Veeco Instruments Inc. · NASDAQ:VECO
Veeco Instruments — Needham Growth Conference 2019
29 slides from Veeco Instruments's conference presentation, Jan 15, 2019
Slide 1: Investor Presentation
Investor Presentation Veeco Instruments Inc. January 15, 2019
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: Veeco Overview
Veeco Overview 3 Investor Presentation | © 2019 Veeco Instruments Inc.
Slide 4: Veeco Applies Technology to Tough Materials Problems
Veeco Applies Technology to Tough Materials Problems Semiconductor / Compound Data Advanced Packaging Semiconductor Storage Veeco is a Proven High Technology Capital Equipment Leader Solving Tough Materials Problems to Ramp Growing Markets 4 Investor Presentation | © 2019 Veeco Instruments Inc. MOCV
Slide 5: Veeco at a Glance
Veeco at a Glance ▪ Product & Technology Leadership ▪ Sales and Service in 10 Countries ▪ Over 800 Patents ▪ $443M 2018 YTD Revenue (Q1 - Q3 18) ▪ ~1,050 Employees ▪ $266M in Cash (Q3 18), $345M in Convertible Debt Dresden, Germany St. Paul, MN Munich, Germany Waltham, MA Somerset, NJ Seoul, Korea P
Slide 6: Our Technology Enables Megatrends
Our Technology Enables Megatrends 5G 3D Sensing / VCSEL MOCVD MOCVD High-Performance Autonomous Driving / Computing / AI LiDAR Laser Annealing MOCVD Ion Beam Lithography Lithography 6 Investor Presentation | © 2019 Veeco Instruments Inc. 5G – Fifth generation wireless technology AI – Artificial Inte
Slide 7: Veeco Customers Drive Megatrends
Veeco Customers Drive Megatrends OSATs, MEMS & RF Filters IDMs & Foundries Scientific & Industrial Compound Semi 7 Investor Presentation | © 2019 Veeco Instruments Inc.
Slide 8: Investment Highlights
Investment Highlights ▪ #1 or #2 in key markets ▪ Leveraging core technologies in profitable markets as LED market becomes commoditized ▪ Growth initiatives aligned to megatrends ▪ EUV mask blanks using ion beam deposition ▪ Enabling front end semiconductor with laser annealing ▪ Advanced packaging
Slide 9: Business Transition
Business Transition 9 Investor Presentation | © 2019 Veeco Instruments Inc.
Slide 10: 2019 – Focus on Foundational & Growth Markets
2019 – Focus on Foundational & Growth Markets ▪ Commodity blue LED business reducing significantly in 2019 ▪ Limited China exposure going forward ▪ Growth initiatives aligned with multiple megatrends ▪ Foundational business remains stable Foundational and Growth Revenue Combined are Expected to Incr
Slide 11: 2019 – Growth on a Solid Foundation
2019 – Growth on a Solid Foundation Key Foundational Businesses Key Growth Initiatives ▪ Service Business ▪ EUV mask blanks using ion beam deposition ▪ Data Storage ▪ Enabling front end semiconductor with laser annealing ▪ Government Labs & Universities ▪ Advanced packaging using lithography ▪ Optic
Slide 12: 2019 – Improving Profitability
2019 – Improving Profitability ▪ Aggressive SG&A reduction ▪ Target >40% gross margin for 2019 ▪ Preserving R&D investments for growth ▪ Gross margin benefits from improving mix Improving Operating Expenses and Gross Margin * Based on midpoint of guidance for Q4 18 12 Investor Presentation | © 2019
Slide 13: Growth Initiatives
Growth Initiatives 13 Investor Presentation | © 2019 Veeco Instruments Inc.
Slide 14: EUV Mask Blanks for Front-End Semiconductor Manufacturing
EUV Mask Blanks for Front-End Semiconductor Manufacturing Market Drivers Enabling Advanced Nodes Veeco Advantage ▪ Artificial Intelligence ▪ High Performance Computing 28nm 14nm 10nm 7nm 5nm ▪ Autonomous Driving Increasing Transistor Density EUV Lithography Multi Patterning Single Patterning ▪ 20 ye
Slide 15: Laser Annealing for Front-End Semiconductor Manufacturing
Laser Annealing for Front-End Semiconductor Manufacturing Market Drivers Enabling Advanced Nodes Veeco Advantage Device scaling enabling: Semiconductor Node ▪ Artificial Intelligence <10nm ▪ High Performance Computing ▪ Graphics Processing Units 40-14nm Melt Laser Annealing 90-40nm Rapid Thermal Pro
Slide 16: Lithography for Advanced Packaging
Lithography for Advanced Packaging Market Drivers Enable Better System Performance Veeco Advantage ▪ Artificial intelligence Smaller Form Lower Cost ▪ Automotive Factor ▪ Mobility ▪ Gaming Higher Improved Performance Battery Life ▪ Highly automated ▪ Primarily used for logic applications ▪ Superior
Slide 17: VCSEL Production Utilizing Proven Technology Platform
VCSEL Production Utilizing Proven Technology Platform Market Drivers Forecasted VCSEL Area (M mm2)* Veeco Advantage: TurboDisc Platform ▪ 3D Sensing / World Facing ▪ Autonomous Vehicle Sensing (LiDAR) ▪ Data / Telecom ▪ Highest productivity ▪ Lowest cost of ownership ▪ Maximum up-time ▪ Excellent un
Slide 18: Longer Term Growth Megatrends
Longer Term Growth Megatrends GaN & GaAs Micro LED RF Devices (5G) Sunlight readability, power efficiency & GaN & GaAs based RF high brightness are the advantages of devices are more efficient this next generation display technology. than silicon based power devices. Applications in base stations an
Slide 19: Q3 2018 Financial Update
Q3 2018 Financial Update 19 Investor Presentation | © 2019 Veeco Instruments Inc.
