SkyWater Technology, Inc.

Ladies and gentlemen, thank you for standing by. And welcome to the Skywater Technology first quarter fiscal year 2021 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 this time, you will need to press star then one on your telephone. If you would like to withdraw your question, you may press the pound key. If you require any further assistance, please press star zero. I would now like to hand the conference over to your first speaker today, Heather Davis. Please go ahead.

Good morning, everyone, and welcome to Skywater's conference call for the first quarter of fiscal 2021. With me on the call today from Skywater are Thomas Sonderman, President and Chief Executive Officer and Steve Manko, Chief Financial Officer. I'd like to remind you that our call is being webcast live on Skywater's Investor Relations website at ir.skywatertechnology.com. The webcast will be available for replay shortly after the call concludes and will remain available for one year. During this call, any statements made about our future financial results and business expectations are forward-looking statements. These statements are subject to risk and uncertainties that could cause our actual results to differ materially. For discussion of these risks and uncertainties, please refer to our filings with the Securities and Exchange Commission, including our earnings release filed on Form 8K yesterday and our prospectus filed on April 22, 2021. All of our forward-looking statements are made as of today, and we assume no obligation to update any such statements. During this call, we will discuss non-GAAP financial measures. You can find a reconciliation of these non-GAAP financial measures to GAAP financial measures in our earnings release which is available on our investor relations website. A must-noted, all comparables referenced today are versus the prior year or the first quarter of fiscal 2020. With that, let me turn the call over to Tom.

Thank you, Heather. Good morning to everyone joining our first earnings call at Skywater Technology. We appreciate your interest. It's been an incredible journey from the formation of our company in March of 2017 to the successful completion of our IPO last month. Today, I'll briefly cover last quarter's financial highlights and reinforce why we're optimistic about the growth opportunities ahead. Steve will then go into further detail on our financials. In the first quarter, net sales grew 30% to $48.1 million last driven by an acceleration in our advanced technology services or ATS business. ATS sales were $38.1 million, an increase of 61% over Q1 of 2020. We believe this record revenue is a testament that our strategy is working. Gross margin improved 170 basis points to 19.1%. Our net loss attributable to shareholders was $2.8 million, and adjusted EBITDA was $5.6 million. Our vision at Skywater is to improve the world by revolutionizing technology realization because we're impatient waiting for the promise of tomorrow, so we're focused on making it happen faster today. Our industry-transforming technology-as-a-service, our TAS business model, allows us to co-create next-generation technologies with our customers, accelerating their time to market, with the confidence of automotive quality manufacturing and extensive IP protection. Since our inception, Skywar has been committed to accelerating the development of next wave technologies in partnership with our customers. I am proud to announce one of those today, Rocklea Photonics. After a multi-year technology and product development collaboration, we are now aggressively moving their Photonics First platform to volume production. This is an exciting milestone for both companies, and we are proud to have reached it together. During the quarter, we also continued to fill our ATS pipeline with new customer wins across several technology platforms and verticals. Our active customer engagements leverage both our emerging technology and feature-rich platforms. Our strong customer acquisition capability is supported by a world-class sales and business development team. We expect to continue to add the best talent in the industry as we grow our core customer base while expanding programs with our existing customers. In collaboration with our strategic partners, we have built a strong foundation of differentiated technology platforms that we believe are well positioned to drive significant revenue growth for our company over the next several years as they transition through our technology as a service offering. I would like to discuss four of these in more detail. The first is extreme environment microelectronics. The United States Department of Defense awarded Skywater $170 million as part of a public-private partnership in October of 2019. Since completing the expansion of our Minnesota fab last October, we've made good progress towards qualifying our 90 nanometer fully depleted silicon on insulator technology. in partnership with MIT Lincoln Labs. The first copper wafers from our dual-damaging interconnect process were also successfully fabricated during the quarter. The rapid enablement of this radiation-hardened platform for space-based electronics is being achieved through direct engagement with multiple USG primes and design houses through our early access programs. The second area of growth is advanced packaging. We continue to execute the startup of our new advanced packaging fab in Osceola County, Florida. This includes hiring 20 new Skywater employees who are actively working on both clean room and process tool qualifications. The existing Department of Defense programs at the fab have been reactivated. We also have several exciting new customer engagements that continue to make good progress towards design wins. These include both existing customers who are consolidating their body chains at Skywater as well as brand-new engagements. We expect Skywater's domestically sourced and highly differentiated advanced packaging capabilities to bring significant value to both current and future customers. The third area is biohealth. Leveraging our expertise in MEMS technology, we continue to accelerate the technology realization of several new point-of-care diagnostic solutions. Many of these applications are one time use, providing the potential for robust volumes as these new microfluidic based technologies move into the market over the next couple of years. Skywater is also proud to continue to support the work of COVID-19 epidemiologists with our DNA sequencing technology. And finally, a few comments on our high performance power management and connectivity platforms. Building on a long legacy of producing feature-rich mixed signal devices, our Minnesota fab remains focused on ramping our S-130 platform for existing automotive and IoT customers. This includes executing our capacity expansion plans. We also continue to attract new customers with our highly differentiated S-130 platform, including, for example, a telecommunications company that is working with us to rapidly bring one of their new products to market. In addition, two of our power management customers have moved into product qualification, keeping pace with our planned ramp for these differentiated discrete power MOSFETs in the second half of this year. Our nation's focus on the importance of domestically sourced semiconductors is very encouraging. Skywater is a strong believer in the importance of public-private partnerships. as is evident by our DOD-funded carbon nanotube 3DSOC and RadHard programs in Minnesota and our new advanced packaging partnership with Osceola County in Florida. Currently, only 12% of worldwide semiconductor manufacturing occurs in the United States. This must change. I was honored to represent Skywater at President Biden's recent CHIP Summit to reinforce the importance of domestically sourced semiconductors across the entire value chain. We believe semiconductors are the fuel of the 21st century. It is critical for our nation to commit to increasing the research, development, and manufacturing of semiconductors, from wafer fabrication to advanced packaging to final assembly and test. We believe Skywater remains uniquely positioned to take advantage of this renaissance in domestic semiconductor R&D and manufacturing, which is directly coinciding with the increased adoption of many of the exciting megatrends affecting our industry. At a time when the appetite for co-creating possible has never been greater, we're excited to be able to accelerate the adoption of our customer-driven technology-as-a-service business model across the entire semiconductor value chain. I will now turn the call over to Steve for further information on our financial performance in the quarter. Thank you, Tom.