Veeco Instruments Inc.

Good day and welcome to the VCO Instruments Incorporated corporate hosted Q3 2020 earnings call. At this time, I would like to turn the conference over to Anthony Bencivenga, Investor Relations. Please go ahead, sir.

Thank you, and good afternoon, everyone. Joining me on the call today are Bill Miller, VECO's Chief Executive Officer, and John Kiernan, our Chief Financial Officer. Today's earnings release is available on the VECO website. Please note that we have prepared a slide presentation to accompany today's webcast. We encourage you to follow along with the slides on VECO.com. This call is being recorded by Veco Instruments and is copyrighted material. It cannot be recorded or rebroadcast without Veco's express permission. Your participation implies consent to our recording. To the extent that this call discusses expectations about market conditions, market acceptance, and future sales of the company's products, future disclosures, future earnings expectations, or otherwise make statements about the future. Such statements are forward-looking and are subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made, including as a result of the COVID-19 pandemic. These factors are discussed in the business description, management's discussion and analysis, and risk factors sections of the company's report on Form 10-K, an annual report to shareholders, and in our subsequent quarterly reports on Form 10-Q, current reports on Form 8-K, and press releases. Vigo does not undertake any obligation to update any forward-looking statements, including those made on this call, to reflect future events or circumstances after the date of such statements. During this call, management may address non-GAAP financial measures. Information regarding such non-GAAP financial measures, including reconciliation to GAAP measures of performance, is available on our website. With that, I will turn the call over to Bill for his opening remarks.

Thank you, Anthony. Good afternoon, everyone, and thank you for joining the call. I hope you and your families are well. I'm excited to talk to you today about the current status of a United VICO. We are making great progress becoming a more cohesive organization as we implement our two-phase strategy. As a result of our teamwork, determination, and accountability, we have been operating remarkably well through this global pandemic. I am very proud of our VECO employees worldwide. As you know, we are investing in our core technologies to drive organic growth. It is this investment which will drive the next phase of Veco's growth by helping our customers enable a new experience age for consumers with game-changing applications like artificial intelligence, virtual and augmented reality, and autonomous driving. These applications require new device architectures, new materials, and higher performance. Vico has a history of solving difficult materials challenges, which gives us a unique advantage in delivering scalable technology solutions. In short, Vico is well-positioned to play a meaningful role in driving this new age with our customers. Today, I will take you through our Q3 highlights, John will provide a financial update and guidance, and then I will discuss our markets and technologies before taking your questions. Q3 marked another quarter of solid execution, with results driven by strength in our data storage business, and revenue came in at $112 million, which was above the midpoint of our guidance. Our gross margin was again healthy at 44%, and along with well-managed expenses, we achieved non-GAAP operating income of $14 million and non-GAAP earnings per diluted share of 22 cents. Our sustained profitability is a result of the work we completed over several quarters to improve our operating model, such as expanding gross margins and restructuring to reduce costs. And we increased our cash balance by generating $10 million in cash flow from operations. There has been significant activity in our data storage market related to data center and cloud storage demand. We are also seeing significant customer engagement in advanced-node semiconductor manufacturing, 5GRF, and power electronics. Entering the fourth quarter, we are in a strong backlog position. Our success in Q3 would not have been possible without putting employee health and wellness first. We maintain all health measures at our sites and have been working closely with our supply chain partners, enabling us to operate at normal capacity. As an added precaution and consistent with our commitment to safety, we communicated that all employees who can work from home should continue to do so into Q3 of 2021. Overall, we are confident looking forward. We have strong customer engagements and have a healthy backlog. The market drivers linked to the experience age, such as data center, 5G, semiconductor, power electronics, and photonics, are all trending positively and are aligned with FICO's growth initiatives. We believe we will have a strong finish to 2020 and are optimistic about 2021. And with that, I will turn the call over to John for a review of the financials.