Forward-looking statements address matters that are subject to a number of risks and uncertainties that can cause actual results to differ materially. Such risks and uncertainties include, but are not limited to those described in today's news releases, and the company's Forms 10-K, 10-Q and other filings with the SEC. The company assumes no obligation to update the information provided in this conference call.On another note, the management of Mattson Technology will be participating in the AeA Classic Conference sponsored by TechAmerica on November 9 in San Diego I'm looking forward to seeing many of you there, with that I would like to turn the call over Andy. Andy? Andy Moring Thank you, Laura, and welcome to our third quarter 2010 conference call. After I review the financial performance and give guidance, Dave will comment on the business and then we'll open up the call for Q&A. The industry continues to move through the capacity driven phase of the upturn. The third quarter marks Mattson Technology sixth consecutive quarter a double digit sequential growth in our business with a 24% increase in revenue quarter-over-quarter. Revenues were at the top of our guidance fueled by successes with our new product strategy and broad-based buying of our core strip and RTP products from a number of customers. Our RTP equipment has been placed at key foundry customers and our Etch equipment continues to be purchased for current production capacity needs. These are new markets for us. These successes bolster our confidence that we will outgrow much of the industry as the cycle progresses. We increased our cash position during the quarter and we are driving to achieve the P&L breakeven milestone by the end of the year. Here are the key points relative to our financial performance for the third quarter. We ship multiple etch production tools as part of the order we announced at the beginning of the quarter. We now have roughly a dozen etch tools in production and several more in evaluation. Our target has been for the etch market to comprise over 30% of our systems sales during 2010 and we are on track to achieve this goal. Margins were slightly were above our expectations this quarter but the company is very focused on achieving higher targeted gross margins by next year. Our loss per share was within guidance although unfavorably impacted by currency fluctuations due to the strengthening of the Euro and its impact on our RTP division in Germany. Our ending cash, cash equivalent, short term investments and restricted cash balances were over $45 million about $3 million higher than last quarter.
Now to a more detailed look at our financial results for the quarter. Net sales were at the top of guidance at $39.8 million, up 24% from the second quarter of 2010. We shipped new and used equipment to 12 different customers which supports our belief that this ramp is broad-based and capacity driven. While our current business is still dominated by memory customers, our recent announcements of success with foundry customers for our core products including RTP is proof that we are a successfully diversifying our portfolio as planned.Gross margin for the third quarter was 36.5% almost 6 margin points higher than second quarter results. While we are encouraged by this improvement, the results are still below our targeted gross margin expectations. As we stated last quarter, margins are negatively impacted by several factors: first, accounting roles require us to defer until acceptance approximately 10% of all shipment revenue, which represent the installation value of the tools. In periods of revenue growth, revenue deferred out will exceed revenue recognized in through customer acceptance. Second, several strip customers are ramping their current generation production facilities and are in need of our legacy Aspen III systems which carry lower gross margins. Third, we have experienced a higher set of costs for materials for our new products. The impact on margins in the third quarter for these factors was about 6 percentage points. While the first issue will always occur during periods of increasing shipments. The impact of the other two issues are being actively addressed by the company and we expect to see a return to targeted margins next year. Read the rest of this transcript for free on seekingalpha.com