Good day, ladies and gentlemen, and welcome to the MKS Instruments Reports Q4 2013 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Seth Bagshaw. Sir, you may begin.

Thank you. Good morning, everyone. I'm Seth Bagshaw, Vice President and Chief Financial Officer, and I'm joined this morning by Jerry Colella, our Chief Executive Officer and President. Thank you for joining our Earnings Conference Call. Yesterday, after market close, we released our financial results for the fourth quarter and full year 2013. You can access this release at our website, www.mksinstruments.com. As a reminder, various remarks that we may make about future expectations, plans and prospects for MKS comprise forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in yesterday's press release and in the company's most recent annual report on Form 10-K and most recent quarterly report on Form 10-Q, which are on file with the SEC. In addition, these forward-looking statements represent the company's expectations only as of today. While the company may elect to update these forward-looking statements, it specifically disclaims any obligation to do so. Any forward-looking statements should not be relied upon as representing the company's estimates or views as of any date subsequent to today. Now I'll turn the call over to Jerry.

Thanks, Seth, and good morning, everyone. And thank you for joining us on the call today. In a few minutes, I'll provide a recap of the fourth quarter and full 2013, as well as our outlook for the first quarter. Seth will follow me with further details on our financial results, then we'll open the call to your questions. First, I'd like to take a minute to formally introduce myself to the investment community. In my 31 years at MKS, I have progressed through increasingly more senior positions in all facets of the company. Over the last 10 years, I have worked worldwide responsibility for global sales, operations, application support and product development, and as a result, have gained an understanding of the increasingly complex needs of our customers and our industry. I have been leading the operational strategy at MKS for sometime now, and I've never been more confident in our company's ability to deliver results, whether they are technological, operational, financial or strategic. I am excited to be working with the strong team that we've built here at MKS. We have had a long history of success, and I want to assure you that we will continue our disciplined financial and operational execution, as well as our commitment to investing in growth in both new and existing markets. We will build on our past success, but with a refined vision for the future. MKS is a respected leader in vacuum processing, and my goal is to further strengthen our front-runner position by focusing our efforts in several areas. First, we want to extend and amplify our initiatives in the area of customer satisfaction. Long-term customer relationships are the foundation of our business, and this has been a priority for MKS. Our primary focus has been, and will continue…

Thank you, Jerry. I'll discuss the fourth quarter and full year financial results before providing further details on our Q1 2014 guidance. Revenue for the quarter was $204 million, an increase of 23% compared to Q3 revenue of $166 million and a 53% increase from $134 million a year ago. Revenue for the quarter was above the high end of our guidance range due to shipments for the first phase of a new memory fab in Asia, the continued strength in our OEM business and growth in our other advanced markets. Gross margin was 42.9%, which was within our expectations at this sales volume. Non-GAAP operating expenses were $53.5 million, above our guidance, due primarily to higher variable compensation and unfavorable foreign exchange. As a reminder, non-GAAP operating expenses in the third quarter of 2013 were below normalized levels due to seasonally higher vacations, including shutdowns, foreign exchange gains and the timing of certain other project spending. In the first quarter of 2014, we expect our operating expenses to be at more normalized levels, which is in the range of $51 million to $52 million. Our non-GAAP operating margin was 16.7% of sales, non-GAAP net earnings were $22.3 million or $0.42 per share compared to $13.3 million in the third quarter and $5.1 million in the fourth quarter of 2012. GAAP net income was $20.2 million or $0.38 per share, and the tax rate for the quarter was 35%. Now turning to the balance sheet. Cash and investments increased by $24 million in the quarter to $650 million, or approximately $12 per share. Approximately 60% of our cash and investments are in the U.S., and the balance is in our international operations. Total book value, net of goodwill intangibles, increased to $857 million or approximately $16 per share. In terms…

[Operator Instructions] First question is from Patrick Ho of Stifel, Nicolaus. Patrick J. Ho - Stifel, Nicolaus & Co., Inc., Research Division: First off, congratulations on the nice quarter and to the year. And Jerry, to you, best of luck going forward in your new role as CEO. First question, and you gave a lot of good details in the prepared remarks regarding the opportunities on the etch and deposition side of things, and especially with the capital intensity increasing for both of them. You mentioned both, I guess, the opportunities and the increasing capital intensity, as well as share gains. One, can you comment about maybe, again, some of the increasing content you'll see in both etch and deposition. And secondly, you also mentioned share win. What are some of the areas where you believe you can gain share in those growing processes?

