<Page>

                        SECURITES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q



      (Mark One)
[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the quarterly period ended        July 31, 2001
                                            OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the transition period from ____________to___________

                       Commission file number  0-15451
                                               -------

                                 PHOTRONICS, INC
                              ---------------------
             (Exact name of registrant as specified in its charter)

         CONNECTICUT                                           06-0854886
      -----------------                                     ----------------
State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                             Identification No.)

 1061 EAST INDIANTOWN ROAD, JUPITER, FL                           33477
- ----------------------------------------                       ----------
(Address of principal executive offices)                       (Zip Code)

                                 (561) 745-1222
                              --------------------
              (Registrant's telephone number, including area code)


               --------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter periods that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes   X   No
                                        ---      ---

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.


<Table>
<Caption>

         Class                                    Outstanding at August 23, 2001
                                               
COMMON STOCK, $.01 PAR VALUE                              29,991,000 SHARES

</Table>

<Page>



                                PHOTRONICS, INC.
                                AND SUBSIDIARIES


                                      INDEX


<Table>
<Caption>

                                                                                PAGE
                                                                          
PART I.           FINANCIAL INFORMATION

Item 1.           Condensed Consolidated Financial Statements

                  Condensed Consolidated Balance Sheet
                  at July 31, 2001 (unaudited) and
                  October 31, 2000                                              3 - 4

                  Condensed Consolidated Statement of
                  Operations for the Three and Nine Months
                  Ended July 31, 2001 (unaudited) and
                  July 31, 2000 (unaudited)                                         5

                  Condensed Consolidated Statement of
                  Cash Flows for the Nine Months Ended
                  July 31, 2001 (unaudited) and
                  July 31, 2000 (unaudited)                                         6

                  Notes to Condensed Consolidated
                  Financial Statements (unaudited)                             7 - 10

Item 2.           Management's Discussion and Analysis
                  of Results of Operations and
                  Financial Condition                                         10 - 15


PART II.          OTHER INFORMATION

Item 6.           Exhibits and Reports                                             15

</Table>

<Page>

PART I.  FINANCIAL INFORMATION

ITEM I.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                        PHOTRONICS, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEET
                                 (IN THOUSANDS)

                                     ASSETS


<Table>
<Caption>

                                                                    JULY 31,       OCTOBER 31,
                                                                      2001             2000
                                                                  -----------      -----------
                                                                  (UNAUDITED)
                                                                             
Current assets:

         Cash, cash equivalents
          and short term investments                               $  24,706       $  38,182


         Accounts receivable (less allowance
          for doubtful accounts of $771
          in 2001 and $881 in 2000)                                   63,110          64,019

         Inventories                                                  18,028          18,486

         Deferred income taxes and
          other current assets                                        24,604          17,906
                                                                   ---------       ---------
            Total current assets                                     130,448         138,593

Property, plant and equipment
 (less accumulated depreciation of $269,883
  in 2001 and $231,426 in 2000)                                      347,637         395,281

Intangible assets (less accumulated
 amortization of $12,600 in 2001 and
 $9,373 in 2000)                                                      50,026          59,277

Investments and other assets                                          49,310          16,410
                                                                   ---------       ---------
                                                                   $ 577,421       $ 609,561
                                                                   =========       =========

</Table>

See accompanying notes to condensed consolidated financial statements.


                                       3

<Page>



                        PHOTRONICS, INC. AND SUBISIDARIES

                      CONDENSED CONSOLIDATED BALANCE SHEET
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                      LIABILITIES AND SHAREHOLDERS' EQUITY

<Table>
<Caption>

                                                        JULY 31,         OCTOBER 31,
                                                          2001               2000
                                                       ----------        -----------
                                                       (UNAUDITED)
                                                                   

Current liabilities:
    Current portion of long-term debt                   $    52            $    849
    Accounts payable                                     31,443              37,917
    Accrued salaries and wages                            6,598               5,264
    Other accrued liabilities                            14,576               7,539
                                                       --------            --------
         Total current liabilities                       52,669              51,569

Long-term debt                                          166,839             202,797

Deferred income taxes and other liabilities              38,121              34,089
                                                       --------            --------
         Total liabilities                              257,629             288,455
                                                       --------            --------