Slide 20: Q3 2018 Highlights
Q3 2018 Highlights Q3 $100M $127M $8.0M 11¢ Results Bookings Revenue Non-GAAP Non-GAAP EPS Operating Income ▪ Bookings growth in Front-End Semiconductor ▪ Generated positive cash flow ▪ Ending backlog of $276M ▪ Ending cash balance $266M ▪ Profitability above the mid-point of guidance ▪ Repurchased
Slide 21: 2019 Focus
2019 Focus Innovate Penetrate Improve technology leadership market growth profitability ▪ Solve tough materials ▪ Ramp EUV mask blank ▪ Improve gross margin engineering challenges systems ▪ Reduce operating ▪ Execute product roadmaps ▪ Advanced node insertion for expenses Laser Anneal ▪ Launch VCSEL
Slide 22: Thank You
Thank You Veeco Instruments www.veeco.com Ver:11072018
Slide 23: Backup & Reconciliation Tables
Backup & Reconciliation Tables 23 Investor Presentation | © 2019 Veeco Instruments Inc.
Slide 24: P&L Highlights
P&L Highlights GAAP Non-GAAP $ millions (except per share amounts) Q2 18 Q3 18 Q2 18 Q3 18 Revenue $157.8 $126.8 $157.8 $126.8 Gross Profit 55.4 46.4 56.5 48.4 Gross Margin 35.1% 36.6% 35.8% 38.2% R&D 24.9 23.5 23.9 22.8 SG&A & Other 24.7 20.2 21.9 17.6 Operating Income/(Loss) (261.2) (3.9) 10.8 8.0
Slide 25: Balance Sheet Highlights
Balance Sheet Highlights $ millions Q2 18 Q3 18 Cash & Short-Term Investments 261 266 Accounts Receivable 134 91 Inventories 146 150 Accounts Payable 65 65 Long-Term Debt 281 284 Cash Flow from Operations (46) 18 DSO (days) 76 64 DOI 130 173 DPO 58 74 Generated Cash While Repurchasing $10M in Shares
Slide 26: Note on Reconciliation Tables
Note on Reconciliation Tables These tables include financial measures adjusted for the impact of certain items; these financial measures are therefore not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These Non-GAAP financial measures exclude items such as: sh
Slide 27: Supplemental Information—GAAP to Non-GAAP Reconciliation
Supplemental Information—GAAP to Non-GAAP Reconciliation US$ millions Q2 18 Q3 18 US$ millions Q2 18 Q3 18 US$ millions, except per share amounts Q2 18 Q3 18 Net Sales $157.8 $126.8 GAAP Net Income (Loss) $(237.6) $(9.0) GAAP Basic EPS (5.02) (0.19) GAAP Gross Profit 55.4 46.4 Add: Share-Based Comp
Slide 28: Q3 2018 GAAP to Non-GAAP Reconciliation
Q3 2018 GAAP to Non-GAAP Reconciliation Non-GAAP Adjustments Share-Based In millions, except per share amounts GAAP Compensation Amortization Other Non-GAAP Net Sales $126.8 $126.8 Gross Profit 46.4 0.5 1.5 48.4 Gross Margin 36.6% 38.2% Research and Development 23.5 (0.7) 22.8 Selling, General, and
Slide 29: Q4 2018 Guidance GAAP to Non-GAAP Reconciliation
Q4 2018 Guidance GAAP to Non-GAAP Reconciliation Non-GAAP Adjustments Share-Based In millions, except per share amounts GAAP Compensation Amortization Other Non-GAAP Net Sales $85–$105 $85–$105 Gross Profit 30–39 1 — — 31–40 Gross Margin 35%–37% 36%–38% Net Income (Loss) $(26)–$(19) 4 4 7 $(11)–$(4)