Photronics, Inc.

Good day and thank you for standing by. And welcome to Patronix fiscal third quarter 2025 financial results conference call. At this time, all participants on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. Please note that today's conference is being recorded. I will now hand the conference over to your speaker host, Ted Merle, Vice President of Investillations, please go ahead.

Thank you, Operator. Good morning, everyone. Welcome to our review of Photonics' fiscal third quarter 2025 financial results. Joining me this morning are George Mekrakasas, Chairman and CEO, Eric Rivera, CFO, Frank Lee, Head of our Asia Operations, and Chris Progler, CTO. The press release we issued earlier this morning, together with the presentation material that accompanies our remarks, are available on the investor relations section of our website. This call will include forward-looking statements that involve risks and uncertainties that could cause Votronics results to differ materially from management's current expectations. We encourage you to review the notice regarding forward-looking statements contained both in today's earnings release as well as our most recent SEC filings. In the coming weeks, we will be participating in the Singular Research Investor Conference, and we'll be meeting with investors at the Semicon West Trade Show, which will occur in Phoenix this year. I will now turn the call over to George.

Thank you, Ted, and good morning, everyone. We had another solid quarter with sales of 210 million ahead of expectations and flat both year over year and sequentially. Our flat panel display business continues to perform well to offset more challenging demand and IC. Non-gap diluted EPS was also well ahead of guidance at 51 cents. At Photronics, we leverage our legacy as an efficient photo mask provider, critical to the manufacture of semiconductors to drive profitability and cash flow. In fiscal 2025 to date, operating cash flow has been 25 percent of revenue, which has enabled a strong balance sheet with $576 million of consolidated cash and short-term investments. We also continue to return cash to shareholders by repurchasing 21 million of stock in the quarter, bringing the total year-to-date to $97 million. After taking over as CEO three months ago, we have been evaluating opportunities, our positioning in the market, and our internal operational execution. With the market driving geographic diversity of semiconductor production, we have identified excellent opportunities that we are looking to capitalize on. We are leveraging our strong balance sheet to reinvest in our business, driving competitive advantages, revenue and earnings growth in the future. As part of the strategy back in December, we communicated our initial step to geographically diversify our revenue with the announced U.S. expansion plans. We have been expanding our cleanup facility in Texas for capacity and capability extensions to service increased demand for U.S. mid-range nodes. We're also elevating our leading edge production capabilities in Idaho with the installation of a new multi beam mask writer to enable the highest end of our product portfolio. These US projects coincide with a significant number of semiconductor industry announcements over the past year regarding major manufacturing reshoring of semiconductor production to the United States. As a merchant market leader in the U.S., we are further strengthening our position to benefit from this reshoring of semiconductor production. Expanding our geographic revenue diversification strategy within our existing footprint for the past several quarters, we have been assessing and closely collaborating with customers in various geographic regions to further strengthen our existing manufacturing capabilities. More specifically, we are evaluating capability extensions at Photronics facility in Asia to extend from 14 down to six and eight nanometer production. We would expect these new capabilities to contribute to revenue in the latter half of 2027 or 2028. We also continue to invest prudently in great opportunities and evaluate our optimal geographic footprint by collaborating with our customers to support their growth initiatives. Over time, Our internal investments are expected to deliver a more diversified and robust geographic revenue base than we recognize today, which we expect to offset the growing competitive environment in the China IC market. Regarding China, since Frank led the establishment of our operation there over five years ago, we have achieved many close customer relationships that have contributed to meaningful revenue growth and cash flow for the company. We will continue to optimize our product mix there to maintain our business performance. As we expand our global capabilities, it becomes more critical than ever that we execute a fully integrated and world-class global sales program. Toward that, we have recently hired a new head of global sales who will drive a coordinated global sales strategy designed to capture market share in this continuously evolving global semiconductor landscape. Further, as we prepare for the next stage of Photronics growth and continue to invest for the future, We will leverage our unparalleled operational leadership that forms the basis of our 56-year legacy. We remain relentless in our efforts to improve efficiencies across the organization, further optimizing our cost structure and maximizing profit potential. This is an area that we have closely evaluated over the past three months. We're not making nor do we anticipate making drastic wholesale changes. Rather, we periodically make strategic and targeted organizational improvements within information technology, operations, and sales to best deliver business performance within our expanding network. Returning to our results for the third quarter, in our integrated circuits and market, revenue of 148 million reflects the continued headwinds experienced through 2025, including the uncertainty associated with geopolitical trade restrictions, particularly in the Asia region that are muting demand. Similarly, unresolved tariff negotiations have temporarily influenced design release from our customers in Asia. Turning to our flat panel display market, revenue of $63 million was the result of strong demand from our customers in Korea and China, driven by the timing of major smartphone, tablet, and laptop design releases. The display market continues to prioritize development of panel products with enhanced capabilities, such as faster refresh rates and enhanced energy efficiency of mobile devices that must have thinner, lighter, and more flexible displays. As a result, flat panel makers are actively developing new technologies for advanced backplanes and touch panels that require more high-end mask layers. Utilization of these higher value masks along with the increasing adoption of foldable consumer electronics and scaling to larger form factors are favorable demand drivers that we expect to capitalize on over the next several years. I now turn the call over to Eric to review our third quarter results and provide fourth quarter guidance.