Minority interest                                        33,161              27,126

Commitments and contingencies

Shareholders' equity:
    Preferred stock, $0.01 par value,
       2,000 shares authorized,
       none issued and outstanding                            -                   -

    Common stock, $0.01 par value,
       75,000 shares authorized, 29,974 shares
       issued and outstanding in 2001 and 29,688
       issued and outstanding in 2000                      300                  297

    Additional paid-in capital                         141,874              136,445

    Retained earnings                                  161,232              167,246

    Accumulated other comprehensive loss               (16,775)              (9,877)

    Deferred compensation on restricted stock                -                 (131)
                                                      --------             --------
         Total shareholders' equity                    286,631              293,980
                                                      --------             --------
                                                      $577,421             $609,561
                                                      ========             ========

</Table>

See accompanying notes to condensed consolidated financial statements.


                                       4
<Page>

                        PHOTRONICS, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                   (UNAUDITED)

<Table>
<Caption>
                                                   THREE MONTHS ENDED                NINE MONTHS ENDED
                                                -------------------------          ----------------------
                                                 JULY 31,       JULY 31,            JULY 31,     JULY 31,
                                                   2001           2000                2001        2000
                                                ----------     ----------          ----------   ---------
                                                                                    
Net sales                                       $ 85,016        $ 85,595           $284,145     $234,540

Costs and expenses:

   Cost of sales                                  60,569          56,676            188,033       158,143

   Selling, general and administrative            12,979          11,485             39,590        32,913

   Research and development                        6,250           5,319             18,236        15,056
   Consolidation, restructuring and
     related charges                                   -           5,500             38,100        23,000
                                                 -------        --------            -------       -------
Operating income                                   5,218           6,615                186         5,428

Other expenses, net                               (2,080)         (1,857)            (6,693)       (3,241)
                                                 -------        --------            -------       -------
   Income (loss) before income taxes
    and minority interest                          3,138           4,758             (6,507)        2,187

Provision (benefit) for income taxes                 500           1,600             (4,000)          800
                                                 -------        --------            -------       -------
   Income (loss) before minority interest          2,638           3,158             (2,507)        1,387

Minority interest in income of
  consolidated subsidiary                           (861)              -             (3,505)           -
                                                 -------         -------            --------      -------

Net income (loss)                                $ 1,777         $ 3,158            $(6,012)      $ 1,387
                                                 =======         =======            =======       =======

Earnings (loss) per share:

    Basic                                         $ 0.06         $  0.11            $ (0.20)       $ 0.05
                                                  ======         =======            =======        ======

    Diluted                                       $ 0.06         $  0.11            $ (0.20)       $ 0.05
                                                  ======         =======            =======        ======

Weighted average number of common
    shares outstanding:

    Basic                                         29,972          29,148             29,865        28,466
                                                  ======          ======             ======        ======

    Diluted                                       29,972          29,148             29,865        28,466
                                                  ======          ======             ======        ======

</Table>

See accompanying notes to condensed consolidated financial statements.


                                       5
<Page>


                        PHOTRONICS, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (IN THOUSANDS)

                                   (UNAUDITED)

<Table>
<Caption>
                                                                   NINE MONTHS ENDED
                                                          ---------------------------------
                                                           JULY 31,               JULY 31,
                                                             2001                  2000
                                                          -----------           -----------
                                                                          

Cash flows from operating activities:
   Net income (loss)                                       $(6,012)               $ 1,387

