Good morning. My name is Keith, and I will be your conference operator today. At this time, we would like to welcome everyone to Novanta Inc.'s 2022 4th quarter and full year earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. 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 now would like to turn the conference over to Ray Nash, Corporate Finance Leader for Novanta. Please go ahead. Thank you very much. Good morning. Welcome to Novanta's fourth quarter and full year 2022 earnings conference call. I'm Ray Nash, Corporate Finance Leader of Novanta. With me on today's call is our Chair and Chief Executive Officer, Matthijs Glastra, and our Chief Financial Officer, Robert Buckley. If you have not received a copy of our earnings press release issued today, you may obtain it from the investor relations section of our website at www.novanta.com. Please note this call is being webcast live and will be archived on our website shortly after the call. Before we begin, we need to remind everyone of the safe harbor for forward-looking statements that we've outlined in our earnings press release issued earlier today, also those in our SEC filings. We may make some comments today, both in our prepared remarks and in our responses to questions that may include forward-looking statements. These involve inherent assumptions with known and unknown risks and other factors that could cause our future results to differ materially from our current expectations. If any forward-looking statements made today represent our views only as of this time. We disclaim any obligation to update forward-looking statements in the future, even if our estimates change. You should not rely on any of these forward-looking statements as representing our views as of any time after this call. During this call, we will be referring to certain non-GAAP financial measures. A reconciliation of such non-GAAP financial measures to the most directly comparable GAAP measures is available as an attachment to our earnings press release. The extent that we use non-GAAP financial measures during this call that are not reconciled to GAAP measures in the earnings press release, we will provide reconciliations promptly on the investor relations section of our website after this call. I'm now pleased to introduce the Chair and Chief Executive Officer of Novanta, Matthijs Glastra. Thank you, Ray. Good morning, everybody, and thanks for joining our call. Novanta delivered record results in 2022. For the full year, we achieved all-time highs for sales, adjusted EBITDA, and adjusted EPS, with each showing strong double-digit growth over prior year results. We continue to see strong demand from our customers in the medical and advanced industrial markets we serve, and our teams are delivering great results. In the fourth quarter, we delivered $218 million in revenue, representing 10% year-over-year revenue growth on a reported basis and 14% growth on an organic basis. Our operating profit in the fourth quarter was also strong, with adjusted EBITDA of $46 million and adjusted diluted earnings per share of $0.75. For the full year, we delivered $861 million in revenue, representing 22% year-over-year revenue growth on a reported basis and 14% growth on an organic basis. Adjusted EBITDA for the full year was $184 million, up more than 20% versus 2021, and adjusted EPS of $3.07, up 17%. I'm incredibly proud of how our team exceeded our financial objectives and progressed our strategic initiatives, driving strong operating performance in an evolving macroeconomic environment. At Novanta, our mission is to deliver innovation that matters. We serve as a trusted sole source technology partner to our OEM customers, providing unique mission-critical functionality that enables our customers to differentiate. The Novanta business model, with diversified exposure to high-growth medical and advanced industrial markets, has proven resilient under multiple geopolitical and macroeconomic scenarios. Our proprietary products and technologies are well-positioned in medical and advanced industrial applications with long-term secular tailwinds such as robotics and automation, healthcare productivity, and precision medicine. We feel that the strength of our portfolio and business model, combined with our winning growth strategy, focused on where we play and how we win, drives our performance no matter the environment. Let's turn to what we're seeing in our markets and our customer activity. We continue to see strong ongoing demand from our customers in many application areas, and we ended the quarter with a near record backlog of $612 million. As expected and as discussed in our last earnings call, we are seeing a return to more normalized ordering behavior from our customers. Our book-to-bill in the fourth quarter was 0.91. Our book-to-bill for the full year was 1.07. As we see further easing of supply chain shortages and gradual improvement of delivery lead times, our customers are normalizing their order patterns and returning to a lower level of backlog coverage. This normalization is expected and healthy after the record orders we received throughout 2021 and 2022. In the fourth quarter, sales to medical sales continued to accelerate, growing 19% versus the fourth quarter of 2021, making up approximately 53% of total Novanta sales. During the quarter, we saw very strong orders and shipments to many of our medical OEM customers, with noteworthy strength in minimally invasive surgery equipment and consumables, in vitro diagnostics and patient monitoring equipment, and DNA sequencing. These categories all saw strong double-digit growth in sales year-over-year. It was positive to see further growth in our minimally invasive surgery product categories, which are tracking with the broader gradual improvement in elective surgical procedures and reduction in hospital labor shortages. For the full year, our sales to medical markets grew by 16% and made up approximately 49% of total Novanta sales. Turning to advanced industrial markets, our