Slide 1: Earnings Conference Call 7/28/11
Earnings Conference Call 7/28/11
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: Q2 2011 Results
Q2 2011 Results David D. Glass, CFO
Slide 5: Q2 2011 Revenue and Profit In-Line with Guidance
Q2 2011 Revenue and Profit In-Line with Guidance *GAAP EPS below guidance due to asset impairment in Solar Business; see reconciliation to GAAP at end of presentation $ Millions Revenue increased 4% from Q1 ‘11 and 20% from Q2 ’10 GAAP results impacted by asset impairment in Solar business GAAP EPS
Slide 6: Q2 2011 Revenue & EBITA Performance by Segment
Q2 2011 Revenue & EBITA Performance by Segment Data Storage $46M Up 14% sequentially and 28% from Q2’10 Highest revenue level in 5 years Total Revenue: $265M LED & Solar $219M Up 2% sequentially and 18% from Q2‘10 MOCVD at $206M ($M) Q2 ‘11 Q2 ‘10 Adj EBITA $71.0 $57.4 ($M) Q2 ‘11 Q2 ‘10 Adj EBITA $
Slide 7: Q2 2011 Bookings Performance by Segment
Q2 2011 Bookings Performance by Segment Data Storage $38M Up 15% sequentially but down 25% year-over-year Total Bookings: New Record: $311M LED & Solar Record $273M Up 38% sequentially and 5% year-over-year MOCVD ~$250M, up 34% sequentially MBE ~$24M, up 92% sequentially Book to Bill = 1.17 to 1; Ba
Slide 8: Record Q2 Bookings Driven by MOCVD & MBE Strength
Record Q2 Bookings Driven by MOCVD & MBE Strength LED & Solar: MOCVD: China remains strong - 12 of 16 customers Korea signs of improvement, including a multi-system MaxBright™ MOCVD order GPI of Taiwan purchases multiple MaxBright systems MBE: wireless and photonics industry expansion helps us build
Slide 9: Veeco Eliminates Debt, Buys-Back Stock and Invests in Technology
Veeco Eliminates Debt, Buys-Back Stock and Invests in Technology 06/30/2011 03/31/2011 Cash & Short-term Investments* $632.7 $779.0 Accounts Receivable 128.0 94.0 Inventory 113.3 121.3 Fixed Assets, Net 62.4 49.0 Total Assets 1,120.4 1,163.0 Long-term Debt (including current portion) 2.8 97.6 Equity
Slide 10: Business Update and Outlook
Business Update and Outlook John R. Peeler, CEO
Slide 11: CIGS Solar System Business Update
CIGS Solar System Business Update Have decided to exit the CIGS solar systems business Cost of mainstream solar technologies has fallen rapidly Lower than anticipated end-market acceptance for CIGS technology The timeline and cost for commercialization are too long Winding down the systems business
Slide 12: Q3 2011 Order Outlook
Q3 2011 Order Outlook LED: Quoting activity in MOCVD remains robust... experiencing extremely positive customer reaction to MaxBright MOCVD order patterns will continue to fluctuate from quarter-to-quarter Short-term orders likely to be impacted by weak LED backlighting market demand and global macr
Slide 13: Q3 2011 Revenue and Earnings Guidance
Q3 2011 Revenue and Earnings Guidance Revenue $235-285M Gross Margins 47-48% Operating Spending $55-57M (20-23%) Adjusted EBITA 25-29% GAAP EPS $0.92-$1.32 Non-GAAP EPS $1.00-$1.40 Note: Guidance is for Veeco’s Continuing Operations See reconciliation to GAAP at end of presentation
Slide 14: MaxBright MOCVD System – Spectacular Market Acceptance Since Q1 Launch
MaxBright MOCVD System – Spectacular Market Acceptance Since Q1 Launch >$100 million in MaxBright systems booked in Q2 Delivered six MaxBrights to key customers in Q2, as planned Installed MaxBright in Taiwan Tech Center opening in August Orders received from top accounts across the globe Most produ
Slide 15: China Update: Short-Term Challenges Do Not Dampen Long-Term Opportunity
July 2011 Ministry of Science & Technology Announcement Increases China’s 2015 LED Goal to 30% of Lighting China Update: Short-Term Challenges Do Not Dampen Long-Term Opportunity Many MOCVD deals still on the table Longer “order-to-revenue” cycle times persist Facility readiness issues Credit market
