies) | 3 Months Ended |
Jan. 28, 2024 | |
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. 28, 2024 | |
PDMCX JOINT VENTURE [Abstract] | |
Variable Interest Entities | As required by the guidance in Topic 810 - “Consolidation” of the 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. 28, 2024 | |
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 are 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 government 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 was 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. We did no t identify impairment indicators for any outstanding contract assets during the -month periods ended or . We generally record our accounts receivable at their billed amounts. All outstanding past due customer invoices are reviewed for collectability 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 an allowance for credit losses. In the event that an amount is determined to be uncollectible, we charge the allowance for credit losses and derecognize the related receivable. We did not incur any credit losses on our accounts receivable during the three-month periods ended January 28, 2024 or 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 collectability 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 have received from customers have generally not preceded the completion of our performance obligations by more than year. |
SHARE-BASED COMPENSATION (Polic
SHARE-BASED COMPENSATION (Policies) | 3 Months Ended |
Jan. 28, 2024 | |
Restricted Stock [Member] | |
Stock Options [Abstract] | |
Share-Based Compensation | Restricted Stock Awards We periodically grant restricted stock awards, the restrictions on which typically lapse over a service period of one to four years . The fair value of the awards is determined on the date of grant, based on the closing price of our common stock. |
Employee Stock Option [Member] | |
Stock Options [Abstract] | |
Share-Based Compensation | Stock Options Option awards generally vest in one The table below presents information on our stock options for the three-month periods ended January 28, 2024, and January 29, 2023. |
INCOME TAXES (Policies)
INCOME TAXES (Policies) | 3 Months Ended |
Jan. 28, 2024 | |
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. The table below sets forth the primary reasons that our effective income tax rates differed from the U.S. statutory tax rates in effect during the three-month periods ended January 28, 2024, and January 29, 2023. |
FAIR VALUE MEASUREMENTS (Polici
FAIR VALUE MEASUREMENTS (Policies) | 3 Months Ended |
Jan. 28, 2024 | |
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. 28, 2024 | |
RECENT ACCOUNTING PRONOUNCEMENTS [Abstract] | |
Recent Accounting Pronouncements | Accounting Standards Updates to be Adopted In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this update related to the rate reconciliation and income taxes paid disclosures to improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. The amendments allow investors to better assess, in their capital allocation decisions, how an entity’s worldwide operations and related tax risks and tax planning and operational opportunities affect its income tax rate and prospects for future cash flows. The guidance in this update will be effective for Photronics in its fiscal year 2026 Form 10-K, with early application of the amendments allowed. We are currently evaluating the effect the adoption of this ASU may have on our disclosures. In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance in this update is effective for Photronics in its fiscal year 2025 Form 10-K, with early adoption permitted. We are currently evaluating the effect the adoption of this ASU may have on our disclosures. |
ACCOUNT RECEIVABLES (Tables)
ACCOUNT RECEIVABLES (Tables) | 3 Months Ended |
Jan. 28, 2024 | |
ACCOUNT RECEIVABLES [Abstract] | |
Accounts Receivable | The components of Accounts Receivable January 28, October 31, 2024 2023 Accounts Receivable $ 176,146 $ 171,433 Unbilled Receivable 28,551 24,593 Allowance for Credit Losses (1,090 ) (1,099 ) $ 203,607 $ 194,927 |
SHORT-TERM INVESTMENTS (Tables)
SHORT-TERM INVESTMENTS (Tables) | 3 Months Ended |
Jan. 28, 2024 | |
SHORT-TERM INVESTMENTS [Abstract] | |