sales in the quarter, excluding microelectronics applications, were up 9% year-over-year and made up approximately 38% of total Novanta sales. In the quarter, we continued to see strong sales performance in automation and robotics markets, driven by continued underlying demand for factory automation, battery and electric vehicle production, and increased overall adoption of automation-enabling technologies. We believe that the penetration of robotic and automation applications is still relatively low, with adoption increasing due to multiple drivers such as increased productivity, higher robot utility, on-shoring and labor shortages. For the full year, our sales to advanced industrial markets, excluding microelectronics applications, grew by 41% and made up approximately 39% of total Novanta sales. Looking at just our microelectronics markets, which represented just 9% of sales in the fourth quarter. These include products that are designed into semiconductor wafer fab equipment, semiconductor packaging equipment, PCBA via hole drilling equipment, and other equipment used to produce electronics. In the quarter, we continued to see double-digit declines from the cyclical downturn in this market, which we reported on in our prior earnings call. Consistent with last quarter, the largest decline manifested in our technology offerings for the PCBA via hole drilling equipment market. From a regional perspective, in the fourth quarter, sales in Europe grew 4% despite the Russia-Ukraine conflict and associated inflationary and macroeconomic challenges this placed on the region. In addition, sales to North America grew 31% year-over-year. China, which represented about 10% of overall sales, declined 39% year-over-year, which was predominantly caused by the decline in microelectronics revenue. For the full year, the regional dynamics were similar, with double-digit growth in Europe and the United States and roughly flat growth for China. Now, let me touch on some of Novanta's strategic growth metrics. For the fourth quarter and full year, our vitality index, which is the revenue from new products launched in the last four years, continues to be healthy at about 25% of sales, with year-over-year NPR revenue up low double digits versus last year, driven by new product revenue in DNA sequencing, smoke evacuation insufflators, and detection and analysis for in vitro diagnostics. Our R&D teams continue to make good progress on our new product pipeline, which remains very healthy, with particular focus on robotic surgery, precision robotics, minimally invasive surgery, deep and extreme UV, electric vehicle production and battery processing, laser additive manufacturing, and micromachining. For example, yesterday, we officially launched the Denali Servo Drive in our Precision Motion segment. Servo drives are the brains in intelligent motion control, and Denali represents the tireless efforts and unwavering dedication of our amazing team. The Denali Servo Drive is the smallest servo drive designed specifically for service robots in medical and non-medical spaces, which help us to enter into this attractive adjacency for Novanta. We continue to invest in R&D in order to capture the many mid and long-term opportunities with differentiated offerings in high-growth markets. Moving on to design wins. For the full year of 2022, we experienced the expected year-over-year decline due to tough comparables from the 2021 large design wins in our minimally invasive surgery business. As discussed on our last calls, in this business, we won very large new product platforms in 2021 and early 2022 with both existing and new customers, which we expect will contribute $50 million of incremental revenue growth by 2025. In other words, we won the bulk of what we believe we could win and are now in the final development of commercial launch phase of our new product introductions in robotic surgery, smoke evacuation insufflators, and pumps, with products expected to begin selling in 2024. We continue to demonstrate strong traction with innovative new products outside MIS, focused on attractive high-growth applications such as laser additive manufacturing, micromachining, extreme UV, and electric vehicle battery welding. Next, I'd like to give you a brief update on Novanta's acquisition integration activities. Our integration of MPH Medical Devices is on track. I visited the site two weeks ago and was very pleased with the pace and trajectory of the progress being made. We continue to prepare the site to successfully manufacture Novanta's own proprietary medical consumable products at high volumes in 2024 and beyond, allowing us to accelerate our revenue growth and margin expansion opportunities. With this integration well underway, we continue to focus our capital deployment strategy on identifying and acquiring high-growth and high-cash flow businesses. This remains our primary focus of Novanta's capital deployment, and we feel good that we have a strong pipeline of opportunities despite the higher interest rate environment. I'd like to share a few comments on how we continue to evolve the culture of Novanta and the health of our organization and our people. We continue to invest in our culture, called The Novanta Way. We believe The Novanta Way has been a differentiator in attracting, retaining, and developing core talent. We continue to see below market labor attrition rates, both among our leadership ranks as well as across all company employees. We're focusing on a few factors to retain our employees, competitive pay, a great company culture, and career development and progression. In 2022, we strengthened our leadership team with the addition of Chuck Ravetto, Group President of our Automation Enabling Technologies segment, which represents our Photonics and Precision Motion segments, and we added our first General Counsel, Michele Welsh. We have progressed the deployment of the Novanta Growth System with hundreds of Novanta employees trained on and using the tools. We have a regular cadence of