   Adjustment to reconcile net income (loss) to net
     cash provided by operating activities:
       Depreciation and amortization                        54,779                 38,817
       Deferred taxes and other                             (5,312)                (5,310)
       Consolidation, restructuring and related charges     38,100                 17,500
       Changes in assets and liabilities:
           Accounts receivable                                 887                   (914)
           Inventories                                         476                   (583)
           Other current assets                                820                  2,606
           Accounts payable and accrued liabilities          5,574                (34,317)
                                                           -------                -------
Net cash provided by operating activities                   89,312                 19,186
                                                           -------                -------
Cash flows from investing activities:
   Investment in photomask operations                      (33,798)               (34,782)
   Deposits on and purchases of property,
     plant and equipment                                   (38,570)               (26,918)
   Other                                                     4,042                  3,584
                                                           -------                -------
Net cash used in investing activities                      (68,326)               (58,116)
                                                           -------                -------
Cash flows from financing activities:
   Borrowings (repayments) of long term debt               (36,664)                41,583
   Proceeds from issuance of common stock                    5,973                 28,856
                                                           -------                -------
Net cash (used in) provided by financing activities        (30,691)                70,439
                                                           -------                -------
Effect of exchange rate changes on cash flows               (3,771)                  (878)
                                                           -------                -------
Net increase (decrease) in cash and cash equivalents       (13,476)                30,631
Cash and cash equivalents at beginning of period            38,182                 23,115
Adjustment related to Align-Rite's net cash flows
   from differences in fiscal reporting periods                  -                 (3,474)
                                                           -------                -------
Cash and cash equivalents at end of period                 $24,706                $50,272
                                                           =======                =======

Cash paid during the period for:
    Interest                                               $ 9,164                $ 7,776
    Income taxes                                           $   239                $   192

</Table>

See accompanying notes to condensed consolidated financial statements.


                                       6
<Page>


                        PHOTRONICS, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JULY 31, 2001
                                   (UNAUDITED)

NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION

         The accompanying unaudited Condensed Consolidated Financial Statements
have been prepared in accordance with accounting principles generally accepted
in the United States for interim financial information and with the instructions
to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three and nine months ended July 31, 2001 are not necessarily
indicative of the results that may be expected for the year ending October 31,
2001. Certain amounts in the Condensed Consolidated Financial Statements for
prior periods have been reclassified to conform to the current presentation. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's Annual Report on Form 10-K for the
year ended October 31, 2000.

NOTE 2 - COMPREHENSIVE INCOME (LOSS)

         The following table summarizes comprehensive income (loss) for the
three and nine months ended July 31, 2001 and 2000:

<Table>
<Caption>
                                                         THREE MONTHS ENDED            NINE MONTHS ENDED
                                                       ----------------------        ----------------------
                                                       JULY 31,      JULY 31,        JULY 31,      JULY 31,
                                                         2001          2000            2001          2000
                                                       --------      --------        --------      --------
                                                                                       
Net income (loss)                                      $ 1,777       $ 3,158         $ (6,012)     $  1,387

Other comprehensive income (loss):
  Unrealized gains (losses) on investments               4,112           (11)           2,621         5,466
  Foreign currency translation adjustments and other    (3,344)       (3,855)          (9,519)      (12,100)
                                                       -------       -------         --------      --------
                                                           768         3,866           (6,898)       (6,634)
                                                       -------       -------         --------      --------
                                                       $ 2,545       $  (708)        $(12,910)     $ (5,247)
                                                       =======       =======         ========      ========
</Table>

NOTE 3 - EARNINGS PER SHARE

         Earnings per share ("EPS") amounts are calculated in accordance with
the provisions of Statement of Financial Accounting Standards ("SFAS"), SFAS
No. 128. Basic EPS is based on the weighted average number of common shares
outstanding for the period, excluding any dilutive common share equivalents.
Diluted EPS reflects the potential dilution that could occur if securities or
other contracts to issue common stock were exercised or converted.

                                       7
<Page>

         A reconciliation of basic and diluted EPS for the three and nine months
ended July 31, 2001 and 2000, respectively, is as follows (in thousands, except
per share amounts):

<Table>
<Caption>
                                    NET              AVERAGE            EARNINGS
                                   INCOME            SHARES              (LOSS)
                                   (LOSS)          OUTSTANDING (b)      PER SHARE
                                  -------          -----------          ---------
                                                               
THREE MONTHS

2001:
Basic and diluted (a)             $ 1,777             29,972               0.06
                                  =======             ======               ====
2000:
Basic and diluted (a)             $ 3,158             29,148               0.11
                                  =======             ======               ====

NINE MONTHS

2001:
Basic and diluted (a)             $(6,012)            29,865              (0.20)
                                  =======             ======               ====
2000:
Basic and diluted (a)             $ 1,387             28,466               0.05
                                  =======             ======               ====
</Table>


         (a) The effect of the conversion of the convertible subordinated notes
and stock options for the three and nine months ended July 31, 2001 and 2000 is
anti-dilutive.