Slide 16: South Korea to Accelerate LED Lighting Adoption: 20-60 Plan
South Korea to Accelerate LED Lighting Adoption: “20-60 Plan” 2006: LED Lighting 15/30 Dissemination Project 2.5% (public buildings 5.0%) 30% (public buildings 60%) 60% (public buildings 100%) 2008: LED Industry Development Strategy June 2011: Stimulating Green LED Lighting Popularization Plan Sourc
Slide 17: Japan: LED Lighting Adoption Accelerating
LED bulb sales have surpassed incandescent bulbs in Japan Korean and Taiwanese LED suppliers are expected to benefit from increased Japan demand Japan: LED Lighting Adoption Accelerating LED light bulb sales reached ~44% in June March earthquake accelerated sales due to restrictions on electricity c
Slide 18: Closer to the Tipping Point For SSL Adoption
Closer to the Tipping Point For SSL Adoption... HB LED ASPs are Falling Faster than Expected Source: LEDinside, Deutsche Bank 7/5/2011, Jefferies 7/7/2011, Lazard 7/8/2011, HSBC 7/12/2011 High Power LED Price per Watt High power LED ASPs have dropped ~50% YoY Much faster than Haitz Law historical tr
Slide 19: LED Lighting Already Driving Our Growth
LED Lighting Already Driving Our Growth 2010 Veeco MOCVD Shipments >330 Lighting Backlighting Backlighting & Lighting Others Backlighting Others Lighting Backlighting & Lighting 2011 1H Veeco MOCVD Shipments >190 MOCVD shipments for lighting grew to over 50% in 1H 2011 48% 14% 28% 10% 28% 43% 23% 6%
Slide 20: Growth Outlook
Growth Outlook While short-term is uncertain... there is a fantastic growth opportunity ahead of us as LED market adoption increases in 2012 & 2013 Ban the bulb legislation in US and Europe Japan’s move to stimulate LED adoption Significant investment by Korean and Taiwanese leaders who are already
Slide 21: Q&A Session
Q&A Session
Slide 22: Q2 & 1H 2011 Income Statement
Q2 & 1H 2011 Income Statement Condensed Consolidated Statements of Income (In thousands, except per share data) (Unaudited) Three months ended Six months ended June 30, June 30, 2011 2010 2011 2010 Net sales $ 264,815 $ 221,389 $ 519,491 $ 356,139 Cost of sales 164,747 122,589 290,091 200,599 Gross
Slide 23: Q2 2011 Balance Sheet
Q2 2011 Balance Sheet Condensed Consolidated Balance Sheets (In thousands) June 30, December 31, 2011 2010 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 197,668 $ 245,132 Short-term investments 380,506 394,180 Restricted cash 54,484 76,115 Accounts receivable, net 128,000 150,528 In
Slide 24: Q2 and 1H 2011 GAAP Reconciliation
Q2 and 1H 2011 GAAP Reconciliation Reconciliation of GAAP to non-GAAP results (In thousands, except per share data) (Unaudited) Three months ended Six months ended June 30, June 30, 2011 2010 2011 2010 Adjusted EBITA Operating income $ 23,669 $ 59,880 $ 103,338 $ 85,054 Adjustments: Amortization 1,4
Slide 25: Q3 2011 Guidance Reconciliation
Q3 2011 Guidance Reconciliation Reconciliation of GAAP to non-GAAP results (In thousands, except per share data) (Unaudited) Guidance for the three months ending September 30, 2011 LOW HIGH Adjusted EBITA Operating income $ 54,200 $ 77,725 Adjustments: Amortization 1,278 1,278 Equity-based compensat
Slide 26: Q2 and 1H 2011 Segment Data
Q2 and 1H 2011 Segment Data Segment Bookings, Revenues, and Reconciliation of Operating Income (Loss) to Adjusted EBITA (Loss) (In thousands) (Unaudited) Three months ended Six months ended June 30, June 30, 2011 2010 2011 2010 LED & Solar Bookings $ 273,282 $ 260,439 $ 471,547 $ 472,102 Revenues $
Slide 27: Earnings Conference Call 7/28/11
Earnings Conference Call 7/28/11