Good day, ladies and gentlemen, and welcome to the Axcelis Technologies Third Quarter 2012 Conference Call. My name is Jeff, and I'll be your coordinator for today. [Operator Instructions] We will be facilitating a question-and-answer session towards the end of this conference. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today's call, Amy Rasimas, Director of Investor Relations of Axcelis Technologies. And you have the floor, ma'am.

Thank you. This is Amy Rasimas, Director of Investor Relations. Welcome to our conference call to discuss our third quarter results. With me today is Mary Puma, Chairman and CEO; Jay Zager, Executive Vice President and CFO; and Doug Lawson, Senior Vice President of Strategic Initiatives. If you have not seen a copy of our press release issued earlier today, it is available at our website. Playback service will also be available on our website as described in our press release. Please note that comments made today about our expectations for future revenues, profits and other results are forward-looking statements under the SEC's Safe Harbor provision. These forward-looking statements are based on management's current expectations and are subject to the risks inherent in our business. These risks are described in detail in our Form 10-K annual report and other SEC filings, which we urge you to review. Our actual results may differ materially from our current expectations. We do not assume any obligation to update these forward-looking statements. I'd now like to turn the call over to Mary Puma.

Thank you, Amy. The third quarter proved to be more challenging than we had originally anticipated. Like others in the industry, difficult market conditions weighed on our financial results. This was driven by continued caution on the part of many customers. Plant systems orders were delayed and fab utilization which is already soft trended slightly lower in several geographies. Our revenues, which had tracked within our forecast all quarter, were negatively impacted by a decline in spare shipments in the last week of the quarter. Customers managing to their reduced budget abruptly delayed receipt of parts that were ordered and scheduled for delivery that week. Consequently, our financial results came in at the low end of guidance. Jay will be providing more color on the quarter and our forecast in a moment. At Axcelis, we know that successfully leveraging the industry's cycle requires a downturn strategy that combines strong financial management with the effective product positioning designed to capitalize on the inevitable upturn. Therefore, in addition to carefully managing our expenses in cash, we are closely working with key customers on joint development projects related to advanced nodes. This work is being conducted both in our demo facility and with tool evaluations in our customer's fab. The results will provide our customers with the data they need to lock in Axcelis tool selection for future technology and capacity buys. So let's discuss our strategy for success relating to growth. During the last 12 months, we have made major investments in the placement of 3 critical evaluation tools that will drive penetrations of our flagship products. 2 high current Optima HDx evaluation tools have been placed in leading-edge foundries. Advanced nodes in foundries are expected to lead the industry into the next upturn. The third evaluation placement is the shipment of…

Thank you, Mary, and good afternoon, everyone. As with many companies in our industry, Axcelis experienced a continuation of the downturn in the third quarter. Revenues were $44.6 million, slightly below the bottom end of our guidance and about 25% lower than the second quarter. Gross margin, operating losses and cash all came in at the low end of our guidance. System sales in the quarter were $12.7 million, while sales for our aftermarket business, which we call GSS, were $31.9 million. While the sequential decline in GSS was relatively small at 3.1%, the sequential decline in system sales was significant at 51.3%, reflecting a marked slowdown in the buying patterns of our key customers. Consistent with the lower systems revenues, systems shipments also showed a marked decline to $8.4 million compared with $26.8 million in the second quarter. Within these shipment totals, ion implant shipments were $2.8 million or about 1/3 of the total, while shipments for our cleaning and curing systems, which reflect primarily our dry strip business, were $5.6 million or about 2/3 of the total. For the first 3 quarters, ion implant shipments were almost 75% of our total shipments. In the quarter, about 90% of our shipments were to memory customers and about 10% of our shipments were to logic and foundry customers. Through the first 3 quarters, about 70% of our shipments have been to memory customers. Sales to our top 10 customers accounted for approximately 70% of our total sales, with 3 customers exceeding 10%, but no 1 customer exceeding 20%. Systems bookings for the quarter were $13.2 million, down about 28% sequentially. Our book-to-bill ratio was 1.56 compared with 0.68 in the second quarter. And we exited the quarter with a systems backlog including deferred revenue of $19.5 million, an improvement of…

Thank you, Jay. Visibility on the timing of market improvement remains uncertain. As a result and as Jay discussed, we are keenly focused on managing expenses and cash carefully through this period and are committed to driving growth through evaluation and penetration. We have 3 very exciting evaluations underway in both medium current with our new Purion M system and in high current with logic and foundry customers. These evaluations will ultimately grow our market share in these large and important implant segments. Our customers are very supportive and are counting on us to help them meet their future manufacturing challenges. We believe that we are on a course that will, when the industry turns up, lead to higher revenues, improved margins and profitability, cash generation and ultimately, increased shareholder value. With that, I'd like to open it up for questions.

[Operator Instructions] Our first question comes from the line of Christian Schwab with Craig-Hallum Capital Group.

What do you think the ion implant TM for 2012 is going to shake out to be?