         (b) If the assumed conversion of convertible subordinated notes and
exercise of stock options had been dilutive the incremental additional shares
outstanding would have been 4,413 and 4,510 for the three and nine months
ended July 31, 2001, respectively, and 4,701 and 4,833 for the three and nine
months ended July 31, 2000, respectively.

NOTE 4 - CONSOLIDATION, RESTRUCTURING AND RELATED CHARGES

         In April 2001, the Company announced a plan ("the consolidation plan")
to consolidate its global photomask manufacturing network in order to increase
capacity utilization and manufacturing efficiencies, as well as to accelerate
the expansion of its world-class technology development. The Company initiated
the consolidation plan as the final phase of its June 2000 merger with
Align-Rite. Total consolidation and related charges associated with this plan of
$38.1 million were recorded in the second quarter of 2001. Of the total charge,
$30.6 million related to the consolidation plan and $7.5 million related to the
impairment of intangible assets.

         The significant components of the consolidation plan include the
closing of the former Align-Rite manufacturing facilities in Burbank,
California, Palm Bay, Florida and Heilbronn, Germany within twelve months. The
Company anticipates that the closing of these facilities will maximize capacity
utilization at its remaining facilities. In addition, the Company will be
relocating its Northern California operations to a new, state-of-the-art
manufacturing facility in the Silicon Valley region. As part of the plan, the
Company will reduce its work force by approximately 125 employees.

         The consolidation charge of $30.6 million includes: $4.0 million of
cash charges for severance benefits for terminated employees that will be paid
during their entitlement periods, principally during the fourth quarter of
2001; $4.5 million for facilities closings and lease termination costs that
will be expended

                                       8
<Page>

over the projected lease terms; and non-cash charges of $22.1 million that
approximate the carrying value of fixed assets that are primarily associated
with the consolidation plan based upon their expected disposition.

         The charges also included $7.5 million that are related to the
impairment in value of associated intangible assets. It was determined during
the period that such assets no longer had any future economic benefit to the
Company because the anticipated undiscounted cumulative cash flows from these
assets were insufficient to support their carrying value.

NOTE 5 - REVOLVING CREDIT AGREEMENT

         On June 12, 2001, the Company's $125 million unsecured revolving credit
facility was amended in order to modify certain financial covenants and
definitions in connection with the consolidation plan. The Company is subject to
compliance with and maintenance of certain financial covenants and ratios set
forth in the credit facility, as amended.


NOTE 6 - DERIVATIVE INSTURMENTS, HEDGING INSTRUMENTS AND HEDGING ACTIVITIES

         In June 1998, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities."
The new standard requires companies to record derivatives on the balance sheet
as assets or liabilities, measured at fair value. Gains or losses resulting from
changes in the values of those derivatives are reported in the Statement of
Operations or as Accumulated Other Comprehensive Income (Loss), a separate
component of Shareholders' Equity, depending on the use of the derivatives and
whether they qualify for hedge accounting. In order to qualify for hedge
accounting, the derivative must be highly effective in achieving offsetting
changes in fair value or cash flows of the hedged items during the term of the
hedge. The Company adopted SFAS No. 133, as amended by SFAS No. 138, in the
first quarter of fiscal year 2001.

         In fiscal year 2001, the Company entered into forward currency
contracts to purchase Japanese Yen to hedge the fair value of anticipated
transactions to purchase equipment to be settled in Japanese Yen in the next
12 months. Such derivatives have been designated and qualify as cash flow
hedging instruments and are reported at fair value. In general, the types of
risks hedged are those relating to the variability of future cash flows caused
by movements in foreign currency exchange rates. The Company documents its
risk management strategy and hedge effectiveness at the inception of and
during the term of each hedge. The Company has not recognized any net gains or
losses from its forward currency contracts, as these hedges are highly
effective, and the forecasted purchase of equipment will occur within the next
12 months. Therefore, any gains or losses are included in Accumulated Other
Comprehensive Income (Loss). Cash flow hedges of forecasted transactions
resulted in an aggregate debit balance of $775,000 in Accumulated Other
Comprehensive Income (Loss) at July 31, 2001. All forecasted transactions
currently being hedged are expected to occur within the next 12 months.