Available-for-Sale Debt Securities | The table below provides information on our available-for-sale debt securities. January 28, 2024 October 31, 2023 Amortized Cost Unrealized Gains Unrealized Losses Carrying Value Amortized Cost Unrealized Gains Unrealized Losses Carrying Value Government securities $ 12,994 $ 3 $ (1 ) $ 12,996 $ 12,913 $ 4 $ (2 ) $ 12,915 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Jan. 28, 2024 | |
INVENTORIES [Abstract] | |
Inventories | Inventories are stated at the lower of cost, determined under the first-in, first-out (“FIFO”) method, or net realizable value. Inventories January 28, 2024 October 31, 2023 Raw materials $ 49,669 $ 48,948 Work in process 1,000 1,010 Finished goods 11 5 $ 50,680 $ 49,963 |
PROPERTY, PLANT, AND EQUIPMEN_2
PROPERTY, PLANT, AND EQUIPMENT, NET (Tables) | 3 Months Ended |
Jan. 28, 2024 | |
PROPERTY, PLANT, AND EQUIPMENT, NET [Abstract] | |
Components of Property, Plant and Equipment, Net | Presented below are the components of Property, plant, and equipment, net January 28, 2024 October 31, 2023 Land $ 11,537 $ 11,378 Buildings and improvements 189,152 185,850 Machinery and equipment 1,968,318 1,922,041 Leasehold improvements 19,572 18,894 Furniture, fixtures, and office equipment 16,985 15,856 Construction in progress 84,356 55,434 2,289,920 2,209,453 Accumulated depreciation and amortization (1,547,249 ) (1,500,209 ) $ 742,671 $ 709,244 |
Information on ROU Assets from Finance Leases | Information on ROU assets resulting from finance leases, at the balance sheet dates, is presented below. January 28, 2024 October 31, 2023 Machinery and equipment $ 42,817 $ 42,820 Accumulated amortization (8,351 ) (7,655 ) $ 34,466 $ 35,165 |
Depreciation Expense | The following table presents depreciation expense (including the amortization of ROU assets) related to property, plant, and equipment incurred during the reporting periods Three Months Ended January 28, 2024 January 29, 2023 Depreciation Expense $ 20,605 $ 19,028 |
PDMCX JOINT VENTURE (Tables)
PDMCX JOINT VENTURE (Tables) | 3 Months Ended |
Jan. 28, 2024 | |
PDMCX JOINT VENTURE [Abstract] | |
Net Income (Loss) Recorded from Operations | The following table presents net income we recorded from the operations of PDMCX during the reporting periods. Three Months Ended January 28, 2024 January 29, 2023 Net income from PDMCX $ 6,463 $ 5,918 |
Carrying Amounts and Exposure to Loss Related to Assets and Liabilities | The following table presents the carrying amounts of PDMCX assets and liabilities included in our condensed consolidated balance sheets. General creditors of PDMCX do not have recourse to the assets of Photronics (other than the net assets of PDMCX); therefore, our maximum exposure to loss from PDMCX is our interest in the carrying amount of the net assets of the joint venture. January 28, 2024 October 31, 2023 Classification Carrying Amount Photronics Interest Carrying Amount Photronics Interest Current assets $ 143,250 $ 71,639 $ 135,960 $ 67,994 Noncurrent assets 150,077 75,054 136,334 68,181 Total assets 293,327 146,693 272,294 136,175 Current liabilities 36,661 18,334 36,305 18,156 Noncurrent liabilities 1,929 965 1,873 937 Total liabilities 38,590 19,299 38,178 19,093 Net assets $ 254,737 $ 127,394 $ 234,116 $ 117,082 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Jan. 28, 2024 | |
DEBT [Abstract] | |
Long-term Debt | As of January 28, 2024, the Current portion of long-term debt and the Long-term debt balances were comprised of finance leases as described below: As of January 28, 2024 Finance Leases Principal due: Next 12 months $ 20,771 Months 13 – 24 $ 2,632 Months 25 – 36 12 Months 37 – 48 11 Months 49 – 60 - Long-term debt 2,655 Total debt $ 23,426 Interest rate at balance sheet date N/A Basis spread on interest rates N/A Interest rate reset N/A Maturity date N/A Periodic payment amount Varies as Lease mature Periodic payment frequency Monthly Loan collateral (carrying amount) $ 34,466 (1) (1) Represents the carrying amount at the balance sheet date of the related ROU assets, in which the lessors have secured interests. The table below provides information on our long-term debt as of October 31, 2023. As of October 31, 2023 Finance Leases Principal due: Next 12 months $ 6,621 Months 13 – 24 $ 17,972 Months 25 – 36 12 Months 37 – 48 13 Months 49 – 60 1 Long-term debt 17,998 Total debt $ 24,619 Interest rate at balance sheet date N/A Basis spread on interest rates N/A Interest rate reset N/A Maturity date N/A Periodic payment amount Varies as Lease mature Periodic payment frequency Monthly Loan collateral (carrying amount) $ 35,165 (1) (1) Represents the carrying amount at the balance sheet date of the related ROU assets, in which the lessors have secured interests. |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Jan. 28, 2024 | |
