Semtech Corporation

Thank you. Thank you. Good day and welcome to the FMTC Third Quarter 2020 Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask a question. To ask a question, you may press star then one To withdraw your question, please press 7-2. Please note, this event is being recorded. I would like to turn the conference over to Blair McKinney, Vice President of Finance. Please go ahead.

Thank you. Before I begin the call, I'd like to remind everybody that the presentation will include statements about expected future events and financial results that are forward-looking in nature and subject to risks and uncertainties. The company cautions that actual performance will be affected by a number of factors, many of which are beyond the company's control, and that future events and results may vary substantially from what the company currently foresees. Discussion of the various factors that may affect future results is contained in the company's annual report on Form 10-K, quarterly reports on Form 10-Q, and subsequent reports on Form 8-K and other filings with the Securities and Exchange Commission. All forward-looking statements are made as of the date of this call. And except as required by law, we do not intend to update this information. During the call, we will also reference certain non-GAAP measures, including adjusted gross profit, adjusted net income, EBITDA, and adjusted EBITDA. Please refer to the press release we issued yesterday for reconciliations between GAAP and adjusted results. Management believes that these non-GAAP financial measures, when used in conjunction with GAAP financial measures, provide useful information to investors about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to the key metrics SMTC uses in its financial and operational decision-making. The company's management believes that adjusting for the additional temporary costs attributable to the COVID-19 pandemic allows for a better comparison of the company's performance to prior periods, which is consistent with the company's financial covenants in its financing agreements. These non-GAAP financial measures are used by management to manage and monitor SMTC's performance and frequently used by analysts, investors, and other interested parties to evaluate companies in SMTC's industry. The presentation of this financial information is not intended to be considered in isolation or as a substitute for or superior to the financial information prepared and presented in accordance with GAAP and should not be construed as an inference that SMTC's future results will be unaffected by any items adjusted for in these non-GAAP financial measures. Finally, this conference call will be available on the Investor Relations section of SMTC's website. That includes the link in today's webcast at www.smtc.com. The company has also posted a slide deck, which interested parties can find next to the link for today's webcast. We'll be referring to these slides from time to time during our call this morning. I will now pass the call over to Ed Smith, SMTC's President and Chief Executive Officer.

Thank you, Blair. Welcome and good morning. Ladies and gentlemen, I'm Eddie Smith, SMTC's President and Chief Executive Officer. On this call with me today is Rich Fitzgerald, our Chief Operating Officer, and Steve Wozniak, our Chief Financial Officer. As I did last quarter, I want to thank the entire SMTC team and our supply chain partners for their hard work and dedication as we continue to operate our business with the added challenges brought on by the global fight against the COVID-19 pandemic. I'd also like to thank our stockholders for their continued patience and support during these trying times. Before I provide a quick financial recap, I want to note that while we are pleased with our business execution across all facets of our operations and response to the challenges posed by the COVID pandemic, the fight isn't over yet. Our COVID-19 prevention activities go beyond the basic requirements that are prescribed by the various governments and healthcare agencies. As a result of these actions and our ability to remain focused, our facilities remain open and in operation. And we look forward to the day when the pandemic is behind us and when we expect to emerge as even a stronger and more profitable company. As you can see on slide three, revenue for third quarter was $99.5 million, up 12.3% from the $88.7 million reported in the same quarter a year ago, and up 10.1% from the 90.4 reported in the prior quarter. Customer demand during the third quarter of 2020 continued to track to our internal plans as we expanded our customer base and increased our market share. We've been successful with our in-market diversification, dedication to putting the customer first, and adapting our sales and onboarding processes to address the challenges posed by COVID-19 pandemic. While these processes may be a little bit different and perhaps take a little longer and require more meticulous planning, we expect to continue to gain market share and grow our sales funnel. During the third quarter of 2020, we continued to operate as a COVID compliant, safe workplace and incurred $1.3 million to protect our employees and their families. Adhering to the health and safety action plans that we discussed in our previous conference calls, and by carefully managing our expenses and business operations. We were able to once again generate improving bottom line results, including adjusted EBITDA of $7.5 million, or 7.6% of revenues, that enabled us to report earnings per share of $0.04 and adjusted earnings per share of $0.13, as noted on slide four. I'm pleased by the trust of our customers at putting us as our business development teams continue to expand SMTC's market share and expand our sales funnel. We've been successful in securing $46 million in new awards and bookings during the third quarter, primarily from five new customers and one existing customers in the aerospace, defense, and industrial IoT markets. Let me quickly share with you just one example of why we're winning new customers and expanding our business with our existing customers before Steve discusses the Q3 financial results and provides our outlook for the balance of the year and our initial expectations for 2021. Recently, after extensive supplier evaluation process that involved dozens of EMS providers, and because of our track record of superior supply chain management, we were selected by a leading multi-billion dollar a year international supplier of sophisticated hardware and software products as one of their two global preferred suppliers. This customer who provides products to a variety of growth industries, including many we are targeting, such as defense, aerospace, industrial IoT, test and measurement, and medical and safety, also values our leadership team's ability and willingness to develop flexible, innovative, and strategic solutions to its complex manufacturing requirements. Manufacturing for this customer award started in Q2 2020 and will continue into 2021 at four of our facilities in North America. I want to thank Rich, who has decided to pursue other opportunities for his leadership and guidance over the past three and a half years, during which time SMTC tripled in size with increased profitability and customer satisfaction. Rich will continue in his current CEO role during the search for a successor, which is expected to be completed by the end of first quarter 2021. Steve Wozniak, our CFO, will now discuss our third quarter results in more detail. After Steve's remarks, I will provide some additional commentary before we open the call to questions. Steve.