Welcome to the Camtek Ltd. First Quarter 2017 Results Conference Call. [Operator Instructions]. You should have all received by now the company’s press release, if you have not received it please contact Camtek's Investor Relations Team at GK Investor and Public Relations at 1-646-688-3559 or view in the news section of the company's website www.camtek.co.ir. I would now like to hand over the call to Ehud Helft of GK Investor & Public Relations. Mr. Helft, would you like to begin please?

Thank you Alberta and good day to all of you. I would like to welcome all of you to Camtek’s first quarter 2017 results conference call. I would also like to thank Camtek’s management for hosting this call. With us on the line today are, Mr. Rafi Amit, Camtek’s Chairman and CEO; Mr. Moshe Eisenberg, Camtek’s CFO; and Mr. Ramy Langer, VP head of the semiconductor division. Rafi will provide an overview of Camtek’s strategy going forward and will discuss our recent developments. Moshe will summarize the financial results for the first quarter. We will then open the call to take your questions. Before we begin, I would like to remind our listeners that certain information provided on this call are internal company estimates unless otherwise specified. This call also may contain forward-looking statements. These statements are only predictions and may change as time passes. Statements on this call are made as of today and the Company undertakes no obligations to update any of the forward-looking statements contained whether as a result of new information, future events, changes in expectations or otherwise. Investors are reminded that actual events or results may differ materially from those projected, including as a result of changing industry and market trends, reduced demand for services and products, the timely development of new services and products and their adoption by the market, increased competition in the industry and price reductions, as well as due to other risks identified in the Company’s filings with the SEC. Please note that the safe harbor statement in today's press release also covers the contents of this conference call. In addition, during this call certain non-GAAP financial measures will be discussed. These are used by management to make strategic decisions, forecast future results and evaluate the Company's current performance. Management believes that the presentation of non-GAAP financial measures is useful to investors’ understanding and assessment of the Company’s on-going core operations and prospects for the future. A full reconciliation of non-GAAP to GAAP financial measures is included in today’s earnings release. I would now like to hand over the call to Rafi Amit, Camtek’s Chairman and CEO. Rafi go ahead please.

Good afternoon and thank you for joining us on our call today. Camtek delivered strong and record results for the first quarter of 2017 exceeding our revenue guidance and achieving a multi-year high in earning. Our gross margin was particularly high due to the product mix this quarter. Our operating margin was at 13%, a level we're very pleased with and in-line with our long term model. The operating income was $4 million and net income was $3.4 million, both up significantly from last year and last quarter. These results are due mainly to robust business performance on both. The semiconductor side of our business and on the PCB side and we expect this strength to continue into the second quarter. Our Q2 revenue expectations of between $33 million and $34 million, imply year-over-year growth of approximately 25% and sequential growth of 10%. Our strength is built on relatively broad market strength but beyond that we believe the areas we focus on particularly spending on capital equipment for advanced packaging are growing well ahead of the broader market. We see strong orders with many customers and we see these positive strengths continuing through 2017. I'd like to go into more details the performance of our semiconductor business. In-line with the strong market demand that we're seeing in general our semiconductor division sales in the first quarter grew by 26% over this off first quarter last year and contributed slightly over 2/3rds of our revenues. Asia continued to dominate our sales making up a 90% share of our semiconductor revenue. However in addition we also saw strong performance in our U.S. sales which altogether led to a strong quarter and we forecast a strong 2017 in general across all geographies. The semiconductor industry is expected to show robust growth in the…

Thank you Rafi. We're very pleased with the financial results of the first quarter which were ahead of our expectations. First quarter revenues were $30.8 million up 26% year-over-year and up 5% sequentially. Revenues from sales and services to the semiconductor industry in the first quarter were $21.1 million representing 68% of our total revenues. Sales grew by 26% over those of the first quarter last year. First quarter revenues from sales and services to the PCB market were $9.7 million representing 32% of our total revenues in the quarter. Sales in the first quarter grew by 26% over those of the first quarter last year and 23% over the previous quarter. The geographic revenues split for the quarter were as follows. China was the strongest region during the quarter representing approximately 31% of overall revenues. Korea was 23%, Taiwan was 21%, rest of Asia excluding China, Taiwan and Korea were 15%, U.S. and Europe sales were 10%. Unless I state otherwise there was several rest of the results on an ongoing [ph] basis, the reconciliation between the GAAP and non-GAAP results appear in the table at the end of the press release issue earlier today. First quarter gross profit was $14.9 million representing a gross margin of 48.2%. This compared with a gross profit of $10.3 million representing margin of 42.3% in the first quarter of last year. The high gross margin in the quarter was a result of the sales mix and we expect to return to the more typical range of 44% to 46% in the coming quarter. Operating expenses in the quarter were $10.9 million. This is compared with $9.9 million in the first quarter of last year. Operating profit in the quarter was a $4 million compared with $0.5 million reported in the first quarter of last year. Operating margin was 13% in the quarter. Net income for the first quarter of 2017 was $3.4 million or $0.10 per diluted share. Net margin will 11.1% in the quarter, this is compared to net income of $0.2 million or $0.01 per diluted share in the first quarter of last year. Net cash and cash equivalents as of March 31, 2017 were $24.3 million compared with $19.7 million as of December 31, 2016. We generated a strong operating cash flow of $5.9 million in the quarter due to a high level of collections. We're in a very aggressive growth periods, as a result cash flow tend to lag behind revenues and profits. We expect Q2 cash flow to be lower. As Rafi mentioned for the second quarter of 2017 we expect revenues to increase to $33 million to $34 million range between 21% and 25% year-over-year. Built on the continued strength we see in our end markets. We will now open the call for questions. Operator?

