In the third quarter of 2023, non-GAAP EPS was well above the guided range as a result of better operational execution, particularly in our North America region. Revenues were within the guided range due to better-than-expected results from our aerospace and defense and data center computing end markets, which were offset by lower-than-expected results from our medical, industrial and instrumentation, automotive and networking end markets. Demand in our aerospace and defense market, which was 45% of revenues, continues to be solid with strong backlog, offset by weaker demand in some of our commercial end markets. As we look into Q4, we see a mixed picture in our end markets with sequential growth in our automotive market, stability in the aerospace and defense and MI&I markets and a decline in the data center computing and networking markets.

I would now like to provide a strategic update. TTM is on a journey to transform our business to be less cyclical and more differentiated. Over the past several years, TTM has consistently emphasized that a key part of our strategy is to add value to the product solutions that we deliver to our customers, particularly in the aerospace and defense market. In 2018, we acquired Anaren, which broadened TTM's product portfolio into highly engineered RF components and subassemblies as well as adding critical RF engineering capability and resources. In 2022, we acquired Telephonics, which builds on Anaren and TTM's customer-driven culture and disciplined approach to engineering and manufacturing. The addition of Telephonics expanded TTM's aerospace and defense product offering vertically into higher-level engineered system solutions and horizontally into the surveillance and communications markets, while strengthening our position in RADAR systems.

As a result of these strategic moves, over 50% of A&D revenues are from engineered and integrated electronic products with PCBs being less than 50% of the overall contribution. Another important element of our differentiation strategy is our investment in a new state-of-the-art highly automated PCD manufacturing facility in Penang, Malaysia. The decision to build this new factory is a direct response to our customers' increasing concerns about supply chain resiliency and regional diversification. And in particular, the need for advanced multilayer PCB manufacturing options in locations outside the Greater China region. The new facility in Malaysia will support customers in our commercial markets, such as networking, data center computing and medical, industrial, and instrumentation.

We continue to make progress on the Malaysia facility and the commissioning process is almost completed. We began to install equipment in the second quarter and are presently in the start-up phase in a number of work areas. We remain on track for first product samples in the fourth quarter and will begin customer qualifications and ramp in the first quarter of 2024. I'd also like to update you on the consolidation of our manufacturing footprint. We previously announced our plan to close three small manufacturing facilities in order to improve total plant utilization, operational performance, customer focus and profitability. PCB manufacturing operations in Anaheim and Santa Clara, California, and Hong Kong are being closed and consolidated into TTM's remaining facilities.

We seized production at our Hong Kong manufacturing facility during the second quarter, stopped production at the Anaheim facility in the third quarter and will cease production at the Santa Clara facility by the end of the year. Customers have been supportive of the consolidation, and we expect to retain the majority of the business that will be transitioning from the closed facilities. Finally, I would like to discuss the separate press release we issued regarding the announcement of our intent to expand our advanced technology capability for the aerospace and defense market through the construction of a new facility immediately adjacent to our Syracuse, New York campus. Our new facility will bring disruptive domestic production of high technology, ultra-high-density interconnect or HDI printed circuit boards in support of national security requirements.

This new facility will focus on the high-technology PCB production in North America, providing customers with reduced lead times and a significant increase in domestic capacity for Ultra HDI PCBs. In addition, it will be our most sustainable facility in North America. Groundbreaking is anticipated in the first half of 2024, with initial production in the latter half of 2025. Phase 1 of the proposed project, including capital for campus-wide improvements, is estimated to be $100 million to $130 million and is anticipated to run through 2026. TTM's planned capital investment commitments will be determined after finalizing terms with various stakeholders. Now, I'd like to review our end markets, which are referenced on Page 4 of the earnings presentation on our website.

The aerospace and defense end market represented 45% of total third quarter sales compared to 38% of Q3 2022 sales and 47% of sales in Q2 2023. The solid demand in the defense market is a result of a positive tailwind in previous defense budgets, our strong strategic program alignment and key bookings for ongoing franchise programs. At the end of the third quarter, our A&D program backlog was $1.35 billion. During the quarter, we saw significant bookings for key programs, including the advanced medium-range air-to-air missile or MRAM and the MH-60. We expect sales in Q4 from this end market to represent about 45% of our total sales. On the US budget, though the specific trajectory of the future US defense budget is still in process between the administration and Congress.

