All right, good morning, good afternoon, or good evening. Welcome to the 80th Emerging Growth Conference and day one of our two-day super virtual investor conference. I'm Ana Berry. Just a few notes. Today we're running until 4:00 P.M. Eastern. When we switch to the next company, you'll see a black screen for a moment. Don't go anywhere. It's just us moving over to the next presenter. If you experience downtime, refresh your browser. Everything usually works properly once you do that. Our platform does work best on Google Chrome. If you're watching from an Apple device, you have to hit the Play button to start the session. During each company's presentation, you can submit questions through the webcast module. We will attempt to address as many of these as possible at the end of the presentation. Please remember, all of our conferences, they're uploaded to our Emerging Growth Conference YouTube channel. Subscribe and watch youtube.com/emerginggrowthconference. Happy to welcome our first company today. It's Photronics, trades on the NASDAQ under the symbol PLAB. It is a leading worldwide manufacturer of integrated circuit and flat panel display photomasks. Happy to welcome Vice President of IR. We have Ted Moreau. Welcome to the conference today, Ted. Thank you, Ana. Thank you for the invite. I really appreciate the opportunity to speak with the investment community today. I assume that I'm just going to go ahead and start the presentation. I'm going to skip ahead on the deck. Not going to review the first quarter results right out of the gate. I wanted to discuss the company and provide an overview of who we are and what we do. A little bit of background. These numbers that you see here are numbers from our fiscal 2024. We have an October fiscal year-end. Just note that. In 2024, our revenue declined slightly year-over-year, 3%. That was really a function of kind of a sluggish overall demand environment. I'll get into what we do in a second. Just kind of a note that we experienced kind of a sluggish overall demand environment, in addition to some pricing adjustments that occurred throughout that really took place and affected 2024. Despite that, we generate a lot of cash flow. Operating cash flow was about 30% of total revenue. Despite kind of a sluggish environment, we still generate a lot of cash. Revenue by geographic region, you can see down in the bottom left-hand corner. We are really dominated by our business in Asia. We are a company that's headquartered here in the United States in Connecticut. Our business is very dominated by Asia. 80% of our revenue is originated out of Asia. Actually about 60%, if you combine China and Taiwan. You can see in the bottom right-hand corner where our facilities are located. We have three in the United States, two in Europe, and the remaining six are in Asia. Three of them are in Taiwan. Two of them are in China. One of them is in Korea. Revenue by product group, and actually kind of getting back to the revenue by region, that is actually revenue produced out of these facilities in these regions, not revenue to the region. I just want to make sure that that's understood. Revenue by product group. I'll kind of just very shortly discuss what this all means. We break out revenue by our semiconductor integrated circuit business, which is three quarters of the total business. Within that, the integrated circuit business, what we consider to be high-end is about 35%, so a little bit more than a third of total revenue. The remaining allocation is what we consider mainstream. Flat panel display is a little bit more than 25% of total revenue. Within flat panel display, we're very dominated by our high-end business. It's about 85% of our flat panel display revenue is considered high-end. What is it that we do? We make photomasks, as Ana had alluded to at the beginning of the presentation. What is a photomask? We receive from our suppliers a glass plate, like a quartz glass plate. We also receive from our customers a design for a semiconductor integrated circuit on the integrated circuit side and a design for a flat panel display on the display side. Within integrated circuits, we take the design from the customer base. The customer tends to be a company at a semiconductor manufacturing fab. Think of it in terms of Taiwan Semiconductor Manufacturing, also known as TSMC. Samsung has their own semiconductor manufacturing facilities. We have a couple of companies in Asia, UMC, SMIC. Also think of companies in the United States that have their own manufacturing capabilities. For example, a company such as Texas Instruments, which designs their own semiconductor chips, but they also manufacture those chips in-house. Those sorts of companies. Any company that manufactures the chips, the semiconductor chips, those are our customers. We receive from those customers the semiconductor integrated circuit design. We take that design. In our clean rooms, we start essentially kind of printing the design onto the glass plate, on the photomask glass plate. Within the integrated circuit business, that glass plate is about 6 in x 6 in. You can get a feel for the size of how big these are. We then take that chip design or that photomask. After we've imported and printed the design onto the photomask, we then ship it off to our customers, the semiconductor manufacturing customers, who insert the photomask into one of their semiconductor equipment tools. It's actually called the lithography tool for those that are deep into the weeds of the semiconductor industry. It is a very critical aspect to the semiconductor manufacturing process. What then happens is that tool, the lithography tool, shines a light or a laser through our photomask since