Slide 1: Earnings Conference Call 2/7/11
Earnings Conference Call 2/7/11
Slide 2: Introduction
Introduction Debra A. Wasser, SVP, Investor Relations
Slide 3: Safe Harbor Statement
Safe Harbor Statement To the extent that this presentation discusses expectations or otherwise makes statements about the future, such statements are forward-looking and are subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made.
Slide 4: Q4 and Full-Year 2010 Results
Q4 and Full-Year 2010 Results David D. Glass, CFO
Slide 5: Q4 2010 Record Performance Across the Board
Q4 2010 Record Performance Across the Board See reconciliation to GAAP at end of presentation $ Millions Revenue increased 8% from Q3 2010 and was up 152% from prior year GAAP EPS was $2.30 and non-GAAP EPS was $1.62 Record levels and in line with guidance Gross margin was 51%, at high end of guidan
Slide 6: Q4 2010 Revenue Performance by Segment
Q4 2010 Revenue Performance by Segment Data Storage $42M Up 21% sequentially and 99% year-over-year Best quarter since Q4 2008 Total: $300M LED & Solar $258M Up 6% sequentially and over 163% year-over-year MOCVD record $240M
Slide 7: Q4 2010 Bookings Performance by Segment
Q4 2010 Bookings Performance by Segment Data Storage $42M Up 20% sequentially but down 21% year over year Total: $295M LED & Solar $253M Up 4% sequentially and 43% year over year MOCVD had another solid quarter at $221M and MBE improves following low level in Q3 2010 B to B = .98 to 1; Backlog $555M
Slide 8: Q4 2010 Bookings Highlights
Q4 2010 Bookings Highlights Data Storage $42M 20+ customers placed MOCVD orders China strength continues – EnRay-Tech, Shanghai Epilight, Focus Lighting and many others Key customer wins in US, Europe, Japan, Taiwan and Korea MBE booked $32M – pickup from Q3 2010 with several production tool orders
Slide 9: Q4 2010 P&L Highlights
Q4 2010 P&L Highlights See reconciliation to GAAP at end of presentation ($ millions except GM) Q4’10 Q4’09 Q3’10 Revenues $300.0 $119.1 $277.1 Gross Profit 152.8 53.5 135.5 Gross Margin 50.9% 44.9% 48.9% Operating Income 100.9 18.0 91.6 GAAP Net Income 96.7 16.0 91.1 Non-GAAP Net Income 67.9 13.6 6
Slide 10: Q4 2010 Segment Performance
Q4 2010 Segment Performance Bookings Revenue Adjusted EBITA (Loss) Q4’10 Q3’10 Change Q4’10 Q3’10 Change Q4’10 Q3’10 LED & Solar $252.9 $243.2 4% $258.1 $242.6 6% $98.5 $91.8 Data Storage 42.0 35.0 20% 41.9 34.5 21% 12.7 9.4 Unallocated Corporate (6.5) (5.7) Total Veeco $294.9 $278.2 6% $300.0 $277.
Slide 11: 2010 Full Year Highlights
2010 Full Year Highlights See reconciliation to GAAP at end of presentation $ Millions Best year in Veeco’s history Revenue increased 230% from prior year Gross margins improved to 47.6% from 39.4% GAAP EPS was $6.13 compared to $(0.44) in 2009 and Non-GAAP EPS grew to $4.42 from $0.21
Slide 12: 2010 Revenue Performance by Segment
2010 Revenue Performance by Segment Data Storage increased 75% to $135M Veeco remains the top equipment supplier to TFMH manufacturers Highly profitable business with variable cost manufacturing Total: $933M LED & Solar increased 289% to $798M Veeco gains dramatic market share in MOCVD to 46% by Q3
Slide 13: Veeco Balance Sheet Performance
Veeco Balance Sheet Performance 12/31/2010 9/30/2010 Cash & Short-term Investments* $715.4 $466.8 Accounts Receivable 150.5 129.6 Inventory 108.5 80.5 Fixed Assets, Net 42.3 45.5 Total Assets 1,148.0 943.7 Long-term Debt (including current portion) 104.0 103.3 Equity 762.5 538.3 * Includes restricte
Slide 14: 2011 Growth Outlook
2011 Growth Outlook John R. Peeler, CEO
Slide 15: LED TV Opportunity: Penetration Continues
LED TV Opportunity: Penetration Continues LCD TV Shipments (M units) DisplaySearch Q410 and Veeco estimates 2008 2009 2010 2011 2012 2013 2014 2015 LED TV Penetration (%) 50% 100% 16% LED TV penetration is expected to reach 50% in 2011 and increase to ~80% in 2013 or sooner LED TV leaders targeting