NOTE 7 - ACCOUNTING PRONOUNCEMENTS

         See "Effects of New Accounting Standards" in Item 2 "Management's
Discussion and Analysis of Results of Operations and Financial Condition"
elsewhere in this Form 10-Q.

                                       9
<Page>

NOTE 8 - SUBSEQUENT EVENT

         On August 21, 2001, the Company increased its equity investment in PKL
Co., Ltd. (PKL), a Korean photomask manufacturer, to approximately 51%. The
Company previously had an investment of approximately 35% in PKL after acquiring
300,000 shares of that Korean company in a tender offer in July 2001. Pursuant
to an agreement with certain shareholders of PKL, the Company may acquire an
additional 1,000,000 shares, or approximately 32% of PKL.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
         OF OPERATIONS AND FINANCIAL CONDITION

OVERVIEW

         On June 7, 2000, Photronics, Inc. ("Photronics" or the "Company"),
completed its merger with Align-Rite International, Inc. ("Align-Rite"), an
independent publicly traded manufacturer of photomasks in the United States and
Europe. The transaction was accounted for as a pooling-of-interests. The
Condensed Consolidated Financial Statements, the accompanying notes and this
management discussion and analysis have been restated to reflect the Company's
financial results of operations and cash flows as if Align-Rite was a
consolidated wholly-owned subsidiary of the Company for all periods presented.

         During fiscal year 2000, the Company acquired a majority share of
Precision Semiconductor Mask Corporation (PSMC), a photomask manufacturer based
in Taiwan, for approximately $63.4 million. The acquisition was accounted for as
a purchase. The operating results of PSMC have been included in the Condensed
Consolidated Statement of Operations since June 20, 2000.

         In April 2001, the Company announced a plan ("the consolidation plan")
to consolidate its global photomask manufacturing network in order to increase
capacity utilization and manufacturing efficiencies, as well as to accelerate
the expansion of its world-class technology development. The Company initiated
the consolidation plan as the final phase of its June 2000 merger with
Align-Rite. Total consolidation and related charges associated with this plan of
$38.1 million were recorded in the second quarter of 2001. Of the total charge,
$30.6 million related to the consolidation plan and $7.5 million related to the
impairment of intangible assets.

         The significant components of the consolidation plan include the
closing of the former Align-Rite manufacturing facilities in Burbank,
California, Palm Bay, Florida and Heilbronn, Germany within twelve months. The
Company anticipates that the closing of these facilities will maximize capacity
utilization at its remaining facilities. In addition, the Company will be
relocating its Northern California operations to a new, state-of-the-art
manufacturing facility in the Silicon Valley region. As part of the plan, the
Company will reduce its work force by approximately 125 employees.

         The consolidation charge of $30.6 million includes: $4.0 million of
cash charges for severance benefits for terminated employees that will be paid
over their entitlement periods, principally during the fourth quarter of 2001;
$4.5 million for facilities closings and lease termination costs that will be
expended over the projected lease terms; and non-cash charges of $22.1 million
that approximate the carrying value of fixed assets that are primarily
associated with the consolidation plan based upon their expected disposition.

                                      10
<Page>

         The charges also included $7.5 million that are related to the
impairment in value of associated intangible assets. It was determined during
the period that such assets no longer had any future economic benefit to the
Company because the anticipated undiscounted cumulative cash flows from these
assets were insufficient to support their carrying value.

         During March 2000, the Company implemented a plan to consolidate its
mature products group in order to increase capacity utilization, manufacturing
efficiencies and customer service activities worldwide. Total restructuring and
related charges associated with this plan of $17.5 million were recorded in the
second quarter of fiscal 2000. Of the total charge, $9.1 million related to
restructuring and $8.4 million related to the impairment of intangible assets.

