Good day, ladies and gentlemen, and welcome to Ichor's third quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will be given at that time. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Claire McAdams, Investor Relations for Ichor. Please go ahead. Thank you, Victoria. Good afternoon, and thank you for joining today's third quarter 2022 conference call. As you read our earnings press release, and as you listen to this conference call, please recognize that both contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, and which could cause actual results to differ materially from such statements. These risks and uncertainties include those spelled out in our earnings press release, those described in our annual report on Form 10-K for fiscal 2021, and those described in subsequent filings with the SEC. You should consider all forward-looking statements in light of those and other risks and uncertainties. Additionally, we will be providing certain non-GAAP financial measures during this conference call. Our earnings press release and the financial supplement posted to our IR website each provide a reconciliation of these non-GAAP financial measures to their most comparable GAAP financial measures. On the call with me today are Jeff Andresen, our CEO, and Larry Sparks, our CFO. Jeff will begin with an update on our business and a review of our results and outlook, then Larry will provide additional details of our third quarter results and fourth quarter guidance. After the prepared remarks, we will open the line for questions. I'll now turn over the call to Jeff Andresen. Jeff? Thank you, Claire, welcome to our Q3 earnings call. Q3 revenues were a record $356 million at the upper end of our guidance range and up 8% from the second quarter. Similar to last quarter, we experienced continued improvement in component supply. Our gross margin improvement in the quarter was well above forecast, improving 100 basis points over Q2. As a result, we exceeded the upper end of our profitability targets and reported record quarterly earnings of $1.22 per share. Since our last earnings call, expectations for levels of wafer fab equipment investments in the coming year have declined significantly. The initial forecast reduction centered primarily around the increasing softness seen in the memory market and increasingly conservative commentary around memory CapEx going into 2023. In early October, news of export restrictions to certain domestic semiconductor manufacturers in China effectively reduced WFE forecasts by $8 billion-$10 billion for next year. We have incorporated the impact of the export restrictions in our outlook and build plans. We estimate that the total impact of these changes to be approximately $20 million this quarter, and as such, the midpoint of our Q4 revenue guidance represents a 6% decline from our record third quarter. Our above-industry revenue growth expectation for 2022 is unchanged, however, at 20% year-over-year growth, assuming we come in around the midpoint of our Q4 guidance. As we are nearing the end of a record revenue and earnings year, our focus turns to the expected spending environment over the next several quarters and our ability to flex our variable operating model to adjust to lower levels of WFE demand in 2023. I am sure many of you recall the last industry downturn, which began in mid-2018 and continued until late 2019. This downturn resulted in a 25% decline in our annual revenues in 2019, yet we generated over $60 million in EBITDA and over $75 million in free cash flow over five quarters of reduced customer demand. As we look at our business today, however, there are a number of reasons why we believe our revenues will perform better than the expected 20% decline in overall WFE next year. First is the significant reduction in our exposure to the memory market. In 2018, our two largest customers comprised 88% of our total revenue, and based on their combined memory revenues that year, we estimate that about 70% of our sales were from the memory market. Since then, the vast majority of incremental growth in WFE has occurred in the foundry and logic markets, and today, we estimate the combined memory exposure for our two largest customers to be less than 45%. At the same time, our business with other customers has grown from just 12% of our sales in 2018 to now over 20% of our sales in 2022. The growing share of our business from these additional customers also is far less memory-driven, and a portion of our revenues from the IMG acquisition is completely independent from the semiconductor industry. In total for 2022, we estimate that only 35%-40% of our sales this year is memory-related, compared to over 70% back in 2018. The second reason why we expect our revenues in 2023 to perform better than WFE is because a growing portion of our revenue serves the EUV market. Consistently increasing build rates and higher expected EUV system shipments next year are resulting in EUV revenues continuing to grow in 2023. Our own forecast for next year includes a higher level of EUV-related gas delivery business. Third, we expect to benefit from success in gaining market share and winning new product evaluations. Historically, our customers have taken advantage of temporary slowdowns in industry demand to invest more resources into new product evaluations and qualifications. Our areas of focus remain: qualifying more of our internally developed machining components, leveraging our global Weldment footprint to gain additional share, qualifying our next-generation gas panel, and moving aggressively to make progress qualifying our chemical delivery system in Japan now that it is open to visitors. Beyond these opportunities, we recently began working with a customer on a gas delivery solution that serves the growing silicon carbide market. This is in the very early stages but fits our capabilities very well. Lastly, we are not anticipating the same level of impact from inventory reductions as we did in late 2018. The reason why we expect this dynamic is