REVENUE [Abstract] | |
Contract Balances | The following table provides information about our contract balances at the balance sheet dates. Classification January 28, 2024 October 31, 2023 Contract Assets Other current assets $ 12,376 $ 10,984 Contract Liabilities Accrued liabilities $ 8,968 $ 9,965 Other liabilities 11,820 12,454 $ 20,788 $ 22,419 The following table presents revenue recognized from contract liabilities that existed at the beginning of the reporting periods. Three Months Ended January 28, 2024 January 29, 2023 Revenue recognized from beginning liability $ 5,507 $ 7,638 |
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 January 28, 2024 January 29, 2023 Revenue by Product Type IC High-end $ 60,875 $ 48,003 Mainstream 96,714 108,586 Total IC $ 157,589 $ 156,589 FPD High-end $ 50,616 $ 45,691 Mainstream 8,129 8,810 Total FPD $ 58,745 $ 54,501 $ 216,334 $ 211,090 Three Months Ended January 28, 2024 January 29 2023 Revenue by Geographic Origin* Taiwan $ 74,965 $ 75,569 China 58,137 58,932 Korea 40,335 37,832 United States 32,733 29,881 Europe 9,705 8,447 Other 459 429 $ 216,334 $ 211,090 * This table disaggregates revenue by the location in which it was earned. Three Months Ended Revenue by Timing of Recognition January 28, 2024 January 29 2023 Over time $ 203,527 $ 197,164 At a point in time 12,807 13,926 $ 216,334 $ 211,090 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Jan. 28, 2024 | |
SHARE-BASED COMPENSATION [Abstract] | |
Share-based Compensation Expenses | The table below presents information on our share-based compensation expenses for the three-month periods ended January 28, 2024, and January 29, 2023. Three Months Ended January 28, 2024 January 29, 2023 Expense reported in: Cost of goods sold $ 595 $ 281 Selling, general, and administrative 1,749 1,378 Research and development 229 162 Total expense incurred $ 2,573 $ 1,821 Expense by award type: Restricted stock awards $ 2,573 $ 1,764 Stock options - 1 Employee stock purchase plan - 56 Total expense incurred $ 2,573 $ 1,821 Income tax benefits of share-based compensation $ 99 $ 155 Share-based compensation cost capitalized $ - $ - |
Restricted Stock Awards Activity | The table below presents information on our restricted stock awards for the three-month periods ended January 28, 2024, and January 29, 2023. Three Months Ended January 28, 2024 January 29, 2023 Number of shares granted in period 825,050 786,500 Weighted-average grant-date fair value of awards (in dollars per share) $ 29.77 $ 16.77 Compensation cost not yet recognized $ 31,426 $ 18,526 Weighted-average amortization period for cost not yet recognized (in years) 3.3 3.2 Shares outstanding at balance sheet date 1,634,315 1,374,422 |
Stock Options Activity | The table below presents information on our stock options for the three-month periods ended January 28, 2024, and January 29, 2023. Three Months Ended January 28, 2024 January 29, 2023 Number of options granted in period - - Cash received from options exercised $ 936 $ 563 Compensation cost not yet recognized $ - $ - Weighted-average amortization period for cost not yet recognized (in years) - - |
Information on Outstanding and Exercisable Option | Information on outstanding and exercisable option awards as of January 28, 2024 is presented below. Options Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding and exercisable at January 28, 2024 375,525 $ 10.31 2.59 $ 7,448 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Jan. 28, 2024 | |
INCOME TAXES [Abstract] | |
Reconciliation of Effective Income Tax Rates from U.S. Statutory Tax Rates | The table below sets forth the primary reasons that our effective income tax rates differed from the U.S. statutory tax rates in effect during the three-month periods ended January 28, 2024, and January 29, 2023. Reporting Period U.S. Statutory Tax Rates Photronics Effective Tax Rates Primary Reasons for Differences Three months ended January 28, 2024 21.0% 27.3% Non-recognition of the tax benefit of losses that, in certain jurisdictions, have been offset by valuation allowances; non-U.S. pre-tax income being taxed at higher statutory rates in non-U.S. jurisdictions; and the establishment of uncertain tax positions in non-U.S. jurisdictions. Three months ended January 29, 2023 21.0% 30.3% Non-recognition of the tax benefit of losses that, in certain jurisdictions, have been offset by valuation allowances; non-U.S. pre-tax income being taxed at higher statutory rates in non-U.S. jurisdictions; and the establishment of uncertain tax positions in non-U.S. jurisdictions. |
