SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
March 14, 2000
.....Photronics, Inc......
(Exact name of registrant as specified in its charter)
Connecticut 0-15451 06-0854886
(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of Incorporation)
1061 East Indiantown Road, Jupiter, FL 33477
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(561) 745-1222
_______________________________________________________________
(Former name or former address, if changed since last report.)
<PAGE>
Item 5. Other Events
On March 14, 2000, Photronics, Inc. issued three press
releases, one related to the consolidation of certain of its
manufacturing facilities, and two related to its acquisition of a
majority interest in a photomask manufacturer located in Taiwan.
The press releases are filed herewith as exhibits.
Item 7. Financial Statements and Exhibits
(a) Financial statements of business acquired
Not applicable
(b) Pro forma financial information
Not applicable
(c) See Exhibits Index
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 hereunto duly authorized.
Photronics, Inc.
JEFFREY P. MOONAN
----------------
March 15, 2000 By: Jeffrey P. Moonan
Title: Executive VP
Finance &
Administration
<PAGE>
EXHIBITS INDEX
Exhibit No. Description
- ----------- -----------
99.1 Press release dated March 14, 2000.
99.2 Press release dated March 14, 2000.
99.3 Press release dated March 14, 2000.
Exhibit No. 99.1
For Further Information:
At The Company
Michael W. McCarthy
Director - Investor Relations & Corporate Communications
(203)775-9000
[email protected]
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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<PAGE>
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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<PAGE>
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.
Exhibit No. 99.2
For Further Information:
At The Company
Michael W. McCarthy
Director - Investor Relations & Corporate Communications
(203)775-9000
[email protected]
www.photronics.com
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FOR IMMEDIATE RELEASE
March 14, 2000
Photronics to Acquire Majority Interest in
Precision Semiconductor Mask Corporation
PSMC's Leading Edge Capability Firmly Establishes
Photronics in the Rapidly Growing Taiwanese Wafer Foundry Market
JUPITER, Florida March 14, 2000 -- Photronics, Inc. (Nasdaq:PLAB), the
world's leading photomask supplier, today announced that it would acquire a
majority share of Precision Semiconductor Mask Corporation (PSMC), Taiwan's
photomask technology leader. PSMC, together with certain of its principal
shareholders have agreed to sell a minimum of 51% of the equity of PSMC through
the sale of currently outstanding or newly issued shares in transactions
aggregating approximately $50 million. Photronics has already acquired
approximately 32% of PSMC's currently outstanding shares. Additional financial
terms were not disclosed.
PSMC, which will become a subsidiary of Photronics, establishes Photronics
as the technology and service leader in the fastest growing photomask market
in the world. In addition, PSMC's high-end and advanced photomask technology
qualifications at both Taiwan Semiconductor Manufacturing Corporation (TSMC)
and United Microelectronics Corporation (UMC) allows Photronics to bring its
Sub-Wavelength Reticle Solutions' process technologies to an increasing number
of integrated circuit designers and device manufacturers outsourcing their
wafer fabrication requirements. Photronics' proprietary high-end manufacturing
and service capabilities are complementary to PSMC's internally developed,
robust phase shift photomask technology. PSMC's embedded and hard phase shift
technologies have gained wide acceptance by Taiwan's leading wafer
lithographers, as well as having attracted the attention of leading wafer
lithographers across Europe, Japan and North America.
Constantine "Deno" Macricostas, Chairman of Photronics noted,
"Establishing a strategic manufacturing location in Taiwan has been a high
priority. PSMC's competitive position and visibility within Taiwan's
semiconductor manufacturing community is truly unique and is what makes this
transaction work for our customers, and for our shareholders. They maintain
the highest level of photomask technology available in Taiwan, and are the only
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<PAGE>
Photronics to acquire Majority interest in PSMC...........Page Two
local photomask supplier qualified to support both TSMC's and UMC's 0.18 micron
technologies. When integrated with Photronics' state-of-the-art global
manufacturing network in Europe, North America and Singapore, our Company will
be the only strategic photomask supplier with the global presence to provide
a comprehensive foundry solution to the world's semiconductor designers and
manufacturers. Both companies are ecstatic at the opportunity to join
together, bringing customers critical and enabling lithography solutions as
they transition into technology nodes beyond the 0.18 micron capabilities being
ramped into production today."
Dr. C. Daniel Wu, Chairman of PSMC stated that, "Photronics is the world's
recognized leader in sub-wavelength reticle technologies and customer service.
PSMC's strong technology and wafer foundry relationships, when combined with
Photronics comprehensive global manufacturing network and strategic customer
relationships will greatly enhance our ability to meet the technology and
volume requirements of a global semiconductor industry relying more on the
foundry industry for an increasing amount of their processed wafers. Our
timing is excellent and we are ideally positioned to expand our unparalleled
presence in the Asia Pacific region."
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.