Slide 16: LED Opportunity: Lighting Adoption Just Beginning
LED Opportunity: Lighting Adoption Just Beginning Number of LEDs (in B units) 68% 15% 22% 40% 23% Source: Veeco estimates LED lighting chip demand is projected to grow at a CAGR of 68% for the next 5 years Outdoor and Residential will lead all segments followed by Commercial and Industrial 0 10 20 3
Slide 17: Introducing MaxBright: Industry's Most Productive MOCVD Platform
Introducing MaxBright: Industry’s Most Productive MOCVD Platform MaxBright GaN MOCVD Compact cluster architecture High capacity configurations 4-Reactor: 216 x 2”, 56 x 4”, 24 x 6”, or 12 x 8” 2-Reactor: 108 x 2”, 28 x 4”, 12 x 6”, or 6 x 8” High throughput reactors based on K465i Expanded wafer cap
Slide 18: MaxBright Raises the Bar with Industry's Lowest Cost of Ownership
MaxBright Raises the Bar with Industry’s Lowest Cost of Ownership #1 selling MOCVD tool (IMS Research: 44% unit shipment share in Q3-10) K465i is yield and productivity leader MaxBright delivers 500% productivity gain over K465i Highest capacity, throughput, footprint efficiency and capital efficien
Slide 19: Veeco Accelerating LED Lighting with MOCVD Systems
Veeco Accelerating LED Lighting with MOCVD Systems that Dramatically Reduce Costs MOCVD market opportunity is huge We estimate >5,000 reactors required from 2011 through 2015; top Wall Street number is >7,000 Veeco’s accelerated product development: new talent, additional funding, parallel R&D progr
Slide 20: Q1 2011 Outlook
Q1 2011 Outlook Revenue Q1 2011 guidance range of $215-265M Q1 2011 guidance below Q4 2010 results because: Planning to ship 12-20 reactors in new MaxBright “cluster” format – no revenue expected for these systems in Q1 Longer order-to-revenue cycle times associated with the high percentage of busin
Slide 21: Q1 2011 Guidance
Q1 2011 Guidance Veeco will switch from utilizing a statutory rate of 35% to an effective tax rate of 33% for GAAP and Non-GAAP EPS calculations (NOLs and other tax-credit carry-forwards were fully utilized in 2010). Guidance also assumes 43M shares. Revenue $215-265M Gross Margins 51-52% Operating
Slide 22: Full Year 2011 Outlook
Full Year 2011 Outlook 2011 Forecast: >$1B in revenue >$5.00 in Non-GAAP EPS Beginning backlog of $555M Visibility to strong 1H 2011 orders • Expect 2011 to be a solid year for MOCVD tool demand (BLU and lighting) – Veeco opportunity to continue to gain share with most productive MOCVD systems – Nex
Slide 23: Q&A Session
Q&A Session
Slide 24: Condensed Consolidated Balance Sheets
Veeco Instruments Inc. and Subsidiaries Condensed Consolidated Balance Sheets (In thousands) December 31, December 31, 2010 2009 (Unaudited) ASSETS Current assets: Cash and cash equivalents $245,132 $148,500 Short-term investments 394,180 135,000 Restricted cash 76,115 - Accounts receivable, net 150
Slide 25: Reconciliation of operating income (loss) to non-GAAP net income
Veeco Instruments Inc. and Subsidiaries Reconciliation of operating income (loss) to non-GAAP net income from continuing operations (In thousands, except per share data) (Unaudited) Three months ended Year ended December 31, December 31, 2010 2009 2010 2009 Operating income (loss) $ 100,872 $ 18,033
Slide 26: Reconciliation notes
NOTE - The above reconciliation is intended to present Veeco's operating results, excluding certain items and providing income taxes at a 33% effective rate. By the end of 2010, the Company had fully utilized all prior NOL and tax credit carryfowards. As a result, beginning in 2011, the Company will
Slide 27: Adjusted EBITA reconciliation by segment
$ 14,650 $ 291,920 $ 21,934 $ 104,682 Adjusted EBITA 304 - - - Asset impairment 1,526 - - - Inventory write-off 4,837 (179) 67 - Restructuring 7,547 9,648 2,441 2,645 Equity-based compensation 5,168 4,876 1,393 1,165 Amortization $ (4,732) $ 277,575 $ 18,033 $ 100,872 Operating income (loss) $ 282,4
Slide 28: Earnings Conference Call 2/7/11
Earnings Conference Call 2/7/11