Unrecognized Tax Benefits | The table below presents information on our unrecognized tax benefits as of the balance sheet dates. January 28, 2024 October 31, 2023 Unrecognized tax benefits related to uncertain tax positions $ 9,744 $ 8,908 Unrecognized tax benefits that, if recognized, would impact the effective tax rate $ 9,744 $ 8,908 Accrued interest and penalties related to uncertain tax positions $ 688 $ 576 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Jan. 28, 2024 | |
EARNINGS PER SHARE [Abstract] | |
Calculation of Basic and Diluted Earnings Per Share | The calculations of basic and diluted earnings per share are presented below. Three Months Ended January 28, 2024 January 29, 2023 Net income attributable to Photronics, Inc. shareholders $ 26,180 $ 13,986 Effect of dilutive securities - - Earnings used for diluted earnings per share $ 26,180 $ 13,986 Weighted-average common shares computations: Weighted-average common shares used for basic earnings per share 61,455 60,894 Effect of dilutive securities: Share-based payment awards 828 576 Potentially dilutive common shares 828 576 Weighted-average common shares used for diluted earnings per share 62,283 61,470 Basic earnings per share $ 0.43 $ 0.23 Diluted earnings per share $ 0.42 $ 0.23 |
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 28, 2024 January 29, 2023 Share-based payment awards 241 268 Total potentially dilutive shares excluded 241 268 |
CHANGES IN ACCUMULATED OTHER _2
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME BY COMPONENT (Tables) | 3 Months Ended |
Jan. 28, 2024 | |
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME BY COMPONENT [Abstract] | |
Changes in Accumulated Other Comprehensive (Loss) Income by Component | The following tables set forth the changes in our accumulated other comprehensive (loss) income by component (net of tax of $0) for the three-month periods ended January 28, 2024, and January 29, 2023. Three Months Ended January 28, 2024 Foreign Currency Translation Adjustments Other Total Balance at October 31, 2023 $ (88,044 ) $ (690 ) $ (88,734 ) Other comprehensive (loss) income 31,493 (27 ) 31,466 Other comprehensive (loss) income attributable to noncontrolling interests (10,609 ) 14 (10,595 ) Balance at January 28, 2024 $ (67,160 ) $ (703 ) $ (67,863 ) Three Months Ended January 29, 2023 Foreign Currency Translation Adjustments Other Total Balance at October 31, 2022 $ (97,790 ) $ (666 ) $ (98,456 ) Other comprehensive (loss) income 90,519 (54 ) 90,465 Other comprehensive (loss) income attributable to noncontrolling interests (16,466 ) 37 (16,429 ) Balance at January 29, 2023 $ (23,737 ) $ (683 ) $ (24,420 ) |
BASIS OF FINANCIAL STATEMENT _3
BASIS OF FINANCIAL STATEMENT PRESENTATION (Details) | 3 Months Ended |
Jan. 28, 2024 Facility | |
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 |
China [Member] | |
Manufacturing Facilities [Abstract] | |
Number of manufacturing facilities | 2 |
United States [Member] | |
Manufacturing Facilities [Abstract] | |
Number of manufacturing facilities | 3 |
Europe [Member] | |
Manufacturing Facilities [Abstract] | |
Number of manufacturing facilities | 2 |
ACCOUNT RECEIVABLES (Details)
ACCOUNT RECEIVABLES (Details) - USD ($) $ in Thousands | Jan. 28, 2024 | Oct. 31, 2023 |
ACCOUNT RECEIVABLES [Abstract] | ||
Accounts Receivable | $ 176,146 | $ 171,433 |
Unbilled Receivable | 28,551 | 24,593 |
Allowance for Credit Losses | (1,090) | (1,099) |
Total | $ 203,607 | $ 194,927 |
SHORT-TERM INVESTMENTS (Details
SHORT-TERM INVESTMENTS (Details) - Government securities [Member] - USD ($) $ in Thousands | Jan. 28, 2024 | Oct. 31, 2023 |
Available-for-sale [Abstract] | ||
Amortized Cost | $ 12,994 | $ 12,913 |
Unrealized Gains | 3 | 4 |
Unrealized Losses | (1) | (2) |
Carrying Value | $ 12,996 | $ 12,915 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jan. 28, 2024 | Oct. 31, 2023 |
INVENTORIES [Abstract] | ||
Raw materials | $ 49,669 | $ 48,948 |
Work in process | 1,000 | 1,010 |
Finished goods | 11 | 5 |
