Ladies and gentlemen, thank you for standing by. Welcome to Camtek's Third Quarter 2018 Results Conference Call. All participants are at present in a listen-only mode. Following management's formal presentation, instructions will be given for the question-and-answer session. As a reminder, this conference is being recorded. 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 it in the news section of the Company's website at www.camtek.com. I would now like to hand over the call to Mr. Ehud Helft of GK Investor Relations. Mr. Helft, would you like to begin please?

Thank you, and good day to all of you. I would like to welcome all of you to Camtek's third quarter 2018 results conference call, and 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 CEO; Mr. Moshe Eisenberg, Camtek's CFO; and Mr. Ramy Langer, Camtek's COO. Rafi will provide the overview of Camtek's results and discuss market trends in the third quarter of 2018. Moshe will then summarize the financial results for the third quarter. We'll 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 obligation to update any of the forward-looking statements contained whether as a result of new information, future events, changes in expectation or otherwise. Investors are reminded that the actual events or results may differ materially from those projected, including as a result of changing industry and market trends, reduced demands for services and products, the timing and 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 filing with the SEC. Please note that the Safe Harbor statement in today's press release also cover 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 ongoing 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, Camtek's CEO. Rafi, go ahead please.

Thank you all for joining our call today. Camtek delivered excellent results for the third quarter. The company showed strong revenue of $72.3 million up 35% over Q3 of last year and exceeded the top end of our guidance of $31 million to $32 million. We also demonstrated significant improvement in all the profitability metrics. With EPS of $0.16 in addition our outlook ahead remained positive. Let us look at a specific market trends as these relates to Camtek. Our target market growth is driven both by introduction of new technology and by capacity expansion. The number of tools require for inspection and meteorology depends on the number of wafers. The growing demand for 1% inspection and meteorology instead of sampling, demand for much higher accuracies and smaller geometric results in significantly more machine time. This obviously translate to more tools require for production. Our market segment is characterized by unique requirements driven by the end users, which result in new inspection and metrology steps. This is another factor in higher growth rate in our market compared with general semiconductor market. Good example for such requirement is the inner crack detection which we introduced earlier this year. Our main market segment is advance packaging. This technology is [indiscernible] being adopted instead of wire bonding. Specifically in the memory space while the [indiscernible] price are undergoing some pressure. The transition into advance packaging is nonetheless expected to continue driven by technical requirement for higher bandwidth and lower power consumption. Other segment which we focus on such as CMOS Image Sensor means [indiscernible] joining growth. Let me give you an example, the newest smartphone which we are currently being introduced including five high resolution cameras. This means that even without any increase in the number of phones our business will grow as…

Thanks Rafi. Camtek sold various products securing in the third quarter ahead of our expectations with results exceeding the top end of our guidance range and this performance filtered down our financial metrics to the bottom line. Our growth operating and net margins were all strong and at level we were very happy with showing the operating leverage inherent in our business model. In my financial summary ahead, I would provide the results on a non-GAAP basis. The configuration between the GAAP results and the non-GAAP results appear in the table at the end of the press release issued earlier today. As you may recall, we sold our PCB inspection business in the third quarter of 2017 and have considered discontinued operation. In my summary, the results of the third quarter of last year will not include this. Please note that starting from this quarter, we will upload to our website and presentation in Q3 financial highlights. Third quarter revenues were $32.3 million ahead of the guidance and up 35% year-over-year. The results were driven by strong demand across all segments and applications. As Asia continues to be our strongest region and during the quarter accounted for 84% of overall revenues. The remainder of revenues from the US and Europe contributed 16%. Gross margin for the quarter was 60.4% versus 49.4% in the third quarter of last year. While gross merging this quarter was slightly higher than our typical [indiscernible] as you know the gross margin is the function of several factors including volumes and product mix sold. So there is always [indiscernible] ability between quarters. In general we expect the growth margin to vary around [indiscernible]. Operating expenses in the quarter were $10.1 million over 31.2% of revenues compared with $8.8 million or 36.9% of revenues in the third…

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

And congratulations on very strong growth and margin execution and 50% of margin I think for the first time, so good job guys. The first question is just on the commentary for the fourth quarter revenue outlook and then continued growth in the first quarter. I'm hoping Rafi that you can just provide some incremental color on some of the specific things that are driving that growth and as we think about late this year and early next year. are there any headwinds that you're encountering given some of the cross currents we've seen with some of the macro US, China, trade issues and some of the other signs of inventory correction.

