Photronics, Inc., a manufacturer of photomasks, reported net sales and operating results for the fourth quarter and fiscal year ended October 31, 2001. Net sales for the quarter were $93.8 million compared with $96.7 million for the fourth quarter of 2000. Sequentially, net sales increased 10% from the $85.0 million in the third quarter of fiscal 2001, primarily as a result of acquisitions in the quarter, as well as market share gains. Revenues from 0.18 micron and below photomask technologies represented approximately 18% of net sales, a sequential revenue increase of 65% over the third quarter of 2001. Net income was $2.0 million, or $0.07 per diluted share, compared with $8.8 million, or $0.29 per diluted share for the same period last year and $1.8 million, or $0.06 per diluted share in this year's fiscal third quarter.
Net sales for fiscal year 2001 were $378.0 million, up 14%, compared to $331.2 million for fiscal 2000. Net income, excluding consolidation, restructuring and related charges, decreased 12% to $22.1 million, or $0.74 per diluted share compared to $25.0 million, or $0.86 per diluted share in the year ago period. The Company recorded a charge in the second quarter of fiscal 2001 in connection with its consolidation of facilities in California, Florida and Germany. After giving effect to the consolidation, restructuring and related charges, the Company incurred a net loss of $4.0 million, or $0.13 per diluted share for fiscal 2001 compared with net income of $10.2 million, or $0.34 per diluted share in fiscal 2000.
In commenting on the Company's fiscal year and fourth quarter operating results, Constantine S. Macricostas, Chairman and CEO, stated, �We are proud of today's report indicating that Photronics has become the photomask industry's largest supplier on the basis of the most recent reported quarterly results. This milestone was achieved through our Company's ability to implement an aggressive business strategy to gain market share through technology leadership and worldclass customer service. These accomplishments are particularly notable because they were achieved during one of the most severe cyclical downturns the global semiconductor industry has ever experienced in my more than 40-year career. More recently, we believe our customers have seen their businesses stabilize from the period of rapid deterioration experienced during the summer months. Throughout this time, the performance of the entire Photronics team has been outstanding. We will continue to improve our operating efficiency at every level, tightening an already intense focus on controlling costs and generating higher returns on our assets.� He added, �The adversity of cyclical downturns has created numerous opportunities for Photronics over its 32 year history. Our focus on advanced technology, customer service, and regional investment programs is strengthening Photronics' competitive position to grow as semiconductor manufacturing technologies transition to 130nm and 90nm technologies.�
At the end of the fourth quarter of fiscal 2001, Photronics was not in compliance with the covenant in its $125 million revolving credit agreement that requires it to maintain a minimum interest coverage ratio for a trailing four-quarter period. This non-compliance was largely attributable to the well-publicized worldwide downturn in the demand for semiconductor products, including photomasks. Photronics intends to repay all outstanding loans under the revolving credit agreement, which totaled $49.5 million on December 4, 2001, and then expects to terminate this agreement. After termination, Photronics would seek to replace the revolving credit agreement.
If Photronics were unable to obtain the funds to effect this repayment, it will seek a waiver from the lenders for the existing non-compliance and an amendment to the covenant requirements for future periods. If it is unable to obtain this waiver and amendment, the lenders could refuse to extend additional loans and/or could require Photronics to immediately repay all outstanding loans. In that case, Photronics would seek to replace the revolving credit agreement or take other steps to obtain alternative funding.
Additional information on the Company can be accessed at www.photronics.com.