Inventories | $ 50,680 | $ 49,963 |
PROPERTY, PLANT, AND EQUIPMEN_3
PROPERTY, PLANT, AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 28, 2024 | Jan. 29, 2023 | Oct. 31, 2023 | |
Property, plant and equipment [Abstract] | |||
Property, plant and equipment, gross | $ 2,289,920 | $ 2,209,453 | |
Accumulated depreciation and amortization | (1,547,249) | (1,500,209) | |
Property, plant and equipment, net | 742,671 | 709,244 | |
Finance lease, Right-of-use asset [Abstract] | |||
Finance lease, right-of-use asset, gross | 42,817 | 42,820 | |
Accumulated amortization | (8,351) | (7,655) | |
Finance lease, right-of-use asset, net | 34,466 | 35,165 | |
Depreciation Expense [Abstract] | |||
Depreciation Expense | 20,605 | $ 19,028 | |
Land [Member] | |||
Property, plant and equipment [Abstract] | |||
Property, plant and equipment, gross | 11,537 | 11,378 | |
Buildings and Improvements [Member] | |||
Property, plant and equipment [Abstract] | |||
Property, plant and equipment, gross | 189,152 | 185,850 | |
Machinery and Equipment [Member] | |||
Property, plant and equipment [Abstract] | |||
Property, plant and equipment, gross | 1,968,318 | 1,922,041 | |
Leasehold Improvements [Member] | |||
Property, plant and equipment [Abstract] | |||
Property, plant and equipment, gross | 19,572 | 18,894 | |
Furniture, Fixtures and Office Equipment [Member] | |||
Property, plant and equipment [Abstract] | |||
Property, plant and equipment, gross | 16,985 | 15,856 | |
Construction in Progress [Member] | |||
Property, plant and equipment [Abstract] | |||
Property, plant and equipment, gross | $ 84,356 | $ 55,434 |
PDMCX JOINT VENTURE, VIE (Detai
PDMCX JOINT VENTURE, VIE (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2018 | Jan. 28, 2024 | Jan. 29, 2023 | Oct. 31, 2023 | |
Variable Interest Entity [Abstract] | ||||
Long-term debt | $ 2,655 | $ 17,998 | ||
Photronics and DNP [Member] | ||||
Variable Interest Entity [Abstract] | ||||
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 | |||
Number of business days for obtaining required approvals and clearance for exiting party | 3 days | |||
Net Income (Loss) from Operations [Abstract] | ||||
Net income from PDMCX | $ 6,463 | $ 5,918 | ||
Photronics and DNP [Member] | Minimum [Member] | ||||
Variable Interest Entity [Abstract] | ||||
Ownership percentage | 20% | |||
PDMCX [Member] | ||||
Variable Interest Entity [Abstract] | ||||
Long-term debt | $ 0 | |||
Photronics Interest [Member] | ||||
Variable Interest Entity [Abstract] | ||||
Ownership percentage | 50.01% | |||
DNP [Member] | ||||
Variable Interest Entity [Abstract] | ||||
Ownership percentage | 49.99% |
PDMCX JOINT VENTURE, Carrying A
PDMCX JOINT VENTURE, Carrying Amounts of Assets and Liabilities (Details) - USD ($) $ in Thousands | Jan. 28, 2024 | Oct. 31, 2023 |
Carrying Amounts of Assets and Liabilities [Abstract] | ||
Current assets | $ 807,677 | $ 785,450 |
Total assets | 1,582,836 | 1,526,221 |
Current liabilities | 185,289 | 185,223 |
Total liabilities | 235,782 | 250,612 |
Carrying Amount [Member] | ||
Carrying Amounts of Assets and Liabilities [Abstract] | ||
Current assets | 143,250 | 135,960 |
Noncurrent assets | 150,077 | 136,334 |
Total assets | 293,327 | 272,294 |
Current liabilities | 36,661 | 36,305 |
Noncurrent liabilities | 1,929 | 1,873 |
Total liabilities | 38,590 | 38,178 |
Net assets | 254,737 | 234,116 |
Photronics Interest [Member] | ||
Carrying Amounts of Assets and Liabilities [Abstract] | ||
Current assets | 71,639 | 67,994 |
Noncurrent assets | 75,054 | 68,181 |
Total assets | 146,693 | 136,175 |
Current liabilities | 18,334 | 18,156 |
Noncurrent liabilities | 965 | 937 |
Total liabilities | 19,299 | 19,093 |
Net assets | $ 127,394 | $ 117,082 |
DEBT, Long-term Debt (Details)
DEBT, Long-term Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jan. 28, 2024 | Oct. 31, 2023 | ||
Long-term Debt [Abstract] | |||
Long-term debt | $ 2,655 | $ 17,998 | |
Finance Leases [Member] | |||
Long Term Debt Maturing In Year One [Abstract] | |||
Next 12 months | 20,771 | 6,621 | |
Long-term Debt [Abstract] | |||
Months 13 - 24 | 2,632 | 17,972 | |
Months 25 - 36 | 12 | 12 | |
Months 37 - 48 | 11 | 13 | |
Months 49 - 60 | 0 | 1 | |
Long-term debt | 2,655 | 17,998 | |
Total debt | $ 23,426 | $ 24,619 | |
Periodic payment amount | Varies as Lease mature | Varies as Lease mature | |
Periodic payment frequency | Monthly | Monthly | |
