nLIGHT, Inc.

Good day and welcome to the NLITE fourth quarter 2020 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal conference specialists by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Joseph Corso, Vice President, Corporate Development and Investor Relations. Please go ahead, sir.

Thank you, and good afternoon, everyone. As the operator said, I am Joe Corso, Enlight's Vice President of Corporate Development and Investor Relations. Scott Keeney, Chief Executive Officer of Enlight, and Ron Burekut, Chief Financial Officer, will be the speakers on today's call. If you have any questions after the call, please direct them to me at joe.corso at enlight.net. A copy of today's earnings press release and earnings slide presentation are available on the investor relations section of our website at investors.enlight.net. In addition, you can access an archived version of today's call from our website. In today's call, our discussion will contain forward-looking statements, including statements about the potential impact of ongoing COVID-19 pandemic, financial projections, future business growth trends and related factors, prospects for expanding and penetrating addressable markets, and our strategic focus and objectives. Forward-looking statements are subject to risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described from time to time in our SEC filings. Our results may differ materially from those projected on today's call. We undertake no obligation to update publicly any forward-looking statement except as required by law. Additionally, certain non-GAAP financial measures will be discussed on this call. We have provided reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures in our earnings release, which can be found on the investor relations section of our website. I will now turn the call over to Scott, who will provide an update on the current environment and the markets we serve. Ron will then go through our financials and outlook. We will then be glad to take your questions.

Thank you, Joe. Starting on slide three. 2020 was a year I will not forget. We started the year with the hope of a global manufacturing recovery after a difficult 2019. But early in the year, we faced the profound uncertainty of the COVID-19 pandemic. Throughout the year, our global team met the unprecedented challenges of this crisis, and we not only were able to operate safely, but we also ended the year with record revenue. In 2020, we generated $223 million of revenue. which was an increase of 26% over 2019, and in line with our long-term historical compound annual growth rate of 23%. We exited Q4 with 50% growth over Q4 2019. And while our future growth will be subject to global macroeconomic factors, we believe over the long run that our strategy will enable us to meet or exceed our historical long-term revenue compound annual growth rate of greater than 20%. Turning to slide four, Breaking down revenue by end market, I will begin with aerospace and defense. 2020 marked the fourth consecutive year of annual growth in our aerospace and defense business. We grew 2020 revenues 36% on an organic basis, and we grew 102% year over year when including the 31.8 million contribution from Neutronics. We have been serving the aerospace and defense market since we founded Enlight two decades ago, and we view ourselves as a dual use technology company. We have a long history of supplying mission-critical lasers into long-running programs, and our work in directed energy represents an important long-term opportunity. November marked the one-year anniversary of our acquisition of Neutronics, and I'm happy to report that the integration of Enlite and Neutronics has gone well, confirming our fundamental thesis that being vertically integrated from the semiconductor laser through beam control is critical to developing high-power, cost-effective lasers required for directed energy applications. Today, we believe We are the only laser company with this level of vertical integration, which offers us a competitive advantage as directed energy applications are expected to move to programs of record. Turning to the industrial end market, our business grew 10% year over year in 2020. We saw continued demand growth in China beginning in mid 2020 that continues today, particularly as our customers continue their migration towards higher power laser solutions. In contrast, our global industrial customers generally operate at lower power levels and value our differentiated programmable laser technology. The sales cycle for many of these global industrial customers is quite long, and the design wins we've secured offer significant long-term growth potential. We're also excited about the opportunities we have in metal additive manufacturing with our newly introduced AFX1000 single-mode programmable laser. Turning to microfabrication, In 2020, our microfabrication sales declined by 10% year over year. However, after bottoming in Q1, we saw a rebound in our microfabrication business beginning in the second quarter that continued throughout the year. And in Q4, our microfabrication revenues increased by 15% versus the comparable period in 2019. We continue to improve performance and reduce costs of our high-power, high-brightness semiconductor lasers, which we believe will enable us to meet the growing demand from a broad base of electronics manufacturing applications that require the use of lasers. We expect that the microfabrication market will be driven by continued improvements in next-generation applications in 5G networks and handsets, as well as the increased use of flexible printed circuits in consumer electronics devices, medical applications, displays, and other advanced electronics applications. Turning to slide five, in 2020, we increased our revenue in all geographies, In China, our 2020 revenue grew 10% year over year to 70.9 million. Full year 2020 sales to customers outside of China grew 35% year over year to 151.9 million, representing 68% of our total revenue versus 64% in 2019. Turning to slide six. In the fourth quarter, we had record quarterly revenue of 66 million and we grew 53% year over year with growth in all of our end markets. Beginning with aerospace and defense, we grew revenues 57% over a year on an organic basis and 122% including the $12.5 million contribution from neutronics. A&D revenue in the quarter was driven by executing against long-term contracts with our core aerospace and defense customers and ongoing direct energy development work. Our industrial business grew 29% year-over-year in the fourth quarter. Growth in our industrial business was driven across all geographies as demand for both high-power and programmable fiber lasers continued to increase. Finally, within microfabrication, our sales increased 15% compared with the fourth quarter of 2019. During the quarter, we saw positive demand trends from multiple customers across a wide range of microfabrication applications. Moving to slide seven to discuss our quarterly revenue by geography. In China, our revenue grew 22% year-over-year to 18.2 million. Fourth quarter sales to customers outside of China grew 70% year-over-year to 47.5 million. representing 72% of total revenue versus 65% in Q4 2019. I will now turn the call over to Ron to discuss Enlight's full year and Q4 financial results.