Ultra Clean Holdings, Inc.

Good day and welcome to the Ultra Clean Technology second quarter 2021 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 questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Rhonda Bonetto. Please go ahead.

Thank you, operator. Good afternoon, everyone, and thank you for joining us. With me today are Jim Schulhammer, Chief Executive Officer, and Sherry Savage, Chief Financial Officer. Jim will begin with some prepared remarks about the business, and Sherry will follow with a financial review. Then we'll open up the call for questions. Today's call contains forward-looking statements that are subject to risks and uncertainties. For more information, please refer to the Risk Factors section in our SEC filings. All forward-looking statements are based on estimates, projections, and assumptions as of today, and we assume no obligation to update them after this call. Discussion of our financial results will be presented on a non-GAAP basis. A reconciliation of GAAP to non-GAAP can be found in today's press release posted on our website. And with that, I'd like to turn the call over to Jim. Jim?

Thank you, Rhonda. and good afternoon, everyone. Thank you for joining us today. I'm going to start with a brief review of our second quarter performance while sharing my thoughts on the industry and how UCT continues to increase its value within the semiconductor ecosystem. After that, I'll turn the call over to Sherry for a financial review, and then we will open up the call for questions. By maximizing our current market position and capabilities, and consistently working to meet customer demand, UCT again reached new revenue and EPS milestones. Total revenue for the second quarter was just over $515 million, a 50% increase year over year, and EPS grew 32% to nearly $1. Over the past five years, we have consistently outperformed the markets we serve. This track record, combined with our commitment to investing in our future, paves the way for a very exciting roadmap for growth in 2021 and beyond. As the semiconductor industry continues to be stretched by record high demand, we are leveraging our leading position as a partner of choice to help our customers and their customers accelerate the rapid migration towards next generation devices. The global semiconductor industry has historically been driven by demand from electronics, such as smartphones and computers. More recently, continued enhancements of existing products and the inclusion of emerging technologies such as AI, 5G networks, and high-performance computing applications are creating sustained demand increases across a much broader end market. This megatrend is enabling greater visibility with multi-year, record-breaking industry CapEx plans for leading and trailing-edge capacity to support the extended ramp. UCT's broad spectrum of products and services are increasingly relevant to the success of our customers, and this gives us a significant competitive advantage. We are one of the few semiconductor-focused manufacturers with the proven ability to sustainably support the dynamic product roadmaps and stringent quality levels required for advanced chip manufacturing. To ensure we are ideally positioned to deliver value quickly and efficiently to our customers worldwide, we are making strategic investments to expand our capacity to provide additional leading-edge and specialty capabilities to support our growth strategy over the long term. Our new state-of-the-art facility in Malaysia is on schedule, and customer qualifications are beginning this month. Fortunately, we are located in northern Malaysia, where COVID cases remain low compared to the rest of the country, so we have seen no interruptions to speak of. We remain on track to start initial production in early September and expect to progressively ramp this year and into 2022 to meet our customers' increasing needs. The timing of this additional capacity is ideal as it strategically expands our capabilities on existing and new customer platforms at an optimal time. Our broader capacity expansion program stretches beyond Malaysia and includes strategic investments designed to capture the many significant profitable growth opportunities we see, not only in wafer fab production equipment, but also in service, subfab support equipment, and fab infrastructure as well, as the industry continues to transform at a very rapid pace. We will continue to engage with our customers to design, manufacture, and service the best products in the best way possible to address their needs in a sustainable manner. The global pandemic continues to be a risk factor as the Delta variant is spreading quickly across many regions. Like we have done since the pandemic began, UCT will continue prioritizing the health and well-being of all its employees while ensuring business continuity. All safety protocols in our BCP playbook remain in place at each site and all UCT facilities remain fully operational. We are extremely grateful that we have had zero employee to employee transfers of the virus within our 6,000 plus global workforce since the pandemic began. We continue to work closely with our supply chain to increase resilience and provide business continuity across all our products and service lines. 2021 is shaping up to be another year of outperformance for UCT. Our growing suite of capabilities, additional capacity, A strong balance sheet ideally positions us to capitalize on the robust demand trend, returning considerable value to our shareholders over the long term. Before handing the call over to Sherry, I want to again thank our employees and our suppliers and partners for their commitment and incredibly hard work. And we look forward to speaking with you again in a few months. And with that, I'll turn the call over to Sherry to review our financial activities and performance. Sherry?