In general I think I just discussed about this and I would say that in all of our sector, if we talk about Q4 we've seen the growth in all of our sectors. It's not, it doesn't come from one specific one. It's come from all of them and we still see from Dera [ph] CMOS Image Sensor, we see from other applications, we see some from micro inspection. So I would say that in general we see all over. And regarding the next year, we don't know yet, but we believe that also Q1 is about the same. So we're not depending on one customer or one segment of application we continue to see in all application to grow.

That's helpful and then a longer term question and it relates to 2019. It's not intended to see guidance, but it is intended to see some qualitative color just on what you see. This year clearly a stellar year for your 2D product ramping and yet you're still maintaining good momentum with 3D and you've talked about micro inspection. But as we look at some of the drivers to 2019 just qualitatively can you speak to them and are we at a point yet or when do get to the point where the large numbers starts to catch up with the growth in the 2D ramp that you've been seeing.

Expanding the 2D applications, we go from customer to customer each customer is its own requirement and sometime we - to work together with customers and bring for him the special solutions and this is the way how we take more and more 2D, working together with customer. Customer welcome Camtek we [indiscernible] our capability and this goes step by steps. So the 2D definitely has the great potential for continue growing, but you know it takes time and I think we do it properly. Regarding in general, in 2019 most of our customer repairing their budget in November, December so I believe that we will know more in the next two months and feel more comfortable about their budget. But in general when we discuss this customer, we definitely can hear positive signal, we don't listen, we don't hear any I would say anything that shows negative signal.

That's helpful and then Moshe, not to leave you out of the Q&A here. Stellar gross margins in the quarter from here having achieved 50.4% what are the tailwinds and headwinds to any further margin expansion as we go through the end of 2018 and look at the first half of 2019?

Generally speaking, I think the trends is to continue to improve the gross margin. We do have some - so the positive that we have some fixed expenses within the gross level and this will enable us to improve gross margin. On the same time, product mix has a lot of impact on the gross margin level. So I think the gross margin in the next few quarters will really vary around the 50%. Obviously we hope to exceed the 50% we could expect in some quarters to come a little bit charged with 50% mark.

And thank you very much gentlemen.

And the next question is from Gus Richard of Northland Securities. Please go ahead.

Could you talk a little bit about the penetration of your crack inspection? I know that's a real fully new product for you guys and was wondering how that was going.

Gus, this is Ramy. In general it's going on track. We're working with a number of customers that some have already purchased this capability, some are in process of qualifying it. Definitely the results are very positive and it's an ongoing efforts as Rafi said before it takes time for people to adopt this new technology but definitely on track and then I think as we discussed [indiscernible].

Got it and then could you there's a number of positive things going on in your end markets, high bandwidth memory, CMOS Image Sensor capacity expansion. Your new products macro defect expect etc. could you give us a ranking of which ones you think are the most potent in terms of driving revenue growth over the next 12 months?

I think what is very interesting in our business is that all of these segments are growing in parallel and it could be that one quarter you'll see a certain segment that is stronger than the other. But if I look at it on an annual basis, I think the product mix is similar. The only respect to the only area into the where we're seeing the business growing over what we used to have 50%, 50% metrology versus inspection. In the last few quarters you can see that we're selling more to 2D than then 3D metrology. But going back to the segments, specific segments I cannot say that one segment is dominant and the other is meaningless. No they're all very strong and we see the strength also across regions. Most of the regions are strong and we see healthy growth basically in all segments and in all regions.

Got it and then in the this reported quarter, gross margins were above what I was expecting and obviously it's volume and mix. Could you handicap which was more, which grow the upside wasn't volume or mix?

Actually this quarter it's a combination of volume and mix. Yes it's a combination. I don't think that there is one format that dominate over the other.

Okay, all right. Thanks so much.

[Operator Instructions] we have a follow-up question from Craig Ellis. Please go ahead.

Gentlemen, can you given the strong financial performance in the quarter and the healthy outlook through the first quarter. Can you talk about cash deployment and how you're currently thinking about the alternatives between some of the recent trends with special dividends versus saving for in organic growth. Thank you.

I think we will consider dividends from time-to-time we don't have any immediate specific needs for cash. But on the same time we do look in certain inorganic opportunities so we be more careful before we take another step with the dividend. So we'll see, at this point we're not announcing any dividends.

Thanks Moshe.

There are no further questions at this time. Before I ask Mr. Amit to go ahead with his closing statement. I would like to remind participants that a replay of this call will be available on Camtek's website at www.camtek.com beginning tomorrow. Mr. Amit would you like to make your concluding statement.

Okay I would like to thank you all for your continued interest in our business. I look forward talking with you again in the next quarter. Thank you and good bye.

Thank you. This concludes the Camtek third quarter 2018 results conference call. Thank you for your participation. You may go ahead and disconnect.