Loan collateral (carrying amount) | [1] | $ 34,466 | $ 35,165 |
[1]Represents the carrying amount at the balance sheet date of the related ROU assets, in which the lessors have secured interests. |
DEBT, Finance Leases (Details)
DEBT, Finance Leases (Details) - USD ($) $ in Thousands | 1 Months Ended | |||
Feb. 28, 2021 | Jan. 31, 2021 | Jan. 28, 2024 | Dec. 31, 2020 | |
$7.2 Million Finance Lease [Member] | ||||
Finance Lease, [Abstract] | ||||
Finance lease contract term | 5 years | |||
Finance lease amount | $ 7,200 | |||
Early buyout option to purchase tool | $ 2,400 | |||
Finance lease interest implicit rate | 1.08% | |||
$7.2 Million Finance Lease [Member] | Monthly [Member] | ||||
Finance Lease, [Abstract] | ||||
Finance lease monthly payments | $ 100 | |||
$35.5 Million Finance Lease [Member] | ||||
Finance Lease, [Abstract] | ||||
Finance lease contract term | 5 years | |||
Finance lease amount | $ 35,500 | |||
Early buyout option to purchase tool | $ 14,100 | |||
Finance lease interest implicit rate | 1.58% | |||
$35.5 Million Finance Lease [Member] | First Three Months [Member] | ||||
Finance Lease, [Abstract] | ||||
Finance lease monthly payments | $ 40 | |||
$35.5 Million Finance Lease [Member] | Following Nine Months [Member] | ||||
Finance Lease, [Abstract] | ||||
Finance lease monthly payments | 600 | |||
$35.5 Million Finance Lease [Member] | Forty Eight Months [Member] | ||||
Finance Lease, [Abstract] | ||||
Finance lease monthly payments | 500 | |||
$35.5 Million Finance Lease [Member] | Minimum [Member] | ||||
Finance Lease, [Abstract] | ||||
Outstanding committed balance for cross default provision | $ 5,000 |
DEBT, Xiamen Working Capital Lo
DEBT, Xiamen Working Capital Loans (Details) - Xiamen Working Capital Loans [Member] ¥ in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | ||
Dec. 31, 2022 USD ($) | Dec. 31, 2022 CNY (¥) | Jan. 28, 2024 USD ($) | Nov. 30, 2018 USD ($) | |
Debt Instruments [Abstract] | ||||
Maximum borrowing capacity | $ 25 | |||
Expiration date | Jul. 31, 2024 | |||
Repayments of long-term debt | $ 3.6 | ¥ 25.6 | ||
Amount outstanding | $ 0 |
DEBT, Corporate Credit Agreemen
DEBT, Corporate Credit Agreement (Details) - Corporate Credit Agreement [Member] - USD ($) $ in Millions | 3 Months Ended | |
Jan. 28, 2024 | Sep. 30, 2018 | |
Debt Instruments [Abstract] | ||
Term of loan | 5 years | |
Current borrowing capacity | $ 50 | |
Maximum borrowing capacity | 100 | |
Cash limit for dividends, distributions and redemption on equity | $ 50 | |
Amount outstanding | $ 0 |
REVENUE, Contract Assets, Liabi
REVENUE, Contract Assets, Liabilities and Accounts Receivable (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 28, 2024 | Jan. 29, 2023 | Oct. 31, 2023 | |
Contract with Customer, Asset and Liability [Abstract] | |||
Impairment of credit losses on accounts receivable | $ 0 | $ 0 | |
Credit losses on accounts receivable | 0 | 0 | |
Contract liabilities | 20,788 | $ 22,419 | |
Change in Contract with Customer, Liability [Abstract] | |||
Revenue recognized from beginning liability | 5,507 | $ 7,638 | |
Other Current Assets [Member] | |||
Contract with Customer, Asset and Liability [Abstract] | |||
Contract assets | 12,376 | 10,984 | |
Accrued Liabilities [Member] | |||
Contract with Customer, Asset and Liability [Abstract] | |||
Contract liabilities | 8,968 | 9,965 | |
Other Liabilities [Member] | |||
Contract with Customer, Asset and Liability [Abstract] | |||
Contract liabilities | $ 11,820 | $ 12,454 | |
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 | ||
Customer order, extended satisfaction period | 2 months | ||
IC [Member] | Maximum [Member] | |||
Backlog of Orders [Abstract] | |||
Customer order, expected satisfaction period | 14 days | ||
Customer order, extended satisfaction period | 3 months | ||
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. 28, 2024 | Jan. 29, 2023 | ||
Disaggregation of Revenue [Abstract] | |||
Revenue | [1] | $ 216,334 | $ 211,090 |
IC [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue | 157,589 | 156,589 | |
High-end [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue | 60,875 | 48,003 | |
Mainstream [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue | 96,714 | 108,586 | |
FPD [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue | 58,745 | 54,501 | |
High-end [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue | 50,616 | 45,691 | |
