PLAB Photronics, Inc.

Risks

• Technology failures or cyber security breaches could have a material adverse effect on our operations.
• The risk of loss of the Company’s intellectual property, trade secrets or other sensitive business or customer confidential information or disruption of operations due to breaches of cybersecurity could negatively impact the Company’s financial results.
• Our dependency on the microelectronics industry, which as a whole is volatile, could create volatility in our demand and have a negative material impact on our business.
• We may, in the future, incur net losses.
• We have a high level of fixed costs.
• Our quarterly operating results fluctuate significantly, and may continue to do so in the future.
• The photomask industry is subject to rapid technological change, and we might fail to remain competitive, which could have a material adverse effect on our business and results of operations.
• Our operations will continue to require substantial capital expenditures, for which we may be unable to provide or obtain funding.
• We have been dependent on sales to a limited number of large customers; the loss of any of these customers or a significant reduction in orders from these customers could have a material adverse effect on our revenues and results of operations.
• We depend on a limited number of suppliers for equipment and raw materials and, if those suppliers fail to timely deliver their products to us, we may be unable to fulfill orders from our customers, which could adversely affect our business and results of operations.
• We could be subject to damages based on claims brought against us by our customers, or lose customers as a result of the failure of our products to meet certain quality specifications.
• Our credit facility restricts our business activities, limits our ability to obtain additional financing, pay cash dividends, and may obligate us to repay debt before its maturity.
• Joint ventures may not operate according to their business plans if our partners fail to fulfill their obligations, which may adversely affect our results of operations and compel us to dedicate additional resources to these joint ventures.
• We may not be able to consummate future acquisitions or joint ventures or integrate acquisitions into our business, which could result in unanticipated expenses and losses.
• Our expansion into China entails substantial risks.
• Our cash flows from operations and current holdings of cash may not be adequate for our current and long-term needs.
• We may incur unforeseen charges related to possible future facility closures or restructurings.
• We operate in a highly competitive environment, and, should we be unable to meet our customers’ requirements for product quality, timeliness of delivery or technical capabilities, our revenue could be adversely affected.
• We operate in a global, competitive environment which gives rise to operating and market risk exposure.
• Our substantial non-US operations are subject to additional risks.
• Our business could suffer as a result of the United Kingdom’s decision to end its membership in the European Union.
• Changes in foreign currency exchange rates could have a material adverse effect on our results of operations, financial condition, or cash flows.
• Our business depends on managerial and technical personnel, who are in great demand, and our inability to attract and retain qualified employees could adversely affect our business and results of operations.
• We may be unable to enforce or defend our ownership and use of proprietary technology, and the utilization of unprotected company developed technology by our competitors could adversely affect our business, results of operations, and financial position.
• We may be unprepared for changes to environmental laws and regulations and may incur liabilities arising from environmental matters.
• Our production facilities could be damaged or disrupted by natural disasters or labor strikes, either of which could adversely affect our financial position, results of operations, and cash flows.
• Our sales can be impacted by the health and stability of the general economy, which could adversely affect our results of operations and cash flows.
• Additional taxes could adversely affect our financial results.
• Our business could be adversely impacted by global or regional catastrophic events.
• Servicing our debt requires a significant amount of cash, and we may not generate sufficient cash flows from our operations to pay our indebtedness.
• Our hedging activity could negatively impact our results of operations and cash flows.
• The market price of our common stock is subject to volatility and could fluctuate widely in response to various factors, many of which are beyond our control.
• Ineffective internal controls could impact our business and operating results.