Slide 1: Q3 2010 Highlights Earnings Conference Call
Q3 2010 Highlights Earnings Conference Call 10/25/10
Slide 2: Introduction: Deb Wasser, SVP, Investor Relations
Introduction: Deb 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: John Peeler, CEO
John Peeler, CEO
Slide 5: Q3 2010 – Record Performance Across the Board
Q3 2010 – Record Performance Across the Board Revenue increased 25% from Q2 ’10 and was up 270% from prior year GAAP EPS was $2.16 and non-GAAP EPS was $1.46 – record levels and ahead of guidance Gross margins 49% up 4 points sequentially * See reconciliation to GAAP at end of Presentation $ Million
Slide 6: Q3'10 Revenue Performance by Segment
Q3’10 Revenue Performance by Segment LED & Solar $243M Up 31% sequentially and over 350% year-over-year MOCVD Revenues $236M, shipped record level of systems >100 systems Data Storage $34M Down slightly sequentially but up 59% year-over-year EBITA improved year-over-year in both of our businesses $2
Slide 7: Q3'10 Bookings Performance by Segment
Q3’10 Bookings Performance by Segment LED & Solar $243M Primarily MOCVD systems Down 7% sequentially but up 36% year over year Data Storage $35M Down 30% sequentially but up over 100% year over year B to B = 1.00; Backlog $569M $243M $35M Total: $278M $243M $35M 87% 13% LED & Solar Data Storage
Slide 8: Q3 2010 Bookings Highlights
Q3 2010 Bookings Highlights LED & Solar - $243M mostly MOCVD 15 customers placed MOCVD orders China strength continues – Elec-Tech, Sanan, Tsinghua Tongfang and others Additional penetration in Taiwan – Epistar, Arima, GPI and Lextar TurboDisc K465i continues to win business as best performing, lowe
Slide 9: Veeco's Broad-Based Investment in Asia
Veeco’s Broad-Based Investment in Asia – Infrastructure, Equipment and People 10/14/10: Veeco announces >$25M investment to help ensure customers’ successful LED industry ramp Three new state-of-the-art facilities Expansion to include ~50 new process applications and technical support personnel LED
Slide 10: Additional Financial Highlights Dave Glass, CFO
Additional Financial Highlights Dave Glass, CFO
Slide 11: P&L Highlights
P&L Highlights 49.9 0.0 91.1 GAAP Net Income 63.6 6.7 95.5 EBITA 59.8 2.5 91.6 Operating Income 44.6% 40.9% 48.9% Gross Margin 98.8 30.5 135.5 Gross Profit $221.4 $74.7 $277.1 Revenues Q2’10 Q3’09 Q3’10 ($M except GM) See reconciliation to GAAP at end of presentation
Slide 12: Q3 '10 Segment Performance
Q3 ‘10 Segment Performance (10%) (30%) (7%) Change 63.6 95.5 25% 221.4 277.1 310.5 278.2 Total Veeco (3.4) (5.7) Unallocated Corporate 9.6 9.4 (3%) 35.7 34.5 50.0 35.0 Data Storage EBITA Revenue Bookings $260.4 Q2’10 $242.6 Q3’10 $185.6 Q2’10 31% Change $91.8 Q3’10 $57.4 $243.2 LED & Solar Q2’10 Q3’
Slide 13: Veeco Balance Sheet Performance
Veeco Balance Sheet Performance 538.3 103.3 943.7 45.5 528.2 $466.8* 09/30/2010 06/30/2010 472.0 Shareholder’s Equity 102.6 Long-term Debt (including current portion) 806.4 Total Assets 45.7 Fixed Assets, Net 456.8 Working Capital $414.8 Cash & Short-term Investments ($M) * Includes restricted cash
Slide 14: Strong Cash Generation Provides Operational & Strategic Flexibility
Strong Cash Generation Provides Company with Operational & Strategic Flexibility *Excluding stock buyback. Includes Metrology sale in Q4’10 and restricted cash of $31.6M at 9/30/10 and $54.6M at 12/31/10. >$700M* $467M $415M $345M $0 $100 $200 $300 $400 $500 $600 $700 $800 3/31/2010 6/30/2010 9/30/2
Slide 15: Q4 2010 Business Conditions and Outlook
Q4 2010 Business Conditions and Outlook Veeco begins fourth quarter with backlog of $569M Bookings: Expected to be equal to or better than Q3 2010 LED & Solar: Strong quoting activity continues particularly in China and Taiwan: anticipate another strong quarter Data Storage: Overall market condition
Slide 16: Top Line Growth and OPEX Management Drives Record Profitability
