Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Aehr Test Systems Second Quarter Fiscal 2012 Earnings Conference Call. [Operator Instructions] This conference call is being recorded today, Thursday, January 5 of 2012. And I'd now like to turn the conference over to Ms. Marilynn Meek. Please go ahead, ma'am.

Thank you. Good afternoon, and thanks for joining us to discuss Aehr Test Systems' second 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 Systems are Rhea Posedel, Executive Chairman; Gayn Erickson, 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, Gary.

Thank you, Marilynn, 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 calendar year 2012. We refer you to our most recent 10-K, 10-Q 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 Executive Chairman, Rhea Posedel. Rhea?

Thank you, Gary. Good afternoon, and welcome to our conference call for the second quarter of fiscal year 2012. Let me begin by saying I'm pleased to announce that on Tuesday, Gayn Erickson was appointed CEO of Aehr Test. I'm in excellent health and was planning to work until I was 70, but with the acquisition of Verigy by Advantest last year, Gayn became available. We are fortunate to have hired a senior executive with 23 years of semiconductor, test and general management experience. With Gayn's strong marketing and engineering background from a top-tier test company, we are confident that he will do an outstanding job and has the management skill set needed to take Aehr Test to the next level. I will remain with the company as Executive Chairman and will work with Gayn on strategic plans to grow the company. Since Gayn just started this week, I will be giving today's conference call. Gayn will, however, say a few words at the conclusion of my talk. On a positive note, net sales for the quarter were $3.9 million, 8% higher compared to the second quarter of fiscal 2011. We had several highlights that I'd like to bring to your attention. First, we are very pleased to report that our valuation ABTS-L56i burn-in system passed its qualification at a leading IDM. Most importantly, we expect to receive an order to record revenue for this evaluation system this quarter. This would be a major win for us because it's a production account, and we believe this customer could order significant number of ABTS-L56i systems over the long term. Their target application is for burn-in of high-power logic devices requiring individual temperature control per device. Second. Last month, we report -- announced selling a high-power ABTS burn-in system with individual device…

Thank you, Rhea. I'm very pleased to be joining Aehr at this time and excited by the many opportunities we have to grow our company. I actually respected Aehr Test's leadership in the semiconductor test and burn-in space for many years, and I'm impressed by their technology, the products and the people that I've seen here at Aehr so far. As you mentioned earlier, the successful evaluations and qualifications of the new ABTS system is really a great endorsement of the company's new product family. It's impressive that Aehr has emerged from this recent industry downturn with new, highly competitive products and also customers that are top-tier semiconductor manufacturers in Korea, Japan, China, Europe, in addition to this traditional strength we've had here in the U.S. There are new opportunities in test that are developing out of the shift in the semiconductor industry from an IT/computing-dominated application space to consumer, mobile and automotive applications. I feel that Aehr is in a great position to capitalize on those opportunities. I look forward to working with Rhea and the Aehr Test team to profitably expanding our company while continuing to satisfy our customer needs. And an offer if there are any shareholders or potential investors who would like to set up some time to talk with me personally where I can answer any questions, I'd be happy to set some time aside and to meet with you in the near future. Again, thanks, Rhea.

Thanks, Gayn. Gary?

Thank you, Rhea. As Rhea mentioned, net sales rose 8% to $3.9 million in the second quarter of fiscal 2012 compared to $3.6 million in the second fiscal quarter of last year. Gross profit was $1.1 million for the second quarter of fiscal 2012 or 29.2% of net sales. This compares to gross profit of $1.4 million for the second quarter of fiscal 2011 or 37.9% of net sales. Now the lower gross profit margin was primarily related to a change in mix of product. As Rhea mentioned, we shipped 3 early production systems to the Japanese microcontroller producer. While manufacturing those systems, we incurred onetime start-up and higher initial material costs. We expect to improve the margins on follow-on shipments for those systems. Taking a look at operating expenses, SG&A was $1.5 million in the second quarter, about the same as the SG&A expense in the prior year period. Second quarter R&D expense was $1 million, down about $0.2 million from the second quarter of last year. R&D spending can fluctuate from quarter to quarter depending on the development phase of new products. In the first 6 months of fiscal 2012 -- in the first 6 months of fiscal 2011, operating expenses were reduced by $155,000 related to partial proceeds from the Spansion Japan bankruptcy claim. In the first 6 months of fiscal 2012, we reported a gain of $990,000 from the sale of our interest in ESA Electronics to a Singapore private company. In the second quarter, we reported a net loss of $1.4 million, or $0.15 per share, compared to a net loss of $767,000, or $0.09 per share, in fiscal second quarter 2011. Included in the results for the second quarter of fiscal 2011 was the receipt of a dividend payment of $600,000 related to a long-term investment reported in other income. Turning to the balance sheet, our cash and cash equivalents were $3.1 million at November 30, 2011 compared with $4.0 million at May 31, 2011. Although we have access to a $1.5 million line of credit, we've not yet borrowed against that line. We expect that our operating results in the third quarter of fiscal 2012 will improve when compared with the preceding quarter. This concludes our prepared remarks. We're now ready to answer your question. Operator, please go ahead.

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

A couple of quick questions. Actually, first, a comment. Rhea, you could have knocked me over with a feather after that press release. A couple of questions. The -- this is the first press release I can remember or first conference call that didn't have a sales projection, revenue projection for the next quarter compared to the year previously. All Gary said was that operating results would improve.

What we expect is to see sales in a -- fairly similar to this most recent quarter, but the important part to us was that we do expect the operating results to improve.

So that would be sales down from last year's third quarter?

We're just saying sales we expect to be similar to the preceding quarter.

Which would be lower than the third quarter of last year?

That's correct.

Okay. The press release referring to the latest ABTS system, was that a domestic shipment, Rhea?

It's not a shipment yet. It's an order. But...

Is it going to a domestic customer?

It's an international customer. We'll leave it at that, Geoff.

An international customer?

Yes. All right. Thanks, Jeff. Please stop by, and I'd like to have you meet Gayn, if you're out here.

I will certainly take advantage of it. I'd love to.

Thanks, Geoff. Thanks for all your support, Geoff, over these years.

[Operator Instructions] And I show no further questions at this time. Please continue.

Well, this is Rhea. I'd like to thank you all for joining us this afternoon. Happy new year to everyone, and we look forward to next quarter's conference call. Thank you very much. Bye.

Ladies and gentlemen, if you would like to listen to a replay of today's conference, you may dial 1 (800) 406-7325 and enter the access code of 4499152. Thank you very much for your participation. You may now disconnect.