Camtek Ltd.

You should have all now received 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. Rami Langa, 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 Rami will be able 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. And with that, I'd now like to hand the call over to Rafi. Rafi, please go ahead.

Thank you, Kenny. Good morning or good afternoon for everyone. As we announced a few weeks ago, we started 2022 with strong backlog and with impressive flow of orders. We continue with this momentum and 2022 looks like another year of growth. Revenue in Q1 was over $77 million. This represents a growth of 35% over the first quarter last year. Gross margin was 52% on a high end of our model and operating margin of 28.8% is in line with our mid-term target financial model. Furthermore, despite the ongoing negative global geopolitical environment, the company has received order of more than $150 million since the beginning of the year. The orders were received from a broad range of customers and will be used for various applications such as advanced interconnect packaging, including DRAM, compound semi, front end and CIS. This strengthen our expectation for another record year with year over year revenue growth of mid to high teams. The side effect of the COVID-19 continue to interrupt our business as delivery times for material and parts are still long. Prices of component and parts are more expensive Borders of some countries in Asia are still practically closed, and our field engineers cannot visit customers as often as they used to do in the past or travel for advanced training in Israel. In China, the situation is more complicated. Most of the semiconductor industry in China is in the Shanghai area. Thus, a lockdown in Shanghai affects the oil industry. Farbs are operating, but they do so at lower capacity than usual. All in all, the entire semiconductor manufacturing chain is disrupted due to the lockdown in Shanghai, including ports and airports in this area. The good news is the flow of incoming orders from China and from the rest of the world. We continue to receive order at a very impressive rate, to some extent even exceeding our expectations. We are taking into consideration that there might be delays in installing machines at certain Chinese sites, but there will be a catch-up. The semiconductor market forecast remained positive according to several sources. Our backlog is high and when taking into account our pipeline, we are at a better position than at the same time in 2021. Based on our current estimates, our guidance for Q2 is for continued growth in revenue to between 77 to 80 million dollars. The highlight of Q1, advanced interconnect packaging continue to be our largest segment with heterogeneous integration becoming a significant portion. We continue to expand our market share and sold 10 machines to new customer. Specifically, we are cementing our position in the front end and compound segment and shipping machines to existing and new customers. We ship several systems to new CIS customers and one order for RF filter from one of the largest RF filters manufacturers in the world. We ship several systems for DRAM applications and we predict additional system in the second quarter and second half of the year. We completed the development of new important modules and features that will open additional segments for us. This quarter, the US and Europe accounted for 21% of our sales versus 18% in the last quarter and 12% in Q1 of last year. These strengths highlight the strengthening of our position in the U.S. and Europe as a result of the major industry investment taking place there. Let's end my summary. I would like to hand over to Moshe for more detailed discussion of the financial results. Moshe?

Thank you, Rafi. In my financial summary ahead, I will provide the results on a non-GAAP basis. The reconciliation between GAAP results and the non-GAAP results appear in the tables at the end of the press release issued earlier today. First quarter revenues came at the record $77.2 million, an increase of 35% compared with the first quarter of 2021 and 4% compared with the previous quarter. Revenue was mainly driven by advanced packaging, which accounted for about 50% of sales and approximately a 20% contribution of compound SEM. The geographic revenue split for the quarter was as follows. Asia, 79%, and US and Europe together, 21%. Gross profit for the quarter was $40.2 million. As we mentioned on our last call, Gross margin for the first quarter was relatively high with 52% versus 50.7% in the first quarter of last year and 50.9% last quarter. The higher gross margin was due to a more favorable product mix sold during this quarter. Operating expenses in the quarter were $18 million. This is compared with $13.5 million in the first quarter of last year and to the $16.8 million reported in the previous quarter. The increase from the previous quarter is mostly due to increasing R&D and sales-related activities. Operating profit in the quarter was $22.2 million or 28.8% margin. compared to the 15.6 million or 27.2% reported in the first quarter of last year. Net income for the first quarter of 2022 was $21 million or $0.44 per diluted share. This is compared to a net income of $14.6 million or $0.33 per share in the first quarter of last year. Total diluted number of shares as of the end of Q1 was 48.1 million. Turning to some high-level balance sheets and cash flow metrics. Inventory went up by $5 million from the end of December 2021. This is to support the current demand for our products and to ensure the availability of key components. The complicated geopolitical situation and the COVID-19 implications create supply chain challenges. We are increasing the inventory levels to improve the flexibility in our sales channel in order to overcome these challenges. We used $0.4 million in cash from operation. in the quarter due to timing of collection, which relates to the Chinese New Year. Also increasing inventory levels and the tax payment, including for the settlement we have discussed last quarter. Total cash and cash equivalents and deposits as of March 31st, 2022 is $428.3 million. similar to the level we have reported at the end of 2021. As Rafi stated before, the business looks healthy. We received approximately $150 million of orders since the beginning of the year. And we feel good about meeting our plan for 2022 of mid to high teens growth year over year. We expect revenues of between 77 to $80 million in the second quarter. And with that, Rafi, Rami, and myself will be open to take your questions. Kenny?