Ultra Clean Holdings, Inc.

And welcome to the Ultra Clean Technology Q2 2023 Earnings Call and Webcast. 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 on your telephone keypad. 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 Panetto, Investor Relations. 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 the financial review, and 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'll start with a recap of our second quarter performance and provide some commentary on current and long-term industry dynamics before turning the call over to Sherry for a detailed financial review. Then we'll open up the call for questions. During the second quarter, the semiconductor industry remained challenged in certain segments while other areas remained strong. trailing edge, servers, and China ordering, and taking delivery of tools were bright spots. However, PC and consumer end markets that rely on advanced memory and foundry logic spending remained weak. Headwinds included elevated inventory levels across the supply chain, macroeconomic and geopolitical instability, including interest rates, years of recession, inflation, and export controls. all of which are likely to influence our industry for a few more quarters. Product mix and lower utilization at some sites on reduced revenue were the overriding factors that affected our second quarter results. UCT's legacy products business performed as expected in this dynamic environment with some adjustments to orders, but no notable push-outs or cancellations. Although a small percentage of our total products revenue, our non-semi business saw some unexpected volatility in the second quarter, particularly in the process technology space where we supply semi-like parts to non-semi businesses in display, industrial, and medical. And lastly, our service business declined from the first quarter as some customers adjusted their schedules to realign with ongoing and market weakness. As anticipated, The cost reduction initiatives we introduced earlier this year have begun to materialize in our financial results. Inventory decreased and OPEX trended down, resulting in healthy cash flow. Footprint optimization and site efficiencies to adapt to current demand while preparing for the ramp are on track, but are much larger in scale, so take time for profitability to be fully appreciated. We will continue to reduce inventory and trim expenses throughout the third and fourth quarters, and are being extremely prudent and strategic when making investments to align with our long-term capacity with our customers' roadmaps. A highlight this quarter worth noting is that UCT was awarded Intel's Distinguished Supplier Award, which recognizes partners that exemplify Intel's standard of excellence. To qualify for an Intel EPIC Award, suppliers must not only exceed expectations, but meet aggressive performance goals. Receiving this award was a true honor, and I want to thank our team for their world-class commitment to continuous improvement, making UCT widely considered the best of the best. In summary, before turning the call over to Sherry, we are aligned with our customers and industry sentiment that WFC is at the bottom of the trough and expect our revenue and profitability to bounce around these levels for the next few quarters. Our view for a ramp in 2024 remains intact. However, there are too many moving parts today to call the exact timing and shape of the recovery. Overall, based on industry estimates and confirmed by our internal marketing team, we are extremely optimistic about the long-term growth trajectory of our industry and do see a clear path to a trillion-dollar chip industry by 2030. I want to thank all of our employees for their relentless drive to succeed in this challenging environment. I also want to thank our shareholders for their patience while we adjust our business during this phase of the cycle to ensure stronger growth and profitability during the next upturn. And with that, I'll turn the call over to Sherry. Sherry?