MATERIAL CHANGES IN RESULTS OF OPERATIONS
THREE AND NINE MONTHS ENDED JULY 31, 2001 VERSUS JULY 31, 2000

         The following tables represent selected financial information,
expressed as a percentage of net sales, and pro forma earnings per diluted
share, respectively:

<Table>
<Caption>
                                            THREE MONTHS ENDED                      NINE MONTHS ENDED
                                        -------------------------               -------------------------
                                        JULY 31,         JULY 31,               JULY 31,         JULY 31,
                                         2001              2000                   2001             2000
                                       ---------         --------               --------         --------
                                                                                     
Net sales                               100.0%            100.0%                  100.0%           100.0%

Cost of sales                            71.2              66.2                    66.2             67.4
                                       -------           -------                 -------           -------
Gross margin                             28.8              33.8                    33.8             32.6

Selling, general and
   administrative expenses               15.3              13.4                    13.9             14.0

Research and development
     expenses                             7.4               6.2                     6.4              6.4
                                       -------           -------                 -------           -------
Operating income before
     consolidation, restructuring
     and related charges                  6.1%             14.2%                   13.5%            12.1%
                                       =======           =======                 =======           =======

Pro forma earnings (loss) per diluted share:

Net income, excluding consolidation,
 restructuring and related
 charges                               $  0.06           $  0.24                 $  0.67           $  0.57
                                       =======           =======                 =======           =======
</Table>

         Net sales for the three months ended July 31, 2001 decreased 0.7% to
$85.0 million as compared to $85.6 for the comparable prior year period. The
decrease was primarily related to the rapid cyclical downturn in the
semiconductor industry primarily in the United States. The decrease, however,
was partially mitigated by the inclusion of the Company's new Taiwan operation
in 2001. Net sales for the nine months ended July 31, 2001 increased 21.1% to
$284.1 million as compared to $234.5 million for the comparable prior year
period. The increase in 2001 is primarily related to the inclusion of Taiwan,
increases in unit volumes, market share, and higher average selling prices
resulting from an improved mix of high-end technology products. International
operations accounted for 40.0% and 37.1% of sales for the three and nine months
ended July 31, 2001, respectively, compared to 33.0% and 28.5% in the
corresponding prior year periods.


                                      11
<Page>

         Gross margins for the three months ended July 31, 2001 decreased to
28.8% from 33.8% for the comparable prior year period primarily as a result of
lower absorption of higher fixed costs associated with the downturn in the
semiconductor industry. Gross margins for nine months ended July 31, 2001
increased to 33.8% compared to 32.6% for the corresponding prior year period.
The gross margin increase was attributable to higher utilization of our fixed
equipment cost base, primarily during the first six months of 2001, as well as
a greater mix of higher margin products.

         Selling, general and administrative expenses increased 13.0% to $13.0
million and 20.3% to $39.6 million for the three and nine months ended July 31,
2001, respectively, compared with $11.5 million and $32.9 million for the same
periods in the prior fiscal year. As a percentage of net sales, selling, general
and administrative expenses were 15.3% and 13.9% in the three and nine month
periods ended July 31, 2001, respectively, compared with 13.4% and 14.0% for the
same periods in the prior fiscal year. The higher expenses for the three and
nine months ended July 31, 2001 were principally due to costs associated with
the Company's expansion, both domestically and internationally, including costs
incurred in Taiwan, and growth of the Company's information technology
infrastructure.

         Research and development expenses increased 17.5% to $6.3 million and
21.1% to $18.2 million for the three and nine months ended July 31, 2001,
respectively, compared with $5.3 million and $15.1 million for the same periods
in the prior fiscal year. As a percentage of net sales, research and development
expenses were 7.4% and 6.4%, respectively, compared with 6.2% and 6.4% for the
same periods in the prior fiscal year. This increase in costs reflects the
continuing development efforts of advanced, sub-wavelength reticle solutions,
primarily in the United States and Taiwan, and in Next Generation Lithography
(NGL) applications.

         Net other expenses of $2.1 million and $6.7 million for the three and
nine months ended July 31, 2001, respectively, increased $0.2 million and $3.5
million, respectively, as a result of higher interest costs, principally
resulting from borrowings in connection with the Company's investments in Asia.

         Minority interest for the three and nine months ended July 31, 2001 was
$0.9 million and $3.5 million, respectively, and reflects the minority interest
in earnings of the Company's subsidiary in Taiwan.