Exhibit No. 99.3
For Further Information:
At The Company
Michael W. McCarthy
Director - Investor Relations & Corporate Communications
(203)775-9000
[email protected]
www.photronics.com
- -------------------------------------------------------------------
FOR IMMEDIATE RELEASE
March 14, 2000
Photronics Broadens Photomask Manufacturing Presence in Asia
Singapore and Taiwan Facilities Enable Comprehensive Foundry Solution
JUPITER, Florida March 14, 2000 -- Photronics, Inc. (Nasdaq:PLAB), the
world's leading photomask supplier, today announced additional details of its
Asian manufacturing and customer service strategy which it believes will
increase the Company's visibility and market share in this rapidly growing
region. Expansion in Asia, a cornerstone of Photronics' future growth
strategy, was recently brought to the forefront of the Company's operating
activities when it announced acquiring equity ownership of Precision
Semiconductor Mask Corporation (PSMC) located in Taiwan. PSMC, a leading
photomask technology and service provider qualified at Taiwan Semiconductor
Manufacturing Corporation (TSMC) and United Microelectronics Corporation (UMC),
will become a subsidiary of Photronics as a result of Photronics' 51% majority
interest. This latest addition to Photronics' global manufacturing network
will enable the Company to leverage its strategic supplier relationships with
European and North American-based integrated device manufactures (IDM's) and
fabless semiconductor designers into a comprehensive, full service photomask
technology solution for foundry customers.
The Asian photomask market, which supports semiconductor manufacturing
activities in China, Korea, Taiwan, and Singapore/Southeast Asia, is estimated
to exceed $550 million in calendar 2000 according to Photronics. The rapid
growth of this market, particularly in Singapore and Taiwan, results from the
broad based adoption of wafer outsourcing strategies. Large and established
IDM's, as well as small fabless semiconductor design companies, will continue
to benefit from the foundry industry's movement toward wafer processing
technology leadership.
Photronics' Singapore facility, having commenced operations in August
1996, remains uniquely positioned as the only photomask supplier in the
Southeast Asian region. This site has undergone significant transformation to
meet the more demanding requirements of its customers, including a quadrupling
in capacity, as well as enhancements to its technological capability.
Additionally new growth opportunities are developing as foundry activity in
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<PAGE>
Photronics Broadens Photomask Manufacturing Presence in Asia...........Page Two
Malaysia finds new strength. Planned foundry capacity investments are expected
to begin ramping in Malaysia toward the end of this year. The Korean market,
which has seen the majority of its manufacturing capacity allocated toward
memory products, has also begun to produce an increasing amount of logic-based
semiconductors, and is thus expected to see its photomask unit demand increase.
Coming into this year, industry analysts expect that a foundry partner
processed 10% of all processed silicon. This estimate increases to more than
45% by 2010, making the foundry market one of the single largest strategic
consumers of photomask manufacturing technology and services in the world.
James R. Northup, President stated, "The real benefit to PSMC and
Photronics comes from being able to serve a larger customer base requiring a
local source of photomask technology and support from a regionally located and
qualified supplier/partner. Our customers' accelerating technology
requirements, together with the evolving semiconductor fabrication model based
on outsourced manufacturing strategies has created a unique growth situation
for the Asian foundries, and those companies strategically positioned to
support them. In addition to providing a comprehensive foundry photomask
supply solution, we have an opportunity to build on PSMC's and Photronics'
emerging reputations in Japan, as companies in this region increasingly look
toward their merchant photomask suppliers to play a leading role in addressing
the challenges of sub-0.18 micron lithography."
The substantial technological capability developed by PSMC, together with
its advanced photomask technology qualifications at TSMC and UMC, complements
Photronics' strategic position as Southeast Asia's foremost photomask supplier.
By leveraging its relationships with European and North American customers
utilizing wafer foundries, PSMC will increase its overall capacity utilization
and should nearly double Photronics' share of the Asian photomask market
(excluding Japan) by year end.
PSMC's facility, which includes 21,600 square feet of class 1 clean room
space, is ideally located in Taiwan's Hsinchu Science Park in Taiwan, enabling
it to satisfy many of the Company's customers' time to market requirements.
The site's 145 employees, almost half of which have engineering
backgrounds, are serving the market with Etec, Hitachi and JOEL lithography
systems, which are supported by leading inspection tools from KLA-Tencor and
repair systems from Seiko. Mr. Northup added, "In light of Taiwan's rapid
emergence as a wafer process technology leader, Photronics will bring an ALTA
3500 system to the facility by this summer. We are excited about the
opportunity to combine PSMC's well deserved reputation for differentiating
technology together with our own Sub-Wavelength Reticle Solutions' products in
order to expand our leadership role in Asia's growing demand for advanced wafer
lithography process solutions."
Photronics' new presence in Taiwan also greatly improves its ability to
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<PAGE>
Photronics Broadens Photomask Manufacturing Presence in Asia.....Page Three
service Japanese semiconductor manufacturers and North American integrated
device manufacturers with facilities in Japan. The Company's position in
Taiwan increases its visibility among semiconductor designers now utilizing the
advanced wafer process technologies available in today's deep sub-micron
foundry fabs. In addition, it improves Photronics' ability to supply photomask
technology and services directly into Japan, a market Photronics estimates will
approach $1.0 billion this year. Commenting on Japanese growth opportunities,
Mr. Northup stated, "The team at PSMC has done an outstanding job qualifying
at every advanced memory wafer fab in Taiwan. This robust technological
capability will enable us to further increase our visibility in a market driven
by demanding memory technologies."
A conference call replay 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. It 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.