[Operator Instructions]. The first question is from Craig Ellis of B. Riley. Please go ahead.

Yes thanks for taking the questions. Good afternoon gentleman and congratulations on the very strong execution at the start of the year. I will first start with just clarification on the financial commentary Moshe, with regard to gross margins in the second quarter you mentioned they would go back to the normalized range of 44% and 46%. One, were there any one time items in the first quarter's gross margin and two, given the volume it would seem that gross margins would be biased to the high end of the range in 2Q, is there any reason that would not be the case?

Okay. If you want was definitely biased on the very high end of our range, this is due to a product mix no specific deal or order but generally speaking we had a very strong high margin type deals and this is not going to repeat itself in the second quarter.

Okay, that's helpful. Rafi you mentioned in your prepared remarks that there were some volume purchase agreements. One, can you provide some color in terms of the extent to which those were with existing customers both (inaudible) or IVMs for our new customers and two, was the business showing very robust year on year growth of mid-20s in the first and second quarter. Do those agreements and do trends in general portend that we could see sustained 20% plus year on year growth in the back half of the year?

I would say most of the volume purchase agreement came from the (inaudible). As we mentioned it's about a $20 million potential sales, we already see result and get orders, demand for delivery during the Q2 and we feel very confident that they will meet this target. This also give us like a good feeling about the second half of the 2017.

You mentioned that there will be some new products coming in the 3D arena, can you provide some more color as to whether those would be products that would expand the product line further or are they refresh products for things that are currently in the marketplace?

Okay. Like every case all the time we continue developing and improving our performance because let's say the amount of (inaudible) are going up and more cation like the cube memory is also require more 3D and we have also to provide I would say better performance and accuracy and support in order to meet expectations of customers. So we all the time must develop and bring more capability to our tools. So I would say it would be definitely we are going to provide it soon and it will serve specifically probably customer that needs a very high volume, a very high accuracy compared with the current one. Still our current performance are very well and as we mentioned it's industry standard. Now we live I would say a better capability, some customer can continue using our current capability, some customers would like to upgrade the capability to the new system or the new feature.

And that's helpful and last question for me before jumping back into the queue. Nice to see the software initiatives progress and on track for revenues this year. Is software revenue material enough later this year to impact gross margins in the range that the company has talked about 44 to 46 or would materiality and gross margin impact be more of a 2018 event. Thanks guys.

I would say you know every new feature, new software it takes some time to be adopted by the market. So I believe that we can see more of that can affect the result mainly in 2018. This year its going to be like maturation stage so it will not be substantial compared with 2018.

The next question is from Edwin Mok of Needham and Company. Please go ahead.

This is actually [indiscernible] for Edwin. Thanks for taking our questions and congrats on the great guidance. Rafi, the first question for you know with the strong 2Q guidance can you provide some color on what are some of the main drivers for the strong guidance -- is it just continued growth in advanced packaging along with the same momentum and PCB or are there any other market that are driving the strong guidance.

I want to be sure that I understand you correctly. In general the -- in the semiconductor as we said in the script we can see very strong demands from almost all type of application if its semi-sensor if its MEMS, if its memory, if it is a advanced packaging we can see it from all over and we cannot indicate that one area is growing more, all of them are in the same I would say strengths. Regarding the PCB we mentioned the major forward key driver and I would say that its going to continue in the second quarter. We cannot predict for the whole year because especially in the PCB delivery time is a little bit tight and not easy to predict for the whole year but we believe that we can see this trend continue during the whole 2017. Rafi do you want to add something?

No I think your answer was very precise and I think the main point that I would repeat that we're see the significance on the applications we are participating. I would even say that the CMOS image sensor is exceptionally strong as we see from the market place the move to three high definition cameras on the cellphones.

Second question is just on the 2D inspection tool, I think in your script you had mentioned you shipped new 2D tools to customers both the new and existing ones. Can you talk about what type of opportunities that can present and also maybe talk about some of the progress you have on some of the evaluation tools you currently have in the market.

I would take this question, in general I think as we said in the script, the 2D is in several segments and we're seeing business in the CMOS image sensors, in the MEMS, in RF, in the power segment. We're seeing also 2D in the events packaging, fan out and regular (inaudible) inspection. So the way we're very focused on those specific segments and as Rafi andas we said in the script we're moving towards to new customers, the evaluations that we're having are all on track. The performance from our 2D is as we planned, our customers are giving us very good feedback and we definitely see the growth on the 2D on-track as we discussed in the previous quarters.

Got it. Last question for me, can you provide an update on the process with the Griffing [ph] in the past [indiscernible], any update there would be helpful. Thank you.

Your question is about the Griffing?

Yes that’s correct.

Okay. In general we're I would say in-line with the development plan. As we said we kept completed by the beginning of next year and we definitely continue looking for partner to commercialize product that was direct now according to this activity.

Thank you. [Operator Instructions]. There are no further questions at this time. Before I ask Mr. Rafi to go ahead with his concluding statements I would like to remind participants that a replay of this call will be available on Camtek's website www.camtek.co.ir beginning tomorrow. Mr. Amit would you like to make your concluding statements?

I would like to thank you for your continued interest in your business. I look forward to talking with you again this quarter. Thank you and good bye.

Thank you. This concludes the Camtek's first quarter 2017 results conference call. Thank you for your participation. You may go ahead and disconnect.