different today is because our industry has been supply-constrained for most of the last two years, and was shipping at levels below unconstrained demand through most of 2022. Therefore, we believe that the inventory levels at our customers for our component products have not grown to the same level as we witnessed in 2018. At this time, with our current visibility, we are expecting mid to high single-digit% declines in our revenues on a sequential basis, at least for the next couple of quarters. This assumes that the majority of WFE declines will be in the memory segment, which we estimate to comprise just 35%-40% of our sales in 2022. Within a backdrop of more stable levels of investment ahead for foundry and logic markets, we also expect to grow our EUV business in 2023. We also see opportunities for increased revenues from share gains and growth in non-semi markets next year. In this environment, we believe our business model will continue to demonstrate the improvements we made to our gross margin profile over the last few years. We have maintained good discipline on discretionary spending through 2022. We will continue to invest in our R&D programs and optimization of our capacity in support of the future forecast for a $100 billion-plus level WFE. In summary, in this highly dynamic business environment we are all navigating, we believe Ichor continues to be well-positioned to outgrow the industry. Over the past seven years, WFE has grown at an annual rate of 16%. At the midpoint of our Q4 guidance, our seven-year CAGR will be 24%. This roughly 50% outperformance reflects the strengths of our primarily served markets within WFE, continued share gains, and strategic M&A. Furthermore, our annual growth in net income over this period is 27%, demonstrating a successful track record in growing earnings faster than revenues. We expect to continue executing on our strategies to outgrow the industry. We are confident that we will show strong financial results during 2023, which by the way, is expected to be the third-largest WFE year in our industry's history. With that, I'll now turn the call over to Larry. Larry? Thanks, Jeff. First, I would like to remind you that the P&L metrics discussed today are non-GAAP measures. These measures exclude the impact of share-based compensation expense, amortization of acquired intangible assets, non-recurring charges, and discrete tax items and adjustments. There is a very helpful schedule summarizing our GAAP and non-GAAP financial results, including the individual line items for non-GAAP operating expenses such as R&D and SG&A, in the Investors section of our website for reference during this conference call. Third quarter revenues were a record $356 million, up 8% from Q2 and 35% higher than Q3 of last year. With revenues at the upper end of expectations, gross margin of 18% exceeded our forecast for the quarter and was up 100 basis points from Q2. About half of the sequential increase was due to factory volume leverage, with the other half resulting from the recovery of some of the cost increases we've incurred over the past year or so. Q3 operating expenses were $22.8 million, a bit lower than forecast due to the timing of R&D and other investments shifting to Q4. The resulting operating margin was 11.6%, up 160 basis points from Q2 and about 120 basis points higher than the midpoint of our guidance. As a result of higher interest rates, interest expense increased to $3.2 million, in line with our expectations, while our effective tax rate was lower than expectations at 7.5%, reflecting the revised full-year effective rate of about 10%. The resulting EPS for Q3 was $1.22, $0.11 above the high end of guidance. The primary driver of the earnings beat was our gross margin performance well ahead of forecast, followed by revenue volume at the high end of the range. The lower tax rate for the quarter benefited earnings by about $0.05 per share. Lastly, Q3 EPS also benefited from slightly lower OpEx. Now we'll turn to the balance sheet. As expected, cash conversion of working capital improved in the third quarter, and we generated $11.5 million of free cash flow. Cash from operating activities was $19.6 million, and CapEx for the quarter was $8 million. Inventory of $291 million was flat quarter-over-quarter, with turns remaining at four, and receivables DSO were 47 days compared to 44 in Q2. Total cash was $56.5 million at quarter end, up about $10 million from Q2, and total debt was $304 million, down about $2 million from Q2. I will turn to our fourth quarter guidance. With revenue guidance in the range of $315 million-$355 million, our Q4 earnings guidance is $0.80-$1.04 per share. The midpoint of revenue guidance at $335 million reflects about a 6% sequential decline from Q3 as a result of the recent export restrictions. At this revenue level, we are expecting gross margin of approximately 17.2%, representing a slight improvement compared to similar revenue volumes as Q2. This is aligned with our objective to continue to increase gross margin by about 20 basis points a quarter through our ongoing cost reduction programs and growth in our components businesses. Given the timing of our R&D expenses and higher audit fees versus Q3, we expect Q4 operating expenses to increase slightly to approximately $23.2 million. As a reminder, we typically see some seasonal increases in Q1 each year, but we are also looking at areas where we can reduce costs in order to offset some of these typical increases early in 2023. We expect our interest expense will be $4.2 million in the fourth quarter, reflecting the recently announced increases in interest rates. Our tax rate in Q4 is expected to be 10%-11%, and we estimate our fully diluted share count to be approximately 29.1 million shares. Operator, we are ready to take questions. Please open the line. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using a speaker equipment, it may be necessary to pick up your handset before pressing the keys. One moment, please, while we pull for questions. Our first question comes from Quinn Bolton with Needham & Company. Please go ahead. Hey, Jeff and Larry, congratulations on the nice and record third quarter results. I guess, Jeff, you went through a lot of reasons why you think you could outperform WFE next year. I guess my basic question is, if you think WFE is down 20%, do you think Ichor is down 10%-15%? What kind of outperformance might you expect given the four or five drivers that you went through in the script? Thanks, Quinn. Good question. If I had to put a number on it today, I'd probably say about 5% better or so. We're working on another grouping of shared gains, and obviously with EUV growing, that helps buffer it, and we have some opportunities like we talked about in our IMG acquisition and that probably our memory exposure is down tremendously. We're still seeing strength in foundry and logic at both kind of the leading edge and at the trailing edge there. That I think bodes well as well. If you had to pin me into a number, I'd probably say about 5% or so. Perfect. I guess a related question for Larry. I know you mentioned the goal is to gain or to improve gross margin about 20 basis points through product mix as well as cost reduction activities, but there's a big leverage component to the business. If sales are down mid-teens in 2023, how would you expect gross margin to perform in that environment? We probably expect about a 25% gross margin flow through. If you look at a drop in revenue into 2023, it is slightly higher than maybe in the last downturn because we have a little more investment in our machining business, which does help us drive more share and hopefully higher margins, but does bring with it a certain increase in fixed costs. Got it. Maybe lastly from me, Jeff, any updates on just the next generation gas panel evaluations that are in the field? Yeah, as we talked about, we have got two out there. One at a new customer and one at an existing customer. They are moving along. These usually take nine months to 12 months, so we are probably in the first three innings or so of both of these, one a little farther than the other. They are just progressing, and we are pretty hopeful that one of these will get accepted, and second half of next year, we will start to see first revenues from them. Perfect. Thank you. I will get back in queue. Thank you, Quinn. Next question comes from Craig Ellis with B. Riley Securities. Please go ahead. Thank you, guys, congratulations on the nice execution in the quarter. I wanted to follow up on one of the items, the gross margin. Larry, great to see the 18%. The question is this, I think you noted that there was both volume and reduced input or other cost pressures for that latter item. How much of the increase in gross margin was it? And as we look out over the next couple quarters, given trends in the supply chain, what would you expect, plus or minus from that variable as we look ahead? Yeah. Let me just describe what happened there. I think we had increases over the last probably 12 months of freight expedites, choosing different suppliers, working with our customers to find alternatives, also between some overtime and other things that we've done in support of delivering product and kind of meeting customers' flexibility regarding what to ship to them. This quarter, we actually completed our cost-sharing discussion with them, I'd say that if you look at the margin improvement from last quarter's 17% to this quarter's 18%, probably around half of that was related to kind of this catch-up of cost recovery. With the remaining balance being some cost management and then just volume leverage inside the organization. If you strip out some of that, you get us around 17.4% approximately. Which if you look at where we are and where we've been, that's continuing on that 20 basis point trend line that we'd like to stay on. Got it. Then the follow-up, Jeff, nice to get the macro color from you. Seems like you always have a good grasp on that. The question is related to the comment that revenues might be down low to mid-singles, I think it was sequentially over the next couple quarters. One, can you just talk about the visibility that you have in the business, and if you've got particular conviction about where we might see revenues drop out, whether it be the second quarter, the third quarter, just the contour of how things are unfolding would be helpful. Thank you. Yeah, I would say that if you asked me three months ago, I would've said visibility was out kind of nine months plus. I'd say we're getting kind of into the six-month-plus confidence level of visibility and things. It's hard for me to make a call on the shape of the recovery. I do think Q1 will be down a little bit from Q4. Obviously, we're still working through a lot of adjustments from the China exports and things. We think we've largely coordinated all of that through our build plans and information from our customers. Then I think we'll just have to wait maybe till the next call to give you a better view of what we think the shape is. Got it. Then just lastly from me, as we look back over the last 12 months, one of the things we've wanted to see is some of the higher margin products, not just the custom design products, but things like weldments come back, et cetera. Can you just talk about how happy you are with mixing the business and any particular thoughts on mix as you look out over the next six months where you do have that visibility? Yeah, I think when we talk about, I'll call it outperformance in the down market, some of those share gains are definitely in the component side of the business. I'd say a pretty large percentage of them. We've already gotten some in place as we kind of exit Q4. I don't want to be specific, obviously, where those things are coming from. We're pretty confident that there's some upside to what we could potentially see on the machining side if we get some more qualifications in what we build out of our North America operations. That would help mute some of the gross margin tailwinds in the