         Net income (loss) for the three and nine months ended July 31, 2001,
decreased to $1.8 million and ($6.0) million, respectively, or $0.06 and ($0.20)
per diluted share. These amounts compare to $3.2 million, or $0.11 per diluted
share, and $1.4 million, or $0.05 per diluted share, for the corresponding prior
year periods. Fiscal year 2001 includes the effect of the consolidation and
related charges amounting to $26.1 million after tax, or $0.75 per diluted
share. Fiscal year 2000 includes the effect of the restructuring and related
charges amounting to $14.8 million after tax, or $0.52 per diluted share.

LIQUIDITY AND CAPITAL RESOURCES

         The Company's working capital at July 31, 2001 was $77.8 million
compared to $87.0 million at October 31, 2000. The decrease in working capital
was due primarily to lower cash balances resulting from repayments of
borrowings under the Company's unsecured revolving credit line. Cash and cash
equivalents at July 31, 2001 were $24.7 million compared to $38.2 million at
October 31, 2000. Cash

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<Page>

provided by operating activities for the nine months ended July 31, 2001
amounted to $89.3 million compared to $19.2 million in the corresponding prior
year period. This increase is primarily attributable to higher income in 2001
before depreciation, amortization and restructuring charges and the net change
in working capital principally due to the timing of progress payments for
capital equipment coming due during the respective periods.

         Cash used in investing activities of $68.3 million for the nine months
ended July 31, 2001, consisted principally of capital equipment purchases and
additional investments in photomask operations in Asia.

         Cash used in financing activities of $30.7 million for the ninth months
ended July 31, 2001, included net repayments of borrowings of $36.7 million,
partially offset by $6.0 million of proceeds from the exercise of employee stock
options.

         On June 12, 2001, the Company's $125 million unsecured revolving credit
facility was amended in order to modify certain financial covenants and
definitions in connection with the consolidation plan. The Company is subject to
compliance with and maintenance of certain financial covenants and ratios set
forth in the credit facility, as amended. The Company had $41.6 million of
outstanding borrowings and $83.4 million available under the revolving credit
facility at July 31, 2001.

         In June 1998, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities."
The new standard requires companies to record derivatives on the balance sheet
as assets or liabilities, measured at fair value. Gains or losses resulting from
changes in the values of those derivatives are reported in the Statement of
Operations or as Accumulated Other Comprehensive Income (Loss), a separate
component of Shareholders' Equity, depending on the use of the derivatives and
whether they qualify for hedge accounting. In order to qualify for hedge
accounting, the derivative must be highly effective in achieving offsetting
changes in fair value or cash flows of the hedged items during the term of the
hedge. The Company adopted SFAS No. 133, as amended by SFAS No. 138, in the
first quarter of fiscal year 2001.

         In fiscal year 2001, the Company entered into forward currency
contracts to purchase Japanese Yen to hedge the fair value of anticipated
transactions to purchase equipment to be settled in Japanese Yen in the next
12 months. Such derivatives have been designated and qualify as cash flow
hedging instruments and are reported at fair value. In general, the types of
risks hedged are those relating to the variability of future cash flows caused
by movements in foreign currency exchange rates. The Company documents its
risk management strategy and hedge effectiveness at the inception of and
during the term of each hedge. The Company has not recognized any net gains or
losses from its forward currency contracts, as these hedges are highly
effective, and the forecasted purchase of equipment will occur within the next
12 months. Therefore, any gains or losses are included in Accumulated Other
Comprehensive Income (Loss). Cash flow hedges of forecasted transactions
resulted in an aggregate debit balance of $775,000 in Accumulated Other
Comprehensive Income (Loss) at July 31, 2001. All forecasted transactions
currently being hedged are expected to occur within the next 12 months.

                                      13
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         Photronics' commitments represent investments in additional
manufacturing capacity as well as advanced equipment for the production of
high-end, more complex photomasks. At July 31, 2001, Photronics had
commitments outstanding for capital expenditures of approximately $90 million.
Additional commitments for capital requirements are expected to be incurred
during fiscal 2001. Photronics will continue to use its working capital and
bank lines of credit to finance its capital expenditures. Photronics believes
that its currently available resources, together with its capacity for
substantial growth and its access to other debt and equity financing sources,
are sufficient to satisfy its currently planned capital expenditures, as well
as its anticipated working capital requirements for the foreseeable future.