Kaizen events, structured problem-solving sessions, and other process improvement activities at all levels of the organization to fundamentally improve our operating results. These include reduction of cycle and lead times, improving our supply chain and planning processes to enhance delivery performance to our customers, accelerating material and labor productivity, and improving time to market of our new product launches. We also have strengthened our Novanta Way culture, improving our employee engagement scores, gaining great traction with our diversity, equity, and inclusion efforts, and investing more in leadership development initiatives. In 2022, we stood up three employee resource groups and have expanded our community efforts, which we feel have improved engagement, inclusion, and a sense of belonging at Novanta. Sustainability also remains an important topic for Novanta. As a global organization with a wide-reaching customer and supplier base, our products touch lives up and down the value chain. We have the opportunity and responsibility to not only deliver mission-critical innovation, but do so in a way that positively impacts the environment, our communities, and the economy. Most of our sites are now ISO 14001 certified, under the leadership of our sustainability board, we have defined a roadmap to reduce our environmental footprint. In a few weeks, we will be publishing our 2022 ESG report, where we will share details on our goals and accomplishments and what's coming next for Novanta. In wrapping up, Novanta had a landmark year in 2022. We had excellent sales growth in attractive end markets, strong operating performance and profit growth, great progress in deploying the Novanta Growth System, and continued success at further establishing a thriving company culture. We believe Novanta's strategic position is extremely strong. We continue to broaden our exposure to medical and advanced industrial applications that have long-term secular growth trends, such as robotics and automation, healthcare productivity, and precision medicine. In 2023, we see strong tailwinds in our medical businesses, which will help to offset headwinds in our microelectronics markets. We will continue to focus on new product development, design wins in high-growth applications, driving cash flows, and institutionalizing the Novanta Growth System. With that, I will turn the call over to Robert to provide more details on our operations and financial performance. Robert? Thank you, Matthijs. Good morning, everyone. Our fourth quarter non-GAAP adjusted gross profit was $97.9 million or 45% adjusted gross margin compared to $88.3 million or a 44% adjusted gross margin in the fourth quarter of 2021. For the full year, non-GAAP adjusted gross profit was $392 million or 45.6% adjusted gross margin compared to $319 million or a 45% margin in 2021. For the quarter, adjusted gross margins were up year-over-year, but down sequentially. For the full year, adjusted gross margins expanded approximately 50 basis points year-over-year. It's fair to say that while this performance was strong, the gross margin expansion missed our expectations. In the fourth quarter, there were two dynamics that caused this to occur. The first was revenue increased more than expected in our Vision segment, driven largely by our minimally invasive surgery business line, which has lower gross margins than our Photonics and Precision Motion segments. The second dynamic was that our anticipated uptick in revenue margin in our Photonics and Precision Motion segments was interrupted by a regional outbreak of COVID in China. This outbreak not only resulted in us shuttering our factory for December and January, but it also broadly impacted supplier deliveries of electronic parts for our products, as well as our customers' ability to take receipt of our shipments. On the bright side, the China situation is now resolved. Therefore, we expect to be back on our trajectory for the long-term gross margin expansion as we head into 2023. Overall, gross margins were still relatively healthy in the fourth quarter, given the inflationary pressures and the COVID disruptions. We continue to have good success counteracting the inflationary pressures of raw materials, labor, and even overhead costs, such as energy, which demonstrated the overall strength of our technologies, our culture, and our business model. We also continue to make strong progress in institutionalizing the Novanta Growth System across our factories and commercial channels, and with our engineering teams. Our NGS common tools will help ensure our ongoing margin expansion, allowing us to continue to deliver strong financial results despite the macroeconomic environment. Moving on, fourth quarter R&D expenses were $22 million or roughly 10% of sales. For the full year, R&D expenses were about $86 million, again, about 10% of sales. Fourth quarter SG&A expenses were $39 million or roughly 18% of sales. For the full year, SG&A expenses were $159 million, again, about 18% of sales. Overall operating expenses as a percent of sale were roughly flat sequentially in the quarter and flat year-over-year for the full year as we continue to carefully manage our spending in line with the company growth and margin expansion. Adjusted EBITDA was approximately $46 million in the fourth quarter of 2022, or a 21% adjusted EBITDA margin. For the full year, Adjusted EBITDA was approximately $184 million in 2022 compared to $153 million in 2021, representing growth of more than 20% year-over-year. On the tax front, our non-GAAP tax rate in the fourth quarter of 2022 was 14%. This differed from the statutory rate due to jurisdictional mix of income and some structural tax benefits. For the full year, our non-GAAP tax rate for 2022 was 16.5%. This rate is higher than prior year, mainly due to less equity compensation windfall benefits. On a non-GAAP, adjusted earnings per share was $0.75 in the quarter, compared to $0.67 in the fourth quarter of 2021, an increase of 12% year-over-year. For