down environment as well. There's still some in gas delivery that we're working on as well. Largely, if you think about it, with EUV growing, that in and of itself gives us kind of a larger share of the existing TAM we operate in. Got it. Thank you very much. I'll hop back in the queue. You bet. Thanks, Craig. Next question comes from Krish Sankar with Cowen. Please go ahead. Hi, this is Robert Mertens on the line on behalf of Krish. Thanks for taking my question. I guess, just first around the portion of the business tied to EUV, have you broken out what level that is for this year or anything in the past, and sort of how to think about modeling that next year? I know you broke out the portion tied to memory, but just trying to think about the foundry and logic space and what portion is taken up with EUV specifically. Yeah, we haven't sized that for the investment community. I think you can go look at some of our distribution of revenue and figure out From that, the exposure we have in Europe is our third and fourth largest customer. Both of those have been growing nicely as well. As we noted, that our customer concentration of our two largest customers has gone down from 12%-20% or something, are the other customers. We haven't sized it. They haven't popped above a 10% customer, so they're not disclosed. That'll give you a little bit of a framework to figure that out. Okay, thank you. Just quickly in terms of the interest expense for next quarter, you mentioned going up a bit. Is that just sort of how we should think about it into next year, just that kind of run rate, maybe a bit higher? Well, I think it's all dependent on what our Fed does. This reflects what Larry can see as the fourth quarter, and we'll have to see about the first quarter. If rate goes up, we have a floating rate, it'll naturally go up with what you see. Maybe with a little bit of lag, because we do lock it in for a period of time. Yeah, I think the only other comment I'd make is, as we expect to generate cash flow going into next year through working capital improvements, we will be evaluating whether it makes sense to pay down some of that debt. Especially if the interest rates keep going up, it becomes a more attractive option perhaps for us. Okay, thank you. I appreciate it. Thanks, Robert. The next question comes from Hans Chung with D.A. Davidson. Please go ahead. Hi. Thank you for taking my question. Regarding the commentary about the 5% outperformance to the WFE for 2023, how does that imply the IMG business in 2023? Does that imply it to be flat growth or maybe down slightly? Well, good question, Hans. I'll give you a little bit of color on it. I think for IMG, maybe around 55% of their business is semi. That'll probably come down a little bit. The rest of it'll probably be a slight growth year-over-year. They'll see a very muted revenue level. I do think it'll be down a little bit. Got it. Thank you. Next, regarding the operating expense, how should we think about the model, let's say if we see the 2023 to be down, let's say 15%, how do you think about the deleverage on the OpEx? As we said, we'll be $23.2 million in Q4. We'll have our normal seasonality in Q1, which we're going to try to offset. We'll continue to invest in R&D and expect that going into 2023, that spending will continue to go up slightly as we continue to penetrate with new opportunities. On the remaining spending areas, we're looking right now at discretionary spending around whether it's travel, variable compensation, some of the other controllable spending items. I'd say if the business drops in the 15% range that Jeff's talking, we'll take spending down, but it won't be ratably to revenue, it'll be significantly less than that. We're still kind of working through that plan as we finalize our outlook, especially for the second half of next year. Our plans now are to keep focused on R&D investment, and we still have to maintain our SOX compliance and some of our ERP investments as well. That's our plan for now. This goes back to a prior question about duration of how the revenue goes. We'll get a good view of that, and then we have a playbook that we would have to do. We go after discretionary spending. There are certain areas that we've kind of moved into what I would call more of a BPO kind of approach to some of the transactional side of G&A, and Larry will work to align those with revenue levels that we see. There's other variable components that we can do to try and manage that number through this cycle. Got it. That's helpful. Lastly, just regarding the supply chain, where do we still see the constraints and then where do we see the decreased headwinds, just regarding the supply chain dynamics? Yeah, I think they improved again. Obviously, I would not say that the supply chain constraints are gone. I think they'll rear its head here and there, depending on where the supplier's located, potentially. We are still working some issues where not all the supply that's needed is predictable at the component level to some of our sub-tier suppliers. It is improving a lot. We would hope that those could take advantage of a little bit of a breathing room here and get caught up and then be behind us. They're largely behind us now, but there's still some out there that we'll work. Got it. Great. Thank you. Hans. There are no further questions at this time. I would like to turn the floor back over to Jeff Andresen for closing comments. Please go ahead. Thank you for joining us on our call this quarter. I'd like to thank our employees, suppliers, and customers for their ongoing dedication and support as we continue to navigate this highly dynamic business environment. Our upcoming investor activities include the New York City Summit on December 13th and the Needham Growth Conference in January. We also look forward to our next earnings call scheduled for early February. Operator, this concludes our call. Thank you. This concludes today's conference call. You may disconnect your line, and have a great day. Thank you for your participation.