The global threat landscape is increasingly elevated. As Congress continues to work through the fiscal year 2024 Appropriation Bills, we are optimistic that there will be consistent support for the National Defense strategy and the funding of its priorities. Sales in the data center computing end market represented 17% of total sales in the third quarter compared to 14% in Q3 of 2022 and 12% in the second quarter of 2023. This end market performed better than expected and returned to year-on-year growth due to strength in our data center customers building products for generative AI applications. We expect revenues in this end market to represent approximately 16% of fourth quarter sales. The medical industrial instrumentation end market contributed 16% of our total sales in the third quarter compared to 19% in the year ago quarter and 16% in the second quarter of 2023.

The year-over-year decline was caused primarily by inventory reductions at a number of our customers. In addition, the Instrumentation segment is weighted towards the semiconductor capital equipment market, which is seeing weaker demand. For the fourth quarter, we expect MI&I to be 16% of revenues. Automotive sales represented 15% of total sales during the third quarter of 2023 compared to 15% in the year ago quarter and 17% during the second quarter of 2023. The year-over-year decline for automotive was due primarily to continued inventory adjustments at several customers and the impact of annual production shutdowns. We have not yet seen an impact on sales due to the UAW strike, but we are closely monitoring the situation. We expect our automotive business to contribute 17% of total sales in Q4.

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Networking accounted for 7% of revenue during the third quarter of 2023. This compares to 14% in the third quarter of 2022 and 8% of revenue in the second quarter of 2023. The Demand was softer as customers continue to focus on inventory digestion as well as weak end market demand. As a reminder, the Shanghai backplane business, which we sold in our second quarter, contributed approximately $16 million of sales to this segment in the third quarter of 2022. In Q4, we expect this end market to be 6% of revenues as we see continued weakness due to softer market conditions, particularly in telecom and ongoing inventory management by our customers. Next, I'll cover some details from the third quarter. This information is also available on Page 5 of our earnings presentation.

During the quarter, our advanced technology and engineered products business, which includes HDI, rigid-flex, RF subsystems and components and Engineered Systems accounted for approximately 47% of our revenue. This compares to approximately 41% in the year ago quarter and 43% in Q2. We are continuing to pursue new business opportunities and increase customer design engagement activities that will leverage our advanced technology and engineered products capabilities in new programs and new markets. PCB capacity utilization in Asia-Pacific was 46% in Q3 compared to 72% in the year-ago quarter and 46% in Q2. Our overall PCB capacity utilization in North America was 38% in Q3 compared to 45% in the year ago quarter and 38% in Q2. The lower year-over-year rate in Asia-Pacific was caused by a decline in production volumes.

While the lower year-over-year rate in North America was due to additional plating capacity added as well as a greater mix of higher technology product that requires less finished plating. Our top five customers contributed 43% of total sales in the third quarter of 2023 compared to 40% in the second quarter of 2023. We had two customers over 10% of our total sales in the quarter. At the end of Q3, our 90-day backlog, which is subject to cancellations, was $606.8 million compared to $672.9 million at the end of the third quarter last year. Our book-to-bill ratio was 0.91 for the three months ended October 2nd. As we look into Q4, we are seeing our commercial markets somewhat mixed with year-on-year growth in data center computing, driven by momentum related to artificial intelligence advancements and sequential growth in the automotive market, stabilization in medical, industrial, and instrumentation with continued weakness in networking.

On the A&D side of our business, we continue to make improvements in shipments as we work with supply chain partners to loosen bottlenecks and take advantage of an improving labor market. I am confident that with the effort of our employees and supply chain partners, we will be able to overcome these challenges as we work our way through the remainder of 2023 and into 2024. In the meantime, I wish to thank our employees for continuing to contribute to TTM and our critical mission of inspiring innovation for our customers. Now, Dan will review our financial performance for the third quarter. Dan?

Dan Boehle: Thanks Tom and good morning everyone. I will review our financial results for the third quarter that were included in the press release distributed today as well as on Slide 6 of the earnings presentation that is posted on our website. For the third quarter, net sales were $572.6 million compared to $671.1 million in the third quarter of 2022. The year-over-year decrease in revenue was due to declines in our automotive, medical, industrial and experimentation and networking end markets, partially offset by growth in our data center computing end market. GAAP operating loss for the third quarter of 2023 was $10.2 million. This compares to operating income of $49.8 million in the third quarter of 2022. The current year results include a goodwill impairment charge of $44.1 million related to the RF&S components reportable segment, which was the commercial portion of the Anaren business we acquired in 2018.