it's glass. It projects the chip design onto a wafer. That begins the semiconductor manufacturing process, right? Now, it's important to understand that the semiconductor chip designs actually have a lot of different layers to that chip, to that design. Semiconductors are very complex products. Some designs at more what we call our mainstream business, which I alluded to before within the semiconductor IC business, about 2/3 of our business is mainstream, right? Those chips typically require about 15, 20, maybe 25 layers or photomasks per chip design or per set. We obviously then in the high-end business, which again, a little bit more than a third of the chip of the IC business, the high-end business typically requires, say, 50, 60, upwards of 90, or even 100 photomasks or layers per chip design. Obviously, the complexity of the chip design at the higher end of the business is significantly greater than at the mainstream business. What we are trying to do, obviously, is go after opportunities where we can ship off a greater number of photomasks, which elevates our ASP per chip, right? That is how we think about it. Within the manufacturing, getting back to that manufacturing process, the light shines in the lithography tool, it shines through the photomask onto the wafer, prints that first layer onto the wafer. That gets cleaned off. The The wafer then comes back through into the lithography tool and prints the next layer. The process keeps going until you have printed all the layers. Now, on the flat panel display side, it is a similar process. There is a significant difference, though, in that, as you can kind of see on the bottom left-hand corner of this slide, the photomask size for the flat panel display is much bigger. It's about 2 m wide and 1.5 to, I'll say, about 1.5 m tall, typically. It is very heavy. In our clean room facilities, it tends to be very automated. One or two individuals would have a very difficult time carrying these photomasks, these flat panel display photomasks within our clean room facilities. It is a very automated process. The process is also, I had mentioned clean room. It is very critical that there is no dust on these photomasks, that there is no dirt, there are no scratches. That part of the process is very precise. We walk in as an employee, you walk into the facility, and you have to put on a clean room outfit and wash and scrub your hands, get dried off. It's a very important process because if there was a speck of dust or a speck of dirt on the photomask, as that light shines through the photomask onto the wafer or onto the glass plate that's utilized on the FPD side, that can skew the semiconductor image and the design that's printed onto the wafer. It is very critical to have a very clean photomask. I want to talk a little bit about what are the applications within the integrated circuit opportunity and then within the flat panel display opportunity. Applications for it, typically any semiconductor chip that's designed for any opportunity out there is utilized, we design photomasks for. What does that include? Tools for equipment for the industrial market, equipment for our chips that are designed into the automotive industry. We've seen a very significant increase over the last decade or so of chips that are going into our cars. Chips used for smartphones, tablets. We're seeing some semiconductor chips go into our dishwashers, our clothes washers and dryers, refrigerators. Anything, TVs, anything that requires a semiconductor chip. On the flat panel display side, it's more about, obviously, display. What do we need? What are the applications there? It's typically our TVs, our PCs, and laptops and tablets and smartphones, smartwatches. Even now with display screens within our cars, those are applications as well. Go to the next slide. A little bit of history about the company. Founded in 1969. We've been in business for a little bit more than or about 55 years. Early on throughout the history of the company, it was a consolidator of the industry. Really kind of grew through that process. That occurred from, obviously, 1970 through, I would say, about 2000, when the company was a consolidator of the business. More recently, the company has not engaged in much M&A activity. We have seen revenue growth over the last five years as a result of improved pricing power within the industry. If you went back, say, about 10 years ago or even 5 years ago, our gross margin profile was in the low 20%. Today, in 2024, our gross margin profile was 36%. What happened there? Obviously, we were a consolidator of the industry. That helped improve the competitive dynamics. We have seen over the last 10 years an improvement in competitive dynamics again because of some attrition within the industry. The competitive environment is a little bit more favorable than it used to be in the past. Therefore, we are able to generate an improved gross margin profile and, obviously, then an improved cash flow profile. Coming out of I want to talk a little bit more about that. In 2020, obviously, the world was hit by the COVID pandemic, right? That really disrupted a lot of the supply chain within the semiconductor industry and technology industry overall and, obviously, probably other industries as well. Because of that disruption and then very quickly after the initial scare that had occurred back in the spring of 2020, demand for electronics technology really accelerated. The demand and supply relationship really became out of balance. It was during that time frame that we were able to increase pricing to our customers. Additionally, we implemented some premium pricing, which was always going to be temporary. There was kind of a two-factor