Well, I think the thing that it's the biggest opportunity for us is the slow growth in lithography in the move towards a 3D NAND, FinFET and multi-patterning. If you look across the products that we offer for the pressure measurement, or RF, or PC power, or remote chamber cleaning, there's so many additional steps that will be required by all the OEMs for this production of 3D NAND and FinFET, that in general, that just increases our content and opportunity across the whole gambit, Patrick. So it's really a technology inflection point that for us is exceedingly important because of the process control that's required when you go from 28 to 20 and the type of process improvements we're seeing. So it's really across all the business units and across basically, all the OEMs that we're doing business with, no one's -- particular one, stands out. It's really about the technology change. Patrick J. Ho - Stifel, Nicolaus & Co., Inc., Research Division: Great. And second question, maybe for Seth. On the margins front, you performed really well this quarter as revenues ramp. What are the key variables over the next few quarters? Is it absorption, product mix, customer mix? I know they're all probably contributors at some level, but what's the biggest one that we should be looking out for over the next several quarters?

I would say, Patrick, at these volumes, the factories are running pretty efficiently. So in the fourth quarter, we ramped the production pretty substantially, which gave us some good wind to our back on the absorption side. So clearly, volume is probably the most important, that's why we guided Q1 the way we did. And then as always, product mix, but it tends to level itself out quarter-over-quarter. So I'd say, volumes are probably the most important and then foreign exchange, international operations have impact as well. We like a weak dollar over time. That's probably the other factor that would affect the margins.

And the next question is from Jim Covello of Goldman Sachs.

Lam, on its call last night, obviously an important customers for you, there's obviously a tremendous amount of customer consolidation in the semi-equipment -- semi space. They've talked about it even in a more extreme level of customer concentration, going from 60% of their business coming from the top 3, to 80% in the first quarter. Is that creating any incremental challenges for you as you look into 2014, specifically? What is the forecasting, with the lumpiness of the three guys being 80%, or margin pressure or any of those things?

Well, thank you, Jim. As far as margin pressure is concerned, we've -- everybody sees pricing pressure year-over-year, and it's nothing that's not to be expected. We don't think to see anything more extraordinary than -- in terms of dealing with our customers on contracts and pricing discussions. Certainly, we have actions that we take on our end, on our cost side to work with low-cost country, other things we need to do to maintain good margins. And we're fortunate that we have significant technology that is critical for the customers. And there's a lot fewer subsystem providers, it's a consolidated market in our end, so it enables us to have more opportunity. So I think the more the consolidation, actually, the easier it is for us to do business to figure out the trends where the volume's going, we have a very deep and solid relationship with all of our customers. So I think the fewer people, in terms of predicting the business, is actually probably a little easier for us in general, although our lead times are short, and we're on a lot of pull systems, so our visibility doesn't go beyond much before a few weeks in our quarter, and it is lumpy. But I think between the lean systems we have in place, the pull systems, the materials between ourselves and our customers, the solid global supply chain we have and our ability to ramp and react, I'm not really worried about fuzziness for the forecast or the inability to respond to customer demand. I don't see that as a problem.

And the next question is from Josh Baribeau of Canaccord.

So you had talked, obviously, about the strength in memory. Would you be able to provide us with maybe more of an approximate breakdown between memory and logic in the quarter, and then maybe what you expect going forward?

Well, the good news for MKS is that it doesn't matter whether it's memory or logic or which OEM or end user has strength in a quarter. Our business is spread across multiple technologies and throughout multiple customers. So we really can't tell you where the product ends up. We know the customers we ship it to. And where it ends up, ultimately, at the end of the day, really isn't something that we have a lot of visibility to. But we're fortunate in the fact that we have a very deep and wide portfolio. It applies to all the multiple players in the industry, and it plays to all the technology. I think the more you see an uptick in 3D NAND and FinFET and multi-patterning and more etch and deposition, you probably can surmise that that's very good for MKS, in general. But in general, it's kind of very difficult to tell because of such a widespread product offering, which is great for us.

