Camtek Ltd.

Okay. Hello, everyone, and good morning. Hosting today's call is Raphael Meek, Camtex Chief Executive Officer, Rami Langa, Chief Operating Officer, and Moshe Eisenberg, Chief Financial Officer. Before we start, I would like to note that certain statements made on this call constitute forward-looking statements within the meaning of the Securities Act of 1933 as amended and the Securities Exchange Act of 1934 as amended. and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements may use terminology such as believes, expects, will, may, should, anticipates, plans, or similar expressions to identify forward-looking statements. Such statements reflect only current beliefs, expectations, and assumptions of Camtech. However, actual results, performance, or the achievements of Camtech may differ materially as they're subject to certain risks and uncertainties. Such risks and uncertainties include but are not limited to those that are described in Camtech's most recent annual report on Form 20F and as may be supplemented from time to time in Camtech's other filings with the SEC, including today's earlier filing of the earnings PR, all of which are expressly incorporated here and by reference. Camtech undertakes no obligation to update any such forward-looking statements unless required by law. Camtech's public filings are available on the Securities and Exchange Commission's website at www.sec.gov and may also be obtained from Camtech's website at www.camtech.com. Also, on today's call, we will include certain non-GAAP numbers. For a reconciliation between the GAAP and non-GAAP results, please see the table attached in today's press release, which is also posted in the Investor Relations section of Camtech's website. So with us today, we have Moshe Eisenberg, CFO, Rafi Amit, CEO, and Rami Langer, COO. And I would now like to turn the call over to Rafi Amit. Rafi, you may go ahead.

Okay, thanks, Kenny. Good morning or good afternoon, everyone. Capita closed the third quarter with revenue of 80.5 million dollars. Gross margin came in at 49%, which is a continued improvement over previous quarters, as we indicated earlier this year. Operating margin was 28%. Over 60% of our revenues came from advanced interconnect packaging applications, which with a significant portion coming from HBM and chiplet modules. The remaining 40% is divided between compound semiconductors for power devices, CIS, and process control applications. Regarding the war in Israel, I would like to explain how we have managed this situation. About 10% of our employees in Israel are on active reserve duty. the remaining workforce has managed to compensate for their absence. Our facility is quite far from the border and we have some redundancy in our operations, which is done in three different locations. Thus, any risk of interruption is minimized. Our delivery to customers has not been affected and we have not experienced any material or supply shortage. So, all in all, the war has not affected our operations or business. On October 31st, we completed the process of acquiring FRT from 4Factor and we have begun the integration of FRT into Camtex. We are in the final integration process of FRT sales and customer support functions into our global organization. The synergy of our products make this process straightforward. We have also started the integration of the other different organizations functions into Camtech. And we plan to expand the facility in order to support potential growth and implement the Camtex workflow into FRT. Now I would like to add a few words about the business environment. Since the beginning of third quarter, we have reported orders received of about 150 systems. And since then, we have received additional orders for about 90 systems. The last order we reported yesterday was for 28 tools from tier one customer for HBM and heterogeneous integration applications. Most of the orders are for installation during 2024. This healthy backlog and ordering pipeline point to a year of growth for ComTech, and we expect a record year in sales in 2024. No doubt that our high performance computing is the bright spot for us. Based on several surveys, The number of chiplets is expected to grow at 35% CAGR in the next four years and the HBM at a CAGR of 22%. We have strong position in this market, so we expect to expand our market share by winning additional inspection and metrology steps together with FRT products. In addition, in some territories, we see demand for other applications that are not related to the high-performance computer, but fueled by mobile phones, server, automotive, and other segments. We are also enjoying healthy demand from OSATs serving multiple applications. We are greatly encouraged by the number of orders we receive for HBM and by chiplet modules to be installed in 2024. At the same time, we are aware of the technological changes soon to be adopted by our customers. We are totally prepared with innovative and creative solutions and will start qualification process at customer site soon. With respect to Q4, we expect continued organic growth and with the contribution of FRT, our revenue guidance is $87 to $89 million. And now, Moshe will review the financial result. Moshe, please.

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. Third quarter revenue came in at $80.5 million, a decline of 2% compared with the third quarter of 2022, an increase of 9% from the second quarter of 2023. The geographic revenue split for the quarter was as follows. Asia, 81%, and US and Europe accounted for the rest, 19%. Gross profit for the quarter was $39.4 million. The gross margin for the quarter was 49%, similar to the third quarter of last year, and an improvement from the second quarter of this year, which was 48%. As mentioned before, we've been taking measures to improve the gross margin. In the last two quarters, we have seen the initial impact and we expect to see continued gradual improvement in the coming quarters, subject to sales mix. Operating expenses in the quarter were $17.2 million, very similar to the third quarter of last year and to the previous quarter. Operating profit in the quarter was $22.2 million, compared to the $23.2 million reported in the third quarter of last year. Operating margin was 27.6 compared to 28.3. Financial income for the quarter was $5.7 million at a similar level to the previous quarter and much higher than the $2 million reported last year. The increase from last year relates to the significantly higher interest rates on an increased cash balance. Net income for the third quarter of 2023 was 25.2 million dollars or 52 cents per diluted share. This is compared to a net income of 23.3 million dollars or 48 cents per share in the third quarter of last year. Total diluted number of shares as of the end of Q3 was 49 million shares. Turning to some high-level balance sheet and cash flow metrics, cash and cash equivalents, including short and long-term deposits and marketable securities as of September 30, 2023, were $517.1 million. This compared with $506.3 million at the end of the second quarter. I know that in line with the FRT, closing in October, our cash balance has decreased by approximately $100 million, which will also affect our interest income. We generated $12.4 million in cash from operations in the quarter. Inventory level was $72.7 million. It went up by $4.4 million over the quarter to support the anticipated sales growth in the coming quarters. Accounts receivables increased to 91.4 from $79 million in the previous quarter, primarily due to the increasing revenue and the timing of collections. As Rafi mentioned before, we expect revenue of between $87 to $89 million in the fourth quarter, which is about 7% increase over the fourth quarter of last year. And that We look forward to a year of growth in 2024. We will provide more color next quarter after we announced our Q4 results. And with that, Rafi, Rami and I will be open to take your questions.