Exhibit No. 99.1
For Further Information:
At The Company
Michael W. McCarthy
Director - Investor Relations & Corporate Communications
(203)775-9000
mmccarthy@brk.photronics.com
www.photronics.com
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FOR IMMEDIATE RELEASE
March 14, 2000
Photronics Restructures Global Photomask Manufacturing Network
Streamlined Operations Improve Capacity Utilization, Increase
Productivity & Customer Service
JUPITER, Florida March 14, 2000 -- Photronics, Inc.
(Nasdaq:PLAB), the world's leading photomask supplier, today
announced that it is restructuring its global photomask
manufacturing network by consolidating facilities in California and
Switzerland. The restructuring plan is focused on increasing the
Company's capacity utilization, manufacturing efficiencies and
customer service, while also controlling operating costs. In
addition, the Company's restructuring efforts will facilitate the
merger with Align-Rite International (Nasdaq:MASK), which remains
subject to approval of Align-Rite's shareholders and the United
States Department of Justice. An after tax charge of between $9.0
million and $11.0 million, or $0.38 to $0.46 per diluted share,
will be taken in the second quarter of fiscal 2000 in connection
with the restructuring, of which about 75% will be non-cash asset
write-downs. The Company expects to recover the restructuring
charges in less than two years as a result of increased
manufacturing efficiencies and lower operating costs. Additional
financial terms were not disclosed.
James R. Northup, President stated, "The global photomask
market continues to be very competitive, particularly for those
technologies at and above 0.35 micron. Our decision to restructure
at this time is driven by the need to eliminate overlapping
capacity at those technologies, thereby improving manufacturing
efficiencies and capacity utilization, enhancing customer service,
and increasing shareholder value. Furthermore, our restructuring
plan will allow Photronics to focus resources on continuing our
momentum to service a growing global market as integrated circuit
designers continue to transition toward smaller circuit features
that improve the performance and functionality of their latest
devices." Mr. Northup also emphasized that the Company's plans
take into consideration the Company's global manufacturing
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Photronics Restructures...............................Page Two
strategies, as well as other synergies to be realized as a result
of the Company's new presence in Taiwan and the merger with Align-
Rite.
In California, the Sunnyvale facility will be closed and
customers being served from this location will be transitioned into
Photronics' other mature technology divisions in Arizona and
Connecticut. This transition is part of a longer term plan to
relocate its Northern California operations to a new facility in
the Silicon Valley region which will be outfitted to focus on
servicing the semiconductor industry's demanding requirements for
high-end, 0.18 micron and below photomask technologies and
services. Currently, Milpitas and Sunnyvale combined employ
approximately 300 people, which are being reduced to approximately
175 engineers, manufacturing technicians and various administrative
support personnel. Barry Rockwell, Vice President of Austin & Mesa
Operations, has been assigned to oversee the day-to-day operations
in California during the transition period and will continue to
report to Paul Fego, Senior Vice President of North American
Operations. "Barry has done an excellent job in Arizona and Texas,
including the construction and production ramp of the Austin
facility. His leadership in California will insure a smooth
transition for everyone involved," added Mr. Northup.
Certain research and development activities will still be
conducted at the Milpitas site, utilizing its high-end capabilities
to work with customers developing wafer processing technologies for
their next generation devices. These efforts will be coordinated
with the Company's R&D team which is largely located in the Allen
and Austin, Texas facilities, two of the most advanced photomask
manufacturing operations in the world. The Mature Products Group,
which had been headquartered in Sunnyvale, California since 1998,
will transition customers requiring mature photomask technologies
to the Phoenix, Arizona and Brookfield, Connecticut operations.
The tool sets in each of these facilities will be optimized to
address the increased unit volumes resulting from the consolidation
in California.
Operations in Neuchatel, Switzerland will be consolidated into
Photronics' existing facilities in Dresden, Germany and Manchester,
England. A sales staff and service team will maintain a presence
in Switzerland in order to continue servicing the local customer
base. The Company's restructuring strategy will affect less than
10 people in Neuchatel. John Smith, Vice President of European
Operations will lead each of the affected European sites through
the transition period. "John has handled similar restructuring
situations such as this successfully throughout his career in the
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Photronics Restructures.................................Page Three
semiconductor industry. His leadership and experience are going to
be major assets to our employees and customers during this period,"
noted Mr. Northup.
Photronics has prepared a variety of programs to offer
employment alternatives within the organization through transfers
to other facilities. In addition, the Company will provide
severance packages to those employees who have served the
organization loyally and will provide assistance to them in finding
new employment in the regions being affected by the restructuring
plan.
A conference call with the investment community and the media
can be accessed by logging onto Photronics' web site at
www.photronics.com and navigating to the Investor Relations page.
The call is scheduled for 10:00 a.m. Eastern Standard Time on
Tuesday, March 14th will be archived for instant replay access
until 5:00 p.m. Eastern Standard Time on Friday, March 17, 2000.
# # #
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, photomasks are
used to transfer circuit patterns onto semiconductor wafers during the
fabrication of integrated circuits. They are produced in accordance with
circuit 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: Except for historical information, the matters discussed in this news
release that may be considered forward-looking statements may be subject to
certain risks and uncertainties that could cause the actual results to
differ materially from those projected, including uncertainties in the
market, pricing competition, procurement and manufacturing efficiencies, and
other risks detailed from time to time in the Company's SEC reports. The
Company assumes no obligation to update the information in this release.