the full year, our non-GAAP adjusted earnings per share was $3.07 compared to $2.62 in 2022, an increase of 17% year-over-year. While adjusted operating income and adjusted EBITDA grew more than 20% year-over-year for the full year, EPS growth was impacted by higher interest expense and a higher tax rate. We expect that dynamic to continue into 2023, which I'll cover when I share the guidance outlook. Fourth quarter operating cash flow was $41 million, which is up 41% versus the prior year. Fourth quarter cash flow improved sequentially as our teams began to level off further inventory purchases and also due to strong collections and slightly better shipment linearity. For the full year of 2022, operating cash flow was approximately $91 million. This was despite cash flow being negatively impacted by approximately $11 million from higher cash taxes due to the change in U.S. tax law related to the amortization of R&D costs. We ended the quarter with gross debt of $440 million. Our gross leverage was 2.4x. Our net debt was $340 million, putting the company in a great position to fund further acquisitions. I'll now turn to updating the performance of the operating segment. I'll start with the Photonics segment. For the fourth quarter of 2022, this segment saw revenue growth of 27% year-over-year. This segment continues to experience very strong customer demand in their advanced industrial applications, traditional medical applications, and DNA sequencing. We are very pleased with the outcome, and these teams continue to fight through persistent supply chain disruptions, which created challenges to manage our factory output efficiently. Our supply chain and manufacturing teams demonstrated extraordinary resilience to deliver these strong results. The book-to-bill in this segment was 0.8 in the fourth quarter. As mentioned previously, we are seeing customers reduce their order rates better aligned with the actual and perceived drop in lead times and significant pass-through deliveries from Novanta. We also continue to see resilient demand signals from our customers, as many of them still regularly stock out of parts and hold no meaningful safety stocks. The book-to-bill for the full year of 2022 was 1.14, this strength in orders leaves us in a very favorable backlog coverage position for 2023. Within Photonics, new product revenue stayed strong at greater than 20% of sales in the fourth quarter, total new products grew more than 30% year-over-year. Design wins for the full year were up high single digit year-over-year as our sales team continues to win excellent new business in attractive high-growth medical and industrial applications, overcoming difficult year-over-year comps. The Photonics segment adjusted gross margin was nearly 50%, which was up 400 basis points year-over-year. Turning to our Vision segment, this segment predominantly serves the medical end markets and saw a reported revenue of 17% year-over-year, which was better than our expectations. Growth in this segment was driven by strength in elective surgical procedures and continued success in our smoke evacuation insufflators technologies. In addition, our JADAK business line returned to solid growth in the quarter as the prior challenges with the supplier have now been resolved. The Vision segment saw a book-to-bill of just under one in the fourth quarter as customers continued to gradually decrease their ordering in line with our reducing lead times. At the same time, this business is experiencing further strengthening in the end markets. For the full year, the book-to-bill for this segment was 1.09. The vitality index in this segment remained greater than 30% of sales. Design win activity in this segment declined in the fourth quarter year-over-year, solely because the business faced very difficult comparisons from the record-breaking design in progress from our smoke evacuation products in 2021 and early 2022. Design win activity for the full year was down double-digit. As mentioned in our last call, the cumulative impact of design wins in this segment, and specifically our MIS business line, is going to generate $50 million of revenue in 2025, with further growth after that. This segment will continue to be a large driver of organic growth for the overall company for the next several years. Finally, turning to our Precision Motion segment. This segment experienced a revenue decline of nearly 10% year-over-year in the quarter. This was in line with our expectations in our prior guidance. The decline was due solely to a steep year-over-year decline in our microelectronics applications, most pronounced in our PCBA via hole drilling applications, which fell more than 60%. Excluding this decline, the remainder of this segment grew mid-single digits in the quarter. Despite the significant drop in demand in the microelectronics space, the overall book-to-bill ratio in this segment was 0.96, which improved sequentially. On the full year basis, the book-to-bill ratio in this segment was 0.98. New Product Revenue was greater than 15% of total sales for both the quarter and the full year. This ratio now includes product sales from our ATI business line, which has a lower proportion of new product revenue rates in the overall segment. As we mentioned when we acquired the business, we are investing in innovation to accelerate their new product development and offerings and to accelerate their design wins with customers. We are making great progress here, adding a new engineering leadership talent into the quarter, and we believe we are on a good trajectory to bring this business on par with our existing business lines. Because of the new addition of ATI, the year-over-year growth of NPI sales in this segment is not meaningful since 2022. This is the first full year of ATI. Adjusted gross margin in this segment came in at 48.5%, which was down slightly year-over-year and flat sequentially. Turning to guidance, we expect our book-to-bill to continue to moderate and remain below one for the first half of the