Due to weak demand from telecom equipment companies in the wireless infrastructure market, projected revenues and profits have been reduced, resulted in the impairment. On a GAAP basis, net loss in the third quarter of 2023 was $37.1 million or $0.36 per diluted share. This compares to GAAP net income of $43.5 million or $0.42 per diluted share in the third quarter of last year. The remainder of my comments will focus on our non-GAAP financial performance. Our non-GAAP performance excludes M&A-related costs, restructuring costs, certain non-cash expense items such as amortization of intangibles, impairment of goodwill and stock compensation, gains on the sale of property and other unusual or under grid items. We present non-GAAP financial information to enable investors to see the company through the eyes of management and to facilitate comparison with expectations and prior periods.

Gross margin in the third quarter was 20.8% and compares to 19.7% in the third quarter of 2022. The year-on-year increase was due to a more favorable product mix and improved execution in the North America region, partially offset by lower revenues and less premium in our commercial markets. Selling and marketing expense was $17.9 million in the third quarter or 3.1% of net sales versus $19.1 million or 2.8% of net sales a year ago. Third quarter G&A expense was $37.7 million or 6.6% of net sales compared to $38 million or 5.7% of net sales in the same quarter a year ago. In Q3 2023, research and development was $5.9 million or 1% of revenues compared to $7 million, also a 1% in the year ago quarter. Our operating margin in Q3 was 10.1%. This compares to 10.2% in the same quarter last year.

Interest expense was $9.6 million in the third quarter compared to $10.4 million in the same quarter last year. During the quarter, there was a positive $0.9 million foreign exchange impact below the operating income line. Government incentives and interest income of $2.2 million resulted in a net $3.1 million gain or a $0.03 positive impact to EPS. This compares to a gain of $10.3 million or an $0.08 impact on EPS in Q3 last year. Our effective tax rate was 12.6% in the third quarter, resulted in a tax expense of $6.5 million. This compares to a rate of 15% or tax expense of $10.2 million in the prior year. Third quarter net income was $44.9 million or $0.43 per diluted share. This compares to third quarter income of $57.9 million or $0.56 per diluted share.

Adjusted EBITDA for the third quarter was $84.1 million or 14.7% of revenue compared with third quarter 2022 adjusted EBITDA of $102.5 million or 15.3% of revenue. Depreciation for the quarter was $23.9 million. Net capital spending for the quarter was $33.7 million. In Q2, our capital spending was higher than normal due to a $20 million deposit related to fit-out costs associated with the new building in Penang, which we expected to be refunded in Q3 as part of the overall lease structure for the facility. However, the lease structure has changed, and that money will not be refunded. We expect to complete the fit-out in Q4 for an additional $50 million in capital spending. Cash flow from operations in the third quarter of 2023 was $58.9 million.

We repurchased approximately 1 million shares of common stock to $14.6 million at an average price of $14.33 per share. Cash and cash equivalents at the end of the third quarter of 2023 totaled $408.3 million. Our net debt divided by last 12 months EBITDA was 1.5 times at the low end of our targeted range of 1.5 to 2 times. Now, I will turn to our guidance for the fourth quarter. We project total revenue for the fourth quarter of 2023 to be in the range of $550 million to $590 million and non-GAAP earnings to be in the range of $0.34 to $0.40 per diluted share. The expected sequential decline in EPS is primarily due to lower gross margins from less favorable product mix and costs associated with the ramp of our Penang facility scheduled for completion at the end of the year.

The EPS forecast is based on a diluted share count of approximately 105 million shares, which includes the dilutive effect of outstanding stock options and other stock awards. We expect SG&A expense to be about 9.8% of revenue in the fourth quarter and R&D to be about 0.9% of revenue. We expect interest expense of approximately $11.4 million and interest income of approximately $2 million. Finally, we estimate our effective tax rate to be between 12% and 17%. To assist you in developing your financial models, we also offer the following additional information. During the fourth quarter, we expect to record amortization of intangibles of about $13.8 million, stock-based compensation expense of about $6.4 million, non-cash interest expense of approximately $0.5 million, and we estimate depreciation expense will be approximately $24 million.

Finally, I'd like to announce that we will be participating in the Bank of America Leveraged Finance Conference in Boca Raton on November 28th, the Jefferies Industrials Conference on November 29th in Palm Beach and the Barclays Technology Conference on December 5th in San Francisco. That concludes our prepared remarks. Now, we'd like to open the line for questions. Operator?

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