Camtek Ltd.

Ladies and gentlemen, thank you for standing by. I would like to welcome all of you to Camtech's fourth quarter and full year 2020 results Zoom webinar. My name is Kenny Green. I am part of the investor relations team at Camtech. This is the first time we are running our conference call as a live Zoom webinar, and I apologize in advance for any unforeseen technical issues we may face during the call. Our goal is to increase engagement with investors and analysts, and we hope this new type of quarterly call is a step in the right direction. All participants, other than the presenters, are currently muted. Following our formal presentation, I will provide some instructions for participating in the live question and answer session. At any time during the call, you may also submit a question via the Q&A chat and we will endeavour to answer as many of those questions as possible. I would like to remind everyone that this conference call is being recorded and the recording will be available for download from CanSec's website within a few hours after the call. You should have all received by now the company's press release. If not, please view it on the company's website. With me today on the call we have Mr. Rafi Amit, Camtex CEO, Mr. Moshe Eisenberg, Camtex CFO, and Mr. Ramy Langer, Camtex COO. Rafi will open by providing an overview of Camtex results and discuss recent market trends. Moshe will then summarize the financial results of the quarter. Following that, Rafi, Moshe and Ramy will be available to take your questions. Before we begin, I would like to remind everyone that certain information provided on this call are internal company estimates unless otherwise specified. This call may also contain forward-looking statements. These statements are only predictions and may change as time passes. Statements on this call are made as of today and the company undertakes no obligations to update any of the forward-looking statements contained, whether as a result of new information, future events, changes in expectations or otherwise. Investors are reminded that these forward-looking statements are subject to risks and uncertainties that may cause actual events or results that differ materially from those projected. including as a result of the effects of general economic conditions, the effects of the COVID-19 crisis on global markets and on the markets in which we operate, including the risk of a continued disruption to our and our customers, providers, business partners and contractors' business as a result of the outbreak and effects of the COVID-19 pandemic. risk related to the concentration of a significant portion of Camtex expected business in certain countries, particularly China, from which we expect to generate significant portions of our income for the foreseeable future, but also Taiwan and Korea, including the risk of deviations from our expectations regarding timing and size of orders from customers in these countries. Changing industry market trends, reduced demand for our services and products, the timely development of new services and products and their adoption by the market, increased competition in the industry and price reductions, as well as due to other risks identified in the company's findings with the SEC. Please note that the safe harbor statement in today's press release also covers the contents of this conference call. Furthermore, during the call, certain non-GAAP financial measures will be discussed. We believe that the presentation of non-GAAP financial measures is useful to investors' understanding and assessment of the company's ongoing corporations and prospects for the future. A full reconciliation of non-GAAP to GAAP financial measures are included in today's earnings release. I will now like to hand the call over to Rafi Amit, Camtex CEO. Rafi, please go ahead.

Okay, thank you, Kenny. Good morning and thank you for joining our call today. I will start with some highlights from the fourth quarter. A few words on 2020 and continue with reviewing our current business. Total sales in the fourth quarter were $48.6 million, close to a 50% increase over Q4 2019 and record quarterly revenue. In the first quarter, we continued the momentum of increasing sales to our existing customers as well as to new customers. Gross margin was 48.2% and operating margin was 18.9%, marking an improvement in profitability compared with the first half of 2020. For all year, we achieved record revenue of $156 million, a 16% growth over 2019 and record operating profit of $26.8 million. In the last two weeks, we have received multiple systems orders from several customers totaling about $25 million. The impressive backlog we have on hand together with sales in pipeline point to a strong sales forecast for the first half of 2021. We are anticipating sales of over $110 million in the first half of 2021, implying approximately 65% growth over the first half of 2020. We also see continued momentum of orders into Q3, but it is too early to give accurate forecasts. For the first quarter of 2021, we expect an impressive sales level of between $54 to $56 million. The year 2020 was an exceptional year for us, just as it was for the old semiconductor industry. In the first quarter, we had concern about our ability to install system due to the COVID-19 restrictions on shipping system to certain countries. Yet, in the fourth quarter, we face a completely different situation. We had to adjust our production capacity and field support due to the high demand for our systems. Our flexible operational infrastructure and our global organizations allow us to successfully execute this growth and the requirements of our customers. In the first quarter of 2021, this trend has continued and even accelerated. Our strategy is to maximize growth in all segments in which we operate. The front-end, mid-end and back-end, mainly post-dicing. We continue increasing the number of new customers, penetrating new market segments and strengthening our presence in existing customers. By providing the highest level of service and support, we create a strong commitment between Camtek and its customers. A strategy of addressing a wide range of customers also includes customers with entry-level products that need only basic configuration of our systems, resulting in a lower ASP in the short term. Our experiences show that in the future, many of these customers will purchase systems with more complex configurations capable of detecting smaller defects to meet their end customer requirements. In the second half of 2020, we saw an improved margin. We can already see this trend continuing in the order we have received for the year 2021. The configuration of system order are more complex and the ASP is higher than what we saw in 2020. As a result, we expect continued improvement in the gross margin in the first half. The drivers of our market segment have not changed from those I mentioned in the previous course. The main drivers are advanced packaging, memory, CMOS image sensor, and RF devices for 5G smartphone. 5G is pushing demand for high-end smartphone sales. Compared to previous generations, these 5G phones include more silicon, more advanced packaging, and larger number of RF devices in each phone. As a result, we are experiencing demand for 5G-related applications. We see adoption of new packaging technologies by our customers. Adoption of new technologies requires extensive use of inspection and metrology systems. All the drivers I mentioned serve the demand for end products such as mobile phone, laptop, server, automotive, medical, and more. Specifically for 2021, the main growth is expected to be the advanced packaging, both in inspection as well as in metrology. The CMOS image sensor in 2020 accounted for about 30% of our business. This is unusually high and was a result of healthy demand for our customers. In 2021, we expect the CIS segment to be more in line with previous year share of about 10 to 15% of our revenue. In the DRAM space, we see a lot of activity. However, we believe that it will be more at the end of the year or beginning of next year before we see meaningful business. As previously announced, we continue to gain momentum in the front-end market. The penetration process specifically in the front-end segment is after a very long and meticulous evaluation. We have penetrated several new customers in 2020 and we expect to continue with that in 2021. For 2021, we expect this segment to account for more than 10% of our business. In 2020, we met an important milestone by receiving qualification for our system and order for production lines from one of the world's top integrated circuit manufacturers. Our systems have been implemented in the customer's development and production sites globally. We continue our development effort on several levels, developing special features upon customer request to support ongoing sales, constantly improving the detection engines, and continuing the development of new generations of systems and solutions based on key customer input and industry roadmap. We plan to launch new products to the market this year. We have managed to operate optimally under the COVID-19 circumstances, but we cannot fully predict the global implications of the epidemic and its potential impact on our business. As things stand today, 2021 is going to be a record year in sales and growth, along with improved profitability. During U4 of last year, we have raised about $64 million to support our growth strategy beyond organic growth. We are continuing our efforts to find companies that are suitable for acquisitions. We are especially interested in companies whose products serve market-like hours and will be able to use our sales and support infrastructures. Before I hand over to Moshe for more details on a financial result, I would especially like to thank our employees for their dedicated work during these challenging times. Moshe?

Thank you Rafi.