Slide 1: Q1 2016 Conference Call
Q1 2016 Conference Call Veeco Instruments Inc. May 4, 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: Q1 2016 Results Summary
Q1 2016 Results Summary Revenue $78M Non-GAAP Gross Margin* 42% Adjusted EBITDA* ($2.1M) Non-GAAP EPS* ($0.15) Bookings $62M Cash & Short-term Investments $349M** Continue to execute well in a tough business climate *A reconciliation of GAAP to Non-GAAP financial measures is contained in the Back Up
Slide 5: CFO Financial Review
CFO Financial Review Sam Maheshwari 5 | Investor Presentation
Slide 6: P&L Highlights (Non-GAAP)
P&L Highlights (Non-GAAP) ($M) Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Revenue $98.3 $131.4 $140.7 $106.5 $78.0 Gross Profit 37.0 49.8 55.0 39.2 32.5 % 37.7% 37.9% 39.1% 36.8% 41.7% SG&A** 19.1 21.0 18.2 18.7 17.0 R&D 18.0 19.0 18.2 19.3 21.0 OPEX 37.1 40.0 36.4 38.0 38.0 % 37.7% 30.5% 25.9% 35.7% 48.7% Adjus
Slide 7: Revenue Breakdown by Market and Geography
Revenue Breakdown by Market and Geography Q4 2015 Revenue by End Market Q1 2016 Revenue by End Market 17% 20% 19% 30% Scientific & Industrial Advanced Packaging, Scientific & Industrial Advanced Packaging, MEMS & RF MEMS & RF 16% $107M 22% $78M Data Storage Data Storage 47% 29% Lighting, Display & L
Slide 8: Financial Highlights
Financial Highlights ($M) Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Cash & Short-term Investments 393 396 403 385 349 Accounts Receivable 64 83 47 50 56 Inventories 57 64 70 77 77 Accounts Payable 41 46 25 30 31 Cash Flow from Operations 4 8 10 (6) (19) DSO 59 57 30 42 65 DOI 89 72 73 101 157 DPO 59 51 26 41 61
Slide 9: Q2 2016 Guidance
Q2 2016 Guidance GAAP Non-GAAP Net Sales $70M–$83M $70M–$83M Gross Margins 38%–40% 39%–41% Adjusted EBITDA N/A ($6M)–$0M Net income (Loss) ($23M)–($17M) ($11M)–($5M) EPS ($0.59)–($0.44) ($0.29)–($0.14) 9 | Investor Presentation
Slide 10: Business Update & Outlook
Business Update & Outlook 10 | Investor Presentation
Slide 11: Current Business Outlook
Current Business Outlook LED Lighting & Display • LED lighting adoption is growing, however, TV demand remains weak • Customers focused on preserving cash and improving profitability • MOCVD equipment investments remain muted MEMS & RF • Weaker than expected demand for high-end smartphones • Custome
Slide 12: Focusing on our Strategic Objectives
Focusing on our Strategic Objectives Strengthening Expanding Investing Maintaining our core into adjacent markets for growth operational focus Leveraging our existing Diversify our revenue Prioritizing investments Tightly controlling costs technologies to capitalize stream to provide stability in ar
Slide 13: Applications Enabled by Veeco's MOCVD Technology Are Expanding
Applications Enabled by Veeco’s MOCVD Technology Are Expanding System Target Applications Lighting Blue LED EPIKTM LED Lighting, Display Smart-lighting 5G K475iTM ROY* LED, IR Sensor, IR Sensors LiFi Laser Diode, Solar Communication Power Device PropelTM GaN Power Device Display Display Blue Blue LE
Slide 14: Veeco PSP Advantage for Through Silicon Via Reveal
Veeco PSP Advantage for Through Silicon Via Reveal ~60% Veeco cost advantage vs. incumbent TSV > Fewer process steps and fewer tools, CHIP lower cost and reduce risk INTERPOSER SUBSTRATE TSV Reveal Process Cost Comparison 100% 2 x Metrology % Total Process Cost 1 x Clean 80% Integrated approach prov
Slide 15: Summary
Summary Strengthening Expanding our core into adjacent markets LED Lighting & Display Advanced Packaging Leveraging our technology to Formalizing customer engagements capture opportunities beyond LED for TSV reveal Investing Maintaining for growth operational focus Front-end Semi Proactively lowerin
Slide 16: Q&A
Q&A 16 | Investor Presentation
Slide 17: Back Up & Reconciliation Tables
Back Up & Reconciliation Tables 17 | Investor Presentation
Slide 18: 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 19: Supplemental Information—GAAP to Non-GAAP Reconciliation
Supplemental Information—GAAP to Non-GAAP Reconciliation US$ millions, except per share data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Net Sales $98.3 $131.4 $140.7 $106.5 $78.0 GAAP Net Income (Loss) ($19.1) ($8.4) $5.3 ($9.8) ($15.5) GAAP Gross Profit 35.1 49.1 54.3 38.8 32.0 Add
Slide 20: Q1 2016 GAAP to Non-GAAP Reconciliation
Q1 2016 GAAP to Non-GAAP Reconciliation Non-GAAP Adjustments Share-based Acquisition In millions, except per share data GAAP Compensation Related Other Non-GAAP Net Sales $78.0 — — — $78.0 Gross Profit 32.0 0.5 — — 32.5 Gross Margin 41.0% 41.7% SG&A** 19.8 (2.7) (0.1) — 17.0 R&D 22.1 (1.1) — — 21.0
Slide 21: Q2 2016 Guidance GAAP to Non-GAAP Reconciliation
Q2 2016 Guidance GAAP to Non-GAAP Reconciliation Non-GAAP Adjustments Share-Based Acquisition In millions, except per share data GAAP Compensation Related Other Non-GAAP Net Sales $70–$83 $70–$83 Gross Profit 26–34 1 — — 27–35 Gross Margin 38%–40% 39%–41% Adjusted EBITDA ($6)–$0 Net Income (Loss) ($