Photronics, Inc.

Good day and thank you for standing by. Welcome to the Fortronics Q3 fiscal year 22 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during that session, you will need to press star one one on your phone. Be advised that today's conference is being recorded and I would now like to hand the conference over to your speaker today, Ms. Rachelle Burr, Executive Vice President Chief Administrative Officer and General Counsel. Ms. Burr, please go ahead.

Thank you, Chris. Good morning, everyone. Welcome to our review of Photonics Fiscal 2022 Third Quarter Results. Joining me this morning are Frank Lee, our Chief Executive Officer, John Jordan, our Chief Financial Officer, Chris Burr, our Chief Technology Officer, and Eric Rivera, our Corporate Controller and Chief Accounting Officer. The press release we issued earlier this morning along with the presentation material which accompanies our remarks are available on the investor relations section of our webpage. Comments made by any participant on today's call may include forward looking statements that include such words as anticipate, believe, estimate, expect, forecast or in our view. These forward looking statements are based upon a number of risks, uncertainties and other factors that are difficult to predict. Actual results may differ materially from those expressed or implied, and we assume no obligation to update any forward-looking statements. At this time, I will turn the call over to Frank.

Thank you, Richelle, and good morning, everyone. Q3 was an outstanding quarter. We achieved new records in both revenue and profit. Demand for photo masks remains strong for IC and FPD, both high-end and mainstream applications. With our global presence, store production capacity, and deep portfolio of customer partnership, we increased revenue 8% sequentially. Once again, it is our sixth consecutive quarter of record revenue. Growth margin and operation margin also reached 25-year record highs. of 38% and 29% respectively, as we benefit from higher price, operation at capacity in most locations, and superior cost control. The net result was earnings of 51 cents per share. Cash generation was also strong. and we end the quarter with $324 million in net cash, positioning us to continue investing in profitable growth opportunities. I'm very proud of the entire Fortronix organization and what we have been able to accomplish by working together and serving our customers to deliver great results. There has been pronounced mass capacity shortage since the beginning of second half 2021. Consequently, our customer has been dealing with low mass delivery time. Since Fortroni's full commitment is to our customers' success and growth, we have evaluated the situation and will be making the next wave of capital investment. to closely align with our customers for their technology and production capacity roadmap. This strategy has been extended across geographies for both IC and FPD. These actions will help us continue to build a strong partnership with customers and establish several long-term agreements. Recently, there have been some slowdowns in customer new tap-out activities, more in high-end than mainstream. However, our experience has shown that customers will embrace megatrends in the market that drive development of new ICM LPD designs, such as the rollout of 5G telecommunications the expansion of electronics in automotive applications, and, of course, the continued expanding need for consumer electronics. As a result, we believe the negative impact of any slowdown on electronics will be minor, as reflected in our Q4 guidance. We join our semiconductor peers in approaching the passage of chips and science act. Petronas, a critical member of the U.S. semiconductor ecosystem for 53 years, is the largest global photo mask manufacturer and the only domestic supplier of high-end commercial masks, including U.S. Trust products through 14 nanometers. In cooperation with CHIPS, we stand ready to invest and support the expansion of our customers' domestic manufacturing and technology needs. We performed very well in the third quarter, and we believe we are on track to have the best year in the history of the company. I'm proud of our team. And I want to thank all of our employees for their extraordinary work to achieve the quarter's results and look forward to accomplishing even more in the future. Thank you. At this moment, I turn the call to John.