Photronics (PLAB) 8-K Photronics Announces Record Second Quarter Revenues

Exhibit 99.1

FOR FURTHER INFORMATION:   Michael W. McCarthy Vice President – Corporate Communications Photronics, Inc. (203)775-9000 mmccarthy@brk.photronics.com

Press Release

FOR IMMEDIATE RELEASE

Tuesday, May 16, 2006

PHOTRONICS ANNOUNCES RECORD SECOND QUARTER REVENUES

Second Quarter Highlights:

• Net revenues of $119.5 million set new quarterly record

• Earnings of $0.12 per diluted share includes the impact of the $0.22 per diluted share charge related to North American restructuring charges and $0.04 from gains on sales of certain investments

BROOKFIELD, Connecticut May 16, 2006 — Photronics, Inc. (Nasdaq:PLAB), a worldwide leader in supplying innovative imaging technology solutions for the global electronics industry, today reported fiscal 2006 second quarter and six month results for the period ended April 30, 2006.

Sales for the quarter were a record $119.5 million, up 5.8%, compared to $112.9 million for the second quarter of 2005. Net income for the second quarter of fiscal 2006 amounted to $5.3 million, or $0.12 per diluted share, compared to the prior year’s second quarter net income of $10.6 million, or $0.28 per diluted share. Net income for the second quarter of 2006 included: a charge of $11.4 million after tax, or $0.22 per diluted share in connection with the Company’s previously disclosed restructuring of its operations in North America; and a gain on sales of certain investments of $2.2 million after tax, or $0.04 per diluted share.

Sales for the first six months of 2006 were $231.4 million, up 8.1% from the $214.1 million for the first half of fiscal 2005. Net income for the first six months of fiscal 2006 amounted to $15.0 million, or $0.34 per diluted share, compared to the prior year’s first six months net income of $15.1 million, or $0.41 per diluted share.

Michael J. Luttati, Chief Executive Officer commented, “We are very pleased with our second quarter performance which builds on the momentum we started in Q1. Revenue growth coupled with continued cost control discipline resulted in solid bottom line performance despite the restructuring charges we incurred as a result of our decision to close our Austin facility. Our efforts in the second quarter go beyond just the numbers as we initiated several key strategic actions that are transforming the Company toward achieving our goal of profitable technology leadership. First, we held the grand

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Photronics, Inc.    15 Secor Road  •  Brookfield, Connecticut 06804  •  (203)775-9000  •  www.photronics.com

PHOTRONICS ANNOUNCES RECORD SECOND QUARTER REVENUES PAGE TWO

opening of our state-of-the-art flat panel mask production facility in Taichung, Taiwan. With the display industry in Taiwan aggressively investing in advanced large screen process technologies, Photronics has strengthened its competitive and leadership position there, complimenting our already strong position in serving customers in Korea.”

“Next we acted on the closure of our Austin facility. In addition to the cost savings associated with closing this underutilized facility, the redeployment of advanced manufacturing systems will enable Photronics to support a larger number of our customers requiring 90 nanometer process technologies. And finally, our most recent announcement regarding the MP Mask Technology Center, LLC represents the center piece of our 45 nanometer and below technology development strategy. This partnership with Micron Technology is one that we believe will provide the best long-term solution in serving our technology development needs and puts us in a very attractive competitive position for share gains in the high-end integrated circuit mask market.”

A conference call with investors and the media to discuss these results can be accessed by logging onto Photronics’ web site atwww.photronics.com, then clicking on the “Conference Calls” button in the top right corner of the home page. The call is scheduled for 8:30 a.m. Eastern Time on Wednesday, May 17^th and will be archived for instant replay access until the Company reports its fiscal third quarter results after the market closes on Tuesday, August 15, 2006. The live call dial-in number is (212)676-5290.

