PHOTRONICS INCPLAB

PHOTRONICS INC Debt Disclosure

10-KFiled Dec 17, 20253 min read
NOTE 8 - DEBT

As of October 31, 2025 and October 31, 2024, the Current portion of long-term debt and the Long-term debt balances were comprised of finance leases as described below:

   
October 31,
2025
    
October 31,
2024
  
Principal due:
            
Next 12 months
  
$
11
      
17,972
  
Months 13 – 24
  
$
12
      
12
  
Months 25 – 36
    
1
      
12
  
Months 37 – 48
    
-
      
1
  
Months 49 – 60
    
-
      
-
  
Long-term debt
    
13
      
25
  
Total debt
  
$
24
      
17,997
  
                 
Interest rate at balance sheet date
    
N/A
      
N/A
  
Basis spread on interest rates
    
N/A
      
N/A
  
Interest rate reset
    
N/A
      
N/A
  
Maturity date
    
N/A
      
N/A
  
Periodic payment amount
   
Varies as
Lease matures
      
Varies as
Lease matures
   
Periodic payment frequency
  
Monthly
     
Monthly
   
Loan collateral (carrying amount)
  
$
1
(1)
    
32,293
(1)

(1) Represents the carrying amount at the balance sheet date of the related ROU assets, in which the lessors have secured interests.
Finance Leases

In February 2021, the Company entered into a five-year $7.2 million finance lease for a high-end inspection tool. Monthly payments on the lease, which commenced in February 2021, were $0.1 million per month. Upon the fiftieth monthly payment and prior to payment of the fifty-first monthly payment, the Company could exercise an early buyout option to purchase the tool for $2.4 million. After the original term or any renewal periods, the Company could return the tool, elect to extend the lease, or purchase the tool at its fair market value. The Company exercised the early buyout option to purchase the tool for $2.4 million during the fiscal year 2025.

In December 2020, the Company entered into a five-year $35.5 million finance lease for a high-end lithography tool. Monthly payments on the lease, which commenced in January 2021, increased from $0.04 million during the first three months to $0.6 million for the following nine months, followed by forty-eight monthly payments of $0.5 million. The lease agreement provided an early buyout option to purchase the tool for $14.1 million, which the Company exercised during the fiscal year 2025.

Xiamen Working Capital Loans

In November 2018, PDMCX obtained approval for revolving, unsecured credit of CNY 200 million ($25 million), pursuant to which PDMCX may enter into separate loan agreements with varying terms to maturity. In December 2022, the Company repaid the Company’s entire outstanding balance of CNY 25.6 million ($3.6 million). The interest rates are variable, based on the CNY Loan Prime Rate of the National Interbank Funding Center. Interest incurred on the loans related to the amount borrowed was eligible for reimbursement through incentives provided by the Xiamen Torch Hi-Tech Industrial Development Zone, which provided such reimbursements up to a prescribed limit and duration. This facility is subject to annual reviews and extensions. In July 2025, the Company was issued an extension to the revolving, unsecured credit agreement for CNY 200 million or USD 25 million with an expiration date of July 31, 2026. As of October 31, 2025, PDMCX had no outstanding borrowings against the approval.

Interest Paid for Debt

Interest payments were $0.1 million in 2025, $0.3 million in 2024, and $0.5 million in 2023.   The weighted-average interest rate on the Company’s current portion of long-term debt for the periods ended October 31, 2025 and October 31, 2024 was 5.9% and 1.5%, respectively.

Historical Timeline

Fiscal YearFiled
2025Dec 17, 2025Showing above
2024Dec 19, 2024
2023Dec 26, 2023
2022Dec 23, 2022
2021Dec 17, 2021
2020Jan 15, 2021
2019Dec 23, 2019
2017Dec 20, 2017
2016Jan 6, 2017
2015Jan 7, 2016

About Debt Disclosures

Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.

Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.

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