Photronics, Inc.

Good day, and welcome to the Photronics Q4 FY23 earnings call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. As a reminder, this conference is being recorded Wednesday, December 13, 2023. I would now like to turn the conference over to Rochelle Burr, Chief Administrative Officer.

Thank you, Michelle. Good morning, everyone. Welcome to our review of Photromic's fiscal 2023 fourth quarter results. Joining me this morning are Frank Lee, our chief executive officer, Chris Progler, our chief technology officer, John Jordan, our chief financial officer, and Eric Rivera, our chief accounting officer and corporate controller. The press release that we issued earlier this morning, together with the presentation material that 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, and 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 information. During the course of our discussion, we will refer to certain non-GAAP financial metrics. These numbers are useful for analysts, investors, and management to evaluate ongoing performance. A reconciliation of these metrics to GAAP financial results is provided in our presentation materials. At this time, I will turn the call over to Frank.

Thank you, Richelle, and good morning, everyone. The phosphorus team had another outstanding year in 2023, and it is a record revenue for the sixth consecutive year. Over that six-year period, we have achieved a compound annual revenue growth rate of over 12%. For fall 2023, revenue grew 8% year-over-year, the photo mask market overall was fracked, and the semiconductor industry overall is expected to contract by up to 12%. For Chinese year-over-year revenue growth, once again offers testimony to the tendency of design-driven photo mask demand to be less cyclical than the industry in general. Most recent indications from industry leaders and from our customers is that the current semiconductor cycle contraction should transition to the next phase of growth around the middle of next year. Thus, if pay cycles and current observations can be considered indicators, photomask demand should resume a more robust growth phase during the 22nd to 3rd fiscal quarters. Margins for the quarter and year were also outstanding. We achieved operation margin of 28.5% for the first quarter and 28.4% for the full year 2023, the best year in the history of the company. The combination of the following has continued to support the sustainability of this margin level. The high operation leverage, stable pricing from our long-term purchase agreement, our focus on delivering the best quality mask, and our driving for being the low-cost producer. As a result of the solid operation results and the contribution from below-the-line items, we earned in Q4 $0.72 per share on a gap basis and $0.60 per share on a long gap basis. Strong cash flow was generated in 2023, contributing to a stronger balance sheet. and increasing our cash position with reducing debt. We continue to invest in growth, position us to continue the past several years strong performance. To summarize, we achieved another record year in 2023, growing revenue in frame market. Our team performed well and our customers continue to trust us as their photo mass partner. We are investing in high return projects and are positioned to continue to outgrow the market and create value for our shareholders. I'm proud of our accomplishment and excited about our future. And I would especially like to express my gratitude to the more than 1,800 employees that have worked hard to achieve these results. At this time, I will turn the call over to John to discuss the results further.