year as customers reduce their ordering in line with both actual and perceived lead times for Novanta's products, and to lower their level of backlog coverage, particularly given Novanta's past due deliveries. In the first quarter, we expect some near-term volatility in bookings caused by our annual price increase initiative. However, this is expected to normalize after the first quarter. Overall, we have not seen any double ordering of Novanta products nor any customer cancellations materialize. The strength of our backlog is a reflection of our innovations and the applications in which we participate. Over the course of 2023, we expect to reduce our backlog in an orderly fashion, with overall backlog coverage normalizing closer to 45%-50% range versus the high 60% coverage we saw in 2022. Regardless, we are entering 2023 with strong backlog coverage for the first few quarters, helping to reduce any macroeconomic volatility. We expect demand in our medical end markets to remain strong all year, driven by elective surgical procedures and to some extent, new product introductions, particularly in the DNA sequencing market. We expect solid growth coming from both our medical capital equipment and our medical consumable sales. Revenue growth in these applications is largely limited by production capacity in 2023, both with our medical consumables production and our DNA sequencing technologies. We are taking actions to resolve this, including investing in capital expenditures in 2023 to ramp up our new Czech-based medical manufacturing facility and investing in a new Manchester, United Kingdom, manufacturing facility. Both facilities are progressing nicely, and we expect to fully overcome the capacity constraints in early 2024. Turning to our advanced industrial end markets, we expect traditional industrial end markets to see resilient strength and continue to grow in 2023, particularly in the robotics and automation space, laser-based material processing applications, industrial metrology, and laser-based 3D printing markets. While demand in this market is expected to moderate somewhat in line with the overall industrial spending environment, our focus on secular growth applications and new product introductions should allow our business to experience growth in our niche application areas. In our microelectronics end markets, we expect double-digit declines in the PCBA via hole drilling applications and semiconductor wafer fab applications, which will drive a 200-300 basis point revenue headwind for Novanta versus 2022. Our overall microelectronics exposure will decline to 7%-8% of overall sales over the course of the year. This compares to 12% of sales for the full year of 2022 and 9% of sales in the fourth quarter. As we look out beyond 2023, we expect our exposure to be more cyclical applications within microelectronics to be further muted. We are deepening our content and exposure to the secular growth deep and extreme UV lithography applications, and we expect this application area to represent the bulk of our microelectronics revenue in 2024 and beyond. Starting with revenue guidance, our first quarter 2023 as we stand here today, we expect GAAP revenue in the range of $210 million-$212 million, which represent revenue growth in the mid-single digit territory year-over-year. For the full year of 2023, we expect GAAP revenue in the range of $890 million and $915 million, which also implies mid-single digit revenue growth year-over-year. The range in our full year is really a factor of how industrial capital spending reacts to changes in the interest rate environment and the pull-through effects that has on sales to our OEM customers. A rising rate environment will likely result in softer industrial demand, whereas a decrease in rates could act as a catalyst for an uptick in capital spending. On the segment level, in the first quarter, we expect Photonics segment to grow revenue to 10%-12% range year-over-year. Customer demand remains resilient in this segment. We with continued growth in multiple industrial and medical applications. On the full year, revenue in this segment is expected to be up mid-single digits. Demand in this segment continues to be robust across a multitude of application areas, including DNA sequencing and other medical applications, and some industrial markets. Our Precision Motion segment is expected to be flat to slightly up sequentially, but down approximately 10% year-over-year in the first quarter. The year-over-year decline is driven by the downturn in the microelectronics market tied to the PCBA via hole drilling application areas in the back-end semiconductor applications and some China-related disruptions caused by the December and January regional COVID outbreak. These specific applications are expected to be down nearly 70% of the quarter. Partially offset by growth in industrial robotics, medical robotics, and traditional industrial markets. Similar to the Photonics segment, demand in our core and targeted applications remains strong. On the full year basis, revenue segment is likely to be flat to down low single digits caused by the aforementioned dynamics. Our Vision segment is expected to demonstrate revenue growth in the range of 10%-15% in the first quarter year-over-year. This segment sees some seasonality in orders and shipments with our larger medical OEMs, which is generally tied to hospital CapEx expenditure budgets. We continue to see strong demand from the medical end markets, driven by a return of elective surgical procedures globally. On the full year basis, revenue growth is expected to be in the high single digit to low double-digit territory, depending on the supply chain challenges and our production capacity. Effectively, we are not limited by end market demand at this time. Moving on to the overall Novanta's adjusted gross margin. We expect gross margins in the first quarter to be approximately 45.5%, which is up sequentially from the fourth quarter. The Photonics segment gross margins are expected to be flat