Ladies and gentlemen, thank you for standing by, and welcome to the Aehr Test Systems First Quarter Fiscal 2012 Earnings Conference Call. [Operator Instructions] This conference is being recorded today, Thursday, September 29, 2011. And I'd now like to turn the conference over to Joe Calabrese, Financial Relations Board. Please go ahead, sir.

Thanks, Mikaela. Good afternoon, and thanks for joining us to discuss Aehr Test Systems' first quarter fiscal 2012 results. By now, you should have all received a copy of today's press release. If not, you can call my office at (212) 827-3746, and we'll get one to you right away. With us today from Aehr Test are Rhea Posedel, Chairman and Chief Executive Officer; and Gary Larson, Vice President of Finance and Chief Financial Officer. Management will review its operating performance for the quarter before opening the call to your questions. I'd now like to turn the call over to Gary Larson. Please go ahead, sir.

Thank you, Joe, and thanks to everyone for joining us today. Before we begin, I'd like to make a few comments about forward-looking statements. Please be advised that during the course of our discussion today, we may make forward-looking statements that involve risks and uncertainties relating to projections regarding industry growth and customer demand for Aehr Test products, as well as projections regarding Aehr Test's future financial performance. Actual results may differ materially from projected results and should not be considered as an indication of future performance. These risks and uncertainties include, without limitation, world economic conditions, the state of the semiconductor equipment market, acceptance by customers of Aehr Test technologies, acceptance by customers of the systems shipped upon receipt of a purchase order, the ability of new products to meet customer needs or perform as described, the company's ability to maintain sufficient cash to support operations, the company's marketing of a commercially successful wafer-level test and burn-in system and the potential emergence of alternative technologies, each of which could adversely affect demand for Aehr Test products in fiscal 2012. We refer you to our most recent 10-K and other reports from time to time filed with the U.S. Securities and Exchange Commission for a more detailed description of the risks facing our business and factors that could cause actual results to differ materially from projected results. The company disclaims any obligation to update information contained in any forward-looking statements to reflect events or circumstances occurring after the date of this conference call. Now I'd like to introduce our Chairman and CEO, Rhea Posedel. Rhea?

Thank you, Gary. Good afternoon, and welcome to our conference call for the first quarter of fiscal 2012. I'm pleased to report that we got off to a good start in our first quarter of fiscal 2012, as reflected by our revenue growth on both a year-over-year and a sequential quarterly basis. Net sales for the first quarter were $4.1 million, 90% higher than the first quarter of fiscal 2011 and up 10% sequentially compared to net sales of $3.7 million in our prior quarter. During the quarter, we benefited from revenue of approximately $2 million in FOX-1 WaferPak contactor system upgrades and services from a leading NOR flash producer. Importantly, we also saw an increase in ABTS system revenues as we continue to make inroads adding new customers. We had a number of additional highlights that I'd like to bring to your attention. First, our Nor flash customer has all of its FOX-1 testers up and running. Our field support team did an excellent job in moving the systems from its prior Japanese production site and reinstalling and getting them production-ready on schedule. Second, we shipped our new ABTS-L56i burn-in system to a leading logic integrated device manufacturer for evaluation. The target application is for burn-in of high-power logic devices requiring individual temperature control per device. Even though this won't be recorded as revenue until our customer validates that the ABTS can pass their qualification process, we believe this is a major milestone. This customer has a high-interest level in our ABTS because it offers higher capacity at a lower cost per device than competitive systems. If the qualification is successful, which could take up to 3 months, we believe this customer has the potential to order significant quantities of ABTS systems over a number of years. Third, on…

Thanks, Rhea. As Rhea mentioned, net sales was 90% or $4.1 million in the first quarter of fiscal 2012 compared to $2.2 million in the first fiscal quarter of last year. Gross profit was $1.8 million for the first quarter of fiscal 2012 or 43.6% of net sales. This compares to gross profit of $944,000 for the first quarter of fiscal 2011 or 43.5% of net sales. Taking a look at operating expenses, SG&A was $1.6 million in the first quarter, up somewhat from the prior year period. First quarter R&D expense was $1.1 million, down somewhat from the first quarter of last year. R&D spending can fluctuate from quarter-to-quarter depending on the development phase of new product. In the first quarter of fiscal 2011, operating expenses were reduced by $155,000 related to partial proceeds received from the Spansion Japan bankruptcy claim. Included in fiscal first quarter 2012 results is a gain of $990,000 from the sale of our interest in ESA Electronics, a Singapore private company. We recorded net income of $124,000 compared to net loss of $1.5 million in fiscal year first quarter 2011. Pro forma net loss in first quarter of fiscal 2012 was $700,000 or $0.08 per diluted share compared to a pro forma net loss of $1.4 million or $0.16 per diluted share in the same period of the prior year. Turning to the balance sheet. Our cash and cash equivalents were $3.9 million at August 31, 2011, compared with $4.0 million at May 31, 2011. Although we have access to a $1.5 million line of credits, we have not yet borrowed against that line. This concludes our prepared remarks. We're now ready to answer your questions. Operator, please go ahead.

[Operator Instructions] And we have a question from the line of Geoffrey Scott from Scott Asset Management.

You said that Spansion has all their FOX-1 testers up and running. Were those the ones that went to Taiwan?

Yes.

So all of them went to Taiwan, right? None of them came to Texas?

About half came to Taiwan. I mean, half went to Taiwan and half came to Texas.

And they're all up and running?

Correct.

Okay. The -- you said it's the Singapore operation of the -- of a Chinese...

Japanese. So we announced a few quarters ago, booking an account -- major -- a special ABTS to a leading Japanese microcontroller producer. And initially, the first system went to their Japanese factory, but then we booked follow-on orders that we announced last quarter and the first one went to their Singapore factory, and that's the one that we shipped, September 1. And the Singapore factory is the factory that they're going to add most of their capacity. So that's why it was significant for us to talk about that particular unit.

Okay. The Mainland Chinese ABTS customer, can you describe that one?

It was -- I believe it was a -- it was just -- it's a test lab that's in China. So it's not a large IDM, but it's a test lab that does burn-in and test services.

And they have the capacity for substantial follow-ons?

That's correct.

Okay. In the 10-K, you said that you had to complete engineering development of certain necessary hardware and software features for the ABTS. Can you shed some color on that?

The 10-K was probably talking about finishing the ABTS-L56i, which is a system that we shipped last month for qualification. So we had to do some enhancements for software and hardware for that application, but we believe most of it is done.

Most of it's done. Okay, you said that second quarter sales are going to be higher than second quarter fiscal 2011.

That's correct.

Can you remind me what second quarter 2011 was?

It's about $3.6 million.

Okay. Is it going to be higher than first quarter 2012?

We're just guiding to the same quarter of the prior year. That number was $3.577 million, Geoff.

Okay. Book to bill for the first fiscal quarter, positive -- above 1 or not?

We don't normally talk about book to bill. We give our backlog at year end, but beyond that we don't typically discuss the bookings or backlog, Geoff.

Did backlog go up?

You're good.

Yes? No?

Well, anyway, it was a -- we talked about a number of activities that were -- to us was very positive. And I think the key thing for us is booking these key production accounts and winning these customers over. And they will continue to add additional capacity going forward, and that's kind of what we're looking at for our growth strategy.

And at this time, I would now like to turn the conference back over to management for closing comments.

I'd like to thank you all for joining us this afternoon, and we look forward to next quarter's conference call. Thank you, and goodbye.

Bye-bye.