It's really hard to say, but we think it's going to be significantly less than the DataQuest projection that's out there right now, which is, I think, about at $1 billion. So again, it's hard to tell, but well below that.

Yes. And do you think you're losing share? Or do you think that just because your disproportionately tied to memory it looks that way?

No, we don't believe that we're losing market share. The orders that we haven't gotten are orders right now that customers have pushed out. It's not that we've lost them to the competition, I think. What we're seeing right now is very consistent with what others in the industry are seeing in terms of lowered systems business. And when things pick up, we fully expect to get the business from customers that we currently have and to, at least, maintain our market share. And we believe that with the product penetrations and evaluations that we have placed in the field right now, we'll actually have improved market share and a much stronger 2013.

Great. When -- what do you think the quarterly shipping capacity with the workforce reductions is today?

This is Jay, Christian. I'm not sure that's a meaningful question because with our flex workforce, we can bring people in at a moment's notice. So with all the issues we're facing, ramping up for higher volumes is not a problem for us, and the plant can easily handle 2, 3, 4, 5x the capacity it's experienced this year. And the good news for us is that many of the folks who we've laid off in the manufacturing area are folks who we would readily call back in when the upturn occurs, so we would be able to move relatively quickly to respond to an upturn. So where it's challenging for us is not so much on the labor side, but it's managing the material purchases to make sure that we're not getting ahead of ourselves with material purchases, but also being able to react quickly when market demand increases. So we will be able to respond fairly seamlessly to increases in volumes.

Our next question comes from the line of Patrick Ho with Stifel, Nicolaus. Patrick J. Ho - Stifel, Nicolaus & Co., Inc., Research Division: I apologize. I missed the early parts of the call, so maybe you've already addressed this, but in terms of the shipments of the Purion M system, are you targeting multiple cluster segments? And what I mean by that is logic, foundry and memory. Are you primarily focused on one of those areas at the outset and then once you get traction on it, expanding into other -- to the other segment?

No, we did mention that, Patrick. The Purion M initially went into a Flash fab, a leading-edge Flash fab. However, in terms of customers we are working with right now, it is a mix of logic, foundry, as well as additional memory customers. So as we always have, we will report the shipment of those systems when they go out the field. Patrick J. Ho - Stifel, Nicolaus & Co., Inc., Research Division: Okay, great. And then, again I apologize if you also mentioned this. But, obviously, there's always a lot of moving parts in terms of new products and the qualifications. What's the timeline you're looking for in terms of the Purion M, in terms of are you looking at this as a 6-month type of qualification or is this going to be longer, say, 12 months?

It's going to be -- at this point, based on what we know and the customers we're working with, it's going to vary anywhere from 6 to 12 months. Based on the performance of the tool, what our expectation is that even if it's a 12-month evaluation that once the tool is qualified for production across a broad number of implant steps that the customers, when they are going to buy, will in fact buy additional Purion M units even prior to the evaluation officially closing out.

And Patrick, one of the points Mary mentioned, which you may not have caught is the initial evaluation unit is doing very well. We were actually very pleased by the -- that we and the customer as well, very pleased by the performance of the tool. So that hopefully could result in a more accelerated buying cycle than a more delayed buying cycle. Patrick J. Ho - Stifel, Nicolaus & Co., Inc., Research Division: Sure. No, great. That's helpful. And Jay, maybe just a question for you in terms of the business model. Obviously, we're in a difficult environment and -- not only yourself, but a lot of the companies in the space are obviously trying to make their cost cuts. They're restructuring. Obviously, OpEx is probably, I don't want to say the easier way, but you can use a lot of variable expenses to help lower your cost structure. On the cost of goods line, how do you see it for the company right now, and what types of moves can you make on that line to help the overall business model, as well as the breakeven level?

We're actually putting a lot of effort into that area. Apart from the activities underway to reduce the material cost and the labor content of our products, we entered fiscal year 2012 this year with about $30 million, Patrick, in manufacturing overhead spending. And that goes in, obviously, to the overhead rates we use, et cetera. We have brought that number down by about 15% this year. And as we start to plan for next year, we plan to take out an additional 5%, 10%, 15% of reductions in our manufacturing overhead, so that's going to reduce our cost base as well. And as you indicated, doesn't show up in the operating expenses which shows up in the cost of goods. On a similar basis, we've taken a hard look at our service overheads, and there is -- those numbers are much smaller. But we're also targeting some significant reductions in the service overheads as well, so that the cost reduction activities are not limited to the OpEx, but also include all aspects of the cost of goods components.

This concludes the Q&A portion of the call. I will now turn the call back over to Mary Puma who will make a few closing remarks.

I'd like to thank you for joining us today. We were planning to attend the Piper Jaffray conference in New York next week, however, we were informed earlier today that it has been postponed. We will post an update to our Investor Presentation on our website next week. Thank you.

This concludes the presentation. Thank you for your participation in today's conference. You may now disconnect. Have a great day.