sequentially, whereas the Vision, the Precision Motion segments are expected to be up sequentially. Gross margins in the first quarter are expected to see continued pressure from disruptions in China due to the regional COVID outbreak in December and January, which is now resolved, and continued electronic parts shortages. As the year progresses, we expect these headwinds will be reduced, and further risks are mitigated through our pricing initiative and the acceleration of the Novanta Growth System initiatives. As a consequence, for the full year of 2023, we now expect adjusted gross margins between 46.4% and 47%, representing between 80 and 140 basis points of margin expansion year-over-year. During the R&D and SG&A expenses, they are expected to be approximately $61 million-$62 million in the first quarter. For the full year, we expect a range of $258 million and $263 million. The increase in cost year-over-year is driven by labor cost increases tied to our annual cycle, investments in innovation, particularly significant investments in our Vision segment tied to the aforementioned product launches around smoke evacuation insufflator technologies, and some further investments in our commercial engine. Depreciation expense will be approximately $4 million in the first quarter and $17 million for the full year. Stock compensation expense will be approximately $6 million in the first quarter and $23 million for the full year. The adjusted EBITDA in the first quarter will be a range of $44 million-$45 million in the first quarter. For the full year of 2023, we expect adjusted EBITDA in the range of $195 million and $207 million, or an EBITDA margin of roughly 22%. Interest expense, which was nearly $6 million in the fourth quarter and nearly $16 million for the full year of 2022, is expected to be slightly above $6 million in the first quarter of 2023, and is expected in a range of approximately $24 million-$26 million in the full year of 2023, driven by the rise in interest rates. Our guidance assumes a weighted average interest rate of approximately 6% for the full year. In the near- term, we will focus on paying down debt to mitigate the impact of rising rates. This is one factor that drives the range of our full-year EPS guidance. However, as Matthijs mentioned, we also expect to be heavily focused on our acquisition strategy. How our interest expense unfolds will largely be contingent on our acquisition deal flow in the year and the geographical availability of cash flows. We expect our non-GAAP tax rate to be around 18% for the first quarter as well as for the full year of 2023. The rise in the tax rate from 16.5 to 18 is driven by the rise in corporate income tax rates in the United Kingdom and our expectations around jurisdictional mix of income. We are also monitoring the new OECD Pillar Two tax law changes, which is tied to member nations hopes to conform to an international tax framework that imposes a minimum tax rate of 15% globally for corporations. The implications of this are still being investigated by us, and therefore, any immediate tax law changes are not factored into our rate expectations. Diluted weighted average shares outstanding will be approximately 36 million shares. For adjusted diluted earnings per share, we expect a range of $0.64-$0.66 in the first quarter and $3.00-$3.20 for the full year. We expect cash flows to improve in 2023 as we gradually bring down our inventory to more normalized levels. We expect first quarter cash flows to be somewhat lower than the remainder of the year due to the timing of incentive compensation payments, equity compensation vesting events, and seasonal tax payments. We expect cash flows to strengthen as the year progresses, despite the increase in capital spending for the aforementioned capacity expansions, putting us in a great position to accelerate our acquisition strategy. As always, this guidance does not assume any significant changes in foreign exchange rates. In summary, Novanta's performance in the fourth quarter of 2022 and the full year was above our expectations and a testament to the resiliency of the portfolio. We had our highest ever level of sales with double-digit reported growth and organic growth for the full year. We saw double-digit and adjusted EBITDA, as well as adjusted earnings per share. Our teams continued to deliver great results, helping the company work through difficult supply chain disruptions and inflationary pressures while still winning new customer platforms and progressing our innovation pipeline. We continue to see below-market labor attrition rates, and we're seeing great success at attracting top talent. Despite a more uncertain macroeconomic environment, the rising interest rate environment, we expect to continue to deliver strong financial results in 2023 and see our growth remaining strong well past this year. We remain very grateful for the outstanding performance of our employees and their tireless efforts to help us be successful in this dynamic environment. We look forward to continuing to deliver on our commitments to our employees, to our customers, and to our shareholders. This concludes the prepared remarks. We'll now open the call for questions. Yes. Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble the roster. This morning's first question comes from Lee Jagoda with CJS Securities. Hi, good morning. Morning, Lee. Just starting with the Vision segment, Robert, can you speak to sort of your expectation of the mix of products within the Vision segment, meaning MIS versus the rest of the stuff, for both Q1 and for the full year, and how that might impact your margin guidance there? I'm expecting solid growth out of the JADAK business. There will be margin. If you're trying to get at gross margin expansion in the Vision segment, I think the overall gross margin will improve in the Vision segment on a year-over-year basis. There will be continued growth coming out of the JADAK business, which is serving, you know, predominantly medical markets into the IVD-based applications and other laboratory-based technologies. There they will be a positive headwind from a gross margin perspective. Got it. I know you had made the comment earlier that MIS is below corporate average on both the consumables and the hardware piece. As you look out to late 2024 and into 2025, when you start to see that $50 million of incremental revenue ramp on the new smoke evacuation product lines, how do those margins compare to both the current MIS margins and then the segment average margins within Vision? One thing let me clarify. When we get very strong growth in our medical consumables piece of the portfolio, that's the piece that's been driving the lowest gross margin, and therefore that's the headwind that we see. That's why we bought the MPH site in the Czech Republic and why we're ramping it. The actual capital equipment piece of the product offering is a much more attractive gross margin profile. When we go about launching our new smoke evacuation technologies, those products, both on the consumable side as well as the capital equipment side, improve gross margins. We're intending to launch those products at a much higher gross margin. You compound that with the fact that the facility in the Czech Republic will be running products through it beginning in 2024. The combination of those two events will allow the gross margin expansion for the overall company, which gives us that confidence of why margins will expand from, let's say, 47% this year to something closer to 50% over the next few years. Got you. Is there any quantifiable impact from the facility coming online impacting the margins in either the first half of the year or all of 2023? It did impact a little bit in the fourth quarter, and it's impacting a little bit in the first quarter. That begins to get more and more muted as we progress over the course of the year. I wouldn't kind of get into the qualification of it, but, you know, certainly when you see the 38.9% gross margin in the fourth quarter, an element of that was the MPH acquisition impacting that segment. Not all of it was the medical consumables, but it's all, you know, we tie that together into a single bow. I think that headwind will eliminate by the end of the first quarter. It's largely on the basis that they had some sales we're running off. As we get into the back half of the year, even Q2, you know, that becomes a non-issue from our gross margin story. Got it. Okay. I'll hop back in queue and let others ask some. Thanks. Yeah. Thanks, Lee. Thank you. The next question comes from Brian Drab with William Blair. Thanks. Just to follow- up on that one. MPH, just so I understand the timing, that's volume of the WOM consumables is ramping throughout 2023, you'll reach, like, the full run rate volume in 2024. Is that how to think about it? No. There's some. MPH, the facility in the Czech Republic, I should say, will not have any revenue coming out of it associated with our medical consumables in 2023, at least not until the fourth quarter. That is product that's all being qualified and ramped in the facility, but it won't be used for sale purposes. The negative gross margin headwind in the fourth quarter and the first quarter is, if you remember, we bought a business with revenue. We're bleeding off of that revenue, discontinuing those products. There's some last time buys that impacted the fourth quarter, will impact the first quarter a little bit from a mix profile perspective. That goes away by the time we get into the second and third quarter, it will no longer be an issue. By the time we get to the fourth quarter, ramping up production of our own medical consumables, and the margin profile, what we ramp out of there, will be better than what we've been shipping out of the Ludwigsburg facility. It won't be meaningful in the fourth quarter, but it'll be, it'll begin to get very significant in 2024. Okay. Got it. Your gross margin benefit from this move of bringing the consumables in-house, it's going to show up in the financial statements in 2024, right? Predominantly, yes. Yep. You will see margin, gross margin expansion in the Vision segment in 2023. That's largely coming from continued growth in our JADAK business and solid growth coming from the capital equipment portion of the business. Got it. Okay. How do you expect your backlog and the book-to-bill ratios to track throughout this year, you know, sequentially, as we move through the year? We are seeing a little bit of that correction, let's say, in reducing lead times. There's two elements of lead times is what our lead times actually are, and then what I would think the customers are forecasting or perceiving them to be. And I think there's a healthy tension between those two numbers. As we get into the first quarter, the EBITDA, sorry, the book-to-bill will be below one again. I expect the same in Q2, and then it'll begin to moderate by the time we get to Q 3 and probably return to a one in Q4. That's how we've built our forecast right now. You know, things can change 'cause the Vision segment is obviously continuing to grow very solidly. It could pick up beyond our expectations. The Photonics segment, we still continue to see strong demand signals being sent to us, both on the DNA sequencing side as well as well as our overall industrial customer base. I think, you know, we've forecasted, I think, a little conservative here, just that's our tendency. That's what we typically do over the course of the last few years. You know, we feel like there's some good positive tailwinds associated with the applications in which we're participating in. Yeah. Brian, to add, this is Matthijs. I mean, just recall that our backlog coverage for the next, let's say, 12 months, you know, exiting the year was in the high 60s% or close to 70%. That is an absolute record, right? It's actually double pre-COVID levels, right? Just to put things in perspective. As you kind of normalize that unusually high backlog coverage, you know, Robert has stated in his pre-prepared