Sure. And then, maybe, to look at things a little bit differently, can you help us out, maybe, with the mix between etch versus deposition versus implants, something like that?

Pretty much the same -- same issue, it's pretty well spread out. And we really don't see much of a difference in terms of that dissemination of the business.

[Operator Instructions] The next question is from Tom Diffely from D.A. Davidson. Thomas Diffely - D.A. Davidson & Co., Research Division: So first, Jerry, I was hoping you could help us maybe compare and contrast business trends that you just had in the fourth quarter to maybe the fourth quarter of 1984?

Well, let's see, I was 10 years old back then and...

I wasn't born yet.

[indiscernible] Going back, just a couple of years, last time, you were above $200 million in revenues. How is business different today than it was, say, just a couple of years ago when margins were perhaps a little bit higher?

Well, I think there's probably a little more content in solar or LED in terms of comparable levels of business over '10 and '11. So that's really kind of the big difference between now and then. In general, the other parts of our business are relatively the same and strong. So that's the only difference I can really tell you there between when we were at $200 million or above and today.

And I think also, Tom, the rates, the FX rates back then were a little more favorable as well. That's probably the other thing I'd just point to.

Okay. So when you look at some of these adjacent markets, solar, LED, thin film, which one seemed to have -- I mean, we've heard some interesting things percolating in all of them. But I'm curious, from your point of view, which one do you think may be the first to recover?

Well, I'd probably say, if I start with the least, probably most likely, the solar would be one we think might take the longest to recover, with the subsidies that don't exist any longer, the oversaturation in some of the equipment. I think between thin film and LED, it's probably a reasonable expectation. Both we probably could see some level of improvement. So we don't think it's going to be a rapid improvement, not from the things we've seen from external resources. Maybe there'll be some life to flat panel and thin film, maybe a little earlier on, and maybe LED, but not really sure. I mean, we're just hearing probably the same things you're hearing, and we're positioning ourselves at the customers to be ready when they come back.

Okay. And then, also, you talked about how etch and deposition are nice growing markets. So do you actually have higher exposures, something like a 3D NAND that has more layers of etch and deposition versus, say, the FinFET design? Or is it too small to measure?

It's kind of well positioned across all of them, although the 3D certainly has significant position in, and they have a lot of power opportunity for pulsing and RF. But it goes across all of the products that we offer. So we're equally positioned in just about all of them.

Okay. And then on the other side, when you look at the cash, 60% sounds like it's onshore. For 2014, the cash generation, what's the mix of onshore/offshore on a go forward basis?

Hold on one second, Tom. I mean, it would depend, obviously, where we are in sort of the cycle and what piece would -- I would say, Tom, maybe 50-50. It's a little hard to say because you have to model what's going to happen in 2014, and we don't give beyond the first quarter. So I can give you sort of a rough idea. It is sort of 50-50 is how it rolls out. But there's a lot of things that'll move that. Working capital has probably the biggest impact on it. Thomas Diffely - D.A. Davidson & Co., Research Division: Yes. But still plenty of room to support a dividend for many years to come.

Yes, absolutely. And the 50-50 mentioned is without the dividend. But we have plenty of cash to support the dividend. And again, as I said in the past, it's really a -- the dividend is more of a review on the operating model of the business, not that we have cash in the balance sheet. That's how I've always looked at it. And I know we do internally here as well, the rest of the team. As Jerry mentioned, we have acquired a number of companies in our career, and we think having cash to deploy for long-term M&A is also advantageous as well. Thomas Diffely - D.A. Davidson & Co., Research Division: Okay. And then finally, the tax rate of 33%, at this point, it looks like a good long-term tax rate as well?

Yes. I think without that, there's no R&D credit in there. So again, at these volumes, that's probably pretty realistic.

There are no further questions at this time. I'll turn the call back over for closing remarks.

Well, thank you, everyone. I started this call by sharing our visions for MKS. The examples we've covered today demonstrate a very solid foundation to successfully implement the strategies to accomplish this. We will continue to exceed our customers' needs, to invest in innovative technology-based solutions and to manage this business for sustainable and profitable growth. I look forward to updating you on our continued progress in April, and thank you for joining us on the call today.

Ladies and gentlemen, this concludes today's conference. You may now disconnect. Good day.