increase in pricing, right? There was across the board price increases. Then for certain customers, they accepted a very temporary premium pricing. In 2022, 2023, the pricing environment or the pricing that we had implemented, the increased prices that we had implemented has taken into effect. The premium pricing came into the 2022, 2023 numbers. In 2024, as I was mentioning at the beginning of the call, the initial price increases have stayed within the business. The premium pricing that was always going to be temporary came out of the business. That was a factor in the revenue decline in 2024 that I had talked about. Importantly, even despite that premium pricing coming out of the business, the gross margin profile remained very strong relative to the company's history at 36%. We are very optimistic about our ability, given the competitive environment and the pricing environment that has held on the price increases from a couple of years ago. We are very optimistic that we are going to be able to maintain the margin profile that we've recognized over the last couple of years. Talk about why we win. Obviously, we are a market leader in the photomask business. Why is that? One, we produce very high-quality photomasks. I've said during the discussion of what a photomask is, talked about the high quality that's required of the photomasks. Photronics has done a fantastic job over the years in perfecting its craft on manufacturing its photomasks and shipping those off to customers. One of the most critical aspects, though, is the geographic reach that I had talked about at the beginning of the presentation. With 11 facilities throughout the world, and three of them in the United States, two of them in Europe, and the remaining six in Asia, being very close to the customer base is very critical to them. One, it's because the lead times are not very high. We typically operate with lead times of about one to three weeks. In addition to that, after we ship off the photomasks to our customer base, as I said, in more higher-end opportunities that we participate in where that requires, say, 50, 60, 70 photomasks per semiconductor chip design or per set, many times, once the customer begins the manufacturing process, many times they halt that process within production because the customer realizes, "Oh, they needed to make a tweak to the chip design." Therefore, they send the chip design. We receive the chip designs from our customer. We have to create a couple of incremental photomasks for this opportunity and quickly ship those back to the customer. Being very close to the customer is very critical to this process because you do not want to have a very long downtime. Because when we receive those new tweaks to the design, the manufacturing facility actually halts their production. Obviously, we all know time is money, right? Being very close to the customer is of paramount importance. I talked about the high-quality, rapid response time. Those are the two most critical factors as to why we win. We've been very good at executing throughout the course of our history. As a result of that, I talked about we generate very strong cash flow. Let me actually go back to the thesis. I want to talk a little bit about the geographic presence because that's part of the thesis of what are the opportunities that we see ahead of ourselves. One is we are seeing semiconductor companies increase investments in the United States. I think we've seen over the last 8 - 10 years, and in particular over the last couple of months, a number of semiconductor companies throughout the world that have been producing chips in Asia have been bringing their production back to the United States. We see opportunity to grow in the United States. We are increasing our CapEx, capital investment, and expanding production here in the United States. That is an opportunity. As I said before, we are seeing about the increased number of photomasks required for higher-end chip designs. That, obviously, then raises ASPs. That is an opportunity. As the world shifts to smaller and smaller, we call them geometries or more advanced semiconductor chips, more photomasks are required. That is an opportunity. The photomask industry is typically about 1%-1.5% of the total semiconductor market. As the semiconductor market grows, the industry should grow or the photomask industry grows along with it. We talked about the competitive advantages. I will not go into much more detail about that. The remaining slides are pretty much supportive of what I have been talking about so far. I am going to actually pause here. I think I have been talking for about 20 minutes. I will pause here and open the line to Ana and see if there are any questions. Okay. Thanks, Ted. Yes, there are some questions for you. Kurt wants to know, do you have any plans to grow sales in other regions? Talk a little bit about maybe some barriers that you might face in other regions. Yeah, very good question. Many regions throughout the world are also looking at expanding their semiconductor business. Because of COVID, obviously, I mentioned the U.S. initiative to bring manufacturing back in the United States. Because of COVID in the 2020 time frame, the world, or at least the industry, realized it was very heavily exposed to both China and Taiwan for production of semiconductor chips. Many countries throughout the world, Japan, Korea, countries in Southeast Asia, even India, Europe, many of these countries or regions throughout the world are looking to expand their own semiconductor industry to reduce reliance upon both Taiwan and China for the bulk of the manufacturing of chips. We are looking at, are we best positioned for the evolution of how the