II-VI Incorporated

Good day and thank you for standing by. Welcome to the 2-6 fourth quarter 2021 earnings call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Mary Jane Raymond, 2-6 Chief Financial Officer. Please go ahead.

Thank you, Regina, and good morning. I'm Mary Jane Raymond, the Chief Financial Officer here at 2-6 Incorporated. Welcome to our earnings call today for the fourth quarter of fiscal year 2021. With me today on the call are Dr. Chuck Matera, our Chief Executive Officer, Dr. Giovanni Barbarossa, our Chief Strategy Officer, and the President of the Compound Semiconductor Segment, and our President, Bob Bashaw. This call is being recorded on Tuesday, August 10th. 2021. Our press release and our updated investor presentation are available on the investor relations tab of the website, ii-vi.com. Just as a reminder, any forward-looking statements we may make today during this teleconference are given in the context of today only. They are subject to various risk factors and are subject to change, possibly materially. We do not undertake any obligation to update these statements to reflect events subsequent to today, except as required by law. Our list of known material risk factors can be found in our Form 10-K for the year ended June 30th, 2020, together with our subsequent filings with the SEC, and the Form 10-K for fiscal year 2021 is expected to be filed on or about August 20th. Our remarks today do not constitute an offer to sell or the solicitation of an offer to buy any securities. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the United States Securities Act of 1933 as amended. Finally, with respect to today's call, we will also present some non-GAAP measures for which the reconciliations to GAAP are found at the end of each document that includes those measures, such as the press release or the investor presentation. With that, let me turn it over to Dr. Chuck Matera. Chuck?

Thanks, Mary Jane. Thank you all for joining us today and for your interest in 2.6. With the fourth surge of COVID clearly upon us, we remain concerned. focused on the basics to ensure employee and workplace safety. During the quarter, our supply chain and operations teams collaborated and again averted the potential impact of protracted supply chain issues. Once again, our employees made things happen and got the job done. Indeed, we delivered a great quarter and a great fiscal year. During today's call, we will elaborate on the excitement of last year and our strong long-term opportunities. Since we signed the merger agreement with Coherent and started our flywheels turning, I have met individually with over 25 of the senior leaders at Coherent. I am deeply impressed by their core competencies and longstanding contributions to the laser and photonics industries. Their respect for the challenges that had to be overcome with each successive generation of technology, their team orientation around innovation, and their sense of excitement about the opportunities to continue to transform the world are similar to 2-6, making the ingredients great ingredients for a great start. During fiscal year 2021, we celebrated the 50th anniversary since our founding. and we passed another important operating milestone, having achieved $3 billion in revenue only one year after passing the $2 billion mark, an amazing accomplishment despite the challenges, including those associated with operating during a pandemic. Our revenues and our non-GAAP net income both grew just over 30% over fiscal year 2020, and we exited fiscal year 21 with a record $1.25 billion backlog. Our growth is a testament to our market-focused strategy, our diversified global footprint, the endowment of acquired and developed technology, our agility around large customer intimacy, our ability to operate at scale, a disciplined approach to productivity improvements, and a focus on our talent. Now, turning from a summary of the last quarter and last year to a long-term view of our opportunity in the silicon carbide market, we are excited to announce the acceleration of our investments to scale the manufacturing of our silicon carbide substrates, devices, and modules to enable the acceleration of the electrification of the global transportation infrastructure. in fiscal year 2022, we plan to increase our investments to about $200 million in R&D and capital to continue to lay the foundation on which to grow the business to the next level. Our silicon carbide business, which today is less than 5% of our revenue, is targeted to become one of the largest businesses in our company inside 10 years. We believe that our investments and opportunities combined with our ability to execute will allow us to become well-positioned in this large market with attractive growth dynamics. Accordingly, we are planning incremental R&D investments of about 2 to 3 percent of revenue for the next few years. We anticipate investing around $1 billion over the next decade as Generation 3 semiconductors fabricated from wide bandgap materials, including silicon carbide, grow to underpin a number of important industry transformations and we are planning to establish a leadership position long-term. Giovanni, Bob, and Mary Jane will walk through the details of the quarter, and with that, I will turn it over to Dr. Giovanni Barbarossa, our Chief Strategy Officer and President of the Compound Semiconductors Sector. Giovanni? Thank you, Chuck.