Mainstream [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue | 8,129 | 8,810 | |
Taiwan [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue | [1] | 74,965 | 75,569 |
China [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue | [1] | 58,137 | 58,932 |
Korea [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue | [1] | 40,335 | 37,832 |
United States [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue | [1] | 32,733 | 29,881 |
Europe [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue | [1] | 9,705 | 8,447 |
Other [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue | [1] | 459 | 429 |
Over Time [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue | 203,527 | 197,164 | |
At a Point in Time [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue | $ 12,807 | $ 13,926 | |
[1]This table disaggregates revenue by the location in which it was earned. |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||
Mar. 16, 2023 | Jan. 28, 2024 | Jan. 29, 2023 | Mar. 15, 2023 | |
Share-based Compensation [Abstract] | ||||
Maximum number of shares of common stock that may be issued (in shares) | 5,000,000 | 4,000,000 | ||
Additional shares available for issuance (in shares) | 1,000,000 | |||
Expense incurred | $ 2,573 | $ 1,821 | ||
Income tax benefits of share-based compensation | 99 | 155 | ||
Share-based compensation cost capitalized | 0 | 0 | ||
Cost of Goods Sold [Member] | ||||
Share-based Compensation [Abstract] | ||||
Expense incurred | 595 | 281 | ||
Selling, General and Administrative [Member] | ||||
Share-based Compensation [Abstract] | ||||
Expense incurred | 1,749 | 1,378 | ||
Research and Development [Member] | ||||
Share-based Compensation [Abstract] | ||||
Expense incurred | 229 | 162 | ||
Restricted Stock [Member] | ||||
Share-based Compensation [Abstract] | ||||
Expense incurred | $ 2,573 | $ 1,764 | ||
Restricted Stock [Abstract] | ||||
Number of shares granted in period (in shares) | 825,050 | 786,500 | ||
Weighted-average grant-date fair value of awards (in dollars per share) | $ 29.77 | $ 16.77 | ||
Shares outstanding at balance sheet date (in shares) | 1,634,315 | 1,374,422 | ||
Estimated Expenses Not Yet Incurred [Abstract] | ||||
Compensation cost not yet recognized | $ 31,426 | $ 18,526 | ||
Weighted-average amortization period for cost not yet recognized (in years) | 3 years 3 months 18 days | 3 years 2 months 12 days | ||
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] | ||||
Expense incurred | $ 0 | $ 1 | ||
Stock options activity [Abstract] | ||||
Contractual term | 10 years | |||
Number of options granted in period (in shares) | 0 | 0 | ||
Cash received from options exercised | $ 936 | $ 563 | ||
Estimated Expenses Not Yet Incurred [Abstract] | ||||
Compensation cost not yet recognized | $ 0 | 0 | ||
Outstanding and exercisable option awards [Roll Forward] | ||||
Outstanding at end of period (in shares) | 375,525 | |||
Exercisable at end of period (in shares) | 375,525 | |||
Weighted-Average Exercise Price [Abstract] | ||||
Outstanding at end of period (in dollars per share) | $ 10.31 | |||
Exercisable at end of period (in dollars per share) | $ 10.31 | |||
Weighted-Average Remaining Contractual Life (in years) [Abstract] | ||||
Outstanding at end of period | 2 years 7 months 2 days | |||
Exercisable at end of period | 2 years 7 months 2 days | |||
Aggregate Intrinsic Value [Abstract] | ||||
Outstanding at end of period | $ 7,448 | |||
Exercisable at end of period | $ 7,448 | |||
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 | |||
Employee Stock Purchase Plan [Member] | ||||
Share-based Compensation [Abstract] | ||||
Expense incurred | $ 0 | $ 56 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 28, 2024 | Jan. 29, 2023 | Oct. 31, 2023 | |
Effective Income and Statutory Tax Rates [Abstract] | |||
U.S. statutory tax rates | 21% | 21% | |
Effective tax rates | 27.30% | 30.30% | |
Income Tax Examination [Abstract] | |||
Earliest open tax year | 2018 | ||
Unrecognized Tax Benefits [Abstract] | |||
Unrecognized tax benefits related to uncertain tax positions | $ 9,744 | $ 8,908 | |
Unrecognized tax benefits that, if recognized, would impact the effective tax rate | 9,744 | 8,908 | |
Accrued interest and penalties related to uncertain tax positions | $ 688 | $ 576 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Jan. 28, 2024 | Jan. 29, 2023 | |
Calculation of Basic and Diluted Earnings Per Share [Abstract] | ||