EFFECT OF NEW ACCOUNTING STANDARDS

         In December 1999, the Securities and Exchange Commission (the "SEC")
issued Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in
Financial Statements." SAB No. 101, as amended, is required to be adopted by
the Company no later than the fourth quarter of fiscal 2001. The Company's
adoption of SAB No. 101 is not expected to have a material impact on the
Company's consolidated financial position or results of operations.

         The Financial Accounting Standards Board has issued SFAS No. 141,
"Business Combinations" and SFAS No. 142 "Goodwill and other Intangible Assets."
SFAS No. 141 requires that the purchase method of accounting be used for all
business combinations initiated after June 30, 2001 and that the use of the
pooling-of-interests method is no longer allowed. SFAS No. 142 requires that,
upon adoption, amortization of goodwill will cease and, instead, the carrying
value of goodwill will be evaluated for impairment on an annual basis.
Identifiable intangible assets will continue to be amortized over their useful
lives and reviewed for impairment in accordance with SFAS No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of." SFAS No. 142 is effective for fiscal years beginning after December 15,
2001; however, the Company may elect early adoption of the Statement on November
1, 2001, the beginning of its 2002 fiscal year. The Company is evaluating the
impact of the adoption of these standards and has not yet determined the effect
of adoption on its consolidated financial position and results of operations.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company, in the normal course of doing business, is exposed to
the risks associated with foreign currency exchange rates and changes in
interest rates.

FOREIGN CURRENCY EXCHANGE RATE RISK

         The Company conducts business in several major international
currencies through its worldwide operations, and as a result, is subject to
changes in foreign exchange rates of the various currencies. Changes in
exchange rates can positively or negatively affect the Company's sales, gross
margins and retained earnings. The Company attempts to minimize currency
exposure risk by producing its products in the same country or region in which
the products are sold and thereby generating revenues and incurring expenses
in the same currency and by managing its working capital; there can be no
assurance that this approach will be successful, especially in the event of a
significant and sudden decline in the value of any of the international
currencies in the Company's worldwide operations. The Company does not engage
in purchasing forward exchange contracts for speculative purposes.

                                      14
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INTEREST RATE RISK

         The majority of the Company's borrowings are in the form of its
convertible subordinated notes, which bear interest at the fixed rate of 6%,
its unsecured revolving credit facility, which currently bears interest
between 5% and 8% and secured notes payable which bear interest between 6% and
8%. The Company does not expect changes in interest rates to have a material
effect on income or cash flows in the near term, although there can be no
assurances that interest rates will not significantly change.

FORWARD LOOKING INFORMATION

         Certain statements in this report 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. For a
description of the factors that could cause the actual results of the Company to
be materially different from those projected, please review the Company's SEC
reports that detail these risks and uncertainties and the section captioned
"Forward Looking Information" contained in the Company's Annual Report on Form
10-K for the year ended October 31, 2000. Any forward looking statements should
be considered in light of these factors.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

              (a)    Exhibits

                     See Exhibits Index.

              (b)    Reports on Form 8-K

SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                PHOTRONICS, INC.
                                   Registrant

                             By: /s/ ROBERT J. BOLLO
                                --------------------
                                 Robert J. Bollo
                              Senior Vice President
                             Chief Financial Officer
                           (Duly Authorized Officer and
                           Principal Financial Officer)


Date:  September 13, 2001






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<Page>


                                 EXHIBITS INDEX


<Table>
<Caption>

EXHIBIT NO.                         DESCRIPTION
- -----------                         -----------
                                 
10                                  Put/Call Option Agreement dated August 21,
                                    2001, by and among Photronics, Inc., Photo
                                    (L) Limited, Mask (L) Limited, Lakeway (L)
                                    Limited and March (L) Limited, The HSBC
                                    Private Equity Fund 2 Limited, The HSBC
                                    Private Equity Fund, L.P., Taiwan Mask Corp.
                                    and Blue Water Ventures International Ltd.
</Table>





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