remarks, like to 45%-50%, right? That normally, kind of, if you do the math, means that orders will be more muted because customers has placed, you know, substantial orders on us, and there's no need to add more to it, right? That's really the majority of the dynamic. Then, of course, the only area where you see an end user demand impact is in the kind of our smallest kind of segment, which is the microelectronics side, which we commented on. The rest is all normalization related. Yeah. Yeah. Yeah. Makes great sense. Yeah. Thank you. Thank you. once again, please press star and then one if you would like to ask a question. The next question comes from Joseph Donahue with Baird. Hey, guys. I'm on for Rob today. How you doing? Good morning. Morning. Just to touch on the microelectronics, do you have line of sight on that bottoming out? Should we be thinking first half 2023 and then potential for some comeback in the latter half? Is it still something that you're just keeping an eye on for now? Yeah, it's a great question. Let me kind of clarify. What we did in our forecast and range of the forecast is that we presumed it pretty much has bottomed out in the first quarter. The dollars of revenue that we get hit the low in the first quarter, and we keep it that way for the full year. There are some signals pointing that the second half, you know, could perhaps be stronger. We're not baking that into our forecast at this time. The reason why is just, you know, we'll wait and see and see how that manifests. That's in the guidance range where I say that, you know, the overall microelectronics exposure to the company will drop some down to someday around 7%-8% of sales, probably 7% of sales, versus the 12% of sales that we had in 2022. It's basically presuming it bottoms in Q1, and we keep it that level all throughout the year. Now, the mix shift, it changes pretty dramatically. What you look at is inside the components of that is that the really cyclical pieces of that portfolio come down and are completely muted, really kind of starting the first quarter and thereafter onwards. What's remaining is actually exposure into DPUV-based applications, lithography-based applications, which have a fairly long secular tailwind associated with them. We feel good at where the product is currently positioned, what we have remaining, and that's the area that we continue to take market share in. That's the area that we continue to have design win progress in, and that's the area that we would expect that as we exit 2023 will actually become a growth story. The microelectronics piece of the portfolio will be a less cyclical piece on a go-forward basis after this year and a higher, a higher growth characteristic to it. Got it. Thank you. Just on the issues that you had with the factory in China, are you able to quantify kind of the impact to the first quarter guidance on the Photonics and Precision Motion side? Um, it is- On the market or revenue line. Yeah. There was. That was like. If you were to kind of take the two dynamics I spoke to, one of which was higher growth in medical consumables, and then the second was, you know, the fact that we had to shut down the factory in December and in January. There was also implications that, you know, our customers had disruptions and some vendors had disruptions, right? There's a couple dynamics taking place there from just the rapid outbreak of COVID and then the burnout of the pandemic. The implications of that really was the gross margin. Maybe half of it was tied, you know, tied to the 50 basis point miss, and then the other half was, you know, was basically coming from the higher medical consumable sales. On that from a total Novanta basis, and the largest element of exposures in there, tend to be in the Precision Motion and the Photonics portion of the portfolio. I would say that, you know, that leads to a weaker gross margin in the first quarter in those two segments. As you look into the later quarters in Q2, Q3, and Q4, at least for the Photonics segment, the gross margins will expand. Overall for the full year, that segment will see an expansion in gross margins. Okay. Got it. Thanks so much. Yep. Thank you. This concludes the question and answer session. Now I'd like to turn to Matthijs Glastra for any closing comments. Thank you, operators. To summarize, Novanta had a record-setting year in 2022. We saw our highest ever level of sales and profitability, double-digit growth for sales, adjusted EBITDA and adjusted EPS. We entered 2023 with a very robust level of backlog and strong tailwinds in our medical businesses. We won multiple new customer platforms, establishing a strong foundation for robust growth into the next few years. We also completed one small but strategic acquisition that will improve our capacity for revenue growth and gross margin expansion in one of our strategic product categories. We achieved all of this while managing a challenging environment. We're excited to see the continued growth in the medical sector and also the resumes in the advanced industrial sector. Novanta is well-positioned in these sectors with diversified exposure to long-term secular micro trends in robotics automation, precision medicine, minimally invasive surgery, and Industry 4.0. In 2023 and beyond, we will continue to focus on new product development, design wins, and high growth applications, driving cash flows and institutionalizing a Novanta Growth System. In closing, as always, I would like to thank our customers, our employees, and our shareholders for their ongoing support and continue to be especially grateful for all the dedicated efforts of our Novanta teammates who work diligently every day to tackle new opportunities and manage through new challenges. We appreciate your interest in the company and your participation in today's call. I look forward to joining all of you in several months on our first quarter 2023 earnings call. Thank you very much. This call is now adjourned. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.