Net income attributable to Photronics, Inc. shareholders | $ 26,180 | $ 13,986 |
Effect of dilutive securities | 0 | 0 |
Earnings used for diluted earnings per share | $ 26,180 | $ 13,986 |
Weighted-average Common Shares Computations [Abstract] | ||
Weighted-average common shares used for basic earnings per share (in shares) | 61,455 | 60,894 |
Effect of Dilutive Securities [Abstract] | ||
Share-based payment awards (in shares) | 828 | 576 |
Potentially dilutive common shares (in shares) | 828 | 576 |
Weighted-average common shares used for diluted earnings per share (in shares) | 62,283 | 61,470 |
Basic earnings per share (in dollars per share) | $ 0.43 | $ 0.23 |
Diluted earnings per share (in dollars per share) | $ 0.42 | $ 0.23 |
Antidilutive Securities [Abstract] | ||
Total potentially dilutive shares excluded (in shares) | 241 | 268 |
Share-based Payment Awards [Member] | ||
Antidilutive Securities [Abstract] | ||
Total potentially dilutive shares excluded (in shares) | 241 | 268 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | 1 Months Ended | 3 Months Ended | |
Nov. 30, 2022 USD ($) | Jan. 28, 2024 USD ($) | May 01, 2022 USD ($) Operation | |
Commitment and Contingencies [Abstract] | |||
Outstanding commitments for capital expenditure | $ 142.2 | ||
Period of audit | 3 years | ||
Contingency loss recorded | $ 2.2 | ||
Reversal of loss contingency accrual | $ 1 | ||
Minimum [Member] | |||
Commitment and Contingencies [Abstract] | |||
Range of estimated contingency loss | 2.2 | ||
Maximum [Member] | |||
Commitment and Contingencies [Abstract] | |||
Range of estimated contingency loss | $ 3.7 | ||
China [Member] | |||
Commitment and Contingencies [Abstract] | |||
Number of operations | Operation | 1 |
CHANGES IN ACCUMULATED OTHER _3
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME BY COMPONENT (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 28, 2024 | Jan. 29, 2023 | |
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME BY COMPONENT [Abstract] | ||
Other comprehensive income, tax | $ 0 | $ 0 |
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||
Beginning Balance | 975,008 | |
Ending Balance | 1,022,956 | |
Accumulated Other Comprehensive Income [Member] | ||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||
Beginning Balance | (88,734) | (98,456) |
Ending Balance | (67,863) | (24,420) |
Foreign Currency Translation Adjustments [Member] | ||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||
Beginning Balance | (88,044) | (97,790) |
Ending Balance | (67,160) | (23,737) |
Other [Member] | ||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||
Beginning Balance | (690) | (666) |
Ending Balance | (703) | (683) |
AOCI Including Portion Attributable to Noncontrolling Interest [Member] | ||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||
Other comprehensive (loss) income | 31,466 | 90,465 |
Foreign Currency Translation Adjustments [Member] | ||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||
Other comprehensive (loss) income | 31,493 | 90,519 |
Other [Member] | ||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||
Other comprehensive (loss) income | (27) | (54) |
AOCI Attributable to Noncontrolling Interest [Member] | ||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||
Other comprehensive (loss) income attributable to noncontrolling interests | (10,595) | (16,429) |
Foreign Currency Translation Adjustments [Member] | ||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||
Other comprehensive (loss) income attributable to noncontrolling interests | (10,609) | (16,466) |
Other [Member] | ||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||
Other comprehensive (loss) income attributable to noncontrolling interests | $ 14 | $ 37 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Jan. 28, 2024 | Oct. 31, 2023 |
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 Thousands, $ in Millions | 3 Months Ended | ||
Jan. 28, 2024 | Jan. 29, 2023 | Sep. 30, 2020 | |
September 2020 Announced Program [Member] | |||
Share Repurchase Program [Abstract] | |||
Stock repurchased authorized amount | $ 100 | ||
Stock repurchase program - commencement date | Sep. 16, 2020 | ||
Amount remaining under authorization for purchase of additional shares | $ 31.7 | ||
Share Repurchase Programs [Member] | |||
Share Repurchase Program [Abstract] | |||
Number of shares repurchased (in shares) | 0 | 0 |