Slide 1: Q3 2016 Conference Call
Q3 2016 Conference Call Veeco Instruments Inc. November 1, 2016 1 | Investor Presentation
Slide 2: Safe Harbor
Safe Harbor 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. These item
Slide 3: CEO Introduction
CEO Introduction John Peeler 3 | Investor Presentation
Slide 4: Q3 2016 Performance Summary
Q3 2016 Performance Summary Revenue Adjusted EBITDA Bookings $85M $2.9M $118M Revenue ($M) Adjusted EBITDA ($M) Bookings ($M) 100 $85M 4 $2.9 150 $118M $75M ($2.8) $68M 50 0 75 0 -4 0 Q2 16 Q3 16 Q2 16 Q3 16 Q2 16 Q3 16 Slightly above top end of our Swing positive, exceeded Marking a steep recovery
Slide 5: Focused on Improving Through Cycle Profitability
Focused on Improving Through Cycle Profitability Executing Lowering Reducing cost restructuring plans ALD investments structure by ~$30M ~$30M ~8M COGS ~$20M ~$10M ~22M OPEX $78M > Efforts are progressing to plan > Slowing future development > Quarterly adjusted EBITDA investments due to delay in br
Slide 6: CFO Financial Review
CFO Financial Review Sam Maheshwari 6 | Investor Presentation
Slide 7: Revenue Breakdown by Market and Geography
Revenue Breakdown by Market and Geography Q2 2016 Revenue by End Market Q3 2016 Revenue by End Market 18% 33% 12% Lighting, Display & Data Storage 58% Data Storage Lighting, Display & Power Electronics $24M Power Electronics $34M Foundational 16% Businesses Foundational Businesses $75M Scientific &
Slide 8: P&L Highlights
P&L Highlights GAAP Non-GAAP ($M) Q2 16 Q3 16 Q2 16 Q3 16 Revenue $75.3 $85.5 $75.3 $85.5 » OPEX lower than forecasted; benefitting from accelerated Gross Profit 31.4 33.5 31.9 34.4 cost reduction efforts and % 41.7% 39.1% 42.4% 40.3% certain one-time items R&D 21.5 19.9 20.6 18.9 » Adjusted EBITDA
Slide 9: Financial Highlights
Financial Highlights ($M) Q2 16 Q3 16 Cash & Short-term Investments 331 337 » Grew cash balance by ~$6M Accounts Receivable 42 50 » Generated positive cash flow from operations of $7M Inventories 91 87 » Reduced DOI; starting to Accounts Payable 35 27 consume inventory to support MOCVD demand Cash F
Slide 10: Q4 2016 Guidance
Q4 2016 Guidance GAAP Non-GAAP Revenue $85M–$100M $85M–$100M Gross Margins 37%–39% 38%–40% Net Income (Loss) ($13M)–($7M) ($3M)–$3M Earnings Per ($0.34)–($0.19) ($0.07)–$0.07 Share Adjusted EBITDA $0M–$6M Note: A reconciliation of GAAP to Non-GAAP financial measures is contained in the Back Up & Rec
Slide 11: Business Update & Outlook
Business Update & Outlook 11 | Investor Presentation
Slide 12: LED Industry Recovery is Underway
LED Industry Recovery is Underway Display backlighting demand is stabilizing • Display panel fundamentals improving; better than expected Q2 16 demand • Multiple factors supporting continued recovery in 2017 LED lighting trends support ~15% unit CAGR • Government initiatives spurring demand in the n
Slide 13: Veeco MOCVD – A Winning Value Proposition
Veeco MOCVD – A Winning Value Proposition Delivering value through our differentiated technology Leveraging our winning technology to capture breadth of LED opportunities EPIK 700 GaN System K475i AsP System > Recognized MOCVD leader in lighting/display LEDs > Rapidly gaining momentum for R/O/Y and
Slide 14: Veeco PSP – Market Trends Playing to our Strengths
Veeco PSP – Market Trends Playing to our Strengths Leader in single-wafer solvent solutions with proprietary ImmJET™ technology RF Filter demand is growing Advanced Packaging density increasing > Next gen wireless and carrier aggregation > Tighter dimensions require resist films require more RF Filt
Slide 15: Strengthening Our Foundational Business
Strengthening Our Foundational Business Leveraging technology expertise to capture adjacent market opportunities while responsibly managing mature markets #1 in Ion Beam Deposition & Etch #1 in Molecular Beam Epitaxy (MBE) > Leader in hard-disk drive (HDD) manufacturing > Leader in advanced material
Slide 16: Summary
Summary Leverage Drive technology operational expertise and leverage to leadership to win enhance organic growth shareholder opportunities value Continue Focus on positioning actively exploring Veeco for M&A opportunities profitable growth 16 | Investor Presentation
Slide 17: Q&A
Q&A 17 | Investor Presentation
Slide 18: Back Up & Reconciliation Tables
Back Up & Reconciliation Tables 18 | Investor Presentation
Slide 19: Note On Reconciliation Tables
Note On Reconciliation Tables These tables include financial measures adjusted for the impact of certain items; these financial measures are therefore not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These Non- GAAP financial measures exclude items such as: s
Slide 20: Supplemental Information—GAAP to Non-GAAP Reconciliation
Supplemental Information—GAAP to Non-GAAP Reconciliation US$ millions Q2 16 Q3 16 US$ millions Q2 16 Q3 16 US$ millions, except per share data Q2 16 Q3 16 Net Sales $75.3 $85.5 GAAP Net Income (Loss) ($32.1) ($69.6) GAAP Basic EPS (0.82) (1.78) GAAP Gross Profit 31.4 33.5 Add: Share-Based Comp 4.0 3
Slide 21: Q3 2016 GAAP to Non-GAAP Reconciliation
Q3 2016 GAAP to Non-GAAP Reconciliation Non-GAAP Adjustments Share-Based In millions, except per share data GAAP Compensation Amortization Other Non-GAAP Net Sales $85.5 $85.5 Gross Profit 33.5 0.6 0.4 34.4 Gross Margin 39.1% 40.3% Research and Development 19.9 (1.0) 18.9 Selling, General, and Admin
Slide 22: Q4 2016 Guidance GAAP to Non-GAAP Reconciliation
Q4 2016 Guidance GAAP to Non-GAAP Reconciliation Non-GAAP Non-GAAP Adjustments Adjustments Share-Based In millions, except per share data GAAP Compensation Amortization Other Non-GAAP Net Sales $85–$100 $85–$100 Gross Profit 31–39 1 — — 32–40 Gross Margin 37%–39% 38%–40% Net Income (Loss) ($13)–($7)