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Photronics is a leading worldwide manufacturer of photomasks. Photomasks are high precision quartz plates that contain microscopic images of electronic circuits. A key element in the manufacture of semiconductors and flat panel displays, photomasks are used to transfer circuit patterns onto semiconductor wafers and flat panel substrates during the fabrication of integrated circuits, a variety of flat panel displays and, to a lesser extent, other types of electrical and optical components. They are produced in accordance with product designs provided by customers at strategically located manufacturing facilities in Asia, Europe, and North America. Additional information on the Company can be accessed at www.photronics.com.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Certain statements in this release are considered “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All forward looking statements involve risks and uncertainties. In particular, any statement contained in this release regarding the consummation and benefits of future acquisitions, expectations with respect to the joint venture, the planned fabrication facility, future sales, financial performance, operating efficiencies and product expansion, are subject to known and unknown risks, uncertainties and contingencies, many of which are beyond the control of the Company. These factors may cause actual results, performance or achievements to differ materially from anticipated results, performances or achievements. Factors that might affect such forward looking statements include, but are not limited to, overall economic and business conditions; the demand and receipt of orders for the Company’s products; competitive factors in the industries and geographic markets in which the Company competes; changes in federal, state and foreign tax requirements (including tax rate changes, new tax laws and revised tax law interpretations); the Company’s ability to place new equipment in service on a timely basis; interest rate fluctuations and other capital market conditions, including foreign currency rate fluctuations; economic and political conditions in international markets; the ability to obtain a new bank facility or other financings; the ability to achieve anticipated synergies and other cost savings in connection with acquisitions and productivity programs; uncertainties with respect to the integration and management of a new joint venture, delays in the construction and equipping of the planned fabrication facility, the ability to transfer licensed applications to other applications, the timing, impact and other uncertainties of future acquisitions and investments; the seasonal and cyclical nature of the semiconductor industry; the availability of capital; management changes; damage or destruction to our facilities by natural disasters, labor strikes, political unrest or terrorist activity; the ability to fully utilize its tools; the ability of the Company to receive desired yields, pricing, product mix, and market acceptance of its products; changes in technology; and other risks and uncertainties set forth in the Company’s SEC filings from time to time. Any forward-looking statements should be considered in light of these factors. The Company assumes no obligation to update the information in this release.

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Photronics, Inc.    15 Secor Road  •  Brookfield, Connecticut 06804  •  (203)775-9000  •  www.photronics.com

PHOTRONICS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(in thousands, except per share amounts)

	Three Months Ended						Six Months Ended
	April 30 2006			May 1 2005			April 30 2006			May 1 2005
Net sales	$	119,471		$	112,893		$	231,419		$	214,076
Costs and expenses:
Cost of sales		77,663			74,457			153,428			143,640
Selling, general and administrative		15,726			13,521			30,914			26,239
Research and development		7,993			8,120			16,243			15,895
Consolidation, restructuring and related charges		11,426			—			11,426			—
Operating income		6,663			16,795			19,408			28,302
Other income (expense), net		3,792			(2,057	)		5,564			(5,081	)
Income before income taxes and minority interest		10,455			14,738			24,972			23,221
Income tax provision		3,814			2,617			7,632			4,452
Income before minority interest		6,641			12,121			17,340			18,769
Minority interest		(1,376	)		(1,547	)		(2,382	)		(3,650	)
Net income	$	5,265		$	10,574		$	14,958		$	15,119
Earnings per share:
Basic	$	0.13		$	0.32		$	0.36		$	0.46
Diluted	$	0.12		$	0.28		$	0.34		$	0.41
Weighted average number of common shares outstanding:
Basic		41,334			32,817			41,325			32,760
Diluted		50,987			42,398			50,966			42,346

PHOTRONICS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands)

	April 30 2006		October 30 2005
Assets
Current assets:
Cash, cash equivalents and short-term investments of $76,984 in 2006 and $90,600 in 2005	$	279,866	$	286,649
Accounts receivable		76,891		70,006
Inventories		26,801		20,536
Other current assets		10,298		7,144
Total current assets		393,856		384,335
Property, plant and equipment, net		445,804		412,429
Goodwill		133,813		136,334
Other assets		21,810		12,631
	$	995,283	$	945,729
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of long-term debt	$	86,612	$	4,813
Accounts payable		44,773		42,923
Other accrued liabilities		40,447		36,042
Total current liabilities		171,832		83,778
Long-term debt		162,287		238,949
Deferred income taxes and other liabilities		18,848		15,310
Minority interest		44,662		45,817
Shareholders’ equity		597,654		561,875
	$	995,283	$	945,729

PHOTRONICS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(in thousands)

	Six Months Ended
	April 30 2006			May 1 2005
Cash flows from operating activities:
Net income	$	14,958		$	15,119
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		44,921			42,967
Restructuring and related charges		11,426			—
Changes in assets and liabilities and other		(21,150	)		6,522
Net cash provided by operating activities		50,155			64,608
Cash flows from investing activities:
Purchases of property, plant and equipment		(56,572	)		(38,091	)
Purchases of short-term investments		(32,819	)		(37,895	)
Proceeds from sales of short-term investments and other		47,877			54,019
Acquisition of additional interest in PK Ltd.		(8,432	)		(40,350	)
Net cash used in investing activities		(49,946	)		(62,317	)
Cash flows from financing activities:
Proceeds from (repayment of) long-term debt		4,564			(56,193	)
Proceeds from issuance of common stock		730			2,199
Net cash provided by (used in) financing activities		5,294			(53,994	)
Effect of exchange rate changes on cash flows		1,330			771
Net increase (decrease) in cash and cash equivalents		6,833			(50,932	)
Cash and cash equivalents, beginning of period		196,049			142,300
Cash and cash equivalents, end of period	$	202,882		$	91,368
Supplemental disclosure of cash flow information:
Change in accrual for purchases of property, plant and equipment	$	8,993		$	(6,319	)