world evolves to produce semiconductor chips down the road? It is something that we're looking at. Let me talk a little bit about China. Because China, if you looked at our geographic mix, about 28% of our revenue is produced out of our facilities in China. And 100% of those facilities, production out of those facilities stays within China. About a third of our business is produced out of Taiwan. But a meaningful portion of that business actually ships to China. China is a very important market. We see China growing very significantly over the next, say, five years. I believe that China has an initiative to expand semiconductor capabilities within the country. On the semiconductor manufacturing side, in the next five years, there are reports out there that they are expected to double the amount of manufacturing capacity at more of the mainstream production nodes. That is a very significant opportunity for us that we see as being able to grow within that country. With that said, we were a first mover, first mover on the semiconductor photomask business into producing photomasks within China. Customers in China are very appreciative of that. Therefore, we have very strong relationships. Because, as I was saying, the semiconductor or the China government has an initiative to expand its own semiconductor production, they are actually funding and financing new startups in the photomask industry. While overall, in the global photomask IC market, we have about a third or so or greater market share. Within the China market, I'm not going to say what our market share is in China, but we have a very dominant position, our very strong position. As I said, we are seeing new entrants pop in because they're financed by the Chinese national government. What does that mean for our business in China? As I was saying, we still see the growth of the market. We believe we can continue to grow. Because of these new entrants, we do believe that we will see some market share in China. How much remains to be seen. These new entrants do not have the history, the expertise that we have, the quality that we have, and the relationships that we have within China. We feel very good about our position in China. To the point of the question, we are not relying on China to grow. We are looking at expanding in the United States. In 2024, we spent $131 million on CapEx or buying new equipment for our clean room facilities. In 2025, we have guided to $200 million in CapEx. That is a very significant increase. The bulk of the increase is occurring in the United States. We expect by the time the new tools are installed and up and running and then customers are qualified on these new tools, we call the equipment tools. Once they're qualified on the new equipment, that's when we can start to generate revenue. That process is time-consuming. By the time we install these tools and recognize revenue, it's probably later in 2026. We see the United States as being a very significant growth opportunity. It depends on what happens in Southeast Asia to expand there. That is how we think about our geographic opportunities. Mira asks, is your photomask technology proprietary? And how is it protected? It is not proprietary. Actually, it's important to understand, and I suspect that this might be our last question given the time constraints. The photomask market is broken up into two segments. One is the captives. Taiwan Semiconductor manufactures the bulk of their own photomasks. Samsung, Intel, they manufacture the bulk of their own photomasks. We are one of the largest players in the merchant market. The captive market is about 60% to 2/3 of the total. The merchant market, obviously, is the remaining portion. We are a leader in the merchant market. Is there proprietary? It's basically, can you produce photomasks at a higher quality and at a more rapid response time and with greater technological capabilities? Because photomasks are more advanced when you get into the high-end business. Can you produce those better than your competitors? Given our history, we've been able to do that. Yeah, that's sufficient for that question. I don't know if there's another question you can quickly answer here real quick or not. There are a few more questions. We are out of time, but maybe you can touch a little bit to condense some of them, a little bit about these tariffs, right, and how that might affect what you're doing. Yeah, good question. Because we produce photomasks throughout the world and in various geographies throughout the world that I've touched upon, we actually are not impacted by tariffs to a significant extent at all. We do not see that as influencing our business, at least from a cost perspective. I think that the biggest way that it influences our business is it seems as though the tariffs that are being implemented are enticing companies such as TSMC to bring manufacturing to the United States. They announced a $100 billion investment in the United States about a month ago. That, even though TSMC produces the bulk of their photomasks in-house, they do outsource some. It will be interesting to see are they going to increase the number or the amount of photomasks that they outsource to merchant suppliers such as Photronics. We see it actually as more of an opportunity than a very significant risk to our business. Ted, thank you so much. We'll send the rest of these questions to you so you can answer on your own. Fascinating industry, great presentation. We appreciate you coming on, and we hope that we see you again maybe next month. Thank you so much for the time, Ana. I really appreciate it. Have a good one, everybody. All right. Thanks, Ted. All right, everyone, stay with us. We'll be right back.