Photronics cuts 3Q outlook, cites FPD mask slump

August 1, 2006 – Photronics Inc., Brookfield, CT, has lowered its outlook for fiscal 3Q06, citing a shortfall in flat-panel display mask orders and shipments vs. previous forecasts, particularly in Korea and Taiwan.

Revenues are now expected to be $106-$107 million, instead of $119-$124 million, representing a 10%-11% sequential decline. Earnings are now seen coming in at $0.09-$0.11/share, vs. 2Q EPS of $0.12, and excluding restructuring charges associated with the company’s consolidation of North American operations.

“The reduced number of designs, coupled with the average selling prices for these mask sets, precipitated a revenue shortfall that was disruptive in the current quarter,” stated CEO Michael Luttati. However, he deemed the slowdown in demand a short-term problem, suggesting that FPD design activity will ramp up with a focus on manufacturing capabilities coming online from Generation 7-8 facilities in both Korea and Taiwan. “Our broader assessment of the market indicates that the demand for both semiconductor and FPD mask technology and services is fundamentally solid and growing,” he stated.

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