Veeco Top Line Growth and OPEX Management Drives Record Profitability 35% $43M (15%) 49% $277M Q3 ’10 34-36% $47-50M (16-17%) 50-51% $285-320M Q4 ’10F 29% $38M (17%) 45% $221M Q2’10 21% 18% EBITA% $31M (23%) $34M (29%) Operating Spending 42% 45% GM $135M $119M Revenue Q1’10 Q4’09 See reconciliation
Slide 17: Q4 2010 Guidance
Q4 2010 Guidance Revenue $285-320M GAAP EPS $1.96-2.35 per share Non-GAAP EPS $1.46-1.74 per share (utilizing 35% tax rate) Note: Share Count 43 Million
Slide 18: LED Lighting: Difficult to Forecast Timing, but Large Size is Undisputable
LED Lighting: Difficult to Forecast Timing, but Large Size is Undisputable LED benefits versus other forms of lighting (energy efficiency, “green,” high performance, long life) are real LED industry continues on pace to deliver 35% per year increase of light output (lumens/watt) with 20% per year co
Slide 19: Beyond Q4 – Into 2011
Beyond Q4 – Into 2011 We will enter 2011 with a large backlog and currently expect 1H11 revenues to remain strong and well above 1H10 LED: Difficult to predict orders for 1H 2011 with many moving pieces Korean customer tool digestion – how long will it last? Customers are committed to full penetrati
Slide 20: Q&A Session
Q&A Session
Slide 21: Back-Up
Back-Up
Slide 22: Income Statement
Income Statement 31,540 42,175 32,375 42,258 Diluted 31,540 39,508 31,608 39,946 Basic Weighted average shares outstanding: $ (1.09) $ 3.91 $ 0.04 $ 2.04 Income (loss) (0.13) 0.02 0.04 (0.12) Discontinued operations $ (0.96) $ 3.89 $ - $ 2.16 Continuing operations Diluted : $ (1.09) $ 4.17 $ 0.04 $
Slide 23: Balance Sheet
Balance Sheet $ 605,372 $ 943,696 Total liabilities and equity 359,059 538,272 Equity 107,195 106,397 Total non-current liabilities 1,192 315 Other liabilities 100,964 103,063 Long-term debt 5,039 3,019 Deferred income taxes 139,118 299,027 Total current liabilities 212 225 Current portion of long-t
Slide 24: Reconciliation
Reconciliation NOTE - The above reconciliation is intended to present Veeco's operating results, excluding certain items and providing income taxes at a 35% statutory rate. This reconciliation is not in accordance with, or an alternative method for, generally accepted accounting principles in the Un
Slide 25: Guidance
Guidance NOTE - The above reconciliation is intended to present Veeco's operating results, excluding certain items and providing income taxes at a 35% statutory rate. This reconciliation is not in accordance with, or an alternative method for, generally accepted accounting principles in the United S
Slide 26: Segment Info
Segment Info ** Refer to footnotes on 'Reconciliation of operating income (loss) to earnings (loss) from continuing operations excluding certain items' for further details. $ (7,285) $ 187,238 $ 6,671 $ 95,500 EBITA (loss)** 304 - - - Asset impairment 1,526 - - - Inventory write-off 4,770 (179) 781
Slide 27: Historic Results Reclassified for Continuing Operations (Excluding Metrology Business)
Historic Results Reclassified for Continuing Operations (Excluding Metrology Business)
Slide 28: Income Statement Annual Periods
Income Statement Annual Periods 31,059 31,020 31,347 32,628 Diluted 30,492 31,020 31,347 32,628 Basic Weighted average shares outstanding $ (0.11) $ (0.74) $ (1.62) $ (0.44) As adjusted (0.59) (0.12) 0.78 0.04 Adjustment for discontinued operations $ 0.48 $ (0.62) $ (2.40) $ (0.48) As originally rep
Slide 29: Income Statement Quarterly Periods
Income Statement Quarterly Periods 31,515 31,497 32,375 37,742 42,269 43,506 Diluted 31,515 31,497 31,608 35,623 38,784 39,761 Basic Weighted average shares outstanding $ (0.56) $ (0.40) $ - $ 0.43 $ 0.54 $ 1.14 As adjusted 0.10 0.07 (0.04) (0.07) (0.08) (0.06) Adjustment for discontinued operations
Slide 30: EBITA
EBITA October 26, 2009 April 26, 2010 July 26, 2010 Note: Refer to the following press release dates for the reconciliation of operating income (loss) to EBITA (loss). All adjustments were applied to operating income (loss). $ (8,775) $ (5,182) $ 6,671 $ 21,936 $ 28,100 $ 63,641 As adjusted 898 1,18